MANILA ELECTRIC COMPANY vs.

JUDGE FLORELIANA CASTRO-BARTOLOME

114 SCRA 799 DATE: June 29, 1982
PETITIONER: Manila Electric Company
RESPONDENTS: Court of First Instance of Rizal, Makati Branch XV and Republic of the Philippines
FACTS:
The Manila Electric Company purchased two lots (165 sqm.) with an assessed value of P3270 in Tanay, Rizal from the Piguing
spouses on August 13, 1976, who had consequently purchased it from Olympia Ramos on the 3 rd of July 1947, the original owner of
the land even before 1941. They consequently filed for the confirmation of title on Dec. 1, 1976, a motion that was rejected by the
Court of First Instance. The Meralco consequently filed an appeal with the following contentions:
1. The land after having been possessed by Olimpia Ramos and the Piguing spouses for more than thirty years had essentially
been converted to private land by virtue of acquisitive prescription. Thus, the constitutional prohibition banning a private
corporation from acquiring alienable public land is not applicable.
2. It had invoked section 48b of the Public Land Law, not for itself, but for the Piguing spouses who, as Filipino citizens,
could secure a judicial confirmation of their imperfect title to the land
ISSUES:
1. Whether or not the Meralco, as a juridical person, is qualified to apply for a judicial confirmation of an
imperfect/incomplete title.
2. Whether or not the conversion of the land in question is recognized.
3. Whether or not the conversion of the land from public to private property is contingent on the judicial confirmation of title.
RULING:
1. NO. According to Sec. 48b of the Public Lands Act, the Meralco, as a juridical person, is disqualified from applying for the
judicial confirmation of imperfect title. Furthermore, according to J. Aquino, Article XIV Sec. 14 of the 1973 Constitution
prohibits private corporations from hold alienable lands of the public domain except by lease, not to exceed 1000 hectares
in area. In fine, only natural persons and citizens of the Philippines are allowed to apply for confirmation under the PLA.
2. NO. It was held that the conversion from public land to private property is contingent upon (1) fulfilling the necessary
condition of possession by the predecessors-in-interest for the statutory period of 30 years; and (2) the judicial
confirmation of the title by the Court of First Instance. C.J. Fernando concurred with the decision, but accepted that a
conversion indeed took place.
3. HELD. This was maintained in the ruling of J. Aquino. C.J. Fernando, J. Abad Santos and J. De Castro, concurred
accordingly. J. Teehankee dissented and traced the line of jurisprudence from Carino to Susi to Herico which maintained
that the conversion or acquisition effectively happens by the operation of law, ipso jure, as soon as it can be conclusively
presumed, juris et de jure, that all the conditions for the confirmation of the grant have been met. According to his
reasoning, upon the fulfillment of the aforementioned conditions, the confirmation of an imperfect title is only a formality.

G.R. No. L-49623 June 29, 1982

MANILA ELECTRIC COMPANY, petitioner-appellant,
vs.
JUDGE FLORENLIANA CASTRO-BARTOLOME of the Court of First Instance of Rizal, Makati Branch XV, and
REPUBLIC OF THE PHILIPPINES,
respondent-appellees.

AQUINO, J.:p
This case involves the prohibition in section 11, Article XIV of the Constitution that "no private coporation or associaiton may hold
alienable lands of the public domain except by lease not to exceed on ethousand hectares in area". * That prohibition is not found in
the 1935 Constitution.
The Manila Electric Company, a domestic corporation organized under Philippine laws, more than sixty percent of whose capital
stock is owned by Filipino citizens, in its application filed on December 1, 1976 in the Makati branch of the Court of First Instance
of Rizal, prayed for the confirmation of its title to two lots with a total area of one hundred sixty-five square meters, located at
Tanay, Rizal with an assessed value of P3,270 (LRC Case No. N-9485, LRC No. N-50801).
The Republic of the Philippines opposed theh application on the grounds that the applicant, as a private corporation,is disqualified
to hold alienable public lands and that the applicant and its prredecessors-in-interest have not been in the open, continuous,

exclusive and notorious possession and occupation of the land for at least thirty years immediately preceding the filing of the
application (pp. 65-66, Rollo).
After the trial had commenced, the Province of rizal and the Municipality of Tanay filed a joint opposition to the application on the
ground that one of the lots, Lot No. 1165 of the Tanay cadastre, would be needed for the widening and improvement of Jose Abad
Santos and E.Quirino Streetsin the town of Tanay.
The land was possessed by Olimpia ramos before the Pacific war which broke out in 1941. On July 3, 1947, Ramos sold the land to
the spouses Rafael Piguing and MInerva Inocencio (Exh. K). The Piguing sapouses constructed a house therereon. Because the
Meralco had installed the "anchor guy" of its steel post on the land, the Piguing spouses sold the lot to the Meralco on August 13,
1976.
The said land was included in the1968 cadastral survey made in Tanacy by the Bureau of Lands, Plan AP-04-000902 (Exh. F and
H) and was divided into two lots, Lots Nos. 1164 and 1165, so as to segregate Lot No. 1165 which would be used to widen the two
street serving as the land's eastern and southern boundaries.
The land was declared for realty tax purposes since 1945 and taxes had been paid thereon up to 1977. It is residential in character as
distinguished from a strictly agricultural land. It is not included in any military reservation. Since 1927, it has formed part of the
alienable portion of the public domain.
After trial, the lowre court rendered a decision dismissing the application because in its opinion the Meralco is not qualified to
apply for the registration of the said land since under section 48(b) of the Public Land Law only Filipino citizens or natural persons
can apply for judicial confirmationof their imperfect titles to public land. The Meralco is a juridical person. The trial court assumed
that the land which it seeks to register is public land.
From that decision, the Meralco appealed to this Court under Republic Act No. 5440.
In contends that the said land, after having been possessed in the concept of owner by Olimpia Ramos and the Piguing spouses for
more than thirty years, had become private land in the hands of the latter, and, therefore, the constitutional prohibition, banning a
private corporation from acquiring alienable public land, is not applicable to the said land.
The Meralco further contends that it has invoke section 48(b) of the Public Land Law, not for itself, but for the Piguing spouses
who, as Filipino citizens, could secure a judicial confirmation of their imperfect title to the land.
In reply to these contentions, the Solicitor General counters that the said land is not private land because the Meralco and its
predecessors-in-interest have no composition title from the Spanish government nor possessory information title or any other means
for the acquisition of public lands such as grants or patents (Republic vs. Court of Appeals and De Jesus, L-40912, September 30,
1976, 73 SCRA 146, 157; Director of Lands vs. Reyes, L-27594, November 28, 1975, and Alinsunurin vs. Director of Lands, L28144, November 28, 1975; 68 SCRA 177; 195; Lee Hong Hok vs. David, L-30389, December 27, 1972, 48 SCRA 372, 378-9;
Director of Lands vs. Court of Appeals and Raymundo, L-29575, April 30, 1971, 38 SCRA 634, 639; Padilla vs. Reyes and Director
of Lands, 60 Phil. 967, 969; Heirs of Datu Pendatun vs. Director of Lands, 59 Phil. 600, 603).
The Public Land Law provides:
CHAPTER VIII. Judicial confirmation of imperfect or incomplete titles.
xxx xxx xxx
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:
xxx xxx xxx
(b) Those who by themselves or through their predecessors in interest have been in open, continuous, exclusive,
and notorious possession and occupation of agricultural lands of the public domain, under a bona fide claim of
acquisition of ownership, for at least thirty years 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. (As amended by Republic Act No. 1942, approved on June 22, 1957.)
xxx xxx xxx
SEC. 49. No person claiming title to lands of the public domain not in possession of the qualifications specified in
the last preceding section may apply for the benefits of this chapter.
We hold that, as between the State and the Meralco, the said land is still public land. It would cease to be public land only upon the
issuance of the certificate of title to any Filipino citizen claiming it under section 48(b). Because it is still public land and the

Meralco, as a juridical person, is disqualified to apply for its registration under section 48(b), Meralco's application cannot be given
due course or has to be dismissed.
This conclusion is supported by the rule announced in Oh Cho vs. Director of Lands, 75 Phil. 890, 892, which rule is a
compendious or quintessential precis of a pervasive principle of public land law and land registration law, that "all lands that were
not acquired from the Government, either by purchase or by grant, belong to the public domain. An exception to the rule would be
any land that should have been in the possession of an occupant and of his predecessors-in-interest since time immemorial, for such
possession would justify the presumption that the land had never been part of the public domain or that it had been a private
property even before the Spanish conquest." (Cario vs. Insular Government, 212 U. S. 449, 53 L. ed. 594, 41 Phil. 935 and 7 Phil.
132).
The Meralco relies on the ruling in Susi vs. Razon and Director of Lands, 48 Phil. 424, that "an open, continuous, adverse and
public possession of a land of the public domain from time immemorial by a private individual personally and through his
predecessors confers an effective title on said possessor, whereby the land ceases to be public" and becomes private property.
That ruling is based on the Cario case which is about the possession of land by an Igorot and his ancestors since time immemorial
or even before the Spanish conquest. The land involved in the Susi case was possessed before 1880 or since a period of time
"beyond the reach of memory". That is not the situation in this case. The Meralco does not pretend that the Piguing spouses and
their predecessor had been in possession of the land since time immemorial.
In the Susi case, this Court applied section 45(b) of Act No. 2874 which corresponds to what is now section 48(b). It was held that
the long possession of the land under a bona fide claim of ownership since July 26, 1894 gave rise to the conclusive presumption
that the occupant had complied with all the conditions essential to a Government grant and was thus entitled to a certificate of title.
On the other hand, in Uy Un vs. Perez, 71 Phil. 508, 510-11, it was held that while occupants of public land, who have applied for
the confirmation of their title, "teian asimismo a su favor la presuncion juris et de jure de que habian cumplido con todas las
condiciones necesarias para la concesion del titulo; pero hasta que el titulo se expida no tenian el concepto juridico de ser los
verdaderos dueos del terreno in este dejo de pertenecer a los terrenos publico del Estado susceptibles de enajenacion."
That means that until the certificate of title is issued, a pice of land, over which an imperfect title is sought to be confirmed, remains
public land. For that reason in the Uy Un case, it was held that if that land was attached by a judgment creditor of the applicant,
while his application for confirmation of his imperfect title was pending in the Bureau of Lands, the levy and execution sald of the
land were void.
For that same reason, lands over which an imperfect title is sought to be confirmed are governed by the Public Land Law. Such
lands would not be covered by the Public Land Law if they were already private lands. The occupants' right to the said lands is
characterized in the Uy Un case, not as ownership in fee simple, but asderecho dominical incoativo.
The Meralco in its concluding argument contends that if the Piguing spouses could ask for the confirmation of their imperfect title
to the said lands, then why should the Meralco, as their transferee, be denied the same right to register the said land in its name,
there being no legal prohibition for the Piguing spouses from selling the land to the Meralco? This Court is disposing of that same
contention in the Oh Cho case said:
The benefits provided in the Public Land Act (meaning the confirmation of an imperfect title under section 48[b])
for applicant's immediate predecessors-in-interest are or constitute a grant or concession by the State; and before
they could acquire any right under such benefits, the applicant's immediate predecessors-in-interest should comply
with the condition precedent for the grant of such benefits.
The condition precedent is to apply for the registration of the land of which they had been in possession at least
since July 26, 1894. This the applicant's immediate predecessors-in-interest (meaning the Piguing spouses in the
instant case) failed to do.
They did not have any vested right in the lot amounting to title which was transmissible to the applicant. The only
right, if it may thus be called, is their possession of the lot which, tacked to that of their predecessors-in-interest,
may be availed of by a qualified person to apply for its registration but not by a person as the applicant who is
disqualified. (75 Phil. 890, 893.)
Finally, it may be observed that the constitutional prohibition makes no distinction between (on one hand) alienable agricultural
public lands as to which no occupant has an imperfect title and (on the other hand) alienable lands of the public domain as to which
an occupant has an imperfect title subject to judicial confirmation.
Since section 11 of Article XIV does not distinguish, we should not make any distinction or qualification. The prohibition applies to
alienable public lands as to which a Torrens title may be secured under section 48(b). The proceeding under section 48(b)
"presupposes that the land is public" (Mindanao vs. Director of Lands, L-19535, July 30, 1967, 20 SCRA 641, 644).
The lower court;s judgment dismissing Meralco's application is affirmed. Costs against the petitioner-appellant.
SO ORDERED.

Barredo, Makasiar, Guerrero, Melencio-Herrera, Plana, Escolin, Vasquez, Relova and Gutierrez, Jr., JJ., concur.
Concepcion, Jr., J., is on leave.

Separate Opinions

ABAD SANTOS, J.: concurring:

I concur in the result. I am of the opinion that the lots which are sought to be registered have ceased to be lands of the public
domain at the time they were acquired by the petitioner corporation. They are already private lands because of acquisitive
prescription by the predecessors of the petitioner and all that is needed is the confirmation of the title. Accordingly, the
constitutional provision that no private corporation or association may hold alienable lands of the public domain is inapplicable.
However, the petitioner is relying on Sec. 48 of the Public Land Act for the confirmation of its title and Mr. Justice Aquino is
correct in holding that said provision cannot be availed by juridical entities.
FERNANDO, C.J., concurring and dissenting:
I concur in the ruling of the Court that Meralco "as a juridical person" is disqualified to apply for its registration under Section
48(b).. 1 I dissent insofar as the opinion of the Court would characterize such jurisdictional defect, under the particular circumstances of this case, as an insurmountable obstacle to the relief
sought. I would apply by analogy, although the facts could be distinguished, the approach followed by us in Francisco v. City of Davao, 2 where the legal question raised, instead
of being deferred and possibly taken up in another case, was resolved. By legal fiction 3 and in the exercise of our equitable jurisdiction, I
feel that the realistic solutionwould be to decide the matter as if the application under Section 48(b) were filed by the Piguing spouses,
who I assume suffer from no such disability.
DE CASTRO, J., dissenting:
Justice Teehankee cites in his dissenting opinion the case of herico vs. Dar, 1 the decision in which I am the ponente, as reiterating a
supposedly well-established doctrine that lands of the public domain which, by reason of possession and cultivation for such a length of
time, a grant by the State to the occupant is presumed, and the land thereby ceases to form part of the public domain, but is segregated
therefrom as to be no longer subject to the authority of the Director of Lands to dispose under the public lands laws or statutes. He would
thus consider said land as no longer public land but "private" lands and therefore, not within the prohibition of the New Constitution
against corporations from acquiring public lands which provides that "no private corporation or association may hold alienable lands of
the public domain except by lease not to exceed one thousand hectares." 2
I cannot subscribe to the view that the land as above described has become private land, even before title thereto, which is, as of
this stage, said to be still "an incomplete or imperfect title," has been fully vested on the occupant, through the prescribed procedure
known as judicial confirmation of incomplete or imperfect title. 3 This is the only legal method by which full and absolute title to the
land may be granted, to convert the land into a truly private land. To secure such judicial title, only the courts can be resorted to. The
Director of Lands has lost authority over the land, insofar as its disposition is concerned. His authority is limited to another form of
disposition of public land, referred to as administrative legalization, resulting in the issuance of free patents, also based on possession, in
which case, as in the issuance of homestead and sales patents, the land involved is undoubtedly public land. The possessor of a piece of
public land would have the option to acquire title thereto through judicial confirmation or administrative legalization. The difference is
that in the latter case, the area disposable to a citizen-applicant by the Director of Lands is limited to 24 hectares. There is no limit to the
area subject to judicial confirmation of incomplete or imperfect title, except possibly the limit fixed for a State grant under old Spanish
laws and decrees, which certainly is much larger than that set for free patents.
It is because of the divestiture of authority of the Director of Lands to dispose of the land subject to judicial confirmation of
incomplete and imperfect title that some statements are found in many cases, such as those cited by Justice Teehankee, to the effect
that such land has ceased to be a public land. What these statements, however, really mean is that the land referred to no longer
forms part of the mass of public domain still disposable by the Director of Lands, under the authority granted him by the public
land statutes. It, however, would not follow that the land covered by Section 48 of the Public Land Act has itself become private
land. The fact that its disposition is provided for in the aforecited Act which deals with "public land" gives rise to the very strong
implication, if not a positive conclusion, that the land referred to is still public land. Only when the court adjudicates the land to the
applicant for confirmation of title would the land become privately owned land, for in the same proceeding, the court may declare it
public land, depending on the evidence.
The discussion of the question of whether the land involved is still public or already private land is, however, entirely pointless, or
an idle exercise, if We consider the provision of Section 14, Article XIV of the Constitution which appears to have been lost sight
of, which provides that 'save in cases of hereditary succession, no private lands shall be transferred or conveyed except to
individuals, corporations, or associations qualified to acquire or hold lands of the public domain." As previously stated, by express

provisions of the Constitution, no corporation or association may hold alienable lands of the public domain except by lease, not to
exceed, 1,000 hectares in area. 4 Hence, even if the land involved in the present case is considered private land, the cited section
prohibits its acquisition by the Meralco or Iglesia which admittedly are "corporations or association" within the meaning of the aforecited
provision of the New Constitution. This observation should end all arguments on the issue of whether the land in question is public or
private land. Although it may further be observed that supposing a corporation has been in possession of a piece of public land from the
very beginning, may it apply for judicial confirmation of the land in question to acquire title to its owner after possessing the land for the
requisite length of time? The answer is believed obvious it may not. If its possession is not from the beginning but has commenced
only upon the transfer to it by the prior possessor, may the corporation apply? The answer is just as obvious with more reason, it may
not.
This separate opinion should have had no need to be written because the majority opinion written by Justice Aquino is already wellreasoned out and supported by applicable authorities. I was impelled to write it only because in the dissenting opinion of Justice
Teehankee, the case of Herico vs. Dar (supra) which is my ponenciawas cited in support of his position. This separate opinion then
is more to show and explain that whatever has been stated by me in the Dar case should be interpreted in the light of what I have
said in this separate opinion, which I believe, does not strengthen Justice Teehankee's position a bit.
TEEHANKEE, J., dissenting:
Involved in these two cases are the applications of petitioner Meralco, a nationalized domestic corporation, in the first case and
respondent Iglesia in Cristo, a religious corporation sole, in the second case (both admittedly Filipino corporations qualified to hold
and own private lands), for judicial confirmation of their titles to small parcels of land, residential in character as distinguished
from strictly agricultural land, acquired by them by purchase or exchange from private persons publicly recognized as the private
owners (who have been in the open, continuous, exclusive and notorious possession and occupation of the lands under a bona fide
claim of ownership for at least thirty [30] years immediately preceding the filing of the applications).
This dissent is based on the failure of the majority to adhere to established doctrine since the 1909 case of Cario and the 1925 case
of Susi down to the 1980 case of Herico, infra, pursuant to the Public Land Act, as amended, that where a possessor has held the
open, exclusive and unchallenged possession of alienable public land for the statutory period provided by law (30 years now under
amendatory Rep. Act No. 1942 approved on June 22, 1957), the law itself mandates that the possessor "shall be conclusively
presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title" and "by
legal fiction[the land] has already ceased to be of the public domain and has become private property." Accordingly, the prohibition
of the 1973 Constitution and of the Public Land Act against private corporation holding lands of the public domain has no
applicability in the present cases. What Meralco and Iglesia have acquired from their predecessors-in-interest had already ceased to
be of the public domain and had become private property at the time of the sale to them and therefore their applicatins for
confirmation of title by virtue of their predecessors-in-interest' vested right and title may be duly granted.
The land covered by the Meralco application of November 26, 1976 consists of two (1) small lots with a total area of 165 square
meters located at Tanay, Rizal with an assessed value of P3,270.00. This land was possessed by Olimpia Ramos before World Warr
II which broke out in the Pacific in 1941. Olimpia Ramos sold the land on July 3, 1947 to the spouses Rafael Piguing and Minerva
Inocencio who constructed a house thereon. But because the Meralco had instealled the "anchor guy" of its stell posts on the land,
the Piguing spouses sold the land to the Meralco on August 13, 1976. The land had been declared for realty tax purposes since
1945 and realty taxes were regularly paid thereon. It is residential in character as distinguished from strictly agricultural land. It is
likewise established that it is not included in any military reservation and that since 1927 it had been certified as part of the
alienable or disposable portion of the public domain.
The land covered by the Iglesia application of September 3, 1977 likewise consists of two (2) small lots located in Barrio Dampol,
Plaridel, Bulacan with a total area of 313 square meters and with an assessed value of P1,350.00. The land was acquired by the
Iglesia on January 9, 1953 from Andres Perez in exchange for a lot owned by the Iglesia with an area of 247 square meters. The
land was already possessed by Perez in 1933. Admittedly also it is not included in any military reservation and is inside an area
which was certified since 1927 as part of the alienable or disposable portion of the public domain. A chapel of the Iglesia stands on
the said land. It had been duly declared for realty tax purposes in the name of the Iglesia and realty taxes were regularly
paidthereon.
Respondent judge in the Meralco case sustained the Republic's opposition and dismissed the application, holding that under both
the provisions of the new Constitution and the Public Land Act, Meralco, being a corporation and not a natural person, is not
qualified to apply for the registration of title over the public land.
On the other hand, in the Iglesia case, the Republic presented no evidence in support of its opposition but expressly "submitted the
case for decision on the basis of the evidence submitted by the applicant." Respondent judge in the case accordingly granted the
application for registration of the land in the name of the Iglesia, holding that it had been "satisfactorily established that applicant ]
Iglesia] and its predecessors-in-interest have been in open, continuous, public and adverse possession of the land . . . under a bona
fide claim of ownership for more than thirty (30) years prior to the filing of the application" and is therefore entitled to the
registration applied for under the Public Land Act, as amended.
Both decisions are now with the Court for review. I hold that both applications for registration should be granted by virtue of the

prevailing principle as enunciated since the 1925 case of Susi vs. Razon and Director of Lands 1and reaffirmed in a long line of cases
down to the 1980 case of Herico vs. Dar 2 that the lands in question ceased, ipso jure, or by operation of law, to be lands of the public
domain upon completion of the statutory period of open, continuous, exclusive, notorious and unchallenged possession thereof by the
applicants' predecessors-in-interest who were qualified natural persons and entitled to registration by right of acquisitive prescription
under the provisions of the Public Land Act, and that accordingly the judgment in the Meralco case should be reversed and a new
judgment entered granting Meralco's application, while the judgment in the Iglesia case should stand affirmed.
The principal issue at bar may thus be stated:
It is expressly provided in section 48, par. (b) of the Public Land Act (Commonwealth Act No. 141, as amended by Rep. Act No.
1942, approved on June 22, 1957) that citizens of the Philippines who are natural persons who have occupied lands of the public
domain but whose titles have not been perfected or completed may apply to the corresponding court of first instance for
confirmation of their claims and the issuance of the certificate of title therefor under the Land Registration Act in cases where they
"by themselves or through their predecessors-in-interest have been in the open, continuous, exclusive, and notorious possession and
occupation of agricultural lands of the public domain, under a bona fide claim of acquisition of ownership, for at least thirty years
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." 3 In such cases, is the land ipso jure or by operation of law converted into
private land upon completion of the 30th year of continuous and unchallenged occupation of the land such that thereafter as such private
land, it may be duly transferred to and owned by private corporations or does such land, as held by respondent judge in the Meralco case,
remain part of the public domain and does not become private land until after actual judicial confirmation proceedings and the formal
court order for the issuance of the certificate of title?
1. This issue has been squarely resolved by this Court since the 1925 case of Susi vs. Razon (and a long line of cases, infra). It is
established doctrine as first held therein that an open, continuous, adverse and public possession of a land of the public domain for
the period provided in the Public Land Act provision in force at the time (from July 26, 1894 in Susi under the old law) by a private
individual personally and through his predecessors confers an effective title on said possessor, whereby the land ceases to be land of
the public domain and becomes private property.
(At that time in 1925 in the Susi case, such possession was required "from July 26, 1894" as then provided for in section 45(b) of
the old Public Land Act No. 2874, amending Act No. 926; whereas at present, as provided for in the corresponding section 48, par.
(b) of the later and subsisting Public Land Act, Commonwealth Act No. 141, as amended by Rep. Act No. 1942 approved on June
22, 1957, in force since 1957, the period of open and unchallenged possession was reduced to "at least thirty years immediately
preceding the filing of the application for confirmation of title, equivalent to the period of acquisitive prescription. This is admitted
in the main opinion of Mr. Justice Aquino, wherein it is stated that "(I)n the Susi case, this Court applied section 45 (b) of Act No.
2874 which corresponds to what is now section 48(b). It was held that the long possession of the land under a bona fide claim of
ownership since July 26, 1894 gave rise to the conclusive presumption that the occupant had complied with all the conditions
essential to a Government grant and was thus entitled to a certificate of title." 4 The text of the corresponding section 48(b), as
amended by Rep. Act 1942 referred to is reproducedverbatim in Mr. Justice Aquino's opinion 5 and quotes the reduced statutory period of
open and unchallenged possession of "at least thirty years immediately preceding the filing of the application.")
Accordingly, the Court held that Susi, as the rightful possessor of the public land for the statutory period, acquired the same by
operation of law as a grant from the Government, "not only a right to a grant," and the land thereby "already ceased to be of the
public domain and had become private property at least by presumption" as expressly provided in the Act. Therefore, any supposed
sale by the Director of Lands of the same land to another person was void and of no effect and Susi as the rightful possessor could
recover the land as his private propertyfrom the supposed vendee who did not acquire any right thereto since it had ceased to be
land of the public domain. The Court thus specifically held therein, as applied to the specific facts of the case, that:
. . . In favor of Valentin Susi, there is, moreover, the presumption juris et de jure, established in paragraph (b) of section 45 of Act
No. 2874, amending Act No. 926, that all the necessary requirements for a grant by the Government were complied with for he has
been in actual and physical possession, personally and through his predecessors, of an agricultural land of the public domain,
openly continuously, exclusively and publicly since July 26, 1894, with a right to a certificate of title to said land under the
provisions of Chapter VIII of said Act. So that when Angela Razon applied for the grant in her favor, Valentin Susi had already
acquired, by operation of law, not only a right to a grant, but a grant of the Government, for it is not necessary that certificate of
title should be issued in order that said grant may be sanctioned by the courts, an application therefor is sufficient , under the
provisions of section 47 of Act No. 2874. If by a legal function, Valentin Susi had acquired the land in question by a grant of the
State, it had already ceased to be of the public domain and had become private property, at least by presumption , of Valentin
Susi, beyond the control of the Director of Lands. Consequently, in selling the land in question to Angela Razon, the Director of
Lands disposed of a land over which he had no longer any title or control, and the sake thus made was void and of no effect, and
Angela Razon did not thereby acquire any right." 6
2. The above-quoted ruling in Susi has been affirmed and reaffirmed by this Court in a long unbroken line of cases, as follows:
In Mesina vs. Vda. de Sonza, 7 the Court held that "(I)n the case of Susi vs. Razon, et al., 48 Phil. 424, it was observed that where all the
necessary requirements for a grant by the Government are complied with through actual physical possession openly, continuously, and

publicly, with a right to a certificate of title to said land under the provisions of Chapter VIII of Act No. 2874, amending Act No. 926
(carried over as Chapter VIII of Commonwealth Act No. 141), the possessor is deemed to have already acquired by operation of law not
only a right to a grant, but a grant of the Government, for it is not necessary that a certificate of title be issued in order that said grant
may be sanctioned by the courts an application therefor being sufficient under the provisions of Section 47 of Act No. 2874
(reproduced as Section 50, Commonwealth Act No. 141)." and "(C)onsidering that this case was dismissed by the trial court merely on a
motion to dismiss on the ground that plaintiff's action is already barred by the statute of limitations, which apparently is predicated on the
theory that a decree of registration can no longer be impugned on the ground of fraud one year after the issuance and entry of the decree,
which theory does not apply here because the property involved is allegedly private in natural and has ceased to be part of the public
domain, we are of the opinion that the trial court erred in dismissing the case outright without giving plaintiff a chance to prove his claim."

In Lacaste vs. Director of Lands, 8 the Court stressed that by force of possession, the land in question became private property on the
strength of the Susi doctrine.
In Manarpaac vs. Cabanatan, 9 the Court quoted with favor the text of the above-quoted ruling of Susi, and its ratio decidendithus:
The Director of Lands contends that the land in question being of the public domain, the plaintiff-appellee cannot
maintain an action to recover possession thereof.
If, as above stated, that land, the possession of which is in dispute, had already become, operation of law, private
property, there is lacking only the judicial sanction of his title, Valentin Susi has the right to bring an action to
recover the possession thereof and hold it.
In Miguel vs. Court of Appeals, 10 the Court again held that where possession has been continuous, uninterrupted, open, adverse and in
the concept of an owner, there is a presumption juris et de jure that all necessary conditions for a grant by the State have been complied
with and he would have been by force of law entitled to the registration of his title to the land (citing Pamintuan vs. Insular Government, 8
Phil. 485 and Susi vs. Razon, 48 Phil. 424).
In the latest 1980 case of Herico vs. Dar, 11 the Court once more reiterated the Susi doctrine that "(A)nother obvious error of the
respondent Court is in holding that after one year from the issuance of the Torrens Title, the same can no longer be reopened to be
declared and void, and has become absolute and indefeasible. . . . Secondly, under the provisions of Republic Act No. 1942, which the
respondent court held to be inapplicable to the petitioner's case, with the latter's proven occupation and cultivation for more than 30 years
since 1914, by himself and by his predecessors-in-interest, title over the land has vested on petitioner as to segregate the land from the
mass of public land. Thereafter, it is no longer disposable under the Public Land Act as by free patent. This is as provided in Republic Act
No. 1942, which took effect on June 22, 1957, amending Section 48-b of Commonwealth Act No. 141 which provides: . . . As interpreted
in several cases when the conditions as specified in the foregoing provision are complied with, the possessor is deemed to have acquired,
by operation of law, a right to a grant, a government grant, without the necessity of a certificate of title being issued. The land, therefore,
ceases to be of the public domain, and beyond the authority of the Director of Lands to dispose of. The application for confirmation is a
mere formality, the lack of which does not affect the legal sufficiency of the title as would be evidenced by the patent and the Torrens title
to be issued upon the strength of said patent."
3. In fine, since under the Court's settled doctrine, the acquisitive prescription of alienable or disposable public lands provided for
now in section 48, par. (b) of the Public Land Act takes place by operation of law and the public land is converted to and
becomes private property upon a showing of open and unchallenged possession under bona fide claim of ownership by the
applicants' predecessors-in-interest for the statutory period of thirty years immediately preceding the filing of the application and "it
is not necessary that a certificate of title should be issued in order that said grant may be sanctioned by the court" which right is
expressly backed up by theconclusive presumption or presumption juris et de jure of the statute that the possessor has "performed
all the conditions essential to a Government grant," the applicant Meralco cannot be said to be barred as a corporation from filing
the application for registration of the private property duly acquired by it.
4. It should be noted that respondent judge's decision in the Meralco case expressly finds as established factsthat the Meralco's
predecessors-in-interest had possessed and occupied as owners the land in question for at least over 35 years; Olimpia Ramos
having possessed the same since the last world war in 1941 and then having sold the same on July 3, 1947 to the Piguing spouses
who built a house thereon and continuously possessed the same until they sold the same in turn to the Meralco on August 13,
1976, 12 Meralco's predecessors-in-interest had therefore acquired by operation of the Public Land Act a Government grant to the
property, as well as acquired ownership thereof by right of acquisitive prescription over the land which thereby became private property.
The very definition of prescription as a mode of acquiring ownership as set forth in Art. 1106 of the Civil Code provides that "By
prescription one acquires ownership and other real rights through lapse of time in the manner and under the conditions laid down by law."
The law does not provide that one acquires ownership of a land by prescription only after his title thereto is judicially confirmed. To this
same effect is the ruling inCario vs. Insular Government 13, wherein the U.S. Supreme Court speaking through Justice Holmes held that
It is true that the language of Articles 4 and 5 attributes title to those 'who may prove' possession for the necessary
time and we do not overlook the argument that this means may prove in registration proceedings. It may be that an
English conveyancer would have recommended an application under the foregoing decree, but certainly it was not
calculated to convey to the mind of an Igorot chief the notion that ancient family possessions were in danger, if he
had read every word of it. The words"may prove" (acrediten), as well, or better, in view of the other provisions,
might be taken to mean when called upon to do so in any litigation. There are indications that registration was

expected from all, but none sufficient to show that, for want of it, ownership actually gained would be lost.The
effect of the proof, whenever made, was not to confer title, but simply to establish it, as already conferred by the
decree, if not by earlier law.
To the same effect is the Court's ruling in Legarda and Prieto vs. Saleeby, 31 Phil. 590, that "an owner does not obtain title by
virtue of certificate but rather obtains his certificate by virtue of the fact that he has a fee simple title."
5. Since the public land because private property upon completion of the 30th year of continuous, exclusive, and unchallenged
possession of the applicant Meralco's predecessors-in-interest, particularly the Piguing spouses who sold the private land to the
Meralco, there is no justification for denying the Meralco's application for registration of its duly acquired title to the land.
Meralco's predecessors-in-interest had acquired ownership of the land by acquisitive prescription as provided by the Public Land
Act and by the Civil Code. The land became private property and Meralco duly acquired it by right of purchase. To deny Meralco's
application to register the property because it is not a natural person is unjustified because neither the new constitutional ban under
the 1973 Constitution against private corporations owning lands of the public domain or the Public Land Act's limitation on the
right of application for confirmation of imperfect title to lands of the public domain can be invoked any longer as the land had long
ceased to be public land but had become private property. Meralco's application in effect seeks confirmation of the acquisition of
ownership of the land which had become private property of its predecessors-in-interest, the Piguing spouses who thru their open
and unchallenged possession of the land for over thirty years acquired title thereto by acquisitive prescription and by conclusive
presumption of the Public Land Act itself. There is no legal nor constitutional obstacle to such title being transferred to the Meralco
by right of purchase and traditio for it is not claimed that there is any legal prohibition against the Piguing spouses transferring
the ownership of the land to others (whether natural persons or corporations) such as the applicant Meralco, even before the formal
issuance of the certificate of title to them.
6. To uphold respondent judge's denial of Meralco's application on the technicality that the Public Land Act allows only citizens of
the Philippines who are natural persons to apply for confirmation of their title would be impractical and would just give rise to
multiplicity of court actions. Assuming that there was a technical error in not having filed the application for registration in the
name of the Piguing spouses as the original owners and vendors, still it is conceded that there is no prohibition against their sale of
the land to the applicant Meralco and neither is there any prohibition against the application being refiled with retroactive effect in
the name of the original owners and vendors (as such natural persons) with the end result of their application being granted, because
of their indisputable acquisition of ownership by operation of law and the conclusive presumption therein provided in their favor. It
should not be necessary to go through all the rituals as the great cost of refiling of all such applications in their names and adding to
the overcrowded court dockets when the Court can after all these years dispose of it here and now. (See Francisco vs. City of
Davao 14)
The ends of justice would best be served, therefore, by considering the applications for confirmation as amended to conform to the
evidence, i.e. as filed in the names of the original persons who as natural persons are duly qualified to apply for formal
confirmation of the title that they had acquired by conclusive presumption and mandate of the Public Land Act and who thereafter
duly sold to the herein corporations (both admittedly Filipino corporations duly qualified to hold and own private lands) and
granting the application for confirmation of title to the private lands so acquired and sold or exchanged.
7. All that has been said here applies of course with equal force to the Iglesia case, save that as already stated at the beginning
hereof, the Iglesia application was granted because the Republic presented no evidence in support of its opposition and respondent
judge held in effect that the property had ceased to be land of the public domain and had become private property, the title to which
could be duly issued in the name of the Iglesia as the transferee of its predecessors-in-interest.
8. It should bear emphasis that what are involved here are small parcels of land, of 165 square meters in the Meralco case used for
installation of an "anchor guy" for its steel posts in connection with its tasks as a nationalized domestic corporation to furnish
electrical service to the consumer public, and of 313 square meters in the Iglesia case used as the site of its church built thereon to
minister to the religious needs of its members. In no way, may the letter, intent and spirit of the prohibition of the 1973 Constitution
against corporations "holding alienable lands of the public domain except by lease not to exceed one thousand hectares in area"
(which is beamed against the undue control and exploitation of our public lands and natural resources by corporations, Filipino and
foreign-controlled) be deemed violated or disregarded by the granting of the applications at bar. The two corporations in truth and
in fact do not hold the small parcels of land at bar for their own use or benefit but for the sole use and benefit of the public.
9. With reference to the separate concurring opinion of Mr. Justice De Castro wherein he would blunt the "supposedly (sic) wellestablished doctrine" (at page 1) from the 1909 case of Cario and the 1925 case of Susidown to the 1980 case of Herico (supra, at
pages 5 to 11) and support the contrary pronouncement in Mr. Justice Aquino's main opinion that "as between the State and the
Meralco, the said land is still public land. It would cease to be public land only upon the issuance of the certificate of title to any
Filipino citizen claiming it under section 48(b) [of the Public Land Act]" (at page 5), suffice it to cite his own pronouncement
in Herico (reiterating the well-established and prevailing doctrine which this Court has not overturned, as it cannot overturn the
mandate of the statute that the unchallenged possessor for at least 30 years is "conclusively presumed to have performed all the
conditions essential to a government grant") wherein Mr. Justice De Castro categorically reiterated for the Court that "As
interpretated in several cases . . . the possessor is deemed to have acquired, by operation of law, a right to a grant, a government
grant, without the necessity of a certificate of title being issued. The and, therefore, ceases to be of the public domain, and beyond

the authority of the Director of Lands to dispose of. The application for confirmation is a mere formality, the lack of which does not
affect the legal sufficiency of the titleas would be evidenced by the patent and the Torrens title to be issued upon the strength of said
patent."
In only remains to point out, in order to avoid misapprehension or confusion, that Mr. Justice De Castro's seemingly querulous
statement that "the discussion of the question of whether the land involved is still public oralready private land, is, however,
entirely pointless or an idle exercise, if We consider the provision of Section 14, Article XIV of the Constitution which appears to
have been lost sight of, which provides that 'save in cases of hereditary succession, no private lands shall be transferred or
conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain'" (at page 2)
that "hence, even if the land involved in the present case is considered private land, the cited section prohibits its acquisition by the
Meralco or Iglesia which admittedly are 'corporations or associations' within the meaning of the aforecited provisions of the New
Constitution. This observation should end all arguments of the issue of whether the land in question is public or private land"
(idem) might mislead one to the wrong conclusion that corporations with 60% Filipino ownership may not own private lands when
the express provisions of Art. XIV, section 9 15 and section 14 as quoted by himself as well as the counterpart provisions of the 1935
Constitution have always expressly permitted Filipino-owned corporations to own private lands, and the only change effected in the 1973
Constitution is section 11 which now prohibits even such Filipino corporations to own or hold lands of the public domain except by lease
not to exceed 1,000 hectares in area.
ACCORDINGLY, I vote for reversal of respondent court's judgment in the Meralco case and for the entry of a new judgment
granting Meralco's application and for affirmance of judgment in the second case granting the Iglesia application.

Separate Opinions
ABAD SANTOS, J.: concurring:
I concur in the result. I am of the opinion that the lots which are sought to be registered have ceased to be lands of the public
domain at the time they were acquired by the petitioner corporation. They are already private lands because of acquisitive
prescription by the predecessors of the petitioner and all that is needed is the confirmation of the title. Accordingly, the
constitutional provision that no private corporation or association may hold alienable lands of the public domain is inapplicable.
However, the petitioner is relying on Sec. 48 of the Public Land Act for the confirmation of its title and Mr. Justice Aquino is
correct in holding that said provision cannot be availed by juridical entities.
FERNANDO, C.J., concurring and dissenting:
I concur in the ruling of the Court that Meralco "as a juridical person" is disqualified to apply for its registration under Section
48(b).. 1 I dissent insofar as the opinion of the Court would characterize such jurisdictional defect, under the particular circumstances of this case, as an insurmountable obstacle to the relief
sought. I would apply by analogy, although the facts could be distinguished, the approach followed by us in Francisco v. City of Davao, 2 where the legal question raised, instead
of being deferred and possibly taken up in another case, was resolved. By legal fiction 3 and in the exercise of our equitable jurisdiction, I
feel that the realistic solutionwould be to decide the matter as if the application under Section 48(b) were filed by the Piguing spouses,
who I assume suffer from no such disability.
DE CASTRO, J., dissenting:
Justice Teehankee cites in his dissenting opinion the case of herico vs. Dar, 1 the decision in which I am the ponente, as reiterating a
supposedly well-established doctrine that lands of the public domain which, by reason of possession and cultivation for such a length of
time, a grant by the State to the occupant is presumed, and the land thereby ceases to form part of the public domain, but is segregated
therefrom as to be no longer subject to the authority of the Director of Lands to dispose under the public lands laws or statutes. He would
thus consider said land as no longer public land but "private" lands and therefore, not within the prohibition of the New Constitution
against corporations from acquiring public lands which provides that "no private corporation or association may hold alienable lands of
the public domain except by lease not to exceed one thousand hectares." 2
I cannot subscribe to the view that the land as above described has become private land, even before title thereto, which is, as of
this stage, said to be still "an incomplete or imperfect title," has been fully vested on the occupant, through the prescribed procedure
known as judicial confirmation of incomplete or imperfect title. 3 This is the only legal method by which full and absolute title to the
land may be granted, to convert the land into a truly private land. To secure such judicial title, only the courts can be resorted to. The
Director of Lands has lost authority over the land, insofar as its disposition is concerned. His authority is limited to another form of
disposition of public land, referred to as administrative legalization, resulting in the issuance of free patents, also based on possession, in
which case, as in the issuance of homestead and sales patents, the land involved is undoubtedly public land. The possessor of a piece of
public land would have the option to acquire title thereto through judicial confirmation or administrative legalization. The difference is
that in the latter case, the area disposable to a citizen-applicant by the Director of Lands is limited to 24 hectares. There is no limit to the
area subject to judicial confirmation of incomplete or imperfect title, except possibly the limit fixed for a State grant under old Spanish
laws and decrees, which certainly is much larger than that set for free patents.

It is because of the divestiture of authority of the Director of Lands to dispose of the land subject to judicial confirmation of
incomplete and imperfect title that some statements are found in many cases, such as those cited by Justice Teehankee, to the effect
that such land has ceased to be a public land. What these statements, however, really mean is that the land referred to no longer
forms part of the mass of public domain still disposable by the Director of Lands, under the authority granted him by the public
land statutes. It, however, would not follow that the land covered by Section 48 of the Public Land Act has itself become private
land. The fact that its disposition is provided for in the aforecited Act which deals with "public land" gives rise to the very strong
implication, if not a positive conclusion, that the land referred to is still public land. Only when the court adjudicates the land to the
applicant for confirmation of title would the land become privately owned land, for in the same proceeding, the court may declare it
public land, depending on the evidence.
The discussion of the question of whether the land involved is still public or already private land is, however, entirely pointless, or
an idle exercise, if We consider the provision of Section 14, Article XIV of the Constitution which appears to have been lost sight
of, which provides that 'save in cases of hereditary succession, no private lands shall be transferred or conveyed except to
individuals, corporations, or associations qualified to acquire or hold lands of the public domain." As previously stated, by express
provisions of the Constitution, no corporation or association may hold alienable lands of the public domain except by lease, not to
exceed, 1,000 hectares in area. 4 Hence, even if the land involved in the present case is considered private land, the cited section
prohibits its acquisition by the Meralco or Iglesia which admittedly are "corporations or association" within the meaning of the aforecited
provision of the New Constitution. This observation should end all arguments on the issue of whether the land in question is public or
private land. Although it may further be observed that supposing a corporation has been in possession of a piece of public land from the
very beginning, may it apply for judicial confirmation of the land in question to acquire title to its owner after possessing the land for the
requisite length of time? The answer is believed obvious it may not. If its possession is not from the beginning but has commenced
only upon the transfer to it by the prior possessor, may the corporation apply? The answer is just as obvious with more reason, it may
not.
This separate opinion should have had no need to be written because the majority opinion written by Justice Aquino is already wellreasoned out and supported by applicable authorities. I was impelled to write it only because in the dissenting opinion of Justice
Teehankee, the case of Herico vs. Dar (supra) which is my ponenciawas cited in support of his position. This separate opinion then
is more to show and explain that whatever has been stated by me in the Dar case should be interpreted in the light of what I have
said in this separate opinion, which I believe, does not strengthen Justice Teehankee's position a bit.
TEEHANKEE, J., dissenting:
Involved in these two cases are the applications of petitioner Meralco, a nationalized domestic corporation, in the first case and
respondent Iglesia in Cristo, a religious corporation sole, in the second case (both admittedly Filipino corporations qualified to hold
and own private lands), for judicial confirmation of their titles to small parcels of land, residential in character as distinguished
from strictly agricultural land, acquired by them by purchase or exchange from private persons publicly recognized as the private
owners (who have been in the open, continuous, exclusive and notorious possession and occupation of the lands under a bona fide
claim of ownership for at least thirty [30] years immediately preceding the filing of the applications).
This dissent is based on the failure of the majority to adhere to established doctrine since the 1909 case ofCario and the 1925 case
of Susi down to the 1980 case of Herico, infra, pursuant to the Public Land Act, as amended, that where a possessor has held the
open, exclusive and unchallenged possession of alienable public land for the statutory period provided by law (30 years now under
amendatory Rep. Act No. 1942 approved on June 22, 1957), the law itself mandates that the possessor "shall be conclusively
presumed to have performed all the conditions essential to a Government grant and shall be entitled to a certificate of title" and "by
legal fiction[the land] has already ceased to be of the public domain and has become private property." Accordingly, the prohibition
of the 1973 Constitution and of the Public Land Act against private corporation holding lands of the public domain has no
applicability in the present cases. What Meralco and Iglesia have acquired from their predecessors-in-interest had already ceased to
be of the public domain and had become private property at the time of the sale to them and therefore their applicatins for
confirmation of title by virtue of their predecessors-in-interest' vested right and title may be duly granted.
The land covered by the Meralco application of November 26, 1976 consists of two (1) small lots with a total area of 165 square
meters located at Tanay, Rizal with an assessed value of P3,270.00. This land was possessed by Olimpia Ramos before World Warr
II which broke out in the Pacific in 1941. Olimpia Ramos sold the land on July 3, 1947 to the spouses Rafael Piguing and Minerva
Inocencio who constructed a house thereon. But because the Meralco had instealled the "anchor guy" of its stell posts on the land,
the Piguing spouses sold the land to the Meralco on August 13, 1976. The land had been declared for realty tax purposes since
1945 and realty taxes were regularly paid thereon. It is residential in character as distinguished from strictly agricultural land. It is
likewise established that it is not included in any military reservation and that since 1927 it had been certified as part of the
alienable or disposable portion of the public domain.
The land covered by the Iglesia application of September 3, 1977 likewise consists of two (2) small lots located in Barrio Dampol,
Plaridel, Bulacan with a total area of 313 square meters and with an assessed value of P1,350.00. The land was acquired by the
Iglesia on January 9, 1953 from Andres Perez in exchange for a lot owned by the Iglesia with an area of 247 square meters. The
land was already possessed by Perez in 1933. Admittedly also it is not included in any military reservation and is inside an area
which was certified since 1927 as part of the alienable or disposable portion of the public domain. A chapel of the Iglesia stands on

the said land. It had been duly declared for realty tax purposes in the name of the Iglesia and realty taxes were regularly
paidthereon.
Respondent judge in the Meralco case sustained the Republic's opposition and dismissed the application, holding that under both
the provisions of the new Constitution and the Public Land Act, Meralco, being a corporation and not a natural person, is not
qualified to apply for the registration of title over the public land.
On the other hand, in the Iglesia case, the Republic presented no evidence in support of its opposition but expressly "submitted the
case for decision on the basis of the evidence submitted by the applicant." Respondent judge in the case accordingly granted the
application for registration of the land in the name of the Iglesia, holding that it had been "satisfactorily established that applicant ]
Iglesia] and its predecessors-in-interest have been in open, continuous, public and adverse possession of the land . . . under a bona
fide claim of ownership for more than thirty (30) years prior to the filing of the application" and is therefore entitled to the
registration applied for under the Public Land Act, as amended.
Both decisions are now with the Court for review. I hold that both applications for registration should be granted by virtue of the
prevailing principle as enunciated since the 1925 case of Susi vs. Razon and Director of Lands 1and reaffirmed in a long line of cases
down to the 1980 case of Herico vs. Dar 2 that the lands in question ceased, ipso jure, or by operation of law, to be lands of the public
domain upon completion of the statutory period of open, continuous, exclusive, notorious and unchallenged possession thereof by the
applicants' predecessors-in-interest who were qualified natural persons and entitled to registration by right of acquisitive prescription
under the provisions of the Public Land Act, and that accordingly the judgment in the Meralco case should be reversed and a new
judgment entered granting Meralco's application, while the judgment in the Iglesia case should stand affirmed.
The principal issue at bar may thus be stated:
It is expressly provided in section 48, par. (b) of the Public Land Act (Commonwealth Act No. 141, as amended by Rep. Act No.
1942, approved on June 22, 1957) that citizens of the Philippines who are natural persons who have occupied lands of the public
domain but whose titles have not been perfected or completed may apply to the corresponding court of first instance for
confirmation of their claims and the issuance of the certificate of title therefor under the Land Registration Act in cases where they
"by themselves or through their predecessors-in-interest have been in the open, continuous, exclusive, and notorious possession and
occupation of agricultural lands of the public domain, under a bona fide claim of acquisition of ownership, for at least thirty years
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." 3 In such cases, is the land ipso jure or by operation of law converted into
private land upon completion of the 30th year of continuous and unchallenged occupation of the land such that thereafter as such private
land, it may be duly transferred to and owned by private corporations or does such land, as held by respondent judge in the Meralco case,
remain part of the public domain and does not become private land until after actual judicial confirmation proceedings and the formal
court order for the issuance of the certificate of title?
1. This issue has been squarely resolved by this Court since the 1925 case of Susi vs. Razon (and a long line of cases, infra). It is
established doctrine as first held therein that an open, continuous, adverse and public possession of a land of the public domain for
the period provided in the Public Land Act provision in force at the time (from July 26, 1894 in Susi under the old law) by a private
individual personally and through his predecessors confers an effective title on said possessor, whereby the land ceases to be land of
the public domain and becomes private property.
(At that time in 1925 in the Susi case, such possession was required "from July 26, 1894" as then provided for in section 45(b) of
the old Public Land Act No. 2874, amending Act No. 926; whereas at present, as provided for in the corresponding section 48, par.
(b) of the later and subsisting Public Land Act, Commonwealth Act No. 141, as amended by Rep. Act No. 1942 approved on June
22, 1957, in force since 1957, the period of open and unchallenged possession was reduced to "at least thirty years immediately
preceding the filing of the application for confirmation of title, equivalent to the period of acquisitive prescription. This is admitted
in the main opinion of Mr. Justice Aquino, wherein it is stated that "(I)n the Susi case, this Court applied section 45 (b) of Act No.
2874 which corresponds to what is now section 48(b). It was held that the long possession of the land under a bona fide claim of
ownership since July 26, 1894 gave rise to the conclusive presumption that the occupant had complied with all the conditions
essential to a Government grant and was thus entitled to a certificate of title." 4 The text of the corresponding section 48(b), as
amended by Rep. Act 1942 referred to is reproducedverbatim in Mr. Justice Aquino's opinion 5 and quotes the reduced statutory period of
open and unchallenged possession of "at least thirty years immediately preceding the filing of the application.")
Accordingly, the Court held that Susi, as the rightful possessor of the public land for the statutory period, acquired the same by
operation of law as a grant from the Government, "not only a right to a grant," and the land thereby "already ceased to be of the
public domain and had become private property at least by presumption" as expressly provided in the Act. Therefore, any supposed
sale by the Director of Lands of the same land to another person was void and of no effect and Susi as the rightful possessor could
recover the land as his private propertyfrom the supposed vendee who did not acquire any right thereto since it had ceased to be
land of the public domain. The Court thus specifically held therein, as applied to the specific facts of the case, that:
. . . In favor of Valentin Susi, there is, moreover, the presumption juris et de jure, established in paragraph (b) of section 45 of Act
No. 2874, amending Act No. 926, that all the necessary requirements for a grant by the Government were complied with for he has

been in actual and physical possession, personally and through his predecessors, of an agricultural land of the public domain,
openly continuously, exclusively and publicly since July 26, 1894, with a right to a certificate of title to said land under the
provisions of Chapter VIII of said Act. So that when Angela Razon applied for the grant in her favor, Valentin Susi had already
acquired, by operation of law, not only a right to a grant, but a grant of the Government, for it is not necessary that certificate of
title should be issued in order that said grant may be sanctioned by the courts, an application therefor is sufficient, under the
provisions of section 47 of Act No. 2874. If by a legal function, Valentin Susi had acquired the land in question by a grant of the
State, it had already ceased to be of the public domain and had become private property, at least by presumption, of Valentin
Susi, beyond the control of the Director of Lands. Consequently, in selling the land in question to Angela Razon, the Director of
Lands disposed of a land over which he had no longer any title or control, and the sake thus made was void and of no effect, and
Angela Razon did not thereby acquire any right." 6
2. The above-quoted ruling in Susi has been affirmed and reaffirmed by this Court in a long unbroken line of cases, as follows:
In Mesina vs. Vda. de Sonza, 7 the Court held that "(I)n the case of Susi vs. Razon, et al., 48 Phil. 424, it was observed that where all the
necessary requirements for a grant by the Government are complied with through actual physical possession openly, continuously, and
publicly, with a right to a certificate of title to said land under the provisions of Chapter VIII of Act No. 2874, amending Act No. 926
(carried over as Chapter VIII of Commonwealth Act No. 141), the possessor is deemed to have already acquired by operation of law not
only a right to a grant, but a grant of the Government, for it is not necessary that a certificate of title be issued in order that said grant
may be sanctioned by the courts an application therefor being sufficient under the provisions of Section 47 of Act No. 2874
(reproduced as Section 50, Commonwealth Act No. 141)." and "(C)onsidering that this case was dismissed by the trial court merely on a
motion to dismiss on the ground that plaintiff's action is already barred by the statute of limitations, which apparently is predicated on the
theory that a decree of registration can no longer be impugned on the ground of fraud one year after the issuance and entry of the decree,
which theory does not apply here because the property involved is allegedly private in natural and has ceased to be part of the public
domain, we are of the opinion that the trial court erred in dismissing the case outright without giving plaintiff a chance to prove his claim."
In Lacaste vs. Director of Lands, 8 the Court stressed that by force of possession, the land in question became private property on the
strength of the Susi doctrine.
In Manarpaac vs. Cabanatan, 9 the Court quoted with favor the text of the above-quoted ruling of Susi, and its ratio decidendithus:
The Director of Lands contends that the land in question being of the public domain, the plaintiff-appellee cannot
maintain an action to recover possession thereof.
If, as above stated, that land, the possession of which is in dispute, had already become, operation of law, private
property, there is lacking only the judicial sanction of his title, Valentin Susi has the right to bring an action to
recover the possession thereof and hold it.
In Miguel vs. Court of Appeals, 10 the Court again held that where possession has been continuous, uninterrupted, open, adverse and in
the concept of an owner, there is a presumption juris et de jure that all necessary conditions for a grant by the State have been complied
with and he would have been by force of law entitled to the registration of his title to the land (citing Pamintuan vs. Insular Government, 8
Phil. 485 and Susi vs. Razon, 48 Phil. 424).
In the latest 1980 case of Herico vs. Dar, 11 the Court once more reiterated the Susi doctrine that "(A)nother obvious error of the
respondent Court is in holding that after one year from the issuance of the Torrens Title, the same can no longer be reopened to be
declared and void, and has become absolute and indefeasible. . . . Secondly, under the provisions of Republic Act No. 1942, which the
respondent court held to be inapplicable to the petitioner's case, with the latter's proven occupation and cultivation for more than 30 years
since 1914, by himself and by his predecessors-in-interest, title over the land has vested on petitioner as to segregate the land from the
mass of public land. Thereafter, it is no longer disposable under the Public Land Act as by free patent. This is as provided in Republic Act
No. 1942, which took effect on June 22, 1957, amending Section 48-b of Commonwealth Act No. 141 which provides: . . . As interpreted
in several cases when the conditions as specified in the foregoing provision are complied with, the possessor is deemed to have acquired,
by operation of law, a right to a grant, a government grant, without the necessity of a certificate of title being issued. The land, therefore,
ceases to be of the public domain, and beyond the authority of the Director of Lands to dispose of. The application for confirmation is a
mere formality, the lack of which does not affect the legal sufficiency of the title as would be evidenced by the patent and the Torrens title
to be issued upon the strength of said patent."
3. In fine, since under the Court's settled doctrine, the acquisitive prescription of alienable or disposable public lands provided for
now in section 48, par. (b) of the Public Land Act takes place by operation of law and the public land is converted to and
becomes private property upon a showing of open and unchallenged possession under bona fide claim of ownership by the
applicants' predecessors-in-interest for the statutory period of thirty years immediately preceding the filing of the application and "it
is not necessary that a certificate of title should be issued in order that said grant may be sanctioned by the court" which right is
expressly backed up by theconclusive presumption or presumption juris et de jure of the statute that the possessor has "performed
all the conditions essential to a Government grant," the applicant Meralco cannot be said to be barred as a corporation from filing
the application for registration of the private property duly acquired by it.
4. It should be noted that respondent judge's decision in the Meralco case expressly finds as established factsthat the Meralco's
predecessors-in-interest had possessed and occupied as owners the land in question for at least over 35 years; Olimpia Ramos

having possessed the same since the last world war in 1941 and then having sold the same on July 3, 1947 to the Piguing spouses
who built a house thereon and continuously possessed the same until they sold the same in turn to the Meralco on August 13,
1976, 12 Meralco's predecessors-in-interest had therefore acquired by operation of the Public Land Act a Government grant to the
property, as well as acquired ownership thereof by right of acquisitive prescription over the land which thereby became private property.
The very definition of prescription as a mode of acquiring ownership as set forth in Art. 1106 of the Civil Code provides that "By
prescription one acquires ownership and other real rights through lapse of time in the manner and under the conditions laid down by law."
The law does not provide that one acquires ownership of a land by prescription only after his title thereto is judicially confirmed. To this
same effect is the ruling inCario vs. Insular Government 13, wherein the U.S. Supreme Court speaking through Justice Holmes held that
It is true that the language of Articles 4 and 5 attributes title to those 'who may prove' possession for the necessary
time and we do not overlook the argument that this means may prove in registration proceedings. It may be that an
English conveyancer would have recommended an application under the foregoing decree, but certainly it was not
calculated to convey to the mind of an Igorot chief the notion that ancient family possessions were in danger, if he
had read every word of it. The words"may prove" (acrediten), as well, or better, in view of the other provisions,
might be taken to mean when called upon to do so in any litigation. There are indications that registration was
expected from all, but none sufficient to show that, for want of it, ownership actually gained would be lost.The
effect of the proof, whenever made, was not to confer title, but simply to establish it, as already conferred by the
decree, if not by earlier law.
To the same effect is the Court's ruling in Legarda and Prieto vs. Saleeby, 31 Phil. 590, that "an owner does not obtain title by
virtue of certificate but rather obtains his certificate by virtue of the fact that he has a fee simple title."
5. Since the public land because private property upon completion of the 30th year of continuous, exclusive, and unchallenged
possession of the applicant Meralco's predecessors-in-interest, particularly the Piguing spouses who sold the private land to the
Meralco, there is no justification for denying the Meralco's application for registration of its duly acquired title to the land.
Meralco's predecessors-in-interest had acquired ownership of the land by acquisitive prescription as provided by the Public Land
Act and by the Civil Code. The land became private property and Meralco duly acquired it by right of purchase. To deny Meralco's
application to register the property because it is not a natural person is unjustified because neither the new constitutional ban under
the 1973 Constitution against private corporations owning lands of the public domain or the Public Land Act's limitation on the
right of application for confirmation of imperfect title to lands of the public domain can be invoked any longer as the land had long
ceased to be public land but had become private property. Meralco's application in effect seeks confirmation of the acquisition of
ownership of the land which had become private property of its predecessors-in-interest, the Piguing spouses who thru their open
and unchallenged possession of the land for over thirty years acquired title thereto by acquisitive prescription and by conclusive
presumption of the Public Land Act itself. There is no legal nor constitutional obstacle to such title being transferred to the Meralco
by right of purchase and traditio for it is not claimed that there is any legal prohibition against the Piguing spouses transferring
the ownership of the land to others (whether natural persons or corporations) such as the applicant Meralco, even before the formal
issuance of the certificate of title to them.
6. To uphold respondent judge's denial of Meralco's application on the technicality that the Public Land Act allows only citizens of
the Philippines who are natural persons to apply for confirmation of their title would be impractical and would just give rise to
multiplicity of court actions. Assuming that there was a technical error in not having filed the application for registration in the
name of the Piguing spouses as the original owners and vendors, still it is conceded that there is no prohibition against their sale of
the land to the applicant Meralco and neither is there any prohibition against the application being refiled with retroactive effect in
the name of the original owners and vendors (as such natural persons) with the end result of their application being granted, because
of their indisputable acquisition of ownership by operation of law and the conclusive presumption therein provided in their favor. It
should not be necessary to go through all the rituals as the great cost of refiling of all such applications in their names and adding to
the overcrowded court dockets when the Court can after all these years dispose of it here and now. (See Francisco vs. City of
Davao 14)
The ends of justice would best be served, therefore, by considering the applications for confirmation as amended to conform to the
evidence, i.e. as filed in the names of the original persons who as natural persons are duly qualified to apply for formal
confirmation of the title that they had acquired by conclusive presumption and mandate of the Public Land Act and who thereafter
duly sold to the herein corporations (both admittedly Filipino corporations duly qualified to hold and own private lands) and
granting the application for confirmation of title to the private lands so acquired and sold or exchanged.
7. All that has been said here applies of course with equal force to the Iglesia case, save that as already stated at the beginning
hereof, the Iglesia application was granted because the Republic presented no evidence in support of its opposition and respondent
judge held in effect that the property had ceased to be land of the public domain and had become private property, the title to which
could be duly issued in the name of the Iglesia as the transferee of its predecessors-in-interest.
8. It should bear emphasis that what are involved here are small parcels of land, of 165 square meters in the Meralco case used for
installation of an "anchor guy" for its steel posts in connection with its tasks as a nationalized domestic corporation to furnish
electrical service to the consumer public, and of 313 square meters in the Iglesia case used as the site of its church built thereon to
minister to the religious needs of its members. In no way, may the letter, intent and spirit of the prohibition of the 1973 Constitution

against corporations "holding alienable lands of the public domain except by lease not to exceed one thousand hectares in area"
(which is beamed against the undue control and exploitation of our public lands and natural resources by corporations, Filipino and
foreign-controlled) be deemed violated or disregarded by the granting of the applications at bar. The two corporations in truth and
in fact do not hold the small parcels of land at bar for their own use or benefit but for the sole use and benefit of the public.
9. With reference to the separate concurring opinion of Mr. Justice De Castro wherein he would blunt the "supposedly (sic) wellestablished doctrine" (at page 1) from the 1909 case of Cario and the 1925 case of Susidown to the 1980 case of Herico (supra, at
pages 5 to 11) and support the contrary pronouncement in Mr. Justice Aquino's main opinion that "as between the State and the
Meralco, the said land is still public land. It would cease to be public land only upon the issuance of the certificate of title to any
Filipino citizen claiming it under section 48(b) [of the Public Land Act]" (at page 5), suffice it to cite his own pronouncement
in Herico (reiterating the well-established and prevailing doctrine which this Court has not overturned, as it cannot overturn the
mandate of the statute that the unchallenged possessor for at least 30 years is "conclusively presumed to have performed all the
conditions essential to a government grant") wherein Mr. Justice De Castro categorically reiterated for the Court that "As
interpretated in several cases . . . the possessor is deemed to have acquired, by operation of law, a right to a grant, a government
grant, without the necessity of a certificate of title being issued. The and, therefore, ceases to be of the public domain, and beyond
the authority of the Director of Lands to dispose of. The application for confirmation is a mere formality, the lack of which does not
affect the legal sufficiency of the titleas would be evidenced by the patent and the Torrens title to be issued upon the strength of said
patent."
In only remains to point out, in order to avoid misapprehension or confusion, that Mr. Justice De Castro's seemingly querulous
statement that "the discussion of the question of whether the land involved is still public oralready private land, is, however,
entirely pointless or an idle exercise, if We consider the provision of Section 14, Article XIV of the Constitution which appears to
have been lost sight of, which provides that 'save in cases of hereditary succession, no private lands shall be transferred or
conveyed except to individuals, corporations, or associations qualified to acquire or hold lands of the public domain'" (at page 2)
that "hence, even if the land involved in the present case is considered private land, the cited section prohibits its acquisition by the
Meralco or Iglesia which admittedly are 'corporations or associations' within the meaning of the aforecited provisions of the New
Constitution. This observation should end all arguments of the issue of whether the land in question is public or private land"
(idem) might mislead one to the wrong conclusion that corporations with 60% Filipino ownership may not own private lands when
the express provisions of Art. XIV, section 9 15 and section 14 as quoted by himself as well as the counterpart provisions of the 1935
Constitution have always expressly permitted Filipino-owned corporations to own private lands, and the only change effected in the 1973
Constitution is section 11 which now prohibits even such Filipino corporations to own or hold lands of the public domain except by lease
not to exceed 1,000 hectares in area.
ACCORDINGLY, I vote for reversal of respondent court's judgment in the Meralco case and for the entry of a new judgment
granting Meralco's application and for affirmance of judgment in the second case granting the Iglesia application.
Footnotes
* The same issue is involved in the following fourteen pending cases. (1) G.R. No. 51756, Iglesia ni Cristo vs.
Director of Lands, et al.; (2) G.R. No 54045, Director of Lands vs. Dynamarine Corporation, et al.; (3) G.R. No.
54276, Director of Lands vs. Iglesia ni Cristo, et al.; (4) G.R. No. 54952, Director of Lands vs. Hon. Gabriel
Valley, Jr., et al.; (5) G.R. No. 55171, Director of Lands vs. Hon. Job B. Madayag, et al.; (6) G.R. No. 55289.
Director of Lands vs. Hon. Candido Villanueva, et al.,; (7) G.R. No. 56025. Republic vs. Hon. Arsenio Gonong, et
al.; (8) G.R. No. 56613, Director of Lands vs. Iglesia ni Cristo, et al.; (9) G.R. No. 57272, Director of Lands vs.
Valenzuela Tannery Corporation, et al.; (1) G.R. No. 57461, Director of Lands vs. Manila Electric Company, et al.;
(11) G.R. No. 58077, Director of Lands vs. Hermanos y Hermanas de Sta. Cruz de Mayo, Inc., et al.; (12) G.R. No.
58089, Director of Lands vs. Continental Leaf Tobacco (Phil.), et al.; (13) G.R. No. 58117, Director of Lands vs.
Hon. Emmanuel Cleto, et al., and (14) G.R. No. 58906, Director of Lands vs. United Church of Christ in the Phil.,
et al.
1 Decision, 6.
2 120 Phil. 1417 (1964) (per Concepcion, J.)
3 Cf. Fuller, Legal Fictions (1967).
SEPARATE OPINION
1 45 SCRA 437.
2 Section 11, Article XIV, Constitution.
3 See Section 48 of the Public Land Act.
4 Section 11, Article XIV, Constitution
TEEHANKEE

1 48 Phil. 424.
2 95 SCRA 437 (Jan. 22, 1980), citing Susi vs. Razon, 48 Phil. 424; Mesina vs. Vda. de Sonza, 108 Phil. 251
(1960).
3 Emphasis supplied.
4 At page 6; emphasis supplied.
5 At pages 4 and 5 thereof.
6 Emphasis supplied.
7 108 Phil. 251, 253 & 255 (1960).
8 63 Phil. 654 655 (1963), citing De Los Reyes vs. Razon, 38 Phil. 480; Susi vs. Razon, supra, and PNB vs. Luis,
53 Phil. 649. See also Balboa vs. Farrales, 51 Phil. 498, 503 (1928).
9 21 SCRA 743, 747-748 (1967).
10 29 SCRA 760, 779 (1969)
11 95 SCRA 437, 443-444, per De Castro, J.
12 Record, p. 22
13 41 Phil. 935 (1909), 212 U.S. 449, 53 Lawyers ed. 594; 10 emphasis supplied.
14 12 SCRA 628, 634.
15 "Sec. 9. The disposition, development, exploitation, or utilization of any of the natural resources of the
Philippines shall be limited to citizens of the Philippines, or to corporations or associations at least sixty per
centum, of the capital of which is owned by such citizens." (Art. XIV, 1973 Constitution).

SUSI v. DIRECTOR OF LANDS (1925)

DOCTRINE: A presumption juris et de jure is established in paragraph (b) of section 45 of Act No. 2874, amending Act No. 926,
that all the necessary requirements for a grant by the Government are complied with when a person is in actual and physical
possession, personally and through his predecessors, of an agricultural land of the public domain openly, continuously, exclusively
and publicly since July 26, 1894, with a right to a certificate of title to said land.
FACTS:
- Valentin Susi filed a complaint in CFI Pampanga against Angela Razon and the Director of Lands, praying to be declared sole and
absolute owner of the subject parcel of land. He also prayed that the sale made by the Director of Lands in favor of Razon be
annulled on the ground that the land is a private property. Lastly, he prayed for damages and costs against Razon.
a.

Answer of Director Lands: Denied each allegation. Special defense - subject land was part of the public domain
before its sale to Angela Razon, which was made in accordance with law.

- CFIs JUDGMENT: Susi is entitled to the possession of the land; The sale to Razon is annulled. Certificate of title issued in
her name was cancelled. Costs against Razon.
b. The Director of Lands appealed.
- The subject landholding used to be a fishpond owned by Nemesio Pinlac. On Dec 18, 1880 Pinlac sold it to Apolonio Garcia and
Basilia Mendoza for P12 with right to repurchase.
- After 8 years and the destruction of the fishpond, Garcia and Mendoza sold it to Valentin Susi for P12 with the right to repurchase.
The possession and occupation of the land by Susi and his predecessors was found to have been open, continuous, adverse and
public, without any interruption, except during the revolution, and except when Razon commenced an action in CFI Pampanga in
1913 to recover the possession of the land. This action was dismissed.
-Subsequently, in 1914 Razon applied to the Director of Lands for the purchase of the land. Susi filed an opposition asserting his
possession of the land for 25 years. After an administrative investigation, Susis opposition was overruled. A certificate of title was
issued in Razons name and registered in the register of deeds Pampanga on August 31, 1921. Armed with said document, Razon
required Susi to vacate the land, he refused to do so, she brought an action for forcible entry and unlawful detainer in the justice of
the peace court of Guagua, Pampanga, which was dismissed for lack of jurisdiction, the case being one of title to real property.
Valentin Susi then brought this action.
Issue: Who has better right to the land Susi or Razon? SUSI.
Ratio:
- It clearly appears from the evidence that Valentin Susi has been in possession of the land in question openly, continuously,
adversely, and publicly, personally and through his predecessors for at least 45 years. Court took note of the fact that in 1880 when
the land was sold by Pinlac he had already made a fish pond thereon. The Court declared that the Carino doctrine is applicable
because Pinlacs possession can hardly be estimated because it has been so long that it is beyond the reach of memory.
a.

When Razon applied for the purchase of said land, Susi had already been in possession for 34 years.

- Furthermore, there is a presumption juris et de jure in favor of Susi that is established in paragraph (b) of section 45 of Act No.
2874, amending Act No. 926, that all the necessary requirements for a grant by the Government were complied with, for he has
been in actual and physical possession, personally and through his predecessors, of an agricultural land of the public domain
openly, continuously, exclusively and publicly since July 26, 1894, with a right to a certificate of title to said land under the
provisions of Chapter VIII of said Act.
b. Susi had already acquired a grant of the government by operation of law when Razon applied for a grant with the
Director of lands. It is not necessary that certificate of title should be issued in order that a grant may be sanction
by the courts. An application therefore is sufficient, under the provisions of section 47 of Act No. 2874.
b.i.
Susi having acquired the land by a grant of the State, it had already ceased to be the public
domain and had become private property, at least by presumption.
Being private property, Director of lands could no longer dispose of the land to Razon for he/the
govt no longer had any title or control over it. Thus, Razon acquired no rights to the land because
the sale if VOID.
- The contention of the Director of lands that the land is public domain therefore Susi cannot maintain an action to recover
possession is untenable. As above stated the land had already become the private property of Susi through operation of law. Thus,
Susi has the right to bring an action to recover possession even though he lacks judicial sanction of his title.
G.R. No. L-24066

December 9, 1925

VALENTIN SUSI, plaintiff-appellee,

vs.
ANGELA RAZON and THE DIRECTOR OF LANDS, defendants. THE DIRECTOR OF LANDS, appellant.
Acting Attorney-General Reyes for appellant.
Monico R. Mercado for appellee.

VILLA-REAL, J.:
This action was commenced in the Court of First Instance of Pampanga by a complaint filed by Valentin Susi against Angela Razon
and the Director of Lands, praying for judgment: (a) Declaring plaintiff the sole and absolute owner of the parcel of land described
in the second paragraph of the complaint; (b) annulling the sale made by the Director of Lands in favor of Angela Razon, on the
ground that the land is a private property; (c) ordering the cancellation of the certificate of title issued to said Angela Razon; and (d)
sentencing the latter to pay plaintiff the sum of P500 as damages, with the costs.
For his answer to the complaint, the Director of Lands denied each and every allegation contained therein and, as special defense,
alleged that the land in question was a property of the Government of the United States under the administration and control of the
Philippine Islands before its sale to Angela Razon, which was made in accordance with law.
After trial, whereat evidence was introduced by both parties, the Court of First Instance of Pampanga rendered judgment declaring
the plaintiff entitled to the possession of the land, annulling the sale made by the Director of Lands in favor of Angela Razon, and
ordering the cancellation of the certificate of title issued to her, with the costs against Angela Razon. From this judgment the
Director of Lands took this appeal, assigning thereto the following errors, to wit: (1) The holding that the judgment rendered in a
prior case between the plaintiff and defendant Angela Razon on the parcel of land in question is controlling in this action; (2) the
holding that plaintiff is entitled to recover the possession of said parcel of land; the annulment of the sale made by the Director of
Lands to Angela Razon; and the ordering that the certificate of title issued by the register of deeds of the Province of Pampanga to
Angela Razon by virtue of said sale be cancelled; and (3) the denial of the motion for new trial filed by the Director of Lands.
The evidence shows that on December 18, 1880, Nemesio Pinlac sold the land in question, then a fish pond, tho Apolonio Garcia
and Basilio Mendoza for the sum of P12, reserving the right to repurchase the same (Exhibit B). After having been in possession
thereof for about eight years, and the fish pond having been destroyed, Apolonio Garcia and Basilio Mendoza, on September 5,
1899, sold it to Valentin Susi for the sum of P12, reserving the right to repurchase it (Exhibit A). Before the execution of the deed of
sale, Valentin Susi had already paid its price and sown "bacawan" on said land, availing himself of the firewood gathered thereon,
with the proceeds of the sale of which he had paid the price of the property. The possession and occupation of the land in question,
first, by Apolonio Garcia and Basilio Mendoza, and then by Valentin Susi has been open, continuous, adverse and public, without
any interruption, except during the revolution, or disturbance, except when Angela Razon, on September 13, 1913, commenced an
action in the Court of First Instance of Pampanga to recover the possession of said land (Exhibit C), wherein after considering the
evidence introduced at the trial, the court rendered judgment in favor of Valentin Susi and against Angela Razon, dismissing the
complaint (Exhibit E). Having failed in her attempt to obtain possession of the land in question through the court, Angela Razon
applied to the Director of Lands for the purchase thereof on August 15, 1914 (Exhibit C). Having learned of said application,
Valentin Susi filed and opposition thereto on December 6, 1915, asserting his possession of the land for twenty-five years (Exhibit
P). After making the proper administrative investigation, the Director of Lands overruled the opposition of Valentin Susi and sold
the land to Angela Razon. By virtue of said grant the register of deeds of Pampanga, on August 31, 1921, issued the proper
certificate of title to Angela Razon. Armed with said document, Angela Razon required Valentin Susi to vacate the land in question,
and as he refused to do so, she brought and action for forcible entry and detainer in the justice of the peace court of Guagua,
Pampanga, which was dismissed for lack of jurisdiction, the case being one of title to real property (Exhibit F and M). Valentin Susi
then brought this action.
With these facts in view, we shall proceed to consider the questions raised by the appellant in his assignments of error.

lawphi1.net

It clearly appears from the evidence that Valentin Susi has been in possession of the land in question openly, continuously,
adversely, and publicly, personally and through his predecessors, since the year 1880, that is, for about forty-five years. While the
judgment of the Court of First Instance of Pampanga against Angela Razon in the forcible entry case does not affect the Director of
Lands, yet it is controlling as to Angela Razon and rebuts her claim that she had been in possession thereof. When on August 15,
1914, Angela Razon applied for the purchase of said land, Valentin Susi had already been in possession thereof personally and
through his predecessors for thirty-four years. And if it is taken into account that Nemesio Pinlac had already made said land a fish
pond when he sold it on December 18, 1880, it can hardly be estimated when he began to possess and occupy it, the period of time
being so long that it is beyond the reach of memory. These being the facts, the doctrine laid down by the Supreme Court of the
United States in the case of Cario vs. Government of the Philippine Islands (212 U. S., 449 1), is applicable here. In favor of
Valentin Susi, there is, moreover, the presumption juris et de jure established in paragraph (b) of section 45 of Act No. 2874,
amending Act No. 926, that all the necessary requirements for a grant by the Government were complied with, for he has been in
actual and physical possession, personally and through his predecessors, of an agricultural land of the public domain openly,
continuously, exclusively and publicly since July 26, 1894, with a right to a certificate of title to said land under the provisions of
Chapter VIII of said Act. So that when Angela Razon applied for the grant in her favor, Valentin Susi had already acquired, by

operation of law, not only a right to a grant, but a grant of the Government, for it is not necessary that certificate of title should be
issued in order that said grant may be sanctioned by the courts, an application therefore is sufficient, under the provisions of section
47 of Act No. 2874. If by a legal fiction, Valentin Susi had acquired the land in question by a grant of the State, it had already
ceased to be the public domain and had become private property, at least by presumption, of Valentin Susi, beyond the control of
the Director of Lands. Consequently, in selling the land in question to Angela Razon, the Director of Lands disposed of a land over
which he had no longer any title or control, and the sale thus made was void and of no effect, and Angela Razon did not thereby
acquire any right.
The Director of Lands contends that the land in question being of the public domain, the plaintiff-appellee cannot maintain an
action to recover possession thereof.
lawphi1.net

If, as above stated, the land, the possession of which is in dispute, had already become, by operation of law, private property of the
plaintiff, there lacking only the judicial sanction of his title, Valentin Susi has the right to bring an action to recover possession
thereof and hold it.
For the foregoing, and no error having been found in the judgment appealed from, the same is hereby affirmed in all its parts,
without special pronouncement as to costs. So ordered.
Avancea,
C.J.,
Malcolm,
Johnson, J., took no part.

Street,

Villamor,

Ostrand,

Johns,

and

Romualdez,

JJ.,

concur.

Footnotes
1 41 Phil., 935.

G.R. No. L-54045

July 28, 1987

THE DIRECTOR OF LANDS, petitioner,

vs.
HON. EDUARDO R. BENGZON, CFI of BATANGAS and DYNAMARINE CORPORATION substituted by
ENGINEERING EQUIPMENT, INC. (EEI), respondents.
GANCAYCO, J.:
This is a petition for review on certiorari filed by the Director of Lands from a decision dated May 7, 1980 of the Court of First
Instance of Batangas, Branch I in Land Registration Case No. N-900, LRC, Rec. No. N-46755 entitled "Dynamarine Corporation

substituted by Engineering Equipment, Inc., (EEI), Applicant, versus The Director of Lands, et al., Oppositors."
The facts of the case are as follows:
On February 10, 1975, Dynamarine Corporation filed an application with the lower court for the registration and confirmation of its
title to the following properties:
Ten (10) parcels of land, situated in the Barrio of Sta. Maria, Municipality of Bauan, Province of Batangas. The boundaries
of said parcels are as follows:
1. A parcel of land (Lot 1, plan PSU-238719-Amd). Bounded on the NE, by the Sta. Maria River and property of the Heirs
of Pedro Corona; on the SE., by the Batangas Bay; on the SW. by property of the Heirs of Herbert M. Peterson, Jr., and on
the NW. by Lot 3. Point "1" is S. 69 deg. 28" W., 4145.24 M. from BLLM 1, Bauan, Batangas. Area: ONE THOUSAND
TWO HUNDRED SIXTY ONE (1,261) SQUARE METERS, more or less.
2. A parcel of land (Lot 2, plan Psu-238719-Amd.). Bounded on the NE. by property of Angel Aguila; and on the SE. W.
and NW. by the Sta. Maria River: Point "1" is S. 69 deg. 07'W., 4107.64 m. from BLLM 1, Bauan, Batangas, Area: TWO
THOUSAND TWO HUNDRED FOURTEEN (2,214) SQUARE METERS, more or less.
3. A parcel of land (Lot 3, plan Psu-238719-Amd.). Bounded on the SW. by the Sta. Maria River and Lot 1; on the SW. by
property of the Heirs of Herbert M. Peterson, and on the NW. by Lot 4, Point "I", Bauan, Batangas. Area: ONE
THOUSAND FIFTEEN (1,015) SQUARE METERS, more or less.
4. A parcel of land (Lot 1, plan Psu-04-001036). Bounded on the N. by Lot 2; on the E. by property of Dynamarine
Corporation; on the S. by the Batangas Bay; on the W. by property of Pedro Manage; and on the NW. by property of Basilia
Arevalo. Point "1" is S. 69 deg. 92'W., 4274.20 m. from BLLM 1, Bauan, Batangas. Area: EIGHT HUNDRED SIX (806)
SQUARE METERS, more or less.
5. A parcel of land (Lot 3, plan Psu-04-001036). Bounded on the S. by property of Dynamarine Corporation; on the S. by
Lot 2; on the SW., by property of Basilia Arevalo; and on the NW. by Lot 4. Point "l" is S. 69 deg. 36'W., 4295.60 m. from
BLLM 1, Bauan, Batangas, Area: FOUR HUNDRED SIXTY ONE (461) SQUARE METERS, more or less.
6. A parcel of land (Lot 4 plan Psu-04-001036). Bounded on the NE. by properties of Aurora P. Silang and Dynamarine
Corporation; on the SE. by Lot 3; on the SW. by properties of Basilia Arevalo, Pedro Silang and Felipe Marquez; and on
the NW. by property of Lolita Panopio. Point "I" is S. 69 deg. 44'N., 4265.30 m. from BLLM 1, Bauan, Batangas. Area:
ONE THOUSAND SEVEN HUNDRED TWENTY SIX (1,726) SQUARE METERS, more or less.
7. A parcel of land (plan Psu-239681). Bounded on the NE. by properties of Filomino Hernandez, Emilio Medrano and
Pedro Corona; on the S. by the Batangas Bay; on the SW. by properties of the Heirs of Rose Panopio and Pascual Silang &
Maria Panopio; and on the NW. by the Provincial Road. Point "1" is S. 71 deg. 05'W., 4166.50 m. from BLLM 1, Bauan,
Batangas. Area: FIVE THOUSAND (5,000) SQUARE METERS, more or less.
8. A parcel of land (Lot 2, plan Psu-04-000989). Bounded on the NE. by property of the Heirs of Herbert M. Peterson, Jr.,
on the S. by the Batangas Bay; on the SW. by property of Encarnacion, Maria and Vicente Panopio; and on the NW. by Lot
1. Point "1" is S. 70 deg. 29'W., 4194.60 m. from BLLM 1, Bauan, Batangas. Area: THREE THOUSAND EIGHT
HUNDRED NINETY THREE (3,893) SQUARE METERS, more or less.
9. A parcel of land (Lot 1, plan Psu-239680 Amd.). Bounded on the NE. by property of the Heirs of Rose Panopio (before)
Dynamarine Corporation (now); on the SE. by lot 1; on the SW. by properties of the Heirs of Teodora Ilagan, Aniceto
Panopio, Heirs of Ambrosio Panopio and Maximo Panopio, and on the SW. by property of Aurora Silang. Point "1" is S. 70
deg. 29'W., 4256.89 m. from BLLM 1, Bauan, Batangas. Area: FIVE THOUSAND THREE HUNDRED TWENTY
SEVEN (5,327) SQUARE METERS, more or less; and
10. A parcel of land(lot 2,plan Psu-23968O-Amd.).Bounded on the NE. by property of the Heirs of Rose Panopio (before)
Dynamarine Corporation (now); on the S. by Batangas Bay; on the SW. by property of the Heirs of Teodoro Aniceto and
Melchor Panopio and Heirs of Teodora Ilagan and on the NW. by Lot 1. Point "1" is S., 70 deg. 29'W., 4256.89 m. from
BLLM 1, Bauan, Batangas. Area: FOUR THOUSAND FIVE HUNDRED FORTY SIX (4,546) SQUARE METERS, more
or less. 1
Except for one lot which was acquired by exchange, the above-described properties were acquired by Dynamarine Corporation by
purchase on the following dates:
Description of Lot

Date of Acquisition

Lot 1 (Plan Psu-239689)

December 8, 1973

Lot 2 (Plan Psu-239680)

November 11, 1973

Lot 2 (Plan Psu-04-000989)

October 30, 1973

Lots 1 & 3 (Plan Psu-04-00136)

December 3, 1974

Lot 4 (Plan Psu-04-00136)

December 3, 1974

Lot 1 (Plan Psu-239681)

November 13, 1973

Lots 1 & 2 (Plan Psu-238719)

October 30, 1973

Lot 3 (Plan Psu-238719)

December 6, 19732 2

Before acquisition by the Dynamarine Corporation, all the lots in question have been in the possession of the corporation's
predecessors-in-interest for more than thirty years, to wit:
Description
of Lot

Predecessor-in-Interest

Date
of
Possession

Lot 1 (Plan
Psu-239680)

Cirilo Panopio

1927

Lot 2 (Plan
Psu-239680)

Jose Panopio

1927

lot 2 (Plan
Psu-04000989)

Cirilo Panopio

1929

Lot 1 (Plan
Psu-04001036)

Hilarion Marquez

1907

Lot 3 (Plan
Psu-04001036)

Ambrosio Panopio

1907

Lot 4 (Plan
Psu-04001036)

Teodoro Ilagan

1907

Lot 1 (Plan
Psu-239681)

Cirilo Panopio

1927

Cirilo Panopio

19323

Lots 1, 2, 3
(Plan Psu238719)

On April 3, 1978, as security for banking and credit facilities granted to it, a "Real Estate Chattel Mortgages" covering the lots in
question was executed by Dynamarine Corporation in favor of Citibank, N.A. and the Manila Banking Corporation. Later, these
Mortgages were foreclosed and the properties were sold at public auction wherein the Manila Banking Corporation was the highest
bidder.4
On October 10, 1978, Dynamarine Corporation, for valuable consideration, executed a Deed of Assignment of Redemption
Rights5 in favor of Engineering Equipment, Inc. (heretofore called respondent corporation), covering its redemption rights over the
lots. Subsequently, the Manila Banking Corporation executed a Deed of Assignment 6 covering the same lots in favor of respondent
corporation.
On August 2, 1979, the lower court issued an order allowing the substitution by respondent corporation of Dynamarine Corporation
as applicant in the case.
After hearing the witnesses and reception of evidence, the lower court on May 7, 1980 rendered the questioned decision decreeing
the registration of the ten parcels of land in favor of respondent corporation. The dispositive portion is as follows:
IN VIEW OF THE FOREGOING CONSIDERATIONS, and finding the application for registration and grant of title under
Act 496 as amended, to be well-founded and fully substantiated by evidence sufficient and requisite under the law, the
Court hereby decrees the registration of the aforementioned ten (10) parcels of land, shown in the plans Psu-239681 (Exh.
"H"); Psu-04-000989 (Exh. "N"), Psu-04-001036 (Exh. "T"); Psu-239680 (Exh. "JJ"); and Psu-238719 (Exh. "MM"), and
more particularly described in the Technical Descriptions (Exhs. "K", "R", "W", "X", "Y", "NN", "00", "00-l", and "00-2"),
an situated in the barrio of Sta. Maria, Municipality of Bauan, Province of Batangas, Philippines, in favor of herein
applicant ENGINEERING EQUIPMENT, INC., (EEI), with principal office address at 391 J. Rizal Street, Mandaluyong,
Metro Manila.
Once this decision shall have become final, let an order be issued directing the Commissioner of Land Registration
Commission, Quezon City, to issue the corresponding decree.
SO ORDERED.
The said decision was based on the following findings of the lower court: that the subject properties are ancestral properties
transferred hereditarily from ancestors to descendants; 7 that respondent corporation owned and possessed the subject properties
under a bona-fide claim of ownership;8 and, that by itself and through predecessors-in-interest, respondent corporation had been in
open, peaceful, continuous, public and uninterrupted possession of the properties as owner in fee simple for no less than fifty
years.9
In this petition, the Director of Lands assails the lower court's decision as being violative of Article XIV, Section 11 of the 1973
Constitution which reads:
The National Assembly, taking into account conservation, ecological, and developmental requirements of the natural
resources, shall determine by law the size of lands of the public domain which may be developed, held or acquired by, or
leased to, any qualified individual, corporation, or association, and the conditions therefor. No private corporation or
association may hold alienable lands of the public domain except by lease not to exceed one thousand hectares in area; ...
(Emphasis supplied.)
Petitioner contends that under the above constitutional provision, respondent corporation, being a private corporation, may not
acquire the ten parcels of land as they are part of public domain. In this regard, it is maintained by petitioner that mere possession
for more than thirty (30) years did not vest in respondent corporation's predecessors-in-interest any title which could be transmitted
to respondent corporation.10 According to him, until public lands are actually registered, they retain their public character 11 and it
is only after a possessor has been issued a certificate of title that the land can be considered private land. 12
To support the above-mentioned arguments, petitioner cites sections 48(b) and 50 of the Public Land Act, the pertinent provisions
of which read:
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: . . .
(b) Those who by themselves or through their predecessors-in-interest have been in open, continuous, exclusive, and
notorious possession and occupation of agricultural lands of the public domain, under abona fide claim of acquisition or
ownership, for at least thirty years 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.

SEC. 50. Any person or persons, or their legal representatives or successors in right, claiming any lands or interest in lands
under the provisions of this chapter, must in every case present an application to the proper Court of First Instance, praying
that the validity of the alleged title or claim be inquired into and that a certificate of title be issued to them under the
provisions of the Land. Registration Act. ...
Petitioner claims that under the cited laws, respondent corporation may not apply for judicial confirmation of title to the lands.
Clearly, this petition raises two basic issues, to wit: (1) whether the lands in question are part of the public domain; and (2) whether
respondent corporation may apply for judicial confirmation of said lands. Both are hereby resolved in favor of respondent
corporation.
The ten parcels of land, contrary to petitioner's advancements, are private lands. In the lower court, it was clearly proven that
respondent corporation's predecessors-in-interest have been in continuous and uninterrupted possession of the properties for more
than thirty years before they were acquired by respondent corporation. By virtue of such possession, said properties were
automatically segregated from the mass of public domain. Hence, the constitutional prohibition does not apply.
Petitioner's position that the properties in question are lands of the public domain must be rejected as it is directly opposed to the
doctrine laid down in The Director of Lands vs. Intermediate Appellate Court and Acme Plywood & Veneer Co., Inc., 13 a case
squarely in point. Mr. Justice Andres R. Narvasa who wrote the opinion stated:
... that alienable public land held by a possessor, personally or through his predecessors-in-interest, openly, continuously
and exclusively for the prescribed statutory period (30 years under the Public Land Act, as amended) is converted to private
property by the mere lapse or completion of said period, ipso jure.
The above is a reaffirmation of the principle established in the earlier cases of Carino vs. Insular Government,14Suzi vs.
Razon,15 and Herico vs. Dar,16 that open, exclusive and undisputed possession of alienable public land for the period prescribed by
law creates the legal fiction whereby the land, upon completion of the requisite period ipso jure and without the need of judicial or
other sanction, ceases to be public land and becomes private property.
We cannot subscribe to the view of petitioner that it is only after a possessor has been issued a certificate of title that the land can be
considered private land. In interpreting the provisions of Section 48 (b) of Commonwealth Act No. 1, this Court said in Herico vs.
Dar,17 "... when the conditions as specified in the foregoing provision are complied with, the possessor is deemed to have acquired,
by operation of law, a right to a grant, a government grant, without the necessity of a certificate of title being issued. The land,
therefore, ceases to be of the public domain, and beyond the authority of the Direc tor of Lands to dispose of. The application for
confirmation is a mere formality, the lack of which does not affect the legal sufficiency of the title as would be evidenced by the
patent and the Torrens title to be issued upon the strength of said patent."
This was well-explained in the case of Suzi vs. Razon wherein it was emphasized that it is not necessary that a certificate of title
should be issued in order that said grant may be sustained by the Courts, an application therefor being sufficient.
As in The Director of Lands vs. Intermediate Appellate Court and Acme Plywood & Veneer Co., Inc., We hereby incorporate in this
decision the dissent (which became the majority opinion in the aforementioned case) of then Justice now Chief Justice Claudio
Teehankee in the case of Manila Electric Company vs. Castro-Bartolome 18 to repudiate petitioner's contention that under the
Public Land Act respondent corporation, being a corporate entity, may not apply for judicial confirmation of title. Thus,
6. To uphold respondent judge's denial of Meralco's application on the technicality that the Public Land Act allows only
citizens of the Philippines who are natural persons to apply for confirmation of their title would be impractical and would
just give rise to multiplicity of court actions. Assuming that there was a technical error in not having filed the application
for registration in the name of the Piguing spouses as the original owners and vendors, still it is conceded that there is no
prohibition against their sale of the land to the applicant Meralco and neither is there any prohibition against the application
being refiled with retroactive effect in the name of the original owners and vendors (as such natural persons) with the end
result of their application being granted, because of their indisputable acquisition of ownership by operation of law and the
conclusive presumption therein provided in their favor, It should not be necessary to go through all the rituals at the great
cost of refiling of all such applications in their names and adding to the overcrowded court dockets when the Court can
after all these years dispose of it here and now. (See Francisco vs. City of Davao)
The ends of justice would best be served, therefore, by considering the applications for confirmation as amended to
conform to the evidence, i.e. as filed in the names of the original persons who as natural persons are duly qualified to apply
for formal confirmation of the title that they had acquired by conclusive presumption and mandate of the Public Land Act
and who thereafter duly sold to the herein corporations (both admittedly Filipino corporations duly qualified to hold and
own private lands) and granting the applications for confirmation of title to the private lands so acquired and sold or
exchanged.
WHEREFORE, in the light of the above, the petition is DENIED for lack of merit. No costs.
SO ORDERED.

Teehankee, C.J., Narvasa, Cruz and Paras, JJ., concur.

Footnotes
1 Pp. 29-31, Rollo.
2 P 16, Rollo.
3 P. 113, Rollo..
4 P. 162, Rollo.
5 P. 162, Rollo; Exh. EEE.
6 P. 162, Rollo; Exh. FFF.
7 Page 5, Decision; p. 33, Rollo.
8 Page 17, Decision; p. 45, Rollo.
9 Page 17, Decision: p. 45, Rollo.
10 P. 20, Rollo.
11 P. 23, Rollo.
12 P. 118, Rollo.
13 G.R. No. 73002; December 29, 1986; 146 SCRA 509, 522.
14 42 Phil. 935.
15 48 Phil. 424.
16 95 SCRA 437.
17 Citing Suzi vs. Razon, et al., 48 Phil. 424 and Mesina vs. Pineda Vda. de Sonza, G.R. No. L-14722, May 25, 1960.
18 114 SCRA 799.

UNITED STATES v. CAUSBY ET UX.

No. 630
SUPREME COURT OF THE UNITED STATES
328 U.S. 256; 66 S. Ct. 1062; 90 L. Ed. 1206; 1946 U.S. LEXIS 3008
May 1, 1946, Argued
May 27, 1946, Decided
PRIOR HISTORY: CERTIORARI TO THE COURT OF CLAIMS.
The Court of Claims granted respondents a judgment for the value of property destroyed and damage to their property
resulting from the taking of an easement over their property by low-flying military aircraft of the United States, but
failed to include in its findings of fact a specific description of the nature or duration of the easement. 104 Ct. Cls. 342,
60 F.Supp. 751. This Court granted certiorari. 327 U.S. 775. Reversed and remanded, p. 268.
DISPOSITION: 104 Ct. Cls. 342, 60 F.Supp. 751, reversed and remanded.
CASE SUMMARY:
PROCEDURAL POSTURE: Certiorari was granted to the Court of Claims, which rendered a judgment in
respondents' favor for the value of property destroyed and damage to their property resulting from the taking of an
easement over their property by low-flying United States military aircraft. It failed to include in its findings of fact a

specific description of the nature or duration of the easement.

OVERVIEW: The lower court granted respondent landowners a judgment for the value of property destroyed, and
damage to their property, resulting from the taking of an easement over their property by low-flying United States
military aircraft. The court agreed with the finding that there had been a taking of respondents' property within the
meaning of U.S. Const. amend. V. The court held that a physical invasion of the property was not necessary where there
was an intrusion so immediate and direct as to subtract from respondents' full enjoyment and use of the property.
Further, the damages were not merely consequential; they were the product of a direct invasion of respondents' domain.
The United States Supreme Court reversed and remanded the action, however, on the basis that the record was not clear
whether the easement taken was temporary or permanent. The court remanded the cause for a determination of the
necessary findings regarding the nature of the easement.
OUTCOME: The United States Supreme Court reversed and remanded the action involving respondents' claim of a
taking of their property as a result of low-flying United States military aircraft, on the ground that the record was not
clear whether the easement taken was permanent or temporary. The Court affirmed the finding that an easement in
respondents' property had been taken within the meaning of the Fifth Amendment.

BACHRACH v TALISAY SILAY

Plaintiff-appellee:Bachrach Motor Co., Inc.
Defendants-appellees:Talisay-Silay Milling Co. et al.
Intervenor-appellant:Philippine National Bank
Facts:

22 Dec 1923, Talisay-Silay was indebted to PNB. To secure the loan, Talisay induced its planters one of whomwas
Mariano Lacson Ledesma to mortgage their land. The central, to compensate the planters for mortgagingtheir property,
undertook to credit the owners of the plantation every year with a sum equal to 2% of thedebt secured accdg to the
yearly balance
. The payment to be made as soon as the central was freed of its debts

Mariano sold his land to Cesar Ledesma for P7500

Bachrach on the other hand was a creditor of Mariano Ledesma. When Mariano could no longer pay Bachrach,it went
after Talisay (original complaint), praying for the delivery of P13850 Talisay owed to Mariano as bonusstated in the first
paragraph, or any instrument of credit. It also prayed for accounting of whatever the centralowed to Mariano by way
of bonus, dividend, etc., as well as the nullification of the sale made to Cesar Ledesma

PNB filed third party claim alleging a preferential right over Marianos credit owed by Talisay
as part of thecivil fruits of the land mortgaged
to the bank. BAchrach contested this

Talisay prayed for the absolution of 7500 of the credit as it belonged to Cesar Ledesma as buyer in good faith.All
parties later agreed to respect Cesars credit and absolved him from the complaint and ordered delivery tohim of P7500

Trial court ruled in favor of Bachrach, awarding it P11,076.02 of Marianos bonus from Talisay. Hence
thisappeal
Issues:
W/N the bonus was a civil fruit which formed part of the mortgaged land NO
Held and Ratio:
NO. Art 355 of the old Civil Code (Art 442 of the current Civil Code) considers three things ascivil fruits: rents of
buildings, proceeds from leases of lands, and income from perpetual of life annuities or othersimilar sources of
revenue. The bonus in question was neither rent of a building nor land. For it to come under the
coverage of income, it must be obtained from the land. In this case however,
[the] bonus bears no immediate but only aremote and accidental relation to the land
. T h e c e n t r a l g r a n t e d i t a s c o m p e n s a t i o n f o r t h e r i s k t h a t t h e landowners entered in mortgaging
their lands. If the bonus was an income of any kind, it comes from the assumption of risk, and not from
the land itself. Thus, it is distinct and independent from the property referred toin the mortgage to the bank

G.R. No. 35223

September 17, 1931

THE BACHRACH MOTOR CO., INC., plaintiff-appellee,

vs.
TALISAY-SILAY MILLING CO., ET AL., defendants-appellees.
THE PHILIPPINE NATIONAL BANK, intervenor-appellant.
Roman J. Lacson for intervenor-appellant.
Mariano Ezpeleta for plaintiff-appellee.
Nolan and Hernaez for defendants-appellees Talisay-Silay Milling Co. and Cesar Ledesma.
ROMUALDEZ, J.:
This proceeding originated in a complaint filed by the Bachrach Motor Co., Inc., against the Talisay-Silay Milling Co., Inc., for the
delivery of the amount P13,850 or promissory notes or other instruments or credit for that sum payable on June 30, 1930, as bonus
in favor of Mariano Lacson Ledesma; the complaint further prays that the sugar central be ordered to render an accounting of the
amounts it owes Mariano Lacson Ledesma by way of bonus, dividends, or otherwise, and to pay the plaintiff a sum sufficient to
satisfy the judgment mentioned in the complaint, and that the sale made by said Mariano Lacson Ledesma be declared null and
void.
The Philippine National Bank filed a third party claim alleging a preferential right to receive any amount which Mariano Lacson
Ledesma might be entitled to from the Talisay-Silay Milling Co. as bonus, because that would be civil fruits of the land mortgaged
to said bank by said debtor for the benefit of the central referred to, and by virtue of a deed of assignment, and praying that said
central be ordered to delivered directly to the intervening bank said sum on account of the latter's credit against the aforesaid

Mariano Lacson Ledesma.

The corporation Talisay-Silay Milling Co., Inc., answered the complaint stating that of Mariano Lacson Ledesma's credit, P7,500
belonged to Cesar Ledesma because he had purchased it, and praying that it be absolved from the complaint and that the proper
party be named so that the remainder might be delivered.
Cesar Ledesma, in turn, claiming to be the owner by purchase in good faith an for a reconsideration of the P7,500 which is a part of
the credit referred to above, answered praying that he be absolved from the complaint.
The plaintiff Bachrach Motor Co., Inc., answered the third party claim alleging that its credit against Mariano Lacson Ledesma was
prior and preferential to that of the intervening bank, and praying that the latter's complaint be dismissed.
At the trial all the parties agreed to recognize and respect the sale made in favor of Cesar Ledesma of the P7,500 part of the credit
in question, for which reason the trial court dismissed the complaint and cross-complaint against Cesar Ledesma authorizing the
defendant central to deliver to him the aforementioned sum of P7,500. And upon conclusion of the hearing, the court held that the
Bachrach Motor Co., Inc., had a preferred right to receive the amount of P11,076.02 which was Mariano Lacson Ledesma's bonus,
and it ordered the defendant central to deliver said sum to the plaintiff.
The Philippine National Bank appeals, assigning the following alleged errors as committed by the trial court:
1. In holding that the bonus which the Talisay-Silay Milling Co., Inc., bound itself to pay the planters who had mortgaged
their land to the Philippine National Bank to secure the payment of the debt of said central to said bank is not civil fruits of
said land.
2. In not holding that said bonus became subject to the mortgage executed by the defendant Mariano Lacson Ledesma to
the Philippine National Bank to secure the payment of his personal debt to said bank when it fell due.
3. In holding that the assignment (Exhibit 9, P.N.B.) of said bonus made on March 7, 1930, by Mariano Lacson Ledesma to
the Philippine National Bank to be applied to the payment of his debt to said Philippine National Bank is fraudulent.
4. In holding that the Bachrach Motor Co. Inc., in civil case No. 31597 of the Court of First Instance of Manila levied a
valid attachment upon the bonus in question.
5. In admitting and considering the supplementary complaint filed by the Bachrach Motor Co., Inc., alleging as a cause of
action the attachment of the bonus in question which said Bachrach Motor Co., Inc., in civil case No. 31821 of the Court of
First Instance of Manila levied after the filing of the original complaint in this case, and after Mariano Lacson Ledesma in
this case had been declared in default.
6. In holding that the Bachrach Motor Co., Inc., has a preferential right to receive from the Talisay-Silay Milling Co., Inc.,
the amount of P11,076.02 which is in the possession of said corporation as the bonus to be paid to Mariano Lacson
Ledesma, and in ordering the Talisay-Silay Milling Co., Inc., to deliver said amount to the Bachrach Motor Co., Inc.
7. In not holding that the Philippine National Bank has a preferential right to receive from the Talisay-Silay Milling Co.,
Inc., the amount of P11,076.02 held by said corporation as Mariano Lacson Ledesma's bonus, and in not ordering said
Talisay-Silay Milling Co., Inc., to deliver said amount to the Philippine National Bank.
8. In not holding that the amended complaint and the supplementary complaint of the Bachrach Motor Co., Inc., do not
state facts sufficient to constitute a cause of action in favor of the Bachrach Motor Co., Inc., and against the Talisay-Silay
Milling Co., Inc., or against the Philippine National Bank.
The appellant bank bases its preferential right upon the contention that the bonus in question is civil fruits of the lands which the
owners had mortgaged for the benefit of the central giving the bonus, and that, as civil fruits of said land, said bonus was assigned
by Mariano Lacson Ledesma on March 7, 1930, by virtue of the document Exhibit 9 of said intervening institution, which admitted
in its brief that "if the bonus in question is not civil fruits or rent which became subject to the mortgage in favor of the Philippine
National Bank when Mariano Lacson Ledesma's personal obligation fell due, the assignment of March 7, 1930 (Exhibit 9, P.N.B.),
is null and void, not because it is fraudulent, for there was no intent of fraud in executing the deed, but that the cause or
consideration of the assignment was erroneous, for it was based upon the proposition that the bonus was civil fruits of the land
mortgaged to the Philippine National Bank." (P. 31.)
The fundamental question, then, submitted to our consideration is whether or not the bonus in question is civil fruits.
This is how the bonus came to be granted: On December 22, 1923, the Talisay-Silay Milling Co., Inc., was indebted to the
Philippine National Bank. To secure the payment of its debt, it succeeded in inducing its planters, among whom was Mariano
Lacson Ledesma, to mortgage their land to the creditor bank. And in order to compensate those planters for the risk they were
running with their property under the mortgage, the aforesaid central, by a resolution passed on that same date, i.e., December 22,
1923, undertook to credit the owners of the plantation thus mortgaged every year with a sum equal to two per centum of the debt
secured according to yearly balance, the payment of the bonus being made at once, or in part from time to time, as soon as the
central became free of its obligations to the aforesaid bank, and of those contracted by virtue of the contract of supervision, and had

funds which might be so used, or as soon as it obtained from said bank authority to make such payment. (Exhibits 5, 6; P.N.B.)
Article 355 of the Civil Code considers three things as civil fruits: First, the rents of buildings; second, the proceeds from leases of
lands; and, third, the income from perpetual or life annuities, or other similar sources of revenue. It may be noted that according to
the context of the law, the phrase "u otras analogas" refers only to rent or income, for the adjectives "otras" and "analogas" agree
with the noun "rentas," as do also the other adjectives"perpetuas" and "vitalicias." That is why we say that by "civil fruits" the
Civil Code understands one of three and only three things, to wit: the rent of a building, the rent of land, and certain kinds of
income.
As the bonus in question is not rent of a building or of land, the only meaning of "civil fruits" left to be examined is that of
"income."
Assuming that in broad juridical sense of the word "income" it might be said that the bonus in question is "income" under article
355 of the Civil Code, it is obvious to inquire whether it is derived from the land mortgaged by Mariano Lacson Ledesma to the
appellant bank for the benefit of the central; for it is not obtained from that land but from something else, it is not civil fruits of that
land, and the bank's contention is untenable.
It is to be noted that the said bonus bears no immediate, but only a remote accidental relation to the land mentioned, having been
granted as compensation for the risk of having subjected one's land to a lien in favor of the bank, for the benefit of the entity
granting said bonus. If this bonus be income or civil fruits of anything, it is income arising from said risk, or, if one chooses, from
Mariano Lacson Ledesma's generosity in facing the danger for the protection of the central, but certainly it is not civil fruits or
income from the mortgaged property, which, as far as this case is concerned, has nothing to do with it. Hence, the amount of the
bonus, according to the resolution of the central granting it, is not based upon the value, importance or any other circumstance of
the mortgaged property, but upon the total value of the debt thereby secured, according to the annual balance, which is something
quite distinct from and independent of the property referred to.
Finding no merit in this appeal, the judgment appealed from is affirmed, without express finding as to costs. So ordered.
Johnson, Street, Malcolm, Villamor, Ostrand, Villa-Real, and Imperial, JJ., concur.

G.R. No. L-43345 July 29, 1976

JOSEFINA S. DE LAUREANO, petitioner,
vs.
HON. MIDPANTAO L. ADIL, in his capacity as Presiding Judge, Court of First Instance of Iloilo, Branch II, and ONG
CU, respondents.
Celso Ed. T. Unson for petitioner.
Rolando Magbanua Antiquiera for private respondent.

AQUINO, J.:
Josefina S. de Laureano in this special civil action of certiorari assails the interlocutory orders of the Court of First Instance of
Iloilo, denying her motions for execution and for a preliminary mandatory injunction in an ejectment suit which was decided in her
favor by the city court of Iloilo City and which was appealed by the lessee, Ong Cu (Civil Case No. 10370).
Mrs. Laureano is the registered owner of Lots 996 and 1004-B with a total area of 3,107 square meters located at the corner of
Iznart and Solis Streets, Iloilo City. The lots were leased to Ong Cu for fifteen year period which allegedly expired on August 31,
1974.
In view of Ong Cu's failure to vacate the lots and remove his improvements thereon. Mrs. Laureano filed against him an ejectment
suit in October, 1974 in the city court of Iloilo City.
After trial, the city court on September 23, 1975 rendered a judgment ordering Ong Cu to vacate the lots, to restore their possession
to Mrs. Laureano, to remove his buildings and other improvements thereon and to pay P12,428 monthly as compensation for the
use and occupation of the lots from September 1, 1974 up to the time he vacates them, with interest at twelve percent per
annum from the date of accrual plus P10,000 as moral and exemplary damages and attorney's fees.
Ong Cu appealed to the Court of Fist Instance of Iloilo. Instead of filing a supersedeas bond based on the findings of the city court

in its decision, Ong Cu asked the city court ex parte to approve his supersedeas bond in the sum of P22,000 and to fix the rental
value of the two lots at P1,200 a month. The city court granted that ex parte motion in its order of October 8, 1975. Thereafter, the
record was elevated to the Court of First Instance. The case was assigned to the sala of respondent Judge.
On November 4 Mrs. Laureano received a notice from the clerk of court that Ong Cu's appeal had been docketed. On November 13
she filed a motion in the lower court praying for a preliminary mandatory injunction to restore her to the possession of the said lots.
Invoking article 1674 of the Civil Code and section 9, Rule 70 of the Rules of Court, she alleged that Ong Cu's appeal was frivolous
and dilatory.
She also asked for immediate execution of the city court's judgment on the ground that Ong Cu's supersedeas bond was inadequate
and that he had failed to deposit the sum of P12,428 monthly as reasonable value of the use and occupation of the lots adjudged by
the city court.
Ong Cu opposed the two motions. The lower court in its order of December 9, 1975 upheld the city court's order fixing the
supersedeas bond and the amount to be deposited by Ong Cu.
After the lower court's attention was called to its failure to resolve Mrs. Laureano's other motion for a mandatory injunction, it ruled
in its order of February 12, 1976 that the writ could not be granted because it had already sanctioned Ong Cu's supersedeas bond,
the purpose of which was to stay execution pending appeal. The lower court reasoned out that it would be absurd to stay execution
and at the same time restore possession to the plaintiff by granting the mandatory injunction. It regarded Ong Cu as a possessor in
good faith entitled to reimbursement of his necessary and useful expenses.
The instant certiorari action was filed on March 25, 1976. The issue is whether the lower court acted. with grave abuse of discretion
in denying Mrs. Laureano's motions for execution and a mandatory injunction.
The motion for execution. Rule 70 of the Rules of Court provides:
SEC. 8. Immediate execution of judgment. Haw to stay same. If judgment is rendered against the defendant,
execution shall issue immediately, unless an appeal has been perfected and the defendant to stay execution files a
sufficient bond, approved by the municipal or city court and executed to the plaintiff to enter the action in the
Court of First Instance and to pay the rents, damages, and costs accruing down to the time of the judgment
appealed from, and unless, during the pendency of the appeal, he deposits with the appellate court the amount of
rent due from time to time under the contract, if any, as found by the judgment of the municipal or city court to
exist. In the absence of a contract, he shall deposit with the court the reasonable value of the use and occupation of
the premises for the preceding month or period at the rate determined by the judgment, on or before the tenth day
of each succeeding month or period. The supersedeas bond shall be transmitted by the municipal or city court, with
the other papers, to the clerk of the Court of First Instance to which the action is appealed.
All moneys so paid to the appellate court shall be deposited in the provincial or city treasury, and shall be held
there until the final disposition of the appeal, unless the court, by agreement of the interested parties, or in the
absence of reasonable grounds of opposition to a motion to withdraw, or for justifiable reasons, shall decree
otherwise. Should the defendant fail to make the payments above prescribed from time to time during the
pendency of the appeal, the appellate court, upon motion of the plaintiff, of which the defendant shall have notice,
and upon proof of such failure, shall order the execution of the judgment appealed from with respect to the
restoration of possession, but such execution shall not be a bar to the appeal taking its course until the final
disposition thereof on its merits.
xxx xxx xxx
As explicitly provided in section 8, the judgment of tile inferior court in plaintiff's favor in an ejectment case is immediately
executory. Thus, where the city court on the day it rendered the judgment ordered the execution thereof and the defendant did not
perfect his appeal and did not post a supersedeas bond, it was held that certiorari would not lie to set aside the execution. Section 8
of Rule 70 is an exception to the general rule as to the execution of the judgment of an inferior court which is found in section 18,
Rule 5 of the Rules of Court (Pascua vs. Nable, 71 Phil. 186).
The inferior court's judgment is immediately executory in order to prevent further damages to the plaintiff should the defendant
continue to deprive him of the possession of the premises in litigation (Yu Tiong Tay vs. Barrios, 79 Phil. '597, 601).
The defendant may stay execution by (a) perfecting an appeal and filing a supersedeas bond and (b) paying from time to time either
to the plaintiff or to the Court of First Instance during the pendency of the appeal the rentals or the reasonable value Of the use and
occupation of the property as fixed by the inferior in its judgment (Sison vs. Hon. Bayona, 109 Phil. 567, 561; Vda. de Palanca vs.
Chua Keng Kian, L-26430, March 11, 1969, 27 SCRA 356).
The reasonable value of the use and occupation of the premises is that fixed by the inferior court in its judgmentbecause the rental
stipulated in the lease contract that had expired might no longer be the reasonable value for the use and occupation of the premises
by the reason of the change or rise in value (Aylon vs. Jugo, 78 Phil. 816).

The purpose of the supersedeas bond is to secure payment of the rents and damages adjudged in the appealed judgment. Hence, the
bond is not n if the defendant deposits in court the amount of back rentals as fixed in the judgment. In other words, the supersedeas
bond answers only for rentals was in the judgment and not for those that may accrue during the pendency of the appeal which are
guaranteed by the periodical deposits to be made by the defendant. (Sison vs. Hon. Bayona, supra). The appeal bond answers for
the costs (Sanchez vs. Zosa, L-27043, November 28, 1975, 68 SCRA 171, 174; Contreras vs. Dinglasan 79 Phil. 42).
The damages contemplated in section 8 of Rule 70 refer to the reasonable compensation for the use and occupation of the property
which is generally measured by its fair rental value. It cannot refer to other damages which are foreign to the enjoyment or material
possession of the property. Consequently attorney's fees cannot be considered as damages (Castueras vs. Bayona, 106 Phil. 340).
In the instant case, the city court found that Ong Cu's lease expired on August 31, 1974 and that the reasonable value of the use and
occupation of the two lots is four pesos a square meter or P12,428 monthly. To stay execution, Ong Cu should have filed, and the
city court should have required, a supersedeas bond in the total amount of the reasonable value of the use and occupation of the two
lots for the period from September 1, 1974 to September, 1975, or for thirteen months, at the rate fixed in the city court's judgment
which is P12,428.
The supersedeas bond should be in the total sum of P161,564.00. And the amount to be deposited monthly beginning October, 1975
is that same amount of P12,428. The deposit should be made on or before the tenth day of the succeeding month.
The city court erred in issuing ex parte an order granting Ong Cu's motion fixing the supersedeas bond at P22,000 and the monthly
deposit at P1,200 which was the rental stipulated in the lease contract that had already expired. The city court should not have
allowed Ong Cu to dictate the amount of the supersedeas bond and the amount of the monthly payments to be deposited in court.
The reasonable value of the use and occupation of the two lots was already fixed in its judgment. That value is the value to be
deposited in court. Ong Cu's motion that it be fixed at P1,200 was uncalled for and was in contravention of the mandatory
provisions of section 8 of Rule 70.
Also contrary to the peremptory provisions of section 8 was Ong Cu's act of fixing his supersedas bond at P22,000 instead of at the
amount equivalent to the total compensation or rentals Is that had accumulated up to the rendition of the city court's judgment. That
is the amount of the supersedeas bond unalterably fixed in section 8.
The lower court theorized that the city court's order of October 8, 1975 approving Ong Cu's supersedeas bond in the sum of
P22,000 and provisionally fixing the monthly rental deposited at P1,200 was a valid amendment of the city court's decision of
September 23. That theory is untenable. It distorts the meaning of an amendment. Ong Cu did not move. that the decision be
amended. The order according to its letter and tenor can in no sense be interpreted as amendment of the city court's decision. It
makes no reference to the decision.
At the time the order was issued, Ong Cu had already riled his notice of appeal. He did not rile a new notice of appeal by indicating
therein that he was appealing from the city court's ,decision as supposedly amended by its order of October 8. He could not have
done so because the October 8 order in its face does not purport to amend the decision.
It results that Ong Cu's supersedeas bond was inadequate and that he did not deposit the compensation for the use and occupation of
the two lots which wits fixed in the city court judgment. His supersedeas bond and his deposits were not sufficient to stay
execution.
If this were a case where the defendant did not file any supersedeas bond or did not make any monthly deposit, then Mrs. Laureano
would be entitled as a matter of right to the immediate execution of the city court's judgment both as to the restoration of possession
and the payment of the accrued rentals or compensation for the use and occupation of the premises (De Pages and Vda. de
Rodriguez vs. Hon. Canonoy, 116 Phil. 898, 901; Paulino, Sr. vs. Hon. Surtida, 109 Phil. 621, 626).
In such a case ' the execution is mandatory. The only exceptions are the existence of fraud, accident, mistake or execusable
negligence which prevented the defendant from posting the supersedeas bond or making the monthly deposit, or the occurrence of
supervening events which brought about a material change in the situation of the parties and which would make the execution
inequitable (Cunanan vs. Rodas, 78 Phil. 800; Laurel vs. Abalos, L-26098, October 31, 1969, 30 SCRA 281).
This is a case where there was a supersedeas bond and where monthly de sits were made but the bond and the deposit were
inadequate or were not in conformity with the city court's judgment. Ong Cu committed a mistake because he followed the
erroneous order of the city court which fixed the supersedeas bond and the monthly deposit in contravention of its own decision
and, consequently, in violation of section 8 of Rule 70. Because of that mistake, immediate execution under Rule 70 would not be
warranted (See Yu Phil. Khim vs. Amparo, 86 Phil. 441, 445, Bantug vs. Montinola, 73 Phil. 13, 20; Kraut vs. Encarnacion, 96 Phil.
986; Tagulimot vs. Makalintal, 85 Phil. 40; De la Cruz vs. Burgos, L-28095, July 30, 1969, 28 SCRA 977). The Court of First
Instance has discretion to order the execution of a new supersedeas bond to replace a defective one (Zamora vs. Dinglasan and
Hilario, 77 Phil. 46, 53).
Ong Cu should be given a thirty-day period from notice within which to file a new supersedeas bond in the sum of P161,564 and to
deposit the value of the use and occupation of the two lots at the rate of P12,428 beginning October, 1975 less the amounts already
deposited by him. Execution should issue if he fails to file a new supersedeas bond and to make up for the deficiency in his monthly

deposits.
Motion for mandatory injunction. The Civil Code provides:
ART. 1674. In ejectment cases where an appeal is taken the remedy granted in article 539, second paragraph, shall
also apply, if the higher court is satisfied that the lessee's appeal is frivolous or dilatory, or that the lessor's appeal
is prima facie meritorious. The period of ten days referred to in said article shall be counted from the time the
appeal is perfected. (n)
Article 1674 is reproduced in section 9 of Rule 70. Article 539 of the Civil Code in its second paragraph grants to the possessor,
who was deprived of the possession of his real property through forcible entry, the right to secure from an inferior court in the
action for forcible entry a writ of preliminary mandatory injunction to restore him in his possession.
Article 1674 gives to the plaintiff in an unlawful detainer case originating in the inferior court and appealed to the Court of First
Instance the remedy which article 539 gives to the plaintiff in a forcible entry case. It is designed to eliminate the injustice of the
old rule which allowed the lessee to continue in possession during an appeal even if the owner or plaintiff has an immediate right to
the premises in litigation (pp. 98,143, Report of Code Commission).
Article 1674 is in consonance with the summary character of an ejectment suit which is an expeditious means for recovering
possession of real property (Deveza vs. Montecillo, L-23942, March 28, 1969, 27 SCRA 822; Mara, Inc. vs. Estrella, L40511, July
25, 1975, 65 SCRA 471) but the effectiveness of which was often frustrated by defendant's dilatory tactics which were tolerated by
inferior courts (Vda. de Palanca vs. Chua Keng Kian L-26430, March 11, 1969, 27 SCRA 3.56, 365-6).
The decisive issue is whether the pleadings, the city court's decision and Ong Cu's contentions show that his appeal is manifestly
frivolous and dilatory.
There is no question that Mrs. Laureano is the registered owner of the two lots and that they were leased to Ong Cu for a fifteen
year period counted from September 1, 1959 and expiring on August 31, 1974. Ong Cu in his answer to the ejectment complaint
unmistakably admitted that the lease expired on that date. He alleged that there were negotiations for his purchase of the two lots.
His defenses were that the ejectment action was premature because he was still considering Mrs. Laureano's proposal to sell the
lots; that the removal of his buildings and iniprovements allegedly worth P1,800,000 would prejudice him and entail considerable
expenses; that there is difficulty in looking for another site during the short period granted to him by Mrs. Laureano; that he is
willing to buy the lots at a reasonable price, and that the price fixed by Mrs. Laureano is excessive.
Those defenses cannot defeat the ejectment suit. The expiration of lease and Mrs. Laureano's refusal to renew it made Ong Cu a
deforciant or an unlawful with holder of the possession of the lots. He has become a possessor in bad faith. The Civil Code
provides:
ART. 1669. If the lease was made for a determinate time, it ceases upon the day fixed, without the need of a
demand. (1565)
ART. 1671. If the lessee continues enjoying the thing after the expiration of the contract over the lessor's objection,
the former shall be subject to the responsibilities of a possessor in bad faith. (n)
ART. 1673. The lessor may judicially eject the lessee for any of the following causes:
(1) When the period agreed upon, ... has expired.
xxx xxx xxx
(1569a)
The rule is that if after the termination of the lease contract the lessee prolongs his occupation of the premises, there is unlawful
detainer and article 1674 applies. For the purpose of that article, it is enough that the plaintiff is the owner of the land and that the
defendant is in temporary occupation thereof whether under a lease contract or on mere tolerance or under a temporary permit. (De
la Cruz vs. Bocar, 99 Phil. 491).
The lower court assumed that Ong Cu in constructing his building on the leased lots is a possessor in good faith entitled to
reimbursement of the necessary and useful expenses incurred by him and with a right of retention, as contemplated in articles 546
and 547 of the Civil Code.
That assumption is erroneous. As a lessee, who constructed a building on the leased land, Ong Cu cannot be characterized as a
builder in good faith. Under article 448 of the Civil Code the owner of the land on which anything has been built in good faith may
appropriate the building after payment of the indemnity provided in articles 546 and 548 of the Civil Code.
Article 448 applies to a case where one builds on land of which he honestly claims to be the owner and not to lands wherein one's
only interest is that of a lessee under a rental contract. A contrary rule would place it within the power of the lessee "to improve his
landlord out of his property" (Alburo vs. Villanueva, 7 Phil. 277, 280; Cortes vs. Ramos, 46 Phil. 184; Fojas vs. Velasco, 51 Phil.
520; Bantug vs. Montinola, 73 Phil. 13).

In other words, article 448 refers to a possessor who occupied the land in the belief that he was the owner thereof. It does not apply
to the lessee because the lessee knows at the outset that he is not the owner of the land (Lopez, Inc. vs. Philippine & Eastern
Traiding Co., Inc., 98 Phil. 348). The tenant has no pretension to being the owner of the land (Rivera vs. Trinidad, 48 Phil. 396,
401).
As noted by the city court, Ong Cu's rights with respect to the improvements made by him on the leased land are governed by the
following provisions of the Civil Code:
ART 1678. If the lessee makes, in good faith, useful improvements which are suitable to the use for which the
lease is intended, without altering the form or substance of the property leased, the lessor upon the termination of
the lease shall pay the lessee one-half of the value of the improvements at that time. Should the lessor refuse to
reimburse said amount, the lessee may remove the improvements, even though the principal thing may suffer
damage thereby, He shall not, however, cause any more impairment upon the property leased than is necessary.
With regard to ornamental expenses, the lessee shall not be entitled to any reimbursement, but he may remove the
ornamental objects, provided no damage is caused to the principal thing, and the lessor does not choose to retain
them by paying their value at the time the lease is extinguished. (n)
Under article 1678 it is the lessor who has the option to pay for one-half of the value of the improvements which the lessee has
made in good faith, which are suitable for the use for which the lease is intended and which have not altered the form and substance
of the land (Philippine National Bank vs. Pineda, L-29748, August 29, 1969, 29 SCRA 262; Lapea and Pineda vs. Morfe, 101 Phil.
997; Sto. Domingo vs. Chua Man, 105 Phil. 220; Bacaling vs. Laguda, 70 O. G. 2694, 54 SCRA 243).
Contrary to the lower courts impression, the lessee has no right of retention because article 546 of the Civil Code does not apply to
the improvements made by him. Only the possessor in good faith has a right of retention under article 546. As already noted, article
1671 regards an overstaying lessee as a possessor in bad faith.
The lower court discerned an absurdity or incongruency in allowing a defendant in an ejectment case to stay execution of the
inferior court's decision, by filing a supersedeas bond and making monthly deposits, and at the same time granting a mandatory
injunction to restore possession on the theory that the defendant's appeal is frivolous and mandatory.
The absurdity is more apparent than real. The execution in an ejectment case has two espects: (a) possession and (b) the rentals or
reasonable value of the use of the premises, The mandatory injunction refers to the possession of the premises in litigation.
On the other hand, the supersedeas bond and the monthly deposits are primarily designed to insure that the plaintiff would be paid
the back rentals or the compensation for the use and occupation of the premises should the inferior court's decision in his favor be
affirmed on appeal. Hence, if no bond was filed or no monthly deposit was made, the plaintiff is entitled to the possession of the
premises. To allow the defendant to continue his possession without any security for the rentals would be prejudicial to the plaintiff.
He might not be able to recover the back rentals when the judgment in his favor becomes final and executory. In that event, his
claim for rentals would be illusory or ineffectual.
If the mandatory injunction is granted, defendant's possession would cease but the supersedeas bond and the deposits already made
would subsist as security for the accrued pecuniary liability of the defendant to the plaintiff. The execution as to the rentals or
compensation for the use of the premises would be stayed.
It results that the lower court gravely abused its discretion in not granting the writ of mandatory injunction. Its questioned orders
were predicated on erroneous assumptions.
Generally, certiorari does not lie to question the propriety of an interlocutory order of the trial court. Interlocutory orders ordinarily
should be reviewed when an appeal is taken from the trial court's judgment. Not every procedural error or erroneous legal or factual
conclusion amounts to a grave abuse of discretion. An error of judgment is not necessarily a jurisdictional error.
But when a grave abuse of discretion was patently committed, such as when the lower court acted capriciously and whimsically, or
petitioner's contention appears to be clearly tenable, or the broader interests of justice or public policy require the setting aside of
the interlocutory order, then it devolves upon this Court in a certiorari proceeding to exercise its supervisory authority and to correct
the error committed which in such a case is equivalent to lack of jurisdiction (Sanchez vs. Zosa, L-27043, November 28, 1975, 68
SCRA 171, 175; Pacheco vs. Tumangday and Fernando, 108 Phil. 238; Manila Electric Co. and Sheriff of Quezon City vs. Hon.
Enriquez, etc. and Espinosa, 110 Phil. 499).
The immediate possession to be granted to Mrs. Laureano under the writ of mandatory injunction would embrace the portions of
the two lots not occupied by Ong Cu's improvements.
As to the portions of the lots occupied by Ong Cu's improvements, their demolition would be necessary in order to deliver the
possession thereof to Mrs. Laureano. In such a case, the provisions of section 14, Rule 39 of the Rules of Court should be observed.
A special order of demolition should be issued only after r notice and hearing a. c g and after giving Ong Cu a reasonable time
effect the removal.
The disposition of the appeal in the lower court should proceed in accordance. with section 45 of the Judiciary Law as amended.

The grant of the mandatory injunction constitutes a prejudgment of the appeal with respect to the possession of the two lots. The
main point to be resolved in the lower court's disposition of the appeal is the correctness of the city court's finding on the reasonable
value of the use and occupation of the two lots after the lease expired on August 31, 1974.
In filing the ejectment suit Mrs. Laureano opted not to reimburse Ong Cu for his improvements. Consequently, there is no issue as
to the reimbursement to be made under article 1678. What period should be given to Ong Cu for the removal of his improvements
is a matter that should be judiciously resolved by the lower court in the light of the evidence introduced in the city court and the
evidence that will be presented during the hearing on the petition for a special order of demolition. Ong Cu's rights under the law
should be respected. Nothing oppressive or arbitrary should be perpetrated in connection with the removal of his improvements.
WHEREFORE, the lower court's orders of December 9, 1975 and February 12, 1976 are set aside.
(1) The lower court is directed to require Ong Cu (a) to file within thirty (30) days from notice a new supersedeas
bond in the amount of P161,564 representing the reasonable compensation for the use and occupation of the two
lots, at the rate found by the city court, from September 1, 1974 to September, 1975, when the city court rendered
its judgment, and (b) to deposit in court within the same period the compensation for the use and occupation of the
lots for the period from October 1, 1975 to June, 1976 at the rate of P12,428 a month, the amount fixed in the
inferior court's judgment, less the amounts already deposited by Ong Cu at the rate of P1,200 a month.
(2) If after June, 1976 he has not restored to Mrs. Laureano the portions of the two lots not occupied by his
buildings, then h should deposit in court on or before the tenth day of each month, as prescribed in section 8, Rule
70 of the Rules of Court, the same sum of P12,428 until he has complied with the mandatory injunction decreed
herein.
(3) The lower court is further directed to issue a writ of preliminary mandatory injunction requiring Ong Cu to
vacate the two lots in question, to deliver the possession thereof to Mrs. Laureano and to remove his buildings and
improvements after the court has passed upon the corresponding petition for demolition.
(4) After Ong Cu has complied with the mandatory injunction with respect to the portions of the lots not occupied
by his buildings and improvements, he should deposit in court the value of the use and occupation of the portions
of the two lots occupied by his buildings at the rate of four pesos a square meter. Costs against respondent Ong Cu.
SO ORDERED.
Fernando (Chairman), Antonio and Martin, JJ., concur.
Concepcion, Jr., is on leave.
Martin J., was designated to sit in the Second Division.

Separate Opinions

BARREDO, J., concurring

The purpose of this separate opinion is only to underline the important and precedential holding in the main opinion that
notwithstanding a stay of execution of a judgment in an ejectment case upon the filing of a supersedeas bond to cover past rents,
damages and costs and the payment of the subsequent accruing rentals by the defendant, a writ of preliminary mandatory injunction
may still be issued against said defendant under Article 1674 of the Civil Code for him to immediately turn over possession to the
plaintiff, without prejudice to the continuation and final determination of the case in the appellate courts. I am in full accord with
our distinguished colleague, Mr. Justice Aquino, that such is the law, and I wish to add, it is good law in principle and in
practicality.
Indeed, there is incompatibility between the stay of execution sanctioned by Section 8 of Rule 70, on the one hand, and the
mandatory injunction for the defendant to vacate immediately, but, as envisioned by the Code Commission that incorporated this
innovative remedy in Article 1674 of the Civil Code, the objective of "the reform is to put an end to present state of the law which
unjustly allows the lessee to continue in possession during an appeal." That "state of the law" referred to was precisely the fact that
Section 8 of Rule 72 of the Rules of Court of 1940 allowed, as its counterpart in the Revised Rules of 1964, Section 8 of Rule 70,
does, the defendant in an ejectment case who has lost in the inferior court to prolong his stay in the premises in dispute, regardless
of the apparent lack of merit of his defense, as already found by said court, just because he has filed the supersedeas bond and so
long as he complies with the other requirement about payment of current rentals as they fall due. In other words, there is nothing
surprising, much less absurd, in the preliminary mandatory injunction contemplated in Article 1674 because what it purports to

protect is the juridical right of the plaintiff to secure immediate possession of the premises in dispute which the court has already
upheld, or, which appears prima facie to the Court of First Instance to be tenable despite an adverse judgment of the inferior court,
as against the obviously tenuous proposition underlying the stay of execution pursuant to the provision of the Rules
aforementioned, witch in effect, is that the defendant may continue in possession, provided he can afford to pay the sums stipulated
therein, in complete disregard of the fact that under the applicable substantive law and in the light of the particular facts of the case
as found by the Court of First Instance, his right to possession either does not exist or has already totally ceased, thereby entitling
the plaintiff to use the premises in question to whatever other purpose he may consider more suitable to his needs or circumstances
than the monetary compensation which the rule aims to safeguard by the imposition of the conditions prescribed therein. What is
really absurd and incongruent is for a possessor of a real property to be allowed to retain the same, although the court, even if in the
first instance only, has already determined that he has no more legal basis to continue in possession, against the will and consent of
the owner or of any other more rightful possessor, merely because he is ready and willing to compensate the plaintiff in money, in
an amount to be fixed by the court (not by the plaintiff), for the prolongation of his stay, regardless of the merits of his appeal, or,
better said, notwithstanding the finding of the court that his appeal is more likely not to prosper. The regard of Article 1674 for the
juridical rights involved is such that the preliminary injunction therein allowed should issue without requiring the plaintiff to file
any bond, unlike ordinary preliminary injunctions under Rule 58. (Ilano vs. Mamaril, 11 C.A. Rep. 770, cited in Civil Law by
Padilla, Vol. V, pp. 733-734, 1974 ed.) 1
It is my considered opinion that Article 1674 is exactly what is needed in order to solve the perennial problem of property owners
who have to suffer what are virtually imposed and compulsory contracts of lease, which is what the stay of execution under Section
8 of Rule 70 amounts to. And when it is borne in mind how long it takes rather often for the appellate courts to dispose of appeals
even in cases of ejectment, for there are appeals that have been pending for years and years in said courts, one can readily
appreciate the justice and appropriateness of that Civil Code provision, now ' incorporated as Section 9 of Rule 70 of the Rules of
Court. Accordingly, it stands to reason that the writ of preliminary mandatory injunction so provided for should be deemed as
actually intended to be superior to the stay of execution permitted by the rules. While the privilege to appeal a judgment of
ejectment may have its merits, peace in the community and the integrity of the juridical order will be best served by not allowing
any appeal to effect automatically the extension of appellant's possession of the disputed premises, just because he is able to pay the
amounts required by the rules, where after due hearing, the Court of First Instance has already found prima facie that such
possession does not have legal basis. No more should illegal possessors be allowed to misuse and abuse judicial proceedings as
means to perpetuate an unjust and illegal situation.

Separate Opinions

BARREDO, J., concurring

The purpose of this separate opinion is only to underline the important and precedential holding in the main opinion that
notwithstanding a stay of execution of a judgment in an ejectment case upon the filing of a supersedeas bond to cover past rents,
damages and costs and the payment of the subsequent accruing rentals by the defendant, a writ of preliminary mandatory injunction
may still be issued against said defendant under Article 1674 of the Civil Code for him to immediately turn over possession to the
plaintiff, without prejudice to the continuation and final determination of the case in the appellate courts. I am in full accord with
our distinguished colleague, Mr. Justice Aquino, that such is the law, and I wish to add, it is good law in principle and in
practicality.
Indeed, there is incompatibility between the stay of execution sanctioned by Section 8 of Rule 70, on the one hand, and the
mandatory injunction for the defendant to vacate immediately, but, as envisioned by the Code Commission that incorporated this
innovative remedy in Article 1674 of the Civil Code, the objective of "the reform is to put an end to present state of the law which
unjustly allows the lessee to continue in possession during an appeal." That "state of the law" referred to was precisely the fact that
Section 8 of Rule 72 of the Rules of Court of 1940 allowed, as its counterpart in the Revised Rules of 1964, Section 8 of Rule 70,
does, the defendant in an ejectment case who has lost in the inferior court to prolong his stay in the premises in dispute, regardless
of the apparent lack of merit of his defense, as already found by said court, just because he has filed the supersedeas bond and so
long as he complies with the other requirement about payment of current rentals as they fall due. In other words, there is nothing
surprising, much less absurd, in the preliminary mandatory injunction contemplated in Article 1674 because what it purports to
protect is the juridical right of the plaintiff to secure immediate possession of the premises in dispute which the court has already
upheld, or, which appears prima facie to the Court of First Instance to be tenable despite an adverse judgment of the inferior court,
as against the obviously tenuous proposition underlying the stay of execution pursuant to the provision of the Rules
aforementioned, witch in effect, is that the defendant may continue in possession, provided he can afford to pay the sums stipulated
therein, in complete disregard of the fact that under the applicable substantive law and in the light of the particular facts of the case
as found by the Court of First Instance, his right to possession either does not exist or has already totally ceased, thereby entitling
the plaintiff to use the premises in question to whatever other purpose he may consider more suitable to his needs or circumstances
than the monetary compensation which the rule aims to safeguard by the imposition of the conditions prescribed therein. What is
really absurd and incongruent is for a possessor of a real property to be allowed to retain the same, although the court, even if in the

first instance only, has already determined that he has no more legal basis to continue in possession, against the will and consent of
the owner or of any other more rightful possessor, merely because he is ready and willing to compensate the plaintiff in money, in
an amount to be fixed by the court (not by the plaintiff), for the prolongation of his stay, regardless of the merits of his appeal, or,
better said, notwithstanding the finding of the court that his appeal is more likely not to prosper. The regard of Article 1674 for the
juridical rights involved is such that the preliminary injunction therein allowed should issue without requiring the plaintiff to file
any bond, unlike ordinary preliminary injunctions under Rule 58. (Ilano vs. Mamaril, 11 C.A. Rep. 770, cited in Civil Law by
Padilla, Vol. V, pp. 733-734, 1974 ed.) 1
It is my considered opinion that Article 1674 is exactly what is needed in order to solve the perennial problem of property owners
who have to suffer what are virtually imposed and compulsory contracts of lease, which is what the stay of execution under Section
8 of Rule 70 amounts to. And when it is borne in mind how long it takes rather often for the appellate courts to dispose of appeals
even in cases of ejectment, for there are appeals that have been pending for years and years in said courts, one can readily
appreciate the justice and appropriateness of that Civil Code provision, now ' incorporated as Section 9 of Rule 70 of the Rules of
Court. Accordingly, it stands to reason that the writ of preliminary mandatory injunction so provided for should be deemed as
actually intended to be superior to the stay of execution permitted by the rules. While the privilege to appeal a judgment of
ejectment may have its merits, peace in the community and the integrity of the juridical order will be best served by not allowing
any appeal to effect automatically the extension of appellant's possession of the disputed premises, just because he is able to pay the
amounts required by the rules, where after due hearing, the Court of First Instance has already found prima facie that such
possession does not have legal basis. No more should illegal possessors be allowed to misuse and abuse judicial proceedings as
means to perpetuate an unjust and illegal situation.
Footnotes

Barredo, J.:
1 The decision of the Court of Appeals in the cited case was penned by Justice Francisco Capistrano, who later was
promoted to this Supreme Court, and who was a member of the Code Commission. The pertinent portion of Justice
Capistrano's opinion reads:
We have before us for resolution plaintiff-appellee's petition for the issuance of a writ of preliminary mandatory
injunction, filed on February 20,1967, within ten (10) days from the time the record of the appealed case was
received by the Clerk of Court of Appeals. The petition, filed on time (Elena Layug vs. Eloisa Ylo CA-G.R. No.
30732-R, July 6, 1962), is in accordance with Art. 1674 of the Civil Code which provides:
Art. 1674. In ejectment cases where an appeal in taken, the remedy granted in article 539, second paragraph shall
also apply, if the higher court is satisfied that the lessee's appeal is frivolous or dilatory, or that the lessors appeal is
ma f meritorious. The period of ten days referred to in said article shall be counted from the time the appeal is
perfected.'
This article is new. It was drafted by the Code Commission in order to give the lessor in ejectment cases a speedy
remedy to be restored in his possession.
In the deliberations of the Code Commission on the new article, the Code Commissioner who drafted the new
provision remarked that although the law then in force provided for a y hearing and judgment in an ejectment case
in the City or Justice of the Peace Court, it did not so provide in event of appeal to the Court of First Instance and
thence, to the Court of A resulting in delay of about five (5) years in the final disposition of the case in the higher
courts; that in most ejectment cases the defendant lessee has no meritorious defense and his appeal to the Court of
First Instance and thence, to the Page 166 Court of Appeals is frivolous or dilatory, hence, the need for the new
article which gives the plaintiff-lessor the right to move the higher court where the case is on appeal by the
defendant for the issuance of a writ of preliminary mandatory injunction to restore him in his possession on the
ground that the appeal is frivolous or dilatory; that said higher court may, in a proper case, be the Court of First
Instance or the Court of Appeals. The Commissioner also remarked that in some ejectment cases the complaint
although meritorious is capriciously dismiss by the City or Justice of the Peace Court, hence, the new provisionalso gives the plaintiff-lessor the right to move the higher court where the case is on appeal by him for the issuance
of a writ of preliminary mandatory injunction to restore him in his possesion on the ground that his appeal isprima
facie meritorious; that said higher court may, in a proper case, be the Court of First Instance or the Court of
Appeals. The Commissioner likewise remarked that the issuance of the writ of preliminary mandatory injunction
under and by virtue of the new code provision, which is substantive law, does not require the giving of a bond.

96 SCRA 130 February 21, 1980

FLOREZA v EVANGELISTA
FACTS:
The Evangelistas were the owner of a residential lot in Rizal with an area of 204.08 sq. m. assessed at P410. They
borrowed P100 from Floreza. Floreza occupied the residential lot and built a house of light material (barong-barong)
with the consent of the Evangelistas. Additional Loans were made by the Evangelistas. Floreza demolished the house
of light material and constructed one of strong material
assessed. Floreza has not been paying any rentals since the beginning of their transactions. Eventually,
Evangelistas sold, with a right to repurchase within 6 years, their land to Floreza. Seven months before
the expiry of the repurchase period, the Evangelistas were able to pay in full. Floreza refused to vacate the
lot unless he was first reimbursed for the value of the house he built Evangelistas filed a complaint. CFI ruled based on
Art, 448 of the Civil Code saying that Evangelistas have the choice between purchasing
the house or selling the land to Floreza. CA ruled that Art. 448 was inapplicable and that Floreza was
not entiled to the reimbursement of his house and could remove the same at his own expense.
ISSUE:
1. WON Floreza was entitled to reimbursement of the cost of his house.
2. WON he (his heirs who replaced him) should pay rental of the land.
HELD:
1. NO. Issue of reimbursement is not moot because if Floreza has no right of retention, then he must pay
damages in the form of rentals. Agree with CA that Art. 448 is inapplicable because it applies only when
the builder is in good faith (he believed he had a right to build). Art. 453 is also not applicable because it
requires both of the parties to be in bad faith. Neither is Art. 1616 applicable because Floreza is not a
vendee a retro. The house was already constructed in 1945 (light materials) even before the pacto de
retro was entered into in 1949. Floreza cannot be classified as a builder in good faith nor a vendee a
retro, who made useful improvements during the pacto de retro, he has no right to reimbursement of
the value of the house, much less to the retention of the premises until he is paid.
His rights are more akin to a usufructury under Art. 579, who may make on the property useful improvements but with
no right to be indemnified thereof, He may, however, remove such improvements should it be possible to do so without
damage to the property.
2. YES. From the time the redemption price was paid in January 3, 1955, Florezas right to use the residential lot without rent
ceased. He should be held liable for damages in the form of rentals for the continued use of the lot for P10 monthly from January 3,
1955 until the house was removed and the property vacated by Floreza or his heirs. Judgment affirmed with modification.

G.R. No. L-25462 February 21, 1980

MARIANO FLOREZA, petitioner, vs.MARIA D. de EVANGELISTA and SERGIO EVANGELISTA, respondents.

This is a Petition for Review on certiorari of the Decision of the Court of Appeals (CA-G.R. No. 23516-R) promulgated on
November 4, 1965, entitled "Maria de Evangelista and Sergio Evangelists, (now the respondents) vs. Mariano Floreza (petitioner
herein)," reversing the judgment of the Court of First Instance of Rizal rendered on July 17, 1957, and instead ordering petitioner to
vacate respondents' residential lot, to remove his house at his own expenses and to pay rental from May 5, 1956.
Plaintiffs Maria de Evangelista and Sergio Evangelista, who are mother and son, (the EVANGELISTAS, for short) are the owners
of a residential lot located at Sumilang St., Tanay, Rizal, with an area of 204.08 sq. ms., assessed at P410.00. In May 1945, the
EVANGELISTAS borrowed from FLOREZA the amount of P100.00. On or about November 1945, with the consent of the
EVANGELISTAS, FLOREZA occupied the above residential lot and built thereon a house of light materials (barong- barong)
without any agreement as to payment for the use of said residential lot owing to the fact that the EVANGELISTAS has then a
standing loan of P100.00 in favor of FLOREZA. 1
On the following dates, the EVANGELISTAS again borrowed the indicated amounts: September 16, 1946 P100.00; 2 August 17,
1947 P200,00; 3 January 30, 1949 P200.00; 4 April 1, 1949 P140.00, 5 or a total of P740.00 including the first loan. The last
three items are evidenced by private documents stating that the residential lot stands as security therefor and that the amounts covered
thereunder are payable within six years from date, without mention of interest. The document executed on September 16, 1946 stated
specifically that the loan was without interest "walang anumang patubo."
On January 10, 1949, FLOREZA demolished this house of light materials and in its place constructed one of strong materials
assessed in his name at P1,410.00 under Tax Declaration No. 4448. FLOREZA paid no rental as before. 6
On August 1, 1949, the EVANGELISTAS, for and in consideration of P1,000.00 representing the total outstanding loan of P740.00
plus P260.00 in cash, sold their residential lot to FLOREZA, with a right to repurchase within a period of 6 years from date, or up
to August 1, 1955, as evidenced by a notarial document, Exh. B, registered under Act 3344 on December 6, 1949, as Inscription No.
2147. 7
On January 2, 1955, or seven months before the expiry of the repurchase period, the EVANGELISTAS paid in full the repurchase
price of P1,000.00.
On April 25, 1956, the EVANGELISTAS, through their counsel, wrote FLOREZA a letter 8 asking him to vacate the premises as they
wanted to make use of their residential lot besides the fact that FLOREZA had already been given by them more than one year within
which to move his house to another site. On May 4, 1956, the EVANGELISTAS made a formal written demand to vacate, within five days
from notice, explaining that they had already fully paid the consideration for the repurchase of the lot. 9FLOREZA refused to vacate
unless he was first reimbursed the value of his house. Hence, the filing of this Complaint on May 18, 1956 by the EVANGELISTAS.
The EVANGELISTAS prayed that: 1) they be declared the owners of the house of strong materials built by FLOREZA on their
residential lot, without payment of indemnity; or, in the alternative to order FLOREZA to remove said house; 2) that FLOREZA
pay them the sum of P10.00 per month as the reasonable value for the use and occupation of the same from January 2, 1955 (the
date the repurchase price was paid) until FLOREZA removes the house and delivers the lot to them; and 3) to declare the
transaction between them and FLOREZA as one of mortgage and not of pacto de retro.
In his Answer, FLOREZA admitted the repurchase but controverted by stating that he would execute a deed of repurchase and leave
the premises upon payment to him of the reasonable value of the house worth P7,000.00.
In a Decision dated July 17, 1957, the Court of First Instance of Rizal opined that the question of whether the transaction between
the parties is one of mortgage or pacto de retro is no longer material as the indebtedness of P1,000.00 of the EVANGELISTAS to
FLOREZA had already been fully paid. And, applying Article 448 of the Civil Code, 10 it rendered a decision dispositively decreeing:
FOR ALL THE FOREGOING CONSIDERATIONS, the Court hereby renders judgment granting the plaintiffs the
right to elect, as owners of the land, to purchase the house built, on the said lot in question by the defendant for
P2,500 or to sell their said land to e defendant for P1,500. In the event that the plaintiffs shall decide not to
purchase the house in question the defendant should be allowed to remain in plaintiffs' premises by, paying a
monthly rental of P10.00 which is the reasonable value for the use of the same per month as alleged by plaintiffs in
their complaint. The Court also orders the defendant to pay a monthly rental of P10.00 for the use of the land in
question from May 18, 1956, the date of the commencement of this action. The counterclaim of the defendant is
hereby ordered dismissed. Without pronouncement as to costs.
SO ORDERED. 11
Both parties appealed to the Court of Appeals.
On November 4, 1965, the Court of Appeals concluded that Article 448 of the Civil Code, supra, was inapplicable; that FLOREZA
was not entitled to reimbursement for his house but that he could remove the same at his expense; and accordingly rendered
judgment thus:
WHEREFORE, judgment is hereby rendered: (1) adjudging the defendant-appellant Mariano Floreza to vacate

plaintiffs' residential lot described in the complaint and to pay rental of P10.00 a month from May 5, 1956, until he
(defendant) shall have vacated the premises; (2) ordering defendant to remove his house from the land in question
within 30 days from the time this decision becomes final and executory; (3) ordering the Register of Deeds of
Rizal to cancel inscription No. 2147, Page 210, Vol. 36, in the Registration Book under Act 3344 upon payment of
his lawful fees; and (4) taxing the costs in both instances against defendant-appellant Mariano Floreza. 12
Hence, this Petition for Review on certiorari by FLOREZA, seeking a reversal of the aforestated judgment and ascribing the
following errors:
1) That the Court of Appeals erred in holding that petitioner Floreza was a builder in bad faith without likewise
holding that respondents as owners of the land in dispute, were likewise in bad faith and therefore both parties
should in accordance with Art. 453 of the New Civil Code be considered as having acted in good faith.
2) That the Court of Appeals erred in completely ignoring the issue raised on appeal as to whether or not
respondents as owners of the questioned lot, were in bad faith in the sense that they had knowledge of and
acquiseced to the construction of the house of petitioner on their lot.
3) That the Court of Appeals erred in not applying Art. 448 of the New Civil Code in the adjudication of the rights
of petitioner and respondent.
4) That the Court of Appeals erred in declaring that petitioner is not entitled to reimbursement for the value of his
house and that he should instead remove the same at his expense.
5) That the Court of Appeals erred in adjudging petitioner to vacate respondents' lot in question and to pay rentals
commencing from May 5, 1956, until he shall have vacated the premises, notwithstanding that petitioner is entitled
under Arts. 448 and 546 of the New Civil Code, to retention without payment of rental while the corresponding
indemnity of his house had not been paid.
6) That the Court of Appeals erred in taxing costs against petitioner.
7) That the Court of Appeals erred in not awarding petitioner's counterclaim.
During the pendency of this appeal, petitioner Maria D. de Evangelista died and was ordered substituted by her son, petitioner
Sergio, as her legal representative, in a Resolution dated May 14, 1976.
On October 20, 1978. the EVANGELISTAS filed a Motion to Dismiss stating that FLOREZA had since died and that his heirs had
voluntarily vacated the residential lot in question. The date FLOREZA passed away and the date his heirs had voluntarily vacated
the property has not been stated. Required to comment, "petitioner (represented by his heirs)", through counsel, confirmed his death
and the removal of the house and manifested that thereby the question of reimbursement had moot and academic. He objected to the
dismissal of the case, however, on the ground that the issue of rentals still pends. On January 21, 1980, complying with a
Resolution of 'his Court, the EVANGELISTAS clarified that the dismissal they were praying for was not of the entire case but only
of this Petition for Review on Certiorari.
We are not in agreement that the question of reimbursement of the value of the improvement erected on the subject property has
become moot. Petitioner's right of retention of subject property until he is reimbursed for the value of his house, as he had
demanded, is inextricably linked with the question of rentals. For if petitioner has the right to indemnity, he has the right of
retention and no rentals need be paid. Conversely, if no right of retention exists, damages in the form of rentals for the continued
use and occupation of the property should be allowed.
We uphold the Court of Appeals in its conclusion that Article 448 of the Civil Code is inapplicable to the factual milieu herein. Said
codal provision applies only when the builder, planter, or sower believes he had the right so to build, plant or sow because he thinks
he owns the land or believes himself to have a claim of title. 13 In this case, petitioner makes no pretensions of ownership whatsoever.
Petitioner concedes that he was a builder in bad faith but maintains that' the EVANGELISTAS should also be held in bad faith, so
that both of them being in bad faith, Article 453 of the Civil Code 14 should apply. By the same token, however, that Article 448 of the
same Code is not applicable, neither is Article 453 under the ambiance of this case.
Would petitioner, as vendee a retro, then be entitled to the rights granted iii Article 1616 of the Civil Code (Art. 1518 of the old
Code)? To quote:
Art. 1616. The vendor cannot avail himself of the right of repurchase without returning to the vendee the price of
the sale, and in addition:
(1) The expenses of the contract, and any other legitimate payments made by reason of the sale;
(2) The necessary and useful expenses made on the thing sold.
The question again calls for a negative answer. It should be noted that petitioner did not construct his house as a vendee a retro. The
house had already been constructed as far back as 1949 (1945 for the house of light materials) even before the pacto de retro sale in

1949. Petitioner incurred no useful expense, therefore, after that sale. The house was already there at the tolerance of the
EVANGELISTAS in consideration of the several loans extended to them. Since petitioner cannot be classified as a builder in good
faith within the purview of Article 448 of the Civil Code, nor as a vendee a retro, who made useful improvements during the
lifetime of the pacto de retro, petitioner has no right to reimbursement of the value of the house which he had erected on the
residential lot of the EVANGELISTAS, much less to retention of the premises until he is reimbursed.The rights of petitioner are
more akin to those of a usufructuary who, under Article 579 of the Civil (Art. 487 of the old Code), may make on the property
useful improvements but with no right to be indemnified therefor. He may, however, remove such improvements should it be
possible to do so without damage to the property: For if the improvements made by the usufructuary were subject to indemnity, we
would have a dangerous and unjust situation in which the usufructuary could dispose of the owner's funds by compelling him to pay
for improvements which perhaps he would not have made. 15
We come now to the issue of rentals. It is clear that from the date that the redemption price had been paid by the EVANGELISTAS
on January 2, 1955, petitioner's right to the use of the residential lot without charge had ceased. Having retained the property
although a redemption had been made, he should be held liable for damages in the form of rentals for the continued use of the
subject residential lot 16 at the rate of P10.00 monthly from January 3, 1955, and not merely from the date of demand on May 4, 1956, as
held by the Court of Appeals, until the house was removed and the property vacated by petitioner or his heirs.
WHEREFORE, the judgment appealed from is hereby affirmed, with the modification that payment of rentals by the heir, of
Mariano Floreza, who are hereby ordered substituted for him, shall commence on January 3, 1955 until the date that the residential
lot in question was vacated.
Costs against petitioner.
SO ORDERED.
Teehankee (Chairman), Makasiar, Fernandez, Guerrero, and De Castro, JJ., concur.
Footnotes
1 Exh. A, p, 1, Record of Exhibits
2 Exh. 9, p. 29, Ibid.
3 Exit 10, p. 30, Ibid.
4 Exh. 2, p. 24. Ibid,
5 Exh. 3, p. 25, Ibid.
6 Exh. 11, p. 31, Ibid.
7 Pp. 3-4, Ibid.
8 Exh- 5, P. 27, Ibid.
9 Exh. 6, p. 28, Ibid.
10 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 aged 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
tease and in case of disagreement. the court shall fix the terms thereof.
11 Amended Record on Appeal, p.22.
12 Decision, pp. 9-10.
13 Alburo vs. Villanueva, 7 Phil. 277 (1907); Quemuel vs. Olaes, I SCRA 1159 (1961); Racaza vs. Susana Realty,
Inc., 18 SCRA 1172 (1966).
14 ART. 453. If there was bad faith, not only on the part of the person who built, planted or sowed on the land of
another, but also on the part of the owner of such land, the rights of one and the other shall be the same as though
both had acted in good faith.
It is understood that there is bad faith on the part of the Ian downer whenever the act was done with his knowledge
and without opposition on his part.
15 Tolentino, Civil Code, citing Castan 237, citing de Diego Vol. pp, 315-316, 1972 ed.
16 Cho Chun Chac vs. Garcia, 47 Phil. 530 (1925).

Ortiz vs Kayanan
Ortiz vs. Kayanan
Facts: Plaintiff used to be the legal guardian of Martin Dolorico II. When his ward died, plaintiff continued to cultivate and possess the
latters property, which was formerly a subject of homestead application. In the said application, the wards uncle was named as
his heir and successor in interest. Thus, the uncle executed an affidavit relinquishing his rights over the property in favor of
Comintan and Zamora, his grandson and son-in-law and requested the Director of Lands to cancel the homestead application. The
homestead application was cancelled to the protest of Ortiz saying that he should be given preference to purchase the lot inasmuch as
he is the actual occupant and has been in continuous possession of the same. Still, the lot in question was sold at a public auction
wherein defendant Comintan was the only bidder. The plaintiffs protest was investigated upon but his claim was not given due course. On
appeal, respondent court rules that half of the portion of land should be given to the defendant, being the successful bidder. The other half
should be awarded to Zamora without prejudice to the right of Ortiz to participate in the public bidding of the lot. If Ortiz is to be not declared the
successful bidder, defendants should reimburse jointly said plaintiff for the improvements introduced on the land, with him, having the right to
retain the property until after he has been paid for.

Plaintiff appealed the judgment. It was later found out that Ortiz collected tolls on a portion of the property wherein he has not introduced any
improvement.
The judgment became final and executory. Private respondents filed a motion for its execution requesting that they file a bond in lieu of
the amount that should be paid to Ortiz, on the condition that after the accounting of the tolls collected by plaintiff, there is still and amount due
and payable to the said plaintiff, the bond shall be held answerable. Petitioner thus filed the instant petition, contending that in having
issued the Order and Writ of Execution, respondent Court acted without or in excess of jurisdiction, and/or with grave abuse of discretion,
because the said order and writ in effect vary the terms of the judgment they purportedly seek to enforce." He argued that since said judgment
declared the petitioner a possessor in good faith, he is entitled to the payment of the value of the improvements introduced by him on the
whole property, with right to retain the land until he has been fully paid such value. He likewise averred that no payment for improvements has
been made and, instead, a bond therefor had been filed by defendants (private respondents), which, according to petitioner, is not the
payment envisaged in the decision which would entitle private respondents to the possession of the property. Furthermore, with respect to
portion "B", petitioner alleges that, under the decision, he has the right to retain the same until after he has participated and lost in the public
bidding of the land to be conducted by the Bureau of Lands. It is claimed that it is only in the event that he loses in the bidding that he can be
legally dispossessed thereof.
It is the position of petitioner that all the fruits of the property, including the tolls collected by him from the passing vehicles, which according to
the trial court amounts to P25,000.00, belongs to petitioner and not to defendant/private respondent Quirino Comintan, in accordance with the
decision itself, which decreed that the fruits of the property shall be in lieu of interest on the amount to be paid to petitioner as reimbursement
for improvements. Any contrary opinion, in his view, would be tantamount to an amendment of a decision which has long become final and
executory and, therefore, cannot be lawfully done.The issue decisive of the controvery isafter the rendition by the trial court of its judgment in
Civil Case No. C-90 on March 22, 1966 confirming the award of one-half of the property to Quirino Comintanwhether or not petitioner is still
entitled to retain for his own exclusive benefit all the fruits of the property, such as the tolls collected by him from March 1967 to December
1968, and September 1969 to March 31, 1970, amounting to about P25,000.00.
RULING: Negative
1. No contention that the possessor in good faith is entitled to the fruits received before the possession is legally interrupted. Possession in
good faith ceases or is legally interrupted from the moment defects in the title are made known to the possessor, by extraneous evidence or by
the filing of an action in court by the true owner for the recovery of the property. Hence, all the fruits that the possessor may receive from the
time he is summoned in court, or when he answers the complaint, must be delivered and paid by him to the owner or lawful possessor.
2. However, even after his good faith ceases, the possessor can still retain the property (Art 546) until he has been fully reimbursed for all the
necessary and useful expenses made by him on the property. he principal characteristic of the right of retention is its accessory character. It is
accessory to a principal obligation. Considering that the right of the possessor to receive the fruits terminates when his good faith ceases, it is
necessary, in order that this right to retain may be useful, to concede to the creditor the right to secure reimbursement from the fruits of the
property by utilizing its proceeds for the payment of the interest as well as the principal of the debt while he remains in possession.
3. Petitioner cannot appropriate for his own exclusive benefit the tolls which he collected from the property retained by him. It was his duty
under the law, after deducting the necessary expenses for his administration, to apply such amount collected to the payment of the interest,
and the balance to the payment of the obligation. We hold, therefore, that the disputed tolls, after deducting petitioner's expenses for
administration, belong to Quirino Comintan, owner of the land through which the toll road passed, further considering that the same was on
portions of the property on which petitioner had not introduced any improvement. The trial court itself clarified this matter when it placed the toll
road under receivership. The omission of any mention of the tolls in the decision itself may be attributed to the fact that the tolls appear to have
been collected after the rendition of the judgment of the trial court.
4. As to the other lot, it appears that no public sale has yet been conducted by the Bureau of Lands and, therefore, petitioner is entitled to
remain in possession thereof. This is not disputed by respondent Eleuterio Zamora. After public sale is had and in the event that Ortiz is not
declared the successful bidder, then he should be reimbursed by respondent Zamora in the corresponding amount for the improvements on
Lot 5785-B.
G.R. No. L-32974 July 30, 1979
BARTOLOME ORTIZ, petitioner,
vs.
HON. UNION C. KAYANAN, in his capacity as Judge of the Court of First Instance of Quezon, Branch IV; ELEUTERIO
ZAMORA, QUIRINO COMINTAN, VICENTE FERRO, AND GREGORIO PAMISARAN,respondents.
Salonga, Ordo;ez, Yap, Sicat & Associates and Salvador, Ulgado & Carbon for petitioner.
Jose A. Cusi for private respondents.

ANTONIO, J.:

1wph1.t

Petition for certiorari and Prohibition with Preliminary Injunction to nullify the Order of respondent Judge directing the execution
of the final judgment in Civil Case No. C-90, entitled "Bartolome Ortiz vs. Secretary of Agriculture and Natural Resources, et al.,"

and the Writ of Execution issued to implement said Order, allegedly for being inconsistent with the judgment sought to be enforced.
Civil Case No. C-90 was filed by Bartolome Ortiz who sought the review and/or annulment of the decision of the Secretary of
Agriculture and Natural Resources, giving preference to the sales applications of private respondents Quirino Comintan and
Eleuterio Zamora over Lot No. 5785, PLS-45, located at Barrio Cabuluan, Calauag, Quezon.
I
The factual background of the case, as found by respondent Court, is as follows:

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... The lot in controversy was formerly the subject of Homestead Application No. 122417 of Martin Dolorico II,
plaintiff's ward who died on August 20, 1931; that since then it was plaintiff who continued the cultivation and
possession of the property, without however filing any application to acquire title thereon; that in the Homestead
Application No. 122417, Martin Dolorico II named his uncle, Martin Dolorico I as his heir and successor in
interest, so that in 1951 Martin Dolorico I executed an affidavit relinquishing his rights over the property in favor
of defendants Quirino Comintan and Eleuterio Zamora, his grandson and son-in-law, respectively, and requested
the Director of Lands to cancel the homestead application; that on the strength of the affidavit, Homestead
Application No. 122417 was cancelled and thereafter, defendants Comintan and Zamora filed their respective sales
applications Nos. 8433 and 9258; that plaintiff filed his protest on November 26, 1951 alleging that he should be
given preference to purchase the lot inasmuch as he is the actual occupant and has been in continuous possession
of the same since 1931; and inspite of plaintiff's opposition, "Portion A" of the property was sold at public auction
wherein defendant Comintan was the only bidder; that on June 8, 1957, investigation was conducted on plaintiff's
protest by Assistant Public Lands Inspector Serapion Bauzon who submitted his report to the Regional Land
Officer, and who in turn rendered a decision on April 9, 1958, dismissing plaintiff's claim and giving due course to
defendants' sales applications on the ground that the relinquishment of the homestead rights of Martin Dolorico I in
favor of Comintan and Zamora is proper, the former having been designated as successor in interest of the original
homestead applicant and that because plaintiff failed to participate in the public auction, he is forever barred to
claim the property; that plaintiff filed a motion for reconsideration of this decision which was denied by the
Director of Lands in his order dated June 10, 1959; that, finally, on appeal to the Secretary of Agriculture and
Natural Resources, the decision rendered by the Regional Land Officer was affirmed in toto. 1
On March 22, 1966, respondent Court rendered judgment in the afore-mentioned civil case, the dispositive portion of which reads
as follows:
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IN VIEW OF THE FOREGOING CONSIDERATIONS, judgment is hereby rendered awarding Lot No. 5785-A of
PLS-45, (Calauag Public Land Subdivision) one-half portion of the property in litigation located at Bo. Cabuluan,
Calauag, Quezon, in favor of defendant QUIRINO COMINTAN, being the successful bidder in the public auction
conducted by the bureau of Lands on April 18, 1955, and hereby giving due course to the Sales Application No.
9258 of defendant Eleuterio Zamora over the other half, Lot No. 5785-B of PLS-45, Calauag, without prejudice to
the right of plaintiff BARTOLOME ORTIZ to participate in the public bidding of the same to be announced by the
Bureau of Lands, Manila. However, should plaintiff Bartolome Ortiz be not declared the successful bidder thereof,
defendants Quirino Comintan and Eleuterio Zamora are ordered to reimburse jointly said plaintiff the
improvements he has introduced on the whole property in the amount of THIRTEEN THOUSAND SIX HUNDRED
THIRTY-TWO (P13,632.00) PESOS, the latter having the right to retain the property until after he has been fully
paid therefor, without interest since he enjoys the fruits of the property in question, with prejudice and with costs
again the plaintiff. 2
Plaintiff appealed the decision to the Court of Appeals.
Two (2) years after the rendition of the judgment by the court a quo, while the case was pending appeal and upon petition of private
respondents Quirino Comintan and Eleuterio Zamora, respondent Court appointed respondent Vicente Ferro, Clerk of Court, as
Receiver to collect tolls on a portion of the property used as a diversion road. On August 19, 1969, the Court of Appeals issued a
Resolution annulling the Order appointing the Receiver. Subsequently, on February 19, 1970, the Appellate Court affirmed the
decision of the trial court. A petition for review on certiorari of the decision of the Court of Appeals was denied by this Court on
April 6, 1970. At this point, private respondents filed a petition for appointment of a new receiver with the court a quo. This
petition was granted and the receiver was reappointed. Petitioner sought the annulment of this Order with the Court of Appeals, but
said Court ruled that its decision had already become final and that the records of the case were to be remanded to the trial court.
Not satisfied with such denial, petitioner filed a petitioner for certiorari, prohibition and mandamus with preliminary injunction
before this Court, 3 praying for the annulment of the Order reappointing the Receiver. On July 13, 1970, the petition was dismissed by
this Court on the ground of insufficient showing of grave abuse of discretion.
II
The judgment having become final and executory private respondents filed a motion for the execution of the same, praying as
follows:
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WHEREFORE, it is respectfully prayed of this Honorable Court to order the issuance of a writ of execution in
accordance with the judgment of this Honorable Court, confirmed by the Court of Appeals and the Supreme Court,
commanding any lawful officer to deliver to defendants Comintan and Zamora the land subject of the decision in
this case but allowing defendants to file a bond in such amount as this Honorable Court may fix, in lieu of the
P13,632.00 required to be paid to plaintiff, conditioned that after the accounting of the tools collected by plaintiff,
there is still an amount due and payable to said plaintiff, then if such amount is not paid on demand, including the
legal interests, said bond shall be held answerable.
Ordering further the plaintiff to render an accounting of the tolls he collected from March of 1967 to December 31,
1968 and from September 1969 to March 31, 1970, and deliver said tolls collected to the receiver and if judgment
is already executed, then to Quirino Comintan and Eleuterio Zamora; and,
Finally, to condemn plaintiff to pay moral damages for withholding the tools which belong to your movant in an
amount this Court may deem just in the premises. 4
Acting upon the foregoing motion, respondent Judge issued an Order, dated September 23, 1970, stating, among others, the
following:
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The records further disclosed that from March 1967 to December 31, 1968, piaintiff Bartolome Ortiz collected
tolls on a portion of the propertv in question wherein he has not introduced anv improvement particularlv on Lot
No. 5785-A; PLS-45 awarded to defendant Quirino Comintan, thru which vehicular traffic was detoured or
diverted, and again from September 1969 to March 31, 1970, the plaintiff resumed the collection of tools on the
same portion without rendering any accounting on said tolls to the Receiver, who, was reappointed after submitting
the required bond and specifically authorized only to collect tolls leaving the harvesting of the improvements to the
plaintiff.
xxx xxx xxx
ln virtue of he findings of this Court as contained in the dispositive portion of its decision, the defendants are
jointly obligated to pay the plaintiff in the amount of P13,632.00 as reasonable value of the improvements he
introduced on the whole property in question, and that he has the right of retention until fully paid. It can be
gleaned from the motion of the defendants that if plaintiff submits an accounting of the tolls he collected during
the periods above alluded to, their damages of about P25,000.00 can more than offset their obligation of
P13,362.00 in favor of the plaintiff, thereafter the possession of the land be delivered to the defendants since the
decision of the Supreme Court has already become final and executory, but in the interregnum pending such
accounting and recovery by the Receiver of the tolls collected by the plaintiff, the defendants pray that they
allowed to put up a bond in lieu of the said P13,632.00 to answer for damages of the former, if any.
On the other hand, plaintiff contends in his opposition, admitting that the decision of the Supreme Court has
become final and executory; (1) the offer of a bond in lieu of payment of P13,632.00 does not, and cannot, satisfy
the condition imposed in the decision of this Court which was affirmed in toto; (2) the public sale of Portion "B" of
the land has still to take place as ordained before the decision could be executed; and, (3) that whatever sums
plaintiff may derive from the property cannot be set off against what is due him for the improvements he made, for
which he has to be reimbursed as ordered.
xxx xxx xxx
Let it be known that plaintiff does not dispute his having collected tolls during the periods from March 1967 to
December 31, 1968 and from September 1969 to March 31, 1970. The Supreme Court affirmed the decision of this
Court its findings that said tolls belong to the defendant, considering that the same were collected on a portion of
the land question where the plaintiff did not introduce any improvement. The reimbursement to the plaintiff
pertains only to the value of the improvements, like coconut trees and other plants which he introduced on the
whole property. The tolls collected by the plaintiff on an unimproved portion naturally belong to the defendants,
following the doctrine on accretion. Further, the reappointment of a Receiver by this Court was upheld by the
Supreme Court when it denied the petition for certiorari filed by the plaintiff, bolstering the legal claim of
defendants over said tolls. Thus, the decision of the Supreme Court rendered the decision of this Court retroactive
from March 22, 1966 although pending accounting of the tolls collected by the plaintiff is justified and will not
prejudice anybody, but certainly would substantially satisfy the conditions imposed in the decision. However,
insofar as the one-half portion "B" of the property, the decision may be executed only after public sale by the
Bureau of Lands shall be accomplished.
WHEREFORE, finding the Motion for Execution filed by the defendants to be meritorious, the same is granted;
provided, however, that they put up a bond equal the adjudicated amount of P13,632.00 accruing in favor of the
plaintiff, from a reputable or recognized bonding or surety company, conditioned that after an accounting of the
tolls collected by the plaintiff should there be found out any balance due and payable to him after reckoning said

obligation of P13,632.00 the bond shall be held answerable therefor. 5

Accordingly, a Writ of Execution was issued after private respondent Quirino Comintan had filed the required bond. The writ
directed the Sheriff to enforce the decision of the Court, and stated, part in, the following:
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But should there be found any amount collectible after accounting and deducting the amount of P3,632.00, you are
hereby ordered that of the goods and chattels of Bartolome Ortiz of Bo. Kabuluan, Calauag, Quezon, be caused to
be made any excess in the above-metioned amount together with your lawful fees and that you render same to
defendant Quirino Comintan. If sufficient personal property cannot be found thereof to satisfy this execution and
lawful fees thereon, then you are commanded that of the lands and buildings of the said BARTOLOME ORTIZ
you make the said excess amount in the manner required by the Rules of Court, and make return of your
proceedings within this Court within sixty (60) days from date of service.
You are also ordered to cause Bartolome Ortiz to vacate the property within fifteen (15) days after service thereof
the defendant Quirino Comintan having filed the required bond in the amount of THIRTEEN THOUSAND SIX
HUNDRED THIRTY-TWO (P13,632.00) PESOS. 6
On October 12, 1970, petitioner filed a Motion for Reconsideration of the aforesaid Order and Writ of Execution, alleging:

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(a) That the respondent judge has no authority to place respondents in possession of the property;
(b) That the Supreme Court has never affirmed any decision of the trial court that tolls collected from the
diversionary road on the property, which is public land, belong to said respondents;
(c) That to assess petitioner a P25,000.00 liability for damages is purely punitive imposition without factual or
legal justification.
The foregoing Motion for Reconsideration was denied by respondent Judge per Order dated November 18, 1970. Saod Order states,
in part:
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It goes without saying that defendant Comintan is entitled to be placed in possession of lot No. 5785-A of PLS-45
(Calauag Public Land Subdivision) and enjoyment of the tolls from March, 1967 to March, 1968 and from
September, 1969 to March 31, l970 which were received by plaintiff Bartolome Ortiz, collected from the property
by reason of the diversion road where vehicular traffic was detoured. To defendant Comintan belongs the tolls thus
collected from a portion of the land awarded to him used as a diversionary road by the doctrine of accretion and his
right over the same is ipso jure, there being no need of any action to possess said addition. It is so because as
consistently maintained by the Supreme Court, an applicant who has complied with all the terms and conditions
which entitle him to a patent for a particular tract of publlic land, acquires a vested right therein and is to be
regarded as equitable owner thereof so that even without a patent, a perfected homestead or sales application is a
property right in the fullest sense, unaffectcd by the fact that the paramount title is still in the Government and no
subsequent law can deprive him of that vested right The question of the actual damages suffered by defendant
Comintan by reason of the unaccounted tolls received by plaintiff had already been fully discussed in the order of
September 23, 1970 and the Court is honestly convinced and believes it to be proper and regular under the
circumstances.
Incidentally, the Court stands to correct itself when in the same order, it directed the execution of he decision with
respect to the one-half portion "B" of the property only after the public sale by the Bureau of Lands, the same
being an oversight, it appearing that the Sales Application of defendant Eleuterio Zamora had already been
recognized and full confirmed by the Supreme Court.
In view thereof, finding the motion filed by plaintiff to be without merit, the Court hereby denies the same and the
order of September 23, 1970 shall remain in full force subject to the amendment that the execution of the decision
with respect to the one-half portion "B" shall not be conditioned to the public sale by the Bureau of Lands.
SO ORDERED. 7
III
Petitioner thus filed the instant petition, contending that in having issued the Order and Writ of Execution, respondent Court "acted
without or in excess of jurisdiction, and/or with grave abuse of discretion, because the said order and writ in effect vary the terms of
the judgment they purportedly seek to enforce." He argued that since said judgment declared the petitioner a possessor in good
faith, he is entitled to the payment of the value of the improvements introduced by him on the whole property, with right to retain
the land until he has been fully paid such value. He likewise averred that no payment for improvements has been made and, instead,
a bond therefor had been filed by defendants (private respondents), which, according to petitioner, is not the payment envisaged in
the decision which would entitle private respondents to the possession of the property. Furthermore, with respect to portion "B",
petitioner alleges that, under the decision, he has the right to retain the same until after he has participated and lost in the public
bidding of the land to be conducted by the Bureau of Lands. It is claimed that it is only in the event that he loses in the bidding that

he can be legally dispossessed thereof.

It is the position of petitioner that all the fruits of the property, including the tolls collected by him from the passing vehicles, which
according to the trial court amounts to P25,000.00, belongs to petitioner and not to defendant/private respondent Quirino Comintan,
in accordance with the decision itself, which decreed that the fruits of the property shall be in lieu of interest on the amount to be
paid to petitioner as reimbursement for improvements. Any contrary opinion, in his view, would be tantamount to an amendment of
a decision which has long become final and executory and, therefore, cannot be lawfully done.
Petitioner, therefore, prayed that: (1) a Writ of Preliminary Injunction be issued enjoining the enforcement of the Orders of
September 23, 1970 and November 18, 1970, and the Writ of Execution issued thereto, or restoring to petitioner the possession of
the property if the private respondents had been placed in possession thereof; (2) annulling said Orders as well as the Writ of
Execution, dissolving the receivership established over the property; and (3) ordering private respondents to account to petitioner
all the fruits they may have gathered or collected from the property in question from the time of petitioiier's illegal dispossession
thereof.
On January 29, 1971, this Court issued the Writ of Preliminary Injunction. On January 30, 1971, private respondents filed a Motion
for Reconsideration and/or Modification of the Order dated January 29, 1971. This was followed by a Supplemental Motion for
Reconsideration and Manifestation on February 3, 1971. In the latter motion, private respondents manifested that the amount of
P14,040.96, representing the amount decreed in the judgment as reimbursement to petitioner for the improvements, plus interest for
six months, has already been deposited by them in court, "with the understanding that said amount shall be turned over to the
plaintiff after the court a quo shall have determined the improvement on Lot 5785-A, and subsequently the remaining balance of the
deposit shall be delivered to the petitioner (plaintiff therein) in the event he loses the bid for Lot 5785-B in favor of private
respondent Eleuterio Zamora." 8 The deposit is evidenced by a certification made by the Clerk of the Courta quo. 9 Contending that said
deposit was a faithful compliance with the judgment of the trial court, private respondent Quirino Comintan prayed for the dissolution of
the Writ of Injunction.
It appears that as a consequence of the deposit made by private respondents, the Deputy, Sheriff of Calauag, Quezon ousted
petitioner's representative from the land in question and put private respondents in possession thereof. 10
On March 10, 1971, petitioner filed a "Comment on Respondents' 'Motion for Reconsideration' dated January 29, 1971' and
'Supplemental Motion for Reconsideration and Manifestation,'" contending that the tender of deposit mentioned in the Suplemental
Motion was not really and officially made, "inasmuch as the same is not supported by any official receipt from the lower court, or
from its clerk or cashier, as required by law;" that said deposit does not constitute sufficient compliance with the judgment sought
to be enforced, neither was it legally and validly made because the requisites for consignation had not been complied with; that the
tender of legal interest for six months cannot substitute petitioner's enjoyment of the fruits of the property as long as the judgment
in Civil Case No. C-90 has not been implemented in the manner decreed therein; that contrary to the allegations of private
respondents, the value of the improvements on the whole property had been determined by the lower court, and the segregation of
the improvements for each lot should have been raised by them at the opportune moment by asking for the modification of the
decision before it became final and executory; and that the tolls on the property constituted "civil fruits" to which the petitioner is
entitled under the terms of the decision.
IV
The issue decisive of the controvery isafter the rendition by the trial court of its judgment in Civil Case No. C-90 on March 22,
1966 confirming the award of one-half of the property to Quirino Comintanwhether or not petitioner is still entitled to retain for
his own exclusive benefit all the fruits of the property, such as the tolls collected by him from March 1967 to December 1968, and
September 1969 to March 31, 1970, amounting to about P25,000.00. In other words, petitioner contends that so long as the
aforesaid amount of P13,632,00 decreed in the judgment representing the expenses for clearing the land and the value of the
coconuts and fruit trees planted by him remains unpaid, he can appropriate for his exclusive benefit all the fruits which he may
derive from the property, without any obligation to apply any portion thereof to the payment of the interest and the principal of the
debt.
We find this contention untenable.
There is no question that a possessor in good faith is entitled to the fruits received before the possession is legally
interrupted. 11 Possession in good faith ceases or is legally interrupted from the moment defects in the title are made known to the
possessor, by extraneous evidence or by the filing of an action in court by the true owner for the recovery of the property. 12 Hence, all the
fruits that the possessor may receive from the time he is summoned in court, or when he answers the complaint, must be delivered and
paid by him to the owner or lawful possessor. 13
However, even after his good faith ceases, the possessor in fact can still retain the property, pursuant to Article 546 of the New Civil
Code, until he has been fully reimbursed for all the necessary and useful expenses made by him on the property. This right of
retention has been considered as one of the conglomerate of measures devised by the law for the protection of the possessor in good
faith. Its object is to guarantee the reimbursement of the expenses, such as those for the preservation of the property, 14 or for the
enhancement of its utility or productivity. 15 It permits the actual possessor to remain in possession while he has not been reimbursed by
the person who defeated him in the possession for those necessary expenses and useful improvements made by him on the thing

possessed. The principal characteristic of the right of retention is its accessory character. It is accessory to a principal obligation.
Considering that the right of the possessor to receive the fruits terminates when his good faith ceases, it is necessary, in order that this
right to retain may be useful, to concede to the creditor the right to secure reimbursement from the fruits of the property by utilizing its
proceeds for the payment of the interest as well as the principal of the debt while he remains in possession. This right of retention of the
property by the creditor, according to Scaevola, in the light of the provisions of Article 502 of the Spanish Civil Code, 16 is considered not
a coercive measure to oblige the debtor to pay, depriving him temporarily of the enjoyment of the fruits of his property, but as a means of
obtainitig compensation for the debt. The right of retention in this case is analogous to a contract of antichresis and it cati be considered as
a means of extinguishing the obligation, inasmuch as the right to retain the thing lasts only for the period necessary to enable the creditor
to be reimbursed from the fruits for the necessary and useful expenses. 17

According to Manresa, the right of retention is, therefore, analogous to that of a pledge, if the property retained is a movable, and to
that of antichresis, if the property held is immovable. 18 This construction appears to be in harmony with similar provisions of the civil
law which employs the right of retention as a means or device by which a creditor is able to obtain the payment of a debt. Thus, under
Article 1731 of the New Civil Code, any person who has performed work upon a movable has a right to retain it by way of pledge until he
is paid. Similarly, under Article 1914 of the same Code, the agent may retain in pledge the things which are the object of the agency until
the principal effects reimbursement of the funds advanced by the former for the execution of the agency, or he is indemnified for all
damages which he may have suffered as a consequence of the execution of the agency, provided he is free from fault. To the same effect,
the depositary, under Article 1994 of the same Code, may retain the thing in pledge until the full payment of what may be due him by
reason of the deposit. The usufructuary, pursuant to Article 612 of the same Code, may retain the property until he is reimbursed for the
amount paid for taxes levied on the capital (Article 597) and tor extraordinary repairs (Article 594).
In all of these cases, the right of retention is used as a means of extinguishing the obligation. As amply observed by Manresa: "El
derecho de retencion, lo hemos dicho, es el derecho de prenda o el de anticresis constituido por la ley con independencia de las
partes." 19 In a pledge, if the thing pledged earns or produces fruits, income, dividends or interests, the creditor shall compensate what he
receives with those which are owing him. 20 In the same manner, in a contract of antichresis, the creditor acquires the right to receive the
fruits of an immovable of his debtor with the obligation to apply them to payment of the interest, if owing, and thereafter to the principal
of his credit. 21 The debtor can not reacquire enjoyment of the immovable until he has actually paid what he owes the creditor. 22
Applying the afore-cited principles to the case at bar, petitioner cannot appropriate for his own exclusive benefit the tolls which he
collected from the property retained by him. It was his duty under the law, after deducting the necessary expenses for his
administration, to apply such amount collected to the payment of the interest, and the balance to the payment of the obligation.
We hold, therefore, that the disputed tolls, after deducting petitioner's expenses for administration, belong to Quirino Comintan,
owner of the land through which the toll road passed, further considering that the same was on portions of the property on which
petitioner had not introduced any improvement. The trial court itself clarified this matter when it placed the toll road under
receivership. The omission of any mention of the tolls in the decision itself may be attributed to the fact that the tolls appear to have
been collected after the rendition of the judgment of the trial court.
The records further reveal that earnest efforts have been made by private respondents to have the judgment executed in the most
practicable manner. They deposited in court the amount of the judgment in the sum of P13,632.00 in cash, subject only to the
accounting of the tolls collected by the petitioner so that whatever is due from him may be set off with the amount of
reimbursement. This is just and proper under the circumstances and, under the law, compensation or set off may take place, either
totally or partially. Considering that petitioner is the creditor with respect to the judgment obligation and the debtor with respect to
the tolls collected, Comintan being the owner thereof, the trial court's order for an accounting and compensation is in accord with
law. 23
With respect to the amount of reimbursement to be paid by Comintan, it appears that the dispositive portion of the decision was
lacking in specificity, as it merely provided that Comintan and Zamora are jointly liable therefor. When two persons are liable under
a contract or under a judgment, and no words appear in the contract or judgment to make each liable for the entire obligation, the
presumption is that their obligation is joint ormancomunada, and each debtor is liable only for a proportionate part of the
obligation. 24 The judgment debt of P13,632.00 should, therefore, be pro-rated in equal shares to Comintan and Zamora.
Regarding Lot 5785-B, it appears that no public sale has yet been conducted by the Bureau of Lands and, therefore, petitioner is
entitled to remain in possession thereof. This is not disputed by respondent Eleuterio Zamora. 25 After public sale is had and in the
event that Ortiz is not declared the successful bidder, then he should be reimbursed by respondent Zamora in the corresponding amount
for the improvements on Lot 5785-B.
WHEREFORE, in view hereof, the Order of respondent Court of November 18, 1970 is hereby modified to conform to the
foregoing judgment. The Writ of Preliminary Injunction, dated January 29, 1971, is hereby dissolved. Without special
pronouncement as to costs.
Barredo (Chairman), Concepcion, Jr. and Guerrero, JJ., concur.
Aquino, J., concurs in the result.
Santos and Abad Santos, JJ., are on leave.

1wph1.t

Guerrero, J., was designated to sit in the Second Division

#Footnotes

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1 Annex "B", Petition, pp. 26-27. Rollo.

2 Ibid, pp. 35-36, Rollo. Emphasis supplied.
3 Docketed as G.R. No. L-32206, entitleed "Bartolome Ortiz vs. Hon. Union C. Kaynan, Eleuterio Zamora,
Quirino Comintan and Vicente Ferro."
4 Annex "D", Petition, p. 48, Rollo.
5 Annex "A", Petition, pp. 17-20, Rollo.
6 Annex "C", Petition, p. 38, Rollo.
7 Annex "G ", Petition, pp. 69-71, Rollo.
8 Private respondents' Supplemental Motion for Reconsideration and Manifestation, pp. 87-88, Rollo.
9 Annex "B" of above Supplemental Motion, p.9l, Rollo.
10 Manifestation of Deputy Sheriff Gregorio B. Pamisaran, p. 95, Rollo.
11 Article 544, New Civil Code.
12 Tacas v. Tobon, 53 Phil. 356; Article 528, New Civil Code.
13 Araujo v. Celis, 16 Phil. 329.
14 IV Manresa, 1951 Ed., pp. 293-294.
15 Ibid., pp. 316- 318.
16 Now Article 594, New Civil Code.
17 Notese en este caso una singularidad: En la situacion juridica prevista por el art. 502, la retencion se considera,
no como medio coercitivo para obligar al deudor al pago, privandole temporalmente de los beneficios que el goce
de su propiedad pudiera reportarle, sino como medio de obtener una compansacion. La retencion tiene en este caso
mucha analogia con el pacto anticretico, y podemos considerarla como medio extintivo de una obligacion, puesto
que el derecho de retener la cosa dura solo el tiempo necessario para compensar con los frutos el coste de las
reparaciones extraordinarias indespensables para la subsistencia de la cosa usufructuada. El Codigo se desvia
conscientemente de las propiedades genuinas del ius retentionis, pero la desviacion es racionally va derecha al
logro de una finalidad juridica. ' (8 Scaevola, Codigo, Civil, 1948 Ed., p. 478.)
18 Facil es deducir, descartando el art. 494, por su menor relacion con el caso en que nos encontramos, que el
Codigo asimila el derecho de retencion en los bienes muebles a la prenda, y en los bienes inmuebles a la anticresis,
que confiere al acreedor el derecho de percibir los frutos de un inmueble con la obligacion de aplicarlos, al pago de
los intereses, si se debieren, y despues al de capital de su credito (art. 1.881).
An tratandose de cosas muebles, la ley hace cuanto esta a su alcance para hacer util o provechoso este derecho. De
aqui el articulo 1.868: 'Si la prenda produce intereses, compensara el acreedor los que perciba con los que se le
deben; y si no se le deben, o en cuanto excedan de los legitimamente debidos, los imputara al capital.'
Respecto a la anticresis, veanse los articulos 1.882 y 1.883: 'El acreedor, dice el primero, salvo pacto en contrario,
esta obligado a pagar las contribuciones v cargas que pesen sobre la finca. Lo esta asimismo a hacer los gastos
necesarios para su conservacion y repacion. Se deduciran de los frutos las cantidades que emplee en uno u otro
objeto'. 'El deudor, dice el 1.883, no puede readquirir el goce del inmueble sin haher pagado antes enteramente lo
que debe a su acreedor.'
La posesion puede recaer en cosas muebles o inmuebles; la retencion de que habla el art. 453 puede, pues, recaer
sobre unas o otras indistintamente. De aqui tal vez la generalidad de la expresion: retener hasta el pago. Pero en el
art. 453 se trata de gastos reembolsables, de una deuda, como en los articulos 502, 522, 1.600, 1.730. 1. 780, 1.866
y 1.881. Debemos deducir de aqui, como alguien lo hace, que el derecho de retencion en el poseedor se reduce a
un simple deposito en los bienes muebles y a una mera administracion en los muebles? Que bentaja reportaria esa
deduccion al poseedor ni al propietario, al acreedor ni al deudor, al vencedor ni al vencido? No es mas logico
equiparar el derecho de retencion a la prenda o a la anticresis? La Idea del Codigo es mas bien esta que la otra;
propietario y poseedor ganan mas con ella. ( IV Manresa. 1951 Ed., pp. 328-329.)

19 IV Manresa, 1951 Ed., p. 330.

20 Article 2102, New Civil Code.
21 Article 2132, Ibid.
22 Article 2136, Ibid
23 Cf. Articles 1278, 1279 and 1283, Ibid
24 Cacho v. Valles, 45 Phil, 107; Ramos v. Gibbon, 67 Phil. 371.
25 Memorandum for Respondents, p. 195, Rollo.