Easements

Republic of the Philippines
Supreme Court
Baguio City

SECOND DIVISION

CRISPIN DICHOSO, JR., G.R. No. 180282
EVELYN DICHOSO VALDEZ, and
ROSEMARIE DICHOSO PE BENITO, Present:
Petitioners,
CARPIO, J.,
- versus - Chairperson,
NACHURA,
PERALTA,
ABAD, and
MENDOZA, JJ.
PATROCINIO L. MARCOS, Promulgated:
Respondent. April 11, 2011

x-----------------------------------------------------------------------------------x

DECISION

NACHURA, J.:
This is a petition for review on certiorari under Rule 45 of the Rules of Court,
seeking to reverse and set aside the Court of Appeals (CA) Decision[1] dated
January 31, 2007 and Resolution[2] dated October 23, 2007 in CA-G.R. CV No.
85471. The assailed Decision reversed and set aside the July 15, 2005 decision[3] of
the Regional Trial Court (RTC) of Laoag City, Branch 14, in Civil Case No.
12581-14; while the assailed Resolution denied the Motion for Reconsideration
filed by petitioners Crispin Dichoso, Jr., Evelyn Dichoso Valdez, and Rosemarie
Dichoso Pe Benito.

The facts of the case, as culled from the records, are as follows:

On August 2, 2002, petitioners filed a Complaint for Easement of Right of
Way[4] against respondent Patrocinio L. Marcos. In their complaint, petitioners
alleged that they are the owners of Lot No. 21553 of the Cadastral Survey of Laoag
City, covered by Transfer Certificate of Title No. T-31219; while respondent is the
owner of Lot No. 1. As petitioners had no access to a public road to and from their
property, they claimed to have used a portion of Lot No. 1 in accessing the road
since 1970. Respondent, however, blocked the passageway with piles of sand.
Though petitioners have been granted another passageway by the spouses
Benjamin and Sylvia Arce (Spouses Arce), the owners of another adjacent lot,
designated as Lot No. 21559-B, the former instituted the complaint before the RTC
and prayed that:

WHEREFORE, it is respectfully prayed of this Honorable Court that judgment be
rendered:

1. Granting the plaintiffs right of way over an area of 54 square meters more or
less of Lot 01 by paying the defendant the amount of P54,000.00, and that the
right be annotated on defendants title;

2. Ordering the defendant to pay the plaintiffs the sum of P30,000.00 as damages
for attorneys fees and costs of suit;

Other reliefs, just and equitable under the premises, are likewise sought.[5]

Instead of filing an Answer, respondent moved[6] for the dismissal of the complaint
on the ground of lack of cause of action and noncompliance with the requisite
certificate of non-forum shopping.

During the hearing on respondents motion to dismiss, the parties agreed that an
ocular inspection of the subject properties be conducted. After the inspection, the
RTC directed the parties to submit their respective position papers.

In a resolution[7] dated May 12, 2004, the RTC denied respondents motion to
dismiss and required the latter to answer petitioners complaint.
In his Answer,[8] respondent denied that he allowed anybody to use Lot No. 1 as
passageway. He stated that petitioners claim of right of way is only due to
expediency and not necessity. He also maintained that there is an existing easement
of right of way available to petitioners granted by the Spouses Arce. Thus, there is
no need to establish another easement over respondents property.

In an Order[9] dated July 6, 2005, the RTC declared that respondents answer failed
to tender an issue, and opted to render judgment on the pleadings and thus deemed
the case submitted for decision.

On July 15, 2005, the RTC rendered a decision[10] in favor of petitioners, the
dispositive portion of which reads, as follows:

WHEREFORE, in view of the foregoing, judgment is hereby rendered, as
follows:

1. granting plaintiffs a right of way over an area of 54 square meters
more or less over Lot 01 owned by defendant Patrocinio L. [Marcos]
appearing in the Laoag City Assessors sketch (Annex A) found on
page 28 of the record of the case;

2. ordering plaintiffs to pay defendant the amount of P54,000.00 as
proper indemnity; and

3. ordering the Register of Deeds of Laoag City to duly annotate this
right of way on defendants title to the property.

SO ORDERED.[11]
The RTC found that petitioners adequately established the requisites to
justify an easement of right of way in accordance with Articles 649 and 650 of the
Civil Code. The trial court likewise declared petitioners in good faith as they
expressed their willingness to pay proper indemnity.[12]

On appeal, the CA reversed and set aside the RTC decision and
consequently dismissed petitioners complaint. Considering that a right of way had
already been granted by the (other) servient estate, designated as Lot No. 21559-B
and owned by the Spouses Arce, the appellate court concluded that there is no need
to establish an easement over respondents property. The CA explained that, while
the alternative route through the property of the Spouses Arce is longer and
circuitous, said access road is adequate. It emphasized that the convenience of the
dominant estate is never the gauge for the grant of compulsory right of way. Thus,
the opening of another passageway is unjustified.[13]

Aggrieved, petitioners come before this Court, raising the following issues:

I.
CAN PETITIONERS BE ENTITLED TO A GRANT OF LEGAL
EASEMENT OF RIGHT OF WAY FROM THEIR LANDLOCKED
PROPERTY THROUGH THE PROPERTY OF PRIVATE RESPONDENT
WHICH IS THE SHORTEST ROUTE IN GOING TO AND FROM THEIR
PROPERTY TO THE PUBLIC STREET AND WHERE THEY USED TO
PASS?

II.
CAN RESPONDENT REFUSE TO GRANT A RIGHT OF WAY ON
THE DESIRED PASSAGEWAY WHICH HE CLOSED SINCE THERE IS
ANOTHER PASSAGEWAY WHICH IS MORE CIRCUITOUS AND
BURDENSOME AND IS BELATEDLY OFFERED UNTO PETITIONERS?

III.
CAN PETITIONERS BE COMPELLED TO AVAIL OF A LEGAL
EASEMENT OF RIGHT OF WAY THROUGH THE PROPERTY OF ARCE
WHICH WAS BELATEDLY OFFERED BUT HAS BEEN FORECLOSED BY
THE BANK AND WHEREIN THE LATTER IS NOT A PARTY TO THE
CASE?[14]
The petition is without merit.

It is already a well-settled rule that the jurisdiction of this Court in cases
brought before it from the CA by virtue of Rule 45 of the Rules of Court is limited
to reviewing errors of law. Findings of fact of the CA are conclusive upon this
Court. There are, however, recognized exceptions to the foregoing rule, namely:

(1) when the findings are grounded entirely on speculation, surmises, or
conjectures;

(2) when the inference made is manifestly mistaken, absurd, or
impossible;

(3) when there is grave abuse of discretion;

(4) when the judgment is based on a misapprehension of facts;

(5) when the findings of fact are conflicting;

(6) when, in making its findings, the Court of Appeals went beyond the
issues of the case, or its findings are contrary to the admissions of both the
appellant and the appellee;

(7) when the findings are contrary to those of the trial court;

(8) when the findings are conclusions without citation of specific evidence
on which they are based;

(9) when the facts set forth in the petition, as well as in the petitioner's
main and reply briefs, are not disputed by the respondent; and

(10) when the findings of fact are premised on the supposed absence of
evidence and contradicted by the evidence on record.[15]
The present case falls under the 7th exception, as the RTC and the CA
arrived at conflicting findings of fact and conclusions of law.

The conferment of a legal easement of right of way is governed by Articles
649 and 650 of the Civil Code, quoted below for easy reference:[16]

Article 649. The owner, or any person who by virtue of a real right may
cultivate or use any immovable, which is surrounded by other immovables
pertaining to other persons and without adequate outlet to a public highway, is
entitled to demand a right of way through the neighboring estates, after payment
of the proper indemnity.

Should this easement be established in such a manner that its use may be
continuous for all the needs of the dominant estate, establishing a permanent
passage, the indemnity shall consist of the value of the land occupied and the
amount of the damage caused to the servient estate.

In case the right of way is limited to the necessary passage for the cultivation of
the estate surrounded by others and for the gathering of its crops through the
servient estate without a permanent way, the indemnity shall consist in the
payment of the damages caused by such encumbrance.

This easement is not compulsory if the isolation of the immovable is due to the
proprietors own acts.

Article 650. The easement of right of way shall be established at the point least
prejudicial to the servient estate, and, insofar as consistent with this rule, where
the distance from the dominant estate to a public highway may be the shortest.

To be entitled to an easement of right of way, the following requisites
should be met:

1. The dominant estate is surrounded by other immovables and has no
adequate outlet to a public highway;

2. There is payment of proper indemnity;

3. The isolation is not due to the acts of the proprietor of the
dominant estate; and

4. The right of way claimed is at the point least prejudicial to the
servient estate; and insofar as consistent with this rule, where the distance
from the dominant estate to a public highway may be the shortest.[17]
Petitioners may be correct in the theoretical reading of Articles 649 and
650 of the Civil Code, but they nevertheless failed to show sufficient factual
evidence to satisfy the above-enumerated requirements.[18]

It must be stressed that, by its very nature, and when considered with
reference to the obligations imposed on the servient estate, an easement involves
an abnormal restriction on the property rights of the servient owner and is regarded
as a charge or encumbrance on the servient estate. It is incumbent upon the owner
of the dominant estate to establish by clear and convincing evidence the presence
of all the preconditions before his claim for easement of right of way may be
granted.[19] Petitioners failed in this regard.

Admittedly, petitioners had been granted a right of way through the other
adjacent lot owned by the Spouses Arce. In fact, other lot owners use the said
outlet in going to and coming from the public highway. Clearly, there is an existing
outlet to and from the public road.

However, petitioners claim that the outlet is longer and circuitous, and they
have to pass through other lots owned by different owners before they could get to
the highway. We find petitioners concept of what is adequate outlet a complete
disregard of the well-entrenched doctrine that in order to justify the imposition of
an easement of right of way, there must be real, not fictitious or artificial, necessity
for it. Mere convenience for the dominant estate is not what is required by law as
the basis of setting up a compulsory easement. Even in the face of necessity, if it
can be satisfied without imposing the easement, the same should not be imposed.[20]

We quote with approval the CAs observations in this wise:

As it shows, [petitioners] had been granted a right of way through the
adjacent estate of Spouses Arce before the complaint below was even filed.
[Respondent] alleged that this right of way is being used by the other estates
which are similarly situated as [petitioners]. [Petitioners] do not dispute this fact.
There is also a reason to believe that this right of way is Spouses Arces outlet to a
public road since their property, as it appears from the Sketch Map, is also
surrounded by other estates. The fact that Spouses Arce are not insisting on a right
of way through respondents property, although an opening on the latters property
is undoubtedly the most direct and shortest distance to P. Gomez St. from the
formers property, bolsters our conviction that they have adequate outlet to the
highway which they are now likewise making available to [petitioners].

The convenience of the dominant estate has never been the gauge for the
grant of compulsory right of way. To be sure, the true standard for the grant of the
legal right is adequacy. Hence, when there is already an existing adequate outlet
from the dominant estate to a public highway, as in this case, even when the said
outlet, for one reason or another, be inconvenient, the need to open up another
servitude is entirely unjustified.[21]

Thus, in Cristobal v. CA,[22] the Court disallowed the easement prayed for
because an outlet already exists which is a path walk located at the left side of
petitioners property and which is connected to a private road about five hundred
(500) meters long. The private road, in turn, leads to Ma. Elena Street, which is
about 2.5 meters wide, and finally, to Visayas Avenue. This outlet was determined
by the Court to be sufficient for the needs of the dominant estate.

Also in Floro v. Llenado,[23] we refused to impose a right of way over
petitioners property although private respondents alternative route was admittedly
inconvenient because he had to traverse several ricelands and rice paddies
belonging to different persons, not to mention that said passage is impassable
during the rainy season.

And in Ramos v. Gatchalian Realty, Inc.,[24] this Court refused to grant the
easement prayed for even if petitioner had to pass through lots belonging to other
owners, as temporary ingress and egress, which lots were grassy, cogonal, and
greatly inconvenient due to flood and mud because such grant would run counter to
the prevailing jurisprudence that mere convenience for the dominant estate does
not suffice to serve as basis for the easement.[25]
WHEREFORE, premises considered, the petition is DENIED. The Court

of Appeals Decision dated January 31, 2007 and Resolution dated October 23,
2007 in CA-G.R. CV No. 85471 are AFFIRMED.

SO ORDERED.

ANTONIO EDUARDO B. NACHURA
Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson

DIOSDADO M. PERALTA ROBERTO A. ABAD
Associate Justice Associate Justice

JOSE CATRAL MENDOZA
Associate Justice
ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution and the Division
Chairpersons Attestation, I certify that the conclusions in the above Decision had
been reached in consultation before the case was assigned to the writer of the
opinion of the Courts Division.

RENATO C. CORONA
Chief Justice

[1]
Penned by Associate Justice Amelita G. Tolentino, with Associate Justices Conrado M. Vasquez, Jr. and Lucenito
N. Tagle, concurring; rollo, pp. 34-46.
[2]
Id. at 48-49.
[3]
Penned by Judge Ramon A. Pacis; records, pp. 70-77.
[4]
Id. at 1-3.
[5]
Id. at 2.
[6]
Embodied in a Motion to Dismiss dated October 16, 2002; id. at 11-14.
[7]
Id. at 36-38.
[8]
Rollo, pp. 62-64.
[9]
Records, pp. 68-69.
[10]
Supra note 3.
[11]
Records, p. 77.
[12]
Id. at 76.
[13]
Rollo, pp. 40-45.
[14]
Id. at 211.
[15]
Hyatt Elevators and Escalators Corporation v. Cathedral Heights Building Complex Association, Inc., G.R. No.
173881, December 1, 2010.
[16]
Lee v. Carreon, G.R. No. 149023, September 27, 2007, 534 SCRA 218, 221-222.
[17]
Quintanilla v. Abangan, G.R. No. 160613, February 12, 2008, 544 SCRA 494, 499; Cristobal v. CA, 353 Phil.
318, 327 (1998); Spouses Sta. Maria v. CA, 349 Phil. 275, 283 (1998).
[18]
David-Chan v. CA, 335 Phil. 1140, 1146 (1997).
[19]
Cristobal v. CA, supra note 17, at 328.
[20]
Id.
[21]
Costabella Corporation v. Court of Appeals, G.R. No. 80511, January 25, 1991, 193 SCRA 333, 341.
[22]
Supra note 17.
[23]
314 Phil. 715 (1995).
[24]
238 Phil. 689 (1987).
[25]
Cristobal v. CA, supra note 17, at 329.
SUPREME COURT
Manila

SECOND DIVISION

RESURRECCION OBRA, G.R. No. 149125
Petitioner,
Present:
QUISUMBING, J., Chairperson,
- versus - CARPIO,
CARPIO MORALES,
TINGA, and
VELASCO, JR., JJ.
SPS. VICTORIANO BADUA &
MYRNA BADUA, SPS. JUANITO
BALTORES & FLORDELIZA
BALTORES, SPS. ISABELO Promulgated:
BADUA & PRESCILA BADUA,
SPS. JOSE BALANON &
SHIRLEY BALANON, SPS. August 9, 2007
ORLANDO BADUA & MARITA
BADUA and SPS. LEONCIO
BADUA & JUVY BADUA,
Respondents.
x-----------------------------------------------------------------------------------------x

DECISION

VELASCO, JR., J.:

An order of execution must conform to the terms of the dispositive portion
of the decision. A court that issues an order of execution in contravention of its
final judgment exceeds its jurisdiction and renders its order invalid.

The Case

The present Petition for Review on Certiorari under Rule 45 seeks the annulment
of the March 20, 2001[1] and June 20, 2001[2] Orders of the San Fernando City, La
Union Regional Trial Court (RTC), Branch 29 in Civil Case No. 5033, directing
petitioner Obra to demolish the fence she constructed on the southern portion of
her property which blocked a portion of respondents right-of-way.

The Facts

The case arose from a Complaint for Easement of Right-of-Way filed by
respondents against Anacleto and Resurreccion Obra, Donato and Lucena Bucasas,
and Paulino and Crisanta Badua in Civil Case No. 5033 entitled Sps. Victoriano
Badua and Myrna Badua, et al. v. Sps. Anacleto Obra and Resurreccion Obra, et
al. before the RTC.Defendant Anacleto Obra was the husband of
petitioner. Respondents alleged that their residential houses, erected on a lot
commonly owned by them and covered by Tax Declaration No. 93-01900281
under Cadastral Lot No. 5518 situated in Galongen, Bacnotan, La Union, were
located west of the properties of the Obras, Bucasases, and Baduas.Their only
access to the national highway was a pathway traversing the northern portion of
petitioners property and the southern portion of the properties of the Bucasases and
Baduas. The pathway was more than one meter wide and sixteen meters long. They
claimed that this pathway had been established as early as 1955. In 1995, however,
petitioner Obra constructed a fence on the northern boundary of their property;
thus, blocking respondents access to the national highway. Respondents demanded
the demolition of the fence, but petitioner refused.
In her Answer, petitioner averred that respondents had not established any
easement of right-of-way either by law or agreement. She claimed that respondents
failed to satisfy the requisites provided in Articles 649 and 650 of the Civil Code in
order to establish an easement of right-of-way on the northern portion of her
property. Moreover, she alleged that respondents had another access as ingress and
egress to the public road other than the one traversing her property.

The spouses Badua and Bucasas failed to file an answer; consequently, they
were declared in default.

On July 7, 2000, after trial, the RTC rendered a Decision[3] dismissing the
complaint. It held that respondents were not able to satisfy all the requisites needed
for their claim of an easement of right of way.[4] It observed that when petitioner
fenced the northern portion of her property, respondents were able to use another
pathway as ingress and egress to the highway. It stated further that the new
pathway is more than adequate[5] for respondents use. Thus, the applied easement
of right-of-way on the northern portion of petitioners property was not
allowed. The said Decision became final and executory.

It must be noted that the new pathway used by respondents, however, traversed the
southern portion of petitioners property. Sometime in 2001, petitioner constructed
a fence on this portion of her lot, which again restricted the use of respondents new
pathway. Aggrieved and prejudiced by petitioners action, respondents filed
on March 6, 2001 a Motion to Enforce[6] the July 7, 2000 Decision of the
RTC. They alleged that the Decision of the RTC dismissing the case was based on
the existence of a new pathway which they had been using since 1995. Thus, they
asserted that petitioner was prohibited from closing said passage.

On March 20, 2001, the RTC granted the said motion. Petitioner filed a Motion for
Reconsideration, but it was rejected in the trial courts June 20, 2001 Order.

Clarifying its July 7, 2000 Decision, the trial court, in its March 20, 2001 Order,
held that the dismissal of the complaint depended on petitioners representation that
she was allowing respondents to use the southern portion of her property as an
alternative pathway. Since the southern portion was an agreed pathway,
[7]
petitioner could not reduce its width; thus, the trial court ordered petitioner to
remove the fence blocking the passage.

Hence, we have this petition.
The Issue

Petitioner assigns a lone issue for the consideration of the Court:

Whether or not the Court can motu proprio declare a compulsory right of
way on a property not the subject of a pending case (particularly Civil Case
No. 5033).[8]

Essentially, petitioner questions the propriety of the trial courts issuance of
an order clarifying its final and executory decision and effectively establishing an
easement on petitioners property without proper adjudication.

The Courts Ruling

The petition is impressed with merit.

Dispositive Portion of a Decision Controlling

The controversy of this petition stemmed from the alleged conflict between
the body of the trial courts July 7, 2000 Decision and its dispositive
portion. Respondents aver that notwithstanding the dismissal of Civil Case No.
5033, the body of the Decision evidently established an easement on the southern
portion of petitioners property. On the other hand, petitioner maintains that the trial
courts reference to the new pathway was merely a declaration of its existence and
not necessarily a creation of an easement of right-of-way.
We agree with petitioners postulation.

The resolution of the court in a given issue embodied in the fallo or
dispositive part of a decision or order is the controlling factor as to settlement of
rights of the parties.[9]Thus, where there is a conflict between the fallo and the ratio
decidendi or body of the decision, the fallo controls. This rule rests on the theory
that the fallo is the final order while the opinion in the body is merely a statement
ordering nothing.[10] The rule applies when the dispositive part of a final decision or
order is definite, clear, and unequivocal, and can wholly be given effect without
need of interpretation or construction.[11]

In the case at bench, the decretal portion of the July 7, 2000 Decision is plain
and clear[w]herefore, in view of the foregoing, this case is hereby dismissed. When
a court rules that the case or complaint is dismissed, then it is concluded that the
cause of action embodied in the allegations of the initiatory pleading has no merit
or basis, and the prayer is consequently denied.

The amended complaint filed by respondents in Civil Case No. 5033
revealed that their cause of action was the recognition of their easement of right-of-
way of more than one (1) meter wide and more than sixteen (16) meters in length
[which] traversed the northern portion of the property of defendants spouses
Anacleto Obra and Resurreccion Obra.[12] As prayer, respondents asked for the
demolition of the concrete fence constructed by petitioner and her spouse,
Anacleto, that closed the pathway on the northern portion of Obras lot; the
declaration of right-of-way over said area in favor of respondents; and the payment
of damages and attorneys fees. When the RTC dismissed the case in its July 7,
2000 Decision, it ruled that respondents had no cause of action against petitioner
and her husband, Anacleto, because they failed to satisfy one of the four requisites
for the entitlement of a right-of-way, namely that the dominant estate is surrounded
by other immovables and is without adequate outlet to a public highway. The trial
court took note of the fact that the new pathway which incidentally traversed the
southern portion of petitioners lot is an adequate outlet to a public highway. While
its body mentioned the existence of an alternative pathway located south of
petitioners lot, such was made only to emphasize that respondents failed to satisfy
the requirements for an easement of right-of-way. As held by the trial court:

The insistence of the plaintiffs to open up the old pathway is therefore
without basis considering that there is another outlet adequate enough as an
access route for them in their passage to the public highway and the alleged
inconvenience cannot be a ground for the opening of said old pathway.

xxxx

In fine, plaintiffs were not able to satisfy all the requisites needed for their
claim of an easement of right of way; failing to prove that there is no
adequate outlet from their respective properties to a public highway.[13]

Apparently, no pronouncement was ever made regarding the nature and legality of
this new pathway; therefore, no easement was established by the Court on
petitioners property in Civil Case No. 5033. Thus, their claim for a right-of-way on
the southern portion had no basis.

The parties and even the trial court were confined to the averments of the
complaint, and the answer and the issues joined by the major pleadings. It could
not be disputed by respondents that there was no mention at all of any right-of-way
on the southern portion of petitioners lot in the complaint nor any claim or prayer
for the declaration of respondents entitlement to a right-of-way over the said
area. Thus, there was no joinder of issue on this matter and, therefore, the dismissal
of the case cannot, by any stretch of imagination, be construed to encompass any
grant of right-of-way to respondents relating to the southern portion owned by
petitioner.

More importantly, the case was dismissed by the RTC, meaning no relief was
granted by the court to respondents. Granting arguendo that the issue on the
entitlement to respondents of a right-of-way over the southern portion was likewise
raised and was implicit from the pleadings; nevertheless, respondents, by the
dismissal of the case, were not granted any affirmative relief by the trial court. As
such, the trial court clearly erred in issuing the March 20, 2001 Order which
granted a relief not found in the fallo of the decision.

Moreover, the construction of the fence on the southern portion was done by
petitioner after the rendition and finality of the July 7, 2000 Decision dismissing
the case. It is plain to see that such act of constructing the fence was subsequent to
the Decision and could not have been covered by said judgment. The dispute that
arose from the blockade of the pathway on the southern portion could be the
subject matter of another complaint but definitely was not an issue in Civil Case
No. 5033. In the new case, respondents are obliged to prove all the essential
elements of the easement of right-of-waya requirement which they failed to satisfy
in Civil Case No. 5033.

Lastly, the assailed March 20, 2001 Order directing the demolition of the concrete
fence was in the nature of an execution of a final judgment. It is settled that what
can be enforced by a writ of execution under Rule 39 are the dispositions in the
decretal portion of the decision or the fallo. Since the case was dismissed, there
was nothing to enforce or implement.

No Voluntary Easement of Right-of-Way

The trial court, seemingly aware that it did not determine the legality of an
easement of right-of-way over the pathway located south of petitioners property,
nevertheless, concluded that the said passage was an agreed or voluntary easement
of right-of-way which petitioner should respect.

The trial court was in error.

It is a settled doctrine that a decision, after it becomes final, becomes
immutable and unalterable.[14] Thus, the court loses jurisdiction to amend, modify,
or alter a final judgment and is left only with the jurisdiction to execute and
enforce it. Any amendment or alteration which substantially affects a final and
executory judgment is null and void for lack of jurisdiction, including the entire
proceedings held for that purpose.[15]

To recapitulate, the dismissal of Civil Case No. 5033 meant that no easement was
ever established on petitioners property. However, the trial court, by issuing its
March 20, 2001 Order directing petitioner to remove the fence that limited
respondents passage, effectively created a right-of-way on petitioners property in
favor of respondents allegedly on the basis of a voluntary agreement between the
parties. This directive was in contravention of its July 7, 2000 Decision; thus, it
was null and void for having been issued outside of the courts jurisdiction.

Granting for the sake of argument that the issue of voluntary easement of right-of-
way, subject of the assailed March 20, 2001 Order, was proper, relevant, and
material to the issue of right-of-way as averred in the complaint in Civil Case No.
5033, still, the conclusion that there was an agreed or voluntary easement of right-
of-way had no basis. The records of Civil Case No. 5033 do not reveal any
agreement executed by the parties on the claimed right-of-way. Glaring is the fact
that the terms of the arrangement were not agreed upon by the parties, more
particularly, the payment of the proper indemnity. The evidence is not ample
enough to support the conclusion that there was a verbal agreement on the right-of-
way over the southern portion.

More so, since a right-of-way is an interest in the land, any agreement creating it
should be drawn and executed with the same formalities as a deed to a real estate,
and ordinarily must be in writing.[16] No written instrument on this agreement was
adduced by respondents.

In the light of the foregoing considerations, the assailed March 20, 2001 and June
20, 2001 Orders are null, void, and without any legal effect.

WHEREFORE, the petition is GRANTED. The June 20, 2001 and March
20, 2001 Orders of the San Fernando City, La Union RTC, Branch 29 in Civil Case
No. 5033 are hereby ANNULLED AND SET ASIDE.

No costs.

SO ORDERED.

PRESBITERO J. VELASCO, JR.
Associate Justice

WE CONCUR:

LEONARDO A. QUISUMBING
Associate Justice
Chairperson

ANTONIO T. CARPIO CONCHITA CARPIO MORALES

DANTE O. TINGA
Associate Justice

ATTESTATION


Associate Justice
Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division

REYNATO S. PUNO
Chief Justice
[1]
Rollo, p. 16; issued by Judge Robert T. Cawed.
[2]
Id. at 17.
[3]
Id. at 23-31.
[4]
Id. at 31.
[5]
Id.
[6]
Id. at 32.
[7]
Id. at 16.
[8]
Id. at 65; original in capital letters.
[9]
Velarde v. Social Justice Society, G.R. No. 159357, April 28, 2004, 428 SCRA 283, 308; citations
omitted.
[10]
Asian Center For Career and Employment System And Services, Inc. v. NLRC, 358 Phil. 380, 386 (1998).
[11]
Suntay v. Suntay, G.R. No. 132524, December 29, 1998, 300 SCRA 760, 772.
[12]
Rollo, p. 23.
[13]
Supra note 3, at 31.
[14]
Equitable Banking Corp. v. Sadac, G.R. No. 164772, June 8, 2006, 490 SCRA 380, 416.
[15]
Torres v. Sison, G.R. No. 119811, August 30, 2001, 364 SCRA 37, 43.
[16]
25 Am. Jur. 2d 20, pp. 431-432.
FIRST DIVISION
[G.R. No. 127549. January 28, 1998]
SPOUSES CESAR and RAQUEL STA. MARIA and FLORCERFIDA STA.

MARIA, petitioners, vs. COURT OF APPEALS, and SPOUSES
ARSENIO and ROSLYNN FAJARDO, respondents.
DECISION
DAVIDE, JR., J.:
This is an appeal under Rule 45 of the Rules of Court from the decision of 18
[1]
December 1996 of the Court of Appeals in CA-G.R. CV No. 48473, which affirmed with
modification the 30 June 1994 Decision of Branch 19 of the Regional Trial Court of
[2]
Bulacan in Civil Case No. 77-M-92 granting the private respondents a right of way
through the property of the petitioners.
The antecedent facts, as summarized by the Court of Appeals, are as follows:
Plaintiff spouses Arsenio and Roslynn Fajardo are the registered owners of a
piece of land, Lot No. 124 of the Obando Cadastre, containing an area of
1,043 square meters, located at Paco, Obando, Bulacan, and covered by
Transfer Certificate Title (TCT) No. T-147729 (M) of the Registry of Deeds of
Meycauayan, Bulacan (Exhibit B, p. 153 Orig. Rec.). They acquired said lot
under a Deed of Absolute Sale dated February 6, 1992 executed by the
vendors Pedro M. Sanchez, et al. (Annex A, Complaint; pp. 7-8 ibid.).
Plaintiffs aforesaid Lot 124 is surrounded by Lot 1 (Psd 45412), a fishpond

(Exh. C-5; p. 154, ibid.), on the northeast portion thereof; by Lot 126, owned
by Florentino Cruz, on the southeast portion; by Lot 6-a and a portion of Lot 6-
b (both Psd-297786) owned respectively by Spouses Cesar and Raquel Sta.
Maria and Florcerfida Sta. Maria (Exhs. C-2 and C-3, ibid.), on the southwest;
and by Lot 122, owned by the Jacinto family, on the northwest.
On February 17, 1992, plaintiff spouses Fajardo filed a complaint against

defendants Cesar and Raquel Sta. Maria or Florcerfida Sta. Maria for the
establishment of an easement of right of way. Plaintiffs alleged that their lot,
Lot 124, is surrounded by properties belonging to other persons, including
those of the defendants; that since plaintiffs have no adequate outlet to the
provincial road, an easement of a right of way passing through either of the
alternative defendants properties which are directly abutting the provincial
road would be plaintiffs only convenient, direct and shortest access to and
from the provincial road; that plaintiffs predecessors-in-interest have been
passing through the properties of defendants in going to and from their lot;
that defendants mother even promised plaintiffs predecessors-in-interest to
grant the latter an easement of right of way as she acknowledged the absence
of an access from their property to the road; and that alternative defendants,
despite plaintiffs request for a right of way and referral of the dispute to the
barangay officials, refused to grant them an easement.Thus, plaintiffs prayed
that an easement of right of way on the lots of defendants be established in
their favor. They also prayed for damages, attorneys fees and costs of suit.
Defendants, instead of filing an answer, filed a motion to dismiss (pp. 41-

45, ibid.) on the ground that the lower court has no jurisdiction to hear the
case since plaintiffs failed to refer the matter to the barangay lupon in
accordance with Presidential Decree No. 1508. The lower court, however, in
its Order dated May 18, 1992, denied said motion on the premise that there
was substantial compliance with the law.
On May 25, 1992, defendants filed a Notice of Appeal to the Supreme Court
of the questioned order of the lower court denying their motion to dismiss,
under Rule 45 of the Rules of Court (p. 54, ibid.). On June 24, 1992, the lower
court denied the notice of appeal for lack of merit (p. 86, ibid.).
In the meantime, defendants filed a petition for review on certiorari of the

lower courts Order dated May 18, 1992 (pp. 64-84, ibid.). In an Order dated
July 8, 1992, the Third Division of the Supreme Court denied said petition for
failure to comply with Revised Circular Nos. 1-88 and Circular No. 28-01 (p.
97, ibid.). Defendants motion for reconsideration was likewise denied with
finality on July 20, 1992 (p. 96, ibid.).
Consequently, defendants filed their answer to the court below where they
alleged that the granting of an easement in favor of plaintiffs would cause
them great damage and inconvenience; and that there is another access route
from plaintiffs lot to the main road through the property of Florentino Cruz
which was likewise abutting the provincial road and was being offered for
sale. By way of counterclaim, defendants prayed for damages and attorneys
fees.
The parties not having settled their dispute during the pre-trial (p.120, Orig.
Record), the court directed that an ocular inspection be conducted of the
subject property, designating the branch clerk of court as its commissioner. In
time, an Ocular Inspection Report dated December 3, 1992 (Exhs. J and J-1)
was submitted. After trial on the merits, the lower court rendered the assailed
decision granting plaintiffs prayer for an easement of right of way on
defendants properties.[3]
The trial court found that based on the Ocular Inspection Report there was no other
way through which the private respondents could establish a right of way in order to
reach the provincial road except by traversing directly the property of the petitioners. It
further found that (a) no significant structure, save for a wall or fence about three feet
high, would be adversely affected; (b) there was sufficient vacant space of
approximately 11 meters between petitioners houses; and (c) petitioners property could
provide the shortest route from the provincial road to the private respondents
property. Consequently, the trial court granted the easement prayed for by the private
respondents in a decision dated 30 June 1994, whose decretal portion reads as
[4]
follows:
WHEREFORE, premises considered the Court orders that a right-of-way be

constructed on the defendants property covered by TCT No. 0-6244 of about
75 sq. meters, 25 sq. meters shall be taken from the lot of Florcerfida Sta.
Maria and 50 sq. meters from the property of Cesar Sta. Maria to be
established along lines 1-2 of lot 6-c and along lines 3-4 of lot 6-b and to
indemnify the owners thereof in the total amount of P3, 750.00 (P1, 250.00
goes to Florcerfida Sta. Maria and P2,500.00 to Cesar Sta. Maria) and to
reconstruct the fence to be destroyed in the manner it was at the time of the
filing of this action.
The petitioners seasonably appealed from the aforementioned decision to the Court
of Appeals, which docketed the case as CA-G.R. CV No. 48473.
The Court of Appeals agreed with the trial court that the private respondents had
sufficiently established the existence of the four requisites for compulsory easement of
right of way on petitioners property, to wit: (1) private respondents property was, as
revealed by the Ocular Inspection Report, surrounded by other immovables owned by
different individuals and was without an adequate outlet to a public highway; (2) the
isolation of private respondents property was not due to their own acts, as it was
already surrounded by other immovables when they purchased it; (3) petitioners
property would provide the shortest way from private respondents property to the
provincial road, and this way would cause the least prejudice because no significant
structure would be injured thereby; and (4) the private respondents were willing to pay
the corresponding damages provided for by law if the right of way would be granted.
Accordingly, in its decision of 18 December 1996, the Court of Appeals affirmed
[5]
the trial courts decision, but modified the property valuation by increasing it from P50
to P2,000 per square meter.
The petitioners forthwith filed this petition for review on certiorari based on the
following assignment of errors:
I.
WHETHER OR NOT A COMPULSORY EASEMENT OF RIGHT OF WAY

CAN BE ESTABLISHED IN THE LIGHT OF THE DOCTRINE LAID
DOWN BY THE HON. SUPREME COURT IN COSTABELLA
CORPORATION VS. COURT OF APPEALS, 193 SCRA 333, 341 WHICH
HELD THAT [FOR] THE FAILURE OF PRIVATE RESPONDENTS TO
SHOW THAT THE ISOLATION OF THEIR PROPERTY WAS NOT DUE
TO THEIR PERSONAL OR THEIR PREDECESSORS-IN-INTERESTS
OWN ACTS, THEY ARE NOT ENTITLED TO A COMPULSORY
EASEMENT OF RIGHT OF WAY.
II.
WHETHER OR NOT A COMPULSORY RIGHT OF WAY CAN BE

GRANTED TO PRIVATE RESPONDENTS WHO HAVE TWO OTHER
EXISTING PASSAGE WAYS OTHER THAN THAT OF PETITIONERS
AND AN ALTERNATIVE VACANT LOT FRONTING THE PROVINCIAL
ROAD ALSO ADJACENT TO PRIVATE RESPONDENTS PROPERTY,
WHICH CAN BE USED IN GOING TO AND FROM PRIVATE
RESPONDENTS PROPERTY.
III.
RESPONDENT HON. COURT OF APPEALS GRAVELY ERRED IN

MAKING A PORTION OF ITS STATEMENT OF FACTS FROM
ALLEGATIONS IN THE COMPLAINT AND NOT FROM THE EVIDENCE
ON RECORD.
IV.
RESPONDENT HON. COURT OF APPEALS SERIOUSLY ERRED IN

HOLDING THAT PRIVATE RESPONDENTS HAVE NO ADEQUATE
OUTLET TO A PUBLIC HIGHWAY WHICH INFERENCE DRAWN FROM
FACTS WAS MANIFESTLY MISTAKEN.[6]
The first, second, and fourth assigned errors involve questions of fact. Settled is the
rule that the jurisdiction of this Court in cases brought before it from the Court of
Appeals via Rule 45 of the Rules of Court is limited to reviewing errors of law. Findings
of fact of the latter are conclusive, except in the following instances: (1) when the
findings are grounded entirely on speculation, surmises, or conjectures; (2) when the
inference made is manifestly mistaken, absurd, or impossible; (3) when there is grave
abuse of discretion; (4) when the judgment is based on a misapprehension of facts; (5)
when the findings of fact are conflicting; (6) when in making its findings the Court of
Appeals went beyond the issues of the case, or its findings are contrary to the
admissions of both the appellant and the appellee; (7) when the findings are contrary to
those of the trial court; (8) when the findings are conclusions without citation of specific
evidence on which they are based; (9) when the facts set forth in the petition as well as
in the petitioners main and reply briefs are not disputed by the respondent; and (10)
when the findings of fact are premised on the supposed absence of evidence and
contradicted by the evidence on record. [7]
A perusal of the pleadings and the assailed decision of the Court of Appeals, as well
as of the decision of the trial court, yields no ground for the application of any of the
foregoing exceptions. All told, the findings of fact of both courts satisfied the following
requirements for an estate to be entitled to a compulsory servitude of right of way under
the Civil Code, to wit:
1. the dominant estate is surrounded by other immovables and has no

adequate outlet to a public highway (Art. 649, par. 1);
2. there is payment of proper indemnity (Art. 649, par. 1);
3. the isolation is not due to the acts of the proprietor of the dominant
estate (Art. 649, last par.); and
4. the right of way claimed is at the point least prejudicial to the

servient estate; and insofar as consistent with this rule, where the
distance from the dominant estate to a public highway may be the shortest
(Art. 650).[8]
As to such requisites, the Court of Appeals made the following disquisitions:
Anent the first requisite, there is no dispute that the plaintiffs-appellees

property is surrounded by other immovables owned by different
individuals. The ocular inspection report submitted to the lower court reveals
that:
The property of the plaintiffs, spouses Arsenio and Roslynn Fajardo, is

completely surrounded with adobe fence without any point of egress and
ingress to the national road. Said plaintiffs property containing an area of
1,043 square meters and covered by OCT No. 0-6244 of the Registry of
Deeds of Bulacan was situated directly behind defendants property which
abuts the national road. Defendants, spouses Cesar and Racquel Sta. Maria,
are the absolute owners of the parcel of land with an area of 537 square
meters and embraced under TCT No. T-37.763(M) situated on the left side
abutting the national road with their house thereon made of wood and hollow
blocks, while defendant Florcerfida Sta. Maria is the absolute owner of a
parcel of land with a similar area of 537 square meters and covered by TCT
No. T-37.762(M) situated on the right side and likewise abutting the national
road with an impressive house thereon of modern vintage made of strong
materials. As depicted in the rough sketch hereto attached, plaintiffs have
absolutely no means of ingress and egress to their property as the same is
completely isolated by properties owned by other persons. On the left side is
the property of Florentino Cruz, on the right side is the property reportedly
owned by the Jacintos; and on the front portion are properties owned by
defendants. x x x
(Ocular Inspection Report, p. 135, Orig. Rec.)
Plaintiffs-appellees property is likewise without adequate outlet to a public

highway. The existing passage way for people (daang tao) at the back of
plaintiffs-appellees property leading to the provincial road (TSN, May 17,
1993, p. 12) cannot be considered an adequate outlet for purposes of
establishing an easement. Article 651 of the Code provides that (t)he width of
the easement of right of way shall be that which is sufficient for the needs of
the dominant estate, and may accordingly be changed from time to time. Thus
in the case of Larracas vs. Del Rio (37 Official Gazette 287), this Court had
occasion to rule that it is not necessary for a person, like his neighbors, to
content himself with a footpath and deny himself the use of an automobile. So
in an age when motor cars are a vital necessity, the dominant proprietor has a
right to demand a driveway for his automobile, and not a mere lane or
pathway (Cited in Tolentino, ibid., p. 391).
The second requisite for the establishment of an easement of right way, i.e.,
payment of indemnity, is likewise present in this case. Plaintiff-appellee
spouse Roslynn Fajardo testified on direct examination that they are willing to
pay the corresponding damages provided for by law if granted the right of way
(TSN, November 5, 1992, p. 11).
The third requisite is that the isolation of plaintiffs-appellees property should

not have been due to their own acts. In the case under consideration, the
isolation of their lot is not due to plaintiffs acts. The property they purchased
was already surrounded by other immovables leaving them no adequate
ingress or egress to a public highway.
Going now to the fourth requisite of least prejudice and shortest distance, We
agree with the lower court that this twin elements have been complied with in
establishing the easement of right of way on defendants-appellants properties.
It has been commented upon that where there are several tenements
surrounding the dominant estate, and the easement may be established on
any of them, the one where the way is shortest and will cause the least
damage should be chosen. But if these two circumstances do not concur in a
single tenement, the way which will cause the least damage should be used,
even if it will not be the shortest. And if the conditions of the various
tenements are the same, all the adjoining owners should be cited and experts
utilized to determine where the easement shall be established (Tolentino,
ibid., pp. 108-109, citing Casals Colldecarrera).
In the case at bar, the ocular inspection disclosed that there are three options
open to the plaintiffs-appellees as a route to reach the national road, to wit:
(1) To traverse directly through defendants property which is the shortest

route of approximately 20 to 25 meters away from the national road;
(2) To purchase a right of way from the adjoining property of Florentino Cruz
on the left side of their property; and
(3) To negotiate with Jacinto family on the right side of their property.
In all instances, no significant structures would be adversely affected. There is

sufficient vacant space between defendants houses of approximately 11
meters. The distance of defendant Florcerfidas house with the adjoining
adobe wall separating that of the property of defendants Cesar and Racquel
Sta. Maria is about 4 meters, while the space between the adobe wall and that
of the latters house is about 7 meters or a total of 11 meters vacant space for
purposes of a right of way. On the other hand, plaintiffs may negotiate with a
right of way with Florentino Cruz on the left side of their property although the
same is quite circuitous. Lastly, the option through the property of the Jacinto
on the right side is very circuitous and longer. The route involves a total of
about 50 yards as it has to go straight to the right of about 35 yards and turn
left of about another 15 yards before reaching the common right of way.
(Ocular Inspection report, pp. 135-136, ibis.)
Among the three (3) possible servient estates, it is clear that defendants-
appellants property would afford the shortest distance from plaintiffs-appellees
property to the provincial road.Moreover, it is the least prejudicial since as
found by the lower court, (i)t appears that there would be no significant
structures to be injured in the defendants property and the right-of-way to be
constructed thereon would be the shortest of all the alternative routes pointed
to by the defendants (p. 4, RTC, Decision; p. 223, ibid.).
Petitioners reliance on Costabella Corporation v. Court of Appeals to support their

[9]
first assigned error is misplaced. In said case we reversed the decision of the Court of
Appeals granting a compulsory easement of a right of way to the private respondents
therein because of the absence of any showing that the private respondents had
established the existence of the four requisites mandated by law. As to the third
requisite, we explicitly pointed out; thus: Neither have the private respondents been able
to show that the isolation of their property was not due to their personal or their
predecessors-in-interest's own acts. In the instant case, the Court of Appeals have
found the existence of the requisites. The petitioners, however, insist that private
respondents predecessors-in-interest have, through their own acts of constructing
concrete fences at the back and on the right side of the property, isolated their property
from the public highway. The contention does not impress because even without the
fences private respondents property remains landlocked by neighboring estates
belonging to different owners.
Under the second and fourth assigned errors, the petitioners try to convince us that
there are two other existing passage ways over the property of Cruz and over that of
Jacinto, as well as a daang tao, for private respondents use. Our examination of the
records yields otherwise. Said lots of Cruz and Jacinto do not have existing passage
ways for the private respondents to use. Moreover, the Ocular Inspection
Report reveals that the suggested alternative ways through Cruzs or Jacintos
[10]
properties are longer and circuitous than that through petitioners property. This is also
clear from the Sketch Plan submitted by the private respondents wherein it is readily
[11]
seen that the lots of Cruz and Jacinto are only adjacent to that of private respondents
unlike that of petitioners which is directly in front of private respondents property in
relation to the public highway.
Under Article 650 of the Civil Code, the easement of right of way shall be
established at the point least prejudicial to the servient estate, and, insofar as consistent
with this rule, where the distance from the dominant estate to a public highway may be
the shortest. Where there are several tenements surrounding the dominant estate, and
the easement may be established on any of them, the one where the way is shortest
and will cause the least damage should be chosen. The conditions of least damage
[12]
and shortest distance are both established in one tenement -- petitioners property.
As to the daang tao at the back of private respondents property, it must be stressed
that under Article 651 the width of the easement of right of way shall be that which is
sufficient for the needs of the dominant estate, and may accordingly be changed from
time to time. Therefore, the needs of the dominant estate determine the width of the
easement. The needs of private respondents property could hardly be served by this
[13]
daang tao located at the back and which is bordered by a fishpond. [14]
The third assigned error is without basis and is nothing but a misreading of the
challenged decision. The Court of Appeals did not declare as established facts the
allegations of the complaint referred to by the petitioner. It merely made a brief
summary of what were alleged in the complaint as part of its narration of the
antecedents of the case on appeal.
WHEREFORE, the instant petition for review is DENIED and the challenged
decision of the Court of Appeals is AFFIRMED in toto.
Costs against petitioners.
SO ORDERED.
Bellosillo, Vitug, and Kapunan, JJ., concur.
[1]
Rollo, 18-29. Per Martin, Jr. F., J., with Morales, C. and Amin, O., JJ, concurring.
[2]
Original Record (OR), Civil Case No. 77-M-92, 220-224. Per Judge Camilo O. Montesa, Jr.
[3]
Rollo, 19-21.
[4]
Supra note 2.
[5]
Supra note 1.
[6]
Rollo, 7.
[7]
Medina v. Asistio, 191 SCRA 218, 223-224 [1990].
Quimen v. Court of Appeals, 257 SCRA 163, 169 [1996]; Vda. de Baltazar v. Court of Appeals, 245
[8]
SCRA 333, 337 [1995]; Floro v. Llenado, 244 SCRA 713, 723 [1995]; Francisco v. Intermediate Appellate
Court, 177 SCRA 527, 533 [1989]; Jose C. Vitug, Compendium of Civil Law and Jurisprudence, 330
(1993).
[9]
193 SCRA 333 [1991].
[10]
OR, 135-136.
[11]
Id., 17.
2 Arturo M. Tolentino, Commentaries and Jurisprudence on the Civil Code of the Philippines 355
[12]
(1983).
[13]
Encarnacion v. Court of Appeals, 195 SCRA 74, 79 [1991]
[14]
Lot Psd 45412; OR, 17.

SECOND DIVISION

UNISOURCE COMMERCIAL AND G.R. No. 173252
DEVELOPMENT CORPORATION,
Petitioner, Present:

CARPIO MORALES,
- versus - CHICO-NAZARIO,*
LEONARDO-DE CASTRO,* and
BRION, JJ.

JOSEPH CHUNG, KIAT CHUNG and Promulgated:

KLETO CHUNG,

Respondents.
July 17, 2009
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
QUISUMBING, J.:
The instant petition assails the Decision[1] dated October 27, 2005 and the

Resolution[2] dated June 19, 2006 of the Court of Appeals in CA-G.R. CV No.
76213. The appellate court had reversed and set aside the
Decision[3] dated August 19, 2002 of the Regional Trial Court of Manila, Branch 49,
in Civil Case No. 00-97526.
The antecedent facts are as follows:
Petitioner Unisource Commercial and Development Corporation is the

registered owner of a parcel of land covered by Transfer Certificate of Title (TCT)
No. 176253[4] of the Register of Deeds of Manila. The title contains a
memorandum of encumbrance of a voluntary easement which has been carried
over from the Original Certificate of Title of Encarnacion S. Sandico. The certified
English translation[5] of the annotation reads:
By order dated 08 October 1924 of the Court of First Instance of Manila,
Chamber IV (AP-7571/T-23046), it is declared that Francisco Hidalgo y Magnifico has the
right to open doors in the course of his lot described as Lot No. 2, Block 2650 of the map
that has been exhibited, towards the left of the Callejon that is used as a passage and
that appears as adjacent to the said Lot 2 and to pass through the land of Encarnacion
Sandico y Santana, until the bank of the estero that goes to the Pasig River, and towards
the right of the other Callejon that is situated between the said Lot 2 and Lot 4 of the
[6]
same Block N.
As Sandicos property was transferred to several owners, the memorandum of

encumbrance of a voluntary easement in favor of Francisco M. Hidalgo was
consistently annotated at the back of every title covering Sandicos property until TCT
No. 176253 was issued in petitioners favor. On the other hand, Hidalgos property
was eventually transferred to respondents Joseph Chung, Kiat Chung and Cleto
Chung under TCT No. 121488.[7]
On May 26, 2000, petitioner filed a Petition to Cancel the Encumbrance of

Voluntary Easement of Right of Way[8] on the ground that the dominant estate
has an adequate access to a public road which is Matienza Street. The trial court
dismissed the petition on the ground that it is a land registration case. Petitioner
moved for reconsideration.Thereafter, the trial court conducted an ocular
inspection of the property. In an Order[9] dated November 24, 2000, the trial court
granted the motion and made the following observations:
1. The dominant estate is a property enclosed with a concrete fence
with no less than three (3) doors in it, opening to an alley belonging to
the servient estate owned by the petitioner. The alley is leading to
Matienza St.;
2. The dominant estate has a house built thereon and said house has a
very wide door accessible to Matienza St. without any obstruction. Said
street is perpendicular to J.P. Laurel St.
It is therefore found that the dominant estate has an egress to Matienza St. and
[10]
does not have to use the servient estate.
In their Answer,[11] respondents countered that the extinguishment of the

easement will be of great prejudice to the locality and that petitioner is guilty of
laches since it took petitioner 15 years from acquisition of the property to file the
petition.
In a Decision dated August 19, 2002, the trial court ordered the cancellation
of the encumbrance of voluntary easement of right of way in favor of the
dominant estate owned by respondents. It found that the dominant estate has no
more use for the easement since it has another adequate outlet to a public road
which is Matienza Street. The dispositive portion of the decision reads:
IN VIEW OF ALL THE FOREGOING, the Court hereby orders the cancellation of
the Memorandum of Encumbrance annotated in TCT No. 176253 which granted a right
of way in favor of the person named therein and, upon the finality of this decision, the
Register of Deeds of the City of Manila is hereby directed to cancel said encumbrance.
With respect to the other prayers in the petition, considering that the same are
mere incidents to the exercise by the owners of right of their ownership which they
could well do without the Courts intervention, this Court sees no need to specifically
rule thereon. The Court cannot award plaintiffs claims for damages and attorneys fees
for lack of sufficient bases therefor.
[12]
SO ORDERED.
Respondents appealed to the Court of Appeals. On October 27, 2005, the
appellate court reversed the decision of the trial court and dismissed the petition
to cancel the encumbrance of voluntary easement of right of way.
The appellate court ruled that when petitioners petition was initially
dismissed by the executive judge, the copy of the petition and the summons had
not yet been served on respondents. Thus, when petitioner moved to reconsider
the order of dismissal, there was no need for a notice of hearing and proof of
service upon respondents since the trial court has not yet acquired jurisdiction
over them. The trial court acquired jurisdiction over the case and over
respondents only after the summons was served upon them and they were later
given ample opportunity to present their evidence.
The appellate court also held that the trial court erred in canceling the
encumbrance of voluntary easement of right of way. The appellate court ruled
that Article 631(3)[13]of the Civil Code, which was cited by the trial court, is
inapplicable since the presence of an adequate outlet to a highway extinguishes
only legal or compulsory easements but not voluntary easements like in the
instant case. There having been an agreement between the original parties for
the provision of an easement of right of way in favor of the dominant estate, the
same can be extinguished only by mutual agreement or by renunciation of the
owner of the dominant estate.
The decretal portion of the decision reads:

WHEREFORE, the foregoing considered, the appeal is hereby GRANTED and the
assailed decision is REVERSED and SET ASIDE. Accordingly, the petition to cancel the
encumbrance of right of way is dismissed for lack of merit.
No costs.
[14]
SO ORDERED.
Before us, petitioner alleges that the Court of Appeals erred in:

I.
BRUSHING ASIDE PETITIONERS CONTENTION THAT THE EASEMENT IS PERSONAL SINCE

THE ANNOTATION DID NOT PROVIDE THAT IT IS BINDING ON THE HEIRS OR ASSIGNS OF
SANDICO.
II.
NOT CONSIDERING THAT THE EASEMENT IS PERSONAL SINCE NO COMPENSATION WAS
GIVEN TO PETITIONER.
III.
DISREGARDING THE CIVIL CODE PROVISION ON UNJUST ENRICHMENT.
IV.
[15]
TREATING THE EASEMENT AS PREDIAL.
Petitioner contends that the fact that Sandico and Hidalgo resorted to

judicial intervention only shows that they contested the existence of the requisite
factors establishing a legal easement. Besides, the annotation itself provides that
the easement is exclusively confined to the parties mentioned therein, i.e.,
Sandico and Hidalgo. It was not meant to bind their heirs or assigns; otherwise,
they would have expressly provided for it. Petitioner adds that it would be an
unjust enrichment on respondents part to continue enjoying the easement
without adequate compensation to petitioner. Petitioner also avers that to say
that the easement has attached to Hidalgos property is erroneous since such
property no longer exists after it has been subdivided and registered in
respondents respective names.[16] Petitioner further argues that even if it is bound
by the easement, the same can be cancelled or revoked since the dominant
estate has an adequate outlet without having to pass through the servient estate.
Respondents adopted the disquisition of the appellate court as their

counter-arguments.
The petition lacks merit.
As defined, an easement is a real right on anothers property, corporeal and

immovable, whereby the owner of the latter must refrain from doing or allowing
somebody else to do or something to be done on his property, for the benefit of
another person or tenement. Easements are established either by law or by the
will of the owner. The former are called legal, and the latter, voluntary
easements.[17]
In this case, petitioner itself admitted that a voluntary easement of right of
way exists in favor of respondents. In its petition to cancel the encumbrance of
voluntary easement of right of way, petitioner alleged that [t]he easement is
personal. It was voluntarily constituted in favor of a certain Francisco Hidalgo y
Magnifico, the owner of [the lot] described as Lot No. 2, Block 2650. [18] It further
stated that the voluntary easement of the right of way in favor of Francisco
Hidalgo y Magnifico was constituted simply by will or agreement of the parties. It
was not a statutory easement and definitely not an easement created by such
court order because [the] Court merely declares the existence of an easement
created by the parties.[19] In its Memorandum[20] dated September 27, 2001,
before the trial court, petitioner reiterated that [t]he annotation found at the
back of the TCT of Unisource is a voluntary easement.[21]
Having made such an admission, petitioner cannot now claim that what
exists is a legal easement and that the same should be cancelled since the
dominant estate is not an enclosed estate as it has an adequate access to a public
road which is Callejon Matienza Street.[22] As we have said, the opening of an
adequate outlet to a highway can extinguish only legal or compulsory easements,
not voluntary easements like in the case at bar. The fact that an easement by
grant may have also qualified as an easement of necessity does not detract from
its permanency as a property right, which survives the termination of the
necessity.[23] A voluntary easement of right of way, like any other contract, could
be extinguished only by mutual agreement or by renunciation of the owner of the
dominant estate.[24]
Neither can petitioner claim that the easement is personal only

to Hidalgo since the annotation merely mentioned Sandico and Hidalgo without
equally binding their heirs or assigns. That the heirs or assigns of the parties were
not mentioned in the annotation does not mean that it is not binding on
them. Again, a voluntary easement of right of way is like any other contract. As
such, it is generally effective between the parties, their heirs and assigns, except
in case where the rights and obligations arising from the contract are not
transmissible by their nature, or by stipulation or by provision of law.[25] Petitioner
cites City of Manila v. Entote[26] in justifying that the easement should bind only
the parties mentioned therein and exclude those not so mentioned. However,
that case is inapplicable since the issue therein was whether the easement was
intended not only for the benefit of the owners of the dominant estate but of the
community and the public at large.[27] In interpreting the easement, the Court
ruled that the clause any and all other persons whomsoever in the easement
embraces only those who are privy to the owners of the dominant estate, Lots 1
and 2 Plan Pcs-2672 and excludes the indiscriminate public from the enjoyment of
the right-of-way easement.[28]
We also hold that although the easement does not appear in respondents
title over the dominant estate, the same subsists. It is settled that the registration
of the dominant estate under the Torrens system without the annotation of the
voluntary easement in its favor does not extinguish the easement. On the
contrary, it is the registration of the servient estate as free, that is, without the
annotation of the voluntary easement, which extinguishes the easement.[29]
Finally, the mere fact that respondents subdivided the property does not
extinguish the easement. Article 618 [30] of the Civil Code provides that if the
dominant estate is divided between two or more persons, each of them may use
the easement in its entirety, without changing the place of its use, or making it
more burdensome in any other way.
WHEREFORE, the instant petition is DENIED. The Decision dated October

27, 2005 and the Resolution dated June 19, 2006 of the Court of Appeals in CA-
G.R. CV No. 76213 are AFFIRMED.
SO ORDERED.

Associate Justice

WE CONCUR:

CONCHITA CARPIO MORALES
Associate Justice

MINITA V. CHICO-NAZARIO TERESITA J. LEONARDO-DE CASTRO
ARTURO D. BRION
Associate Justice
ATTESTATION

I attest that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the
Courts Division.
Associate Justice
Chairperson
CERTIFICATION

REYNATO S. PUNO
Chief Justice
*
Designated member of the Second Division per Special Order No. 658.
*
Designated member of the Second Division per Special Order No. 635.
[1]
Rollo, pp. 26-34. Penned by Associate Justice Josefina Guevara-Salonga, with Associate Justices Delilah
Vidallon-Magtolis and Fernanda Lampas Peralta concurring.
[2]
Id. at 35-36. Penned by Associate Justice Josefina Guevara-Salonga, with Associate Justices Godardo A. Jacinto
and Fernanda Lampas Peralta concurring.
[3]
Records, pp. 233-238. Penned by Judge Concepcion S. Alarcon-Vergara.
[4]
Id. at 10.
[5]
Id. at 11-12.
[6]
Id. at 12.
[7]
Id. at 50.
[8]
Id. at 1-8.
[9]
Id. at 34.
[10]
Id.
[11]
Id. at 42-47.
[12]
Id. at 237-238.
[13]
ART. 631. Easements are extinguished:
xxxx
(3) When either or both of the estates fall into such condition that the easement cannot be used; but it shall revive if
the subsequent condition of the estates or either of them should again permit its use, unless when the use
becomes possible, sufficient time for prescription has elapsed, in accordance with the provisions of the
preceding number;
[14]
Rollo, p. 33.
[15]
Id. at 17-18.
[16]
Id. at 37-39. On May 3, 2005, the property was divided and TCT Nos. 267948, 267949 and 267950 were issued
to respondents.
[17]
Private Development Corporation of the Philippines v. Court of Appeals, G.R. No. 136897, November 22, 2005,
475 SCRA 591, 602.
[18]
Records, p. 2.
[19]
Id. at 3-4.
[20]
Id. at 132-142.
[21]
Id. at 135.
[22]
Id. at 4.
[23]
La Vista Association, Inc. v. Court of Appeals, G.R. No. 95252, September 5, 1997, 278 SCRA 498, 514.
[24]
Id. at 513.
[25]
CIVIL CODE, Art. 1311.
[26]
No. L-24776, June 28, 1974, 57 SCRA 497.
[27]
Id. at 504.
[28]
Id. at 507.
[29]
Purugganan v. Paredes, No. L-23818, January 21, 1976, 69 SCRA 69, 77-78.
[30]
ART. 618. Easements are indivisible. If the servient estate is divided between two or more persons, the easement
is not modified, and each of them must bear it on the part which corresponds to him.
If it is the dominant estate that is divided between two or more persons, each of them may use the easement in
its entirety, without changing the place of its use, or making it more burdensome in any other way.
FIRST DIVISION
[G.R. No. 112331. May 29, 1996]
ANASTACIA QUIMEN, petitioner, vs. COURT OF APPEALS and

YOLANDA Q. OLIVEROS, respondents.
DECISION
BELLOSILLO,J.:
IN EASEMENT OF RIGHT OF WAY that easement where the way is shortest and
will cause least prejudice shall be chosen. However, if the two circumstances do not
concur in a single tenement, the way where damage will be least shall be used even if
not the shortest route. This is so because least prejudice prevails over shortest
[1]
distance. This means that the court is not bound to establish what is the shortest
distance; a longer way may be adopted to avoid injury to the servient estate, such as
when there are constructions or walls which can be avoided by a round about way, or to
secure the interest of the dominant owner, such as when the shortest distance would
place the way on a dangerous decline.
Thus we conclude from the succeeding facts: Petitioner Anastacia Quimen together
with her brothers Sotero, Sulpicio, Antonio and sister Rufina inherited a piece of
property situated in Pandi, Bulacan. They agreed to subdivide the property equally
among themselves, as they did, with the shares of Anastacia, Sotero, Sulpicio and
Rufina abutting the municipal road. The share of Anastacia, located at the extreme left,
was designated as Lot No. 1448-B- 1. It is bounded on the right by the property of
Sotero designated as Lot. No. 1448-B-2. Adjoining Soteros property on the right are
Lots Nos. 1448-B-3 and 1448-B-4 originally owned by Rufina and Sulpicio, respectively,
but which were later acquired by a certain Catalina Santos. Located directly behind the
lots of Anastacia and Sotero is the share of their brother Antonio designated as Lot No.
1448-B-C which the latter divided into two (2) equal parts, now Lots Nos. 1448-B-6-A
and 1448-B-6-B, each with an area of 92 square meters. Lot No. 1448-B-6-A is located
behind Anastacias Lot No. 1448-B-1, while Lot No. 1448-B-6-B is behind the property of
Sotero, father of respondent Yolanda.
In February 1982 Yolanda purchased Lot No. 1448-B-6-A from her uncle Antonio
through her aunt Anastacia who was then acting as his administratrix. According to
Yolanda, when petitioner offered her the property for sale she was hesitant to buy as it
had no access to a public road. But Anastacia prevailed upon her to buy the lot with the
assurance that she would give her a right of way on her adjoining property for P200.00
per square meter.
Thereafter, Yolanda constructed a house on the lot she bought using as her
passageway to the public highway a portion of Anastacia s property. But when Yolanda
finally offered to pay for the use of the pathway Anastacia refused to accept the
payment. In fact she was thereafter barred by Anastacia from passing through her
property. [2]
In February 1986 Yolanda purchased the other lot of Antonio Quimen, Lot No.
1448-B-6-B, located directly behind the property of her parents who provided her a
pathway gratis et amore between their house, extending about nineteen (19) meters
from the lot of Yolanda behind the sari-sari store of Sotero, and Anastacias perimeter
fence. The store is made of strong materials and occupies the entire frontage of the lot
measuring four (4) meters wide and nine meters (9) long. Although the pathway leads to
the municipal road it is not adequate for ingress and egress. The municipal road cannot
be reached with facility because the store itself obstructs the path so that one has to
pass through the back entrance and the facade of the store to reach the road.
On 29 December 1987 Yolanda filed an action with the proper court praying for a
right of way through Anastacia s property. An ocular inspection upon instruction of the
presiding judge was conducted by the branch clerk of court. The report was that the
proposed right of way was at the extreme right of Anastacias property facing the public
highway, starting from the back of Soteros sari-sari store and extending inward by one
(1) meter to her property and turning left for about five (5) meters to avoid the store of
Sotero in order to reach the municipal road and the way was unobstructed except for an
[3]
avocado tree standing in the middle. [4]
But on 5 September 1991 the trial court dismissed the complaint for lack of cause of
action, explaining that the right of way through Soteros property was a straight path and
to allow a detour by cutting through Anastacias property would no longer make the path
straight. Hence the trial court concluded that it was more practical to extend the existing
pathway to the public road by removing that portion of the store blocking the path as
that was the shortest route to the public road and the least prejudicial to the parties
concerned than passing through Anastacias property. [5]
On appeal by respondent Yolanda, the Court of Appeals reversed the lower court
and held that she was entitled to a right of way on petitioners property and that the way
proposed by Yolanda would cause the least damage and detriment to the servient
estate. The appellate court however did not award damages to private respondent as
[6]
petitioner did not act in bad faith in resisting the claim.

Petitioner now comes to us imputing ERROR to respondent Court of Appeals: (a) in
disregarding the agreement of the parties; (b) in considering petitioners property as a
servient estate despite the fact that it does not abut or adjoin the property of private
respondent; and, (c) in holding that the one-meter by five-meter passage way proposed
by private respondent is the least prejudicial and the shortest distance to the public
road.
Incidentally, petitioner denies having promised private respondent a right of way.
She claims that her agreement with private respondent was to provide the latter with a
right of way on the other lot of Antonio Quimen under her administration when it was not
yet sold to private respondent. Petitioner insists that passing through the property of
Yolandas parents is more accessible to the public road than to make a detour to her
property and cut down the avocado tree standing thereon.
Petitioner further argues that when Yolanda purchased Lot No. 1448-B-6-B in 1986
the easement of right of way she provided her (petitioner) was ipso jure extinguished as
a result of the merger of ownership of the dominant and the servient estates in one
person so that there was no longer any compelling reason to provide private respondent
with a right of way as there are other surrounding lots suitable for the
purpose. Petitioner strongly maintains that the proposed right of way is not the shortest
access to the public road because of the detour and that, moreover, she is likely to
suffer the most damage as she derives a net income of P600.00 per year from the sale
of the fruits of her avocado tree, and considering that an avocado has an average life
span of seventy (70) years, she expects a substantial earning from it. [7]
But we find no cogent reason to disturb the ruling of respondent appellate court
granting a right of way to private respondent through petitioners property. In fact, as
between petitioner Anastacia and respondent Yolanda their agreement has already
been rendered moot insofar as it concerns the determination of the principal issue
herein presented. The voluntary easement in favor of private respondent, which
petitioner now denies but which the court is inclined to believe, has in fact become a
legal easement or an easement by necessity constituted by law. [8]
As defined, an easement is a real right on anothers property, corporeal and

somebody else to do or something to be done on his property, for the benefit of another
person or tenement. It is jus in re aliena, inseparable, indivisible and perpetual, unless
[9]
extinguished by causes provided by law. A right of way in particular is a privilege

constituted by covenant or granted by law to a person or class of persons to pass over
[10]
anothers property when his tenement is surrounded by realties belonging to others

without an adequate outlet to the public highway. The owner of the dominant estate can
demand a right of way through the servient estate provided he indemnifies the owner
thereof for the beneficial use of his property. [11]
The conditions sine qua non for a valid grant of an easement of right of way are: (a)
the dominant estate is surrounded by other immovables without an adequate outlet to a
public highway; (b) the dominant estate is willing to pay the proper indemnity; (c) the
isolation was not due to the acts of the dominant estate; and, (d) the right of way being
claimed is at a point least prejudicial to the servient estate.
[12]
A cursory examination of the complaint of respondent Yolanda for a right of

way readily shows that
[13]
[E]ven before the purchase of the said parcels of land the plaintiff was reluctant to
purchase the same for they are enclosed with permanent improvements like a concrete
fence and store and have (sic) no egress leading to the road but because of the
assurance of the defendant that plaintiff will be provided one (1) meter wide and
five (5) meters long right of way in the sum of P200.00 per square meter to be taken
from Anastacias lot at the side of a concrete store until plaintiff reach(es) her fathers
land, plaintiff was induced to buy the aforesaid parcels of land x x x. That the
aforesaid right of way is the shortest, most convenient and the least onerous leading to
the road and being used by the plaintiffs predecessors-in-interest from the very
inception x x x.
The evidence clearly shows that the property of private respondent is hemmed in by
the estates of other persons including that of petitioner; that she offered to pay P200.00
per square meter for her right of way as agreed between her and petitioner; that she did
not cause the isolation of her property; that the right of way is the least prejudicial to the
servient estate. These facts are confirmed in the ocular inspection report of the clerk of
[14]
court, more so that the trial court itself declared that [t]he said properties of Antonio
Quimen which were purchased by plaintiff Yolanda Quimen Oliveros were totally
isolated from the public highway and there appears an imperative need for an easement
of right of way to the public highway. [15]
Petitioner finally insists that respondent court erroneously concluded that the right of
way proposed by private respondent is the least onerous to the parties. We cannot
agree. Article 650 of the New Civil Code explicitly states that the easement of right of
way shall be established at the point least prejudicial to the servient estate and, insofar
as consistent with this rule, where the distance from the dominant estate to a public
highway may be the shortest. The criterion of least prejudice to the servient estate must
prevail over the criterion of shortest distance although this is a matter ofjudicial
appreciation. While shortest distance may ordinarily imply least prejudice, it is not
always so as when there are permanent structures obstructing the shortest
distance; while on the other hand, the longest distance may be free of obstructions and
the easiest or most convenient to pass through. In other words, where the easement
may be established on any of several tenements surrounding the dominant estate, the
one where the way is shortest and will cause the least damage should be
chosen. However, as elsewhere stated, if these two (2) circumstances do not concur in
a single tenement, the way which will cause the least damage should be used, even if it
will not be the shortest. This is the test.
[16]
In the trial court, petitioner openly admitted -
Q. You testified during your direct examination about this plan, kindly go over this
and please point to us in what portion of this plan is the house or store of the father of
the (plaintiff)?
A. This one, sir (witness pointed a certain portion located near the proposed right
of way).
xxx xxx xxx
Q. Now, you will agree with me x x x that this portion is the front portion of the lot
owned by the father of the plaintiff and which was (sic) occupied by a store made
up of strong materials?
A. It is not true, sir.
Q. What materials does (sic) this store of the father of the plaintiff made of?
A. Hollow blocks and the side is made of wood, sir.
xxx xxx xxx
Q. Just before your brother disposed that 1/2 portion of the lot in question, what right of
way does (sic) he use in reaching the public road, kindly point to this sketch that
he is (sic) using in reaching the public road?
A. In my property, sir.
Q. Now you will agree with me x x x the main reason why your brother is (sic) using
this property is because there was a store located near this portion?
A. Yes, and according to the father of Yolanda there is no other way than this, sir.[17]
The trial court found that Yolandas property was situated at the back of her fathers
property and held that there existed an available space of about nineteen (19) meters
long which could conveniently serve as a right of way between the boundary line and
the house of Yolanda s father; that the vacant space ended at the left back of Soteros
store which was made of strong materials; that this explained why Yolanda requested a
detour to the lot of Anastacia and cut an opening of one (1) meter wide and
five (5) meters long to serve as her right of way to the public highway. But
notwithstanding its factual observations, the trial court concluded, although erroneously,
that Yolanda was not entitled to a right of way on petitioners property since a detour
through it would not make the line straight and would not be the route shortest to the
public highway.
In applying Art. 650 of the New Civil Code, respondent Court of Appeals declared
that the proposed right of way of Yolanda, which is one (1) meter wide and
five (5) meters long at the extreme right of petitioners property, will cause the least
prejudice and/or damage as compared to the suggested passage through the property
of Yolanda s father which would mean destroying the sari-sari store made of strong
materials. Absent any showing that these findings and conclusion are devoid of factual
support in the records, or are so glaringly erroneous, this Court accepts and adopts
them. As between a right of way that would demolish a store of strong materials to
provide egress to a public highway, and another right of way which although longer will
only require an avocado tree to be cut down, the second alternative should be
preferred. After all, it is not the main function of this Court to analyze or weigh the
evidence presented all over again where the petition would necessarily invite calibration
of the whole evidence considering primarily the credibility of witnesses, existence and
relevancy of specific surrounding circumstances, their relation to each other, and the
probabilities of the situation. In sum, this Court finds that the decision of respondent
[18]
appellate court is thoroughly backed up by law and the evidence.

WHEREFORE, no reversible error having been committed by respondent Court of
Appeals, the petition is DENIED and the decision subject of review is AFFIRMED. Costs
against petitioner.
SO ORDERED.
Padilla (Chairman), Vitug, Kapunan, and Hermosisima, Jr., JJ., concur.
[1]
Tolentino, Arturo M., Commentaries and Jurisprudence on the Civil Code of the Philippines, 1954 ed.,
Vol. II, p. 332, citing Casals Colldecarrera, pp. 108- 109.
[2]
Memorandum for private respondent, Rollo, pp. 56-58
[3]
Docketed as Civil Case No. 690-M-87, raffled to Br. 19 presided by Judge Camilo O. Montesa, Jr.
[4]
Exh. B, Ocular Inspection Report, Records, pp. 24-25.
[5]
Records, pp. 87-89.
[6]
Decision penned by Justice Fidel P. Purisima, concurred in by Justices Justo P. Torres, Jr., and
Bernardo P. Pardo; Rollo, pp. 14-23.
[7]
Memorandum of Petitioner, Rollo, pp. 70-75.
[8]
Sec. 3, Ch. 2, Title VII, Bk. II, NCC.
[9]
3 Sanchez Roman 472.
[10]
Art. 634, NCC.
[11]
Art. 649, NCC. The owner, or any person who by virtue of a real right may cultivate or use any
immovable, which is surrounded by other immovables pertaining to other persons and without
adequate outlet to a public highway, is entitled to demand a right of way through the neighboring
estates, after payment of the proper indemnity. Should this easement be established in such a
manner that its use may be continuous for all the needs of the dominant estate, establishing a
permanent passage, the indemnity shall consist of the value of the land occupied and the amount
of the damage caused to the servient estate x x x In case the right of way is limited to the
necessary passage for the cultivation of the estate surrounded by others and for the gathering of
its crops through the servient estate without a permanent way, the indemnity shall consist in the
payment of the damage caused by such encumbrance. This easement is not compulsory if the
isolation of the immovable is due to the proprietors own acts.
[12]
Costabella Corporation v. Court of Appeals, G.R. No. 80511, 25 January 1991, 193 SCRA 333,
citing Locsin v. Climaco, No. L-273 19, 31 January 1969,26 SCRA 816, Angela Estate, Inc. v.
Court of First instance of Negros Occidental, No. L-27084, 31 July 1968, 24 SCRA 500, Bacolod
Murcia Milling Co., Inc. v. Capitol Subdivision, No. L-25887, 26 July 1966, 17 SCRA 731.
[13]
Exh. A, Records, pp. 1-4.
[14]
TSN, 6 July 1988.
[15]
Records, p. 87.
[16]
Tolentino, Arturo M., Commentaries and Jurisprudence on the Civil Code of the Philippines, 1972 ed.,
Vol. II, p. 374, citing 2 Castan 275.
[17]
TSN, pp. 14-15, 4 January 1989.
[18]
Bernardo v. Court of Appeals, G.R. No. 101680,7 December 1992, 216 SCRA 224.

THIRD DIVISION

G.R. No. 172077

BICOL AGRO-
INDUSTRIAL PRODUCERS
COOPERATIVE, INC. (BAPCI),

Petitioner,

Present:

CARPIO, J., Chairperson,
- versus
CARPIO MORALES,*
VELASCO, JR.,
EDMUNDO O. OBIAS, PERFECTO O.
OBIAS, VICTOR BAGASINA, ELENA NACHURA, and
BENOSA, MELCHOR BRANDES,
PERALTA, JJ.
ROGELIO MONTERO, PEDRO
MONTERO, CLAUDIO RESARI, PILAR
GALON, ANTONIO BUISON,

PRUDENCIO BENOSA, JR., MARIA
VILLAMER and ROBERTO PADUA, Promulgated:
Respondent. October 9, 2009

x----------------------------------------------------x

DECISION

PERALTA, J.:
Before this Court is a Petition for Review on certiorari[1] under Rule 65 of

the Rules of Court, seeking to set aside the August 24, 2005 Decision [2] and March
28, 2006 Resolution[3] of the Court of Appeals (CA) in CA-G.R. CV No. 59016.
The facts of the case:
Sometime in 1972, the Bicol Sugar Development Corporation (BISUDECO)

was established at Himaao, Pili, Camarines Sur. In the same year, BISUDECO
constructed a road (the disputed road) measuring approximately 7 meters wide
and 2.9 kilometers long. The disputed road was used by BISUDECO in hauling and
transporting sugarcane to and from its mill site (Pensumil) and has thus become
indispensable to its sugar milling operations.[4]
On October 30, 1992, petitioner Bicol Agro-Industrial Producers

Cooperative, Inc. acquired the assets of BISUDECO. On April 19, 1993, petitioner
filed a Complaint[5]against respondents Edmundo Obias, Perfecto Obias, Victor
Bagasina, Elena Benosa, Melchor Brandes, Rogelio Montero, Pedro Montero,
Claudio Resari, Pilar Galon, Antonio Buison, Prudencio Benosa, Jr., Victor Bagasina
Jr., Maria Villamer, and Roberto Padua, alleging that on March 27, 1993 and April
3, 1993, respondents unjustifiably barricaded the disputed road by placing
bamboos, woods, placards and stones across it, preventing petitioners and the
other sugar planters vehicles from passing through the disputed road, thereby
causing serious damage and prejudice to petitioner.[6]
Petitioner alleged that BISUDECO constructed the disputed road pursuant to an

agreement with the owners of the ricefields the road traversed. The agreement
provides that BISUDECO shall employ the children and relatives of the landowners
in exchange for the construction of the road on their properties. Petitioner
contends that through prolonged and continuous use of the disputed road,
BISUDECO acquired a right of way over the properties of the landowners, which
right of way in turn was acquired by it when it bought BISUDECOs assets.
Petitioner prayed that respondents be permanently ordered to restrain from
barricading the disputed road and from obstructing its free passage.[7]
In an Order[8] dated April 19, 1993, the Regional Trial Court of Pili (RTC),
Camarines Sur, 5th Judicial Region, Branch 31, ordered respondents, their agents
and representatives to cease and desist from placing barricades on the disputed
road.[9]
In their Answer,[10] respondents denied having entered into an agreement with

BISUDECO regarding the construction and the use of the disputed road. They
alleged that BISUDECO, surreptitiously and without their knowledge and consent,
constructed the disputed road on their properties and has since then
intermittently and discontinuously used the disputed road for hauling sugarcane
despite their repeated protests. Respondents claimed they tolerated BISUDECO in
the construction and the use of the road since BISUDECO was a government-
owned and controlled corporation, and the entire country was then under Martial
Law. Respondents likewise denied that the road has become a public road, since
no public funds were used for its construction and maintenance. Moreover,
respondents alleged that with the exception of Edmundo and Perfecto Obias, they
are actual tillers of the ricelands, having acquired their rights over said lands
under Presidential Decree No. 27 (PD 27). Edmundo and Perfecto Obias are the
owners of the eastern portion of the property on which a portion of the road
going to BISUDECO was constructed. Respondents denied that they barricaded
the road.[11]
Jaime Manubay and Manolito Maralit, for themselves and in representation

of other sugarcane planters, filed the first complaint-in-intervention.[12]
Petitioner filed an Amended Complaint[13] and with leave of court a Re-

Amended Complaint,[14] where it averred, as an alternative cause of action in the
event the lower court does not find merit in its causes of action, that it will avail
of the benefits provided for under Article 649[15] of the New Civil Code. Petitioner
thus demanded from respondents a right of way over the disputed road for its
use.[16]
Respondents filed an Answer[17] to refute petitioners alternative cause of

action. Respondents claimed that the road from the sugarmill to the Maharlika
Highway at Barangay Romero, Bula, Camarines Sur, which exits at the Rural Bank
of Bula site, had a distance of only about 15 kilometers; hence, respondents
asserted that said road was shorter and was a more appropriate right of way than
the disputed road.[18]
On July 21, 1993, the RTC issued a Writ of Preliminary Injunction[19] ordering

the respondents to desist from constructing barricades across the road.
On June 28, 1994, nine other cooperatives[20] filed their Complaint-in-

Intervention.[21]

On June 25, 1997 the RTC rendered a Decision,[22] the dispositive portion of

which reads:

WHEREFORE, premises considered, a decision is hereby rendered declaring the
Writ of Preliminary Injunction issued against all the herein defendants, their agents,
representatives and such other persons acting in their behalf, permanent and perpetual
BUT the plaintiff Bicol Agro-Industrial Cooperative, Inc., (BAPCI) is hereby ordered to pay
the owners of the lots affected by the road, viz: Pedro Montero P299,040.00; Pedro
Galon P52,920.00; Clara Padua P46,410.00; Antonio Buizon P35,070.00; Rogelio
Montero P41,160.00; Maria Villamer P41,580.00; Melchor Brandes P76,440.00;
Prudencio Benosa P41, 650.00; Elena Benosa P39,550.00; Victor Bagasina,
Jr. P39,410.00; and Claudio Resari P40,950.00. Upon full payment thereof, the plaintiff
shall be declared the absolute owner of the road in question. Legal rate if interest is
hereby imposed upon the plaintiff from the finality of this decision until fully payment
hereof. No costs.
SO ORDERED.[23]
The RTC ruled that petitioner failed to present any concrete evidence to
prove that there was an agreement between BISUDECO and respondents for the
construction of the disputed road.[24] Moreover, it held that petitioner did not
acquire the same by prescription.[25] The RTC, however, also held that petitioner
was entitled to a compulsory easement of right of way as provided for under
Article 649 of the New Civil Code upon payment of proper indemnity to
respondents.[26]
Both parties filed a motion for reconsideration of the RTC Decision.

Petitioner contended that: (1) the value of the land is excessive; (2) the evidence
is insufficient to justify the award; (3) the decision is contrary to law and
jurisprudence. Respondents, on the other hand, alleged that: (1) the trial court
erred in declaring the persons mentioned in the decisions dispositive portion to
be entitled to indemnity for the construction and the use of the disputed road; (2)
BAPCI should not be declared the absolute owner of the disputed road upon full
payment of the indemnity due to the defendants; and (3) the decision failed to
award damages.[27]
On September 24, 1997, the RTC denied both motions for reconsideration.
[28]
The parties then appealed to the CA.
On August 24, 2005, the CA rendered a Decision, the dispositive portion of

which reads:

WHEREFORE, premises considered, the appeal is PARTLY GRANTED. The assailed
decision of the Regional Trial Court, Branch 31, Pili, Camarines Sur, in Civil Case No. P-
1899 is hereby MODIFIED as follows: the awards of Php46,410.00 to Clara Padua and
Php41,650.00 to Prudencio Benosa are hereby DELETED, and the declaration that the
plaintiff BAPCI shall become the absolute owner of the disputed road upon full payment
of indemnity is REVERSED and SET ASIDE. Accordingly, the owners of the servient estate
in the easement of right of way recognized in this Decision shall retain ownership of the
lands affected by the easement in accordance with Art. 630 of the Civil Code. We hereby
AFFIRM the appeal in all other respects.
SO ORDERED.[29]
The CA affirmed the finding of the RTC that there was no conclusive proof
to sufficiently establish the existence of an agreement between BISUDECO and
respondents regarding the construction of the disputed road.[30] Moreover, the CA
also declared that an easement of right of way is discontinuous and as such
cannot be acquired by prescription.[31] The CA likewise affirmed the finding of the
RTC that petitioner was entitled to a compulsory easement of right of way upon
payment of proper indemnity to respondents. The CA, however, declared that
ownership over the disputed road should remain with respondents, despite the
grant of a compulsory easement.[32] Lastly, the CA deleted the awards to
Prudencio Benosa (Benosa) and Clara Padua (Padua), since the former never
claimed ownership of any portion of the lands affected by the disputed road and
the latter was not a party to the proceedings below.[33]
Petitioner then filed a Motion for Reconsideration alleging among others

that the CA Decision failed to rule on the issue of estoppel and laches. Moreover,
Benosa and Padua filed a Motion for Reconsideration assailing the portion of the
CA Decision deleting the award of indemnity to them. On March 28, 2006, the CA
issued a Resolution denying the same.
Hence, herein petition, with petitioner raising the following assignment of

errors, to wit:

I.
THE HONORABLE COURT OF APPEALS ERRED SERIOUSLY IN NOT FINDING THAT

THERE WAS FORGED AN AGREEMENT BETWEEN BISUDECO MANAGEMENT AND THE
PRIVATE RESPONDENTS FOR THE CONTRUCTION OF THE ROAD IN QUESTION.
II.
THE HONORABLE PUBLIC RESPONDENT COURT OF APPEALS ERRED IN NOT

CONSIDERING THE PRINCIPLES OF PRESCRIPTION, LACHES AND ESTOPPEL IN THE CASE
AT BAR.
III.
THE HONORABLE COURT OF APPEALS ERRED IN COMPLETELY DISREGARDING

THE CLASSIFICATION OF THE ROAD IN QUESTION AS BARANGAY ROAD.
IV.
IN THE ALTERNATIVE CAUSE OF ACTION, THE PUBLIC RESPONDENT SERIOUSLY

ERRED IN CONSIDERING THE VALUATION OF THE LANDS AFFECTED BY THE ROAD IN
1994, AND NOT IN 1974, WHEN SAID ROAD WAS CONSTRUCTED.
V.
THE HONORABLE PUBLIC RESPONDENT ERRED SERIOUSLY WHEN IT FAILED

ALSO TO CONSIDER THE LEGAL PRINCIPLE OF UNJUST ENRIGHTMENT AT THE EXPENSE
OF ANOTHER.[34]
At the outset, this Court shall address some procedural matters. Quite
noticeably, herein petition is denominated as one filed under Rule 65[35] of the
Rules of Court notwithstanding that it seeks to assail the Decision and Resolution
of the CA. Clearly, petitioner had availed of the improper remedy as the appeal
from a final disposition of the CA is a petition for review under Rule 45 and not a
special civil action under Rule 65 of the Rules of Court.[36]
In Active Realty and Development Corporation v. Fernandez, [37] this Court

discussed the difference between petitions filed under Rule 65 and Rule 45, viz:

A petition for certiorari under Rule 65 is proper to correct errors of jurisdiction
committed by the lower court, or grave abuse of discretion which is tantamount to lack
of jurisdiction. This remedy can be availed of when there is no appeal, or any plain,
speedy, and adequate remedy in the ordinary course of law.
Appeal by certiorari under Rule 45 of the Rules of Court, on the other hand, is a

mode of appeal available to a party desiring to raise only questions of law from a
judgment or final order or resolution of the Court of Appeals, the Sandiganbayan, the
Regional Trial Court or other courts whenever authorized by law.
x x x The general rule is that the remedy to obtain reversal or modification of

judgment on the merits is appeal. Thus, the proper remedy for the petitioner should
have been a petition for review on certiorari under Rule 45 of the Rules of Court since
the decision sought to be reversed is that of the CA. The existence and availability of
the right of appeal proscribes a resort to certiorari, because one of the requisites for
availment of the latter is precisely that there should be no appeal. The remedy of appeal
under Rule 45 of the Rules of Court was still available to the petitioner.[38]
Rule 45 is clear that decisions, final orders or resolutions of the Court of

Appeals in any case, i.e., regardless of the nature of the action or proceeding
involved, may be appealed to this Court by filing a petition for review, which
would be but a continuation of the appellate process over the original case.
[39]
Moreover, it is basic that one cannot avail of the remedy provided for under
Rule 65 when an appeal is still available. Hence, petitioner should have filed its
petition under Rule 45.
The procedural infirmity notwithstanding and in the interest of substantial

justice, this Court shall consider herein petition as one filed under Rule
45 especially since it was filed well within the reglementary period proscribed
under the said Rule. The Court also takes notice that the assignment of errors
raised by petitioner does not allege grave abuse of discretion or lack of
jurisdiction on the part of the CA.

On the Existence of an Agreement between BISUDECO and Respondents
Anent the first error raised, petitioner argues that the CA erred in not
finding that BISUDECO and respondents forged an agreement for the construction
of the road in dispute. Petitioner thus asserts its entitlement to an easement of
right of way over the properties of respondents by virtue of said agreement.
An easement of right of way was succinctly explained by the CA in the

following manner, to wit:

Easement or servitude is an encumbrance imposed upon an immovable for the
benefit of another immovable belonging to a different owner. By its creation, easement
is established either by law (in which case it is a legal easement) or by will of the parties
(a voluntary easement). In terms of use, easement may either be continuous or
discontinuous. The easement of right of way the privilege of persons or a particular
class of persons to pass over anothers land, usually through one particular path or
linen is characterized as a discontinuous easement because its use is in intervals and
depends on the act of man. Because of this character, an easement of a right of way
may only be acquired by virtue of a title.[40]
Article 622 of the New Civil Code is the applicable law in the case at bar, viz:

Art. 622. Continuous non-apparent easements, and discontinuous ones,
whether apparent or not, may be acquired only by virtue of a title.
Based on the foregoing, in order for petitioner to acquire the disputed road
as an easement of right-of-way, it was incumbent upon petitioner to show its
right by title or by an agreement with the owners of the lands that said road
traversed.
While conceding that they have no direct evidence of the alleged
agreement, petitioner posits that they presented circumstantial evidence which, if
taken collectively, would prove its existence.[41] Specifically, petitioner cites the
following circumstances, to wit:

a. The agreement was of public knowledge.[42] Allegedly BISUDECO and respondents
entered into an agreement for the construction of the road provided that the latter,
their children or relatives were employed with BISUDECO.
b. The road was continuously used by BISUDECO and the public in general.[43]
c. There was no protest or complaint from respondents for almost a period of two
decades.[44]
d. The portions of the land formerly belonging to respondents affected by the road
were already segregated and surveyed from the main lots.[45]
e. The road in dispute is already a barangay road.
The well-entrenched rule in our jurisdiction is that only questions of law may be
entertained by this Court in a petition for review on certiorari. This rule, however,
is not iron-clad and admits certain exceptions, such as when (1) the conclusion is
grounded on speculations, surmises or conjectures; (2) the inference is manifestly
mistaken, absurd or impossible; (3) there is grave abuse of discretion; (4) the
judgment is based on a misapprehension of facts; (5) the findings of fact are
conflicting; (6) there is no citation of specific evidence on which the factual
findings are based; (7) the findings of absence of facts are contradicted by the
presence of evidence on record; (8) the findings of the Court of Appeals are
contrary to those of the trial court; (9) the Court of Appeals manifestly overlooked
certain relevant and undisputed facts that, if properly considered, would justify a
different conclusion; (10) the findings of the Court of Appeals are beyond the
issues of the case; and (11) such findings are contrary to the admissions of both
parties.[46]

After a painstaking review of the records, this Court finds no justification to
warrant the application of any exception to the general rule.
Crucial to the petitioners cause was its burden of proving the existence of the
alleged agreement between BISUDECO and respondents for the construction of
the road. In this regard, the RTC found that petitioner failed to prove its existence,
to wit:

It is clear that the plaintiff failed to present any concrete evidence to prove that there
was such an agreement between BISUDECO and defendants. Hereunder quoted are
the testimonies of plaintiffs witnesses regarding the alleged agreement.
Romeo Deveterbo, Transportation Superintendent of BISUDECO testified
Cross Examination by Atty. Pejo
Q: You also mentioned that there was an agreement between Senator Cea, Mr.
Obias and some of the tenants?
A: Yes.
Q: You mentioned that this was not in writing, am I right?
A: Yes.
Q: How did you know about it that it was not in writing, who told you, Senator
Cea?
A: It was commonly known to all original employees of the BISUDECO.
Q: You know it from the management?

A: From co-employees.
Q: You learned about that agreement from you co-employees?
A: Yes.
Q: In other words, therefore, that is why you said you are confused between
Edmundo Cea and Perfecto Obias because you just learned it from other
employees and you were never present when they talked about it, am I right?
A: Yes. x x x
To this effect also is the testimony of Angel Lobo, head of the agricultural
Department of BAPCI, to wit:
A: Yes, your Honor?
COURT: From where did you learn?
A: From people whom I talked with at that time and it is a public common
knowledge at that time.
xxx
Atty. Carandang: I repeat my question, Your Honor.
You said you acquired it from or because of common knowledge and you
mentioned some people. Who are those people you are referring to whom you
acquired that knowledge?
A: Most of all, the late Benjamin Bagasina, Barangay Captain at that time who
was our employee in consideration of this agreement, then we have also a Civil
Engineering Head, Civil Engineering Department who is responsible for the
maintenance of this road. I learned from him that this arrangement established
the fact why this road was constructed.

Q: Who is the head of the Engineering Dept?
xxx
COURT: May answer.
A: Engineer Pablo Tordilla who was then the head of our Civil Engineering Dept.
But this Engineer Pablo Tordilla, Lobos alleged source of the information, was
never presented in Court. And, according to the Chief Accountant of BAPCI, David
Severo:
A: When I was interviewing Mrs. Alma Montero Penaflor she filed to me a

certain arrangement related to the used of the land to Himaao as road going to
the central.
COURT: You mean Himaao Millsite road?
A: Yes, sir.
Atty. Carandang:
Q: What arrangement is that supposedly filed to you?
A: She told me in exchange for the use of the road, the relatives or owners or
tenants of the land will be hired by the sugar Central?
COURT:
Q: So, only the tenants not the owners?
A: The tenants children the road belongs.
xxx

Finally, intervenor Antonio Austria, in trying to show you that there was consent
and approval on the part of the defendant Edmundo Obias to give the right of way to
BISUDECO at the time to be used in hauling the sugarcane of the planters to the Central,
averred the following uncertain statements:
A: Well, he has (sic) having a case against PENSUNIL, regarding the property I
think the right of way going to PENSUMIL right now we discuss it and he said he
is allowing it anymore but then I reminded him wayback in 1974 to 1980 he was
one of the biggest planters in the part of Partido so he consented to the late I
think Edmundo Cea, the owner ofBISUDECO at that time to pass his property
since he is also milling a lot of things at that time and many other things one of
the concession mill was I think some of the tenants there in Himaao will be
employed in the mill.
xxx
These aforequoted testimonies of the plaintiffs witnesses failed to

satisfactorily establish the plaintiffs contention that there was such an
agreement. Likewise, the list of the Employees of Defendants relatives, son/daughter
employed by the BISUDECO (Exhibit H) does not in any manner prove the alleged
agreement.[47]
For its part, the CA also ruled that petitioner failed to prove the existence of the
said agreement, to wit:

Like the lower court, we found no conclusive proof to sufficiently establish the
existence of an agreement between BISUDECO and the defendants-appellants
regarding the construction and the use of the disputed road. The lower court correctly
disbelieved the plaintiffs-appellants contention that an agreement existed because
there is simply no direct evidence to support this allegation. BAPCI submitted purely
circumstantial evidence that are not sufficiently adequate as basis for the inference than
an agreement existed. By themselves, the circumstances the plaintiffs-appellants
cited i.e., the employment of sixteen (16) relatives of the defendants-appellants; the
defendants-appellants unjustified silence; the fact that the existence of the agreement
is known to everyone, etc. are events susceptible of diverse interpretations and do not
necessarily lead to BAPCIs desired conclusion. Additionally, the testimonies that the
plaintiffs-appellants presented are mainly hearsay, as not one among the witnesses
had personal knowledge of the agreement by reason of direct participation in the
agreement or because the witness was present when the agreement was concluded
by the parties. Thus, given the defendants-appellants categorical denial that an
agreement existed, we sustain the lowers conclusion that no agreement existed
between BISUDECO and the defendants-appellants.[48]
Based on the foregoing, the inability of petitioner to prove the existence of an

agreement militates its allegations in herein petition. On this score, both the RTC
and the CA are one in ruling that petitioner had failed to prove the existence of
the agreement between BISUDECO and the respondents for the construction of
the road. Also, well-established is the rule that "factual findings of the Court of
Appeals are conclusive on the parties and carry even more weight when the said
court affirms the factual findings of the trial court."[49] Hence, this Court finds no
reason to reverse such findings.

On Acquisition by Prescription
Petitioner would have this Court re-examine Costabella Corporation v. Court of

Appeals[50] (Costabella) where the Court held that, It is already well-
established that a right ofway is discontinuous and, as such,
[51]
cannot be acquired by prescription. Petitioner contends that some recognized
authorities[52] share its view that an easement of right of way may be acquired by
prescription.
Be that as it may, this Court finds no reason to re-examine Costabella. This Court

is guided by Bogo-Medellin Milling Co., Inc. v. Court of Appeals[53] (Bogo-Medellin),
involving the construction of a railroad track to a sugar mill. In Bogo-Medellin, this
Court discussed the discontinuous nature of an easement of right of way and the
rule that the same cannot be acquired by prescription, to wit:
Continuous and apparent easements are acquired either by virtue of a title or by
prescription of ten years.
The trial court and the Court of Appeals both upheld this view for the reason that
the railroad right of way was, according to them, continuous and apparent in nature.
The more or less permanent railroad tracks were visually apparent and
they continuously occupied the subject strip of land from 1959 (the year the easement
granted by Feliciana Santillan to petitioner expired).Thus, with the lapse of the 10-year
prescriptive period in 1969, petitioner supposedly acquired the easement of right of way
over the subject land.
Following the logic of the courts a quo, if a road for the use of vehicles or the
passage of persons is permanently cemented or asphalted, then the right of way over
it becomes continuous in nature. The reasoning is erroneous.
Under civil law and its jurisprudence, easements are either continuous or
discontinuous according to the manner they are exercised, not according to the
presence of apparent signs or physical indications of the existence of such easements.
Thus, easement is continuous if its use is, or may be, incessant without the intervention
of any act of man, like the easement of drainage; and it is discontinuous if it is used at
intervals and depends on the act of man, like the easement of right of way.
The easement of right of way is considered discontinuous because it is exercised

only if a person passes or sets foot on somebody elses land. Like a road for the
passage of vehicles or persons, an easement of right of way of railroad tracks is
discontinuous because the right is exercised only if and when a train operated by a
person passes over another's property. In other words, the very exercise of the
servitude depends upon the act or intervention of man which is the very essence of
discontinuous easements.
The presence of more or less permanent railroad tracks does not, in any way,
convert the nature of an easement of right of way to one that is continuous. It is not
the presence of apparent signs or physical indications showing the existence of an
easement, but rather the manner of exercise thereof, that categorizes such easement
into continuous or discontinuous.The presence of physical or visual signs only classifies
an easement into apparent or non-apparent. Thus, a road (which reveals a right of way)
and a window (which evidences a right to light and view) are apparent easements, while
an easement of not building beyond a certain height is non-apparent.
In Cuba, it has been held that the existence of a permanent railway does not make
the right of way a continuous one; it is only apparent. Therefore, it cannot be acquired
by prescription. In Louisiana, it has also been held that a right of passage over another's
land cannot be claimed by prescription because this easement is discontinuous and can
be established only by title.
In this case, the presence of railroad tracks for the passage of petitioners trains
denotes the existence of an apparent but discontinuous easement of right of way.
And under Article 622 of the Civil Code, discontinuous easements, whether apparent or
not, may be acquired only by title. Unfortunately, petitioner Bomedco never acquired
any title over the use of the railroad right of way whether by law, donation,
testamentary succession or contract. Its use of the right of way, however long, never
resulted in its acquisition of the easement because, under Article 622, the discontinuous
easement of a railroad right of way can only be acquired by title and not by prescription.
[54]
Applying Bogo-Medellin to the case at bar, the conclusion is inevitable that the

road in dispute is a discontinuous easement notwithstanding that the same may
be apparent. To reiterate, easements are either continuous or discontinuous
according to the manner they are exercised, not according to the presence of
apparent signs or physical indications of the existence of such easements. Hence,
even if the road in dispute has been improved and maintained over a number of
years, it will not change its discontinuous nature but simply make the same
apparent. To stress, Article 622 of the New Civil Code states that discontinuous
easements, whether apparent or not, may be acquired only by virtue of a title.
On Laches and Estoppel

Petitioner argues that estoppel and laches bar respondents from exercising
ownership rights over the properties traversed by the road in dispute. In support
of said argument, petitioner posits that BISUDECO had been peacefully and
continuously using the road without any complaint or opposition on the part of
the respondents for almost twenty years. Respondents, on the other hand, claim
that they merely tolerated the use of their land as BISUDECO was a government-
owned and controlled corporation and considering that the disputed road was
constructed during the time of Martial Law.
There is no absolute rule on what constitutes laches. It is a rule of equity

and applied not to penalize neglect or sleeping on ones rights, but rather to avoid
recognizing a right when to do so would result in a clearly unfair situation. The
question of laches is addressed to the sound discretion of the court and each case
must be decided according to its particular circumstances.[55] It is the better rule
that courts, under the principle of equity, should not be guided or bound strictly
by the statute of limitations or the doctrine of laches if wrong or injustice will
result.[56]
In herein petition, the CA denied petitioners argument in the wise:

As previously explained in our Decision, the applicable law is Article 622 of the
Civil Code of the Philippines, which provides:
Art. 622. Continuous non-apparent easements, and

discontinuous ones, whether apparent or not, may be acquired only by
virtue of a title.
The eminent jurist, former Senator Arturo M. Tolentino, opines that this provision seeks
to prevent the imposition of a burden on a tenement based purely on the generosity,
tolerance and spirit of neighborliness of the owners thereof.

We applied the cited provision to the case in ruling that no easement of right of
way was acquired; based on the evidence presented, the plaintiff-appellant failed to
satisfactorily prove the existence of an agreement evidencing any right or title to use
the disputed road. We additionally rejected the plaintiff-appellants position that it had
acquired the easement of right of way through acquisitive prescription, as settled
jurisprudence states that an easement of right of way cannot be acquired by
prescription.
We hold the same view on the issue of acquisition of an easement of right of

way by laches. To our mind, settled jurisprudence on the application of the principle of
estoppel by laches militates against the acquisition of an easement of right of way by
laches.
Laches is a doctrine in equity and our courts are basically courts of law and not
courts of equity; equity, which has been aptly described as justice outside legality,
should be applied only in the absence of, and never against, statutory law; Aeguetas
nunguam contravenit legis. Based on this principle, we find that the positive mandate of
Article 622 of the Civil Code the statutory provision requiring title as basis for the
acquisition of an easement of a right of way precludes the application of the equitable
principle of laches.[57]
This Court agrees with the CA. The fact that the law is categorical that
discontinuous easements cannot be acquired by prescription militates against
petitioners claim of laches. To stress, discontinuous easements can only be
acquired by title. More importantly, whether or not the elements of laches are
present is a question involving a factual determination by the trial court.[58] Hence,
the same being a question of fact, it cannot be the proper subject of herein
petition. On the other hand, as to the issue of estoppel, this Court likewise agrees
with the finding of the CA that petitioner did not present any evidence that would
show an admission, representation or conduct by respondents that will give rise
to estoppel.[59]

Classification of the Road in Dispute as a Barangay Road
Petitioner argues that the CA erred when it disregarded the classification of the
road in question as a barangay road. In support of said argument, petitioner
presented Exhibit Q, a Tax Declaration or Field Appraisal and Assessment
Sheet[60] (1991 FAAS) with Survey Number 1688-40 and PIN No. 026-01-009-08-
037, dated April 30, 1991, which they claim proves that the road in dispute is
already a barangay road.
The same is again a question of fact which cannot be the proper subject of herein
petition. Petitioner cannot have this Court re-examine the evidentiary value of the
documents it presented before the RTC as the same is not a function of this Court.
In any case, after a closer scrutiny of the 1991 FAAS, this Court holds that the
same is insufficient to prove petitioners claim.
Respondents, in their Comment,[61] argue against the classification of the road in

dispute as a barangay road in the wise:

Petitioner also stated that the Honorable Court of Appeals fails to consider the fact that
the owner of the road in question is the Municipality of Pili in the Province of
Camarines Sur and as proof of such claim they presented and marked as Exhibit Q, tax
declaration no. 009-756 or Annex D of their Petition. However, private respondents
wish to call the attention of this Honorable Court to the following:
a. Tax Declaration No. 009-828 attached as Annex C-6 of the Verified Petition declared in
the name of Edmundo Obias (one of the private respondents);
b. Actual Use portion of said Annex C-6 marked as Exh. No. N-6-a-1 which states Road
Lot (BISUDECO Road); and
c. The Memoranda portion in the second page of Annex C-6 which states: Revised to
declare the property in The name of the rightful owner, Edmundo Obias based from
the approved subdivision plan, Bsd-05-000055 (OLT) & technical descriptions. Likewise
area was made to conform with the said subdivision plan from 4,773 sq.m. to 11,209
sq.m.
Obviously, the alleged Exhibit Q of the Petitioner is an erroneous tax

declaration, thus, negates the claim of the Petitioner that the same is owned by the
Municipality of Pili and has been declared a barangay road. Private respondents cannot
understand why the herein Petitioner alleged this matter and used it as a proof to
support their claim when they are already in possession of a tax declaration correcting
the same and even attached the same as part of their Petition.[62]
In its Reply,[63] petitioner counters:

II. While Petitioners claim that the road belongs to the Municipal Government of Pili, yet
what they attached to the Petition as Annex C-7 is a tax declaration of Edmundo Obias.
Petitioners have the following observations:
xxxx
(b) That land of Edmundo Obias covered by Annex C-6 to the Petition is not included or
involved in this case at bar. His name does not appear to be awarded in the Decision of
the Honorable Court of Appeals and also in the list of beneficiaries to receive monetary
considerations made by Mr. Angel Lobo.[64]
After a painstaking review of the records, this Court is more inclined to believe
the claim of respondents. The claim of petitioner to the effect that the land of
Edmundo Obias is not included in the case at bar is misleading. It may be true that
Edmundo was not awarded indemnity by the lower courts, however, the same
does not mean that his lands do not form part of the subject matter of herein
petition.
It bears to stress that Edmundo claimed in the CA that he was the owner of the
affected ricelands and that respondents were merely his tenants-beneficiaries
under PD 27, otherwise known as the Tenant Emancipation Decree.[65] The CA,
however, dismissed said claim because it was raised for the first time on appeal. It
also held that the averments in the documents submitted by Edmundo in the RTC
described respondents as "owners" of the land they till; hence, the same
constituted binding judicial admissions.[66]
Based on the foregoing, petitioner's attempt to refute the contents of the 1995
FAAS by claiming that the lands of Edmundo are not involved in the case at bar
must fail. It is clear that respondents are the tenant-beneficiaries of the lands of
Edmundo under PD 27; hence, contrary to the claim of petitioner, the lands of
Edmundo are the subject matter of herein petition.
In addition, it is curious that petitioner relies on the 1991 FAAS yet finds
exception to the contents of the 1995 FAAS. After a closer scrutiny of both
documents, it appears to this Court that the land described in the 1991 FAAS is
also the same land described in the 1995 FAAS. Both FAAS involve land measuring
4,773 square meters. Likewise, both FAAS have the same PIN Number (026-01-
009-08-037) and Survey Number (1688-40). Accordingly, the annotation
contained in the 1995 FAAS, to the effect that a BISUDECO road does not belong
to the Municipality of Pili, serves to weaken petitioners claim.
The Court also considers portions of the RTC Decision where it can be gathered
that the road in dispute is not a barangay road, to wit:

At this point, it is important to note that defendants admitted the identity of the
road and the area of the same as reflected in the Commissioners Report, during the Pre-
trial held last September 19, 1995.

Engr. Roberto Revilla testified that a portion of the road inside the property of
Edmundo Obias, is a barangay road which are lots A-52 sq.m., B-789 sq.m. and C-655
sq.m. or a total of 1,497 sq.m. which starts from the intersection of the National Road
and the road to Pensumil up to Corner 9 of Lot 37, Bsc-05-000055 (OCT) in the name of
Pedro O. Montero. Engr. Revilla concluded that the actual area occupied by the road in
question is the sum of areas of Lots D-2042 sq.m., E-2230 sq.m., F-756 sq.m., G-663
sq.m., H-501 sq.m. , I-588 sq.m., J-594 sq.m., K-l092 sq.m., L-595 sq.m., M-459 sq.m.,
N-106 sq.m., O-585 sq.m. and P-563 sq.m., or a total of 10,774 square meters. Said
road starts from corner 9 of the lot of Pedro Montero which is equivalent to corner 25
of Lot 40 Bsd-05-000055 (OCT) going to the Southern Direction and ending at corner 25
of Lot 1688 Cad. 291 Pili Cadastre covered by OCT No. 120-217 (1276) in the name of
spouses Edmundo Obias and Nelly Valencia and spouses Perfecto Obias and Adelaida
Abenojar.[67]
The RTC findings of fact thus shows that while certain portions of the property of
Edmundo is a barangay road, the same only pertains to Lots A, B and C, or a total
of 1,497 square meters, which is distinct from the road in dispute which pertains
to different lots (lots E to P) and covers a total area of 10,774 square meters.
In light of the foregoing, considering that the contents of the 1991 FAAS is
disputable, it was incumbent on petitioner to present documents which would
evidence the expropriation of the road in dispute by the local government as
a barangay road. Under the prevailing circumstances, the documents of the
expropriation proceedings would have been the best evidence available and the
absence thereof is certainly damaging to petitioners cause.
Amount of Indemnity Due & On Unjust Enrichment
Petitioner manifested in the RTC its desire, in the alternative, to avail of a

compulsory easement of right of way as provided for under Article 649 the New
Civil Code. Said relief was granted by the RTC because of the unavailability of
another adequate outlet from the sugar mill to the highway. Despite the grant of
a compulsory easement of right of way, petitioner, however, assails both the RTC
and CA Decision with regard to the amount of indemnity due respondents.
Petitioner likens the proceedings at bar to an expropriation proceeding where

just compensation must be based on the value of the land at the time of taking.
[68]
Petitioner thus maintains that the compensation due to respondents should
have been computed in 1974 when the road was constructed.[69]
This Court does not agree. Article 649 of the New Civil Code states:

The owner, or any person who by virtue of a real right may cultivate or use any
immovable, which is surrounded by other immovables pertaining to other persons and
without adequate outlet to a public highway, is entitled to demand a right of way
through the neighboring estates, after payment of the proper indemnity.
Should this easement be established in such a manner that its use may be continuous
for all the needs of the dominant estate, establishing a permanent passage, the
indemnity shall consist of the value of the land occupied and the amount of the
damage cause to the servient estate.
Based on the foregoing, it is clear that the law does not provide for a specific
formula for the valuation of the land. Neither does the same state that the value
of the land must be computed at the time of taking. The only primordial
consideration is that the same should consist of the value of the land and the
amount of damage caused to the servient estate.Hence, the same is a question of
fact which should be left to the sound discretion of the RTC. In this regard, the
RTC ruled:

The market value per hectare in 1974 or at the time of taking or prior to its conversion
to road is P6,500/hectare, the same being a first class riceland irrigated therefore the
total market value is P6,864.31. The 1994 Market Value of P1,292,880.00 is the value
assigned to the property in question after it was already developed as a road lot where
the unit value applied per square meter is P120.00 for 5th class residential lot.
It has to be remembered however that the cost of transforming the land to road was
entirely borne by BISUDECO including its maintenance, repair and the cost of the
improvements and by plaintiff after its acquisition. Thus, the P120.00 unit value is
exorbitant while the 1974 valuation of P6,500/hectare is low and unreasonable.
In fine, this Court will adopt the unit value of P70.00 per square meter as shown by
Exhibit Q, the Real Property Field Assessment Sheet No. 009-756.[70]
In addition, the CA ruled:

We stress that the amount of proper indemnity due to the landowners does not only
relate to the market value of their property but comprehends as well the corresponding
damage caused to the servient estate. It is undisputed that the BISUDECO began the
construction and used of the disputed road in 1974. While the maintenance was borne
by BISUDECO and now by BAPCI who principally used the disputed road for their sugar
milling operations, the defendants-appellants have been deprived of the use do their
ricefields because of the roads construction since 1974. Thus, it is but proper to
compensate them for this deprivation, over and above the prevailing market value of
the affected property. To our mind, in light of the circumstances surrounding the
acquisition of the affected ricelands and the construction of the disputed road,
particularly the absence of a definitive agreement to show that the defendants-
appellants consented to the roads construction, we find the P70.00 per square meter
indemnity awarded by the lower court in accordance with the Real Property Field
Assessment Sheet No. 009-756, to be fair and reasonable under the circumstances.[71]
Withal, this Court finds no error as to the proper amount of indemnity due
respondents as the findings of both the RTC and the CA appear to be fair and
reasonable under the prevailing circumstances and in accordance with the
provisions of Article 649 of the New Civil Code.
WHEREFORE, premises considered, the petition is DENIED. The August 24,

2005 Decision and October 27, 2005 Resolution of the Court of Appeals in CA-G.R.
CV No. 59016 are hereby AFFIRMED.
SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
Chairperson

CONCHITA CARPIO MORALES PRESBITERO J. VELASCO, JR.
Associate Justice
CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, I certify that the
conclusions in the above Decision were reached in consultation before the case
was assigned to the writer of the opinion of the Courts Division.
ANTONIO T. CARPIO
Acting Chief Justice
*
Designated as an additional member in lieu of Associate Justice Minita V. Chico-Nazario per Special Order No.
720 dated October 5, 2009.
[1]
Rollo, pp. 8-37.
[2]
Penned by Associate Justice Arturo D. Brion (now a member of this Court), with Associate Justices Eugenio S.
Labitoria and Eliezer R. de Los Santos concurring; id. at 38-60.
[3]
Rollo pp. 62-68.
[4]
Id. at 39-40.
[5]
Records, p. 1.
[6]
Rollo, p. 40.
[7]
Rollo, pp. 40-41.
[8]
Records, p. 16.
[9]
Rollo, p. 41.
[10]
Records, p. 30.
[11]
Rollo, pp. 41-42.
[12]
Records, p. 39; Note that it does not appear that said intervenors join petitioner in herein petition.
[13]
Id at 19.
[14]
Id at 67.
[15]
The owner, or any person who by virtue of a real right may cultivate or use any immovable, which is surrounded
by other immovables pertaining to other persons and without adequate outlet to a public highway, is entitled to
demand a right of way through the neighboring estates, after payment of the proper indemnity.
Should this easement be established in such a manner that its use may be continuous for all the needs of the
dominant estate, establishing a permanent passage, the indemnity shall consist of the value of the land occupied
and the amount of the damage cause to the servient estate.
[16]
Rollo, p. 42.
[17]
Records, p. 73.
[18]
Rollo, p. 43.
[19]
Records, p. 145.
[20]
Peafrancia Multi-Purpose Sugar Coop.; San Isidro Development Coop. Inc.; Ocampo Small Multi-Purpose
Producers Coop. Inc.; Kilantao-Catalotoan Multi-Purpose Coop. Inc.; May-ogob Planters Coop. Inc.; Aniog Planters
Multi-Purpose Coop. Inc., Sagnay Sugar Planters Coop. Inc.; Hda. Magdalena Farmers Coop.; and Bicol Sugar
Planters Coop. Inc. Note that it does not appear that said intervenors join petitioner in herein petition.
[21]
Records, p. 198.
[22]
CA rollo, p. 94-102.
[23]
Id. at 102.
[24]
Id. at 96.
[25]
Id. at 98.
[26]
Id. at 99-100.
[27]
Rollo, p. 44.
[28]
Id.
[29]
Id. at 59-60.
[30]
Id. at 50.
[31]
Id. at 51-52.
[32]
Id. at 59.
[33]
Id. at 55-56.
[34]
Id. at 15-16.
[35]
1. Petition for Review This is a petition for Review on Certiorari under Rule 65 of the New Rules on Civil
Procedure assailing the Decision and Resolution rendered by the Honorable Public Respondent Court of Appeals,
xxx, with grave abuse of discretion amounting to lack of or excess of jurisdiction and there is no appeal, or any
plain, speedy, and adequate remedy in the ordinary course of law, hence, this Petition. (Rollo, p. 10).
[36]
See National Irrigation Administration v. Court of Appeals, G.R. No. 129169, November 17, 1999, 318 SCRA
255.
[37]
G.R. No. 157186, October 19, 2007, 537 SCRA 116.
[38]
Id. at 126-127.
[39]
See National Irrigation Administration v. Court of Appeals, supra note 36, at 264.
[40]
Rollo, pp. 51-52.
[41]
Id at 18.
[42]
Id.
[43]
Id.
[44]
Id.
[45]
Id. at 19.
[46]
Insular Life Assurance Company, Ltd. v. Court of Appeals, G.R. No. 126850, April 28, 2004, 428 SCRA 79.
[47]
CA rollo, 96- 98. (Emphasis ours.)
[48]
Rollo, pp. 50-51. (Emphasis ours.)
[49]
Blanco v. Quasha, 376, Phil. 480, 491 (1999), citing Bridget Boneng y Bagawili v. People of the Philippines, 304
SCRA 252. (1999).
[50]
G.R No. 80511, January 25, 1991, 193 SCRA 333.
[51]
Id. at 339.
[52]
See rollo, pp. 24-25. Petitioner contends:
There are some who believe, however, that the right of way can be acquired by prescription (8 Vera 297). The
continuity in the exercise of a right does not have to be absolute. If the right is one that is to be exercised at intervals,
there is continuity notwithstanding such intervals. The use of the easement may be continuous. In prescription, it is
not the acts of possession which are required to be continuous. It is enough that the acts be exercised with some
degree of regularity to indicate continuity of possession of the easement. The continuity of a discontinuous
easement, therefore, may be very well be continuous (2-11 Colin & Capitant 913; Roggeiro 839-840).
We are inclined to agree with the view just expressed. We must admit that as a general principle, the right of way
being discontinuous, it cannot be acquired by prescription, the owner of the tenement would be obliged to disregard
the considerations imposed by neighborhoodliness; he would have to prevent passage over his tenement because he
may wake up some day to find that the easement has already been established. But if the right is permanent and has
an apparent sign, such as a road, we see no reason why it cannot be acquired by prescription. If the land itself
occupied by the road can be acquired in ownership, why cant a servitude, which is less than ownership, be acquired?
If in order to establish the right to the road, the adverse claimant asserts ownership thereof and not merely the
easement of passage, the result would be serious and prejudicial to the owner, in protecting a less right, a greater one
would be lost. If there is permanent road, the easement, or at least its possession, should be regarded as continuous,
because the existence of the road is a continuous assertion of a right against the exclusive domination of the owner,
which right of way under the circumstances should, therefore, be acquired by prescription, so long as the exercise
thereof is not by tolerance of the owner of the tenement over which the road has been built. (Tolentino, Civil Code of
the Philippines, Vol. II, p. 331, 1963).
[53]
455 Phil. 285 (2003).
[54]
Id. at 303-305. (Emphasis and underscoring ours.)
[55]
Villanueva-Mijares v. Court of Appeals, 386 Phil. 555, 565 (2000).
[56]
Bogo-Medellin, supra note 53, at 303.
[57]
Rollo, pp. 65-66.
[58]
Pineda v. Heirs of Eliseo Guevara, G.R No. 143188, February 14, 2007, 515 SCRA 627.
[59]
Rollo p. 68.
[60]
Id. at 77.
[61]
Id. at 81-86.
[62]
Id. at 83-84.
[63]
Id. at 97-100.
[64]
Id. at 99.
[65]
Id. at 45.
[66]
Id. at 54-55.
[67]
CA rollo, p. 100.
[68]
Rollo, p. 33.
[69]
Id.
[70]
CA rollo, pp. 100-101.
[71]
Rollo, p. 57.
SECOND DIVISION

SPS. MANUEL AND VICTORIA G.R. No. 185240
SALIMBANGON,
Petitioners, Present:
Carpio, J., Chairperson,
- versus - Brion,
Del Castillo,
Abad, and
Perez, JJ.
SPS. SANTOS AND ERLINDA TAN,
Respondents. Promulgated:
January 20, 2010
x --------------------------------------------------------------------------------------- x

DECISION

ABAD, J.:

This case is about the admissibility of testimony that tends to modify a

written agreement among the parties and the extinction of the easement of right
of way upon consolidation in one person of the ownership of the dominant and
the servient estates.
The Facts and the Case
Guillermo Ceniza died intestate on July 11, 1951, leaving a parcel of land at
Poblacion, Mandaue City. Twenty years later on July 17, 1973 his children
Benedicta, Guillermo, Jr., Victoria, Eduardo, and Carlos executed an extrajudicial
declaration of heirs and partition, adjudicating and dividing the land among
themselves as follows:

1. To Benedicta T. Cabahug, Lot A subject to a perpetual and grat[u]itous road
right of way 1.50 m. wide along its NW. boundary in favor of Lots B, E, and D, of the
subdivision;
2. To Eduardo Ceniza, Lot B subject to a perpetual and grat[u]itous road right
of way 1.50 m. wide along its SW. boundary in favor of Lots A, D & E of the
subdivision;
3. To Carlos Ceniza, Lot C;
4. To Guillermo Ceniza Jr., Lot D subject to a perpetual and grat[u]itous road
right of way 1.50 m. wide along its NE. boundary in favor of Lot B and E of the
subdivision; and
5. To Victoria Ceniza, Lot E, subject to a perpetual and grat[u]itous road right
of way 1.50 m. wide along its SW. boundary in favor of Lot D of the subdivision. [1]

Lots A, B, and C were adjacent to a city street. But Lots D and E were not,
they being interior lots. To give these interior lots access to the street, the heirs
established in their extrajudicial partition an easement of right of way consisting
of a 3-meter wide alley between Lots D and E that continued on between Lots A
and B and on to the street. The partition that embodied this easement of right of
way was annotated on the individual titles issued to the heirs.
Roughly, the lots including the easement of right of way would take the
following configurations,[2] not drawn here to accurate size and proportion but
illustrative of their relative locations:
But, realizing that the partition resulted in an unequal division of the

property, the heirs modified their agreement by eliminating the easement of right
of way along Lots A, D, and E, and in its place, imposed a 3-meter wide alley, an
easement of right of way, that ran exclusively along the southwest boundary of
Lot B from Lots D and E to the street.[3] Thus:

Victoria (now petitioner Victoria Salimbangon) later swapped lots with

Benedicta with the result that Victoria became the owner of Lot A, one of the
three lots adjacent to the city street. Victoria and her husband (the Salimbangons)
constructed a residential house on this lot and built two garages on it. One garage
abutted the street while the other, located in the interior of Lot A, used the alley
or easement of right of way existing on Lot B to get to the street. Victoria had this
alley cemented and gated.
Subsequently, however, respondent spouses Santos and Erlinda Tan (the

Tans) bought Lots B, C, D, and E from all their owners. The Tans built
improvements on Lot B that spilled into the easement area. They also closed the
gate that the Salimbangons built. Unable to use the old right of way, the
Salimbangons lodged a complaint with the City Engineer of Mandaue against the
Tans. For their part, the Tans filed an action with the Regional Trial Court (RTC) of
Mandaue against the Salimbangons in Civil Case MAN-3223 for the
extinguishment of the easement on Lot B and damages with application for
preliminary injunction.[4] The Salimbangons filed their answer with counterclaims.
After hearing or on February 9, 2001 the RTC rendered judgment,

upholding the Salimbangons easement of right of way over the alley on Lot B, the
lot that belonged to the Tans. The court pointed out that the easement in this
case was established by agreement of the parties for the benefit of Lots A, D, and
E. Consequently, only by mutual agreement of the parties could such easement
be extinguished. The RTC declined, however, to award damages to the
Salimbangons.
Both parties appealed to the Court of Appeals (CA) in CA-G.R. CV

73468. On July 27, 2007 the CA[5] reversed the RTC decision, extinguished the
easement of right of way established on the alley in Lot B of the Tans, and denied
the Salimbangons claim for damages. The court ruled that based on the testimony
of one of the previous owners, Eduardo Ceniza, the true intent of the parties was
to establish that easement of right of way for the benefit of the interior lots,
namely, Lots D and E. Consequently, when ownership of Lots B, D, and E was
consolidated into the Tans, the easement ceased to have any purpose and
became extinct. The Salimbangons filed a motion for reconsideration but the CA
denied the same in its resolution of October 14, 2008. This prompted them to file
the present petition.
Questions Presented
Two questions are presented:

1. Whether or not the CA erred in admitting in evidence contrary to the
parol evidence rule Eduardo Cenizas testimony respecting the true intent of the
heirs in establishing the easement of right of way as against what they stated in
their written agreement; and
2. Whether or not the CA erred in ruling that the easement of right of way
established by the partition agreement among the heirs for the benefit of Lot A
has been extinguished.
The Courts Ruling
One. The Salimbangons point out that the CA ought to have rejected

Eduardo Cenizas testimony that the heirs had intended to establish the easement
of right of way solely for the benefit of the interior Lots D and E which had no
access to the city street. The partition agreement also made Lot A, now owned by
the Salimbangons, a beneficiary of that easement. Thus:

2. To Eduardo Ceniza [now the Tans], Lot B subject to a perpetual and
grat[u]itous road right of way 1.50 m. wide along its SW. boundary in favor of Lots A,
D & E of the subdivision;[6] (Underscoring supplied)
The parol evidence rule, said the Salimbangons, precluded the parties from
introducing testimony that tended to alter or modify what the parties had agreed
on above.
But the exclusionary provision of the parol evidence rule admits of

exceptions. Section 9, Rule 130 of the Revised Rules on Evidence states:

Sec. 9. Evidence of written agreements. - When the terms of an agreement
have been reduced to writing, it is considered as containing all the terms agreed upon
and there can be, between the parties and their successors in interest, no evidence of
such terms other than the contents of the written agreement. However, a party may
present evidence to modify, explain or add to the terms of the written agreement if he
puts in issue in his pleading:
(a) An intrinsic ambiguity, mistake or imperfection in the written agreement;
(b) The failure of the written agreement to express the true intent and
agreement of the parties thereto;
(c) The validity of the written agreement; or
(d) The existence of other terms agreed to by the parties or their successors in

interest after the execution of the written agreement.
The term agreement includes wills. (7a)
Here, the Tans had put in issue the true intent and agreement of the parties
to the partition when they alleged in their complaint that, contrary to what
paragraph 2 quoted above seems to imply, the easement was actually for the
benefit of Lots D and E only. The complaint thus said:

So that in the same partition instrument, the said heirs voluntarily agreed to
establish the so-called perpetual and gratuitous easement of road right of way along
LOT A, with 1.50 meters wide and along LOT B, with the same 1.50 meters wide.
Understandably, this servitude voluntarily constituted on LOTS A and B was

had for the benefit and use by the owners of LOTS D (Guillermo Ceniza, Jr.) and
E (defendant Victoria Ceniza Salimbagon).[7] (Underscoring supplied)

Consequently, with the above averment, the Tans were entitled to
introduce evidence to establish the true intent and agreement of the parties
although this may depart from what the partition agreement literally provided.
At any rate, as the CA said, the Salimbangons did not object at the hearing
to admission of Eduardo Cenizas testimony even when this seemed at variance, as
far as they were concerned, with the partition agreement among the
heirs. Consequently, the Salimbangons may also be deemed to have waived their
right to now question such testimony on appeal.
Two. The Salimbangons point out that the partition agreement among the
heirs established in their favor, as owners of Lot A, an easement of right of way on
Lot B from the interior of their lot to the city street. Since theirs was an easement
established by agreement of the parties, only by mutual agreement could the
same be extinguished.
But, firstly, as Eduardo Ceniza testified, the true agreement of the heirs was
for the establishment of an easement of right of way for the benefit solely of the
lots that did not have direct access to the street, namely Lots D and E. His
testimony made sense.
As originally constituted in that agreement, each of Lots A and B was to

contribute a strip of 1.5 meters between them that when combined formed a 3-
meter wide alley leading from Lots D and E to the street. To the extent that Lots A
and B retained the right to use the 1.5-meter portion that they contributed to the
establishment of the easement, the agreement gave their owners the right to use
the common alley as well. As Eduardo testified, however, the true intent of the
heirs was to give Lots D and E access to the street. Lots A and B did not need this
alley since they were facing the street.
Consequently, when the owner of Lots D and E also became the owner of
Lot B, the easement of right of way on Lot B became extinct by operation of law.
[8]
The existence of a dominant estate and a servient estate is incompatible with
the idea that both estates belong to the same person.
Secondly, there is no question that when the heirs realized that it was not
fair to take strips of 1.5 meters from each of Lots A, D, and E for the easement of
right of way when these lots were already small, the heirs executed a Cancellation
of Annotation of Right of Way, etc. that cancelled the easement of right of way
they earlier established on Lots A, D, and E and in its place imposed a 3-meter
wide easement of right of way solely on Lot B.
Although the cancellation document did not say so, it was implicit that the
changed location of the easement cancelled not only the 1.5-meter strip of
easement imposed on Lot A of the Salimbangons but also their right to use the
new 3-meter easement alley that lay entirely on Lot B. Strictly speaking, if the
Salimbangons insist that their right as dominant estate under the original
partition agreement remains, then that would be partly on a 1.5-meter strip of
their own Lot A and partly on the equivalent 1.5-meter strip on the side of Lot B,
not on the new 3-meter alley established entirely on Lot B.
The point is that, obviously, in establishing the new easement of right of

way, the heirs intended to abandon the old one. Since this 3-meter alley on Lot B
directly connected Lots D and E to the street, it is also obvious that only the latter
lots were its intended beneficiary. And, with the ownership of Lots B, D, and E
now consolidated in a common owner, namely, the Tans, then the easement of
right of way on Lot B may be said to have been extinguished by operation of law.
[9]
ACCORDINGLY, this Court DENIES the petition and AFFIRMS in all respects

the decision dated July 27, 2007 and resolution dated October 14, 2008 of the
Court of Appeals in CA-G.R. CV 73468.
SO ORDERED.

ROBERTO A. ABAD
Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice

ARTURO D. BRION MARIANO C. DEL CASTILLO
JOSE P. PEREZ
Associate Justice

ATTESTATION

Courts Division.
ANTONIO T. CARPIO
Associate Justice

CERTIFICATION

REYNATO S. PUNO
Chief Justice

[1]
Annex C of Petition, rollo, pp. 54-55.
[2]
Based on sketch appearing on Annex C of Petition, id. at 55.
[3]
Based on sketch appearing on Annex D of Petition, id. at 58.
[4]
Raffled to Branch 55 and docketed as Civil Case MAN-3223.
[5]
Raffled to the 19th division and docketed as CA-G.R. CV 73468.
[6]
See Extrajudicial Declaration of Heirs and Partition dated July 17, 1973, rollo, pp. 54-55.
[7]
Annex I, Petition, id. at 65, 67.
[8]
CIVIL CODE OF THE PHILIPPINES, Article 631 (1).
[9]
Id.

SECOND DIVISION

SPOUSES VICTOR VALDEZ AND G.R. No. 175510
JOCELYN VALDEZ, represented
by their Attorney-In-Fact, Present:
VIRGILIO VALDEZ,
Petitioners, QUISUMBING, J., Chairperson,
CARPIO MORALES,
TINGA,
- versus - VELASCO, JR., and
BRION, JJ.
SPOUSES FRANCISCO
TABISULA AND CARIDAD Promulgated:
TABISULA, July 28, 2008
Respondents.
x--------------------------------------------------x

DECISION

CARPIO MORALES, J.:

Petitioner-spouses Victor and Jocelyn Valdez purchased via a January 11,
1993 Deed of Absolute Sale[1] (the deed) from respondent-spouses
Francisco Tabisula and Caridad Tabisula a 200 square meter (sq.m.) portion (the
subject property) of a 380 sq. m. parcel of land located in San Fernando, La Union,
which 380 sq.m. parcel of land is more particularly described in the deed as
follows:

A parcel of land classified as residential lot, bounded on the North by Lot
No. 25569, on the East, by Lot No. 247, 251, on the South, by a Creek and on
the West, by Lot No. 223-A, declared under Tax Decl. No. 52820, with an
area of 380 square meters, more or less, and assessed at P 17100.00 for the current
year. It is not registered under Act 496 nor under the Spanish Mortgage
Law. (Emphasis and underscoring supplied)
The pertinent portions of the deed read:

x x x x

That for and in consideration of the sum of SEVENTY THOUSAND
(P70,000.00) PESOS, Philippine Currencyp [sic] paid to us at our entire
satisfaction by spouses VICTOR and JOECELYN [sic] VALDEZ, both of legal
age, Filipinos and residents of 148 P. Burgos St., San Fernando, La Union, receipt
of which is hereby acknowledged, do hereby SELL, CONVEY and TRANSFER
by way of absolute sale unto the said spouses Victor and Joecelyn Valdez, their
heirs and assigns, the TWO HUNDRED (200) SQUARE METERS,
EASTERN PORTION of the parcel of land above-described, free from all liens
and encumbrances.

x x x x

That now and hereinafter, said VENDEE-SPOUSES VICTOR and
JOECELYN [sic] VALDEZ shall be the absolute owners of the said 200 sq.
meters, eastern portion and that we shall warrant and forever defend their
ownership of the same against the claims of all persons whomsoever; they shall
be provided a 2 1/2 meters [sic] wide road right-of-way on the western side of
their lot but which is not included in this sale.

x x x.x (Emphasis and underscoring supplied)

Respondents subsequently built a concrete wall on the western side of the
subject property.[2] Believing that that side is the intended road right of way
mentioned in the deed, petitioners, through their representative, reported the matter
to the barangay for mediation and conciliation. Respondents failed to attend the
conferences scheduled by the barangay, however, drawing petitioners to file in
April 1999 or more than six years after the execution of the deed a Complaint for
Specific Performance with Damages[3] against respondents before the Regional
Trial Court (RTC) of San Fernando City, La Union.

In their complaint, petitioners alleged that they purchased the subject
property on the strength of respondents assurance of providing them a road right of
way. They thus prayed that respondents be ordered to provide the subject property
with a 2-meter wide easement and to remove the concrete wall blocking the same.
[4]

Respondents, in their Answer with Compulsory Counterclaim (for damages and
attorneys fees),[5] averred that the 2 -meter easement should be taken from the
western portion of the subject property and not from theirs; [6] and petitioners and
their family are also the owners of two properties adjoining the subject property,
which adjoining properties have access to two public roads or highways the bigger
one which adjoins P. Burgos St. on the north, and the smaller one which abuts an
existing barangay road on the north.[7]

Respondents further averred that they could not have agreed to providing
petitioners an easement on the western side of their lot as there exists a two-storey
concrete house on their lot where the supposed easement is to be located, which
was erected long before the subject property was sold to petitioners.[8] In support of
this claim, respondents submitted a February 20, 2003 letter from the City
Engineers Office.[9]

Branch 26 of the RTC of San Fernando dismissed petitioners complaint and
granted respondents Counterclaim by Decision[10] of March 18, 2005,
the dispositive portion of which reads:

WHEREFORE, and in view of all the foregoing, judgment is hereby
rendered finding the defendants as against the plaintiffs and hereby orders
the Complaint dismissed for being unmeritorious and plaintiffs are hereby ordered
to pay the defendants, the following:

1) P100,000.00 as moral damages;

2) P50,000.00 as exemplary damages;

3) P50,000.00 as attorneys fees;

4) P30,000.00 as expenses of litigation; and

5) To pay the costs.

SO ORDERED.[11] (Underscoring supplied)

On appeal by petitioners, the Court of Appeals, by Decision of May 29, 2006,
[12]
affirmed that of the trial court, it holding that the deed only conveyed ownership
of the subject property to petitioners, and that the reference therein to an easement
in favor of petitioners is not a definite grant-basis of a voluntary easement of right
of way.[13]

The appellate court went on to hold that petitioners are neither entitled to a
legal or compulsory easement of right of way as they failed to present
circumstances justifying their entitlement to it under Article 649 of the Civil Code.
[14]

Petitioners motion for reconsideration[15] having been denied by the Court of
Appeals by Resolution of November 15, 2006, they filed the present petition for
review on certiorari faulting the trial [sic] court

I. . . . IN RULING THAT THE RIGHT OF WAY IS NOT PART OF THE
ABSOLUTE DEED OF SALE DATED JANUARY 11, 1993;

II. . . . IN RULING THAT THE PROVISION OF THE ABSOLUTE
DEED OF SALE GRANTING A RIGHT OF WAY IS VAGUE AND
OBSCURE;

III. . . . IN AWARDING MORAL AND EXEMPLARY DAMAGES TO
THE RESPONDENTS.[16] (Underscoring supplied)

An easement or servitude is a real right constituted on anothers property, corporeal
and immovable, by virtue of which the owner of the same has to abstain from
doing or to allow somebody else to do something on his property for the benefit of
another thing or person.[17] The statutory basis of this right is Article 613 of the
Civil Code which reads:

Art. 613. An easement or servitude is an encumbrance imposed upon an
immovable for the benefit of another immovable belonging to a different owner.

The immovable in favor of which the easement is established is called the
dominant estate; that which is subject thereto, the servient estate.

There are two kinds of easements according to source by law or by the will
of the owners. So Article 619 of the Civil Code provides:

Art. 619. Easements are established either by law or by the will of the
owners. The former are called legal and the latter voluntary easements.

From the allegations in petitioners complaint, it is clear that what they seek to
enforce is an alleged grant in the deed by respondents of an easement reading: they
shall be provided a 2 meters wide road right-of-way on the western side of their lot
but which is not included in this sale.

Article 1358 of the Civil Code provides that any transaction involving the sale or
disposition of real property must be in writing.[18] The stipulation harped upon by
petitioners that they shall be provided a 2 meters wide road right-of-way on the
western side of their lot but which is not included in this sale is not a disposition of
real property. The proviso that the intended grant of right of way is not included in
this sale could only mean that the parties would have to enter into a separate and
distinct agreement for the purpose.[19]The use of the word shall, which is imperative
or mandatory in its ordinary signification, should be construed as merely
permissive where, as in the case at bar, no public benefit or private right requires it
to be given an imperative meaning.[20]

Besides, a document stipulating a voluntary easement must be recorded in the
Registry of Property in order not to prejudice third parties. So Articles 708 and 709
of the Civil Code call for, viz:

Art. 708. The Registry of Property has for its object the inscription or
annotation of acts and contracts relating to the ownership and other rights over
immovable property.

Art. 709. The titles of ownership, or of other rights over immovable
property, which are not duly inscribed or annotated in the Registry of Property
shall not prejudice third persons.

Petitioners are neither entitled to a legal or compulsory easement of right of
way. For to be entitled to such kind of easement, the preconditions under Articles
649 and 650 of the Civil Code must be established, viz:

Art. 649. The owner, or any person who by virtue of a real right may
cultivate or use any immovable, which is surrounded by
other immovables pertaining to other persons, and without adequate outlet to a
public highway, is entitled to demand a right of way through the neighboring
estates, after payment of the proper indemnity.

x x x x

This easement is not compulsory if the isolation of the immovable is due
to the proprietors own acts. (Underscoring supplied)

Art. 650. The easement of right of way shall be established at the point
least prejudicial to the servient estate, and, insofar as consistent with this rule,
where the distance from the dominant estate to a public highway may be the
shortest. (Underscoring supplied)

Thus, to be conferred a legal easement of right of way under Article 649, the
following requisites must be complied with: (1) the property is surrounded by
other immovables and has no adequate outlet to a public highway; (2) proper
indemnity must be paid; (3) the isolation is not the result of the owner of the
dominant estates own acts; (4) the right of way claimed is at the point least
prejudicial to the servient estate; and (5) to the extent consistent with the foregoing
rule, the distance from the dominant estate to a public highway may be the
shortest.[21] The onus of proving the existence of these prerequisites lies on the
owner of the dominant estate,[22] herein petitioners.

As found, however, by the trial court, which is supported by the Sketch[23] (Exhibit
B; Exhibit 1) of the location of the lots of the parties and those adjoining them,
a common evidence of the parties, petitioners and their family are also the owners
of two properties adjoining the subject property which have access to two public
roads or highways.[24]

Since petitioners then have more than adequate passage to two public roads, they
have no right to demand the grant by respondents of an easement on the western
side of [respondents] lot.

It may not be amiss to note at this juncture that at the time the deed was executed
in 1993, the barangay road-Exhibit 1-G, by which petitioners could access Burgos
Street-Exhibit 1-F, was not yet in existence; and that the Interior Street-Exhibit 1-
H, which petitioners via this case seek access to with a right of way, was still
a creek,[25] as reflected in the earlier-quoted particular description of respondents
parcel of land from which the subject property originally formed part.

Respecting the grant of damages in favor of respondents by the trial court which
was affirmed by the appellate court, the Court finds the same baseless.

To merit an award of moral damages, there must be proof of moral suffering,
mental anguish, fright and the like. It is not enough that one suffers sleepless
nights, mental anguish, serious anxiety as a result of the actuation of the other
party.[26] Invariably, such actuation must be shown by clear and convincing
evidence[27] to have been willfully done in bad faith or with ill-motive.

In respondents case, they predicated their Counterclaim for damages on general
allegations of sickness, humiliation and embarrassment, without establishing bad
faith, fraud or ill-motive on petitioners part.[28]

More importantly, respondents are precluded from filing any counterclaim in light
of Article 199 of Rule XXVI of the Rules and Regulations Implementing the Local
Government Code of 1991 reading:

x x x x

ARTICLE 199. Penalty for Refusal or Failure of Any Party or Witness to
Appear before the Lupon or Pangkat. Refusal or willful failure of any party or
witness to appear before the lupon or pangkat in compliance with summons issued
pursuant to this Rule may be punished by the city or municipal court as for
indirect contempt of court upon application filed therewith by the lupon chairman,
the pangkat chairman, or by any of the contending parties. Such refusal or willful
failure to appear shall be reflected in the records of the lupon secretary or in the
minutes of the pangkat secretary and shall bar the complainant who fails to
appear, from seeking judicial recourse for the same course of action, and the
respondent who refuses to appear, from filing any counterclaim arising out of,
or necessarily connected with the complaint.

x x x x (Emphasis and underscoring supplied)

While respondent Caridad Tabisula claimed that she always appeared, when
summoned, before the barangay lupon,[29] the following Certificate to File
Action[30] belies the claim.

x x x x

This is to certify that respondents failed to appear for (2)
Mediation Proceeding before our Punong Barangay thus the corresponding
complaint may now be filed in court.

Issued this 24th day of November 1998 at the Multi Purpose Hall, Barangay 1 City
of San Fernando (LU).

x x x x (Underscoring supplied)

The award for moral damages being thus baseless, that for exemplary damages
must too be baseless.

As for the award of attorney's fees and expenses of litigation, respondents
have not shown their entitlement thereto in accordance with Article 2208 of the
Civil Code.

WHEREFORE, the May 29, 2006 Decision and November 15, 2006 Resolution
of the Court of Appeals are MODIFIED in that the grant of the Counterclaim of
respondents, Spouses Francisco Tabisula and Caridad Tabisula, is reversed and set
aside. In all other respects, the challenged decision is AFFIRMED.


SO ORDERED.

Associate Justice

WE CONCUR:

Associate Justice
Chairperson

DANTE O. TINGA PRESBITERO J. VELASCO, JR.

ARTURO D. BRION
Associate Justice

ATTESTATION


Associate Justice
Chairperson

CERTIFICATION


REYNATO S. PUNO
Chief Justice

[1]
Exhibit C, Folder of Exhibits.
[2]
Records, p. 2.
[3]
Filed on April 13, 1999.
[4]
Records, p. 3.
[5]
Id. at 25-30
[6]
Id. at 26.
[7]
Id. at 27.
[8]
Ibid.
[9]
Id. at 155, Exhibit 3.
[10]
Rollo, pp. 23-31.
[11]
Page 9 of RTC decision; rollo, p. 31.
[12]
Penned by Justice Magdangal M. de Leon with the concurrence of Justices Conrado M. Vasquez, Jr. and Mariano
C. del Castillo.
[13]
Id. at 37.
[14]
Id. at 39.
[15]
Id. at 42-44.
[16]
Id. at 6.
[17]
3 Sanchez Roman 572.
[18]
Art. 1358. The following must appear in a public document:
(1) Acts and contracts which have for their object the creation, transmission, modification or
extinguishment of real rights over immovable property; sales of real property or an
interest therein are governed by Articles 1403, No. 2 and 1405;
(2) x x x
(3) x x x
(4) x x x
x x x x
[19]
Dionisio, et al., v. Ortiz, et al., G.R. No. 95738, December 10, 1991, 204 SCRA 745, 749.
[20]
Diokno v. Rehabilitation Finance Corp., 91 Phil. 608 citing Sheldon v. Sheldon, 134 A. 904, 905, 100 N.J. Ex.
24.
[21]
Francisco v. Intermediate Appellate Court, G.R. No. 63996, September 15, 1989; De la Cruz v. Ramiscal, G.R.
No. 137882, February 4, 2005, 450 SCRA 449, 450 citing Villanueva v. Velasco, G.R. No. 130845, November
27, 2000.
[22]
Costabella Corp. v. Court of Appeals, G.R. No. 80511, January 25, 1991, 193 SCRA 333, 334.
[23]
Records, p. 80.
[24]
Exhibit 1 for respondents, Exhibit F for petitioners; records, p. 80.
[25]
Vide TSN, June 29, 2004, p. 14.
[26]
Francisco v. GSIS, G.R. No. L-18155, March 30, 1939.
[27]
Audion Electric Co. v. NLRC, 367 Phil. 620, 635 (1999).
[28]
TSN, June 29, 2004 at p. 11, direct examination of Caridad Tabisula.
[29]
TSN, June 29, 2004, p.16, cross-examination of Caridad Tabisula.
[30]
Exhibit E.

FIRST DIVISION

LEO WINSTON BRIN LEE, G.R. No. 149023
Petitioner,

Present:

PUNO, C.J., Chairperson,
SANDOVAL-GUTIERREZ,
-versus- CORONA,
AZCUNA, and
GARCIA, JJ.

SPOUSES AMADEO and Promulgated:

ADELAIDA CARREON,

Respondents.
September 27, 2007

x-----------------------------------------------------------------------------------------x

DECISION

SANDOVAL-GUTIERREZ, J.:
Challenged in the instant Petition for Review on Certiorari[1] are the Decision[2] of

the Court of Appeals dated March 12, 2001 and its Resolution dated June 21,
2001 in CA-G.R. CV No. 60511.
Spouses Amadeo and Adelaida Carreon, respondents, are the owners of a house

and Lots Nos. 8-B and 8-C located in Cebu City
covered by Transfer Certificates of Title (TCT) Nos. 61049 and 56745, respectively,
of the Registry of Deeds, same city.
On the other hand, Anita Linda Rodriguez is the owner of Lot No. 6213-A-2
covered by TCT No. 93402. It is situated within the vicinity of respondent spouses
lots.
As there is no existing way from their property to the nearest road, respondents
filed with the Regional Trial Court (RTC), Branch 22, Cebu City a complaint for
easement of right of way against Rodriguez, docketed as Civil Case No. CEB-
7426. During the pre-trial, the RTC found that there is another servient estate,
owned by Mr. and Ms. Anselmo Jardin which could be used by respondents as a
right of way. Respondents then filed a Motion for Leave to Admit Amended
Complaint to include spouses Jardin as co-defendants, the latter being owners of
Lots Nos. 6213-A-3, 6213-A-4 and 8-A located on the eastern side of respondents
property. On June 9, 1989, the RTC issued an Order admitting the Amended
Complaint.
However, the lots of spouses Jardin were sold pendente lite to Leo Winston Brin
Lee, petitioner. As a result, respondents filed a Motion for Leave to Admit Second
Amended Complaint impleading petitioner as additional
defendant. On September 10, 1993, the RTC granted the motion.
After trial, the RTC rendered Judgment in favor of respondents and

against petitioner, the dispositive portion of which reads:

FOR ALL THE FOREGOING, judgment is hereby rendered for the plaintiffs as
follows:
1. Ordering defendant Mr. Leo Winston Brin Lee to grant plaintiffs a right of way
on the northern portion of his properties as indicated in Exh.9-Lee measuring one-meter
wide and thirteen meters long;
2. Ordering Mr. Leo Winston Brin Lee to demolish the fence/structure to the
extent obstructing the right of way hereinabove constituted;
3. Ordering plaintiffs to solidarily pay defendant Lee the amount of THREE

THOUSAND PESOS (P3,000.00) per sq. m. or a total of THIRTY NINE THOUSAND PESOS
(P39,000.00) as payment of indemnity, on or before the complete establishment
thereof;
4. Further ordering plaintiffs to solidarily pay defendant Lee the amount of

TWENTY FIVE THOUSAND PESOS (P25,000.00) as the value of the wall/fence to be
demolished likewise on or before the complete establishment of the easement; and
5. All counterclaims are hereby dismissed for lack of merit.

NO PRONOUNCEMENT AS TO COSTS.
SO ORDERED.
On appeal by petitioner, the Court of Appeals, in its assailed Decision, affirmed

the RTC Judgment, thus:

WHEREFORE, premises considered, the present appeal is hereby DISMISSED, for
lack of merit. The appealed Decision dated June 24, 1997 of
the Regional Trial Court of Cebu City, Branch 22 in Civil Case No. CEB-7426 is hereby
AFFIRMED.
No pronouncement as to costs.
SO ORDERED.

Petitioner filed a motion for reconsideration but it was denied by the appellate
court in its Resolution of June 21, 2001.

Hence, the present petition.
Petitioner contends that respondents have an existing right of way; and that had
the trial court considered certain testimonial evidence and respondents
admissions, its conclusion and that of the Court of Appeals would have been
different.
Respondents, on the other hand, pray that the petition be denied for lack of
merit.
The issue for our resolution is whether the Court of Appeals erred in ruling that
respondents are entitled to an easement of right of way on petitioners
property. This issue is both factual and legal in nature.
The conferment of a legal easement of right of way is governed by Articles 649

and 650 of the Civil Code reproduced as follows:

ART. 649. The owner, or any person who by virtue of a real right may
cultivate or use any immovable, which is surrounded by other immovables
pertaining to other persons and without adequate outlet to a public highway, is
entitled to demand a right of way through the neighboring estates, after payment
of the proper indemnity.
Should this easement be established in such a manner that its use may be
continuous for all the needs of the dominant estate, establishing a permanent
passage, the indemnity shall consist of the value of the land occupied and the
amount of the damage caused to the servient estate.
In case the right of way is limited to the necessary passage for the
cultivation of the estate surrounded by others and for the gathering of its crops
through the servient estate without a permanent way, the indemnity shall consist
in the payment of the damage caused by such encumbrance.
This easement is not compulsory if the isolation of the immovable is due to the
proprietors own acts.
ART. 650. The easement of right of way shall be established at the point

least prejudicial to the servient estate, and, insofar as consistent with this rule,
where the distance from the dominant estate to a public highway may be the
shortest.
To be entitled to an easement of right of way, the following requisites should be

met:

1. the dominant estate is surrounded by other immovables and has no adequate

outlet to a public highway (Art. 649, par. 1);
2. there is payment of proper indemnity (Art. 649, par. 1);
3. the isolation is not due to the acts of the proprietor of the dominant estate
(Art. 649, last par.); and
4. the right of way claimed is at the point least prejudicial to the servient estate;
and insofar as consistent with this rule, where the distance from the dominant estate to
a public highway may be the shortest (Art. 650).[3]
All the above requisites are present here.
As regards the first requisite, the parties agreed that respondents property
is surrounded by the estates of other persons, including that of petitioner. The
only dispute is whether respondents have an adequate outlet to the nearest
road. The Court of Appeals held:

x x x What defendant-appellant insists is that plaintiffs-appellees can use
another outlet leading to the nearest road by traversing several small lots and thereafter
use the northern portion of his property which he is willing to be the subject of a right of
way. The trial court found that plaintiffs-appellees managed to reach the nearest road
through any passage available, passing through several lots as they were unobstructed
by any structure of fence. However, as correctly ruled by the court a quo, this is not the
adequate outlet referred to by law. Plaintiffs-appellees have every right in accordance
with law to formally demand for an adequate outlet sufficient for their needs.
Moreover, the alternative route referred to by defendant-appellant appears to be
merely a proposed outlet, not yet in existence. x x x
The second requisite is that payment of indemnity has been complied

with. Respondents have consistently maintained that they are willing to pay the
area affected at a reasonable price that may be fixed by the Court.[4]
Anent the third requisite, records show that the isolation of respondents property
is not due to their fault. Actually, it is surrounded by estates of other persons,
leaving respondents no adequate ingress or egress to a public highway.
Going now to the fourth requisite that the right of way claimed is at the
point least prejudicial and shortest distance to the servient estate, the
Court of Appeals held: We find the same to be present in the case at
bar. Moreover, it should be emphasized that what respondent spouses asked for
was merely a one (1) meter wide pathway. The trial court found that this
easement will only affect a small portion of petitioners lot which has a total area
of 249 square meters.[5] Only his fence will be affected, the damage of which
respondent spouses are willing to pay.
Verily, we find no cogent reason to disturb the Decision of the Court of

Appeals affirming the Judgment of the trial court.

WHEREFORE, we DENY the petition. The challenged Decision and
Resolution of the Court of Appeals in CA-G.R. CV No. 60511 are AFFIRMED. Costs
against petitioner.
SO ORDERED.

ANGELINA SANDOVAL-GUTIERREZ
Associate Justice
WE CONCUR:
REYNATO S. PUNO
Chief Justice
Chairperson

RENATO C. CORONA ADOLFO S. AZCUNA

CANCIO C. GARCIA
Associate Justice
CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby

certified that the conclusions in the above Decision were reached in
Courts Division.

REYNATO S. PUNO
Chief Justice
[1]
Filed under Rule 45, 1997 Rules of Civil Procedure, as amended.
[2]
Penned by Associate Justice Martin S. Villarama, Jr. and concurred in by Associate Justice Conrado M. Vasquez,
Jr. and Associate Justice Perlita J. Tria-Tirona (retired).
[3]
Sta. Maria v. Court of Appeals, G.R. No. 127549, January 28, 1998, 285 SCRA 351, 358, with citations.
[4]
Annex C of the Amended Complaint, Rollo, pp. 41-44.
[5]
RTC Judgment, id., pp. 28-36.

Supreme Court
Manila

SECOND DIVISION

NATIONAL POWER CORPORATION, G.R. No. 193023

Petitioner,
Present:

CARPIO, J.,

Chairperson,

LEONARDO-DE CASTRO,*
- versus -
BRION,

PEREZ, and

SERENO, JJ.

Promulgated:
YUNITA TUAZON, ROSAURO TUAZON and
MARIA TERESA TUAZON,
Respondents. June 22, 2011

x------------------------------------------------------------------------------------------x
DECISION
BRION, J.:
This is a petition for review filed under Rule 45 of the Rules of Court, seeking the
reversal of the decision[1] (dated March 15, 2010) of the Court of Appeals (CA)[2] in
CA-G.R. CV No. 82480, which set aside the order[3] of the Regional Trial Court
(RTC) of Tarangnan, Samar, Branch 40, and remanded the case back to the RTC for
determination of just compensation. The RTC had dismissed the complaint of
respondents Yunita Tuazon, Rosauro Tuazon and Maria Teresa Tuazon against the
National Power Corporation (NAPOCOR) for payment of just compensation and
damages.
ANTECEDENTS
The antecedent facts are not in dispute.

The respondents are co-owners of a 136,736-square-meter coconut
land[4] in Barangay Sta. Cruz, Tarangnan, Samar. The land has been declared
for tax purposes in the name of the respondents predecessor-in-interest, the
late Mr. Pascual Tuazon. Sometime in 1996, NAPOCOR[5] installed
transmission lines on a portion of the land for its 350 KV Leyte-Luzon HVDC
Power TL Project. In the process, several improvements on the land were
destroyed. Instead of initiating expropriation proceedings, however,
NAPOCOR entered into a mere right-of-way agreement[6] with Mr. Tuazon for
the total amount of TWENTY SIX THOUSAND NINE HUNDRED SEVENTY
EIGHT and 21/100 PESOS (P26,978.21). The amount represents payments
for damaged improvements (P23,970.00), easement and tower occupancy
fees (P1,808.21), and additional damaged improvements (P1,200.00).

In 2002, the respondents filed a complaint against NAPOCOR for just

compensation and damages, claiming that no expropriation proceedings were
made and that they only allowed NAPOCOR entry into the land after being told
that the fair market value would be paid. They also stated that lots similarly
located in Catbalogan, Samar, likewise utilized by NAPOCOR for the similar
projects, were paid just compensation in sums ranging from P2,000.00
to P2,200.00 per square meter, pursuant to the determination made by
different branches of the RTC in Samar.

Instead of filing an answer, NAPOCOR filed a motion to dismiss based on
the full satisfaction of the respondents claims. The RTC granted the motion in
this wise:

ORDER

Acting on the Motion to Dismiss and the Opposition thereto and after
a very careful study of the arguments raised by the Parties, the court resolves
in favor of the Defendant.

Accordingly, the Court hereby orders the DISMISSAL of this case
without costs.

IT IS SO ORDERED.

Tarangnan, Samar, Philippines, February 3, 2004.

(Sgd.) ROBERTO A. NAVIDAD
Acting Presiding Judge[7]

The assailed decision of the Court of Appeals

The respondents filed an ordinary appeal with the CA. In its Appellees
Brief, NAPOCOR denied that expropriation had occurred. Instead, it claimed to
have lawfully established a right-of-way easement on the land per its
agreement with Mr. Tuazon, which agreement is in accord with its charter,
Republic Act No. (R.A.) 6395. NAPOCOR maintained that Section 3-A(b) of R.A.
6395 gave it the right to acquire a right-of-way easement upon payment of
just compensation equivalent to not more than 10% of the market value of a
private lot traversed by transmission lines.[8]

The CA disagreed with the RTC. Citing National Power Corporation v.
Hon. Sylvia G. Aguirre-Paderanga, etc., et al. [9] and National Power Corporation
v. Manubay Agro-Industrial Development Corporation,[10] the CA pointed out
that the demolition of the improvements on the land, as well as the
installation of transmission lines thereon, constituted taking under the power
of eminent domain, considering that transmission lines are hazardous and
restrictive of the lands use for an indefinite period of time. Hence, the CA held
that the respondents were entitled, not just to an easement fee, but to just
compensation based on the full market value of the respondents
land. Citing Export Processing Zone Authority v. Hon. Ceferino E. Dulay, etc., et
al.,[11] the CA maintained that NAPOCOR cannot hide behind the mantle of
Section 3-A(b) of R.A. 6395 as an excuse of dismissing the claim of appellants
since the determination of just compensation is a judicial function. No statute,
decree, or executive order can mandate that its own determination shall
prevail over the courts findings,[12] the CA added. The dispositive of the
assailed decision reads:

In sum, after establishing that NAPOCORs acquisition of the right-of-
way easement over the portion of the appellants land was a definite taking
under the power of eminent domain, NAPOCOR is liable to pay appellants
[referring to the respondents herein] just compensation and not only
easement fee.

IN LIGHT OF ALL THE FOREGOING, the Order dated February 3,

2004 of the RTC, Br. 40, Tarangnan, Samar is hereby REVERSED and SET
ASIDE. The instant case is hereby REMANDED to the RTC, Br. 40 of
Tarangnan, Samar for the proper determination of just compensation.[13]

The Petition

The present petition reiterates that by installing transmission lines,

NAPOCOR did not expropriate the respondents land, but merely established a
right-of-way easement over it. The petition relies heavily on the lack of transfer of
the lands title or ownership. NAPOCOR maintains that since the respondents
claim involved an easement, its charter a special law should govern in accordance
with Article 635 of the Civil Code.[14] NAPOCOR insists that its agreement with the
respondents predecessor-in-interest and the easement fee that was paid pursuant
thereto were authorized by its charter and are, thus, valid and binding. Finally, the
petitioner alleges that establishing right-of-way easements over lands traversed by
its transmission lines was the only mode by which it could acquire the properties
needed in its power generation and distribution function. It claims that R.A. 8974,
[15]
specifically its implementing rules, supports this position.
THE COURT RULING

We find the petition devoid of merit and AFFIRM the remand of the case to
the RTC for the determination of just compensation.

The petitioner pleads nothing new. It essentially posits that its liability is

limited to the payment of an easement fee for the land traversed by its
transmission lines. It relies heavily on Section 3-A(b) of R.A. 6395 to support this
position.
This position has been evaluated and found wanting by this Court in
a plethora of cases, including Manubay[16] which was correctly cited by the CA in the
assailed decision.
In Manubay,[17] NAPOCOR sought the reversal of a CA decision that affirmed

the payment, as ordered by the RTC in Naga City, of the full value of a property
traversed by NAPOCORs transmission lines for its 350 KV Leyte-Luzon HVDC
Power Transmission Project. Through then Associate Justice Artemio V.
Panganiban, the Court echoing the 1991 case of National Power Corporation v.
Misericordia Gutierrez, et al.[18] formulated the doctrinal issue in Manubay,[19] as
follows:

How much just compensation should be paid for an easement of a right of way over a
parcel of land that will be traversed by high-powered transmission lines? Should such
compensation be a simple easement fee or the full value of the property? This is the
question to be answered in this case.[20]
In holding that just compensation should be equivalent to the full value of

the land traversed by the transmission lines, we said:

Granting arguendo that what petitioner acquired over respondents property
was purely an easement of a right of way, still, we cannot sustain its view that it should
pay only an easement fee, and not the full value of the property. The acquisition of such
an easement falls within the purview of the power of eminent domain. This conclusion
finds support in similar cases in which the Supreme Court sustained the award of just
compensation for private property condemned for public use. Republic v. PLDT held
thus:
x x x. Normally, of course, the power of eminent domain results in the taking or

appropriation of title to, and possession of, the expropriated property; but no cogent
reason appears why the said power may not be availed of to impose only a burden upon
the owner of condemned property, without loss of title and possession. It is
unquestionable that real property may, through expropriation, be subjected to an
easement of right of way.
True, an easement of a right of way transmits no rights except the easement

itself, and respondent retains full ownership of the property. The acquisition of such
easement is, nevertheless, not gratis. As correctly observed by the CA, considering the
nature and the effect of the installation power lines, the limitations on the use of the
land for an indefinite period would deprive respondent of normal use of the property.
For this reason, the latter is entitled to payment of a just compensation, which must be
neither more nor less than the monetary equivalent of the land.
Just compensation is defined as the full and fair equivalent of the property
taken from its owner by the expropriator. The measure is not the takers gain, but the
owners loss. The word just is used to intensify the meaning of the word compensation
and to convey thereby the idea that the equivalent to be rendered for the property to
be taken shall be real, substantial, full and ample.
In eminent domain or expropriation proceedings, the just compensation to

which the owner of a condemned property is entitled is generally the market value.
Market value is that sum of money which a person desirous but not compelled to buy,
and an owner willing but not compelled to sell, would agree on as a price to be given
and received therefore.[21] (Emphasis ours; citations omitted.)

We find it significant that NAPOCOR does not assail the applicability

of Manubay[22] in the present case. Instead, NAPOCOR criticizes the application
of Gutierrez[23]which the CA had cited as authority for the doctrine that eminent
domain may also be availed of to impose only a burden upon the owner of
condemned property, without loss of title and possession.[24] NAPOCOR
assails Gutierrez[25] as irrelevant on the ground that the expropriation proceedings
were instituted in January 1965, when the NAPOCOR Charter had not been
amended with the insertion of Section 3-A(b) in 1976.[26] To NAPOCOR, Section 3-
A(b) provides for a fixed formula in the computation of just compensation in cases
of acquisition of easements of right-of-way. Heavily relying on Section 3-A(b),
therefore, NAPOCOR argues:

Absent any pronouncement regarding the effect of Section 3-A (b) of R.A. 6395, as
amended, on the computation of just compensation to be paid to landowners affected
by the erection of transmission lines, NPC v. Gutierrez, supra, should not be deemed
controlling in the case at bar.[27]
We do not find NAPOCORs position persuasive.
The application of Gutierrez[28] to the present case is well taken. The facts
and issue of both cases are comparable.[29] The right-of-way easement in the case
similarly involved transmission lines traversing privately owned land.
It likewise held that the transmission lines not only endangered life and limb, but
restricted as well the owners use of the land traversed. Our pronouncement
in Gutierrez[30] that the exercise of the power of eminent domain necessarily
includes the imposition of right-of-way easements upon condemned property
without loss of title or possession[31] therefore remains doctrinal and should be
applied.[32]
NAPOCORs protest against the relevancy of Gutierrez, heavily relying as it

does on the supposed conclusiveness of Section 3-A(b) of R.A. 6395 on just
compensation due for properties traversed by transmission lines, has no merit.
We have held in numerous cases that Section 3-A(b) is not conclusive upon the
courts.[33] In National Power Corporation v. Maria Bagui, et al., [34] we categorically
held:

Moreover, Section 3A-(b) of R.A. No. 6395, as amended, is not binding on the Court. It
has been repeatedly emphasized that the determination of just compensation in
eminent domain cases is a judicial function and that any valuation for just compensation
laid down in the statutes may serve only as a guiding principle or one of the factors in
determining just compensation but it may not substitute the court's own judgment as to
what amount should be awarded and how to arrive at such amount. (Citations omitted.)
The determination of just compensation in expropriation cases is a function

addressed to the discretion of the courts, and may not be usurped by any other
branch or official of the government.[35] This judicial function has
constitutional raison dtre; Article III of the 1987 Constitution mandates that no
private property shall be taken for public use without payment of just
compensation. In National Power Corporation v. Santa Loro Vda. de Capin, et al.,
[36]
we noted with approval the disquisition of the CA in this matter:

The [herein petitioner] vehemently insists that its Charter [Section 3A (b) of R.A. 6395]
obliges it to pay only a maximum of 10% of the market value declared by the owner or
administrator or anyone having legal interest in the property, or such market value as
determined by the assessor, whichever is lower. To uphold such a contention would not
only interfere with a judicial function but would also render as useless the protection
guaranteed by our Constitution in Section 9, Article III of our Constitution that no private
property shall be taken for public use without payment of just compensation.
The same principle further resolves NAPOCORs contention that R.A. 8974,

specifically its implementing rules, supports NAPOCORs claim that it is liable to
the respondents for an easement fee, not for the full market value of their land.
We amply addressed this same contention in Purefoods[37] where we held that:
While Section 3(a) of R.A. No. 6395, as amended, and the implementing rule of R.A. No.
8974 indeed state that only 10% of the market value of the property is due to the owner
of the property subject to an easement of right-of-way, said rule is not binding on the
Court. Well-settled is the rule that the determination of just compensation in eminent
domain cases is a judicial function. In Export Processing Zone Authority v. Dulay, the
Court held that any valuation for just compensation laid down in the statutes may serve
only as guiding principle or one of the factors in determining just compensation but it
may not substitute the court's own judgment as to what amount should be awarded
and how to arrive at such amount. The executive department or the legislature may
make the initial determinations but when a party claims a violation of the guarantee in
the Bill of Rights that private property may not be taken for public use without just
compensation, no statute, decree, or executive order can mandate that its own
determination shall prevail over the court's findings. Much less can the courts be
precluded from looking into the "justness" of the decreed compensation. (Citations
omitted.)
That the respondents predecessor-in-interest did not oppose the

installation of transmission lines on their land is irrelevant. In the present petition,
NAPOCOR insinuates that Mr. Tuazons failure to oppose the instillation now
estops the respondents from their present claim.[38] This
insinuation has no legal basis. Mr. Tuazons failure to oppose cannot have the
effect of thwarting the respondents right to just compensation. In Rafael C. de
Ynchausti v. Manila Electric Railroad & Light Co., et al.,[39] we ruled:

The owner of land, who stands by, without objection, and sees a public railroad
constructed over it, can not, after the road is completed, or large expenditures have
been made thereon upon the faith of his apparent acquiescence, reclaim the land, or
enjoin its use by the railroad company. In such case there can only remain to the owner
a right of compensation. (Goodin v. Cin. And Whitewater Canal Co., 18 Ohio St., 169.)
One who permits a railroad company to occupy and use his land and construct its road
thereon without remonstrance or complaint, cannot afterwards reclaim it free from the
servitude he has permitted to be imposed upon it. His acquiescence in the company's
taking possession and constructing its works under circumstances which made imperative
his resistance, if he ever intended to set up illegality, will be considered a waiver. But
while this presumed waiver is a bar to his action to dispossess the company, he is not
deprived of his action for damages for the value of the land, or for injuries done him by
the construction or operation of the road. (St. Julien v. Morgan etc., Railroad Co.,
35 La. Ann., 924.)
In sum, we categorically hold that private land taken for the installation of
transmission lines is to be paid the full market value of the land as just
compensation. We so ruled in National Power Corporation v. Benjamin Ong Co,
[40]
and we reiterate this ruling today:

As earlier mentioned, Section 3A of R.A. No. 6395, as amended, substantially provides
that properties which will be traversed by transmission lines will only be considered as
easements and just compensation for such right of way easement shall not exceed 10
percent of the market value. However, this Court has repeatedly ruled that when
petitioner takes private property to construct transmission lines, it is liable to pay the
full market value upon proper determination by the courts. (Citations omitted.)

WHEREFORE, premises considered, we DENY the present petition for review
and AFFIRM the assailed decision of the Court of Appeals, promulgated on March
15, 2010, in CA-G.R. CV No. 82480.
SO ORDERED.

ARTURO D. BRION
Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson

TERESITA J. LEONARDO-DE CASTRO JOSE PORTUGAL PEREZ

MARIA LOURDES P. A. SERENO
Associate Justice

ATTESTATION
Courts Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, and the Division
Chairperson's Attestation, it is hereby certified that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Courts Division.
RENATO C. CORONA
Chief Justice
*
Designated as Acting Member of the Second Division per Special Order No. 1006 dated June 10, 2011.
[1]
Rollo, pp. 41-49; penned by Associate Justice Agnes Reyes-Carpio, and concurred in by Associate Justices
Samuel H. Gaerlan and Socorro B. Inting.
[2]
Twentieth Division, Cebu City.
[3]
Rollo, p. 50; in Civil Case No. T-008, dated February 3, 2004, penned by Roberto A. Navidad, Acting Presiding
Judge.
[4]
Denominated as Lot No. 2646, CAD 706-D.
[5]
Created pursuant to Republic Act No. 6395, also known as AN ACT REVISING THE CHARTER OF THE
NATIONAL POWER CORPORATION.
[6]
Per the decision of the CA, the agreements are titled and dated as follows: (a) Deed of Conveyance and
Declaration of Ownership with Waiver of Claims to Improvements Damaged, dated July 3, 1995; (b) Deed of
Conveyance and Declaration of Ownership with Waiver of Claims to Improvements Damaged, dated August 4,
2007; and (c) Right of Way Grant in Favor of National Power Corporation, dated December 31, 1995.
[7]
Supra note 2.
[8]
Rollo, p. 44.
[9]
G.R. No. 155065, July 28, 2005, 464 SCRA 481.
[10]
G.R. No. 150936, August 18, 2004, 437 SCRA 60.
[11]
No. L-59603, April 29, 1987, 149 SCRA 305.
[12]
Rollo, pp. 47-48.
[13]
Id. at 48-49.
[14]
Article 635 of the Civil Code reads: Art. 635. All matters concerning easements established for public or
communal use shall be governed by the special laws and regulations relating thereto, and, in the absence thereof,
by the provisions of this Title.
[15]
Entitled AN ACT TO FACILITATE THE ACQUISITION OF RIGHT-OF-WAY, SITE OR LOCATION FOR
NATIONAL GOVERNMENT INFRASTRUCTURE PROJECTS AND FOR OTHER PURPOSES, approved
on November 7, 2000.
[16]
Supra note 10. In National Power Corporation v. Purefoods Corporation (G.R. No. 160725, September 12, 2008,
565 SCRA 17, 31), we held: The question of just compensation for an easement of right-of-way over a parcel of
land that will be traversed by NAPOCOR's transmission lines has already been answered in National Power
Corporation v. Manubay Agro-Industrial Development Corporation.
[17]
Supra note 10.
[18]
G.R. No. 60077, January 18, 1991, 193 SCRA 1, 6. The sole issue in Gutierrez was formulated in this wise:
Whether petitioner should be made to pay simple easement fee or full compensation for the land traversed by its
transmission lines.
[19]
Supra note 10.
[20]
Id. at 62.
[21]
Id. at 67-68.
[22]
Id.
[23]
Supra note 18.
[24]
Rollo, p. 46.
[25]
Supra note 18.
[26]
The amendment was pursuant to Presidential Decree (P.D.) No. 938, dated May 27, 1976. Section 4 of P.D. No.
938FURTHER AMENDING CERTAIN SECTIONS OF REPUBLIC ACT NUMBERED SIXTY-THREE
HUNDRED NINETY-FIVE ENTITLED, AN ACT REVISING THE CHARTER OF THE NATIONAL POWER
CORPORATION, AS AMENDED BY PRESIDENTIAL DECREES NOS. 380, 395 AND 758provides:
Section 4. A new section shall be inserted to be known as Section 3A of the same Act to read as follows:
Sec. 3A. In acquiring private property or private property rights through expropriation proceedings where the land or
portion thereof will be traversed by the transmission lines, only a right-of-way easement thereon shall be acquired
when the principal purpose for which such land is actually devoted will not be impaired, and where the land itself
or portion thereof will be needed for the projects or works, such land or portion thereof as necessary shall be
acquired.
In determining the just compensation of the property or property sought to be acquired through expropriation
proceedings, the same shall
(a) With respect to the acquired land or portion thereof, not to exceed the market value declared by the owner or
administrator or anyone having legal interest in the property, or such market value as determined by the assessor,
whichever is lower.
(b) With respect to the acquired right-of-way easement over the land or portion thereof, not to exceed ten
percent (10%) of the market value declared by the owner or administrator or anyone having legal interest
in the property, or such market value as determined by the assessor, whichever is lower.
In addition to the just compensation for easement of right-of-way, the owner of the land or owner of the
improvement, as the case may be, shall be compensated for the improvements actually damaged by the
construction and maintenance of the transmission lines, in an amount not exceeding the market value thereof as
declared by the owner or administrator, or anyone having legal interest in the property, or such market value as
determined by the assessor whichever is lower; Provided, that in cases any buildings, houses and similar structures
are actually affected by the right-of-way for the transmission lines, their transfer, if feasible, shall be effected at
the expense of the Corporation; Provided, further, that such market value prevailing at the time the Corporation
gives notice to the landowner or administrator or anyone having legal interest in the property, to the effect that his
land or portion thereof is needed for its projects or works shall be used as basis to determine the just compensation
therefor. (Emphasis supplied.)
[27]
Rollo, p. 30.
[28]
Supra note 18.
[29]
See note 18.
[30]
Id.
[31]
Likewise cited in National Power Corporation v. Aguirre-Paderanga, supra note 9.
[32]
Bernas, Joaquin, The 1987 Constitution of the Republic of the Philippines A Commentary, 2009 ed., p. 435.
[33]
National Power Corporation v. Villamor, G.R. No. 160080, June 19, 2009, 590 SCRA 11, 21, citing National
Power Corporation v. Tiangco, G.R. No. 170846, 6 February 2007, 514 SCRA 674; National Power Corporation
v. San Pedro, G.R. No. 170945, 26 September 2006, 503 SCRA 333; Didipio Earth-Savers Multi-Purpose
Association, Inc. (DESAMA) v. Gozun, G.R. No. 157882, 30 March 2006, 485 SCRA 586; National Power
Corporation v. Aguirre-Paderanga, G.R. No. 155065, 28 July 2005, 464 SCRA 481; National Power Corporation
v. Chiong, 452 Phil. 649 (2003); Camarines Norte Electric Cooperative, Inc. (CANORECO) v. Court of Appeals,
398 Phil. 886 (2000); National Power Corporation v. Gutierrez, G.R. No. 60077, 18 January 1991, 193 SCRA 1.
[34]
G.R. No. 164964, October 17, 2008, 569 SCRA 401, 410.
[35]
Land Bank of the Philippines v. Dumlao, G.R. No. 167809, July 23, 2009, 593 SCRA 619, citing Export
Processing Zone Authority v. Dulay, G.R. No. L-59603, April 29, 1987, 149 SCRA 305.
[36]
G.R. No. 175176, October 17, 2008, 569 SCRA 648, 668.
[37]
Supra note 16, at 33-34.
[38]
Rollo, pp. 26-27.
[39]
36 Phil. 908, 911-912 (1917).
[40]
G.R. No. 166973, February 10, 2009, 578 SCRA 234, 245.

Supreme Court
Manila

THIRD DIVISION

G.R. No. 152319
HEIRS OF THE LATE JOAQUIN LIMENSE,

namely: CONCESA LIMENSE, Surviving
Present:

QUISUMBING,* J.,
Spouse; and DANILO and JOSELITO, both CARPIO, J., Chairperson,

surnamed Limense, children,
CHICO-NAZARIO,
Petitioners,
PERALTA, and
- versus -
ABAD,** JJ.

RITA VDA. DE RAMOS, RESTITUTO
RAMOS, VIRGILIO DIAZ, IRENEO
RAMOS, BENJAMIN RAMOS,

WALDYTRUDES RAMOS-
BASILIO, TRINIDAD RAMOS-
BRAVO, PAZ RAMOS-PASCUA,
FELICISIMA RAMOS-REYES, and Promulgated:
JACINTA RAMOS,
Respondents. October 28, 2009
X-- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -X
DECISION
PERALTA, J.,
This is a petition for review on certiorari under Rule 45 of the Rules of Court

seeking to annul and set aside the Decision[1] of the Court of Appeals dated
December 20, 2001 in CA-G.R. CV No. 33589 affirming in toto the Decision[2] of the
Regional Trial Court of Manila, Branch 15, dated September 21, 1990 in Civil Case
No. 83-16128.

Dalmacio Lozada 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 at the City of Manila on June 14,
1927,[3] containing an area of 873.80 square meters, more or less, located in Beata
Street, Pandacan, Manila.
Dalmacio Lozada subdivided his property into five (5) lots, namely: Lot Nos. 12-A,
12-B, 12-C, 12-D and 12-E. Through a Deed of Donation dated March 9, 1932,[4] he
donated the subdivided lots to his daughters, namely: Isabel, Salud, Catalina, and
Felicidad, all surnamed Lozada. The Deed of Donation was registered with the
office of the Register of Deeds of Manila on March 15, 1932.
Under the said Deed of Donation, the lots were adjudicated to Dalmacio's
daughters in 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 Salud Lozada, married to Francisco Ramos; and
e. Lot No. 12-E in favor of Isabel Lozada, married to Isaac Limense, and Felicidad
Lozada, married to Galicano Centeno.

By virtue of the Deed of Donation executed by Dalmacio Lozada, OCT No. 7036,
which was registered in his name, was cancelled and, in lieu thereof, Transfer
Certificates of Title (TCTs) bearing Nos. 40041, 40042, 40043, 40044, and 40045
were issued in favor of the donees, except TCT No. 40044, which remained in his
name. These new TCTs were annotated at the back of OCT No. 7036.[5]
TCT No. 40043, which covered Lot No. 12-C, was issued in the name of its co-
owners Catalina Lozada, married to Sotero Natividad; Isabel Lozada, married to
Isaac Limense; and Salud Lozada, 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 Calle Beata, 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[6] 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. The parties failed to amicably
settle the differences between them despite referral to the barangay. Thus,
on March 9, 1983, Joaquin Limense, duly represented by his Attorney-in-Fact,
Teofista L. Reyes, instituted a Complaint[7]against respondents before the
Regional Trial Court (RTC) of Manila, Branch 15, 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, attorneys fees
and costs of suit.
Respondents, on the other hand, averred in their Answer[8] that they were the
surviving heirs of Francisco Ramos,[9] who, during his lifetime, was married to
Salud Lozada, one of the daughters of Dalmacio Lozada, the original owner of Lot
No. 12. After subdividing the said lot, Dalmacio Lozada donated Lot No. 12-C in
favor of his daughters Catalina, married to Sotero Natividad; 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 Dalmacio
Lozada 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.
After trial on the merits, the RTC rendered a Decision[10] dated September 21,

1990 dismissing the complaint of Joaquin Limense. It ruled that an apparent
easement of right of way existed in favor of respondents. Pertinent portions of
the decision read as follows:

The Court finds that an apparent easement of right of way exists in favor of the
defendants under Article 624 of the Civil Code. It cannot be denied that there is an alley
which shows its existence. It is admitted that this alley was established by the original
owner of Lot 12 and that in dividing his property, the alley established by him continued
to be used actively and passively as such. Even when the division of the property
occurred, the non-existence of the easement was not expressed in the corresponding
titles nor were the apparent sign of the alley made to disappear before the issuance of
said titles.
The Court also finds that when plaintiff acquired the lot (12-C) which forms the
alley, he knew that said lot could serve no other purpose than as an alley. That is why
even after he acquired it in 1969, the lot continued to be used by defendants and
occupants of the other adjoining lots as an alley. The existence of the easement of right
of way was therefore known to plaintiff who must respect the same in spite of the fact
that his transfer certificate of title does not mention the lot of defendants as among
those listed therein as entitled to such right of way. It is an established principle that
actual notice or knowledge is as binding as registration.[11]
Aggrieved by said decision, Joaquin Limense filed a notice of appeal. The records
of the case were transmitted to the Court of Appeals (CA). During the pendency of
the appeal with the CA, Joaquin Limense died in 1999.[12]
The CA, Seventh Division, in CA-G.R. CV No. 33589, in its Decision [13] dated
December 20, 2001 dismissed the appeal and affirmed in toto the decision of the
RTC.
Frustrated by this turn of events, petitioners, as surviving heirs of Joaquin

Limense, elevated the case to this Court via a Petition for Review
on Certiorari[14] raising the following issues:

1. DID THE HONORABLE COURT OF APPEALS COMMIT A GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OF JURISDICTION, IN HOLDING, LIKE THE TRIAL COURT DID,
THAT RESPONDENTS' LOT 12-D HAS AN EASEMENT OF RIGHT OF WAY OVER
JOAQUIN LIMENSE'S LOT 12-C?
2. DID THE HONORABLE COURT OF APPEALS COMMIT A GRAVE ABUSE OF DISCRETION

AMOUNTING TO LACK OF JURISDICTION, IN FAILING TO HOLD, LIKE THE TRIAL
COURT DID, THAT THE PROTRUDING PORTIONS OF RESPONDENTS' HOUSE ON LOT
12-D EXTENDING INTO JOAQUIN LIMENSE'S LOT 12-C CONSTITUTE A NUISANCE
AND, AS SUCH, SHOULD BE REMOVED?
Petitioners aver that the CA erred in ruling that since Lot No. 12-C was covered by
two TCT's, i.e., TCT Nos. 40043 and 96886, and there was no evidence on record
to show how Joaquin Limense was able to secure another title over an already
titled property, then one of these titles must be of dubious origin. According to
the CA, TCT No. 96886, issued in the name of Joaquin Limense, was spurious
because the Lozada sisters never disposed of the said property covered by TCT
No. 40043. The CA further ruled that a co-ownership existed over Lot No. 12-C
between petitioners and respondents. Petitioners countered that TCT No. 96886,
being the only and best legitimate proof of ownership over Lot No. 12-C, must
prevail over TCT No. 40043.
Respondents allege that it was possible that TCT No. 96886, in the name of
Joaquin Limense, was obtained thru fraud, misrepresentation or falsification of
documents because the donees of said property could not possibly execute any
valid transfer of title to Joaquin Limense, as they were already dead prior to the
issuance of TCT No. 96886 in 1969.Respondents further allege that petitioners
failed to produce proof substantiating the issuance of TCT No. 96886 in the name
of Joaquin Limense.
Apparently, respondents are questioning the legality of TCT No. 96886, an issue
that this Court cannot pass upon in the present case. It is a rule that the validity of
a torrens title cannot be assailed collaterally.[15] Section 48 of Presidential Decree
(PD) No. 1529 provides that:

[a] certificate of title shall not be subject to collateral attack. It cannot be altered,
modified, or cancelled except in a direct proceeding in accordance with law.

In the case at bar, the action filed before the RTC against respondents was an
action for removal of obstruction and damages. Respondents raised the defense
that Joaquin Limense's title could have been obtained through fraud and
misrepresentation in the trial proceedings before the RTC. Such defense is in the
nature of a collateral attack, which is not allowed by law.

Further, it has been held that a certificate of title, once registered, should not
thereafter be impugned, altered, changed, modified, enlarged or diminished,
except in a direct proceeding permitted by law. Otherwise, the reliance on
registered titles would be lost. The title became indefeasible and incontrovertible
after the lapse of one year from the time of its registration and issuance. Section
32 of PD 1529 provides that upon the expiration of said period of one year, the
decree of registration and the certificate of title shall become incontrovertible.
Any person aggrieved by such decree of registration in any case may pursue his
remedy by action for damages against the applicant or other persons responsible
for the fraud.[16] It has, therefore, become an ancient rule that the issue on the
validity of title, i.e., whether or not it was fraudulently issued, can only be raised
in an action expressly instituted for that purpose.[17] In the present case, TCT No.
96886 was registered in 1969 and respondents never instituted any direct
proceeding or action to assail Joaquin Limense's title.

Additionally, an examination of TCT No. 40043 would readily show that there is
an annotation that it has been CANCELLED.[18] A reading of TCT No. 96886 would
also reveal that said title is a transfer from TCT No. 48866[19] and not TCT
40043. Thus, it is possible that there was a series of transfers effected from TCT
No. 40043 prior to the issuance of TCT No. 96886. Hence, respondents' position
that the issuance of TCT No. 96886 in the name of Joaquin Limense is impossible,
because the registered owners of TCT No. 40043 were already dead prior to 1969
and could not have transferred the property to Joaquin Limense, cannot be taken
as proof that TCT No. 96886 was obtained through fraud, misrepresentation or
falsification of documents.
Findings of fact of the CA, although generally deemed conclusive, may admit
review by this Court if the CA failed to notice certain relevant facts that, if
properly considered, would justify a different conclusion, and if the judgment of
the CA is premised on a misapprehension of facts.[20] As with the present case,
the CA's observation that TCT No.96886 is of dubious origin, as TCT No. 40043
does not appear to have been disposed of by Catalina, Isabel and Salud Lozada, is
improper and constitutes an indirect attack on TCT No. 96886. As we see it, TCT
No. 96886, at present, is the best proof of Joaquin Limenses ownership over Lot
No. 12-C. Thus, the CA erred in ruling that respondents and petitioners co-owned
Lot No. 12-C, as said lot is now registered exclusively in the name of Joaquin
Limense.

Due to the foregoing, Joaquin Limense, as the registered owner of Lot 12-C, and
his successors-in-interest, may enclose or fence his land or tenements by means
of walls, ditches, live or dead hedges, or by any other means without detriment to
servitudes constituted thereon.[21]

However, although the owner of the property has the right to enclose or fence his
property, he must respect servitudes constituted thereon. The question now is
whether respondents are entitled to an easement of right of way.

Petitioners contend that respondents are not entitled to an easement of right of
way over Lot No. 12-C, because their Lot No. 12-D is not duly annotated at the
back of TCT No. 96886 which would entitle them to enjoy the easement, unlike
Lot Nos. 12-A-1, 12-A-2, 12-A-3, 12-A-4, 12-A-5, and 12-A-6. Respondents, on the
other hand, allege that they are entitled to an easement of right of way over Lot
No. 12-C, which has been continuously used as an alley by the heirs of Dalmacio
Lozada, the residents in the area and the public in general from 1932 up to the
present. Since petitioners are fully aware of the long existence of the said alley or
easement of right of way, they are bound to respect the same.
As defined, an easement is a real right on another's property, corporeal and

somebody else to do or something to be done on his property, for the benefit of
another person or tenement.[22]
Easements may be continuous or discontinuous, apparent or non-apparent.
Continuous easements are those the use of which is or may be incessant, without
the intervention of any act of man. Discontinuous easements are those which are
used at intervals and depend upon the acts of man. Apparent easements are
those which are made known and are continually kept in view by external signs
that reveal the use and enjoyment of the same. Non-apparent easements are
those which show no external indication of their existence.[23]
In the present case, the easement of right of way is discontinuous and apparent.
It is discontinuous, as the use depends upon the acts of respondents and other
persons passing through the property. Being an alley that shows a permanent
path going to and from Beata Street, the same is apparent.

Being a discontinuous and apparent easement, the same can be acquired only by
virtue of a title.[24]
In the case at bar, TCT No. 96886, issued in the name of Joaquin Limense, does
not contain any annotation that Lot No. 12-D was given an easement of right of
way over Lot No. 12-C. However, Joaquin Limense and his successors-in-interests
are fully aware that Lot No. 12-C has been continuously used and utilized as an
alley by respondents and residents in the area for a long period of time.
Joaquin Limense's Attorney-in-Fact, Teofista L. Reyes, testified that respondents

and several other residents in the area have been using the alley to reach Beata
Street since 1932.Thus:

Atty. Manuel B. Tomacruz:
Q: Mrs. Witness, by virtue of that Deed of Donation you claim that titles were issued to
the children of Dalmacio Lozada namely Salud Lozada, Catalina Lozada and
Isabel Lozada, is that right?
A: Yes, sir.
Q: And after the said property was adjudicated to his said children the latter constructed
their houses on their lots.
A: Yes, sir.
Q: As a matter of fact, the herein defendants have constructed their houses on the
premises alloted to them since the year 1932?
A: Yes, sir, they were able to construct their house fronting Beata Street.
Q: And that house they have constructed on their lot in 1932 is still existing today?
A: Yes, sir and they still used the alley in question and they are supposed to use Beata
Street but they are not using Beata Street.
Q: They are using the alley?
A: Yes, sir, they are using the alley and they do not pass through Beata Street.
Q: And they have been using the alley since 1932 up to the present?
A: Yes, sir they have been using the alley since that time. That was their mistake and
they should be using Beata Street because they are fronting Beata Strret.
Q: As a matter of fact, it is not only herein defendants who have been using that alley
since 1932 up to the present?
A: Yes, sir they are using the alley up to now.
Q: As a matter of fact, in this picture marked as Exh. C-1 the alley is very apparent. This
is the alley?
A: Yes, sir.
Q: And there are houses on either side of this alley?
A: Yes, sir.
Q: As a matter of fact, all the residents on either side of the alley are passing through
this alley?
A: Yes, sir, because the others have permit to use this alley and they are now allowed to
use the alley but the Ramos's family are now [not] allowed to use this alley.[25]

In Mendoza v. Rosel,[26] this Court held that:

Petitioners claim that inasmuch as their transfer certificates of title do not mention any
lien or encumbrance on their lots, they are purchasers in good faith and for value, and
as such have a right to demand from respondents some payment for the use of the
alley. However, the Court of Appeals found, as a fact, that when respondents acquired
the two lots which form the alley, they knew that said lots could serve no other purpose
than as an alley. The existence of the easement of right of way was therefore known to
petitioners who must respect the same, in spite of the fact that their transfer
certificates of title do not mention any burden or easement. It is an established
principle that actual notice or knowledge is as binding as registration.
Every buyer of a registered land who takes a certificate of title for value and in
good faith shall hold the same free of all encumbrances except those noted on
said certificate. It has been held, however, that where the party has knowledge
of a prior existing interest that was unregistered at the time he acquired a right to
the same land, his knowledge of that prior unregistered interest has the effect of
registration as to him.[27]
In the case at bar, Lot No. 12-C has been used as an alley ever since it was
donated by Dalmacio Lozada to his heirs. It is undisputed that prior to and after
the registration of TCT No. 96886, Lot No. 12-C has served as a right of way in
favor of respondents and the public in general. We quote from the RTC's decision:

x x x It cannot be denied that there is an alley which shows its existence. It is admitted
that this alley was established by the original owner of Lot 12 and that in dividing his
property the alley established by him continued to be used actively and passively as
such. Even when the division of the property occurred, the non-existence of the
easement was not expressed in the corresponding titles nor were the apparent sign of
the alley made to disappear before the issuance of said titles.
The Court also finds that when plaintiff acquired the lot (12-C) which forms the
alley, he knew that said lot could serve no other purpose than as an alley. That is why
even after he acquired it in 1969 the lot continued to be used by defendants and
occupants of the other adjoining lots as an alley. x x x[28]
Thus, petitioners are bound by the easement of right of way over Lot No. 12-C,
even though no registration of the servitude has been made on TCT No. 96886.
However, respondents right to have access to the property of petitioners does not
include the right to continually encroach upon the latters property. It is not
disputed that portions of respondents' house on Lot No. 12-D encroach upon Lot
No. 12-C. Geodetic Engineer Jose Agres, Jr. testified on the encroachment of
respondents' house on Lot No. 12-C, which he surveyed. [29] In order to settle the
rights of the parties relative to the encroachment, We should determine whether
respondents were builders in good faith.
Good faith is an intangible and abstract quality with no technical meaning or

statutory definition; and it encompasses, among other things, an honest belief,
the absence of malice and the absence of a design to defraud or to seek an
unconscionable advantage. An individuals personal good faith is a concept of his
own mind and, therefore, may not conclusively be determined by his
protestations alone. It implies honesty of intention, and freedom from
knowledge of circumstances which ought to put the holder upon inquiry. The
essence of good faith lies in an honest belief in the validity of ones right,
ignorance of a superior claim, and absence of intention to overreach another.
Applied to possession, one is considered in good faith if he is not aware that there
exists in his title or mode of acquisition any flaw which invalidates it.[30]

Good faith is always presumed, and upon him who alleges bad faith on the part of
the possessor rests the burden of proof.[31] It is a matter of record that
respondents' predecessor-in-interest constructed their residential building on Lot
No. 12-D, adjacent to Lot No. 12-C, in 1932.[32] Respondents' predecessor-in-
interest owned the 1/3 portion of Lot No. 12-C at the time the property was
donated to them by Dalmacio Lozada in 1932. The Deed of Donation executed by
the late Dalmacio Lozada, dated March 9, 1932, specifically provides that:

I hereby grant, cede and donate in favor of Catalina Lozada married to Sotero Natividad,
Isabel Lozada married to Isaac Simense and Salud Lozada married to Francisco Ramos, all
Filipinos, of legal age, the parcel of land known as Lot No. 12-C, in equal parts.[33]
The portions of Lot No. 12-D, particularly the overhang, covering 1 meter in width
and 17 meters in length; the stairs; and the concrete structures are all within the
1/3 share alloted to them by their donor Dalmacio Lozada and, hence, there was
absence of a showing that respondents acted in bad faith when they built
portions of their house on Lot No. 12-C.
Using the above parameters, we are convinced that respondents' predecessors-

in-interest acted in good faith when they built portions of their house on Lot 12-
C. Respondents being builders in good faith, we shall now discuss the respective
rights of the parties relative to the portions encroaching upon respondents'
house.
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,[34] 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[35]

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.[36]
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.[37] 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.[38]
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.[39]
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.[40]
In accordance with Depra v. Dumlao,[41] this case must be remanded to the trial
court to determine matters necessary for the proper application of Article 448 in
relation to Article 546. Such matters include the option that petitioners would
take and the amount of indemnity that they would pay, should they decide to
appropriate the improvements on the lots.
Anent the second issue, although it may seem that the portions encroaching upon
respondents' house can be considered a nuisance, because it hinders petitioners'
use of their property, it cannot simply be removed at respondents' expense, as
prayed for by petitioner. This is because respondents built the subject
encroachment in good faith, and the law affords them certain rights as discussed
above.
WHEREFORE, the petition is DENIED, the Decision of the Court of Appeals

dated December 20, 2001 in CA-G.R. CV No. 33589 is AFFIRMED with the
following MODIFICATIONS:

1. No co-ownership exists over Lot No. 12-C, covered by TCT No. 96886,
between petitioners and respondents.

2. The case is REMANDED to the Regional Trial Court, Branch 15, Manila,

for further proceedings without further delay to determine the facts essential to
the proper application of Articles 448 and 546 of the Civil Code.
SO ORDERED.

DIOSDADO M. PERALTA
Associate Justice
WE CONCUR:
Associate Justice
ANTONIO T. CARPIO MINITA V. CHICO-NAZARIO

Chairperson
ROBERTO A. ABAD
Associate Justice
ATTESTATION
Courts Division.
ANTONIO T. CARPIO
Associate Justice
Third Division, Chairperson

CERTIFICATION
Chairpersons Attestation, I certify that the conclusions in the above Decision were
reached in consultation before the case was assigned to the writer of the opinion
of the Courts Division.
REYNATO S. PUNO
Chief Justice

*
Designated to sit as an additional member in lieu of Associate Justice Antonio Eduardo B. Nachura per Special
Order No. 755 dated October 12, 2009.
**
Designated to sit as an additional member in lieu of Associate Justice Presbitero J. Velasco, Jr. per Special Order
No. 753 dated October 12, 2009.
[1]
Penned by Associate Justice Rebecca de Guia-Salvador, with Associate Justices Eugenio S. Labitoria and
Teodoro P. Regino, concurring; rollo, pp. 29-35.
[2]
Id. at 52-55.
[3]
Records, p. 231.
[4]
Id. at 14-19.
[5]
Id. at 231.
[6]
Id. at 183.
[7]
Id. at 1-5.
[8]
Id. at 10-13.
[9]
In their answer, respondents referred to Francisco Ramos as Francisco Ramos, Sr.
[10]
Records, pp. 311-314.
[11]
Id. at 314.
[12]
Rollo, p. 27.
[13]
Id. at 29-35.
[14]
Id. at 9-25.
[15]
Vda. de Gualberto v. Go, G.R. No. 139843, July 21, 2005, 463 SCRA 671, 677.
[16]
Seville v. National Development Company, 403 Phil. 843, 859 (2001).
[17]
Tanenglian v. Lorenzo, G.R. No. 173415, March 28, 2008, 550 SCRA 348, 380.
[18]
Records, p. 239.
[19]
Id. at 183.
[20]
Fuentes v. Court of Appeals, 335 Phil. 1163, 1168 (1997).
[21]
New Civil Code, Art. 430.
[22]
Quimen v. Court of Appeals, 326 Phil. 969, 976 (1996), citing 3 Sanchez Roman 472.
[23]
[24]
[25]
TSN, May 9, 1990, pp. 13-15.
[26]
74 Phil. 84 (1943). (Emphasis supplied).
[27]
Private Development Corporation of the Philippines v. Court of Appeals, G.R. No. 136897, November 22, 2005,
475 SCRA 591, 607.
[28]
Rollo, p. 55.
[29]
TSN, May 21, 1986.
[30]
Elvira T. Arangote v. Spouses Martin and Lourdes S. Maglunob, and Romeo Salido, G.R No. 178906, February
18, 2009; Heirs of Marcelino Cabal v. Cabal, G.R. No. 153625, July 31, 2006, 497 SCRA 301, 315-316.
[31]
New Civil Code, Art. 527; Ballatan v. Court of Appeals, 363 Phil. 408, 419 (1999).
[32]
Direct Examination of Ms. Rita Vda. de Ramos by Atty. Meneses, TSN, October 12, 1987, p. 11.
Q: How about the land which was donated to the defendants therein, namely Lot No. 12-D,
what happened to this land?
A: That is where our house is located.
Q: When did you construct your house on that land?
A: Sometime in 1932.
Q: And that house is still existing today?
A: Yes, sir.
[33]
Records, p. 228. (Emphasis supplied.)
[34]
No. L-49219, April 15, 1988, 160 SCRA 379.
[35]
Spouses Del Campo v. Abesia, supra, at 382-383.
[36]
Id. at 383.
[37]
Ochoa v. Apeta, G.R. No. 146259, September 13, 2007, 533 SCRA 235, 241.
[38]
Philippine National Bank v. De Jesus, 458 Phil. 454, 459 (2003).
[39]
Tecnogas Philippines Manufacturing Corp. v. Court of Appeals, 335 Phil. 471, 482 (1997).
[40]
Rosales v. Castelltort, G.R No. 157044, October 5, 2005, 472 SCRA 144, 161.
[41]
221 Phil. 168 (1985), cited in Macasaet v. Macasaet, G.R. Nos. 154391-92, September 30, 2004, 439 SCRA 625.
FIRST DIVISION
[G.R. No. 125339. June 22, 1998]
CRESENCIA CRISTOBAL, ROBERTO MAKIMKIM, DAMASO

MAKIMKIM, SPOUSES SALVADOR HERMALINO and PONCIANA
MAKIMKIM, MILAGROS MAKIMKIM, REMEDIOS MAKIMKIM,
SPOUSES FRANCISCO ESTANISLAO
and FLORDELIZA MAKIMKIM, ERLINDA MAKIMKIM, JOSE
MAKIMKIMand GINA MAKIMKIM, Petitioners, vs. COURT OF
APPEALS, CESAR LEDESMA, INC., SPOUSES JESUS C.
PACIONE and LERMA B. PACIONE, Respondents.
DECISION
BELLOSILLO, J.:
This petition for review seeks the reversal of the decision of respondent Court of
Appeals of 16 January 1996 in CA-G.R. CV Case No. 37273, "Cresencia Cristobal, et
al. v. Cesar Ledesma, Inc., et al.," [1] which affirmed in toto the decision of the RTC-Br.
81, Quezon City,[2] dismissing herein petitioners complaint for easement of right of
way, and the Resolution of 14 June 1996 denying their motion for reconsideration.
Petitioners own a house and lot situated at No. 10 Visayas Avenue Extension,
Quezon City, where they have been residing from 1961 to the present. Respondent
Cesar Ledesma, Inc., on the other hand, is the owner of a subdivision at Barrio Culiat
along Visayas Avenue which once included the disputed residential lots, Lot 1 and Lot
2, with areas of 164 square meters and 52 square meters, respectively, located
adjacent to petitioners property. Lots 1 and 2 were originally part of a private road
known as Road Lot 2 owned exclusively by Cesar Ledesma, Inc. Petitioners were using
Road Lot 2 in going to and from the nearest public road. When Visayas Avenue became
operational as a national road in 1979, Cesar Ledesma, Inc., filed a petition before the
RTC of Quezon City to be allowed to convert Road Lot 2 into residential lots. [3] The
petition was granted, hence, Road Lot 2 was converted into residential lots designated
as Lot 1 and Lot 2. Subsequently, Cesar Ledesma, Inc., sold both lots to Macario
Pacione in whose favor Transfer Certificates of Title were correspondingly issued. In
turn, Macario Pacione conveyed the lots to his son and daughter-in-law, respondent
spouses Jesus and Lerma Pacione.
When the Pacione spouses, who intended to build a house on Lot 1, visited the
property in 1987, they found out that the lot was occupied by a squatter named Juanita
Geronimo and a portion was being used as a passageway by petitioners to and from
Visayas Avenue. Accordingly, the spouses complained about the intrusion into their
property to the Barangay Office. At the barangay conciliation proceeding, petitioners
offered to pay for the use of a portion of Lot 1 as passageway but the Pacione spouses
rejected the offer. When the parties failed to arrive at an amicable settlement, the
spouses started enclosing Lot 1 with a concrete fence.
Petitioners protested the enclosure alleging that their property was bounded on all
sides by residential houses belonging to different owners and had no adequate outlet
and inlet to Visayas Avenue except through the property of the Paciones. As their
protests went unheeded, petitioners instituted an action for easement of right of way
with prayer for the issuance of a temporary restraining order (TRO).
On 3 June 1987 the trial court issued a TRO directing the Pacione spouses to
cease and desist from fencing the disputed property. The Paciones objected arguing
that petitioners were not entitled to a TRO since they showed no valid basis for its
issuance, and that petitioners had no cause of action against respondents because
there were actually two (2) accessible outlets and inlets - a pathway right in front of their
gate leading towards an asphalted 5-meter road to the left, and across an open space
to the right adjacent to respondents lot likewise leading to Visayas Avenue.
At the instance of the parties, the trial court ordered an ocular inspection of the
property. A Board of Commissioners was constituted for that purpose composed of
representatives chosen by the parties, with Deputy Sheriff Florencio D. Dela Cruz, Jr.,
as representative of the court.
On 3 January 1990 Deputy Sheriff Dela Cruz, Jr., submitted his Report [4] relative to
the ocular inspection on the litigated lots -
x x x there is another way from the Visayas Ave. to the plaintiffs lot existing at
the time of the ocular inspection. Plaintiffs can use the street originating from
Visayas Avenue, identified as Ma. Elena St., which is about 2.5 m. in width
and about 150 m. in length up to an intersection, meeting a private road,
which is about 100 meters in length, that ends at the lower portion of the right
side of the adjacent vacant lot previously identified, and at the back of a lot
with concrete fence located at the back of the plaintiffs property. From that
point the plaintiff must enter the adjacent vacant lot (entry to the said lot is still
possible during the ocular inspection because the barbed wires were not
properly placed) to reach a gate at the side of the plaintiffs lot, about 16 m.
from the end of the private road, allegedly used by the plaintiffs before the
adjacent lot was enclosed by barbed wires. According to Atty. Mendoza,
counsel for the defendants, that gate no longer exist(ed) at the time of the
ocular inspection.
As may be observed from the above report, only one outlet was indicated by
Sheriff Dela Cruz, Jr. The other outlet across an open space to the right referred to by
the Pacione spouses was not reflected thereon. However, on the basis of the report as
well as the testimonial and documentary evidence of the parties, the trial court
dismissed the complaint holding that one essential requisite of a legal easement of right
of way was not proved, i.e., the absence of an alternative adequate way or outlet to a
public highway, in this case, Visayas Avenue.[5]
Petitioners appealed to the Court of Appeals arguing that the trial court erred in
finding that they failed to sufficiently establish the essential fact that from their property
no adequate outlet or access to a public highway existed; and, that the conversion
of the Road Lot into two (2) residential lots by Cesar Ledesma, Inc., was violative of PD
No. 957, hence illegal, and the titles issued as a consequence of the conversion were
null and void.
On 16 January 1996 the Court of Appeals rendered its assailed decision affirming
the findings of the trial court -
The burden of proving the existence of the requisites of easement of right of
way lies on the owner of the dominant estate. In the case at bar, plaintiff-
appellants failed to prove that there is no adequate outlet from their property
to a public highway. Convenience of the dominant estate is not a gauge for
the grant of compulsory right of way. The true standard for the grant of the
legal right is adequacy. Hence, when there is already an existing adequate
outlet from the dominant estate to a public highway, as in this case, even if the
outlet, for one reason or another, be inconvenient, the need to open up
another servitude is entirely unjustified. To justify the imposition of an
easement of right of way, there must be real, not fictitious or artificial necessity
for it. A right of way is legally demandable, but the owner of the dominant
estate is not at liberty to impose one based on arbitrary choice. Art. 650 of the
Civil Code provides for the criteria in the establishment of such easement but
it has been settled that the criterion of least prejudicial prevails over shortest
distance. Each case must be weighed according to its individual merits and
judged according to the sound discretion of the court (Costabella Corporation
v. Court of Appeals, G.R. No. 80511, 193 SCRA 333 [1991]).
The second assigned error has no legal leg to stand on since plaintiff-
appellants cannot just introduce a new issue to an already settled one,
especially for the first time on appeal.
Their motion for reconsideration having been denied, petitioners now come to us
with the following assignment of errors: First, the Court of Appeals erred in applying the
doctrine in Costabella, considering that in the instant case the four (4) requisites that
must be complied with by an owner of the dominant estate in order to validly claim a
compulsory right of way have been clearly established by petitioners, contrary to the
Decision appealed from, and that the facts in Costabella are not the same as in the
present case. Second, the Court of Appeals seriously erred in holding that the question
of legality or illegality of the conversion of Road Lot 2 into two (2) residential lots by the
Cesar Ledesma, Inc., is a new issue raised for the first time on appeal, because such
issue appeared in the complaint filed before the trial court.
Quite noticeably, petitioners first assigned error is essentially factual in nature, i.e., it
merely assails the factual findings of both the Court of Appeals and the trial court. Basic
is the rule in this jurisdiction that only questions of law may be raised in a petition for
review under Rule 45 of the 1997 Rules of Civil Procedure. The jurisdiction of the
Supreme Court in cases brought to it from the Court of Appeals is limited to reviewing
errors of law, the findings of fact of the appellate court being conclusive. [6] We have
emphatically declared that it is not the function of this Court to analyze or weigh such
evidence all over again, its jurisdiction being limited to reviewing errors of law that may
have been committed by the lower court. [7]
Petitioners insist that their petition raises a question of law, that is, the correctness
of the appellate courts ruling that one who has an existing passageway, however
inconvenient that passageway may be, is no longer entitled to an easement of right of
way.
We do not agree. Questions of law are those that do not call for any examination of
the probative value of the evidence presented by the parties. [8] In the instant case,
petitioners' assignment of errors would have this Court go over the facts because it
necessarily entails an examination of the evidence and its subsequent re-evaluation to
determine whether petitioners indeed have no sufficient outlet to the highway.
Petitioners next claim that the findings of the appellate court are based on
misapprehension of facts, which circumstance warrants a review of the appellate courts
decision. Yet, they failed to sufficiently demonstrate this allegation in their
pleadings. Absent a clear showing that the findings complained of are totally devoid of
support in the record, or that they are so glaringly erroneous as to constitute serious
abuse of discretion, such findings must stand.
At any rate, even assuming that the first assignment of error may be properly raised
before this Court, we find no reversible error in the assailed decision. To be entitled to a
compulsory easement of right of way, the preconditions provided under Arts. 649 and
650 of the Civil Code must be established. These are: (1) that the dominant estate is
surrounded by other immovables and has no adequate outlet to a public highway; (2)
that proper indemnity has been paid; (3) that the isolation was not due to acts of the
proprietor of the dominant estate; (4) that the right of way claimed is at a point least
prejudicial to the servient estate and, in so far as consistent with this rule, where the
distance from the dominant estate to a public highway may be the shortest.
[9]
The burden of proving the existence of these prerequisites lies on the owner of the
dominant estate.[10]
In the present case, the first element is clearly absent. As found by the trial court
and the Court of Appeals, an outlet already exists, which is a
path walk located at the left side ofpetitioners property and which is connected to a
private road about five hundred (500) meters long. The private road, in turn, leads to
Ma. Elena Street which is about 2.5 meters wide and, finally, to Visayas Avenue. This
outlet was determined by the court a quo to be sufficient for the needs of the dominant
estate, hence petitioners have no cause to complain that they have no adequate outlet
to Visayas Avenue.
Further, no evidence was adduced by petitioners to prove that the easement they
seek to impose on private respondents property is to be established at a point least
prejudicial to the servient estate. For emphasis, Lot 1 is only 164 square meters and an
improvident imposition of the easement on the lot may unjustly deprive private
respondents of the optimum use and enjoyment of their property, considering that its
already small area will be reduced further by the easement. Worse, it may even render
the property useless for the purpose for which private respondents purchased the same.
It must also be stressed that, by its very nature, and when considered with
reference to the obligations imposed on the servient estate, an easement involves an
abnormal restriction on the property rights of the servient owner and is regarded as a
charge or encumbrance on the servient estate. Thus, it is incumbent upon the owner of
the dominant estate to establish by clear and convincing evidence the presence of all
the preconditions before his claim for easement of right of way may be granted.
Petitioners miserably failed in this regard.
On the question of adequacy of the existing outlet, petitioners allege that the path
walk is much longer, circuitous and inconvenient, as from Visayas Avenue one has to
pass by Ma. Elena St., turn right to a private road, then enter a vacant lot, and turn right
again to exit from the vacant lot until one reaches petitioners property.
We find petitioners concept of what is "adequate outlet" a complete disregard of the
well-entrenched doctrine that in order to justify the imposition of an easement of right of
way there must be a real, not fictitious or artificial, necessity for it. Mere convenience for
the dominant estate is not what is required by law as the basis for setting up a
compulsory easement. Even in the face of necessity, if it can be satisfied without
imposing the easement, the same should not be imposed. [11]
Thus, in Ramos v. Gatchalian,[12] this Court disallowed the easement prayed for -
even if petitioner therein "had to pass through lots belonging to other owners, as
temporary ingress and egress, which lots were grassy, cogonal and greatly
inconvenient due to flood and mud" - because it would run counter to the prevailing
jurisprudence that mere convenience for the dominant estate does not suffice to serve
as basis for the easement.
Also, in Floro v. Llenado,[13] we refused to impose an easement
of right of way over petitioners property, although private respondents alternative route
was admittedly inconvenient because he had to traverse several rice lands and rice
paddies belonging to different persons, not to mention that said passage, as found by
the trial court, was impassable during rainy season.
Admittedly, the proposed right of way over private respondents property is the most
convenient, being the shorter and the more direct route to Visayas Avenue. However, it
is not enough that the easement be where the way is shortest. It is more important that
it be where it will cause the least prejudice to the servient estate.[14] As discussed
elsewhere, petitioners failed to sufficiently demonstrate that the proposed right of way
shall be at a point least prejudicial to the servient estate.
The second assignment of error was likewise properly rejected by the appellate
court. Primarily, the issue of legality or illegality of the conversion of the road lot in
question has longbeen laid to rest in LRC Case No. Q-1614[15] which declared with
finality the legality of the segregation subdivision survey plan of the disputed road lot.
Consequently, it is now too late for petitioners to question the validity of the conversion
of the road lot.
Finally, questions relating to non-compliance with the requisites for conversion of
subdivision lots are properly cognizable by the National Housing Authority (NHA), now
the Housing and Land Use Regulatory Board (HLURB), pursuant to Sec. 22 of PD
957[16] and not by the regular courts. Under the doctrine of primary administrative
jurisdiction,[17] where jurisdiction is vested upon an administrative body, no resort to the
courts may be made before such administrative body shall have acted upon the matter.
WHEREFORE, Petition is DENIED. The 16 January 1996 Decision and the 14 June
1996 Resolution of the Court of Appeals denying reconsideration thereof are
AFFIRMED. Costs against petitioners.
SO ORDERED.
Davide, Jr. (Chairman), Vitug, Panganiban and Quisumbing, JJ. concur.
[1]
Penned by Associate Justice Jesus M. Elbinias and concurred in by Associate Justices Ramon U.
Mabutas and Salvador J. Valdez, Jr.
[2]
Judge Celia Lipana-Reyes presiding.
[3]
Docketed as LRC Case No. Q-1614, "Petition for Issuance of Titles and/or Approval of Segregation
Subdivision and Technical Description."
[4]
Annex F and F-1; Rollo, pp. 35-37.
[5]
Rollo, pp. 395-401.
[6]
Remalante v. Tibe, G.R. No. 59514, 25 February 1988, 158 SCRA 138, citing Chan v. Court of Appeals,
No. L-27488, 30 June 1970, 33 SCRA 737.
[7]
Santa Ana, Jr. v. Hernandez, No. L-16394, 17 December 1966, 18 SCRA 973.
[8]
Uniland Resources v. Development Bank of the Philippines, G.R. No. 95909, 16 August 1991, 200
SCRA 751, 755.
[9]
Francisco v. Intermediate Appellate Court, G.R. No. 63996, 15 September 1989, 177 SCRA 527, 533.
[10]
Costabella Corporation v. Court of Appeals, G.R. No. 80511, 25 January 1991, 193 SCRA 333, 340.
[11]
Tolentino, Commentaries and Jurisprudence on the Civil Code of the Philippines, Vo. II, 1992 Ed., pp.
387-388.
[12]
G.R. No. 75905, 12 October 1987, 154 SCRA 703.
[13]
G.R. No. 75723, 2 June 1995, 244 SCRA 713.
[14]
See Quimen v. Court of Appeals, G.R. No. 112331, 29 May 1996.
[15]
See Note 3 and Annex I; Rollo, pp. 56-58.
[16]
"The Subdivision and Condominium Buyers Protective Decree."
Sec. 22. No owner shall charge or alter roads, open spaces, infrastructures, facilities for public use and/or
other form of subdivision developments as contained in the approved subdivision plan and/or represented
in its advertisements, without the permission of the Authority and the written conformity or consent of the
duly organized homeowners association, or in the absence of the latter, by the majority of the lot buyers in
the subdivision.
[17]
Brett v. Intermediate Appellate Court, G.R. No. 74223, 27 November 1990, 191 SCRA 687.
SECOND DIVISION
[G.R. NO. 130845. November 27, 2000]
BRYAN U. VILLANUEVA, petitioner, vs. HON. TIRSO D.C. VELASCO in

his capacity as Presiding Judge of the Regional Trial Court of
Quezon City, Branch 88, JULIO N. SEBASTIAN and SHIRLEY
LORILLA, respondents.
DECISION
QUISUMBING, J.:
This petition for certiorari assails (1) the decision dated December 27, 1996 of the
[1]
Court of Appeals in CA-G.R. SP No. 39166, dismissing petitioners petition for review
under Rule 65 with prayer for the issuance of a cease and desist order and/or
temporary restraining order, and (2) the resolution dated August 14, 1997 denying the
[2]
subsequent motion for reconsideration.

Petitioner Bryan Villanueva is the registered owner of the parcel of land covered by
Transfer Certificate of Title No. 127862 of the Register of Deeds of Quezon City. He
bought it from Pacific Banking Corporation, the mortgagee of said property. The bank
had acquired it from the spouses Maximo and Justina Gabriel at a public auction on
March 19, 1983. When petitioner bought the parcel of land there was a small house on
its southeastern portion. It occupied one meter of the two-meter wide easement of right
of way the Gabriel spouses granted to the Espinolas, predecessors-in-interest of private
respondents, in a Contract of Easement of Right of Way. The pertinent portion of the
contract dated November 28, 1979, states:
. . . in order to have an access to and from their aforementioned land where

their houses are constructed and to have an outlet to Tandang Sora Ave.
which is the nearest public road and the least burdensome to the servient
estate and to third persons, it would be necessary for them to pass
through spouses MAXIMO GABRIEL and JUSTINA CAPUNOs land and for
this purpose, a path or passageway of not less than two (2) meters wide of
said spouses property is necessary for the use of ROMEO, RODOLFO,
NENITA and AURORA ESPINOLA and for all their needs in entering their
property.
xxx
WHEREFORE, in view of the fact that the property of the ESPINOLA had
been bought by them from MAXIMO CAPUNO, father of MAXIMO GABRIEL,
spouses MAXIMO GABRIEL and JUSTINA CAPUNO hereby agree and
permit RODOLFO, ROMEO, NENITA and AURORA ESPINOLA and their
families to have a permanent easement of right of way over the
aforementioned property of said spouses limited to not more than two meters
wide, throughout the whole length of the southeast side of said property and
as specifically indicated in the attached plan which is made an integral part of
this Contract as Annex A;
This Agreement shall be binding between the parties and upon their heirs,
successors, assigns, without prejudice in cases of sale of subject property that
will warrant the circumstances. [3]
Unknown to petitioner, even before he bought the land, the Gabriels had
constructed the aforementioned small house that encroached upon the two-meter
easement. Petitioner was also unaware that private respondents, Julio Sebastian and
Shirley Lorilla, had filed on May 8, 1991, Civil Case No. Q-91-8703, for easement,
damages and with prayer for a writ of preliminary injunction and/or restraining order
against the spouses Gabriel. As successors-in-interest, Sebastian and Lorilla wanted
[4]
to enforce the contract of easement.

On May 15, 1991, the trial court issued a temporary restraining order. On August
13, 1991, it issued a writ of preliminary mandatory injunction ordering the Gabriels to
provide the right of way and to demolish the small house encroaching on the
easement. On August 15, 1991, the Gabriels filed a motion for reconsideration which
was also denied. Thus, they filed a petition for certiorari before the Court of Appeals.
On March 26, 1992, the Eighth Division of the Court of Appeals dismissed the
petition and upheld the RTCs issuances. The decision became final and executory on
July 31, 1992. [5]
On January 5, 1995, Judge Tirso Velasco of the RTC in Quezon City, Branch 88,
issued an Alias Writ of Demolition. On June 20, 1995, the sheriff tried to demolish the
small house pursuant to the writ. Petitioner filed a Third Party Claim with Prayer to
Quash Alias Writ of Demolition. He maintains that the writ of demolition could not apply
to his property since he was not a party to the civil case. His Third Party Claim with
prayer to quash the writ of demolition was denied for lack of merit on August 16, 1995.
The motion for reconsideration as well as the Supplemental Motion for
[6]
Reconsideration dated September 12, 1995 were denied on October 19, 1995. [7]
Petitioner, thereafter, filed a petition for certiorari before the Court of Appeals,
docketed as CA-G.R. SP No. 39166, asserting that the existence of the easement of
right of way was not annotated in his title and that he was not a party to Civil Case No.
Q-91-8703, hence the contract of easement executed by the Gabriels in favor of the
Espinolas could not be enforced against him. The Court of Appeals dismissed the
petition for lack of merit and denied the reconsideration, disposing thus:
WHEREFORE, the instant petition is hereby dismissed by this court for lack of
merit.
No costs considering the failure of private respondents to file their comment,

despite notice. [8]
Hence, this instant petition.

Petitioner now avers that the appellate court erred in declaring,
(1) THAT FOLLOWING THE ESSENCE OF INHERENCE AND
INTRANSMISSIBILITY OF AN EASEMENT, A RIGHT OF WAY CAN EXIST
EVEN IF THEY ARE NOT EXPRESSLY STATED OR ANNOTATED ON THE
TORRENS TITLE;
(2) THAT PETITIONER, AS PROSPECTIVE BUYER, SHOULD HAVE

EXERCISED ORDINARY PRUDENCE BY TAKING THE INITIATIVE TO
DETERMINE THAT AN EASEMENT HAS BEEN CONSTITUTED ON THE
PROPERTY HE INTENDS TO BUY; AND,
(3) THAT IN AS MUCH AS THE HEREIN PETITIONER IS NOT A PARTY TO

CIVIL CASE NO. Q-91-8703, HE CANNOT BE BOUND BY ANY JUDGMENT
OR ORDER RENDERED THEREIN. [9]
Primarily, the issue is whether the easement on the property binds petitioner.
Petitioner argues it could not be enforced against him. First, he says that a right of
way cannot exist when it is not expressly stated or annotated on
the Torrens title. According to him, even if an easement is inherent and inseparable
from the estate to which it actively belongs as provided in Art. 617 of the Civil Code,
the same is extinguished when the servient estate is registered and the easement
[10]
was not annotated in said title conformably with Section 39 of the Land Registration
Law. Second, petitioner points out that the trial court erred when it faulted him for relying
solely on the clean title of the property he bought, as it is well-settled that a person
dealing with registered land is not required to go beyond what is recorded in the title. He
adds that it is private respondents who should have made sure their right of way was
safeguarded by having the same annotated on the title with the Register of Deeds. He
adds that Section 76 of P.D. No. 1529 also requires that when a case is commenced
[11]
involving any right to registered land under the Land Registration Law (now the Property
Registration Decree), any decision on it will only be effectual between or among the
parties thereto, unless a notice of lis pendens of such action is filed and registered in
the registry office where the land is recorded. There was no such annotation in the title
of the disputed land, according to petitioner. Lastly, since he was not a party to Civil
Case No. Q-91-8703, petitioner argues that he cannot be bound by the writ of
demolition and be forcibly divested of a portion of his land without having his day in
court.
Private respondents Sebastian and Lorilla, for their part, adopted the disquisition of
the appellate court as their Comment and asked for the dismissal of the petition and
P100,000.00 in damages. In its decision the appellate court, citing the decision of the
lower court, stressed that unlike other types of encumbrance of real property, a
servitude like a right of way can exist even if they are not expressly stated or annotated
as an encumbrance in a Torrens title because servitudes are inseparable from the
estates to which they actively or passively belong. Moreover, Villanueva was bound
by the contract of easement, not only as a voluntary easement but as
a legal easement. A legal easement is mandated by law, and continues to exists unless
its removal is provided for in a title of conveyance or the sign of the easement is
removed before the execution of the conveyance conformably with Article 649 in [12]
accordance with Article 617 of the Civil Code.

[13]
At the outset, we note that the subject easement (right of way) originally was
voluntarily constituted by agreement between the Gabriels and the Espinolas. But as
correctly observed by the Court of Appeals, the easement in the instant petition is both
(1) an easement by grant or a voluntary easement, and (2) an easement by necessity or
a legal easement. A legal easement is one mandated by law, constituted for public use
or for private interest, and becomes a continuing property right. As a compulsory
[14]
easement, it is inseparable from the estate to which it belongs, as provided for in said
Article 617 of the Civil Code. The essential requisites for an easement to be compulsory
are: (1) the dominant estate is surrounded by other immovables and has no adequate
outlet to a public highway; (2) proper indemnity has been paid; (3) the isolation was not
due to acts of the proprietor of the dominant estate; (4) the right of way claimed is at a
point least prejudicial to the servient estate; and (5) to the extent consistent with the
foregoing rule, where the distance from the dominant estate to a public highway may be
the shortest. The trial court and the Court of Appeals have declared the existence of
[15]
said easement (right of way). This finding of fact of both courts below is conclusive on
this Court, hence we see no need to further review, but only to re-affirm, this
[16]
finding. The small house occupying one meter of the two-meter wide easement
obstructs the entry of private respondents cement mixer and motor vehicle. One meter
is insufficient for the needs of private respondents. It is well-settled that the needs of the
dominant estate determine the width of the easement. Conformably then, petitioner
[17]
ought to demolish whatever edifice obstructs the easement in view of the needs of
private respondents estate.
Petitioners second proposition, that he is not bound by the contract of easement
because the same was not annotated in the title and that a notice of lis pendens of the
complaint to enforce the easement was not recorded with the Register of Deeds, is
obviously unmeritorious. As already explained, it is in the nature of legal easement that
the servient estate (of petitioner) is legally bound to provide the dominant estate (of
private respondents in this case) ingress from and egress to the public highway.
Petitioners last argument that he was not a party to Civil Case No. Q-91-8703 and
that he had not been given his day in court, is also without merit. Rule 39, Sec. 47, of
the Revised Rules of Court:
SEC. 47. Effect of judgments or final orders. The effect of a judgment or final

order rendered by a court of the Philippines, having jurisdiction to pronounce
the judgment or final order, may be as follows:
(a) In case of a judgment or final order against a specific thing, or in respect to

the probate of a will, or the administration of the estate of a deceased person,
or in respect to the personal, political, or legal condition or status of a
particular person or his relationship to another, the judgment or final order is
conclusive upon the title to the thing, the will or administration, or the
condition, status or relationship of the person; however, the probate of a will or
granting of letters of administration shall only be prima facie evidence of the
death of the testator or intestate;
(b) In other cases, the judgment or final order is, with respect to the matter
directly adjudged or as to any other matter that could have been raised in
relation thereto, conclusive between the parties and their successors in
interest by title subsequent to the commencement of the action or
special proceeding, litigating for the same thing and under the same title
and in the same capacity; and
(c) In any other litigation between the same parties or their successors in
interest, that only is deemed to have been adjudged in a former judgment or
final order which appears upon its face to have been so adjudged, or which
was actually and necessarily included therein or necessary
thereto. (Emphasis ours).
Simply stated, a decision in a case is conclusive and binding upon the parties to
said case and those who are their successor in interest by title after said case has been
commenced or filed in court. In this case, private respondents, Julio Sebastian and
[18]
Shirley Lorilla, initiated Civil Case No. Q-91-8703 on May 8, 1991, against the original
[19]
owners, the spouses Maximo and Justina Gabriel. Title in the name of petitioner was
entered in the Register of Deeds on March 24, 1995, after he bought the property from
[20]
the bank which had acquired it from the Gabriels. Hence, the decision in Civil Case No.
Q-91-8703 binds petitioner. For, although not a party to the suit, he is a successor-in-
interest by title subsequent to the commencement of the action in court.
WHEREFORE, the instant petition is DENIED. The assailed decision and resolution
of the Court of Appeals are AFFIRMED. Costs against petitioner.
SO ORDERED.
Bellosillo (Chairman), Mendoza, Buena, and De Leon, Jr., JJ., concur.
[1]
Rollo, pp. 33-39.
[2]
Id. at 40.
[3]
CA Rollo, p. 55.
[4]
Id. at 43.
[5]
CA Records, pp. 80-91.
[6]
Id. at 36.
[7]
Id. at 38-39.
[8]
Rollo, p. 38.
[9]
Id. at 20, 24 and 26.
[10]
Art. 617. Easements are inseparable from the estate to which they actively or passively belong.
Section 76. Notice of lis pendens. No action to recover possession of real estate, or to quiet title
[11]
thereto, or to remove clouds upon the title thereof, or for partition, or other proceedings of any kind in
court directly affecting the title to land or the use or occupation thereof or the building thereon, and no
judgment, and no proceeding to vacate or reverse any judgment, have any effect upon registered
land as against persons other than the parties thereto, unless a memorandum or notice stating the
institution of such action or proceedings and the court wherein the same is pending, as well as the
date of the institution thereof, together with a reference to the number of the certificate of title, and the
adequate description of the land affected and the registered owner thereof, shall have been filed and
registered.
Art. 649. The owner, or any person who by virtue of a real right may cultivate or use any
[12]
immovable, which is surrounded by other immovables pertaining to other persons and without adequate
outlet to a public highway, is entitled to demand a right of way through the neighboring estates, after
payment of the proper indemnity.
Should this easement be established in such a manner that its use may be continuous for all the needs of
the dominant estate, establishing a permanent passage, the indemnity shall consist of the value of the
land occupied and the amount of the damage cause to the servient estate.
In case the right of way is limited to the necessary passage for the cultivation of the estate surrounded by
others and for the gathering of its crops through the servient estate without a permanent way, the
indemnity shall consist in the payment of the damage caused by such encumbrance.
This easement is not compulsory if the isolation of the immovable is due to the proprietors own acts.
[13]
Supra, note 6.
Benedicto vs. Court of Appeals, 25 SCRA 145, 153 (1968). Citing Valicenti v. Schultz, 209 N.Y.S. 2d 33
[14]
(1960).
[15]
Cristobal vs. Court of Appeals, 291 SCRA 122, 129 (1998).
[16]
Villanueva vs. Court of Appeals, 294 SCRA 90, 92-93 (1998).
[17]
Sta. Maria vs. Court of Appeals, 285, SCRA 351, 362 (1998).
[18]
Ayala Corporation vs. Ray Burton Development Corporation, 294 SCRA 48, 65 (1998).
[19]
CA Rollo, p. 43.
[20]
Id. at 40.
FIRST DIVISION

WOODRIDGE SCHOOL, INC., G.R. No. 157285
and MIGUELA JIMENEZ-JAVIER,
SANDOVAL-GUTIERREZ,*
- v e r s u s - CORONA,
AZCUNA and
GARCIA, JJ.
ARB CONSTRUCTION CO., INC.,
Respondent. Promulgated:
February 16, 2007
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
CORONA, J.:
Petitioners Woodridge School, Inc. (Woodridge) and Miguela JimenezJavier

come to us assailing the decision[1] dated September 30, 2002 and
resolution[2] dated February 14, 2003 of the Court of Appeals in CAG.R. CV No.
515333 which, in turn, modified the ruling of the Regional Trial Court (RTC)
of Imus, Cavite awarding P500,000to respondent ARB Construction Co., Inc. (ARB)
as reasonable indemnity for the use of ARBs road lot.[3]

Woodridge is the usufructuary of a parcel of land covered by Transfer
Certificate of Title (TCT) No. T-363902 in the name of spouses Ernesto
T. Matugas and Filomena U. Matugas. Its co-petitioner, Miguela JimenezJavier,
is the registered owner of the adjacent lot under TCT No. T-330688.

On the other hand, ARB is the owner and developer of Soldiers Hills
Subdivision in Bacoor, Cavite, which is composed of four phases. Phase I of the
subdivision was already accessible from the Marcos Alvarez Avenue. To provide
the same accessibility to the residents of Phase II of the subdivision, ARB
constructed the disputed road to link the two phases.

As found by the appellate court, petitioners properties sit right in the

middle of several estates: Phase I of Soldiers Hills Subdivision in the north, a creek
in the east and Green Valley Subdivision the farther east, a road within Soldiers
Hills Subdivision IV which leads to the Marcos Alvarez Avenue in the west and
Phase III of Soldiers Hills Subdivision in the south.

Initially, petitioners offered to pay ARB P50,000 as indemnity for the use of

the road. Adamant, ARB refused the offer and fenced the perimeter of the road
fronting the properties of petitioners. By doing so, ARB effectively cut off
petitioners access to and from the public highway.
After failing to settle the matter amicably, petitioners jointly filed a
complaint[4] in the RTC of Imus, Cavite to enjoin ARB from depriving them of the
use of the disputed subdivision road and to seek a compulsory right of way after
payment of proper indemnity. On November 24, 1995, the trial court rendered its
decision in favor of petitioners:

The reasons why this case is not one for a right of way as an easement are not
difficult to discern.
The questioned road is part and parcel of the road network of Soldiers Hills IV, Phase
II. This road was constructed pursuant to the approved subdivision plan of Soldiers Hills
IV, Phase II. As such, the road has already been withdrawn from the commerce of men
as the ownership of which was automatically vested in the government without need of
any compensation, although it is still registered in the name of the [ARB], the moment
the subdivision plan was approved. While it is not yet donated to the government [,] [it]
is of no moment for donating this road to the government is a mere formality.
Differently stated, the government automatically becomes the owner of the

subdivisions roads the moment the subdivision plan is approved. From that time on,
the roads are withdrawn from the commerce of men even [if] the titles are still
registered in the name of the subdivision owners and the roads are not yet donated to
the government. Thus, the subdivision owner can no longer sell or alienate the roads
for they are already owned by the government; thus, even if [petitioners] want to buy
this road, and the [ARB] wants to sell the same, this transaction cannot materialize for
the above-stated reasons. Accordingly, [ARB] cannot prevent/prohibit plaintiffs from
using the road as the same belongs to the government.
xxx xxx xxx

WHEREFORE, [ARB] is ordered to cease and desist from preventing [petitioners] in using
the subject road or any other road in the subdivision.
xxx xxx xxx
SO ORDERED. [5] (citations omitted)
ARB elevated the case to the Court of Appeals.[6] Finding merit in the appeal, the
appellate court reversed the decision of the lower court. It explained that the
1991 case of White Plains Subdivision[7] did not apply to the present case which
was decided under a different factual milieu:

In the assailed Decision, the Court below relied on the ruling of the Supreme Court in
White Plains Association, Inc. vs. Legaspi (193 SCRA 765). The ruling is not applicable. In
the White Plains case, the disputed area was specifically set aside by the Quezon City
Government, with the concurrence of the owner and developer of the White Plains
Subdivision in Quezon City, for the purpose of constructing a major thoroughfare open
to the general public. The case was filed by the association of homeowners of White
Plains in Quezon City when the owner-developer sought to convert the disputed lot to
residential lots. The Supreme Court initially held that the disputed lot was not longer
within the commerce of men, it having been segregated for a particular purpose, that of
being used as part of a mandatory open space reserved for public use to be improved
into the widened Katipunan Road. It was within this context that the Supreme Court
held that ownership was automatically vested in the Quezon City government and/or
the Republic of the Philippines, without need of paying any compensation.[8]
The appellate court went on to rule that a compulsory right of way exists in favor
of petitioners as [t]here is no other existing adequate outlet to and from
[petitioners] properties to the Marcos Alvarez Avenue other than the subject
existing road lot designated as Lot No. 5827-F-1 belonging to [ARB].[9] In addition,
it awarded P500,000 to ARB as reasonable indemnity for the use of the road lot.

Acting on petitioners motion for reconsideration, the appellate court justified the
monetary award in this manner:

In [o]ur Decision, [w]e awarded the amount of P500,000.00 merely as reasonable
indemnity for the use of the road lot, not the alienation thereof. The amount was based
on equitable considerations foremost of which is that, while there is no alienation to
speak of, the easement is of long-standing, that is, until a shorter and adequate outlet is
established. Moreover, [ARB] should be compensated for the wear and tear that
[petitioners] use of the road would contribute to; it is [ARB] which is solely to be
credited for the completion of the road lot. Going by the conservative valuation of the
Municipality of Bacoor, Cavite presented by [petitioners], the 4,760 sq. m. road lot
would cost P1,904,000 but as stated what is compensated is the use of the road lot not
its alienation.
[Petitioners] original offer cannot be considered a reasonable indemnity, there being a

knotty legal question involved and it is not [ARBs] fault that the parties had to resort to
the courts for a resolution.[10]
Unsatisfied with the ruling of the appellate court, petitioners filed this
petition for review on certiorari insisting that ARB is not entitled to be paid any
indemnity.

Petitioners argue that the contested road lot is a property of public
dominion pursuant to Article 420[11] of the Civil Code. Specifically, petitioners
point out that the disputed road lot falls under the category others of similar
character which is the last clause of Article 420 (1).[12] Hence, it is a property of
public dominion which can be used by the general public without need for
compensation. Consequently, it is wrong for ARB to exclude petitioners from
using the road lot or to make them pay for the use of the same.
We disagree.

In the case of Abellana, Sr. v. Court of Appeals,[13] the Court held that the
road lots in a private subdivision are private property, hence, the local
government should first acquire them by donation, purchase, or expropriation, if
they are to be utilized as a public road.[14] Otherwise, they remain to be private
properties of the owner-developer.

Contrary to the position of petitioners, the use of the subdivision roads by

the general public does not strip it of its private character. The road is not
converted into public property by mere tolerance of the subdivision owner of the
publics passage through it. To repeat, the local government should first acquire
them by donation, purchase, or expropriation, if they are to be utilized as a public
road.[15]

Likewise, we hold the trial court in error when it ruled that the subject road
is public property pursuant to Section 2 of Presidential Decree No. 1216.[16] The
pertinent portion of the provision reads:

Section 2. xxx xxx xxx
Upon their completion as certified to by the Authority, the roads, alleys,

sidewalks and playgrounds shall be donated by the owner or developer to the city
or municipality and it shall be mandatory for the local governments to accept
them provided, however, that the parks and playgrounds may be donated to the
Homeowners Association of the project with the consent of the city or
municipality concerned

The law is clear. The transfer of ownership from the subdivision owner-
developer to the local government is not automatic but requires a positive act
from the owner-developer before the city or municipality can acquire dominion
over the subdivision roads. Therefore, until and unless the roads are donated,
[17]
ownership remains with the owner-developer.[18]

Since no donation has been made in favor of any local government and the
title to the road lot is still registered in the name of ARB, the disputed property
remains private.

This is not to say that ARB may readily exclude petitioners from passing
through the property. As correctly pointed out by the Court of Appeals, the
circumstances clearly make out a case of legal easement of right of way. It is an
easement which has been imposed by law and not by the parties and it has for
(its) object either public use or the interest of private persons.[19]

To be entitled to a legal easement of right of way, the following requisites

must concur: (1) the dominant estate is surrounded by other immovables and has
no adequate outlet to a public highway; (2) payment of proper indemnity; (3) the
isolation was not due to acts of the proprietor of the dominant estate and (4) the
right of way claimed is at the point least prejudicial to the servient estate.[20]

The appellate and trial courts found that the properties of petitioners are
enclosed by other estates without any adequate access to a public highway
except the subject road lot which leads to Marcos Alvarez Avenue. [21] Although it
was shown that the shortest distance from the properties to the highway is
toward the east across a creek, this alternative route does not provide an
adequate outlet for the students of the proposed school. This route becomes
marshy as the creek overflows during the rainy season and will endanger the
students attending the school.

All told, the only requisite left unsatisfied is the payment of proper
indemnity.

Petitioners assert that their initial offer of P50,000 should be sufficient

compensation for the right of way. Further, they should not be held accountable
for the increase in the value of the property since the delay was attributable to
the stubborn refusal of ARB to accept their offer.[22]

Again, we are not persuaded.

In the case of a legal easement, Article 649 of the Civil Code prescribes the
parameters by which the proper indemnity may be fixed. Since the intention of
petitioners is to establish a permanent passage, the second paragraph of Article
649 of the Civil Code particularly applies:

Art 649. xxx xxx xxx
Should this easement be established in such a manner that its use may be continuous
for all the needs of the dominant estate, establishing a permanent passage,
the indemnity shall consist of the value of the land occupied and the amount of the
damage caused to the servient estate. xxx. (Emphasis supplied)

On that basis, we further hold that the appellate court erred
in arbitrarily awarding indemnity for the use of the road lot.

The Civil Code categorically provides for the measure by which the proper
indemnity may be computed: value of the land occupied plus the amount of the
damage caused to the servient estate. Settled is the rule in statutory construction
that when the law is clear, the function of the courts is simple application. [23] Thus,
to award the indemnity using factors different from that given by the law is a
complete disregard of these clear statutory provisions and is evidently arbitrary.
This the Court cannot countenance. The Civil Code has clearly laid down the
parameters and we cannot depart from them. Verba legis non est recedendum.

Having settled the legal issues, we order the remand of this case to the trial
court for reception of evidence and determination of the limits of the property to
be covered by the easement, the proper indemnity to be paid and the respective
contributions of petitioners.

For the guidance of the trial court, the fact that the disputed road lot is
used by the general public may be taken in consideration to mitigate the amount
of damage that the servient estate is entitled to, in the sense that the wear and
tear of the subject road is not entirely attributable to petitioners.

WHEREFORE, this petition is partially GRANTED. The September 30, 2002
Decision and February 14, 2003 resolution of the Court of Appeals in CAG.R. CV
No. 515333 are ANNULLED and SET ASIDE in so far as petitioners are ordered to
pay an indemnity of P500,000. The case is hereby remanded to the trial court for
reception of evidence and determination of the limits of the property to be
covered by the easement, the proper indemnity to be paid and the respective
contributions of petitioners.

SO ORDERED.

RENATO C. CORONA
Associate Justice

WE CONCUR:

REYNATO S. PUNO
Chief Justice
Chairperson

(No Part)
ANGELINA SANDOVAL-GUTIERREZ ADOLFO S. AZCUNA


CANCIO C. GARCIA
Associate Justice

CERTIFICATION

conclusions in the above decision had been reached in consultation before the
case was assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNO
Chief Justice
*
No part. Justice Sandoval-Gutierrez inhibited herself from participating in the deliberations of this case.
[1]
Penned by Associate Justice Portia Alio-Hormachuelos and concurred in by Associate Justices Elvi John S.
Asuncion and Juan Q. Enriquez, Jr. of the Tenth Division of the Court of Appeals; rollo, pp. 46-56.
[2]
Penned by Associate Justice Portia Alio-Hormachuelos and concurred in by Associate Justices Elvi John S.
Asuncion and Juan Q. Enriquez, Jr. of the Tenth Division of the Court of Appeals; id., pp. 58-60.
[3]
CA Decision supra note 1, at 55.
[4]
Docketed as Civil Case No. BCV-93-6.
[5]
RTC Decision dated November 24, 1995, rollo, pp. 73, 77-78.
[6]
Docketed as CA-G.R. CV No. 515333.
[7]
White Plains Association, Inc v. Legaspi, G.R. No. 95522, 7 February 1991, 193 SCRA 765.
[8]
CA Decision supra note 1, at 52.
[9]
Id., at 55.
[10]
CA Resolution supra note 2, at 59-60.
[11]
Art. 420. The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and
bridges constructed by the State, banks, shores, roadsteads, and others of similar
character;
(2) Those which belong to the State, without being for public use, and are intended for
some public service or for the development of the national wealth.
[12]
Petition, rollo, pp. 12, 27.
[13]
G.R. No. 100749, 24 April 1992, 208 SCRA 316.
[14]
Id., at 319.
[15]
Id.
[16]
RTC Decision supra note 5.
[17]
Note that subdivision roads may also be purchased or expropriated by the local government unit, thereby
converting them into public property.
[18]
White Plains Association v. Court of Appeals, G.R. No. 128131, 8 October 1998, 297 SCRA 547.
[19]
Article 634, Civil Code.
[20]
Costabella Corporation v. Court of Appeals, G.R. No. 80511, 25 January 1991, 193 SCRA 333, 339.
[21]
CA Decision supra note 1, at 55; RTC Decision supra note 5, at 75.
[22]
Petitioners Memorandum, rollo, pp. 87-88.
[23]
AB Leasing and Finance Corporation v. Commissioner of Internal Revenue, 453 Phil. 297 (2003).
FIRST DIVISION
[G.R. No. 95252. September 5, 1997]
LA VISTA ASSOCIATION, INC., petitioner, vs. COURT OF APPEALS,

SOLID HOMES, INC., ATENEO DE MANILA UNIVERSITY,
ROMULO VILLA, LORENZO TIMBOL, EMDEN ENCARNACION,
VICENTE CASIO, JR., DOMINGO REYES, PEDRO C. MERCADO,
MARIO AQUINO, RAFAEL GOSECO, PORFIRIO CABALU, JR.
and ANTONIO ADRIANO, in their behalf and in behalf of the
residents of LOYOLA GRAND VILLAS, INC., PHASES I AND
II, respondents.
DECISION
BELLOSILLO, J.:
MANGYAN ROAD is a 15-meter wide thoroughfare in Quezon City abutting

Katipunan Avenue on the west, traversing the edges of La Vista Subdivision on the
north and of the Ateneo de Manila University and Maryknoll (now Miriam) College on
the south. Mangyan Road serves as the boundary between LA VISTA on one side and
ATENEO and MARYKNOLL on the other. It bends towards the east and ends at the
gate of Loyola Grand Villas Subdivision. The road has been the subject of an endless
dispute, the disagreements always stemming from this unresolved issue: Is there an
easement of right-of-way over Mangyan Road?
In resolving this controversy, the Court would wish to write finis to this seemingly
interminable debate which has dragged on for more than twenty years.
The area comprising the 15-meter wide roadway was originally part of a vast tract of
land owned by the Tuasons in Quezon City and Marikina. On 1 July 1949 the Tuasons
sold to Philippine Building Corporation a portion of their landholdings amounting to
1,330,556 square meters by virtue of a Deed of Sale with Mortgage. Paragraph three
(3) of the deed provides that x x x the boundary line between the property herein sold
and the adjoining property of the VENDORS shall be a road fifteen (15) meters wide,
one-half of which shall be taken from the property herein sold to the VENDEE and the
other half from the portion adjoining belonging to the VENDORS.
On 7 December 1951 the Philippine Building Corporation, which was then acting for
and in behalf of Ateneo de Manila University (ATENEO) in buying the properties from
the Tuasons, sold, assigned and formally transferred in a Deed of Assignment with
Assumption of Mortgage, with the consent of the Tuasons, the subject parcel of land to
ATENEO which assumed the mortgage. The deed of assignment states -
The ASSIGNEE hereby agrees and assumes to pay the mortgage obligation on the
above-described land in favor of the MORTGAGOR and to perform any and all terms
and conditions as set forth in the Deed of Sale with Mortgage dated July 1, 1949,
hereinabove referred to, which said document is incorporated herein and made an
integral part of this contract by reference x x x x
On their part, the Tuasons developed a part of the estate adjoining the portion sold
to Philippine Building Corporation into a residential village known as La Vista
Subdivision. Thus the boundary between LA VISTA and the portion sold to Philippine
Building Corporation was the 15-meter wide roadway known as the Mangyan Road.
On 6 June 1952 ATENEO sold to MARYKNOLL the western portion of the land
adjacent to Mangyan Road. MARYKNOLL then constructed a wall in the middle of the
15-meter wide roadway making one-half of Mangyan Road part of its school
campus. The Tuasons objected and later filed a complaint before the then Court of First
Instance of Rizal for the demolition of the wall. Subsequently, in an amicable settlement,
MARYKNOLL agreed to remove the wall and restore Mangyan Road to its original width
of 15 meters.
Meanwhile, the Tuasons developed its 7.5-meter share of the 15-meter wide
boundary. ATENEO deferred improvement on its share and erected instead an adobe
wall on the entire length of the boundary of its property parallel to the 15-meter wide
roadway.
On 30 January 1976 ATENEO informed LA VISTA of the formers intention to
develop some 16 hectares of its property along Mangyan Road into a subdivision. In
response, LA VISTA President Manuel J. Gonzales clarified certain aspects with regard
to the use of Mangyan Road. Thus -
x x x The Mangyan Road is a road fifteen meters wide, one-half of which is taken
from your property and the other half from the La Vista Subdivision. So that the
easement of a right-of-way on your 7 1/2 m. portion was created in our favor and
likewise an easement of right-of-way was created on our 7 1/2 portion of the road in
your favor (paragraph 3 of the Deed of Sale between the Tuasons and the Philippine
Building Corporation and Ateneo de Manila dated 1 July 1949 x x x x
On 28 April 1976 LA VISTA President Manuel J. Gonzales, in a letter to ATENEO

President Fr. Jose A. Cruz, S. J., offered to buy under specified conditions the property
ATENEO was intending to develop. One of the conditions stipulated by the LA VISTA
President was that [i]t is the essence of the offer that the mutual right of way between
the Ateneo de Manila University and La Vista Homeowners Association will be
extinguished. The offer of LA VISTA to buy was not accepted by ATENEO. Instead, on
10 May 1976 ATENEO offered to sell the property to the public subject to the condition
that the right to use the 15-meter roadway will be transferred to the vendee who will
negotiate with the legally involved parties regarding the use of such right as well as the
development costs for improving the access road.
LA VISTA became one of the bidders. However it lost to Solid Homes, Inc., in the
bidding. Thus on 29 October 1976 ATENEO executed a Deed of Sale in favor of Solid
Homes, Inc., over parcels of land covering a total area of 124,424 square meters
subject, among others, to the condition that -
7. The VENDOR hereby passes unto the VENDEE, its assigns and successors-in-
interest the privileges of such right of way which the VENDOR acquired, and still
has, by virtue of the Deeds mentioned in the immediately preceeding paragraph
hereof; provided, that the VENDOR shall nonetheless continue to enjoy said right of
way privileges with the VENDEE, which right of way in favor of the VENDOR shall
be annotated on the pertinent road lot titles. However it is hereby agreed that the
implementation of such right of way shall be for the VENDEEs sole responsibility
and liability, and likewise any development of such right of way shall be for the full
account of the VENDEE. In the future, if needed, the VENDOR is therefore free to
make use of the aforesaid right of way, and/or Mangyan Road access, but in such a
case the VENDOR shall contribute a pro-rata share in the maintenance of the area.
Subsequently, Solid Homes, Inc., developed a subdivision now known as Loyola

Grand Villas and together they now claim to have an easement of right-of-way along
Mangyan Road through which they could have access to Katipunan Avenue.
LA VISTA President Manuel J. Gonzales however informed Solid Homes, Inc., that
LA VISTA could not recognize the right-of-way over Mangyan Road because, first,
Philippine Building Corporation and its assignee ATENEO never complied with their
obligation of providing the Tuasons with a right-of-way on their 7.5-meter portion of the
road and, second, since the property was purchased for commercial purposes, Solid
Homes, Inc., was no longer entitled to the right-of-way as Mangyan Road was
established exclusively for ATENEO in whose favor the right-of-way was originally
constituted. LA VISTA, after instructing its security guards to prohibit agents and
assignees of Solid Homes, Inc., from traversing Mangyan Road, then constructed one-
meter high cylindrical concrete posts chained together at the middle of and along the
entire length of Mangyan Road thus preventing the residents of LOYOLA from passing
through.
Solid Homes, Inc., complained to LA VISTA but the concrete posts were not
removed. To gain access to LOYOLA through Mangyan Road an opening through the
adobe wall of ATENEO was made and some six (6) cylindrical concrete posts of LA
VISTA were destroyed. LA VISTA then stationed security guards in the area to prevent
entry to LOYOLA through Mangyan Road.
On 17 December 1976, to avert violence, Solid Homes, Inc., instituted the instant
case, docketed as Civil Case No. Q-22450, before the then Court of First Instance of
Rizal and prayed that LA VISTA be enjoined from preventing and obstructing the use
and passage of LOYOLA residents through Mangyan Road. LA VISTA in turn filed a
third-party complaint against ATENEO. On 14 September 1983 the trial court issued a
preliminary injunction in favor of Solid Homes, Inc. (affirming an earlier order of 22
November 1977), directing LA VISTA to desist from blocking and preventing the use of
Mangyan Road. The injunction order of 14 September 1983 was however nullified and
set aside on 31 May 1985 by the then Intermediate Appellate Court in AC-G.R. SP No.
[1]
02534. Thus in a petition for review on certiorari, docketed as G.R. No. 71150, Solid
Homes, Inc., assailed the nullification and setting aside of the preliminary injuntion
issued by the trial court.
Meanwhile, on 20 November 1987 the Regional Trial Court of Quezon City
rendered a decision on the merits in Civil Case No. Q-22450 affirming and recognizing
[2]
the easement of right-of-way along Mangyan Road in favor of Solid Homes, Inc., and
ordering LA VISTA to pay damages thus -
ACCORDINGLY, judgment is hereby rendered declaring that an easement of a right-

of-way exists in favor of the plaintiff over Mangyan Road, and, consequently, the
injunction prayed for by the plaintiff is granted, enjoining thereby the defendant, its
successors-in-interest, its/their agents and all persons acting for and on its/their behalf,
from closing, obstructing, preventing or otherwise refusing to the plaintiff, its
successors-in-interest, its/their agents and all persons acting for and on its/their behalf,
and to the public in general, the unobstructed ingress and egress on Mangyan Road,
which is the boundary road between the La Vista Subdivision on one hand, and the
Ateneo de Manila University, Quezon City, and the Loyola Grand Villas Subdivision,
Marikina, Metro Manila, on the other; and, in addition the defendant is ordered to pay
the plaintiff reasonable attorneys fees in the amount of P30,000.00. The defendant-
third-party plaintiff is also ordered to pay the third-party defendant reasonable
attorneys fees for another amount of P15,000.00. The counter-claim of the defendant
against the plaintiff is dismissed for lack of merit. With costs against the defendant.
Quite expectedly, LA VISTA appealed to the Court of Appeals, docketed as CA-

G.R. CV No. 19929. On 20 April 1988 this Court, taking into consideration the 20
November 1987 Decision of the trial court, dismissed the petition docketed as G.R. No.
71150 wherein Solid Homes, Inc., sought reversal of the 31 May 1985 Decision in AC-
G.R. SP No. 02534 which nullified and set aside the 14 September 1983 injunction
order of the trial court. There we said -
Considering that preliminary injunction is a provisional remedy which may be granted

at any time after the commencement of the action and before judgment when it is
established that the plaintiff is entitled to the relief demanded and only when his
complaint shows facts entitling such reliefs (Section 3(a), Rule 58) and it appearing
that the trial court had already granted the issuance of a final injunction in favor of
petitioner in its decision rendered after trial on the merits (Sections 7 & 10, Rule 58,
Rules of Court), the Court resolved to Dismiss the instant petition having been
rendered moot and academic. An injunction issued by the trial court after it has
already made a clear pronouncement as to the plaintiffs right thereto, that is, after the
same issue has been decided on the merits, the trial court having appreciated the
evidence presented, is proper, notwithstanding the fact that the decision rendered is
not yet final (II Moran, pp. 81-82, 1980 ed.). Being an ancillary remedy, the
proceedings for preliminary injunction cannot stand separately or proceed
independently of the decision rendered on the merit of the main case for
injunction. The merit of the main case having been already determined in favor of the
applicant, the preliminary determination of its non-existence ceases to have any force
and effect.[3]
On the other hand, in CA-G.R. CV No. 19929, several incidents were presented for
resolution: two (2) motions filed by Solid Homes, Inc., to cite certain officers of LA
VISTA for contempt for alleged violation of the injunction ordaining free access to and
egress from Mangyan Road, to which LA VISTA responded with its own motion to cite
Solid Homes, Inc., for contempt; a motion for leave to intervene and to re-open
Mangyan Road filed by residents of LOYOLA; and, a petition praying for the issuance of
a restraining order to enjoin the closing of Mangyan Road. On 21 September 1989 the
incidents were resolved by the Court of Appeals thus -
[4]
1. Defendant-appellant La Vista Association, Inc., its Board of Directors and other

officials and all persons acting under their orders and in their behalf are ordered to
allow all residents of Phase I and II of Loyola Grand Villas unobstructed right-of-way
or passage through the Mangyan Road which is the boundary between the La Vista
Subdivision and the Loyola Grand Villas Subdivision;
2. The motion to intervene as plaintiffs filed by the residents of Loyola Grand Villas
Subdivision is GRANTED; and
3. The motions for contempt filed by both plaintiff-appellee and defendant-appellant

are DENIED.
This resolution is immediately executory. [5]
On 15 December 1989 both motions for reconsideration of Solid Homes, Inc., and
LA VISTA were denied. In separate petitions, both elevated the 21 September 1989 and
15 December 1989 Resolutions of the Court of Appeals to this Court. The petition of
Solid Homes, Inc., docketed as G.R. No. 91433, prayed for an order directing the
appellate court to take cognizance of and hear the motions for contempt, while that of
LA VISTA in G.R. No. 91502 sought the issuance of a preliminary injunction to order
Solid Homes, Inc., ATENEO and LOYOLA residents to desist from intruding into
Mangyan Road.
On 22 May 1990, pending resolution of G.R. Nos. 91433 and 91502, the Second
Division of the Court of Appeals in CA-G.R. CV No. 19929 affirmed in toto the Decision
[6]
of the trial court in Civil Case No. Q-22450. On 6 September 1990 the motions for
reconsideration and/or re-raffle and to set the case for oral argument were denied. In
view of the affirmance of the Decision by the Court of Appeals in CA-G.R. CV No.
19929 this Court dismissed the petition in G.R. No. 91502 for being moot as its main
concern was merely the validity of a provisional or preliminary injunction earlier
issued. We also denied the petition in G.R. No. 91433 in the absence of a discernible
grave abuse of discretion in the ruling of the appellate court that it could not entertain
the motions to cite the parties for contempt because a charge of contempt committed
against a superior court may be filed only before the court against whom the contempt
has been committed (Sec. 4, Rule 71, Rules of Court). [7]
Consequently we are left with the instant case where petitioner LA VISTA assails
the Decision of respondent Court of Appeals affirming in toto the Decision of the trial
court which rendered a judgment on the merits and recognized an easement of right-of-
way along Mangyan Road, permanently enjoining LA VISTA from closing to Solid
Homes, Inc., and its successors-in-interest the ingress and egress on Mangyan Road.
In its first assigned error, petitioner LA VISTA argues that respondent appellate
court erred in disregarding the decisions in (a) La Vista Association, Inc., v. Hon. Ortiz,
affirmed by this Court in Tecson v. Court of Appeals; (b) La Vista Association, Inc., v.
[8] [9]
Hon. Leviste, affirmed by this Court in Rivera v. Hon. Intermediate Appellate Court;
[10]
and, (c) La Vista v. Hon. Mendoza, and in holding that an easement of right-of-way
[11] [12]
over Mangyan Road exists. [13]
We do not agree with petitioner. The reliance of petitioner on the cited cases is out
of place as they involve the issuance of a preliminary injunction pending resolution of a
case on the merits. In the instant case, however, the subject of inquiry is not merely the
issuance of a preliminary injunction but the final injunctive writ which was issued after
trial on the merits. A writ of preliminary injunction is generally based solely on initial and
incomplete evidence. The opinion and findings of fact of a court when issuing a writ of
preliminary injunction are interlocutory in nature and made even before the trial on the
merits is terminated. Consequently there may be vital facts subsequently presented
during the trial which were not obtaining when the writ of preliminary injunction was
issued. Hence, to equate the basis for the issuance of a preliminary injunction with that
for the issuance of a final injunctive writ is erroneous. And it does not necessarily mean
that when a writ of preliminary injunction issues a final injunction follows. Accordingly,
respondent Court of Appeals in its assailed Decision rightly held that -
We are unswayed by appellants theory that the cases cited by them in their Brief
(pages 17 and 32) and in their motion for early resolution (page 11, Rollo) to buttress
the first assigned error, are final judgments on the merits of, and therefore res
judicata to the instant query. It is quite strange that appellant was extremely cautious
in not mentioning this doctrine but the vague disquisition nevertheless points to this
same tenet, which upon closer examination negates the very proposition. Generally, it
is axiomatic that res judicata will attach in favor of La Vista if and when the case
under review was disposed of on the merits and with finality (Manila Electric Co., vs.
Artiaga, 50 Phil. 144; 147; S. Diego vs. Carmona, 70 Phil. 281; 283; cited in
Comments on the Rules of Court, by Moran, Volume II, 1970 edition, page
365; Roman Catholic Archbishop vs. Director of Lands, 35 Phil. 339; 350-351, cited
in Remedial Law Compendium, by Regalado, Volume I, 1986 Fourth revised Edition,
page 40). Appellants suffer from the mistaken notion that the merits of
the certiorari petitions impugning the preliminary injunction in the cases cited by it
are tantamount to the merits of the main case, subject of the instant appeal. Quite the
contrary, the so-called final judgments adverted to dealt only with the propriety of the
issuance or non-issuance of the writ of preliminary injunction, unlike the present
recourse which is directed against a final injunctive writ under Section 10, Rule
58. Thus the invocation of the disputed matter herein is misplaced. [14]
We thus repeat what we said in Solid Homes, Inc., v. La Vista which respondent
[15]
Court of Appeals quoted in its assailed Decision -

[16]
Being an ancillary remedy, the proceedings for preliminary injunction cannot stand
separately or proceed independently of the decision rendered on the merits of the main
case for injunction. The merits of the main case having been already determined in
favor of the applicant, the preliminary determination of its non-existence ceases to
have any force and effect.
Petitioner LA VISTA in its lengthy Memorandum also quotes our ruling in Ramos,
Sr., v. Gatchalian Realty, Inc., no less than five (5) times -
[17] [18]
To allow the petitioner access to Sucat Road through Gatchalian Avenue inspite of a
road right-of-way provided by the petitioners subdivision for its buyers simply
because Gatchalian Avenue allows petitioner a much greater ease in going to and
coming from the main thoroughfare is to completely ignore what jurisprudence has
consistently maintained through the years regarding an easement of a right-of-way,
that mere convenience for the dominant estate is not enough to serve as its basis. To
justify the imposition of this servitude, there must be a real, not a fictitious or
artificial, necessity for it (See Tolentino, Civil Code of the Philippines, Vol. II, 2nd
ed., 1972, p. 371)
Again this is misplaced. Ramos, Sr., v. Gatchalian Realty, Inc., concerns a legal or

[19]
compulsory easement of right-of-way -
Since there is no agreement between the contending parties in this case granting a
right-of-way by one in favor of the other, the establishment of a voluntary easement
between the petitioner and the respondent company and/or the other private
respondents is ruled out. What is left to examine is whether or not petitioner is entitled
to a legal or compulsory easement of a right-of-way -
which should be distinguished from a voluntary easement. A legal or compulsory

easement is that which is constituted by law for public use or for private interest. By
express provisions of Arts. 649 and 650 of the New Civil Code, the owner of an estate
may claim a legal or compulsory right-of-way only after he has established the existence
of four (4) requisites, namely, (a) the estate is surrounded by other immovables and is
without adequate outlet to a public highway; (b) after payment of the proper indemnity;
(c) the isolation was not due to the proprietors own acts; and, (d) the right-of-way
claimed is at a point least prejudicial to the servient estate, and insofar as consistent
the shortest. A voluntary easement on the other hand is constituted simply by will or
[20]
agreement of the parties.

From the facts of the instant case it is very apparent that the parties and their
respective predecessors-in-interest intended to establish an easement of right-of-way
over Mangyan Road for their mutual benefit, both as dominant and servient
estates. This is quite evident when: (a) the Tuasons and the Philippine Building
Corporation in 1949 stipulated in par. 3 of their Deed of Sale with Mortgage that the
boundary line between the property herein sold and the adjoining property of the
VENDORS shall be a road fifteen (15) meters wide, one-half of which shall be taken
from the property herein sold to the VENDEE and the other half from the portion
adjoining belonging to the vendors; (b) the Tuasons in 1951 expressly agreed and
consented to the assignment of the land to, and the assumption of all the rights and
obligations by ATENEO, including the obligation to contribute seven and one-half
meters of the property sold to form part of the 15-meter wide roadway; (c) the Tuasons
in 1958 filed a complaint against MARYKNOLL and ATENEO for breach of contract and
the enforcement of the reciprocal easement on Mangyan Road, and demanded that
MARYKNOLL set back its wall to restore Mangyan Road to its original width of 15
meters, after MARYKNOLL constructed a wall in the middle of the 15-meter wide
roadway; (d) LA VISTA President Manuel J. Gonzales admitted and clarified in 1976, in
a letter to ATENEO President Fr. Jose A. Cruz, S.J., that Mangyan Road is a road
fifteen meters wide, one-half of which is taken from your property and the other half
from the La Vista Subdivision. So that the easement of a right-of-way on your 7 1/2 m.
portion was created in our favor and likewise an easement of right-of-way was created
on our 7 1/2 m. portion of the road in your favor; (e) LA VISTA, in its offer to buy the
hillside portion of the ATENEO property in 1976, acknowledged the existence of the
contractual right-of-way as it manifested that the mutual right-of-way between the
Ateneo de Manila University and La Vista Homeowners Association would be
extinguished if it bought the adjacent ATENEO property and would thus become the
owner of both the dominant and servient estates; and, (f) LA VISTA President Luis G.
Quimson, in a letter addressed to the Chief Justice, received by this Court on 26 March
1997, acknowledged that one-half of the whole length of (Mangyan Road) belongs to La
Vista Assn., Inc. The other half is owned by Miriam (Maryknoll) and the Ateneo in equal
portions;
These certainly are indubitable proofs that the parties concerned had indeed
constituted a voluntary easement of right-of-way over Mangyan Road and, like any
other contract, the same could be extinguished only by mutual agreement or by
renunciation of the owner of the dominant estate. Thus respondent Court of Appeals did
not commit a reversible error when it ruled that -
Concerning the pivotal question posed herein on the existence of an easement, we are
of the belief, and thus hereby hold that a right-of-way was properly appreciated along
the entire route of Mangyan Road.Incidentally, the pretense that the court a quo erred
in holding that Mangyan Road is the boundary road between La Vista and Ateneo
(page 31, Appellants Brief) does not raise any critical eyebrow since the same is
wholly irrelevant to the existence of a servitude thereon from their express admission
to the contrary (paragraph 1, Answer).
Ones attention should rather be focused on the contractual stipulations in the deed of
sale between the Tuason Family and the Philippine Building Corporation (paragraph
3, thereof) which were incorporated in the deed of assignment with assumption of
mortgage by the Philippine Building Corporation in favor of Ateneo (first paragraph,
page 4 of the deed) as well as in the deed of sale dated October 24, 1976 when the
property was ultimately transferred by Ateneo to plaintiff-appellee. Like any other
contractual stipulation, the same cannot be extinguished except by voluntary
rescission of the contract establishing the servitude or renunciation by the owner of
the dominant lots (Chuanico vs. Ibaez, 7 CA Reports, 2nd Series, 1965 edition, pages
582; 589, cited in Civil Law Annotated, by Padilla, Volume II, 1972 Edition,
pages602-603), more so when the easement was implicitly recognized by the letters of
the La Vista President to Ateneo dated February 11 and April 28, 1976 (page 22,
Decision; 19 Ruling Case Law 745).
The free ingress and egress along Mangyan Road created by the voluntary agreement
between Ateneo and Solid Homes, Inc., is thus legally demandable (Articles 619 and
625, New Civil Code) with the corresponding duty on the servient estate not to
obstruct the same so much so that -
When the owner of the servient tenement performs acts or constructs works impairing
the use of the servitude, the owner of the dominant tenement may ask for the
destruction of such works and the restoration of the things to their condition before the
impairment was committed, with indemnity for damages suffered (3 Sanchez Roman
609). An injunction may also be obtained in order to restrain the owner of the servient
tenement from obstructing or impairing in any manner the lawful use of the servitude
(Resolme v. Lazo, 27 Phil. 416; 417; 418). (Commentaries and Jurisprudence on the
Civil Code of the Philippines, by Tolentino, Volume 2, 1963 edition, page 320) [21]
Resultantly, when the court says that an easement exists, it is not creating one. For,
even an injunction cannot be used to create one as there is no such thing as a judicial
easement.As in the instant case, the court merely declares the existence of an
easement created by the parties. Respondent court could not have said it any better -
It must be emphasized, however, that We are not constituting an easement along

Mangyan Road, but merely declaring the existence of one created by the manifest will
of the parties herein in recognition of autonomy of contracts (Articles 1306 and 619,
New Civil Code; Tolentino, supra, page 308; Civil Code of the Philippines, by Paras,
Volume II, 1984 edition, page 549). [22]
The argument of petitioner LA VISTA that there are other routes to LOYOLA from
Mangyan Road is likewise meritless, to say the least. The opening of an adequate outlet
to a highway can extinguish only legal or compulsory easements, not voluntary
easements like in the case at bar. The fact that an easement by grant may have also
qualified as an easement of necessity does not detract from its permanency as a
property right, which survives the termination of the necessity.[23]
That there is no contract between LA VISTA and Solid Homes, Inc., and thus the
court could not have declared the existence of an easement created by the manifest will
of the parties, is devoid of merit. The predecessors-in-interest of both LA VISTA and
Solid Homes, Inc., i.e., the Tuasons and the Philippine Building Corporation,
respectively, clearly established a contractual easement of right-of-way over Mangyan
Road. When the Philippine Building Corporation transferred its rights and obligations to
ATENEO the Tuasons expressly consented and agreed thereto. Meanwhile, the
Tuasons themselves developed their property into what is now known as LA VISTA. On
the other hand, ATENEO sold the hillside portions of its property to Solid Homes, Inc.,
including the right over the easement of right-of-way. In sum, when the easement in this
case was established by contract, the parties unequivocally made provisions for its
observance by all who in the future might succeed them in dominion.
The contractual easement of right-of-way having been confirmed, we find no reason
to delve on the issue concerning P.D. No. 957 which supposedly grants free access to
any subdivision street to government or public offices within the subdivision. In the
instant case, the rights under the law have already been superseded by the voluntary
easement of right-of-way.
Finally, petitioner questions the intervention of some LOYOLA residents at a time
when the case was already on appeal, and submits that intervention is no longer
permissible after trial has been concluded. Suffice it to say that in Director of Lands v.
Court of Appeals, we said -
[24]
It is quite clear and patent that the motions for intervention filed by the movants at this
stage of the proceedings where trial has already been concluded, a judgment thereon
had been promulgated in favor of private respondent and on appeal by the losing party
x x x the same was affirmed by the Court of Appeals and the instant petition for
certiorari to review said judgment is already submitted for decision by the Supreme
Court, are obviously and manifestly late, beyond the period prescribed under x x
x Section 2, Rule 12 of the Rules of Court (now Sec. 2, Rule 19, 1997 Rules of Civil
Procedure).
But Rule 12 of the Rules of Court, like all other Rules therein promulgated, is simply
a rule of procedure, the whole purpose and object of which is to make the powers of
the Court fully and completely available for justice. The purpose of procedure is not
to thwart justice. Its proper aim is to facilitate the application of justice to the rival
claims of contending parties. It was created not to hinder and delay but to facilitate
and promote the administration of justice. It does not constitute the thing itself which
courts are always striving to secure to litigants. It is designed as the means best
adopted to obtain that thing. In other words, it is a means to an end.
The denial of the motions for intervention arising from the strict application of the
Rule due to alleged lack of notice to, or the alleged failure of, movants to act
seasonably will lead the Court to commit an act of injustice to the movants, to their
successors-in-interest and to all purchasers for value and in good faith and thereby
open the door to fraud, falsehood and misrepresentation, should intervenors claims be
proven to be true.
After all, the intervention does not appear to have been filed to delay the
proceedings. On the contrary, it seems to have expedited the resolution of the case as
the incidents brought forth by the intervention, which could have been raised in another
case, were resolved together with the issues herein resulting in a more thorough
disposal of this case.
WHEREFORE, the Decision of respondent Court of Appeals dated 22 May 1990
and its Resolution dated 6 September 1990, which affirmed the Decision of the RTC-Br.
89, Quezon City, dated 20 November 1987, are AFFIRMED.
SO ORDERED.
Vitug, Kapunan, and Hermosisima, Jr., JJ., concur.
[1]
Decision penned by Justice Simeon M. Gopengco, concurred in by Justices Lino M. Patajo and Jose
Racela,Jr.
[2]
Decision penned by Judge Rodolfo A. Ortiz, RTC-Br. 89, Quezon City.
[3]
Resolution of 20 April 1988, G.R. No. 71150, p. 2.
[4]
Resolution penned by Justice Santiago M. Kapunan (now a member of this Court), concurred in by
Justices Lorna S. Lombos-De la Fuente and Minerva G. Reyes.
[5]
See Resolution of 4 March 1992 in G.R. Nos. 91433 and 91502, pp. 3-4.
[6]
Decision penned by Justice Jose A. R. Melo (now a member of this Court), concurred in by Justices
Antonio M. Martinez and Filemon H. Mendoza.
[7]
See Resolution of the Court of Appeals in CA-G.R. CV No. 19929, 21 September 1989, p. 7.
[8]
CA-G.R. No. 02534, 31 May 1985.
[9]
G.R. No. 89283, 23 August 1989.
[10]
CA-G.R. SP No. 03083, 6 January 1996.
[11]
G.R. No. 74249, 20 January 1989, 169 SCRA 307.
[12]
CA-G.R. SP No. 16410, 22 May 1989.
[13]
Memorandum of Petitioner, p. 18.
[14]
CA- G.R. CV No. 19929, 22 May 1990, pp. 9-10.
[15]
G.R. No. 71150, 20 April 1988.
[16]
Id., pp. 12-13.
[17]
G.R. No. 75905, 12 October 1987, 154 SCRA 703, 712.
[18]
Memorandum of Petitioner, pp. 21-22, 25, 29-30, 32-33, 45.
[19]
See Note 17, p. 710.
[20]
Vda. de Baltazar v. Court of Appeals, G.R. No. 106082, 27 June 1995, 245 SCRA 333, citing Locsin v.
Climaco, No. L-27319, 31 January 1969, 26 SCRA 816 and Angela Estate v. CFI of Negros
Occidental, L-27084, 31 July 1968, 24 SCRA 500, 510.
[21]
CA-G.R. CV No. 19929, 22 May 1990, pp. 11-12.
[22]
Id., p. 13.
[23]
Benedicto v. Court of Appeals, No. L-22733, 25 September 1968, 25 SCRA 145.
[24]
No. L-45168, 25 September 1979, 93 SCRA 238, 245-246.

SECOND DIVISION

REPUBLIC OF G.R. No. 160656
THE PHILIPPINES(Department of Public
Works and Highways), Present:

Petitioner,
CARPIO,
CARPIO MORALES,*
- versus - TINGA, and
VELASCO, JR., JJ.

ISMAEL ANDAYA, Promulgated:
Respondent.
June 15, 2007

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
QUISUMBING, J.:
This is a petition for review of the Decision[1] dated October 30, 2003 of the

Court of Appeals in CA-G.R. CV No. 65066 affirming with modification the
Decision[2] of the Regional Trial Court of Butuan City, Branch 33 in Civil Case No.
4378, for enforcement of easement of right-of-way (or eminent domain).
Respondent Ismael Andaya is the registered owner of two parcels of land in

Bading, Butuan City. His ownership is evidenced by Transfer Certificates of Title
Nos. RT-10225 and RT-10646. These properties are subject to a 60-meter wide
perpetual easement for public highways, irrigation ditches, aqueducts, and other
similar works of the government or public enterprise, at no cost to the
government, except only the value of the improvements existing thereon that
may be affected.
Petitioner Republic of the Philippines (Republic) negotiated with Andaya to
enforce the 60-meter easement of right-of-way. The easement was for concrete
levees and floodwalls for Phase 1, Stage 1 of the Lower Agusan Development
Project. The parties, however, failed to reach an agreement.
On December 13, 1995, the Republic instituted an action before

the Regional Trial Court of Butuan City to enforce the easement of right-of-way
or eminent domain. The trial court issued a writ of possession on April 26, 1996.[3] It
also constituted a Board of Commissioners (Board) to determine the just
compensation. Eventually, the trial court issued an Order of Expropriation upon
payment of just compensation.[4] Later, the Board reported that there was a
discrepancy in the description of the property sought to be expropriated. The
Republic thus amended its complaint, reducing the 60-meter easement to 10
meters, or an equivalent of 701 square meters.
On December 10, 1998, the Board reported that the project would affect a total
of 10,380 square meters of Andayas properties, 4,443 square meters of which will
be for the 60-meter easement. The Board also reported that the easement would
diminish the value of the remaining 5,937 square meters. As a result, it
recommended the payment of consequential damages amounting to P2,820,430
for the remaining area.[5]
Andaya objected to the report because although the Republic reduced the
easement to 10 meters or an equivalent of 701 square meters, the Board still
granted it 4,443 square meters. He contended that the consequential damages
should be based on the remaining area of 9,679 square meters. Thus, the just
compensation should be P11,373,405. The Republic did not file any comment,
opposition, nor objection.
After considering the Boards report, the trial court decreed on April 29,
1999, as follows:
WHEREFORE, in the light of the foregoing, the Court decides as follows:
a) That the plaintiff is legally entitled to its inherent right of expropriation to,
viz.: 1) the lot now known as lot 3291-B-1-A, portion of lot 3291-B-1, (LRC)
Psd-255693, covered by TCT No. RT-10225, with an area of 288 sq. m.; and
2) the lot now known as lot 3293-F-5-B-1, portion of lot 3293-F-5-B (LRC)
Psd-230236, covered by TCT No. RT-10646, with an area of 413 sq. m., both
of the Butuan City Registry of Deeds, it being shown that it is for public use
and purpose --- free of charge by reason of the statutory lien of easement of
right-of-way imposed on defendants titles;
b) That however, the plaintiff is obligated to pay defendant the sum of TWO
MILLION EIGHT HUNDRED TWENTY THOUSAND FOUR HUNDRED THIRTY
(P2,820,430.00) PESOS as fair and reasonable severance damages;
c) To pay members of the Board of Commissioners, thus: for the chairman ---
TWENTY THOUSAND (P20,000.00) PESOS and the two (2) members at
FIFTEEN THOUSAND (P15,000.00) PESOS each;
d) To pay defendants counsel FIFTY THOUSAND (P50,000.00) PESOS as

Attorneys fees; and finally,
e) That the Registry of Deeds of Butuan City is also directed to effect the

issuance of Transfer Certificate of Titles for the aforementioned two (2) lots
in the name of the Republic of the Philippines, following the technical
description as appearing in pages 6, 7, and 8 of the Commissioners Report.
NO COSTS.
[6]
IT IS SO ORDERED.
Both parties appealed to the Court of Appeals. The Republic contested the

awards of severance damages and attorneys fees while Andaya demanded just
compensation for his entire property minus the easement. Andaya alleged that
the easement would prevent ingress and egress to his property and turn it into a
catch basin for the floodwaters coming from the Agusan River. As a result, his
entire property would be rendered unusable and uninhabitable. He thus
demanded P11,373,405 as just compensation based on the total compensable
area of 9,679 square meters.
The Court of Appeals modified the trial courts decision by imposing a 6%

interest on the consequential damages from the date of the writ of possession or
the actual taking, and by deleting the attorneys fees.
Hence, the instant petition. Simply put, the sole issue for resolution may be
stated thus: Is the Republic liable for just compensation if in enforcing the legal
easement of right-of-way on a property, the remaining area would be rendered
unusable and uninhabitable?
It is undisputed that there is a legal easement of right-of-way in favor of the

Republic. Andayas transfer certificates of title[7] contained the reservation that the
lands covered thereby are subject to the provisions of the Land Registration
Act[8] and the Public Land Act.[9] Section 112[10] of the Public Land Act provides that
lands granted by patent shall be subject to a right-of-way not exceeding 60
meters in width for public highways, irrigation ditches, aqueducts, and other
similar works of the government or any public enterprise, free of charge, except
only for the value of the improvements existing thereon that may be affected. In
view of this, the Court of Appeals declared that all the Republic needs to do is to
enforce such right without having to initiate expropriation proceedings and
without having to pay any just compensation.[11] Hence, the Republic may
appropriate the 701 square meters necessary for the construction of the
floodwalls without paying for it.
We are, however, unable to sustain the Republics argument that it is not

liable to pay consequential damages if in enforcing the legal easement on
Andayas property, the remaining area would be rendered unusable and
uninhabitable. Taking, in the exercise of the power of eminent domain, occurs not
only when the government actually deprives or dispossesses the property owner
of his property or of its ordinary use, but also when there is a practical destruction
or material impairment of the value of his property.[12] Using this standard, there
was undoubtedly a taking of the remaining area of Andayas property. True, no
burden was imposed thereon and Andaya still retained title and possession of the
property. But, as correctly observed by the Board and affirmed by the courts a
quo, the nature and the effect of the floodwalls would deprive Andaya of the
normal use of the remaining areas. It would prevent ingress and egress to the
property and turn it into a catch basin for the floodwaters coming from
the Agusan River.
For this reason, in our view, Andaya is entitled to payment of just

compensation, which must be neither more nor less than the monetary
equivalent of the land.[13] One of the basic principles enshrined in our Constitution
is that no person shall be deprived of his private property without due process of
law; and in expropriation cases, an essential element of due process is that there
must be just compensation whenever private property is taken for public
use. Noteworthy, Section 9, Article III of our Constitution mandates that private
property shall not be taken for public use without just compensation.[14]
Finally, we affirm the findings of the Court of Appeals and the trial court
that just compensation should be paid only for 5,937 square meters of the total
area of 10,380 square meters. Admittedly, the Republic needs only a 10-meter
easement or an equivalent of 701 square meters. Yet, it is also settled that it is
legally entitled to a 60-meter wide easement or an equivalent of 4,443 square
meters. Clearly, although the Republic will use only 701 square meters, it should
not be liable for the 3,742 square meters, which constitute the difference
between this area of 701 square meters and the 4,443 square meters to which it
is fully entitled to use as easement, free of charge except for damages to affected
existing improvements, if any, under Section 112 of the Public Land Act.
In effect, without such damages alleged and proved, the Republic is liable for
just compensation of only the remaining areas consisting of 5,937 square meters,
with interest thereon at the legal rate of 6% per annum from the date of the writ of
possession or the actual taking until full payment is made. For the purpose of
determining the final just compensation, the case is remanded to the trial court. Said
court is ordered to make the determination of just compensation payable to
respondent Andaya with deliberate dispatch.
WHEREFORE, the Decision of the Court of Appeals dated October 30, 2003 in CA-

G.R. CV No. 65066, modifying the Decision of
the Regional Trial Court of Butuan City, Branch 33 in Civil Case No. 4378,
is AFFIRMED with MODIFICATION as herein set forth.
The case is hereby REMANDED to the Regional Trial Court of Butuan City, Branch
33 for the determination of the final just compensation of the compensable area
consisting of 5,937 square meters, with interest thereon at the legal rate of 6%
per annum from the date of the writ of possession or actual taking until fully paid.
SO ORDERED.
Associate Justice
WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
(On official leave)

DANTE O. TINGA
Associate Justice
A T T E S T A T I O N
Courts Division.

Associate Justice
Chairperson
CERTIFICATION


REYNATO S. PUNO
Chief Justice
*
On official leave.
[1]
Rollo, pp. 22A-34. Penned by Associate Justice Juan Q. Enriquez, Jr., with Associate Justices Roberto A. Barrios
and Hakim S. Abdulwahid concurring.
[2]
Records, pp. 208-212. Penned by Judge Victor A. Tomaneng.
[3]
Id. at 31-32.
[4]
Id. at 127.
[5]
Report of the Board of Commissioners in Civil Case No. 4378, pp. 32-33.
[6]
[7]
Id. at 9-12, 15-17.
[8]
Act No. 496, superseded by Presidential Decree No. 1529, known as the Property Registration Decree.
[9]
AN ACT TO AMEND AND COMPILE THE LAWS RELATIVE TO LANDS OF THE PUBLIC DOMAIN
(Com Act No. 141, as amended). Amended by Presidential Decree No. 635 (effective January 7, 1975).
[10]
SEC. 112. Said land shall further be subject to a right-of-way not exceeding sixty (60) meters in width for public
highways, railroads, irrigation ditches, aqueducts, telegraph and telephone lines, and similar works as the
Government or any public or quasi-public service or enterprise, including mining or forest concessionaires, may
reasonably require for carrying on their business, with damages for the improvements only.
xxxx
[11]
Rollo, p. 29.
[12]
Republic v. Court of Appeals, G.R. No. 147245, March 31, 2005, 454 SCRA 516, 536; Ansaldo v. Tantuico, Jr.,
G.R. No. 50147, August 3, 1990, 188 SCRA 300, 304.
[13]
National Power Corporation v. Manubay Agro-Industrial Development Corporation, G.R. No. 150936, August
18, 2004, 437 SCRA 60, 67-68.
[14]
Republic v. Lim, G.R. No. 161656, June 29, 2005, 462 SCRA 265, 278.

Supreme Court
Manila

THIRD DIVISION

NATIVIDAD FIGURACION, G.R. NO. 155688
FILMA F. RABOR and CATHERINE
MANALASTAS,
Petitioners,
Present:
YNARES-SANTIAGO, J.,
Chairperson,
- versus - AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
NACHURA, and
REYES, JJ.
SPOUSES CRESENCIANO and
AMELITA LIBI, Promulgated:
Respondents. November 28, 2007
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION

AUSTRIA-MARTINEZ, J.:

By way of a Petition for Review on Certiorari under Rule 45 of the Rules of

Court, Natividad Figuracion, Filma Rabor and Catherine Manalastas (petitioners)
assail the March 20, 2002 Decision[1] of the Court of Appeals (CA) in CA-G.R. CV
No. 68799, affirming the February 23, 2000 Decision[2] of the Regional Trial
Court (Branch 22), Cebu City (RTC) in Civil Case No. CEB-21193; and CA
Resolution[3] dated August 20, 2002.
The facts are of record.
Galileo Figuracion was the owner of Lot No. 899-D-2 situated in Cebu City.

[4]
Sometime in 1948, the Cebu City government (Cebu City) expropriated Lot No.
899-D-2, consisting of 474 sq. m. and turned the same into a portion
of N. Escario Street,[5] connecting
the Capitol Building to Gorordo Avenue and U.P. Junior
College. Cebu City paid P23,700.00 for Lot No. 899-D-2[6] and was issued TCT No.
49454.[7]
In Resolution No. 330,[8] dated March 20, 1989,

the Cebu City Sangguniang Panlungsod approved
the reconveyance to Isagani Figuracion, successor-in-interest of
Galileo Figuracion, of an unused portion of Lot No. 899-D-2, designated as Lot No.
899-D-2-A (subject lot), consisting of 84 sq. m. On the basis thereof, Cebu City
Mayor Tomas Osmena (Mayor Osmena) executed in favor of Isagani Figuracion a
deed of sale[9] dated April 12, 1989 over the subject lot for the price
of P40,000.00. TCT No. 49454 in the name of Cebu City was canceled,[10] and in
lieu thereof, TCT No. 113746[11] was issued in the name of Isagani Figuracion, and
TCT No. 113747, in the name of Cebu City,[12]over the remaining portion of Lot No.
899-D-2.
Upon resurvey over two years later, it was ascertained that the subject lot
actually measures 130 sq. m.[13] Accordingly,
the Sangguniang Panlungsod of Cebu City amended Resolution No. 330 by issuing
Resolution No. 2345,[14] approving the reconveyance of 130 sq. m. of Lot No. 899-
D-2, and Mayor Osmena executed in favor of IsaganiFiguracion an amended deed
of sale dated January 24, 1992 over said portion for P65,000.00.[15] TCT No.
113746 and TCT No. 113747 were canceled, and in lieu thereof, TCT No.
122369[16] was issued on September 30, 1992 to Isagani Figuracion.
It appearing that herein respondents had been using the subject lot, and refused
to vacate it despite demand, petitioners, as successors-in-interest
of Isagani Figuracion, filed against respondents a complaint for unlawful detainer,
docketed as Civil Case No. R-34287 in the Municipal Trial Court (MTC), Branch
2, Cebu City.
The MTC rendered a decision on June 26, 1995, declaring petitioners entitled to
possession of the subject lot and ordering respondents to remove the fence they
had constructed.[17]
The MTC decision was affirmed by the RTC (Branch 19), Cebu City in its January
15, 1996 Decision[18] in Civil Case No. CEB-1778, which, in turn, was upheld by
the CA in its April 30, 1996 Decision[19] in CA-G.R. SP No. 39631.
Undaunted, respondents filed against petitioners a complaint for easement,

docketed in the RTC as Civil Case No. CEB21193, praying that they (respondents)
be granted a right of way over the subject lot.[20] However, respondents twice
amended their complaint[21] to implead Cebu City, and shifted to a different cause
of action -- that is, from one for the establishment of an easement of right of way
over the subject lot to one for the annulment of a) Resolutions No. 330 and No.
2345, b) the January 24, 1992 deed of sale in favor of Isagani Figuracion, and c)
TCT No. 122309, and the payment of damages.
In its Answer,[22] Cebu City defended the reconveyance to Isagani Figuracion of the

subject lot considering that it was not utilized in the construction
of N. Escario Street and had long been vacant.
Petitioners filed their own Answer,[23] pointing out that the complaint in Civil Case
No. CEB-21193 is barred by the June 26, 1995 MTC decision in Civil Case No. R-
34287, as affirmed by the RTC and CA. They also challenged respondents legal
standing to question the Sangguniang Panlungsod resolutions.
After trial, the RTC in Civil Case No. CEB-21193 rendered the following decision:

WHEREFORE, in view of all foregoing, judgment is hereby rendered declaring resolution
Nos. 330 and 2345 of the Sangguniang Panlungsod ng Cebu, Deed of Sale, Amended
Deed of Sale, and TCT No. 122309 as null and void.

SO ORDERED.[24]
It does not appear in the records that Cebu City appealed. Respondents also did
not appeal from the denial of their claim for damages, attorneys fees and costs.
Only petitioners appealed to the CA which, in its March 20, 2002

Decision, affirmed the RTC decision.[25]

The CA also denied petitioners motion for reconsideration.
And so, petitioners recourse to this Court on the following grounds:
I. The honorable Court of Appeals erred in not ruling that the present complaint is
barred by res judicata or conclusiveness of judgment in Civil Case No. R-34287 and that
the respondents are guilty of forum shopping;
II. The honorable Court of Appeals erred in declaring resolution nos. 330 and 2345, the
deed of sale and the amended deed of sale and TCT No. 122309 as null and void;
III. The honorable Court of Appeals erred in not ruling that respondents do not have the
legal capacity to sue;

IV. The honorable court of appeals erred in not ruling that the present action is barred
by laches and prescription;
V. The honorable Court of Appeals erred in not awarding damages in favor of petitioners
as prayed for in their counterclaim.[26]
The Court grants the petition. The Second Amended Complaint in Civil Case No.
CEB-21193 should have been dismissed by the trial court.
The third issue on the legal standing of respondents to institute Civil Case No.
CEB-21193 is primordial.
On that issue, the RTC held:

Private defendants [petitioners herein] further claim that as private citizens and as
ordinary taxpayers, the plaintiffs [respondents herein] have no legal capacity to question
the reconveyance of Lot No. 899-D-2 [sic] by defendants City of Cebu to the private
defendants.
This is not so. In the case of Dacanay v. Asistio, Jr., et al., 208 SCRA 404, it was
categorically ruled by the Supreme Court that:
WHEREFORE, it having been established that the petitioner and the

general public have a legal right to the relief demanded and that the
public respondents have the corresponding duty, arising from public
office, to clear the city streets and restore them to their specific public
purpose (Enriquez vs. Bidin, 47 SCRA 183; City of Manila vs. Garcia et al.,
19 SCRA 413 citing Unson vs. Lacson, 100 Phil. 695), the respondents
City Mayor and City Engineer of Caloocan City or their successors in
office are hereby ordered to immediately enforce and implement the
decision in Civil Case No. C-1292 declaring that Heroes del '96, V. Gozon,
and Gonzales Streets are public streets for public use, and they are
ordered to remove or demolish, or cause to be removed or demolished,
the market stalls occupying said city streets with utmost dispatch within
thirty (30) days from notice of this decision. This decision is
immediately executory.[27]
The CA agreed:

In accordance with the abovementioned concepts, Spouses Libi cannot be considered
not to have the legal capacity to sue for lack of interest, being real parties in interest of
the property subject of litigation. Indeed, Spouses Libi stand to be benefited or injured
by the judgment in the case at bar considering that the 130-square meter portion
appropriated to Isagani Figuracion is necessary for their (Spouses Libis) ingress [from]
and egress to Escario Street.[28]
Both courts are mistaken. They approached the issue from the wrong perspective,
in the process losing sight of three important facts:
First, based on their second amended complaint, what respondents seek is the
annulment of TCT No. 122309, Resolutions No. 330 and 2345, as well as the deed
of sale and amended deed of sale of the subject lot between Cebu City and
petitioners.
Second, while respondents are seeking the cancellation of TCT No. 122309, they
are not themselves claiming title to or right of possession of the subject lot. It
must be emphasized that in their second amended complaint, they even
abandoned their demand for a right of way over the property.
Finally, the subject lot was part of Lot No. 899-D-2 which Cebu City expropriated
for the construction of a city street.
From the foregoing facts, it is readily apparent that respondents were not the
real-parties-in-interest to institute Civil Case No. CEB-21193 for annulment of TCT
No. 122309.
In a case for annulment of title, the plaintiff must allege two essential facts: (1)
that plaintiff was the owner of the land, and (2) that the defendant illegally
dispossessed the plaintiff of the property. Absent either of these allegations, the
plaintiff is considered not the proper party to cause the cancellation of the title of
the defendant.[29]
In their second amended complaint, respondents as plaintiffs unequivocally

alleged:

5. That when the plaintiff [respondents herein] bought lot no. 899-D-1, they did so in the
belief that they had an outlet to Escario Street through lot no. 899-D-2 owned by
defendant City of Cebu and covered by T.C.T. No. 49454 which is a road lot as shown by
the following annotation on said title xxx.

6. Lot No. 899-D-2 being a road lot, cannot be the subject of sale, as it is outside the
commerce of man xxx.[30]

In their prayer, respondents sought neither ownership nor possession of the
subject lot but only cancellation of the private title of petitioners over the
property on the ground that this is part of a public road.[31]

Clearly, respondents have no interest in the title or possession of Lot No. 899-D-2-
A. The situation would have been different had respondents maintained their
demand for a right of way over the property. But as the records disclose, they
abandoned this demand. Respondents, therefore, are not at all the proper parties
to file for annulment of petitioners' title.

Moreover, in essence and effect, Civil Case No. CEB-21193 is actually for reversion
of the subject lot, as a portion of Lot No. 899-D-2, to the public domain.
Reversion is a proceeding by which the State seeks the return of lands of the
public domain or the improvements thereon through the cancellation of private
title erroneously or fraudulently issued over it.[32] The one crucial element which
sets it apart from all other actions involving possession or title to property is the
positive averment in the complaint of state ownership of the property in dispute.
[33]
In a similar situation in East Asia Traders, Inc. v. Republic of the Philippines,[34] we

held:

We reviewed very carefully respondents allegations in its complaint. In a nutshell,
respondent alleged that the defendants (herein petitioner and its predecessors-in-
interest) procured their lot [which] is inalienable because the DENR investigation
disclosed that it was intended by the government for the construction of a national
road; that defendants titles are null and void and should be cancelled and, therefore, Lot
4355 should be reverted to the State. These allegations are sufficient to constitute a
cause of action for reversion. (Emphasis supplied)

Even the decisions of the RTC and the CA were ultimately for reversion of the
subject lot to the dominion of Cebu City. In declaring null and void Resolutions
No. 330 and No. 2345 of the Sangguniang Panlungsod of Cebu, the deed of sale,
the amended deed of sale, and TCT No. 122309 issued in the name of petitioners,
both courts virtually restored to Cebu City title over the subject lot; only, they
omitted ordering the reinstatement of TCT No. 49454 in the name
of Cebu City. Furthermore, in not granting the claim of respondents for payment
of damages for the alleged demolition of their structures on the subject lot, the
lower courts did not recognize the right of respondents to erect and maintain
structures on said property.
The cause of action involved in Civil Case No. CEB-21193 being, in reality, one for
reversion of public land, respondents cannot be considered the proper parties
therein
In VSC Commercial Enterprises, Inc. v. Court of Appeals,[35] the Court had occasion

to identify the real party in interest in an action for reversion:
Under Rule 3, Section 2 of the Revised Rules of Court, a real party in interest is defined
as the party who stands to be benefited or injured by the judgment in the suit, or the
party entitled to the avails of the suit. Interest within the meaning of the rule means
material interest, an interest in issue and to be affected by the decree, as
distinguished from mere interest in the question involved, or a mere incidental
interest. The interest of the party must also be personal and not one based on a desire
to vindicate the constitutional right of some third and unrelated party. Real interest,
on the other hand, means a present substantial interest, as distinguished from a mere
expectancy or a future, contingent, subordinate, or consequential interest.
In the case at bar, the private respondents are mere lessees of the property in
question. As such, they have no present substantial and personal interest with respect
to issues involving ownership of the disputed property. The only interest they have, in
the event that petitioners title over the subject property is cancelled and ownership
reverts to the State, is the hope that they become qualified buyers of the subject parcel
of land. Undoubtedly, such interest is a mere expectancy. Even the private respondents
themselves claim that in case of reversion of ownership to the State, they only have
pre-emptive rights to buy the subject property; that their real interest over the said
property is contingent upon the governments consideration of their application as
buyers of the same. It is settled that a suit filed by a person who is not a party in
interest must be dismissed.[36] (Emphasis supplied)
The Court stressed in VSC that real interest means a substantial interest; as

distinguished from mere expectancy, or a future, contingent, subordinate, or
consequential interest.[37]
Applied to the present case, herein respondents are not even lessees of the
subject lot; they do not claim to have been occupying the property in any
capacity. Their sole interest is in the use of the property as access
to Escario Street. Such interest is merely tangential to any issue regarding the
ownership and possession of the property; hence, it is not sufficient to vest in
respondents legal standing to sue for reversion of the property. If at all, their
cause of action is only for an easement of right of way over it. This was what they
initially sought when they filed their original complaint. Unfortunately, they
abandoned such cause of action when they failed to allege the same in their
Second Amended Complaint. Under Section 8, Rule 10, Rules of Court, an
amended complaint supersedes an original one. The original complaint is deemed
withdrawn and no longer considered part of the record.[38]
Respondents having no real interest in the subject lot under their Second
Amended Complaint, they have no legal personality to file the action for reversion
of public land.[39] It is not merely a rule of procedure but a requirement of law that
reversion be instituted in the name of the Republic of the Philippines. Section 101
of the Public Land Act is categorical:

Section 101. All actions for the reversion to the government of lands of the public
domain or improvements thereon shall be instituted by the Solicitor General or the
officer acting in his stead, in the proper courts, in the name of the Commonwealth [now
Republic] of the Philippines.
In fine, the RTC acted without jurisdiction when it entertained the Second
Amended Complaint of respondents even when the latter was not a real party-in-
interest. The February 23, 2000 Decision rendered by the RTC was an utter
nullity, without legal effect or binding force whatsoever, even upon
defendant Cebu City which does not appear on record to have appealed from it.
[40]
But then, it would be all too pointless to merely set aside all the proceedings in
this case to make way for the proper filing of a case for reversion -- such
recourse will only throw the parties back to a state of limbo, their resources
exhausted in litigations and counter-litigations; and worse, keep the subject lot
mired in controversy, utterly useless to the parties for another number of years.
Considering that all the pleadings and records are with the Court, it is urgent that
we settle here and now the question on the validity of the reconveyance of the
subject lot by Cebu City to petitioners.

Lot No. 899-D-2-A, being part of Lot No. 899-D, which was expropriated
by Cebu City for the construction of N. Escario Street, is property of the public
domain, the reconveyance of which is subject to strict legal requirements.
Foremost among the requirements is that the public property sought to
be reconveyed be alienable.

As a general rule, local roads used for public service are considered public
property under the absolute control of Congress; hence, local governments have
no authority to control or regulate their use.[41] However, under Section 10,
Chapter II of the Local Government Code,[42] Congress delegated to political
subdivisions some control of local roads, viz.:
Section 21. Closure and Opening of Roads. (a) A local government unit may, pursuant to
an ordinance, permanently or temporarily close or open any local road, alley, park, or
square falling within its jurisdiction: Provided, however, That in case of permanent
closure, such ordinance must be approved by at least two-thirds (2/3) of all the
members of the Sanggunian, and when necessary, an adequate substitute for the public
facility that is subject to closure is provided.
(b) No such way or place or any part thereof shall be permanently closed without
making provisions for the maintenance of public safety therein. A property thus
permanently withdrawn from public use may be used or conveyed for any purpose
for which other real property belonging to the local government unit concerned
may be lawfully used or conveyed: Provided, however, That no freedom park
shall be closed permanently without provision for its transfer or relocation to a
new site.
Moreover, through the Revised Charter of Cebu City (Republic Act No. 3857),

[43]
Congress specifically delegated to said political subdivision the following
authority to regulate its city streets:
Section 31. Legislative powers. Any provision of law and executive orders to the
contrary notwithstanding, the City Council shall have the following legislative
powers:
(34) To provide for the laying out, construction, improvement and maintenance,
including lighting, cleaning, and sprinkling of streets, avenues, boulevards, alleys,
sidewalks, wharves, piers, parks, cemeteries, and other public places, and to
regulate the use thereof; to provide for the construction and maintenance and
regulate the use of bridges, viaducts and culverts; to close any city road, street,
alley, boulevard, avenue, park or square. Property thus withdrawn from public
servitude may be used or conveyed for any purpose for which other real
property belonging to the city may be lawfully used or conveyed.(Emphasis
supplied).
The other requirement for a valid reconveyance is that it be established that the

former owner or his successors-in-interest, petitioners in this case, have the right to
repurchase said property. As we explained in Fery v. Municipality of Cabanatuan:
[44]
The question presented by the petitioner and demurrer is this: When private land is
expropriated for a particular public use, and that particular public use is abandoned,
does the land so expropriated return to its former owner?

The answer to that question depends upon the character of the title acquired by the
expropriator, whether it be the State, a province, a municipality, or a corporation which
has the right to acquire property under the power of eminent domain. If, for example,
land is expropriated for a particular purpose, with the condition that when that
purpose is ended or abandoned the property shall return to its former owner, then, of
course, when the purpose is terminated or abandoned the former owner reacquires
the property so expropriated. If, for example, land is expropriated for a public street
and the expropriation is granted upon condition that the city can only use it for a public
street, then, of course, when the city abandons its use as a public street, it returns to
the former owner, unless there is some statutory provisions to the contrary. Many other
similar examples might be given. If, upon the contrary, however, the decree of
expropriation gives to the entity a fee simple title, then, of course, the land becomes
the absolute property of the expropriator, whether it be the State, a province, or
municipality, and in that case the non-user does not have the effect of defeating the
title acquired by the expropriation proceedings. (10 R.C.L., 240, sec. 202; 20 C.J.,
1234, secs. 593-599, and numerous cases cited; Reichling vs.Covington Lumber Co., 57
Wash., 225; 135 Am. St. Rep., 976; McConlihay vs. Wright, 121 U.S., 201.) (Emphasis
supplied.)

The enunciated rule in Fery is still controlling to this day.

However, in Moreno v. Mactan-Cebu International Airport Authority,[45] we

clarified that where there is preponderant evidence of the existence of a right to
repurchase, the former owner of an expropriated property is entitled to exercise
such option once the public purpose for which the local government initially
intended the expropriated property is abandoned or not pursued.

Further elucidating on the right of the former owner to repurchase the

expropriated property, we held in Mactan-Cebu International Airport Authority v.
Court of Appeals,[46]Reyes v. National Housing Authority[47] and Air Transportation
Office v. Gopuco, Jr.,[48] that where there is insufficient evidence that the former
owners of expropriated properties were granted the right to repurchase the same,
the latter may not insist on recovering their properties even when the public
purpose for which said properties were expropriated is abandoned.

It should be emphasized that in all the foregoing four cases, the government
contested the right of the former owners to repurchase the expropriated
properties; and the former owners utterly failed to prove, by preponderant
evidence, the existence of the right to repurchase said properties.

In the present case, there exists no doubt that Cebu City repudiated its

right to use the subject lot for other public purpose; and instead, recognized the
right of the former owner or his successor-in-interest to repurchase the same.

In exercise of its discretion to declare a city street or part thereof abandoned,

the Cebu City council unanimously issued Resolutions No. 330 and No. 2345,
declaring the subject lot vacant and available for conveyance. Respondents
themselves acknowledge that the subject lot was not included in the construction
of Escario Street.

The wisdom and intent of these Resolutions cannot be gainsaid. Through the
Resolutions, Cebu City ineluctably recognized the right of petitioners, as
successors-in-interest of the former owner, to repurchase the subject lot. The
Resolutions, issued by the city government in exercise of its regular and official
functions, constitute clear and positive evidence of the intention of Cebu City to
return or reconvey to the former owner or his successor-in-interest, by way of
sale, the portion of the expropriated property that is no longer needed for the
purpose for which it was intended.
All said, respondents not only lacked the legal personality to institute Civil Case
No. CEB-21193; they also have no legal basis to challenge the reconveyance of Lot
No. 899-D-2-A by Cebu City to petitioners for Resolutions No. 330 and 2345 of
the Sangguniang Panlungsod of Cebu, the deed of sale and amended deed of sale
between Cebu City and petitioners, and TCT No. 122309 which were all validly
issued in favor of respondents.

With the foregoing disquisition, we dispense with the discussion of the remaining
issues raised by petitioners.

WHEREFORE, the petition is GRANTED. The March 20, 2002 Decision and August
20, 2002 Resolution of the Court of Appeals, as well as the February 23,
2000 Decision of the Regional Trial Court, are ANNULLED and SET ASIDE. The
complaint in Civil Case No. CEB-21193 is DISMISSED.

Costs against respondents.
SO ORDERED.

MA. ALICIA AUSTRIA-MARTINEZ
Associate Justice

WE CONCUR:

CONSUELO YNARES-SANTIAGO
Associate Justice
Chairperson, Third Division

MINITA V. CHICO-NAZARIO ANTONIO EDUARDO B. NACHURA

RUBEN T. REYES
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified that
the conclusions in the above Decision had been reached in consultation before the

Acting Chief Justice

[1]
Penned by Associate Justice Rebecca de Guia-Salvador with the concurrence of Associate
Justices Eugenio S. Labitoria and Teodoro P. Regino; rollo, p. 56.
[2]
Rollo, p. 36.
[3]
Id. at 77.
[4]
Exh. 1, records, p. 122.
[5]
Resolution No. 1741, records, p. 131.
[6]
Id.
[7]
Exh. A, records, p. 14.
[8]
Id. at 15.
[9]
Id. at 16.
[10]
Id. at 14.
[11]
Id. at 17.
[12]
Id. at 126.
[13]
Records, p. 126.
[14]
Id. at 18.
[15]
Supra at 15.
[16]
Records, p. 20.
[17]
As cited in CA Decision, rollo, p. 50.
[18]
Id. at 47.
[19]
Id. at 50.
[20]
Complaint, records, pp. 1-2.
[21]
Records, pp. 9 and 45.
[22]
Id. at 26.
[23]
Id. at 52.
[24]
Rollo, p. 46.
[25]
Id. at 69.
[26]
Petition, rollo, p. 12.
[27]
RTC decision, rollo, p. 45.
[28]
CA decision, id. at 65-66.
[29]
Katon v. Palanca, G.R. No. 151149, September 7, 2004, 437 SCRA 565, 577.
[30]
Second amended complaint, records, p. 46.
[31]
Id. at 48.
[32]
Morandarte v. Court of Appeals, G.R. No. 123586, August 12, 2004, 436 SCRA 213, 223.
[33]
Tancuntian v. Gempesaw, G.R. No. 149097, October 18, 2004, 440 SCRA 431, 439, citing Heirs of Kionisala v.
Heirs of Dacut, 428 Phil. 249 (2002).
[34]
G.R. No. 152947. July 7, 2004, 433 SCRA 716, 727.
[35]
442 Phil. 269 (2002).
[36]
VSC Commercial Enterprises, Inc. v. Court of Appeals, supra note 35, at 276-277.
[37]
Id. at 277.
[38]
The Philippine American Life & General Insurance Company v. Breva, G.R. No. 147937, November 11, 2004,
442 SCRA 217, 223; Verzosa v. Court of Appeals, 359 Phil. 425, 437 (1998); Vlason Enterprises Corporation v.
Court of Appeals,369 Phil. 269, 302 (1999).
[39]
Lu Do and Lu Ym Corporation v. Aznar Brothers Realty Co., G.R. No. 143307, April 26, 2006, 488 SCRA 315,
330.
[40]
Tankiko v. Cezar, 362 Phil. 184, 193 (1999).
[41]
Macasiano v. Diokno, G.R. No. 97764, August 10, 1992, 212 SCRA 464, 469.
[42]
REPUBLIC ACT NO. 7160, effective January 1, 1992.
[43]
Cebu Oxygen and Acetylene Co., Inc. v. Bercilles, 160 Phil. 1155, 1158 (1975).
[44]
42 Phil 28, 29-30 (1921).
[45]
459 Phil 955, 962 (2003).
[46]
399 Phil. 695 (2000).
[47]
443 Phil. 603 (2003).
[48]
G.R. No. 158563, June 30, 2005, 462 SCRA 544.
SECOND DIVISION
[G.R. No. 118328. October 8, 1998]
MARCIANA SERDONCILLO, petitioner, vs. SPOUSES FIDEL and

EVELYN BENOLIRAO, MELITON CARISIMA, and COURT OF
APPEALS, respondents.
DECISION
MARTINEZ, J.:
This petition for review assails the decision of the Court of Appeals dated July 14,
1994 in CA G.R. CV No. 39251 which affirmed the decision of the Regional Trial Court
[1]
of Pasay City, (Branch 108) in Civil Case No. 7785, dated June 30, 1992 directing
herein petitioner to demolish and remove all illegal structures which she constructed in
front of the subject lots, to vacate the said property and right of way, and return
possession thereof to the respondents.
The antecedent facts:
The subject premises was formerly part of the estate of H. V. Ongsiako, comprising
of 1,806 square meters, more or less, located at the corner of Pilapil and N. Domingo
Streets, Pasay City. The legal heirs of H.V. Ongsiako organized the United Complex
Realty and Trading Corporation (UCRTC) which subdivided the property into fourteen
(14) lots, Lots 555-A to 666-N.The subdivided lots were then offered for sale with first
priority to each of the tenants, including the private respondents and petitioner. Lot
[2]
666-H has an area of 248 square meters, consisting of two (2) parts. One part is the
residential portion with an area of 112 square meters purchased by private
respondents-spouses Benolirao while the second part is the right of way for Lot 666-I
[3]
and the aforesaid residential portion. Private respondent Carisima purchased Lot 666-
[4]
I. Petitioner, who was occupying the western end and front portions of the aforesaid lots
declined the offer to purchase any of the lots offered for sale by UCRTC.[5]
Petitioner continued paying rentals to H.V. Ongsiakos wife, Mrs. Rosario de

Jesus. Thereafter, the collection of rentals was stopped prompting petitioner to file on
June 30, 1987, Civil Case No. 5456 before the Metropolitan Trial Court of Pasay City for
consignation of rentals against UCRTC, Rosario de Jesus and the spouses
Carisima. The consignation was granted by the trial court and was eventually affirmed
on appeal by the Regional Trial Court of Pasay City, Branch 109 on October 25, 1989. [6]
On May 5, 1989, UCRTC executed a deed of absolute sale in favor of private

respondents-spouses Benolirao for Lot 666-H. This sale was annotated at the back of
[7]
UCRTCs title on Lot 666-H . [8]
On June 2, 1989, after unsuccessful oral and written demands were made upon
petitioner, UCRTC instituted an action against her for recovery of possession of the
subject premises before the Regional Trial Court of Pasay City, Branch 114 docketed as
Civil Case No 6652. On July 15, 1990, the trial court rendered its decision dismissing
[9]
the complaint of UCRTC, stating in part, to wit:

It is clear, therefore, that plaintiff, not having been authorized in writing
for the purpose, may not validly bring an action to enforce a perceived
easement of right of way pertaining to the owners of Lots 666-H and
666-I or the Benolirao and Carisima families. while Benjamin Ongsiako
possessed the authority to institute the case (Exhibit G), plaintiff is not
the real party in interest. Furthermore, the situation obtaining does not
call for the enforcement of an easement of right of way. Defendant
Serdoncillo is not the owner of and has never claimed ownership over
the portion of Lot 666-H on which her house is erected. A servitude is
an encumbrance imposed upon an immovable for the benefit of
another immovable belonging to a different owner (Article 613, New
Civil Code). In the present case, the ejectment of defendant Serdoncillo
from the portion of Lot 666-H occupied by the house at the instance of
the proper party (Renato Bolinaraos family ) would remove the
obstruction.
x x x x x x x x x
"WHEREFORE, in view of all the foregoing considerations, the
complaint against the defendant Marciana Serdoncillo, as well as
defendants counterclaim, is dismissed for lack of merit. Without
pronouncement as to costs.
SO ORDERED." [10]
UCRTC did not appeal the aforesaid decision of the Regional Trial Court, hence,
the same became final.
On November 20, 1989, Serdoncillo instituted Civil Case No. 7749 for the Exercise
of Preferential Rights of First Refusal against UCRTC and private respondents-spouses
Fidel and Evelyn Benolirao praying for the annulment of sale of a portion of lot 666-H
sold to the Benolirao spouses on the ground that said transfer or conveyance is
illegal. She claimed that she has the preferred right to buy the said property and that the
same was not offered to her under the same terms and conditions, hence, it is null and
void. UCRTC and private respondents prevailed and this case was dismissed. On
appeal to the Court of Appeals, the same was dismissed on July 9, 1992. [11]
On November 20, 1990, private respondents made their final demand on petitioner
reiterating their previous demands to vacate the property. On December 13, 1990,
[12]
private respondents filed their complaint for recovery of possession of the subject

premises against petitioner before the Regional Trial Court of Pasay City, Branch 108,
docketed as Civil Case No. 7785, which complaint alleges these material facts:
5. That plaintiffs, being then registered owners of the properties
designated as lot 666-H and 666-I, are likewise the owners/grantees
of the right of way granted by United Complex Realty and Trading
Corporation which was correspondingly annotated in its title (Annex B-
3) under Entry No. 205154/T-172291 of the Register of Deeds of
Pasay City;
6. That since 1982 the defendant has built and constructed a
residence and pig pen on the plaintiffs right of way as well as on the
front portions of the latters properties leaving them virtually obstructed
with no ingress or egress from the main road;
7. That verbal and written demands made upon the defendant by the
plaintiffs to remove and demolish her structures had been ignored, the
last of which was on November 20, 1990, xerox copy of which is
hereto attached as Annex C and taken as an integral part hereof, but
despite such demands, the defendant failed and refused and still fails
and refuses to remove and vacate her illegal structures on the portion
of the properties as well as on the right of way of plaintiffs;
8. That plaintiffs in compliance with the Katarungang Pambarangay
Law lodged a complaint before the Barangay Captain, Barangay 84,
Zone 10 of Pasay City, which certified filing of the same in court, xerox
copy of said certification is hereto attached as Annex D and taken as
integral part hereof;
9. That due to the unjustified refusal of the defendant, the plaintiffs are
suffering the unnecessary inconvenience of the absence of decent
and sufficient ingress and egress on their properties, and will continue
to suffer the same unless the illegal structures are finally demolished
and/or removed by the defendants; [13]
Petitioner, in her Answer, put up the defense that she is the legitimate tenant of said
lots in question since 1956, pertinent portions of which are quoted hereunder, thus:
13. That Lot 666-H and Lot 666-I mentioned in the complaint are
formerly portions of a big track(sic) of land consisting of 1,806 square
meters then owned by H.V. Ongsiako;
14. That since 1956 and before the 1,806 square meters of lot owned
by H.V. Ongsiako was subdivided into fourteen (14) lots in 1982,
defendant is (sic) already a legitimate tenant and occupant family
of around 400 square meters of the 1,806 square meters of the said
land then owned by H.V. Ongsiako by erecting her residential house
thereon at the agreed monthly rental of P15.00 and increased
to P100.00;
"15. That upon the death of H. V. Ongsiako his heirs continued
collecting the monthly rental of the premises from the defendants;
"16. That the heirs of H. V. Ongsiako formed a corporation known as
UNITED COMPLEX REALTY AND TRADING CORPORATION and
the big parcel of land consisting of 1,806 square meters was
transferred to the said corporation and subdivided in 1982 into
fourteen (14) lots, two (2) of which lots are the very same lots leased
by the defendant from H.V. Ongsiako and later from his heirs and then
from United Complex Realty and Trading Corporation as alleged in the
preceding pars. 13, 14, and 15; [14]
The issues having been joined, trial on the merits ensued. On June 30, 1992, the
trial court rendered its decision in favor of private respondents, the dispositive portion of
which reads:
WHEREFORE, IN VIEW of the foregoing, and finding preponderance
of evidence in plaintiffs favor, judgment is hereby rendered as follows:
"1) Ordering the defendant to demolish and remove all illegal
structures she constructed on the front portions of the subject
lots and on the right of way of the plaintiffs;
"2) Ordering the defendant to vacate the property and right of
way and return possession thereof to the plaintiffs;
"3) Ordering the defendant to pay the cost of suit.
As to the damages (actual and moral) no award is given. In the
absence of proof of fraud and bad faith by defendants, the latter
are(sic) not liable for damages (Escritor Jr. vs. IAC, 155 SCRA 577).
"Actual and compensatory damages require substantial proof. In the
absence of malice and bad faith, moral damages cannot be awarded
(Capco vs. Macasaet, 189 SCRA 561).
"As to the attorneys fees, each party should shoulder his/her
expenses.
SO ORDERED." [15]
Aggrieved by the trial courts decision, petitioner appealed to the Court of Appeals
alleging that: 1) the lower court should have dismissed the complaint of private
respondents considering that based on the letter of demand dated November 20, 1990,
the action filed should have been unlawful detainer and not an action for recovery of
possession; 2) the action filed by private respondents is barred by res
judicata considering that the present action is identical with that of Civil Case No.
6652; 3) the lower court erred in not dismissing the complaint for lack of cause of
action with respect to enforcement of right of way vis a vis defendant; and 4) the lower
court erred in ordering that defendants vacate the properties in question since the lease
of defendants thereon was still in existence and had not yet been terminated. [16]
On July 14, 1994, the respondent Court of Appeals rendered its decision sustaining
the findings of the trial court and dismissed the appeal of petitioner, stating in part as
follows:
The issue as to the proper action has been resolved by the
respondent court, to wit:
`The defense that what should have been filed is an ejectment
case and not recovery of possession, is not also correct. The
filing of this case for recovery of possession, instead of an
ejectment case, is not altogether unjustified. The Benoliraos
and Carisima became the owners as early as May,
1989. Verbal and written demands had been ignored. There is
an immediate need for plaintiffs to use the right of way, which
up to the present time is obstructed,. At most, what surfaced is
a technicality which should be abandoned.'
"A plain reading of the complaint shows that plaintiff-appellees cause
of action is for recovery of possession of their property which was
encroached upon by defendant-appellant. [17]
A motion for reconsideration of the aforesaid decision filed by petitioner on August

8, 1994 was denied by the respondent on September 23, 1994.
[18] [19]
Hence, this petition.

Petitioner ascribes one single error committed by the respondent court, to wit:
THE RESPONDENT REGIONAL TRIAL COURT AND THE COURT
OF APPEALS (Sp. Fifteenth Division) COMMITTED GRAVE ABUSE
OF JURISDICTION IN DECIDING AS AN ACCION PUBLICIANA AN
EJECTMENT OR UNLAWFUL DETAINER CASE (THE
JURISDICTION OF WHICH CLEARLY PERTAINS TO THE
INFERIOR COURT), A CASE BASICALLY INVOLVING AN
EASEMENT OF RIGHT OF WAY.
Petitioner asserts that the respondent court erred in sustaining the trial courts
finding that the complaint filed by private respondents for recovery of possession of the
subject premises is an accion publiciana notwithstanding the fact that the action was
filed within one (1) year from demand. Petitioner contends that private respondents
should have filed an action for unlawful detainer and not an action for recovery of
possession against petitioner. Consequently, the trial court is without jurisdiction to hear
and determine Civil Case No. 7785. In support of her contention, petitioner cited the
cases of Bernabe vs. Luna and Medina vs. Court of Appeals, which she states is
[20] [21]
strikingly similar to the facts of this case. Consequently, the rulings of this Court in these
two cases are squarely applicable and controlling in the case at bar.
Private respondents, however, aver that they were merely successors-in-interest of
UCRTC and therefore step into the shoes of the latter. They claim that the demand to
vacate required by law should at the very least be reckoned from June 2, 1989, the date
of the filing of the complaint in Civil Case No. 6652 considering that their demands are
simply a reiteration of UCRTCs demands against petitioner. Private respondents further
contend that the allegations in the complaint determine the jurisdiction of the
court. Thus, the complaint in Civil Case No. 7785 specifically alleged that private
respondents are the owners of lots 666-I and 666-H as evidenced by transfer
certificates of title and prayed for recovery of possession of a portionthereof including its
right of way illegally and unlawfully possessed by petitioner.
Petitioners position is without merit.
It is an elementary rule of procedural law that jurisdiction of the court over the
subject matter is determined by the allegations of the complaint irrespective of whether
or not the plaintiff is entitled to recover upon all or some of the claims asserted
therein. As a necessary consequence, the jurisdiction of the court cannot be made to
depend upon the defenses set up in the answer or upon the motion to dismiss, for
otherwise, the question of jurisdiction would almost entirely depend upon the defendant.
What determines the jurisdiction of the court is the nature of the action pleaded as
[22]
appearing from the allegations in the complaint. The averments therein and the
character of the relief sought are the ones to be consulted. Accordingly, the issues in
[23]
the instant case can only be properly resolved by an examination and evaluation of the
allegations in the complaint in Civil Case No. 7785. [24]
In this regard, to give the court jurisdiction to effect the ejectment of an occupant or
deforciant on the land, it is necessary that the complaint must sufficiently show such a
statement of facts as to bring the party clearly within the class of cases for which the
statutes provide a remedy, without resort to parol testimony, as these proceedings are
summary in nature. In short, the jurisdictional facts must appear on the face of the
[25]
complaint. When the complaint fails to aver facts constitutive of forcible entry or unlawful
detainer, as where it does not state how entry was effected or how and when
dispossession started, the remedy should either be an accion publiciana or an accion
reivindicatoria. [26]
In the case of Javier vs. Veridiano II this Court held that the doctrine in Emilia v.
[27]
Bado, decided more than twenty-five years ago, is still good law. It preserved the age-
[28]
old remedies available under existing laws and jurisprudence to recover possession of
real property, namely: (1) accion interdictal, which is the summary action for either
forcible entry or detentacion, where the defendants possession of the property is
illegal ab initio; or for unlawful detainer or desahucio, where the defendants
possession was originally lawful but ceased to be so by the expiration of his right to
possess, both of which must be brought within one year from the date of actual entry on
the land, in case of forcible entry, and from the date of last demand, in case of unlawful
detainer, in the proper municipal trial court or metropolitan court; (2) accion
publiciana which is a plenary action for recovery of the right to possess and which
should be brought in the proper regional trial court when the dispossession has lasted
for more than one year; and, (3) accion reivindicatoria or accion de
reivindicacion which seeks the recovery of ownership and includes
the jus possidendi brought in the proper regional trial court.
Accion reivindicatoria or accion de reivindicacion is thus an action whereby
plaintiff alleges ownership over a parcel of land and seeks recovery of its full
possession. It is different from accion interdictal or accion publiciana where plaintiff
merely alleges proof of a better right to possess without claim of title. In Banayos vs.
Susana Realty, Inc., this Court held that:
[29]
We have consistently held that a complaint for forcible entry, as

distinguished from that of unlawful detainer, in order to vest jurisdiction
upon the inferior court, must allege plaintiffs prior physical possession
of the property, as well as the fact that he was deprived of such
possession by any of the means provided in Section 1, Rule 70 of the
Rules of Court, namely: force, intimidation, threats, strategy and
stealth, for if the dispossession did not take place by any of these
means, the courts of first instance, not the municipal courts, have
jurisdiction.
x x x x x x x x x
The aforesaid Rule 70 does not, however, cover all of the cases of
dispossession of lands. Thus, whenever the owner is dispossessed by
any other means than those mentioned he may maintain his action in
the Court of First Instance, and it is not necessary for him to wait until
the expiration of twelve months before commencing an action to be
repossessed or declared to be owner of the land. Courts of First
Instance have jurisdiction over actions to recover possession of real
property illegally detained, together with rents due and damages, even
though one (1) year has not expired from the beginning of such illegal
detention, provided the question of ownership of such property
is also involved. In other words, if the party illegally dispossessed
desires to raise the question of illegal dispossession as well as that of
the ownership over the property, he may commence such action in the
Court of First Instance immediately or at any time after such illegal
dispossession. If he decides to raise the question of illegal
dispossession only, and the action is filed more than one (1) year after
such deprivation or withholding of possession, then the Court of First
Instance will have original jurisdiction over the case. The former is
an accion de reivindicacion which seeks the recovery of ownership as
well as possession, while the latter refers to an accion publiciana,
which is the recovery of the right to possess and is a plenary action in
an ordinary proceeding in the Court of First Instance.
A reading of the averments of the complaint in Civil Case No. 7785 undisputably
show that plaintiffs (private respondents herein) clearly set up title to themselves as
being the absolute owner of the disputed premises by virtue of their transfer certificates
of title and pray that petitioner Serdoncillo be ejected therefrom. There is nothing in the
complaint in Civil Case No. 7785 alleging any of the means of dispossession that would
constitute forcible entry under Section (1) Rule 70 of the Rules of Court, nor is there any
assertion of defendants possession which was originally lawful but ceased to be so
upon the expiration of the right to possess. It does not characterize petitioners alleged
entry into the land, that is, whether the same was legal or illegal nor the manner in
which petitioner was able to construct the house and the pig pens thereon. The
complaint merely avers that a portion of the lot owned by private respondents and its
right of way have been occupied by petitioner and that she should vacate. The action
therefore is neither one of forcible entry nor of unlawful detainer but essentially involves
a dispute relative to the ownership of 4.1 square meters of land allegedly encroached
upon by petitioner and its adjoining right of way. Indeed, the Ocular Inspection Report of
the Branch Clerk of Court, states that:
"xxx (T)he right of way hit directly the defendant Serdoncillos property
consisting of a two-storey residential house made of wood and GI
sheets and occupying the entire width of the rear portion of the right of
way. A coconut tree stands on the middle of the road, at the back of
which is a shanty made of rotten G.I. sheets around it which is used as
pigpens and place of washing clothes extended from defendants
house. To gain access to plaintiffs property, the group turned right and
passed between an aratiris tree and cemented firewall owned by Mr.
Belarmino making only one person at a time to pass. This
passageway has only a width of 0.5 meter which is being used by the
defendant and her members of the family aside from the plaintiffs.
xxx Two (2) monuments of the lot boundary of the plaintiffs property
are existing, but the rest are nowhere to be found. According to Mrs.
Benolirao, they are located within the premises of the defendants
house. At the back of Benolirao is a private property gutted by fire.
xxx Upon request, the group was granted permission by the relatives
of the defendant to inspect the place. The group further noticed that
defendants improvements were even encroaching on the plaintiffs lot
by approximately 4.1 meters, more or less. The house of the
defendant is facing the plaintiffs property; there is a small chicken
house and there is also a dog house standing near it. [30]
It is noted that at the time of the filing of said complaint, Civil Case No. 7749, an
action for annulment of the sale between UCRTC and private respondents Benolirao of
Lot 666-H initiated by petitioner was likewise pending in another court. This case puts in
issue the validity of private respondents acquisition of the subject lots and ultimately
their ownership of Lot 666-H.
Thus, what is noticeable in the complaint is that private respondents definitely gave
petitioner notice of their claim of exclusive and absolute ownership, including their right
to possess which is an elemental attribute of ownership. It is immaterial whether or not
[31]
private respondents instituted their complaint one month from date of last demand or a
year thereafter. What is of paramount importance is that the allegations in the complaint
are of the nature of either an accion publiciana or an accion reivindicatoria.
Petitioners reliance on the Bernabe and Medina cases, which she claims to be
squarely applicable under the circumstances herein, is entirely misplaced. While it is
true that in these two cases the complaints were filed before the one-year period had
expired from date of last demand, the allegations in the complaint failed to state material
facts which are indicative of a case of either an accion publiciana or accion
reivindicatoria. Thus, the Court in Bernabe stated that:
"In their complaint, plaintiffs (petitioners herein) allege that they are the
owners of a parcel of land with an area of 199.4 square meters more
or less, located in Tondo, Manila, that defendant (private respondent
herein) constructed a house on said lot without plaintiffs permission;
that on November 14, 1980, plaintiffs thru counsel made a written
demand for the removal of said house as well as for the recovery of
damages for the reasonable use and occupation thereof; and that
defendant refused and failed to comply despite repeated demands.
x x x x x x x x x
We have noted that while petitioners allege in their complaint that they
are the owners of the lot on which the house of the private respondent
is constructed, their attached TCT shows that the lot is still in the
name of Fejosera Investment Incorporated. Private respondent and
said company entered into a contract of lease in l950 for the use and
occupation of said lot. Petitioners allegedly bought the lot in question
in 1973, and they must have been fully aware of the occupancy of the
private respondent of the premises in question. Yet, they did not take
any action to remove the house of the private respondent or to inform
the respondent that they had become the new owners of the lot in
question. It is clear therefore that the lease was allowed to continue.
x x x x x x x x x
"Consequently, the possession of private respondent over the lot in
question became illegal only on November 14, 1980, when the formal
demand to pay and vacate the premises was sent to him. [32]
The allegations in the complaint clearly show that plaintiffs were already the owners
of the property when defendant constructed a house on the disputed lot without their
permission.That despite formal demand defendant failed to vacate and surrender
possession of the property to them. Indeed, the averments in plaintiffs complaint
present jurisdictional facts which do not illustrate plaintiffs action as either an action
publiciana or accion reivindicatoria but that of forcible entry or unlawful
detainer. Thus, the trial court correctly dismissed plaintiffs complaint, pertinent portion of
which is quoted hereunder:
It is clear on the face of the complaint that at the time of the filing of
this case on February 19, 1981, the defendant was in possession, as
tenant, of the premises. When plaintiffs counsel, therefore sent a
written notice on November 4, 1980 requiring defendant to vacate the
premises when this action was brought, the one (1) year period after
the unlawful deprivation or withholding of possession has not yet set
in. It is clear that this is an ejectment case within the exclusive
jurisdiction of the City Court of Manila.
SO ORDERED. [33]
We likewise find the Medina case, relied upon by petitioner, to be inappropriate. The
facts distinctly show that the complaint filed by the owners of the property before the
Metropolitan Trial Court of Manila, Branch 47, was for unlawful detainer. It was the
action resorted to by the plaintiffs after advising the defendant (the lessee of the
premises in question) that a member of the family, Dr. Igama, urgently needed the
house and after repeated demands to vacate made on the lessee proved to be
unsuccessful. All these incidents, from notification to the filing of the complaint dated
May 16, 1985, transpired within a period of six (6) months. Indeed, the factual
background of this case is a classic illustration of an action for unlawful detainer. Verily,
the facts are therefore diametrically opposite to the facts of the case at bar.
Petitioner has therefore no legal basis to insist that the present case is similar to the
Bernabe and Medina cases and from which this Court should base its findings and
conclusions. The doctrine laid down in Tenorio vs. Gomba is still controlling. In that
case the Court ruled that courts of first instance have jurisdiction over all actions
involving possession of land except forcible entry and illegal detainer, and therefore the
lower court has jurisdiction over the action alleged in the appellants complaint because
it is neither of illegal detainer nor of forcible entry.
[34]
Petitioner maintains that her leasehold right as a tenant of the subject premises had
been settled in Civil Case No. 5456, an action for consignation, which she won before
the Metropolitan Trial Court and affirmed on appeal by the Regional Trial Court of Pasay
City, Branch 109. Said court ruled that the latter is a tenant of the site or premises in
question and that she cannot be ejected therefrom, even on the assumption that her
house and pig pen are allegedly standing on a right of way. She claims that pursuant to
Section 49 (b) (now Section 47) Rule 39, Rules of Court, the issue of tenancy in said
case is now conclusive between her and private respondents with respect to the subject
premises in question.
Petitioners contention is devoid of merit.
Section 49 (now Section 47), provides that:
Section 49. Effects of Judgments.- the effect of a judgment or final
order rendered by a court or judge of the Philippines having
jurisdiction to pronounce the judgment or order, may be as follows:
(a) xxx xxx xxx
(b) In other cases the judgment or order is, with respect to the
matter directly adjudged or as to any other matter that could
have been raised in relation thereto, conclusive between the
parties and their successors-in-interest by title subsequent to
the commencement of the action or special proceeding,
litigating for the same thing and under the same title and in the
same capacity;
The fundamental principle upon which the doctrine of res judicata rests is that
parties ought not be permitted to litigate the same issue more than once, that when the
right or fact has been judicially determined, the judgment of the court, so long as it
remains unreversed, should be conclusive upon the parties and those in privity with
them in law or estate. [35]
Thus, for res judicata to bar the institution of a subsequent action the

following requisites must concur: (l) the former judgment must be final; (2) it must have
been rendered by a court having jurisdiction of the subject matter and the parties; (3) it
must be a judgment on the merits; and, (4) there must be between the first and second
actions; (a) identity of parties; (b) identity of subject matter; and (c) identity of cause of
action.[36]
There is no dispute as to the presence of the first three (3) requirements and the
identity of the subject matter. The only issues remaining are whether as between Civil
Case No. 5456 and Civil Case No. 7785, there is identity of parties and of causes of
action in Civil Case No. 5456 to bar the institution of Civil Case No. 7785.
There is identity of parties. The record shows that the parties in Civil Case No. 5456
are petitioner as plaintiff while the defendants were UCRTC, the spouses Meliton and
Efremia Carisima and Rosario de Jesus. Private respondents-spouses Fidel and Evelyn
Benolirao acquired lot 666-H from UCRTC and are therefore the successors-in-interest
of UCRTC by title subsequent to the commencement and termination of the first
action. As such, private respondents merely stepped into the shoes of UCRTC and
acquired whatever capacity and title the former had over the same property or subject
matter of the action. Indeed, there is actual, if not substantial, identity of parties between
the two actions.[37]
There is however, no identity of causes of action in both cases. In the case

of Garcia vs. Court of Appeals, this Court held that the test of identity of causes of
[38]
action lies not in the form of an action but on whether the same evidence would support
and establish the former and the present causes of action. Petitioners complaint in Civil
Case No. 5456 is an action for consignation of rentals while Civil Case No. 7785 is an
action for recovery of possession.
In other words, the issue in Civil Case No. 5456 is whether or not consignation of
rentals is proper under the circumstances obtaining in that case. Private respondents
action for recovery of possession requires them to present evidence of their claim or title
to the subject premises and their right to possess the same from petitioner. Stated
conversely, the evidence in Civil Case No. 5456 is entirely different to that in Civil Case
No. 7785. Thus, the decision in Civil Case No. 5456 does not in any way affect nor bar
Civil Case No. 7785.
Indeed, the Court noted that the parties had been at odds since 1987 when
petitioner initiated Civil Case No. 5456, and then Civil Case No. 7749. Private
respondents predecessor UCRTC likewise initiated Civil Case No. 6652 and the present
case under appeal, Civil Case No. 7785, all because of the use of a right of way and an
encroachment of only 4.1 meters of the subject premises. At some point in time, all
these squabbles must end. Thus, the respondent court stated that:
It is true that it is the purpose and intention of the law that courts
should decide all questions submitted to them as truth and justice
require, and that it is greatly to be desired that all judgments should be
so decided; but controlling and irresistible reasons of public policy and
of sound practice in the courts demand that at the risk of occasional
errors, judgment of the courts determining controversies submitted to
them should become final at some definite time fixed by law. [39]
In passing, We reiterate the time-honored doctrine that findings of facts of the Court
of Appeals are binding and conclusive upon the Supreme Court, and the Court will not
normally disturb such factual findings unless the findings of the court are palpably
unsupported by the evidence or unless the judgment itself is based on misapprehension
of facts. In this case, We find the said decision to be totally supported by the evidence
[40]
on record.
Based on the foregoing premises, it is unnecessary to pass upon the other issues
raised in the petition.
WHEREFORE, the petition for review is hereby DISMISSED and the decision of the
Court of Appeals in CA-G.R. CV NO. 39251 is AFFIRMED. No pronouncements as to
costs.
SO ORDERED.
Regalado, (Acting C. J.), Melo, Puno, and Mendoza, JJ., concur.
Decided by the First Division, Court of Appeals composed of the Honorable Associate Justice Justo P.
[1]
Torres, Jr., Ponente and Chairman of the Division (now retired Justice of the Supreme Court); Honorable
Associate Justice Bernardo P. Pardo, Senior Member and Honorable Associate Justice Corona Ibay-
Somera, Junior Member.
[2]
Exhibit D, Civil Case No. 6652, Letter dated November 13, 1982.
[3]
Deed of Absolute Sale, Annex A, pp. 1-2, Folder of Exhibits.
[4]
ENTRY NO. 205154/T-17291-RIGHT OF WAY-GRANTED: By the registered owner herein covering a
portion of the land herein as shown and marked in the subdivision Plan LRC Psd-158391 from points 1 to
14, of lot 666-H with the width of 3.12 meters as an access road to and from the existing road for the
benefit and use of owners of Lot 666-I to 666-H of said Subdivision Plan. Doc. No. 434, Page No. 88,
Book No. 9352, Series of 1980, Julian Florentino. Date of Instrument - December 11, 1980; Date of
Inscription - December 12, 1980 at 10:25 a.m.
[5]
Decision of the Regional Trial Court, Branch 114, Pasay City, pp. 13-18, ibid.
[6]
Decision of the Regional Trial Court, Branch 109, Pasay City, pp. 25-28, Folder of Exhibits.
[7]
Deed of Absolute Sale, Annex A, pp. 1-2, ibid.
[8]
Entry No. 89-105751/T-17291 - PORTION SALE - in favor of SPS. FIDEL and EVELYN BENOLIRAO,
covering an area of ONE HUNDRED TWELVE (112) SQUARE METERS for the sum of FIFTY
THOUSAND PESOS (50,000.00), other conditions set forth in Doc. No. 08, Page 15, Block VI, Series of
l989 of the Not. Register for Pasay City, Jeremias L. de Jesus, dated May 5, 1989. Date of Inscription,
May 19, 1989 - 1:35 p.m..
[9]
Complaint, Civil Case No. 6652, Exhibit I, pp. 19-24, ibid.
[10]
Decision of the Regional Trial Court, Branch 114, Pasay City, penned by the then Judge Fermin
A. Martin, Exhibit H, pp. 13-18, Folder of Exhibits.
[11]
par. 3, ibid.
[12]
Letter of Demand, page 11, Exhibit F, ibid.
[13]
Complaint, pages 5-9, Original Record.
[14]
Answer with Special Affirmative Defenses and Counterclaim,, pages 14-19, Ibid.
[15]
Decision of the Regional Trial Court, pp. 45-66, CA rollo.
[16]
Appellants Brief, pp. 15-42, CA Rollo. CA G.R. CV No. 39251.
[17]
Decision of the Court of Appeals, pp. 64-70 ibid.
[18]
Motion for Reconsideration, pp. 72-85, ibid.
[19]
Resolution of the Court of Appeals, page 87, ibid.
[20]
148 SCRA 113.
[21]
181 SCRA 837.
[22]
Caparros vs. Court of Appeals, 170 SCRA 758 (1989) ; Ganadin vs. Ramos, 99 SCRA 613, 621
(1973) ; Fuentes vs. Bautista , 53 SCRA 420 (1969) ; Simpao, Jr. vs. Lilles, 40 SCRA 180 (1971) ;
Vencilao vs. Camarenta, 29 SCRA 473 (1969).
[23]
Banayos vs. Susana Realty Inc., 71 SCRA 557 (1976).
[24]
Sarmiento vs. Court of Appeals, 250 SCRA 108 (1995)
[25]
36 A C.J.S. Forcible Entry and Detainer, Sec 39, p. 2002; Ind. - Boxley vs. Collins, 4 Blackf. 320; Me. -
Treat vs.. Brent., 51 Me. 478.
[26]
Sarmiento vs. Court of Appeals, supra.; Accion reivindicatoria- An action for ejectment wherein the
plaintiff sets up title in himself and prays that he be declared the owner, and given possession thereof.
[Ledesma vs. Marcos, 9 Phil. 618 (1908)].
[27]
237 SCRA 565 (1994).
[28]
23 SCRA 183 (1968).
[29]
71 SCRA 557 (1976)
[30]
Ocular Inspection Report, September 10, 1991, pp. 45-48, Original Record.
[31]
Javier vs. Veridiano II, supra.
[32]
Bernabe vs. Luna, supra.
[33]
Ibid.
[34]
81 Phil. 54 (1948).
[35]
Sarabia vs. Secretary of Agriculture and Natural Resources, 2 SCRA 54 (1961).
[36]
Ipekdjian Mercjandising Co., Inc. vs. Court of Appeals, 9 SCRA 72 (1963); Mangoma vs. Court of
Appeals, et al., 241 SCRA 21(1995) ; Guevarra vs. Benito, 247 SCRA 570, 573(1995).
[37]
Mendiola vs. Court of Appeals, 258 SCRA 492 (1996); Comilang vs. Bautista, 21 SCRA 486, 491(1967);
Penalosa vs. Tuason, 22 Phil. 303, 323 (1912).
[38]
14 SCRA 721 (1965); Guevarra vs. Benito, et al., ibid.
[39]
Decision of the Court of Appeals, supra.
[40]
Valenzuela vs. Court of Appeals, 253 SCRA 303; Mallari vs. Court of Appeals, 265 SCRA 456.

FIRST DIVISION

PURISIMO BUYCO, G.R. No. 177486
Petitioner,
Present:

- versus - CARPIO MORALES,
LEONARDO-DE CASTRO,
BERSAMIN, and
VILLARAMA, JR., JJ.

NELSON BARAQUIA,
Respondent. Promulgated:

December 21, 2009

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

CARPIO MORALES, J.:
Nelson Baraquia (respondent) filed before the Regional Trial Court (RTC) of Iloilo
City a complaint[1] against Dominico Buyco and Clemente Buyco (Buycos), for the
establishment of a permanent right of way, injunction and damages with
preliminary injunction and temporary restraining order, to enjoin the Buycos from
closing off a private road within their property which he has been using to go to
and from the public highway to access his poultry farm.

The Buycos died during the pendency of the case, and were substituted by
Purisimo Buyco (petitioner) and his brother Gonzalo.
Branch 39 of the Iloilo RTC granted respondents application for preliminary
injunction.

By Decision[2] of February 14, 2007, the trial court dismissed respondents
complaint for failure to establish the concurrence of the essential requisites for the
establishment of an easement of right of way under Articles 649 and 650 of the
Civil Code.[3] It accordingly lifted the writ of preliminary injunction.

Respondent filed a notice of appeal of the trial courts decision. Petitioner
filed too a notice of partial appeal bearing on to the non-award of prayer for
damages.

Respondent later filed with the trial court a motion to cite petitioner and his
brother Gonzalo in contempt, alleging that they had closed off the subject road,
thus violating the writ of preliminary injunction. The trial court, by Resolution of
March 13, 2007,[4] noting that respondent received on March 5, 2007 his copy of its
decision while petitioner received his on February 21, 2007, held that the February
14, 2007 decision had not yet become final and executory, hence, the writ of
preliminary injunction remained to be valid, efficacious and obligatory, rendering
petitioners act of closing the road on March 1, 2007 an indirect contempt of
court. It thus declared petitioner and his brother in contempt of court.

Petitioner moved for reconsideration of the trial courts March 13, 2007
Resolution, contending that a preliminary injunction, once quashed, ceases to exist,
and that he and his brother cannot be held guilty of indirect contempt by mere
motion.

By Resolution[5] of April 18, 2007, the trial court set aside the March 13,
2007 Resolution and granted petitioners motion for reconsideration, ruling that
petitioner and his brother cannot be held in contempt of court by mere motion and
not by verified petition.

On the lifetime of the writ of preliminary injunction, the trial court held that
it is its illumined opinion that the matter of whether a writ of preliminary
injunction remains valid until the decision annulling the same attains finality is not
firmly entrenched in jurisprudence, contrary to the position of the defendants. It
thereupon quoted a portion of the ruling in the 2006 case of Lee v. Court of
Appeals,[6] to wit:

Furthermore, notwithstanding the stand of both parties, the fact remains that the
Decision of the Court of Appeals annulling the grant of preliminary injunction in
favor of petitioners has not yet become final on 14 December 2000. In fact, such
Decision has not yet become final and executory even on the very date of this
Decision, in view of petitioners appeal with us under Rule 45 of the 1997 Rules of
Civil Procedure. The preliminary injunction, therefore, issued by the trial court
remains valid until the Decision of the Court of Appeals annulling the same
attains finality, and violation thereof constitutes indirect contempt which,
however, requires either a formal charge or a verified petition.[7] (underscoring in
the original decision)

Hence, this petition for review, raising a question of law whether the lifting of a
writ of preliminary injunction due to the dismissal of the complaint is immediately
executory, even if the dismissal of the complaint is pending appeal.
The petition is meritorious.

A writ of preliminary injunction is an order granted at any stage of an action or
proceeding prior to the judgment or final order, requiring a party or a court, agency
or a person to refrain from a particular act or acts.[8] It is merely a provisional
remedy, adjunct to the main case subject to the latters outcome.[9] It is not a cause
of action in itself.[10] Being an ancillary or auxiliary remedy, it is available during
the pendency of the action which may be resorted to by a litigant to preserve and
protect certain rights and interests therein pending rendition, and for purposes of
the ultimate effects, of a final judgment in the case.

The writ is provisional because it constitutes a temporary measure availed of
during the pendency of the action and it is ancillary because it is a mere incident in
and is dependent upon the result of the main action.[11]

It is well-settled that the sole object of a preliminary injunction, whether
prohibitory or mandatory, is to preserve the status quo until the merits of the
case can be heard. It is usually granted when it is made to appear that there is a
substantial controversy between the parties and one of them is committing an act or
threatening the immediate commission of an act that will cause irreparable injury
or destroy the status quo of the controversy before a full hearing can be had on
the merits of the case.[12]

Indubitably, in the case at bar, the writ of preliminary injunction was granted
by the lower court upon respondents showing that he and his poultry business
would be injured by the closure of the subject road. After trial, however, the lower
court found that respondent was not entitled to the easement of right of way prayed
for, having failed to prove the essential requisites for such entitlement, hence, the
writ was lifted.

The present case having been heard and found dismissible as it was in fact
dismissed, the writ of preliminary injunction is deemed lifted, its purpose as
a provisionalremedy having been served, the appeal therefrom notwithstanding.

Unionbank v. Court of Appeals[13] enlightens:
x x x a dismissal, discontinuance or non-suit of an action in which a restraining
order or temporary injunction has been granted operates as a dissolution of
the restraining order or temporary injunction, regardless of whether the
period for filing a motion for reconsideration of the order dismissing the case
or appeal therefrom has expired. The rationale therefor is that even in cases
where an appeal is taken from a judgment dismissing an action on the
merits, the appeal does not suspend the judgment, hence the general rule
applies that a temporary injunction terminates automatically on
the dismissal of the action. (italics, emphasis and underscoring supplied)

The lower courts citation of Lee v. Court of Appeals[14] is
misplaced. In Lee, unlike in the present case, the original complaint for specific
performance and cancellation of real estate mortgage was not yet decided on the
merits by the lower court. Thus, the preliminary injunction therein issued subsisted
pending appeal of an incident.

There being no indication that the appellate court issued an injunction in
respondents favor, the writ of preliminary injunction issued on December 1, 1999
by the trial court was automatically dissolved upon the dismissal of Civil Case No.
26015.

WHEREFORE, the petition is GRANTED. The Resolution dated April 18,
2007 of the trial court is REVERSED. The writ of preliminary injunction which
Branch 39 of the Iloilo Regional Trial Court issued on December 1, 1999 was
automatically dissolved upon its dismissal by Decision of February 14, 2007 of
Civil Case No. 26015.

SO ORDERED.

Associate Justice

WE CONCUR:

REYNATO S. PUNO
Chief Justice
Chairperson

TERESITA J. LEONARDO-DE LUCAS P. BERSAMIN
CASTRO Associate Justice Associate Justice

MARTIN S. VILLARAMA, JR.
Associate Justice

CERTIFICATION

conclusions in the above decision had been reached in consultation before the case

REYNATO S. PUNO
Chief Justice
[1]
Annex D of Petition; rollo, pp. 45- 49.
[2]
Records, pp. 411-419. Penned by Presiding Judge J. Cedrick O. Ruiz.
[3]
ART. 649. The owner, or any person who by virtue of a real right may cultivate or use any immovable, which is
surrounded by other immovables pertaining to other persons and without adequate outlet to a public highway, is
entitled to demand a right of way through the neighboring estates, after payment of the proper indemnity.
the dominant estate, establishing a permanent passage, the indemnity shall consist of the value of the land
occupied and the amount of the damage caused to the servient estate.
In case the right of way is limited to the necessary passage for the cultivation of the estate surrounded
by others and for the gathering of its crops through the servient estate without a permanent way, the indemnity
shall consist in the payment of the damage caused by such encumbrance.
ART. 650. The easement of right of way shall be established at the point least prejudicial to the servient estate,
and, insofar as consistent with this rule, where the distance from the dominant estate to a public highway may
be the shortest.
[4]
[5]
Annex A of Petition; rollo pp. 32-35. Penned by Presiding Judge J. Cedrick O. Ruiz.
[6]
G.R. No. 147191, July 27, 2006, 496 SCRA 668.
[7]
Id. at 686-687.
[8]
Sec. 1, Rule 58, REVISED RULES OF COURT.
[9]
Vide Rualo v. Pitargue, G.R. No. 140284, 21 January 2005, 449 SCRA 121, 141
[10]
Vide Batangas Laguna Tayabas Bus Co., Inc. v. Bitanga, 415 Phil. 43, 56 (2001).
[11]
Vide Regalado, REMEDIAL LAW COMPENDIUM, Vol. 1 (7th Ed.), p. 606.
[12]
Rava Development Corporation v. Court of Appeals, G.R. No. 96825, 3 July 1992, 211 SCRA 144, 154.
[13]
370 Phil. 837 (1999) citing Santiago v. Vasquez, G.R. Nos. 99289-90, January 27, 1993, 217 SCRA 633, 645-
646, and Golez v. Leonidas, No. L-56587, August 31, 1981, 107 SCRA 187, 189.
[14]
Supra note 6.

Supreme Court
Manila

THIRD DIVISION

JUANA COMPLEX I G.R. No. 152272

HOMEOWNERS ASSOCIATION,
INC., ANDRES C. BAUTISTA,
BRIGIDO DIMACULANGAN,
DOLORES P. PRADO, IMELDA
DE LA CRUZ, EDITHA C. DY,
FLORENCIA M. MERCADO,
LEOVINO C. DATARIO, AIDA

A. ABAYON, NAPOLEON M.

DIMAANO, ROSITA G.
ESTIGOY and NELSON A.
LOYOLA,

Petitioners,

- versus -

FIL-ESTATE LAND, INC.,
FIL ESTATE ECOCENTRUM

CORPORATION, LA
PAZHOUSING AND
DEVELOPMENT
CORPORATION, WARBIRD
SECURITY AGENCY,

ENRIQUE RIVILLA,

MICHAEL E. JETHMAL

and MICHAEL ALUNAN,

Respondents.

x-------------------------------------------x

FIL-ESTATE LAND, INC.,

FIL ESTATE ECOCENTRUM
CORPORATION, LA
PAZHOUSING AND

DEVELOPMENT
CORPORATION, WARBIRD
SECURITY AGENCY, ENRIQUE
RIVILLA, MICHAEL E.
JETHMAL and MICHAEL
ALUNAN, G. R. No. 152397
Petitioners,
Present:
- versus -
JUANA COMPLEX I VELASCO, JR., J., Chairperson,
HOMEOWNERS ASSOCIATION,
INC., ANDRES C. BAUTISTA, PERALTA,
BRIGIDO DIMACULANGAN,
DOLORES P. PRADO, IMELDA ABAD,
DE LA CRUZ, EDITHA C. DY,
FLORENCIA M. MENDOZA, and
MERCADO, LEOVINO C.
DATARIO, AIDA PERLAS-BERNABE, JJ.
A. ABAYON, NAPOLEON M.
DIMAANO, ROSITA G.
ESTIGOY and NELSON A.
LOYOLA,

Respondents.

Promulgated:

March 5, 2012
X -------------------------------------------------------------------------------------- X
DECISION

MENDOZA, J.:

Before the Court are two (2) consolidated petitions assailing the July 31,
2001 Decision[1] and February 21, 2002 Resolution[2] of the Court of
Appeals (CA) in CA-G.R. SP No. 60543, which annulled and set aside the March
3, 1999 Order[3] of the Regional Trial Court, Branch 25, Bian,
Laguna (RTC), granting the application for the issuance of a writ of preliminary
injunction, and upheld the June 16, 2000 Omnibus Order[4] denying the motion to
dismiss.

The Facts:

On January 20, 1999, Juana Complex I Homeowners Association,
Inc. (JCHA), together with individual residents of Juana Complex I and other
neighboring subdivisions (collectively referred as JCHA, et. al.), instituted a
complaint[5] for damages, in its own behalf and as a class suit representing the
regular commuters and motorists of Juana Complex I and neighboring subdivisions
who were deprived of the use of La Paz Road, against Fil-Estate Land, Inc. (Fil-
Estate), Fil-estate Ecocentrum Corporation (FEEC), La Paz Housing &
Development Corporation (La Paz), and Warbird Security Agency and their
respective officers (collectively referred as Fil-Estate, et al.).

The complaint alleged that JCHA, et al. were regular commuters and
motorists who constantly travelled towards the direction of Manila and Calamba;
that they used the entry and exit toll gates of South Luzon Expressway (SLEX) by
passing through right-of-way public road known as La Paz Road; that they had
been using La Paz Road for more than ten (10) years; that in August 1998, Fil-
estate excavated, broke and deliberately ruined La Paz Road that led to SLEX so
JCHA, et al. would not be able to pass through the said road; that La Paz Road was
restored by the residents to make it passable but Fil-estate excavated the road
again; that JCHA reported the matter to the Municipal Government and the Office
of the Municipal Engineer but the latter failed to repair the road to make it passable
and safe to motorists and pedestrians; that the act of Fil-estate in excavating La Paz
Road caused damage, prejudice, inconvenience, annoyance, and loss of precious
hours to them, to the commuters and motorists because traffic was re-routed to
narrow streets that caused terrible traffic congestion and hazard; and that its
permanent closure would not only prejudice their right to free and unhampered use
of the property but would also cause great damage and irreparable injury.

Accordingly, JCHA, et al. also prayed for the immediate issuance of a
Temporary Restraining Order (TRO) or a writ of preliminary injunction (WPI) to
enjoin Fil-Estate, et al. from stopping and intimidating them in their use of La Paz
Road.

On February 10, 1999, a TRO was issued ordering Fil-Estate, et al, for a
period of twenty (20) days, to stop preventing, coercing, intimidating or harassing
the commuters and motorists from using the La Paz Road. [6]

Subsequently, the RTC conducted several hearings to determine the
propriety of the issuance of a WPI.

On February 26, 1999, Fil-Estate, et al. filed a motion to dismiss[7] arguing
that the complaint failed to state a cause of action and that it was improperly filed
as a class suit. On March 5, 1999, JCHA, et al. filed their comment[8] on the motion
to dismiss to which respondents filed a reply.[9]

On March 3, 1999, the RTC issued an Order [10] granting the WPI and
required JCHA, et al. to post a bond.

On March 19, 1999, Fil-Estate, et al. filed a motion for
reconsideration[11] arguing, among others, that JCHA, et al. failed to satisfy the
requirements for the issuance of a WPI. On March 23, 1999, JCHA, et al. filed
their opposition to the motion.[12]

The RTC then issued its June 16, 2000 Omnibus Order, denying both the
motion to dismiss and the motion for reconsideration filed by Fil-Estate, et al.

Not satisfied, Fil-Estate, et al. filed a petition for certiorari and prohibition
before the CA to annul (1) the Order dated March 3, 1999 and (2) the Omnibus
Order dated June 16, 2000. They contended that the complaint failed to state a
cause of action and that it was improperly filed as a class suit. With regard to the
issuance of the WPI, the defendants averred that JCHA, et al. failed to show that
they had a clear and unmistakable right to the use of La Paz Road; and further
claimed that La Paz Road was a torrens registered private road and there was
neither a voluntary nor legal easement constituted over it.[13]

On July 31, 2001, the CA rendered the decision partially granting the
petition, the dispositive portion of which reads:

WHEREFORE, the petition is hereby partially GRANTED. The
Order dated March 3, 1999 granting the writ of preliminary injunction is
hereby ANNULLED and SET ASIDE but the portion of the Omnibus Order
dated June 16, 2000 denying the motion to dismiss is upheld.

SO ORDERED.[14]

The CA ruled that the complaint sufficiently stated a cause of action when
JCHA, et al. alleged in their complaint that they had been using La Paz Road for
more than ten (10) years and that their right was violated when Fil-Estate closed
and excavated the road. It sustained the RTC ruling that the complaint was
properly filed as a class suit as it was shown that the case was of common interest
and that the individuals sought to be represented were so numerous that it was
impractical to include all of them as parties. The CA, however, annulled the WPI
for failure of JCHA, et al. to prove their clear and present right over La Paz Road.
The CA ordered the remand of the case to the RTC for a full-blown trial on the
merits.

Hence, these petitions for review.

In G.R. No. 152272, JCHA, et al. come to this Court, raising the following
issues:
(A)

THE HONORABLE COURT OF APPEALS, IN HOLDING THAT A
FULL-BLOWN TRIAL ON THE MERITS IS REQUIRED TO
DETERMINE THE NATURE OF THE LA PAZ ROAD, HAD DEPARTED
FROM THE ACCEPTED AND USUAL COURSE OF JUDICIAL
PROCEEDINGS AS TO CALL FOR AN EXERCISE OF THE POWER OF
SUPERVISION.

(B)

THE HONORABLE COURT OF APPEALS, IN HOLDING THAT
THE PETITIONERS FAILED TO SATISFY THE REQUIREMENTS FOR
THE ISSUANCE OF A WRIT OF PRELIMINARY INJUNCTION, HAD
DECIDED NOT IN ACCORD WITH LAW AND WITH THE
APPLICABLE DECISIONS OF THE SUPREME COURT.[15]

In G.R. No. 152397, on the other hand, Fil-Estate, et al. anchor their petition
on the following issues:

I.

The Court of Appeals declaration that respondents Complaint
states a cause of action is contrary to existing law and
jurisprudence.

II.
The Court of Appeals pronouncement that respondents complaint
was properly filed as a class suit is contrary to existing law and
jurisprudence.

III.

The Court of Appeals conclusion that full blown trial on the
merits is required to determine the nature of the La Paz Road is
contrary to existing laws and jurisprudence.[16]
JCHA, et al. concur with the CA that the complaint sufficiently stated a
cause of action. They, however, disagree with the CAs pronouncement that a full-
blown trial on the merits was necessary. They claim that during the hearing on the
application of the writ of injunction, they had sufficiently proven that La Paz Road
was a public road and that commuters and motorists of their neighboring villages
had used this road as their means of access to the San Agustin Church, Colegio De
San Agustin and to SLEX in going to Metro Manila and to Southern Tagalog
particularly during the rush hours when traffic at Carmona Entry/Exit and Susana
Heights Entry/Exit was at its worst.

JCHA, et al. argue that La Paz Road has attained the status and character of
a public road or burdened by an apparent easement of public right of way. They
point out that La Paz Road is the widest road in the neighborhood used by
motorists in going to Halang Road and in entering the SLEX-Halang toll gate and
that there is no other road as wide as La Paz Road existing in the vicinity. For
residents of San Pedro, Laguna, the shortest, convenient and safe route towards
SLEX Halang is along Rosario Avenue joining La Paz Road.

Finally, JCHA, et al. argue that the CA erred when it voided the WPI
because the public nature of La Paz Road had been sufficiently proven and, as
residents of San Pedro and Bian, Laguna, their right to use La Paz Road is
undeniable.

In their Memorandum,[17] Fil-Estate, et al. explain that La Paz Road is
included in the parcels of land covered by Transfer Certificates of Title (TCT) Nos.
T-120008, T-90321 and T-90607, all registered in the name of La Paz. The
purpose of constructing La Paz Road was to provide a passageway for La Paz to its
intended projects to the south, one of which was the Juana Complex I. When Juana
Complex I was completed, La Paz donated the open spaces, drainage, canal, and
lighting facilities inside the Juana Complex I to the Municipality of Bian. The
streets within the subdivisions were then converted to public roads and were
opened for use of the general public. The La Paz Road, not being part of the Juana
Complex I, was excluded from the donation. Subsequently, La Paz became a
shareholder of FEEC, a consortium formed to develop several real properties in
Bian, Laguna, known as Ecocentrum Project. In exchange for shares of stock, La
Paz contributed some of its real properties to the Municipality of Bian, including
the properties constituting La Paz Road, to form part of the Ecocentrum Project.

Fil-Estate, et al. agree with the CA that the annulment of the WPI was
proper since JCHA, et al. failed to prove that they have a clear right over La Paz
Road. Fil-Estate, et al. assert that JCHA, et al. failed to prove the existence of a
right of way or a right to pass over La Paz Road and that the closure of the said
road constituted an injury to such right. According to them, La Paz Road is a
torrens registered private road and there is neither a voluntary nor legal easement
constituted over it. They claim that La Paz Road is a private property registered
under the name of La Paz and the beneficial ownership thereof was transferred to
FEEC when La Paz joined the consortium for the Ecocentrum Project.

Fil-Estate, et al., however, insist that the complaint did not sufficiently
contain the ultimate facts to show a cause of action. They aver the bare allegation
that one is entitled to something is an allegation of a conclusion which adds
nothing to the pleading.

They likewise argue that the complaint was improperly filed as a class suit
for it failed to show that JCHA, et al. and the commuters and motorists they are
representing have a well-defined community of interest over La Paz Road. They claim
that the excavation of La Paz Road would not necessarily give rise to a common right or
cause of action for JCHA, et al. against them since each of them has a separate and
distinct purpose and each may be affected differently than the others.
The Courts Ruling
The issues for the Courts resolution are: (1) whether or not the complaint states a
cause of action; (2) whether the complaint has been properly filed as a class suit;
and (2) whether or not a WPI is warranted.

Section 2, Rule 2 of the Rules of Court defines a cause of action as an act or
omission by which a party violates the right of another. A complaint states a cause
of action when it contains three (3) essential elements of a cause of action, namely:

(1) the legal right of the plaintiff,
(2) the correlative obligation of the defendant, and
(3) the act or omission of the defendant in violation of said legal right.[18]

The question of whether the complaint states a cause of action is determined
by its averments regarding the acts committed by the defendant.[19] Thus, it must
contain a concise statement of the ultimate or essential facts constituting the
plaintiffs cause of action.[20] To be taken into account are only the material
allegations in the complaint; extraneous facts and circumstances or other
matters aliunde are not considered.[21]

The test of sufficiency of facts alleged in the complaint as constituting a
cause of action is whether or not admitting the facts alleged, the court could render
a valid verdict in accordance with the prayer of said complaint.[22] Stated
differently, if the allegations in the complaint furnish sufficient basis by which the
complaint can be maintained, the same should not be dismissed regardless of the
defense that may be asserted by the defendant.[23]

In the present case, the Court finds the allegations in the complaint sufficient
to establish a cause of action. First, JCHA, et al.s averments in the complaint show
a demandable right over La Paz Road. These are: (1) their right to use the road on
the basis of their allegation that they had been using the road for more than 10
years; and (2) an easement of a right of way has been constituted over the said
roads. There is no other road as wide as La Paz Road existing in the vicinity and it
is the shortest, convenient and safe route towards SLEX Halang that the
commuters and motorists may use. Second, there is an alleged violation of such
right committed by Fil-Estate, et al. when they excavated the road and prevented
the commuters and motorists from using the same. Third, JCHA, et al.
consequently suffered injury and that a valid judgment could have been rendered in
accordance with the relief sought therein.

With respect to the issue that the case was improperly instituted as a class
suit, the Court finds the opposition without merit.
Section 12, Rule 3 of the Rules of Court defines a class suit, as follows:
Sec. 12. Class suit. When the subject matter of the controversy is
one of common or general interest to many persons so numerous that it is
impracticable to join all as parties, a number of them which the court
finds to be sufficiently numerous and representative as to fully protect the
interests of all concerned may sue or defend for the benefit of all. Any
party in interest shall have the right to intervene to protect his individual
interest.
The necessary elements for the maintenance of a class suit are: 1) the subject
matter of controversy is one of common or general interest to many persons; 2) the
parties affected are so numerous that it is impracticable to bring them all to court;
and 3) the parties bringing the class suit are sufficiently numerous or representative
of the class and can fully protect the interests of all concerned.[24]

In this case, the suit is clearly one that benefits all commuters and motorists
who use La Paz Road. As succinctly stated by the CA:

The subject matter of the instant case, i.e., the closure and
excavation of the La Paz Road, is initially shown to be of common or
general interest to many persons. The records reveal that numerous
individuals have filed manifestations with the lower court, conveying their
intention to join private respondents in the suit and claiming that they are
similarly situated with private respondents for they were also prejudiced
by the acts of petitioners in closing and excavating the La Paz Road.
Moreover, the individuals sought to be represented by private respondents
in the suit are so numerous that it is impracticable to join them all as
parties and be named individually as plaintiffs in the complaint. These
individuals claim to be residents of various barangays in Bian, Laguna and
other barangays in San Pedro, Laguna.
Anent the issue on the propriety of the WPI, Section 3, Rule 58 of the Rules
of Court lays down the rules for the issuance thereof. Thus:

(a) That the applicant is entitled to the relief demanded, and the
whole or part of such relief consists in restraining the commission or
continuance of the acts complained of, or in the performance of an act or
acts, either for a limited period or perpetually;

(b) That the commission, continuance or non-performance of the act
or acts complained of during the litigation would probably work injustice to
the applicant; or

(c) That a party, court, or agency or a person is doing, threatening, or
attempting to do, or is procuring or suffering to be done, some act or acts
probably in violation of the rights of the applicant respecting the subject of
the action or proceeding, and tending to render the judgment ineffectual.

A writ of preliminary injunction is available to prevent a threatened or continuous
irremediable injury to parties before their claims can be thoroughly studied and
adjudicated.[25] The requisites for its issuance are: (1) the existence of a clear and
unmistakable right that must be protected; and (2) an urgent and paramount necessity for
the writ to prevent serious damage.[26]For the writ to issue, the right sought to be protected
must be a present right, a legal right which must be shown to be clear and positive.
[27]
This means that the persons applying for the writ must show that they have an
ostensible right to the final relief prayed for in their complaint.[28]

In the case at bench, JCHA, et al. failed to establish a prima facie proof of
violation of their right to justify the issuance of a WPI. Their right to the use of La Paz
Road is disputable since they have no clear legal right therein. As correctly ruled by the
CA:

Here, contrary to the ruling of respondent Judge, private respondents
failed to prove as yet that they have a clear and unmistakable right over the La
Paz Road which was sought to be protected by the injunctive writ. They merely
anchor their purported right over the La Paz Road on the bare allegation that
they have been using the same as public road right-of-way for more than ten
years. A mere allegation does not meet the standard of proof that would warrant
the issuance of the injunctive writ. Failure to establish the existence of a clear
right which should be judicially protected through the writ of injunction is a
sufficient ground for denying the injunction.

Consequently, the case should be further heard by the RTC so that the parties can
fully prove their respective positions on the issues.

Due process considerations dictate that the assailed injunctive writ is not a
judgment on the merits but merely an order for the grant of a provisional and
ancillary remedy to preserve the status quo until the merits of the case can be
heard. The hearing on the application for issuance of a writ of preliminary
injunction is separate and distinct from the trial on the merits of the main
case. [29] The evidence submitted during the hearing of the incident is not
conclusive or complete for only a "sampling" is needed to give the trial court an
idea of the justification for the preliminary injunction pending the decision of the
case on the merits.[30] There are vital facts that have yet to be presented during the
trial which may not be obtained or presented during the hearing on the application
for the injunctive writ.[31] Moreover, the quantum of evidence required for one is
different from that for the other.[32]

WHEREFORE, the petitions are DENIED. Accordingly, the July 31,
2001 Decision and February 21, 2002 Resolution of the Court of Appeals in CA-
G.R. SP No. 60543 are AFFIRMED.

SO ORDERED.

JOSE CATRAL MENDOZA
Associate Justice
WE CONCUR:

Associate Justice
Chairperson


ESTELA M. PERLAS-BERNABE
Associate Justice

ATTESTATION

consultation before the case was assigned to the writer of the opinion of the Courts
Division.

Associate Justice

CERTIFICATION


RENATO C. CORONA
Chief Justice
[1]
Rollo (G.R. No. 152272), pp. 164-178. Penned by then Associate Justice Ruben T. Reyes (now a retired member
of this Court) with Associate Justice Mercedes Gozo-Dadole and Associate Justice Juan Q. Enriquez, Jr.,
concurring.
[2]
Id. at 218-219.
[3]
Id. at 144-148; rollo (G.R. No. 152397), pp. 139-143.
[4]
Rollo (G.R. No. 152272), pp. 117-143.
[5]
Id. at 64-74.
[6]
Rollo (G.R. No. 152397), pp. 272-275.
[7]
Id. at 591-606.
[8]
Id. at 612-622.
[9]
Id. at 623-638.
[10]
Rollo (G.R. No. 152272), pp. 144-148; rollo (G.R. No. 152397), pp. 139-143.
[11]
Rollo (G.R. No. 152272), pp. 95-116.
[12]
Id. at 117-143.
[13]
CA rollo, pp. 2-57.
[14]
Rollo (G.R. No. 152272), p. 178.
[15]
Id. at 362.
[16]
Rollo (G.R. 152397), p. 17.
[17]
Rollo (G.R. No. 152272), pp. 314-351.
[18]
Makati Stock Exchange, Inc. v. Campos, G.R. No. 138814, April 16, 2009, 585 SCRA 120, 126.
[19]
Goodyear Philippines, Inc. v. Sy, 511 Phil. 41, 49 (2005).
[20]
Jimenez, Jr. v. Jordana, 486 Phil. 452, 465 (2004).
[21]
Supra note 19 at 50.
[22]
Misamis Occidental II Cooperative, Inc. v. David, 505 Phil. 181, 189, (2005).
[23]
Makati Stock Exchange, Inc. v. Campos, supra note 18 at 126-127.
[24]
Oscar M. Herrera, I Remedial Law, 2000 ed., 390.
[25]
City of Naga v. Asuncion, G. R. No. 174042, July 9, 2008, 557 SCRA 528, 544.
[26]
Talento v. Escalada, Jr., G.R. No. 180884, June 27, 2008, 556 SCRA 491, 500.
[27]
Del Rosario v. Court of Appaels, 325 Phil. 424, 432, (1996).
[28]
Filipino Metals Corporations v. Secretary of Department of Trade and Industry, 502 Phil. 191, 201 (2005).
[29]
Commissioner of Internal Revenue v. Court of Appeals, 327 Phil. 1, 48, (1996).
[30]
Landbank of the Philippines v. Continental Watchman Agency Incorporated, 465 Phil. 607, 617, (2004).
[31]
Urbanes, Jr. v. Court of Appeals, 407 Phil. 856, 867, (2001).
[32]
Supra note 29.

THIRD DIVISION

APOLINARDITO C. QUINTANILLA G.R. No. 160613
and PERFECTA C. QUINTANILLA,

-versus- Chairperson,
AUSTRIA-MARTINEZ,
CORONA,*
NACHURA, and
REYES, JJ.
PEDRO ABANGAN and
DARYL'S COLLECTION INTL. INC., Promulgated:
Respondents.
February 12, 2008

x------------------------------------------------------------------------------------x

RESOLUTION

NACHURA, J.:

Before this Court is a Petition for Review on Certiorari[1] under Rule 45 of the
Rules of Civil Procedure seeking the reversal of the Court of Appeals (CA)
Decision[2] dated April 21, 2003, which affirmed the Decision[3] of the Regional
Trial Court (RTC), Branch 57 of Cebu City, dated June 21, 2000.
This controversy flows from a case for Easement of Right of Way filed by
petitioner Apolinardito C. Quintanilla (Apolinardito) and his mother, petitioner
Perfecta C. Quintanilla (Perfecta) against respondent Pedro Abangan (Pedro) and
respondent Daryl's Collection International, Inc. (DARYL'S).

Sometime in the 1960s, Perfecta bought Lot No. 3771-B-1-A, with an area of
2,244 square meters, located at Inayawan, Cebu City (the dominant estate) from
one Dionisio Abasolo, who formerly owned all the properties therein. Thereafter,
Perfecta donated the dominant estate to Apolinardito, who is now the registered
owner thereof.[4] Petitioners own QC Rattan Inc., a domestic corporation engaged
in the manufacture and export of rattan-made furniture. In the conduct of their
business, they use vans to haul and transport raw materials and finished products.
As they wanted to expand their business and construct a warehouse on their
property (the dominant estate), they asked for a right of way from Pedro sometime
in April 1994.

However, it appears that Pedro, who was the owner of Lot No. 3771-A-1,
containing an area of 1,164 square meters[5] (the servient estate) and a lot near the
dominant estate, sold the same to DARYL'S on March 24, 1994,[6] and thereafter,
DARYL'S constructed a warehouse over the servient estate, enclosing the same
with a concrete fence.

Petitioners, thus, sought the imposition of an easement of right of way, six (6)
meters in width, or a total area of 244 square meters, over the servient estate.

On June 21, 2000, the RTC dismissed the case for lack of merit. The RTC held that
petitioners failed to establish that the imposition of the right of way was the least
prejudicial to the servient estate. The RTC noted that there is already a concrete
fence around the area and that six (6) meters from the said concrete fence was a
concrete warehouse. Thus, substantial damage and substantial reduction in area
would be caused the servient estate. Moreover, the RTC observed that petitioners'
insistence on passing through the servient estate would make for easy and
convenient access to the main thoroughfare for their vans. Otherwise, if the right of
way were to be constituted on any of the other surrounding properties, their vans
would have to make a turn. On this premise, the RTC opined that mere
convenience to the dominant estate was not necessarily the basis for setting up a
compulsory easement of right of way.

Aggrieved, petitioners went to the CA on appeal.

In its Decision dated April 21, 2003, the CA affirmed the RTC Decision, holding
that the criterion of least prejudice to the servient estate must prevail over the
shortest distance. A longer way may, thus, be established to avoid injury to the
servient tenement, such as when there are constructions or walls which can be
avoided by a round-about way,[7] as in this case. Petitioners filed a Motion for
Reconsideration,[8] but the same was denied in the CA
Resolution[9] dated September 24, 2003.

Hence, the instant petition based on the following grounds:

a) IN A COMPULSORY EASEMENT OF RIGHT OF WAY, AS SET
FORTH IN THE PRECONDITIONS UNDER ARTICLES 649[10] AND
650[11] OF THE NEW CIVIL CODE, THE DETERMINATION OF THE LEAST
PREJUDICIAL OR LEAST DAMAGE TO THE SERVIENT ESTATE
SHOULD BE AT THE TIME OF THE FILING OF THE ORIGINAL
COMPLAINT AND NOT AFTER THE FILING, ESPECIALLY WHEN THE
OWNER OF THE SERVIENT ESTATE IS GUILTY OF ABUSE OF RIGHTS
CONSIDERED AS THE GREATEST OF ALL POSSIBLE WRONGS OR BAD
FAITH BY CONSTRUCTING A CONCRETE FENCE AND WAREHOUSE
THEREON THROUGH MISREPRESENTATION TO THE OFFICE OF THE
CEBU CITY BUILDING OFFICIAL THAT IT HAD GRANTED A RIGHT OF
WAY OF SIX (6) METERS TO PETITIONERS; AND

b) WHETHER OR NOT COMPLIANCE WITH THE PRECONDITIONS SET
FORTH IN ARTICLES 649 AND 650 OF THE NEW CIVIL CODE
IS SUPERIOR TO THE MERE CONVENIENCE RULE AGAINST THE
OWNER OF THE DOMINANT ESTATE.

Petitioners claim that DARYL'S constructed the concrete fence only after
petitioners filed the case for an Easement of Right of Way against Pedro on May
27, 1994. They submit that the criterion of least prejudice should be applied at the
time of the filing of the original complaint; otherwise, it will be easy for the
servient estate to evade the burden by subsequently constructing structures thereon
in order to increase the damage or prejudice.[12] Moreover, they pointed out that a
Notice of Lis Pendens was annotated on Pedro's
title. Thus, petitioners aver that DARYL'S is in bad
faith and is guilty of abuse of rights as provided under Article 19[13] of the New
Civil Code.[14]
On the other hand, DARYL'S counters that petitioners belatedly imputed bad faith
to it since petitioners' pre-trial brief filed with the RTC contained no allegation of
bad faith or misrepresentation. Moreover, DARYL'S reiterates its position that
establishing a right of way over the servient estate would cause substantial damage,
considering that a concrete fence has already been erected thereon. Most
importantly, DARYL'S submits that petitioners can have adequate ingress to or
egress from the dominant estate by passing through other surrounding vacant lots.
Lastly,
DARYL'S points out that when Perfecta bought the dominant estate from Dionisio
Abasolo, the surrounding lots were also owned by the latter.[15]

For his part, Pedro manifests that he is adopting all the defenses invoked by
DARYL'S in the belief that he is no longer a party to the instant case as he had
already sold the servient estate to DARYL'S and a title already issued in the latter's
name.[16]

The instant petition lacks merit.

We hold that Apolinardito as owner of the dominant estate together with Perfecta
failed to discharge the burden of proving the existence and concurrence of all the
requisites in order to validly claim a compulsory right of way against respondents.
[17]
It should be remembered that to be entitled to a legal easement of right of way, the

following requisites must be satisfied: (1) the dominant estate is surrounded by
other immovables and has no adequate outlet to a public highway; (2) proper
indemnity has been paid; (3) the isolation was not due to acts of the proprietor of
the dominant estate; and (4) the right of way claimed is at the point least
prejudicial to the servient estate.[18]

The fourth requisite is absent.

We are in full accord with the ruling of the CA when it aptly and judiciously held,
to wit:

As provided for under the provisions of Article 650 of the New Civil Code, the
easement of right of way shall be established at the point least prejudicial to the
servient estate, and, insofar as consistent with this rule, where the distance from
the dominant estate to a public highway may be the shortest. Where there are
several tenements surrounding the dominant estate, and the easement may be
established on any of them, the one where the way is shortest and will cause the
least damage should be chosen. But if these two circumstances do not concur in a
single tenement, as in the instant case, the way which will cause the least damage
should be used, even if it will not be the shortest. The criterion of least prejudice
to the servient estate must prevail over the criterion of shortest distance. The
court is not bound to establish what is the shortest; a longer way may be
established to avoid injury to the servient tenement, such as when there are
constructions or walls which can be avoided by a round-about way, as in the case
at bar.

As between a right of way that would demolish a fence of strong materials to
provide ingress and egress to a public highway and another right of way which
although longer will only require a van or vehicle to make a turn, the second
alternative should be preferred. Mere convenience for the dominant estate is not
what is required by law as the basis for setting up a compulsory easement. Even in
the face of necessity, if it can be satisfied without imposing the easement, the
same should not be imposed.

Finally, worthy of note, is the undisputed fact that there is already a newly opened
public road barely fifty (50) meters away from the property of appellants, which
only shows that another requirement of the law, that is, there is no adequate
outlet, has not been met to establish a compulsory right of way.

Such pronouncement by the CA is in line with this Court's ruling in Quimen v.
Court of Appeals,[19] where we held that as between a right of way that would
demolish a store of strong materials to provide egress to a public highway, and
another right of way which, although longer, will only require an avocado tree to
be cut down, the second alternative should be preferred.
As a rule, findings of fact of the CA, affirming those of the trial court,
are generally final and conclusive on this Court.[20] While this Court has recognized
several exceptions[21] to this rule, none of these exceptions finds application in this
case. Ergo, we find no cogent reason and reversible error to disturb the unanimous
findings of the RTC and the CA as these are amply supported by the law and
evidence on record.

WHEREFORE, the instant Petition is DENIED for lack of merit. The assailed
Court of Appeals Decision, dated April 21, 2003, and Resolution dated September
24, 2003 are hereby AFFIRMED. Costs against the petitioners.
SO ORDERED.

Associate Justice

WE CONCUR:

Associate Justice
Chairperson

MA. ALICIA AUSTRIA-MARTINEZ RENATO C. CORONA

RUBEN T. REYES
Associate Justice

ATTESTATION

I attest that the conclusions in the above Resolution were reached in consultation

Associate Justice

CERTIFICATION

Chairpersons Attestation, I certify that the conclusions in the above Resolution
were reached in consultation before the case was assigned to the writer of the

REYNATO S. PUNO
Chief Justice
* In lieu of Associate Justice Minita V. Chico-Nazario per Special Order No. 484 dated January 11, 2008.
[1] Dated October 24, 2003, rollo, pp. 3-18.
[2] Particularly docketed as CA-G.R. CV No. 68349, penned by Associate Justice Rodrigo V. Cosico with Associate
Justices Juan Q. Enriquez, Jr. and Hakim S. Abdulwahid, concurring; rollo p. 19-26.
[3] Particularly docketed as Civil Case No. CEB-16081; id. at 27-30.
[4] Covered by Transfer Certificate of Title (TCT) No. 133582; Folder of Exhibits, p. 1.
[5] Covered by TCT No. 99281; id at 29.
[6] Pedro's Manifestation; rollo, pp. 59-60.
[7] Citing II Arturo M. Tolentino, Commentaries and Jurisprudence on the Civil Code of the Philippines 390 (1992).
[8] Dated May 27, 2003; CA rollo, pp. 71-78.
[9] Rollo, p. 31.
[10] Article 649. The owner, or any person who by virtue of a real right may cultivate or use any immovable, which
is surrounded by other immovables pertaining to other persons and without adequate outlet to a public highway, is
Should this easement be established in such a manner that its use may be continuous for all the needs of the
dominant estate, establishing a permanent passage, the indemnity shall consist of the value of the land occupied and
the amount of the damage caused to the servient estate.
In case the right of way is limited to the necessary passage for the cultivation of the estate surrounded by others and
for the gathering of its crops through the servient estate without a permanent way, the indemnity shall consist in the
payment of the damage caused by such encumbrance.
This easement is not compulsory if the isolation of the immovable is due to the proprietor's own acts.
[11] Article 650. The easement of right of way shall be established at the point least prejudicial to the servient estate,
and, insofar as consistent with this rule, where the distance from the dominant estate to a public highway may be
shortest.
[12] Reply dated February 14, 2005; rollo, pp. 66-70.
[13] Article 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice,
give everyone his due, and observe honesty and good faith.
[14] Supra note 1.
[15] DARYL'S Comment dated February 11, 2004; rollo, pp. 44-50.
[16] Supra note 6.
[17] Costabella Corporation v. Court of Appeals, G.R. No. 80511, January 25, 1991, 193 SCRA 333, 340.
[18] Woodridge School, Inc., and Miguela Jimenez-Javier v. ARB Construction Co., Inc., G.R. No. 157285, February
16, 2007, citing Costabella Corporation v. Court of Appeals, supra.
[19] 326 Phil 969, 979 (1996).
[20] Solidbank Corporation/Metropolitan Bank and Trust Company v. Spouses Peter and Susan Tan, G.R. No.
167346, April 2, 2007, citing Bordalba v. Court of Appeals, 425 Phil. 407 (2002).
[21] The exceptions are: (1) when the findings are grounded entirely on speculation, surmises, or conjectures; (2)
when the inference made is manifestly mistaken, absurd, or impossible; (3) when there is grave abuse of discretion;
(4) when the judgment is based on a misapprehension of facts; (5) when the findings of facts are conflicting; (6)
when in making its findings, the CA went beyond the issues of the case, or its findings are contrary to the
admissions of both the appellant and the appellee; (7) when the findings are contrary to the trial court; (8) when the
findings are conclusions without citation of specific evidence on which they are based; (9) when the facts set forth in
the petition as well as in the petitioner's main and reply briefs are not disputed by the respondent; (10) when the
findings of fact are premised on the supposed absence of evidence and contradicted by the evidence on record; and
(11) when the CA manifestly overlooked certain relevant facts not disputed by the parties, which, if properly
considered, will justify a different conclusion.
SUPREME COURT
Manila

SECOND DIVISION

ST. MICHAEL SCHOOL OF G.R. No. 166301
CAVITE, INC. and SPOUSES
CRISANTO S. CLAVERIA and Present:
GLORIA M. CLAVERIA,
Petitioners, QUISUMBING, J.,*
CARPIO, Acting Chairperson,
CARPIO MORALES,
AZCUNA,*
- versus - TINGA, and
VELASCO, JR., JJ.
MASAITO DEVELOPMENT Promulgated:
CORPORATION and REXLON
REALTY GROUP, INC.,
Respondents. February 29, 2008
x-----------------------------------------------------------------------------------------x

DECISION

VELASCO, JR., J.:

The core issue in this petition for review under Rule 45 is what constitutes a
sufficient cause of action for a complaint for easement of right-of-way. Petitioners
assail the August 13, 2004 Resolution[1] of the Court of Appeals (CA) in CA-G.R.
SP No. 85558, dismissing their petition for defective verification and certification
of non-forum shopping, and the November 23, 2004 CA Resolution[2] rejecting
their plea for reconsideration. In effect, the dismissal of petitioners complaint in
Civil Case No. BCV-2001-60 before the Bacoor, Cavite Regional Trial Court
(RTC), Branch 19 was upheld by the CA.

Petitioner St. Michael School of Cavite, Inc. (St. Michael) is a duly
registered non-stock corporation[3] owned by petitioners-spouses Crisanto S.
Claveria and Gloria M. Claveria. It is represented by petitioner Gloria M. Claveria.
Respondents Masaito Development Corporation (Masaito) and Rexlon Realty
Group, Inc. (Rexlon) are domestic corporations that own, operate, and manage
Citihomes Molino IV, Bacoor, Cavite (Citihomes). St. Michael is located outside
the northern perimeter fence of Citihomes. Its passageway occupies a portion of
the 61-square meter lot described as Lot 4, Block 7, Phase 1 of Citihomes. The
gate to the school is located at the subdivisions northern perimeter fence and is the
only entrance and exit for the entire school population.

On July 28, 1998, Rexlon informed petitioners that the value of the Citihomes lots
when fully developed was PhP 3,872 per square meter as appraised by the Home
Insurance and Guarantee Corporation.[4] In a letter dated January 29, 2001, Masaito
advised petitioners to purchase Lots 1-9, Block 7, Phase 1, fronting the school at
PhP 3,579,000.[5] On April 6, 2001, Masaito sent another offer to sell Lot 4, Block
7 of the subdivision with the right-of-way through the private roads/drainage
facilities of Citihomes at the price of PhP 2 Million. Petitioners refused both
proposals, reasoning that the school did not need the entire area mentioned in the
first proposal. St. Michael also said that the second offer was grossly overpriced.
Petitioners, with four other homeowners, filed a complaint against respondents
before the Bacoor, Cavite RTC, Branch 19 entitled St. Michael School of Cavite,
Inc., Spouses Crisanto S. Claveria and Gloria M. Claveria, Pancho R. Navo,
Vivencio B. Asuncion, Isaurito S. Hernandez and Elias Namit v. Masaito
Development Corporation and Rexlon Realty Group, Inc. for easement of right-of-
way with damages under Article 649 of the Civil Code and preliminary injunction
and/or temporary restraining order (TRO).

The trial court issued a TRO on June 5, 2001[6] for 72 hours which was
extended to June 24, 2001 through the June 13, 2001[7] Order enjoining
respondents from blocking the passageway and school gate of St. Michael. On July
17, 2001, respondents filed a motion to dismiss on the ground that petitioners
failed to state a cause of action against them.

On July 29, 2002, the RTC issued an order,[8] dismissing for lack of cause of
action the complaint as to Pancho R. Navo, Vivencio Asuncion, Isaurito S.
Hernandez, and Elias Namit, as plaintiffs a quo, and denying petitioners
application for issuance of a writ of preliminary injunction.

On October 9, 2002, respondents filed a motion for partial reconsideration of
the July 29, 2002 RTC Order, on the grounds that (1) St. Michael was not a real
party in interest; and (2) petitioners-spouses failed to state a cause of action.

On September 25, 2003, the trial court granted respondents partial motion for
reconsideration and likewise dismissed the complaint of St. Michael and spouses
Claverias for failure to state a cause of action.[9] Petitioners filed an omnibus
motion/motion for reconsideration on December 18, 2003, reiterating their
defenses, which the RTC denied on May 5, 2004 for lack of merit.[10]

Petitioners filed before the CA a petition for certiorari with prayer for issuance of a
TRO and/or writ of preliminary injunction under Rule 65, seeking to annul and set
aside the May 5, 2004 RTC Order. The CA dismissed the petition. In its August
13, 2004 Resolution, the CA held that the petition for certiorari was dismissible for
the following infirmities:

1. The verification and certification of non-forum shopping [did] not fully comply
with [Section 4, Rule 7] of the Rules of Court, because it failed to give the
assurance that the allegations of the petition are true and correct based on
authentic records.

2) [S]aid verification and certification was signed by petitioner Gloria M. Claveria
in behalf of her co-petitioners without the accompanying special power of
attorney or board resolution authorizing her to sign the same x x x; and

3) Counsel for petitioners failed to indicate his Roll of Attorneys Number x x x.[11]

On September 6, 2004, petitioners filed an Urgent Motion for Reconsideration,
[12]
which the CA denied.[13] Hence, we have this petition that raises the following
issues:
(a)

THE HONORABLE COURT OF APPEALS SERIOUSLY ERRED IN ITS
INTERPRETATION AND APPLICATION OF SECTION 4, RULE 7 OF THE
1997 RULES OF CIVIL PROCEDURE WHICH, ACCORDING TO ITS
INTERPRETATION, REQUIRES PETITIONERS TO STILL SUBMIT AN
AMENDED VERIFICATION STATING THEREIN THAT THE
ALLEGATIONS OF THE PETITION ARE TRUE AND CORRECT NOT
ONLY OF THEIR PERSONAL KNOWLEDGE BUT ALSO BASED ON
AUTHENTIC RECORDS DESPITE CLEAR COMPLIANCE BY
PETITIONERS OF THE SAID PROCEDURAL REQUIREMENT THROUGH
THE SUBMISSION OF THE THREE (3) DOCUMENTS ATTACHED TO
THEIR URGENT MOTION FOR RECONSIDERATION DATED
SEPTEMBER 6, 2004.

(b)

THE HONORABLE COURT OF APPEALS ERRED IN ITS FINDINGS THAT
THE COURT A QUO DID NOT COMMIT GRAVE ABUSE OF DISCRETION
AMOUNTING TO LACK OR EXCESS OF JURISDICTION; THAT THE
PETITION IS PATENTLY WITHOUT MERIT; AND THE QUESTIONS
RAISED THEREIN ARE TOO [UNSUBSTANTIAL] TO REQUIRE
CONSIDERATION, THE SAID FINDINGS BEING MERE CONCLUSIONS
OF LAW UNSUPPORTED BY ANY STATEMENT OR FINDINGS OF FACT
AND CONTRADICTED BY THE PERTINENT PLEADINGS AND MOTIONS
OF THE CASE WHICH, IF PROPERLY CONSIDERED, WILL JUSTIFY A
DIFFERENT CONCLUSION AND DEMONSTRATE THAT PETITIONERS
ARE NOT ONLY REAL PARTIES IN INTEREST BUT HAVE VALID
CAUSES OF ACTION AGAINST RESPONDENTS.[14]

In sum, the twin issues for our consideration are: (1) Did the CA err in dismissing
the petition and ruling that Section 4, Rule 7 of the 1997 Rules of Civil Procedure
still requires petitioners to submit an amended verification that the allegations in
the petition are true and correct not only from their personal knowledge but also
based on authentic records, even if they had already submitted three other
documents attached to their September 6, 2004 motion for reconsideration?; and
(2) Did the CA err in finding that the trial court did not commit grave abuse of
discretion when it ruled that the petition has no merit, that the questions raised
were unsubstantial, and that the findings were conclusions of law unsupported by
facts and contradicted by the records?
On the first issue, petitioners aver that Gloria M. Claveria is expressly
authorized by her co-petitioners to represent them in filing the petition for
certiorari with the CA, evidenced by her Affidavit,[15] a Special Power of Attorney,
and Secretarys Certificate. They claim that there was no need for them to submit an
Amended Verification as the three aforementioned documents satisfied the
requirement.

In its November 23, 2004 Resolution, the CA stated:

Considering that petitioners did not cure the first deficiency mentioned in
Our August 13, 2004 Resolution dismissing the petition by submitting an
amended verification and stating therein that the allegations in the petition are
true and correct not only of their personal knowledge but also based on
authentic records, the Court is constrained to deny their Motion for
Reconsideration of said Resolution (emphasis supplied.)

The CA erred.
Petitioners correctly point out that paragraph 3 of Sec. 4, Rule 7 of the Rules of
Court uses the conjunction or not and:

A pleading is verified by an affidavit that the affiant has read the pleading
and that the allegations therein are true and correct of his personal
knowledge or based on authentic records x x x .A pleading required to be verified
which contains a verification based on information and belief, or lacks a proper
verification, shall be treated as an unsigned pleading.

Moreover, petitioners, in their September 6, 2004 Urgent Motion for
Reconsideration, attached the following:

(1) Affidavit executed by petitioner Gloria M. Claveria, stating:

1. That I am one of the petitioners in C.A.- G.R. SP [No.] 85558 for Certiorari
with Preliminary Injunction and Temporary Restraining Order pending
before the Special Tenth Division of the Court of Appeals;

2. That I hereby certify that I am duly authorized by my husband Crisanto S.
Claveria and the St. Michael School of Cavite, Inc. who are my co-petitioners in
the said case, to sign for all petitioners, to file said petition and represent them in
the proceedings;

3. That I further certify that I am one of the Incorporators, a Trustee the
incumbent Treasurer and the Directress of the Saint Michael School of Cavite,
Inc.;

4. That I am also the registered owner together with my husband Crisanto S.
Claveria, of the two (2) parcels of land upon which the said school stands and is a
direct party in interest in the case;

5. That I am the Founder of the said school, managed, supervised and oversaw its
operation from its opening up to the present and I have received, read and
understood all the documents annexed to the said petition;

6. That I also participated in the collation and completion of all the documents
attached as Annexes to the Petition for Certiorari filed before the Honorable Court
of Appeals and which were ALL previously submitted to the Regional Trial
Court, Branch 19 of Bacoor, Cavite and verified the truth and correctness of the
contents of the Petition from the records and files in my possession. Thus, I attest
to the truth and correctness of the allegations of the said Petition of my own
personal knowledge and based on authentic documents.[16]
(2) Special Power of Attorney[17] executed by petitioner Crisanto S. Claveria,
authorizing his spouse, Gloria M. Claveria, to represent him in the petition for
certiorari with the CA, make, sign, execute for and in his behalf all documents
necessary to the case; appear in court; and enter into a compromise agreement or
alternative mode of dispute settlement; and

(3) Secretarys Certificate[18] signed by Sanett M. Claveria, Corporate
Secretary of St. Michael, attesting that Mrs. Gloria M. Claveria is authorized to
represent St. Michael as approved in a special meeting of the board of directors
dated September 1, 2004.

We have held that the requirement regarding verification of a pleading is
intended to assure that the pleadings allegations are accurate, filed in good faith,
and not the product of the imagination or a matter of speculation.[19] While courts
and litigants alike are directed to abide strictly by the procedural rules,[20] we have
relaxed these rules on the basis of justifiable circumstances and substantial
compliance.[21]

Although petitioners did not file their amended pleading to include the
special power of attorney or board resolution authorizing Gloria M. Claveria to
represent her co-petitioners, they, however, attached to their Urgent Motion for
Reconsideration the special power of attorney; authorization signed by Crisanto S.
Claveria for Gloria M. Claveria to make, sign, and execute all documents
pertaining to the case; and the Board Resolution authorizing Gloria M. Claveria to
represent the corporation. The submission of authorization, special power of
attorney and certification issued by the corporate secretary is considered
substantial compliance of the requirements under Rule 7, Sec. 4 of the Revised
Rules of Court. We thus hold that petitioners were able to substantially comply
with the requirements under the Rules of Court.

On the second issue. In its July 29, 2002 Order, the RTC resolved
respondents Motion to Dismiss by holding that plaintiffs Pancho Navo, Vivencio
Asuncion, Isaurito Hernandez, and Elias Namit, as parents of some of the students
in petitioners school, have no cause of action to file the complaint for right-of-
way. It ruled that the claimant in such an action must be the owner of a dominant
estate and as such, the parents were not real parties-in-interest.

In its September 25, 2003 Order, the RTC resolved respondents Motion for
Reconsideration by ruling that St. Michael is not a registered owner of any
property that is the subject matter of the easement case, hence not a real party-in-
interest. It thus dismissed the case because petitioners failed to state a cause of
action against respondents.

Petitioners claim that the lower courts orders are baseless. They argue that
concrete evidence is necessary for a reliable judgment on the merits.

Respondents, on the other hand, contend that the initiatory pleading does not
aver the first two basic requisites for the establishment of a legal easement of right-
of-way: (1) that the dominant property is surrounded by estates of others and (2)
there is no adequate outlet to a public highway. The rest of the co-plaintiffs, they
point out, did not even allege if they are co-owners or possessors of any real right
over the estate of the petitioners-spouses which is a requisite for the right to
demand the establishment of a legal easement of right-of-way over a servient
estate.

We held in Dabuco v. Court of Appeals that what is determinative in a dismissal
for failure to state a cause of action is the sufficiency, not the veracity, of the
material allegations.[22] These allegations, hypothetically speaking, must aver
ultimate facts that constitute plaintiffs cause of action which may entitle plaintiff to
an advantageous decision as a matter of law.[23]

An examination of petitioners Complaint is necessary to determine if the
lower courts orders were in accordance with the law. Petitioners allegations in
support of plaintiffs demand for an easement of right-of-way read:

10. That the students, their parents, school teachers and school staff who
reside within Citihomes (nearly 50% of the school population) including the four
(4) plaintiffs namely Pancho R. Navo, Vivencio B. Asuncion, Isaurito S.
Hernandez and Elias Namit who are parents of certain school children of St.
Michael School of Cavite have incontrovertibly the full right of passage as well as
the free right to use the roads, lanes and pathways of Citihomes including those
leading to and from the school;

11. That, for the last five (5) years, apart from the major access road shown in the
Subdivision Plan, Annex A, the land area actually used by the school population
to and from the school, inclusive of the passageway and the school gate is only
a portion of a SIXTY-ONE (61) SQUARE METERS LOT described as Lot 4,
Block 7 of Citihomes owned and/or operated and managed by defendants;

12. That the school has only one (1) gate which serves as both entry and exit
points for the entire school population which defendants threaten to fence off and
to close;

13. That, other than the right of way fronting the school and shown in the
Subdivision plan, Annex A, there are no other developed nor practical entry and
exit points at the rear and at the two sides of the school site readily and
immediately accessible for use by the school population as right of way and/or
entrance to and exit from the school especially by those who reside
within Citihomes including the four (4) plaintiffs/parents abovementioned which
constitute almost 50% of the total school population;

xxxx

15. That through an appraisal report/letter dated October 16, 1997 and July 28,
1998 respectively, [plaintiffs] were advised by defendant Rexlon Realty Group,
Inc. that the appraisal value of lots at Citihomes when fully developed is
P3,872.00 per square meter x x x;

16. That through a letter dated June 16, 1998, defendant Rexlon Realty Group,
Inc. approved the use of the 61 square meters property described as Lot 4, Block 7
of Citihomes as a right of way for plaintiff St. Michael School of Cavite x x x;

17. That, however, under a letter dated January 29, 2001, [plaintiffs] were
advised by defendant Masaito Development Corporation that instead of the sixty-
one (61) square meter property, Lot 4, Block 7, plaintiffs should instead
purchase Lot 1-9, Block 7, phase I, of Citihomes with a total lot area of one
thousand and seventy-four (1,074) square meters at a total contract price of
P3,759,000.00 which lots are all fronting the school x x x;

18. That, despite Annexes D and D-1 of the complaint, on April 6,
2001, [plaintiffs] again received a new proposal from defendant Masaito
Development Corporation proposing that plaintiff should pay the sum of
P2,000.000.00 for the puchase of the sixty-one (61) square meters property, Lot 4,
Block 7, Phase I, of Citihomes, plus the right to pass through the private
roads/drainage facilities of said school x x x;

19. That plaintiffs do not need the entire 1,074 lot area covered by Lot 1-9, Block
7, Phase I, Citihomes which exceeds the requirements for the schools right of
way; while plaintiffs find unacceptable defendant Masaito Development
Corporations proposal for plaintiffs to pay the sum of P2,000,000.00 for the sixty-
one (61) square meter property, Lot 4, Block 7 of Phase I, Citihomes which
amount is clearly unconscionable, excessive, unreasonable and unjust;

20. That plaintiffs and the school population only require a portion of the sixty-
one (61) square meters property Lot 4, Block 7 of Phase I, Citihomes for their
permanent right of way and accept the price of P3,872.00 per square meter as
reasonable as quoted in the Home Insurance and Guaranty Corporations appraisal
report/letter, x x x;

21. That in support of plaintiffs application for the [above-described] right of way
plaintiffs further state:

21-A. That the St. Michael School of Cavite is surrounded by immovable
properties belonging to other persons including Citihomes owned and/or operated
and managed by herein defendants such that plaintiffs and the school population
have at present no immediate and adequate outlet to a public highway other than
the major Access Road and the sixty-one (61) square meters lot
of Citihomes described in the Subdivision Plan, x x x;

21-B. That plaintiffs are willing and able to pay the proper indemnity to
defendants pursuant to the provisions of the Civil Code;

21-C That the isolation of plaintiffs property is not due to plaintiffs own acts but
was caused by the expansion of the land area owned by Citihomes and the rapid
increase in the number of homeowners which now has reached more than a
thousand residents[.][24]

Three elements must be present for a complaint to state a cause of action: (1)
the legal right of the plaintiff, (2) the correlative obligation of the defendant, and
(3) the act or omission of the defendant violating said legal right.[25] For a
complaint to state a cause of action in an easement case, more specifically, Art.
649 of the Civil Code has laid down the following requirements: (1) the dominant
estate is surrounded by other immovables and has no adequate outlet to a public
highway; (2) there is payment of proper indemnity; and (3) the isolation is not due
to the acts of the proprietor of the dominant estate.

We rule that the Complaint satisfies these three elements and thus
sufficiently alleges a cause of action. The Complaint, first, asserts that petitioners
have a right to an easement of right-of-way that cuts across respondents
property; second, it refers to respondents correlative obligation not to fence off and
close the single gate which is used as the only entry and exit points of the school
population; and third, it refers to respondents expansion and excessive terms and
conditions, constituting the acts violating petitioners right. We thus hold that the
Complaints material allegations are enough to entitle petitioners to a favorable
judgment if these are assumed to be true.

The four corners of the initiatory pleading do not reveal any averment that
the properties in question are bounded by public roads and there is an adequate
access to a public highway. On the contrary, par. 13 of the Complaint alleges that
other than the right of way fronting the school and shown in the Subdivision Plan,
Annex A,[26] there are no other developed nor practical entry and exit points at the
rear and at the two (2) sides of the school site readily and immediately accessible
for use by the school population x x x.[27]

Pars. 11 and 21-A of the Complaint as aforequoted confusingly refer both to
a major access road and the sixty-one (61) square meter lot (Lot 4, Block 7 of
Citihomes) as an immediate and adequate outlet to the public highway. The
paragraphs are not equivocal about petitioner schools lack of an adequate outlet to
a public highway and give the impression that such road is an adequate outlet to a
public highway.

A complete examination of the Complaint, however, unmistakably shows
petitioners sufficient cause of action. To be more precise, Annexes A, A-1, and A-
2 plainly demonstrate that the requisites for a legal easement of right-of-way under
Art. 649 of the Code have been met.

Annex A of the Complaint which is the location plan of Citihomes clearly
shows that the schools only access to the public highway is Lot 4, Block 7 that
abuts the major access road of Citihomes which in turn is connected to the public
highway. The photographs (Annexes A-1[28] and Annex A-2[29] of the Complaint)
showing the school building and adjoining areas easily reveal that it is bounded by
other immovable properties, which explains why it only has one entry and exit
point. Without the right-of-way on Lot 4, Block 7 of Citihomes, the school has no
adequate access to a public highway. Annex A, as well as Annexes A-1 and A-2 of
the Complaint, supports petitioners averments as these show that the school has a
lone entry and exit point which is the right-of-way in front of the school. The
reference to a major access road, therefore, must be understood in the context of all
the allegations of fact contained in the Complaint. Petitioners cause of action is not
solely found in the paragraphs referred to. The annexes cited likewise form part of
the material allegations of the Complaint. Pars. 11 and 21-A of the Complaint
and Annexes A, A-1, and A-2 read together, the averments of the Complaint
amply show a sufficient cause of action as prescribed by Art. 649 of the Code.
However, in the September 25, 2003 Order dismissing the case, the RTC
made the following findings:

Finding the Motion for Partial Reconsideration filed by the defendants to
be well taken, it appearing that indeed the properties (the alleged dominant
estates) of plaintiffs Sps. Crisanto S. Claveria and Gloria M. Claveria are bounded
by public roads, hence, they have adequate outlet to a public highway. Likewise,
insofar as plaintiff St. Michael School of Cavite, Inc., it is not a real party in
interest considering that it is not the registered owner of any property subject
matter of the instant case.[30]

It is settled that a motion to dismiss hypothetically admits the truth of the
facts alleged in the complaint.[31] Such being the case, the RTC erred when it
apparently considered matters not embodied in the Complaint. The Complaint,
contrary to the lower courts Order, does not aver that the properties of petitioners-
spouses are bounded by public roads. The location plan and photographs of the
subject lot and the school building appended to the Complaint, without doubt,
demonstrate that the lot and school building are enclosed, not by public roads, but
by other lots in the subdivision.

The Court has previously held that it is not for the trial court to inquire into
the truth or falsity of a complaints allegations before a hearing on its merits. [32] In
ordering the dismissal, it is apparent that the trial court relied on matters not
encompassed by the Complaint. This is proscribed by the rules and jurisprudence.
The dismissal of the Complaint has thus no leg to stand on.

In the same matter, the trial court erred when it ruled that the school, not
being the registered owner of the subject lot, is not a real party-in-interest.

It will suffice under Art. 649 of the Civil Code that any person who by virtue
of a real right may cultivate or use any immovable which is surrounded by other
immovables pertaining to other persons and without adequate outlet to a public
highway, is entitled to demand a right of way. Clearly, the school is a real party-in-
interest since it has established a right to use the passageway for the benefit of its
students. More importantly, the records reveal that petitioners-spouses are the
owners of the lot where the school is located and they are the incorporators,
trustees, and officers of St. Michael.[33] They are also authorized to represent the
corporation in the complaint and subsequent actions.Thus, petitioners are real
parties-in-interest and we rule that the dismissal of the complaint is patently
erroneous and bereft of any legal basis. Petitioners must be allowed to pursue their
case before the trial court.

WHEREFORE, the petition is GRANTED. The assailed August 13, 2004 and
November 23, 2004 CA Resolutions in CA-G.R. SP No. 85558 and the July 29,
2002 and September 25, 2003 Orders of the Bacoor, Cavite RTC, Branch 19
are REVERSED and SET ASIDE. The RTC is directed to reinstate petitioners
complaint and conduct further proceedings in Civil Case No. BCV-2001-60.

SO ORDERED.

Associate Justice

WE CONCUR:
(On Official Leave)
Associate Justice
Chairperson

ANTONIO T. CARPIO ADOLFO S. AZCUNA
Acting Chairperson

CONCHITA CARPIO MORALES DANTE O. TINGA

ATTESTATION


ANTONIO T. CARPIO
Associate Justice
Acting Chairperson

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, and the Division Acting

REYNATO S. PUNO
Chief Justice

On official leave.

Additional member as per Special Order No. 485 dated February 14, 2008.
[1]
Rollo, pp. 46-47. Penned by Associate Justice Mariano C. Del Castillo and concurred in by Associate Justices
Edgardo P. Cruz and Magdangal M. De Leon.
[2]
Id. at 44-45.
[3]
Id. at 174.
[4]
Id. at 112.
[5]
Id. at 113.
[6]
Id. at 85-86.
[7]
Id. at 87-88.
[8]
Id. at 142-145.
[9]
Id. at 67.
[10]
Id. at 66.
[11]
Id. at 46.
[12]
Id. at 161-165.
[13]
Id. at 44-45.
[14]
Id. at 24-25.
[15]
Id. at 26.
[16]
Id. at 167.
[17]
Id. at 168.
[18]
Id. at 69.
[19]
Valdecantos v. People, G.R. No. 148852, September 27, 2006, 503 SCRA 474, 481-482.
[20]
Rural Bankers Association of the Philippines v. Tangal-Salvaa, G.R. No. 175020, October 4, 2007, 534 SCRA
721.
[21]
Valdecantos, supra at 482.
[22]
379 Phil. 939, 949 (2000).
[23]
Suyom, et al. v. Hon. Judge Collantes, et al., 161 Phil. 667 (1976).
[24]
Rollo, pp. 78-80.
[25]
Sta. Clara Homeowners Association v. Sps. Gaston, 425 Phil. 221 (2002).
[26]
Records, p. 12.
[27]
Id. at 78.
[28]
Id.
[29]
Id.
[30]
Rollo, p. 67.
[31]
Vergel De Dios v. Bristol Laboratories Phils., Inc., 154 Phil. 311 (1974).
[32]
Galeon v. Galeon, et al., 151 Phil. 565 (1973); citing Garcon v. Redemptorist Fathers, 123 Phil. 1192 (1966).
[33]
Rollo, pp. 26-27.

Supreme Court
Manila

THIRD DIVISION

JAIME L. YANEZA, G.R. No. 149322
Petitioner,
Present:

Chairperson,
- versus - AUSTRIA-MARTINEZ,
CHICO-NAZARIO,
NACHURA, and
REYES, JJ.

THE HONORABLE COURT OF
APPEALS, MANUEL A. DE JESUS Promulgated:
and WILHELMINA M. MANZANO,
Respondents. November 28, 2008
x-----------------------------------------------------------------------------------------x

DECISION

NACHURA, J.:

In this petition for certiorari and prohibition under Rule 65, Jaime L.
Yaneza, petitioner, assails the Court of Appeals denial of his Motion for Extension
of Time to File Petition for Review on the ground that it was filed after the lapse of
the reglementary period for filing the appeal.

Petitioner is the owner of a 603-square-meter parcel of land, denominated
as Lot 2730-A and situated along Calle Kay Rumagit, Sitio Haligionan, Brgy. San
Juan, Baras, Rizal. He purchased the property from a certain Rudy Llagas on June
19, 1990.

Respondents, Manuel A. de Jesus and Wilhelmina M. Manzano, are the
owners of Lot 2732 which is adjacent to Lot 2730-A. The respondents lot has no
access to the nearest road except through a road which they constructed over a
portion of Lot 2730-A.

On September 26, 1995, petitioner sent a letter to respondents informing
them that he is the owner of Lot 2730-A and that he does not agree with the use of
the portion of his lot as an access road because it will affect the configuration of
his property. As an option, petitioner offered to sell to the respondents the entire
property.[1]

Apparently, respondents did not agree to the proposition because two days
later, petitioner wrote another letter to them, offering instead a perpetual easement
of right of way (4 meters wide) and stating that he will prepare the necessary
document to facilitate the transaction.[2]

Instead of a deed of perpetual easement, it appears that petitioner and
respondents executed a Deed of Absolute Sale[3] on October 20, 1995 over a 175-sq
m portion of Lot 2730-A, to be used as an access road 5-meters wide, for a
consideration of P20,000.00. The Deed of Absolute Sale contained the following
terms and conditions:

1] The portion subject of this sale agreement is as per the sketch plan
attached herein as Annex A and made as an integral part of this instrument;

2] The total purchase for the aforesaid portion of lot shall be in the sum of
TWENTY THOUSAND (P20,000.00) PESOS, Philippine Currency, payable on
cash basis upon the signing and execution of this deed, the signature of the
VENDOR being his acknowledgment that he already received the said amount
satisfactorily;
3] The realty taxes and assessments on the lot subject of this sale
agreement, costs of preparation of the document of sale, all other taxes, cost of
subdivision survey to segregate the portion of lot, and all the incidental expenses
to facilitate issuance of the individual transfer certificate of titles for the resulting
lots shall be for the sole account and expense of the VENDEE;

4] The use of the aforesaid portion of lot sold shall be for the purpose of
the right of way of and for the abovesaid property of the VENDEE, whereby the
VENDOR, by virtue whereof, shall have the perpetual right and/or privilege to
use the same as right of way for his own purposes.

Almost a year later, or on September 12, 1996, petitioner informed
respondents that he is canceling the deed of sale by way of a Deed of
Cancellation[4] which he executed on his own.[5]

When respondents refused to honor the cancellation, petitioner filed a
Complaint[6] for Cancellation of Contract with the Municipal Circuit Trial Court
(MCTC) of Teresa-Baras on April 22, 1997. The complaint alleged that, contrary
to what was stated in the Deed of Absolute Sale, respondents constructed an access
road 8-m wide (with an area of 280 sq m); that the respondents have not complied
with the conditions stated in the Deed of Absolute Sale and the Deed of
Undertaking attached thereto; and that respondents have been dumping high piles
of gravel, sand and soil along the access road in violation of the condition in the
deed of sale that the access road will be used only for the purpose of a right of way.
The complaint prayed for the court to declare as canceled the grant of right of way
to respondents and to order them to pay moral and exemplary damages and
attorneys fees.

In their Answer with Counterclaims, respondents averred that they
purchased the disputed 280-sq m portion of Lot 2730-A from its previous owner,
Rudy Llagas, as early as March 2, 1994. After the sale, they immediately
constructed a 7 by 35-m road with a total area of 245 sq m, leaving a 1 by 35-m
strip along the western portion as an easement along the irrigation canal. However,
to buy peace and avoid any conflict with the petitioner, who was claiming to be the
new owner, respondents agreed to pay P20,000.00 in consideration of the
petitioners desistance from further pursuing his claim over the 280 sq m area.
Petitioner prepared the Deed of Absolute Sale and respondents agreed to sign it
without prejudice to the resolution of the civil case (Civil Case No. 777-M), filed
by Llagas against the petitioner, on the issue of the ownership of the property.[7]

Respondents narrated that, after they signed the Deed of Absolute Sale but
before they could deliver the P20,000.00, they discovered that it covered only 175
sq m, not 280 sq m. There was an immediate renegotiation between the parties and,
for an additional consideration of P40,000.00, petitioner agreed to sell the entire
280 sq m. Relying on the petitioners assurance that he will prepare a new deed of
sale to reflect the new agreement, respondents paid him the additional P40,000.00
as evidenced by an Acknowledgment Receipt. Despite several demands, petitioner
failed to present the new deed of sale.[8]

According to the respondents, petitioner initially allowed them peaceful
possession and use of the area even when he started constructing his house
adjacent to the access road. However, while petitioner was constructing his house,
a serious misunderstanding took place between petitioner and respondents
caretaker, Benjamin Manzano, brought about by the latters refusal to allow
petitioner to tap water and electricity from the respondents property. Petitioner
allegedly retaliated and took possession of the eastern half portion of the 280-sq-m
area by constructing a fence along the length of the access road, which reduced it
to a narrow passage that could not allow trucks to pass through. On account of this
dispute, Manzano, upon respondents authority, filed a complaint before
the Barangay Lupon to compel the petitioner to remove the fence but the petitioner
did not attend the conciliation proceedings. Respondents obtained from
the barangay a certification to file an action in court, but petitioner preempted
them by filing the instant case. Respondents pointed out that the petitioner did not
seek the intervention of the Barangay Lupon before he filed the instant case;
hence, the petitioners complaint should be dismissed for failure to state a cause of
action.[9]

In claiming damages, respondents alleged that the construction of the fence
caused them difficulties when they started developing their property because the
trucks that carried the necessary materials could not pass through the access road.
They purportedly incurred additional costs since they had to hire laborers to
manually carry the construction materials from the barangay road to the
construction site.[10]

Respondents further asserted that what was agreed upon was a sale and not
only an easement of right of way. They denied the existence of the Deed of
Undertaking which does not even bear their signatures. And respondents argued
that the deed of sale may not be canceled unilaterally by the petitioner since they
already acquired full ownership over the property by virtue thereof.[11]

Finally, respondents stressed that it is the petitioner who is actually enjoying
a right of way along the access road in compliance with the condition stated in the
Deed of Absolute Sale. It is the petitioner who violated the terms of the contract
when he obstructed the access road with the concrete fence he built thereon. For
this violation, petitioner should be denied his right of way over the access road.
Moreover, petitioners property abuts the barangay road; hence, there is actually no
need for him to be granted a right of way.
During trial, petitioner testified for himself and presented his brother, Cesar
Yaneza, as witness. Petitioner narrated that Cesar handed to him the P20,000.00
and that he constructed the iron fence during the latter part of 1996 because
respondents did not comply with the conditions set out in the Deed of Undertaking.
Cesar Yaneza testified that he was the one who delivered the Deed of Absolute
Sale to the office of respondent Manuel de Jesus in Manila and that the latter
requested that he leave the Deed of Undertaking so that his wife can also sign the
same, but he never returned the document despite several demands.
For the respondents, respondent Manuel de Jesus, Rudy Llagas and
Benjamin Manzano testified. Rudy Llagas admitted that he indeed sold to the
respondents the subject property which is on the western side; what he sold to the
petitioner was on the eastern side of his property. [12] Respondent Manuel de Jesus
swore that he and petitioner agreed on a price of P20,000.00 for the 5-m by 35-m
area and an additional P40,000.00 to increase the area to 8-m by 35-m, so that the
total consideration was P60,000.00. He claimed he had to agree to the additional
amount because by then he had already constructed the gate to, and trucks could
not enter, their property.[13] And finally, Benjamin Manzano attested that when
petitioner started constructing his house, petitioner asked him if he could tap water
and electricity from respondents property, but he did not agree. He said that, after a
few days from said incident, petitioner constructed the low level iron fence in the
middle of the road right of way.[14]

On September 6, 1999, the MCTC promulgated its decision dismissing the
complaint and granting the respondents counterclaims, thus:

In view of the foregoing considerations, this Court hereby resolves to
order the following:

1. To dismiss the complaint as well as the plaintiffs claim for damages
and attorneys fees;

2. For plaintiff to execute a new deed of absolute sale covering the
access road or road right of way of 8 meters wide by 35 meter long,
including the meter easement beside the irrigation canal; with a total
area of 280 sq. m. from the northwest portion of Lot 2730, now
covered by TCT No. 50181 of the Register of Deeds of Rizal, Morong
Branch, without prejudice to the outcome of Civil Case No. 777-M
filed by Rudy Llagas against plaintiff Jaime Yaneza;

3. To cancel and declare as null and void the plaintiffs right of way over
the access road of defendants;

4. For plaintiff to remove at his expense, the steel fence or structure he
caused to be constructed at about the middle of defendants access road
or found within the 280 sq.m. area that obstruct, impede or alter the
full and peaceful use by defendants of subject realty;

5. To restore defendants to the full, adequate and peaceful possession
and use of subject realty;

6. For plaintiff to pay to the defendants the following:

a. P1,000,000.00 as actual damages;
b. P1,300,000.00 as moral damages;
c. P300,000.00 as exemplary damages;
d. P300,000.00 as attorneys fees;
e. P30,000.00 as reimbursement for incidental litigation
expenses;
f. 6% interest on the actual damages from the time they
were incurred up to the time of finality of the decision;
g. 6% interest on the award for moral, exemplary,
attorneys fees and litigation expenses from the
promulgation of the decision until its finality;
h. Costs.

SO ORDERED.[15]

On January 5, 2001, the Regional Trial Court (RTC), Morong, Rizal Branch
78, rendered a Decision[16] on petitioners appeal affirming the MCTC Decision with
the modification that the monetary award (item no. 6 of the dispositive portion) in
favor of the respondents was deleted.

Respondents filed a motion for reconsideration with respect to the deletion
of the award of damages, but the same was denied for failure to include a Notice of
Hearing. Respondents filed a Petition for Relief from Judgment, the status of
which was not disclosed by the parties in this petition.

Meanwhile, petitioners counsel received a copy of the RTC Decision
on February 6, 2001. On February 9, 2001, he withdrew his appearance for the
petitioner. On February 22, 2001, petitioner, through his new counsel, filed an
Urgent Motion for Extension of Time to File Petition for Review praying that they
be given a period of 15 days from February 24, 2001, or until March 12, 2001,
within which to file the petition.

On February 28, 2001, the CA issued a Resolution[17] denying the Urgent
Motion for having been filed one day late and, consequently, dismissed the appeal.
On March 27, 2001, petitioner filed a Motion for Reconsideration and a Motion for
Leave of Court to Admit Petition for Review, but the CA denied the motions in its
Resolution[18] datedJuly 25, 2001.

Disgruntled with the CA Resolutions, petitioner filed this Petition
for Certiorari and Prohibition, raising the following issues:

WHETHER THE PETITION SHOULD BE GIVEN DUE COURSE IN THE
LIGHT OF THE CIRCUMSTANCES AFFECTING THE TIMELINESS OF
THE FILING THEREOF.

WHETHER THE APPEALED DECISION OF THE REGIONAL TRIAL
COURT WAS RENDERED AND WRITTEN AS REQUIRED BY THE 1987
PHILIPPINE CONSTITUTION AND THE RULES OF COURT.

WHETHER THE PLAINTIFF HAS NO CAUSE OF ACTION.

WHETHER THE PETITIONER MAY BE COMPELLED TO EXECUTE A
DEED OF CONVEYANCE AGAINST HIS WILL AND IN
VIOLATION OF HIS CONSTITUTIONAL RIGHTAGAINST
DEPRIVATION OF PROPERTY WITHOUT DUE PROCESS OF LAW, AND
THE CIVIL LAW AGAINST UNJUST ENRICHMENT.[19]

The petition has no merit.

In the interest of substantial justice, petitioner begs this Courts indulgence
for the late filing of his motion for extension of time, which he claims is due to an
honest mistake.

Certainly, we cannot ascribe grave abuse of discretion upon a court that
denies a motion for extension of time filed after the expiration of the reglementary
period to file a petition. A motion for extension of time to file a petition should be
filed prior to the expiration or lapse of the period set by law, otherwise, there is no
longer any period to extend and the judgment or order to be appealed from will
have become final and executory.[20] Once the judgment becomes final and
executory, the appellate court is without jurisdiction to modify or reverse it.

We have repeatedly pronounced that perfection of an appeal in the manner
and within the period prescribed by law is mandatory and jurisdictional.[21] The
failure to perfect an appeal is not a mere technicality as it deprives the appellate
court of jurisdiction over the appeal.[22] Hence, anyone seeking an exemption from
the application of the reglementary period for filing an appeal has the burden of
proving the existence of an exceptionally meritorious instance warranting such
deviation.[23] But none obtains in this case.
Even on the merits, we find the petition noticeably infirm. The petitioners
complaint for cancellation of the contract was correctly dismissed by the MCTC.

Petitioners cause of action for cancellation of the contract is based on a
breach of contract as provided in Article 1191[24] of the Civil Code and is properly
denominated rescission, or resolution under the Old Civil Code. It is grounded on
the respondents alleged noncompliance with the conditions embodied in the Deed
of Absolute Sale and the Deed of Undertaking. In particular, petitioner claims that
respondents constructed a road three meters wider than what was agreed upon in
the deed of sale and failed to comply with their undertaking to facilitate the
transfer of the title over the subject area.

To state the obvious, the construction of the road beyond the stipulated area
does not constitute a breach of contract. Breach of contract implies a failure,
without legal excuse, to perform any promise or undertaking that forms part of the
contract.[25] Although the contract specifically stated the area covered by the sale, it
did not contain a promise by the respondents that they will only occupy such area.
Albeit apparently wrong, petitioners cause of action should not have been based on
the contract of sale.

Neither could the respondent be faulted for not facilitating the transfer of the
title over the subject area. Respondents did not sign the Deed of Undertaking, and
thus, could not have assumed the obligations contained therein. Moreover,
considering that the respondents specifically denied the existence of the document
and petitioner failed to authenticate it, the RTC was correct in declaring that it has
no probative weight.

Besides, rescission of a contract will not be permitted for a slight or casual
breach but only for a substantial and fundamental breach as would defeat the very
object of the parties in making the agreement.[26] It must be a breach of faith that
destroys or violates the reciprocity between the parties.[27] The alleged breach by
the respondents was definitely not of such level and magnitude.

Most importantly, rescission of a contract presupposes the existence of a
valid and subsisting obligation. The breach contemplated in Article 1191 is the
obligors failure to comply with an existing obligation.[28] It would be useless to
rescind a contract that is no longer in existence. Here, we find that the contract of
sale sought to be canceled by the petitioner does not exist anymore; hence, the
filing of the petition for cancellation was an exercise in futility.

The records show that the parties original agreement, embodied in the Deed
of Absolute Sale, had already been superseded or novated by a new contract, albeit
an oral one, covering an increased area of 280 sq m. In his testimony, petitioner
admitted that he received from his brother, Cesar Yaneza, the P20,000.00 that
respondents paid. This, taken with the respondents narration of the circumstances
surrounding the signing of the deed of sale and the subsequent renegotiation for an
increased area, together with the Acknowledgment Receipt showing that an
additional P40,000.00 was paid to the petitioner, reasonably leads us to believe that
the parties had actually entered into a new agreement which covered the entire
280-sq m area where the access road was laid.

The new contract of sale between the parties is valid despite it not being
evidenced by any writing.[29] The requirement under the Statute of Frauds does not
affect the validity of the contract of sale but is needed merely for its enforceability.
In any case, it applies only to contracts which are executory, and not to those
which have been consummated either totally or partially,[30] as in the new contract
of sale herein.

The existence of the new contract of sale over the 280-sq m area therefore
having been established, it follows that the petitioner may be compelled to execute
the corresponding deed of sale reflecting this new agreement. After the existence
of the contract has been admitted, the party bound thereby may be compelled to
execute the proper document.[31] This is clear from Article 1357, viz.:

Art. 1357. If the law requires a document or other special form, as in the
acts and contracts enumerated in the following article [Article 1358], the
contracting parties may compel each other to observe that form, once the contract
has been perfected. This right may be exercised simultaneously with the action
upon the contract.

WHEREFORE, the petition is DISMISSED. The assailed CA Resolutions
dated February 28, 2001 and July 25, 2001 are AFFIRMED.

SO ORDERED.

Associate Justice

WE CONCUR:

Associate Justice
Chairperson

MA. ALICIA AUSTRIA-MARTINEZ MINITA V. CHICO-NAZARIO

RUBEN T. REYES
Associate Justice

ATTESTATION


Associate Justice

CERTIFICATION

Chairperson's Attestation, I certify that the conclusions in the above decision had

REYNATO S. PUNO
Chief Justice

[1]
Rollo, p. 83.
[2]
Id. at 84.
[3]
Id. at 126-128.
[4]
Id. at 92-95.
[5]
Id. at 91.
[6]
Id. at 76-79.
[7]
Id. at 97-99.
[8]
Id. at 99-100.
[9]
Id. at 100-102.
[10]
Id. at 102-103
[11]
Id. at 104-107.
[12]
Id. at 148.
[13]
Id. at 149.
[14]
Id.
[15]
Id. at 153-154.
[16]
Id. at 70-75.
[17]
Id. at 36.
[18]
Id. at 35.
[19]
Id. at 349.
[20]
Ditching v. Court of Appeals, 331 Phil. 665, 677 (1996).
[21]
Petilla v. Court of Appeals, G.R. No. 150792, March 3, 2004, 424 SCRA 254, 261.
[22]
Zaragosa v. Nobleza, G. R. No. 144560, May 13, 2004, 428 SCRA 410, 419.
[23]
Eda v. Court of Appeals, G.R. No. 155251, December 8, 2004, 445 SCRA 500, 528.
[24]
Article 1191 of the New Civil Code provides:
Art. 1191. The power to rescind obligations is implied in reciprocal ones, in case one of the obligors should
not comply with what is incumbent upon him.
The injured party may choose between the fulfillment and the rescission of the obligation, with the payment
of damages in either case. He may also seek rescission, even after he has chosen fulfillment, if the latter should
become impossible.
The court shall decree the rescission claimed, unless there be just cause authorizing the fixing of a period.
This is understood to be without prejudice to the rights of third persons who have acquired the thing, in
accordance with articles 1385 and 1388 of the Mortgage Law.
[25]
See Blacks Law Dictionary, Fifth Edition, p. 171.
[26]
Barredo v. Leao, G.R. No. 156627, June 4, 2004, 431 SCRA 106, 115.
[27]
Francisco v. DEAC Construction, Inc., G.R. No. 171312, February 4, 2008, 543 SCRA 644, 655.
[28]
Velarde v. Court of Appeals, 413 Phil. 360, 373 (2001).
[29]
See Article 1356 of the New Civil Code.
[30]
Swedish Match v. Court of Appeals, G.R. No. 128120, October 20, 2004, 441 SCRA 1, 22.
[31]
Cenido v. Apacionado, 376 Phil. 801, 820 (1999).
FIRST DIVISION
[G.R. No. 132709. September 4, 2001]
SPOUSES CAMILO L. SABIO, and MA. MARLENE A. LEDONIO-

SABIO, petitioners, vs. THE INTERNATIONAL CORPORATE BANK,
INC. (now UNION BANK OF THE PHILIPPINES), GOLDENROD,
INC., PAL EMPLOYEES SAVINGS AND LOAN ASSOCIATION,
INC., AYALA CORPORATION, LAS PIAS VENTURES, INC.,
FILIPINAS LIFE ASSURANCE COMPANY (now AYALA LIFE
ASSURANCE, INC.), AYALA PROPERTY VENTURES
CORPORATION, and AYALA LAND, INC., respondents.
DECISION
YNARES-SANTIAGO, J.:
Before us is a petition for review on certiorari assailing the decision of the Court of Appeals
in CA-G.R. CV No. 48870 which affirmed and modified the judgment of the Regional Trial
Court of Makati, Branch 65, in Civil Case No. 18540, an action for specific performance and
damages.
The object of the controversy is a portion of a vast tract of land measuring approximately
152,454 square meters, located at Tindig na Manga, Almanza, Las Pias City. Designated as Lots
2 and 3, and 6 (formerly covered by two Certificates of Title, namely: TCT Nos. 65161 and
65162), this vast estate was registered in the name of Las Pias Ventures, Incorporated (or LPVI).
In the early 1970s, the said property was the subject of several land registration, as well as
[1]
civil, cases.
On May 25, 1973, the spouses Gerardo and Emma Ledonio, one of the parties in LRC Case
No. PN-107 affecting the land, assigned to the spouses Camilo and Ma. Marlene Sabio (herein
petitioners) all their rights, interests, title and participation over a contiguous portion of the
subject property measuring 119,429 square meters, particularly that which was covered by TCT
No. 65162. For this purpose, a deed of assignment with assumption of mortgage was later
[2]
executed by the Ledonio spouses in favor of the Sabio couple on November 23, 1981. [3]
Similarly, while the subject property was still the object of several pending cases, the
International Corporate Bank, Inc. (or Interbank) acquired from the Trans-Resource Management
and Development Corporation all of the latters rights to the subject property by virtue of a deed
of assignment executed between them on July 12, 1984. [4]
Sometime thereafter, or on March 6, 1985, the Sabios and Interbank settled their opposing
claims by entering into a Memorandum of Agreement (or MOA) whereby the Sabios assigned,
conveyed and transferred all their rights over the parcel covered by TCT No. 65162 to Interbank,
with the express exception of a 58,000 square meter contiguous portion of said lot. The MOA
also provided, to wit:
x x x x x x x x x
2. That for and in consideration of the aforementioned assignment, conveyance and

transfer by the FIRST PARTY (i.e., the Sabios), the latter (SECOND
PARTY, i.e., Interbank) shall:
a. PAY to the FIRST PARTY the sum of SEVEN HUNDRED FIFTY THOUSAND
PESOS (P750,000.00), Philippine Currency, receipt of which in full is hereby
acknowledged by the FIRST PARTY from the SECOND PARTY;
b. Subject to the rights of the SECOND PARTY under the provisions of No. 4
hereunder, COMPLETE and PERFECT its ownership and title to the afore-described
three (3) parcels of land with all the improvements thereon, situated at Tindig Na
Manga (Almanza), Las Pias, Rizal (now Metro Manila), covered by Transfer
Certificate of Title No. S-65161-Metro Manila, Book T-328, Page 161 (formerly No.
190713-Rizal, Book T-1227, Page 113) and Transfer Certificate of Title No. S-65162-
Metro Manila, Book T-328, Page 162 (formerly No. 190714-Rizal, Book T-1227,
Page 114), AND, ASSIGN, CONVEY and TRANSFER unto and in favor of the
FIRST PARTY a CONTIGUOUS PORTION of the afore-described parcel of land,
with all the improvements thereon, covered by the aforementioned Transfer
190714-Rizal, Book T-1227, Page 114). The aforementioned CONTIGUOUS
PORTION referred to in paragraph 1 hereof with an area of FIFTY EIGHT
THOUSAND (58,000) SQUARE METERS, the exact location of which is, as far as
practicable, as indicated in the sketch plan, which is hereto attached as Annex D and
made an integral part hereof, LOT 6-B;
c. Bear and defray all costs, fees and expenses incidental to and/or connected with the
segregation, survey, registration and delivery to the FIRST PARTY of a new transfer
certificate of title in the name of the FIRST PARTY, free from all liens and
encumbrances, over the afore-described parcel of land herein assigned, conveyed and
transferred by the SECOND PARTY;
d. Constitute and grant and by these presents has CONSTITUTED and GRANTED
without indemnity whatsoever in favor of the FIRST PARTY and of said parcel of
land to be covered by a new transfer certificate of title in the name of the FIRST
PARTY with an area of FIFTY EIGHT THOUSAND (58,000) SQUARE METERS, a
permanent and perpetual RIGHT OF WAY sufficient for all the needs of said parcel
of land through out the properties already owned and/or to be acquired by the
SECOND PARTY, particularly the parcels of land covered by Transfer Certificate of
Title No. 85717, Transfer Certificate of Title No. S-65161-Metro Manila, Book T-
328, Page 161 (formerly No. 190703-Rizal, Book T-127, Page 113) and Transfer
190714-Rizal, Book T-1227, Page 114), it being understood that the right of way
herein contemplated shall not be less than TEN (10) meters in WIDTH. [5]
The said MOA was annotated on TCT Nos. 65161 and 65162 on March 8, 1985 pursuant to
paragraph 4 thereof. The same paragraph also granted Interbank the right to assign all its rights
and interests outlined in the MOA, provided that all the obligations of Interbank specified in the
aforequoted paragraphs 2.b, 2.c and 2.d shall also bind all of its assigns, heirs and
successors. Subsequently, Interbank transferred all its rights and interests to the Las Pias
Ventures, Incorporated (or LPVI). In turn, the portion covered by TCT No. 65161 designated as
Lot Nos. 2 and 3 were acquired from LPVI by the Ayala Group of Companies (herein
respondents) through a merger between LPVI and Ayala Land, Incorporated (or ALI), in whose
favor TCT Nos. T-41263 and T-41262 were issued on April 25, 1994.
Lot No. 6, then covered by TCT No. S-65162, was also subsequently transferred first to
LPVI, then to ALI, and a new title, TCT No. T-41261, was issued also on April 25, 1994.
Another contiguous parcel, then covered by TCT No. 85717, was acquired by the Ayala Group
sometime in 1993, which was eventually subdivided and retitled in favor of ALI. This entire
property became the site of what was known then as Ayala Las Pias Subdivision. Years later, this
first class residential subdivision was renamed Ayala Southvale.
Thereafter, a dispute arose concerning the 58,000 square meter contiguous portion subject of
the MOA that was to be conveyed and transferred back to the Sabios by Interbank. Also in
controversy was the permanent and perpetual right of way that Interbank was obligated to
constitute in favor of the Sabios 58,000 square meter portion. The Sabios were thereby
constrained to institute an action for Specific Performance and Damages against Interbank,
Goldenrod Incorporated, PAL Employees Savings and Loan Association, Incorporated or
(PESALA) and the Ayala Group of Companies comprised of the Ayala Corporation, LPVI,
Insular Life Assurance Company, Ltd., Filipinas Life Assurance Company, ALI, Ayala Property
Ventures, Incorporated (or APVI), and the Bank of the Philippine Islands (or BPI). BPI was later
dropped as a party-defendant.
The Regional Trial Court of Makati, Branch 64, in Civil Case No. 1854, summarized the
Sabios claims in their complaint, thus:
Plaintiffs claimed that defendant Interbank was obligated to complete and perfect its
ownership and title to the parcels of land so that Interbank could transfer to plaintiffs
the absolute ownership and title over the contiguous portion.
They also claimed that one of the commitments of defendant Interbank which induced
plaintiffs to execute the agreement without which plaintiffs would not have executed
was that defendant Interbank would clear the contiguous portion of all occupants and
wall-in the same, together with the parcels of land belonging to defendants. Allegedly,
the property had already been cleared, by defendant Ayala Group, of occupants except
for the contiguous portion thereof.
Plaintiffs alleged that defendants, particularly Ayala Group, failed to comply with
their commitments and obligations in the MOA specifically those arising from the
abovementioned provisions thereof.Hence, plaintiffs have been prevented from
utilizing for productive purposes the land.
They further alleged that they were constrained to obtain a loan from Interbank (Exhs.
E, E-1, F, F-1, G and G-1) where the contiguous portion of the property was used as
collateral (Exhs. H, H-1, I, I-1, J and J-1) and this loan is now deemed paid (Exhs. K,
L, M-2, N, O, P to P-2) and plaintiffs are now considered released. Plaintiffs claimed
Actual and Compensatory damages in the amount of P500,000.00 and Exemplary
Damages in the amount of P250,000.00. [6]
The defendants answer was summed up by the trial court as follows:
Defendants disclaimed liability. Defendants Ayala Corp., Ayala Life, ALI, APVI
(collectively referred to as Ayala Group), PESALA, and LPVI, claimed that they were
not privy to the MOA, the contract from which the alleged obligations arose. In the
transactions they were each involved in, subsequent to the MOA, pursuant to which
they each acquired the property which was originally transferred by the plaintiffs to
defendant Interbank, said property acquired did not include the contiguous portion
which plaintiffs claimed was the subject of non-compliance of the obligations agreed
upon. On the contrary, in each transaction, the contiguous portion was expressly
excluded in the corresponding contracts (Exhs. C-1, D-2, 2-Ayala, 5-6, 2-A-
PESALA), hence, plaintiffs have no cause of action against them and even assuming
that defendants were privy to the MOA, they would still have no obligation to clear
the contiguous portion of the property as there was no express or implied provision in
the MOA that the party to whom the property was transferred would clear the same. [7]
Sometime thereafter, the defendants submitted a Notice of Confession of Judgment and

Motion for Partial Decision Against Answering Defendant for the alleged purpose of securing an
entry of judgment against them while avoiding the formality, time and expense of ordinary
proceedings. In particular, the defendants confessed judgment with regard to the plaintiff spouses
prayer emanating from the MOA, and asked that judgment be rendered directing the defendants
to comply with their obligations as defined in the pertinent provisions of the MOA. Moreover,
the defendants signified willingness to abide by the MOA, and complete and perfect title to the
parcel of land, including that portion which was to be assigned to the plaintiff spouses. With
regard to that 58,000 square meter parcel, the defendants also acknowledged the obligation to
segregate that contiguous portion and deliver title thereto to the plaintiff spouses free from liens
and encumbrances.
However, the defendants also averred that fulfillment of its obligation under the MOA
became impossible due to the plaintiff spouses own acts. First, defendants posited that they were
ready to deliver the title to the 58,000 square meter parcel and had, in fact, prepared the Deed of
Conveyance required by the Register of Deeds, but the plaintiffs themselves refused to sign the
[8]
said deed unless the subject property was cleared of all squatters and other illegal occupants. The
defendants nevertheless repudiated plaintiffs claim that they (defendants) were obligated to clear
the said property of all squatters and occupants, much less to fence the said property, arguing that
no such obligation was imposed in the MOA. Secondly, the defendants noted that the property in
question became the subject of an action for recovery of ownership filed by the Ledonio spouses
against the Sabios. Consequently, the annotation of the notice of lis pendens caused to be
registered by the Ledonios on the titles hampered the delivery of the title covering the 58,000
square meter portion to the Sabios.
The defendants further admitted the obligation to grant an easement of right of way under
the MOA, manifesting that not only did the defendants constitute and grant such right of way,
but that they were also willing and prepared to provide an alternative choice at the pleasure of
the plaintiff spouses. Moreover, the mortgage obligations of the plaintiff spouses annotated on
[9]
the titles covering the 58,000 square meter portion had already been paid off by the defendants,
prompting the latter to seek a court order cancelling the Notice of Lis Pendens and annotation
[10]
of the MOA on the titles covering the subject parcel of land.

The issues having been joined, the trial court focused on the primordial matter of contention,
that is: Whether or not the defendants had the obligation to clear the subject 58,000 square meter
portion of all occupants and to fence the said premises, before conveyance of the property can be
considered as full compliance with the obligation imposed upon the defendants under the
MOA. The trial court also sought to address the preliminary issue of whether or not an order
directing the cancellation of the annotation of the MOA and notices of lis pendens on the titles
covering the subject property was warranted.
The trial court ruled in favor of the defendants, finding that the MOA did not impose,
whether expressly or impliedly, on Interbank and its transferees the obligation to clear the
subject 58,000 square meter portion of squatters and other illegal occupants. Be that as it may,
the trial court awarded actual and exemplary damages to the plaintiff spouses for losses they
incurred due to the defendants delay in complying with the MOA, considering that the
defendants filed their confession of judgment only after the lapse of six (6) years from the filing
of the action. More particularly, the trial court disposed as follows:
In view of the foregoing, Defendant Ayala Group is ordered to pay plaintiffs Camilo
and Marlene Sabio P500,000.00 in actual damages and P250,000.00 in exemplary
damages. Plaintiffs, however, are directed to specifically comply with the obligations
under the MOA by executing a Deed of Conveyance upon payment by the defendant
of the foregoing amount. The Register of Deeds is directed to cancel the notice of lis
pendens as regards this case, and the annotation of the subject Memorandum of
Agreement, both of which are annotated on TCTs Nos. T-5331 to T-5334, the TCTs
covering the contiguous portion of the property.
Costs against defendant Ayala Group. [11]
The opposing parties filed their respective motions for reconsideration, but both were denied
by the trial court. Consequently, all the parties filed separate appeals before the Court of
Appeals.Nevertheless, the trial court issued an order granting the defendants motion for partial
immediate execution pending appeal by directing the Register of Deeds to immediately cancel
and/or cause the cancellation of the notice of lis pendens and other annotations as regards this
case and the annotation of the Memorandum of Agreement on TCT Nos. T-5331 to T-5334 and
titles derived therefrom.[12]
Meanwhile, in their appeal before the Court of Appeals, the Sabios (plaintiffs-appellants)
ascribed the following errors to the trial court:
I. The trial court erroneously disregarded the other provisions and parts of the MOA which
could have evinced the reasons for, and the circumstances attendant to, the execution of the
said MOA.
II. The trial court erred in not finding that the defendants-appellants (Ayala Group of
Companies) are obligated to perfect and complete ownership and title to the entire property
covered by TCT No. T-5331, including that portion which the defendant-appellants must
assign, convey and transfer to the plaintiffs-appellants (Sabio spouses).
III. The trial court erred in failing to appreciate the testimony of plaintiff-appellant Camilo L.
Sabio to the effect that Interbank and Ayala Investment and Development Corporation
would enter into a joint venture to develop the entire parcel, including the surrounding real
estate, into a first class residential subdivision, necessitating the removal of all illegal
occupants and enclosing the perimeters of the said property with a wall that would include
the 58,000 square meter portion pertaining to the Sabio spouses.
IV. The trial court erred in its interpretation of the phrase free from all liens and encumbrances
as appearing in the MOA, by invoking inapplicable jurisprudence when it is the intention of
the parties to the MOA, in using said phrase, that should prevail.
V. The trial court erred in not finding that all eighteen (18) parcels of land, comprising what
was then known as the Ayala Las Pias Subdivision, covered by eighteen (18) titles in the
name of LPVI, are all servient estates referred to in paragraph 2.d of the MOA.
VI. The trial court erred in not ordering the defendants-appellants to cause the annotation of the
easement of right of way on all eighteen (18) titles.
VII. The trial court erred in ordering the cancellation of the annotation of the MOA and Notices
of Lis Pendens on LPVIs TCT Nos. T-5331 to 5334.
VIII. The trial court erred in compelling the plaintiffs-appellants Sabios to sign the draft deed of
conveyance when said document was a gross violation of paragraphs 2.b, 2.c, and 2.d of the
MOA.
IX. While the trial court was right in concluding that the Sabio spouses suffered damages, their
losses could not be compensated as actual damages, the same being incapable of accurate
pecuniary estimation.
X. The trial court committed grave abuse of discretion amounting to lack or excess of
jurisdiction in issuing the order dated September 21, 1994 directing the cancellation of the
annotation of the MOA and the Notices of Lis Pendens on LPVIs titles.[13]
In contrast, the defendants-appellants merely impugned the trial courts judgment for having
awarded actual and exemplary damages to the plaintiffs-appellants Sabio spouses, while failing
to award damages in their (defendants-appellants) favor.
On April 30, 1997, the Court of Appeals rendered the decision subject of the instant petition
for review, affirming with modification the trial courts ruling. The Court of Appeals affirmed the
trial courts conclusion that under the MOA, the Interbank and the defendants-appellants did not
assume the obligation to clear the subject contiguous portion of the land of occupants and to wall
in the same. The Court of Appeals further agreed with the trial courts ruling that since the
[14]
intentions of the parties to the MOA were clearly worded in the provisions they expressly
stipulated on, there was no reason to interpret the MOA differently. [15]
The Court of Appeals also rejected the Sabios position that the purpose and spirit of the
establishment of a right of way in their favor under paragraph 2.d was to grant them the same
rights as any homeowner would have to freely pass through all the roads in the proposed
subdivision. The Court of Appeals ruled that the phrase permanent and perpetual right of way
must be construed in its ordinary and accepted signification, that is, to provide ingress to, and
egress from, the dominant estate, as well as to provide adequate and convenient passage to and
from the nearest highway. The defendants-appellants having complied with the obligation to
establish the right of way, the Court of Appeals determined that there was no need to annotate
the easement on the titles not affected by said road right of way. In fact, while the MOA
mentioned only TCT Nos. 65161 and 65162, which were later replaced by TCT Nos. 5333 and
5331, no other titles were mentioned.
Finally, while the Court of Appeals ruled that the defendants-appellants are not entitled to
damages, the said court reversed the trial courts award of damages to the Sabios, concluding that
their claim for damages, whether actual or exemplary, was unsubstantiated and devoid of legal
basis.
Hence, the Court of Appeals rendered judgment decreeing:
WHEREFORE, the judgment appealed from is AFFIRMED with the

MODIFICATION that the awards for actual and exemplary damages in favor of the
plaintiffs are hereby SET ASIDE.
SO ORDERED. [16]
After a careful and thorough disquisition of the facts of this case and the arguments raised in
this petition, we find no reversible error on the part of the Court of Appeals. In this petition for
review before us, petitioner attributed to the Court of Appeals ten (10) alleged errors:
I. The Court of Appeals acted contrary to law and jurisprudence in affirming the decision of the
trial court directing the petitioners to affix their signatures to the draft deed of conveyance
(Exhibits CC thru CC-4, EEEE thru EEEE-4 and 4-Ayala), and in releasing respondents
from their obligations under paragraphs 2.b, 2.c, and 2.d of the MOA. Petitioners are
justified in refusing to affix their signatures to said draft.
II. The Court of Appeals acted contrary to law and jurisprudence in affirming the ruling of the
trial court that the mere execution of the draft deed of conveyance (Exhibits CC thru CC-4,
EEEE thru EEEE-4 and 4-Ayala) prepared sometime in January 1990 by respondents Ayala
Group of Companies, successors-in-interest of respondent The International Corporate Bank,
Inc. (now Union Bank of the Philippines), pursuant to paragraph 4 of the MOA, as second
party, for the signature of the petitioners as first party, constitutes sufficient and valid
compliance with the commitment and obligation of the second party to assign, convey and
transfer unto and in favor of the first party the aforementioned contiguous portion --- Lot 6-
B, Psu-80886 (Exhibits A-34, II-1, 1-A-Ayala and 6-A-Ayala) --- with all the improvements
thereon as mandated by the provisions of paragraph 2.b of the MOA, despite the fact that,
admittedly, said Lot 6-B, Psu 80886 (Exhibits A-34, II-1, 1-A-Ayala and 6-A-Ayala) is still
in the hostile and adverse actual occupation and possession of third parties. More so, because
paragraph 2.b of the MOA mandates that respondents Ayala Group of Companies shall
assign, convey and transfer unto and in favor of the petitioners not only the aforementioned
Lot 6-B, Psu 80886 (Exhibits A-34, II-1, 1-A-Ayala and 6-A-Ayala) but also all the
improvements thereon.
III. The Court of Appeals acted contrary to law and jurisprudence in utterly disregarding the
import and significance of the premises or Whereases of the MOA and the various annexes
thereto forming integral parts thereof (Exhibits A-6 thru A-9, A-10 thru A-15, A-16 thru A-
22, A-23 thru A-26, A-27 thru A-30, A-31 thru A-33, and, A-35 thru A-46), evidencing the
reasons behind and the circumstances surrounding the execution thereof, so that the court
may be placed in the position/situation of the parties thereto at the time the agreement was
executed.
IV. The Court of Appeals acted contrary to law and jurisprudence in not holding that --- as
expressly agreed and stipulated in paragraph 2.b of the MOA (Exhibits A thru A-5 and 1-
Ayala) Psu-80886 (Exhibits A-34, II-1, 1-A-Ayala and 6-A-Ayala) with all the
improvements thereon, respondents Ayala Group of Companies are mandated to first
complete and perfect their ownership and title to the entirety to the afore-described Lot 6,
Psu 80886 with all the improvements thereon, earlier covered by T.C.T. No. S-65162-Metro
Manila, Book T-328, Page 162, in the name of CPJ Corporation, later by T.C.T. No. T-5331-
Las Pias, Metro Manila, Book 27, Page 131 in the name of respondent Las Pias Ventures,
Inc. (Exhibits KK thru KK-3 and 3-Ayala) and now covered by T.C.T. No. T-41261-Las
Pias, Metro Manila, Book 207, Page 61 in the name of respondent Ayala Land, Inc.,
including the aforementioned Lot 6-B, Psu-80886 (Exhibits A-34, II-1, 1-A-Ayala and 6-A-
Ayala) which respondents Ayala Group of Companies are committed and obligated to
assign, convey and transfer unto and in favor of petitioners.
V. The Court of Appeals acted contrary to law and jurisprudence in disregarding the legal effect
upon paragraph IV of the second amended and supplemental complaint dated 23 April 1990
of the confession of judgment made on 18 June 1993 and the statement made by respondents
Ayala Group of Companies on 05 November 1993 --- the first day of the hearing of the
above-entitled case --- both of which constitute judicial admissions contemplated by Section
4, Rule 129, Part IV (New Rules of Evidence) of the Rules of Court.
VI. The Court of Appeals acted contrary to law and jurisprudence in disregarding the following
intention of the parties to the MOA as evidenced by the annexes thereto (Exhibits A-6 thru
A-9; A-10 thru A-15; A-16 thru A-22; A-23 thru A-26; and A-35 thru A-46) in the use of the
phrase free from all liens and encumbrances in paragraph 2.c thereof: --- free from any and
all liens/encumbrances and/or problems of whatever kind and nature, including adverse
claims, notices of lis pendens, and/or claims of occupants/possessors who were not parties to
any of the cases mentioned in the aforementioned documents referred to in the
aforementioned annexes.
VII. The Court of Appeals acted contrary to law and jurisprudence in holding that the two roads
right of way (Exhibits 6-B and 6-C) --- confined and limited to Lot 10, Psu-80886 --- then
covered by T.C.T. No. 85717 and later by T.C.T. No. T-5332-Las Pias, Metro Manila, Book
27, Page 132 (Exhibits LL thru LL-2 and 3-Ayala) in the name of respondent Las Pias
Ventures, Inc., --- proposed by respondents Ayala Group of Companies constitute sufficient
and valid compliance with the mandate of paragraph 2.d of the MOA, and, in releasing
respondents Ayala Group of Companies from their commitment and obligation of complying
therewith.
VIII. The Court of Appeals acted contrary to law and jurisprudence in affirming the decision of
the trial court directing the cancellation of the annotation of the MOA and of the notices of
lis pendens on the following Transfer Certificates of Title: T.C.T. No. T-5331-Las Pias,
Metro Manila, Book 27, Page 131 (Exhibits KK thru KK-3 and 3-Ayala); T.C.T. No. T-
5332-Las Pias, Metro Manila, Book 27, Page 132 (Exhibits LL thru LL-2 and 3-A-Ayala);
T.C.T. No. T-5333 (Exhibits MM thru MM-2 and 3-B-Ayala); and T.C.T. No. T-5334-Las
Pias, Metro Manila, Book 27, Page 134 (Exhibits NN thru NN-2 and 3-C-Ayala); and, in not
directing that the judgment in the above-entitled case be annotated on all the eighteen (18)
Transfer Certificates of Title covering a total of eighteen (18) parcels of land earlier known
as the Ayala Las Pias Subdivision and now as Ayala Southvale.
IX. The Court of Appeals acted contrary to law and jurisprudence in disregarding the legal
effect upon paragraphs IV, XII, XIII and XIV of the second amended and supplemental
complaint dated 23 April 1990 of the confession of judgment made on 18 June 1993 by
respondents Ayala Group of Companies and their statement made on 05 November 1993 ---
the first hearing of the above-entitled case --- both of which constitute judicial admissions
contemplated by Section 4, Rule 129, Part IV (New Rules of Evidence) of the Rules of
Court.
X. In affirming the order issued by the trial court on 21 September 1994, acting with grave
abuse of discretion amounting to lack or excess of jurisdiction, the Court of Appeals likewise
acted with grave abuse of discretion amounting to lack or excess of jurisdiction.
We shall deal with these alleged errors, not in numerical order, but by subject matter, for
clarity and better articulation of the issues involved.
The first matter of contention is the Memorandum of Agreement (MOA) between the
petitioners (spouses Sabio) and Interbank. The petitioners posit that while the MOA is explicit
[17]
in requiring Interbank, and the respondents as its transferees, to complete and perfect ownership
and title to the entire estate, including improvements thereon, the court a quo and the Court of
Appeals failed to compel the respondents to abide by their commitment to assign, convey and
transfer the subject 58,000 square meter portion to the petitioners free from all liens and
encumbrances.
It is their contention that the presence of illegal occupants and the existence of unauthorized
improvements on the subject parcel negates the respondents claim that they have completed and
perfected their ownership and title over said property. The fact that the subject parcel is
possessed and occupied by squatters is a clear indication that the respondents were never in
possession. Before the respondents can assign, convey and transfer title to the subject parcel,
they must also be able to place the petitioners in possession thereof since possession is a
necessary attribute of ownership. Thus, for the petitioners, there must first be removal of the
[18]
illegal occupants and unauthorized structures, and the subject parcel should be walled-in before
said property is transferred by the respondents to them. Otherwise, such transfer and conveyance
would be meaningless, illusory and impracticable.
The petitioners also contend that under the circumstances, any conveyance of the subject
parcel by the respondents would not be free from all liens and encumbrances as stipulated in
paragraph 2.c of said MOA. Their premise is that the presence of squatters and unauthorized
improvements should be considered a lien or encumbrance on the subject parcel, even including
such other problems as adverse claims, notices of lis pendens, and claims of other occupants and
possessors who were not parties to the cases involving the subject parcel.
Consequently, the petitioners assail the alleged failure of the court a quo and the Court of
Appeals to: (1) consider the intention of the parties as manifested in the annexes to the MOA;
and (2) to give significance to the premises and whereas clauses of the MOA in the interpretation
of the phrase free from all liens and encumbrances in paragraph 2.c of the MOA. These related
[19]
matters concerning the intention of the parties to the MOA, the stipulations in the annexed
documents, and the interpretation of the phrase free from all liens and encumbrances were earlier
raised by the petitioners in their appeal before the Court of Appeals, advancing the same
[20]
arguments and premises already discussed in the case below.

The trial court dealt exhaustively on these issues, finding that:
However, defendant Interbank has no obligation to clear the contiguous portion of the

land of occupants and to wall-in the same for nothing in the MOA obligates Interbank
to do so. Plaintiffs alleged that the clearing and walling-in of occupants was a
principal commitment and inducement without which plaintiffs would not have
executed the MOA. If such were the case, a provision to that effect should have been
expressly stipulated in the MOA or at least implied therein. Plaintiff Camilo Sabio is a
member of the bar who engaged in the practice of law for over twenty years and is
currently holding public office. In drafting the MOA and/or agreeing to the
stipulations in the same, a person of his stature could have been more
circumspect. The occupants were already in the contiguous portion of the property
when the MOA was executed and if plaintiffs had wanted to ensure that defendant
Interbank would take responsibility for clearing the property of occupants, they could
have specifically provided for it.
Plaintiffs claimed that the obligation to clear and wall-in the occupants was implied in
the provisions of the MOA, to complete and perfect ownership and title to the land
and to (transfer) to plaintiffs the contiguous portion with all improvements and to
deliver the new TCT free from all liens and encumbrances. This court finds that there
is no implication of that sort. If the terms of a contract are clear and leave no doubt
upon the intention of the contracting parties, the literal meaning of the stipulations
shall control. If the words appear contrary to the evident intention of the parties, the
latter shall prevail over the former. (Art. 1370, Civil Code of the Philippines). The
evidence does not show that the parties had intentions other than those commonly
understood from the aforementioned terms in the MOA. The plaintiffs have failed to
prove that the intention of the parties was other than that expressed by the literal
meaning of the terms of the MOA.
Plaintiffs further alleged that the obligations to clear and wall-in occupants and to
secure the cancellation of the Notice of Lis Pendens regarding the case of Ledonio v.
Sabio annotated on the TCTs of the contiguous portion of the property are included in
the obligation to deliver the new TCT free from all liens and encumbrances, and that
the obligation to clear the occupants shanties is deemed included in the obligation to
complete and perfect ownership and title to the land and to transfer to plaintiffs the
contiguous portion with all improvements, the shanties being deemed included in the
term improvements. This allegation is untenable. Words which may have different
significations shall be understood in that which is most in keeping with the nature and
object of the contract (Art. 1375, Civil Code of the Philippines), otherwise, it is
presumed the words were used in their primary and general acceptation.
Occupation by the occupants of the contiguous portion of the property is not an

encumbrance which defendant Interbank is obligated to clear the property from. The
meaning of the words, free from all encumbrance does not include adverse possession
of a third person. (Yuson and De Guzman v. Diaz, 42 Phil. 22 [1921]). An adverse
possession by another is not an encumbrance in law and does not contradict the
condition that the property be free from encumbrances; nor is it a lien which connotes
security for a claim. Likewise, a Notice of Lis Pendens is not a lien or encumbrance. It
is a mere cautional notice to a prospective buyer or mortgagee of a parcel of land
under litigation, and cannot conceivably be the lien or encumbrance contemplated by
law. (Underscoring ours) [21]
On appeal, the Court of Appeals affirmed and quoted with approval the above-stated
findings and conclusion of the trial court, while adding that:
Indeed, an assiduous examination of the MOA and its WHEREAS clauses yields no
basis for a necessary inference that the Interbank undertook to clear the 58,000 sq. m.
portion to be assigned to plaintiffs of occupants/squatters, and to wall-in the same
before turning over the title thereto. The MOA was negotiated for more than one year
(see TSN, December 3, 1993, pp. 17-19), and during the negotiations one hundred
(100) to two hundred (200) squatter families were already occupying the 58,000 sq.
m. portion (TSN, December 10, 1993, p. 15). Plaintiffs assert that unless the squatters
are removed from the contiguous portion and the area is properly walled in to make
their removal effective, the predominant purpose of paragraph 2-b to transfer
ownership and title without plaintiffs having to spend a single cent would be illusory
and meaningless; thus the complaint alleges that the removal of the occupants and the
walling in of the 58,000 sq. m. portion was one of the principal commitments made by
Interbank which induced plaintiffs to execute the MOA.
In light of the above circumstances, it is highly inconceivable and illogical that the
plaintiffs did not insist on expressly providing the necessary stipulations and in words
that leave nothing to further interpretation. Plaintiff Sabio, a lawyer, took part
personally and with the assistance of another lawyer, in the drafting of the MOA, and
the negotiations took about a year, and no reason is suggested why he refrained from
including therein specific language containing what he considers the principal
commitment of the second party to remove the squatters and wall-in the 58,000
portion to be conveyed to him.That the commitment must be implied, or inferred by
interpretation or be shown by evidence outside of the document convinces us that the
plaintiffs expectations were an afterthought. (Underscoring ours) [22]
It is a long-held cardinal rule that when the terms of an agreement are reduced to writing, it
is deemed to contain all the terms agreed upon and no evidence of such terms can be admitted
other than the contents of the agreement itself. Accordingly, the trial court and the Court of
[23]
Appeals referred to no other document but the MOA itself, the stipulations of which are deemed
the law between the contracting parties. The lower courts found that nowhere in the MOA did
Interbank commit to clear the subject parcel of squatters or illegal occupants. Neither was
Interbank obliged to remove whatever unauthorized improvements were introduced in the said
property. Nor is there any stipulation that would constrain the respondents to fence or wall-in the
subject parcel along its perimeters. There being no such obligation on the part of the respondents,
they cannot be compelled by the courts, even on the petitioners adamant insistence, to first rid
the subject parcel of squatters, remove all improvements and fence the perimeter thereof, before
conveyance or transfer can be effected.
Indeed, it is not the province of the courts to amend a contract by construction, or to make a
new contract for the parties by interjecting material stipulations, or even to read into the contract
words which it does not contain. Since the MOA of the parties was reduced to writing, such
[24]
agreement is deemed to contain all its terms and there cannot be, between the parties and their
successors-in-interest, any evidence of the terms of the written agreement other than the contents
of the agreement itself.
[25]
Nevertheless, petitioners invoke the whereas clauses of the MOA, as well as the other
documents that preceded the execution of the MOA, arguing that these will provide proof of the
real intention of the parties when they executed the MOA. They strongly contend that these
documents reflect their true intentions that Interbank, and its successors-in-interest, are obligated
to clear the subject parcel of illegal occupants and structures, then fence its boundaries. At the
outset, however, we note that petitioners, in their pleadings, never put in issue the allegation that
the MOA failed to express the true intent of the parties thereto. Instead, they adopt inconsistent
positions in regard to the MOA, that by itself, it is valid and binding on the parties and their
successors-in-interest on the one hand, while they also seek the courts cognizance of extraneous
documents to radically modify or add to the terms of the written agreement on the other hand.
We have uniformly held that it is only where a party puts in issue in the pleadings the failure
of the written agreement to express the true intent of the parties thereto that said party may
present evidence to modify, explain or add to the terms of the written agreement. The fact that
[26]
the terms of the MOA are explicit and leave no doubt as to the intention of the parties, coupled
with petitioners failure to contest the contract for failing to express the true intention of the
parties, behooves the courts not to read into the MOA any other intention that would contradict
its apparent import, such that the literal meaning of its stipulations must control.
[27] [28]
Be that as it may, we shall, for the sake of discussion, peruse the documents referred to by
petitioners as allegedly containing the factual and legal bases for their claim that respondents are
obligated to first clear the subject parcel of all illegal occupants and structures, and then wall-in
said property before there can be fulfillment of the stipulation to assign, transfer and convey the
same to petitioners.
Going by chronological order, the first document is a Deed of Assignment dated May 25,
[29]
1973 between the Ledonio spouses and petitioners, whereby the Ledonios absolutely assigned
and transferred to the Sabios three (3) parcels of land for and in consideration of services
rendered. There is no reference therein to illegal occupants, structures, and other obligations such
as fencing in these properties.
The second document dated April 14, 1980 is an Agreement between the CPJ Corporation,
[30]
the spouses Epifanio and Cecilia Alano, and Trans-Resource Management and Development
Corporation (or TRMDC), whereby CPJ Corporation sold to the Alanos and TRMDC, as
financier of the Alanos, three (3) parcels of property, one of which later became the subject of
the MOA between Interbank and petitioners. In the said document, the Alanos and TRMDC
agreed to buy the property on an As Is basis, without warranty of any kind as to title and
possession on the part of the seller, CPJ Corporation. The Alanos and TRMDC thereby admitted:
full knowledge of all the legal incidents and adverse claims affecting the said
properties which have been and are being asserted by opposing parties in the
pending cases/litigations involving the subject properties, i.e., LRC Cases Nos.
PN-107 (LRC Rec. No. N-30603) and N-6336 (LRC Rec. No. N-34761), and
Civil Case No. 187222, of the Court of First Instance of Rizal, as well as by other
third persons not parties in the said pending cases/litigations, in respect of which
the SECOND PARTY hereby agree(s) to and will assume full and sole
responsibility for the settlement or removal thereof and save free and harmless the
FIRST PARTY from any and all liability resulting and arising therefrom; x x x. [31]
A related document was the Contract to Buy and Sell between the Alano spouses and
[32]
TRMDC arising from the agreement between CPJ Corporation, the Alanos and
TRMDC. Therein, the Alanos committed to free the titles from all liens and encumbrances on or
before a certain date, but with particular reference to the litigation of any and all cases affecting
the properties, x x x especially those cases mentioned under the Deed of Cession and Assignment
dated April 14, 1980 executed by the same parties. Contrary to petitioners suppositions, there is
no mention of the presence and clearing of squatters from the premises as a condition. In both
documents, instead, there are definite references to the pending cases/litigations as the source of
the liens and encumbrances on the subject property, not including therein any other extrajudicial
claims of ownership or possession.
The fourth contract is a Deed of Assignment with Assumption of Mortgage between [33]
Gerardo and Emma Ledonio as assignors, and the Sabio couple as assignees, executed by said
parties on November 23, 1981. By the very nature of the contract, the only obligation that the
Sabios assumed from the Ledonios were those under the mortgage in favor of the Philippine
National Bank. Again, there was no mention of illegal occupants and structures, and therefore,
no imposition to rid the property subject of the said mortgage of such persons and structures.
Then, there were executed on June 28, 1984, by and between TRMDC and Interbank, the
Memorandum of Agreement and the Addendum thereto. In the former, the property subject of
[34] [35]
this petition was among those assigned, transferred and conveyed to Interbank (covered by TCT
Nos. S-65161 and 65162), on the condition that there be settlement within one (1) year of all the
attending liens and problems enumerated as follows:
LIENS
Entry No. 67527/L.P. No. 1753: NOTICE OF LIS PENDENS: By virtue of the
notice of lis pendens presented and filed by Camilo L. Sabio, counsel for the
plaintiffs, notice is hereby given that an action/petition for review has been
commenced and is now pending in the Court of First Instance of Rizal in
Civil/LRC Rec. No. 19722, entitled Gerardo G. Ledonio, et al. versus Eduardo C.
Guico, involving the property described herein.
intervenor, notice is hereby given that an action/petition for intervention has been
commenced and is now pending in the Court of First Instance of Rizal in
Civil/LRC Rec. No. 657, 758, 976 entitled E. Mayuga, F. Baltazar, et al. vs. F.
Baltazar, S. Ledonio, et al., involving the property described herein.
plaintiff/defendants, notice is hereby given that an action/petition for review has
been commenced and is now pending in the Court of First Instance of Rizal in
Civil/LRC Rec. No. 657, 758, 976 entitled E. Mayuga, F. Baltazar, et al. versus F.
Baltazar, G. Ledonio, et al., involving the property described herein.
Entry No. 25081/T-190713: ADVERSE CLAIM - In an affidavit duly subscribed

and sworn to, the spouses EPIFANIO J. ALANO and CECILIA P. ALANO,
claim among other things, that the property described in this certificate of title is
the subject of a Letter-Agreement executed by the herein owner and the adverse
claimants.
Entry No. 65120/L.P. No. 1140: LIS PENDENS: By virtue of a notice of lis
pendens, presented and filed by Camilo L. Sabio, counsel for the Respondent-
Counter-Petitioners, notice is hereby given that an action has been commenced
and is now pending in the Court of First Instance of Rizal in LRC Case No. P-
107, LRC Rec. No. N-30603, entitled GERARDO G. LEDONIO, et al. versus
CPJ CORPORATION, et al., involving the land described in this certificate of
title.
Entry No. 38000/S-65161: AGREEMENT - In favor of SPS. EPIFANIO J.

ALANO, SR. and CECILIA P. ALANO and TRANS-RESOURCE
MANAGEMENT & DEVELOPMENT CORPORATION, in an instrument duly
executed by the herein registered owner agrees to sell, transfer and convey unto
SPS. EPIFANIO J. ALANO, SR. and CECILIA P. ALANO and TRANS-
RESOURCE MANAGEMENT & DEVELOPMENT CORPORATION for the
sum of P5,250,000.00 subject to the terms and conditions set forth in Doc. No.
133, Page No. 28, Book No. II; Series of 1980 of Notary Public for Makati, Metro
Manila, Ma. Cynthia Q. Halaquea.
Entry No. 40608/S-65161: CONTRACT TO BUY AND SELL - By virtue of an

instrument duly executed by and between EPIFANIO J. ALANO and CECILIA
P. ALANO and TRANS-RESOURCE MANAGEMENT & DEVELOPMENT
CORPORATION, the former have agreed to sell unto the latter the property
described herein for a total consideration of FOURTEEN MILLION FOUR
HUNDRED SIXTY SEVEN THOUSAND SEVEN HUNDRED TEN PESOS
(P14,467,710.00) subject to the terms and conditions set forth in Doc. No. 148,
Page 31, Book II; Series of 1980 of Notary Public for Makati, Metro Manila, Ma.
Cynthia Q. Halaquea. [36]
In paragraph 2.c of the MOA, the parties stipulated that Interbank shall render full and free
assistance to TRMDC in exploring, negotiating and consummating appropriate settlement
agreements with the parties/claimants concerned, including defraying the required cost of such
settlements with view to cleaning/settling all of said liens/problems within the prescribed period,
but with specific reference to the liens and problems enumerated in the preceding
paragraph. Clearly, the claims of third parties such as squatters were not among those
enumerated as liens or problems affecting the subject property. Neither was Interbank obligated
under the terms of said agreement to clear the subject property of illegal occupants, there being
no specific mention of their presence therein. On the other hand, the Addendum to the MOA
between TRMDC and Interbank is a mere amendment to the computations of the principal debt
and interests of TRMDC loan with Interbank. There is nothing in said document that even
touches on the subject of claims, liens and problems affecting the property.
In furtherance of their stipulations in the MOA and Addendum thereto, TRMDC executed a
Deed of Assignment on July 12, 1984 in favor of Interbank involving, among others, the parcel
[37]
subject of this petition. Said documents cited the MOA entered into by the same parties,
reiterating TRMDCs undertaking to assign, transfer and convey absolute ownership and title in
fee simple over the properties described therein free from any and all liens/encumbrances and/or
problems of whatever kind and nature within a specified period of time. While the phrase,
problems of whatever kind and nature may be broadly construed, the succeeding paragraph
stressed that TRMDC is obligated to execute a Deed of Assignment pending its accomplishment
and/or compliance with its obligations under the MOA and Addendum to the MOA. Thus, the
obligations of TRMDC were effectively limited to those specifically enumerated in the two
preceding documents which, as mentioned earlier, did not include clearing the property of
squatters and unauthorized structures.
Finally, the MOA between petitioners and Interbank, as previously discussed, did not make
mention of squatters and illegal structures. Neither did they stipulate that Interbank was obligated
to clear the subject property of such occupants and structures, and neither did the said MOA
impose on Interbank the obligation to wall-in the subject property.
In fine, there is no factual or legal basis for petitioners claim that the respondents are
obligated to rid the subject property of squatters and unauthorized structures. Neither is there any
provision in the cited documents that sustains petitioners contention. Consequently, the court a
quo and the Court of Appeals did not err in finding that respondents were not under compulsion
to clear the subject property of squatters and unauthorized structures under the MOA, inasmuch
as there was no obligation to fence the perimeter of the subject property. The terms of the MOA
and the preceding contracts are clear and leave no doubt as to their meaning; hence, they cannot
be interpreted in a way that would please the petitioners, but should rather be fulfilled according
to the literal sense of their stipulations.
[38]
However, petitioners would argue that there was no necessity to make specific provisions
with respect to the removal of the occupants and structures from, and walling-in of, the subject
property. To them, it was sufficient that both parties knew the actual condition of the property.
Petitioner Camilo Sabio testified to that effect, stating that the real intention or agreement of the
parties was that the obligation to complete and perfect ownership and title included the removal
of all squatters and unauthorized structures, and to fence the perimeter of the subject property.
However, the Court of Appeals correctly concluded that petitioner Camilo Sabios testimony
in this regard cannot be taken advantage of to inject into the agreement any understanding which
is contradictory to or at variance with the terms thereof without violating the parol evidence rule
x x x. The rule is that when the terms of an agreement have been reduced to writing, it is
considered as containing all the terms agreed upon and there can be between the parties and their
successors-in-interest, no evidence of such terms other than the contents of the written
agreement. [39]
There are exceptions to said rule, however, such as when:

1. There is an intrinsic ambiguity, mistake or imperfection in the writing;
2. The written agreement fails to express the true agreement and intent of the parties thereto;
3. The validity of the written agreement is in question; and
4. There exists other terms agreed by the parties or their successors-in-interest after the
execution of the written agreement.[40]
In the instant case, the MOA between the Sabios and Interbank was never assailed for any
intrinsic ambiguity, mistake or imperfection in the writing by any of the parties. More
importantly, petitioners never alleged in any of their pleadings that the MOA failed to express
the true agreement and intent of the parties thereto. In fact, petitioner Camilo Sabio would be
hard put to question the very contents of the MOA since he admittedly participated in the
drafting of the MOA with the assistance of legal counsel. Even if he would belatedly complain
[41]
that the MOA did not state the true intentions of the parties, he is estopped from doing
so. Indeed, the Court of Appeals noted, it is highly inconceivable and illogical that petitioner
Camilo Sabio, an experienced lawyer who personally took part in the preparation of the MOA
with the assistance of another lawyer, in the course of negotiations that lasted about a year, did
not insist on expressly providing the necessary stipulations and in words that leave nothing to
further interpretation.[42]
He cannot now insist that the court should accept his bare testimony that there was a verbal
understanding between the parties to the MOA, such that there was no necessity to make specific
provisions concerning the removal of illegal occupants and structures, nor even to fence the
subject parcel of land. His testimony may have been unrebutted, but unsubstantiated testimony
offered as proof of verbal agreements which tend to vary the terms of a written agreement is
inadmissible under the parol evidence rule. [43]
Furthermore, the validity of the MOA was never questioned. In fact, the petitioners are
vigorously pursuing its execution, albeit in a manner that departs from the stipulations contained
therein. Since no fraud or mistake that would vitiate the validity of the MOA has been alleged,
parol evidence cannot be admitted to incorporate additional contemporaneous conditions which
are not mentioned at all in the written agreement. Neither have petitioners shown that after the
[44]
execution of the MOA, the parties and their successors-in-interest agreed to terms other than
those appearing in the MOA.
In sum, there is no justification in the instant case to admit parol evidence to support the
petitioners claims. It is a cardinal rule of evidence, not just one of technicality but of substance,
that the written document is the best evidence of its own contents. It is also a matter of both
principle and policy that when the written contract, by agreement of the parties, is established as
the repository of their stipulations, any other evidence is excluded and the same cannot be used
as a substitute for such contract, nor even to alter or contradict them. Although the parol
evidence rule is inflexible, it admits of four (4) exceptions, as earlier discussed. Since none of
these exceptions was ever put in issue in the pleadings, in accordance with Rule 130, Section 9
of the Rules of Court, the parol evidence rule must be strictly adhered to in this instant
case. Therefore, the stipulations of the contract being the law between the parties, the courts have
no recourse but to enforce them as they were agreed upon and written. [45]
With more reason do we agree with the findings of the Court of Appeals that the existence
of squatters and unauthorized structures in the subject property is not covered by the phrase liens
and encumbrances. The word lien, by common acceptation, refers to a legal claim or charge on
property to secure the payment of a debt or obligation, and which may often be used
interchangeably with the word encumbrance. We adopt this Courts definition of the words lien
and encumbrance as set forth in People v. RTC, and quoted in the impugned decision of the
[46]
Court of Appeals, viz:[47]
In People v. RTC (178 SCRA 299), the Supreme Court held that not all claims against
a property can be considered a lien within the contemplation of law; it was held:
x x x. A lien is a qualified right or a propriety interest, which may be exercised over
the property of another. It is a right which the law gives to have a debt satisfied out of
a particular thing. It signifies a legal claim or charge on property, either real or
personal, as a collateral or security for the payment of some debt or obligation.
Similarly, an encumbrance is a burden upon land, depreciative of its value, such as

lien, easement, or servitude, which, though adverse to (the) interest of (the)
landowner, does not conflict with his conveyance of (the) land in fee.
The following are considered encumbrances: A claim, lien, charge, or liability

attached to and binding real property; e.g., a mortgage, judgment lien, lease, security
interest, easement or right of way, accrued and unpaid taxes. A lien is already an
existing burden or charge on the property while a notice of lis pendens, as the very
term connotes, is only a notice or warning that a claim or possible charge on the
property is pending determination by the court. [48]
Petitioners have failed to show how squatters and unauthorized structures can fall under the
definition of liens and encumbrances. The documents relied upon by petitioners themselves
enumerate the liens and encumbrances and other claims on the subject property. However, no
such burdens on the property concerning the squatters appear in said documents. The courts
cannot supply or read into these documents words which they clearly do not contain. All things
considered, the Court of Appeals did not err in concluding that the possession of squatters or any
other persons occupying the subject property without any legal right whatsoever, cannot and
should not be considered a lien or encumbrance as commonly defined and accepted.
The second object of contention is the Deed of Conveyance proposed by respondents, but
rejected by petitioners. In said document, respondents Ayala Corporation, in accordance with
[49]
the pertinent provisions of the MOA between Interbank and the Sabios, stipulated that:
WHEREAS, the FIRST PARTY had already completed the segregation of the said
58,000-square meter portion of Lot 6 (Psd80888) in accordance with the Bureau of
Lands approved survey plan, a copy of which is hereto attached as Annex C. As such,
the FIRST PARTY is now in a position to comply with its obligation under Section 5
of the said Deed of Sale (Annex B) to convey the property to the SECOND PARTY,
now described as follows:
Lot 6-B, Psd-13-008573, TCT No. T-5331

of Las Pias Registry of Deeds
A PARCEL OF LAND (Lot 6-B of the subdivision plan Psd-13-008573, being a

portion of Lot 6, Psu-80886, (Swo-20609), LRC Record No. 43516), situated in
Barrio Almanza Dos, Las Pias, Metro Manila.Bounded on the NW., & NE., along
lines 1 to 6 by Lot 8; on the SE., along line 6-7 by Lot 10 both of plan Psu-80886);
and on the S., & W., along lines 7-8-1 by Lot 6-A of the subdivision plan. x x x
containing an area of FIFTY EIGHT THOUSAND (58,000) SQ. METERS.
NOW, THEREFORE, for and in consideration of the foregoing, the FIRST PARTY
Transfers, Assigns, Cedes and Conveys unto the SECOND PARTY the said 58,000-
square-meter portion of Lot 6-B, Psd-13-008573, covered by TCT No. T-5331 of Las
Pias Registry of Deeds and described in the above fourth WHEREAS clause.
That as part of the consideration of this Conveyance, the SECOND PARTY binds
himself to file a Notice of Withdrawal of the case entitled Sps. Camilo and Ma.
Marlene A. Ledonio vs. The International Corporate Bank, et al., docketed as Civil
Case No. 18540 of the Regional Trial Court of Makati, Branch 145. [50]
The Sabios, however, refused to sign said deed of conveyance on the ground that it was
grossly violative of the law and the MOA, more particularly arguing that:
[51]
I. Mere execution of the deed of conveyance does not constitute sufficient and valid compliance
with par. 2.b of the MOA;
II. Ayala Corporation failed to complete and perfect ownership and title to the subject property
since it was never in actual occupation, possession, control and enjoyment of said property;
III. Under the law, symbolic delivery by mere execution of the deed of conveyance is not
sufficient since actual possession, control and enjoyment is a main attribute to ownership.
We do not agree, for the law is clear on this matter. Under Article 1498 of the Civil Code,
when the sale is made through a public instrument, the execution thereof shall be equivalent to
the delivery of the object of the contract, if from the deed the contrary does not appear or cannot
be inferred. Possession is also transferred, along with ownership thereof, to the petitioners by
virtue of the deed of conveyance. [52]
Parallel to our ruling in Dulay Enterprises, Inc. v. Court of Appeals, we find that
[53]
petitioners contention that respondents never acquired ownership over the subject property since
the latter was never in possession of the subject property nor was the property ever delivered is
totally without merit. Under the aforementioned Article 1498, the mere execution of the deed of
conveyance in a public document is equivalent to the delivery of the property. Since the
execution of the deed of conveyance is deemed equivalent to delivery, prior physical delivery or
possession is not legally required.
It is well-established that ownership and possession are two entirely different legal concepts.
Just as possession is not a definite proof of ownership, neither is non-possession inconsistent
[54]
with ownership. Thus, it is of no legal consequence that respondents were never in actual
[55]
possession or occupation of the subject property. They, nevertheless, perfected and completed

ownership and title to the subject property.
Notwithstanding the presence of illegal occupants on the subject property, transfer of
ownership by symbolic delivery under Article 1498 can still be effected through the execution of
the deed of conveyance. As we held in Power Commercial and Industrial Corp. v. Court of
Appeals, the key word is control, not possession, of the subject property. Considering that the
[56]
deed of conveyance proposed by respondents did not stipulate or infer that petitioners could not
exercise control over said property, delivery can be effected through the mere execution of said
deed.
Petitioners, as owners, have several options. Among these, they could file ejectment suits
against the occupants, or to amicably secure the latters evacuation of the premises. Whatever
mode petitioners choose, it signifies their control and their intention as owners to obtain for
themselves and to terminate said occupants actual possession thereof. It is sufficient that there
[57]
are no legal impediments to prevent petitioners from gaining physical possession of the subject
property. As stated above, prior physical delivery or possession is not legally required and the
execution of the deed of sale or conveyance is deemed equivalent to delivery. This deed operates
as a formal or symbolic delivery of the property sold and authorizes the buyer or transferee to
use the document as proof of ownership. Nothing more is required.
Petitioners cannot deny that the deed of conveyance can effectively transfer ownership as it
constitutes symbolic or constructive delivery of the subject property. Neither can they negate the
fact that as owners, they can exercise control over the said property. Respondents are not
obligated to remove the occupants before conveying the subject property to petitioners.
Petitioners argue that for them to have to spend to clear the subject property of illegal
occupants and structures would violate par. 2.c of the MOA, which imposed on Interbank and its
successors-in-interest the burden to bear all costs, fees and expenses incidental to segregation,
survey, registration and delivery of a new title to the petitioners. It is patently clear that expenses
for removal of illegal occupants and structures are not among those listed in said paragraph
2.c. The Court of Appeals noted that the obligation to defray all the costs and fees was connected
with the delivery to petitioners of a new certificate of title, free from all liens and
encumbrances. Had the parties to the MOA intended for Interbank and its successors-in-interest
to be obligated to shoulder the expense of clearing the subject property of squatters and illegal
structures, language to that effect could have easily and logically have been employed. As it
happened, petitioners omitted to include this as a condition when they drafted the MOA. If the
parties thereto really intended to impose on Interbank and its successors-in-interest the obligation
to eject the squatters from the subject property and defray the cost therefor, it should have been
stated in the MOA. The terms of the MOA are so clear as to leave no room for any other
interpretation. [58]
There is also no truth to petitioners allegation that the deed of conveyance merely
transferred to the Sabios all the rights and participation of respondents over the subject
property. The Deed of Conveyance clearly states that the FIRST PARTY (respondent Ayala
Corporation) Transfers, Assigns, Cedes and Conveys unto the SECOND PARTY (Sabios) the
said 58,000 square-meter portion of Lot 6-B, Psd-13-008573, covered by TCT No. T-5331 of
Las Pias Registry of Deeds and described in the above fourth WHEREAS clause. Thus, the deed
of conveyance complied with par. 2.b of the MOA, which provided that the said property shall
be assigned and conveyed after Interbank and its successors-in-interest shall complete and
perfect ownership and title to said property.
Another object of contention is the stipulated permanent and perpetual right-of-way, which
under par. 2.d of the MOA shall be sufficient for all the needs of said parcel of land throughout
the properties already owned and/or to be acquired by the SECOND PARTY (Interbank)
particularly the parcels of land covered by TCT No. 85717, TCT No. S-65161, and TCT No. S-
65162, which right-of-way shall not be less than ten (10) meters wide. Petitioners contend that it
is the purpose and spirit of the MOA that (they) shall have the same right to pass through the
Ayala Corporations proposed subdivision like any other homeowner therein. [59]
Respondents counter that the right-of-way it has proposed is one with a definite lane and
width and which is the most convenient route to the main access road that connects Ayala-Las
Pias to the Ayala-Alabang Road. Moreover, at petitioners option, respondents were willing to
provide another access road to service the subject property. The proposed right-of-way is
[60]
particularly described in TCT No. T-5332, containing an area of approximately 370,868 square
meters.[61]
We agree with the Court of Appeals that the phrase permanent and perpetual right of way
should be construed in its ordinary and accepted signification, i.e., to provide ingress to and
egress from the dominant estate, or to provide passage in going to the highway from the
dominant estate and back. The MOA itself does not provide that petitioners shall have free
access to all the roads within the proposed subdivision that respondents would establish on the
estate. Had the parties intended that petitioners be given such access, the same should have been
incorporated in the MOA. Once again, the courts cannot read into the MOA any other intention
that would contradict the apparent agreement. The courts cannot embellish the precise
stipulations of the MOA just for the convenience of petitioners.
An easement is an abnormal restriction on respondents property rights, and the imposition
thereof must be tempered and limited to the ordinary needs of petitioners property, not to satisfy
their caprices.The law requires that the right-of-way must be at the point least prejudicial to the
servient estate, and when applicable, where the distance from the dominant estate to a public
highway may be the shortest. [62]
While the proposed right-of-way traversed respondents properties, the same should not
encroach into the latters proposed subdivision roads. Petitioners access to all the subdivision
roads like any homeowner therein is not a necessity and goes beyond mere convenience on their
part. Otherwise, that would be stretching the purpose and meaning of a right-of-way beyond its
legal and general acceptation.The fact is that respondents did not lack in satisfying the
requirements in par. 2.d of the MOA. Instead of the minimum width of 10 meters, the proposed
right-of-way is twenty-five (25) meters wide, more than double the stipulated minimum
[63]
width. There is really no reason for petitioners to complain and want for more.
While this may already be moot and academic, petitioners raise the issue that respondents
confession of judgment did not deny certain allegations contained in paragraphs IV, XII, XIII,
[64]
and XIV of the formers second amended and supplemental complaint; hence, they constitute
[65]
express judicial admissions which the courts should have considered. [66]
While respondents denominated their pleading as a confession of judgment, it is more in the

nature of a motion for partial judgment on the pleadings or a summary judgment. Indeed,
respondents asked the court a quo to render partial judgment based on their admission of the
genuineness and contents of certain documentary evidence offered by both parties. It is clear that
respondents made no admission that would support any of petitioners contentions that deviate
from the very stipulations in the MOA. There can be no implied admission of allegations which
are extraneous to the contents of the documents expressly admitted by respondents. Their
specific denials of certain allegations in petitioners complaint still stand in their answer. In fact,
respondents did not state anything that would contradict their earlier defenses and arguments
already on record. It was a mere reiteration of their stand that the MOA, as worded, be
implemented literally and without further delay.
It cannot also be said that respondents are deemed to have admitted the allegations in
Camilo Sabios testimony as to the circumstances surrounding the execution of the MOA. As
petitioners themselves noted, respondents counsel declared in open court that: (a) they were
ready to agree and admit all the documentary evidence that the counsel (Atty. Sabio) has anyway
enumerated in his pre-trial brief x x x;(b) its very clear that this case could be decided based on
the pleadings and documentary evidence x x x; and (c) it is admitted by the defendants and we
are ready to admit the documentary evidence that theyll be presenting. Clearly, respondents
[67]
only admitted all the documentary evidence, not the testimonial evidence offered by petitioners.
We stated earlier that this issue is already moot and academic for the supposed judicial
admissions referred to by petitioners, had they been considered by the lower court, would not
alter the outcome of this case. The lower courts conclusions, insofar as the implementation of the
MOA is concerned, are more than amply supported by documentary evidence. Apart from those
matters expressly admitted by respondents, there can be no implied admissions which the lower
court could properly recognize. Besides, as earlier discussed, the documents themselves are the
best evidence of the agreements between the parties in the absence of compelling evidence to the
contrary.
Related to the issue of the confession of judgment is petitioners claim for damages. The trial
court found that petitioners are entitled to P500,000.00 in actual damages and P250,000.00 in
exemplary damages. On appeal, however, the Court of Appeals reversed the trial courts ruling,
finding the awards for actual and exemplary damages in favor of petitioners unwarranted, and
setting the same aside.
Petitioners have failed, in this petition, to present any persuasive proof that they are entitled
to the damages awarded by the trial court. As found by the Court of Appeals, the claim for actual
damages remained unsubstantiated and unproven. It is well-settled that actual or compensatory
damages must be duly proved and proved with reasonable degree of certainty. It is the [68]
fundamental principle of the law on damages that while one injured by a breach of contract shall
be awarded fair and just compensation commensurate with the loss sustained as a consequence of
the defendants acts or omission, a party is entitled only to such compensation for the pecuniary
loss that he has duly proven. Actual damages cannot be presumed and cannot be based on just
flimsy, remote, speculative and nonsubstantial proof. [69]
Petitioners also failed to establish that the delay in the implementation of the MOA was the
sole responsibility of respondents. In fact, no factual basis was presented to support the claim for
not only actual or compensatory damages, but also for exemplary damages. Petitioners failed to
show that respondents acted in a wanton, fraudulent, reckless or malevolent manner that would
warrant the award of exemplary damages. [70]
Anent the directive to cancel the annotation of the MOA and the Notices of Lis Pendens on
TCT Nos. T-5331, T-5332, T-5333 and T-5334, petitioners argue that the maintenance of the
[71]
annotation of the MOA and the notices of lis pendens is necessary to protect their rights should
the property be sold to third persons for value. They also stress that the MOA expressly
mandates the annotation of the MOA on TCT Nos. S-65161 and S-65162. [72]
The Court of Appeals found that:
With respect to the annotation of the MOA, paragraph 4 of the MOA itself expressly
provides that the obligations assumed under paragraphs 2.b, 2.c and 2.d thereof (par.
2.d contains the right of way provision) shall be binding upon all the assigns, heirs
and successors of the parties, and that the MOA shall be annotated on TCT No. 65161
and TCT No. 65162, which became eventually TCT No. 5333 and TCT No. 5331. No
mention is made of the other titles to be owned and/or acquired by defendant-
appellant, and the omission cannot be supplied by construction. [73]
We agree. Indeed, the MOA only require that it be annotated on TCT Nos. 65161 (now
5333) and 65162 (now 5331). Thus, there should be no reason to extend this requirement to other
titles not mentioned in the MOA.
Petitioners also take exception to the refusal of the lower court to annotate the judgment in
the case below on all eighteen (18) titles covering the parcels of land comprising Ayala
Southvale Subdivision.The underlying intention of petitioners is to have the easement of right-
of-way annotated on all of the titles. Respondents counter that there is no such need because the
right-of-way has been delineated and segregated and, hence, there is no reason to annotate the
same on the titles that are not affected thereby.
Again, we find no merit in petitioners contention, especially since the easement of right-of-
way as offered by respondent is more than adequate for the needs of the subject property, and
that it was properly constituted without imposing unnecessary burden on the other properties of
respondents. There can really be no justification for annotation on the titles that are not subject to
the easement.
Finally, we come to the tenth and last error assigned by petitioners, i.e., that the trial court
erred in ordering the cancellation of the notice of lis pendens on TCT Nos. T-5331 to T-5334 and
all titles derived therefrom. In its Resolution, the Court of Appeals held that:
[74]
Nevertheless, the appellants argument that the trial court committed grave abuse of
discretion in ordering the cancellation of the notices of lis pendens before finality of
the assailed judgment in the absence of good reasons to justify execution pending
appeal is untenable. The order of cancellation of the notices of lis pendens was not
issued by the trial court under Section 2, Rule 38 of the Rules of Court regarding
execution pending appeal which requires the existence of good reasons, but under
Section 24 of Rule 14 and Section 77 of PD 1529 which allow the trial court to cancel
notice of lis pendens even before final resolution of the case on the merits upon
finding that the notice is for the purpose of molesting the adverse party, or that it is
not necessary to protect the rights of the party who caused it to be registered.
(Underscoring ours)
We find no cogent reason to disturb the ruling of the Court of Appeals in this regard. In light
of the foregoing discussion, the trial court did not abuse, gravely or otherwise, its discretion
when it allowed the cancellation of the annotations. Accordingly, neither did the Court of
Appeals err when it affirmed the order of the trial court on the finding that there was no longer
any necessity to protect the rights of petitioners over the titles that were either not affected by the
easement or not mentioned in the MOA.
WHEREFORE, in view of all the foregoing, the instant petition for review is DENIED and
the Decision of the Court of Appeals dated April 30, 1997 in CA-G.R. CV No. 48870 is
AFFIRMED in toto.No pronouncement as to costs.
SO ORDERED.
Davide, Jr., C.J. (Chairman), Puno, and Pardo, JJ., concur.
Kapunan, J., took no part being related to one of the parties.
Exhs. KK to KK-3, TCT No. T-5331, Records, pp. 1986 to 1989; Exhs. LL to LL-2, TCT No. T-5332, Records,
[1]
pp. 1940-1942.
[2]
Exhs. A-27 to A-30, Records, pp. 42-45.
[3]
[4]
[5]
Memorandum of Agreement; Exhs. A to A-5, Records, pp. 15-20.
[6]
CA Decision; Rollo, p. 203.
[7]
CA Decision; Rollo, pp. 203-204.
[8]
Exhs. EEEE to EEEE-4 or 4-Ayala, Records, pp. 1979-1983.
[9]
Exhs. 6 to 6-C (Ayala), Records, p. 1476.
Exhs. 3-A (Ayala) or LL,, Records, pp. 1940 to 1942; 3-B (Ayala) or MM, Records, pp. 1943 to 1945; 3-C
[10]
(Ayala) or NN, Records, pp. 1946 to 1948.

[11]
RTC Decision dated June 7, 1994; Records, pp. 1653 to 1659.
[12]
RTC Order dated September 21, 1994; Records, p. 1894.
[13]
CA Decision, p. 3; Rollo, pp. 203-204.
[14]
CA Decision, p. 15; Rollo, p. 215.
[15]
[16]
[17]
Exh. A to A-5, Records, pp. 15-20.
[18]
Fourth Assigned Error.
[19]
Third and Sixth Assigned Errors.
[20]
Assigned errors I, II, III and IV in the plaintiffs-petitioners appeal before the Court of Appeals.
[21]
Rollo, pp. 216-218.
[22]
Ibid., p. 218.
[23]
Ortaez v. Court of Appeals, 266 SCRA 561, 565 (1997) citing Section 9, Rule 130 of the Revised Rules of Court.
[24]
Cuizon v. Court of Appeals, 260 SCRA 645, 667 (1996).
[25]
De Mesa v. Court of Appeals, 317 SCRA 24, 32 (1999).
[26]
Mactan Cebu International Airport Authority v. Court of Appeals, 263 SCRA 736, 742 (1996).
[27]
Cruz v. Court of Appeals, 293 SCRA 239, 252 (1998).
[28]
Baylon v. Court of Appeals, 312 SCRA 502, 509 (1999).
[29]
[30]
[31]
Exh. A-39, paragraph 3(b), Records, p. 1901.
[32]
[33]
[34]
[35]
[36]
Exh. A-20, Records, p. 35.
[37]
Salvatierra v. Court of Appeals, 261 SCRA 45, 56-57 (1996); Tanguilig v. Court of Appeals, 266 SCRA 78, 83
[38]
(1997).
[39]
Section 9, Rule 130, Revised Rules of Court, par. 1.
[40]
CKH Industrial and Development Corporation v. Court of Appeals, 272 SCRA 333, 346-347 (1997).
[41]
TSN, December 3, 1993, pp. 18-21; Rollo, p. 95.
[42]
Court of Appeals Decision, Rollo, p. 218.
[43]
Aerospace Chemical Industries, Inc. v. Court of Appeals, 315 SCRA 92, 107 (1999).
[44]
Ortaez v. Court of Appeals, 266 SCRA 561, 566 (1997).
[45]
Valarao v. Court of Appeals, 304 SCRA 155, 164 (1999).
[46]
178 SCRA 299, 307-308 (1989). 178 SCRA 299, 307-308 (1989).
[47]
Rollo, p. 220, Court of Appeals Decision, p. 20.
[48]
Ibid., p. 220.
[49]
Exhs. EEEE to EEEE-4, or 4-Ayala, Records, pp. 1979-1983.
[50]
Exh. EEEE-3, Records, p. 1982.
[51]
First and Second Assigned Errors.
[52]
Ong Ching v. Court of Appeals, 239 SCRA 341, 347 (1994).
[53]
225 SCRA 678, 686-687 (1993); Garcia v. Court of Appeals, 312 SCRA 180, 190 (1999).
[54]
Painaga v. Cortes, 202 SCRA 245, 249 (1991).
[55]
Heirs of George Bofill v. Court of Appeals, 237 SCRA 451, 459 (1994).
[56]
274 SCRA 597, 610 (1997).
[57]
Ibid.
Article 1370, Civil Code; Ang v. Court of Appeals, 170 SCRA 286, 295 (1989); Sy v. Court of Appeals, 131
[58]
SCRA 116, 124 (1984).

[59]
Seventh Assigned Error.
[60]
Exhs. 6-B and 6-C (Ayala), Records, p. 1476.
[61]
Exh. 3-A (Ayala) or Exhs. LL to LL-2, Records, pp. 1940-1942.
Sta. Maria v. Court of Appeals, 285 SCRA 351, 362 (1998); Cristobal v. Court of Appeals, 291 SCRA 122, 129
[62]
(1998).
[63]
TSN, December 10, 1993, pp. 26-27.
[64]
Dated June 18, 1993; Records, pp. 1193-1199.
[65]
Dated April 23, 1990; Records, pp. 360-401.
[66]
Fifth and Ninth Assigned Errors.
[67]
TSN, November 5, 1993, pp. 2-3.
[68]
Lufthansa German Airlines v. Court of Appeals, 243 SCRA 600, 615 (1995).
Ong v. Court of Appeals, 301 SCRA 387, 400 (1999); Luxuria Homes, Inc. v. Court of Appeals, 302 SCRA 315,
[69]
327 (1999).
[70]
Cervantes v. Court of Appeals, 304 SCRA 25, 33 (1999).
Exhs. KK to KK-3, or 3-Ayala, Records, pp. 1986-1989; LL to LL-2, or 3-A-Ayala, Records, pp. 1940-1942; MM
[71]
to MM-2, or 3-B-Ayala, Records, pp. 1943-1945; NN to NN-2, or 3-C-Ayala, Records, pp. 1946-1948.

[72]
Eighth Assigned Error.
[73]
CA Decision, Rollo, p. 223.
[74]
Dated February 18, 1988, Rollo, pp. 229-230.
FIRST DIVISION
ANTERO LUISTRO, G.R. No. 158819
Petitioner,
Present:
- versus - CARPIO,
CORONA,
LEONARDO-DE CASTRO, and
BERSAMIN, JJ.
COURT OF APPEALS and
FIRST GAS POWER Promulgated:
CORPORATION,
Respondents. April 16, 2009
x - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x

DECISION
CARPIO, J.:
The Case
Before the Court is a petition for review[1] assailing the 9 December 2002

Decision[2] and 18 June 2003 Resolution[3] in CA-G.R. SP No. 68703.
The Antecedent Facts
First Gas Power Corporation (respondent) operates a gas-fired power generating

facility by virtue of a Power Purchase Agreement (PPA) with the Manila Electric
Company (Meralco). Respondent sells the electric power generated by its facility
to Meralco.
On 2 September 1997, respondent entered into a Substation Interconnection

Agreement (SIA) with Meralco and the National Power Corporation (NPC). The SIA
required respondent to design, finance, construct, commission, and energize a
230-kilovolt electric power transmission line, approximately 25 km. in length from
its power plant site in Sta. Rita, Batangas City to Calaca, Batangas. Respondents
obligation under the SIA entailed the acquisition of easements of right-of-way
over affected lands located along the designated route of the transmission line.
On 25 March 1997, respondent entered into a Contract of Easement of Right-of-

Way (Contract) with Antero Luistro (petitioner), owner of a parcel of land located
in Barangay Maigsing Dahilig, Lemery, Batangas. Under the Contract, petitioner
granted respondent perpetual easement over a 100-sq. m. portion of his property
for the erection of the transmission line tower and a 25-year easement over
2,453.60 sq. m. portion of the property for the right to pass overhead line
cables. The Contract covered a total area of2,553.60 sq. m. for a consideration
of P88,608 to cover the easement fee, tower pole, guy occupancy fees and
improvements. Respondent then commenced the construction of the
transmission line tower and the stringing of overhead transmission line cables
above petitioners property covered by the Contract.
On 23 December 1998, petitioners counsel wrote a letter to respondents

president asking for a temporary stoppage of all kinds of work within the vicinity
of petitioners residential house pending settlement of petitioners grievance that
the house and other improvements lay underneath the transmission wire/line
being constructed and would endanger the life and health of the persons in the
vicinity. Petitioner also referred the concerns to the NPC in a letter dated 19 April
1999. However, the NPC set aside petitioners concerns and considered the matter
closed.
On 7 September 2000, petitioner filed a complaint[4] for Rescission/Amendment

And Or Modification of Contract Of Easement With Damages, docketed as Civil
Case No. 142-2000, against respondent and First Balfour Beatty Realty, Inc.
(defendants). Petitioner alleged that respondent, by means of fraud and
machinations of words, was able to convince him to enter into the
Contract. Petitioner alleged that he entered into the Contract under
misrepresentation, promises, false and fraudulent assurances, and tricks of
respondent. Petitioner alleged that while his house was supposed to be 20 to 25
meters away from the transmission wire/line, it turned out after the installation
of Posts 97 and 98 that his house was only 7.23 meters directly underneath the
transmission wire/line. Petitioner alleged that the powerful 230 kilovolts passing
the transmission wire/line continuously endanger the lives, limbs, and properties
of petitioner and his family.
Respondent filed a Motion to Dismiss[5] on the ground that petitioner failed to

state a cause of action in his complaint.
The Ruling of the Trial Court
In its Order[6] dated 24 January 2001, the Regional Trial Court of Lemery,

Batangas, Branch 5 (trial court) denied the Motion to Dismiss and directed
defendants to file their respective answers within ten days from receipt of the
order. Respondent filed a Motion for Reconsideration. In its 13 November 2001
Order,[7] the trial court denied the motion.
Respondent filed a petition for certiorari before the Court of Appeals assailing the
24 January 2001 and 13 November 2001 Orders of the trial court.
The Ruling of the Court of Appeals
In its 9 December 2001 Decision, the Court of Appeals set aside the trial courts 24
January 2001 and 13 November 2001 Orders and ordered the dismissal of the
complaint for failure to state a cause of action insofar as respondent was
concerned. The Court of Appeals ruled that the trial court failed to comply with
Section 3, Rule 16 of the 1997 Rules of Civil Procedure which requires that in
every case, the resolution shall state clearly and distinctly the reasons
therefor. The Court of Appeals ruled that the trial court failed to consider that
when the ground for dismissal was failure to state a cause of action, its sufficiency
could only be determined by considering the facts alleged in the complaint. The
Court of Appeals ruled that the undertaking as regards the distance of the
transmission wire/line from petitioners house which respondent allegedly
breached was not in the Contract. The Court of Appeals ruled that the alleged
right of petitioner as stated in the complaint did not exist and was without any
basis.
The Court of Appeals further ruled that it could not sustain the allegation of fraud
because petitioner failed to state with particularity the circumstances constituting
the alleged fraud. The dispositive portion of the Decision of the Court of Appeals
reads:
WHEREFORE, foregoing premises considered, the petition is hereby GRANTED and the
assailed Orders dated January 24, 2001 and November 13, 2001 of the Regional Trial
Court, Branch 5, Lemery, Batangas in Civil Case No. 142-2000 are hereby SET ASIDE
insofar as petitioner is concerned as the lower court is hereby ORDERED to dismiss the
complaint for failure to state a cause of action insofar as petitioner is concerned.
[8]
SO ORDERED.

Petitioner filed a motion for reconsideration. In its 18 June 2003 Resolution, the
Court of Appeals denied the motion for lack of merit.

Hence, the petition before this Court.
The Issues
Petitioner raises the following issues in his Memorandum:
1. Whether the trial courts 24 January 2001 and 13 November

2001 Orders failed to comply with Section 3, Rule 16 of the 1997
Rules of Civil Procedure;
2. Whether the complaint states a sufficient cause of action; and
3. Whether the complaint alleges fraud with particularity as

required under Section 5, Rule 8 of the 1997 Rules of Civil Procedure.

The Ruling of this Court
The petition has no merit.
Violation of Section 3, Rule 16
of the 1997 Rules of Civil Procedure

Section 3, Rule 16 of the 1997 Rules of Civil Procedure provides:
Sec. 3. Resolution of motion. - After the hearing, the court may dismiss the action or
claim, deny the motion, or order the amendment of the pleading.
The court shall not defer the resolution of the motion for the reason that the ground
relied upon is not indubitable.
In every case, the resolution shall state clearly and distinctly the reasons therefor.
The Rules prescribe that the resolution of the motion to dismiss shall clearly and
distinctly declare the reasons therefor. The directive proscribes the common
practice of perfunctorily dismissing the motion for lack of merit which can often
pose difficulty and misunderstanding on the part of the aggrieved party in taking
recourse therefrom and likewise on the higher court called upon to resolve the
same, usually on certiorari.[9] In this case, the trial court merely stated:

Examining the allegations in the complaint the Court finds that a cause of action
[10]
sufficiently exist[s] against defendants.

The trial court did not explain why a sufficient cause of action existed in this
case. The trial court merely cited Article 19 of the Civil Code which provides that
[e]very person must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe honesty and good
faith. The disposition of the trial court clearly fell short of the requirement set
forth under Section 3, Rule 16 of the 1997 Rules of Civil Procedure.

Sufficiency of Cause of Action
In a motion to dismiss based on lack of cause of action, the question posed to the
court for determination is the sufficiency of the allegation of facts made in the
complaint to constitute a cause of action.[11] To sustain a motion to dismiss for
lack of cause of action, it must be shown that the claim for relief does not exist,
rather than that a claim has been defectively stated, or is ambiguous, indefinite or
uncertain.[12]
In this case, we agree with the Court of Appeals that the complaint lacked
sufficient cause of action. The complaint was based on the alleged breach of the
Contract and violation of the undertaking that petitioners house was supposed to
be 20 to 25 meters away from the transmission wire/line. Petitioner alleged in the
complaint that contrary to what had been assured and promised, his house
turned out to be only 7.23 meters directly underneath the transmission wire/line.
As pointed out by the Court of Appeals, there was no such undertaking in the
Contract. The Contract only granted respondent a perpetual easement over 100
sq. m. portion of petitioners property, as well as 25 years easement of right-of-
way over the property or portions thereof, as indicated in the sketch plan, for the
installation and maintenance of wooden poles, steel towers, tower footings, and
electric and guy wires. Therefore, the alleged right of petitioner, which
respondent supposed to have violated, did not exist in the Contract.

Allegation of Fraud
Section 5, Rule 8 of the 1997 Rules of Civil Procedure states:
Section 5. Fraud, mistake, condition of the mind. - In all averments of fraud or mistake,
the circumstances constituting fraud or mistake must be stated with
particularity. Malice, intent, knowledge or other condition of the mind of a person may
be averred generally.
Again, the complaint falls short of the requirement that fraud must be stated with
particularity. The complaint merely states:
4. That sometime in the year of 1997, the consolidator-facilitator of the

Defendants FGPC and Balfour by means of fraud and machinations of words were able
to convince[] the plaintiff to enter into CONTRACT OF EASEMENT OF RIGHT OF WAY
wherein the latter granted in favor of the defendant FGPC the right to erect [its] Tower
No. 98 on the land of the plaintiff situated at Barangay Maigsing Dahilig, Lemery 4209
Batangas including the right to Install Transmission Lines over a portion of the same
property for a consideration therein stated, a xerox copy of said contract is hereto
attached as [] ANNEXES A up to A-4 of the complaint;
5. That the said contract, (Annexes A up to A-4) was entered into by the plaintiff
under the MISREPRESENTATION, PROMISES, FALSE AND FRAUDULENT ASSURANCES
[13]
AND TRICKS of the defendants[.]
Not only did petitioner fail to allege with particularity the fraud allegedly
committed by respondent. A review of the Contract shows that its contents were
explained to petitioner.The Contract states:

Bago ko/namin nilagdaan ang kasulatang ito ay ipinaliwanag muna sa akin/amin sa
wikang Tagalog/ o sa wikang aking/aming naiintindihan. Ang nilalaman nitoy lubusan
ko/naming nauunawaan kayat lumagda kami rito ng kusang loob, walang sinumang
[14]
pumilit o tumakot sa akin/amin.
There is clearly no basis for the allegation that petitioner only signed the Contract
because of fraud perpetrated by respondent.
WHEREFORE, we DENY the petition. We AFFIRM the 9 December 2002 Decision

and 18 June 2003 Resolution in CA-G.R. SP No. 68703.
SO ORDERED.
ANTONIO T. CARPIO
Associate Justice

WE CONCUR:

REYNATO S. PUNO
Chief Justice
Chairperson

RENATO C. CORONA TERESITA J. LEONARDO-DE CASTRO

LUCAS P. BERSAMIN
Associate Justice

CERTIFICATION
conclusions in the above Decision had been reached in consultation before the case

REYNATO S. PUNO
Chief Justice
[1]
Under Rule 45 of the 1997 Rules of Civil Procedure.
[2]
Rollo, pp. 40-51. Penned by Associate Justice Remedios A. Salazar-Fernando with Associate Justices Ruben T.
Reyes (a retired member of this Court) and Edgardo F. Sundiam, concurring.
[3]
Id. at 53-54.
[4]
Id. at 55-60.
[5]
Id. at 74-89.
[6]
Id. at 97-98. Penned by Executive Judge Eutiquio L. Quitain.
[7]
Id. at 109.
[8]
Id. at 50.
[9]
Barrazona v. Regional Trial Court, Br. 61, Baguio City, G.R. No. 154282, 7 April 2006, 486 SCRA 555.
[10]
Rollo, p. 97.
[11]
Santiago v. Subic Bay Metropolitan Authority, G.R. No. 156888, 20 November 2006, 507 SCRA 283.
[12]
Universal Aquarius, Inc. v. Q.C. Human Resources Management Corporation, G.R. No. 155990, 12 September
2007, 533 SCRA 38.
[13]
Rollo, p. 56.
[14]
Id. at 64.
FIRST DIVISION
[G. R. No. 114348. September 20, 2000]
NATIONAL IRRIGATION ADMINISTRATION, petitioner, vs. COURT OF

APPEALS and DICK MANGLAPUS, respondents.
DECISION
PARDO, J.:
This case is an appeal from the decision of the Court of Appeals affirming in
[1] [2]
toto the decision of the Regional Trial Court, Branch 04, Tuguegarao, Cagayan ruling
[3]
in favor of private respondent Dick Manglapus (hereinafter referred to as "Manglapus"),

and ordering petitioner National Irrigation Administration (hereinafter referred to as
"NIA") to pay Manglapus one hundred fifty thousand six hundred pesos (P150,600.00),
and fifty thousand pesos (P50,000.00), as compensatory damages, five thousand pesos
(P5,000.00), as attorney's fees, and two thousand pesos (P2,000.00), as litigation
expenses and costs.
First, the relevant facts.
On June 28, 1963, a free patent over three (3) hectares of land, situated in barrio
Baybayog, municipality of Alcala, province of Cagayan was issued in the name of
respondent's predecessor-in-interest, Vicente Manglapus, and registered under Original
Certificate of Title No. P-24814, in his name. The land was granted to Vicente
Manglapus, subject to the following proviso expressly stated in the title:
[4] [5]
"TO HAVE AND TO HOLD the said tract of land, with the appurtenances thereunto
of right belonging unto the said VICENTE MANGLAPUS and to his heirs and
assigns forever, subject to the provisions of sections 113, 121, 122 and 124 of
Commonwealth Act. No. 141, as amended which provide that except in favor of the
Government or any of its branches, units, or institutions, the land hereby acquired
shall be inalienable and shall not be subject to encumbrance for a period of five (5)
years from the date of this patent, and shall not be liable for the satisfaction of any
debt contracted prior to the expiration of that period; that it shall not be encumbered,
alienated, or transferred to any person, corporation, association or partnership not
qualified to acquire lands of the public domain under said Commonwealth Act No.
141, as amended; and that it shall not be subject to any encumbrance whatsoever in
favor of any corporation, association or partnership except with the consent of the
grantee and the approval of the Secretary of Agriculture and Natural Resources and
solely for educational, religious or charitable purposes or for a right of way; and
subject finally to all conditions and public easements and servitudes recognized and
prescribed by law especially those mentioned in sections 109, 110, 111, 112, 113 and
114 of Commonwealth Act No. 141 as amended, and the right of the Government to
administer and protect the timber found thereon for a term of five (5) years from the
date of this patent, provided, however, that the grantee or heirs may cut and utilize
such timber for his or their personal use (underscoring ours)."
Subsequently, respondent Manglapus acquired the lot from Vicente Manglapus by

absolute sale.
On July 18, 1974, the land was registered in Dick Manglapus' name under Transfer
Certificate of Title No. T-26658 of the Register of Deeds for the Province of Cagayan.
The land is particularly described as follows:
[6] [7]
"Lot No. 3559, Pls-497, with an area of 30,438 square meters, and covered by
TRANSFER CERTIFICATE OF TITLE NO. T-26658, and Tax Declaration No.
11985."
Sometime in 1982, NIA entered into a contract with Villamar Development

Construction. Under the contract, NIA was to construct canals in Amulung, Cagayan
and Alcala, Cagayan.NIA then entered a portion of Manglapus' land and made diggings
and fillings thereon. [8]
The portion of Manglapus' land entered into by NIA is described as follows: [9]
"In a sketch prepared by NIA's employee labeled as NIA canal "Lateral "D", with an
area of 7,880 square meters, which is a portion of Lot 3559, Pls-497."
On March 14, 1991, Manglapus filed with the Regional Trial Court, Tuguegarao,
Cagayan a complaint for damages against NIA. Manglapus alleged that NIA's diggings
[10]
and fillings destroyed the agricultural use of his land and that no reasonable
compensation was paid for its taking. [11]
Despite service of notice of the pretrial conference, NIA did not appear at the pre-
[12]
trial conference. [13]

On December 3, 1991, the trial court declared NIA in default and received
Manglapus' evidence ex parte. [14]
On December 23, 1991, the trial court rendered a decision in favor of Manglapus,
thus:[15]
"WHEREFORE, and in consideration of the foregoing, the Court finds preponderance

of evidence in favor of the plaintiff and against the defendant:
"1) Ordering the defendant to pay plaintiff the sum of One Hundred Fifty Thousand
Six Hundred Pesos (P150,600.00) and Fifty Thousand (P50,000.00) Pesos as
compensatory damages;
"2) Ordering the defendant to pay to plaintiff the sum of Five Thousand Pesos
(P5,000.00) as attorney's fees and Two Thousand Pesos (P2,000.00) as litigation
expenses; and
"3) To pay the cost of the suit.
"SO ORDERED."
On January 27, 1992, NIA filed a motion to lift the order of default dated December
3, 1991, and to set aside the afore-quoted decision of December 23, 1991. [16]
On June 3, 1992, the trial court issued a resolution denying the motion for lack of
merit. [17]
On July 17, 1992, NIA filed a notice of appeal to the Court of Appeals. [18]
On July 27, 1992, the trial court gave due course to the appeal and ordered the
transmission of the original records to the Court of Appeals.
[19]
On July 30, 1992, Manglapus filed a motion for execution of judgment with the trial
court. [20]
On August 7, 1992, the NIA through the Solicitor General filed an opposition to the
motion for execution.[21]
On August 17, 1992, the trial court declared that since the notice of appeal of NIA
was given due course, the motion for execution was "moot and academic." [22]
On March 8, 1994, the Court of Appeals promulgated its decision, the dispositive
portion of which reads: [23]
"WHEREFORE, PREMISES CONSIDERED, the decision appealed from is hereby

AFFIRMED in toto and the appeal is hereby DISMISSED.
"SO ORDERED."
Hence, this appeal. [24]
The sole issue is whether the NIA should pay Manglapus just compensation for
the taking of a portion of his property for use as easement of a right of way.
We find that NIA is under no such obligation. We sustain the appeal.
We agree with NIA that the Transfer Certificate of Title and the Original Certificate
[25]
of Title covering the subject parcel of land contained a reservation granting the
[26]
government a right of way over the land covered therein. [27]
The transfer certificate of title, on which both the trial court and Court of Appeals
relied, contains such a reservation. It states that title to the land shall be:
[28]
"...subject to the provisions of said Land Registration Act and the Public Land Act, as
well as those of Mining Laws, if the land is mineral, and subject, further to such
conditions contained in the original title as may be subsisting (underscoring ours)."
Under the Original Certificate of Title, there was a reservation and condition that
[29]
the land is subject to "to all conditions and public easements and servitudes recognized
and prescribed by law especially those mentioned in Sections 109, 110, 111, 112, 113
and 114, Commonwealth Act No. 141, as amended." This reservation, unlike the other
provisos imposed on the grant, was not limited by any time period and thus is a
[30]
subsisting condition.
Section 112, Commonwealth Act No. 141, provides that lands granted by patent,
"shall further be subject to a right of way not exceeding twenty meters in width for
public highways, railroads, irrigation ditches, aqueducts, telegraphs and telephone
lines, and similar works as the Government or any public or quasi-public service or
enterprises, including mining or forest concessionaires may reasonably require for
carrying on their business, with damages for the improvements only (underscoring
ours)."
We note that the canal NIA constructed was only eleven (11) meters in width. This
is well within the limit provided by law. Manglapus has therefore no cause to complain.
[31]
Article 619 of the Civil Code provides that, "Easements are established either by
law or by the will of the owners. The former are called legal and the latter voluntary
easements." In the present case, we find and declare that a legal easement of a right-
of-way exists in favor of the government. The land was originally public land, and
awarded to respondent Manglapus by free patent. The ruling would be otherwise if the
land were originally private property, in which case, just compensation must be paid for
the taking of a part thereof for public use as an easement of a right of way. [32]
Neither can Manglapus argue that he was a transferee or buyer in good faith. Under
the Torrens system, for one to be a buyer in good faith and for value, the vendee must
see the transfer certificate of title and rely upon the same. Here, the annotation on the
[33]
transfer certificate of title imposed on Manglapus the duty to refer to the conditions
annotated on the back of the original certificate of title. This, he did not do. The law
cannot protect him. Manglapus is a transferee with notice of the liens annotated in the
title.
One who deals with property registered under the Torrens system is charged with
notice of burdens and claims that are annotated on the title. [34]
WHEREFORE, the Court GRANTS the petition for review on certiorari, and
REVERSES the decision of the Court of Appeals in CA-G. R. CV No. 38835.
IN LIEU THEREOF, the Court SETS ASIDE the decision of the Regional Trial
Court, Branch IV, Tuguegarao, Cagayan in Civil Case No. 4266, and DISMISSES the
complaint.
No costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, and Kapunan, JJ., concur.
Ynares-Santiago, J., no part.
[1]
Under Rule 45, 1964 Revised Rules of Court.
[2]
In CA-G. R. CV No. 38835, promulgated on March 8, 1994, Associate Justice Manuel C. Herrera,
ponente, concurred in by Associate Justices Cezar D. Francisco and Buenaventura J. Guerrero.
[3]
In Civil Case No. 4266, dated December 23, 1991, Judge Plaridel L. Villacete, presiding.
[4]
The Original Certificate of Title stated that Vicente Manglapus possessed "all the qualifications required
by law in the premises, has fully complied with all the conditions, requirements, and provisions of
Republic Act No. 782 and Chapter VII of Commonwealth Act No. 141, as amended, governing the
granting of free patents to native settlers, and is therefore, entitled to a free patent."
[5]
CA Rollo, p. 26.
[6]
Rollo, p. 65.
[7]
Rollo., p. 100.
[8]
Ibid.
[9]
Ibid., p. 127; Trial Court Record, p. 52.
[10]
Ibid., p. 100; Trial Court Record, pp. 1-2.
[11]
Ibid., pp. 100-101.
[12]
Trial Court Record, p. 26.
[13]
Ibid., pp. 34-37.
[14]
Rollo, pp. 46-48; Trial Court Record. pp. 43-45.
[15]
Ibid., p. 57; Trial Court Record, p. 64.
[16]
Trial Court Record, pp. 75-84.
[17]
Trial Court Record, pp. 92-98.
[18]
Docketed as CA-G. R. CV No. 38835, Rollo, p. 64; Trial Court Record, p. 100.
[19]
Trial Court Record, p. 102.
[20]
Ibid., pp. 103-104.
[21]
Ibid., pp. 105-107.
[22]
Ibid., p. 108.
[23]
Rollo, p. 39.
[24]
We resolved to give due course to the petition on November 18, 1998 (Rollo, p. 97).
[25]
TCT No. T-26658, Rollo, pp. 65-66.
[26]
OCT No. P-24814, Rollo, pp. 67-68.
[27]
The reservation was said to be made when the government ceded the land by free patent to the
grantee (Rollo, p. 14).
[28]
Rollo, p. 65.
[29]
Original Certificate of Title No. P-24814.
[30]
The "other provisos" which had a period or limit of effectivity were: (1) except in favor of the
Government or any of its branches, units, or institutions, the land hereby acquired shall be inalienable and
shall not be subject to encumbrance for a period of five (5) years from the date of this patent, and shall
not be liable for the satisfaction of any debt contracted prior to the expiration of that period; (2) the land
shall be subject to the right of the Government to administer and protect the timber found thereon for a
term of five (5) years from the date of this patent.
[31]
In fact, the twenty (20) meter width limit was increased to sixty (60) meters by P. D. 635, Section 1.
[32]
Article III, Section 9, Constitution. See also Heirs of Alberto Suguitan v. City of Mandaluyong, G. R. No.
123215, March 14, 2000.
[33]
Islamic Directorate of the Philippines v. Court of Appeals, 272 SCRA 454 (1997).
[34]
Legarda v. Court of Appeals, 280 SCRA 642 (1997); Secuya v. de Selma, G. R. No. 13602, February
22, 2000.

THIRD DIVISION

FAUSTO R. PREYSLER, JR., G.R. No. 158141
Petitioner,
Present:

CARPIO,

TINGA, and
VELASCO, JR., JJ.
COURT OF APPEALS and FAR EAST Promulgated:

ENTERPRISES, INC.,

Respondents.
July 11, 2006
x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x

DECISION

QUISUMBING, J.:
This petition for review assails the Decision[1] dated January 20, 2003 and

Resolution[2] dated May 20, 2003 of the Court of Appeals in CA-G.R. SP No.
52946. The Court of Appeals lifted the amended writ of preliminary injunction
dated December 29, 1998 issued by the Regional Trial Court, Branch 14 of
Nasugbu, Batangas in Civil Case No. 345 and reinstated the original writ
dated December 12, 1996.
Private respondent Far East Enterprises, Inc., owns Tali Beach

Subdivision. Petitioner Fausto Preysler, Jr. and his wife owned lots therein and
also two parcels of land adjacent to the subdivision. These two parcels were
bounded on the North and West by the China Sea and on the East and South by
the subdivision. To gain access to the two parcels petitioner has to pass through
private respondents subdivision. Petitioner offered P10,000 for the easement of
right of way but private respondent refused it for being grossly
inadequate. Private respondent then barricaded the front gate of petitioners
property to prevent petitioner and his family from using the subdivision roads to
access said parcels.
The petitioner filed, with the Regional Trial Court of Nasugbu, Batangas, a
Complaint for Right of Way with prayer for preliminary prohibitive injunction
against private respondent. After due hearing, the trial court, in an Order dated
November 5, 1996, held that barricading the property to prevent the petitioner
from entering it deprived him of his ownership rights and caused irreparable
damage and injuries. It ordered herein private respondent:
1) To remove or cause or allow the removal of the barricade (six concrete posts)
installed by it on the front gate of the plaintiffs properties fronting Sea Cliff Drive;
2) To cease, desist and refrain from obstructing or hindering plaintiffs entry into and exit
from their subject properties and/or their free passage over Sea Cliff Drive from and
to the public highway near the gate of the Tali Beach Subdivision pending
termination of this litigation on the merits and/or unless a contrary order is issued
[3]
henceforth.
Accordingly, the writ of preliminary injunction was issued on December 12, 1996.
On July 8, 1998, petitioner used the subdivision road to transport heavy

equipment and construction materials to develop his property. Consequently,
private respondent moved to dissolve the writ claiming that the petitioner
violated its right to peaceful possession and occupation of Tali Beach Subdivision
when petitioner brought in heavy equipment and construction materials. Private
respondent maintained that the damages that may be caused to it far outweigh
the alleged damages sought to be prevented by the petitioner. It alleged that
there is an alternate route available to petitioner, particularly the barangay road
leading to Balaytigue and the Calabarzon Road.
For his part, the petitioner moved to clarify the December 12, 1996 writ and
asked the court to clearly define the action required of private respondent to
avert further damage and inconvenience to petitioner. Petitioner prayed that his
contractors, visitors, and other representatives be allowed access and persons he
has authorized be allowed to install power lines over private respondents
property.

On December 29, 1998, the trial court issued a Joint Resolution amending the
order in the original writ to read as follows:
1. To remove or cause or allow the removal of the barricade (six concrete posts)
installed by it on the front gate of the plaintiffs properties fronting Sea Cliff Drive.
2. To cease, desist and refrain from obstructing or hindering plaintiffs (including
plaintiffs visitors, guests, contractors, and other persons authorized by or acting for
and/or under said plaintiffs) entry into and exit from their subject properties and/or
their free passage over Sea Cliff Drive and other connecting subdivision roads, from
and to the public highway near the gate of the Tali Beach Subdivision, pending the
termination of this litigation on the merits and/or unless a contrary order is issued
henceforth.
3. To cease, desist and refrain from hindering or obstructing plaintiffs contractors,
guests, visitors and other authorized persons to bring along with them their motor
vehicles, equipments, materials, supplies, machineries and other items necessary
for the needs of the plaintiffs properties.
4. To cease, desist and refrain from hindering or obstructing the plaintiffs and/or
persons authorized by them, to install electric power lines over the Tali Beach
[4]
Subdivision for plaintiffs electric power requirements.
Private respondent filed a petition for certiorari with the Court of Appeals, which
set aside the amended writ dated December 29, 1998 and reinstated the original
writ dated December 12, 1996 with modification as to the amount of the
bond. The petitioner moved for reconsideration, but the same was denied.
Petitioner now comes before us claiming that the Court of Appeals:

I
[GRAVELY] ERRED IN FINDING AND CONCLUDING THAT THE TRIAL COURT COMMITTED
GRAVE ABUSE OF DISCRETION IN ISSUING: (1) THE JOINT RESOLUTION DATED 29
DECEMBER 1998, (2) THE AMENDED WRIT OF PRELIMINARY INJUNCTION (MANDATORY
AND PROHIBITORY) OF EVEN DATE AND (3) THE ORDER DATED 8 MARCH 1999 DENYING
THE MOTION FOR RECONSIDERATION TO RECONSIDER AND SET ASIDE THE
JOINT RESOLUTION.
II
OVERSTEPPED THE BOUNDARY OF ITS AUTHORITY AND JURISDICTION IN RESOLVING

FACTUAL MATTERS, HOWEVER, ERRONEOUS, COULD NOT BE REVIEWED UNDER THE
EXTRAORDINARY WRIT OF CERTIORARI BUT BY ORDINARY APPEAL, INSTEAD OF
CONFINING ITSELF TO DETERMINE WHETHER OR NOT THE TRIAL COURT COMMITTED
GRAVE ABUSE OF DISCRETION IN ISSUING THE JOINT RESOLUTION, THE AMENDED WRIT
OF PRELIMINARY INJUNCTION (MANDATORY AND PROHIBITORY), AND THE ORDER DATED
6 MARCH 1996 DENYING THE MOTION TO RECONSIDER THE JOINT RESOLUTION.
III
EXCEEDED ITS JURISDICTION AND AUTHORITY IN SETTING ASIDE THE JOINT

RESOLUTION, LIFTING THE AMENDED WRIT OF PRELIMINARY INJUNCTION DATED 29
DECEMBER 1998, AND RESTRICTING OR LIMITING PASSAGE OVER THE TALI BEACH
SUBDIVISION ROADS TO INGRESS AND EGRESS OF PETITIONER AND MEMBERS OF THE
LATTERS HOUSEHOLD IN UTTER VIOLATION OF THE LAW ON EASEMENT, IN GENERAL,
[5]
AND LEGAL EASEMENT OF RIGHT OF WAY IN PARTICULAR.
Simply, the issue is whether there was a legal basis for the issuance of the
amended writ of injunction. Likewise, we need to resolve whether the right of
passage allowed in the uncontested original writ applies not only to the petitioner
and his household, but also to his visitors, contractors, construction workers,
authorized persons, heavy equipment machinery, and construction materials as
well as the installation of power lines.
Petitioner contends that inherent in the right of way under Article 649[6] of the
New Civil Code is the right to cultivate and develop the property, which is an
attribute of ownership provided under Article 428.[7] According to petitioner, the
passage of heavy equipment and construction materials through the subdivision is
granted by Article 656.[8] Petitioner adds that he was not seeking the right of way
only for occasional visits to his property but also to develop, use and enjoy it.
Private respondent claims that what was granted in the original writ was not the
easement of right of way but only the maintenance of the status quo. It maintains
that from the very beginning, petitioner and his household were allowed into the
subdivision only because petitioner owned several lots in the subdivision. Hence,
according to private respondent, the Court of Appeals properly dissolved the
amended writ as the status quo protected by the original writ did not include the
passage of construction workers in petitioners property outside the
subdivision. Private respondent stresses that at the time the original writ was
applied for there was no construction work yet.
Private respondent argues that its recognition of the original writ should not be
construed as admitting that petitioner had a right of way; and with no easement
of right of way, petitioner cannot claim other rights under the law on easement. It
further contends that acts prohibited and allowed under the amended writ
amounted to a premature adjudication on the merits of the main case on whether
or not petitioner has a right of way, which is still pending before the trial court.
Prefatorily, we note that what was granted by the trial court was the preliminary
injunction, and that the main case for right of way has not yet been settled. We
have in previous cases[9] said that the objective of a writ of preliminary injunction
is to preserve the status quo until the merits of the case can be fully heard. Status
quo is the last actual, peaceable and uncontested situation which precedes a
controversy.[10] The Court of Appeals was correct in its findings that the last actual,
peaceful and uncontested situation that preceded the controversy was solely the
access of petitioner and his household to his property outside the subdivision for
visits and inspections. At the time the writ was applied for in 1995, there was still
no construction going on in the property. It was merely raw land. The use of the
subdivision roads for ingress and egress of construction workers, heavy
equipment, delivery of construction materials, and installation of power lines, are
clearly not part of the status quo in the original writ. Along this line, the Court of
Appeals properly set aside the amended writ and reinstated the original writ.
However, under Article 656 of the New Civil Code, if the right of way is
indispensable for the construction, repair, improvement, alteration or
beautification of a building, a temporary easement is granted after payment of
indemnity for the damage caused to the servient estate. In our view, however,
indispensable in this instance is not to be construed literally. Great inconvenience
is sufficient.[11] In the present case, the trial court found that irrespective of which
route petitioner used in gaining access to his property, he has to pass private
respondents subdivision. Thus we agree that petitioner may be granted a
temporary easement. This temporary easement in the original writ differs from
the permanent easement of right of way now being tried in the main case.
The law provides that temporary easement is allowed only after the payment of
the proper indemnity. As there are neither sufficient allegations nor established
facts in the record to help this Court determine the proper amount of indemnity,
it is best to remand the case to the trial court for such determination.
Additionally, we find that the installation of electric power lines is a permanent

easement not covered by Article 656. Article 656 deals only with the temporary
easement of passage. Neither can installation of electric power lines be subject to
a preliminary injunction for it is not part of the status quo. Besides, more damage
would be done to both parties if the power lines are installed only to be removed
later upon a contrary judgment of the court in the main case.
WHEREFORE, the petition is PARTIALLY GRANTED.
We hereby order (a) private respondent to allow the right of passage thru the
subdivision by the petitioners visitors and guests, contractors, construction
workers, heavy equipment vehicles, and delivery construction materials; and (b)
petitioner to pay private respondent the indemnity therefor to be determined by
the trial court. The case is hereby REMANDED to the trial court for the
determination of the proper amount of indemnity for the temporary easement
under Article 649.

SO ORDERED.

Associate Justice
WE CONCUR:
ANTONIO T. CARPIO
Associate Justice
CONCHITA CARPIO MORALES DANTE O. TINGA

Associate Justice
ATTESTATION
Courts Division.
Associate Justice
Chairperson
CERTIFICATION

ARTEMIO V. PANGANIBAN
Chief Justice

[1]
Rollo, pp. 42-69. Penned by Associate Justice Regalado E. Maambong, with Associate Justices Delilah Vidallon-
Magtolis, and Andres B. Reyes, Jr. concurring.
[2]
Id. at 71-73.
[3]
Id. at 107.
[4]
Id. at 146-147.
[5]
Id. at 21-22.
[6]
Art. 649. The owner, or any person who by virtue of a real right may cultivate or use any immovable, which is
surrounded by other immovables pertaining to other persons and without adequate outlet to a public highway, is
xxxx
[7]
Art. 428. The owner has the right to enjoy and dispose of a thing, without other limitations than those established
by law.
xxxx
[8]
Art. 656. If it be indispensable for the construction, repair, improvement, alteration or beautification of a building,
to carry materials through the estate of another, or to raise thereon scaffolding or other objects necessary for the
work, the owner of such estate shall be obliged to permit the act, after receiving payment of the proper
indemnity for the damage caused him.
[9]
Cortez-Estrada v. Heirs of Domingo Samut/Antonia Samut, G.R. No. 154407, February 14, 2005, 451 SCRA 275,
288; Medina v. Greenfield Development Corporation, G.R. No. 140228, November 19, 2004, 443 SCRA 150,
159; First Global Realty and Development Corporation v. San Agustin, G.R. No. 144499, February 19, 2002,
377 SCRA 341, 349.
[10]
Los Baos Rural Bank, Inc. v. Africa, G.R. No. 143994, July 11, 2002, 384 SCRA 535, 547.
[11]
E. Paras, CIVIL CODE OF THE PHILIPPINES ANNOTATED, BOOK II, 660 (14th ed., 1999).

THIRD DIVISION


Petitioner,
Present:

Panganiban, J.,
Chairman,
- versus - Sandoval-Gutierrez,*
Corona, and
Carpio Morales, JJ
MANUBAY AGRO-INDUSTRIAL Promulgated:
DEVELOPMENT CORPORATION,
Respondent. August 18, 2004
x -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- -- x

DECISION

PANGANIBAN, J.:

H
ow much just compensation should be paid for an easement
of a right of way over a parcel of land that will be traversed
by high-powered transmission lines? Should such
compensation be a simple easement fee or the full value of the
property? This is the question to be answered in this case.

The Case
Before us is a Petition for Review[1] under Rule 45 of the Rules of
Court, seeking to reverse and set aside the November 23, 2001
Decision[2] of the Court of Appeals (CA) in CA-GR CV No. 60515. The
CA affirmed the June 24, 1998 Decision[3] of the Regional Trial

Court[4] (RTC) of Naga City (Branch 26), directing the National Power
Corporation (NPC) to pay the value of the land expropriated from
respondent for the use thereof in NPCs Leyte-Luzon HVDC Power
Transmission Project.

The Facts

The CA summarized the antecedents of the case as follows:

In 1996, [Petitioner] NATIONAL POWER CORPORATION, a

government-owned and controlled corporation created for the
purpose of undertaking the development and generation of
hydroelectric power, commenced its 350 KV Leyte-Luzon HVDC
Power Transmission Project. The project aims to transmit the
excess electrical generating capacity coming from Leyte Geothermal
Plant to Luzon and various load centers in its vision to interconnect
the entire country into a single power grid. Apparently, the project is
for a public purpose.
In order to carry out this project, it is imperative for the

[petitioners] transmission lines to cross over certain lands owned by
private individuals and entities.One of these lands, [where] only a
portion will be traversed by the transmission lines, is owned by
[respondent] MANUBAY AGRO-INDUSTRIAL DEVELOPMENT
CORPORATION.

Hence, on 03 December 1996, [petitioner] filed a complaint for
expropriation before the Regional Trial Court of Naga City against
[respondent] in order to acquire an easement of right of way over the
land which the latter owns. The said land is situated at Km. 8,
Barangay Pacol, Naga City, Camarines Sur and described with
more particularity, as follows:

TCT/OCT NO. TOTAL AREA AFFECTED AREA CLASS.
IN SQ.M. IN SQ. M. OF LAND
17795 490,232 21,386.16 Agri.
17797 40,848 1,358.17 Agri.
17798 5,279 217.38 Agri.
TOTAL 22,961.71

On 02 January 1997, [respondent] filed its answer. Thereafter, the
court a quo issued an order dated 20 January 1997 authorizing the
immediate issuance of a writ of possession and directing Ex-Officio
Provincial Sheriff to immediately place [petitioner] in possession of
the subject land.

Subsequently, the court a quo directed the issuance of a writ of
condemnation in favor of [petitioner] through an order dated 14
February 1997. Likewise, for the purpose of determining the fair and
just compensation due to [respondent], the court appointed three
commissioners composed of one representative of the petitioner,
one for the respondent and the other from the court, namely: OIC-
Branch Clerk of Court Minda B. Teoxon as Chairperson and
Philippine National Bank-Naga City Loan Appraiser Mr. Isidro Virgilio
Bulao, Jr. and City Assessor Ramon R. Albeus as members.

On 03 and 06 March 1997, respectively, Commissioners Ramon
Albeus and Isidro Bulao, Jr. took their oath of office before OIC
Branch Clerk of Court and Chairperson Minda B. Teoxon.

Accordingly, the commissioners submitted their individual
appraisal/valuation reports. The commissioner for the [petitioner],
Commissioner Albeus, finding the subject land irregular and sloppy,
classified the same as low density residential zone and
recommended the price of P115.00 per square meter. On the other
hand, Commissioner Bulao, commissioner for the [respondent],
recommended the price of P550.00 per square meter. The courts
Commissioner and Chairperson of the Board Minda Teoxon, on the
other hand, found Commissioner Albeus appraisal low as compared
to the BIR Zonal Valuation and opted to adopt the price
recommended by Commissioner Bulao. On the assumption that the
subject land will be developed into a first class subdivision, she
recommended the amount of P550.00 per square meter as just
compensation for the subject property, or the total amount
of P12,628,940.50 for the entire area affected.[5]

Taking into consideration the condition, the surroundings and the

potentials of respondents expropriated property, the RTC approved
Chairperson Minda B. Teoxons recommended amount of P550 per
square meter as just compensation for the property. The trial court
opined that the installation thereon of the 350 KV Leyte-Luzon HVDC
Power Transmission Project would impose a limitation on the use of the
land for an indefinite period of time, thereby justifying the payment of
the full value of the property.
Further, the RTC held that it was not bound by the provision cited
by petitioner -- Section 3-A[6] of Republic Act 6395[7], as amended by Presidential Decree 938. This law
prescribes as just compensation for the acquired easement of a right of way over an expropriated property an easement fee in
an amount not exceeding 10 percent of the market value of such property. The trial court relied on the earlier pronouncements
of this Court that the determination of just compensation in eminent domain cases is a judicial function. Thus, valuations
made by the executive branch or the legislature are at best initial or preliminary only.
Ruling of the Court of Appeals

Affirming the RTC, the CA held that RA 6395, as amended by
PD No. 938, did not preclude expropriation. Section 3-A thereof
allowed the power company to acquire not just an easement of a right
of way, but even the land itself. Such easement was deemed by the
appellate court to be a taking under the power of eminent domain.
The CA observed that, given their nature, high-powered electric
lines traversing respondents property would necessarily diminish -- if
not damage entirely -- the value and the use of the affected property;
as well as endanger lives and limbs because of the high-tension
current conveyed through the lines. Respondent was therefore deemed
entitled to a just compensation, which should be neither more nor less
than the monetary equivalent of the property taken. Accordingly, the

appellate found the award of P550 per square meter to be proper and
reasonable.

Hence, this Petition.[8]
Issues

In its Memorandum, petitioner submits this lone issue for our

consideration:

Whether or not the Honorable Court of Appeals gravely erred in
affirming the Decision dated June 24, 1998 of the Regional Trial
Court, Branch 26, Naga City considering that its Decision dated
November 23, 2001 is not in accord with law and the applicable
decisions of this Honorable Court.[9]

The Courts Ruling

The Petition is devoid of merit.

Sole Issue:
Just Compensation

Petitioner contends that the valuation of the expropriated property
-- fixed by the trial court and affirmed by the CA -- was too high a price
for the acquisition of an easement of a mere aerial right of way, because
respondent would continue to own and use the subject land
anyway. Petitioner argues that in a strict sense, there is no taking of
property, but merely an imposition of an encumbrance or a personal
easement/servitude under Article 614[10] of the Civil Code. Such
encumbrance will not result in ousting or depriving respondent of the
beneficial enjoyment of the property. And even if there was a taking,
petitioner points out that the loss is limited only to a portion of the aerial
domain above the property of respondent. Hence, the latter should be
compensated only for what it would actually lose.
We are not persuaded.
Petitioner averred in its Complaint in Civil Case No. RTC 96-3675
that it had sought to acquire an easement of a right of way over portions
of respondents land -- a total area of 22,961.71 square meters.[11] In its
prayer, however, it also sought authority to enter the property and

demolish all improvements existing thereon, in order to commence and
undertake the construction of its Power Transmission Project.
In other words, the expropriation was not to be limited to an
easement of a right of way. In its Answer, respondent alleged that it had
already authorized petitioner to take possession of the affected portions
of the property and to install electric towers thereon.[12] The latter did not
controvert this material allegation.
Granting arguendo that what petitioner acquired over respondents
property was purely an easement of a right of way, still, we cannot
sustain its view that it should pay only an easement fee, and not the full
value of the property. The acquisition of such an easement falls within
the purview of the power of eminent domain. This conclusion finds
support in similar cases in which the Supreme Court sustained the award
of just compensation for private property condemned for public use.
Republic v. PLDT[14] held thus:

[13]

x x x. Normally, of course, the power of eminent domain
results in the taking or appropriation of title to, and possession of,
the expropriated property; but no cogent reason appears why the
said power may not be availed of to impose only a burden upon the
owner of condemned property, without loss of title and possession. It
is unquestionable that real property may, through expropriation, be
subjected to an easement of right of way.[15]

True, an easement of a right of way transmits no rights except the
easement itself, and respondent retains full ownership of the
property. The acquisition of such easement is, nevertheless,
not gratis. As correctly observed by the CA, considering the nature and
the effect of the installation power lines, the limitations on the use of the
land for an indefinite period would deprive respondent of normal use of
the property. For this reason, the latter is entitled to payment of a just
compensation, which must be neither more nor less than the monetary
equivalent of the land.[16]
Just compensation is defined as the full and fair equivalent of the
property taken from its owner by the expropriator. The measure is not
the takers gain, but the owners loss. The word just is used to intensify
the meaning of the word compensation and to convey thereby the idea
that the equivalent to be rendered for the property to be taken shall be
real, substantial, full and ample.[17]
In eminent domain or expropriation proceedings, the just
compensation to which the owner of a condemned property is entitled is
generally the market value. Market value is that sum of money which a
person desirous but not compelled to buy, and an owner willing but not
compelled to sell, would agree on as a price to be given and received
therefor.[18] Such amount is not limited to the assessed value of the
property or to the schedule of market values determined by the
provincial or city appraisal committee. However, these values may serve
as factors to be considered in the judicial valuation of the property.[19]
The parcels of land sought to be expropriated are undeniably
undeveloped, raw agricultural land. But a dominant portion thereof has
been reclassified by the Sangguniang Panlungsod ng Naga -- per Zoning
Ordinance No. 94-076 dated August 10, 1994 -- as residential, per the
August 8, 1996 certification of Zoning Administrator Juan O. Villegas

Jr.[20] The property is also covered by Naga City Mayor Jesse M.
Robredos favorable endorsement of the
issuance of a certification for land use conversion by the Department of
Agrarian Reform (DAR) on the ground that the locality where the
property was located had become highly urbanized and would have
greater economic value for residential or commercial use.[21]
The nature and character of the land at the time of its taking is the
principal criterion for determining how much just compensation should
be given to the landowner.[22] All the facts as to the condition of the
property and its surroundings, as well as its improvements and
capabilities, should be considered.[23]
In fixing the valuation at P550 per square meter, the trial court had
considered the Report of the commissioners and the proofs submitted by
the parties. These documents included the following: (1) the established
fact that the property of respondent was located along the Naga-Carolina
provincial road; (2) the fact that it was about 500 meters from the
Kayumanggi Resort and 8 kilometers from the Naga City Central

Business District; and a half kilometer from the
main entrance of the fully developed Naga City Sports Complex -- used
as the site of the Palarong Pambansa -- and the San Francisco Village
Subdivision, a first class subdivision where lots were priced at P2,500
per square meter; (3) the fair market value of P650 per square meter
proffered by respondent, citing its recently concluded sale of a portion of
the same property to Metro Naga Water District at a fixed price of P800
per square meter; (4) the BIR zonal valuation of residential lots in
Barangay Pacol, Naga City, fixed at a price of P220 per square meter as
of 1997; and (5) the fact that the price of P430 per square meter had
been determined by the RTC of Naga City (Branch 21)[24] as just
compensation for the Mercados adjoining property, which had been
expropriated by NPC for the same power transmission project.
The chairperson of the Board of Commissioners, in adopting the
recommendation of Commissioner Bulaos, made a careful study of the
property. Factors considered in arriving at a reasonable estimate of just
compensation for respondent were the location; the most profitable
likely use of the remaining area; and the size, shape, accessibility as well
as listings of other properties within the vicinity. Averments pertaining
to these factors were supported by documentary evidence.
On the other hand, the commissioner for petitioner -- City Assessor
Albeus -- recommended a price of P115 per square meter in his Report
dated June 30, 1997. No documentary evidence, however, was attached
to substantiate the opinions of the banks and the realtors, indicated in the
commissioners Report and computation of the market value of the
property.
The price of P550 per square meter appears to be the closest
approximation of the market value of the lots in the adjoining, fully
developed San Francisco Village Subdivision. Considering that the
parcels of land in question are still undeveloped raw land, it appears to
the Court that the just compensation of P550 per square meter is
justified.
Inasmuch as the determination of just compensation in eminent
domain cases is a judicial function,[25] and the trial court apparently did

not act capriciously or arbitrarily in setting the price at P550 per square
meter -- an award affirmed by the CA -- we see no reason to disturb the
factual findings as to the valuation of the property. Both the Report of
Commissioner Bulao and the commissioners majority Report were based
on uncontroverted facts supported by documentary evidence and
confirmed by their ocular inspection of the property. As can be gleaned
from the records, they did not abuse their authority in evaluating the
evidence submitted to them; neither did they misappreciate the clear
preponderance of evidence. The amount fixed and agreed to by the trial
court and respondent appellate court has not been grossly exorbitant or
otherwise unjustified.[26]

Majority Report of
Commissioners Sufficient

Deserving scant consideration is petitioners contention that the
Report adopted by the RTC and affirmed by the CA was not the same
one submitted by the board of commissioners, but was only that of its
chairperson. As correctly pointed out by the trial court, the
commissioners Report was actually a decision of the majority of the

board. Note that after reviewing the Reports of the other commissioners,
Chairperson Teoxon opted to adopt the recommendation of
Commissioner Bulao. There has been no claim that fraud or prejudice
tainted the majority Report. In fact, on December 19, 1997, the trial
court admitted the commissioners Report without objection from any of
the parties.[27]
Under Section 8 of Rule 67 of the Rules of Court, the court may
accept the report and render judgment in accordance therewith; or for
cause shown, it may recommit the same to the commissioners for further
report of facts, or it may set aside the report and appoint new
commissioners, or it may accept the report in part and reject it in part; x
x x. In other words, the reports of commissioners are merely advisory
and recommendatory in character, as far as the courts are concerned.[28]
Thus, it hardly matters whether the commissioners have
unanimously agreed on their recommended valuation of the property. It
has been held that the report of only two commissioners may suffice,
even if the third commissioner dissents.[29] As a court is not bound by

commissioners reports it may make such order or render such judgment
as shall secure for the plaintiff the property essential to the exercise of
the latters right of condemnation; and for the defendant, just
compensation for the property expropriated. For that matter, the court
may even substitute its own estimate of the value as gathered from the
evidence on record.[30]
WHEREFORE, the Petition is DENIED, and the assailed
Decision AFFIRMED. No pronouncement as to costs.

SO ORDERED.

Associate Justice
Chairman, Third Division

W E C O N C U R:

(On leave)
Associate Justice

RENATO C. CORONA CONCHITA CARPIO MORALES

ATTESTATION

consultation before the case was assigned to the writer of the opinion of
the Courts Division.

Associate Justice

CERTIFICATION

certified that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of
the Courts Division.

HILARIO G. DAVIDE, JR.
Chief Justice

*
On leave.
[1]
Rollo, pp. 8-32.
[2]
Id., pp. 33-41. Fourteenth Division. Penned by Justice Romeo A. Brawner (Division
chair) and concurred in by Justices Elvi John S. Asuncion and Juan Q. Enriquez Jr.
(members).
[3]
Id., pp. 42-46.
[4]
Presided by Judge Edgar S. Surtida.
[5]
CA Decision, pp. 2-4; rollo, pp. 34-36.
[6]
SEC. 3-A. In acquiring private property or private property rights through
expropriation proceedings where the land or portion thereof will be traversed by
the transmission lines, only a right-of-way easement thereon shall be acquired
when the principal purpose for which such land is actually devoted will not be
impaired, and where the land itself or a portion thereof will be needed for the
projects or works, such land or portion thereof as necessary shall be acquired.
In determining the just compensation of the property or property sought to be acquired
through expropriation proceedings, the same shall
(a) With respect to the acquired land or portion thereof, not exceed the
market value declared by the owner or administrator or anyone
having legal interest in the property, or such market value as
determined by the assessor, whichever is lower.
(b) With respect to the acquired right-of-way easement over the land or
portion thereof, not exceed ten percent (10%)of the market value
declared by the owner or administrator or anyone having legal
interest in the property, or such market value as determined by the
assessor, whichever is lower.
In addition to the just compensation for easement of right-of-way, the
owner of the land or owner of the improvement, as the case may be, shall be
compensated for the improvements actually damaged by the construction and
maintenance of the transmission lines, in an amount not exceeding the market
value thereof as declared by the owner or administrator, or anyone having legal
interest in the property, or such market value as determined by the assessor
whichever is lower; Provided, That in cases any buildings, houses, and similar
structures are actually affected by the right-of-way for the transmission lines, their
transfer, if feasible, shall be effected at the expense of the Corporation; Provided,
further, That such market value prevailing at the time the Corporation gives notice
to the landowner or administrator or anyone having legal interest in the property,
to the effect that his land or portion thereof is needed for its projects or works shall
be used as basis to determine the just compensation therefor.
[7]
Entitled An Act Revising the Charter of the National Power Corporation.
[8]
This case was deemed submitted for decision on May 9, 2003, upon this Courts receipt
of respondents Memorandum, signed by Atty. Michael G. Jornales. Petitioners
Memorandum, signed by Solicitors Renan E. Ramos and Arleen Q. Tadeo-Reyes
of the Office of the Solicitor General (OSG), was received by this Court on April
30, 2003.
[9]
Petitioners Memorandum, p. 5; rollo, p. 123. Original in upper case.
[10]
Art. 614. Servitudes may also be established for the benefit of a community, or of one
or more persons to whom the encumbered estate does not belong.
[11]
Records, p. 2.
[12]
Id., p. 20.
[13]
National Power Corporation v. Chiong, 404 SCRA 527, June 20, 2003; Eslaban Jr. v.
Vda de Onorio, 360 SCRA 230, June 28, 2001; Camarines Norte Electric
Cooperative, Inc. v. Court of Appeals, 345 SCRA 85, November 20, 2000
(citing National Power Corporation v. Gutierrez, 193 SCRA 1, January 18,
1991; National Power Corporation v. Court of Appeals, 325 Phil. 29, March 11,
1996).
[14]
136 Phil. 20, January 27, 1969.
[15]
Id., pp. 29-30, per Reyes, J.B.L., J.
[16]
Camarines Norte Electric Cooperative, Inc. v. Court of Appeals, supra.
[17]
Association of Small Landowners in the Philippines, Inc. v. Secretary of Agrarian
Reform, 175 SCRA 343, July 14, 1989.
[18]
National Power Corporation v. Chiong, supra, per Quisumbing, J.; Eslaban Jr. v. Vda.
de Onorio, supra.
[19]
Republic v. Ker and Company Limited, 383 SCRA 584, July, 2, 2002; Republic v.
Court of Appeals, 154 SCRA 428, September 30, 1987.
[20]
[21]
Id., p. 137.
[22]
National Power Corporation v. Chiong, supra.
[23]
Export Processing Zone Authority v. Dulay, 149 SCRA 305, April 29, 1987.
[24]
[25]
National Power Corporation vs. CA, supra, (citing National Power Corporation v.
Jocson, 206 SCRA 520, February 25, 1992).
[26]
Ibid. Manila Electric Company v. Pineda, 206 SCRA 196, February 13, 1992.
[27]
Records, p. 180.
[28]
Republic v. Intermediate Appellate Court, 185 SCRA 572, May 21, 1990.
[29]
National Power Corporation v. Chiong, supra; Republic v. Intermediate Appellate
Court, supra.
[30]
Republic v. Intermediate Appellate Court, supra; Republic v. Santos, 141 SCRA 30,
January 8, 1986.
SECOND DIVISION
[G.R. No. 152440. January 31, 2005]
FELICITACION B. BORBAJO, petitioner, vs. HIDDEN VIEW

HOMEOWNERS, INC., SPS. MARCELINA A. SARCON, ELY D.
SARCON, ROBERTO ALVAREZ, CORAZON NOMBRADO, and
GILBERT ANDRALES, in their personal capacities, respondents.
DECISION
TINGA, J.:
Before this Court is a Rule 45 petition assailing the Decision dated 21 September
[1]
2001 of the Court of Appeals which reversed the Decision dated 14 September 1999 of
[2]
the Regional Trial Court (RTC) of Cebu City, Branch 58.

The factual antecedents are as follows:
Jose C. Bontuyan (Bontuyan), Lucy Solon, Georgina Solon, Helen Solon and
Vicente Solon, Jr. (the Solons) were the registered owners of a parcel of agricultural
land (Lot 10183-A), covering an area of 13,910 square meters situated at Barangay
Bacayan, Cebu City as evidenced by Transfer Certificate of Title (TCT) No. 73709 of the
Register of Deeds of Cebu City. At the instance of Bontuyan, the property was
[3]
surveyed on 19 May 1991 to convert it into a subdivision. On 6 June 1991, the

corresponding subdivision plan, showing three (3) road lots as such, was submitted to
the Cebu Office of the Department of Environment and Natural Resources (DENR). On
24 July 1991, the Regional Technical Director of the DENR, Lands Management Sector,
Region Office VII, in Cebu, approved the subdivision plan. Meanwhile, in his own
[4]
behalf and as attorney-in-fact of the Solons and following the subdivision scheme in the
plan, Bontuyan sold the resulting lots to different individuals, as evidenced by the Deed
[5]
of Absolute Sale dated 18 June 1991.

[6]
Among the lots sold are the ones which later became the subject of this case, the
three (3) road lots. The road lots were sold to petitioner Felicitacion B. Borbajo, married
to Danilo S. Borbajo, and Prescillana B. Bongo (Bongo), married to Patricio P. Bongo.
However, they obtained the titles to the lots more than a month later on 30 July 1991.
[7] [8]
Using the advance payments of his lot purchasers, Bontuyan proceeded to develop
a subdivision which was later named Hidden View Subdivision I by its residents and
homeowners. Later, he applied for and secured from the Housing and Land Use
[9]
Regulatory Board (HLURB) a License to Sell dated 29 July 1991.

[10]
Borbajo also decided to develop into a subdivision the other properties adjacent
to Hidden View Subdivision I which she acquired. Thus, she applied for and received
SSA 674-5-94 issued by the Cebu City Planning and Development Department,
covering the parcel of land embraced by TCT No. 127642, to be subdivided into twenty-
three (23) lots. She named this new subdivision ST Ville Properties. On 29 July 1994,
[11]
she secured Certificate of Registration No. 05005 for the ST Ville Properties project and
a License to Sell the same from the HLURB. She also secured a Certificate of
Registration dated 18 August 1994 for another subdivision project called Hidden View
Subdivision II from the HLURB, with the corresponding License to Sell issued on 16
August 1994. The two new subdivision projects were located at the back of Hidden View
Subdivision I.
The residents and homeowners of Hidden View Subdivision I heard reports to the
effect that Borbajo had purchased the entire subdivision from Bontuyan through an oral
agreement. They also heard that they have no right to use the road lots, since the lots
have already been registered in Borbajos name. As a consequence, the Hidden View
Homeowners, Inc. invited Borbajo to a meeting. When confronted by the homeowners
about her claim that she had bought the subdivision from Bontuyan, Borbajo confirmed
her claim of ownership over the subdivision and the road lots. She also told them that
they have no right regarding the road right-of-way. [12]
The incident prompted the homeowners of Hidden View Subdivision I to inquire with
the HLURB about the validity of the registration of the subdivision road lots in the name
of Borbajo. They also asked whether she had the necessary documents for the
development of Hidden View Subdivision II and ST Ville Properties. In a letter dated[13]
17 March 1997, HLURB Regional Officer Antonio Decatoria, Sr. replied that under the
law the owner or developer of the subdivision should have legal title or right over the
road lots of the subdivision and that if the title or right is in the name of other persons it
follows that there is failure to comply with the requirements of the law. The HLURB
Officer pointed out that Hidden View Subdivision II and ST Ville Properties had not filed
an application for registration and license to sell with the HLURB.
[14]
On 10 August 1997, the homeowners caused the construction of a guardhouse at

the entrance of Hidden View Subdivision I and hired the services of a security guard to
prevent unauthorized persons and construction vehicles from passing through their
subdivision. The measures adversely affected the residents of the subdivisions at the
back, as well as Borbajo herself since her delivery trucks and heavy equipment used in
the construction of her housing projects then on-going had been effectively prevented
from passing through the road lots.[15]
On 28 August 1997, Borbajo filed before the RTC of Cebu City, Branch 58, an
action for damages and injunction against Hidden View Homeowners, Inc., spouses
Marcelina A. Sarcon and Ely D. Sarcon, Roberto Alvarez and Corazon Nombrado and
Gilbert Andrales (respondents herein). Borbajo prayed for the issuance of a temporary
restraining order (TRO) directing respondents to maintain the status quo and to desist
from preventing her delivery trucks and other construction vehicles, and her
construction workers, from passing through the road lots, and, after hearing on the
merits, that judgment be rendered making the restraining order or preliminary injunction
permanent and ordering the defendants to pay damages. [16]
The trial court issued a TRO effective for seventy-two (72) hours. After due hearing,
it also granted Borbajos application for a writ of preliminary injunction. It denied
respondents motion to dismiss on the ground that it is the HLURB which has jurisdiction
over the case.[17]
After trial, the trial court rendered its decision dated 14 September 1999, the
dispositive portion of which reads:
WHEREFORE, premises considered, judgment is hereby rendered enjoining the

defendants to close [sic] the road lots in question, hence, making the injunction
permanent, subject to the right of the defendants to regulate the passage thereof by the
plaintiff and the general public; and directing the plaintiff to donate the road lots in
question to the government of Cebu City. No pronouncement as to any damages and
as to costs.
SO ORDERED. [18]
On appeal, the Court of Appeals reversed the lower court decision. The decretal
portion of the appellate courts decision dated 21 September 2001 reads:
WHEREFORE, premises considered, the present appeal is hereby GRANTED. The

appealed Decision in Civil Case No. CEB-20796 is hereby REVERSED and SET
ASIDE and a new one is hereby rendered DISMISSING the complaint. The
counterclaim of defendants-appellants is likewise dismissed for lack of legal and
factual bases.
SO ORDERED. [19]
Undaunted, Borbajo elevated the case to this Court.

In her petition, Borbajo imputes error to the appellate court (a) in reversing the
decision of the trial court which declared her to be the developer of Hidden View
Subdivision I, (b) in finding that she had fraudulently secured the registration of the
three (3) road lots, and (c) in declaring that she is not entitled to the injunctive relief. [20]
Borbajo contends that the appellate court erred in reversing the finding of the RTC
that she is the developer of Hidden View Subdivision I. According to her, and as borne
out by her testimony before the RTC, she was the true developer of Hidden View
Subdivision I even though the License to Sell was issued in the name of Bontuyan. The
appellate court allegedly violated prevailing jurisprudence when it held that she
fraudulently secured the registration of the three (3) road lots since a certificate of title
cannot be collaterally attacked except in direct proceedings instituted for that purpose.
In fact, Hidden View Homeowners, Inc. has filed a separate case for annulment of title
against Borbajo which is now pending before Branch 9 of the RTC of Cebu City.
Further, she claims that she is entitled to the injunctive relief considering that she is the
registered owner of these road lots in question and, hence, she has a right
in esse which deserves legal protection. [21]
On the other hand, respondents argue that the sale of the road lots made by
Bontuyan in favor of Borbajo was illegal and contrary to the provisions of Presidential
Decree (P.D.) No. 957 which requires that the road lots in a subdivision development
shall be in the name of the developer or owner, of which Borbajo is neither. They aver
[22]
that Borbajo fraudulently obtained her titles to the road lots through a falsified deed of
sale which was the document presented to the Office of the Register of Deeds. They [23]
also point out that the use by Borbajo of the road lots for the ingress and egress of
heavy equipment has continuously resulted in the rapid deterioration of the roads.
Moreover, the road lots are not the nearest point between the development project of
Borbajo and the provincial road. Finally, they assert that they are merely exercising
[24]
acts of ownership which include the right to prevent others from enjoying the thing
owned by them. Respondents oppose the issuance of a preliminary injunction because
notwithstanding the registration of the subject road in Borbajos name, her title thereto is
tainted by the discovery of fraud she allegedly perpetrated in securing the questioned
titles.
[25]
The result which Borbajo seeks to achieve which is to reinstate the preliminary
injunction issued by the lower court has to be granted, but not for the reasons which she
has raised nor for the grounds which the lower court relied upon.
The ultimate question for resolution is whether respondents may legally prevent
Borbajo from using and passing through the three (3) road lots within Hidden View
Subdivision I. It is worthy of note that the right of respondents to use the road lots
themselves is not in dispute.
In resolving the controversy, the lower court addressed only the issue of whether
respondents have the right to close the road lots, and the question of damages. It [26]
concluded that respondents cannot legally close the road lots because these are
intended for public use. It opted not to resolve the question pertaining to the validity of
Borbajos acquisition of the road lots and her title thereto on the ground that a Torrens
title cannot be collaterally attacked.
[27]
For its part, the Court of Appeals addressed the trial courts errors assigned by the
respondents herein. The trial court allegedly erred in: (a) finding that Borbajo was the
developer of Hidden View Subdivision I; (b) finding that the manner by which Borbajo
acquired the road lots is irrelevant to the resolution of the issues in this case; (c) finding
that the road lots are open to the public and the only right of the residents therein is to
regulate its use; (d) not finding that the elements of an easement of a right-of-way are
not present; (e) finding that the injunction was properly issued and the court ordered
Borbajo to donate the road lots in favor of the local government unit; and (f) failing to
award damages to the respondents. [28]
The appellate court found that the injunctive writ was erroneously issued as the
same was not based on an actual right sought to be protected by law. The fact that
Borbajo was the developer of Hidden View Subdivision I was not clearly established by
evidence. Although Borbajo has claimed that she was the developer of the subdivision
and that Bontuyans name was indicated in the License to Sell, such claim carried scant
weight in the absence of a certificate of registration of the subdivision project issued in
her name by the HLURB and other documents which prove that she was indeed the
developer. Further, the appellate court ruled that the fact of registration of the road lots
[29]
in Borbajos name was insufficient to defeat the right of the homeowners of the
subdivision and preclude them from regulating their use and administration thereof in
accordance with existing laws and regulations. It likewise held that Borbajo had not
[30]
complied with the requisites of a compulsory easement of right-of-way and pointed out
the general rule that mere convenience for the dominant estate is not what is required
by law as the basis for setting up a compulsory easement. Hence, this instant judicial
[31]
recourse.
Noticeably, the appellate court dwelt at length on the question of whether Borbajo
was the developer of the Hidden View Subdivision I as she claimed. Apparently,
Borbajo submitted this point, with her focus set on the provisions of P.D. No. 957, as
amended, ordaining that road lots may be titled only in the name of the owner of the
subdivision or its developer. In the process, however, the Court of Appeals lost sight of
the settled and decisive fact that Borbajo is one of the registered co-owners of the road
lots along with Bongo. The evidence reveals that Borbajo and Bongo were issued TCTs,
all dated 30 July 1991, for the three (3) road lots situated within the Hidden View
Subdivision I. These titles were issued pursuant to the Deed of Absolute Sale dated 18
June 1991 which also mentioned the road lots as such.
As a registered co-owner of the road lots, Borbajo is entitled to avail of all the
attributes of ownership under the Civil Codejus utendi, fruendi, abutendi, disponendi et
vindicandi. Article 428 of the New Civil Code is explicit that the owner has the right to
[32]
enjoy and dispose of a thing, without other limitations than those established by law. A
co-owner, such as Borbajo, is entitled to use the property owned in common under
Article 486 of the Civil Code. Therefore, respondents cannot close the road lots to
prevent Borbajo from using the same.
The Court of Appeals ruled that the road lots cannot be sold to any person pursuant
to P.D. No. 957, as amended. It also pointed out that fraud is manifest in the acquisition
of titles thereto. However, it is a settled rule that a Torrens title cannot be collaterally
attacked.
It is a well-known doctrine that the issue as to whether title was procured by
falsification or fraud can only be raised in an action expressly instituted for the purpose.
A Torrens title can be attacked only for fraud, within one year after the date of the
issuance of the decree of registration. Such attack must be direct, and not by a
collateral proceeding. The title represented by the certificate cannot be changed,
altered, modified, enlarged, or diminished in a collateral proceeding. The certificate of
[33]
title serves as evidence of an indefeasible title to the property in favor of the person
whose name appears therein. [34]
However, in upholding the efficiency value of the disputed titles for purposes of the
present petition, we are not foreclosing any future determination by appropriate forum
on the legality of Borbajos titles over the road lots. Verily, a separate case for annulment
of titles over the road lots is now pending before the court. There are serious allegations
that the issuance of the TCTs over the road lots was tainted with fraud as evidenced by
alterations made on the face of the certificates and discrepancies in the records of the
contract of absolute sale filed before the Office of the Register of Deeds and the
Notarial Division of the RTC of Cebu City. If the court finds that the titles of Borbajo
[35]
were obtained fraudulently, her right to the road lots ceases as well as her right-of-way
by virtue of said titles.
In the meantime, however, we are bound by the value in law and the evidentiary
weight of the titles in the name of Borbajo. As long as the titles are not annulled,
Borbajo remains registered a co-owner and therefore her right to use the road lots
subsists.
Likewise, with Borbajo as a registered co-owner of the road lots, it is utterly
pointless to discuss whether she is entitled to the easement of right of way. Both from
the text of Article 649 of the Civil Code and the perspective of elementary common
[36]
sense, the dominant estate cannot be the servient estate at the same time. One of the
characteristics of an easement is that it can be imposed only on the property of another,
never on ones own property. An easement can exist only when the servient and the
dominant estates belong to different owners. [37]
Borbajo, being a registered co-owner of the three (3) road lots, is entitled to the
injunctive relief.
The requisites to justify an injunctive relief are: (a) the existence of a right in esse or
the existence of a right to be protected; and (b) the act against which injunction is to be
directed as a violation of such right. A preliminary injunction order may be granted only
[38]
when the application for the issuance of the same shows facts entitling the applicant to
the relief demanded. A preliminary injunction is not proper when its purpose is to take
[39]
the property out of the possession or control of one party and transfer the same to the
hands of another who did not have such control at the inception of the case and whose
legal title has not clearly been established. [40]
One final note. Respondents in their Answer neither claimed nor asked for the
[41]
right to regulate the use of the road lots or that the road lots be donated to the Cebu
City Government. Thus, there was utterly no basis for the trial court to include as it did
its disposition along these lines in the decretal portion of its decision.
WHEREFORE, the Decision of the Court of Appeals dated 21 September 2001 is
REVERSED and SET ASIDE and the writ of preliminary injunction issued by the
Regional Trial Court of Cebu City, Branch 58, is made permanent, subject to the final
outcome of Civil Case No. 21239 pending before the Regional Trial Court of Cebu City,
Branch 9.
No costs.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, and Chico-Nazario, JJ., concur.
Callejo, Sr., J., on official leave.
[1]
Rollo, p. 16. Decision penned by Associate Justice Martin S. Villarama, Jr. and concurred in by Justices
Conrado M. Vasquez, Jr. and Eliezer R. de los Santos.
[2]
Id. at 24. Decision penned by Judge Jose P. Soberano, Jr.
[3]
Id. at 16.
[4]
Records, p. 27.
[5]
Id. at 6-8. The buyers were: Maria Carmelita Q. Decasa, Rodulfo Flores, Marcelina A. Sarcon, Alicia M.
Dawe, Mila Enriquez, Angelina Dalanon, Deborah Presto, Fatima Batucan, Felicitacion B.
Borbajo and Prescillana B. Bongo, Rey Gumera, Corazon Nombrado, Azucena Leong, Sanone
Lawas, Raquel C. Canada, Helen C. Cabayao, Prescillana B. Bongo, Ruchelle Almirante, Paul
Chua, Lamberto Te, Jr., Antonio S. Ronquillo, Charito Puno, and Edgar C. Lagarnia.
[6]
Id. at 8.
[7]
Id. at 7.
[8]
The following titles were issued to Borbajo and Bongo: TCT No. T-117437 for Road Lot 1; TCT No. T-
117563 for Road Lot 2; TCT No. T-117564 for Road Lot 3.
[9]
TSN, 16 March 1999, pp. 12-13.
[10]
Records, p. 29.
[11]
Id. at 51.
[12]
Id. at 17. See also TSN, 1 September 1998, p. 6.
[13]
Records, p. 231.
[14]
Id. at 232. But see note 12.
[15]
Rollo, p. 18.
[16]
Ibid.
[17]
Ibid.
[18]
Id. at 33.
[19]
Id. at 23.
[20]
Id. at 7.
[21]
Id. at 10-11.
[22]
Id. at 18.
[23]
Id. at 18 and 52.
[24]
Id. at 19.
[25]
Id. at 52.
[26]
Id. at 31.
[27]
Id. at 32.
[28]
Rollo, p. 20.
[29]
Id. at 21.
[30]
Id. at 22.
[31]
Id. at 23, citing Floro v. Llanado, G.R. No. 75723, June 2, 1995, 244 SCRA 713.
[32]
TOLENTINO, CIVIL CODE OF THE PHILIPPINES, 1992, Vol. II, p. 46.
[33]
Lagrosa v. Court of Appeals, 370 Phil. 225 (1999) citing Ybanez v. Intermediate Appellate Court, 194
SCRA 743 and Cimafranca v. Intermediate Appellate Court, 147 SCRA 611.
[34]
Ybanez v. Intermediate Appellate Court, G.R. No. 68291, 6 March 1991, supra.
[35]
Rollo, p. 48.
[36]
ART. 649 of the New Civil Code provides: The owner, or any person who by virtue of a real right may
cultivate or use any immovable, which is surrounded by other immovables pertaining to other
persons and without adequate outlet to a public highway, is entitled to demand a right of way
through the neighboring estates, after payment of the proper indemnity.
....
[37]
TOLENTINO, supra, note 32 at 354.
[38]
Philippine Sinter Corporation v. Cagayan Electric Power and Light Co., Inc., 431 Phil. 324 (2002).
[39]
Kho v. Court of Appeals, 429 Phil. 140 (2002).
[40]
Bustamante v. Court of Appeals, 430 Phil. 797 (2002).
[41]
Records, p. 82.
SUPREME COURT
Manila

SECOND DIVISION

BARANGAY SINDALAN, SAN G.R. No. 150640
FERNANDO, PAMPANGA,
rep. by BARANGAY CAPTAIN
ISMAEL GUTIERREZ, Present:
Petitioner,
CARPIO,
TINGA, and
VELASCO, JR., JJ.
COURT OF APPEALS, JOSE
MAGTOTO III, and PATRICIA Promulgated:
SINDAYAN,
Respondents. March 22, 2007

x-----------------------------------------------------------------------------------------x

DECISION

VELASCO, JR., J.:

Expropriation, if misused or abused, would trench on the property rights of
individuals without due process of law.

The Case

For review before the Court in a petition for certiorari under Rule 45 are the
May 30, 2001 Decision[1] and October 26, 2001 Resolution[2] of the Court of
Appeals (CA), reversing and setting aside the August 2, 1990 Order [3] of the San
Fernando, Pampanga Regional Trial Court (RTC), Branch 43. The CA Resolution
denied petitioners Motion for Reconsideration of the May 30, 2001 Decision and in
effect, the appellate court dismissed petitioners Complaint for eminent domain.
The Facts
On April 8, 1983, pursuant to a resolution passed by the barangay council,
petitioner Barangay Sindalan, San Fernando, Pampanga, represented
by Barangay Captain Ismael Gutierrez, filed a Complaint for eminent domain
against respondents spouses Jose Magtoto III and Patricia Sindayan, the registered
owners of a parcel of land covered by Transfer Certificate of Title No. 117674-
R. The Complaint was docketed as Civil Case No. 6756 and raffled to the San
Fernando, Pampanga RTC, Branch 43. Petitioner sought to convert a portion of
respondents land into Barangay Sindalans feeder road. The alleged public purposes
sought to be served by the expropriation were stated in BarangayResolution No. 6,
as follows:

WHEREAS, said parcels of land shall be used, when acquired, as a
barangay feeder road for the agricultural and other products of the residents,
and just as inlet for their basic needs;

WHEREAS, presently, residents have to take a long circuitous dirt road
before they can reach the concrete provincial road, entailing so much time,
effort and money, not to mention possible damage and/or spilage [sic] on
the products consigned to or coming from, the market outside the barangay;
and

WHEREAS, said lots, used as outlet or inlet road, shall contribute greatly to
the general welfare of the people residing therein social, cultural and health
among other things, beside economic.[4]

Petitioner claimed that respondents property was the most practical and
nearest way to the municipal road. Pending the resolution of the case at the trial
court, petitioner deposited an amount equivalent to the fair market value of the
property.[5]

On the other hand, respondents stated that they owned the 27,000- square
meter property, a portion of which is the subject of this case. In their
Memorandum,[6] they alleged that their lot is adjacent to Davsan II Subdivision
privately owned by Dr. Felix David and his wife. Prior to the filing of the
expropriation case, said subdivision was linked to MacArthur Highway through a
pathway across the land of a certain Torres family. Long before the passage of
the barangay resolution, the wives of the subdivision owner and
the barangay captain, who were known to be agents of the subdivision, had
proposed buying a right-of-way for the subdivision across a portion of respondents
property. These prospective buyers, however, never returned after learning of the
price which the respondents ascribed to their property.

Respondents alleged that the expropriation of their property was for private
use, that is, for the benefit of the homeowners of Davsan II Subdivision. They
contended that petitioner deliberately omitted the name of Davsan II Subdivision
and, instead, stated that the expropriation was for the benefit of the residents
of Sitio Paraiso in order to conceal the fact that the access road being proposed to
be built across the respondents land was to serve a privately owned subdivision and
those who would purchase the lots of said subdivision. They also pointed out that
under Presidential Decree No. (PD) 957, it is the subdivision owner who is obliged
to provide a feeder road to the subdivision residents.[7]

After trial, the court a quo ruled, thus:
WHEREFORE, in view of all the foregoing premises duly considered,
the herein plaintiff is hereby declared as having a lawful right to take the
property hereinabove described and sought to be condemned for the public
purpose or use as aforestated, upon payment of just compensation to be
determined as of the date of the filing of the Complaint in this [sic]
expropriation proceedings.

Upon the entry of this Order of Condemnation, let three (3) competent and
disinterested persons be appointed as Commissioners to ascertain and report
to the Court the just compensation for the property condemned.[8]


Upon respondents appeal, the CA held:

We are convinced that it is the duty of the subdivision owner to provide the
right of way needed by residents of Davsan II Subdivision as provided for
in Section 29 of P.D. 957. Records show that Purok Paraiso, which is
supposed to benefit from this [sic] expropriation proceedings is in reality
Davsan II Subdivision as per the testimony of Ruben Palo, plaintiffs own
witness (TSN, p. 12, December 115, 1986) [sic]. Appellants correctly stated
that:

The act of Bo. Sindalan, San Fernando, Pampanga, in effect
relieved the owners of Davsan II Subdivision of spending their
own private funds for acquiring a right of way and constructing the
required access road to the subdivision. It spent public funds for
such private purpose and deprived herein defendants-appellants of
their property for an ostensible public purpose x x x.

xxxx

WHEREFORE, premises considered, the appealed Decision is
hereby REVERSED and SET ASIDE and the Complaint for Eminent
Domain is DISMISSED for lack of merit.

SO ORDERED.[9]

The Issues

Petitioner imputes errors to the CA for (1) allegedly violating its power of
eminent domain, (2) finding that the expropriation of the property is not for public
use but for a privately owned subdivision, (3) finding that there was no payment of
just compensation, and (4) failing to accord respect to the findings of the trial
court. Stated briefly, the main issue in this case is whether the proposed exercise of
the power of eminent domain would be for a public purpose.
The Courts Ruling


In general, eminent domain is defined as the power of the nation or a sovereign
state to take, or to authorize the taking of, private property for a public use without
the owners consent, conditioned upon payment of just compensation.[10] It is
acknowledged as an inherent political right, founded on a common necessity and
interest of appropriating the property of individual members of the community to
the great necessities of the whole community.[11]
The exercise of the power of eminent domain is constrained by two constitutional

provisions: (1) that private property shall not be taken for public use without just
compensation under Article III (Bill of Rights), Section 9 and (2) that no person
shall be deprived of his/her life, liberty, or property without due process of law
under Art. III, Sec. 1.

However, there is no precise meaning of public use and the term is susceptible of
myriad meanings depending on diverse situations. The limited meaning attached to
public use is use by the public or public employment, that a duty must devolve on
the person or corporation holding property appropriated by right of eminent
domain to furnish the public with the use intended, and that there must be a right
on the part of the public, or some portion of it, or some public or quasi-public
agency on behalf of the public, to use the property after it is condemned.[12] The
more generally accepted view sees public use as public advantage, convenience, or
benefit, and that anything which tends to enlarge the resources, increase the
industrial energies, and promote the productive power of any considerable number
of the inhabitants of a section of the state, or which leads to the growth of towns
and the creation of new resources for the employment of capital and labor, [which]
contributes to the general welfare and the prosperity of the whole community. [13] In
this jurisdiction, public use is defined as whatever is beneficially employed for the
community.[14]

It is settled that the public nature of the prospective exercise of expropriation
cannot depend on the numerical count of those to be served or the smallness or
largeness of the community to be benefited.[15] The number of people is not
determinative of whether or not it constitutes public use, provided the use is
exercisable in common and is not limited to particular individuals.[16] Thus, the first
essential requirement for a valid exercise of eminent domain is for the expropriator
to prove that the expropriation is for a public use. In Municipality of Bian v.
Garcia, this Court explicated that expropriation ends with an order of
condemnation declaring that the plaintiff has a lawful right to take the property
sought to be condemned, for the public use or purpose described in the
complaint, upon the payment of just compensation.[17]

Another vital requisite for a valid condemnation is the payment of just
compensation to the property owner. In the recent case of APO Fruits Corporation
v. The Honorable Court of Appeals,[18] just compensation has been defined as the
full and fair equivalent of the property taken from its owner by the expropriator,
and that the gauge for computation is not the takers gain but the owners loss. In
order for the payment to be just, it must be real, substantial, full, and ample. Not
only must the payment be fair and correctly determined, but also, the Court
in Estate of Salud Jimenez v. Philippine Export Processing Zone stressed that the
payment should be made within a reasonable time from the taking of the property.
[19]
It succinctly explained that without prompt payment, compensation cannot be
considered just inasmuch as the property owner is being made to suffer the
consequences of being immediately deprived of the land while being made to wait
for a decade or more before actually receiving the amount necessary to cope with
the loss.Thus, once just compensation is finally determined, the expropriator must
immediately pay the amount to the lot owner. In Reyes v. National Housing
Authority, it was ruled that 12% interest per annum shall be imposed on the final
compensation until paid.[20] Thus, any further delay in the payment will result in the
imposition of 12% interest per annum. However, in the recent case of Republic v.
Lim, the Court enunciated the rule that where the government failed to pay just
compensation within five (5) years from the finality of the judgment in the
expropriation proceedings, the owners concerned shall have the right to recover
possession of their property.[21]

Since the individual stands to lose the property by compulsion of the law, the
expropriation authority should not further prejudice the owners rights by delaying
payment of just compensation. To obviate any possibility of delay in the payment,
the expropriator should already make available, at the time of the filing of the
expropriation complaint, the amount equal to the BIR zonal valuation or the fair
market value of the property per tax declaration whichever is higher.

The delayed payment of just compensation in numerous cases results from lack of
funds or the time spent in the determination of the legality of the expropriation
and/or the fair valuation of the property, and could result in dismay,
disappointment, bitterness, and even rancor on the part of the lot owners. It is not
uncommon for the expropriator to take possession of the condemned property upon
deposit of a small amount equal to the assessed value of the land per tax
declaration and then challenge the valuation fixed by the trial court resulting in an
expropriate now, pay later situation. In the event the expropriating agency
questions the reasonability of the compensation fixed by the trial court before the
appellate court, then the latter may, upon motion, use its sound discretion to order
the payment to the lot owner of the amount equal to the valuation of the property,
as proposed by the condemnor during the proceedings before the commissioners
under Sec. 6, Rule 67 of the Rules of Court, subject to the final valuation of the
land. This way, the damage and prejudice to the property owner would be
considerably pared down.
On due process, it is likewise basic under the Constitution that the property owner
must be afforded a reasonable opportunity to be heard on the issues of public use
and just compensation and to present objections to and claims on them.[22] It is
settled that taking of property for a private use or without just compensation is a
deprivation of property without due process of law.[23] Moreover, it has to be
emphasized that taking of private property without filing any complaint before a
court of law under Rule 67 of the Rules of Court or existing laws is patently
felonious, confiscatory, and unconstitutional. Judicial notice can be taken of some
instances wherein some government agencies or corporations peremptorily took
possession of private properties and usurped the owners real rights for their
immediate use without first instituting the required court action. Running
roughshod over the property rights of individuals is a clear and gross breach of the
constitutional guarantee of due process, which should not be countenanced in a
society where the rule of law holds sway.

In the case at bar, petitioner harps on eminent domain as an inherent power
of sovereignty similar to police power and taxation. As a basic political unit,
its SangguniangBarangay is clothed with the authority to provide barangay roads
and other facilities for public use and welfare. Petitioner relied on the following
cases which held a liberal view of the term public use in recognition of the
evolving concept of the power of eminent domain: Sea v. Manila Railroad
Co.; Philippine Columbian Association v. Panis; Sumulong v. Guerrero; Province
of Camarines Sur v. Court of Appeals; and Manosca v. Court of Appeals.[24]

Petitioners delegated power to expropriate is not at issue. The legal question
in this petition, however, is whether the taking of the land was for a public purpose
or use. In the exercise of the power of eminent domain, it is basic that the taking of
private property must be for a public purpose. A corollary issue is whether private
property can be taken by law from one person and given to another in the guise of
public purpose.

In this regard, the petition must fail.

Petitioner alleges that there are at least 80 houses in the place and about 400
persons will be benefited with the use of a barangay road. The trial court believed
that the expropriation will not benefit only the residents of the subdivision, but also
the residents of Sitio or Purok Paraiso and the residents of the entire Barangay of
Sindalan x x x.[25]The trial court held that the subdivision is covered
by Sitio or Purok Paraiso which is a part or parcel of Barangay Sindalan. However,
this finding was not supported by evidence.On the contrary, it is Sitio Paraiso
which is within Davsan II Subdivision based on the testimony of petitioners own
witness, Ruben Palo, as follows:
Atty. Mangiliman: Mr. Palo, you said that you have been residing at Sitio
Paraiso since 1973, is this Sitio Paraiso within the Davson [sic]
Subdivision?

Witness: Yes, sir.

xxxx

Atty. Mangiliman: And before you purchased that or at the time you
purchased it in 1972, I am referring to the lot where you are now
residing, the Davson [sic] Subdivision did not provide for a road
linking from the subdivision to the barrio road, am I correct?

Witness: None, sir.

Atty. Mangiliman: And despite [sic] of that you purchased a lot inside
Davson [sic] Subdivision?

Witness: Yes, sir.

Atty. Mangiliman: Did you not demand from the developer of Davson [sic]
Subdivision that he should provide a road linking from the
subdivision to the barrio road of Sindalan?

Witness: No, sir, because I know they will provide for the road.

Atty. Mangiliman: And when you said that they will provide for that road,
you mean to tell us that it is the developer of Davson [sic]
Subdivision who will provide a road linking from the subdivision to
the barrio road of Sindalan?

Witness: Yes, sir.

Atty. Mangiliman: Now, Mr. Witness, you will agree with me that the
proposed road which will connect from Davson [sic] Subdivision to
the barrio road of Sindalan would benefit mainly the lot buyers and
home owners of Davson [sic] Subdivision?

Witness: Yes, sir.

Atty. Mangiliman: And you also agree with me that there is no portion of
Davson [sic] Subdivision which is devoted to the production of
agricultural products?

Witness: None, sir.

Atty. Mangiliman: When the road which is the subject of this case and
sought to be expropriated has not yet been opened and before a Writ
of Possession was issued by the Court to place the plaintiff in this
case in possession, the residents of Davson [sic] Subdivision have
other way in going to the barrio road?

Witness: None, sir.

Atty. Mangiliman: In that case Mr. Witness, how do you negotiate or go out
of the subdivision in going to the barrio?

Witness: We passed to the lot own [sic] by Mr. Torres which is near the
subdivision in going to the barrio road, sir.

Atty. Mangiliman: Did you not complain to the owner/developer of the
subdivision that he should provide for a road linking to [sic] his
subdivision to the barrio road because there is no available exit from
the said subdivision to the barrio road?

Witness: We have been telling that and he was promising that there will be
a road, sir.[26]

Firstly, based on the foregoing transcript, the intended feeder road sought to
serve the residents of the subdivision only. It has not been shown that the other
residents of Barangay Sindalan, San Fernando, Pampanga will be benefited by the
contemplated road to be constructed on the lot of respondents spouses Jose
Magtoto III and Patricia Sindayan. While the number of people who use or can use
the property is not determinative of whether or not it constitutes public use or
purpose, the factual milieu of the case reveals that the intended use of respondents
lot is confined solely to the Davsan II Subdivision residents and is not exercisable
in common.[27] Worse, the expropriation will actually benefit the subdivisions
owner who will be able to circumvent his commitment to provide road access to
the subdivision in conjunction with his development permit and license to sell from
the Housing and Land Use Regulatory Board, and also be relieved of spending his
own funds for a right-of-way. In this factual setting, the Davsan II Subdivision
homeowners are able to go to the barrio road by passing through the lot of a certain
Torres family. Thus, the inescapable conclusion is that the expropriation of
respondents lot is for the actual benefit of the Davsan II Subdivision owner, with
incidental benefit to the subdivision homeowners.

The intended expropriation of private property for the benefit of a private
individual is clearly proscribed by the Constitution, declaring that it should be for
public use or purpose. In Charles River Bridge v. Warren, the limitation on
expropriation was underscored, hence:

Although the sovereign power in free government may appropriate all
property, public as well as private, for public purposes, making
compensation therefore; yet it has never been understood, at least never
in our republic, that the sovereign power can take the private property
of A and give it to B by the right of eminent domain; or that it can take it
at all, except for public purposes; or that it can take it for public purposes,
without the duty and responsibility of ordering compensation for the
sacrifice of the private property of one, for the good of the whole (11 Pet. at
642) (emphasis supplied).[28]

US case law also points out that a member of the public cannot acquire a
certain private easement by means of expropriation for being unconstitutional,
because even if every member of the public should acquire the easement, it would
remain a bundle of private easements.[29]

Secondly, a compelling reason for the rejection of the expropriation is
expressed in Section 29, PD 957, which provides:

Sec. 29. Right of Way to Public Road.The owner or developer of a
subdivision without access to any existing public road or street must secure
a right of way to a public road or street and such right of way must be
developed and maintained according to the requirement of the government
authorities concerned.

Considering that the residents who need a feeder road are all subdivision lot
owners, it is the obligation of the Davsan II Subdivision owner to acquire a right-
of-way for them. However, the failure of the subdivision owner to provide an
access road does not shift the burden to petitioner. To deprive respondents of their
property instead of compelling the subdivision owner to comply with his obligation
under the law is an abuse of the power of eminent domain and is patently
illegal. Without doubt, expropriation cannot be justified on the basis of an unlawful
purpose.

Thirdly, public funds can be used only for a public purpose. In this proposed
condemnation, government funds would be employed for the benefit of a private
individual without any legal mooring. In criminal law, this would constitute
malversation.

Lastly, the facts tend to show that the petitioners proper remedy is to require
the Davsan II Subdivision owner to file a complaint for establishment of the
easement of right-of-way under Articles 649 to 656 of the Civil Code. Respondents
must be granted the opportunity to show that their lot is not a servient
estate. Plainly, petitioners resort to expropriation is an improper cause of action.

One last word: the power of eminent domain can only be exercised for
public use and with just compensation. Taking an individuals private property is a
deprivation which can only be justified by a higher goodwhich is public useand can
only be counterbalanced by just compensation. Without these safeguards, the
taking of property would not only be unlawful, immoral, and null and void, but
would also constitute a gross and condemnable transgression of an individuals
basic right to property as well.

For this reason, courts should be more vigilant in protecting the rights of the
property owner and must perform a more thorough and diligent scrutiny of the
alleged public purpose behind the expropriation. Extreme caution is called for in
resolving complaints for condemnation, such that when a serious doubt arises
regarding the supposed public use of property, the doubt should be resolved in
favor of the property owner and against the State.
WHEREFORE, we AFFIRM the May 30, 2001 Decision and the October
26, 2001 Resolution of the CA, with costs against petitioner.

SO ORDERED.

Associate Justice

WE CONCUR:

Associate Justice
Chairperson


DANTE O. TINGA
Associate Justice

ATTESTATION


Associate Justice
Chairperson

CERTIFICATION


REYNATO S. PUNO
Chief Justice

[1]
Rollo, pp. 27-36. The Decision was penned by Associate Justice Ramon A. Barcelona and concurred in by
Associate Justices Rodrigo V. Cosico and Alicia L. Santos.
[2]
Id. at 44-45.
[3]
Id. at 52-67.
[4]
Id. at 58.
[5]
Id. at 52.
[6]
Id. at 302-310.
[7]
Regulating the Sale of Subdivision Lots and Condominiums, Providing Penalties for Violations Thereof (1976),
Sec. 29.
[8]
[9]
Rollo, pp. 33-36.
[10]
26 Am Jur 2d 638; citing Re Ohio Turnpike Can. 164 Ohio St 377, 58 Ohio Ops 179, 131 NE2d 397.
[11]
Id.; citing Bloodgood v. Mohawk & H.R. Co., 18 Wend. (NY).
[12]
Id.; citing Cloth v. Chicago, R.I., & P.R. Co., 97 Ark 86, 132 SW 1005.
[13]
Id. at 673; citing Strikley v. Highland Bay Gold Min. Co., 200 US 527.
[14]
Sea v. Manila Railroad Co., 42 Phil. 102, 105 (1921).
[15]
Supra note 10, at 679; citing Charlotte v. Heath, 226 NC 750, 40 SE 2d 600, 169 ACR 569.
[16]
Id. at 680; citing Cox v. Revelle, 123 MD 579, 94 A 203.
[17]
G.R. No. 69260, December 22, 1989, 180 SCRA 576, 583-584.
[18]
G.R. No. 164195, February 6, 2007.
[19]
G.R. No. 137285, January 16, 2001, 349 SCRA 240, 264.
[20]
[21]
G.R. No. 161656, June 29, 2005, 462 SCRA 265, 288.
[22]
Supra note 10, at 648; citing Slattery Co. v. U.S., CA 5 La 231 F2d 37.
[23]
Id. at 647; citing Panhandle E. Pipe Line Co. v. State Highway Com., 294 U.S. 613.
[24]
Supra note 14; G.R. No. L-106528, December 21, 1993, 228 SCRA 668; G.R. No. L-56948, September 30, 1987,
154 SCRA 461; G.R. No. 103125, May 11, 1993, 222 SCRA 173; G.R. No. 106440, January 29, 1996, 252 SCRA
412; respectively.
[25]
[26]
TSN, December 15, 1986, pp. 4-10.
[27]
Supra note 16.
[28]
Cited in J. Bernas, S.J., THE 1987 CONSTITUTION OF THE REPUBLIC OF THE PHILIPPINES, A
COMMENTARY 390 (2003).
[29]
Supra note 10, at 680; citing Hartman v. Tresise, 36 Colo 146, 84 P 685.
SUPREME COURT
Manila

SECOND DIVISION

BARANGAY SINDALAN, SAN G.R. No. 150640
FERNANDO, PAMPANGA,
rep. by BARANGAY CAPTAIN
ISMAEL GUTIERREZ, Present:
Petitioner,
CARPIO,
TINGA, and
VELASCO, JR., JJ.
COURT OF APPEALS, JOSE
MAGTOTO III, and PATRICIA Promulgated:
SINDAYAN,
Respondents. March 22, 2007

x-----------------------------------------------------------------------------------------x

DECISION

VELASCO, JR., J.:

Expropriation, if misused or abused, would trench on the property rights of
individuals without due process of law.

The Case

For review before the Court in a petition for certiorari under Rule 45 are the
May 30, 2001 Decision[1] and October 26, 2001 Resolution[2] of the Court of
Appeals (CA), reversing and setting aside the August 2, 1990 Order [3] of the San
Fernando, Pampanga Regional Trial Court (RTC), Branch 43. The CA Resolution
denied petitioners Motion for Reconsideration of the May 30, 2001 Decision and in
effect, the appellate court dismissed petitioners Complaint for eminent domain.
The Facts
On April 8, 1983, pursuant to a resolution passed by the barangay council,
petitioner Barangay Sindalan, San Fernando, Pampanga, represented
by Barangay Captain Ismael Gutierrez, filed a Complaint for eminent domain
against respondents spouses Jose Magtoto III and Patricia Sindayan, the registered
owners of a parcel of land covered by Transfer Certificate of Title No. 117674-
R. The Complaint was docketed as Civil Case No. 6756 and raffled to the San
Fernando, Pampanga RTC, Branch 43. Petitioner sought to convert a portion of
respondents land into Barangay Sindalans feeder road. The alleged public purposes
sought to be served by the expropriation were stated in BarangayResolution No. 6,
as follows:

WHEREAS, said parcels of land shall be used, when acquired, as a
barangay feeder road for the agricultural and other products of the residents,
and just as inlet for their basic needs;

WHEREAS, presently, residents have to take a long circuitous dirt road
before they can reach the concrete provincial road, entailing so much time,
effort and money, not to mention possible damage and/or spilage [sic] on
the products consigned to or coming from, the market outside the barangay;
and

WHEREAS, said lots, used as outlet or inlet road, shall contribute greatly to
the general welfare of the people residing therein social, cultural and health
among other things, beside economic.[4]

Petitioner claimed that respondents property was the most practical and
nearest way to the municipal road. Pending the resolution of the case at the trial
court, petitioner deposited an amount equivalent to the fair market value of the
property.[5]

On the other hand, respondents stated that they owned the 27,000- square
meter property, a portion of which is the subject of this case. In their
Memorandum,[6] they alleged that their lot is adjacent to Davsan II Subdivision
privately owned by Dr. Felix David and his wife. Prior to the filing of the
expropriation case, said subdivision was linked to MacArthur Highway through a
pathway across the land of a certain Torres family. Long before the passage of
the barangay resolution, the wives of the subdivision owner and
the barangay captain, who were known to be agents of the subdivision, had
proposed buying a right-of-way for the subdivision across a portion of respondents
property. These prospective buyers, however, never returned after learning of the
price which the respondents ascribed to their property.

Respondents alleged that the expropriation of their property was for private
use, that is, for the benefit of the homeowners of Davsan II Subdivision. They
contended that petitioner deliberately omitted the name of Davsan II Subdivision
and, instead, stated that the expropriation was for the benefit of the residents
of Sitio Paraiso in order to conceal the fact that the access road being proposed to
be built across the respondents land was to serve a privately owned subdivision and
those who would purchase the lots of said subdivision. They also pointed out that
under Presidential Decree No. (PD) 957, it is the subdivision owner who is obliged
to provide a feeder road to the subdivision residents.[7]

After trial, the court a quo ruled, thus:
WHEREFORE, in view of all the foregoing premises duly considered,
the herein plaintiff is hereby declared as having a lawful right to take the
property hereinabove described and sought to be condemned for the public
purpose or use as aforestated, upon payment of just compensation to be
determined as of the date of the filing of the Complaint in this [sic]
expropriation proceedings.

Upon the entry of this Order of Condemnation, let three (3) competent and
disinterested persons be appointed as Commissioners to ascertain and report
to the Court the just compensation for the property condemned.[8]


Upon respondents appeal, the CA held:

We are convinced that it is the duty of the subdivision owner to provide the
right of way needed by residents of Davsan II Subdivision as provided for
in Section 29 of P.D. 957. Records show that Purok Paraiso, which is
supposed to benefit from this [sic] expropriation proceedings is in reality
Davsan II Subdivision as per the testimony of Ruben Palo, plaintiffs own
witness (TSN, p. 12, December 115, 1986) [sic]. Appellants correctly stated
that:

The act of Bo. Sindalan, San Fernando, Pampanga, in effect
relieved the owners of Davsan II Subdivision of spending their
own private funds for acquiring a right of way and constructing the
required access road to the subdivision. It spent public funds for
such private purpose and deprived herein defendants-appellants of
their property for an ostensible public purpose x x x.

xxxx

WHEREFORE, premises considered, the appealed Decision is
hereby REVERSED and SET ASIDE and the Complaint for Eminent
Domain is DISMISSED for lack of merit.

SO ORDERED.[9]

The Issues

Petitioner imputes errors to the CA for (1) allegedly violating its power of
eminent domain, (2) finding that the expropriation of the property is not for public
use but for a privately owned subdivision, (3) finding that there was no payment of
just compensation, and (4) failing to accord respect to the findings of the trial
court. Stated briefly, the main issue in this case is whether the proposed exercise of
the power of eminent domain would be for a public purpose.
The Courts Ruling


In general, eminent domain is defined as the power of the nation or a sovereign
state to take, or to authorize the taking of, private property for a public use without
the owners consent, conditioned upon payment of just compensation.[10] It is
acknowledged as an inherent political right, founded on a common necessity and
interest of appropriating the property of individual members of the community to
the great necessities of the whole community.[11]
The exercise of the power of eminent domain is constrained by two constitutional

provisions: (1) that private property shall not be taken for public use without just
compensation under Article III (Bill of Rights), Section 9 and (2) that no person
shall be deprived of his/her life, liberty, or property without due process of law
under Art. III, Sec. 1.

However, there is no precise meaning of public use and the term is susceptible of
myriad meanings depending on diverse situations. The limited meaning attached to
public use is use by the public or public employment, that a duty must devolve on
the person or corporation holding property appropriated by right of eminent
domain to furnish the public with the use intended, and that there must be a right
on the part of the public, or some portion of it, or some public or quasi-public
agency on behalf of the public, to use the property after it is condemned.[12] The
more generally accepted view sees public use as public advantage, convenience, or
benefit, and that anything which tends to enlarge the resources, increase the
industrial energies, and promote the productive power of any considerable number
of the inhabitants of a section of the state, or which leads to the growth of towns
and the creation of new resources for the employment of capital and labor, [which]
contributes to the general welfare and the prosperity of the whole community. [13] In
this jurisdiction, public use is defined as whatever is beneficially employed for the
community.[14]

It is settled that the public nature of the prospective exercise of expropriation
cannot depend on the numerical count of those to be served or the smallness or
largeness of the community to be benefited.[15] The number of people is not
determinative of whether or not it constitutes public use, provided the use is
exercisable in common and is not limited to particular individuals.[16] Thus, the first
essential requirement for a valid exercise of eminent domain is for the expropriator
to prove that the expropriation is for a public use. In Municipality of Bian v.
Garcia, this Court explicated that expropriation ends with an order of
condemnation declaring that the plaintiff has a lawful right to take the property
sought to be condemned, for the public use or purpose described in the
complaint, upon the payment of just compensation.[17]

Another vital requisite for a valid condemnation is the payment of just
compensation to the property owner. In the recent case of APO Fruits Corporation
v. The Honorable Court of Appeals,[18] just compensation has been defined as the
full and fair equivalent of the property taken from its owner by the expropriator,
and that the gauge for computation is not the takers gain but the owners loss. In
order for the payment to be just, it must be real, substantial, full, and ample. Not
only must the payment be fair and correctly determined, but also, the Court
in Estate of Salud Jimenez v. Philippine Export Processing Zone stressed that the
payment should be made within a reasonable time from the taking of the property.
[19]
It succinctly explained that without prompt payment, compensation cannot be
considered just inasmuch as the property owner is being made to suffer the
consequences of being immediately deprived of the land while being made to wait
for a decade or more before actually receiving the amount necessary to cope with
the loss.Thus, once just compensation is finally determined, the expropriator must
immediately pay the amount to the lot owner. In Reyes v. National Housing
Authority, it was ruled that 12% interest per annum shall be imposed on the final
compensation until paid.[20] Thus, any further delay in the payment will result in the
imposition of 12% interest per annum. However, in the recent case of Republic v.
Lim, the Court enunciated the rule that where the government failed to pay just
compensation within five (5) years from the finality of the judgment in the
expropriation proceedings, the owners concerned shall have the right to recover
possession of their property.[21]

Since the individual stands to lose the property by compulsion of the law, the
expropriation authority should not further prejudice the owners rights by delaying
payment of just compensation. To obviate any possibility of delay in the payment,
the expropriator should already make available, at the time of the filing of the
expropriation complaint, the amount equal to the BIR zonal valuation or the fair
market value of the property per tax declaration whichever is higher.

The delayed payment of just compensation in numerous cases results from lack of
funds or the time spent in the determination of the legality of the expropriation
and/or the fair valuation of the property, and could result in dismay,
disappointment, bitterness, and even rancor on the part of the lot owners. It is not
uncommon for the expropriator to take possession of the condemned property upon
deposit of a small amount equal to the assessed value of the land per tax
declaration and then challenge the valuation fixed by the trial court resulting in an
expropriate now, pay later situation. In the event the expropriating agency
questions the reasonability of the compensation fixed by the trial court before the
appellate court, then the latter may, upon motion, use its sound discretion to order
the payment to the lot owner of the amount equal to the valuation of the property,
as proposed by the condemnor during the proceedings before the commissioners
under Sec. 6, Rule 67 of the Rules of Court, subject to the final valuation of the
land. This way, the damage and prejudice to the property owner would be
considerably pared down.
On due process, it is likewise basic under the Constitution that the property owner
must be afforded a reasonable opportunity to be heard on the issues of public use
and just compensation and to present objections to and claims on them.[22] It is
settled that taking of property for a private use or without just compensation is a
deprivation of property without due process of law.[23] Moreover, it has to be
emphasized that taking of private property without filing any complaint before a
court of law under Rule 67 of the Rules of Court or existing laws is patently
felonious, confiscatory, and unconstitutional. Judicial notice can be taken of some
instances wherein some government agencies or corporations peremptorily took
possession of private properties and usurped the owners real rights for their
immediate use without first instituting the required court action. Running
roughshod over the property rights of individuals is a clear and gross breach of the
constitutional guarantee of due process, which should not be countenanced in a
society where the rule of law holds sway.

In the case at bar, petitioner harps on eminent domain as an inherent power
of sovereignty similar to police power and taxation. As a basic political unit,
its SangguniangBarangay is clothed with the authority to provide barangay roads
and other facilities for public use and welfare. Petitioner relied on the following
cases which held a liberal view of the term public use in recognition of the
evolving concept of the power of eminent domain: Sea v. Manila Railroad
Co.; Philippine Columbian Association v. Panis; Sumulong v. Guerrero; Province
of Camarines Sur v. Court of Appeals; and Manosca v. Court of Appeals.[24]

Petitioners delegated power to expropriate is not at issue. The legal question
in this petition, however, is whether the taking of the land was for a public purpose
or use. In the exercise of the power of eminent domain, it is basic that the taking of
private property must be for a public purpose. A corollary issue is whether private
property can be taken by law from one person and given to another in the guise of
public purpose.

In this regard, the petition must fail.

Petitioner alleges that there are at least 80 houses in the place and about 400
persons will be benefited with the use of a barangay road. The trial court believed
that the expropriation will not benefit only the residents of the subdivision, but also
the residents of Sitio or Purok Paraiso and the residents of the entire Barangay of
Sindalan x x x.[25]The trial court held that the subdivision is covered
by Sitio or Purok Paraiso which is a part or parcel of Barangay Sindalan. However,
this finding was not supported by evidence.On the contrary, it is Sitio Paraiso
which is within Davsan II Subdivision based on the testimony of petitioners own
witness, Ruben Palo, as follows:
Atty. Mangiliman: Mr. Palo, you said that you have been residing at Sitio
Paraiso since 1973, is this Sitio Paraiso within the Davson [sic]
Subdivision?

Witness: Yes, sir.

xxxx

Atty. Mangiliman: And before you purchased that or at the time you
purchased it in 1972, I am referring to the lot where you are now
residing, the Davson [sic] Subdivision did not provide for a road
linking from the subdivision to the barrio road, am I correct?

Witness: None, sir.

Atty. Mangiliman: And despite [sic] of that you purchased a lot inside
Davson [sic] Subdivision?

Witness: Yes, sir.

Atty. Mangiliman: Did you not demand from the developer of Davson [sic]
Subdivision that he should provide a road linking from the
subdivision to the barrio road of Sindalan?

Witness: No, sir, because I know they will provide for the road.

Atty. Mangiliman: And when you said that they will provide for that road,
you mean to tell us that it is the developer of Davson [sic]
Subdivision who will provide a road linking from the subdivision to
the barrio road of Sindalan?

Witness: Yes, sir.

Atty. Mangiliman: Now, Mr. Witness, you will agree with me that the
proposed road which will connect from Davson [sic] Subdivision to
the barrio road of Sindalan would benefit mainly the lot buyers and
home owners of Davson [sic] Subdivision?

Witness: Yes, sir.

Atty. Mangiliman: And you also agree with me that there is no portion of
Davson [sic] Subdivision which is devoted to the production of
agricultural products?

Witness: None, sir.

Atty. Mangiliman: When the road which is the subject of this case and
sought to be expropriated has not yet been opened and before a Writ
of Possession was issued by the Court to place the plaintiff in this
case in possession, the residents of Davson [sic] Subdivision have
other way in going to the barrio road?

Witness: None, sir.

Atty. Mangiliman: In that case Mr. Witness, how do you negotiate or go out
of the subdivision in going to the barrio?

Witness: We passed to the lot own [sic] by Mr. Torres which is near the
subdivision in going to the barrio road, sir.

Atty. Mangiliman: Did you not complain to the owner/developer of the
subdivision that he should provide for a road linking to [sic] his
subdivision to the barrio road because there is no available exit from
the said subdivision to the barrio road?

Witness: We have been telling that and he was promising that there will be
a road, sir.[26]

Firstly, based on the foregoing transcript, the intended feeder road sought to
serve the residents of the subdivision only. It has not been shown that the other
residents of Barangay Sindalan, San Fernando, Pampanga will be benefited by the
contemplated road to be constructed on the lot of respondents spouses Jose
Magtoto III and Patricia Sindayan. While the number of people who use or can use
the property is not determinative of whether or not it constitutes public use or
purpose, the factual milieu of the case reveals that the intended use of respondents
lot is confined solely to the Davsan II Subdivision residents and is not exercisable
in common.[27] Worse, the expropriation will actually benefit the subdivisions
owner who will be able to circumvent his commitment to provide road access to
the subdivision in conjunction with his development permit and license to sell from
the Housing and Land Use Regulatory Board, and also be relieved of spending his
own funds for a right-of-way. In this factual setting, the Davsan II Subdivision
homeowners are able to go to the barrio road by passing through the lot of a certain
Torres family. Thus, the inescapable conclusion is that the expropriation of
respondents lot is for the actual benefit of the Davsan II Subdivision owner, with
incidental benefit to the subdivision homeowners.

The intended expropriation of private property for the benefit of a private
individual is clearly proscribed by the Constitution, declaring that it should be for
public use or purpose. In Charles River Bridge v. Warren, the limitation on
expropriation was underscored, hence:

Although the sovereign power in free government may appropriate all
property, public as well as private, for public purposes, making
compensation therefore; yet it has never been understood, at least never
in our republic, that the sovereign power can take the private property
of A and give it to B by the right of eminent domain; or that it can take it
at all, except for public purposes; or that it can take it for public purposes,
without the duty and responsibility of ordering compensation for the
sacrifice of the private property of one, for the good of the whole (11 Pet. at
642) (emphasis supplied).[28]

US case law also points out that a member of the public cannot acquire a
certain private easement by means of expropriation for being unconstitutional,
because even if every member of the public should acquire the easement, it would
remain a bundle of private easements.[29]

Secondly, a compelling reason for the rejection of the expropriation is
expressed in Section 29, PD 957, which provides:

Sec. 29. Right of Way to Public Road.The owner or developer of a
subdivision without access to any existing public road or street must secure
a right of way to a public road or street and such right of way must be
developed and maintained according to the requirement of the government
authorities concerned.

Considering that the residents who need a feeder road are all subdivision lot
owners, it is the obligation of the Davsan II Subdivision owner to acquire a right-
of-way for them. However, the failure of the subdivision owner to provide an
access road does not shift the burden to petitioner. To deprive respondents of their
property instead of compelling the subdivision owner to comply with his obligation
under the law is an abuse of the power of eminent domain and is patently
illegal. Without doubt, expropriation cannot be justified on the basis of an unlawful
purpose.

Thirdly, public funds can be used only for a public purpose. In this proposed
condemnation, government funds would be employed for the benefit of a private
individual without any legal mooring. In criminal law, this would constitute
malversation.

Lastly, the facts tend to show that the petitioners proper remedy is to require
the Davsan II Subdivision owner to file a complaint for establishment of the
easement of right-of-way under Articles 649 to 656 of the Civil Code. Respondents
must be granted the opportunity to show that their lot is not a servient
estate. Plainly, petitioners resort to expropriation is an improper cause of action.

One last word: the power of eminent domain can only be exercised for
public use and with just compensation. Taking an individuals private property is a
deprivation which can only be justified by a higher goodwhich is public useand can
only be counterbalanced by just compensation. Without these safeguards, the
taking of property would not only be unlawful, immoral, and null and void, but
would also constitute a gross and condemnable transgression of an individuals
basic right to property as well.

For this reason, courts should be more vigilant in protecting the rights of the
property owner and must perform a more thorough and diligent scrutiny of the
alleged public purpose behind the expropriation. Extreme caution is called for in
resolving complaints for condemnation, such that when a serious doubt arises
regarding the supposed public use of property, the doubt should be resolved in
favor of the property owner and against the State.
WHEREFORE, we AFFIRM the May 30, 2001 Decision and the October
26, 2001 Resolution of the CA, with costs against petitioner.

SO ORDERED.

Associate Justice

WE CONCUR:

Associate Justice
Chairperson


DANTE O. TINGA
Associate Justice

ATTESTATION


Associate Justice
Chairperson

CERTIFICATION


REYNATO S. PUNO
Chief Justice

[1]
Rollo, pp. 27-36. The Decision was penned by Associate Justice Ramon A. Barcelona and concurred in by
Associate Justices Rodrigo V. Cosico and Alicia L. Santos.
[2]
Id. at 44-45.
[3]
Id. at 52-67.
[4]
Id. at 58.
[5]
Id. at 52.
[6]
Id. at 302-310.
[7]
Regulating the Sale of Subdivision Lots and Condominiums, Providing Penalties for Violations Thereof (1976),
Sec. 29.
[8]
[9]
Rollo, pp. 33-36.
[10]
26 Am Jur 2d 638; citing Re Ohio Turnpike Can. 164 Ohio St 377, 58 Ohio Ops 179, 131 NE2d 397.
[11]
Id.; citing Bloodgood v. Mohawk & H.R. Co., 18 Wend. (NY).
[12]
Id.; citing Cloth v. Chicago, R.I., & P.R. Co., 97 Ark 86, 132 SW 1005.
[13]
Id. at 673; citing Strikley v. Highland Bay Gold Min. Co., 200 US 527.
[14]
Sea v. Manila Railroad Co., 42 Phil. 102, 105 (1921).
[15]
Supra note 10, at 679; citing Charlotte v. Heath, 226 NC 750, 40 SE 2d 600, 169 ACR 569.
[16]
Id. at 680; citing Cox v. Revelle, 123 MD 579, 94 A 203.
[17]
G.R. No. 69260, December 22, 1989, 180 SCRA 576, 583-584.
[18]
G.R. No. 164195, February 6, 2007.
[19]
[20]
[21]
G.R. No. 161656, June 29, 2005, 462 SCRA 265, 288.
[22]
Supra note 10, at 648; citing Slattery Co. v. U.S., CA 5 La 231 F2d 37.
[23]
Id. at 647; citing Panhandle E. Pipe Line Co. v. State Highway Com., 294 U.S. 613.
[24]
Supra note 14; G.R. No. L-106528, December 21, 1993, 228 SCRA 668; G.R. No. L-56948, September 30, 1987,
154 SCRA 461; G.R. No. 103125, May 11, 1993, 222 SCRA 173; G.R. No. 106440, January 29, 1996, 252 SCRA
412; respectively.
[25]
[26]
TSN, December 15, 1986, pp. 4-10.
[27]
Supra note 16.
[28]
Cited in J. Bernas, S.J., THE 1987 CONSTITUTION OF THE REPUBLIC OF THE PHILIPPINES, A
COMMENTARY 390 (2003).
[29]
Supra note 10, at 680; citing Hartman v. Tresise, 36 Colo 146, 84 P 685.

SECOND DIVISION

Petitioner,

Present:

- versus-
QUISUMBING, J.,
Chairperson,
CARPIO MORALES,
TINGA,
PUREFOODS CORPORATION, VELASCO, JR., and
SOLID DEVELOPMENT BRION, JJ.
CORPORATION, JOSE ORTEGA,
JR., SILVESTRE BAUTISTA,
ALFREDO CABANDE, HEIRS OF Promulgated:
VICTOR TRINIDAD, and MOLDEX
REALTY INCORPORATED,
Respondents. September 12, 2008

x ----------------------------------------------------------------------------------- x

DECISION

TINGA, J.:

This is a petition for review on certiorari[1] under Rule 45 of the 1997 Rules of
Civil Procedure assailing the Decision[2] dated 07 November 2003 of the Court of
Appeals in CA-G.R. CV No. 73460 which affirmed with modification the
Decision[3] dated 17 September 2001 of the Regional Trial Court (RTC)
of Malolos, Bulacan, Branch 18 in Civil Case No. 915-M-97 for eminent domain.

The following factual antecedents are undisputed and are matters of record.

Petitioner National Power Corporation (NAPOCOR) is a government-owned and
controlled corporation created by virtue of Republic Act (R.A.) No. 6395,[4] as
amended, for the purpose of undertaking the development of hydroelectric power
generation, the production of electricity from nuclear, geothermal and other
sources, and the transmission of electric power on a nationwide basis. It is also
empowered to acquire property incident to or necessary, convenient or proper to
carry out the purposes for which it was created,[5]enter private property in the
lawful performance of its business purposes provided that the owners of such
private property shall be indemnified for any damage that may be caused thereby,
and exercise the right of eminent domain.

To construct and maintain its Northwestern Luzon Project, or particularly
the the San Jose-San Manuel 500 KV Transmission Line Project, NAPOCOR had
to acquire an easement of right-of-way over certain parcels of land situated in the
towns of Angat, San Rafael and San Ildefonso and in the city of San Jose
del Monte―all in the province of Bulacan.

On 5 November 1997, NAPOCOR filed a special civil action for eminent
domain[6] before the RTC of Malolos, Bulacan. Named defendants were the
vendors and vendees of the affected parcels of land, namely, Arcadio T.
Cruz, Calixto Cruz, Deogracias C. Mendoza, Hacienda Sapang Palay, and herein
respondents Purefoods Corporation (Purefoods), Solid Development Corporation
(SDC), Jose Ortega, Jr., Silvestre Bautista, Alfredo Cabande, the Heirs of Victor
Trinidad (Heirs of Trinidad) and Moldex Realty Incorporated (Moldex).

The complaint alleged that the defendants were either the registered owners
or the claimants of the affected pieces of property described as follows:

Owner/ Lot/ Tax Title Total Area Assessed Classifi-cation
Claimant Blk. Dec. No. Area Affecte Value Of Land
No. No. In Sq. d P
M. In Sq.
M.
1. Arcadio 2965 95- RT- 246,061 11,083 P3,324.9 Cogon land
T. Cruz/ Purefoods Corp. 01010 73- 0
- 15217
01090
2. Calixto Cruz/ 1948 97- T-278- 27,981 4,161 14,979.6 Poultry/
Purefoods Corp. 01010 287 0 Piggery/
- (M) Livestock Site
00153
3. Deogracias C. 1258 94- - 18,992 3,387.5 7,398.31 Agri-cultural
Mendoza/ Moldex Realty Corp. 21011 0
-
02796
4. 1255 96- - 1,450,81 25,170 77,669.1 Agri-cultural
Hacienda SapangPalay/Moldex Rea 21017 0 2
lty Corporation -
00134
5. Solid Devt. Corp. rep. by 1889 93- CLOA 21,743 6,871 8,039.00 Riceland
Domingo P. Gaw 020- -T-
00171 2322
6. Jose Ortega, Jr. 2186 00027 T- 12,060 2,471 4,293.27 Riceland/
-C 50926 Pasture
7. Silvestre Bautista/ 1981 93- - 7,785 5,927 6,934.70 Agri-cultural
AlfredoCabande rep. -B 020-
by TemestoclesCabande, Jr. 00564
8. Heirs of Lucia Vda. de Trinidad/ 1981 93- CLOA 13,200 3,356 3,926.52 Agri-cultural
Alfredo Cabanderep. -A 020- -T-
by TemestoclesCabande, Jr. 00563 6359

[Total] 62,426.50 sq. m. P126,565.42[7]

The complaint also alleged the public purpose of the Northwestern Luzon
Project, as well as the urgency and necessity of acquiring easements of right-of-
way over the said parcels of land consisting of 62,426.50 square meters. It also
averred that the affected properties had not been expropriated for public use and
were selected by NAPOCOR in a manner compatible with the greatest public good
and the least private injury and that the negotiations between NAPOCOR and the
defendants had failed.[8] The complaint prayed, among others, that the RTC issue a
writ of possession in favor of NAPOCOR in the event that it would be refused
entry to the affected properties.[9]

Among the several defendants, only herein respondents Heirs of Trinidad,
[10]
SDC,[11] Moldex[12] and Purefoods[13] filed their respective answers.

For their part, respondent Heirs of Trinidad claimed that they should be
indemnified for the value of the affected property based on the prevailing market
purchase price of P750.00/sq m and that co-defendant Alfredo Cabande, not being
the owner of any of the affected properties, should not be compensated. They
added that there are other parcels of land within the area which are more suitable
for NAPOCORs project.

Respondent Moldex, for its part, alleged that the expropriation of part of the
landholding in which it has a propriety interest would divest the peripheral area of
its value and render the same totally useless; thus, it should be compensated for the
loss of the peripheral area as well.[14]

In praying for the dismissal of the complaint, respondent SDC averred that
the taking would not serve any public purpose and that the selection of its property
for expropriation would not be compatible with the greatest public good and the
least private injury.[15]

Respondent Purefoods similarly prayed for the dismissal of the complaint on
the ground of the failure of NAPOCOR to append copies of the
pertinent Torrens titles to the complaint. It also averred that co-
defendants Arcadio and Calixto Cruz had no rights or interests in the affected
properties as they both had already sold the properties to it. As to the amount of
just compensation, it averred that NAPOCORs offer was excessively low,
undervalued and obsolete and that its action had caused extreme prejudice to its
investment and further delay in the construction and development of its piggery
business, thereby adversely affecting its operation.[16]

Meanwhile, NAPOCOR filed its Urgent Ex Parte Motion for the Issuance of
Writ of Possession[17] on 19 December 1997 wherein it alleged that it had deposited
with the Land Bank of the Philippines, NPC Branch, Diliman, Quezon City the
amount of P126,565.42 as provisional valuation of the properties sought to be
expropriated and that it had sent a Notice to Take Possession[18] of said properties.
On 06 January 1998, the RTC directed the clerk of court to issue a writ of
possession.[19]

After the pre-trial conference, the RTC issued an Order[20] dated 14 June
1999, reflecting the parties agreement to limit the issues to the amount of just
compensation and to whether respondent Moldex was entitled to just compensation
on the devaluation of the peripheral area within its property.

When the first set of appointed commissioners failed to discharge their
duties, the RTC appointed a second set of commissioners namely, Ret.
General Juanito Malto, Atty. Emmanuel Ortega and Atty. Antonio
V. Magdasocwho took their oaths of office and forthwith conducted a hearing.
[21]
On 18 May 2001, the commissioners submitted separate reports to the RTC
which formed part of the case records.[22] In the main, the commissioners
recommended that the compensation due from NAPOCOR be based on the fair
market value of P600.00/sq m for properties belonging to
respondent Moldex and P400.00/sq m for the undeveloped or underdeveloped
properties belonging to the rest of the respondents.[23] The case was then submitted
for decision.[24]

On 17 September 2001, the RTC rendered a Decision,[25] the dispositive
portion of which reads:

WHEREFORE, in view of the foregoing premises, Judgment is hereby rendered
as follows:

1. Ordering the expropriation of:

a. 3,305 square meters portion of 18,992 square meters of land of Lot 1258-
A, situated in San Jose del Monte, Bulacan, described and covered by Tax
Declaration No. 94-21011-02796 issued by then Municipal Assessor of
San Jose del Monte, Bulacan, owned by/registered in the name of
MOLDEX REALTY INCORPORATED;

b. 24,180 square meters portion of 1,450,810 square meters of land (Lot 2A-
1, formerly Lot 1255), situated in San Jose del Monte, Bulacan, described
in and covered by Tax Declaration No. 96-21017-00134 by then
Municipal Assessor of San Jose del Monte, Bulacan, owned by/registered
in the name of MOLDEX REALTY INCORPORATED;

c. 11,083 square meters portion of 246,061 square meters of land
(Lot 2965), situated in Angat, Bulacan, described in and covered by TCT
No. RT-73-15217 (T-274516-M) issued by the Register of Deeds
of Bulacan, owned by/registered in the name of PUREFOODS
CORPORATION;

d. 4,161 square meters portion of 27,981 square meters of land (Lot 1948),
situated in Angat, Bulacan described in and covered by TCT No. T-
278287 (M) issued by the Register of Deeds of Bulacan, owned
by/registered in the name of PUREFOODS CORPORATION;

e. 6,871 square meters portion of 27,743 square meters of land (Lot 1889),
situated in San Idelfonso, Bulacan, described in and covered by CLOA T-
2322, issued by the Register of Deeds of Bulacan, owned by/registered in
the name of SOLID DEVELOPMENT CORPORATION;

f. 2,471 square meters portion of 12,060 square meters of land (Lot 2186-
C), situated in San Rafael, Bulacan, described in and covered by TCT No.
T-50926, issued by the Register of Deeds of Bulacan, owned by/registered
in the name of Jose Ortega, Jr.;

g. 5,927 square meters portion of 7,785 square meters of land (Lot 1981-B),
situated in San Idelfonso, Bulacan, described in and covered by Tax
Declaration No. 93-020-00564, issued by the Municipal Assessor of
San Ildefonso, Bulacan, owned by/registered in/claimed by Silvestre
Bautista/Alfredo Cabande;

h. 3,356 square meters portion of 13,200 square meters of land (Lot 1981-
A), situated in San Ildefonso, Bulacan, described in and covered by CLOA
T-6359, issued by the Register of Deeds of Bulacan, owned by/registered
in/claimed by the Heirs of Victor Trinidad/Alfredo Cabande,

all in favor of plaintiff NATIONAL POWER CORPORATION and against
above-named defendants, for the public use or purpose described in the Complaint
and in this Decision;

2. fixing the amount of Six Hundred Pesos (P600.00) per square meter for 27,485
square meters of land of MOLDEX REALTY INCORPORATED as just
compensation and fixing the amount of Four Hundred Pesos (P400.00) per square
meter for 15,244 square meters of land of PUREFOODS CORPORATION, 6,871
square meters of land of SOLID DEVELOPMENT CORPORATION, 2,471
square meters of land of JOSE ORTEGA, JR., 5,927 square meters of land of
SILVESTRE BAUTISTA/ALFREDO CABANDE and 3,356 square meters of
land of the HEIRS OF VICTOR TRINIDAD/ALFREDO CABANDE, as just
compensation, to be paid by plaintiff NATIONAL POWER CORPORATION to
said defendants/claimants or their representatives, deducting therefrom any
unpaid and overdue real estate taxes due to the Government;

3. ordering payment of said just compensation by plaintiff NATIONAL POWER
CORPORATION to named defendants or the latters representatives with legal
interest at 6% per annum from January 6, 1998 until finality of this Decision and
at 12% per annum from its finality until full payment thereof.

Let each copy of this DECISION be furnished to and recorded in the Office of the
Register of Deeds of Bulacan, Municipal Assessor of Angat, Bulacan, City
Assessor of City of San Jose del Monte, Bulacan, Municipal Assessor of
San Ildefonso, Bulacan and Municipal Assessor of San Rafael, Bulacan.

No costs is hereby ordered since plaintiff NATIONAL POWER CORPORATION
is, under its Charter, exempt from payment of costs of the proceedings.

SO ORDERED.[26]

Respondent Moldex sought reconsideration of the aforesaid decision[27] but the
same was denied by the RTC in its Order[28] dated 07 December 2001. Both
NAPOCOR and respondent Moldex filed separate appeals before the Court of
Appeals.

Respondent Moldex argued that the RTC erred in the following instances:
(1) in ruling that just compensation should be paid at P600.00/sq m and
not P1,600.00/sq m; (2) in not imposing an interest of 12% per annum reckoned
from the taking until the finality of the decision; and (3) in not ordering the
payment of just compensation for the peripheral portion of the affected property.

For its part, NAPOCOR assailed the RTCs valuations of the properties
at P600.00/sq m and P400.00/sq m, contending that the same are not based on the
value of the properties at the time of taking when the properties were still
agricultural in nature. It claimed that only an easement fee, which should not
exceed 10% of the declared market value, should be paid to respondents. It also
questioned the award of interest of 12% per annum from the finality of the decision
until the full payment of the amount adjudged.

On 7 November 2003, the Court of Appeals rendered the assailed decision,
affirming the RTC decision in all respects except for the period during which the
interest of 12% per annum would accrue.[29]

Only respondent Moldex sought reconsideration of the 07 November
2003 Decision of the Court of Appeals.[30]

NAPOCOR, through the Office of the Solicitor General (OSG), elevated the
case to this Court via a petition for review on certiorari.
[31]
Respondent Moldex nonetheless filed a comment on the petition, stating that its
motion for reconsideration of the 7 November 2003 Decision of the Court of
Appeals was still pending and that hence taking
cognizance of the petition would be premature.[32] Respondents Heirs of Trinidad,
[33]

Purefoods[34] and SDC[35] likewise filed separate comments
on NAPOCORs petition.

However, on 12 April 2004, NAPOCOR filed an Omnibus Motion To
Withdraw Petition For Review On Certiorari And To Remand The Case To
The Court Of Appeals,[36] informing the Court of the compromise agreement forged
on 19 March 2004 between NAPOCOR and respondent Moldex. NAPOCOR
subsequently filed a Manifestation and Motion,[37] praying that the case be
remanded to the Court of Appeals for proper disposition only insofar as
respondent Moldex is concerned. Attached to the said pleading is a copy of the
compromise agreement[38] dated 19 March 2004 and a copy of NAPOCOR Board
Resolution No. 2003-13,[39] evincing that the proposed compromise settlement
submitted by respondent Moldex has been duly approved.

In a Resolution[40] dated 2 June 2004, the Court resolved to defer action
on NAPOCORs omnibus motion and instead require respondent Moldex to
comment thereon. On 7 July 2004, respondent Moldex filed a Comment,
[41]
confirming the existence of the compromise agreement and manifesting its
conformity with the omnibus motion filed by the OSG. On 18 August 2004, the
Court issued a Resolution granting the withdrawal of the petition only as regards
respondent Moldex.[42]

In the instant petition, NAPOCOR is assailing the Court of Appeals reliance
on the commissioners report in fixing just compensation based on the full market
value of the affected properties. NAPOCOR contends that only an easement of
right-of-way for the construction of the transmission line project is being claimed,
thus, only an easement fee equivalent to 10% of the fair market value of the
properties should be paid to the affected property owners. NAPOCOR cites
Section 3A, R.A. 6395, as amended[43] and the implementing regulation of R.A.
No. 8974[44] in support of this argument.

Respondent Purefoods counters that the appellate courts determination of
just compensation is a factual finding, which may be reviewed by this Court only
when the case falls within the recognized exceptions to the prohibition against
factual review. Since the instant case does not fall under any of the exceptions, it
argues that the issue of just compensation may not be reviewed in
the instant proceeding.

On the other hand, there is a question of law when the issue does not call for
an examination of the probative value of the evidence presented, the truth or
falsehood of facts being admitted and the doubt concerns the correct application of
law and jurisprudence on the matter. On the other hand, there is a question of fact
when the doubt or controversy arises as to the truth or falsity of the alleged facts.
When there is no dispute as to fact, the question of whether or not the conclusion
drawn therefrom is correct is a question of law.[45] In the instant case, NAPOCOR
is raising a question of law, that is, whether or not only an easement fee of 10% of
the market value of the expropriated properties should be paid to the affected
owners. This issue does not call for the reevaluation of the probative value of the
evidence presented but rather the determination of whether the pertinent laws cited
by NAPOCOR in support of its argument are applicable to the instant case.

Now, to the core issue of just compensation.

The question of just compensation for an easement of right-of-way over a
parcel of land that will be traversed by NAPOCORs transmission lines has already
been answered in National Power Corporation v. Manubay Agro-Industrial
Development Corporation.[46] In that case, the Court held that because of the nature
of the easement, which will deprive the normal use of the land for an indefinite
period, just compensation must be based on the full market value of the affected
properties. The Court explained, thus:

Granting arguendo that what petitioner acquired over respondents
property was purely an easement of a right of way, still, we cannot sustain its
view that it should pay only an easement fee, and not the full value of the
property. The acquisition of such an easement falls within the purview of the
power of eminent domain. This conclusion finds support in similar cases in which
the Supreme Court sustained the award of just compensation for private property
condemned for public use. Republic v. PLDT held thus:

x x x. Normally, of course, the power of eminent domain results in the
taking or appropriation of title to, and possession of, the expropriated property;
but no cogent reason appears why the said power may not be availed of to
impose only a burden upon the owner of condemned property, without loss of
title and possession. It is unquestionable that real property may, through
expropriation, be subjected to an easement of right of way.

True, an easement of a right of way transmits no rights except the
easement itself, and respondent retains full ownership of the property. The
acquisition of such easement is, nevertheless, not gratis. As correctly observed by
the CA, considering the nature and the effect of the installation power lines, the
limitations on the use of the land for an indefinite period would deprive
respondent of normal use of the property. For this reason, the latter is entitled to
payment of a just compensation, which must be neither more nor less than the
monetary equivalent of the land.[47]

Also, in National Power Corporation v. Aguirre-Paderanga,[48] the Court
noted that the passage of NAPOCORs transmission lines over the affected property
causes not only actual damage but also restriction on the agricultural and economic
activity normally undertaken on the entire property. While NAPOCOR in that case
was seeking to acquire only an easement of right-of-way, the Court nonetheless
ruled that the just compensation in the amount of only 10% of the market value of
the property was not enough to indemnify the incursion on the affected property.

The Court explained therein that expropriation is not limited to the
acquisition of real property with a corresponding transfer of title or possession. The
right-of-way easement resulting in a restriction or limitation on property rights
over the land traversed by transmission lines, as in the present case, also falls
within the ambit of the term expropriation.[49] In eminent domain or expropriation
proceedings, the general rule is that the just compensation to which the owner of
the condemned property is entitled is the market value. Market value is that sum of
money which a person desirous but not compelled to buy, and an owner willing but
not compelled to sell, would agree on as a price to be given and received therefor.
The aforementioned rule, however, is modified where only a part of a certain
property is expropriated. In such a case the owner is not restricted to compensation
for the portion actually taken. In addition to the market value of the portion taken,
he is also entitled to recover the consequential damage, if any, to the remaining
part of the property. At the same time, from the total compensation must be
deducted the value of the consequential benefits.[50]

While Section 3(a) of R.A. No. 6395, as amended, and the implementing
rule of R.A. No. 8974 indeed state that only 10% of the market value of the
property is due to the owner of the property subject to an easement of right-of-way,
said rule is not binding on the Court. Well-settled is the rule that the determination
of just compensation in eminent domain cases is a judicial function.[51] In Export
Processing Zone Authority v. Dulay,[52] the Court held that any valuation for just
compensation laid down in the statutes may serve only as guiding principle or one
of the factors in determining just compensation but it may not substitute the courts
own judgment as to what amount should
be awarded and how to arrive at such amount.[53] The executive
department or the legislature may make the initial determinations but when a party
claims a violation of the guarantee in the Bill of Rights that private property may
not be taken for public use without just compensation, no statute, decree, or
executive order can mandate that its own determination shall prevail over the
courts findings. Much less can the courts be precluded from looking into the just-
ness of the decreed compensation.[54]

NAPOCOR argues that the Court of Appeals should not have adopted the
commissioners report hook, line and sinker because the same was based
exclusively on relative prices of adjoining lots without showing evidence on their
proximity and of the sales of similar classification.

The duty of the court in considering the commissioners report is to satisfy
itself that just compensation will be made to the defendant by its final judgment in
the matter, and to fulfill its duty in this respect, the court will be obliged to exercise
its discretion in dealing with the report as the particular circumstances of the case
may require. Rule 67, Section 8 of the 1997 Rules of Civil Procedure clearly shows
that the trial court has the discretion to act upon the commissioners report in any of
the following ways: (1) it may accept the same and render judgment therewith; or
(2) for cause shown, it may [a] recommit the report to the commissioners for
further report of facts; or [b] set aside the report and appoint new commissioners;
or [c] accept the report in part and reject it in part; and it may make such order or
render such judgment as shall secure to the plaintiff the property essential to the
exercise of his right of expropriation, and to the defendant just compensation for
the property so taken.[55]

In the instant case, the Court finds no reversible error in
the RTCs determination of just compensation even if the same was based on the
commissioners report, there being no showing that said report was tainted with
irregularity, fraud or bias. Noteworthy are the following observations made by the
Court of Appeals on the RTCs assessment of the commissioners report:

In the case at bar, the trial court based its determination of just
compensation on the reports and proceedings made by the Commissioners, by
adopting the findings of Commissioners Ortega and Magdasoc who made a Joint
Commissioners Report. The aforesaid report has also taken into consideration the
report made by the other Commissioner B/G Malto. In their joint report, the
commissioners recommended that the fair market value of the property subject of
the expropriation proceedings, owned by Moldex is P700.00 per square meter
while other properties at P400.00. In the separate report of Commissioner Malto,
at first it valued the subject properties at P700.00 per square meter and
subsequently, it made an amended report, taking into account the Discovery of the
Contracts to Sell during the year 1996 showing that the value of the property
of Moldex was P1,600 per square meter and another in the year 1999 that shows
that its value was P1,800 per square meter. x x x However, there was no evidence
that such lands subject of the aforesaid contracts to sell is sufficiently similar to
the properties subject of expropriation owned by appellant Moldex. x x x It cannot
be said that all properties in this area have the same market value nor do the
contracts to sell conclusive as to the fair market price of a parcel of land because
it may be above its fair market value. Appellant Moldex did not present evidence
showing that the lots subject of contracts to sell is similar to the lands subject of
expropriation. Thus, evidence presented by appellant Moldex cannot be a basis in
determining the real fair market value of the properties subject of
expropriation. x x x

x x x It should be observed in the report made by the Commissioners that
they made an ocular inspection of the area and they found that the property is
semi-cogonal and agricultural in character and that during their inspection they
noticed trace of old rice stalks that marked the surrounding [e]specially under the
transmission lines of the plaintiff-appellant NPC. Since the Commissioners are
disinterested persons who made the ocular inspection and report, their report is
entitled to great weight.

x x x It can be clearly deduced from the report of the Commissioners that
although the report was made in year 2001, they considered other facts which
were reflective of the value of the subject properties even before such
time. x x x they also considered the Deeds of Sale execute[d] in 1996 and they
also inquired with the Office of the Provincial Assessors to aid them in arriving at
the fair market value of the subject lands. x x x n the joint report of
Commissioners Ortega and Magdasoc, it was reflected that the value of the
property ranged from P500.00 to P1,000.00 if the property is developed and
improved and in the report of Commissioner Malto, from an appraisal
of Cuervo Appraisers, Inc. and Asian Appraisal Co. the developed lots in the area
could be valued at P525.00 to P700.00 per square meter. x x x Thus, from this
[sic] facts, it could be clearly shown that in recommending the valuation of the
subject properties, allowance was made taking into consideration the time of
taking of the property subject of expropriation and the filing of
complaint. x x x [56]

Based on the foregoing elucidation, the Court of Appeals affirmed
the RTCs finding of the value of just compensation based on the majority reports
valuation of P400.00 per square meter for the properties belonging to respondents
with the exception of respondent Moldex. Both the Court of Appeals and the RTC
were convinced that the commissioners recommendation was arrived at after a
judicious consideration of all factors. Absent any showing that said valuation is
exorbitant and unjustified, the same is binding on this Court.

WHEREFORE, the instant petition for review on certiorari is DENIED and
the Decision of the Court of Appeals in CA-G.R. CV No. 73460 is
AFFIRMED. Costs against petitioner.

SO ORDERED.

DANTE O. TINGA
Associate Justice

WE CONCUR:

Associate Justice
Chairperson


ARTURO D. BRION
Associate Justice

ATTESTATION

Courts Division.

Associate Justice

CERTIFICATION

Chairpersons Attestation, it is hereby certified that the conclusions in the
above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNO
Chief Justice

[1]
Rollo, pp. 8-36.

[2]
Penned by J. Mercedes Gozo-Dadole, Acting Chairman of the Special Fifth Division and concurred in by
JJ. Juan Q. Enriquez, Jr. and Rosmari D. Carandang.

[3]

[4]
ENTITLED, AN ACT REVISING THE CHARTER OF THE NATIONAL POWER CORPORATION;
effective 10 September 2001.

[5]
Republic Act No. 6395, Sec. 3(h).

[6]
Records, pp. 1-9.

[7]
Id. at 3-4.

[8]
Id. at 4-5.

[9]
Id. at 5-6.

[10]
Id. at 38-44.

[11]
Id. at 91-95.

[12]
Id. at 137-142.

[13]
Id. at 115-119.

[14]
Id. at 140.

[15]
Id. at 92-93.

[16]
Id. at 116-118.

[17]
Id. at 100-104.

[18]
Id. at 106.

[19]
Id. at 165.
[20]
Id. at 286.

[21]
Id. at 328-335.

[22]
Id. at 336-339.

[23]
Id. at 339.
[24]
Id. at 379.
[25]
Supra note 3.

[26]
Id. at 58-59.

[27]
[28]
Id. at 406.

[29]
Supra note 2.
[30]

[31]
Supra note 1.
[32]
Rollo, pp. 89-101.

[33]
Id. at 81-88.

[34]
Id. at 121-129.
[35]
Id. at 130-137.

[36]
Id. at 140-144.

[37]
Id. at 145-150.
[38]
Id. at 151-156.
[39]
Id. at 157-158.
[40]
Id. at 166-167.
[41]
Id. at 168-171.

[42]
Id. at 176.

[43]
Republic Act 6395, as amended by Presidential Decree No. 938, Section 3A provides: In acquiring
private property or private property rights through expropriation proceedings where the land or portion thereof will
be traversed by the transmission lines, only a right-of-way easement thereon shall be acquired when the principal
purpose for which such land is actually devoted will not be impaired, and where the land itself or portion thereof
will be needed for the projects or works, such land or portion thereof as necessary shall be acquired.
In determining the just compensation of the property or property sought to be acquired through
expropriation proceedings, the same shall
(a) With respect to the acquired land or portion thereof, not exceed the market value declared by
the owner or administrator or anyone having legal interest in the property, or such market value
as determined by the assessor, whichever is lower.
(b) With respect to the acquired right-of-way easement over the land or portion thereof, not to
exceed ten percent (10%) of the market value declared by the owner or administrator or anyone
having legal interest in the property, or such market value as determined by the assessor
whichever is lower.
improvement, as the case may be, shall be compensated for the improvements actually damaged by the construction
and maintenance of the transmission lines, in an amount not exceeding the market value thereof as declared by the
owner or administrator, or anyone having legal interest in the property, or such market value as determined by the
assessor whichever is lower; Provided, that in cases any buildings, houses and similar structures are affected by the
right-of-way for the transmission lines, their transfer, if feasible, shall be effected at the expense of the Corporation;
Provided, further, that such market value prevailing at the time the Corporation gives notice to the landowner or
administrator or anyone having legal interest in the property, to the effect that his land or portion thereof is needed
for its projects or works shall be used as basis to determine the just compensation therefore.
[44]
ENTITLED AN ACT TO FACILITATE THE ACQUISITION OF RIGHT-OF-WAY, SITE OR
LOCATION FOR NATIONAL GOVERNMENT INFRASTRUCTURE PROJECTS AND FOR OTHER
PURPOSES; effective 7 November 2000.

[45]
Gomez v. Sta. Ines, G.R. No. 132537, 14 October 2005, 473 SCRA 25, 37.

[46]
G.R. No. 150936, 18 August 2004, 437 SCRA 60.

[47]
Id. at 67-68.

[48]
G.R. No. 155065, 28 July 2005, 464 SCRA 481.

[49]
Id. at 493.

[50]
National Power Corporation v. Chiong, 452 Phil. 649, 663-664 (2003).

[51]
Land Bank of the Philippines v. Celada, G.R. No.164876, 23 January 2006.

[52]
G.R. No. L-59603, 29 April 1987, 149 SCRA 305.

[53]
Id. at 314.

[54]
Id. at 316.

[55]
National Power Corporation v. Chiong, 452 Phil. 649, 660 (2003).

[56]
Citations omitted.

Supreme Court
Baguio City

SECOND DIVISION
NATIONAL POWER CORPORATION, G. R. No. 189127
Petitioner,
Present:

- versus - BRION,
PEREZ,
SERENO, and
REYES, JJ.
SPOUSES BERNARDO AND
MINDALUZ SALUDARES, Promulgated:
Respondents.
April 25, 2012
x--------------------------------------------------x
DECISION
SERENO, J.:

This Rule 45 Petition questions the 21 July 2009 Decision of the Court of
Appeals (CA),[1] which affirmed the 10 September 2002 Decision of the Regional
Trial Court (RTC),[2] Branch 31, Tagum City. The RTC had ruled that respondent
spouses are entitled to ₱4,920,750 as just compensation for the exercise of the
power of eminent domain by petitioner National Power Corporation (NAPOCOR).
Sometime in the 1970s, NAPOCOR constructed high-tension transmission

lines to implement the Davao-Manat 138 KV Transmission Line Project. [3] These
transmission lines traversed a 12,060-square meter portion of a parcel of
agricultural land covered by Transfer Certificate of Title (TCT) No. T-15343 and
owned by Esperanza Pereyras, Marciano Pereyras, Laureano Pereyras and
Mindaluz Pereyras.
In 1981, NAPOCOR commenced expropriation proceedings covering TCT

No. T-15343 in National Power Corporation v. Esperanza Pereyras, Marciano
Pereyras, Laureano Pereyras and Mindaluz Pereyras.[4] These proceedings
culminated in a final Decision ordering it to pay the amount of ₱300,000 as just
compensation for the affected property.[5]
The trial court issued an Order[6] subrogating Tahanan Realty Development

Corporation to the rights of the defendants in National Power Corporation v.
Pereyras. Pursuant to this Order, NAPOCOR paid the corporation the judgment
award of ₱300,000[7] and Tahanan Realty Development Corporation executed a
Deed of Absolute Sale in favor of the former.[8] This Deed covered Lot 481-B, Psd-
11012718, which was a portion of Lot 481, Cad. 276 of Barrio Magugpo,
Municipality of Tagum, Davao.[9]
Respondent Spouses Bernardo and Mindaluz Pereyras-Saludares are

registered owners of a 6,561-square-meter parcel of land covered by TCT No. T-
109865,[10] more particularly described as follows:

A parcel of land (Lot 15, Pcs-11-000704, Amd.), being a portion of Lots 481-D, Psd-11-
012718; 480-B, Psd-51550; H-148559 & 463-A-2 (LRC) Psd-150796, situated in the Barrio
of Magugpo, Mun. of Tagum, Province of Davao, Island of Mindanao. x x x[11]
On 19 August 1999, respondents filed the instant Complaint against

NAPOCOR and demanded the payment of just compensation. They alleged that it
had entered and occupied their property by erecting high-tension transmission
lines therein and failed to reasonably compensate them for the intrusion.[12]
Petitioner averred that it already paid just compensation for the

establishment of the transmission lines by virtue of its compliance with the final
and executory Decision in National Power Corporation v. Pereyras. Furthermore,
assuming that respondent spouses had not yet received adequate compensation
for the intrusion upon their property, NAPOCOR argued that a claim for just
compensation and damages may only be filed within five years from the date of
installation of the transmission lines pursuant to the provisions of Republic Act
(R.A.) No. 6395.[13]
Pretrial terminated without the parties having entered into a compromise

agreement.[14] Thereafter, the court appointed Lydia Gonzales and Wilfredo
Silawan as Commissioners for the purpose of determining the valuation of the
subject land.[15] NAPOCOR recommended Loreto Monteposo as the third
Commissioner,[16] but later clarified that its conformity to the appointment of
commissioners was only for the purpose of determining the exact portion of the
subject land, and that it was not admitting its liability to pay just compensation.[17]
After the proceedings, the Commissioners recommended the amount of ₱750 per
square meter as the current and fair market value of the subject property based
on the Schedule of Market Values of Real Properties within the City of Tagum
effective in the year 2000.[18]
Trial on the merits ensued. On 10 September 2002, the Court rendered

judgment in favor of respondent spouses, the dispositive portion of which reads:

WHEREFORE, premises considered, judgment is hereby rendered in favor of the
plaintiffs, and against the defendant-National Power Corporation, ordering the latter to
pay the plaintiffs the Just Compensation as herein fixed which they claimed for the use,
occupation and utilization of their land from which it benefited and profited
since January 1982, as follows:
First: To pay plaintiff Spouses Bernardo and Mindaluz Saludares as just compensation of
their 6,561 square meters, more or less, titled land covered by TCT No. T-109865 of the
Registry of Deeds of Davao del Norte hereby fixed in the amount of FOUR MILLION NINE
HUNDRED TWENTY THOUSAND SEVEN HUNDRED FIFTY (₱4,920,750.00) PESOS,
Philippine Currency, plus interest at the rate of 12% per annum reckoned from January
01, 1982, until said amount is fully paid, or deposited in Court;
Second: To pay plaintiffs-spouses Bernardo and Mindaluz Saludares attorneys fees of

Fifty Thousand (₱50,000.00) Pesos, Philippine Currency, plus appearance fee
of ₱2,000.00 per appearance and litigation expenses which shall be supported in a Bill of
Costs to be submitted for the Courts approval;
Third. To pay the costs of the suit.
Fourth. For utter lack of merit, the counterclaim is dismissed.
SO ORDERED.[19]
NAPOCOR appealed the trial courts Decision to the CA.[20] After a review of

the respective parties Briefs, the appellate court rendered the assailed Decision
on 21 July 2009, denying NAPOCORs appeal and affirming the trial courts
Decision, but reducing the rate of interest to 6% per annum.[21]

Aggrieved, petitioner then filed the instant Rule 45 Petition before this
Court.
The Issues
The pivotal issues as distilled from the pleadings are as follows:
1. Whether NAPOCOR has previously compensated the spouses for

establishing high-tension transmission lines over their property;

2. Whether the demand for payment of just compensation has already

prescribed;

3. Whether petitioner is liable for only ten percent of the fair market value
of the property or for the full value thereof; and

4. Whether the trial court properly awarded the amount of ₱4,920,750 as
just compensation, based on the Approved Schedule of Market Values
for Real Property in Tagum City for the Year 2000.
The Courts Ruling
We uphold the Decisions of the CA and the RTC.

I
NAPOCOR failed to prove that it had adequately compensated

respondents for the establishment of high tension transmission
lines over their property
NAPOCOR argues that the parcel of land involved in the instant Petition had
already been expropriated in National Power Corporation v. Pereyras.[22] In
support of this argument, it alleges that one of the sources of the spouses TCT No.
T-109865 is TCT No. 39660; and that TCT No. 39660 is a transfer from TCT No. T-
15343, the subject land in National Power Corporation v. Pereyras. [23] Thus, having
paid just compensation to Tahanan Realty Development Corporation, the
successor-in-interest of defendants Pereyras in the aforementioned case,
petitioner submits that it should no longer be made to pay just compensation in
the present case.

We disagree.

While it is true that respondent spouses TCT No. T-109865 was indeed indirectly
sourced from TCT No. T-15343, the CA correctly ruled that NAPOCOR failed to
prove that the lands involved in National Power Corporation v. Pereyras and in the
instant Petition are identical. One cannot infer that the subject lands in both cases
are the same, based on the fact that one of the source titles of TCT No. T-109865
happens to be TCT No. T-38660, and that TCT No. T-38660 itself was derived from
T-15343.

Furthermore, the evidence before us supports respondent spouses
contention that the lands involved in both cases are different. National Power
Corporation v. Pereyrasinvolved Lot 481-B, Psd-11012718, which was a portion of
Lot 481, Cad. 276 of Barrio Magugpo, Municipality of Tagum, Davao. [24] On the
other hand, the instant Petition involves Lot 15, Pcs-11-000704, Amd., which is a
portion of Lots 481-D, Psd-11-012718; 480-B, Psd-51550; H-148559 and 463-A-2
(LRC), Psd-150796, in Barrio Magugpo, Municipality of Tagum, Davao. Clearly,
these lots refer to different parcels of land.[25]

We rule, therefore, that NAPOCOR failed to prove its previous payment of just
compensation for its expropriation of the land in question.

II
The demand for payment of just compensation
has not prescribed
Petitioner maintains that, in the event respondent spouses have not been
adequately compensated for the entry into their property, their claim for just
compensation would have already prescribed,[26] pursuant to Section 3 (i) of R.A.
No. 6395, as amended by Presidential Decrees Nos. 380, 395, 758, 938, 1360 and
1443. This provision empowers the NAPOCOR to do as follows:

x x x [E]nter upon private property in the lawful performance or prosecution of its
business or purposes, including the construction of the transmission lines thereon;
Provided, that the owner of such private property shall be paid the just compensation
therefor in accordance with the provisions hereinafter provided; Provided, further, that
any action by any person claiming compensation and/or damages shall be filed within
five (5) years after the right-of-way, transmission lines, substations, plants or other
facilities shall have been established; Provided, finally, that after the said period no suit
shall be brought to question the said right-of-way, transmission lines, substations, plants
or other facilities nor the amounts of compensation and/or damages involved.
(Emphasis supplied.)
NAPOCORs reliance on this provision is misplaced.
The right to recover just compensation is enshrined in no less than our Bill of
Rights, which states in clear and categorical language that [p]rivate property shall
not be taken for public use without just compensation.[27] This constitutional
mandate cannot be defeated by statutory prescription.[28] Thus, we have ruled
that the prescriptive period under Section 3 (i) of R.A. No. 6395 does not extend
to an action to recover just compensation.[29] It would be a confiscatory act on the
part of the government to take the property of respondent spouses for a public
purpose and deprive them of their right to just compensation, solely because they
failed to institute inverse condemnation proceedings within five years from the
time the transmission lines were constructed. To begin with, it was not the duty
of respondent spouses to demand for just compensation. Rather, it was the duty
of NAPOCOR to institute eminent domain proceedings before occupying their
property. In the normal course of events, before the expropriating power enters a
private property, it must first file an action for eminent domain[30] and deposit
with the authorized government depositary an amount equivalent to the assessed
value of the property.[31] Due to its omission, however, respondents were
constrained to file inverse condemnation proceedings to demand the payment of
just compensation before the trial court. We therefore rule that NAPOCOR cannot
invoke the statutory prescriptive period to defeat respondent spouses
constitutional right to just compensation.

III
NAPOCOR is liable to pay the full market value
of the affected property
NAPOCOR submits that it should pay for only ten percent (10%) of the fair
market value of the landowners property because, under its Charter,[32] it is only
authorized to acquire easements of right-of-way over agricultural lands.[33]
Petitioners arguments fail to convince.
We have ruled that when petitioner takes private property to construct

transmission lines, it is liable to pay the full market value upon proper
determination by the courts.[34]
In National Power Corporation v. Gutierrez,[35] the petitioner likewise argued

that it should only be made to pay easement fees instead of the full market value
of the land traversed by its transmission lines. In striking down its argument and
ruling that the property owners were entitled to the full market value of the land
in question, we ruled:

x x x While it is true that plaintiff [is] only after a right-of-way easement, it nevertheless
perpetually deprives defendants of their proprietary rights as manifested by the
imposition by the plaintiff upon defendants that below said transmission lines no plant
higher than three (3) meters is allowed. Furthermore, because of the high-tension
current conveyed through said transmission lines, danger to life and limbs that may be
caused beneath said wires cannot altogether be discounted, and to cap it all, plaintiff
only pays the fee to defendants once, while the latter shall continually pay the taxes due
on said affected portion of their property.[36]
Similarly, in this case, while respondent spouses could still utilize the area
beneath NAPOCORs transmission lines provided that the plants to be introduced
underneath would not exceed three meters,[37] danger is posed to the lives and
limbs of respondents farm workers, such that the property is no longer suitable
for agricultural production.[38]Considering the nature and effect of the Davao-
Manat 138 KV transmission lines, the limitation imposed by NAPOCOR perpetually
deprives respondents of the ordinary use of their land.
Moreover, we have ruled that Section 3A of R.A. No. 6395, as amended, is

not binding upon this Court.[39] [T]he determination of just compensation in
eminent domain cases is a judicial function and . . . any valuation for just
compensation laid down in the statutes may serve only as a guiding principle or
one of the factors in determining just compensation but it may not substitute the
court's own judgment as to what amount should be awarded and how to arrive at
such amount.[40]
We therefore rule that NAPOCOR is liable to pay respondents the full

market value of the affected property as determined by the court a quo.

IV
The trial court did not err in awarding just compensation based on
the Approved Schedule of Market Values for
Real Property for the Year 2000
As its final argument, petitioner contends that the amount of just compensation
fixed by the trial court is unjust, unlawful and contrary to existing jurisprudence,
because just compensation in expropriation cases must be determined from the
time of the filing of the complaint or the time of taking of the subject property,
whichever came first.[41] It therefore posits that since the taking of the property
happened in the 1970s, the trial court erred in fixing the amount of just
compensation with reference to real property market values in the year 2000.[42]
Petitioners contention holds no water.
We have ruled in National Power Corporation v. Heirs of Macabangkit

Sangkay[43] that the reckoning value of just compensation is that prevailing at the
time of the filing of the inverse condemnation proceedings for the following
reason:

[c]ompensation that is reckoned on the market value prevailing at the time either when
NPC entered x x x would not be just, for it would compound the gross unfairness already
caused to the owners by NPC's entering without the intention of formally expropriating
the land x x x. NPC's entry denied elementary due process of law to the owners since
then until the
owners commenced the inverse condemnation proceedings. The Court is more

concerned with the necessity to prevent NPC from unjustly profiting from its deliberate
acts of denying due process of law to the owners. As a measure of simple justice and
ordinary fairness to them, therefore, reckoning just compensation on the value at the
time the owners commenced these inverse condemnation proceedings is entirely
warranted.

Indeed, respondent spouses would be deprived of their right to just

compensation if the value of the property is pegged back to its value in the 1970s.
To reiterate, NAPOCOR should have instituted eminent domain proceedings
before it occupied respondent spouses property. Because it failed to comply with
this duty, respondent spouses were constrained to file the instant Complaint for
just compensation before the trial court. From the 1970s until the present, they
were deprived of just compensation, while NAPOCOR continuously burdened
their property with its transmission lines. This Court cannot allow petitioner to
profit from its failure to comply with the mandate of the law. We therefore rule
that, to adequately compensate respondent spouses from the decades of burden
on their property, NAPOCOR should be made to pay the value of the property at
the time of the filing of the instant Complaint when respondent spouses made a
judicial demand for just compensation.
WHEREFORE, premises considered, the instant Petition for Review is DENIED, and

the Decision of the Court of Appeals in CA-G.R. CV No. 81098 dated 21 July 2009
is AFFIRMED.
SO ORDERED.

MARIA LOURDES P. A. SERENO

Associate Justice
WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson
ARTURO D. BRION JOSE PORTUGAL PEREZ

BIENVENIDO L. REYES
Associate Justice
ATTESTATION
Courts Division.

ANTONIO T. CARPIO
Associate Justice
CERTIFICATION

RENATO C. CORONA
Chief Justice

[1]
Court of Appeals (CA) Decision dated 21 July 2009, penned by Associate Justice Romulo V. Borja and concurred
in by Associate Justices Jane Aurora C. Lantion and Edgardo T. Lloren, rollo, pp. 39-59.
[2]
Regional Trial Court (RTC) Decision dated 10 September 2002, penned by Judge Erasto D. Salcedo, id. at 60-
113.
[3]
Petition for Review on Certiorari dated 25 September 2009, id. at 10.
[4]
Special Civil Case No. 135, RTC, Branch II, Tagum City.
[5]
Answer dated 27 October 1999, records, pp. 40-41.
[6]
Order dated 15 February 1990, id. at 26.
[7]
Disbursement Voucher, id. at 27.
[8]
Deed of Absolute Sale dated 30 March 1990, id. at 28.
[9]
Id.
[10]
Complaint dated 21 July 1999, id. at 1.
[11]
Transfer Certificate of Title No. T-109065, id. at 5.
[12]
Supra note 10 at 1-3.
[13]
Supra note 5.
[14]
Order dated 6 June 2000, records, p. 75.
[15]
Order dated 27 July 2000, id. at 83.
[16]
Manifestation/Compliance dated 31 July 2000, id. at 85.
[17]
Comment (to the Order dated 27 July 2000) dated 11 August 2000, id. at 90.
[18]
Commissioners Report dated 14 November 2000, id. at 106-110.
[19]
RTC Decision dated 10 September 2002, pp. 52-53; records, pp. 270-271.
[20]
Notice of Appeal dated 11 October 2002, records, p. 285.
[21]
CA Decision dated 21 July 2009, p. 21; CA rollo, p. 169.
[22]
Supra note 3 at 20.
[23]
Id. at 21.
[24]
Supra note 8.
[25]
Supra note 11.
[26]
[27]
CONSTITUTION, Article III, Section 9.
[28]
NAPOCOR v. Heirs of Macabangkit Sangkay, G.R. No. 165828, 24 August 2011.
[29]
Id.
[30]
RULES OF COURT, Rule 67, Section 1.
[31]
[32]
The pertinent provision of Republic Act No. 6395, as amended, reads:

SECTION 3A. In acquiring private property or private property rights through expropriation
proceedings where the land or portion thereof will be traversed by the transmission lines, only a
right-of-way easement thereon shall be acquired when the principal purpose for which such land is
actually devoted will not be impaired x x x.


x x x x x x x x x

(b) With respect to the acquired right-of-way easement over the land or portion thereof, not to
exceed ten percent (10%) of the market value declared by the owner or administrator or
anyone having legal interest in the property, or such market value as determined by the
assessor whichever is lower.
[33]
[34]
National Power Corporation v. Ong Co, G.R. No. 166973, 10 February 2009, 578 SCRA 234, 245.
[35]
271 Phil. 1 (1991).
[36]
Id. at 6.
[37]
TSN, 12 December 2001, p. 9.
[38]
Appellees Brief dated 23 February 2005, CA rollo, p. 37.
[39]
National Power Corporation v. Tuazon, G.R. No. 193023, 29 June 2011, 653 SCRA 84.
[40]
National Power Corporation v. Bagui, G.R. No. 164964, 17 October 2008, 569 SCRA 401, 410.
[41]
[42]
[43]
Supra note 28.
Supreme Court
Manila
FIRST DIVISION

Petitioner,
Present:

- versus - CORONA, C.J., Chairperson,
LEONARDO-DE CASTRO,

BERSAMIN,
HEIRS OF MACABANGKIT SANGKAY,
DEL CASTILLO, and
namely: CEBU, BATOWA-AN,
SAYANA, NASSER, MANTA, EDGAR, VILLARAMA, JR., JJ.
PUTRI , MONGKOY*, and AMIR, all

surnamed MACABANGKIT,
Promulgated:
Respondents.

August 24, 2011
x-----------------------------------------------------------------------------------------x
DECISION
BERSAMIN, J.:
Private property shall not be taken for public use without just compensation.
Section 9, Article III, 1987 Constitution
The application of this provision of the Constitution is the focus of this appeal.
Petitioner National Power Corporation (NPC) seeks the review on certiorari of the
decision promulgated on October 5, 2004,[1] whereby the Court of Appeals (CA)
affirmed the decision dated August 13, 1999 and the supplemental decision dated
August 18, 1999, ordering NPC to pay just compensation to the respondents, both
rendered by the Regional Trial Court, Branch 1, in Iligan City (RTC).
Antecedents
Pursuant to its legal mandate under Republic Act No. 6395 (An Act Revising the
Charter of the National Power Corporation), NPC undertook the Agus River
Hydroelectric Power Plant Project in the 1970s to generate electricity for
Mindanao. The project included the construction of several underground tunnels
to be used in diverting the water flow from the Agus River to the hydroelectric
plants.[2]
On November 21, 1997, the respondents, namely: Cebu, Bangowa-an, Sayana,

Nasser, Manta, Edgar, Putri, Mongkoy and Amir, all surnamed Macabangkit (Heirs
of Macabangkit), as the owners of land with an area of 221,573 square meters
situated in Ditucalan, Iligan City, sued NPC in the RTC for the recovery of damages
and of the property, with the alternative prayer for the payment of just
compensation.[3] They alleged that they had belatedly discovered that one of the
underground tunnels of NPC that diverted the water flow of the Agus River for
the operation of the Hydroelectric Project in Agus V, Agus VI and Agus VII
traversed their land; that their discovery had occurred in 1995 after Atty. Saidali
C. Gandamra, President of the Federation of Arabic Madaris School, had rejected
their offer to sell the land because of the danger the underground tunnel might
pose to the proposed Arabic Language Training Center and Muslims Skills
Development Center; that such rejection had been followed by the withdrawal by
Global Asia Management and Resource Corporation from developing the land into
a housing project for the same reason; that Al-Amanah Islamic Investment Bank
of the Philippines had also refused to accept their land as collateral because of
the presence of the underground tunnel; that the underground tunnel had been
constructed without their knowledge and consent; that the presence of the
tunnel deprived them of the agricultural, commercial, industrial and residential
value of their land; and that their land had also become an unsafe place for
habitation because of the loud sound of the water rushing through the tunnel and
the constant shaking of the ground, forcing them and their workers to relocate to
safer grounds.
In its answer with counterclaim,[4] NPC countered that the Heirs of Macabangkit

had no right to compensation under section 3(f) of Republic Act No. 6395, under
which a mere legal easement on their land was established; that their cause of
action, should they be entitled to compensation, already prescribed due to the
tunnel having been constructed in 1979; and that by reason of the tunnel being
an apparent and continuous easement, any action arising from such easement
prescribed in five years.

Ruling of the RTC
On July 23, 1998, an ocular inspection of the land that was conducted by
RTC Judge Mamindiara P. Mangotara and the representatives of the parties
resulted in the following observations and findings:

a. That a concrete post which is about two feet in length from the ground which
according to the claimants is the middle point of the tunnel.
b. That at least three fruit bearing durian trees were uprooted and as a result of the
construction by the defendant of the tunnel and about one hundred coconuts
planted died.

c. That underground tunnel was constructed therein.[5]

After trial, the RTC ruled in favor of the plaintiffs (Heirs of Macabangkit),
[6]
decreeing:

WHEREFORE, premises considered:
1. The prayer for the removal or dismantling of defendants tunnel is denied.

However, defendant is hereby directed and ordered:
a)To pay plaintiffs land with a total area of 227,065 square meters, at the rate
of FIVE HUNDRED (P500.00) PESOS per square meter, or a total of ONE HUNDRED
THIRTEEN MILLION FIVE HUNDRED THIRTY TWO THOUSAND AND FIVE HUNDRED
(P113,532,500.00), PESOS, plus interest, as actual damages or just compensation;
b) To pay plaintiff a monthly rental of their land in the amount of THIRTY
THOUSAND (P30,000.00) PESOS from 1979 up to July 1999 with 12% interest per
annum;

c)To pay plaintiffs the sum of TWO HUNDRED THOUSAND (P200,000.00)
PESOS, as moral damages;

d) To pay plaintiffs, the sum of TWO HUNDRED THOUSAND (P200,000.00)
PESOS, as exemplary damages;

e)To pay plaintiffs, the sum equivalent to 15% of the total amount awarded,
as attorneys fees, and to pay the cost.

SO ORDERED.
The RTC found that NPC had concealed the construction of the tunnel in 1979
from the Heirs of Macabangkit, and had since continuously denied its existence;
that NPC had acted in bad faith by taking possession of the subterranean portion
of their land to construct the tunnel without their knowledge and prior consent;
that the existence of the tunnel had affected the entire expanse of the land, and
had restricted their right to excavate or to construct a motorized deep well; and
that they, as owners, had lost the agricultural, commercial, industrial and
residential value of the land.
The RTC fixed the just compensation at P500.00/square meter based on the
testimony of Dionisio Banawan, OIC-City Assessor of Iligan City, to the effect that
the appraised value of the adjoining properties ranged from P700.00 to P750.00,
while the appraised value of their affected land ranged from P400.00 to P500.00.
The RTC also required NPC to pay rentals from 1979 due to its bad faith in
concealing the construction of the tunnel from the Heirs of Macabangkit.
On August 18, 1999, the RTC issued a supplemental decision,[7] viz:

Upon a careful review of the original decision dated August 13, 1999, a sentence should
be added to paragraph 1(a) of the dispositive portion thereof, to bolster, harmonize,
and conform to the findings of the Court, which is quoted hereunder, to wit:
Consequently, plaintiffs land or properties are hereby condemned in favor of

defendant National Power Corporation, upon payment of the aforesaid sum.
Therefore, paragraph 1(a) of the dispositive portion of the original decision should read,
as follows:

a) To pay plaintiffs land with a total area of 227,065 square meters, at the rate of
FIVE HUNDRED (P500.00) PESOS per square meter, or a total of ONE
HUNDRED THIRTEEN MILLION FIVE HUNDRED THIRTY TWO THOUSAND AND
FIVE HUNDRED (P113,532,500.00) PESOS, plus interest, as actual damages or
just compensation; Consequently, plaintiffs land or properties are hereby
condemned in favor of defendant National Power Corporation, upon payment
of the aforesaid sum;
This supplemental decision shall be considered as part of paragraph 1(a) of the

dispositive portion of the original decision.
Furnish copy of this supplemental decision to all parties immediately.
SO ORDERED.
On its part, NPC appealed to the CA on August 25, 1999.[8]
Earlier, on August 18, 1999, the Heirs of Macabangkit filed an urgent

motion for execution of judgment pending appeal.[9] The RTC granted the motion
and issued a writ of execution,[10] prompting NPC to assail the writ by petition
for certiorari in the CA. On September 15, 1999, the CA issued a temporary
restraining order (TRO) to enjoin the RTC from implementing its decision. The
Heirs of Macabangkit elevated the ruling of the CA (G.R. No. 141447), but the
Court upheld the CA on May 4, 2006.[11]
Ruling of the CA
NPC raised only two errors in the CA, namely:

I
THE COURT A QUO SERIOUSLY ERRED IN RULING THAT NAPOCORS UNDERGROUND

TUNNEL IN ITS AGUS RIVER HYDRO-ELECTRIC PLANT PROJECT TRAVERSED AND/OR
AFFECTED APPELLEES PROPERTY AS THERE IS NO CLEAR EVIDENCE INDUBITABLY
ESTABLISHING THE SAME
II
THE COURT A QUO SERIOUSLY ERRED IN GRANTING APPELLEES CLAIMS IN THEIR

ENTIRETY FOR GRANTING ARGUENDO THAT NAPOCORS UNDERGROUND TUNNEL
INDEED TRAVERSED APPELLEES PROPERTY, THEIR CAUSE OF ACTION HAD ALREADY
BEEN BARRED BY PRESCRIPTION, ESTOPPEL AND LACHES
On October 5, 2004, the CA affirmed the decision of the RTC, holding that the
testimonies of NPCs witness Gregorio Enterone and of the respondents witness
Engr. Pete Sacedon, the topographic survey map, the sketch map, and the ocular
inspection report sufficiently established the existence of the underground tunnel
traversing the land of the Heirs of Macabangkit; that NPC did not substantiate its
defense that prescription already barred the claim of the Heirs of Macabangkit;
and that Section 3(i) of R.A. No. 6395, being silent about tunnels, did not
apply, viz:

As regard Section 3(i) of R.A. No. 6395 (An Act Revising the Charter of the National
Power Corporation), it is submitted that the same provision is not applicable. There is
nothing in Section 3(i) of said law governing claims involving tunnels. The same provision
is applicable to those projects or facilities on the surface of the land, that can easily be
discovered, without any mention about the claims involving tunnels, particularly those
surreptitiously constructed beneath the surface of the land, as in the instant case.
Now, while it is true that Republic Act No. 6395 authorizes NAPOCOR to take water from
any public stream, river, creek, lake, spring or waterfall in the Philippines for the
realization of the purposes specified therein for its creation; to intercept and divert the
flow of waters from lands of riparian owners (in this case, the Heirs), and from persons
owning or interested in water which are or may be necessary to said purposes, the same
Act expressly mandates the payment of just compensation.

WHEREFORE, premises considered, the instant appeal is hereby DENIED for lack of
merit. Accordingly, the appealed Decision dated August 13, 1999, and the supplemental
Decision dated August 18, 1999, are hereby AFFIRMED in toto.
SO ORDERED.[12]
Issue
NPC has come to the Court, assigning the lone error that:

THE APPELLATE COURT ERRED ON A QUESTION OF LAW WHEN IT AFFIRMED THE
DECISION AND SUPPLEMENTAL DECISION OF THE COURT A QUO DIRECTING AND
ORDERING PETITIONER TO PAY JUST COMPENSATION TO RESPONDENTS.
NPC reiterates that witnesses Enterone and Sacedon lacked personal knowledge
about the construction and existence of the tunnel and were for that reason not
entitled to credence; and that the topographic and relocation maps prepared by
Sacedon should not be a basis to prove the existence and location of the tunnel
due to being self-serving.
NPC contends that the CA should have applied Section 3(i) of Republic Act No.
6395, which provided a period of only five years from the date of the construction
within which the affected landowner could bring a claim against it; and that even
if Republic Act No. 6395 should be inapplicable, the action of the Heirs of
Macabangkit had already prescribed due to the underground tunnel being
susceptible to acquisitive prescription after the lapse of 10 years pursuant to
Article 620 of the Civil Code due to its being a continuous and apparent legal
easement under Article 634 of the Civil Code.
The issues for resolution are, therefore, as follows:

(1) Whether the CA and the RTC erred in holding that there was
an underground tunnel traversing the Heirs of Macabangkits land
constructed by NPC; and
(2) Whether the Heirs of Macabangkits right to claim just

compensation had prescribed under section 3(i) of Republic Act No.
6395, or, alternatively, under Article 620 and Article 646 of the Civil
Code.
Ruling
We uphold the liability of NPC for payment of just compensation.

1.
Factual findings of the RTC,
when affirmed by the CA, are binding
The existence of the tunnel underneath the land of the Heirs of Macabangkit,
being a factual matter, cannot now be properly reviewed by the Court, for
questions of fact are beyond the pale of a petition for review on certiorari.
Moreover, the factual findings and determinations by the RTC as the trial court
are generally binding on the Court, particularly after the CA affirmed them.
[13]
Bearing these doctrines in mind, the Court should rightly dismiss NPCs appeal.

NPC argues, however, that this appeal should not be dismissed because the Heirs
of Macabangkit essentially failed to prove the existence of the underground
tunnel. It insists that the topographic survey map and the right-of-way map
presented by the Heirs of Macabangkit did not at all establish the presence of any
underground tunnel.
NPC still fails to convince.
Even assuming, for now, that the Court may review the factual findings of the CA
and the RTC, for NPC to insist that the evidence on the existence of the tunnel
was not adequate and incompetent remains futile. On the contrary, the evidence
on the tunnel was substantial, for the significance of the topographic survey map
and the sketch map (as indicative of the extent and presence of the tunnel
construction) to the question on the existence of the tunnel was strong, as the CA
correctly projected in its assailed decision, viz:

Among the pieces of documentary evidence presented showing the existence of
the said tunnel beneath the subject property is the topographic survey map. The
topographic survey map is one conducted to know about the location and elevation of
the land and all existing structures above and underneath it. Another is the Sketch Map
which shows the location and extent of the land traversed or affected by the said
tunnel. These two (2) pieces of documentary evidence readily point the extent and
presence of the tunnel construction coming from the power cavern near the small
man-made lake which is the inlet and approach tunnel, or at a distance of about two
(2) kilometers away from the land of the plaintiffs-appellees, and then traversing the
entire and the whole length of the plaintiffs-appellees property, and the outlet
channel of the tunnel is another small man-made lake. This is a sub-terrain
construction, and considering that both inlet and outlet are bodies of water, the tunnel
can hardly be noticed. All constructions done were beneath the surface of the plaintiffs-
appellees property. This explains why they could never obtain any knowledge of the
existence of such tunnel during the period that the same was constructed and installed
beneath their property.[14]

The power cavern and the inlet and outlet channels established the presence of
the underground tunnel, based on the declaration in the RTC by Sacedon, a
former employee of the NPC.[15] It is worthy to note that NPC did not deny the
existence of the power cavern, and of the inlet and outlet channels adverted to
and as depicted in the topographic survey map and the sketch map. The CA
cannot be faulted for crediting the testimony of Sacedon despite the effort of NPC
to discount his credit due to his not being an expert witness, simply because
Sacedon had personal knowledge based on his being NPCs principal engineer and
supervisor tasked at one time to lay out the tunnels and transmission lines
specifically for the hydroelectric projects,[16] and to supervise the construction of
the Agus 1 Hydroelectric Plant itself[17] from 1978 until his retirement from NPC.
[18]
Besides, he declared that he personally experienced the vibrations caused by
the rushing currents in the tunnel, particularly near the outlet channel .[19] Under
any circumstances, Sacedon was a credible and competent witness.
The ocular inspection actually confirmed the existence of the tunnel

underneath the land of the Heirs of Macabangkit. Thus, the CA observed:

More so, the Ocular inspection conducted on July 23, 1998 further bolstered such claim
of the existence and extent of such tunnel. This was conducted by a team composed of
the Honorable Presiding Judge of the Regional Trial Court, Branch 01, Lanao del Norte,
herself and the respective lawyers of both of the parties and found that, among others,
said underground tunnel was constructed beneath the subject property.[20]
It bears noting that NPC did not raise any issue against or tender any
contrary comment on the ocular inspection report.

2.
Five-year prescriptive period under Section 3(i) of Republic Act No.
6395 does not apply to claims for just compensation

The CA held that Section 3(i) of Republic Act No. 6395 had no application to this
action because it covered facilities that could be easily discovered, not tunnels
that were inconspicuously constructed beneath the surface of the land.[21]
NPC disagrees, and argues that because Article 635[22] of the Civil

Code directs the application of special laws when an easement, such as the
underground tunnel, was intended for public use, the law applicable was Section
3(i) of Republic Act No. 6395, as amended, which limits the action for recovery of
compensation to five years from the date of construction. It posits that the five-
year prescriptive period already set in due to the construction of the underground
tunnel having been completed in 1979 yet.
Without necessarily adopting the reasoning of the CA, we uphold its conclusion
that prescription did not bar the present action to recover just compensation.
Section 3 (i) of Republic Act No. 6395, the cited law, relevantly provides:

Section 3. Powers and General Functions of the Corporation. The powers, functions,
rights and activities of the Corporation shall be the following:
xxx
(i) To construct works across, or otherwise, any stream, watercourse, canal,

ditch, flume, street, avenue, highway or railway of private and public
ownership, as the location of said works may require:Provided, That said
works be constructed in such a manner as not to endanger life or property;
And provided, further, That the stream, watercourse, canal ditch, flume,
street, avenue, highway or railway so crossed or intersected be restored as
near as possible to their former state, or in a manner not to impair
unnecessarily their usefulness. Every person or entity whose right of way or
property is lawfully crossed or intersected by said works shall not obstruct any
such crossings or intersection and shall grant the Board or its representative,
the proper authority for the execution of such work. The Corporation is
hereby given the right of way to locate, construct and maintain such works
over and throughout the lands owned by the Republic of the Philippines or
any of its branches and political subdivisions. The Corporation or its
representative may also enter upon private property in the lawful
performance or prosecution of its business and purposes, including the
construction of the transmission lines thereon; Provided, that the owner of
such property shall be indemnified for any actual damage caused
thereby;Provided, further, That said action for damages is filed within five
years after the rights of way, transmission lines, substations, plants or other
facilities shall have been established; Provided, finally, That after said period,
no suit shall be brought to question the said rights of way, transmission lines,
substations, plants or other facilities;
A cursory reading shows that Section 3(i) covers the construction of works across,
or otherwise, any stream, watercourse, canal, ditch, flume, street, avenue,
highway or railway of private and public ownership, as the location of said works
may require. It is notable that Section 3(i) includes no limitation except those
enumerated after the term works. Accordingly, we consider the term works as
embracing all kinds of constructions, facilities, and other developments that can
enable or help NPC to meet its objectives of developing hydraulic power expressly
provided under paragraph (g) of Section 3.[23] The CAs restrictive construal of
Section 3(i) as exclusive of tunnels was obviously unwarranted, for the provision
applies not only to development works easily discoverable or on the surface of
the earth but also to subterranean works like tunnels. Such interpretation accords
with the fundamental guideline in statutory construction that when the law does
not distinguish, so must we not.[24] Moreover, when the language of the statute is
plain and free from ambiguity, and expresses a single, definite, and sensible
meaning, that meaning is conclusively presumed to be the meaning that the
Congress intended to convey.[25]
Even so, we still cannot side with NPC.
We rule that the prescriptive period provided under Section 3(i) of Republic
Act No. 6395 is applicable only to an action for damages, and does not extend to
an action to recover just compensation like this case. Consequently, NPC cannot
thereby bar the right of the Heirs of Macabangkit to recover just compensation
for their land.
The action to recover just compensation from the State or its expropriating
agency differs from the action for damages. The former, also known as inverse
condemnation, has the objective to recover the value of property taken in fact by
the governmental defendant, even though no formal exercise of the power of
eminent domain has been attempted by the taking agency.[26] Just compensation is
the full and fair equivalent of the property taken from its owner by the
expropriator. The measure is not the takers gain, but the owners loss. The
word just is used to intensify the meaning of the word compensation in order to
convey the idea that the equivalent to be rendered for the property to be taken
shall be real, substantial, full, and ample.[27] On the other hand, the latter action
seeks to vindicate a legal wrong through damages, which may be actual, moral,
nominal, temperate, liquidated, or exemplary. When a right is exercised in a
manner not conformable with the norms enshrined in Article 19[28] and like
provisions on human relations in the Civil Code, and the exercise results to the
damage of another, a legal wrong is committed and the wrongdoer is held
responsible.[29]
The two actions are radically different in nature and purpose. The action to
recover just compensation is based on the Constitution[30] while the action for
damages is predicated on statutory enactments. Indeed, the former arises from
the exercise by the State of its power of eminent domain against private property
for public use, but the latter emanates from the transgression of a right. The fact
that the owner rather than the expropriator brings the former does not change
the essential nature of the suit as an inverse condemnation, [31] for the suit is not
based on tort, but on the constitutional prohibition against the taking of property
without just compensation.[32] It would very well be contrary to the clear language
of the Constitution to bar the recovery of just compensation for private property
taken for a public use solely on the basis of statutory prescription.
Due to the need to construct the underground tunnel, NPC should have first
moved to acquire the land from the Heirs of Macabangkit either by voluntary
tender to purchase or through formal expropriation proceedings. In either case,
NPC would have been liable to pay to the owners the fair market value of the
land, for Section 3(h) of Republic Act No. 6395 expressly requires NPC to pay the
fair market value of such property at the time of the taking, thusly:

(h) To acquire, promote, hold, transfer, sell, lease, rent, mortgage, encumber and
otherwise dispose of property incident to, or necessary, convenient or proper to carry
out the purposes for which the Corporation was created: Provided, That in case a right
of way is necessary for its transmission lines, easement of right of way shall only be
sought: Provided, however, That in case the property itself shall be acquired by
purchase, the cost thereof shall be the fair market value at the time of the taking of
such property.
This was what NPC was ordered to do in National Power Corporation v.

Ibrahim,[33] where NPC had denied the right of the owners to be paid just
compensation despite their land being traversed by the underground tunnels for
siphoning water from Lake Lanao needed in the operation of Agus II, Agus III, Agus
IV, Agus VI and Agus VII Hydroelectric Projects in Saguiran, Lanao del Sur, in
Nangca and Balo-I in Lanao del Norte and in Ditucalan and Fuentes in Iligan City.
There, NPC similarly argued that the underground tunnels constituted a mere
easement that did not involve any loss of title or possession on the part of the
property owners, but the Court resolved against NPC, to wit:

Petitioner contends that the underground tunnels in this case constitute an
easement upon the property of the respondents which does not involve any loss of title
or possession. The manner in which the easement was created by petitioner, however,
violates the due process rights of respondents as it was without notice and indemnity to
them and did not go through proper expropriation proceedings. Petitioner could have,
at any time, validly exercised the power of eminent domain to acquire the easement
over respondents property as this power encompasses not only the taking or
appropriation of title to and possession of the expropriated property but likewise covers
even the imposition of a mere burden upon the owner of the condemned property.
Significantly, though, landowners cannot be deprived of their right over their land until
expropriation proceedings are instituted in court. The court must then see to it that the
taking is for public use, that there is payment of just compensation and that there is due
process of law.[34]
3.
NPCs construction of the tunnel
constituted taking of the land, and
entitled owners to just compensation
The Court held in National Power Corporation v. Ibrahim that NPC was

liable to pay not merely an easement fee but rather the full compensation for
land traversed by the underground tunnels, viz:

In disregarding this procedure and failing to recognize respondents ownership of
the sub-terrain portion, petitioner took a risk and exposed itself to greater liability with
the passage of time. It must be emphasized that the acquisition of the easement is not
without expense. The underground tunnels impose limitations on respondents use of
the property for an indefinite period and deprive them of its ordinary use. Based upon
the foregoing, respondents are clearly entitled to the payment of just
compensation. Notwithstanding the fact that petitioner only occupies the sub-terrain
portion, it is liable to pay not merely an easement fee but rather the full
compensation for land. This is so because in this case, the nature of the easement
practically deprives the owners of its normal beneficial use. Respondents, as the
owner of the property thus expropriated, are entitled to a just compensation which
should be neither more nor less, whenever it is possible to make the assessment, than
the money equivalent of said property.[35]
Here, like in National Power Corporation v. Ibrahim, NPC constructed a tunnel

underneath the land of the Heirs of Macabangkit without going through formal
expropriation proceedings and without procuring their consent or at least
informing them beforehand of the construction. NPCs construction adversely
affected the owners rights and interests because the subterranean intervention
by NPC prevented them from introducing any developments on the surface, and
from disposing of the land or any portion of it, either by sale or mortgage.
Did such consequence constitute taking of the land as to entitle the owners to just
compensation?
We agree with both the RTC and the CA that there was a full taking on the
part of NPC, notwithstanding that the owners were not completely and actually
dispossessed. It is settled that the taking of private property for public use, to be
compensable, need not be an actual physical taking or appropriation.[36] Indeed,
the expropriators action may be short of acquisition of title, physical possession,
or occupancy but may still amount to a taking.[37] Compensable taking includes
destruction, restriction, diminution, or interruption of the rights of ownership or
of the common and necessary use and enjoyment of the property in a lawful
manner, lessening or destroying its value.[38] It is neither necessary that the owner
be wholly deprived of the use of his property,[39] nor material whether the
property is removed from the possession of the owner, or in any respect changes
hands.[40]
As a result, NPC should pay just compensation for the entire land. In that
regard, the RTC pegged just compensation at P500.00/square meter based on its
finding on what the prevailing market value of the property was at the time of the
filing of the complaint, and the CA upheld the RTC.

We affirm the CA, considering that NPC did not assail the valuation in the CA and
in this Court. NPCs silence was probably due to the correctness of the RTCs
valuation after careful consideration and weighing of the parties evidence, as
follows:

The matter of what is just compensation for these parcels of land is a matter of
evidence. These parcels of land is (sic) located in the City of Iligan, the Industrial City of
the South. Witness Dionisio Banawan, OIC- City Assessors Office, testified, Within that
area, that area is classified as industrial and residential. That plaintiffs land is adjacent to
many subdivisions and that is within the industrial classification. He testified and
identified Exhibit AA and AA-1, a Certification, dated April 4, 1997, showing that the
appraised value of plaintiffs land ranges from P400.00 to P500.00 per square meter (see,
TSN, testimony of Dionisio Banawan, pp. 51, 57, and 71, February 9, 1999). Also, witness
Banawan, testified and identified Two (2) Deeds of Sale, marked as Exhibit AA-2 and AA-
3,[] showing that the appraised value of the land adjoining or adjacent to plaintiff land
ranges from P700.00 to P750.00 per square meter. As between the much lower price of
the land as testified by defendants witness Gregorio Enterone, and that of the City
Assessor of Iligan City, the latter is more credible. Considering however, that the
appraised value of the land in the area as determined by the City Assessors Office is not
uniform, this Court, is of the opinion that the reasonable amount of just compensation
of plaintiffs land should be fixed at FIVE HUNDRED (500.00) PESOS, per square meter.
xxx.[41]
The RTC based its fixing of just compensation ostensibly on the prevailing market
value at the time of the filing of the complaint, instead of reckoning from the time
of the taking pursuant to Section 3(h) of Republic Act No. 6395. The CA did not
dwell on the reckoning time, possibly because NPC did not assign that as an error
on the part of the RTC.
We rule that the reckoning value is the value at the time of the filing of the
complaint, as the RTC provided in its decision. Compensation that is reckoned on
the market value prevailing at the time either when NPC entered or when it
completed the tunnel, as NPC submits, would not be just, for it would compound
the gross unfairness already caused to the owners by NPCs entering without the
intention of formally expropriating the land, and without the prior knowledge and
consent of the Heirs of Macabangkit. NPCs entry denied elementary due process
of law to the owners since then until the owners commenced the inverse
condemnation proceedings. The Court is more concerned with the necessity to
prevent NPC from unjustly profiting from its deliberate acts of denying due
process of law to the owners. As a measure of simple justice and ordinary fairness
to them, therefore, reckoning just compensation on the value at the time the
owners commenced these inverse condemnation proceedings is entirely
warranted.
In National Power Corporation v. Court of Appeals,[42] a case that involved

the similar construction of an underground tunnel by NPC without the prior
consent and knowledge of the owners, and in which we held that the basis in
fixing just compensation when the initiation of the action preceded the entry into
the property was the time of the filing of the complaint, not the time of taking,
[43]
we pointed out that there was no taking when the entry by NPC was made
without intent to expropriate or was not made under warrant or color of legal
authority.
4.
Awards for rentals, moral damages, exemplary
damages, and attorneys fees are deleted
for insufficiency of factual and legal bases
The CA upheld the RTCs granting to the Heirs of Macabangkit of rentals

of P 30,000.00/month from 1979 up to July 1999 with 12% interest per annum by
finding NPC guilty of bad faith in taking possession of the land to construct the
tunnel without their knowledge and consent.
Granting rentals is legally and factually bereft of justification, in light of the

taking of the land being already justly compensated. Conformably with the ruling
in Manila International Airport Authority v. Rodriguez, [44] in which the award of
interest was held to render the grant of back rentals unwarranted, we delete the
award of back rentals and in its place prescribe interest of 12% interest per
annum from November 21, 1997, the date of the filing of the complaint, until the
full liability is paid by NPC. The imposition of interest of 12% interest per
annum follows a long line of pertinent jurisprudence,[45] whereby the Court has
fixed the rate of interest on just compensation at 12% per annumwhenever the
expropriator has not immediately paid just compensation.
The RTC did not state any factual and legal justifications for awarding to the Heirs
of Macabangkit moral and exemplary damages each in the amount
of P200,000.00. The awards just appeared in the fallo of its decision. Neither did
the CA proffer any justifications for sustaining the RTC on the awards. We
consider the omissions of the lower courts as pure legal error that we feel bound
to correct even if NPC did not submit that for our consideration. There was, to
begin with, no factual and legal bases mentioned for the awards. It is never trite
to remind that moral and exemplary damages, not by any means liquidated or
assessed as a matter of routine, always require evidence that establish the
circumstances under which the claimant is entitled to them. Moreover, the failure
of both the RTC and the CA to render the factual and legal justifications for the
moral and exemplary damages in the body of their decisions immediately
demands the striking out of the awards for being in violation of the fundamental
rule that the decision must clearly state the facts and the law on which it is based.
Without the factual and legal justifications, the awards are exposed as the
product of conjecture and speculation, which have no place in fair judicial
adjudication.
We also reverse and set aside the decree of the RTC for NPC to pay to the

Heirs of Macabangkit the sum equivalent to 15% of the total amount awarded,
as attorneys fees, and to pay the cost. The body of the decision did not state
the factual and legal reasons why NPC was liable for attorneys fees. The
terse statement found at the end of the body of the RTCs decision, stating: xxx
The contingent attorneys fee is hereby reduced from 20% to only 15% of the
total amount of the claim that may be awarded to plaintiffs, without more, did
not indicate or explain why and how the substantial liability of NPC for
attorneys fees could have arisen and been determined.

In assessing attorneys fees against NPC and in favor of the respondents,
the RTC casually disregarded the fundamental distinction between the two
concepts of attorneys fees the ordinary and the extraordinary. These concepts
were aptly distinguished in Traders Royal Bank Employees Union-Independent
v. NLRC,[46] thuswise:

There are two commonly accepted concepts of attorneys fees, the so-called
ordinary and extraordinary. In its ordinary concept, an attorneys fee is the reasonable
compensation paid to a lawyer by his client for the legal services he has rendered to the
latter. The basis of this compensation is the fact of his employment by and his
agreement with the client.

In its extraordinary concept, an attorneys fee is an indemnity for damages ordered
by the court to be paid by the losing party in a litigation. The basis of this is any of the
cases provided by law where such award can be made, such as those authorized in
Article 2208, Civil Code, and is payable not to the lawyer but to the client, unless they
have agreed that the award shall pertain to the lawyer as additional compensation or as
part thereof.

By referring to the award as contingency fees, and reducing the
award from 20% to 15%, the RTC was really referring to a supposed
agreement on attorneys fees between the Heirs of Macabangkit and their
counsel. As such, the concept of attorneys fees involved was the ordinary. Yet,
the inclusion of the attorneys fees in the judgment among the liabilities of NPC
converted the fees to extraordinary. We have to disagree with the RTC
thereon, and we express our discomfort that the CA did not do anything to
excise the clearly erroneous and unfounded grant.

An award of attorneys fees has always been the exception rather than
the rule. To start with, attorneys fees are not awarded every time a party
prevails in a suit.[47] Nor should an adverse decision ipso facto justify an award
of attorneys fees to the winning party.[48] The policy of the Court is that no
premium should be placed on the right to litigate.[49] Too, such fees, as part of
damages, are assessed only in the instances specified in Art. 2208, Civil Code.
[50]
Indeed, attorneys fees are in the nature of actual damages.[51] But even when
a claimant is compelled to litigate with third persons or to incur expenses to
protect his rights, attorneys fees may still be withheld where no sufficient
showing of bad faith could be reflected in a partys persistence in a suit other
than an erroneous conviction of the righteousness of his cause.[52] And, lastly,
the trial court must make express findings of fact and law that bring
the suit within the exception. What this demands is that the factual, legal or
equitable justifications for the award must be set forth

not only in the fallo but also in the text of the decision, or else, the award
should be thrown out for being speculative and conjectural.[53]

Sound policy dictates that even if the NPC failed to raise the issue of
attorneys fees, we are not precluded from correcting the lower
courts patently erroneous application of the law.[54] Indeed, the Court, in
supervising the lower courts, possesses the ample authority to
review legal matters like this one even if not specifically raised or assigned as
error by the parties.

5.
Attorneys fees under quantum meruit principle
are fixed at 10% of the judgment award
Based on the pending motions of Atty. Macarupung Dibaratun and Atty.

Manuel D. Ballelos to assert their respective rights to attorneys fees, both
contending that they represented the Heirs of Macabangkit in this case, a conflict
would ensue from the finality of the judgment against NPC.
A look at the history of the legal representation of the Heirs of Macabangkit

herein provides a helpful predicate for resolving the conflict.

Atty. Dibaratun was the original counsel of the Heirs of Macabangkit. When the
appeal was submitted for decision in the CA,[55] Atty. Ballelos filed his entry of
appearance,[56]and a motion for early decision.[57] Atty. Ballelos
subsequently filed also a manifestation,[58] supplemental manifestation,[59]
reply,[60] and ex parte motion reiterating the motion for early decision.[61] It

appears that a copy of the CAs decision was furnished solely to Atty. Ballelos.
However, shortly before the rendition of the decision, Atty. Dibaratun filed in the
CA a motion to register attorneys lien,[62] alleging that he had not withdrawn his
appearance and had not been aware of the entry of appearance by Atty. Ballelos.
A similar motion was also received by the Court from Atty. Dibaratun a few days
after the petition for review was filed.[63]Thus, on February 14, 2005,[64] the Court
directed Atty. Dibaratun to enter his appearance herein. He complied upon filing
the comment.[65]
Amir Macabangkit confirmed Atty. Dibaratuns representation through an ex

parte manifestation that he filed in his own behalf and on behalf of his siblings
Mongkoy and Putri.[66] Amir reiterated his manifestation on March 6, 2006,[67] and
further imputed malpractice to Atty. Ballelos for having filed an entry of
appearance bearing Amirs forged signature and for plagiarism, i.e., copying
verbatim the arguments contained in the pleadings previously filed by Atty.
Dibaratun.[68]
On September 11, 2008, Atty. Ballelos submitted two motions, to wit: (a) a
manifestation and motion authorizing a certain Abdulmajeed Djamla to receive
his attorneys fees equivalent of 15% of the judgment award, [69] and (b) a motion to
register his attorneys lien that he claimed was contingent.[70]

Both Atty. Dibaratun and Atty. Ballelos posited that their entitlement to attorneys
fees was contingent. Yet, a contract for a contingent fees is an agreement in
writing by which the fees, usually a fixed percentage of what may be recovered in
the action, are made to depend upon the success in the effort to enforce or
defend a supposed right. Contingent fees depend upon an express contract,
without which the attorney can only recover on the basis of quantum meruit.
[71]
With neither Atty. Dibaratun nor Atty. Ballelos presenting a written agreement
bearing upon their supposed contingent fees, the only way to determine their
right to appropriate attorneys fees is to apply the principle of quantum meruit.
Quantum meruit literally meaning as much as he deserves is used as basis for

determining an attorneys professional fees in the absence of an express
agreement.[72] The recovery of attorneys fees on the basis of quantum meruit is a
device that prevents an unscrupulous client from running away with the fruits of
the legal services of counsel without paying for it and also avoids unjust
enrichment on the part of the attorney himself.[73] An attorney must show that he
is entitled to reasonable compensation for the effort in pursuing the clients cause,
taking into account certain factors in fixing the amount of legal fees.[74]
Rule 20.01 of the Code of Professional Responsibility lists the guidelines for

determining the proper amount of attorney fees, to wit:
Rule 20.1 A lawyer shall be guided by the following factors in determining

his fees:

a) The time spent and the extent of the services rendered or required;

b) The novelty and difficult of the questions involved;

c) The important of the subject matter;

d) The skill demanded;

e) The probability of losing other employment as a result of acceptance of
the proffered case;

f) The customary charges for similar services and the schedule of fees of
the IBP chapter to which he belongs;

g) The amount involved in the controversy and the benefits resulting to the
client from the service;

h) The contingency or certainty of compensation;

i) The character of the employment, whether occasional or established;
and

j) The professional standing of the lawyer.

In the event of a dispute as to the amount of fees between the attorney

and his client, and the intervention of the courts is sought, the determination
requires that there be evidence to prove the amount of fees and the extent and
value of the services rendered, taking into account the facts determinative
thereof.[75] Ordinarily, therefore, the determination of the attorneys fees
on quantum meruit is remanded to the lower court for the purpose. However, it
will be just and equitable to now assess and fix the attorneys fees of both
attorneys in order that the resolution of a comparatively simple controversy, as
Justice Regalado put it in Traders Royal Bank Employees Union-Independent v.
NLRC,[76] would not be needlessly prolonged, by taking into due consideration the
accepted guidelines and so much of the pertinent data as are extant in the
records.
Atty. Dibaratun and Atty. Ballelos each claimed attorneys fees equivalent to 15%
of the principal award of P113,532,500.00, which was the amount granted by the
RTC in its decision. Considering that the attorneys fees will be defrayed by the
Heirs of Macabangkit out of their actual recovery from NPC, giving to each of the
two attorneys 15% of the principal award as attorneys fees would be excessive
and unconscionable from the point of view of the clients. Thus, the Court, which
holds and exercises the power to fix attorneys fees on a quantum meruit basis in
the absence of an express written agreement between the attorney and the
client, now fixes attorneys fees at 10% of the principal award of P113,532,500.00.
Whether it is Atty. Dibaratun or Atty. Ballelos, or both, who should receive

attorneys fees from the Heirs of Macabangkit is a question that the Court must
next determine and settle by considering the amount and quality of the work
each performed and the results each obtained.
Atty. Dibaratun, the attorney from the outset, unquestionably carried the bulk of
the legal demands of the case. He diligently prepared and timely filed in behalf of
the Heirs of Macabangkit every pleading and paper necessary in the full
resolution of the dispute, starting from the complaint until the very last motion
filed in this Court. He consistently appeared during the trial, and examined and
cross-examined all the witnesses presented at that stage of the proceedings. The
nature, character, and substance of each pleading and the motions he prepared
for the Heirs of Macabangkit indicated that he devoted substantial time and
energy in researching and preparing the case for the trial. He even
advancedP250,000.00 out of his own pocket to defray expenses from the time of
the filing of the motion to execute pending appeal until the case reached the
Court.[77] His representation of all the Heirs of Macabangkit was not denied by any
of them.
We note that Atty. Dibaratun possessed some standing in the legal

profession and in his local community. He formerly served as a member of
the Board of Director of the Integrated Bar of the Philippines (IBP), Lanao del
Norte-Iligan City Chapter, and was an IBP national awardee as Best Legal Aid
Committee Chairman. He taught at Mindanao State University College of Law
Extension. He was a Municipal Mayor of Matungao, Lanao del Norte, and was
enthroned Sultan a Gaus.
In contrast, not much about the character and standing of Atty. Ballelos, as well as
the nature and quality of the legal services he rendered for the Heirs of
Macabangkit are in the records. The motions he filed in the
Court and in the CA lacked enlightening research and were insignificant to the
success of the clients cause. His legal service, if it can be called that, manifested
no depth or assiduousness, judging from the quality of the pleadings from him.
His written submissions in the case appeared either to have been lifted verbatim
from the pleadings previously filed by Atty. Dibaratun, or to have been merely
quoted from the decisions and resolutions of the RTC and the CA. Of the Heirs of
Macabangkit, only Cebu, Batowa-an, Sayana, Nasser, Manta, Mongkoy[78] and
Edgar gave their consent to Atty. Ballelos to appear in their behalf in the CA,
which he did despite Atty. Dibaratun not having yet filed any withdrawal of his
appearance. The Court did not receive any notice of appearance for the Heirs of
Macabangkit from Atty. Ballelos, but that capacity has meanwhile become
doubtful in the face of Amirs strong denial of having retained him.
In fairness and justice, the Court accords full recognition to Atty. Dibaratun
as the counsel de parte of the Heirs of Macabangkit who discharged his
responsibility in the prosecution of the clients cause to its successful end. It is he,
not Atty. Ballelos, who was entitled to the full amount of attorneys fees that the
clients ought to pay to their attorney. Given the amount and quality of his legal
work, his diligence and the time he expended in ensuring the success of his
prosecution of the clients cause, he deserves the recognition, notwithstanding
that some of the clients might appear to have retained Atty. Ballelos after the
rendition of a favorable judgment.[79]

Atty. Ballelos may claim only from Cebu, Batowa-an, Sayana, Nasser, Manta and
Edgar, the only parties who engaged him. The Court considers his work in the case
as very minimal. His compensation under the quantum meruit principle is fixed
at P5,000.00, and only the Heirs of Macabangkit earlier named are liable to him.

WHEREFORE, the Court AFFIRMS the decision promulgated on October 5, 2004

by the Court of Appeals, subject to the following MODIFICATIONS, to wit:
(a) Interest at the rate of 12% per annum is IMPOSED on the principal

amount of P113,532,500.00 as just compensation, reckoned from
the filing of the complaint on November 21, 1997 until the full
liability is paid;
(b) The awards of P30,000.00 as rental fee, P200,000.00 as moral

damages, and P200,000.00 as exemplary damages are DELETED;
and
(c) The award of 15% attorneys fees decreed to be paid by National

Power Corporation to the Heirs of Macabangkit is DELETED.
The Court PARTLY GRANTS the motion to register attorneys lien filed by Atty.

Macarupung Dibaratun, and FIXES Atty. Dibaratuns attorneys fees on the basis
of quantummeruit at 10% of the principal award of P113,532,500.00.

The motion to register attorneys lien of Atty. Manuel D. Ballelos is PARTLY
GRANTED, and Atty. Ballelos is DECLARED ENTITLED TO RECOVER from Cebu,
Batowa-an, Sayana, Nasser, Manta and Edgar, all surnamed Macabangkit, the
amount of P5,000.00 as attorneys fees on the basis of quantum meruit.
Costs of suit to be paid by the petitioner.
SO ORDERED.

LUCAS P. BERSAMIN
Associate Justice
WE CONCUR:

RENATO C. CORONA
Chief Justice
Chairperson
TERESITA J. LEONARDO-DE CASTRO MARIANO C. DEL CASTILLO
Associate Justice
CERTIFICATION

conclusions in the above Decision had been reached in consultation before the
RENATO C. CORONA
Chief Justice
*
Substituted by Josefina Salvador Macabangkit, his surviving wife, and children Malic, Paisal, Michelle and
Mongkoy, all surnamed Macabangkit, per the Resolution dated October 20, 2008, at rollo, p. 526.
[1]
Rollo, pp. 51-63; penned by Associate Justice Arturo G. Tayag (retired), with Associate Justice Estela M. Perlas-
Bernabe and Associate Justice Edgardo A. Camello concurring.
[2]
CA rollo, p. 22.
[3]
Original Records, pp. 1-6; the suit was docketed as Civil Case No. 4094 and was entitled Heirs of Macabangkit
Sangkay, namely: Cebu, Batowa-an, Sayana, Nasser, Manta, Edgar, Putri, Mongkoy, and Amir, all surnamed
Macabangkit, v. National Power Corporation.
[4]
Id., pp. 43-45.
[5]
Id., p. 64.
[6]
Id., pp. 143-163.
[7]
Id., p. 164.
[8]
Id., p. 175.
[9]
Id., pp. 165-170.
[10]
Id., pp. 200-202.
[11]
See Heirs of Macabangkit Sangkay v. National Power Corporation, G.R. No. 141447, May 4, 2006, 489 SCRA
401.
[12]
Rollo, pp. 62-63.
[13]
National Power Corporation v. Court of Appeals, G.R. No. 106804, August 12, 2004, 436 SCRA 195, 208.
[14]
Rollo, pp. 59-66.
[15]
TSN dated March 2, 1999, pp. 16-32.
[16]
Id., pp. 10-11.
[17]
Id., pp. 58-59.
[18]
Id., pp. 80-81.
[19]
Id., pp. 102-106.
[20]
Rollo, p. 60.
[21]
Id., p. 62.
[22]
Article 635. All matters concerning easements established for public or communal use shall be governed by the
special laws and regulations relating thereto, and, in the absence thereof, by the provisions of this Title (550).

[23]
Section 3. xxx
xxx
(g). To construct, operate and maintain power plants, auxiliary plants, dams, reservoirs, pipes, mains, transmission
lines, power stations and substations, and other works for the purpose of developing hydraulic power from any river,
creek, lake, spring and waterfall in the Philippines and supplying such power to the inhabitants thereof; xxx.
[24]
Philippine Telegraph & Telephone Corporation v. National Labor Relations Commission, G.R. No. 147002,
April 15, 2005, 456 SCRA 264, 279; David v. Cordova, G.R. No. 152992, July 28, 2005, 464 SCRA 384, 402.
[25]
National Food Authority (NFA) v. Masada Security Agency, Inc., G.R. No. 163448, March 8, 2005, 453 SCRA
70, 79.
[26]
According to 29A CJS, Eminent Domain, 381: Inverse condemnation is a cause of action against a
governmental defendant to recover the value of property which has been taken in fact by the governmental
defendant, even though no formal exercise of the power of eminent domain has been attempted by the taking
agency. While the typical taking occurs when the government acts to condemn property in the exercise of its power
of eminent domain, the entire doctrine of inverse condemnation is predicated on the proposition that a taking may
occur without such formal proceedings. The phrase inverse condemnation, as a common understanding of that
phrase would suggest, simply describes an action that is the inverse or reverse of a condemnation proceeding.
[27]
18, 2004, 437 SCRA 60, 68.
[28]
Article 19. Every person must, in the exercise of his rights and in the performance of his duties, act with justice,
give everyone his due, and observe honesty and good faith.
[29]
Cebu Country Club, Inc. v. Elizagaque, G.R. No. 160273, January 18, 2008, 542 SCRA 65, 74-75.
[30]
Constitution, Article III, Section 9.
[31]
29A CJS, Eminent Domain, 381, citing State v. Hollis, 379 P.2d 750, 93 Ariz. 200; Marin Municipal Water
District v. City of Mill Valley, 1 Dist., 249 Cal. Rptr. 469, 202 C.A.3d 1161;
[32]
29A CJS, Eminent Domain, 381, citing Schultz v. United States, Cl.Ct., 5 Cl.Ct. 412; Rose v. City of Coalinga, 5
Dist., 236 Cal. Rptr. 124, 190 C.A. 3d 1627; Adams v. City of Atlanta, 322 S.E.2d 730, 253 Ga. 581; State v.
Malone, Civ. App., 168 S.W.2d 292.
[33]
G.R. No. 168732, June 29, 2007, 526 SCRA 149.
[34]
Id., p. 163.
[35]
Id., pp. 163-164; See also National Power Corporation v. Manubay Agro-Industrial Development Corporation,
G.R. No. 150936, August 18, 2004, 437 SCRA 60, where it was held that even an easement of right-of-way that
effectively limits the owners right to use the land for an indefinite period of time, thus depriving the owner of the
normal use of the land, warranted the payment of just compensation that must be neither more nor less than the
monetary equivalent of the land.
[36]
29A CJS, Eminent Domain,82, citing Stearns v. Smith, D.C.Tex, 551 F. Supp. 32; Wright v. Shugrue, 425 A.2d
549, 178 Conn. 710; Horstein v. Barry, App., 560 A.2d 530; and Gasque v. Town of Conway, 8 S.E.2d 871, 194
S.C. 15.
[37]
Id., citing United States v. General Motors Corporation, Ill., 65 S Ct. 357, 323 US 373, 89 L. Ed. 311;
and Midwest Video Corporation v. F.C.C., C.A.8, 571 F.2d 1025, affirmed 99 S.Ct. 1435, 440 US 689, 59 L. E.2d
692.
[38]
Id., citing United States v. Dickinson, W.Va., 67 S.Ct. 1382, 331 US 745, 91 L.Ed. 1789; Portsmouth Harbor
Land & Hotel Co. v. United States, Ct.Cl., 43 S.Ct. 135, 260 US 327, 67 L.Ed. 287; Bernstein v. Bush, 177 P.2d 913,
29 C.2d 773.
[39]
Id., citing Eaton v. Boston, C. & M.R. Co., 51 N.H.504; Lea v. Louisville, & N.R. Co., 188 S.W. 215, 135 Tenn.
560.
[40]
Id., citing Frustuck v. City of Fairfax, 28 Cal. Rptr. 357, 212 C.A.2d 345; Midgett v. North Carolina State
Highway Commission, 132 S.E.2d 599, 260 N.C. 241; Morrison v. Clakamas Country, 18 P.2d 814, 141 Or. 564.
[41]
Original Records, pp. 161-162.
[42]
G.R. No. 113194, March 11, 1996, 254 SCRA 577.
[43]
Id., p. 588.
[44]
G.R. No. 161836, February 28, 2006, 483 SCRA 619.
[45]
Apo Fruits Corporation v. Land Bank of the Philippines, G.R. No. 164195, October 12, 2010, 632 SCRA
727; Curata v. Philippine Ports Authority, G.R. No. 154211-12, June 22, 2009, 590 SCRA 214; Philippine Ports
Authority v. Rosales-Bondoc, G.R. No. 173392, August 24, 2007, 531 SCRA 198; Land Bank v. Imperial, G.R. No.
157753, February 12, 2007, 515 SCRA 449; Republic v. Court of Appeals, G.R. No. 147245, March 31, 2005, 454
SCRA 516; Land Bank v. Wycoco, G.R. No. 140160, January 13, 2004, 419 SCRA 67; Reyes v. National Housing
Authority, G.R. No. 147511, January 20, 2003, 395 SCRA 494; Republic v. Court of Appeals, G.R. No. 146587, July
2, 2002, 383 SCRA 611; Eastern Shipping Lines, Inc. v. Court of Appeals, G.R. No. 97412, July 12, 1994, 234
SCRA 78.
[46]
579 SCRA 509 G.R. No. 120592, March 14, 1997, 269 SCRA 733, 740. The ruling has been cited in Masmud v.
National Labor Relations Commission (First Division), G.R. No. 183385, February 13, 2009, 579 SCRA 509
and Orocio v. Anguluan, G.R. Nos. 179892-93, January 30, 2009, 577 SCRA 53, among others.
[47]
Ballesteros v. Abion, February 9, 2006, 143361, 482 SCRA 23, 39; Car Cool Philippines, Inc. v. Ushio Realty
and Development Corporation, G.R. No. 138088, January 23, 2006, 479 SCRA 404; Filipinas Broadcasting
Network, Inc. v. Ago Medical and Educational Center-Bicol Christian College of Medicine, G.R. No. 141994,
January 17, 2005, 448 SCRA 413.
[48]
J Marketing Corporation v. Sia, Jr., 349 Phil 513, 518; 285 SCRA 580, 584.
[49]
Frias v. San Diego-Sison, G.R. No. 155223, April 3, 2009, 520 SCRA 244, 259-260; Country Bankers Insurance
Corporation v. Lianga Bay and Community Multi-purpose Cooperative, Inc., G.R. No. 136914, January 25, 2002,
374 SCRA 653; Ibaan Rural Bank, Inc. v. Court of Appeals, G.R. No. 123817, December 17, 1999, 321 SCRA
88; Morales v. Court of Appeals, G.R. No. 117228, June 19, 1997, 274 SCRA 282, 309; Philippine Air Lines v.
Miano, G.R. No. 106664, March 8, 1995, 242 SCRA 235, 240; Firestone Tire & Rubber Co. of the Phils. v. Ines
Chaves & Co., Ltd., No. L-17106, October 19, 1966, 18 SCRA 356,358.
[50]
Article 2208. In the absence of stipulation, attorney's fees and expenses of litigation, other than judicial costs,
cannot be recovered, except:
(1) When exemplary damages are awarded;
(2) When the defendants act or omission has compelled the plaintiff to litigate with third persons or to incur
expenses to protect his interest;
(3) In criminal cases of malicious prosecution against the plaintiff;
(4) In case of a clearly unfounded civil action or proceeding against the plaintiff;
(5) Where the defendant acted in gross and evident bad faith in refusing to satisfy the plaintiff's plainly valid,
just and demandable claim;
(6) In actions for legal support;
(7) In actions for the recovery of wages of household helpers, laborers and skilled workers;
(8) In actions for indemnity under workmen's compensation and employer's liability laws;
(9) In a separate civil action to recover civil liability arising from a crime;
(10) When at least double judicial costs are awarded;
(11) In any other case where the court deems it just and equitable that attorneys fees and expenses of
litigation should be recovered.
In all cases, the attorney's fees and expenses of litigation must be reasonable.
[51]
Fores vs. Miranda, 105 Phil., 266.
[52]
Felsan Realty & Development Corporation v. Commonwealth of Australia, G.R. No. 169656, October 11, 2007,
535 SCRA 618, 631-632; ABS-CBN Broadcasting Corporation v. Court of Appeals, G.R. No. 128690, January 21,
1999, 301 SCRA 572, 601.
[53]
Villanueva v. Salvador, G. R. No. 139436, January 25, 2006, 480 SCRA 39, 52; Mindex Resources Development
v. Morillo, G.R. No. 138123, March 12, 2002, 379 SCRA 144, 157; Valiant Machinery & Metal Corporation v.
NLRC, G.R. No. 105877, January 25, 1996, 252 SCRA 369; Scott Consultants and Resource Development
Corporation v. Court of Appeals, G.R. No. 112916, March 16, 1995, 242 SCRA 393, 406.
[54]
See De Ouano v. Republic, G.R. No. 168770, February 9, 2011; Brent Hospital Inc. v. NLRC, G.R. No. 117593,
July 10, 1998, 292 SCRA 304 (the Court deleted the award of attorneys fees although not raised as an issue).
[55]
CA Rollo, p. 154.
[56]
Id., pp. 162-163.
[57]
Id., pp. 156-160.
[58]
Id., pp. 164-165.
[59]
Id., pp. 166-168.
[60]
Id., pp. 181-185.
[61]
Id., pp. 186-187.
[62]
Id., pp. 213-219.
[63]
Rollo, pp. 141-154.
[64]
Id., pp. 267-268.
[65]
Id., pp. 328-347.
[66]
Id., pp. 180-181.
[67]
Id., pp. 430-435.
[68]
Amir Macabangkit also denied having authorized one Mrs. Manta Macabangkit Lao to represent him in
negotiating, collecting and receiving his share in the pending action, and thereby denied, revoked and terminated any
Special Power of Attorney in favor of Lao.
[69]
Rollo, pp. 493-494.
[70]
Id., pp. 495-505.
[71]
Agpalo, Legal and Judicial Ethics (2009), p. 408.
[72]
Garcia v. Bala, A.C. No. 5039, November 25, 2005, 476 SCRA 85, 95.
[73]
Pineda v. De Jesus, G.R. No. 155224, August 23, 2006, 499 SCRA 608, 612.
[74]
Garcia v. Bala, supra note 72.
[75]
Agpalo, op. cit., p. 418.
[76]
G.R. No. 120592, March 14, 1997, 269 SCRA 733, 753-754.
[77]
Rollo, pp. 143-144.
[78]
Atty. Ballelos right to represent Mongkoy was terminated by Mongkoys death. Thereafter, the heirs of Mongkoy
called on Atty. Dibaratun for their appropriate substitution and representation in the action.
[79]
Agpalo, op. cit., p. 397.

SECOND DIVISION

Petitioner,

Present:

- versus - QUISUMBING, J.,
Chairperson,
CARPIO MORALES,
TINGA,
VELASCO, JR., and
BENJAMIN ONG CO, BRION, JJ.
Respondent.
Promulgated:

February 10, 2009

x-----------------------------------------------------------------------------------x
DECISION
TINGA, J.:

Before us is a Rule 45 petition[1] which seeks the reversal of the Decision[2] and
Resolution[3] of the Court of Appeals in CA-G.R. No. 79211. The Court of Appeals
Decision affirmed the Partial Decision[4] of the Regional Trial Court (RTC) of San
Fernando, Pampanga, Branch 41 in Civil Case No. 12281, fixing the compensation
due respondent following the expropriation of his property for the construction of
petitioners power transmission lines.

Petitioner was established by R.A. No. 6395 to undertake the development of
hydroelectric generation of power and the production of electricity from nuclear,
geothermal and other sources, as well as the transmission of electric power on a
nationwide basis.[5] Its charter grants to petitioner, among others, the power to
exercise the right to eminent domain.[6]

On 27 June 2001, petitioner filed a complaint[7] with the RTC of San Fernando,
Pampanga, for the acquisition of an easement of right-of-way over three (3) lots at
Barangay Cabalantian, Bacolor, Pampanga with a total area of 575 square meters
belonging to respondent, in connection with the construction of its transmission
lines for its Lahar Affected Transmission Line Project (Lahar Project).

On 25 March 2002, petitioner obtained a writ of possession and on 15 April
2002 it took possession of the property.

At the pre-trial conference, respondent conceded the necessity of
expropriation. Thus, the sole issue for litigation revolved around the determination
of just compensation.

The RTC appointed three (3) commissioners[8] to determine the fair market
value of the property as of 15 April 2002. Commissioners Dayrit and Garcia
submitted their joint report[9] wherein they appraised the value of the property
at P1,900.00 per square meter or a total of P1,179,000.00, while Commissioner
Abcejo submitted his Commissioner's Report[10] pegging the value of the property
at P875.00 per square meter.

The RTC rendered its Partial Decision,[11] wherein it declared the validity of the
expropriation and ordered petitioner to pay the sum of P1,179,000.00, with interest
at 6% per annum beginning 15 April 2002, the date of actual taking, until full
payment. It adopted the findings of Commissioners Dayrit and Garcia as more
reliable since their report was based on established facts and they had evaluated the
market, location and physical characteristics of the property while Commissioner
Abcejos report had merely taken the average between the Provincial Appraisal
Report (P1,500.00/sq.m.) and the Land Bank Appraisal Report (P250.00/sq.m.)
that were both done in 1998.

Not satisfied, petitioner filed an appeal with the Court of Appeals.

On 20 October 2004, the Court of Appeals rendered its Decision[12] holding
petitioner liable to pay the full fair market value at the time of actual taking, with
interest at 6% per annum from 15 April 2002. To determine the actual valuation of
the property, the Court of Appeals ordered the RTC to appoint a new set of
disinterested commissioners.

Petitioner filed a motion for partial reconsideration, questioning the order to pay
the full fair market value computed as of the date of its actual possession of the
property. The Court of Appeals denied the motion for partial reconsideration;
hence, the present petition.

On 11 April 2007,[13] the Court required the parties to submit their supplemental
memoranda discussing the following issues:
Is Republic Act No. 8974 (2000), otherwise known as An Act to Facilitate
the Acquisition of Right-of-Way, site or Location for National Government
Infrastructure Projects and for other purposes, applicable to actions for eminent
domain filed by the National Power Corporation (Napocor) pursuant to its charter
(Rep. Act. No. 6395, as amended) for the purpose of constructing power
transmission lines on the properties subject of said actions?

Assuming that Rep. Act No. 8974 is applicable to said expropriation
proceedings:

a. What are the effects, if any, of Rep. Act No. 8974 and its implementing Rules on
the Standards for the determination of the provisional value and the final amount of
just compensation in the present case, including on the question of whether the just
compensation should be reckoned from the date of the filing of the complaint since
such date preceded the date of the taking of the property in this case?

b. Is the 10% limit on the amount of just compensation for the acquisition of right-
of-way easements on lands or portions thereof to be traversed by the transmission
lines, as provided for in Section 3-a(b) of Napocor's charter, still in effect in light of
the valuation standards provided for in Rep. Act No. 8974 and its implementing
rules?

Eminent domain is the inherent power of a sovereign state to appropriate
private property to particular use to promote public welfare.[14] In the exercise of its
power of eminent domain, just compensation must be given to the property owner
to satisfy the requirements of Sec. 9, Art. III[15] of the Constitution. Just
compensation is the fair market value of the property.[16] Fair market value is that
sum of money which a person desirous but not compelled to buy, and an owner
willing but not compelled to sell, would agree on as a price to be given and
received therefor.[17] Judicial determination is needed to arrive at the exact amount
due to the property owner.
The power to expropriate is legislative in character and must be expressly
conferred by statute. Under its charter, petitioner is vested with the power of
eminent domain.

The first aspect of the compensation issue is whether what should be paid is
the full fair market value of the property or a mere easement fee. Petitioner relies
on Sec. 3A[18] of R.A. No. 6395, as amended, which provides that only an easement
fee equivalent to 10% of the market value shall be paid to affected property
owners. Based on this amendatory provision, petitioner is willing to pay an
easement fee of 10% for the easement of right-of-way it acquired for the
installation of power transmission lines.

As intimated in the Courts 2007 Resolution, the case at bar is further complicated
by the enactment of R.A. No. 8974 before the filing of the expropriation complaint.

R.A. No. 8974,[19] entitled An Act To Facilitate The Acquisition Of Right-Of-Way,
Site Or Location For National Government Infrastructure Projects And For Other
Purposes, defines national government projects as follows:

Sec. 2. National Government ProjectsThe term national government
projects shall refer to all national government infrastructure, engineering
works and service contracts, including projects undertaken by
government-owned and -controlled corporations, all projects covered by
Republic Act No. 6957, as amended by Republic Act No. 7718, otherwise
known as the Build-Operate-and-Transfer Law, and other related and
necessary activities, such as site acquisition, supply and/or installation of
equipment and materials, implementation, construction, completion,
operation, maintenance, improvement, repair and rehabilitation, regardless
of source of funding.

Petitioner expropriated respondents property for its Lahar Project, a project
for public use.[20] In Republic v. Gingoyon (Gingoyon), we observed that R.A. No.
8974 covers expropriation proceedings intended
for national government infrastructure projects.[21] The Implementing

Rules and Regulations[22] of R.A. No. 8974 explicitly include power generation,
transmission and distribution projects among the national government projects
covered by the law. There is no doubt that the installation of transmission lines is
important to the continued growth of the country. Electricity moves our economy,
it is a national concern. R.A. No. 8974 should govern the expropriation of
respondent's property since the Lahar Project is a national government project.

Significantly, Gingoyon is explicit authority that R.A. No. 8974 applies with
respect to substantive matters covered by it to the exclusion of Rule 67 in cases
when expropriation is availed of for a national government project. We noted
in Gingoyon:

It is the plain intent of Rep. Act No. 8974 to supersede the system of deposit
under Rule 67 with the scheme of immediate payment in cases involving national
government infrastructure projects.

xxx

It likewise bears noting that the appropriate standard of just compensation is a
substantive matter. It is well within the province of the legislature to fix the
standard, which it did through the enactment of Rep. Act No. 8974. Specifically,
this prescribes the new standards in determining the amount of just compensation
in expropriation cases relating to national government infrastructure projects, as
well
as the manner of payment thereof. At the same time, Section 14 of the

Implementing Rules recognizes the continued applicability of Rule 67 on
procedural aspects when it provides all matters regarding defenses and objections
to the complaint, issues on uncertain ownership and conflicting claims, effects of
appeal on the rights of the parties, and such other incidents affecting the
complaint shall be resolved under the provisions on expropriation of Rule 67 of
the Rules of Court.[23]

The right of a property owner to receive just compensation prior to the
actual taking of the property by the State is a proprietary right which Congress can
legislate on.[24]R.A. No. 8974 being applicable in this case, the government agency
involved must comply with the guidelines set forth in Sec. 4[25] of R.A. No. 8974.

As earlier mentioned, Section 3A of R.A. No. 6395, as amended, substantially
provides that properties which will be traversed by transmission lines will only be
considered as easements and just compensation for such right of way easement
shall not exceed 10 percent of the market value.[26] However, this Court has
repeatedly ruled that when petitioner takes private property to construct
transmission lines, it is liable to pay the full market value upon proper
determination by the courts.[27]

In National Power Corporation v. Manubay Agro-Industrial Development
Corporation,[28] we held that the taking of property was purely an easement of a
right of way, but we nevertheless ruled that the full market value should be paid
instead of an easement fee.[29] This Court is mindful of the fact that the construction
of the transmission lines will definitely have limitations and will indefinitely
deprive the owners of the land of their normal use.
The presence of transmission lines undoubtedly restricts respondents use of
his property. Petitioner is thus liable to pay respondent the full market value of the
property.

The second aspect of the compensation issue relates to the reckoning date for
the determination of just compensation. Petitioner contends that the computation
should be made as of 27 June 2001, the date when it filed the expropriation
complaint, as provided in Rule 67. We agree.

Rule 67 clearly provides that the value of just compensation shall be determined as
of the date of the taking of the property or the filing of the complaint, whichever
came first.[30] In B.H. Berkenkotter & Co. v. Court of Appeals, we held that:
It is settled that just compensation is to be ascertained as of the time of
the taking, which usually coincides with the commencement of the expropriation
proceedings. Where the institution of the action precedes entry into the
property, the just compensation is to be ascertained as of the time of the
filing of the complaint.[31] (emphasis supplied)

Typically, the time of taking is contemporaneous with the time the petition is filed.
The general rule is what is provided for by Rule 67. There are exceptionsgrave
injustice to the property owner,[32] the taking did not have color of legal authority,
[33]
the taking of the property was not initially for expropriation[34] and the owner
will be given undue increment advantages because of the expropriation.
[35]
However, none of these exceptions are present in the instant case.

Moreover, respondents reliance on the ruling in City of Cebu v. Spouses
Dedamo,[36] is misplaced since the applicable law therein was the Local
Government Code which explicitly provides that the value of just compensation
shall be computed at the time of taking.[37]

Based on the foregoing, the reckoning date for the determination of the
amount of just compensation is 27 June 2001, the date when petitioner filed its
expropriation complaint.

As a final note, the function for determining just compensation remains
judicial in character. In Export Processing Zone Authority v. Dulay,
[38]
and National Power Corporation v. Purefoods,[39] we ruled:

The determination of just compensation in eminent domain cases is a judicial
function. The executive department or legislature may make the initial
determinations but when a party claims a violation of the guarantee in the Bill of
Rights that private property may not be taken for public use without just
compensation, no statute, decree, or executive order can mandate its own
determination shall prevail over the court's findings. Much less can the courts be
precluded from looking into the just-ness of the decreed compensation.[40]

Thus, the lower court must use the standards set forth in Sec. 5[41] of R.A.
No. 8974 to arrive at the amount of just compensation.

To recapitulate, R.A. No. 8974 applies to properties expropriated for the
installation of petitioners power transmission lines. Also, petitioner is liable to pay
the full amount of the fair market value and not merely a 10 percent easement fee
for the expropriated property. Likewise, the value of the property should be
reckoned as of 27 June 2001, the date of the filing of the complaint in compliance
with Rule 67. Lastly, respondent failed to assign as error the Court of Appeals
ruling regarding the need to appoint a new set of commissioners.[42] However, even
if respondent had assigned the matter as error, it would still be denied since the
conflicting appraisals submitted by the commissioners were not both reckoned as
of the date of filing of the complaint. Thus, there is need to remand this case in line
with the appellate courts valid directive for the new set of commissioners.

WHEREFORE the petition is partially GRANTED. The Decision of the
Court of Appeals is AFFIRMED insofar as it ordered petitioner to pay the full
amount of the fair market value of the property involved as just compensation and
is REVERSED insofar as it directed that such compensation be computed as of
the date of taking instead of earlier which is the date of filing of the complaint.
This case is REMANDED to the trial court for the appointment of a new set of
commissioners in accordance with Sec. 8, Rule 67 of the Rules of Court and the
determination of just compensation in conformity with this
Decision. The Regional Trial Court of San Fernando City, Pampanga is directed to
conduct, complete and resolve the further proceedings with deliberate dispatch.

SO ORDERED.

DANTE O. TINGA Associate
Justice

WE CONCUR:

Associate Justice
Chairperson


ARTURO D. BRION
Associate Justice

A TTESTATION

Courts Division.

Associate Justice

CERTIFICATION

above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Courts Division.

REYNATO S. PUNO
Chief Justice

f[1]Rollo, pp. 9-26.

[2]
Dated 20 October 2004, penned by Associate Justice Conrado M. Vazquez and concurred in by Associate
Justices Edgardo F. Sundiam and Fernanda Lampas Peralta; id. at 31-41.

[3]
Dated 19 January 2005, penned by Associate Justice Conrado M. Vazquez and concurred in by Associate
Justices Edgardo F. Sundiam and Fernanda Lampas Peralta; id. at 42-44.

[4]
Dated 19 February 2003, penned by Judge Divina Luz P. Aquino-Simbulan; id. at 93-98.

[5]
Republic Act No. 6395, Sec. 2.

[6]
Republic Act No. 6395, Sec. 3(j) To exercise the right of eminent domain for the purpose of this Act in
the manner provided by law for instituting condemnation proceedings by the national, provincial and municipal
governments;

[7]
Rollo, pp. 43-44.

[8]
The following were appointed as commissioners, Provincial Assessor Arturo Dayrit as chairman, while
Engineer Moiselito Abcejo was the representative of NPC, and realtor Conrado Garcia was Ong Co's representative,
However, on 08 August 2002, Conrado Garcia was replaced by Eller Garcia.

[9]
Dated 29 October 2002; rollo, pp. 75-86.

[10]
Dated 31 October 2002; id. at 87-89.

[11]
Supra note 4.

[12]
Supra note 2.

[13]
See Resolution of the Court. id at 207-208.

[14]
Republic v. Court of Appeals, G.R. No. 147245, 31 March 2005, 454 SCRA 516.

[15]
Sec. 9Private property shall not be taken for public use without just compensation.

[16]
National Power Corporation v. Igmedio, 452 Phil. 649, 663 (2003).

[17]
City of Manila v. Estrada, 25 Phil. 208, 215 (1913).

[18]
Presidential Decree No. 938 (1976). Sec. 3AIn acquiring private property or private property rights
through expropriation proceedings where the land or portion thereof will be traversed by the transmission lines, only
a right-of-way easement thereon shall be acquired when the principal purpose for which such land is actually
devoted will not be impaired, and where the land itself or portion thereof will be needed for the projects or works,
such land or portion thereof as necessary shall be acquired.


(a) With respect to the acquired land or portion thereof, not to exceed the market value
declared by the owner or administrator or anyone having legal interest in the property, or such market
value as determined by the assessor, whichever is lower.

b) With respect to the acquired right-of-way easement over the land or portion thereof, not to
exceed ten percent (10%) of the market value declared by the owner or administrator or anyone
having legal interest in the property, or such market value as determined by the assessor whichever is
lower.

improvement, as the case may be, shall be compensated for the improvements actually damaged by the construction
and maintenance of the transmission lines, in an amount not exceeding the market value thereof as declared by the
owner or administrator, or anyone having legal interest in the property, or such market value as determined by the
assessor whichever is lower; Provided, that in cases any buildings, houses and similar structures are actually
affected by the right-of-way for the transmission lines, their transfer, if feasible, shall be effected at the expense of
the Corporation; Provided, further, that such market value prevailing at the time the Corporation gives notice to the
landowner or administrator or anyone having legal interest in the property, to the effect that his land or portion
thereof is needed for its projects or works shall be used as basis to determine the just compensation therefor.

[19]
ENACTED on 7 November 2000.

[20]
Complaint filed by NPC; Rollo, p. 48.

[21]
Republic v. Gingoyon, G.R. No. 166429, 19 December 2005, 478 SCRA 479, 515.

[22]
Implementing Rules and Regulations of R.A. No 8974 (2001)

Sec. 2. Definition of Terms.

xxx

(d) National government projectsbased on Section 2 of the Act, refer to all to all national government
infrastructure, engineering works, and service contracts, including all projects covered by Republic Act No. 6957, as
amended by Republic Act No. 7718, otherwise known as the Build-Operate-Transfer Law x x x these projects shall
include, but not limited, to x x x steam and power generation, transmission and distribution x x x

[23]
Republic v. Gingoyon, G.R. No. 166429, 19 December 2005, 478 SCRA 474, 519-520.

[24]
Resolution denying Motion for Reconsideration in Republic v. Gingoyon, G.R. No. 166429, 1 February
2006, 481 SCRA 457.

[25]
Section 4. Guidelines for Expropriation Proceedings.Whenever it is necessary to acquire real property for
the right-of-way, site or location for any national government infrastructure project through expropriation, the
appropriate implementing agency shall initiate the expropriation proceedings before the proper court under the
following guidelines:

(a) Upon the filing of the complaint, and after due notice to the defendant, the implementing
agency shall immediately pay the owner of the property the amount equivalent to the sum of (1) one
hundred percent (100%) of the value of the property based on the current relevant zonal valuation of
the Bureau of Internal Revenue (BIR); and (2) the value of the improvements and/or structures as
determined under Section 7 hereof;

(b) In provinces, cities, municipalities and other areas where there is no zonal valuation, the BIR
is hereby mandated within the period of sixty (60) days from the date of filing of the expropriation
case, to come up with a zonal valuation for said area; and

(c) In case the completion of a government infrastructure project is of utmost urgency and
importance, and there is no existing valuation of the area concerned, the implementing agency shall
immediately pay the owner of the property its proferred value taking into consideration the standards
prescribed in Section 5 hereof.

Upon compliance with the guidelines abovementioned, the court shall immediately issue to the
implementing agency an order to take possession of the property and start the implementation of the project.

Before the court can issue a Writ of Possession, the implementing agency shall present to the court a
certificate of availability of funds from the proper official concerned.

In the event that the owner of the property contests the implementing agency's proferred value, the court
shall determine the just compensation to be paid the owner within sixty (60) days from the date of filing of the
expropriation case. When the decision of the court becomes final and executory, the implementing agency shall pay
the owner the difference between the amount already paid and the just compensation as determined by the court.

[26]
Supra note 18.

[27]
National Power Corporation v. Gutierrez, G.R. No. 160077, 18 January 1991, 193 SCRA 1; National
Power Corporation v. Bongbong, G.R. No. 164079, 3 April 2007, 520 SCRA 290; National Power Corporation v.
Chiong, 452 Phil. 149 (2003); National Power Corporation v. Aguirre-Paderanga, G.R. No. 155065, 28 July 2005,
464 SCRA 481

[28]
G.R. No. 150936, 18 August 2004, 437 SCRA 60.
[29]
Id. at 67.

[30]
RULES OF COURT, Rule 67, Sec. 4. provides:

If the objections to and the defenses against the right of the plaintiff to expropriate the property are
overruled, or when no party appears to defend as required by this Rule, the court may issue an order of expropriation
declaring that the plaintiff has a lawful right to take the property sought to be expropriated, for the public use or
purpose described in the complaint, upon payment of just compensation to be determined as of the date of the taking
of the property or the filing of the complaint whichever came first.
xxx

[31]
G.R. No. 89980, 14 December 1992, 216 SCRA 584,587, citing Republic v. Philippine National Bank, 1
SCRA 957 and reiterated in National Power Corporation v. Dela Cruz, G.R. No. 156093, 2 February 2007, 514
SCRA 56; Romonafe Corporation v. National Power Corporation, G.R. No. 168122, 30 January 2001, 513 SCRA
425, 429.

[32]
Heirs of Mateo Pidacan and Romana Eigo v. Air Transportation Office (ATO), G.R. No. 162779, 15
June 2007, 524 SCRA 679, 687.
[33]
National Power Corporation v. Ibrahim, G.R. No. 168732, 29 June 2007, 526 SCRA 149, 169
reiterating National Power Corporation v. Court of Appeals, 254 SCRA 577.

[34]
Tan v. Republic, G.R. No. 170740, 25 May 2007, 523 SCRA 203, 213.

[35]
Provincial Government of Rizal v. Caro de Araullo, 58 Phil. 308 (1933).

[36]
431 Phil. 525 92002).

[37]
Republic Act No. 7160(1991), Sec. 19. Eminent Domain A local government unit may, through its chief
executive and acting pursuant to an ordinance, exercise the power of eminent domain for public use, or purpose,
or welfare for the benefit of the poor and the landless, upon payment of just compensation, pursuant to the
provisions of the Constitution and pertinent laws: Provided, however, that the power of eminent domain may not
be exercised unless a valid and definite offer has been previously made to the owner, and such offer was not
accepted: Provided, further, that the local government unit may immediately take possession of the property
upon the filing of the expropriation proceedings and upon making a deposit with the proper court of at least
fifteen percent (15%) of the fair market value of the property based on the current tax declaration of the property
to be expropriated. Provided, finally, That, the amount to be paid for the expropriated property shall be
determined by the proper court, based on the fair market value at the time of the taking of the property.

[38]
Export Processing Zone Authority v. Dulay, 233 Phil. 313 (1987).

[39]
National Power Corporation v. Purefoods Corporation, G.R. No. 160725, 12 September 2008.

[40]

[41]
Sec. 5. Standards for the Assessment of the Value of the Land Subject of Expropriation Proceedings or
Negotiated Sale.In order to facilitate the determination of just compensation, the court may consider, among other
well-established factors, the following relevant standards:

(a) The classification and use for which the property is suited;

(b) The developmental costs for improving the land;

(c) The value declared by the owners;

(d) The current selling price of similar lands in the vicinity;

(e) The reasonable disturbance compensation for the removal and/or demolition of certain
improvements on the land and for the value of improvements thereon;

(f) The size, shape, or location, tax declaration and zonal valuation of the land;

(g) The price of the land as manifested in the ocular findings, oral as well as documentary
evidence presented; and

(h) Such facts and events as to enable the affected property owners to have sufficient funds to
acquire similarly-situated lands of approximate areas as those required from them by the government,
and thereby rehabilitate themselves as early as possible.

[42]
RULES OF COURT, Rule 51, Sec. 8No error which does not affect the jurisdiction over the subject
matter or the validity of the judgment appealed from or the proceedings therein will be considered unless stated in the
assignment of errors, or closely related to or dependent on an assigned error and properly argued in the brief, save as
the court may pass upon plain errors and clerical errors.
THIRD DIVISION
[G.R. No. 124699. July 31, 2003]
BOGO-MEDELLIN MILLING CO., INC., petitioner, vs. COURT OF

APPEALS AND HEIRS OF MAGDALENO VALDEZ
SR., respondents.
DECISION
CORONA, J.:
This is an appeal by certiorari under Rule 45 of the Rules of Court seeking to annul

and set aside the decision dated November 17, 1995 of the Court of Appeals, Tenth
[1]
Division, which reversed the decision dated November 27, 1991 of the Regional Trial
[2]
Court of Cebu City, Branch IX, which ruled in favor of herein petitioner, Bogo-Medellin
Milling Company, Inc. and dismissed herein private respondents' complaint for payment
of compensation and/or recovery of possession of real property and damages with
application for restraining order or preliminary injunction; and its resolution dated March
2, 1996 denying petitioner's motion for reconsideration.
The antecedent facts follow.
Magdaleno Valdez, Sr., father of herein private respondents Sergio Valdez,
Angelina Valdez-Novabos, Teresita Argawanon-Mangubat and Daylinda Argawanon-
Melendres (hereafter the heirs), purchased from Feliciana Santillan, on December 9,
1935, a parcel of unregistered land covered by Tax Declaration No. 3935 with an area
of one hectare, 34 ares and 16 centares, located in Barrio Dayhagon, Medellin, Cebu.
He took possession of the property and declared it for tax purposes in his name.
[3] [4]
Prior to the sale, however, the entire length of the land from north to south was
already traversed in the middle by railroad tracks owned by petitioner Bogo-Medellin
Milling Co., Inc. (hereafter Bomedco). The tracks were used for hauling sugar cane from
the fields to petitioners sugar mill.
When Magdaleno Valdez, Sr. passed away in 1948, herein private respondents
inherited the land. However, unknown to them, Bomedco was able to have the disputed
middle lot which was occupied by the railroad tracks placed in its name in the Cadastral
Survey of Medellin, Cebu in 1965. The entire subject land was divided into three,
namely, Cadastral Lot Nos. 953, 954 and 955. Lot Nos. 953 and 955 remained in the
name of private respondents. However, Lot No. 954, the narrow lot where the railroad
tracks lay, was claimed by Bomedco as its own and was declared for tax purposes in its
name. [5]
It was not until 1989 when private respondents discovered the aforementioned
claim of Bomedco on inquiry with the Bureau of Lands. Through their lawyer, they
immediately demanded the legal basis for Bomedco's claim over Cadastral Lot No. 954
but their letter of inquiry addressed to petitioner went unheeded, as was their
subsequent demand for payment of compensation for the use of the land. [6]
On June 8, 1989, respondent heirs filed a Complaint for Payment of Compensation

and/or Recovery of Possession of Real Property and Damages with Application for
Restraining Order/Preliminary Injunction against Bomedco before the Regional Trial
Court of Cebu. Respondent heirs alleged that, before she sold the land to Valdez, Sr.
[7]
in 1935, Santillan granted Bomedco, in 1929, a railroad right of way for a period of 30
years. When Valdez, Sr. acquired the land, he respected the grant. The right of way
expired sometime in 1959 but respondent heirs allowed Bomedco to continue using the
land because one of them was then an employee of the company. [8]
In support of the complaint, they presented an ancient document ― an original copy

of the deed of sale written in Spanish and dated December 9, 1935 ― to evidence the
[9]
sale of the land to Magdaleno Valdez, Sr.; several original real estate tax
receipts including Real Property Tax Receipt No. 3935 dated 1922 in the name of
[10] [11]
Graciano de los Reyes, husband of Feliciana Santillan, and Real Property Tax Receipt
No. 09491 dated 1963 in the name of Magdaleno Valdez, Sr. Magdaleno Valdez, Jr.
[12]
also testified for the plaintiffs during the trial.

On the other hand, Bomedcos principal defense was that it was the owner and
possessor of Cadastral Lot No. 954, having allegedly bought the same from Feliciana
Santillan in 1929, prior to the sale of the property by the latter to Magdaleno Valdez, Sr.
in 1935. It also contended that plaintiffs claim was already barred by prescription and
laches because of Bomedcos open and continuous possession of the property for more
than 50 years.
Bomedco submitted in evidence a Deed of Sale dated March 18, 1929; seven real
[13]
estate tax receipts for the property covering the period from 1930 to 1985; a 1929
[14]
Survey Plan of private land for Bogo-Medellin Milling Company; a Survey Notification
[15]
Card; Lot Data Computation for Lot No. 954; a Cadastral Map for Medellin
[16] [17]
Cadastre as well as the testimonies of Vicente Basmayor, Geodetic Engineer and
[18]
property custodian for Bomedco, and Rafaela A. Belleza, Geodetic Engineer and Chief
of the Land Management Services of the DENR, Region VIII.
In its decision dated November 27, 1991, the trial court rejected Bomedco's
[19]
defense of ownership on the basis of a prior sale, citing that its evidence a xerox copy of
the Deed of Sale dated March 18, 1929 was inadmissible and had no probative value.
Not only was it not signed by the parties but defendant Bomedco also failed to present
the original copy without valid reason pursuant to Section 4, Rule 130 of the Rules of
Court.[20]
Nonetheless, the trial court held that Bomedco had been in possession of Cadastral
Lot No. 954 in good faith for more than 10 years, thus, it had already acquired
ownership of the property through acquisitive prescription under Article 620 of the Civil
Code. It explained:
Under Article 620 of the Civil Code, CONTINUOUS and APPARENT easements can
be acquired by prescription after ten (10) years. The apparent characteristic of the
questioned property being used by defendant as an easement is no longer at issue,
because plaintiffs themselves had acknowledged that the existence of the railway
tracks of defendant Bomedco was already known by the late Magdaleno Valdez,
herein plaintiffs predecessor-in-interest, before the late Magdaleno Valdez purchased
in 1935 from the late Feliciana Santillan the land described in the Complaint where
defendants railway tracks is traversing [sic] (TSN of February 5, 1991, pp. 7-8). As to
the continuity of defendants use of the strip of land as easement is [sic] also manifest
from the continuous and uninterrupted occupation of the questioned property from
1929 up to the date of the filing of the instant Complaint. In view of the defendants
UNINTERRUPTED possession of the strip of land for more than fifity (50) years, the
Supreme Courts ruling in the case of Ronquillo, et al. v. Roco, et al. (103 Phil 84) is
not applicable. This is because in said case the easement in question was a strip of dirt
road whose possession by the dominant estate occurs only everytime said dirt road
was being used by the dominant estate. Such fact would necessarily show that the
easements possession by the dominant estate was never continuous. In the instant case
however, there is clear continuity of defendants possession of the strip of land it had
been using as railway tracks. Because the railway tracks which defendant had
constructed on the questioned strip of land had been CONTINUOUSLY occupying
said easement. Thus, defendant Bomedcos apparent and continuous possession of said
strip of land in good faith for more than ten (10) years had made defendant owner of
said strip of land traversed by its railway tracks. Because the railway tracks which
defendant had constructed on the questioned strip of land had been continuously
occupying said easement [sic].Thus, defendant Bomedcos apparent and continuous
possession of said strip of land in good faith for more than ten (10) years had made
defendant owner of said strip of land traversed by its railway tracks.
Respondent heirs elevated the case to the Court of Appeals which found that
Bomedco did not acquire ownership over the lot. It consequently reversed the trial
court. In its decision dated November 17, 1995, the appellate court held that Bomedco
only acquired an easement of right of way by unopposed and continuous use of the
land, but not ownership, under Article 620 of the Civil Code.
The appellate court further ruled that Bomedcos claim of a prior sale to it by
Feliciana Santillan was untrue. Its possession being in bad faith, the applicable
prescriptive period in order to acquire ownership over the land was 30 years under
Article 1137 of the Civil Code. Adverse possession of the property started only in 1965
when Bomedco registered its claim in the cadastral survey of Medellin. Since only 24
years from 1965 had elapsed when the heirs filed a complaint against Bomedco in
1989, Bomedcos possession of the land had not yet ripened into ownership.
And since there was no showing that respondent heirs or their predecessor-in-
interest was ever paid compensation for the use of the land, the appellate court
awarded compensation to them, to be computed from the time of discovery of the
adverse acts of Bomedco.
Its motion for reconsideration having been denied by the appellate court in its
resolution dated March 22, 1996, Bomedco now interposes before us this present
appeal by certiorari under Rule 45, assigning the following errors:
I
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT

REVERSED AND SET ASIDE THE TRIAL COURTS DECISION DISMISSING
PRIVATE RESPONDENTS COMPLAINT.
II
THE COURT OF APPEALS COMMITTED REVERSIBLE ERROR WHEN IT

ORDERED THE PETITIONER TO PAY THE PRIVATE RESPONDENT THE
REASONABLE VALUE OF LOT 954 AND THE AMOUNT OF TEN THOUSAND
(P10,000.00) PESOS AS REASONABLE ATTORNEYS FEES.
Petitioner Bomedco reiterates its claim of ownership of the

land through extraordinary acquisitive prescription under Article 1137 of the Civil Code
and laches to defeat the claim for compensation or recovery of possession by
respondent heirs. It also submits a third ground originally tendered by the trial court
― acquisition of the easement of right of way by prescription under Article 620 of the
Civil Code.
Extraordinary Acquisitive Prescription
Under Art. 1137 of the Civil Code
Petitioners claim of ownership through extraordinary acquisitive prescription under
Article 1137 of the Civil Code cannot be sustained.
There is no dispute that the controversial strip of land has been in the continuous
possession of petitioner since 1929. But possession, to constitute the foundation of a
prescriptive right, must be possession under a claim of title, that is, it must be adverse.
Unless coupled with the element of hostility towards the true owner, possession,
[21]
however long, will not confer title by prescription.

[22]
After a careful review of the records, we are inclined to believe the version of
respondent heirs that an easement of right of way was actually granted to petitioner for
which reason the latter was able to occupy Cadastral Lot No. 954. We cannot disregard
the fact that, for the years 1930, 1937, 1949, 1962 and 1963, petitioner unequivocally
declared the property to be a central railroad right of way or sugar central railroad right
of way in its real estate tax receipts when it could have declared it to be industrial land
as it did for the years 1975 and 1985. Instead of indicating ownership of the lot, these
[23]
receipts showed that all petitioner had was possession by virtue of the right of way
granted to it. Were it not so and petitioner really owned the land, petitioner would not
have consistently used the phrases central railroad right of way and sugar central
railroad right of way in its tax declarations until 1963. Certainly an owner would have
found no need for these phrases. A person cannot have an easement on his own land,
since all the uses of an easement are fully comprehended in his general right of
ownership. [24]
While it is true that, together with a persons actual and adverse possession of the
land, tax declarations constitute strong evidence of ownership of the land occupied by
him, this legal precept does not apply in cases where the property is declared to be a
[25]
mere easement of right of way.

An easement or servitude is a real right, constituted on the corporeal immovable
property of another, by virtue of which the owner has to refrain from doing, or must allow
someone to do, something on his property, for the benefit of another thing or person. It
exists only when the servient and dominant estates belong to two different owners. It
gives the holder of the easement an incorporeal interest on the land but grants no title
thereto. Therefore, an acknowledgment of the easement is an admission that the
property belongs to another. [26]
Having held the property by virtue of an easement, petitioner cannot now assert that
its occupancy since 1929 was in the concept of an owner. Neither can it declare that the
30-year period of extraordinary acquisitive prescription started from that year.
Petitioner, however, maintains that even if a servitude was merely imposed on the
property in its favor, its possession immediately became adverse to the owner in the
late 1950s when the grant was alleged by respondent heirs to have expired. It stresses
that, counting from the late 1950s (1959 as found by the trial court), the 30-year
extraordinary acquisitive prescription had already set in by the time respondent heirs
made a claim against it in their letters dated March 1 and April 6, 1989.
We do not think so. The mere expiration of the period of easement in 1959 did not
convert petitioners possession into an adverse one. Mere material possession of land is
not adverse possession as against the owner and is insufficient to vest title, unless such
possession is accompanied by the intent to possess as an owner. There should be a
[27]
hostile use of such a nature and exercised under such circumstances as to manifest
and give notice that the possession is under a claim of right.
In the absence of an express grant by the owner, or conduct by petitioner sugar mill
from which an adverse claim can be implied, its possession of the lot can only be
presumed to have continued in the same character as when it was acquired (that is, it
possessed the land only by virtue of the original grant of the easement of right of way),
or was by mere license or tolerance of the owners (respondent heirs). It is a
[28] [29]
fundamental principle of law in this jurisdiction that acts of possessory character
executed by virtue of license or tolerance of the owner, no matter how long, do not start
the running of the period of prescription. [30]
After the grant of easement expired in 1959, petitioner never performed any act
incompatible with the ownership of respondent heirs over Cadastral Lot No. 954. On the
contrary, until 1963, petitioner continued to declare the sugar central railroad right of
way in its realty tax receipts, thereby doubtlessly conceding the ownership of
respondent heirs. Respondents themselves were emphatic that they simply tolerated
petitioners continued use of Cadastral Lot No. 954 so as not to jeopardize the
employment of one of their co-heirs in the sugar mill of petitioner. [31]
The only time petitioner assumed a legal position adverse to respondents was when
it filed a claim over the property in 1965 during the cadastral survey of Medellin. Since
then (1965) and until the filing of the complaint for the recovery of the subject land
before the RTC of Cebu in 1989, only 24 years had lapsed. Since the required 30-year
extraordinary prescriptive period had not yet been complied with in 1989, petitioner
never acquired ownership of the subject land.
Laches
Neither can petitioner find refuge in the principle of laches. It is not just the lapse of
time or delay that constitutes laches. The essence of laches is the failure or neglect, for
an unreasonable and unexplained length of time, to do that which, through due
diligence, could or should have been done earlier, thus giving rise to a presumption that
the party entitled to assert it had either abandoned or declined to assert it. [32]
Its essential elements are: (a) conduct on the part of the defendant, or of one under
whom he claims, giving rise to the situation complained of; (b) delay in asserting
complainants rights after he had knowledge of defendants acts and after he has had the
opportunity to sue; (c) lack of knowledge or notice by defendant that the complainant
will assert the right on which he bases his suit; and (d) injury or prejudice to the
defendant in the event the relief is accorded to the complainant. [33]
The second element (which in turn has three aspects) is lacking in the case at bar.
These aspects are: (a) knowledge of defendant's action, (b) opportunity to sue
defendant after obtaining such knowledge and (c) delay in the filing of such suit. [34]
Records show that respondent heirs only learned about petitioners claim on their
property when they discovered the inscription for the cadastral survey in the records of
the Bureau of Lands in 1989. Respondents lost no time in demanding an explanation for
said claim in their letters to the petitioner dated March 1, 1989 and April 6, 1989. When
petitioner ignored them, they instituted their complaint before the Regional Trial Court of
Cebu City on June 8, 1989.
Petitioners reliance on Caro vs. Court of Appeals and Vda. de Alberto vs. Court of
[35]
Appeals is misplaced. There, laches was applied to bar petitioners from questioning
[36]
the ownership of the disputed properties precisely because they had knowledge of the
adverse claims on their properties yet tarried for an extraordinary period of time before
taking steps to protect their rights.
Further, there is no absolute rule on what constitutes laches. It is a rule of equity
and applied not to penalize neglect or sleeping on ones rights but rather to avoid
recognizing a right when to do so would result in a clearly unfair situation. The question
of laches is addressed to the sound discretion of the court and each case must be
decided according to its particular circumstances. It is the better rule that courts, under
[37]
the principle of equity, should not be guided or bound strictly by the statute of limitations
or the doctrine of laches if wrong or injustice will result.
It is clear that petitioner never acquired ownership over Cadastral Lot No. 954
whether by extraordinary acquisitive prescription or by laches.
Acquisition of Easement of Right of Way By

Prescription Under Art. 620 of the Civil Code
Petitioner contends that, even if it failed to acquire ownership of the subject land, it
nevertheless became legally entitled to the easement of right of way over said land by
virtue of prescription under Article 620 of the Civil Code:
Continuous and apparent easements are acquired either by virtue of a title or by

prescription of ten years.
The trial court and the Court of Appeals both upheld this view for the reason that the
railroad right of way was, according to them, continuous and apparent in nature. The
more or less permanent railroad tracks were visually apparent and
they continuously occupied the subject strip of land from 1959 (the year the easement
granted by Feliciana Santillan to petitioner expired). Thus, with the lapse of the 10-year
prescriptive period in 1969, petitioner supposedly acquired the easement of right of way
over the subject land.
Following the logic of the courts a quo, if a road for the use of vehicles or the
passage of persons is permanently cemented or asphalted, then the right of way over it
becomes continuous in nature. The reasoning is erroneous.
Under civil law and its jurisprudence, easements are either continuous or
discontinuous according to the manner they are exercised, not according to the
presence of apparent signs or physical indications of the existence of such easements.
Thus, an easement is continuous if its use is, or may be, incessant without the
intervention of any act of man, like the easement of drainage; and it is discontinuous if
[38]
it is used at intervals and depends on the act of man, like the easement of right of way. [39]
The easement of right of way is considered discontinuous because it is exercised

only if a person passes or sets foot on somebody elses land. Like a road for the
passage of vehicles or persons, an easement of right of way of railroad tracks is
discontinuous because the right is exercised only if and when a train operated by a
person passes over another's property. In other words, the very exercise of the
servitude depends upon the act or intervention of man which is the very essence of
discontinuous easements.
The presence of more or less permanent railroad tracks does not in any way
convert the nature of an easement of right of way to one that is continuous. It is not the
presence of apparent signs or physical indications showing the existence of an
easement, but rather the manner of exercise thereof, that categorizes such easement
into continuous or discontinuous.The presence of physical or visual signs only classifies
an easement into apparent or non-apparent. Thus, a road (which reveals a right of way)
and a window (which evidences a right to light and view) are apparent easements, while
an easement of not building beyond a certain height is non-apparent. [40]
In Cuba, it has been held that the existence of a permanent railway does not make
the right of way a continuous one; it is only apparent. Therefore, it cannot be acquired
by prescription. In Louisiana, it has also been held that a right of passage over
[41]
another's land cannot be claimed by prescription because this easement is

discontinuous and can be established only by title.[42]
In this case, the presence of railroad tracks for the passage of petitioners trains
denotes the existence of an apparent but discontinuous easement of right of way.
And under Article 622 of the Civil Code, discontinuous easements, whether apparent or
not, may be acquired only by title. Unfortunately, petitioner Bomedco never acquired
any title over the use of the railroad right of way whether by law, donation, testamentary
succession or contract. Its use of the right of way, however long, never resulted in its
acquisition of the easement because, under Article 622, the discontinuous easement of
a railroad right of way can only be acquired by title and not by prescription.
To be sure, beginning 1959 when the original 30-year grant of right of way given to
petitioner Bomedco expired, its occupation and use of Cadastral Lot No. 954 came to
be by mere tolerance of the respondent heirs. Thus, upon demand by said heirs in 1989
for the return of the subject land and the removal of the railroad tracks, or, in the
alternative, payment of compensation for the use thereof, petitioner Bomedco which had
no title to the land should have returned the possession thereof or should have begun
paying compensation for its use.
But when is a party deemed to acquire title over the use of such land (that is, title
over the easement of right of way)? In at least two cases, we held that if: (a) it had
subsequently entered into a contractual right of way with the heirs for the continued use
of the land under the principles of voluntary easements or (b) it had filed a case against
the heirs for conferment on it of a legal easement of right of way under Article 629 of the
Civil Code, then title over the use of the land is deemed to exist. The conferment of a
legal easement of right of way under Article 629 is subject to proof of the following:
(1) it is surrounded by other immovables and has no adequate outlet to a

public highway;
(2) payment of proper indemnity;

(3) the isolation is not the result of its own acts; and
(4) the right of way claimed is at the point least prejudicial to the servient
estate, and, insofar as consistent with this rule, the distance from the
dominant estate to the highway is the shortest. [43]
None of the above options to acquire title over the railroad right of way was ever
pursued by petitioner despite the fact that simple resourcefulness demanded such
initiative, considering the importance of the railway tracks to its business. No doubt, it is
unlawfully occupying and using the subject strip of land as a railroad right of way without
valid title yet it refuses to vacate it even after demand of the heirs. Furthermore, it
tenaciously insists on ownership thereof despite a clear showing to the contrary.
We thus uphold the grant by the Court of Appeals of attorneys fees in the amount
of P10,000 considering the evident bad faith of petitioner in refusing respondents just
and lawful claims, compelling the latter to litigate. [44]
WHEREFORE, the petition is DENIED. The appealed decision dated November 17,
1995 and resolution dated March 2, 1996 of the Court of Appeals are AFFIRMED with
MODIFICATION. Petitioner Bogo-Medellin Milling Company, Inc. is hereby ordered to
vacate the subject strip of land denominated as Cadastral Lot No. 954, remove its
railway tracks thereon and return its possession to the private respondents, the heirs of
Magdaleno Valdez, Sr. It is also hereby ordered to pay private respondents attorney's
fees in the amount of P10,000.
SO ORDERED.
Puno, (Chairman), Panganiban, and Carpio-Morales, JJ., concur.
Sandoval-Gutierrez, J., on official leave.
[1]
Penned by Associate Justice Celia Lipana-Reyes and concurred in by Associate Justices Alfredo L.
Benipayo and Corona Ibay-Somera.
[2]
Penned by Presiding Judge Benigno G. Gaviola.
[3]
Exhibit A, Folder of Plaintiffs Exhibits, p. 1.
[4]
Exhibits B, B-1, B-4 and D, Folder of Plaintiffs Exhibits, pp. 2-4, 6.
[5]
Exhibit H, Folder of Plaintiffs Exhibits, p. 11.
[6]
Exhibits E and F, Id. at pp. 7, 8-9.
[7]
Records, pp. 1-7.
[8]
Exhibits Y, Folder of Plaintiffs Exhibits, pp. 102-103.
[9]
Exhibit A, Id. at p. 1.
[10]
Exhibits B, B1, B2, B3 and B4, Id. at pp. 2-4.
[11]
Exhibit C, Id. at p. 5.
[12]
Exhibit D, Id. at p. 6.
[13]
Exhibit 1, Folder of Defendants Exhibits, pp. 8-9.
[14]
Exhibits 2, 3, 4, 5, 6, 7 and 8, Id. at pp. 10-15.
[15]
Exhibit 9, Id. at p. 17.
[16]
[17]
[18]
Exhibit 12, Id. at pp. 20-21.
[19]
Presiding Judge Benigno G. Gaviola.
[20]
Rollo, p. 39.
[21]
Ordoez vs. Court of Appeals, 188 SCRA 109 [1990].
[22]
Cequea vs. Bolante, 330 SCRA 216 [2000].
[23]
Folder of Defendants Offer of Exhibits, pp. 10-16.
[24]
Articles 428 and 437, Civil Code.
[25]
DBP vs. Court of Appeals, 331 SCRA 267 [2000]; Article 233, Civil Code.
[26]
2 TOLENTINO, CIVIL CODE 353-354 [1992].
[27]
Compaia Agricula de Ultramar vs. Domingo, 6 Phil 246 [1906].
[28]
[29]
Manila Electric Company vs. IAC, 174 SCRA 313 [1989].
[30]
[31]
Exhibit Y, Records, pp. 102-103.
[32]
Espao vs. Court of Appeals, 268 SCRA 511[1997].
[33]
Avisado vs. Rumbaua, 354 SCRA 245 [2001].
[34]
Catholic Bishop of Balanga vs. CA, 264 SCRA 181 [1996].
[35]
180 SCRA 401[1989].
[36]
173 SCRA 436 [1989].
[37]
Villanueva vs. Court of Appeals, 330 SCRA 349 [2000].
[38]
3 PARAS, CIVIL CODE OF THE PHILIPPINES ANNOTATED 597-598 (13th ed., 1994); Articles 615
and 646, Civil Code.
[39]
Ibid.
[40]
Supra note 26, 358.
[41]
Ibid. at 365, citing Sentencia (Cuba) of December 14,1928.
[42]
Ibid., citing Broussard vs. Etie, 11 La. 394; Burgas vs. Stontz, 174 La. 586, 141 So. 67.
[43]
Bacolod-Murcia Milling Co., Inc., et. al. vs. Capital Subd. Inc., et. al., 124 SCRA 128 [1966]; Talisay-
Silay Milling Co., Inc. vs. CFI of Negros Occidental, et. al., 149 SCRA 676 [1971].
[44]
Article 2208 (2) (5), Civil Code; Songcuan vs. Intermediate Appellate Court, 191 SCRA 1 [1990].
THIRD DIVISION
[G.R. No. 105294. February 26, 1997]
PACITA DAVID-CHAN, petitioner, vs. COURT OF APPEALS and PHIL.

RABBIT BUS LINES, INC., respondents.
DECISION
PANGANIBAN, J.:
In pleading for an easement of right of way, petitioner correctly cites the

requirements of law but fails to provide factual support to show her entitlement
thereto. Since findings of facts by the Court of Appeals affirming those of the trial court
are binding on the Supreme Court, the petition must thus fail. Even petitioners plea for
equity becomes unavailing because resort to equity is possible only in the absence, and
never in contravention, of statutory law.
The petition assails the Decision of respondent Court promulgated on April 30,
[1] [2]
1992. The Decision of respondent Court affirmed the decision dated July 26, 1989, of
the Regional Trial Court of San Fernando, Pampanga, Branch 44, in Civil Case No.
8049. The dispositive portion of the affirmed decision of the trial court reads:
[3]
IN VIEW OF THE FOREGOING CONSIDERATIONS, and finding plaintiffs

petition to be without merit, the same is, as it is hereby ordered dismissed with costs
against plaintiff.
On defendants (Singian) counterclaim, the same is, as it is hereby dismissed for
insufficiency of evidence.
The Facts
On September 29, 1987, petitioner filed with the trial court an amended petition with
prayer for preliminary prohibitory injunction, seeking to stop private respondent from
fencing its property and depriving her of access to the highway. Petitioner alleged that
her property, consisting of around 635 square meters, situated in Del Pilar, San
Fernando, Pampanga and covered by TCT No. 57596-R, was delineated on its northern
and western sides by various business establishments. Adjoining her property along its
southern boundary was the land of the Pineda family, while along the east-northeastern
boundary, and lying between her property and the MacArthur Highway, was another lot
with an area of approximately 161 square meters owned by private respondent. In short,
petitioners lot was almost completely surrounded by other immovables and cut off from
the highway. Her only access to the highway was a very small opening measuring two
feet four inches wide through the aforementioned property of private
respondent. Petitioner believed she was entitled to a wider compulsory easement of
right of way through the said property of private respondent. The prospective
subservient estate was a portion of a bigger lot consisting of 7,239 square meters and
covered by TCT No. 163033-R, which was formerly owned by the Singian Brothers
Corporation (hereinafter referred to as Singian Brothers) and was sold to private
respondent without the knowledge and consent of petitioner, who was thereby allegedly
prevented from exercising her right of pre-emption or right of redemption. Petitioner
alleged that private respondent was about to complete the construction of its concrete
fence on the said lot which would result in depriving petitioner of the only available right
of way, and that therefore, she was constrained to petition the trial court to enjoin
private respondent from fencing said lot. The petition likewise prayed that judgment be
rendered ordering private respondent to sell to petitioner the subject lot and to pay the
damages, attorneys fees and costs of suit.
Private respondent denied the allegations of petitioner. The parents and relatives of
petitioner were never tenants or lessees of the former owner, Singian Brothers; rather,
they were found to be illegally occupying the property as ruled by the MTC-San
Fernando, Pampanga, Branch 1, in Civil Case No. 4865. The dispositive portion of the
judgment of ejectment reads: [4]
WHEREFORE, defendants Eduardo Mangune, Pacita David-Chan and Primo David

including their agents/representatives and, any and all persons given access by them to
the disputed premises claiming any right under them, are hereby ordered to
immediately vacate the area in question, remove all the improvements that they have
constructed thereon; to pay the plaintiff corporation jointly and severally the sum
of P2,000.00 pesos - as Attorneys fees and the costs of this suit.
The case against defendants Loida Makabali and Helen Hermidia is hereby dismissed
as the action has become moot.
The defendants counterclaim, Pacita David-Chan and Eduardo Mangune is hereby

dismissed for lack of merit.
Hence the former owners were not obliged to inform petitioner of the sale. The land
sold by the Singian Brothers was free from all liens and encumbrances as stated in the
Deed of Absolute Sale. Private respondent was not selling the 161 square-meter lot
because it needed the property. Also, petitioner had another access to the highway
without passing through the lot in question.
The Singian Brothers were impleaded in the trial court. In their answer, they alleged that they did
not authorize anyone to receive rentals for the disputed lot. As their affirmative and special
defenses, Defendant Singian Brothers averred that the complaint of petitioner stated no cause of
action because, being apparent and discontinuous, the right of way cannot be acquired by
prescription. Petitioner was not a tenant of the Singian Brothers; therefore she was not entitled to
a right of pre-emption or right of redemption. Finally, petitioner had another access to the
National Highway which, however, she closed during the pendency of the case at the trial court
when she extended the construction of her fence. [5]
The Issues
Failing to obtain relief at both the trial and respondent courts, petitioner now submits
the following issues for consideration of this Court:
I. In its reaffirmation of the lower courts decision, the Court of Appeals missed
to temper with human compassion of the Art. 649 and 650 of the New
Civil Code of the Phil. which requires the presence of four requisites
for a compulsory easement of way. [6]
II. (The) Court (of Appeals) had used in its decision all technical and legal
niceties to favor respondents, violating time-honored and deeply-
rooted Filipino values. [7]
III. With due respect, the Court (of Appeals) erred in deciding this case in favor
of the respondent despite the facts existing at the background. [8]
IV. The Court (of Appeals) erred in stating that petitioner had an outlet
measuring two (2) feet and four (4) inches to the national highway
without passing through respondent's property as per the
commissioners report. [9]
In her Memorandum dated February 26, 1993, petitioner alleges only one issue:
[10]
Whether or not petitioner is entitled to a legal easement of right of way over that
portion of the property of respondent Rabbit?
On the other hand, private respondent raises two issues: [11]
1. Is the petitioner entitled to an easement of right of way from the private
respondents?
2. Should she be granted her desire for a right of way by way of
`pakikisama and pakikipagkapwa-tao?
After deliberating on the various submissions of the parties, the Court holds that the
issues can be condensed into two, as follows:
(1) Is petitioner legally entitled to a right of way through private respondents

property?
(2) In any event, is she entitled to such easement through the recognition and
application of the Filipino values of pakikisama and pakikipagkapwa-tao?
The Courts Ruling
The petition is devoid of merit.
First Issue: Requisites of an Easement of Right of Way
Citing Articles 649 and 650 of the Civil Code, petitioner submits that the owner of
[12]
an estate may claim a compulsory right of way only after he (or she) has established the
existence of four requisites, namely: (1) the estate is surrounded by other immovables
and is without adequate outlet to a public highway; (2) proper indemnity is paid; (3) the
isolation is not due to the proprietors own acts; and (4) the right of way claimed is at a
point least prejudicial to the servient estate and, insofar as consistent with this rule,
where the distance from the dominant estate to a public highway may be the shortest. [13]
While petitioner may be correct in her theoretical reading of Articles 649 and 650,
she nevertheless failed to show sufficient factual evidence to satisfy their
requirements. Evaluating her evidence, respondent Court ruled that petitioner is not
without adequate outlet to a public highway as follows: [14]
1. Let it be stressed that it was plaintiff who built a concrete fence on the southern
boundary of her property to separate it from the property of the Pineda family. Worse,
during the pendency of the case, she closed the 28-inch clearance which she could use
as a means to reach the National Highway without passing through the property of
defendant. If plaintiff wants a bigger opening, then she can always destroy a portion
of the concrete fence which she erected and pass through the property of the Pineda
family which, as shown on the attached sketch on the Commissioners Report, has an
open space on the southern boundary of plaintiffs land.
2. Plaintiff maintains that once the Pineda family (fences) off their lot, plaintiff has no
more way to the National Highway.
Plaintiffs apprehensions are without basis. The Pineda family could no longer fence
off their property because plaintiff (had) already constructed a fence to separate the
two properties. And even granting that the Pineda family would eventually fence off
their land, then plaintiff could ask for an easement of right of way from the Pineda
family.
The appellate court likewise found that petitioner failed to satisfy the third
requirement because she caused her own isolation by closing her access through the
Pineda property, thus:[15]
1. Worthy of note is the fact that it was plaintiff who built a fence to separate her
property from that of the Pineda family on the southern boundary. And she even
closed the small opening causing her property to be isolated and losing one access to
the National Highway. Plaintiff thus failed to meet the third requisite for the grant of
an easement of right of way. As held by the Hon. Supreme Court in the case
of Francisco vs. Intermediate Appellate Court, 177 SCRA 527, 534-535:
The evidence is, therefore, persuasively to the effect that the private respondent had
been granted an adequate access to the public highway (Parada Road) through the
adjacent estate of Epifania Dila even as he was trying to negotiate a satisfactory
agreement with petitioner Francisco for another passageway through the latters
property. If at the time he filed suit against the petitioner, such access (through the
property of Epifania Dila) could no longer be used, it was because he himself had
closed it off by erecting a stone wall on his lot at the point where the passageway
began for no reason to which the record can attest except to demonstrate the isolation
of his property alleged in his complaint. But the law makes it amply clear that an
owner cannot, as respondent has done, by his own act isolate his property from a
public highway and then claim an easement of way through an adjacent estate. The
third of the cited requisites: that the claimant of a right of way has not himself
procured the isolation of his property had not been met-indeed the respondent had
actually brought about the contrary condition and thereby vitiated his claim to such an
easement. It will not do to assert that use of the passageway through Lot 860-B was
difficult or inconvenient, the evidence being to the contrary and that it was wide
enough to be traversable by even a truck, and also because it has been held that mere
inconvenience attending the use of an existing right of way does not justify a claim for
a similar easement in an alternative location. (Underscoring ours)
The Court of Appeals also ruled that petitioner failed to prove she made a valid
tender of the proper indemnity, to wit:
[16]
2. The second requisite - that there was payment of the proper indemnity was likewise
not met by the plaintiff. Plaintiffs complaint contained no averment that demand for
the easement of right of way had been made after payment of the proper
indemnity. There was no showing that plaintiff ever made a tender of payment of the
proper indemnity for the right of way. As the lower court said, The fact that plaintiff
prays that defendant Rabbit be ordered to sell to her the disputed premises hardly
satisfies the requisite regarding the payment of the proper indemnity.
The questions of whether (1) petitioner has another adequate outlet to the public
highway, or (2) she caused her own isolation, or (3) she made, in fact, a tender of the
proper indemnity are all issues of facts which this Court has no authority to rule upon.
The Supreme Court is not a trier of facts.
[17] [18]
It is doctrinal that findings of facts of the Court of Appeals upholding those of the
trial court are binding upon this Court. While there are exceptions to this rule,
[19]
petitioner has not convinced us that this case falls under one of them.
[20]
Second Issue: Application of Traditional Filipino Values
Perhaps sensing the inadequacy of her legal arguments, petitioner who claims to be
an ordinary housewife (with) x x x meager resources pleads that those who have less in
life should have more in law and that the Court should apply the Filipino values
of pakikisama and pakikipagkapwa-tao in resolving the case.
Such appeal of petitioner is based on equity which has been aptly described as
justice outside legality. However, equity is applied only in the absence of, and never
against, statutory law or judicial rules of procedure. As found by respondent Court,
[21]
petitioner is not legally entitled to a right of way on the property of private

respondent. Thus, such equitable arguments cannot prevail over the legal findings.
There are rigorous standards to be complied with by owners of the dominant estate
before they may be granted with easement of right of way. These standards must be
strictly complied with because easement is a burden on the property of another. Before
such inconvenience may be imposed by the Court, applicants must prove that they
deserve judicial intervention on the basis of law, and certainly not when their isolation is
caused by their own acts. In the latter case, they decide their detachment and must
bear the consequences of such choice.
WHEREFORE, in view of the foregoing, the Petition is DENIED and the Decision
dated April 30, 1992, of the respondent Court is AFFIRMED. Costs against petitioner.
SO ORDERED.
Narvasa, C.J., (Chairman), Davide, Jr., Melo, and Francisco, JJ., concur.
[1]
Rollo, pp. 19-31.
[2]
Fourth Division, composed of J. Jaime M. Lantin, ponente, and JJ. Vicente V. Mendoza (now a member
of this Court) and Serafin V.C. Guingona, concurring.
[3]
Rollo, p. 19
[4]
Ibid., p. 25.
[5]
Ibid., pp. 19-26.
[6]
Ibid., p. 11.
[7]
Ibid., p. 13.
[8]
Ibid., p. 14.
[9]
Ibid.
[10]
p. 3; rollo, p. 62
[11]
Ibid., p. 75.
Article 649. The owner, or any person who by virtue of a real right may cultivate or use any immovable,
[12]
which is surrounded by other immovables pertaining to other persons and without adequate outlet to a
public highway, is entitled to demand a right of way through the neighboring estates, after payment of the
proper indemnity.
the dominant estate, establishing a permanent passage, the indemnity shall consist of the value
of the land occupied and the amount of the damage caused to the servient estate.
In case the right of way is limited to the necessary passage for the cultivation of the estate surrounded by
others and for the gathering of its crops through the servient estate without a permanent way, the
indemnity shall consist in the payment of the damage caused by the incumbrance.
Article 650. The easement of right of way shall be established at the point least prejudicial to the servient
estate, and, insofar as consistent with this rule, where the distance from the dominant estate to a
public highway may be shortest.
[13]
Petitioners memorandum, pp. 4-5, rollo, pp. 63-64
[14]
Rollo, pp. 27-28.
[15]
Ibid., pp. 28-30.
[16]
Ibid., pp. 29-30.
[17]
Inland Trailways, Inc. vs. Court of Appeals, 255 SCRA 178, 181, March 18, 1996; Valenzuela vs. Court
of Appeals, 253 SCRA 303, 313, February 7, 1996; Quebral vs. Court of Appeals, 252 SCRA
353, 368, January 25, 1996.
[18]
Meneses vs. Court of Appeals, 246 SCRA 162, 171, July 14, 1995; Consolidated Bank and Trust
Corporation (Solidbank) vs. Court of Appeals, 246 SCRA 193, July 14, 1995; Banson vs. Court of
Appeals, 246 SCRA 42, July 13, 1995; Floro vs. Llenado, 244 SCRA 713, June 2, 1995.
[19]
Binalay vs. Manalo, 195 SCRA 374, 380, March 18, 1991.
In the case of Florentino Reyes, et al. vs. Court of Appeals, et al., G.R. No. 110207, promulgated on
[20]
July 11, 1996, this Court, through Justice Flerida Ruth P. Romero, listed ten exceptions, to wit:
In the case of Chua Tiong Tay vs. CA, this Court held that the factual findings of the trial court, adopted
and confirmed by the Court of Appeals, are final and conclusive and may not be reviewed on
appeal. The exceptions to this rule are laid down in the case of Floro v. Llenado citing
Remalante v. Tibe, as follows: (1) when the inference made is manifestly mistaken, absurd or
impossible; (2) when there is a grave abuse of discretion; (3) when the finding is grounded
entirely on speculations, surmises or conjectures; (4) when the judgment of the Court of Appeal is
based on misapprehensions of facts; (5) when the findings of fact are conflicting; (6) when the
Court of Appeals, in making its findings, went beyond the issues of the case and the same is
contrary to the admissions of both appellant and appellee; (7) when the findings of the Court of
Appeals are contrary to those of trial court; (8) when the findings of fact are conclusions without
citation of specific evidence on which they are based; (9) when the Court of Appeals manifestly
overlooked certain relevant facts not disputed by the parties and which, if properly considered,
would justify a different conclusion and (10) when the findings of fact of the Court of Appeals are
premised on the absence of evidence and are contradicted by the evidence on record.(Citations
omitted).
[21]
Causapin vs. Court of Appeals, 233 SCRA 615, 625, July 4, 1994.
SECOND DIVISION
[G.R. No. 143643. June 27, 2003]
NATIONAL POWER CORPORATION, petitioner, vs. SPS. JOSE C.

CAMPOS, JR. and MA. CLARA LOPEZ-CAMPOS, respondents.
DECISION
CALLEJO, SR., J.:
This is a petition for review of the Decision dated June 16, 2000 of the Court of
[1]
Appeals in CA-G.R. CV No. 54265. The assailed decision affirmed in toto the

Decision of the Regional Trial Court (RTC) of Quezon City, Branch 98, which ordered
[2]
petitioner National Power Corporation to pay, among others, actual, moral and nominal
damages in the total amount of P1,980,000 to respondents Spouses Jose C. Campos,
Jr. and Ma. Clara A. Lopez-Campos.
The petition at bar stemmed from the following antecedents:
On February 2, 1996, the respondents filed with the court a quo an action for sum of
money and damages against the petitioner. In their complaint, the respondents alleged
that they are the owners of a parcel of land situated in Bo. San Agustin, Dasmarias,
Cavite, consisting of 66,819 square meters (subject property) covered by Transfer
Certificate of Title (TCT) No. T-957323. Sometime in the middle of 1970, Dr. Paulo C.
Campos, who was then the President of the Cavite Electric Cooperative and brother of
respondent Jose C. Campos, Jr., verbally requested the respondents to grant the
petitioner a right-of-way over a portion of the subject property. Wooden electrical posts
and transmission lines were to be installed for the electrification of Puerto Azul. The
respondents acceded to this request upon the condition that the said installation would
only be temporary in nature. The petitioner assured the respondents that the
arrangement would be temporary and that the wooden electric posts would be relocated
as soon as permanent posts and transmission lines shall have been installed.Contrary
to the verbal agreement of the parties, however, the petitioner continued to use the
subject property for its wooden electrical posts and transmission lines without
compensating the respondents therefor. [3]
The complaint likewise alleged that some time in 1994, the petitioners agents
trespassed on the subject property and conducted engineering surveys thereon. The
respondents caretaker asked these agents to leave the property. Thereafter, in 1995, a
certain Mr. Raz, who claimed to be the petitioners agent, went to the office of
respondent Jose C. Campos, Jr., then Associate Justice of the Supreme Court, and
requested permission from the latter to enter the subject property and conduct a survey
in connection with the petitioners plan to erect an all-steel transmission line tower on a
24-square meter area inside the subject property. Respondent Jose Campos, Jr.,
refused to grant the permission and expressed his preference to talk to the Chief of the
Calaca Sub-station or the head of the petitioners Quezon City office. The respondents
did not hear from Mr. Raz or any one from the petitioners office since then.Sometime in
July or August of 1995, the petitioners agents again trespassed on the subject property,
presenting to the respondents caretaker a letter of authority purportedly written by
respondent Jose C. Campos, Jr. When the caretaker demanded that the letter be given
to him for verification with respondent Jose C. Campos, Jr. himself, the petitioners
agents refused to do so. Consequently, the caretaker ordered the agents to leave the
subject property.[4]
The complaint further alleged that on December 12, 1995, the petitioner instituted
an expropriation case involving the subject property before the RTC of Imus, Cavite,
Branch 22. The case was docketed as Civil Case No. 1174-95. The petitioner alleged in
its complaint therein that the subject property was selected in a manner compatible with
the greatest public good and the least private injury and that it (petitioner) had tried to
negotiate with the respondents for the acquisition of the right-of-way easement on the
subject property but that the parties failed to reach an amicable settlement. [5]
The respondents maintained that, contrary to the petitioners allegations, there were
other more suitable or appropriate sites for the petitioners all-steel transmission lines
and that the petitioner chose the subject property in a whimsical and capricious
manner. The respondents averred that the proposed right-of-way was not the least
injurious to them as the system design prepared by the petitioner could be further
revised to avoid having to traverse the subject property. The respondents vigorously
denied negotiating with the petitioner in connection with the latters acquisition of a right-
of-way on the subject property. [6]
Finally, the complaint alleged that unaware of the petitioners intention to expropriate
a portion of the subject property, the respondents sold the same to Solar Resources,
Inc. As a consequence, the respondents stand to lose a substantial amount of money
derived from the proceeds of the sale of the subject property should the buyer (Solar
Resources, Inc.) decide to annul the sale because of the contemplated expropriation of
the subject property. [7]
The complaint a quo thus prayed that the petitioner be adjudged liable to pay the
respondents, among others, actual, nominal and moral damages:
WHEREFORE, premises considered, it is respectfully prayed that the Honorable

Court award the plaintiffs:
a. Actual damages for the use of defendants property since middle 1970s,
including legal interest thereon, as may be established during the trial;
b. P1,000,000.00 as nominal damages;
c. P1,000,000.00 as moral damages;
d. Lost business opportunity as may be established during the trial;
e. P250,000.00 as attorneys fees;
f. Costs of suit.
Plaintiffs pray for other, further and different reliefs as may be just and equitable
under the premises. [8]
Upon receipt of the summons and complaint, the petitioner moved for additional
time to file its responsive pleading. However, instead of filing an answer to the
complaint, the petitioner filed a motion to dismiss on the ground that the action had
prescribed and that there was another action pending between the same parties for the
same cause (litis pendencia). The respondents opposed said motion. On May 2, 1996,
the RTC issued an order denying the petitioners motion to dismiss.
The petitioner then moved for reconsideration of the aforesaid order. The
respondents opposed the same and moved to declare the petitioner in default on the
ground that its motion for reconsideration did not have the required notice of hearing;
hence, it did not toll the running of the reglementary period to file an answer.
On July 15, 1996, the RTC issued an order denying the petitioners motion for
reconsideration. Subsequently, on July 24, 1996, it issued another order granting the
respondents motion and declared the petitioner in default for its failure to file an answer.
The petitioner filed a motion to set aside the order of default but the same was denied
by the RTC.
The petitioner filed a petition for certiorari, prohibition and preliminary injunction with
the Court of Appeals, docketed as CA-G.R. SP No. 41782, assailing the May 2, 1996,
July 15, 1996 and July 24, 1996 Orders issued by the RTC as having been issued with
grave abuse of discretion and to enjoin it from proceeding with the case. On February
13, 1996, the CA dismissed the petition for certiorari, prohibition and preliminary
injunction filed by the petitioner in CA-G.R. SP No. 41782.
In the meantime, the respondents adduced their evidence ex parte in the RTC. As
synthesized by the trial court, the respondents adduced evidence, thus:
From the evidence thus far submitted, it appears that the plaintiffs spouses, both of
whom professional of high standing in society, are the absolute owners of a certain
parcel of land situated in Bo. San Agustin, Dasmarias, Cavite, consisting of 66,819
square meters, more or less, covered and embraced in TCT No. T-95732. Sometime in
the mid-1970, Dr. Paulo C. Campos, brother of Justice Jose Campos, Jr., then
President of the Cavite Electric Cooperative, approached the latter and confided to
him the desire of the National Power Corporation to be allowed to install temporary
wooden electric posts on the portion of his wifes property in order that the high-
tension transmission line coming from Kaliraya passing thru that part of Cavite can be
continued to the direction of Puerto Azul.
Having heard the plea of his brother and the fact that National Power Corporation was
under pressure because at the time that Puerto Azul was being developed there was no
electricity nor was there electrical lines towards that place and acting on the belief that
the installation of wooden electric posts would be temporary in nature, plaintiffs gave
oral permission for the NPC personnel to enter the said parcel of land. Dr. Paulo C.
Campos, assured him that it was just a temporary measure to meet the emergency
need of the Puerto Azul and that the wooden electric posts will be relocated when a
permanent posts and transmission lines shall have been installed. Pursuant to their
understanding, the National Power Corporation installed wooden posts across a
portion of plaintiffs property occupying a total area of about 2,000 square meters more
or less. To date, defendant NPC has been using the plaintiffs property for its wooden
electrical posts and transmission lines; that the latter has estimated that the aggregate
rental (which they peg at the conservative rate of P1.00 per square meter) of the 2,000
square meters for twenty-four (24) years period, would amount to the aggregate sum
of P480,000.00.
From the time National Power Corporation installed those temporary wooden posts,
no notice was ever served upon the plaintiffs of their intention to relocate the same or
to install permanent transmission line on the property. Also, there was no personal
contact between them. However, in late 1994, plaintiffs overseer found a group of
persons of the defendant NPC conducting survey inside the said property, and were
asked to leave the premises upon being discovered that they have no authority to do so
from the owners thereof. Subsequently thereafter, or sometime in 1995, a person by
the name of Mr. Paz, bearing a letter from Calaca Regional Office, went to see Justice
Jose C. Campos, Jr. in his office, informing the latter that he was authorized by the
National Power Corporation to acquire private lands. In the same breath, Mr. Paz
requested his permission to let NPC men enter the subject property and to conduct a
survey in connection with its plan to erect an all steel transmission line tower on a 24
square meter area inside plaintiffs property, but same was denied. Justice Campos,
however, expressed his preference to talk instead to the Chief of the Calaca Sub-
station or the Head of the NPC, Quezon City office. Since then, nothing however
transpired.
Sometime in July or August 1995, plaintiffs learned that defendants agents again
entered the subject property. This time, they have presented to the caretaker a letter of
authority supposedly from Justice Jose C. Campos, Jr. And, when prodded to see the
letter for verification, defendants agents refused to do so. So, they were ordered out of
the vicinity. Plaintiffs stressed that defendants repeated intrusions into their property
without their expressed knowledge and consent had impugned on their constitutional
right to protection over their property.
Later, on December 12, 1995, plaintiffs received copy of summons and complaint in
Civil Case No. 1174-95 filed by the defendant before the Regional Trial Court, Fourth
Judicial Region, Branch 22, Imus, Cavite for the expropriation of 5,320 square meters
of plaintiffs above-described property to be used as right-of-way for the all-steel
transmission line tower of the Calaca-Dasmarias 230 KV T/L Project. But what had
caused plaintiffs discomfiture is the allegation in said complaint stating that the parcel
of land sought to be expropriated has not been applied to nor expropriated for any
public use and is selected by plaintiff in a manner compatible with the greatest good
and the least private injury and that defendant had negotiated with (plaintiffs) for the
acquisition of the right-of-way easement over the portion of the same for the public
purpose as above-stated at a price prescribed by law, but failed to reach an agreement
with them notwithstanding the repeated negotiations between the parties.
Plaintiffs assert that at no instance was there a negotiation between them and the NPC
or its representative. The alleged talk initiated by Mr. Paz with Justice Campos, Jr.
just ended in the latters remonstrance and in prevailing upon the former of his
preference to discuss the matter with a more responsible officer of the National Power
Corporation, such as the Chief of the Calaca Sub-Station or the Head of NPCs Office
in Quezon City. But plaintiffs plea just fell on the deaf ear. The next thing they know
was Civil Case No. Q-1174-95 already filed in court. A party to a case shall not do
falsehood nor shall mislead or misrepresent the contents of its pleading. That gross
misrepresentation had been made by the National Power Corporation in their said
pleading is irrefutable.
Plaintiffs-spouses Campos declared that there are other areas more suitable or
appropriate that can be utilized as alternative sites for the all-steel transmission line
tower. Just a few meters from the planned right-of-way is an abandoned road occupied
by squatters; it is a government property and the possession of which the NPC need
not compensate. The latter had not exercised judiciously in the proper selection of the
property to be appropriated. Evidently, NPCs choice was whimsical and
capricious. Such arbitrary selection of plaintiffs property despite the availability of
another property in a manner compatible with the greatest public good and the least
private injury, constitutes an impermissible encroachment of plaintiffs proprietary
rights and their right to due process and equal protection.
Concededly, NPCs intention is to expropriate a portion of plaintiffs property. This

limitation on the right of ownership is the paramount right of the National Power
Corporation granted by law. But before a person can be deprived of his property
through the exercise of the power of eminent domain, the requisites of law must
strictly be complied with. (Endencia vs. Lualhati, 9 Phil. 177) No person shall be
deprived of his property except by competent authority and for public use and always
upon payment of just compensation. Should this requirement be not first complied
with, the courts shall protect and, in a proper case, restore the owner in his
possession. (Art. 433 Civil Code of the Philippines)
Records disclose that in breach of such verbal promise, defendant NPC had not
withdrawn the wooden electrical posts and transmission lines; said wooden electrical
posts and transmission lines still occupy a portion of plaintiffs property; that the NPC
had benefited from them for a long period of time already, sans compensation to the
owners thereof.
Without first complying with the primordial requisites appurtenant to the exercise of
the power of eminent domain, defendant NPC again boldly intruded into plaintiffs
property by conducting engineering surveys with the end in view of expropriating
5,320 square meters thereof to be used as right-of-way for the all-steel transmission
line tower of the Calaca-Dasmarias 230 KV T/L Project. Such acts constitute a
deprivation of ones property for public use without due compensation. It would
therefore seem that the expropriation had indeed departed from its own purpose and
turns out to be an instrument to repudiate compliance with obligation legally and
validly contracted. [9]
On September 26, 1996, the RTC rendered a decision finding the petitioner liable
for damages to the respondents. The dispositive portion of the RTC decision reads:
WHEREFORE, in view of the foregoing consideration, justment [sic] is hereby

rendered in favor of the plaintiffs, condemning the defendant to pay
(a) Actual damages of P480,000.00 for the use of plaintiffs property;
(b) One Million Pesos (P1,000,000.00) as moral damages;
(c ) Five Hundred Thousand Pesos (P500,000.00) as nominal damages;
(d) One Hundred Fifty Thousand Pesos (P150,000.00) as attorneys fees; and
(e) Costs of suit in the amount of P11,239.00.
SO ORDERED. [10]
The petitioner appealed the decision to the Court of Appeals which on June 16,
1990 rendered a decision affirming the ruling of the RTC.
Essentially, the CA held that the respondents claim for compensation and damages
had not prescribed because Section 3(i) of the petitioners Charter, Republic Act No.
6395, as amended, is not applicable to the case. The CA likewise gave scant
consideration to the petitioners claim that the respondents complaint should be
dismissed on the ground of litis pendencia. According to the CA, the complaint a
quo was the more appropriate action considering that the venue for the expropriation
case (Civil Case No. 1174-95) was initially improperly laid. The petitioner filed the
expropriation proceedings with the RTC in Imus, Cavite, when the subject property is
located in Dasmarias, Cavite. Moreover, the parties in the two actions are not the same
since the respondents were no longer included as defendants in the petitioners
amended complaint in the expropriation case (Civil Case No. 1174-95) but were already
replaced by Solar Resources, Inc., the buyer of the subject property, as defendant
therein.
The CA likewise found the damages awarded by the RTC in favor of the
respondents just and reasonable under the circumstances obtaining in the case.
The petitioner now comes to this Court seeking to reverse and set aside the
assailed decision. The petitioner alleges as follows:
I
The Court of Appeals grievously erred and labored under a gross misapprehension of
fact in finding that the Complaint below should not be dismissed on the ground of
prescription.
II
The Court of Appeals erred in affirming the award of nominal and moral damages,
attorneys fees and costs of litigation.[11]
Citing Article 620 of the Civil Code, the petitioner contends that it had already
acquired the easement of right-of-way over the portion of the subject property by
prescription, the said easement having been allegedly continuous and apparent for a
period of about twenty-three (23) years, i.e., from about the middle of 1970 to the early
part of 1994. The petitioner further invokes Section 3(i) of its Charter in asserting that
the respondents already waived their right to institute any action for compensation
and/or damages concerning the acquisition of the easement of right-of-way in the
subject property. Accordingly, the petitioner concludes that the award of damages in
favor of the respondents is not warranted.
The petition is bereft of merit.
The petitioners claim that, under Article 620 of the Civil Code, it had already
acquired by prescription the easement of right-of-way over that portion of the subject
property where its wooden electric posts and transmission lines were erected is
untenable. Article 620 of the Civil Code provides that:
Art. 620. Continuous and apparent easements are acquired either by virtue of a title or
by prescription of ten years.
Prescription as a mode of acquisition requires the existence of the following: (1)

capacity to acquire by prescription; (2) a thing capable of acquisition by prescription; (3)
possession of the thing under certain conditions; and (4) lapse of time provided by law.
Acquisitive prescription may either be ordinary, in which case the possession must be
[12]
in good faith and with just title, or extraordinary, in which case there is neither good
[13]
faith nor just title. In either case, there has to be possession which must be in the
concept of an owner, public, peaceful and uninterrupted. As a corollary, Article 1119 of
[14]
the Civil Code provides that:
Art. 1119. Acts of possessory character executed in virtue of license or by mere

tolerance of the owner shall not be available for the purposes of possession.
In this case, the records clearly reveal that the petitioners possession of that portion
of the subject property where it erected the wooden posts and transmission lines was
merely upon the tolerance of the respondents. Accordingly, this permissive use by the
petitioner of that portion of the subject property, no matter how long continued, will not
create an easement of right-of-way by prescription. The case of Cuaycong vs.
Benedicto is particularly instructive. In that case, the plaintiffs for more than twenty
[15]
years made use of the road that passed through the hacienda owned by the
defendants, being the only road that connected the plaintiffs hacienda to the public
road. The defendants closed the road in question and refused the use of the same
unless a toll was paid. The plaintiffs therein brought an action to enjoin the defendants
from interfering with the use of the road. In support of their action, the plaintiffs
presented evidence tending to show that they have acquired the right-of-way through
the road by prescription. This Court rejected the contention, holding as follows:
Had it been shown that the road had been maintained at the public expense, with the
acquiescence of the owners of the estates crossed by it, this would indicate such
adverse possession by the government as in course of time would ripen into title or
warrant the presumption of a grant or of a dedication. But in this case there is no such
evidence, and the claims of plaintiffs, whether regarded as members of the public
asserting a right to use the road as such, or as persons claiming a private easement of
way over the land of another must be regarded as resting upon the mere fact of user.
If the owner of a tract of land, to accommodate his neighbors or the public in general,
permits them to cross his property, it is reasonable to suppose that it is not his
intention, in so doing, to divest himself of the ownership of the land so used, or to
establish an easement upon it, and that the persons to whom such permission, tacit or
express, is granted, do not regard their privilege of use as being based upon anything
more than the mere tolerance of the owner. Clearly, such permissive use is in its
inception based upon an essentially revocable license. If the use continues for a long
period of time, no change being made in the relations of the parties by any express or
implied agreement, does the owner of the property affected lose his right of
revocation? Or, putting the same question in another form, does the mere permissive
use ripen into title by prescription?
It is a fundamental principle of the law in this jurisdiction concerning the possession

of real property that such possession is not affected by acts of a possessory character
which are merely tolerated by the possessor, which are or due to his license (Civil
Code, arts. 444 and 1942). This principle is applicable not only with respect to the
prescription of the dominium as a whole, but to the prescription of right in rem. In the
case of Cortes vs. Palanca Yu-Tibo (2 Phil. Rep., 24, 38), the Court said:
The provision of article 1942 of the Civil Code to the effect that acts which are merely
tolerated produce no effect with respect to possession is applicable as much to the
prescription of real rights as to the prescription of the fee, it being a glaring and self-
evident error to affirm the contrary, as does the appellant in his motion
papers. Possession is the fundamental basis of prescription. Without it no kind of
prescription is possible, not even the extraordinary. Consequently, if acts of mere
tolerance produce no effect with respect to possession, as that article provides, in
conformity with article 444 of the same Code, it is evident that they can produce no
effect with respect to prescription, whether ordinary or extraordinary. This is true
whether the prescriptive acquisition be of a fee or of real rights, for the same reason
holds in one and the other case; that is, that there has been no true possession in the
legal sense of the word. (Citations omitted)
Possession, under the Civil Code, to constitute the foundation of a prescriptive right,
must be possession under claim of title (en concepto de dueo), or to use the common
law equivalent of the term, it must be adverse. Acts of possessory character performed
by one who holds by mere tolerance of the owner are clearly not en concepto de dueo,
and such possessory acts, no matter how long so continued, do not start the running of
the period of prescription.[16]
Following the foregoing disquisition, the petitioners claim that it had acquired the
easement of right-of-way by prescription must perforce fail. As intimated above,
possession is the fundamental basis of prescription, whether ordinary or
extraordinary. The petitioner never acquired the requisite possession in this case. Its
use of that portion of the subject property where it erected the wooden poles and
transmission lines was due merely to the tacit license and tolerance of the
respondents. As such, it cannot be made the basis of the acquisition of an easement of
right-of-way by prescription.
Neither can the petitioner invoke Section 3(i) of its Charter (Rep. Act No. 6395, as
amended) to put up the defense of prescription against the respondents. The said
provision reads in part:
Sec. 3(i). The Corporation or its representatives may also enter upon private property
in the lawful performance or prosecution of its business or purposes, including the
construction of transmission lines thereon; Provided, that the owner of such private
property shall be paid the just compensation therefor in accordance with the
provisions hereinafter provided; Provided, further, that any action by any person
claiming compensation and/or damages shall be filed within five years after the right-
of-way, transmission lines, substations, plants or other facilities shall have been
established: Provided, finally, that after the said period no suit shall be brought to
question the said right-of-way, transmission lines, substations, plants or other facilities
nor the amounts of compensation and/or damages involved;
Two requisites must be complied before the above provision of law may be invoked:
1. The petitioner entered upon the private property in the lawful performance or
prosecution of its businesses or purposes; and
2.The owner of the private property shall be paid the just compensation therefor.
As correctly asserted by the respondents, Section 3(i) of Rep. Act No. 6395, as
amended, presupposes that the petitioner had already taken the property through a
negotiated sale or the exercise of the power of eminent domain, and not where, as in
this case, the petitioner was merely temporarily allowed to erect wooden electrical posts
and transmission lines on the subject property. Significantly, the provision uses the term
just compensation, implying that the power of eminent domain must first be exercised
by the petitioner in accordance with Section 9, Article III of the Constitution, which
provides that no private property shall be taken for public use without just
compensation.
This Courts ruling in Lopez vs. Auditor General is likewise in point:
[17]
The petitioner brought this case to this Court on the sole issue of prescription. He
cites Alfonso vs. Pasay City in which a lot owner was allowed to bring an action to
recover compensation for the value of his land, which the Government had taken for
road purposes, despite the lapse of thirty years (1924-1954). On the other hand, the
respondents base their defense of prescription on Jaen vs. Agregado which held an
action for compensation for land taken in building a road barred by prescription
because it was brought after more than ten years (i.e., thirty three years, from 1920 to
1953). They argue that the ruling in Alfonso cannot be applied to this case because,
unlike Alfonso who made repeated demands for compensation within ten years,
thereby interrupting the running of the period of prescription, the petitioner here filed
his claim only in 1959.
It is true that in Alfonso vs. Pasay City this Court made the statement that registered
lands are not subject to prescription and that on grounds of equity, the government
should pay for private property which it appropriates though for the benefit of the
public, regardless of the passing of time. But the rationale in that case is that where
private property is taken by the Government for public use without first acquiring title
thereto either through expropriation or negotiated sale, the owners action to recover
the land or the value thereof does not prescribe. This is the point that has been
overlooked by both parties.
On the other hand, where private property is acquired by the Government and all that
remains is the payment of the price, the owners action to collect the price must be
brought within ten years otherwise it would be barred by the statue of limitations. [18]
Thus, the five-year period provided under Section 3(i) of Rep. Act No. 6395, as
amended, within which all claims for compensation and/or damages may be allowed
against the petitioner should be reckoned from the time that it acquired title over the
private property on which the right-of-way is sought to be established. Prior thereto, the
claims for compensation and/or damages do not prescribe. In this case, the findings of
the CA is apropos:
Undeniably, NPC never acquired title over the property over which its wooden
electrical posts and transmission lines were erected. It never filed expropriation
proceedings against such property. Neither did it negotiate for the sale of the same. It
was merely allowed to temporarily enter into the premises. As NPCs entry was gained
through permission, it had no intention to acquire ownership either by voluntary
purchase or by the exercise of eminent domain. [19]
The petitioner instituted the expropriation proceedings only on December 12,

1995. Indisputably, the petitioner never acquired title to that portion of the subject
property where it erected the wooden electrical posts and transmission lines. Until such
time, the five-year prescriptive period within which the respondents right to file an action
to claim for compensation and/or damages for the petitioners use of their property does
not even commence to run. The CA thus correctly ruled that Section 3(i) of Rep. Act No.
6395, as amended, finds no application in this case and that the respondents action
against the petitioner has not prescribed.
With respect to the damages awarded in favor of the respondents, the petitioner
avers, thus:
The Court of Appeals erred in
affirming the award of nominal
and moral damages, attorneys
fees and costs of litigation.
It follows from Section 31(c) of R.A. 6395 that the award moral and nominal
damages, as well as attorneys fees and costs are baseless. The right to claim them has
likewise prescribed. [20]
With our ruling that the claims of the respondents had not prescribed, the petitioners
contention that the respondents are not entitled to moral and nominal damages and
attorneys fees must fail. In affixing the award for moral and nominal damages and
attorneys fees, the CA ratiocinated:
With respect to the fourth assignment of error, this Court is not persuaded to reverse
much less modify the court a quos findings.
An award of moral damages would require certain conditions to be met, to wit: (1)
first, there must be an injury, whether physical, mental or psychological, clearly
sustained by the claimant; (2) second, there must be a culpable act or omission
factually established; (3) third, the wrongful act or omission of the defendant is the
proximate cause of the injury sustained by the claimant; and (4) fourth, the award of
damages is predicated on any of the cases stated in Article 2219 of the Civil Code.
NPC made it appear that it negotiated with the appellees when no actual negotiations
took place. This allegation seriously affected the on-going sale of the property to Solar
Resources, Inc. as appellees seemed to have sold the property knowing fully well that
a portion thereof was being expropriated. Such an act falls well within Article 21 of
the Civil Code. NPCs subterfuge certainly besmirched the reputation and professional
standing of Justice Jose C. Campos, Jr. and Professor Maria Clara A. Lopez-Campos,
and caused them physical suffering, mental anguish, moral shock and wounded
feelings.
The records show that Justice Campos career included, among other[s], being a
Professor of Law at the University of the Philippines; Acting Chairman of the Board
of Transportation; Presiding Judge of the Court of First Instance of Pasay City, and
Associate Justice of the Court of Appeals. Such career reached its apex when he was
appointed Associate Justice of the Supreme Court in 1992. Justice Campos was a
member of the Judicial and Bar Council when NPC filed its Civil Case No. 1174-
95. Professor Maria Clara A. Lopez-Campos is a noted authority in Corporate and
Banking Laws and is a Professor Emerita of the University of the Philippines from
1981 to the present. She had taught more than three decades at the College of
Law. Against such backdrop, it does not take too much imagination to conclude that
the oppressive and wanton manner in which NPC sought to exercise its statutory right
of eminent domain warranted the grant of moral damages.
On the award of nominal damages, such are adjudicated in order that a right of the
plaintiff, which has been violated or invaded by the defendant, may be vindicated or
recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered
by him. As previously discussed, it does not brood well for a government entity such
as NPC to disregard the tenets of private property enshrined in the Constitution. NPC
not only intentionally trespassed on appellees property and conducted engineering
surveys thereon but also sought to fool the appellees caretaker by claiming that such
entry was authorized.Moreover, NPC even justifies such trespass as falling under its
right to expropriate the property. Under the circumstances, the award of nominal
damages is sustained.
That NPCs highhanded exercise of its right of eminent domain constrained the
appellees to engage the services of counsel is obvious. As testified upon, the appellees
engaged their counsel for an agreed fee of P250,000.00. The trial court substantially
reduced this to P150,000.00. Inasmuch as such services included not only the present
action but also those for Civil Case No. 1174-95 erroneously filed by NPC with the
Regional Trial Court of Imus, Cavite, and the Petition for Certiorari in CA-GR No.
41782, this Court finds such attorneys fees to be reasonable and equitable. [21]
We agree with the CA.

The award of moral damages in favor of the respondents is proper given the
circumstances obtaining in this case. As found by the CA:
NPC made it appear that it negotiated with the appellees when no actual negotiation
took place. This allegation seriously affected the on-going sale of the property to Solar
Resources, Inc. as appellees seemed to have sold the property knowing fully well that
a portion thereof was being expropriated. Such an act falls well within Article 21 of
the Civil Code. NPCs subterfuge certainly besmirched the reputation and
professionally standing of Justice Jose C. Campos, Jr. and Professor Maria Clara A.
Lopez-Campos, and caused them physical suffering, mental anguish, moral shock and
wounded feelings.
The records show that Justice Campos career included, among other[s], being a
Professor of Law at the University of the Philippines; Acting Chairman of the Board
of Transportation; Presiding Judge of the Court of First Instance of Pasay City, and
Associate Justice of the Court of Appeals. Such career reached its apex when he was
appointed Associate Justice of the Supreme Court in 1992. Justice Campos was a
member of the Judicial and Bar Council when NPC filed its Civil Case No. 1174-
95. Professor Maria Clara A. Lopez-Campos is a noted authority in Corporate and
Banking Laws and is a Professor Emerita of the University of the Philippines from
1981 to the present. She had taught more than three decades at the College of
Law. Against such backdrop, it does not take too much imagination to conclude that
the oppressive and wanton manner in which NPC sought to exercise its statutory right
of eminent domain warranted the grant of moral damages. [22]
Further, nominal damages are adjudicated in order that a right of the plaintiff, which
has been violated or invaded by the defendant, may be vindicated or recognized, and
not for the purpose of indemnifying the plaintiff for any loss suffered by him. Similarly, [23]
the court may award nominal damages in every case where any property right has been
invaded. The petitioner, in blatant disregard of the respondents proprietary right,
[24]
trespassed the subject property and conducted engineering surveys thereon. It even
attempted to deceive the respondents caretaker by claiming that its agents were
authorized by the respondents to enter the property when in fact, the respondents never
gave such authority. Under the circumstances, the award of nominal damages is
likewise warranted.
Finally, the award of attorneys fees as part of damages is deemed just and
equitable considering that by the petitioners unjustified acts, the respondents were
obviously compelled to litigate and incur expenses to protect their interests over the
subject property. [25]
WHEREFORE, the petition is hereby DENIED for lack of merit. The assailed
Decision dated June 16, 2000 of the Court of Appeals in CA-G.R. CV No. 54265 is
AFFIRMED in toto.
SO ORDERED.
Bellosillo, (Chairman), and Quisumbing, JJ., concur.
Austria-Martinez, J., on official leave.
[1]
Penned by Associate Justice Eugenio S. Labitoria, Chairman, Twelfth Division, with Associate Justices
Bernardo P. Abesamis and Wenceslao I. Agnir, Jr. concurring.
[2]
Penned by Judge Justo M. Sultan.
[3]
Records, pp. 1-3.
[4]
Id. at 3-4.
[5]
Id. at 4-5.
[6]
Id.
[7]
Id. at 5-6.
[8]
Id. at 6-7.
[9]
Id. at 325-328.
[10]
Id. at 329.
[11]
Rollo, pp. 18-19.
[12]
TOLENTINO, IV CIVIL CODE OF THE PHILIPPINES 14 (1985).
[13]
Article 1117, CIVIL CODE.
[14]
[15]
37 Phil. 783 (1918).
[16]
Id. at 792-793.
[17]
20 SCRA 655 (1967).
[18]
Id. at 656-657. (Citations omitted).
[19]
Rollo, p. 32.
[20]
Id. at 21.
[21]
Id. at 39-40.
[22]
[23]
[24]
[25]
Producers Bank of the Philippines v. Court of Appeals, 365 SCRA 326 (2001).
THIRD DIVISION

GUILLERMO M. TELMO, G.R. No. 182567
Petitioner,
Present:

Chairperson,
- versus - CHICO-NAZARIO,
VELASCO, JR.,
NACHURA, and
PERALTA, JJ.

LUCIANO M. BUSTAMANTE, Promulgated:
Respondent.
July 13, 2009

x------------------------------------------------------------------------------------x

DECISION

NACHURA, J.:

For our consideration is a Petition[1] for Review on Certiorari under Rule 45
of the Rules of Court in relation to Section 27, paragraph 3 of the Ombudsman Act
of 1989 (Republic Act No. 6770). Subject of the Petition is the Decision[2] dated
October 13, 2005 and the Order[3] dated March 17, 2006 of the Office of the
Deputy Ombudsman for Luzon.

This case arose from the Verified Complaint[4] filed by respondent Luciano
M. Bustamante before the Office of the Deputy Ombudsman for Luzon against
petitioner Guillermo Telmo, Municipal Engineer of Naic, Cavite, Danilo Consumo,
Barangay (Brgy.) Chairman, Brgy. Halang, Naic, Cavite, and Elizalde Telmo, a
private individual.

The complaint alleged that respondent is a co-owner of a real property of
616 square meters in Brgy. Halang, Naic, Cavite, known as Lot 952-A and covered
by Transfer Certificate of Title No. T-957643 of the Register of Deeds
of Cavite. Petitioner and Elizalde Telmo (Telmos) are the owners of the two (2)
parcels of land denominated as Lot 952-B and 952-C, respectively, located at the
back of respondents lot. When his lot was transgressed by the construction of
the Noveleta-Naic-Tagaytay Road, respondent offered for sale the remaining lot to
the Telmos. The latter refused because they said they would have no use for it, the
remaining portion being covered by the roads 10-meter easement.

The complaint further alleged that, on May 8, 2005, respondent caused the
resurvey of Lot 952-A in the presence of the Telmos. The resurvey showed that the
Telmos encroached upon respondents lot. Petitioner then uttered, Hanggat ako ang
municipal engineer ng Naic, Cavite, hindi kayo makakapagtayo ng anuman sa lupa
nyo; hindi ko kayo bibigyan ng building permit.

On May 10, 2005, respondent put up concrete poles on his lot. However,
around 7:00 p.m. of the same day, the Telmos and their men allegedly destroyed
the concrete poles. The following day, respondents relatives went to Brgy.
Chairman Consumo to report the destruction of the concrete poles. Consumo told
them that he would not record the same, because he was present when the incident
occurred. Consumo never recorded the incident in the barangay blotter.

Respondent complained that he and his co-owners did not receive any
just compensation from the government when it took a portion of their
property for the construction of the Noveleta-Naic-Tagaytay Road. Worse, they
could not enjoy the use of the remaining part of their lot due to the abusive, Illegal,
and unjust acts of the Telmos and Consumo.Respondent charged the latter
criminallyfor violation of Article 312[5] of the Revised Penal Code and Section 3(e)
[6]
of Republic Act No. 3019[7] and administrativelyfor violation of Section 4 (a)
[8]
, (b)[9], (c)[10], and (e)[11] of Republic Act No. 6713.[12]

In his Counter-Affidavit,[13] petitioner denied having uttered the words
attributed to him by respondent, and claimed that he only performed his official
duties in requiring an application for a building permit before any structure can be
erected on government property. He said that respondent insisted on enclosing with
barbed wire and concrete posts the lot that already belonged to the national
government, which had now been converted into a national road. He also alleged
that if he allowed the enclosures erected by the respondent, other residents would
be denied ingress to and egress from their own properties.

In his own counter-affidavit, Consumo denied collusion with petitioner in
not recording in the barangay blotter the subject incident. He explained that on
May 10, 2005 at around 5:00 p.m., he was summoned by petitioner to intercede,
because the respondent and his men were fencing the subject property. Consumo
obliged, personally saw the fence being built, and observed that even the trucks
owned by petitioner were enclosed therein. When he asked respondent if he had
the necessary permit and the proper barangayclearance to do so, respondents
lawyer, Atty. San Gaspar, replied that there was no need for the permit and
clearance since respondent was just fencing his own property. Thus, Consumo
could not prevent the ongoing fencing, but told respondent and company to wait
for petitioner to decide the matter.

Consumo further alleged that after putting up the fence, respondent and his
companions left without waiting for the arrival of petitioner. When petitioner
arrived, he explained to the people present that the property enclosed by
respondent is owned by the government and that no one is allowed to construct any
fence without a permit from him, as the Municipal Engineer, or from any building
official of the local government of Naic, Cavite. Consumo said that the residents
affected by the fence constructed by respondent were the ones who pulled out the
concrete posts in order to provide access to the national road. These residents
included the petitioner, whose trucks used for delivering sand and hollow blocks
were enclosed and also denied access.

In his Counter-Affidavit,[14] Elizalde Telmo denied having encroached,
occupied or taken possession of respondents property. He claimed that, on May 10,
2005, he was merely an onlooker to the altercation between petitioner and
respondent. He said that petitioner, his brother, insisted that respondent could not
enclose the property in question unless the latter obtains a building permit from the
Office of the Municipal Engineer/Building Official, since it appeared that the
subject property was no longer a property of respondent but was converted into
government property by virtue of the 30-meter road set-back imposed by the
Zoning Ordinance of the Municipality of Naic, Cavite. Elizalde Telmo stated that
he did not offer any resistance to the fencing of the property in question. He
observed, though, that when they learned that petitioner was arriving at the place,
respondent and his companions just left the vicinity.

Later, petitioner and respondent filed their respective position papers[15] upon
the directive of the Graft Investigating and Prosecuting Officer. Their position
papers reiterated the allegations made in their respective affidavits earlier
submitted.

In the Decision[16] dated October 13, 2005, the Office of the Deputy
Ombudsman for Luzon found petitioner and Danilo Consumo administratively
liable, but dismissed the charge against Elizalde Telmo for lack of jurisdiction over
his person, he being a private individual. The dispositive portion of the Decision
states

WHEREFORE, premises considered, the undersigned investigator
respectfully recommends the following, to wit:

(1) That the administrative complaint against respondent Elizalde Telmo
be DISMISSED for lack of jurisdiction;

(2) That respondent Guillermo Telmo be meted the PENALTY OF FINE
EQUIVALENT TO SIX (6) MONTHS SALARY for violation of
Section 4 of Republic Act No. 6713; and

(3) That respondent Danilo Consumo be meted the PENALTY OF FINE
EQUIVALENT TO THREE (3) MONTHS HONORARIA for
violation of Section 4 of Republic Act No. 6713.

SO DECIDED.[17]

Petitioner filed a Motion for Reconsideration,[18] wherein he elaborated that
he just performed his official duties when he summarily removed the concrete
posts erected by respondent to enclose the property.

In the Order[19] dated March 17, 2006, the Office of the Deputy Ombudsman
for Luzon denied the Motion for Reconsideration for lack of merit.

Hence, this petition anchored on the following grounds:

A. THE HONORABLE DEPUTY OMBUDSMAN FOR LUZON
SERIOUSLY ERRED WHEN HE DECLARED THAT THERE WAS NO
VALID TAKING OF RESPONDENTS LOT BY MEANS OF
EXPROPRIATION.

B. THE HONORABLE DEPUTY OMBUDSMAN FOR LUZON
SERIOUSLY ERRED WHEN HE DECLARED THAT PETITIONER SHOULD
BE AUTHORIZED BY THE MUNICIPAL MAYOR OR BY THE COURT TO
ABATE PUBLIC NUISANCE OR NUISANCE PER SE.

C. THE HONORABLE DEPUTY OMBUDSMAN FOR LUZON ERRED
WHEN HE METED THE PENALTY OF FINE EQUIVALENT TO SIX (6)
MONTHS SALARY FOR VIOLATION OF SECTION 4 OF REPUBLIC ACT
NO. 6713.[20]

In essence, petitioner contends that the property claimed and enclosed with
concrete posts by respondent was validly taken by the National Government
through its power of eminent domain, pursuant to Executive Order No. 113, as
amended by Executive Order No. 253, creating the Noveleta-Naic-Tagaytay
Road. In this context, petitioner contends that the concrete posts erected by
respondent were a public nuisance under Article 694 (4) [21] of the Civil Code, more
particularly a nuisance per se, which may be summarily abated under Article 699
(3)[22] of the same Code. Petitioner says that as the Municipal Engineer, he is also
the Building Official of Naic, Cavite; and thus, it was well within his authority,
pursuant to Section 214, paragraph two (2) of the National Building Code, to order
the removal of the concrete posts. Petitioner likewise claims that Section 23 of
Revised Philippine Highway Act (Presidential Decree No. 17)[23] mandated him to
remove respondents concrete posts. Petitioner concludes that since he merely
performed his official duties in removing the concrete posts erected by petitioner
from the property, which is already owned by the government, he must be absolved
of any administrative liability.

Instead of filing his comment on the petition, respondent manifested through
counsel that he is no longer interested in pursuing this case, submitting therewith
his Affidavit of Desistance[24] dated December 5, 2007. Respondent alleged in the
affidavit that the administrative charges he lodged against petitioner were brought
about by a misunderstanding between them, which differences have already been
settled. Consequently, this case should now be dismissed.

We disagree.

The desistance of the complainant does not necessarily result in the
dismissal of the administrative complaint because the Court attaches no persuasive
value to a desistance, especially when executed as an afterthought. [25] It should be
remembered that the issue in an administrative case is not whether the complaint
states a cause of action against the respondent, but whether the public officials
have breached the norms and standards of the public service.[26] Considering that
petitioner admitted in his pleadings that he summarily removed the concrete posts
erected by respondent, allegedly within the parameters of his authority as
Municipal Engineer of Naic, Cavite, it is only proper that this case be decided on
its merits rather than on the basis of the desistance of respondent.

It cannot be denied that respondents property was taken by the National
Government thru the Department of Public Works and Highways when it
constructed the Noveleta-Naic-Tagaytay Road. What is not clear from the records
of this case is whether respondents property was taken as part of the national road
itself or only as part of the right-of-way easement therefor. We observe that the re-
survey plan[27] of his property attached by respondent to his complaint and the
survey plan[28] of the Noveleta-Naic-Tagaytay Road submitted by petitioner appear
to be different. Nevertheless, it is evident from the sketch plans that respondent
could not enclose his property because it is now being used by the National
Government. Therefore, whatever cause of action respondent may have in his
claim for just compensation for the taking of his property, the same should be
lodged against the National Government.

While it is settled that respondent does not have the legal right to enclose the
property, we should now determine whether petitioner indeed performed his
official functions properly.

First. Petitioner claims that his act of summarily removing respondents
concrete posts was authorized under the National Building Code (Presidential
Decree No. 1096).The provision he cites correctly pertains to Section 215, which
reads

Sec. 215. Abatement of Dangerous Buildings.When any building or
structure is found or declared to be dangerous or ruinous, the Building Official
shall order its repair, vacation or demolition depending upon the decree of danger
to life, health, or safety. This is without prejudice to further action that may be
taken under the provisions of Articles 482 and 694 to 707 of the Civil Code of
the Philippines.

To better understand this provision, we refer to Section 214 of the same law,
which defines what are dangerous and ruinous buildings or structures susceptible
of abatement. It provides

Sec. 214. Dangerous and Ruinous Buildings or Structures. Dangerous
buildings are those which are herein declared as such or are structurally unsafe or
not provided with safe egress, or which constitute a fire hazard, or are otherwise
dangerous to human life, or which in relation to existing use, constitute a hazard
to safety or health or public welfare because of inadequate maintenance,
dilapidation, obsolescence, or abandonment, or which otherwise contribute to the
pollution of the site or the community to an intolerable degree.

A careful reading of the foregoing provisions would readily show that they
do not apply to the respondents situation. Nowhere was it shown that the concrete
posts put up by respondent in what he believed was his and his co-owners property
were ever declared dangerous or ruinous, such that they can be summarily
demolished by petitioner.

What is more, it appears that the concrete posts do not even fall within the
scope of the provisions of the National Building Code. The Code does not
expressly define the word building. However, we find helpful the dictionary
definition of the word building, viz:

[A] constructed edifice designed usually covered by a roof and more or
less completely enclosed by walls, and serving as a dwelling, storehouse, factory,
shelter for animals, or other useful structure distinguished from structures not
designed for occupancy (as fences or monuments) and from structures not
intended for use in one place (as boats or trailers) even though subject to
occupancy.[29]

The provisions of the National Building Code would confirm that building
as used therein conforms to this definition. Thus, applying the statutory
construction principle of ejusdem generic,[30] the word structure should be
construed in the context of the definition of the word building. The concrete posts
put up by respondent on the property are not properly covered by the definition of
the word building nor is it embraced in the corresponding interpretation of the
word structure.

Second. Petitioner contends that respondents concrete posts were in the
nature of a nuisance per se, which may be the subject of summary
abatement sans any judicial proceedings. Again, we disagree.

A nuisance per se is that which affects the immediate safety of persons and
property and may be summarily abated under the undefined law of necessity.
[31]
Evidently, the concrete posts summarily removed by petitioner did not at all
pose a hazard to the safety of persons and properties, which would have
necessitated immediate and summary abatement. What they did, at most, was to
pose an inconvenience to the public by blocking the free passage of people to and
from the national road.

Third. Petitioner likewise maintains that his authority to perform the assailed
official act sprang from Section 23 of the Revised Philippine Highway Act. He
posits that this provision is particularly implemented by Department Order No. 52,
[32]
Series of 2003 of the Department of Public Works and Highways for the
Removal of Obstructions and Prohibited Uses within the Right-of-Way of National
Roads.

Department Order No. 52 directs all District Engineers to immediately
remove or cause the removal of all obstructions and prohibited uses within the
right-of-way of all national roads in their respective jurisdictions. These
obstructions and prohibited uses include, among others, all kinds of private,
temporary and permanent structures, such as buildings, houses, shanties, stores,
shops, stalls, sheds, posts, canopies, billboards, signages, advertisements, fences,
walls, railings, basketball courts, garbage receptacles, and the like. The Department
Order requires the District Engineers to issue notices to the concerned persons to
remove the obstructions and prohibited uses within the right-of-way, and shall
follow through prompt compliance with these notices and full implementation of
the Order. It further provides that appropriate sanctions will be taken against those
who fail to comply with its provisions.

Gauging the action of petitioner based on the guidelines set by Department
Order No. 52, from which he claims his authority, we cannot but conclude that
petitioner went beyond the scope of his official power because it is the concerned
District Engineer of the Department of Public Works and Highways who should
have ordered respondent to remove the concrete posts. The petitioner failed to
show that he was duly authorized by the District Engineer to implement the
Department Order in Naic, Cavite. More importantly, even assuming that petitioner
had been duly authorized to order the removal of the concrete posts of respondent,
he failed to prove that he issued the required notice to respondent to remove the
said structures before he did the removal himself. Note that petitioner, in fact,
admitted in his pleadings that he summarily removed the said posts.

The Revised Philippine Highway Act and Department Order No. 52 do not
expressly provide for the administrative sanction to be taken against public
officials violating their provisions. Hence, we must refer to the Uniform Rules on
Administrative Cases in the Civil Service. We believe that the administrative
offense committed by petitioner through the questioned act was only Discourtesy
in the Course of Official Duties, which is a light offense under Rule IV, Section 52
of the said Rules. The penalties imposable for such an offense are a reprimand for
the first offense, a suspension from 1 day to 30 days for the second offense, and
dismissal from public service for the third offense. Since this appears to be
petitioners first offense, his action warrants only a REPRIMAND.

WHEREFORE, the Decision dated October 13, 2005 and the Order dated
March 17, 2006 of the Office of the Deputy Ombudsman for Luzon finding
petitioner Guillermo M. Telmo, Municipal Engineer of Naic, Cavite,
administratively culpable for violation of Section 4 of Republic Act No. 6713,
imposing upon him the penalty of fine equivalent to his six 6-month salary, must
be MODIFIED. Guillermo M. Telmo is instead found administratively guilty
of DISCOURTESY IN THE COURSE OF OFFICIAL DUTIES and is
hereby REPRIMANDED. Costs against petitioner.

SO ORDERED.

Associate Justice

WE CONCUR:

Associate Justice
Chairperson

MINITA V. CHICO-NAZARIO PRESBITERO J. VELASCO, JR.

DIOSDADO M. PERALTA
Associate Justice

ATTESTATION

I attest that the conclusions in the above Decision were reached in consultation

Associate Justice

CERTIFICATION

Chairperson's Attestation, I certify that the conclusions in the above Decision had

REYNATO S. PUNO
Chief Justice
[1]
Rollo, pp. 3-13.
[2]
Id. at 22-27.
[3]
Id. at 14-21.
[4]
Ombudsman Records, pp. 1-5.
[5]
Art. 312. Occupation of real property or usurpation of real rights in property. Any person who, by means of
violence against or intimidation of persons, shall take possession of any real property or shall usurp any real rights in
property belonging to another, in addition to the penalty incurred for the acts of violence executed by him, shall be
punished by a fine from 50 to 100 per centum of the gain which he shall have obtained, but not less than 75 pesos.
If the value of the gain cannot be ascertained, a fine of from 200 to 500 pesos shall be imposed.
[6]
Section 3. Corrupt practices of public officers In addition to acts or omissions of public officers already penalized
by existing law, the following shall constitute corrupt practices of any public officer and are hereby declared to be
unlawful:
xxx
(e) Causing any undue injury to any party, including the Government, or giving any private party any unwarranted
benefits, advantage or preference in the discharge of his official, administrative or judicial functions through
manifest partiality, evident bad faith or gross inexcusable negligence. This provision shall apply to officers and
employees of offices or government corporations charged with the grant of licences or permits or other concessions.
[7]
Anti-Graft and Corrupt Practices Act.
[8]
Section 4. Norms of Conduct of Public Officials and Employees. (A) Every public official and employee shall
observe the following as standards of personal conduct in the discharge and execution of official duties:
(a) Commitment to public interest. Public officials and employees shall always uphold the public interest over and
above personal interest. All government resources and powers of their respective offices must be employed and used
efficiently, effectively, honestly and economically, particularly to avoid wastage in public funds and revenues.
[9]
(b) Professionalism. Public officials and employees shall perform and discharge their duties with the highest
degree of excellence, professionalism, intelligence and skill. They shall enter public service with utmost devotion
and dedication to duty. They shall endeavor to discourage wrong perceptions of their roles as dispensers or peddlers
of undue patronage.
[10]
(c) Justness and sincerity. Public officials and employees shall remain true to the people at all times. They must
act with justness and sincerity and shall not discriminate against anyone, especially the poor and the
underprivileged. They shall at all times respect the rights of others, and shall refrain from doing acts contrary to law,
good morals, good customs, public policy, public order, public safety and public interest. They shall not dispense or
extend undue favors on account of their office to their relatives whether by consanguinity or affinity except with
respect to appointments of such relatives to positions considered strictly confidential or as members of their personal
staff whose terms are coterminous with theirs.
[11]
(e) Responsiveness to the public. Public officials and employees shall extend prompt, courteous, and adequate
service to the public. Unless otherwise provided by law or when required by the public interest, public officials and
employees shall provide information of their policies and procedures in clear and understandable language, ensure
openness of information, public consultations and hearings whenever appropriate, encourage suggestions, simplify
and systematize policy, rules and procedures, avoid red tape and develop an understanding and appreciation of the
socio-economic conditions prevailing in the country, especially in the depressed rural and urban areas.
[12]
Code of Conduct and Ethical Standards for Public Officials and Employees.
[13]
[14]
Id. at 28.
[15]
For the respondents, id. at 30-33; for the complainant, id. at 38-45.
[16]
Rollo, pp. 22-27.
[17]
Id. at 26.
[18]
Id. at 49-56.
[19]
Id. at 14-21.
[20]
Id. at 6.
[21]
Art. 694. A nuisance is any act, omission, establishment, business, condition of property, or anything else which:
xxx
(4) Obstructs or interferes with the free passage of any public highway or street, or any body of water; x x x.
[22]
Art. 699. The remedies against a public nuisance are:
xxx
(3) Abatement, without judicial proceedings.
[23]
It shall be unlawful for any person to usurp any portion of a right of way, to convert any part of any public
highway, bridge, wharf or trail to his own private use or to obstruct the same in any manner.
[24]
Rollo, p. 68.
[25]
People v. Dimaano, G.R. No. 168168, September, 14, 2005, 469 SCRA 647, 663.
[26]
Vilar v. Angeles, A.M. No. P-06-2276, February 5, 2007, 514 SCRA 147, 156.
[27]
Ombudsman Records, p. 8.
[28]
Rollo, p. 28.
[29]
Websters Third New International Dictionary (Unabridged), 1993, p. 292.
[30]
Under the principle of ejusdem generis, where a statute describes a thing of a particular class or kind
accompanied by words of a generic character, the generic word will usually be limited to things of a similar nature
as those particularly enumerated, unless there be something in the context of the statute that would repel such
inference.
[31]
Tayaban v. People, G.R. No. 150194, March 6, 2007, 517 SCRA 488, 507.
[32]
THIRD DIVISION

PRIVATE DEVELOPMENT G.R. No. 136897
CORPORATION OF THE
PHILIPPINES, PELAGIO Present:
TOLOSA, in his capacity as
Register of Deeds, General PANGANIBAN, J., Chairman
Santos City, and ATANACIO M. SANDOVAL-GUTIERREZ,
VILLEGAS, CORONA,
Petitioners, CARPIO MORALES, and
GARCIA, JJ.
- versus -

THE COURT OF APPEALS and Promulgated:
GENERAL SANTOS DOCTORS
HOSPITAL, INC., November 22, 2005
Respondents.

x------------------------------------------------------------------------------------x

DECISION

GARCIA, J.:

In this petition for review on certiorari under Rule 45 of the Rules of
Court, petitioners Private Development Corporation of the Philippines and
Atanacio M. Villegas seek the reversal and setting aside of the following
issuances of the Court of Appeals in CA-G.R. CV No. 52542, to wit:

1. Decision dated July 16, 1998,[1] affirming an earlier decision of
the Regional Trial Court at General Santos City which ordered the petitioners, in
particular petitioner Atanacio M. Villegas, to present before the Register of Deeds
of General Santos City TCT No. T-32610 covering Lot 908-B-6-L-4-B for the
annotation thereon of a Memorandum of Agreementestablishing an easement of
right-of-way in favor of private respondent General Santos Doctors Hospital,
Inc.; and

2. Resolution dated January 8, 1999,[2] denying petitioners motion
for reconsideration.

Culled from the records are the following factual antecedents:

The spouses Agustin Narciso and Aurora Narciso (the Narcisos, for
short) were the original owners of two (2) lots situated at Barrio Lagao,
General Santos City, Cotabato.

The first lot, which is a portion of a bigger parcel of land known as
Lot No. 908-B-6-L-3 and covered by TCT No. 22608, is identified as Lot No.
908-B-6-L-3-A, hereinafter referred to as the interior lot, with an area of
one (1) hectare. Adjacent to this lot and abutting the national highway is
the second lot, Lot No. 908-B-6-L-4-B, hereinafter referred to as
the exterior lot, covered by TCT No. 13550.[3]

On September 6, 1968, the Narcisos executed in favor of herein
respondent, General Santos Doctors Hospital, Inc. (GSDHI)
an Option to Buy[4] the interior lot, subject, among others, to the
condition that:

5. The vendors shall construct a 10 meter wide road commencing from the
National Highway, traversing the property of the Vendors and terminating
perpendicularly at the mid-point of the Southern boundary of the property
subject of this Option, facing the national highway. Additionally, the
vendors shall also construct a 10 meter wide road alongside the same
southern boundary of the subject land, forming a right angle with the road
first above described. The Vendors shall also provide drainage facilities.[5]

True enough, on September 25, 1968, the interior lot was bought
by GSDHI, as evidenced by a Deed of Absolute Sale.[6]

On the same day of the sale, a Memorandum of Agreement[7] was
executed by and between the Narcisos and GSDHI, paragraph 7 of which
practically reproduced the same condition, supra, appearing in the
earlier Option to Buy, thus:

7. The vendors [Narcisos] also known as Party of the First Part, shall construct a
ten (10) meter wide road commencing from the National Highway,
traversing the property of the vendors and terminating perpendicularly at
the mid-point of the Southern boundary of the property subject of the sale
facing the National Highway. Additionally, the vendors or party of the
first part, shall also construct a ten (10) meter wide road alongside the
same Southern boundary of the subject land, forming a right angle with
the road first above-described. The vendors shall also provide drainage
facilities.[8]

Years later, or on September 30, 1977, the exterior lot was mortgaged by
the Narcisos to one of the petitioners herein, Private Development
Corporation of the Philippines (PDCP). Upon the Narcisos failure to
pay the mortgage obligation, the mortgage was foreclosed and the
mortgaged property (exterior lot) sold at a public auction on June 21, 1982
with PDCP as the lone bidder. Accordingly, the Narcisos title covering
the exterior lot was cancelled and in lieu thereof TCT No. 23202 was
issued in the name of PDCP.

On April 18, 1988, in the Regional Trial Court at General Santos City,
respondent GSDHI, claiming that it has an easement of right-of-way over
the foreclosed property (exterior lot), filed a complaint for specific
performance against PDCP, therein impleading the Register of Deeds of
General Santos City, Pelagio T. Tolosa, as a nominal party-defendant, to
compel PDCP to present before the Register of Deeds its duplicate copy of
TCT No. 23202 over the exterior lot for the annotation thereon of
the Memorandum of Agreement establishing an easement of right-of-way
in favor of GSDHI.
In its complaint, docketed with the trial court as Civil Case No. 4128,
respondent GSDHI, as plaintiff, alleged that the easement was a condition
and primary consideration for its purchase from the Narcisos of
the interior lot so that the hospital it intends to build thereat would have
an access to the national highway; that the grant is evidenced by two (2)
public documents executed between it and the Narcisos, i.e., Option to
Buy[9] the interior lot dated September 6, 1968 and Memorandum of
Agreement[10] dated September 25, 1968; that the portion covered by the
easement was inadvertently and erroneously included in the mortgage of
the exterior lot as the same was not segregated from the mother title;
that upon informing PDCP of the easement on January 27, 1983, it
(respondent) even offered to buy the whole exterior lot so as to avoid
future litigation but although negotiations lasted until August of 1988, no
agreement was reached on the price, hence, it (respondent) opted to
continue and preserve the easement of right-of-way established in its favor
since 1968.

In its Answer, PDCP denied any knowledge of the alleged easement
of right-of-way, averring that it was not a party to any of the transactions
between respondent and the Narcisos. PDCP argued that the Option to Buy
and Memorandum of Agreement cannot by themselves constitute a valid
agreement to create and vest in favor on respondent an easement of right-
of-way in the absence of terms providing for, among others, the amount of
consideration therefor. And, even assuming that the Memorandum of
Agreement created such an easement, PDCP contended that it cannot be
bound thereby because said agreement was not duly inscribed and
registered with the Registry of Deeds. Furthermore, PDCP asserted that it
is an innocent purchaser for value and in good faith, hence, the alleged
easement cannot be enforced against it.

Meanwhile, during the pendency of the case, or sometime in January,
1989, PDCP sold the exterior lot to the other petitioner herein, Atanacio
M. Villegas. On account thereof, PDCPs title over the exterior lot was
cancelled and TCT No. 32610 issued in the name of Villegas.

Consequently, respondent GSDHI amended its complaint by
impleading Villegas as additional party-defendant. For his part, Villegas
formally adopted PDCPs aforementioned allegations and defenses in
its Answer.

Eventually, in a decision dated December 15, 1998,[11] the trial court

rendered judgment for plaintiff GSDHI and against defendants PDCP and
Villegas, to wit:

Accordingly, judgment is rendered for the plaintiff and against the
defendants ordering the latter, particularly Atanacio M. Villegas to present before
the Register of Deeds of General Santos City Transfer Certificate of Title No. T-
32610 for annotation of the Memorandum of Agreement establishing the
casement of right-of-way in favor of the plaintiff.

SO ORDERED.
Explains the trial court in its decision:

The long and short of the seeming complexity of the issues raised by the
parties is summed up by the question of whether or not the plaintiff under the
circumstances is entitled to compel the defendants particularly Atanacio M.
Villegas to respect and annotate in the certificate of title the easement of right of
way, or conversely whether the defendants are innocent mortgagor or purchaser
for value, hence not bound by it.

The dominion of the plaintiff over the disputed road that virtually cut into
two lot 908-B-6-L-4-B comprising a total area of 1,000 square (10 m x 100m)
was elucidated and clarified by Agustin N. Narciso, the source of plaintiffs rights.
(Exhibits A and B) When Lot 908-B-L-3-A was sold by Narciso to GSDHI way
back on September 25, 1963 the imperfection of the document of absolute sale
was discovered at once. (Exhibit D) So a Memorandum of Agreement was
executed that same day to rectify the omission and put in black and white the
agreement regarding the direct access road to the national highway passing
through the adjoining lot 908-B-6-L-4-B then owned by Narciso. (Exhibit E) The
relevant portion of the agreement provides:

xxx 7. The vendors also known as Party of the First Part, shall
construct a ten (10) meter wide road commencing from the
National Highway, traversing the property of the vendors and
terminating perpendicularly at the mid-point of the Southern
boundary of the property subject of the sale facing the National
Highway. Additionally, the vendors or party of the first part,
shall also construct a ten (10) meter wide road alongside the
same Southern boundary of the subject land, forming a right
angle with the road first above-described. The vendors shall
also provide drainage facilities. xxx

Prior to the execution of the Deed of Absolute Sale and the Memorandum of
Agreement, the Narcisos and the plaintiff executed a document denominated
Option to Buy on September 6, 1968, the pertinent portion of which provides:

xxx 5. The vendors shall construct a 10 meter wide road
commencing from the National Highway, traversing the property
of the Vendors and terminating perpendicularly at the mid-point of
the Southern boundary of the property subject of this Option,
facing the national highway. Additionally, the vendors shall also
construct a 10 meter wide road alongside the same southern
boundary of the subject land, forming a right angle with the road
first above described. The Vendors shall also provide drainage
facilities. xxx
In keeping with their agreement with the plaintiff, the Narcisos caused to
be constructed a 10 meter wide road starting from the National Highway passing
through Lot 908-B-6-L-4-B until the mid-point of the Southern boundary of Lot
908-B-L-3-A which was the property sold to the plaintiff. He also had a 10 meter
wide road alongside the southern boundary of the land sold to the plaintiff
forming an angle with the road that commenced from the national highway.

These undertakings of the Narcisos were in compliance with their
agreement with the plaintiff to guarantee direct access to the national highway
from the hospital that was to be constructed by the plaintiff on inner Lot 908-B-L-
3-A. The total consideration for the sale of Lot 908-B-L-3-A covering an area of
one hectare was P100,000.00 and an additional of P10,000.00 was paid for the 10
meter wide road right-of-way from the southern boundary of the property straight
to the national highway with an approximate length of 100 meters. This was not
specifically mentioned in the Deed of Absolute Sale but this was in pursuance of
their agreement that the one hectare lot was priced at P10.00 per square meter, or
for P100,000.00. Narcisos agreement with the plaintiff for the construction of the
road right-of-way was for its use in perpetuity by the plaintiff as well as the
public. The road right-of-way was constructed immediately upon execution of the
Deed of Sale but it is being maintained ever since by the plaintiff. The road was
located in the shortest distance between the national highway and the hospital of
the plaintiff and because of it the property over which the easement of road right-
of-way passing through at the middle was substantially benefited making it
commercial.
Sometime in 1976 or 1977, the Narcisos mortgaged Lot 908-B-6-L-4-B which was the
servient estate to PDCP thru its branch office in Davao City. As a requirement,
the Narcisos submitted to PDCP the title of the land, the map and the sketch on
the easement that was granted by the plaintiff to the CSDHI. When the property
was inspected, Agustin Narciso showed the extent of the property offered as
collateral and together with the manager and other officers of the PDCP even
passed through the road right-of-way in question. The metes and bounds of the
Narcisos property was also shown to the officers of the PDCP including the
signboard along the national highway leading to the hospital. Thereafter the loan
was approved.

On cross-examination, Agustin Narciso admitted having mortgaged the property covered
by his title but excluding the 10 X 100 meter road which was paid for by the
plaintiff. The Memorandum of Agreement, however, and the Option to Buy which
embodied the meeting of minds of the plaintiff and the Narcisos regarding the
easement of right-of-way over Lot 908-B-6-L-4-B was not registered or
annotated. Agustin Narciso reiterated that when the property mortgaged to PDCP
was verified, several personnel of PDCP came, a certain Mr. Rey Feria, Mr. Lim,
Mr. Alcantara and a certain Mr. Delgado. He did not, however, furnish them
copies of the Option to Buy and the Memorandum of Agreement.

The importance of the road right-of-way to the plaintiff was underscored
by officers of the plaintiff. Acquisition of the hospital site was premised on the
grant by the then owner and seller Agustin Narciso of the ten meter wide access
road through the servient property owned by the seller. It was a condition sine qua
non of the contract between plaintiff and the Narcisos because the plaintiff wanted
the site to be a bit far from the national highway but with easy and direct access to
the highway because of the nature of the business they were putting up. The
hospital having been constructed sometime in 1968, plaintiff maintained the 10 x
100 meters road to the highway and used it including the public openly,
continuously and notoriously without being challenged by any party.

When the Narcisos failed to pay their account with the defendant PDCP Lot 908-
B-L-3-B which was put up as guarantee thereof was foreclosed and in the
subsequent public auction sale the defendant PDCP was the lone bidder and
therefore it became the owner.

The plaintiff learned of the acquisition by PDCP of the property
previously owned by the Narcisos and steps were taken by the plaintiff to buy
peace when it was realized that the Memorandum of Agreement as well as the
Option to Buy evidencing their ownership of the road right-of-way of 10 x 100
meters was only duly recorded with the Register of Deeds. Negotiations were had
with the defendant PDCP but no agreement was reached because of the wide gap
between the offers and counter offers made.

In the meantime, the defendant PDCP never asserted that it is the rightful
owner of the road right-of-way, neither did it interrupt the continued use by the
plaintiff and the general public of the road in question.

Requests were made of the defendant PDCP to allow the plaintiff to have
its right over the road right-of-way annotated in the title of the said defendant but
it was ignored. Overtures were made by the plaintiff to buy peace or as gesture of
compromise to the defendant PDCP but those were fruitless.

The defendants, particularly the original and one of the principal
defendants, did not challenge the genuiness and authenticity of the documents in
the possession of the plaintiff and presented in evidence like the Option to Buy,
Memorandum of Agreement and the Deed of Absolute Sale. The centerpiece of
PDCPs defense was the nonregistration of the Option to Buy and Memorandum of
Agreement embodying the right of the plaintiff over the contested road right of
way.

The defendant Atanacio M. Villegas relied entirely on the defenses put up
by its predecessor-in-interest PDCP.
It was the contention also of the defendant PDCP that had it known of the
existence of the road right-of-way over the property mortgaged and subsequently
acquired by it in a public auction sale, they would not have paid the big amount
for the property considering that with the existence of the road right-of-way the
value of the property was very much diminished.

Considering, however, that the defendant PDCP is a banking institution
and it is normal business practice that when loan is granted the property offered as
security is invariably inspected, it would be unlikely cr unrealistic that the
defendant PDCP accepted Lot-908-B-6-L-4-B without knowing its actual state.
The evidence also disclosed that when the loan was contracted by the previous
owner Agustin Narciso several officers of the bank repaired to the area and made
an on-the-spot verification of the land.

On the part of Atanacio Villegas, his attorney-in-fact who took the witness
stand affirmed that the road right-of-way has been in existence way back in the
late 1960s and he noticed it when he frequently traveled to General Santos City
even when this was still a rustic community as reflected in his testimony.

In the light of the undisputed facts obtaining that the road right-of-way is
conspicuously situated and has been in existence and in constant use for a long
period of time, or for over 25 years failure of the plaintiff to cause the registration
of its road right-of-way did not in the face of reality militate against its right over
the casement.[12]

From the trial courts decision, petitioners went to the Court of Appeals (CA)
whereat their appellate recourse was docketed as CA-G.R. CV No. 52542.

In the herein assailed Decision dated July 16, 1998, the CA
affirmed that of the trial court.

With their motion for reconsideration having been denied by the
appellate court in its equally challenged Resolution of January 8, 1999,
petitioners are now with us via this petition for review, imputing error to
the CA: (1) in affirming the lower courts decision without first resolving the
issue of whether or not respondent is entitled to an easement of right-of-
way; (2) in finding and concluding that petitioners are not innocent
mortgagees or purchasers for value; and (3) in not holding that respondent
GSDHI is not entitled to a legal easement of right-of-way.

The petition is bereft of merit.

At bottom, the issues are: (1) whether or not respondent GSDHI has
an easement of right-of-way over the exterior lot (Lot No. 908-B-6-L-4-
B); and (2) whether or not petitioners are innocent mortgagees/purchasers
for value of the same lot.

We resolve both issues in favor of respondent.

As defined, an easement is a real right on anothers property,
corporeal and immovable, whereby the owner of the latter must refrain
from doing or allow somebody else to do or something to be done on his
property, for the benefit of another person or tenement.[13] Easements are
established either by law or by the will of the owner. The former are called
legal, and the latter, voluntary easements.[14]

As correctly found by the trial court, the easement of right-of-way
over the exterior lot in favor of respondent GSDHI was voluntarily
constituted by agreement between the latter and the original owner
thereof, the Narcisos.

It is beyond cavil that the Narcisos did intend to establish an
easement of right-of-way over the exterior lot for the respondents
benefit. This is very evident from the fact that in the Option to Buy in
connection with the interior lot, one of the conditions stipulated upon is
that the Narcisos will construct two (2) ten-meter wide roads along
the exterior lot from the interior lot leading to the national highway.[15]

True, the Deed of Absolute Sale between respondent and the
Narcisos covering the interior lot did not embody the aforementioned
condition. It was precisely to cure this deficiency, however, that on the
very same day the deed of sale was executed, the Narcisos and respondent
forged a Memorandum of Agreement to reflect what they failed to state in
the document of sale. In the precise words of the trial court: xxx the
imperfection of the document of absolute sale was discussed at once
(Exhibit D). So a Memorandum of Agreement was executed that same day
to rectify the omission and put in black and white the agreement regarding
the direct access road to the national highway passing through the
adjoining lot 908-B-6-L-4-B then owned by Narciso.

Moreover, contrary to the petitioners assertion, the Narcisos grant of
the easement to respondent was for a valuable consideration. Again, we
quote from the trial courts decision:

The total consideration for the sale of Lot 908-B-L-3-A covering an area
of one hectare was P100,000.00 and an additional of P10,000.00 was paid for the
10 meter wide road right-of-way from the southern boundary of the property
straight to the national highway with an approximate length of 100 meters. This
was not specifically mentioned in the Deed of Absolute Sale but this was in
pursuance of their agreement that the one hectare lot was priced at P10.00 per
square meter, or for P100,000.00.[16]

In any event, it bears stressing that the two courts below are one in
their common factual finding about the existence of the conventional
easement of right of way in favor of respondent. Absent, as here, of any
credible evidence to the contrary, the Court is not inclined to disturb such a
finding. After all, this Court is not a trier of facts.

Having ruled on the existence of an easement of right of way, we
now come to the second issue.

It is petitioners posture that they cannot be bound by the subject
easement because the Memorandum of Agreement establishing the same
was not annotated in the certificate of title of the exterior lot and
registered with the Registry of Deeds. Having relied on a title which does
not reflect any easement thereon, petitioner PDCP contends that it was an
innocent mortgagee and later an innocent purchaser for value. Chanting
the same tone, petitioner Villegas insists that he, too, is an innocent
purchaser of said lot.

We are unimpressed.

Concededly, a person, be he a buyer or mortgagee, dealing with a
titled property, as the exterior lot is, is not required to go beyond what
appears on the face of the covering title itself.[17] Section 39 of Act 496 or
the Land Registration Decree[18]says as much.
Unfortunately for petitioner PDCP, however, the aforementioned rule
does not apply to banks,[19] of which PDCP is. So it is that in Robles vs. CA,
[20]
this Court, citing Tomas vs. Tomas,[21] ruled:

xxx Banks, indeed, should exercise more care and prudence in dealing even with
registered lands, than private individuals, for their business is one affected with
public interest, keeping in trust money belonging to their depositors, which they
should guard against loss by not committing any act of negligence which amounts
to lack of good faith by which they would be denied the protective mantle of land
registration statute, Act 496, extended only to purchasers for value and in good
faith, as well as to mortgagees of the same character and description. xxx

Considering the foregoing, and bearing in mind that judicial notice is
taken of the standard practice for banks, before approving a loan, to send
representatives to the premises of the land offered as collateral,[22] PDCPs
feigned ignorance of the road right-of-way, much less of the existence of
the road itself along the exterior lot, is simply ridiculous, to say the least,
more so in the light of the factual findings of the two courts below that
PDCP, contrary to its assertion, had indeed sent its personnel to inspect the
land when the same was mortgaged to it by the Narcisos. For sure, as
found by the appellate court, no less than PDCPs own Legal Officer, Virgilio
Lagunilla, admitted that an appraisal was conducted by the bank on
the exterior lot before accepting the mortgage thereof. Says the
appellate court in this respect:

We have the confirmation on cross examination of the PDCP Legal Officer,
Virgilio Lagunilla, in the matter of PDCPs practice of appraising the property,
being offered as collateral, which calls for an actual examination of the condition
of the property. He even admitted that an appraisal was conducted by the bank on
the exterior lot before the mortgage, the reason being that it is the Central Banks
requirement to limit the loans of commercial banks to only 70% of the appraise
value of the security being offered. As for PDCP, there was an uncharacteristic
silence on the result of the appraisal of the exterior lot which presupposes the
observation that the bank, at the time of the mortgage, knew about the existence
of the easement. The nature alone of the easement of right-of-way, which is ten
meters wide and open to the public for its use continuously supports the
observation that its easement was never overlooked by the bank at the time of the
propertys appraisal. We cannot allow actual notice of knowledge of the burden on
the property to be denied on the mere pretension alone that the title does not bear
any annotation of such burden.

Equally unworthy of belief is petitioner Villegas protestation of
innocence of the easement in question.

It is a matter of record that prior to his purchase of the exterior lot,
Villegas, through his attorney-in-fact, Benjamin Miranda, was very much
aware of the existence of a road over said lot since the 1960s. Again, to
quote from the assailed decision of the appellate court:

xxx His (Mirandas) other admission was that Villegas knew of the
easement before purchasing the property. He even added that he was consulted by
Villegas himself before the purchase and he told him (Villegas) that there was an
existing road from the hospital leading to the national highway.

In Lagandaon vs. CA,[23] we said:

As a general rule, every buyer of a registered land who takes a certificate
of title for value and in good faith shall hold the same free of all encumbrances
except those noted on said certificate. It has been held, however, that where the
party has knowledge of a prior existing interest which is unregistered at the time
he acquired a right to the same land, his knowledge of that prior unregistered
interest has the effect of registration as to him. xxx

WHEREFORE, the assailed issuances of the appellate court
are AFFIRMED and this petition DISMISSED for lack of merit.


SO ORDERED.

CANCIO C. GARCIA
Associate Justice

WE CONCUR:

Associate Justice
Chairman

ANGELINA SANDOVAL-GUTIERREZ RENATO C. CORONA

Associate Justice

ATTESTATION

I attest that the conclusions in the above decision were reached in
Courts Division.

Associate Justice

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, and the Division
Chairman's Attestation, it is hereby certified that the conclusions in the
above decision were reached in consultation before the case was assigned
to the writer of the opinion of the Court.

HILARIO G. DAVIDE, JR.
Chief Justice
[1]
Penned by Associate Justice Bernardo LL. Salas (ret.) and concurred in by Associate Justices, (now both ret.)
Fermin Martin, Jr. and Candido V. Rivera; Rollo, pp. 149-161.
[2]
Rollo, p. 163.
[3]
Mistakenly referred to as TCT No. 3550 in the RTC Decision.
[4]
Rollo, pp. 48-50.
[5]
Ibid at p. 49.
[6]
Rollo, pp. 46-47.
[7]
Rollo, pp. 51-52.
[8]
Ibid at p. 52.
[9]
Supra.
[10]
Supra.
[11]
Rollo, pp. 62-69.
[12]
Ibid at pp. 64-68.
[13]
3 Sanchez Roman 472; Quimen vs. CA, 257 SCRA 163, 169 [1996].
[14]
Art. 619, Civil Code.
[15]
See par. 5, Option to Buy, supra at p. 49.
[16]
RTC DECISION, supra at p. 65.
[17]
Cavite Development Bank vs. Lim, 324 SCRA 346, 358 [2000].
[18]
Sec. 39. Every person receiving a certificate of title in pursuance of a decree of registration, and every subsequent
purchaser of registered land who takes a certificate of title for value in good faith shall hold the same free
of all encumbrance except those noted on said certificate, and any of the following encumbrances which
may be subsisting, namely:

First. Liens, claims, or rights arising or existing under the laws or Constitution of the United States or of the
Philippine Islands which the statutes of the Philippine Islands cannot require to appear of record in the
Registry.

Second. Taxes within two years after the same became due and payable.

Third. Any public highway, way, private way established by law, or any Government irrigation canal or lateral
thereof, where the certificate of title does not state that the boundaries of such highway, way, or irrigation
canal or lateral thereof, have been determined. But if there are easements or other rights appurtenant to a
parcel of registered land which for any reason have failed to be registered, such easements or rights shall
remain so appurtenant notwithstanding such failure, and shall be held to pass with the land until cut off or
extinguished by the registration of the servient estate, or in any other manner.; now Section 44 of PD 1529
or The Property Registration Decree.
[19]
Robles vs. CA, 328 SCRA 97, 113 [2000].
[20]
Supra.
[21]
98 SCRA 267 [1980].
[22]
DBP vs. CA, 331 SCRA 267, 289 [2000].

[23]
Supra at pp. 342-343 [1998].

FIRST DIVISION

BORROMEO BROS. ESTATE, INC., G.R. Nos. 139594-95
Petitioner,
Present:
SANDOVAL-GUTIERREZ,
- versus - CORONA,
AZCUNA, and
LEONARDO-DE CASTRO, JJ.
EDGAR JOHN A. GARCIA, Promulgated:
Respondent. February 26, 2008
x-----------------------------------------------------------------------------------------x
DECISION

PUNO, C.J.:

Before us is a petition for review on certiorari which seeks the reversal of
the Consolidated Decision[1] and Resolution[2] of the Court of Appeals in CA-G.R.
Sp. Nos. 47049 and 48512 which affirmed the Orders[3] of the Regional Trial Court
(RTC) to annotate an easement of road right of way on the title of petitioner
Borromeo Bros. Estate, Inc. in favor of respondent Edgar John A. Garcia.

On August 17, 1938, Patricia Ruedas Vda. De Andrada (Patricia) executed,

for valuable consideration, a document granting a road right of way to spouses Gil
Garcia and Teresa Escao de Garcia (Garcia couple) over Lot No. 6-H-2 described in
Transfer Certificate of Title (TCT) No. 20923:

I, PATRICIA RUEDAS VDA. DE ANDRADA (Filipina, of legal age, widow and with
residence and postal address at No. 28 Fructuoso Ramos St., City of Cebu, Philippines),
for and in consideration of the sum of TEN PESOS (10.00) to be paid in hand by the
spouses GIL GARCIA and TERESA ESCAO DE GARCIA (Filipinos, both of legal ages (sic) and
residing at Fructuoso Ramos St. (interior), City of Cebu, Philippines), do hereby grant
unto said spouses Gil Garcia and Teresa Escao de Garcia a right of way over lot number
SIX-H-TWO (6-H-2), described in the Transfer Certificate of Title numbered TWENTY
THOUSAND NINE HUNDRED TWENTY FIVE (20925) in the office of the Register of Deeds
for the province of Cebu.[4]
On September 28, 1938, Patricia sold the property to petitioner. The Deed

of Sale contained a provision that the purchase of Lot No. 6-H-2 was subject to
the right of way granted by me (Patricia Ruedas Vda. de Andrada) to the spouses
Gil Garcia and Teresa Escao de Garcia.

On April 17, 1952, the Garcia couple went to the Court of First Instance
(CFI) of Cebu and moved for the annotation of the August 17, 1938 document
executed by Patricia on TCT No. RT-3972.

On June 28, 1952, the CFI of Cebu, through Judge Ignacio Debuque,
ordered:

No opposition having been filed to the motion of the spouses Gil Garcia and
Teresa Escao, through Atty. Vicente Faelnar, dated April 17, 1952, it appearing that the
Borromeo Bros. Estate, Inc. [herein petitioner], through Atty. Filiberto Leonardo,
received a copy of the notice of hearing of said motion on June 24, 1952, the Register of
Deeds for the City and Province of Cebu is hereby ordered to annotate on Transfer
Certificate of Title No. RT-3972 the contents of the documents ratified on August 18,
1938 in said motion.
SO ORDERED.
Petitioner retained ownership over Lot No. 6-H-2 whereas the estate of the
late Garcia couple (Garcia Estate) was inherited by Vicente E. Garcia and Jose E.
Garcia from whom respondent acquired his title in 1996.

Sometime after acquiring the Garcia Estate, respondent came across the
1952 documents that granted to the deceased Garcia couple a road right of way
through petitioners Lot No. 6-H-2. Thus, on May 19, 1997, respondent filed,
before the RTC of Cebu, a cadastral court, a petition captioned Engineer Edgar
John A. Garcia v. The Register of Deeds of Cebu City, G.I.R.O. Rec. No. 5988, Lot
No. 6-H-2. The petition, in which only the Register of Deeds was impleaded,
prayed that:

WHEREFORE, premises considered, this Honorable Court is most respectfully
prayed to issue an Order directing the Register of Deeds for the City of Cebu to inscribe
and annotate in the TCT No. RT-3972 a road right of way indicated in the motion
dated April 17, 1997 x x x x after payment of the corresponding registration fees
prescribed by law.

The cadastral court issued on June 6, 1997 an Order requiring the Register of
Deeds to inform this [c]ourt regarding the status of the aforementioned title,
whether it has already been cancelled or not, the encumbrances/annotations
therein, and in whose name it is now.[5]

In its Comment/Manifestation, the Register of Deeds informed the cadastral court

that Lot No. 6-H-2 covered by TCT No. RT-3972 is registered under herein
petitioners name and that it appears to be clean and devoid of any
encumbrance/annotations.[6]

On July 23, 1997, the cadastral court issued an Order granting the petition of
respondent,[7] thus:

Since the Borromeo Bros. Estate did not oppose the previous petition for
annotation of road right of way contained in the order of Judge Ignacio Debuque, this
[c]ourt hereby grants the petition filed by Engr. Edgar John A. Garcia, the registered
owner of TCT No. 142344 covering Lot 6-H-1 and directs the Register of Deeds of Cebu
City to annotate on TCT No. RT-3972 the contents of the document ratified on August
18, 1938 recited in paragraph 4 of the instant petition after payment of the
corresponding registration fees prescribed by law. Furnish the Borromeo Bros. Estate
with a copy of this order as well as Atty. Loreto M. Durano, counsel for the petitioner.
On July 25, 1997, petitioner received a copy of the Order of July 23,
1997. Petitioner entered its special appearance and filed a Motion for
Reconsideration and Recall and expressed caution that it was not necessarily
submitting itself to the jurisdiction of the cadastral court. Petitioner contended
that the Order of the Court dated July 23, 1997 violated its fundamental right to
substantive and procedural due process, that the petition of respondent was for
specific performance of a private agreement cognizable only by an ordinary court
and not a cadastral court, and that the petition of respondent was a procedural
shortcut to enforce a stale order citing Rule 39, Section 6 of the Rules of Court,
the statute of limitations and prescription.[8]

On December 15, 1997, after both parties had submitted their respective
arguments on the issues raised, the cadastral court denied petitioners motion for
reconsideration. The court held that firstly, there was no violation of substantial
or procedural due process as the court furnished petitioner its Order of July 23,
1997, it heard petitioners motion for reconsideration in open court, and allowed
both parties to submit their respective memoranda including documentary
exhibits prior to its ruling on the motion. Secondly, the promulgation of
Presidential Decree No. 1529 or The Property Registration Decree of 1979
eliminated the distinction between the general jurisdiction of the RTC and its
limited jurisdiction when acting as a Land Registration Court. Finally, the court
ruled that the allegation of enforcement of a stale order contrary to Rule 39,
Section 6 of the Rules of Court, the statute of limitations and prescription, was
misplaced as the invoked rule applied only to civil actions and not to special
proceedings such as a land registration case where neither laches nor the statute
of limitations applies.[9]

Aggrieved, petitioner filed on December 29, 1997 a petition for certiorari

before the Court of Appeals, docketed as CA-G.R. Sp. No. 47049. It alleged grave
abuse of discretion on the part of the cadastral court for the issuance of its Orders
dated July 23, 1997 and December 15, 1997.

Meanwhile, respondent filed with the cadastral court a motion for

execution of its July 23, 1997 Order,[10] which was opposed by petitioner[11] and
denied by the cadastral court on April 6, 1998,[12] thus:

Should this [c]ourt enforce the questioned order now, any ruling by the Court of
Appeals in the petition for certiorari if it is in favor of petitioner BBEI would create a
situation wherein the ruling of a higher [c]ourt can no longer be implemented because
the lower [c]ourt had chosen to enforce its order without waiting for the outcome of the
petition for certiorari. This [c]ourt does not want to preempt the ruling of the Court of
Appeals and therefore, this [c]ourt on the basis of the ruling of the Supreme Court
aforementioned[13] and in the higher interest of justice will not enforce at this time the
order dated July 23, 1997.
Respondents April 29, 1998 motion for reconsideration[14] was denied. Thus,

respondent filed before the Court of Appeals a petition for mandamus and
certiorari, docketed as CA-G.R. Sp. No. 48512.

On November 18, 1998, the Court of Appeals consolidated the cases[15] and

rendered its Consolidated Decision of June 21, 1999 dismissing the petition in CA-
G.R. Sp. No. 47049 of herein petitioner and granting the petition in CA-G.R. Sp.
No. 48512 of herein respondent.[16]
The Court of Appeals held that the evidence on record shows the existence
of an easement of right of way in favor of respondent. But in dismissing the
petition in CA-G.R. Sp. No. 47049, it anchored its decision on the fact that
petitioner filed a special action for certiorari in which the appellate court is limited
only to correcting errors of jurisdiction or grave abuse of discretion.

On the other hand, in granting the petition in CA-G.R. Sp. No. 48512, the
Court of Appeals emphasized that since no restraining order or writ of injunction
was issued in the other petition, the period on the finality of the Order of the
cadastral court was never interrupted; and that the filing of a petition for
certiorari does not prevent the decision from attaining finality as it is an
independent action which does not interrupt the course of the principal action or
the running of the reglementary period involved in the proceedings.

On July 9, 1999, petitioner filed its motion for reconsideration but the
appellate court denied it in its Resolution of August 9, 1999.[17] Hence, this
petition for review on certiorari under Rule 45 of the Rules of Court for the
annulment and setting aside of the June 21, 1999 Consolidated Decision as well as
the August 9, 1999 Resolution of the Court of Appeals.

Petitioner alleged these errors: (1) the appellate court erred in dismissing
CA-G.R. Sp. No. 47049 and not reversing the July 23, 1997 Order of the cadastral
court despite (a) the nullity of the Order for the denial of petitioners substantive
and procedural right to due process and (b) the commission of abuse of discretion
and action without or in excess of jurisdiction of the cadastral court when it
revived a stale order, and (2) it likewise erred in granting the petition in CA-G.R.
Sp. No. 48512.

We find against petitioner.
At the outset, the Court emphasizes that the proper subjects of this Rule 45
Petition are the Consolidated Decision and Resolution of the Court of Appeals and
not the Orders of the cadastral court.

The appellate court was correct in striking down the petition of petitioner
in CA-G.R. Sp. No. 47049 on procedural grounds. Indeed, the filing of a special civil
action for certiorari before the Court of Appeals limits the determination of the
appellate court to whether there was an error of jurisdiction or grave abuse of
discretion on the part of the cadastral court. A special civil action for certiorari is
an independent action, raising the question of jurisdiction where the tribunal,
board or officer exercising judicial or quasi-judicial functions has acted without or
in excess of jurisdiction, or with grave abuse of discretion amounting to lack or
excess of jurisdiction. The Court of Appeals found neither error of jurisdiction nor
grave abuse of discretion, and dismissed the petition by stating that [t]o Us and to
say the most, aforementioned arguments are indeed typical only of either an
error of procedure or an error of judgment. This Court agrees.

Moreover, even assuming that the appellate court may correctly resolve
error of procedure or error of judgment in the instant case, there was none
committed by the cadastral court.

The cadastral court did not deny petitioner of its right to due process of the
law. The essence of due process is found in the reasonable opportunity to be
heard and submit any evidence in support of ones defense. What the law
proscribes is the lack of opportunity to be heard.[18] As long as a party is given the
opportunity to defend his interests in due course, he would have no reason to
complain, for it is this opportunity to be heard that makes up the essence of due
process.[19]

The records reveal that the cadastral court furnished petitioner its Order
of July 23, 1997, which reiterated its previous order of April 17, 1952 through
former Judge Ignacio Debuque. More importantly, the cadastral court heard
petitioners motion for reconsideration in open court wherein both parties
presented their respective arguments to defend their rights and the court likewise
allowed the parties to file their respective memoranda prior to ruling on the
motion for reconsideration. To quote in part the court in its December 15,
1997 Order, viz:

x x x x On August 8, 1997, the date set by Atty. Mercado for the hearing of his
motion, the lawyers of both parties appeared including Atty. Amadeo D. Seno, Jr. and
the court allowed the parties to argue on the merits of their respective contentions and
later on directed the lawyers to put their additional arguments in writing together with
additional documentary evidence and to cite the law, authorities and decisions of the
Supreme Court in their respective contentions. BBEI (petitioner herein) filed its
memorandum with annexes and documentary exhibits. x x x oppositor BBEI filed its
reply.
Indeed, deprivation of the right to due process cannot be successfully

invoked where a party was given the chance to be heard on his Motion for
Reconsideration[20] as what happened in the instant case.

Moreover, the July 23, 1997 and December 15, 1997 Orders of the
cadastral court were based on established facts on the existence of the grant of
an easement of road right of way in favor of respondent, viz: (1) an Agreement,
for a valuable consideration, dated August 15, 1936 executed by Patricia that
granted a road right of way over Lot No. 6-H-2 and Lot No. 7 to the Garcia couple;
(2) an Agreement, for a valuable consideration, dated August 17, 1938 executed
by Patricia that granted a road right of way over Lot 6-H-2 to the Garcia couple;
(3) Deed of Sale dated September 28, 1938 executed by Patricia in favor of
Borromeo Bros. Estate, Inc. that contained a provision: x x x the purchase of Lot
No. 6-H-2 was subject to the right of way granted by me (Patricia Ruedas Vda. de
Andrada) to the spouses Gil Garcia and Teresa Escano de Garcia; (4) the Official
Receipt issued by the Register of Deeds of Cebu, Commonwealth of the
Philippines No. B 2582295, dated August 18, 1938, upon registration shows the
annotation on the title of the Agreement on the road right of way over Lot No. 6-
H-2 in favor of the Garcia couple; and (5) the May 2, 1953 Letter of the Borromeo
Bros. Estate, Inc., through Flora D. Borromeo, to Mr. Gil
Garcia expressly and categorically recognizing or confirming the establishment of
a road right of way over Lot No. 6-H-2 and Lot No. 7 in favor of the Garcia couple.

Clearly, whether the July 23, 1997 Order of the cadastral court is a revival of
the June 28, 1952 Order of another cadastral court is immaterial as the latter was
not the sole basis for the granting of the petition for annotation of the road right
of way. It merely bolstered the petition of respondent to annotate the road right
of way in his favor.
In fine, the records of the instant case show that (1) there was substantial
evidence to support the annotation of the easement of right of way on the title of
petitioner in favor of respondent and (2) the requirements of due process were
sufficiently met. No abuse of discretion was committed by the cadastral
court. Consequently, the Court of Appeals is justified in dismissing the petition in
CA-G.R. Sp. No. 47049.

Likewise, there being no more obstacles in the immediate execution of the

Order requiring the annotation of the easement of road right of way on the title
of the property of petitioner in favor of respondent, the Court affirms the Court of
Appeals in granting the petition in CA-G.R. Sp. No. 48512.

IN VIEW WHEREOF, the petition is DENIED. The Consolidated Decision and

Resolution of the Court of Appeals dated June 21, 1999 and August 9, 1999,
respectively, in CA-G.R. Sp. No. 47049 and CA-G.R. Sp. No. 48512 are AFFIRMED.

SO ORDERED.

REYNATO S. PUNO
Chief Justice
WE CONCUR:

Associate Justice



TERESITA J. LEONARDO-DE CASTRO
Associate Justice
CERTIFICATION

conclusions in the above decision had been reached in consultation before the

REYNATO S. PUNO
Chief Justice

[1]
Penned by Associate Justice Bernardo LL. Salas and concurred in by Associate Justices Cancio C. Garcia and
Candido V. Rivera, June 21, 1999; rollo, pp. 293-315.
[2]
Penned by Associate Justice Alicia Austria-Martinez and concurred in by Associate Justices Salvador J. Valdez,
Jr. and Renato C. Dacudao, August 9, 1999; id., p. 275.
[3]
Dated July 23, 1997 and December 15, 1997.
[4]
Notarized by Cresencio Tomakin, Notarial Document No. 722, Page No. 68, Book IX and Series of 1938.
[5]
Rollo, p. 71.
[6]
Id. at 72-73.
[7]
Id. at 74.
[8]
Id. at 75-79.
[9]
Id. at 81-88.
[10]
Id. at 251-256.
[11]
Id. at 257-259.
[12]
Id. at 260-261.
[13]
Citing Cruz v. Leabres, G.R. No. 99846, May 22, 1995, 244 SCRA 194, id. at 260.
[14]
Id. at 262-274.
[15]
Supra note 2.
[16]
Supra note 1.
[17]
Rollo, p. 57.
[18]
Estares v. Court of Appeals, G.R. No. 144755, June 8, 2005, 459 SCRA 604, citing Anama v. Court of Appeals,
G.R. No. 128609, January 29, 2004, 421 SCRA 338, 351; Philippine Commercial International Bank v. Court
of Appeals, 454 Phil. 338 (2003); and Kuizon v. Desierto, G.R. Nos. 140619-24, March 9, 2001, 354 SCRA
158, 176.
[19]
Ibid., citing Anama v. Court of Appeals, supra; and Philhouse Development Corporation v. Consolidated Orix
Leasing and Finance Corporation, G.R. No. 135287, April 4, 2001, 356 SCRA 281, 286.
[20]
Salonga v. CA, 336 Phil. 514 (1997); and Paat v. CA, 334 Phil. 146 (1997).
FIRST DIVISION
[G.R. No. 109338. November 20, 2000]
CAMARINES NORTE ELECTRIC COOPERATIVE, INC.

(CANORECO), petitioner, vs. COURT OF APPEALS, HON. LUIS L.
DICTADO, Presiding Judge, RTC, Branch 39, Daet, Camarines
Norte, EDUARDO R. MORENO, LT. COL. RUFINO CHAVEZ,
CAPT. ALFREDO BORJA, CONRAD C. LEVISTE and VINES
REALTY CORPORATION, respondents.
DECISION
PARDO, J.:
The acquisition of an easement of a right-of-way falls within the purview of the

power of eminent domain.
We have before the Court for consideration a petition for review on certiorari of the
decision of the Court of Appeals, and its resolution, which denied petitioners motion
[1] [2]
for reconsideration.
[3]
The facts of the case, as found by the Court of Appeals, are as follows:
On May 18, 1989, Conrad L. Leviste filed with the Regional Trial Court, Daet,
Camarines Norte, a complaint for collection of a sum of money and foreclosure of
[4]
mortgage against Philippine Smelter Corporation (PSC).

For failure to file an answer to the complaint, the trial court declared PSC in default
and allowed plaintiff Leviste to present evidence ex-parte.
On November 23, 1989, the trial court rendered a decision, the dispositive portion of
which reads:
WHEREFORE, judgment is hereby rendered in favor of plaintiff and against

the defendant ordering the latter
1. to pay the plaintiff the sum of P1,798,750.00 with interest thereon at the
rate of 12% per annum from November, 1989 until the whole amount shall
have been fully paid;
2. to pay the plaintiff the sum of P11,500.00 as attorneys fees;

to pay the plaintiff the sum of P5,000.00 as expenses incidental to this
litigation; and
3. to pay the costs of this suit.
IT IS SO ORDERED. [5]
When the decision became final and executory, the trial court issued a writ of
execution and respondent sheriff Eduardo R. Moreno levied upon two (2) parcels of
land covered TCT Nos. T-13505 and T-13514 issued by the Registrar of Deeds in the
name of PSC. On April 24, 1990, the parcels of land were sold at public auction in favor
of Vines Realty Corporation (Vines Realty). On April 25, 1990, the Clerk of Court, as ex-
officio Provincial Sheriff, issued a Certificate of Sale, which Judge Luis D. Dictado, in
[6]
his capacity as executive judge, approved.

On June 23, 1992, Vines Realty moved for the issuance of a writ of possession over
said property. On June 25, 1992, the trial court granted the motion.[7]
On August 7, 1992, copy of the writ of possession was served on petitioner as

owner of the power lines standing on certain portions of the subject property. Later, on
August 12, 1992,Vines Realty filed an amended motion for an order of demolition and
removal of improvements on the subject land.
[8]
Among the improvements for removal were the power lines and electric posts
belonging to petitioner.
Petitioner opposed the motion on the ground, among other reasons, that petitioner
[9]
was not a party to the case and therefore not bound by the judgment of the trial court
and that it had subsisting right-of-way agreements over said property.
The trial court set the hearing on the amended motion on September 29, 1992 but
[10]
the hearing was re-scheduled on October 28, 1992, and then again on November 10,
1992. On all these dates, no hearing was conducted.
[11]
Then the case was re-raffled to Branch 39 of the regional trial court presided over
by respondent judge.
On November 27, 1992, the trial court set the hearing on the amended motion for
[12]
demolition. However, instead of adducing evidence for petitioner, its

counsel manifested that he was withdrawing his appearance since the authority given
[13]
him by petitioner was only for the filing of the opposition to the amended motion. The
trial court proceeded with the hearing despite the fact that petitioner had no counsel
present. Thus, only Vines Realty presented its evidence.
On the same date, November 27, 1992, the trial court ordered the issuance of a writ
of demolition directing and deputizing Lt. Col. Rufino Chavez, Jr. and Capt. Alfredo
Borja to constitute an augmentation force for the immediate implementation of the writ. [14]
On December 7, 1992, petitioner filed with the Court of Appeals a petition for
prohibition with restraining order and preliminary injunction. Petitioner argued that the
[15]
trial court acted without or in excess of its jurisdiction or with grave abuse of discretion
in issuing the order dated November 27. 1992.
On December 10, 1992, the Court of Appeals sent telegrams to respondents
informing them of the issuance of a restraining order. On the same day, however, the
trial court issued a writ of demolition. The court addressed the writ to sheriff Eduardo
[16]
de los Reyes, who was not a respondent in the petition before the Court of Appeals, so
[17]
that the latter can implement the writ on the pretext that he was not covered by the
restraining order.
On December 11, 1992, the trial court issued another order directing the National
Power Corporation sub-unit in Camarines Norte to shut off the power lines energizing
the New Lucena Oil Products Corporation, one of the consumers serviced by petitioner,
as shown by the radiogram of Simeon P. Zao III, OIC Labo, NPC. Mr. Zao filed a
[18]
manifestation with the trial court that if NPC would shut off said power supply before
[19]
the sub-station of petitioner, it would deprive Benguet Mining Corporation of electricity

and endanger the lives of its miners.
On the same day, December 11, 1992, respondent Vines Realty cut down
petitioners electric posts professedly using a chainsaw and resulting in a loud blast
[20]
affecting the area.Philippine National Police desk officer Bianito Cobacha of Barangay
[21]
Jose Panganiban Police Station entered in the police blotter that on December 11,
1992, at about 2 p.m., men led by the provincial sheriff felled petitioners electric posts
along the cemetery of Bagumbayan.
Even the members of the Sangguniang Bayan at San Jose appealed to respondent
Sheriff to desist from proceeding with the demolition due to a restraining order but to no
avail.
On January 4, 1993, Vines Realty filed with the trial court a motion for the issuance
of an alias writ of demolition. The hearing was scheduled on January 12, 1993, at 8:30
[22]
a. m. but petitioners lawyer, Atty. Jose Maacop, received a copy only on January 11,
1994.
Atty. Bienvenido A. Paita made a special appearance for petitioner through a
manifestation with motion for reconsideration dated January 21, 1993. Atty. Paita
[23]
declared it was impossible for him to appear and file an opposition to the motion on very
short notice. He said that petitioner was not a party to the case, that the restraining
order of the Court of Appeals was good until further orders, and the writ of execution
was executed on December 11, 1992. Petitioner manifested that it was denied its day in
court.
On January 25, 1993, the trial court denied the motion for reconsideration on the
[24]
ground that the appearance of Atty. Paita was irregular and that Atty. Maacop as the
counsel in the appellate court must first make an entry of appearance with the trial
court.
On January 26, 1993, the trial court issued an alias writ of demolition. [25]
The sheriff, at the request of Vines Realty demolished the remaining electric posts
resulting in the cutting off of power supply to various business establishments and
barangays.
Meantime, on January 19, 1993, the Court of Appeals, promulgated a
decision dismissing the petition for lack of merit.
[26]
WHEREFORE, the present petition is DISMISSED for lack of merit.
Let it be stated that the temporary restraining order which was issued by this
Court on December 9, 1992 has a limited life of twenty (20) days from date of
issue (Carbungco vs. CA, 181 SCRA 313) and has therefore become void at
the expiration of the said twenty (20) days (Ilaw at Buklod ng Manggagawa vs.
NLRC, 198 SCRA 586).
SO ORDERED.
On February 19, 1993, petitioners new counsel, Gancayco Law Offices, filed with
the Court of Appeals an Urgent Appearance And Motion To Admit Supplemental
Petition. This was a new petition for certiorari and prohibition with prayer for issuance of
[27]
a writ of mandatory injunction. [28]
On March 15, 1993, the Court of Appeals denied the motion for
reconsideration as well as the admission of the supplemental petition on the ground that
the petition had been decided. [29]
Meanwhile, in response to the publics urgent basic need, petitioner re-constructed

its power lines along the provincial road leading to the Port of Osmea upon authority of
the District Engineer of the Department of Public Works and Highways [DPWH].
On April 23, 1993, however, petitioner received a letter dated April 10, 1993, stating
that Vines Realty was the owner of the roadside and that petitioner could not construct
power lines therein without its permission. Petitioner promptly replied that the power
lines were constructed within the right of way of the provincial road leading to the port of
Osmea as granted by the District Engineer of DPWH.
Hence, this petition. [30]
At issue is whether petitioner is entitled to retain possession of the power lines

located in the land sold at public auction as a result of extra-judicial foreclosure of
mortgage.
The most basic tenet of due process is the right to be heard. A court denies a
[31]
party due process if it renders its orders without giving such party an opportunity to
present its evidence.[32]
We find that petitioner was denied due process. Petitioner could have negated
private respondents claims by showing the absence of legal or factual basis therefor if
only the trial court in the exercise of justice and equity reset the hearing instead of
proceeding with the trial and issuing an order of demolition on the same day.
It is incumbent upon the trial court to receive evidence on petitioners right over the
property to be demolished.
The essence of due process is an opportunity to be heard, or as applied to
administrative proceedings, an opportunity to explain ones side or an opportunity to
seek a reconsideration of the action or ruling complained of. Due process is equally
[33]
applicable in a case involving public utilities, where a strict application of the rules would
bring about catastrophic inconveniences to the public. Hence, the act would do more
harm than good to the public, which the government seeks to protect. Damages and
losses of a considerable amount of time (about 8 years) could have been prevented if
the trial court did not gravely abuse its discretion on the matter.
Well aware that the counsel was not authorized, the trial court could have stretched
its liberality a little to ensure that it would serve the ends of justice well for the people of
Camarines Norte. Petitioner must be given the chance to prove its position.
We cannot conceive how, knowing fully well that destroying the power lines and
electric posts would cause overwhelming losses to a lot of business establishments and
a great inconvenience to a lot of people, the trial court still ordered the demolition of the
property. Their personal motives aside, the Court finds that the trial court gravely
abused its discretion in hastily ordering the removal of the electric posts.
We are not a trier of facts. We cannot determine whether petitioners Agreements of
Right of Way or that of the authorization of the OIC District Engineer to construct
[34] [35]
electric posts within the limits of the road right of way were genuine instruments. We
can, however, determine the legality of the acts of the trial court in issuing the writs of
demolition over the property.
The trial court failed to appreciate the nature of electric cooperatives as public
utilities.
Among the powers granted to electric cooperatives by virtue of Presidential Decree
No. 269 are:
[36]
Section 16 Powers-
(j) To construct, maintain and operate electric transmission and distribution

lines along, upon, under and across publicly owned lands and public
thoroughfares, including, without limitation, all roads, highways, streets, alleys,
bridges and causeways; Provided, that such shall not prevent or unduly impair
the primary public uses to which such lands and thoroughfares are otherwise
devoted;
(k) To exercise the power of eminent domain in the manner provided by law
for the exercise of such power by other corporations constructing or operating
electric generating plants and electric transmission and distribution lines or
systems.
Electric cooperatives, like CANORECO, are vested with the power of eminent
domain.
The acquisition of an easement of a right-of-way falls within the purview of the
power of eminent domain. Such conclusion finds support in easements of right-of-way
where the Supreme Court sustained the award of just compensation for private property
condemned for public use. The Supreme Court, in Republic vs. PLDT thus held that:
[37] [38]
"Normally, of course, the power of eminent domain results in the taking or

appropriation of title to, and possession of, the expropriated property; but no
cogent reason appears why said power may not be availed of to impose only
a burden upon the owner of condemned property, without loss of title and
possession. It is unquestionable that real property may, through expropriation,
be subjected to an easement of right-of-way."
However, a simple right-of-way easement transmits no rights, except the easement.

Vines Realty retains full ownership and it is not totally deprived of the use of the
[39]
land. It can continue doing what it wants to do with the land, except those that would
result in contact with the wires.
The acquisition of this easement, nevertheless, is not gratis. Considering the nature
and effect of the installation power lines, the limitations on the use of the land for an
indefinite period deprives private respondents of its ordinary use. For these reasons,
Vines Realty is entitled to payment of just compensation, which must be neither more
[40]
nor less than the money equivalent of the property.

Just compensation has been understood to be the just and complete equivalent of
the loss, which the owner of the res expropriated has to suffer by reason of the
expropriation. The value of the land and its character at the time it was taken by the
[41]
Government are the criteria for determining just compensation. No matter how
[42]
commendable petitioners purpose is, it is just and equitable that Vines Realty be

compensated the fair and full equivalent for the taking of its property, which is the
measure of the indemnity, not whatever gain would accrue to the expropriating entity. [43]
Moreover, CANORECO only sought the continuation of the exercise of its right-of-
way easement and not ownership over the land. Public utilities power of eminent
domain may be exercised although title is not transferred to the expropriator. [44]
Consequently, we rule that a courts writ of demolition can not prevail over the
easement of a right-of-way which falls within the power of eminent domain.
WHEREFORE, the petition is hereby GRANTED. The decision of the Court of
Appeals promulgated on January 19, 1993, and the resolution adopted on March 15,
1993, in CA-G. R. SP No. 29624, are SET ASIDE. The orders of the trial court dated
November 27, 1992, December 10, 1992, January 18, 1993, and January 25, 1993 and
the writs of demolition issued on December 11, 1992, and January 26, 1993, are
ANNULLED.
Private respondents are ordered to restore or restitute petitioners electric posts and
power lines or otherwise indemnify petitioner for the cost of the restoration
thereof. Finally, private respondents are permanently enjoined or prohibited from
disturbing or interfering with the operation and maintenance of the business of
petitioner.
Costs against private respondents.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, Kapunan, and Ynares-Santiago, JJ., concur.
In CA-G.R. SP No. 29624, promulgated on January 19, 1993, Paras, J., ponente, Victor and Martin, Jr.,
[1]
JJ., concurring, Petition, Annex A, Rollo, pp. 41-46.

[2]
Adapted on March 15, 1993, Rollo, pp. 48-49.
[3]
Dated February 1, 1993, Rollo, pp. 119-121.
[4]
Petition, Annex C, Rollo, pp. 50-52.
[5]
Petition, Annex D, Rollo, pp, 53-56.
[6]
Petition, Annex E, Rollo, pp. 57-58.
[7]
Petition, Annex F, Rollo p. 59.
[8]
Petition, Annex G, Rollo, pp. 60-61.
[9]
Petition, Annex H, Rollo, p. 62.
[10]
Regional Trial Court, Camarines Norte, Branch 38, Judge Sancho Dames II, presiding.
Reply, Annex A, Rollo, pp. 307-308. Judge Sancho Dames II voluntarily inhibited himself from trying the
[11]
case and its incidents due to his receipt of CANORECOs Special Citation.
[12]
Regional Trial Court, Camarines Norte, Branch 39, respondent Judge Luis L. Dictado, presiding.
[13]
Atty. Bienvenido Paita.
[14]
Petition, Annex I, Rollo, p. 63.
[15]
Petition, Annex J, Rollo, pp. 64-76.
[16]
Petition, Annex L, Rollo, p. 82.
[17]
Sheriff IV, RTC Daet, Camarines Norte, Branch 39.
[18]
Petition, Annex L, Rollo, p. 84.
[19]
Petition, Annex O, Rollo, p. 85
[20]
Petition, Annex P, Affidavit of resident Winifredo D. Reyes, Rollo, p. 86.
Petition, Annex Q, Rollo, p. 87, Certification that Eng. Tomas Juego of CANORECO and Exequiel
[21]
Santos of New Lucena Oil Product Inc., reported the demolition.

[22]
Petition, Annex S, Rollo, p. 90.
[23]
Supplemental Petition, Annex N-1, CA Rollo, pp. 129-130.
[24]
Petition, Annex U, Rollo, p. 93.24
[25]
Petition, Annex V, Rollo, 94-96.
[26]
Rollo, pp. 42-46.
[27]
CA Rollo, pp. 94-95.
[28]
CA Rollo, pp. 97-119.
[29]
Rollo, pp. 48-49.
Petition filed on May 10, 1993, Rollo, pp. 7-39; On August 10, 1994, we gave due course to the
[30]
petition, Rollo, p. 334.
Moslares v. Court of Appeals, 291 SCRA 440 [1998]; Philippine
[31]
National Construction
Corporation v. National Labor Relations Commission, 292 SCRA 266 [1998].
[32]
Philippine National Bank v. Sayo, Jr., 292 SCRA 202 [ 1998] .
Trinidad v. COMELEC, 315 SCRA 175 [1999]; Oil and Natural Gas Commission v. Court of Appeals,
[33]
293 SCRA 26 [1998].

[34]
Annexes C L to Reply, Rollo, pp. 310-328.
[35]
Dated May 26, 1993, Rollo, p. 331.
[36]
Which was done on August 6, 1973.
NAPOCOR v. Gutierrez, 193 SCRA 1, [1991], citing NAPOCOR v. Court of Appeals, 129 SCRA
[37]
665[1984]; Garcia v. Court of Appeals, 102 SCRA 597[1981].

[38]
136 Phil. 20 [1969].
[39]
NAPOCOR v. Gutierrez, supra.
Robern Development Corp. v. Quitain, 315 SCRA 150 [1999]; Republic v. Salem Investment, G. R. No.
[40]
137569, June 23, 2000.

[41]
Province of Tayabas v. Perez, 66 Phil. 467 [1938]; Manaay v. Juico, 175 SCRA 343 [1989].
[42]
NAPOCOR v. Court of Appeals, 129 SCRA 665, [1984].
[43]
EPZA v. Dulay, 149 SCRA 305 [1987]; Mun. of Daet v. Court of Appeals, 93 SCRA 503 [1979].
[44]
NAPOCOR v. Gutierrez, supra.

FIRST DIVISION

NATIONAL POWER G.R. No. 170945

CORPORATION,
Petitioner, Present:
PANGANIBAN, C.J., Chairperson,
- versus - YNARES-SANTIAGO,
AUSTRIA-MARTINEZ,
CALLEJO, SR., and
MARIA MENDOZA SAN CHICO-NAZARIO, JJ.
PEDRO, represented by
VICENTE, HERMINIA and
FRANCISCO, all surnamed Promulgated:
SAN PEDRO,
Respondents. September 26, 2006

x--------------------------------------------------x

DECISION

CALLEJO, SR., J.:

Before the Court is a Petition for Review on Certiorari under Rule 45 of the

Decision[1] of the Court of Appeals (CA) in CA-G.R. CV No. 72860, and its
Resolution[2] denying the motion for reconsideration thereof.
The Antecedents

The National Power Corporation (NPC) is a government-owned-and-controlled
corporation created to undertake the development of hydro-electric generation
of power and the production of electricity from any and
all sources; and particularly the construction, operation, and maintenance of
power plants, auxiliary plants, dams, reservoirs, pipes, mains, transmission lines,
power stations and substations, and other works for the purpose of developing
hydraulic power from any river, lake, creek, spring and waterfalls in the
Philippines and supplying such power to the inhabitants thereof.[3] Under Republic
Act No. 6395, as amended, the NPC is authorized to enter private property
provided that the owners thereof shall be indemnified for any actual damage
caused thereby.[4]
For the construction of its San Manuel-San Jose 500 KV Transmission Line and
Tower No. SMJ-389, NPC negotiated with Maria Mendoza San Pedro, then
represented by her son, Vicente, for an easement of right of way over her
property, Lot No. 2076. The property, which was partly agricultural and partly
residential land, was located in BarangayPartida, Norzagaray, Bulacan and
covered by Tax Declaration No. 00386. On June 19, 1997, Maria executed a Right
of Way Grant[5] in favor of NPC over the lot for P1,277,886.90. The NPC paid
her P524,635.50 for the damaged improvements thereon.[6]
The payment voucher for the residential portion of the lot valued
at P6,000,000.00 (at P600.00 per square meter) was then processed.[7] However,
the NPC Board of Directors approved Board Resolution No. 97-246[8] stating that it
would pay only P230.00 per sq m for the residential portion and P89.00 per sq m
for the agricultural portion, on the following premises:

A) The proposed land valuations were evaluated and analyzed using the joint appraisal
report on fair market value of lands by Cuervo Appraisal, Inc., Development Bank of
the Philippines, and the Land Bank of the Philippines and the fair market values
established by the respective Provincial Appraisal Committee (PAC) of Zambales,
Pangasinan, Nueva Ecija, Pampanga and Bulacan as well as the City Appraisal
Committee (CAC) of San Carlos and Cabanatuan.
B) For lot acquisition, adopt PAC or CUERVO Appraisal, whichever is lower; if there is a
problem of acceptance, refer same to the Board;
C) For easement over agricultural lands, adopt median or average if there are several
amounts involved; and
D) Always oppose any proposals for conversion of agricultural lands.[9]
On January 15, 1998, the NPC filed a complaint[10] for eminent domain in the
Regional Trial Court (RTC) of Bulacan against Maria and other landowners. The
case was docketed as Civil Case No. 28-M-98. According to NPC, in order to
construct and maintain its Northwestern Luzon Transmission Line Project (San
Manuel-San Jose 500 KV Transmission Line Project), it was necessary to acquire
several lots in the Municipalities of San Jose del Monte and Norzagaray, Bulacan
for an easement of right of way in the total area of more or less 35,288.5 sq
m. The owners of the affected areas and their corresponding assessed values are:

OWNER/ LOT/ TAX TITLE TOTAL AREA AREA ASSESSED CLASSIFI-
DEC. NO. AFFECTED VALUE OF CATION OF
CLAIMANT BLK. NO. IN SQ. M. AREA LAND
NO. AFFECTED
Ma. Mendoza San 2076 00386 122,821.32 17,195 P 18,555.75 Agricultural

Pedro rep. by

Vicente San Pedro
10,000 6,565 P147,712.50 Residential

Lorenza Manuel / 1250 96- T- 5,700 51,666.5 P 13,481.03 Agricultural
Sps. Raul & Edna 21017- 28392-
Lagula P-(M)
00084
Sps. Segundo & 1251 96- P-3965 6,362 6,362 P 16,210.00 Agricultural
Maxima Manuel / 21017-
Sps. Raul & Edna (M)
00083
Lagula
Maria San Pedro filed her Answer[11] on February 2, 1998, alleging that there had
already been an agreement as to the just compensation for her property. She
prayed, among others, that she should be paid the consideration stated in the
Right of Way Grant, P600.00 per sq m for the residential portion of the land as
agreed upon by her and NPC, and to base the values from Resolution No. 97-
005[12] of the Provincial Appraisal Committee.
Meanwhile, Maria San Pedro filed an Amended Answer[13] in which she alleged
that NPC had resorted to deceit, trickery and machination to induce her to grant a
right of way by assuring her that it would also pay for the residential portion of
the property at P600.00 per sq m.
On August 10, 1998, the RTC issued a writ of possession against Maria San
Pedro.[14] When she passed away on August 22, 1998,[15] she was substituted by
her heirs, Vicente, Herminia and Francisco, all surnamed San Pedro,
on September 11, 1998.[16]
During the pre-trial on January 25, 1999, the parties agreed that the only issue for
resolution was the just compensation for the property. The court appointed a
committee of commissioners to ascertain and recommend to the trial court the
just compensation for the properties, composed of Atty. Josephine L. Sineneng-
Baltazar, the Clerk of Court, as chairperson; and Engr. Oscar C. Cruz, Provincial
Assessor of Bulacan, and Atty. Henry P. Alog of the Litigation Department of NPC
to serve as members-commissioners thereof.[17]
On July 12, 1999, Atty. Baltazar and Engr. Cruz submitted their report,
[18]
recommending as payment for just compensation P800.00 per sq m for the
residential lot and P700.00 per sq m for the agricultural lot.[19] The majority report
reads:
I. Description of the Property
A parcel of land with a total area of 132,821.32 square meters located at Partida,
Norzagaray, Bulacan and declared for taxation purposes in the name of Maria Mendoza
San Pedro is sought to be expropriated by plaintiff National Power Corporation for the
construction and maintenance of its Northwestern Luzon Transmission Line Project (San
Miguel-San Jose 500 KV Transmission Line Project), to wit:
Total Area
Lot No. Tax Dec. No. Area Affected Classification
in sq. m.
2076 01337 122,821.32 17,195 Agricultural
10,000.00 6,565 Residential
The pertinent tax declaration is hereto attached as Annex A.

The residential lot is not affected by NPCs project in its entirety. Around 2,000 sq. m.
remains on each side of the residential lot.
Likewise, only a portion or 17,195 sq. m. of (sic) more than 12 hectares agricultural land,
(sic) is affected by the project. A sketch plan of the affected area is attached hereto as
Annex B.
II. Claims of the Parties
Defendants allege that they had signed a Right of Way Grant Contract dated June 19,
1997 which plaintiff itself prepared and was notarized by Atty. Marcelo Aure; that,
among others, defendants and plaintiff agreed that the price of the residential land
is P600.00 per square meter, based on the Provincial Appraisals Committee (PAC)
Resolution No. 97-005; that, on December 6, 1997, plaintiff informed them that the NPC
Board passed Resolution No. 97-246 dated October 27, 1997, pursuant to which the
board approved price for acquisition of subject property is P230.00 per sq. m. for
residential and P89.00 per sq. m. for agricultural lot. Defendants did not accept the new
offer.
On the other hand, plaintiff alleges that the price for residential land is P230.00 per sq.
m. as approved by NPCs Board and not P600.00 per sq. m. being asked by defendants. It
further recommended the appointment of commissioners to report to the Court the just
compensation to be paid to the defendants.
III. Observations
The Commissioners went to the site on May 11, 1999 and were able to observe that:
(1) The residential lot of Vicente San Pedro is not affected by NPCs

project in its entirety. Around 2,000 sq. m. remains on each side of the
residential lot. There are no existing structures or improvements on said
residential lot, which is situated along the all-weather (gravel)
road. Defendants are afraid to utilize the said remaining portions for
residential purposes because of the reported constant loud buzzing and
exploding sounds emanating from the towers and transmission lines,
especially on rainy days. The two children of Vicente San Pedro had
wanted to construct their residential houses on said land, but decided
against it now because of fear that the large transmission lines looming
not far above their land and the huge tower in front of their lot will
affect their safety and health. Moreover, there is a slim chance now that
somebody will still buy the remaining portions on each side of the
residential lot affected by the project, to the damage of the defendant,
both as to future actual use of the land and financial gains to be derived
therefrom.
(2) Likewise only a portion, or 17,195 sq. m. of the 122,821.32 square

meter agricultural land, is affected by the transmission line project. It
was not planted with palay at the time of the inspection. According to
the defendants, their farm helpers are already afraid to work on the
land because of the buzzing and cracking sounds coming from the tower
and transmission lines.
(3) The site is located in a highly developed area about 1.5 kms. away
from Norzagaray Municipal Building. The vast land owned by Jesus Is
Lord congregation is on the same side of the road as subject property.
Opposite the road is an ongoing resort project, the Falcon Crest Resort
about kilometers away, and the proposed Catholic Retreat House about
200 meters away. Attached as Annex C is the Location Plan of said lot.
IV. Available Data
(1) Based on the Zoning Certificate issued by the Municipal Mayor, subject parcel of land
has been classified as residential pursuant to the proposed Comprehensive Land Use
Plan of local government unit. Copy of said Zoning Certificate is hereto attached as
Annex D.
(2) Based on the BIR Zonal Valuation attached as Annex E, subject land has a zonal value
of P60.00/sq. m. for residential and P30.00/sq. m. for agricultural lot. However, it is
common knowledge that zonal valuation provided by BIR cannot be made as basis for
the purpose of determining just compensation in eminent domain cases because it is
only for the purpose of computing internal revenue taxes.
(3) Opinion values gathered by the Provincial Assessor on the price of the property are
as follows:
Residential - P1,075.00 / sq. m.
Agricultural - P 643.00 / sq. m.
The summary of Opinion Values is hereto attached as Annex F.
(4) There are no available sales data on properties within the vicinity of subject land for
the years 1996 and 1997, approximate time of the taking.
IV. Recommendation
The Commissioners, after considering the location of the subject property in a highly
developed area and accessibility thru the all-weather road (gravel); its potential for full
development as shown by the existence of building projects in the vicinity; and the long-
term effect the expropriation will have on the lives, comfort and financial condition of
herein defendants, respectfully recommend the following amounts as payment for the
affected portions of subject property.
P800. / sq. m. - for the residential lot
P700. / sq. m. - for the agricultural lot[20]

However, Atty. Alog, who represented NPC, dissented from the report, claiming
that it was merely based on opinion values, and the self-serving declarations and
opinions of defendants. He maintained that, in determining just compensation,
the trial court should instead consider the appraisal report of Cuervo Appraisers,
Inc., upon which Resolution No. 97-246 of NPC was based. He likewise argued that
the property involved was actually and principally used as agricultural, though
declared as agricultural/residential lots; hence, only the easement fee of right of
way should be paid, as the principal purpose for which the lot was devoted would
not be impaired by the construction of transmission lines. His report reads:

I. FINDINGS
The ocular inspection and research conducted by the undersigned Commissioner

on May 12, 1999 disclosed the following pertinent information and data:
1) The subject lots can be reached through a 1.4 km two lane concrete
road, from the Sta. Maria-Norzagaray National Highway
intersection at Poblacion, Norzagaray, Bulacan (refer to Annex B);
2) The low lying northern portion of the property is presently used

as riceland and the rest planted with assorted trees (refer to Annex
C, pictures);
3) The property is a portion of hill in the area with sides sloping

downward on the northern eastern boundaries (refer to Annex C);
4) There is no visible structural development in the area except for:
a) a two lane concrete road adjacent to the property at the

northwest boundaries going to San Jose Del Monte, Bulacan;
b) newly constructed steel towers of NPC;
c) barbed wire fence with wooden post covering the northwestern

portion of the lot adjacent to the concrete road to San Jose
Del Monte, Bulacan and a bamboo fence that covers the
southern portion (refer to Annex C); and
d) residential house approximately 200 meters from affected area.
5) During the ocular inspection, it is noted that they still use the affected
area for agricultural purposes;
6) The Falcon Crest Resort is approximately 1 km. from the affected

property;
7) Price data gathered are as follows (in square meter unless specified):
Agri-Orchard Riceland Subd. along
(Interior) Unirrigated Sta. Maria Resl Agrl
(Interior) (Garay)
Provincial Appraisal Committee P600.00 P400.00
Bulacan (Res. No. 97-005)
(Annex D)
NP Board Resolution No. 97-246 P89.00 P80.00 P230.00
(Annex E)
Cuervo Appraisers, Inc. P890,000/ha. P800,000/ha. P230.00[21]
(Annex F)

Atty. Alog also recommended that only P2,640,274.70 be paid to
defendants by way of just compensation, broken down as follows:

Eight Hundred Two Thousand Three - Payment for damaged
Hundred Sixty Eight Pesos and 50/100 crops/plants/trees
(P802,368.50)
One Hundred Sixty Two Thousand - Payment for structures
Eight Hundred Sixty Five Pesos and
65/100 (P162,865.65)
One Million Five Hundred Nine Thousand - Payment for residential
Nine Hundred Fifty Pesos (P1,509,950.00) portion of lot
One Hundred Fifty One Thousand - Easement fee for
Six Hundred Ninety One Pesos and agricultural portion of lot
60/100 (P151,691.60)
Thirteen Thousand Three Hundred Ninety - Tower Occupancy Fee
Eight and 95/100 (P13,398.95)[22]
On October 28, 1999, the RTC rendered judgment,[23] declaring as well-grounded,

fair and reasonable the compensation for the property as recommended by Atty.
Baltazar and Engr. Cruz. The fallo of the RTC decision reads:

WHEREFORE, premises considered, this Court hereby orders the above-described 5,700-
square meter lot from Lot No. 1250 of defendants Spouse (sic) Raul (sic) and the afore-
described 6,362-square meter lot from Lot No. 1251 of same defendants, subject to the
covering Compromise Agreements; and the above-described 17,195-square meter lot
from Lot No. 2076 of defendant Maria Mendoza San Pedro, CONDEMNED and/or
EXPROPRIATED for the construction and maintenance of plaintiffs Northwestern Luzon
Transmission Line Project (San Manuel - San Jose 500 KV Transmission Line Project), a
project for public purpose.
Accordingly, this Court hereby fixes the just compensation for the expropriated lots, as
follows:
OWNERS LOT AREA PRICE/ JUST
NO. EXPROPRIATED S.Q. METER COMPEN-
SATION
Sps. Raul
& Edna
Lagula - 1250 5,700 sq. m. - P499.00 - P2,844,300.-
Sps. Raul
& Edna
Lagula - 1251 6,362 sq. m. - 499.00 - 2,174,638.-
Ma. Mendoza
San Pedro her
heirs - 2076 17,195 sq. m. - 800.00 - 13,756,000.-
Hence, plaintiff is ordered to pay, as soon as possible, herein defendants the just
compensation enumerated above for their respective lots aforementioned. For this
purpose, plaintiff may withdraw the sum of money deposited with the Land Bank of
the Philippines or any other banks pursuant to Section 2 of Rule 67 of the Rules of Court,
as amended by P.D. No. 42.
FURTHER, defendants are ordered to clear and vacate the lots in question within 30
days from receipt hereof and to surrender possession thereof to the plaintiff.
The fees for the 3 Commissioners of the Appraisal Committee in the sum of P6,000.00
for the Chairman and P5,000.00 each for the 2 members, shall be paid by the plaintiff.
SO ORDERED.[24]
On November 19, 1999, the heirs of Maria San Pedro filed a Manifestation and
Motion[25] for the partial reconsideration of the decision on the ground that the
court failed to include in its decision the just compensation for the 6,565-square-
meter residential portion of their land, with prayer for attorneys fees equivalent
to 10% of the total amount to be awarded to them.
On December 3, 1999, NPC filed its motion for reconsideration, [26] insisting that
the just compensation awarded to defendants was without legal and factual basis,
and that it should only be made to pay an easement fee.
On June 6, 2001, the trial court issued an Order granting the motion of the heirs
and denied that of NPC.[27] The RTC declared that the just compensation for the
residential portion of the property should be the same as that of the spouses
Lagulas property, which was P499.00 per sq m. On the claim of NPC in its motion
for reconsideration that it should be made to pay only an easement fee, the trial
court ruled that Lot No. 2076 should be treated the same way as NPC treated the
properties of the spouses Lagula. It was pointed out that in the compromise
agreements executed by plaintiff and spouses Lagula, plaintiff paid P499.00 per sq
m on the basis of a straight sale of their agricultural land, and not merely an
easement fee for a right of way thereon. The fallo of the amended decision reads:

WHEREFORE, in the light of the foregoing, the Court hereby:
1. Grants the motion of defendant Maria Mendoza San Pedro and thus orders that the
1st paragraph of page 8 of the Decision be amended to read as follows:
Plaintiff is expropriating portions of defendants above-described

properties to give way to the construction and maintenance of its
Northern Luzon Transmission Line Project (San Manuel - San Jose 500 KV
Transmission Line Project), a project for public purpose. The area of the
lots sought to be expropriated from the lot of defendant Maria
Mendoza San Pedro, represented by her heirs, are 17,195 square meters
more or less of agricultural land and 6,565 square meters of residential
land, while the area of the land sought to be expropriated from the two
lots of defendants Sps. Raul and Edna Lagula are only 5,166.50 square
meters, more or less, from Lot No. 1250 and 6,363 (sic) square meters,
more or less, from Lot No. 1251.
Furthermore, the second paragraph of the dispositive portion of the Decision should be
amended as follows:
Accordingly, this Court hereby fixes the just compensation for the expropriated lots, as
follows:
OWNERS LOT AREA PRICE/ JUST
NO. EXPROPRIATED S.Q. METER COMPEN-
SATION
Sps. Raul
& Edna
Lagula 1250 5,700 sq. m. P499.00 P2,844,300.00

Sps. Raul
& Edna
Lagula 1251 6,362 sq. m. 499.00 3,174,638.00
Ma. Mendoza
San Pedro her
heirs 2076 17,195 sq. m. 499.00 8,580,305.00
Ma. Mendoza
San Pedro her
heirs 6,565 sq. m. 800.00 5,252,000.00
2. Denies the plaintiffs Motion for Reconsideration for lack of merit.
SO ORDERED.[28]
NPC appealed the amended decision to the CA, asserting that:

THE LOWER COURT GRAVELY ERRED IN FIXING P800.00 AND P499.00 PER SQUARE
METER AS JUST COMPENSATION FOR APPELLEES 6,565 SQUARE METERS OF
RESIDENTIAL LAND AND 17,195 SQUARE METERS OF AGRICULTURAL LAND,
RESPECTIVELY.[29]
On September 28, 2005, the CA rendered judgment dismissing the appeal. The CA

ruled that the July 12, 1999 majority report was based on uncontroverted facts,
supported by documentary evidence and confirmed by
the commissioners ocular inspection of the subject properties. To arrive at a
reasonable estimate of just compensation, the commissioners considered factors
such as the location, the most profitable likely use of the remaining area, size,
shape, accessibility, as well as listings of other properties within the
vicinity. Citing National Power Corporation v. Manubay Agro-Industrial
Development Corporation,[30] the CA found as unpersuasive NPCs argument that it
should only pay an easement fee. It ruled that considering the nature and effect
of the installation of power lines, the limitations on the use of land for an
indefinite period deprives the owner of its normal use. The fallo of the CA
decision reads:

WHEREFORE, the Appeal is hereby DENIED. The assailed Decision and Order dated 28
October 1999 and 6 June 2001, respectively, are AFFIRMED.
SO ORDERED.[31]
NPC filed a Motion for Reconsideration,[32] which the CA denied in its

Resolution[33] dated December 22, 2005; hence, the instant petition based on the
following ground:

THE COURT OF APPEALS COMMITTED A GRAVE ERROR WHEN IT UPHELD THE DECISION
OF THE TRIAL COURT FIXING THE JUST COMPENSATION FOR RESPONDENTS 6,565 SQ.
METERS OF RESIDENTIAL LAND AND 17,195 SQUARE METERS OF AGRICULTURAL LAND,
AT PHP800.00 AND PHP499.00 PER SQUARE METER RESPECTIVELY, INSTEAD OF THE
EASEMENT FEE AS PRAYED FOR IN THE COMPLAINT AND PROVIDED UNDER REPUBLIC
ACT NO. 6395, AS AMENDED, OTHERWISE KNOWN AS THE REVISED NPC CHARTER.[34]
The Ruling of the Court
The petition is denied for lack of merit.

The CA found no reversible error in the trial courts finding of just

compensation. Inasmuch as the determination of just compensation
in eminent domain cases is a judicial function and factual findings of the CA are
conclusive on the parties and reviewable only when the case falls within the
recognized exceptions, which does not obtain in this case, we see no reason to
disturb the factual findings as to the valuation of the subject property.[35]
Petitioner avers that the rulings of the trial court affirmed by the appellate court,
based on the majority report on the subject propertys just compensation, is not
supported by documentary evidence. It avers that in the majority report,
Commissioners Atty. Baltazar and Engr. Cruz, even admit that there were no
available sales data on properties within the vicinity of the subject property for
the years 1996 and 1997. Moreover, the Bureau of Internal Revenue (BIR) valued
the property at P60.00 per sq m for residential, and P30.00 per sq m for
agricultural lot.[36]
Petitioner further argues that respondents have not shown that the condition of
the adjoining properties or improvements thereon had increased their lands
economic value.[37]The valuation, thus, of the trial court, as affirmed by the CA,
was exorbitant and devoid of factual and legal basis.[38]
We are not persuaded.
The constitutional limitation of just compensation is considered to be the sum

equivalent to the market value of the property, broadly described to be the price
fixed by the seller in open market in the usual and ordinary course of legal action
and competition or the fair value of the property as between one who receives,
and one who desires to sell it, fixed at the time of the actual taking by the
government.[39] To determine the just compensation to be paid to the landowner,
the nature and character of the land at the time of its taking is the principal
criterion.[40]
In the July 12, 1999 Majority Report, the commissioners found that the property
was located in a highly-developed area and was accessible through an all-weather
road. The fact that the property had potential for full development as shown by
the existence of building projects in the vicinity, and the long-term effect of the
expropriation on the lives, comfort and financial condition of petitioners was
likewise considered. The report also took into account the ocular inspection
conducted by the commissioners on May 11, 1999. The tax declaration of the
subject property,[41] the NPC sketch plan,[42] the location plan,[43] the zoning
certificates,[44] the zonal valuation of the BIR,[45] and the opinion values[46] were
also considered.
The lone fact that there was no available sales data on properties within the
vicinity of respondents land for 1996 and 1997 and that the BIR zonal value
was P60.00 per sq m for residential and P30.00 per sq m for agricultural did not
proscribe the commissioners and the trial court from making their own
reasonable estimates of just compensation, after considering all the facts as to
the condition of the property and its surroundings, its improvements and
capabilities. As had been amply explained by this Court in Export Processing Zone
Authority v. Dulay:[47]

Various factors can come into play in the valuation of specific properties singled
out for expropriation. The values given by provincial assessors are usually uniform for
very wide areas covering several barrios or even an entire town with the exception of the
poblacion. Individual differences are never taken into account. The value of land is based
on
such generalities as its possible cultivation for rice, corn, coconuts, or other crops. Very
often land described as cogonal has been cultivated for generations. Buildings are
described in terms of only two or three classes of building materials and estimates of
areas are more often inaccurate than correct. Tax values can serve as guides but cannot
be absolute substitutes for just compensation.
To say that the owners are estopped to question the valuations made by
assessors since they had the opportunity to protest is illusory. The overwhelming mass
of land owners accept unquestioningly what is found in the tax declarations prepared by
local assessors or municipal clerks for them. They do not even look at, much less
analyze, the statements. The idea of expropriation simply never occurs until a demand is
made or a case filed by an agency authorized to do so.
It is violative of due process to deny to the owner the opportunity to prove that
the valuation in the tax documents is unfair or wrong. And it is repulsive to basic
concepts of justice and fairness to allow the haphazard work of a minor bureaucrat or
clerk to absolutely prevail over the judgment of a court promulgated only after expert
commissioners have actually viewed the property, after evidence and arguments pro and
con have been presented, and after all factors and considerations essential to a fair and
just determination have been judiciously evaluated.[48]
Conformably with the rulings of this Court, the majority report took into account
the most profitable likely use of the remaining area; and the size, shape,
accessibility, as well as listings of other properties within the vicinity.[49]
As gleaned from the location plan[50] of the property in the case at bar, Lot No.
2076 is connected via a cemented road to the National Road, 1.5 kilometers
away. The same is likewise strategically located at a junction of the barrio road
leading to the Provincial Road, the National Road and to Sapang Palay. The lot is
also on the same side of the road as the land owned by the Jesus Is Lord
Congregation and the Partida Elementary School. The ocular inspection of the
commissioners also reveals that opposite the road, about half a km away, is an
ongoing resort project, the Falcon Crest Resort, and, about 200 meters away, the
proposed Catholic Retreat House. While there are no existing structures or
improvements on the residential portion of the lot, the same is situated along the
all-weather (gravel) road and is fronting the property. On the agricultural portion
thereof, the same appears to have been cultivated prior to the taking, as
petitioner offered to compensate respondents heirs damages to the crops, plants
and trees.
The trial court fixed the just compensation for the property as follows: (1) P499.00
per sq m on the 17,195 sq m agricultural portion of the subject land; and
(2) P800.00 per sq m on the 6,565 sq m residential portion of the lot. Noticeably,
the trial court did not blindly accept the recommendation of majority of the
commissioners of P800.00 per sq m for the residential lot and P700.00 per sq m
for the agricultural lot. Indeed, the trial court took into account the evidence of
the parties, in tandem with the findings and recommendation of the majority of
the commissioners. Considering that such valuation of the trial court as affirmed
by the CA is reasonable as it is and supported by the evidence on record, we find
no compelling reason to disturb the same.[51]
The Court is not persuaded by petitioners argument that respondents had not
shown that the condition of the adjoining properties, i.e., improvements, had
increased their lands economic value. It bears stressing that there is absence of
any available sales data on properties within the vicinity of respondents land for
the years 1996 and 1997, the time of the taking. The property of respondent was
the first to be sold. It is thus an exercise in futility for respondents to require
evidence of sales of properties in the vicinity when no such transactions took
place.
Petitioners contention that the trial court should have based the fixing of just
compensation on the appraisal report of Cuervo Appraisers, Inc. (where petitioner
based its Resolution No. 97-246) is likewise untenable. Petitioner failed to present
the so-called report of the Cuervo Appraisers, Inc. as evidence. We note that
annexed to NPC Resolution No. 97-246 is a data of the NPC Board Appraisal on the
Fair Market Value of residential lands along the concrete road in Sapang Palay,
San Jose Del Monte, valued at P499.00 per sq m, which, however, is not signed nor
authenticated. If, at all, the values indicated therein are self-serving to petitioner.
Parenthetically, petitioner has not explained why it agreed on paying just

compensation of P499.00 per sq m on the agricultural lands of the spouses
Lagula, when the purported Cuervo Appraisal Report indicates that the fair
market value of unirrigated riceland along the road is only P110.00 per sq m, and
for an unirrigated interior only P85.00 per sq m.[52] Had petitioner really believed
Cuervos appraisal, then, it should have likewise insisted on the values therein
when it dealt with the spouses Lagulas.
Notably, the lower courts valuations of respondents property P499.00 per sq m

on the agricultural portion and P800.00 per sq m on the residential portion of the
lot are near the estimates made by the following: (1) the Provincial Appraisal
Committee, in its Resolution No. 97-005, which are P400.00 for agricultural
and P600.00 for residential;[53] (2) the recommendation in the majority report of
the commissioners (P700.00 for agricultural and P800.00 for residential); and (3)
the opinion values, which are P643.00 for agricultural and P1,075.00 for
residential. On the other hand, the valuations made by Atty. Alog, P89.00 for
agricultural and P230.00 for residential, are unconscionably low, understandably
so because he works for petitioner.
On the question as to whether petitioner shall pay only an easement fee to

respondents heirs, the following pronouncement in National Power Corporation v.
Aguirre-Paderanga[54] is enlightening:

Indeed, expropriation is not limited to the acquisition of real property with a
corresponding transfer of title or possession. The right-of-way easement resulting in a
restriction or limitation on property rights
over the land traversed by transmission lines, as in the present case, also falls within the
ambit of the term expropriation. As explained in National Power Corporation v.
Gutierrez, viz:
The trial courts observation shared by the appellate court show

that x x x While it is true that plaintiff [is] only after a right-of-way
easement, it nevertheless perpetually deprives defendants of their
proprietary rights as manifested by the imposition by the plaintiff upon
defendants that below said transmission lines no plant higher than
three (3) meters is allowed. Furthermore, because of the high-tension
current conveyed through said transmission lines, danger to life and
limbs that may be caused beneath said wires cannot altogether be
discounted, and to cap it all, plaintiff only pays the fee to defendants
once, while the latter shall continually pay the taxes due on said
affected portion of their property.
The foregoing facts considered, the acquisition of the right-of-

way easement falls within the purview of the power of eminent
domain. Such conclusion finds support in similar cases of easement of
right-of-way where the Supreme Court sustained the award of just
compensation for private property condemned for public use
(See National Power Corporation v. Court of Appeals, 129 SCRA 665,
1984; Garcia v. Court of Appeals, 102 SCRA 597, 1981). The Supreme
Court, in Republic of the Philippines v. PLDT, thus held that:
Normally, of course, the power of eminent domain results in the

taking or appropriation of title to, and possession of, the expropriated
property; but no cogent reason appears why said power may not be
availed of to impose only a burden upon the owner of condemned
property, without loss of title and possession. It is unquestionable that
real property may, through expropriation, be subjected to an easement
of right-of-way.

In the case at bar, the easement of right-of-way is definitely a taking under the
power of eminent domain. Considering the nature and effect of the installation of the
230 KV Mexico-Limay transmission lines, the limitation imposed by NPC against the use
of the land for an indefinite period deprives private respondents of its ordinary use.[55]
Similarly, in this case, the commissioners observation on the reported constant

loud buzzing and exploding sounds emanating from the towers and transmission
lines, especially on rainy days; the constant fear on the part of the landowners
that the large transmission lines looming not far above their
land and the huge tower in front of their lot will affect their safety and health; and
the slim chance that no one would be interested to buy the remaining portions on
each side of the residential lot affected by the project, to the damage of the
landowners, both as to future actual use of the land and financial gains to be
derived therefrom, makes the instant case fall within the ambit of expropriation.
WHEREFORE, premises considered, the appeal is hereby DENIED for lack of

merit. The ruling of the Court of Appeals in CA-G.R. CV No. 72860 is AFFIRMED.

SO ORDERED.

ROMEO J. CALLEJO, SR.
Associate Justice

WE CONCUR:

Chief Justice
Chairperson

CONSUELO YNARES-SANTIAGO MA. ALICIA AUSTRIA-MARTINEZ

MINITA V. CHICO-NAZARIO
Associate Justice

CERTIFICATION

Pursuant to Section 13, Article VIII of the Constitution, it is hereby certified

that the conclusions in the above Decision were reached in consultation before
the case was assigned to the writer of the opinion of the Courts Division.
Chief Justice
[1]
Penned by Associate Justice Japar B. Dimaampao, with Associate Justices Martin S. Villarama, Jr. and Edgardo
F. Sundiam, concurring; CA rollo, pp. 162-177.
[2]
Id. at 195-196.
[3]
Records, p. 2.
[4]
Id.
[5]
Id. at 16.
[6]
Id. at 17-18.
[7]
Id. at 21.
[8]
Id. at 29-30.
[9]
Id. at 133.
[10]
Id. at 1-8.
[11]
Id. at 12-15.
[12]
Id. at 19-20 and 258.
[13]
Id. at 65-70.
[14]
Id. at 93-94.
[15]
Id. at 115.
[16]
Id. at 116.
[17]
Id. at 161.
[18]
Id. at 240-242.
[19]
Id. at 242.
[20]
Id. at 240-242.
[21]
Id. at 245-246.
[22]
Id. at 250.
[23]
Id. at 202-211.
[24]
Id. at 210-211.
[25]
Id. at 212.
[26]
Id. at 215-218.
[27]
[28]
Id. at 77-78.
[29]
Id. at 55.
[30]
G.R. No. 150936, August 18, 2004, 437 SCRA 60.
[31]
CA rollo, p. 176.
[32]
Id. at 178-189.
[33]
Id. at 195-196.
[34]
Id. at 22.
[35]
National Power Corporation v. Court of Appeals, G.R. No. 113194, March 11, 1996, 254 SCRA 577, 592.
[36]
Rollo, pp. 23-24.
[37]
Id. at 25.
[38]
Id. at 26.
[39]
Republic of the Philippines v. Court of Appeals, 433 Phil. 106, 122 (2002).
[40]
Napocor v. Sps. Igmedio, 452 Phil. 649, 664 (2003).
[41]
Id. at 236.
[42]
Id. at 238.
[43]
Id. at 239.
[44]
Id. at 226-227.
[45]
Id. at 224.
[46]
Id. at 228-234.
[47]
No. L-59603, April 29, 1987, 149 SCRA 305.
[48]
Id. at 315-316.
[49]
18, 2004, 437 SCRA 60, 69.
[50]
Records, p. 239.
[51]
Bank of the Philippine Islands v. Court of Appeals, G.R. No. 160890, November 10, 2004, 441 SCRA 637, 644.
[52]
Records, p. 34.
[53]
Id. at 20 and 258.
[54]
G.R. No. 155065, July 28, 2005, 464 SCRA 481.
[55]
Id. at 493-494.

SECOND DIVISION
Petitioner,
Present:
QUISUMBING, J.,
Chairperson,
TINGA,
VELASCO, JR., and
BRION, JJ.
MARIA BAGUI, VEDASTO
BAGUI, FELICIANA BAGUI,
EPIFANIA BAGUI, HEIRS OF Promulgated:
MARGARITO MACARAIG and
WIFE, represented by Dolores October 17, 2008
Macaraig, NIEVES VALDEZ and
JAIME MARQUEZ,
Respondents.
x---------------------------------------------------------------------------x
DECISION

TINGA, J.:
Subject of this Petition for Review[1] is the Decision[2] dated 16 August

2004 of the Court of Appeals in CA-G.R. CV No. 72399, which affirmed in
toto the 30 May 2001 Decision[3] of the Regional Trial Court (RTC) of Batangas City,
Branch 84 in the expropriation case filed by the National Power Corporation
(NPC).
Petitioner NPC is a government-owned and controlled corporation created

and existing by virtue of Republic Act (R.A.) No. 6395 for the purpose of
undertaking the development of hydroelectric generation of power and
production of electricity from any and all sources.[4] Respondents are the owners
of parcels of land situated in the province of Batangas, particularly described
below, to wit:

LOT/BLOCK NO. LOCATION OF TOTAL AREA
PROPERTY AREA (in AFFECTED (in
sq.m.) sq.m)
Maria, Vedasto, 4413-G-1 pt. Mahabang Parang 427[5] 427

Feliciana and
Efipania Bagui
(Baguis),
Heirs of Margarito 2110 Banaba San 8,098[6] 680

Macaraig and Pascual
wife, represented
by Dolores
Macaraig
(Macaraig),
Nieves Valdez 2263 pt. (Lot 061) Banaba San 450[7] 256.75

(Valdez) Pascual
Jaime Marquez Lot 1-B-9-B Banaba San 336[8] 336

(Marquez) Pascual
Culled from the records are the following established facts:
On 10 March 2000, NPC filed a complaint for eminent domain against
respondents before the RTC.[9] NPC sought to acquire an easement of right-of-way
over portions of the subject lots, including the properties of Adriana Belegal
(Belegal), Spouses Ernesto and Necitas Bool (Spouses Bool) and Spouses
Geronimo and Teresita David (Spouses David).[10]
The total area sought to be expropriated by NPC for the purpose of

constructing and maintaining its San Pascual Cogeneration Associated
Transmission Line Project covered 9,528 square meters. NPC expressed
willingness to deposit the total amount of P33,645.31 representing the assessed
values for taxation purposes of the affected portions of the subject lots.[11]
Belegal and Spouses David filed their answer[12] wherein they contended

that the amount needed to be deposited before it could take or enter their
properties should be at least fifteen percent (15%) of the fair market value of the
properties based on the current tax declarations.[13] Spouses Bool and
respondents Baguis, whose properties were substantially affected by the
easement of right-of-way, were represented by the Public Attorneys Office. They
sought payment of just compensation equivalent to the full market value of the
properties sought to be expropriated in their entirety.[14]
Upon deposit of the amount representing the provisional value of the

subject properties and service upon respondents of the Notice to Take
Possession,[15] NPC filed an urgent ex-parte motion for the issuance of a writ of
possession.[16] Respondents filed their opposition.[17] In an Order dated 18 August
2000,[18] the trial court directed both parties to submit the valuation of the
improvements on their properties, and specifically NPC alone to make a valuation
of the existing house of the Baguis.
Subsequently, in the order[19] dated 1 September 2000, the trial court

appointed a set of three commissioners to determine the fair market value of the
lands of Belegal, Spouses Bool, Spouses David and respondents Baguis, and a
second set of three commissioners to ascertain the fair market value of the
lands[20] of respondents Macaraig, Valdez and Marquez.[21]
The first set of commissioners submitted its initial Report[22] recommending

the amounts of P1,162.00, P938.78, and P1,654.40 per square meter for the
properties of Belegal, Spouses David and respondents Baguis,[23] respectively. The
Report was rectified[24] and a new valuation was made only for the properties of
Belegal and Spouses David at P1,134.22 per square meter and P1,000.65 per
square meter, respectively. The valuation for respondents Baguis remained the
same.[25] The second set of commissioners submitted its Appraisal Report setting
the fair market value of the lands of respondents Macaraig, Marquez
and Valdez at P250.00, P350.00 and P3,000.00 per square meter, respectively.

In accordance with the trial courts orders[26] directing the issuance of writs
of possession for the subject properties, on 19 December 2000, the clerk of court
issued a writ of possession in favor of NPC.[27]
Finding the appraisal valuations of the two sets of commissioners as

reasonable and fair, the trial court, in its Decision dated 30 May 2001, ordered
NPC to pay compensation to respondents at the stated fair market values per
square meter of their respective lots.[28]
NPC appealed the decision of the trial court to the Court of Appeals.[29]
During the pendency of the appeal, partial compromise agreements were

entered into by NPC and respondents Belegal, Spouses David and Spouses Bool.
[30]
The appellate court admitted these agreements, thus making the judgment
final and executory between them.[31] Respondent Marquez also entered into an
amicable settlement with NPC.[32]
On 16 August 2004, the appellate court promulgated its decision affirming
the trial courts judgment in favor of respondents Baguis, Macaraig, Valdez and
Marquez against NPC.[33] The decision is now before this Court.

Through the Office of the Solicitor General,[34] NPC makes a three-pronged

challenge to the valuations submitted by the commissioners in determining the
amount of just compensation. First, it argues that the computation of just
compensation should have been based on Section 3-A(b) of R.A. No. 6395, as
amended by Presidential Decree No. 938,[35] the governing law on eminent
domain complaints for easement of right-of-way. Second, it impugns the rectified
report of the first set of commissioners in giving weight to Opinion Value. Third, it
avers that the appraisal report of the second set of commissioners relied on
hearsay evidence, consisting of the opinion of the barangay chairman and the
estimate of the provincial assessor.
In sum, the NPC faults the appellate court in upholding the trial courts
decision, which, according to it, is based on speculative and baseless
recommendations of the commissioners.[36]
In their comment,[37] respondents counter that Section 3-A(b) of R.A. No.

6395, as amended, does not apply. They contend that the use of the lands to be
expropriated is not limited to easement of right-of-way purposes, stressing that
the nature and effect of the construction and maintenance of the San Pascual
Cogeneration Associated Transmission Line Project have effectively deprived
them of the ordinary use of their lands. On that basis, they justify the
recommended valuation of the property, which also took into account the nature
and consequential damages incurred by the affected properties.[38]
The instant petition essentially brings forth two issues, one of law and the
other of fact. The legal issue is whether NPC should be made to pay just
compensation in terms of the full market value of the properties traversed by the
transmission lines. This matter has long been decided by this Court in a plethora
of cases and must now be laid to rest.
In National Power Corporation v. Manubay Agro-Industrial Development

Corporation[39] involving an easement of a right-of-way over a parcel of land that
would be traversed by high-powered transmission lines, the Court held that the
nature and effect of the installation of power lines and the limitations on the use
of the land for an indefinite period would deprive the owners of the normal use of
their properties. Thus, just compensation must be based on the full market value
of the affected properties.[40] This ruling was reiterated in NPC v.
Bongbong[41] which also pertained to the acquisition of a simple right-of-way
easement for the passage of overhead transmission lines.
In the case of NPC v. Purefoods,[42] NPC had to acquire an easement of right-

of-way over certain parcels of land in Bulacan for the construction and
maintenance of the San Jose-San Manuel 500 KV Transmission Line Project. The
Court, invoking National Power Corporation v. Aguirre-Paderanga,[43] also
sustained the affected property owners right to recover consequential damages in
addition to the market value, in cases where only a part of a certain property is
expropriated.[44]
Moreover, Section 3A-(b) of R.A. No. 6395, as amended, is not binding on

the Court. It has been repeatedly emphasized that the determination of just
compensation in eminent domain cases is a judicial function[45] and that any
valuation for just compensation laid down in the statutes may serve only as a
guiding principle or one of the factors in determining just compensation but it
may not substitute the court's own judgment as to what amount should be
awarded and how to arrive at such amount.[46]
On the other hand, the factual issue is whether the determinations of just
compensation made by the trial court, as affirmed by the Court of Appeals, are
correct.
As a general rule, the Court will not disturb the factual findings of the trial
and appellate courts unless they are grounded entirely on speculations, surmises
or conjectures,[47] among others.[48] The aforecited exception partly obtains in this
case.
Challenged by the NPC are the reports submitted by two separate sets of
commissioners. The first set of commissioners report deals with the property of
the Baguis while the second set of commissioners report covers the properties of
respondents Macaraig and Valdez.
The trial court found the appraisal valuations reasonable and fair. The
appellate court saw no basis to disturb these valuations, thus:

As can be gleaned from the Records, the lower court and the groups of
Commissioners did not abuse their authority in evaluating the evidence submitted to
them nor misappreciate the clear preponderance of evidence. The amount fixed by the
court a quo is not grossly exorbitant. Be it reminded that the Commissioners are
considered as experts, with general knowledge of the appraisal of land and the
prevailing prices of land in the vicinity of the land in question so that their opinion on
the valuation of the property cannot be lightly brushed aside. The prevailing market
value of the land in the present case were clearly shown, hence, We find no ground to
depart from the lower courts findings. (citations omitted)[49]

Just compensation is defined as the full and fair equivalent of the

property taken from its owner by the expropriator. In this case, this simply
means the propertys fair market value at the time of the filing of the
complaint, or that sum of money which a person desirous but not compelled
to buy, and an owner willing but not compelled to sell, would agree on as price
to be given and received therefor. The measure is the not the takers gain, but
the owners loss.[50]

While market value may be one of the bases of determining just
compensation, the same cannot be arbitrarily arrived at without considering
the factors to be appreciated in arriving at the fair market value of the
property, e.g., the cost of acquisition, the current value of like properties, its
size, shape, location, as well as the tax declarations thereon.[51]

The first set of commissioners report covering the property of respondent
Baguis has a recommended valuation of P1,654.40 per square meter. NPC
questions the factors considered by the commissioners in arriving at their
valuation. It assails the employment of opinions which were not supported by
actual sales transactions. Moreover, it also disputes the usage of the
CALABARZON value in that none of the affected lots lie along the stretch of the
CALABARZON road.
Incidentally, the opinion and CALABARZON values were relatively

[52]
high . However, these were only two of the many factors that were looked into
by the commissioners in their valuation. They also considered the average sales
data, zonal valuation, and loan value in coming up with a reasonable estimate of
just compensation. The valuation was arrived at after carefully weighing in all
these factors and should thus be upheld.
A different valuation treatment was accorded by the second set of

commissioners to the properties of respondents Macaraig and Valdez. As argued
by the NPC, the condition of the properties was not considered, instead the
commissioners relied solely on the assessment made by the Provincial Appraisal
Committee in Resolution No. 03-99 involving a property similarly situated.[53]
Section 4, Rule 67 of the 1997 Rules of Civil Procedure provides that just
compensation is to be determined as of the date of the taking or the filing of the
complaint whichever came first. In this case, the complaint for expropriation was
filed on 10 March 2000 while the trial court issued a writ of possession on 19
December 2000. Resolution No. 03-99 setting the fair market value of the
property in Banaba, San Pascual, Batangas at P250.00 per square meter was
issued on 2 March 1999. Clearly, the market value could no longer be accurate as
prices might have been distorted after a year. Furthermore, the commissioners
did not bother to explain the similarities in the nature, character or condition
between the properties of respondents and the properties subject of the
resolution.
Worse, the commissioners valuation of the Valdez property was based

only on an information that a similar lot in the same subdivision was sold
at P350.00. The source of that information was not stated. Being
unsubstantiated, the valuation cannot support the compensation award.

WHEREFORE, the petition is PARTLY GRANTED. The assailed Decision of the Court

of Appeals in CA-G.R. CV No. 72399 is AFFIRMED insofar as it refers to the
properties of the Baguis. This case is REMANDED to the trial court for the proper
determination of the amount of just compensation with respect to the properties
of respondents Macaraig and Valdez. No costs.
SO ORDERED.

DANTE O. TINGA Associate
Justice
WE CONCUR:

Associate Justice
ARTURO D. BRION
Associate Justice

ATTESTATION

Associate Justice
C E R T I F I CA T I O N
Chairpersons Attestation, it is hereby certified that the conclusions in the above
Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Courts Division.

REYNATO S. PUNO
Chief Justice

[1]
Rollo, pp. 9-28.

[2]
Id. at 30-35; penned by Associate Justice Jose L. Sabio, Jr. and concurred in by Associate Justices Perlita
Tria Tirona and Noel G. Tijam.

[3]
Id. at 36-38.

[4]
Records, p. 1.

[5]
Id. at 10.

[6]
Id. at 11.

[7]
Id. at 12.

[8]
Id. at 13.

[9]
Id. at 1-6.

[10]
LOT/BLOCK NO. LOCATION OF TOTAL AREA

PROPERTY AREA (in sq. AFFECTED (in
m.) sq. m)
Adriana Belegal 3294 Banaba, Silangan 10,5677 4,733
Batangas City
Sps. Ernesto and 3293 pt. Banaba, Silangan 8007 702
Necitas Bool Batangas City
Geronimo and 3158 pt. (Lot 043) Banaba Center 1,5457 1389.50
Teresita David 3158 pt. (Lot 044) Batangas City 1, 5447 1003.75

[11]
Id. at 3-4.

[12]
Id. at 71-74.

[13]
Id. at 72.

[14]
Id. at 66-67, 76-77.

[15]
Id. at 78-79.

[16]
Id. at 90-92.

[17]
Id. at 118-122.

[18]
Id. at 138.

[19]
Id. at 146-147.

[20]
All lands are located in Banaba, San Pascual.

[21]
Id. at 146. In the same order, the trial court also set the fair market value of the improvements of the
Baguis at P135,000.00 for Maria, while that of Feliciana, who is a co-owner of the lot but has a house of her own
situated therein, at P230,000.00.

[22]
Id. at 175-179.

[23]
Id. at 178.

[24]
Id. at 208-212.

[25]
Id. at 211.

[26]
Id. at 240-241.

[27]
Id. at 254-255.

[28]
Id. at 355-356.

[29]
Id. at 359.

[30]
CA rollo, pp. 161-177. Under the partial compromise agreement, the parties agreed that NPC shall pay
the following amounts to some of the respondents:

Belegal 567.11 per square meter P2,592,826.92
Bool 567.11 per square meter P 300,568.30
David 410.00 per square meter P 483,190.00

[31]
Id. at 179-185.

[32]
Rollo, p. 67.

[33]
Id. at 34.

[34]
Id. at 41-79.

[35]
SEC. 3A. In acquiring private property or private property rights through expropriation proceedings
where the land or portion thereof will be traversed by the transmission lines, only a right-of-way
easement thereon shall be acquired when the principal purpose for which such land is actually devoted
will not be impaired, and where the land itself or portion thereof will be needed for the projects or works,
such land or portion thereof as necessary shall be acquired.


x x x
(b) With respect to the acquired right-of-way easement over the land or portion thereof, not to exceed
ten percent (10%) of the market value declared by the owner or administrator or anyone having legal
interest in the property, or such market value as determined by the assessor whichever is lower.

[36]
Rollo, pp. 16-24.

[37]
Id. at 147. Due to the failure of respondents Baguis, et al. to file a comment on the petition despite
repeated warnings, they were deemed to have waived the filing of comment.

[38]
Id. at 116-120.

[39]
G.R. No. 150936, 18 August 2004, 437 SCRA 60.

[40]
Id. at 69.

[41]
G.R. No. 164079, 3 April 2007, 520 SCRA 290.

[42]
G.R. No. 160725, 12 September 2008.

[43]
G.R. No. 155065, 28 July 2005, 464 SCRA 481.

[44]
Supra note 42.
[45]
Land Bank of the Philippines v. Celada, G.R. No. 164876, 23 January 2006, 479 SCRA 495, 505.
[46]
Export Processing Zone Authority v. Dulay, G.R. No. L-59603, 29 April 1987, 149 SCRA 305, 312.

[47]
Tigoy v. Court of Appeals, G.R. No. 144640, 26 June 2006, 494 SCRA 539, 549.

[48]
Factual findings of the trial court, when adopted and confirmed by the Court of Appeals are final and
conclusive, and may not be reviewed on appeal except: (1) when the inference made is manifestly mistaken, absurd
or impossible; (2) when there is a grave abuse of discretion; (3) when the finding is grounded entirely on
speculations, surmises or conjectures; (4) when the judgment of the Court of Appeals is based on a misapprehension
of facts; (5) when the Court of Appeals, in making its findings, went beyond the issues of the case and the same is
contrary to the admissions of both appellant and appellee; (6) when the findings of fact are conclusions without
citation of specific evidence on which they are based; (7) when the Court of Appeals manifestly overlooked certain
relevant facts not disputed by the parties and which, if properly considered, would justify a different conclusion;
and, (8) when the findings of fact are premised on the absence of evidence and are contradicted by the evidence on
record. See Almendrala v. Ngo, G.R. No. 142408, 30 September 2005, 471 SCRA 311, 322.

[49]
Rollo, p. 34.

[50]
National Power Corporation v. Tiangco, G.R. No. 170846, 6 February 2007, 514 SCRA 674, 685.
[51]
Land Bank of the Phi. v. Wycoco, 464 Phil. 83, 97 (2004).

[52]
Opinion value was set at P1,500.00 per square meter while CALABARZON value was at P4,000.00 per
square meter.

[53]
The mayor of San Pascual made a request for said assessment for the purpose of purchasing a lot in the
area to be used as a dumping site. Subsequently on 2 March 1999, the provincial assessors recommended a valuation
of P250.00 per square meter.

Supreme Court
Manila

THIRD DIVISION

ANECO REALTY AND G.R. No. 165952

DEVELOPMENT
CORPORATION, Present:
Petitioner,
Chairperson,
AUSTRIA-MARTINEZ,
- versus - CHICO-NAZARIO,
NACHURA, and
REYES, JJ.

LANDEX DEVELOPMENT Promulgated:
CORPORATION,
Respondent. July 28, 2008

x--------------------------------------------------x

DECISION

REYES, R.T., J.:

THIS is a simple case of a neighbor seeking to restrain the landowner from fencing
his own property. The right to fence flows from the right of ownership. Absent a
clear legal and enforceable right, We will not unduly restrain the landowner from
exercising an inherent proprietary right.

Before Us is a petition for review on certiorari of the Decision[1] of the Court
of Appeals (CA) affirming the Order[2] of the Regional Trial Court (RTC) dismissing
the complaint for injunction filed by petitioner Aneco Realty and Development
Corporation (Aneco) against respondent Landex Development Corporation
(Landex).
Facts
Fernandez Hermanos Development, Inc. (FHDI) is the original owner of a

tract of land in San Francisco Del Monte, Quezon City. FHDI subdivided the land
into thirty-nine (39) lots.[3] It later sold twenty-two (22) lots to
petitioner Aneco and the remaining seventeen (17) lots to respondent Landex.[4]
The dispute arose when Landex started the construction of a concrete wall on one

of its lots. To restrain construction of the wall, Aneco filed a complaint for
injunction[5] with the RTC in Quezon City. Aneco later filed two (2) supplemental
complaints seeking to demolish the newly-built wall and to hold Landex liable for
two million pesos in damages.[6]
Landex filed its Answer[7] alleging, among others, that Aneco was not deprived

access to its lots due to the construction of the concrete wall. Landex claimed
that Aneco has its own entrance to its property along Miller
Street, Resthaven Street, and San Francisco del Monte
Street. The Resthaven access, however, was rendered inaccessible
when Anecoconstructed a building on said street. Landex also claimed that FHDI
sold ordinary lots, not subdivision lots, to Aneco based on the express stipulation
in the deed of sale that FHDI was not interested in pursuing its own subdivision
project.

RTC Disposition
On June 19, 1996, the RTC rendered a Decision[8] granting the complaint for

injunction, disposing as follows:

Wherefore, premises considered, and in the light aforecited decision of the
Supreme Court judgment is hereby rendered in favor of the plaintiff and the defendant
is hereby ordered:
1. To stop the completion of the concrete wall and excavation of the
road lot in question and if the same is already completed, to
remove the same and to return the lot to its original situation;
2. To pay actual and compensatory damage to the plaintiff in the total
amount of P50,000.00;
3. To pay attorneys fees in the amount of P20,000.00;
4. To pay the cost.
SO ORDERED.[9]

Landex moved for reconsideration.[10] Records reveal that Landex failed to include
a notice of hearing in its motion for reconsideration as required under Section 5,
Rule 15 of the 1997 Rules of Civil Procedure. Realizing the defect, Landex later
filed a motion[11] setting a hearing for its motion for
reconsideration. Aneco countered with a motion for execution[12] claiming that
the RTC decision is already final and executory.
Acting on the motion of Landex, the RTC set a hearing on the motion for

reconsideration on August 28, 1996. Aneco failed to attend the slated
hearing. The RTC gave Aneco additional time to file a comment on the motion for
reconsideration.[13]
On March 13, 1997, the RTC issued an order[14] denying the motion for

execution of Aneco.
On March 31, 1997, the RTC issued an order granting the motion for

reconsideration of Landex and dismissing the complaint of Aneco. In granting
reconsideration, the RTC stated:

In previously ruling for the plaintiff, this Court anchored its decision on the
ruling of the Supreme Court in the case of White Plains Association vs. Legaspi, 193
SCRA 765, wherein the issue involved was the ownership of a road lot, in an existing,
fully developed and authorized subdivision, which after a second look, is apparently
inapplicable to the instant case at bar, simply because the property in question never
did exist as a subdivision. Since, the property in question never did exist as a subdivision,
the limitations imposed by Section 1 of Republic Act No. 440, that no portion of a
subdivision road lot shall be closed without the approval of the Court is clearly in
appropriate to the case at bar.

The records show that the plaintiffs property has access to a public road as it
has its own ingress and egress along Miller St.; That plaintiffs property is not isolated as
it is bounded by Miller St. and Resthaven St. in San Francisco del Monte, Quezon City;
that plaintiff could easily make an access to a public road within the bounds and limits of
its own property; and that the defendant has not yet been indemnified whatsoever for
the use of his property, as mandated by the Bill of rights. The foregoing circumstances,
negates the alleged plaintiffs right of way.[15]
Aneco appealed to the CA.[16]
CA Disposition
On March 31, 2003, the CA rendered a Decision[17] affirming the RTC order,

disposing as follows:

WHEREFORE, in consideration of the foregoing, the instant appeal is
perforce dismissed. Accordingly, the order dated 31 March 1996 is hereby affirmed.
SO ORDERED.[18]
In affirming the RTC dismissal of the complaint for injunction, the CA held

that Aneco knew at the time of the sale that the lots sold by FHDI were not
subdivision units based on the express stipulation in the deed of sale that FHDI,
the seller, was no longer interested in pursuing its subdivision project, thus:

The subject property ceased to be a road lot when its former owner
(Fernandez Hermanos, Inc.) sold it to appellant Aneco not as subdivision lots and
without the intention of pursuing the subdivision project. The law in point is Article 624
of the New Civil Code, which provides:
Art. 624. The existence of an apparent sign of easement

between two estates, established or maintained by the owner of both,
shall be considered, should either of them be alienated, as a title in
order that the easement may continue actively and passively, unless, at
the time the ownership of the two estates is divided, the contrary
should be provided in the title of conveyance of either of them, or the
sign aforesaid should be removed before the execution of the deed. This
provision shall also apply in case of the division of a thing owned in
common by two or more persons.
Viewed from the aforesaid law, there is no question that the law allows the
continued use of an apparent easement should the owner alienate the property to
different persons. It is noteworthy to emphasize that the lot in question was provided by
the previous owner (Fernandez Hermanos, Inc.) as a road lot because of its intention to
convert it into a subdivision project.The previous owner even applied for a development
permit over the subject property. However, when the twenty-two (22) lots were sold to
appellant Aneco, it was very clear from the sellers deed of sale that the lots sold ceased
to be subdivision lots. The seller even warranted that it shall undertake to extend all the
necessary assistance for the consolidation of the subdivided lots, including the execution
of the requisite manifestation before the appropriate government agencies that
the seller is no longer interested in pursuing the subdivision project. In fine,
appellant Aneco knew from the very start that at the time of the sale, the 22 lots sold to
it were not intended as subdivision units, although the titles to the different lots have
yet to be consolidated.Consequently, the easement that used to exist on the subject lot
ceased when appellant Aneco and the former owner agreed that the lots would be
consolidated and would no longer be intended as a subdivision project.
Appellant Aneco insists that it has the intention of continuing the subdivision

project earlier commenced by the former owner. It also holds on to the previous
development permit granted to Fernandez Hermanos, Inc. The insistence is
futile. Appellant Aneco did not acquire any right from the said previous owner since the
latter itself expressly stated in their agreement that it has no more intention of
continuing the subdivision project. If appellant desires to convert its property into a
subdivision project, it has to apply in its own name, and must have its own provisions for
a road lot.[19]

Anent the issue of compulsory easement of right of way, the CA held

that Aneco failed to prove the essential requisites to avail of such right, thus:

An easement involves an abnormal restriction on the property of
the servient owner and is regarded as a charge or encumbrance on the servient owner
and is regarded as a charge or encumbrance on the servient estate (Cristobal v. CA, 291
SCRA 122). The essential requisites to be entitled to a compulsory easement of way are:
1) that the dominant estate is surrounded by other immovables and has no adequate
outlet to a public highway; 2) that proper indemnity has been paid; 3) that the isolation
was not due to acts of the proprietor of the dominant estate; 4) that the right of way
claimed is at a point least prejudicial to the servient estate and in so far as consistent
the shortest (Cristobal v. Court of Appeals, 291 SCRA 122).
An in depth examination of the evidence adduced and offered by

appellant Aneco, showed that it had failed to prove the existence of the aforementioned
requisites, as the burden thereof lies upon the appellant Aneco.[20]
Aneco moved for reconsideration but its motion was denied.[21] Hence, the

present petition or appeal by certiorari under Rule 45.
Issues
Petitioner Aneco assigns quadruple errors to the CA in the following tenor:

A.
THE COURT OF APPEALS GRAVELY ERRED IN DISMISSING PETITIONERS

APPEAL AND SUSTAINING THE TRIAL COURTS ORDER DATED 31 MARCH 1997 GRANTING
RESPONDENTS MOTION FOR RECONSIDERATION WHICH IS FATALLY DEFECTIVE FOR
LACK OF NOTICE OF HEARING.
B.
THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE TRIAL

COURTS ORDER WHICH GAVE FULL WEIGHT AND CREDIT TO THE
MISLEADING ANDERRONEOUS CERTIFICATION ISSUED BY GILDA E. ESTILO WHICH SHE
LATER EXPRESSLY AND CATEGORICALLY RECANTED BY WAY OF HER AFFIDAVIT.
C.
THE COURT OF APPEALS GRAVELY ERRED IN APPLYING THE LIBERAL CONSTRUCTION OF

THE RULES IN ORDER TO SUSTAIN THE TRIAL COURTS ORDER DATED 31 MARCH 1997.
D.
THE COURT OF APPEALS GRAVELY ERRED IN AFFIRMING THE TRIAL

COURTS ORDER THAT MADE NO PRONOUNCEMENTS AS TO COSTS, AND IN
DISREGARDING THE MERIT OF THE PETITIONERS CAUSE OF ACTION.[22]
Our Ruling
The petition is without merit.
Essentially, two (2) issues are raised in this petition. The first is the
procedural issue of whether or not the RTC and the CA erred in liberally applying
the rule on notice of hearing under Section 5, Rule 15 of the 1997 Rules of Civil
Procedure. The second is the substantive issue of whether or not Aneco may
enjoin Landex from constructing a concrete wall on its own property.

We shall discuss the twin issues sequentially.

Strict vs. Liberal Construction of Procedural
Rules; Defective motion was cured
when Aneco was given an opportunity to
comment on the motion for
reconsideration.
Section 5, Rule 15 of the 1997 Rules of Civil Procedure[23] requires a notice

of hearing for a contested motion filed in court. Records disclose that the motion
for reconsideration filed by Landex of the RTC decision did not contain a notice of
hearing. There is no dispute that the motion for reconsideration is
defective. The RTC and the CA ignored the procedural defect and ruled on the
substantive issues raised by Landex in its motion for reconsideration. The issue
before Us is whether or not the RTC and the CA correctly exercised its discretion
in ignoring the procedural defect. Simply put, the issue is whether or not the
requirement of notice of hearing should be strictly or liberally applied under the
circumstances.
Aneco bats for strict construction. It cites a litany of cases which held that
notice of hearing is mandatory. A motion without the required notice of hearing is
a mere scrap of paper. It does not toll the running of the period to file an appeal
or a motion for reconsideration. It is argued that the original RTC decision is
already final and executory because of the defective motion.[24]
Landex counters for liberal construction. It similarly cites a catena of cases

which held that procedural rules may be relaxed in the interest of substantial
justice. Landexasserts that the procedural defect was cured when it filed a
motion setting a hearing for its motion for reconsideration. It is claimed
that Aneco was properly informed of the pending motion for reconsideration and
it was not deprived of an opportunity to be heard.[25]
It is true that appeals are mere statutory privileges which should be

exercised only in the manner required by law. Procedural rules serve a vital
function in our judicial system. They promote the orderly resolution of
cases. Without procedure, there will be chaos. It thus behooves upon a litigant to
follow basic procedural rules. Dire consequences may flow from procedural
lapses.
Nonetheless, it is also true that procedural rules are mere tools designed to
facilitate the attainment of justice. Their strict and rigid application should be
relaxed when they hinder rather than promote substantial justice. Public policy
dictates that court cases should, as much as possible, be resolved on the merits
not on mere technicalities. Substantive justice trumps procedural rules. In Barnes
v. Padilla,[26] this Court held:

Let it be emphasized that the rules of procedure should be viewed as mere tools
designed to facilitate the attainment of justice. Their strict and rigid application, which
would result in technicalities that tend to frustrate rather than promote substantial
justice, must always be eschewed. Even the Rules of Court reflect this principle. The
power to suspend or even disregard rules can be so pervasive and compelling as to alter
even that which this Court itself has already declared to be final x x x.
The emerging trend in the rulings of this Court is to afford every party litigant
the amplest opportunity for the proper and just determination of his cause, free from
the constraints of technicalities. Time and again, this Court has consistently held that
rules must not be applied rigidly so as not to override substantial justice.[27]

Here, We find that the RTC and the CA soundly exercised their discretion in opting
for a liberal rather than a strict application of the rules on notice of hearing. It
must be stressed that there are no vested right to technicalities. It is within the
courts sound discretion to relax procedural rules in order to fully adjudicate the
merits of a case. This Court will not interfere with the exercise of that discretion
absent grave abuse or palpable error. Section 6, Rule 1 of the 1997 Rules of Civil
Procedure even mandates a liberal construction of the rules to promote their
objectives of securing a just, speedy, and inexpensive disposition of every action
and proceeding.
To be sure, the requirement of a notice of hearing in every contested motion is

part of due process of law. The notice alerts the opposing party of a pending
motion in court and gives him an opportunity to oppose it. What the rule forbids
is not the mere absence of a notice of hearing in a contested motion but the
unfair surprise caused by the lack of notice. It is the dire consequences which flow
from the procedural error which is proscribed. If the opposing party is given a
sufficient opportunity to oppose a defective motion, the procedural lapse is
deemed cured and the intent of the rule is substantially complied. In E & L
Mercantile, Inc. v. Intermediate Appellate Court,[28] this Court held:

Procedural due process is not based solely on a mechanistic and literal
application of a rule such that any deviation is inexorably fatal. Rules of procedure, and
this includes the three (3) days notice requirement, are liberally construed in order to
promote their object and to assist the parties in obtaining just, speedy, and inexpensive
determination of every action and proceeding (Section 2, Rule 1, Rules of Court). In Case
and Nantz v. Jugo (77 Phil. 517), this Court made it clear that lapses in the literal
observance of a rule of procedure may be overlooked when they have not prejudiced
the adverse party and have not deprived the court of its authority.
A party cannot ignore a more than sufficient opportunity to exercise its right to
be heard and once the court performs its duty and the outcome happens to be against
that negligent party, suddenly interpose a procedural violation already cured, insisting
that everybody should again go back to square one. Dilatory tactics cannot be the
guiding principle.
The rule in De Borja v. Tan (93 Phil. 167), that what the law prohibits is not the
absence of previous notice, but the absolute absence thereof and lack of opportunity to
be heard, is the applicable doctrine. (See also Aguilar v. Tan, 31 SCRA
205; Omico v. Vallejos, 63 SCRA 285; Sumadchat v. Court of Appeals, 111 SCRA
488.) x x x[29]
We also find that the procedural lapse committed by Landex was

sufficiently cured when it filed another motion setting a hearing for its defective
motion for reconsideration.Records reveal that the RTC set a hearing for the
motion for reconsideration but Anecos counsel failed to appear. The RTC then
gave Aneco additional time to file comment on the motion for reconsideration.[30]
Aneco was afforded procedural due process when it was given an opportunity to

oppose the motion for reconsideration. It cannot argue unfair surprise because it
was afforded ample time to file a comment, as it did comment, on the motion for
reconsideration. There being no substantial injury or unfair prejudice, the RTC and
the CA correctly ignored the procedural defect.

The RTC and the CA did not err in
dismissing the complaint for injunction;
factual findings and conclusions of law of
the RTC and the CA are afforded great
weight and respect.
Anent the substantive issue, We agree with the RTC and the CA that the

complaint for injunction against Landex should be dismissed for lack of
merit. What is involved here is an undue interference on the property rights of a
landowner to build a concrete wall on his own property. It is a simple case of a
neighbor, petitioner Aneco, seeking to restrain a landowner, respondent Landex,
from fencing his own land.
Article 430 of the Civil Code gives every owner the right to enclose or fence
his land or tenement by means of walls, ditches, hedges or any other means. The
right to fence flows from the right of ownership. As owner of the
land, Landex may fence his property subject only to the limitations and
restrictions provided by law. Absent a clear legal and enforceable right, as
here, We will not interfere with the exercise of an essential attribute of
ownership.
Well-settled is the rule that factual findings and conclusions of law of the trial
court when affirmed by the CA are accorded great weight and
respect. Here, We find no cogent reason to deviate from the factual findings and
conclusion of law of the trial court and the appellate court. We have meticulously
reviewed the records and agree that Aneco failed to prove any clear legal right to
prevent, much less restrain, Landex from fencing its own property.
Aneco cannot rely on the road lot under the old subdivision project of FHDI
because it knew at the time of the sale that it was buying ordinary lots, not
subdivision lots, from FHDI. This is clear from the deed of sale between FHDI
and Aneco where FHDI manifested that it was no longer interested in pursuing its
own subdivision project. If Anecowants to transform its own lots into a
subdivision project, it must make its own provision for road lots. It certainly
cannot piggy back on the road lot of the defunct subdivision project of FHDI to the
detriment of the new owner Landex. The RTC and the CA correctly dismissed the
complaint for injunction of Aneco for lack of merit.
WHEREFORE, the petition is DENIED and the appealed Decision AFFIRMED.

SO ORDERED.

RUBEN T. REYES
Associate Justice

WE CONCUR:

Associate Justice
Chairperson

MA. ALICIA AUSTRIA-MARTINEZ MINITA V. CHICO-NAZARIO

Associate Justice

A T T E S T A T I O N

Courts Division.
Associate Justice
Chairperson
CERTIFICATION


REYNATO S. PUNO
Chief Justice

[1]
Rollo, pp. 56-65. Penned by Associate Justice Bienvenido L. Reyes, with Associate Justices Salvador J. Valdez,
Jr. and Danilo B. Pine, concurring.
[2]
Id. at 75-76.
[3]
Id. at 321.
[4]
Id. at 57.
[5]
Records, pp. 1-31.
[6]
Rollo, p. 58.
[7]
Records, pp. 51-82.
[8]
Id. at 194-199. Penned by Judge Demetrio B. Macapagal, Sr.
[9]
Id. at 199.
[10]
Id. at 269-276.
[11]
Id. at 277-278.
[12]
Id. at 284-288.
[13]
Rollo, p. 62.
[14]
Records, p. 306.
[15]
Id. at 307-308.
[16]
Id. at 309.
[17]
Rollo, pp. 56-65.
[18]
Id. at 64.
[19]
Id. at 62-64.
[20]
Id. at 64.
[21]
Id. at 27.
[22]
Id. at 28.
[23]
Rules of Civil Procedure (1997), Rule 15, Sec. 5 provides:
Except for motions which the court may act upon without prejudicing the rights of the adverse party,
every written motion shall be set for hearing by the applicant.
Every written motion required to be heard and the notice of the hearing thereof shall be served in such a
manner as to ensure its receipt by the other party at least three (3) days before the date of hearing, unless
the court for good cause sets the hearing on shorter notice.
[24]
Rollo, pp. 29-27.
[25]
Id. at 328-331.
[26]
G.R. No. 160753, June 28, 2005, 461 SCRA 533.
[27]
Barnes v. Padilla, id. at 541.
[28]
G.R. No. L-70262, June 25, 1986, 142 SCRA 385.
[29]
E & L Mercantile, Inc. v. Intermediate Appellate Court, id. at 392.
[30]
Rollo, p. 62.
[Syllabus]
SECOND DIVISION
[G.R. No. 116100. February 9, 1996]
SPOUSES CRISTINO and BRIGIDA CUSTODIO and SPOUSES LITO

and MARIA CRISTINA SANTOS, petitioners, vs. COURT OF
APPEALS, HEIRS OF PACIFICO C. MABASA and REGIONAL
TRIAL COURT OF PASIG, METRO MANILA, BRANCH
181, respondents.
DECISION
REGALADO, J.:
This petition for review on certiorari assails the decision of respondent Court of
Appeals in CA-G.R. CV No. 29115, promulgated on November 10, 1993, which affirmed
with modification the decision of the trial court, as well as its resolution dated July 8,
1994 denying petitioners motion for reconsideration. [1]
On August 26, 1982, Civil Case No. 47466 for the grant of an easement of right of
way was filed by Pacifico Mabasa against Cristino Custodio, Brigida R. Custodio,
Rosalina R. Morato, Lito Santos and Maria Cristina C. Santos before the Regional Trial
Court of Pasig and assigned to Branch 22 thereof. [2]
The generative facts of the case, as synthesized by the trial court and adopted by
the Court of Appeals, are as follows:
Perusing the record, this Court finds that the original plaintiff Pacifico Mabasa died
during the pendency of this case and was substituted by Ofelia Mabasa, his surviving
spouse [and children].
The plaintiff owns a parcel of land with a two-door apartment erected thereon situated
at Interior P. Burgos St., Palingon, Tipas, Taguig, Metro Manila. The plaintiff was
able to acquire said property through a contract of sale with spouses Mamerto Rayos
and Teodora Quintero as vendors last September 1981. Said property may be
described to be surrounded by other immovables pertaining to defendants herein.
Taking P. Burgos Street as the point of reference, on the left side, going to plaintiffs
property, the row of houses will be as follows: That of defendants Cristino and
Brigido Custodio, then that of Lito and Maria Cristina Santos and then that of Ofelia
Mabasa. On the right side (is) that of defendant Rosalina Morato and then a Septic
Tank (Exhibit D). As an access to P. Burgos Street from plaintiffs property, there are
two possible passageways. The first passageway is approximately one meter wide and
is about 20 meters distan(t) from Mabasas residence to P. Burgos Street. Such path is
passing in between the previously mentioned row of houses. The second passageway
is about 3 meters in width and length from plaintiff Mabasas residence to P. Burgos
Street; it is about 26 meters. In passing thru said passageway, a less than a meter wide
path through the septic tank and with 5-6 meters in length has to be traversed.
When said property was purchased by Mabasa, there were tenants occupying the
premises and who were acknowledged by plaintiff Mabasa as tenants. However,
sometime in February, 1982. one of said tenants vacated the apartment and when
plaintiff Mabasa went to see the premises, he saw that there had been built an adobe
fence in the first passageway making it narrower in width. Said adobe fence was first
constructed by defendants Santoses along their property which is also along the first
passageway. Defendant Morato constructed her adobe fence and even extended said
fence in such a way that the entire passageway was enclosed (Exhibit 1-Santoses and
Custodios, Exh. D for plaintiff, Exhs. 1-C, 1-D and I -E) And it was then that the
remaining tenants of said apartment vacated the area. Defendant Ma. Cristina Santos
testified that she constructed said fence because there was an incident when her
daughter was dragged by a bicycle pedalled by a son of one of the tenants in said
apartment along the first passageway. She also mentioned some other inconveniences
of having (at) the front of her house a pathway such as when some of the tenants were
drunk and would bang their doors and windows. Some of their footwear were even
lost. x x x[3] (Italics in original text; corrections in parentheses supplied)
On February 27, 1990, a decision was rendered by the trial court, with this
dispositive part:
Accordingly, judgment is hereby rendered as follows:
1) Ordering defendants Custodios and Santoses to give plaintiff permanent access -

ingress and egress, to the public street;
2) Ordering the plaintiff to pay defendants Custodios and Santoses the sum of Eight
Thousand Pesos (P8,000) as indemnity for the permanent use of the passageway.
The parties to shoulder their respective litigation expenses.[4]
Not satisfied therewith, therein plaintiff represented by his heirs, herein private
respondents, went to the Court of Appeals raising the sole issue of whether or not the
lower court erred in not awarding damages in their favor. On November 10, 1993, as
earlier stated, the Court of Appeals rendered its decision affirming the judgment of the
trial court with modification, the decretal portion of which disposes as follows:
WHEREFORE, the appealed decision of the lower court is hereby AFFIRMED WITH
MODIFICATION only insofar as the herein grant of damages to plaintiffs-appellants.
The Court hereby orders defendants-appellees to pay plaintiffs-appellants the sum of
Sixty Five Thousand (P65,000) Pesos as Actual Damages, Thirty Thousand (P30,000)
Pesos as Moral Damages, and Ten Thousand (P10,000) Pesos as Exemplary Damages.
The rest of the appealed decision is affirmed to all respects.[5]
On July 8, 1994, the Court of Appeals denied petitioners motion for reconsideration.
Petitioners then took the present recourse to us, raising two issues, namely, whether
[6]
or not the grant of right of way to herein private respondents is proper, and whether or
not the award of damages is in order.
With respect to the first issue, herein petitioners are already barred from raising the
same. Petitioners did not appeal from the decision of the court a quo granting private
respondents the right of way, hence they are presumed to be satisfied with the
adjudication therein. With the finality of the judgment of the trial court as to petitioners,
the issue of propriety of the grant of right of way has already been laid to rest.
For failure to appeal the decision of the trial court to the Court of Appeals,
petitioners cannot obtain any affirmative relief other than those granted in the decision
of the trial court. That decision of the court below has become final as against them and
can no longer be reviewed, much less reversed, by this Court. The rule in this
jurisdiction is that whenever an appeal is taken in a civil case, an appellee who has not
himself appealed may not obtain from the appellate court any affirmative relief other
than what was granted in the decision of the lower court.The appellee can only advance
any argument that he may deem necessary to defeat the appellants claim or to uphold
the decision that is being disputed, and he can assign errors in his brief if such is
required to strengthen the views expressed by the court a quo. These assigned errors,
in turn, may be considered by the appellate court solely to maintain the appealed
decision on other grounds, but not for the purpose of reversing or modifying the
judgment in the appellees favor and giving him other affirmative reliefs. [7]
However, with respect to the second issue, we agree with petitioners that the Court
of Appeals erred in awarding damages in favor of private respondents. The award of
damages has no substantial legal basis. A reading of the decision of the Court of
Appeals will show that the award of damages was based solely on the fact that the
original plaintiff, Pacifico Mabasa, incurred losses in the form of unrealized rentals when
the tenants vacated the leased premises by reason of the closure of the passageway.
However, the mere fact that the plaintiff suffered losses does not give rise to a right
to recover damages. To warrant the recovery of damages, there must be both a right of
action for a legal wrong inflicted by the defendant, and damage resulting to the plaintiff
therefrom. Wrong without damage, or damage without wrong, does not constitute a
cause of action, since damages are merely part of the remedy allowed for the injury
caused by a breach or wrong.[8]
There is a material distinction between damages and injury. Injury is the illegal
invasion of a legal right; damage is the loss, hurt, or harm which results from the injury;
and damages are the recompense or compensation awarded for the damage
suffered. Thus, there can be damage without injury in those instances in which the loss
or harm was not the result of a violation of a legal duty. These situations are often
called damnum absque injuria.[9] in order that a plaintiff may maintain an action for the
injuries of which he complains, he must establish that such injuries resulted from a
breach of duty which the defendant owed to the plaintiff - a concurrence of injury to the
plaintiff and legal responsibility by the person causing it. [10] The underlying basis for the
award of tort damages is the premise that an individual was injured in contemplation of
law. Thus, there must first be the breach of some duty and the imposition of liability for
that breach before damages may be awarded; it is not sufficient to state that there
should be tort liability merely because the plaintiff suffered some pain and suffering) [11]
Many accidents occur and many injuries are inflicted by acts or omissions which
cause damage or loss to another but which violate no legal duty to such other person,
and consequently create no cause of action in his favor. In such cases, the
consequences must be borne by the injured person alone. The law affords no remedy
for damages resulting from an act which does not amount to a legal injury or wrong. [12]
In other words, in order that the law will give redress for an act causing damage,
that act must be not only hurtful, but wrongful. There must be damnum et injuria.[13] If, as
may happen in many cases, a person sustains actual damage, that is, harm or loss to
his person or property, without sustaining any legal injury, that is, an act or omission
which the law does not deem an injury, the damage is regarded as damnum absque
injuria.[14]
In the case at bar, although there was damage, there was no legal injury. Contrary
to the claim of private respondents, petitioners could not be said to have violated the
principle of abuse of right. In order that the principle of abuse of right provided in Article
21 of the Civil Code can be applied, it is essential that the following requisites concur:
(1) The defendant should have acted in a manner that is contrary to morals, good
customs or public policy; (2) The acts should be willful; and (3) There was damage or
injury to the plaintiff.[15]
The act of petitioners in constructing a fence within their lot is a valid exercise of
their right as owners, hence not contrary to morals, good customs or public policy. The
law recognizes in the owner the right to enjoy and dispose of a thing, without other
limitations than those established by law. [16] It is within the right of petitioners, as owners,
to enclose and fence their property. Article 430 of the Civil Code provides that (e)very
owner may enclose or fence his land or tenements by means of walls, ditches, live or
dead hedges, or by any other means without detriment to servitudes constituted
thereon.
At the time of the construction of the fence, the lot was not subject to any
servitudes. There was no easement of way existing in favor of private respondents,
either by law or by contract. The fact that private respondents had no existing right over
the said passageway is confirmed by the very decision of the trial court granting a
compulsory right of way in their favor after payment of just compensation. It was only
that decision which gave private respondents the right to use the said passageway after
payment of the compensation and imposed a corresponding duty on petitioners not to
interfere in the exercise of said right.
Hence, prior to said decision, petitioners had an absolute right over their property
and their act of fencing and enclosing the same was an act which they may lawfully
perform in the employment and exercise of said right. To repeat, whatever injury or
damage may have been sustained by private respondents by reason of the rightful use
of the said land by petitioners is damnum absque injuria.[17]
A person has a right to the natural use and enjoyment of his own property,
according to his pleasure, for all the purposes to which such property is usually
applied. As a general rule, therefore, there is no cause of action for acts done by one
person upon his own property in a lawful and proper manner, although such acts
incidentally cause damage or an unavoidable loss to another, as such damage or loss
is damnum absque injuria.[18] When the owner of property makes use thereof in the
general and ordinary manner in which the property is used, such as fencing or enclosing
the same as in this case, nobody can complain of having been injured, because the
inconvenience arising from said use can be considered as a mere consequence of
community life.[19]
The proper exercise of a lawful right cannot constitute a legal wrong for which an
action will lie,[20] although the act may result in damage to another, for no legal right has
been invaded[21] One may use any lawful means to accomplish a lawful purpose and
though the means adopted may cause damage to another, no cause of action arises in
the latters favor. Any injury or damage occasioned thereby is damnum absque
injuria. The courts can give no redress for hardship to an individual resulting from action
reasonably calculated to achieve a lawful end by lawful means. [22]
WHEREFORE, under the compulsion of the foregoing premises, the appealed
decision of respondent Court of Appeals is hereby REVERSED and SET ASIDE and the
judgment of the trial court is correspondingly REINSTATED.
SO ORDERED.
Romero and Puno, JJ., concur.
Mendoza, J., took no part.
[1]
Penned by Justice Lourdes K. Tayao-Jaguros, with Justices Vicente V. Mendoza and Jesus M.
Elbinias, concurring.
[2]
Original Record, 1.
[3]
Rollo, 28-29.
[4]
Ibid., 38.
[5]
Ibid., 31.
[6]
Ibid., 34.
See Lumibao vs. Intermediate Appellate Court, et al., G.R. No. 64677, September 13, 1990, 189 SCRA
[7]
469; SMI Fish Industries, Inc., et al. vs. National Labor Relations Commission, et al., G.R. Nos. 96952-
56, September 2, 1992, 213 SCRA 444; Heirs of Juan Oclarit, et al. vs. Court of Appeals, et al., G.R. No.
96644, June 17, 1994,233 SCRA 239.
[8]
22 Am Jur 2d, Damages, Sec. 4,35-36.
[9]
Ibid., 113
1 Am Jur 2d, Actions, Sec. 65, 595; see The Board of Liquidators vs. Kalaw, et al., L-18805, August
[10]
14, 1967,20 SCRA 987.

[11]
Plummer vs. Abbott Laboratories (DC RI), 568, F Supp. 920, CCH Prod Liab Rep 9878.
[12]
Ibid., 598.
[13]
Comstock vs. Wilson, 257 NY 231 177 NE 421, 76 ALR 676; Haldeman vs. Bruckhart, 45, 45 Pa 514.
[14]
U.S. - Premier Malt Roducts Co. vs. Kasser, 23 F. (2d)98.
[15]
Jurado, D.P., Personal and Family Law, 1984 ed., 41.
[16]
Jovellanos, et al. vs. Court of Appeals, et al., G.R. No. 100728, June 1992,210 SCRA 126.
See Escano, et al. vs. Court of Appeals, et al., L-47207, September 25 1980, 100 SCRA 197; Ilocos
[17]
Norte Electric Co. vs. Court of Appeals, et al., G.R. No. 53401, November 6, 1989, 179 SCRA 5;
Albenson Enterprises Corporation, et al. vs. Court of Appeals, et al., G.R No. 88694, January 11, 1993,
217 SCRA 16.
[18]
1 C.J.S., Actions, Sec. 15, 1007-1008.
Tolentino, A.M., Commentaries and juris-prudence on the Civil Code of the Philippines, Vol.
[19]
11(1987), 59, citing 8 Salvat 614.

[20]
Coyne vs. Mississippi & R.R. Boom Co., 72 533, 75 NW 748.
[21]
White vs. Kincaid, 149 NC 415, 63 SE 109; Fahn vs. Reichart, 8 Wis 255.
[22]
OKeefee vs. Local 463, United Asso. P. & G. 277 NY 300, 14 NE 2d 77, 117 ALR 817.

FIRST DIVISION

SPOUSES MANUEL MEJORADA AND G.R. No. 151797

ROSALINDA P. MEJORADA,

Petitioners,
Present:

- versus -
SANDOVAL-GUTIERREZ,

CORONA,

AZCUNA, and
GLORIFICACION VERTUDAZO, SOL
GARCIA, JJ.
VERTUDAZO, SPS. JIMMY GALVIZO and
GLOSITA T. GALVIZO, SPS. FERMIN
CABRERA and ELLEN CABRERA, SPS.
FELIXTO ARIATE and RENA ARIATE, and
SPS. RAUL ARLALEJO and ARCILA Promulgated:
ARLALEJO,

Respondents.

October 11, 2007

x-----------------------------------------------------------------------------------------x

DECISION

Before us is a Petition for Review on Certiorari[1] assailing the

Decision[2] dated December 4, 2001 of the Court of Appeals in CA-G.R. CV No.
62900, entitled Glorificacion Vertudazo et al. v. Spouses Manuel and Rosalinda
Mejorada.
The undisputed facts are:
Sometime in 1981, Glorificacion and Sol Vertudazo and their co-

respondents established their permanent residence on a 300-square meter lot
located at Telaje, Tandag, Surigao del Sur. Their property is landlocked being
bordered on all sides by different lots. As an access route going to Quiones
Street and the public highway, they utilized a proposed
undeveloped barangay road on the south side of their property owned by Rosario
Quiones.
In 1988, spouses Manuel and Rosalinda Mejorada, petitioners,

bought Rosarios 646-square meter lot adjacent to respondents property. Included
therein is an area measuring 55.5 square meters which serves as an adequate
outlet to Quiones Street, now the subject of the present controversy. For several
years, respondents and the general public have been using that area as a
passageway to and from Quiones Street.
On July 2, 1997, petitioners closed the passageway by building a new

garage for their service jeep. Hence, respondents brought the matter to
the barangay concerned but no settlement was reached by the
parties. Respondents then filed a complaint[3] with the Regional Trial Court,
Branch 27, Tandag, Surigao del Sur praying for a grant of easement of right of way
over petitioners property with an application for writ of preliminary mandatory
injunction.
In their answer, petitioners claimed that there is an alternate route which

respondents have been using although it was long, circuitous and muddy; that the
isolation of respondents property was due to their construction of a fence
fronting the house of the petitioners; that this made it difficult for petitioners to
maneuver their service jeep, hence, they were constrained to construct a new
garage; that respondents never offered to pay compensation for the right of way;
and that they failed to show that the easement is at the point least prejudicial to
the servient estate.
During the hearing, the trial court ordered that the passageway be opened
during the day and closed in the evening during the pendency of the
case. Petitioners agreed to open it everyday from five oclock in the morning
until nine oclock in the evening and even volunteered their service jeep to be
used in case of any emergency during the rest of the night. Respondents
application for injunction was then declared moot and the case was archived to
allow the parties to settle the matter amicably.

Nevertheless, petitioners did not abide with their commitment. Thus,
on March 5, 1998, respondents filed with the trial court joint motions to cite
petitioners in contempt of court and to revive their application for preliminary
mandatory injunction. On June 8, 1998, the trial court denied the motion for
contempt but granted an injunctive relief, ordering petitioners to keep open at all
times of the day and night for respondents to pass through in going to Quiones
Street and in returning to their respective houses, unhampered and unvexed,
during the pendency and until the resolution of the case. Respondents were
ordered to post a bond of P5,000.00. On June 16, 1998, the trial court issued a
writ of preliminary mandatory injunction.
After the trial on the merits, or on December 7, 1998, the trial court
rendered a Decision in favor of respondents, the dispositive portion of which
reads:

WHEREFORE, judgment is hereby rendered:
1. Decreeing the establishment of a compulsory easement of right of way in favor of the

plaintiffs over the passageway in question, namely, the 55.5 square meter lot
located at Telaje, Tandag, Surigao del Sur, covered by Tax Declaration No. 02030 in
the name of defendant Rosalinda P. Mejorada, and ordering the defendants to open
and make available the passageway to the plaintiffs and the general public as access
road to Quiones Street;
2. Ordering the plaintiffs, jointly and severally, to pay the defendants the value of the
55.5 square meter passageway, the exact amount to be determined by a committee
of three assessors, with the Acting Clerk of Court, this Court, or his duly authorized
deputy sheriff as Chairman, and with one member to be proposed by the plaintiffs,
and the other member, by the defendants, the committee to finish the assessment
and submit to this Court its report within fifteen (15) days from their assumption to
duty as such assessors; and
3. Declaring the preliminary mandatory injunction heretofore issued permanent.

No pronouncement as to cost.
IT IS SO ORDERED.
On appeal, the Court of Appeals affirmed the Decision of the trial court.

Hence, the present recourse.

The issue for our resolution is whether respondents are entitled to the
easement of right of way on the property owned by petitioners.

We find for respondents.

Easement has been defined as an encumbrance imposed upon an immovable
for the benefit of another immovable belonging to a different owner. The
immovable in favor of which the easement is established is called the dominant
estate; that which is subject thereto, the servient estate.[4] In this case, the dominant
estate is respondents property, while the servient estate belongs to petitioners.

Articles 649 and 650 of the Civil Code provide:

Art. 649. The owner, or any person who by virtue of a real right may cultivate or
use any immovable, which is surrounded by other immovables pertaining to other
persons and without adequate outlet to a public highway, is entitled to demand a
right of way through the neighboring estates, after payment of the proper
indemnity. xxx

Art. 650. The easement of right of way shall be established at the point least
prejudicial to the servient estate, and, insofar as consistent with this rule, where
the distance from the dominant estate to a public highway may be the shortest.

A legal or compulsory easement is that which is constituted by law for

public use or for private interest. Pursuant to the above provisions, the owner of an
estate may claim a legal or compulsory right of way only after he has established
the existence of these four (4) requisites: (a) the estate is surrounded by other
immovables and is without adequate outlet to a public highway; (b) after payment
of the proper indemnity; (c) the isolation was not due to the proprietors own acts;
and (d) the right of way claimed is at a point least prejudicial to the servient estate.
[5]
Here, these four requisites have been satisfied.

First, as found by the Court of Appeals, there is no other road which
respondents could use leading to Quiones Street except the passageway on
petitioners property.

Second, respondents have offered to pay petitioners proper indemnity for
the easement of way.
Third, the Court of Appeals likewise found that the isolation of respondents
property was not due to their acts.
Fourth, the easement is at the point least prejudicial to petitioners

property. In fact, the area of the easement which is 55.5 square meters is
located at the corner of petitioners landholding, hence, does not cause them
inconvenience in anyway.

Verily, we see no reason to reverse the Decision of the Court of Appeals
affirming that of the trial court.

WHEREFORE, we DENY the petition. The assailed Decision of the Court
of Appeals in CA-G.R. CV No. 62900 is AFFIRMED. Costs against petitioners.

SO ORDERED.

Associate Justice
WE CONCUR:
REYNATO S. PUNO
Chief Justice
Chairperson

CANCIO C. GARCIA
Associate Justice

CERTIFICATION


certified that the conclusions in the above Decision were reached in
Courts Division.

REYNATO S. PUNO
Chief Justice

[1]
Under Rule 45 of the 1997 Revised Rules of Civil Procedure, as amended.
[2]
Penned by Associate Justice Eugenio S. Labitoria (retired) and concurred in by Associate Justice Teodoro P.
Regino (retired) and Associate Justice Rebecca De Guia-Salvador.
[3]
Docketed as Civil Case No. 1173, for Right of Way.
[4]
Article 613, New Civil Code, as amended.

[5]
Sta. Maria v. Court of Appeals, G.R. No. 127549, January 28, 1998, 285 SCRA 351; La Vista Association, Inc. v.
Court of Appeals, et al., G.R. No. 95252, September 5, 1997, 278 SCRA 498, citing Vda. de Baltazar v. Court
of Appeals, 245 SCRA 333 (1995), Locsin v. Climaco, 26 SCRA 816 (1969) and Angela Estate v. CFI
of Negros Occidental, 24 SCRA 500 (1968).

Supreme Court
Manila

SECOND DIVISION

SPOUSES DEMOCRITO AND A.M. No. RTJ-10-2255
OLIVIA LAGO, (Formerly OCA IPI No. 10-3335-RTJ)
Complainants,
Present:

CARPIO, J.,
- versus - Chairperson,
NACHURA,
PERALTA,
ABAD, and
MENDOZA, JJ.
JUDGE GODOFREDO B. ABUL, JR.,
REGIONAL TRIAL COURT, Promulgated:
BRANCH 43, GINGOOG CITY,
Respondent. January 17, 2011
x------------------------------------------------------------------------------------x

DECISION

NACHURA, J.:

The case arose from an amended complaint[1] dated December 29, 2009, filed by
Spouses Democrito C. Lago and Olivia R. Lago (complainants), charging Judge
Godofredo B. Abul, Jr. (respondent judge) of the Regional Trial Court (RTC),
Branch 43, Gingoog City, with acts and omissions violative of the Standards of
Conduct Prescribed for Judges by Law, the Rules of Court, and the Code of
Judicial Conduct.

Complainants were the defendants in a civil action for Preliminary Injunction,
Easement of Road Right of Way, and Attorneys Fees, with prayer for a Temporary
Restraining Order (TRO), filed on July 2, 2009 by Christina M. Obico (Obico)
before the RTC, Gingoog City, Misamis Oriental, and docketed as Civil Case No.
2009-905. The action was spawned by the alleged threats of complainants to close
the access road leading to Obicos property, where the latters milkfish (bangus)
farm is located. Obico claimed that, if the access road leading to her property was
closed, she would be prevented from harvesting her milkfish, causing massive fish
kills, and leading to heavy financial losses on her part.

Complainants assert that the civil complaint was never raffled, and that no notice
of raffle was ever served upon them, yet the case went directly to Branch 43, where
respondent judge is the acting presiding judge. He is also the acting executive
judge of RTC, Gingoog City. Complainants claim that this is violative of Section
4(c), Rule 58 of the Rules of Court.

On July 7, 2009, respondent judge issued an Order[2] directing the issuance of a
TRO effective seventy two (72) hours from date of issue, without requiring Obico
to put up a bond. Complainants allege that at that time, they were not yet in receipt
of the summons and copy of the complaint, as well as Obicos affidavit and
bond. Complainants claim that this is violative of Section 4(c) and (d) of Rule 58
of the Rules of Court.

On July 14, 2009, respondent judge issued an Order[3] extending the 72-hour TRO,
which had already expired, for another period provided that the total period should
not exceed twenty days. Again, respondent judge failed to require Obico to put up
a bond even as complainants assert that it is already of judicial notice that a TRO
under the amended new rules has been elevated to the level of an injunction.

In his Resolution[4] dated August 11, 2009, respondent judge ordered, among
others, the issuance of the writ of preliminary injunction conditioned upon the
application of a bond by Obico in the amount of P100,000.00. Complainants argue,
however, that said directive was violative of Section 5, Rule 58 of the Rules of
Court since they were not required to show cause, at a specific time and place, why
the injunction should not be granted.

Due to these acts of respondent judge, complainants filed a motion for
inhibition[5] from further hearing the case, since they perceive that respondent
judge was bereft of the cold neutrality of an impartial judge. The motion was
denied by respondent judge in his Resolution[6] dated October 28,
2009. Complainants thus consider respondent judges non-inhibition as violative of
the Code of Judicial Conduct, as it denied them due process and equal protection of
the law.

On November 11, 2009, respondent judge issued an Order[7] upon Obicos motion,
directing the reduction of the bond from P100,000.00 to P50,000.00.

Complainants then filed a Motion to Hold in Abeyance Further Proceedings[8] on
the ground of the pendency of their appeal before the Supreme Court of the Order
denying the motion for inhibition. However, at the December 15, 2009 setting for
pre-trial of the civil case, respondent judge issued an Order [9] denying the motion to
hold in abeyance further proceedings. Respondent judge also allowed Obico to
present evidence ex parte on January 26, 2010 for failure of complainants to
appear during the pre-trial.[10]

In his Comment[11] dated February 11, 2010, respondent judge clarifies that, as of
the time of the filing of the civil complaint, Branches 27 and 43 of the
RTC, Gingoog City, had no regular presiding judges. Branch 27 was temporarily
presided over by Judge Rustico Paderanga, the regular presiding judge of
RTC, Camiguin Province, while Branch 43 was presided over by respondent judge,
who is the regular judge of RTC, Branch 4, Butuan City.

Respondent judge claims that he had faithfully observed the provisions of Rule 58
of the Rules of Court, with respect to Civil Case No. 2009-905. He explains that, as
the acting executive judge of RTC, Gingoog City, he took cognizance of the civil
case, convinced that it had to be acted upon immediately. Thus, the issuance of the
72-hour TRO on July 7, 2009 was by virtue of his sound discretion based on the
civil complaint and its annexes.

Respondent judge said that he explained in his July 14, 2009 Order that he
extended the 72-hour TRO to 20 days in this wise

Considering that the TRO previously granted was only for seventy-two hours, the
same can be extended for another period provided that the total period should not
exceed twenty days. In order to prevent plaintiff from incurring serious damage
and heavy financial losses on her part, this court is inclined to grant the extension
of the Temporary Restraining Order for another period not exceeding twenty (20)
days inclusive of the seventy two (72) hour period already granted previously by
this court.[12]

With respect to the July 14, 2009 hearing for the TRO, respondent judge claims
that it was justified since he, as a mere acting presiding (and executive) judge of
RTC, Gingoog City, conducts hearings in that sala only on Tuesdays and
Wednesdays because he has to travel about 144 kilometers from Butuan City,
where he is actually stationed. In the same July 14, 2009 Order, respondent judge
asserts that the conduct of the summary hearings on days other than Tuesdays and
Wednesdays would cause undue prejudice to the other cases already scheduled
way ahead of the subject civil action, thus, the sheer improbability of being
accommodated.

Respondent judge asseverates that the writ of injunction was issued only after a
serious consideration of all the factual and legal circumstances of the case. On the
other hand, he insists that the denial of the motion for inhibition was due to its lack
of factual and legal basis.

After due investigation of this administrative case, the Office of the Court
Administrator (OCA) issued its Report dated September 13, 2010, recommending
that this case be re-docketed as a regular administrative matter, and, based on its
finding that respondent judge was grossly ignorant of the law and rules of
procedure, recommended that he be meted a fine in the amount of P25,000.00, with
a stern warning that a repetition of the same or any similar infraction shall be dealt
with more severely.

The OCA found respondent judge to have been grossly and deliberately ignorant of
the law and procedure for violation of Rule 58 of the Rules of Court, specifically
by means of the following acts: (1) when the civil complaint with prayer for the
issuance of a TRO was filed on July 2, 2009, respondent judge assumed
jurisdiction thereon and, without the mandated raffle and notification and service
of summons to the adverse party, issued a 72-hour TRO on July 7, 2009; (2) when
respondent judge set the case for summary hearing on July 14, 2009, purportedly to
determine whether the TRO could be extended for another period, when the
hearing should be set within 72 hours from the issuance of the TRO; (3) when he
eventually granted an extension of an already expired TRO to a full 20-day period;
and (4) when he issued a writ of preliminary injunction in favor of Obico without
prior notice to herein complainants and without the required hearing.

We find the recommendations of the OCA to be well-taken.

Sections 4 and 5 of Rule 58 of the Rules of Court on preliminary injunction,
pertinent to this case, provide

SEC. 4. Verified application and bond for preliminary injunction or
temporary restraining order.A preliminary injunction or temporary restraining
order may be granted only when:

(a) The application in the action or proceeding is verified, and shows facts
entitling the applicant to the relief demanded; and
(b) Unless exempted by the court, the applicant files with the court where the
action or proceeding is pending, a bond executed to the party or person
enjoined, in an amount to be fixed by the court, to the effect that the applicant
will pay such party or person all damages which he may sustain by reason of
the injunction or temporary restraining order if the court should finally decide
that the applicant was not entitled thereto. Upon approval of the requisite
bond, a writ of preliminary injunction shall be issued.

(c) When an application for a writ of preliminary injunction or a temporary
restraining order is included in a complaint or any initiatory pleading, the
case, if filed in a multiple-sala court, shall be raffled only after notice to and
in the presence of the adverse party or the person to be enjoined. In any event,
such notice shall be preceded, or contemporaneously accompanied by service
of summons, together with a copy of the complaint or initiatory pleading and
the applicants affidavit and bond, upon the adverse party in the Philippines.

However, where the summons could not be served personally or by
substituted service despite diligent efforts, or the adverse party is a resident of
the Philippines temporarily absent therefrom or is a nonresident thereof, the
requirement of prior or contemporaneous service of summons shall not apply.

(d) The application for a temporary restraining order shall thereafter be acted
upon only after all parties are heard in a summary hearing which shall be
conducted within twenty-four (24) hours after the sheriffs return of service
and/or the records are received by the branch selected by raffle and to which
the records shall be transmitted immediately.

SEC. 5. Preliminary injunction not granted without notice; exception.No
preliminary injunction shall be granted without hearing and prior notice to the
party or person sought to be enjoined. If it shall appear from facts shown by
affidavits or by the verified application that great or irreparable injury would
result to the applicant before the matter can be heard on notice, the court to which
the application for preliminary injunction was made, may issue ex parte a
temporary restraining order to be effective only for a period of twenty (20) days
from service on the party or person sought to be enjoined, except as herein
provided. Within the twenty-day period, the court must order said party or person
to show cause, at a specified time and place, why the injunction should not be
granted. The court shall also determine, within the same period, whether or not
the preliminary injunction shall be granted, and accordingly issue the
corresponding order.

However, subject to the provisions of the preceding sections, if the matter is
of extreme urgency and the applicant will suffer grave injustice and irreparable
injury, the executive judge of a multiple-sala court or the presiding judge of a
single-sala court may issue ex parte a temporary restraining order effective for
only seventy-two (72) hours from issuance, but shall immediately comply with
the provisions of the next preceding section as to the service of summons and the
documents to be served therewith. Thereafter, within the aforesaid seventy-two
(72) hours, the judge before whom the case is pending shall conduct a summary
hearing to determine whether the temporary restraining order shall be extended
until the application for preliminary injunction can be heard. In no case shall the
total period of effectivity of the temporary restraining order exceed twenty (20)
days, including the original seventy-two hours provided herein.

In the event that the application for preliminary injunction is denied or not
resolved within the said period, the temporary restraining order is deemed
automatically vacated. The effectivity of a temporary restraining order is not
extendible without need of any judicial declaration to that effect, and no court
shall have authority to extend or renew the same on the same ground for which it
was issued.

However, if issued by the Court of Appeals or a member thereof, the
temporary restraining order shall be effective for sixty (60) days from service on
the party or person sought to be enjoined. A restraining order issued by the
Supreme Court or a member thereof shall be effective until further orders.

The trial court, the Court of Appeals, the Sandiganbayan or the Court of Tax
Appeals that issued a writ of preliminary injunction against a lower court, board,
officer, or quasi-judicial agency shall decide the main case or petition within six
(6) months from the issuance of the writ.[13]

Culled from the foregoing provisions, particularly with respect to the second
paragraph of Section 5, Rule 58 of the Rules of Court, as amended, it is clear that,
on the matter of the issuance of an ex parte 72-hour TRO, an executive judge of a
multiple-sala court (applicable to respondent judge), or the presiding judge of a
single-sala court, is empowered to issue the same in matters of extreme emergency,
in order to prevent grave injustice and irreparable injury to the applicant. However,
it is also an unequivocal provision that, after the issuance of the 72-hour TRO, the
executive judge of a multiple-sala court is bound to comply with Section 4(c) of
the same rule with respect to the service of summons and the documents to be
served therewith.

The records of this case clearly show that respondent judge failed to cause the
raffle of Civil Case No. 2009-905, since RTC, Gingoog City, is a multiple-sala
court, or to cause the notification and service of summons to complainants after he
issued the 72-hour TRO. Respondent judges July 7, 2009 Order was explicit when
the civil case was set for summary hearing on July 14, 2009, purportedly to
determine whether or not the TRO issued could be extended for another
period. Thus, it is manifest that respondent judge had directly assumed jurisdiction
over the civil action and all together disregarded the mandatory requirements of
Section 4(c), Rule 58, relative to the raffle in the presence of the parties, and
service of summons. This is gross error.

Even assuming that there was a valid raffle to RTC, Branch 43, Gingoog City,
where respondent judge acts as the presiding magistrate, the supposed extreme
urgency of the issuance of the 72-hour TRO was belied by his setting of the
required summary hearing for the determination of the necessity of extending the
72-hour TRO to 20 days, one week after the issuance thereof. Indeed, Section 5,
Rule 58 is explicit that such summary hearing must be conducted within the said
72-hour period. Notwithstanding the explanation of respondent judge that he could
not set the required summary hearing except on Tuesdays and Wednesdays, it
should be noted that July 7, 2009, the date of the issuance of the 72-hour TRO, was
a Tuesday, yet respondent judge could have set the summary hearing on July 8,
2009, a Wednesday. He failed to do so on the mistaken notion that, aside from his
alleged hectic schedule, he could, at any time, extend the 72-hour TRO for another
period as long as the total period did not exceed 20 days.

What is more appalling is that respondent judge extended the 72-hour TRO, which
had already and obviously expired, into a full 20-day TRO. An already expired
TRO can no longer be extended. Respondent judge should have known that the
TRO he issued in his capacity as an acting executive judge was valid for only 72
hours. Beyond such time, the TRO automatically expires, unless, before the
expiration of the said period, he, supposedly in his capacity as presiding judge to
whom the case was raffled, conducted the required summary hearing in order to
extend the TROs lifetime. Indubitably, a 72-hour TRO, issued by an executive
judge, is a separate and distinct TRO which can stand on its own, regardless of
whether it is eventually extended or not. It is not, as respondent judge attempts to
impress upon us, a mere part of the 20-day TRO issued by a presiding judge to
whom the case is raffled.

Moreover, respondent judge committed another blunder when he ordered the
issuance of a writ of preliminary injunction without the required hearing and
without prior notice to the defendants, herein complainants. The records plainly
disclose that the only hearing conducted prior to the August 11, 2009 Resolution
granting the preliminary injunction was the July 14, 2009 summary hearing for the
extension of the 72-hour TRO. This could be gathered from the August 11, 2009
Resolution, wherein respondent judge declared

During the hearing for the determination of the propriety (sic) the
Temporary Restraining Order should be extended or whether the Writ of
Injunction be granted, the plaintiff presented Christina M. Obico, who in essence
testified that she operated fish cages at Gingoog Bay. x x x.[14]

Again, Rule 58, as amended, mandates a full and comprehensive hearing for the
determination of the propriety of the issuance of a writ of preliminary injunction,
separate from the summary hearing for the extension of the 72-hour TRO. The
preliminary injunction prayed for by the applicant can only be heard after the trial
court has ordered the issuance of the usual 20-day TRO. Within that period of 20
days, the court shall order the party sought to be enjoined to show cause at a
specified time and place why the injunction should not be granted. During that
same period, the court shall also determine the propriety of granting the
preliminary injunction and then issue the corresponding order to that effect. In the
case of respondent judge, he gravely failed to comply with what the rule
requires, i.e., to give complainants the opportunity to comment or object, through a
full-blown hearing, to the writ of injunction prayed for. Instead, respondent judge
railroaded the entire process by treating the summary hearing for the extension of
the TRO as the very same hearing required for the issuance of the writ of
preliminary injunction.

Verily, the absence of the hearing required by the Rules of Court is downright
reprehensible and, thus, should not be countenanced. The requirement of a hearing
is so fundamental that failure to comply with it not only amounts to gross
ignorance of rules and procedure, but also to an outright denial of due process to
the party denied such a hearing. Undoubtedly, the acts and omissions of respondent
judge warrant sanction from this Court.

Though not every judicial error bespeaks ignorance of the law or of the rules, and
that, when committed in good faith, does not warrant administrative sanction, the
rule applies only in cases within the parameters of tolerable misjudgment. When
the law or the rule is so elementary, not to be aware of it or to act as if one does not
know it constitutes gross ignorance of the law. One who accepts the exalted
position of a judge owes the public and the court proficiency in the law, and the
duty to maintain professional competence at all times. When a judge displays an
utter lack of familiarity with the rules, he erodes the confidence of the public in the
courts. A judge is expected to keep abreast of the developments and amendments
thereto, as well as of prevailing jurisprudence. Ignorance of the law by a judge can
easily be the mainspring of injustice.[15]

In the absence of fraud, dishonesty, or corruption, the acts of a judge in his judicial
capacity are not subject to disciplinary action. However, the assailed judicial acts
must not be in gross violation of clearly established law or procedure, which every
judge must be familiar with. Every magistrate presiding over a court of law must
have the basic rules at the palm of his hands and maintain professional competence
at all times.[16]

Section 8, Rule 140 of the Rules of Court classifies gross ignorance of the law or
procedure as a serious offense for which the imposable sanction ranges from
dismissal from the service to suspension from office, and a fine of more
than P20,000.00 but not exceeding P40,000.00. Under the premises, this Court
finds it appropriate to impose on respondent judge the penalty of a fine in the
amount of P25,000.00.

WHEREFORE, Judge Godofredo B. Abul, Jr., of the Regional Trial Court,
Branch 43, Gingoog City, is found liable for Gross Ignorance of the Law and
Procedure, and is hereby meted a fine of P25,000.00, with a stern warning that a
repetition of the same, or any similar infraction in the future, shall be dealt with
more severely.
SO ORDERED.

Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson


JOSE CATRAL MENDOZA
Associate Justice

[1]
Rollo, pp. 1-3.
[2]
Id. at 7.
[3]
Id. at 8-9.
[4]
Id. at 10-15.
[5]
Id. at 17-20.
[6]
Id. at 24-26.
[7]
Id. at 16.
[8]
Id. at 27-28.
[9]
Id. at 29.
[10]
Per Order of the same date; id. at 47-50.
[11]
Id. at 32-36.
[12]
Id. at 8.
[13]
As amended by A.M. No. 07-7-12-SC, December 27, 2007.
[14]
Rollo, p. 13.
[15]
Amante-Descallar v. Ramas, A.M. No. RTJ-08-2142, March 20, 2009, 582 SCRA 22, 39.
[16]
Fortune Life Insurance Company, Inc. v. Luczon, Jr., A.M. No. RTJ-05-1901, November 30, 2006, 509 SCRA
65, 73-74.
THIRD DIVISION
[G.R. No. 136438. November 11, 2004]
TEOFILO C. VILLARICO, petitioner, vs. VIVENCIO SARMIENTO,

SPOUSES BESSIE SARMIENTO-DEL MUNDO & BETH DEL
MUNDO, ANDOKS LITSON CORPORATION and MARITES
CARINDERIA, respondents.
DECISION
Before us is a petition for review on certiorari of the Decision[1] of the Court of

Appeals dated December 7, 1998 in CA-G.R. CV No. 54883, affirming in toto the
Decision[2] of the Regional Trial Court (RTC) of Paraaque City, Branch 259, dated
November 14, 1996, in Civil Case No. 95-044.
The facts of this case, as gleaned from the findings of the Court of Appeals, are:
Teofilo C. Villarico, petitioner, is the owner of a lot in La Huerta, Paraaque City,
Metro Manila with an area of sixty-six (66) square meters and covered by Transfer
Certificate of Title (T.C.T.) No. 95453 issued by the Registry of Deeds, same city.
Petitioners lot is separated from the Ninoy Aquino Avenue (highway) by a strip of
land belonging to the government. As this highway was elevated by four (4) meters and
therefore higher than the adjoining areas, the Department of Public Works and
Highways (DPWH) constructed stairways at several portions of this strip of public land
to enable the people to have access to the highway.
Sometime in 1991, Vivencio Sarmiento, his daughter Bessie Sarmiento and her
husband Beth Del Mundo, respondents herein, had a building constructed on a portion
of said government land. In November that same year, a part thereof was occupied by
Andoks Litson Corporation and Marites Carinderia, also impleaded as respondents.
In 1993, by means of a Deed of Exchange of Real Property, petitioner acquired a
74.30 square meter portion of the same area owned by the government. The property
was registered in his name as T.C.T. No. 74430 in the Registry of Deeds of Paraaque
City.
In 1995, petitioner filed with the RTC, Branch 259, Paraaque City, a complaint
for accion publiciana against respondents, docketed as Civil Case No. 95-044. He
alleged inter alia that respondents structures on the government land closed his right of
way to the Ninoy Aquino Avenue; and encroached on a portion of his lot covered by
T.C.T. No. 74430.
Respondents, in their answer, specifically denied petitioners allegations, claiming
that they have been issued licenses and permits by Paraaque City to construct their
buildings on the area; and that petitioner has no right over the subject property as it
belongs to the government.
After trial, the RTC rendered its Decision, the dispositive portion of which reads:
WHEREFORE, premises considered, judgment is hereby rendered:
1. Declaring the defendants to have a better right of possession over the subject
land except the portion thereof covered by Transfer Certificate of Title No.
74430 of the Register of Deeds of Paraaque;
2. Ordering the defendants to vacate the portion of the subject premises
described in Transfer Certificate of Title No. 74430 and gives its possession to
plaintiff; and
3. Dismissing the claim for damages of the plaintiff against the defendants, and
likewise dismissing the claim for attorneys fees of the latter against the former.
Without pronouncement as to costs.
SO ORDERED.[3]
The trial court found that petitioner has never been in possession of any portion of
the public land in question. On the contrary, the defendants are the ones who have
been in actual possession of the area. According to the trial court, petitioner was not
deprived of his right of way as he could use the Kapitan Tinoy Street as passageway to
the highway.
On appeal by petitioner, the Court of Appeals issued its Decision affirming the trial
courts Decision in toto, thus:
WHEREFORE, the judgment hereby appealed from is hereby AFFIRMED in toto,

with costs against the plaintiff-appellant.
SO ORDERED.[4]
In this petition, petitioner ascribes to the Court of Appeals the following assignments
of error:
I
THE FINDINGS OF FACT OF THE HON. COURT OF APPEALS CONTAINED A
CONCLUSION WITHOUT CITATION OF SPECIFIC EVIDENCE ON WHICH
THE SAME WAS BASED.

II
THE HON. COURT OF APPEALS ERRED IN CONSIDERING THAT THE ONLY

ISSUE IN THIS CASE IS WHETHER OR NOT THE PLAINTIFF-APPELLANT
HAS ACQUIRED A RIGHT OF WAY OVER THE LAND OF THE
GOVERNMENT WHICH IS BETWEEN HIS PROPERTY AND THE NINOY
AQUINO AVENUE.

III
THE HON. COURT OF APPEALS ERRED IN CONCLUDING THAT ACCION

PUBLICIANA IS NOT THE PROPER REMEDY IN THE CASE AT BAR.
IV
THE HON. COURT OF APPEALS ERRED IN CONCLUDING THAT THE

EXISTENCE OF THE PLAINTIFF-APPELLANTS RIGHT OF WAY DOES NOT
CARRY POSSESSION OVER THE SAME.
THE HON. COURT OF APPEALS ERRED IN NOT RESOLVING THE ISSUE OF

WHO HAS THE BETTER RIGHT OF POSSESSION OVER THE SUBJECT LAND
BETWEEN THE PLAINTIFF-APPELLANT AND THE DEFENDANT-
APPELLEES.[5]
In their comment, respondents maintain that the Court of Appeals did not err in
ruling that petitioners action for accion publiciana is not the proper remedy in asserting
his right of way on a lot owned by the government.
Here, petitioner claims that respondents, by constructing their buildings on the lot in
question, have deprived him of his right of way and his right of possession over a
considerable portion of the same lot, which portion is covered by his T.C.T. No. 74430
he acquired by means of exchange of real property.
It is not disputed that the lot on which petitioners alleged right of way exists belongs
to the state or property of public dominion. Property of public dominion is defined by
Article 420 of the Civil Code as follows:
ART. 420. The following things are property of public dominion:

(1) Those intended for public use such as roads, canals, rivers, torrents, ports and
bridges constructed by the State, banks, shores, roadsteads, and other of similar
character.
(2) Those which belong to the State, without being for public use, and are intended for
some public service or for the development of the national wealth.
Public use is use that is not confined to privileged individuals, but is open to the
indefinite public.[6] Records show that the lot on which the stairways were built is for the
use of the people as passageway to the highway. Consequently, it is a property of
public dominion.
Property of public dominion is outside the commerce of man and hence it: (1)
cannot be alienated or leased or otherwise be the subject matter of contracts; (2) cannot
be acquired by prescription against the State; (3) is not subject to attachment and
execution; and (4) cannot be burdened by any voluntary easement.[7]
Considering that the lot on which the stairways were constructed is a property of
public dominion, it can not be burdened by a voluntary easement of right of way in favor
of herein petitioner. In fact, its use by the public is by mere tolerance of the government
through the DPWH. Petitioner cannot appropriate it for himself. Verily, he can not claim
any right of possession over it. This is clear from Article 530 of the Civil Code which
provides:

ART. 530. Only things and rights which are susceptible of being appropriated may be
the object of possession.

Accordingly, both the trial court and the Court of Appeals erred in ruling that
respondents have better right of possession over the subject lot.
However, the trial court and the Court of Appeals found that defendants buildings
were constructed on the portion of the same lot now covered by T.C.T. No. 74430 in
petitioners name. Being its owner, he is entitled to its possession.
WHEREFORE, the petition is DENIED. The assailed Decision of the Court of
Appeals dated December 7, 1998 in CA-G.R. CV No. 54883 is AFFIRMED with
MODIFICATION in the sense that neither petitioner nor respondents have a right of
possession over the disputed lot where the stairways were built as it is a property of
public dominion. Costs against petitioner.
SO ORDERED.
Panganiban, (Chairman), Carpio Morales and Garcia, JJ., concur.
Corona, J., on leave.
[1]
CA Rollo, pp. 81-85. Penned by Associate Justice Hector L. Hofilea (ret.) and concurred in by
Associate Justices Jorge B. Imperial (now deceased) and Omar U. Amin (ret.).
[2]
Id. at 45-50.
[3]
Id. at 49-50.
[4]
Id. at 84.
[5]
Rollo at 10.
[6]
US vs. Tan Piaco, 40 Phil. 853, 856 (1920).
[7]
Tolentino II, Civil Code (1992 ed.), 31-32.

FIRST DIVISION

DIDIPIO EARTH-SAVERS MULTI-PURPOSE G.R. No. 157882
ASSOCIATION, INCORPORATED
(DESAMA), MANUEL BUTIC, CESAR
MARIANO, LAURO ABANCE, BEN
TAYABAN, ANTONIO DINGCOG, TEDDY
B. KIMAYONG, ALONZO ANANAYO,
ANTONIO MALAN-UYA, JOSE BAHAG, Present:
ANDRES INLAB, RUFINO LICYAYO,

ALFREDO CULHI, CATALILNA PANGANIBAN, C.J.
INABYUHAN, GUAY DUMMANG, GINA Chairperson,
PULIDO, EDWIN ANSIBEY, CORAZON YNARES-SANTIAGO,
SICUAN, LOPEZ DUMULAG, FREDDIE AUSTRIA-MARTINEZ,
AYDINON, VILMA JOSE, FLORENTINA CALLEJO, SR., and
MADDAWAT, LINDA DINGCOG, ELMER
SICUAN, GARY ANSIBEY, JIMMY CHICO-NAZARIO, JJ.
MADDAWAT, JIMMY GUAY, ALFREDO
CUT-ING, ANGELINA UDAN, OSCAR
INLAB, JUANITA CUT-ING, ALBERT
PINKIHAN, CECILIA TAYABAN, CRISTA
BINWAK, PEDRO DUGAY, SR., EDUARDO
ANANAYO, ROBIN INLAB, JR., LORENZO
PULIDO, TOMAS BINWAG, EVELYN
BUYA, JAIME DINGCOG, DINAOAN CUT-
ING, PEDRO DONATO, MYRNA GUAY,
FLORA ANSIBEY, GRACE DINAMLING,

EDUARDO MENCIAS, ROSENDA JACOB,
SIONITA DINGCOG, GLORIA JACOB,
MAXIMA GUAY, RODRIGO PAGGADUT,
MARINA ANSIBEY, TOLENTINO INLAB,

RUBEN DULNUAN, GERONIMO LICYAYO,
LEONCIO CUMTI, MARY DULNUAN,
FELISA BALANBAN, MYRNA DUYAN,

MARY MALAN-UYA, PRUDENCIO
ANSIBEY, GUILLERMO GUAY,
MARGARITA CULHI, ALADIN ANSIBEY,

PABLO DUYAN, PEDRO PUGUON, JULIAN
INLAB, JOSEPH NACULON, ROGER
BAJITA, DINAON GUAY, JAIME

ANANAYO, MARY ANSIBEY, LINA
ANANAYO, MAURA DUYAPAT,
ARTEMEO ANANAYO, MARY BABLING,

NORA ANSIBEY, DAVID DULNUAN,
AVELINO PUGUON, LUCAS GUMAWI,
LUISA ABBAC, CATHRIN GUWAY,

CLARITA TAYABAN, FLORA JAVERA,
RANDY SICOAN, FELIZA PUTAKI,
CORAZON P. DULNUAN, NENA D.

BULLONG, ERMELYN GUWAY, GILBERT
BUTALE, JOSEPH B. BULLONG,
FRANCISCO PATNAAN, JR., SHERWIN

DUGAY, TIRSO GULLINGAY, BENEDICT T.
NABALLIN, RAMON PUN-ADWAN,
ALFONSO DULNUAN, CARMEN D.
BUTALE, LOLITA ANSIBEY, ABRAHAM
DULNUAN, ARLYNDA BUTALE,
MODESTO A. ANSIBEY, EDUARDO
LUGAY, ANTONIO HUMIWAT, ALFREDO
PUMIHIC, MIKE TINO, TONY
CABARROGUIS, BASILIO TAMLIWOK, JR.,
NESTOR TANGID, ALEJO TUGUINAY,
BENITO LORENZO, RUDY BAHIWAG,
ANALIZA BUTALE, NALLEM LUBYOC,

JOSEPH DUHAYON, RAFAEL CAMPOL,
MANUEL PUMALO, DELFIN AGALOOS,
PABLO CAYANGA, PERFECTO SISON,

ELIAS NATAMA, LITO PUMALO,
SEVERINA DUGAY, GABRIEL PAKAYAO,
JEOFFREY SINDAP, FELIX TICUAN,

MARIANO S. MADDELA, MENZI TICAWA,
DOMINGA DUGAY, JOE BOLINEY, JASON
ASANG, TOMMY ATENYAYO, ALEJO

AGMALIW, DIZON AGMALIW, EDDIE
ATOS, FELIMON BLANCO, DARRIL
DIGOY, LUCAS BUAY, ARTEMIO BRAZIL,

NICANOR MODI, LUIS REDULFIN,
NESTOR JUSTINO, JAIME CUMILA,
BENEDICT GUINID, EDITHA ANIN, INOH-

YABAN BANDAO, LUIS BAYWONG,
FELIPE DUHALNGON, PETER BENNEL,
JOSEPH T. BUNGGALAN, JIMMY B.

KIMAYONG, HENRY PUGUON, PEDRO
BUHONG, BUGAN NADIAHAN, SR.,
MARIA EDEN ORLINO, SPC, PERLA

VISSORO, and BISHOP RAMON VILLENA,

Petitioners,

- versus -

ELISEA GOZUN, in her capacity as
SECRETARY of the DEPARTMENT OF
ENVIRONMENT and NATURAL
RESOURCES (DENR), HORACIO RAMOS,

in his capacity as Director of the Mines
and Geosciences Bureau (MGB-DENR),
ALBERTO ROMULO, in his capacity as the

Executive Secretary of the Office of the
President, RICHARD N. FERRER, in his
capacity as Acting Undersecretary of the

Office of the President, IAN HEATH
SANDERCOCK, in his capacity as
President of CLIMAX-ARIMCO MINING

CORPORATION.

Respondents.

Promulgated:
March 30, 2006
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION

CHICO-NAZARIO, J.:
This petition for prohibition and mandamus under Rule 65 of the Rules of Court

assails the constitutionality of Republic Act No. 7942 otherwise known as the
Philippine Mining Act of 1995, together with the Implementing Rules and
Regulations issued pursuant thereto, Department of Environment and Natural
Resources (DENR) Administrative Order No. 96-40, s. 1996 (DAO 96-40) and of the
Financial and Technical Assistance Agreement (FTAA) entered into on 20 June
1994 by the Republic of the Philippines and ArimcoMining Corporation (AMC), a
corporation established under the laws of Australia and owned by its nationals.
On 25 July 1987, then President Corazon C. Aquino promulgated Executive Order

No. 279 which authorized the DENR Secretary to accept, consider and evaluate
proposals from foreign-owned corporations or foreign investors for contracts of
agreements involving either technical or financial assistance for large-scale
exploration, development, and utilization of minerals, which, upon appropriate
recommendation of the Secretary, the President may execute with the foreign
proponent.
On 3 March 1995, then President Fidel V. Ramos signed into law Rep. Act No.
7942 entitled, An Act Instituting A New System of Mineral Resources Exploration,
Development, Utilization and Conservation, otherwise known as the Philippine
Mining Act of 1995.
On 15 August 1995, then DENR Secretary Victor O. Ramos issued

DENR Administrative Order (DAO) No. 23, Series of 1995, containing the
implementing guidelines of Rep. Act No. 7942. This was soon superseded by DAO
No. 96-40, s. 1996, which took effect on 23 January 1997 after due publication.

Previously, however, or specifically on 20 June 1994, President Ramos executed

an FTAA with AMC over a total land area of 37,000 hectares covering the
provinces of Nueva Vizcaya and Quirino. Included in this area
is Barangay Dipidio, Kasibu, Nueva Vizcaya.
Subsequently, AMC consolidated with Climax Mining Limited to form a single

company that now goes under the new name of Climax-Arimco Mining
Corporation (CAMC), the controlling 99% of stockholders of which are Australian
nationals.
On 7 September 2001, counsels for petitioners filed a demand letter addressed to
then DENR Secretary Heherson Alvarez, for the cancellation of the CAMC FTAA for
the primary reason that Rep. Act No. 7942 and its Implementing Rules and
Regulations DAO 96-40 are unconstitutional. The Office of the Executive Secretary
was also furnished a copy of the said letter. There being no response to both
letters, another letter of the same content dated 17 June 2002 was sent to
President Gloria Macapagal Arroyo. This letter was indorsed to the DENR
Secretary and eventually referred to the Panel of Arbitrators of the Mines and
Geosciences Bureau (MGB), Regional Office No. 02, Tuguegarao,Cagayan, for
further action.
On 12 November 2002, counsels for petitioners received a letter from the Panel of
Arbitrators of the MGB requiring the petitioners to comply with the Rules of the
Panel of Arbitrators before the letter may be acted upon.

Yet again, counsels for petitioners sent President Arroyo another demand letter
dated 8 November 2002. Said letter was again forwarded to the DENR Secretary
who referred the same to the MGB, Quezon City.
In a letter dated 19 February 2003, the MGB rejected the demand of counsels for
petitioners for the cancellation of the CAMC FTAA.
Petitioners thus filed the present petition for prohibition and mandamus, with a
prayer for a temporary restraining order. They pray that the Court issue an order:

1. enjoining public respondents from acting on any application for FTAA;
2. declaring unconstitutional the Philippine Mining Act of 1995 and its

Implementing Rules and Regulations;
3. canceling the FTAA issued to CAMC.
In their memorandum petitioners pose the following issues:

I
WHETHER OR NOT REPUBLIC ACT NO. 7942 AND THE CAMC FTAA ARE VOID BECAUSE
THEY ALLOW THE UNJUST AND UNLAWFUL TAKING OF PROPERTY WITHOUT PAYMENT
OF JUST COMPENSATION , IN VIOLATION OF SECTION 9, ARTICLE III OF THE
CONSTITUTION.

II
WHETHER OR NOT THE MINING ACT AND ITS IMPLEMENTING RULES AND REGULATIONS
ARE VOID AND UNCONSTITUTIONAL FOR SANCTIONING AN UNCONSTITUTIONAL
ADMINISTRATIVE PROCESS OF DETERMINING JUST COMPENSATION.
III
WHETHER OR NOT THE STATE, THROUGH REPUBLIC ACT NO. 7942 AND THE
CAMC FTAA, ABDICATED ITS PRIMARY RESPONSIBILITY TO THE FULL CONTROL AND
SUPERVISION OVER NATURAL RESOURCES.
IV
WHETHER OR NOT THE RESPONDENTS INTERPRETATION OF THE ROLE OF WHOLLY

FOREIGN AND FOREIGN-OWNED CORPORATIONS IN THEIR INVOLVEMENT IN MINING
ENTERPRISES, VIOLATES PARAGRAPH 4, SECTION 2, ARTICLE XII OF THE CONSTITUTION.
WHETHER OR NOT THE 1987 CONSTITUTION PROHIBITS SERVICE CONTRACTS.[1]
Before going to the substantive issues, the procedural question raised by

public respondents shall first be dealt with. Public respondents are of the view
that petitioners eminent domain claim is not ripe for adjudication as they fail to
allege that CAMC has actually taken their properties nor do they allege that their
property rights have been endangered or are in danger on account
of CAMCs FTAA. In effect, public respondents insist that the issue of eminent
domain is not a justiciable controversy which this Court can take cognizance of.
A justiciable controversy is defined as a definite and concrete dispute touching on

the legal relations of parties having adverse legal interests which may be resolved
by a court of law through the application of a law.[2] Thus, courts have no judicial
power to review cases involving political questions and as a rule, will desist from
taking cognizance of speculative or hypothetical cases, advisory opinions and
cases that have become moot.[3] The Constitution is quite explicit on this matter.
[4]
It provides that judicial power includes the duty of the courts of justice to settle
actual controversies involving rights which are legally demandable and
enforceable. Pursuant to this constitutional mandate, courts, through the power
of judicial review, are to entertain only real disputes between conflicting parties
through the application of law. For the courts to exercise the power of judicial
review, the following must be extant (1) there must be an actual case calling for
the exercise of judicial power; (2) the question must be ripe for adjudication; and
(3) the person challenging must have the standing.[5]
An actual case or controversy involves a conflict of legal rights, an assertion

of opposite legal claims, susceptible of judicial resolution as distinguished from a
hypothetical or abstract difference or dispute.[6] There must be a contrariety of
legal rights that can be interpreted and enforced on the basis of existing law and
jurisprudence.
Closely related to the second requisite is that the question must be ripe for
adjudication. A question is considered ripe for adjudication when the act being
challenged has had a direct adverse effect on the individual challenging it.[7]
The third requisite is legal standing or locus standi. It is defined as a personal or
substantial interest in the case such that the party has sustained or will sustain
direct injury as a result of the governmental act that is being challenged, alleging
more than a generalized grievance.[8] The gist of the question of standing is
whether a party alleges such personal stake in the outcome of the controversy as
to assure that concrete adverseness which sharpens the presentation of issues
upon which the court depends for illumination of difficult constitutional
questions.[9] Unless a person is injuriously affected in any of his constitutional
rights by the operation of statute or ordinance, he has no standing.[10]
In the instant case, there exists a live controversy involving a clash of legal rights
as Rep. Act No. 7942 has been enacted, DAO 96-40 has been approved
and an FTAAs have been entered into. The FTAA holders have already been
operating in various provinces of the country. Among them is CAMC which
operates in the provinces of Nueva Vizcayaand Quirino where numerous
individuals including the petitioners are imperiled of being ousted from their
landholdings in view of the CAMC FTAA. In light of this, the court cannot await the
adverse consequences of the law in order to consider the controversy actual and
ripe for judicial intervention.[11] Actual eviction of the land owners and occupants
need not happen for this Court to intervene. As held in Pimentel, Jr. v. Hon.
Aguirre[12]:

By the mere enactment of the questioned law or the approval of the challenged act, the
dispute is said to have ripened into a judicial controversy even without any other overt
act. Indeed, even a singular violation of the Constitution and/or the law is enough to
awaken judicial duty.[13]
Petitioners embrace various segments of the society. These

include Didipio Earth-Savers Multi-Purpose Association, Inc., an organization of
farmers and indigenous peoples organized under Philippine laws, representing a
community actually affected by the mining activities of CAMC, as well as other
residents of areas affected by the mining activities of CAMC. These petitioners
have the standing to raise the constitutionality of the questioned FTAA as they
allege a personal and substantial injury.[14] They assert that they are affected by
the mining activities of CAMC. Likewise, they are under imminent threat of being
displaced from their landholdings as a result of the implementation of the
questioned FTAA. They thus meet the appropriate case requirement as they
assert an interest adverse to that of respondents who, on the other hand, claim
the validity of the assailed statute and the FTAA of CAMC.
Besides, the transcendental importance of the issues raised and the

magnitude of the public interest involved will have a bearing on the countrys
economy which is to a greater extent dependent upon the mining industry. Also
affected by the resolution of this case are the proprietary rights of numerous
residents in the mining contract areas as well as the social existence of indigenous
peoples which are threatened. Based on these considerations, this Court deems it
proper to take cognizance of the instant petition.
Having resolved the procedural question, the constitutionality of the law under
attack must be addressed squarely.

First Substantive Issue: Validity of Section 76 of Rep. Act No. 7942 and DAO 96-
40
In seeking to nullify Rep. Act No. 7942 and its implementing rules DAO 96-
40 as unconstitutional, petitioners set their sight on Section 76 of Rep. Act No.
7942 and Section 107 of DAO 96-40 which they claim allow the unlawful and
unjust taking of private property for private purpose in contradiction with Section
9, Article III of the 1987 Constitution mandating that private property shall not be
taken except for public use and the corresponding payment of just
compensation. They assert that public respondent DENR, through the Mining Act
and its Implementing Rules and Regulations, cannot, on its own, permit entry into
a private property and allow taking of land without payment of just
compensation.
Interpreting Section 76 of Rep. Act No. 7942 and Section 107 of DAO 96-40,
juxtaposed with the concept of taking of property for purposes of eminent domain
in the case ofRepublic v. Vda. de Castellvi,[15] petitioners assert that there is indeed
a taking upon entry into private lands and concession areas.

Republic v. Vda. de Castellvi defines taking under the concept of eminent domain
as entering upon private property for more than a momentary period, and, under
the warrant or color of legal authority, devoting it to a public use, or otherwise
informally appropriating or injuriously affecting it in such a way as to substantially
oust the owner and deprive him of all beneficial enjoyment thereof.

From the criteria set forth in the cited case, petitioners claim that the entry
into a private property by CAMC, pursuant to its FTAA, is for more than a
momentary period, i.e., for 25 years, and renewable for another 25 years; that
the entry into the property is under the warrant or color of legal authority
pursuant to the FTAA executed between the government and CAMC; and that the
entry substantially ousts the owner or possessor and deprives him of all beneficial
enjoyment of the property. These facts, according to the petitioners, amount to
taking. As such, petitioners question the exercise of the power of eminent domain
as unwarranted because respondents failed to prove that the entry into private
property is devoted for public use.
Petitioners also stress that even without the doctrine in the Castellvi case, the
nature of the mining activity, the extent of the land area covered by the CAMC
FTAA and the various rights granted to the proponent or the FTAA holder, such
as (a) the right of possession of the Exploration Contract Area, with full right of
ingress and egress and the right to occupy the same; (b) the right not to be
prevented from entry into private lands by surface owners and/or occupants
thereof when prospecting, exploring and exploiting for minerals therein; (c) the
right to enjoy easement rights, the use of timber, water and other natural
resources in the Exploration Contract Area; (d) the right of possession of the
Mining Area, with full right of ingress and egress and the right to occupy the
same; and (e) the right to enjoy easement rights, water and other natural
resources in the Mining Area, result in a taking of private property.
Petitioners quickly add that even assuming arguendo that there is no absolute,

physical taking, at the very least, Section 76 establishes a legal easement upon the
surface owners, occupants and concessionaires of a mining contract area
sufficient to deprive them of enjoyment and use of the property and that such
burden imposed by the legal easement falls within the purview of eminent
domain.
To further bolster their claim that the legal easement established is equivalent to
taking, petitioners cite the case of National Power Corporation v.
Gutierrez[16] holding that the easement of right-of-way imposed against the use of
the land for an indefinite period is a taking under the power of eminent domain.
Traversing petitioners assertion, public respondents argue that Section 76 is not a

taking provision but a valid exercise of the police power and by virtue of which,
the state may prescribe regulations to promote the health, morals, peace,
education, good order, safety and general welfare of the people. This government
regulation involves the adjustment of rights for the public good and that this
adjustment curtails some potential for the use or economic exploitation of private
property. Public respondents concluded that to require compensation in all such
circumstances would compel the government to regulate by purchase.

Public respondents are inclined to believe that by entering private lands

and concession areas, FTAA holders do not oust the owners thereof nor deprive
them of all beneficial enjoyment of their properties as the said entry merely
establishes a legal easement upon surface owners, occupants and concessionaires
of a mining contract area.

Taking in Eminent Domain Distinguished from Regulation in Police Power
The power of eminent domain is the inherent right of the state (and of
those entities to which the power has been lawfully delegated) to condemn
private property to public use upon payment of just compensation.[17] On the
other hand, police power is the power of the state to promote public welfare by
restraining and regulating the use of liberty and property. [18] Although both police
power and the power of eminent domain have the general welfare for their
object, and recent trends show a mingling[19] of the two with the latter being used
as an implement of the former, there are still traditional distinctions between the
two.
Property condemned under police power is usually noxious or intended for

a noxious purpose; hence, no compensation shall be paid.[20] Likewise, in the
exercise of police power, property rights of private individuals are subjected to
restraints and burdens in order to secure the general comfort, health, and
prosperity of the state. Thus, an ordinance prohibiting theaters from selling
tickets in excess of their seating capacity (which would result in the diminution of
profits of the theater-owners) was upheld valid as this would promote the
comfort, convenience and safety of the customers.[21] In U.S. v. Toribio,[22] the
court upheld the provisions of Act No. 1147, a statute regulating the slaughter
of carabao for the purpose of conserving an adequate supply of draft animals, as a
valid exercise of police power, notwithstanding the property rights impairment
that the ordinance imposed on cattle owners. A zoning ordinance prohibiting the
operation of a lumber yard within certain areas was assailed as unconstitutional
in that it was an invasion of the property rights of the lumber yard owners
in People v. de Guzman.[23] The Court nonetheless ruled that the regulation was a
valid exercise of police power. A similar ruling was arrived at in Seng Kee S Co.
v. Earnshaw and Piatt[24] where an ordinance divided the City of Manila into
industrial and residential areas.
A thorough scrutiny of the extant jurisprudence leads to a cogent deduction

that where a property interest is merely restricted because the continued use
thereof would be injurious to public welfare, or where property is destroyed
because its continued existence would be injurious to public interest, there is no
compensable taking.[25] However, when a property interest is appropriated and
applied to some public purpose, there is compensable taking.[26]
According to noted constitutionalist, Fr. Joaquin Bernas, SJ, in the exercise

of its police power regulation, the state restricts the use of private property, but
none of the property interests in the bundle of rights which constitute ownership
is appropriated for use by or for the benefit of the public. [27] Use of the property
by the owner was limited, but no aspect of the property is used by or for the
public.[28] The deprivation of use can in fact be total and it will not constitute
compensable taking if nobody else acquires use of the property or any interest
therein.[29]
If, however, in the regulation of the use of the property, somebody else
acquires the use or interest thereof, such restriction constitutes compensable
taking. Thus, in City Government of Quezon City v. Ericta,[30] it was argued by the
local government that an ordinance requiring private cemeteries to reserve 6% of
their total areas for the burial of paupers was a valid exercise of the police power
under the general welfare clause. This court did not agree in the contention,
ruling that property taken under the police power is sought to be destroyed and
not, as in this case, to be devoted to a public use. It further declared that the
ordinance in question was actually a taking of private property without just
compensation of a certain area from a private cemetery to benefit paupers who
are charges of the local government. Being an exercise of eminent domain
without provision for the payment of just compensation, the same was rendered
invalid as it violated the principles governing eminent domain.
In People v. Fajardo,[31] the municipal mayor refused Fajardo permission to

build a house on his own land on the ground that the proposed structure would
destroy the view or beauty of the public plaza. The ordinance relied upon by the
mayor prohibited the construction of any building that would destroy the view of
the plaza from the highway.The court ruled that the municipal ordinance under
the guise of police power permanently divest owners of the beneficial use of their
property for the benefit of the public; hence, considered as a taking under the
power of eminent domain that could not be countenanced without payment of
just compensation to the affected owners. In this case, what the municipality
wanted was to impose an easement on the property in order to preserve the view
or beauty of the public plaza, which was a form of utilization of Fajardos property
for public benefit.[32]
While the power of eminent domain often results in the appropriation of

title to or possession of property, it need not always be the case. Taking may
include trespass without actual eviction of the owner, material impairment of the
value of the property or prevention of the ordinary uses for which the property
was intended such as the establishment of an easement.[33] In Ayala de Roxas v.
City of Manila,[34] it was held that the imposition of burden over a private property
through easement was considered taking; hence, payment of just compensation
is required. The Court declared:

And, considering that the easement intended to be established, whatever may
be the object thereof, is not merely a real right that will encumber the property, but is
one tending to prevent the exclusive use of one portion of the same, by expropriating it
for public use which, be it what it may, can not be accomplished unless the owner of the
property condemned or seized be previously and duly indemnified, it is proper to
protect the appellant by means of the remedy employed in such cases, as it is only
adequate remedy when no other legal action can be resorted to, against an intent which
is nothing short of an arbitrary restriction imposed by the city by virtue of the coercive
power with which the same is invested.
And in the case of National Power Corporation v. Gutierrez,[35] despite

the NPCs protestation that the owners were not totally deprived of the use of the
land and could still plant the same crops as long as they did not come into contact
with the wires, the Court nevertheless held that the easement of right-of-way was
a taking under the power of eminent domain. The Court said:

In the case at bar, the easement of right-of-way is definitely a taking under the
power of eminent domain. Considering the nature and effect of the installation of 230
KV Mexico-Limaytransmission lines, the limitation imposed by NPC against the use of
the land for an indefinite period deprives private respondents of its ordinary use.
A case exemplifying an instance of compensable taking which does not

entail transfer of title is Republic v. Philippine Long Distance Telephone Co.
[36]
Here, the Bureau of Telecommunications, a government instrumentality, had
contracted with the PLDT for the interconnection between the Government
Telephone System and that of the PLDT, so that the former could make use of the
lines and facilities of the PLDT. In its desire to expand services to government
offices, the Bureau of Telecommunications demanded to expand its use of the
PLDT lines. Disagreement ensued on the terms of the contract for the use of the
PLDT facilities. The Court ruminated:

Normally, of course, the power of eminent domain results in the taking or

appropriation of title to, and possession of, the expropriated property; but no cogent
reason appears why said power may not be availed of to impose only a burden upon the
owner of the condemned property, without loss of title and possession. It is
unquestionable that real property may, through expropriation, be subjected to an
easement right of way.[37]
In Republic v. Castellvi,[38] this Court had the occasion to spell out the

requisites of taking in eminent domain, to wit:

(1) the expropriator must enter a private property;
(2) the entry must be for more than a momentary period.
(3) the entry must be under warrant or color of legal authority;
(4) the property must be devoted to public use or otherwise informally

appropriated or injuriously affected;
(5) the utilization of the property for public use must be in such a way as to oust
the owner and deprive him of beneficial enjoyment of the property.

As shown by the foregoing jurisprudence, a regulation which substantially

deprives the owner of his proprietary rights and restricts the beneficial use and
enjoyment for public use amounts to compensable taking. In the case under
consideration, the entry referred to in Section 76 and the easement rights under
Section 75 of Rep. Act No. 7942 as well as the various rights to CAMC under its
FTAA are no different from the deprivation of proprietary rights in the cases
discussed which this Court considered as taking. Section 75 of the law in question
reads:

Easement Rights. - When mining areas are so situated that for purposes of more
convenient mining operations it is necessary to build, construct or install on the mining
areas or lands owned, occupied or leased by other persons, such infrastructure as roads,
railroads, mills, waste dump sites, tailing ponds, warehouses, staging or storage areas
and port facilities, tramways, runways, airports, electric transmission, telephone or
telegraph lines, dams and their normal flood and catchment areas, sites for water wells,
ditches, canals, new river beds, pipelines, flumes, cuts, shafts, tunnels, or mills, the
contractor, upon payment of just compensation, shall be entitled to enter and occupy
said mining areas or lands.
Section 76 provides:

Entry into private lands and concession areas Subject to prior notification,
holders of mining rights shall not be prevented from entry into private lands and
concession areas by surface owners, occupants, or concessionaires when conducting
mining operations therein.
The CAMC FTAA grants in favor of CAMC the right of possession of the
Exploration Contract Area, the full right of ingress and egress and the right to
occupy the same.It also bestows CAMC the right not to be prevented from entry
into private lands by surface owners or occupants thereof when prospecting,
exploring and exploiting minerals therein.
The entry referred to in Section 76 is not just a simple right-of-way which is

ordinarily allowed under the provisions of the Civil Code. Here, the holders of
mining rights enter private lands for purposes of conducting mining activities such
as exploration, extraction and processing of minerals. Mining right holders build
mine infrastructure, dig mine shafts and connecting tunnels, prepare tailing
ponds, storage areas and vehicle depots, install their machinery, equipment and
sewer systems. On top of this, under Section 75, easement rights are accorded to
them where they may build warehouses, port facilities, electric transmission,
railroads and other infrastructures necessary for mining operations. All these will
definitely oust the owners or occupants of the affected areas the beneficial
ownership of their lands. Without a doubt, taking occurs once mining operations
commence.
Section 76 of Rep. Act No. 7942 is a Taking Provision
Moreover, it would not be amiss to revisit the history of mining laws of this
country which would help us understand Section 76 of Rep. Act No. 7942.
This provision is first found in Section 27 of Commonwealth Act No. 137

which took effect on 7 November 1936, viz:

Before entering private lands the prospector shall first apply in writing for
written permission of the private owner, claimant, or holder thereof, and in case of
refusal by such private owner, claimant, or holder to grant such permission, or in case of
disagreement as to the amount of compensation to be paid for such privilege of
prospecting therein, the amount of such compensation shall be fixed by agreement
among the prospector, the Director of the Bureau of Mines and the surface owner, and
in case of their failure to unanimously agree as to the amount of compensation, all
questions at issue shall be determined by the Court of First Instance.
Similarly, the pertinent provision of Presidential Decree No. 463, otherwise

known as The Mineral Resources Development Decree of 1974, provides:

SECTION 12. Entry to Public and Private Lands. A person who desires to conduct
prospecting or other mining operations within public lands covered by concessions or
rights other than mining shall first obtain the written permission of the government
official concerned before entering such lands. In the case of private lands, the written
permission of the owner or possessor of the land must be obtained before entering such
lands. In either case, if said permission is denied, the Director, at the request of the
interested person may intercede with the owner or possessor of the land. If the
intercession fails, the interested person may bring suit in the Court of First Instance of
the province where the land is situated. If the court finds the request justified, it shall
issue an order granting the permission after fixing the amount of compensation and/or
rental due the owner or possessor: Provided, That pending final adjudication of such
amount, the court shall upon recommendation of the Director permit the interested
person to enter, prospect and/or undertake other mining operations on the disputed
land upon posting by such interested person of a bond with the court which the latter
shall consider adequate to answer for any damage to the owner or possessor of the land
resulting from such entry, prospecting or any other mining operations.
Hampered by the difficulties and delays in securing surface rights for the entry
into private lands for purposes of mining operations, Presidential Decree No. 512
dated 19 July 1974 was passed into law in order to achieve full and accelerated
mineral resources development. Thus, Presidential Decree No. 512 provides for a
new system of surface rights acquisition by mining prospectors and
claimants. Whereas in Commonwealth Act No. 137 and Presidential Decree No.
463 eminent domain may only be exercised in order that the mining claimants
can build, construct or install roads, railroads, mills, warehouses and other
facilities, this time, the power of eminent domain may now be invoked by mining
operators for the entry, acquisition and use of private lands, viz:

SECTION 1. Mineral prospecting, location, exploration, development and exploitation is
hereby declared of public use and benefit, and for which the power of eminent domain
may be invoked and exercised for the entry, acquisition and use of private lands. x x x.
The evolution of mining laws gives positive indication that mining operators who
are qualified to own lands were granted the authority to exercise eminent domain
for the entry, acquisition, and use of private lands in areas open for mining
operations. This grant of authority extant in Section 1 of Presidential Decree No.
512 is not expressly repealed by Section 76 of Rep. Act No. 7942; and
neither are the former statutes impliedly repealed by the former. These two
provisions can stand together even if Section 76 of Rep. Act No. 7942 does not
spell out the grant of the privilege to exercise eminent domain which was present
in the old law.
It is an established rule in statutory construction that in order that one law may
operate to repeal another law, the two laws must be inconsistent. [39] The former
must be so repugnant as to be irreconciliable with the latter act. Simply because a
latter enactment may relate to the same subject matter as that of an earlier
statute is not of itself sufficient to cause an implied repeal of the latter, since the
new law may be cumulative or a continuation of the old one. As has been the
ruled, repeals by implication are not favored, and will not be decreed unless it is
manifest that the legislature so intended.[40] As laws are presumed to be passed
with deliberation and with full knowledge of all existing ones on the subject, it is
but reasonable to conclude that in passing a statute it was not intended to
interfere with or abrogate any former law relating to the same matter, unless the
repugnancy between the two is not only irreconcilable, but also clear and
convincing, and flowing necessarily from the language used, unless the later act
fully embraces the subject matter of the earlier, or unless the reason for the
earlier act is beyond peradventure removed.[41] Hence, every effort must be used
to make all acts stand and if, by any reasonable construction, they can be
reconciled, the latter act will not operate as a repeal of the earlier.
Considering that Section 1 of Presidential Decree No. 512 granted the qualified
mining operators the authority to exercise eminent domain and since this grant of
authority is deemed incorporated in Section 76 of Rep. Act No. 7942, the
inescapable conclusion is that the latter provision is a taking provision.
While this Court declares that the assailed provision is a taking provision, this
does not mean that it is unconstitutional on the ground that it allows taking of
private property without the determination of public use and the payment of just
compensation.
The taking to be valid must be for public use.[42] Public use as a requirement for
the valid exercise of the power of eminent domain is now synonymous with
public interest, public benefit, public welfare and public convenience. [43] It
includes the broader notion of indirect public benefit or advantage. Public use as
traditionally understood as actual use by the public has already been abandoned.
[44]
Mining industry plays a pivotal role in the economic development of the country
and is a vital tool in the governments thrust of accelerated recovery. [45] The
importance of the mining industry for national development is expressed in
Presidential Decree No. 463:

WHEREAS, mineral production is a major support of the national economy, and
therefore the intensified discovery, exploration, development and wise utilization of the
countrys mineral resources are urgently needed for national development.
Irrefragably, mining is an industry which is of public benefit.
That public use is negated by the fact that the state would be taking private
properties for the benefit of private mining firms or mining contractors is not at
all true. In Heirs of Juancho Ardona v. Reyes,[46] petitioners therein contended that
the promotion of tourism is not for public use because private concessionaires
would be allowed to maintain various facilities such as restaurants, hotels, stores,
etc., inside the tourist area. The Court thus contemplated:

The rule in Berman v. Parker [348 U.S. 25; 99 L. ed. 27] of deference to legislative policy
even if such policy might mean taking from one private person and conferring on
another private person applies as well in the Philippines.
. . . Once the object is within the authority of Congress, the means by

which it will be attained is also for Congress to determine. Here one of
the means chosen is the use of private enterprise for redevelopment of
the area. Appellants argue that this makes the project a taking from one
businessman for the benefit of another businessman. But the means of
executing the project are for Congress and Congress alone to
determine, once the public purpose has been established. x x x[47]
Petitioners further maintain that the states discretion to decide when to take
private property is reduced contractually by Section 13.5 of the CAMC FTAA,
which reads:

If the CONTRACTOR so requests at its option, the GOVERNMENT shall use its offices and
legal powers to assist in the acquisition at reasonable cost of any surface areas or rights
required by the CONTRACTOR at the CONTRACTORs cost to carry out the Mineral
Exploration and the Mining Operations herein.
All obligations, payments and expenses arising from, or incident to, such agreements or
acquisition of right shall be for the account of the CONTRACTOR and shall be
recoverable as Operating Expense.
According to petitioners, the government is reduced to a sub-contractor upon the

request of the private respondent, and on account of the foregoing provision, the
contractor can compel the government to exercise its power of eminent domain
thereby derogating the latters power to expropriate property.
The provision of the FTAA in question lays down the ways and means by which
the foreign-owned contractor, disqualified to own land, identifies to the
government the specific surface areas within the FTAA contract area to be
acquired for the mine infrastructure.[48] The government then acquires ownership
of the surface land areas on behalf of the contractor, through a voluntary
transaction in order to enable the latter to proceed to fully implement the
FTAA. Eminent domain is not yet called for at this stage since there are still
various avenues by which surface rights can be acquired other than expropriation.
The FTAA provision under attack merely facilitates the implementation of the
FTAA given to CAMC and shields it from violating the Anti-Dummy Law. Hence,
when confronted with the same question in La Bugal-BLaan Tribal Association,
Inc. v. Ramos,[49] the Court answered:

Clearly, petitioners have needlessly jumped to unwarranted conclusions,
without being aware of the rationale for the said provision. That provision does
not call for the exercise of the power of eminent domain -- and determination of
just compensation is not an issue -- as much as it calls for a qualified party to
acquire the surface rights on behalf of a foreign-owned contractor.
Rather than having the foreign contractor act through a dummy
corporation, having the State do the purchasing is a better alternative. This will at
least cause the government to be aware of such transaction/s and foster
transparency in the contractors dealings with the local property owners. The
government, then, will not act as a subcontractor of the contractor; rather, it will
facilitate the transaction and enable the parties to avoid a technical violation of
the Anti-Dummy Law.
There is also no basis for the claim that the Mining Law and its
implementing rules and regulations do not provide for just compensation in
expropriating private properties. Section 76 of Rep. Act No. 7942 and Section 107
of DAO 96-40 provide for the payment of just compensation:

Section 76. xxx Provided, that any damage to the property of the surface owner,
occupant, or concessionaire as a consequence of such operations shall be properly
compensated as may be provided for in the implementing rules and regulations.

Section 107. Compensation of the Surface Owner and Occupant- Any damage done to
the property of the surface owners, occupant, or concessionaire thereof as a
consequence of the mining operations or as a result of the construction or installation of
the infrastructure mentioned in 104 above shall be properly and justly compensated.
Such compensation shall be based on the agreement entered into between the holder
of mining rights and the surface owner, occupant or concessionaire thereof, where
appropriate, in accordance with P.D. No. 512. (Emphasis supplied.)
Second Substantive Issue: Power of Courts to Determine Just Compensation

Closely-knit to the issue of taking is the determination of just

compensation. It is contended that Rep. Act No. 7942 and Section 107 of DAO 96-
40 encroach on the power of the trial courts to determine just compensation in
eminent domain cases inasmuch as the same determination of proper
compensation are cognizable only by the Panel of Arbitrators.
The question on the judicial determination of just compensation has been

settled in the case of Export Processing Zone Authority v. Dulay[50] wherein the
court declared that the determination of just compensation in eminent domain
cases is a judicial function. Even as the executive department or the legislature
may make the initial determinations, the same cannot prevail over the courts
findings.
Implementing Section 76 of Rep. Act No. 7942, Section 105 of DAO 96-40
states that holder(s) of mining right(s) shall not be prevented from entry into
its/their contract/mining areas for the purpose of exploration, development,
and/or utilization. That in cases where surface owners of the lands, occupants or
concessionaires refuse to allow the permit holder or contractor entry, the latter
shall bring the matter before the Panel of Arbitrators for proper
disposition. Section 106 states that voluntary agreements between the two
parties permitting the mining right holders to enter and use the surface owners
lands shall be registered with the Regional Office of the MGB. In connection with
Section 106, Section 107 provides that the compensation for the damage done to
the surface owner, occupant or concessionaire as a consequence of mining
operations or as a result of the construction or installation of the infrastructure
shall be properly and justly compensated and that such compensation shall be
based on the agreement between the holder of mining rights and surface owner,
occupant or concessionaire, or where appropriate, in accordance with
Presidential Decree No. 512. In cases where there is disagreement to the
compensation or where there is no agreement, the matter shall be brought
before the Panel of Arbitrators. Section 206 of the implementing rules and
regulations provides an aggrieved party the remedy to appeal the decision of the
Panel of Arbitrators to the Mines Adjudication Board, and the latters decision may
be reviewed by the Supreme Court by filing a petition for review on certiorari.[51]
An examination of the foregoing provisions gives no indication that the

courts are excluded from taking cognizance of expropriation cases under the
mining law. The disagreement referred to in Section 107 does not involve the
exercise of eminent domain, rather it contemplates of a situation wherein the
permit holders are allowed by the surface owners entry into the latters lands and
disagreement ensues as regarding the proper compensation for the allowed entry
and use of the private lands. Noticeably, the provision points to a voluntary sale
or transaction, but not to an involuntary sale.
The legislature, in enacting the mining act, is presumed to have deliberated

with full knowledge of all existing laws and jurisprudence on the subject. Thus, it
is but reasonable to conclude that in passing such statute it was in accord with
the existing laws and jurisprudence on the jurisdiction of courts in the
determination of just compensation and that it was not intended to interfere with
or abrogate any former law relating to the same matter. Indeed, there is nothing
in the provisions of the assailed law and itsimplementing rules and regulations
that exclude the courts from their jurisdiction to determine just compensation in
expropriation proceedings involving mining operations.Although Section 105
confers upon the Panel of Arbitrators the authority to decide cases where surface
owners, occupants, concessionaires refuse permit holders entry, thus,
necessitating involuntary taking, this does not mean that the determination of the
just compensation by the Panel of Arbitrators or the Mines Adjudication Board is
final and conclusive. The determination is only preliminary unless accepted by all
parties concerned. There is nothing wrong with the grant of primary jurisdiction
by the Panel of Arbitrators or the Mines Adjudication Board to determine in a
preliminary matter the reasonable compensation due the affected landowners or
occupants.[52] The original and exclusive jurisdiction of the courts to decide
determination of just compensation remains intact despite the preliminary
determination made by the administrative agency. As held in Philippine Veterans
Bank v. Court of Appeals[53]:

The jurisdiction of the Regional Trial Courts is not any less original and exclusive
because the question is first passed upon by the DAR, as the judicial proceedings are not
a continuation of the administrative determination.
Third Substantive Issue: Sufficient Control by the State Over Mining Operations
Anent the third issue, petitioners charge that Rep. Act No. 7942, as well as
its Implementing Rules and Regulations, makes it possible for FTAA contracts to
cede over to a fully foreign-owned corporation full control and management of
mining enterprises, with the result that the State is allegedly reduced to a passive
regulator dependent on submitted plans and reports, with weak review and audit
powers. The State is not acting as the supposed owner of the natural resources
for and on behalf of the Filipino people; it practically has little effective say in the
decisions made by the enterprise. In effect, petitioners asserted that the law, the
implementing regulations, and the CAMC FTAA cede beneficial ownership of the
mineral resources to the foreign contractor.
It must be noted that this argument was already raised in La Bugal-

BLaan Tribal Association, Inc. v. Ramos,[54] where the Court answered in the
following manner:

RA 7942 provides for the states control and supervision over mining
operations. The following provisions thereof establish the mechanism of
inspection and visitorial rights over mining operations and institute reportorial
requirements in this manner:

1. Sec. 8 which provides for the DENRs power of over-all
supervision and periodic review for the conservation,
management, development and proper use of the States
mineral resources;
2. Sec. 9 which authorizes the Mines and Geosciences
Bureau (MGB) under the DENR to exercise direct
charge in the administration and disposition of mineral
resources, and empowers the MGB to monitor the
compliance by the contractor of the terms and
conditions of the mineral agreements, confiscate surety
and performance bonds, and deputize whenever
necessary any member or unit of the Phil. National
Police, barangay, duly registered non-governmental
organization (NGO) or any qualified person to police
mining activities;
3. Sec. 66 which vests in the Regional Director exclusive
jurisdiction over safety inspections of all installations,
whether surface or underground, utilized in mining
operations.
4. Sec. 35, which incorporates into all FTAAs the
following terms, conditions and warranties:
(g) Mining operations shall be conducted in
accordance with the provisions of the Act and
its IRR.
(h) Work programs and minimum expenditures
commitments.
x x x x
(k) Requiring proponent to effectively use
appropriate anti-pollution technology and
facilities to protect the environment and
restore or rehabilitate mined-out areas.
(l) The contractors shall furnish the Government
records of geologic, accounting and other
relevant data for its mining operation, and that
books of accounts and records shall be open
for inspection by the government. x x x.
(m) Requiring the proponent to dispose of the
minerals at the highest price and more
advantageous terms and conditions.
x x x x
(o) Such other terms and conditions consistent
with the Constitution and with this Act as the
Secretary may deem to be for the best interest
of the State and the welfare of the Filipino
people.
The foregoing provisions of Section 35 of RA 7942 are also reflected and
implemented in Section 56 (g), (h), (l), (m) and (n) of the Implementing Rules,
DAO 96-40.
Moreover, RA 7942 and DAO 96-40 also provide various stipulations
confirming the governments control over mining enterprises:
The contractor is to relinquish to the government those portions of the contract

area not needed for mining operations and not covered by any declaration of
mining feasibility (Section 35-e, RA 7942; Section 60, DAO 96-40).
The contractor must comply with the provisions pertaining to mine safety,

health and environmental protection (Chapter XI, RA 7942; Chapters XV and
XVI, DAO 96-40).
For violation of any of its terms and conditions, government may cancel an

FTAA. (Chapter XVII, RA 7942; Chapter XXIV, DAO 96-40).
An FTAA contractor is obliged to open its books of accounts and records for

0inspection by the government (Section 56-m, DAO 96-40).
An FTAA contractor has to dispose of the minerals and by-products at the

highest market price and register with the MGB a copy of the sales agreement
(Section 56-n, DAO 96-40).
MGB is mandated to monitor the contractors compliance with the terms and

conditions of the FTAA; and to deputize, when necessary, any member or
unit of the Philippine National Police, the barangay or a DENR-accredited
nongovernmental organization to police mining activities (Section 7-d and -f,
DAO 96-40).
An FTAA cannot be transferred or assigned without prior approval by the
President (Section 40, RA 7942; Section 66, DAO 96-40).
A mining project under an FTAA cannot proceed to the
construction/development/utilization stage, unless its Declaration of Mining
Project Feasibility has been approved by government (Section 24, RA 7942).
The Declaration of Mining Project Feasibility filed by the contractor cannot be
approved without submission of the following documents:
1. Approved mining project feasibility study (Section 53-d,
DAO 96-40)
2. Approved three-year work program (Section 53-a-4,
DAO 96-40)
3. Environmental compliance certificate (Section 70, RA
7942)
4. Approved environmental protection and enhancement
program (Section 69, RA 7942)
5. Approval by
the Sangguniang Panlalawigan/Bayan/Barangay (Section
70, RA 7942; Section 27, RA 7160)
6. Free and prior informed consent by the indigenous
peoples concerned, including payment of royalties
through a Memorandum of Agreement (Section 16, RA
7942; Section 59, RA 8371)
The FTAA contractor is obliged to assist in the development of its mining
community, promotion of the general welfare of its inhabitants, and
development of science and mining technology (Section 57, RA 7942).
The FTAA contractor is obliged to submit reports (on quarterly, semi-annual
or annual basis as the case may be; per Section 270, DAO 96-40), pertaining
to the following:
1. Exploration
2. Drilling
3. Mineral resources and reserves
4. Energy consumption
5. Production
6. Sales and marketing
7. Employment
8. Payment of taxes, royalties, fees and other Government
Shares
9. Mine safety, health and environment
10. Land use
11. Social development
12. Explosives consumption
An FTAA pertaining to areas within government reservations cannot be

granted without a written clearance from the government agencies
concerned (Section 19, RA 7942; Section 54, DAO 96-40).
An FTAA contractor is required to post a financial guarantee bond in favor of

the government in an amount equivalent to its expenditures obligations for
any particular year. This requirement is apart from the representations and
warranties of the contractor that it has access to all the financing, managerial
and technical expertise and technology necessary to carry out the objectives
of the FTAA (Section 35-b, -e, and -f, RA 7942).
Other reports to be submitted by the contractor, as required under DAO 96-

40, are as follows: an environmental report on the rehabilitation of the
mined-out area and/or mine waste/tailing covered area, and anti-pollution
measures undertaken (Section 35-a-2); annual reports of the mining
operations and records of geologic accounting (Section 56-m); annual
progress reports and final report of exploration activities (Section 56-2).
Other programs required to be submitted by the contractor, pursuant to DAO

96-40, are the following: a safety and health program (Section 144); an
environmental work program (Section 168); an annual environmental
protection and enhancement program (Section 171).
The foregoing gamut of requirements, regulations, restrictions and
limitations imposed upon the FTAA contractor by the statute and regulations
easily overturns petitioners contention. The setup under RA 7942 and DAO 96-
40 hardly relegates the State to the role of a passive regulator dependent on
submitted plans and reports. On the contrary, the government agencies concerned
are empowered to approve or disapprove -- hence, to influence, direct and change
-- the various work programs and the corresponding minimum expenditure
commitments for each of the exploration, development and utilization phases of
the mining enterprise.
Once these plans and reports are approved, the contractor is bound to
comply with its commitments therein. Figures for mineral production and sales
are regularly monitored and subjected to government review, in order to ensure
that the products and by-products are disposed of at the best prices possible; even
copies of sales agreements have to be submitted to and registered with MGB.
And the contractor is mandated to open its books of accounts and records for
scrutiny, so as to enable the State to determine if the government share has been
fully paid.
The State may likewise compel the contractors compliance with
mandatory requirements on mine safety, health and environmental protection, and
the use of anti-pollution technology and facilities. Moreover, the contractor is
also obligated to assist in the development of the mining community and to pay
royalties to the indigenous peoples concerned.
Cancellation of the FTAA may be the penalty for violation of any of its
terms and conditions and/or noncompliance with statutes or regulations. This
general, all-around, multipurpose sanction is no trifling matter, especially to a
contractor who may have yet to recover the tens or hundreds of millions of dollars
sunk into a mining project.
Overall, considering the provisions of the statute and the regulations just
discussed, we believe that the State definitely possesses the means by which it can
have the ultimate word in the operation of the enterprise, set directions and
objectives, and detect deviations and noncompliance by the contractor; likewise, it
has the capability to enforce compliance and to impose sanctions, should the
occasion therefor arise.
In other words, the FTAA contractor is not free to do whatever it pleases
and get away with it; on the contrary, it will have to follow the government line if
it wants to stay in the enterprise. Ineluctably then, RA 7942 and DAO 96-40 vest
in the government more than a sufficient degree of control and supervision over
the conduct of mining operations.
Fourth Substantive Issue: The Proper Interpretation of the Constitutional Phrase
Agreements Involving Either Technical or Financial Assistance
In interpreting the first and fourth paragraphs of Section 2, Article XII of the
Constitution, petitioners set forth the argument that foreign corporations are
barred from making decisions on the conduct of operations and the management
of the mining project. The first paragraph of Section 2, Article XII reads:

x x x The exploration, development, and utilization of natural resources shall be
under the full control and supervision of the State. The State may directly undertake
such activities, or it may enter into co-production, joint venture, or production sharing
agreements with Filipino citizens, or corporations or associations at least
sixty percentum of whose capital is owned by such citizens. Such agreements may be for
a period not exceeding twenty five years, renewable for not more than twenty five
years, and under such terms and conditions as may be provided by law x x x.
The fourth paragraph of Section 2, Article XII provides:

The President may enter into agreements with foreign-owned corporations
involving either technical or financial assistance for large scale exploration,
development, and utilization of minerals, petroleum, and other mineral oils according to
the general terms and conditions provided by law, based on real contributions to the
economic growth and general welfare of the country x x x.
Petitioners maintain that the first paragraph bars aliens and foreign-owned
corporations from entering into any direct arrangement with the government
including those which involve co-production, joint venture or production sharing
agreements. They likewise insist that the fourth paragraph allows foreign-owned
corporations to participate in the large-scale exploration, development and
utilization of natural resources, but such participation, however, is merely limited
to an agreement for either financial or technical assistance only.
Again, this issue has already been succinctly passed upon by this Court
in La Bugal-BLaan Tribal Association, Inc. v. Ramos.[55] In discrediting such
argument, the Court ratiocinated:

Petitioners claim that the phrase agreements x x x involving either
technical or financial assistance simply means technical assistance or financial
assistance agreements, nothing more and nothing else. They insist that there is no
ambiguity in the phrase, and that a plain reading of paragraph 4 quoted above
leads to the inescapable conclusion that what a foreign-owned corporation may
enter into with the government is merely an agreement
for either financial or technical assistance only, for the large-scale exploration,
development and utilization of minerals, petroleum and other mineral oils; such a
limitation, they argue, excludes foreign management and operation of a mining
enterprise.
This restrictive interpretation, petitioners believe, is in line with the
general policy enunciated by the Constitution reserving to Filipino citizens and
corporations the use and enjoyment of the countrys natural resources. They
maintain that this Courts Decision of January 27, 2004 correctly declared the
WMCP FTAA, along with pertinent provisions of RA 7942, void for allowing a
foreign contractor to have direct and exclusive management of a mining
enterprise. Allowing such a privilege not only runs counter to the full control and
supervision that the State is constitutionally mandated to exercise over the
exploration, development and utilization of the countrys natural resources; doing
so also vests in the foreign company beneficial ownership of our mineral
resources. It will be recalled that the Decision of January 27, 2004 zeroed in on
management or other forms of assistance or other activities associated with the
service contracts of the martial law regime, since the management or operation of
mining activities by foreign contractors, which is the primary feature of service
contracts, was precisely the evil that the drafters of the 1987 Constitution sought
to eradicate.
x x x x
We do not see how applying a strictly literal or verba legis interpretation
of paragraph 4 could inexorably lead to the conclusions arrived at in
the ponencia. First, the drafters choice of words -- their use of the
phrase agreements x x x involving either technical or financial assistance -- does
not indicate the intent to exclude other modes of assistance. The drafters opted to
use involving when they could have simply said agreements for financial or
technical assistance, if that was their intention to begin with. In this case, the
limitation would be very clear and no further debate would ensue.
In contrast, the use of the word involving signifies the possibility of the
inclusion of other forms of assistance or activities having to do with, otherwise
related to or compatible with financial or technical assistance. The word
involving as used in this context has three connotations that can be differentiated
thus: one, the sense of concerning, having to do with, or affecting; two, entailing,
requiring, implying or necessitating; and three, including, containing or
comprising.
Plainly, none of the three connotations convey a sense of exclusivity.
Moreover, the word involving, when understood in the sense of including, as
in including technical or financial assistance, necessarily implies that there
are activities other than those that are being included. In other words, if an
agreement includes technical or financial assistance, there is apart from such
assistance -- something else already in, and covered or may be covered by, the
said agreement.
In short, it allows for the possibility that matters, other than those
explicitly mentioned, could be made part of the agreement. Thus, we are now led
to the conclusion that the use of the word involving implies that these agreements
with foreign corporations are not limited to mere financial or technical assistance.
The difference in sense becomes very apparent when we juxtapose
agreements for technical or financial assistance against
agreements including technical or financial assistance. This much is unalterably
clear in a verba legis approach.
Second, if the real intention of the drafters was to confine foreign
corporations to financial or technical assistance and nothing more, their language
would have certainly been so unmistakably restrictive and stringent as to leave no
doubt in anyones mind about their true intent. For example, they would have used
the sentence foreign corporations are absolutely prohibited from involvement in
the management or operation of mining or similar ventures or words of similar
import. A search for such stringent wording yields negative results. Thus, we
come to the inevitable conclusion that there was a conscious and deliberate
decision to avoid the use of restrictive wording that bespeaks an intent not to
use the expression agreements x xx involving either technical or financial
assistance in an exclusionary and limiting manner.

Fifth Substantive Issue: Service Contracts Not Deconstitutionalized
Lastly, petitioners stress that the service contract regime under the 1973

Constitution is expressly prohibited under the 1987 Constitution as the term
service contracts found in the former was deleted in the latter to avoid the
circumvention of constitutional prohibitions that were prevalent in the 1987
Constitution. According to them, the framers of the 1987 Constitution only
intended for foreign-owned corporations to provide either technical assistance or
financial assistance. Upon perusal of the CAMC FTAA, petitioners are of the
opinion that the same is a replica of the service contract agreements that the
present constitution allegedly prohibit.
Again, this contention is not well-taken. The mere fact that the term service
contracts found in the 1973 Constitution was not carried over to the present
constitution, sans any categorical statement banning service contracts in mining
activities, does not mean that service contracts as understood in the 1973
Constitution was eradicated in the 1987 Constitution.[56] The 1987 Constitution
allows the continued use of service contracts with foreign corporations as
contractors who would invest in and operate and manage extractive enterprises,
subject to the full control and supervision of the State; this time, however, safety
measures were put in place to prevent abuses of the past regime.[57] We ruled, thus:

To our mind, however, such intent cannot be definitively and conclusively
established from the mere failure to carry the same expression or term over to the
new Constitution, absent a more specific, explicit and unequivocal statement to
that effect. What petitioners seek (a complete ban on foreign participation in the
management of mining operations, as previously allowed by the earlier
Constitutions) is nothing short of bringing about a momentous sea change in the
economic and developmental policies; and the fundamentally capitalist, free-
enterprise philosophy of our government. We cannot imagine such a radical
shift being undertaken by our government, to the great prejudice of the mining
sector in particular and our economy in general, merely on the basis of
the omission of the terms service contract from or the failure to carry them over to
the new Constitution. There has to be a much more definite and even unarguable
basis for such a drastic reversal of policies.
x x x x
The foregoing are mere fragments of the framers lengthy discussions of
the provision dealing with agreements x x x involving either technical or financial
assistance, which ultimately became paragraph 4 of Section 2 of Article XII of
the Constitution. Beyond any doubt, the members of the ConCom were actually
debating about the martial-law-era service contracts for which they were
crafting appropriate safeguards.
In the voting that led to the approval of Article XII by the ConCom, the
explanations given by Commissioners Gascon, Garcia and Tadeo indicated that
they had voted to reject this provision on account of their objections to
the constitutionalization of the service contract concept.
Mr. Gascon said, I felt that if we would constitutionalize any provision
on service contracts, this should always be with the concurrence of Congress and
not guided only by a general law to be promulgated by Congress. Mr. Garcia
explained, Service contracts are given constitutional legitimization in Sec. 3, even
when they have been proven to be inimical to the interests of the nation,
providing, as they do, the legal loophole for the exploitation of our natural
resources for the benefit of foreign interests. Likewise,
Mr. Tadeo cited inter alia the fact that service contracts continued to subsist,
enabling foreign interests to benefit from our natural resources. It was hardly
likely that these gentlemen would have objected so strenuously, had the
provision called for mere technical or financial assistance and nothing more.
The deliberations of the ConCom and some commissioners explanation of
their votes leave no room for doubt that the service contract concept precisely
underpinned the commissioners understanding of the agreements involving either
technical or financial assistance.
x x x x
From the foregoing, we are impelled to conclude that the

phrase agreements involving either technical or financial assistance, referred to in
paragraph 4, are in fact service contracts. But unlike those of the 1973 variety,
the new ones are between foreign corporations acting as contractors on the one
hand; and on the other, the government as principal or owner of the works. In the
new service contracts, the foreign contractors provide capital, technology and
technical know-how, and managerial expertise in the creation and operation of
large-scale mining/extractive enterprises; and the government, through its
agencies (DENR, MGB), actively exercises control and supervision over the
entire operation.
x x x x
It is therefore reasonable and unavoidable to make the following

conclusion, based on the above arguments. As written by the framers and ratified
and adopted by the people, the Constitution allows the continued use of service
contracts with foreign corporations -- as contractors who would invest in and
operate and manage extractive enterprises, subject to the full control and
supervision of the State -- sans the abuses of the past regime. The purpose is
clear: to develop and utilize our mineral, petroleum and other resources on a large
scale for the immediate and tangible benefit of the Filipino people.[58]

WHEREFORE, the instant petition for prohibition and mandamus is hereby
DISMISSED. Section 76 of Republic Act No. 7942 and Section 107 of DAO 96-40;
Republic Act No. 7942 and its Implementing Rules and Regulations contained in
DAO 96-40 insofar as they relate to financial and technical assistance agreements
referred to in paragraph 4 of Section 2 of Article XII of the Constitution are NOT
UNCONSTITUTIONAL.

SO ORDERED.

MINITA V. CHICO-NAZARIO
Associate Justice

WE CONCUR:
Chief Justice
Chairperson
CONSUELO YNARES-SANTIAGO MA. ALICIA AUSTRIA-MARTINEZ


ROMEO J. CALLEJO, SR.
Associate Justice

CERTIFICATION

Pursuant to Article VIII, Section 13 of the Constitution, it is hereby certified that
the conclusions in the above Decision were reached in consultation before the
Chief Justice
[1]
Rollo, pp. 595-596.
[2]
Velarde v. Social Justice Society, G.R. No. 159357, 28 April 2004, 428 SCRA 283, 291.
[3]
PHILIPPINE POLITICAL LAW, Isagani Cruz, p. 23 (1995 ed.).
[4]
Article VIII, Section 1.xxx Judicial power includes the duty of the courts of justice to settle actual controversies
involving rights which are legally demandable and enforceable, and to determine whether or not there has
been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or
instrumentality of the Government.
[5]
Guingona, Jr. v. Court of Appeals, 354 Phil. 415, 425 (1998).
[6]
Board of Optometry v. Hon. Colet, 328 Phil. 1187, 1206 (1996).
[7]
Intregrated Bar of the Philippines v. Zamora, 392 Phil. 618, 632-633 (2000).
[8]
Dumlao v. Commission on Elections, G.R. No. L-52245, 22 January 1980, 95 SCRA 392, 402.
[9]
Integrated Bar of the Philippines v. Zamora, supra note 7, p. 633.
[10]
Ermita-Malate Hotel and Motel Operators Association, Inc. v. City Mayor of Manila, 128 Phil. 473, 480-481
(1967).
[11]
Cruz v. Secretary of Environment & Natural Resources, G.R. No. 135385, 6 December 2000, 347 SCRA 128,
256.
[12]
391 Phil. 84 (2000).
[13]
Id., p. 107.
[14]
La Bugal-BLaan Tribal Association, Inc. v. Ramos, G.R. No. 127882, 27 January 2004, 421 SCRA 148, 179.
[15]
157 Phil. 329, 344 (1974). It defines taking under the concept of eminent domain as entering upon private
property for more than a momentary period, and, under the warrant or color of legal authority, devoting it
to a public use, or otherwise informally appropriating or injuriously affecting it in such a way as
substantially to oust the owner and deprive him of all beneficial enjoyment thereof.
[16]
G.R. No. 60077, 18 January 1991, 193 SCRA 1, 7.
[17]
Robern Development Corporation v. Quitain, 373 Phil. 773, 792-793 (1999).
[18]
U.S. v. Toribio, 15 Phil. 85, 93 (1910); Rubi v. The Provincial Board of Mindoro, 39 Phil. 660, 708 (1919).
[19]
Association of Small Landowners of the Philippines, Inc. v. Secretary of Agrarian Reform, G.R. No. 78742, 14
July 1989, 175 SCRA 343, 371.
[20]
U.S. v. Toribio, supra note 18, p. 370.
[21]
People v. Chan, 65 Phil. 611 (1938).
[22]
Supra note 18, p. 97.
[23]
90 Phil. 132 (1951).
[24]
56 Phil. 204 (1931).
[25]
THE 1987 CONSTITUTION OF THE REPUBLIC OF THE PHILIPPINES: A COMMENTARY, Bernas, p.
420.
[26]
Id.
[27]
Id., p. 421.
[28]
Id.
[29]
Id.
[30]
207 Phil. 648 (1983).
[31]
104 Phil. 443 (1958).
[32]
THE 1987 CONSTITUTION OF THE REPUBLIC OF THE PHILIPPINES, supra note 24, p. 422.
[33]
CONSTITUTIONAL LAW, Cruz, p. 66 (1995 ed.).
[34]
9 Phil. 215, 221 (1907).
[35]
Supra note 16.
[36]
136 Phil. 20 (1969).
[37]
Id., pp. 29-30.
[38]
Supra note 15, pp. 345-347.
[39]
Valera v. Tuason, Jr., 80 Phil. 823, 827 (1998).
[40]
United States v. Palacio, 33 Phil. 208, 216 (1916).
[41]
Id.
[42]
Heirs of Juancho Ardona v. Reyes, 210 Phil. 187, 197 (1983).
[43]
Id.
[44]
Id., p. 198.
[45]
Executive Order No. 211.
[46]
Supra note 42.
[47]
Id., p. 201.
[48]
La Bugal-BLaan Tribal Association, Inc. v. Ramos, G.R. No. 127882, 1 December 2004, 445 SCRA 1, 228.
[49]
Id., p. 150.
[50]
G.R. No. L-59603, 29 April 1987, 149 SCRA 305, 312.
[51]
Section 211 of DAO 96-40 provides: The decision of the Board may be reviewed by filing a petition for review
with the Supreme Court within thirty (30) days from receipt of the order or decision of the Board.
[52]
Philippine Veterans Bank v. Court of Appeals, 379 Phil. 141, 147 (2000).
[53]
Id., p. 149.
[54]
Supra note 48, pp. 132-137.
[55]
Id., pp. 101-105.
[56]
Id.
[57]
Id.
[58]
Id., pp. 105-128.

Supreme Court
Manila
THIRD DIVISION

HEIRS OF SPOUSES CRISPULO G.R. NO. 190384
FERRER and ENGRACIA
PUHAWAN, represented by
ROMEO F. GAZA as Attorney-in-

Fact,

CARPIO MORALES, J., Chairperson,
- versus - BRION,
BERSAMIN,
ABAD,* and
VILLARAMA, JR., JJ.
THE HONORABLE COURT OF

APPEALS, NATIONAL POWER

CORPORATION, GUIDO ALFREDO
DELGADO, FERNANDO ROXAS,
ALBERTO PANGCOG, SAMUEL

PIEDAD, GREGORIO ALVAREZ,
RAFAEL LAGOS, AUGUSTO GO,
NAPOLEON EUFEMIO, MELITO

SALAZAR, VIRGILIO ODI and
MEHOLK SADAIN,
Respondents. Promulgated:

July 5, 2010
x-------------------------------------------------------------------------------------------- x

RESOLUTION

BRION, J.:

Petitioners, the heirs of spouses Crispulo Ferrer and Engracia Puhawan, filed
a petition for certiorari[1] assailing the rulings[2] of the Court of Appeals (CA)
rendered in CA-G.R. CV No. 67923. The Court, acting through its Second
Division, denied the certiorari petition through a Resolution dated January 18,
2010,[3] which the petitioners sought to be reconsidered of on March 17, 2010.[4] In
a Resolution dated April 21, 2010,[5] the Court denied the petitioners motion and
reiterated the dismissal of the certiorari petition. Petitioners now request leave
from the Court to file a second motion for reconsideration.[6]

Brief Background

The present case arose from an injunction suit[7] instituted by the petitioners
against respondent National Power Corporation (Napocor). Petitioners sought to
enjoin Napocor from selling the Caliraya Hydroelectric Power Plant, as they
claimed ownership over portions of the land where the power plant stood,
specifically Lot 1873 and Lot 72.[8] Additionally, the petitioners
demanded payment of damages from Napocor as rentals for the use and
occupation of the lots since 1936 the year Napocor first occupied the lot and began
construction of the power plant.

Napocor denied the petitioners allegations and claimed it acquired portions
of Lot 1873[9] through purchase from the petitioners half sister, Oliva Ferrer. The
sale was evidenced by two deeds dated August 31, 1940[10] and March 4, 1948,
both duly notarized and registered under Act No. 3344 (System of Registration for
Unregistered Real Estate). As for Lot 72, Napocor claimed that its right to occupy
and use the lot stemmed from the Right of Way Agreement executed in its favor by
the petitioners predecessors on April 22, 1940. The encumbrance was annotated on
the title covering Lot 72.[11]

The petitioners opposed Napocors claims and contended that the sale of
portions of Lot 1873 between Napocor and Oliva Ferrer was void. They alleged
that Oliva Ferrer was a co-heir who owned, in common with the petitioners, Lot
1873 a fact clearly indicated in both deeds of sale covering Lot 1873.[12] As a co-
heir, Oliva Ferrer inherited only 3,129.93 square meters of Lot 1873,[13] and the
sale to Napocor of an area in excess of this amount without authority from the
other co-owners was, according to the pe`titioners, void. To further support their
claim of ownership, the petitioners presented a Certification dated January 26,
1978, issued by the Bureau of Lands, stating that Lot 1873 was claimed by and
surveyed for Crispulo Ferrer. They also relied on Original Certificate of Title
(OCT) Nos. P-3898 and P-3899 issued on September 25, 1977 in the name of
Emiliano Ferrer, son of Crispulo Ferrer and Engracia Puhawan and one of the
petitioners herein.

On March 15, 2000, the Regional Trial Court (RTC) issued a decision,
[14]
dismissing the petitioners action for injunction and damages
after finding their claims over Lot 1873 and Lot 72 insufficient.[15]

The trial court ruled that the petitioners failed to present convincing proof of
their claim of ownership of Lot 1873; other than the Bureau of Lands certificate,
which by itself was not a proof of ownership, the petitioners had nothing to support
their claim. In contrast, Napocor was able to present two deeds of sale covering
29,598 square meters of Lot 1873, which were duly notarized and registered under
Act No. 3344. The RTC also took cognizance of the fact that Napocor has been in
possession of Lot 1873 and constructed numerous structures thereon since
1936. Thus, it found it ridiculous for petitioners or their predecessors not to raise a
restraining hand or shout of protest during Napocors long occupation and use of
the lot.[16]

As for Lot 72, the RTC found that the certificate of title covering the lot
contained an entry dated May 20, 1940, referring to an instrument dated April 22,
1940, by virtue of which the heirs of Bernabe Puhawan (which included Engracia
Puhawan, one of the petitioners predecessors) granted Napocor a right of way over
the lot. The entry was further classified as a waterway, an intake road, and a right
of way, making the easement a legal encumbrance under Section 44 of Presidential
Decree No. 1529[17] or the Property Registration Decree. In the absence of proof
that this has been cancelled, the RTC said that the easement should be
respected. Moreover, the RTC also found that Lot 72 had already been acquired by
Hilaria and Victoria Puhawan through a deed of extrajudicial partition of Bernabe
Puhawans estate executed on November 3, 1939. Hence, the petitioners, as heirs of
Engracia Puhawan, have no legal claim over Lot 72.[18]

The petitioners assailed the RTC decision through a petition
for certiorari filed with the CA. The CA found no reason to reverse the trial
courts decision and accordingly affirmed it through its decision of May 12,
2009.[19] The CA likewise found unmeritorious the petitioners motion for
reconsideration and denied it through its resolution of October 23, 2009,[20] a
copy of which was received by petitioners on November 3, 2009. Thirty-eight days
later, on December 11, 2009, the petitioners filed with the Court a petition
for certiorari under Rule 65 of the Rules of Court. Rejecting the petitioners
arguments, we denied the petition and denied the subsequent motion for
reconsideration in our Resolutions of January 18, 2010 and April 21, 2010,
respectively.

Procedurally, the Court found that the petitioners, by resorting to
a certiorari petition, erred in choosing the legal remedy against the CA rulings. We
noted that the errors the petitioners raised were errors of law rather than errors of
jurisdiction, since [t]he gist of [the] petitioners objections to the CA ruling was the
appellate courts failure to appreciate their arguments and evidence in support of
their claims, but this does not amount to an error of jurisdiction. A certiorari writ
will not be issued to cure errors by the lower court in its appreciation of the
evidence, its conclusions anchored on the said findings, and its conclusions of
law. As long as the court acts within its jurisdiction, any alleged errors committed
in the exercise of its discretion will amount to nothing more than mere errors of
judgment, correctible by an appeal x x x [by] certiorari filed under Rule 45 [of the
Rules of Court].[21] We considered the resort to a certiorari petition under Rule
65 as a disingenuous move to circumvent the rule on the period for filing an
appeal by certiorari under Rule 45 which allows only 15 days from notice of
the judgment appealed from to file an appeal. As the petition was filed 38 days
after receipt of the assailed CA resolution denying the motion for
reconsideration, the petitioners used the certiorari petition as a substitute for
the lost appeal, a move the Court has consistently reproved.

Despite these procedural lapses, the Court nevertheless reviewed the merits
of the petitioners case, but as the RTC and the CA did, found nothing to support
the petitioners claims. In seeking to enjoin Napocor from selling Lot 1873 and to
claim damages for the use and occupation thereof, the petitioners relied on their
claim of ownership which they contended was sufficiently proved by (1) the
certification from the Bureau of Lands showing that their predecessor, Crispulo
Ferrer, was a survey claimant, and (2) the OCTs covering the lot in the name of co-
petitioner Emiliano Ferrer. We rejected these claims by ruling that:

The Bureau of Lands Certification] did not adequately establish their right
to Lot 1873. All that the Certification proved was that Crispulo Ferrer was a
survey claimant. The purpose of a survey plan is simply to identify and delineate
the extent of the land. A survey plan, even if approved by the Bureau of
Lands, is not a proof of ownership of the land covered by the plan.Even
though the OCTs in Emiliano Ferrers name covering portions of Lot 1873 were
never contested, the CA found that the portions of land covered by his
certificates of title were not those on which Napocors power plant stood.[22]

We further ruled that any objection the petitioners might have against the sale
of Lot 1873 between Napocor and Oliva Ferrer has already been barred by the
principle of laches.We explained:

From 1936 when Napocor began construction of the power plant up to 1997 when
the action for injunction and damages was instituted, the petitioners made no
move to assert their claim over Lot 1873; for 61 long years, the petitioners have
slept on their rights, but now ironically demand vigilance on the Courts part to
protect their rights.[23]

As for Lot 72, we declared that:

[T]he CA correctly pointed out that the petitioners never took any issue with the
RTCs ruling concerning the parties rights over [this lot]; the petitioners devoted
most of their time discussing their claims over Lot 1873. At any rate, the parties
rights with respect to these lots [this lot] have been carefully considered and
resolved by the RTC and CA, and we agree with their findings and conclusions
[that Napocors easement rights over Lot 72 subsists].[24]

Insisting that they have a rightful claim over Lot 1873 and Lot 72, the petitioners
now request leave to file a second motion for reconsideration.

Petitioners Second Motion for Reconsideration

The petitioners insist that they have a better claim than Napocor over Lot 1873
and Lot 72. Believing that they have a strong and meritorious case against
Napocor, the petitioners contend that the interest of justice should override the
application of procedural rules and the principle of laches.

In support of their claim over Lot 1873, the petitioners reiterate the same
allegations and arguments they raised before the RTC and the CA (specifically, the
Bureau of Lands certificate in Crispulo Ferrers name). They also contend that they
have acquired ownership over Lot 1873 through prescription, as their predecessors
have taken possession of and occupied the lot since 1916. By the time Napocor
purportedly purchased the lot from Oliva Ferrer in 1940 and 1948, the petitioners
have already acquired ownership over Lot 1873 through extraordinary acquisitive
prescription for over 30 years under Article 1137 of the Civil Code.

Additionally, the petitioners challenge the CAs finding that they never raised any
objection concerning Lot 72 before the CA. They point to the memorandum they
filed before the CA where they alleged that despite the grant of a right of way,
Napocor used an area that was more than what was granted to it by the petitioners
predecessors. By alleging this matter, the petitioners claim to have timely raised
the issue of whether Napocor should pay damages by way of rentals for the use and
occupation of areas of Lot 72 in excess of what was granted to it.

The Courts Ruling

We DENY the requested leave to file a second motion for reconsideration.

Section 3, Rule 15 of the Internal Rules of the Supreme Court (IRSC) sets
forth the rule when the Court may entertain a second motion for
reconsideration. The rule states:

Sec. 3. Second motion for reconsideration. The Court shall not entertain a
second motion for reconsideration, and any exception to this rule can only be
granted in the higher interest of justice by the Court en banc upon a vote of at
least two-thirds of its actual membership. There is reconsideration in the higher
interest of justice when the assailed decision is not only legally erroneous, but is
likewise patently unjust and potentially capable of causing unwarranted and
irremediable injury or damage to the parties. A second motion for reconsideration
can only be entertained before the ruling sought to be reconsidered becomes final
by operation of law or by the Courts declaration.

In the Division, a vote of three Members shall be required to elevate a
second motion for reconsideration to the Court En Banc.

Aside from meeting the voting requirements, a movant is required by the IRSC to
substantially show that a reconsideration of the Courts ruling is necessary in the
higher interest of justice, which standard is satisfied upon proving that the assailed
ruling is both (1) legally erroneous and (2) patently unjust and potentially capable
of causing unwarranted and irremediable injury or damage to the parties.

In this case, petitioners reasons do not sufficiently establish that a reversal of
the Courts ruling will serve the higher interest of justice. On the contrary, for the
Court to consider and find meritorious the petitioners argument will mean
abandoning settled principles of law to accommodate the petitioners stale and
clearly unsubstantiated claims.

The petitioners insist that the Bureau of Lands certificate, stating that their
predecessor Crispulo Ferrer was a survey claimant of the property covered by
Cadastral Survey No. 90 of Lumban, Laguna, sufficiently establishes their claim
over Lot 1873, despite our consistent ruling that the certificate is no proof of title
of ownership over the property.

A survey made in a cadastral proceeding merely identifies each lot preparatory to a
judicial proceeding for adjudication of title to any of the lands upon claim of
interested parties.[25] The purpose of a survey plan is simply to identify and
delineate the extent of the land.[26] It is not a proof of ownership of the land covered
by the plan.[27] In the present case, the petitioners were not even able to present the
actual survey plan approved by the Bureau of Lands; all that they relied on was the
Bureau of Lands certificate that proved nothing more beyond than what was
expressly stated therein: that Lot 1873 is in the name of Crispulo Ferrer, as a
survey claimant.

Notably, nothing in the certificate indicated whether Crispulo Ferrer was
actually in possession of Lot 1873 or for how long he had been in possession
thereof. We find the matter and duration of the petitioners and their predecessors
possession relevant in view of the petitioners contention that they acquired
ownership of Lot 1873 through prescription, i.e., the lapse of the requisite 30-year
period provided in Article 1137 of the Civil Code. Article 1137 states:

Article 1137. Ownership and other real rights over immovables also
prescribe through uninterrupted adverse possession thereof for thirty years,
without need of title or of good faith.

The petitioners reliance on Article 1137 of the Civil Code is not entirely
accurate. The petitioners alleged that Lot 1873 is an alienable and disposable land
of the public domain. However, acquisition of ownership over alienable public
lands is governed, not by the general provisions on prescription in the Civil Code,
but more particularly, by Commonwealth Act No. 141 (CA 141) or the Public Land
Act. Article 1137 of the Civil Code authorizes acquisition by prescription only of
private lands, not of public lands even though these may have been decreed as
alienable and disposable.

Alienable and disposable lands of the public domain may be acquired by
private persons, not by virtue of prescription but, through adverse possession, upon
compliance with the requirements of Section 48(b) of CA 141, which states:
Sec. 48. The following described citizens of the Philippines, occupying

lands of the public domain or claiming to own any such lands or an interest
therein, but whose titles have not been perfected or completed, may apply to the
Court of First Instance of the province where the land is located for confirmation
of their claims and the issuance of a certificate of title therefor, under the Land
Registration Act, to wit:
x x x x
(b) Those who by themselves or through their predecessors in interest

have been in open, continuous, exclusive, and notorious possession and
occupation of alienable and disposable lands of the public domain, under
a bona fide claim of acquisition of ownership, since June 12, 1945, or earlier,
immediately preceding the filing of the application for confirmation of title except
when prevented by war or force majeure. These shall be conclusively presumed to
have performed all the conditions essential to a Government grant and shall be
entitled to a certificate of title under the provisions of this chapter.

Verily, it is not the mere lapse of time that vests title over the land to the claimant;
it is also necessary that the land be an alienable and disposable land of the public
domain and that the claimant be in open, continuous, exclusive, and notorious
possession of the land. Listed down, the acquisition through adverse possession of
public lands requires the following:

1. the land applied for must be an alienable and disposable public land; and
2. the claimants, by themselves or through their predecessors-in-interest,
have been in open, continuous, exclusive, and notorious possession and
occupation of the land since June 12, 1945 or earlier.[28]

Upon an exhaustive review of the records and a thorough evaluation of the
petitioners allegations and arguments, we are unconvinced that the petitioners have
satisfied these requirements.

First, no conclusive proof appears in the records showing that Lot 1873 has
been officially decreed to be an alienable and disposable public land at the time the
petitioners predecessors supposedly occupied the lot in 1916 or at anytime
thereafter. That petitioners predecessor, Crispulo Ferrer, was a claimant and,
purportedly, had a survey plan of Lot1873 does not necessarily imply that the lot
is an alienable land.[29]

Second, we similarly found nothing in the records that would support the
petitioners allegation that their predecessors had occupied Lot 1873 since 1916 or
at anytime before the cut-off date of June 12, 1945. As mentioned, the Bureau of
Lands certificate, issued on January 26, 1978, simply stated that Crispulo Ferrer
was a survey claimant of Lot 1873, without indicating the nature and duration of
his possession. The requirement of an open, continuous, exclusive, and notorious
occupation of alienable public land must be conclusively established to avoid the
erroneous validation of actually fictitious claims of possession over the property.[30]

Even supposing that the petitioners, through their predecessors, have held
possession of Lot 1873 since 1916, this condition only works to their
disadvantage. As early as 1936, Napocor occupied portions of Lot 1873 and began
construction of the power plant. On May 30, 1940,[31] Oliva Ferrer granted Napocor
the right of way over the lot. Then, on August 31, 1940 and March 4, 1948, she
sold portions of the lot to Napocor. In all of these instances, no word of protest was
heard from the petitioners and their predecessors, at least until April 1997, when
they demanded payment of rent from Napocor for the use and occupation
of Lot 1873. The petitioners inaction establishes the fact that they were never in
open, continuous, exclusive, and notorious possession of Lot 1873. More
importantly, the petitioners inaction from 1936 to 1997, or for 61 long years,
makes the application of the principle of laches more than justified to defeat their
claim over Lot 1873.

The application of the principle of laches requires the presence of the following
elements all of which are present in this case:
(1) conduct on the part of the defendant, or of one under whom he claims, giving
rise to the situation of which complaint is made and for which the complainant
seeks a remedy;
(2) delay in asserting the complainants right, the complainant having had
knowledge or notice, of defendants conduct and having been afforded an
opportunity to institute a suit;
(3) lack of knowledge or notice on the part of the defendant that the complainant
would assert the right on which he bases his suit; and
(4) injury or prejudice to the defendant in the event relief is accorded to the
complainant, or the suit is not held to be barred.[32]
Napocor executed acts that were contrary to the petitioners asserted claim of
ownership over Lot 1873, yet until 1997, the petitioners made no move to vindicate
their claimed right and resist Napocors intrusion. Napocor certainly could not be
blamed if it considered itself the true owner of Lot 1873 and expected no adverse
claims thereto, as it had acquired the lot by purchase as early as 1940 and had
constructed numerous structures ther eon. To recognize the petitioners belated and
legally baseless claim over Lot 1873 would mean requiring Napocor to pay rentals
and interest from 1936 to the present, a move that could possibly bleed Napocors
coffers dry to the detriment of the public. Vigilantibus et non dormientibus jura
subveniunt the laws serve the vigilant, not those who sleep. Quoting the Courts
ruling in Vda. de Rigonan v. Derecho, our resolution of April 21, 2010 said:
x x x The Court aptly stated in Miguel v. Catalino:
Courts cannot look with favor at parties who, by their

silence, delay, and inaction, knowingly induce another to spend
time, effort, and expense in cultivating the land, paying taxes and
making improvements thereon x x x only to spring from ambush
and claim title when the possessors efforts and the rise of land
values offer an opportunity to make easy profit at his expense.
To grant respondents relief when they have not even offered any
justifiable excuse for their inaction would be unjust. It is certainly beyond our
comprehension how they could have remained silent for more than 50
years. They have only themselves to blame if the Court at this late hour can
no longer afford them relief against the inequities they allegedly suffered.[33]

The principle of laches applies with equal force to defeat the petitioners claim
over Lot 72 which was occupied by Napocor way back in 1937. Also, we find no
reason to disagree with the RTCs finding that Lot 72 had already been adjudicated
in favor of, and for which the property was in fact titled in the names of, Hilaria
and Victoria Puhawan. As the heirs of Engracia Puhawan, the petitioners likewise
have no valid claim over Lot 72.

The essence of the Courts adjudicatory function is to apply the law to facts, as
supported by the evidence and the records. The petitioners have already exhausted
all possible legal arguments and, as we have discussed, none of which are
compelling enough to require reconsideration of our past ruling. To be sure,
repetitive filing of legally useless submissions cannot pressure this Court into
taking another look at an unmeritorious case; they can only increase the petitioners
legal expenses, as in this case, where we are ordering the payment of double costs
for the act of unnecessarily and stubbornly wasting the Courts time.
WHEREFORE, we DENY the petitioners motion for leave to file a second
motion for reconsideration of our April 21, 2010 Resolution. We hereby declare
our Resolutions of January 18, 2010 and April 21, 2010 final and executory. No
further pleadings shall be entertained. We accordingly direct that entry of judgment
be immediately made. Double costs against petitioners.

SO ORDERED.

ARTURO D. BRION
Associate Justice

WE CONCUR:

Associate Justice
Chairperson

LUCAS P. BERSAMIN ROBERTO A. ABAD

Associate Justice
ATTESTATION

I attest that the conclusions in the above Resolution had been reached in
Courts Division.

Associate Justice
Chairperson

CERTIFICATION
above Resolution had been reached in consultation before the case was assigned to
the writer of the opinion of the Courts Division.

RENATO C. CORONA
Chief Justice
*
Designated additional Member of the Third Division effective May 17, 2010, per Special Order No. 843 dated May
17, 2010.
[1]
Under Rule 65 of the Rules of Court; rollo, pp. 3-25.
[2]
Referring to the CA decision dated May 12, 2009 (id. at 30-46) and the resolution dated October 23, 2009 (id. at
89-91); penned by Associate Justice Rosalinda Asuncion-Vicente, and concurred in by Associate Justice Portia
Alino-Hormachuelos and Associate Justice Myrna Dimaranan Vidal.
[3]
Id. at 179-180.
[4]
Id. at 181-191.
[5]
Id. at 214-224.
[6]
Id. at 226-236.
[7]
Civil Case No. SC-3604; id. at 92-97.
[8]
The petitioners were also claiming ownership rights over a third lot, Lot 90. Napocor admitted occupying portions
of Lot 90, in excess of the areas it` purchased. Thus, the RTC ordered Napocor to pay the reasonable value of the
excess areas occupied by it, determined after a survey of Lot 90. Both parties did not contest the RTCs ruling
insofar as Lot 90 was concerned; id. at 124.
[9]
Lot 1873 has a total land area of 50,079 square meters; Napocor bought 29,598 square meters. Id. at 93.
[10]
Id. at 208-210.
[11]
Id. at 123.
[12]
Id. at 208.
[13]
Crispulo Ferrer left behind eight heirs who, the petitioners claimed, were each entitled to inherit 3,129.93 square
meters of Lot 1873; id. at 9-10.
[14]
Penned by Judge Leonardo L. Leonida; id. at 117-124.
[15]
The dispositive portion of the RTCs decision of March 15, 2000 read:

WHEREFORE, premises considered, judgment is hereby rendered:

1. Denying the petition for preliminary injunction;
2. Dismissing the action for damages;
3. Ordering the defendants to pay the plaintiffs the reasonable value of the excess area occupied by
[Napocor] in lot 90[,] estimated to be [438] square meters or such excess area as may be
determined through a survey of lot 90.

SO ORDERED. Id. at 124.
[16]
Id. at 122.
[17]
Sec. 44 Every registered owner receiving a certificate of title in pursuance of a decree of registration, and every
subsequent purchaser of registered land taking a certificate of title for value and in good faith, shall hold the same
free from all encumbrances except those noted on said certificate and any of the following encumbrances which may
be subsisting, namely:
xxx
Third. Any public highway or private way established or recognized by law[.]
[18]
Rollo, p. 123.
[19]
Supra note 2.
[20]
Ibid.
[21]
Rollo, pp. 219-220.
[22]
Id. at 221.
[23]
Id. at 222.
[24]
Id. at 223.
[25]
Republic v. Intermediate Appellate Court, 239 Phil. 393, 402 (1987).
[26]
Director of Lands v. Reyes, 160A Phil. 832 (1975).
[27]
See Gimeno v. CA, 170 Phil. 645 (1977); Heirs of Marina Regalado v. Republic, G.R. No. 168155, February 15,
2007, 516 SCRA 38.
[28]
Republic v. Divinaflor, 402 Phil. 498, 507-508 (2001), citing Republic v. CA, 235 SCRA 567 (1994).
[29]
Republic v. CA, 238 Phil. 429 (1987).
[30]
San Miguel Corporation v. CA, G.R. No. L-49903, February 21, 1983, 120 SCRA 734, 735.
[31]
Rollo, p. 120.
[32]
Claverias v. Quingco, G.R. No. 77744, March 6, 1992, 207 SCRA 66, 83.
[33]
502 Phil. 202, 229-230 (2005).

Supreme Court
Manila

SECOND DIVISION

FELICITAS M. MACHADO and G.R. No. 156287
MARCELINO P. MACHADO,
Petitioners,
Present:


CARPIO MORALES,*
- versus -
BRION,

ABAD, and

PEREZ, JJ.
RICARDO L. GATDULA,

COMMISSION ON THE SETTLEMENT
OF LAND PROBLEMS, and IRINEO S. Promulgated:
PAZ, Sheriff IV, Office of the

Provincial Sheriff, San Pedro,
Laguna, February 16, 2010
Respondents.
x---------------------------------------------------------------------------------------------------------x
DECISION

BRION, J.:

Before this Court is the Petition for Review on Certiorari[1] filed by

petitioners Felicitas M. Machado and Marcelino P. Machado (the Machados),
assailing the decision[2]of the Court of Appeals (CA) dated January 31, 2002 and
the resolution[3] dated December 5, 2002 in CA-G.R. SP No. 65871. The CA
decision dismissed the Machados petition for certiorari and their motion for
reconsideration, and upheld the jurisdiction of the Commission on Settlement of
Land Problems (COSLAP) to render judgment over a private land and to issue the
corresponding writs of execution and demolition.

THE FACTUAL ANTECEDENTS

The dispute involves two adjoining parcels of land located in Barangay San

Vicente, San Pedro, Laguna, one belonging to the Machados, and the other
belonging to respondent Ricardo L. Gatdula (Gatdula).
On February 2, 1999, Gatdula wrote a letter[4] to the COSLAP requesting

assistance because the Machados allegedly blocked the right of way to his private
property by constructing a two-door apartment on their property.
Acting on Gatdulas letter, the COSLAP conducted

a mediation conference on February 25, 1999; the parties then agreed to have a
verification survey conducted on their properties and to share the attendant
expenses. Thereafter, the COSLAP issued an Order dated March 16, 1999 directing
the Chief of the Survey Division of the Community Environment and Natural
Resources Office Department of Environment and Natural Resources (CENRO-
DENR), to conduct a verification survey on May 9, 1999. The order likewise stated
that in the event that no surveyor is available, the parties may use the services of
a private surveyor, whom the CENRO-DENR Survey Division would deputize.
As scheduled, a private surveyor, Junior Geodetic Engineer Abet F. Arellano

(Engr. Arellano), conducted a verification survey of the properties in the presence
of both parties. Engr. Arellano submitted a report to the COSLAP finding that the
structure built by the Machados encroached upon an alley found within the
Gatdula property. Engr. Arellanos findings corroborated the separate report of
Engineer Noel V. Soqueco of the CENRO, Los Baos, Laguna that had also been
submitted to the COSLAP.
The Machados contested these reports in their position paper dated August

26, 1999. They alleged that Gatdula had no right of action since they did not
violate Gatdulas rights.[5] They further assailed the jurisdiction of the COSLAP,
stating that the proper forum for the present case was the Regional Trial Court of
San Pedro, Laguna.
The COSLAP Ruling
On October 25, 1999, the COSLAP issued a resolution[6] (October 25, 1999 COSLAP
Resolution) directing the Machados to reopen the right of way in favor of
Gatdula. In so ruling, the COSLAP relied on the verification survey made by Engr.
Arellano, which established that the Machados had encroached on the existing
alley in Gatdulas property.
The COSLAP declared the Machados estopped from questioning its jurisdiction to
decide the case, since they actively participated in the mediation conferences and
the verification surveys without raising any jurisdictional objection. It ruled that
its jurisdiction does not depend on the convenience of the Machados.
The Machados filed a motion for reconsideration which the COSLAP denied in a
resolution dated January 24, 2000.
On February 18, 2000, the Machados filed a notice of appeal[7] with the Office of
the President (OP).

While this appeal was pending, the COSLAP, upon Gatdulas motion, issued
a writ of execution[8] enforcing the terms of the October 25, 1999 COSLAP
Resolution. The Machados opposed the writ by filing a motion to quash on March
30, 2001.[9] They argued that the October 25, 1999 COSLAP Resolution was not yet
ripe for execution in view of the pending appeal before the OP.

Since the Machados persistently refused to reopen the right of way they
closed, the provincial sheriff recommended to COSLAP the issuance of a writ of
demolition. The COSLAP issued the writ of demolition[10] on July 12, 2001.
The CA Ruling
On July 31, 2001, the Machados went to the CA for relief through a Petition
for Certiorari and Prohibition,[11] claiming that the COSLAP issued the writs of
execution and demolition with grave abuse of discretion.
The CA found the Machados claim unfounded and, accordingly, dismissed their
petition in its decision of January 31, 2002.[12] It declared that the COSLAP
correctly issued the assailed writs because the October 25, 1999 COSLAP
Resolution had already become final and executory for failure of the Machados to
avail of the proper remedy against the COSLAP
[13]
orders and resolutions. Under Section 3 (2) of Executive Order No. 561 (EO
561), the resolutions, orders, and decisions of the COSLAP become final and
executory 30 days after promulgation, and are appealable by certiorari only to the
Supreme Court. In Sy v. Commission on the Settlement of Land Problems,[14] it was
held that under the doctrine of judicial hierarchy, the orders, resolutions and
decisions of the COSLAP, as a quasi-judicial agency, are directly appealable to the
CA under Rule 43 of the 1997 Rules of Civil Procedure, and not to the Supreme
Court. Thus, the CA ruled that the Machados appeal to the OP was not the proper
remedy and did not suspend the running of the period for finality of the October
25, 1999 COSLAP Resolution.

On the issue of jurisdiction, the CA found that the COSLAP was created to provide
a more effective mechanism for the expeditious settlement of land problems, in
general; the present case, therefore, falls within its jurisdiction.[15] Moreover, the
Machados active participation in the mediation conference and their consent to
bring about the verification survey bound them to the COSLAPs decisions, orders
and resolutions.
From this CA decision, the Machados filed a motion for reconsideration,[16] which

the CA subsequently denied in its Resolution of December 5, 2002.[17]
The Machados thus filed the present Rule 45 petition with this Court,
raising two vital issues:
1. Whether the COSLAP has jurisdiction over Gatdulas complaint for right
of way against the Machados; and
2. Whether the COSLAP can validly issue the writs of execution and
demolition against the Machados.
THE COURTS RULING

We find the petition meritorious.

The COSLAP does not have jurisdiction over

the present case

In resolving the issue of whether the COSLAP has jurisdiction over the present
case, a review of the history of the COSLAP and an account of the laws creating
the COSLAP and its predecessor, the Presidential Action Committee on Land
Problems (PACLAP), is in order.
The COSLAPs forerunner, the PACLAP, was created on July 31, 1970 pursuant to
Executive Order No. 251. As originally conceived, the committee was tasked to
expedite and coordinate the investigation and resolution of land disputes,
streamline and shorten administrative procedures, adopt bold and decisive
measures to solve land problems, and/or recommend other solutions.
On March 19, 1971, Executive Order No. 305 was issued reconstituting the
PACLAP. The committee was given exclusive jurisdiction over all cases involving
public lands and other lands of the public domain,[18] and was likewise vested with
adjudicatory powers phrased in broad terms:

1. To investigate, coordinate, and resolve expeditiously land disputes,
streamline administrative proceedings, and, in general, to adopt bold and decisive
measures to solve problems involving public lands and lands of the public domain.
[19]
[emphasis supplied]
Thereafter, Presidential Decree No. 832 (PD 832)[20] was issued on November 27,
1975 reorganizing the PACLAP and enlarging its functions and duties. The decree
also granted PACLAP quasi-judicial functions. Section 2 of PD 832 states:

Section 2. Functions and duties of the PACLAP. The PACLAP shall have the
following functions and duties:

1. Direct and coordinate the activities, particularly the investigation work, of the
various government agencies and agencies involved in land problems or disputes, and
streamline administrative procedures to relieve small settlers and landholders and
members of cultural minorities of the expense and time-consuming delay attendant to
the solution of such problems or disputes;
2. Refer for immediate action any land problem or dispute brought to the
attention of the PACLAP, to any member agency having jurisdiction thereof:
Provided, That when the Executive Committee decides to act on a case, its resolution,
order or decision thereon shall have the force and effect of a regular administrative
resolution, order or decision, and shall be binding upon the parties therein involved
and upon the member agency having jurisdiction thereof;
xxxx
4. Evolve and implement a system of procedure for the speedy investigation and
resolution of land disputes or problems at provincial level, if possible. [emphasis
supplied]
The PACLAP was abolished by EO 561 effective on September 21, 1979, and was
replaced by the COSLAP. Unlike the former laws, EO 561 specifically enumerated
the instances when the COSLAP can exercise its adjudicatory functions:

Section 3. Powers and Functions. The Commission shall have the following powers and
functions:
xxxx
2. Refer and follow up for immediate action by the agency having appropriate
jurisdiction any land problem or dispute referred to the Commission: Provided, That the
Commission may, in the following cases, assume jurisdiction and resolve land
problems or disputes which are critical and explosive in nature considering, for
instance, the large number of the parties involved, the presence or emergence of
social tension or unrest, or other similar critical situations requiring immediate action:
(a) Between occupants/squatters and pasture lease agreement

holders or timber concessionaires;
(b) Between occupants/squatters and government reservation

grantees;
(c) Between occupants/squatters and public land claimants or

applicants;
(d) Petitions for classification, release and/or subdivision of lands of

the public domain; and
(e) Other similar land problems of grave urgency and magnitude.
The Commission shall promulgate such rules and procedures as will ensure
expeditious resolution and action on the above cases. The resolution, order or decision
of the Commission on any of the foregoing cases shall have the force and effect of a
regular administrative resolution, order or decision and shall be binding upon the
parties therein and upon the agency having jurisdiction over the same. Said resolution,
order or decision shall become final and executory within thirty (30) days from its
promulgation and shall be appealable by certiorari only to the Supreme Court.
[emphasis supplied]
Under these terms, the COSLAP has two different rules in acting on a land dispute
or problem lodged before it, e.g., COSLAP can assume jurisdiction only if the
matter is one of those enumerated in paragraph 2(a) to (e) of the law. Otherwise,
it should refer the case to the agency having appropriate jurisdiction for
settlement or resolution.[21] In resolving whether to assume jurisdiction over a
case or to refer it to the particular agency concerned, the COSLAP considers: (a)
the nature or classification of the land involved; (b) the parties to the case; (c) the
nature of the questions raised; and (d) the need for immediate and urgent action
thereon to prevent injury to persons and damage or destruction to property. The
terms of the law clearly do not vest on the COSLAP the general power to assume
jurisdiction over any land dispute or problem.[22] Thus, under EO 561, the
instances when the COSLAP may resolve land disputes are limited only to those
involving public lands or those covered by a specific license from the government,
such as pasture lease agreements, timber concessions, or reservation grants.[23]
Undisputably, the properties involved in the present dispute are private lands

owned by private parties, none of whom is a squatter, a patent lease agreement
holder, a government reservation grantee, a public land claimant or a member of
any cultural minority.[24]
Moreover, the dispute between the parties can hardly be classified as

critical or explosive in nature that would generate social tension or unrest, or a
critical situation that would require immediate and urgent action. The issues
raised in the present case primarily involve the application of the Civil Code
provisions on Property and the Easement of Right of Way. As held in Longino v.
General,[25] disputes requiring no special skill or technical expertise of an
administrative body that could be resolved by applying pertinent provisions of the
Civil Code are within the exclusive jurisdiction of the regular courts.
The Machados cannot invoke Section 3, paragraph 2(e) of EO 561, which provides
that the COSLAP may assume jurisdiction over complaints involving other similar
land problems of grave urgency, to justify the COSLAPs intervention in this
case. The statutory construction principle of ejusdem generic prescribes
that where general words follow an enumeration of persons or things, by words
of a particular and specific meaning, such general words are not to be construed
in their widest extent but are to be held as applying only to persons or things of
the same kind as those specifically mentioned.[26] A dispute between two parties
concerning the right of way over private lands cannot be characterized as similar
to those enumerated under Section 3, paragraph 2(a) to (d) of EO 561.
In Davao New Town Development Corporation v. Commission on the

Settlement of Land Problems[27] where we ruled that the COSLAP does not have
blanket authority to assume every matter referred to it we made it clear that its
jurisdiction is confined only to disputes over lands in which the government has a
proprietary or regulatory interest.
The CA apparently misread and misapplied the Courts ruling in Baaga v. Court of
Appeals.[28] Baaga involved two contending parties who filed free patent
applications for a parcel of public land with the Bureau of Lands. Because of the
Bureau of Lands failure to act within a reasonable time on the applications and to
conduct an investigation, the COSLAP decided to assume jurisdiction over the
case. Since the dispute involved a public land on a free patent issue, the COSLAP
undeniably had jurisdiction over the Baaga case.

Jurisdiction is conferred by law and a

judgment issued by a quasi-judicial body
without jurisdiction is void

By reason of the Machados active participation in the mediation conferences and

the COSLAP verification surveys, the CA declared the Machados estopped from
questioning the bodys jurisdiction and bound by its decisions, orders and
resolutions. We disagree with this ruling.
Jurisdiction over a subject matter is conferred by law and not by the parties action
or conduct.[29] Estoppel generally does not confer jurisdiction over a cause of
action to a tribunal where none, by law, exists. In Lozon v. NLRC,[30] we declared
that:

Lack of jurisdiction over the subject matter of the suit is yet another matter. Whenever
it appears that the court has no jurisdiction over the subject matter, the action shall be
dismissed. This defense may be interposed at any time, during appeal or even after final
judgment. Such is understandable, as this kind of jurisdiction is conferred by law and not
within the courts, let alone the parties, to themselves determine or conveniently set
aside. In People v. Casiano, this Court, on the issue of estoppel, held:

The operation of the principle of estoppel on the question of jurisdiction
seemingly depends upon whether the lower court actually had
jurisdiction or not. If it had no jurisdiction, but the case was tried and
decided upon the theory that it had jurisdiction, the parties are not
barred, on appeal, from assailing such jurisdiction, for the same must
exist as a matter of law, and may not be conferred by consent of the
parties or by estoppel However if the lower court had jurisdiction, and
the case was heard and decided upon a given theory, such, for instance,
as that the court had no jurisdiction, the party who induced it to adopt
such theory will not be permitted, on appeal, to assume an inconsistent
position that the lower court had jurisdiction. Here, the principle of
estoppel applies. The rule that jurisdiction in conferred by law, and does
not depend upon the will of the parties, has no bearing thereon.
[emphasis supplied]
In this case, the COSLAP did not have jurisdiction over the subject matter of
the complaint filed by Gatdula, yet it proceeded to assume jurisdiction over the
case and even issued writs of execution and demolition against the Machados.
The lack of jurisdiction cannot be cured by the parties participation in the
proceedings before the COSLAP.[31]Under the circumstances, the Machados can
rightfully question its jurisdiction at anytime, even during appeal or after final
judgment. A judgment issued by a quasi-judicial body without jurisdiction is void.
[32]
It cannot be the source of any right or create any obligation. All acts pursuant
to it and all claims emanating from it have no legal effect. The void judgment can
never become final and any writ of execution based on it is likewise void.[33]
WHEREFORE, premises considered, we GRANT the petition for review

on certiorari. The assailed Court of Appeals decision dated January 31, 2002 and
resolution dated December 5, 2002 in CA-G.R. SP No. 65871 are REVERSED and
SET ASIDE. The Decision of the Commission on the Settlement of Land Problems
dated October 25, 1999in COSLAP Case No. 99-59, as well as the writ of execution
dated March 21, 2001 and the writ of demolition dated July 12, 2001, are
declared NULL and VOID for having been issued without jurisdiction.
SO ORDERED.

ARTURO D. BRION
Associate Justice

WE CONCUR:

ANTONIO T. CARPIO
Associate Justice
Chairperson
CONCHITA CARPIO MORALES ROBERTO A. ABAD
JOSE PORTUGAL PEREZ
Associate Justice
ATTESTATION
Courts Division.

ANTONIO T. CARPIO
Associate Justice
Chairperson
CERTIFICATION
above Decision had been reached in consultation before the case was assigned
to the writer of the opinion of the Courts Division.

REYNATO S. PUNO
Chief Justice
*
Designated additional Member of the Second Division vice Associate Justice Mariano C. del Castillo per raffle
dated February 3, 2010.
[1]
Under Rule 45 of the Rules of Court; rollo, pp. 15-29.
[2]
Penned by Associate Justice Portia Alio-Hormachuelos, and concurred in by Associate Justice Eriberto U.
Rosario, Jr. and Associate Justice Mariano C. Del Castillo (now a member of this Court); id. at 42-53.
[3]
Id. at 55-58.
[4]
Id. at 59.
[5]
Id. at 60-67.
[6]
Id. at 68-73.
[7]
Id. at 74-82.
[8]
Id. at 85-86.
[9]
Id. at 87-89.
[10]
Id. at 90-91.
[11]
Under Rule 65 of the Rules of Court; id. at 92-103.
[12]
Supra note 2.
[13]
Section 3. Powers and Functions. The Commission shall have the following powers and functions:
2. Refer and follow-up for immediate action by the agency having appropriate jurisdiction any
land problem or dispute referred to the Commission: Provided, That the Commission may, in the
following cases, assume jurisdiction and resolve land problems or disputes which are critical and
explosive in nature considering, for instance, the large number of the parties involved, the
presence or emergence of social tension or unrest, or other similar critical situations requiring
immediate action:
(a) Between occupants/squatters and pasture lease agreement holders or timber
concessioners;
(b) Between occupants/squatters and government reservation grantees;
(c) Between occupants/squatters and public land claimants or applicants;
(d) Petitions for classification, release and/or subdivision of lands of the public
domain; and
(e) Other similar land problems of grave urgency and magnitude.
The Commission shall promulgate such rules and procedures as will ensure expeditious resolution
and action on the above cases. The resolution, order or decision of the Commission on any of
the foregoing cases shall have the force and effect of a regular administrative resolution,
order or decision and shall be binding upon the parties therein and upon the agency having
jurisdiction over the same. Said resolution, order or decision shall become final and executory
within thirty (30) days from its promulgation and shall be appealable by certiorari only to
the Supreme Court. [emphasis supplied]
[14]
417 Phil. 378 (2000).
[15]
Citing Baaga v. Commission on the Settlement of Land Problems, G.R. No. 66386, January 30, 1990, 181 SCRA
599.
16
Rollo, pp. 120-126.
17
Supra note 3.
[18]
The United Residents of Dominican Hill, Inc. v. Commission on the Settlement of Land Problems, 406 Phil. 354,
366 (2001).
[19]
Davao New Town Development Corporation v. Commission on the Settlement of Land Problems, 498 Phil. 530,
545 (2005).
[20]
Reorganizing the Presidential Action Committee on Land Problems.
[21]
Ga v. Spouses Tubungan, G.R. No. 182185, September 18, 2009.
[22]
Longino v. Atty. General, 491 Phil. 600, 621 (2005).
[23]
Barranco v. Commission on the Settlement of Land Problems, G.R. No. 168990, June 16, 2006, 491 SCRA
222, 235-236.
[24]
ADMINISTRATIVE CODE, Book IV, Title III, Chapter 11, Section 32 states:

Section 32. The Commission on the Settlement of Land Problems shall also be responsible for the
settlement of land problems involving small landowners and members of cultural minorities.
[25]
Supra note 22 at 619, citing Ty v. Court of Appeals, 408 Phil. 792 (2002).
[26]
Id. at 622, citing The United Residents of Dominican Hill, Inc. v. Commission on the Settlement of Land
Problems, 406 Phil. 354, 366 (2001).
[27]
[28]
G.R. No. 66386, January 30, 1990, 181 SCRA 599.
[29]
Spouses Vargas v. Spouses Caminas, G.R. Nos. 137839-40, June 12, 2008, 554 SCRA 305, 317; Metromedia
Times Corporation v. Pastorin, G.R. No. 154295, July 29, 2005, 465 SCRA 320, 335; Dy v. National Labor
Relations Commission, 229 Phil. 234, 242 (1986).
[30]
310 Phil. 1, 12-13 (1995), citing La Naval Drug Corporation v. Court of Appeals, 236 SCRA 78 (1994).
[31]
As earlier mentioned, the Machados, in fact, questioned the COSLAPs jurisdiction as early as the position paper
they filed questioning the COSLAP Report; rollo, p. 63.
[32]
National Housing Authority v. Commission on the Settlement of Land Problems, G.R. No. 142601, October 23,
2006, 505 SCRA 38, 43.
[33]
Supra note 21.

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WHEREFORE, premises considered, the petition is DENIED. The Court

[G.R. No. 127549. January 28, 1998]

SPOUSES CESAR and RAQUEL STA. MARIA and FLORCERFIDA STA.

Plaintiffs aforesaid Lot 124 is surrounded by Lot 1 (Psd 45412), a fishpond

On February 17, 1992, plaintiff spouses Fajardo filed a complaint against

Defendants, instead of filing an answer, filed a motion to dismiss (pp. 41-

In the meantime, defendants filed a petition for review on certiorari of the

WHEREFORE, premises considered the Court orders that a right-of-way be

WHETHER OR NOT A COMPULSORY EASEMENT OF RIGHT OF WAY

WHETHER OR NOT A COMPULSORY RIGHT OF WAY CAN BE

RESPONDENT HON. COURT OF APPEALS GRAVELY ERRED IN

RESPONDENT HON. COURT OF APPEALS SERIOUSLY ERRED IN

1. the dominant estate is surrounded by other immovables and has no

2. there is payment of proper indemnity (Art. 649, par. 1);

4. the right of way claimed is at the point least prejudicial to the

As to such requisites, the Court of Appeals made the following disquisitions:

Anent the first requisite, there is no dispute that the plaintiffs-appellees

The property of the plaintiffs, spouses Arsenio and Roslynn Fajardo, is

(Ocular Inspection Report, p. 135, Orig. Rec.)

Plaintiffs-appellees property is likewise without adequate outlet to a public

The third requisite is that the isolation of plaintiffs-appellees property should

(1) To traverse directly through defendants property which is the shortest

In all instances, no significant structures would be adversely affected. There is

(Ocular Inspection report, pp. 135-136, ibis.)

Petitioners reliance on Costabella Corporation v. Court of Appeals to support their

JOSEPH CHUNG, KIAT CHUNG and Promulgated:

The instant petition assails the Decision[1] dated October 27, 2005 and the

The antecedent facts are as follows:

Petitioner Unisource Commercial and Development Corporation is the

As Sandicos property was transferred to several owners, the memorandum of

On May 26, 2000, petitioner filed a Petition to Cancel the Encumbrance of

In their Answer,[11] respondents countered that the extinguishment of the

The decretal portion of the decision reads:

Before us, petitioner alleges that the Court of Appeals erred in:

BRUSHING ASIDE PETITIONERS CONTENTION THAT THE EASEMENT IS PERSONAL SINCE

DISREGARDING THE CIVIL CODE PROVISION ON UNJUST ENRICHMENT.

Petitioner contends that the fact that Sandico and Hidalgo resorted to

Respondents adopted the disquisition of the appellate court as their

The petition lacks merit.

As defined, an easement is a real right on anothers property, corporeal and

Neither can petitioner claim that the easement is personal only

WHEREFORE, the instant petition is DENIED. The Decision dated October

MINITA V. CHICO-NAZARIO TERESITA J. LEONARDO-DE CASTRO

Associate Justice Associate Justice

[G.R. No. 112331. May 29, 1996]

ANASTACIA QUIMEN, petitioner, vs. COURT OF APPEALS and

avocado tree standing in the middle. [4]

petitioner did not act in bad faith in resisting the claim.

As defined, an easement is a real right on anothers property, corporeal and

extinguished by causes provided by law. A right of way in particular is a privilege

anothers property when his tenement is surrounded by realties belonging to others

A cursory examination of the complaint of respondent Yolanda for a right of

In the trial court, petitioner openly admitted -

appellate court is thoroughly backed up by law and the evidence.

GALON, ANTONIO BUISON,

Respondent. October 9, 2009

Before this Court is a Petition for Review on certiorari[1] under Rule 65 of

The facts of the case:

Sometime in 1972, the Bicol Sugar Development Corporation (BISUDECO)

On October 30, 1992, petitioner Bicol Agro-Industrial Producers

Petitioner alleged that BISUDECO constructed the disputed road pursuant to an

In their Answer,[10] respondents denied having entered into an agreement with

Jaime Manubay and Manolito Maralit, for themselves and in representation