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Digested by: Dave Abby M.

Alano
SPOUSES SERAFIN SI AND ANITA BONODE SI, petitioners,vs.
COURT OF APPEALS, SPOUSES JOSE ARMADA and REMEDIOS ALMANZOR
G.R. No. 122047 October 12, 2000
QUISUMBING, J.:

Facts:

Spouses Armada transferred their property to the names of their three sons
namely, Crisotomo, Jose and Severo. Crisostomo through Cresencia executed a deed
of sale in favor Anita Si.

Spouses Jose Armada (other brother) filed a complaint to annul the sale on the
ground that there was no written notice of such sale whereas the deed stated that “the
co-owners are not interested in buying the land”. Further, there was misrepresentation
on the citizenship of Cresencia is a Filipino citizen.

Petitioners claimed that there was really no co-ownership since the parents
executed three deeds of sale assigning specific properties to the brothers. Since there
is no-ownership it follows that there is no right to redemption. Petitioners pointed out
that it was only because the brothers failed to submit a subdivision plan which is the
reason why there is only one certificate of title.

Lower court dismissed the petition. CA reversed and said that co-ownership still
exists and that the land was undivided. Petitioners filed a motion for new trial on the
basis that there was annotation at the back of the original TCT due to the sale in favor
of the brothers. CA denied because the reglementary period had lapsed and the
decision has become final and executory.

Issue: Can private respondents be considered as co-owners and exercise the right of
redemption?

Held: No. Under Art. 484 of the Civil Code, there is co-ownership whenever the
ownership of an undivided thing or right belongs to different persons. There is no co-
ownership when the different portions owned by different people are already concretely
determined and separately identifiable, even if not yet technically described.

In the case at hand, the portion sold to defendant spouses Si by defendants


Crisostomo Armada and Cresenciana Armada was concretely determined and
identifiable. The fact that the three portions are embraced in one certificate of title does
not make said portions less determinable or identifiable or distinguishable. Hence, no
right of redemption among co-owners exists.

Digested by: Dave Abby M. Alano

ELNA MERCADO-FEHR, petitioner, vs. BRUNO FEHR, respondent.


G.R. No. 152716, October 23, 2003
PUNO, J.:

Facts:

In 1983, after two years of long-distance courtship, Elna moved in to Bruno's


residence and lived with him. During the time they lived together, they purchased Suite
204, at LCG Condominium on installment. They got married in 1985.

In 1998, the trial court declared the marriage between Elna and Bruno void ab
initio under Article 36 of the Family Code and ordered the dissolution of their conjugal
properties. The properties were divided into three: 1/3 for Elna, 1/3 for Bruno and 1/3 for
the children. The custody of children was awarded to Elna, being the innocent spouse.
Accordingly, Elna is directed to transfer ownership of Suite 204 LCG Condominium
because it was declared to have been the exclusive property of Bruno Fehr, acquired
prior his marriage.

Elna filed a motion for reconsideration of said order, alleging that Suit 204 was
purchased when they were living exclusively with each other without the benefit of
marriage, hence the rules of co-ownership should apply in accordance with Art. 147.
The court held in an order that Art. 147 of the Family Code should apply, being the
marriage void ab initio. However, the court reminded Elna of the previous agreement in
dividing of properties and/or proceeds from the sale thereof proportionately among
them. It also affirmed of the previous ruling regarding the Suite 204. Elna filed special
civil action for certiorari and prohibition with the Court of Appeals. The CA in its Decision
dismissed the petition for review for lack of merit.

Issue: Is the Suit 204 of LGC Condominium an exclusive property of Bruno Fehr?

Held: No. SC held that Suite 204 of LCG Condominium is a common property of Elna
and Bruno and the property regime of the parties should be divided in accordance with
the law on co-ownership. Suite 204 was acquired during the parties’ cohabitation.
Accordingly, under Article 147 of the Family Code, said property should be governed by
the rules on co-ownership.

Article 147 applies in this case because (1) Elna and Bruno are capacitated to marry
each other; (2) live exclusively with each other as husband and wife; and (3) their
marriage is void under Article 36. All these elements are present in the case at bar.
Digested by: Dave Abby M. Alano

APOLONIA LL. OCAMPO et. al ,petitioners,


vs. FIDELA LL. OCAMPO, et. al, respondents.
G.R. No. 150707 April 14, 2004
PANGANIBAN, J.:

Facts: Jose Ocampo and Juana Llander-Ocampo have ten children, including the
petitioners and respondents to this case. In the celebration of their marriage, they
acquired several properties, all of which are owned in common by their children.
However, the residential/commercial lot in Nabua, Camarines Sur is ostensibly owned
by FidelaOcampo, although the latter acknowledges that the same is co-owned by her
and her siblings.

Petitioners also filed a supplemental complaint where they allege that


FidelaOcampo cancelled the first TCT of the lot in Nabua and issued a new one in the
form of Deed of Donation Inter Vivos in favor of Belen Ocampo-Barrito and her spouse
Vicente Barrito. Both the donor of the donee are notoriously aware that the lot is still
under dispute in the petitioners' first complaint, nevertheless, the two still pursued the
donation. Petitioners also allege that the transfer of ownership from Fidela to Belen,
daughter of another defendant Felicidad, is tainted with fraud, actual and deliberate, to
deprive plaintiffs of their legitimate share therein, knowing as they do that the same are
a co-ownership of the original parties plaintiffs and defendants herein.

Defendants, on the other hand, allege that Fidela has been the absolute owner of
the property since 1949, and that its title is free from all encumbrances and adverse
claims. In 1984, Fidela conveyed the property to Belen via a Deed of Donation Inter
Vivos and since September 13, 1987, Belen has been the absolute owner of the same
property.

The Court of Appealsheld that other than the Acknowledgment of Co-ownership


executed by Respondent FidelaOcampo, no documentary evidence was offered to
establish petitioners’ claim of co-ownership. It also said that respondents were able to
give clear proof of their ownership of the property: the Transfer Certificate of Title and
the corresponding Tax Declaration in the name of Fidela, and later of Belen Ocampo-
Barrito.

Issue: Was there co-ownership between the parties?

Held: No. The Civil Code provides that an essential requisite of a contract of mortgage
is that the mortgagor be the absolute owner of the thing mortgaged. Co-ownership
cannot be presumed even if only a portion of the property was mortgaged to Apolonia,
because a co-owner may dispose only of one’s interest in the ideal or abstract part of
the undivided thing co-owned with others. The effect of a mortgage by a co-owner shall
be limited to the portion that may be allotted to that person upon the termination of the
co-ownership.In this case, Fidela mortgaged a definite portion of the property and thus
negated any acknowledgement of co-ownership.
Digested by: Dave Abby M. Alano

LILIA SANCHEZ, Petitioner, vs.


COURT OF APPEALS, HON. VICTORINO S. ALVARO as Presiding Judge, RTC-Br.
120, Caloocan City, and VIRGINIA TERIA, Respondents.
G.R. No. 152766 June 20, 2003
BELLOSILLO, J.:

Facts:

Lilia Sanchez, constructed a house on a lot owned by her parents-in-law. The lot
was registered under TCT with the following co-owners: Eliseo Sanchez married to
Celia Sanchez, Marilyn Sanchez married to NicanorMontalban, Lilian Sanchez, widow,
Nenita Sanchez, single, Susana Sanchez married to Fernando Ramos, and Felipe
Sanchez.

On 20 February 1995, the lot was registered imder a TCT in the name of private
respondent Virginia Teria by virtue of a Deed of Absolute Sale supposed to have been
executed by all six (6) co-owners in her favor.Lilia Sanchez claimed that she did not
affix her signature on the document and subsequently refused to vacate the lot, thus
prompting Virginia Teria to file an action for recovery of possession of the aforesaid lot
with the MTC

The MTC decided in favor of Teria, declaring that the sale was valid only to the
extent of 5/6 of the lot and the other 1/6 remaining as the property of petitioner, on
account of her signature in the Deed of Absolute Sale having been established as a
forgery. Upon appeal, the RTC affirmed the lower court’s decision.

On 28 April 1999 private respondent started demolishing petitioner’s house


without any special permit of demolition from the court.Due to the demolition of her
house which continued until 24 May 1999 petitioner was forced to inhabit the portion of
the premises only Petitioner filed her Petition for Relief from Judgment with the RTC on
the ground that she was not bound by the inaction of her counsel who failed to submit
petitioner’s appeal memorandum. The RTC denied the petition. The CA also dismissed
the petition upon appeal for lack of merit.

Issue: Is petitioner bound by the sale executed by her co-owners?

Held: No. Article 493 of the Civil Code gives the owner of an undivided interest in the
property the right to freely sell and dispose of it, i.e., his undivided interest. He may
validly lease his undivided interest to a third party independently of the other co-
owners.But he has no right to sell or alienate a concrete, specific or determinate part of
the thing owned in common because his right over the thing is represented by a quota
or ideal portion without any physical adjudication.

The metes and bounds of petitioner’s lot has not been designated. As she was
not a party to the Deed of Absolute Sale voluntarily entered into by the other co-owners,
her right to 1/6 of the property must be respected. Partition needs to be effected to
protect her right to her definite share and determine the boundaries of her property.
Such partition must be done without prejudice to the rights of private respondent
Virginia Teria as buyer of the 5/6 portion of the lot under dispute.
Digested by: Dave Abby M. Alano

CARMEN FANGONIL - HERRERA, Petitioner, vs. TOMAS FANGONIL, PURA


FANGONIL TINO, MARINA FANGONIL, MARIANO FANGONIL, MILAGROS
FANGONIL-LAYUG and VICTORIA FANGONIL ESTOQUE,Respondents.
G.R. No. 169356 August 28, 2007
CHICO-NAZARIO, J.:

Facts: Petitioners and respondents are children of the late Fabian and Maria
LlorenFangonil. The spouses died intestate, leaving an estate consisting of seven
parcels of land. Prior to their death, transactions involving parcels number six and seven
took place. A portion of the sixth land and parcel seven were sold with a right to
repurchase to Oribello and Estacion, respectively.

Petitioner Carmen Fangonilrepurchased and redeemed these properties in 1956


and 1959. In 1995, six of the seven children, excluding petitioner, filed a petition for
judicial partition of the seven parcels of land.

Eleven years after the execution of the extrajudicial settlement, petitioner


executed an affidavit refuting the portions pertaining to parcels 6 and 7. Petitioner
opposed claiming exclusive ownership over said parcels, and that the right to claim by
the respondents had long prescribed as a result of their inaction.

RTC ruled in favor of the respondents and partitioned the subject properties,
including parcels 6 and 7. Upon appeal to the Court of Appeals, the decision of the RTC
was affirmed in toto. Hence this petition.

Issue:Can petitioner’s possession of parcels 6 and 7 ripen into exclusive ownership?

Held:No. Petitioner's possession of parcels 6 and 7 did not ripen into sole and exclusive
ownership thereof. Prescription applies to adverse, open, continuous, and exclusive
possession.

In order that a co-owner's possession may be deemed adverse to the other co-owners,
the following elements must concur:

(1) that he has performed unequivocal acts of repudiation amounting to an


ouster of the other co-owners;

(2) that such positive acts of repudiation have been made known to the
other co-owners; and

(3) that the evidence thereon must be clear and convincing.


As a rule, prescription does not run in favor of a co-heir or co-owner as long as
he expressly or impliedly recognizes the co-ownership; and he cannot acquire by
prescription the share of the other co-owners, absent a clear repudiation of the co-
ownership. An action to demand partition among co-owners is imprescriptible, and each
co-owner may demand at any time the partition of the common property

In this case, petitioner effected no clear and evident repudiation of the co-
ownership.Petitioner’s only act of repudiation of the co-ownership was when she
refused to honor the extrajudicial settlement in 1994.
Digested by: Dave Abby M. Alano

CELESTINO BALUS, Petitioner, vs. SATURNINO BALUS and LEONARDA BALUS


VDA. DE CALUNOD, Respondents.
G.R. No. 168970, January 15, 2010
PERALTA, J.:

Facts On January 3, 1979, Rufo mortgaged a parcel of land as security for a loan he
obtained from the Rural Bank of Maigo, Lanao del Norte. Rufo failed to pay his loan.
The mortgaged property was foreclosed and was subsequently sold to the Bank as the
sole bidder at a public auction held for that purpose. As a result, a Certificate of Sale
was executed by the sheriff in favor of the Bank, and the property was not redeemed
within the period allowed by law. On January 25, 1984, the sheriff executed a Definite
Deed of Sale in the Bank’s favor. Thereafter, a new title was issued in the name of the
Bank. Subsequently Rufo died on July 6, 1984. On October 10, 1989, herein petitioner
and respondents executed an Extrajudicial Settlement of Estate adjudicating to each of
them a specific one-third portion of the subject property consisting of 10,246 square
meters. The Extrajudicial Settlement also contained provisions wherein the parties
admitted knowledge of the fact that their father mortgaged the subject property to the
Bank and that they intended to redeem the same at the soonest possible time.

Three years after the execution of the Extrajudicial Settlement, herein respondents
bought the subject property from the Bank. Meanwhile, petitioner continued possession
of the subject lot.

Respondents filed a Complaint for Recovery of Possession and Damages against


petitioner, contending that they had already informed petitioner of the fact that they were
the new owners of the disputed property, but the petitioner still refused to surrender
possession of the same to them.

The RTC held that the right of petitioner to purchase from the respondent's his share in
the disputed property was recognized by the provisions of the Extrajudicial Settlement
of Estate, which the parties had executed before the respondents bought the subject lot
from the Bank. It was also contended that petitioners and respondents had become co-
owners. Upon appeal with the CA, the courtreversed the decision of the RTC and
ordering petitioner to immediately surrender possession of the subject property to the
respondents. Hence, this petition

Issue: Can the petitioner and the respondent be considered co-owners of the subject
property?

Held: No. Rufo lost ownership of subject property during his lifetime, and cannot be
considered an estate which his descendants may claim. Hence, the disputed lot did not
pass into the hands of petitioner and respondents as compulsory heirs of Rufo at any
given point in time.

Furthermore, there is nothing in the subject Extrajudicial Settlement to indicate any


express stipulation for petitioner and respondents to continue with their supposed co-
ownership of the contested lot. On the contrary, a plain reading of the provisions of the
Extrajudicial Settlement would not, in any way, support petitioner's contention that it was
his and his sibling's intention to buy the subject property from the Bank and continue
what they believed to be co-ownership thereof.
Case Digest by: Eunice L. Ambrocio

PASCUAL VS. BALLESTEROS

G.R. No. 186269. February 15, 2012.

REYES, J.:

Facts:

This case involves a 1,539 square meter parcel of land in Laoag City.The subject property is owned by
the following persons: (1) the spouses Albino and Margarita Corazon Mariano, 330 square meters; (2)
Angela Melchor, 466.5 square meters; and (3) the spouses Melecio and Victoria Melchor, 796.5 square
meters.

Upon the death of the Spouses Melchor, their share in the subject property was inherited by their
daughter Lorenza Melchor Ballesteros (Lorenza). Subsequently, Lorenza and her husband Antonio
Ballesteros) acquired the share of Angela Melchorin the subject property by virtue of an Affidavit of
Extrajudicial Settlement with Absolute Sale dated October 1, 1986.

On August 11, 2000, Margarita Mariano, then already widowed, together with her children, sold their
share to Spouses Pascual and Francisco. These spouses caused the cancellation of TCT No. 30375 and
TCT No. T-32522 was then issued in their names together with Angela and Spouses Melchor.

Lorenza and Antonio Ballesteros, the respondents, claimed that they did not receive any written notice of
the sale in favor of Spouses Pascual and Francisco. They filed with the Regional Trial Court (RTC) of
Laoag City a Complaint for legal redemption against the spouses Pascual. They contend that they are
entitled to redeem the portion of the subject property sold to the spouses for being co-owners of the
property. But Spouses Pascual claim that there is no co-ownership because shares of the registered
owners had already been particularized, specified and subdivided thus, they have no right of legal
redemption.

Issue:

Whether the right of legal redemption was reasonably exercised by the Ballesteros spouses within the 30-
day redemption period under Article 1623 of the Civil Code.

Ruling:

Yes. The Spouses Ballesteros have reasonably exercised their right of legal redemption.

For the Pascualspouses failure to adduce any evidence showing that the respective shares of each of the
registered owners thereof were indeed particularized, specified and subdivided – the subject property is
deemed held under co-ownership.

In this view, the right of legal redemption is available to the Ballesteros spouses. The 30-day period given
to the spouses to exercise their right of redemption has not commenced due to the absence of a written
notice. Despite actual knowledge of the sale, a written notice is still mandatory and indispensable for
purposes of the commencement of the 30-day period within which to exercise the said right.

Article 1623 of the Civil Code provides that:

“The right of legal pre-emption or redemption shall not be exercised except within thirty days from the
notice in writing by the prospective vendor, or by the vendor, as the case may be. The deed of sale shall
not be recorded in the Registry of Property, unless accompanied by an affidavit of the vendor that he has
given written notice thereof to all possible redemptioners.

The right of redemption of co-owners excludes that of adjoining owners.”


The indispensability of the “written notice requirement” for purposes of the exercise of the right of
redemption was explained by this Court in Barcellano v. Bañas.

Here, for the absence of written notice, the period has not run, thus, the Ballesteros may still redeem from
the Pascual spouses the portion of the subject property that was sold to the latter.
Case Digest by: Eunice L. Ambrocio

JIMENEZ VS. FERNANDEZ

G.R. No. 46364. April 6, 1990

PARAS, J.:

Facts:

The land in question is the Eastern portion with an area of Four Hundred Thirty Six (436) square meters
of that parcel of residential land situated in Pangasinan ) issued in the name of Sulpicia Jimenez. The
entire parcel of land with an area of 2,932 square meters, formerly belonged to Fermin Jimenez who had
2 sons, Fortunato and Carlos.

Fortunato Jimenez who predeceased his father has only one child, the petitioner Sulpicia Jimenez. After
the death of Fermin Jimenez, the entire parcel of land was registered in the name of Carlos Jimenez and
Sulpicia Jimenez in equal shares pro-indivisio.

Carlos Jimenez died and his illegitimate daughter, Melecia Cayabyab, also known as Melecia Jimenez,
took possession of the eastern portion of the property consisting of 436 square meters.

Melecia Jimenez sold said property to EdilbertoCagampan and Teodora Grado.

On August 29, 1969, Sulpicia Jimenez executed an affidavit adjudicating unto herself the other half of the
property appertaining to Carlos Jimenez, upon manifestation that she is the only heir of her deceased
uncle. She instituted the present action for recovery of the eastern portion of the property occupied by
Teodora Grado.

The trial court held that Teodora Grado is the absolute owner of the land in question.

Issue:

Whether Melecia Cayabyab can validly transfer the said property.

Ruling:

No. From the start the court erred in not declaring that Melecia Jimenez Cayabyab also known as Melecia
Jimenez, is not the daughter of Carlos Jimenez and therefore, had no right over the property in question.
Respondents failed to present concrete evidence to prove that Melecia Cayabyab was really the daughter
of Carlos Jimenez. She could not have validly acquired, nor legally transferred to EdilbertoCagampan that
portion of the property subject of this petition.

Melecia Cayabyab’s possession or of her predecessors-in-interest would be unavailing against the


petitioner Sulpicia Jimenez who was the holder pro-indiviso with Carlos Jimenez of the Torrens Certificate
of Title.

Sulpicia’s title over her one-half undivided property remained good and continued to be good when she
segregated it into a new title in 1969. Sulpicia’s ownership over her one-half of the land and which is the
land in dispute was always covered by a Torrens title, and therefore, no amount of possession thereof by
the respondents, could ever defeat her proprietary rights thereon. It is apparent, that the right of Sulpicia
to institute the action for recovery possession of the portion of the land in question based on the Torrens
Title is imprescriptible and not barred under the doctrine of laches.

Thus, Sulpicia Jimenez is entitled to the relief prayed for, declaring her to be the sole and absolute owner
of the land in question with right to its possession and enjoyment. Since her uncle Carlos Jimenez died in
1936, his pro-indiviso share in the properties then owned in co-ownership with his niece Sulpicia
descended by intestacy to Sulpicia Jimenez alone because Carlos died without any issue or other heirs.
Case Digest by: Eunice L. Ambrocio

DE GUIA VS. COURT OF APPEALS

G.R. No. 120864. October 8, 2003

CARPIO, J.:

Facts:

TThe subject of the dispute are two undivided parcels of land used as a fishpond situated in Bulacan,
which was originally co-owned by PrimitivaLejano and Lorenza Araniego, who was married to Juan
Abejo.

The FISHPOND is registered under the names of PrimitivaLejano and Lorenza Araniego at the Bulacan
Register of Deeds

The FISHPOND has a total land area of approximately 79,220 square meters. ABEJO is seeking to
recover possession of the 1/2 undivided portion of the FISHPOND containing 39,611 square meters.

DE GUIA (along with a certain AnianoVicta) acquired possession of the entire FISHPOND by virtue of a
document captioned Salin ng Pamumusisyong ng Palaisdaan (“Lease Contract”) executed between him
and the heirs of PrimitivaLejano. The Lease Contract was effective from 30 July 1974 up to 30 November
1979.

The Lease Contract was executed with the knowledge and consent of Teofilo Abejo, sole heir of Lorenza
Araniego-Abejo. Teofilo Abejo acquired Lorenza AraniegoAbejo’s 1/2 undivided share in the FISHPOND
by intestate succession.

Teofilo Abejo sold his 1/2 undivided share in the FISHPOND to his son, JOSE ABEJO, on 22 November
1983.

DE GUIA continues to possess the entire FISHPOND and derives income from the property despite the
expiration of the Lease Contract and several demands to vacate made by Teofilo Abejo and by his
successor-in-interest. The last demand letter was dated 27 November 1983.

BEJO filed his complaint for recovery of possession with damages against DE GUIA on 12 May 1986.

DE GUIA’s claim of ownership over the other 1/2 undivided portion of the FISHPOND has not been finally
adjudicated for or against him.

DE GUIA presented verified Complaint for Annulment of Real Estate Mortgage and Contract of Lease
with Preliminary Injunction signed by the heirs of PrimitivaLejano as proof of his ownership of the other
undivided half portion of the FISHPOND. The complaint alleged that DE GUIA acquired his 1/2 undivided
share in the FISHPOND from the Lejano Heirs in February 1986. In such case, the trial court rendered a
judgment against De Guia and Lejano Heirs for such they filed their appeal.

Issue:

(1) Whether an action for recovery of possession and turn over of the ½ undivided portion off the
common property is proper before partition
(2) Whether there is sufficient basis for the award of compensatory damages and attorney’s fees.
RULING:

(1) Under Article 484 of the Civil Code, “there is co-ownership whenever the ownership of an
undivided thing or right belongs to different persons.” A co-owner of an undivided parcel of land is
an “owner of the whole, and over the whole he exercises the right of dominion, but he is at the
same time the owner of a portion which is truly abstract.” On the other hand, there is no co-
ownership when the different portions owned by different people are already concretely
determined and separately identifiable, even if not yet technically described.

Article 487 of the Civil Code provides, “any one of the co-owners may bring an action in
ejectment.”

Any co-owner may file an action under Article 487 not only against a third person, but also
against another co-owner who takes exclusive possession and asserts exclusive ownership of the
property. In the latter case, however, the only purpose of the action is to obtain recognition of the
co-ownership. The plaintiff cannot seek exclusion of the defendant from the property because as
co-owner he has a right of possession. The plaintiff cannot recover any material or determinate
part of the property.

In Hermogena G. Engreso with Spouse Jose Engreso v. Nestoria De La Cruz and Herminio De
La Cruz, it had been held that It is a basic principle in civil law that before a property owned in
common is actually partitioned, all that the co-owner has is an ideal or abstract quota or
proportionate share in the entire property. A co-owner has no right to demand a concrete, specific
or determinate part of the thing owned in common because until division is effected his right over
the thing is represented only by an ideal portion.

Since a co-ownership subsists between ABEJO and DE GUIA, judicial or extrajudicial partition is
the proper recourse. An action to demand partition is imprescriptible and not subject to laches.
Each co-owner may demand at any time the partition of the common property unless a co-owner
has repudiated the co-ownership under certain conditions. Neither ABEJO nor DE GUIA has
repudiated the co-ownership under the conditions set by law.

(2) The right of enjoyment by each co-owner is limited by a similar right of the other co-owners. A co-
owner cannot devote common property to his exclusive use to the prejudice of the co-ownership.
Hence, if the subject is a residential house, all the co-owners may live there with their respective
families to the extent possible. However, if one co-owner alone occupies the entire house without
opposition from the other co-owners, and there is no lease agreement, the other co-owners
cannot demand the payment of rent. Conversely, if there is an agreement to lease the house, the
co-owners can demand rent from the co-owner who dwells in the house.

The co-owners can either exercise an equal right to live in the house, or agree to lease it. If they
fail to exercise any of these options, they must bear the consequences. It would be unjust to
require the co-owner to pay rent after the co-owners by their silence have allowed him to use the
property.

Thus, the SC ruled that Manuel T. De Guia and Jose B. Abejo shall equally enjoy possession and
use of the entire FISHPOND prior to partition; De Guia will pay Jose B. Abejo a yearly rent from
June 1992 until finality of this decision, with interest at during the same period; After finality of this
decision and for as long as Manuel T. de Guia exclusively possesses the entire FISHPOND, he
shall pay Jose B. Abejo a yearly rental of P25,000 for the latter’s 1/2 undivided share in the
FISHPOND.
Case Digest by: Eunice L. Ambrocio

MENDOZA VS. COURT OF APPEALS

G.R. No. 44664. July 31, 1991.

MEDIALDEA, J.:

Facts:

Bernardo Mendoza I, II among others were the legal heirs of the late Arcadio Mendoza Trinidad Manuel,
the surviving spouse of Arcadio Mendoza and the rest of the plaintiffs being the legitimate children of the
spouses

Arcadio Mendoza died in 1944. He left properties, real and personal, and among which is a property
consisting of nine (9) parcels of land, with an aggregate area of 33,398 square meters.

The property in question is Lot 3-A, which is a portion of Lot 3.

Arcadio Mendoza acquired ownership over the above-mentioned nine (9) parcels of land, including Lot 3,
through donation from the late Jose Samonte, which mode of acquisition was recognized and adjudicated
by the Court of Appeals in its decision dated September 23, 1964, in the case entitled: ‘Victor Samonte, et
al. v. Maria Samonte, et al.,’ G.R. No. 22891-R.

Lot 3 was subdivided into 2 lots: Lot 3-A and Lot 3-B. Tirnidad Manuel Mendoza sold to Renato Samonte
and Lucia dela Cruz Samonte Lot 3-A which was evidenced by a deed of sale. All improvements in the
said Lot 3-A were placed by the Samonte spouses.

In the complaint to render the said sale null and void. It has been established by the lower courts that the
property in question was the subject of the partition agreement and was adjudicated in favor of Trinidad
Mendoza. Thus, it was held that the property is no longer held in co-ownership at the time that it was sold
to the Samonte spouses.

Issue:

(1) Whether Lot 3 has been partitioned and was adjudicated in favor of Trinidad Manuel Mendoza
(2) Whether the Mendozas can still exercise the right of legal redemption.
Ruling:

(1) Yes. The property has been partitioned and adjudicated in favor of Trinidad.

In this case, the source of co-ownership among the heirs was intestate succession. Where there
are two or more heirs, the whole estate of the decedent is, before its partition, owned in common
by such heirs (Article 1078 of the Civil Code). Petitioners’ co-ownership over Lot 3 was
extinguished when it was subdivided into Lot 3-A and Lot 3-B, which portions were concretely
determined and technically described.

It has also been ruled that Lot 3-A has been adjudicated to Trinidad Manuel Mendoza. Taking into
account the pertinent provisions of the “Dokumento ng Bilihan” and estoppel on the part of
petitioners. Therefore, the “Dokumento ng Bilihan” is a valid document.

(2) No. The resolution is based on the previous discussion that the co-ownership has been
extinguished. Article 1620 of the Civil Code applies only if the co-ownership still exists. If the
property has been partitioned or an identified share has been sold, there is no longer any right of
legal redemption.
Case Digest by: Eunice L. Ambrocio

PUNSALAN vs. BOON LIAT ET. AL

GR. No. 18009. January 10, 1923

AVANCEÑA, J.:

Facts:

Tamsi and twenty-one (21) other moros caught and pulled a whale towards the shore where they
quartered it. They found a great quantity of ambergris which they placed in three sacks, two of those
sacks were full while the last one is half-full. These sacks were taken to the house of Maharaja Butu, and
left it to the care of Ahamad.

The contents of the two full sacks were placed in three trunks. All of these twenty-two persons made an
agreement that they were to be the sole owners of this ambergris and that none of them could sell it
without the consent of the rest.

With regards to the half sack of ambergris they agreed that some of them would sell it in Zamboanga and
in order to ascertain its’ market price, and to dispose of the rest accordingly.

Some of them went to Zamboanga and sold the half sack of amber. The proceeds were distributed
among them. They also offered to the same buyer the rest of the amber contained in the two sacks.

However, other people in Zamboanga were aware of the existence of this ambergris in the house of
Maharaja Butu. Mr. Henry E. Teck, who was one of those. He proposed to the master of the revenue
cutter Mindoro to go to Cawit-Cawit to seize some supposedly contraband opium. The master proceeded
to search the house and found three large trunks containing a black substance which had a bad odor.
Ahamadexplained that the contents came from the abdomen of a large fish. But the master claimed that it
was opium and took the three trunks on board the ship. But while on board the ship, the master was
convinced that it was not opium.

During the voyage, Mr. Teck offered to purchase the amber but Ahamad refused to sell it claiming that it
was commonly owned. Mr Teck convinced Ahamad to sell the ambergris through a promise of protection.

When Cheong Tong, Lim Chiat, and the Moros who went to Zamboanga arrived at the house of Maharaja
Butu, they found that the amber they had purchased from Tamsi and his companions was no longer
there.

Issue:

Whether there is a valid sale in the case at bar.

Ruling:

The ambergris which is the subject-matter of this case was the undivided common property of the
plaintiffs and one of the defendants. This common ownership was acquired by occupancy. None of them
had any right to sell said amber, there being an express agreement between the co-owners not to sell it
without the consent of all.

On the two sales mentioned, having been made without the consent of all the co-owners, the same have
no effect, except as to the portion belonging to those who made them.

The action brought upon this case was an action to recover title, and possession of amber. It is no bar to
the bringing of this action that Ahamad is one of the co-owners. The action for recovery which each co-
owner has, derived from the right of ownership inherent in the co-ownership, may be exercised not only
against strangers but against the co-owners themselves, when such co-ownerperform, with respect to the
thing held in common, acts for their exclusive benefit, or of exclusive ownership, or which are prejudicial
to, and in violation of, the right of the community.

In this case, the selling of the amber by the Ahamad as his exclusive property and his attitude in
representing himself to be the sole owner of such place him in the same position as the stranger who
violates any right of the community. He is not sued in this case as a co-owner, for the cause of action is
predicated upon the fact that he has acted not as a co-owner, but as an exclusive owner of the amber
sold by him.
Digested by: Kareen Mae B. Baucan

LEO WEEvs. GEORGE DE CASTRO (on his behalf and as attorney-in-fact of


ANNIE DE CASTRO and FELOMINA UBAN) and MARTINIANA DE CASTRO

G.R. No. 176405 August 20, 2008

CHICO-NAZARIO, J.:

FACTS: Respondents are the owners of the subject property, a two-storey building
erected on a parcel of land. Respondents rented out the subject property to petitioner.
Both parties agreed that the rental payment shall be increased. Petitioner, however,
failed or refused to pay the corresponding increase on rent when his rental obligation
became due. Respondent George de Castro sent a letter to petitioner terminating their
lease agreement and demanding that the latter vacate and turn over the subject
property to respondents. Since petitioner stubbornly refused to comply with said
demand letter, respondent George de Castro, together with his siblings and co-
respondents, Annie de Castro, Felomina de Castro Uban and Jesus de Castro, filed the
Complaint for ejectment before the Municipal Trial Court.

The Municipal Trial Court dismissed the complaint of the respondents, and this
was affirmed by the Regional Trial Court. On appeal, the Court of Appeals granted the
petition of respondents. Petitioner now argues that respondent George de Castro
cannot maintain an action for ejectment against petitioner, without joining all his co-
owners.

ISSUE: Is it necessary for De Castro to join all his co-owners in the action for
ejectment against petitioner?

HELD: No, it is not necessary for De Castro to join all his co-owners in the action
for ejectment against petitioner. Article 487 of the Civil Code provides that any one of
the co-owners may bring an action in ejectment.This article covers all kinds of action for
the recovery of possession, such as forcible entry and unlawful detainer
(accioninterdictal), recovery of possession (accionpubliciana), and recovery of
ownership (accion de reivindicacion). A co-owner may bring such an action, without the
necessity of joining all the other co-owners as co-plaintiffs, because the suit is deemed
to be instituted for the benefit of all. If the action is for the benefit of the plaintiff alone,
such that he claims possession for himself and not for the co-ownership, the action will
not prosper.

A co-owner is not even a necessary party to an action for ejectment, for complete
relief can be afforded even in his absence. In suits to recover properties, all co-owners
are real parties in interest. However, pursuant to Article 487 of the Civil Code and the
relevant jurisprudence, any one of them may bring an action, any kind of action for the
recovery of co-owned properties. Therefore, only one of the co-owners, namely the co-
owner who filed the suit for the recovery of the co-owned property, is an indispensable
party thereto. The other co-owners are not indispensable parties. They are not even
necessary parties, for a complete relief can be afforded in the suit even without their
participation, since the suit is presumed to have been filed for the benefit of all co-
owners.
Digested by: Kareen Mae B. Baucan

NIEVES PLASABAS and MARCOS MALAZARTE vs. COURT OF APPEALS,


DOMINADOR LUMEN, and AURORA AUNZO

G.R. No. 166519 March 31, 2009

NACHURA, J.:

FACTS: In 1974, petitioners filed a complaint for recovery of title to property with
damages before the Court of First Instance against respondents. The property subject
of the case was a parcel of coconut land in Canturing, Maasin, Southern Leyte,
declared under Tax Declaration in the name of petitioner Nieves. Respondents denied
the allegation of ownership and possession of the premises by the petitioners, and
interposed, as their main defense, that the subject land was inherited by all the parties
from their common ancestor, Francisco Plasabas.

During the trial, it was revealed that petitioner Nieves was not the sole and
absolute owner of the land. Based on the testimonies of the witnesses of petitioners, the
property passed on from Francisco to his son, Leoncio; then to JovitaTalam, petitioner
Nieves’ grandmother; then to Antonina Talam, her mother; and then to her and her
siblings—Jose, Victor and Victoria.

Respondents argued that the case should have been terminated for the failure of
petitioners to implead indispensable parties, the other co-owners – Jose, Victor and
Victoria. The trial court dismissed the case, and it was affirmed by the Court of Appeals.
The Court of Appeals declared that the non-joinder of the indispensable parties would
violate the principle of due process, and that Article 487 of the Civil Code could not be
applied considering that the complaint was not for ejectment, but for recovery of title or
a reivindicatory action.

ISSUE: Should the petitioners implead their co-owners in the complaint they filed
against private respondents?

HELD: No, petitioners, in their complaint, do not have to implead their co-owners
as parties. Article 487 of the Civil Code provides that any one of the co-owners may
bring an action for ejectment. The article covers all kinds of actions for the recovery of
possession, including an accionpubliciana and a reivindicatory action. A co-owner may
file suit without necessarily joining all the other co-owners as co-plaintiffs because the
suit is deemed to be instituted for the benefit of all. Any judgment of the court in favor of
the plaintiff will benefit the other co-owners, but if the judgment is adverse, the same
cannot prejudice the rights of the unimpleaded co-owners.
Petitioners, in their complaint, do not have to implead their co-owners as parties.
The only exception to this rule is when the action is for the benefit of the plaintiff alone
who claims to be the sole owner and is, thus, entitled to the possession thereof. In such
a case, the action will not prosper unless the plaintiff impleads the other co-owners who
are indispensable parties.

Here, the allegation of petitioners in their complaint that they are the sole owners
of the property in litigation is immaterial, considering that they acknowledged during the
trial that the property is co-owned by Nieves and her siblings, and that petitioners have
been authorized by the co-owners to pursue the case on the latter’s behalf.Impleading
the other co-owners is, therefore, not mandatory, because, as mentioned earlier, the
suit is deemed to be instituted for the benefit of all.
Digested by: Kareen Mae B. Baucan

RUSTICO ADILLE vs. THE HONORABLE COURT OF APPEALS, EMETERIA


ASEJO, TEODORICA ASEJO, DOMINGO ASEJO, JOSEFA ASEJO and SANTIAGO
ASEJO

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

SARMIENTO, J.:

FACTS: The land in question originally belonged to FelisaAlzul as her own private
property. She married twice in her lifetime. The first marriage was with one
BernabeAdille, with whom she had as an only child, RusticoAdille. In her second
marriage with one ProcopioAsejo, her children were herein private respondents.

Sometime in 1939, Felisa sold the property in pacto de retro to certain third
persons. Felisa died in 1942 without being able to redeem the property.After her death,
but during the period of redemption,RusticoAdillerepurchased, by himself alone, the
property. He executed a deed of extra-judicial partition representing himself to be the
only heir and child of his mother Felisa. He was able to secure title in his name alone.

As a consequence, herein private respondents filed a case for partition with


accounting on the position that Rustico was only a trustee on an implied trust when he
redeemed the property.Also,EmeteriaAsejo was occupying a portion of the subject
property.

The trial Judge rendered a decision in favor of Rustico. The Court of Appeals reversed
the decision of the trial court.

ISSUE: May a co-owner acquire exclusive ownership over the property held in
common?

HELD: No. The right of repurchase may be exercised by a co-owner with aspect
to his share alone. While 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.

The property remains to be in a condition of co-ownership. While a vendee a


retro, under Article 1613 of the Civil 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 the property entitles the vendee a retro to retain the property and consolidate
title thereto in his name. But 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.

Neither does the fact that the petitioner had succeeded in securing title over the
parcel in his name terminate the existing co-ownership. While his half-brothers and
sisters are liable to him for reimbursement as and for their shares in redemption
expenses, he cannot claim exclusive right to the property owned in common.
Registration of property is not a means of acquiring ownership. It operates as a mere
notice of existing title, that is, if there is one.

The petitioner is a trustee of the property on behalf of the private respondents.

Prescription, as a mode of terminating a relation of co-ownership, must have been


preceded by repudiation of the co-ownership. In this case, it was not shown that
petitioner had repudiated the co-ownership; on the contrary, he had deliberately kept
the private respondents in the dark by feigning sole heirship over the estate under
dispute. He cannot therefore be said to have "made known" his efforts to deny the co-
ownership. Moreover, one of the private respondents, EmeteriaAsejo, is occupying a
portion of the land up to the present, yet, the petitioner has not taken pains to eject her
therefrom.
Digested by: Kareen Mae B. Baucan

VIRGILIO B. AGUILAR vs. COURT OF APPEALS and SENEN B. AGUILAR

G.R. No. 76351 October 29, 1993

BELLOSILLO, J.:

FACTS: Petitioner Virgilio and respondent Senen are brothers. The two brothers
purchased a house and lot in Parañaque where their father could spend and enjoy his
remaining years. Initially, the brothers agreed that Virgilio's share in the co-ownership
was two-thirds while that of Senen was one-third. By virtue of a written memorandum,
Virgilio and Senen agreed that their interests in the house and lot should be equal, with
Senen assuming the remaining mortgage obligation of the original owners with the
Social Security System (SSS) in exchange for his possession and enjoyment of the
house together with their father.

Since Virgilio was then disqualified from obtaining a loan from SSS, the brothers
agreed that the deed of sale would be executed and the title registered in the meantime
in the name of Senen. It was further agreed that Senen would take care of their father
and his needs since Virgilio and his family were staying in Cebu.

After Maximiano Aguilar died in 1974, petitioner demanded from private


respondent that the latter vacate the house and that the property be sold and proceeds
thereof divided among them. Because of the refusal of respondent to give in to
petitioner's demands, the latter filed an action to compel the sale of the house and lot so
that the they could divide the proceeds between them.

In his complaint, petitioner prayed that the proceeds of the sale, be divided on
the basis of two-thirds (2/3) in his favor and one-third (1/3) to respondent. Petitioner also
prayed for monthly rentals for the use of the house by respondent after their father
died.Respondent alleged that he had no objection to the sale as long as the best selling
price could be obtained; that if the sale would be effected, the proceeds thereof should
be divided equally; and, that being a co-owner, he was entitled to the use and
enjoyment of the property.

ISSUE: Can petitioner demand monthly rentals from respondent for the use of the
house after their father died?

HELD: Yes, petitioner can demand monthly rentals from respondent for the use of
the other half of the property appertaining to petitioner after their father died.

Being a co-owner respondent has the right to use the house and lot without
paying any compensation to petitioner, as he may use the property owned in common
long as it is in accordance with the purpose for which it is intended and in a manner not
injurious to the interest of the other co-owners.Each co-owner of property held pro
indiviso exercises his rights over the whole property and may use and enjoy the same
with no other limitation than that he shall not injure the interests of his co-owners, the
reason being that until a division is made, the respective share of each cannot be
determined and every co-owner exercises, together with his co-participant’s joint
ownership over the pro indiviso property, in addition to his use and enjoyment of the
same.

However, since petitioner has decided to enforce his right in court to end the co-
ownership of the house and lot and respondent has not refuted the allegation that he
has been preventing the sale of the property by his continued occupancy of the
premises, respondent and his family must vacate the property so that the sale can be
effected immediately. Respondent should pay a rental of P1,200.00 per month, with
legal interest from the time the trial court ordered him to vacate, for the use and
enjoyment of the other half of the property appertaining to petitioner.

When petitioner filed an action to compel the sale of the property and the trial
court granted the petition and ordered the ejectment of respondent, the co-ownership
was deemed terminated and the right to enjoy the possession jointly also ceased.
Thereafter, the continued stay of respondent and his family in the house prejudiced the
interest of petitioner as the property should have been sold and the proceeds divided
equally between them. To this extent and from then on, respondent should be held
liable for monthly rentals until he and his family vacate.
Digested by: Kareen Mae B. Baucan

SUNSET VIEW CONDOMINIUM CORPORATIONvs. THE HON. JOSE C.


CAMPOS, JR. OF THE COURT OF FIRST INSTANCE, BRANCH XXX, PASAY CITY
and AGUILAR-BERNARES REALTY,

G.R. No. L-52361 April 27, 1981

FERNANDEZ, J.:

FACTS: Petitioner, Sunset View Condominium Corporation is a condominium


corporation. Private respondent, Aguilar-Bernares Realty, owned and operated by the
spouses Emmanuel G. Aguilar and Zenaida B. Aguilar, is the assignee of a unit,
"Solana", in the Sunset View Condominium Project with La Perla Commercial
Incorporated, as assignor. The La Perla Commercial, Incorporated bought the "Solana"
unit on installment from the Tower Builders, Inc. The petitioner filed a complaint for the
collection of assessments, levied on the unit against Aguilar-Bernares Realty before the
Court of First Instance.

The private respondent filed a Motion to Dismiss the complaint on the ground
that the court has no jurisdiction over the subject or nature of the action. The motion to
dismiss was granted by the respondent Judge who opined that the private respondent
is, pursuant to Section 2 of Republic Act No. 4726, a "holder of a separate interest" and
consequently, a shareholder of the plaintiff condominium corporation; and that "the case
should be properly filed with the Securities & Exchange Commission which has
exclusive original jurisdiction on controversies arising between shareholders of the
corporation."

The petitioner filed its amended complaint for the collection of overdue accounts
on assessments and insurance premiums and the interest thereon amounting against
the private respondent Lim Siu Leng to whom was assigned a unit called "Alegria" of the
Sunset View Condominium Project. Said private respondent alsofiled a motion to
dismiss on the ground of lack of jurisdiction.

Private respondents in both cases have not yet fully paid the purchase price of
their units. However, they both argue that every purchaser of a condominium unit,
regardless of whether or not he has fully paid the purchase price, is a "holder of a
separate interest" mentioned in Section 2 of Republic Act No. 4726, otherwise known as
"The Condominium Act" and is automatically a shareholder of the condominium
corporation.
ISSUES: 1. Is a purchaser of a condominium unit in the condominium project
managed by the petitioner, who has not yet fully paid the purchase price thereof,
automatically a stockholder of the petitioner Condominium Corporation?

2. Is it the regular court or the Securities & Exchange Commission that has
jurisdiction over cases for collection of assessments assessed by the Condominium
Corporation on condominium units the full purchase price of which has not been paid?

HELD: 1. No, the share of stock appurtenant to the unit will be transferred
accordingly to the purchaser of the unit only upon full payment of the purchase price at
which time he will also become the owner of the unit. Consequently, even under the
contract, it is only the owner of a unit who is a shareholder of the Condominium
Corporation. Inasmuch as owners is conveyed only upon full payment of the purchase
price, it necessarily follows that a purchaser of a unit who has not paid the full purchase
price thereof is not the owner of the unit and consequently is not a shareholder of the
Condominium Corporation.

Only the owner of a unit is a stockholder of the Condominium. Ownership of a


unit is a condition sine qua non to being a shareholder in the condominium corporation.
A purchaser of a unit who is not yet the owner thereof for not having fully paid the full
purchase price, is not a shareholder. The "separate interest" in a condominium, which
entitles the holder to become automatically a share holder in the condominium
corporation, as provided in Section 2 of the Condominium Act, can be no other than
ownership of a unit. This is because nobody can be a shareholder unless he is the
owner of a unit and when he ceases to be the owner, he also ceases automatically to
be a shareholder.

The private respondents, therefore, who have not fully paid the purchase price of
their units and are consequently not owners of their units are not members or
shareholders of the petitioner condominium corporation.

2. Inasmuch as the private respondents are not shareholders of the


petitioner condominium corporation, the instant case for collection is not under the
original and exclusive jurisdiction of the Securities & Exchange Commission.
Digested by: Kareen Mae B. Baucan

LONGINOS JAVIER,vs. SEGUNDO JAVIER, ET AL.,

G.R. No. L-2812 October 18, 1906

WILLARD, J.:

FACTS:
Since1860,aparceloflotwasownedbyManuelJavier,fatherofpetitionerLonginosJavi
erandrespondentSegundoJavier.Sincethen,ithadbeenoccupiedbyhischildrenandthatnoo
neofthesechildrenevermadeanyclaimtotheownershipthereof,andnotoneofthemeveroccup
iedthepropertyasowner.Segundo andhiswifeIsabel Hernandez
constructedahousethereon.

Subsequently,Longinos,
asadministratoroftheestateofhisfatherfiledanactionincourtcontestingownershipovertheho
useandlot.ThelowercourtruledthatthelandbelongedtoLonginos as administrator
oftheestateofhisfatherwhilethehousewasownedbyrespondents Isabel Hernandez
andhersonManuel Ramon Javier.Judgmentwasrenderedin favorofLonginos
forthepossessionofthepropertybut Segundo and the rest of the defendants
weregivenareasonableopportunitytoremovethehouse.

On appeal, respondents
contendedthatthecaseshouldbedecidedbyanapplicationoftheprinciplesoflawrelatingtothe
communityofpropertybecauseacommunityofpropertyexistedasthehousewasownedbythe
m while thelandby the
petitioner.Theyalsodeclaredthattheywerepossessorsingoodfaithandthattheyshouldberei
mbursedfortheconstructionofthehouse.

ISSUES: 1. Is there a co‐ownershipwhenthehouseandthelandareownedbydifferent


persons?

2. Is Segundoentitledforreimbursementfortheconstructionofthe house?

HELD: 1. No, the ownership of a house by one person, and of the land on
which it stands by another does not create a community of property. If, on the other
hand, it was meant that community of property existed because the land itself belonged
to the heirs of Manuel Javier, and that two of the respondents were such heirs, the
decision of the court below was as favorable to the respondents as it could be.

2. No, he is not entitled for reimbursement of the house constructed


on the lot. Segundo could not claim for reimbursement since he was in bad faith as he
and his wife had always believed that the land did not belong to them but to the estate
of Manuel Javier. He could not also be reimbursed under Article 397 (now Article 491)
of the Civil Code, which relates to the improvements made upon the common property
by one of the co-owners. The burden of proof was on respondents to show that the
house was built with the consent of their co-tenants.
Evenifatacitconsentwasshown,thiswouldnotrequiresuch co-tenantstopayforthehouse.
Digested by: Ezer Ivan Bacayo

Ramon Mercado, Basilia Mercado joined by her husband, Francisco Ronquillo vs. Pio D. Liwanag

G.R. No. L-14429, June 30, 1962

Makalintal, J.

Facts:

Petitioner Ramon Mercadoand his wifeBasilia as co-owned a parcel of land in Quezon City, with
an area of 4,392 sq. m. Said land was registered in both their names. In 1956, without the consent of his
wife, Ramon sold half of the said land with an area of 2,196 sq. m. at P70 per sq. m. to respondent. A
Deed of Sale was subsequently executed which described the sold property in metes and bounds.

Liwanag registered the Deed of Sale and aTCT was issued in the name of Liwanag and Basilia
Mercado.

Later, Ramonand Basilia filed an action in court to annul the Deed of Sale based on Art. 493 of
the Civil Code. For his part, Liwanag submitted a receipt of a check signed by Ramon and a promissory
note. However, Ramon disclaimed payment and receipt of such check and promissory note, the check
being un-encashed and is still in the possession of one Atty. de Gracia.

The trial court however, held that under Art. 493 of the Civil Code, the sale in question was valid
and so it dismissed the complaint.

Hence, this appeal. The spouses alleged that the Deed of Sale sought to be annulled because
Ramon disposed of a divided and determinate half of the land under co-ownership when in the TCT, only
stated that what was merely sold was an undivided half-share of the property

Issue:

Can the Deed of Sale be annulled?

Held:

No, the Deed of Sale may not be validly annulled.

What a co-owner may dispose of under Article 493 is only his undivided aliquot share, which
shall be limited to the portion which may be allotted to him upon the termination of the co-ownership.
He has no right to divide the property into parts and then convey one part by metes and bounds.

In the deed of sale, Mercado transferred and conveyed to Liwanag his title and interests on half
of the portion of said property in metes and bounds. Nevertheless, upon registration of the sale, the
new TCT did not reproduce the description in the instrument but carried the names of Pio D. Liwanag
and Basilia Mercado as co-owners pro-indiviso.

As far as Basilia Mercado is concerned she retained in all their integrity her rights as co-owner
which she had before the sale, and consequently she had no cause to complain. Much less has Ramon
Mercado, for it was he who was responsible for whatever indicia there may be in the deed of sale that a
determinate portion of the property was being sold.
The title is the final and conclusive repository of the rights of the new co-owners. The question
of whether or not the Deed of Sale should be annulled must be considered in conjunction with the title
issued pursuant thereto. Since, according to the title, what Liwanag acquired by virtue of the sale is only
an undivided half-share of the property, which under the law the vendor Ramon had the absolute right
to dispose of, the trial court committed no error in dismissing the action. The end-result of the
transaction is in accordance with Article 493 of the Civil Code.
Herodotus P. Acebedo and Demosthenes P. Acebedo vs. Hon. Bernardo P. Abesamis

G.R. No. 102380, January 18, 1993

Campos, Jr., J.

Facts:

The late Felix Acebedo left an estate consisting of several real estate properties located in
Quezon City and Caloocan City, with a conservative estimated value of about P30 million. His estate has
several unsettled claims. He was succeeded by eight heirs. Two of whom, were petitioners Herodotus
(administrator) and Demosthenes (Petitioner Heirs) and the others, private respondents Miguel,
Alexander, Napoleon, Rizalino, Republica and Filipinas (Respondent Heirs), all of whom were surnamed
Acebedo.

In 1989, due to the prolonged pendency of the settlement of the estate of the deceased before
the respondent court under Judge Bernardo P. Abesamis for 16 years, Respondent Heirs filed a Motion
for Approval of Sale. The said sale involved the properties, which formed part of the estate. The
consideration for said lots was twelve P12 million and by that time, they already had a buyer. In the
motion, it was also alleged by the respondent heirs that they had already received their proportionate
share of the P6 million paid by the buyer, Yu Hwa Ping, as earnest money. They also averred that the
remaining balance of P6 million was more than enough to pay the unsettled claims against the estate.
Thus, they prayed for the Court to direct the administrator to sell the properties, to pay all the claims
against the estate with the balance of P6 million, and to distribute the residue among the Heirs in final
settlement of the Estate.

However, Petitioner-administrator interposed an Opposition to Approval of Sale, wherein he


contended that some of the real properties left by their father were sold at a shockingly low price
without the consent of the court. Petitioner Heirs also moved that they be given 45 days to look for a
buyer who was willing to pay the properties at a price higher than P12 million. However, during hearing,
the Petitioner Heirs did not find any buyer offering better terms that they asked for a 30-day extension.

After having miserably failed to find a better buyer for 7 months, Petitioner-administrator
Herodotus filed another Opposition to Approval of Sale. The court issued an order denying the petition
of the Respondent Heirs to sell the properties in favor of Yu Hwa Ping.

Later, the court issued an order resolving to call the parties to a conference but during the
conference, still, the parties were unable to arrive at an agreement. Later, it was agreed by the parties
that the heirs be allowed to sell their shares of the properties to Yu Hwa Ping for the price already
agreed upon while herein Petitioner Heirs negotiated for a higher price with Yu Hwa Ping.

Subsequently, Petitioner Heirs instead filed a Supplemental Opposition to the approval of the
Deed of Conditional Sale. However, the Court in its decision, approved the Conditional Sale executed by
the REPONDENT HEIRS in favor of YU HWA PING, pertaining to their respective shares in the properties.
Petitioner-administrator Herodotus Acebedo was then ordered to sell the remaining portions of the said
properties also in favor of Yu Hwa Ping at the same price.

Pending resolution the Motion for Execution of the Order filed By Respondent Heirs, Petitioner
Heirs filed a petition for certiorari. They maintained that said Conditional Sale was null and void for lack
of prior court approval.
Issues:

Can an heir sell whatever right, interest, or participation he may have in the property under
administration?

Held:

Yes. An heir can sell whatever right, interest, or participation he may have in the property under
administration. The right of an heir to dispose of the decedent's property, even if the same is under
administration, is based on the Civil Code provision stating that the possession of hereditary property is
deemed transmitted to the heir without interruption and from the moment of the death of the
decedent, in case the inheritance is accepted. Where there are however, two or more heirs, the whole
estate of the decedent is, before its partition, owned in common by such heirs.

The Civil Code, under the provisions on co-ownership, further qualifies this right. Although it is
mandated that each co-owner shall have the full ownership of his part and of the fruits and benefits
pertaining thereto, and thus may alienate, assign or mortgage it, and even substitute another person in
its enjoyment, 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 other words, the law does not prohibit a co-owner from selling, alienating or mortgaging
his ideal share in the property held in common.
Delia Bailon-Casilao, et al. vs. CA and Celestino Afable

G.R. No. 78178, April 15, 1988

Cortes, J.

Facts:

A parcel of land with an area of 48,849 square meters was covered by an OCT in the names of
Rosalia, Gaudencio, Sabina, Bernabe, Nenita and Delia Bailon, as co-owners, each with a 1/6 share.
Gaudencio and Nenita were then dead; the latter being represented in this case by her children Luz,
Emma and Nilda. Bernabe went to China in 1931 and had not been heard from since then.

In 1948, Rosalia and Gaudencio Bailon sold a portion of the said land consisting of 16,283 square
meters to Donato Delgado. A year after, Rosalia alone sold the remainder of the land consisting of
32,566 square meters to Ponciana V. Aresgado de Lanuza. On the same date, Lanuza acquired from
Delgado the 16,283 sq. m. of land, which the latter had earlier acquired from Rosalia and Gaudencio. In
1975, John Lanuza, acting under a special power of attorney given by his wife, Ponciana V. Aresgado de
Lanuza, sold the two parcels of land to Celestino Afable.

In all these transfers, it was stated in the deeds of sale that the land was not registered under
the provisions of Act No. 496 when the fact was that it was.

In 1981, petitioners Delia Bailon-Casilao, Luz Paulino-Ang, Emma Paulino-Ybanez, Nilda Paulino-
Tolentino, and Sabina Bailon (Bailons) filed a case for recovery of property and damages with notice of
lis pendens herein private respondent, Celestino Afable.

In his defense, Afable claimed that he had acquired the land in question through prescription
and contended that the Bailons were guilty of laches. He later filed a third-party complaint against
Rosalia for damages allegedly suffered as a result of the sale to him of the land.

After trial, the lower court declared Afable as a co-owner of the land, having validly bought 2/6
respective undivided shares of Rosalia and Gaudencio. It also ordered the termination of the co-
ownership and the delineation of the specific part of each owner though a Geodetic Engineer. On
appeal, the respondent Court of Appeals affirmed the decision of the lower court. Hence, this appeal.

Issue:

Is the sale of the entire property made by 2 co-owners Rosalia and Gaudencio invalid for lack of
consent of the other co-owners?

Held:

No. The rights of a co-owner of a certain property are clearly specified in Article 493 of the Civil
Code.

Even if a co-owner sells the whole property as his, the sale will affect only his own share but not
those of the other co-owners who did not consent to the sale. This is because under Art. 493, the sale or
other disposition affects only his undivided share and the transferee gets only what would correspond
to his grantor in the partition of the thing owned in common.
Consequently, by virtue of the sales made by Rosalia and Gaudencio, which were valid with
respect to their proportionate shares, and the subsequent transfers which culminated in the sale to
private respondent Afable, the latter thereby became a co-owner of the disputed parcel of land. The
sales produced the effect of substituting the buyers in the enjoyment thereof.

Hence, since a co-owner is entitled to sell his undivided share, a sale of the entire property by
one co-owner without the consent of the other co-owners is not null and void. However, only the rights
of the co-owner-seller are transferred, thereby making the buyer a co-owner of the property.

Thus, it is now settled that the appropriate recourse of co-owners in cases where their consent
were not secured in a sale of the entire property as well as in a sale merely of the undivided shares of
some of the co-owners is an action for partition. Neither recovery of possession nor restitution can be
granted since the defendant buyers are legitimate proprietors and possessors in joint ownership of the
common property claimed.
Spouses Alexander Cruz and Adelaida Cruz vs. Eleuterio Leis, Raymundo Leis, Anastacio L. Lagdano,
Loreta L. Cayonda and the Honorable Court Of Appeals

G.R. No. 125233, March 9, 2000

Kapunan, J.

Facts:

Adriano Leis and Gertrudes Isidro were married in1923. In 1955, Gertrudes acquired from the
then Department of Agriculture and Natural Resources (DANR), a parcel of land with an area of 100 sq.
m. situated in Marikina, Rizal. The Deed of Sale, Gertrudes was described as a widow. Hence, a TCT was
issued in her name, which described her as a widow.

In 1973, Adriano died intestate. In 1985, Gertrudes obtained a P15,000 loan from petitioners
Spouses Alexander and Adelaida Cruz at 5% interest. The loan was secured by a mortgage over the Rizal
property. Gertrudes however, failed to pay the loan on the due date.

Unable to pay her obligation, Gertrudes in 1986 executed 2 contracts in favor of Alexander Cruz.
The first was a Kasunduan, which the parties conceded was a pacto de retro sale, granting Gertrudes 1
year within which to repurchase the property. The was a Kasunduan ng Tuwirang Bilihan, a Deed of
Absolute Sale covering the same property for the price of P39,083, the same amount stipulated in the
Kasunduan. For failure of Gertrudes to repurchase the property, ownership thereof was consolidated in
the name of Alexander Cruz. In 1987, A TCT was issued in his name, canceling the TCT in the name of
Gertrudes.

In 1987 Gertrudes died. Thereafter, her heirs, herein private respondents, Eleuterio Leis,
Raymundo Leis, Anastacio L. Lagdano, Loreta L. Cayonda (Leis Et Al.) received demands from Spouses
Cruz to vacate the premises as they were already new owners of the property.

In response, Leis et al. filed an action seeking the nullification of the contracts of sale executed
by their mother Gertrudes in favor of petitioner Alexander, as well as the TCT subsequently issued in the
name of the latter. They claimed that the contracts were vitiated by fraud as Gertrudes was illiterate
and already 80 years old at the time of the execution of the contracts. They also contended that the
price for the land was insufficient as it was sold lower than its fair market value. They added that the
property subject of the sale was conjugal and, consequently, its sale without the knowledge and consent
of private respondents was in derogation of their rights as heirs.

The trial court rendered a decision in favor of Leis et al. It concluded that the land was conjugal
property thus Gertrudes could only sell to spouses Cruz her one-half share in the property. However, it
also ruled that there was no fraud in the execution of the contract but nullified the same because the
spouses Cruz failed to comply with certain procedural requirements in its registration. The same
decision was affirmed when the case was appealed with the Court of Appeals.

Hence, the spouses Cruz filed a petition for review with the Supreme Court. They alleged that
the property was not conjugal but was owned exclusively by Gertrudes as described in the TCT. They
also averred that assuming the property was conjugal, the same became exclusive since Gertrudes
mortgaged the same property but redeemed the same in 1983.

Issue:
Was the property was exclusively owned by Gertrudes since she redeemed the property over
the exclusion of her co-owners?

Held:

No. The redemption of the land by Getrudes did not terminate the co-ownership nor give her
title to the entire land subject of the co-ownership.

The right of repurchase may be exercised by a co-owner with respect to his share alone.
Although Gertrudes redeemed the property in its entirety, shouldering the expenses therefor, that did
not make her the owner of all of it. In other words, it did not put to end the existing state of co-
ownership. Under Art. 493, a co-owner such as Gertrudes could only dispose of her share in the
property owned in common.

However, being that neither Gertrudes nor her co-owners, Leis et al. were able to redeem the
same within the one-year period stipulated in the Kasunduan, ownership then remained with the
spouses Cruz. The essence of a pacto de retro sale is that title and ownership of the property sold are
immediately vested in the vendee a retro, subject to the resolutory condition of repurchase by the
vendor a retro within the stipulated period. Failure thus of the vendor a retro to perform said resolutory
condition vests upon the vendee by operation of law absolute title and ownership over the property
sold.
Spouses Del Campo vs. CA and Heirs of Jose Regalado, Sr.

G.R. No. 108228, February 1, 2001

Quisumbing, J.

Facts:

Lot 162 of the Cadastral Survey in Pontevedra, Capiz, consisting of 27,179 sq. m. were co-owned
by the 8 Bornales brothers and sisters, the same registered in their names. Said lot was divided in
aliquot shares among them.

In 1940, Salome, one of the co-owners sold part of her 4/16 share in for P200.00 to Soledad
Daynolo. In the Deed of Absolute Sale signed by Salome and two other co-owners, Consorcia and
Alfredo, the portion of the sold lot was delineated in metes and bounds.

Thereafter, Soledad immediately took possession of the land and built a house thereon. A few
years later, she and her husband, Simplicio Distajo, mortgaged the property as security for a P400 debt
to respondent Jose Regalado, Sr.

In 1948, 3 of the 8 co-owners, specifically Salome, Consorcia and Alfredo sold 24,993 sq. m. of
Lot 162 to Regalado, Sr.

In 1951, Simplicio Distajo, heir of Soledad Daynolo who had since died, paid the mortgage debt
and redeemed the mortgaged portion the lot from Regalado, Sr. The latter, in turn, executed a Deed of
Discharge of Mortgage in favor of Soledad’s heirs. On same date, the heirs of Soledad sold the
redeemed portion for P1,500 to herein petitioners, Spouses Manuel Del Campo and Salvacion Quiachon
(Spouses Del Campo).

Meanwhile, Regalado, Sr. caused the transfer of the title in his name and subdivided the entire
property into smaller lots, each covered by a respective title in his name. One of these small lots is Lot
No. 162-C-6 with an area of 11,732 sq. m.

In 1987, the Spouses Del Campo brought a complaint for repartition, resurvey and reconveyance
against the heirs of the now deceased Regalado, Sr. They claimed that they owned an area of 1,544
square meters located within Lot 162-C-6, which was erroneously included in the issued in the name of
Regalado. They alleged that they occupied the disputed area as residential dwelling ever since they
purchased the property from the Distajos way back in 1951. They also declared the land for taxation
purposes and paid the corresponding taxes.

In 1990, however, the trial court dismissed the complaint. It held that while Salome could
alienate her pro-indiviso share in Lot 162, she could not validly sell an undivided part thereof by metes
and bounds to Soledad, from whom petitioners derived their title. The trial court also reasoned that
petitioners could not have a better right to the property even if they were in physical possession of the
same and declared the property for taxation purposes, because mere possession cannot defeat the right
of the Regalados who had a Torrens title over the land. The same judgment was affirmed by the Court of
Appeals on appeal. Hence, this petition.

Issues:
(1) Was the sale by co-owner Salome of a portion of an undivided property held in common in
favor of Soledad valid?

(2) Can co-owners Salome, Consorcia and Alfredo validly sell the shares of the common property
pertaining to Soledad?

(3) Can the Spouses Del Campo rightfully claim the specific 1,544 sq. m. located within Lot 162-
C-6?

Held:

(1) Yes. The mere fact that Salome purportedly transferred a definite portion of the co-owned
lot by metes and bounds to Soledad, did not per se render the sale a nullity. This much is evident under
Article 493 of the Civil Code and pertinent jurisprudence on the matter.

Salome’s right to sell part of her undivided interest in the co-owned property is absolute in
accordance with the well-settled doctrine that a co-owner has full ownership of his pro-indiviso share
and has the right to alienate, assign or mortgage it, and substitute another person in its enjoyment.
Since Salome’s clear intention was to sell merely part of her aliquot share in Lot 162, no valid objection
can be made against it and the sale can be given effect to the full extent.

In the case at bar, the transaction entered into by Salome and Soledad could be legally
recognized in its entirety since the object of the sale did not even exceed the ideal shares held by the
former in the co-ownership. In such sale, Soledad stepped into the shoes of the Salome as co-owner and
acquired a proportionate abstract share in the property held in common.

(2) No. Based on the principle that “no one can give what he does not have,” Salome, Consorcia
and Alfredo could not legally sell the shares pertaining to Soledad since a co-owner cannot alienate
more than his share in the co-ownership.

Being that the sale entered into by Salome and Soledad did not even exceed the ideal shares
held by the former in the co-ownership, it was deemed valid. It follows then that Salome, Consorcia and
Alfredo could not have sold the entire Lot 162 to Jose Regalado, Sr. in 1948 because at that time, the
ideal shares held by the three co-owners/vendors were equivalent to only 10/16 of the undivided
property less the aliquot share previously sold by Salome to Soledad.

Even if a co-owner sells the whole property as his, the sale will affect only his own share but not
those of the other co-owners who did not consent to the sale. Since a co-owner is entitled to sell his
undivided share, a sale of the entire property by one co-owner will only transfer the rights of said co-
owner to the buyer, thereby making the buyer a co-owner of the property.

In this case, Regalado merely became a new co-owner of Lot 162 to the extent of the shares
which Salome, Consorcia and Alfredo could validly convey. Soledad retained her rights as co-owner and
could validly transfer her share to her heirs in 1951.

(3) Yes. The area subject matter of this petition had already been effectively segregated from
the ‘mother lot’ even before title was issued in favor of Regalado.
The Spouses Del Campo enjoyed uninterrupted possession thereof for a total of 36 years until
the complaint was filed. Prior to that, at no instance did REGALADO nor his heir question the Spouses
Del Campo’s right over the land in dispute.

Such undisturbed possession had the effect of a partial partition of the co-owned property,
which entitled the possessor to the definite portion which he occupies. Conformably, petitioners are
entitled to the disputed land, having enjoyed uninterrupted possession thereof for a total of 49 years up
to the present.
Lilia Sanchez vs. CA and Virginia Teria

G.R. No. 152766,June 20, 2003

Bellosillo, J.

Facts:

Petitioner Lilian Sanchez constructed a house on a 76-square meter lot owned by her parents-in-
law. The lot was registered in the name of 6 co-owners: Eliseo, Sanchez, Lilian, Nenita, Susana and
Felipe, all surnamed Sanchez.

In 1995, the lot was registered in the name of private respondent Virginia Teria by virtue of a
Deed of Absolute Sale supposed to have been executed by all 6 co-owners in her favor. However, Lilian
claimed that she did not affix her signature on the document. For her subsequent refusal to vacate the
said lot, Teria filed an action for recovery of possession of the said lot.

The MeTC ruled in favor of Teria declaring that the sale was valid only to the extent of 5/6 of the
lot and the other 1/6 remaining as the property of Lilian, on account that her signature in the Deed of
Absolute Sale was forged.

In 1998, the MeTC issued an order for the issuance of a writ of execution in favor of TERIA as the
buyer of the property. A year later, a Notice to Vacate was served by the sheriff upon Lilian who
however refused to heed the Notice. In 1999, Teria demolished Lilian’s house without any special permit
of demolition from the court. Due to the demolition of her house, Lilian was forced to inhabit the
portion of the premises that used to serve as the house’s toilet and laundry area.

Lilian filed her Petition for Relief from Judgment with the RTC on the ground that she was not
bound by the inaction of her counsel who failed to submit petitioner’s appeal memorandum. However,
the RTC denied the Petition and the subsequent Motion for Reconsideration. She subsequently filed a
petition for certiorari with the Court of Appeals but it was denied, the same with a following Motion for
Reconsideration.

Hence, this appeal.

Issue:

CanLilian Sanchez validly claim ownership over her 1/6 undivided share in the property?

Held:

YES. Being that Lilian was not a part of the Deed of Sale, she was not bound by it. Hence her 1/6
share should be respected.

In co-ownership, the relationship of such co-owner to the other co-owners is fiduciary in


character and attribute. Whether established by law or by agreement of the co-owners, the property or
thing held pro-indiviso is impressed with a fiducial nature so that each co-owner becomes a trustee for
the benefit of his co-owners and he may not do any act prejudicial to the interest of his co-owners.

Thus, the legal effect of an agreement to preserve the properties in co-ownership is to create an
express trust among the heirs as co-owners of the properties. Co-ownership is a form of trust and every
co-owner is a trustee for the others.
Before the partition of a land or thing held in common, no individual or co-owner can claim title
to any definite portion thereof. All that the co-owner has is an ideal or abstract quota or proportionate
share in the entire land or thing.

Article 493 of the Civil Code gives the owner of an undivided interest in the property the right to
freely sell and dispose of it, i.e., his undivided interest. He may validly lease his undivided interest to a
third party independently of the other co-owners. But he has no right to sell or alienate a concrete,
specific or determinate part of the thing owned in common because his right over the thing is
represented by a quota or ideal portion without any physical adjudication.

Although assigned an aliquot but abstract part of the property, the metes and bounds of Lilian’s
lot has not been designated. As she was not a party to the Deed of Absolute Sale voluntarily entered
into by the other co-owners, her right to 1/6 of the property must be respected. Partition needs to be
effected to protect her right to her definite share and determine the boundaries of her property. Such
partition must be done without prejudice to the rights of Teria as buyer of the 5/6 portion of the lot
under dispute.
DIGESTED BY: TERRY LOUISE P. BOLIGOR

Heirs of Balite v Lim

GR No. 152168 December 10, 2004

Panganiban, J.

FACTS: Spouses Aurelio and Esperanza Balite owned a parcel of land in Northern Samar. When Aurelio died
intestate, Esperanza inherited 9, 751 sq. mts. of the land out of the 17, 551 sq. mts. and the remaining were for their
children namely Antonio, Flor, Visitacion, Difonturom, Pedro, Pablo, Gaspar, Cristeta and Aurelio jr. When Esperanza
became ill, the land was sold to Rodrigo Lim on April 16, 1996 for 1,000,000 php but they agreed that the purchase
price to appear on the deed was only 150,000 php.

The sale between Esperanza and Rodrigo were made known only to Antonio and Cristeta. When the other children
learned about it on August 21, 1996, they wrote the ROD that they did not consent to the sale and to hold the
application for registration of title of Lim. Yet Antonio, thru a special power of atty. from Esperanza, was appointed to
receive the balance payment of Lim and to sign the documents. On Oct. 31, 1996 Esperanza died. Then Lim
published in the Samar reporter the deed of sale to which the other heirs reacted. They filed for annulment of sale,
quieting of title, damages and injunction in the case of Heors of Balite v. Lim. Despite the case, a tct with lis pendens
was issued in the name of Lim. He also secured a 2 million loan from RCBC.

ISSUE: Was the sale valid?

RULING: Yes, the sale between Esperanza and Lim is valid.

The sale was relatively simulated. Though the consideration which appeared was lower than the actual purchase
price, the parties had the intent of being bound by the sale. It was only done to have a lesser capital gains tax.
Hence, it is valid and enforceable.

The appellate court was correct in affirming the validity of the sale of the property insofar as the pro indiviso share of
Esperanza Balite was concerned. Article 493 of the Civil Code gives the owner of an undivided interest in the
property the right to freely sell and dispose of such interest. The co-owner, however, has no right to sell or alienate a
specific or determinate part of the thing owned in common, because such right over the thing is represented by an
aliquot or ideal portion without any physical division. Nonetheless, the mere fact that the deed purports to transfer a
concrete portion does not per se render the sale void.[20] The sale is valid, but only with respect to the aliquot share
of the selling co-owner. Furthermore, the sale is subject to the results of the partition upon the termination of the co-
ownership.

Hence, the transaction between Esperanza Balite and respondent could be legally recognized only in respect to the
formers pro indiviso share in the co-ownership. As a matter of fact, the Deed of Absolute Sale executed between the
parties expressly referred to the 10,000-square-meter portion of the land sold to respondent as the share of
Esperanza in the conjugal property. Her clear intention was to sell merely her ideal or undivided share in it. No valid
objection can be made against that intent. Clearly then, the sale can be given effect to the extent of 9,751 square
meters, her ideal share in the property as found by both the trial and the appellate courts.

Metrobank v Pascual

GR. No. 163744 February 29, 2008

Velasco Jr, J.

FACTS: Nicholson Pascual and Florencia Nevalga were married on January 19, 1985. During the marriage, they
bough a 250 sq mtr lot located in Makati from Sering spouses which included a 3 door apartment. In 1994, Florencia
filled for a declaration of nullity of marriage on the ground of psychological incapacity. This was granted and the
spouses went on separate ways without liquidating their assets. Florencia obtained a 58 million loan together with
spouses Oliveros from Metrobank. They also executed several Real Estate Mortgages including the Makati property.
Florencia presented a waiver on the part of Nicholson for the conjugal properties yet t did not include the subject
Makati lot. Florencia and spouses Oliveros faulted on their loan obligation causing Metrobank to foreclose the REMs.
Metrobank puublished the sale of the remate properties on January 1, 2000 urging Nicholson to file for nullity of the
mortgage property on June 2000. Metrobank asserts that the disputed lot was paraphernal in nature and that the loan
was approved in good faith.

ISSUE: Can Metrobank claim the disputed property?

RULING: Metrobank may only claim 1/2 portion of the land belonging to Florencia.

In this pre-liquidation scenario, Art. 493 of the Civil Code shall govern the property relationship between the former
spouses, where:

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, and even substitute another person in its enjoyment, except when personal
rights are involved. But 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, Florencia constituted the mortgage on the disputed lot on April 30, 1997, or a little less than two
years after the dissolution of the conjugal partnership on July 31, 1995, but before the liquidation of the partnership.
Be that as it may, what governed the property relations of the former spouses when the mortgage was given is the
aforequoted Art. 493. Under it, Florencia has the right to mortgage or even sell her one-half (1/2) undivided interest in
the disputed property even without the consent of Nicholson. However, the rights of Metrobank, as mortgagee, are
limited only to the 1/2 undivided portion that Florencia owned. Accordingly, the mortgage contract insofar as it
covered the remaining 1/2 undivided portion of the lot is null and void, Nicholson not having consented to the
mortgage of his undivided half.

Heirs of Protacio Go v Servacio

GR No. 157537 September 7, 2011

Bersamin, J.

FACTS: Jesus Gaviola sold a parcel of land to Protacio Jr. with an area of 17, 140 sq mtr located in southern Leyte
on Feb. 26, 1976. Later on, Protacio Jr. Claimed that the land was sold to his father and not to him. Marta, the wife of
Protacio Sr. died on Nov. 25, 1987. on 1999 Protacio Sr. with his son Rito and wife Dina sold the property to Ester
Servacio. When the other heirs learned of the sale, they demanded Servacio to return the property. When the
barangay proceedings failed, they filed a case for the annulment of sale against Servacio and Rito. Servaco and Rito
claim that the sale is valid since the property was purchased by Protacio Sr. using his own money and does not
belong to the conjugal partnership.

ISSUE: Is the sale void by being made prior to liquidation?

RULING: No, the sale subsists but will only include the portions belonging to Protacio Sr. And Rito.

It is clear that conjugal partnership of gains established before and after the effectivity of the Family Code are
governed by the rules found in Chapter 4 (Conjugal Partnership of Gains) of Title IV (Property Relations Between
Husband And Wife) of the Family Code. Hence, any disposition of the conjugal property after the dissolution of the
conjugal partnership must be made only after the liquidation; otherwise, the disposition is void.
Before applying such rules, however, the conjugal partnership of gains must be subsisting at the time of the
effectivity of the Family Code. There being no dispute that Protacio, Sr. and Marta were married prior to the effectivity
of the Family Code on August 3, 1988, their property relation was properly characterized as one of conjugal
partnership governed by the Civil Code. Upon Martas death in 1987, the conjugal partnership was dissolved,
pursuant to Article 175 (1) of the Civil Code, and an implied ordinary co-ownership ensued among Protacio, Sr. and
the other heirs of Marta with respect to her share in the assets of the conjugal partnership pending a liquidation
following its liquidation. The ensuing implied ordinary co-ownership was governed by Article 493 of the Civil Code, to
wit:

Article 493. 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, and even substitute another person in its enjoyment, except
when personal rights are involved. But 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.

Protacio, Sr., although becoming a co-owner with his children in respect of Martas share in the conjugal partnership,
could not yet assert or claim title to any specific portion of Martas share without an actual partition of the property
being first done either by agreement or by judicial decree. Until then, all that he had was an ideal or abstract quota in
Martas share. Nonetheless, a co-owner could sell his undivided share; hence, Protacio, Sr. had the right to freely sell
and dispose of his undivided interest, but not the interest of his co-owners. Consequently, the sale by Protacio, Sr.
and Rito as co-owners without the consent of the other co-owners was not necessarily void, for the rights of the
selling co-owners were thereby effectively transferred, making the buyer (Servacio) a co-owner of Martas share. This
result conforms to the well-established principle that the binding force of a contract must be recognized as far as it is
legally possible to do so (quando res non valet ut ago, valeat quantum valere potest).

Fabian v Fabian

GR No. L- 20449 January 29, 1968

Castro, J.

FACTS: On Jan. 1 1909 Pablo Fabian bought a land from the Friar Estate of Muntinlupa Rizal. He was issued Sale
Certificate 547 for such. He died on August 2, 1928 and was survuved by his 4 daughters Esperanza, Benita I, Benita
II and Silbina. Then Silbina and Teodora, niece of deceased, was assigned the lot. Later it was sold to them by the
Director of Lands for 120 php. They have since been in possession of the lands and paid real estate taxes thereon.
On May 4, 1945 a TCT was issued to them and they divided the lot among them equally. On July 18, 1960 petitioners
prayed for the reconveyance of the land claiming that Silbina and Teodora acquired it fraudulently. Silbina knowing
that she is not the only daughter and Teodora knowing that she cannot inherit anything since there are 4 daughters.

ISSUE: Was the transfer of the property to Silbina and Teodora valid?

RULING: No, the transfer was invalid but the title was already a vested right due to the lapse of time.

The assignment and sale of the lot to the defendants. Silbina and Teodora were therefore null and void as to that
portion sold to Teodora, and as well as to that portion which lawfully devolved in favor of the appellants. To the extent
of the participation of the appellants, application must be made of the principle that if property is acquired
through fraud, the person obtaining it is considered a trustee of an implied trust for the benefit of the person from
whom the property comes. But due to a lapse of 32 years before the petitioners filed their action, the title already
passed to respondents.

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. The statute of limitations operates, as in other
cases, from the moment such adverse title is asserted by the possessor of the property. Upon the undisputed facts in
the case at bar, not only had laches set in when the appellants instituted their action for, reconveyance in 1960, but
as well their right to enforce the constructive trust had already prescribed. It logically follows from the above
disquisition that acquisitive prescription has likewise operated to vest absolute title in the appellees, pursuant to the
provisions of section 41 of Act 190 that: ten years actual adverse possession by any person claiming to be the owner
for that time of any land or interest in land, uninterruptedly continued for ten years by occupancy, descent, grants, or
otherwise, in whatever way such occupancy may have commenced or continued, 6shall vest in every actual occupant
or possessor of such land a full and complete title.

Ceniza v CA and Dabon et al

GR No. L-46345 Jan. 30, 1990

Grino-Aquino, J.

FACTS: Petitioners are from the line of Manuel Ceniza and respondents are from the line of Sofia Ceniza, Manuel’s
sister. The land in dispute is located in Mandaue city, Cebu and was co-owned by Pablo Ceniza and Vicente Dabon.
The land was part of Hacienda de Mandaue and was sold to its occupants. Pablo and Vicente acquired it on 1929
and agreed that it be in the name of Dabon. They partitioned the lot and their heirs have been living there since then.
Dabon died in 1954 and his 7 children used his portion.

On Nov. 4, 1961 Restituto Ceniza hired Bunagan, a private surveyor and divided lot 627 in 3 parts. This was the
basis for petitioners in their action for reconveyance of the portion when respondents refused to convey it. They
claimed that Dabon held the land in trust to them and as co-owners.

ISSUE: Did Dabon’s heirs acquire the land in dispute through prescription?

RULING: No, prescription does not run against a co-owner.

The trial court correctly ruled that since a trust relation and co-ownership were proven to exist between the
predecessors- in-interest of both petitioners and private respondents, prescription did not run in favor of Dabon's heirs
except from the time that they repudiated the co-ownership and made the repudiation known to the other co-owners,
Restituto and Jesus Ceniza.

Paragraph 5 of Article 494 of the Civil Code provides: No prescription shall run in favor of a co-owner or co-heir
against his co-owners or co-heirs so long as he expressly or impliedly recognizes the co-ownership.

The registration of Lot No. 627 in the name of Vicente Dabon created a trust in favor of his co-owner Jose Ceniza,
and the latter's heirs. Article 1452 of the Civil Code states: If two or more persons agree to purchase property and
common consent the legal title is taken in the name of one of them for the benefit of all, a trust is created by force of
law in favor of the others in proportion to the interest of each.

This Court has ruled in numerous cases involving fiduciary relations that, as a general rule, the trustee's possession
is not adverse and therefore cannot ripen into a title by prescription. Adverse possession requires the concurrence of
the following circumstances:

a) that the trustee has performed unequivocal acts of repudiation amounting to the ouster of the cestui que trust;

b) that such positive acts of repudiation have been made known to the cestui que trust; and

c) that the evidence thereon should be clear and conclusive.

The above elements are not present here for the petitioners/ co-owners have not been ousted from the land. They
continue to possess their respective shares of Lot 627 and they have been paying the realty taxes thereon.
Restituto's house stands on his portion of the Land. Assuming that the private respondents' rejection of the
subdivision plan for the partition of the land was an act of repudiation of the co-ownership, prescription had not yet set
in when the petitioners instituted the present action for reconveyance. These circumstances were overlooked by the
Court of Appeals.
Bicarme v CA and Bicarme

GR No. L-51914 June 6, 1990

Medialdea, J.

FACTS: It is undisputed that Spouses Juan Bicarme and Florencia Bidaya are the owners of the subject cornland and
riceland. They had 3 children: Sebastian who died when he was only a boy, herein petitioner Maria and Victoria who
was survived by respondent Cristina.Maria and Cristina are co-owners of the lands by virtue of inheritance. But
Cristina was forced to file this action since her aunt Maria refused to share the yearly fruits of the land. Maria on the
other hand claims that she acquired the land through spouses Placido Bidaya and Margarita Bose on 1925(cornland)
and 1926 (riceland) but this was belied on three deeds of sale stating that Maria acquired the lands from her father
Juan Bicarme.

ISSUE: Can Cristina still enforce her right to partition the property despite the lapse of 34 years (1974)?

RULING: Yes, prescription does not lie against a co-owner.

The main question to be resolved is whether or not Maria has been in possession of the lands in question under the
conditions required by Section 41 of the Code of Civil Procedure, as to uphold acquisitive prescription in her favor.
One of the conditions imposed by said section is that the possession must be adverse against the whole world. In
order that a possession may be deemed adverse to the cestui que trust, or the other co-owner the following must
concur:

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

In the present case, Maria Bicarme disclaims the co-ownership by denying that subject properties are the inherited
properties. Other than the tax declarations in her name, there is no written evidence that these were
acquired/purchased from Sps. Placido Biduya and Margarita Bose. Payment of land taxes does not constitute
sufficient repudiation of the co-ownership, as it is not an act adverse to Cristina's rights. Moreover, Cristina, being a
minor, until she claimed her rights, was not even aware thereof. Neither did Maria make known her repudiation to
Cristina, because all along, Maria presumed her to be dead. Her refusal to share with Cristina the yearly profits
stemmed from Cristina's failure to share in the yearly taxes. Acquisitive prescription cannot therefore apply in this
case: Acts which are adverse to strangers may not be sufficiently adverse to the 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. Additionally, it follows that neither can the
doctrine on laches apply, for absent acquisitive prescription, the case is not one of ownership, in which case, the
doctrine on imprescriptibility of an action for partition will apply. Cristina's right to partition will therefore prosper.
Digested by: MigrioVina O. Cagampang

EPITACIO DELIMAet. al vs. COURT OF APPEALS and GALILEO DELIMA


(deceased), substituted by his legal heirs, FLAVIANA VDA. DE DELIMA et.al
G.R. No. L-46296 September 24, 1991
MEDIALDEA, J

FACTS:

LinoDelimaacquired the subject property by sale on installments from the


government. He later died in 1921 leaving his three brothers and a sister namely:
EulalioDelima, Juanita Delima, Galileo Delima and Vicente Delima, as his only heirs. On
August 3, 1953, TCT No. 2744 of the subject property was issued in the name of the
Legal Heirs of LinoDelima, deceased, represented by Galileo Delima.On September 22,
1953, Galileo Delima, now substituted by respondents, executed an affidavit of "Extra-
judicial Declaration of Heirs." TCT No. 2744 was cancelled and TCT No. 3009 was
issued on February 4,1954 in the name of Galileo Delima alone to the exclusion of the
other heirs.

On February 29, 1968, EpitacioDelimaet. al. (Petitioners), who are the surviving
heirs of Eulalio and Juanita Delima, filed an action for reconveyance and/or partition of
property and for the annulment of TCT No. 3009. Petitioners contend that the right of a
co-heir to demand partition of inheritance is imprescriptible. If it does, the defenses of
prescription and laches have already been waived.

ISSUE:

Is an action for partition in this casebarred by prescription?

RULING:

Yes. As a general rule, an action to compel partition may be filed at any time by
any of the co-owners against the actual possessor. In other words, 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.However, from the moment one of the co-owners
claims that he is the absolute and exclusive owner of the properties and denies the
others any share therein, the question involved is no longer one of partition but of
ownership. In such case, the imprescriptibility of the action for partition can no longer be
invoked or applied when one of the co-owners has adversely possessed the property as
exclusive owner for a period sufficient to vest ownership by prescription.
We have held that when a co-owner of the property in question executed a deed
of partition and on the strength thereof obtained the cancellation of the title in the name
of their predecessor and the issuance of a new one wherein he appears as the new
owner of the property, thereby in effect denying or repudiating the ownership of the
other co-owners over their shares, the statute of limitations started to run for the
purposes of the action instituted by the latter seeking a declaration of the existence of
the co-ownership and of their rights thereunder. Since an action for reconveyance of
land based on implied or constructive trust prescribes after ten (10) years, it is from the
date of the issuance of such title that the effective assertion of adverse title for purposes
of the statute of limitations is counted.

Evidence shows that TCT No. 2744 in the name of the legal heirs of LinoDelima,
represented by Galileo Delima, was cancelled by virtue of an affidavit executed by
Galileo Delima and that on February 4, 1954, Galileo Delima obtained the issuance of a
new title in his name numbered TCT No. 3009 to the exclusion of his co-heirs. The
issuance of this new title constituted an open and clear repudiation of the trust or co-
ownership, and the lapse of ten (10) years of adverse possession by Galileo Delima
from February 4, 1954 was sufficient to vest title in him by prescription. As the certificate
of title was notice to the whole world of his exclusive title to the land, such rejection was
binding on the other heirs and started as against them the period of prescription. Hence,
when petitioners filed their action for reconveyance and/or to compel partition on
February 29, 1968, such action was already barred by prescription. Whatever claims the
other co-heirs could have validly asserted before can no longer be invoked by them at
this time.
Digested by: MigrioVina O. Cagampang

ARTURIO TRINIDADvs. COURT OF APPEALS, FELIX TRINIDAD (deceased) and


LOURDES TRINIDAD
G.R. No. 118904. April 20, 1998
PANGANIBAN, J.:

FACTS:
Patricio Trinidad was the original owner of the four parcels of land, the subject
properties in this case. He died on 1940, leaving the 4 parcels of land to his three (3)
children, Inocentes, Lourdes and Felix.Arturio Trinidad, born on July 21, 1943,
claimed to be the legitimate son of the late Inocentes Trinidad. In 1970, he
demanded from Felix and Lourdes Trinidad (respondents) to partition the land into
three (3) equal shares and to give him the one-third (1/3) individual share of his late
father, but the respondents refused.On August 10, 1978, Arturiofiled an action for
partition of four (4) parcels of land.Respondents denied that Arturio was the son of
the late Inocentes Trinidad. They contended that Inocentes was single when he died
in 1941, before Arturio’sbirth. Defendants also denied that plaintiff had lived with
them, and claimed that the parcels of land described in the complaint had been in
their possession since the death of their father in 1940 and that they had not given
Arturioa share in the produce of the land.

Issue:

Was Arturo’s claim time-barred under the rules on acquisitive prescription?

Ruling: NO

The Court firstly held that Arturio has successfully proven that he is a co-heir of the
late Patricio and that he was born during the existence of a valid and subsisting
marriage between his mother Felicidad and his putatitive father Inocentes.
On the main issue, private respondents have not acquired ownership of the property
in question by acquisitive prescription. In a co-ownership, the act of one benefits all the
other co-owners, unless the former repudiates the co-ownership.Thus, no prescription
runs in favor of a co-owner or co-heir against his or her co-owners or co-heirs, so long
as he or she expressly or impliedly recognizes the co-ownership.
In this particular case, it is undisputed that, prior to the action for partition, petitioner,
in the concept of a co-owner, was receiving from private respondents his share of the
produce of the land in dispute. Until such time, recognition of the co-ownership by
private respondents was beyond question. There is no evidence, either, of their
repudiation, if any, of the co-ownership of petitioners father Inocentes over the
land. Further, the titles of these pieces of land were still in their father’s name. Although
private respondents had possessed these parcels openly since 1940 and had not
shared with petitioner the produce of the land during the pendency of this case, still,
they manifested no repudiation of the co-ownership.
In the case of Mariategui vs. Court of Appeals, the Court held that prescription does
not run again private respondents with respect to the filing of the action for partition so
long as the heirs for whose benefit prescription is invoked, have not expressly or
impliedly repudiated the co-ownership. In the other words, prescription of an action for
partition does not lie except when the co-ownership is properly repudiated by the co-
Otherwise stated, a co-owner cannot acquire by prescription the share of the other co-
owners absent a clear repudiation of co-ownership duly communicated to the other co-
owners. Furthermore, an action to demand partition is imprescriptible and cannot be
barred by laches. On the other hand, an action for partition may be seen to be at once
an action for declaration of co-ownership and for segregation and conveyance of a
determinate portion of the property involved.
Digested by: MigrioVina O. Cagampang

TOMAS CLAUDIO MEMORIAL COLLEGE, INC.vs. COURT OF APPEALS and HON.


ALEJANDRO S. MARQUEZet. al
G.R. No. 124262; October 12, 1999
QUISUMBING, J.:

FACTS:
On December 13, 1993, Alejandro Marquez et. al, filed an action for Partition. They
alleged that their predecessor-in-interest, Juan De Castro, died intestate in 1993 and
they are his only surviving and legitimate heirs. They also alleged that their father
owned a parcel of land designated as Lot No. 3010 located at Barrio San Juan, Morong,
Rizal, with an area of two thousand two hundred sixty nine (2,269) square meters more
or less. They further claim that in 1979, without their knowledge and consent, said lot
was sold by their brother Mariano to petitioner. The sale was made possible when
Mariano represented himself as the sole heir to the property. It is the contention of
private respondents that the sale made by Mariano affected only his undivided share to
the lot in question but not the shares of the other co-owners equivalent to four fifths
(4/5) of the property.Petitioner filed a motion to dismiss contending, as its special
defense, lack of jurisdiction and prescription and/or laches.
ISSUE:Whether an action for partition is barred by prescription
RULING:
No. An action for partition cannot be barred by prescription. Pursuant to Article 494
of the Civil Code, no co-owner shall be obliged to remain in the co-ownership. Such co-
owner may demand at anytime the partition of the thing owned in common, insofar as
his share is concerned. In Budlong vs. Bondoc,this Court has interpreted said provision
of law to mean that the action for partition is imprescriptible. It cannot be barred by
prescription. Article 494 of the Civil Code explicitly declares: No prescription shall lie in
favor of a co-owner or co-heirs as long as he expressly or impliedly recognizes the co-
ownership.
Digested by: MigrioVina O. Cagampang

PHILIP C. SANTOS and HEIRS OF ELISEO M. SANTOSvs. LADISLAO M. SANTOS


G.R. No. 139524;October 12, 2000
GONZAGA-REYES, J.

FACTS:

A 391 square meter parcel of land was owned by Isidra Santos, single, who died
intestate and without issue in 1967. She was survived by her two brothers, Ladislao and
Eliseo. Sometime in 1993, Ladislao filed an action for judicial partition of the Isidra
property against his brother Eliseo and the latter’s son Philip. While admitting that
Ladislao and Eliseo inherited the subject Isidra property, Eliseo and Philip submitted
that Eliseo Santos and wife and Ladislao and wife signed a document wherein Eliseo
acquired the subject lot from the combined partition of the estate of their father
Bonifacio Santos and their sister Isidra Santos. Bonifacio’s estate was composed of
6,387 square meters while that of Isidra Santos is the subject property with an area of
391 square meters. Out of this combined parcels of land, Ladislao got 3,387 square
meters while Eliseo got 3,000 square meters and the subject Isidra property with an
area of 391 square meters. Eliseo, in turn, donated the subject Isidra property to his
son, Virgilio Santos.

Petitioners insist that they have effectively refuted the co-ownership between
Ladislao and Eliseo based on a "lawful document". They further insisted that acquisitive
prescription has already set in and that estoppel lies to bar the instant action for
partition. According to them, Virgilio Santos was already in possession of the subject
property since after the death of Isidra on April 1, 1967. Thereafter, Philip Santos took
possession of the subject property on December 16, 1980 upon its sale on said date.
They reason out that more than 13 years had lapsed from April 1, 1967 to December
16, 1980 and that more than 12 years had lapsed from the time Philip Santos took
possession of the property on December 16, 1980 up to the time Ladislao Santos filed
the action for partition on May 13, 1993. Petitioners conclude that the instant action is
already barred by ordinary acquisitive prescription of ten years.

ISSUE:

Is the action for partition in this case already barred by ordinary acquisitive
prescription of 10 years and estoppel by laches?

RULING: No.
Considering that there was no proof that Ladislao Santos executed
any "Combined Deed of Partition" in tandem with the Eliseo Santos, we rule that a co-
ownership still subsists between the brothers over the Isidra property. This being the
case, we apply Article 494 of the Civil Code which states that, "prescription does not run
in favor of a co-owner or co-heir against his co-owners or his co-heirs so long as he
expressly or impliedly recognizes the co-ownership.

Prescription, as a mode of terminating a relation of co-ownership, must have


been preceded by repudiation (of the co-ownership). The act of repudiation, in turn, is
subject to certain conditions: (1) a co-owner repudiates the co-ownership; (2) such an
act of repudiation is clearly made known to the other co-owners; (3) the evidence
thereon is clear and conclusive; and (4) he has been in possession through open,
continuous, exclusive, and notorious possession of the property for the period required
by law (Adile vs. Court of Appeals)

In the instant case, there is no showing that Eliseo Santos had complied with
these requisites.We are not convinced that Eliseo had repudiated the co-ownership, and
even if he did, there is no showing that the same had been clearly made known to
Ladislao.

Acts of possessory character executed in virtue of license or tolerance of the


owners shall not be available for the purposes of possession (Article 1119, New Civil
Code.Considering that Virgilio Santos was the ward of Isidra Santos ever since when
Virgilio Santos was still an infant, it was but natural that Ladislaodid not interpose any
objection to the continued stay of Virgilio Santos and his family on the property and
even acquiesce thereto. Ladislaomust have assumed too, that his brother, Eliseo,
allowed his son to occupy the property and use the same for the time being. Hence,
such possession by Virgilio Santos and Philip Santos of the property does not constitute
a repudiation of the co-ownership by Eliseo Santos and of his privies for that matter.It is
probable that said conduct was simply tolerated by the plaintiffs on account of his being
their uncle, and they never thought that by said conduct the defendant was attempting
to oust them forever from the inheritance, nor that the defendant would have so
intended in any way, dealing as we do here with the acquisition of a thing by
prescription, the evidence must be so clear and conclusive as to establish said
prescription without any shadow of doubt. This does not happen in the instant case, for
the defendant did not even try to prove that he has expressly or impliedly refused
plaintiff’s right over an aliquot part of the inheritance.

The action for partition is also not barred by laches. An action to demand partition
is imprescriptible or cannot be barred by laches. Each co-owner may demand at any
time the partition of the common property.
Digested by: MigrioVina O. Cagampang

CONSOLACION AUSTRIA VS CONSTANCIA LICHAUCO ET. AL.


G.R No. 170080; April 4, 2007
TINGA, J

FACTS:

ConstanciaLichauco, Consuelo Jalandoni, BenedictoQuintos, Antonio


Quintos and Consolacion Austria are siblings of full blood. Jose Alberto, Ricardo,
Jr., Aileen and Tyrone, all surnamed Quintos, are the nephews and niece of the
defendant-appellant. They are co-owners of two (2) parcels of land. The
aforesaid parcels of land have permanent improvements thereon which straddle
both lots, namely, a residential bungalow and two (2) units, two-storey
apartments, the titles of which are registered jointly in the names of the parties as
co-owners thereof.

The Lichaucoet. alalleged that sometime in the early part of 1996, they informed
Austria of their desire to have the subject properties partitioned based on the
percentage of each co-owners respective share. A realtor was engaged to
prepare the schemes by which the subject properties could be physically
partitioned among the co-owners. Austriarefused to accede to any of the
schemes presented by the realtor. Because of her refusal to partition the
property, and the inability of the co-owners to mutually agree on an arrangement
acceptable to all of them, on July 1, 1997, the Lichaucoet al filed a complaint
against Austria and Benedicto Quintos and Antonio Quintos for partition of the
subject property. Lichauco et.al. arguedthat they cannot be compelled to remain
in co-ownership only because of petitioners unjustified refusal to consent to a
partition.

ISSUE:

1. What are the 2 stages in an action for partition?


2. Was the Trial Court was correct in decreeing the partition
3. Was authorizing the sale to a third party proper?

RULING:

1. Stages in an action for partition

There are two stages in every action for partition. The first phase is the
determination of whether a co-ownership in fact exists and a partition is proper. This
phase may end either: (a) with a declaration that plaintiff is not entitled to have a
partition either because a co-ownership does not exist, or partition is legally prohibited;
or (b) with a determination that a co-ownership does in truth exist, partition
isproper in the premises, and an accounting of rents and profits received by the
defendant from the real estate in question is in order. In the latter case, the parties may,
if they are able to agree, make partition among themselves by proper instruments of
conveyance, and the court shall confirm the partition so agreed upon.

The second phase commences when it appears that the parties are unable to agree
upon the partition directed by the court. In that event, partition shall be done for the
parties by the court with the assistance of not more than three (3) commissioners. This
second stage may well also deal with the rendition of the accounting itself and its
approval by the court after the parties have been accorded opportunity to be heard
thereon, and an award for the recovery by the party or parties thereto entitled of their
just share in the rents and profits of the real estate in question.

The proceedings in this case have only reached the first phase. It must be
mentioned as an aside that even if the order decreeing partition leaves something more
to be done by the trial court for the complete disposition of the case, i.e., the
appointment of commissioners, the proceedings for the determination of just
compensation by the appointed commissioners, the submission of their reports and
hearing thereon, and the approval of the partition, it is considered a final order and may
be appealed by the party aggrieved thereby.

2. The Trial Court was correct in decreeing the partition

There is no question that a co-ownership exists between petitioner and


respondents. To this extent, the trial court was correct in decreeing partition in line with
the Civil Code provision that no co-owner shall be obliged to remain in the co-
ownership.

3. Authorizing the sale to a third party is not proper

The trial court went astray when it also authorized the sale of the subject
properties to a third party and the division of the proceeds thereof. What makes this
portion of the decision all the more objectionable is the fact that the trial court
conditioned the sale upon the price and terms acceptable to plaintiffs (respondents
herein) only, and adjudicated the proceeds of the sale again only to plaintiffs.
Digested by: MigrioVina O. Cagampang

CARMEN FANGONIL – HERRERA vs. TOMAS FANGONIL et al


G.R. No. 169356; August 28, 2007
CHICO-NAZARIO, J.:

FACTS:

Petitioner and respondents are children of the late Fabian Fangonil and Maria
LlorenFangonil. The Fangonil spouses had 7 children: Tomas, Pura, Marina, Mariano,
Milagros, Sinforoso, and Carmen. The Fangonilspouses died intestate, leaving an
estate consisting of 7 parcels of land. The only remaining heirs were the 7 children.Prior
to an extrajudicial settlement executed by the heirs in 1983, there was never any
settlement of the estate. Prior to their death, transactions involving parcels number six
and seven took place.A portion of the sixth parcelwas sold with a right to repurchase to
a certain ConstantinoOribello. The transaction was under an agreement designated as
a Deed of Pacto de Retro Salebetween Maria LlorenFangonil, who was a widow by
then, and ConstantinoOribello. On the other hand, the seventh parcel of land was sold,
with a right to repurchase, by Fabian Fangonil to QuirinoEstacio.

On 1 March 1995, six of the seven children of the Fangonil spouses, excluding
Carmen, filed with the RTC a petition for judicial partition of the seven parcels of land,
with prayer for appointment of Marina Fangonil as administratrix. Petitioner intervened
to oppose the petition claiming exclusive ownership over parcels six and seven, and
that the right to claim by the respondents had long prescribed as a result of their
inaction

ISSUE: Does the right to claim by the Tomas Fangonil et.al have long prescribed?

RULING:

No. their right to claim have not prescribed.

Petitioner’s possession of parcels 6 and 7 did not ripen into sole and exclusive
ownership thereof. First, prescription applies to adverse, open, continuous, and
exclusive possession. In order that a co-owner’s possession may be deemed adverse to
the other co-owners, the following elements must concur: (1) that he has performed
unequivocal acts of repudiation amounting to an ouster of the other co-owners; (2) that
such positive acts of repudiation have been made known to the other co-owners; and
(3) that the evidence thereon must be clear and convincing. Clearly, petitioner cannot
claim adverse possession in the concept of an owner where she voluntarily executed
documents stating that she was a mere creditor and/or co-owner. Mere silent
possession by a co-owner; his receipt of rents, fruits or profits from the property; his
erection of buildings and fences and the planting of trees thereon; and the payment of
land taxes cannot serve as proofs 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.

In this case, we find that petitioner effected no clear and evident repudiation of
the co-ownership. Petitioner’s only act of repudiation of the co-ownership was when she
refused to honor the extrajudicial settlement in 1994. Alternatively, possession by 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. A co-ownership is a form of trust, with
each owner being a trustee for each other. Mere actual possession by one will not give
rise to the inference that the possession was adverse because a co-owner is, after all,
entitled to possession of the property. Thus, as a rule, prescription does not run in favor
of a co-heir or co-owner as long as he expressly or impliedly recognizes the co-
ownership; and he cannot acquire by prescription the share of the other co-owners,
absent a clear repudiation of the co-ownership. An action to demand partition among
co-owners is imprescriptible, and each co-owner may demand at any time the partition
of the common property.
Digested by: Gretchen B. Cañedo

TIRSO D. MONTEROSO, petitioner,


-versus -
COURT OF APPEALS, SOLEDAD TINGA, MONTEROSO-CAGAMPANG, REYGULA
MONTEROSO-BAYAN, PERFECTO L. CAGAMPANG, SR., SOFIA PENDEJITO
VDA. DE MONTEROSO, FLORENDA MONTEROSO, ALBERTO MONTEROSO,
HEIRS OF FABIAN MONTEROSO, JR., REYNATO MONTEROSO, RUBY
MONTEROSO, MARLENE MONTEROSO-POSPOS, ADELITA MONTEROSO-
BERENGUEL, and HENRIETO MONTEROSO, respondents.
G.R. No. 105608, April 30, 2008
DECISION
VELASCO, JR., J.:

FACTS:

Don Fabian B. Monteroso, Sr., was a former justice of the peace who married twice and
sired eight children, four from each union. In 1906, Don Fabian married Soledad Doldol.
Out of this marriage were born Soledad, Reygula, Benjamin, and Tirso. On April 8,
1927, Soledad Doldol Monteroso passed away. A little over a year later, Don Fabian
contracted a second marriage with Sofia Pendejito. From this union were born Florenda,
Reynato, Alberto, and Fabian, Jr.

After the death of his first wife, Don Fabian filed before the CFI an intestate proceeding
for the estate of his deceased first wife, Soledad D. Monteroso, (SP) No. 309, to obviate
any dispute over the inheritance of his children from his first marriage which the CFI
later approved per an Orden (Order)–– a Proyecto de Particion (Project of Partition).The
partition in SP No. 309 covered Parcels F-1 to F-5, and adjudicated to Don Fabian the
whole of Parcels F-1, F-2, and F-3, and one-half of Parcel F-5, while the intestate estate
of Soledad D. Monteroso comprised the whole of Parcel F-4 and one-half of Parcel F-5.
The intestate estate of Soledad D. Monteroso was partitioned and distributed to her four
children in equal shares.

On October 26, 1948, Don Fabian passed away but during his lifetime, the following
properties were acquired. The "F" designation were for the first marriage while the “S”
designation is for second marriage.

PARCEL F-ONE PARCEL S-ONE


PARCEL F-TWO PARCEL S-TWO
PARCEL F-THREE PARCEL S-THREE
PARCEL F-FOUR PARCEL S-FOUR
PARCEL F-FIVE
PARCEL F-SIX
PARCEL F-SEVEN
PARCEL F-EIGHT
On July 28, 1969, the children of the late Benjamin D. Monteroso filed with the RTC a
Complaint for Recovery of Property with Damages against their uncle, Tirso D.
Monteroso. Docketed as Civil Case No. 1292, the complaint involved a portion of
Parcel F-4. They alleged that their uncle, Tirso, was entrusted with the one-fourth
portion of Parcel F-4 as part of the share from SP No. 309 partition and that he refused
to surrender and deliver the same when they demanded such delivery upon their
reaching the majority age. Tirso countered that the portion pertaining to Benjamin was
never entrusted to him; it was in the possession of their sister, Soledad Monteroso-
Cagampang, who was not entitled to any share in Parcel F-4, having previously opted to
exchange her share in said property for another parcel of land, i.e., Parcel F-7, then
being occupied by her.

On April 14, 1970, Tirso, in turn, filed a Complaint for Partition and Damages with
Receivership docketed as Civil Case No. 1332, involving 12 parcels of land (i.e.,
Parcels F-1 to F-8 and Parcels S-1 to S-4) against his stepmother, Pendejito, and all his
full and half-siblings and/or their representatives. Petitioners, citing Article 494 of the
Civil Code and Art. 1965 of the Spanish Civil Code, aver that the right to ask partition is
proper only where co-ownership is recognized. They also suggest that no co-ownership
obtains in this case considering that no less than Tirso avers in his complaint in Civil
Case No. 1332 that from the time of Don Fabian’s death in 1948, the lots in question
have been in the exclusive, adverse, and public possession of the Cagampang
spouses.

ISSUES:

Is Partition the proper remedy for Tirso to recover his share of the properties?
Is Partition proper for conjugal properties of second marriage?

HELD:

Yes. Sec. 1, Rule 69 of the Rules of Court pertinently provides:

SECTION 1. Complaint in action for partition of real estate. –– A person having


the right to compel the partition of real estate may do so as provided in this
Rule, setting forth in his complaint the nature and extent of his title and an
adequate description of the real estate of which partition is demanded and joining
as defendants all other persons interested in the property.

Being a compulsory heir of Don Fabian, Tirso has the right to compel partition of the
properties comprising the intestate estate of Don Fabian as a measure to get his
hereditary share. His right as an heir to a share of the inheritance covers all the
properties comprising the intestate estate of Don Fabian at the moment of his death.
Before partition and eventual distribution of Don Fabian’s intestate estate, a regime of
co-ownership among the compulsory heirs existed over the undivided estate of Don
Fabian.
Being a co-owner of that intestate estate, Tirso’s right over a share thereof is
imprescriptible. As a matter of law, acquisitive prescription does not apply nor set in
against compulsory heirs insofar as their pro-indiviso share or legitime is concerned,
unless said heirs repudiate their share. Contrary to petitioners’ stance, reconveyance is
not the proper remedy available to Tirso. Be it remembered in this regard that Tirso is
not asserting total ownership rights over the subject properties, but only insofar as his
legitime from the intestate estate of his father, Don Fabian, is concerned.

Acquisitive prescription, however, may still set in in favor of a co-owner, "where there
exists a clear repudiation of the co-ownership, and the co-owners are apprised of the
claim of adverse and exclusive ownership."

In the instant case, no extinctive or acquisitive prescription has set in against Tirso and
other compulsory heirs in favor of the Cagampang spouses because effective
repudiation had not timely been made against the former. As aptly put by the appellate
court, the repudiation which must be clear and open as to amount to an express
disavowal of the co-ownership relation happened not when the deeds of absolute sale
were executed in 1939, as these could not have amounted to a clear notice to the other
heirs, but in 1961 when the Cagampang spouses refused upon written demand by Tirso
for the partition and distribution of the intestate estate of Don Fabian. Since then, Tirso
was deemed apprised of the repudiation by the Cagampang spouses.

However,considering that the new Civil Code was already then in effect, Art. 1141 of
said Code applies; thus, Tirso has at the very least 10 years and at the most 30 years to
file the appropriate action in court. The records show that Tirso’s cause of action has
not prescribed as he instituted an action for partition in 1970 or only nine years after the
considered express repudiation. Besides, acquisitive prescription also does not lie
against Tirso even if we consider that a valid express repudiation was indeed made in
1961 by the Cagampang spouses since in the presence of evident bad faith, the
required extraordinary prescription period of 30 years has not yet lapsed, counted from
said considered repudiation. Such would still be true even if the period is counted from
the time of the death of Don Fabian when the Cagampang spouses took exclusive
possession of the subject properties.

ISSUE 2

Yes. Sec. 105 of CA 141, which pertinently provides:

Sec. 105. If at any time the applicant or grantee shall die before the issuance of
the patent or the final grant of the land, or during the life of the lease, or while the
applicant or grantee still has obligations pending towards the Government, in
accordance with this Act, he shall be succeeded in his rights and obligations with
respect to the land applied for or granted or issued under this Act by his heirs in
law, who shall be entitled to have issued to them the patent or final concession if
they show that they have complied with the requirements therefor, and who shall
be subrogated in all his rights and obligations for the purposes of this Act.
It is undisputed that Don Fabian was the homestead patent applicant who was
subrogated to the rights of the original applicants, spouses Simeon Cagaanan and
Severina Naranjo, by purchasing from the latter Parcel S-1 on May 8, 1943. Don Fabian
cultivated the applied area and declared it for taxation purposes. The application,
however, would be rejected because death supervened. In 1963, Pendejito filed her
own homestead application for Parcel S-1.

However, since Don Fabian was responsible for meeting the requirements of law for
homesteading Parcel S-1, said property, following Soliman, cannot be categorized as
the paraphernal property of Pendejito. Thus, the homestead patent thereto, if eventually
issued, must be made in the name of the compulsory heirs of Don Fabian. Over it,
Pendejito shall be entitled, pursuant to Art. 834 of the Spanish Civil Code of 1889, only
to a usufructuary right over the property equal to the corresponding share of each of
Don Fabian’s compulsory heirs, i.e., his eight children.
Digested by: Gretchen B. Cañedo

ARMANDO V. ALANO [Deceased], Substituted by Elena Alano-Torres, petitioner


-versus -
PLANTERS DEVELOPMENT BANK,
as Successor-in-Interest of MAUNLAD
SAVINGS and LOAN ASSOCIATION, INC., respondent.
G.R. No. 171628, June 13, 2011
DECISION
DEL CASTILLO, J.:

FACTS:

Petitioner Armando V. Alano and his brother, the late Agapito V. Alano, Jr., inherited
from their father a parcel of land located at Gov. Forbes St., Sampaloc, Manila. The
brothers decided to sell their property and from the proceeds of the sale they purchased
a residential house located at No. 60 Encarnacion St., BF Homes, Quezon City. The
title of the Quezon City property, however, was not immediately transferred to them
because the duplicate and original copies of the title were destroyed by a fire that gutted
the Quezon City Hall Building.

When Agapito died, his wife, Lydia and four legitimate children adjudicated to
themselves the property. Consequently, title to the said property was reconstituted as
TCT No. 18990 and registered solely in the names of Lydia and her four children. This
prompted petitioner to execute an Affidavit of Adverse Claim which was annotated on
TCT No. 18990. However, Lydia filed with the Register of Deeds an Affidavit of
Cancellation of Adverse Claim, which caused the cancellation of the adverse claim
annotated on TCT No. 18990. Thereafter, by virtue of a Deed of Absolute Sale allegedly
executed by her children in her favor, TCT No. 18990 was cancelled and a new one,
TCT No. 90388, was issued solely in her name.

On February 8, 1994, Slumberworld, Inc., represented by its President, Melecio A.


Javier, and Treasurer, Lydia, obtained from Maunlad Savings and Loan Association,
Inc. a loan of P2.3 million, secured by a Real Estate Mortgage over the property
covered by TCT No. 90388. Thus, on April 20, 1994, Armando filed a Complaint against
Lydia, Melecio A. Javier, Maunlad Savings and Loan Association, Inc. and the Register
of Deeds of Quezon City before the Regional Trial Court (RTC) of Quezon
City. Petitioner sought the cancellation of TCT No. 90388, the issuance of a new title in
his name for his one-half share of the Quezon City property, and the nullification of real
estate mortgage insofar as his one-half share is concerned.

ISSUE:

Is the real estate mortgage executed by Lydia valid and binding with respect to
Armando’s share in the subject property?
HELD:

No. Under Article 493 of the Civil Code, a co-owner can alienate only his pro
indiviso share in the co-owned property, and not the share of his co-owners.

In the present case, while the credit investigator conducted an ocular inspection of the
property as well as a neighborhood checking and found the subject property occupied
by the mortgagor Lydia and her children, he, however, failed to ascertain whether the
property was occupied by persons other than the mortgagor. Had he done so, he would
have discovered that the subject property is co-owned by petitioner and the heirs of his
brother. Since Maunlad Savings and Loan Association, Inc. was remiss in its duty in
ascertaining the status of the property to be mortgaged and verifying the ownership
thereof, it is deemed a mortgagee in bad faith.

Consequently, the real estate mortgage executed in its favor is valid only insofar as the
share of the mortgagor Lydia in the subject property.

Other Principles of Law

The rule that only questions of law may be raised in a petition for review
on certiorari under Rule 45 of the Rules of Court is not without exception. A review of
factual issues is allowed when there is a misapprehension of facts or when the
inference drawn from the facts is manifestly mistaken. This case falls under exception.

The general rule that a mortgagee need not look beyond the title does not apply to
banks and other financial institutions as greater care and due diligence is required of
them. Imbued with public interest, they are expected to be more cautious than ordinary
individuals. Thus, before approving a loan, the standard practice for banks and other
financial institutions is to conduct an ocular inspection of the property offered to be
mortgaged and verify the genuineness of the title to determine the real owner or owners
thereof. Failure to do so makes them mortgagees in bad faith.
Digested by: Gretchen B. Cañedo

THE HEIRS OF PROTACIO GO, SR. and MARTA BAROLA, namely: LEONOR,
SIMPLICIO, PROTACIO, JR., ANTONIO, BEVERLY ANN LORRAINNE, TITA,
CONSOLACION, LEONORA and ASUNCION, all surnamed GO, represented by
LEONORA B. GO, Petitioners
-versus -
ESTER L. SERVACIO and RITO B. GO, Respondents.
G.R. No. 157537, September 7, 2011
DECISION
BERSAMIN, J.:

FACTS:

On February 22, 1976, Jesus B. Gaviola sold two parcels of land with a total area of
17,140 square meters situated in Southern Leyte to Protacio B. Go, Jr. (Protacio, Jr.).
Twenty three years later, or on March 29, 1999, Protacio, Jr. executed an Affidavit of
Renunciation and Waiver,[1] whereby he affirmed under oath that it was his father,
Protacio Go, Sr. (Protacio, Sr.), not he, who had purchased the two parcels of land (the
property).

On November 25, 1987, Marta Barola Go died (wife of Protacio, Sr. and mother of the
petitioners. On December 28, 1999, Protacio, Sr. and his son Rito B. Go (joined by
Ritos wife Dina B. Go) sold a portion of the property with an area of 5,560 square
meters to Ester L. Servacio (Servacio) for ₱5,686,768.00.

On March 2, 2001, the petitioners demanded the return of the property, but Servacio
refused to heed their demand. After barangay proceedings failed to resolve the
dispute, they sued Servacio and Rito in the RTC for the annulment of the sale of the
property. The petitioners averred that following Protacio, Jr.s renunciation, the property
became conjugal property; and that the sale of the property to Servacio without the prior
liquidation of the community property as provided for by Article 130 of the Family Code,
between Protacio, Sr. and Marta was null and void.

The RTC affirmed the validity of the sale of the property, holding that, as long as the
portion sold, alienated or encumbered will not be allotted to the other heirs in the final
partition of the property, or to state it plainly, as long as the portion sold does not
encroach upon the legitime of other heirs, it is valid.

ISSUE:

Is the sale void for being made without prior liquidation?


HELD:

No. Pursuant to Article 175 (1) of the Civil Code, upon Marta’s death an implied ordinary
co-ownership ensued among Protacio, Sr. and the other heirs with respect to her share
in the assets of the conjugal partnership pending a liquidation following its liquidation.
Hence, the ensuing implied ordinary co-ownership was governed by Article 493 of
the Civil Code.

Article 493. 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, and even substitute another person in its
enjoyment, except when personal rights are involved. But 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. (399)

Protacio, Sr., although becoming a co-owner with his children in respect of Martas share
in the conjugal partnership, could not yet assert or claim title to any specific portion of
Martas share without an actual partition of the property being first done either by
agreement or by judicial decree. Until then, all that he had was an ideal or abstract
quota in Martas share. Nonetheless, a co-owner could sell his undivided share; hence,
Protacio, Sr. had the right to freely sell and dispose of his undivided interest, but not the
interest of his co-owners.
Consequently, the sale by Protacio, Sr. and Rito as co-owners without the consent of
the other co-owners was not necessarily void, for the rights of the selling co-owners
were thereby effectively transferred, making the buyer (Servacio) a co-owner of Martas
share. This result conforms to the well-established principle that the binding force of a
contract must be recognized as far as it is legally possible to do so (quando res non
valet ut ago, valeat quantum valere potest).

Other Principles and Laws

Article 130 is to be read in consonance with Article 105 of the Family Code:

Article 105. In case the future spouses agree in the marriage settlements that the
regime of conjugal partnership of gains shall govern their property relations
during marriage, the provisions in this Chapter shall be of supplementary
application.
Digested by: Gretchen B. Cañedo

RICARDO RIZAL, POTENCIANA RIZAL, SATURNINA RIZAL, ELENA RIZAL, and


BENJAMIN RIZAL, Petitioners,
- versus -
LEONCIA NAREDO, ANASTACIO LIRIO, EDILBERTO CANTAVIEJA, GLORIA
CANTAVIEJA, CELSO CANTAVIEJA, and the HEIRS of MELANIE CANTAVIEJA,
Respondents.
G.R. No. 151898, March 14, 2012
DECISION
REYES, J.:

FACTS:

Herein petitioners Ricardo, Potenciana, Elena, Saturnina and Benjamin, all surnamed
Rizal, commenced Civil Case No. 7836 against Matias Naredo (Matias), Valentin
Naredo (Valentin) and Juana de Leon (Juana) before CFI of Laguna involving the
accretion of 2 hectares of land to Lot No. 454 of the Calamba Estate. The CFI awarded
the ownership of the accretion to the petitioners and ordered the defendants therein to
vacate the said land and to pay P500.00 a year from 1943 as reasonable rent for their
occupancy thereof.

To satisfy the money judgment in Civil Case No. 7836, the provincial sheriff of Laguna
levied upon Lots Nos. 252 and 269 of the Calamba Estate, together with the house
erected on Lot No. 252. After the petitioners posted the required bond, the provincial
sheriff proceeded with the auction sale on April 7, 1951. The petitioners were declared
the highest bidders. A final deed of sale was issued to them on April 15, 1952.

On May 9, 1955, Marcela, Leoncia, Matias, Valentin, and Juana instituted Civil Case
No. 9908 before the CFI Branch 1, Laguna, questioning the validity of the execution
sale claiming that the subject properties were exempt from execution. However, the CFI
declared valid the execution sale of Lots Nos. 252 and 269 with a qualification that the
petitioners only acquired whatever rights, title or interests Matias, Valentin and Juana
had in Lot No. 252. Although the CFI ordered that the petitioners be placed in
possession of Lots Nos. 252 and 269 and Matias and Valentin be ejected therefrom, it
did not evict Marcela and Leoncia from Lot No. 252 since they were not parties to Civil
Case No. 7836.

After the aforesaid judgment in Civil Case No. 9908, the petitioners filed Civil Case No.
36-C against Marcela and Leoncia for partition, accounting and recovery of possession
of Lot No. 252. The parties then entered into a Compromise Agreement whereby the
parties acknowledged that they owned Lot No. 252 in common, with 3/5 thereof as the
interest of the petitioners and the other 2/5 belonging to therein defendants Marcela and
Leoncia. Said Compromise Agreement was approved by the CFI Branch VI, Laguna, in
an Order dated December 1, 1971.
Ten years after or on August 11, 1981, Marcela and Leoncia, assisted by their
husbands, instituted Civil Case No. 299-83-C assailing the Compromise
Agreement. They claimed that said agreement was a forgery and that their lawyer was
not duly authorized for the purpose. In an Order dated July 6, 1984, the trial court
dismissed the case without prejudice to the plaintiffs failure to prosecute.

Thereafter, on September 26, 1984, Marcela and Leoncia instituted Civil Case No. 792-
84-C, for enforcement of judgment, partition and segregation of shares with damages
over Lot No. 252. However, on July 6, 1985, the trial court dismissed the complaint on
the ground of prescription. On September 21, 1987, the petitioners again filed a
Complaint before the RTC for the immediate segregation, partition and recovery of
shares and ownership of Lot No. 252, with damages. This was docketed as Civil Case
No. 1153-87-C. However, on April 3, 1990, on the basis of the pleadings and exhibits,
the court a quo dismissed the complaint because of res judicata.

ISSUES:

Does co-ownership exist?


Is partition allowed despite the compromise agreement?

HELD:

ISSUE 1

No. Article 484 of the New Civil Code provides that there is co-ownership whenever the
ownership of an undivided thing or right belongs to different persons.

Thus, on the one hand, a co-owner of an undivided parcel of land is an owner of


the whole, and over the whole he exercises the right of dominion, but he is at the
same time the owner of a portion which is truly abstract. On the other hand,
there is no co-ownership when the different portions owned by different
people are already concretely determined and separately identifiable, even
if not yet technically described.

In the present case, the compromise judgment in Civil Case No. 36-C settled the
question of which specific portions of Lot No. 252 accrued to the parties separately as
their proportionate shares therein. Since the partition was immediately executory, then
no co-ownership exist when the different portions owned by different people are already
concretely determined and separately identifiable, even if not yet technically described

It bears to note that the parties even acknowledged in Paragraph 7 of the Compromise
Agreement that they had accepted their respective determined shares in the subject
parcel of land, and they agree to have their respective determined portions, Two-Fifths
(2/5) for defendants and Three-Fifths (3/5) for plaintiffs, to be covered by independent
and separate certificates of title in their respective names.
ISSUE 2

No. Pursuant to Article 494 of the Civil Code, no co-owner is obliged to remain in the co-
ownership, and his proper remedy is an action for partition under Rule 69 of the Rules
of Court, which he may bring at anytime in so far as his share is concerned.

In the present case, the partition of Lot No. 252 was the result of the approved
Compromise Agreement in Civil Case No. 36-C, which was immediately final and
executory. Absent any showing that said Compromise Agreement was vitiated by fraud,
mistake or duress, the court cannot set aside a judgment based on compromise. It is
axiomatic that a compromise agreement once approved by the court settles the rights of
the parties and has the force of res judicata.

Therefore, it cannot be disturbed except on the ground of vice of consent or forgery.

Other Principles and Laws

Article 1079 of the Civil Code defines partition as the separation, division and
assignment of a thing held in common among those to whom it may belong. It has been
held that the fact that the agreement of partition lacks the technical description of the
parties' respective portions or that the subject property was then still embraced by the
same certificate of title could not legally prevent a partition, where the different portions
allotted to each were determined and became separately identifiable.
Digested by: Gretchen B. Cañedo

VIRGILIO B. AGUILAR, petitioner,


- versus -
COURT OF APPEALS and SENEN B. AGUILAR, respondents.
Jose F. Manacop for petitioner.
Siruello, Muyco & Associates Law Office for private respondent.
G.R. No. 76351 October 29, 1993
BELLOSILLO, J.:

FACTS:

Petitioner Virgilio and respondent Senen are brothers. On 28 October 1969, the two
brothers purchased a house and lot in Parañaque where their father could spend and
enjoy his remaining years in a peaceful neighborhood. By virtue of a written
memorandum, Virgilio and Senen agreed that their interests in the house and lot should
be equal, with Senen assuming the remaining mortgage obligation of the original
owners with the Social Security System (SSS) in exchange for his possession and
enjoyment of the house together with their father. Since Virgilio was then disqualified
from obtaining a loan from SSS, the brothers agreed that the deed of sale would be
executed and the title registered in the meantime in the name of Senen.

After Maximiano Aguilar died in 1974, petitioner demanded from private respondent that
the latter vacate the house and that the property be sold and proceeds thereof divided
among them. Because of the refusal of respondent to give in to petitioner's demands,
the latter filed on 12 January 1979 an action to compel the sale of the house and lot so
that they could divide the proceeds between them.

ISSUE:

Can a co-owner compel the other co-owner to sell the house and divide the proceeds
between them?

HELD:

Yes. Article 494 of the Civil Code provides that no co-owner shall be obliged to remain
in the co-ownership, and that each co-owner may demand at any time partition of the
thing owned in common insofar as his share is concerned. Corollary to this rule, Art. 498
of the Code states that whenever the thing is essentially, indivisible and the co-owners
cannot agree that it be, allotted to one of them who shall indemnify the others, it shall be
sold and its proceeds accordingly distributed. This is resorted to

(a) when the right to partition the property is invoked by any of the co-owners but
because of the nature of the property it cannot be subdivided or its subdivision
would prejudice the interests of the co-owners, and
(b) the co-owners are not in agreement as to who among them shall be allotted
or assigned the entire property upon proper reimbursement of the co-owners. In
one case, this Court upheld the order of the trial court directing the holding of a
public sale of the properties owned in common pursuant to Art. 498 of the Civil
Code.

However, being a co-owner respondent has the right to use the house and lot without
paying any compensation to petitioner, as he may use the property owned in common
long as it is in accordance with the purpose for which it is intended and in a manner not
injurious to the interest of the other co-owners. Each co-owner of property held pro
indiviso exercises his rights over the whole property and may use and enjoy the same
with no other limitation than that he shall not injure the interests of his co-owners, the
reason being that until a division is made, the respective share of each cannot be
determined and every co-owner exercises, together with his co-participants joint
ownership over the pro indiviso property, in addition to his use and enjoyment of the
same.

Since petitioner has decided to enforce his right in court to end the co-ownership of the
house and lot and respondent has not refuted the allegation that he has been
preventing the sale of the property by his continued occupancy of the premises, justice
and equity demand that respondent and his family vacate the property so that the sale
can be effected immediately. In fairness to petitioner, respondent should pay a rental of
P1,200.00 per month, with legal interest; from the time the trial court ordered him to
vacate, for the use and enjoyment of the other half of the property appertaining to
petitioner.

When petitioner filed an action to compel the sale of the property and the trial court
granted the petition and ordered the ejectment of respondent, the co-ownership was
deemed terminated and the right to enjoy the possession jointly also ceased.
Thereafter, the continued stay of respondent and his family in the house prejudiced the
interest of petitioner as the property should have been sold and the proceeds divided
equally between them. To this extent and from then on, respondent should be held
liable for monthly rentals until he and his family vacate.
Digested by: Gretchen B. Cañedo

MARINA Z. REYES, AUGUSTO M. ZABALLERO and SOCORRO Z.


FRANCISCO, petitioners,
- versus -
THE HONORABLE ALFREDO B. CONCEPCION, Presiding Judge, CFI of Cavite,
Tagaytay, Br. IV, SOCORRO MARQUEZ VDA. DE ZABALLERO, EUGENIA Z. LUNA,
LEONARDO M. ZABALLERO, and ELENA FRONDA ZABALLERO, respondents.
Law Firm of Raymundo A. Armovit for petitioners.
Leonardo M. Zaballero for private respondents.
G.R. No. 56550 October 1, 1990
DECISION
CORTÉS, J.:

FACTS:

On March 13, 1980, petitioners filed with the CFI a complaint for injunction and
damages, seeking to enjoin private respondents Socorro Marquez Vda. De Zaballero,
Eugenia Z. Luna and Leonardo M. Zaballero from selling to a third party their pro-
indiviso shares as co-owners in eight parcels of registered land, with an aggregate area
of about 96 hectares. Petitioner claimed that under Article 1620 of the new Civil Code,
they, as co-owners, had a preferential right to purchase these shares from private
respondents for a reasonable price.

Respondent trial judge then issued an order dated which directed the parties to signify
whether or not they agree to the scheme of allotting the subject properties to one of the
co-owners, at the rate of P12.50 per square meter, or whether or not they know of a
third party who is able and willing to buy the subject properties at terms and conditions
more favorable than that offered by VOLCANO LAKEVIEW RESORTS, INC. However,
petitioners insisted on their pre-emptive right to purchase the shares of private
respondents in the co-ownership at a "reasonable price", which is less than the P12.50
per square meter.

The RTC ruled that petitioners did not possess a pre-emptive right to purchase private
respondents' shares in the co-ownership. Thus, finding that the subject properties were
essentially indivisible, respondent trial judge ordered the holding of a public sale of the
subject properties pursuant to Article 498 of the New Civil Code.

ISSUE:

Is the sale of an indivisible property valid pursuant to Article 498 of the Civil Code?

HELD:

Yes. Under Art. 498: Whenever the thing is essentially indivisible and the co-owners
cannot agree that it be allotted to one of them who shall indemnify the others, it shall be
sold and its proceeds distributed. In other words, the sale of the property held in
common re is resorted to when.

(1) the right to partition the property among the co-owners is invoked by any of them but
because of the nature of the property, it cannot be subdivided or its subdivision would
prejudice the interests of the co-owners.

(2) the co-owners are not in agreement as to who among them shall be allotted or
assigned the entire property upon reimbursement of the shares of the other co-owners.

In the present case, petitioners adopted the position that the subject properties were
incapable of physical partition and stubbornly insisted on exercising an alleged pre-
emptive right to purchase private respondents' shares at a "reasonable price". However,
private respondents relented and adopted petitioner's position that the partition of the
subject properties was not economically feasible, and, consequently, invoked the
provisions of Article 498 of the New Civil Code.

And since the parties could not agree on who among them would be allotted the subject
properties, the Court finds that respondent trial judge committed no grave abuse of
discretion in ordering the holding of a public sale for the subject properties (with the
opening bid pegged at P12.50 per square meter), and the distribution of the proceeds
thereof amongst the co-owners, as provided under Article 498 of the New Civil Code.
Digested by: Cesar John Dela Serna

REPUBLIC OF THE PHILIPPINES,vs.AMANDA LAT VDA. DE CASTILLO

GR L-69002

PARAS, J.:

Facts:

In 1951, the late Modesto Castillo applied for the registration of two parcels of
land, Lots 1 and 2, located in Banadero, Tanauan, Batangas, as the true and absolute
owner of the land with the improvements thereon, which was issued to him by the
Register of Deeds of Batangas. He was married to Amanda Lat. By virtue of an
instrument dated in March 1960, the two parcels of land with Original Certificate of Title
(OCT) were consolidated and divided into Lots 1 to 9 which was covered by Transfer
Certificate of Title (TCT). After the death of Modesto Castillo on August 31, 1960,
Amanda Lat Vda. de Castillo, et al., executed a deed of partition and assumption of
mortgage in favor of Florencio L. Castillo, et al., as a result of which Original Certificate
of Title was cancelled, and in lieu thereof, new transfer certificates of title (TCT) were
issued to the following appellants-defendants. The Republic of the Philippines filed Civil
Case No. 2044 with the lower court for the annulment of the certificates of title issued to
defendants Amanda Lat Vda. de Castillo, et al., as heirs/successors of Modesto
Castillo, and for the reversion of the lands covered thereby (Lots 1 and 2, Psu-119166)
to the State. It was alleged that said lands had always formed part of the Taal Lake and
being of public ownership, it could not be the subject of registration as private property.
They alleged in their answer that the Government's action was already barred by the
decision of the registration court; that the action has prescribed; and that the
government was estopped from questioning the ownership and possession of
appellants. The then Court of First Instance of Batangas, Branch VI, decided that the
Register of Deeds of Batangas to order the cancellation of the OCT in the name of
Modesto Castillo and the subsequent TCT issued over the property in the names of the
defendants. Lots Nos. 1 and 2 of Plan Psu-19166 are hereby declared public lands
belonging to the state.

Issue:

Can shore lands be owned privately?


Held:

it has long been settled that portions of the foreshore or of the territorial waters
and beaches cannot beregistered. Their inclusion in a certificate of title does not convert
the same into properties of privateownership or confer title upon the registrant (Republic
v. Ayala y Cia, 14 SCRA, 259 [1965], citing the casesof Dizon, et al. v. Bayona, et al.,
98 Phil. 943; and Dizon, et al. v. Rodriguez, et al., 13 SCRA 704).
ROSITA C. TALEON v. SECRETARY OF PUBLIC WORKS

GR No. L-24281, May 16, 1967

BENGZON, J.P., J.:

Facts:

Petitioner-appellant Rosita Taleon is the registered owner of a parcel of land in Lupon,


Davao, which she acquired from her co-petitioner-appellant Miguel Solis who had
constructed therein man-made canals and fishpond dikes.

On April 17, 1961, respondent-appellee Lucia Tolentino wrote a letter-complaint to the


Secretary of Public Works stating that several fishpond operators and/or own-ers in
Lupon, Davao have built dams across and closed the Cabatan River, a public navigable
stream, thereby depriving her and the residents therein of passageway, fishing ground
and water supply. This letter-complaint was for-mally amended on June 9, 1961,
wherein Tolentino specified appellants Taleon and Solis, and another neighbor, one
Humberto de los Santos, as those responsible for the clos-ing of the alleged Cabatan
River, on the banks of which their lands abutted. On June 13, 1961, Taleon filed her
answer denying the existence of the alleged river and claiming that the dams were
constructed inside her registered property and that her water source was a man-made
canal connected to the sea.

An administrative hearing was thereafter held. On July 11, 1961, the Secretary of
Public Works, through the department undersecretary, rendered a decision finding that
appellants were indeed obstructing the Cabatan River, a public navigable stream which
used to pass inside their lands, with the dams they constructed thereon, and ordering
their demolition. Appellants filed a motion to reconsider claiming that the ruling was
contrary to the facts established and that the Secretary had no jurisdiction over the
case. This was denied.

Appellants elevated the case to the Office of the President on October 11, 1961. After
reviewing the records, said office affirmed on November 10, 1961 the decision of July
11, 1961. Appellants filed a motion to re-consider based on an alleged decision of
Public Works Secretary Moreno rendered on November 24, 1961, reversing the former
ruling of July 11, 1961. On January 10, 1962, the Office of the President denied the
motion, on two grounds: (1) An official examination of the records of the case showed
that said decision of Secretary Moreno did not form part thereof, and (2) even if it were
genuine, it had no legal effect since the Secretary had already lost jurisdiction when
appellants filed their appeal to the President.

On February 9, 1962, Taleon was informed by the Dis-trict Engineer of Davao that her
dams would be demolished on February 16, 1962, upon orders of the Executive
Secretary, the administrative decision having become final and executory. To stop the
threatened demolition, appellants filed suit in the Court of First Instance of Davao
against the Public Works Secretary and the Engineer of Davao. They were able to
obtain a writ of preliminary injunction on February 15, 1962.

Issue:

Can a private person construct a dam in a public navigable stream within his
private property?

Held:

We upheld the power of the Public Works Secretary under Republic Act 2056 to declare
as a public navigable stream any alleged depressions or bodies of water even inside
titled properties. That case involved a creek, located inside a titled land, which was
alleged to be privately owned. The Public Works Secretary declared it as part of a
public stream which plaintiffs therein had blocked with their dams. In sustaining the
Secretary, We there ruled that such fact-finding power on his part was merely incidental
to his duty to clear all navigable streams of unauthorized obstructions and, hence, its
grant did not constitute an unlawful delegation of judicial power. We remarked there
that although the title was silent as to the existence of any stream inside the property,
that did not confer a right to the stream, it being of a public nature and not subject to
private appropriation, even by prescription.
REPUBLIC OF THE PHILIPPINES VS CANDY MAKER, INC

G.R. No. 163766

CALLEJO, SR., J.:

Facts:

On April, 29, 1999, Antonia, Eladia, and Felisa, all surnamed Cruz, executed a
Deed of Absolute Sale in favor of Candy Maker, Inc. for a parcel of land located below
the reglementary lake elevation of 12.50m, about 900 meters away the Laguna de
Bay.Candy Maker, Inc. as applicant, filed an application with the MTC of Taytay, Rizal
for registration of its alleged title over the lot. The CENRO of Antipolo City declared the
land to fall within the alienable and disposable zone. On the other hand, the Land
Registration Authority recommended the exclusion of lot no. 3138-B on the ground that
it is a legal easement and intended for public use, hence, inalienable and indisposable.
On July 2001, the Republic of the Philippines, the LLDA filed its opposition which
alleged that the lot subject of the application for registration may not be alienated and
disposed since it is considered part of the Laguna Lake Bed, a public land within, its
jurisdiction.

Issue:

Whether the property subject of the amended application is alienable and


disposable property of the State, and if so, whether respondent adduced the requisite
quantum of evidence to prove its ownership over the property?

Held:

The property subject of this application was alienable and disposable public
agricultural land. However, respondent failed to prove that it possesses registrable title
over the property. The statute of limitations with regard to public agricultural lands does
not operate against the statute unless the occupant proves possession and occupation
of the same after a claim of ownership for the required number of years to constitute a
grant from the State. A mere casual cultivation of portions of the land by the claimant
does not constitute sufficient basis for a claim of ownership, such possession is not
exclusive and notorious as to give rise to presumptive grant from the state. In light of the
foregoing, the petition of the Republic of the Philippines is granted.
FILINVEST LAND, INC. vs. FLOOD-AFFECTED HOMEOWNERS OF
MERITVILLE ALLIANCE

G.R. No. 165955

SANDOVAL-GUTIERREZ,J.:

Facts:

Filinvest Land, Inc., petitioner, is a domestic corporation engaged in


realtydevelopment business. Among its real estate development ventures is Meritville
Townhouse Subdivision. The project site is located near the heavily-silted
NagaRiver.Respondents, who purchased their housing units from petitioner, are fifty-
four(54) of the residents of Meritville. Subsequently, the area around Meritville
wasdeveloped. New subdivisions were built with elevations higher than that of Meritville.
This development turned Meritville into a catch basin from rains duringthe wet season
and from water coming from the Naga River every time it overflows.Due to perennial
flood, respondents’ townhouses suffered severe damages.Petitioner then installed in
the area a pumping station with a capacity of 6,000 gallons per minute. It also improved
the drainage system. But thesemeasures were not enough. Thus, the National Home
Mortgage FinanceCorporation declared the affected townhouses “unacceptable
collaterals.”Respondents filed a complaint with the HLURB. They prayed that
petitionerbe ordered to upgrade the elevation of the affected areas and repair the units
fromBlock 17 to 25. In the alternative, they asked petitioner to transfer them to its
otherflood-free housing projects, allowing them to “sell-back” their affected units.
Thearbiter issued a decision enjoining the respondent from collecting
amortizationpayments from the complainants until such time as the flooding problem
isrectified. The arbiter granted the prayer of the complainant. On appeal, the
HLURBBoard of Commissioners affirmed. The Office of the President “adopted by
reference” the appealed judgment. The CAaffirmed.

Issue:

WON the MMDA should shoulder the problem

Held:
No

Ratio: In MMDA v. Bel-Air Village Association, Inc., this Court, speaking throughthen
Associate Justice (now Chief Justice) Reynato S. Puno, defined “metro-wideservices”
as those “services which have metro-wide impact and transcend localpolitical
boundaries or entail huge expenditures such that it would not be viable forsaid services
to be provided by the individual local government units comprisingMetro Manila.” These
basic “metro-wide services” include: (1) developmentplanning; (2) transport and traffic
management; (3) solid waste disposal andmanagement; (4) flood control and sewerage
management; (5) urban renewal,zoning and land use planning, and shelter services; (6)
health and sanitation, urbanprotection, and pollution control; and (7) public safety. The
“powers of the MMDAare limited to the following acts: formulation, coordination,
regulation,implementation, preparation, management, monitoring, setting of
policies,installation of a system, and administration.” The Court then holds that the
MMDAis a “development authority.” In other words, the MMDA is “an agency created
forthe purpose of laying down policies and coordinating with the various
nationalgovernment agencies, people’s organizations, non-governmental organizations,
andthe private sector for the efficient and expeditious delivery of basic services” in
theMetropolitan Manila area. In Metropolitan Manila Development Authority v.
Garin,these pronouncements were reiterated. Petitioner, therefore, cannot seek relief
from the MMDA as its services only involve laying down policies and coordinationwith
other agencies relative to its primary functions.What is pertinent to respondents’ cause
is Section 17 of the LocalGovernment Code quoted as follows:

SEC. 17. Basic Services and Facilities –(a) Local government units shall endeavor to be
self-reliant and shall continue exercising the powersand discharging the duties and
functions currently vested upon them. They shall also discharge thefunctions and
responsibilities of national agencies and offices devolved to them pursuant to this
Code.Local government units shall likewise exercise such other powers and discharge
such other functionsand responsibilities as are necessary, appropriate, or incidental to
efficient and effective provision of the basic services and facilities enumerated herein.(b)
Such basic services and facilities include, but are not limited to the following:For a
Municipality:x x x(viii) Infrastructure facilities intended primarily to service the needs of
the residents of the municipalityand which are funded out of the municipal funds
including but not limited to municipal roads andbridges; school buildings and other
facilities for public elementary and secondary schools; clinics,health centers and other
health facilities necessary to carry out health services; communal irrigation,small water
impounding projects and other similar projects, fish ports; artesian wells,
springdevelopment, rainwater collectors and water supply systems; seawalls, dikes,
drainage and sewerage;and flood control, traffic signals and road signs, and similar
facilities.x x x4) For A City:All the services and facilities of the municipality and province
xxx

From the above provisions, it is the city government of Las Piñas City whichhas the duty
to control the flood in Meritville Townhouse Subdivision.
ERNANDO v. ACUNA

G.R. No. 161030, 14 September 2011Leonardo-De Castro,

.:

FACTS

At the heart of this controversy is a parcel of land registered in the names of Jose A.
Fernando,married to Lucila Tinio, and Antonia A. Fernando, married to Felipe Galvez,
and located in SanJose, Baliuag, Bulacan. When they died intestate, the property
remained undivided. Petitionersherein are the heirs and successors-in-interest of the
deceased registered owners. However,petitioners failed to agree on the division of the
subject property amongst themselves, evenafter compulsory conciliation before the
Barangay Lupon.Thus, petitioners, except for the heirs of Germogena Fernando, filed a
Complaint for partitionon April 17, 1997 against the heirs of Germogena Fernando. In
the Complaint, plaintiffs alleged,among others, that they and defendants are common
descendants and compulsory heirs of thelate spouses Jose A. Fernando and Lucila
Tinio, and the late spouses Antonia A. Fernando andFelipe Galvez. They further
claimed that their predecessors-in-interest died intestate andwithout instructions as to
the disposition of the property left by them. There being nosettlement, the heirs are
asking for their rightful and lawful share because they wish to build uptheir homes or set
up their business in the respective portions that will be allotted to them. Insum, they
prayed that the subject property be partitioned into eight equal parts, correspondingto
the hereditary interest of each group of heirs.However, respondent Leon Acuna
intervened in the action averring that in the Decision datedNovember 29, 1929 of the
Cadastral Court of Baliuag, Bulacan, the portion of the propertyidentified as Lot 1303
was already adjudicated to several other persons who are

the petitioners’

predecessor-in-interest. He likewise claimed that in a 1930 Decision of the Cadastral


Court, theportion identified as Lot 1302 was also already adjudicated to other people as
well.

ISSUE

Whether or not a title registered under the Torrens system, as the subject original
certificate of title is the best evidence of ownership of land and is a notice against the
world.
HELD:

No.As the records show, in the November 29, 1929 Decision of the Cadastral
Court of Baliuag,Bulacan had already been divided and adjudicated to spouses Jose A.
Fernando and Lucila Tinio; spouses Antonia A. Fernando and Felipe Galvez; spouses
Antonio A. Fernando and FelisaCamacho; spouses Jose Martinez and Gregoria Sison;
and spouses Ignacio de la Cruz and SaludWisco from whom respondent Acuna derived
his title.In the decision, it would appear that petitioners’ ascendants themselves
petitioned for the cadastral court to divide Lot 1303 among the parties to the 1929 case
and they were notallocated all the lots. Still, as the trial court noted, the November 29,
1929 Decision was neverfully implemented in the sense that the persons named therein
merely proceeded to occupythe lots assigned to them without having complied with the
other directives of the cadastralcourt which would have led to the titling of the properties
in their names. Nonetheless, it isundisputed that the persons named in the said
November 29, 1929 Decision and, subsequently,their heirs and assigns have since
been in peaceful and uncontested possession of theirrespective lots for more than
seventy (70) years until the filing of the suit for partition on April17, 1997 by petitioners
which is the subject matter of this case.Section 47 of Presidential Decree No. 1529,
otherwise known as the Property Registration Decree, states that “[n]o title to registered
land in derogation of the title of the registeredowner shall be acquired by prescription or
adverse possession.” Thus, the Court has held that the right to recover possession of
registered land is imprescriptible because possession is amere consequence of
ownership.However, the Court had recognized the jurisprudential thread regarding the
exception to theforegoing doctrine that while it is true that a Torrens title is indefeasible
and imprescriptible,the registered landowner may lose his right to recover possession of
his registered property byreason of laches.Thus, while a person may not acquire title to
the registered property through continuousadverse possession, in derogation of the title
of the original registered owner, the heir of thelatter, however, may lose his right to
recover back the possession of such property and the titlethereto, by reason of laches.

In view of respondents’ decades long possession and/or ownership of their


respective lots by

virtue of a court judgment and the erstwhile regis

tered owners’ inaction and neglect for an

unreasonable and unexplained length of time in pursuing the recovery of the land,
assuming they retained any right to recover the same, it is clear that respondents’
possession may no longer be disturbed. The right of the registered owners as well as
their successors-in-interest torecover possession of the property is already a stale
demand and, thus, is barred by laches.
HONORIO BULAO vs. COURT OF APPEALS, RTC JUDGE FRANCISCO VILLARTA
and SANTIAGO BELLEZA

G.R. No. 101983

CRUZ, J.:

Facts:

On April 25, 1983. respondent Santiago Belleza filed before the Municipal Circuit
Trial Court of Tayum, Peñarrubia, Abra,a complaint against petitioner Honorio Bulao. It
was docketed as "Civil Case No. 70-Damages." The petitioner moved to dismiss the
same on the ground of lack of jurisdiction. He argued that the said case was cognizable
by the Regional Trial Court, the real issue being one of ownership, possession of the
land where the ditches are located, and real rights involving the use of ditches. The
court denied the motion and required him to answer the complaint.

The Petitioner failed to do so and was declared in default. He then moved for
reconsideration and the lifting of the order of default. This time he claimed that it was
the National Water Resources Council that had jurisdiction over the case because it
involved rights on the utilization of water. The motion was also denied, and the court
proceeded to receive the evidence of the private respondent.

On October 4, 1984, the court handed down a judgment by default ordering the
petitioner to pay the following amounts in favor of the private respondent, plus the costs.

Issue:

Can the petitioner use the water of Anibungan Albay and Tajong Creeks to
irrigate their ricelands upstrean. They also wanted to enjoin the private respondent from
using the water of the creeks at night to irrigate his riceland located downstream?

Held:
t was held in both cases that jurisdiction pertained to the National Water
Resources Council as the issues involved were the appropriation, utilization and control
of water.

But these cases have no application to the instant controversy. It is clear from a reading
of the private respondent's complaint in Civil Case 70 that it is an action for damages
predicated on a quasi-delict.

A quasi-delict has the following elements: a) the damage suffered by the plaintiff; b) the
act or omission of the defendant supposedly constituting fault or negligence; and c) the
causal connection between the act and the damage sustained by the plaintiff.8

All these elements are set out in the private respondent's complaint, specifically in
paragraphs 5, 7 and 8 thereof. The damage claimed to have been sustained by private
respondents consists of his loss of harvest and consequent loss of income. The act
constituting the fault is the alleged malicious construction of a dam and diversion of the
flow of water by the petitioner. The said acts allegedly caused the interruption of water
passing through petitioner's land towards respondent's lands, resulting in the
destruction of the respondent's rice plants. The averments of the complaint plainly make
out a case of quasi-delict that may be the basis of an action for damages.

The Court also notes that the title of the complaint is "Civil Case

No. 70 — Damages." Although not necessarily determinative of the nature of the action,
it would nevertheless indicate that what the private respondent contemplated was an
action for damages.

It is pointed out, however, that paragraph (a) of the prayer for relief seems to convey the
impression that the private respondent is asking for the right to use the irrigation water
and for the recognition by the petitioner of an easement on his land.
Digested by: Xicilli Krishna P. Dosdos

EQUATORIAL REALTY DEVELOPMENT , INC., vs. MAYFAIR THEATRER, INC.


G.R. No. 133879, November 21, 2001
PANGANIBAN, J.

Facts:

Carmelo & Bauermann, Inc. (Carmelo) used to own a parcel of land, together with two 2-
storey buildings constructed thereon, located at Claro M. Recto Avenue, Manila, and covered by
TCT No. 18529 issued in its name by the Register of Deeds of Manila.
On June 1, 1967, Carmelo entered into a Contract of Lease with Mayfair Theater Inc.
(Mayfair) for a period of 20 years. The lease covered a portion of the second floor and
mezzanine of a two-storey building with about 1,610 square meters of floor area, which
respondent used as a movie house known as Maxim Theater.
Two years later, on March 31, 1969, Mayfair entered into a second Contract of Lease with
Carmelo for the lease of another portion of the latters property -- namely, a part of the second
floor of the two-storey building, with a floor area of about 1,064 square meters; and two store
spaces on the ground floor and the mezzanine, with a combined floor area of about 300 square
meters. In that space, Mayfair put up another movie house known as Miramar Theater. The
Contract of Lease was likewise for a period of 20 years.
Both leases contained a provision granting Mayfair a right of first refusal to purchase the
subject properties. However, on July 30, 1978 - within the 20-year-lease term -- the subject
properties were sold by Carmelo to Equatorial Realty Development, Inc. (Equatorial) for the total
sum of P11,300,000, without their first being offered to Mayfair.
As a result of the sale of the subject properties to Equatorial, Mayfair filed a Complaint
before the Regional Trial Court of Manila (Branch 7) for (a) the annulment of the Deed of
Absolute Sale between Carmelo and Equatorial, (b) specific performance, and (c) damages.
After trial on the merits, the lower court rendered a Decision in favor of Carmelo and Equatorial.
This case, entitled Mayfair Theater, Inc. v. Carmelo and Bauermann, Inc., et al., was docketed
as Civil Case No. 118019.
On appeal (docketed as CA-GR CV No. 32918), the Court of Appeals (CA) completely
reversed and set aside the judgment of the lower court.
The controversy reached the Supreme Court via GR No. 106063. In this mother case, it
denied the Petition for Review .The foregoing decision became final and executory on March
17, 1997. On April 25, 1997, Mayfair filed a Motion for Execution, which the trial court granted.

However, Carmelo could no longer be located. Thus, following the order of execution of the
trial court, Mayfair deposited with the clerk of court a quo its payment to Carmelo in the sum of
P11,300,000 less P847,000 as withholding tax. The lower court issued a Deed of
Reconveyance in favor of Carmelo and a Deed of Sale in favor of Mayfair. On the basis of these
documents, the Registry of Deeds of Manila cancelled Equatorials titles and issued new
Certificates of Titlein the name of Mayfair.
Ruling on Equatorials Petition for Certiorari and Prohibition contesting the foregoing manner
of execution, the CA in its Resolution of November 20, 1998, explained that Mayfair had no right
to deduct the P847,000 as withholding tax. Since Carmelo could no longer be located, the
appellate court ordered Mayfair to deposit the said sum with the Office of the Clerk of Court,
Manila, to complete the full amount of P11,300,000 to be turned over to Equatorial.
Equatorial questioned the legality of the above CA ruling before this Court in GR No.
136221 entitled Equatorial Realty Development, Inc. v. Mayfair Theater, Inc. In a Decision
promulgated on May 12, 2000,this Court directed the trial court to follow strictly the Decision in
GR No. 106063, the mother case. It explained its ruling in these words:

We agree that Carmelo and Bauermann is obliged to return the entire amount of eleven million
three hundred thousand pesos (P11,300,000.00) to Equatorial. On the other hand, Mayfair may
not deduct from the purchase price the amount of eight hundred forty-seven thousand pesos
(P847,000.00) as withholding tax. The duty to withhold taxes due, if any, is imposed on the
seller, Carmelo and Bauermann, Inc.

Meanwhile, on September 18, 1997 -- barely five months after Mayfair had submitted its
Motion for Execution before the RTC of Manila, Branch 7 -- Equatorial filed with the Regional
Trial Court of Manila, Branch 8, an action for the collection of a sum of money against Mayfair,
claiming payment of rentals or reasonable compensation for the defendants use of the subject
premises after its lease contracts had expired. This action was the progenitor of the present
case.
In its Complaint, Equatorial alleged among other things that the Lease Contract covering
the premises occupied by Maxim Theater expired on May 31, 1987, while the Lease Contract
covering the premises occupied by Miramar Theater lapsed on March 31, 1989.Representing
itself as the owner of the subject premises by reason of the Contract of Sale on July 30, 1978, it
claimed rentals arising from Mayfairs occupation thereof.

Issue:

Whether Equatorial acquired ownership over the disputed property.


Or

Whether there was a right of ownership transferred from Carmelo to Equatorial.

Held:

No right of ownership was transferred from Carmelo to Equatorial in view of a patent failure to
deliver the property to the buyer.

Rent is a civil fruit that belongs to the owner of the property producing itby right of
accession.Consequently and ordinarily, the rentals that fell due from the time of the perfection of
the sale to petitioner until its rescission by final judgment should belong to the owner of the
property during that period.
By a contract of sale, one of the contracting parties obligates himself to transfer ownership
of and to deliver a determinate thing and the other to pay therefor a price certain in money or its
equivalent.
Ownership of the thing sold is a real right,which thebuyer acquires only upon delivery of the
thing to him in any of the ways specified in articles 1497 to 1501, or in any other manner
signifying an agreement that the possession is transferred from the vendor to the vendee.This
right is transferred, not by contract alone, but by tradition or deliveryon nudis pactis sed
traditione dominia rerum transferantur. And there is said to be delivery if and when the thing
sold is placed in the control and possession of the vendee.Thus, it has been held that while the
execution of a public instrument of sale is recognized by law as equivalent to the delivery of the
thing sold,such constructive or symbolic delivery, being merely presumptive, is deemed negated
by the failure of the vendee to take actual possession of the land sold.
The fact that Mayfair paid rentals to Equatorial during the litigation should not be interpreted
to mean either actual delivery or ipso facto recognition of Equatorials title.
The CA Records of the mother caseshow that Equatorial - as alleged buyer of the disputed
properties and as alleged successor-in-interest of Carmelos rights as lessor - submitted two
ejectment suits against Mayfair. Filed in the Metropolitan Trial Court of Manila, the first was
docketed as Civil Case No. 121570 on July 9, 1987; and the second, as Civil Case No. 131944
on May 28, 1990. Mayfair eventually won them both. However, to be able to maintain physical
possession of the premises while awaiting the outcome of the mother case, it had no choice but
to pay the rentals.
The rental payments made by Mayfair should not be construed as a recognition of
Equatorial as the new owner. They were made merely to avoid imminent eviction. It is in this
context that one should understand the aforequoted factual statements in the ponencia in the
mother case, as well as the Separate Opinion of Mr. Justice Padilla and the Separate
Concurring Opinion of the herein ponente.
At bottom, it may be conceded that, theoretically, a rescissible contract is valid until
rescinded. However, this general principle is not decisive to the issue of whether Equatorial ever
acquired the right to collect rentals. What is decisive is the civil law rule that ownership is
acquired, not by mere agreement, but by tradition or delivery. Under the factual environment of
this controversy as found by this Court in the mother case, Equatorial was never put in actual
and effective control or possession of the property because of Mayfairs timely objection.
As pointed out by Justice Holmes, general propositions do not decide specific cases.
Rather, laws are interpreted in the context of the peculiar factual situation of each case. Each
case has its own flesh and blood and cannot be decided on the basis of isolated clinical
classroom principles.
In short, the sale to Equatorial may have been valid from inception, but it was judicially
rescinded before it could be consummated. Petitioner never acquired ownership, not because
the sale was void, as erroneously claimed by the trial court, but because the sale was not
consummated by a legally effective delivery of the property sold.
Digested by:Xicilli Krishna P. Dosdos

JOSE DE LUNAvs.THE COURT OF APPEALS, HON. SANTIAGO G. MALIWANAG, RTC


EXECUTIVE JUDGE, BRANCH 71, IBA, ZAMBALES; JUAN DIMAANO, JR. and GERINO
DOBLE,

G.R. No. 94490, August 6, 1992

NOCON, J.

Facts:

Petitioner alleged that he is the owner of an unregistered parcel of land with an area of 30,856
square meters, located in Babon San Juan, Botolan, Zambales, since 1938; that on December
18 and 19, 1971, defendants Octavio Daclison, Oscar Crispin, and private respondents Juan
Dimaano, Jr. and Gerino Doble entered the land and began plowing it; and that said defendants
fenced the land with barbed wire on January 15 and 16, 1972 and began planting sugar cane on
February 5 and 6, 1972, despite his objections. Petitioners prayed that the defendants be
ordered to vacate the land and pay him the amount of P45.00 monthly per hectare until
possession thereof would be transferred to him, with litigation expenses and costs.

In their answer, the defendants denied the material allegations of the complaint. Daclison,
Crispin and Doble alleged as a special and affirmative defense that they have not entered nor
occupied the disputed property.

For his part, defendant Dimaano, Jr. raised as his special and affirmative defense that petitioner
was not the owner of the property, alleging instead that the owner thereof was Agustin Dequiña,
Jr., Dimaano, Jr. contended that the property was originally owned by Agustin Dequiña, Sr., who
had declared the property in his name for taxation purposes in 1906. Upon the death of Agustin
Dequiña, Sr. in 1945, he was succeeded by his son Agustin Dequiña, Jr., who possessed the
property from 1945 up to February 1972, when the same was leased to defendant Dimaano, Jr.,
Agustin Dequiña, Sr. happens to be the uncle of petitioner, the former being the elder brother of
the latter's mother, Apolonia Dequiña.

After trial on the merits, judgment was rendered in favor of petitioner, with the trial court ordering
the defendants or persons acting for and in their behalf to restore to petitioner possession of the
property. In addition, respondent Dimaano, Jr. was ordered to pay petitioner the amounts of
P12,312.00 representing actual damages and P5,000.00 as costs of the suit.

The defendants appealed to the Regional Trial Court of Iba, Zambales, which reversed the
decision of the inferior court and dismissed the complaint. Petitioner brought the case on a
petition for review to the Court of Appeals, which affirmed the judgment of the Regional Trial
Court.

Aggrieved, petitioner, elevated the case to the Supreme Court, alleging that the Court of
Appeals and the Regional Trial Court erred in determining the ownership of the disputed
property in an action for ejectment, and in concluding that Agustin Dequiña, Jr. is the owner of
the property.

Issue:

Whether the findings of both the CA and RTC declaring Agustin Dequina, Jr. as the owner
of the disputed property is correct.

Held:

The Court ruled in negative.

In the case at bar, the inferior court acted correctly in receiving evidence regarding the
ownership of the disputed property, inasmuch as respondent Dimaano, Jr. claimed to possess
the property by virtue of a lease agreement with the alleged owner thereof, Agustin Dequiña, Jr.

Be that as it may, the respondent Court erred in upholding the Regional Trial Court regarding
the conclusion that the subject property is owned by Agustin Dequiña, Jr. and therefore
respondent Dimaano, Jr. is entitled to possess the same.

First of all, petitioner has shown that he had prior possession of the property. The prior
possession of petitioner was established by the testimony of his witnesses, notably of his tenant
Epigenio Dilag and Victor dela Cruz. While petitioner admitted that he declared the property for
taxation purposes only in 1957, he had possessed the property beginning 1953 at the very
latest, when he leased the same to Epigenio Dilag, who in turn possessed the same until
respondent Dimaano, Jr. entered upon the property in 1972. The possession of the property by
Dilag since 1953 redounds to the benefit of petitioner, since possession may be exercised in
one's own name or in that of another.

Moreover, there is evidence to the effect that petitioner possessed the property even earlier
than 1953. Petitioner's witness, Victor dela Cruz, who lived about 400 meters from the land in
controversy, testified that he had witnessed the delivery of the of property to the petitioner and
his mother Apolonia Dequiña by Agustin Dequiña, Sr. in 1938, when they and their brothers and
sisters petitioned among themselves the properties of their deceased parents. He further
testified that he saw petitioner and his mother cultivate the land from 1938 to 1941, and that he
leased the land from them from 1944 to 1952.

On the other hand, respondent Dimaano, Jr. had failed to prove that Agustin Dequiña, Jr.
possessed the property prior to his possession, much less the ownership of the latter over said
property. While Agustin Dequiña, Jr. testified that he is a co-owner of the disputed property,
there is nothing to support this self-serving claim; neither does his testimony support the
defense's theory that he had prior possession of the property. The mere fact that Agustin
Dequiña, Sr. had declared the subject for taxation purposes from 1908 up to 1945 did not
constitute possession thereof, nor is it proof of ownership.

Therefore, the Court of Appeals erred in ruling that Agustin Dequiña, Jr. was the owner of the
disputed property since there is no evidence whatsoever to support such a conclusion.
Digested by: Xicilli Krishna P. Dosdos

JOSE MA. T. GARCIAvs.COURT OF APPEALS, SPS. LUISITO & MA. LUISA MAGPAYO
AND PHILIPPINE BANK OF COMMUNICATIONS

G.R. No. 133140, August 10, 1999

PUNO, J.

Facts:

Atty. Pedro V. Garcia, in whose name TCT No. S-31269 covering a parcel of land identified
as Lot 17 situated at Bel Air II Village, Makati, was registered, sold with the consent of his wife
Remedios T. Garcia, the same to their daughter Ma. Luisa Magpayo and her husband Luisito
Magpayo (the Magpayos).

On March 5, 1981, the Magpayos mortgaged the land to the Philippine Bank of
Communications (PBCom) to secure a loan, Five Hundred Sixty Four Thousand (P564,000.00)
Pesos according to them, One Million Two Hundred Thousand (P1,200,000.00) Pesos
according to PBCom.1âwphi1.nêt

On March 9, 1981, Atty. Garcia's Title was cancelled and in its stead Transfer Certificate of
Title No. S-108412/545 was issued in the name of the Magpayos.

The Deed of Real Estate Mortgage was registered at the Makati Register of Deeds and
annotated on the Magpayos title.

The Magpayos failed to pay their loan upon its maturity, hence, the mortgage was
extrajudicially foreclosed and at the public auction sale, PBCom which was the highest bidder
bought the land.

The redemption period of the foreclosed mortgage expired without the Magpayos
redeeming the same, hence, title over the land was consolidated in favor of PBCom which
cancelled the Magpayo's title and Transfer Certificate of Title No. 138233 was issued in its
name.
On October 4, 1985, the Magpayos filed at the RTC of Makati a complaint seeking the
nullification of the extrajudicial foreclosure of mortgage, public auction sale, and PBCom's title
docketed as Civil Case No. 11891. This complaint was dismissed for failure to prosecute.

On October 15, 1985, PBCom filed at the Regional Trial Court (RTC) of Makati a petition for
the issuance of a writ of possession over the land, docketed as LRC Case No. M-731, which
Branch 148 thereof granted.

Upon service of the writ of possession, Mrs. Magpayo's brother, Jose Ma. T. Garcia
(Garcia), who was in possession of the land, refused to honor it and filed a motion for
Intervention in the above-said PBCom petition, which motion was denied.

Garcia thereupon filed against PBCom, the Magpayos, and the RTC Sheriff the instant suit
for recovery of realty and damages wherein he alleged, inter alia, that he inherited the land as
one of the heirs of his mother Remedios T. Garcia, and that PBCom acquired no right thereover.

In its answer, PBCom averred, inter alia, that Garcia's claim over the land is belied by the
fact that it is not among the properties owned by his mother listed in the Inventory of Real Estate
filed at the then CFI of Pasay City, Branch 27, in SP Proc. No. 2917-P, "In the Matter of the
Intestate Estate of Remedios T. Garcia Petition for Letters of Administration, Pedro V. Garcia
Petitioner-Administrator.

The Magpayos, on the other hand, asserted that title over the land was transferred to them
by Mrs. Magpayo's parents to enable them (Magpayos) to borrow from PBCom.

Garcia filed a Motion for Summary Judgment praying that judgment be rendered in his favor
to which PBCom counter-motioned that judgment should be rendered in its favor.

The court a quo denied the motion for summary judgment on the ground that PBCom raised
in its answer both factual and legal issues which could only be ventilated in a full-blown trial.

The court a quo, however, later issued a summary judgment.In its summary judgment, the
lower court held that the mortgage executed by the Magpayo spouses in favor of PBCom was
void. It nvalidated the foreclosure sale and nullified TCT No. 138233 issued to PBCom.
Dissatisfied, PBCom appealed.

On appeal, the Court of Appeals reversed the decision of the lower court. Petitioner moved
for a reconsideration but was denied. Hence, this petition.

Issue:

Whether petitioner Spouses Garcia occupied the property in the concept of an owner at the
time of the sale to Magpayo Spouses.
Held:

No, the Spouses Garcia occupied the subject property by mere tolerance at the time of the
sale to Magpayo Spouses.

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.

Atty. Pedro Garcia and his wife Remedios exercised their right to dispose of what they
owned when they sold the subject property to the Magpayo spouses. 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.

"A possessor in the concept of an owner may be the owner himself or one who claims to be
so."On the other hand, "one who possesses as a mere holder acknowledges in another a
superior right which he believes to be ownership, whether his belief be right or wrong."

The records show that petitioner occupied the property not in the concept of an owner for
his stay was merely tolerated by his parents. We held in Caniza v. Court of Appeals that an
owner's act of allowing another to occupy his house, rent-free does not create a permanent and
indefeasible right of possession in the latter's favor.

Consequently, it is of no moment that petitioner was in possession of the property at the


time of the sale to the Magpayo spouses. It was not a hindrance to a valid transfer of ownership.
On the other hand, petitioner's subsequent claim of ownership as successor to his mother's
share in the conjugal asset is belied by the fact that the property was not included in the
inventory of the estate submitted by his father to the intestate court. This buttresses the ruling
that indeed the property was no longer considered owned by petitioner's parents.
We also uphold the Court of Appeals in holding that the mortgage to PBCom by the
Magpayo spouses is valid notwithstanding that the transfer certificate of title over the property
was issued to them after the mortgage contract was entered into. Registration does not confer
ownership, it is merely evidence of such ownership over a particular property. The deed of sale
operates as a formal or symbolic delivery of the property sold and authorizes the buyer to use
the document as proof of ownership.All said, the Magpayo spouses were already the owners
when they mortgaged the property to PBCom.
Digested by: Xicilli Krishna P. Dosdos

SERVANDO MANGAHASvs.THE HON. COURT OF APPEALS andSPOUSES SIMEON and


LEONORA CAYME

G.R. No. 95815.,March 10, 1999

PURISIMA, J.

Facts:

Since April 1955,the spouses, Severo S. Rodil and Caridad S. Rodil, occupied and
possessed the subject property,which is an agricultural land with an area of 15.0871
hectares.On February 1, 1971, they sold the said piece of land to the spouses, Pablo Simeon
and Leonora Cayme, for Seven Thousand (P7,000.00) Pesos, as evidenced by the
affidavitexecuted by the former in favor of the latter in the presence of the herein petitioner,
Servando Mangahas.During the trial below, the lower court gave credence to the evidence on
record that it was the herein petitioner himself who approached the buyer and offered to sell
subject parcel of land and he was also the one who received said consideration of P7,000.00.
On the same day, the private respondents filed with the Bureau of Lands a Free Patent
application for the same land in dispute, which application was approved on August 27, 1975 by
the Bureau of Lands under Free Patent No. 576411.Pursuant thereto, the Register of Deeds in
Mamburao, Occidental Mindoro issued the corresponding Original Certificate of Title No. P-
6924.
Records show that before the sale, the spouses Rodil had already applied for subject tract
of land with the Bureau of Lands which application was not acted upon even until the aforesaid
sale.It was also shown that petitioner, Servando Mangahas, had been in possession thereof by
virtue of the agreement between him and the spouses Rodil, allowing him (petitioner) to occupy
and cultivate the said parcel of land.For allowing him to occupy and cultivate the same,
petitioner Servando Mangahas paid the amount of P7,000.00 to the Rodils, as mentioned in the
Kasulatan ng Pagtanggap ng Salapi. Twelve (12) hectares of the property were then developed
into a fishpond, two (2) hectares planted to rice and one (1) hectare used as tumana with a
house erected thereon.
Petitioner was permitted by the private respondents to continue possessing and working on
the same land, even after the sale, upon the request of the private respondents themselves
because they were then busy in their palay business. Private respondents did not get any share
in the fruits or harvest of the land except on one occasion, when the petitioner gave them one-
half (1/2) tiklis (bigbasket) of tilapia. However, the private respondents had long before
demanded from the petitioner the return of the premises in question but the latter refused to
vacate the place. Private respondents tolerated petitioners possession until February 5, 1985,
when they commenced the present action for recovery of ownership and the possession of real
property, docketed as Civil Case No. R-528 before Branch 45 of the Regional Trial Court in San
Jose, Occidental Mindoro.
Petitioner theorized that he entered into the possession of the land under controversy,
sometime in 1969, by virtue of a prior sale he inked with the spouses Rodil on December 7,
1969, and since then, he has been in continuous occupation and possession in concepto de
dueo up to the present, enjoying the fruits thereof to the exclusion of all others, his right thereto
being evidenced by the Kasulatan ng Pagtangap ng Salapi dated December 7, 1969. Petitioner
denied having offered the same land for sale to the private respondents or ever receiving the
amount of P7,000.00, the consideration of the alleged sale of February 1, 1971.He further
averred that respondent Leonora Cayme misled the Bureau of Lands into granting her a Free
Patent for subject parcel of land on the basis of a Deed of Relinquishment of Rights, supposedly
executed by Severo Rodil, and to which document the signature of petitioner as a witness was
procured through fraud, deceit and misrepresentation.
In due time, the parties went to trial which culminated in the rendition by the court a quo of
its decision of November 14, 1986, in favor of the plaintiffs (now the private respondents).
With the denialof his Motion for Reconsideration and/or New Trial, petitioner seasonably
appealed to the Court of Appeals which came out with a judgment of affirmance on May 25,
1990.

Issue:

Whether the petitioner Servando Mangahas acquired ownership of the disputed land
through acquisitive prescription.

Held:

The Court ruled in negative.


Petitioner theorized that with the length of possession of his predecessors-in-interest, the
spouses Rodil, tacked to his own possession, the total period of possession in his favor would
suffice to vest in him the ownership of the property under the law on prescription.So also, citing
the early case of Cario vs. Insular Governmentup to and including the more recent cases of The
Director of Lands vs. Bengzon, et al. and The Director of Lands vs. Manila Electric Company, et
al.[21], petitioner stressed that by prescription, he became the owner of subject property ipso
jure, which land became a private property by operation of law, and had been withdrawn and
segregated from the alienable and disposable part of the public domain. Consequently, the
Bureau of Lands had no authority to issue the Free Patent in question, which was then null and
void;petitioner argued.
The factual milieu obtaining with respect to the petition under scrutiny has rendered
petitioners reliance on the applicability of the aforestated principles misplaced. In disposing of
the issue, the Court of Appeals opined:

xxx Even if we were to disregard the need for a proper application, Article 1138 of the Civil Code
provides,

In the computation of time necessary for prescription the following rules shall be observed:

(1) The present possessor may complete the period necessary for prescription by tacking his
possession to that of his grantor or predecessor in interest x x x.

The defendant-appellants grantor or predecessor in interest (Severo Rodil) took possession


of the property, subject matter of the litigation, on April 1955 (Exhibit F for the plaintiff-appellees
and exhibit 5 for the defendant). Since the complaint in the case at bar was filed on February
25, 1985,the requirement of at leastthirty years continuous possession has not been complied
with even if We were to tack Rodils period of possession.
As found by the lower court below, petitioner had admitted,contrary to his disclaimer, that
the possession of the spouses Rodil, from whom he traces the origin of his supposed title,
commenced only in April 1955. Petitioner can not now feign ignorance of such judicial
admission which he has resolutely repudiated in his present petition.Acquisition of ownership
under the law on prescription cannot be pleaded in support of petitioners submission that
subject land has ipso jure become his private property.
Digested by: Xicilli Krishna P. Dosdos

LUCIA EMBRADO and ORESTE TORREGIANIvs.COURT OF APPEALS, PACIFICO


CIMAFRANCA, MARCOS SALIMBAGAT, EDA JIMENEZ and SANTIAGO JIMENEZ

G.R. No. 51457, June 27, 1994

BELLOSILLO, J.

Facts:

Lot No. 564 is a 366-square meter lot situated in Dipolog City originally owned by Juan,
Pastor and Matias Carpitanos. On 2 July 1946, a Venta Definitiva, a notarized document written
entirely in Spanish, was executed by the Carpitanos whereby they sold Lot No. 564 to Srta.
Lucia C.Embrado.The document provided that even though the deed was prepared and signed
on 2 July 1946, the effects of the document would retroact to the 15th day of April 1941, the
date the lot and its improvements were actually sold to Lucia C. Embrado.

The sale was registered and Transfer Certificate of Title No. T-99was issued on 13
February 1948 in the name of Lucia Embrado alone, who was by then already married to
petitioner Oreste Torregiani since 1943. However, by virtue of a court order in Misc. Sp. Proc.
No. 2330 of the then Court of First Instance of Zamboanga del Norte, the word "single"
appearing in TCT No. T-99 was canceled and replaced on 19 October 1970 by the phrase
"married to Oreste Torregiani." The Torregianis then made their conjugal abode on the lot and in
1958 constructed a residential/commercial building thereon.

As appearing from a document entitled Absolute Deed of Sale dated 1 May 1971, Lucia
Embrado Torregiani sold Lot No. 564, described as her "own paraphernal property," to her
adopted daughter, herein private respondent Eda Jimenez, for the sum of P1,000.00. Transfer
Certificate of Title No. T-99 was canceled to give way to TCT No. T-17103 in the name of Eda
Jimenez, married to Santiago Jimenez.

On 6 March 1972, Eda Jimenez sold sixty-five (65) square meters of Lot 564 to Marcos
Salimbagat for P6,500.00, and on 1 August 1972, conveyed 301 square meters of the same lot
to Pacifico Cimafrancafor P30,000. Both sales were duly annotated on TCT No. T-17103.
On 25 September 1972, the Torregianis instituted in the Court of First Instance, now Regional
Trial Court, of Zamboanga del Norte an action for declaration of nullity of contract, annulment of
sales, reconveyance and damagesagainst the spouses Santiago and Eda Jimenez, Marcos
Salimbagat and Pacifico Cimafranca alleging that the sale of Lot 564 by Lucia Embrado to Eda
Jimenez was void not only for lack of consideration but also because Oreste Torregiani did not
consent to the sale, which consent was necessary because Lot 564 was conjugal
property.Since the Jimenez spouses did not acquire valid title to the land, the subsequent sales
in favor of Salimbagat and Cimafranca were without legal effect.

The Torregianis were sustained by the CFI of Zamboanga del Norte which held that the sale of
Lot 564 to Eda Jimenez and its subsequent transfers to Marcos Salimbagat and Pacifico
Cimafranca, who were declared buyers in bad faith, were void and of no effect.

The foregoing judgment was reversed by the Court of Appeals which held that since Lucia
Embrado actually agreed with Juan, Pastor and Matias Carpitanos, the original owners, to the
purchase of Lot 564 on 15 April 1941when she was not yet married, then the lot was her
paraphernal property since a sale is considered perfected the moment the parties agree on the
object and cause of the contract. In addition, the respondent court declared Salimbagat and
Cimafranca buyers in good faith since the contrary was not proved. Consequently, the complaint
in the trial court was ordered dismissed by respondent Court of Appeals.

Issue:

Whether the private respondents Salimbagat and Cimafranca were in good faith at the time
they purchased the subject property.

Held:

No, private respondents were not in good faith in acquiring the subject property.

Salimbagat and Cimafranca (private respondents) purchased the disputed lot from Eda and
Santiago Jimenez with knowledge of facts and circumstances which should have put them upon
such inquiry and investigation as might be necessary to acquaint them with the defects in the
title of their vendor. A purchaser cannot close his eyes to facts which should put a reasonable
man on his guard and then claim that he acted in good faith under the belief that there was no
defect in the title of the vendor. His mere refusal to believe that such defect exists, or his willful
closing of his eyes to the possibility of the existence of a defect in the vendor’s title will not make
him an innocent purchaser for value if afterwards it develops that the title is in fact defective,
and it appears that he had such notice of the defect as would have led to its discovery had he
acted with the measure of precaution which may reasonably be required of a prudent man in
like situation.

Before buying the property, Salimbagat and Cimafranca allegedly inquired from the office of
the Register of Deeds concerning the genuineness of the certificate of title of Eda Jimenez, and
from the Clerk of Court of the Court of First Instance of Dipolog City as to whether the property
was involved in any litigation. However, they failed to inquire from petitioners as to why they
were the ones in actual possession of the property.

The rule is settled that a buyer of real property which is in the possession of persons other
than the seller must be wary and should investigate the rights of those in possession.
Otherwise, without such inquiry, the buyer can hardly be regarded as a buyer in good faith.
When a man proposes to buy or deal with realty, his first duty is to read the public manuscript,
i.e., to look and see who is there upon it, and what are his rights. A want of caution and
diligence which an honest man of ordinary prudence is accustomed to exercise in making
purchases is, in contemplation of law, a want of good faith. The buyer who has failed to know or
discover that the land sold to him is in the adverse possession of another, is a buyer in bad
faith.

The fact that Lucia Embrado resides in the premises, coupled with the relatively young age
and meager financial standing of the Jimenez spouses, should have been sufficient for
Cimafranca to hesitate accepting Eda’s transfer certificate of title at its face value. Cimafranca,
after deliberately closing his eyes to such a vital information, is now claiming good faith. For
obvious reasons, we cannot accept his contention. We thus declare him, together with Marcos
Salimbagat, to be purchasers in bad faith hence not entitled to protection under the Torrens
system of registration.

Lot 564 is now registered in the name of Eda Jimenez "married to Santiago Jimenez" under
Transfer Certificate of Title No. T-17103 which was issued pursuant to the "Absolute Deed of
Sale" executed in her favor by petitioner Lucia Embrado. We have already declared said deed
of sale as null and void since its object, Lot 564, is conjugal property which was sold by Lucia
Embrado without her husband’s conformity. The present vendees, Marcos Salimbagat and
Pacifico Cimafranca, who bought the property from Eda Jimenez have failed to persuade us that
they acquired the property in good faith.
Digested by: Xicilli Krishna P. Dosdos

EDITHA ALVIOLA and PORFERIO ALVIOLAvs. HONORABLE COURT OF APPEALS,


FLORENCIA BULING VDA DETINAGAN, DEMOSTHENES TINAGAN, JESUS TINAGAN,
ZENAIDA T. JOSEP AND JOSEPHINE TINAGAN

G.R. No. 117642, April 24, 1998

MARTINEZ, J.

Facts:

On April 1, 1950, Victoria Sonjaconda Tinagan purchased from Mauro Tinagan two (2)
parcels of land situated at Barangay Bongbong, Valencia, Negros Oriental.One parcel of land
contains an area of 5,704 square meters, more or less;while the other contains 10,860 square
meters.Thereafter, Victoria and her son Agustin Tinagan, took possession of said parcels of
land.
Sometime in 1960, petitioners occupied portions thereof whereat they built a copra dryer
and put up a store wherein they engaged in the business of buying and selling copra.
On June 23, 1975, Victoria died. On October 26, 1975, Agustin died, survived by herein
private respondents, namely his wife, Florencia Buling Vda. de Tinagan and their children
Demosthenes, Jesus, Zenaida and Josephine, all surnamed Tinagan.
On December 24, 1976, petitioner Editha assisted by her husband filed a complaint for
partition and damages before the then Court of First Instance of Negros Oriental, Branch 1,
Dumaguete City, docketed as Civil Case No. 6634, claiming to be an acknowledged natural
child of deceased Agustin Tinagan and demanding the delivery of hershares in the properties
left by the deceased.
On October 4, 1979, the aforesaid case was dismissed by the trial court on the ground that
recognition of natural children may be brought only during the lifetime of the presumed parent
and petitioner Editha did not fall in any of the exceptions enumerated in Article 285 of the Civil
Code.
Petitioners assailed the order of dismissal by filing a petition for certiorari and mandamus
before this Court.On August 9, 1982, this Court dismissed the petition for lack of
merit.Petitioners filed a motion for reconsideration but the same was denied on October 19,
1982.
On March 29, 1988, private respondents filed a complaint for recovery of possession
against Editha and her husband Porferio Alviola before the Regional Trial Court of Negros
Oriental, Branch 35, Dumaguete City, docketed as Civil Case No. 9148, praying, among others,
that they be declared absolute owners of the said parcels of land, and that petitioners be
ordered to vacate the same, to remove their copra dryer and store, to pay actual damages (in
the form of rentals), moral and punitive damages, litigation expenses and attorneys fees.
In their answer, petitioners contend that they own the improvements in the disputed
properties which are still public land; that they are qualified to be beneficiaries of the
comprehensive agrarian reform program and that they are rightful possessors by occupation of
the said properties for more than twenty years.
After trial, the lower court rendered judgment in favor of the private respondents.
Petitioners appealed to the Court of Appeals. On April 8, 1994, the respondentcourt
rendered its decision,affirming the judgment of the lower court. Petitioners filed a motion for
reconsideration but the same was denied by the respondent court in an order dated October 6,
1994.
Hence, this petition.

Issue:
Whether the Spouses Alviola, the petitioner herein, were in bad faith in possessing the
disputed properties.

Held:
The Court ruled in affirmative.
As correctly ruled by the respondent court, there was bad faith on the part of the petitioners
when they constructed the copra dryer and store on the disputed portions since they were fully
aware that the parcels of land belonged to Victoria Tinagan. And, there was likewise bad faith
on the part of the private respondents, having knowledge of the arrangement between
petitioners and Victoria Tinagan relative to the construction of the copra dryer and store. Thus,
for purposes of indemnity, Article 448 of the New Civil Code should be applied.However, the
copra dryer and the store, as determined by the trial court and respondent court, are
transferable in nature. Thus, it would not fall within the coverage of Article 448. As the noted civil
law authority, Senator Arturo Tolentino, aptly explains: To fall within the provision of this Article,
the construction must be of permanent character, attached to the soil with an idea of perpetuity;
but if it is of a transitory character or is transferable, there is no accession, and the builder must
remove the construction. The proper remedy of the landowner is an action to eject the builder
from the land.
Digested by: Leo Escalante Jr.

DBP vs. CA

GR No. 111737. October 13, 1999

Facts: Respondent SPOUSES TIMOTEO and SELFIDA S. PIÑEDA were registered


owners of a parcel of land in Dumarao, Capiz containing an area of 238,406 sq. m,
which was covered by a homestead patent.

In 1972, the PIÑEDAS mortgaged said land to petitioner DEVELOPMENT BANK OF


THE PHILIPPINES (DBP) to secure their P20,000-agricultural loan. Later, The
PIÑEDAS failed to comply with the terms and conditions of the mortgage that DBP
extrajudicially foreclose it in 1977. In the foreclosure sale, DBP was the highest bidder
and a Sheriff Certificate of Sale was executed in its favor. In Said Certificate, it was
indicated therein that the redemption shall be within 5 years from the date of the
registration of the title. This Certificate was later registered in the Registry of Deeds.

In 1978, after the expiration of the 1-year redemption period under Section 6 of Act
3135, DBP consolidated its title over the foreclosed property by executing an Affidavit of
Consolidation of Ownership. Subsequently, a Final Deed of Sale was executed in DBP's
favor, which was registered together with the Affidavit ofConsolidation of Ownership. A
new title was thereafter issued to DBP and it took possession of the foreclosed property
and appropriated the produce thereof.

1978, the Ministry of Justice opined that as the mortgage had ceased to exist upon the
transfer of title to the tenant by virtue of the promulgation of P.D. No. 27 in 1972, there
could be no mortgage to foreclose and therefore no subject for the foreclosure
proceedings.

In 1981, the PIÑEDAS offered to redeem the foreclosed property by offering P10,000 as
partial redemption payment. This amount was accepted by DBP, which conditionally
approved the offer of redemption.

However, DBP sent another letter to the PIÑEDAS informing them that pursuant to P.D.
27, their offer to redeem and/or repurchase the subject property could not be favorably
considered for the reason that said property was tenanted. DBP later filed an action in
court to nullify the foreclosure proceedings which was favorably acted upon.

Later, the PIÑEDAS filed an action against DBP for the cancellation of certificate of title
and/or specific performance, accounting and damages with a prayer for the issuance of
a writ of preliminary injunction. It contended that DBP was in evident bad faith as it
caused the consolidation of its title to the parcel of land in question in spite of the fact
that the 5-year redemption period expressly stated in the Sheriff's Certificate of Sale had
not yet lapsed and that their offer to redeem the foreclosed property was made well
within said period of redemption.

RTC ruled in favor of the PIÑEDAS stating that DBP violated the stipulation in the
Sheriff's Certificate of Sale which provided that the redemption period is 5 years from
the registration.

DBP appealed to the Court of Appeals, which affirmed the decision of the RTC. The
Court of Appeals stated that being that DBP was in evident bad faith when it unlawfully
took possession of the property and defied what was written on the Sheriff's Certificate
of Sale, the PIÑEDAS should be entitled to recover the fruits produced by the property
or its equivalent for the 3-year period.

Hence, this appeal by DBP. It alleged that the mere fact that DBP took possession and
administration of the property did not warrant a finding that DBP was in bad faith:

1. The PIÑEDAS consented to and approved the takeover of DBP;

2. That Sec. 717 of Act No. 3135 allows the mortgagee-buyer to take possession of
the mortgaged property even during the redemption period;

3. That DBP's act of consolidating the title of the property in its name did not
constitute bad faith as there was no law which prohibits the purchaser at public auction
from consolidating title in its name after the expiration of the 1 year redemption period
reckoned from the time the Certificate of Sale was registered; and neither was there any
law or jurisprudence which prohibits the PIÑEDAS from exercising their right of
redemption over said property within 5 years even if title is consolidated in the name of
the purchaser; and

4. That when it denied the PIÑEDAS' offer to redeem the property, it was merely
premised on the Opinion of the Ministerof Justice which stated that said land was
covered under P.D. 27 and could not be the subject of foreclosure proceedings. For this
reason, DBP immediately filed a petition to nullify the foreclosure proceedings which
was favorably acted upon. If DBP was really in bad faith, it would not have filed said
petition for said petition was against its own interests.

Issue: Whether or not DBP was in bad faith.

Held: NO, it was not. It was a possessor in good faith.


A possessor in good faith is one who is not aware that there exists in his title or mode of
acquisition any flaw, which invalidates it. Good faith is always presumed, and upon him
who alleges bad faith on the part of a possessor rests the burden of proof. It was
therefore incumbent on the PIÑEDAS to prove that DBP was aware of the flaw in its title
i.e. the nullity of the foreclosure. This, they failed to do.

The PIÑEDAS argued that DBP's bad faith stemmed from the fact that DBP
consolidated title over the disputed property despite the statement in the Sheriff's
Certificate of Sale to the effect that said land was subject to a 5-year redemption period.

The period of redemption of extrajudicially foreclosed land is provided under Section 6


of ACT No. 3135 which states that if no redemption is made within 1 year, the purchaser
is entitled as a matter of right to consolidate and to possess the property. Accordingly,
DBP's act of consolidating its title and taking possession of the subject property after the
expiration of the period of redemption was in accordance with law. Moreover, it was in
consonance with Section 4 of the mortgage contract between DBP and the PIÑEDAS
where they agreed to the appointment of DBP as receiver to take charge and to hold
possession of the mortgage property in case of foreclosure. DBP's acts cannot therefore
be tainted with bad faith.

The right of DBP to consolidate its title and take possession of the subject property is
not affected by the PIÑEDAS' right to repurchase said property within 5 years from the
date of conveyance granted by Section 119 of CA No. 141. In fact, without the act of
DBP consolidating title in its name, the PIÑEDAS would not be able to assert their right
to repurchase granted under the aforementioned section.

It may be argued that P.D. 27 was already in effect when DBP foreclosed the property.
However, the legal propriety of the foreclosure of the land was put into question only
after the Opinion of the Ministry of Justice declared that said land was covered by P.D.
27 and could not be subject to foreclosure proceedings. The Opinion was issued almost
2 months after DBP consolidated its title to the property. By law and jurisprudence, a
mistake upon a doubtful or difficult question of law may properly be the basis of good
faith.

Good faith of the possessor ceases when an action to recover possession of the
property is filed against him and he is served summons therefore. In the present case,
DBP was served summons in 1982. By that time, it was no longer in possession of the
disputed land as possession thereof was given back to the PIÑEDAS after the
foreclosure of DBP was declared null and void. Therefore, any income collected by DBP
after it consolidated its title and took possession of the property in 1978 up to 1982
belonged to DBP as a possessor in good faith since its possession was never legally
interrupted.
SOMODIO vs. CA

GR No. 82680. August 15, 1994

Facts: In 1974, Jose Ortigas conveyed to Wilfredo Mabugat the possession of a


residential lot situated in Raja Muda, General Santos City. Half of the purchase price
thereof, was contributed by petitioner NICANOR SOMODIO. Later, Mabugat caused the
partition of the property into 2 portions. SOMODIO took the western part, which was
known as Lot 6328-X. After the partition, SOMODIO took possession of his portion and
planted thereon ipil-ipil trees, coconut trees and other fruit-bearing trees.

In 1976, SOMODIO began construction of a house thereon. However, this structure was
left unfinished as his employment took him to Kidapawan, North Cotabato. He then
asked his uncle to take care of the structure. Then on he would visit the property every
3 months or on weekends when he had time.

In 1977, SOMODIO allowed respondent FELOMINO AYCO to transfer his hut in Lot
6328-X. 6 years later, SOMODIO demanded that AYCO vacate the premises but such
demand proved futile. Hence, he filed an action for unlawful detainer with damages
against respondent AYCO.

In 1983, respondent EBENECER PURISIMA also entered the land and constructed a
house thereon. 4 days later, SOMODIO also filed a complaint for forcible entry against
PURISIMA.

PURISIMA contended that the lot was a portion of the land subject of his application for
miscellaneous sales patent with the Bureau of Lands. He added that his father, who
was a geodetic engineer, surveyed the parcel of land for the Small Farmers Fishpond
Association, Inc. Such survey plan was approved by the Director of Lands in 1960.
AYCO, on the other hand, did not present any evidence but merely anchored his right to
possess the property on the evidence of PURISIMA.

The trial court held that SOMODIO was the actual possessor of Lot No. 6328-X. It
declared that PURISIMA built his house "almost on the spot where SOMODIO's
unfinished house" stood "thru stealth and strategy," not knowing that the house was
built on Lot No. 6328X and not on Lot No. 6328-Y. It held that being that PURISIMA was
a frequent visitor in Rajah Muda and had sometimes stayed with Mrs. Maturan in Judge
Purisima's house on the adjoining lots, he could not have remained unaware of the
possession of SOMODIO. The court further stated that Lot No. 6328-X was not included
in the survey pan made by PURISIMA’s father. Hence, the court ordered PURISIMA
and AYCO to remove their repective houses and to deliver the land to SOMODIO.

The RTC affirmed such decision in toto. However, on appeal with the CA, it reversed
the said decision. It held that SOMODIO had not "clearly and conclusively established
physical, prior possession over Lot No. 6328-X." A motion for reconsideration with the
same court was also denied.

Hence this appeal by SOMODIO.

Issue: Whether or not SOMODIO had enjoyed priority of possession over Lot No. 6328-
X.

Held: YES.Under Art. 531, SOMODIO had possessed the property through material
occupation and having subjected it under his will.

SOMODIO took possession of the property sometime in 1974 when he planted the
property to coconut trees, ipil-ipil trees and fruit trees. In 1976, he started the
construction of a building on the property. It was immaterial that the building was
unfinished and that he left for Kidapawan for employment reasons and visited the
property only intermittently. Possession in the eyes of the law does not mean that a man
has to have his feet on every square meter of ground before it can be said that he is in
possession. It was sufficient that SOMODIO was able to subject the property to the
action of his will.

PURISIMA on the other hand, did not present proof that between 1958, when his father
allegedly took possession of the land, and 1983, when said he himself entered the land,
his father ever exercised whatever right of possession he should have over the
property. Under these circumstances, priority in time should be the pivotal cog in
resolving the issue of possession. Besides, it was found by two ocular inspections, that
what PURISIMA was claiming was possession over Lot No. 6328-Y. SOMODIO’s land
on the other hand, was adjacent to it, Lot No. 6328-X. It was also in SOMODIO’s area
where PURISIMA and AYCO built their houses.

The SC also held that although SOMODIO’s prior possession over the property was
proven, it was however, not synonymous with his right of ownership over the same. The
resolution of the issue of possession is far from the resolution of the issue of ownership.
Forcible entry is merely a quieting process and never determines the actual title to an
estate.
EQUATORIAL REALTY vs. MAYFAIR THEATER

GR No. 133879. November 21, 2001

Facts: CARMELO & BAUERMANN, INC. owned a registered parcel of land at Claro M.
Recto Avenue, Manila on which 2 2-storey buildings were constructed.

CARMELO entered into 2 Contracts of Lease with petitioner MAYFAIR THEATER INC.
One was entered into in 1967 for a period of 20 years. MAYFAIR used the leased
premises as a movie house known as Maxim theater. The second was entered into in
1969 for another 20 years. The rented premises becamethe site for the Marimar
Theater. Both Contracts had a provision therein, granting MAYFAIR a right of first
refusal to purchase the subject properties.

However in 1978, within the 20-year-lease term, the subject properties were sold by
CARMELO to petitioner EQUATORIAL REALTY DEVELOPMENT, INC. for
P11,300,000 without first being offered to MAYFAIR. As a result then, MAYFAIR filed a
complaint in court, praying that the Deed of Absolute Sale in favor of EQUATORIAL be
annulled and as to CARMELO, he demanded specific performance plus damages.

The trial court did not grant the petition of MAYFAIR. On appeal, the Court of Appeals
completely reversed and set aside the judgment of the lower court. It ordered that the
Deed of Sale be rescinded and ordered CARMELO to allow MAYFAIR to purchase the
property.

However, Carmelo could no longer be located. Thus, following the order of execution of
the trial court, MAYFAIR deposited with the clerk of court a quo its payment to
CARMELO in the sum of P11,300,000. The lower court issued a Deed of
Reconveyance in favor of CARMELO and a Deed of Sale in favor of MAYFAIR. A title
over the land was subsequently issued to MAYFAIR.

In 1997, EQUATORIAL filed an action for the collection of a sum of money against
MAYFAIR. It claimed that MAYFAIR should pay rentals or reasonable compensation for
its use of the subject premises after its lease contracts had expired. It alleged that the
Lease Contract covering the premises occupied by Maxim Theater expired in 1987
while the Lease Contract covering the premises occupied by Miramar Theater lapsed in
1989. Representing itself as the owner of the subject premises by reason of the Deed of
Sale issued by CARMELO in his favor, he was entitled to the rentals arising from
MAYFAIR’s occupation thereof.

The trial court dismissed the case and so as to the motion for reconsideration. It
debunked the claim of EQUATORIAL for unpaid back rentals, holding that the
rescission of the 1978 Deed of Absolute Sale in the mother case did not confer on
EQUATORIAL any vested or residual proprietary rights, even in expectancy.

Hence, this present recourse.

Issues:

1. Whether or not EQUATORIAL had acquired ownership over the property by virtue of
the sale made by CARMELO in the former’s favor.

2. Whether or not EQUATORIAL was entitled for back rentals from the time MAYFAIR’s
Lease Contracts expired.

Held: (1) NO, it had not. It was because even there was proper a act and legal
formalities in the form of a Deed of Absolute Sale in its favor, there was however, no
delivery of the property as it was then still MAYFAIR which was in actual possession of
it.

By a contract of sale, “one of the contracting parties obligates himself to transfer


ownership of and to deliver a determinate thing and the other to pay therefor a price
certain in money or its equivalent.”

The Deed of Sale as a form of constructive delivery did not transfer ownership

Ownership of the thing sold is a real right, which is not transferred by the contract alone
but the buyer acquires only upon delivery of the thing to. Delivery may be actual or
constructive.

Although it could be argued that there was constructive delivery of the property in favor
of EQUATORIAL because of the Deed of Sale, the same was not considered.

However, it has been held that the execution of a contract of sale as a form of
constructive delivery is a legal fiction. It is only a prima facie presumption of delivery. It
holds true only when there is no impediment that may prevent the passing of the
property from the hands of the vendor into those of the vendee. When there is such
impediment, “fiction yields to reality - the delivery has not been effected.”
From the peculiar facts of this case, it is clear that EQUATORIAL never took actual
control and possession of the property sold, in view of MAYFAIR’s timely objection to
the sale and the continued actual possession of the property. The objection took the
form of a court action impugning the sale which, as we know, was rescinded by a
judgment rendered by this Court in the mother case.

Hence, MAYFAIR’s opposition to the transfer of the property by way of sale to


EQUATORIAL was a legally sufficient impediment that effectively prevented the passing
of the property into the latter’s hands. Because MAYFAIR was in actual possession of
the property, the sale could not be considered consummated.

The fact that MAYFAIR paid rentals to EQUATORIAL during the litigation should not be
interpreted to mean either actual delivery or ipso facto recognition of EQUATORIAL’s
title.

EQUATORIAL, as alleged buyer of the disputed properties and as alleged successor-in-


interest of CARMELO’s rights as lessor - submitted two ejectment suits against
MAYFAIR. The first in 1987 and the second in 1990. MAYFAIR eventually won them
both. However, to be able to maintain physical possession of the premises while
awaiting the outcome of the mother case, it had no choice but to pay the rentals.

The rental payments made by MAYFAIR should not be construed as a recognition of


EQUATORIAL as the new owner. They were made merely to avoid imminent eviction.

(2) NO, it was not entitled to back rentals not because it did not acquire ownership over
the property in the absence of delivery.

The sale to EQUATORIAL may have been valid from inception, but it was judicially
rescinded before it could be consummated. EQUATORIAL never acquired ownership,
not because the sale was void, as erroneously claimed by the trial court, but because
the sale was not consummated by a legally effective delivery of the property sold.

Furthermore, assuming for the sake of argument that there was valid delivery,
EQUATORIAL was not entitled to any benefits from the “rescinded” Deed of Absolute
Sale because of its bad faith. It admitted that its lawyers had studied the Contract
ofLease between CARMELO and MAYFAIR prior to the sale and knew of the
stipulations therein. It only then proved that the sale was entered into with knowledge
that it would be in violation of the rights of and to the prejudice of MAYFAIR.

EQUATORIAL’s claim of reasonable compensation for respondent’s use and


occupation of the subject property from the time the lease expired could not be
countenanced. If it suffered any loss, it must bear it in silence, since it had wrought that
loss upon itself. Otherwise, bad faith would be rewarded instead of punished.
DELA ROSA vs. CARLOS

GR No. 147549. October 23, 2003

Facts: The Petitioner SPOUSES JESUS AND LUCILA DELA ROSA were the owners of
a house and lot in Bulacan. They acquired it from Leonardo Carlos under an Absolute
Deed of Sale in 1966. Thereafter, they had it registered. Afterwards, they renovated the
house, furnished and occupied the same since 1966. They also had a perimeter fence
built to separate the Property from the municipal road and to protect it from trespassers.
They had been paying taxes on the land (1966-1997) and the house (1966-1993).

Since the SPOUSES DELA ROSA worked and their children studied in Manila, they
resided in the Property only during weekends and holidays. However, they padlock the
house on the property while they were away and instructed relatives who lived nearby to
watch over the property.

In 1997, the SPOUSES DELA ROSA discovered that through stealth and without their
knowledge and consent, respondent SANTIAGO CARLOS had built a house of strong
materials on a vacant lot of the Property. They also found that respondent TEOFILA
PACHECO had also been transferring furniture to the house and sleeping there. They
then demanded, through their counsel, that CARLOS and PACHECO demolish the
house, remove their furniture and vacate the premises within 10 days. However,
Santiago CARLOS and PACHECO did not heed the SPOUSES DELA ROSA’s demand.

So, in 1998, the SPOUSES DELA ROSA filed a complaint for forcible entry against
CARLOS and PACHECO.

CARLOS and PACHECO on the other hand, alleged that they were the surviving heirs
of the Spouses Leonardo and Benita Carlos. Hence, together with LUCILA DELA
ROSA, they were co-owners of the property. They also contended that the SPOUSES
DELA ROSA obtained the Deed of Sale through fraud and undue influence and that
their mother did not consent to the sale of the property which they claimed as conjugal.
They maintained that the SPOUSES DELA ROSA were never in possession of the
Property because the latter only went there to visit their parents, and not as owners.
Insisting that they had been occupying the Property since birth, SANTIAGO claimed that
he constructed the house on the Property in the concept of a co-owner.

The MTC declared that the SPOUSES DELA ROSA were entitled to the possession of
the property. It ordered CARLOS and PACHECO to vacate the premises. The same
decision was affirmed by the RTC. The CA on the other hand, reversed it. Hence, this
petition for review by the SPOUSES DELA ROSA.
Issue: Whether or not the SPOUSES DELA ROSA had acquired prior possession over
the property.

Held: YES. They had prior possession.

In a forcible entry case, the principal issue for resolution is mere physical or material
possession (possession de facto) and not juridical possession (possession de jure) nor
ownership ofthe property involved. In the present case, both parties claimed prior
possession of the Property.

The Spouses Dela Rosa claimed that they had been in possession of the Property since
1966 upon the execution of the Deed of Sale by Leonardo in their favor. On the other
hand, CARLOS and PACHECO claimed that they had been continuously occupying the
Property since birth and the SPOUSES DELA ROSA were never in possession of the
Property.

While admitting that CARLOS and PACHECO used to reside in the Property since birth,
the SPOUSES DELA ROSA contended that the two moved out when they married in
1961 and 1959, respectively.

The SPOUSES DELA ROSA had material possession over the property.

Their act of visiting the Property on weekends and holidays was evidence of actual or
physical possession. Even if the SPOUSES DELA ROSA were already residing in
Manila, it did not mean that they could not continue possessing the Bulacan property.
The fact of their residence in Manila, by itself, did not result in loss of possession of the
Bulacan property. The law does not require one in possession of a house to reside in
the house to maintain his possession.

The SPOUSES DELA ROSA also subjected the property to the action of their will.

They renovated the house, furnished the same and constructed a perimeter fence
around the Property. Possession in the eyes of the law does not mean that a man has
to have his feet on every square meter of ground before it can be said that he is in
possession. It is sufficient that the SPOUSES DELA ROSA were able to subject the
property to the action of their will.

The SPOUSES DELA ROSA had a proper act and legal formality in their favor

They had an Absolute Deed of Sale dated 1966 in their favor when they acquired the
Bulacan property from Leonardo Carlos.

The question of the validity of the Deed of Sale could not be questioned in a forcible
entry case.
CARLOS and PACHECO claimed that the Deed of Sale was executed without the
consent of Benita, Leonardo’s spouse. They also added that the Deed of Sale was
executed through fraud and undue influence. However, these issues could not properly
be addressed in the present action for forcible entry. These issues could only be
resolved in a separate action specifically for the annulment of the Deed of Sale.

Pajuyo v. CA

GR No. 146364 June 3, 2004

Facts: Pajuyo entrusted a house to Guevara for the latter's use provided he should
return the same upon demand and with the condition that Guevara should be
responsible of the maintenance of the property. Upon demand Guevara refused to
return the property to Pajuyo. The petitioner then filed an ejectment case against
Guevara with the MTC who ruled in favor of the petitioner. On appeal with the CA, the
appellate court reversed the judgment of the lower court on the ground that both parties
are illegal settlers on the property thus have no legal right so that the Court should leave
the present situation with respect to possession of the property as it is, and ruling further
that the contractual relationship of Pajuyo and Guevara was that of a commodatum.

Issue: Is the contractual relationship of Pajuyo and Guevara that of a commodatum?

Held: No. The Court of Appeals’ theory that the Kasunduan is one of commodatum is
devoid of merit. In a contract of commodatum, one of the parties delivers to another
something not consumable so that the latter may use the same for a certain time and
return it. An essential feature of commodatum is that it is gratuitous. Another feature of
commodatum is that the use of the thing belonging to another is for a certain period.
Thus, the bailor cannot demand the return of the thing loaned until after expiration of the
period stipulated, or after accomplishment of the use for which the commodatum is
constituted. If the bailor should have urgent need of the thing, he may demand its return
for temporary use. If the use of the thing is merely tolerated by the bailor, he can
demand the return of the thing at will, in which case the contractual relation is called a
precarium. Under the Civil Code, precarium is a kind of commodatum. The Kasunduan
reveals that the accommodation accorded by Pajuyo to Guevarra was not essentially
gratuitous. While the Kasunduan did not require Guevarra to pay rent, it obligated him to
maintain the property in good condition. The imposition of this obligation makes the
Kasunduan a contract different from a commodatum. The effects of the Kasunduan are
also different from that of a commodatum. Case law on ejectment has treated
relationship based on tolerance as one that is akin to a landlord-tenant relationship
where the withdrawal of permission would result in the termination of the lease. The
tenant’s withholding of the property would then be unlawful.
WONG vs. CARPIO

GR No. 50264. October 21, 1991

Facts: In 1972, Private respondent MANUEL MERCADO acquired a land in Colongan,


Sta. Maria, Davao del Sur from William Giger by virtue of a Deed of Sale with right to
repurchase for a consideration of P3,500. In 1973, William Giger again asked an
additional amount of P2,500 from MERCADO and he acceded so. But he required
William Giger to sign a new deed of Pacto de Retro Sale, which the latter executed.

Since he purchased the land in 1972, MERCADO began paying the real estate taxes of
the land for William Giger and began harvesting only the coconut fruits thereon. He
went periodically to the land to make copra but he never placed any person on the land
in litigation to watch it. Neither did he reside on the land as he was a businessman and
storekeeper by occupation and resides at Lower Sta. Maria, Davao del Sur while the
land in litigation is at Colongan, Sta. Maria. Neither did he put any sign or hut to show
that he was in actual possession.

As early as 1976, MERCADO knew that IGNACIO WONG’s laborers were on his land
and that they had a hut there but he did not do anything to stop them. Instead
MERCADO was happy that there were people and a hut on the land therein.

A month after, WONG went to the land to find out if there were other people residing
there or claiming it besides the owner and he found none. So WONG bought the parcel
of land in litigation from William Giger and his wife Cecilia Valenzuela. Thenon, WONG
declared the land in suit for taxation purposes in his name. However, when he tried to
register the pacto de retro sale with the Register of Deeds, it could not be registered.

Nevertheless, WONG placed laborers on the land in suit, built a small farm house after
made some clearings and fenced the boundaries. He also placed signboards.

In 1976, MERCADO again went to the land in suit to make copras. When he learned
that WONG occupied the land, he had the latter entered in the police blotter. Despite of
this, 2 months after, WONG ordered the hooking of the coconuts from the land in
litigation and nobody disturbed him.

Later, MERCADO filed a case for forcible entry against WONG. During the pendency of
said complaint, spouses William Giger and Cecilia Valenzuela filed a case for
reformation of instrument with the court against MERCADO.

The MTC held that WONG had prior, actual and continuous physical possession of the
disputed property and dismissed both the complaint and the counter-claim by
MERCADO. On appeal with the CFI, it reversed said decision. It held that it was
MERCADO who had taken possession of the property earlier in point of time and
WONG was an intruder and must return, the possession of the land in question to the
former. WONG was also ordered to pay rental after from the time his possession was
contested until he the time he would return the property to MERCADO.

Hence, this appeal. WONG contended that MERCADO had not established prior
possession because the latter’s periodic visit to the lot to gather coconuts may had been
consented to and allowed or tolerated by the owner thereof. MERCADO could also had
been a hired laborer who entered the premises every harvest season to comply with the
contract of labor with the true owner of the property.

Issue: Whether or not WONG acquired the property by reason of the pacto de retro sale
executed by the original owner William Giger in his

favor.

Held: NO. Although there was a proper act and formality in the form of a pacto de retro
sale executed by the original owner William Giger in WONG’s favor, there was
nevertheless delivery. The execution of a sale thru a public instrument shall be
equivalent to the delivery of the thing, unless there is stipulation to the contrary. If,
however, notwithstanding the execution of the instrument, the purchaser cannot have
the enjoyment and material tenancy of the thing and make use of it herself, because
such tenancy and enjoyment are opposed by another, then delivery has not been
effected.

Possession by William Giger was passed to MERCADO by virtue of the first sale a
retro, thus, the sale a retro in favor of WONG failed to pass the possession of the
property because there was an impediment – the possession exercised by MERCADO.
Possession as a fact cannot be recognized at the same time in two different
personalities except in the cases of co-possession. Under Art. 538, should a question
arise regarding the fact of possession, the present possessor shall be preferred; if there
are two possessions, the one longer in possession, if the dates of possession are the
same, the one who presents a title; and if these conditions are equal, the thing shall be
placed in judicial deposit pending determination of its possession or ownership through
proper proceedings.

In fact, it was MERCADO who had material possession of the land and had subjected it
in his will he went there occasionally to make copra. There was also a proper act and
formality in his favor, that was the Pacto de Retro Sale executed by William Giger in his
favor.
Wong’s entry to the property was characterized by force, intimidation, threat, strategy,
or stealth.

The court also held that WONG’s entry into the property was and excluding MERCADO
as the lawful possessor therefrom necessarily implies the exertion of force over the
property, and this is all that is necessary to prove forcible entry. Under the rule, entering
upon the premises by strategy or stealth is equally as obnoxious as entering by force.
The foundation of the action is really the forcible exclusion of the original possessor by a
person who has entered without right. The words "by force, intimidation, threat, strategy,
or stealth" include every situation or condition under which one person can wrongfully
enter upon real property and exclude another who has had prior possession therefrom.

The award of rentals was affirmed

It also sustained the award of rentals since WONG’s possession in good faith ceases
from the moment defects in the title were made known to the him, by extraneous
evidence or by suit for recovery of the property by the true owner. Such interruption took
place upon service of summons.
Digested by: Alfred Gene B. Lacandula

ARTICLE 538

FERNANDA MENDOZA CEQUEÑA and RUPERTA MENDOZA LIRIO


vs.
HONORATA MENDOZA BOLANTE

G.R. No. 137944, April 6, 2000


Panganiban, J.

If there are 2 possessors of the land, the preferred possessor shall be the one longer in possession.
Possession here shall include not only the actual possession made by the present possessor but also the
possession made by her predecessor-in-interest.

Facts:

Prior to 1954, a land located in the Province of Rizal, having an area of 1,728 sq. m. was originally
declared for taxation purposes in the name of Sinforoso Mendoza, father of respondent HONORATA
MENDOZA BOLANTE. In 1930,Sinforoso Mendoza died. Margarito Mendoza was the brother of Sinforoso
Mendoza and also the father of petitioners FERNANDA MENDOZA CEQUENA and RUPERTA MENDOZA,
LIRIO. After Sinforosa Mendoza died,Margarito Mendoza took possession of the land and cultivated it
with his son Miguel. On the basis of an affidavit, Margarito Mendoza caused the cancellation of the tax
declaration in the name of Sinforoso Mendoza on the contested lot and subsequently declared it in his
name. Later, Margarito Mendoza also passed away.

The occupant of the land however, since 1985, was BOLANTE, the only daughter of Sinforoso Mendoza.
Earlier, in 1979, BOLANTE and Miguel Mendoza, another brother of CEQUENA and LIRIO, during the
cadastral survey had a dispute on the ownership of the land.

The trial court declared that the land, which was covered by a tax declaration in favor of Margarito
Mendoza belonged to him and his heirs, petitioners CEQUENA and LIRIO. BOLANTE wasalso ordered to
vacate the premises.

The Court of Appeals however, reversed the trial court decision and ruled that the affidavit allegedly
signed by the BOLANTE and her mother had not been sufficiently established. The notary public, nor any
witness and expert testimony ever attested to the genuineness of the questioned signatures. It also
ruled BOLANTE’s mother, never having attended school, couldneither read nor write and that BOLANTE
was referred to as “Leonor” in the affidavit, which was a name she had never been called. Hence, it
concluded that although tax declarations were presented by CEQUENA and LIRIO, it could not overthrow
BOLANTE’s proof of ownership of the disputed parcel by actual, physical, exclusive and continuous
possession since 1985, which indeed gave her a better title under Article 538 of the Civil Code.
Hence, this appeal. CEQUENA and LIRIO contended that BOLANTE could not have been the preferred
possessor since she came into possession through force and violence, contrary to Article 536 of the Civil
Code.

Issue:

Whether BOLANTE was a preferred possessor under Article 538 of the Civil Code because she was in
notorious, actual, exclusive and continuous possession of the land since 1985.

Held:

YES she was the preferred possessor under Article 538. The court held that despite their dispossession in
1985 by BOLANTE, CEQUENA and LIRIO did not lose legal possession because possession cannot be
acquired through force or violence. To all intents and purposes, a possessor, even if physically ousted, is
still deemed the legal possessor. Indeed, anyone who can prove prior possession, regardless of its
character, may recover such possession.

However, despite so, the possession by CEQUENA and LIRIO did not prevail over that of the BOLANTE.
Possession by the former before 1985 was not exclusive, as the latter also acquired it before 1985. The
records show that the CEQUENA and LIRIO's father and brother, as well as the BOLANTE and her mother
were simultaneously in adverse possession of the land.Before 1985, the subject land was occupied and
cultivated by the Sinforoso, BOLANTE's father. When Sinforoso died in 1930, MARGARITO took
possession of the land and cultivated it with his son Miguel. At the same time, BOLANTE and her mother
continued residing on the lot.

When BOLANTE came of age in 1948, she paid realty taxes for the years 1932-1948. Margarito declared
the lot for taxation in his name in 1953 and paid its realty taxes beginning 1952. When he died, Miguel
continued cultivating the land. As found by the CA, BOLANTE and her mother were living on the land,
which was being tilled by Miguel until 1985 when he was physically ousted by the respondent.Based on
Article 538 of the Civil Code, BOLANTE was the preferred possessor because, benefiting from her
father's tax declaration of the subject lot since 1926, she has been in possession thereof for a longer
period. On the other hand, petitioners' father acquired joint possession only in 1952.
ARTICLE 540

SOTERA PAULINO MARCELO, GABRIELA M. ANGELES, SIMEONA CUENCO, EMILIA MARCELO and
RUBEN MARCELO
vs.
HON. COURT OF APPEALS, FERNANDO CRUZ and SERVANDO FLORES

G.R. No. 131803 April 14, 1999


Vitug, J.:

Acquisitive prescription is a mode of acquiring ownership by a possessor through the requisite lapse of
time; In order to ripen into ownership, possession must be in the concept of an owner, public, peaceful
and uninterrupted.

FACTS:

A parcel of land located in Sta. Lucia, Angat, Bulacan was originally owned by spouses Jose Marcelo and
Sotera Paulino and they had been in continuous possession of said property since 1939. Following the
death of Jose Marcelo in 1965, his heirs, petitioners SOTERA PAULINO MARCELO ET AL. discovered in
1967 that a portion of said property had been encroached by respondent FERNANDO CRUZ.

Earlier in 1960, CRUZ purchased a 6,000-sq. m. property from Engracia dela Cruz and Vicente Marta and
Florentino allsurnamed Sarmiento, pursuant to a “Kasulatan ng Partisyon saLabas ng Hukuman at
Bilihang Patulayan”. As soon as the said property was sold to Fernando Cruz, the adjoining property
described and classified as “parang”with an area of 7,856 sq. m. was declared by said CRUZ in his name
which circumstance, increased his landholding to 13,856 sq. m. In 1968, he sold this 13,856 sq. m.-
property to respondent SERVANDO FLORES pursuant to a deed of sale (Kasulatan ng Bilihan). The said
sale included the encroached portion of 7,540 sq.m. of MARCELO ET AL.’s property.

In 1968, MARCELO ET AL. attempted to cultivate the disputed portion but were barred from doing so by
respondent FLORES who claimed that the area was part of the land he bought from co-respondent
CRUZ. Hence, in 1982, MAR CELO ET AL filed an action for the recovery of a portion of unregistered land.

CRUZ and FLORES, on the other hand, contended that the portion sought to be recovered by MARCELO
ET AL. was part of the land which CRUZ acquired in 1960 from the Sarmientos. They also averred that
the land sold to CRUZ contained 6,000sq.m. of “palayero”or riceland and 7,856 sq. m. of “parang” or
pasture land. It was added that in 1967, CRUZ caused the survey of the property and had it declared for
taxation in 1968. It was further alleged that CRUZ sold the same property to FLORES in 1968.

The trial court found that the issue revolved on the so-called pasture land or “parang”. It concluded that
the “parang”belonged to MARCELO ET AL. and that it was merely encroached upon by CRUZ. It was
proven that the tax declaration of the Sarmientos, from whom CRUZ purchased the property, did not
include the “parang” and it was only began to be declared for taxation purposes in the name of CRUZ in
1961. On the other hand, the said “parang”was a part and parcel of MARCELO ET AL.” property to which
they had been in possession thereof prior to World War II. Because of such encroachment, the
landholding of CRUZ of 6,000 sq. m. was increased to 13,856 square meters. The court then ordered
CRUZ and FLORES to return the ownership and possession of the “parang”to MARCELO ET AL.

On appeal to the CA, the decision of the lower court was reversed. Hence, this appeal.

ISSUE:

Whether FLORES had in his favor just title.

RULING:

YES. FLORES had just title in his favor because he acquired the property in good faith.

Acquisitive prescription is a mode of acquiring ownership by a possessor through the lapse of time. In
order to ripen into ownership, possession must be in the concept of an owner, public, peaceful and
uninterrupted. Thus, mere possession with a juridical title, such as, to exemplify, by a usufructuary, a
trustee, a lessee, an agent or a pledgee, not being in the concept of an owner, cannot ripen into
ownership by acquisitive prescription, unless the juridical relation is first expressly repudiated and such
repudiation has been communicated to the other party. Acts of possessory character executed due to
license or by mere tolerance of the owner would likewise be inadequate. Possession, to constitute the
foundation of a prescriptive right, must be en concepto de dueno, or, to use the common law equivalent
of the term, that possession should be adverse, if not, such possessory acts, no matter how long, do not
start the running of the period of prescription.

Same; Same; Same; Same; Acquisitive prescription of dominion and other real rights may be ordinary
or extraordinary.—Acquisitive prescription of dominion and other real rights may beordinary or
extraordinary. Ordinary acquisitive prescription requires possession of things in goodfaith and with just
title for the time fixed by law without good faith and just title, acquisitiveprescription can only be
extraordinary in character.

Same; Same; Same; Same; Ordinary acquisitive prescription demands that the possession be in “good
faith and with just title”.—Ordinary acquisitive prescription demands, as aforesaid, thatthe possession
be “in good faith and with just title”. The good faith of the possessor consists inthe reasonable belief
that the person from whom the thing is received has been the ownerthereof and could thereby transmit
that ownership. There is, upon the other hand, just title whenthe adverse claimant comes into
possession of the property through any of the modes recognizedby law for the acquisition of ownership
or other real rights, but that the grantor is neither theowner nor in a position to transmit the right.
ARTICLE 540

SERVANDO MANGAHAS
vs.
THE HON. COURT OF APPEALS and SPOUSES SIMEON and LEONORA CAYME

G.R. No. 95815 March 10, 1999


Purisima, J.:

Acquisition of ownership under the law on prescription cannot be pleaded in support of MANGAHAS'
submission that subject land has ipso jure become his private property.

FACTS:

Since 1955, the spouses Severo and Caridad S. Rodil, occupied and possessed an agricultural land with
an area of 15.0871 hectares. Petitioner, SERVANDO MANGAHAS, had been in possession thereof by
virtue of the agreement between him and the spouses Rodil, allowing him to occupy and cultivate the
said parcel of land.

In the Kasulatan ng Pagtanggap ng Salapi, MANGAHAS paid the amount of P7,000 to the spouses Rodils
for allowing him to occupy and cultivate the same. 12 hectares of the property were then developed
into a fishpond, 2 hectares were planted with rice and 1 hectare was used as "tumana" with a house
erected thereon.

In 1971, the spouses Rodil decided to sell the said piece of land. MANGAHAS approached private
respondent SPOUSES PABLO SIMEON AND LEONORA CAYME to offer to them the property for sale. The
SPOUSES CAYME agreed to purchase the property for P7,000 and MANGAHAS was the broker of such
sale. An Affidavit of proof to such was executed by the Spouses Rodil in favor of the SPOUSES CAYME in
the presence of the herein MANGAHAS. The SPOUSES CAYME, on the same day, filed a free patent
application for the land, which was later approved. Later, title in their names was issued.

The SPOUSES CAYME permitted MANGAHAS to continue possessing and working on the same land, even
after the sale, upon the request of the former themselves because they were then busy in their palay
business. The SPOUSES CAYME did not get any share in the fruits or harvest of the land except on one
occasion, when MANGAHAS gave them 1/2 "tiklis" (big basket) of "tilapia".

Later, the SPOUSES CAYME had demanded from MANGAHAS the return of the premises in question but
the latter refused to vacate the place. In 1985, the SPOUSES CAYME commenced an action for recovery
of ownership and the possession of real property.

MANGAHAS theorized that he entered into the possession of the land under controversy in 1969 by
virtue of a prior sale he inked with the spouses Rodil in 1969. He averred that he had been in continuous
occupation and possession in concepto dedueño, enjoying the fruits thereof to the exclusion of all
others, his right thereto being evidenced by the Kasulatan ngPagtangap ng Salapi dated 1969. He also
denied that he brokered the sale between the spouses Rodil and SPOUSES CAYME.
The trial court ruled against MANGAHAS. It held that the SPOUSES CAYME WERE the absolute and
registered owners of the land in question. It also ordered MANGAHAS to remove his house constructed
thereon and deliver the possession to the SPOUSES CAYME. The Court of Appeals affirmed the same
decision.

Hence, this appeal.

ISSUE:

Whether Mangahas possessed the property in the concept of an owner.

RULING:

No. Mangahas only possessed it in the concept of a holder.

As found by the lower court, petitioner had admitted, contrary to his disclaimer, that the possession of
the spouses Rodil, from whom he traces the origin of his supposed title, commenced only in April 1955.
Petitioner cannot now feign ignorance of such judicial admission which he has resolutely repudiated in
his present petition. Acquisition of ownership under the law on prescription cannot be pleaded in
support of petitioner’s submission that subject land has ipso jure become his private property.
ARTICLE 540

FERNANDA MENDOZA CEQUEÑA and RUPERTA MENDOZA LIRIO


vs.
HONORATA MENDOZA BOLANTE

G.R. No. 137944, April 6, 2000


Panganiban, J.

Possession acquired and enjoyed in the concept of a holder despite 32 years, could not ripen into
ownership.

FACTS:

Prior to 1954, a land located in the Province of Rizal, having an area of 1,728 sq. m. was originally
declared for taxation purposes in the name of Sinforoso Mendoza, father of respondent HONORATA
MENDOZA BOLANTE. In 1930,Sinforoso Mendoza died.

Margarito Mendoza was the brother of Sinforoso Mendoza and also the father of petitioners FERNANDA
MENDOZA CEQUENA and RUPERTA MENDOZA, LIRIO. After Sinforosa Mendoza died,Margarito Mendoza
took possession of the land and cultivated it with his son Miguel. On the basis of an affidavit, Margarito
Mendoza caused the cancellation of the tax declaration in the name of Sinforoso Mendoza on the
contested lot and subsequently declared it in his name. Later, Margarito Mendoza
also passed away.

The occupant of the land however, since 1985, was BOLANTE, the only daughter of Sinforoso Mendoza.
Earlier, in 1979, BOLANTE and Miguel Mendoza, another brother of CEQUENA and LIRIO, during the
cadastral survey had a dispute on the ownership of the land.

The trial court declared that the land, which was covered by a tax declaration in favor of Margarito
Mendoza belonged to him and his heirs, petitioners CEQUENA and LIRIO. BOLANTE was also ordered to
vacate the premises.

The Court of Appeals however, reversed the trial court decision and ruled that the affidavit allegedly
signed by the BOLANTE and her mother had not been sufficiently established. Thenotary public, nor any
witness and expert testimony everattested to the genuineness of the questioned signatures. It also
ruled BOLANTE􀇯s mother, never having attended school, could neither read nor write and that BOLANTE
was referred to as “Leonor” in the affidavit, which was a name she had never been called. Hence, it
concluded that although tax declarations were presented by CEQUENA and LIRIO, it could not overthrow
BOLANTE􀇯s proof of ownership of the disputed parcel by actual, physical, exclusive and continuous
possession since 1985, which indeed gave her a better title under Article 538 of the Civil Code.

Hence, this appeal. CEQUENA and LIRIO contended that BOLANTE could not have been the preferred
possessor since she came into possession through force and violence, contrary to Article 536 of the Civil
Code.
ISSUE:

Whether or not CEQUENA and LIRIO acquired possession of the land in the concept of an owner so as to
acquire it by prescription.

RULING:

NO. It was BOLANTE who had acquired ownership over the land by prescription, prior to the possession
of CEQUENA and LIRIO.

Under Art. 540 of the Civil Code, "Only the possession acquired and enjoyed in the concept of owner can
serve as a title for acquiring dominion."

Although CEQUENA and LIRIO farmed the property for 32 years, they could not have acquired ownership
over it through prescription. It is settled that ownership cannot be acquired by mere occupation. Unless
coupled with the element of hostility toward the true owner, occupation and use, however long, will not
confer title by prescription or adverse possession.

Moreover, CEQUENA and LIRIO could not claim that their possession was public, peaceful and
uninterrupted. Although their father and brother arguably acquired ownership through extraordinary
prescription because of their adverse possession for 32 years (1953-1985), this supposed ownership
couldextend to the entire disputed lot, but must be limited to theportion that they actually farmed.

It was BOLANTE who had acquired the land by prescription.Being the sole heir of her father, BOLANTE
showed through his tax receipt that she had been in possession of the land for more than 10 years since
1932. When her father died in 1930, she continued to reside there with her mother. When she got
married, she and her husband engaged in kaingin inside the disputed lot for their livelihood.

BOLANTE's possession was not disturbed until 1953 when CEQUENA and LIRIO’S father claimed the land.
But by then, her possession, which was in the concept of owner -- public, peaceful, and uninterrupted --
had already ripened into ownership. Furthermore she herself, after her father's demise, declared and
paid realty taxes for the disputed land. Tax receipts and declarations of ownership for taxation, when
coupled with proof of actual possession of the property, can be the basis of a claim for ownership
through prescription.
ARTICLE 540

SPOUSES PHILIP RECTO and ESTER C. RECTO,


represented by their Attorney-in-fact, GENEROSO R. GENEROSO
vs.
REPUBLIC OF THE PHILIPPINES

G.R. No. 160421 October 4, 2004


Ynares-Santiago, J.:

Before one can register his title over a parcel of land, the applicant must show that – (a) he, by himself or
through his predecessors-in-interest, has been in open, continuous, exclusive and notorious possession
and occupation of the subject land under a bona fide claim of ownership since June 12, 1945 or earlier;
and (b) the land subject of the application is alienable and disposable land of the public domain.

FACTS:

In 1997, petitioner spouses Philip and Ester Recto filed an application for registration of title over a
23,209 square meter lot, known as Lot 806 of the Sto. Tomas Cadastre in Batangas under Presidential
Decree (P.D.) No. 1529, otherwise known as the Property Registration Decree. They also prayed in the
alternative that their petition for registration be granted pursuant to Commonwealth Act (C.A.) No. 141,
or the Public Land Act.

The SPOUSES RECTO alleged that they purchased said property in 1996 from sisters Rosita Medrana
Guevarra and Maria Medrana Torres for the amount of P6,943,534.40. The two, in turn, inherited the lot
from their deceased parents, Vicente and Eufemia Medrana. Maria, born in 1917, declared that since
1945, her father was already the owner of Lot 806. She became aware of her father’s possession of the
subject lot in the concept of owner in 1930 when she was 13 years of age. The possession of the subject
lot by the Medrana family prior to 1945 was corroborated by Rosita, who testified that in 1935 when
she was 13 years of age, she first came to know that her father was the owner of Lot 806. The sisters
added that during the lifetime of Vicente, he planted rice and corn on the lot with the help of their
tenant. After his demise, they continued to plant the same crops through hired farmers.

There being no opposition to the petition from any private individual, an Order of General Default was
issued by the trial court.

In 1998, the court a quo rendered a decision granting the petition for registration.

The Republic, represented by the Solicitor General appealed to the Court of Appeals contending that
petitioners failed to –
(1) offer in evidence the original tracing cloth plan of the land;
(2) prove possession of the lot for the period required by law;
and
(3) overthrow the presumption that subject property forms part of the public domain.
In 2003, the Court of Appeals reversed the decision of the trial court on the sole ground of failure to
offer in evidence the original tracing cloth plan of the land. Hence, this appeal.

ISSUE:

Whether the Medranas possessed the property in the concept of an owner so as to have acquired title
over it.

RULING:

YES. The Medranas possessed the property in the concept of an owner so as to have acquired title over
it. Hence, their successor-in-interest, the petitioners SPOUSES RECTO had been benefited by such
possession.

Before one can register his title over a parcel of land, the applicant must show that – (a) he, by himself
or through his predecessors-in-interest, has been in open, continuous, exclusive and notorious
possession and occupation of the subject land under a bona fide claim of ownership since June 12, 1945
or earlier; and (b) the land subject of the application is alienable and disposable land of the public
domain.

In the instant case, Rosita and Maria the predecessors-ininterest of the SPOUSES RECTO, categorically
testified that they, and prior to them their father, had been cultivating and possessing Lot 806 in the
concept of owners. Maria, having been born on in 1917, and Rosita in 1922, were 13 years of age when
they became aware of their family’s possession of Lot 806 in 1930 and 1935, respectively. At 13, they
were undoubtedly capable and competent to perceive their father’s possession of Lot 806 in the
concept of owner.

The fact that the earliest Tax Declaration of the subject lot was for the year 1948 will not militate against
petitioners. Note that said 1948 Tax Declaration cancels a previous Tax Declaration, thus substantiating
petitioners’ possession of Lot 806 through their predecessor-in-interest even prior to said date.

So also, there is no doubt that Lot 806 is an alienable land of the public domain having been released
and certified as such on in 1925. As further certified by the Community Environment and Natural
Resources Office of the DENR, the entire area of Lot 806 is an agricultural land; within an alienable and
disposable zone; not within a reservation area nor within a forest zone; and does not encroach upon an
established watershed, riverbed, and riverbank protection. The SPOUSES RECTO were thus able to
successfully meet the requisite for original registration of title,to wit: open, continuous, exclusive and
notorious possession and occupation of an alienable and disposable land under a bona fide claim of
ownership since June 12, 1945 or earlier.
ARTICLE 540

HEIRS OF CERILA GAMOS and RICARDO GALAG


vs.
Heirs of Juliano PRADO

G.R. No. 149117 December 16, 2004


Panganiban, J.:

The mere application for a patent, coupled with the fact of exclusive, open, continuous and notorious
possession for the required period is sufficient to vest in the applicant the grant applied for.

FACTS:

Juliana Frando, predecessor-in-interest of respondents HEIRS OF FRANDO, was in possession of a parcel


of agricultural land located in Sta. Magdalena, Sorsogon. Since 1925, Frando had planted several trees
and other plants thereon, including coconuts, pili, bananas and cacao.

In 1946, the property was traversed by a national road that effectively divided it into 2 portions, Lot Nos.
7 and 1855.

In 1952, Frando filed for an Insular Government Property Sales Application for the 2nd lot, Lot No. 1855,
which was the subject of a controversy later on. Upon inspection of the area by a representative of the
Bureau of Lands, it was found to be inside an agricultural zone, free from private claims and conflicts. In
1955, during the bid of the property, which was apprised at P240, Frando was the only bidder. Frando
then deposited P24, which represented 10% of the appraised value. The land was fully paid a year later
in 1956, when Frando paid the balance of P216. On the same day, an Order/Award was made in
Frando’s favor.

One of Frando’s two children, Paciencia Gallanosa-Fuellas, chose to settle in Manila. The other child,
Salvacion Gallanosa who was married to Abdon Gimpes (Gimpes spouses), however, continued
possession of the property. Sometime in 1940, The Gimpes spouses constructed their house on the
southwestern portion thereof. The couple also helped Frando in the administration of the land. The
Gimpes spouses’ children were also born on the property, where they also grew up. After theirParent’s
death, they continued possession of the land; and harvested and received the fruits of the
improvements for themselves and on behalf of their grandmother, Juliana Frando, even after her death
in 1971.

Purportedly unknown to the HEIRS OF Frando, in 1958, a cadastral survey of the Municipality of Sta.
Magdalena,Sorsogon, was conducted. Lot No. 1855 became the subject of a case and as a result, in
1969, a free patent was awarded to Cerila Gamos. On the basis of the free patent, an OCT was also
issued in her name. It was only in 1981 however that the HEIRS OF GAMOS took possession of the
property through entry, gathered its produce and built their houses thereon. In 1988, the heirs of
Frando filed with the RTC a Complaint against Cerila Gamos and the director of the Bureau of Lands.
They challenged the validity of the free patent and OCT issued to Cerila Gamos. They alleged that the
Bureau of Lands had no authority to award the patent covering an area it had earlier awarded to Juliana
Frando.

Cerila Gamos on the other hand, together with the HEIRS OF GAMOS alleged that they had been in
actual and open possession of the land as early as 1952. They also averred that the free patent title
issued in their favor, which was the basis of the subsequent issuance of the OCT was valid and lawful.

The Bureau of Lands however, rebutted that Juliana Frando failed to pay the balance price of P216.
Thus, she had not perfected the title over the land that the patent was not issued in her favor.

In 1998, the RTC rendered judgment in favor of the HEIRS OF FRANDO. The HEIRS OF GAMOS then,
appealed to the CA, which also affirmed the RTC decision.

ISSUE:

Whether the HEIRS OF FRANDO possessed the property in the concept of an owner.

RULING:

YES. The HEIRS OF FRANDO had possessed the property in the concept of an owner.

Juliana Frando had acquired the land through purchase from the government.

The allegation of the Bureau of Lands that Juliana Frando Clearly failed to pay the P216 balance of the
sale price was disproved by the Order/Award issued in her favor in 1956, which stated that she had
completed payment of the land.

Given the full payment of the purchase price as well as the compliance with all the requirements for the
grant of a sales patent, the Bureau had no reason to deny the issuance of such patent to Juliana Frando.
Her compliance with all the requirements effectively vested in her and her successors-in-interest an
equitable title to the property applied for.

Even without a patent, a perfected homestead is a propertyright in the fullest sense, unaffected by the
fact that the paramount title to the land is still in the Government. Thus, when the cadastral survey was
subsequently conducted in Sta. Magdalena in 1958, the disputed property -- already held in private
ownership -- was no longer part of the public domain. The director of lands had no more authority to
grant to a third person a patent covering the same tract that had already passed to private ownership.
Thus, the issuance of the free patent to Cerila Gamos, insofar as it encroached the portion already
granted to Frando, had no legal basis at all.

Notwithstanding the denial of the sales patent in favor of Juliana Frando, she had nevertheless acquired
the property byPrescription.
The denial of the sales patent notwithstanding, Juliana Frando is deemed to have acquired equitable
title to the property through open, continuous, exclusive and notorious possession of the property,
which was a disposable land of the public
domain.

In 1906, a Declaration of Real Property covering the property was issued to Basilio Frando, father of
Juliana Frando. Witness accounts of longtime residents of the adjoining properties confirmed her
possession for a period not later than 1925; and her introduction thereon of various trees and other
plants, including bananas, cacao, pili and coconuts.

They also attested to the continued possession of the property by Frando’s daughter, Salvacion Gimpes;
and subsequently by her children, herein private respondents HEIRS OF FRANDO. Aside from showing
the Order/Award, the children bolstered their claim by introducing in evidence several Tax Declarations,
sketch plans, survey returns and the reports of the court appointed commissioner.

While asserting possession of the property as early as 1952, petitioners had not presented any
document or witness to prove their bare claim. Moreover, Ambrosio Guatno -- one of herein petitioners
-- testified that he had entered the property upon the permission of Ricardo Galag, an heir of Gamos;
later, he admitted that its true owner was Juliana Frando.

Clearly, the mere application for a patent, coupled with the fact of exclusive, open, continuous and
notorious possession for the required period is sufficient to vest in the applicant the grant applied for. In
sum, the application by Juliana Frando for a sales patent, coupled with her open, exclusive,
uninterrupted and notorious possession of the land applied for is, for all purposes, equivalent to a
patent already perfected and granted.

The subsequent entry of petitioners and their occupation of the property in question was in bad faith,
given the prior possession thereof by private respondents.
Digested by: Kathleen Kaye M. Laurente

HEIRS OF MARCELINA ARZADON-CRISOLOGO, represented by Leticia C. del


Rosario, et.al vs.AGRIFINA RAÑON, substituted by SUZIMA RAÑON-DUTERTE, et
al.

G.R. No. 171068 September 5, 2007.


CHICO-NAZARIO, J

FACTS:
Respondent AgrifiniaRañontraced their claim of ownership from the year 1962 until
the filing of their Complaint for Ownership before the MCTC on October 18, 1995. To
support their possession, they rely on an Affidavit executed on October 19,
1962 byValentin Rañon claiming ownership over the subject property by virtue of an
alleged sale. The MCTC, the RTC and the Court of Appeals were unanimous in
declaring that the execution by Valentin Rañon of the Affidavit in 1962 was an express
repudiation ofpetitioners’ claim over the property. By virtue of such Affidavit,
respondents were able to cancel Tax Declaration No. 02853 in the name of petitioners’
predecessor-in-interest TimoteoAlcantara who was shown to have paid taxes on the
subject property in 1950.

Hence, in 1962, Tax Declaration No. 033062 was issued in the


name of Valentin Rañon. The same was subsequently cancelled by Tax Declaration No.
033106, which was in the name of his wife, Agrifina Rañon.

In 1977, however, petitioners’ predecessor-ininterest Marcelina Arzadon-Crisologo


filed an Adverse Claim and a Notice of Ownership claiming that the subject property
which is not yet registered in the Office of the Register of Deeds of Laoag City and the
tax declaration in the name of Valentin Rañon is for taxation purposes only; but that
they have been in possession of the said land publicly, peacefully and continuously
without any intervention or interruption for more than 15 years.

ISSUES:
Did the Notice of Adverse Claim filed by petitionersconstitute an effective
interruption since 1962 of respondents’ possession of the subject property?

HELD:
No. Article 1123 of the Civil Code is categorical. Civil interruption is
produced byjudicial summons to the possessor. Moreover, even with the
presence of judicial summons, Article 1124 sets limitations as to when such summons
shall not be deemed to have been issued and shall not give rise to interruption, to wit: 1)
if it should be void for lack of legal solemnities; 2) if the plaintiff should desist from the
complaint or should allow the proceedings to lapse; or 3) if the possessor should be
absolved from the complaint.

Both Article 1123 and Article 1124 of the Civil Code underscore the judicial
character ofcivil interruption. For civil interruption to take place, the possessor must
have received judicial summons. None appears in the case at bar. The
Notice of Adverse Claim which was filed by petitioners in 1977 is nothing more than a
notice of claim which did not effectively interrupt respondents’ possession. Such a
notice could not have produced civil interruption. The execution of the Notice ofAdverse
Claim in 1977 did not toll or interrupt the running of the prescriptive period because
there remains, as yet, a necessity for a judicial determination of its judicial validity. What
existed was merely a notice. There was no compliance with Article 1123 of the Civil
Code. What is striking is that no action was, in fact, filed by petitioners against
respondents. As a consequence, no judicial summons was received by respondents. As
aptly held by the Court ofAppeals in its affirmance of the RTC’s ruling, the
Notice of Adverse Claim cannot take the place of judicial summons which produces the
civil interruption provided for under the law. In the instant case, petitioners were not able
to interrupt respondents’ adverse possession since 1962. The period of acquisitive
prescription from 1962 continued to run in respondents’ favor despite the
Notice ofAdverse Claim.
Digested by: Kathleen Kaye M. Laurente

FERNANDA MENDOZA CEQUEÑA and RUPERTA MENDOZA LIRIO,


petitioners, vs.HONORATA MENDOZA BOLANTE, respondent.

G.R. No. 137944. April 6, 2000


PANGANIBAN, J.:

FACTS:
Prior to 1954, the land was originally declared for taxation purposes in the name of
Sinforoso Mendoza, father of respondent Honorata Mendoza Bolante and married to
EduardaApiado. Sinforoso died in 1930. Petitioners Fernanda and Ruperta were the
daughters of Margarito Mendoza. On the basis of an affidavit, the tax declaration in the
name of Sinforoso Mendoza of the contested lot was cancelled and subsequently
declared in the name of Margarito Mendoza. Margarito and Sinforoso are brothers.
Respondent Honorata is the present occupant of the land.

Earlier, on October 15, 1975, Honorata and Miguel Mendoza, another brother of
petitioners, during the cadastral survey had a dispute on [the] ownership of the land.

ISSUE:
Whether or not the respondent is legally presumed to possess the subject land
with a just title since she possessed it in the concept of owner, and she could not be
obliged to show or prove such title (Article 541).

HELD:
No. The respondent’s contention is untenable. The presumption in Article 541 of
the Civil Code is merely disputable; it prevails until the contrary is proven. That is, one
who is disturbed in one’s possession shall, under this provision, be restored thereto by
the means established by law. Article 538 settles only the question of possession, and
possession is different from ownership. Ownership in this case should be established in
one of the ways provided by law.

However, to settle the issue of ownership, the Supreme Court held the need to
determine who between the claimants has proven acquisitive prescription.

Ownership of immovable property is acquired by ordinary prescription through’


possession for ten years. Being the sole heir of her father, respondent showed through
his tax receipt that she had been in possession of the land for more than ten years since
1932. When her father died in 1930, she continued to reside there with her mother.
When she got married, she and her husband engaged in kaingin inside the disputed lot
for their livelihood.Respondent’s possession was not disturbed until 1953 when the
petitioners’ father claimed the land. But by then, her possession, which was in the
concept of owner—public, peaceful, and uninterrupted—had already ripened into
ownership. Furthermore she herself, after her father’s demise, declared and paid realty
taxes for the disputed land. Tax receipts and declarations of ownership for taxation,
when coupled with proof of actual possession of the property, can be the basis of a
claim for ownership through prescription.

In contrast, the petitioners, despite thirty-two years of farming the subject land, did
not acquire ownership. It is settled that ownership cannot be acquired by mere
occupation. Unless coupled with the element of hostility toward the true
owner, occupation and use, however long, will not confer title by prescription or adverse
possession. Moreover, the petitioners cannot claim that their possession was public,
peaceful and uninterrupted. Although their father and brother arguably acquired
ownership through extraordinary prescription because of their adverse possession for
thirty-two years (1953-1985), this supposed ownership cannot extend to the entire
disputed lot, but must be limited to the portion that they actually farmed.
Digested by: Kathleen Kaye M. Laurente

MARIO Z. TITONG, petitioner, vs. THE HONORABLE COURT OF APPEALS (4th


Division), VICTORICO LAURIO and ANGELES LAURIO, respondents.

G.R. No. 111141 March 6, 1998


ROMERO, J

FACTS:
The case originated from an action for quieting of title filed by
petitioner MarioTitong. The Regional Trial Court and Court of Appeals ruled in
favor of private respondents, VictoricoLaurio and Angeles Laurio, adjudging them as the
true and lawful owners of the disputed land.

Private respondent testified before the court that petitioner is one of the four
heirs of his mother, Leonida Zaragoza. In the Extrajudicial Settlement with
Sale of Estate of the deceased Leonida Zaragoza, the heirs adjudicated unto
themselves the 3.6hectare property of the deceased. However, instead of reflecting only
.9000 hectare as his rightful share in the extrajudicial settlementpetitioner’s share was
bloated to 2.4 hectares. It therefore appeared to private respondent that petitioner
encroached upon his (Laurio’s) property and declared it a part of his inheritance.

ISSUE:
Whether or not the action of quieting of title filed by petitioner is proper

HELD:
No. At the outset, the Supreme Court held that the instant petition must be denied for
the reason that the lower court should have outrightly dismissed the complaint for
quieting of title. The remedy of quieting of title may be availed of under the
circumstances enumerated in the Civil Code:

“ART. 476. Whenever there is a cloud on title to real property or any interest therein,
by reason of any instrument, record, claim, encumbrance or proceeding which is
apparently valid or effective but is in truth and in fact invalid, ineffective, voidable, or
unenforceable, and may be prejudicial to said title, an action may be brought to
remove such cloud or to quiet the title.

An action may also be brought to prevent a cloud from being cast upon title to real
property or any interest therein.”

Under this provision, a claimant must show that there is an instrument, record,
claim, encumbrance or proceeding which constitutes or casts a cloud, doubt, question
or shadow upon the owner’s title to or interest in real property. The ground or reason for
filing a complaint for quieting of title must therefore be “an instrument, record, claim,
encumbrance or proceeding.” Under the maxim expresiouniusestexclusioalterius, these
grounds are exclusive so that other reasons outside of the purview of these reasons
may not be considered valid for the same action.

Had the lower court thoroughly considered the complaint filed, it would have had
no other course of action under the law but to dismiss it. The complaint failed to allege
that an “instrument, record, claim, encumbrance or proceeding” beclouded the plaintiff’s
title over the property involved. Petitioner merely alleged that the defendants
(respondents herein), together with their hired laborers and without legal justification,
forcibly entered the southern portion of the land of the plaintiff and plowed the same.

He then proceeded to claim damages and attorney’s fees. He prayed that, aside from
issuing a writ or preliminary injunction enjoining private respondents and their hired
laborers from intruding into the land, the court should declare him “the true and absolute
owner” thereof. Hence, through his allegations, what petitioner imagined as clouds cast
on his title to the property were private respondents’ alleged acts of physical intrusion
into his purported property. Clearly, the acts alleged may be considered grounds for an
action for forcible entry but definitely not one for quieting of title.
Digested by: Kathleen Kaye M. Laurente

VERONA PADA-KILARIO and RICARDO KILARIO,


petitioners, vs. COURT OFAPPEALS and SILVERIO PADA, respondents.

G.R. No. 134329 January 19, 2000


DE LEON, JR., J.

FACTS:
One Jacinto Pada died intestate. His estate included a parcel of land of residential
and coconut land. During the lifetime of Jacinto Pada, his half-brother, Feliciano Pada,
obtained permission from him to build a house on the northern portion of Cadastral Lot
No. 5581. When Feliciano died, his son, Pastor, continued living in the house together
with his eight children. Petitioner Verona Pada-Kilario, one of Pastor’s children, has
been living in that house since 1960.

Sometime in May, 1951, the heirs of Jacinto Pada entered into an extra-judicial
partition of his estate. On November 17, 1993, Maria Pada to sell the co-ownership
right of his father, Marciano. Private respondent, who is the first cousin of Maria, was
the buyer. Thereafter, private respondent demanded that petitioner spouses vacate the
northern portion of Cadastral Lot No. 5581 so his family can utilize the said area. They
went through a series of meetings with the barangay officials concerned for the
purpose of amicable settlement, but all earnest efforts toward that end, failed.

On July 24, 1995, the heirs of Amador Pada, executed a Deed of Donation
transferring to petitioner Verona Pada-Kilario, their respective shares as co-owners. On
February 12, 1996, petitioner spouses filed their Answer averring that the northern
portion had already been donated to them. They contended that the extra-judicial
partition of the estate of Jacinto Pada executed in 1951 was invalid and ineffectual since
no special power of attorney was executed.

ISSUE:
Whether or not petitioners are builders and possessors in good faith

HELD:
No. Considering that petitioners were in possession of the subject property by
sheer tolerance of its owners, they knew that their occupation of the premises may be
terminated any time. Persons who occupy the land of another at the latter’s tolerance or
permission, without any contract between them, is necessarily bound by an implied
promise that they will vacate the same upon demand, failing in which a summary action
for ejectment is the proper remedy against them. Thus, they cannot be considered
possessors nor builders in good faith.

It is well-settled that both Article 448 and Article546 of the New Civil Code which
allow full reimbursement of useful improvements and retention of the premises until
reimbursement is made, apply only to a possessor in good faith, i.e., one who builds on
land with the belief that he is the owner thereof. Verily, persons whose occupation of a
realty is by sheer tolerance of its owners are not possessors in good faith. Neither did
the promise of Concordia, Esperanza and AngelitoPada that they were going to donate
the premises to petitioners convert them into builders in good faith for at the time the
improvements were built on the premises, such promise was not yet fulfilled, i.e., it was
a mere expectancy of ownership that may or may not be realized. More importantly,
even as that promise was fulfilled, the donation is void for Concordia, Esperanza and
AngelitoPada were not the owners ofCadastral Lot No. 5581. As such, petitioners
cannot be said to be entitled to the value of the improvements that they built on the said
lot.
Digested by: Kathleen Kaye M. Laurente

JOSE L. CHUA and CO SIO ENG, petitioners, vs. THE


HONORABLE COURT OFAPPEALS and RAMON IBARRA, respondents.
G.R. No. 109840 January 21, 1999
MENDOZA, J

FACTS:
Petitioners Jose Chua and Co SioEng were lessees of a commercial unit at No. 3086
Redemptorist Street in Baclaran, Parañaque, Metro Manila. The lease was for a
period of five (5) years, from January 1, 1985 to December 31, 1989. The contract
expressly provided for the renewal of the lease at the option of the lessees “in
accordance with the terms of agreement and conditions set by the lessor.” Prior to the
expiration of the lease, the parties discussed the possibility of renewing it. They
exchanged proposal and counterproposal, but they failed to reach agreement. The
dispute was referred to the barangay captain for conciliation but still no settlement was
reached by the parties.

On July 24, 1990, private respondent filed a complaint for unlawful detainer
against petitioners because they refused to leave the premises due to the repairs and
improvements they made in the commercial unit. However, MTC and RTC affirmed the
ejectment of petitioners from the premises owned by private respondent.

ISSUE:
Should lessees be granted a right to retention over leased premises because they
are builders of good faith?

HELD:
No. The fact that petitioners allegedly made repairs on the premises in question is
not a reason for them to retain the possession of the premises. There is no
provision of law which grants the lessee a right of retention over the leased premises on
that ground.

Art. 448 of the Civil Code, in relation to Art. 546, which provides for full
reimbursement of useful improvements and retention of the premises until
reimbursement is made, applies only to a possessor in good faith, i.e., one who builds
on a land in the belief that he is the owner thereof. In a number of cases, the Court has
held that this right does not apply to a mere lessee, like the petitioners, otherwise, it
would always be in his power to “improve” his landlord out of the latter’s property.

Art. 1678 merely grants to such a lessee making in good faith useful improvements
the right to be reimbursed one-half of the value of the improvements upon the
termination of the lease, or, in the alternative, to remove the improvements if the lessor
refuses to make reimbursement.
Digested by: Kathleen Kaye M. Laurente

ERMINDA F. FLORENTINO, petitioner, vs. SUPERVALUE, INC., respondent.

G.R. No. 172384. September 12, 2007


CHICO-NAZARIO, J
FACTS:
Petitioner is doing business under the business name “Empanada Royale,” a sole
proprietorship engaged in the retail of empanada with outlets in different malls and
business establishments within Metro Manila. Respondent, on the other hand, is a
domestic corporation engaged in the business of leasing stalls and commercial store
spaces located inside SM Malls found all throughout the country.

On 8 March 1999, petitioner and respondent executed three Contracts of Lease


containing similar terms and conditions over the cart-type stalls at SM North Edsa and
SM Southmall and a store space at SM Megamall. The term of each contract is for a
period of four months and may be renewed upon agreement of the parties.

Upon the expiration of the original Contracts of Lease, the parties agreed to renew
the same by extending their terms until 31 March 2000. Before the expiration of said
Contracts of Lease, or on 4 February 2000, petitioner received two letters from the
respondent, due to its breach of contract.

ISSUE:
Whether or not the respondent is liable to reimburse the petitioner for the sum of
the improvements she introduced in the leased premises.

HELD:
No. In ruling that the respondent is liable to reimburse petitioner one half of the
amount of improvements made on the leased store space should it choose to
appropriate the same, the RTC relied on the provision of Article 1678 of the Civil Code
which provides:
“Art. 1678. If the lessee makes, in good faith, useful improvements which are
suitable to the use for which the lease is intended, without altering the form or
substance of the property leased, the lessor upon the termination of the lease shall
pay thelessee one-half of the value of the improvements at that time. Should the
lessor refuse to reimburse said amount, the lessee may remove the
improvements, even though the principal thing may suffer damage thereby. He
shall not, however, cause any more impairment upon the property leased than is
necessary.”

While it is true that under the above-quoted provision of the Civil Code, the lessor
is under the obligation to pay the lessee one-half of the value of the improvements
made should the lessor choose to appropriate the improvements, Article 1678 however
should be read together with Article 448 and Article 546 of the same statute, which
provide:
“Art. 448. The owner of the land on which anything has been built, sown or planted in
good faith, shall have the right to appropriate as his own the works, sowing or
planting, after payment of the indemnity provided for in articles 546 and 548, or to
oblige the one who built or planted to pay the price of the land, and the one who
sowed, the proper rent. However, the builder or planter cannot be obliged to buy the
land if its value is considerably more than that of the building or trees. In such case,
he shall pay reasonable rent, if the owner of the land does not choose to appropriate
the building or trees after proper indemnity. The parties shall agree upon the terms of
the lease and in case of disagreement, the court shall fix the terms thereof.
xxxx

Art. 546. Necessary expenses shall be refunded to every possessor; but only
possessor in good faith may retain the thing until he has been reimbursed therefor.

Useful expenses shall be refunded only to the possessor in good faith with the same
right of retention, the person who has defeated him in the possession having the option
of refunding the amount of the expenses or of paying the increase in value which the
thing may have acquired by reason thereof.”
Thus, to be entitled to reimbursement for improvements introduced on the property, the
petitioner must be considered a builder in good faith. Further, Articles 448 and 546 of
the Civil Code, which allow full reimbursement of useful improvements and retention of
the premises until reimbursement is made, apply only to a possessor in good
faith, i.e., one who builds on land with the belief that he is the owner thereof. A builder in
good faith is one who is unaware of any flaw in his title to the land at the time he builds
on it. In this case, the petitioner cannot claim that she was not aware of any flaw in her
title or was under the belief that she is the owner of the subject premises for it is a
settled fact that she is merely a lessee thereof.
Digested by: Jhon Dave L. Macatol

ROGELIA DACLAG,et al vs. ELINO MACAHILIG, et al

G.R. No. 159578 February 18, 2009

AUSTRIA-MARTINEZ, J.:

Facts:

Maxima Macahilig, is one of the 7 children of Candidoand Gregoria (both dead), who executed a
Deed of Extra-Judicial partition with the heirs of her now deceased siblings. In 1982, Maxima entered into
She later executed a Statement of Conformity, confirming: 1. the proper execution of the Deed of Extra-
Judicial Partition; 2. that five parcels [one of which being Parcel One, the lot in question] of land in the
deed were declared in her name for taxation purposes, although said lands were actually the property of
her deceased parents Candido and GregoriaMacahilig.

In 1984, Maxima sold Parcel One to spouses Adelino and RogeliaDaclag (petitioners) as
evidenced by a Deed of Sale. Objecting to the sale, Macahilig heirs filed a complaint for recovery of
possession and ownership, cancellation of documents and damages against Maxima and the buyers
contending that Maxima had no right to sell the land in question. Respondents alleged that they were the
lawful owners and previous possessors of the one half northern portion of Parcel One by virtue of a Deed
of Extra-judicial Partition; that since they were all residents of Caloocan City, their land was possessed by
their first cousin, PeniculaDivisonQuijano, Maxima's daughter, as tenant thereon, as she was also in
possession of the one half southern portion as tenant of the heirs of Mario Macahilig; that sometime in
1983, upon request of Maxima and out of pity for her as she had no share in the produce of the land,
Penicula allowed Maxima to farm the land; that without their knowledge, Maxima illegally sold on May 23,
1984, the entire riceland to petitioners, who are now in possession of the land, depriving respondents of
its annual produce Petitioners objected the action as Rogelia had been the registered owner of the entire
riceland since 1984 as evidenced by OCT No. P-13873; her title had become incontrovertible after one
year from its issuance; they purchased the subject land in good faith and for value from co-defendant
Maxima who was in actual physical possession of the property and who delivered and conveyed the
same to them; they were now in possession and usufruct of the land since then up to the present;
respondents were barred by laches for the unreasonable delay in filing the case.

Issue:

Is a possessor in good faith is entitled to the fruits received before the possession is legally
interrupted; thus, if indeed petitioners are jointly and severally liable to respondents for the produce of the
subject land, is the liability should be reckoned only for 1991 and not 1984 under Article 544?

Held:

Yes, the petitioners are entitled to the fruits until such possession had been legally interrupted
and the reckoning point was when the petitioners received the summon on August 5, 1991.

Article 528 of the Civil Code provides that possession acquired in good faith does not lose this
character, except in a case and from the moment facts exist which show that the possessor is not
unaware that he possesses the thing improperly or wrongfully. Possession in good faith ceases from the
moment defects in the title are made known to the possessors, by extraneous evidence or by suit for
recovery of theproperty by the true owner. Whatever may be the cause or the fact from which it can be
deduced that the possessor has knowledge of the defects of his title or mode of acquisition, it must be
considered sufficient to show bad faith.Such interruption takes place upon service of summons.
Article 544 of the same Code provides that a possessor in good faith is entitled to the fruits only
so long as his possession is not legally interrupted.

In this case, records show that petitioners received a summons together with respondents'
complaint on August 5, 1991; thus, petitioners' good faith ceased on the day they received the summons.
Consequently, petitioners should pay respondents 10 cavans of palay per annum beginning August 5,
1991 instead of 1984.
Digested by: Jhon Dave L. Macatol

HEIRS OF THE LATE JOAQUIN LIMENSE, namely: CONCESA LIMENSE, et alvsRITA VDA. DE
RAMOS, et al

G.R. No. 152319 October 28, 2009

PERALTA, J.,

Facts:

DalmacioLozada was the registered owner of a parcel of land identified as Lot No. 12, Block No.
1074 of the cadastral survey of the City of Manila covered by Original Certificate of Title (OCT) No. 7036
issued on June 14, 1927, containing an area of 873.80 square meters, more or less, located in Beata
Street, Pandacan, Manila.

DalmacioLozada subdivided his property into five (5) lots, namely: Lot Nos. 12-A, 12-B, 12-C, 12-
D and 12-E. On March 9, 1932, he donated the subdivided lots to his daughtersin the following manner:

a. Lot No. 12-A in favor of Isabel Lozada, married to Isaac Limense;


b. Lot No. 12-B in favor of Catalina Lozada, married to Sotero Natividad;
c. Lot No. 12-C in favor of Catalina Lozada, married to Sotero Natividad; Isabel Lozada, married
to Isaac Limense; and Salud Lozada, married to Francisco Ramos, in equal parts;
d. Lot No. 12-D in favor of SaludLozada, married to Francisco Ramos; and
e. Lot No. 12-E in favor of Isabel Lozada, married to Isaac Limense, and FelicidadLozada,
married to Galicano Centeno.

TCT No. 40043, which covered Lot No. 12-C, was issued in the name of its co-owners Catalina
Lozada, married to SoteroNatividad; Isabel Lozada, married to Isaac Limense; and SaludLozada, married
to Francisco Ramos. It covered an area of 68.60 square meters, more or less, was bounded on the
northeast by Lot No. 12-A, on the southwest by CalleBeata, and on the northwest by Lot No. 12-D of the
subdivision plan. In 1932, respondents' predecessor-in-interest constructed their residential building on
Lot No. 12-D, adjacent to Lot No. 12-C.

On May 16, 1969, TCT No. 96886 was issued in the name of Joaquin Limense covering the very
same area of Lot No. 12-C.On October 1, 1981, Joaquin Limense secured a building permit for the
construction of a hollow block fence on the boundary line between his aforesaid property and the
adjacent parcel of land located at 2759 Beata Street, Pandacan, Manila, designated as Lot No. 12-D,
which was being occupied by respondents. The fence, however, could not be constructed because a
substantial portion of respondents' residential building in Lot No. 12-D encroached upon portions of
Joaquin Limense's property in Lot No. 12-C.

Joaquin Limense demanded the removal of the encroached area; however, respondent ignored
both oral and written demands. On March 9, 1983, Joaquin Limense, duly represented by his Attorney-in-
Fact, Teofista L. Reyes, instituted a Complaintagainst respondents before the Regional Trial Court (RTC)
for removal of obstruction and damages.Joaquin Limense prayed that the RTC issue an order directing
respondents, jointly and severally, to remove the portion which illegally encroached upon his property on
Lot No. 12-C and, likewise, prayed for the payment of damages, attorney’s fees and costs of suit.

Respondents, on the other hand, averred in their Answer that they were the surviving heirs of
Francisco Ramos, who, during his lifetime, was married to SaludLozada, one of the daughters of
DalmacioLozada, the original owner of Lot No. 12. After subdividing the said lot, DalmacioLozada
donated Lot No. 12-C in favor of his daughters Catalina, married to SoteroNatividad; Isabel, married to
Isaac Limense; and Salud, married to Francisco Ramos. Being the surviving heirs of Francisco Ramos,
respondents later became co-owners of Lot No. 12-C. Lot No. 12-C has served as right of way or
common alley of all the heirs of DalmacioLozada since 1932 up to the present. As a common alley, it
could not be closed or fenced by Joaquin Limense without causing damage and prejudice to
respondents.

Issue:

Are the petitioners have the right to appropriate the portion of the house of the respondents upon
payment of indemnity to the latter?

Held:

Yes, petitioners have the right to appropriate said portion of the house of respondents upon
payment of indemnity to respondents, as provided for in Article 546 of the Civil Code.Respondents are
builders in good faith.

Articles 448 and 546 of the New Civil Code provide:

Art. 448. The owner of the land on which anything has been built, sown or planted
in good faith, shall have the right to appropriate as his own the works, sowing or planting,
after payment of the indemnity provided for in Articles 546 and 548, or to oblige the one
who built or planted to pay the price of the land, and the one who sowed, the proper rent.
However, the builder or planter cannot be obliged to buy the land if its value is
considerably more than that of the building or trees. In such case, he shall pay
reasonable rent, if the owner of the land does not choose to appropriate the building or
trees after proper indemnity. The parties shall agree upon the terms of the lease and, in
case of disagreement, the court shall fix the terms thereof.

Art. 546. Necessary expenses shall be refunded to every possessor; but only the
possessor in good faith may retain the thing until he has been reimbursed therefor.

Useful expenses shall be refunded only to the possessor in good faith with the same right
of retention, the person who has defeated him in the possession having the option of
refunding the amount of the expenses or of paying the increase in value which the thing
may have acquired by reason thereof.

In Spouses Del Campo v. Abesia, this provision was applied to one whose house, despite having
been built at the time he was still co-owner, overlapped with the land of another. In that case, this Court
ruled:

The court a quo correctly held that Article 448 of the Civil Code cannot apply where a co-
owner builds, plants or sows on the land owned in common for then he did not build, plant
or sow upon the land that exclusively belongs to another but of which he is a co-owner.
The co-owner is not a third person under the circumstances, and the situation is
governed by the rules of co-ownership.

However, when, as in this case, the ownership is terminated by the partition and it
appears that the house of defendants overlaps or occupies a portion of 5 square meters
of the land pertaining to plaintiffs which the defendants obviously built in good faith, then
the provisions of Article 448 of the new Civil Code should apply. x x x

In other words, when the co-ownership is terminated by a partition, and it appears that the house
of an erstwhile co-owner has encroached upon a portion pertaining to another co-owner, but the
encroachment was in good faith, then the provisions of Article 448 should apply to determine the
respective rights of the parties. In this case, the co-ownership was terminated due to the transfer of the
title of the whole property in favor of Joaquin Limense.
Under the foregoing provision, petitioners have the right to appropriate said portion of the house
of respondents upon payment of indemnity to respondents, as provided for in Article 546 of the Civil
Code. Otherwise, petitioners may oblige respondents to pay the price of the land occupied by their
house. However, if the price asked for is considerably much more than the value of the portion of the
house of respondents built thereon, then the latter cannot be obliged to buy the land. Respondents shall
then pay the reasonable rent to petitioners upon such terms and conditions that they may agree. In case
of disagreement, the trial court shall fix the terms thereof. Of course, respondents may demolish or
remove the said portion of their house, at their own expense, if they so decide.

The choice belongs to the owner of the land, a rule that accords with the principle of accession
that the accessory follows the principal and not the other way around. Even as the option lies with the
landowner, the grant to him, nevertheless, is preclusive. He must choose one. He cannot, for instance,
compel the owner of the building to instead remove it from the land.

The obvious benefit to the builder under this article is that, instead of being outrightly ejected from
the land, he can compel the landowner to make a choice between two options: (1) to appropriate the
building by paying the indemnity required by law, or (2) to sell the land to the builder.

The raison detre for this provision has been enunciated, thus:

Where the builder, planter or sower has acted in good faith, a conflict of rights arises
between the owners, and it becomes necessary to protect the owner of the improvements
without causing injustice to the owner of the land. In view of the impracticability of
creating a state of forced co-ownership, the law has provided a just solution by giving the
owner of the land the option to acquire the improvements after payment of the proper
indemnity, or to oblige the builder or planter to pay for the land and the sower the proper
rent. He cannot refuse to exercise either option. It is the owner of the land who is
authorized to exercise the option, because his right is older, and because, by the principle
of accession, he is entitled to the ownership of the accessory thing.
Digested by: Jhon Dave L. Macatol

LUCIANO BRIONES and NELLY BRIONES vsJOSE MACABAGDAL, FE D. MACABAGDAL et al

G.R. No. 150666 August 3, 2010

VILLARAMA, JR., J.:


Facts:

Respondent-spouses purchased from Vergon Realty Investments Corporation (Vergon) Lot No.
2-R, a 325-square-meter land located in Vergonville Subdivision No. 10 at Las Pias City, Metro Manila
and covered by Transfer Certificate of Title No. 62181 of the Registry of Deeds of Pasay City. On the
other hand, petitioners are the owners of Lot No. 2-S, which is adjacent to Lot No. 2-R.

Sometime in 1984, after obtaining the necessary building permit and the approval of Vergon,
petitioners constructed a house on Lot No. 2-R which they thought was Lot No. 2-S. After being informed
of the mix up by Vergons manager, respondent-spouses immediately demanded petitioners to demolish
the house and vacate the property.Petitioners, however, refused to heed their demand. Thus,
respondent-spouses filed an action to recover ownership and possession of the said parcel of land with
the RTC of Makati City.

Petitioners insisted that the lot on which they constructed their house was the lot which was
consistently pointed to them as theirs by Vergons agents over the seven (7)-year period they were paying
for the lot. They interposed the defense of being buyers in good faith and impleaded Vergon as third-party
defendant claiming that because of the warranty against eviction, they were entitled to indemnity from
Vergon in case the suit is decided against them.

Issue:

Are petitioners in good faith; and if so, do they have the right to be indemnified for the necessary
and useful expenses they may have made on the subject property?

Held:

Yes, the petitioners are in good faith and they have the right to be indemnified for the necessary
and useful expenses they may have made on the subject property.

Article 527 of the Civil Code presumes good faith, and since no proof exists to show that the
mistake was done by petitioners in bad faith, the latter should be presumed to have built the house in
good faith.When a person builds in good faith on the land of another, Article 448 of the Civil
Code governs:

ART. 448. The owner of the land on which anything has been built, sown or planted in
good faith, shall have the right to appropriate as his own the works, sowing or planting,
after payment of the indemnity provided for in Articles 546 and 548, or to oblige the one
who built or planted to pay the price of the land, and the one who sowed, the proper
rent. However, the builder or planter cannot be obliged to buy the land if its value is
considerably more than that of the building or trees. In such case, he shall pay
reasonable rent, if the owner of the land does not choose to appropriate the building or
trees after proper indemnity. The parties shall agree upon the terms of the lease and in
case of disagreement, the court shall fix the terms thereof. (Emphasis ours.)

The above-cited article covers cases in which the builders, sowers or planters believe themselves
to be owners of the land or, at least, to have a claim of title thereto.The builder in good faith can compel
the landowner to make a choice between appropriating the building by paying the proper indemnity or
obliging the builder to pay the price of the land. The choice belongs to the owner of the land, a rule that
accords with the principle of accession, i.e., that the accessory follows the principal and not the other way
around. However, even as the option lies with the landowner, the grant to him, nevertheless, is
preclusive. He must choose one. He cannot, for instance, compel the owner of the building to remove the
building from the land without first exercising either option. It is only if the owner chooses to sell his land,
and the builder or planter fails to purchase it where its value is not more than the value of the
improvements, that the owner may remove the improvements from the land. The owner is entitled to such
remotion only when, after having chosen to sell his land, the other party fails to pay for the same.

Moreover, petitioners have the right to be indemnified for the necessary and useful expenses they
may have made on the subject property. Articles 546 and 548 of the Civil Code provide,

ART. 546. Necessary expenses shall be refunded to every possessor; but only the
possessor in good faith may retain the thing until he has been reimbursed therefor.
Useful expenses shall be refunded only to the possessor in good faith with the same right
of retention, the person who has defeated him in the possession having the option of
refunding the amount of the expenses or of paying the increase in value which the thing
may have acquired by reason thereof.
ART. 548. Expenses for pure luxury or mere pleasure shall not be refunded to the
possessor in good faith; but he may remove the ornaments with which he has
embellished the principal thing if it suffers no injury thereby, and if his successor in the
possession does not prefer to refund the amount expended.

Consequently, the respondent-spouses have the option to appropriate the house on the subject
land after payment to petitioners of the appropriate indemnity or to oblige petitioners to pay the price of
the land, unless its value is considerably more than the value of the structures, in which case petitioners
shall pay reasonable rent.
Digested by: Jhon Dave L. Macatol

MARIA TORBELA, represented by her heirs, namely: EULOGIO TOSINO, et al vsSPOUSES


ANDRES T. ROSARIOand LENA DUQUE-ROSARIO et al

G.R. No. 140528December 7, 2011

LEONARDO-DE CASTRO, J.:

Facts:

The controversy began with a parcel of land, with an area of 374 square meters, located in
Urdaneta City, Pangasinan (Lot No. 356-A). It was originally part of a larger parcel of land, known as Lot
No. 356 of the Cadastral Survey of Urdaneta, measuring 749 square meters, and covered by Original
Certificate of Title (OCT) No. 16676, in the name of ValerianoSemilla (Valeriano), married to Potenciana
Acosta. Under unexplained circumstances, Valeriano gave Lot No. 356-A to his sister Marta Semilla,
married to Eugenio Torbela (spouses Torbela). Upon the deaths of the spouses Torbela, Lot No. 356-A
was adjudicated in equal shares among their children, the Torbela siblings, by virtue of a Deed of
Extrajudicial Partitiondated December 3, 1962.

On December 12, 1964, the Torbela siblings executed a Deed of Absolute Quitclaim over Lot No.
356-A in favor of Dr. Rosario. According to the said Deed, the Torbela siblings for and in consideration of
the sum of NINE PESOS (P9.00) Four days later, on December 16, 1964, OCT No. 16676 in Valerianos
name was partially cancelled as to Lot No. 356-A and TCT No. 52751 was issued in Dr. Rosarios name
covering the said property.

Another Deed of Absolute Quitclaim was subsequently executed on December 28, 1964, this time
by Dr. Rosario, acknowledging that he only borrowed Lot No. 356-A from the Torbela siblings and was
already returning the same to the latter for P1.00. However, TCT no. 52751 was still in the name of Dr.
Rosario. He used such title to obtain a loan from DBP. After the loan was granted, he constructed
buildings and improvements on the subject property. Hospital was first erected thereon and subsequently
constructed buildings for commercial purposes.

Upon finding that Dr. Rosario had been receiving rents from the commercial building and had
been receiving proceeds from the structures erected on the land, the Torbela siblings filed a case and
claim ownership not only the land but as well as the buildings constructed thereon. Dr. Rosario opposed
such petition and claim right over the improvements he made on the disputed property.

Issue:

Are Torbela siblings (as landowners) and Dr. Rosario (as builder) are deemed in bad faith? And
if so, what are their entitlements as regards the expenses?

Held:

Yes, Torbela siblings and Dr. Rosario are in good faith because they were both in bad faith.
Their entitlement is the same that of good faith under Art 448.

The accessory follows the principal. The right of accession is recognized under Article 440 of the
Civil Code which states that the ownership of property gives the right by accession to everything which is
produced thereby, or which is incorporated or attached thereto, either naturally or artificially.

There is no question that Dr. Rosario is the builder of the improvements on Lot No. 356-A. The
Torbela siblings themselves alleged that they allowed Dr. Rosario to register Lot No. 356-A in his name
so he could obtain a loan from DBP, using said parcel of land as security; and with the proceeds of the
loan, Dr. Rosario had a building constructed on Lot No. 356-A, initially used as a hospital, and then later
for other commercial purposes. Dr. Rosario supervised the construction of the building, which began in
1965; fully liquidated the loan from DBP; and maintained and administered the building, as well as
collected the rental income therefrom, until the Torbela siblings instituted Civil Case No. U-4359 before
the RTC on February 13, 1986.

When it comes to the improvements on Lot No. 356-A, both the Torbela siblings (as landowners)
and Dr. Rosario (as builder) are deemed in bad faith. The Torbela siblings were aware of the construction
of a building by Dr. Rosario on Lot No. 356-A, while Dr. Rosario proceeded with the said construction
despite his knowledge that Lot No. 356-A belonged to the Torbela siblings. This is the case contemplated
under Article 453 of the Civil Code, which reads:

ART. 453. If there was bad faith, not only on the part of the person who built, planted or
sowed on the land of another, but also on the part of the owner of such land, the rights
of one and the other shall be the same as though both had acted in good faith.

It is understood that there is bad faith on the part of the landowner whenever the act was
done with his knowledge and without opposition on his part. (Emphasis supplied.)

When both the landowner and the builder are in good faith, the following rules govern:

ART. 448. The owner of the land on which anything has been built, sown or planted in
good faith, shall have the right to appropriate as his own the works, sowing or planting,
after payment of the indemnity provided for in articles 546 and 548, or to oblige the one
who built or planted to pay the price of the land, and the one who sowed, the proper
rent. However, the builder or planter cannot be obliged to buy the land if its value is
considerably more than that of the building or trees. In such case, he shall pay
reasonable rent, if the owner of the land does not choose to appropriate the building or
trees after proper indemnity. The parties shall agree upon the terms of the lease and in
case of disagreement, the court shall fix the terms thereof.

ART. 546. Necessary expenses shall be refunded to every possessor; but only the
possessor in good faith may retain the thing until he has been reimbursed therefor.

Useful expenses shall be refunded only to the possessor in good faith with the same right
of retention, the person who has defeated him in the possession having the option of
refunding the amount of the expenses or of paying the increase in value which the thing
may have acquired by reason thereof.

ART. 548. Expenses for pure luxury or mere pleasure shall not be refunded to the
possessor in good faith; but he may remove the ornaments with which he has
embellished the principal thing if it suffers no injury thereby, and if his successor in the
possession does not prefer to refund the amount expended.

Whatever is built, planted, or sown on the land of another, and the improvements or repairs made
thereon, belong to the owner of the land. Where, however, the planter, builder, or sower has acted in
good faith, a conflict of rights arises between the owners and it becomes necessary to protect the owner
of the improvements without causing injustice to the owner of the land. In view of the impracticability of
creating what Manresa calls a state of "forced co-ownership," the law has provided a just and equitable
solution by giving the owner of the land the option to acquire the improvements after payment of the
proper indemnity or to oblige the builder or planter to pay for the land and the sower to pay the proper
rent. It is the owner of the land who is allowed to exercise the option because his right is older and
because, by the principle of accession, he is entitled to the ownership of the accessory thing.

The landowner has to make a choice between appropriating the building by paying the proper
indemnity or obliging the builder to pay the price of the land. But even as the option lies with the
landowner, the grant to him, nevertheless, is preclusive. He must choose one. He cannot, for instance,
compel the owner of the building to remove the building from the land without first exercising either
option. It is only if the owner chooses to sell his land, and the builder or planter fails to purchase it where
its value is not more than the value of the improvements, that the owner may remove the improvements
from the land. The owner is entitled to such remotion only when, after having chosen to sell his land, the
other party fails to pay for the same.

Still following the rules of accession, civil fruits, such as rents, belong to the owner of the
building. Thus, Dr. Rosario has a right to the rents of the improvements on Lot No. 356-A and is under no
obligation to render an accounting of the same to anyone. In fact, it is the Torbela siblings who are
required to account for the rents they had collected from the lessees of the commercial building and turn
over any balance to Dr. Rosario. Dr. Rosarios right to the rents of the improvements on Lot No. 356-A
shall continue until the Torbela siblings have chosen their option under Article 448 of the Civil Code. And
in case the Torbela siblings decide to appropriate the improvements, Dr. Rosario shall have the right to
retain said improvements, as well as the rents thereof, until the indemnity for the same has been paid.
Digested by: Jhon Dave L. Macatol

THE UNITED STATES, plaintiff-appellee, vs.LAURENTE REY,defendant-appellant.

G.R. No. L-3326 September 7, 1907

JOHNSON, J.:

Facts:

On September 19, 1905, the steamer Cantabria sailed from the port of Manila, destined for the
pueblo of Tabaco, Albay. The ship had on board, as a part of her cargo, 3 boxes containing silver and
paper money amounting to P25,000. This money was shipped by the firms of Urrutia& Co. (P20,000) and
Muñoz& Co. (P5,000).

After the Cantabria remained in quarantine at the quarantine station of Mariveles, she continued
the journey September 24. On September 26, said ship was totally wrecked off the small Island of
Mababuy and all its officers and passengers were drowned, the cargo including the money were lost as it
sunk with the ship.

On September 28, the defendant LAURENTE REY with several others, after having discovered
the existence and location of the wrecked steamer Cantabria, took two boxes, which contained P15,000,
one containing P10,000 and the other P5,000. Being that the sum was packed in boxes, which were
reinforced with iron straps and nails, said boxes were broken by the accused in order to take possession
of the said sum of money. A part of which was distributed among his companions, the largest portion of
which was retained by REY.

The trial court convicted REY for the crime of robbery. On appeal, REY alleged that the said
property which was sunk with the wrecked steamer Cantabria, was abandoned property and therefore,
granting that he had taken possession of said property and appropriated it to his own use, he was not
guilty of the crime of robbery.

Issue:
Are the boxes containing the money were abandoned property?

Held:

No. Said boxes were not abandoned property because of the absence of knowledge of the
possessor that the thing was lost and there was still intent on the part of the possessor to recover it.

Art. 555 (then Art. 460) provides that one of the ways in which a possessor may lose possession
of a property is through abandonment of a thing.

There was absence of knowledge of the possessor that the thing was lost.

The sinking of the Cantabria was relayed to the firms only after more than 6 weeks after the
cyclone. Certainly the owner of property can not be held to have abandoned the same until at least lie has
some knowledge of the loss of its possession or of the loss of the thing.

There was still intent on the part of the firms to recover the money.

Property can not be considered abandoned under the law and the possession left vacant for the
finder until the spesrecuperandi (hope of recovery) is gone and the animus revertendi (intention to return)
is finally given up.
The theory of abandonment on the part of the owners of the money stolen was fully refuted by the
fact that some weeks after the wreck of the said ship they sent men to the place of the wreck for the
purpose of recovering the property which belonged to them, which was on board the ship at the time of
her sinking. The mere fact that cargo was sunk with a ship wrecked at sea by no means deprives the
owner of said cargo of his property therein. The owner certainly still has the right to reclaim such property
and to recover the same if possible. If it should be recovered by others, the real owner would be entitled
to recover its value less the necessary expense of recovering the same and carrying it ashore by the
most approved appliances for that purpose by others.
Digested by: Jhon Dave L. Macatol

JOHN O. YUvs.MAXIMO DE LARA, JUAN PANLILIO, LUCIA RIVERO, et al

G.R. No. L-16084 November 30, 1962

MAKALINTAL, J.:

Facts:

Lot No. 14, block No. 51-C of the Gram Park subdivision, which was a 682.5-meter property, was
originally registered in 1916. Subsequently, it was acquired by the Philippine Realty Corporation.

In 1945, several persons settled on the property and constructed houses thereon without
permission from the Philippine Realty Corporation. On various dates thereafter, between 1947 and 1952,
respondents MAXIMO DE LARA, JUAN PANLILIO, LUCIA RIVERO, FLORENTINO ROQUE and
DOMINGO SAMSON bought the houses of those settlers and continued in occupancy thereof without
paying any rents to the owner of the land.

Later in 1956, Philippine Realty Corporation sold said property to petitioner JOHN O. YU, who
later obtained a TCT in his name. In 1957, YU advised DE LARA ET AL. to vacate the property within 30
days. Because of the latter‘s refusal, UY filed a complaint of unlawful detainer.

The lower court ordered DE LARA ET AL. to vacate the premises and to pay monthly rentals from
the time the action was filed until they vacate the premises.

On appeal, DE LARA ET AL. contended that Philippine Realty Corporation had lost possession of
the property by abandonment, in failing to take action against them and showing lack of interest in said
property since they started their occupancy.

Issue:
Was the property abandoned by Philippine Realty Corporation?

Held:
No, it was not abandoned. The circumstances adverted to are insufficient to constitute
abandonment, which requires not only physical relinquishment of the thing but also a clear intention not to
reclaim or reassume ownership or enjoyment thereof.

Indeed, abandonment which according to converts the thing into res nullius, ownership of which
may be acquired by occupation, can hardly apply to land, as to which said mode of acquisition is not
available, let alone to registered land, to which "no title in derogation to that of the registered owner shall
be acquired by prescription or adverse possession".

No possessory rights whatsoever can be recognized in favor of appellants, because they are in
fact nothing but squatters, who settled on the land without any agreement with the owner, paying neither
rents to him nor land taxes to the government, and who impliedly recognized their squatters' status by
purchasing only the houses built by the original settlers. Their occupancy of the land was at the owner's
sufferance, and their acts were merely tolerated which could not affect the owner's possession.
Case brief by: Louie Ivan T. Maiz

CATHOLIC VICAR APOSTOLIC OF THE MOUNTAIN PROVINCE, petitioner,


vs.
COURT OF APPEALS, HEIRS OF EGMIDIO OCTAVIANO AND JUAN VALDEZ, respondents.

G.R. No. 80294-95 September 21, 1988

GANCAYCO, J.:

FACTS:
It appears that the petitioner was in possession of the said property as borrower in
commodatum from private respondents since 1906 but in 1951 petitioner repudiated the trust
when it declared the property for tax purposes under its name. When it filed its application for
registration of the said property in 1962, petitioner had been in adverse possession of the same
for at least 11 years.

CA-G.R. No. 38830-R was a land registration case where petitioner and private respondents
were asking for confirmation of their alleged imperfect titles to the lots in question under Section
49 (b) of the Public Land Act.

In the said decision, the appellate court found that the petitioner was not entitled to confirmation
of its imperfect title to Lots 2 and 3. In separate motions for reconsideration filed by private
respondents Heirs of Octaviano and Heirs of Juan Valdez relating to the same decision, they
also asked that said two lots be registered in their names. On August 12, 1977, the Court of
Appeals denied both motions. Effectively, therefore, in the said decision the appellate court
ruled that neither the petitioner nor the private respondents are entitled to the confirmation of
imperfect title over said two lots.

What is the nature of these two lots?

The two lots in question remained part of the public lands. This is the only logical conclusion
when the appellate court found that neither the petitioner nor private respondents are entitled to
confirmation of imperfect title over said lots.

Hence, the Court finds the contention of petitioner to be well-taken in that the trial court and the
appellate court have no lawful basis in ordering petitioner to return and surrender possession of
said lots to private respondents. Said property being a public land its disposition is subject to the
provision of the Public Land Act, as amended. The present actions that were instituted in the
Regional Trial Court by private respondents are actions for recovery of possession (accion
publiciana) and not for recovery of ownership (accion reivindicatoria).

ISSUE:

Does petitioner Catholic Vicar Apostolic skemi meet the requirements of either ordinary
or extra-ordinary acquisitive prescription?
HELD:
No. Ordinary acquisitive prescription requires possession for ten years, but always with
just title. Extra-Ordinary Acquisitive prescription requires 30 years. Petitioner failed to meet the
requirements of both ordinary and extra-ordinary prescription.

Petitioner was in possession as borrower in commodatum up to 1951, when it


repudiated the trust by declaring the properties in its name for taxation purposes. When
petitioner applied for registration of Lots 2 and 3 in 1962, it had been in possession in concept of
owner only for eleven years. Ordinary acquisitive prescription requires possession for ten years,
but always with just title. Extraordinary acquisitive prescription requires 30 years. x x x The
Court of Appeals found that petitioner did not meet the requirement of 30 years possession for
acquisitive prescription over Lots 2 and 3. Neither did it satisfy the requirement of 10 years
possession for ordinary acquisitive prescription because of the absence of just title. The
appellate court did not believe the findings of the trial court that Lot 2 was acquired from Juan
Valdez by purchase and Lot 3 was acquired also by purchase from Egmidio Octaviano by
petitioner Vicar because there was absolutely no documentary evidence to support the same
and the alleged purchases were never mentioned in the application for registration.

When petitioner borrowed the house of private respondents’ predecessors, and


petitioner was allowed its free use, private respondents became bailors in commodatum, and
petitioner, the bailee. Private respondents were able to prove that their predecessors’ house
was borrowed by petitioner Vicar after the church and the convent were destroyed. They never
asked for the return of the house, but when they allowed its free use, they became bailors in
commodatum and the petitioner the bailee. The bailees’ failure to return the subject matter of
commodatum to the bailor did not mean adverse possession on the part of the borrower. The
bailee held in trust the property subject matter of commodatum. The adverse claim of petitioner
came only in 1951 when it declared the lots for taxation purposes. The action of petitioner Vicar
by such adverse claim could not ripen into title by way of ordinary acquisitive prescription
because of the absence of just title.
Case brief by: Louie Ivan T. Maiz

PIA DEL ROSARIO, plaintiff-appellant,


vs.
JUAN LUCENA, ET AL., defendants-appellees.

G.R. No. L-3546 September 13, 1907

ARELLANO, C.J.:

Facts:

A jewelry owner whose jewelries were pawned without her consent cannot be compelled
to reimburse the person to whom it is pawned in order to acquire possession of the jewelries.
(aw cheka ra bes)

Petitioner PIA DEL ROSARIO owned certain jewelries. She delivered said jewelries to
respondent PRAXEDES FLORES for sale on commission for the term of 2 months, after which,
if not sold, they should be returned to her. Without her consent, the respondent JUAN LUCENA
and his wife, PRAXEDES FLORES pawned them to co-respondent TERESA VERCHES for
P500. DEL ROSARIO filed a complaint against the SPOUSES LUCENA and VERCHES. The
principal object of the complaint was to obtain from the court a declaration that the jewels were
the property of DEL ROSARIO.

The court rendered judgment in favor of the DEL ROSARIO and against VERCHES for the
possession of the jewels. However, DEL ROSARIO could only possess the jewelries after she
pays P500 to VERCHES with interest. Should the jewels could not be returned, the SPOUSES
LUCENA shall jointly and severally pay DEL ROSARIO P500 and VERCHES P1,555 less P500.

DEL ROSARIO appealed this decision.

Issue:

Whether DEL ROSARIO was under obligation to reimburse VERCHES in order to


repossess the jewelries

Held:

NO. DEL ROSARIO should not be obliged to reimburse VERCHES.

VERCHES accepted the jewels as a pledge constituted by FLORES in the name' of DEL
ROSARIO, without ascertaining whether the latter had given the former any order or authority
for the pledging of her jewelries. VERCHES must stand the risk arising from her acceptance of
the pledge, even if when relying upon her judgment she was improperly or falsely informed; and
it would not be just nor logical that the consequences of her deception, due to her own mistake,
or to deceit employed by a stranger, should fall on the owner of the jewelries who, without
having taken any part in the transaction, became the victim of a crime.
The conflict between the right of the owner of movable property who has either lost it or been
illegally deprived thereof and that of the creditor who has loaned money thereon and holds it in
pledge cannot be decided against the owner, to whom the Civil Code grants a right of action to
recover the property from whoever may be in possession.

The exceptions to Art. 559 (then Art. 464) are therein contained, namely:

1. If the possessor of personal property, lost or stolen, has acquired it at a public sale;

2. In favor of Montes de Piedad established under authorization of the Government; and

3. With regard to things acquired on exchange, or at fairs or markets, or from a merchant


lawfully engaged in similar business. The defendant was not within any of the exceptions under
which she could refuse to make restitution of the property without reimbursement of the amount
advanced upon the pledge. Therefore the decision which provides for such reimbursement
before the return of the jewels is not based on any law whatever. On the contrary, it is in
violation of Art. 559 of the Civil Code. It was improper to compel DEL ROSARIO to reimburse
VERCHES in the sum P500, which PRAXEDES FLORES obtained through the commission of
an unlawful act, but that it is proper and in accordance with the law to compel VERCHES to
return to the DEL ROSARIO, absolutely and unconditionally, the jewels in question.
Case brief by: Louie Ivan T. Maiz

JOSEFA VARELA, plaintiff-appellee,


vs.
JOSEPHINE FINNICK, defendant-appellant.

G.R. No. L-3890 January 2, 1908

TORRES, J.:

Facts:

A pawnshop does not enjoy the privilege established by Art. 559.The owner of a pawnshop,
notwithstanding the fact that he acted in good faith, did not acquire the Jewels at a public sale. Neither
does, a pawnshop enjoy the privilege granted to a Monte de Piedad. The owner of the jewels who was
deprived of the same in consequence of a crime is entitled to the recovery thereof. [di na jud ni cheka
bes, paninuod nani]

In 1905, Nicolasa Pascual received from petitioner JOSEFA VARELA several jewels, some
of which were owned by ARELA herself and some belonged to strangers. The jewelries were
delivered to Pascual to be sold on commission, with the obligation on the part of the latter to pay to
the former the proceeds of the sale of said jewels, or to return them if unsold.

Pascual, however, pawned the said jewels at various dates with H. J. Finnick's pawnshop, where the
jewels had been pledged. The jewels were thus misappropriated and the amount of the loan granted
thereon embezzled, to the prejudice of Josefa VARELA.

In 1906, VARELA claimed, in writing, the return of the jewels from H. J. Finnick's pawnshop. It also
filed a case against said pawnshop and its manager, respondent JOSEPHINE FINNICK. FINNICK
alleged that the jewels pledged at the pawnshop were not the subject of any other crime committed by
Pascual. It was further alleged that the pawnshop accepted the said jewels in good faith. Hence, the
pawnshop was entitled to their possession.

ISSUE:

Is VARELA entitled to the possession of the jewelries?

HELD:

Of course YES! She should be entitled to the possession of the jewelries. ganern

Nicolasa Pascual was convicted of estafa of the jewels in question, and as the sentence
became final, so much so that she was now undergoing or term of imprisonment, the balance of the
judgment must be complied with that is, the restitution of the jewels misappropriated because they are
at hand and have not disappeared. This restitution must be made even if the jewels are in the
possession of a third party, such as a pawnshop, and notwithstanding the fact that they were lawfully
acquired by it, its right to institute proceedings against whoever may be liable therefor being reserved
as provided by article 120 of the Penal Code.
The exception contained in paragraph 3 of said article is not applicable to the present case because a
pawnshop does not enjoy the privilege established by Art. 559 (then Art. 464), of the Civil Code. The
owner of the pawnshop of Finnick Brothers, notwithstanding the fact that he acted in good faith, did
not acquire the Jewels at a public he sale. Neither does, a pawnshop enjoy the privilege granted to a
Monte de Piedad therefore, VARELA, who lost said jewels and was deprived of the same in
consequence of a crime is entitled to the recovery thereof from the pawnshop of Finnnick Brothers,
where they were pledged.

The provisions of Art. 559 (then Art. 464) shall be observed with regard to the rights of the owner to
recover the personal property lost or of which he may have been illegally deprived, and also with
regard to those acquired at an auction, on exchanges, at fairs or markets, or from a merchant legally
established or customarily engaged in the traffic of similar objects.

In the present case not only has the ownership and the origin of the jewels misappropriated been
unquestionably proven also that the accused, acting fraudulently and in bad faith, disposed of them
and pledged them contrary agreement, with no right of ownership, and to the prejudice of the injured
party, who was thereby illegally deprived of said jewels. Therefore, in accordance with the provisions
of Art. 559 (then Art. 464), the owner an absolute right to recover the jewels from the possession of
whosoever holds them in accordance with the judgment entered in the aforesaid cause for estafa
wherein, the accused having been found guilty the right of Josefa Varela to recover jewels in question
is expressly acknowledged.
Case brief by: Louie Ivan T. Maiz

ESTANISLAUA ARENAS, ET AL., plaintiffs-appellees,


vs.
FAUSTO O. RAYMUNDO, defendant-appellant.

G.R. No. L-5741 March 13, 1911

TORRES, J.:

Facts:

Because of the fact that Perello was not the legitimate owner of the jewelry which she
pledged to the Raymundo, the contract of pledge entered into by both is, of course, null and
void. hence, the jewelry so pawned could not serve as security for the payment of the sum
loaned, nor can the latter be collected out of the value of the said jewelry. [palakpaki ko sa
akong effort diri nga side]

In 1908, petitioner ESTANISLAUA ARENAS delivered to Elena de Vega to sell on


commission several pieces of jewelry. De Vega, in turn, delivered it to Concepcion Perello,
likewise to sell on commission. However, Perello, instead of fulfilling her trust, pledged the
jewelry in the pawnshop of defendant FAUSTO O. RAYMUNDO. Perello appropriated to her
own use the money thereby obtained. Later, Perello was prosecuted for estafa, convicted, and
the judgment became final. The jewelries however were still under the control and in the
possession of RAYMUNDO. The latter refused to deliver the jewelries to ARENAS, the owner
thereof. Hence, ARENAS filed an action against RAYMUNDO to recover possession of said
jewelries. Later, after a writ of seizure was issued for the said jewelry the sheriff took it out of the
RAYMUNDO's control and held it in his possession during the 5 days prescribed by law. After 5
days without the delivery of bond by RAYMUNDO, the sheriff delivered it to the counsel for
ARENAS.

RAYMUNDO on the other hand, contended that the jewelry was pledged to the
pawnshop by Perello as a security for a P1,524 loan with the knowledge, consent, and
mediation of Gabriel La O, a son of the ARENAS. Hence, it was alleged that the latter were
estopped from disavowing the action of Perello. RAYMUNDO then prayed that the complaint be
dismissed and that the jewelry seized be returned to the pawnshop’s possession. The lower
court ordered RAYMUNDO to restore to ARENAS the jewelry. Hence, this appeal by
RAYMUNDO.

Issue:

Kamo diay muhimog issue pungkol mo? haha!

Issue: (take 2 action)

Is Raymundo entitled to possession of the jewelry?


Held:

NO. Instead of Raymundo, the rightful possessor of the jewelry was ARENAS, who was the
owner thereof. Lami pagka kakak de vah

Article 1857 of the Civil Code prescribes as one of the essential requisites of the contracts
of pledge and of mortgage, that the thing pledged or mortgaged must belong to the person who
pledges or mortgages it. Because of the fact that Perello was not the legitimate owner of the
jewelry which she pledged to the RAYMUNDO, the contract of pledge entered into by both is, of
course, null and void. Hence, the jewelry so pawned could not serve as security for the payment of
the sum loaned, nor can the latter be collected out of the value of the said jewelry.

In the case at bar, it was not proven that ARENAS authorized Perello to pawn the jewelry given to
her by Arenas to sell on commission. Because of the mere fact of Perello's having been convicted
and sentenced for estafa, the rest of the dispositive part of the said sentence must be complied
with, that is, the jewelry misappropriated must be restored to its owner, which was in possession of
the pawnshop of RAYMUNDO, who acquired it by legal means.

Even supposing that RAYMUNDO had acted in good faith in accepting the pledge of the jewelry in
litigation, even then he would not be entitled to retain it until the owner thereof reimburse him for
the amount loaned to the embezzler.

Between the supposed good faith of RAYMUNDO and the undisputed good faith of the ARENAS,
the owner of the jewelry, neither law nor justice permit that the latter, after being the victim of
embezzlement, should have to choose one of the two extremes of a dilemma. Both of which,
without legal ground or reason, are injurious and prejudicial to her interests and rights, that is, she
must either lose her jewelry or pay a large sum received by the embezzler as a loan from the
defendant, when ARENAS is not related to the latter by any legal or contractual bond out of which
legal obligations arise.
Case brief by: Louie Ivan T. Maiz

JOSE B. AZNAR, plaintiff-appellant,


vs.
RAFAEL YAPDIANGCO, defendant-appellee;
TEODORO SANTOS, intervenor-appellee.

G.R. No. L-18536 March 31, 1965

REGALA, J.:

Facts:

If the owner has lost a thing, or if he has been unlawfully deprived of it, he has a right to
recover it, not only from the finder, thief or robber, but also from third persons who may have
acquired it in good faith from such finder, thief or robber.

In 1959, intervenor TEODORO SANTOS advertised the sale of his FORD FAIRLANE
500. A certain L. De Dios, claiming to be a nephew of Vicente Marella, went to the Santos
residence to answer the ad. During the transaction, Marella agreed to buy the car for P14,700
on the understanding that the price would be paid only after the car had been registered in his
name. After a Deed of Sale was executed by the parties, they then proceeded to the Motor
Vehicles where the registration of the car in Marella's name was effected. Up to this stage of the
transaction, the purchased price had not been paid.

TEODORO SANTOS gave the registration papers and a copy of the deed of sale to his son,
Irineo Santos, and instructed him not to part with them until Marella shall have given the full
payment for the car. When Irineo demanded the payment from Marella, the latter said that the
amount he had on hand then was short by some P2,000 and begged off to be allowed to secure
the shortage from a sister. Thereafter, he ordered L. De Dios to go to the said sister and
suggested that Irineo go with him. At the same time, he requested the registration papers and
the deed of sale from Irineo Santos on the pretext that he would like to show them to his lawyer.
Trusting the good faith of Marella, Irineo handed over the same to the latter and thereupon,
proceeded to the alleged house of Marella's sister.

When they reached the alleged house of Marella’s sister, Irineo and L. De Dios entered the
house while their unidentified companion remained in the car. Once inside, L. De Dios asked
Irineo to wait at the sala while he went inside a room. However, time passed but L. De Dios did
not return. Irineo then found out that L. De Dios and his unidentified companion were no longer
there anymore and that nobody in the house knew L. De Dios. When Irineo went to the house of
Marella, he found it closed and Marella was gone. Finally, he reported the matter to his father
who promptly advised the police authorities.

On the very same day, Marella was able to sell the car for P15,000 to petitioner JOSE B.
AZNAR, who acquired the said car in good faith, for a valuable consideration and without notice
of the defect appertaining to the vendor's title. While AZNAR was attending to the car’s
registration, agents of the Philippine Constabulary headed by respondent CAPT. RAFAEL
YAPDIANGCO, seized and confiscated the same in consequence of the report to them by
TEODORO SANTOS that the said car was unlawfully taken from him. AZNAR then filed a
complaint for replevin against YAPDIANGCO. Claiming ownership of the vehicle, he prayed for
its delivery to him. In the course of the litigation, however, TEODORO SANTOS was allowed to
intervene by the lower court. The lower court awarded the car to CHARO SANTOS-CONCIO, as
it found that he had been unlawfully deprived of his personal property by Marella, from whom
the AZNAR traced his right. Hence, SANTOS was entitled to its recovery on the mandate of
Article 559 of the Civil Code. From this decision, Aznar appealed. He contended that the
applicable provision of the Civil Code is Article 1506 and not Article 559. Article 1506 provides:

ART. 1506. Where the seller of goods has a voidable title thereto, but his, title has not been
voided at the time of the sale, the buyer acquires a good title to the goods, provided he buys
them in good faith, for value, and without notice of the seller's defect of title.

Issue:

Did he or did he, like Aznar, like who else would it be? Does AZNAR had a better right to
acquire possession of the car?

Held:

NO. The reliance of AZNAR on Art. 1506 was unmeritorious. The car should be awarded
to TEODORO SANTOS instead.

Under the aforequoted provision, it is essential that the seller should have a voidable title
at least. It is very clearly inapplicable where, as in this case, the seller had no title at all. Vicente
Marella did not have any title to the property under litigation because the same was never
delivered to him. He sought ownership or acquisition of it by virtue of the contract. Vicente
Marella could have acquired ownership or title to the subject matter thereof only by the delivery
or tradition of the car to him. For the legal acquisition and transfer of ownership and other
property rights, the thing transferred must be delivered, inasmuch as, according to settled
jurisprudence, the tradition of the thing is a necessary and indispensable requisite in the
acquisition of said ownership by virtue of contract.

The lower court was correct in applying Article 559 of the Civil Code to the case at bar, for under
it, the rule is to the effect that if the owner has lost a thing, or if he has been unlawfully deprived
of it, he has a right to recover it, not only from the finder, thief or robber, but also from third
persons who may have acquired it in good faith from such finder, thief or robber. The said article
establishes two exceptions to the general rule of irrevindicability, to wit, when the owner (1) has
lost the thing, or (2) has been unlawfully deprived thereof. In these cases, the possessor cannot
retain the thing as against the owner, who may recover it without paying any indemnity, except
when the possessor acquired it in a public sale.

Under Article 559 of the new Civil Code, a person illegally deprived of any movable may recover
it from the person in possession of the same and the only defense the latter may have is if he
has acquired it in good faith at a public sale, in which case, the owner cannot obtain its return
without reimbursing the price paid therefor. In the present case, TEODORO SANTOS had been
illegally deprived of his car through the ingenious scheme of Marella to enable the latter to
dispose of it to AZNAR, as if he were the owner thereof. TEODORO SANTOS, therefore, could
still recover possession of the car even if it is in the possession of AZNAR who had acquired it
in good faith from Marella. The maxim that "no man can transfer to another a better title than he
had himself" obtains in the civil as well as in the common law.
Case brief by: Louie Ivan Maiz

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.

G.R. No. 80298 April 26, 1990

CRUZ, J.:

Facts:

EDCA was not unlawfully deprived of the books because it was the one which made the
delivery to the impostor Cruz. The latter then acquired ownership over it, which was subsequently
transferred to the buyers, the SPOUSES SANTOS, who purchased said books in good faith and
diligence as to ascertain the invoice issued by EDCA to Cruz. [maam maluoy ka, hatagi kog merit
ani akong sakripisyo]

In 1981, a person identifying himself as Professor Jose Cruz as dean of De La Salle Collge,
placed an order by telephone with EDCA PUBLISHING & DISTRIBUTING CORP. for 406 books,
payable on delivery. EDCA prepared the corresponding invoice and delivered the books as
ordered, for which Cruz issued a personal check covering the purchase price of P8,995.65.

Later, Cruz sold 120 of the books to private respondent LEONOR SANTOS who, after verifying the
seller's ownership from the invoice he showed her, paid him P1,700.00. Meanwhile, EDCA having
become suspicious over a second order placed by Cruz even before clearing of his first check,
made inquiries with the De la Salle College but it was informed that there was no such person in its
employ. Further verification revealed that Cruz had no more account or deposit with the Philippine
Amanah Bank, against which he had drawn the payment check. EDCA then went to the police,
which set a trap and arrested Cruz, whose real name was Tomas de la Pena.

On the night of the same date, EDCA sought the assistance of the police, which forced their way
into the store of the SPOUSES LEONOR and GERARDO SANTOS and threatened them with
prosecution for buying stolen property. They seized the 120 books without warrant, loading them in
a van belonging to EDCA, and thereafter turned them over to the EDCA. The SPOUSES SANTOS
demanded for the return of said books but it was rejected. Hence, the SPOUSES SANTOS sued
EDCA for the recovery of the books. A writ of preliminary attachment was issued and the EDCA
finally surrendered the books to the SPOUSES SANTOS.

The MTC recognized the ownership of the books in the SPOUSES SANTOS. The same was
sustained by both the RTC and CA. Hence, this appeal.

EDCA contended that because the impostor Cruz acquired no title to the books, the latter then
could not have validly transferred it to the SPOUSES SANTOS. Its reason is that as the payment
check bounced for lack of funds, there was a failure of consideration that nullified the contract of
sale between it and Cruz.
Issue:

Is EDCA entitled to possession of the property?

Held:

NO. The SPOUSES SANTOS had a better right to possess said books.

The impostor Cruz acquired ownership over the books because they were delivered to him.
The contract of sale is consensual and is perfected once agreement is reached between the
parties on the subject matter and the consideration. Ownership in the thing sold shall not pass to
the buyer until full payment of the purchase price 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 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.

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.

“Unlawfully deprived”
One may well imagine the adverse consequences if the phrase "unlawfully deprived" were
to be interpreted in the manner suggested by EDCA. A person relying on the seller's title who buys
a movable property from him would have to surrender it to another person claiming to be the
original owner who had not yet been paid the purchase price therefor. The buyer in the second
sale would be left holding the bag, so to speak, and would be compelled to return the thing bought
by him in good faith without even the right to reimbursement of the amount he had paid for it.
LEONOR SANTOS took care to ascertain first that the books belonged to CRUZ before she
agreed to purchase them. The EDCA invoice CRUZ showed her assured her that the books had
been paid for on delivery. By contrast, EDCA was less than cautious-in fact, too trusting-in dealing
with the impostor. Although it had never transacted with him before, it readily delivered the books
he had ordered (by telephone) and as readily accepted his personal check in payment. It did not
verify his identity although it was easy enough to do this. It did not wait to clear the check of this
unknown drawer. Worse, it indicated in the sales invoice issued to him, by the printed terms
thereon, that the books had been paid for on delivery, thereby vesting ownership in the buyer.

Surely, the SPOUSES SANTOS did not have to go beyond that invoice to satisfy herself
that the books being offered for sale by Cruz belonged to him; yet she did. Although the title of
Cruz was presumed under Article 559 by his mere possession of the books, these being movable
property, LEONOR SANTOS nevertheless demanded more proof before deciding to buy them.

It would certainly be unfair now to make the the SPOUSES SANTOS bear the prejudice
sustained by EDCA as a result of its own negligence. There could be no the justice in transferring
EDCA's loss to the Santoses who had acted in good faith, and with proper care, when they bought
the books from Cruz.
Case digtested by: Malaica Nina Maloloy-on

LEDESMA vs. CA

G.R. No. 86051. September 1, 1992

The sale entered by CITIWIDE and the impostor was valid. CITIWIDE was not illegally deprived of the
car simply because the check in payment therefor was subsequently dishonored. Hence, the transfer of
ownership from the impostor to LEDESMA was valid as well. LEDESMA had a better right to possess the
vehicle because he was a purchaser in good faith and for value.

Facts: In 1977, a person representing himself to be JojoConsunji, purchased purportedly for his father, a
certain Rustico T. Consunji, 2 brand new motor vehicles from respondent CITIWIDE MOTORS, INC.
Thereafter, CITIWIDE delivered said vehicles to the person representing himself to be JojoConsunji. The
latter issued a manager’s check worth P101,000 was full payment of the value of the vehicles.

However, when CITIWIDE deposited the said check, it was dishonored by the bank on the ground that it
was tampered with, the correct amount of P101.00 having been raised to P101,000. Hence, CITIWIDE
reported said criminal act to the Philippine Constabulary, which found out that the real identity of the
impostor was Armando Suarez who had a long line of criminal cases against him for estafa using his
similar modus operandi.

Later, CITIWIDE was able to recover one of the vehicles, which was found abandoned. It also found out
that the possession of the other vehicle was transferred to petitioner JAIME LEDESMA.

LEDESMA, however claimed that he purchased said vehicle and paid for it in good faith from its
registered owner, one Pedro Neyra. After posting the necessary bond, CITIWIDE was able to recover
possession of the vehicle in possession of LEDESMA.

The lower court ruled in favor of LEDESMA. It ruled that LEDESMA was a buyer in good faith and for
valuable consideration.

On appeal with the CA, said decision was reversed. LEDESMA was ordered to return the possession of
said vehicle to CITIWIDE. It held that where the owner has lost the thing or has been unlawfully deprived
thereof, the good faith of the possessor is not a bar to recovery of the movable unless the possessor
acquired it in a public sale of which there is no pretense in this case. Contrary to the court's assumption,
the issues not primarily the good faith of Ledesma, for even if this were true, this may not be invoked as a
valid defense if it be shown that Citiwide was unlawfully deprived of the vehicle.

Hence, this appeal by LEDESMA.

Issue:Whether Citiwide was entitled to repossess the vehicle.

Held:NO. LEDESMA had a better right to possess said vehicle.

It was therefore erroneous for the CA to declare that CITIWIDE was illegally deprived of the car simply
because the check in payment therefor was subsequently dishonored. It also erred when it divested the
LEDESMA, a buyer in good fait,h who paid valuable consideration therefor, of his possession thereof.

It is quite clear that a party who (a) has lost any movable or (b) has been unlawfully deprived thereof can
recover the same from the present possessor even if the latter acquired it in good faith and has, therefore,
title thereto for under the first sentence of Article 559, such manner of acquisition is equivalent to a title.
There are three (3) requisites to make possession of movable property equivalent to title, namely: (a) the
possession should be in good faith; (b) the owner voluntarily parted with the possession of the thing; and
(c) the possession is in the concept of owner.

Undoubtedly, one who has lost a movable or who has been unlawfully deprived of it cannot be said to
have voluntarily parted with the possession thereof. This is the justification for the exceptions found
under the second sentence of Article 559 of the Civil Code.

In the present case, there was a perfected unconditional contract of sale between CITIWIDE and the
original vendee impostor. The former voluntarily caused the transfer of the certificate of registration of
the vehicle in the name of the first vendee even if the said vendee was represented by someone who used
a fictitious name--and likewise voluntarily delivered the cars and the certificate of registration to the
vendee's alleged representative. Title thereto was forthwith transferred to the vendee. The subsequent
dishonor of the check because of the alteration merely amounted to a failure of consideration which does
not render the contract of sale void, but merely allows the prejudiced party to sue for specific performance
or rescission of the contract, and to prosecute the impostor for estafa under Article 315 of the Revised
Penal Code.
The contract of sale is consensual and is perfected once agreement is reached between the parties on the
subject matter and the consideration. From that moment, the parties may reciprocally demand
performance, subject to the provisions of the law governing the form of contracts. Ownership in the thing
sold shall not pass to the buyer until full payment of the purchase price 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 failure of
the buyer to make good the price does not, in law, cause the ownership to revest in the seller until and
unless the bilateral contract of sale is first rescinded or resolved pursuant to Article 1191 of the new Civil
Code.
BPI V CA

538 SCRA 184, GR No. 123498

November 23, 30017

Facts: Franco opened 3 accounts with BPI with the total amount of P2,000,000.00. The said amount used
to open these accounts is traceable to a check issued by Tevesteco. The funding for the P2,000,000.00
check was part of the P80,000,000.00 debited by BPI from FMIC’s account (with a deposit of
P100,000,000.00) and credited to Tevesteco’s account pursuant to an Authority to Debit which was
allegedly forged as claimed by FMIC.Tevesteco effected several withdrawals already from its account
amounting to P37,455,410.54 including the P2,000,000.00 paid to Franco.

Franco issued two checks which were dishonoured upon presentment for payment due to garnishment of
his account filed by BPI.BPI claimed that it had a better right to the amounts which consisted of part of
the money allegedly fraudulently withdrawn from it by Tevesteco and ending up in Franco’s account. BPI
urges us that the legal consequence of FMIC’s forgery claim is that the money transferred by BPI to
Tevesteco is its own, and considering that it was able to recover possession of the same when the money
was redeposited by Franco, it had the right to set up its ownership thereon and freeze Franco’s accounts.

Issue: Whether the bank has a better right to the deposits in Franco’s account.

Held:No. Significantly, while Article 559 permits an owner who has lost or has been unlawfully deprived
of a movable to recover the exact same thing from the current possessor, BPI simply claims ownership of
the equivalent amount of money, i.e., the value thereof, which it had mistakenly debited from FMIC’s
account and credited to Tevesteco’s, and subsequently traced to Franco’s account.

Money bears no earmarks of peculiar ownership, and this characteristic is all the more manifest in the
instant case which involves money in a banking transaction gone awry. Its primary function is to pass
from hand to hand as a medium of exchange, without other evidence of its title. Money, which had been
passed through various transactions in the general course of banking business, even if of traceable origin,
is no exception.
ELEIZEGUI vs. MANILA LAWN TENNIS CLUB

GR No. 967. May 19, 1903.

Usufruct is a right of superior degree to that which arises from a lease. It is a real right and includes all
the jus utendi and jus fruendi. Nevertheless, the utmost period for which a usufruct can endure, if
constituted in favor of a natural person, is the lifetime of the usufructuary; and if in favor of a juridical
person, it can not be created for more than thirty years.

Facts:On January 25, 1980 petitioners DARIO and GAUDENCIO ELEIZEGUI entered into a contract of
lease of its land with the respondent MANILA LAWN TENNIS CLUB through its secretary Mr.
Williamson.

By the contract of lease the lessee is expressly authorized to make improvements upon the land,
by erecting buildings of both permanent and temporary character, by making fills, laying pipes, and
making such other improvements as might be considered desirable for the comfort and amusement of the
members. It was also stipulated that the lease for all the time and that the members of the said club may
desire to use it. Also, Mr. Williamson or whoever may succeed him as secretary of said club may
terminate the lease whenever desired without other formality than that of giving a month's notice. It was
also specified that the ELEZEGUIs as owners of the land would undertake to maintain the club as long as
the tenant, the MANILA LAWN TENNIS CLUB should see fit without altering in the slightest degree the
conditions of this contract, even though the estate be sold. The rent of the said land is fixed at P25 per
month.

On August 8, 1980, the ELEZEGUIs terminated the contract of lease by the notice given to the
MANILA LAWN TENNIS CLUB. The latter however, refused to accede and vacate the leased land.

On the ground that the lease was already terminated, the ELEZEGUIs filed an action for unlawful
detainer.

With respect to the term of the lease the present question has arisen. In its discussion 3 theories
have been presented:

1.) The duration depends upon the will of the lessor, who, upon one month's notice given to the
lessee, may terminate the lease so stipulated;
2.) The duration makes it dependent upon the will of the lessee, as stipulated in the contract; and

3.)The right is reserved to the courts to fix the duration of the term.

The first theory is that which has prevailed in the judgment below. Hence, this appeal.

Issue:Whether the contract of lease was perpetual since in the contract, the duration thereof as left to the
will of the lessee alone.
Held: NO, it was not perpetual. Although the contract left to the will of the lessee the duration of the
lease, it could not be understood to be a life tenancy nor a perpetual lease. If the lease could last during
such time as the lessee might see fit, because it has been so stipulated by the lessor, it would last, first, as
long as the will of the lessee that is, all his life; second, during all the time that he may have succession,
inasmuch as he who contracts does so for himself and his heirs.

Being a lease, it then it must be for a determinate period. By its very nature it must be temporary just as
by reason of its nature aemphyteusis must be perpetual or for an unlimited period. If the lease was
intended to be perpetual, they should have not merely entered into a contract of lease but either contract
for a usufruct or an emphyteusis. Why should the lessee have a greater right than the usufructuary, as
great as that of an empbyteuta, with respect to the duration of the enjoyment of the property of another?

Usufruct is a right of superior degree to that which arises from a lease. It is a real right and includes all the
jus utendi and jus fruendi. Nevertheless, the utmost period for which a usufruct can endure, if constituted
in favor of a natural person, is the lifetime of the usufructuary; and if in favor of a juridical person, it can
not be created for more than thirty years.

Hence, the term of the lease could not be left to the will of the lessor, the MANILA LAWN TENNIS
CLUB alone. The proper remedy was the ask the court to fic the duration of the lease and not the action
for unlawful detainer.
MERCEDES MORALIDAD, Petitioner,
vs.
SPS. DIOSDADO PERNES and ARLENE PERNES, Respondents.

G.R. No. 152809 August 3, 2006

Facts:

In her younger days, petitioner taught in Davao City, Quezon City and Manila. While teaching in
Manila, she had the good fortune of furthering her studies at the University of Pennsylvania, U.S.A.
While schooling, she was offered to teach at the Philadelphia Catholic Archdiocese, which she did for
seven (7) years. Thereafter, she worked at the Mental Health Department of said University for the next
seventeen (17) years.During those years, she would come home to the Philippines to spend her two-month
summer vacation in her hometown in Davao City. Being single, she would usually stay in Mandug,
Davao City, in the house of her niece, respondent Arlene Pernes, a daughter of her younger sister,
Rosario.Back in the U.S.A. sometime in 1986, she received news from Arlene that Mandug at the
outskirts of Davao City was infested by NPA rebels and many women and children were victims of
crossfire between government troops and the insurgents. Shocked and saddened about this development,
she immediately sent money to Araceli, Arlene’s older sister, with instructions to look for a lot in Davao
City where Arlene and her family could transfer and settle down. This was why she bought the parcel of
land covered by TCT No. T-123125.Petitioner acquired the lot property initially for the purpose of letting
Arlene move from Mandug to Davao City proper but later she wanted the property to be also available to
any of her kins wishing to live and settle in Davao City. Petitioner made known this intention in a
document she executed on July 21, 1986.

Issue:

I. WHETHER OR NOT THE COURT OF APPEALS ERRED IN DISMISSING THE UNLAWFUL


DETAINER CASE FOR BEING PREMATURE WHICH DECISION IS NOT IN ACCORDANCE
WITH LAW AND JURISPRUDENCE.

II. WHETHER OR NOT THE COURT OF APPEALS ERRED IN APPLYING ARTICLES 448 AND
546 AND THE PROVISIONS OF THE CODE ON USUFRUCT INSTEAD OF ARTICLE 1678 OF
THE CIVIL CODE.

Ruling:
The Court rules for the petitioner.Usufruct, in essence, is nothing else but simply allowing one to enjoy
another’s property. It is also defined as the right to enjoy the property of another temporarily, including
both the jus utendi and the jus fruendi, with the owner retaining the jus disponendi or the power to
alienate the same.

It is undisputed that petitioner, in a document dated July 21, 1986, supra, made known her intention to
give respondents and her other kins the right to use and to enjoy the fruits of her property. There can also
be no quibbling about the respondents being given the right "to build their own house" on the property
and to stay thereat "as long as they like." Paragraph (5) of the same document earmarks "proceeds or
income derived from the aforementioned properties" for the petitioner’s "nearest kins who have less in
life in greater percentage and lesser percentage to those who are better of (sic) in standing." The
established facts undoubtedly gave respondents not only the right to use the property but also granted
them, among the petitioner’s other kins, the right to enjoy the fruits thereof. We have no quarrel,
therefore, with the CA’s ruling that usufruct was constituted between petitioner and respondents. It is thus
pointless to discuss why there was no lease contract between the parties.

There are other modes or instances whereby the usufruct shall be considered terminated or extinguished.
For sure, the Civil Code enumerates such other modes of extinguishment.

ART. 603. Usufruct is extinguished:

(1) By the death of the usufructuary, unless a contrary intention clearly appears;

(2) By expiration of the period for which it was constituted, or by the fulfillment of any resolutory
condition provided in the title creating the usufruct;

(3) By merger of the usufruct and ownership in the same person;

(4) By renunciation of the usufructuary;

(5) By the total loss of the thing in usufruct;

(6) By the termination of the right of the person constituting the usufruct;

(7) By prescription.
The document executed by the petitioner dated July 21, 1986 constitutes the title creating, and
sets forth the conditions of, the usufruct. Paragraph (3) thereof states "[T]hat anyone of my kins may
enjoy the privilege to stay therein and may avail the use thereof. Provided, however, that the same is not
inimical to the purpose thereof"

What may be inimical to the purpose constituting the usufruct may be gleaned from the preceding
paragraph wherein petitioner made it abundantly clear "that anybody of my kins who wishes to stay on
the aforementioned property should maintain an atmosphere of cooperation, live in harmony and must
avoid bickering with one another."

That the maintenance of a peaceful and harmonious relations between and among kin constitutes
an indispensable condition for the continuance of the usufruct is clearly deduced from the succeeding
Paragraph #4 where petitioner stated "[T]hat anyone of my kins who cannot conform with the wishes of
the undersigned may exercise the freedom to look for his own." In fine, the occurrence of any of the
following: the loss of the atmosphere of cooperation, the bickering or the cessation of harmonious
relationship between/among kin constitutes a resolutory condition which, by express wish of the
petitioner, extinguishes the usufruct.

From the pleadings submitted by the parties, it is indubitable that there were indeed facts and
circumstances whereby the subject usufruct may be deemed terminated or extinguished bythe occurrence
of the resolutory conditions provided for in the title creating the usufruct, namely, the document adverted
to which the petitioner executed on July 21, 1986.

Thus, the Court rules that the continuing animosity between the petitioner and the Pernes family
and the violence and humiliation she was made to endure, despite her advanced age and frail condition,
are enough factual bases to consider the usufruct as having been terminated.

By express provision of law, respondents, as usufructuary, do not have the right to reimbursement for the
improvements they may have introduced on the property. We quote Articles 579 and 580 of the Civil
Code:

Art. 579. The usufructuary may make on the property held in usufruct such useful improvements or
expenses for mere pleasure as he may deem proper, provided he does not alter its form or substance; but
he shall have no right to be indemnified therefor. He may, however, remove such improvements, should it
be possible to do so without damage to the property.
Art. 580. The usufructuary may set off the improvements he may have made on the property against any
damage to the same.

Given the foregoing perspective, respondents will have to be ordered to vacate the premises without any
right of reimbursement. If the rule on reimbursement or indemnity were otherwise, then the usufructuary
might, as an author pointed out, improve the owner out of his property. The respondents may, however,
remove or destroy the improvements they may have introduced thereon without damaging the petitioner’s
property.
BACHRACH vs. SEIFERT

GR No.L-2659. October 12, 1950

Shares of stocks dividends are civil fruits. The usufructuray then, being entitled to civil fruits other than
natural and industrial fruits shall be entitled to shares of stocks dividends as well.

Facts: The deceased E. M. Bachrach, left no forced heir except his widow, petitioner Mary McDonald
Bachrach.

In his last will and testament, the deceased bequeath and devised to his wife Bachrach for life all the fruits
and usufruct of the remainder of his estate after payment of the legacies, bequests, and gifts; and she may
enjoy said usufruct and use or spend such fruits as she may in any manner wish. The will further provided
that upon the death of Bachrach, one-half of all his estate shall be divided share and share alike by and
between his legal heirs respondents Sophie Siefert and Elisa Elianoff, to the exclusion of his brothers.

The estate of E. M. Bachrach, as owner of 108,000 shares of stock of the Atok-Big Wedge Mining Co.,
Inc., received from the latter 54,000 shares representing 50% stock dividend on the said 108,000 shares.

On July 10, 1948, Bachrach, as usufructuary or life tenant of the estate, petitioned the lower court to
authorize the Peoples Bank and Trust Company, as administrator of the estate of E. M. Bachrach, to
transfer to her the said 54,000 shares of stock dividend by indorsing and delivering to her the
corresponding certificate of stock, claiming that said dividend, although paid out in the form of stock, is
fruit or income and therefore belonged to her as usufructuary or life tenant.

Respondents Siefert and Elianoff, as legal heirs of the deceased, opposed said petition on the ground that
the stock dividend in question was not income but formed part of the capital and therefore belonged not to
the usufructuary but to the remainderman.

The lower court granted the petition of Bachrach. HENCE, this appeal.

While appellants admitted that a cash dividend is an income, they contend that a stock dividend is not, but
merely represents an addition to the invested capital.
Issue: Whether or not the 54,000 shares of stock dividends belong to the theusufructuary MARY
McDonald Bachrach.

Held: YES, the shares belong to the usufructuary.

There are two rules applicable in the present case: the Massachussetts rule and the Pensylvannia rule. The
Massachusetts supports SEIFERT and Elianoff 's contention. The Pennsylvania rule on the other hand,
supports the contention of BACHRACH.

The Massachusetts rule regards cash dividends, however large, as income, and stock dividends, however
made, as capital. It holds that a stock dividend is not in any true sense any dividend at all since it involves
no division or severance from the corporate assets of the subject of the dividend; that it does not distribute
property but simply dilutes the shares as they existed before; and that it takes nothing from the property of
the corporation, and adds nothing to the interests of the shareholders.

The Pennsylvania rule declares that all earnings of the corporation made prior to the death of the testator
stockholder belong to the corpus of the estate, mid that all earnings, when declared as dividends ill
whatever form, made during the lifetime of the usufructuary or life tenant are income and belong to the
usufructuary or life tenant.

The Supreme Court thought that the Pennsylvania rule was more in accord with our statutory laws than
the Massachusetts rule. Under section 16 of our Corporation Law, no corporation may make or declare
any dividend except from the surplus profits arising from its business. Any dividend, therefore, whether
cash or stock, represents surplus profits. Article 566 (then Article 471) of the Civil Code provides that the
usufructuary shall be entitled to receive all the natural, industrial, and civil fruits of the property in
usufruct.

The 108,000 shares of stock were part of the property in usufruct. The 54,000 shares of stock dividend
were civil fruits of the original investment. They represented profits, and the delivery of the certificate of
stock covering said dividend is equivalent to the payment of said profits. Said shares may be sold
independently of the original shares, just as the offspring of a domestic animal may be sold independently
of its mother.
OROZCO vs. ALCANTARA

GR No.L-3691. November 21, 1951

A dividend, whether in the form of cash or stock, is income and, consequently, should go to the
usufructuary, taking into consideration that a stock dividend as well as a cash dividend can be declared
only out of profits of the corporation, for if it were declared out of the capital it would be a serious
violation of the law.

Facts: In 1922, Eugenio delSaz Orozco died, leaving a will which he had executed in 1921. It was
afterwards duly admitted to probate. The pertinent clause of that will provided that certain properties
should be given in life usufruct to his son petitioner Jacinto del Saz Orozco y Mortera, with the obligation
on his part to preserve said properties in favor of the other heirs who were declared the naked owners
thereof. Among these properties were 5,714 shares of stock of the Benguet Consolidated Mining
Company and 94 shares of stock of the Manila Electric Company, according to the project of partition
executed pursuant to said will and duly approved by the court.

In 1934, the Benguet Consolidated Mining Company declared and distributed stock dividends out of its
surplus profits, the petitioner OROZCO received his proportionate portion of 11,428 shares. In 1939, said
Mining Company again declared stock dividends out of its surplus profits, of which the OROZCO
received 17,142 shares, making a total of 28,570 shares.

Issue: Whether the stock dividends should be preserved in favor of the owners or an income or fruits of
the capital which should be given to and enjoyed by the life usufructuary as his own exclusive property.

Held:The stock dividends were income or fruits of the capital which should be given to and enjoyed by
the life usufructuary, OROZCO as his own exclusive property.

Citing the case of Bachrach vs. Seifert, a dividend, whether in the form of cash or stock, is income and,
consequently, should go to the usufructuary, taking into consideration that a stock dividend as well as a
cash dividend can be declared only out of profits of the corporation, for if it were declared out of the
capital it would be a serious violation of the law.
Respondents SALVADOR ARANETA ET AL. attempted to differentiate the present case from the
Bachrach case, contending that, while the doctrine in that case effected a just and equitable distribution,
the application of it in the present case would cause an injustice, for, quoting Justice Holmes, "abstract
propositions do not decide concrete cases."

One of the differences pointed out is that by the declaration of stock dividends the voting power of the
original shares of stock is considerably diminished, and, if the stock dividends are not given to the
remaindermen, the voting power of the latter would be greatly impaired. Bearing in mind that the number
of shares of stock of the Benguet Consolidated Mining Company is so large, the diminution of the voting
power of the original shares of stock in this case cannot possibly affect or influence the control of the
policies of the corporation which is vested in the owners of the great block of shares. This would not be a
sufficient reason for modifying the doctrine of the Bachrach case. These remarks were made in answer to
the argument of the appellees in this particular case, but they do not imply that if the diminution of the
voting power were considerable the doctrine should be modified.
Digested by: Vienna Mae J. Miranda
Rights of the Usufructuary

JUAN PEREZ, LUIS KEH, CHALIE LEE and ROSENDO TANSINSIN JR vs. COURT
OF APPEALS, LUIS CRISOSTOMO and VICENTE ASUNCION
G.R. No. 107737. October 1, 1999
GONZAGA-REYES, J.:
FACTS:
Along with Maria Perez, Fructosa, Victoria, Apolonio Lorenzo and Vicente
Asuncion, petitioner Juan Perez is a usufructuary of Papaya Fishpond in Bulacan who
entered into a contract leasing the fishpond to Luis Keh for 5 years renewable for
another 5 years. The contract states that Keh cannot sublease nor assign his rights to
anyone. Respondent Crisostomo, a businessman engaged in the operation of fishponds
was persuaded by his friend Ming Cosim and Charlie Lee to take over the fishpond as
Lee and his partner Keh were allegedly losing money in its operation.They executed a
written agreement denominated as pakiaobuwis. Crisostomo paid for the rental, value of
milkfish and labor expenses toKeh initially and paid the balance to Lee. Crisostomo
incurred expenses for repairs and improvements of the fishpond however,Tansinsin and
Juan Perez went to the fishpond together with armed men and claimed that Keh had
surrendered possession of the fishpond to the usufructuaries. Crisostomo then filed in
the Court of First Instance an action for injunction and damages, praying for the
issuance of a restraining order enjoining Keh, Lee and Perez from entering the
premises and taking possession of the fishpond and later proposed to allow him to
occupy the property for 3 more years but Perez declined. Lower court arrived at the
conclusion that the Perez, Keh and Lee conspired with one another to exploit the
Crisostomo’s naivete and educational inadequacies to defraud him by inducing him
into taking possession of the Fishpond in their fond hope that, as soon as he applies his
known expertise as a successful fishpond operator shall have considerably improved
the fishpond, they will regain possession of the premises and offer the lease thereof to
other interested parties at much higher rental rates as laid bare by supervening realities.
Defendants elevated the case to Court of Appeals who affirmed the decision of the trial
court and declared intervenor-appellant Vicente Asuncion as co-usufructuaryof the
fishpond.

ISSUE:
Can a co-usufructuary intervene in a litigation for the purpose of asserting a
property right?

RULING:
YES.
Vicente Asuncion intervened pro interessesuo or according to his interest.
Intervention pro interessesuo is a mode of intervention in equity wherein a stranger
desires to intervene for the purpose of asserting a property right in the res, or thing,
which is the subject matter of the litigation, without becoming a formal plaintiff or
defendant, and without acquiring control over the course of a litigation, which is
conceded to the main actors therein.
In this case, intervenor Vicente Asuncion aimed to protect his right as a
usufructuary. Inasmuch as he has the same rights and interests as petitioner Juan
Perez, any judgment rendered in the latter’s favor entitled him to assert his right as such
usufructuary against his co-usufructuary. Should said intervenor claim his share in the
usufruct, no rights of the petitioners other than those of Juan Perez would be prejudiced
thereby.
Asuncionsought to intervene in the case simply to protect his right as
usufructuary in the money deposited in the court by the plaintiff Luis Crisostomo. The
Court hold that in allowing the intervention in this case the trial court acted with
prudence and exercised its discretion wisely.
Digested by: Vienna Mae J. Miranda
Rights of the Usufructuary

Estate of the deceased RosendoHernaez. RAFAEL R. ALUNAN, administrator-


appellee vs. ELEUTERIA VELOSO, opponent-appellant
G.R. No. L-29158 December 29, 1928
AVANCEÑA, C. J.:
FACTS:

This case deals with an account filed in these intestate proceedings for the
settlement of the estate of the deceased RosendoHernaez by his judicial administrator,
Rafael Alunan. Jose Hernaez, one of the heirs interested in this proceedings, assigned
the whole of his portion to Eleuteria Ch. Velos- who objects to some of the items of the
account filed, assigning errors to the resolution of the lower court. One of the errors
questioned hereinis that the lower court having admitted the partition proposed by the
administrator in his account. According to this account, the total amount to be
partitioned among the heirs is P88,979.08, which the administrator distributed equally
among all the heirs, including the widow's each one receiving P11,122.38. This partition
is object to with respect to the widow’s right of a usufructuary.

ISSUE:

Can money be an object of usufruct?

RULING:

YES.

In this case, it was alleged that the distributed amount is in money, and since the
widow's right is only a usufruct, and as there can be no usufruct of money, since it is a
fungible thing, the adjudication made to the widow was erroneous.

However, the Supreme Court stated that it is incorrect to say that there can be no
usufruct of money, because it is a fungible thing (Art. 482, Civil Code). Thus, Money can
be considered an object of usufruct.
Digested by: Vienna Mae J. Miranda
Rights of the Usufructuary

MERCEDES MORALIDAD vs.SPS. DIOSDADO PERNES and ARLENE PERNES


G.R. No. 152809 August 3, 2006
GARCIA, J.:
FACTS:
Petitioner Mercedes Moralidad worked abroad and would come home to the
Philippines to spend her vacation staying in Mandug, Davao City, in the house of her
niece, respondent Arlene Pernes. In 1986, she received news from Arlene that Mandug
was infested by NPA rebels and many women and children were victims of crossfire.
She immediately sent money to Araceli, Arlene’s older sister, with instructions to look for
a lot in Davao City. Moralidad acquired the subject lot property situated at Palm Village
Subdivision, Bajada, initially for the purpose of letting Arlene move from Mandug to
Davao City proper but later she wanted the property to be also available to any of her
kins wishing to live and settle in Davao. She made known this intention in a document
she executed on July 21, 1986.
In 1993, petitioner came back to the Philippines to stay with the respondents’ on
the house they build on the subject property. Their relations turned sour because
thePernes family were impervious to her suggestions and attempts to change certain
practices concerning matters of health and sanitation within their compound.
Moralidawent to the local barangay lupon where she lodged a complaint for slander,
harassment, threat and defamation against the Pernes Family and ordered Pernes to
vacate the property but not after they are reimbursed for the value of the house they
built. Unfortunately, parties could not agree on the amount.Moralidad then lodged a
formal complaint before the Regional Office of the Ombudsman for Mindanao, charging
the respondent spouses, who were both government employees, with conduct
unbecoming of public servants but did not prosper. Later she filed with the MTCC of
Davao City an unlawful detainer suit. MTCC, resolving the ejectment suit in Moralida’s
favor. Pernes appealed to the RTC who reversed that of the MTCC, holding that
respondents’ possession of the property in question was not, as ruled by the latter court,
by mere tolerance of the petitioner but rather by her express consent and that what
governed in the parties’ relationship are Articles 448 and 546 of the Civil Code as
Pernes builders in good faith and possessors of the property by permission from
Moralida. Moralida went to the CA who dismissed the complaint for Unlawful Detainer
and ruled that what governs the rights of the parties is the law on usufruct but only
Moralida failed to establish that Pernes’ right to possess had already
ceased/terminated.

ISSUE:
Is the existing usufruct may be deemed to have been extinguished or
terminated?

RULING:
YES.
The term or period of the usufruct originally specified provides only one of the
bases for the right of a usufructuary to hold and retain possession of the thing given in
usufruct. There are other modes or instances whereby the usufruct shall be considered
terminated or extinguished.
ART. 603. Usufruct is extinguished:
(1) By the death of the usufructuary, unless a contrary intention clearly appears;
(2) By expiration of the period for which it was constituted, or by the fulfillment
of any resolutory condition provided in the title creating the usufruct;
(3) By merger of the usufruct and ownership in the same person;
(4) By renunciation of the usufructuary;
(5) By the total loss of the thing in usufruct;
(6) By the termination of the right of the person constituting the usufruct;
(7) By prescription. (Emphasis supplied.)

Paragraph #3 of the document Moralida executed states "That anyone of my kins


may enjoy the privilege to stay therein and may avail the use thereof. Provided,
however, that the same is not inimical to the purpose thereof". The preceding paragraph
made it abundantly clear "that anybody of my kins who wishes to stay on the
aforementioned property should maintain an atmosphere of cooperation, live in
harmony and must avoid bickering with one another." That the succeeding Paragraph
#4 where it was stated "That anyone of my kins who cannot conform to the wishes of
the undersigned may exercise the freedom to look for his own" constitutes a resolutory
condition which, by express wish of Moralida, extinguishes the usufruct.

To reiterate, the relationship between the oralida and Pernes respecting the
property in question is one of owner and usufructuary. Accordingly, Pernes’ claim for
reimbursement of the improvements they introduced on the property during the
effectivity of the usufruct should be governed by applicable statutory provisions and
principles on usufruct.By express provision of law, respondents, as usufructuary, do not
have the right to reimbursement for the improvements they may have introduced on the
property as provided in Articles 579 and 580 of the Civil Code. The respondents may,
however, remove or destroy the improvements they may have introduced thereon
without damaging the petitioner’s property.
Digested by: Vienna Mae J. Miranda
Obligations of the Usufructuary

BISLIG BAY LUMBER COMPANY. INC., PLAINTIFF AND APPELLEE, VS. THE
PROVINCIAL GOVERNMENT OP SURIGAO, DEFENDANT AND APPELLANT
G.R. No. L-9023. November 13, 1956

BAUTISTA ANGELO, J.:

FACTS:

Bislig Bay Lumber Co., Inc. is a timber concessionaire of a portion of public forest
located in the provinces of Agusan and Surigao.To develop and exploit its concession,
the company constructed at its expense a road from the barrio Mangagoy into the area
of the concession. . The expenses incurred by the company in the road construction is
P113,370, upon which the provincial assessor of Surigao assessed a tax in the amount
of P669.33. This was paid under protest but later, the company filed an action for its
refund in the Court of First Instance of Manila alleging that the road is not subject to tax.
Province of Surigao filed a motion to dismiss on two grounds (1) that the venue is
improperly laid, and (2) that the complaint states no -cause of action; but this motion
was denied. In the meantime, Congress approved Republic Act No. 1125 creating the
Court of Tax Appeals, whereupon Bislig Bay moved that the case be forwarded to the
latter court as required by said Act. This motion however, was denied and, after due
trial, the court rendered decision ordering Province of Surigao to refund to Bislig Bay
the amount claimed in the complaint.
The first error assigned refers to the jurisdiction of the lower court. It is contended
that since the present case involves an assessment of land tax the determination of
which comes under the exclusive jurisdiction of the Court of Tax Appeals under
Republic Act No. 1125. The lower court erred in assuming jurisdiction over the case.
The primordial purpose behind the approval of said Act by Congress is to give to the
Court of Tax Appeals exclusive appellate jurisdiction 'over all tax, customs, and real
estate assessment cases throughout the Philippines and to hear and decide them as
soon as possible”.
The theory of Province of Surigaois that, inasmuch as the road was constructed
by Bislig Bay for its own use and benefit it is subject to real tax even if it was
constructed on a public land.
Theory of Bislig Bay is that the road is exempt from real tax because (1) the road
belongs to the national government by right of accession, (2) the road cannot be
removed or separated from the land on which it is constructed and so it is part and
parcel of the public land, and (3), according to the evidence, the road was built not only
for the use and benefit of appellee but also of the public in general.

ISSUE:
Does a usufructuarybe compelled to pay taxes of the road they constructed
which the government owns?

RULING:

No.
The Supreme Court upheld the theory of Bislig Bay that the ownership of the
road that was constructed by them belongs to the government by right accession not
only because it is inherently incorporated or attached to the timber land leased to
appellee but also because upon the expiration of the concession, said road would
ultimately pass to the national government. In the second place, while the road was
constructed by Bislig Bay primarily for its use and benefit, the privilege is not exclusive,
for, under the lease contract entered into by them and the government and by public in
by the general. , the road in question cannot be considered as an improvement which
belongs to appellee, although in part is for its benefit, it is clear that the same cannot be
the subject of assessment within the meaning of section 2 of Commonwealth Act No.
470.

It is well settled that a real tax, being a burden upon the capital, should be paid
by the owner of the land and not by a usufructuary (Mercado vs. Rizal, 67 Phil., 608;
Article 597, new Civil Code). Appellee is but a partial usufructuary of the road in
question.
Digested by: Vienna Mae J. Miranda
Obligations of the Usufructuary

BOARD OF ASSESSMENT APPEALS OF ZAMBOANGA DEL SUR, ET AL. VS.


SAMAR MINING CO. INC.
G.R. No. L-28034. February 27, 1971
ZALDIVAR, J.:
FACTS:
Samar Mining is a domestic corporation engaged in the mining industry. It
decided to construct a gravel road which would traverse public lands as a convenient
means of hauling its ores from the mine site at Buug to the pier area
at Pamintayan, Zamboanga del Sur.They filed with the Bureau of Lands and the Bureau
of Forestry miscellaneous lease applications for a road right of way on lands under the
jurisdiction of said bureaus where the proposed road would traverse; that having been
given temporary permit to occupy and use the lands applied for by it, Samar Mining
constructed a road thereon, known as the Samico roa. On June 5,
1964, Samar received a letter from the Provincial Assessor assessing the 13.8
kilometer roadconstructed by it for real estate tax purposes in the total of Php1,
117,900.00. Samar appealed to the Board of Assessment Appeals contesting the
validity of the assessment upon the ground that the road having been constructed
entirely on a public land cannot be considered an improvement subject to tax within the
meaning of section 2 of Commonwealth Act 470, and invoking further the decision or
this Court in the case of Bislig Bay Lumber Company, Inc. vs. The Provincial
Government of Surigao. The Board, dated December 22, 1964, affirmed the validity of
the assessment made by the Provincial Assessor.
Samar then elevated the case to the Court of Tax Appeals who ruled that it had
jurisdiction to entertain the appeal and then reversed the resolution of the Board and
that since the road is constructed on public lands such that it is an integral part of the
lands and not an independent improvement thereon, and that upon the termination of
the lease the road as an improvement will automatically be owned by the national
government, Samar should be exempt from paying the real estate tax assessed against
it. Petitioners Board and Placido L. Lumbay, as Provincial Assessor
of Zamboanga del Sur, interposed the present petition for review before the Supreme
Court.

ISSUE:
ShouldSamar pay realty tax on the road it constructed on alienable or disposable
public lands of the government?

RULING:

No.
There is no question that the road constructed by respondent Samar on the
public lands leased to it by the government is an improvement. But as to whether the
same is taxable under the provision of the Assessment Law, this question has already
been answered in the negative by this Court. In the case of Bislig Bay Lumber Co., Inc.
vs. Provincial Government of Surigao, 100 Phil., 303, where a similar issue was raised
as to whether the timber concessionaire should be required to pay realty tax for the road
it constructed at its own expense within the territory of the lumber concession granted to
it, this Court, after citing Section 2 of Commonwealth Act 470.
Petitioner’s contention that the Bislig case is not applicable in the present case
because the concessionaire in the Bislig case was exempt from paying the realty tax
because the road in that case was constructed on a timberland or on an indisposable
public land, while in the instant case the road is traversing alienable public lands. This
contention has no merit. What is emphasized in the Bislig case is that the improvement
is exempt from taxation because it is an integral part of the public land on which it is
constructed and the improvement is the property of the government by right of
accession. Under Section 3(a) of the Assessment Law (Com. Act 470), all properties
owned by the government, without any distinction, are exempt from taxation.
Digested by: Nenaria, Janine Louise Mae E.

JOSEFA RIZAL MERCADO v. ALFREDO HIDALGO RIZAL

G.R. No. L-45534

April 27, 1939

Avancena C.J.

Facts:

The properties in dispute are left by the deceased Paciano, belonged in usufruct,
to nine heirs and, in naked ownership, to seven others. The naked owners made the
plaintiffs pay for one-ninth of the taxes paid during the years. As the plaintiffs were not
agreeable to this payment, because they were mereusufructuaries and they contend
that the duty devolves upon the naked owners, this amount was deducted from the
products corresponding to them and applied to the payment of land tax.

The naked owners, with the exception of the defendant, agreed with this
contention and paid to each of the plaintiffs deducted from the products of the land
corresponding to the plaintiffs. The present action was brought to compel the defendant
to pay also to the plaintiffs the amount of P206.47.

Issue:

Whether the plaintiffs can demand payment to defendant?

Held:

Yes, Article 505 of the Civil Code provides:


Any taxes which may be imposed directly upon the capital, during the
usufruct, shall be chargeable to the owner.

If paid the latter, the usufructuary shall pay him the proper interest on any
sums he may have disbursed by reason thereof; if the usufructuary should
advance the amounts of such taxes he shall recover them upon the
expiration of the usufruct.

Pursuant to the aforequoted provision, the tax directly burdens the capital, that is,
the real value of the property and should be paid by the owner. The plaintiffs, in claiming
the amount, do not rely on paragraph 2 of article 505 of the Civil Code above quoted, for
having paid the tax on the lands, but on the first paragraph thereof because it is their
contention that, as usufructuaries, they are not the ones called upon to make this
payment.
Digested by: Nenaria, Janine Louise Mae E.

MAXIMA HEMEDES v. THE HONORABLE COURT OF APPEALS

G.R. No. 107132

October 8, 1999

Gonzaga-Reyes, J.

Facts:

Jose Hemedes executed a document entitled Donation Inter


VivosWithResolutory Condition whereby he conveyed ownership over the subject land,
together with all its improvements, in favor of his third wife, JustaKauapin. Pursuant to
the first condition, JustaKausapin executed a Deed of Conveyance of Unregistered Real
Property by Reversion conveying to Maxima Hemedes the subject property except the
possession and enjoyment of the said property which shall remain vested in
JustaKausapin during her lifetime and which upon her death or remarriage shall also
automatically revert to, and be transferred to Maxima Hemedes.

Maxima Hemedes and her husband Raul Rodriguez constituted a real estate
mortgage over the subject property in its favor to serve as security for a loan. R & B
Insurance extrajudicially foreclosed the mortgage since Maxima Hemedes failed to pay
the loan even after it became due.

JustaKausapin transferred the same land to her stepson Enrique D. Hemedes,


pursuant to the resolutory condition in the deed of donation executed in her favor by her
late husband Jose Hemedes. Enriques D. Hemedes sold the property to Dominium.
Dominium leased the property to its sister corporation Asia Brewery. Upon learning of
Asia Brewery’s constructions upon the subject property, R & B Insurance sent it a letter
informing the former of its ownership of the property.

Dominium and Enrique D. Hemedes filed a complaint, the complaint alleged that
Dominium was the absolute owner of the subject property by virtue of the deed of sale
executed by Enrique D. Hemedes, who in turn obtained ownership of the land from
JustaKausapin, as evidenced by the Kasunduan. The plaintiffs asserted that
JustaKausapin never transferred the land to Maxima Hemedes and that Enrique D.
Hemedes had no knowledge of the registration proceedings initiated by Maxima
Hemedes.

Issue:

Which of the two conveyances by JustaKausapin, the first in favor of Maxima


Hemedes and the second in favor of Enrique D. Hemedes, effectively transferred
ownership over the subject land?

Held:

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 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 annotation of usufructuary rights in favor of JustaKausapin upon Maxima


Hemedes does not impose upon R & B Insurance the obligation to investigate the
validity of its mortgagors title. Usufruct gives a right to enjoy the property of another with
the obligation of preserving its form and substance. The usufructuary is entitled to all the
natural, industrial and civil fruits of the property and may personally enjoy the thing in
usufruct, lease it to another, or alienate his right of usufruct, even by a gratuitous title,
but all the contracts he may enter into as such usufructuary shall terminate upon the
expiration of the usufruct.

Only the jus utendi and jus fruendi over the property is transferred to the
usufructuary. The owner of the property maintains the jus disponendi or the power to
alienate, encumber, transform, and even destroy the same. This right is embodied in the
Civil Code, which provides that the owner of property the usufruct of which is held by
another, may alienate it, although he cannot alter the propertys form or substance, or do
anything which may be prejudicial to the usufructuary.

There is no doubt that the owner may validly mortgage the property in favor of a
third person and the law provides that, in such a case, the usufructuary shall not be
obliged to pay the debt of the mortgagor, and should the immovable be attached or sold
judicially for the payment of the debt, the owner shall be liable to the usufructuary for
whatever the latter may lose by reason thereof.
Digested by: Nenaria, Janine Louise Mae E.

ANSELMO CHINGEN v. TOMAS ARGUELLES

G.R. No. 3314

January 3, 1907

Torres, J.:

Facts:

On the 25th of October, 1905, the plaintiff, AnselmoChingen, filed a complaint


praying for judgment against the four defendants herein for one-half of the jewels and
the rent of the property or a half of the amount received by the defendants since the
date they took possession of the legacies left by the deceased Raymunda Reyes in her
will.

The defendant, filed an answer wherein they prayed that the action be dismissed,
they alleged that the legacies referred to in this complaint were unconditional legacies,
specific and definite of property belonging to the testatrix, the value of which legacies
did not exceed one half of the estate of which she could freely dispose, and therefore
were not subject to the right of usufruct which ordinarily would belong to the plaintiff

Issue:

Whether the legacies in this case are subject to the right of usufruct belonging to
the plaintiff?

Held:

No, the property of the estate of the deceased wife having been divided in two
equal parts, the property to which the plaintiff was entitled as an heir under the will
should have been taken out of the one half, subject to the usufruct of the surviving
spouse. This done, the usufruct, is extinguished ipso facto by the merger of such right of
usufruct and ownership in the same person, as provided in paragraph 3 of article 513 of
the Civil Code.

The legacy to which this action relates consists of a house and certain jewels and
is an unconditional legacy without any fixed period, and that the property specified in the
said will and described as being of the exclusive ownership of the testatrix, so that the
legatees were entitled to the property transferred to them from the death of the testatrix,
and as owners of such property were also entitled to the fruits and earnings and any
increase thereof.
Digested by: Nenaria, Janine Louise Mae E.

VDA.de ARANAS v. ARANAS

G.R. No. L-56249

May 29, 1987

Paras, J.:

Facts:

Fr. TeodoroAranas, a priest of the Roman Catholic Church, died. He had


executed his Last Will and Testament in said Last Will and Testament, to which it is
stipulated that: “It is my will that the lands I had bought from other persons should be
converged and placed under a “special administrator.” The special administrator of
these lands, for his office, should receive one half of all the produce from which shall be
deducted the expenses for the administration, and the other half of the produce should
be received by the Roman Catholic Church and should be spent for my soul, Vicente B.
Aranas (Tingting), because he is a faithful and serviceable nephew, should be the first
special administrator of said properties, without bond, until his death or until he should
not want to hold the said office anymore. Anyone of the sons of my brother
CarmeloAranas can hold the said office of special administrator, andnone other than
they. Their father, my brother Carmelo Aranas shall be the one to decide who among
them shall hold the said office, but uponthe death of my said brother Carmelo Aranas,
his said sons will have power to select the one among them ourselves. The special
administration is perpetual.

Issue:

Whether or not the properties under Group C of the testate estate of


the late Fr. TeodoroAranas are subject to remunerative legacies by way of usufruct of
the net proceeds of 1/2 of the estate after deducting expenses for administration in favor
of Vicente Aranas,during his lifetime and shall continue an administrator of the
estate, and, who, upon his death or refusal to continue such usufruct, may be
succeeded by any of the brothers of theadministrator as selected by their father,
Carmelo Aranas, if still alive or one selected by hissons if, he, Carmelo, is dead

Held:

Yes. It was the sincere intention and desire of the testator to reward
his nephew Vicente Aranas for his faithful and unselfish services by allowing
him to enjoy one-half of the fruits of the testator’s third group of properties
until Vicente’s death and/or refusal to act as administrator in which case, the
administration shall pass to anyone chosen by Carmelo Aranas among his
sons and upon Carmelo’s death, his sons will have the power to select one
among themselves.

Vicente Aranas therefore as a usufructuary has the right to enjoy the


property of his uncle with all the benefits which result from the normal
enjoyment of another’s property, with the obligation to return, at the
designated time,either the same thing, or in special cases its equivalent. This
right of Vicente to enjoy thefruits of the properties is temporary and therefore
not perpetual as there is a limitationnamely his death or his refusal. Likewise
his designation as administrator of these propertiesis limited by his refusal
and/or death and therefore it does not run counter to Art. 870 of theCivil
Code relied upon by the petitioners. Be it noted that Vicente Aranas is not
prohibited todispose of the fruits and other benefits arising from the usufruct.
Neither are the nakedowners of the properties, the usufruct of which has
been given to VicenteAranas prohibited from disposing of said naked
ownership without prejudice of course toVicente’s continuing usufruct.
Digested by: Nenaria, Janine Louise Mae E.

THE CITY OF MANILA v. EL MONTE DE PIEDAD

G.R. No. 1975

November 10, 1905

Willard, J.

Facts:

On the 6th day of July, 1887, the City of Manila adopted a Resolution which was
approved by the Governor-General of these Islands, the superior authority therein
mentioned. The defendant constructed its building upon the land in question, where it
has since remained. From its construction until the present time the building has been
and is now devoted to the purposes mentioned to the Petition and Resolution.

On the 14th of May 1901, the defendant presented a petition asking that its
possession as owner of the land and building in question be inscribed in accordance
with the provisions of Article 390 of the Mortgage Law. On the 13th of October 1903, the
plaintiff brought this action against the defendant, asking that the above-mentioned
inscription be canceled, and that the judgment be entered in favor of the plaintiff for the
possession of the property.

Issue:

Did the laws in force in these lands, at the time this grant was made in 1887,
impose the penalty of forfeiture upon a person in the condition of the defendant who
asserted a claim to the ownership of the land?

Held:
No, its claim is that the defendant is to be considered as a usufructuary, and that
by claiming to be the owner of the property it surrendered its rights as such
usufructuary. The surrender mentioned in Paragraph 4 of Article 513 does not include
such an act as this. It refers to a voluntary surrender of the very rights which the
usufructuary has, made by him with the intent to so surrender them. It does not relate to
a forfeiture which may be claimed to be the result of some act performed by the
insufructuary inconsistent with the relation which exists between him and the owner of
the property. The appellant, however, seems to rely chiefly upon the law in force in the
United States upon this point.
Digested by Jose Luis P. Pacquiao

RAMONA R. LOCSIN, accompanied by her husband RENATO L. LOCSIN;


TERESITA R. GUANZON, accompanied by her husband ROMEO G. GUANZON;
CELINA R. SIBUG; accompanied by her husband CARLOS V. SIBUG; MA. LUISA
R. PEREZ, accompanied by her husband JOSE V. PEREZ; EDITHA R. YLANAN,
accompanied by her husband CARLOS W. YLANAN; and ANA MARIE R.
BENEDICTO, accompanied by her husband JOSE LUIS U.
BENEDICTO, petitioners,
vs.
HONORABLE JUDGE VICENTE P. VALENZUELA, Judge of the Court of First
Instance of Negros Occidental, Branch III and SPOUSES JOSEPH SCHON, and
HELEN BENNETT SCHON, respondents.

G.R. No. L-51333 May 18, 1989

FELICIANO, J.

FACTS
Petitioners Locsin and others were co-owners of a large tract of agricultural land
known as "Hacienda Villa Regalado" located in Canlaon City, Negros Occidental, with
an area of 3,033,048 square meters. A portion of this land, consisting of an area of
60.07464 hectares, was subject to the lifetime usufructuary rights of respondent Helen
Schon. The bulk of this lot was cultivated by the lessees-tenants who customarily
delivered the rental to Helen Schon.

Subsequently, PD No. 27 decreeing “Emancipation of Tenants” was


promulgated, and the land owned owned in common by the petitioners, including the
portion thereof subject to Helen Schon's usufructuary rights, fell within the scope of
"Operation Land Transfer." Petitioners through sought the opinion of the Department of
Agrarian Reform (DAR) as to who should be entitled to receive the rental payments
which continued to be made by the respondent tenants to Helen Schon.

Petitioners first filed against spouses Schon in the Court of First Instance, and
after five months, in the Court of Agrarian Relations (CAR). The complaint in the CAR
was dismissed due to lack of jurisdiction to decide such case. The said decision was
appealed to the Court of Appeals but was ultimately referred to the Supreme Court. As
to the CFI complaint, it was also dismissed on the ground that it should be the CAR that
had jurisdiction over the case.

ISSUES
1. Who has jurisdiction as to cases involving usufructuary?
2. Who should be the rightful party to receive payments from the tenants?
HELD
1. The Regional Trial Courts have full authority and jurisdiction to interpret and
apply both the mass of statutes and rules and regulations relating to land
reform and the general civil law, including the law on usufruct. A regional trial
court seized of an agrarian dispute and interpreting and applying statutes and
administrative rules and regulations concerning land reform and the
sliminations of agricultural tenancy relationships, continues to act as a court
of general and plenary jurisdiction.

Jurisdiction over both cases is clearly vested in the appropriate Regional Trial
Court in view of the provisions of Section 19 (7) of Batas Pambansa Blg. 129
which was enacted by the Batasang Pambansa on August 1981 and fully
implemented on February 1983.

Section 19. Jurisdiction in Civil Cases. — Regional Trial Courts shall


exercise exclusive original jurisdiction:

xxx xxx xxx

(7) In all civil actions and special proceedings falling within the
exclusive origin al jurisdiction of juvenile and domestic relations courts
and of the courts of agrarian relations as now provided by law;

xxx xxx xxx

2. The pleadings and the records of these two cases are bare of any substantial
discussion by the parties on both issues, the Court feels it would not be
prudent to resolve those issues without further proceedings. The issues are
primarily, if not wholly, issues of law rather than of fact and that hence there
appears no need to remand these cases to the Regional Trial Court for further
proceedings there.

Instead, the court shall require the parties to file memoranda on the issues
above indicated, and the direct the Solicitor General to intervene in these
cases and to file a memorandum addressing the same issues.
Digested by Jose Luis P. Pacquiao

MERCEDES MORALIDAD, Petitioner,


vs.
SPS. DIOSDADO PERNES and ARLENE PERNES, Respondents.

G.R. No. 152809 August 3, 2006

GARCIA, J.

FACTS
Petitioner Moralidad worked and studied in the United States for years until
retirement. She usually stays in the house of respondent Arlene Pernes at Mandug,
Davao City during her vacation and that in 1986, when she received news from Arlene
that Mandug was infested by NPA rebels, she immediately sent money to buy a lot in
Davao City proper where Arlene and her family could transfer and settle down.

Moralidad subsequently bought a parcel of land in Davao City, which she allowed
the respondent spouses to build their house and stay as long as they want, including
anyone of petitioner’s kins, provided that they should maintain an atmosphere of
cooperation and live in harmony. Petitioner made known this intention in a document
she executed.

Petitioner Moralidad came back to the Philippines to stay with the respondents,
on the house they build on the subject property. As time went by, their relations turned
sour which resulted in violent confrontations and the filing of suits at the barangay lupon
and to the Ombudsman because the respondents were public servants, and at the
MTCC, an ejectment suit for unlawful detainer. The MTCC rendered judgment for the
petitioner directing the defendants to vacate the premises and to yield peaceful
possession thereof to plaintiff.

Respondent spouses appealed to the RTC where the decision of the MTCC was
reversed, holding that respondents’ possession of the property in question was not by
mere tolerance of the petitioner but rather by her express consent. It further ruled that
Article 1678 of the Civil Code on reimbursement of improvements introduced is
inapplicable since said provision contemplates of a lessor-lessee arrangement, which
was not present in the case.

Petitioner went to the CA wherein her petition was denied and ruled that what
governs the rights of the parties is the law on usufruct but petitioner failed to establish
that respondents’ right to possess had already ceased.

ISSUES
1. Was the right given by petitioner Moralidad to the respondents, a right of
usufructuary?
2. Did the existing usufruct deemed to have been extinguished or terminated?

HELD
1. Yes. The Court is inclined to agree with the CA that what was constituted
between the parties herein is one of usufruct over a piece of land, with the
petitioner being the owner of the property upon whom the naked title thereto
remained.

Usufruct is defined under Article 562 of the Civil Code in the following wise:

ART. 562. Usufruct gives a right to enjoy the property of another with
the obligation of preserving its form and substance, unless the title
constituting it or the law otherwise provides.

Usufruct, in essence, is nothing else but simply allowing one to enjoy


another’s property. It is also defined as the right to enjoy the property of
another temporarily, including both the jus utendi and the jus fruendi, with
the owner retaining the jus disponendi or the power to alienate the same.

It is undisputed that petitioner, in a document dated July 1986 made known


her intention to give respondents and her other kins the right to use and to
enjoy the fruits of her property. There can also be no quibbling about the
respondents being given the right "to build their own house" on the property
and to stay thereat "as long as they like."

2. Yes. What may be inimical to the purpose constituting the usufruct may be
gleaned from the document executed by petitioner wherein it made clear
"that anybody of my kins who wishes to stay on the aforementioned property
should maintain an atmosphere of cooperation, live in harmony and must
avoid bickering with one another." That the maintenance of a peaceful and
harmonious relations between and among kin constitutes an indispensable
condition for the continuance of the usufruct is clearly deduced from the
succeeding Paragraph #4 of the document, where petitioner stated "[T]hat
anyone of my kins who cannot conform with the wishes of the undersigned
may exercise the freedom to look for his own."

In fine, the occurrence of any of the following: the loss of the atmosphere of
cooperation, the bickering or the cessation of harmonious relationship
between/among kin constitutes a resolutory condition which, by express wish
of the petitioner, extinguishes the usufruct.

The Court rules that the continuing animosity between the petitioner and the
Pernes family and the violence and humiliation she was made to endure,
despite her advanced age and frail condition, are enough factual bases to
consider the usufruct as having been terminated.
Digested by Jose Luis P. Pacquiao

LEO WEE, Petitioner


- versus -
GEORGE DE CASTRO (on his behalf and as attorney-in-fact of ANNIE DE
CASTRO and FELOMINA UBAN) and MARTINIANA DE CASTRO, Respondents

G.R. No. 176405 August 20, 2008

CHICO-NAZARIO, J.

FACTS
Respondent De Castro rented out the property to petitioner Wee on a monthly
basis of Php 9,000.00 per month. Both parties agreed that effective 1 October 2001, the
rental payment shall be increased from P9,000 to P15,000. Petitioner Wee
subsequently failed to pay the increase on rent.

The rental dispute was brought to the Barangay. Since they failed to reach an
amicable settlement, a Certificate was issued. George de Castro, together with his
siblings and co-owners, Annie de Castro, Felomina Peaches de Castro Uban and Jesus
de Castro, filed the Complaint for ejectment before the MTC. Petitioner, on the other
hand, countered that there was no agreement between the parties to increase the
monthly rentals and respondents demand for an increase was exorbitant. The agreed
monthly rental was only for the amount of P9,000.00 and he was religiously paying the
same every month.

MTC dismissed the case for failure to comply with the prior conciliation
requirement before the Barangay Lupon. RTC affirmed the dismissal. Since no
concession was reached by the parties to increase such amount to P15,000, petitioner
cannot be faulted for paying only the originally agreed upon monthly rentals. The Court
of Appeals denied the motion for reconsideration interposed by the petitioner for lack of
merit.

ISSUE
Is petitioner Wee liable for the loss of income of from the property for refusal to vacate
the leased premises?

HELD
Yes. Petitioner is liable for the payment of back rentals, attorneys fees and cost
of the suit. Respondents must be duly indemnified for the loss of income from the
subject property on account of petitioners refusal to vacate the leased premises. The
contract of lease between the parties did not stipulate a fixed period. Hence, the parties
agreed to the payment of rentals on a monthly basis. On this score, Article 1687 of the
Civil Code provides:
Art. 1687. If the period for the lease has not been fixed, it is understood to be
from year to year, if the rent agreed upon is annual; from month to month, if it is
monthly; from week to week, if the rent is weekly; and from day to day, if the rent
is to be paid daily. However, even though a monthly rent is paid, and no period
for the lease has been set, the courts may fix a longer term for the lease after the
lessee has occupied the premises for over one year. If the rent is weekly, the
courts may likewise determine a longer period after the lessee has been in
possession for over six months. In case of daily rent, the courts may also fix a
longer period after the lessee has stayed in the place for over one month.
(Emphasis supplied.)

The rentals being paid monthly, the period of such lease is deemed terminated at
the end of each month. Thus, respondents have every right to demand the ejectment of
petitioners at the end of each month, the contract having expired by operation of
law. Without a lease contract, petitioner has no right of possession to the subject
property and must vacate the same. Respondents, thus, should be allowed to resort to
an action for ejectment before the MTC to recover possession of the subject property
from petitioner.
Digested by Jose Luis P. Pacquiao

JESUS CUENCO, Petitioner

- versus -

TALISAY TOURIST SPORTS COMPLEX, INCORPORATED AND MATIAS B. AZNAR


III, Respondents

GR No. 174154 October 17, 2008

NACHURA, J.

FACTS
Petitioner leased from respondents for a period of two (2) years, the Talisay
Tourist Sports Complex, to be operated as a cockpit. The lease was extended for
another four (4) years, or until May 1998. Upon expiration of the contract, petitioner
wrote four demand letters to respondents, which stated reiterating the request of
petitioner for the return of his deposit. As all of his demand letters remained unheeded,
petitioner filed a Complaint for sum of money, damages and attorneys fees. He
maintained that respondents acted in bad faith in withholding the amount of the deposit
without any justifiable reason.

In their Answer, respondents countered that petitioner caused physical damage


to some portions of the leased premises and the cost of repair and replacement of
materials amounted to more than P500,000.00.They also averred that respondent
Aznar cannot be sued personally under the contract of lease since a corporation has a
separate and distinct personality from its officers and stockholders, and there was no
allegation that Aznar, who is the President of the corporation, signed the contract in his
personal capacity.

The RTC rendered a Decision in favor of petitioner. The RTC ratiocinated that
respondent’s failure to reply to the letters of petitioner raises a presumption that
petitioner has complied with his end of the contract. The Respondents appealed and the
CA rendered a Decision reversing and setting aside the decision of the RTC.

ISSUE
Is petitioner entitled to the amount deposited by him?

HELD
Yes. Respondents failed to present sufficient proof to warrant the retention of the
full amount of the deposit given by petitioner. However, the two months over-stay of
petitioner in the leased premises should be charged against the deposit.
Since there was no renewal of the lease contract, it is understood that the
continued use of the premises was on a monthly basis with the rental in the amount
previously agreed upon by the parties, in accordance with Articles 1670 and 1687 of the
Civil Code. Talisay Sports Complex, Inc. is solely liable to return the amount of the
deposit after deducting the amount of the two-months arrears in rentals.
Digested by Jose Luis P. Pacquiao

HERNANIA "LANI" LOPEZ, Petitioner,


vs.
GLORIA UMALE-COSME, Respondent

G.R. No. 171891 February 24, 2009

PUNO, C.J.

FACTS
Respondent Umale-Cosme is the owner of an apartment building at Sta. Mesa
Heights, Quezon City, while the petitioner is a lessee of one of the units therein. She
was paying a monthly rent of ₱1,340.00 as of 1999.

Subsequently, respondent filed a complaint for unlawful detainer against


petitioner before Branch 43 of the Metropolitan Trial Court (MeTC) of Quezon City on
the grounds of expiration of contract of lease and nonpayment of rentals from
December 1998. In her answer, petitioner denied that she defaulted in the payment of
her monthly rentals, claiming that respondent did not collect the rentals as they fell due
in order to make it appear that she was in arrears. Petitioner also alleged that she had
been depositing her monthly rentals in a bank in trust for respondent since February
1999.

The MeTC rendered judgment in favor of respondent. On appeal, the RTC


reversed the decision of the MeTC and ruled that the contract of lease between
respondent and petitioner lacked a definite period. According to the RTC, the lessee
may not be ejected on the ground of termination of the period until the judicial
authorities have fixed such period.

Respondent’s motion for reconsideration was denied by the RTC and the
respondent repaired to the CA, which found merit in her appeal. The CA denied
petitioner’s Motion for Reconsideration and as a consequence, petitioner filed the
instant petition for review, where she argues that the CA gravely erred when it ruled that
she may be ejected on the ground of termination of lease contract.

ISSUE
Should petitioner Lopez be ejected from the property she leased from respondent
Umale-Cosme?

HELD
Yes. It is well settled that where a contract of lease is verbal and on a monthly
basis, the lease is one with a definite period which expires after the last day of any
given thirty-day period.
Corollarily, petitioner’s ejectment, in this case, is only the reasonable
consequence of his unrelenting refusal to comply with the respondents’ demand for the
payment of rental increase agreed upon by both parties. Verily, the lessor’s right to
rescind the contract of lease for non-payment of the demanded increased rental was
recognized by this Court.

In the case at bar, it has been sufficiently established that no written contract
existed between the parties and that rent was being paid by petitioner to respondent on
a month-to-month basis. As the CA noted, petitioner admitted the lack of such written
contract in her complaint. Moreover, in the instant petition for review, petitioner herself
alleged that she has been occupying the leased premises and paying the monthly
rentals without fail since 1975. Hence, petitioner’s argument that the contract of lease
between her and respondent lacked a definite period and that corollarily, she may not
be ejected on the ground of termination of period does not hold water.
Digested by: Julie Ann A. Salcedo

ERMINDA F. FLORENTINOvs.SUPERVALUE, INC.


G.R. No. 172384, September 12, 2007
CHICO-NAZARIO, J.

Facts:

Florentino is the sole proprietor of Empanada Royale, while the


Supervalue is a corporation which leases stalls and commercial store spaces in
SM. Both parties executed 3 contracts to lease cart-type stalls in SM, each with
a term of 4 months renewable upon agreement. A month before the renewal
expires, Florentino received 2 letters from Supervalue. The first letter charges them
of violating the Contract of Lease by not opening on December 16 and 26 of
1999; increasing their price without consulting the Supervalue; and frequently
closing early because of the lack of supply, all of which violates the terms of the
contract. The second letter was to inform the Florentino that Supervalue would
not be renewing their contract. The Supervalue confiscated the equipment and
personal belongings of the Florentino found in the stall after the contract expired.
Florentino demanded, through a letter, thatSupervaluemust release the equipment,
their personal belongings and return the security deposit. A month later, the
Florentino sent another letter demanding the same. Supervaluestill refused to
comply. Florentino filed an action for Specific Performance, Sum of Money and
Damages in the RTC.

Florentino claims that Supervalue had always verbally represented that the
contract would be renewed, and so the Florentino introduced improvements in
the store space. Florentinofurther avers that Supervalue refuses to give back the
security deposit, personal belongings and equipment without reason even after
repeated demands. Florentino prays for actual, moral and exemplary damages
plus attorney’s fees. Supervalue reiterated that Florentino violated their contract
and is also liable for electricity and water bills and claims that the confiscation
of the items was in the exercise of its retaining lien because Florentino failed to
settle obligations.

Issue:

Is Florentinoisentitiled to get back security deposit.

Held:
Yes, Is Florentino is entitiledto get back HALF of the security deposit. Article
1678 of the Civil Code states that “If the lessee makes, in good faith, useful
improvements which are suitable to the use for which the lease is intended, without
altering the form or substance of the property leased, the lessor upon the termination of
the lease shall pay the lessee one-half of the value of the improvements at that time.
Should the lessor refuse to reimburse said amount, the lessee may remove the
improvements, even though the principal thing may suffer damage thereby. He shall
not, however, cause any more impairment upon the property leased than is necessary.”
Thus, to be entitled to reimbursement for improvements, Article 1678 should be
read together with 448 and 546, the petitioner must be considered a builder in
good faithSince petitioner’s interest in the store space is merely that of the lessee
under the lease contract, she cannot therefore be considered a builder in good faith.
Consequently, respondent may appropriate the improvements introduced on the leased
premises without any obligation to reimburse the petitioner for the sum expended.
Digested by: Julie Ann A. Salcedo

LAND BANK OF THE PHILIPPINES vs.AMS FARMING


G.R. No. 174971, October 15, 2008
CHICO-NAZARIO, J.
Facts:

The National Abaca and Other Fibers Corporation (NAFCO) was the owner of a
piece of agricultural land with an area of 73.7 hectares located in Kapalong, Davao. On
21 September 1970, NAFCO leased a 51-hectare portion of said land to AMS for a
period of 15 years. When Apeco Motors Corporation (APECO) acquired ownership of
the land, the said lease agreement was registered and annotated on its certificate of
title.Upon the expiration of the first lease agreement, APECO and AMS executed on 21
February 1986 a new Lease Agreement over 51.15 hectares of the same agricultural
land, for a period of 10 years.Sometime during the effectivity of the lease, ownership of
the afore-mentioned agricultural land was transferred to TOTCO.

On 15 June 1988, just a little over two years from the execution of the Lease
Agreement between APECO and AMS, Republic Act No. 6657, otherwise known as the
Comprehensive Agrarian Reform Law (CARL), took effect. The CARL espoused the
policy of the State to pursue a Comprehensive Agrarian Reform Program (CARP),
whereby the State undertook the just distribution of all agricultural lands, subject to the
priorities and retention limits set forth in the CARL and to the payment of just
compensation.

On 8 August 1991, four years before the expiration of the existing Lease
Agreement, TOTCO and AMS executed a Memorandum of Agreement (MOA) wherein
they agreed to increase the area leased to 61.65 hectares, and renew the lease for
another 25 years, however, the MOA was never registered.As the lessee of a significant
portion of the agricultural land, AMS developed a banana plantation thereon, cultivating
and planting on the leased property Cavendish banana for export, and introducing the
necessary improvements and infrastructures.

On 9 September 1996, TOTCO submitted to the DAR a voluntary offer to sell


(VOS) of its agricultural land, including the area leased to AMS. Adopting the valuation
made by the LBP, the DAR issued a notice of valuation and acquisition offering the
amount of ₱1,806,754.83 as just compensation for the property. When TOTCO rejected
the proffered amount, the matter was endorsed to the DAR Adjudication Board
(DARAB). Still unsatisfied with the amount of just compensation being offered for its
agricultural land, TOTCO filed on 23 April 1999 with the RTC, acting as a Special
Agrarian Court, a Complaint against the DAR and LBP for the determination of just
compensation.

Issue:

Is the AMS the owner of the standing crops and improvements it introduced on
the leased property thus making it proper for the Department of Agrarian Reform (DAR),
through the LBP, to pay respondent AMS Farming Corporation (AMS) just
compensation for the standing crops and various improvements it introduced on the
land owned by Totco Credit Corporation (TOTCO)?

Held:

Yes. As a lessee, the rights of AMS over its standing crops and improvements on
the leased property are defined, conferred, as well as limited by the provisions of the
MOA it executed with TOTCO on 8 August 1991, in relation to those of the Civil Code.

The Supreme Court must still qualify that the lessee can only avail itself of the
afore-mentioned right to continue the lease contract under its original terms and
conditions until the expiration of the same, and even after the distribution of the land to
the qualified beneficiaries, if the said lease contract was duly registered; because only
when it is registered, will the lease contract be binding on third parties, such as the
CARP beneficiaries.

Other than Section 72(a) thereof, the CARL does not specially govern lease
contracts of private agricultural lands. So that for the determination of the rights of AMS
as a lessee in a lease contract terminated by the sale of the leased property to a third
person (regardless of the fact that the third person was the Republic and the sale was
made pursuant to the CARP), the Court resorts to the general provisions of the Civil
Code on lease contracts; and not the CARL.

Article 1654, Paragraph 3 of the Civil Code provides the obligation of the lessor
“to maintain the lessee in the peaceful and adequate enjoyment of the lease for
the entire duration of the contract”. Moreso, Article1659 states that “If the lessor or
the lessee should not comply with the obligations set forth in articles 1654 and 1657, the
aggrieved party may ask for the rescission of the contract and indemnification for
damages, or only the latter, allowing the contract to remain in force. Also, Article 1676
says that “If the buyer makes use of the right, the lessee may demand that he be
allowed to gather the fruits of the harvest which corresponds to the current
agricultural year and that the vendor indemnify him for damages suffered.”

It is clear that under the Civil Code, the recourse of AMS as a lessee is against
its lessor, TOTCO. Since TOTCO was unable to comply with its obligation to keep AMS
in peaceful and adequate enjoyment of the leased property for the entire duration of the
lease agreed upon in the MOA dated 8 August 1991, then AMS could rescind the MOA.

Digested by: Julie Ann A. Salcedo

TRADERS ROYAL BANK vs. CUISON LUMBER CO., INC


and JOSEFA JERODIAS VDA. CUISON
G.R. No. 174286, June 5, 2009
BRION, J.
Facts:
Filriters through a Detached Agreement transferred ownership to Philfinance a
Central Bank Certificate of Indebtedness. It was only through one of its officers by
which the CBCI was conveyed without authorization from the company. Petitioner and
Philfinance later enteredintoa Repurchase Agreement, on which petitioner bought the
CBCI from Philfinance. The latter agreed to repurchase the CBCI but failed to do so.
When the petitioner tried to have it registered in its name in the CB, the latter didn't want
to recognize the transfer.
Issue:
Is the CBCI is a negotiable instrument?
Held:
No. The instrument provides for a promise to pay the registered owner
Filriters. Very clearly, the instrument was only payable toFilriters. It lacked the word
of negotiability which should have served as an expression of the consent that the
instrument may be transferred by negotiation.
The language of negotiability which characterize a negotiable paper as a
credit instrument is its freedom to circulate as a substitute for money. Hence,
freedom of negotiability is the touchstone relating to the protection of holders in due
course, and the freedom of negotiability is the foundation for the protection, which
the law throws around a holder in due course. This freedom in negotiability is
totally absent in a certificate of indebtedness as it merely acknowledges to pay a
sum of money to a specified person or entity for a period of time.
Clearly shown in the record is the fact that Philfinance’s title over CBCI is
defective since it acquired the instrument from Filriters fictitiously. Although the deed
of assignment stated that the transfer was for ‘value received‘, there was really no
consideration involved. What happened was Philfinance merely borrowed CBCI
from Filriters, a sister corporation. Thus, for lack of any consideration, the assignment
made is a complete nullity. Furthermore, the transfer wasn't in
conformity with the regulations set by the CB. Giving more credence to rule that there
was no valid transfer or assignment to petitioner.
Digested by: Julie Ann A. Salcedo

SERAFIN CHENG vs.SPOUSES VITTORIO and MA. HELEN DONINI


G.R. No. 167017, June 22, 2009

CORONA, J.
Facts:

Cheng agreed to lease his property located in Mandaluyong City to the spouses
who intended to put a restaurant thereon, they agreed to a monthly rental of 17k to
commence in December 1990. Bearing an interim grant of authority executed by Cheng,
spouses proceeded to introduce improvements in the premises.

But before the business could take off and before final lease agreement could be
drafted and signed, the parties began to have serious disagreements regarding the
terms and conditions. Cheng then demanded for the deposits and rentals with the
intention of not continuing with the lease. The spouses ignored the demand and
continued to occupy the premises until their caretaker voluntarily surrendered the
property to Cheng.

Spouses then filed an action for specific performance and damages with a prayer
for the issues of writ of preliminary injunction in RTC Pasig. Respondents prayed that
petitioner be ordered to execute a written lease contract for five years, deducting from
the deposit and rent the cost of repairs in the amount of P445,000, or to order petitioner
to return their investment in the amount of P964,000 and compensate for their unearned
net income of P200,000 with interest, plus attorney’s fees.

Petitioner denied the claims and sought for moral and exemplary damages, and
attorney's fees. RTC favored the Cheng.

Respondents appealed to the Court of Appeals (CA) which, in its decision[5]


dated March 31, 2004, recalled and set aside the RTC decision, and entered a new one
ordering petitioner to pay respondents the amount of P964,000 representing the latter’s
expenses incurred for the repairs and improvements of the premises.

Issue:

Are the spouses possessors in good faith?

Held:

The relationship between petitioner and respondents was explicitly governed by


the Civil Code provisions on lease, which clearly provide for the rule on reimbursement
of useful improvements and ornamental expenses after termination of a lease
agreement. Article 1678 states: “If the lessee makes, in good faith, useful improvements
which are suitable to the use for which the lease is intended, without altering the form or
substance of the property leased, the lessor upon the termination of the lease shall pay
the lessee one-half of the value of the improvements at that time. Should the lessor
refuse to reimburse said amount, the lessee may remove the improvements, even
though the principal thing may suffer damage thereby. He shall not, however, cause any
more impairment upon the property leased than is necessary.

With regard to ornamental expenses, the lessee shall not be entitled to any
reimbursement, but he may remove the ornamental objects, provided no damage is
caused to the principal thing, and the lessor does not choose to retain them by paying
their value at the time the lease is extinguished.”

Contrary to respondents’ position, Articles 448 and 546 of the Civil Code did not apply.
Under these provisions, to be entitled to reimbursement for useful improvements
introduced on the property, respondents must be considered builders in good faith.
Articles 448 and 546, which allow full reimbursement of useful improvements and
retention of the premises until reimbursement is made, apply only to a possessor in
good faith or one who builds on land in the belief that he is the owner thereof. A builder
in good faith is one who is unaware of any flaw in his title to the land at the time he
builds on it.

Hence, Respondents are not entitled to reimbursement for the ornamental expenses
under the express provision of Article 1678. Moreover, since they failed to remove
these ornaments despite the opportunity to do so when they vacated the property, then
they were deemed to have waived or abandoned their right of removal.
Digested by: Julie Ann A. Salcedo

JOVEN YUKI, JR. vs. WELLINGTON CO.


G.R. No. 178527, November 27, 2009
DEL CASTILLO, J.
Facts:

Mr. Joseph Chua owned a parcel of land with a commercial building situated in
Sampaloc, Manila. In 1981, he leased a portion of the building to Joven Yuki, Jr. where
the latter put up a business therein under the name “Supersale Auto Supply”. Their last
written Contract of lease covers the period of January 1, 2003 to December 31, 2003
with a monthly rental of PhP7,000. After some time, Mr. Chua informed Mr. Yuki has
his property is for sale yet there is no manisfestation by Mr. Yuki that he would like to
exercise his pre-emptive right to buy the property. Ib effect and on November 2003, Mr.
Chua again informed Mr. Yuki that he sold his property to Wellington Co. and instructed
Mr. Yuki thenceforth to pay the rent to the new owner. Wellington Co., as the new
owner, by way Notice Letter, informed Mr. Yuki that former lessor-owner Mr. Chua
willno longer their Contract of Lease. However, Mr. Yuki failed to vacate and surremder
the leased unit to Wellinton Co. Likewise, he also refuse to receive the notices to
vacate. Mr. Yuki cites

Issue:

Is there a valid demand to vacate the leased premise against Mr. Yuki?

Held:

Yes. The formal demands to vacate sent to Mr. Yuki, coupled with the filing of
ejectment suit, are categorical acts on the part of Wellingotn Co. showing that he is not
amenable to another renewa of the lease contract. Therefore, Mr Yuki’s contention
thsaat that his stay on the subject prmises is with acquisence of Wellinton co, has no
leg to stand on.

Under Article 1670 of the Civil Code, “If at the end of the contract the lessee
should continue enjoying the thing leased for fifteen days with the acquiescence of the
lessor, and unless a notice to the contrary by either party has previously been given, it
is understtod that there is an implie new lease, not for the period of the original contract,
but fir the tine established in Articles 1682 and 1687. The other terms of the original
contract shall be revived.” Hence, since there is no failure on the part of Wellinton CO.
to serve notice to vacate, even when Mr. Yuki refuse to receive such notice,
acquiescence resulting to implied new lease may not be inferred.

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