PROPERTY
In the sale of immovables, the lack of title of the vendor
BOOK TWO Property, Ownership, and Its Modifications
Title 1 Classification of Property
A. Concept of Property (Art. 414)
1. Requisites
2. Thing vs. Property
3. Kinds of Property
B. Immovable Property (Art. 415)
C.Movable Property (Arts. 416-418)
CASES:
Ladera v. Hodges Vol.48 No. 12 Official Gazette 5374
FACTS:
1. Hodges entered into a contract promising to sell a lot to
Ladera under certain terms and conditions. One of which
is that the contract may be rescinded and annulled in
case Ladera failed to make the monthly payment 60 days
after it is due.
2. After the execution of the contract, Ladera built a house
on the lot assessed at 4,500 pesos. However, Ladera
failed to pay the agreed installments so Hodges
rescinded the contract and filed an action for ejectment.
3. The MTC ruled in favor of Hodges and issued an alias
writ of execution. Pursuant thereto, the sheriff levied upon
all rights, interests and participation over the house.
Notices of sale were posted, however, were not
published in a newspaper of general circulation.
4. An auction sale was then conducted but Ladera was not
able to attend as she had gone to Manila. The house was
then sold to one Avelina Magno as the highest bidder.
Meanwhile, Ladera sold the same lot to one Manuel Villa
and on the same day purchased the house from Magno
for 200 pesos. This, however, was not recorded.
5. Ladera then returned to Iloilo and learned what
happened. She went to see the sheriff and represented
that the property can still be redeemed and so she gave
him 230 pesos. It does not appear, however, that it was
turned over to Hodges. Thereupon, Ladera filed an action
against Hodges, the sheriff, Magno and Villa to set aside
the sale and recover the house.
6. The lower court ruled in favor of Ladera on the ground of
non-compliance based on Rule 39 of the Rules of Court.
On appeal, Hodges contends that the house, built on a
lot owned by another, should be regarded as movable or
personal property. The sale of the land was also made
without proper publication required by law.
ISSUE: Was the house movable or immovable?
RULING: Immovable.
1. As enumerated in the Civil Code, immovable property
includes lands, buildings, roads and constructions of all
kinds adhered to the soil. The law does not make any
distinction whether or not the owner of the lot was the one
who built the construction.
2. Also, Ladera did not declare his house to be a chattel
mortgage. The object of the levy or sale was real property
and its publication in a newspaper of general circulation
was indespensible. Without it, the execution sale was
void.
3. In addition, Magno, the alleged purchaser at the auction
sale, was a mere employee of Hodges and the low bid
made by her as well as the fact that she sold the house
to Villa on the same day Hodges sold him the land,
proves that she was merely acting for and in behalf of
Hodges.
4.
taints the rights of the subsequent purchasers.
Possession in good faith is not equivalent to title.
5. The principles of accession regard buildings and
constructions as mere accessories to the land on which
it is built, it is logical that said accessories should partake
the nature of the principal thing.
Mindanao Bus Co. v. City Assessor and Treasurer 6 SCRA 197
EN BANC
[G.R. No. L-17870. September 29, 1962.]
MINDANAO BUS COMPANY, petitioner, vs. THE CITY
ASSESSOR & TREASURER and the BOARD OF TAX
APPEALS OF CAGAYAN DE ORO CITY, respondents.
Binamira, Barria & Irabagon for petitioner.
Vicente E. Sabellina for respondents.
SYLLABUS
1. PROPERTY; IMMOVABLE PROPERTY BY DESTINATION;
TWO REQUISITES BEFORE MOVABLES MAY BE DEEMED TO
HAVE BEEN IMMOBILIZED; TOOLS AND EQUIPMENTS
MERELY INCIDENTAL TO BUSINESS NOT SUBJECT TO REAL
ESTATE TAX. Movable equipments, to be immobilized in
contemplation of Article 415 of the Civil Code,must be the
essential and principal elements of an industry or works which are
carried on in a building or on a piece of land. Thus, where the
business is one of transportation, which is carried on without a
repair or service shop, and its rolling equipment is repaired or
serviced in a shop belonging to another, the tools and equipments
in its repair shop which appear movable are merely incidentals and
may not be considered immovables, and, hence, not subject to
assessment as real estate for purposes of the real estate tax.
DECISION
LABRADOR, J p:
This is a petition for the review of the decision of the Court of Tax
Appeals in C.T.A. Case No. 710 holding that the petitioner
Mindanao Bus Company is liable to the payment of the realty tax
on its maintenance and repair equipment hereunder referred to.
Respondent City Assessor of Cagayan de Oro City assessed at
P4,400 petitioner's above-mentioned equipment. Petitioner
appealed the assessment to the respondent Board of Tax Appeals
on the ground that the same are not realty. The Board of Tax
Appeals of the City sustained the city assessor, so petitioner
herein filed with the Court of Tax Appeals a petition for the review
of the assessment.
In the Court of Tax Appeals the parties submitted the following
stipulation of facts:
"Petitioner and respondents, thru their respective counsels agreed
to the following stipulation of facts:
"1. That petitioner is a public utility solely engaged in transporting
passengers and cargoes by motor trucks, over its authorized lines
in the Island of Mindanao, collecting rates approved by the Public
Service Commission;
"2. That petitioner has its main office and shop at Cagayan de Oro
City. It maintains Branch Offices and/or stations at Iligan City,
Lanao; Pagadian, Zamboanga del Sur; Davao City and Kibawe,
Bukidnon Province;
"3. That the machineries sought to be assessed by the respondent
as real properties are the following:
"(a) Hobart Electric Welder Machine, appearing in the attached
photograph, marked Annex 'A';
"(b) Storm Boring machine, appearing in the attached photograph,
marked Annex 'B';
"(c) Lathe machine with motor, appearing in the attached
photograph, marked Annex 'C';
"(d) Black and Decker Grinder, appearing in the attached
photograph, marked Annex 'D';
"(e) PEMCO Hydraulic Press, appearing in the attached
photograph, marked Annex 'E';
"(f) Battery charger (Tungar charge machine) appearing in the
attached photograph, marked Annex 'F'; and
"(g) D-Engine Waukesha-M-Fuel, appearing in the attached
photograph, marked Annex 'G'.
"4. That these machineries are sitting on cement or wooden
platforms as may be seen in the attached photographs which form
part of this agreed stipulation of facts;
"5. That petitioner is the owner of the land where it maintains and
operates a garage for its TPU motor trucks; a repair shop;
blacksmith and carpentry shops, and with these machineries
which are placed therein, its TPU trucks are made; body
constructed; and same are repaired in a condition to be
serviceable in the TPU land transportation business it operates;
"6. That these machineries have never been or were never used
as industrial equipments to produce finished products for sale, nor
to repair machineries, parts and the like offered to the general
public indiscriminately for business or commercial purposes for
which petitioner has never engaged in, to date."
The Court of Tax Appeals having sustained the respondent city
assessor's ruling, and having denied a motion for reconsideration,
petitioner brought the case to this Court assigning the following
errors:
"1. The Honorable Court of Tax Appeals erred in upholding
respondents' contention that the questioned assessments are
valid; and that said tools, equipments or machineries are
immovable taxable real properties.
"2. The Tax Court erred in its interpretation of paragraph 5 of
Article 415 of the New Civil Code, and holding that pursuant
thereto, the movable equipments are taxable realties, by reason of
their being intended or destined for use in an industry.
"3. The Court of Tax Appeals erred in denying petitioner's
contention that the respondent City Assessor's power to assess
and levy real estate taxes on machineries is further restricted by
section 31, paragraph (c) of Republic Act No. 521; and
"4. The Tax Court erred in denying petitioner's motion for
reconsideration."
Respondents contend that said equipments, the movable, are
immobilized by destination, in accordance with paragraph 5 of
Article 415 of the New Civil Code which provides:
"ART. 415. The following are immovable properties:
xxx xxx xxx
"(5) Machinery, receptacles, instruments or implements intended
by the owner of the tenement for an industry or works which may
be carried on in a building or on a piece of land, and which tend
directly to meet the needs of the said industry or works."
(Emphasis ours.)
Note that the stipulation expressly states that the equipment are
placed on wooden or cement platforms. They can be moved
around and about in petitioner's repair shop. In the case of B. H.
Berkenkotter vs. Cu Unjieng, 61 Phil. 663, the Supreme Court
said:
"Article 344 (Now Art. 415), paragraph (5) of the Civil Code,gives
the character of real property to 'machinery, liquid containers,
instruments or implements intended by the owner of any building
or land for use in connection with any industry or trade being
carried on therein and which are expressly adapted to meet the
requirements of such trade or industry.'
"If the installation of the machinery and equipment in question in
the central of the Mabalacat Sugar Co., Inc., in lieu of the other of
less capacity existing therein, for its sugar industry, converted
them into real property by reason of their purpose, it cannot be
said that their incorporation therewith was not permanent in
character because, as essential and principal elements of a sugar
central, without them the sugar central would be unable to function
or carry on the industrial purpose for which it was established.
Inasmuch as the central is permanent in character, the necessary
machinery and equipment installed for carrying on the sugar
industry for which it has been established must necessarily be
permanent." (Emphasis ours.)
So that movable equipments to be immobilized in contemplation
of the law must first be "essential and principal elements" of an
industry or works without which such industry or works would be
"unable to function or carry on the industrial purpose for which it
was established." We may here distinguish, therefore, those
movables which become immobilized by destination because they
are essential and principal elements in the industry from those
which may not be so considered immobilized because they
are merely incidental, not essential and principal. Thus, cash
registers, typewriters, etc., usually found and used in hotels,
restaurants, theaters, etc. are merely incidentals and are not and
should not be considered immobilized by destination, for these
businesses can continue or carry on their functions without these
equipments. Airline companies use forklifts, jeep-wagons,
pressure pumps, IMB machines, etc. which are incidentals, not
essentials, and thus retain their movable nature. On the other
hand, machineries of breweries used in the manufacture of liquor
and soft drinks, though movable in nature, are immobilized
because they are essential to said industries; but the delivery
trucks and adding machines which they usually own and use and
are found within their industrial compounds are merely incidentals
and retain their movable nature.
Similarly, the tools and equipments in question in this instant case
are, by their nature, not essential and principal elements of
petitioner's business of transporting passengers and cargoes by
motor trucks. They are merely incidentals acquired as movables
and used only for expediency to facilitate and/or improve its
service. Even without such tools and equipments, its business may
be carried on, as petitioner has carried on, without such
equipments, before the war. The transportation business could be
carried on without the repair or service shop if its rolling equipment
is repaired or serviced in another shop belonging to another.
The law that governs the determination of the question at issue is
as follows:
"ART. 415. The following are immovable property:
xxx xxx xxx
"(5) Machinery, receptacles, instruments or implements intended
by the owner of the tenement for an industry or works which may
be carried on in a building or on a piece of land, and which tend
directly to meet the needs of the said industry or works;" (Civil
Code of the Phil.)
Aside from the element of essentiality the above-quoted provision
also requires that the industry or works be carried on in a
building or on a piece of land. Thus in the case of Berkenkotter vs.
Cu Unjieng, supra, the "machinery, liquid containers, and
instruments or implements" are found in a building constructed on
the land. A sawmill would also be installed in a building on land
more or less permanently, and the sawing is conducted in the land
or building.
But in the case at bar the equipments in question are destined only
to repair or service the transportation business, which is not
carried on in a building or permanently on a piece of land, as
demanded by the law. Said equipments may not, therefore, be
deemed real property.
Resuming what we have set forth above, we hold that the
equipments in question are not absolutely essential to the
petitioner's transportation business, and petitioner's business is
not carried on in a building, tenement or on a specified land, so
said equipment may not be considered real estate within the
meaning of Article 415 (c) of the Civil Code.
WHEREFORE, the decision subject of the petition for review is
hereby set aside and the equipment in question declared not
subject to assessment as real estate for the purposes of the real
estate tax. Without costs. So ordered.
||| (Mindanao Bus Co. v. City Assessor & Treasurer, G.R. No. L-
17870, [September 29, 1962], 116 PHIL 501-506)
Makati Leasing & Finance Corp. v. Wearever Textiles 122 SCRA
296
SECOND DIVISION
[G.R. No. L-58469. May 16, 1983.]
MAKATI LEASING and FINANCE
CORPORATION, petitioner, vs. WEAREVER TEXTILE MILLS,
INC., and HONORABLE COURT OF APPEALS, respondents.
Loreto C. Baduan for petitioner.
Ramon D. Bagatsing & Assoc. (collaborating counsel) for
petitioner.
Jose V. Mancella for respondent.
SYLLABUS
1. REMEDIAL LAW; PETITION FOR REVIEW; NOT RENDERED
MOOT AND ACADEMIC; WHERE RIGHT TO QUESTION
DECISION, TIMELY RESERVED. The contention of private
respondent is without merit. When petitioner returned the subject
motor drive, it made itself unequivocably clear that said action was
without prejudice to a motion for reconsideration of the Court of
Appeals' decision, as shown by the receipt duly signed by
respondent's representative. Considering that petitioner has
reserved its right to question the propriety of the Court of Appeals'
decision, the contention of private respondent that this petition has
been mooted by such return may not be sustained.
2. CIVIL LAW; PROPERTY; MACHINERY THOUGH
IMMOBILIZED BY DESTINATION IF TREATED BY THE
PARTIES AS A PERSONALTY FOR PURPOSES OF A
CHATTEL MORTGAGE LEGAL, WHERE NO THIRD PARTY IS
PREJUDICED. The next and the more crucial question to be
resolved in this petition is whether the machinery in suit is real or
personal property from the point of view of the parties. Examining
the records of the instance case, the Supreme Court found no
logical justification to exclude and rule out, as the appellate court
did, the present case from the application of the pronouncement
in the TUMALAD v. VICENCIO CASE (41 SCRA 143) where a
similar, if not identical issue was raised. If a house of strong
materials, like what was involved in the Tumalad case may be
considered as personal property for purposes of executing a
chattel mortgage thereon as long as the parties to the contract so
agree and no innocent third party will be prejudiced thereby, there
is absolutely no reason why a machinery, which is movable in its
nature and becomes immobilized only by destination or purpose,
may not be likewise treated as such. This is really because one
who has so agreed is estopped from denying the existence of the
chattel mortgage.
3. ID.; ID.; ID.; COURT SHOULD NOT MAKE DISTINCTIONS,
WHERE THE LAW DOES NOT. In rejecting petitioner's
assertion on the applicability of the Tumalad doctrine, the Court of
Appeals lays stress on the fact that the house involved therein was
built on a land that did not belong to the owner of such house. But
the law makes no distinction with respect to the ownership of the
land on which the house is built and the Supreme Court should not
lay down distinctions not contemplated by law.
4. ID.; ID.; ID.; CHARACTERIZATION OF PROPERTY,
INDICATIVE OF THE INTENTION OF THE PARTIES. It must
be pointed out that the characterization of the subject machinery
as chattel by the private respondent is indicative of intention and
impresses upon the property the character determined by the
parties. As stated in Standard Oil Co. of New York v. Jaramillo, 44
Phil. 630, it is undeniable that the parties to a contract may by
agreement treat as personal property that which by nature would
be real property, as long as no interest of third parties would be
prejudiced thereby.
5. CIVIL LAW; ESTOPPEL; REPRESENTING OR AGREEING
ON THE CONSTITUTION OF A PROPERTY AS CHATTEL; A
CASE THEREOF. Private respondent contends that estoppel
cannot apply against it because it had never represented nor
agreed that the machinery in suit he considered as personal
property but was merely required and dictated on by herein
petitioner to sign a printed form of chattel mortgage which was in
a blank format the time of signing. This contention lacks
persuasiveness. As aptly pointed out by petitioner and not denied
by the respondent, the status of the subject machine as movable
or immovable was never placed in issue before the lower court and
the Court of Appeals except ins supplemental memorandum in
support of the petition filed in the appellate court.
6. ID.; CONTRACT; TREATING A MACHINERY AS A CHATTEL;
AGREEMENT DEEMED VALID UNLESS ANNULLED OR
VOIDED IN A PROPER ACTION. Moreover, even granting that
the charge is true, such fact alone does not render a contract void
ab initio, but can only be a ground for rendering said contract
voidable or annullable pursuant to Article 1390 of the new Civil
Code, by a proper action in court. There is nothing on record to
show that the mortgage has been annulled. Neither is it disclosed
that steps were taken to nullify the same.
7. ID.; ID.; UNDUE BENEFIT OVER A CONTRACT AT THE
EXPENSE OF ANOTHER NOT COUNTENANCED BY EQUITY.
On the other hand, as pointed out by petitioner and again not
refuted by respondent, the latter has indubitably benefited from
said contract. Equity dictates that one should not benefit at the
expense of another. Private respondent could not now therefore,
he allowed to impugn the efficacy of the chattel mortgage after it
has benefited therefrom.
DECISION
DE CASTRO, J p:
Petition for review on certiorari of the decision of the Court of
Appeals (now Intermediate Appellate Court) promulgation August
27, 1981 in CA-G.R. No. SP-12731, setting aside certain Orders
later specified herein, of Judge Ricardo J. Francisco, as Presiding
Judge of the Court of First Instance of Rizal, Branch VI, issued in
Civil Case No. 36040, as well as the resolution dated September
22, 1981 of the said appellate court, denying petitioner's motion for
reconsideration.
It appears that in order to obtain financial accommodations from
herein petitioner Makati Leasing and Finance Corporation, the
private respondent Wearever Textile Mills, Inc., discounted and
assigned several receivables with the former under a Receivable
Purchase Agreement. To secure the collection of the receivables
assigned, private respondent executed a Chattel Mortgage over
certain raw materials inventory as well as a machinery described
as an Artos Aero Dryer Stentering Range.
Upon private respondent's default, petitioner filed a petition for
extrajudicial foreclosure of the properties mortgage to it. However,
the Deputy Sheriff assigned to implement the foreclosure failed to
gain entry into private respondent's premises and was not able to
effect the seizure of the aforedescribed machinery. Petitioner
thereafter filed a complaint for judicial foreclosure with the Court of
First Instance of Rizal, Branch VI, docketed as Civil Case No.
36040, the case before the lower court. LexLib
Acting on petitioner's application for replevin, the lower court
issued a writ of seizure, the enforcement of which was however
subsequently restrained upon private respondent's filing of a
motion for reconsideration. After several incidents, the lower court
finally issued on February 11, 1981, an order lifting the restraining
order for the enforcement of the writ of seizure and an order to
break open the premises of private respondent to enforce said writ.
The lower court reaffirmed its stand upon private respondent's
filing of a further motion for reconsideration.
On July 13, 1981, the sheriff enforcing the seizure order, repaired
to the premises of private respondent and removed the main drive
motor of the subject machinery.
The Court of Appeals, in certiorari and prohibition proceedings
subsequently filed by herein private respondent, set aside the
Orders of the lower court and ordered the return of the drive motor
seized by the sheriff pursuant to said Orders, after ruling that the
machinery in suit cannot be the subject of replevin, much less of a
chattel mortgage, because it is a real property pursuant to Article
415 of the new Civil Code, the same being attached to the ground
by means of bolts and the only way to remove it from respondent's
plant would be to drill out or destroy the concrete floor, the reason
why all that the sheriff could do to enforce the writ was to take the
main drive motor of said machinery. The appellate court rejected
petitioner's argument that private respondent is estopped from
claiming that the machine is real property by constituting a chattel
mortgage thereon.
A motion for reconsideration of this decision of the Court of
Appeals having been denied, petitioner has brought the case to
this Court for review by writ of certiorari. It is contended by private
respondent, however, that the instant petition was rendered moot
and academic by petitioner's act of returning the subject motor
drive of respondent's machinery after the Court of Appeals'
decision was promulgated.
The contention of private respondent is without merit. When
petitioner returned the subject motor drive, it made itself'
unequivocably clear that said action was without prejudice to a
motion for reconsideration of the Court of Appeals decision, as
shown by the receipt duly signed by respondent's
representative. 1 Considering that petitioner has reserved its right
to question the propriety of the Court of Appeals' decision, the
contention of private respondent that this petition has been mooted
by such return may not be sustained.
The next and the more crucial question to be resolved in this
petition is whether the machinery in suit is real or personal property
from the point of view of the parties, with petitioner arguing that it
is a personalty, while the respondent claiming the contrary, and
was sustained by the appellate court, which accordingly held that
the chattel mortgage constituted thereon is null and void, as
contended by said respondent. LLpr
A similar, if not identical issue was raised in Tumalad v. Vicencio,
41 SCRA 143 where this Court, speaking through Justice J.B.L.
Reyes, ruled:
"Although there is no specific statement referring to the subject
house as personal property, yet by ceding, selling or transferring
a property by way of chattel mortgage defendants-appellants could
only have meant to convey the house as chattel, or at least,
intended to treat the same as such, so that they should not now
be allowed to make an inconsistent stand by claiming otherwise.
Moreover, the subject house stood on a rented lot to which
defendants-appellants merely had a temporary right as lessee,
and although this can not in itself alone determine the status of the
property, it does so when combined with other factors to sustain
the interpretation that the parties, particularly the mortgagors,
intended to treat the house as Personalty. Finally, unlike in the Iya
cases, Lopez vs. Orosa, Jr. & Plaza Theatre, Inc. & Leung Yee vs.
F.L. Strong Machinery & Williamson, wherein third persons
assailed the validity of the chattel mortgage, it is the defendants-
appellants themselves, as debtors mortgagors, who are attacking
the validity of the chattel mortgage in this case. The doctrine of
estoppel therefore applies to the herein defendants appellants,
having treated the subject house as personalty."
Examining the records of the instant case, We find no logical
justification to exclude the rule out, as the appellate court did, the
present case from the application of the abovequoted
pronouncement. If a house of strong materials, like what was
involved in the above Tumalad case, may be considered as
personal property for purposes of executing a chattel mortgage
thereon as long as the parties to the contract so agree and no
innocent third party will be prejudiced thereby, there is absolutely
no reason why a machinery, which is movable in its nature and
becomes immobilized only by destination or purpose, may not be
likewise treated as such. This is really because one who has so
agreed is estopped from denying the existence of the chattel
mortgage.
In rejecting petitioner's assertion on the applicability of the
Tumalad doctrine, the Court of Appeals lays stress on the fact that
the house involved therein was built on a land that did not belong
to the owner of such house. But the law makes no distinction with
respect to the ownership of the land on which the house is built
and We should not lay down distinctions not contemplated by law.
It must be pointed out that the characterization of the subject
machinery as chattel by the private respondent is indicative of
intention and impresses upon the property the character
determined by the parties. As stated in Standard Oil Co. of New
York v. Jaramillo, 44 Phil. 630, it is undeniable that the parties to
a contract may by agreement treat as personal property that which
by nature would be real property, as long as no interest of third
parties would be prejudiced thereby.
Private respondent contends that estoppel cannot apply against it
because it had never represented nor agreed that the machinery
in suit be considered as personal property but was merely required
and dictated on by herein petitioner to sign a printed form of chattel
mortgage which was in a blank form at the time of signing. This
contention lacks persuasiveness. As aptly pointed out by petitioner
and not denied by the respondent, the status of the subject
machinery as movable or immovable was never placed in issue
before the lower court and the Court of Appeals except in a
supplemental memorandum in support of the petition filed in the
appellate court. Moreover, even granting that the charge is true,
such fact alone does not render a contract void ab initio, but can
only be a ground for rendering said contract voidable, or annullable
pursuant to Article 1390 of the new Civil Code, by a proper action
in court. There is nothing on record to show that the mortgage has
been annulled. Neither is it disclosed that steps were taken to
nullify the same. On the other hand, as pointed out by petitioner
and again not refuted by respondent, the latter has indubitably
benefited from said contract. Equity dictates that one should not
benefit at the expense of another. Private respondent could not
now therefore, be allowed to impugn the efficacy of the chattel
mortgage after it has benefited therefrom. LexLib
From what has been said above, the error of the appellate court in
ruling that the questioned machinery is real, not personal property,
becomes very apparent. Moreover, the case of Machinery and
Engineering Supplies, Inc. v. CA, 96 Phil. 70, heavily relied upon
by said court is not applicable to the case at bar, the nature of the
machinery and equipment involved therein as real properties
never having been disputed nor in issue, and they were not the
subject of a Chattel Mortgage. Undoubtedly, the Tumalad case
bears more nearly perfect parity with the instant case to be the
more controlling jurisprudential authority.
WHEREFORE, the questioned decision and resolution of the
Court of Appeals are hereby reversed and set aside, and the
Orders of the lower court are hereby reinstated, with costs against
the private respondent.
SO ORDERED.
||| (Makati Leasing and Finance Corp. v. Wearever Textile Mills,
Inc., G.R. No. L-58469, [May 16, 1983], 207 PHIL 262-269)
Santos Evangelista v. Alto Surety & Insurance Co., Inc. 103 Phil.
401
1. PROPERTY; HOUSE IS NOT PERSONAL BUT REAL
PROPERTY FOR PURPOSES OF ATTACHMENT. A house is
not personal property, much less a debt, credit or other personal
property capable of manual delivery, but immovable property "A
true building (not merely superimposed on the soil), is immovable
or real property, whether it is erected by the owner of the land or
by a usufructuary or lessee" (Laddera vs. Hodges, 48 Off. Gaz.,
5374.) and the attachment of such building is subject to the
provisions of subsection (a) of section 7, Rule 59 of the Rules of
Court.||| (Evangelista v. Alto Surety & Insurance Co., Inc., G.R. No.
L-11139, [April 23, 1958], 103 PHIL 401-409)
Tsai v. Court of Appeals 366 SCRA 324
SECOND DIVISION
[G.R. No. 120098. October 2, 2001.]
RUBY L. TSAI, petitioner, vs. HON. COURT OF APPEALS,
EVER TEXTILE MILLS, INC. and MAMERTO R.
VILLALUZ, respondents.
[G.R. No. 120109. October 2, 2001.]
PHILIPPINE BANK OF COMMUNICATIONS, petitioner, vs.
HON. COURT OF APPEALS, EVER TEXTILE MILLS and
MAMERTO R. VILLALUZ, respondents.
Eduardo C. Ong for R.L. Tsai.
Laogan Silva Baeza & Llantino Law Offices for PBCom.
M.R. Villaluz & Associates for private respondents.
SYNOPSIS
Respondent Ever Textile Mills, Inc. (Evertex) obtained two loans
from petitioner Philippine Bank of Communications (PBCom). As
security for the first loan, Evertex executed a deed of Real and
Chattel Mortgage over the lot where its factory stands, and the
chattels located therein as enumerated in a schedule attached to
the mortgage contract. The second loan was secured by a chattel
mortgage over personal properties enumerated in a list attached
thereto. Due to business reverses, Evertex filed insolvency
proceeding, where it was declared insolvent by the then Court of
First Instance. All its assets were taken into the custody of the
insolvency court, including the collateral, real and personal,
securing the two mortgages. Upon Evertex's failure to meet its
obligation to PBCom, the latter commenced extrajudicial
foreclosure proceedings. PBCom was the highest bidder on the
two public auctions held. PBCom consolidated its ownership over
the lot and all the properties in it. It leased the entire factory
premises to petitioner Ruby L. Tsai, and subsequently sold it to
her, including the contested machineries. Evertex filed a complaint
for annulment of sale, reconveyance, and damages with the
Regional Trial Court against PBCom, alleging that the extrajudicial
foreclosure of subject mortgage was in violation of the Insolvency
Law. Evertex claimed that PBCom, without any legal or factual
basis, appropriated the contested properties, which were not
included in the real and chattel mortgage and neither were those
properties included in the notice of sheriff's sale. The RTC agreed
with Evertex and ruled that the lease and sale of said personal
properties were irregular and illegal. Dissatisfied, both PBCom and
Tsai appealed to the Court of Appeals. The CA affirmed the
judgment appealed from and denied the motion for
reconsideration. PBCom and Tsai filed their separate petitions for
review with the Supreme Court. HITEaS
According to the Supreme Court, while it was true that the
controverted properties appeared to be immobile, a perusal of the
contract executed by the parties herein intended to treat the
subject machinery and equipment as chattels. The Court
previously ruled that an immovable may be considered a personal
property if there is a stipulation as when it is used as security in
the payment of an obligation where a chattel mortgage is executed
over it, as in the case at bar. Accordingly, the Court found no
reversible error in the respondent appellate court's ruling that
inasmuch as the subject mortgages were intended by the parties
to involve chattels, insofar as equipment and machinery were
concerned, the Chattel Mortgage Law applies. The law provides
that a chattel mortgage shall be deemed to cover only the property
described therein and not like or substituted property thereafter
acquired by the mortgagor and placed in the same depository as
the property originally mortgaged, anything in the mortgage to the
contrary notwithstanding. Since the disputed machineries were
acquired in 1981 and could not have been involved in the 1975 or
1979 chattel mortgages, the petitions were denied. The assailed
decision and resolution of the Court of Appeals were affirmed with
modifications. Petitioners Philippine Bank of Communications and
Ruby L. Tsai were ordered to pay jointly and severally Evertex
compensation for the use and possession of the properties in
question until subject personal properties were restored to
respondent Evertex and to pay exemplary damages, attorney's
fees and litigation expenses.
SYLLABUS
1. REMEDIAL LAW; APPEAL; APPEAL FROM COURT OF
APPEALS TO THE SUPREME COURT; LIMITED TO
REVIEWING ONLY ERRORS OF LAW; EXCEPTION. Well
settled is the rule that the jurisdiction of the Supreme Court in a
petition for review on certiorari under Rule 45 of the Revised Rules
of Court is limited to reviewing only errors of law, not of fact, unless
the factual findings complained of are devoid of support by the
evidence on record or the assailed judgment is based on
misapprehension of facts. This rule is applied more stringently
when the findings of fact of the RTC is affirmed by the Court of
Appeals.
2. CIVIL LAW; SALES; PURCHASER IN GOOD FAITH AND FOR
VALUE; DEFINED; NOT PRESENT IN CASE AT BAR. A
purchaser in good faith and for value is one who buys the property
of another without notice that some other person has a right to or
interest in such property and pays a full and fair price for the same,
at the time of purchase, or before he has notice of the claims or
interest of some other person in the property. Records reveal,
however, that when Tsai purchased the controverted properties,
she knew of respondent's claim thereon. As borne out by the
records, she received the letter of respondent's counsel, apprising
her of respondent's claim, dated February 27, 1987. She replied
thereto on March 9, 1987. Despite her knowledge of respondent's
claim, she proceeds to buy the contested units of machinery on
May 3, 1988. Thus, the RTC did not err in finding that she was not
a purchaser in good faith.
3. ID.; LAND REGISTRATION; INDEFEASIBILITY OF TORRENS
TITLE; REFERS TO TITLE OF LAND AND NOT TO THE
PROPERTIES SITUATED THEREIN; CASE AT BAR.
Petitioner Tsai's defense of indefeasibility of Torrens Title of the lot
where the disputed properties are located is equally unavailing.
This defense refers to sale of lands and not to sale of properties
situated therein. Likewise, the mere fact that the lot where the
factory and the disputed properties stand is in PBCom's name
does not automatically make PBCom the owner of everything
found therein, especially in view of EVERTEX's letter to Tsai
enunciating its claim.
4. ID.; PRESCRIPTION AND LACHES; APPLICABLE ONLY
WHERE BY REASON OF LAPSE OF TIME, IT WOULD BE
INEQUITABLE TO ALLOW A PARTY TO ENFORCE HIS LEGAL
RIGHTS; NOT PRESENT IN CASE AT BAR. Petitioner's
defense of prescription and laches is less than convincing. We find
no cogent reason to disturb the consistent findings of both courts
below that the case for the reconveyance of the disputed
properties was filed within the reglementary period. Here, in our
view, the doctrine of laches does not apply. Note that upon
petitioners' adamant refusal to heed EVERTEX's claim,
respondent company immediately filed an action to recover
possession and ownership of the disputed properties. There is no
evidence showing any failure or neglect on its part, for an
unreasonable and unexplained length of time, to do that which, by
exercising due diligence, could or should have been done earlier.
The doctrine of stale demands would apply only where by reason
of the lapse of time, it would be inequitable to allow a party to
enforce his legal rights. Moreover, except for very strong reasons,
this Court is not disposed to apply the doctrine of laches to
prejudice or defeat the rights of an owner.
5. ID.; DAMAGES; ACTUAL DAMAGES; AWARD THEREOF
MUST DEPEND ON COMPETENT PROOF REGARDING THE
ACTUAL AMOUNT OF LOSS. Basic is the rule that to recover
actual damages, the amount of loss must not only be capable of
proof but must actually be proven with reasonable degree of
certainty, premised upon competent proof or best evidence
obtainable of the actual amount thereof. However, the allegations
of respondent company as to the amount of unrealized rentals due
them as actual damages remain mere assertions unsupported by
documents and other competent evidence. In determining actual
damages, the court cannot rely on mere assertions, speculations,
conjectures or guesswork but must depend on competent proof
and on the best evidence obtainable regarding the actual amount
of loss. DaEcTC
6. ID.; ID.; EXEMPLARY DAMAGES; AWARD THEREOF
REQUIRES THAT THE WRONGFUL ACT MUST BE
ACCOMPANIED BY BAD FAITH; PRESENT IN CASE AT BAR.
It is a requisite to award exemplary damages that the wrongful
act must be accompanied by bad faith, and the guilty acted in a
wanton, fraudulent, oppressive, reckless or malevolent manner.
As previously stressed, petitioner Tsai's act of purchasing the
controverted properties despite her knowledge of EVERTEX's
claim was oppressive and subjected the already insolvent
respondent to gross disadvantage. Petitioner PBCom also
received the same letters of Atty. Villaluz, responding thereto on
March 24, 1987. Thus, PBCom's act of taking all the properties
found in the factory of the financially handicapped respondent,
including those properties not covered by or included in the
mortgages, is equally oppressive and tainted with bad faith. Thus,
we are in agreement with the RTC that an award of exemplary
damages is proper.
DECISION
QUISUMBING, J p:
These consolidated cases assail the decision 1 of the Court of
Appeals in CA-G.R. CV No. 32986, affirming the decision 2 of the
Regional Trial Court of Manila, Branch 7, in Civil Case No. 89-
48265. Also assailed is respondent court's resolution denying
petitioners' motion for reconsideration.
On November 26, 1975, respondent Ever Textile Mills, Inc.
(EVERTEX) obtained a three million peso (P3,000,000.00) loan
from petitioner Philippine Bank of Communications (PBCom). As
security for the loan, EVERTEX executed in favor of PBCom, a
deed of Real and Chattel Mortgage over the lot under TCT No.
372097, where its factory stands, and the chattels located therein
as enumerated in a schedule attached to the mortgage contract.
The pertinent portions of the Real and Chattel Mortgage are
quoted below:
MORTGAGE
(REAL AND CHATTEL)
xxx xxx xxx
The MORTGAGOR(S) hereby transfer(s) and convey(s), by way
of First Mortgage, to the MORTGAGEE, . . . certain parcel(s) of
land, together with all the buildings and improvements now
existing or which may hereafter exist thereon, situated in . . . .
"Annex A"
(Real and Chattel Mortgage executed by Ever Textile Mills in favor
of PBCommunications continued)
LIST OF MACHINERIES & EQUIPMENT
A. Forty Eight (48) units of Vayrow Knitting Machines-Tompkins
made in Hongkong:
Serial Numbers Size of Machines
xxx xxx xxx
B. Sixteen (16) sets of Vayrow Knitting Machines made in Taiwan.
xxx xxx xxx
C. Two (2) Circular Knitting Machines made in West Germany.
xxx xxx xxx
D. Four (4) Winding Machines.
xxx xxx xxx
SCHEDULE "A"
I. TCT # 372097 - RIZAL
xxx xxx xxx
II. Any and all buildings and improvements now existing or
hereafter to exist on the above-mentioned lot.
III. MACHINERIES & EQUIPMENT situated, located and/or
installed on the above-mentioned lot located at . . .
(a) Forty eight sets (48) Vayrow Knitting Machines . . .
(b) Sixteen sets (16) Vayrow Knitting Machines . . .
(c) Two (2) Circular Knitting Machines . . .
(d) Two (2) Winding Machines . . .
(e) Two (2) Winding Machines . . .
IV. Any and all replacements, substitutions, additions, increases
and accretions to above properties.
xxx xxx xxx 3
On April 23, 1979, PBCom granted a second loan of
P3,356,000.00 to EVERTEX. The loan was secured by a Chattel
Mortgage over personal properties enumerated in a list attached
thereto. These listed properties were similar to those listed
in Annex A of the first mortgage deed.
After April 23, 1979, the date of the execution of the second
mortgage mentioned above, EVERTEX purchased various
machines and equipments.
On November 19, 1982, due to business reverses, EVERTEX filed
insolvency proceedings docketed as SP Proc. No. LP-3091-P
before the defunct Court of First Instance of Pasay City, Branch
XXVIII. The CFI issued an order on November 24, 1982 declaring
the corporation insolvent. All its assets were taken into the custody
of the Insolvency Court, including the collateral, real and personal,
securing the two mortgages as abovementioned.
In the meantime, upon EVERTEX's failure to meet its obligation to
PBCom, the latter commenced extrajudicial foreclosure
proceedings against EVERTEX under Act 3135, otherwise known
as "An Act to Regulate the Sale of Property under Special Powers
Inserted in or Annexed to Real Estate Mortgages" and Act 1506 or
"The Chattel Mortgage Law." A Notice of Sheriff's Sale was issued
on December 1, 1982.
On December 15, 1982, the first public auction was held where
petitioner PBCom emerged as the highest bidder and a Certificate
of Sale was issued in its favor on the same date. On December
23, 1982, another public auction was held and again, PBCom was
the highest bidder. The sheriff issued a Certificate of Sale on the
same day.
On March 7, 1984, PBCom consolidated its ownership over the lot
and all the properties in it. In November 1986, it leased the entire
factory premises to petitioner Ruby L. Tsai for P50,000.00 a
month. On May 3, 1988, PBCom sold the factory, lock, stock and
barrel to Tsai for P9,000,000.00, including the contested
machineries. EHITaS
On March 16, 1989, EVERTEX filed a complaint for annulment of
sale, reconveyance, and damages with the Regional Trial Court
against PBCom, alleging inter alia that the extrajudicial
foreclosure of subject mortgage was in violation of the Insolvency
Law. EVERTEX claimed that no rights having been transmitted to
PBCom over the assets of insolvent EVERTEX, therefore Tsai
acquired no rights over such assets sold to her, and should
reconvey the assets.
Further, EVERTEX averred that PBCom, without any legal or
factual basis, appropriated the contested properties, which were
not included in the Real and Chattel Mortgage of November 26,
1975 nor in the Chattel Mortgage of April 23, 1979, and neither
were those properties included in the Notice of Sheriff's Sale dated
December 1, 1982 and Certificate of Sale dated December 15,
1982.
The disputed properties, which were valued at P4,000,000.00, are:
14 Interlock Circular Knitting Machines, 1 Jet Drying Equipment, 1
Dryer Equipment, 1 Raisin Equipment and 1 Heatset Equipment.
The RTC found that the lease and sale of said personal properties
were irregular and illegal because they were not duly foreclosed
nor sold at the December 15, 1982 auction sale since these were
not included in the schedules attached to the mortgage contracts.
The trial court decreed:
WHEREFORE, judgment is hereby rendered in favor of plaintiff
corporation and against the defendants:
1. Ordering the annulment of the sale executed by defendant
Philippine Bank of Communications in favor of defendant Ruby L.
Tsai on May 3, 1988 insofar as it affects the personal properties
listed in par. 9 of the complaint, and their return to the plaintiff
corporation through its assignee, plaintiff Mamerto R. Villaluz, for
disposition by the Insolvency Court, to be done within ten (10) days
from finality of this decision;
2. Ordering the defendants to pay jointly and severally the plaintiff
corporation the sum of P5,200,000.00 as compensation for the use
and possession of the properties in question from November 1986
to February 1991 and P100,000.00 every month thereafter, with
interest thereon at the legal rate per annum until full payment;
3. Ordering the defendants to pay jointly and severally the plaintiff
corporation the sum of P50,000.00 as and for attorney's fees and
expenses of litigation;
4. Ordering the defendants to pay jointly and severally the plaintiff
corporation the sum of P200,000.00 by way of exemplary
damages;
5. Ordering the dismissal of the counterclaim of the defendants;
and
6. Ordering the defendants to proportionately pay the costs of suit.
SO ORDERED. 4
Dissatisfied, both PBCom and Tsai appealed to the Court of
Appeals, which issued its decision dated August 31, 1994, the
dispositive portion of which reads:
WHEREFORE, except for the deletion therefrom of the award for
exemplary damages, and reduction of the actual damages, from
P100,000.00 to P20,000.00 per month, from November 1986 until
subject personal properties are restored to appellees, the
judgment appealed from is hereby AFFIRMED, in all other
respects. No pronouncement as to costs. 5
Motion for reconsideration of the above decision having been
denied in the resolution of April 28, 1995, PBCom and Tsai filed
their separate petitions for review with this Court.
In G.R. No. 120098, petitioner Tsai ascribed the following errors to
the respondent court:
I affirming the lower court's judgment decreeing that the pieces of
THE HONORABLE COURT OF APPEALS (SECOND DIVISION)
ERRED IN EFFECT MAKING A CONTRACT FOR THE PARTIES
BY TREATING THE 1981 ACQUIRED MACHINERIES AS
CHATTELS INSTEAD OF REAL PROPERTIES WITHIN THEIR
EARLIER 1975 DEED OF REAL AND CHATTEL MORTGAGE OR
1979 DEED OF CHATTEL MORTGAGE.
II
THE HONORABLE COURT OF APPEALS (SECOND DIVISION)
ERRED IN HOLDING THAT THE DISPUTED 1981
MACHINERIES ARE NOT REAL PROPERTIES DEEMED PART
OF THE MORTGAGE DESPITE THE CLEAR IMPORT OF
THE EVIDENCE AND APPLICABLE RULINGS OF THE
SUPREME COURT.
III
THE HONORABLE COURT OF APPEALS (SECOND DIVISION)
ERRED IN DEEMING PETITIONER A PURCHASER IN BAD
FAITH.
IV
THE HONORABLE COURT OF APPEALS (SECOND DIVISION)
ERRED IN ASSESSING PETITIONER ACTUAL DAMAGES,
ATTORNEY'S FEES AND EXPENSES OF LITIGATION FOR
WANT OF VALID FACTUAL AND LEGAL BASIS.
V The following are the facts as found by the RTC and affirmed by
THE HONORABLE COURT OF APPEALS (SECOND DIVISION)
ERRED IN HOLDING AGAINST PETITIONER'S ARGUMENTS
ON PRESCRIPTION AND LACHES. 6
In G.R. No. 120109, PBCom raised the following issues:
I.
DID THE COURT OF APPEALS VALIDLY DECREE THE
MACHINERIES LISTED UNDER PARAGRAPH 9 OF THE
COMPLAINT BELOW AS PERSONAL PROPERTY OUTSIDE OF
THE 1975 DEED OF REAL ESTATE MORTGAGE AND
EXCLUDED THEM FROM THE REAL PROPERTY
EXTRAJUDICIALLY FORECLOSED BY PBCOM DESPITE THE
PROVISION IN THE 1975 DEED THAT ALL AFTER-ACQUIRED
PROPERTIES DURING THE LIFETIME OF THE MORTGAGE
SHALL FORM PART THEREOF, AND DESPITE THE
UNDISPUTED FACT THAT SAID MACHINERIES ARE BIG AND
HEAVY, BOLTED OR CEMENTED ON THE REAL PROPERTY
MORTGAGED BY EVER TEXTILE MILLS TO PBCOM, AND
WERE ASSESSED FOR REAL ESTATE TAX PURPOSES?
II.
CAN PBCOM, WHO TOOK POSSESSION OF THE
MACHINERIES IN QUESTION IN GOOD FAITH, EXTENDED
CREDIT FACILITIES TO EVER TEXTILE MILLS WHICH AS OF
1982 TOTALLED P9,547,095.28, WHO HAD SPENT FOR
MAINTENANCE AND SECURITY ON THE DISPUTED
MACHINERIES AND HAD TO PAY ALL THE BACK TAXES OF
EVER TEXTILE MILLS BE LEGALLY COMPELLED TO RETURN
TO EVER THE SAID MACHINERIES OR IN LIEU THEREOF BE
ASSESSED DAMAGES. IS THAT SITUATION TANTAMOUNT
TO A CASE OF UNJUST ENRICHMENT? 7
The principal issue, in our view, is whether or not the inclusion of
the questioned properties in the foreclosed properties is proper.
The secondary issue is whether or not the sale of these properties
to petitioner Ruby Tsai is valid.
For her part, Tsai avers that the Court of Appeals in effect made a
contract for the parties by treating the 1981 acquired units of
machinery as chattels instead of real properties within their earlier
1975 deed of Real and Chattel Mortgage or 1979 deed of Chattel
Mortgage. 8 Additionally, Tsai argues that respondent court erred
in holding that the disputed 1981 machineries are not real
properties. 9 Finally, she contends that the Court of Appeals erred
in holding against petitioner's arguments on prescription and
laches 10 and in assessing petitioner actual damages, attorney's
fees and expenses of litigation, for want of valid factual and legal
basis. 11 TaCSAD
Essentially, PBCom contends that respondent court erred in
machinery in dispute were not duly foreclosed and could not be
legally leased nor sold to Ruby Tsai. It further argued that the Court
of Appeals' pronouncement that the pieces of machinery in
question were personal properties have no factual and legal basis.
Finally, it asserts that the Court of Appeals erred in assessing
damages and attorney's fees against PBCom.
In opposition, private respondents argue that the controverted
units of machinery are not "real properties" but chattels, and,
therefore, they were not part of the foreclosed real properties,
rendering the lease and the subsequent sale thereof to Tsai a
nullity. 12
Considering the assigned errors and the arguments of the parties,
we find the petitions devoid of merit and ought to be denied.
Well-settled is the rule that the jurisdiction of the Supreme Court in
a petition for review on certiorari under Rule 45 of the Revised
Rules of Court is limited to reviewing only errors of law, not of fact,
unless the factual findings complained of are devoid of support by
the evidence on record or the assailed judgment is based on
misapprehension of facts. 13 This rule is applied more stringently
when the findings of fact of the RTC is affirmed by the Court of
Appeals. 14
the Court of Appeals that are decisive of the issues: (1) the
"controverted machineries" are not covered by, or included in,
either of the two mortgages, the Real Estate and Chattel
Mortgage, and the pure Chattel Mortgage; (2) the said machineries
were not included in the list of properties appended to the Notice
of Sale, and neither were they included in the Sheriff's Notice of
Sale of the foreclosed properties. 15
Petitioners contend that the nature of the disputed
machineries, i.e., that they were heavy, bolted or cemented on the
real property mortgaged by EVERTEX to PBCom, make them ipso
facto immovable under Article 415 (3) and (5) of the New Civil
Code. This assertion, however, does not settle the issue. Mere
nuts and bolts do not foreclose the controversy. We have to look
at the parties' intent.
While it is true that the controverted properties appear to be
immobile, a perusal of the contract of Real and Chattel Mortgage
executed by the parties herein gives us a contrary indication. In
the case at bar, both the trial and the appellate courts reached the
same finding that the true intention of PBCOM and the owner,
EVERTEX, is to treat machinery and equipment as chattels. The
pertinent portion of respondent appellate court's ruling is quoted
below:
As stressed upon by appellees, appellant bank treated the
machineries as chattels; never as real properties. Indeed, the 1975
mortgage contract, which was actually real and chattel mortgage,
militates against appellants' posture. It should be noted that the
printed form used by appellant bank was mainly for real estate
mortgages. But reflective of the true intention of appellant PBCOM
and appellee EVERTEX was the typing in capital letters,
immediately following the printed caption of mortgage, of the
phrase "real and chattel." So also, the "machineries and
equipment" in the printed form of the bank had to be inserted in
the blank space of the printed contract and connected with the
word "building" by typewritten slash marks. Now, then, if the
machineries in question were contemplated to be included in the
real estate mortgage, there would have been no necessity to ink a
chattel mortgage specifically mentioning as part III of Schedule A
a listing of the machineries covered thereby. It would have sufficed
to list them as immovables in the Deed of Real Estate Mortgage of
the land and building involved.
As regards the 1979 contract, the intention of the parties is clear
and beyond question. It refers solely to chattels. The inventory list
of the mortgaged properties is an itemization of sixty-three (63)
individually described machineries while the schedule listed only
machines and 2,996,880.50 worth of finished cotton fabrics and
natural cotton fabrics. 16
In the absence of any showing that this conclusion is baseless,
erroneous or uncorroborated by the evidence on record, we find
no compelling reason to depart therefrom.
Too, assuming arguendo that the properties in question are
immovable by nature, nothing detracts the parties from treating it
as chattels to secure an obligation under the principle of estoppel.
As far back as Navarro v. Pineda, 9 SCRA 631 (1963), an
immovable may be considered a personal property if there is a
stipulation as when it is used as security in the payment of an
obligation where a chattel mortgage is executed over it, as in the
case at bar.
In the instant case, the parties herein: (1) executed a contract
styled as "Real Estate Mortgage and Chattel Mortgage," instead
of just "Real Estate Mortgage" if indeed their intention is to treat all
properties included therein as immovable, and (2) attached to the
said contract a separate "LIST OF MACHINERIES &
EQUIPMENT." These facts, taken together, evince the conclusion
that the parties' intention is to treat these units of machinery as
chattels. A fortiori, the contested after-acquired properties, which
are of the same description as the units enumerated under the title
"LIST OF MACHINERIES & EQUIPMENT," must also be treated
as chattels.
Accordingly, we find no reversible error in the respondent
appellate court's ruling that inasmuch as the subject mortgages
were intended by the parties to involve chattels, insofar as
equipment and machinery were concerned, the Chattel Mortgage
Law applies, which provides in Section 7 thereof that: "a chattel
mortgage shall be deemed to cover only the property described
therein and not like or substituted property thereafter acquired by
the mortgagor and placed in the same depository as the property
originally mortgaged, anything in the mortgage to the contrary
notwithstanding."
And, since the disputed machineries were acquired in 1981 and
could not have been involved in the 1975 or 1979 chattel
mortgages, it was consequently an error on the part of the Sheriff
to include subject machineries with the properties enumerated in
said chattel mortgages.
As the auction sale of the subject properties to PBCom is void, no
valid title passed in its favor. Consequently, the sale thereof to Tsai
is also a nullity under the elementary principle of nemo dat quod
non habet, one cannot give what one does not have. 17
Petitioner Tsai also argued that assuming that PBCom's title over
the contested properties is a nullity, she is nevertheless a
purchaser in good faith and for value who now has a better right
than EVERTEX.
To the contrary, however, are the factual findings and conclusions
of the trial court that she is not a purchaser in good faith. Well-
settled is the rule that the person who asserts the status of a
purchaser in good faith and for value has the burden of proving
such assertion. 18 Petitioner Tsai failed to discharge this burden
persuasively.
Moreover, a purchaser in good faith and for value is one who buys
the property of another without notice that some other person has
a right to or interest in such property and pays a full and fair price
for the same, at the time of purchase, or before he has notice of
the claims or interest of some other person in the
property. 19 Records reveal, however, that when Tsai purchased
the controverted properties, she knew of respondent's claim
thereon. As borne out by the records, she received the letter of
respondent's counsel, apprising her of respondent's claim, dated
February 27, 1987. 20 She replied thereto on March 9,
1987. 21 Despite her knowledge of respondent's claim, she
proceeded to buy the contested units of machinery on May 3,
1988. Thus, the RTC did not err in finding that she was not a
purchaser in good faith.
Petitioner Tsai's defense of indefeasibility of Torrens Title of the lot
where the disputed properties are located is equally unavailing.
This defense refers to sale of lands and not to sale of properties
situated therein. Likewise, the mere fact that the lot where the
factory and the disputed properties stand is in PBCom's name
does not automatically make PBCom the owner of everything
found therein, especially in view of EVERTEX's letter to Tsai
enunciating its claim.
Finally, petitioners' defense of prescription and laches is less than
convincing. We find no cogent reason to disturb the consistent
findings of both courts below that the case for the reconveyance
of the disputed properties was filed within the reglementary period.
Here, in our view, the doctrine of laches does not apply. Note that
upon petitioners' adamant refusal to heed EVERTEX's claim,
respondent company immediately filed an action to recover
possession and ownership of the disputed properties. There is no
evidence showing any failure or neglect on its part, for an
unreasonable and unexplained length of time, to do that which, by
exercising due diligence, could or should have been done earlier.
The doctrine of stale demands would apply only where by reason
of the lapse of time, it would be inequitable to allow a party to
enforce his legal rights. Moreover, except for very strong reasons,
this Court is not disposed to apply the doctrine of laches to
prejudice or defeat the rights of an owner. 22
As to the award of damages, the contested damages are the
actual compensation, representing rentals for the contested units
of machinery, the exemplary damages, and attorney's fees.
As regards said actual compensation, the RTC awarded
P100,000.00 corresponding to the unpaid rentals of the contested
properties based on the testimony of John Chua, who testified that
the P100,000.00 was based on the accepted practice in banking
and finance, business and investments that the rental price must
take into account the cost of money used to buy them. The Court
of Appeals did not give full credence to Chua's projection and
reduced the award to P20,000.00. TDEASC
Basic is the rule that to recover actual damages, the amount of
loss must not only be capable of proof but must actually be proven
with reasonable degree of certainty, premised upon competent
proof or best evidence obtainable of the actual amount
thereof. 23 However, the allegations of respondent company as to
the amount of unrealized rentals due them as actual damages
remain mere assertions unsupported by documents and other
competent evidence. In determining actual damages, the court
cannot rely on mere assertions, speculations, conjectures or
guesswork but must depend on competent proof and on the best
evidence obtainable regarding the actual amount of
loss. 24 However, we are not prepared to disregard the following
dispositions of the respondent appellate court:
. . . In the award of actual damages under scrutiny, there is nothing
on record warranting the said award of P5,200,000.00,
representing monthly rental income of P100,000.00 from
November 1986 to February 1991, and the additional award of
P100,000.00 per month thereafter.
As pointed out by appellants, the testimonial evidence, consisting
of the testimonies of Jonh (sic) Chua and Mamerto Villaluz, is shy
of what is necessary to substantiate the actual damages allegedly
sustained by appellees, by way of unrealized rental income of
subject machineries and equipments.
The testimony of John Cua (sic) is nothing but an opinion or
projection based on what is claimed to be a practice in business
and industry. But such a testimony cannot serve as the sole basis
for assessing the actual damages complained of. What is more,
there is no showing that had appellant Tsai not taken possession
of the machineries and equipments in question, somebody was
willing and ready to rent the same for P100,000.00 a month.
xxx xxx xxx
Then, too, even assuming arguendo that the said machineries and
equipments could have generated a rental income of P30,000.00
a month, as projected by witness Mamerto Villaluz, the same
would have been a gross income. Therefrom should be deducted
or removed, expenses for maintenance and repairs. . . . Therefore,
in the determination of the actual damages or unrealized rental
income sued upon, there is a good basis to calculate that at least
four months in a year, the machineries in dispute would have been
idle due to absence of a lessee or while being repaired. In the light
of the foregoing rationalization and computation, We believe that
a net unrealized rental income of P20,000.00 a month, since
November 1986, is more realistic and fair. 25
As to exemplary damages, the RTC awarded P200,000.00 to
EVERTEX which the Court of Appeals deleted. But according to
the CA, there was no clear showing that petitioners acted
malevolently, wantonly and oppressively. The evidence, however,
shows otherwise.
It is a requisite to award exemplary damages that the wrongful act
must be accompanied by bad faith, 26 and the guilty acted in a
wanton, fraudulent, oppressive, reckless or malevolent
manner. 27 As previously stressed, petitioner Tsai's act of
purchasing the controverted properties despite her knowledge of
EVERTEX's claim was oppressive and subjected the already
insolvent respondent to gross disadvantage. Petitioner PBCom
also received the same letters of Atty. Villaluz, responding thereto
on March 24, 1987. 28 Thus, PBCom's act of taking all the
properties found in the factory of the financially handicapped
respondent, including those properties not covered by or included
in the mortgages, is equally oppressive and tainted with bad faith.
Thus, we are in agreement with the RTC that an award of
exemplary damages is proper.
The amount of P200,000.00 for exemplary damages is, however,
excessive. Article 2216 of the Civil Code provides that no proof of
pecuniary loss is necessary for the adjudication of exemplary
damages, their assessment being left to the discretion of the court
in accordance with the circumstances of each case. 29 While the
imposition of exemplary damages is justified in this case, equity
calls for its reduction. In Inhelder Corporation v. Court of Appeals,
G.R. No. L-52358, 122 SCRA 576, 585, (May 30, 1983), we laid
down the rule that judicial discretion granted to the courts in the
assessment of damages must always be exercised with balanced
restraint and measured objectivity. Thus, here the award of
exemplary damages by way of example for the public good should
be reduced to P100,000.00.
By the same token, attorney's fees and other expenses of litigation
may be recovered when exemplary damages are awarded. 30 In
our view, RTC's award of P50,000.00 as attorney's fees and
expenses of litigation is reasonable, given the circumstances in
these cases.
WHEREFORE, the petitions are DENIED. The assailed decision
and resolution of the Court of Appeals in CA-G.R. CV No. 32986
are AFFIRMED WITH MODIFICATIONS. Petitioners Philippine
Bank of Communications and Ruby L. Tsai are hereby ordered to
pay jointly and severally Ever Textile Mills, Inc. the following: (1)
P20,000.00 per month, as compensation for the use and
possession of the properties in question from November
1986 31 until subject personal properties are restored to
respondent corporation; (2) P100,000.00 by way of exemplary
damages, and (3) P50,000.00 as attorney's fees and litigation
expenses. Costs against petitioners.
SO ORDERED.
||| (Tsai v. Court of Appeals, G.R. No. 120098, 120109, [October
2, 2001], 418 PHIL 606-624)
Sergs Products, Inc. v. PCI Leasing and Finance, Inc. 338 SCRA
499
SYNOPSIS
On February 13, 1998, respondent PCI Leasing and Finance Inc.
filed with the RTC of Quezon City a complaint for sum of money,
with an application for a writ of replevin. On March 6, 1998,
respondent judge issued a writ of replevin directing its sheriff to
seize and deliver the machineries and equipment to PCI Leasing
after 5 days and upon payment of the necessary expenses. The
sheriff proceeded to petitioner's factory and seized one machinery.
On March 25, 1998, petitioner filed a motion for special protective
order invoking the power of the court to control the conduct of its
officers and amend and control its processes, praying for a
directive for the sheriff to defer enforcement of the writ of replevin.
The motion was opposed by PCI on the ground that the properties
were personal and therefore still subject to seizure and writ of
replevin. In their reply, petitioners asserted that the properties
were immovable. They further stated that PCI was estopped from
treating these machineries as personal because the contracts
were totally sham and farcical. On April 7, 1998, petitioners went
to the Court of Appeals via an original action for certiorari. The
Court of Appeals ruled that the subject machines were personal
property as provided by the agreement of the parties. Hence, this
petition. TaCEHA
The Court found the petition not meritorious. The Court ruled that
the contracting parties may validly stipulate that a real property be
considered as personal. After agreeing to such stipulation, they
are consequently estopped from claiming otherwise. Under the
principle of estoppel, a party to a contract is ordinarily precluded
from denying the truth of any material fact found therein. In the
present case, the lease agreement clearly provides that the
machines in question are to be considered as personal properties.
Clearly then, petitioners were estopped from denying the
characterization of the subject machines as personal property.
Under the circumstances, they are proper subject of the writ of
seizure. Accordingly, the petition was denied and the assailed
decision of the Court of Appeals was affirmed.
SYLLABUS
1. CIVIL LAW; CONTRACTS; CONTRACTING PARTIES MAY
VALIDLY STIPULATE THAT REAL PROPERTY BE
CONSIDERED AS PERSONAL. The Court has held that
contracting parties may validly stipulate that a real property be
considered as personal. After agreeing to such stipulation, they
are consequently estopped from claiming otherwise. Under the
principle of estoppel, a party to a contract is ordinarily precluded
from denying the truth of any material fact found therein. Hence,
in Tumalad v. Vicencio, the Court upheld the intention of the
parties to treat a house as a personal property because it had
been made the subject of a chattel mortgage. The Court ruled: ". .
. . Although there is no specific statement referring to the subject
house as personal property, yet by ceding, selling or transferring
a property by way of chattel mortgage defendants-appellants could
only have meant to convey the house as chattel, or at least,
intended to treat the same as such, so that they should not now
be allowed to make an inconsistent stand by claiming otherwise."
Applying Tumalad, the Court in Makati Leasing and Finance Corp.
v. Wearever Textile Mills also held that the machinery used in a
factory and essential to the industry, as in the present case, was a
proper subject of a writ of replevin because it was treated as
personal property in a contract. Cca
||| (Serg's Products, Inc. v. PCI Leasing and Finance, Inc., G.R.
No. 137705, [August 22, 2000], 393 PHIL 158-171)
Burgos, Sr. v. Chief of Staff, AFP 133 SCRA 800
5. CIVIL LAW; PROPERTY; MACHINERIES INTENDED FOR AN
INDUSTRY WHICH MAY BE CARRIED ON IN A BUILDING
WHEN PLACED BY A TENANT REMAIN MOVABLE PROPERTY
SUSCEPTIBLE TO SEIZURE; CASE AT BAR. Under Article
415 [5] of the Civil Code of the Philippines, "machinery,
receptacles. instruments or implements intended by the owner of
the tenement for an industry or works which may be carried on in
a building or on a piece of land and which tend directly to meet the
needs of the said industry or works" are considered immovable
property . In Davao Sawmill Co. vs. Castillo (61 Phil. 709) where
this legal provision was invoked, this Court ruled that machinery
which is movable by nature becomes immobilized when placed by
the owner of the tenement, property or plant, but not so when
placed by a tenant, usufructuary, or any other person having only
a temporary right, unless such person acted as the agent of the
owner. In the case at bar, petitioners do not claim to be the owners
of the land and/or building on which the machineries were placed.
This being the case, the machineries in question, while in fact
bolted to the ground remain movable property susceptible to
seizure under a search warrant.||| (Burgos, Sr. v. Chief of Staff,
G.R. No. 64261, [December 26, 1984], 218 PHIL 754-773)
Lopez v. Orosa, Jr., and Plaza Theater, Inc. 103 Phil. 98
ID.; ID.; ID.; BUILDING AS IMMOVABLE PROPERTY;
IRRESPECTIVE OF OWNERSHIP OF LAND AND BUILDING.
A building is an immovable property irrespective of whether or not
said structure and the land on which it is adhered to belong to the
same owner.||| (Lopez v. Orosa, G.R. Nos. L-10817-18, [February
28, 1958], 103 PHIL 98-106)
Yap v. Tanada 163 SCRA 464
FIRST DIVISION
[G.R. No. L-32917. July 18, 1988.]
JULIAN S. YAP, petitioner, vs. HON. SANTIAGO O. TAADA,
etc., and GOULDS PUMPS INTERNATIONAL (PHIL.),
INC., respondents.
Paterno P. Natinga, for private respondent.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; MOTION FOR
RECONSIDERATION BASED ON GROUNDS FOR NEW TRIAL;
MOTION SHOULD HAVE AFFIDAVIT OF MERITS; REASON
FOR REQUIREMENT Since petitioner himself asserts that his
motion for reconsideration is grounded on Section 1 (a) of Rule 37,
i.e., fraud, accident, mistake or excusable negligence which
ordinary prudence could not have guarded against and by reason
of which . . . (the) aggrieved party has probably been impaired in
his rights" this being in any event clear from a perusal of the
motion which theorizes that he had "been impaired in his rights"
because he was denied the right to present evidence of his
defenses (discrepancy as to price and breach of warranty) it
was a fatal omission to fail to attach to his motion an affidavit of
merits, i.e., an affidavit "showing the facts (not conclusions)
constituting the valid . . . defense which the movant may prove in
case a new trial is granted." The requirement of such an affidavit
is essential because obviously "a new trial would be a waste of the
court's time if the complaint turns out to be groundless or the
defense ineffective."
2. ID.; ID.; ID.; ID.; PERIOD OF APPEAL NOT INTERRUPTED IF
MOTION IS WITHOUT REQUIRED AFFIDAVIT OF MERITS
Where the motion for reconsideration grounded on Section 1(a) of
Rule 37 is not accompanied by the required affidavit of merits, it
does not interrupt the running of the period of appeal. In the case
at bar, the time during which the motion was pending before the
court--from September 16, 1969 when it was filed with the
respondent court until October 14, 1969 when notice of the order
denying the motion was received by the movant--could not be
deducted from the 30-day period of appeal. This is clear from a
consideration of Section 3 of Rule 41 which in part declares that,
"[T]he time during which a motion to set aside the judgment or
order or for a new trial has been pending shall be deducted, unless
such motion fails to satisfy the requirements of Rule 37."
3. ID.; ID.; ID.; ID.; ID.; JUDGMENT BECOMES FINAL AND
EXECUTORY UPON EXPIRATION OF PERIOD OF APPEAL
AND EXECUTION SHOULD ISSUE AS A MATTER OF RIGHT
As the period of appeal was not interrupted by the motion for
reconsideration for lack of the requisite affidavit of merits, such
period expired thirty days after receipt of the notice of judgment on
September 1, 1969, or on October 1, 1969, without an appeal
being taken by Yap. The judgment then became final and
executory; Yap could no longer take an appeal therefrom or from
any other subsequent orders; and execution of judgment correctly
issued on October 15, 1969, "as a matter of right."
4. ID.; ID.; MOTION FOR POSTPONEMENT; POSSIBILITY OF
SECURING COMPROMISE AS GROUND THEREFOR;
MOVANT MUST SHOW SINCERITY OF DESIRE TO
NEGOTIATE; BONA FIDES ABSENT IN CASE AT BAR
The bona fides of petitioner's desire to compromise is however put
in doubt by the attendant circumstances. It was manifested in an
eleventh-hour motion for postponement of the pre-trial which
had been scheduled with intransferable character since it had
already been earlier postponed at Yap's instance; it had never
been mentioned at any prior time since commencement of the
litigation; such a possible compromise (at least in general or
preliminary terms) was certainly most appropriate for
consideration at the pre-trial; in fact Yap was aware that the matter
was indeed a proper subject of a pre-trial agenda, yet he sought
to avoid appearance at said pre-trial which he knew to be
intransferable in character. These considerations and the dilatory
tactics thus far attributable to him seeking postponements of
hearings, or failing to appear therefor despite notice, not only in
the Court of First Instance but also in the City Court proscribe
belief in the sincerity of his avowed desire to negotiate a
compromise.
5. ID.; JUDGMENTS; RENDITION OF JUDGMENTS;
JUDGMENT IS NOT VAGUE IF MATTER NOT FIXED IN
DECISION IS DETERMINABLE FROM THE OPINION It is true
that the decision does not fix the starting time of the computation
of interest on the judgment debt, but this is inconsequential since
that time is easily determinable from the opinion, i.e., from the day
the buyer (Yap) defaulted in the payment of his obligation, on May
31, 1968.
6. ID.; ID.; ID.; ABSENCE OF DISPOSITION ON
COUNTERCLAIM DOES NOT RENDER JUDGMENT
INCOMPLETE IF DEFENDANT HAS BEEN VALIDLY
DECLARED IN DEFAULT Where the defendant fails to appear
at the pre-trial without justification and despite notice, which
caused the declaration of his default, the absence of any
disposition in the judgment regarding his counterclaim does not
render the judgment incomplete The failure to appear despite
notice was a waiver of his right to prove the averments of his
answer, inclusive of the counterclaim therein pleaded. Moreover,
the conclusion in the judgment of the merit of the plaintiff's cause
of action was necessarily and at the same time a determination of
the absence of merit of the defendant's claim of untenability of the
complaint and of malicious prosecution.
7. CIVIL LAW; PROPERTY; IMMOVABLE PROPERTY; WATER
PUMP INSTALLED IN RESIDENCE BUT REMOVABLE
WITHOUT DETERIORATION, NOT IMMOVABLE PROPERTY
The Civil Code considers as immovable property, among others,
anything "attached to an immovable in a fixed manner, in such a
way that it cannot be separated therefrom without breaking the
material or deterioration of the object." The pump does not fit this
description. It could be, and was in fact separated from Yap's
premises without being broken or suffering deterioration.
Obviously the separation or removal of the pump involved nothing
more complicated than the loosening of bolts or dismantling of
other fasteners.
8. ID.; DAMAGES; LOSS RESULTING FROM LEGITIMATE ACT
OF ENFORCING EXECUTORY JUDGMENT; NOT
RECOVERABLE AS DAMAGES As to the loss of his water
supply, since this arose from acts legitimately done, the seizure on
execution of the water pump in enforcement of a final and
executory judgment, Yap most certainly is not entitled to claim
moral or any other form of damages therefor.
DECISION
NARVASA, J p:
The petition for review on certiorari at bar involves two (2) Orders
of respondent Judge Taada 1 in Civil Case No. 10984. The first,
dated September 16, 1970, denied petitioner Yap's motion to set
aside execution sale and to quash alias writ of execution. The
second, dated November 21, 1970, denied Yap's motion for
reconsideration. The issues concerned the propriety of execution
of a judgment claimed to be "incomplete, vague and non-final,"
and the denial of petitioner's application to prove and recover
damages resulting from alleged irregularities in the process of
execution.
The antecedents will take some time in the telling. The case began
in the City Court of Cebu with the filing by Goulds Pumps
International (Phil.), Inc. of a complaint 2 against Yap and his
wife, 3 seeking recovery of P1,459.30 representing the balance of
the price and installation cost of a water pump in the latter's
premises. 4 The case resulted in a judgment by the City Court on
November 25, 1968, reading as follows:
"When this case was called for trial today, Atty. Paterno Natinga
appeared for the plaintiff (Goulds) and informed the court that he
is ready for trial. However, none of the defendants appeared
despite notices having been served upon them.
"Upon petition of Atty. Natinga, the plaintiff is hereby allowed to
present its evidence ex-parte.
"After considering the evidence of the plaintiff, the court hereby
renders judgment in favor of the plaintiff and against the defendant
(Yap), ordering the latter to pay to the former the sum of P1,459.30
with interest at the rate of 12% per annum until fully paid,
computed from August 12, 1968, date of the filing of the complaint;
to pay the sum of P364.80 as reasonable attorney's fees, which is
equivalent to 25% of the unpaid principal obligation; and to pay the
costs, if any."
Yap appealed to the Court of First Instance. The appeal was
assigned to the sala of respondent Judge Taada. For failure to
appear for pre-trial on August 28, 1968, this setting being
intransferable since the pre-trial had already been once postponed
at his instance, 5 Yap was declared in default by Order of Judge
Taada dated August 28, 1969, 6 reading as follows:
"When this case was called for pre-trial this morning, the plaintiff
and counsel appeared, but neither the defendants nor his counsel
appeared despite the fact that they were duly notified of the pre-
trial set this morning. Instead he filed an Ex-Parte Motion for
Postponement which this Court received only this morning, and on
petition of counsel for the plaintiff that the Ex-Parte Motion for
Postponement was not filed in accordance with the Rules of Court
he asked that the same be denied and the defendants be declared
in default; . . . the motion for the plaintiff being well-grounded, the
defendants are hereby declared in default and the Branch Clerk of
Court . . . is hereby authorized to receive evidence for the plaintiff
and . . . submit his report within ten (10) days after reception of
evidence."
Goulds presented evidence ex parte; and judgment by default was
rendered the following day by Judge Taada requiring Yap to pay
to Goulds (1) P1,459.30 representing the unpaid balance of the
pump purchased by him; (2) interest of 12% per annum thereon
until fully paid; and (3) a sum equivalent to 25% of the amount due
as attorney's fees and costs and other expenses in prosecuting
the action. Notice of the judgment was served on Yap on
September 1, 1969. 7
On September 16, 1969 Yap filed a motion for
reconsideration. 8 In it he insisted that his motion for
postponement should have been granted since it expressed his
desire to explore the possibility of an amicable settlement; that the
court should give the parties time to arrive at an amicable
settlement failing which, he should be allowed to present evidence
in support of his defenses (discrepancy as to the price and breach
of warranty). The motion was not verified or accompanied by any
separate affidavit. Goulds opposed the motion. Its
opposition 9 drew attention to the eleventh-hour motion for
postponement of Yap which had resulted in the cancellation of the
prior hearing of June 30, 1969 despite Goulds' vehement
objection, and the re-setting thereof on August 28, 1969 with
intransferable character; it averred that Yap had again sought
postponement of this last hearing by another eleventh-hour motion
on the plea that an amicable settlement would be explored, yet he
had never up to that time ever broached the matter, 10 and that
this pattern of seeking to obtain last-minute postponements was
discernible also in the proceedings before the City Court. In its
opposition, Goulds also adverted to the examination made by it of
the pump, on instructions of the City Court, with a view to
remedying the defects claimed to exist by Yap; but the
examination had disclosed the pump's perfect condition. Yap's
motion for reconsideration was denied by Order dated October 10,
1969, notice of which was received by Yap on October 4, 1969. 11
On October 15, 1969 Judge Taada issued an Order granting
Goulds' Motion for Issuance of Writ of Execution dated October
14, 1969, declaring the reasons therein alleged to be
meritorious. 12 Yap forthwith filed an "Urgent Motion for
Reconsideration of Order" dated October 17, 1969, 13 contending
that the judgment had not yet become final, since contrary to
Goulds' view, his motion for reconsideration was not pro forma for
lack of an affidavit of merit, this not being required under Section
1(a) of Rule 37 of the Rules of Court upon which his motion was
grounded. Goulds presented an opposition dated October 22,
1969. 14 It pointed out that in his motion for reconsideration Yap
had claimed to have a valid defense to the action, i.e., ". . .
discrepancy as to price and breach of seller's warranty," in effect,
that there was fraud on Goulds' part; Yap's motion for
reconsideration should therefore have been supported by an
affidavit of merit respecting said defenses; the absence thereof
rendered the motion for reconsideration fatally defective with the
result that its filing did not interrupt the running of the period of
appeal. The opposition also drew attention to the failure of the
motion for reconsideration to specify the findings or conclusions in
the judgment claimed to be contrary to law or not supported by the
evidence, making it a pro forma motion also incapable of stopping
the running of the appeal period. On October 23, 1969, Judge
Taada denied Yap's motion for reconsideration and authorized
execution of the judgment. 15 Yap sought reconsideration of this
order, by another motion dated October 29, 1969. 16 This motion
was denied by Order dated January 26, 1970. 17 Again Yap
moved for reconsideration, and again was rebuffed, by Order
dated April 28, 1970. 18
In the meantime the Sheriff levied on the water pump in
question, 19 and by notice dated November 4, 1969, scheduled
the execution sale there of on November 14, 1969. 20 But in view
of the pendency of Yap's motion for reconsideration of October 28,
1969, suspension of the sale was directed by Judge Taada in an
order dated November 6, 1969. 21
"Counsel for the plaintiff is hereby given 10 days time to answer
the Motion, dated October 29, 1969, from receipt of this Order and
in the meantime, the Order of October 23, 1969, insofar as it orders
the sheriff to enforce the writ of execution is hereby suspended."
It appears however that a copy of this Order was not transmitted
to the Sheriff "through oversight, inadvertence and pressure of
work" of the Branch Clerk of Court. 22 So the Deputy Provincial
Sheriff went ahead with the scheduled auction sale and sold the
property levied on to Goulds as the highest bidder. 23 He later
submitted the requisite report to the Court dated November 17,
1969, 24 as well as the "Sheriffs Return of Service" dated
February 13, 1970, 25 in both of which it was stated that execution
had been "partially satisfied." It should be observed that up to this
time, February, 1970, Yap had not bestirred himself to take an
appeal from the judgment of August 29, 1969.
On May 9, 1970 Judge Taada ordered the issuance of
an alias writ of execution on Goulds' ex parte motion
therefor. 26 Yap received notice of the Order on June 11. Twelve
(12) days later, he filed a "Motion to Set Aside Execution Sale and
to Quash Alias Writ of Execution." 27 As regards
the original partial execution of the judgment, he argued that
1) "the issuance of the writ of execution on October 16, 1969 was
contrary to law, the judgment sought to be executed not being final
and executory;" and
2) "the sale was made without the notice required by Sec. 18, Rule
39, of the New Rules of Court," i.e., notice by publication in case
of execution sale of real property, the pump and its accessories
being immovable because attached to the ground with character
of permanency (Art. 415, Civil Code).
And with respect to the alias writ, he argued that it should not have
issued because
1) "the judgment sought to be executed is null and void" as "it
deprived the defendant of his day in court" and "of due process;"
2) "said judgment is incomplete and vague" because there is no
starting point for computation of the interest imposed, or a
specification of the "other expenses incurred in prosecuting this
case" which Yap had also been ordered to pay;
3) "said judgment is defective" because it contains no statement
of facts but a mere recital of the evidence; and
4) "there has been a change in the situation of the parties which
makes execution unjust and inequitable" because Yap suffered
damages by reason of the illegal execution.
Goulds filed an opposition on July 6, 1970. Yap's motion was
thereafter denied by Order dated September 16, 1970. Judge
Taada pointed out that the motion had "become moot and
academic" since the decision of August 29, 1969, "received by the
defendant on September 1, 1969 had long become final when the
Order for the Issuance of a Writ of Execution was promulgated on
October 15, 1969." His Honor also stressed that
"The defendant's Motion for Reconsideration of the Court's
decision was in reality one for new trial Regarded as motion for
new trial it should allege the grounds for new trial, provided for in
the Rules of Court, to be supported by affidavit of merits; and this
the defendant failed to do. If the defendant sincerely desired for an
opportunity to submit to an amicable settlement, which he failed to
do extra-judicially despite the ample time before him, he should
have appeared in the pre-trial to achieve the same purpose."
Judge Taada thereafter promulgated another Order dated
September 21, 1970 granting a motion of Goulds for completion of
execution of the judgment of August 29, 1969 to be undertaken by
the City Sheriff of Cebu. Once more, Yap sought reconsideration.
He submitted a "Motion for Reconsideration of Two Orders" dated
October 13, 1970, 28 seeking the setting aside not only of this
Order of September 21, 1970 but also that dated September 16,
1970, denying his motion to set aside execution dated June 23,
1970. He contended that the Order of September 21, 1970
(authorizing execution by the City Sheriff) was premature, since
the 30-day period to appeal from the earlier order of September
16, 1970 (denying his motion to set aside) had not yet expired. He
also reiterated his view that his motion for reconsideration dated
September 15, 1969 did not require that it be accompanied by an
affidavit of merits. This last motion was also denied for "lack of
merits," by Order dated November 21, 1970. 29
On December 3, 1970, Yap filed a "Notice of Appeal" manifesting
his intention to appeal to the Supreme Court on certiorari only on
questions of law, "from the Order . . . of September 16, 1970 . . .
and from the Order . . . of November 21, 1970, . . . pursuant to
sections 2 and 3 of Republic Act No. 5440." He filed his petition for
review with this Court on January 5, 1971, after obtaining an
extension therefor. 30
The errors of law he attributes to the Court a quo are the
following: 31
1) refusing to invalidate the execution pursuant to its Order of
October 16, 1969 although the judgment had not then become
final and executory and despite its being incomplete and vague;
2) ignoring the fact that the execution sale was carried out
although it (the Court) had itself ordered suspension of execution
on November 6, 1969;
3) declining to annul the execution sale of the pump and
accessories subject of the action although made without the
requisite notice prescribed for the sale of immovables; and
4) refusing to allow the petitioner to prove irregularities in the
process of execution which had resulted in damages to him.
Notice of the Trial Court's judgment was served on Yap on
September 1, 1969. His motion for reconsideration thereof was
filed 15 days thereafter, on September 16, 1969. Notice of the
Order denying the motion was received by him on October 14,
1969. The question is whether or not the motion for
reconsideration which was not verified, or accompanied by an
affidavit of merits (setting forth facts constituting his meritorious
defenses to the suit) or other sworn statement (stating facts
excusing his failure to appear at the pre-trial) waspro forma and
consequently had not interrupted the running of the period of
appeal. It is Yap's contention that his motion was not pro forma for
lack of an affidavit of merits, such a document not being required
by Section 1 (a) of Rule 37 of the Rules of Court upon which his
motion was based. This is incorrect.
Section 2, Rule 37 precisely requires that when the motion for new
trial is founded on Section 1 (a), it should be accompanied by an
affidavit of merit.
xxx xxx xxx
"When the motion is made for the causes mentioned in
subdivisions (a) and (b) of the preceding section, it shall be proved
in the manner provided for proof of motions. Affidavit or affidavits
of merits shall also be attached to a motion for the cause
mentioned in subdivision (a) which may be rebutted by counter-
affidavits.
xxx xxx xxx" 32
Since Yap himself asserts that his motion for reconsideration is
grounded on Section 1 (a) of Rule 37, 33 i.e., fraud, accident,
mistake or excusable negligence which ordinary prudence could
not have guarded against and by reason of which . . . (the)
aggrieved party has probably been impaired in his rights" this
being in any event clear from a perusal of the motion which
theorizes that he had "been impaired in his rights" because he was
denied the right to present evidence of his defenses (discrepancy
as to price and breach of warranty) it was a fatal omission to fail
to attach to his motion an affidavit of merits, i.e., an affidavit
"showing the facts (not conclusions) constituting the valid . . .
defense which the movant may prove in case a new trial is
granted." 34 The requirement of such an affidavit is essential
because obviously "a new trial would be a waste of the court's time
if the complaint turns out to be groundless or the defense
ineffective." 35

In his motion for reconsideration, Yap also contended that since
he had expressed a desire to explore the possibility of an amicable
settlement, the Court should have given him time to do so, instead
of declaring him in default and thereafter rendering judgment by
default on Goulds' ex parte evidence.
The bona fides of this desire to compromise is however put in
doubt by the attendant circumstances. It was manifested in an
eleventh-hour motion for postponement of the pre-trial which
had been scheduled with intransferable character since it had
already been earlier postponed at Yap's instance; it had never
been mentioned at any prior time since commencement of the
litigation; such a possible compromise (at least in general or
preliminary terms) was certainly most appropriate for
consideration at the pre-trial; in fact Yap was aware that the matter
was indeed a proper subject of a pre-trial agenda, yet he sought
to avoid appearance at said pre-trial which he knew to be
intransferable in character. These considerations and the dilatory
tactics thus far attributable to him seeking postponements of
hearings, or failing to appear therefor despite notice, not only in
the Court of First Instance but also in the City Court proscribe
belief in the sincerity of his avowed desire to negotiate a
compromise. Moreover, the disregard by Yap of the general
requirement that "(n)otice of a motion shall be served by the
applicant to all parties concerned at least three (3) days before the
hearing thereof, together with a copy of the motion, and of any
affidavits and other papers accompanying it," 36 for which no
justification whatever has been offered, also militates against
the bona fides of Yap's expressed wish for an amicable
settlement. The relevant circumstances do not therefore justify
condemnation, as a grave abuse of discretion, or a serious
mistake, of the refusal of the Trial Judge to grant postponement
upon this proferred ground.
The motion for reconsideration did not therefore interrupt the
running of the period of appeal. The time during which it was
pending before the court from September 16, 1969 when it was
filed with the respondent Court until October 14, 1969 when notice
of the order denying the motion was received by the movant
could not be deducted from the 30-day period of appeal. 37 This
is the inescapable conclusion from a consideration of Section 3 of
Rule 41 which in part declares that, "The time during which a
motion to set aside the judgment or order or for a new trial has
been pending shall be deducted, unless such motion fails to satisfy
the requirements of Rule 37," 38
Notice of the judgment having been received by Yap on
September 1, 1969, and the period of appeal therefrom not having
been interrupted by his motion for reconsideration filed on
September 16, 1969, the reglementary period of appeal expired
thirty (30) days after September 1, 1969, or on October 1, 1969,
without an appeal being taken by Yap. The judgment then became
final and executory; Yap could no longer take an appeal therefrom
or from any other subsequent orders; and execution of judgment
correctly issued on October 15, 1969, "as a matter of right." 39
The next point discussed by Yap, that the judgment is incomplete
and vague, is not well taken. It is true that the decision does not fix
the starting time of the computation of interest on the judgment
debt, but this is inconsequential since that time is easily
determinable from the opinion, i.e., from the day the buyer (Yap)
defaulted in the payment of his obligation, 40 on May 31,
1968. 41 The absence of any disposition regarding his
counterclaim is also immaterial and does not render the judgment
incomplete. Yap's failure to appear at the pre-trial without
justification and despite notice, which caused the declaration of his
default, was a waiver of his right to controvert the plaintiff's proofs
and of his right to prove the averments of his answer, inclusive of
the counterclaim therein pleaded. Moreover, the conclusion in the
judgment of the merit of the plaintiff's cause of action was
necessarily and at the same time a determination of the absence
of merit of the defendant's claim of untenability of the complaint
and of malicious prosecution.
Yap's next argument that the water pump had become immovable
property by its being installed in his residence is also
untenable. The Civil Code considers as immovable property,
among others, anything "attached to an immovable in a fixed
manner, in such a way that it cannot be separated therefrom
without breaking the material or deterioration of the
object." 42 The pump does not fit this description. It could be, and
was in fact separated from Yap's premises without being broken
or suffering deterioration. Obviously the separation or removal of
the pump involved nothing more complicated than the loosening
of bolts or dismantling of other fasteners.
Yap's last claim is that in the process of the removal of the pump
from his house, Goulds' men had trampled on the plants growing
there, destroyed the shed over the pump, plugged the exterior
casings with rags and cut the electrical and conduit pipes; that he
had thereby suffered actual damages in an amount of not less than
P2,000.00, as well as moral damages in the sum of P10,000.00
resulting from his deprivation of the use of his water supply; but
the Court had refused to allow him to prove these acts and recover
the damages rightfully due him. Now, as to the loss of his water
supply, since this arose from acts legitimately done, the seizure on
execution of the water pump in enforcement of a final and
executory judgment, Yap most certainly is not entitled to claim
moral or any other form of damages therefor.
WHEREFORE, the petition is DENIED and the appeal
DISMISSED, and the Orders of September 16, 1970 and
November 21, 1970 subject thereof, AFFIRMED in toto. Costs
against petitioner.
||| (Yap v. Taada, G.R. No. L-32917, [July 18, 1988], 246 PHIL
475-489)
Machinery & Engineering Supplies, Inc. v. Court of Appeals 96
Phil. 70
4. ID.; MACHINERY AND EQUIPMENT, WHEN IMMOVABLE.
The machinery and equipment in question appeared to be
attached to the land, particularly to the concrete foundation of a
building, in a fixed manner, in such a way that the former could not
be separated from the latter without breaking the material or
deterioration of the object. Hence, in order to remove said outfit, it
became necessary not only to unbolt the same, but to also cut
some of its wooden supports. Said machinery and equipment were
"intended by the owner of the tenement for an industry" carried on
said immovable and tended "directly to meet the needs of said
industry." For these reasons, they were already immovable
pursuant to paragraph 3 and 5 of Article 415 of Civil Code of the
Philippines.||| (Machinery & Engineering Supplies, Inc. v. Court of
Appeals, G.R. No. L-7057, [October 29, 1954], 96 PHIL 70-77)
D.Property in Relation to Whom it Belongs (Arts. 419-425)
1. Property of Public Dominion
2. Property of Private Ownership
CASES:
Laurel v. Garcia 187 SCRA 797
EN BANC
[G.R. No. 92013. July 25, 1990.]
SALVADOR H. LAUREL, petitioner, vs. RAMON GARCIA, as
head of the Asset Privatization Trust, RAUL MANGLAPUS, as
Secretary of Foreign Affairs, and CATALINO MACARAIG, as
Executive Secretary, respondents.
[G.R. No. 92047. July 25, 1990.]
DIONISIO S. OJEDA, petitioner, vs. EXECUTIVE SECRETARY
MACARAIG, JR., ASSETS PRIVATIZATION TRUST
CHAIRMAN RAMON T. GARCIA, AMBASSADOR RAMON DEL
ROSARIO, et al., as members of the PRINCIPAL AND BIDDING
COMMITTEES ON THE UTILIZATION/DISPOSITION OF
PHILIPPINE GOVERNMENT PROPERTIES IN
JAPAN, respondents.
Arturo M. Tolentino for petitioner in 92013.
DECISION
GUTIERREZ, JR., J p:
These are two petitions for prohibition seeking to enjoin
respondents, their representatives and agents from proceeding
with the bidding for the sale of the 3,179 square meters of land at
306 Ropponggi, 5-Chome Minato-ku, Tokyo, Japan scheduled on
February 21, 1990. We granted the prayer for a temporary
restraining order effective February 20, 1990. One of the
petitioners (in G.R. No. 92047) likewise prayer for a writ of
mandamus to compel the respondents to fully disclose to the
public the basis of their decision to push through with the sale of
the Roppongi property inspite of strong public opposition and to
explain the proceedings which effectively prevent the participation
of Filipino citizens and entities in the bidding process.
The oral arguments in G.R. No. 92013, Laurel v. Garcia, et
al. were heard by the Court on March 13, 1990. After G.R. No.
92047, Ojeda v. Secretary Macaraig, et al. was filed, the
respondents were required to file a comment by the Court's
resolution dated February 22, 1990. The two petitions were
consolidated on March 27, 1990 when the memoranda of the
parties in the Laurel case were deliberated upon.
The Court could not act on these cases immediately because the
respondents filed a motion for an extension of thirty (30) days to
file comment in G.R. No. 92047, followed by a second motion for
an extension of another thirty (30) days which we granted on May
8, 1990, a third motion for extension of time granted on May 24,
1990 and a fourth motion for extension of time which we granted
on June 5, 1990 but calling the attention of the respondents to the
length of time the petitions have been pending. After the comment
was filed, the petitioner in G.R. No. 92047 asked for thirty (30) days
to file a reply. We noted his motion and resolved to decide the two
(2) cases. LexLib
I Amidst opposition by various sectors, the Executive branch of the
The subject property in this case is one of the four (4) properties
in Japan acquired by the Philippine government under the
Reparations Agreement entered into with Japan on May 9, 1956,
the other lots being:
(1) The Nampeidai Property at 11-24 Nampeidai-machi, Shibuya-
ku, Tokyo which has an area of approximately 2,489.96 square
meters, and is at present the site of the Philippine Embassy
Chancery;
(2) The Kobe Commercial Property at 63 Naniwa-cho, Kobe, with
an area of around 764.72 square meters and categorized as a
commercial lot now being used as a warehouse and parking lot for
the consulate staff; and
(3) The Kobe Residential Property at 1-980-2 Obanoyamacho,
Shinohara, Nada-ku, Kobe, a residential lot which is now vacant.
The properties and the capital goods and services procured from
the Japanese government for national development projects are
part of the indemnification to the Filipino people for their losses in
life and property and their suffering during World War II.
The Reparations Agreement provides that reparations valued at
$550 million would be payable in twenty (20) years in accordance
with annual schedules of procurements to be fixed by the
Philippine and Japanese governments (Article 2, Reparations
Agreement). Rep. Act. No. 1789, the Reparations Law, prescribes
the national policy on procurement and utilization of reparations
and development loans. The procurements are divided into those
for use by the government sector and those for private parties in
projects as the then National Economic Council shall determine.
Those intended for the private sector shall be made available by
sale to Filipino citizens or to one hundred (100%) percent Filipino-
owned entities in national development projects.
The Roppongi property was acquired from the Japanese
government under the Second Year Schedule and listed under the
heading "Government Sector", through Reparations Contract No.
300 dated June 27, 1958. The Roponggi property consists of the
land and building "for the Chancery of the Philippine Embassy"
(Annex M-D to Memorandum for Petitioner, p. 503). As intended,
it became the site of the Philippine Embassy until the latter was
transferred to Nampeidai on July 22, 1976 when the Roppongi
building needed major repairs. Due to the failure of our
government to provide necessary funds, the Roppongi property
has remained undeveloped since that time.
A proposal was presented to President Corazon C. Aquino by
former Philippine Ambassador to Japan, Carlos J. Valdez, to make
the property the subject of a lease agreement with a Japanese
firm Kajima Corporation which shall construct two (2)
buildings in Roppongi and one (1) building in Nampeidai and
renovate the present Philippine Chancery in Nampeidai. The
consideration of the construction would be the lease to the foreign
corporation of one (1) of the buildings to be constructed in
Roppongi and the two (2) buildings in Nampeidai. The other
building in Roppongi shall then be used as the Philippine Embassy
Chancery. At the end of the lease period, all the three leased
buildings shall be occupied and used by the Philippine
government. No change of ownership or title shall occur. (See
Annex "B" to Reply to Comment) The Philippine government
retains the title all throughout the lease period and thereafter.
However, the government has not acted favorably on this proposal
which is pending approval and ratification between the parties.
Indeed, on August 11, 1986, President Aquino created a
committee to study the disposition/utilization of Philippine
government properties in Tokyo and Kobe, Japan
through Administrative Order No. 3, followed by Administrative
Orders Numbered 3-A, B, C and D.
On July 25, 1987, the President issued Executive Order No. 296
entitling non-Filipino citizens or entities to avail of reparations'
capital goods and services in the event of sale, lease or
disposition. The four properties in Japan including the Roppongi
were specifically mentioned in the first "Whereas" clause.
government has been pushing, with great vigor, its decision to sell
the reparations properties starting with the Roppongi lot. The
property has twice been set for bidding at a minimum floor price at
$225 million. The first bidding was a failure since only one bidder
qualified. The second one, after postponements, has not yet
materialized. The last scheduled bidding on February 21, 1990
was restrained by his Court. Later, the rules on bidding were
changed such that the $225 million floor price became merely a
suggested floor price. cdrep
The Court finds that each of the herein petitions raises distinct
issues. The petitioner in G.R. No. 92013 objects to the alienation
of the Roppongi property to anyone while the petitioner in G.R. No.
92047 adds as a principal objection the alleged unjustified bias of
the Philippine government in favor of selling the property to non-
Filipino citizens and entities. These petitions have been
consolidated and are resolved at the same time for the objective
is the same to stop the sale of the Roppongi property.
The petitioner in G.R. No. 92013 raises the following issues:
(1) Can the Roppongi property and others of its kind be alienated
by the Philippine Government?; and
(2) Does the Chief Executive, her officers and agents, have the
authority and jurisdiction, to sell the Roppongi property?
Petitioner Dionisio Ojeda in G.R. NO. 92047, apart from
questioning the authority of the government to alienate the
Roppongi property assails the constitutionality of Executive Order
No. 296 in making the property available for the sale to non-Filipino
citizens and entities. He also questions the bidding procedures of
the Committee on the Utilization or Disposition of Philippine
Government Properties in Japan for being discriminatory against
Filipino citizens and Filipino-owned entities by denying them the
right to be informed about the bidding requirements.
II
In G.R. No. 92013, petitioner Laurel asserts that the Roppongi
property and the related lots were acquired as part of the
reparations from the Japanese government for diplomatic and
consular use by the Philippine government. Vice-President Laurel
states that the Roppongi property is classified as one of public
dominion, and not of private ownership under Article 420 of the
Civil Code (See infra).
The petitioner submits that the Roppongi property comes under
"property intended for public service" in paragraph 2 of the above
provision. He states that being one of public dominion, no
ownership by any one can attach to it, not even by the State. The
Roppongi and related properties were acquired for "sites for
chancery, diplomatic, and consular quarters, buildings and other
improvements" (Second Year Reparations Schedule). The
petitioner states that they continue to be intended for a necessary
service. They are held by the State in anticipation of an opportune
use. (Citing 3 Manresa 65-66). Hence, it cannot be appropriated,
is outside the commerce of man, or to put it in more simple terms,
it cannot be alienated nor be the subject matter of contracts
(Citing Municipality of Cavite v. Rojas, 30 Phil. 20 [1915]). Noting
the non-use of the Roppongi property at the moment, the petitioner
avers that the same remains property of public dominion so long
as the government has not used it for other purposes nor adopted
any measure constituting a removal of its original purpose or use.
The respondents, for their part, refute the petitioner's contention
by saying that the subject property is not governed by our Civil
Code but by the laws of Japan where the property is located. They
rely upon the rule of lex situs which is used in determining the
applicable law regarding the acquisition, transfer and devolution of
the title to a property. They also invoke Opinion No. 21, Series of
1988, dated January 27, 1988 of the Secretary of Justice which
used the lex situs in explaining the inapplicability of Philippine law
regarding a property situated in Japan.
The respondents add that even assuming for the sake of argument
that the Civil Code is applicable, the Roppongi property has
ceased to become property of public dominion. It has become
patrimonial property because it has not been used for public
service or for diplomatic purposes for over thirteen (13) years now
(Citing Article 422, Civil Code) and because the intention by the
Executive Department and the Congress to convert it to private
use has been manifested by overt acts, such as, among others;
(1) the transfer of the Philippine Embassy to Nampeidai; (2) the
issuance of administrative orders for the possibility of alienating
the four government properties in Japan; (3) the issuance of
Executive Order No. 296; (4) the enactment by the Congress
of Rep. Act No. 6657 [the Comprehensive Agrarian Reform Law]
on June 10, 1988 which contains a provision stating that funds
may be taken from the sale of Philippine properties in foreign
countries; (5) the holding of the public bidding of the Roppongi
property but which failed; (6) the deferment by the Senate in
Resolution No. 55 of the bidding to a future date; thus an
acknowledgment by the Senate of the government's intention to
remove the Roppongi property from the public service purpose;
and (7) the resolution of this Court dismissing the petition in Ojeda
v. Bidding Committee, et al., G.R. No. 87478 which sought to
enjoin the second bidding of the Roppongi property scheduled on
March 30, 1989.
III
In G.R. No. 94047, petitioner Ojeda once more asks this Court to
rule on the constitutionality of Executive Order No. 296. He had
earlier filed a petition in G.R. No. 87478 which the Court dismissed
on August 1, 1989. He now avers that the executive order
contravenes the constitutional mandate to conserve and develop
the national patrimony stated in the Preamble of the 1987
Constitution. It also allegedly violates:
(1) The reservation of the ownership and acquisition of alienable
lands of the public domain to Filipino citizens. (Sections 2 and 3,
Article XII, Constitution; Section 22 and 23 of Commonwealth Act
141).
(2) The preference for Filipino citizens in the grant of rights,
privileges and concessions covering the national economy and
patrimony (Section 10, Article VI, Constitution);
(3) The protection given to Filipino enterprises against unfair
competition and trade practices;
(4) The guarantee of the right of the people to information on all
matters of public concern (Section 7, Article III, Constitution);
(5) The prohibition against the sale to non-Filipino citizens or
entities not wholly owned by Filipino citizens of capital goods
received by the Philippines under the Reparations Act (Sections 2
and 12 of Rep. Act No. 1789); and
(6) The declaration of the state policy of full public disclosure of all
transactions involving public interest (Sections 28, Article
II, Constitution).
Petitioner Ojeda warns that the use of public funds in the execution
of an unconstitutional executive order is a misapplication of public
funds. He states that since the details of the bidding for the
Roppongi property were never publicly disclosed until February
15, 1990 (or a few days before the scheduled bidding), the bidding
guidelines are available only in Tokyo, and the accomplishment of
requirements and the selection of qualified bidders should be done
in Tokyo, interested Filipino citizens or entities owned by them did
not have the chance to comply with Purchase Offer Requirements
on the Roppongi. Worse, the Roppongi shall be sold for a
minimum price of $225 million from which price capital gains tax
under Japanese law of about 50 to 70% of the floor price would
still be deducted. cdll
IV
The petitioners and respondents in both cases do not dispute the
fact that the Roppongi site and the three related properties were
acquired through reparations agreements, that these were
assigned to the government sector and that the Roppongi property
itself was specifically designated under the Reparations
Agreement to house the Philippine Embassy.
The nature of the Roppongi lot as property for public service is
expressly spelled out. It is dictated by the terms of the Reparations
Agreement and the corresponding contract of procurement which
bind both the Philippine government and the Japanese
government.
There can be no doubt that it is of public dominion unless it is
convincingly shown that the property has become patrimonial.
This, the respondents have failed to do.
As property of public dominion, the Roppongi lot is outside the
commerce of man. It cannot be alienated. Its ownership is a
special collective ownership for general use and enjoyment, an
application to the satisfaction of collective needs, and resides in
the social group. The purpose is not to serve the State as a juridical
person, but the citizens; it is intended for the common and public
welfare and cannot be the object of appropriation. (Taken from 3
Manresa, 66-69; cited in Tolentino, Commentaries on the Civil
Code of the Philippines, 1963 Edition, Vol. II, p. 26).
The applicable provisions of the Civil Code are:
"ART. 419. Property is either of public dominion or of private
ownership.
"ART. 420. The following things are property of public dominion:
"(1) Those intended for public use, such as roads, canals, rivers,
torrents, ports and bridges constructed by the State, banks,
shores, roadsteads, and others of similar character;
(2) Those which belong to the State, without being for public use,
and are intended for some public service or for the development
of the national wealth.
"ART. 421. All other property of the State, which is not of the
character stated in the preceding article, is patrimonial property."
The Roppongi property is correctly classified under paragraph 2 of
Article 420 of the Civil Code as property belonging to the State and
intended for some public service.
Has the intention of the government regarding the use of the
property been changed because the lot has been idle for some
years? Has it become patrimonial?
The fact that the Roppongi site has not been used for a long time
for actual Embassy service does not automatically convert it to
patrimonial property. Any such conversion happens only if the
property is withdrawn from public use (Cebu Oxygen and
Acetylene Co. v. Bercilles, 66 SCRA 481 [1975]). A property
continues to be part of the public domain, not available for private
appropriation or ownership "until there is a formal declaration on
the part of the government to withdraw it from being such (Ignacio
v. Director of Lands, 108 Phil. 335 [1960]).
The respondents enumerate various pronouncements by
concerned public officials insinuating a change of intention. We
emphasize, however, that an abandonment of the intention to use
the Roppongi property for public service and to make it patrimonial
property under Article 422 of the Civil Code must be definite.
Abandonment cannot be inferred from the non-use alone specially
if the non-use was attributable not to the government's own
deliberate and indubitable will but to a lack of financial support to
repair and improve the property (See Heirs of Felino Santiago v.
Lazarao, 166 SCRA 368 [1988]). Abandonment must be a certain
and positive act based on correct legal premises. LexLib
A mere transfer of the Philippine Embassy to Nampeidai in 1976
is not relinquishment of the Roppongi property's original purpose.
Even the failure by the government to repair the building in
Roppongi is not abandonment since as earlier stated, there simply
was a shortage of government funds. The recent Administrative
Orders authorizing a study of the status and conditions of
government properties in Japan were merely directives for
investigation but did not in any way signify a clear intention to
dispose of the properties.
Executive Order No. 296, though its title declares an "authority to
sell", does not have a provision in this text expressly authorizing
the sale of the four properties procured from Japan for the
government sector. The executive order does not declare that the
properties lost their public character. It merely intends to make the
properties available to foreigners and not to Filipinos alone in case
of a sale, lease or other disposition. It merely eliminates the
restriction under Rep. Act. 1789 that reparations goods may be
sold only to Filipino citizens and one hundred (100%) percent
Filipino-owned entities. The text of Executive Order No. 296
provides:
"Section 1. The provisions of Republic Act No. 1789, as amended,
and of other laws to the contrary notwithstanding, the
abovementioned properties can be made available for sale, lease
or any other manner of disposition to non-Filipino citizens or to
entities owned by non-Filipino citizens."
Executive Order No. 296 is based on the wrong premise or
assumption that the Roppongi and the three other properties were
earlier converted into alienable real properties. As earlier
stated, Rep. Act No. 1789 differentiates the procurements for the
government sector and the private sector (Sections 2 and 12, Rep.
Act No. 1789). Only the private sector properties can be sold to
end-users who must be Filipinos or entities owned by Filipinos. It
is this nationality provision which was amended by Executive
Order No. 296.
Section 63 (c) of Rep. Act No. 6657 (the CARP Law) which
provides as one of the sources of funds for its implementation, the
proceeds of the disposition of the properties of the Government in
foreign countries, did not withdraw the Roppongi property from
being classified as one of public dominion when it mentions
Philippine properties abroad. Section 63 (c) refers to properties
which are alienable and not to those reserved for public use or
service. Rep Act No. 6657, therefore, does not authorize the
Executive Department to sell the Roppongi property. It merely
enumerates possible sources of future funding to augment (as and
when needed) the Agrarian Reform Fund created under Executive
Order No. 299. Obviously any property outside of the commerce
of man cannot be tapped as a source of funds.
The respondents try to get around the public dominion character
of the Roppongi property by insisting that Japanese law and not
our Civil Code should apply.
It is exceedingly strange why our top government officials, of all
people, should be the ones to insist that in the sale of extremely
valuable government property, Japanese law and not Philippine
law should prevail. The Japanese law its coverage and effects,
when enacted, and exceptions to its provisions is not presented
to the Court. It is simply asserted that the lex loci rei sitae or
Japanese law should apply without stating what that law provides.
It is assumed on faith that Japanese law would allow the sale.
We see no reason why a conflict of law rule should apply when no
conflict of law situation exists. A conflict of law situation arises only
when: (1) There is a dispute over the title or ownership of an
immovable, such that the capacity to take and transfer
immovables, the formalities of conveyance, the essential validity
and effect of the transfer, or the interpretation and effect of a
conveyance, are to be determined (See Salonga, Private
International Law, 1981 ed., pp. 377-383); and (2) A foreign law on
land ownership and its conveyance is asserted to conflict with a
domestic law on the same matters. Hence, the need to determine
which law should apply.
In the instant case, none of the above elements exists.
The issues are not concerned with validity of ownership or title.
There is no question that the property belongs to the Philippines.
The issue is the authority of the respondent officials to validly
dispose of property belonging to the State. And the validity of the
procedures adopted to effect its sale. This is governed by
Philippine Law. The rule of lex situsdoes not apply.
The assertion that the opinion of the Secretary of Justice sheds
light on the relevance of the lex situs rule is misplaced. The
opinion does not tackle the alienability of the real properties
procured through reparations nor the existence in what body of the
authority to sell them. In discussing who are capable of
acquiring the lots, the Secretary merely explains that it is the
foreign law which should determine who can acquire the
properties so that the constitutional limitation on acquisition of
lands of the public domain to Filipino citizens and entities wholly
owned by Filipinos is inapplicable. We see no point in belaboring
whether or not this opinion is correct. Why should we discuss who
can acquire the Roppongi lot when there is no showing that it can
be sold?
The subsequent approval on October 4, 1988 by President Aquino
of the recommendation by the investigating committee to sell the
Roppongi property was premature or, at the very least, conditioned
on a valid change in the public character of the Roppongi property.
Moreover, the approval does not have the force and effect of law
since the President already lost her legislative powers. The
Congress had already convened for more than a year.
Assuming for the sale of argument, however, that the Roppongi
property is no longer of public dominion, there is another obstacle
to its sale by the respondents.
There is no law authorizing its conveyance.
Section 79 (f) of the Revised Administrative Code of 1917
provides:
"Section 79 (f). Conveyances and contracts to which the
Government is a party. In cases in which the Government of the
Republic of the Philippines is a party to any deed or other
instrument conveying the title to real estate or to any other property
the value of which is in excess of one hundred thousand pesos,
the respective Department Secretary shall prepare the necessary
papers which, together with the proper recommendations, shall be
submitted to the Congress of the Philippines for approval by the
same. Such deed, instrument, or contract shall be executed and
signed by the President of the Philippines on behalf of the
Government of the Philippines unless the Government of the
Philippines unless the authority therefor be expressly vested by
law in another officer." (Emphasis supplied)
The requirement has been retained in Section 48, Book I of
the Administrative Code of 1987 (Executive Order No. 292).
"SEC. 48. Official Authorized to Convey Real Property.
Whenever real property of the Government is authorized by law to
be conveyed, the deed of conveyance shall be executed in behalf
of the government by the following:
"(1) For property belonging to and titled in the name of the
Republic of the Philippines, by the President, unless the authority
therefor is expressly vested by law in another officer.
"(2) For property belonging to the Republic of the Philippines but
titled in the name of any political subdivision or of any corporate
agency or instrumentality, by the executive head of the agency or
instrumentality." (Emphasis supplied).
It is not for the President to convey valuable real property of the
government on his or her own sole will. Any such conveyance
must be authorized and approved by a law enacted by the
Congress. It requires executive and legislative concurrence.
Resolution No. 55 of the Senate dated June 8, 1989, asking for
the deferment of the sale of the Roppongi property does not
withdraw the property from public domain much less authorize its
sale. It is a mere resolution; it is not a formal declaration
abandoning the public character of the Roppongi property. In fact,
the Senate Committee on Foreign Relations is conducting
hearings on Senate Resolution No. 734 which raises serious policy
considerations and calls for a fact-finding investigation of the
circumstances behind the decision to sell the Philippine
government properties in Japan. LexLib
The resolution of this Court in Ojeda v. Bidding Committee, et al.,
supra, did not pass upon the constitutionality of Executive Order
No. 296. Contrary to respondents' assertion, we did not uphold the
authority of the President to sell the Roppongi property. The Court
stated that the constitutionality of the executive order was not the
real issue and that resolving the constitutional question was
"neither necessary nor finally determinative of the case." The
Court noted that "[W]hat petitioner ultimately questions is the use
of the proceeds of the disposition of the Roppongi property." In
emphasizing that "the decision of the Executive to dispose of the
Roppongi property to finance the CARP . . . cannot be questioned"
in view of Section 63 (c) of Rep. Act. No. 6657, the Court did not
acknowledge the fact that the property became alienable nor did it
indicate that the President was authorized to dispose of the
Roppongi property. The resolution should be read to mean that in
case the Roppongi property is re-classified to be patrimonial and
alienable by authority of law, the proceeds of a sale may be used
for national economic development projects including the CARP.
Moreover, the sale in 1989 did not materialize. The petitions before
us question the proposed 1990 sale of the Roppongi property. We
are resolving the issues raised in these petitions, not the issues
raised in 1989.
Having declared a need for a law or formal declaration to withdraw
the Roppongi property from public domain to make it alienable and
a need for legislative authority to allow the sale of the property, we
see no compelling reason to tackle the constitutional issue raised
by petitioner Ojeda.
The Court does not ordinarily pass upon constitutional questions
unless these questions are properly raised in appropriate cases
and their resolution is necessary for the determination of the case
(People v. Vera, 65 Phil. 56 [1937]). The Court will not pass upon
a constitutional question although property presented by the
record if the case can be disposed of on some other ground such
as the application of a statute or general law (Siler v. Louisville and
Nashville R. Co., 213 U.S. 175, [1909], Railroad Commission v.
Pullman Co., 312 U.S. 496 [1941]).
The petitioner in G.R. No. 92013 states why the Roppongi property
should not be sold:
The Roppongi property is not just like any piece of property. It was
given to the Filipino people in reparation for the lives and blood of
Filipinos who died and suffered during the Japanese military
occupation, for the suffering of widows and orphans who lost their
loved ones and kindred, for the homes and other properties lost by
countless Filipinos during the war. The Tokyo properties are a
monument to the bravery and sacrifice of the Filipino people in the
face of an invader; like the monuments of Rizal, Quezon, and other
Filipino heroes, we do not expect economic or financial benefits
from them. But who would think of selling these monuments?
Filipino honor and national dignity dictate that we keep our
properties in Japan as memorials to the countless Filipinos who
died and suffered. Even if we should become paupers we should
not think of selling them. For it would be as if we sold the lives and
blood and tears of our countrymen." (Rollo-G.R. No. 92013, p.
147).
The petitioner in G.R. No. 92047 also states:
"Roppongi is no ordinary property. It is one ceded by the Japanese
government in atonement for its past belligerence, for the valiant
sacrifice of life and limb and for deaths, physical dislocation and
economic devastation the whole Filipino people endured in World
War II.
"It is for what it stands for, and for what it could never bring back
to life, that its significance today remains undimmed, inspite of the
lapse of 45 years since the war ended, inspite of the passage of
32 years since the property passed on to the Philippine
government.
"Roppongi is a reminder that cannot should not be
dissipated. . . ." (Rollo-92047, p. 9)
It is indeed true that the Roppongi property is valuable not so much
because of the inflated prices fetched by real property in Tokyo but
more so because of its symbolic value to all Filipinos veterans
and civilians alike. Whether or not the Roppongi and related
properties will eventually be sold is a policy determination where
both the President and congress must concur. Considering the
properties' importance and value, the laws on conversion and
disposition of property of public dominion must be faithfully
followed.
WHEREFORE, IN VIEW OF THE FOREGOING, the petitions are
GRANTED. A writ of prohibition is issued enjoining the
respondents from proceeding with the sale of the Roppongi
property in Tokyo, Japan. The February 20, 1990 Temporary
Restraining Order is made PERMANENT.
SO ORDERED.
||| (Laurel v. Garcia, G.R. No. 92013, 92047, [July 25, 1990], 265
PHIL 827-864)
Rabuco v. Villegas 55 SCRA 658
EN BANC
[G.R. No. L-24661. February 28, 1974.]
BENJAMIN RABUCO, VENANCIO G. GUIRNALDA,
LEODEGARIO ALOBA, ELEUTERIO IBAES, ROGELIO
ARAGONES, ASENCIO ABANCO, BENEDICTO BAUTISTA,
MAXIMO AQUINO, PAULINA DALUMIAS, NENITA RAMOS,
GUILLERMO VARIAS, EMELDA ARELLANO, PEDRO BILBAO,
ERNESTO BONBALES, ROSITA OCA BAUTISTA, TERESITA
ESTEBAN, JOSE BENJAMIN, LORENZO BELVEDER,
LEODEGARIO TUMLOS, PATRICIO MALATE, ANSELMO
CORTEJOS, ANACLETA ADUCA, SALOME BARCELONA,
ENRICO CELSO, IRENE CAMBA, MARIA COLLADO, RUFINO
CANTIL, ANANIAS CANILLO, MAXIMO DE CASTRO,
CEFERINO SALAZAR, PATRIA ANAYA, FELISA VELASCO,
IGNACIO SARASPI, FLAVIO DINAGUIT, REMEDIOS
BAROMETRO, PEDRO GEBANIA, RUBEN GEGABALEN,
EMETERIO EDAO, LUCIANO ARAGONES, ADRIANO
ESTRELLADO, BONIFACIO EVARISTO, ISIDORO EDORIA,
TIMOTEO ECARUAN, BIENVENIDO COLLADO, CENON
DAJUYA, RAFAELA FERNANDEZ, ALFONSO FAUSTINO,
AVELINO GARCIA, RICARDO GUIRNALDA, FRANCISCO
HENERAL, CARMEN KIONESALA, FELICIANO LUMACTOD,
DOLORES VILLACAMPA, NARCISO LIM, EUFEMIO LEGASPI,
MATILDE MABAQUIAO, EULOGIO VIA, MACARIO
ANTONIO, JEREMIAS DE LA CRUZ, MARTIN MANGABAN,
SIMEON MANGABA T., CARIDAD MER MILLA, FELIX
MAHINAY, NAPOLEON MARZAN, ISAIAS MANALASTAS,
JOSEFA CORVERA, JOSE APRUEDO, ARSENIO REYES,
EUGENIA A. ONO, CORNELIO OPOLENCIA, SEDECIAS
PASCUA, ABUNDIO PAGUNTALAN, ESPERANZA DE
QUIROS, CRESENCIO SALEM, MOISES FERNANDEZ,
FORTUNATO GONZALES, SOCORRO R. VALEN, RODOLFO
COLLADO, VENERIO CELSO, GREGORIO DE LA CRUZ,
CELSO ALCERA, NICOLAS ARAGONES, JOSEFINA
MANANSALA, ADELAIDA CALASIN, JOSE AGUSTIN, TOMAS
JOSEPH, MANUEL DADOR, SERGIO LIPATON, ERNESTO
SUMAYDING, MARCELINO DIOSO, MIGUEL ALCERA,
CRISANTA ENAMER, JUAN VIADO, HILARION CHIOCO,
EUROPIA CABAHUG, VICTORIA DUERO, CONSORCIO
ENOC, MAMERTO GAMONIDO, BONIFACIO SABADO, MARIA
INTROLIZO, HENRY ENOLBA, REYNALDO LIM, FORTUNATO
LIPON, ERNESTO MALLOS, FLORENTINA PATRICIO,
MAMERTO PALAPALA, RAMON DE PERALTA, JOSE
PORRAS, APOLINARIO YAP, JUAN ROQUE, FELIX ROQUE,
GLICERIA SALAZAR, MIGUELA SABIO, AGAPITO SAYAS,
PAULINO SARROZA, PACIFICO JUANICO, LIBERADO
TULAWAN, LIGAYA LAUS, ERNESTO VERZOSA, LEOPOLDO
BERNALES, JAIME VISTA, ISAIAS AMURAO, BENITA M.
BARENG, and BRIGIDA SANCHEZ, petitioners, vs. HON.
ANTONIO J. VILLEGAS substituted by HON. RAMON
BAGATSING as CITY MAYOR OF MANILA, HON. LADISLAO J.
TOLENTINO, City Engineer of Manila, their agents,
employees, assistants and all persons acting under them;
HON. BENJAMIN GOZON, Administrator, Land Reform
Authority substituted by HON. CONRADO ESTRELLA as
Secretary of the Department of Agrarian Reforms and his
agents, employees, assistants and all persons acting under
his orders, respondents. 1
[G.R. No. L-24915. February 28, 1974.]
BENJAMIN RABUCO, et al. (the same co-petitioners in L-
24661), petitioners, vs. HON. ANTONIO J. VILLEGAS
substituted by HON. RAMON BAGATSING as CITY MAYOR
OF MANILA, et al. (the same co-respondents in L-
24661), respondents.
[G.R. No. L-24916. February 28, 1974.]
BENJAMIN RABUCO, et al., (the same co-petitioners in L-
24661), petitioners-appellants, vs. HON. ANTONIO J. VILLEGAS
substituted by HON. RAMON BAGATSING as CITY MAYOR
OF MANILA, et al., (the same co-respondents in L-
24661), respondents-appellees.
Manuel D. Melotindos and Ricardo M . Guirnalda for petitioners.
Second Assistant City Fiscal Manuel T . Reyes for respondents.
DECISION
TEEHANKEE, J p:
The Court herein upholds the constitutionality of Republic Act
3120 on the strength of the established doctrine that the
subdivision of communal land of the State (although titled in the
name of the municipal corporation) and conveyance of the
resulting subdivision lots by sale on installment basis to bona
fide occupants by Congressional authorization and disposition
does not constitute infringements of the due process clause or the
eminent domain provisions of the Constitution but operates simply
as a manifestation of the legislature's right of control and power to
deal with State property.
The origin and background of the cases at bar which deal with the
decisive issue of constitutionality of Republic Act 3120 enacted
on June 17, 1961, as raised by respondent mayor of Manila in
resisting petitioners' pleas that respondent mayor not only lacks
the authority to demolish their houses or eject them as tenants and
bona fide occupants of a parcel of land in San Andres,
Malate 2 but is also expressly prohibited from doing so by section
2 of the Act, may be summarized from the Court of
Appeals' 3 certification of resolution of May 31, 1965 as follows:
Case L-24916 involves petitioners' appeal to the Court of
Appeals 4 from the decision of the Manila court of first instance
dismissing their petition for injunction and mandamus to enjoin the
demolition of their houses and their ejectment from the public lots
in question and to direct respondent administrator of the Land
Authority (now the Secretary of Agrarian Reform) to implement the
provisions of Republic Act 3120 for the subdivision and sale on
installment basis of the subdivided lots to them as the tenants and
bona fide occupants thereof, and instead ordering their ejectment.
Case L-24915 involves petitioners' independent petition for
injunction filed directly with the Court of Appeals on January 29,
1965 5 to forestall the demolition overnight of their houses
pursuant to the order of demolition set for January 30, 1965 at 8
a.m. issued by respondents city officials pending the elevation of
their appeal. The appellate court gave due course thereto and
issued the writ of preliminary injunction as prayed for.
The two cases were ordered "consolidated into one" since they
were "unavoidably interlaced." The appellate court, finding that the
constitutionality of Republic Act 3120 was "the dominant and
inextricable issue in the appeal" over which it had no jurisdiction
and that the trial court incorrectly "sidetracked" the issue,
thereafter certified the said cases to this Court, as follows:
"The validity of Republic Act 3120 which was seasonably posed in
issue in the court below was sidetracked by the trial court, thus:
'The constitutionality of Republic Act No. 3120 need not be passed
upon as the principal question in issue is whether the houses of
the petitioners are public nuisances, which the court resolved in
the affirmative. As a matter of fact even if the petitioners were
already the owners of the land on which their respected houses
are erected, the respondent city officials could cause the removal
thereof as they were constructed in violation of city ordinances and
constitute public nuisance.'
"It is significant to note, however, that what is sought by the
respondent City Mayor and City Engineer of Manila is not only the
demolition of the petitioners' houses in the premises in
controversy, but their ejectment as well. Moreover, Republic Act
3120 does intend not only the dismissal of the ejectment
proceedings against the petitioners from the land in controversy
upon their motion, but as well that any demolition order issued
against them shall also have to be dismissed. The law says:
'Upon approval of this Act no ejectment proceedings against any
tenants or bona fide occupant shall be instituted and any
proceedings against any such tenant or bona fide occupant shall
be dismissed upon motion of the defendant. Provided, That any
demolition order directed against any tenant or bona fide occupant
thereof, shall be dismissed.' (Sec. 2, R.A. 3120)
"Indeed, the petitioners-appellants, who contended in the court
below that it was not necessary to decide on the validity or
constitutionality of the law, now asseverate that 'Republic Act No.
3120 expressly prohibits ejectment and demolition of petitioners'
home.' The petitioners' argument in their appeal to this Court runs
as follows:
'1 Petitioners-appellants are entitled to the remedies of injunction
and mandamus, being vested with lawful possession over Lot 21-
B, Block 610, granted by law, Republic Act No. 3120.
'2. Civil Case No. 56092 has not been barred by any prior
judgment, as wrongly claimed by respondents-appellees.
'3. Ejectment and demolition against petitioners-appellants is
unlawful and clearly prohibited by Republic Act No. 3120.'
"The defense of the respondents Mayor and City Engineer of
Manila to arguments 2 and 3 is the invalidity of the said Republic
Act 3120 for being in violation of the Constitutional prohibition
against the deprivation of property without due process of law and
without just compensation. So that even if argument 2 interposed
by the petitioners-appellants should be rejected, still they may
claim a right, by virtue of the aforesaid provisions of Republic Act
3120, to continued possession and occupation of the premises
and the lifting of the order of demolition issued against them. The
constitutionality of the said Republic Act 3120, therefore, becomes
the dominant and inextricable issue of the appeal."
Case L-24661 for the continuation and maintenance of the writ of
preliminary injunction previously issued by the Court of Appeals
for preservation of the status quo was filed by petitioners directly
with this Court on June 21, 1965, pending transmittal of the
records of Cases L-24915 and L-24916 to this Court as certified
by the Court of Appeals which declared itself without jurisdiction
over the principal and decisive issue of constitutionality
of Republic Act 3120.
The Court gave due course thereto and on August 17, 1965 issued
upon a P1,000.-bond the writ of preliminary injunction as prayed
for enjoining respondents "from demolishing and/or continuing to
demolish the houses of herein petitioners situated in Lot No. 21-B,
Block No. 610 of the Cadastral Survey of the City of Manila, or
from performing any act constituting an interference in or
disturbance of their present possession."
The records of two cases certified by the appellate court, L-24915
and L-24916, were eventually forwarded to this Court which per its
resolution of August 24, 1965 ordered that they be docketed and
be considered together with case L-24661.
In the early morning of April 19, 1970, a large fire of undetermined
origin gutted the Malate area including the lot on which petitioners
had built their homes and dwellings. Respondents city officials
then took over the lot and kept petitioners from reconstructing or
repairing their burned dwellings. At petitioners' instance, the Court
issued on June 17, 1970 a temporary restraining order enjoining
respondents city officials "from performing any act constituting an
interference in or disturbance of herein petitioners' possession of
Lot No. 21-B, Block No. 610, of the Cadastral Survey of the City of
Manila" as safe guarded them under the Court's subsisting
preliminary injunction of August 17, 1965.
The "dominant and inextricable issue" at bar, as correctly
perceived by the appellate court is the constitutionality of Republic
Act 3120 whereby Congress converted the lot in question together
with another lot in San Andres, Malate "which are reserved as
communal property" into "disposable or alienable lands of the
State to be placed under the administration and disposal of the
Land Tenure Administration" for subdivision into small lots not
exceeding 120 square meters per lot for sale on installment basis
to the tenants or bona fide occupants thereof 6 and expressly
prohibited ejectment and demolition of petitioners' homes under
section 2 of the Act as quoted in the appellate court's certification
resolution, supra.
The incidental issue seized upon by the trial court as a main issue
for "sidetracking" the decisive issue of constitutionality, to wit, that
petitioners' houses as they stood at the time of its judgment in
1965 "were constructed in violation of city ordinances and
constituted public nuisances" whose removal could be ordered
"even if petitioners were already the owners of the land on which
their respective houses are erected" has become moot with the
burning down of the petitioners' houses in the fire of April 19, 1970.
If the Act is invalid and unconstitutional for constituting deprivation
of property without due process of law and without just
compensation as contended by respondents city officials, then the
trial court's refusal to enjoin ejectment and demolition of
petitioners' houses may be upheld. Otherwise, petitioners' right
under the Act to continued possession and occupation of the
premises and to the lifting and dismissal of the order of demolition
issued against them must be enforced and the trial court's
judgment must be set aside.
Respondents city officials' contention that the Act must be stricken
down as unconstitutional for depriving the city of Manila of the lots
in question and providing for their sale in subdivided small lots to
bona fide occupants or tenants without payment of just
compensation is untenable and without basis, since the, lots in
question are manifestly owned by the city in
its public and governmental capacity and are therefore public
property over which Congress had absolute control as
distinguished from patrimonial property owned by it in
its private or proprietary capacity of which it could not be deprived
without due process and without just compensation. 7
Here, Republic Act 3120 expressly declared that the properties
were "reserved as communal property" and ordered their
conversion into "disposable and alienable lands of the State" for
sale in small lots to the bona fide occupants thereof. It is
established doctrine that the act of classifying State property calls
for the exercise of wide discretionary legislative power which will
not be interfered with by the courts.
The case of Salas vs. Jarencio 8 wherein the Court upheld the
constitutionality of Republic Act 4118 whereby Congress in
identical terms as in Republic Act 3120 likewise converted another
city lot (Lot 1-B-2-B of Block 557 of the cadastral survey of Manila
also in Malate) which was reserved as communal property into
disposable land of the State for resale in small lots by the Land
Tenure Administration to the bona fide occupants is controlling in
the case at bar.
The Court therein reaffirmed the established general rule that
"regardless of the source or classification of land in the possession
of a municipality, excepting those acquired with its own funds in its
private or corporate capacity, such property is held in trust for the
State for the benefit of its inhabitants, whether it be for
governmental or proprietary purposes. It holds such lands subject
to the paramount power of the legislature to dispose of the same,
for after all it owes its creation to it as an agent for the performance
of a part of its public work, the municipality being but a subdivision
or instrumentality thereof for purposes of local administration.
Accordingly, the legal situation is the same as if the State itself
holds the property and puts it to a different use" 9 and stressed
that "the property, as has been previously shown, was not
acquired by the City of Manila with its own funds in its private or
proprietary capacity. That it has in its name a registered title is not
questioned, but this title should be deemed to be held in trust for
the State as the land covered thereby was part of the territory of
the City of Manila granted by the sovereign upon its creation." 10
There as here, the Court holds that the Acts in question (Republic
Acts 4118 in Salas and Republic Act 3120 in the case at bar) were
intended to implement the social justice policy of
the Constitution and the government program of land for the
landless and that they were not "intended to expropriate the
property involved but merely to confirm its character as communal
land of the State and to make it available for disposition by the
National Government: . . . The subdivision of the land and
conveyance of the resulting subdivision lots to the occupants by
Congressional authorization does not operate as an exercise of
the power of eminent domain without just compensation in
violation of Section 1, subsection (2), Article III of
the Constitution, 11 but simply as a manifestation of
its right and power to deal with state property." 12
Since the challenge of respondents city officials against the
constitutionality of Republic Act 3120 must fail as the City
was not deprived thereby of anything it owns by acquisition with its
private or corporate funds either under the due process clause or
under the eminent domain provisions of the Constitution, the
provisions of said Act must be enforced and petitioners are entitled
to the injunction as prayed for implementing the Act's prohibition
against their ejectment and demolition of their houses.
WHEREFORE, the appealed decision of the lower court (in Case
No. L-24916) is hereby set aside, and the preliminary injunction
heretofore issued on August 17, 1965 is hereby made permanent.
The respondent Secretary of Agrarian Reform as successor
agency of the Land Tenure Administration may now proceed with
the due implementation of Republic Act 3120 in accordance with
its terms and provisions. No costs.
||| (Rabuco v. Villegas, G.R. No. L-24661, L-24915, L-24916,
[February 28, 1974], 154 PHIL 615-634)

Macasiano v. Diokno 212 SCRA 464
EN BANC
[G.R. No. 97764. August 10, 1992.]
LEVY D. MACASIANO, Brigadier General/PNP
Superintendent, Metropolitan Traffic
Command, petitioner, vs. HONORABLE ROBERTO C.
DIOKNO, Presiding Judge, Branch, 62, Regional Trial Court of
Makati, Metro Manila, MUNICIPALITY OF PARAAQUE,
METRO MANILA, PALANYAG KILUSANG BAYAN FOR
SERVICE,respondents.
Ceferino, Padua Law Office for Palanyag Kilusang Bayan for
Service.
Manuel de Guia for Municipality of Paraaque.
SYLLABUS
1. POLITICAL LAW; PUBLIC CORPORATION; MUNICIPAL
ORDINANCE; RESOLVING ITS VALIDITY; LAWS IN FORCE AT
ITS ENACTMENT CONTROL. In resolving the question of
whether the disputed municipal ordinance authorizing the flea
market on the public streets is valid, it is necessary to examine the
laws in force during the time the said ordinance was enacted,
namely, Batas Pambansa Blg. 337, otherwise known as Local
Government Code,'in connection with established principles
embodied in the Civil Code on property and settled jurisprudence
on the matter.
2. PROPERTY OF PROVINCES, CITIES, AND
MUNICIPALITIES; CLASSIFICATION; PROPERTY FOR PUBLIC
USE. The property of provinces, cities and municipalities is
divided into property for public use and patrimonial property (Art.
423, Civil Code). As to what consists of property for public use,
Article 424 of Civil Code states: "ART. 24. Property for public use,
in the provinces, cities and municipalities, consists of the provincial
roads, city streets, the squares, fountains, public waters,
promenades, and public works for public service paid for by said
provinces, cities or municipalities. "All other property possessed
by any of them is patrimonial and shall be governed by this Code,
without prejudice to the provisions of special laws."
3. PROPERTY OF LOCAL GOVERNMENT DEVOTED TO
PUBLIC SERVICE; DEEMED PUBLIC; UNDER THE ABSOLUTE
CONTROL OF CONGRESS; LOCAL GOVERNMENTS HAVE NO
AUTHORITY TO CONTROL OR REGULATE THEM UNLESS
SPECIFIC AUTHORITY IS VESTED UPON THEM BY
CONGRESS; AUTHORITY TO BE INTERPRETED ACCORDING
TO BASIC PRINCIPLES OF LAW; ART. 424 OF THE CIVIL
CODE. Properties of the local government which are devoted
to public service are deemed public and are under the absolute
control of Congress (Province of Zamboanga del Norte v. City of
Zamboanga, L-24440, March 28, 1968, 22 SCRA 1334). Hence,
local governments have no authority whatsoever to control or
regulate the use of public properties unless specific authority is
vested upon them by Congress. One such example of this
authority given by Congress to the local governments is the power
to close roads as provided in Section 10, Chapter II of the Local
Government Code, which states: "SEC. 10. Closure of roads. A
local government unit may likewise, through its head acting
pursuant to a resolution of its sangguniang and in accordance with
existing law and the provisions of this Code, close any barangay,
municipal, city or provincial road, street, alley, park or square. No
such way or place or any part thereof shall be closed without
indemnifying any person prejudiced thereby. A property thus
withdrawn from public use may be used or conveyed for any
purpose for which other real property belonging to the local unit
concerned might be lawfully used or conveyed." However, the
aforestated legal provision which gives authority to local
government units to close roads and other similar public places
should be read and interpreted in accordance with basic principles
already established by law. These basic principles have the effect
of limiting such authority of the province, city or municipality to
close a public street or thoroughfare. Article 424 of the Civil Code
lays down the basic principle that properties of public dominion
devoted to public use and made available to the public in general
are outside the commerce of man and cannot be disposed of or
leased by the local government unit to private persons.
4. ROADS AND STREETS ORDINARILY USED FOR
VEHICULAR TRAFFIC CONSIDERED PUBLIC PROPERTY;
LOCAL GOVERNMENT HAS NO POWER TO USE IT FOR
ANOTHER PURPOSE OR TO DISPOSE OF OR LEASE IT TO
PRIVATE PERSONS. However, those roads and streets which
are available to the public in general and ordinarily used for
vehicular traffic are still considered public property devoted to
public use. In such case, the local government has no power to
use it for another purpose or to dispose of or lease it to private
persons.
5. PROPERTY WITHDRAWN FROM PUBLIC USE; BECOMES
PATRIMONIAL PROPERTY OF THE LOCAL GOVERNMENT
UNIT; CAN BE OBJECT OF ORDINARY CONTRACT. When it
is already withdrawn from public use, the property then becomes
patrimonial property of the local government unit concerned
(Article 422, Civil Code; Cebu Oxygen, etc. et al. v. Bercilles, et
al., G.R. No. L-40474, August 29, 1975, 66 SCRA 481). It is only
then that the respondent municipality can "use or convey them for
any purpose for which other real property belonging to the local
unit concerned might be lawfully used or conveyed" in accordance
with the last sentence of Section 10, Chapter II of Blg. 333, known
as Local Government Code.Such withdrawn portion becomes
patrimonial property which can be the object of an ordinary
contract (Cebu Oxygen and Acetylene Co., Inc. v. Bercilles, et al.,
G.R. No. L-40474, August 29, 1975, 66 SCRA 481).
6. POWERS OF LOCAL GOVERNMENT UNIT; NOT
ABSOLUTE; SUBJECT TO LIMITATION SET BY THE
CONSTITUTION AND THE LAWS. Verily, the powers of a local
government unit are not absolute. They are subject to limitations
laid down by the Constitution and the laws such as our Civil Code.
Moreover, the exercise of such powers should be subservient to
paramount considerations of health and well-being of the
members of the community.
7. LEGAL RIGHT OF GENERAL PUBLIC TO DEMAND THE
DEMOLITION OF ILLEGALLY CONSTRUCTED STALLS IN
PUBLIC ROADS AND STREETS. As what we have said in the
Dacanay case, the general public have a legal right to demand the
demolition of the illegally constructed stalls in public roads and
streets and the officials of respondent municipality have the
corresponding duty arising from public office to clear the city
streets and restore them to their specific public purpose.
8. BATAS PAMBANSA BLG. 337 (LOCAL GOVERNMENT
CODE); REPEALED BY R.A. NO. 7160 (LOCAL GOVERNMENT
CODE OF 1991); SECTION 5(D) THEREOF. However, at this
point, We find it worthy to note that Batas Pambansa Blg. 337,
known as Local Government Code,has already been repealed
by Republic Act No. 7160 known as Local Government Code of
1991 which took effect on January 1, 1992. Section 5(d) of the new
Code provides that rights and obligations existing on the date of
effectivity of the new Code and arising out of contracts or any other
source of prestation involving a local government unit shall be
governed by the original terms and conditions of the said contracts
or the law in force at the time such rights were vested.
DECISION
MEDIALDEA, J p:
This is a petition for certiorari under Rule 65 of the Rules of Court
seeking the annulment of the decision of the Regional Trial Court
of Makati, Branch 62, which granted the writ of preliminary
injunction applied for by respondents Municipality of Paraaque
and Palanyag Kilusang Bayan for Service (Palanyag for brevity)
against petitioner herein. Cdpr
The antecedent facts are as follows:
On June 13, 1990, the respondent municipality passed Ordinance
No. 86, Series of 1990 which authorized the closure of J. Gabrielle,
G.G. Cruz, Bayanihan, Lt. Garcia Extension and Opena Streets
located at Baclaran, Paraaque, Metro Manila and the
establishment of a flea market thereon. The said ordinance was
approved by the municipal council pursuant to MCC Ordinance
No. 2, Series of 1979, authorizing and regulating the use of certain
city and/or municipal streets, roads and open spaces within
Metropolitan Manila as sites for flea market and/or vending areas,
under certain terms and conditions.
On July 20, 1990, the Metropolitan Manila Authority approved
Ordinance No. 86, s. 1990 of the municipal council of respondent
municipality subject to the following conditions:
1. That the aforenamed streets are not used for vehicular traffic,
and that the majority of the residents do not oppose the
establishment of the flea market/vending areas thereon;
2. That the 2-meter middle road to be used as flea market/vending
area shall be marked distinctly, and that the 2 meters on both sides
of the road shall be used by pedestrians;
3. That the time during which the vending area is to be used shall
be clearly designated;
4. That the use of the vending areas shall be temporary and shall
be closed once the reclaimed areas are developed and donated
by the Public Estate Authority.
On June 20, 1990, the municipal council of Paraaque issued a
resolution authorizing Paraaque Mayor Walfrido N. Ferrer to
enter into contract with any service cooperative for the
establishment, operation, maintenance and management of flea
markets and/or vending areas. llcd
On August 8, 1990, respondent municipality and respondent
Palanyag, a service cooperative, entered into an agreement
whereby the latter shall operate, maintain and manage the flea
market in the aforementioned streets with the obligation to remit
dues to the treasury of the municipal government of Paraaque.
Consequently, market stalls were put up by respondent Palanyag
on the said streets.
On September 13, 1990 petitioner Brig. Gen. Macasiano, PNP
Superintendent of the Metropolitan Traffic Command, ordered the
destruction and confiscation of stalls along G.G. Cruz and J.
Gabrielle St. in Baclaran. These stalls were later returned to
respondent Palanyag.
On October 16, 1990, petitioner Brig. General Macasiano wrote a
letter to respondent Palanyag giving the latter ten (10) days to
discontinue the flea market; otherwise, the market stalls shall be
dismantled.
Hence, on October 23, 1990, respondents municipality and
Palanyag filed with the trial court a joint petition for prohibition and
mandamus with damages and prayer for preliminary injunction, to
which the petitioner filed his memorandum/opposition to the
issuance of the writ of preliminary injunction. Cdpr
On October 24, 1990, the trial court issued a temporary restraining
order to enjoin petitioner from enforcing his letter-order of October
16, 1990 pending the hearing on the motion for writ of preliminary
injunction.
On December 17, 1990, the trial court issued an order upholding
the validity of Ordinance No. 86 s. 1990 of the Municipality of
Paraaque and enjoining petitioner Brig. Gen. Macasiano from
enforcing his letter-order against petitioner Palanyag.
Hence, this petition was filed by the petitioner thru the Office of the
Solicitor General alleging grave abuse of discretion tantamount to
lack or excess of jurisdiction on the part of the trial judge in issuing
the assailed order.
The sole issue to be resolved in this case is whether or not an
ordinance or resolution issued by the municipal council of
Paraaque authorizing the lease and use of public streets or
thoroughfares as sites for flea markets is valid.
The Solicitor General, in behalf of petitioner, contends that
municipal roads are used for public service and are therefore
public properties; that as such, they cannot be subject to private
appropriation or private contract by any person, even by the
respondent Municipality of Paraaque. Petitioner submits that a
property already dedicated to public use cannot be used for
another public purpose and that absent a clear showing that the
Municipality of Paraaque has been granted by the legislature a
specific authority to convert a property already in public use to
another public use, respondent municipality is, therefore, bereft of
any authority to close municipal roads for the establishment of a
flea market. Petitioner also submits that assuming that the
respondent municipality is authorized to close streets, it failed to
comply with the conditions set forth by the Metropolitan Manila
Authority for the approval of the ordinance providing for the
establishment of flea markets on public streets. Lastly, petitioner
contends that by allowing the municipal streets to be used by
market vendors, the municipal council of respondent municipality
violated its duty under the Local Government Code to promote the
general welfare of the residents of the municipality.
In upholding the legality of the disputed ordinance, the trial court
ruled:
" . . . that Chapter II Section 10 of the Local Government Code is
a statutory grant of power given to local government units, the
Municipality of Paraaque as such, is empowered under that law
to close its roads, streets or alley subject to limitations stated
therein (i.e. that it is in accordance with existing laws and the
provisions of this code).
xxx xxx xxx
"The actuation of the respondent Brig. Gen. Levi Macasiano,
though apparently within its power is in fact an encroachment of
power legally vested to the municipality, precisely because when
the municipality enacted the ordinance in question the authority
of the respondent as Police Superintendent ceases to be operative
on the ground that the streets covered by the ordinance ceases to
be a public thoroughfare." (pp. 33-34, Rollo)
We find the petition meritorious. In resolving the question of
whether the disputed municipal ordinance authorizing the flea
market on the public streets is valid, it is necessary to examine the
laws in force during the time the said ordinance was enacted,
namely, Batas Pambansa Blg. 337, otherwise known as Local
Government Code,'in connection with established principles
embodied in the Civil Code on property and settled jurisprudence
on the matter.
The property of provinces, cities and municipalities is divided into
property for public use and patrimonial property (Art. 423, Civil
Code). As to what consists of property for public use, Article 424
of Civil Code states:
"ART. 424. Property for public use, in the provinces, cities and
municipalities, consists of the provincial roads, city streets, the
squares, fountains, public waters, promenades, and public works
for public service paid for by said provinces, cities or
municipalities. cdtai
"All other property possessed by any of them is patrimonial and
shall be governed by this Code, without prejudice to the provisions
of special laws."
Based on the foregoing, J. Gabrielle G.G. Cruz, Bayanihan, Lt.
Gacia Extension and Opena streets are local roads used for public
service and are therefore considered public properties of
respondent municipality. Properties of the local government which
are devoted to public service are deemed public and are under the
absolute control of Congress (Province of Zamboanga del Norte v.
City of Zamboanga, L-24440, March 28, 1968, 22 SCRA 1334).
Hence, local governments have no authority whatsoever to control
or regulate the use of public properties unless specific authority is
vested upon them by Congress. One such example of this
authority given by Congress to the local governments is the power
to close roads as provided in Section 10, Chapter II of the Local
Government Code, which states: prLL
"SEC. 10. Closure of roads. A local government unit may
likewise, through its head acting pursuant to a resolution of its
sangguniang and in accordance with existing law and the
provisions of this Code, close any barangay, municipal, city or
provincial road, street, alley, park or square. No such way or place
or any part thereof shall be closed without indemnifying any person
prejudiced thereby. A property thus withdrawn from public
use may be used or conveyed for any purpose for which other real
property belonging to the local unit concerned might be lawfully
used or conveyed." (Emphasis ours)
However, the aforestated legal provision which gives authority to
local government units to close roads and other similar public
places should be read and interpreted in accordance with basic
principles already established by law. These basic principles have
the effect of limiting such authority of the province, city or
municipality to close a public street or thoroughfare. Article 424 of
the Civil Code lays down the basic principle that properties of
public dominion devoted to public use and made available to the
public in general are outside the commerce of man and cannot be
disposed of or leased by the local government unit to private
persons. Aside from the requirement of due process which should
be complied with before closing a road, street or park, the closure
should be for the sole purpose of withdrawing the road or other
public property from public use when circumstances show that
such property is no longer intended or necessary for public use or
public service. When it is already withdrawn from public use, the
property then becomes patrimonial property of the local
government unit concerned (Article 422, Civil Code; Cebu Oxygen,
etc. et al. v. Bercilles, et al., G.R. No. L-40474, August 29, 1975,
66 SCRA 481). It is only then that the respondent municipality can
"use or convey them for any purpose for which other real property
belonging to the local unit concerned might be lawfully used or
conveyed" in accordance with the last sentence of Section 10,
Chapter II of Blg. 333, known as Local Government Code.In one
case, the City Council of Cebu, through a resolution, declared the
terminal road of M. Borces Street, Mabolo, Cebu City as an
abandoned road, the same not being included in the City
Development Plan. Thereafter, the City Council passed another
resolution authorizing the sale of the said abandoned road through
public bidding. We held therein that the City of Cebu is empowered
to close a city street and to vacate or withdraw the same from
public use. Such withdrawn portion becomes patrimonial property
which can be the object of an ordinary contract (Cebu Oxygen and
Acetylene Co., Inc. v. Bercilles, et al., G.R. No. L-40474, August
29, 1975, 66 SCRA 481). However, those roads and streets which
are available to the public in general and ordinarily used for
vehicular traffic are still considered public property devoted to
public use. In such case, the local government has no power to
use it for another purpose or to dispose of or lease it to private
persons. This limitation on the authority of the local government
over public properties has been discussed and settled by this
Court en banc in "Francisco v. Dacanay, petitioner v. Mayor
Macario Asistio, Jr., et al., respondents., G.R. No. 93654, May 6,
1992." This Court ruled:
"There is no doubt that the disputed areas from which the private
respondents' market stalls are sought to be evicted are public
streets, as found by the trial court in Civil Case No. C-12921. A
public street is property for public use hence outside the
commerce of man (Arts. 420, 424, Civil Code). Being outside the
commerce of man, it may not be the subject of lease or other
contract (Villanueva, et al. v. Castaeda and Macalino, 15 SCRA
142 citing the Municipality of Cavite v. Rojas, 30 SCRA 602;
Espiritu v. Municipal Council of Pozorrubio, 102 Phil. 869; and
Muyot v. De la Fuente, 48 O.G. 4860).
"As the stallholders pay fees to the City Government for the right
to occupy portions of the public street, the City Government,
contrary to law, has been leasing portions of the streets to them.
Such leases or licenses are null and void for being contrary to law.
The right of the public to use the city streets may not be bargained
away through contract. The interests of a few should not prevail
over the good of the greater number in the community whose
health, peace, safety, good order and general welfare, the
respondent city officials are under legal obligation to
protect. LLphil
"The Executive Order issued by acting Mayor Robles authorizing
the use of Heroes del '96 Street as a vending area for stallholders
who were granted licenses by the city government contravenes the
general law that reserves city streets and roads for public use.
Mayor Robles' Executive Order may not infringe upon the vested
right of the public to use city streets for the purpose they were
intended to serve: i.e., as arteries of travel for vehicles and
pedestrians."
Even assuming, in gratia argumenti, that respondent municipality
has the authority to pass the disputed ordinance, the same cannot
be validly implemented because it cannot be considered approved
by the Metropolitan Manila Authority due to non-compliance by
respondent municipality of the conditions imposed by the former
for the approval of the ordinance, to wit: LexLib
1. That the aforenamed streets are not used for vehicular traffic,
and that the majority of the residents do(es) not oppose the
establishment of the flea market/vending areas thereon;
2. That the 2-meter middle road to be used as flea market/vending
area shall be marked distinctly, and that the 2 meters on both sides
of the road shall be used by pedestrians;
3. That the time during which the vending area is to be used shall
be clearly designated;
4. That the use of the vending areas shall be temporary and shall
be closed once the reclaimed areas are developed and donated
by the Public Estate Authority. (p. 38, Rollo)
Respondent municipality has not shown any iota of proof that it
has complied with the foregoing conditions precedent to the
approval of the ordinance. The allegations of respondent
municipality that the closed streets were not used for vehicular
traffic and that the majority of the residents do not oppose the
establishment of a flea market on said streets are unsupported by
any evidence that will show that this first condition has been met.
Likewise, the designation by respondents of a time schedule
during which the flea market shall operate is absent.
Further, it is of public notice that the streets along Baclaran area
are congested with people, houses and traffic brought about by
the proliferation of vendors occupying the streets. To license and
allow the establishment of a flea market along J. Gabrielle, G.G.
Cruz, Bayanihan, Lt. Garcia Extension and Opena streets in
Baclaran would not help in solving the problem of congestion. We
take note of the other observations of the Solicitor General when
he said:
" . . . . There have been many instances of emergencies and fires
where ambulances and fire engines, instead of using the roads for
a more direct access to the fire area, have to maneuver and look
for other streets which are not occupied by stalls and vendors
thereby losing valuable time which could, otherwise, have been
spent in saving properties and lives.
"Along G.G. Cruz Street is a hospital, the St. Rita Hospital.
However, its ambulances and the people rushing their patients to
the hospital cannot pass through G.G. Cruz because of the stalls
and the vendors. Once can only imagine the tragedy of losing a
life just because of a few seconds delay brought about by the
inaccessibility of the streets leading to the hospital.
"The children, too, suffer. In view of the occupancy of the roads by
stalls and vendors, normal transportation flow is disrupted and
school children have to get off at a distance still far from their
schools and walk, rain or shine.
"Indeed one can only imagine the garbage and litter left by vendors
on the streets at the end of the day. Needless to say, these cause
further pollution, sickness and deterioration of health of the
residents therein." (pp. 21-22, Rollo)
Respondents do not refute the truth of the foregoing findings and
observations of petitioners. Instead, respondents want this Court
to focus its attention solely on the argument that the use of public
spaces for the establishment of a flea market is well within the
powers granted by law to a local government which should not be
interfered with by the courts.
Verily, the powers of a local government unit are not absolute.
They are subject to limitations laid down by the Constitution and
the laws such as our Civil Code. Moreover, the exercise of such
powers should be subservient to paramount considerations of
health and well-being of the members of the community. Every
local government unit has the sworn obligation to enact measures
that will enhance the public health, safety and convenience,
maintain peace and order, and promote the general prosperity of
the inhabitants of the local units. Based on this objective, the local
government should refrain from acting towards that which might
prejudice or adversely affect the general welfare.
As what we have said in the Dacanay case, the general public
have a legal right to demand the demolition of the illegally
constructed stalls in public roads and streets and the officials of
respondent municipality have the corresponding duty arising from
public office to clear the city streets and restore them to their
specific public purpose. LLjur
The instant case as well as the Dacanay case, involves an
ordinance which is void and illegal for lack of basis and authority
in laws applicable during its time. However, at this point, We find it
worthy to note that Batas Pambansa Blg. 337, known as Local
Government Code,has already been repealed by Republic Act No.
7160 known as Local Government Code of 1991 which took effect
on January 1, 1992. Section 5(d) of the new Code provides that
rights and obligations existing on the date of effectivity of the new
Code and arising out of contracts or any other source of prestation
involving a local government unit shall be governed by the original
terms and conditions of the said contracts or the law in force at the
time such rights were vested.
ACCORDINGLY, the petition is GRANTED and the decision of the
respondent Regional Trial Court dated December 17, 1990 which
granted the writ of preliminary injunction enjoining petitioner as
PNP Superintendent, Metropolitan Traffic Command from
enforcing the demolition of market stalls along J. Gabrielle, G.G.
Cruz, Bayanihan, Lt. Garcia Extension and Opena streets is
hereby REVERSED and SET ASIDE.
SO ORDERED.
||| (Macasiano v. Diokno, G.R. No. 97764, [August 10, 1992], 287
PHIL 517-529)
Republic v. Court of Appeals 281 SCRA 639
THIRD DIVISION
[G.R. No. 100709. November 14, 1997.]
REPUBLIC OF THE PHILIPPINES, represented by the
DIRECTOR OF LANDS, petitioner, vs. COURT OF APPEALS,
JOSEFINA L. MORATO, SPOUSES NENITA CO and ANTONIO
QUILATAN AND THE REGISTER OF DEEDS OF QUEZON
PROVINCE, respondents.
The Solicitor General for petitioner.
Rabendranath Y. Uy for private respondent Josefina L. Morato.
Cristal-Tenorio Law Office for private respondents.
SYNOPSIS
Respondent Morato's Application for Free Patent was approved
and consequently, he was issued an Original Certificate of Title.
Both the free patent and the title specifically mandate that the land
shall not be alienated nor encumbered within five years from the
date of the issuance of the patent. However, it was established
that the subject land is a portion of the Calauag Bay, not suitable
to vegetation. Moreover, a portion of the land was mortgaged by
respondent Morato to respondent spouses Nenita Co and Antonio
Quilatan who constructed a house thereon. Another portion of the
land was leased to Perfecto Advincula wherein a warehouse was
also constructed. On these grounds, petitioner filed a case for the
cancellation of Morato's title and reversion of the land to the public
domain. After trial, the lower court ruled that there was no violation
of the 5-year period ban against alienating or encumbering the
land because the land was merely leased and not alienated. It also
found that the mortgage to spouses Quilatan covered only the
improvement and not the land itself.
Commonwealth Act No. 141, otherwise known as the Public Land
Act, proscribes the encumbrance of a parcel of land acquired
under a free patent or homestead within five years from the grant
of such patent. Furthermore, such encumbrance results in the
cancellation of the grant and the reversion of the land to the public
domain. It is indisputable that Respondent Morato cannot fully use
or enjoy the land during the duration of the lease contract as such
contract "impairs the use of the property" by the grantee. The
mortgage, on the other hand, constitutes a legal limitation on the
estate, and the foreclosure of such mortgage would necessarily
result in the auction of the property. Even if only part of the property
has been sold or alienated within the prohibited period, such
alienation is a sufficient cause for the reversion of the whole estate
to the State. Moreover, Private Respondent Morato cannot own
foreshore land. From the undisputed factual findings of the Court
of Appeals, the land has since become foreshore. Accordingly, it
can no longer be subject of a free patent under the Public Land
Act.
SYLLABUS
1. CIVIL LAW; LAND TITLES AND DEEDS; COMMONWEALTH
ACT NO. 141 (PUBLIC LAND ACT); LAND ACQUIRED UNDER
A FREE PATENT; PRESCRIPTION AGAINST ENCUMBRANCE.
The provisions under Secs. 118, 121, 122 and 124 of
the Commonwealth Act No. 141 (Public Land Act) clearly
proscribe the encumbrance of a parcel of land acquired under a
free patent or homestead within five years from the grant of such
patent. Furthermore, such encumbrance results in the cancellation
of the grant and the reversion of the land to the public domain. The
prohibition against any alienation or encumbrance of the land grant
is a proviso attached to the approval of every application. Prior to
the fulfillment of the requirements of law, Respondent Morato had
only an inchoate right to the property; such property remained part
of the public domain and, therefore, not susceptible to alienation
or encumbrance. Conversely, when a "homesteader has complied
with all the terms and conditions which entitled him to a patent for
[a] particular tract of public land, he acquires a vested interest
therein and has to be regarded an equitable owner. thereof."
However, for Respondent Morato's title of ownership over the
patented land to be perfected, she should have complied with the
requirements of the law, one of which was to keep the property for
herself and her family within the prescribed period of five (5) years.
Prior to the fulfillment of all requirements of the law, Respondent
Morato's title over the property was incomplete. Accordingly. if the
requirements are not complied with, the State as the grantor could
petition for the annulment of the patent and the cancellation of the
title.
2. ID.; ID.; ID.; "ENCUMBRANCE", DEFINED. Encumbrance
has been defined as "[a]nything that impairs the use or transfer of
property; anything which constitutes a burden on the title; a burden
or charge upon property; a claim or lien upon property." It may be
a "legal claim on an estate for the discharge of which the estate is
liable; an embarrassment of the estate or property so that it cannot
be disposed of without being subject to it; an estate, interest, or
right in lands, diminishing their value to the general owner; a
liability resting upon an estate.
3. ID.; ID.; ID.; ID.; LEASE INCLUDED THEREIN, AND CANNOT
BE EXCUSED BY EQUITY. Do the contracts of lease and
mortgage executed within five (5) years from the issuance of the
patent constitute an "encumbrance" and violate the terms and
conditions of such patent? It is indisputable that respondent
Morato cannot fully use or enjoy the land during the duration of the
lease contract. This restriction on the enjoyment of her property
sufficiently meets the definition of an encumbrance under Section
118 of the Public Land Act, because such contract "impairs the
use of the property" by the grantee. In a contract of lease which is
consensual, bilateral, onerous and commutative, the owner
temporarily grants the use of his or her property to another who
undertakes to pay rent therefor. During the term of the lease, the
grantee of the patent cannot enjoy the beneficial use of the land
leased. As already observed, the Public Land Act does not permit
a grantee of a free patent from encumbering any portion of such
land. Such encumbrance is a ground for the nullification of the
award. Morato's resort to equity, i.e, that the lease was executed
allegedly out of the goodness of her heart without any intention of
violating the law, cannot help her. Equity, which has been aptly
described as "justice outside legality," is applied only in the
absence of, and never against, statutory law or judicial rules of
procedure. Positive rules prevail over all abstract arguments
based on equity contra legem.
4. ID.; ID.; ID.; MORTGAGE INCLUDED. The questioned
mortgage falls squarely within the term "encumbrance" proscribed
by Section 118 of the Public Land Act. Verily, a mortgage
constitutes a legal limitation on the estate, and the foreclosure of
such mortgage would necessarily result in the auction of the
property.
5. ID.; ID.; ID.; ID.; VIOLATION THEREOF. Even if only part of
the property has been sold or alienated within the prohibited period
of five years from the issuance of the patent, such alienation is a
sufficient cause for the reversion of the whole estate to the State.
As a condition for the grant of a free patent to an applicant, the law
requires that the land should not be encumbered, sold or alienated
within five years from the issuance of the patent. The sale or the
alienation of part of the homestead violates that condition. The
prohibition against the encumbrance lease and mortgage
included of a homestead which, by analogy applies to a free
patent, is mandated by the rationale for the grant. Respondent
Morato cannot use the doctrine of the indefeasibility of her Torrens
title to bar the state from questioning its transfer or encumbrance.
The certificate of title issued to her clearly stipulated that its award
was "subject to the conditions provided for in Sections 118, 119,
121, 122 and 124 of Commonwealth Act (CA) No. 141." Because
she violated Section 118, the reversion of the property to the public
domain necessarily follows, pursuant to Section 124.
6. ID.; ID.; ID.; FORESHORE LANDS, NOT INCLUDED.
Private Respondent Morato cannot own foreshore land. The
application for a free patent was made in 1972. From the
undisputed factual findings of the Court of Appeals, however; the
land has since become foreshore. Accordingly, it can no longer be
subject of a free patent under the Public Land Act. When the sea
moved towards the estate and the tide invaded it, the invaded
property became foreshore land and passed to the realm of the
public domain. In fact; the Court in Government vs. Cabangis
annulled the registration of land subject of cadastral proceedings
when the parcel subsequently became foreshore land. In another
case, the Court voided the registration decree of a trial court and
held that said court had no jurisdiction to award foreshore land to
any private person or entity. The subject land in this case, being
foreshore land, should therefore be returned to the public domain.
DECISION
PANGANIBAN, J p:
Will the lease and/or mortgage of a portion of a realty acquired
through free patent constitute sufficient ground for the nullification
of such land grant? Should such property revert to the State once
it is invaded by the sea and thus becomes foreshore land?
The Case
These are the two questions raised in the petition before us
assailing the Court of Appeals' 1 Decision in CA-G.R. CV No.
02667 promulgated on June 13, 1991 which answered the said
questions in the negative. 2 Respondent Court's Decision
dismissed 3 petitioner's appeal and affirmed in toto the decision of
the Regional Trial Court 4 of Calauag, Quezon, dated December
28, 1983 in Civil Case No. C-608. In turn, the Regional Trial Court's
decision dismissed petitioner's complaint for cancellation of the
Torrens Certificate of Title of Respondent Morato and for reversion
of the parcel of land subject thereof to the public domain. prcd
The Facts
The petition of the solicitor general, representing the Republic of
the Philippines, recites the following facts: 5
"Sometime in December, 1972, respondent Morato filed a Free
Patent Application No. III-3-8186-B on a parcel of land with an area
of 1,265 square meters situated at Pinagtalleran, Calauag,
Quezon. On January 16, 1974, the patent was approved and the
Register of Deeds of Quezon at Lucena City issued on February
4, 1974 Original Certificate of Title No. P-17789. Both the free
patent and the title specifically mandate that the land shall not
be alienated nor encumbered within five (5) years from the date of
the issuance of the patent (Sections 118 and 124 of CA No. 141,
as amended).
Subsequently, the District Land Officer in Lucena City, acting upon
reports that respondent Morato had encumbered the land in
violation of the condition of the patent, conducted an investigation.
Thereafter, it was established that the subject land is a portion of
the Calauag Bay, five (5) to six (6) feet deep under water during
high tide and two (2) feet deep at low tide, and not suitable to
vegetation. Moreover, on October 24, 1974, a portion of the land
was mortgaged by respondent Morato to respondents Nenita Co
and Antonio Quilatan for P10,000.00 (pp. 2, 25, Folder of Exhibits).
The spouses Quilatan constructed a house on the land. Another
portion of the land was leased to Perfecto Advincula on February
2, 1976 at P100.00 a month, where a warehouse was constructed.
On November 5, 1978, petitioner filed an amended complaint
against respondents Morato, spouses Nenita Co and Antonio
Quilatan, and the Register of Deeds of Quezon for the cancellation
of title and reversion of a parcel of land to the public domain,
subject of a free patent in favor of respondent Morato, on the
grounds that the land is a foreshore land and was mortgaged and
leased within the five-year prohibitory period (p. 46, Records).
After trial, the lower court, on December 28, 1983, rendered a
decision dismissing petitioner's complaint. In finding for private
respondents, the lower court ruled that there was no violation of
the 5-year period ban against alienating or encumbering the land,
because the land was merely leased and not alienated. It also
found that the mortgage to Nenita Co and Antonio Quilatan
covered only the improvement and not the land itself."
On appeal, the Court of Appeals affirmed the decision of the trial
court. Thereafter, the Republic of the Philippines filed the present
petition. 6
The Issues
Petitioner alleges that the following errors were committed by
Respondent Court: 7
"I
Respondent Court erred in holding that the patent granted and
certificate of title issued to Respondent Morato cannot be
cancelled and annulled since the certificate of title becomes
indefeasible after one year from the issuance of the title.
II
Respondent Court erred in holding that the questioned land is part
of a disposable public land and not a foreshore land."
The Court's Ruling
The petition is meritorious.
First Issue: Indefeasibility of a Free Patent Title
In resolving the first issue against petitioner, Respondent Court
held: 8
". . . As ruled in Heirs of Gregorio Tengco vs. Heirs of Jose Alivalas,
168 SCRA 198. '. . . The rule is well-settled that an original
certificate of title issued on the strength of a homestead patent
partakes of the nature of a certificate of title issued in a judicial
proceeding, as long as the land disposed of is really paid of the
disposable land of the public domain, and becomes indefeasible
and incontrovertible upon the expiration of one year from the date
of promulgation of the order of the Director of Lands for the
issuance of the patent. (Republic v. Heirs of Carle, 105 Phil. 1227
(1959); Ingaran v. Ramelo, 107 Phil. 498 (1960); Lopez v. Padilla,
(G.R. No. L-27559, May 18, 1972, 45 SCRA 44). A homestead
patent, one registered under the Land Registration Act, becomes
as indefeasible as a Torrens Title. (Pamintuan v. San Agustin, 43
Phil. 558 (1982); El Hogar Filipino v. Olviga, 60 Phil. 17 (1934);
Duran v. Oliva, 113 Phil. 144 (1961); Pajomayo v. Manipon, G.R.
No. L-33676, June 30, 1971, 39 SCRA 676).' (p. 203).
Again, in Lopez vs. Court of Appeals, 169 SCRA 271, citing Iglesia
ni Cristo v. Hon. Judge, CFI of Nueva Ecija, Branch I, (123 SCRA
516 (1983) and Pajomayo, et al. v. Manipon, et al. (39 SCRA 676
(1971) held that once a homestead patent granted in accordance
with the Public Land Act is registered pursuant to Section 122 of
Act 496, the certificate of title issued in virtue of said patent has
the force and effect of a Torrens Title issued under the Land
Registration Act.
Indefeasibility of the title, however, may not bar the State, thru the
Solicitor General, from filing an action for reversion, as ruled in
Heirs of Gregorio Tengo v. Heirs of Jose Aliwalas, (supra), as
follows:
"But, as correctly pointed out by the respondent Court of Appeals,
Dr. Aliwalas' title to the property having become incontrovertible,
such may no longer be collaterally attacked. If indeed there had
been any fraud or misrepresentation in obtaining the title, an action
for reversion instituted by the Solicitor General would be the proper
remedy (Sec 101, C.A. No. 141; Director of Lands v. Jugado, G.R.
No. L-14702, May 21, 1961, 2 SCRA 32; Lopez v. Padilla, supra).'
(p. 204)."
Petitioner contends that the grant of Free Patent (IV-3) 275 and
the subsequent issuance of Original Certificate of Title No. P-
17789 to Respondent Josefina L. Morato were subject to the
conditions provided for in Commonwealth Act (CA) No. 141. It
alleges that on October 24, 1974, or nine (9) months and eight (8)
days after the grant of the patent, Respondent Morato, in "violation
of the terms of the patent, mortgaged a portion of the land" to
Respondent Nenita Co, who thereafter constructed a house
thereon. Likewise, on February 2, 1976 and "within the five-year
prohibitory period." Respondent Morato "leased a portion of the
land to Perfecto Advincula at a monthly rent of P100.00 who,
shortly thereafter, constructed a house of concrete materials on
the subject land." 9 Further, petitioner argues that the defense of
indefeasibility of title is "inaccurate." The original certificate of title
issued to Respondent Morato "contains the seeds of its own
cancellation": such certificate specifically states on its face that "it
is subject to the provisions of Sections 118, 119, 121, 122, 124
of CA No. 141, as amended." 10
Respondent Morato counters by stating that although a "portion of
the land was previously leased," it resulted "from the fact that
Perfecto Advincula built a warehouse in the subject land without
[her] prior consent." The mortgage executed over the improvement
"cannot be considered a violation of the said grant since it can
never affect the ownership." 11 She states further:
". . . the appeal of the petitioner was dismissed not because of the
principle of indefeasibility of title but mainly due to failure of the
latter to support and prove the alleged violations of respondent
Morato. The records of this case will readily show that although
petitioner was able to establish that Morato committed some acts
during the prohibitory period of 5 years, a perusal thereof will also
show that what petitioner was able to prove never constituted a
violation of the grant." 12
Respondent-Spouses Quilatan, on the other hand, state that the
mortgage contract they entered into with Respondent Morato "can
never be considered as [an] 'alienation' inasmuch as the
ownership over the property remains with the owner." 13 Besides,
it is the director of lands and not the Republic of the Philippines
who is the real party in interest in this case, contrary to the
provision of the Public Land Act which states that actions for
reversion should be instituted by the solicitor general in the name
of Republic of the Philippines. 14
We find for petitioner.
Quoted below are relevant sections of Commonwealth Act No.
141, otherwise known as the Public Land Act:
"Sec. 118. Except in favor of the Government or any of its
branches, units or institutions, or legally constituted banking
corporations, lands acquired under free patent or homestead
provisions shall not be subject to encumbrance or alienation from
the date of the approval of the application and for a term of five
years from and after the date of issuance of the patent or grant nor
shall they become liable to the satisfaction of any debt contracted
prior to the expiration of said period; but the improvements or
crops on the land may be mortgaged or pledged to qualified
persons, associations, or corporations.
No alienation, transfer, or conveyance of any homestead after five
years and before twenty-five years after issuance of title shall be
valid without the approval of the Secretary of Agriculture and
Natural Resources, which approval shall not be denied except on
constitutional and legal grounds. (As amended by Com. Act No.
456, approved June 8, 1939.)"
xxx xxx xxx
"Sec. 121. Except with the consent of the grantee and the approval
of the Secretary of Agriculture and Natural Resources, and solely
for educational, religious, or charitable purposes or for a right of
way, no corporation, association, or partnership may acquire or
have any right, title, interest, or property right whatsoever to any
land granted under the free patent, homestead, or individual sale
provisions of this Act or to any permanent improvement on such
land. (As amended by Com. Act No. 615, approved May 5, 1941)
Sec. 122. No land originally acquired in any manner under the
provisions of this Act, nor any permanent improvement on such
land, shall be encumbered, alienated or transferred, except to
persons, corporations, association, or partnerships who may
acquire lands of the public domain under this Act or to corporations
organized in the Philippines authorized therefore by their charters.
Except in cases of hereditary successions, no land or any portion
thereof originally acquired under the free patent, homestead, or
individual sale provisions of this Act, or any permanent
improvement on such land, shall be transferred or assigned to any
individual, nor shall such land or any permanent improvement
thereon be leased to such individual, when the area of said land,
added to that of his own, shall exceed one hundred and forty-four
hectares. Any transfer, assignment, or lease made in violation
hereto shall be null and void. (As amended by Com. Act No. 615,
Id.)"
xxx xxx xxx
"Sec. 124. Any acquisition, conveyance, alienation, transfer, or
other contract made or executed in violation of any of the
provisions of sections one hundred and eighteen, one hundred
and twenty, one hundred and twenty-one, one hundred and
twenty-two, and one hundred and twenty-three of this Act shall be
unlawful and null and void from its execution and shall produce the
effect of annulling and cancelling the grant, title, patent, or permit
originally issued, recognized or confirmed, actually or
presumptively, and cause the reversion of the property and its
improvements to the State." (Emphasis supplied.)
The foregoing legal provisions clearly proscribe the encumbrance
of a parcel of land acquired under a free patent or homestead
within five years from the grant of such patent. Furthermore, such
encumbrance results in the cancellation of the grant and the
reversion of the land to the public domain. Encumbrance has been
defined as "[a]nything that impairs the use or transfer of property;
anything which constitutes a burden on the title; a burden or
charge upon property; a claim on lien upon property." It may be a
"legal claim on an estate for the discharge of which the estate is
liable; an embarrassment of the estate or property so that it cannot
be disposed of without being subject to it; an estate, interest, or
right in lands, diminishing their value to the general owner; a
liability resting upon an estate." 15 Do the contracts of lease and
mortgage executed within five (5) years from the issuance of the
patent constitute an "encumbrance" and violate the terms and
conditions of such patent? Respondent Court answered in the
negative: 16
"From the evidence adduced by both parties, it has been proved
that the area of the portion of the land, subject matter of the lease
contract (Exh. 'B') executed by and between Perfecto Advincula
and Josefina L. Morato is only 10 x 12 square meters, whereas the
total area of the land granted to Morato is 1,265 square meters. It
is clear from this that the portion of the land leased by Advincula
does not significantly affect Morato's ownership and possession.
Above all, the circumstances under which the lease was executed
do not reflect a voluntary and blatant intent to violate the conditions
provided for in the patent issued in her favor. On the contrary,
Morato was compelled to enter into that contract of lease out of
sympathy and the goodness of her heart to accommodate a fellow
man. . . ."
It is indisputable, however, that Respondent Morato cannot fully
use or enjoy the land during the duration of the lease contract. This
restriction on the enjoyment of her property sufficiently meets the
definition of an encumbrance under Section 118 of the Public Land
Act, because such contract "impairs the use of the property" by the
grantee. In a contract of lease which is consensual, bilateral,
onerous and commutative, the owner temporarily grants the use
of his or her property to another who undertakes to pay rent
therefor. 17During the term of the lease, the grantee of the patent
cannot enjoy the beneficial use of the land leased. As already
observed, the Public Land Act does not permit a grantee of a free
patent from encumbering any portion of such land. Such
encumbrance is a ground for the nullification of the award.
Morato's resort to equity, i.e. that the lease was executed allegedly
out of the goodness of her heart without any intention of violating
the law, cannot help her. Equity, which has been aptly described
as "justice outside legality," is applied only in the absence of, and
never against, statutory law or judicial rules of procedure. Positive
rules prevail over all abstract arguments based on equity contra
legem. 18
Respondents failed to justify their position that the mortgage
should not be considered an encumbrance. Indeed, we do not find
any support for such contention. The questioned mortgage falls
squarely within the term "encumbrance" proscribed by Section 118
of the Public Land Act. 19 Verily, a mortgage constitutes a legal
limitation on the estate, and the foreclosure of such mortgage
would necessarily result in the auction of the property. 20
Even if only part of the property has been sold or alienated within
the prohibited period of five years from the issuance of the patent,
such alienation is a sufficient cause for the reversion of the whole
estate to the State. As a condition for the grant of a free patent to
an applicant, the law requires that the land should not be
encumbered, sold or alienated within five years from the issuance
of the patent. The sale or the alienation of part of the homestead
violates that condition. 21
The prohibition against the encumbrance lease and mortgage
included of a homestead which, by analogy applies to a free
patent, is mandated by the rationale for the grant, viz.: 22
"It is well-known that the homestead laws were designed to
distribute disposable agricultural lots of the State to land-destitute
citizens for their home and cultivation. Pursuant to such
benevolent intention the State prohibits the sale or encumbrance
of the homestead (Section 116) within five years after the grant of
the patent. After that five-year period the law impliedly permits
alienation of the homestead; but in line with the primordial purpose
to favor the homesteader and his family the statute provides that
such alienation or conveyance (Section 117) shall be subject to
the right of repurchase by the homesteader, his widow or heirs
within five years. This section 117 is undoubtedly a complement of
section 116. It aims to preserve and keep in the family of the
homesteader that portion of public land which the State had
gratuitously given to him. It would, therefore, be in keeping with
this fundamental idea to hold, as we hold, that the right to
repurchase exists not only when the original homesteader makes
the conveyance, but also when it is made by his widow or heirs.
This construction is clearly deducible from the terms of the
statute." Cdpr
By express provision of Section 118 of Commonwealth Act
141 and in conformity with the policy of the law, any transfer or
alienation of a free patent or homestead within five years from the
issuance of the patent is proscribed. Such transfer nullifies said
alienation and constitutes a cause for the reversion of the property
to the State.
The prohibition against any alienation or encumbrance of the land
grant is a proviso attached to the approval of every
application. 23 Prior to the fulfillment of the requirements of law,
Respondent Morato had only an inchoate right to the property;
such property remained part of the public domain and, therefore,
not susceptible to alienation or encumbrance. Conversely, when a
"homesteader has complied with all the terms and conditions
which entitled him to a patent for [a] particular tract of public land,
he acquires a vested interest therein and has to be regarded an
equitable owner thereof." 24 However, for Respondent Morato's
title of ownership over the patented land to be perfected, she
should have complied with the requirements of the law, one of
which was to keep the property for herself and her family within
the prescribed period of five (5) years. Prior to the fulfillment of all
requirements of the law, Respondent Morato's title over the
property was incomplete. Accordingly, if the requirements are not
complied with, the State as the grantor could petition for the
annulment of the patent and the cancellation of the title.
Respondent Morato cannot use the doctrine of the indefeasibility
of her Torrens title to bar the state from questioning its transfer or
encumbrance. The certificate of title issued to her clearly stipulated
that its award was "subject to the conditions provided for in
Sections 118, 119, 121, 122 and 124 of Commonwealth Act (CA)
No. 141." Because she violated Section 118, the reversion of the
property to the public domain necessarily follows, pursuant to
Section 124.
Second Issue: Foreshore Land
Reverts to the Public Domain
There is yet another reason for granting this petition.
Although Respondent Court found that the subject land was
foreshore land, it nevertheless sustained the award thereof to
Respondent Morato: 25
"First of all, the issue here is whether the land in question, is really
part of the foreshore lands. The Supreme Court defines foreshore
land in the case of Republic vs. Alagad, 169 SCRA 455, 464, as
follows:
'Otherwise, where the rise in water level is due to, the
'extraordinary' action of nature, rainful, for instance, the portions
inundated thereby are not considered part of the bed or basin of
the body of water in question. It cannot therefore be said to be
foreshore land but land outside of the public dominion, and land
capable of registration as private property. LLphil
A foreshore land, on the other hand has been defined as follows:
'. . . that part of (the land) which is between high and low water and
left dry by the flux and reflux of the tides . . . (Republic vs. C.A.,
Nos. L-43105, L-43190, August 31, 1984, 131 SCRA 532;
Government vs. Colegio de San Jose, 53 Phil 423)
The strip of land that lies between the high and low water marks
and that is alternatively wet and dry according to the flow of the
tide. (Rep. vs. CA, supra, 539).'
The factual findings of the lower court regarding the nature of the
parcel of land in question reads:
'Evidence disclose that the marginal area of the land radically
changed sometime in 1937 up to 1955 due to a strong earthquake
followed by frequent storms eventually eroding the land. From
1955 to 1968, however, gradual reclamation was undertaken by
the lumber company owned by the Moratos. Having thus restored
the land thru mostly human hands employed by the lumber
company, the area continued to be utilized by the owner of the
sawmill up to the time of his death in 1965. On or about March 17,
1973, there again was a strong earthquake unfortunately causing
destruction to hundreds of residential houses fronting the Calauag
Bay including the Santiago Building, a cinema house constructed
of concrete materials. The catastrophe totally caused the sinking
of a concrete bridge at Sumulong river also in the municipality of
Calauag, Quezon.
On November 13, 1977 a typhoon code named 'Unding' wrought
havoc as it lashed the main land of Calauag, Quezon causing
again great erosion this time than that which the area suffered in
1937. The Court noted with the significance of the newspaper
clipping entitled 'Baryo ng Mangingisda Kinain ng Dagat' (Exh.
'11').
xxx xxx xxx
Evidently this was the condition of the land when on or about
December 5, 1972 defendant Josefina L. Morato filed with the
Bureau of Lands her free patent application. The defendant
Josefina Morato having taken possession of the land after the
demise of Don Tomas Morato, she introduced improvement and
continued developing the area, planted it to coconut trees. Having
applied for a free patent, defendant had the land area surveyed
and an approved plan (Exh. '9') based on the cadastral survey as
early as 1927 (Exh. '10') was secured. The area was declared for
taxation purposes in the name of defendant Josefina Morato
denominated as Tax Declaration No. 4115 (Exh. '8') and the
corresponding realty taxes religiously paid as shown by Exh. '8-A'.
(pp. 12-14, DECISION).
Being supported by substantial evidence and for failure of the
appellant to show cause which would warrant disturbance, the
afore-cited findings of the lower court, must be respected."
Petitioner correctly contends, however, that Private Respondent
Morato cannot own foreshore land:
"Through the encroachment or erosion by the ebb and flow of the
tide, a portion of the subject land was invaded by the waves and
sea advances. During high tide, at least half of the land (632.5
square meters) is 6 feet deep under water and three (3) feet deep
during low tide. The Calauag Bay shore has extended up to a
portion of the questioned land.
While at the time of the grant of free patent to respondent Morato,
the land was not reached by the water, however, due to gradual
sinking of the land caused by natural calamities, the sea advances
had permanently invaded a portion of subject land. As disclosed
at the trial, through the testimony of the court-appointed
commissioner, Engr. Abraham B. Pili, the land was under water
during high tide in the month of August 1978. The water margin
covers half of the property, but during low tide, the water is about
a kilometer (TSN, July 19, 1979, p. 12). Also, in 1974, after the
grant of the patent, the land was covered with vegetation, but it
disappeared in 1978 when the land was reached by the tides (Exh.
'E-1'; 'E-14'). In fact, in its decision dated December 28, 1983, the
lower court observed that the erosion of the land was caused by
natural calamities that struck the place in 1977 (Cf. Decision, pp.
17-18)." 26
Respondent-Spouses Quilatan argue, however, that it is "unfair
and unjust if Josefina Morato will be deprived of the whole property
just because a portion thereof was immersed in water for reasons
not her own doing." 27
As a general rule, findings of facts of the Court of Appeals are
binding and conclusive upon this Court, unless such factual
findings are palpably unsupported by the evidence on record or
unless the judgment itself is based on a misapprehension of
facts. 28 The application for a free patent was made in 1972. From
the undisputed factual findings of the Court of Appeals, however,
the land has since become foreshore. Accordingly, it can no longer
be subject of a free patent under the Public Land Act. Government
of the Philippine Islands vs. Cabagis 29 explained the rationale
for this proscription:
"Article 339, subsection 1, of the Civil Code, reads:
'Art. 339. Property of public ownership is
'1. That devoted to public use, such as roads, canals, rivers,
torrents, ports and bridges constructed by the State, riverbanks,
shores, roadsteads, and that of a similar character.'
xxx xxx xxx
Article 1, case 3, of the Law of Waters of August 3, 1866, provides
as follows:
'ARTICLE 1. The following are part of the national domain open to
public use:
xxx xxx xxx
'3. The Shores. By the shore is understood that space covered and
uncovered by the movement of the tide. Its interior or terrestrial
limit is the line reached by the highest equinoctal tides. Where the
tides are not appreciable, the shore begins on the land side at the
line reached by the sea during ordinary storms or tempests.
In the case of Aragon vs. Insular Government (19 Phil. 223), with
reference to article 339 of the Civil Code just quoted, this Court
said:
'We should not be understood, by this decision, to hold that in a
case of gradual encroachment or erosion by the ebb and flow of
the tide, private property may not become 'property of public
ownership,' as defined in article 339 of the code, where it appear
that the owner has to all intents and purposes abandoned it and
permitted it to be totally destroyed, so as to become a part of the
'playa' (shore of the sea), 'rada' (roadstead), or the like. . . .'
In the Enciclopedia Juridica Espaola, volume XII, page 558, we
read the following:
'With relative frequency the opposite phenomenon occurs; that is,
the sea advances and private properties are permanently invaded
by the waves, and in this case they become part of the shore or
beach. They then pass to the public domain, but the owner thus
dispossessed does not retain any right to the natural products
resulting from their new nature; it is a de facto case of eminent
domain, and not subject to indemnity.'"
In comparison, Article 420 of the Civil Code provides:
"Art. 420. The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers,
torrents, ports and bridges constructed by the State, banks,
shores, roadsteads, and others of similar character;
(2) Those which belong to the State, without being for public use,
and are intended for some public service or for the development
of the national wealth."
When the sea moved towards the estate and the tide invaded it,
the invaded property became foreshore land and passed to the
realm of the public domain. In fact, the Court in Government
vs. Cabagis 30 annulled the registration of land subject of
cadastral proceedings when the parcel subsequently became
foreshore land. 31 In another case, the Court voided the
registration decree of a trial court and held that said court had no
jurisdiction to award foreshore land to any private person or
entity. 32 The subject land in this case, being foreshore land,
should therefore be returned to the public domain.
WHEREFORE, the petition is GRANTED. This Court hereby
REVERSES and SETS ASIDE the assailed Decision of
Respondent Court and ORDERS the CANCELLATION of Free
Patent No. (IV-3) 275 issued to Respondent Morato and the
subsequent Original Certificate of Title No. P-17789. The subject
land therefore REVERTS to the State. No costs. llcd
SO ORDERED.
||| (Republic v. Court of Appeals, G.R. No. 100709, [November 14,
1997], 346 PHIL 637-655)
Province of Zamboanga del Norte v. City of Zamboanga 22 SCRA
1334
Chaves v. Publio Estates 384 SCRA 152
We can now summarize our conclusions as follows;
1. The 157.84 hectares of reclaimed lands comprising the
Freedom Islands, now covered by certificates of title in the name
of PEA, are alienable lands of the public domain. PEA may lease
these lands to private corporations but may not sell or transfer
ownership of these lands to private corporations. PEA may only
sell these lands to Philippine citizens, subject to the ownership
limitations in the 1987 Constitution and existing laws.
2. The 592.15 hectares of submerged areas of Manila Bay remain
inalienable natural resources of the public domain until classified
as alienable or disposable lands open to disposition and declared
no longer needed for public service. The government can make
such classification and declaration only after PEA has reclaimed
these submerged areas. Only then can these lands qualify as
agricultural lands of the public domain, which are the only natural
resources the government can alienate. In their present state, the
592.15 hectares of submerged areas are inalienable and outside
the commerce of man.
3. Since the Amended JVA seeks to transfer to AMARI, a private
corporation, ownership of 77.34 hectares 110 of the Freedom
Islands, such transfer is void for being contrary to Section 3, Article
XII of the 1987 Constitution which prohibits private corporations
from acquiring any kind of alienable land of the public domain.
4. Since the Amended JVA also seeks to transfer to AMARI
ownership of 290.156 hectares 111 of still submerged areas of
Manila Bay, such transfer is void for being contrary to Section 2,
Article XII of the 1987 Constitution which prohibits the alienation of
natural resources other than agricultural lands of the public
domain. PEA may reclaim these submerged areas. Thereafter, the
government can classify the reclaimed lands as alienable or
disposable, and further declare them no longer needed for public
service. Still, the transfer of such reclaimed alienable lands of the
public domain to AMARI will be void in view of Section 3, Article
XII of the 1987 Constitution which prohibits private corporations
from acquiring any kind of alienable land of the public domain.
||| (Chavez v. Public Estates Authority, G.R. No. 133250, [July 9,
2002], 433 PHIL 506-592)
Villarico v. Sarmiento 442 SCAR 110
THIRD DIVISION
[G.R. No. 136438. November 11, 2004.]
TEOFILO C. VILLARICO, petitioner, vs. VIVENCIO
SARMIENTO, SPOUSES BESSIE SARMIENTO-DEL MUNDO &
BETH DEL MUNDO, ANDOK'S LITSON CORPORATION and
MARITES' CARINDERIA, respondents.
DECISION
SANDOVAL-GUTIERREZ, J p:
Before us is a petition for review on certiorari of the Decision 1 of
the Court of Appeals dated December 7, 1998 in CA-G.R. CV No.
54883, affirming in toto the Decision 2 of the Regional Trial Court
(RTC) of Paraaque City, Branch 259, dated November 14, 1996,
in Civil Case No. 95-044.
The facts of this case, as gleaned from the findings of the Court of
Appeals, are:
Teofilo C. Villarico, petitioner, is the owner of a lot in La Huerta,
Paraaque City, Metro Manila with an area of sixty-six (66) square
meters and covered by Transfer Certificate of Title (T.C.T.) No.
95453 issued by the Registry of Deeds, same city.
Petitioner's lot is separated from the Ninoy Aquino Avenue
(highway) by a strip of land belonging to the government. As this
highway was elevated by four (4) meters and therefore higher than
the adjoining areas, the Department of Public Works and
Highways (DPWH) constructed stairways at several portions of
this strip of public land to enable the people to have access to the
highway. aIcCTA
Sometime in 1991, Vivencio Sarmiento, his daughter Bessie
Sarmiento and her husband Beth Del Mundo, respondents herein,
had a building constructed on a portion of said government land.
In November that same year, a part thereof was occupied by
Andok's Litson Corporation and Marites' Carinderia, also
impleaded as respondents.
In 1993, by means of a Deed of Exchange of Real Property,
petitioner acquired a 74.30 square meter portion of the same area
owned by the government. The property was registered in his
name as T.C.T. No. 74430 in the Registry of Deeds of Paraaque
City.
In 1995, petitioner filed with the RTC, Branch 259, Paraaque City,
a complaint for accion publiciana against respondents, docketed
as Civil Case No. 95-044. He alleged inter alia that respondents'
structures on the government land closed his "right of way" to the
Ninoy Aquino Avenue; and encroached on a portion of his lot
covered by T.C.T. No. 74430.
Respondents, in their answer, specifically denied petitioner's
allegations, claiming that they have been issued licenses and
permits by Paraaque City to construct their buildings on the area;
and that petitioner has no right over the subject property as it
belongs to the government.
After trial, the RTC rendered its Decision, the dispositive portion of
which reads:
"WHEREFORE, premises considered, judgment is hereby
rendered:
1. Declaring the defendants to have a better right of possession
over the subject land except the portion thereof covered by
Transfer Certificate of Title No. 74430 of the Register of Deeds of
Paraaque;
2. Ordering the defendants to vacate the portion of the subject
premises described in Transfer Certificate of Title No. 74430 and
gives its possession to plaintiff; and
3. Dismissing the claim for damages of the plaintiff against the
defendants, and likewise dismissing the claim for attorney's fees
of the latter against the former. CaEATI
Without pronouncement as to costs.
SO ORDERED." 3
The trial court found that petitioner has never been in possession
of any portion of the public land in question. On the contrary, the
defendants are the ones who have been in actual possession of
the area. According to the trial court, petitioner was not deprived
of his "right of way" as he could use the Kapitan Tinoy Street as
passageway to the highway.
On appeal by petitioner, the Court of Appeals issued its Decision
affirming the trial court's Decision in toto, thus:
"WHEREFORE, the judgment hereby appealed from is hereby
AFFIRMED in toto, with costs against the plaintiff-appellant.
SO ORDERED." 4
In this petition, petitioner ascribes to the Court of Appeals the
following assignments of error:
"I
THE FINDINGS OF FACT OF THE HON. COURT OF APPEALS
CONTAINED A CONCLUSION WITHOUT CITATION OF
SPECIFIC EVIDENCE ON WHICH THE SAME WAS BASED.
II
THE HON. COURT OF APPEALS ERRED IN CONSIDERING
THAT THE ONLY ISSUE IN THIS CASE IS WHETHER OR NOT
THE PLAINTIFF-APPELLANT HAS ACQUIRED A RIGHT OF
WAY OVER THE LAND OF THE GOVERNMENT WHICH IS
BETWEEN HIS PROPERTY AND THE NINOY AQUINO
AVENUE. AcIaST
III
THE HON. COURT OF APPEALS ERRED IN CONCLUDING
THAT ACCION PUBLICIANA IS NOT THE PROPER REMEDY IN
THE CASE AT BAR.
IV
THE HON. COURT OF APPEALS ERRED IN CONCLUDING
THAT THE EXISTENCE OF THE PLAINTIFF-APPELLANT'S
RIGHT OF WAY DOES NOT CARRY POSSESSION OVER THE
SAME.
V
THE HON. COURT OF APPEALS ERRED IN NOT RESOLVING
THE ISSUE OF WHO HAS THE BETTER RIGHT OF
POSSESSION OVER THE SUBJECT LAND BETWEEN THE
PLAINTIFF-APPELLANT AND THE DEFENDANT-
APPELLEES." 5
In their comment, respondents maintain that the Court of Appeals
did not err in ruling that petitioner's action for accion publiciana is
not the proper remedy in asserting his "right of way" on a lot owned
by the government.
Here, petitioner claims that respondents, by constructing their
buildings on the lot in question, have deprived him of his "right of
way" and his right of possession over a considerable portion of the
same lot, which portion is covered by his T.C.T. No. 74430 he
acquired by means of exchange of real property.
It is not disputed that the lot on which petitioner's alleged "right of
way" exists belongs to the state or property of public dominion.
Property of public dominion is defined by Article 420 of the Civil
Code as follows:
"ART. 420. The following things are property of public dominion:
(1) Those intended for public use such as roads, canals, rivers,
torrents, ports and bridges constructed by the State, banks,
shores, roadsteads, and other of similar character.
(2) Those which belong to the State, without being for public use,
and are intended for some public service or for the development
of the national wealth."
Public use is "use that is not confined to privileged individuals, but
is open to the indefinite public." 6 Records show that the lot on
which the stairways were built is for the use of the people as
passageway to the highway. Consequently, it is a property of
public dominion. DTAHEC
Property of public dominion is outside the commerce of man and
hence it: (1) cannot be alienated or leased or otherwise be the
subject matter of contracts; (2) cannot be acquired by prescription
against the State; (3) is not subject to attachment and execution;
and (4) cannot be burdened by any voluntary easement. 7
Considering that the lot on which the stairways were constructed
is a property of public dominion, it can not be burdened by a
voluntary easement of right of way in favor of herein petitioner. In
fact, its use by the public is by mere tolerance of the government
through the DPWH. Petitioner cannot appropriate it for himself.
Verily, he can not claim any right of possession over it. This is clear
from Article 530 of the Civil Code which provides:
"ART. 530. Only things and rights which are susceptible of being
appropriated may be the object of possession."
Accordingly, both the trial court and the Court of Appeals erred in
ruling that respondents have better right of possession over the
subject lot.
However, the trial court and the Court of Appeals found that
defendants' buildings were constructed on the portion of the same
lot now covered by T.C.T. No. 74430 in petitioner's name. Being
its owner, he is entitled to its possession.
WHEREFORE, the petition is DENIED. The assailed Decision of
the Court of Appeals dated December 7, 1998 in CA-G.R. CV No.
54883 is AFFIRMED with MODIFICATION in the sense that
neither petitioner nor respondents have a right of possession over
the disputed lot where the stairways were built as it is a property
of public dominion. Costs against petitioner.
SO ORDERED.
||| (Villarico v. Sarmiento, G.R. No. 136438, [November 11, 2004],
484 PHIL 724-729)
Title 2 Ownership
A. Concept of Ownership
1. Characteristics of Ownership
2. Rights Included in Ownership
CASES:
Javier v. Veridiano II 237 SCRA 565
Bustos v. Court of Appeals 350 SCRA 155
Heirs of Roman Soriano v. Court of Appeals 363 SCRA
87
Garcia v. Court of Appeals 312 SCRA 180
Rodil Enterprises, Inc. v. Court of Appeals 371 SCRA 79
Isaguirre v. De Lara 332 SCRA 803
Custodio v. Court of Appeals 253 SCRA 483
Abejaron v. Nabasa 359 SCRA 47
3. Principle of Self-help (Art. 429) and State of Necessity
(Art. 432)
CASES:
German Management & Services, Inc. v. Court of Appeals 177
SCRA 495
THIRD DIVISION
[G.R. No. 76216. September 14, 1989.]
GERMAN MANAGEMENT & SERVICES,
INC., petitioner, vs. HON. COURT OF APPEALS and ORLANDO
GERNALE, respondents.
[G.R. No. 76217. September 14, 1989.]
GERMAN MANAGEMENT & SERVICES,
INC., petitioner, vs. HON. COURT OF APPEALS and ERNESTO
VILLEZA, respondents.
Alam, Verano & Associates for petitioner.
Francisco D. Lozano for private respondents.
SYLLABUS
1. CONSTITUTIONAL LAW; BILL OF RIGHTS; DUE PROCESS;
NOT DENIED WHERE A PARTY WAS AFFORDED
OPPORTUNITY TO BE HEARD. The Court of Appeals need
not require petitioner to file an answer for due process to exist. The
comment filed by petitioner on February 26, 1986 has sufficiently
addressed the issues presented in the petition for review filed by
private respondents before the Court of Appeals. Having heard
both parties, the Appellate Court need not await or require any
other additional pleading. Moreover, the fact that petitioner was
heard by the Court of Appeals on its motion for reconsideration
negates any violation of due process.
2. REMEDIAL LAW; SPECIAL CIVIL ACTION; FORCIBLE
ENTRY; CAN BE COMMENCED BY THE ACTUAL
POSSESSORS OF THE LAND. Notwithstanding petitioner's
claim that it was duly authorized by the owners to develop the
subject property, private respondents, as actual possessors, can
commence a forcible entry case against petitioner because
ownership is not in issue. Forcible entry is merely a quieting
process and never determines the actual title to an estate. Title is
not involved.
3. ID.; ID.; ID.; A PARTY IN PRIOR POSSESSION CAN
RECOVER OCCUPATION OF THE PROPERTY EVEN AGAINST
THE OWNER HIMSELF. It must be stated that regardless of
the actual condition of the title to the property, the party in
peaceable quiet possession shall not be turned out by a strong
hand, violence or terror. Thus, a party who can prove prior
possession can recover such possession even against the owner
himself. Whatever may be the character of his prior possession, if
he has in his favor priority in time, he has the security that entitles
him to remain on the property until he is lawfully ejected by a
person having a better right by accion publiciana or accion
reivindicatoria.
4. CIVIL LAW; OWNERSHIP; DOCTRINE OF SELF-HELP;
AVAILABLE ONLY AT THE TIME OF ACTUAL OR
THREATENED DISPOSSESSION. The doctrine of self-help
enunciated in Article 429 of the New Civil Code. Such justification
is unavailing because the doctrine of self-help can only be
exercised at the time of actual or threatened dispossession which
is absent in the case at bar. When possession has already been
lost, the owner must resort to judicial process for the recovery of
property. This is clear from Article 536 of the Civil Code which
states, "(I)n no case may possession be acquired through force or
intimidation as long as there is a possessor who objects thereto.
He who believes that he has an action or right to deprive another
of the holding of a thing, must invoke the aid of the competent
court, if the holder should refuse to deliver the thing."
DECISION
FERNAN, C.J p:
Spouses Cynthia Cuyegkeng Jose and Manuel Rene Jose,
residents of Pennsylvania, Philadelphia, USA are the owners of a
parcel of land situated in Sitio Inarawan, San Isidro, Antipolo,
Rizal, with an area of 232,942 square meters and covered by TCT
No. 50023 of the Register of Deeds of the province of Rizal issued
on September 11, 1980 which canceled TCT No. 56762/ T-560.
The land was originally registered on August 5, 1948 in the Office
of the Register of Deeds of Rizal as OCT No. 19, pursuant to a
Homestead Patent granted by the President of the Philippines on
July 27, 1948, under Act No. 141.
On February 26, 1982, the spouses Jose executed a special
power of attorney authorizing petitioner German Management
Services to develop their property covered by TCT No. 50023 into
a residential subdivision. Consequently, petitioner on February 9,
1983 obtained Development Permit No. 00424 from the Human
Settlements Regulatory Commission for said development.
Finding that part of the property was occupied by private
respondents and twenty other persons, petitioner advised the
occupants to vacate the premises but the latter refused.
Nevertheless, petitioner proceeded with the development of the
subject property which included the portions occupied and
cultivated by private respondents. prcd
Private respondents filed an action for forcible entry against
petitioner before the Municipal Trial Court of Antipolo, Rizal,
alleging that they are mountainside farmers of Sitio Inarawan, San
Isidro, Antipolo, Rizal and members of the Concerned Citizens of
Farmer's Association; that they have occupied and tilled their
farmholdings some twelve to fifteen years prior to the promulgation
of P. D. No. 27; that during the first week of August 1983,
petitioner, under a permit from the Office of the Provincial
Governor of Rizal, was allowed to improve the Barangay Road at
Sitio Inarawan, San Isidro, Antipolo, Rizal at its expense, subject
to the condition that it shall secure the needed right of way from
the owners of the lot to be affected; that on August 15, 1983 and
thereafter, petitioner deprived private respondents of their property
without due process of law by: (1) forcibly removing and destroying
the barbed wire fence enclosing their farmholdings without notice;
(2) bulldozing the rice, corn, fruit bearing trees and other crops of
private respondents by means of force, violence and intimidation,
in violation of P.D. 1038 and (3) trespassing, coercing and
threatening to harass, remove and eject private respondents from
their respective farmholdings in violation of P.D. Nos. 316, 583,
815, and 1028. 1
On January 7, 1985, the Municipal Trial Court dismissed private
respondents' complaint for forcible entry. 2 On appeal, the
Regional Trial Court of Antipolo, Rizal, Branch LXXI sustained the
dismissal by the Municipal Trial Court. 3
Private respondents then filed a petition for review with the Court
of Appeals. On July 24, 1986, said court gave due course to their
petition and reversed the decisions of the Municipal Trial Court and
the Regional Trial Court. 4
The Appellate Court held that since private respondents were in
actual possession of the property at the time they were forcibly
ejected by petitioner, private respondents have a right to
commence an action for forcible entry regardless of the legality or
illegality of possession. 5 Petitioner moved to reconsider but the
same was denied by the Appellate Court in its resolution dated
September 26, 1986. 6
Hence, this recourse.
The issue in this case is whether or not the Court of Appeals
denied due process to petitioner when it reversed the decision of
the court a quo without giving petitioner the opportunity to file its
answer and whether or not private respondents are entitled to file
a forcible entry case against petitioner. 7
We affirm. The Court of Appeals need not require petitioner to file
an answer for due process to exist. The comment filed by
petitioner on February 26, 1986 has sufficiently addressed the
issues presented in the petition for review filed by private
respondents before the Court of Appeals. Having heard both
parties, the Appellate Court need not await or require any other
additional pleading. Moreover, the fact that petitioner was heard
by the Court of Appeals on its motion for reconsideration negates
any violation of due process.
Notwithstanding petitioner's claim that it was duly authorized by
the owners to develop the subject property, private respondents,
as actual possessors, can commence a forcible entry case against
petitioner because ownership is not in issue. Forcible entry is
merely a quieting process and never determines the actual title to
an estate. Title is not involved. 8
In the case at bar, it is undisputed that at the time petitioner
entered the property, private respondents were already in
possession thereof. There is no evidence that the spouses Jose
were ever in possession of the subject property. On the contrary,
private respondents' peaceable possession was manifested by the
fact that they even planted rice, corn and fruit bearing trees twelve
to fifteen years prior to petitioner's act of destroying their crops.
Although admittedly petitioner may validly claim ownership based
on the muniments of title it presented, such evidence does not
responsively address the issue of prior actual possession raised in
a forcible entry case. It must be stated that regardless of the actual
condition of the title to the property, the party in peaceable quiet
possession shall not be turned out by a strong hand, violence or
terror. 9 Thus, a party who can prove prior possession can recover
such possession even against the owner himself. Whatever may
be the character of his prior possession, if he has in his favor
priority in time, he has the security that entitles him to remain on
the property until he is lawfully ejected by a person having a better
right by accion publiciana or accion reivindicatoria. 10
Both the Municipal Trial Court and the Regional Trial Court have
rationalized petitioner's drastic action of bulldozing and destroying
the crops of private respondents on the basis of the doctrine of
self-help enunciated in Article 429 of the New Civil Code. 11 Such
justification is unavailing because the doctrine of self-help can only
be exercised at the time of actual or threatened dispossession
which is absent in the case at bar. When possession has already
been lost, the owner must resort to judicial process for the recovery
of property. This is clear from Article 536 of the Civil Code which
states, "(I)n no case may possession be acquired through force or
intimidation as long as there is a possessor who objects thereto.
He who believes that he has an action or right to deprive another
of the holding of a thing, must invoke the aid of the competent
court, if the holder should refuse to deliver the thing."
WHEREFORE, the Court resolved to DENY the instant petition.
The decision of the Court of Appeals dated July 24, 1986 is hereby
AFFIRMED. Costs against petitioner.
SO ORDERED.
||| (German Management & Services, Inc. v. Court of Appeals,
G.R. No. 76216, 76217, [September 14, 1989], 258 PHIL 289-294)
Caisip v. People 36 SCRA 17
FIRST DIVISION
[G.R. No. L-28716. November 18, 1970.]
FELIX CAISIP, IGNACIO ROJALES and FEDERICO
VILLADELREY, petitioners, vs. THE PEOPLE OF THE
PHILIPPINES and THE COURT OF APPEALS, respondents.
Godofredo F. Trajano & Rafael A. Francisco for petitioners.
Solicitor General Felix V. Makasiar, Assistant Solicitor General
Antonio G. Ibarra and Solicitor Conrado T. Limcaoco for
respondents.
DECISION
CONCEPCION, J p:
This case is before Us upon petition of defendants Felix Caisip,
Ignacio Rojales and Federico Villadelrey, for review on certiorari
of a decision of the Court of Appeals which affirmed that of the
Court of First Instance of Batangas, convicting them of the crime
of Grave Coercion, with which they are charged, and sentencing
each to four (4) months and one (1) day of arresto mayor and to
pay a fine of P200.00, with subsidiary imprisonment in case of
insolvency, not to exceed one-third of the principal penalty, as well
as one-third of the costs.
As set forth in the trial court's decision, the background of the
present case is this:
"The complainant Gloria Cabalag is the wife of Marcelino Guevarra
who cultivated a parcel of land known as Lot 105-A of Hacienda
Palico situated in sitio Bote-bote, barrio Tampisao, Nasugbu,
Batangas. The said parcel of land used to be tenanted by the
deceased father of the complainant. Hacienda Palico is owned by
Roxas y Cia. and administered by Antonio Chuidian. The overseer
of the said hacienda is Felix Caisip, one of the accused herein.
Even before the occurrence of the incident presently involved,
there had been a series of misunderstandings and litigations
involving the complainant and her husband, on one hand, and the
men of Hacienda Palico on the other.
"It appears that on December 23, 1957, Marcelino Guevarra filed
an action with the Court of Agrarian Relations seeking recognition
as a lawful tenant of Roxas y Cia. over Lot No. 105-A of Hacienda
Palico. In a decision dated February 22, 1958, the Court of
Agrarian Relations declared it has no jurisdiction over the case,
inasmuch as Guevarra is not a tenant on the said parcel of land.
An appeal was taken by Guevarra to the Supreme Court, but the
appeal was dismissed in a resolution dated April 10, 1958.
"On May 17, 1958, Roxas y Cia. filed an action against Marcelino
Guevarra in the justice of the peace court of Nasugbu, Batangas,
for forcible entry, praying therein that Guevarra be ejected from
the premises of Lot No. 105-A. After due hearing, the said Court
in a decision dated May 2, 1959 ordered Guevarra to vacate the
lot and to pay damages and accrued rentals. A writ of execution
was issued by Justice of the Peace Rodolfo A. Castillo of
Nasugbu, which was served on Guevarra on June 6, 1959, and
the return of which was made by Deputy Sheriff Leonardo R.
Aquino of this Court on June 23, 1959 (Exhibit `10'). The writ
recites among other things that the possession of the land was
delivered to the Roxas y Cia. thru Felix Caisip, the overseer, and
Guevarra was given twenty days from June 6, 1959 within which
to leave the premises."
The record before Us does not explain why said decision was
executed. According to the complainant, her husband's counsel
had appealed from said decision. The justice of the peace who
rendered it, Hon. Rodolfo Castillo, said that there really had been
an attempt to appeal, which was not given due course because
the reglementary period therefor had expired; that a motion to
reconsider his order to this effect was denied by him; and that a
second motion for reconsideration was "still
pending consideration," and it was October 19, 1959 when such
testimony was given.
Continuing the narration of the antecedent facts, His Honor, the
Trial Judge, added:
"On June 15, 1959, some trouble occurred between the
complainant and Caisip regarding the cutting of sugar cane on Lot
105-A. The following day June 16, 1959, the complainant allegedly
again entered the premises of Lot 105-A and refused to be driven
out by Felix Caisip. Due to the aforementioned incidents, Gloria
Cabalag was charged in the justice of the peace court of Nasugbu,
Batangas, with grave coercion for the incident of June 15, 1959,
docketed in the said court as Criminal Case No. 968 (Exhibit `3');
and with the crime of unjust vexation for the incident of June 16,
1959, docketed in the said court as Criminal Case No. 970. Both
cases, however, were filed only on June 25, 1959."
In other words, these criminal cases, Nos. 968 and 970, against
Gloria Cabalag, were filed eight (8) days after the incident involved
in the case at bar. It is, also, noteworthy that both cases were
on motion of the prosecution, filed after a reinvestigation thereof
provisionally dismissed, on November 8, 1960, by the Court of
First Instance of Batangas, upon the ground "that the evidence of
record . . . are insufficient to prove the guilt of the accused beyond
reasonable doubt." The decision of said court, in the case at bar,
goes on to say:
"It further appears that due to the tenacious attitude of Gloria
Cabalag to remain in the premises, Caisip sought the help of the
chief of police of Nasugbu who advised him to see Deputy Sheriff
Aquino about the matter. The latter, however, informed Caisip that
he could not act on the request to eject Gloria Cabalag and to stop
her from what she was doing without a proper court order. Caisip
then consulted Antonio Chuidian, the hacienda administrator, who,
in turn, went to the chief of police and requested for the detail of
policemen in sitio Bote-bote. The chief of police, acting on said
request, assigned the accused Ignacio Rojales and Federico
Villadelrey, police sergeant and police corporal, respectively, of
the Nasugbu Police Force, to sitio Bote-bote." 1
On June 17, 1959, at about 5:00 p.m., Gloria Cabalag was seen
weeding the portion of Lot 105-A which was a ricefield. Appellant
Caisip approached her and bade her to leave, but she refused to
do so, alleging that she and her husband had the right to stay there
and that the crops thereon belong to them. She having stuck to
this attitude, even when he threatened to call the police, Caisip
went to his co-defendants, Sgt. Rojales and Cpl. Villadelrey, both
of the local police, who were some distance away, and brought
them with him. Rojales told Gloria, who was then in a squatting
position, to stop weeding. As Gloria insisted on her right to stay in
said lot, Rojales grabbed her right hand and, twisting the same,
wrested therefrom the trowel she was holding. Thereupon,
Villadelrey held her left hand and, together with Rojales, forcibly
dragged her northward towards a forested area, where there
was a banana plantation as Caisip stood nearby, with a drawn
gun.
Inasmuch as Gloria shouted "Ina ko po! Ina ko po!" 2 her
neighbors, Librada Dulutan, followed, soon later, by Francisca
Andino, came and asked the policemen why they were dragging
her. The policemen having answered that they would take Gloria
to town which was on the west Francisca Andino pleaded
that Gloria be released, saying that, if their purpose was as stated
by them, she (Gloria) would willingly go with them. By this time,
Gloria had already been dragged about eight meters and her
dress, as well as her blouse 3were torn. She then agreed to
proceed westward to the municipal building, and asked to be
allowed to pass by her house, within Lot 105-A, in order to breast-
feed her nursing infant, but, the request was turned down. As they
passed, soon later, near the house of Zoilo Rivera, head of the
tenant organization to which she was affiliated, in the barrio of
Camachilihan, Gloria called out for him, whereupon, he went down
the house and accompanied them to the municipal building. Upon
arrival thereat, Rojales and Villadelrey turned her over to the
policeman on duty, and then departed. After being interrogated by
the chief of police, Gloria was, upon representations made by Zoilo
Rivera, released and allowed to go home.
The foregoing is the prosecution's version. That of the defense is
to the effect that, upon being asked by the policemen to stop
weeding and leave the premises, Gloria, not only refused to do so,
but, also, insulted them, as well as Caisip. According to the
defense, she was arrested because of the crime of slander then
committed by her. Appellant Rojales and Villadelrey, moreover,
testified that, as they were heading towards the barrio of
Camachilihan, Gloria proceeded to tear her clothes.
His Honor, the Trial Judge, accepted, however, the version of the
prosecution and found that of the defense unworthy of credence.
The findings of fact of the Court of Appeals, which fully concurred
in this view, are "final," and our authority to review on certiorari its
appealed decision is limited to questions purely of
law. 4 Appellants maintain that the Court of Appeals has erred: (1)
in not finding their acts "justified under Article 429 of the New Civil
Code"; (2) in holding that the 20-day period of grace given to
Marcelino Guevarra and his wife, Gloria Cabalag, by the sheriff, to
vacate Lot 105-A, was valid and lawful; (3) in finding that the
elements of the crime of grave coercion are present in the case at
bar; and (4) in finding appellants guilty as charged. This pretense
is clearly untenable.
Art. 429 of our Civil Code, reading:
"The owner or lawful possessor of a thing has the right to exclude
any person from the enjoyment and disposal thereof. For this
purpose, he may use such force as may be reasonably necessary
to repel or prevent an actual or threatened unlawful physical
invasion or usurpation of his property."
upon which appellants rely is obviously inapplicable to the case at
bar, for, having been given 20 days from June 6, 1959, within
which to vacate Lot 105-A, complainant did not, on June 17, 1959
or within said period invade or usurp said lot. She had
merely remained in possession thereof, even though the hacienda
owner may have become its co-possessor. Appellants did not
"repel or prevent in actual or threatened . . . physical invasion or
usurpation." They expelled Gloria from a property of which she
and her husband were in possession even before the action for
forcible entry was filed against them on May 17, 1958, despite the
fact that the Sheriff had explicitly authorized them to stay in said
property up to June 26, 1959, and had expressed the view that he
could not oust them therefrom On June 17, 1959, without a judicial
order therefor.
It is urged, that, by weeding and refusing to leave Lot 105-A, Gloria
had committed a crime in the presence of the policemen, despite
the aforementioned 20-day period, which, appellants claim, the
sheriff had no authority to grant. This contention is manifestly
untenable, because: (1) said period was granted in the presence
of the hacienda owner's representative, appellant Caisip, who, by
not objecting thereto, had impliedly consented to or ratified the eat
performed by the sheriff; 2) Gloria and her husband were thereby
allowed to remain, and had, in fact, remained, in possession of the
premises, perhaps together with the owner of the hacienda or his
representative, Caisip; (3) the act of removing weeds from the
ricefield was beneficial to its owner and to whomsoever the crops
belonged, and, even if they had not authorized it, does not
constitute a criminal offense; and (4) although Gloria and her
husband had been sentenced to vacate the land, the judgment
against them did not necessarily imply that they, as the parties who
had tilled it and planted thereon, had no rights, of any kind
whatsoever, in or to the standing crops, inasmuch as "necessary
expenses shall be refunded to every possessor," 5 and the cost of
cultivation, production and upkeep has been held to partake of the
nature of necessary expenses. 6
It is, accordingly, clear that appellants herein had, by means of
violence, and without legal authority therefor, prevented the
complainant from "doing something not prohibited by law,"
(weeding and being in Lot 105-A), and compelled her "to do
something against" her will (stopping the weeding and leaving said
lot), "whether it be right or wrong," thereby taking the law into their
hands, in violation of Art. 286 of the Revised Penal Code. 7
Appellant Caisip argues that, not having used violence against the
complaining witness, he should be acquitted of the charge. In this
connection, His Honor, the Trial Judge, correctly observed:
". . . While it is true that the accused Caisip did not lay hands on
the complainant, unlike the accused Rojales and Villadelrey who
were the ones who used force against Gloria, and while the Court
is also inclined to discredit the claim of the complainant that Felix
Caisip drew a gun during the incident, it sufficiently appears from
the record that the motivation and inducement for the coercion
perpetrated on the complainant came from the accused Caisip. It
was his undisguised and particular purpose to prevent Gloria from
entering the land and working on the same. He was the one who
first approached Gloria with this objective in mind, and tried to
prevent her from weeding the land. He had tried to stop Gloria from
doing the same act even the day previous to the present incident.
It was Caisip who fetched the policemen in order to accomplish his
purpose of preventing Gloria from weeding the land and making
her leave the premises. The policemen obeyed his bidding, and
even when the said policemen were already over-asserting their
authority as peace officers, Caisip simply ,stood by without
attempting to stop their abuses. He could be hardly said to have
disapproved an act which he himself induced and initiated." 8
In other words, there was community of purpose between the
policemen and Caisip, so that the latter is guilty of grave coercion,
as a co-conspirator, apart from being a principal by induction. 9
In the commission of the offense, the aggravating circumstances
of abuse of superior strength 10 and disregard of the respect due
the offended party, by reason of her sex, 11 were present, insofar
as the three appellants herein are concerned. As regards
appellants Rojales and Villadelrey, there was the additional
aggravating circumstance of having taken advantage of their
positions as members of the local police force. Hence, the penalty
of imprisonment meted out to appellants herein, which is the
minimum of the maximum prescribed in said Art. 286, 12 and the
fine imposed upon them, are in accordance with law.
WHEREFORE, the decision appealed from is hereby affirmed,
with costs against the defendants-appellants. It is so ordered.
||| (Caisip v. People, G.R. No. L-28716, [November 18, 1970], 146
PHIL 621-629)
People v. Pletcha, Jr. 22 CA Rep. 807
4. Use Injuring Rights of Third Persons
CASE:
Andamo v. Intermediate Appellate Court 191 SCRA 195
5. Legal Remedies to Recover Ones Possession
- Accion Interdictal (Forcible Entry and Unlawful
Detainer)
- Accion Publiciana
- Accion Reivindicatoria
6. Surface Rights (Art. 437)
Andamo v. Intermediate Appellate Court 191 SCRA 195
7. Hidden Treasure (Arts. 438-439)
B. Right of Accession
1. Accession With Respect to Immovable Property
a. Accession Discreta
CASES:
Bachrach Motor Co. v. Talisay-Silay Miling Co. 56 Phil. 117
Equatorial Realty Development, Inc. v. Mayfair Theater 370 SCRA
56
EN BANC
[G.R. No. 133879. November 21, 2001.]
EQUATORIAL REALTY DEVELOPMENT, INC., petitioner, vs.
MAYFAIR THEATER, INC., respondent.
Estelito P. Mendoza for petitioner.
De Borja Medialdea Bello Guevarra & Gerodias Law Offices for
private respondent.
SYNOPSIS
Mayfair Theater, Inc. was a lessee of portions of a building owned
by Carmelo & Bauermann, Inc. Their lease contracts contained a
provision granting Mayfair a right of first refusal to purchase the
subject properties. However, before the contracts ended, the
subject properties were sold by Carmelo to Equatorial Realty
Development, Inc. which prompted Mayfair to file a case for the
annulment of the Deed of Absolute Sale between Carmelo and
Equatorial, specific performance and damages. In 1996, the Court
ruled in favor of Mayfair. Barely five months after Mayfair had
submitted its Motion for Execution, Equatorial filed an action for
collection of sum of money against Mayfair claiming payment of
rentals or reasonable compensation for the defendant's use of the
subject premises after its lease contracts had expired. The lower
court debunked the claim of Equatorial for unpaid back rentals,
holding that the rescission of the Deed of Absolute Sale in the
mother case did not confer on Equatorial any vested or residual
propriety rights, even in expectancy. It further ruled that the Court
categorically stated that the Deed of Absolute Sale had been
rescinded subjecting the present complaint to res judicata. Hence,
Equatorial filed the present petition.
Theoretically, a rescissible contract is valid until rescinded.
However, this general principle is not decisive to the issue of
whether Equatorial ever acquired the right to collect rentals. What
is decisive is the civil law rule that ownership is acquired, not by
mere agreement, but by tradition or delivery. Under the factual
environment of this controversy as found by this Court in the
mother case, Equatorial was never put in actual and effective
control or possession of the property because of Mayfair's timely
objection. In the mother case, this Court categorically denied the
payment of interest, a fruit of ownership. By the same token,
rentals, another fruit of ownership, cannot be granted without
mocking this Court's en banc Decision, which had long become
final.
SYLLABUS
1. CIVIL LAW; PROPERTY; CIVIL FRUIT OF OWNERSHIP;
RENTALS. Rent is a civil fruit that belongs to the owner of the
property producing it by right of accession. Consequently and
ordinarily, the rentals that fell due from the time of the perfection
of the sale to petitioner until its rescission by final judgment should
belong to the owner of the property during that period.
2. ID.; SALES; OWNERSHIP OF THE THING SOLD IS
TRANSFERRED, NOT BY CONTRACT ALONE, BUT BY
TRADITION OR DELIVERY. By a contract of sale, "one of the
contracting parties obligates himself to transfer ownership of and
to deliver a determinate thing and the other to pay therefor a price
certain in money or its equivalent." Ownership of the thing sold is
a real right, which the buyer acquires only upon delivery of the
thing to him "in any of the ways specified in Articles 1497 to 1501,
or in any other manner signifying an agreement that the
possession is transferred from the vendor to the vendee." This
right is transferred, not by contract alone, but by tradition or
delivery. Non nudis pactis sed traditione dominia rerum
transferantur.
3. ID.; ID.; ID.; THERE IS DELIVERY WHEN THE THING SOLD
IS PLACED UNDER THE CONTROL AND POSSESSION OF
THE VENDEE. [T]here is said to be delivery if and when the
thing sold "is placed in the control and possession of the vendee."
Thus, it has been held that while the execution of a public
instrument of sale is recognized by law as equivalent to the
delivery of the thing sold, such constructive or symbolic delivery,
being merely presumptive, is deemed negated by the failure of the
vendee to take actual possession of the land sold. Delivery has
been described as a composite act, a thing in which both parties
must join and the minds of both parties concur. It is an act by which
one party parts with the title to and the possession of the property,
and the other acquires the right to and the possession of the same.
In its natural sense, delivery means something in addition to the
delivery of property or title; it means transfer of possession. In the
Law on Sales, delivery may be either actual or constructive, but
both forms of delivery contemplate "the absolute giving up of the
control and custody of the property on the part of the vendor, and
the assumption of the same by the vendee." aHDTAI
4. ID.; ID.; ID.; NOT PRESENT IN CASE AT BAR.
[T]heoretically, a rescissible contract is valid until rescinded.
However, this general principle is not decisive to the issue of
whether Equatorial ever acquired the right to collect rentals. What
is decisive is the civil law rule that ownership is acquired, not by
mere agreement, but by tradition or delivery. Under the factual
environment of this controversy as found by this Court in the
mother case, Equatorial was never put in actual and effective
control or possession of the property because of Mayfair's timely
objection.
5. ID.; ID.; ID.; EXECUTION OF CONTRACT OF SALE AS FORM
OF CONSTRUCTIVE DELIVERY HOLDS TRUE ONLY WHEN
THERE IS NO IMPEDIMENT THAT MAY PREVENT THE
PASSING OF THE PROPERTY FROM THE VENDOR TO THE
VENDEE. From the peculiar facts of this case, it is clear that
petitioner never took actual control and possession of the property
sold, in view of respondent's timely objection to the sale and the
continued actual possession of the property. The objection took
the form of a court action impugning the sale which, as we know,
was rescinded by a judgment rendered by this Court in the mother
case. It has been held that the execution of a contract of sale as a
form of constructive delivery is a legal fiction. It holds true only
when there is no impediment that may prevent the passing of the
property from the hands of the vendor into those of the vendee.
When there is such impediment, "fiction yields to reality the
delivery has not been effected." Hence, respondent's opposition to
the transfer of the property by way of sale to Equatorial was a
legally sufficient impediment that effectively prevented the passing
of the property into the latter's hands.
6. ID.; ID.; EXECUTION OF PUBLIC INSTRUMENT GIVES RISE
ONLY TO A PRIMA FACIE PRESUMPTION OF DELIVERY.
The execution of a public instrument gives rise, . . . only to aprima
facie presumption of delivery. Such presumption is destroyed
when the instrument itself expresses or implies that delivery was
not intended; or when by other means it is shown that such
delivery was not effected, because a third person was actually in
possession of the thing. In the latter case, the sale cannot be
considered consummated.
7. ID.; OBLIGATIONS AND CONTRACTS; RESCISSIBLE
CONTRACTS; NOT ONLY THE LAND AND BUILDING SOLD
SHALL BE RETURNED TO THE SELLER BUT ALSO THE
RENTAL PAYMENTS PAID, IF ANY. [T]he point may be raised
that under Article 1164 of the Civil Code, Equatorial as buyer
acquired a right to the fruits of the thing sold from the time the
obligation to deliver the property to petitioner arose. That time
arose upon the perfection of the Contract of Sale on July 30, 1978,
from which moment the laws provide that the parties to a sale may
reciprocally demand performance. Does this mean that despite the
judgment rescinding the sale, the right to the fruits belonged to,
and remained enforceable by, Equatorial? Article 1385 of the Civil
Code answers this question in the negative, because "[r]escission
creates the obligation to return the things which were the object of
the contract, together with their fruits, and the price with its interest;
. . . ." Not only the land and building sold, but also the rental
payments paid, if any, had to be returned by the buyer.
8. ID.; SALES; CONTRACT OF SALE; RENTAL PAYMENTS
MADE SHOULD NOT BE CONSTRUED AS A RECOGNITION OF
THE BUYER AS NEW ORDER BUT MERELY TO AVOID
IMMINENT EVICTION; CASE AT BAR. The fact that Mayfair
paid rentals to Equatorial during the litigation should not be
interpreted to mean either actual delivery or ipso facto recognition
of Equatorial's title. The CA Records of the mother case show that
Equatorial as alleged buyer of the disputed properties and as
alleged successor-in-interest of Carmelo's rights as lessor
submitted two ejectment suits against Mayfair. Filed in the
Metropolitan Trial Court of Manila, the first was docketed as Civil
Case No. 121570 on July 9, 1987; and the second, as Civil Case
No. 131944 on May 28, 1990. Mayfair eventually won them both.
However, to be able to maintain physical possession of the
premises while awaiting the outcome of the mother case, it had no
choice but to pay the rentals. The rental payments made by
Mayfair should not be construed as a recognition of Equatorial as
the new owner. They were made merely to avoid imminent
eviction.
9. STATUTORY CONSTRUCTION; GENERAL PROPOSITIONS
DO NOT DECIDE SPECIFIC CASES. As pointed out by Justice
Holmes, general propositions do not decide specific cases.
Rather, "laws are interpreted in the context of the peculiar factual
situation of each case. Each case has its own flesh and blood and
cannot be decided on the basis of isolated clinical classroom
principles."
10. CIVIL LAW; SALES; VALID FROM INCEPTION BUT
JUDICIALLY RESCINDED BEFORE IT COULD BE
CONSUMMATED; CASE AT BAR. [T]he sale to Equatorial may
have been valid from inception, but it was judicially rescinded
before it could be consummated. Petitioner never acquired
ownership, not because the sale was void, as erroneously claimed
by the trial court, but because the sale was not consummated by
a legally effective delivery of the property sold.
11. ID.; ID.; BUYER IN BAD FAITH; NOT ENTITLED TO ANY
BENEFIT; ENTITLED SOLELY TO THE RETURN OF THE
PURCHASE PRICE; MUST BEAR ANY LOSS. [A]ssuming for
the sake of argument that there was valid delivery, petitioner is not
entitled to any benefits from the "rescinded" Deed of Absolute Sale
because of its bad faith. This being the law of the mother case
decided in 1996, it may no longer be changed because it has long
become final and executory. . . . Thus, petitioner was and still is
entitled solely to the return of the purchase price it paid to
Carmelo; no more, no less. This Court has firmly ruled in the
mother case that neither of them is entitled to any consideration of
equity, as both "took unconscientious advantage of Mayfair." In the
mother case, this Court categorically denied the payment of
interest, a fruit of ownership. By the same token, rentals, another
fruit of ownership, cannot be granted without mocking this Court's
en banc Decision, which has long become final. Petitioner's claim
of reasonable compensation for respondent's use and occupation
of the subject property from the time the lease expired cannot be
countenanced. If it suffered any loss, petitioner must bear it in
silence, since it had wrought that loss upon itself. Otherwise, bad
faith would be rewarded instead of punished. ICaDHT
12. REMEDIAL LAW; CIVIL PROCEDURE; EFFECT OF
FINALITY OF JUDGMENT; RES JUDICATA; ELUCIDATED.
Under the doctrine of res judicata or bar by prior judgment, a
matter that has been adjudicated by a court of competent
jurisdiction must be deemed to have been finally and conclusively
settled if it arises in any subsequent litigation between the same
parties and for the same cause. Thus, "[a] final judgment on the
merits rendered by a court of competent jurisdiction is conclusive
as to the rights of the parties and their privies and constitutes an
absolute bar to subsequent actions involving the same claim,
demand, or cause of action." Res judicata is based on the ground
that "the party to be affected, or some other with whom he is in
privity, has litigated the same matter in a former action in a court
of competent jurisdiction, and should not be permitted to litigate it
again." It frees the parties from undergoing all over again the rigors
of unnecessary suits and repetitive trials. At the same time, it
prevents the clogging of court dockets. Equally important, it
stabilizes rights and promotes the rule of law.
13. ID.; ID.; ID.; ID.; APPLICABLE IN CASE AT BAR. Suffice it
to say that, clearly, our ruling in the mother case bars petitioner
from claiming back rentals from respondent. Although the court a
quo erred when it declared "void from inception" the Deed of
Absolute Sale between Carmelo and petitioner, our foregoing
discussion supports the grant of the Motion to Dismiss on the
ground that our prior judgment in GR No. 106063 has already
resolved the issue of back rentals. On the basis of the evidence
presented during the hearing of Mayfair's Motion to Dismiss, the
trial court found that the issue of ownership of the subject property
has been decided by this Court in favor of Mayfair. . . . Hence, the
trial court decided the Motion to Dismiss on the basis of res
judicata, even if it erred in interpreting the meaning of "rescinded"
as equivalent to "void." In short, it ruled on the ground raised;
namely, bar by prior judgment. By granting the Motion, it disposed
correctly, even if its legal reason for nullifying the sale was wrong.
DECISION
PANGANIBAN, J p:
General propositions do not decide specific cases. Rather, laws
are interpreted in the context of the peculiar factual situation of
each proceeding. Each case has its own flesh and blood and
cannot be ruled upon on the basis of isolated clinical classroom
principles.
While we agree with the general proposition that a contract of sale
is valid until rescinded, it is equally true that ownership of the thing
sold is not acquired by mere agreement, but by tradition or
delivery. The peculiar facts of the present controversy as found by
this Court in an earlier relevant Decision show that delivery was
not actually effected; in fact, it was prevented by a legally effective
impediment. Not having been the owner, petitioner cannot be
entitled to the civil fruits of ownership like rentals of the thing sold.
Furthermore, petitioner's bad faith, as again demonstrated by the
specific factual milieu of said Decision, bars the grant of such
benefits. Otherwise, bad faith would be rewarded instead of
punished.
The Case
Filed before this Court is a Petition for Review 1 under Rule 45 of
the Rules of Court, challenging the March 11, 1998 Order 2 of the
Regional Trial Court of Manila (RTC), Branch 8, in Civil Case No.
97-85141. The dispositive portion of the assailed Order reads as
follows:
"WHEREFORE, the motion to dismiss filed by defendant Mayfair
is hereby GRANTED, and the complaint filed by plaintiff Equatorial
is hereby DISMISSED." 3
Also questioned is the May 29, 1998 RTC Order 4 denying
petitioner's Motion for Reconsideration.
The Facts
The main factual antecedents of the present Petition are matters
of record, because it arose out of an earlier case decided by this
Court on November 21, 1996, entitled Equatorial Realty
Development, Inc. v. Mayfair Theater, Inc. 5 (henceforth referred
to as the "mother case"), docketed as GR No. 106063. IHEAcC
Carmelo & Bauermann, Inc. ("Carmelo") used to own a parcel of
land, together with two 2-storey buildings constructed thereon,
located at Claro M. Recto Avenue, Manila, and covered by TCT
No. 18529 issued in its name by the Register of Deeds of Manila.
On June 1, 1967, Carmelo entered into a Contract of Lease with
Mayfair Theater Inc. ("Mayfair") for a period of 20 years. The lease
covered a portion of the second floor and mezzanine of a two-
storey building with about 1,610 square meters of floor area, which
respondent used as a movie house known as Maxim Theater.
Two years later, on March 31, 1969, Mayfair entered into a second
Contract of Lease with Carmelo for the lease of another portion of
the latter's property namely, a part of the second floor of the
two-storey building, with a floor area of about 1,064 square meters;
and two store spaces on the ground floor and the mezzanine, with
a combined floor area of about 300 square meters. In that space,
Mayfair put up another movie house known as Miramar Theater.
The Contract of Lease was likewise for a period of 20 years.
Both leases contained a provision granting Mayfair a right of first
refusal to purchase the subject properties. However, on July 30,
1978 within the 20-year-lease term the subject properties
were sold by Carmelo to Equatorial Realty Development, Inc.
("Equatorial") for the total sum of P11,300,000, without their first
being offered to Mayfair.
As a result of the sale of the subject properties to Equatorial,
Mayfair filed a Complaint before the Regional Trial Court of Manila
(Branch 7) for (a) the annulment of the Deed of Absolute Sale
between Carmelo and Equatorial, (b) specific performance, and
(c) damages. After trial on the merits, the lower court rendered a
Decision in favor of Carmelo and Equatorial. This case, entitled
"Mayfair Theater, Inc. v. Carmelo and Bauermann, Inc., et al.," was
docketed as Civil Case No. 118019.
On appeal (docketed as CA-GR CV No. 32918), the Court of
Appeals (CA) completely reversed and set aside the judgment of
the lower court.
The controversy reached this Court via GR No. 106063. In this
mother case, it denied the Petition for Review in this wise:
"WHEREFORE, the petition for review of the decision of the Court
of Appeals, dated June 23, 1992, in CA-G.R. CV No. 32918, is
HEREBY DENIED. The Deed of Absolute Sale between
petitioners Equatorial Realty Development, Inc. and Carmelo &
Bauermann, Inc. is hereby deemed rescinded; Carmelo &
Bauermann is ordered to return to petitioner Equatorial Realty
Development the purchase price. The latter is directed to execute
the deeds and documents necessary to return ownership to
Carmelo & Bauermann of the disputed lots. Carmelo & Bauermann
is ordered to allow Mayfair Theater, Inc. to buy the aforesaid lots
for P11,300,000.00." 6
The foregoing Decision of this Court became final and executory
on March 17, 1997. On April 25, 1997, Mayfair filed a Motion for
Execution, which the trial court granted.
However, Carmelo could no longer be located. Thus, following the
order of execution of the trial court, Mayfair deposited with the
clerk of court a quo its payment to Carmelo in the sum of
P11,300,000 less P847,000 as withholding tax. The lower court
issued a Deed of Reconveyance in favor of Carmelo and a Deed
of Sale in favor of Mayfair. On the basis of these documents, the
Registry of Deeds of Manila canceled Equatorial's titles and issued
new Certificates of Title 7 in the name of Mayfair. TAIaHE
Ruling on Equatorial's Petition for Certiorari and Prohibition
contesting the foregoing manner of execution, the CA in its
Resolution of November 20, 1998, explained that Mayfair had no
right to deduct the P847,000 as withholding tax. Since Carmelo
could no longer be located, the appellate court ordered Mayfair to
deposit the said sum with the Office of the Clerk of Court, Manila,
to complete the full amount of P11,300,000 to be turned over to
Equatorial.
Equatorial questioned the legality of the above CA ruling before
this Court in GR No. 136221 entitled "Equatorial Realty
Development, Inc. v. Mayfair Theater, Inc." In a Decision
promulgated on May 12, 2000, 8 this Court directed the trial court
to follow strictly the Decision in GR No. 106063, the mother case.
It explained its ruling in these words:
"We agree that Carmelo and Bauermann is obliged to return the
entire amount of eleven million three hundred thousand pesos
(P11,300,000.00) to Equatorial. On the other hand, Mayfair may
not deduct from the purchase price the amount of eight hundred
forty-seven thousand pesos (P847,000.00) as withholding tax. The
duty to withhold taxes due, if any, is imposed on the seller,
Carmelo and Bauermann, Inc." 9
Meanwhile, on September 18, 1997 barely five months after
Mayfair had submitted its Motion for Execution before the RTC of
Manila, Branch 7 Equatorial filed with the Regional Trial Court
of Manila, Branch 8, an action for the collection of a sum of money
against Mayfair, claiming payment of rentals or reasonable
compensation for the defendant's use of the subject
premises after its lease contracts had expired. This action was the
progenitor of the present case.
In its Complaint, Equatorial alleged among other things that the
Lease Contract covering the premises occupied by Maxim Theater
expired on May 31, 1987, while the Lease Contract covering the
premises occupied by Miramar Theater lapsed on March 31,
1989. 10 Representing itself as the owner of the subject premises
by reason of the Contract of Sale on July 30, 1978, it claimed
rentals arising from Mayfair's occupation thereof.
Ruling of the RTC Manila, Branch 8
As earlier stated, the trial court dismissed the Complaint via the
herein assailed Order and denied the Motion for Reconsideration
filed by Equatorial. 11
The lower court debunked the claim of petitioner for unpaid back
rentals, holding that the rescission of the Deed of Absolute Sale in
the mother case did not confer on Equatorial any vested or
residual proprietary rights, even in expectancy.
In granting the Motion to Dismiss, the court a quo held that the
critical issue was whether Equatorial was the owner of the subject
property and could thus enjoy the fruits or rentals therefrom. It
declared the rescinded Deed of Absolute Sale as "void at its
inception as though it did not happen." EScHDA
The trial court ratiocinated as follows:
"The meaning of rescind in the aforequoted decision is to set
aside. In the case of Ocampo v. Court of Appeals, G.R. No. 97442,
June 30, 1994, the Supreme Court held that, 'to rescind is to
declare a contract void in its inception and to put an end as though
it never were. It is not merely to terminate it and release parties
from further obligations to each other but to abrogate it from the
beginning and restore parties to relative positions which they
would have occupied had no contract ever been made.'
"Relative to the foregoing definition, the Deed of Absolute Sale
between Equatorial and Carmelo dated July 31, 1978 is void at its
inception as though it did not happen.
"The argument of Equatorial that this complaint for back rentals as
'reasonable compensation for use of the subject property after
expiration of the lease contracts presumes that the Deed of
Absolute Sale dated July 30, 1978 from whence the fountain of
Equatorial's alleged property rights flows is still valid and existing.
xxx xxx xxx
"The subject Deed of Absolute Sale having been rescinded by the
Supreme Court, Equatorial is not the owner and does not have any
right to demand backrentals from the subject property. . . . ." 12
The trial court added: "The Supreme Court in the Equatorial case,
G.R. No. 106063, has categorically stated that the Deed of
Absolute Sale dated July 31, 1978 has been rescinded subjecting
the present complaint to res judicata." 13
Hence, the present recourse. 14
Issues
Petitioner submits, for the consideration of this Court, the following
issues: 15
"A.
The basis of the dismissal of the Complaint by the Regional Trial
Court not only disregards basic concepts and principles in the law
on contracts and in civil law, especially those on rescission and its
corresponding legal effects, but also ignores the dispositive portion
of the Decision of the Supreme Court in G.R. No. 106063 entitled
'Equatorial Realty Development, Inc. & Carmelo & Bauermann,
Inc. vs. Mayfair Theater, Inc.' cSITDa
"B.
The Regional Trial Court erred in holding that the Deed of Absolute
Sale in favor of petitioner by Carmelo & Bauermann, Inc., dated
July 31, 1978, over the premises used and occupied by
respondent, having been 'deemed rescinded' by the Supreme
Court in G.R. No. 106063, is 'void at its inception as though it did
not happen.'
"C.
The Regional Trial Court likewise erred in holding that the
aforesaid Deed of Absolute Sale, dated July 31, 1978, having been
'deemed rescinded' by the Supreme Court in G.R. No. 106063,
petitioner 'is not the owner and does not have any right to demand
backrentals from the subject property,' and that the rescission of
the Deed of Absolute Sale by the Supreme Court does not confer
to petitioner 'any vested right nor any residual proprietary rights
even in expectancy.'
"D.
The issue upon which the Regional Trial Court dismissed the civil
case, as stated in its Order of March 11, 1998, was not raised by
respondent in its Motion to Dismiss.
"E.
The sole ground upon which the Regional Trial Court dismissed
Civil Case No. 97-85141 is not one of the grounds of a Motion to
Dismiss under Sec. 1 of Rule 16 of the 1997 Rules of Civil
Procedure."
Basically, the issues can be summarized into two: (1) the
substantive issue of whether Equatorial is entitled to back rentals;
and (2) the procedural issue of whether the court a quo'sdismissal
of Civil Case No. 97-85141 was based on one of the grounds
raised by respondent in its Motion to Dismiss and covered by Rule
16 of the Rules of Court.
This Court's Ruling
The Petition is not meritorious.
First Issue:
Ownership of Subject Properties
We hold that under the peculiar facts and circumstances of the
case at bar, as found by this Court en banc in its Decision
promulgated in 1996 in the mother case, no right of ownership was
transferred from Carmelo to Equatorial in view of a patent failure
to deliver the property to the buyer.
Rental a Civil
Fruit of Ownership
To better understand the peculiarity of the instant case, let us
begin with some basic parameters. Rent is a civil fruit 16 that
belongs to the owner of the property producing it 17 by right of
accession. 18 Consequently and ordinarily, the rentals that fell
due from the time of the perfection of the sale to petitioner until its
rescission by final judgment should belong to the owner of the
property during that period.
By a contract of sale, "one of the contracting parties obligates
himself to transfer ownership of and to deliver a determinate thing
and the other to pay therefor a price certain in money or its
equivalent." 19
Ownership of the thing sold is a real right, 20 which the buyer
acquires only upon delivery of the thing to him "in any of the ways
specified in articles 1497 to 1501, or in any other manner signifying
an agreement that the possession is transferred from the vendor
to the vendee." 21 This right is transferred, not by contract alone,
but by tradition or delivery. 22Non nudis pactis sed traditione
dominia rerum transferantur. And there is said to be delivery if and
when the thing sold "is placed in the control and possession of the
vendee." 23Thus, it has been held that while the execution of a
public instrument of sale is recognized by law as equivalent to the
delivery of the thing sold, 24 such constructive or symbolic
delivery, being merely presumptive, is deemed negated by the
failure of the vendee to take actual possession of the land sold. 25
Delivery has been described as a composite act, a thing in which
both parties must join and the minds of both parties concur. It is an
act by which one party parts with the title to and the possession of
the property, and the other acquires the right to and the
possession of the same. In its natural sense, delivery means
something in addition to the delivery of property or title; it means
transfer of possession. 26 In the Law on Sales, delivery may be
either actual or constructive, but both forms of delivery
contemplate "the absolute giving up of the control and custody of
the property on the part of the vendor, and the assumption of the
same by the vendee." 27
Possession Never
Acquired by Petitioner
Let us now apply the foregoing discussion to the present issue.
From the peculiar facts of this case, it is clear that petitioner never
took actual control and possession of the property sold, in view of
respondent's timely objection to the sale and the continued actual
possession of the property. The objection took the form of a court
action impugning the sale which, as we know, was rescinded by a
judgment rendered by this Court in the mother case. It has been
held that the execution of a contract of sale as a form of
constructive delivery is a legal fiction. It holds true only when there
is no impediment that may prevent the passing of the property from
the hands of the vendor into those of the vendee. 28When there is
such impediment, "fiction yields to reality the delivery has not
been effected." 29
Hence, respondent's opposition to the transfer of the property by
way of sale to Equatorial was a legally sufficient impediment that
effectively prevented the passing of the property into the latter's
hands. IcAaSD
This was the same impediment contemplated in Vda. de
Sarmiento v. Lesaca, 30 in which the Court held as follows:
"The question that now arises is: Is there any stipulation in the sale
in question from which we can infer that the vendor did not intend
to deliver outright the possession of the lands to the vendee? We
find none. On the contrary, it can be clearly seen therein that the
vendor intended to place the vendee in actual possession of the
lands immediately as can be inferred from the stipulation that the
vendee 'takes actual possession thereof . . . with full rights to
dispose, enjoy and make use thereof in such manner and form as
would be most advantageous to herself.' The possession referred
to in the contract evidently refers to actual possession and not
merely symbolical inferable from the mere execution of the
document.
"Has the vendor complied with this express commitment? She did
not. As provided in Article 1462, the thing sold shall be deemed
delivered when the vendee is placed in
the control and possession thereof, which situation does not here
obtain because from the execution of the sale up to the present
the vendee was never able to take possession of the lands due to
the insistent refusal of Martin Deloso to surrender them claiming
ownership thereof. And although it is postulated in the same article
that the execution of a public document is equivalent to delivery,
this legal fiction only holds true when there is no impediment that
may prevent the passing of the property from the hands of the
vendor into those of the vendee. . . . ." 31
The execution of a public instrument gives rise, therefore, only to
a prima facie presumption of delivery. Such presumption is
destroyed when the instrument itself expresses or implies that
delivery was not intended; or when by other means it is shown that
such delivery was not effected, because a third person was
actually in possession of the thing. In the latter case, the sale
cannot be considered consummated. ESacHC
However, the point may be raised that under Article 1164 of the
Civil Code, Equatorial as buyer acquired a right to the fruits of the
thing sold from the time the obligation to deliver the property to
petitioner arose. 32 That time arose upon the perfection of the
Contract of Sale on July 30, 1978, from which moment the laws
provide that the parties to a sale may reciprocally demand
performance. 33 Does this mean that despite the judgment
rescinding the sale, the right to the fruits 34 belonged to, and
remained enforceable by, Equatorial?
Article 1385 of the Civil Code answers this question in the
negative, because "[r]escission creates the obligation to return the
things which were the object of the contract, together with their
fruits, and the price with its interest; . . . ." Not only the land and
building sold, but also the rental payments paid, if any, had to be
returned by the buyer.
Another point. The Decision in the mother case stated that
"Equatorial . . . has received rents" from Mayfair "during all the
years that this controversy has been litigated." The Separate
Opinion of Justice Teodoro Padilla in the mother case also said
that Equatorial was "deriving rental income" from the disputed
property. Even herein ponente's Separate Concurring Opinion in
the mother case recognized these rentals. The question now is:
Do all these statements concede actual delivery? EDHCSI
The answer is "No." The fact that Mayfair paid rentals to Equatorial
during the litigation should not be interpreted to mean either actual
delivery or ipso facto recognition of Equatorial's title.
The CA Records of the mother case 35 show that Equatorial as
alleged buyer of the disputed properties and as alleged successor-
in-interest of Carmelo's rights as lessor submitted two ejectment
suits against Mayfair. Filed in the Metropolitan Trial Court of
Manila, the first was docketed as Civil Case No. 121570 on July 9,
1987; and the second, as Civil Case No. 131944 on May 28, 1990.
Mayfair eventually won them both. However, to be able to maintain
physical possession of the premises while awaiting the outcome
of the mother case, it had no choice but to pay the rentals.
The rental payments made by Mayfair should not be construed as
a recognition of Equatorial as the new owner. They were made
merely to avoid imminent eviction. It is in this context that one
should understand the aforequoted factual statements in
the ponencia in the mother case, as well as the Separate Opinion
of Mr. Justice Padilla and the Separate Concurring Opinion of the
herein ponente.
At bottom, it may be conceded that, theoretically, a rescissible
contract is valid until rescinded. However, this general principle is
not decisive to the issue of whether Equatorial ever acquired the
right to collect rentals. What is decisive is the civil law rule that
ownership is acquired, not by mere agreement, but by tradition or
delivery. Under the factual environment of this controversy as
found by this Court in the mother case, Equatorial was never put
in actual and effective control or possession of the property
because of Mayfair's timely objection.
As pointed out by Justice Holmes, general propositions do not
decide specific cases. Rather, "laws are interpreted in the context
of the peculiar factual situation of each case. Each case has its
own flesh and blood and cannot be decided on the basis of isolated
clinical classroom principles." 36
In short, the sale to Equatorial may have been valid from inception,
but it was judicially rescinded before it could be consummated.
Petitioner never acquired ownership, not because the sale was
void, as erroneously claimed by the trial court, but because the
sale was not consummated by a legally effective delivery of the
property sold.
Benefits Precluded by
Petitioner's Bad Faith
Furthermore, assuming for the sake of argument that there was
valid delivery, petitioner is not entitled to any benefits from the
"rescinded" Deed of Absolute Sale because of its bad faith. This
being the law of the mother case decided in 1996, it may no longer
be changed because it has long become final and executory.
Petitioner's bad faith is set forth in the following pertinent portions
of the mother case:
"First and foremost is that the petitioners acted in bad faith to
render Paragraph 8 'inutile.'
xxx xxx xxx
"Since Equatorial is a buyer in bad faith, this finding renders the
sale to it of the property in question rescissible. We agree with
respondent Appellate Court that the records bear out the fact that
Equatorial was aware of the lease contracts because its lawyers
had, prior to the sale, studied the said contracts. As such,
Equatorial cannot tenably claim to be a purchaser in good faith,
and, therefore, rescission lies.
xxx xxx xxx
"As also earlier emphasized, the contract of sale between
Equatorial and Carmelo is characterized by bad faith, since it was
knowingly entered into in violation of the rights of and to the
prejudice of Mayfair. In fact, as correctly observed by the Court of
Appeals, Equatorial admitted that its lawyers had studied the
contract of lease prior to the sale. Equatorial's knowledge of the
stipulations therein should have cautioned it to look further into the
agreement to determine if it involved stipulations that would
prejudice its own interests.
xxx xxx xxx
"On the part of Equatorial, it cannot be a buyer in good
faith because it bought the property with notice and full knowledge
that Mayfair had a right to or interest in the property superior to its
own. Carmelo and Equatorial took unconscientious advantage of
Mayfair." 37 (emphasis supplied)
Thus, petitioner was and still is entitled solely to the return of the
purchase price it paid to Carmelo; no more, no less. This Court
has firmly ruled in the mother case that neither of them is entitled
to any consideration of equity, as both "took unconscientious
advantage of Mayfair." 38
In the mother case, this Court categorically denied the payment of
interest, a fruit of ownership. By the same token, rentals, another
fruit of ownership, cannot be granted without mocking this Court's
en banc Decision, which has long become final. AEDHST
Petitioner's claim of reasonable compensation for respondent's
use and occupation of the subject property from the time the lease
expired cannot be countenanced. If it suffered any loss, petitioner
must bear it in silence, since it had wrought that loss upon
itself. Otherwise, bad faith would be rewarded instead of punished.
We uphold the trial court's disposition, not for the reason it gave,
but for (a) the patent failure to deliver the property and (b)
petitioner's bad faith, as above discussed.
Second Issue:
Ground in Motion to Dismiss
Procedurally, petitioner claims that the trial court deviated from the
accepted and usual course of judicial proceedings when it
dismissed Civil Case No. 97-85141 on a ground not raised in
respondent's Motion to Dismiss. Worse, it allegedly based its
dismissal on a ground not provided for in a motion to dismiss as
enunciated in the Rules of Court.
We are not convinced. A review of respondent's Motion to Dismiss
Civil Case No. 97-85141 shows that there were two grounds
invoked, as follows:
"(A)
Plaintiff is guilty of forum-shopping.
"(B)
Plaintiff's cause of action, if any, is barred by prior judgment." 39
The court a quo ruled, inter alia, that the cause of action of
petitioner (plaintiff in the case below) had been barred by a prior
judgment of this Court in GR No. 106063, the mother case.
Although it erred in its interpretation of the said Decision when it
argued that the rescinded Deed of Absolute Sale was "void," we
hold, nonetheless, that petitioner's cause of action is indeed
barred by a prior judgment of this Court. As already discussed, our
Decision in GR No. 106063 shows that petitioner is not entitled to
back rentals, because it never became the owner of the disputed
properties due to a failure of delivery. And even
assuming arguendo that there was a valid delivery, petitioner's
bad faith negates its entitlement to the civil fruits of ownership, like
interest and rentals.
Under the doctrine of res judicata or bar by prior judgment, a
matter that has been adjudicated by a court of competent
jurisdiction must be deemed to have been finally and conclusively
settled if it arises in any subsequent litigation between the same
parties and for the same cause. 40 Thus, "[a] final judgment on the
merits rendered by a court of competent jurisdiction is conclusive
as to the rights of the parties and their privies and constitutes an
absolute bar to subsequent actions involving the same claim,
demand, or cause of action." 41 Res judicata is based on the
ground that "the party to be affected, or some other with whom he
is in privity, has litigated the same matter in a former action in a
court of competent jurisdiction, and should not be permitted to
litigate it again." 42
It frees the parties from undergoing all over again the rigors of
unnecessary suits and repetitive trials. At the same time, it
prevents the clogging of court dockets. Equally important, it
stabilizes rights and promotes the rule of law.
We find no need to repeat the foregoing disquisitions on the first
issue to show satisfaction of the elements of res judicata. Suffice
it to say that, clearly, our ruling in the mother case bars petitioner
from claiming back rentals from respondent. Although the court a
quo erred when it declared "void from inception" the Deed of
Absolute Sale between Carmelo and petitioner, our foregoing
discussion supports the grant of the Motion to Dismiss on the
ground that our prior judgment in GR No. 106063 has already
resolved the issue of back rentals.
On the basis of the evidence presented during the hearing of
Mayfair's Motion to Dismiss, the trial court found that the issue of
ownership of the subject property has been decided by this Court
in favor of Mayfair. We quote the RTC:
"The Supreme Court in the Equatorial case, G.R. No. 106063 has
categorically stated that the Deed of Absolute Sale dated July 31,
1978 has been rescinded subjecting the present complaint to res
judicata." 43 (Emphasis in the original)
Hence, the trial court decided the Motion to Dismiss on the basis
of res judicata, even if it erred in interpreting the meaning of
"rescinded" as equivalent to "void." In short, it ruled on the ground
raised; namely, bar by prior judgment. By granting the Motion,
it disposed correctly, even if its legal reason for nullifying the sale
was wrong. The correct reasons are given in this Decision.
WHEREFORE, the Petition is hereby DENIED. Costs against
petitioner. ADCTac
SO ORDERED.
||| (Equatorial Realty Development, Inc. v. Mayfair Theater, Inc.,
G.R. No. 133879, [November 21, 2001], 421 PHIL 709-768)
b. Accession Continua
i. Accession industrial
a. Article 448
CASES:
Ignacio v. Hilario 76 Phil. 605
Ignao v. Intermediate Appellate Court 193 SCRA
17
Filipinas College Inc. v. Garcia Timbang, et al 164
SCRA 287
Manotok Realty, Inc. v. Tecson 164 SCRA 587
Bernardo v. Bataclan 66 Phil. 598
Heirs of Ramon Durano, Sr. v. Uy 344 SCRA 328
Ballatan v. Court of Appeals 304 SCRA 34
b. Article 448 & 447 applied by analogy
CASES:
Spouses Del Campo v. Abiesa 160 SCRA 379
FIRST DIVISION
[G.R. No. L-49219. April 15, 1988.]
SPOUSES CONCEPCION FERNANDEZ DEL OCAMPO and
ESTANISLAO DEL CAMPO, plaintiffs-
appellees, vs. BERNARDA FERNANDEZ ABESIA, defendant-
appellant.
Geronimo Creer, Jr. for plaintiffs-appellees.
Benedicto G. Cobarde for defendant-appellant.
SYLLABUS
1. CIVIL LAW; ACCESSION; RIGHT OF A BUILDER IN GOOD
FAITH; NOT APPLICABLE WHERE CO-OWNERSHIP EXISTS.
Article 448 of the Civil Code cannot apply where a co-owner
builds, plants or sows on the land owned in common for then he
did not build, plant or sow upon land that exclusively belongs to
another but of which he is a co-owner. The co-owner is not a third
person under the circumstances, and the situation is governed by
the rules of co-ownership.
2. ID.; ID.; ID.; APPLICABLE WHERE CO-OWNERSHIP IS
TERMINATED. When, as in this case, the co-ownership is
terminated by the partition and it appears that the house of
defendants overlaps or occupies a portion of 5 square meters of
the land pertaining to plaintiffs which the defendants obviously built
in good faith, then the provisions of Article 448 of the new Civil
Code should apply. Manresa and Navarro Amandi agree that the
said provision of the Civil Code may apply even when there was
co-ownership if good faith has been established.
3. ID.; ID.; ID.; ID.; PAYMENT OF INDEMNITY. Applying Article
448 of the Civil Code, the plaintiffs have the right to appropriate
said portion of the house of defendants upon payment of indemnity
to defendants as provided for in Article 546 of the Civil Code.
Otherwise, the plaintiffs may oblige the defendants to pay the price
of the land occupied by their house. However, if the price asked
for is considerably much more than the value of the portion of the
house of defendants built thereon, then the latter cannot be
obliged to buy the land. The defendants shall then pay the
reasonable rent to the plaintiffs upon such terms and conditions
that they may agree. In case of disagreement, the trial court shall
fix the terms thereof. Of course, defendants may demolish or
remove the said portion of their house, at their own expense, if
they so decide.
DECISION
GANCAYCO, J p:
In this appeal from the decision of the Court of First Instance (CFI)
of Cebu, certified to this Court by the Court of Appeals on account
of the question of law involved, the sole issue is the applicability of
the provisions of Article 448 of the Civil Code relating to a builder
in good faith when the property involved is owned in common.
This case involves a parcel of land, Lot No. 1161 of the Cadastral
Survey of Cebu, with an area of only about 45 square meters,
situated at the corner of F. Flores and Cavan Streets, Cebu City
covered by TCT No. 61850. An action for partition was filed by
plaintiffs in the CFI of Cebu. Plaintiffs and defendants are co-
owners pro indiviso of this lot in the proportion of 2/3 and 1/3 share
each, respectively. The trial court appointed a commissioner in
accordance with the agreement of the parties. The said
commissioner conducted a survey, prepared a sketch plan and
submitted a report to the trial court on May 29, 1976,
recommending that the property be divided into two lots: Lot 1161-
A with an area of 30 square meters for plaintiffs and Lot No. 1161-
B with an area of 15 square meters for the defendants. The houses
of plaintiffs and defendants were surveyed and shown on the
sketch plan. The house of defendants occupied the portion with an
area of 5 square meters of Lot 1161-A of plaintiffs. The parties
manifested their conformity to the report and asked the trial court
to finally settle and adjudicate who among the parties should take
possession of the 5 square meters of the land in question.
In solving the issue the trial court held as follows:
"The Court believed that the plaintiffs cannot be obliged to pay for
the value of the portion of the defendant's house which has
encroached an area of five (5) sq. meters of the land allotted to
them. The defendants cannot also be obliged to pay for the price
of the said five (5) square meters. The rights of a builder in good
faith under Article 448 of the New Civil Code does (sic) not apply
to a case where one co-owner has built, planted or sown on the
land owned in common. 'Manresa agreeing with Sanchez Roman,
says that as a general rule this article is not applicable because
the matter should be governed more by the provisions on co-
ownership than on accession. Planiol and Ripert are also of the
opinion that this article is not applicable to a co-owner who
constructs, plants or sows on the community property, even if the
land where the construction, planting or sowing is made is later
allotted to another co-owner in the partition. The co-owner is not a
third person under the circumstances, and the situation is
governed by the rules of co-ownership. Our Court of Appeals has
held that this article cannot be invoked by one co-owner against
another who builds, plants or sows upon their land, since the latter
does not do so on land not belonging to him.' (Tolentino, Civil Code
of the Philippines, Vol. II, p. 102, citing 3 Manresa 215, 3 Planiol
and Ripert 245, and Viuda de Arias vs. Aguilar, (C A.), O.G. Supp.,
Aug. 30, 1941, p. 126). In the light of the foregoing authorities and
considering that the defendants have expressed their conformity
to the partition that was made by the commissioner as shown in
the sketch plan attached to the commissioner's report, said
defendants have no other alternative except to remove and
demolish part of their house that has encroached an area of five
(5) sq. meters of the land allotted to the plaintiffs. LLphil
"WHEREFORE, judgment is hereby rendered assigning Lot 1161-
A with an area of thirty (30) sq. meters to the plaintiffs spouses
Concepcion Fernandez del Campo and Estanislao del Campo and
Lot 1161-B with an area of fifteen (15) sq. meters to the defendants
Bernarda Fernandez Abesia, Lourdes Fernandez Rodil, Genaro
Fernandez and Dominga A. Fernandez, in the respective metes
and bounds as shown in the subdivision sketch plan attached to
the Commissioner's Report dated May 29, 1976 prepared by the
Commissioner, Geodetic Engineer Espiritu Bunagan. Further, the
defendants are hereby ordered at their expense to remove and
demolish part of their house which has encroached an area of five
(5) square meters from Lot 1161-A of the plaintiffs; within sixty (60)
days from date hereof and to deliver the possession of the same
to the plaintiffs. For the Commissioner's fee of P400.00, the
defendants are ordered to pay, jointly and severally, the sum of
P133.33 and the balance thereof to be paid by the plaintiffs. The
costs of suit shall be paid by the plaintiffs and the defendants in
the proportion of two-thirds (2/3) and one-third (1/3) shares
respectively. A certified copy of this judgment shall be recorded in
the office of the Register of Deeds of the City of Cebu and the
expense of such recording shall be taxed as a part of the costs of
the action."
Hence, this appeal interposed by the defendants with the following
assignments of errors:
"I
THE TRIAL COURT ERRED IN NOT APPLYING THE RIGHTS
OF A BUILDER IN GOOD FAITH UNDER ART. 448 OF THE NEW
CIVIL CODE TO DEFENDANTS-APPELLANTS WITH RESPECT
TO THAT PART OF THEIR HOUSE OCCUPYING A PORTION
OF THE LOT ASSIGNED TO PLAINTIFFS-APPELLEES.
II
THE TRIAL COURT ERRED IN ORDERING DEFENDANTS-
APPELLANTS TO REMOVE AND DEMOLISH AT THEIR
EXPENSE, THAT PART OF THEIR HOUSE WHICH HAS
ENCROACHED ON AN AREA OF FIVE SQUARE METERS OF
LOT 1161-A OF PLAINTIFFS-APPELLEES."
Article 448 of the New Civil Code provides as follows:
"Art. 448. The owner of the land on which anything has been built,
sown, or planted in good faith, shall have the right to appropriate
as his own the works, sowing or planting, after payment of the
indemnity provided for in articles 546 and 548, or to oblige the one
who built or planted to pay the price of the land, and the one who
sowed, the proper rent. However, the builder or planter cannot be
obliged to buy the land if its value is considerably more than that
of the building or trees. In such case, he shall pay reasonable rent,
if the owner of the land does not choose to appropriate the building
or trees after proper indemnity. The parties shall agree upon the
terms of the lease and in case of disagreement, the court shall fix
the terms thereof." LexLib
The court a quo correctly held that Article 448 of the Civil Code
cannot apply where a co-owner builds, plants or sows on the land
owned in common for then he did not build, plant or sow upon land
that exclusively belongs to another but of which he is a co-owner.
The co-owner is not a third person under the circumstances, and
the situation is governed by the rules of co-ownership. 1
However, when, as in this case, the co-ownership is terminated by
the partition and it appears that the house of defendants overlaps
or occupies a portion of 5 square meters of the land pertaining to
plaintiffs which the defendants obviously built in good faith, then
the provisions of Article 448 of the new Civil Code should apply.
Manresa and Navarro Amandi agree that the said provision of the
Civil Code may apply even when there was co-ownership if good
faith has been established. 2
Applying the afore-said provision of the Civil Code, the plaintiffs
have the right to appropriate said portion of the house of
defendants upon payment of indemnity to defendants as provided
for in Article 546 of the Civil Code. Otherwise, the plaintiffs may
oblige the defendants to pay the price of the land occupied by their
house. However, if the price asked for is considerably much more
than the value of the portion of the house of defendants built
thereon, then the latter cannot be obliged to buy the land. The
defendants shall then pay the reasonable rent to the plaintiffs upon
such terms and conditions that they may agree. In case of
disagreement, the trial court shall fix the terms thereof. Of course,
defendants may demolish or remove the said portion of their
house, at their own expense, if they so decide.
WHEREFORE, the decision appealed from is hereby MODIFIED
by ordering plaintiffs to indemnify defendants for the value of the
said portion of the house of defendants in accordance with Article
546 of the Civil Code, if plaintiffs elect to appropriate the same.
Otherwise, the defendants shall pay the value of the 5 square
meters of land occupied by their house at such price as may be
agreed upon with plaintiffs and if its value exceeds the portion of
the house that defendants built thereon, the defendants may
choose not to buy the land but defendants must pay a reasonable
rental for the use of the portion of the land of plaintiffs as may be
agreed upon between the parties. In case of disagreement, the
rate of rental shall be determined by the trial court. Otherwise,
defendants may remove or demolish at their own expense the said
portion of their house. No costs. cdrep
SO ORDERED.
||| (Spouses Del Campo v. Abesia, G.R. No. L-49219, [April 15,
1988], 243 PHIL 532-537)
Pacific Forms, Inc. v. Esguerra 30 SCRA 684
EN BANC
[G.R. No. L-21783. November 29, 1969.]
PACIFIC FARMS, INC., plaintiff-appellee, vs. SIMPLICIO G.
ESGUERRA, ET AL., defendants, CARRIED LUMBER
COMPANY, defendant-appellant.
Primicias, Del Castillo, Macaraeg & T. P. Regino for defendant-
appellant.
Araneta & Araneta for plaintiff-appellee.
SYLLABUS
1. CIVIL LAW; OBLIGATIONS AND CONTRACTS;
PREFERENCE OF CREDITS; CASE OF DE BARRETTO, ET AL.
vs. VILLANUEVA, ET AL. INAPPLICABLE IN INSTANT CASE.
The case of De Barretto, et al. vs. Villanueva, et al. which
concerned not one but two or more preferred creditors who,
pursuant to Articles 2242 and 2249 of the Civil Code, must
necessarily be convened and the nature and extent of their
respective claims ascertained, is inapplicable to the instant case
which does not involve a question of preference of credits, and is
not one where two or more creditors have separate and distinct
claims against the same debtor who has insufficient property. This
case concerns the claim of an unpaid furnisher of construction
materials of a building subsequently sold by its previous owner to
another.
2. ID.; ID.; ID.; APPLICABILITY. It is a matter of necessity and
logic that the question of preference should arise only where the
debtor cannot pay his debts in full. For, if debtor A is able in full to
pay all his three creditors, B, C, and D, how can the need arise for
determining which of the three creditors shall be paid first or
whether they shall be paid out of the proceedings of a specific
property?
3. ID.; PROPERTY; ACCESSION ON LAND; RULE. Article 447
of the Civil Code contemplates a principal and an accessory, the
land being considered the principal, and the plantings,
constructions or works, the accessory. The owner of the land who
in good faith whether personally or through another makes
constructions or works thereon, using materials belonging to
somebody else, becomes the owner of the said materials with the
obligation however of paying for their value. The owner of the
materials, on the other hand, is entitled to remove them, provided
no substantial injury is caused to the landowner. Otherwise, he has
the right only to reimbursement for the value of his materials.
4. ID.; ID.; ID.; RULE APPLIED BY ANALOGY ON BUILDINGS.
Although it does not appear from the records of this case that
the land upon which the six buildings were built is owned by the
appellee, nevertheless, that the appellee claims that it owns the
six buildings constructed out of the lumber and construction
materials furnished by the appellant, is indubitable. Therefore,
applying Article 447 by analogy, we perforce consider the buildings
as the principal and the lumber and construction materials that
went into their construction as the accessory. Thus the appellee
must bear the obligation to pay for the value of the said materials;
the appellant which apparently has no desire to remove the
materials, and, even if it were minded to do so, cannot remove
them without necessarily damaging the buildings has the
corresponding right to recover the value of the unpaid lumber and
construction materials.
5. ID.; ID.; ID.; COMPENSATION FOR ACCESSION; PERSON
BENEFITING THEREFROM OBLIGED TO PAY. Well-
established in jurisprudence is the rule that compensation should
be borne by the person who has been benefited by the accession.
No doubt, the appellee benefited from the accession, i.e., from the
lumber and materials that went into construction of the six
buildings. It should therefore shoulder the compensation due to
the appellant as unpaid furnisher of materials.
6. ID.; ID.; ID.; ID.; APPELLEE NOT BUYER IN GOOD FAITH
AND FOR VALUE WILL NOT BE EXONERATED FROM MAKING
COMPENSATION. The character of a buyer in good
faith and for value, if really possessed by appellee, could possibly
exonerate it from making compensation. But the appellee's stance
that it is an innocent purchaser for value and good faith is open to
grave doubt because of certain facts of substantial import that
cannot escape notice. In the deed of absolute sale, the Insular
Farms, Inc. (vendor) was represented in the contract by its
president, J. Antonio Araneta. The latter was a director of the
appellee (Pacific Farms, Inc.) and was the counsel who signed the
complaint filed by the appellee in the court below. J. Antonio
Araneta was, therefore, not only the president of the Insular
Farms, Inc. but also a director and counsel of the appellee. It is
reasonable therefore to conclude that the appellee, through its
director and counsel, J. Antonio Araneta, knew about the unpaid
balance of the purchase price of the lumber and construction
materials supplied or furnished by the appellant to the Insular
Farms, Inc.
7. ID.; ID.; ID.; UNPAID FURNISHER OF MATERIALS ENTITLED
TO REIMBURSEMENT. An unpaid furnisher of materials has a
right to reimbursement for the value of its unpaid materials and he
could pursue any remedy available to it under the law in order to
enforce said right. Thus, in the instant case the appellant acted
correctly in bringing an action against the Insular Farms, Inc. and
enforcing its right of reimbursement through the execution of the
final judgment it obtained in the case against the six buildings in
the possession of the appellee who now stands to benefit
therefrom. It follows, as a necessary corollary, that the sale at
public auction conducted by the defendant sheriff of the six
buildings described in the certificate of sale dated February 12,
1962, was valid and effective.
DECISION
CASTRO, J p:
Before us for review, on appeal by the defendant Carried Lumber
Company (hereinafter referred to as the Company), is the
decision, dated May 30, 1962, of the Court of First Instance of
Pangasinan in Civil case D-1317, annulling the levy and certificate
of sale covering six buildings owned by the plaintiff Pacific Farms,
Inc., executed by the defendant deputy provincial sheriff Simplicio
G. Esguerra in favor of the Company to satisfy a money judgment
against the Insular Farms, Inc., the plaintiff's predecessor-in-
interest over the said buildings.
The environmental setting is uncontroverted.
On several occasions from October 1, 1956 to March 2, 1957 the
Company sold and delivered lumber and construction materials to
the Insular Farms, Inc. which the latter used in the construction of
the aforementioned six buildings at its compound in Bolinao,
Pangasinan, of the total procurement price of P15,000, the sum of
P4,710.18 has not been paid by Insular Farms, Inc. Consequently,
on October 17, 1958 the Company instituted civil case D-775 with
the Court of First Instance of Pangasinan to recover the said
unpaid balance from the Insular Farms, Inc. On August 23, 1961
the trial court rendered judgment sustaining the Company's claim.
The judgment-debtor did not appeal; so on December 19, 1961
the corresponding writ of execution was issued. On January 16,
1962 the defendant sheriff levied upon the six buildings. On
January 30, 1962 the Pacific Farms, Inc. filed a third-party claim,
subscribed by its corporate president, asserting ownership over
the levied buildings which it had acquired from the Insular Farms,
Inc. by virtue of a deed of absolute sale executed on March 21,
1958, about seven months before the Company filed the above-
mentioned action (civil case D-775). Shielded by an indemnity
bond of P7,120 put up by the Company and the Cosmopolitan
Insurance Company, Inc., the sheriff proceeded with the
announced public auction on February 12, 1962 and sold the
levied buildings to the Company for P6,110.78.
Asserting absolute and exclusive ownership of the buildings in
question, the Pacific Farms, Inc. filed a complaint on May 14, 1962
against the Company and the sheriff with the court a quo, praying
that judgment be rendered, (a) declaring null and void the levy and
judicial sale of the six buildings, and (b) adjudging the defendants
jointly and severally liable to the plaintiff in the sum of P2,000 by
way of actual damages and for such amount as the court may
deem proper and just to impose by way of exemplary damages
and for costs of the suit.
After due trial, the court a quo on May 30, 1963 rendered judgment
annulling the levy of January 16, 1962 and the certificate of sale of
February 12, 1962. The court, however, denied the plaintiff's claim
for actual and exemplary damages on the ground that it was not
"prepared to find that there was gross negligence or bad faith on
the part of any of the defendants."
Hence this appeal, imputing errors which, according to the
appellant's formulation, are the following:
"1. The lower court erred in holding that the credit of the defendant-
appellant, Carried Lumber Company, against the Insular Farms,
Inc., consisting of the value of lumber and construction materials
used in the buildings which were later acquired by the Pacific
Farms, Inc., the appellee, was not a statutory lien on those
buildings;
"2. The lower court, likewise, erred in holding that the doctrine laid
down in De Barretto, et al. vs. Villanueva, et al. (G.R. No. L-14938,
December 29, 1962) is applicable to the facts of this case as found
by said court; and
"3. The lower court erred, finally, in declaring that the sale at public
auction conducted by the defendant deputy provincial sheriff of
Pangasinan, covering the six buildings described in the certificate
of sale dated February 12, 1962, was null and void."
1. In ruling against the appellant below, the trial court relied mainly
on the resolution ( on the motion for reconsideration) promulgated
on December 29, 1962 by this Court in De Barretto, et al. vs.
Villanueva, et al., L-14938 (6 SCRA 928). The said case, however,
is inapplicable because it concerned not one but two or more
preferred creditors who, pursuant to articles 2242 and 2249 of the
Civil Code, must necessarily be convened and the nature and
extent of their respective claims ascertained. Thus, we held that
before there can be a pro rata payment of credits entitled to
preference as to the same specific real property, there must first
be some proceeding where the claims of all the preferred creditors
may be bindingly adjudicated, such as insolvency, the settlement
of a decedent's estate under Rule 87 of the Rules of Court, or
liquidation proceedings of similar import.
But the case before us does not involve a question of preference
of credits, and is not one where two or more creditors have
separate and distinct claims against the same debtor who has
insufficient property. Indeed, it is a matter of necessity and logic
that the question of preference should arise only where the debtor
cannot pay his debts in full. For, if debtor A is able in full to pay all
his three creditors, B, C, and D, how can the need arise for
determining which of the three creditors shall be paid first or
whether they shall be paid out of the proceeds of a specific
property?
2. It is undenied and undeniable that the appellant furnished
lumber and construction materials to the Insular Farms, Inc. (the
appellee's predecessor-in-interest) which the latter used in the
construction of the six buildings. Likewise unchallenged is the
lower court's factual finding that out of the total procurement price
of P15,000, the amount of P4,710.18 remains outstanding and
unpaid by the Insular Farms, Inc. The appellant is therefore an
unpaid furnisher of materials. Whether there exists a
materialman's lien over the six buildings in favor of the appellant,
is a question we do not here decide. To our mind the application
by analogy of the rules of accession would suffice for a just
adjudication.
Article 447 of the Civil Code 1 provides:
"The owner of the land who makes thereon personally or through
another, plantings, constructions or works with the materials of
another, shall pay their value; and, if he acted in bad faith, he shall
also be obliged to the reparation of damages. The owner of the
materials shall have the right to remove them only in case he can
do so without injury to the work constructed, or without the
plantings, constructions or works being destroyed. However, if the
landowner acted in bad faith, the owner of the materials may
remove them in any event with a right to be indemnified for
damages."
The abovequoted legal provision contemplates a principal and an
accessory, the land being considered the principal, and the
plantings, constructions or works, the accessory. The owner of the
land who in good faith whether personally or through another
makes constructions or works thereon, using materials
belonging to somebody else, becomes the owner of the said
materials with the obligation however of praying for their
value. 2 The owner of the materials, on the other hand, is entitled
to remove them, provided no substantial injury is caused to the
landowner. Otherwise, he has the right to reimbursement for the
value of his materials.
Although it does not appear from the records of this case that the
land upon which the six buildings were built is owned by the
appellee, nevertheless, that the appellee claims that it owns the
six buildings constructed out of the lumber and construction
materials furnished by the appellant, is indubitable. Therefore,
applying article 447 by analogy, we perforce consider the buildings
as the principal and the lumber and construction materials that
went into their construction as the accessory. Thus the appellee, if
it does own the six buildings, must bear the obligation to pay for
the value of the said materials; the appellant which apparently
has no desire to remove the materials, and even if it were minded
to do so, cannot remove them without necessarily damaging the
buildings has the corresponding right to recover the value of the
unpaid lumber and construction materials.
Well-established in jurisprudence is the role that compensation
should be borne by the person who has been benefited by the
accession. 3 No doubt, the appellee benefited from the accession,
i.e., from the lumber and materials that went into the construction
of the six buildings. It should therefore shoulder the compensation
due to the appellant as unpaid furnisher of materials.
Of course, the character of a buyer in good faith and for value, if
really possessed by the appellee, could possibly exonerate it from
making compensation.
But the appellee's stance that it is an innocent purchaser for value
and in good faith is open to grave doubt because of certain facts
of substantial import (evident from the records) that cannot escape
notice.
In the deed of absolute sale, exhibit 1, the Insular Farms, Inc.
(vendor) was represented in the contract by its president, J.
Antonio Araneta. The latter was a director of the appellee (Pacific
Farms, Inc.) and was the counsel who signed the complaint filed
by the appellee in the court below. J. Antonio Araneta was,
therefore, not only the president of the Insular Farms, Inc. but also
a director and counsel of the appellee.
During the trial of civil case D-775 the Insular Farms, Inc. was
represented by Attorney Amado Santiago, Jr. of the law firm of J.
Antonio Araneta. The latter was one of the counsels of the Pacific
Farms, Inc. The appellee cannot claim ignorance of the pendency
of civil case D-775 because the Insular Farms, Inc. was defended
by the same lawyer from the same law firm that commenced the
present action. J. Antonio Araneta, as counsel for the Pacific
Farms, Inc., cannot close his eyes to facts of which he as president
of the Insular Farms, Inc. had actual knowledge. Significantly,
exhibit 1 (supra) itself shows that the Insular Farms, Inc. and the
Pacific Farms, Inc. were housed in adjacent rooms (nos. 304 and
303, respectively), of the same building, the Insular Life Building,
as early as March 21, 1958.
It is reasonable therefore to conclude that the appellee, through its
director and counsel, J. Antonio Araneta, knew about the unpaid
balance of the purchase price of the lumber and construction
materials supplied or furnished by the appellant to the Insular
Farms, Inc.
Parenthetically, it is likewise worth our attention that despite the
appellee's knowledge of the suit instituted by the appellant against
the Insular Farms, Inc. (the appellee's predecessor-in-interest) for
the recovery of the unpaid balance of the purchase price of the
lumber and materials used in the construction of its six buildings,
it merely folded its arms in disinterest and waited, so to speak. Not
until a decision was rendered therein in favor of the appellant, a
writ of execution issued, and the six buildings levied upon by the
sheriff, did it file a third-party claim over the levied buildings. In the
face of the knowledge that its predecessor-in-interest had not fully
paid for the lumber and construction materials used in the six
buildings it had purchased, its natural and expected reaction
should have been to intervene in the suit filed by the appellant
against the Insular Farms, Inc. and hold the latter to account for
breach of the warranties deemed included in the deed of absolute
sale conveying said building to it.
Curiously enough, although the six buildings in question were
supposedly sold by the Insular Farms to the appellee on March 21,
1958, as evidenced by the deed of absolute sale (exhibit 1), about
seven months before the appellant filed civil case D-775, the
Insular Farms, Inc. never moved to implead the appellee therein
as a necessary party-defendant, and remained completely and
strangely silent about the sale. It is not amiss to surmise that it is
entirely possible that the Insular Farms, Inc. and the appellee
chose to remain silent in the hope that the appellant's claim against
the Insular Farms, Inc. in civil case D-775 would be dismissed or
non-suited.
Moreover, the appellee was in a better position to protect its
interest. It knew that the Insular Farms, Inc., its predecessor-in-
interest, was a mere lessee of the premises on which the buildings
were located. This should have placed it on guard and compelled
it to ascertain the circumstances surrounding the construction of
the said buildings on the premises.
On the other hand, the appellant was not as advantageously
situated as the appellee. There being no separate registry of
property for buildings and no procedure provided by law for
registering or annotating the claim of an unpaid furnisher of
materials, it was helpless to prevent the sale of the property built
from lumber and construction materials it furnished. But certainly,
because it has a right, pursuant to article 447, supra, to
reimbursement for the value of its unpaid materials, the appellant
could pursue any remedy available to it under the law in order to
enforce the said right. Thus, the appellant acted correctly in
bringing an action (D-775) against the Insular Farms, Inc. and
enforcing its right of reimbursement through the execution of the
final judgment it obtained in the said case against the six buildings
in the possession of the appellee who now stands to benefit
therefrom. It follows, as a necessary corollary, that the sale at
public auction conducted by the defendant sheriff of the six
buildings described in the certificate of sale dated February 12,
1962, exhibit 7, was valid and effective.
ACCORDINGLY, the judgment a quo is reversed, and the
complaint is hereby dismissed.
In view, however, of the equities clearly attendant in this case, it is
the sense of this Court that the plaintiff-appellee Pacific Farms,
Inc. should be, as it is hereby, granted a period of thirty (30) days
from the date this judgment becomes final, within which it may
exercise the option of redeeming the six buildings, by paying to the
defendant-appellant Carried Lumber Company the sum of
P4,710.18, with legal interest from September 23, 1961 (the date
the judgment in civil case D-775 became final), until the said
amount shall have been fully paid.
No pronouncement as to costs.
||| (Pacific Farms, Inc. v. Esguerra, G.R. No. L-21783, [November
29, 1969], 141 PHIL 370-379)
Pecson v. Court of Appeals 244 SCRA 407
FIRST DIVISION
[G.R. No. 115814. May 26, 1995.]
PEDRO P. PECSON, petitioner, vs. COURT OF APPEALS,
SPOUSES JUAN NUGUID and ERLINDA
NUGUID, respondents.
Barbers Molina & Tamargo for petitioner.
Benjamin C. Reyes for private respondents.
SYLLABUS
1. CIVIL LAW; PROPERTY; RIGHT OF ACCESSION; RULE ON
BUILDER, SOWER PLANTER DOES NOT APPLY IN CASE THE
OWNERSHIP OF THE LAND IS LOST BY SALE OR DONATION.
By its clear language, Article 448 refers to a land whose
ownership is claimed by two or more parties, one of whom has
built some works, or sown or planted something. The building,
sowing or planting may have been made in good faith or in bad
faith. The rule on good faith laid down in Article 526 of the Civil
Code shall be applied in determining whether a builder, sower or
planter had acted in good faith. Article 448 does not apply to a
case where the owner of the land is the builder, sower, or planter
who then later loses ownership of the land by sale or donation.
This Court said so in Coleongco vs. Regalado, 92 Phil. 387 [1952],
(See EDGARDO L. PARAS, Civil Code of the Philippines
Annotated, vol. Two, Eleventh ed. [1984], 192) Article 361 of the
old Civil Code is not applicable in this case, for Regalado
constructed the house on his own land before he sold said land to
Coleongco. Article 361 applies only in cases where a person
constructs a building on the land of another in good or in bad faith,
as the case may be. It does not apply to a case where a person
constructs a building on his own land, for then there can be no
question as to good or bad faith on the part of the builder. Elsewise
stated, where the true owner himself is the builder of works on his
own land, the issue of good faith or bad faith is entirely irrelevant.
2. ID.; ID.; POSSESSION, REIMBURSEMENT OF NECESSARY
AND USEFUL EXPENSES; WHEN APPLICABLE. The
objective of Article 546 of the Civil Code is to administer justice
between the parties involved. In this regard, this Court had long
ago stated in Rivera vs. Roman Catholic Archbishop of Manila, (40
Phil. 717 [1920]) that the said provision was formulated in trying to
adjust the rights of the owner and possessor in good faith of a
piece of land, to administer complete justice to both of them in such
a way as neither one nor the other may enrich himself of that which
does not belong to him. Guided by this precept, it is therefore the
current market value of the improvements which should be made
the basis of reimbursement. A contrary ruling would unjustly enrich
the private respondents who would otherwise be allowed to
acquire a highly value income-yielding four-unit apartment building
for a measly amount. Consequently, the parties should therefore
be allowed to adduce evidence on the present market value of the
apartment building upon which the trial court should base its
finding as to the amount of reimbursement to be paid by the
landowner. The trial court also erred in ordering the petitioner to
pay monthly rentals equal to the aggregate rentals paid by the
lessees of the apartment building. Since the private respondents
had opted to appropriate the apartment building, the petitioner is
thus entitled to the possession and enjoyment of the apartment
building, until he is paid the proper indemnity, as well as of the
portion of the lot where the building has been constructed. This is
so because the right to retain the improvements while the
corresponding indemnity is not paid implies the tenancy or
possession in fact of the land on which it is built, planted or sown.
The petitioner not having been so paid, he was entitled to retain
ownership of the building and, necessarily, the income therefrom.
DECISION
DAVIDE, JR., J p:
This petition for review on certiorari seeks to set aside the
decision 1 of the Court of Appeals in CA-G.R. SP No. 32679
affirming in part the order 2 of the Regional Trial Court (RTC) of
Quezon City, Branch 101, in Civil Case No. Q-41470.
The factual and procedural antecedents of this case as gathered
from the record are as follows:
Petitioner Pedro P. Pecson was the owner of a commercial lot
located in Kamias Street, Quezon City, on which he built a four-
door two-storey apartment building. For his failure to pay realty
taxes amounting to twelve thousand pesos (P12,000.00), the lot
was sold at public auction by the City Treasurer of Quezon City to
Mamerto Nepomuceno who in turn sold it on 12 October 1983 to
the private respondents, the spouses Juan Nuguid and Erlinda
Tan-Nuguid, for one hundred three thousand pesos
(P103,000.00). LLphil
The petitioner challenged the validity of the auction sale in Civil
Case No. Q-41470 before the RTC of Quezon City. In its decision
of 8 February 1989, the RTC dismissed the complaint, but as to
the private respondent's claim that the sale included the apartment
building, it held that the issue concerning it was "not a subject of
the . . . litigation." In resolving the private respondent's motion to
reconsider this issue, the trial court held that there was no legal
basis for the contention that the apartment building was included
in the sale. 3
Both parties then appealed the decision to the Court of Appeals.
The case was docketed as CA-G.R. CV No. 2931. In its decision
of 30 April 1992,4 the Court of Appeals affirmed in toto the
assailed decision. It also agreed with the trial court that the
apartment building was not included in the auction sale of the
commercial lot. Thus:
Indeed, examining the record we are fully convinced that it was
only the land without the apartment building which was sold
at the auction sale, for plaintiff's failure to pay the taxes due
thereon. Thus, in the Certificate of Sale of Delinquent Property To
Purchaser (Exh. K, p. 352, Record) the property subject of the
auction sale at which Mamerto Nepomuceno was the purchaser is
referred to as Lot No. 21-A, Block No. K-34, at Kamias, Barangay
Piahan, with an area of 256.3 s.q.m., with no mention
whatsoever, of the building thereon. The same description of the
subject property appears in the Final Notice To Exercise The Right
of Redemption (over subject property) dated September 14, 1981
(Exh. L, p. 353, Record) and in the Final Bill of Sale over the same
property dated April 19, 1982 (Exh. P, p. 357, Record). Needless
to say, as it was only the land without any building which
Nepomuceno had acquired at the auction sale, it was also only
that land without any building which he could have legally sold to
the Nuguids. Verily, in the Deed of Absolute Sale of Registered
Land executed by Mamerto Nepomuceno in favor of the Nuguids
on October 25, 1983 (Exh. U, p. 366, Record) it clearly appears
that the property subject of the sale for P103,000.00 was only the
parcel of land, Lot 21-A, Blk. K-34 containing an area of 256.3 sq.
meters, without any mention of any improvement, much less any
building thereon. (Emphases supplied)
The petition to review the said decision was subsequently denied
by this Court. 5 Entry of judgment was made on 23 June 1993. 6
On November 1993, the private respondents filed with the trial
court a motion for delivery of possession of the lot and the
apartment building, citing Article 546 of the Civil Code. 7 Acting
thereon, the trial court issued on 15 November 1993 the
challenged order 8 which reads as follows:
Submitted for resolution before this Court is an uncontroverted
[sic] for the Delivery of Possession filed by defendants Erlinda Tan,
Juan Nuguid, et al. considering that despite personal service of the
Order for plaintiff to file within five (5) days his opposition to said
motion, he did not file any.
In support of defendant's motion, movant cites the law in point as
Article 546 of the Civil Code . . .
Movant agrees to comply with the provisions of the law considering
that plaintiff is a builder in good faith and he has in fact, opted to
pay the cost of the construction spent by plaintiff. From the
complaint itself the plaintiff stated that the construction cost of the
apartment is much more than the lot, which apartment he
constructed at a cost of P53,000.00 in 1965 (par. 8 complaint).
This amount of P53,000.00 is what the movant is supposed to pay
under the law before a writ of possession placing him in
possession of both the lot and apartment would be issued.
However, the complaint alleges in paragraph 9 that three doors of
the apartment are being leased. This is further confirmed by the
affidavit of the movant presented in support of the motion that said
three doors are being leased at a rental of P7,000.00 a month
each. The movant further alleges in his said affidavit that the
present commercial value of the lot is P10,000.00 per square
meter or P2,500,000.00 and the reasonable rental value of said lot
is no less than P21,000.00 per month.
The decision having become final as per Entry of Judgment dated
June 23, 1993 and from this date on, being the uncontested owner
of the property, the rents should be paid to him instead of the
plaintiff collecting them. From June 23, 1993, the rents collected
by the plaintiff amounting to more than P53,000.00 from tenants
should be offset from the rents due to the lot which according to
movant's affidavit is more than P21,000.00 a month.
WHEREFORE, finding merit in the Motion, the Court hereby grants
the following prayer that:
1. The movant shall reimburse plaintiff the construction cost of
P53,000.00.
2. The payment of P53,000.00 as reimbursement for the
construction cost, movant Juan Nuguid is hereby entitled to
immediate issuance of a writ of possession over the lot and
improvements thereon.
3. The movant having been declared as the uncontested owner of
the lot in question as per Entry of Judgment of the Supreme Court
dated June 23, 1993, the plaintiff should pay rent to the movant of
no less than P21,000.00 per month from said date as this is the
very same amount paid monthly by the tenants occupying the lot.
4. The amount of P53,000.00 due from the movant is hereby offset
against the amount of rents collected by the plaintiff from June 23,
1993, to September 23, 1993."
SO ORDERED.
The petitioner moved for the reconsideration of the order but it was
not acted upon by the trial court. Instead, on 18 November 1993,
it issued a writ of possession directing the deputy sheriff "to place
said movant Juan Nuguid in possession of subject property
located at No. 79 Kamias Road, Quezon City, with all the
improvements thereon and to eject therefrom all occupants
therein, their agents, assignees, heirs and representatives." 9
The petitioner then filed with the Court of Appeals a special civil
action for certiorari and prohibition assailing the order of 15
November 1993, which was docketed as CA-G.R. SP No.
32679. 10 In its decision of 7 June 1994, the Court of Appeals
affirmed in part the order of the trial court citing Articles 448 of the
Civil Code. In disposing of the issues, it stated: prLL
As earlier pointed out, private respondents opted to appropriate
the improvement introduced by petitioner on the subject lot, giving
rise to the right of petitioner to be reimbursed of the cost of
constructing said apartment building, in accordance with Article
546 of the . . . Civil Code, and of the right to retain the
improvements until he is reimbursed of the cost of the
improvements, because, basically, the right to retain the
improvement while the corresponding indemnity is not paid implies
the tenancy or possession in fact of the land on which they are
built . . . . [2 TOLENTINO, CIVIL CODE OF THE PHILIPPINES
(1992) p. 112]. With the facts extant and the settled principle as
guides, we agree with petitioner that respondent judge erred in
ordering that "the movant having been declared as the
uncontested owner of the lot in question as per Entry of Judgment
of the Supreme Court dated June 23, 1993, the plaintiff should pay
rent to the movant of no less than P21,000.00 per month from said
date as this is the very same amount paid monthly by the tenants
occupying the lot."
We, however, agree with the finding of respondent judge that the
amount of P53,000.00 earlier admitted as the cost of constructing
the apartment building can be offset from the amount of rents
collected by petitioner from June 23, 1993 up to September 23,
1993 which was fixed at P7,000.00 per month for each of the three
doors. Our underlying reason is that during the period of retention,
petitioner as such possessor and receiving the fruits from the
property, is obliged to account for such fruits, so that the amount
thereof may be deducted from the amount of indemnity to be paid
to him by the owner of the land, in line with Mendoza vs. De
Guzman, 52 Phil. 164. . . .
The Court of Appeals then ruled as follows:
WHEREFORE, while it appears that private respondents have not
yet indemnified petitioner with the cost of the improvements, since
Annex I shows that the Deputy Sheriff has enforced the Writ of
Possession and the premises have been turned over to the
possession of private respondents, the quest of petitioner that he
be restored in possession of the premises is rendered moot and
academic, although it is but fair and just that private respondents
pay petitioner the construction cost of P53,000.00; and that
petitioner be ordered to account for any and all fruits of the
improvements received by him starting on June 23, 1993, with the
amount of P53,000.00 to be offset therefrom.
IT IS SO ORDERED. 11
Aggrieved by the Court of Appeals' decision, the petitioner filed the
instant petition.
The parties agree that the petitioner was a builder in good faith of
the apartment building on the theory that he constructed it at the
time when he was still the owner of the lot, and that the key issue
in this case is the application of Articles 448 and 456 of the Civil
Code.
The trial court and the Court of Appeals, as well as the parties,
concerned themselves with the application of Articles 448 and 546
of the Civil Code. These articles read as follows:
Art. 448. The owner of the land on which anything has been built,
sown or planted in good faith, shall have the right to appropriate
as his own the works, sowing or planting, after payment of the
indemnity provided for in articles 546 and 548, or to oblige the one
who built or planted to pay the price of the land, and the one who
sowed, the proper rent. However, the builder or planter cannot be
obliged to buy the land if its value is considerably more than that
of the building or trees. In such case, he shall pay reasonable rent,
if the owner of the land does not choose to appropriate the building
or trees after proper indemnity. The parties shall agree upon the
terms of the lease and in case of disagreement, the court shall fix
the terms thereof. (361a)
xxx xxx xxx
Art. 546. Necessary expenses shall be refunded to every
possessor; but only the possessor in good faith may retain the
thing until he has been reimbursed therefor.
Useful expenses shall be refunded only to the possessor in good
faith with the same right of retention, the person who has defeated
him in the possession having the option of refunding the amount
of the expenses or of paying the increase in value which the thing
may have acquired by reason thereof. (453a)
By its clear language, Article 448 refers to a land whose ownership
is claimed by two or more parties, one of whom has built some
works, or sown or planted something. The building, sowing or
planting may have been made in good faith or in bad faith. The
rule on good faith laid down in Article 526 of the Civil Code shall
be applied in determining whether a builder, sower or planter had
acted in good faith. 12
Article 448 does not apply to a case where the owner of the land
is the builder, sower, or planter who then later loses ownership of
the land by sale or donation. This Court said so in Coleongco vs.
Regalado: 13
Article 361 of the old Civil Code is not applicable in this case, for
Regalado constructed the house on his own land before he sold
said land to Coleongco. Article 361 applies only in cases where a
person constructs a building on the land of another in good or in
bad faith, as the case may be. It does not apply to a case where a
person constructs a building on his own land, for then there can be
no questions as to good or bad faith on the part of the builder.
Elsewise stated, where the true owner himself is the builder of
works on his own land, the issue of good faith or bad faith is
entirely irrelevant. cdll
Thus in strict point of law, Article 448 is not opposite to the case at
bar. Nevertheless, we believe that the provision therein on
indemnity may be applied by analogy considering that the primary
intent of Article 448 is to avoid a state of forced co-ownership and
that the parties, including the two courts below, in the main agree
that Articles 448 and 546 of the Civil Code are applicable and
indemnity for the improvements may be paid although they differ
as to the basis of the indemnity.
Article 546 does not specifically state how the value of the useful
improvements should be determined. The respondent court and
the private respondents espouse the belief that the cost of
construction of the apartment building in 1965, and not its current
market value, is sufficient reimbursement for necessary and useful
improvements made by the petitioner. This position is, however,
not in consonance with previous rulings of this Court in similar
cases. In Javier vs. Concepcion, Jr., 14 this Court pegged the
value of the useful improvements consisting of various fruits,
bamboos, a house and camarin made of strong material based on
the market value of the said improvements. In Sarmiento vs.
Agana, 15 despite the finding that the useful improvement, a
residential house, was built in 1967 at a cost of between eight
thousand pesos (P8,000.00) to ten thousand pesos (P10,000.00),
the landowner was ordered to reimburse the builder in the amount
of forty thousand pesos (P40,000.00), the value of the house at
the time of the trial. In the same way, the landowner was required
to pay the "present value" of the house, a useful improvement, in
the case of De Guzman vs. De la Fuente, 16 cited by the
petitioner. LLjur
The objective of Article 546 of the Civil Code is to administer justice
between the parties involved. In this regard, this Court had long
ago stated in Rivera vs. Roman Catholic Archbishop of
Manila 17 that the said provision was formulated in trying to adjust
the rights of the owner and possessor in good faith of a piece of
land, to administer complete justice to both of them is such a way
as neither one nor the other may enrich himself of that which does
not belong to him. Guided by this precept, it is therefore the current
market value of the improvements which should be made the basis
of reimbursement. A contrary ruling would unjustly enrich the
private respondents who would otherwise be allowed to acquire a
highly valued income-yielding four-unit apartment building for a
measly amount. Consequently, the parties should therefore be
allowed to adduce evidence on the present market value of the
apartment building upon which the trial court should base its
finding as to the amount of reimbursement to be paid by the
landowner.
The trial court also erred in ordering the petitioner to pay monthly
rentals equal to the aggregate rentals paid by the lessees of the
apartment building. Since the private respondents have opted to
appropriate the apartment building, the petitioner is thus entitled to
the possession and enjoyment of the apartment building, until he
is paid the proper indemnity, as well as of the portion of the lot
where the building has been constructed. This is so because the
right to retain the improvements while the corresponding indemnity
is not paid implies the tenancy or possession in fact of the land in
which it is built, planted or sown. 18 The petitioner not having been
so paid, he was entitled to retain ownership of the building and,
necessarily, the income therefrom.
It follows, too, that the Court of Appeals erred not only in upholding
the trial court's determination of the indemnity, but also in ordering
the petitioner to account for the rentals of the apartment building
from 23 June 1993 to 23 September 1993. LLpr
WHEREFORE, the decision of the Court of Appeals in CA-G.R.
SP No. 32679 and the Order of 15 November 1993 of the Regional
Trial Court, Branch 101, Quezon City in Civil Case No. Q-41470
are hereby SET ASIDE.
The case is hereby remanded to the trial court for it to determine
the current market value of the apartment building on the lot. For
this purpose, the parties shall be allowed to adduce evidence on
the current market value of the apartment building. The value so
determined shall be forthwith paid by the private respondents to
the petitioner otherwise the petitioner shall be restored to the
possession of the apartment building until payment of the required
indemnity.
No costs.
SO ORDERED.
||| (Pecson v. Court of Appeals, G.R. No. 115814, [May 26, 1995],
314 PHIL 313-326)
c. Good Faith
CASES:
Technogas Philippines v. Court of Appeals 268
SCRA 5
Pleasantville Devt corp. v. Court of Appeals 253
SCRA 10
Geminiano v. Court of Appeals 259 SCRA 344
ii. Accession Natural
a. Alluvium or Alluvion (Arts. 457-458)
CASES:
Agustin v. Intermediate Appellate Court 187 SCRA 218
FIRST DIVISION
[G.R. Nos. 66075-76. July 5, 1990.]
EULOGIO AGUSTIN, HEIRS OF BALDOMERO LANGCAY,
ARTURO BALISI & JUAN
LANGCAY, petitioners, vs. INTERMEDIATE APPELLATE
COURT, MARIA MELAD, TIMOTEO MELAD, PABLO BINAYUG
& GERONIMA UBINA, respondents.
Antonio N. Laggui for petitioners.
Pedro R. Perez, Jr. for private respondents.
DECISION
GRIO-AQUINO, J p:
The Cagayan River separates the towns of Solana on the west
and Tuguegarao on the east in the province of Cagayan.
According to the unrebutted testimony of Romeo Rigor, Geodetic
Engineer of the Bureau of Lands, in 1919 the lands east of the river
were covered by the Tuguegarao Cadastre. In 1925, Original
Certificate of Title No. 5472 was issued for land east of the
Cagayan River owned by defendant-petitioner Eulogio Agustin
(Exh. 2-Agustin).
As the years went by, the Cagayan River moved gradually
eastward, depositing silt on the western bank. The shifting of the
river and the siltation continued until 1968. Cdpr
In 1950, all lands west of the river were included in the Solana
Cadastre. Among these occupying lands covered by the Solana
Cadastre were plaintiffs-private respondents, namely, Pablo
Binayug, who has been in possession of Lots 3349, 7876, 7877,
7878, 7879, 7875, 7881, 7882, 7883, 7884, 7885, 7891 and 7892,
and Maria Melad, who owns Lot 3351 (Exh. 3-Binayug; Exh. B-
Melad). Pablo Binayug began his possession in 1947. An area of
eight (8) hectares was planted to tobacco and corn while 12
hectares were overgrown with talahib(Exh. C-1 Binayug.)
Binayug's Homestead Application No. W-79055 over this land was
approved in 1959 (Exh. B-Binayug). Binayug's possession was
recognized in the decision in Civil Case No. 101 (Exh. F-Binayug).
On the other hand, as a result of Civil Case No. 343-T, Macario
Melad, the predecessor-in-interest of Maria Melad and Timoteo
Melad, was issued Original Certificate of Title No. P-5026 for Lot
3351 of Cad. 293 on June 1, 1956.
Through the years, the Cagayan River eroded lands of the
Tuguegarao Cadastre on its eastern bank among which was
defendant-petitioner Eulogio Agustin's Lot 8457 (Exh. E-Melad),
depositing the alluvium as accretion on the land possessed by
Pablo Binayug on the western bank.
However, in 1968, after a big flood, the Cagayan River changed
its course, returned to its 1919 bed, and, in the process, cut across
the lands of Maria Melad, Timoteo Melad, and the spouses Pablo
Binayug and Geronima Ubina whose lands were transferred on the
eastern, or Tuguegarao side of the river. To cultivate those lots
they had to cross the river.
In April, 1969, while the private respondents and their tenants were
planting corn on their lots located on the eastern side of the
Cagayan River, the petitioners, accompanied by the mayor and
some policemen of Tuguegarao, claimed the same lands as their
own and drove away the private respondents from the premises.
On April 21, 1970, private respondents Maria Melad and Timoteo
Melad filed a complaint (Civil Case No. 343-T) to recover Lot No.
3351 with an area of 5 hectares and its 6.6-hectare accretion. On
April 24, 1970, private respondent Pablo Binayug filed a separate
complaint (Civil Case No. 344-T) to recover his lots and their
accretions.
On June 16, 1975, the trial court rendered a decision, the
dispositive portion of which reads:
"WHEREFORE, premises considered, judgment is hereby made:
"In Civil Case No. 343-T, commanding Eulogio Agustin, Gregorio
Tuliao, Jacinto Buquel and Octavio Bancud, or anybody acting as
their representative[s] or agents to vacate Lot No. 3351 of Solana
Cadastre together with its accretion consisting of portions of Lots
9463, 9462 and 9461 of Tuguegarao Cadastre and for these
defendants to restore ownership in favor of Maria Melad and
Timoteo Melad who are the only interested heirs of Macario Melad.
"In Civil Case No. 344-T, commanding defendants Justo Adduru,
Andres Pastor, Teofilo Tagacay, Vicente Camilan, Nicanor Mora,
Baldomero Cagurangan, Domingo Quilang, Cesar Cabalza, Elias
Macababbad, Titong Macababbad, Arturo Balisi, Jose Allabun,
Eulogio Agustin, Banong Aquino, Junior Cambri and Juan
Langoay, or any of their agents or representatives to vacate the
Lots 3349, 7876, 7877, 7878, 7879, 7875, 7881, 7882, 7883,
7884, 7885, 7891 and 7892, together with its accretion and to
restore possession to plaintiffs Pablo Binayug and Geronimo
Ubina. Without pronouncement as to damages which were not
properly proven and to costs.
"SO ORDERED. (As amended by the order dated August 15,
1975.)" (pp. 24-25, Rollo.)
Only defendant-petitioner Eulogio Agustin appealed in Civil Case
No. 343-T, while in Civil Case No. 344-T, only defendants-
petitioners Eulogio Agustin, Baldomero Cagurangan (substituted
by his heir), Arturo Balisi and Juan Langcay appealed. But upon
motion of plaintiffs-private respondents, the trial court ordered the
execution pending appeal of the judgment in Civil Case No. 344-T
against Cagurangan, Balisi and Langcay on the ground that their
appeal was dilatory as they had not presented evidence at the trial
(Order dated August 15, 1975). prLL
On November 29, 1983, the Intermediate Appellate Court
rendered a decision affirming in toto the judgment of the trial court,
with costs against the defendants-appellants.
In their petition for review of that decision, the petitioners allege
that the Court of Appeals erred:
1. in declaring that the land in question had become part of private
respondents' estate as a result of accretion;
2. in declaring that the accretion to private respondents' estate
which used to pertain to petitioners' estate cannot preclude the
private respondents from being the owners thereof; and
3. in declaring that the ownership of private respondents over the
accretion is not affected by the sudden and abrupt change in the
course of the Cagayan River when it reverted to its old bed.
The petition is unmeritorious and must be denied.
The finding of the Court of Appeals that there had been accretions
to the lots of the private respondents who did not lose the
ownership of such accretions even after they were separated from
the principal lots by the sudden change of course of the river, is a
finding of fact which is conclusive on this Court. That finding is
supported by Art. 457 of the New Civil Code which provides:
"Art. 457. To the owners of lands adjoining the banks of rivers
belong the accretion which they gradually receive from the effects
of the current of the waters. (366)"
Accretion benefits a riparian owner when the following requisites
are present: (1) that the deposit be gradual and imperceptible; (2)
that it resulted from the effects of the current of the water; and (3)
that the land where accretion takes place is adjacent to the bank
of a river (Republic vs. CA, 132 SCRA 514).
All these requisites of accretion are present in this case for, as the
trial court found:
". . . Cagayan River did move year by year from 1919 to 1968 or
for a period of 49 years. Within this period, the alluviun (sic)
deposited on the other side has become greater in area than the
original lands of the plaintiffs in both cases. Still the addition in
every year is imperceptible in nature, one could not discern it but
can be measured after the lapse of a certain time. The testimonial
evidence in these cases that said Cagayan River moved eastward
year by year is overwhelming as against the denial of defendant
Eulogio Agustin alone. Cesar Caronan, one time mayor of Solana,
Cagayan, said so. Arturo Taguian said so. Timoteo Melad said so.
Francisco Ubina said so. Geodetic Engineer Rigor impliedly said
so when he testified that when Solana Cadastre was executed in
1950 it overlapped portions of Tuguegarao Cadastre executed in
1919. This could not have happened if that part of Tuguegarao
Cadastre was not eroded by the overflow of the Cagayan River.
These testimonies cannot be destroyed by the denials of Vicente
Cauilan, Marcelo Agustin and Eulogio Agustin alone. . . ." (p. 27,
Rollo.)
The appellate court confirmed that the accretion on the western
bank of the Cagayan River had been going on from 1919 up to
1968 or for a period of 49 years. It was gradual and imperceptible.
Only when Lot No. 3351, with an original area of 5 hectares
described in the free patent that was issued to Macario Melad in
June 1956, was resurveyed in 1968 did it become known that 6.6
hectares had been added to it. Lot No. 3351, covered by a
homestead patent issued in June, 1950 to Pablo Binayug, grew
from its original area of 18 hectares, by an additional 50 hectares
through alluvium as the Cagayan River gradually moved to the
east. These accretions belong to riparian owners upon whose
lands the alluvial deposits were made (Roxas vs. Tuason, 9 Phil.
408; Director of Lands vs. Rizal, 87 Phil. 806). The reason for this
principle is because, if lands bordering on streams are exposed to
floods and other damage due to the destructive force of the waters,
and if by virtue of law they are subject to encumbrances and
various kinds of easements, it is only just that such risks or
dangers as may prejudice the owners thereof should in some way
be compensated by the right of accretion (Cortes vs. City of
Manila, 10 Phil. 567). cdrep
The private respondents' ownership of the accretion to their lands
was not lost upon the sudden and abrupt change of the course of
the Cagayan River in 1968 or 1969 when it reverted to its old 1919
bed, and separated or transferred said accretions to the other side
(or eastern bank) of the river. Articles 459 and 463 of the New Civil
Code apply to this situation.
"Art. 459. Whenever the current of a river, creek or torrent
segregates from an estate on its bank a known portion of land and
transfers it to another estate, the owner of the land to which the
segregated portion belonged retains the ownership of it, provided
that he removes the same within two years."
"Art. 463. Whenever the current of a river divides itself into
branches, leaving a piece of land or part thereof isolated, the
owner of the land retains his ownership. He also retains it if a
portion of land is separated from the estate by the current.
(Emphasis supplied).
In the case at bar, the sudden change of course of the Cagayan
River as a result of a strong typhoon in 1968 caused a portion of
the lands of the private respondents to be "separated from the
estate by the current." The private respondents have retained the
ownership of the portion that was transferred by avulsion to the
other side of the river. llcd
WHEREFORE, the petition is denied for lack of merit. The decision
of the Intermediate Appellate Court, now Court of Appeals, is
hereby affirmed. Costs against the petitioners.
SO ORDERED.
||| (Agustin v. Intermediate Appellate Court, G.R. Nos. 66075-76,
[July 5, 1990], 265 PHIL 226-234)
Cureg v. Intermediate Appellate Court 177 SCRA 313
4. ID.; OWNERSHIP; ACCESSION; ACCRETION BELONGS TO
OWNERS OF ADJOINING LAND. The "subject land" is an
alluvial deposit left by the northward movement of the Cagayan
River and pursuant to Article 457 of the New Civil Code: "To the
owners of land adjoining the banks of river belong the accretion
which they gradually receive from the effects of the current of the
waters."
5. ID.; ID.; ID.; ID.; THE INCREASE IN THE AREA IS NOT
AUTOMATICALLY REGISTERED EVEN IF THE LOT
RECEIVING THE ACCRETION IS REGISTERED. The
increase in the area of petitioners' land, being an accretion left by
the change of course or the northward movement of the Cagayan
River does not automatically become registered land just because
the lot which receives such accretion is covered by a Torrens title.
(See Grande v. Court of Appeals, L-17652, June 30, 1962). As
such, it must also be placed under the operation of the Torrens
System.
||| (Cureg v. Intermediate Appellate Court, G.R. No. 73465,
[September 7, 1989], 258 PHIL 104-113)
Viajar v. Court of Appeals 168 SCRA 405
2. CIVIL LAW; PROPERTY RIGHTS; ACCRETION;
REGISTRATION DOES NOT PROTECT RIPARIAN OWNERS
AGAINST THE DIMINUTION OF THE AREA THROUGH
GRADUAL CHANGES. Petitioners contend, that the lot in
question having remained the registered land of the petitioners,
then the private respondents cannot acquire title there in
derogation to that of the petitioners, by accretion, for that will
defeat the indefeasibility of a Torrens Title. The rule that
registration under the Torrens System does not protect the riparian
owner against the diminution of the area of his registered land
through gradual changes in the course of an adjoining stream is
well settled. (In Payatas Estate Improvement Co. vs. Tuason, 53
Phil. 55) "The controversy in the present cases seems to be due
to the erroneous conception that Art. 366 of the Civil Code does
not apply to Torrens registered land. That article provides that 'any
accretions which the banks of rivers may gradually receive from
the effects of the current belong to the owners of the estates
bordering thereon.' Accretions of that character are natural
incidents to land bordering on running streams and are not
affected by the registration laws. It follows that registration does
not protect the riparian owner against diminution of the area of his
land through gradual changes in the course of the adjoining
stream." In C.N. Hodges vs. Garcia, 109 Phil. 133, We also ruled:
. . . Registration does not protect the riparian owner against the
diminution of the area of his land through gradual changes in the
course of the adjoining stream. Accretions which the banks of
rivers may gradually receive from the effect of the current become
the property of the owners of the banks (Art. 366 of the Old Civil
Code; Art. 457 of the New). Such accretions are natural incidents
to land bordering on running streams and the provisions of the Civil
Code in that respect are not affected by the Registration Act. We
find no valid reason to review and abandon the aforecited
rulings.||| (Viajar v. Court of Appeals, G.R. No. 77294, [December
12, 1988], 250 PHIL 404-413)
Vda. de Nazareno v. Intermediate Appellate Court 257 SCRA 589
SECOND DIVISION
[G.R. No. 98045. June 26, 1996.]
DESAMPARADO VDA. DE NAZARENO and LETICIA
NAZARENO TAPIA, petitioners, vs. THE COURT OF APPEALS,
MR. & MRS. JOSE SALASALAN, MR. & MRS. LEO RABAYA,
AVELINO LABIS, HON. ROBERTO G. HILARIO, ROLLEO I.
IGNACIO, ALBERTO M. GILLERA and HON. ABELARDO G.
PALAD, JR., in their official and/or private
capacities, respondents.
Manolo L. Tagarda, Sr. for petitioners.
Arturo R. Legaspi for private respondents.
SYLLABUS
1. CIVIL LAW; OWNERSHIP; RIGHTS OF ACCESSION WITH
RESPECT TO IMMOVABLE PROPERTY; ARTICLE 457;
REQUISITES. In the case of Meneses vs. CA, this Court held
that accretion, as a mode of acquiring property under Art. 457 of
the Civil Code, requires the concurrence of these requisites: (1)
that the deposition of soil or sediment be gradual and
imperceptible; (2) that it be the result of the action of the waters of
the river (or sea); and (3) that the land where accretion takes place
is adjacent to the banks of rivers (or the sea coast). These are
called the rules on alluvion which if present in a case, give to the
owners of lands adjoining the banks of rivers or streams any
accretion gradually received from the effects of the current of
waters.
2. ID.; ID.; ID.; ID.; ID.; NOT PRESENT IN CASE AT BAR.
Where the accretion was formed by the dumping of boulders, soil
and other filling materials on portions of the Balacanas Creek and
the Cagayan River bounding petitioner's land, it cannot be claimed
that the accumulation was gradual and imperceptible, resulting
from the action of the waters or the current of the creek and the
river. In Hilario vs. City of Manila, this Court held that the word
"current" indicates the participation of the body of water in the ebb
and flow of waters due to high and low tide. Not having met the
first and second requirements of the rules of alluvion, petitioners
cannot claim the rights of a riparian owner.
3. ID.; ID.; ID.; ID.; ID.; THAT DEPOSIT IS DUE TO THE
CURRENT OF THE RIVER, MANDATORY. In Republic vs. CA,
this Court ruled that the requirement that the deposit should be
due to the effect of the current of the river is indispensable. This
excludes from Art. 457 of the Civil Code all deposits caused by
human intervention. Putting it differently, alluvion must be the
exclusive work of nature. Thus, in Tiongco vs. Director of Lands,
et al., where the land was not formed solely by the natural effect
of the water current of the river bordering said land but is also the
consequence of the direct and deliberate intervention of man, it
was deemed a man-made accretion and as such, part of the public
domain. In the case at bar, the subject land was the direct result
of the dumping of sawdust by the Sun Valley Lumber Co.
consequent to its sawmill operations.
4. ID.; PUBLIC LANDS; FINDINGS AS SUCH BY THE BUREAU
OF LANDS, RESPECTED. The mere filing of the Miscellaneous
Sales Application constituted an admission that the land being
applied for was public land, having been the subject of a Survey
Plan wherein said land was described as an orchard. Furthermore,
the Bureau of Lands classified the subject land as an accretion
area which was formed by deposits of sawdust in the Balacanas
Creek and the Cagayan river, in accordance with the ocular
inspection conducted by the Bureau of Lands. This Court has often
enough held that findings of administrative agencies which have
acquired expertise because their jurisdiction is confined to specific
matters are generally accorded not only respect but even finality.
Again, when said factual findings are affirmed by the Court of
Appeals, the same are conclusive on the parties and not
reviewable by this Court.
5. ID.; PUBLIC LAND LAW; JURISDICTION OVER PUBLIC
LANDS. Having determined that the subject land is a public
land, a fortiori, the Bureau of Lands, as well as the Office of the
Secretary of Agriculture and Natural Resources have jurisdiction
over the same in accordance with the Public Land Law. Under
Sections 3 and 4 thereof, the Director of Lands has jurisdiction,
authority and control over public lands. Here respondent Palad as
Director of Lands, is authorized to exercise executive control over
any form of concession, disposition and management of the lands
of the public domain. He may issue decisions and orders as he
may see fit under the circumstances as long as they are based on
the findings of fact. In the case of Calibo vs. Ballesteros, this Court
held that where, in the disposition of public lands, the Director of
Lands bases his decision on the evidence thus presented, he
clearly acts within his jurisdiction, and if he errs in appraising the
evidence, the error is one of judgment, but not an act of grave
abuse of discretion annullable by certiorari.
6. ADMINISTRATIVE LAW; ADMINISTRATIVE REMEDIES;
EXHAUSTED IN CASE AT BAR. The administrative remedies
have been exhausted. Petitioners could not have intended to
appeal to respondent Ignacio as an Officer-In-Charge of the
Bureau of Lands. The decision being appealed from was the
decision of respondent Hilario who was the Regional Director of
the Bureau of Lands. Said decision was made "for and by authority
of the Director of Lands." It would be incongruous to appeal the
decision of the Regional Director of the Bureau of Lands acting for
the Director of the Bureau of Lands to an Officer-In-Charge of the
Bureau of Lands. In any case, respondent Ignacio's official
designation was "Undersecretary of the Department of Agriculture
and Natural Resources." He was only an "Officer-In-Charge" of the
Bureau of Lands. When he acted on the late Antonio Nazareno's
motion for reconsideration by affirming or adopting respondent
Hilario's decision, he was acting on said motion as an
Undersecretary on behalf of the Secretary of the Department. In
the case of Hamoy vs. Secretary of Agriculture and Natural
Resources, this Court held that the Undersecretary of Agriculture
and Natural Resources may modify, adopt, or set aside the orders
or decisions of the Director of Lands with respect to questions
involving public lands under the administration and control of the
Bureau of Lands and the Department of Agriculture and Natural
Resources. He cannot, therefore, be said to have acted beyond
the bounds of his jurisdiction under Sections 3, 4 and 5
of Commonwealth Act No. 141.
DECISION
ROMERO, J p:
Petitioners Desamparado Vda. de Nazareno and Leticia Nazareno
Tapia challenge the decision of the Court of Appeals which
affirmed the dismissal of petitioners' complaint by the Regional
Trial Court of Misamis Oriental, Branch 22. The complaint was for
annulment of the verification, report and recommendation,
decision and order of the Bureau of Lands regarding a parcel of
public land.
The only issue involved in this petition is whether or not petitioners
exhausted administrative remedies before having recourse to the
courts.
The subject of this controversy is a parcel of land situated in
Telegrapo, Puntod, Cagayan de Oro City. Said land was formed
as a result of sawdust dumped into the dried-up Balacanas Creek
and along the banks of the Cagayan river.
Sometime in 1979, private respondents Jose Salasalan and Leo
Rabaya leased the subject lots on which their houses stood from
one Antonio Nazareno, petitioners' predecessor-in-interest. In the
latter part of 1982, private respondents allegedly stopped paying
rentals. As a result, Antonio Nazareno and petitioners filed a case
for ejectment with the Municipal Trial Court of Cagayan de Oro
City, Branch 4. A decision was rendered against private
respondents, which decision was affirmed by the Regional Trial
Court of Misamis Oriental, Branch 20.
The case was remanded to the municipal trial court for execution
of judgment after the same became final and executory. Private
respondents filed a case for annulment of judgment before the
Regional Trial Court of Misamis Oriental, Branch 24 which
dismissed the same. Antonio Nazareno and petitioners again
moved for execution of judgment but private respondents filed
another case for certiorari with prayer for restraining order and/or
writ of preliminary injunction with the Regional Trial Court of
Misamis Oriental, Branch 25 which was likewise dismissed. The
decision of the lower court was finally enforced with the private
respondents being ejected from portions of the subject lots they
occupied.
Before he died, Antonio Nazareno caused the approval by the
Bureau of Lands of the survey plan designated as Plan Csd-106-
00571 with a view to perfecting his title over the accretion area
being claimed by him. Before the approved survey plan could be
released to the applicant, however, it was protested by private
respondents before the Bureau of Lands.
In compliance with the order of respondent District Land Officer
Alberto M. Gillera, respondent Land Investigator Avelino G. Labis
conducted an investigation and rendered a report to the Regional
Director recommending that Survey Plan No. MSI-10-06-000571-
D (equivalent to Lot No. 36302, Cad. 237) in the name of Antonio
Nazareno, be cancelled and that private respondents be directed
to file appropriate public land applications.
Based on said report, respondent Regional Director of the Bureau
of Lands Roberto Hilario rendered a decision ordering the
amendment of the survey plan in the name of Antonio Nazareno
by segregating therefrom the areas occupied by the private
respondents who, if qualified, may file public land applications
covering their respective portions.
Antonio Nazareno filed a motion for reconsideration with
respondent Rolleo Ignacio, Undersecretary of the Department of
Natural Resources and Officer-in-Charge of the Bureau of Lands
who denied the motion. Respondent Director of Lands Abelardo
Palad then ordered him to vacate the portions adjudicated to
private respondents and remove whatever improvements they
have introduced thereon. He also ordered that private respondents
be placed in possession thereof.
Upon the denial of the late Antonio Nazareno's motion for
reconsideration, petitioners Desamparado Vda. de Nazareno and
Leticia Tapia Nazareno, filed a case before the RTC, Branch 22
for annulment of the following: order of investigation by respondent
Gillera, report and recommendation by respondent Labis, decision
by respondent Hilario, order by respondent Ignacio affirming the
decision of respondent Hilario and order of execution by
respondent Palad. The RTC dismissed the complaint for failure to
exhaust administrative remedies which resulted in the finality of
the administrative decision of the Bureau of Lands.
On appeal, the Court of Appeals affirmed the decision of the RTC
dismissing the complaint. Applying Section 4 of C.A. No. 141, as
amended, it contended that the approval of the survey plan
belongs exclusively to the Director of Lands. Hence, factual
findings made by the Metropolitan Trial Court respecting the
subject land cannot be held to be controlling as the preparation
and approval of said survey plans belong to the Director of Lands
and the same shall be conclusive when approved by the Secretary
of Agriculture and Natural Resources. 1
Furthermore, the appellate court contended that the motion for
reconsideration filed by Antonio Nazareno cannot be considered
as an appeal to the Office of the Secretary of Agriculture and
Natural Resources, as mandated by C.A. No. 141 inasmuch as the
same had been acted upon by respondent Undersecretary Ignacio
in his capacity as Officer-in-Charge of the Bureau of Lands and
not as Undersecretary acting for the Secretary of Agriculture and
Natural Resources. For the failure of Antonio Nazareno to appeal
to the Secretary of Agriculture and Natural Resources, the present
case does not fall within the exception to the doctrine of exhaustion
of administrative remedies. It also held that there was no showing
of oppressiveness in the manner in which the orders were issued
and executed.
Hence, this petition.
Petitioners assign the following errors:
I. PUBLIC RESPONDENT COURT OF APPEALS IN A
WHIMSICAL, ARBITRARY AND CAPRICIOUS MANNER
AFFIRMED THE DECISION OF THE LOWER COURT WHICH IS
CONTRARY TO THE PREVAILING FACTS AND THE LAW ON
THE MATTER;
II. PUBLIC RESPONDENT COURT OF APPEALS IN A
WHIMSICAL, ARBITRARY AND CAPRICIOUS MANNER
AFFIRMED THE DECISION OF THE LOWER COURT
DISMISSING THE ORIGINAL CASE WHICH FAILED TO
CONSIDER THAT THE EXECUTION ORDER OF PUBLIC
RESPONDENT ABELARDO G. PALAD, JR., DIRECTOR OF
LANDS, MANILA, PRACTICALLY CHANGED THE DECISION OF
PUBLIC RESPONDENT ROBERTO HILARIO, REGIONAL
DIRECTOR, BUREAU OF LANDS, REGION 10, THUS MAKING
THE CASE PROPER SUBJECT FOR ANNULMENT WELL
WITHIN THE JURISDICTION OF THE LOWER COURT.
The resolution of the above issues, however, hinges on the
question of whether or not the subject land is public land.
Petitioners claim that the subject land is private land being an
accretion to his titled property, applying Article 457 of the Civil
Code which provides:
"To the owners of land adjoining the banks of rivers belong the
accretion which they gradually receive from the effects of the
current of the waters."
In the case of Meneses v. CA, 2 this Court held that accretion, as
a mode of acquiring property under Art. 457 of the Civil Code,
requires the concurrence of these requisites: (1) that the
deposition of soil or sediment be gradual and imperceptible; (2)
that it be the result of the action of the waters of the river (or sea);
and (3) that the land where accretion takes place is adjacent to the
banks or rivers (or the sea coast). These are called the rules on
alluvion which if present in a case, give to the owners of lands
adjoining the banks of rivers or streams any accretion gradually
received from the effects of the current of waters.
For petitioners to insist on the application of these rules on alluvion
to their case, the above-mentioned requisites must be present.
However, they admit that the accretion was formed by the dumping
of boulders, soil and other filling materials on portions of the
Balacanas Creek and the Cagayan River bounding their land. 3 It
cannot be claimed, therefore, that the accumulation of such
boulders, soil and other filling materials was gradual and
imperceptible, resulting from the action of the waters or the current
of the Balacanas Creek and the Cagayan River. In Hilario v. City
of Manila, 4 this Court held that the word "current" indicates the
participation of the body of water in the ebb and flow of waters due
to high and low tide. Petitioners' submission not having met the
first and second requirements of the rules on alluvion, they cannot
claim the rights of a riparian owner.
In any case, this court agrees with private respondents that
petitioners are estopped from denying the public character of the
subject land, as well as the jurisdiction of the Bureau of Lands
when the late Antonio Nazareno filed his Miscellaneous Sales
Application MSA (G-6) 571. 5 The mere filing of said Application
constituted an admission that the land being applied for was public
land, having been the subject of Survey Plan No. MSI-10-06-
000571-D (Equivalent to Lot No. 36302, Cad-237) which was
conducted as a consequence of Antonio Nazareno's
Miscellaneous Sales Application wherein said land was described
as an orchard. Said description by Antonio Nazareno was,
however, controverted by respondent Labis in his investigation
report to respondent Hilario based on the findings of his ocular
inspection that said land actually covers a dry portion of Balacanas
Creek and a swampy portion of Cagayan River. The investigation
report also states that, except for the swampy portion which is fully
planted to nipa palms, the whole area is fully occupied by a part of
a big concrete bodega of petitioners and several residential
houses made of light materials, including those of private
respondents which were erected by themselves sometime in the
early part of 1978. 6
Furthermore, the Bureau of Lands classified the subject land as an
accretion area which was formed by deposits of sawdust in the
Balacanas Creek and the Cagayan river, in accordance with the
ocular inspection conducted by the Bureau of Lands. 7 This Court
has often enough held that findings of administrative agencies
which have acquired expertise because their jurisdiction is
confined to specific matters are generally accorded not only
respect but even finality. 8 Again, when said factual findings are
affirmed by the Court of Appeals, the same are conclusive on the
parties and not reviewable by this Court. 9
It is this Court's irresistible conclusion, therefore, that the accretion
was man-made or artificial. In Republic v. CA, 10 this Court ruled
that the requirement that the deposit should be due to the effect of
the current of the river is indispensable. This excludes from Art.
457 of the Civil Code all deposits caused by human intervention.
Putting it differently, alluvion must be the exclusive work of nature.
Thus, in Tiongco v. Director of Lands, et al., 11 where the land was
not formed solely by the natural effect of the water current of the
river bordering said land but is also the consequence of the direct
and deliberate intervention of man, it was deemed a man-made
accretion and, as such, part of the public domain.
In the case at bar, the subject land was the direct result of the
dumping of sawdust by the Sun Valley Lumber Co. consequent to
its sawmill operations. 12 Even if this Court were to take into
consideration petitioners' submission that the accretion site was
the result of the late Antonio Nazareno's labor consisting in the
dumping of boulders, soil and other filling materials into the
Balacanas Creek and Cagayan River bounding his land, 13 the
same would still be part of the public domain.
Having determined that the subject land is public land, a fortiori,
the Bureau of Lands, as well as the Office of the Secretary of
Agriculture and Natural Resources have jurisdiction over the same
in accordance with the Public Land Law. Accordingly, the court a
quo dismissed petitioners' complaint for non-exhaustion of
administrative remedies which ruling the Court of Appeals
affirmed.
However, this Court agrees with petitioners that administrative
remedies have been exhausted. Petitioners could not have
intended to appeal to respondent Ignacio as an Officer-in-Charge
of the Bureau of Lands. The decision being appealed from was the
decision of respondent Hilario who was the Regional Director of
the Bureau of Lands. Said decision was made "for and by authority
of the Director of Lands". 14 It would be incongruous to appeal the
decision of the Regional Director of the Bureau of Lands acting for
the Director of the Bureau of Lands to an Officer-In-Charge of the
Bureau of Lands.
In any case, respondent Rolleo Ignacio's official designation was
"Undersecretary of the Department of Agriculture and Natural
Resources." He was only an "Officer-In-Charge" of the Bureau of
Lands. When he acted on the late Antonio Nazareno's motion for
reconsideration by affirming or adopting respondent's Hilario's
decision, he was acting on said motion as an Undersecretary on
behalf of the Secretary of the Department. In the case of Hamoy
v. Secretary of Agriculture and Natural Resources, 15 this Court
held that the Undersecretary of Agriculture and Natural Resources
may modify, adopt, or set aside the orders or decisions of the
Director of Lands with respect to questions involving public lands
under the administration and control of the Bureau of Lands and
the Department of Agriculture and Natural Resources. He cannot,
therefore, be said to have acted beyond the bounds of his
jurisdiction under Sections 3, 4 and 5 of Commonwealth Act No.
141. 16
As borne out by the administrative findings, the controverted land
is public land, being an artificial accretion of sawdust. As such, the
Director of Lands has jurisdiction, authority and control over the
same, as mandated under Sections 3 and 4 of the Public Land
Law (C.A. No. 141) which states, thus:
"Sec. 3. The Secretary of Agriculture and Natural Resources shall
be the exclusive officer charged with carrying out the provisions of
this Act through the Director of Lands who shall act under his
immediate control.
Sec. 4. Subject to said control, the Director of Lands shall have
direct executive control of the survey, classification, lease, sale or
any other form of concession or disposition and management of
the lands of the public domain, and his decisions as to questions
of fact shall be conclusive when approved by the Secretary of
Agriculture and Natural Resources."
In connection with the second issue, petitioners ascribe whim,
arbitrariness or capriciousness in the execution order of public
respondent Abelardo G. Palad, the Director of Lands. This Court
finds otherwise since said decision was based on the conclusive
finding that the subject land was public land. Thus, this Court
agrees with the Court of Appeals that the Director of Lands acted
within his rights when he issued the assailed execution order, as
mandated by the aforecited provisions.
Petitioners' allegation that respondent Palad's execution order
directing them to vacate the subject land practically changed
respondent Hilario's decision is baseless. It is incorrect for
petitioners to assume that respondent Palad awarded portions of
the subject land to private respondents Salasalans and Rayabas
as they had not yet been issued patents or titles over the subject
land. The execution order merely directed the segregation of
petitioners' titled lot from the subject land which was actually being
occupied by private respondents before they were ejected from it.
Based on the finding that private respondents were actually in
possession or were actually occupying the subject land instead of
petitioners, respondent Palad, being the Director of Lands and in
the exercise of this administrative discretion, directed petitioners
to vacate the subject land on the ground that private respondents
have a preferential right, being the occupants thereof.
While private respondents may not have filed their application over
the land occupied by them, they nevertheless filed their protest or
opposition to petitioners' Miscellaneous Sales Application, the
same being preparatory to the filing of an application as they were
in fact directed to do so. In any case, respondent Palad's execution
order merely implements respondent Hilario's order. It should be
noted that petitioners' own application still has to be given due
course. 17
As Director of Lands, respondent Palad is authorized to exercise
executive control over any form of concession, disposition and
management of the lands of the public domain. 18 He may issue
decisions and orders as he may see fit under the circumstances
as long as they are based on the findings of fact.
In the case of Calibo v. Ballesteros, 19 this Court held that where,
in the disposition of public lands, the Director of Lands bases his
decision on the evidence thus presented, he clearly acts within his
jurisdiction, and if he errs in appraising the evidence, the error is
one of judgment, but not an act or grave abuse of discretion
annullable by certiorari. Thus, except for the issue of non-
exhaustion of administrative remedies, this Court finds no
reversible error nor grave abuse of discretion in the decision of the
Court of Appeals.
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.
||| (Vda. de Nazareno v. Court of Appeals, G.R. No. 98045, [June
26, 1996], 327 PHIL 374-387)
Heirs of Navarro v. Intermediate Appellate Court 268 SCRA 74
FIRST DIVISION
[G.R. No. 68166. February 12, 1997.]
HEIRS OF EMILIANO NAVARRO, petitioner, vs.
INTERMEDIATE APPELLATE COURT AND HEIRS OF
SINFOROSO PASCUAL, respondents.
Yolanda Quisumbing - Javellana & Associates for petitioner.
Joracio R. Viola, Sr. for private respondents.
SYLLABUS
1. CIVIL LAW; PROPERTY; ACCRETION AS A MODE OF
ACQUIRING PROPERTY; REQUISITES; LEGAL
CONSEQUENCES. Accretion as a mode of acquiring property
under Article 457 of the Civil Code, requires the concurrence of
the following requisites: (1) that the accumulation of soil or
sediment be gradual and imperceptible; (2) that it be the result of
the action of the waters of the river: and (3) that the land where the
accretion takes place is adjacent to the bank of the river. Accretion
is the process whereby the soil is deposited, while alluvium is the
soil deposited on the estate fronting the river bank; the owner of
such estate is called the riparian owner. Riparian owners are,
strictly speaking, distinct from littoral owners, the latter being
owners of lands bordering the shore of the sea or lake or other
tidal waters. The alluvium, by mandate of Article 457 of the Civil
Code, is automatically owned by the riparian owner from the
moment the soil deposit can be seen hut is not automatically
registered property, hence, subject to acquisition through
prescription by third persons.
2. ID.; ID.; ID.; THIRD REQUISITE NOT PRESENT IN CASE AT
BAR. There is no dispute as to the location of: (a) the disputed
land; (b) petitioners' own tract of land: (c) the Manila Bay; and, (d)
the Talisay and Bulacan Rivers. Petitioners' own land lies between
the Talisay and Bulacan Rivers; in front of their land on the
northern side lies now the disputed land where before 1948, there
lay the Manila Bay. If the accretion were to be attributed to the
action of either or both of the Talisay and Bulacan Rivers, the
alluvium should have been deposited on either or both of the
eastern and western boundaries of petitioners' own tract of land,
not on the northern portion thereof which is adjacent to the Manila
Bay. Clearly lacking, thus, is the third requisite of accretion, which
is, that the alluvium is deposited on the portion of claimant's land
which is adjacent to the river bank.
3. ID.; ID.; ID.; ID.; THE DISPUTED LAND IS AN ACCRETION
NOT ON A RIVER BANK BUT ON A SEA BANK; THE
APPLICABLE LAW IS NOT ARTICLE 457 OF THE CIVIL CODE
BUT ARTICLE 4 OF THE SPANISH LAW OF WATERS OF 1866.
There is no dispute as to the fact that petitioners' own tract of
land adjoins the Manila Bay. Manila Bay is obviously not a river,
and jurisprudence is already settled as to what kind of body of
water the Manila Bay is. It is to be remembered that we held in
Ignacio vs. Director of Lands and Valeriano (108 Phil. 336, 338
[1960]) that: "Appellant next contends that . . . Manila Bay cannot
be considered as a sea. We find said contention untenable. A bay
is part of the sea, being a mere indentation of the same: 'Bay,
An opening into the land where the water is shut in on all sides
except at the entrance; an inlet of the sea; an arm of the sea,
distinct from a river, a bending or curbing of the shore of the sea
or of a lake,' 7 C.J. 1013-1014." The disputed land, thus, is an
accretion not on a river bank but on a sea bank, or on what used
to be the foreshore of Manila Bay which adjoined petitioners' own
tract of land on the northern side. As such, the applicable law is
not Article 457 of the Civil Code but Article 4 of the Spanish Law
of Waters of 1866.
4. ID.; ID.; ID.; THE DISPUTED PROPERTY IS AN ACCRETION
ON A SEA BANK, MANILA BAY BEING AN INLET OR AN ARM
OF THE SEA; AS SUCH, THE DISPUTED PROPERTY IS
UNDER ARTICLE 4 OF THE SPANISH LAW OF WATERS OF
1866, PART OF THE PUBLIC DOMAIN. The instant
controversy brings a situation calling for the application of Article
4 of the Spanish Law of Waters of 1866, the disputed land being
an accretion on the foreshore of Manila Bay which is, for all legal
purposes, considered a sea. Article 4 of the Spanish Law of
Waters of August 3, 1866 provides as follows: "Lands added to the
shores by accretions and alluvial deposits caused by the action of
the sea, form part of the public domain. When they are no longer
washed by the waters of the sea and are not necessary for
purposes of public utility, or for the establishment of special
industries, or for the coast-guard service, the Government shall
declare them to be the property of the owners of the estates
adjacent thereto and as increment thereof." In the light of the
aforecited vintage but still valid law, unequivocal is the public
nature of the disputed land in this controversy, the same being an
accretion on a sea bank which, for all legal purposes, the foreshore
of Manila Bay is. As part of the public domain, the herein disputed
land is intended for public uses, and "so long as the land in
litigation belongs to the national domain and is reserved for public
uses, it is not capable of being appropriated by any private person,
except through express authorization granted in due form by a
competent authority." Only the executive and possibly the
legislative departments have the right and the power to make the
declaration that the lands so gained by action of the sea is no
longer necessary for purposes of public utility or for the cause of
establishment of special industries or for coast guard services.
Petitioners utterly fail to show that either the executive or
legislative department has already declared the disputed land
1966, to be the property of petitioners as owners of the estates
adjacent thereto.
DECISION
HERMOSISIMA, JR., J p:
Unique is the legal question visited upon the claim of an applicant
in a Land Registration case by oppositors thereto, the Government
and a Government lessee, involving as it does ownership of land
formed by alluvium.
The applicant owns the property immediately adjoining the land
sought to be registered. His registered property is bounded on the
east by the Talisay River, on the west by the Bulacan River, and
on the north by the Manila Bay. The Talisay River and the Bulacan
River flow down towards the Manila Bay and act as boundaries of
the applicant's registered land on the east and on the west.
The land sought to be registered was formed at the northern tip of
the applicant's land. Applicant's registered property is bounded on
the north by the Manila Bay.
The issue: May the land sought to be registered be deemed an
accretion in the sense that it naturally accrues in favor of the
riparian owner or should the land be considered as foreshore
land?
Before us is a petition for review of: (1) the decision 1 and (2) two
subsequent resolutions 2 of the Intermediate Appellate
Court 3 (now the Court of Appeals) in Land Registration Case No.
N-84, 4 the application over which was filed by private
respondents' predecessor-in-interest, Sinforoso Pascual, now
deceased, before the Court of First Instance 5 (now the Regional
Trial Court) of Balanga, Bataan.
There is no dispute as to the following facts:
On October 3, 1946, Sinforoso Pascual, now deceased, filed an
application for foreshore lease covering a tract of foreshore land
in Sibocon, Balanga, Bataan, having an area of approximately
seventeen (17) hectares. This application was denied on January
15, 1953. So was his motion for reconsideration.
Subsequently, petitioners' predecessor-in-interest, also now
deceased, Emiliano Navarro, filed a fishpond application with the
Bureau of Fisheries covering twenty five (25) hectares of foreshore
land also in Sibocon, Balanga, Bataan. Initially, such application
was denied by the Director of Fisheries on the ground that the
property formed part of the public domain. Upon motion for
reconsideration, the Director of Fisheries, on May 27, 1988, gave
due course to his application but only to the extent of seven (7)
hectares of the property as may be certified by the Bureau of
Forestry as suitable for fishpond purposes.
The Municipal Council of Balanga, Bataan, had opposed Emiliano
Navarro's application. Aggrieved by the decision of the Director of
Fisheries, it appealed to the Secretary of Natural Resources who,
however, affirmed the grant. The then Executive Secretary, acting
in behalf of the President of the Philippines, similarly affirmed the
grant.
On the other hand, sometime in the early part of 1960, Sinforoso
Pascual filed an application to register and confirm his title to a
parcel of land, situated in Sibocon, Balanga, Bataan, described in
Plan Psu-175181 and said to have an area of 146,611 square
meters. Pascual claimed that this land is an accretion to his
property, situated in Barrio Puerto Rivas, Balanga, Bataan, and
covered by Original Certificate of Title No. 6830. It is bounded on
the eastern side by the Talisay River, on the western side by the
Bulacan River, and on the northern side by the Manila Bay. The
Talisay River as well as the Bulacan River flow downstream and
meet at the Manila Bay thereby depositing sand and silt on
Pascual's property resulting in an accretion thereon. Sinforoso
Pascual claimed the accretion as the riparian owner.
On March 25, 1960, the Director of Lands, represented by the
Assistant Solicitor General, filed an opposition thereto stating that
neither Pascual nor his predecessors-in-interest possessed
sufficient title to the subject property, the same being a portion of
the public domain and, therefore, it belongs to the Republic of the
Philippines. The Director of Forestry, through the Provincial Fiscal,
similarly opposed Pascual's application for the same reason as
that advanced by the Director of Lands. Later on, however, the
Director of Lands withdrew his opposition. The Director of Forestry
become the sole oppositor.
On June 2, 1960, the court a quo issued an order of general
default excepting the Director of Lands and the Director of
Forestry. lexlib
Upon motion of Emiliano Navarro, however, the order of general
default was lifted and, on February 13, 1961, Navarro thereupon
filed an opposition to Pascual's application. Navarro claimed that
the land sought to be registered has always been part of the public
domain, it being a part of the foreshore of Manila Bay; that he was
a lessee and in possession of a part of the subject property by
virtue of a fishpond permit issued by the Bureau of Fisheries and
confirmed by the Office of the President; and that he had already
converted the area covered by the lease into a fishpond.
During the pendency of the land registration case, that is, on
November 6, 1960, Sinforoso Pascual filed a complaint for
ejectment against Emiliano Navarro, one Marcelo Lopez and their
privies, alleged by Pascual to have unlawfully claimed and
possessed, through stealth, force and strategy, a portion of the
subject property covered by Plan Psu-175181. The defendants in
the case were alleged to have built a provisional dike thereon: thus
they have thereby deprived Pascual of the premises sought to be
registered. This, notwithstanding repeated demands for
defendants to vacate the property.
The case was decided adversely against Pascual. Thus, Pascual
appealed to the Court of First Instance (now Regional Trial Court)
of Balanga, Bataan, the appeal having been docketed as Civil
Case No. 2873. Because of the similarity of the parties and the
subject matter, the appealed case for ejectment was consolidated
with the land registration case and was jointly tried by the court a
quo.
During the pendency of the trial of the consolidated cases,
Emiliano Navarro died on November 1, 1961 and was substituted
by his heirs, the herein petitioners.
Subsequently, on August 26, 1962, Pascual died and was
substituted by his heirs, the herein private respondents.
On November 10, 1975, the court a quo rendered judgment finding
the subject property to be foreshore land and, being a part of the
public domain, it cannot be the subject of land registration
proceedings.
The decision's dispositive portion reads:
"WHEREFORE, judgment is rendered:
(1) Dismissing plaintiff [private respondent] Sinforoso Pascual's
complaint for ejectment in Civil Case No. 2873;
(2) Denying the application of Sinforoso Pascual for land
registration over the land in question; and
(3) Directing said Sinforoso Pascual, through his heirs, as plaintiff
in Civil Case No. 2873 and as applicant in Land Registration Case
No. N-84 to pay costs in both instances." 6
The heirs of Pascual appealed and, before the respondent
appellate court, assigned the following errors:
"1. The lower court erred in not finding the land in question as an
accretion by the action of the Talisay and Bulacan Rivers to the
land admittedly owned by applicants-appellants [private
respondents].
2. The lower court erred in holding that the land in question is
foreshore land.
3.. The lower court erred in not ordering the registration of the and
is controversy in favor of applicants-appellants [private
respondents].
4. The lower court erred in not finding that the applicants-
appellants [private respondents] are entitled to eject the oppositor-
appellee [petitioners]." 7
On appeal, the respondent court reversed the findings of the
court a quo and granted the petition for registration of the subject
property but excluding therefrom fifty (50) meters from corner 2
towards corner 1; and fifty meters (50) meters from corner 5
towards corner 6 of the Psu-175181.
The respondent appellate court explained the reversal in this wise:
"The paramount issue to be resolved in this appeal as set forth by
the parties in their respective briefs is whether or not the land
sought to be registered is accretion or foreshore land, or, whether
or not said land was formed by the action of the two rivers of
Talisay and Bulacan or by the action of the Manila Bay. If formed
by the action of the Talisay and Bulacan rivers, the subject land is
accretion but if formed by the action of the Manila Bay then it is
foreshore land.
xxx xxx xxx
It is undisputed that applicants-appellants [private respondents]
owned the land immediately adjoining the land sought to be
registered. Their property which is covered by OCT No. 6830 is
bounded on the east by the Talisay River, on the west by the
Bulacan River, and on the north by the Manila Bay. The Talisay
and Bulacan rivers come from inland flowing downstream towards
the Manila Bay. In other words, between the Talisay River and the
Bulacan River is the property of applicants with both rivers acting
as the boundary to said land and the flow of both rivers meeting
and emptying into the Manila Bay. The subject land was formed at
the tip or apex of appellants' [private respondents'] land adding
thereto the land now sought to be registered.
This makes this case quite unique because while it is undisputed
that the subject land is immediately attached to appellants' [private
respondents'] land and forms the tip thereof, at the same time, said
land immediately faces the Manila Bay which is part of the sea.
We can understand therefore the confusion this case might have
caused the lower court, faced as it was with the uneasy problem
of deciding whether or not the subject land was formed by the
action of the two rivers or by the action of the sea. Since the
subject land is found at the shore of the Manila Bay facing
appellants' [private respondents'] land, it would be quite easy to
conclude that it is foreshore and therefore part of the patrimonial
property of the State as the lower court did in fact rule . . . .
xxx xxx xxx
It is however undisputed that [private respondents'] land lies
between these two rivers and it is precisely appellants' [private
respondents'] land which acts as a barricade preventing these two
rivers to meet. Thus, since the flow of the two is downwards to the
Manila Bay the sediments of sand and silt are deposited at their
mouths.
It is, therefore, difficult to see how the Manila Bay could have been
the cause of the deposit thereat for in the natural course of things,
the waves of the sea eat the land on the shore, as they suge [sic]
inland. It would not therefore add anything to the land but instead
subtract from it due to the action of the waves and the wind. It is
then more logical to believe that the two rivers flowing towards the
bay emptied their cargo of sand, silt and clay at their mouths, thus
causing [private respondents'] land to accumulate therein
However, our distinguished colleage [sic], Mr. Justice Serrano, do
[sic] not seem to accept this theory and stated that the subject land
arose only when . . . Pascual planted 'palapat' and 'bakawan' trees
thereat to serve as a boundary or strainer. But we do not see how
this act of planting trees by Pascual would explain how the land
mass came into being. Much less will it prove that the same came
from the sea. Following Mr. Justice Serrano's argument that it were
the few trees that acted as strainers or blocks, then the land that
grew would have stopped at the place where the said trees were
planted. But this is not so because the land mass went far beyond
the boundary, or where the trees were planted.
On the other hand, the picture-exhibits of [private respondents']
clearly show that the land that accumulated beyond the so-called
boundary, as well as the entire area being applied for is dry land,
above sea level, and bearing innumerable trees . . . . The existence
of vegetation on the land could only confirm that the soil thereat
came from inland rather than from the sea, for what could the sea
bring to the shore but sand, pebbles, stones, rocks and corrals?
On the other hand, the two rivers would be bringing soil on their
downward flow which they brought along from the eroded
mountains, the lands along their path, and dumped them all on the
northern portion of appellants' [private respondents'] land.
In view of the foregoing, we have to deviate from the lower court's
finding. While it is true that the subject land is found at the shore
of the Manila Bay fronting appellants' [private respondents'] land,
said land is not foreshore but an accretion from the action of the
Talisay and Bulacan rivers. In fact, this is exactly what the Bureau
of Lands found out, as shown in the following report of the Acting
Provincial Officer, Jesus M. Orozco, to wit:
'Upon ocular inspection of the land subject of this registration
made on June 11, 1960, it was found out that the said land is . . .
sandwitched [sic] by two big rivers . . . These two rivers bring down
considerable amount of soil and sediments during floods every
year thus raising the soil of the land adjoining the private property
of the applicant [private respondents']. About four-fifth [sic] of the
area applied for is now dry land whereon are planted palapat trees
thickly growing thereon. It is the natural action of these two rivers
that has caused the formation of said land . . . subject of this
registration case. It has been formed, therefore, by accretion. And
having been formed by accretion, the said land may be considered
the private property of the riparian owner who is the applicant
[private respondents'] . . . .
In view of the above, the opposition hereto filed by the government
should be withdrawn, except for the portion recommended by the
land investigator in his report dated May 2, 1960, to be excluded
and considered foreshore. . . .'
Because of this report, no less than the Solicitor General
representing the Bureau of Lands withdrew his opposition dated
March 25, 1960, and limited 'the same to the northern portion of
the land applied for, compromising a strip 50 meters wide along
the Manila Bay, which should be declared public land as part of
the foreshore' . . . . 8
Pursuant to the aforecited decision, the respondent appellate court
ordered the issuance of the corresponding decree of registration
in the name of private respondents and the reversion to private
respondents of the possession of the portion of the subject
property included in Navarro's fishpond permit.
On December 20, 1978, petitioners filed a motion for
reconsideration of the aforecited decision. The Director of Forestry
also moved for the reconsideration of the same decision. Both
motions were opposed by private respondents on January 27,
1979.
On November 21, 1980, respondent appellate court promulgated
a resolution denying the motion for reconsideration filed by the
Director of Forestry. It, however, modified its decision, to read, viz:
"(3). Ordering private oppositors Heirs of Emiliano Navarro to
vacate that portion included in their fishpond permit covered by
Plan Psu-175181 and hand over possession of said portion to
applicants-appellants, if the said portion is not within the strip of
land fifty (50) meters wide along Manila Bay on the northern
portion of the land subject of the registration proceedings and
which area is more particularly referred to as fifty (50) meters from
corner 2 towards corner 1; and fifty (50) meters from corner 5
towards corner 6 of Plan Psu-175181 . . ." 9
On December 15, 1980, we granted the Solicitor General, acting
as counsel for the Director of Forestry, an extension of time within
which to file in this court, a petition for review of the decision dated
November 29, 1978 of the respondent appellate court and of the
aforecited resolution dated November 21, 1980.
Thereafter, the Solicitor General, in behalf of the Director of
Forestry, filed a petition for review entitled, "The Director of
Forestry vs. the Court of Appeals." 10 We, however, denied the
same in a minute resolution dated July 20, 1981, such petition
having been prematurely filed at a time when the Court of Appeals
was yet to resolve petitioners' pending motion to set aside the
resolution dated November 21, 1980.
On October 9, 1981, respondent appellate court denied
petitioners' motion for reconsideration of the decision dated
November 29, 1978.
On October 17, 1981, respondent appellate court made an entry
of judgment stating that the decision dated November 29, 1978
had become final and executory as against herein petitioners as
oppositors in L.R.C. Case No. N-84 and Civil Case No. 2873 of the
Court of First Instance (now the Regional Trial Court) of Balanga,
Bataan.
On October 26, 1981, a second motion for reconsideration of the
decision dated November 29, 1978 was filed by petitioners' new
counsel.
On March 26, 1982, respondent appellate court issued a resolution
granting petitioners' request for leave to file a second motion for
reconsideration.
On July 13, 1984, after hearing, respondent appellate court denied
petitioners' second motion for reconsideration on the ground that
the same was filed out of time, citing Rule 52, Section 1 of the
Rules of Court which provides that a motion for reconsideration
shall be made ex-parte and filed within fifteen (15) days from the
notice of the final order or judgment.
Hence this petition where the respondent appellate court is
imputed to have palpably erred in appreciating the facts of the
case and to have gravely misapplied statutory and case law
relating to accretion, specifically, Article 457 of the Civil Code.
We find no merit in the petition.
The disputed property was brought forth by both the withdrawal of
the waters of Manila Bay and the accretion formed on the exposed
foreshore land by the action of the sea which brought soil and sand
sediments in turn trapped by the palapat and bakawan trees
planted thereon by petitioner Sulpicio Pascual in 1948.
Anchoring their claim of ownership on Article 457 of the Civil Code,
petitioners vigorously argue that the disputed 14-hectare land is
an accretion caused by the joint action of the Talisay and Bulacan
Rivers which run their course on the eastern and western
boundaries, respectively, of petitioners' own tract of land.
Accretion as a mode of acquiring property under said Article 457,
requires the concurrence of the following requisites: (1) that the
accumulation of soil or sediment be gradual and imperceptible; (2)
that it be the result of the action of the waters of the river; and (3)
that the land where the accretion takes place is adjacent to the
bank of the river. 11 Accretion is the process whereby the soil is
deposited, while alluvium is the soil deposited on the estate
fronting the river bank 12 ; the owner of such estate is called the
riparian owner. Riparian owners are, strictly speaking, distinct from
littoral owners, the latter being owners of lands bordering the shore
of the sea or lake or other tidal waters. 13 The alluvium, by
mandate of Article 457 of the Civil Code, is automatically owned
by the riparian owner from the moment the soil deposit can be
seen 14 but is not automatically registered property, hence,
subject to acquisition through prescription by third persons. 15
Petitioners' claim of ownership over the disputed property under
the principle of accretion, is misplaced.
First, the title of petitioners' own tract of land reveals its
northeastern boundary to be Manila Bay. Petitioners' land,
therefore, used to adjoin, border or front the Manila Bay and not
any of the two rivers whose torrential action, petitioners insist, is to
account for the accretion on their land. In fact, one of the
petitioners, Sulpicio Pascual, testified in open court that the waves
of Manila Bay used to hit the disputed land being part of the bay's
foreshore but, after he had planted palapat and bakawan trees
thereon in 1948, the land began to rise. 16
Moreover, there is no dispute as to the location of: (a) the disputed
land; (b) petitioners' own tract of land; (c) the Manila Bay; and, (d)
the Talisay and Bulacan Rivers. Petitioners' own land lies between
the Talisay and Bulacan Rivers; in front of their land on the
northern side lies now the disputed land where before 1948, there
lay the Manila Bay. If the accretion were to be attributed to the
action of either or both of the Talisay and Bulacan Rivers, the
alluvium should have been deposited on either or both of the
eastern and western boundaries of petitioners' own tract of land,
not on the northern portion thereof which is adjacent to the Manila
Bay. Clearly lacking, thus, is the third requisite of accretion, which
is, that the alluvium is deposited on the portion of claimant's land
which is adjacent to the river bank.
Second, there is no dispute as to the fact that petitioners' own tract
of land adjoins the Manila Bay. Manila Bay is obviously not a river,
and jurisprudence is already settled as to what kind of body of
water the Manila Bay is. It is to be remembered that we held that:
"Appellant next contends that . . . Manila Bay cannot be considered
as a sea. We find said contention untenable. A bay is part of the
sea, being a mere indentation of the same:
'Bay. An opening into the land where the water is shut in on all
sides except at the entrance; an inlet of the sea; an arm of the sea,
distinct from a river, a bending or curbing of the shore of the sea
or of a lake.' 7 C.J. 1013-1014." 17
The disputed land, thus, is an accretion not on a river bank but on
a sea bank, or on what used to be the foreshore of Manila Bay
which adjoined petitioners' own tract of land on the northern side.
As such, the applicable law is not Article 457 of the Civil Code
but Article 4 of the Spanish Law of Waters of 1866.
The process by which the disputed land was formed, is not difficult
to discern from the facts of the case. As the trial court correctly
observed:
"A perusal of the survey plan . . . of the land subject matter of these
cases shows that on the eastern side, the property is bounded by
Talisay River, on the western side by Bulacan River, on the
southern side by Lot 1436 and on the northern side by Manila Bay.
It is not correct to state that the Talisay and Bulacan Rivers meet
a certain portion because the two rivers both flow towards Manila
Bay. The Talisay River is straight while the Bulacan River is a little
bit meandering and there is no portion where the two rivers meet
before they end up at Manila Bay. The land which is adjacent to
the property belonging to Pascual cannot be considered an
accretion caused by the action of the two rivers].
Applicant Pascual . . . has not presented proofs to convince the
Court that the land he has applied for registration is the result of
the settling down on his registered land of soil, earth or other
deposits so as to be rightfully be considered as an accretion
[caused by the action of the two rivers]. Said Art. 457 finds no
applicability where the accretion must have been caused by action
of the bay." 18
The conclusion formed by the trial court on the basis of the
foregoing observation is that the disputed land is part of the
foreshore of Manila Bay and therefore, part of the public domain.
The respondent appellate court, however, perceived the fact that
petitioners' own land lies between the Talisay and Bulacan Rivers,
to be basis to conclude that the disputed land must be an accretion
formed by the action of the two rivers because petitioners' own
land acted as a barricade preventing the two rivers to meet and
that the current of the two rivers carried sediments of sand and silt
downwards to the Manila Bay which accumulated somehow to a
14-hectare land. These conclusions, however, are fatally
incongruous in the light of the one undisputed critical fact: the
accretion was deposited, not on either the eastern or western
portion of petitioners' land where a river each runs, but on the
northern portion of petitioners' land which adjoins the Manila Bay.
Worse, such conclusions are further eroded of their practical logic
and consonance with natural experience in the light of Sulpicio
Pascual's admission as to having planted palapat and bakawan
trees on the northern boundary of their own land. In amplification
of this, plainly more reasonable and valid are Justice Mariano
Serrano's observations in his dissenting opinion when he stated
that:
"As appellants' (titled) land . . . acts as a barricade that prevents
the two rivers to meet, and considering the wide expanse of the
boundary between said land and the Manila Bay, measuring some
593.00 meters . . . it is believed rather farfetched for the land in
question to have been formed through 'sediments of sand and salt
[sic] . . . deposited at their [rivers'] mouths.' Moreover, if 'since the
flow of the two rivers is downwards to the Manila Bay the
sediments of sand and silt are deposited at their mouths,' why then
would the alleged cargo of sand, silt and clay accumulate at the
northern portion of appellants' titled land facing Manila Bay instead
of merely at the mouths and banks of these two rivers? That being
the case, the accretion formed at said portion of appellants' titled
[land] was not caused by the current of the two rivers but by the
action of the sea (Manila Bay) into which the rivers empty.
The conclusion . . . is not supported by any reference to the
evidence which, on the contrary, shows that the disputed land was
formed by the action of the sea. Thus, no less than Sulpicio
Pascual, one of the heirs of the original applicant, testified on
cross-examination that the land in dispute was part of the shore
and it was only in 1948 that he noticed that the land was beginning
to get higher after he had planted trees thereon in 1948. . . . cdasia
. . . it is established that before 1948 sea water from the Manila
Bay at high tide could reach as far as the dike of appellants'
fishpond within their titled property, which dike now separates this
titled property from the land in question. Even in 1948 when
appellants had already planted palapat and bakawan trees in the
land involved, inasmuch as these trees were yet small, the waves
of the sea could still reach the dike. This must be so because in .
. . the survey plan of the titled property approved in 1918, said titled
land was bounded on the north by Manila Bay. So Manila Bay was
adjacent to it on the north. It was only after the planting of the
aforesaid trees in 1948 that the land in question began to rise or
to get higher in elevation.
The trees planted by appellants in 1948 became a sort of strainer
of the sea water and at the same time a kind of block to the
strained sediments from being carried back to the sea by the very
waves that brought them to the former shore at the end of the dike,
which must have caused the shoreline to recede and dry up
eventually raising the former shore leading to the formation of the
land in question." 19
In other words, the combined and interactive effect of the planting
of palapat and bakawan trees, the withdrawal of the waters of
Manila Bay eventually resulting in the drying up of its former
foreshore, and the regular torrential action of the waters of Manila
Bay, is the formation of the disputed land on the northern boundary
of petitioners' own tract of land.
The disputed property is an accretion on a sea bank, Manila Bay
being an inlet or an arm of the sea; as such, the disputed property
is, under Article 4 of the Spanish Law of Waters of 1866, part of
the public domain
At the outset, there is a need to distinguish between Manila Bay
and Laguna de Bay.
While we held in the case of Ignacio v. Director of Lands and
Valeriano 20 that Manila Bay is considered a sea for purposes of
determining which law on accretion is to be applied in multifarious
situations, we have ruled differently insofar as accretions on lands
adjoining the Laguna de Bay are concerned.
In the cases of Government of the P.I. v. Colegio de San
Jose 21 , Republic v. Court of Appeals 22 , Republic
v. Alagad 23 , and Meneses v. Court of Appeals 24 , we
categorically ruled that Laguna de Bay is a lake the accretion on
which, by the mandate of Article 84 of the Spanish Law of Waters
of 1866, belongs to the owner of the land contiguous thereto.
The instant controversy, however, brings a situation calling for the
application of Article 4 of the Spanish Law of Waters of 1866, the
disputed land being an accretion on the foreshore of Manila Bay
which is, for all legal purposes, considered a sea.
Article 4 of the Spanish Law of Waters of August 3, 1866 provides
as follows:
"Lands added to the shores by accretions and alluvial deposits
caused by the action of the sea, form part of the public domain.
When they are no longer washed by the waters of the sea and are
not necessary for purposes of public utility, or for the establishment
of special industries, or for the coast-guard service, the
Government shall declare them to be the property of the owners
of the estates adjacent thereto and as increment thereof."
In the light of the aforecited vintage but still valid law, unequivocal
is the public nature of the disputed land in this controversy, the
same being an accretion on a sea bank which, for all legal
purposes, the foreshore of Manila Bay is. As part of the public
domain, the herein disputed land is intended for public uses, and
"so long as the land in litigation belongs to the national domain and
is reserved for public uses, it is not capable of being appropriated
by any private person, except through express authorization
granted in due form by a competent authority." 25 Only the
executive and possibly the legislative departments have the right
and the power to make the declaration that the lands so gained by
action of the sea is no longer necessary for purposes of public
utility or for the cause of establishment of special industries or for
coast guard services. 26 Petitioners utterly fail to show that either
the executive or legislative department has already declared the
disputed land as qualified, under Article 4 of the Spanish Law of
Waters of 1866, to be the property of petitioners as owners of the
estates adjacent thereto.
WHEREFORE, the instant Petition for Review is hereby DENIED
and DISMISSED.
Costs against petitioners.
SO ORDERED.
||| (Heirs of Navarro v. Intermediate Appellate Court, G.R. No.
68166, [February 12, 1997], 335 PHIL 537-556)

b. Avulsion (Art. 459)
c. Change of Course of Rivers (Arts. 461-462)
d. Formation of Islands (Arts. 463-465)
2. Accession With Respect to Movable Property
a. Adjunction/Conjunction (Arts. 466-471)
b. Mixture (Arts. 472-473)
c. Specification (Arts. 474)
3. Quieting of Title (Arts. 476481)
4. Requisites
5. Classes
6. Ruinous Buildings and Trees in Danger of Falling (Arts. 482
483)
Title 3 Co-Ownership (Arts. 484-501)
A. Concept of Co-ownership
1. Requisites
2. Characteristics of Co-ownership
B. Rights of Each Co-owner
CASE:
Del Banco v. Intermediate Appellate Court 156 SCRA 55
FIRST DIVISION
[G.R. No. L-72694. December 1, 1987.]
AURORA DEL BANCO, EVELYN DEL BANCO, FEDERICO
TAIO, SOLEDAD TAIO, JOVENCIO TAIO, SAMSON
TAIO, NOE TAIO, SOCORRO TAIO and CLOEFAS
TAIO, petitioners, vs. INTERMEDIATE APPELLATE COURT
(Second Civil Cases Division), ALEJANDRA PANSACOLA,
LEONILA ENCALLADO, VEDATO ENCALLADO, JOSE
YEPES, et al., respondents.
DECISION
PARAS, J p:
This is a petition for review on certiorari by way of appeal from: (a)
the decision of respondent Court of Appeals (Intermediate
Appellate Court) * promulgated on May 17, 1985 in AC-G.R. CV
No. 70460, entitled "Alejandra Pansacola, et al. vs. Domen
Villabona del Banco, et al." which reversed and set aside the
judgment ** of the trial court; and (b) its resolution **of October 15,
1985 in the same case, denying petitioners' motion for
reconsideration of the aforementioned decision and their
supplement to motion for reconsideration.
The dispositive portion of the questioned decision (Rollo, p. 97)
reads, as follows:
"ACCORDINGLY, the decision appealed from is hereby SET
ASIDE insofar as it dismisses the complaint, and another one
entered
(1) Declaring plaintiffs-appellants and defendants-appellees, in
their respective capacities as described in par. V of the complaint,
as co-owners of the property in dispute, but subject to the four-
part pro-indiviso division already made by said property:
(2) Ordering the cancellation of all certificates of title that may have
been issued to any of the parties hereto; and
(3) Ordering the complete and final partition of the subject property
in conformity with law.
For this purpose, this case is hereby remanded to the Court of
origin so that a final partition shall be made in accordance with
Sections 2, 3, et. seq., Rule 69 of the Rules of Court.
Let a copy of this decision be furnished to the Register of Deeds
for the Province of Quezon."
The facts of the case are taken from the decision of the Appellate
Court (Rollo, p. 39) as follows: cdphil
In a document executed in the Municipality of San Rafael,
Bulacan, on February 11, 1859, three brothers, Benedicto
Pansacola, Jose Pansacola and Manuel Pansacola (known as Fr.
Manuel Peda) entered into an agreement which provided, among
others:
(1) That they will purchase from the Spanish Government the
lands comprising the Island of Cagbalite which is located within
the boundaries of the Municipality of Mauban, Province of Tayabas
(now Quezon) and has an approximate area of 1,600 hectares;
(2) That the lands shall be considered after the purchase as their
common property;
(3) That the co-ownership includes Domingo Arce and Baldomera
Angulo, minors at that time represented by their father, Manuel
Pansacola (Fr. Manuel Pea) who will contribute for them in the
proposed purchase of the Cagbalite Island;
(4) That whatever benefits may be derived from the Island shall be
shared equally by the co-owners in the following proportion:
Benedicto Pansacola share; Jose Pansacola share;
and, Domingo Arce and Baldomera Angulo 2/4 shares which
shall be placed under the care of their father, Manuel Pansacola
(Fr. Manuel Pea).
On August 14, 1866, co-owners entered into the actual possession
and enjoyment of the Island purchased by them from the Spanish
Government. On April 11, 1868 they agreed to modify the terms
and conditions of the agreement entered into by them on February
11, 1859. The new agreement provided for a new sharing and
distribution of the lands, comprising the Island of Cagbalite and
whatever benefits may be derived therefrom, as follows:
"(a) The first one-fourth (1/4) portion shall belong to Don
Benedicto Pansacola;
(b) The second one fourth (1/4) portion shall belong to Don Jose
Pansacola;
(c) The third one-fourth (1/4) portion shall henceforth belong to the
children of their deceased brother, Don Eustaquio Pansacola,
namely: Don Mariano Pansacola, Maria Pansacola and Don
Hipolito Pansacola;
(d) The fourth and last one-fourth (1/4) portion shall belong to their
nephews and nieces (1) Domingo Arce, (2) Baldomera Angulo, (3)
Marcelina Flores, (4) Francisca Flores, (5) Candelaria dela Cruz,
and (6) Gervasio Pansacola who, being all minors, are still under
the care of their brother, Manuel Pansacola (Fr. Manuel Pea).
The latter is the real father of said minors."
About one hundred years later, on November 18, 1968, private
respondents brought a special action for partition in the Court of
First Instance of Quezon, under the provisions of Rule 69 of the
Rules of Court, including as parties the heirs and successors-in-
interest of the co-owners of the Cagbalite Island in the second
contract of co-ownership dated April 11, 1968. In their answer
some of the defendants, petitioners herein, interposed such
defenses as prescription, res judicata, exclusive ownership,
estoppel and laches. LexLib
After trial on the merits, the trial court rendered a decision *** dated
November 6, 1981 dismissing the complaint, the dispositive
portion of which reads as follows:
"WHEREFORE, and in the light of all the foregoing this Court finds
and so holds that the Cagbalite Island has already been partitioned
into four (4) parts among the original co-owners or their
successors-in-interest.
Judgment is therefore rendered for the defendants against the
plaintiffs dismissing the complaint in the above entitled case.
Considering that the cross claims filed in the above entitled civil
case are not compulsory cross claims and in order that they may
be litigated individually the same are hereby dismissed without
prejudice.
IT IS SO ORDERED."
The motion for reconsideration filed by the plaintiffs, private
respondents herein, was denied by the trial court in an order dated
February 25, 1982 (Record on Appeal, p. 241).
On appeal, respondent Court reversed and set aside the decision
of the lower court (Rollo, p. 117). It also denied the motion for
reconsideration and the supplement to motion for reconsideration
filed by private respondents, in its resolution dated October 15,
1983 (Rollo, p. 86).
Instant petition was filed with the Court on December 5, 1985
(Rollo, p. 12). Petitioners Josefina Pansacola, et al. having filed a
separate petition (G.R. No. 72620) on the same subject matter and
issues raised in the instant petition, the counsel for private
respondents filed a consolidated comment on the separate
petitions for review on February 24, 1986 with the First Division of
the Court (Rollo, p. 119). It appears that counsel for petitioners
also filed a consolidated reply to the consolidated comment of
private respondents as required by the Second Division of the
Court (Rollo, p. 151). However, petitioners filed a separate reply in
the instant case on February 18, 1987 (Rollo, p. 168)as required
by the Court in a Resolution of the Second Division dated
November 24, 1986 (Rollo, p. 160).
On May 19, 1987, private respondents in the instant petition filed
a manifestation praying for the denial of the instant petition in the
same manner that G.R. No. 72620 was denied by the Court in its
Resolution dated July 23, 1986 (Rollo, p. 151). Their rejoinder to
the reply of petitioners was filed on May 25, 1987 (Rollo, p.
179). LLphil
On June 8, 1987, the Court resolved to give due course to the
petition (Rollo, p. 192). The memorandum of private respondents
was mailed on July 18, 1987 and received in the Court on July 29,
1987 (Rollo, p. 112); the memorandum for petitioners was mailed
on August 18, 1987 and received in the Court on September 7,
1987 (Rollo, p. 177).
The sole issue to be resolved by the Court is the question of
whether or not Cagbalite Island is still undivided property owned
in common by the heirs and successors-in-interest of the brothers,
Benedicto, Jose and Manuel Pansacola.
The Pansacola brothers purchased the Island in 1859 as common
property and agreed on how they would share in the benefits to be
derived from the Island. On April 11, 1868, they modified the terms
and conditions of the agreement so as to include in the co-
ownership of the island the children of their deceased brothers
Eustaquio and the other children of Manuel Pansacola (Fr. Manuel
Pea) who were committed in the agreement of February 11,
1859. The new agreement provided for a new sharing proportion
and distribution of the Island among the co-owners.
On January 20, 1907, the representative of the heirs of all the
original owners of Cagbalite Island entered into an agreement to
partition the Island, supplemented by another agreement dated
April 18, 1908. The contract dated January 20, 1907 provides as
follows:
"Sa Mauban, Tayabas, ika 20 ng Enero ng 1907 caming mga
quinatawan ng mga ibang coherederos na hindi caharap, sa
pulong na ito, sa nasa naming lahat na magcaroon na ng
catahimikan ang aming-aming cabahagui sa Pulong Kagbalete,
sumacatuid upang mapagtoos ang hangahan ng apat na sapul na
pagcacabahagui nitong manang ito, pagcacausap na naming
lahat at maihanay at mapagtalonan ang saysay ng isa't isa, ay
cusa naming pinagcasunduan at pinasiya ang nangasosonod:
Una: Ang malaquing calupaan, alis ang lahat na pacatan ay
babahaguin alinsunod sa pagcabaki na guinawa sa croquis na
niyari ng practico agrimensor Don Jose Garcia.
Icalawa: Ang Lomingoy, doon ang tuid na guhit sa ilong ng Pait,
ay pagaapatin ding sinlaqui ayon sa dating pagkakabaki.
Icatlo: Cung magawa na ang tunay na plano at icapit na sa lupa,
paglalagay ng nadarapat na mojon, ang masacupan ng guhit,
sumacatuid ang caingin at pananim ng isa na nasacupan ng pucto
na noocol sa iba, ay mapapasulit sa dapat magari, na
pagbabayaran nito ang nagtanim sa halagang: bawat caponong
niog na nabunga, P100 'un peso); cung ang bias ay abot sa isang
vara, P0.50; cung bagong tanim o locloc, P0.50 ang capono.
Icapat: Ang lahat na pacatan ay bacod na pagaapatin at bawat
bahagui ay noocol sa isat-isa sa apat na sanga ng paganacang
nagmana.
Icalima: Upang ang naipatanim ng bawat isa ay matama sa canya
ng mailagan ang hirap ng loob ng nagatikha; ay
pagtotolongtolongan ng lahat naiba na mahusay ang dalawang
partes na magcalapit na mapa ayong tumama, hangang may
pagluluaran, sa nagsikap at maoyanam, maidaco sa lugar na
walang cailangang pagusapan.
Icaanim: Ang casulatang ito, cung mapermahan na
magcacaharap sampong ng mga ibang coherederos na
notipicahan nitong lahat na pinagcasundoan ay mahahabilin sa
camay ng agrimensor, Amadeo Pansacola, upang canyang
mapanusugan ang maipaganap ang dito'y naootos.
Na sa catunayan at catibayan ng lahat na nalalagda dito, sa pag
galang at pag ganap dito sa paingacaisahan, ay pumerma sampo
ng mga sacsing caharap at catanto ngayong fecha ayon sa itaas."
The contract dated April 18, 1908 provides as follows:
"Sa Mauban, ika 18 ng Abril ng 1908, sa pagcacatipon ng lahat na
firmantes nito ay pinagcaisahan itong nangasosonod:
Una Pinagtitibay ang mga pinagcasundoan sa itaas noong 20
ng Enero ng 1907, liban na lamang sa mga pangcat na una at
icapat at tongcol doon pinasiya naming bahaguinin ng halohalo at
paparejo ang calupaan at pacatan.
Ycalawa Sa pagsucat ng agrimensor na si Amadeo at paggawa
ng plano at descripcion ay pagbabayaran siya ng sa bawat isa
naoocol sa halagang isang piso sa bawat hectarea.
Icatlo Ang caunting pucto sa `Mayanibulong' na maycaingin ni
G. Isidro Altamarino, asawa ni Restituta ay tutumbasan naman cay
G. Norberto Pansacola sa lugar ng Dapo calapit ng Pinangalo ng
gasing sucat.
Icapat Sa inilahad na plano ay pinasiya nang itoloy at upang
maca pagparehistro ang isa't isa ay pinagcaisahang
magcacagastos na parepareho para sa tablang pangmohon at ibat
iba pang cagastusan.
Sa catunayan at catibayan ay cami, pumirma." (Record on Appeal,
p. 224)
There is nothing in all four agreements that suggests that actual or
physical partition of the Island had really been made by either the
original owners or their heirs or successors-in-interest. The
agreement entered into in 1859 simply provides for the sharing of
whatever benefits can be derived from the island. The agreement,
in fact, states that the Island to be purchased shall be considered
as their common property. In the second agreement entered in
1868 the co-owners agreed not only on the sharing proportion of
the benefits derived from the Island but also on the distribution of
the Island each of the brothers was allocated a 1/4 portion of
the Island with the children of the deceased brother, Eustaquio
Pansacola allocated a 1/4 portion and the children of Manuel
Pansacola (Fr. Manuel Pea) also allocated a 1/4 portion of the
Island. With the distribution agreed upon each of the co-owner is
a co-owner of the whole, and in this sense, over the whole he
exercises the right of dominion, but he is at the same time the sole
owner of a portion, in the instant case, a 1/4 portion (for each group
of co-owners) of the Island which is truly abstract, because until
physical division is effected such portion is merely an ideal share,
not concretely determined (3 Manresa, Codigo Civil, 3rd Ed., page
486, cited in Lopez vs. Cuaycong, 74 Phil. 601; De la Cruz vs.
Cruz, 32 SCRA 307 [1970]; Felices vs. Colegado, 35 SCRA 173
[1970],; Dultra vs. CFI, 70 SCRA 465 [1976]; Gatchalian vs.
Arlegui, 75 SCRA 234 [1977].
In the agreement of January 20, 1907, the heirs that were
represented agreed on how the Island was to be partitioned. The
agreement of April 18, 1908 which supplements that of January
20. 1907 reveals that as of the signing of the 1908 agreement no
actual partition of the Island bad as yet been done. The second
and fourth paragraphs of the agreement speaks of a survey yet to
be conducted by a certain Amadeo and a plan and description yet
to be made. Virgilio Pansacola, a son of the surveyor named
Amadeo who is referred to in the contract dated April 18, 1908 as
the surveyor to whom the task of surveying Cagbalite Island
pursuant to said agreement was entrusted, however, testified that
said contracts were never implemented because nobody defrayed
the expenses for surveying the same (Record on Appeal, p. 225).
Petitioners invoke res judicata to bar this action for partition in view
of the decision of the Court in G.R. No. 21033, "Domingo Arce vs.
Maria Villabona, et al.," 21034, "Domingo Arce vs. Francisco
Pansacola, et al.," and 21035, "Domingo Arce vs. Emiliano
Pansacola, et al." promulgated on February 20, 1958 (Rollo, p.
141) and Brief for Defendants-Appellees, p. 87 Appendix I),
wherein the Court said:
"Considering the facts that he waited for a period of nearly 23
years after the return from his deportation before taking any
positive action to recover his pretended right in the property in
question, gives great credit, in our opinion, to the declaration of the
witnesses for the defense (a) that the original parcel of land was
partitioned as they claim, and (b) that the plaintiff had disposed of
all the right and interest which he had in the portion which had
been given to him."
The issue in the aforementioned case which were tried together is
not whether there has already been a partition of the Cagbalite
Island. The actions were brought by the plaintiff to recover
possession of three distinct parcels of land, together with
damages. In fact the word "partition" was used in the metaphysical
or ideal sense (not in its physical sense).
Commenting on the above ruling of the Court in connection with
the instant case, the respondent Court said: LLjur
"Concededly, the Supreme Court decision in G.R. Nos. 21033-35
(Exh. X) did use or employ the word 'partition.' A careful reading of
the said decision will, however, reveal, and we so hold, that the
employment or use of the word 'partition' therein was made not in
its technical and legal meaning or sense adverted to above, but,
rather in its ideal, abstract and spiritual sense, this is (at) once
evident from the bare statement in said decision to the effect that
the property was divided into four parts, without any reference to
the specific parts of the property that may have been adjudicated
to each owner. There being no such reference in the decision and
in the judgment affirmed therein to the adjudication of specific and
definite portions of the property to each co-owner, there is a clear
and logical inference that there was indeed no adjudication of
specific and definite portions of the property made to each co-
owner."
It must be admitted that the word "partition" is not infrequently used
both in popular and technical parlance (Fule vs. Fule, 52 Phil. 750
[1929]). For purposes of the aforementioned case, evidently the
Court used the word "partition" to refer to the distribution of the
Cagbalite Island agreed upon by the original owners and in the
later agreements, by the heirs and their subsequent successors-
in-interest. There need not be a physical partition; a distribution of
the Island even in a state of indiviso or was sufficient in order that
a co-owner may validly sell his portion of the co-owned property.
The sale of part of a particular lot thus co-owned by one co-owner
was within his right pro-indiviso is valid in its entirety (Pamplona
vs. Moreto, 96 SCRA 775 [1980]) but he may not convey a physical
portion with boundaries of the land owned in common (Mercado
vs. Liwanag, 5 SCRA 472 [1962]). Definitely, there was no physical
partition of the Island in 1859. Neither could there have been one
in 1894 because the manner of subdividing the Island was only
provided for in the later agreements entered into by the heirs in
1907 and 1908. There was a distribution of the Island in 1868 as
agreed upon by the original co-owners in their agreement of April
11, 1868. Any agreement entered into by the parties in 1894 could
be no more than another agreement as to the distribution of the
Island among the heirs of the original co-owners and the
preparation of a tentative plan by a practical surveyor, a Mr. Jose
Garcia, mentioned in the first paragraph of the 1907 agreement,
preparatory to the preparation of the real plan to be prepared by
the surveyor Amadeo, mentioned in the agreement of April 18,
1908.
What is important in the Court's ruling in the three aforementioned
cases is that, the fact that there was a distribution of the Island
among the co-owners made the sale of Domingo Arce of the
portion allocated to him though pro-indiviso, valid. He thus
disposed of all his rights and interests in the portion given to
him. LLphil
It is not disputed that some of the private respondents and some
of the petitioners at the time the action for partition was filed in the
trial court have been in actual possession and enjoyment of
several portions of the property in question (Rollo, p. 148). This
does not provide any proof that the Island in question has already
been actually partitioned and co-ownership terminated. A co-
owner cannot, without the conformity of the other co-owners or a
judicial decree of partition issued pursuant to the provision of Rule
69 of the Rules of Court (Rule 71 of the Old Rules), adjudicate to
himself in fee simple a determinate portion of the lot owned in
common, as his share therein, to the exclusion of other co-owners
(Santos, Jr. vs. Buenconsejo, 14 SCRA 407 [1965]; Carvajal vs.
Court of Appeals, 112 SCRA 237 11982]). It is a basic principle in
the law of co-ownership both under the present Civil Code as in
the Code of 1889 that no individual co-owner can claim any
definite portion thereof (Diversified Credit Corporation vs. Rosada,
26 SCRA 470 [1968]). It is therefore of no moment that some of
the co-owners have succeeded in securing cadastral titles in their
names to some portions of the Island occupied by them (Rollo, p.
10).
It is not enough that the co-owners agree to subdivide the property.
They must have a subdivision plan drawn in accordance with
which they take actual and exclusive possession of their
respective portions in the plan and titles issued to each of them
accordingly (Caro vs. Court of Appeals, 113 SCRA 10 [1982]). The
mechanics of actual partition should follow the procedure laid
down in Rule 69 of the Rules of Court. (Magallon vs. Montejo, 146
SCRA 282 [1986]).
Neither can such actual possession and enjoyment of some
portions of the Island by some of the petitioners herein be
considered a repudiation of the co-ownership. It is undisputed that
the Cagbalite Island was purchased by the original co-owners as
a common property and it has not been proven that the Island had
been partitioned among them or among their heirs. While there is
co-ownership, a co-owner's possession of his share is co-
possession which is linked to the possession of the other co-
owners (Gatchalian vs. Arlegui, 75 SCRA 234 [1977]). prcd
Furthermore, no prescription shall run in favor of a co-owner
against his co-owners or co-heirs so long as he expressly or
impliedly recognizes the co-ownership (Valdez vs. Olonga, 51
SCRA 71 [1973], Tero vs. Tero, 131 SCRA 100 [1984]). Co-
owners cannot acquire by prescription the share of the other co-
owners, absent a clear repudiation of the co-ownership clearly
communicated to the other co-owners (Mariano vs. De Vega, 148
SCRA 342 [1987]).
An action for partition does not prescribe. Article 403 of the Old
Civil Code, now Article 497, provides that the assignees of the co-
owners may take part in the partition of the common property, and
Article 400 of the Old Code, now Article 494 provides that each co-
owner may demand at any time the partition of the common
property, a provision which implies that the action to demand
partition is imprescriptible or cannot be barred by laches (Budlong
vs. Pondoc, 79 SCRA 24 [1977]). An action for partition does not
lie except when the co-ownership is properly repudiated by the co-
owner (Jardin vs. Hollasco, 117 SCRA 532 [1982]).
On July 23, 1986, the Court through its Second Division denied
the petition for the review of G.R. No. 72620, the petition for review
on certiorari separately filed by Josefina Pansacola (Rollo, p. 151).
PREMISES CONSIDERED, the instant petition is likewise
DENIED for lack of merit.
SO ORDERED.
||| (Del Banco v. Intermediate Appellate Court, G.R. No. L-72694,
[December 1, 1987], 240 PHIL 55-68)
C. Obligations of Each Co-owner
CASE:
Pardell v. Bartolome 23 Phil. 450
FIRST DIVISION
[G.R. No. 4656. November 18, 1912.]
RICARDO PARDELL Y CRUZ and VICENTA ORTIZ Y FELIN DE
PARDELL, plaintiffs-appellees, vs. GASPAR DE BARTOLOME
Y ESCRIBANO and MATILDE ORTIZ Y FELIN DE
BARTOLOME, defendants-appellants.
Gaspar de Bartolome in his own behalf.
B. Gimenez Zoboli for appellees.
SYLLABUS
1. ESTATES; REALTY; RIGHTS OF COOWNERS OR TENANTS
IN COMMON. Each coowner or tenant in common of undivided
realty has the same rights therein as the others; he may use and
enjoy the same without other limitation except that he must not
prejudice the rights of his coowners, but until a division is effected,
the respective parts belonging to each can not be determined;
each coowner exercises joint dominion and is entitled to joint use.
2. ID.; ID.; ID; RENT BY ONE COOWNER. For the use and
enjoyment of a particular portion of the lower part of a house, not
used as living quarters, a coowner must, in strict justice, pay rent,
in like manner as other people pay for similar space in the house;
he has no right to the free use and enjoyment of such space which,
if rented to a third party, would produce income.
3. ID.; ID.; ID.; REPAIRS AND IMPROVEMENT; INTEREST.
Until a cause instituted to determine the liability of the rest of the
coowners for repairs and improvements made by one of their
number is finally decided and the amount due is fixed, the persons
alleged to be liable can not be considered in default as to interest,
because interest is only due from the date of the decision fixing
the principal liability. (Supreme court of Spain, April 24, 1867,
November 19, 1869, November 22, 1901, in connection with arts.
1108-1110 of the Civil Code.)
4. ID.; ID.; ID.; VOLUNTARY ADMINISTRATOR;
COMPENSATION. To an administrator or voluntary manager
of property belonging to his wife and another, both coowners, the
property being undivided, the law does not conceded any
remuneration, without prejudice to his right to be reimbursed for
any necessary and useful expenditures in connection with the
property and for any damages he may have suffered thereby.
5. ID.; ID.; ID.; RIGHT TO DEMAND VALUATION BEFORE
DIVISION OR SALE. Any one of the coowners of undivided
property about to be divided or to be sold in consequence of a
mutual petition, has the right to ask that the property be valued by
experts, a valuation which would not be prejudicial but rather
beneficial to all.
DECISION
TORRES, J p:
This is an appeal by bill of exceptions, from the judgment of
October 5, 1907, whereby the Honorable Dionisio Chanco, judge,
absolved the defendants from the complaint, and the plaintiff from
a counterclaim, without special finding as to costs.
Counsel for the spouses Ricardo Pardell y Cruz and Vicenta Ortiz
y Felin de Pardell, the first of whom absent in Spain by reason of
his employment, conferred upon the second sufficient and ample
powers to appear before the courts of justice, on June 8, 1905, in
his written complaint, alleged that the plaintiff, Vicenta Ortiz, and
the defendant, Matilde Ortiz, are the duly recognized natural
daughters of the spouses Miguel Ortiz and Calixta Felin y Paula
who died in Vigan, Ilocos Sur, in 1875 and 1882, respectively; that
Calixta Felin, prior to her death, executed, on August 17, 1876, a
nuncupative will in Vigan, whereby she made her four children,
named Manuel, Francisca, Vicenta, and Matilde, surnamed Ortiz
y Felin, her sole and universal heirs of all her property; that, of the
persons enumerated, Manuel died before his mother and
Francisca a few years after her death, leaving no heirs of the said
testatrix are the plaintiff Vicenta Ortiz and the defendant Matilde
Ortiz; that, aside from some personal property and jewelry already
divided among the heirs, the testatrix possessed, at the time of the
execution of her will, and left at her death the real properties which,
with their respective cash values, are as follows:
1. A house of strong material, with the lot on which it is built,
situated on Escalante Street, Vigan, and valued at P6,000.00
2. A house of mixed material, with the
lot on which it
stands, at No. 88 Washington Street, Vigan valued at 1,500.00
3. A lot on Magallanes Street, Vigan;
valued at 100.00
4. A parcel of rice land, situated in
the barrio of San Julian,
Vigan;
valued at 60.00
5. A parcel of rice land in the pueblo
of Santa Lucia; 86.00
6. Three parcels of land in the pueblo
of Candon; valued at 150.00
Total 7,896.00
That, on or about the first months of the year 1888, the defendants,
without judicial authorization, nor friendly or extrajudicial
agreement, took upon themselves the administration and
enjoyment of the said properties and collected the rents, fruits, and
products thereof, to the serious detriment of the plaintiffs' interest;
that, notwithstanding the different and repeated demands
extrajudicially made upon Matilde Ortiz to divide the
aforementioned properties with the plaintiff Vicenta and to deliver
to the latter the one-half of the same which rightly belonged to her,
or the value thereof, together with one-half of the fruits and rents
collected therefrom, the said defendant and her husband, the said
defendant and her husband, the self-styled administrator of the
properties mentioned, had been delaying the partition and delivery
of the said properties by means of unkempt promises and other
excuses; and that the plaintiffs, on account of the extraordinary
delay in the delivery of one-half of said properties, or their value in
cash, as the case might be, had suffered losses and damages in
the sum of P8,000. Said counsel for the plaintiffs therefore asked
that judgment be rendered by sentencing the defendants, Gaspar
de Bartolome and Matilde Ortiz Felin de Bartolome, to restore and
deliver to the plaintiffs one-half of the total value in cash, according
to appraisal, of the undivided property specified, which one-half
amounted approximately to P3,498, or, if deemed proper, to
recognize the plaintiff Vicenta Ortiz to be vested with the full and
absolute right of ownership to the said undivided one-half of the
properties in question, as universal testamentary heir thereof
together with the defendant Matilde Ortiz, to indemnify the plaintiffs
in the sum of P8,000, for losses and damages, and to pay the
costs.
Counsel for the defendants, in his answer denied the facts alleged
in paragraphs 1, 4, 6, 7 and 8 thereof, inasmuch as, upon the death
of the litigating sisters' brother Manuel, their mother, who was still
living, was his heir by force of law, and the defendants had never
refused to give to the plaintiff Vicenta Ortiz her share of the said
properties; and stated that he admitted the facts alleged in
paragraph 2, provided it be understood, however, that the
surname of the defendant's mother was Felin, and not Felix, and
that Miguel Ortiz died in Spain, and not in Vigan; that he also
admitted paragraph 3 of the complaint, with the difference that the
said surname should be Felin, and likewise paragraph 5, except
the part thereof relating to the personal property and the jewelry,
since the latter had not yet been divided; that the said jewelry was
in the possession of the plaintiffs and consisted of: one Lozada
gold chronometer watch with a chain in the form of a bridle curb
and a watch charm consisting of the engraving of a postage stamp
on a stone mounted in gold and bearing the initials M.O., a pair of
cuff buttons made of gold coins, four small gold buttons, two finger
rings, another with the initials M.O., and a gold bracelet; and that
the defendants were willing to deliver to the plaintiffs, in conformity
with petition, one-half of the total value in cash, according to
appraisement, of the undivided real properties specified in
paragraph 5, which half amounted to P3,948.
In a special defense said counsel alleged that the defendant had
never refused to divide the said property and had in fact several
years before solicited the partition of the same; that, from 1886 to
1901, inclusive, there was collected from the property on Calle
Escolta the sum of 288 pesos, besides a few other small amounts
derived from other sources, which were delivered to the plaintiffs
with other larger amounts, in 1891, and from the property on Calle
Washington, called La Quinta, 990.95 pesos, which proceeds,
added together, made a total of 1,278.95 pesos, saving error or
omission; that, between the years abovementioned, 765.38 pesos
were spent on the house situated on Calle Escolta, and on that on
Calle Washington, La Quinta, 376.33, which made a total of
1,141.71, saving error or omission; that, in 1897, the work of
reconstruction was begun of the house on Calle Escolta, which
had been destroyed by an earthquake, which work was not
finished until 1903 and required an expenditure on the part of the
defendant Matilde Ortiz, of 5,091.52 pesos; that all the collections
made up to August 1,1905, including the rent from the stores,
amounted to only P3,654.15, and the expenses to P6,252.32,
there being, consequently, a balance of P2,598.18, which, divided
between the sisters, the plaintiff and the defendant, would make
the latter's share P1,299.08; that, as shown by the papers kept by
the plaintiffs, in the year 1891 the defendant Bartolome presented
to the plaintiffs a statement in settlement of accounts, and
delivered to the person duly authorized by the latter for the
purpose, the sum of P2,606.29, which the said settlement showed
was owing his principals, from various sources; that, the defendant
Bartolome having been the administrator of the undivided property
claimed by the plaintiffs, the latter were owing the former the legal
remuneration of the percentage allowed by law for administration;
and that the defendants were willing to pay the sum of P3,948,
one-half of the total value of the said properties, deducting
therefrom the amount found to be owing them by the plaintiffs, and
asked that the judgment be rendered in their favor to enable them
to recover from the latter that amount, together with the costs and
expenses of the suit.
The defendants, in their counterclaim, reported each and all of the
allegations contained in each of the paragraphs of section 10 of
their answer; that the plaintiffs were obliged to pay to the
administrator of the said property the remuneration allowed him by
law; that, as the revenues collected by the defendants amounted
to no more than P3,654.15, and the expenditures incurred by
them, to P6,252.32, it followed that the plaintiffs owed the
defendants P1,299.08, that is, one-half of the difference between
the amount collected from and that expended on the properties,
and asked that judgment be therefore rendered in their behalf to
enable them to collect this sum from the plaintiffs, Ricardo Pardell
and Vicenta Ortiz, with legal interest thereon from December 7,
1904, the date when the accounts were rendered, together with
the sums to which the defendant Bartolome was entitled for the
administration of the undivided properties in question.
By a written motion of August 21, 1905, counsel for the plaintiffs
requested permission to amend the complaint by inserting
immediately after the words "or respective appraisal," fifth line of
paragraph 5, the phrased "in cash in accordance with the
assessed value," and likewise further to amend the same, in
paragraph 6 thereof, by substituting the following words in lieu of
the petition for the remedy sought: "By reason of all the foregoing,
I beg the court to be pleased to render judgment by sentencing the
defendants, Gaspar de Bartolome and Matilde Ortiz Felin de
Bartolome, to restore and deliver to the plaintiffs an exact one-half
of the total value of the undivided properties described in the
complaint, such value to be ascertained by the expert appraisal of
two competent persons, one of whom shall be appointed by the
plaintiffs and the other by the defendants, and, in case of
disagreement between these two appointees such value shall be
determined by a third expert appraiser appointed by the court, or,
in a proper case, by the price offered at public auction; or, in lieu
thereof, it is requested that the court recognize the plaintiff, Vicenta
Ortiz, to be vested with a full and absolute right to an undivided
one-half of the said properties; furthermore, it is prayed that the
plaintiffs be awarded an indemnity of P8,000 for losses and
damages, and the costs." Notwithstanding the opposition of the
defendants, the said defendants were allowed a period of three
days within which to present a new answer. An exception was
taken to this ruling.
The proper proceedings were had with reference to the valuation
of the properties concerned in the division sought and incidental
issues were raised relative to the partition of some of them and
their award to one or the other of the parties. Due consideration
was taken of the averments and statements of both parties who
agreed between themselves, before the court, that any of them
might at any time acquire, at the valuation fixed by the expert
judicial appraiser, any of the properties in question, there being
none in existence excluded by the litigants. The court, therefore,
by order of December 28, 1905, ruled that the plaintiffs were
entitled to acquire, at the valuation determined by the said expert
appraiser, the building known as La Quinta, the lot on which it
stands and the warehouses and other improvements comprised
within the inclosed land, and the seed lands situated in the pueblos
of Vigan and Santa Lucia; and that the defendants were likewise
entitled to acquire the house on Calle Escolta, the lot on Calle
Magallanes, and the three parcels of land situated in the pueblo of
Candon.
After this partition had been made, counsel for the defendants, by
a writing of March 8, 1908, set forth: That, having petitioned for the
appraisement of the properties in question for the purpose of their
partition, it was not to be understood that he desisted from the
exception duly entered to the ruling made in the matter of the
amendment to the complaint; that the properties retained by the
defendants were valued at P9,310, and those retained by the
plaintiffs, at P2,885, one-half of which amounts each party had to
deliver to the other, as they were pro indiviso properties; that,
therefore, the defendants had to pay the plaintiffs the sum of
P3,212.50, after deducting the amount which the plaintiffs were
obliged to deliver to the defendants, as one-half of the price of the
properties retained by the former; that, notwithstanding that the
amount of the counterclaim for the expenses incurred in the
reconstruction of the pro indiviso property should be deducted
from the sum which the defendants had to pay the plaintiffs, the
former, for the purpose of bringing the matter of the partition to a
close, would deliver to the latter, immediately upon the signing of
the instrument of purchase and sale, the sum of P3,212.50, which
was one-half of the value of the properties allotted to the
defendants; such delivery, however, was not to be understood as
a renouncement of the said counterclaim, but only as a means for
the final termination of the pro indiviso status of the property.
The case having been heard, the court, on October 5, 1907,
rendered judgment holding that the revenues and the expenses
were compensated by the residence enjoyed by the defendant
party, that no losses or damages were either caused or suffered,
nor likewise any other expense besides those aforementioned,
and absolved the defendants from the complaint and the plaintiffs
from the counterclaim, with no special finding as to costs. An
exception was taken to this judgment by counsel for the
defendants who moved for a new trial on the grounds that the
evidence presented did not warrant the judgment rendered and
that the latter was contrary to law. This motion was denied,
exception whereto was taken by said counsel, who filed the proper
bill of exceptions, and the same was approved and forwarded to
the clerk of this court, with a transcript of the evidence.
Both of the litigating sisters assented to a partition by halves of the
property left in her will by their mother at her death; in fact, during
the course of this suit, proceedings were had, in accordance with
the agreement made, for the division between them of the said
hereditary property of common ownership, which division was
recognized and approved in the findings of the trial court, as shown
by the judgment appealed from.
The issues raised by the parties, aside from the said division made
during the trial, and which have been submitted to this court for
decision, concern: (1) The indemnity claimed for losses and
damages, which the plaintiffs allege amount to P8,000, in addition
to the rents which should have been derived from the house on
Calle Escolta, Vigan; (2) the payment by the plaintiffs to the
defendants of the sum of P1,299.08, demanded by way of
counterclaim, together with legal interest thereon from December
7, 1904; (3) the payment to the husband of the defendant Matilde
Ortiz, of a percentage claimed to be due him as the administrator
of the property of common ownership; (4) the division of certain
jewelry in the possession of the plaintiff Vicenta Ortiz; and (5) the
petition that the amendment be held to have been improperly
admitted, which was made by the plaintiffs in their written motion
of August 21, 1905, against the opposition of the defendants,
through which admission the latter were obliged to pay the former
P910.50.
Before entering upon an explanation of the propriety or impropriety
of the claims made by both parties, it is indispensable to state that
the trial judge, in absolving the defendants from the complaint,
held that they had not caused losses and damages to the plaintiffs,
and that the revenues and the expenses were compensated, in
view of the fact that the defendants had been living for several
years in the Calle Escolta house, which was pro indiviso property
of joint ownership.
By this finding absolving the defendants from the complaint, and
which was acquiesced in by the plaintiffs who made no appeal
therefrom, the first issue has been decidedwhich was raised by the
plaintiffs, concerning the indemnity for losses and damages,
wherein are comprised the rents which should have been obtained
from the upper story of the said house during the time it was
occupied by the defendants, Matilde Ortiz and her husband,
Gaspar de Bartolome.
Notwithstanding the acquiescence on the part of the plaintiffs,
assenting to the said finding whereby the defendants were
absolved from the complaint, yet as such absolution is based on
the compensation established in the judgment of the trial court,
between the amounts which each party is entitled to claim from the
other, it is imperative to determine whether the defendant Matilde
Ortiz, as coowner of the house on Calle Escolta, was entitled, with
her husband, to reside therein, without paying to her coowner,
Vicenta Ortiz, who, during the greater part of the time, lived with
her husband abroad, one-half of the rents which the upper story
would have produced, had it been rented to a stranger.
Article 394 of the Civil Code prescribes:
"Each coowner may use the things owned in common, provided
he uses them in accordance with their object and in such manner
as not to injure the interests of the community nor prevent the
coowners from utilizing them according to their rights."
Matilde Ortiz and her husband occupied the upper story, designed
for use as a dwelling, in the house of joint ownership; but the
record shows no proof that, by so doing, the said Matilde
occasioned any detriment to the interests of the community
property, nor that she prevented her sister Vicenta from utilizing
the said upper story according to her rights. It is to be noted that
the stores of the lower floor were rented and an accounting of the
rents was duly made to the plaintiffs.
Each coowner of realty held pro indiviso exercises his rights over
the whole property and may use and enjoy the same with no other
limitation than that he shall not injure the interests of his coowners,
for the reason that, until a division be made, the respective part of
each holder can not be determined and every one of the coowners
exercises together with his other coparticipants, joint ownership
over the pro indiviso property, in addition to his use and enjoyment
of the same.
As the hereditary properties of the joint ownership of the two
sisters, Vicenta Ortiz, plaintiff, and Matilde Ortiz, defendant, were
situated in the Province of Ilocos Sur, and were in the care of the
last named, assisted by her husband, while the plaintiff Vicenta
with her husband was residing outside of the said province the
greater part of the time between 1885 and 1905, when she left
these Islands for Spain, it is not at all strange that delays and
difficulties should have attended the efforts made to collect the
rents and proceeds from the property held in common and to
obtain a partition of the latter, especially during several years
when, owing to the insurrection, the country was in a turmoil; and
for this reason, aside from that founded on the right of coownership
of the defendants, who took upon themselves the administration
and care of the property of joint tenancy for purposes of their
preservation and improvement, these latter are not obliged to pay
to the plaintiff Vicenta one-half of the rents which might have been
derived from the upper story of the said house on Calle Escolta,
and, much less, because one of the living rooms and the
storeroom thereof were used for the storage of some belongings
and effects of common ownership between the litigants. The
defendant Matilde, therefore, in occupying with her husband the
upper floor of the said house, did not injure the interests of her
coowner, her sister Vicenta, nor did she prevent the latter from
living therein, but merely exercised a legitimate right pertaining to
her as a coowner of the property.
Notwithstanding the above statements relative to the joint-
ownership rights which entitled the defendants to live in the upper
story of the said house, yet, in view of the fact that the record
shows it to have been proved that the defendant Matilde's
husband, Gaspar de Bartolome, occupied for four years a room or
a part of the lower floor of the same house on Calle Escolta, using
it as an office for the justice of the peace, a position which he held
in the capital of that province, strict justice requires that he pay his
sister-in-law, the plaintiff, one-half of the monthly rent which the
said quarters could have produced, had they been leased to
another person. The amount of such monthly rental is fixed at P16
in appearance with the evidence shown in the record. This
conclusion as to Bartolome's liability results from the fact that,
even as the husband of the defendant coowner of the property, he
had no right to occupy and use gratuitously the said part of the
lower floor of the house in question, where he lived with his wife,
to the detriment of the plaintiff Vicenta who did not receive one-
half of the rent which those quarters could and should have
produced, had they been occupied by a stranger, in the same
manner that rent was obtained from the rooms on the lower floor
that were used as stores. Therefore, the defendant Bartolome
must pay to the plaintiff Vicenta P384, that is, one-half of P768,
the total amount of the rents which should have been obtained
during four years from the quarters occupied as an office by the
justice of the peace of Vigan.
With respect to the second question submitted for decision to this
court, relative to the payment of the sum demanded as a
counterclaim, it was admitted and proved in the present case that,
as a result of a serious earthquake on August 15, 1897, the said
house on Calle Escolta was left in ruins and uninhabitable, and
that, for its reconstruction or repair, the defendants had to expend
the sum of P6,252.32. This expenditure, notwithstanding that it
was impugned, during the trial, by the plaintiffs, was duly proved
by the evidence presented by the defendants. Evidence,
unsuccessfully rebutted, was also introduced which proved that
the rents produced by all the rural and urban properties of common
ownership amounted, up to August 1, 1905, to the sum of
P3,654.15 which, being applied toward the cost of the repair work
on the said house, leaves a balance of P2,598.17, the amount
actually advanced by the defendants, for the rents collected by
them were not sufficient for the termination of all the work
undertaken on the said building, necessary for its complete repair
and to replace it in a habitable condition. It is therefore lawful and
just that the plaintiff Vicenta Ortiz, who was willing to sell to her
sister Matilde for P1,500, her share in the house in question, when
it was in a ruinous state, should pay the defendants one-half of the
amount expended in the said repair work, since the building after
reconstruction was worth P9,000, according to expert appraisal.
Consequently, the counterclaim made by the defendants for the
payment to them of the sum of P1,299.08, is a proper demand,
though from this sum a reduction must be made of P384, the
amount of one-half of the rents which should have been collected
for the use of the quarters occupied by the justice of the peace,
the payment of which is incumbent upon the husband of the
defendant Matilde, as aforesaid, and the balance remaining,
P915.08, is the amount which the plaintiff Vicenta must pay to the
defendants.
The defendants claim to be entitled to the collection of legal
interest on the amount of the counterclaim, from December 7,
1904. This contention can not be sustained, inasmuch as, until this
suit is finally decided, it could not be known whether the plaintiffs
would or would not be obliged to pay any sum whatever in
reimbursement of expenses incurred by the plaintiffs in the repair
work on the said house on Calle Escolta, whether or not the
defendants in turn, were entitled to collect any such amount, and
finally what the net sum would be which the plaintiffs might have
to pay as reimbursement for one-half of the expenditures made by
the defendants. Until final disposal of the case, no such net sum
can be determined, nor until then can the debtor be deemed to be
in arrears. In order that there be an obligation to pay legal interest
in connection with a matter at issue between the parties, it must
be declared in a judicial decision from what date the interest will
be due on the principal concerned in the suit. This rule has been
established by the decisions of the supreme court of Spain, in
reference to articles 1108, 1109, and 1110 of the Civil Code,
rendered on April 24, 1867, November 19, 1869, and February 22,
1901.
With regard to the percentage, as remuneration claimed by the
husband of the defendant Matilde for his administration of the
property of common ownership, inasmuch as no stipulation
whatever was made in the matter by and between him and his
sister-in-law, the said defendant, the claimant is not entitled to the
payment of any remuneration whatsoever. Of his own accord and
as an officious manager, he administered the said pro indiviso
property, one-half of which belonged to his wife who held it in joint
tenancy, with his sister-in-law, and the law does not allow him any
compensation as such voluntary administrator. He is merely
entitled to a reimbursement for such actual and necessary
expenditures as he may have made on the undivided properties
and an indemnity for the damages he may have suffered while
acting in that capacity, since at all events it was his duty to care for
and preserve the said property half of which belonged to his wife;
and in exchange for the trouble and labor occasioned him by the
administration of his sister-in-law's half of the said property, he with
his wife resided in the upper story of the house aforementioned,
without payment of one-half of the rents said quarters might have
produced had they been leased to another person.
With respect to the division of the certain jewelry, petitioned for by
the defendants and appellants only in their brief in this appeal, the
record of the proceedings in the lower court does not show that
the allegation made by the plaintiff Vicenta is not true, to the effect
that the deceased mother of the litigant sisters disposed of this
jewelry during her lifetime, because, had she not done so, the will
made by the said deceased would have been exhibited in which
the said jewelry would have been mentioned, at least it would have
been proved that the articles in question came into the possession
of the plaintiff Vicenta without the expressed desire and the
consent of the deceased mother of the said sisters, for the gift of
this jewelry was previously assailed in the courts, without success;
therefore, and in view of its inconsiderable value, there is no
reason for holding that the said gift was not made.
As regards the collection of the sum of P910.50, which is the
difference between the assessed value of the undivided real
properties and the price of the same as determined by the judicial
expert appraiser, it is shown by the record that the ruling of the trial
judge admitting the amendment to the original complaint, is in
accord with the law and principles of justice, for the reason that
any of the coowners of a pro indiviso property, subject to division
or sale, is entitled to petition for its valuation is not prejudicial to
any of the joint owners, but is beneficial to their interests,
considering that, as a general rule, the assessed value of a
building or a parcel of realty is less than the actual real value of
the property, and this being understood by the defendants, they
appointed an expert appraiser to determine, in conjunction with the
one selected by the plaintiffs, the value of the properties of joint
ownership. These two experts took part in the later proceedings of
the suit until finally, and during the course of the latter, the litigating
parties agreed to an amicable division of the pro
indiviso hereditary property, in accordance with the price fixed by
the judicial expert appraiser appointed as a third party, in view of
the disagreement between and nonconformity of the appraisers
chosen by the litigants. Therefore it is improper now to claim a right
to the collection of the said sum, the difference between the
assessed value and that fixed by the judicial expert appraiser for
the reason that the increase in price, as determined by this latter
appraisal, redounded to the benefit of both parties.
In consideration of the foregoing, whereby the errors assigned to
the lower court have been duly refuted, it is our opinion that, with
a partial reversal of the judgment appealed from, in so far as it
absolves the plaintiffs from the counterclaim presented by the
defendants, we should and hereby do sentence the plaintiffs to the
payment of the sum of P915.08, the balance of the sum claimed
by the defendants as a balance of the one-half of the amount which
the defendants advanced for the reconstruction or repair of the
Calle Escolta house, after deducting from the total of such sum
claimed by the latter the amount of P384 which Gaspar de
Bartolome, the husband of the defendant Matilde, should have
paid as one-half of the rents due for his occupation of the quarters
on the lower floor of the said house as an office for the justice of
the peace court of Vigan; and we further find: (1) That the
defendants are not obliged to pay one-half of the rents which could
have been obtained from the upper story of the said house; (2) that
the plaintiffs can not be compelled to pay legal interest from
December 7, 1904, on the sum expended in the reconstruction of
the aforementioned house, but only the interest fixed by law, at the
rate of per cent per annum, from the date of the judgment to be
rendered in accordance with this decision; (3) that the husband of
the defendant Matilde Ortiz is not entitled to any remuneration for
the administration of the pro indiviso property belonging to both
parties; (4) that, neither is he entitled to collect from the plaintiffs
the sum of P910.50, the difference between the assessed
valuation and the price set by the expert appraisal solicited by the
plaintiffs in their amendment to the complaint; and, (5) that no
partition shall be made of certain jewelry aforementioned now in
the possession of the plaintiff Vicenta Ortiz. The said judgment, as
relates to the points appealed, is affirmed, in so far as its findings
agree with those of this decision, and is reversed, in so far as they
do not. No special finding is made regarding the costs of both
instances. So ordered.
||| (Pardell y Cruz v. Bartolome y Escribano, G.R. No. 4656,
[November 18, 1912], 23 PHIL 450-466)
D. Extinguishment of Co-ownership
CASES:
Caro v. Court of Appeals 113 SCRA 10
1. CIVIL LAW; SUCCESSION; PARTITION; ORAL AGREEMENT
THEREFOR, VALID AND BINDING UPON THE PARTIES. An
agreement of partition, though oral, is valid and consequently
binding upon the parties. (Hernandez vs. Andal, et al., 78 Phil,
196). In the case at bar, the fact is that as early as 1960, co-
ownership of the subject parcels of land was terminated when
Alfredo Benito, Luz Caro and the Intestate Estate of Mario Benito,
as trustee and representative of the heirs of Mario Benito, agreed
to subdivide the property. A petition for subdivision was then filed
for the purpose. This was accompanied by the affidavits of Alfredo
Benito and Saturnino Benito, both dated September 13, 1960 to
the effect that they agree to the segregation of the land formerly
owned in common by Mario Benito, Alfredo Benito and Benjamin
Benito, A subdivision plan was made and by common agreement,
Lot 1-C thereof, with an area of 163 hectares, more or less, was
ceded to petitioner, Thereafter, the co-owners took actual and
exclusive possession of the specific portions respectively
assigned to them. A subdivision title was subsequently issued on
the lot assigned to petitioner.||| (Caro v. Court of Appeals, G.R. No.
L-46001, [March 25, 1982], 198 PHIL 399-410)
Bailon- Casilao v. Court of Appeals 160 SCRA 738
1. CIVIL LAW; CO-OWNERSHIP; SALE OR
DISPOSITION OF ENTIRE PROPERTY AFFECTS ONLY HIS
UNDIVIDED SHARE. If a co-owner sells the whole property as
his, the sale will affect only his own share but not those of the other
co-owners who did not consent to the sale [Punsalan v. Boon Liat,
44 Phil. 320 (1923)]. The sale or other disposition affects only his
undivided share and the transferee gets only what would
correspond to his grantor in the partition of the thing owned in
common. [Ramirez v. Bautista, 14 Phil. 528 (1909)], thereby
making him a co-owner of the property.
2. ID.; ID.; RECOURSE OF A CO-OWNER WHERE THE ENTIRE
PROPERTY WAS SOLD WITHOUT HIS CONSENT. The
appropriate recourse of co-owners in cases where their consent
were not secured in a sale of the entire property as well as in a
sale merely of undivided shares of some of the co-owners is an
action for PARTITION under Rule 69 of the Revised
Rules of Court. Neither recovery of possession nor restitution can
be granted since the defendant buyers are legitimate proprietors
and possessors in joint ownership of the common property
claimed [Ramirez v. Bautista, supra].
||| (Bailon-Casilao v. Court of Appeals, G.R. No. 78178, [April 15,
1988], 243 PHIL 888-899)
Roque v. Intermediate Appellate Court 165 SCRA 118
THIRD DIVISION
[G.R. No. 75886. August 30, 1988.]
CONCEPCION ROQUE, petitioner, vs. HON. INTERMEDIATE
APPELLATE COURT, ERNESTO ROQUE, FILOMENA
OSMUNDO, CECILIA ROQUE, MARCELA ROQUE, JOSE
ROQUE and RUBEN ROQUE, respondents.
Lorenzo J . Liwag for petitioner.
Dominador Ad Castillo for private respondents.
SYLLABUS
1. REMEDIAL LAW; ACTION; PARTITION; NATURE. An
action for partition which is typically brought by a person
claiming to be co-owner of a specified property against a
defendant or defendants whom the plaintiff recognizes to be co-
owners may be seen to present simultaneously two principal
issues. First, there is the issue of whether the plaintiff is indeed a
co-owner of the property sought to be partitioned. Second,
assuming that the plaintiff successfully hurdles the first issue, there
is the secondary issue of how the property is to be divided between
plaintiff and defendant(s) i.e., what portion should go to which
co-owner.
2. ID.; ID.; ID.; ID.; CLAIM OF AN ADVERSE TITLE TO THE
PROPERTY SUBJECT OF PARTITION WILL NOT RESULT IN
THE DISMISSAL OF AN ACTION THEREFOR; CASE AT BAR.
Should the trial court find that the defendants do not dispute the
status of the plaintiff as co-owner, the court can forthwith proceed
to the actual partitioning of the property involved. In case the
defendants assert in their Answer exclusive title in themselves
adversely to the plaintiff, the court should not dismiss the plaintiff's
action for partition but, on the contrary and in the exercise of its
general jurisdiction, resolve the question of whether the plaintiff is
co-owner or not. Should the trial court find that the plaintiff was
unable to sustain his claimed status as co-owner, or that the
defendants are or have become the sole and exclusive owners of
the property involved, the court will necessarily have to dismiss the
action for partition. This result would be reached, not because the
wrong action was commenced by the plaintiff, but rather because
the plaintiff having been unable to show co-ownership rights in
himself, no basis exists for requiring the defendants to submit to
partition the property at stake. If, upon the other hand, the court
after trial should find the existence of co-ownership among the
parties litigant, the court may and should order the partition of the
property in the same action. Judgment for one or the other party
being on the merits, the losing party (respondents in this case)
may then appeal the same. In either case, however, it is quite
unnecessary to require the plaintiff to file another action, separate
and independent from that for partition originally instituted.
Functionally, an action for partition may be seen to be at once an
action for declaration of co-ownership and for segregation and
conveyance of a determinate portion of the property involved. This
is the import of our jurisprudence on the matter and is sustained
by the public policy which abhors multiplicity of actions.
3. CIVIL LAW; PRESCRIPTION OF ACTION; PARTITION;
GENERALLY, AN ACTION THEREFOR DOES NOT
PRESCRIBE; EXCEPTION, CASE AT BAR. The question of
prescription also needs to be addressed in this connection. It is
sometimes said that "the action for partition of the thing owned in
common (actio communi dividendo or actio familiae erciscundae)
does not prescribe." This statement bears some refinement. In the
words of Article 494 of the Civil Code, "each co-owner may
demand at any time the partition of the thing owned in common,
insofar as his share is concerned." No matter how long the co-
ownership has lasted, a co-owner can always opt out of the co-
ownership, and provided the defendant co-owners or co-heirs
have theretofore expressly or impliedly recognized the co-
ownership, they cannot set up as a defense the prescription of the
action for partition. But if the defendants show that they had
previously asserted title in themselves adversely to the plaintiff and
for the requisite period of time, the plaintiffs right to require
recognition of his status as a co-owner will have been lost by
prescription and the court cannot issue an order requiring partition.
This is precisely what happened in Jardin v. Hallasgo,117 SCRA
532 (1982), which the respondent appellate court cited to support
its position quoted above.
4. ID.; PROPERTY; ACQUISITIVE PRESCRIPTION;
UNREASONABLE LONG INACTION; EFFECT; CASE AT BAR.
The facts on record clearly show that petitioner Concepcion
Roque had been in actual, open and continuous possession of a
three-fourths (3/4) portion of Lot No. 1549 ever since execution of
the "Bilihan Lubos at Patuluyan" in November of 1961. The Court
notes that it was only in their Answer with Compulsory
Counterclaim filed with the trial court in December of 1977 more
than sixteen (16) years later that respondents first questioned
the genuineness and authenticity of the "Bilihan Lubos at
Patuluyan." Not once during those sixteen (16) years did
respondents contest petitioner's occupation of a three-fourths (3/4)
portion of Lot No. 1549. Furthermore, if indeed it is true that
respondents, as they claim, are the absolute owners of the whole
of Lot No. 1549, it is most unusual that respondents would have
allowed or tolerated such prolonged occupation by petitioner of a
major portion (3/4) of the land while they, upon the other hand,
contented themselves with occupation of only a fourth thereof.
This latter circumstance, coupled with the passage of a very
substantial length of time during which petitioner all the while
remained undisturbed and uninterrupted in her occupation and
possession, places respondents here in laches: respondents may
no longer dispute the existence of the co-ownership between
petitioner and themselves nor the validity of petitioner's claim of a
three-fourths (3/4) interest in Lot No. 1549, as they are deemed,
by their unreasonably long inaction, to have acquiesced in the co-
ownership.
DECISION
FELICIANO, J p:
The subject of the present Petition for Review is the 31 July 1986
Decision of the former Intermediate Appellate Court in AC-G.R. CV
No. 02248 (entitled, "Concepcion Roque, plaintiff-appellee, vs.
Ernesto Roque, Filomena Osmundo, Cecilia Roque, Marcela
Roque, Jose Roque and Ruben Roque, defendants-appellants")
which reversed and set aside on appeal the decision of the
Regional Trial Court of Malolos, Branch 9.
The controversy here involves a 312 square meter parcel of land
situated in San Juan, Malolos, Bulacan and designated as Lot No.
1549 of the Cadastral Survey of Malolos. The property was
registered originally in the name of Januario Avendao, a bachelor
who died intestate and without issue on 22 October 1945.
On 21 September 1959, the intestate heirs of Januario Avendao
executed a document entitled "Paghahati at Pagtagabuyan ng
Mana sa Labas ng Hukuman." 1 Through this instrument,
extrajudicial partition of Lot No. 1549 was effected among the
intestate heirs as follows:
a. One-fourth (1/4) undivided portion to Illuminada Avendao.
b. One-fourth (1/4) undivided portion to Gregorio Avendao and
Miguel Avendao.
c. One-fourth (1/4) undivided portion to Bernardino, Bienvenido,
Numeriano and Rufina, all surnamed Avendao.
d. One-fourth (1/4) undivided portion to respondent Ernesto
Roque and Victor Roque. 2
On 28 September 1959, co-owners Illuminada, Gregorio, Miguel,
Bernardino, Bienvenido, Numeriano and Rufina, all surnamed
Avendao, in consideration of the aggregate amount of P500.00,
transferred their collective and undivided three-fourths (3/4) share
in Lot No. 1549 to respondent Ernesto Roque and Victor Roque,
thereby vesting in the latter full and complete ownership of the
property. The transactions were embodied in two (2) separate
deeds of sale both entitled "Kasulatan ng Bilihang
Patuluyan" 3 and both duly notarized. Subsequently, in an
unnotarized "Bilihan Lubos at Patuluyan 4 dated 27 November
1961, Ernesto and Victor Roque purportedly sold a three-fourths
(3/4) undivided portion of Lot No. 1549 to their half-sister,
petitioner Concepcion Roque, for the same amount. The property,
however, remained registered in the name of the decedent,
Januario Avendao.
Upon the instance of petitioner Concepcion Roque and allegedly
of respondent Ernesto Roque, Lot No. 1549 was surveyed on 20
September 1975. Consequent thereto, a Subdivision Plan 5 was
drawn up by the Geodetic Engineer identifying and delineating a
one-fourth (1/4) portion (78 square meters) of the property as
belonging to respondent Ernesto Roque and Victor Roque (who
had died on 14 April 1962), upon the one hand, and a three-fourths
(3/4) portion (234 square meters) of the same property as
belonging to petitioner Concepcion Roque, upon the other hand.
Petitioner claimed that preparation of the Subdivision Plan, which
was approved on 3 November 1975 by the Land Registration
Commission was a preliminary step leading eventually to partition
of Lot No. 1549, partition allegedly having been previously agreed
upon inter se by the co-owners. Respondents Ernesto Roque and
the legal heirs of Victor Roque, however, refused to acknowledge
petitioner's claim of ownership of any portion of Lot No. 1549 and
rejected the plan to divide the land.
Attempts at amicable settlement having fallen through, petitioner
Concepcion Roque, on 6 December 1977, filed a Complaint for
"Partition with Specific Performance" 6 (docketed as Civil Case
No. 5236-M) with Branch 2 of the Court of First Instance of Malolos
against respondents Ernesto Roque and the heirs of Victor Roque"
In her complaint, petitioner (plaintiff below) claimed legal
ownership of an undivided three-fourths (3/4) portion of Lot No.
1549 by virtue of the 27 November 1961 "Bilihan Lubos at
Patuluyan" executed in her favor by Ernesto Roque and the heirs
of Victor Roque. In support of this claim, petitioner also presented
an undated and unauthorized "Kasulatang Pagkilala sa Bilihan
Patuluyan ng Bahagui at Pagmamana sa Labas ng Hukuman at
Paghahati-hati at Abuyan ng Bahagui" 7 said to have been signed
by the respondents in acknowledgment of the existence and
validity of the Bilihan in favor of petitioner. Finally, petitioner
alleged that, as a co-owner of Lot No. 1549, she had a right to seek
partition of the property, that she could not be compelled to remain
in the co-ownership of the same.
In an Answer with Compulsory Counterclaim 8 filed on 28
December 1977(defendants below) impugned the genuineness
and due execution of the "Bilihan Lubos at Patuluyan" dated 27
November 1961 on the ground "that the signatures appearing
thereon are not the authentic signatures of the supposed
signatories . . ." It was also alleged that petitioner Concepcion
Roque, far from being a co-owner of Lot No. 1549, "occupied a
portion of the lot in question by mere tolerance of the
[defendants]." Respondents also refused to honor the
unnotarized Kasulatan and, additionally, denied having had any
participation in the preparation of the Subdivision Plan.
On 27 June 1983, the trial court (now Branch 9, Regional Trial
Court of Malolos) rendered a Decision, 9 the dispositive portion of
which read:
"WHEREFORE, judgment is hereby rendered, in favor of the
plaintiff and against the defendants;
1. Ordering the heirs of the late Victor Roque namely Filomena
Osmundo, his spouse, his children, Cecilia Roque, Marcela
Roque, Jose Roque and Ruben Roque and their uncle and co-
defendant Ernesto Roque, to execute a deed of confirmation of the
sale made by Ernesto and Victor Roque in favor of plaintiff
Concepcion Roque, entitled "Bilihan Lubos at Patuluyan" execute
on November 27, 1961, Exh. E over the 3/4 portion of the subject
property;
2. Ordering the partition of the parcel of land described in par. 3 of
the complaint covered by the Original Certificate of Title No. 1442-
Bulacan issued in the name of Janurio Avendao, in the proportion
of 3/4 to pertain to Concepcion Roque, and 1/4 to pertain to
Ernesto Roque and his co-defendants, his sister-in-law, nephews
and nieces, in accordance with the approved subdivision plan
(LRC Psd-230726).
3. Ordering defendants, jointly and severally, to pay to plaintiff the
sum of P2,000.00 as and for attorney's fees and the costs of suit.
SO ORDERED.
The respondents appealed from this decision alleging the following
errors:
"I
The lower court erred when it decided and ordered defendants-
appellants to execute a confirmation of the "Bilihan Lubos at
Patuluyan," Exh. "E."
II
The lower court erred when it decided and ordered the defendants-
appellants to deliver unto the plaintiff [a] 3/4 share of the land in
question.
III
The lower court erred in deciding this case in favor of the plaintiff-
appellee, based on an unnotarized and forged signature of
defendant-appellant Ernesto Roque.
IV
The lower court erred in giving credence to the testimony of the
plaintiff-appellee Concepcion Roque despite [its] gross
inconsistencies." 10
Acting on the appeal (docketed as A.C.-G.R. CV No. 02248), the
Intermediate Appellate Court, in a Decision 11 dated 31 July 1986,
reversed the judgment of the trial court and dismissed both the
petitioner's complaint and the respondents' appeal. A Motion for
Reconsideration of petitioner Concepcion Roque was denied.
The present Petition for Review was filed with this Court on 18
September 1986. In a resolution dated 27 July 1987, we gave due
course to the Petition and required the parties to submit their
respective Memoranda.
1. On the matter of dismissal of petitioner's complaint, the
Intermediate Appellate Court stated in its decision:
"While the action filed by the plaintiff is for partition, the
defendants, after denying plaintiff's assertion of co-ownership,
asserted that they are the exclusive and sole owners of the 3/4
portion of the parcel of land claimed by the plaintiff.
Upon the issue thus joined by the pleadings, it is obvious that the
case has become one of ownership of the disputed portion of the
subject lot.
It is well settled that an action for partition will not prosper as such
from the moment an alleged co-owner asserts an adverse title.
The action that may be brought by an aggrieved co-owner is
accion reivindicatoria or action for recovery of title and
possession (Jardin vs. Hallasgo, 117 SCRA 532, 536, 537; Paner
vs. Gaspar, 3 CA Rep. 155, 158)." (Emphasis supplied).
Viewed in the light of the facts of the present case, the
Intermediate Appellate Court's decision appears to imply that from
the moment respondents (defendants below) alleged absolute and
exclusive ownership of the whole of Lot No. 1549 in their Answer,
the trial court should have immediately ordered the dismissal of
the action for partition and petitioner (plaintiff below), if she so
desired, should have refiled the case but this time as an accion
reivindicatoria. Taking this analysis a step further should the
reivindicatory action prosper i.e., a co-ownership relation is
found to have existed between the parties a second action for
partition would still have to be instituted in order to effect division
of the property among the co-owners.
We do not agree with the above view. An action for partition
which is typically brought by a person claiming to be co-owner of
a specified property against a defendant or defendants whom the
plaintiff recognizes to be co-owners may be seen to present
simultaneously two principal issues. First, there is the issue of
whether the plaintiff is indeed a co-owner of the property sought to
be partitioned. Second, assuming that the plaintiff successfully
hurdles the first issue, there is the secondary issue of how the
property is to be divided between plaintiff and defendant(s) i.e.,
what portion should go to which co-owner.
Should the trial court find that the defendants do not dispute the
status of the plaintiff as co-owner, the court can forthwith proceed
to the actual partitioning of the property involved. In case the
defendants assert in their Answer exclusive title in themselves
adversely to the plaintiff, the court should not dismiss the plaintiff's
action for partition but, on the contrary and in the exercise of its
general jurisdiction, resolve the question of whether the plaintiff is
co-owner or not. Should the trial court find that the plaintiff was
unable to sustain his claimed status as co-owner, or that the
defendants are or have become the sole and exclusive owners of
the property involved, the court will necessarily have to dismiss the
action for partition. This result would be reached, not because the
wrong action was commenced by the plaintiff, but rather because
the plaintiff having been unable to show co-ownership rights in
himself, no basis exists for requiring the defendants to submit to
partition the property at stake. If, upon the other hand, the court
after trial should find the existence of co-ownership among the
parties litigant, the court may and should order the partition of the
property in the same action. Judgment for one or the other party
being on the merits, the losing party (respondents in this case)
may then appeal the same. In either case, however, it is quite
unnecessary to require the plaintiff to file another action, separate
and independent from that for partition originally instituted.
Functionally, an action for partition may be seen to be at once an
action for declaration of co-ownership and for segregation and
conveyance of a determinate portion of the property involved. This
is the import of our jurisprudence on the matter 12 and is sustained
by the public policy which abhors multiplicity of actions.
The question of prescription also needs to be addressed in this
connection. It is sometimes said that "the action for partition of the
thing owned in common (actio communi dividendo or actio familiae
erciscundae) does not prescribe." 13 This statement bears some
refinement. In the words of Article 494 of the Civil Code, "each co-
owner may demand at any time the partition of the thing owned in
common, insofar as his share is concerned." No matter how long
the co-ownership has lasted, a co-owner can always opt out of the
co-ownership, and provided the defendant co-owners or co-heirs
have theretofore expressly or impliedly recognized the co-
ownership, they cannot set up as a defense the prescription of the
action for partition. But if the defendants show that they had
previously asserted title in themselves adversely to the plaintiff and
for the requisite period of time, the plaintiffs right to require
recognition of his status as a co-owner will have been lost by
prescription and the court cannot issue an order requiring partition.
This is precisely what happened in Jardin v. Hallasgo, 117 SCRA
532 (1982), which the respondent appellate court cited to support
its position quoted above.
The case of Jardin involved, among others, two (2) parcels of land
which were inherited in 1920 by the brothers Catalino Jardin and
Galo Jardin together with their half-brother, Sixto Hallasgo. The
three (3) held these lands in co-ownership until Sixto later (the date
was not specified) repudiated the co-ownership and occupied and
possessed both parcels of land, claiming the same exclusively as
his own. Sometime in 1973, the heirs of Catalino and Galo
instituted an action for partition of the two (2) properties against
Sixto's heirs, who had refused to surrender any portion of the same
to the former. The trial court, assuming that prescription had
started to run in that case even before the Civil Code took effect,
held that the action for partition filed by the heirs of Catalino and
Galo had already prescribed. On appeal, this Court affirmed the
trial court on this point in the following terms:
"Article 494 of the Civil Code provides that 'no co-owner shall be
obliged to remain in the co-ownership' and that 'each co owner
may demand at any time the partition of the thing owned in
common, insofar as his share is concerned.' It also provides that
'no prescription shall run in favor of a co-owner or co-heir against
his co-owners or co-heirs so long as he expressly or impliedly
recognizes the co-ownership.'
While the action for the partition of the thing owned in common
(actio communi dividendo or actio familiae erciscundae) does not
prescribe, the co-ownership does not last forever since it may be
repudiated by a co-owner [i.e., Sixto]. In such a case, the action
for partition does not lie. What may be brought by the aggrieved
co-owner [i.e., the heirs of Catalino and Galo] is an accion
reivindicatoria or action for recovery of title and possession. That
action may be barred by prescription.
'If the co-heir or co-owner having possession of the hereditary or
community property, holds the same in his own name, that is,
under claim of exclusive ownership, he may acquire the property
by prescription if his possession meets all the other requirements
of the law, and after the expiration of the prescriptive period, his
co-heir or co-owner may lose their right to demand partition, and
their action may then be held to have prescribed (De los Santos
vs. Santa Teresa, 44 Phil. 811).'
xxx xxx xxx" (Emphasis supplied).
In the light of the foregoing discussion, it will be seen that the
underscored portion of the Court's opinion in Jardin is
actually obiter. For there, the Court simply held the action for
partition by the heirs of Catalino and Galo had prescribed and did
not require such heirs to start a new action (which would have
been quite pointless); on the other hand, the Court remanded the
case to the lower court for further proceedings in respect of the
recovery of a 350 square meter lot which the evidence showed
was owned by the plaintiffs but wrongfully included by Sixto in the
cadastral survey of his share of the adjoining lot.
In Jardin, the claim of co-ownership asserted by the heirs of
Catalino and Galo was effectively refuted by the heirs of Sixto, who
not only claimed for themselves absolute and exclusive ownership
of the disputed properties but were also in actual and adverse
possession thereof for a substantial length of time. The Court
found, further, that the action for partition initially available to the
heirs of Catalino and Galo had, as a result of the preceding
circumstance, already prescribed.
An entirely different situation, however, obtains in the case at bar.
First of all, petitioner Concepcion Roque the co-owner seeking
partition has been and is presently in open and continuous
possession of a three-fourths (3/4) portion of the property owned
in common. The Court notes in this respect the finding of the trial
court that petitioner, following execution of the "Bilihan Lubos at
Patuluyan" on 27 November 1961, had been in "continuous
occupancy of the 3/4 portion of the lot . . . up to the present, and
whereon plaintiffs house and that of her son are
erected." 14 Respondents do not dispute this finding of fact,
although they would claim that petitioner's possession is merely
tolerated by them. Second, prior to filing in 1977 of the Complaint
in Civil Case No. 5236-M, neither of the parties involved had
asserted or manifested a claim of absolute and exclusive
ownership over the whole of Lot No. 1549 adverse to that of any
of the other co-owners: in other words, co-ownership of the
property had continued to be recognized by all the owners.
Consequently, the action for partition could not have and, as a
matter of fact, had not yet prescribed at the time of institution by
Concepcion of the action below.
2. Coming now to the matter regarding dismissal of the
respondents' appeal, the Intermediate Appellate Court held that
inasmuch as the attack on the validity of the "Bilihan Lubos at
Patuluyan" was predicated on fraud and no action for annulment
of the document had been brought by respondents within the four
(4) year prescriptive period provided under Article 1391 of the Civil
Code, such action had already prescribed.
We find it unnecessary to deal here with the issue of prescription
discussed by the respondent court in its assailed decision. The
facts on record clearly show that petitioner Concepcion Roque had
been in actual, open and continuous possession of a three-fourths
(3/4) portion of Lot No. 1549 ever since execution of the "Bilihan
Lubos at Patuluyan" in November of 1961. The Court notes that it
was only in their Answer with Compulsory Counterclaim filed with
the trial court in December of 1977 more than sixteen (16) years
later that respondents first questioned the genuineness and
authenticity of the "Bilihan Lubos at Patuluyan." Not once during
those sixteen (16) years did respondents contest petitioner's
occupation of a three-fourths (3/4) portion of Lot No. 1549.
Furthermore, if indeed it is true that respondents, as they claim,
are the absolute owners of the whole of Lot No. 1549, it is most
unusual that respondents would have allowed or tolerated such
prolonged occupation by petitioner of a major portion (3/4) of the
land while they, upon the other hand, contented themselves with
occupation of only a fourth thereof. This latter circumstance,
coupled with the passage of a very substantial length of time
during which petitioner all the while remained undisturbed and
uninterrupted in her occupation and possession, places
respondents here in laches: respondents may no longer dispute
the existence of the co-ownership between petitioner and
themselves nor the validity of petitioner's claim of a three-fourths
(3/4) interest in Lot No. 1549, as they are deemed, by their
unreasonably long inaction, to have acquiesced in the co-
ownership. 15 In this respect, we affirm the decision of the
respondent appellate court presently under review.
WHEREFORE, the Decision of the Intermediate Appellate Court
dated 31 July 1986 in A.C.-G.R. CV No. 02248 is SET ASIDE with
respect to that portion which orders the dismissal of the Complaint
in Civil Case No. 5236-M, but is AFFIRMED with respect to that
portion which orders the dismissal of the respondents' appeal in
A.C. G.R. CV No. 02248. The Decision of Branch 9 of the
Regional Trial Court of Malolos dated 27 June 1983 in Civil Case
No. 5236-M is hereby REINSTATED. No pronouncement as to
costs.
SO ORDERED.
||| (Roque v. Intermediate Appellate Court, G.R. No. 75886,
[August 30, 1988])
Delima v. Court of Appeals 201 SCRA 641
FIRST DIVISION
[G.R. No. 46296. September 24, 1991.]
EPITACIO DELIMA, PACIANO DELIMA, FIDEL DELIMA,
VIRGILIO DELIMA, GALILEO DELIMA, JR., BIBIANO BACUS,
OLIMPIO BACUS and PURIFICACION
BACUS,petitioners, vs. HON. COURT OF APPEALS, GELILEO
DELIMA (deceased), substituted by his legal heirs, namely;
FLAVIANA VDA. DE DELIMA, LILY D. ARIAS, HELEN NIADAS,
ANTONIO DELIMA, DIONISIO DELIMA, IRENEA DELIMA,
ESTER DELIMA AND FELY DELIMA, respondents.
Gabriel J. Canete for petitioners.
Emilio Lumontad, Jr. for private respondents.
DECISION
MEDIALDEA, J p:
This is a petition for review on certiorari of the decision of the Court
of Appeals reversing the trial court's judgment which declared as
null and void the certificate of title in the name of respondents'
predecessor and which ordered the partition of the disputed lot
among the parties as co-owners.
The antecedent facts of the case as found both by the respondent
appellate court and by the trial court are as follows:
During his lifetime, Lino Delima acquired Lot No. 7758 of the
Talisay-Minglanilla Friar Lands Estate in Cebu by sale on
installments from the government. Lino Delima later died in 1921
leaving as his only heirs three brothers and a sister namely: Eulalio
Delima, Juanita Delima, Galileo Delima and Vicente Delima. After
his death, TCT No. 2744 of the property in question was issued on
August 3, 1953 in the name of "The Legal Heirs of Lino Delima,
deceased, represented by Galileo Delima."
On September 22, 1953, Galileo Delima, now substituted by
respondents, executed an affidavit of "Extra-judicial Declaration of
Heirs." Based on this affidavit, TCT No. 2744 was cancelled and
TCT No. 3009 was issued on February 4, 1954 in the name of
Galileo Delima alone to the exclusion of the other heirs.
Galileo Delima declared the lot in his name for taxation purposes
and paid the taxes thereon from 1954 to 1965.
On February 29, 1968, petitioners, who are the surviving heirs of
Eulalio and Juanita Delima, filed With the Court of First Instance
of Cebu (now Regional Trial Court) an action for reconveyance
and/or partition of property and for the annulment of TCT No. 3009
with damages against their uncles Galileo Delima and Vicente
Delima,. Vicente Delima was joined as party defendant by the
petitioners for his refusal to join the latter in their action.
On January 16, 1970, the trial court rendered a decision in favor
of petitioners, the dispositive portion of which states: cdphil
"IN VIEW OF THE FOREGOING CONSIDERATIONS, the
following are the declared owners of Lot No. 7758 of the Talisay-
Minglanilla Friar Lands Estate presently covered by Transfer
Certificate of Title No. 3009, each sharing a pro-indiviso share of
one-fourth;
1) Vicente Delima (one-fourth)
2) Heirs of Juanita Delima, namely: Bibiano Bacus, Olimpio Bacus
and Purificacion Bacus (one-fourth),
3) Heirs of Eulalio Delima, namely Epitacio, Paciano, Fidel, Virgilio
and Galileo Jr., all surnamed Delima (one-fourth); and
4) The Heirs of Galileo Delima, namely Flaviana Vda. de Delima,
Lily D. Arias, Helen Niadas, and Dionisio, Antonio, Eotu, Irenea,
and Fely, all surnamed Delima (one-fourth).
"Transfer Certificate of Title No. 3009 is declared null and void and
the Register of Deeds of Cebu is ordered to cancel the same and
issue in lieu thereof another title with the above heirs as pro-
indiviso owners.
"After the payment of taxes paid by Galileo Delima since 1958, the
heirs of Galileo Delima are ordered to turn over to the other heirs
their respective shares of the fruits of the lot in question computed
at P170.00 per year up to the present time with legal (interest).
"Within sixty (60) days from receipt of this decision the parties are
ordered to petition the lot in question and the defendants are
directed to immediately turn over possession of the shares here
awarded to the respective heirs.
"Defendants are condemned to pay the costs of the suit.
"The counterclaim is dismissed.
"SO ORDERED." (pp. 54-55, Rollo).
Not satisfied with the decision, respondents appealed to the Court
of Appeals. On May 19, 1977, respondent appellate court reversed
the trial court's decision and upheld the claim of Galileo Delima
that all the other brothers and sister of Lino Delima, namely
Eulalio, Juanita and Vicente, had already relinquished and waived
their rights to the property in his favor, considering that he (Galileo
Delima) alone paid the remaining balance of the purchase price of
the lot and the realty taxes thereon (p. 26, Rollo).
Hence, this petition was filed with the petitioners alleging that the
Court of Appeals erred:
"1) In not holding that the right of a co-heir to demand partition of
inheritance is imprescriptible. If it does, the defenses of
prescription and laches have already been waived.
"2) In disregarding the evidence of the petitioners." (p. 13, Rollo).
The issue to be resolved in the instant case is whether or not
petitioners' action for partition is already barred by the statutory
period provided by law which shall enable Galileo Delima to
perfect his claim of ownership by acquisitive prescription to the
exclusion of petitioners from their shares in the disputed
property. LLpr
Article 494 of the Civil Code expressly provides:
"Art. 494. No co-owner shall be obliged to remain in the co-
ownership. Each co-owner may demand at any time the partition
of the thing owned in common, insofar as his share is concerned.
"Nevertheless, an agreement to keep the thing undivided for a
certain period of time, not exceeding ten years, shall be valid. This
term may be extended by a new agreement.
"A donor or testator may prohibit partition for a period which shall
not exceed twenty years.
"Neither shall there be any partition when it is prohibited by law.
"No prescription shall run in favor of a co-owner or co-heir against
his co-owners or co-heirs so long as he expressly or impliedly
recognizes the co-ownership."
As a rule, possession by a co-owner will not be presumed to be
adverse to the others, but will be held to benefit all. It is understood
that the co-owner or co-heir who is in possession of an
inheritance pro-indiviso for himself and in representation of his co-
owners or co-heirs, if, as such owner, he administers or takes care
of the rest thereof with the obligation of delivering it to his co-
owners or co-heirs, is under the same situation as a depository, a
lessee or a trustee (Bargayo v. Camumot, 40 Phil. 857; Segura v.
Segura, No. L-29320, September 19, 1988, 165 SCRA 368). Thus,
an action to compel partition may be filed at any time by any of the
co-owners against the actual possessor. In other words, no
prescription shall run in favor of a co-owner against his co-owners
or co-heirs so long as he expressly or impliedly recognizes the co-
ownership (Del Blanco v. Intermediate Appellate Court, No. 72694,
December 1 , 1987, 156 SCRA 55).
However, from the moment one of the co-owners claims that he is
the absolute and exclusive owner of the properties and denies the
others any share therein, the question involved is no longer one of
partition but of ownership (De Castro v. Echarri, 20 Phil.
23; Bargayo v. Camumot, supra; De los Santos v. Santa Teresa,
44 Phil. 811). In such case, the imprescriptibility of the action for
partition can no longer be invoked or applied when one of the co-
owners has adversely possessed the property as exclusive owner
for a period sufficient to vest ownership by prescription.
It is settled that possession by a co-owner or co-heir is that of a
trustee. In order that such possession is considered adverse to
the cestui que trust amounting to a repudiation of the co-
ownership, the following elements must concur: 1) that the trustee
has performed unequivocal acts amounting to an ouster of
the cestui que trust; 2) that such positive acts of repudiation had
been made known to the cestui que trust; and 3) that the evidence
thereon should be clear and conclusive (Valdez v. Olorga, No. L-
22571, May 25, 1973, 51 SCRA 71; Pangan v. Court of Appeals,
No. L-39299, October 18, 1988, 166 SCRA 375).
We have held that when a co-owner of the property in question
executed a deed of partition and on the strength thereof obtained
the cancellation of the title in the name of their predecessor and
the issuance of a new one wherein he appears as the new owner
of the property, thereby in effect denying or repudiating the
ownership of the other co-owners over their shares, the statute of
limitations started to run for the purposes of the action instituted
by the latter seeking a declaration of the existence of the co-
ownership and of their rights thereunder (Castillo v. Court of
Appeals, No. L-18046, March 31, 1964, 10 SCRA 549). Since an
action for reconveyance of land based on implied or constructive
trust prescribes after ten (10) years, it is from the date of the
issuance of such title that the effective assertion of adverse title for
purposes of the statute of limitations is counted (Jaramil v. Court
of Appeals, No. L-31858, August 31, 1977, 78 SCRA 420). LLphil
Evidence shows that TCT No. 2744 in the name of the legal heirs
of Lino Delima, represented by Galileo Delima, was cancelled by
virtue of an affidavit executed by Galileo Delima and that on
February 4, 1954, Galileo Delima obtained the issuance of a new
title in his name numbered TCT No. 3009 to the exclusion of his
co-heirs. The issuance of this new title constituted an open and
clear repudiation of the trust or co-ownership, and the lapse of ten
(10) years of adverse possession by Galileo Delima from February
4, 1954 was sufficient to vest title in him by prescription. As the
certificate of title was notice to the whole world of his exclusive title
to the land, such rejection was binding on the other heirs and
started as against them the period of prescription. Hence, when
petitioners filed their action for reconveyance and/or to compel
partition on February 29, 1963, such action was already barred by
prescription. Whatever claims the other co-heirs could have validly
asserted before can no longer be invoked by them at this time.
ACCORDINGLY, the petition is hereby DENIED and the assailed
decision of the Court of Appeals dated May 19, 1977 is
AFFIRMED.
SO ORDERED.
||| (Delima v. Court of Appeals, G.R. No. 46296, [September 24,
1991], 278 PHIL 651-658)
Aguilar v. Court of Appeals 227 SCRA 472
Tomas Claudio Memorial College, Inc. v. Court of Appeals 316
SCRA 502
SECOND DIVISION
[G.R. No. 124262. October 12, 1999.]
TOMAS CLAUDIO MEMORIAL COLLEGE, INC., petitioner, vs.
COURT OF APPEALS, HON. ALEJANDRO S. MARQUEZ,
CRISANTA DE CASTRO, ELPIDIA DE CASTRO, EFRINA DE
CASTRO, IRENEO DE CASTRO and ARTEMIO DE CASTRO
ADRIANO, respondents.
Aladdin F. Trinidad for petitioner.
Felix E. Mendiola for private respondents.
SYNOPSIS
Private respondents filed an action for Partition before the RTC of
Morong, Rizal, alleging that the land they inherited from their father
was sold by their brother Mariano to herein petitioner without their
knowledge and consent. Private respondents contended that the
sale affected only the undivided share of Mariano. Petitioner filed
a motion to dismiss for lack of jurisdiction and prescription.
Allegedly, the RTC had no jurisdiction to try the case as the causes
of action therein had already been decided with finality by the
Supreme Court in another case. When the RTC still took
cognizance of the case and the Court of Appeals allowed the
same, this special civil action of certiorari was availed of.
No grave abuse of discretion was committed by the public
respondent. Jurisdiction over the subject matter of a case is
conferred by law and is determined by the allegations of the
complaint irrespective of whether plaintiff is entitled to the claims
asserted therein. Acquiring jurisdiction over the subject matter of
a case does not necessarily mean that the lower court meant to
reverse the decision of the Supreme Court in the earlier case. And,
when the court acts within its jurisdiction, any alleged errors
committed in the exercise thereof will amount to nothing more than
errors of judgment which are reversible by timely appeal and not
by a special civil action of certiorari. THaAEC
SYLLABUS
1. REMEDIAL LAW; APPEAL AND CERTIORARI, WHEN
PROPER. As long as a court acts within its jurisdiction, any
alleged errors committed in the exercise thereof will amount to
nothing more than errors of judgment which are revisable by timely
appeal and not by a special civil action of certiorari;
because certiorari is not available to correct errors of procedure or
mistakes in the judge's findings and conclusions. And for a petition
for certiorari to be granted, it must be shown that the respondent
court committed grave abuse of discretion equivalent to lack or
excess of jurisdiction. By grave abuse of discretion is meant such
capricious and whimsical exercise of judgment as is equivalent to
lack of jurisdiction, and mere abuse of discretion is not enough
it must be grave.
2. ID.; JURISDICTION OVER THE SUBJECT MATTER OF A
CASE; DISCUSSED. Jurisdiction over the subject matter of a
case is conferred by law and is determined by the allegations of
the complaint irrespective of whether the plaintiff is entitled to all
or some of the claims asserted therein. Acquiring jurisdiction over
the subject matter of a case does not necessarily mean that the
lower court meant to reverse the decision of the Supreme Court in
the land registration case mentioned by the petitioner. Moreover,
settled is the rule that the jurisdiction of the court over the subject
matter is determined by the allegations of the complaint, hence the
court's jurisdiction cannot be made to depend upon defenses set
up in the answer or in a motion to dismiss. This has to be so, for
were the principle otherwise, the ends of justice would be
frustrated by making the sufficiency of this kind of action
dependent upon the defendant in all cases.
3. ID.; PARTY WHO INVOKES THE JURISDICTION OF A
COURT CANNOT THEREAFTER CHALLENGE THE SAME. It
is now too late for petitioner to question the jurisdiction of the Court
of Appeals because it was petitioner who elevated the instant
controversy to the Court of Appeals via a petition for certiorari. In
effect, petitioner submitted itself to the jurisdiction of the Court of
Appeals by seeking affirmative relief therefrom. If a party invokes
the jurisdiction of a court, he cannot thereafter challenge that
court's jurisdiction in the same case. To do otherwise would
amount to speculating on the fortune of litigation, which is against
the policy of the Court.
4. CIVIL LAW; PROPERTY; CO-OWNERSHIP; ACTION FOR
PARTITION IS IMPRESCRIPTIBLE. On the issue of
prescription, if a co-owner sells the whole property as his, the sale
will affect only of his own share and not those of the other co-
owners who did not consent to the sale. Under Article 493 of the
Civil Code, the transferee becomes a co-owner and gets only what
corresponds to his grantor's share in the partition of the property
owned in common. Hence, the sale is not null and void and the
proper action is the division or partition of the entire property if it
continued to remain in the possession of the co-owners who
possessed and administered it. Such partition should result in
segregating the portion belonging to the seller and its delivery to
the buyer. Pursuant to Article 494 of the Civil Code, "no co-owner
shall be obliged to remain in the co-ownership. Such co-owner
may demand at anytime the partition of the thing owned in
common, insofar as his share is concerned." In Budlong vs.
Bondoc, this Court has interpreted said provision of law to mean
that the action for partition is imprescriptible. It cannot be barred
by prescription. For Article 494 of the Civil Code explicitly declares:
"No prescription shall lie in favor of a co-owner or co-heirs as long
as he expressly or impliedly recognizes the co-
ownership." EcIaTA
DECISION
QUISUMBING, J p:
This special civil action for certiorari seeks to set aside the
Decision of the Court Appeals dated August 14, 1995, in CA-G.R.
SP No. 36349, and its Resolution dated March 15, 1996, which
denied petitioner's motion for reconsideration. cdrep
On December 13, 1993, private respondents filed an action for
Partition before the Regional Trial Court of Morong, Rizal. They
alleged that their predecessor-in-interest, Juan De Castro, died
intestate in 1993 and they are his only surviving and legitimate
heirs. They also alleged that their father owned a parcel of land
designated as Lot No. 3010 located at Barrio San Juan, Morong,
Rizal, with an area of two thousand two hundred sixty nine (2,269)
square meters more or less. They further claim that in 1979,
without their knowledge and consent, said lot was sold by their
brother Mariano to petitioner. The sale was made possible when
Mariano represented himself as the sole heir to the property. It is
the contention of private respondents that the sale made by
Mariano affected only his undivided share to the lot in question but
not the shares of the other co-owners equivalent to four fifths (4/5)
of the property.
Petitioner filed a motion to dismiss contending, as its special
defense, lack of jurisdiction and prescription and/or laches. The
trial court, after hearing the motion, dismissed the complaint in an
Order dated August 18, 1984. On motion for reconsideration, the
trial court, in an Order dated October 4, 1994, reconsidered the
dismissal of the complaint and set aside its previous order.
Petitioner filed its own motion for reconsideration but it was denied
in an Order dated January 5, 1995.
Aggrieved, petitioner filed with the Court of Appeals a special civil
action for certiorari anchored on the following grounds: a) the RTC
has no jurisdiction to try and take cognizance of the case as the
causes of actions have been decided with finality by the Supreme
Court, and b) the RTC acted with grave abuse of discretion and
authority in taking cognizance of the case.
After the parties filed their respective pleadings, the Court of
Appeals, finding no grave abuse of discretion committed by the
lower court, dismissed the petition in a Decision dated August 14,
1995. Petitioner filed a timely motion for reconsideration but it was
denied in a Resolution dated March 15, 1996. Hence this
petition. cdasia
Petitioner submits the following grounds to support the granting of
the writ of certiorari in the present case:
FIRST GROUND
THE HON. COURT OF APPEALS AND THE REGIONAL TRIAL
COURT (BR. 79) HAD NO JURISDICTION TO TRY SUBJECT
CASE (SP. PROC. NO. 118-M). THE "CAUSES OF ACTION"
HEREIN HAVE BEEN FINALLY DECIDED BY THE HON. COURT
OF FIRST INSTANCE OF RIZAL (BR. 31) MAKATI, METRO
MANILA, AND SUSTAINED IN A FINAL DECISION BY THE HON.
SUPREME COURT.
SECOND GROUND
THE HON. COURT OF APPEALS GRAVELY ABUSED ITS
DISCRETION AND AUTHORITY WHEN IT SUSTAINED THE
ORDERS OF THE HON. REGIONAL TRIAL COURT (BR. 79)
DATED OCTOBER 4, 1994, AND THE ORDER DATED
JANUARY 5, 1995, WHEN SAID RTC (BR. 79) INSISTED IN
TRYING THIS CASE AGAINST TCMC WHEN IT HAS RULED
ALREADY IN A FINAL ORDER THAT PETITIONER IS NOT A
"REAL PARTY" IN INTEREST BY THE HON. REGIONAL TRIAL
COURT (BR. 79) IN CIVIL CASE NO. 170, ENTITLED ELPIDIA A.
DE CASTRO, ET. AL. vs. TOMAS CLAUDIO MEMORIAL
COLLEGE, ET. AL., WHICH CASE INVOLVED THE SAME
RELIEF, SAME SUBJECT MATTER AND THE SAME PARTIES.
THIRD GROUND
THE HON. COURT OF APPEALS GRAVELY ABUSED ITS
DISCRETION AND AUTHORITY WHEN IT CAPRICIOUSLY AND
WHIMSICALLY DISREGARDED THE EXISTENCE OF RES
JUDICATA IN THIS CASE.
The pivotal issues to be resolved in this case are: whether or not
the Regional Trial Court and/or the Court of Appeals had
jurisdiction over the case, and if so, whether or not the Court of
Appeals committed grave abuse of discretion in affirming the
decision of the Regional Trial Court.
In assailing the Orders of the appellate court, petitioner invokes
Rule 65 of the Rules of Court as its mode in obtaining a reversal
of the assailed Decision and Resolution. Before we dwell on the
merits of this petition, it is worth noting, that for a petition
for certiorari to be granted, it must be shown that the respondent
court committed grave abuse of discretion equivalent to lack or
excess of jurisdiction and not mere errors of judgment,
for certiorari is not a remedy for errors of judgment, which are
correctible by appeal. 1 By grave abuse of discretion is meant
such capricious and whimsical exercise of judgment as is
equivalent to lack of jurisdiction, and mere abuse of discretion is
not enough it must be grave. 2
In the case at hand, there is no showing of grave abuse of
discretion committed by the public respondent. As correctly
pointed out by the trial court, when it took cognizance of the action
for partition filed by the private respondents, it acquired jurisdiction
over the subject matter of the case. 3 Jurisdiction over the subject
matter of a case is conferred by law and is determined by the
allegations of the complaint irrespective of whether the plaintiff is
entitled to all or some of the claims asserted therein. 4 Acquiring
jurisdiction over the subject matter of a case does not necessarily
mean that the lower court meant to reverse the decision of the
Supreme Court in the land registration case mentioned by the
petitioner. Cdpr
Moreover, settled is the rule that the jurisdiction of the court over
the subject matter is determined by the allegations of the
complaint, hence the court's jurisdiction cannot be made to
depend upon defenses set up in the answer or in a motion to
dismiss. 5 This has to be so, for were the principle otherwise, the
ends of justice would be frustrated by making the sufficiency of this
kind of action dependent upon the defendant in all cases.
Worth stressing, as long as a court acts within its jurisdiction any
alleged errors committed in the exercise thereof will amount to
nothing more than errors of judgment which are revisable by timely
appeal and not by a special civil action of certiorari. 6 Based on
the foregoing, even assuming for the sake of argument that the
appellate court erred in affirming the decision of the trial court,
which earlier denied petitioner's motion to dismiss, such actuation
on the part of the appellate court cannot be considered as grave
abuse of discretion, hence not correctible by certiorari,
because certiorari is not available to correct errors of procedure or
mistakes in the judge's findings and conclusions.
In addition, it is now too late for petitioner to question the
jurisdiction of the Court of Appeals. It was petitioner who elevated
the instant controversy to the Court of Appeals via a petition
for certiorari. In effect, petitioner submitted itself to the jurisdiction
of the Court of Appeals by seeking affirmative relief therefrom. If a
party invokes the jurisdiction of a court, he cannot thereafter
challenge that court's jurisdiction in the same case. 7 To do
otherwise would amount to speculating on the fortune of litigation,
which is against the policy of the Court.
On the issue of prescription, we have ruled that even if a co-owner
sells the whole property as his, the sale will affect only his own
share but not those of the other co-owners who did not consent to
the sale. 8 Under Article 493 of the Civil Code, the sale or other
disposition affects only the seller's share pro indiviso, and the
transferee gets only what corresponds to his grantor's share in the
partition of the property owned in common. Since a co-owner is
entitled to sell his undivided share, a sale of the entire property by
one co-owner without the consent of the other co-owners is not
null and void. However, only the rights of the co-owner/seller are
transferred, thereby making the buyer a co-owner of the property.
The proper action in a case like this, is not for the nullification of
the sale, or for the recovery of possession of the property owned
in common from the third person, but for division or partition of the
entire property if it continued to remain in the possession of the co-
owners who possessed and administered it. 9 Such partition
should result in segregating the portion belonging to the seller and
its delivery to the buyer. cdrep
In the light of the foregoing, petitioner's defense of prescription
against an action for partition is a vain proposition. Pursuant
to Article 494 of the Civil Code, "no co-owner shall be obliged to
remain in the co-ownership. Such co-owner may demand at
anytime the partition of the thing owned in common, insofar as his
share is concerned." In Budlong vs. Bondoc, 10 this Court has
interpreted said provision of law to mean that the action for
partition is imprescriptible. It cannot be barred by prescription. For
Article 494 of the Civil Code explicitly declares: "No prescription
shall lie in favor of a co-owner or co-heirs as long as he expressly
or impliedly recognizes the co-ownership."
WHEREFORE, the instant petition is DENIED. The assailed
decision of the Court of Appeals is hereby AFFIRMED. Costs
against petitioners.
SO ORDERED.
||| (Tomas Claudio Memorial College, Inc. v. Court of Appeals,
G.R. No. 124262, [October 12, 1999], 374 PHIL 859-866)
Robles v. Court of Appeals 328 SCRA 97
THIRD DIVISION
[G.R. No. 123509. March 14, 2000.]
LUCIO ROBLES, EMETERIA ROBLES, ALUDIA ROBLES and
EMILIO ROBLES, petitioners, vs. COURT OF APPEALS,
Spouses VIRGILIO SANTOS and BABY RUTH CRUZ, RURAL
BANK OF CARDONA, Inc., HILARIO ROBLES, ALBERTO
PALAD JR. in his capacity as Director of Lands, and JOSE
MAULEON in his capacity as District Land Officer of the
Bureau of Lands, respondents.
Remigio D. Saladero, Jr. for petitioners.
The Solicitor General for public respondent.
Mariano Cervo for private respondents.
SYNOPSIS
Petitioners inherited the disputed property from their father, Silvino
Robles, whose predecessor has been occupying the same since
1916. Allegedly, the payment of taxes thereof was entrusted to
their co-heir, respondent Hilario. In 1962, however, the tax
declaration of the land was transferred to Exequiel Bellena, father-
in-law of Hilario; later, transferred to Antipolo Rural Bank, and
then, to the name of Hilario and wife Andrea, who mortgaged the
same to the Cardona Rural Bank. The property was eventually
foreclosed, transferred to the Bank's name and sold to respondent
spouses Santos. Petitioners, who discovered the mortgage,
attempted but failed to redeem the property while respondent
spouses Santos took possession of the same and were able to
secure Free Patent in their names.
Evidently, there was no valid transfer of the disputed property from
the heirs of Silvino to Exequiel in 1962. Thus, the property still
belong to the heirs of the late Silvino and the mortgage executed
by Hilario to the Rural Bank of Cardona was made in his capacity
as mere co-owner thereof. The Rural Bank of Cardona, Inc. is
considered a mortgagee in bad faith as it did not fully ascertain the
title of Hilario and thus failed to observe due diligence. Hence, as
what was mortgaged was only the undivided share of Hilario,
respondent spouses Santos can only acquire the same. The free
patent granted to the spouses Santos was void as the disputed
land has already become a private land as petitioners are claiming
ownership thereof based on their possession of the land in the
concept of owners for more than 30 years. It has become beyond
the authority of the Director of Lands.
SYLLABUS
1. CIVIL LAW; PROPERTY; OWNERSHIP; QUIETING OF TITLE,
DISCUSSED. Based on Art. 476 of the Civil Code, an action to
quiet title is a common-law remedy for the removal of any cloud or
doubt or uncertainty on the title to real property. It is essential for
the plaintiff or complainant to have a legal or an equitable title to
or interest in the real property which is the subject matter of the
action. Also, the deed, claim, encumbrance or proceeding that is
being alleged as a cloud on plaintiff's title must be shown to be in
fact invalid or inoperative despite its prima facie appearance of
validity or legal efficacy.
2. ID.; ID.; ID.; CO-OWNERSHIP; PRESCRIPTION IN FAVOR OF
A CO-OWNER. It is a fundamental principle that a co-owner
cannot acquire by prescription the share of the other co-
owners, absent any clear repudiation of the co-ownership. In order
that the title may prescribe in favor of a co-owner, the following
requisites must concur: (1) the co-owner has performed
unequivocal acts of repudiation amounting to an ouster of the other
co-owners; (2) such positive acts of repudiation have been made
known to the other co-owners; and (3) the evidence thereof is clear
and convincing.
3. ID.; ID.; ID.; ID.; NO REPUDIATION THEREOF IN CASE AT
BAR. In the present case, Hilario did not have possession of
the subject property; neither did he exclude the petitioners from
the use and the enjoyment thereof, as they had indisputably
shared in its fruits. Likewise, his act of entering into a mortgage
contract with the bank cannot be construed to be a repudiation of
the co-ownership. As absolute owner of his undivided interest in
the land, he had the right to alienate his share, as he in fact did.
Neither should his payment of land taxes in his name, as agreed
upon by the co-owners, be construed as a repudiation of the co-
ownership. The assertion that the declaration of ownership was
tantamount to repudiation was belied by the continued occupation
and possession of the disputed property by the petitioners
as owners.
4. ID.; SPECIAL CONTRACTS; REAL ESTATE MORTGAGE;
WHEN MORTGAGOR MERE CO-OWNER OF THE PROPERTY
MORTGAGED. In a real estate mortgage contract, it is essential
that the mortgagor be the absolute owner of the property to be
mortgaged; otherwise, the mortgage is void. In the present case,
it is apparent that Hilario Robles was not the absolute owner of the
entire subject property; and that the Rural Bank of Cardona, Inc.,
in not fully ascertaining his title thereto, failed to observe due
diligence and, as such, was a mortgagee in bad faith. In Rural
Bank of Compostela v. Court of Appeals, the Court invalidated a
real estate mortgage after a finding that the bank had not been in
good faith. The Court explained: "The rule that persons dealing
with registered lands can rely solely on the certificate of title does
not apply to banks." At any rate, considering that Hilario can be
deemed to have mortgaged the disputed property not as absolute
owner but only as a co-owner, he can be adjudged to have
disposed to the Rural Bank of Cardona, Inc. only his undivided
share therein. The said bank, being the immediate predecessor of
the Santos spouses, was a mortgagee in bad faith. Thus, justice
and equity mandate the entitlement of the Santos spouses, who
merely stepped into the shoes of the bank, only to what legally
pertains to the latter Hilario's share in the disputed property.
5. ID.; LAND TITLES; FREE PATENT; NOT VALID WHEN
ISSUED AGAINST A PRIVATE LAND. In the light of their open,
continuous, exclusive and notorious possession and occupation of
the land, petitioners are "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 was "segregated
from the public domain." Accordingly, the director of lands had no
authority to issue a free patent thereto in favor of another person.
Verily, jurisprudence holds that a free patent covering private land
is null and void. It is apparent that petitioners are claiming
ownership of the disputed property on the basis of their possession
thereof in the concept of owners openly, peacefully, publicly,
continuously and adversely since 1916. Because they and their
predecessors-in-interest have occupied, possessed and cultivated
it as owners for more than thirty years, only one conclusion can be
drawn it has become private land and is therefore beyond the
authority of the director of land.
DECISION
PANGANIBAN, J p:
To be entitled to the remedy of quieting of title, petitioners must
show that they have title to the real property at issue, and that
some deed or proceeding beclouds its validity or efficacy. Buyers
of unregistered real property, especially banks, must exert due
diligence in ascertaining the titles of mortgagors and sellers, lest
some innocent parties be prejudiced. Failure to observe such
diligence may amount to bad faith and may result in the nullity of
the mortgage, as well as of the subsequent foreclosure and/or
auction sale. Unless the co-ownership is clearly repudiated, a co-
owner cannot, by prescription, acquire title to the shares of the
other co-owners. cdrep
The Case
Before us is a Petition for Review under Rule 45, assailing the
June 15, 1995 Decision and the January 15, 1996 Resolution of
the Court of Appeals 1 (CA) in CA-GR CV No. 34213. 2 In its
Decision, the CA ruled: 3
"WHEREFORE, the trial court's June 17, 1991 decision is
REVERSED and SET ASIDE, and in lieu thereof a new one is
hereby entered ordering the dismissal of the plaintiffs-appellees[']
second amended complaint."
Earlier, the trial court had disposed as follows:
"WHEREFORE, premises considered, judgment is hereby
rendered as follows:
1. Declaring free patent Title No. IV-1-010021 issued by the
Bureau of Lands as null and void;
2. Ordering the defendant spouses Vergel Santos and Ruth
Santos to deliver the property subject of this case to the plaintiff;
and
3. Declaring the heirs of Silvino Robles as the absolute owner of
the land in controversy."
The January 15, 1996 CA Resolution denied petitioners' Motion for
Reconsideration. cdphil
The Facts
The present Petition is rooted in a case for quieting of title before
the Regional Trial Court of Morong, Rizal, filed on March 14,
1988, 4 by Petitioners Lucio Robles, Emeteria Robles, Aludia
Robles and Emilio Robles. The facts were narrated by the trial
court in this wise:
"There seems to be no dispute that Leon Robles primitively owned
the land situated in Kay Taga, Lagundi, Morong, Rizal with an area
of 9,985 square meters. He occupied the same openly and
adversely. He also declared the same in his name for taxation
purposes as early as 1916 covered by Tax Declaration No. 17865
(Exh. "I") and paid the corresponding taxes thereon (Exh. "B").
When Leon Robles died, his son Silvino Robles inherited the land,
who took possession of the land, declared it in his name for
taxation purposes and paid the taxes thereon.
"Upon the death of Silvino Robles in 1942, his widow Maria de la
Cruz and his children inherited the property. They took adverse
possession of said property and paid taxes thereon. The task of
cultivat[ing] the land was assigned to plaintiff Lucio Robles who
planted trees and other crops. He also built a nipa hut on the land.
The plaintiffs entrusted the payment of the land taxes to their co-
heir and half-brother, Hilario Robles.
"In 1962, for unknown reasons, the tax declaration of the parcel of
land in the name of Silvino Robles was canceled and transferred
to one Exequiel Ballena (Exh. "19"), father of Andrea Robles who
is the wife of defendant Hilario Robles. Thereafter, Exequiel
Ballena secured a loan from the Antipolo Rural Bank, using the tax
declaration as security. Somehow, the tax declaration was
transferred [to] the name of Antipolo Rural Bank (Exh. "17") and
later on, was transferred [to] the name of defendant Hilario Robles
and his wife (Exh. "16").
"In 1996, Andrea Robles secured a loan from the Cardona Rural
Bank, Inc., using the tax declaration as security. Andrea Robles
testified without contradiction that somebody else, not her
husband Hilario Robles, signed the loan papers because Hilario
Robles was working in Marinduque at that time as a carpenter.
"For failure to pay the mortgage debt, foreclosure proceedings
were had and defendant Rural Bank emerged as the highest
bidder during the auction sale in October 1968.
"The spouses Hilario Robles failed to redeem the property and so
the tax declaration was transferred in the name of defendant Rural
Bank. On September 25, 1987, defendant Rural Bank sold the
same to the Spouses Vergel Santos and Ruth Santos. cdrep
"In September 1987, plaintiff discovered the mortgage and
attempted to redeem the property, but was unsuccessful. On May
10, 1988, defendant spouses Santos took possession of the
property in question and was able to secure Free Patent No. IV-1-
010021 in their names." 5
On the other hand, the Court of Appeals summarized the facts of
the case as follows:
"The instant action for quieting of title concerns the parcel of land
bounded and more particularly described as follows:
"A parcel of land located at Kay Taga, Lagundi, Morong, Rizal.
Bounded [i]n the north by the property of Venancio Ablay y Simeon
Ablay; [i]n the east by the property of Veronica Tulak y Dionisio
Ablay; [i]n the south by the property of Simeon Ablay y Dionisio
Ablay; and [i]n the west by the property of Dionisio Ablay y Simeon
Ablay, with an area of 9,985 square meters, more or less,
assessed in the year 1935 at P60.00 under Tax Declaration No.
23219.'
"As the heirs of Silvino Robles who, likewise inherited the above-
described parcel from Leon Robles, the siblings Lucio, Emeteria,
Aludia and Emilio, all surnamed Robles, commenced the instant
suit with the filing of their March 14, 1988 complaint against
Spouses Virgilio and Ruth Santos, as well as the Rural Bank of
Cardona, Inc. Contending that they had been in possession of the
land since 1942, the plaintiff alleged, among other matters, that it
was only in September of 1987 that they came to know of the
foreclosure of the real estate mortgage constituted thereon by the
half-brother, Hilario Robles, in favor of defendant Rural Bank; and
that they likewise learned upon further inquiry, that the latter had
already sold the self-same parcel in favor of the Santos spouses
(pp. 1-3, orig. rec.). Twice amended to implead Hilario Robles (pp.
76-80, orig. rec) and, upon subsequent discovery of the issuance
of Free Patent No. IV-I-010021 in favor of the defendant spouses,
the Director of Lands and the District Land Officer of the Bureau of
Lands as parties-defendants (pp. 117-121, orig. rec). The plaintiffs'
complaint sought the following reliefs on the theory that the
encumbrance of their half-brother, constituted on the land, as well
as all proceedings taken subsequent thereto, were null and void,
to wit:
Wherefore, it is respectfully prayed that (a) a preliminary
mandatory injunction be issued forthwith restoring plaintiffs to their
possession of said parcel of land; (b) an order be issued annulling
said Free Patent No. IV-I-010021 in the name of defendants
spouses Vergel Santos and Ruth C. Santos, the deed of sale
aforementioned and any tax declaration which have been issued
in the name of defendants; and (c) ordering defendants jointly and
severally, to pay plaintiffs the sum of P10,000.00 as attorney's
fees. cda
"Plaintiffs pray for other relief as [may be] just and equitable under
the premises." (pp. 120-121, orig. rec.)
xxx xxx xxx'
"With the termination of the pre-trial stage upon the parties-
litigants' agreement (p. 203, orig. rec.) the trial court proceeded to
try the case on the merits. It thereafter rendered the challenged
June 17, 1991 decision upon the following findings and
conclusions:
"The real estate mortgage allegedly executed by Hilario Robles is
not valid because his signature in the mortgage deed was forged.
This fact, which remains unrebutted, was admitted by Andrea
Robles.
'Inasmuch as the real estate mortgage executed allegedly by
Hilario Robles in favor of the defendant Cardona Rural Bank, Inc.
was not valid, it stands to reason that the foreclosure proceedings
therein were likewise not valid. Therefore, the defendant bank did
not acquire any right arising out of the foreclosure proceedings.
Consequently, defendant bank could not have transferred any
right to the spouses Santos.
'The fact that the land was covered by a free patent will not help
the defendant Santos any.
'There can be no question that the subject [property was held] in
the concept of owner by Leon Robles since 1916. Likewise, his
successor-in-interest, Silvino Robles, his wife Maria de la Cruz and
the plaintiffs occupied the property openly, continuously and
exclusively until they were ousted from their possession in 1988
by the spouses Vergel and Ruth Santos.
'Under the circumstances, therefore, and considering that 'open,
exclusive and undisputed possession of alienable public lands for
the period prescribed by law (30 years), creates the legal fiction
whereby the land, upon completion of the requisite period, ipso
jure and without the need of judicial or other action, ceases to be
public land and becomes private property. Possession of public
land . . . which is [of] the character and duration prescribed by the
statute is the equivalent of an express grant from the State,
considering the dictum of the statute itself[:]; '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 . . . .' No proof is admissible to overcome a
conclusive presumption[,] and confirmation proceedings would be
a little more than a formality, at the most limited to ascertaining
whether the possession claimed is of the required character and
length of time. Registration thereunder would not confer title, but
simply recognize a title already vested. (Cruz v. IAC, G.R. No.
75042, November 29, 1988) The land in question has become
private land. cdll
'Consequently, the issuance of [a] free patent title to the Spouses
Vergel Santos and Ruth C. Santos is not valid because at the time
the property subject of this case was already private land, the
Bureau of Lands having no jurisdiction to dispose of the same.'
(pp. 257-259, orig. rec.)'
"Dissatisfied with the foregoing decision, the Santos spouses and
the defendant Rural Bank jointly filed their July 6, 1991 Notice of
Appeal (p. 260, orig. rec.) . . . ." 6
Ruling of the Court of Appeals
In reversing the trial court, the Court of Appeals held that
petitioners no longer had any title to the subject property at the
time they instituted the Complaint for quieting of title. The CA
ratiocinated as follows:
"As correctly urged by the appellants, the plaintiff-appellees no
longer had any title to the property at the time of the institution of
the instant complaint. (pp. 25-27, rec.) The latter's claim of
continuous possession notwithstanding (pp. 3-5, TSN, July 5,
1990; p. 12, TSN, July 12, 1990), the aforesaid loss of title is amply
evidenced by the subsequent declaration of the subject realty for
taxation purposes not only in the name of Exequiel Ballena
(Exhibits "1" and "2", pp. 23-24, orig. rec.) but also in the name of
the Rural Bank of Antipolo (Exhibit 17, vol. II, orig. rec.). On the
theory that tax declarations can be evincive of the transfer of a
parcel of land or a portion thereof (Gacos v. Court of Appeals, 212
SCRA 214), the court a quo clearly erred in simply brushing aside
the apparent transfers [which] the land in litigation had undergone.
Whether legal or equitable, it cannot, under the circumstances, be
gainsaid that the plaintiff-appellees no longer had any title to speak
of when Exequiel Ballena executed the November 7, 1966 Deed
of Absolute Sale transferring the land in favor of the spouses
Hilario and Andrea Robles (Exhibit "3", p. 25, orig. rec.)
"Even on the theory that the plaintiffs-appellees and their half-
brother, Hilario Robles, are co-owners of the land left behind by
their common father, Silvino Robles, such title would still be
effectively discounted by what could well serve as the latter's acts
of repudiation of the co-ownership, i.e., his possession (p. 22,
TSN, November 15, 1990) and declaration thereof for taxation
purposes in his own name (Exhibit "4", p. 26, orig. rec.). In view of
the plaintiffs-appellees' inaction for more than twenty (20) years
from the time the subject realty was transferred in favor of Hilario
Robles, the appellants correctly maintain that prescription had
already set in. While it may be readily conceded that an action to
quiet title to property in the possession of the plaintiff is
imprescriptible (Almanza vs. Arguelles, 156 SCRA 718; Coronel
vs. Intermediate Appellate Court, 155 SCRA 270; Caragay-Layno
vs. Court of Appeals, 133 SCRA 718; Charon Enterprises vs.
Court of Appeals, 124 SCRA 784; Faja vs. Court of Appeals, 75
SCRA 441; Burton vs. Gabar, 55 SCRA 4999), it equally bears
emphasis that a co-owner or, for that matter, the said co-owner[']s
successors-in-interest who occupy the community property other
than as co-owner[s] can claim prescription as against the other co-
owners (De Guzman vs. Austria, 148 SCRA 75; Ramos vs.
Ramos, 45 Phil. 362; Africa vs. Africa, 42 Phil. 902; Bargayo vs.
Camumot, 40 Phil. 857; De Castro vs. Echarri, 20 Phil. 23). If only
in this latter sense, the appellants correctly argue that the plaintiffs-
appellees have lost their cause of action by prescription. cdtai
"Over and above the foregoing considerations, the court a
quo gravely erred in invalidating the real estate mortgage
constituted on the land solely on the basis of Andrea Robles'
testimony that her husband's signature thereon was forged (p.
257, orig. rec.),
xxx xxx xxx
"In according to the foregoing testimony . . . credibility which, while
admittedly unrebutted, was altogether uncorroborated, the trial
court lost sight of the fact that the assailed deed of real estate
mortgage (Exhibit "5", Vol. II, orig. rec.) is a public document, the
acknowledgment of which is a prima facie evidence of its due
execution (Chua vs. Court of Appeals, 206 SCRA 339). As such,
it retains the presumption of validity in the absence of a full, clear
and convincing evidence to overcome such presumption
(Agdeppa vs. Ibe, 220 SCRA 584).
"The foregoing principles take even more greater [sic] when it is,
moreover, borne in mind that Hilario Robles made the following
admissions in his March 8, 1989 answer, viz:
'3. The complaint filed against herein answering defendant has no
legal basis considering that as the lawful owner of the subject real
property, defendant Hilario Robles has the right to mortgage the
said real property and could dispose the same in whatever manner
he wishe[s] to do." (p. 96, orig. rec.)
"Appropriately underscored by the appellants, the foregoing
admission is binding against Hilario [Robles]. Judicial admissions,
verbal or written, made by the parties in the pleadings or in the
course of the trial or other proceedings in the same case are
conclusive, no evidence being required to prove the same. They
cannot be contradicted unless shown to have been made through
[a] palpable mistake or [unless] no such admission was actually
made (Philippine American General Insurance, Inc. vs. Sweet
Lines, Inc., 212 SCRA 194).
"It does not help the plaintiffs-appellees' cause any that, aside from
complying with the requirements for the foreclosure of the subject
real estate mortgage (Exhibits "6", "7", "8" and "10", Volume II[)],
the appellant Rural Bank had not only relented to the mortgagor's
request to postpone the (Exhibit "g", Vol. II, orig. rec.) but had
likewise granted the latter's request for an extension of the
redemption period therefor (Exhibits "11" and "12", pp. 35-36, orig.
rec.). Without going into minute detail in discussing the Santos
spouses' rights as purchasers for value and in good faith (Exhibit
"21", Vol. II, orig. rec.), the mortgagor and the plaintiffs'-appellees
cannot now be heard to challenge the validity of the sale of the
land after admittedly failing to redeem the same within the
extension the appellant Rural Bank granted (pp. 10-11, TSN,
November 15, 1990).
"Being dependent on the supposed invalidity of the constitution
and foreclosure of the subject real estate mortgage, the plaintiffs-
appellees' attack upon . . . Free Patent No. IV-I must necessarily
fail. The trial court, therefore, misread, and ignored the evidence
o[n] record, to come up with erroneous conclusion." cdasia
Contending that such ruling was contrary to law and jurisprudence,
Petitioners Lucio, Emeteria, Aludia and Emilio all surnamed
Robles filed this Petition for Review. 7
The Assigned Error
Petitioners ascribe the following error to the respondent court:
"Respondent Court of Appeals grievously erred in ruling that with
the transfers of the tax declaration over the parcel of land in
question from Silvino Robles to Exequiel Ballena, then to the Rural
Bank of Antipolo, then to Respondent Hilario Robles, then to
Respondent Rural Bank of Cardona Inc., and then finally to
Respondent Spouses Santos, petitioners, who by themselves and
their predecessors in interest have been in open, actual and
adverse possession of said parcel of land since 1916 up to their
forced removal therefrom in 1988, have lost their title to said
property by prescription to their half-brother, Respondent Hilario
Robles, and then finally, to Respondent Spouses Santos." 8
For a better understanding of the case, the above issue will be
broken down into three points: first, the nature of the remedy of
quieting of title; second, the validity of the real estate mortgage;
and third, the efficacy of the free patent granted to the Santos
spouses.
First Issue:
Quieting of Title
Article 476 of the Civil Code provides:
"Whenever there is cloud on title to real property or any interest
therein, by reason of any instrument, record, claim, encumbrance
or proceeding which is apparently valid or effective but is in truth
and in fact invalid, ineffective, voidable or unenforceable, and may
be prejudicial to said title, an action may be brought to remove
such cloud or to quiet title.
"An action may also be brought to prevent a cloud from being cast
upon title to real property or any interest therein."
Based on the above definition, an action to quiet title is a common-
law remedy for the removal of any cloud or doubt or uncertainty on
the title to real property. 9 It is essential for the plaintiff or
complainant to have a legal or an equitable title to or interest in the
real property which is the subject matter of the action. 10 Also, the
deed, claim, encumbrance or proceeding that is being alleged as
a cloud on plaintiff's title must be shown to be in fact invalid or
inoperative despite its prima facie appearance of validity or legal
efficacy. 11
That there is an instrument or a document which, on its face, is
valid and efficacious is clear in the present case. Petitioners allege
that their title as owners and possessors of the disputed property
is clouded by the tax declaration and, subsequently, the free
patent thereto granted to Spouses Vergel and Ruth Santos. The
more important question to be resolved, however, is whether the
petitioners have the appropriate title that will entitle them to avail
themselves of the remedy of quieting of title. prcd
Petitioners anchor their claim to the disputed property on their
continued and open occupation and possession as owners
thereof. They allege that they inherited it from their father, Silvino,
who in turn had inherited it from his father, Leon. They maintain
that after their father's death, they agreed among themselves that
Petitioner Lucio Robles would be tending and cultivating it for
everyone, and that their half-brother Hilario would be paying the
land taxes.
Petitioners insist that they were not aware that from 1962 until
1987, the subject property had been declared in the names of
Exequiel Ballena, the Rural Bank of Antipolo, Hilario Robles, the
Rural Bank of Cardona, Inc., and finally, Spouses Vergel and Ruth
Santos. Maintaining that, as co-owners of the subject property,
they did not agree to the real estate mortgage constituted on it,
petitioners insist that their shares therein should not have been
prejudiced by Hilario's actions.
On the other hand, Private Respondents Vergel and Ruth Santos
trace their claim to the subject property to Exequiel Ballena, who
had purportedly sold it to Hilario and Andrea Robles. According to
private respondents, the Robles spouses then mortgaged it to the
Rural Bank of Cardona, Inc. not as co-owners but as absolute
owners in order to secure an agricultural loan worth P2,000.
Upon their failure to pay their indebtedness, the mortgage was
foreclosed and the property sold to the bank as the highest bidder.
Thereafter, private respondents purchased the property from the
bank.
Undisputed is the fact that the land had previously been occupied
by Leon and later by Silvino Robles, petitioners' predecessors-in-
interest, as evidenced by the different tax declarations issued in
their names. Also undisputed is the fact that the petitioners
continued occupying and possessing the land from the death of
Silvino in 1942 until they were allegedly ousted therefrom in 1988.
In 1962, the subject property was declared in the name of Exequiel
for taxation purposes. On September 30, 1965, it was again
declared in the same name; on October 28, 1965, in the name of
the Rural Bank of Antipolo; on November 7, 1966, in the name of
Hilario and Andrea; and thereafter, in the name of the Rural Bank
of Cardona and, finally, in the name of the Santos spouses. cdll
Ostensibly, the Court of Appeals failed to consider irregularities in
the transactions involving the disputed property. First, while it was
declared in the name of Exequiel in 1962, there was no instrument
or deed of conveyance evidencing its transfer from the heirs of
Silvino to him. This fact is important, considering that the
petitioners are alleging continued possession of the
property. Second, Exequiel was the father-in-law of Hilario, to
whom petitioners had entrusted the payment of the land
taxes. Third, considering that the subject property had been
mortgaged by Exequiel to the Rural Bank of Antipolo, and that it
was foreclosed and in fact declared in the bank's name in 1965,
why was he able to sell it to Spouses Hilario and Andrea in
1966? Lastly, inasmuch as it was an unregistered parcel of land,
the Rural Bank of Cardona, Inc., did not observe due diligence in
determining Hilario's title thereto.
The failure to show the indubitable title of Exequiel to the property
in question is vital to the resolution of the present Petition. It was
from him that Hilario had allegedly derived his title thereto as
owner, an allegation which thereby enabled him to mortgage it to
the Rural Bank of Cardona. The occupation and the possession
thereof by the petitioners and their predecessors-in-interest until
1962 was not disputed, and Exequiel's acquisition of the said
property by prescription was not alleged. Thus, the deed of
conveyance purportedly evidencing the transfer of ownership and
possession from the heirs of Silvino to Exequiel should have been
presented as the best proof of that transfer. No such document
was presented, however.
Therefore, there is merit to the contention of the petitioners that
Hilario mortgaged the disputed property to the Rural Bank of
Cardona in his capacity as a mere co-owner thereof. Clearly, the
said transaction did not divest them of title to the property at the
time of the institution of the Complaint for quieting of title.
Contrary to the disquisition of the Court of Appeals, Hilario effected
no clear and evident repudiation of the co-ownership. It is a
fundamental principle that a co-owner cannot acquire by
prescription the share of the other co-owners, absent any clear
repudiation of the co-ownership. In order that the title may
prescribe in favor of a co-owner, the following requisites must
concur: (1) the co-owner has performed unequivocal acts of
repudiation amounting to an ouster of the other co-owners; (2)
such positive acts of repudiation have been made known to the
other co-owners; and (3) the evidence thereof is clear and
convincing. 12
In the present case, Hilario did not have possession of the subject
property; neither did he exclude the petitioners from the use and
the enjoyment thereof, as they had indisputably shared in its
fruits. 13 Likewise, his act of entering into a mortgage contract with
the bank cannot be construed to be a repudiation of the co-
ownership. As absolute owner of his undivided interest in the land,
he had the right to alienate his share, as he in fact did. 14 Neither
should his payment of land taxes in his name, as agreed upon by
the co-owners, be construed as a repudiation of the co-ownership.
The assertion that the declaration of ownership was tantamount to
repudiation was belied by the continued occupation and
possession of the disputed property by the petitioners
as owners. cdll
Second Issue:
Validity of the Real Estate Mortgage
In a real estate mortgage contract, it is essential that the mortgagor
be the absolute owner of the property to be mortgaged; otherwise,
the mortgage is void. 15 In the present case, it is apparent that
Hilario Robles was not the absolute owner of the entire subject
property; and that the Rural Bank of Cardona, Inc., in not fully
ascertaining his title thereto, failed to observe due diligence and,
as such, was a mortgagee in bad faith.
First, the bank was utterly remiss in its duty to establish who the
true owners and possessors of the subject property were. It acted
with precipitate haste in approving the Robles spouses' loan
application, as well as the real estate mortgage covering the
disputed parcel of land. 16 Had it been more circumspect and
assiduous, it would have discovered that the said property was in
fact being occupied by the petitioners, who were tending and
cultivating it.
Second, the bank should not have relied solely on the Deed of
Sale purportedly showing that the ownership of the disputed
property had been transferred from Exequiel Ballena to the Robles
spouses, or that it had subsequently been declared in the name of
Hilario. Because it was dealing with unregistered land, and the
circumstances surrounding the transaction between Hilario and
his father-in-law Exequiel were suspicious, the bank should have
exerted more effort to fully determine the title of the
Robleses. Rural Bank of Compostela v. Court of
Appeals 17 invalidated a real estate mortgage after a finding that
the bank had not been in good faith. The Court explained: "The
rule that persons dealing with registered lands can rely solely on
the certificate of title does not apply to banks." In Tomas v. Tomas,
the Court held:
". . . . Banks, indeed, should exercise more care and prudence in
dealing even with registered lands, than private individuals, for
their business is one affected with public interest, keeping in trust
money belonging to their depositors, which they should guard
against loss by not committing any act of negligence which
amounts to lack of good faith by which they would be denied the
protective mantle of land registration statute, Act 496, extended
only to purchasers for value and in good faith, as well as to
mortgagees of the same character and description. . . . ." 18
Lastly, the Court likewise finds it unusual that, notwithstanding the
bank's insistence that it had become the owner of the subject
property and had paid the land taxes thereon, the petitioners
continued occupying it and harvesting the fruits therefrom. 19
Considering that Hilario can be deemed to have mortgaged the
disputed property not as absolute owner but only as a co-owner,
he can be adjudged to have disposed to the Rural Bank of
Cardona, Inc., only his undivided share therein. The said bank,
being the immediate predecessor of the Santos spouses, was a
mortgagee in bad faith. Thus, justice and equity mandate the
entitlement of the Santos spouses, who merely stepped into the
shoes of the bank, only to what legally pertains to the latter
Hilario's share in the disputed property. LLjur
Third Issue:
Efficacy of Free Patent Grant
Petitioners repeatedly insist that the disputed property belongs to
them by private ownership and, as such, it could not have been
awarded to the Santos spouses by free patent. They allege that
they possessed it in the concept of owners openly, peacefully,
publicly and continuously as early as 1916 until they were forcibly
ousted therefrom in 1988. They likewise contend that they
cultivated it and harvested its fruits. Lucio Robles testified:
"xxx xxx xxx
Q By the way, why do you know this parcel of land?
A Because before my father died, he showed me all the
documents.
Q Before the death of your father, who was the owner of this parcel
of land?
A My father, sir.
Q How did your father acquire this parcel of land?
A My father knew that it [was] by inheritance, sir.
Q From whom?
A From his father, Leon Robles, sir.
Q And do you know also [from] whom Leon Robles acquired this
land?
A It was inherited from his father, sir.
Q What is the nature of this parcel of land?
A It's an agricultural land, sir.
Q Now, at the time of the death of your father, this land was
planted with what crops?
A Mango trees, santol trees, and I was the one who planted those
trees, sir.
Q When did you plant those trees?
A Before the death of my father, sir.
Q Now, after the death of your father, who cultivated this parcel of
land?
A I took charge of the land after the death of my father, sir.
Q Up to when?
A Up to the present, sir, after this case was already filed." 20
The preceding claim is an assertion that the subject property is
private land. The petitioners do not concede, and the records do
not show, that it was ever an alienable land of the public domain.
They allege private ownership thereof, as evidenced by their
testimonies and the tax declarations issued in the names of their
predecessors-in-interest. It must be noted that while their claim
was not corroborated by other witnesses, it was not controverted
by the other parties, either. prcd
Carlos Dolores insisted that the Rural Bank of Cardona, Inc., of
which he was the manager, had acquired and possessed the
subject property. He did not, however, give any reason why the
petitioners had continued occupying it, even as he admitted on the
stand that he had visited it twice. 21
In the light of their open, continuous, exclusive and notorious
possession and occupation of the land, petitioners are "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." 22 The land was "segregated from the public domain."
Accordingly, the director of lands had no authority to issue a free
patent thereto in favor of another person. Verily, jurisprudence
holds that a free patent covering private land is null and void. 23
Worth quoting is the disquisition of the Court in Agne v. Director of
Lands, 24 in which it held that a riparian owner presently in
possession had a better right over an abandoned river bed than
had a registered owner by virtue of a free patent.
"Under the provisions of Act 2874 pursuant to which the title of
private respondents' predecessor-in-interest was issued, the
President of the Philippines, or his alter ego, the Director of
Lands, has no authority to grant a free patent for land that has
ceased to be a public land and has passed to private ownership
and a title so issued is null and void. The nullity arises, not from
fraud or deceit, but from the fact that the land is not under the
jurisdiction of the Bureau of Lands. The jurisdiction of the Director
of Lands is limited only to public lands and does not cover lands
publicly owned. The purpose of the Legislature in adopting the
former Public Land Act, Act No. 2874, was and is to limit its
application to lands of the public domain, and lands held in private
ownership are not included therein and are not affected in any
manner whatsoever thereby. Land held in freehold or fee title, or
of private ownership, constitutes no part of the public domain, and
cannot possibly come within the purview of said act 2874,
inasmuch as the 'subject' of such freehold or private land is not
embraced in any manner in the title of the Act and the same is
excluded from the provisions of the text thereof.
"We reiterate that private ownership of land is not affected by the
issuance of the free patent over the same land because the Public
Land Act applies only to lands of the public domain. Only public
land may be disposed of by the Director of Lands. Since as early
as 1920, the land in dispute was already under the private
ownership of herein petitioners and no longer a part of the lands
of the public domain, the same could not have been the subject
matter of a free patent. The patentee and his successors-in-
interest acquired no right or title to said land. Necessarily, Free
Patent No. 23263 issued to Herminigildo Agpoon is null and void
and the subsequent titles issued pursuant thereto cannot become
final and indefeasible. Hence we ruled in Director of Lands v.
Sicsican, et al., that if at the time the free patents were issued in
1953 the land covered therein were already private property of
another and, therefore, not part of the disposable land of the public
domain, then applicants patentees acquired no right or title to the
land.
"Now, a certificate of title fraudulently secured is null and void ab
initio if the fraud consisted in misrepresenting that the land is part
of the public domain, although it is not. As earlier stated, the nullity
arises, not from the fraud or deceit, but from the fact that the land
is not under the jurisdiction of the Bureau of Lands. Being null and
void, the free patent granted and the subsequent titles produce no
legal effect whatsoever. Quod nullum est, nullum producit
effectum.
"A free patent which purports to convey land to which the
government did not have any title at the time of its issuance does
not vest any title in the patentee as against the true owner. The
Court has previously held that the Land Registration Act and the
Cadastral Act do not give anybody who resorts to the provisions
thereof a better title than what he really and lawfully has.
xxx xxx xxx
"We have, therefore, to arrive at the unavoidable conclusion that
the title of herein petitioners over the land in dispute is superior to
the title of the registered owner which is a total nullity. The long
and continued possession of petitioners under a valid claim of title
cannot be defeated by the claim of a registered owner whose title
is defective from the beginning."
The Santos spouses argue that petitioners do not have the
requisite personality to question the free patent granted them,
inasmuch as "it is a well-settled rule that actions to nullify free
patents should be filed by the Office of the Solicitor General at the
behest of the Director of Lands." 25
Private respondents' reliance on this doctrine is misplaced.
Indeed, the Court held in Peltan Development, Inc. v. Court of
Appeals 26 that only the solicitor general could file an action for
the cancellation of a free patent. Ruling that the private
respondents, who were applicants for a free patent, were not the
proper parties in an action to cancel the transfer certificates
covering the parcel of land that was the subject of their application,
the Court ratiocinated thus:
"The Court also holds that private respondents are not the proper
parties to initiate the present suit. The complaint, praying as it did
for the cancellation of the transfer certificates of title of petitioners
on the ground that they were derived from a "spurious" OCT No.
4216, assailed in effect the validity of said title. While private
respondents did not pray for the reversion of the land to the
government, we agree with the petitioners that the prayer in the
complaint will have the same result of reverting the land to the
government under the Regalian Doctrine. Gabila
v. Barinaga 27 ruled that only the government is entitled to this
relief. . . . ."
Because the cancellation of the free patent as prayed for by the
private respondents in Peltan would revert the property in question
to the public domain, the ultimate beneficiary would be the
government, which can be represented by the solicitor general
only. Therefore, the real party-in-interest is the government, not
the private respondents. LibLex
This ruling does not, however, apply to the present case. While the
private respondents in Peltan recognized that the disputed
property was part of the public domain when they applied for free
patent, 28 herein petitioners asserted and proved private
ownership over the disputed parcel of land by virtue of their open,
continued and exclusive possession thereof since 1916.
Neither does the present case call for the reversion of the disputed
property to the State. By asking for the nullification of the free
patent granted to the Santos spouses, the petitioners
are claiming the property which, they contend, rightfully belongs to
them.
Indeed, the same issue was resolved by this Court in Heirs of
Marciano Nagano v. Court of Appeals. 29 In that case, the trial
court dismissed a Complaint seeking the declaration of nullity of
an Original Certificate of Title issued pursuant to a free patent,
reasoning that the action should have been instituted by the
solicitor general. In reversing the trial court, the Supreme Court
held:
"It is settled that a Free Patent issued over private land is null and
void, and produces no legal effect whatsoever. Quod nullum
est, nullum producit effectum. Moreover, private respondents'
claim of open, peaceful, continuous and adverse possession of the
2,250 square meter portion since 1920, and its illegal inclusion in
the Free Patent of petitioners and in their original certificate of title,
gave private respondents a cause of action for quieting of title
which is imprescriptible."
In any event, the Office of the Solicitor General was afforded an
opportunity to express its position in these proceedings. But it
manifested that it would not file a memorandum, because "this
case involves purely private interests." 30
The foregoing considered, we sustain the contention of petitioners
that the free patent granted to the Santos spouses is void. It is
apparent that they are claiming ownership of the disputed property
on the basis of their possession thereof in the concept of owners
openly, peacefully, publicly, continuously and adversely since
1916. Because they and their predecessors-in-interest have
occupied, possessed and cultivated it as owners for more than
thirty years, 31 only one conclusion can be drawn it has
become private land and is therefore beyond the authority of the
director of lands. LibLex
Epilogue
We recognize that both the petitioners and the Santos spouses fell
victim to the dubious transaction between Spouses Hilario and
Andrea Robles and the Rural Bank of Cardona, Inc. However,
justice and equity mandate that we declare Petitioners Lucio,
Emerita, Aludia and Emilio Robles to have the requisite title
essential to their suit for quieting of title. Considering the
circumstances peculiar to this complicated problem, the Court
finds this conclusion the logical and just solution.
The claim that petitioners were guilty of laches in not asserting
their rights as owners of the property should be viewed in the light
of the fact that they thought their brother was paying the requisite
taxes for them, and more important, the fact that
they continued cultivating it and harvesting and gaining from its
fruits.
From another viewpoint, it can even be said that it was the Rural
Bank of Cardona, Inc., which was guilty of laches because,
granting that it had acquired the subject property legally, it failed
to enforce its rights as owner. It was oblivious to the petitioners'
continued occupation, cultivation and possession thereof.
Considering that they had possessed the property in good faith for
more than ten years, it can even be argued that they thus regained
it by acquisitive prescription. In any case, laches is a remedy in
equity, and considering the circumstances in this case, the
petitioners cannot be held guilty of it.
In sum, the real estate mortgage contract covering the disputed
property a contract executed between Spouses Hilario and
Andrea on the one hand and the Rural Bank of Cardona, Inc., on
the other is hereby declared null and void insofar as it
prejudiced the shares of Petitioners Lucio, Emerita, Aludia and
Emilio Robles; it is valid as to Hilario Robles' share therein.
Consequently, the sale of the subject property to the Santos
spouses is valid insofar as it pertained to his share only. Likewise
declared null and void is Free Patent No. IV-1-010021 issued by
the Bureau of Lands covering the subject property. LLphil
WHEREFORE, the Petition is hereby GRANTED. The assailed
Decision is REVERSED and SET ASIDE. Except as modified by
the last paragraph of this Decision, the trial court's Decision is
REINSTATED. No costs.
SO ORDERED.
||| (Robles v. Court of Appeals, G.R. No. 123509, [March 14,
2000], 384 PHIL 635-660)
E. Condominium Act (RA 4726)
Title 4 Some Special Properties
A. Waters (Arts. 502-518)
B. Minerals (Art. 519)
C. Trademark and Trade Names (Arts. 520-523)
Title 5 Possession
A. Concept of Possession
1. Requisites
2. Classifications of Possession
CASES:
Rizal Cement Co., Inc. v. Villareal 135 SCRA 15
SECOND DIVISION
[G.R. No. L-30272. February 28, 1985.]
RIZAL CEMENT CO., INC., petitioner, vs. CONSUELO C.
VILLAREAL, ISABEL C. VILLAREAL, FLAVIANO C.
VILLAREAL, ALFREDO V. GOMEZ, AURORA V. GOMEZ
and the COURT OF APPEALS, respondents.
Amanda V. Viray for petitioner.
Luis Ma. Guerrero for respondents.
SYLLABUS
1. CIVIL LAW; PROPERTY, OWNERSHIP AND ITS
MODIFICATIONS; POSSESSION; HOW ACQUIRED.
Possession is acquired by the material occupation of a thing
or the exercise of a right or by the fact it is subject to the action
of our will, or by the proper acts and legal formalities
established for acquiring such right.
2. REMEDIAL LAW EVIDENCE; TAX DECLARATION,
SURVEY PLAN OR TECHNICAL DESCRIPTION, NOT
CONCLUSIVE PROOFS OF OWNERSHIP. Petitioner's
evidence, consisting of tax receipts, tax declaration and
survey plan are not conclusive and indisputable basis of one's
ownership of the property in question. Assessment alone is of
little value as proof of title. Mere tax declaration does not vest
ownership of the property upon the declarant. Settled is the
rule that neither tax receipts nor declaration of ownership for
taxation purposes alone constitutes sufficient evidence of
ownership or of the right to possess realty. They must be
supported by other effective proofs. Neither can the survey
plan or technical descriptions prepared at the instance of the
party concerned be considered in his favor, the same being
self-serving.
3. ID.; ID.; FINDINGS OF FACT OF THE APPELLATE
COURT BINDING ON APPEAL WHEN SUPPORTED BY
SUBSTANTIAL EVIDENCE; CASE AT BAR. A painstaking
review of the evidence on record failed to disclose any
evidence or circumstance of note sufficient enough to overrule
said findings and conclusions. The jurisdiction of this Court in
cases brought to Us from the Court of Appeals (now
Intermediate Appellate Court) is limited to the review of errors
of law, said appellate court's findings of fact being conclusive
upon us except (1) when the conclusion is a finding grounded
entirely on speculation, surmises or conjectures; (2) when the
inference made is manifestly absurd, mistaken or impossible;
(3) when there is grave abuse of discretion in the appreciation
of facts; (4) when the judgment is premised on a
misapprehension of facts; (5) when the findings of fact are
conflicting; and (6) when the Court of Appeals, in making its
findings went beyond the issues of the case and the same is
contrary to the admissions of both appellant and appellee,
none of which obtain in the case at bar. The appellate court
did what is required of it under the law and it cannot be faulted
after reaching a conclusion adverse to herein petitioner. The
decision on the merits of the case hinges on the determination
of the pertinent facts, and the findings of the Court of Appeals
when supported by substantial evidence are beyond our
power of review.
DECISION
CUEVAS, J p:
Petition for Review on Certiorari of the decision of the defunct
Court of Appeals in CA-G.R. No. 36700 which REVERSED
the decision of the then Court of First Instance of Rizal in Land
Registration Case No. 1204, LRC Rec. No. N-10480.
Sometime in December 1955, private respondents filed with
the then Court of First Instance of Rizal in Pasig, an
Application for Registration, alleging, inter alia:
"1. That the said land consists of two agricultural lots bounded
and described as shown on plan Psd-147662 as Lots Nos. 1
and 2 and technical descriptions attached hereto and made
integral part hereof;
2. That Lots Nos. 1 and 2 of plan Psd-147662 at the last
assessment for taxation were assessed at a total amount of
ONE THOUSAND FIVE HUNDRED (P1,500.00) PESOS per
Tax Declaration Nos. 11994 and 11995 in the values of ONE
THOUSAND ONE HUNDRED NINETY (P1,190.00) PESOS
and THREE HUNDRED TEN P310.00) PESOS, respectively,
in the Land Records of Rizal Province;
3. That to the best of their knowledge and belief, there is no
mortgage or encumbrance of any kind whatsoever affecting
said parcels of land nor is there any person having any estate
or interest thereon, legal or equitable in possession,
remainder, reversion or expectancy;
4. That the applicants have acquired said lands by purchase
from the spouses VICTORIANO CERVO and IGNACIA
GUILLERMO as evidenced by a Deed of Sale executed by
the latter in favor of the former, before Notary Public for the
City of Manila, Mr. Manuel M. Paredes on the 3rd day of
November, 1955, per Doc. No. 352, Page No. 42, Book No.
II, Series of 1955;
5. That the said parcels of land are not occupied by anybody;
xxx xxx xxx
8. That the said lots included in this application adjoins the
National Road and the applicants do not claim any part of the
said National Road;
xxx xxx xxx
Petitioner then prayed that the aforesaid parcels be brought
under the operation of the Land Registration Act, and to have
the title thereto confirmed and registered in their names.
Petitioner filed an OPPOSITION to said application alleging
"That the Rizal Cement Co., Inc. is the owner of unregistered
three (3) parcels of land known as Lots Nos. 1, 2 and 4,
located in Darangan, Binangonan Rizal, the full technical
description and bearing distance of which can be found in
Plan Psu-2260 approved by the Director of Lands in 1912;.
That the land which is the subject of this petition for
registration, full technical description of which are found in
Psu-147662 approved by the Director of Lands in October,
1955, covers portions of Lots 1 and 4 of Psu-2260;
That Lot No. 1 under Psu-2260 contains an area of 122,982
square meters, a portion of which is designated as Lot No. 2
of Psu-147662 containing an area of 6,133 square meters;
That Lot No. 4 of Psu-2260 contains an area of 27,530 square
meters, a portion of which is designated as Lot No. 1 of Psu-
147662 containing an area of 19,916 square meters; and
That the oppositor Rizal Cement Co., Inc. is in possession of
said land and has been religiously paying the real estate tax
in the Municipality of Binangonan, Rizal from the time it had
acquired said property from the previous owner (Old Tax
Declaration No. 30662) now 10570."
Petitioner then prayed that the said petition be dismissed.
Private respondents, in REPLY to said OPPOSITION,
countered that the whole three (3) parcels of land known as
Lots Nos. 1, 2 and 4 of Plan Psu-2260 do not belong to the
petitioner; that a portion of Lot No. 1 consisting of 6,133
square meters and portion of Lot No. 4 consisting of 19,916
square meters belong to them; that they and their
predecessors-in-interest have been in continuous, adverse
and open possession of said portion since time immemorial;
and that they have been religiously paying the real estate
taxes thereon.
After trial, judgment was rendered by the Court of First
Instance on April 28, 1965 which was amended on May 21,
1965, denying the application for registration and ordering the
issuance of a decree of registration after finality of said
decision in the name of Rizal Cement Company. llcd
Respondents appealed to the then Court of Appeals which
reversed and set aside the lower court's decision. Petitioner
moved for reconsideration but the appellate court denied the
motion in its Resolution of February 11, 1969.
Hence, the present petition alleging that the Court of Appeals,
in reversing the decision of the trial court, has arrived at
grossly mistaken, absurd and impossible conclusions of law
and has decided the appeal in a manner totally at war with
and entirely contrary to law and the applicable decisions of
this Court. In fine, petitioner submits the following errors
allegedly committed by the appellate court for Our review and
consideration:
a) Reliance on the Deed of Sale purporting to have been
executed by Maria Certeza in 1924 in favor of Apolonia
Francisco, the due execution of which have been duly
established, and made capital of this deed of sale as having
effected the transfer of rights over the lots in question,
successively from the original vendor down to herein private
respondents;
(b) Giving much weight to private respondents' evidence to
the effect that former Justice Mariano de Joya and one
Gonzalo Certeza were former owners of the property in
question, and that they are the predecessors-in-interest of the
applicants-respondents. However, the Court of Appeals failed
to consider the fact that these persons who were then
available and were the best witnesses to substantiate
applicants' claim, were not presented as witnesses thereby
giving rise to the legal presumption that their testimonies
would have been adverse had they testified in this case;
c) Failure of the Court of Appeals to consider the fact that the
two (2) lots sought to be registered by private respondents
were not listed in the inventory of Maria Certeza's properties
submitted to the court;
d) Failure of the Court of Appeals to rule that private
respondents were not able to prove that the properties
covered by Exhibit "H" were the same properties covered in
Exhibit "I". The Court of Appeals has acted contrary to the
doctrine laid down in land registration cases to the effect that
an applicant must prove not only the genuineness of his title
but also the identity of the land applied for;
e) Stressing that the evidence of petitioner (then oppositor)
was weak to substantiate its claim but failed to apply the
doctrine that the burden is upon the applicant for registration
of land to prove satisfactorily that he is the owner and it is not
enough to prove that the property does not belong to the
opponent. The evidence must be absolute and not merely
preponderant; and
f) In stating that applicants by themselves and their
predecessors-in-interest have an unbroken adverse
possession under claim of ownership for over thirty years thus
failing to consider that petitioner has also been in possession
of the properties since 1911, while several portions thereof
were only under lease to several persons.
Based on respondents-applicants' testimonial and
documentary evidence, it appears that the property applied
for, designated as Lots Nos. 1 and 2 of Plan Psu-147662,
have a total area of 26,015 square meters; that these lots
originally belonged to one Maria Certeza; that upon her death,
the property was involved in a litigation between her
grandchildren and Gonzalo Certeza and that the lots were
given by the latter to former Justice de Joya as the latter's
attorney's fees; that the lots were then sold by de Joya to
Filomeno Sta. Ana who, in turn sold the same to spouses
Victoriano Cervo and Ignacia Guillermo in 1939; that
sometime in November 1955, the said spouses sold the said
lots to the herein applicants as shown by a duly notarized
deed of sale; 1 that the spouses Cervo declared the property
for taxation purposes in the name of the wife, Ignacia
Guillermo, and paid for the realty taxes due thereon; that prior
to the sale, the spouses Cervo had the two parcels surveyed
first in 1950 and then in 1955.
Upon the other hand, oppositor, (now petitioner) Rizal Cement
Company, claims to be the owner of the subject lots, having
bought the same from Maria Certeza, and to have been in
continuous and adverse possession of the property since
1911. To substantiate its claim, petitioner submitted
documentary evidence, the most important of which are the
following
(a) Plan Psu-2260 which covers the survey of a big tract of
land for the company designated as Lots 1, 2 and 4 of the
Plan with a total area of 210,644 square meters. The survey
was made in 1911 and the plan was approved in 1912;
(b) A sketch plan of the geographical position of the real
properties of Madrigal and Company;
(c) Tax Declaration No. 1066 secured in 1949 from the Rizal
Provincial Assessor which is a consolidation of all lands of the
Rizal Cement Company located in Darangan with a total area
of 2,496,712 square meters and which includes the land in
litigation;
(d) Tax Declaration No. 10570 which cancels Tax Declaration
No. 1066; and
(e) Real estate tax receipts issued for Madrigal and Company,
covering among others the land applied for.
As to who had been in actual possession of the land in
question, the Court of Appeals gave credence to the
testimony of the witnesses for respondents applicants,
namely:
(a) Santiago Picadizo one of the tenants of the land from
the time it was owned by Maria Certeza up to the present. He
stated that he knew for a fact that the lots in question were
given to Justice Mariano de Joya as attorney's fees, who in
turn sold the same to Ignacia Guillermo; that from the time he
started working as tenant, he successively gave the share of
the harvests to Maria Certeza; and that during all the time that
the parcels of land were possessed by the previous owners,
no other persons ever claimed ownership of the property.
(b) Isaac Reyes who started working on one-half of the 2
parcels of land since 1934 up to the present, and declared
that there was no other person other than Ignacia Guillermo
who claimed ownership of the parcels in litigation; and
(c) Mr. Valentin Marquez a rebuttal witness who averred
that he begun to live in Darangan, Binangonan, Rizal, since
1910; that he bought a portion of his land from Maria Certeza
when he was working with Rizal Cement Company in 1924;
that the sale was evidenced by an absolute Deed of Sale; that
he occupied the portion sold to him up to 1924; that ever since
he possessed the property there were no other adverse
claimants thereto; that he saw a small house on a portion of
the land of Maria Certeza built by Rizal Cement Company who
intended to make a location where it could built a factory; that
after 4 to 5 months, the small house was removed, after
which, the witness purchased that portion from Maria Certeza;
that during his stay in Darangan, the company did not take
possession of the land; that Maria Certeza had the
possession of the land until her death and that the tenants
gave the harvest of the land to Maria Certeza.
On this score, the Court of Appeals in its assailed decision
held and rightly so
"Being an attribute of ownership, appellants' possession of the
land in question goes far to tip the scale in their favor. The
right to possess flows from ownership. No person will suffer
adverse possession by another of what belongs to him. Were
the oppositor-appellee rightful owner of the land in question,
it would not have allowed the tenants to cultivate the land and
give the owner's share to appellants and/or their
predecessors. It would have opposed the survey for
applicants' vendors on May 21 and 28, 1950 and July 31,
1955, but did not as shown in the surveyor's certificate, Exhibit
E. If oppositor really bought Lot 2 from Maria Certeza in 1909
as claimed, it has not been explained how she could sell a
portion thereof to Apolonia Francisco, married to Valentin
Marquez for P100.00 on April 15, 1924 by deed, Exhibit R,
an ancient document - as confirmed by the husband in his
deposition who as employee of oppositor would have known
of its acquisition. On the other hand, applicants' vendors in
mortgaging the two lots to Pedro Picones in 1952, Exhibits O
and O-1, for P11,000.00, exercised a dominical act; and
Aniano Bautista's testimony that the Cervos were not owners
of the land challenges belief since Bautista was a witness to
Exhibits O and O-1, being uncle of Picones." LLpr
Very significantly petitioner did not present any witness in
actual possession of the land in question.
As aptly found by the appellate court, respondents possess
the property in the concept of an owner.
"Possession is acquired by the material occupation of a thing
or the exercise of a right or by the fact it is subject to the action
of our will, or by the proper acts and legal formalities
established for acquiring such right." 2
Petitioner's evidence, consisting of tax receipts, tax
declaration and survey plan are not conclusive and
indisputable basis of one's ownership of the property in
question. Assessment alone is of little value as proof of title.
Mere tax declaration does not vest ownership of the property
upon the declarant. 3 Settled is the rule that neither tax
receipts nor declaration of ownership for taxation purposes
alone constitutes sufficient evidence of ownership or of the
right to possess realty. They must be supported by other
effective proofs. 5
Apropos thereto is the appellate court's finding that
"Against the chains of tax declarations presented by the
applicants-appellants which originated beyond 1920 from
Maria Certeza, undisputably the original owner of Lots 1 and
2, the oppositor-appellee presented no tax declaration which
could refer specifically to the two lots in question. Tax
Declaration No. 10570 (Exhibit 35-1949) for the oppositor-
appellee admittedly does not indicate any of the two lots in
question. Indeed, the senior deputy assessor of Rizal, as
witness for the oppositor-appellee, categorically declared that
his office refused to issue tax declaration for the land covered
by its Plan Psu-2260, for the reason that the same had been
in possession of various persons in Darangan."
Anent the allegation of petitioner to the effect that the subject
lands, full technical description of which are found in Psu-
147662 approved in October 1955, covers portion of Lots 1
and 4 of Psu-2260, the Court of Appeals correctly observed
"The only documentary evidence which the oppositor-
appellee may capitalize for its claim of ownership is the
notation in applicants' plan Exhibit D that the lots in question
are portions of a previous survey made in 1911 for oppositor,
Plan Psu-2260. The survey plan however has no original
record in the Bureau of Lands. Be that as it may, survey plans
merely delimit areas sought to be registered. Besides, the
annotation relied upon by the lower court in its judgment in
favor of the oppositor is nothing more than what it imports
a previous survey. Neither the plan nor its approval carried
with it any adjudication of ownership. The Director of Lands
through approval merely certifies that the survey has been
made in accordance with approved methods and regulations
in force." (Philippine Executive Commission vs. Antonio, CA-
G.R No. 8456, February 12, 1943)
A painstaking review of the evidence on record failed to
disclose any evidence or circumstance of note sufficient
enough to overrule said findings and conclusions. The
jurisdiction of this Court in cases brought to Us from the Court
of Appeals (now Intermediate Appellate Court) is limited to the
review of errors of law, said appellate court's findings of fact
being conclusive upon us except 6 (1) when the conclusion is
a finding grounded entirely on speculation, surmises or
conjectures; (2) when the inference made is manifestly
absurd, mistaken or impossible; (3) when there is grave abuse
of discretion in the appreciation of facts; (4) when the
judgment is premised on a misapprehension of facts; (5) when
the findings of fact are conflicting; and (6) when the Court of
Appeals, in making its findings went beyond the issues of the
case and the same is contrary to the admissions of both
appellant and appellee, none of which obtain in the case at
bar.
The appellate court did what is required of it under the law and
it cannot be faulted after reaching a conclusion adverse to
herein petitioner. The decision on the merits of the case
hinges on the determination of the pertinent facts, and the
findings of the Court of Appeals when supported by
substantial evidence are beyond our power of review.
WHEREFORE, the petition is hereby DISMISSED and the
decision dated January 6, 1969 of the Court of Appeals (now
Intermediate Appellate Court is hereby AFFIRMED. Costs
against petitioner.
SO ORDERED.
||| (Rizal Cement Co., Inc. v. Villareal, G.R. No. L-30272,
[February 28, 1985], 219 PHIL 526-536)
Wong v. Carpio 203 SCRA 118
THIRD DIVISION
[G.R. No. 50264. October 21, 1991.]
IGNACIO WONG, petitioner, vs. HON. LUCAS D. CARPIO,
as Presiding Judge, Court of First Instance of Davao del
Sur, Branch V and MANUEL MERCADO,respondents.
Rodolfo B. Quiachon for petitioner.
Jose M. Ilagan for private respondent.
SYLLABUS
1. CIVIL LAW; PROPERTY; POSSESSION; MODES OF
ACQUIRING THEREOF. It should be stressed that
"possession is acquired by the material occupation of a thing
or the exercise of a right, or by the fact that it is subject to the
action of our will, or by the proper acts and legal formalities
for acquiring such right." (Art. 531, Civil Code; Rizal Cement
Co., Inc. vs. Villareal, 135 SCRA 15 [1985]); and that the
execution of a sale thru a public instrument shall be equivalent
to the delivery of the thing, unless there is stipulation to the
contrary . . . . If, however, notwithstanding the execution of the
instrument, the purchaser cannot have the enjoyment and
material tenancy of the thing and make use of it herself,
because such tenancy and enjoyment are opposed by
another, then delivery has not been effected. (Paras, Civil
Code of the Philippines, Vol. II, 1989 Ed., p. 400).
2. ID.; ID.; ID.; PROPERTY POSSESSED BY TWO
DIFFERENT PERSONALITIES; RULE. Should a question
arise regarding the fact of possession, the present possessor
shall be preferred; if there are two possessions, the one
longer in possession, if the dates of possession are the same,
the one who presents a title; and if these conditions are equal,
the thing shall be placed in judicial deposit pending
determination of its possession or ownership through proper
proceedings (Art. 538, Civil Code).
3. ID.; ID.; ID.; ENTERING THE PROPERTY AND
EXCLUDING THE LAWFUL POSSESSOR THEREFROM;
IMPLIES THE EXERTION OF FORCE. The act of entering
the property and excluding the lawful possessor therefrom
necessarily implies the exertion of force over the property, and
this is all that is necessary. Under the rule, entering upon the
premises by strategy or stealth is equally as obnoxious as
entering by force. The foundation of the action is really the
forcible exclusion of the original possessor by a person who
has entered without right. The words "by force, intimidation,
threat, strategy, or stealth" include every situation or condition
under which one person can wrongfully enter upon real
property and exclude another who has had prior possession
therefrom. If a trespasser enters upon land in open daylight,
under the very eyes of person already clothed with lawful
possession, but without the consent of the latter, and there
plants himself and excludes such prior possessor from the
property, the action of forcible entry and detainer can
unquestionably be maintained, even though no force is used
by the trespasser other than such as is necessarily implied
from the mere acts of planting himself on the ground and
excluding the other party. (Tolentino, Civil Code of the
Philippines, Vol. II, 1983 Ed., pp. 243-244; Drilon vs. Gaurana,
149 SCRA 342 [1987]).
4. ID.; ID.; ID.; POSSESSION IN GOOD FAITH;
GENERALLY, DOES NOT LOSS ITS CHARACTER;
EXCEPTION. It should be noted that possession acquired
in good faith does not lose this character except in the case
and from the moment facts exist which show that the
possessor is not unaware that he possesses the thing
improperly or wrongfully. (Art. 528, Civil Code). Possession in
good faith ceases from the moment defects in the title are
made known to the possessors, by extraneous evidence or by
suit for recovery of the property by the true owner. Whatever
may be the cause or the fact from which it can be deduced
that the possessor has knowledge of the defects of his title or
mode of acquisition, it must be considered sufficient to show
bad faith. (Tolentino, Civil Code of the Philippines, Vol. II, p.
226). Such interruption takes place upon service of summons
(Manotok Realty vs. Judge Tecson, 164 SCRA 587 [1988]
citing Mindanao Academy, Inc. v. Yap (13 SCRA 190 [1965]).
DECISION
BIDIN, J p:
This is a petition for review on certiorari, certified to this Court
by the Court of Appeals as it involves purely question of law,
seeking the annulment of the September 29, 1978 decision of
the then Court of First Instance * of Davao del Sur, Branch V,
in Civil Case No. 1258 which reversed the February 20, 1978
decision of the Municipal Court of Sta. Maria, **Davao del Sur
in an action for Forcible Entry (Civil Case No. 13) ordering the
dismissal of the complaint as well as the counterclaim.
The undisputed facts of this case, as found by both the trial
court and the then Court of First Instance of Davao del Sur,
are as follows:
"On the basis of the admission of parties in their respective
pleadings, the oral testimonies of all witnesses for both
plaintiff and defendants and the documentary evidence
offered and admitted this Court finds that plaintiff Manuel
Mercado acquired his rights to possess the land in litigation,
particularly lot 3 (LRC) Pcs-295, (situated at Colonga, Sta.
Maria, Davao del Sur) and which is particularly described and
embraced in Transfer Certificate of title No. (T-4244) T-972
from William Giger by virtue of a deed of sale with right to
repurchase which was executed in 1972 for a consideration
of P3,500.00 (testimony of plaintiff, T.S.N., p. 3, hearing of
January 7, 1977). Then, in 1973, William Giger again asked
an additional amount of P2,500.00 from plaintiff and so he
required William Giger to sign a new deed of Pacto de Retro
Sale (Exhibit "A") on November 5, 1973 at Davao City before
Notary Public Gregorio C. Batiller (T.S.N., p. 5, hearing of
January 7, 1977). In 1972, plaintiff began harvesting only the
coconut fruits and he paid the taxes on the land (Exhibits B to
E) for Mr. Giger. He went periodically to the land to make
copra but he never placed any person on the land in litigation
to watch it. Neither did he reside on the land as he is a
businessman and storekeeper by occupation and resides at
Lower Sta. Maria, Davao del Sur while the land in litigation is
at Colongan, Sta. Maria. Neither did he put any sign or hut to
show that he is in actual possession (p. 8, T.S.N., p. 7, hearing
of January 14, 1978). He knew defendants' laborers were in
the land in suit as early as August, 1976 and that they have a
hut there but he did not do anything to stop them. Instead
plaintiff was happy that there were people and a hut on the
land in suit (p. 14, T.S.N., hearing of January 14, 1978). prLL
Before July, 1976, defendant Ignacio Wong went to the land
in litigation to find out if there were other people residing there
or claiming it besides the owner and he found none. So, in
July, 1976, defendant Ignacio Wong bought the parcel of land
in litigation from William Giger and his wife Cecilia Valenzuela
(Exhibit 5). After the execution of Exhibit 5, defendant Ignacio
Wong asked for the delivery of the title to him and so he has
in his possession TCT No. (T-4244) T974 (Exhibit 6) in the
name of William Giger. Mr. Wong declared the land in suit for
taxation purposes in his name (Exhibit 7). He tried to register
the pacto de retro sale with the Register of Deeds by paying
the registration fee (Exhibit 8) but due to some technicalities,
the pacto de retro sale could not be registered. The defendant
Wong placed laborers on the land in suit, built a small farm
house after making some clearings and fenced the
boundaries. He also placed signboards (T.S.N., pp. 14-15,
hearing of September 15, 1977). On September 27, 1976,
plaintiff Manuel Mercado again went to the land in suit to make
copras. That was the time the matter was brought to the
attention of the police of Sta. Maria, Davao del Sur and the
incident entered in the police blotter (Exhibit 11). Then on
November 18, 1976, defendant Wong ordered the hooking of
the coconuts from the land in litigation and nobody disturbed
him. But on November 29, 1976, defendant received a copy
of plaintiff's complaint for forcible entry with summons to
answer which is the case now before the Court. During the
pendency of this instant complaint for forcible entry, spouses
William Giger and Cecilia Valenzuela filed a case for
reformation of instrument with the Court of First Instance of
Digos, Davao del Sur against plaintiff Mercado (Exhibit 4).
The case pertains to Exhibit "A" of plaintiff" (pp. 1-3, CA
Decision, pp. 82-84, Rollo).
On the basis of the aforestated undisputed facts, the
Municipal Court of Sta. Maria, Davao del Sur in its February
20, 1978 Decision found that herein petitioner (defendant
Ignacio Wong) had prior, actual and continuous physical
possession of the disputed property and dismissed both the
complaint and the counter-claim.
On appeal, the then Court of First Instance of Davao del Sur,
in its September 29, 1978 Decision drew a completely
different conclusion from the same set of facts and ruled in
favor of herein private respondent (plaintiff Manuel Mercado).
The decretal portion of the said decision, reads:
"WHEREFORE, the Court finds the plaintiff to have taken
possession of the property earlier in point of time and
defendant is an intruder and must, as he is hereby ordered to
return, the possession of the land in question to the plaintiff,
paying a monthly rental of P400.00 from August, 1976, till the
property is returned with costs against the defendant.
Judgment is reversed."
Petitioner filed the instant petition with the Court of Appeals.
But the Court of Appeals, in its March 1, 1979
Resolution *** found that the only issue is a pure question of
law the correctness of the conclusion drawn from the
undisputed facts and certified the case to this Court.
In its April 4, 1979 Resolution, the Second Division of this
Court docketed the case in this Court and considered it
submitted for decision.
Petitioner alleged two (2) errors committed by respondent
judge, to wit:
A) THE CONCLUSION DRAWN BY RESPONDENT JUDGE
THAT PETITIONER IS AN INTRUDER IS WITHOUT
FACTUAL AND LEGAL BASIS FOR PURPOSES OF A
FORCIBLE ENTRY.
B) THE CONCLUSION DRAWN BY RESPONDENT JUDGE
THAT PETITIONER MUST PAY A MONTHLY RENTAL OF
P400.00 FROM AUGUST, 1976 TILL THE PROPERTY IS
RETURNED HAS NO LEGAL AND FACTUAL BASIS.
The petition is without merit.
Petitioner, in claiming that the private respondent has not
established prior possession, argues that private
respondent's periodic visit to the lot to gather coconuts may
have been consented to and allowed or tolerated by the
owner thereof for the purposes of paying an obligation that
may be due to the person gathering said nuts and that a
person who enters a property to gather coconut fruits and
convert the same to copras may only be a hired laborer who
enters the premises every harvest season to comply with the
contract of labor with the true owner of the property.
The argument is untenable.
It should be stressed that "possession is acquired by the
material occupation of a thing or the exercise of a right, or by
the fact that it is subject to the action of our will, or by the
proper acts and legal formalities for acquiring such right." (Art.
531, Civil Code; Rizal Cement Co., Inc. vs. Villareal, 135
SCRA 15 [1985]); and that the execution of a sale thru a public
instrument shall be equivalent to the delivery of the thing,
unless there is stipulation to the contrary . . . . If, however,
notwithstanding the execution of the instrument, the
purchaser cannot have the enjoyment and material tenancy
of the thing and make use of it herself, because such tenancy
and enjoyment are opposed by another, then delivery has not
been effected. (Paras, Civil Code of the Philippines, Vol. II,
1989 Ed., p. 400).
Applying the above pronouncements on the instant case, it is
clear that possession passed from vendor William Giger to
private respondent Manuel Mercado by virtue of the first sale
a retro (Exhibit A), and accordingly, the later sale a retro
(Exhibit 5) in favor of petitioner failed to pass the possession
of the property because there is an impediment the
possession exercised by private respondent. Possession as
a fact cannot be recognized at the same time in two different
personalities except in the cases of co-possession. Should a
question arise regarding the fact of possession, the present
possessor shall be preferred; if there are two possessions, the
one longer in possession, if the dates of possession are the
same, the one who presents a title; and if these conditions are
equal, the thing shall be placed in judicial deposit pending
determination of its possession or ownership through proper
proceedings (Art. 538, Civil Code).
As to petitioner's query that "Is the entry of petitioner to the
property characterized by force, intimidation, threat, strategy,
or stealth in order to show that private respondent has had
possession so that the case is within the jurisdiction of the
inferior court?" (p. 15, Petition; p. 16, Rollo). The same is
answered in the affirmative.
The act of entering the property and excluding the lawful
possessor therefrom necessarily implies the exertion of force
over the property, and this is all that is necessary. Under the
rule, entering upon the premises by strategy or stealth is
equally as obnoxious as entering by force. The foundation of
the action is really the forcible exclusion of the original
possessor by a person who has entered without right. The
words "by force, intimidation, threat, strategy, or stealth"
include every situation or condition under which one person
can wrongfully enter upon real property and exclude another
who has had prior possession therefrom. If a trespasser
enters upon land in open daylight, under the very eyes of
person already clothed with lawful possession, but without the
consent of the latter, and there plants himself and excludes
such prior possessor from the property, the action of forcible
entry and detainer can unquestionably be maintained, even
though no force is used by the trespasser other than such as
is necessarily implied from the mere acts of planting himself
on the ground and excluding the other party. (Tolentino, Civil
Code of the Philippines, Vol. II, 1983 Ed., pp. 243-244; Drilon
vs. Gaurana, 149 SCRA 342 [1987]). cdphil
Anent the award of rentals in favor of private respondent, the
same is in order. Petitioner's argument that there is no legal
or factual basis for the payment of monthly rentals because
bad faith on the part of petitioner was never proved" deserves
no merit.
It should be noted that possession acquired in good faith does
not lose this character except in the case and from the
moment facts exist which show that the possessor is not
unaware that he possesses the thing improperly or wrongfully.
(Art. 528, Civil Code).
Possession in good faith ceases from the moment defects in
the title are made known to the possessors, by extraneous
evidence or by suit for recovery of the property by the true
owner. Whatever may be the cause or the fact from which it
can be deduced that the possessor has knowledge of the
defects of his title or mode of acquisition, it must be
considered sufficient to show bad faith. (Tolentino, Civil Code
of the Philippines, Vol. II, p. 226). Such interruption takes
place upon service of summons (Manotok Realty vs. Judge
Tecson, 164 SCRA 587 [1988] citing Mindanao Academy,
Inc. v. Yap (13 SCRA 190 [1965]). In the latter case, this Court
held:
" . . . Although the bad faith of one party neutralizes that of the
other and hence as between themselves their rights would be
as if both of them had acted in good faith at the time of the
transaction, this legal fiction of Yap's good faith ceased when
the complaint against him was filed, and consequently the
court's declaration of liability for the rents thereafter is correct
and proper. A possessor in good faith is entitled to the fruits
only so long as his possession is not legally interrupted, and
such interruption takes place upon service of judicial
summons (Arts. 544 and 1123, Civil Code)."
A perusal of the records of the case shows that petitioner
received private respondent's complaint for forcible entry with
summons on November 29, 1976 (Rollo, p. 46). His good faith
therefore ceased on November 29, 1976. Accordingly, the
computation of the payment of monthly rental should start
from December, 1976, instead of August, 1976.
WHEREFORE, with the modification that the computation of
the monthly rental should start from December, 1976 instead
of August, 1976, the September 29, 1978 decision of
respondent judge is Affirmed in all other respects, with costs
against petitioner.
SO ORDERED.
||| (Wong v. Carpio, G.R. No. 50264, [October 21, 1991], 280
PHIL 129-136)
Somodio v. Court of Appeals 235 SCRA 307
FIRST DIVISION
[G.R. No. 82680. August 13, 1994.]
NICANOR SOMODIO, petitioner, vs. COURT OF APPEALS,
EBENECER PURISIMA and FELOMINO
AYCO, respondents.
SYLLABUS
1. REMEDIAL LAW; APPEALS; FINDINGS OF FACT OF
THE COURT OF APPEALS ARE BINDING ON THE
SUPREME COURT; EXCEPTION. As a general rule, the
findings of fact of the Court of Appeals are binding on this
Court. This rule, however, is not without exceptions, one of
which is when the factual findings of the Court of Appeals and
the trial court are contrary to each other. In such a case, this
Court may scrutinize the evidence on record in order to arrive
at the correct findings based on the record.
2. CIVIL LAW; EJECTMENT; PRIOR POSSESSION DE
FACTO; PROOF THEREOF ENTITLES A PERSON TO
POSSESSION OVER THE PROPERTY. In ejectment
cases, the only issue for resolution is who is entitled to the
physical or material possession of the property involved,
independent of any claim of ownership set forth by any of the
party-litigants. Anyone of them who can prove prior
possession de facto may recover such possession even from
the owner himself. This rule holds true regardless of the
character of a party's possession, provided that he has in his
favor priority of time which entitles him to stay on the property
until he is lawfully ejected by a person having a better right by
either accion publiciana or accion reivindicatoria.
3. ID.; ID.; ID.; ID.; CASE AT BAR. Petitioner took
possession of the property sometime in 1974 when he planted
the property to coconut trees, ipil-ipil trees and fruit trees. In
1976, he started the construction of a building on the property.
It is immaterial that the building was unfinished and that he
left for Kidapawan for employment reasons and visited the
property only intermittently. Possession in the eyes of the law
does not mean that a man has to have his feet on every
square meter of ground before it can be said that he is in
possession. It is sufficient that petitioner was able to subject
the property to the action of his will. . . . Even if the Court of
Appeals is correct in its finding that petitioner started
introducing improvements on the land only in 1981, he still
enjoyed priority of possession because respondent Purisima
entered the premises only in 1983.
4. ID.; ID.; ID.; AS DISTINGUISHED FROM OWNERSHIP.
Petitioner's prior possession over the property, however, is
not synonymous with his right of ownership over the same. As
earlier stated, resolution of the issue of possession is far from
the resolution of the issue of ownership. Forcible entry is
merely a quieting process and never determines the actual
title to an estate.
DECISION
QUIASON, J p:
This is a petition for review on certiorari under Rule 45 of the
Revised Rules of Court to reverse and set aside the Decision
dated September 29, 1987 and the Resolution dated February
2, 1988 of the Court of Appeals in CA-G.R. SP No. 11602.
I made the subdivision survey and had fenced an area which
On October 21, 1974, Jose Ortigas executed an instrument
designated as a Transfer of Rights, conveying to Wilfredo
Mabugat the possession of a residential lot situated at Rajah
Muda, Bula, General Santos City and described in the said
instrument as: LibLex
"Lot No. (Unnumbered), bounded on the North by Temporary
Road, on the South by Customs Zone (Sarangani Bay), on
the East by Public Land, and on the West by Public Land."
Nicanor Somodio, herein petitioner, contributed one-half of
the purchase price. On October 22, 1974, Mabugat executed
an Affidavit of Trust expressly recognizing the right of
petitioner over one-half undivided portion of the lot. Later,
petitioner discovered in the District Land Office that the lot
was numbered "6328-X, Csd 2281-D." Thereafter, petitioner
and Mabugat partitioned the property into two portions, with
petitioner taking the western part. Immediately after the
partition, petitioner took possession of his portion and planted
thereon ipil-ipil trees, coconut trees and other fruit-bearing
trees.
In 1976, petitioner began construction of a structure with a
dimension of 22-by-18 feet on his lot. His employment,
however, took him to Kidapawan, North Cotabato, and he left
the unfinished structure to the care of his uncle. He would visit
the property every three months or on weekends when he had
time.
Sometime in October 1977, petitioner allowed respondent
Felomino Ayco, to transfer his hut to petitioner's lot. About six
years later, petitioner demanded that Ayco vacate the
premises but such demand proved futile. Hence, on August
23, 1983, petitioner filed an action for unlawful detainer with
damages against respondent Ayco before the Municipal Trial
Court, Branch I, General Santos, docketed as Civil Case No.
2032-II.
Meanwhile, on June 26, 1983, respondent Ebenecer Purisima
entered the land and constructed a house thereon. Four days
later, petitioner filed against respondent Purisima a complaint
for forcible entry before the same court docketed as Civil Case
No. 2013-I. Said case was later consolidated with Civil Case
No. 2032-II.
In his answer, respondent Purisima averred that the lot was a
portion of the land subject of his application for miscellaneous
sales patent with the Bureau of Lands. Purisima described the
lot in question as: Cdpr
"Lot No. 6328-Y, CSD-2281-D, Bula, General Santos,
Cotabato. Bounded on the North by 6328-X; on the South by
Sarangani Bay; on the East by a Municipal Road; and on the
West by Lot No. 6328-W, containing an area of 1,095 square
meters and covered by Tax Declaration No. 9647" (Rollo, p.
36; Emphasis supplied).
Respondent Purisima contended that his father, a geodetic
engineer, had surveyed the parcel of land comprising of Lots
Nos. 6427 and 6328 for the Small Farmers Fishpond
Association, Inc. in February 1958, and that his father's survey
plan was approved by the Director of Lands in 1960.
Respondent Ayco, on the other hand, did not present any
evidence but merely anchored his right to possess the
property on the evidence of Purisima.
On April 30, 1986, the trial Court rendered a decision finding
that respondent Purisima built his house "almost on the spot
where Somodio's unfinished house" stood "thru stealth and
strategy," not knowing that the house was built on Lot No.
6328-X and not on Lot No. 6328-Y, the lot said respondent
was claiming (Rollo, p. 43). The court went on to state that:
". . . He (private respondent Purisima) was a frequent visitor
in Rajah Muda and had sometimes stayed with Mrs. Maturan
in Judge Purisima's house on the adjoining lots, and could not
have remained unaware of the possession of Somodio. He
must have depended on the thought that it was his father who
he had claimed. He did not exactly verify that the area fenced
by his father had an area of only 1,095 square meters, which
did not include the area Lot No. 6328-X. As the situation
exists, there is no expectation on his part that his house on
Lot No. 6328-X could eventually be standing on his property,
for Lot No. 6328-X is not claimed by him and has not been
applied for even by his father. His father has been abroad and
has not taken steps to apply for Lot No. 6328-X. This lot is not
declared for taxation purposes in the name of any claimant-
applicant. Unless and until there would be an administrative
proceedings and the title ultimately issued in favor of an
applicant, the possession of the actual claimant and occupant
has to be respected and maintained in the interest of public
order . . ." (Rollo, p. 43-44).
The Municipal Trial Court further held that petitioner was the
actual possessor of Lot No. 6328-X. The court did not believe
respondent Ayco's claim that the administratrix of the estate
of respondent Purisima's father authorized him to build a hut
on Lot No. 6328-X in 1976: At any rate, the court said that
respondent Ayco was willing to vacate the premises provided
he be given financial assistance to do so (Rollo, pp. 43-44).
Noting that the ocular inspection of the area showed that the
houses of respondents Purisima and Ayco were "inside Lot
No. 6328-X" and not on Lot No. 6328-Y, the Municipal Trial
Court held that the case became one which entailed mere
removal of the houses from the lot in question. Accordingly,
the court ordered private respondents to remove their
respective houses, to deliver the land to petitioner, and to pay
attorney's fees and litigation expenses. Cdpr
On appeal, the Regional Trial Court, Branch 22, General
Santos City, affirmed in toto the decision of the Municipal Trial
Court. Respondents then elevated the cases on a petition for
review to the Court of Appeals, which, in its decision dated
September 27, 1987, set aside the decisions of the two trial
courts and ordered the dismissal of the two complaints filed
by petitioner.
The Court of Appeals held that herein petitioner had not
"clearly and conclusively established physical, prior
possession over Lot No. 6328-X."
Petitioner's motion for the reconsideration of the decision of
the Court of Appeals having been denied, he filed the instant
petition for review on certiorari.
We grant the petition.
II
The procedural issue raised by private respondents should
first be resolved. The issue is whether the instant petition is
proper considering that petitioner "merely touch(es) upon
questions of fact which had been carefully considered" by the
Court of Appeals (Rollo, p. 92). As a general rule, the findings
of fact of the Court of Appeals are binding on this Court. This
rule, however, is not without exceptions, one of which is when
the factual findings of the Court of Appeals and the trial court
are contrary to each other. In such a case, this Court may
scrutinize the evidence on record in order to arrive at the
correct findings based on the record (Valenzuela v. Court of
Appeals, 191 SCRA 1 [1990]; Roman Catholic Bishop of
Malolos, Inc. v. Intermediate Appellate Court, 191 SCRA 411
[1990]). prcd
Upon a review of the records, we are convinced that petitioner
indeed enjoyed priority of possession over Lot No. 6328-X,
notwithstanding respondent Purisima's claim to the contrary.
In ejectment cases, the only issue for resolution is who is
entitled to the physical or material possession of the property
involved, independent of any claim of ownership set forth by
any of the party-litigants. Anyone of them who can prove prior
possession de facto may recover such possession even from
the owner himself. This rule holds true regardless of the
character of a party's possession, provided that he has in his
favor priority of time which entitles him to stay on the property
until he is lawfully ejected by a person having a better right by
either accion publiciana or accion reivindicatoria (De Luna v.
Court of Appeals, 212 SCRA 276 [1992]).
Petitioner took possession of the property sometime in 1974
when he planted the property to coconut trees, ipil-ipil trees
and fruit trees. In 1976, he started the construction of a
building on the property. It is immaterial that the building was
unfinished and that he left for Kidapawan for employment
reasons and visited the property only intermittently.
Possession in the eyes of the law does not mean that a man
has to have his feet on every square meter of ground before
it can be said that he is in possession (Ramos v. Director of
Lands, 39 Phil. 175 [1918]). It is sufficient that petitioner was
able to subject the property to the action of his will.
Article 531 of the Civil Code of the Philippines provides:
"Possession is acquired by the material occupation of a thing
or the exercise of a right, or by the fact that it is subject to the
action of our will, or by the proper acts and legal formalities
established for acquiring such right."
Even if the Court of Appeals is correct in its finding that
petitioner started introducing improvements on the land only
in 1981, he still enjoyed priority of possession because
respondent Purisima entered the premises only in 1983. llcd
It should be emphasized that the Court of Appeals noted that
none of the parties had produced tax declarations or
applications as public land claimants. As such, what should
have been scrutinized is who between the claimants had
priority of possession.
Moreover, neither is the fact that respondent Purisima's father
surveyed the property of help to his cause. As the Court of
Appeals found, respondent Purisima's father surveyed the
land for the Small Farmers Fishpond Association, Inc., not for
himself. Although respondent Purisima now claims that Lot
No. 6328-X was in payment of his fee for the services of his
father and that he caused the construction of a perimeter wall
in the area, these facts do not mean that respondent Purisima
himself had prior possession. He did not present any proof
that his father had authorized him to enter the land as his
successor-in-interest. Neither did he present proof that
between 1958, when his father allegedly took possession of
the land, and 1983, when said respondent himself entered the
land, his father ever exercised whatever right of possession
he should have over the property. Under these
circumstances, priority in time should be the pivotal cog in
resolving the issue of possession.
The Court of Appeals opined that petitioner had not properly
identified the lot he had occupied. The matter of identification
of the land, however, had been resolved by respondent
Purisima's admission in his pleadings, as well as by two ocular
inspections.
In his answer to the complaint, respondent Purisima claimed
possession over Lot No. 6328-Y, while petitioner identified the
lot adjacent to it, Lot No. 6328-X, as the area where private
respondents built their houses. That these two lots are distinct
from one another was resolved by the ocular inspection
conducted by a Senior Geodetic Engineer of the Office of the
City Engineer, who found that "south of lot 6328-H across a
10-meter wide road is lot 6328-Y and from thence to the south
is lot 6328-X." On June 13, 1985, the Municipal Trial Court
judge himself went to the premises in question and discovered
that aside from the houses of respondents Purisima and Ayco,
five other houses had been built on Lot No. 6328-X. LLjur
Petitioner's prior possession over the property, however, is
not synonymous with his right of ownership over the same. As
earlier stated, resolution of the issue of possession is far from
the resolution of the issue of ownership. Forcible entry is
merely a quieting process and never determines the actual
title to an estate (German Management & Services, Inc. v.
Court of Appeals, 177 SCRA 495 [1989]; Manuel v. Court of
Appeals, 199 SCRA 603 [1991].
WHEREFORE, the decision of the Court of Appeals is
REVERSED and SET ASIDE and that of the trial courts
REINSTATED. Costs against private respondents.
SO ORDERED.
||| (Somodio v. Court of Appeals, G.R. No. 82680, [August 13,
1994])
Maglucot- Aw v. Maglucot 329 SCRA 78
FIRST DIVISION
[G.R. No. 132518. March 28, 2000.]
GAVINA MAGLUCOT-AW, CATALINA ORCULLO,
RICHARD ESTANO, NIDA MAGLUCOT, MELANIA
MAGLUCOT-CATUBIG, EMILIANO CATUBIG, LADISLAO
SALMA,petitioners, vs. LEOPOLDO MAGLUCOT, SEVERO
MAGLUCOT, WILFREDA MAGLUCOT-ALEJO and
CONSTANCIO ALEJO, respondents.
Leo B. Diocos for petitioners.
Nito L. Ruperto for private respondents.
SYNOPSIS
In 1952, upon petition to subdivide Lot No. 1639, the then CFI
of Negros Oriental issued an order subdividing said lot into six
(6) portions, Lot 1639-A to Lot 1639-F. Lot 1639-D was issued
to Roberto Maglucot. Guillermo, Leopoldo and Severo, all
surnamed Maglucot, rented portions of Lot 1639-D and built
houses on their corresponding leased lots. In 1992, however,
said lessees stopped paying rentals claiming ownership over
the subject lot alleging that there was no valid partition that
took place in the absence of a confirmed subdivision plan. The
lower court ruled that there was already a subdivision of Lot
1639. The Court of Appeals, however, ruled otherwise, hence,
this petition for review.
The parties did not object to the Order of Partition and
manifested by their conduct that they have assented thereto.
Hence, they cannot thereafter question the decree. When
respondents here have occupied their respective lots in
accordance with the sketch/subdivision plan, they cannot,
after acquiescing to the Order for more than 40 years, be
allowed to question the binding effect thereof. The payment of
rentals by respondents revealed that they are mere lessees.
As such, the possession of respondents over Lot 1639-D is
that of a holder and not in the concept of an owner.
SYLLABUS
1. REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT OF
THE COURT OF APPEALS, GENERALLY CONCLUSIVE;
EXCEPTIONS. This Court recognizes that "the jurisdiction
of this Court in cases brought before it from the Court of
Appeals via Rule 45 of the Rules of Court is limited to
reviewing errors of law. Findings of fact of the latter are
conclusive, except in the following instances: (1) when the
findings are grounded entirely on speculation, surmises, or
conjectures; (2) when the inference made is manifestly
mistaken, absurd, or impossible; (3) when there is grave
abuse of discretion; (4) when the judgment is based on a
misapprehension of facts; (5) when the findings of fact are
conflicting; (6) when in making its findings the Court of
Appeals went beyond the issues of the case, or its findings
are contrary to the admissions of both the appellant and the
appellee; (7) when the findings are contrary to those of the
trial court; (8) when the findings are conclusions without
citation of specific evidence on which they are based; (9)
when the facts set forth in the petition as well as in the
petitioner's main and reply briefs are not disputed by the
respondent; and (10) when the findings of fact are premised
on the supposed absence of evidence and contradicted by the
evidence on record.
2. ID.; SPECIAL CIVIL ACTIONS; PARTITION; TWO
PHASES THEREOF, DISCUSSED. An action of partition
is comprised of two phases: first, an order for partition which
determines whether a co-ownership in fact exists, and
whether partition is proper; and, second, a decision confirming
the sketch or subdivision submitted by the parties or the
commissioners appointed by the court, as the case may be.
The first phase of a partition and/or accounting suit is taken
up with the determination of whether or not a co-ownership in
fact exists, (i.e., not otherwise legally proscribed) and may be
made by voluntary agreement of all the parties interested in
the property. This phase may end with a declaration that
plaintiff is not entitled to have a partition either because a co-
ownership does not exist, or partition is legally prohibited. It
may end, upon the other hand, with an adjudgment that a co-
ownership does in truth exist, partition is proper in the
premises and an accounting of rents and profits received by
the defendant from the real estate in question is in order. . . .
. The second phase commences when it appears that "the
parties are unable to agree upon the partition" directed by the
court. In that event, partition shall be done for the parties by
the court with the assistance of not more than three (3)
commissioners. This second stage may well also deal with the
rendition of the accounting itself and its approval by the court
after the parties have been accorded opportunity to be heard
thereof, and an award for the recovery by the party or parties
thereto entitled of their just share in the rents and profits of the
real estate in question." Such an order is, to be sure, final and
appealable.
3. ID.; ID.; ID.; ORDER OF PARTITION ACQUIESCED FOR
40 YEARS CONSIDERED FINAL. The true test to
ascertain whether or not an order or a judgment is
interlocutory or final is: Does it leave something to be done in
the trial court with respect to the merits of the case? If it does,
it is interlocutory; if it does not, it is final. The key test of what
is interlocutory is when there is something more to be done
on the merits of the case. An order for partition is final and not
interlocutory and, hence, appealable because it decides the
rights of the parties upon the issue submitted. Nevertheless,
where parties do not object to the interlocutory decree, but
show by their conduct that they have assented thereto, they
cannot thereafter question the decree, especially, where, by
reason of their conduct, considerable expense has been
incurred in the execution of the commission.
4. ID.; ID.; ID.; ID.; PARTIES WHO PARTICIPATED
THEREIN ESTOPPED TO QUESTION THE SAME; CASE
AT BAR. Parties to a partition proceeding, who elected to
take under partition, and who took possession of the portion
allotted to them, are estopped to question title to portion
allotted to another party. A person cannot claim both under
and against the same instrument. In other words, they
accepted the lands awarded them by its provisions, and they
cannot accept the decree in part, and repudiate it in part. They
must accept all or none. Parties who had received the
property assigned to them are precluded from subsequently
attacking its validity of any part of it.
5. CIVIL LAW; ESTOPPEL; TECHNICAL ESTOPPEL;
PARTY KNOWINGLY ACTED TO MISLEAD HIS
ADVERSARY WHO RELIED ON SUCH ACTION. In
technical estoppel, the party to be estopped must knowingly
have acted so as to mislead his adversary, and the adversary
must have placed reliance on the action and acted as he
would otherwise not have done. Some authorities, however,
hold that what is tantamount to estoppel may arise without this
reliance on the part of the adversary, and this is called,
ratification or election by acceptance of benefits, which arises
when a party, knowing that he is not bound by a defective
proceeding, and is free to repudiate it if he will, upon
knowledge, and while under no disability, chooses to adopt
such defective proceeding as his own. Ratification means that
one under no disability voluntarily adopts and gives sanction
to some unauthorized act or defective proceeding, which
without his sanction would not be binding on him. It is this
voluntary choice, knowingly made, which amounts to a
ratification of what was therefore unauthorized, and becomes
the authorized act of the party so making the ratification.
6. ID.; PARTITION; MAY BE INFERRED FROM
CIRCUMSTANCES SUFFICIENTLY STRONG TO
SUPPORT THE PRESUMPTION. Partition may be inferred
from circumstances sufficiently strong to support the
presumption. Thus, after a long possession in severalty, a
deed of partition may be presumed. It has been held that
recitals in deeds, possession and occupation of land,
improvements made thereon for a long series of years, and
acquiescence for 60 years, furnish sufficient evidence that
there was an actual partition of land either by deed or by
proceedings in the probate court, which had been lost and
were not recorded. And where a tract of land held in common
has been subdivided into lots, and one of the lots has long
been known and called by the name of one of the tenants in
common, and there is no evidence of any subsequent claim
of a tenancy in common, it may fairly be inferred that there
has been a partition and that such lot was set off to him whose
name it bears.
7. ID.; ID.; NOT NEGATED BY ABSENCE OF ANNOTATION
IN CERTIFICATE OF TITLE. Respondents insist that the
absence of any annotation in the certificate of title showing
any partition of Lot No. 1639 and that OCT No. 6725 has not
been cancelled clearly indicate that no partition took place.
We are not persuaded. The purpose of registration is to notify
and protect the interests of strangers to a given transaction,
who may be ignorant thereof, but the non-registration of the
deed evidencing such transaction does not relieve the parties
thereto of their obligations thereunder. As originally
conceived, registration is merely a species of notice. The act
of registering a document is never necessary in order to give
it legal effect as between the parties. Requirements for the
recording of the instruments are designed to prevent frauds
and to permit and require the public to act with the
presumption that recorded instruments exist and are
genuine. IHCSTE
DECISION
KAPUNAN, J p:
This petition for review on certiorari assails the Decision,
dated 11 November 1997, of the Court of Appeals in CA-G.R.
CV No. 48816 which reversed and set aside the Decision,
dated 13 December 1994, of the Regional Trial Court, Branch
30 of Dumaguete City, Negros Oriental in an action for
recovery of possession and damages. cdphil
The core issue in this case is whether a partition of Lot No.
1639 had been effected in 1952. Petitioners contend that
there was already a partition of said lot; hence, they are
entitled to exclusive possession and ownership of Lot No.
1639-D, which originally formed part of Lot No. 1639 until its
partition. Private respondents, upon the other hand claim that
there was no partition; hence, they are co-owners of Lot No.
1639-D. Notably, this case presents a unique situation where
there is an order for partition but there is no showing that the
sketch/subdivision plan was submitted to the then Court of
First Instance for its approval or that a decree or order was
registered in the Register of Deeds.
The antecedent facts of the case are as follows:
Petitioners filed with the RTC a complaint for recovery of
possession and damages alleging, inter alia, that they are the
owners of Lot No. 1639-D. Said lot was originally part of Lot
No. 1639 which was covered by Original Certificate Title No.
6775 issued in the names of Hermogenes Olis, Bartolome
Maglucot, Pascual Olis, Roberto Maglucot, Anselmo Lara and
Tomas Maglucot on 16 August 1927. 1 On 19 April 1952,
Tomas Maglucot, one of the registered owners and
respondents' predecessor-in-interest, filed a petition to
subdivide Lot No. 1639. 2 Consequently, on 13 May 1952,
then CFI of Negros Oriental issued an order 3 directing the
parties to subdivide said lot into six portions as follows:
a) Hermogenes Olis lot 1639-A
b) Pascual Olis lot 1639-B
c) Bartolome Maglucot lot 1639-C
d) Roberto(Alberto) lot 1639-D
Maglucot
e) Anselmo Lara lot 1639-E
f) Tomas Maglucot lot 1639-F. 4
Sometime in 1963, Guillermo Maglucot rented a portion of Lot
No. 1639-D (subject lot). Subsequently, Leopoldo and
Severo, both surnamed Maglucot, rented portions of subject
lot in 1964 and 1969, respectively, and each paying rentals
therefor. Said respondents built houses on their
corresponding leased lots. They paid the rental amount
P100.00 per annum to Mrs. Ruperta Salma, who represented
the heirs of Roberto Maglucot, petitioners' predecessor-in-
interest. In December 1992, however, said respondents
stopped paying rentals claiming ownership over the subject
lot. Petitioners thus filed the complaint a quo.
After trial, the lower court rendered judgment in favor of
petitioners. The RTC found the existence of tax declarations
in the names of Hermogenes Olis and Pascual Olis (purported
owners of Lot Nos. 1639-A and 1639-B, respectively) 5 as
indubitable proof that there was a subdivision of Lot No. 1639.
It likewise found that Tomas Maglucot, respondents'
predecessor-in-interest, took active part in the partition as it
was he, in fact, who commenced the action for partition. 6 The
court a quo cited Article 1431 of the Civil Code which states
that "[t]hrough estoppel an admission or representation is
rendered conclusive upon the person making it, and cannot
be denied or disapproved as against the person relying
thereon." Applying said provisions of law, it held that while
there was no court order showing that Lot No. 1639 was
partitioned, its absence could not be used by Tomas
Maglucot, or respondents as his successors-in-interest, to
deny the existence of an approved partition against the other
co-owners who claim that there was one. 7 Said court,
likewise, ruled that the tax declarations 8 over the houses of
respondents, expressly stating that the same are constructed
on the lots of Roberto Maglucot, constitute a conclusive
admission by them of the ownership of the subject lot by the
latter. 9
The dispositive portion of the lower court's decision reads as
follows:
WHEREFORE, on the basis of the foregoing discussion,
judgment is hereby rendered in favor of the plaintiffs against
the defendants ordering the latter:
1. To demolish their houses inside lot 1639-D, vacate the
premises thereof and deliver the possession of the same to
Plaintiffs;
2. To jointly and solidarily pay plaintiffs the sum of P15,000.00
for attorney's fees;
3. To each pay plaintiffs the sum of P100.00 every year from
1993 for actual damages representing the amount of unpaid
rentals up to the time they actually vacate the premises in
question;
4. To pay the costs. 10
On appeal, the CA reversed the decision of the RTC. The
appellate court ruled that the sketch plan and tax declarations
relied upon by petitioners are not conclusive evidence of
partition. 11 The CA likewise found that the prescribed
procedure under Rule 69 of the Rules of Court was not
followed. It thus declared that there was no partition of Lot No.
1639.
Petitioners filed this petition for review on certiorari alleging
that the CA committed the following reversible errors:
I
IN VIOLATING THE LAW ON ACQUISITIVE
PRESCRIPTION PLAINTIFFS HAVING POSSESSED LOT
1639-D SINCE 1946;
II
IN VIOLATING THE LAW ON ESTOPPEL, THE FACT OF
PAYMENT OF RENTALS AND OFFER TO BUY BY THE
DEFENDANTS IS ADMISSION THAT THE AREA IN LOT
1639-D. HAD LONG BEEN ADJUDICATED TO
PLAINTIFFS; LibLex
III
IN DECLARING THAT THERE WAS NO PRIOR PARTITION,
CONTRARY TO THE FINDINGS OF THE TRIAL COURT,
AND AGAINST THE EVIDENCE ON RECORD, OF WHICH
IF PROPERLY CONSIDERED WOULD CHANGE THE
OUTCOME OF THE CASE;
IV
IN DECLARING THAT THERE IS NO LAW OR
JURISPRUDENCE APPLICABLE UNDER THE PREMISES;
THIS WOULD ONLY SHOW THAT THE RECORD OF THE
CASE WAS NOT PROPERLY SCRUTINIZED, AND THE
LAW WAS NOT PROPERLY STUDIED; ESPECIALLY IN
THE CASE AT BENCH THAT THE ORAL AND MUTUAL
PARTITION HAPPENED DURING THE REGIME OF THE
OLD RULES OF PROCEDURE; 12
Petitioners maintain that Lot No. 1639 was mutually
partitioned and physically subdivided among the co-owners
and that majority of them participated in the actual execution
of the subdivision. Further the co-owners accepted their
designated shares in 1946 as averred by Tomas Maglucot in
his petition for partition. 13 Petitioners opine that in 1952,
Tomas Maglucot himself initiated a court proceeding for a
formal subdivision of Lot No. 1639. In said petition, he averred
that only Hermogenes Olis and the heirs of Pascual Olis were
not agreeable to the partition. 14 Petitioners further contend
that respondents admitted in their tax declarations covering
their respective houses that they are "constructed on the land
of Roberto Maglucot." 16
For their part, respondents posit three points in support of
their position. First, they emphasize that petitioners failed to
show that the interested parties were apprised or notified of
the tentative subdivision contained in the sketch and that the
CFI subsequently confirmed the same. 17 Second, they point
to the fact that petitioners were unable to show any court
approval of any partition. 18 Third, they maintain that Lot No.
1639 remain undivided since to date, OCT No. 6275 is still an
existing and perfectly valid title, containing no annotation of
any encumbrance or partition whatsoever. 19
After a careful consideration of the pleadings filed by the
parties and the evidence on record, we find that the petition is
meritorious. As stated earlier, the core issue in this case is
whether there was a valid partition in 1952.
Preliminarily, this Court recognizes that "the jurisdiction of this
Court in cases brought before it from the Court of
Appeals via Rule 45 of the Rules of Court is limited to
reviewing errors of law. Findings of fact of the latter are
conclusive except in the following instances: (1) when the
findings are grounded entirely on speculation, surmises, or
conjectures; (2) when the inference made is manifestly
mistaken, absurd, or impossible; (3) when there is grave
abuse of discretion; (4) when the judgment is based on a
misapprehension of facts; (5) When the findings of fact are
conflicting; (6) when in making its findings the Court of
Appeals went beyond the issues of the case, or its findings
are contrary to the admissions of both the appellant and the
appellee; (7) when the findings are contrary to those of the
trial court; (8) when the findings are conclusions without
citation of specific evidence on which they are based; (9)
when the facts set forth in the petition as well as in the
petitioner's main and reply briefs are not disputed by the
respondent; and (10) when the findings of fact are premised
on the supposed absence of evidence and contradicted by the
evidence on record." 20 This case falls under exceptions (7),
(8) and (10) in that the findings of facts of the CA are in conflict
with that or the RTC, are mere conclusions without citation of
specific evidence on which then are based and are premised
on absence of evidence but are contradicted by the evidence
on record. For these reasons, we shall consider the evidence
on record to determine whether indeed there was partition.
In this jurisdiction, an action for partition is comprised of two
phases: first, an order for partition which determines whether
a co-ownership in fact exists, and whether partition is proper;
and, second, a decision confirming the sketch or subdivision
submitted by the parties or the commissioners appointed by
the court, as the case may be. 21 The first phase of a partition
and/or accounting suit is taken up with the determination of
whether or not a co-ownership in fact exists, (i.e., not
otherwise legally proscribed) and may be made by voluntary
agreement of all the parties interested in the property. This
phase may end with a declaration that plaintiff is not entitled
to have a partition either because a co-ownership does not
exist, or partition is legally prohibited. It may end, upon the
other hand, with an adjudgment that a co-ownership does in
truth exist, partition is proper in the premises and an
accounting of rents and profits received by the defendant from
the real estate in question is in order. In the latter case, "the
parties may, if they are able to agree, make partition among
themselves by proper instruments of conveyance, and the
court shall confirm the partition so agreed upon. In either case
i.e., either the action is dismissed or partition and/or
accounting is decreed the order is a final one, and may be
appealed by any party aggrieved thereby. 22 The second
phase commences when it appears that "the parties are
unable to agree upon the partition" directed by the court. In
that event, partition shall be done for the parties by the court
with the assistance of not more than three (3) commissioners.
This second stage may well also deal with the rendition of the
accounting itself and its approval by the court after the parties
have been accorded opportunity to be heard thereon, and an
award for the recovery by the party or parties thereto entitled
of their just share in the rents and profits of the real estate in
question." Such an order is, to be sure, final and
appealable. 23
The present rule on the question of finality and appealability
of a decision or order decreeing partition is that it is final and
appealable. 23 The order of partition is a final determination
of the co-ownership over Lot No. 1639 by the parties and the
propriety of the partition thereof. Hence, if the present rule
were applied, the order not having been appealed or
questioned by any of the parties to the case, it has become
final and executory and cannot now be disturbed.
The true test to ascertain whether or not an order or a
judgment is interlocutory or final is: Does it leave something
to be done in the trial court with respect to the merits of the
case? If it does, it is interlocutory; if it does not, it is final. The
key test to what is interlocutory is when there is something
more to be done on the merits of the case. 24 An order for
partition is final and not interlocutory and, hence, appealable
because it decides the rights of the parties upon the issue
submitted. 25
However, this Court notes that the order of partition was
issued when the ruling in Fuentebella
vs. Carrascoso, 26 which held that the order of partition is
interlocutory, was controlling. In addition, the reports of the
commissioners not having been confirmed by the trial court
are not binding. 27 In this case, both the order of partition and
the unconfirmed sketch plan are, thus, interlocutory.
Nevertheless, where parties do not object to the interlocutory
decree, but show by their conduct that they have assented
thereto, they cannot thereafter question the
decree, 28 especially, where, by reason of their conduct,
considerable expense has been incurred in the execution of
the commission. 29Respondents in this case have occupied
their respective lots in accordance with the sketch/subdivision
plan. They cannot after acquiescing to the order for more than
forty (40) years be allowed to question the binding effect
thereof.
This case is to be distinguished from the order in the action
for partition in Arcenas vs. Cinco. 30 In that case, the order
was clearly interlocutory since it required the parties "to
submit the corresponding deed of partition to the Court for its
approval." Here, the order appointed two commissioners and
directed them merely to approve the sketch plan already
existing and tentatively followed by the parties.
Under the present rule, the proceedings of the commissioners
without being confirmed by the court are not binding upon the
parties. 31 However, this rule does not apply in case where
the parties themselves actualized the supposedly
unconfirmed sketch/subdivision plan. The purpose of court
approval is to give effect to the sketch/subdivision plan. In this
case, the parties themselves or through their predecessors-
in-interest implemented the sketch plan made pursuant to a
court order for partition by actually occupying specific portions
of Lot No. 1639 in 1952 and continue to do so until the present
until this case was filed, clearly, the purpose of the court
approval has been met. This statement is not to be taken to
mean that confirmation of the commissioners may be
dispensed with but only that the parties herein are estopped
from raising this question by their own acts of ratification of
the supposedly non-binding sketch/subdivision plan. cdasia
The records of the case show that sometime in 1946 there
was a prior oral agreement to tentatively partition Lot No.
1639. 32 By virtue of this agreement, the original co-owners
occupied specific portions of Lot No. 1639. 33 It was only in
1952 when the petition to subdivide Lot No. 1639 was filed
because two of the co-owners, namely Hermogenes Olis and
heirs of Pascual Olis, refused to have said lot subdivided and
have separate certificates of title. Significantly, after the 1952
proceedings, the parties in this case by themselves and/or
through their predecessors-in-interest occupied specific
portions of Lot No. 1639 in accordance with the sketch plan.
Such possession remained so until this case arose, or about
forty (40) years later.
From its order in 1952, it can be gleaned that the CFI took
notice of the tentative subdivision plan by oral partition of the
parties therein. Further, it appears that said court was aware
that the parties therein actually took possession of the
portions in accordance with the sketch/subdivision plan. With
this factual backdrop, said court ordered the partition and
appointed two (2) commissioners to approve the tentative
sketch/subdivision plan. It would not be unreasonable to
presume that the parties therein, having occupied specific
portions of Lot No. 1639 in accordance with the
sketch/subdivision plan, were aware that it was that same
sketch/subdivision plan which would be considered by the
commissioners for approval. There is no showing that
respondents by themselves or through their predecessors-in-
interest raised any objections. On the contrary, the records
show that the parties continued their possession of the
specific portions of Lot No. 1639 pursuant to the
sketch/subdivision plan.
It has been previously held that a co-owner, who, though not
a party to a partition accepts the partition allotted to him, and
holds and conveys the same in severalty, will not be
subsequently permitted to avoid partition. 34 It follows that a
party to a partition is also barred from avoiding partition when
he has received and held a portion of the subdivided land
especially in this case where respondents have enjoyed
ownership rights over their share for a long time.
Parties to a partition proceeding, who elected to take under
partition, and who took possession of the portion allotted to
them, are estopped to question title to portion allotted to
another party. 35 A person cannot claim both under and
against the same instrument. 36 In other words, they
accepted the lands awarded them by its provisions, and they
cannot accept the decree in part, and repudiate it in part. They
must accept all or none. 37 Parties who had received the
property assigned to them are precluded from subsequently
attacking its validity of any part of it. 38 Here, respondents, by
themselves and/or through their predecessors-in-interest,
already occupied of the lots in accordance with the sketch
plan. This occupation continued until this action was filed.
They cannot now be heard to question the possession and
ownership of the other co-owners who took exclusive
possession of Lot 1639-D also in accordance with the sketch
plan.
In technical estoppel, the party to be estopped must knowingly
have acted so as to mislead his adversary, and the adversary
must have placed reliance on the action and acted as he
would otherwise not have done. Some authorities, however,
hold that what is tantamount to estoppel may arise without this
reliance on the part of the adversary, and this is called,
ratification or election by acceptance of benefits, which arises
when a party, knowing that he is not bound by a defective
proceeding, and is free to repudiate it if he will, upon
knowledge, and while under no disability, chooses to adopt
such defective proceeding as his own. 39 Ratification means
that one under no disability, voluntarily adopts and gives
sanction to some unauthorized act or defective proceeding,
which without his sanction would not be binding on him. It is
this voluntary choice, knowingly made, which amounts to a
ratification of what was theretofore unauthorized, and
becomes the authorized act of the party so making the
ratification. 40
The records show that respondents were paying rent for the
use of a portion of Lot No. 1639-D. Had they been of the belief
that they were co-owners of the entire Lot No. 1639 they
would not have paid rent. Respondents attempted to counter
this point by presenting an uncorroborated testimony of their
sole witness to the effect that the amount so paid to Roberto
Maglucot and, subsequently, to Ruperta Salma were for the
payment of real property taxes. We are not persuaded. It is
quite improbable that the parties would be unaware of the
difference in their treatment of their transactions for so long a
time. Moreover, no evidence was ever presented to show that
a tax declaration for the entire Lot No. 1639 has ever been
made. Replete in the records are tax declarations for specific
portions of Lot 1639. It is inconceivable that respondents
would not be aware of this. With due diligence on their part,
they could have easily verified this fact. This they did not do
for a period spanning more than four decades.
The payment of rentals by respondents reveal that they are
mere lessees. As such, the possession of respondents over
Lot No. 1639-D is that of a holder and not in the concept of an
owner. One who possesses as a mere holder acknowledges
in another a superior right which he believes to be ownership,
whether his belief be right or wrong. 41 Since the possession
of respondents were found to be that of lessors of petitioners,
it goes without saying that the latter were in possession of Lot
No. 1639-D in the concept of an owner from 1952 up to the
time the present action was commenced.
Partition may be inferred from circumstances sufficiently
strong to support the presumption. 42 Thus, after a long
possession in severalty, a deed of partition may be
presumed. 43 It has been held that recitals in deeds,
possession and occupation of land, improvements made
thereon for a long series of years, and acquiescence for 60
years, furnish sufficient evidence that there was an actual
partition of land either by deed or by proceedings in the
probate court, which had been lost and were not
recorded. 44 And where a tract of land held in common has
been subdivided into lots, and one of the lots has long been
known and called by the name of one of the tenants in
common, and there is no evidence of any subsequent claim
of a tenancy in common, it may fairly be inferred that there
has been a partition and that such lot was set off to him whose
name it bears. 45
Respondents insist that the absence of any annotation in the
certificate of title showing any partition of Lot No. 1639 and
that OCT No. 6725 has not been canceled clearly indicate that
no partition took place. The logic of this argument is that
unless partition is shown in the title of the subject property,
there can be no valid partition or that the annotation in the title
is the sole evidence of partition.
Again, we are not persuaded. The purpose of registration is
to notify and protect the interests of strangers to a given
transaction, who may be ignorant thereof, but the non-
registration of the deed evidencing such transaction does not
relieve the parties thereto of their obligations
thereunder. 46 As originally conceived, registration is merely
a species of notice. The act of registering a document is never
necessary in order to give it legal effect as between the
parties. 47 Requirements for the recording of the instruments
are designed to prevent frauds and to permit and require the
public to act with the presumption that recorded instruments
exist and are genuine. 48
It must be noted that there was a prior oral partition in 1946.
Although the oral agreement was merely tentative, the facts
subsequent thereto all point to the confirmation of said oral
partition. By virtue of that agreement, the parties took
possession of specific portions of the subject lot. The action
for partition was instituted because some of the co-owners
refused to have separate titles issued in lieu of the original
title. In 1952, an order for partition was issued by the cadastral
court. There is no evidence that there has been any change
in the possession of the parties. The only significant fact
subsequent to the issuance of the order of partition in 1952 is
that respondents rented portions of Lot No. 1639-D. It would
be safe to conclude, therefore, that the oral partition as well
as the order of partition in 1952 were the bases for the finding
of actual partition among the parties. The legal consequences
of the order of partition in 1952 having been discussed
separately, we now deal with oral partition in 1946. Given that
the oral partition was initially tentative, the actual possession
of specific portions of Lot No. 1639 in accordance with the oral
partition and the continuation of such possession for a very
long period indicate the permanency and ratification of such
oral partition. The validity of an oral partition is already well-
settled. In Espina vs. Abaya, 49 we declared that an oral
partition is valid. In Hernandez vs. Andal, 50 reiterated in Tan
vs. Lim, 51 this Court has ruled, thus:
On general principle, independent and in spite of the statute
of frauds, courts of equity have enforce oral partition when it
has been completely or partly performed.
Regardless of whether a parol partition or agreement to
partition is valid and enforceable at law, equity will proper
cases where the parol partition has actually been
consummated by the taking of possession in severalty and the
exercise of ownership by the parties of the respective portions
set off to each, recognize and enforce such parol partition and
the rights of the parties thereunder. Thus, it has been held or
stated in a number of cases involving an oral partition under
which the parties went into possession, exercised acts of
ownership, or otherwise partly performed the partition
agreement, that equity will confirm such partition and in a
proper case decree title in accordance with the possession in
severalty. cdphil
In numerous cases it has been held or stated that parol
partition may be sustained on the ground of estoppel of the
parties to assert the rights of a tenant in common as to parts
of land divided by parol partition as to which possession in
severalty was taken and acts of individual ownership were
exercised. And a court of equity will recognize the agreement
and decree it to be valid and effectual for the purpose of
concluding the right of the parties as between each other to
hold their respective parts in severalty.
A parol partition may also be sustained on the ground that the
parties thereto have acquiesced in and ratified the partition by
taking possession in severalty, exercising acts of ownership
with respect thereto, or otherwise recognizing the existence
of the partition.
A number of cases have specifically applied the doctrine of
part performance, or have stated that a part performance is
necessary, to take a parol partition out of the operation of the
statute of frauds. It has been held that where there was a
partition in fact between tenants in common, and a part
performance, a court of equity would have regard to enforce
such partition agreed to by the parties.
Two more points have constrained this Court to rule against
respondents. First, respondents Wilfreda Maglucot-Alejo and
Constancio Alejo offered to buy the share of Roberto
Maglucot. Second, the tax declarations contain statements
that the houses of respondents were built on the land owned
by Roberto Maglucot.
On the first point, petitioners presented Aida Maglucot who
testified that after respondents were informed that petitioners
were going to use Lot No. 1639-D belonging to Roberto
Maglucot, respondents Wilfreda Maglucot-Alejo and
Constancio Alejo went to the house of said witness and
offered to buy the share of Roberto Maglucot. 52 Aida
Maglucot further testified that they refused the offer because
they also intend to use the lot for a residential
purpose. 53 This testimony of Aida Maglucot is unrebutted by
respondents, and the CA did not touch upon this finding of
fact. Hence, the offer to buy has been established by the
unrebutted evidence of the petitioners. Why would they give
such offer if they claim to be at least a co-owner of the said
lot? In effect, respondents impliedly admit the title of the
petitioners and that they are not co-owners, much less the
sole owners, of Lot No. 1639-D.
On the second point, the existence of Tax Declaration No. 04-
557 in the names of Constancio Alejo and Godofreda
Maglucot, 54 Tax Declaration No. 04-87-13 in the names of
Leopoldo Maglucot and Regina Barot, 55 Tax Declaration No.
04-593 in the names of Severo Maglucot and Samni
Posida 56 showing that the houses of the above-mentioned
persons are constructed on the land of Roberto
Maglucot 57 constitute incontrovertible evidence of admission
by the same persons of the ownership of the land by Roberto
Maglucot. Tax Declarations are public documents. Unless
their veracity is directly attacked, the contents therein are
presumed to be true and accurate. 58 The lone testimony of
Severo Maglucot that Roberto Maglucot was only made to
appear as owner of the land in their respective declarations
because he was the administrator of Lot No. 1639 is
uncorroborated and not supported by any other evidence.
No injustice is dealt upon respondents because they are
entitled to occupy a portion of Lot No. 1639, particularly Lot
No. 1639-A, in their capacity as heirs of Tomas Maglucot, one
of the original co-owners of Lot No. 1639 in accordance with
the sketch plan of said lot showing the partition into six
portions. 59
Finally, this Court takes notice of the language utilized by
counsel for petitioners in their petition for review on certiorari.
Thrice in the petition, counsel for petitioners made reference
to the researcher of the CA. First, he alluded to the lack of
scrutiny of the records and lack of study of the law "by the
researcher." 60 Second, he cited the researcher of the CA as
having "sweepingly stated without reference to the
record" 61 that "[w]e have scanned the records on hand and
found no evidence of any partition." Finally, counsel for
petitioners assailed the CA decision, stating that "this will only
show that there was no proper study of the case by the
researcher." 62
Any court when it renders a decision does so as an arm of the
justice system and as an institution apart from the persons
that comprise it. Decisions are rendered by the courts and not
the persons or personnel that may participate therein by virtue
of their office. It is highly improper and unethical for counsel
for petitioners to berate the researcher in his appeal. Counsel
for petitioner should be reminded of the elementary rules of
the legal profession regarding respect for the courts by the
use of proper language in its pleadings and admonished for
his improper references to the researcher of the CA in his
petition. A lawyer shall abstain from scandalous, offensive, or
menacing language or behavior before the courts. 63
WHEREFORE, the petition is GRANTED the decision of the
Court of Appeals is SET ASIDE and the decision of the
Regional Trial Court is hereby REINSTATED. dctai
SO ORDERED.
||| (Maglucot-Aw v. Maglucot, G.R. No. 132518, [March 28,
2000], 385 PHIL 720-742)
Cequena v. Bolante 330 SCRA 216
THIRD DIVISION
[G.R. No. 137944. April 6, 2000.]
FERNANDA MENDOZA CEQUENA and RUPERTA
MENDOZA LIRIO, petitioners, vs. HONORATA MENDOZA
BOLANTE, respondent.
Romeo M. Flores for petitioners.
Public Attorney's Office for respondent.
SYNOPSIS
On October 15, 1975, respondent Honorata Bolante and
Miguel Mendoza, brother of petitioners, had a dispute on the
ownership of the land during the cadastral survey. Because of
this dispute, herein petitioners filed a civil case against
respondent claiming ownership and possession of the parcel
of land in question. After trial, the court a quo rendered its
judgment in favor of petitioners awarding the questioned
property to petitioners and ordered herein respondent to
vacate the property subject of the case and deliver
possession thereof to the heirs of Margarito Mendoza.
Aggrieved by the decision, respondent filed an appeal to the
Court of Appeals. The appellate court reversed the trial court's
decision. Hence, this Petition.
The Supreme Court found the petition not meritorious. The
Court ruled that the appellate court was correct in not giving
credence to the affidavit presented by the petitioner for the
reason that it cannot be admitted as an exception to the
hearsay rule under the dead man's statute. Likewise, the
affidavit cannot be considered an ancient document as the
petitioner failed to explain how the purported signature of one
of the respondents could have been affixed as she was an
illiterate woman who had never had any formal schooling. Tax
declarations and receipts are not conclusive evidence of
ownership. At most, they constitute mere prima facie proof of
ownership or possession of the property for which taxes had
been paid. In the absence of actual public and adverse
possession, the declaration of the land for tax purposes does
not prove ownership. In sum, the petitioners' claim of
ownership of the whole parcel has no legal basis. Accordingly,
the Court denied the petition and the assailed decision and
resolution of the appellate court were affirmed. EHSADa
SYLLABUS
1. REMEDIAL LAW; EVIDENCE; HEARSAY RULE; DEAD
MAN'S STATUTE; REQUISITES; A DECLARATION
AGAINST INTEREST IS NOT ADMISSIBLE IF THE
DECLARANT IS AVAILABLE TO TESTIFY AS WITNESS.
Before a private document offered as authentic can be
received in evidence, its due execution and authenticity must
be proved first. And before a document is admitted as an
exception to the hearsay rule under the Dead Man's Statute,
the offeror must show (a) that the declarant is dead, insane or
unable to testify; (b) that the declaration concerns a fact
cognizable by the declarant; (c) that at the time the declaration
was made, he was aware that the same was contrary to his
interest; and (d) that circumstances render improbable the
existence of any motive to falsify. In this case, one of the
affiants happens to be the respondent, who is still alive and
who testified that the signature in the affidavit was not hers. A
declaration against interest is not admissible if the declarant
is available to testify as a witness. Such declarant should be
confronted with the statement against interest as a prior
inconsistent statement.
2. ID.; ID.; ANCIENT DOCUMENT; AFFIDAVIT;
REQUISITES TO BE CONSIDERED AN ANCIENT
DOCUMENT; AN AFFIDAVIT DOES NOT AUTOMATICALLY
BECOME A PUBLIC DOCUMENT JUST BECAUSE IT
CONTAINS A NOTARIAL JURAT. The affidavit cannot be
considered an ancient document either. An ancient document
is one that is (1) more than 30 years old, (2) found in the
proper custody, and (3) unblemished by any alteration or by
any circumstance of suspicion. It must on its face appear to
be genuine. The petitioners herein failed, however, to explain
how the purported signature of Eduarda Apiado could have
been affixed to the subject affidavit if, according to the
witness, she was an illiterate woman who never had any
formal schooling. This circumstance casts suspicion on its
authenticity. Not all notarized documents are exempted from
the rule on authentication. Thus, an affidavit does not
automatically become a public document just because it
contains a notarial jurat. Furthermore, the affidavit in question
does not state how the ownership of the subject land was
transferred from Sinforoso Mendoza to Margarito Mendoza.
By itself, an affidavit is not a mode of acquiring ownership.
3. CIVIL LAW; PROPERTY; OWNERSHIP; BASIS OF A
CLAIM FOR OWNERSHIP THROUGH PRESCRIPTION.
Ownership of immovable property is acquired by ordinary
prescription through possession for ten years. Being the sole
heir of her father, respondent showed through his tax receipt
that she had been in possession of the land for more than ten
years since 1932. When her father died in 1930, she
continued to reside there with her mother. When she got
married, she and her husband engaged in kaingin inside the
disputed lot for their livelihood. Respondent's possession was
not disturbed until 1953 when the petitioners' father claimed
the land. But by then, her possession, which was in the
concept of owner public, peaceful, and uninterrupted
had already ripened into ownership. Furthermore she herself,
after her father's demise, declared and paid realty taxes for
the disputed land. Tax receipts and declarations of ownership
for taxation, when coupled with proof of actual possession of
the property, can be the basis of a claim for ownership through
prescription.
4. ID.; ID.; ID.; CANNOT BE ACQUIRED BY MERE
OCCUPATION. In contrast, the petitioners, despite thirty-
two years of farming the subject land, did not acquire
ownership. It is settled that ownership cannot be acquired by
mere occupation. Unless coupled with the element of hostility
toward the true owner, occupation and use, however long, will
not confer title by prescription or adverse possession.
Moreover, the petitioners cannot claim that their possession
was public, peaceful and uninterrupted. Although their father
and brother arguably acquired ownership through
extraordinary prescription because of their adverse
possession for thirty-two years (1953-1985), this supposed
ownership cannot extend to the entire disputed lot, but must
be limited to the portion that they actually farmed. We cannot
sustain the petitioners' contention that their ownership of the
disputed land was established before the trial court through
the series of tax declarations and receipts issued in the name
of Margarito Mendoza. Such documents prove that the holder
has a claim of title over the property. Aside from manifesting
a sincere desire to obtain title thereto, they announce the
holder's adverse claim against the state and other interested
parties.
5. ID.; ID.; ID.; TAX DECLARATIONS AND RECEIPTS ARE
NOT CONCLUSIVE EVIDENCE OF OWNERSHIP.
However, tax declarations and receipts are not conclusive
evidence of ownership. At most, they constitute mere prima
facie proof of ownership or possession of the property for
which taxes have been paid. In the absence of actual public
and adverse possession, the declaration of the land for tax
purposes does not prove ownership. In sum, the petitioners'
claim of ownership of the whole parcel has no legal basis.
DECISION
PANGANIBAN, J p:
Tax receipts and declarations are prima facie proofs of
ownership or possession of the property for which such taxes
have been paid. Coupled with proof of actual possession of
the property, they may become the basis of a claim for
ownership. By acquisitive prescription, possession in the
concept of owner public, adverse, peaceful and
uninterrupted may be converted to ownership. On the other
hand, mere possession and occupation of land cannot ripen
into ownership.
The Case
Before us is a Petition for Review on Certiorari of the March
19, 1999 Decision 1 of the Court of Appeals 2 (CA) in CA-GR
CV No. 43423. The assailed Decision disposed as follows: 3
"WHEREFORE, for all the foregoing, the decision of the trial
court appealed from is REVERSED and SET ASIDE. In lieu
thereof, judgment is hereby rendered declaring . . . Honorata
Mendoza Bolante the rightful owner and possessor of the
parcel of land which is the subject of this appeal."
The Facts
The Petition herein refers to a parcel of land situated in
Barangay Bangad, Binangonan, Province of Rizal, having an
area of 1,728 square meters and covered by Tax Declaration
No. 26-0027. LLjur
The undisputed antecedents of this case are narrated by the
Court of Appeals as follows: 4
"The facts not disputed revealed that prior to 1954, the land
was originally declared for taxation purposes in the name of
Sinforoso Mendoza, father of [respondent] and married to
Eduarda Apiado. Sinforoso died in 1930. [Petitioners] were
the daughters of Margarito Mendoza. On the basis of an
affidavit, the tax declaration in the name of Sinforoso
Mendoza of the contested lot was cancelled and subsequently
declared in the name of Margarito Mendoza. Margarito and
Sinforoso are brothers. [Respondent] is the present occupant
of the land. Earlier, on October 15, 1975, [respondent] and
Miguel Mendoza, another brother of [petitioners], during the
cadastral survey had a dispute on [the] ownership of the land.
"During the pre-trial conference, parties stipulated the
following facts:
1) The land subject of the case was formerly declared for
taxation purposes in the name of Sinforoso Mendoza prior to
1954 but is now declared in the name of Margarito Mendoza.
2) The parties agree[d] as to the identity of the land subject
of instant case.
3) [Petitioners] are the daughters of Margarito Mendoza while
the [respondent] is the only daughter of Sinforoso Mendoza.
'4) Margarito Mendoza and Sinforoso Mendoza [were]
brothers, now deceased.
5) During the cadastral survey of the property on October 15,
1979 there was already a dispute between Honorata M.
Bolante and Miguel Mendoza, brother of [petitioners].
6) [Respondent was] occupying the property in question.
The only issue involved [was] who [was] the lawful owner and
possessor of the land subject of the case.
"After trial, the court a quo rendered its judgment in favor of
[petitioners], the dispositive portion of which reads as follows:
Wherefore, in view of the foregoing considerations, judgment
is hereby rendered for the [petitioners] and against the
[respondent]:
1. Declaring that the parcel of land situated in Bangad,
Binangonan, Rizal covered by tax declaration no. 26-0027 in
the name of Margarito Mendoza belong to his heirs, the
[petitioners] herein;
2. Ordering [respondent] to vacate the property subject of the
case and deliver possession thereof to the heirs of Margarito
Mendoza.
3. Ordering the [respondent] to indemnify the [petitioners] in
the sum of P10,000.00, as actual damages.
4. Ordering the [respondent] to pay the costs."
Ruling of the Court of Appeals
The Court of Appeals reversed the trial court because the
genuineness and the due execution of the affidavit allegedly
signed by the respondent and her mother had not been
sufficiently established. The notary public or anyone else who
had witnessed the execution of the affidavit was not
presented. No expert testimony or competent witness ever
attested to the genuineness of the questioned signatures.
The CA further ruled that the affidavit was insufficient to
overcome the denial of respondent and her mother. The
former testified that the latter, never having attended school,
could neither read nor write. Respondent also said that she
had never been called "Leonor," which was how she was
referred to in the affidavit.
Moreover, the appellate court held that the probative value of
petitioners' tax receipts and declarations paled in comparison
with respondent's proof of ownership of the disputed parcel.
Actual, physical, exclusive and continuous possession by
respondent since 1985 indeed gave her a better title under
Article 538 of the Civil Code.
Hence, this Petition. 5
Issues
Insisting that they are the rightful owners of the disputed land,
the petitioners allege that the CA committed these reversible
errors: 6
"1. . . . [I]n not considering the affidavit as an exception to the
general rule that an affidavit is classified as hearsay evidence,
unless the affiant is placed on the witness stand; and
"2. . . . [I]n holding that respondent has been in actual and
physical possession, coupled with . . . exclusive and
continuous possession of the land since 1985, which are
evidence of the best kind of circumstance proving the claim of
the title of ownership and enjoys the presumption of preferred
possessor."
The Court's Ruling
The Petition has no merit.
First Issue: Admissibility of the Affidavit
Petitioners dispute the CA's ruling that the affidavit was not
the best evidence of their father's ownership of the disputed
land, because the "affiant was not placed on the witness
stand." They contend that it was unnecessary to present a
witness to establish the authenticity of the affidavit because it
was a declaration against respondent's interest and was an
ancient document. As a declaration against interest, it was an
exception to the hearsay rule. As a necessary and trustworthy
document, it was admissible in evidence. And because it was
executed on March 24, 1953, it was a self-authenticating
ancient document. LexLib
We quote below the pertinent portion of the appellate court's
ruling: 7
"While it is true that the affidavit was signed and subscribed
before a notary public, the general rule is that affidavits are
classified as hearsay evidence, unless affiants are placed on
the witness stand (People's Bank and Trust Company vs.
Leonidas, 207 SCRA 164). Affidavits are not considered the
best evidence, if affiants are available as witnesses (Vallarta
vs. Court of Appeals, 163 SCRA 587). The due execution of
the affidavit was not sufficiently established. The notary public
or others who saw that the document was signed or at least
[could] confirm its recitals [were] not presented. There was no
expert testimony or competent witness who attested to the
genuineness of the questioned signatures. Worse,
[respondent] denied the genuineness of her signature and
that of her mother . . . [Respondent] testified that her mother
was an illiterate and as far as she knew her mother could not
write because she had not attended school (p. 7, ibid). Her
testimony was corroborated by Ma. Sales Bolante Basa, who
said the [respondent's] mother was illiterate."
The petitioners' allegations are untenable. Before a private
document offered as authentic can be received in evidence,
its due execution and authenticity must be proved first. 8 And
before a document is admitted as an exception to the hearsay
rule under the Dead Man's Statute, the offeror must show (a)
that the declarant is dead, insane or unable to testify; (b) that
the declaration concerns a fact cognizable by the declarant;
(c) that at the time the declaration was made, he was aware
that the same was contrary to his interest; and (d) that
circumstances render improbable the existence of any motive
to falsify. 9
In this case, one of the affiants happens to be the respondent,
who is still alive and who testified that the signature in the
affidavit was not hers. A declaration against interest is not
admissible if the declarant is available to testify as a
witness. 10 Such declarant should be confronted with the
statement against interest as a prior inconsistent statement.
The affidavit cannot be considered an ancient document
either. An ancient document is one that is (1) more than 30
years old, (2) found in the proper custody, and (3)
unblemished by any alteration or by any circumstance of
suspicion. 11 It must on its face appear to be genuine. The
petitioners herein failed, however, to explain how the
purported signature of Eduarda Apiado could have been
affixed to the subject affidavit if, according to the witness, she
was an illiterate woman who never had any formal schooling.
This circumstance casts suspicion on its authenticity.
Not all notarized documents are exempted from the rule on
authentication. Thus, an affidavit does not automatically
become a public document just because it contains a notarial
jurat. Furthermore, the affidavit in question does not state how
the ownership of the subject land was transferred from
Sinforoso Mendoza to Margarito Mendoza. By itself, an
affidavit is not a mode of acquiring ownership.
Second Issue: Preference of Possession
The CA ruled that the respondent was the preferred
possessor under Article 538 of the Civil Code because she
was in notorious, actual, exclusive and continuous
possession of the land since 1985. Petitioners dispute this
ruling. They contend that she came into possession through
force and violence, contrary to Article 536 of the Civil Code.
We concede that despite their dispossession in 1985, the
petitioners did not lose legal possession because possession
cannot be acquired through force or violence. 12 To all intents
and purposes, a possessor, even if physically ousted, is still
deemed the legal possessor. 13 Indeed, anyone who can
prove prior possession, regardless of its character, may
recover such possession. 14
However, possession by the petitioners does not prevail over
that of the respondent. Possession by the former before 1985
was not exclusive, as the latter also acquired it before 1985.
The records show that the petitioners father and brother, as
well as the respondent and her mother were simultaneously
in adverse possession of the land.
Before 1985, the subject land was occupied and cultivated by
the respondent's father (Sinforoso), who was the brother of
petitioners' father (Margarito), as evidenced by Tax
Declaration No. 26425. 15 When Sinforoso died in 1930,
Margarito took possession of the land and cultivated it with his
son Miguel. At the same time, respondent and her mother
continued residing on the lot.
When respondent came of age in 1948, she paid realty taxes
for the years 1932-1948. 16 Margarito declared the lot for
taxation in his name in 1953 17 and paid its realty taxes
beginning 1952. 18 When he died, Miguel continued
cultivating the land. As found by the CA, the respondent and
her mother were living on the land, which was being tilled by
Miguel until 1985 when he was physically ousted by the
respondent. 19
Based on Article 538 of the Civil Code, the respondent is the
preferred possessor because, benefiting from her father's tax
declaration of the subject lot since 1926, she has been in
possession thereof for a longer period. On the other hand,
petitioners' father acquired joint possession only in 1952.
Third Issue: Possession of Better Right
Finally, the petitioners challenge the CA ruling that "actual and
physical coupled with the exclusive and continuous
possession [by respondent] of the land since 1985" proved
her ownership of the disputed land. The respondent argues
that she was legally presumed to possess the subject land
with a just title since she possessed it in the concept of
owner. Under Article 541 of the Code, she could not be
obliged to show or prove such title.
The respondent's contention is untenable. The presumption
in Article 541 of the Civil Code is merely disputable; it prevails
until the contrary is proven. 20 That is, one who is disturbed
in one's possession shall, under this provision, be restored
thereto by the means established by law. 21 Article 538
settles only the question of possession, and possession is
different from ownership. Ownership in this case should be
established in one of the ways provided by law.
To settle the issue of ownership, we need to determine who
between the claimants has proven acquisitive prescription. 22
Ownership of immovable property is acquired by ordinary
prescription through possession for ten years. 23 Being the
sole heir of her father, respondent showed through his tax
receipt that she had been in possession of the land for more
than ten years since 1932. When her father died in 1930, she
continued to reside there with her mother. When she got
married, she and her husband engaged in kaingin inside the
disputed lot for their livelihood. 24
Respondent's possession was not disturbed until 1953 when
the petitioners' father claimed the land. But by then, her
possession, which was in the concept of owner public,
peaceful, and uninterrupted 25 had already ripened into
ownership. Furthermore she herself, after her father's demise,
declared and paid realty taxes for the disputed land. Tax
receipts and declarations of ownership for taxation, when
coupled with proof of actual possession of the property, can
be the basis of a claim for ownership through prescription. 26
In contrast, the petitioners, despite thirty-two years of farming
the subject land, did not acquire ownership. It is settled that
ownership cannot be acquired by mere occupation. 27Unless
coupled with the element of hostility toward the true
owner, 28 occupation and use, however long, will not confer
title by prescription or adverse possession. Moreover, the
petitioners cannot claim that their possession was public,
peaceful and uninterrupted. Although their father and brother
arguably acquired ownership through extraordinary
prescription because of their adverse possession for thirty-two
years (1953-1985), 29 this supposed ownership cannot
extend to the entire disputed lot, but must be limited to the
portion that they actually farmed.
We cannot sustain the petitioners' contention that their
ownership of the disputed land was established before the
trial court through the series of tax declarations and receipts
issued in the name of Margarito Mendoza. Such documents
 prove that the holder has a claim of title over the property.
Aside from manifesting a sincere desire to obtain title thereto,
they announce the holder's adverse claim against the state
and other interested parties. 30
However, tax declarations and receipts are not conclusive
evidence of ownership. 31 At most, they constitute
mere prima facie proof of ownership or possession of the
property for which taxes have been paid. 32 In the absence of
actual public and adverse possession, the declaration of the
land for tax purposes does not prove ownership. 33 In sum,
the petitioners' claim of ownership of the whole parcel has no
legal basis.
WHEREFORE, the Petition is DENIED and the assailed
Decision and Resolution AFFIRMED. Costs against
petitioners. LibLex
SO ORDERED.
||| (Cequena v. Bolante, G.R. No. 137944, [April 6, 2000], 386
PHIL 419-431)
B. Loss of Possession (Art. 555)
CASES:
Aragon v. Insular Government 19 Phil. 223
EN BANC
[G.R. No. L-6019. March 25, 1911.]
JUAN N. ARAGON, petitioner-appellee, vs. THE INSULAR
GOVERNMENT, oppositor-appellant.
Attorney-General Villamor for appellant.
Ariston Estrada for appellee.
SYLLABUS
1. REALTY; ABANDONMENT OF PROPERTY; TIDE-WATER
LANDS; OWNERSHIP. Held, That the facts proven and set out
in the opinion do not establish the abandonment of possession of
the land in controversy, under a claim of ownership, nor its total
deduction by the erosive action of the sea, so as to establish the
loss of possession thereof under the provisions of article 460 of
the Civil Code.
DECISION
CARSON, J p:
This is an appeal from a decree of the Court of Land Registration
adjudicating title to a small lot or parcel of land in the city of Manila
in favor of the appellees and ordering its registry in accordance
with the provisions of "The Land Registration Act."
The Government of the Philippine Islands , through its proper
representatives, objected to the application for registry on the
ground that, as it alleges, the land in question is a part of the public
domain, as defined in subsection 1, article 339, of the Civil Code,
which is as follows:
ART. 339. Property of public ownership is
1. That destined to the public use, such as roads, canals, rivers,
torrents, ports, and bridges constructed by the State, and banks,
shores, roadsteads, and that of a similar character.
and also as defined in article 1 of "The Law of Waters" (Ley de
Aguas) of the 3d of August, 1886, which is as follows:
The following belong to the national domain and are for the public
use:
xxx xxx xxx
3. The shores. "Shore" is understood to be that space which is
alternatively covered and uncovered by water with the movement
of the tides. Its interior or terrestial limit is marked by the lone
reached by the highest tides and equinoctials. Where the tides are
not perceptible the shore begins at the line reached by the water
during tempests and ordinary storms.
The evidence of record leaves no room for doubt that, as alleged
by the opponent, the land in question, at the time when the trial
was had in the court below, was so located that at high tide it was
completely covered by the waters of the Bay of Manila, though the
receding waters left it completely bare at low tide. It can not be
denied, therefore, that if there were no other evidence of record,
touching the physical status of this land or title thereto, the
contention of the Government would necessarily be sustained.
It appears, however, that in the year 1892 a possessory title to the
land in question was duly registered in favor of Inocencio Aragon,
one of the predecessors in interest of these applicants; that for a
long period of years, and perhaps from a time beyond which the
memory of man runneth not to the contrary, the applicant and their
predecessors in interest have been in possession of the parcel of
land in question, under and undisputed claim of ownership; that it
is located toward the center of one of the most valuable residential
sections of the city of Manila, and that for many years a house
stood upon this land, and was occupied by some of the
predecessors in interest of the applicants in these proceedings;
that with some relatively small expenditure by way of a "fill" or a
"retaining wall" it would still be a valuable building lot for residential
purposes; that the adjoining lots extend toward the bay to a line
formed by the extension of the outer boundary line of the lot in
question, and that these adjoining lots would be in substantially
the same physical condition, by relation to the ebb and flow of the
tide, as lot in question, but for low retaining walls which protect
them against the incoming sea; that the water which spreads over
the lot in question at high tide is of but little depth, and would be
wholly excluded by a very limited amount of "filling" materials or a
low retaining wall; that there are strong reasons to believe that the
land in question was originally well above the ebb and flow of the
tide; and that only in later years have the waters risen to such a
height along the shores of the Bay of Manila at this point as to
cover the land in question completely at high tide; though it does
not definitely appear whether this is due to changes in the current
and flow of the waters in the bay, or to the gradual sinking of the
land along the coast.
We think that these facts conclusively establish the right of
possession and ownership of the applicants.
Article 446 of the Civil Code is as follows:
"Every possessor has a right to be respected in his possession;
and should he be disturbed therein, he must be protected or
possession must be restored to him by the means established in
the laws of procedure."
Article 460 of that code is as follows:
"ART. 460. The possessor may lose his possession "
"1. By the abandonment of the thing.
"2. By transfer to another for a good or valuable consideration.
"3. By the destruction or total loss of the thing or by the thing
becoming unmarketable.
"4. By the possession of another, even against the will of the
former possessor, if the new possession has lasted more than one
year."
Under these provisions of the code it seems quite clear that if the
Government is justified in disturbing the possession of the
applicants, it can only be on the ground that they have abandoned
their property, or that it has been totally destroyed and has now
become a part of the public domain by the erosive action of the
sea. It is quite clear that applicants have never abandoned their
possession under a claim of ownership of this land. And we think
the facts above stated fully sustain a finding that there has been
no such destructive or total loss of the property as would justify a
holding that the owners have lost possession. Doubtless the
property has been injured by the erosive action of the sea.
Doubtless the owners in order to profitably enjoy the possession
of this property will be compelled to make some relatively small
expenditures by way of a "fill" or a retaining wall. But the actual
condition of the property as it appears from the record makes a
claim that it has been totally lost or destroyed preposterous and
wholly untenable. We need hardly add that if the applicants have
not lost their right of possession, the Government's claim of
ownership, on the ground that this is a part of the playa (shore) of
Manila Bay, necessarily falls to the ground.
We should not be understood, by this decision, to hold that in a
case of gradual encroachment or erosion by the ebb and flow of
the tide, private property may not become "property of public
ownership," as defined in article 339 of the code, where it appears
that the owner has to all intents and purposes abandoned it and
permitted it to be totally destroyed, so as to become a part of the
"playa" (shore of the sea), "rada" (roadstead), or the like. Our ruling
in this case is merely that it affirmatively appears that the owners
of the land in question have never in fact nor in intent abandoned
it, and that keeping in mind its location and actual condition it can
not be said to have been totally destroyed for the purposes for
which it was held by them, so as to have become a part of the
playa (shore) of the Bay of Manila.
The decree entered by the lower court should be affirmed, with the
costs of this instance against the appellant. It is so ordered.
||| (Aragon v. Insular Government, G.R. No. L-6019, [March 25,
1911], 19 PHIL 223-227)
Catholic Vicar Apostolic of the Mountain Province V. CA 183
SCRA 639
FIRST DIVISION
[G.R. Nos. 80294-95. March 23, 1990.]
CATHOLIC VICAR APOSTOLIC OF THE MOUNTAIN
PROVINCE, petitioner, vs. COURT OF APPEALS, HEIRS OF
EGMIDIO OCTAVIANO and JUAN VALDEZ, respondents.
Valdez, Ereso, Polido & Associates for petitioner.
Sabino Padilla, Jr. collaborating counsel for petitioner.
Jaime G. de Leon for the Heirs of E. Octaviano.
Fernando P. Cabato for the Heirs of Juan Valdez.
SYLLABUS
CIVIL LAW; POSSESSION; REAL RIGHT TO POSSESS
EXTINGUISHED AFTER THE LAPSE OF TEN (10) YEARS.
Article 555 of the Civil Code provides as follows: "Art. 555. A
possessor may lose his possession: (1) By the abandonment of
the thing; (2) By an assignment made to another either by onerous
or gratuitous title; (3) By the destruction or total loss of the thing or
because it goes out of commerce; (4) By the possession of
another, subject to the provisions of Article 537, if the new
possession has lasted longer than one year. But the real right of
possession is not lost till after the lapse of ten years. (460a)" From
the foregoing provision of the law, particularly paragraph 4 thereof,
it is clear that the real right of possession of private respondents
over the property was lost or no longer exists after the lapse of 10
years that petitioner had been in adverse possession thereof.
Thus, the action for recovery of possession of said property filed
by private respondents against petitioner must fail.
RESOLUTION
GANCAYCO, J p:
Before the Court are a motion for reconsideration and a
supplemental motion for reconsideration filed by petitioner relating
to the decision of the Court dated September 21, 1988. The
comment and opposition thereto have been filed by the private
respondents and a reply was filed by petitioner.
Petitioner argues that the findings of facts of the Court of Appeals
in CA-G.R. No. 38830-R are: (1) contrary to the law; (2) contrary
to the findings of the trial court; (3) contrary to the findings of the
Court of Appeals in CA-G.R. No. 08890-R; (4) contrary to the
admissions of the parties; and (5) based on a clear
misapprehension of historical and ecclesiastical facts made of
judicial notice, which are well within the exceptions consistently
adhered to by this Court as in Republic vs. Court of Appeals. 1
The Court finds no merit in this contention. The said decision of
the Court of Appeals dated May 4, 1977 in CA-G.R. No. 38830-R
was already elevated to this Court by petitioner through a petition
for review in G.R. No. L-46832 entitled Catholic Vicar Apostolic of
the Mountain Province vs. Court of Appeals and Heirs of Egmidio
Octaviano, while the heirs of Juan Valdez and Pacita Valdez also
filed a petition for review of the same decision in this Court
docketed as G.R. No. L-46872 entitled Heirs of Juan Valdez and
Pacita Valdez vs. CA, et al. In a minute resolution dated January
13, 1978, this Court denied both petitions for lack of merit. cdrep
It is in said petition for review wherein the petitioner should have
questioned the findings of facts of the appellate court in CA-G.R.
No. 38830-R but since said petition had been denied outright, the
aforestated decision of the appellate court which has long become
final and executory, is res judicata as between the parties and the
findings of facts therein are conclusive. Thus, the factual findings
in said final judgment cannot be reviewed anew in the present
proceedings.
The relevant question that should now be asked is, considering
the aforestated decision of the appellate court and guided by the
findings of facts therein, who is entitled to the possession of the
lots in question? Who owns these lots?
CA-G.R. No. 38830-R was a land registration case where
petitioner and private respondents were asking for confirmation of
their alleged imperfect titles to the lots in question under Section
49 (b) of the Public Land Act. 2
In the said decision, the appellate court found that the petitioner
was not entitled to confirmation of its imperfect title to Lots 2 and
3. In separate motions for reconsideration filed by private
respondents Heirs of Octaviano and Heirs of Juan Valdez relating
to the same decision, they also asked that said two lots be
registered in their names. On August 12, 1977, the Court of
Appeals denied both motions. Effectively, therefore, in the said
decision the appellate court ruled that neither the petitioner nor the
private respondents are entitled to the confirmation of imperfect
title over said two lots. That is now res judicata.
What is the nature of these two lots? Pursuant to the said decision
in CA-G.R. No. 38830-R, the two lots in question remained part of
the public lands. This is the only logical conclusion when the
appellate court found that neither the petitioner nor private
respondents are entitled to confirmation of imperfect title over said
lots. LLpr
Hence, the Court finds the contention of petitioner to be well-taken
in that the trial court and the appellate court have no lawful basis
in ordering petitioner to return and surrender possession of said
lots to private respondents. Said property being a public land its
disposition is subject to the provision of the Public Land Act, as
amended. 3
The present actions that were instituted in the Regional Trial Court
by private respondents are actions for recovery of possession
(accion publiciana) and not for recovery of ownership (accion
reivindicatoria).
In the aforestated decision of the appellate court in CA-G.R. No.
38830-R, the following are among the findings of facts:
"9th. The totality of foregoing together with evidence of oppositors
must convince this Court that as to lots 2 and 3, it was oppositors
who were possessors under bona fide claim of ownership thru their
predecessors since around 1906; and that appellee came in only
in the concept of a borrower in commodatum, but that appellee
took it upon itself to claim and repudiate the trust sometime in
1951, and since from that time at least, possession of oppositors
had been interrupted, neither can they claim registration under
Sec. 48, par. b of the Public Land Law, Com. Act 141, as amended
by R.A. 1942; this must be the final result, and there would be no
more need to rule on the errors impugning the personality of
appellee to secure registration;" 4
From the foregoing, it appears that the petitioner was in
possession of the said property as borrower in commodatum from
private respondents since 1906 but in 1951 petitioner repudiated
the trust when it declared the property for tax purposes under its
name. When it filed its application for registration of the said
property in 1962, petitioner had been in adverse possession of the
same for at least 11 years. prLL
Article 555 of the Civil Code provides as follows:
"Art. 555. A possessor may lose his possession:
(1) By the abandonment of the thing;
(2) By an assignment made to another either by onerous or
gratuitous title;
(3) By the destruction or total loss of the thing or because it goes
out of commerce;
(4) By the possession of another, subject to the provisions of
Article 537, if the new possession has lasted longer than one
year. But the real right of possession is not lost till after the lapse
of ten years. (460a)" (Emphasis supplied.).
From the foregoing provision of the law, particularly paragraph 4
thereof, it is clear that the real right of possession of private
respondents over the property was lost or no longer exists after
the lapse of 10 years that petitioner had been in adverse
possession thereof. Thus, the action for recovery of possession of
said property filed by private respondents against petitioner must
fail.
The Court, therefore, finds that the trial court and the Court of
Appeals erred in declaring the private respondents to be entitled
to the possession thereof. Much less can they pretend to be
owners thereof. Said lots are part of the public domain. LLjur
WHEREFORE, the motion for reconsideration is GRANTED and
the decision of this Court dated September 21, 1988 is hereby set
aside and another judgment is hereby rendered reversing and
setting aside the decision of the appellate court in CA-G.R. Nos.
05148-49 dated August 31, 1987 and dismissing the complaints
for recovery of possession, without pronouncement as to costs.
SO ORDERED.
||| (Catholic Vicar Apostolic of the Mountain Province v. Court of
Appeals, G.R. Nos. 80294-95 (Resolution), [March 23, 1990], 262
PHIL 698-702)
C.Theory of Irrevindicability (Art. 559)
1. Requisites
2. Exceptions to the Theory of Irrevindicability
CASES:
EDCA Publishing & Distributing Corp. v. Santos 134 SCRA 614
FIRST DIVISION
[G.R. No. 80298. April 26, 1990.]
EDCA PUBLISHING & DISTRIBUTING
CORP., petitioner, vs. THE SPOUSES LEONOR and
GERARDO SANTOS, doing business under the name and
style of "SANTOS BOOKSTORE," and THE COURT OF
APPEALS, respondents.
Emiliano S. Samson, R. Balderrama-Samson, Mary Anne B.
Samson for petitioner.
Cendaa, Santos, Delmundo & Cendaa for private respondents.
DECISION
CRUZ, J p:
The case before us calls for the interpretation of Article 559 of the
Civil Code and raises the particular question of when a person may
be deemed to have been "unlawfully deprived" of movable
property in the hands of another. The article runs in full as follows:
ART. 559. The possession of movable property acquired in good
faith is equivalent to a title. Nevertheless, one who has lost any
movable or has been unlawfully deprived thereof, may recover it
from the person in possession of the same.
If the possessor of a movable lost or of which the owner has been
unlawfully deprived has acquired it in good faith at a public sale,
the owner cannot obtain its return without reimbursing the price
paid therefor.
The movable property in this case consists of books, which were
bought from the petitioner by an impostor who sold it to the private
respondents. Ownership of the books was recognized in the
private respondents by the Municipal Trial Court, 1 which was
sustained by the Regional Trial Court, 2 which was in turn
sustained by the Court of Appeals. 3 The petitioner asks us to
declare that all these courts have erred and should be reversed.
This case arose when on October 5, 1981, a person identifying
himself as Professor Jose Cruz placed an order by telephone with
the petitioner company for 406 books, payable on
delivery. 4 EDCA prepared the corresponding invoice and
delivered the books as ordered, for which Cruz issued a personal
check covering the purchase price of P8,995.65. 5 On October 7,
1981, Cruz sold 120 of the books to private respondent
Leonor Santos who, after verifying the seller's ownership from the
invoice he showed her, paid him P1,700.00. 6
Meanwhile, EDCA having become suspicious over a second order
placed by Cruz even before clearing of his first check, made
inquiries with the De la Salle College where he had claimed to be
a dean and was informed that there was no such person in its
employ. Further verification revealed that Cruz had no more
account or deposit with the Philippine Amanah Bank, against
which he had drawn the payment check. 7 EDCA then went to the
police, which set a trap and arrested Cruz on October 7, 1981.
Investigation disclosed his real name as Tomas de la Pea and
his sale of 120 of the books he had ordered from EDCA to the
private respondents. 8
On the night of the same date, EDCA sought the assistance of the
police in Precinct 5 at the UN Avenue, which forced their way into
the store of the private respondents and threatened
Leonor Santos with prosecution for buying stolen property. They
seized the 120 books without warrant, loading them in a van
belonging to EDCA, and thereafter turned them over to the
petitioner. 9
Protesting this high-handed action, the private respondents sued
for recovery of the books after demand for their return was rejected
by EDCA. A writ of preliminary attachment was issued and the
petitioner, after initial refusal, finally surrendered the books to the
private respondents. 10 As previously stated, the petitioner was
successively rebuffed in the three courts below and now hopes to
secure relief from us.
To begin with, the Court expresses its disapproval of the arbitrary
action of the petitioner in taking the law into its own hands and
forcibly recovering the disputed books from the private
respondents. The circumstance that it did so with the assistance
of the police, which should have been the first to uphold legal and
peaceful processes, has compounded the wrong even more
deplorably. Questions like the one at bar are decided not by
policemen but by judges and with the use not of brute force but of
lawful writs.
Now to the merits.
It is the contention of the petitioner that the private respondents
have not established their ownership of the disputed books
because they have not even produced a receipt to prove they had
bought the stock. This is unacceptable. Precisely, the first
sentence of Article 559 provides that "the possession of movable
property acquired in good faith is equivalent to a title," thus
dispensing with further proof.
The argument that the private respondents did not acquire the
books in good faith has been dismissed by the lower courts, and
we agree. Leonor Santos first ascertained the ownership of the
books from the EDCA invoice showing that they had been sold to
Cruz, who said he was selling them for a discount because he was
in financial need. Private respondents are in the business of
buying and selling books and often deal with hard-up sellers who
urgently have to part with their books at reduced prices. To
Leonor Santos, Cruz must have been only one of the many such
sellers she was accustomed to dealing with. It is hardly bad faith
for any one in the business of buying and selling books to buy them
at a discount and resell them for a profit.
But the real issue here is whether the petitioner has been
unlawfully deprived of the books because the check issued by the
impostor in payment therefor was dishonored.
In its extended memorandum, EDCA cites numerous cases
holding that the owner who has been unlawfully deprived of
personal property is entitled to its recovery except only where the
property was purchased at a public sale, in which event its return
is subject to reimbursement of the purchase price. The petitioner
is begging the question. It is putting the cart before the horse.
Unlike in the cases invoked, it has yet to be established in the case
at bar that EDCAhas been unlawfully deprived of the books.
The petitioner argues that it was, because the impostor acquired
no title to the books that he could have validly transferred to the
private respondents. Its reason is that as the payment check
bounced for lack of funds, there was a failure of consideration that
nullified the contract of sale between it and Cruz.
The contract of sale is consensual and is perfected once
agreement is reached between the parties on the subject matter
and the consideration. According to the Civil Code: cdll
ART. 1475. The contract of sale is perfected at the moment there
is a meeting of minds upon the thing which is the object of the
contract and upon the price.
From that moment, the parties may reciprocally demand
performance, subject to the provisions of the law governing the
form of contracts.
xxx xxx xxx
ART. 1477. The owner ship of the thing sold shall be transferred
to the vendee upon the actual or constructive delivery thereof.
ART. 1478. The parties may stipulate that ownership in the thing
shall not pass to the purchaser until he has fully paid the price.
It is clear from the above provisions, particularly the last one
quoted, that ownership in the thing sold shall not pass to the buyer
until full payment of the purchase price only if there is a stipulation
to that effect. Otherwise, the rule is that such ownership shall pass
from the vendor to the vendee upon the actual or constructive
delivery of the thing sold even if the purchase price has not yet
been paid.
Non-payment only creates a right to demand payment or to rescind
the contract, or to criminal prosecution in the case of bouncing
checks. But absent the stipulation above noted, delivery of the
thing sold will effectively transfer ownership to the buyer who can
in turn transfer it to another.
In Asiatic Commercial Corporation v. Ang, 11 the plaintiff sold
some cosmetics to Francisco Ang, who in turn sold them to Tan
Sit Bin. Asiatic not having been paid by Ang, it sued for the
recovery of the articles from Tan, who claimed he had validly
bought them from Ang, paying for the same in cash. Finding that
there was no conspiracy between Tan and Ang to deceive Asiatic,
the Court of Appeals declared:
Yet the defendant invoked Article 464 12 of the Civil Code
providing, among other things that "one who has been unlawfully
deprived of personal property may recover it from any person
possessing it." We do not believe that the plaintiff has been
unlawfully deprived of the cartons of Gloco Tonic within the scope
of this legal provision. It has voluntarily parted with them pursuant
to a contract of purchase and sale. The circumstance that the price
was not subsequently paid did not render illegal a transaction
which was valid and legal at the beginning. LLjur
In Tagatac v. Jimenez, 13 the plaintiff sold her car to Feist, who
sold it to Sanchez, who sold it to Jimenez. When the payment
check issued to Tagatac by Feist was dishonored, the plaintiff
sued to recover the vehicle from Jimenez on the ground that she
had been unlawfully deprived of it by reason of Feist's deception.
In ruling for Jimenez, the Court of Appeals held:
The point of inquiry is whether plaintiff-appellant Trinidad C.
Tagatac has been unlawfully deprived of her car. At first blush, it
would seem that she was unlawfully deprived thereof, considering
that she was induced to part with it by reason of the chicanery
practiced on her by Warner L. Feist. Certainly, swindling, like
robbery, is an illegal method of deprivation of property. In a
manner of speaking, plaintiff-appellant was "illegally deprived" of
her car, for the way by which Warner L. Feist induced her to part
with it is illegal and is punished by law. But does this "unlawful
deprivation" come within the scope of Article 559 of the New Civil
Code?
xxx xxx xxx
. . . The fraud and deceit practiced by Warner L. Feist earmarks
this sale as a voidable contract (Article 1390 N.C.C.). Being a
voidable contract, it is susceptible of either ratification or
annulment. If the contract is ratified, the action to annul it is
extinguished (Article 1392, N.C.C.) and the contract is cleansed
from all its defects (Article 1396, N.C.C.); if the contract is annulled,
the contracting parties are restored to their respective situations
before the contract and mutual restitution follows as a
consequence (Article 1398, N.C.C.).
However, as long as no action is taken by the party entitled, either
that of annulment or of ratification, the contract of sale remains
valid and binding. When plaintiff-appellant Trinidad C. Tagatac
delivered the car to Feist by virtue of said voidable contract of sale,
the title to the car passed to Feist. Of course, the title that Feist
acquired was defective and voidable. Nevertheless, at the time he
sold the car to Felix Sanchez, his title thereto had not been avoided
and he therefore conferred a good title on the latter, provided he
bought the car in good faith, for value and without notice of the
defect in Feist's title (Article 1506, N.C.C.). There being no proof
on record that Felix Sanchez acted in bad faith, it is safe to assume
that he acted in good faith.
The above rulings are sound doctrine and reflect our own
interpretation of Article 559 as applied to the case before us.
Actual delivery of the books having been made, Cruz acquired
ownership over the books which he could then validly transfer to
the private respondents. The fact that he had not yet paid for them
to EDCA was a matter between him and EDCA and did not impair
the title acquired by the private respondents to the books.
One may well imagine the adverse consequences if the phrase
"unlawfully deprived" were to be interpreted in the manner
suggested by the petitioner. A person relying on the seller's title
who buys a movable property from him would have to surrender it
to another person claiming to be the original owner who had not
yet been paid the purchase price therefor. The buyer in the second
sale would be left holding the bag, so to speak, and would be
compelled to return the thing bought by him in good faith without
even the right to reimbursement of the amount he had paid for it.
It bears repeating that in the case before us, Leonor Santos took
care to ascertain first that the books belonged to Cruz before she
agreed to purchase them. The EDCA invoice Cruz showed her
assured her that the books had been paid for on delivery. By
contrast, EDCA was less than cautious in fact, too trusting in
dealing with the impostor. Although it had never transacted with
him before, it readily delivered the books he had ordered (by
telephone) and as readily accepted his personal check in payment.
It did not verify his identity although it was easy enough to do this.
It did not wait to clear the check of this unknown drawer. Worse, it
indicated in the sales invoice issued to him, by the printed terms
thereon, that the books had been paid for on delivery, thereby
vesting ownership in the buyer. Cdpr
Surely, the private respondent did not have to go beyond that
invoice to satisfy herself that the books being offered for sale by
Cruz belonged to him; yet she did. Although the title of Cruz was
presumed under Article 559 by his mere possession of the books,
these being movable property, Leonor Santosnevertheless
demanded more proof before deciding to buy them.
It would certainly be unfair now to make the private respondents
bear the prejudice sustained by EDCA as a result of its own
negligence. We cannot see the justice in transferring EDCA's loss
to the Santoses who had acted in good faith, and with proper care,
when they bought the books from Cruz.
While we sympathize with the petitioner for its plight, it is clear that
its remedy is not against the private respondents but against
Tomas de la Pea, who has apparently caused all this trouble. The
private respondents have themselves been unduly
inconvenienced, and for merely transacting a customary deal not
really unusual in their kind of business. It is they and
not EDCA who have a right to complain.
WHEREFORE, the challenged decision is AFFIRMED and the
petition is DENIED, with costs against the petitioner.
||| (EDCA Publishing & Distributing Corp. v. Spouses Santos, G.R.
No. 80298, [April 26, 1990], 263 PHIL 560-568)
De Garcia v. Court of Appeals 37 SCRA 129
FIRST DIVISION
[G.R. No. L-20264. January 30, 1971.]
CONSUELO S. DE GARCIA and ANASTACIO
GARCIA, petitioners, vs. HON. COURT OF APPEALS,
ANGELINA D. GUEVARA and JUAN B.
GUEVARA, respondents.
Deogracias T. Reyes and Jose M. Luison for petitioners.
Tolentino & Garcia and D. R. Cruz for private respondents.
DECISION
FERNANDO, J p:
This petition for certiorari to review a decision of respondent Court
of Appeals was given due course because it was therein
vigorously asserted that legal questions of gravity and of moment,
there being allegations of an unwarranted departure from and a
patent misreading of applicable and controlling decisions, called
for determination by this Tribunal. The brief for petitioners-
spouses, however, failed to substantiate such imputed failings of
respondent Court. The performance did not live up to the promise.
On the basis of the facts as duly found by respondent Court, which
we are not at liberty to disregard, and the governing legal
provisions, there is no basis for reversal. We affirm.
The nature of the case presented before the lower court by private
respondent Angelina D. Guevara, assisted by her spouse, Juan B.
Guevara, as plaintiffs, was noted in the decision of respondent
Court of Appeals thus: "Plaintiff seeks recovery of 'one (1) lady's
diamond ring 18 cts. white gold mounting, with one (1) 2.05 cts.
diamond-solitaire, and four (4) brills 0.10 cts. total weight' which
she bought on October 27, 1947 from R. Rebullida, Inc." 1 Then
came a summary of now respondent Guevara of her evidence:
"Plaintiff's evidence tends to show that around October 11, 1953
plaintiff while talking to Consuelo S. de Garcia, owner of La
Bulakea restaurant recognized her ring in the finger of Mrs.
Garcia and inquired where she bought it, which the defendant
answered from her comadre. Plaintiff explained that that ring was
stolen from her house in February, 1952. Defendant handed the
ring to plaintiff and it fitted her finger. Two or three days later, at
the request of plaintiff, plaintiff, her husband Lt. Col. Juan
Guevara, Lt. Cementina of Pasay PD, defendant and her attorney
proceeded to the store of Mr. Rebullida to whom they showed the
ring in question. Mr. Rebullida examined the ring with the aid of
high power lens and after consulting the stock card thereon,
concluded that it was the very ring that plaintiff bought from him in
1947. The ring was returned to defendant who despite a written
request therefor failed to deliver the ring to plaintiff. Hence, this
case. Later on when the sheriff tried to serve the writ of seizure
(replevin), defendant refused to deliver the ring which had been
examined by Mr. Rebullida, claiming it was lost." 2
How the defendant, Consuelo S. de Garcia, the present petitioner
before us, along with her husband Anastacio Garcia, sought to
meet plaintiff's claim was narrated thus: "On the other hand,
defendant denied having made any admission before plaintiff or
Mr. Rebullida or the sheriff. Her evidence tends to show that the
ring (Exhibit 1) was purchased by her from Mrs. Miranda who got
it from Miss Angelita Hinahon who in turn got it from the owner.
Aling Petring, who was hoarding in her house; that the ring she
bought could be similar to, but not the same ring plaintiff
purchased from Mr. Rebullida which was stolen; that according to
a pawn-shop owner the big diamond on Exhibit 1 was before the
trial never dismantled. When dismantled, defendant's diamond
was found to weigh 2.57 cts." 3
Plaintiff lost in the lower court. She elevated the matter to
respondent Court of Appeals with the judgment of the lower court
being reversed. It is this decision now under review.
These are the facts as found by respondent Court of Appeals:
"That the ring brought by the parties for examination by Rafael
Rebullida on December 14, 1958 was the same ring purchased by
plaintiff from B. Rebullida, Inc. on October 27, 1947 and stolen in
February, 1962 has been abundantly established by plaintiff's
evidence. Before plaintiff lost the ring, she had been wearing it for
six years and became familiar with it. Thus, when she saw the
missing ring in the finger of defendant, she readily and definitely
identified it. Her identification was confirmed by Mr. Rafael
Rebullida, whose candid testimony is entitled to great weight, with
his 30 years experience behind him in the jewelry business and
being a disinterested witness since both parties are his customers.
Indeed, defendant made no comment when in her presence
Rebullida alter examining the ring and stock card told plaintiff that
that was her ring, nor did she answer plaintiff's letter of demand, .
. . asserting ownership. Further confirmation may be found in the
extra-judicial admissions, contained in defendant's original and
first amended answers . . ." 4
These further facts likewise appear therein: "The foregoing proof
is not counter-balanced by the denial on the part of defendant or
the presentation of the ring, Exhibit I, which has a diamond-
solitaire weighing 2.57 cts., or much heavier than the lost diamond
weighing 2.05 cts. only. It is noteworthy that defendant gave a
rather dubious source of her ring. Aling Petring from whom the ring
supposedly came turned out to be a mysterious and ephemeral
figure. Miss Hinahon did not ever know her true and full name, nor
her forwarding address. She appeared from nowhere, boarded
three months in the house of Miss Hinahon long enough to sell her
diamond ring, disappearing from the scene a week thereafter.
Indeed, the case was terminated without any hearing the third-
party and fourth-party complaints, which would have shown up the
falsity of defendant's theory. Moreover, Mrs. Baldomera Miranda,
third-party defendant, who tried to corroborate defendant on the
latter's allege attempt to exchange the ring defendant bought
through is [belied] by her judicial admission in her Answer that
appellee 'suggested that she would make alterations to the
mounting and structural design of the ring to hide the true identity
and appearance of the original one' (Cunanan vs. Amparo, 45
O.G. 3796). Finally, defendant is refuted by her own extra-judicial
admissions . . . although made by defendant's counsel. For an
attorney who acts as counsel of record and is permitted to act
such, has the authority to manage the cause, and this includes the
authority to make admission for the purpose of the litigation. . . .
Her proffered explanation that her counsel misunderstood her is
puerile because the liability to error as to the identity of the vendor
and the exchange of the ring with another ring of the same value
was rather remote." 5
It is in the light of the above facts as well as the finding that the
discrepancy as to the weight between the diamond-solitaire in
Exhibit I and the lost diamond was due to defendant having
"substituted a diamond-solitaire of plaintiff with a heavier stone"
that the decision was rendered, respondent Court reversing the
lower court and ordering defendant, now petitioner Consuelo S. de
Garcia, to return plaintiff's ring or fact value of P1,000.00 and
costs, as well as to pay plaintiff P1,000.00 as attorney's fee and
P1,000.00 as exemplary damages. Hence this appeal.
To repeat, there is no occasion to reverse respondent Court. It
correctly applied the law to the facts as found.
1. The controlling provision is Article 559 of the Civil Code. It reads
thus: "The possession of movable property acquired in good faith
is equivalent to a title. Nevertheless, one who has lost any
movable or has been unlawfully deprived thereof may recover it
from the person in possession of the same. If the possessor of a
movable lost of which the owner has been unlawfully deprived, has
acquired it in good faith at a public sale, the owner cannot obtain
its return without reimbursing the price paid therefor." Respondent
Angelina D. Guevara, having been unlawfully deprived of the
diamond ring in question, was entitled to recover it from petitioner
Consuelo S. de Garcia who was found in possession of the same.
The only exception the law allows is when there is acquisition in
good faith of the possessor at a public sale, in which case the
owner cannot obtain its return without reimbursing the price. As
authoritatively interpreted in Cruz v. Pahati, 6 the right of the
owner cannot be defeated even by proof that there was good faith
in the acquisition by the possessor. There is a reiteration of this
principle in Aznar v. Yapdiangco. 7 Thus: "Suffice it to say in this
regard that the right of the owner to recover personal property
acquired in good faith by another, is based on his being
dispossessed without his consent. The common law principle that
where one of two innocent persons must suffer by a fraud
perpetrated by another, the law imposes the loss upon the party
who, by his misplaced confidence, has enabled the fraud to be
committed, cannot be applied in a case which is covered by an
express provision of the new Civil Code, specifically Article 559.
Between a common law principle and a statutory provision, the
latter must prevail in this jurisdiction." 8
2. It is thus immediately apparent that there is no merit to the
contention raised in the first assigned error that her possession in
good faith, equivalent to title, sufficed to defeat respondent
Guevara's claim. As the above cases demonstrate, even on that
assumption the owner can recover the same once she can show
illegal deprivation. Respondent Court of Appeals was so
convinced from the evidence submitted that the owner of the ring
in litigation is such respondent. That is a factual determination to
which we must pay heed. Instead of proving any alleged departure
from legal norms by respondent Court, petitioner would stress
Article 541 of the Civil Code, which provides: 'A possessor in the
concept of owner has in his favor the legal presumption that he
possesses with a just title and he cannot be obliged to show or
prove it." She would accord to it a greater legal significance than
that to which under the controlling doctrines it is entitled. The brief
for respondents did clearly point out why petitioner's assertion is
lacking in support not only from the cases but even from
commentators. Thus: "Actually, even under the first clause,
possession in good faith does not really amount to title, for the
reason that Art. 1132 of the Code provides for a period of
acquisitive prescription for movables through 'uninterrupted
possession for four years in good faith' (Art. 1955 of the old
Spanish Code, which provided a period of three years), so that
many Spanish writers, including Manresa, Sanchez Roman,
Scaevola, De Buen, and Ramos, assert that under Art. 464 of the
Spanish Code (Art. 559 of the New Civil Code), the title of the
possessor in good faith is not that of ownership, but is merely a
presumptive title sufficient to serve as a basis for acquisitive
prescription (II Tolentino, Civil Code of the Phil., p. 258: IV
Manresa, Derecho Civil Espaol, 6th Ed., p. 380). And it is for the
very reason that the title established by the first clause of Art. 559
is only a presumptive title sufficient to serve as a basis for
acquisitive prescription, that the clause immediately following
provides that 'one who has lost any movable or has been
unlawfully deprived thereof, may recover it from the person in
possession of the same.' As stated by the Honorable Justice Jose
B. L. Reyes of this Court in Sotto vs. Enage (C.A.), 43 Off. Gaz.
5075, Dec. 1947: 'Article 559 in fact assumes that possessor is as
yet not the owner; for it is obvious that where the possessor has
come to acquire indefeasible title by, let us say, adverse
possession for the necessary period, no proof of loss or illegal
deprivation could avail the former owner of the chattel. He would
no longer be entitled to recover it under any condition.'" 9
The second assigned error is centered on the alleged failure to
prove the identity of the diamond ring. Clearly the question raised
is one of fact. What the Court of Appeals found is conclusive.
Again, petitioner could not demonstrate that in reaching such a
conclusion the Court of Appeals acted in an arbitrary manner. As
made mention of in the brief for respondents two disinterested
witnesses, Mr. Rafael Rebullida as well as Lt. Reynaldo
Cementina of the Pasay City Police Department, both of whom
could not be accused of being biased in favor of respondent
Angelina D. Guevara, did testify as to the identity of the ring.
The third assigned error of petitioners would find fault with
respondent Court relying "on the weakness of the title or evidence"
of petitioner Consuelo S. de Garcia. It is true, in the decision under
review, mention was made of petitioner Consuelo S. de Garcia
making no comment when in her presence Rebullida, after
examining the ring and the stock card, told respondent Angelina
D. Guevara that that was her ring, nor did petitioner answer a letter
of the latter asserting ownership. It was likewise stated in such
decision that there were extra-judicial admissions in the original
and first amended answers of petitioner. In the appraisal of her
testimony, respondent Court likewise spoke of her giving a rather
dubious source of her ring the person from whom she allegedly
bought it turning out "to be a mysterious and ephemeral figure." As
a matter of fact, as set forth a few pages back, respondent Court
did enumerate the flaws in the version given by petitioner. From
the weakness of the testimony offered which, as thus made clear,
petitioner, did not even seek to refute, she would raise the legal
question that respondent Court relied on the "weakness of [her]
title or evidence" rather than on the proof justifying respondent
Angelina D. Guevara's claim of ownership. Petition here would
ignore the finding of fact of respondent Court that such ownership
on her part "has been abundantly established" by her evidence.
Again here, in essence, the question raised is one of fact, and
there is no justification for us to reserve respondent Court.
The legal question raised in the fourth assignment of error is that
the matter of the substitution of the diamond on the ring was a
question raised for the first time on appeal as it was never put in
issue by the pleadings nor the subject of reception of evidence by
both parties and not touched upon in the decision of the lower
court. Why no such question could be raised in the pleadings of
respondent Angelina D. Guevara was clarified by the fact that the
substitution came after it was brought for examination to Mr.
Rebullida. After the knowledge of such substitution was gained,
however, the issue was raised at the trial according to the said
respondent resulting in that portion of the decision where the lower
court reached a negative conclusion. As a result, in the motion for
reconsideration, one of the points raised as to such decision being
contrary to the evidence is the finding that there was no
substitution. It is not necessary to state that respondent Court,
exercising its appellate power reversed the lower court. What was
held by it is controlling. What is clear is that there is no factual
basis for the legal arguments on which the fourth assigned error is
predicated.
What is said takes care of the fifth assigned error that respondent
Court was mistaken in its finding that there was such a
substitution. Again petitioner would have us pass on a question of
credibility which is left to respondent Court of Appeals, The sixth
assigned error would complain against the reversal of the lower
court judgment as well as petitioner Consuelo S. de Garcia being
made to pay respondent Angelina D. Guevara exemplary
damages, attorney's fees and costs. The reversal is called for in
the light of the appraisal of the evidence of record as meticulously
weighed by respondent Court. As to the attorney's fees and
exemplary damages, this is what respondent Court said in the
decision under review: "Likewise, plaintiff is entitled to recover
reasonable attorney's fees in the sum of P1,000, it being just and
equitable under the circumstances, and another P1,000 as
exemplary damages for the public good to discourage litigants
from resorting to fraudulent devices to frustrate the ends of justice,
as defendant herein tried to substitute the ring, Exhibit 1, for
plaintiff's ring." 10Considering the circumstances, the cursory
discussion of the sixth assigned error on the matter by petitioner
fails to demonstrate that respondent Court's actuation is
blemished by legal defects.
WHEREFORE, the decision of respondent Court of Appeals of
August 6, 1962 is hereby affirmed. With costs.
||| (De Garcia v. Court of Appeals, G.R. No. L-20264, [January 30,
1971], 147 PHIL 115-124)
Dizon v. Suntay 47 SCRA 160
EN BANC
[G.R. No. L-30817. September 29, 1972.]
DOMINADOR DIZON, doing business under the firm name
"Pawnshop of Dominador Dizon", petitioner, vs. LOURDES G.
SUNTAY,respondent.
Andres T . Velarde for petitioner.
Rafael B. Suntay for respondent.
SYLLABUS
1. CIVIL LAW; PROPERTY; OWNERSHIP AND POSSESSION;
RIGHT OF OWNER OF IMMOVABLE PROPERTY UN-
LAWFULLY DEPRIVED THEREOF; CASE AT BAR. A diamond
ring valued at P5,500.00 was delivered by respondent Lourdes C.
Suntay to a certain Clarita R. Sison for sale on commission. After
the lapse of a considerable time without the latter having returned
the ring nor its purchase price, demands were made upon her by
the owner upon which a pawnshop ticket, the receipt of the pledge
with petitioner Dominador Dizon's pawnshop, ,was delivered.
Since what was done was violative of the terms of the agency,
there was an attempt to recover possession by an action for
recovery and by the provisional remedy of replevin. The
dispossessed owner having prevailed, both in the lower and in the
Court of Appeals, the matter was then elevated to this Court by
petitioner grounded on estoppel. HELD: The invocation of estoppel
is unavailing. Respondent-owner Lourdes G. Suntay has in her
favor the protection accorded by Art. 559 of the Civil Code which
provides that: "The possession of movable property acquired in
good faith is equivalent to a title. Nevertheless, one who has lost
any movable or has been unlawfully deprived thereof may recover
it from the person in possession of the same. If the possessor of a
movable lost or of which the owner has been unlawfully deprived,
has acquired it in good faith at a public sale, the owner cannot
obtain its return without reimbursing the price therefore."
2. REMEDIAL LAW; ESTOPPEL; BASIS. Estoppel as known to
the Rules of Court and prior to that, to the Court of Civil Procedure
has its roots in equity. Good faith is its basis. It is a response to
the demands of moral right and natural justice.
3. ID.; ID.; REQUISITES. For estoppel to exist, it is
indispensable that there be a declaration, act or omission by the
party who is sought to be bound. Nor is this all. It is equally a
requisite that he, who would claim the benefits of such a principle
must have altered his position, having been so intentionally and
deliberately led to comport himself thus, by what was declared or
what was done or failed to be done. If thereafter a litigation arises,
the former would not be allowed to disown such act, declaration or
omission. A court is to see to it that there is no turning back on
one's word or a repudiation of one's act.
4. ID.; ID.; PETITIONER IN CASE AT BAR CANNOT
SUCCESSFULLY INVOKE THE PRINCIPLE OF ESTOPPEL;
REASONS. Petitioner cannot assert that his appeal finds
support in the doctrine of estoppel. Neither the promptings of
equity nor the mandates of moral tight and natural justice come to
his rescue. He is engaged in a business where presumably
ordinary prudence would manifest itself to ascertain whether or not
an individual who is offering a jewelry by way of pledge is entitled
to do so. If no such care be taken, perhaps because of the difficulty
of resisting opportunity for profit, he should be the last to complain
if thereafter the right of the true owner of such jewelry should be
recognized. The law for this sound reason accords the latter
protection.
DECISION
FERNANDO, J p:
In essence there is nothing novel in this petition for review of a
decision of the Court of Appeals affirming a lower court judgment
sustaining the right of an owner of a diamond ring, respondent
Lourdes G. Suntay, as against the claim of petitioner Dominador
Dizon, who owns and operates a pawnshop. The diamond ring
was turned over to a certain Clarita R. Sison, for sale on
commission, along with other pieces of jewelry of respondent
Suntay. It was then pledged to petitioner. Since what was done
was violative of the terms of the agency, there was an attempt on
her part to recover possession thereof from petitioner, who
refused. She had to file an action then for its recovery. She was
successful, as noted above, both in the lower court and thereafter
in the Court of Appeals. She prevailed as she had in her favor the
protection accorded by Articles 559 of the Civil Code. 1 The matter
was then elevated to us by the petitioner. Ordinarily, our discretion
would have been exercised against giving due course to such
petition for review. The vigorous plea however, grounded on
estoppel, by his counsel, Atty. Andres T. Velarde, persuaded us to
act otherwise. After a careful perusal of the respective contentions
of the parties, we fail to perceive any sufficient justification for a
departure from the literal language of the applicable codal
provision as uniformly interpreted by this Court in a number of
decisions. The invocation of estoppel is therefore unavailing. We
affirm.
The statement of the case as well as the controlling facts may be
found in the Court of Appeals decision penned by Justice Perez.
Thus: "Plaintiff is the owner of a three-carat diamond ring valued
at P5,500.00. On June 13, 1962, the plaintiff and Clarita R. Sison
entered into a transaction wherein the plaintiff's ring was delivered
to Clarita R. Sison for sale on commission. Upon receiving the ring,
Clarita R. Sison executed and delivered to the plaintiff the receipt
. . . The plaintiff had already previously known Clarita R. Sison as
the latter is a close friend of the plaintiff's cousin and they had
frequently met each other at the place of the plaintiff's said cousin.
In fact, about one year before their transaction of June 13, 1962
took place, Clarita R. Sison received a piece of jewelry from the
plaintiff to be sold for P500.00, and when it was sold, Clarita R.
Sison gave the price to the plaintiff the latter's ring, the plaintiff
made demands on Clarita R. Sison for the return of her ring but
the latter could not comply with the demands because, without the
knowledge of the plaintiff, on June 15, 1962 or three days after the
ring above-mentioned was received by Clarita R. Sison from the
plaintiff, said ring was pledge by Melia Sison, niece of the husband
of Clarita R. Sison, evidently in connivance with the latter, with the
defendant's pawnshop for P2,600.00 . . ." 2 Then came this portion
of the decision under review: "Since the plaintiff insistently
demanded from Clarita R. Sison the return of her ring, the latter
finally delivered to the former the pawnshop ticket . . . which is the
receipt of the pledge, with the defendant's pawnshop of the
plaintiff's ring. When the plaintiff found out that Clarita R. Sison
pledged, she took steps to file a case of estafa against the latter
with the fiscal's office. Subsequently thereafter, the plaintiff,
through her lawyer, wrote a letter . . . date September 22, 1962, to
the defendant asking for the delivery to the plaintiff of her ring
pledged with defendant's pawnshop under pawnshop receipt
serial-B No. 65606, dated June 15, 1962 . . . Since the defendant
refused to return the ring, the plaintiff filed the present action with
the Court of First Instance of Manila for the recovery of said ring,
with P500.00 as attorney's fees and costs. The plaintiff asked for
the provisional remedy of replevin by the delivery of the ring to her,
upon her filing the requisite bond, pending the final determination
of the action. The lower court issued the writ of replevin prayed for
by plaintiff and the latter was able to take possession of the ring
during the pendency of the action upon her filing the requisite
bond." 3 It was then noted that the lower court rendered judgment
declaring that plaintiff, now respondent Suntay, had the right to the
possession, of the ring in question. Petitioner Dizon, as defendant,
sought to have the judgment reversed by the Court of Appeals. It
did him no good. The decision of May 19, 1969, now on review,
affirmed the decision of the lower court.
In the light of the facts as thus found by the Court of Appeals, well-
nigh conclusive on use , with the applicable law being what it is,
this petition for review cannot prosper. To repeat, the decision of
the Court of Appeals stands.
1. There is a fairly recent restatement of the force and affect of the
governing codal norm in De Gracia v. Court of Appeals. 4 Thus:
"The controlling provision is Article 559 of the Civil Code.It reads
thus: "The possession of movable property acquired in good faith
is equivalent to a title. Nevertheless, one who has lost any
movable or has been unlawfully deprived thereof may recover it
from the person in possession of the same. If the possessor of a
movable lost of which the owner has been unlawfully deprived, has
acquired nit in good faith at a public sale, the owner cannot obtain
its return without reimbursing the price paid therefor.' Respondent
Angelina D. Guevarra, having been unlawfully deprived of the
diamond ring in question, was entitled to recover it from petitioner
Consuelo S. de Gracia who was found in possession of the same.
The only exception the law allows is when there is acquisition in
faith of the possessor at a public sale, in which case the owner
cannot obtain its return without reimbursing the price. As
authoritatively interpreted in Cruz v. Pahati, the right of the owner
cannot be defeated even by proof that there was good faith in the
acquisition by the possessor. There is a reiteration of this principle
in Azinar v. Yapdiangco. Thus: 'Suffice it to say in this regard that
the right of the owner to recover personal property acquired in
good faith by another, is based on his being dispossessed without
his consent. The common law principle that were one of two
innocent persons must suffer by a fraud perpetrated by another,
the law imposes the loss upon the party who, by his misplaced
confidence,, has enabled the fraud to be committed, cannot be
applied in a case which is covered by an express provision of
the new Civil Code, specifically Article 559. Between a common
law principle and a statutory provision, the latter must prevail in
this jurisdiction.'" 5
2. It must have been a recognition of the compulsion exerted by
the above authoritative precedents that must have caused
petitioner to invoke the principle of estoppel. There is clearly a
misapprehension. Such a contention is devoid of any persuasive
force.
Estoppel as known to the Rules of Court 6 and prior to that to the
Court of Civil Procedure, 7 has its roots in equity. Good faith is its
basis. 8 It is a response to the demands of moral right and natural
justice. 9 For estoppel to exist though, it is indispensable that there
be a declaration, act or omission by the party who is sought to be
bound. Nor is this all. It is equally a requisite that he, who would
claim the benefits of such a principle, must have altered his
position, having been so intentionally and deliberately led to
comport himself thus, by what was declared or what was done or
failed to be done. If thereafter a litigation arises, the former would
not be allowed to disown such act, declaration or omission. The
principle comes into full play. It may successfully be relied upon. A
court is to see to it then that there is no turning back on one's word
or a repudiation of one's act. So it has been from our earliest
decisions. As Justice Mapa pointed out in the first case, a 1905
decision, Rodriguez v. Martinez, 10 a party should not be
permitted "to go against his own acts to the prejudice of[another].
Such a holding would be contrary to the most rudimentary
principles of justice and law." 11 He is not, in the language of
Justice Torres, in Irlanda v. Pitargue, 12promulgated in 1912
"allowed to gainstay [his] own acts or deny rights which [he had]
previously recognized." 13 Some of the later cases are to the
effect that an unqualified and unconditional acceptance of an
agreement forecloses a claim for interest not therein
provided. 14 Equally so the circumstances that about a month
after the date of the conveyance, one of the parties informed the
other of his being a minor, according to Chief Justice Paras, "is of
no moment had already estopped him from disavowing the
contract." 15 It is easily understandable why, under the
circumstances disclosed, estoppel is a frail reed to hang on to.
There was clearly the absence of an act or omission, as a result of
which a position had been assumed by petitioner, who if such
elements were not lacking, could not thereafter in law be
prejudiced by his relief in what had been misrepresented to
him. 16 As was put by Justice Labrador, "a person claimed to be
estopped must have knowledge of the fact that his voluntary acts
would deprive him of some rights because said voluntary acts are
inconsistent with said rights. 17 To recapitulate, there is this
pronouncement not so long ago, from the pen of Justice
Makalintal, who reaffirmed that estoppel "has its origin in equity
and, being based on moral right and natural whenever the special
circumstances of a case so demand." 18
How then can petitioner in all seriousness assert that his appeal
finds support in the doctrine of estoppel? Neither the prompting of
equity not the mandates of moral right and natural justice come to
his rescue. He is engaged in a business where presumably
ordinary prudence would manifest itself to ascertain whether or not
an individual who is offering a jewelry by way of a pledge is entitled
to do so. If no such care be taken, perhaps because of the difficulty
of resisting opportunity for profit, he should be the last to complain
if thereafter the right of the true owner of such jewelry should be
recognized. The law for this sound reason accords the latter
protection. So it has always been since Varela v. Finnick, 19 a
1907 decision. According to Justice Torres: "In the present case
not only has the ownership and the origin of the jewels
misappropriated been unquestionably proven but also that the
accused, acting fraudulently and in bad faith,, disposed of them
and pledged them contrary to agreement, with no right of
ownership, and to the prejudice of the injured party, who was
thereby illegally deprived of said jewels; therefore, in accordance
with the provisions of article 464, the owner has an absolute right
to recover the jewel the jewels from the possession of whosoever
holds them, . . ." 20 There have been many other decisions to the
same effect since then. At least nine may be cited. 21 Nor could
any other outcome be expected, considering the civil
code provisions both in the former Spanish legislation 22 and in
the present Code. 23 Petitioner ought to have been on his guard
before accepting the pledge in question. Evidently there was no
such precaution availed of. He therefore, has only himself to blame
for the fix he is now. It would be to stretch the concept of estoppel
to the breaking point if his contention were to prevail. Moreover,
there should have been a realization on his part that courts are not
likely to be impressed with a cry of distress authorized to impose
a higher rate of interest precisely due to the greater risk assumed
by him. A predicament of this nature then does not suffice to call
for less than undeviating adherence to the literal terms of a codal
provision. Moreover, while the activity he is engaged in is no doubt
legal, it is not to be lost sight of that it thrives on taking advantage
of the necessities precisely of that element of our population
whose lives are blighted by extreme poverty. From whatever angle
the question is viewed then, estoppel certainly cannot be justly
invoked.
WHEREFORE, the decision of the Court of Appeals of May 19,
1969 is affirmed, with cost against petitioner.
||| (Dizon v. Suntay, G.R. No. L-30817, [September 29, 1972], 150-
B PHIL 861-876)
Ledesma v. Court of Appeals 213 SCRA 195
THIRD DIVISION
[G.R. No. 86051. September 1, 1992.]
JAIME LEDESMA, petitioner, vs. THE
HONORABLE COURT OF APPEALS and CITIWIDE MOTORS,
INC., respondents.
Ledesma, Saludo & Associates for petitioner.
Magtanggol C. Gunigundo for private respondent.
SYLLABUS
1. CIVIL LAW; POSSESSION; REQUISITES TO MAKE
POSSESSION OF MOVABLE PROPERTY EQUIVALENT TO
TITLE. It is quite clear that a party who (a) has lost any movable
or (b) has been unlawfully deprived thereof can recover the same
from the present possessor even if the latter acquired
it in good faith and has, therefore, title thereto for under the first
sentence of Article 559, such manner of acquisition is equivalent
to a title. There are three (3) requisites to make
possession of movable property equivalent to title, namely: (a) the
possession should be in good faith; (b) the owner voluntarily
parted with the possession ofthe thing; and (c) the possession
is in the concept of owner. (TOLENTINO, A.M., Civil Code of the
Philippines, Vol. II, 1983 ed., 275-276, citing 2-II Colin and
Capitant 942; De Buen: Ibid., 1009, 2 Salvat 165; 4 Manresa 339).
Undoubtedly, one who has lost a movable or who has been
unlawfully deprived of it cannot be said to have voluntarily parted
with the possession thereof. This is the justification for the
exceptions found under the second sentence of Article 559 of the
Civil Code.
2. CIVIL LAW; SPECIAL CONTRACTS; CONTRACT OF SALE;
ABSENCE OF CONSIDERATION; EFFECT THEREOF. There
was a perfected unconditional contract of sale between private
respondent and the original vendee. The former voluntarily caused
the transfer of the certificate of registration of the vehicle in the
name of the first vendee even if the said vendee was
represented by someone who used a fictitious name and
likewise voluntarily delivered the cars and the
certificate of registration to the vendee's alleged representative.
Title thereto was forthwith transferred to the vendee. The
subsequent dishonor of the check because of the alteration
merely amounted to a failure of consideration which does not
render the contract of sale void, but merely allows the prejudiced
party to sue for specific performance or rescission of the contract,
and to prosecute the impostor for estafa under Article 315 of the
Revised Penal Code.
DECISION
DAVIDE, JR., J p:
Petitioner impugns the Decision of 22 September
1988 of respondent Court of Appeals 1 in C.A.-G.R. CV No.
05955 2 reversing the decision of then Branch XVIII-B (Quezon
City) of the then Court of First Instance (now Regional
Trial Court) of Rizal in a replevin case, Civil Case No. Q-24200,
the dispositive portion of which reads: cdll
"Accordingly, the Court orders the plaintiff to return the
repossessed Isuzu Gemini, 1977 Model vehicle, subject of this
case to the defendant Ledesma. The incidental claim (sic) for
damages professed by the plaintiff are dismissed for lack of merit.
On defendant's counterclaim, Court (sic) makes no
pronouncement as to any form of damages, particularly, moral,
exemplary and nominal in view of the fact that Citiwide has a
perfect right to litigate its claim, albeit by this pronouncement, it did
not succeed." 3
which was supplemented by a Final Order dated 26 June 1980,
the dispositive portion of which reads:
"IN VIEW OF THE FOREGOING, the Court grants
defendant Ledesma the sum of P35,000.00 by way of actual
damages recoverable upon plaintiff's replevin bond. Plaintiff and
its surety, the Rizal Surety and Insurance Co., are hereby ordered
jointly and severally to pay defendant Jaime Ledesma the
sum ofP10,000.00 as damages for the wrongful issue of the
writ of seizure, in line with Rule 57, Sec. 20, incorporated in Rule
60, Sec. 10.
In conformity with the rules adverted to, this final order shall form
part of the judgment of this Court on September 5, 1979.
The motion for reconsideration of the judgment filed by the plaintiff
is hereby DENIED for lack of merit. No costs at this instance." 4
The decision of the trial court is anchored on its findings that (a)
the proof on record is not persuasive enough to show that
defendant, petitioner herein, knew that the vehicle in question was
the object of a fraud and a swindle 5 and (b) that plaintiff, private
respondent herein, did not rebut or contradict Ledesma's evidence
that valuable consideration was paid for it.
The antecedent facts as summarized by the
respondent Court of Appeals are as follows:
"On September 27, 1977, a person representing himself to be Jojo
Consunji, purchased purportedly for his father, a certain Rustico
T. Consunji, two (2) brand new motor vehicles from plaintiff-
appellant Citiwide Motors, Inc., more particularly described as
follows: llcd
a) One (1) 1977 Isuzu Gemini, 2-door Model PF 50ZIK, with
Engine No. 751214 valued at P42,200.00; and
b) One (1) 1977 Holden Premier Model 8V41X with Engine No.
198-1251493, valued at P58,800.00.
Said purchases are evidenced by Invoices Nos. 3054 and 3055,
respectively. (See Annexes A and B).
On September 28, 1977, plaintiff-appellant delivered the two-
above described motor vehicles to the person who represented
himself as Jojo Consunji, allegedly the son of the purported buyers
Rustico T. Consunji, and said person in turn issued to plaintiff-
appellant Manager's Check No. 066-110-0638 ofthe Philippine
Commercial and Industrial Bank dated September 28, 1977 for the
amount of P101,000.00 as full payment of the value of the two (2)
motor vehicles.
However, when plaintiff-appellant deposited the said check, it was
dishonored by the bank on the ground that it was tampered with,
the correct amount of P101.00 having been raised to P101,000.00
per the bank's notice of dishonor (Annexes F and G).
On September 30, 1977, plaintiff-appellant reported to the
Philippine Constabulary the criminal act perpetrated by the person
who misrepresented himself as Jojo Consunji and in the
course of the investigation, plaintiff-appellant learned that the real
identity of the wrongdoer/impostor is Armando Suarez who has a
long line of criminal cases against him for estafa using this
similar modus operandi.
On October 17, 1977, plaintiff-appellant was able to recover the
Holden Premier vehicle which was found abandoned
somewhere in Quezon City.
On the other hand, plaintiff-appellant learned that the 1977 Isuzu
Gemini was transferred by Armando Suarez to third persons and
was in the possession of one Jaime Ledesma at the time plaintiff-
appellant instituted this action for replevin on November 16, 1977.
In his defense, Jaime Ledesma claims that he purchases (sic) and
paid for the subject vehicle in good faith from its registered owner,
one Pedro Neyra, as evidenced by the Land Transportation
Commission Registration Certificate No. RCO1427249. prLL
After posting the necessary bond in the amount double the
value of the subject motor vehicle, plaintiff-appellant was able to
recover possession of the 1977 Isuzu Gemini as evidenced by the
Sheriff's Return dated January 23, 1978." 6
After trial on the merits, the lower court rendered the decision and
subsequently issued the Final Order both earlier adverted to,
which plaintiff (private respondent herein) appealed to the
respondent Court of Appeals; it submitted the following
assignment of errors:
"The trial court erred.
I
IN HOLDING THAT THE DEFENDANT IS ENTITLED TO THE
POSSESSION OF THE CAR;
II
IN HOLDING THAT THE DEFENDANT IS AN
INNOCENT PURCHASER IN GOOD FAITH AND FOR VALUE;
III
IN RULING THAT THE PLAINTIFF SHOULD RETURN THE CAR
TO DEFENDANT, DISMISSING ITS CLAIM FOR DAMAGES,
AND GRANTING DEFENDANT P35,000.00 DAMAGES
RECOVERABLE AGAINST THE REPLEVIN BOND AND
P101,000.00 DAMAGES FOR ALLEGED WRONGFUL SEIZURE;
IV
IN RENDERING THE DECISION DATED SEPTEMBER 3, 1979
AND THE FINAL ORDER DATED JUNE 26, 1980." 7
In support of its first and second assigned errors, private
respondent cites Article 559 of the Civil Code which provides:
"ARTICLE 559. The possession of movable property
acquired in good faith is equivalent to a title. Nevertheless, one
who has lost any movable or has been unlawfully deprived thereof,
may recover it from the person in possession of the same.
If the possessor of a movable lost or of which the owner has been
unlawfully deprived, has acquired it in good faith at a public sale,
the owner cannot obtain its return without reimbursing the price
paid therefor."
Without in any way reversing the findings of the trial court that
herein petitioner was a buyer in good faith and for valuable
consideration, the respondent Court ruled that: cdll
"'Under Article 559, Civil Code, the rule is to the effect that if the
owner has lost a thing, or if he has been unlawfully deprived of it,
he has a right to recover it not only from the finder, thief or robber,
but also from third persons who may have acquired
it in good faith from such finder, thief or robber. The said article
establishes two (2) exceptions to the general
rule of irrevendicability (sic), to wit: when the owner (1) has lost the
thing, or (2) has been unlawfully deprived thereof. In these cases,
the possessor cannot retain the thing as against the owner who
may recover it without paying any indemnity, except when the
possessor acquired it in a public sale.' (Aznar vs. Yapdiangco, 13
SCRA 486).
Put differently, where the owner has lost the thing or has been
unlawfully deprived thereof, the good faith of the possessor is not
a bar to recovery of the movable unless the possessor acquired
it in a public sale of which there is no pretense in this case.
Contrary to the court's assumption, the issue is not primarily
the good faith of Ledesma for even if this were true, this may not
be invoked as a valid defense, if it be shown that Citiwide was
unlawfully deprived of the vehicle.
In the case of Dizon vs. Suntay, 47 SCRA 160, the
Supreme Court had occasion to define the phrase unlawfully
deprived, to wit:
'. . . it extends to all cases where there has been no valid
transmission of ownership including depositary or lessee who has
sold the same. It is believed that the owner in such a case is
undoubtedly unlawfully deprived of his property and may recover
the same from a possessor in goodfaith.'
xxx xxx xxx
In the case at bar, the person who misrepresented himself to be
the son of the purported buyer, Rustico T. Consunji, paid for the
two (2) vehicles using a check whose amount has been altered
from P101.00 to P101,000.00. There is here a case of estafa.
Plaintiff was unlawfully deprived of the vehicle by false pretenses
executed simultaneously with the commission of fraud (Art. 315
2(a) R.P.C.). Clearly, Citiwide would not have parted with the two
(2) vehicles were it not for the false representation that the check
issued in payment thereupon (sic) is in the
amount of P101,000.00, the actual value of the two (2)
vehicles." 8
In short, said buyer never acquired title to the property; hence,
the Court rejected the claim of herein petitioner that at least,
Armando Suarez had a voidable title to the property.
His motion for reconsideration having been denied in the
resolution of the respondent Court of 12 December
1988, 9 petitioner filed this petition alleging therein that: LLjur
"A
THE
HONORABLE COURT OF APPEALS ERRED IN APPLYING
ARTICLE 559 OF THE NEW CIVIL CODE TO THE INSTANT
CASE DESPITE THE FACT THAT PRIVATE RESPONDENT
CITIWIDE MOTORS, INC. WAS NOT UNLAWFULLY
DEPRIVED OF THE SUBJECT CAR, AS IN FACT CITIWIDE
VOLUNTARILY PARTED WITH THE TITLE AND POSSESSION
OR (sic) THE SAME IN FAVOR OF ITS IMMEDIATE
TRANSFEREE.
B
THE FACTUAL MILIEU OF THE INSTANT CASE FALLS WITHIN
THE OPERATIVE EFFECTS OF ARTICLES 1505 AND
1506 OF THE NEW CIVIL CODE CONSIDERING THAT THE
IMMEDIATE TRANSFEREE OF THE PRIVATE RESPONDENT
CITIWIDE MOTORS, INC., ACQUIRED A VOIDABLE TITLE
OVER THE CAR IN QUESTION WHICH TITLE WAS NOT
DECLARED VOID BY A COMPETENT COURT PRIOR TO THE
ACQUISITION BY THE PETITIONER OF THE SUBJECT CAR
AND ALSO BECAUSE PRIVATE RESPONDENT, BY ITS OWN
CONDUCT, IS NOW PRECLUDED FROM ASSAILING THE
TITLE AND POSSESSION BY THE PETITIONER OF THE SAID
CAR." 10
There is merit in the petition. The assailed decision must be
reversed.
The petitioner successfully proved that he acquired the
car in question from his vendor in good faith and for valuable
consideration. According to the trial court, the private respondent's
evidence was not persuasive enough to establish that petitioner
had knowledge that the car was the object of a fraud and a swindle
and that it did not rebut or contradict petitioner's
evidence of acquisition for valuable consideration. The
respondent Court concedes to such findings but postulates that
the issue here is not whether petitioner acquired the vehicle in that
concept but rather, whether private respondent was unlawfully
deprived of it so as to make Article 559 of the Civil Code apply.
It is quite clear that a party who (a) has lost any movable or (b) has
been unlawfully deprived thereof can recover the same from the
present possessor even if the latter acquired it in good faith and
has, therefore, title thereto for under the first sentence of Article
559, such manner of acquisition is equivalent to a title. There are
three (3) requisites to make possession of movable property
equivalent to title, namely: (a) the possession should
be in good faith; (b) the owner voluntarily parted with the
possession of the thing; and (c) the possession is in the
concept of owner. 11
Undoubtedly, one who has lost a movable or who has been
unlawfully deprived of it cannot be said to have voluntarily parted
with the possession thereof. This is the justification for the
exceptions found under the second sentence of Article 559 of the
Civil Code.
The basic issue then in this case is whether private respondent
was unlawfully deprived of the cars when it sold the same to
Rustico Consunji, through a person who claimed to be Jojo
Consunji, allegedly the latter's son, but who nevertheless turned
out to be Armando Suarez, on the faith of a Manager's Check with
a face value of P101,000.00, dishonored for being altered, the
correct amount being only P101.00. Cdpr
Under this factual milieu, the respondent Court was of the opinion,
and thus held, that private respondent was unlawfully
deprived of the car by false pretenses.
We disagree. There was a perfected unconditional contract of sale
between private respondent and the original vendee. The former
voluntarily caused the transfer of the
certificate of registration of the vehicle in the name of the first
vendee even if the said vendee was represented by someone
who used a fictitious name and likewise voluntarily delivered
the cars and the certificate of registration to the vendee's alleged
representative. Title thereto was forthwith transferred to the
vendee. The subsequent dishonor of the check because of the
alteration merely amounted to a failure of consideration which
does not render the contract of sale void, but merely allows the
prejudiced party to sue for specific performance or
rescission of the contract, and to prosecute the impostor for estafa
under Article 315 of the Revised Penal Code. This is the rule
enunciated in EDCA Publishing and Distributing Corp. vs.
Santos, 12 the facts of which do not materially and substantially
differ from those obtaining in the instant case. In said case, a
person identifying himself as Professor Jose Cruz, dean of the De
la Salle College, placed an order by telephone with petitioner for
406 books, payable upon delivery. Petitioner agreed, prepared the
corresponding invoice and delivered the books as ordered, for
which Cruz issued a personal check covering the purchase price.
Two (2) days later, Cruz sold 120 books to private respondent
Leonor Santos who, after verifying the seller's ownership from the
invoice the former had shown her, paid the purchase
price of P1,700.00. Petitioner became suspicious over a second
order placed by Cruz even before his first check had cleared,
hence, it made inquiries with the De la Salle College. The latter
informed the petitioner that Cruz was not in its employ. Further
verification revealed that Cruz had no more account or deposit with
the bank against which he drew the check. Petitioner sought the
assistance of the police which then set a trap and arrested Cruz.
Investigation disclosed his real name, Tomas de la Pea, and his
sale of 120 of the books to Leonor Santos. On the night of the
arrest; the policemen whose assistance the petitioner sought,
forced their way into the store of Leonor and her husband,
threatened her with prosecution for the buying of stolen property,
seized the 120 books without a warrant and thereafter turned said
books over to the petitioner. The Santoses then sued for
recovery of the books in the Municipal Trial Court which
decided in their favor; this decision was subsequently affirmed by
the Regional Trial Court and sustained by the Court of Appeals.
Hence, the petitioner came to this Court by way of a petition for
review wherein it insists that it was unlawfully deprived of the
books because as the check bounced for lack of funds, there was
failure of consideration that nullified the contract of sale between it
and the impostor who then acquired no title over the books. We
rejected said claim in this wise:
"The contract of sale is consensual and is perfected once
agreement is reached between the parties on the subject matter
and the consideration. According to the Civil Code:
ART. 1475. The contract of sale is perfected at the moment there
is a meeting of minds upon the thing which is the object of the
contract and upon the price.
From that moment, the parties may reciprocally demand
performance, subject to the provisions of the law governing the
form of contracts. prcd
xxx xxx xxx
ART. 1477. The ownership of the thing sold shall be transferred to
the vendee upon the actual or constructive delivery thereof.
ART. 1478. The parties may stipulate that ownership in the thing
shall not pass to the purchaser until he has fully paid the price.
It is clear from the above provisions, particularly the last one
quoted, that ownership in the thing sold shall not pass to the buyer
until full payment of the purchase price only if there is a stipulation
to that effect. Otherwise, the rule is that such ownership shall pass
from the vendor to the vendee upon the actual or constructive
delivery of the thing sold even if the purchase price has not yet
been paid.
Non-payment only creates a right to demand payment or to rescind
the contract, or to criminal prosecution in the case of bouncing
checks. But absent the stipulation above noted, delivery of the
thing sold will effectively transfer ownership to the buyer who
can in turn transfer it to another." 13
In the early case of Chua Hai vs. Hon. Kapunan, 14 one Roberto
Soto purchased from the Youngstown Hardware, owned by private
respondent, corrugated galvanized iron sheets and round iron bars
for P6,137.70, in payment thereof, he issued a check drawn
against the Security Bank and Trust Co. without informing Ong
Shu that he (Soto) had no sufficient funds in said bank to answer
for the same. In the meantime, however, Soto sold the sheets to,
among others, petitioner Chua Hai. In the criminal case filed
against Soto, upon motion of the offended party, the respondent
Judge ordered petitioner to return the sheets which were
purchased from Soto. Petitioner's motion for reconsideration
having been denied, he came to this Court alleging grave
abuse of discretion and excess of jurisdiction. In answer to the
petition, it is claimed that inter alia, even if the property was
acquired in good faith, the owner who has been unlawfully
deprived thereof may recover it from the
person in possession of the same unless the property was
acquired in good faith at a public sale. 15Resolving this specific
issue, this Court ruled that Ong Shu was not illegally
deprived of the possession of the property:
". . . It is not denied that Ong Shu delivered the sheets to Soto
upon a perfected contract of sale, and such delivery transferred
title or ownership to the purchaser. Says Art. 1496:
'Art. 1496. The ownership of the thing sold is acquired by the
vendee from the moment it is delivered to him in any of the ways
specified in articles 1497 to 1501, or in any other manner
signifying an agreement that the possession is transferred from the
vendor to the vendee.' (C.C.)
The failure of the buyer to make good the price does not, in law,
cause the ownership to revest in the seller until and unless the
bilateral contract of sale is first rescinded or resolved pursuant to
Article 1191 of the new Civil Code. llcd
And, assuming that the consent of Ong Shu to the
sale in favor of Soto was obtained by the latter through fraud or
deceit, the contract was not thereby rendered void ab initio, but
only voidable by reason of the fraud, and Article 1390 expressly
provides that:
'ART. 1390. The following contracts are voidable or annullable,
even though there may have been no damage to the contracting
parties:
(1) Those where one of the parties is incapable of giving consent
to a contract;
(2) Those where the consent is vitiated by mistake, violence,
intimidation, undue influence or fraud.
These contracts are binding, unless they are annulled by a proper
action in court. They are susceptible of ratification.'
Agreeably to this provision, Article 1506 prescribes:
'ARTICLE 1506. Where the seller of goods has a voidable title
thereto, but his title has not been avoided at the time of the sale,
the buyer acquires a good title to the goods, provided he buys
them in good faith, for value, and without notice of the seller's
defect of title.' (C.C.)
Hence, until the contract of Ong Shu with Soto is set aside by a
competent court (assuming that the fraud is established to its
satisfaction), the validity ofappellant's claim to the
property in question can not be disputed, and his right to the
possession thereof should be respected." 16
It was therefore erroneous for the respondent Court to declare that
the private respondent was illegally deprived of the car simply
because the check inpayment therefor was subsequently
dishonored; said Court also erred when it divested the petitioner,
a buyer in good faith who paid valuable consideration
therefor, of his possession thereof. LLjur
WHEREFORE, the challenged decision of the
respondent Court of Appeals of 22 September 1988 and its
Resolution of 12 December 1988 in C.A.-G.R. CV No. 05955 are
hereby SET ASIDE and the Decision of the trial court of 3
September 1979 and its Final Order of 26 June 1980 in Civil Case
No. Q-24200 are hereby REINSTATED, with costs against private
respondent Citiwide Motors, Inc.
SO ORDERED.
||| (Ledesma v. Court of Appeals, G.R. No. 86051, [September 1,
1992], 288 PHIL 52-64)
D. Fruits
CASES:
Azarcon and Abobo v. Eusebio 105 SCRA 569
 Cordero v. Cabral 123 SCRA 532

E. Expenses

CASES:
Mendoza and Enriquez v. De Guzman 52 Phil. 164
74. Robles and Martin v. Lizzaraga Hermanos , etc. 42 Phil.
584
75. Metropolitan Waterworks and Sewerage System v. CA
143 SCRA 623

F. Possession of Animals

Title 6 Usufruct

A. Concept of Usufruct
1. Kinds of Usufruct
2. Special Usufructs

CASES:
Bachrach v. Seifert and Elianoff 87 Phil. 483
Hemedes v. Court of Appeals 316 SCRA 347

B. Rights of the Usufructuary (Arts. 566-582)

CASE:
Fabie v. Guiterrez David 75 Phil. 536

C. Obligations of the Usufructuary (Arts. 583-602)

CASE:
Vda. de Aranas v. Aranas 150 SCRA 415

D. Rights of the Owner

E. Obligations of the Owner
F. Extinguishment of Usufruct (Arts. 603-612)

CASE:
Locsin v. Valenzuela 173 SCRA 454
Title 7 Easements or Servitudes
A. Easements in General (Arts. 613-633)
1. Characteristics of Easements
2. Classifications of Easements
3. Dominant Owner vs. Servient Owner
4. Extinguishment of Easements
B. Legal Easements (Arts. 634-687)
1. Easements Relating to Waters
2. Easement of Right of Way
3. Easement of Party Wall
4. Easement of Light and View
5. Drainage of Buildings
6. Intermediate Distances and Works for Certain
Constructions and Plantings
7. Easement Against Nuisance
8. Lateral and Subjacent Support
C. Voluntary Easements (Arts. 688-693)
CASES:
Valisno v. Adriano 161 SCRA 398
FIRST DIVISION
[G.R. No. L-37409. May 23, 1988.]
NICOLAS VALISNO, plaintiff-appellant, vs. FELIPE
ADRIANO, defendant-appellee.
Honorio Valisno Garcia I for plaintiff-appellant.
Felipe K. Medina for defendant-appellee.
DECISION
GRIO-AQUINO, J p:
This case was certified to this Court by the Court of Appeals in a
resolution dated August 10, 1973, the sole issue being a question
of law and beyond its jurisdiction to decide.
FACTS:
On June 20, 1960, the plaintiff-appellant file against the defendant-
appellee an action for damages docketed as Civil Case No. 3472
in the Court of First Instance of Nueva Ecija. The complaint alleged
that the plaintiff is the absolute owner and actual possessor of a
557,949-square-meter parcel of land in La Fuente, Santa Rosa,
Nueva Ecija, and more particularly described in his Transfer
Certificate of Title No. NT-16281.
The plaintiff-appellant Valisno bought the land from the defendant-
appellee's sister, Honorata Adriano Francisco, on June 6, 1959.
(Deed of Absolute Sale, Exh. "A".) The land which is planted with
watermelon, peanuts, corn, tobacco, and other vegetables adjoins
that of the appellee Felipe Adriano on the bank of the Pampanga
River. Both parcels of land had been inherited by Honorata
Adriano Francisco and her brother, Felipe Adriano, from their
father, Eladio Adriano.
At the time of the sale of the land to Valisno, the land was irrigated
by water from the Pampanga River through a canal about seventy
(70) meters long, traversing the appellee's land.
On December 16, 1959, the appellee levelled a portion of the
irrigation canal so that the appellant was deprived of the irrigation
water and prevented from cultivating his 57-hectare land.
The appellant filed in the Bureau of Public Works and
Communications a complaint for deprivation of water rights. A
decision was rendered on March 22, 1960 ordering Adriano to
reconstruct the irrigation canal, "otherwise judicial action shall be
taken against him under the provisions of Section 47 of Act 2152
(the Irrigation Act), as amended." Instead of restoring the irrigation
canal, the appellee asked for a reinvestigation of the case by the
Bureau of Public Works and Communications. A reinvestigation
was granted.
In the meantime, plaintiff Valisno rebuilt the irrigation canal at his
own expense because his need for water to irrigate his watermelon
fields was urgent.
On June 20, 1960, he filed a complaint for damages in the Court
of First Instance (now Regional Trial Court) of Nueva Ecija (Civil
Case No. 3472) claiming that he suffered damages amounting to
P8,000 when he failed to plant his fields that year (1960) for lack
of irrigation water, P800 to reconstruct the canal on defendant
Adriano's land, and P1,500 for attorney's fees and the costs of suit.
On October 25, 1961, the Secretary of Public Works and
Communications reversed the Bureau's decision by issuing a final
resolution dismissing Valisno's complaint. The Secretary held that
Eladio Adriano's water rights which had been granted in 1923
ceased to be enjoyed by him in 1936 or 1937, when his irrigation
canal collapsed. His non-use of the water right since then for a
period of more than five years extinguished the grant by operation
of law, hence the water rights did not form part of his hereditary
estate which his heirs partitioned among themselves. Valisno, as
vendee of the land which Honorata received from her father's
estate did not acquire any water rights with the land
purchased.
In his answer to the damage suit (Civil Case No. 3472), the
defendant Felipe Adriano admitted that he levelled the irrigation
canal on his land, but he averred: that neither his late father nor
his sister Honorata possessed water rights for the land which she
sold to the appellant; that he (the appellee) applied for water rights
for his land in 1956 and obtained the same in 1958; and that he
had a perfect right to level his land for his own use because he
merely allowed his sister to use his water rights when she still
owned the adjacent land. He set up a counterclaim for P3,000 as
damages incurred by him in levelling the land on which the
appellant dug an irrigation canal, P2,000 as actual damages,
P3,000 as attorney's fees, and expenses of litigation.
In a decision dated April 21, 1966, the trial court held that the
plaintiff had no right to pass through the defendant's land to draw
water from the Pampanga River. It pointed out that under Section
4 of the Irrigation Law, controversies between persons claiming a
right to water from a stream are within the jurisdiction of the
Secretary of Public Works and his decision on the matter is final,
unless an appeal is taken to the proper court within thirty days.
The court may not pass upon the validity of the decision of the
Public Works Secretary collaterally. Furthermore, there was
nothing in the plaintiff's evidence to show that the resolution was
not valid. It dismissed the complaint and counterclaim.
The plaintiff's motion for reconsideration of the decision was
denied by the trial court. The plaintiff appealed to the Court of
Appeals which certified the case to Us upon the legal question of
whether the provisions of the Irrigation Act (Act No. 2152) or those
of the Civil Code should apply to this case.
The plaintiff-appellant argues that while the trial court correctly
held that the Secretary of Public Works may legally decide who
between the parties is entitled to apply for water rights under
the Irrigation Act, it erred in ruling that the Secretary has authority
to hear and decide the plaintiff's claim for damages for the
defendant's violation of his (plaintiff's) right to continue to enjoy the
easement of aqueduct or water through the defendant's land
under Articles 642, 643, and 646 of the Civil Code, which provide:
"Article 642. Any person who may wish to use upon his own estate
any water of which he can dispose shall have the right to make it
flow through the intervening estates, with the obligation to
indemnify their owners, as well as the owners of the lower estates
upon which the waters may filter or descend.
"Article 643. One desiring to make use of the right granted in the
preceding article is obliged:
"(1) To prove that he can dispose of the water and that it is
sufficient for the use for which it is intended;
"(2) To show that the proposed right of way is the most convenient
and the least onerous to third persons;
"(3) To indemnify the owner of the servient estate in the manner
determined by the laws and regulations.
"Article 646. For legal purposes, the easement of aqueduct shall
be considered as continuous and apparent, even though the flow
of the water may not be continuous, or its use depends upon the
needs of the dominant estate, or upon a schedule of alternate days
or hours."
HELD:
The existence of the irrigation canal on defendant's land for the
passage of water from the Pampanga River to Honorata's land
prior to and at the time of the sale of Honorata's land to the plaintiff
was equivalent to a title for the vendee of the land to continue using
it, as provided in Article 624 of the Civil Code:
"Article 624. The existence of an apparent sign of easement
between two estates, established or maintained by the owner of
both shall be considered should either of them be alienated, as a
title in order that the easement may continue actively and
passively unless at the time the ownership of the two estates is
divided, the contrary should be provided in the title of conveyance
of either of them, or the sign aforesaid should be removed before
the execution of the deed. This provision shall also apply in case
of the division of a thing owned in common by two or more
persons" (Civil Code)
This provision was lifted from Article 122 of the Spanish Law of
Waters which provided:
"Article 122. Whenever a tract of irrigated land which previously
received its waters from a single point is divided through
inheritance, sale or by virtue of some other title, between two or
more owners, the owners of the higher estates are under
obligation to give free passage to the water as an easement of
conduit for the irrigation of the lower estates, and without right to
any compensation therefore unless otherwise stipulated in the
deed of conveyance." (Art. 122, Spanish Law of Waters of August
3, 1866.)
No enlightened concept of ownership can shut out the idea of
restrictions thereon, such as easements. Absolute and unlimited
dominion is unthinkable, inasmuch as the proper enjoyment of
property requires mutual service and forbearance among
adjoining estates (Amor vs. Florentino, 74 Phil. 403).
As indicated in the decision dated March 22, 1960 of the Bureau
of Works "the principal issue involved in this case falls under the
subject of servitude of waters which are governed by Article 648
of the new Civil Code and the suppletory laws mentioned in the
cases of Lunod vs. Meneses (11 Phil. 128) and Osmea vs.
Camara (C.A. 380 62773) which are the irrigation law and the
Spanish Law of Waters of August 3, 1866, specifically Article 122
thereof.
The deed of sale in favor of Valisno included the "conveyance
and transfer of the water rights and improvements"
appurtenant to Honorata Adriano's property. By the terms of
the Deed of Absolute Sale, the vendor Honorata Adriano
Francisco sold, ceded, conveyed and transferred to Dr. Nicolas
Valisno all "rights, title, interest and participations over the parcel
of land above-described, together with one Berkely Model 6 YRF
Centrifugal Pump G" suction, 6" discharge 500-1500 GPM, with
Serial No. 5415812 and one (1) set of suction pipe and discharge
of pipe with elbow, nipples, flanges and footvalves," and the water
rights and such other improvements appertaining to the property
subject of this sale. According to the appellant, the water right was
the primary consideration for his purchase of Honorata's property,
for without it the property would be unproductive.
Water rights, such as the right to use a drainage ditch for
irrigation purposes, which are appurtenant to a parcel of land,
pass with the conveyance of the land, although not specifically
mentioned in the conveyance. The purchaser's easement of
necessity in a water ditch running across the grantor's land cannot
be defeated even if the water is supplied by a third person (Watson
vs. French, 112 Me 371, 19 C.J. 868-897). The fact that an
easement by grant may also have qualified as an easement of
necessity does not detract from its permanency as property right,
which survives the determination of the necessity (Benedicto vs.
CA, 25 SCRA 145).
As an easement of waters in favor of the appellant has been
established, he is entitled to enjoy it free from obstruction,
disturbance or wrongful interference (19 CJ 984), such as the
appellee's act of levelling the irrigation canal to deprive him of the
use of water from the Pampanga River.
WHEREFORE, the appealed decision is set aside, and a new one
is entered ordering the appellee to grant the appellant continued
and unimpeded use of the irrigation ditch traversing his land in
order to obtain water from the Pampanga River to irrigate
appellant's land. Let the records of this case be remanded to the
court a quo for the reception of evidence on the appellant's claim
for damages.
SO ORDERED.
||| (Valisno v. Adriano, G.R. No. L-37409, [May 23, 1988], 244
PHIL 419-425)
Ronquillo, et al. v. Roco, et al. 103 Phil. 84
EN BANC
[G.R. No. L-10619. February 28, 1958.]
LEOGARIO RONQUILLO, ET AL., plaintiffs-appellants, vs.
JOSE ROCO, as Administrator of VICENTE ROCO Y
DOMINGUEZ, ET AL., defendants-appellees.
Moises B. Cruz for appellants.
Vicente Roco, Jr. for appellees.
SYLLABUS
1. EASEMENTS; CLASSIFIED AND HOW THEY ARE
ACQUIRED. Under the Old as well as the New Civil Code,
easements may be continuous or discontinuous (intermittent),
apparent or non-apparent, discontinuous being those used at
more or less long intervals and which depend upon acts of man
(Articles 532 and 615 of the Old and New Civil Codes,
respectively). Continuous and apparent easements are acquired
either by title or prescription, continuous non-apparent easements
and discontinuous ones whether apparent or not, may be acquired
only by virtue of a title. Articles 537 and 539, and 620 and 622 of
the Old and New Civil Codes respectively.)
2. ID.; EASEMENT OF RIGHT OF WAY MAY NOT BE
ACQUIRED THROUGH PRESCRIPTION. Under the
provisions of Articles 537 and 539, and 620 and 622 of the Old and
New Civil Codes, respectively, the easement of right of way may
not be acquired through prescription.
DECISION
MONTEMAYOR, J p:
Involving as it does only a question of law, the present appeal from
the order of the Court of First Instance of Camarines Sur, dated
March 6, 1955, dismissing the amended and supplemental
complaint of plaintiffs on motion of defendants that it did not state
a cause of action, was taken directly to this Court.
FACTS:
"The amended and supplemental complaint alleges that the
plaintiffs have been in the continuous and uninterrupted use of a
road or passage way which traversed the land of the defendants
and their predecessors in interest, in going to Igualdad Street and
the market place of Naga City, from their residential land and back,
for more than 20 years; that the defendants and the tenants of
Vicente Roco, the predecessors in interest of the said defendants
have long recognized and respected the private legal easement of
road right of way of said plaintiffs; that on May 12, 1953, the
defendants Jose Roco thru his co-defendants, Raymundo
Martinez and their men with malice aforethought and with a view
to obstructing the plaintiffs' private legal easement over the
property of the late Vicente Roco, started constructing a chapel in
the middle of the said right of way construction actually impeded,
obstructed and disturbed the continuous exercise of the rights of
the plaintiffs over said right of way; that on July 10, 1954 the new
defendants Natividad Roco and Gregorio Miras, Jr. with the
approval of the defendant, Jose Roco and with the help of their
men and laborers, by means of force, intimidation, and threats,
illegally and violently planted wooden posts, fenced with barbed
wire and closed hermitically the road passage way and their right
of way in question against their protests and opposition, thereby
preventing them from going to or coming from their homes to
Igualdad Street and the public market of the City of Naga.
"It is very clear from the allegations of the plaintiffs in their
amended and supplemental complaint, that they claim to have
acquired the easement of right of way over the land of the
defendants and the latter's predecessors in interest, Vicente Roco,
thru prescription by their continuous and uninterrupted use of a
narrow strip of land of the defendants as passage way or road in
going to Igualdad Street and the public market of Naga City, from
their residential land or houses, and return.
ISSUE:
"The only question therefore to be determined in this case, is
whether an easement of right of way can be acquired thru
prescription."
HELD:
The dismissal was based on the ground that an easement of right
of way though it may be apparent is, nevertheless, discontinuous
or intermittent and, therefore, cannot be acquired through
prescription, but only by virtue of a title. Under the Old as well as
the New Civil Code, easements may be Continuous or
discontinuous (intermittent), apparent or non-apparent,
discontinuous being those used at more or less long intervals and
which depend upon acts of man (Articles 532 and 615 of the Old
and New Civil Codes, respectively). Continuous and apparent
easements are acquired either by title or prescription, continuous
non-apparent easements and discontinuous ones whether
apparent or not, may be acquired only by virtue of a title (Articles
537 and 539, and 620 and 622 of the Old and New Civil Codes,
respectively).
Both Manresa and Sanchez Roman are of the opinion that the
easement of right of way is a discontinuous one:
"En cambio, las servidumbres discontinuos se ejercitan por un
hecho del hombre, y precisamente por eso son y tienen que ser
discontinuas, porque es imposible fisicamente que su uso sea
incesante. Asi, la servidumbre de paso es discontinua, porque no
es posible que el hombre est pasando continuamente por el
camino, vereda o senda de que se trate." (4 Manresa, Codigo Civil
Espaol, 5th ed., p. 529).
. . . "5 Por razon de los modos de disfrutar las servidumbres, en
continuas y discontinuas (1). Las continuas son aquellas cuyo uso
es o puede ser incesante, sin la intervencion de ningun hecno del
hombre, como son las de luces y otras de la misma especie; y
las discontinuas, las que se usan intervalos, ms o menos
largos, y dependen de actos del hombre, como las de senda,
carrera y otras de esta clase." (3 Sanches Roman, Derecho Civil,
p. 488).
Under the provisions of the Civil Code, old and new, particularly
the articles thereof aforecited, it would therefore appear that the
easement of right of way may not be acquired through
prescription. Even Article 1959 of the Old Civil Code providing for
prescription of ownership and other real rights in real property,
excludes therefrom the exception established by Article 539,
referring to discontinuous easements, such as, easement of right
of way. (Bargayo vs. Camumot, 40 Phil., 857, 867).
In the case of Cuayong vs. Benedicto, 37 Phil., 781 where the
point in issue was whether or not vested rights in a right of way
can be acquired through user from time immemorial, this Court
said:
"It is evident, therefore, that no vested right by user from time
immemorial had been acquired by plaintiffs at the time the Civil
Code took effect. Under that Code (Article 539) no discontinuous
easement could be acquired by prescription in any event."
However, in the case of Municipality of Dumangas vs. Bishop of
Jaro, 34 Phil., 545, this same Tribunal held that the continued use
by the public of a path over land adjoining the Catholic church in
going to and from said church through its side door, has given the
church the right to such use by prescription, and that because of
said use by the public, an easement of right of way over said land
has been acquired by prescription, not only by the church, but also
by the public, which without objection or protest on the part of the
owner of said land, had continually availed itself of the easement.
The minority of which the writer of this opinion is a part, believes
that the easement of right of way may now be acquired through
prescription, at least since the introduction into this jurisdiction of
the special law on prescription through the Old Code of Civil
Procedure, Act No. 190. Said law, particularly, Section 41 thereof,
makes no distinction as to the real rights which are subject to
prescription, and there would appear to be no valid reason, at least
to the writer of this opinion, why the continued use of a path or a
road or right of way by the party, specially by the public, for ten
years or more, not by mere tolerance of the owner of the land, but
through adverse use of it, Cannot give said party a vested right to
such right of way through prescription.
"The uninterrupted and continuous enjoyment of a right of way
necessary to constitute adverse possession does not require the
use thereof every day for the statutory period, but simply the
exercise of the right more or less frequently according to the nature
of the use. (17 Am. Jur. 972)"
Even under the case of Cuaycong vs. Benedicto (supra), this
Tribunal insinuated that the rule that no discontinuous easement,
like an easement of right of way, may, under Article 539 of the Old
Civil Code, be acquired, might possibly have been changed by the
provisions of the Code of Civil Procedure relative to prescription.
. . . "Assuming, without deciding, that this rule has been changed
by the provisions of the present Code of Civil Procedure relating
to prescription, and that since its enactment discontinuous
easement may be acquired by prescription, it is clear that this
would not avail plaintiffs. The Code of Civil Procedure went into
effect on October 1, 1901. The term of prescription for the
acquisition of rights in real estate is fixed by the Code (section 41)
at ten years. The evidence shows that in February, 1911 before
the expiration of the term of ten years since the time the Code of
Civil Procedure took effect, the defendants interrupted the use of
the road by plaintiffs by constructing and maintaining a toll gate on
it and collecting toll from persons making use of it with carts and
continued to do so until they were enjoined by the granting of the
preliminary injunction by the trial court in December 1912." . . .
(Cuayong vs. Benedicto, 37 Phil., 781,796).
Professor Tolentino in his Commentaries and Jurisprudence on
the Civil Code, Vol. I, p. 340, would appear to be of the opinion
that under the provisions of the Code of Civil Procedure relative to
prescription, even discontinuous easements, like the easement of
right of way, may be acquired through prescription:
. . . "It is submitted that under Act No. 190, even discontinuous
servitudes can be acquired by prescription, provided it can be
shown that the servitude was 'actual, open, public, continuous,
under a claim of title exclusive of any other right and adverse to all
other claimants'." However, the opinion of the majority must
prevail, and it is held that under the present law, particularly, the
provisions of the Civil Code, old and new, unless and until the
same is changed or clarified, the easement of right of way may not
be acquired through prescription.
||| (Ronquillo v. Roco, G.R. No. L-10619, [February 28, 1958], 103
PHIL 84-92)
Taedo v. Bernad 165 SCRA 86
SECOND DIVISION
[G.R. No. 66520. August 30, 1988.]
EDUARDO C. TAEDO, petitioner, vs. HON. JUANITO
A. BERNAD, Presiding Judge of the Regional Trial Court, 7th
Judicial Region, Branch XXI, Cebu City; Spouses ROMEO SIM
and PACITA S. SIM; and Spouses ANTONIO CARDENAS and
MAE LINDA CARDENAS, respondents.
Numeriano F . Capangpangan for petitioner.
Meinrado P. Paredes for private respondents.
SYLLABUS
1. REMEDIAL LAW; COMPLAINT; DISMISSAL THEREOF FOR
LACK OF CAUSE OF ACTION; EXPLAINED. The dismissal of
the complaint on the ground of lack of cause of action, is
precipitate. The settled rule where dismissal of an action is sought
on the ground that the complaint does not state a cause of action
is, that the insufficiency of the cause of action must appear on the
face of the complaint. And the test of the sufficiency of the ultimate
facts alleged in the complaint to constitute a cause of action, is
whether or not, admitting the facts alleged, the court can render a
valid judgment upon the same in accordance with the prayer of the
complaint. For this purpose, the movant is deemed to admit
hypothetically the truth of the facts thus averred.
2. CIVIL LAW; DAMAGES; DETERMINED IN A TRIAL IN CASE
OF BREACH OF PROMISE TO SELL. Considering the
admission of defendant Cardenas, and that his promise to sell Lot
7501-B to Eduardo Taedo appears to be for a valuable
consideration, a trial is necessary to determine, at the very least,
the amount of damages suffered by the plaintiff
Eduardo Taedo by reason of such breach of promise to sell, if
indeed there is such a breach.
3. ID.; EASEMENT; ALIENATION OF DOMINANT AND
SERVIENT ESTATES, NOT GROUND FOR ITS
EXTINGUISHMENT; CASE AT BAR. The finding of the trial
court that petitioner Taedo's right to continue to use the septic
tank, erected on Lot 7501-B, ceased upon the subdivision of the
land and its subsequent sale to different owners who do not have
the same interest, also appears to be contrary to law. Article 631
of the Civil Code enumerates the grounds for the extinguishment
of an easement. The alienation of the dominant and servient
estates to different persons is not one of the grounds for the
extinguishment of an easement. On the contrary, use of the
easement is continued by operation of law. Article 624 of the Civil
Code provides: "Art. 624. The existence of an apparent sign of
easement between two estates, established or maintained by the
owner of both, shall be considered, should either of them be
alienated, as a title in order that the easement may continue
actively and passively, unless, at the time the ownership of the two
estates is divided, the contrary should be provided in the title of
conveyance of either of them, or the sign aforesaid should be
removed before the execution of the deed. This provision shall
also apply in case of the division of a thing owned in common by
two or more persons." In the instant case, no statement abolishing
or extinguishing the easement of drainage was mentioned in the
deed of sale of Lot 7501-A to Eduardo Taedo. Nor did Antonio
Cardenas stop the use of the drain pipe and septic tank by the
occupants of Lot 7501-A before he sold said lot to
Eduardo Taedo. Hence, the use of the septic tank is continued
by operation of law. Accordingly, the spouses Romeo and Pacita
Sim, the new owners of the servient estate (Lot 7501-B), cannot
impair, in any manner whatsoever, the use of the servitude.
DECISION
PADILLA, J p:
This is a petition for review on certiorari of the Order issued by the
respondent judge, Hon. Juanito A. Bernad, on 5 December 1983,
which dismissed the complaint for legal redemption filed by the
petitioner in Civil Case No. CEB-994 of the Regional Trial Court of
Cebu, and the Order of the same respondent judge, dated 20
January 1984, which denied petitioner's motion for
reconsideration.
FACTS:
The private respondent Antonio Cardenas was the owner of two
(2) contiguous parcels of land situated in Cebu City which he had
inherited from Lourdes Cardenas and more particularly known as
Lot 7501-A, with an area of 140 square meters and Lot 7501-B,
with an area of 612 square meters. On Lot 7501-A is constructed
an apartment building, while the improvements on Lot 7501-B
consist of one four-door apartment of concrete and strong
materials; one two-storey house of strong materials; a bodega of
strong materials; and a septic tank for the common use of the
occupants of Lots 7501-A and 7501-B. A small portion of the
apartment building on Lot 7501-A also stands on Lot 7501-B.
On 5 February 1982, said Antonio Cardenas sold Lot 7501-A to
herein petitioner Eduardo C. Taedo.
Antonio Cardenas, on that same day, also mortgaged Lot 7501-B
to said Eduardo C. Taedo as a security for the payment of a loan
in the amount of P10,000.00.
Antonio Cardenas further agreed that he would sell Lot 7501-B
only to Eduardo Taedo in case he should decide to sell it, as the
septic tank in Lot 7501-B services Lot 7501-A and the apartment
building on Lot 7501-A has a part standing on Lot 7501-B. This
was confirmed in a letter, dated 26 February 1982, wherein
Antonio Cardenas asked Taedo not to deduct the mortgage loan
of P10,000.00 from the purchase price of Lot 7501-A "because as
we have previously agreed, I will sell to you Lot 7501-B." 3
Antonio Cardenas, however, sold Lot 7501-B to the herein
respondent spouses Romeo and Pacita Sim. 4 Upon learning of
the sale, Eduardo Taedo offered to redeem the property from
Romeo Sim. But the latter refused. Instead, Romeo Sim blocked
the sewage pipe connecting the building of
Eduardo Taedo built on Lot 7501-A, to the septic tank in Lot
7501-B. He also asked Taedo to remove that portion of his
building encroaching on Lot 7501-B. As a result, Eduardo Taedo,
invoking the provisions of Art. 1622 of the Civil Code, filed an
action for legal redemption and damages, with a prayer for the
issuance of a writ of preliminary injunction, before the Regional
Trial Court of Cebu, docketed therein as Civil Case No. CEB-994,
against the spouses Romeo and Pacita Sim, Antonio Cardenas
and his wife Mae Linda Cardenas, the Register of Deeds of Cebu
City, and Banco Cebuano, Cebu City Development Bank. 5
Answering, the spouses Romeo and Pacita Sim claimed that they
are the absolute owners of Lot 7501-B and that
Eduardo Taedo has no right to redeem the land under Art. 1622
of the Civil Code as the land sought to be redeemed is much bigger
than the land owned by Taedo. 6
Antonio Cardenas, upon the other hand, admitted that he had
agreed to sell Lot 7501-B to Eduardo Taedo and claimed by way
of cross-claim against the spouses Romeo and Pacita Sim, that
the Deed of Sale he had executed in favor of said spouses was
only intended as an equitable mortgage, to secure the payment of
amounts received by him from said spouses as petty loans. 7
In answer to the cross-claim, the spouses Romeo and Pacita Sim
insisted that the sale executed by Antonio Cardenas of Lot 7501-
B in their favor was an absolute one. 8
Thereafter, or on 14 October 1983, the spouses Romeo and Pacita
Sim filed motions to dismiss the complaint and the cross-claim, for
lack of cause of action. 9
Acting upon these motions and other incidental motions, the
respondent judge issued the questioned order of 5 December
1983 dismissing the complaint and cross-claim. 10
Taedo filed a motion for reconsideration of the order, but his
motion was denied on 20 January 1984. 11
Hence, the present recourse by petitioner Taedo.
HELD:
The Court finds merit in the petition. The dismissal of the complaint
on the ground of lack of cause of action, is precipitate. The settled
rule where dismissal of an action is sought on the ground that the
complaint does not state a cause of action is, that the insufficiency
of the cause of action must appear on the face of the complaint.
And the test of the sufficiency of the ultimate facts alleged in the
complaint to constitute a cause of action, is whether or not,
admitting the facts alleged, the court can render a valid judgment
upon the same in accordance with the prayer of the complaint. For
this purpose, the movant is deemed to admit hypothetically the
truth of the facts thus averred. 12
In the instant case, it cannot be denied that
petitioner Taedo cannot redeem the entire Lot 7501-B from the
spouses Romeo and Pacita Sim pursuant to the provisions of Art.
1622 of the Civil Code, since the lot sought to be redeemed, has
an area of 612 square meters which is much bigger, area-wise,
than the lot owned by petitioner Taedo. However, the petitioner
seeks to purchase only that small portion of Lot 7501-B occupied
by his apartment building, because the spouses Romeo and
Pacita Sim had told him to remove that portion of his building which
encroaches upon Lot 7501-B. Whether or not this is possible
should have been determined at the pre-trial stage or trial on the
merits.
Besides, the action of petitioner Taedo is also one for recovery of
damages by reason of breach of promise by the respondent
Antonio Cardenas to sell Lot 7501-B. Paragraphs 3 and 4 of the
amended complaint read, as follows:
"3. That by written agreement, plaintiff and defendant spouses
Antonio Cardenas and Mae Linda Cardenas agreed that in the
event they decide to sell the adjacent Lot No. 7501-B of the
subdivision plan (LRC) Psd. 23638, a portion of Lot No. 7501 of
the cadastral survey of Cebu, LRC (GLRC) Cad. Record No. 9465,
situated in the City of Cebu, containing an area of SIX HUNDRED
TWELVE (612) Square meters more or less which lot is adjacent
to Lot No. 7501-A of the plaintiff and where part of the plaintiff's
apartment is standing on, the same should be sold to the plaintiff,
but far from compliance of the written agreement, defendant
spouses Antonio Cardenas and Mae Linda
Cardenas sureptiously [sic] sold the aforestated Lot No. -7501-B-
to the defendant spouses, Romeo Sim and Pacita Sim on July 23,
1932 as per Deed of Sale notarized by Notary Public, Jorge S.
Omega and entered in his Notarial Register as Doc. No. 462; Page
No.-94-; Book No. 11, Series of 1982;
"4. That due to the sale by the defendant spouses Antonio
Cardenas and Mae Linda Cardenas of the property in question to
spouses Romeo Sim and Pacita Lim, plaintiff suffered moral
damages in the form of mental anguish, sleepless nights, mental
torture, for which he is entitled to a compensation in the amount to
be established during the trial of the case and has incurred
litigation expenses subject for reimbursement and attorneys fee in
the sum of P10,000.00 which should be chargeable to both
defendant spouses;" 13 and the plaintiff (herein petitioner) prayed,
among others: "(c) That defendant spouses Romeo Sim and
Pacita Sim, and spouses Antonio Cardenas and Mae Linda
Cardenas be ordered to pay plaintiff moral damages, litigation
expenses and attorneys fees in the amount of P50,000.00." 14
That there was a written agreement, as alleged in the complaint,
between the plaintiff Eduardo Taedo and the defendant Antonio
Cardenas is admitted by the latter. In his answer, he alleged the
following:
"ALLEGATIONS as to written agreement is ADMITTED, but,
specifically denies that herein defendants SUREPTIOUSLY [sic]
SOLD the lot in question to the other defendant Spouses Sim, the
truth is, that the herein defendants [sic] was required to execute
the Deed of Sale described in this paragraph 3 as security for the
personal loans and other forms of indebtedness incurred from the
Spouses Sims but never as a conveyance to transfer
ownership;" 15
Considering this admission of defendant Cardenas, and that his
promise to sell Lot 7501-B to Eduardo Taedo appears to be for a
valuable consideration, a trial is necessary to determine, at the
very least, the amount of damages suffered by the plaintiff
Eduardo Taedo by reason of such breach of promise to sell, if
indeed there is such a breach.
Moreover, the finding of the trial court that petitioner Taedo's right
to continue to use the septic tank, erected on Lot 7501-B, ceased
upon the subdivision of the land and its subsequent sale to
different owners who do not have the same interest, 16 also
appears to be contrary to law. Article 631 of the Civil Code
enumerates the grounds for the extinguishment of an easement.
Said article provides:
"Art. 631. Easements are extinguished:
(1) By merger in the same person of the ownership of the dominant
and servient estates;
(2) By non-user for ten years; with respect to discontinuous
easements, this period shall be computed from the day on which
they ceased to be used; and, with respect to continuous
easements, from the day on which an act contrary to the same
took place;
(3) When either or both of the estates fall into such condition that
the easement cannot be used; but it shall revive if the subsequent
condition of the estates or either of them should again permit its
use, unless when the use becomes possible, sufficient time for
prescription has elapsed, in accordance with the provisions of the
preceding number;
(4) By the expiration of the term or the fulfillment of the condition,
if the easement is temporary or conditional;
(5) By the renunciation of the owner of the dominant estate;
(6) By the redemption agreed upon between the owners of the
dominant and servient estates."
As can be seen from the above provisions, the alienation of the
dominant and servient estates to different persons is not one of
the grounds for the extinguishment of an easement. On the
contrary, use of the easement is continued by operation of
law. Article 624 of the Civil Code provides:
"Art. 624. The existence of an apparent sign of easement between
two estates, established or maintained by the owner of both, shall
be considered, should either of them be alienated, as a title in
order that the easement may continue actively and passively,
unless, at the time the ownership of the two estates is divided, the
contrary should be provided in the title of conveyance of either of
them, or the sign aforesaid should be removed before the
execution of the deed. This provision shall also apply in case of
the division of a thing owned in common by two or more persons."
In the instant case, no statement abolishing or extinguishing the
easement of drainage was mentioned in the deed of sale of Lot
7501-A to Eduardo Taedo. Nor did Antonio Cardenas stop the
use of the drain pipe and septic tank by the occupants of Lot 7501-
A before he sold said lot to Eduardo Taedo. Hence, the use of
the septic tank is continued by operation of law. Accordingly, the
spouses Romeo and Pacita Sim, the new owners of the servient
estate (Lot 7501-B), cannot impair, in any manner whatsoever, the
use of the servitude. 17
WHEREFORE, the Orders complained of are hereby REVERSED
and SET ASIDE. The respondent judge or another one designated
in his place is directed to proceed with the trial of this case on the
merits. With costs against private respondents. prLL
SO ORDERED.
||| (Taedo v. Bernad, G.R. No. 66520, [August 30, 1988])
Costabella Corporation v. Court of Appeals 193 SCRA 333
SECOND DIVISION
[G.R. No. 80511. January 25, 1991.]
COSTABELLA CORPORATION, petitioner, vs. COURT OF
APPEALS, KATIPUNAN LUMBER CO., INC., AURORA
BUSTOS LOPEZ, MANUEL S. SATORRE, JR., JOSEFA C.
REVILLES, FELIX TIUKINHOY, JR., PERFECTA L.
CHUANGCO, and CESAR T. ESPINA, respondents.
Roco, Bunag, Kapunan & Migallos for petitioner.
Albano, Garcia & Diaz Law Offices for Katipunan Lumber Co., Inc.
Zosa & Quijano Law Offices for respondents.
SYLLABUS
1. CIVIL LAW; EASEMENT; RIGHT OF WAY; CANNOT BE
ACQUIRED BY PRESCRIPTION. It is already well-established
that an easement of right of way is discontinous and as such can
not be acquired by prescription.
2. ID.; ID.; ID.; REQUISITES OF COMPULSORY DEMAND
THEREOF. Based on Articles 649 and 650 of the New Civil
Code, the owner of the dominant estate may validly claim a
compulsory right of way only after he has established the
existence of four requisites, to wit: (1) the (dominant) estate is
surrounded by other immovables and is without adequate outlet to
a public highway; (2) after payment of the proper indemnity; (3) the
isolation was not due to the proprietor's own acts; and (4) the right
of way claimed is at a point least prejudicial to the servient estate.
Additionally, the burden of proving the existence of the foregoing
pre-requisites lies on the owner of the dominant estate.
3. ID.; ID.; ID.; STANDARD FOR GRANT. The true standard for
the grant of the legal right is "adequacy." Hence, when there is
already an existing adequate outlet from the dominant estate to a
public highway, even if the said outlet, for one reason or another,
be inconvenient, the need to open up another servitude is entirely
unjustified. For to justify the imposition of an easement of right of
way, "there must be a real, not a fictitious or artificial necessity for
it."
4. ID.; ID.; ID.; DEMANDED BY NECESSITY. Servitudes of
right of way are an ancient concept, which date back to the iter,
actus, and via of the Romans. They are demanded by necessity,
that is, to enable owners of isolated estates to make full use of
their properties, which lack of access to public roads has denied
them. Under Article 649 of the Civil Code, they are compulsory and
hence, legally demandable, subject to indemnity and the
concurrence of the other conditions above-referred to.
5. ID.; ID.; ID.; CRITERIA FOR GRANT. But while a right of way
is legally demandable, the owner of the dominant estate is not at
liberty to impose one based on arbitrary choice. Under Article 650
of the Code, it shall be established upon two criteria: (1) at the
point least prejudicial to the servient estate; and (2) where the
distance to a public highway may be the shortest. According,
however, to one commentator, "least prejudice" prevails over
"shortest distance." Yet each case must be weighed according to
its individual merits and judged according to the sound discretion
of the court. "The Court," says Tolentino, "is not bound to establish
what is the shortest; a longer way may be established to avoid
injury to the servient tenement, such as when there are
constructions or walls which can be avoided by a roundabout way,
or to secure the interest of the dominant owner, such as when the
shortest distance would place the way on a dangerous decline."
DECISION
SARMIENTO, J p:
The principal issue raised in this petition for review on certiorari of
the decision 1 dated May 30, 1986 of the Court of
Appeals, 2 which modified the decision 3rendered by the Regional
Trial Court of Lapu-Lapu City in Cebu, is whether or not the private
respondents had acquired an easement of right of way, in the form
of a passageway, on the petitioner's property.
It is admitted that the petitioner owns the real estate properties
designated as Lots Nos. 5122 and 5124 of the Opon Cadastre,
situated at Sitio Buyong, Maribago, Lapu-Lapu City, on which it
had constructed a resort and hotel.
The private respondents, on the other hand, are the owners of
adjoining properties more particularly known as Lots Nos. 5123-A
and 5123-C of the Opon Cadastre.
Before the petitioner began the construction of its beach hotel, the
private respondents, in going to and from their respective
properties and the provincial road, passed through a passageway
which traversed the petitioner's property.
In 1981, the petitioner closed the aforementioned passageway
when it began the construction of its hotel, but nonetheless opened
another route across its property through which the private
respondents, as in the past, were allowed to pass. (Later, or
sometime in August, 1982, when it undertook the construction of
the second phase of its beach hotel, the petitioner fenced its
property thus closing even the alternative passageway and
preventing the private respondents from traversing any part of it.)
As a direct consequence of these closures, an action for injunction
with damages was filed against the petitioner by the private
respondents on September 2, 1982 before the then Court of First
Instance of Cebu. 4 In their complaint, the private respondents
assailed the petitioner's closure of the original passageway which
they (private respondents) claimed to be an "ancient road right of
way" that had been existing before World War II and since then
had been used by them, the community, and the general public,
either as pedestrians or by means of vehicles, in going to and
coming from Lapu-Lapu City and other parts of the country. The
private respondents averred that by closing the alleged road right
of way in question, the petitioner had deprived them access to their
properties and caused them damages.
In the same complaint, the private respondents likewise alleged
that the petitioner had constructed a dike on the beach fronting the
latter's property without the necessary permit, obstructing the
passage of the residents and local fishermen, and trapping debris
and flotsam on the beach. They also claimed that the debris and
flotsam that had accumulated prevented them from using their
properties for the purpose for which they had acquired them. The
complaint this prayed for the trial court to order the re-opening of
the original passageway across the petitioner's property as well as
the destruction of the dike. 5
In its answer, 6 the petitioner denied the existence of an ancient
road through its property and counter-averred, among others, that
it and its predecessors-in-interest had permitted the temporary,
intermittent, and gratuitous use of, or passage through, its property
by the private respondents and others by mere tolerance and
purely as an act of neighborliness. It justified the walling in of its
property in view of the need to insure the safety and security of its
hotel and beach resort, and for the protection of the privacy and
convenience of its hotel patrons and guests. At any rate, the
petitioner alleged, the private respondents were not entirely
dependent on the subject passageway as they (private
respondents) had another existing and adequate access to the
public road through other properties.
With respect to the dike it allegedly constructed, the petitioner
stated that what it built was a breakwater on the foreshore land
fronting its property and not a dike as claimed by the private
respondents. Moreover, contrary to the private respondents'
accusation, the said construction had benefited the community
especially the fishermen who used the same as mooring for their
boats during low tide. The quantity of flotsam and debris which had
formed on the private respondents' beach front on the other hand
were but the natural and unavoidable accumulations on beaches
by the action of the tides and movement of the waves of the sea.
The petitioner's answer then assailed the private respondents'
complaint for its failure to implead as defendants the owners of the
other properties supposedly traversed by the alleged ancient road
right way, indispensable parties without whom no final adjudication
of the controversy could be rendered. 7
After trial, the court a quo rendered a decision on March 15, 1984
finding that the private respondents had acquired a vested right
over the passageway in controversy based on its long existence
and its continued use and enjoyment not only by the private
respondents, but also by the community at large. The petitioner in
so closing the said passageway, had accordingly violated the
private respondents' vested right. Thus, the trial court ordered the
petitioner:
1. To open and make available the road in question to the plaintiffs
and the general public at all times free of any obstacle thereof,
unless the defendant shall provide another road equally accessible
and convenient as the road or passage closed by the defendant;
2. To pay the plaintiff Katipunan Lumber Company, Inc. the
amount of FIVE THOUSAND PESOS (P5,000.00) a month
beginning January, 1983, and the plaintiff Perfecto Guangco the
sum of TWO HUNDRED PESOS (P200.00) a month beginning
September, 1982, representing their respective expenditures they
had incurred in other beach resorts after the road was closed, until
the passageway claimed by them is opened and made available
to them, or if the defendant chooses to provide another road, until
such road is made available and conveniently passable to the
plaintiffs and the general public; and
3. To pay the sum of FIFTEEN THOUSAND PESOS (P15,000.00)
attorney's fees, and to pay the costs. 8
Both parties elevated the trial court's decision to the Court of
Appeals, with the petitioner questioning the alleged "vested right"
of the private respondents over the subject passageway, and the
private respondents assailing the dismissal of their complaint
insofar as their prayer for the demolition of the petitioner's "dike" is
concerned.
In its decision, the respondent Appellate Court held as without
basis the trial court's finding that the private respondents had
acquired a vested right over the passageway in question by virtue
of prescription. 9 The appellate court pointed out that an easement
of right of way is a discontinuous one which, under Article 622 of
the New Civil Code, may only be acquired by virtue of a title and
not by prescription. 10 That notwithstanding, the appellate court
went on to rule that ". . . in the interest of justice and in the exercise
by this Court of its equity jurisdiction, there is no reason for Us in
not treating the easement here sought by appellees Katipunan
Lumber Co., Inc. and Perfecta Guangco as one that is not
dependent upon the claims of the parties but a compulsory one
that is legally demandable by the owner of the dominant estate
from the owner of the servient estate." 11 Thus the appellate court:
(1) granted the private respondents the right to an easement of
way on the petitioner's property using the passageway in question,
unless the petitioner should provide another passageway equally
accessible and convenient as the one it closed; (2) remanded the
case to the trial court for the determination of the just and proper
indemnity to be paid to the petitioner by the private respondents
for the said easement; and (3) set aside the trial court's award of
actual damages and attorney's fees. 12
On petitioner's motion for partial reconsideration, the respondent
court issued on October 27, 1987 a resolution 13 denying the said
motion. The Appellate Court however in denying the petitioner's
motion for reconsideration stated that:
. . . While it is true that there is another outlet for the plaintiff to the
main road, yet such outlet is a new road constructed in 1979, while
the road closed by defendant existed since over 30 years before.
Legally, the old road could be closed; but since the existing outlet
is inconvenient to the plaintiff, equitably the plaintiff should be
given a chance to pay for a more convenient outlet through the
land of the defendant at a point least prejudicial to the latter. In any
event, the plaintiff shall pay for all damages that defendant
corporation may sustain and the defendant regulates the manner
of use of the right of way to protect defendant's property and its
customers. This is the gist of Our decision. 14
Now before us, the petitioner contends that the decision of the
respondent appellate court is grossly erroneous and not in accord
with the provisions of Articles 649 and 650 of the Civil Code on
easements and the prevailing jurisprudence on the matter.
HELD:
The petition is meritorious.
It is already well-established that an easement of right of way, as
is involved here, is discontinuous 15 and as such cannot be
acquired by prescription. 16Insofar therefore as the appellate
court adhered to the foregoing precepts, it stood correct.
Unfortunately, after making the correct pronouncement, the
respondent Appellate Court did not order the reversal of the trial
court's decision and the dismissal of the complaint after holding
that no easement had been validly constituted over the petitioner's
property. Instead, the Appellate Court went on to commit a
reversible error by considering the passageway in issue as a
compulsory easement which the private respondents, as owners
of the "dominant" estate, may demand from the petitioner the latter
being the owner of the "servient" estate.
It is provided under Articles 649 and 650 of the New Civil Code
that:
Art. 649. The owner, or any person who by virtue of a real right
may cultivate or use any immovable, which is surrounded by other
immovables pertaining to other persons and without adequate
outlet to a public highway, is entitled to demand a right of way
through the neighboring estates, after payment of the proper
indemnity.
Should this easement be established in such a manner that its use
may be continuous for all the needs of the dominant estate,
establishing a permanent passage, the indemnity shall consist of
the value of the land occupied and the amount of the damage
caused to the servient estate.
In case the right of way is limited to the necessary passage for the
cultivation of the estate surrounded by others and for the gathering
of its crops through the servient estate without a permanent way,
the indemnity shall consist in the payment of the damage caused
by such encumbrance.
This easement is not compulsory if the isolation of the immovable
is due to the proprietor's own acts.
Art. 650. The easement of right of way shall be established at the
point least prejudicial to the servient estate, and, insofar as
consistent with this rule, where the distance from the dominant
estate to a public highway may be the shortest.
Based on the foregoing, the owner of the dominant estate may
validly claim a compulsory right of way only after he has
established the existence of four requisites, to wit: (1) the
(dominant) estate is surrounded by other immovables and is
without adequate outlet to a public highway; (2) after payment of
the proper indemnity; (3) the isolation was not due to the
proprietor's own acts; and (4) the right of way claimed is at a point
least prejudicial to the servient estate. Additionally, the burden of
proving the existence of the foregoing pre-requisites lies on the
owner of the dominant estate. 17
Here, there is absent any showing that the private respondents
had established the existence of the four requisites mandated by
law. For one, they failed to prove that there is no adequate outlet
from their respective properties to a public highway. On the
contrary, as alleged by the petitioner in its answer to the complaint,
and confirmed by the appellate court, "there is another outlet for
the plaintiffs (private respondents) to the main road." 18 Thus,
the respondent Court of Appeals likewise admitted that "legally the
old road could be closed." 19 Yet, it ordered the re-opening of the
old passageway on the ground that "the existing outlet (the other
outlet) is inconvenient to the plaintiff." 20 On this score, it is
apparent that the Court of Appeals lost sight of the fact that the
convenience of the dominant estate has never been the gauge for
the grant of compulsory right of way. 21 To be sure, the true
standard for the grant of the legal right is "adequacy." Hence, when
there is already an existing adequate outlet from the dominant
estate to a public highway, even if the said outlet, for one reason
or another, be inconvenient, the need to open up another servitude
is entirely unjustified. For to justify the imposition of an easement
or right of way, "there must be a real, not a fictitious or artificial
necessity for it." 22
Further, the private respondents failed to indicate in their complaint
or even to manifest during the trial of the case that they were willing
to indemnify fully the petitioner for the right of way to be
established over its property. Neither have the private respondents
been able to show that the isolation of their property was not due
to their personal or their predecessors-in-interest's own acts.
Finally, the private respondents failed to allege, much more
introduce any evidence, that the passageway they seek to be re-
opened is at a point least prejudicial to the petitioner. Considering
that the petitioner operates a hotel and beach resort in its property,
it must undeniably maintain a strict standard of security within its
premises. Otherwise, the convenience, privacy, and safety of its
clients and patrons would be compromised. That indubitably will
doom the petitioner's business. It is therefore of great importance
that the claimed right of way over the petitioner's property be
located at a point least prejudicial to its business.
Hence, the private respondents' properties cannot be said to be
isolated, for which a compulsory easement is demandable. Insofar
therefore as the Appellate Court declared the case to be proper as
a controversy for a compulsory right of way, this Court is
constrained to hold that it was in error.
Servitudes of right of way are an ancient concept, which date back
to the iter, actus, and via of the Romans. 23 They are demanded
by necessity, that is, to enable owners of isolated estates to make
full use of their properties, which lack of access to public roads has
denied them. 24 Under Article 649 of the Civil Code, they are
compulsory and hence, legally demandable, subject to indemnity
and the concurrence of the other conditions above-referred to.
As also earlier indicated, there must be a real necessity
therefor, and not mere convenience for the dominant estate.
Hence, if there is an existing outlet, otherwise adequate, to the
highway, the "dominant" estate cannot demand a right of way,
although the same may not be convenient. Of course, the question
of when a particular passage may be said to be "adequate"
depends on the circumstances of each case. Manresa, however,
says: "In truth, not only the estate which absolutely does not
possess it should be considered in this condition, but also that
which does not have one sufficiently safe or serviceable; an estate
bordering a public road through an inaccessible slope or precipice,
is in fact isolated for all the effects of the easement requested by
its owner. On the other hand, an estate which for any reason has
necessarily lost its access to a public road during certain periods
of the year is in the same condition. . . . There are some who
propound the query as to whether the fact that a river flows
between the estate and the public road should be considered as
having the effect of isolating the estate . . . If the river may be
crossed conveniently at all times without the least danger, it cannot
be said that the estate is isolated; in any other case, the answer is
in the affirmative." 25
The isolation of the dominant estate is also dependent on the
particular need of the dominant owner, and the estate itself need
not be totally landlocked. What is important to consider is whether
or not a right of way is necessary to fill a reasonable need therefor
by the owner. 2 6 Thus, as Manresa had pointed out, if the
passageway consists of an "inaccessible slope or
precipice," 27 it is as if there is no passageway, that is, one that
can sufficiently fulfill the dominant owner's necessities, although
by the existence of that passageway the property can not be truly
said that the property is isolated. So also, while an existing right of
way may have proved adequate at the start, the dominant owner's
need may have changed since then, for which Article 651 of the
Code allows adjustments as to width. 28
But while a right of way is legally demandable, the owner of the
dominant estate is not at liberty to impose one based on arbitrary
choice. Under Article 650 of the Code, it shall be established upon
two criteria: (1) at the point least prejudical to the servient state;
and (2) where the distance to a public highway may be the
shortest. According, however, to one commentator, "least
prejudice" prevails over "shortest distance." 29 Yet, each case
must be weighed according to its individual merits, and judged
according to the sound discretion of the court. "The court," says
Tolentino, "is not bound to establish what is the shortest; a longer
way may be established to avoid injury to the servient tenement,
such as when there are constructions or walls which can be
avoided by a roundabout way, or to secure the interest of the
dominant owner, such as when the shortest distance would place
the way on a dangerous decline." 30
It is based on these settled principles that we have resolved this
case.
WHEREFORE, the decision dated May 30, 1986, and the
resolution dated October 27, 1987, of the respondent Court of
Appeals are SET ASIDE and the private respondents' complaint is
hereby DISMISSED. Costs against the private respondents.
SO ORDERED.
||| (Costabella Corp. v. Court of Appeals, G.R. No. 80511, [January
25, 1991], 271 PHIL 350-362)
Encarnacion v. Court of Appeals 195 SCRA 74
THIRD DIVISION
[G.R. No. 77628. March 11, 1991.]
TOMAS ENCARNACION, petitioner, vs. THE HONORABLE
COURT OF APPEALS AND THE INTESTATE ESTATE OF THE
LATE EUSEBIO DE SAGUN AND THE HEIRS OF THE LATE
ANICETA MAGSINO VIUDA DE SAGUN, * respondents.
Esteban M. Mendoza for petitioner.
Oscar Gozos for private respondents.
SYLLABUS
1. CIVIL LAW; EASEMENTS; RIGHT OF WAY; ABSENCE OF
ACCESS TO A PUBLIC ROAD. Where a private property has
no access to a public road, it has the right of easement over
adjacent servient estates as a matter of law.
2. ID.; ID.; ID.; WIDTH OF THE PASSAGE DETERMINED BY
THE NEEDS OF THE DOMINANT PROPERTY. Under Article
651 of the Civil Code, it is the needs of the dominant property
which ultimately determine the width of the passage. And these
needs may vary from time to time.
3. ID.; ID.; ID.; ID.; CASE AT BAR. When petitioner started out
as a plant nursery operator, he and his family could easily make
do with a few pushcarts to tow the plants to the national highway.
But the business grew and with it the need for the use of modern
means of conveyance or transport. Manual hauling of plants and
garden soil and use of pushcarts have become extremely
cumbersome and physically taxing. To force petitioner to leave his
jeepney in the highway, exposed to the elements and to the risk of
theft simply because it could not pass through the improvised
pathway, is sheer pigheadedness on the part of the servient estate
and can only be counter-productive for all the people concerned.
Petitioner should not be denied a passageway wide enough to
accommodate his jeepney since that is a reasonable and
necessary aspect of the plant nursery business.
4. ID.; ID.; ID.; PAYMENT OF INDEMNITY WHERE EASEMENT
IS CONTINUOUS AND PERMANENT. Where the easement to
be established in favor of petitioner is of a continuous and
permanent nature, the indemnity shall consist of the value of the
land occupied and the amount of the damage caused to the
servient estate pursuant to Article 649 of the Civil Code.
DECISION
FERNAN, C.J p:
Presented for resolution in the instant petition for review is the not-
so-usual question of whether or not petitioner is entitled to
a widening of an already existing easement of right-of-way.
Both the trial court and the Appellate Court ruled that petitioner is
not so entitled, hence the recourse to this Court. We reverse.
FACTS:
Petitioner Tomas Encarnacion and private respondent Heirs of the
late Aniceta Magsino Viuda de Sagun are the owners of two
adjacent estates situated in Buco, Talisay, Batangas ** Petitioner
owns the dominant estate which has an area of 2,590 square
meters and bounded on the North by Eusebio de Sagun and
Mamerto Magsino, on the south by Taal Lake, on the East by
Felino Matienso and on the West by Pedro Matienzo. Private
respondents co-own the 405-square-meter servient estate which
is bounded on the North by the National Highway (Laurel Talisay
Highway), on the South by Tomas Encarnacion, on the East by
Mamerto Magsino and on the West by Felipe de Sagun. In other
words, the servient estate stands between the dominant estate
and the national road.
Prior to 1960, when the servient estate was not yet enclosed with
a concrete fence, persons going to the national highway just
crossed the servient estate at no particular point. However, in 1960
when private respondents constructed a fence around the servient
estate, a roadpath measuring 25 meters long and about a meter
wide was constituted to provide access to the highway. One-half
meter width of the path was taken from the servient estate and the
other one-half meter portion was taken from another lot owned by
Mamerto Magsino. No compensation was asked and none was
given for the portions constituting the pathway. 1
It was also about that time that petitioner started his plant nursery
business on his land where he also had his abode. He would use
said pathway as passage to the highway for his family and for his
customers.
Petitioner's plant nursery business through sheer hard work
flourished and with that, it became more and more difficult for
petitioner to haul the plants and garden soil to and from the nursery
and the highway with the use of pushcarts. In January, 1984,
petitioner was able to buy an owner-type jeep which he could use
for transporting his plants. However, that jeep could not pass
through the roadpath and so he approached the servient
estate owners (Aniceta Vda. de Sagun and Elena Romero Vda.
de Sagun) and requested that they sell to him one and one-
half (1 1/2) meters of their property to be added to the existing
pathway so as to allow passage for his jeepney. To his utter
consternation, his request was turned down by the two
widows and further attempts at negotiation proved futile.
Petitioner then instituted an action before the Regional Trial Court
of Batangas, Branch 6 (Tanauan) to seek the issuance of a writ of
easement of a right of way over an additional width of at least two
(2) meters over the De Saguns' 405-square-meter parcel of land. 2
During the trial, the attention of the lower court was called to the
existence of another exit to the highway, only eighty (80) meters
away from the dominant estate. On December 2, 1985, the lower
court rendered judgment dismissing petitioner's complaint. It ruled:
"It is clear, therefore, that plaintiff at present has two outlets to the
highway: one, through the defendants' land on a one meter wide
passageway, which is bounded on both sides by concrete walls
and second, through the dried river bed eighty meters away. The
plaintiff has an adequate outlet to the highway through the dried
river bed where his jeep could pass.
"The reasons given for his claim that the one-meter passageway
through defendants' land be widened to two and one-half meters
to allow the passage of his jeep, destroying in the process one of
the concrete fences and decreasing defendants' already small
parcel to only about 332.5 square meters, just because it is nearer
to the highway by 25 meters compared to the second access of 80
meters or a difference of only 65 meters and that passage through
defendants' land is more convenient for his (plaintiff's) business
and family use are not among the conditions specified by Article
649 of the Civil Code to entitle the plaintiff to a right of way for the
passage of his jeep through defendant's land." 3
On appeal, the Court of Appeals affirmed the decision of the trial
court on January 28, 1987 and rejected petitioner's claim for an
additional easement.
In sustaining the trial court, the Court of Appeals opined that the
necessity interposed by petitioner was not compelling enough to
justify interference with the property rights of private respondents.
The Appellate Court took into consideration the presence of a
dried river bed only eighty (80) meters away from the dominant
estate and conjectured that petitioner might have actually driven
his jeep through the river bed in order to get to the highway, and
that the only reason why he wanted a wider easement through the
De Sagun's estate was that it was more convenient for his
business and family needs.
HELD: GRANT ADDITIONAL EASEMENT
After evaluating the evidence presented in the case, the Court
finds that petitioner has sufficiently established his claim for an
additional easement of right of way, contrary to the conclusions of
the courts a quo.
While there is a dried river bed less than 100 meters from the
dominant tenement, that access is grossly inadequate. Generally,
the right of way may be demanded: (1) when there is absolutely
no access to a public highway, and (2) when, even if there is one,
it is difficult or dangerous to use or is grossly insufficient. In the
present case, the river bed route is traversed by a semi-concrete
bridge and there is no ingress nor egress from the highway. For
the jeep to reach the level of the highway, it must literally jump four
(4) to five (5) meters up. Moreover, during the rainy season, the
river bed is impassable due to the floods. Thus, it can only be used
at certain times of the year. With the inherent disadvantages of the
river bed which make passage difficult, if not impossible, it is if
there were no outlet at all.
Where a private property has no access to a public road, it has the
right of easement over adjacent servient estates as a matter of
law. 4
With the non-availability of the dried river bed as an alternative
route to the highway, we transfer our attention to the existing
pathway which straddles the adjoining properties of the De Sagun
heirs and Mamerto Magsino.
The courts below have taken against petitioner his candid
admission in open court that he needed a wider pathway for the
convenience of his business and family. (TSN, August 2, 1985, pp.
24-26). We cannot begrudge petitioner for wanting that which is
convenient. But certainly that should not detract from the more
pressing consideration that there is a real and compelling need for
such servitude in his favor.
Article 651 of the Civil Code provides that "(t)he width of the
easement of right of way shall be that which is sufficient for
the needs of the dominant estate, and may accordingly be
changed from time to time." This is taken to mean that under the
law, it is the needs of the dominant property which ultimately
determine the width of the passage. And these needs may vary
from time to time. When petitioner started out as a plant nursery
operator, he and his family could easily make do with a few
pushcarts to tow the plants to the national highway. But the
business grew and with it the need for the use of modern means
of conveyance or transport. Manual hauling of plants and garden
soil and use of pushcarts have become extremely cumbersome
and physically taxing. To force petitioner to leave his jeepney in
the highway, exposed to the elements and to the risk of theft simply
because it could not pass through the improvised pathway, is
sheer pigheadedness on the part of the servient estate and can
only be counter-productive for all the people concerned. Petitioner
should not be denied a passageway wide enough to accommodate
his jeepney since that is a reasonable and necessary aspect of the
plant nursery business.
We are well aware that an additional one and one-half (11/2)
meters in the width of the pathway will reduce the servient estate
to only about 342.5 square meters. But petitioner has expressed
willingness to exchange an equivalent portion of his land to
compensate private respondents for their loss. Perhaps, it would
be well for respondents to take the offer of petitioner
seriously. 5 But unless and until that option is considered, the law
decrees that petitioner must indemnify the owners of the servient
estate including Mamerto Magsino from whose adjoining lot 1/2
meter was taken to constitute the original path several years ago.
Since the easement to be established in favor of petitioner is of a
continuous and permanent nature, the indemnity shall consist of
the value of the land occupied and the amount of the damage
caused to the servient estate pursuant to Article 649 of the Civil
Code which states in part:
"Art. 649. The owner, or any person who by virtue of a real right
may cultivate or use any immovable, which is surrounded by other
immovables pertaining to other persons and without adequate
outlet to a public highway, is entitled to demand a right of way
through the neighboring estates, after payment of the proper
indemnity.
"Should this easement be established in such a manner that its
use may be continuous for all the needs of the dominant estate,
establishing a permanent passage, the indemnity shall consist of
the value of the land occupied and the amount of the damage
caused to the servient estate.
xxx xxx xxx"
WHEREFORE, in conformity with the foregoing discussion, the
appealed decision of the Court of Appeals dated January 28, 1987
is REVERSED and SET ASIDE. Petitioner Tomas Encarnacion is
hereby declared entitled to an additional easement of right of way
of twenty-five (25) meters long by one and one-half (11/2) meters
wide over the servient estate or a total area of 62.5 square meters
after payment of the proper indemnity.
SO ORDERED.
||| (Encarnacion v. Court of Appeals, G.R. No. 77628, [March 11,
1991], 272-A PHIL 27-33)
Case v. Heirs of Tuason 14 Phil. 521
FIRST DIVISION
[G.R. No. 5044. December 1, 1909.]
EDWIN CASE, petitioner-appellant, vs. THE HEIRS OF TUASON
Y SANTIBAEZ, opponents-appellees.
Hartigan & Rohde, and Roman Lacson for appellant.
Rosado, Sanz & Opisso for appellees.
SYLLABUS
1. REALTY; EASEMENTS; PRESUMPTIONS WITH RESPECT
TO PARTY WALLS. The legal presumption of the existence of
an easement of a party wall is limited to the three cases contained
in article 572 of the Civil Code, and is that of juris tantum; this must
be accepted unless the contrary should appear from the title deeds
of the adjoining properties, that is to say, that the entire wall in
question belongs to one of the property owners, or, while there is
no exterior sign to destroy such presumption and to support a
presumption against the party wall. (Art. 573, Civil Code.)
DECISION
TORRES, J p:
On the 7th of December, 1906, the attorneys for Edwin Case filed
a petition with the Court of Land Registration requesting that the
property owned by the applicant, described in the petition, be
registered in accordance with the provisions of the Land
Registration Act. After a written opposition was presented by
Felipe R. Caballero on the 6th of June, 1907, on behalf of the heirs
of the late Pablo Tuason and Leocadia Santibaez, counsel for the
applicant, Case, on August 2, 1907, amended the original petition
and set forth: that said property, situated in Calle Escolta, district
of Binondo, consists of a parcel of land and the building erected
thereon bearing Nos. 142 and 152; it is bounded on the northwest,
approximately, by the estero of Santa Cruz and the property of
Carmen de Ayala de Roxas; on the southeast by the River Pasig;
on the southwest by the property of the heirs of Tuason and
Santibaez; and on the northwest by Calle Escolta and the
aforesaid property of Carmen de Ayala de Roxas; that the total
area is 3,251.84 square meters, its description and boundaries
being detailed in the plan attached to the petition; that according
to the last assessment made for the purposes of taxation the land
was valued at P170,231 and the buildings thereon at P30,000; that
the property is free from all incumbrance, and no one has any
interest therein or right thereto; that on the northeast side the
property had in its favor the right of easement over some 234.20
square meters of land owned by the said Ayala de Roxas, and that
the applicant acquired the property by succession from Doa
Clotilde Romree.
In the written opposition above alluded to, counsel for the heirs of
Pablo Tuason and Leocadia Santibaez alleged that the parties
whom he represents are owners in common of the property
adjoining that of the petitioner on the southwest; that the latter, in
making the plan attached to his petition, extended his southwest
boundary line to a portion of the lot of the said heirs of Tuason and
Santibaez in the form indicated by the red line in the annexed
plan; that the true dividing line between the property of the
petitioner and that of the said heirs is the walls indicated in black
ink on the accompanying plan; that said walls belong to the
opponents, and that about two years ago, when the applicant
made alterations in the buildings erected on his land, he
improperly caused a portion of them to rest on the wall owned by
the parties whom he represents, at points 12, 13, and 14 of said
plan; for which reason the opponent prayed the court to direct the
applicant to amend the line marked in his plan with the letters Y,
X, U, T, S, and R, so that it may agree with the wall indicated by
the numbers 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, and 14 on the
plan which accompanist the written opposition, reducing the area
to whatever it may be after the amendment has been made; that
the applicant be compelled to remove the supports that he placed
for his buildings on the wall of the representatives of the petitioner,
and that he be sentenced to pay the costs.
The case was brought to trial, both parties adduced evidence, and
their exhibits were made of record. The court, assisted by the
interested parties and their respective experts, made an inspection
of the two properties, in view of which it entered judgment on the
31st of July, 1908, sustaining the opposition offered by the
representative of the heirs of Pablo Tuason and Leocadia
Santibaez, and after declaring a general default granted the
registration of the property described in the application filed by
Edwin Case, with the exclusion of the wall claimed by the
opponents and shown on their plan by the lines numbered 1, 2, 3,
4, 5, 6, 7, 8, 9, 10, 11, 12, 13, and 14; and in view of the fact that
lines drawn on the plan offered in evidence by the applicant under
letter G. are not correctly drawn, once this decision shall have
become final, let the dividing line of both properties be fixed by
common accord between the two parties and their experts, taking
as a base for the same the amended line of walls drawn on the
plan of the opponents, but should they not reach an agreement a
surveyor of the Court of Land Registration shall be detailed to fix
the same at the expense of the parties; the court also ordered the
cancellation of the registration shall be detailed to fix the same at
the expense of the parties; the court also ordered the cancellation
of the registration entries of the property entered in the name of
Clotilde Romree, principal of the petitioner, at page 142 and those
following of volume 15, section of Binondo and 52 of the register,
property No. 828, first entry.
On the 12th of August, 1908, the petitioner moved for the new trial
on the ground that the evidence was not sufficient to justify the
decision of the court in excluding the wall claimed by the
opponents; that said decision was contrary to the law, in so far as
it excludes the said decision was contrary to the law, in so far as it
excludes the said wall, and that the conclusions of fact therein are
openly and manifestly contrary to the weight of the evidence in so
far as they referred to the exclusion of said wall. The said motion
was overruled on the 15th of the same month, to which overruling
the applicant excepted and announced his intention to perfect the
corresponding bill of exceptions which was filed, approved, and
submitted to this court together with the proper assignment of
errors.
It the appeal interposed by the applicant against the decision of
the Court of Land Registration, now before this court, the
questions set up are merely of fact.
The question is whether the wall that with slight interruption runs
from Calle Escolta to the River Pasig, and which divides the
adjoining properties of the applicant, Edwin Case, and of the
opponents, belongs to the former, as he claimed in the first
instance, or is a dividing wall as affirmed in his brief in this second
instance, or is the property of the said opponents, the heirs of the
late Tuason and Santibaez.
The trial court after considering the evidence adduced by both
parties to the suit, found that the wall in controversy belongs to the
opponents for the reason, among others that in the public
document by which one of their original ancestors acquired on the
19th of April, 1796, the property now possessed by them, it
appears that the property was then already inclosed by a stone
wall. This document, which was offered in evidence by the
opponents, has not been impugned by the applicant. On the
contrary, it was acknowledged as the title deed of the property
adjoining that of the applicant by the witness Juan B. Tuason, who
knows the one and the other.
It is fully proven that two walls extend from Calle Escolta to the
interior of both properties, the one backing the other, and which
respectively support the edifices of the petitioner and of the
opponents from points 36, 35, 34, 33, 32, 31, and 30 on the plan
of the petitioner corresponding to points 1 to 6 on that of the
opponents.
This section of the wall of the opponents embraced within the
points mentioned in the plans offered in evidence by the parties,
for the very reason that it supports only the property of the
opponents and not that of the petitioner, cannot be a party wall,
one-half of which along its entire length would belong to the
adjoining building owned by Mr. Case. There is not sufficient proof
to sustain such claim, and besides, the building erected thereon
disproves the pretension of the petitioner.
It should, however, be noted that portion of the wall between the
numbers 3, 4, 5, and 6 on the plan of the opponents, which
corresponds to numbers 33, 32, 31, and 30 of that of the petitioner,
and which constitutes the cesspool on the property of the latter,
belongs to him, and it has so been admitted by counsel for the
opponents, for the reason that the petitioner had acquired it by
prescription, the opponents having lost control over the area of
land covered by the said cesspool together with the walls that
inclose it.
Under article 572 of the Civil Code the easement of party walls is
presumed, unless there is a title or exterior sign, or proof to the
contrary, among others, in dividing walls of adjoining buildings up
to the common point of elevation.
The legal presumption as to party walls is limited to the three cases
dealt with in the said article of the code, and is that of juris
tantum unless the contrary appear from the little of ownership of
the adjoining properties, that is to say, that the entire wall in
controversy belongs to one of the property owners, or where there
is no exterior sign to destroy such presumption and support a
presumption against the party wall. (Art. 573, Civil Code.)
The intermediate portion of the wall in question, lying between
numbers 6 and 13 on the defendants' plan, equivalent to a little
more than numbers 30 to 25 on the plan of the petitioner, is the
portion against which no other wall appears to have been erected
on the land owned by Mr. Case. In spite of this it cannot be
presumed that the aforesaid portion was a party wall, and that it
was not exclusively owned by the defendants, inasmuch as the
latter have proven by means of a good title that has not been
impugned by the petitioner, that when one of their ancestors and
principals acquired the property the lot was already inclosed by the
wall on which the building was erected; it must therefore be
understood that in the purchase of the property the wall by which
the land was inclosed was necessarily included.
The above documentary evidence has not been overcome by any
other presented by the petitioner, by apart from the record
discloses the existence of certain unquestionable signs. These
consist of constructions made by the petitioner himself on his own
property which entirely destroy any presumption that it is a party
wall, and indeed gives rise to a presumption against it.
Three openings have been made in the wall, undoubtedly to allow
the passage of air and light. Two of them are beveled on the side
toward the land of the objectors, and the third had recently
imbedded in the wall on the side of the property of the opponents.
These things constitute exterior signs and were recorded as the
result of personal inspection by the trial court in company with the
experts of both parties. These signs positively and conclusively
prove that the said wall is not a party wall, but the exclusive
property of the defendant. This is further confirmed by the
testimony of the witnesses at the trial.
The fact that the petitioner built a wall and backed it against the
one in question to support the edifice he had constructed between
points 21 and 13 of the corrected plan is a further indication that
the neighboring wall is not a party one. He knew perfectly well that
he had no right to rest his building on the latter. That he built a
terrace about four years previously over the wall between points
30, 29, 28, and 27 does not prove that the whole of the wall, from
the Escolta to the Rive Pasig, is a party wall, but it does show that
he usurped a portion thereof to the prejudice of the real owner.
Neither can it be presumed that part of the wall bordering on the
River Pasig comprised between points 13 and 14 is a party wall. It
was shown in the proceedings as resulting from the above-
mentioned ocular inspection that at the side of the said wall, which
is rather a low one, there is another, a higher one erected on the
petitioner's land and backed against the one in question. The first
one, as has been said, forms part of that which has surrounded
the property from the date of its acquisition, more than a century
ago, until the present date. It is absolutely independent of the built
by the petitioner, and that it is the exclusive property of the
objectors and is not a party wall cannot be denied.
It therefore appears from the proceedings that, with the exception
of the small portion of the wall in question occupied by the latrine
on the property of the petitioner, and which the opponents admit
that he had acquired by prescription, the whole of said wall from
the Escolta to the River Pasig cannot be presumed to be a party
wall; the evidence to the contrary conclusively proves that it
belonged exclusively to the defendants, and it has been further
shown in the case that at one time an old building belonging to the
opponents used to rest on a portion of the wall near the river.
In view of the foregoing, and considering that the judgment
appealed from is in accordance with the law and the merits of the
case, it is our opinion that the same should be affirmed in full, as
we do hereby affirm it, with the costs against the petitioner. So
ordered.
||| (Case v. Heirs of Tuason y Santibaez, G.R. No. 5044,
[December 1, 1909], 14 PHIL 521-528)

Choco v. Santamaria 21 Phil. 132
FIRST DIVISION
[G.R. No. 6076. December 29, 1911.]
SEVERINA and FLORA CHOCO, plaintiffs-appellants, vs.
ISIDRO SANTAMARIA, defendant-appellant.
Manuel Torres for plaintiffs.
Leodegario Azarraga for defendant.
SYLLABUS
1. REALTY; EASEMENTS; LIGHT, AIR, AND VIEW. Windows
with direct views, or balconies or any similar openings projecting
over the estate of a neighbor, cannot be made if there is not a
distance of at least 2 meters between the wall in which they are
built and the said estate. Neither can side nor oblique views be
opened over said property, unless there is a Distance of 60
centimeters. (Art. 582, Civil Code.)
2. ID.; ID.; ID. The owner of a wall which is not a party wall,
adjoining another's estate, may make in it windows or openings to
admit light, at the height of the ceiling joists or immediately under
the ceiling, of the dimensions of 30 centimeters square and, in any
case, with an iron grate embedded in the wall and a wire screen.
(Art. 581, Civil Code.)
DECISION
MAPA, J p:
The judgment rendered in this case in first instance is in part as
follows:
"From the evidence presented at the trial, I find that the defendant
is in possession of a parcel of land on the corner of Calles
Pescadores and P. Rada, in the district of Tondo, city of Manila,
and that he has erected a house thereon flush with the boundary
line of the adjacent property; that the plaintiffs are the owners of
the land on both sides of defendant's house, erected as stated,
both on Calle Pescadores and Calle P. Rada; that the defendant
in the building of his house has made several openings and
windows in the walls of the house on both sides overlooking the
property of the plaintiffs' that at the time the defendant was building
his house, and the windows and openings were being made, the
plaintiffs protested, and later on and in the year 1905 made written
protest and demand on the defendant, and the defendant received
the written protest and referred it to his counsel, who, from the
evidence, appears to have suggested an amicable adjustment of
the matter, but the adjustment was not made, and this action was
brought.
"It is likewise established that the entrance to the defendant's
house is in Calle Pescadores, and taking it as the front of his house
he has put a large window in its upper story, on the balcony of said
house, marked 1 on Exhibit A, overlooking Calle P. Rada; and that
this window and its balcony do not face directly toward the house
of the plaintiffs.
"There have also been constructed two windows in the rear wall of
the house of the defendant, in the first story of the house, which
are marked 8 and 9 on Exhibit A, and these windows are each 50
by 80 centimeters, and are placed immediately under the ceiling
of the first story, and each of these windows is equally divided into
four panes.
"On the right hand side of the house, entering from Calle
Pescadores, there is a window or opening in the wall of the house
in the second story, which is about 25 by 35 centimeters, and is
located a little more than half way from the floor of the ceiling of
the second story and this is subdivided into smaller panes; and on
the same side there are three windows which are marked 2, 3, and
4 on Exhibit A, located immediately under the ceiling of the first
story, and each of the three is 25 by 25 centimeters.
"There are two other windows on the same side located
immediately under the ceiling, which are marked 5 and 6 on Exhibit
A and also on Exhibit C, and one of these windows is about 35 by
67 centimeters, and the other about 75 by 90 centimeters.
"It also appears that there is wire screening over all these openings
or windows.
"The law provides that the owner of a wall which is not a party wall,
adjoining another's estate, may make in it windows or openings to
admit light at the height of the ceiling joists, or immediately under
the ceiling, thirty centimeters square, with an iron grate embedded
in the wall and a wire screen.
"In this case the windows are in a wall not a party wall adjoining
plaintiff's estate, and the windows marked 2, 3, and 4, as appears
on Exhibit A, are less than thirty centimeters square and have a
wire screen, but there does not appear to be the iron grate
embedded in the wall.
"The windows marked 5 and 6, as indicated on Exhibit A, have a
wire screen but are more than thirty centimeters square, and have
not the iron grate embedded in the wall.
"The window marked 7 on Exhibit A has a wire screen, but is more
than 30 centimeters square and has not the iron grate embedded
in the wall.
"The windows 8 and 9, as indicated on Exhibit A, have a wire
screen but no iron grate embedded in the wall, and are of a greater
dimension than thirty centimeters square.
"The window marked One on Exhibit A is located in a balcony
which overlooks the street, and, while the premises of the plaintiff
may be seen from it, it is not adjoining their estate.
"The court finds that the plaintiffs are entitled to a decree for
closing all the windows or openings in the walls of the defendant's
house, as hereinbefore described, which directly overlook the
premises of the plaintiffs, or that in some other way the provisions
of the law be complied with so that they may remain open.
"All these openings and windows can be made to comply with the
law, with the exception of that marked 7, which is not immediately
under the ceiling (techo).
"Let judgment be entered in favor of the plaintiffs, Severina and
Flora Choco, and against the defendant, Isidro Santamaria,
forever prohibiting the opening of the window marked No. 7, as
hereinbefore stated, which must be closed, and forever prohibiting
the opening of the windows and openings marked, as hereinbefore
stated, 2, 3, 4, 5, 6, 8, and 9, which must be closed or made to
conform to the requirements of law with regard to dimensions and
an iron grate embedded in the wall, with the costs of the action.''
The plaintiffs appealed from that judgment and allege in their
appeal in this instance:
1. That the lower court erred by not ordering in his judgment the
final and perpetual closing of the large window opened in the
balcony of the back part of the appellee's house and marked No.
1 in the photographic Exhibits A and D, on the ground that the said
window is in the balcony which overlooks Calle Padre Rada and
that, though the appellants' lot can be seen from this window, it is
not contiguous to the latter's property.
2. That the trial court also erred in ordering in his judgment that the
openings and windows, Nos. 2, 3, 4, 5, 6, 8, and 9, might continue
open if they were fixed so as to comply with the requirements of
the law as regards their dimensions and the placing of iron grates
embedded in the wall.
3. That the lower court also erred in denying the appellants'
petition for a rehearing.
It appears obvious to us, from the evidence, that the window No.
1, referred to in the first assignment of errors, is next to the
appellants' lot. To judge from the photographic views, Exhibits A
and D, it opens on the boundary line between the said lot and that
of the appellee and is situated perpendicularly above a part of the
wall that belongs to the appellants. This opinion is corroborated by
the testimony of the defendant's witness who took the said
photographs, in so far as he said that "a part of the window in
question is in front of the plaintiffs' property, and a person
approaching the window may clearly see the said lot." And
certainly if it is in front of this lot, it is unquestionable that it directly
overlooks the same; but even though it did not and only a side or
oblique view of the lot could be obtained from it, it could not be
kept open, since between it and the plaintiffs' property there does
not intervene the distance required by law that of two meters in
the first case, and 60 centimeters in the second. In reality, there is
no distance at all between the said window and the plaintiffs' lot,
because, as we have said, this window is perpendicular to the
boundary line of the said lot; therefore, its opening is a manifest
violation of the provisions of article 582 of the Civil Code which
reads as follows:
"Windows with direct views, or balconies or any similar openings
projecting over the estate of the neighbor, cannot be made if there
is not a distance of, at least, 2 meters between the wall in which
they are built and said estate.
"Neither can side nor oblique views be opened over said property,
unless there is a distance of 60 centimeters."
Because of the lack of the distance required by law, the window in
question must be closed, and consequently the judgment
appealed from should be modified in this sense, as regards this
window.
With respect to the second assignment of error, the question
raised by the appellants concerns the proper interpretation of
article 581 of the Civil Code which prescribes as follows:
"The owner of a wall which is not a party-wall, adjoining another's
estate, may make in it windows or openings to admit light, at the
height of the ceiling joists or immediately under the ceiling, of the
dimensions of 30 centimeters square and, in any case, with an iron
grate embedded in the wall and a wire screen."
The windows mentioned in this part of the appeal are those
indicated by Nos. 2, 3, 4,5, 6, 8, and 9, in the defendant's Exhibit
A. They are all situated immediately under the ceiling of the first
floor and are provided with wire screens; some of them measure
more and others less than 30 centimeters square and none of
them have iron grates embedded in the wall. Owing to this last
circumstance, none of them fully comply with the conditions
required by law; moreover, those numbered 5, 6, 8, and 9, have
the additional defect of being greater than 30 centimeters square.
The trial judge therefore ordered, in the judgment, that all the
aforementioned windows be closed or that they be made to
conform to the law with respect to their dimensions and the placing
of iron grates embedded in the wall. The appellants maintain that
these windows should have been ordered closed absolutely and
finally, and, consequently, that the option allowed the defendant to
keep them open, provided that he brought them within the terms
of the law, is contrary to the same and, therefore, illegal.
It is alleged as a ground for such averment that none of the
windows referred to are at the height of the ceiling joists, which is
the first condition required by law.
"We understand by ceiling joists say the appellants in a
building composed of any given number of stories, the long pieces
to which are nailed the boards that form the ceiling of the last story
of the building, counting the stories from below; and this
interpretation which we give to the words ceiling joists must be that
most in harmony with the spirit of article 581 of the code, the
subject of our examination, since immediately after them in the
same article, in explanation, are found the words or immediately
under 'los techos,' in order to indicate, without the least doubt, the
sole place or height where openings or windows may be made in
conformity with the law. It is needless to say that a building, though
composed of several stories, can have but one techo. . . ."
This last assertion is incorrect. By techo is understood that part of
a construction which covers the rooms under it and certainly forms
one of the essential parts of every story. A story is composed of
earth, pavement and ceiling, the latter, that is, the ceiling, being
that part of the story that is visible to the observer situated below
in the room covered by it. (Hispano-American Encyclopedic
Dictionary, by Montaner and Simon.) Consequently, every story
has a ceiling, and not, as the appellants maintain, the upper one
alone.
Nor is their definition exact of the word joists, as it is employed in
article 581 of the Code. According to the dictionary of the Spanish
Academy, these are, in architecture, understood to be a kind of
beam laid horizontally and serving in buildings to support others or
for bracing and connecting the parts of the structure. Mucius
Scaevola says in his Civil Code, volume 10, page 448:
"The horizontal timbers that are placed upon the tops of the
uprights, that is, what are commonly called beams, intended to
serve for connection and main support of the timbers of the
different floors that separate the stories of the building, are called
joists."
According to these definitions each floor necessarily has joists,
that is, beams, since, in the last analysis they are what support
and secure the structure of the story immediately above; therefore
it is not true that there may be joists only in the top story, as the
appellants claim by saying that they understand to be such the
long timbers to which are fastened the boards of the ceiling at the
top story of the building. On the contrary, carefully considered, it is
precisely the top story that does not need joists since it does not
have to support any other higher portion of the building. It has only
to support the weight of the roof, which is undoubtedly much less
than that of a whole story. So that, according to Mucius Scaevola
(work cited, vol. 10, p. 487), it cannot be said that the top story has
joists. And because it certainly does not have them, is the reason
why the code in said article 581 employs the phrase
or immediately under "los techos" in referring to the top story.
The author's words in expounding this theory in his commentary
on article 581 of the Civil Code are as follows:
"We said elsewere that these (the joists) were the horizontal
timbers that rest upon the tops of the uprights; they form, then, the
upper limit of the different stories of a house; and therefore, in
referring to the top story, which cannot be said to have joists,
article 581 makes use of the phrase or immediately under 'los
techos.'"
This does not mean that the italicized phrase refers solely and
exclusively to the top story, since the lower stories also have
techos, as above set forth. In our opinion what the author cited
means is that in speaking of the top story, which has no joists, the
words of article 581 of the code, at the height of the ceiling joists,
fail to apply, the phrase or immediately under "los tecllos" alone
being thereto applicable, in distinction from the lower stories, with
regard to which both phrases are applicable as they have at the
same time joists and techo. In referring to the lower stories either
phrase may, in connection with the other, determine the place,
which surely cannot be more than one, where it is permissible to
open the windows called regulation windows, whenever in them
the joists are actually joined to or placed next to the techo which
forms the top of each of said stories. Both phrases therefore
express the same idea with reference to the lower stories.
Aside from what has been said here, the object of the law in
authorizing the opening of the windows in question in all the stories
of a building, without any exception, is clear. Their purpose is, as
article 581 itself says, to furnish light to the rooms, and it is evident
at a glance that the rooms of the lower stories have as much need
for light as those of the top story. No good reason exists for having
one story in better condition than another, whichever it may be, in
connection with this provision of law.
The defendant is ordered to close finally and forever the window
marked No. 1 in Exhibit A, the judgment appealed from in so far
as it refers to said window being thus modified, but affirmed in all
other respects; without special finding as to costs in this instance.
||| (Choco v. Santamaria, G.R. No. 6076, [December 29, 1911], 21
PHIL 132-140)
Solid Manila Corporation v. Bio Hong Trading Co., Inc. 195 SCRA
748
SECOND DIVISION
[G.R. No. 90596. April 8, 1991.]
SOLID MANILA CORPORATION, petitioner, vs. BIO HONG
TRADING CO., INC. and COURT OF APPEALS, respondents.
Balgos & Perez for petitioner.
Alfredo G. de Guzman for private respondent.
SYLLABUS
1. CIVIL LAW; PROPERTY; OWNERSHIP AND ITS
MODIFICATIONS; EASEMENTS OR SERVITUDES; NATURE,
CONSTRUED. Servitudes are merely accessories to the
tenements of which they form part. Although they are possessed
of a separate juridical existence, as mere accessories, they can
not, however, be alienated from the tenement, or mortgaged
separately.
2. ID.; ID.; ID.; A LIMITATION ON THE RIGHT OF THE OWNER
TO USE. An easement operates as a limitation on the title of
the owner of the servient estate, specifically, his right to use ( jus
utendi).
3. ID.; ID.; ID.; MODES OF EXTINGUISHMENT; MERGER,
DEFINED. A merger exists when ownership of the dominant
and servient estates is consolidated in the same person. Merger
then, as can be seen, requires full ownership of both estates.
4. ID.; ID.; ID.; PERSONAL SERVITUDE; CONSTRUED. A
personal servitude, is one constituted not in favor of a particular
tenement (a real servitude) but rather, for the benefit of the general
public. In a personal servitude, there is therefore no "owner of a
dominant tenement" to speak of, and the easement pertains to
persons without a dominant estate, in this case, the public at large.
5. REMEDIAL LAW; ACTIONS; SUMMARY JUDGMENT; WHEN
PROPER. Summary judgments under Rule 34 of the Rules of
Court are proper where there is no genuine issue as to the
existence of a material fact, and the facts appear undisputed
based on the pleadings, depositions, admissions, and affidavits of
record.
6. ID.; ID.; ID.; PURPOSE. Summary judgments are meant to
rid a proceeding of the ritual of a trial where, from existing records,
the facts have been established, and trial would be futile.
7. ID.; ID.; LAW OF THE CASE; CONSTRUED. "Law of the
case" has been defined as the opinion delivered on a former
appeal. More specifically, it means that whatever is once
irrevocably established as the controlling legal rule of decision
between the same parties in the same case continues to be the
law of the case, whether correct on general principles or not, so
long as the facts on which such decision was predicated continue
to be the facts of the case before the court. (21 C.J.S. 330)
8. ID.; ID.; FORUM SHOPPING. There is forum-shopping
whenever, as a result of an adverse opinion in one forum, a party
seeks a favorable opinion (other than by appeal or certiorari) in
another. The principle applies not only with respect to suits filed in
the courts but also in connection with litigations commenced in the
courts while an administrative proceeding is pending.
DECISION
SARMIENTO, J p:
This is an appeal filed by way of a petition for review on certiorari
under Rule 45 of the Rules of Court.
The petitioner raises two questions:
(1) whether or not the Court of Appeals 1 erred in reversing the
trial court which had rendered summary judgment; and
(2) whether or not it erred in holding that an easement had
been extinguished by merger.
We rule for the petitioner on both counts.
It appears that the petitioner is the owner of a parcel of land located
in Ermita, Manila, covered by Transfer Certificate of Title No.
157750 of the Register of Deeds of Manila. The same lies in the
vicinity of another parcel, registered in the name of the private
respondent corporation under Transfer Certificate of Title No.
128784.
The private respondent's title came from a prior owner, and in their
deed of sale, the parties thereto reserved as an easement of way:
. . . a portion thereof measuring NINE HUNDRED FOURTEEN
SQUARE METERS, more or less, had been converted into a
private alley for the benefit of neighboring estates, this being duly
annotated at the back of the covering Transfer Certificate of Title
per regulations of the Office of the City Engineer of Manila and that
the three meterwide portion of said parcel along the Pasig River,
with an area of ONE HUNDRED SEVENTY NINE (179) SQUARE
METERS, more or less, had actually been expropriated by the City
Government, and developed pursuant to the beautification drive of
the Metro Manila Governor. (p. 3, Record). 2
As a consequence, an annotation was entered in the private
respondent's title, as follows:
Entry No. 7712/T-5000 CONSTRUCTION OF PRIVATE ALLEY
It is hereby made of record that a construction of private alley
has been undertaken on the lot covered by this title from
Concepcion Street to the interior of the aforesaid property with the
plan and specification duly approved by the City Engineer subject
to the following conditions to wit: (1) That the private alley shall be
at least three (3) meters in width; (2) That the alley shall not be
closed so long as there's a building exists thereon (sic); (3) That
the alley shall be open to the sky; (4) That the owner of the lot on
which this private alley has been constituted shall construct the
said alley and provide same with concrete canals as per
specification of the City Engineer; (5) That the maintenance and
upkeep of the alley shall be at the expense of the registered owner;
(6) That the alley shall remain open at all times, and no
obstructions whatsoever shall be placed thereon; (7) That the
owner of the lot on which the alley has been constructed shall allow
the public to use the same, and allow the City to lay pipes for sewer
and drainage purposes, and shall not act (sic) for any indemnity
for the use thereof; and (8) That he shall impose upon the vendee
or new owner of the property the conditions abovementioned;
other conditions set forth in Doc. No. 4236, Page No. 11, Book No.
84 of Nicasio P. Misa, Not. Pub. of Manila. 3
The petitioner claims that ever since, it had (as well as other
residents of neighboring estates) made use of the above private
alley and maintained and contributed to its upkeep, until sometime
in 1983, when, and over its protests, the private respondent
constructed steel gates that precluded unhampered use.
On December 6, 1984, the petitioner commenced suit for
injunction against the private respondent, to have the gates
removed and to allow full access to the easement.
The court a quo shortly issued ex parte an order directing the
private respondent to open the gates. Subsequently, the latter
moved to have the order lifted, on the grounds that: (1) the
easement referred to has been extinguished by merger in the
same person of the dominant and servient estates upon the
purchase of the property from its former owner; (2) the
petitioner has another adequate outlet; (3) the petitioner has not
paid any indemnity therefor; and (4) the petitioner has not shown
that the right-of-way lies at the point least prejudicial to the servient
estate.
The private respondent's opposition notwithstanding, the trial court
issued a "temporary writ of preliminary injunction to continue up to
the final termination of the case upon its merits upon the posting
of a P5,000.00 bond by the plaintiff" 4 (the petitioner herein).
Thereafter, the respondent corporation answered and reiterated
its above defenses.
On April 15, 1986, the petitioner moved for summary judgment and
the court a quo ruled on the same as follows:
In view of the foregoing, this Court finds it unnecessary to try this
case on the merit (sic) and hereby resolve (sic) to grant the
plaintiff's motion for summary judgment. (pp. 15-107, Record). 5
On January 19, 1987, the trial court rendered judgment against the
private respondent, the dispositive portion of which states:
WHEREFORE, judgment is hereby rendered making permanent
the temporary mandatory injunction, that had been issued against
the defendant, and for the defendant to pay the plaintiff the costs
of this suit.
The defendant's counterclaim against the plaintiff is hereby
dismissed, for lack of merit. (Summary Judgment, p. 6). 6
The private respondent appealed to the respondent Court of
Appeals.
Meanwhile, the private respondent itself went to the Regional Trial
Court on a petition for the cancellation of the annotation in
question. The court granted cancellation, for which the petitioner
instituted CA-G.R. SP No. 13421 of the respondent Court of
Appeals which ordered the restoration of the annotation "without
prejudice [to] the final outcome of" 7 the private respondent's own
appeal (subject of this petition).
In reversing the trial court which had, as earlier mentioned,
rendered summary judgment, the respondent Court of Appeals
held that the summary judgment was improper and that the lower
court erroneously ignored the defense set up by the private
respondent that the easement in question had been extinguished.
According to the Appellate Court, an easement is a mere limitation
on ownership and that it does not impair the private respondent's
title, and that since the private respondent had acquired title to the
property, "merger" brought about an extinguishment of the
easement.
The petitioner submits that the respondent Court of Appeals erred,
because the very deed of sale executed between the private
respondent and the previous owner of the property "excluded" the
alley in question, and that in any event, the intent of the parties
was to retain the "alley" as an easement notwithstanding the sale.
HELD:
As already stated at the outset, the Court finds merit in the petition.
There is no question that an easement, as described in the deed
of sale executed between the private respondent and the seller,
had been constituted on the private respondent's property, and
has been in fact annotated at the back of Transfer Certificate of
Title No. 128784. Specifically, the same charged the private
respondent as follows: "(6) That the alley shall remain open at all
times, and no obstructions whatsoever shall be placed thereon; (7)
That the owner of the lot on which the alley has been constructed
shall allow the public to use the same, and allow the City to lay
pipes for sewer and drainage purposes, and shall not [ask] for any
indemnity for the use thereof . . . " 8 Its act, therefore, of erecting
steel gates across the alley was in defiance of these conditions
and a violation of the deed of sale, and, of course, the servitude of
way.
The Court then is of the opinion that injunction was and is proper
and in denying injunctive relief on appeal, the respondent
Appellate Court committed an error of judgment and law.
It is hardly the point, as the Court of Appeals held, that the private
respondent is the owner of the portion on which the right-of-way
had been established and that an easement cannot impair
ownership. The petitioner is not claiming the easement or any part
of the property as its own, but rather, it is seeking to have the
private respondent respect the easement already existing thereon.
The petitioner is moreover agreed that the private respondent has
ownership, but that nonetheless, it has failed to observe the
limitation or encumbrance imposed on the same.
There is therefore no question as to ownership. The question is
whether or not an easement exists on the property, and as we
indicated, we are convinced that an easement exists.
It is true that the sale did include the alley. On this score, the Court
rejects the petitioner's contention that the deed of sale "excluded"
it, because as a mere right-of-way, it cannot be separated from the
tenement and maintain an independent existence. Thus:
Art. 617. Easements are inseparable from the estate to which they
actively or passively belong. 9
Servitudes are merely accessories to the tenements of which they
form part. 10 Although they are possessed of a separate juridical
existence, as mere accessories, they cannot, however, be
alienated 12
The fact, however, that the alley in question, as an easement, is
inseparable from the main lot is no argument to defeat the
petitioner's claims, because as an easement precisely, it operates
as a limitation on the title of the owner of the servient estate,
specifically, his right to use (jus utendi).
As the petitioner indeed hastens to point out, the deed itself
stipulated that "a portion thereof [of the tenement] measuring NINE
HUNDRED FOURTEEN SQUARE METERS, more or less, had
been converted into a private alley for the benefit of the
neighboring estates . . ." 13 and precisely, the former owner, in
conveying the property, gave the private owner a discount on
account of the easement, thus:
WHEREAS, to compensate for the foregoing, the parties hereto
agreed to adjust the purchase price from THREE MILLION SEVEN
HUNDRED NINETY THOUSAND FOUR HUNDRED FORTY
PESOS (P3,790,440.) to THREE MILLION FIVE HUNDRED
THREE THOUSAND TWO HUNDRED FORTY PESOS
(P3,503,240.00) 14
Hence, and so we reiterate, albeit the private respondent did
acquire ownership over the propertyincluding the disputed alley
as a result of the conveyance, it did not acquire the right to
close that alley or otherwise put up obstructions thereon and
thus prevent the public from using it, because as a servitude,
the alley is supposed to be open to the public.
The Court is furthermore of the opinion, contrary to that of the
Court of Appeals, that no genuine merger took place as a
consequence of the sale in favor of the private respondent
corporation. According to the Civil Code, a merger exists when
ownership of the dominant and servient estates is consolidated in
the same person. 15 Merger then, as can be seen, requires full
ownership of both estates.
One thing ought to be noted here, however. The servitude in
question is a personal servitude, that is to say, one constituted not
in favor of a particular tenement (a real servitude) but rather, for
the benefit of the general public.
Personal servitudes are referred to in the following article of the
Civil Code:
Art. 614. Servitudes may also be established for the benefit of a
community, or of one or more persons to whom the encumbered
estate does not belong. 16
In a personal servitude, there is therefore no "owner of a
dominant tenement" to speak of, and the easement pertains
to persons without a dominant estate, 17 in this case, the
public at large.
Merger, as we said, presupposes the existence of a prior
servient-dominant owner relationship, and the termination of
that relation leaves the easement of no use. Unless the owner
conveys the property in favor of the public if that is
possible no genuine merger can take place that would
terminate a personal easement.
For this reason, the trial court was not in error in rendering
summary judgment, and insofar as the respondent Court of
Appeals held that it (the trial court) was in error, the Court of
Appeals is in error.
Summary judgments under Rule 34 of the Rules of Court are
proper where there is no genuine issue as to the existence of a
material fact, and the facts appear undisputed based on the
pleadings, depositions, admissions, and affidavits of record. 18 In
one case, this Court upheld a decision of the trial court rendered
by summary judgment on a claim for money to which the
defendant interposed the defense of payment but which failed to
produce receipts. 19 We held that under the circumstances, the
defense was not genuine but rather, sham, and which justified a
summary judgment. In another case, we rejected the claim of
acquisitive prescription over registered property and found it
likewise to be sham, and sustained consequently, a summary
judgment rendered because the title challenged was covered by a
Torrens Certificate and under the law, Torrens titles are
imprescriptible. 20
We also denied reconveyance in one case and approved a
summary judgment rendered thereon, on the ground that from the
records, the plaintiffs were clearly guilty of laches having failed to
act until after twenty-seven years. 21 We likewise allowed
summary judgment and rejected contentions of economic
hardship as an excuse for avoiding payment under a contract for
the reason that the contract imposed liability under any and all
conditions. 22
In the case at bar, the defense of merger is, clearly, not a valid
defense, indeed, a sham one, because as we said, merger is not
possible, and secondly, the sale unequivocally preserved the
existing easement. In other words, the answer does not, in reality,
tender any genuine issue on a material fact and cannot militate
against the petitioner's clear cause of action.
As this Court has held, summary judgments are meant to rid a
proceeding of the ritual of a trial where, from existing records, 23
the facts have been established, and trial would be futile.
What indeed, argues against the posturing of the private
respondent and consequently, the challenged holding of the
respondent Court of Appeals as well is the fact that the Court of
Appeals itself had rendered judgment, in its CA-G.R. No. 13421,
entitled Solid Manila Corporation v. Ysrael, in which it nullified the
cancellation of the easement annotated at the back of the private
respondent's certificate of title ordered by Judge Ysrael in LRC
Case No. 273. As the petitioner now in fact insists, the Court of
Appeals' judgment, which was affirmed by this Court in its
Resolution dated December 14, 1988, in G.R. No. 83540, is at
least, the law of the case between the parties, as "law of the case"
is known in law, e.g.:
xxx xxx xxx
"Law of the case" has been defined as the opinion delivered on a
former appeal. More specifically, it means that whatever is once
irrevocably established as the controlling legal rule of decision
between the same parties in the same case continues to be the
law of the case, whether correct on general principles or not, so
long as the facts on which such decision was predicated continue
to be the facts of the case before the court. (21 C.J.S. 330).
It may be stated as a rule of general application that, where the
evidence on a second or succeeding appeal is substantially the
same as that on the first or preceding appeal, all matters,
questions, points, or issues adjudicated on the prior appeal are the
law of the case on all subsequent appeals and will not be
considered or readjudicated therein. (5 C.J.S. 1267).
In accordance with the general rule stated in Section 1821, where,
after a definite determination, the court has remanded the case for
further action below, it will refuse to examine question other than
those arising subsequently to such determination and remand, or
other than the propriety of the compliance with its mandate; and if
the court below has proceeded in substantial conformity to the
directions of the appellate court, its action will not be questioned
on a second appeal.
As a general rule a decision on a prior appeal of the same case is
held to be the law of the case whether that decision is right or
wrong, the remedy of the party deeming himself aggrieved being
to seek a rehearing." (5 C.J.S. 1276-77).
Questions necessarily involved in the decision on a former appeal
will be regarded as the law of the case on a subsequent appeal,
although the questions are not expressly treated in the opinion of
the court, as the presumption is that all the facts in the case
bearing on the point decided have received due consideration
whether all or none of them are mentioned in the opinion. (5 C.J.S.
1286-87). 24
CA-G.R. No. 13421 is the law of the case because clearly, it was
brought to determine the rights of the parties regarding the
easement, subject of the controversy in this case, although as a
petition for "cancellation of annotation" it may have, at a glance,
suggested a different cause of action.
And for reasons of fair play, the private respondent cannot validly
reject CA-G.R. No. 13421 as the law of the case, after all, it was
the one that initiated the cancellation proceedings with the
Regional Trial Court in LRC No. 273 that precipitated that appeal.
In the second place, the proceedings for cancellation of annotation
was in fact meant to preempt the injunction decreed by the lower
court in this case. Plainly and simply, the private respondent is
guilty of forum-shopping, as we have described the term:
xxx xxx xxx
There is forum-shopping whenever, as a result of an adverse
opinion in one forum, a party seeks a favorable opinion (other than
by appeal or certiorari) in another. The principle applies not only
with respect to suits filed in the courts but also in connection with
litigations commenced in the courts while an administrative
proceeding is pending, as in this case, in order to defeat
administrative processes and in anticipation of an unfavorable
administrative ruling and a favorable court ruling. This is specially
so, as in this case, where the court in which the second suit was
brought, has no jurisdiction. 25
to which contempt is a penalty. 26
As it happened, in its effort to shop for a friendly forum, the private
respondent found an unfriendly court and it can not be made to
profit from its act of malpractice by permitting it to downgrade its
finality and deny its applicability as the law of the case.
As a personal servitude, the right-of-way in question was
established by the will of the owner.
In the interesting case of North Negros Sugar Co., Inc. v. Hidalgo,
27 this Court, speaking through Justice Claro Recto, declared
that a personal servitude (also a right of way in that case) is
established by the mere "act" 28 of the landowner, and is not
"contractual in the nature," 29 and a third party (as the petitioner
herein is a third party) has the personality to claim its benefits. In
his separate opinion, however, Justice Jose Laurel maintained that
a personal or voluntary servitude does require a contract and that
"[t]he act of the plaintiff in opening the private way here involved
did not constitute an offer .." 30 and "[t]here being no offer, there
could be no acceptance; hence no contract." 31
The Court sees no need to relive the animated exchanges
between two legal titans (they would contend even more spiritedly
in the "larger" world of politics) to whom present scholars perhaps
owe their erudition and who, because of the paths they have taken,
have shaped history itself; after all, and coming back to the case
at bar, it is not disputed that an easement has been constituted,
whereas it was disputed in North Negros' case. Rather, the
question is whether it is still existing or whether it has been
extinguished. As we held, our findings is that it is in existence and
as a consequence, the private respondent cannot bar the public,
by erecting an obstruction on the alley, from its use.
WHEREFORE, the petition is GRANTED. The decision of the
Court of Appeals is SET ASIDE and the decision of the Regional
Trial Court is hereby REINSTATED. The petitioner and its counsel
are hereby required to SHOW CAUSE why they should not be
punished for contempt of court, and also administratively dealt with
in the case of counsel, for forum shopping.
IT IS SO ORDERED.
||| (Solid Manila Corp. v. Bio Hong Trading Co., Inc., G.R. No.
90596, [April 8, 1991], 273 PHIL 115-128)
Floro v. Llenado 244 SCRA 713
THIRD DIVISION
[G.R. No. 75723. June 2, 1995.]
SIMEON FLORO, petitioner, vs. ORLANDO A. LLENADO
(Deceased), substituted by his wife WENIFREDA T.
LLENADO, in her own behalf as Administratrix of the Estate
of Orlando A. Llenado and as Legal Guardian of Minors Ma.
Bexina, Avelino and Antonio, all surnamed Llenado, and the
COURT OF APPEALS, respondents.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; PETITION TO
REVIEW ON CERTIORARI; ORDINARILY CONFINED TO
REVIEWING ERRORS OF LAW COMMITTED; EXCEPTIONS.
In a petition to review a decision of the Court of Appeals under
Rule 45 of the Rules of Court, the jurisdiction of the Court is
ordinarily confined to reviewing errors of law committed by the
Court of Appeals, its findings of fact being conclusive on the Court.
There are, however, exceptional circumstances that would compel
the Court to review the findings of fact of the Court of Appeals,
summarized in Remalante v. Tibe (G.R. No. 59514, February 25,
1988, 158 SCRA 138, 145) and subsequent cases as follows: (1)
when the inference made is manifestly mistaken, absurd or
impossible; (2) when there is a grave abuse of discretion; (3) when
the finding is grounded entirely on speculations, surmises or
conjectures; (4) when the judgment of the Court of Appeals is
based on misapprehension of facts; (5) when the findings of fact
are conflicting; (6) when the Court of Appeals in making its findings
went beyond the issues of the case and the same is contrary to
the admissions of both appellant and appellee; (7) when the
findings of the Court of Appeals are contrary to those of the trial
court; (8) when the findings of fact are conclusions without citation
of specific evidence on which they are based; (9) when the Court
of Appeals manifestly overlooked certain relevant facts not
disputed by the parties and which, if properly considered, would
justify a different conclusion; and, (10) when the finding of fact of
the Court of Appeals are premised in the absence of evidence and
are contradicted by the evidence on record.
2. CIVIL LAW; PROPERTY; EASEMENT OF RIGHT OF WAY;
ABSENCE OF AGREEMENT AS TO THE CONSIDERATION
DOES NOT CREATE A VALID CONTRACT THEREOF. It is
not disputed that sometime in February 1983, Floro granted the
Llenados verbal permission to pass through the Floro Park
Subdivision in going to and from the MacArthur Highway. Whether
such permission, as claimed by Floro, was the month of March
only, without compensation and as a neighborly gesture for the
purpose merely of enabling the Llenados to install stone
monuments (mojones) on their land, or was in relation to the
easement of right of way granted in their favor, as insisted by the
Llenados, the fact remains that no such contract of easement of
right of way was actually perfected between Floro and Llenado.
Both Orlando and Wenifreda Llenado testified that the conditions
of the easement of right of way were still to be drawn up by Floro's
lawyer. Thus, no compensation was agreed upon, and none was
paid, for the passage through Floro's property during the month of
March. However, when Wenifreda saw Floro in the evening of April
7, 1983 to negotiate for the reopening of Road Lot 5 and Floro laid
down his conditions for the requested reopening and presumably
for the requested easement of right of way, Orlando rejected said
conditions for being onerous. The use of Road Lots 4 and 5 by the
Llenados during the month of March was by mere tolerance of
Floro pending the negotiation of the terms and conditions of the
right of way. This is evident from the testimony of Wenifreda that
"they said to us to go on while they are preparing for the papers"
and that "We can use that for a while, while they were making for
the papers." Although such use was in anticipation of a voluntary
easement of right of way, no such contract was validly entered into
by reason of the failure of the parties to agree on its terms and
conditions. Thus, private respondents Llenados cannot claim
entitlement to a right of way through the Floro Park Subdivision on
the basis of a voluntary easement.
3. ID.; ID.; ID.; COMPULSORY SERVITUDE OF RIGHT OF WAY;
PRECONDITIONS TO BE ESTABLISHED. To be entitled to a
compulsory servitude of right of way under the Civil Code, the
preconditions provided under Articles 649 and 650 thereof must
be established. These preconditions are: (1) that the dominant
estate is surrounded by other immovables and has no adequate
outlet to a public highway (Art. 649, par. 1); (2) after payment of
proper indemnity (Art. 649, par. 1); (3) that the isolation was not
due to acts of the proprietor of the dominant estate (Art. 649, last
par.); and, (4) that the right of way claimed is at the point least
prejudicial to the servient estate; and insofar as consistent with this
rule, where the distance from the dominant estate to a public
highway may be the shortest (Art. 650). The burden of proving the
existence of the prerequisites to validly claim a compulsory right of
way lies on the owner of the dominant estate.
4. ID.; ID.; ID.; ID.; ID.; NO ADEQUATE OUTLET TO A PUBLIC
HIGHWAY AS A CONDITION; NOT MET IN CASE AT BAR.
Significantly, when Orlando Llenado filed the complaint for legal
easement under Articles 649 and 650 of the Civil Code, he focused
his argument on the absence of any road, other than the closed
road of the Floro Park Subdivision, as his means of ingress and
egress to and from his property. However, he omitted to state that
there is a proposed access road through the Ipapo property. There
being an existing right of way over the Ipapo property, the first
requirement for a grant of a compulsory easement of right of way
over the Floro Park Subdivision has not been met.
5. ID.; ID.; ID.; ID.; ID.; PRE-PAYMENT OF REQUIRED
INDEMNITY; DEFINED. In Talisay-Silay Milling Co. v. Court of
First Instance of Negros Occidental, (42 SCRA 584) the Court
explained what is meant by payment or prepayment of the required
indemnity under Article 649 of the Civil Code, as follows: ". . .
Prepayment, as we used the term means the delivery of the proper
indemnity required by law for the damage that might be incurred
by the servient estate in the event the legal easement upon the
extent of compensation cannot be reached by the parties involved,
is not an impediment to the establishment of such easement.
Precisely, the action of the dominant estate against the servient
estate should include a prayer for the fixing of the amount which
may be due from the former to the latter." In the case at bench, no
proof was presented by private respondent Llenado that he
complied with this requirement. The complaint for easement of
right of way filed by him in the lower court did not contain a prayer
for the fixing of the amount that he must pay Floro in the event that
the easement of right of way be constituted. Thus, the existence
of the second requisite has likewise not been established.
6. ID.; ID.; ID.; ID.; ID.; ISOLATION WAS NOT DUE TO ACTS OF
THE PROPRIETOR OF THE DOMINANT ESTATE; NOT
SATISFIED IN THE CASE AT BAR. There can be no denying
that the isolation of the Llenado Homes Subdivision is the doing of
its owner/developer/applicant. It appears that the access road
indicated in the Plan of the Emmanuel Homes Subdivision and the
Llenado Homes Subdivision for which a right of way over the Ipapo
property was procured, was merely for the sake of securing an
approval of the proposed development plan. There were no proofs
of actual work having been done to construct a road, even just a
dirty road, over the right of way that would connect road Lot 3 of
the Llenado Homes Subdivision to the MacArthur Highway. Private
respondents Llenado admitted that the Ipapo riceland was no
longer being cultivated and there was already a fence made of
adobe wall constructed on it. Indication are that it has already been
abandoned as a ricefield. There was no reason for private
respondent's failure to develop the right of way except the
inconvenience and expenses it would cost him. Hence, the third
requisite has not been met.
7. ID.; ID.; ID.; ID.; REAL, NOT A FICTITIOUS OR ARTIFICIAL
NECESSITY REQUIRED TO JUSTIFY THE IMPOSITION
THEREOF. In order to justify the imposition of the servitude of
right of way, there must be a real, not a fictitious or artificial
necessity for it. Mere convenience for the dominant estate is not
what is required by law as the basis for setting up a compulsory
easement. Even in the face of a necessity, if it can be satisfied
without imposing the servitude, the same should not be imposed.
This easement can also be established for the benefit of a
tenement with an inadequate outlet, but not when the outlet is
merely inconvenient. Thus, when a person had already
established an easement of this nature in favor of his tenement,
he cannot demand another, even if the first passage has defects
which make passage impossible, if those defects can be
eliminated by proper repairs.
8. ID.; ID.; ID.; ID.; IMPOSITION THEREOF, NOT PROPER IN
CASE AT BAR. Worthy of mention is the trial court's reason for
the denial of the easement of right of way, thus: ". . . While it is true
that the conversion of said salable (sic) Lot 14, Block 6 into a Road
Lot has been approved by the Human Settlement Regulatory
Commission, such approval, however, does not ipso facto connect
Road Lot 5 and 4 (Exh. C-1) of the Floro Park Subdivision in the
absence of consent and/or approval of the owner of said Floro
Park Subdivision. . . . It should be emphasized that the end of Road
Lot 3 of Llenado Homes Subdivision facing MacArthur Highway as
per approved subdivision plan, subject of the proposed
amendment, has been designated/specified as an access road
directly leading to the MacArthur Highway. It is the shortest route
and the road alignment is direct and in a straight line perpendicular
to the MacArthur Highway. The disapproval, therefore, of the
closure and consequent conversion of both ends of Road Lot 3
into residential lots, in effect, maintains Road Lot 3 as an access
road of Llenado Homes Subdivision to the main highway. There
appears a semblance of deception if the provision for (the)
proposed access road in the approved subdivision plan of
Emmanuel Homes Subdivision, now Llenado Homes Subdivision,
would not be implemented as it would appear that the same was
indicated in the plans merely for purposes of approval of the
subdivision but not actually to develop and avail of the same was
originally intended." It is also worthwhile to observe that on
November 29, 1985 the then Minister of Public Works and
Highways found the construction of the concrete culvert across
Palanas Creek illegal in contemplation of Presidential Decree No.
296, Letters of Instructions No. 19 and Presidential Decree No.
1067 and ordered private respondent herein to remove or
demolish the same, to be carried out by the Chief Civil Engineer,
Bulacan Engineering District, at the expense of private
respondent. Failing to establish the existence of the prerequisites
under Articles 649 and 650 of the Civil Code, private respondent
Llenado's bid for a compulsory easement of right of way over Road
Lots 4 and 5 of the Floro Park Subdivision must fail.
DECISION
ROMERO, J p:
The instant petition for review on certiorari presents two (2) issues
for resolution, namely:
(1) whether or not a valid contract of easement of right of way
exists when the owner of one estate voluntarily allows the
owner of an adjacent estate passage through his property for
a limited time, without compensation; and,
(2) whether or not an owner/developer of a subdivision can
demand a compulsory easement of right of way over the
existing roads of an adjacent subdivision instead of
developing his subdivision's purposed access road as
provided in his duly approved subdivision plan.
Simeon Floro is the owner of a piece of land known as the Floro
Park Subdivision situated in Barangay Saluysoy, Meycauayan,
Bulacan. 1 The subdivision has its own egress and ingress to and
from the MacArthur Highway by means of its Road Lot 4 and the
PNR level crossing.
Orlando A. Llenado, 2 on the other hand, was the registered owner
of two (2) parcels of land, with the total area of 34, 573 sq. meters,
more or less,3known as the Llenado Homes Subdivision ("Llenado
Homes," for brevity). Prior to its purchase by Llenado from the
owner Francisco de Castro, the land was known as the Emmanuel
Homes Subdivision, a duly licensed and registered housing
subdivision in the name of Soledad Ortega. 4 Bounded on the
South by the 5 to 6 meter-wide Palanas Creek, 5 which separates
it from the Floro Park Subdivision, and on the west by ricelands
belonging to Marcial Ipapo, Montaos and Guevarra, the Llenado
Homes does not have any existing road or passage to the
MacArthur Highway. However, a proposed access road traversing
the idle riceland of Marcial Ipapo has been specifically provided in
the subdivision plan of Emmanuel Homes Subdivision which was
duly approved by the defunct Human Settlement Regulatory
Commission (now Housing and Land Use Regulatory Board). 6
Sometime in February, 1983, the Llenados sought, and were
granted, permission by the Floros to use Road Lots 4 and 5 of the
Floro Park Subdivision as the passageway to and from MacArthur
Highway. On April 7, 1983, however, Floro barricaded Road
Lot 5 with a pile of rocks, wooden posts and adobe stones,
thereby preventing its use by the Llenados.
Their request for the reopening of Road Lot 5 having been denied,
Orlando Llenado instituted on April 13, 1983, a complaint before
the Regional Trial Court (RTC) of Malolos, Bulacan, against
Simeon Floro for Easement of Right of Way with the Prayer of the
Issuance of a Writ of Preliminary Mandatory Injunction and
Damages. The complaint was docketed as the Civil Case No.
6834-M and raffled off to Branch XIX, presided over by Hon. Judge
Camilio Montesa.
After hearing and ocular inspection, the trial court, in an Order
dated July 15, 1983,7 granted the prayer for the issuance of a writ
of preliminary mandatory injunction upon the filing of a bond by
Llenado in the amount of one hundred thousand pesos
(P100,000.00). Floro was ordered:
"1. To open the road by removing the rocks and wooden posts
and/or to remove the barricade on the subject road of the Floro
Park Subdivision and enjoining him and any person or persons
under him from doing or performing any acts which will prevent
(LLENADO) or his agents or any person acting under
(LLENADO's) instruction from passing through the subject
subdivision road to get into and to get out of the aforementioned
properties of (LLENADO) until further order from this Court."
Floro moved for reconsideration but was denied the relief
sought. 8 He then filed with the Court of Appeals a petition for
certiorari and prohibition with petition for a writ of preliminary
injunction and restraining order, but later on, moved to withdraw
his petition. His motion for withdrawal was granted by the appellate
court in its Resolution dated March 30, 1984 which declared the
case closed and terminated. 9
In the meantime, Orlando Llenado died and was substituted by his
wife Wenifreda T. Llenado as administratrix of his estate and as
legal guardian of their four (4) minor children. 10 Trial on the merits
of the case which was suspended pending resolution of the
petition before the Court of Appeals, resumed.
On October 16, 1984, the trial court rendered judgment dismissing
the case and lifting the writ of preliminary mandatory injunction
previously issued. The dispositive portion of the decision 11 reads:
"WHEREFORE, judgment is hereby rendered dismissing the
instant complaint for lack of merit, and the writ of preliminary
mandatory injunction issued in favor of the plaintiff is hereby
ordered dissolved and/or lifted. On the counterclaim posed by
defendant, the plaintiff is hereby ordered to pay defendant the
following amounts:
a. P30,000.00 as actual damages suffered by defendant;
b. P77,500.00 as a compensation for the use of defendant's
property;
c. P15,000.00 as attorney's fees and;
d. To pay the costs of the suit.
SO ORDERED."
On the appeal by Llenado, the appellate court set aside the
decision of the trial court in a decision 12 promulgated on February
11, 1986, the dispositive portion of which reads as follows:
"WHEREFORE, premises considered, the decision appealed from
is hereby SET ASIDE and another one entered:
(1) Granting the establishment of a legal or compulsory easement
of right of way passing through Road Lots 4 and 5 of defendant's
Floro Park Subdivision in favor of plaintiff's Llenado Homes
Subdivision;
(2) Ordering defendant to remove immediately all of the
obstructions, such as walls, rocks and posts with which he had
barricaded Road Lot 5 for the purpose of preventing plaintiff from
using defendant's subdivision as passage way to the MacArthur
Highway;
(3) Ordering defendant to pay to plaintiff, upon finality of this
decision, the following:
(a) P60,000.00 temperate or moderate damages
(b) P100,000.00 moral damages; and
(c) P30,000.00 attorney's fees;
(4) Ordering plaintiff to pay to defendant the amount of P60,000.00
within ten (10) days from the date of finality of this decision as
indemnity for the right of way pursuant to the mandate of Article
649 of the Civil Code; and
(5) Ordering defendant to pay the costs.
The liability of the defendant under No. (3) (supra) shall be legally
compensated by the liability of the plaintiff under No. (4) (supra)
automatically to the extent that the amount of one is covered by
the amount of the other.
SO ORDERED."
On August 14, 1986, the appellate court in separate resolutions
denied Floro's motion for reconsideration and supplementary
motion 13 and granted Llenado's motion for partial execution
pending appeal. 14 The latter resolution provided in its dispositive
portion, thus:
"WHEREFORE, upon the posting by plaintiff appellant of a bond
in the amount of ONE HUNDRED THOUSAND PESOS
(P100,000.00) approved by this Court, let a writ of partial execution
pending appeal be issued ordering the defendant-appellee to
remove immediately all of the obstructions, including all walls,
rocks, posts, and other materials with which he has barricaded
Road Lot 5, for the purpose of preventing plaintiff-appellant from
using defendant's subdivision as passage way to the MacArthur
Highway. Said Order shall include Road Lot 4 so that plaintiff-
appellant will have free access to MacArthur Highway.
SO ORDERED."
The writ of partial execution pending appeal was issued on
October 2, 1986 after the instant Petition had been filed and after
the Court had resolved on September 15, 1986 to require Llenado
to comment thereon. On motion of Floro, the Court issued a
restraining order on October 29, 1986, 15 enjoining the appellate
court from carrying out its writ of partial execution pending appeal.
Subsequently, the instant petition was given due course. 16
In a petition to review a decision of the Court of Appeals
under Rule 45 of the Rules of Court, the jurisdiction of the Court is
ordinarily confined to reviewing errors of law committed by the
court of Appeals, its findings of fact being conclusive on the
Court. 17 There are, however, exceptional circumstances that
would compel the Court to review the findings of fact of the Court
of Appeals, summarized in Remalante v. Tibe 18 and subsequent
cases 19 as follows: (1) when the inference made is manifestly
mistaken, absurd or impossible; (2) when there is a grave abuse
of discretion; (3) when the finding is grounded entirely on
speculations, surmises or conjectures; (4) when the judgment of
the Court of Appeals is based on misapprehension of facts; (5)
when the findings of fact are conflicting; (6) when the Court of
Appeals in making its findings went beyond the issues of the case
and the same is contrary to the admissions of both appellant and
appellee; (7) when the findings of the Court of Appeals are
contrary to those of the trial court; (8) when the findings of fact are
conclusions without citation of a specific evidence on which they
are based; (9) when the Court of Appeals manifestly overlooked
certain relevant facts not disputed by the parties and which, if
properly considered, would justify a different conclusion; and, (10)
when the finding of fact of the Court of Appeals are premised on
the absence of evidence and are contradicted by the evidence on
record.
The findings and conclusions of the Court of Appeals, being
contrary to the findings and conclusions of the trial court, the
instant case falls within the exception. Thus, the Court may
scrutinize the evidence on the record to bring to light the real facts
of the case. 20
It is not disputed that sometime in February 1983, Floro granted
the Llenados verbal permission to pass through the Floro Park
Subdivision in going to and from the MacArthur Highway. Whether
such permission, as claimed by Floro, was the month of March
only, without compensation and as a neighborly gesture for the
purpose merely of enabling the Llenados to install stone
monuments (mojones) on their land, 21 or was in relation to the
easement of right of way granted in their favor, as insisted by the
Llenados, 22 the fact remains that no such contract of easement
of right of way was actually perfected between Floro and
Llenado. Both Orlando 23 and Wenifreda Llenado 24 testified the
conditions of the easement of right of way were still to be drawn
up by Floro's lawyer. Thus, no compensation was agreed upon,
and none was paid, for the passage through Floro's property
during the month of March. 25
However, when Wenifreda saw Floro in the evening of April 7,
1983 to negotiate for the reopening of Road Lot 5 and Floro laid
down his conditions 26for the requested reopening and
presumably for the requested easement of right of way, Orlando
rejected said conditions for being onerous. 27
In Dionisio v. Ortiz, 28 where therein private respondents claimed
to have every right to use Howmart Road as passageway to EDSA
by reason of a standing oral contract of easement of right of way
with therein petitioner, so that the latter did not have the right to
put a barricade in front of private respondent's gate and to stop
them from using said gate as a passageway to Howmart Road, the
Court said:
"There is no question that a right of way was granted in favor of
the private respondents over Howmart Road but the records
disclose that such right of way expired in December 1988. The
continued use of the easement enjoyed by QCIEA including the
private respondents is by the mere tolerance of the owner pending
the renegotiation of the terms and conditions of said right of way.
. . . Absent an agreement of the parties as to the consideration,
among others, no contract of easement of right of way has been
validly entered into by the petitioners and QCIEA. Thus the private
respondent's claim of an easement of right of way over Howmart
Road has no legal or factual basis."
As in the Dionisio case, the use of Road Lots 4 and 5 by the
Llenados during the month of March was by mere tolerance of
Floro pending the negotiation of the terms and conditions of the
right of way. This is evident from the testimony of Wenifreda that
"they said to us to go on while they are preparing for the papers"
and that "We can use that for a while, while they were making for
the papers." 29 Although such use was in anticipation of a
voluntary easement of right of way, no such contract was validly
entered into by reason of the failure of the parties to agree on its
terms and conditions. Thus, private respondents Llenados
cannot claim entitlement to a right of way through the Floro
Park Subdivision on the basis of a voluntary easement.
Having ruled that no voluntary easement of right of way had been
established in favor of private respondents Llenados, we now
determine whether or not they are entitled to a compulsory
easement of right of way.
For the Llenados to be entitled to a compulsory servitude of right
of way under the Civil Code, the preconditions provided
under Articles 649 and 650 thereof must be established. These
preconditions are: (1) that the dominant estate is surrounded by
other immovables and has no adequate outlet to a public highway
(Art. 649, par. 1); (2) after payment of proper indemnity (Art. 649,
par. 1); (3) that the isolation was not due to acts of the proprietor
of the dominant estate (Art. 649, last par.); and, (4) that the right
of way claimed is at the point least prejudicial to the servient
estate; and insofar as consistent with this rule, where the distance
from the dominant estate to a public highway may be the shortest
(Art. 650). 30
The burden of providing the existence of the prerequisites to
validly claim a compulsory right of way lies on the owner of the
dominant estate. 31 We find that private respondents have failed
in this regard.
Significantly, when Orlando Llenado filed the complaint for legal
easement under Articles 649 and 650 of the Civil Code, he focused
his argument on the absence of any road, other than the closed
road of the Floro Park Subdivision, as his means of ingress and
egress to and from his property. However, he omitted to state that
there is a proposed access road through the Ipapo property.
Danilo Ravello, an engineer employed as Project Officer of the
Human Settlement Regulatory Commission (HSRC) since 1981,
testified that his duties consisted in evaluating and processing
subdivision plans and making the proper recommendation for their
approval or disapproval. The application of Soledad Ortega for the
Emmanuel Homes Subdivision, 32 appearing on page 120 of the
records of the HSRC, had the following attachments: (1) Sketch
Plan of the property containing an area of 34,973 sq. m.; 33 (2)
Waterline Layout Plan; 34 (3) Vicinity Plan; 35 (4) Road Plan
Layout; 36 and (5) Consolidation Subdivision Plan. 37 According
to Ravello, as per Plan Exhs. "10-A" and "10-C", Road Lot 3 of the
Emmanuel Homes Subdivision starts and ends with adjacent
properties; on one end, the property owned by Mariano Monadero
and at the other, the property owned by a certain Ventura Tan
Mariano. As per Plans, the access road to the subdivision should
have come from the MacArthur Highway through the Ipapo
property. 38 Having found on ocular inspection that the access
road indicated in the Plan did not actually exist, the HSRC required
applicant Soledad Ortega to submit a written right of way
clearance from Ipapo, which she did and on the basis of which, her
application on behalf of the Emmanuel Homes Subdivision was
approved. 39
When Orlando Llenado acquired the subject property, he adopted
the subdivision plans of Emmanuel Homes and renamed it as the
Llenado Homes Subdivision. Accordingly, he applied for the
issuance of a new Development Permit and License to Sell in his
name as the new owner of the subdivision. Subsequently, the
corresponding license to sell and development permit were issued.
As shown by the Consolidation Subdivision Plan 40 submitted by
Orlando Llenado, the names Soledad Ortega/Emmanuel Homes
Subdivision were merely crossed out and, in lieu thereof, the
names Orlando Llenado/Llenado Homes Subdivision were written.
In said subdivision plan which was duly approved by the HSRC,
the Ipapo Access Road was retained.
On July 1, 1983, during the pendency of Civil Case No. 6834-M,
Orlando Llenado filed with the HSRC an application for the
amendment of the original Consolidation Subdivision Plan of the
Llenado Homes Subdivision. 41 The proposed amendments, as
indicated in Exh. "11-A", 42 were: (1) the conversion of Lot 14 of
Block 6 into a road lot, designed to connect with Road Lot 5 of the
Floro Homes Subdivision; and, (2) the closing of both ends of
Road Lot 3, the portion leading to the Ventura Tan Mariano
property and the portion leading to the Ipapo right of way (Adriano
Monadero property), to be converted into saleable residential lots.
The first proposed alteration, the conversion of Lot 14, Block 6 into
a road lot was approved on March 20, 1984. 43 The access road
of Llenado Homes Subdivision, however, remained in the
Subdivision Plan to be through the Ipapo property, as approved by
the HSRC.
When asked by the court as to the policy of the HSRC regarding
the approval of a subdivision plan in connection with the right of
way issue, Engr. Ravello responded that as a prerequisite for
approval, the subdivision must have an access road. It was not
necessary that the access road be a paved road. A dirt road was
sufficient provided that the owner of the lot used as access road
gives his consent and the owner/developer/applicant of the
proposed subdivision develops the proposed access road, 44 as
approved by the HSRC in compliance with Section 29
of Presidential Decree No. 957 which states:
"SEC. 29 Right of Way to Public Road The owner or developer
of a subdivision without access to any existing public road or street
must secure a right of way to a public road or street and such right
of way must be developed and maintained according to the
requirement of the government authorities concerned."
On appeal to the Court of Appeals, private respondents Llenado
submitted a letter of Marcial Ipapo dated July 3, 1985 addressed
to the HSRC, 45informing the latter that he did not give a road right
of way over his property in favor of Soledad Ortega, the developer
of Emmanuel Homes Subdivision. This letter seems to be an
aftermath of the testimony of Engr. Ravello that the notarized
affidavit of Ipapo submitted by Soledad Ortega to the HSRC could
not be located in the records of the Commission. 46 This new
matter, however, is inadmissible in evidence, not having been
authenticated in accordance with Section 20, Rule 132 of the
Rules of the Court. It was, therefore, erroneous on the part of the
Court of Appeals to consider this piece of evidence in its
Resolution For the Motion For Reconsideration dated August 124,
1986. 47
There being an existing right of way over the Ipapo property,
the first requirement for a grant of a compulsory easement of
right of way over the Floro Park Subdivision has not been met.
In Talisay-Silay Milling Co. v. Court of First Instance of Negros
Occidental, 48 the Court explained what is meant by payment or
prepayment of the required indemnity under Article 649 of the Civil
Code, as follows:
". . . Prepayment, as we used the term means the delivery of the
proper indemnity required by law for the damage that might be
incurred by the servient estate in the event the legal easement is
constituted. The fact that a voluntary agreement upon the extent
of compensation cannot be reached by the parties involved, is not
an impediment to the establishment of such easement. Precisely,
the action of the dominant estate against the servient estate
should include a prayer for the fixing of the amount which may be
due from the former to the latter."
In the case at bench, no proof was presented by private
respondent Llenado that he complied with this requirement. The
complaint for easement of right of way filed by him in the
lower court did not contain a prayer for the fixing of the
amount that he must pay Floro in the event that the easement
of right of way be constituted. Thus, the existence of the
second requisite has likewise not been established.
There can be no denying that the isolation of the Llenado
Homes Subdivision is the doing of its
owner/developer/applicant. It appears that the access road
indicated in the Plan of the Emmanuel Homes Subdivision and the
Llenado Homes Subdivision for which a right of way over the Ipapo
property was procured, was merely for the sake of securing an
approval of the proposed development plan. There were no proofs
of actual work having been done to construct a road, even just a
dirty road, over the right of way that would connect road Lot 3 of
the Llenado Homes Subdivision to the MacArthur Highway. Private
respondent llenado admitted that the Ipapo riceland was no longer
being cultivated and there was already a fence made of adobe wall
constructed on it. 49 Indication are that it has already been
abandoned as a ricefield. There was no reason for private
respondent's failure to develop the right of way except the
inconvenience and expenses it would cost him. Hence, the third
requisite has not been met.
If the servitude requested by private respondent Llenado is
allowed, other subdivision developers/owners would be
encouraged to hastily prepare a subdivision plan with fictitious
provisions for access roads merely for registration purposes.
Thereafter, said developers could abandon their duly approved
plans and, for whatever reason, open up another way through
another property under the pretext that they have inadequate
outlets to a public road or highway. Furthermore, if such practice
were tolerated, the very purpose for which Presidential Decree No.
957 was enacted, that is to protect subdivision buyers from
unscrupulous subdivision owners/developers who renege on their
duties to develop their subdivisions in accordance with the duly
approved subdivision plans, would be defeated.
The Court takes cognizance of the fact that, instead of developing
the proposed access road, private respondent Llenado applied for
the conversion of Lot 14 of Block 6 into a road lot to connect it with
Road Lot 5 of the Floro Park Subdivision, citing as reason therefor,
that the amendment sought would create a "more adequate and
practical passage" from Llenado Homes Subdivision to the
MacArthur National Highway and vise-versa. The "convenience"
of using Road Lots 4 and 5 of the Floro Park Subdivision will
not suffice, however, to justify the easement in favor of
private respondent.
In order to justify the imposition of the servitude of right of
way, there must be a real, not a fictitious or artificial necessity
for it. Mere convenience for the dominant estate is not what
is required by law as the basis for setting up a compulsory
easement. Even in the face of a necessity, if it can be satisfied
without imposing the servitude, the same should not be
imposed. 50 This easement can also be established for the
benefit of a tenement with an inadequate outlet, but not when the
outlet is merely inconvenient. Thus, when a person has already
established an easement of this nature in favor of his tenement,
he cannot demand another, even if those first passage has defects
which make passage impossible, if those defects can be
eliminated by proper repairs. 51
In the case of Ramos v. Gatchalian, 52 the Court denied access
to Sucat Road through Gatchalian Avenue in view of the fact that
petitioner had a road right of way provided by the Sobrina
Rodriguez Lombos Subdivision indicated as Lot 4133-G-12 in its
subdivision plan for the buyers of its lots, notwithstanding that said
lot was still undeveloped and inconvenient to petitioner. Even if
Ramos, the petitioner therein, had "to pass through other lots
belonging to other owners, which are grassy and cogonal, as
temporary ingress/egress with great inconvenience particularly
due to flood and mud," the Court did not allow the easement
because it would run counter to existing jurisprudence that mere
convenience for the dominant estate does not suffice to serve as
basis for the servitude. This ruling was reiterated in Rivera v.
Intermediate Appellate Court 53 and Constabella Corporation v.
Court of Appeals. 54
As borne out by the records of this case, despite the closure of the
subject road, construction work at Llenado Homes Subdivision
continued. The alternative route taken by private respondent is
admittedly inconvenient because he has to transverse several
ricelands and rice paddies belonging to different persons, not to
mention that said passage, as found by the trial court, is
impassable during the rainy season. However, private respondent
has no one to blame but himself for not developing the proposed
access road through the Ipapo property.
Worthy of mention is the trial court's reason 55 for the denial of the
easement of right of way, thus:
". . . While it is true that the conversion of said salable (sic) Lot 14,
Block 6 into a Road Lot has been approved by the Human
Settlement Regulatory Commission, such approval, however,
does not ipso facto connect Road Lot 5 and 4 (Exh. C-1) of the
Floro Park Subdivision in the absence of consent and/or approval
of the owner of said Floro Park Subdivision. . . . It should be
emphasized that the end of Road Lot 3 of Llenado Homes
Subdivision facing MacArthur Highway as per approved
subdivision plan, subject of the proposed amendment, has been
designated/specified as an access road directly leading to the
MacArthur Highway. It is the shortest route and the road alignment
is direct and in a straight line perpendicular to the MacArthur
Highway. The disapproval, therefore, of the closure and
consequent conversion of both ends of Road Lot 3 into residential
lots, in effect, maintains Road Lot 3 as an access road of Llenado
Homes Subdivision to the main highway. There appears a
semblance of deception if the provision for (the) proposed access
road in the approved subdivision plan of Emmanuel Homes
Subdivision, now Llenado Homes Subdivision, would not be
implemented as it would appear that the same was indicated in the
plans merely for purposes of approval of the subdivision but not
actually to develop and avail of the same was originally intended."
It is also worthwhile to observe that on November 29, 1985 the
then Minister of Public Works and Highways found the
construction of the concrete culvert across Palanas Creek illegal
in contemplation of Presidential Decree No. 296, Letters of
Instructions No. 19 and Presidential Decree No. 1067 and ordered
private respondent herein to remove or demolish the same, to be
carried out by the Chief Civil Engineer, Bulacan Engineering
District, at the expense of private respondent. 56
Failing to establish the existence of the prerequisites under
Articles 649 and 650 of the Civil Code, private respondent
Llenado's bid for a compulsory easement of right of way over Road
Lots 4 and 5 of the Floro Park Subdivision must fail.
It appears from the records that during the period from March 1983
until the closure of the subject roads on April 7, 1983, private
respondent was allowed to pass thru petitioner's subdivision
without any agreement or compensation. During the same period,
the subject roads (Road Lots 4 and 5) were damaged due to trucks
and heavy equipment passing thereon. Justice and equity demand
that petitioner be compensated for the said damage. Hence, the
lower court's decision awarding to petitioner Thirty Thousand
Pesos (P30,000.00) as actual and compensatory damages should
be affirmed.
Petitioner should likewise be indemnified for the use of his property
from July 15, 1983 (upon the reopening of the subject road
pursuant to the issuance of a writ of preliminary mandatory
injunction) until October 16, 1986 (when the writ was lifted). In the
absence of a specific provision applicable in the case at bench as
to the amount of proper indemnity, the award of Sixty Thousand
Pesos (P60,000.00) as temperate or moderate damages pursuant
to Articles 2224 and 2225 of the Civil Code 57 is considered
proper and reasonable. 58
As regards the claim for attorney's fees, considering that the
petitioner was compelled to file a petition for review on certiorari
before this Court, the amount of Thirty Thousand Pesos
(P30,000.00) is just reasonable. Cdpr
WHEREFORE, the appealed decision of the Court of Appeals is
SET ASIDE and the decision of the trial court, as herein modified,
is REINSTATED. Costs against private respondent.
SO ORDERED.
||| (Floro v. Llenado, G.R. No. 75723, [June 2, 1995], 314 PHIL
715-741)
Quimen v. Court of Appeals 257 SCRA 163
FIRST DIVISION
[G.R. No. 112331. May 29, 1996.]
ANASTACIA QUIMEN, petitioner, vs. COURT OF APPEALS an
d YOLANDA Q. OLIVEROS, respondents.
Benedicto L. Nanca for petitioner.
Armando A. San Antonio for private respondent.
SYLLABUS
1. REMEDIAL LAW; EVIDENCE;
FINDINGS OF FACT OF THE COURT OF APPEALS REVERSI
NG THE DECISION OF THE TRIAL COURT, UPHELD ON
APPEAL. But we find no cogent reason to disturb the
ruling of respondent appellate court granting a right of way to
private respondent through petitioner's property. In fact, as
between petitioner Anastacia and respondent Yolanda their
agreement has already been rendered moot insofar as it concerns
the determination ofthe principal issue herein presented. The
voluntary easement in favor of private respondent, which
petitioner now denies but which the court is inclined to believe, has
in fact become a legal easement or an easement by necessity
constituted by law. The trial court found that Yolanda's property
was situated at the back of her father's property and held that there
existed an available space of about nineteen (19) meters long
which could conveniently serve as a right ofway between the
boundary line and the house of Yolanda's father; that the vacant
space ended at the left back of Sotero's store which was
made of strong materials; that this explained why Yolanda
requested a detour to the lot of Anastacia and cut an
opening of one (1) meter wide and five (5) meters long to serve as
her right of way to the public highway. But notwithstanding its
factual observations, the trial court concluded, although
erroneously, that Yolanda was not entitled to a right of way on
petitioner's property since a detour through it would not make the
line straight and would not be the route shortest to the public
highway. In applying Art. 650 of the New Civil Code,
respondent Court of Appeals declared that the proposed
right of way of Yolanda, which is one (1) meter wide and five (5)
meters long at the extreme right of petitioner's property, will cause
the least prejudice and/or damage as compared to the suggested
passage through the property of Yolanda' s father which would
mean destroying the sari-sari store made of strong materials.
Absent any showing that these findings and conclusion are
devoid of factual support in the records, or are so glaringly
erroneous, this Court accepts and adopts them. As between a
right ofway that would demolish a store of strong materials to
provide egress to a public highway, and another right of way which
although longer will only require an avocado tree to be cut down,
the second alternative should be preferred. After all, it is not the
main function of this Court to analyze or weigh the evidence
presented all over again where the petition would necessarily
invite calibration of the whole evidence considering primarily the
credibility of witnesses, existence and relevancy of specific
surrounding circumstances, their relation to each other, and the
probabilities of the situation. In sum, this Court finds that the
decision of respondent appellate court is thoroughly backed up by
law and the evidence.
2. CIVIL LAW; PROPERTY, OWNERSHIP AND ITS
MODIFICATIONS; EASEMENT, DEFINED. As defined, an
easement is a real right on another's property, corporeal and
immovable, whereby the owner of the latter must refrain from
doing or allowing somebody else to do or something to be done
on his property, for the benefit of another person or tenement. It
is jus in re aliena, inseparable, indivisible and perpetual, unless
extinguished by causes provided by law. A right of way in
particular is a privilege constituted by covenant or granted by law
to a person or class of persons to pass over another's property
when his tenement is surrounded by realties belonging to others
without an adequate outlet to the public highway. The owner of the
dominant estate can demand a right of way through the servient
estate provided he indemnifies the owner thereof for the beneficial
use of his property.
3. ID.; ID.; EASEMENTS; RIGHT OF WAY; CONDITIONS FOR
GRANT THEREOF. The conditions sine qua non for a valid
grant of an easement of right of way are: (a) the dominant estate
is surrounded by other immovables without an adequate outlet to
a public highway; (b) the dominant estate is willing to pay the
proper indemnity; (c) the isolation was not due to the acts of the
dominant estate; and, (d) the right of way being claimed is at a
point least prejudicial to the servient estate.
4. ID.; ID.; ID.; ID.; CRITERION OF LEAST PREJUDICE TO THE
SERVIENT ESTATE, CONSTRUED. Petitioner finally insists
that respondent court erroneously concluded that the right of way
proposed by private respondent is the least onerous to the parties.
We cannot agree. Article 650 of the New Civil Code explicitly
states that the easement of right of way shall be established at the
point least prejudicial to the servient estate and, insofar as
consistent with this rule, where the distance from the dominant
estate to a public highway may be the shortest. The
criterion of least prejudice to the servient estate must prevail over
the criterion of shortest distance although this is a
matter of judicial appreciation. While shortest distance may
ordinarily imply least prejudice, it is not always so as when there
are permanent structures obstructing the shortest distance; while
on the other hand, the longest distance may be free of
obstructions and the easiest or most convenient to pass through.
In other words, where the easement may be established on
any of several tenements surrounding the dominant estate, the
one where the way is shortest and will cause the least
damage should be chosen. However, as elsewhere stated, if these
two (2) circumstances do not concur in a single tenement, the way
which will cause the least damage should be used, even if it will
not be the shortest.
DECISION
BELLOSILLO, J p:
IN EASEMENT OF RIGHT OF WAY that easement where the
way is shortest and will cause least prejudice shall be chosen.
However, if the two circumstances do not concur in a single
tenement, the way where damage will be least shall be used even
if not the shortest route. 1 This is so because least
prejudice prevails over shortest distance. This means that
the court is not bound to establish what is the shortest distance; a
longer way may be adopted to avoid injury to the servient estate,
such as when there are constructions or walls which can be
avoided by a round about way, or to secure the interest of the
dominant owner, such as when the shortest distance would place
the way on a dangerous decline.
FACTS:
Petitioner Anastacia Quimen together with her brothers Sotero,
Sulpicio, Antonio and sister Rufina inherited a piece of property
situated in Pandi, Bulacan. They agreed to subdivide the property
equally among themselves, as they did, with the
shares of Anastacia, Sotero, Sulpicio and Rufina abutting the
municipal road. The share of Anastacia, located at the extreme
left, was designated as Lot No. 1448-B-1. It is bounded on the right
by the property of Sotero designated as Lot No. 1448-B-2.
Adjoining Sotero's property on the right are Lots Nos. 1448-B-3
and 1448-B-4 originally owned by Rufina and Sulpicio,
respectively, but which were later acquired by a certain Catalina
Santos. Located directly behind the lots of Anastacia and Sotero
is the share of their brother Antonio designated as Lot No. 1448-
B-C which the latter divided into two (2) equal parts, now Lots Nos.
1448-B-6-A and 1448-B-6-B, each with an area of 92 square
meters. Lot No. 1448-B-6-A is located behind Anastacia's Lot No.
1448-B-1, while Lot No. 1448-B-6-B is behind the property of
Sotero, father of respondent Yolanda.
In February 1982 Yolanda purchased Lot No. 1448-B-6-A from her
uncle Antonio through her aunt Anastacia who was then acting as
his administratrix. According to Yolanda, when petitioner offered
her the property for sale she was hesitant to buy as it had no
access to a public road. But Anastacia prevailed upon her to buy
the lot with the assurance that she would give her a right of way
on her adjoining property for P200.00 per square meter.
Thereafter, Yolanda constructed a house on the lot she bought
using as her passageway to the public highway a
portion of Anastacia's property. But when Yolanda finally offered
to pay for the use of the pathway Anastacia refused to accept the
payment. In fact she was thereafter barred by Anastacia from
passing through her property. 2
In February 1986 Yolanda purchased the other
lot of Antonio Quimen, Lot No. 1448-B-6-B, located directly behind
the property of her parents who provided her a pathway gratis et
amore between their house, extending about nineteen (19) meters
from the lot of Yolanda behind the sari sari store of Sotero, and
Anastacia's perimeter fence. The store is made of strong materials
and occupies the entire frontage of the lot measuring four (4)
meters wide and nine meters (9) long. Although the pathway leads
to the municipal road it is not adequate for ingress and egress. The
municipal road cannot be reached with facility because the store
itself obstructs the path so that one has to pass through the back
entrance and the facade of the store to reach the road.
On 29 December 1987 Yolanda filed an action with the
proper court praying for a right of way through Anastacia's
property. An ocular inspection upon instruction of the presiding
judge was conducted by the branch clerk of court. The report was
that the proposed right of way was at the extreme
right of Anastacia's property facing the public highway, starting
from the back of Sotero's sari sari store and extending inward by
one (1) meter to her property and turning left for about five (5)
meters to avoid the store of Sotero in order to reach the municipal
road 3 and the way was unobstructed except for an avocado tree
standing in the middle. 4
But on 5 September 1991 the trial court dismissed the complaint
for lack of cause of action, explaining that the right of way through
Sotero's property was a straight path and to allow a detour by
cutting through Anastacia's property would no longer make the
path straight. Hence the trial court concluded that it was more
practical to extend the existing pathway to the public road by
removing that portion of the store blocking the path as that was the
shortest route to the public road and the least prejudicial to the
parties concerned than passing through Anastacia's property. 5
On appeal by respondent Yolanda, the Court of Appeals reversed
the lower court and held that she was entitled to a right of way on
petitioner's property and that the way proposed by Yolanda would
cause the least damage and detriment to the servient
estate. 6 The appellate court however did not award damages to
private respondent as petitioner did not act in bad faith in resisting
the claim.
Petitioner now comes to us imputing ERROR to
respondent Court of Appeals: (a) in disregarding the
agreement of the parties; (b) in considering petitioner's property as
a servient estate despite the fact that it does not abut or adjoin the
property of private respondent; and, (c) in holding that the one-
meter by five-meter passage way proposed by private respondent
is the least prejudicial and the shortest distance to the public road.
Incidentally, petitioner denies having promised private respondent
a right of way. She claims that her agreement with private
respondent was to provide the latter with a right of way on the
other lot of Antonio Quimen under her administration when it was
not yet sold to private respondent. Petitioner insists that passing
through the property of Yolanda's parents is more accessible to
the public road than to make a detour to her property and cut down
the avocado tree standing thereon.
Petitioner further argues that when Yolanda purchased Lot No.
1448-B-6-B in 1986 the easement of right of way she provided her
(petitioner) was ipso jure extinguished as a result of the
merger of ownership of the dominant and the servient estates in
one person so that there was no longer any compelling reason to
provide private respondent with a right of way as there are other
surrounding lots suitable for the purpose. Petitioner strongly
maintains that the proposed right of way is not the shortest access
to the public road because of the detour and that, moreover, she
is likely to suffer the most damage as she derives a net
income of P600.00 per year from the sale of the fruits of her
avocado tree, and considering that an avocado has an average life
span of seventy (70) years, she expects a substantial earning from
it. 7
But we find no cogent reason to disturb the ruling of respondent
appellate court granting a right of way to private respondent
through petitioner's property. In fact, as between petitioner
Anastacia and respondent Yolanda their agreement has already
been rendered moot insofar as it concerns the determination of the
principal issue herein presented. The voluntary easement in
favor of private respondent, which petitioner now denies but which
the court is inclined to believe, has in fact become a legal
easement or an easement by necessity constituted by law. 8
As defined, an easement is a real right on another's property,
corporeal and immovable, whereby the owner of the latter must
refrain from doing or allowing somebody else to do or something
to be done on his property, for the benefit of another person or
tenement. 9 It is jus in re aliena, inseparable, indivisible and
perpetual, unless extinguished by causes provided by law. A
right of way in particular is a privilege constituted by covenant or
granted by law 10 to a person or class of persons to pass over
another's property when his tenement is surrounded by realties
belonging to others without an adequate outlet to the public
highway. The owner of the dominant estate can demand a
right of way through the servient estate provided he indemnifies
the owner thereof for the beneficial use of his property. 11
The conditions sine qua non for a valid grant of an
easement of right of way are: (a) the dominant estate is
surrounded by other immovables without an adequate outlet to a
public highway; (b) the dominant estate is willing to pay the proper
indemnity; (c) the isolation was not due to the acts of the dominant
estate; and, (d) the right of way being claimed is at a point least
prejudicial to the servient estate. 12
A cursory examination of the complaint of respondent Yolanda for
a right of way 13 readily shows that
[E]ven before the purchase of the said parcels of land the plaintiff
was reluctant to purchase the same for they are enclosed with
permanent improvements like a concrete fence and store and
have (sic) no egress leading to the road but because of the
assurance of the defendant that plaintiff will be provided one (1)
meter wide and five (5) meters long right of way in the
sum of P200.00 per square meter to be taken from Anastacia's lot
at the side of a concrete store until plaintiff reach(es) her father's
land, plaintiff was induced to buy the aforesaid parcels of land . . .
That the aforesaid right of way is the shortest, most convenient
and the least onerous leading to the road and being used by the
plaintiff's predecessors-in-interest from the very inception . . . .
The evidence clearly shows that the property of private
respondent is hemmed in by the estates of other persons including
that of petitioner; that she offered to pay P200.00 per square meter
for her right of way as agreed between her and petitioner; that she
did not cause the isolation of her property; that the right of way is
the least prejudicial to the servient estate. 14 These facts are
confirmed in the ocular inspection report of the clerk of court, more
so that the trial court itself declared that "[t]he said
properties of Antonio Quimen which were purchased by plaintiff
Yolanda Quimen Oliveros were totally isolated from the public
highway and there appears an imperative need for an
easement of right of way to the public highway." 15
Petitioner finally insists that respondent court erroneously
concluded that the right of way proposed by private respondent is
the least onerous to the parties. We cannot agree. Article
650 of the New Civil Code explicitly states that the
easement of right of way shall be established at the point least
prejudicial to the servient estate and, insofar as consistent with this
rule, where the distance from the dominant estate to a public
highway may be the shortest. The criterion of least prejudice to
the servient estate must prevail over the criterion of shortest
distance although this is a matter of judicial appreciation.
While shortest distance may ordinarily imply least prejudice, it is
not always so as when there are permanent structures obstructing
the shortest distance; while on the other hand, the longest
distance may be free of obstructions and the easiest or most
convenient to pass through. In other words, where the easement
may be established on any of several tenements surrounding the
dominant estate, the one where the way is shortest and will cause
the least damage should be chosen. However, as elsewhere
stated, if these two (2) circumstances do not concur in a single
tenement, the way which will cause the least damage should be
used, even if it will not be the shortest. 16 This is the test.
In the trial court, petitioner openly admitted
Q. You testified during your direct examination about this plan,
kindly go over this and please point to us in what portion of this
plan is the house or store of the father of the (plaintiff)?
A. This one, sir (witness pointed a certain portion located near the
proposed right of way).
xxx xxx xxx
Q. Now, you will agree with me . . . that this portion is the front
portion of the lot owned by the father of the plaintiff and which was
(sic) occupied by a store made up of strong materials?
A. It is not true, sir.
Q. What materials does (sic) this store of the father of the plaintiff
made of?
A. Hollow blocks and the side is made of wood, sir.
xxx xxx xxx
Q. Just before your brother disposed that 1/2 portion of the lot in
question, what right of way does (sic) he use in reaching the public
road, kindly point to this sketch that he is (sic) using in reaching
the public road?
A. In my property, sir.
Q. Now you will agree with me . . . the main reason why your
brother is (sic) using this property is because there was a store
located near this portion?
A. Yes, and according to the father of Yolanda there is no other
way than this, sir. 17
The trial court found that Yolanda's property was situated at the
back of her father's property and held that there existed an
available space of about nineteen (19) meters long which could
conveniently serve as a right of way between the boundary line
and the house of Yolanda's father; that the vacant space ended at
the left back of Sotero's store which was made of strong materials;
that this explained why Yolanda requested a detour to the lot of
Anastacia and cut an opening of one (1) meter wide and five (5)
meters long to serve as her right of way to the public highway. But
notwithstanding its factual observations, the trial court concluded,
although erroneously, that Yolanda was not entitled to a
right of way on petitioner's property since a detour through it would
not make the line straight and would not be the route shortest to
the public highway.
In applying Art. 650 of the New Civil Code,
respondent Court of Appeals declared that the proposed
right of way of Yolanda, which is one (1) meter wide and five (5)
meters long at the extreme right of petitioner's property, will cause
the least prejudice and/or damage as compared to the suggested
passage through the property of Yolanda's father which would
mean destroying the sari sari store made of strong materials.
Absent any showing that these findings and conclusion are
devoid of factual support in the records, or are so glaringly
erroneous, this Court accepts and adopts them. As between a
right of way that would demolish a store of strong materials
to provide egress to a public highway, and another
right of way which although longer will only require an
avocado tree to be cut down, the second alternative should
be preferred. After all, it is not the main function of this Court to
analyze or weigh the evidence presented all over again where the
petition would necessarily invite calibration of the whole evidence
considering primarily the credibility of witnesses, existence and
relevancy of specific surrounding circumstances, their relation to
each other, and the probabilities of the situation. 18 In sum,
this Court finds that the decision of respondent appellate court is
thoroughly backed up by law and the evidence.
WHEREFORE, no reversible error having been committed by
respondent Court of Appeals, the petition is DENIED and the
decision subject of review is AFFIRMED. Costs against petitioner.
SO ORDERED.
||| (Quimen v. Court of Appeals, G.R. No. 112331, [May 29, 1996],
326 PHIL 969-981)
De Jesus, et al. v. Howmart Corp., et al. 12 CA Rep. 831
DE JESUS ET AL VS HOWMART ET AL 12 CA REP 83
FACTS:
Jesus and Luz Miranda de Jesus are owners of the building
located in Tondo, Manila. They brought an action for damages
against Homart Corporation and Howmill Manufacturing
Corporation, owners of the land adjoining the plaintiff on the same
street where a sixty storey concrete building was constructed.
Plaintiffs allege that the defendants failed to observe the
necessary care and precautions to protect the construction of the
plaintiffs by depriving it of sufficient lateral or subjacent support,
thereby causing it to sink in some parts; its walls, ceilings, and
floorings to crack in some places; and by the careless manner of
handling the cement used the roofings of the building of the
plaintiff were damaged with the accumulated debris piled thereon.
ISSUE:
whether or not proper precautions had been taken by the
defendants in constructing the building in question so as
to prevent causing damage to the building of the plaintiff.
HELD:
No. Article 684 of the New Civil Code provides No property shall
make such excavations upon his land as to deprive any adjacent
land or building sufficient lateral or subjacent support. A reading
of Article 684 shows that the duty of an adjacent owner not to
deprive any adjacent land or building of sufficient lateral or
subjacent support is an absolute one. It does not depend on the
degree of care and precaution made by the proprietor in making
the excavation or building on his land. Plaintiffs house which
adjoins the seven storey concrete building constructed by the
defendants had sunk by about eight inches. The sinking of the left
side of the house of the plaintiffs was due to the weakening of
subjacent support and to the weight of the seven storey concrete
building constructed by the defendant, as the excavation made
necessarily disturbed the subjacent soil of the plaintiffs land.
Defendants having failed to provide the plaintiffs land and house
with sufficient lateral and subjacent support are liable for damages.
La Vista Association, Inc. v. Court of Appeals 278 SCRA 498
FIRST DIVISION
[G.R. No. 95252. September 5, 1997.]
LA VISTA ASSOCIATION, INC., petitioner, vs. COURT OF
APPEALS, SOLID HOMES, INC., ATENEO DE MANILA
UNIVERSITY, ROMULO VILLA, LORENZO TIMBOL, EMDEN
ENCARNACION, VICENTE CASIO, JR., DOMINGO REYES,
PEDRO C. MERCADO, MARIO AQUINO, RAFAEL GOSECO,
PORFIRIO CABALU, JR., and ANTONIO ADRIANO, in their
behalf and in behalf of the residents of LOYOLA GRAND
VILLAS, INC., PHASES I AND II, respondents.
Bonifacio A. Alentajan for petitioner.
Angara, Abello, Concepcion Regala Cruz for respondents Romulo
Villa, et al.
Bengson Narciso Cudala Pecson & Jimenez for ADMU.
Tomas R. Leonidas for respondent Solid Homes.
SYNOPSIS
The area comprising the 15-meter wide roadway was part of a land
owned by the Tuasons which was sold to Philippine Building
Corporation by virtue of a Deed of Sale with Mortgage. Paragraph
three (3) of the deed provides that ". . .the boundary line between
the property herein sold and the adjoining property of the
VENDORS shall be a road fifteen (15) meters wide, one-half of
which shall be taken from the property herein sold to the VENDEE
and the other half from the portion adjoining belonging to the
VENDORS." The land was later sold to Ateneo de Manila
University with the consent of the Tuasons. The Tuasons later
developed its 7.5 meter share of the Mangyan road, while Ateneo
erected an adobe wall on the entire length of the boundary of its
property parallel to the 15-meter wide roadway which was later
removed due to an amicable settlement. Ateneo sold 16 hectares
of its property along Mangyan road to Solid Homes, Inc. and the
deed of sale provided among others that the vendor passes unto
the vendee the privileges of such right-of-way. Subsequently, Solid
Homes, Inc. developed the Loyola Grand Villas. La Vista, a
residential village developed by the Tuasons, prohibited the
agents and assignees of Solid Homes, Inc. and residents of Loyola
from traversing the Mangyan Road. Solid Homes Inc. then
instituted an action, and prayed that LA VISTA be enjoined from
preventing and obstructing the use and passage of LOYOLA
residents through Mangyan Road. The trial court issued a
preliminary injunction in favor of Solid Homes, Inc. which was
nullified and set aside by the Appellate Court. In a petition for
review on certiorari filed with the Supreme Court, Solid Homes,
Inc. assailed the nullification and setting aside of the preliminary
injunction issued by the trial court.
Meanwhile, the Regional Trial Court of Quezon City rendered a
decision on the merits affirming and recognizing the easement of
right-of-way along Mangyan Road in favor of Solid Homes, Inc. LA
VISTA appealed to the Court of Appeals, which affirmed in toto the
decision of the trial court.
The Supreme Court held that the opinion and findings of fact of a
court when issuing a writ preliminary injunction are interlocutory in
nature and made even before the trial on the merits is terminated.
Being an ancillary remedy, the proceedings for preliminary
injunction cannot stand separately or proceed independently of the
decision rendered on the merits of the main case for injunction.
The merits of the main case having been already determined in
favor of the applicant, the preliminary determination of its non-
existence ceases to have any force and effect.
It is very apparent that the parties and their respective
predecessors-in-interest intended to establish an easement of
right-of-way over Mangyan Road for their mutual benefit, both as
dominant and servient estates. The opening of an adequate outlet
to a highway can extinguish only legal or compulsory easements,
not voluntary easements like in the case at bar. The fact that an
easement by grant may have also qualified as an easement of
necessity does not detract from its permanency as a property right,
which survives the termination of the necessity.
SYLLABUS
1. REMEDIAL LAW; PROVISIONAL REMEDIES; PRELIMINARY
INJUNCTION; ORDER ISSUING WRIT, INTERLOCUTORY. A
writ of preliminary injunction is generally based solely on initial and
incomplete evidence. The opinion and findings of fact of a court
when issuing a writ of preliminary injunction are interlocutory in
nature and made even before the trial on the merits is terminated.
Consequently there may be vital facts subsequently presented
during the trial which were not obtaining when the writ of
preliminary injunction was issued. Hence, to equate the basis for
the issuance of a preliminary injunction with that for the issuance
of a final injunctive writ is erroneous. And it does not necessarily
mean that when a writ of preliminary injunction issues a final
injunction follows. We thus repeat what we said in Solid Homes,
Inc., v. La Vista which respondent Court of Appeals quoted in its
assailed Decision Being an ancillary remedy, the proceedings
for preliminary injunction cannot stand separately or proceed
independently of the decision rendered on the merits of the main
case for injunction. The merits of the main case having been
already determined in favor of the applicant, the preliminary
determination of its non-existence ceases to have any force and
effect.
2. CIVIL LAW; PROPERTY, OWNERSHIP AND ITS
MODIFICATION; EASEMENT; LEGAL EASEMENT
DISTINGUISHED FROM VOLUNTARY EASEMENT. A legal
or compulsory easement is that which is constituted by law for
public use or for private interest. By express provisions of Arts. 649
and 650 of the New Civil Code, the owner of an estate may claim
a legal or compulsory right-of-way only after he has established
the existence of four (4) requisites, namely: (a) the estate is
surrounded by other immovables and is without adequate outlet to
a public highway; (b) after payment of the proper indemnity; (c) the
isolation was not due to the proprietor's own acts; and (d) the right-
of-way claimed is at a point least prejudicial to the servient estate,
and insofar as consistent with this rule, where the distance from
the dominant estate to a public highway may be shortest. A
voluntary easement on the other hand is constituted simply by will
or agreement of the parties.
3. ID.; ID.; ID.; EASEMENT IN CASE AT BAR A VOLUNTARY
ONE. From the facts of the instant case it is very apparent that
the parties and their respective predecessors-in-interest intended
to establish an easement of right-of-way over Mangyan Road for
their mutual benefit, both as dominant and servient estates. This
is quite evident when: (a) the Tuasons and the Philippine Building
Corporation in 1949 stipulated in par. 3 of their Deed of Sale with
Mortgage that the "boundary line between the property herein sold
and the adjoining property of the VENDORS shall be a road fifteen
(15) meters wide, one-half of which shall be taken from the
property herein sold to the VENDEE and the other half from the
portion adjoining belonging to the vendors"; (b) the Tuasons in
1951 expressly agreed and consented to the assignment of the
land to, and the assumption of all the rights and obligations by
ATENEO, including the obligation to contribute seven and one-half
meters of the property sold to form part of the 15-meter wide
roadway; (c) the Tuasons in 1958 filed a complaint against
MARYKNOLL and ATENEO for breach of contract and the
enforcement of the reciprocal easement on Mangyan Road, and
demanded that MARYKNOLL set back its wall to restore Mangyan
Road to its original width of 15 meters, after MARYKNOLL
constructed a wall in the middle of the 15 meter wide roadway; (d)
LA VISTA President Manuel J. Gonzales admitted and clarified in
1976, in a letter to ATENEO President Fr. Jose A. Cruz, S.J., that
"Mangyan Road is a road fifteen meters wide, one half of which is
taken from your property and the other half from the La Vista
Subdivision. So that the easement of a right-of-way on your 7 1/2
m. portion was created in our favor and likewise an easement of
right-of-way was created on our 7 1/2 m. portion of the road in your
favor"; (e) LA VISTA, in its offer to buy the hillside portion of the
ATENEO property in 1976, acknowledged the existence of the
contractual right of-way as it manifested that the mutual right-of-
way between the Ateneo de Manila University and La Vista
Homeowners' Association would be extinguished if it bought the
adjacent ATENEO property and would thus become the owner of
both the dominant and servient estates; and, (f) LA VISTA
President Luis G. Quimson, in a letter addressed to the Chief
Justice, received by this Court on 26 March 1997, acknowledged
that "'one-half of the whole length of (Mangyan Road) belongs to
La Vista Assn., Inc. The other half is owned by Miriam (Maryknoll)
and the Ateneo in equal portions". These certainly are indubitable
proofs that the parties concerned had indeed constituted a
voluntary easement of right-of-way over Mangyan Road and, like
any other contract, the same could be extinguished only by mutual
agreement or by renunciation of the owner of the dominant estate.
4. ID.; ID.; ID.; ADEQUATE OUTLET TO A HIGHWAY CANNOT
EXTINGUISH VOLUNTARY EASEMENT. The argument of
petitioner LA VISTA that there are other routes to LOYOLA from
Mangyan Road is likewise meritless, to say the least. The opening
of an adequate outlet to a highway can extinguish only legal
or compulsory easements, not voluntary easements like in
the case at bar. The fact that an easement by grant may have
also qualified as an easement of necessity does not detract from
its permanency as a property right, which survives the termination
of the necessity.
5. ID.; OBLIGATIONS AND CONTRACTS; PARTIES MAY
STIPULATE TO OBSERVE PROVISIONS OF CONTRACT BY
ALL WHO IN THE FUTURE MAY SUCCEED THEM. That there
is no contract between LA VISTA and Solid Homes, Inc. and thus
the court could not have declared the existence of an easement
created by the manifest will of the parties, is devoid of merit. The
predecessors-in-interest of both LA VISTA and Solid Homes, Inc.,
i.e., the Tuasons and the Philippine Building Corporation,
respectively, clearly established a contractual easement of right-
of-way over Mangyan Road. When the Philippine Building
Corporation transferred its rights and obligations to ATENEO the
Tuasons expressly consented and agreed thereto. Meanwhile, the
Tuasons themselves developed their property into what is now
known as LA VISTA. On the other hand, ATENEO sold the hillside
portions of its property to Solid Homes, Inc., including the right
over the easement of right-of-way. In sum, when the easement in
this case was established by contract, the parties unequivocally
made provisions for its observance by all who in the future might
succeed them in dominion.
6. REMEDIAL LAW; ACTIONS; INTERVENTION; ORDINARILY
NOT ALLOWED AFTER TRIAL; ALLOWED ON APPEAL FOR
THOROUGH DISPOSITION OF CASE. Finally petitioner
questions the intervention of some LOYOLA residents at a time
when the case was already on appeal, and submits that
intervention is no longer permissible after trial has been
concluded. Suffice it to say that in Director of Lands v. Court of
Appeals (93 SCRA 238, 245-246), we said It is quite clear and
patent that the motions for intervention filed by the movants at this
stage of the proceedings where trial has already been concluded,
a judgment thereon had been promulgated in favor of private
respondent and on appeal by the losing party . . . the same was
affirmed by the Court of Appeals and the instant petition for
certiorari to review said judgment is already submitted for decision
by the Supreme Court, are obviously and manifestly late, beyond
the period prescribed under . . . Section 2, Rule 12 of the Rules of
Court (now Sec. 2, Rule 19, 1997 Rules of Civil Procedure). But
Rule 12 of the Rules of Court, like all other Rules therein
promulgated, is simply a rule of procedure, the whole purpose and
object of which is to make the powers of the Court fully and
completely available for justice. The purpose of procedure is not
to thwart justice. Its proper aim is to facilitate the application of
justice to the rival claims of contending parties. It was created not
to hinder and delay but to facilitate and promote the administration
of justice. It does not constitute the thing itself which courts are
always striving to secure to litigants. It is designed as the means
best adopted to obtain that thing. In other words, it is a means to
an end. The denial of the motion for intervention arising from the
strict application of the Rule due to alleged lack of notice to, or the
alleged failure of, movants to act seasonably will lead the Court to
commit an act of injustice to the movants, to their successors-in-
interests and to all purchasers for value and in good faith and
thereby open the door to fraud, falsehood and misrepresentation,
should intervenors' claims be proven to be true. After all, the
intervention does not appear to have been filed to delay the
proceedings. On the contrary, it seems to have expedited the
resolution of the case as the incidents brought forth by the
intervention, which could have been raised in another case, were
resolved together with the issues herein resulting in a more
thorough disposal of this case.
DECISION
BELLOSILLO, J p:
MANGYAN ROAD is a 15-meter wide thoroughfare in Quezon City
abutting Katipunan Avenue on the west, traversing the edges of
La Vista Subdivision on the north and of the Ateneo de Manila
University and Maryknoll (now Miriam) College on the south.
Mangyan Road serves as the boundary between LA VISTA on one
side and ATENEO and MARYKNOLL on the other. It bends
towards the east and ends at the gate of Loyola Grand Villas
Subdivision. The road has been the subject of an endless dispute,
the disagreements always stemming from this unresolved issue:
Is there an easement of right-of-way over Mangyan Road?
In resolving this controversy, the Court would wish to write finis to
this seemingly interminable debate which has dragged on for more
than twenty years.
The area comprising the 15-meter wide roadway was originally
part of a vast tract of land owned by the Tuasons in Quezon City
and Marikina. On 1 July 1949 the Tuasons sold to Philippine
Building Corporation a portion of their landholdings amounting to
1,330,556 square meters by virtue of a Deed of Sale with
Mortgage. Paragraph three (3) of the deed provides that ". . . the
boundary line between the property herein sold and the adjoining
property of the VENDORS shall be a road fifteen (15) meters wide,
one-half of which shall be taken from the property herein sold to
the VENDEE and the other half from the portion adjoining
belonging to the VENDORS."
On 7 December 1951 the Philippine Building Corporation, which
was then acting for and in behalf of Ateneo de Manila University
(ATENEO) in buying the properties from the Tuasons, sold,
assigned and formally transferred in a Deed of Assignment with
Assumption of Mortgage, with the consent of the Tuasons, the
subject parcel of land to ATENEO which assumed the mortgage.
The deed of assignment states
The ASSIGNEE hereby agrees and assumes to pay the mortgage
obligation on the above-described land in favor of the
MORTGAGOR and to perform any and all terms and conditions as
set forth in the Deed of Sale with Mortgage dated July 1, 1949,
hereinabove referred to, which said document is incorporated
herein and made an integral part of this contract by reference . . .
On their part, the Tuasons developed a part of the estate adjoining
the portion sold to Philippine Building Corporation into a residential
village known as La Vista Subdivision. Thus the boundary between
LA VISTA and the portion sold to Philippine Building Corporation
was the 15-meter wide roadway known as the Mangyan Road.
On 6 June 1952 ATENEO sold to MARYKNOLL the western
portion of the land adjacent to Mangyan Road. MARYKNOLL then
constructed a wall in the middle of the 15-meter wide roadway
making one-half of Mangyan Road part of its school campus.
The Tuasons objected and later filed a complaint before the then
Court of First Instance of Rizal for the demolition of the wall.
Subsequently, in an amicable settlement, MARYKNOLL agreed to
remove the wall and restore Mangyan Road to its original width of
15 meters.
Meanwhile, the Tuasons developed its 7.5-meter share of the 15-
meter wide boundary. ATENEO deferred improvement on its share
and erected instead an adobe wall on the entire length of the
boundary of its property parallel to the 15-meter wide roadway.
On 30 January 1976 ATENEO informed LA VISTA of the former's
intention to develop some 16 hectares of its property along
Mangyan Road into a subdivision. In response, LA VISTA
President Manuel J. Gonzales clarified certain aspects with regard
to the use of Mangyan Road. Thus
. . . The Mangyan Road is a road fifteen meters wide, one-half of
which is taken from your property and the other half from the La
Vista Subdivision. So that the easement of a right-of-way on your
7 m. portion was created in our favor and likewise an easement
of right-of-way was created on our 7 portion of the road in your
favor (paragraph 3 of the Deed of Sale between the Tuasons and
the Philippine Building Corporation and Ateneo de Manila dated 1
July 1949 . . .
On 28 April 1976 LA VISTA President Manuel J. Gonzales, in a
letter to ATENEO President Fr. Jose A. Cruz, S. J., offered to buy
under specified conditions the property ATENEO was intending to
develop. One of the conditions stipulated by the LA VISTA
President was that "[i]t is the essence of the offer that the mutual
right of way between the Ateneo de Manila University and La Vista
Homeowners' Association will be extinguished." The offer of LA
VISTA to buy was not accepted by ATENEO. Instead, on 10 May
1976 ATENEO offered to sell the property to the public subject to
the condition that the right to use the 15-meter roadway will be
transferred to the vendee who will negotiate with the legally
involved parties regarding the use of such right as well as the
development costs for improving the access road.
LA VISTA became one of the bidders. However it lost to Solid
Homes, Inc., in the bidding. Thus on 29 October 1976 ATENEO
executed a Deed of Sale in favor of Solid Homes, Inc., over
parcels of land covering a total area of 124,424 square meters
subject, among others, to the condition that
7. The VENDOR hereby passes unto the VENDEE, its assigns
and successors-in-interest the privileges of such right of way which
the VENDOR acquired, and still has, by virtue of the Deeds
mentioned in the immediately preceeding paragraph hereof;
provided, that the VENDOR shall nonetheless continue to enjoy
said right of way privileges with the VENDEE, which right of way
in favor of the VENDOR shall be annotated on the pertinent road
lot titles. However it is hereby agreed that the implementation of
such right of way shall be for the VENDEE's sole responsibility and
liability, and likewise any development of such right of way shall
be for the full account of the VENDEE. In the future, if needed, the
VENDOR is therefore free to make use of the aforesaid right of
way, and/or Mangyan Road access, but in such a case the
VENDOR shall contribute a pro-rata share in the maintenance of
the area.
Subsequently, Solid Homes, Inc., developed a subdivision now
known as Loyola Grand Villas and together they now claim to have
an easement of right-of-way along Mangyan Road through which
they could have access to Katipunan Avenue.
LA VISTA President Manuel J. Gonzales however informed
Solid Homes, Inc., that LA VISTA could not recognize the
right-of-way over Mangyan Road because, first, Philippine
Building Corporation and its assignee ATENEO never
complied with their obligation of providing the Tuasons with
a right-of-way on their 7.5-meter portion of the road and,
second, since the property was purchased for commercial
purposes, Solid Homes, Inc., was no longer entitled to the
right-of-way as Mangyan Road was established exclusively
for ATENEO in whose favor the right-of-way was originally
constituted. LA VISTA, after instructing its security guards to
prohibit agents and assignees of Solid Homes, Inc., from
traversing Mangyan Road, then constructed one-meter high
cylindrical concrete posts chained together at the middle of and
along the entire length of Mangyan Road thus preventing the
residents of LOYOLA from passing through.
Solid Homes, Inc., complained to LA VISTA but the concrete posts
were not removed. To gain access to LOYOLA through Mangyan
Road an opening through the adobe wall of ATENEO was made
and some six (6) cylindrical concrete posts of LA VISTA were
destroyed. LA VISTA then stationed security guards in the area to
prevent entry to LOYOLA through Mangyan Road.
On 17 December 1976, to avert violence, Solid Homes, Inc.,
instituted the instant case, docketed as Civil Case No. Q-22450,
before the then Court of First Instance of Rizal and prayed that LA
VISTA be enjoined from preventing and obstructing the use and
passage of LOYOLA residents through Mangyan Road. LA VISTA
in turn filed a third-party complaint against ATENEO. On 14
September 1983 the trial court issued a preliminary injunction in
favor of Solid Homes, Inc. (affirming an earlier order of 22
November 1977), directing LA VISTA to desist from blocking and
preventing the use of Mangyan Road. The injunction order of 14
September 1983 was however nullified and set aside on 31 May
1985 by the then Intermediate Appellate Court 1 in AC-G.R. SP
No. 02534. Thus in a petition for review on certiorari, docketed as
G.R. No. 71150, Solid Homes, Inc., assailed the nullification and
setting aside of the preliminary injunction issued by the trial court.
Meanwhile, on 20 November 1987 the Regional Trial Court of
Quezon City rendered a decision on the merits 2 in Civil Case No.
Q-22450 affirming and recognizing the easement of right-of-way
along Mangyan Road in favor of Solid Homes, Inc., and ordering
LA VISTA to pay damages thus
ACCORDINGLY, judgment is hereby rendered declaring that an
easement of a right-of-way exists in favor of the plaintiff over
Mangyan Road, and, consequently, the injunction prayed for by
the plaintiff is granted, enjoining thereby the defendant, its
successors-in-interest, its/their agents and all persons acting for
and on its/their behalf, from closing, obstructing, preventing or
otherwise refusing to the plaintiff, its successors-in-interest,
its/their agents and all persons acting for and on its/their behalf,
and to the public in general, the unobstructed ingress and egress
on Mangyan Road, which is the boundary road between the La
Vista Subdivision on one hand, and the Ateneo de Manila
University, Quezon City, and the Loyola Grand Villas Subdivision,
Marikina, Metro Manila, on the other; and, in addition the
defendant is ordered to pay the plaintiff reasonable attorney's fees
in the amount of P30,000.00. The defendant-third-party plaintiff is
also ordered to pay the third-party defendant reasonable
attorney's fees for another amount of P15,000.00. The counter-
claim of the defendant against the plaintiff is dismissed for lack of
merit. With costs against the defendant.
Quite expectedly, LA VISTA appealed to the Court of Appeals,
docketed as CA-G.R. CV No. 19929. On 20 April 1988 this Court,
taking into consideration the 20 November 1987 Decision of the
trial court, dismissed the petition docketed as G.R. No. 71150
wherein Solid Homes, Inc., sought reversal of the 31 May 1985
Decision in AC-G.R. SP No. 02534 which nullified and set aside
the 14 September 1983 injunction order of the trial court. There we
said
Considering that preliminary injunction is a provisional remedy
which may be granted at any time after the commencement of the
action and before judgment when it is established that the plaintiff
is entitled to the relief demanded and only when his complaint
shows facts entitling such reliefs (Section 3(a), Rule 58) and it
appearing that the trial court had already granted the issuance of
a final injunction in favor of petitioner in its decision rendered after
trial on the merits (Sections 7 & 10, Rule 58, Rules of Court), the
Court resolved to Dismiss the instant petition having been
rendered moot and academic. An injunction issued by the trial
court after it has already made a clear pronouncement as to the
plaintiff's right thereto, that is, after the same issue has been
decided on the merits, the trial court having appreciated the
evidence presented, is proper, notwithstanding the fact that the
decision rendered is not yet final (II Moran, pp. 81-82, 1980 ed.)
Being an ancillary remedy, the proceedings for preliminary
injunction cannot stand separately or proceed independently of the
decision rendered on the merit of the main case for injunction. The
merit of the main case having been already determined in favor of
the applicant, the preliminary determination of its non-existence
ceases to have any force and effect. 3
On the other hand, in CA-G.R. CV No. 19929, several incidents
were presented for resolution: two (2) motions filed by Solid
Homes, Inc., to cite certain officers of LA VISTA for contempt for
alleged violation of the injunction ordaining free access to and
egress from Mangyan Road, to which LA VISTA responded with
its own motion to cite Solid Homes, Inc., for contempt; a motion for
leave to intervene and to re-open Mangyan Road filed by residents
of LOYOLA; and, a petition praying for the issuance of a
restraining order to enjoin the closing of Mangyan Road. On 21
September 1989 the incidents were resolved by the Court of
Appeals 4 thus
1. Defendant-appellant La Vista Association, Inc., its Board of
Directors and other officials and all persons acting under their
orders and in their behalf are ordered to allow all residents of
Phase I and II of Loyola Grand Villas unobstructed right-of-way or
passage through the Mangyan Road which is the boundary
between the La Vista Subdivision and the Loyola Grand Villas
Subdivision;
2. The motion to intervene as plaintiffs filed by the residents of
Loyola Grand Villas Subdivision is GRANTED; and
3. The motions for contempt filed by both plaintiff-appellee and
defendant-appellant are DENIED.
This resolution is immediately executory. 5
On 15 December 1989 both motions for reconsideration of Solid
Homes, Inc., and LA VISTA were denied. In separate petitions,
both elevated the 21 September 1989 and 15 December 1989
Resolutions of the Court of Appeals to this Court. The petition of
Solid Homes, Inc., docketed as G.R. No. 91433, prayed for an
order directing the appellate court to take cognizance of and hear
the motions for contempt, while that of LA VISTA in G.R. No.
91502 sought the issuance of a preliminary injunction to order
Solid Homes, Inc., ATENEO and LOYOLA residents to desist from
intruding into Mangyan Road.
On 22 May 1990, pending resolution of G.R. Nos. 91433 and
91502, the Second Division of the Court of Appeals 6 in CA-G.R.
CV No. 19929 affirmed in toto the Decision of the trial court in Civil
Case No. Q-22450. On 6 September 1990 the motions for
reconsideration and/or re-raffle and to set the case for oral
argument were denied. In view of the affirmance of the Decision
by the Court of Appeals in CA-G.R. CV No. 19929 this Court
dismissed the petition in G.R. No. 91502 for being moot as its main
concern was merely the validity of a provisional or preliminary
injunction earlier issued. We also denied the petition in G.R. No.
91433 in the absence of a discernible grave abuse of discretion in
the ruling of the appellate court that it could not entertain the
motions to cite the parties for contempt "because a charge of
contempt committed against a superior court may be filed only
before the court against whom the contempt has been committed"
(Sec. 4, Rule 71, Rules of Court). 7
Consequently we are left with the instant case where petitioner LA
VISTA assails the Decision of respondent Court of Appeals
affirming in toto the Decision of the trial court which rendered a
judgment on the merits and recognized an easement of right-of-
way along Mangyan Road, permanently enjoining LA VISTA from
closing to Solid Homes, Inc., and its successors-in-interest the
ingress and egress on Mangyan Road.
In its first assigned error, petitioner LA VISTA argues that
respondent appellate court erred in disregarding the decisions in
(a) La Vista Association, Inc., v. Hon.Ortiz, 8 affirmed by this Court
in Tecson v. Court of Appeals; 9 (b) La Vista Association, Inc.,
v. Hon. Leviste, 10 affirmed by this Court in Rivera
v. Hon.Intermediate Appellate Court; 11 and, (c) La Vista
v. Hon. Mendoza, 12 and in holding that an easement of right-of-
way over Mangyan Road exists. 13
We do not agree with petitioner. The reliance of petitioner on the
cited cases is out of place as they involve the issuance of a
preliminary injunction pending resolution of a case on the merits.
In the instant case, however, the subject of inquiry is not merely
the issuance of a preliminary injunction but the final injunctive writ
which was issued after trial on the merits. A writ of preliminary
injunction is generally based solely on initial and incomplete
evidence. The opinion and findings of fact of a court when issuing
a writ of preliminary injunction are interlocutory in nature and made
even before the trial on the merits is terminated. Consequently
there may be vital facts subsequently presented during the trial
which were not obtaining when the writ of preliminary injunction
was issued. Hence, to equate the basis for the issuance of a
preliminary injunction with that for the issuance of a final injunctive
writ is erroneous. And it does not necessarily mean that when a
writ of preliminary injunction issues a final injunction follows.
Accordingly, respondent Court of Appeals in its assailed Decision
rightly held that
We are unswayed by appellant's theory that the cases cited by
them in their Brief (pages 17 and 32) and in their motion for early
resolution (page 11, Rollo) to buttress the first assigned error, are
final judgments on the merits of, and therefore res judicata to the
instant query. It is quite strange that appellant was extremely
cautious in not mentioning this doctrine but the vague disquisition
nevertheless points to this same tenet, which upon closer
examination negates the very proposition. Generally, it is
axiomatic that res judicata will attach in favor of La Vista if and
when the case under review was disposed of on the merits and
with finality (Manila Electric Co. vs. Artiaga, 50 Phil. 144;
147; S . Diego vs. Carmona, 70 Phil. 281; 283; cited in Comments
on the Rules of Court, by Moran, Volume II, 1970 edition, page
365; Roman Catholic Archbishop vs. Director of Lands, 35 Phil.
339; 350-351, cited in Remedial Law Compendium, by Regalado,
Volume 1, 1986 Fourth Revised Edition, page 40). Appellants
suffer from the mistaken notion that the "merits" of the certiorari
petitions impugning the preliminary injunction in the cases cited by
it are tantamount to the merits of the main case, subject of the
instant appeal. Quite the contrary, the so-called "final judgments''
adverted to dealt only with the propriety of the issuance or non-
issuance of the writ of preliminary injunction, unlike the present
recourse which is directed against a final injunctive writ under
Section 10, Rule 58. Thus the invocation of the disputed matter
herein is misplaced. 14
We thus repeat what we said in Solid Homes, Inc., v. La
Vista 15 which respondent Court of Appeals quoted in its assailed
Decision 16
Being an ancillary remedy, the proceedings for preliminary
injunction cannot stand separately or proceed independently of the
decision rendered on the merits of the main case for injunction.
The merits of the main case having been already determined in
favor of the applicant, the preliminary determination of its non-
existence ceases to have any force and effect.
Petitioner LA VISTA in its lengthy Memorandum also quotes our
ruling in Ramos, Sr., v. Gatchalian Realty, Inc., 17 no less than
five (5) times 18
To allow the petitioner access to Sucat Road through Gatchalian
Avenue inspite of a road right-of-way provided by the petitioner's
subdivision for its buyers simply because Gatchalian Avenue
allows petitioner a much greater ease in going to and coming from
the main thoroughfare is to completely ignore what jurisprudence
has consistently maintained through the years regarding an
easement of a right-of-way, that 'mere convenience for the
dominant estate is not enough to serve as its basis. To justify the
imposition of this servitude, there must be a real, not a fictitious or
artificial, necessity for it' (See Tolentino, Civil Code of the
Philippines, Vol. II, 2nd ed., 1972, p. 371)
Again this is misplaced. Ramos, Sr., v. Gatchalian Realty,
Inc., 19 concerns a legal or compulsory easement of right-of-way
Since there is no agreement between the contending parties in this
case granting a right-of-way by one in favor of the other, the
establishment of a voluntary easement between the petitioner and
the respondent company and/or the other private respondents is
ruled out. What is left to examine is whether or not petitioner is
entitled to a legal or compulsory easement of a right-of-way
which should be distinguished from a voluntary easement. A legal
or compulsory easement is that which is constituted by law for
public use or for private interest. By express provisions of Arts. 649
and 650 of the New Civil Code, the owner of an estate may claim
a legal or compulsory right-of-way only after he has established
the existence of four (4) requisites, namely, (a) the estate is
surrounded by other immovables and is without adequate outlet to
a public highway; (b) after payment of the proper indemnity; (c) the
isolation was not due to the proprietor's own acts; and, (d) the
right-of-way claimed is at a point least prejudicial to the servient
estate, and insofar as consistent with this rule, where the distance
from the dominant estate to a public highway may be the
shortest. 20 A voluntary easement on the other hand is constituted
simply by will or agreement of the parties.
From the facts of the instant case it is very apparent that the parties
and their respective predecessors-in-interest intended to establish
an easement of right-of-way over Mangyan Road for their mutual
benefit, both as dominant and servient estates. This is quite
evident when: (a) the Tuasons and the Philippine Building
Corporation in 1949 stipulated in par. 3 of their Deed of Sale with
Mortgage that the "boundary line between the property herein sold
and the adjoining property of the VENDORS shall be a road fifteen
(15) meters wide, one-half of which shall be taken from the
property herein sold to the VENDEE and the other half from the
portion adjoining belonging to the vendors;" (b) the Tuasons in
1951 expressly agreed and consented to the assignment of the
land to, and the assumption of all the rights and obligations by
ATENEO, including the obligation to contribute seven and one-half
meters of the property sold to form part of the 15-meter wide
roadway; (c) the Tuasons in 1958 filed a complaint against
MARYKNOLL and ATENEO for breach of contract and the
enforcement of the reciprocal easement on Mangyan Road, and
demanded that MARYKNOLL set back its wall to restore Mangyan
Road to its original width of 15 meters, after MARYKNOLL
constructed a wall in the middle of the 15-meter wide roadway; (d)
LA VISTA President Manuel J. Gonzales admitted and clarified in
1976, in a letter to ATENEO President Fr. Jose A. Cruz, S.J., that
"Mangyan Road is a road fifteen meters wide, one-half of which is
taken from your property and the other half from the La Vista
Subdivision. So that the easement of a right-of-way on your 7
m. portion was created in our favor and likewise an easement
of right-of-way was created on our 7 m. portion of the road in
your favor;" (e) LA VISTA, in its offer to buy the hillside portion of
the ATENEO property in 1976, acknowledged the existence of the
contractual right-of-way as it manifested that the mutual right-of-
way between the Ateneo de Manila University and La Vista
Homeowners' Association would be extinguished if it bought the
adjacent ATENEO property and would thus become the owner of
both the dominant and servient estates; and, (f) LA VISTA
President Luis G. Quimson, in a letter addressed to the Chief
Justice, received by this Court on 26 March 1997, acknowledged
that "one-half of the whole length of (Mangyan Road) belongs to
La Vista Assn., Inc. The other half is owned by Miriam (Maryknoll)
and the Ateneo in equal portions;"
These certainly are indubitable proofs that the parties
concerned had indeed constituted a voluntary easement of
right-of-way over Mangyan Road and, like any other contract,
the same could be extinguished only by mutual agreement or
by renunciation of the owner of the dominant estate. Thus
respondent Court of Appeals did not commit a reversible error
when it ruled that
Concerning the pivotal question posed herein on the existence of
an easement, we are of the belief, and thus hereby hold that a
right-of-way was properly appreciated along the entire route of
Mangyan Road. Incidentally, the pretense that the court a
quo erred in holding that Mangyan Road is the boundary road
between La Vista and Ateneo (page 31, Appellant's Brief) does not
raise any critical eyebrow since the same is wholly irrelevant to the
existence of a servitude thereon from their express admission to
the contrary (paragraph 1, Answer).
One's attention should rather be focused on the contractual
stipulations in the deed of sale between the Tuason Family and
the Philippine Building Corporation (paragraph 3, thereof) which
were incorporated in the deed of assignment with assumption of
mortgage by the Philippine Building Corporation in favor of Ateneo
(first paragraph, page 4 of the deed) as well as in the deed of sale
dated October 24, 1976 when the property was ultimately
transferred by Ateneo to plaintiff-appellee. Like any other
contractual stipulation, the same cannot be extinguished except
by voluntary rescission of the contract establishing the servitude
or renunciation by the owner of the dominant lots (Chuanico
vs. Ibaez, 7 CA Reports, 2nd Series, 1965 edition, pages 582;
589, cited in Civil Law Annotated, by Padilla, Volume II, 1972
Edition, pages 602-603), more so when the easement was
implicitly recognized by the letters of the La Vista President to
Ateneo dated February 11 and April 28, 1976 (page 22, Decision;
19 Ruling Case Law 745).
The free ingress and egress along Mangyan Road created by the
voluntary agreement between Ateneo and Solid Homes, Inc., is
thus legally demandable (Articles 619 and 625, New Civil Code)
with the corresponding duty on the servient estate not to obstruct
the same so much so that
When the owner of the servient tenement performs acts or
constructs works impairing the use of the servitude, the owner of
the dominant tenement may ask for the destruction of such works
and the restoration of the things to their condition before the
impairment was committed, with indemnity for damages suffered
(3 Sanchez Roman 609). An injunction may also be obtained in
order to restrain the owner of the servient tenement from
obstructing or impairing in any manner the lawful use of the
servitude (Resolme v. Lazo, 27 Phil. 416; 417; 418)."
(Commentaries and Jurisprudence on the Civil Code of the
Philippines, by Tolentino, Volume 2, 1963 edition, page 320). 21
Resultantly, when the court says that an easement exists, it is not
creating one. For, even an injunction cannot be used to create one
as there is no such thing as a judicial easement. As in the instant
case, the court merely declares the existence of an easement
created by the parties. Respondent court could not have said it any
better
It must be emphasized, however, that We are not constituting an
easement along Mangyan Road, but merely declaring the
existence of one created by the manifest will of the parties herein
in recognition of autonomy of contracts (Articles 1306 and 619,
New Civil Code; Tolentino, supra, page 308; Civil Code of the
Philippines, by Paras, Volume II, 1984 edition, page 549). 22
The argument of petitioner LA VISTA that there are other routes to
LOYOLA from Mangyan Road is likewise meritless, to say the
least. The opening of an adequate outlet to a highway can
extinguish only legal or compulsory easements, not voluntary
easements like in the case at bar. The fact that an easement by
grant may have also qualified as an easement of necessity does
not detract from its permanency as a property right, which survives
the termination of the necessity. 23
That there is no contract between LA VISTA and Solid Homes,
Inc., and thus the court could not have declared the existence of
an easement created by the manifest will of the parties, is devoid
of merit. The predecessors-in-interest of both LA VISTA and Solid
Homes, Inc., i.e., the Tuasons and the Philippine Building
Corporation, respectively, clearly established a contractual
easement of right-of-way over Mangyan Road. When the
Philippine Building Corporation transferred its rights and
obligations to ATENEO the Tuasons expressly consented and
agreed thereto. Meanwhile, the Tuasons themselves developed
their property into what is now known as LA VISTA. On the other
hand, ATENEO sold the hillside portions of its property to Solid
Homes, Inc., including the right over the easement of right-of-way.
In sum, when the easement in this case was established by
contract, the parties unequivocally made provisions for its
observance by all who in the future might succeed them in
dominion.
The contractual easement of right-of-way having been confirmed,
we find no reason to delve on the issue concerning P.D. No.
957 which supposedly grants free access to any subdivision street
to government or public offices within the subdivision. In the instant
case, the rights under the law have already been superseded by
the voluntary easement of right-of-way.
Finally, petitioner questions the intervention of some LOYOLA
residents at a time when the case was already on appeal, and
submits that intervention is no longer permissible after trial has
been concluded. Suffice it to say that in Director of Lands v. Court
of Appeals, 24 we said
It is quite clear and patent that the motions for intervention filed by
the movants at this stage of the proceedings where trial has
already been concluded, a judgment thereon had been
promulgated in favor of private respondent and on appeal by the
losing party . . . the same was affirmed by the Court of Appeals
and the instant petition for certiorari to review said judgment is
already submitted for decision by the Supreme Court, are
obviously and manifestly late, beyond the period prescribed under
. . . Section 2, Rule 12 of the Rules of Court (now Sec. 2, Rule 19,
1997 Rules of Civil Procedure).
But Rule 12 of the Rules of Court, like all other Rules therein
promulgated, is simply a rule of procedure, the whole purpose and
object of which is to make the powers of the Court fully and
completely available for justice. The purpose of procedure is not
to thwart justice. Its proper aim is to facilitate the application of
justice to the rival claims of contending parties. It was created not
to hinder and delay but to facilitate and promote the administration
of justice. It does not constitute the thing itself which courts are
always striving to secure to litigants. It is designed as the means
best adopted to obtain that thing. In other words, it is a means to
an end.
The denial of the motions for intervention arising from the strict
application of the Rule due to alleged lack of notice to, or the
alleged failure of, movants to act seasonably will lead the Court to
commit an act of injustice to the movants, to their successors-in-
interest and to all purchasers for value and in good faith and
thereby open the door to fraud, falsehood and misrepresentation,
should intervenors' claims be proven to be true.
After all, the intervention does not appear to have been filed to
delay the proceedings. On the contrary, it seems to have
expedited the resolution of the case as the incidents brought forth
by the intervention, which could have been raised in another case,
were resolved together with the issues herein resulting in a more
thorough disposal of this case.
WHEREFORE, the Decision of respondent Court of Appeals dated
22 May 1990 and its Resolution dated 6 September 1990, which
affirmed the Decision of the RTC-Br. 89, Quezon City, dated 20
November 1987, are AFFIRMED.
SO ORDERED.
||| (La Vista Association, Inc. v. Court of Appeals, G.R. No. 95252,
[September 5, 1997], 344 PHIL 30-51)
Alcantara v. Reta, Jr. 372 SCRA 364
FIRST DIVISION
[G.R. No. 136996. December 14, 2001.]
EDILBERTO ALCANTARA, FLORENCIO VILLARMIA,
POLICARPIO OBREGON, + RICARDO ROBLE, ESCOLASTICA
ONDONG, ESTEBAN RALLOS, HENRY SESBINO, SERGIO
SESBINO, MANUEL CENTENO, + RENATO CRUZ,
MARCELINO CENEZA, BUENAVENTURA ONDONG, and
BENJAMIN HALASAN, petitioners, vs. CORNELIO B. RETA,
JR., respondent.
Pedro F. Alcantara, Jr. for petitioners.
Garcia Iigo De Guzman Sarsaba Heje & Associates for
private respondent.
SYNOPSIS
Petitioners filed a complaint for the exercise of their right of first
refusal to purchase subject property in accordance with Section
3(g) of P.D. No. 1517, claiming they are the legitimate tenants or
lessees thereof. Both the trial court and the CA dismissed the
complaint.
On appeal, the Supreme Court held: that P.D. No. 1517, otherwise
known as the "Urban Land Reform Act," pertains to areas
proclaimed as Urban Land Reform Zones; that subject land is
beyond the ambit of P.D. No. 1517 since it has not been
proclaimed as an Urban Land Reform Zone; that the applicable
law is BP Blg. 25 for failure of petitioners to pay rentals; and that
petitioners are not the legitimate tenants contemplated by PD No.
1517, who can exercise the right of first refusal. aECSHI
SYLLABUS
1. CIVIL LAW; LEASE; THE URBAN LAND REFORM ACT (P.D.
NO. 1517); PERTAINS TO AREAS PROCLAIMED AS URBAN
LAND REFORM ZONES; CASE AT BAR. Presidential Decree
No. 1517, otherwise known as "The Urban Land Reform Act,"
pertains to areas proclaimed as Urban Land Reform Zones.
Consequently, petitioners cannot claim any right under the said
law since the land involved is not an ULRZ.
2. ID.; ID.; ID.; ID.; RIGHT OF FIRST REFUSAL MAY BE
AVAILED OF ONLY BY LEGITIMATE TENANT OF THE LAND;
CASE AT BAR. To be able to qualify and avail oneself of the
rights and privileges granted by the said decree, one must be: (1)
a legitimate tenant of the land for ten (10) years or more; (2) must
have built his home on the land by contract; and, (3) has resided
continuously for the last ten (10) years. Obviously, those who do
not fall within the said category cannot be considered "legitimate
tenants" and, therefore, not entitled to the right of first refusal to
purchase the property should the owner of the land decide to sell
the same at a reasonable price within a reasonable time.
Respondent Reta denies that he has lease agreements with
petitioners Edilberto Alcantara and Ricardo Roble. Edilberto
Alcantara, on the other hand, failed to present proof of a lease
agreement other than his testimony in court that he bought the
house that he is occupying from his father-in-law. Respondent
Reta allowed petitioner Ricardo Roble to use sixty-two (62)
coconut trees for P186 from where he gathered tuba. This
arrangement would show that it is a usufruct and not a lease.
Usufruct gives a right to enjoy the property of another with the
obligation of preserving its form and substance, unless the title
constituting it or the law otherwise provides. Petitioner Roble was
allowed to construct his house on the land because it would
facilitate his gathering of tuba. This would be in the nature of a
personal easement under Article 614 of the Civil Code. Whether
the amicable settlement is valid or not, the conclusion would still
be the same since the agreement was one of usufruct and not of
lease. Thus, petitioner Roble is not a legitimate tenant as defined
by Presidential Decree No. 1517. As to the other petitioners,
respondent Reta admitted that he had verbal agreements with
them. This notwithstanding, they are still not the legitimate tenants
contemplated by Presidential Decree No. 1517, who can exercise
the right of first refusal.
DECISION
PARDO, J p:
The Case
In this petition for review, 1 petitioners seek to review the
decision 2 of the Court of Appeals affirming the decision 3 of the
Regional Trial Court, Davao City, Branch 14, dismissing
petitioners' complaint for the exercise of the right of first refusal
under Presidential Decree No. 1517, injunction with preliminary
injunction, attorney's fees and nullity of amicable settlement.
FACTS:
Edilberto Alcantara, Florencio Villarmia, Policarpio Obregon,
Ricardo Roble, Escolastica Ondong, Esteban Rallos, Henry
Sesbino, Sergio Sesbino, Manuel Centeno, Renato Cruz, Marcelo
Ceneza, Buenaventura Ondong and Benjamin Halasan, filed with
the Regional Trial Court, Davao City, Branch 14, a
complaint 4against Cornelio B. Reta, Jr. for the exercise of the
right of first refusal under Presidential Decree No. 1517, injunction
with preliminary injunction, attorney's fees and nullity of amicable
settlement.
The plaintiffs claimed that they were tenants or lessees of the land
located in Barangay Sasa, Davao City, covered by Transfer
Certificate of Title No. T-72594, owned by Reta; that the land has
been converted by Reta into a commercial center; and that Reta
is threatening to eject them from the land. They assert that they
have the right of first refusal to purchase the land in accordance
with Section 3(g) of Presidential Decree No. 1517 since they are
legitimate tenants or lessees thereof.
They also claimed that the amicable settlement executed between
Reta and Ricardo Roble was void ab initio for being violative
of Presidential Decree No. 1517.
On the other hand, Reta claimed that the land is beyond the ambit
of Presidential Decree No. 1517 since it has not been proclaimed
as an Urban Land Reform Zone; that the applicable law is Batas
Pambansa Blg. 25 for failure of the plaintiffs to pay the rentals for
the use of the land; and that the amicable settlement between him
and Ricardo Roble was translated to the latter and fully explained
in his own dialect.
On March 8, 1994, the trial court rendered a decision dismissing
the complaint and ordering the plaintiffs to pay Reta certain sums
representing rentals that had remained unpaid. 5
On April 6, 1994, plaintiffs appealed the decision to the Court of
Appeals. 6
On December 9, 1998, the Court of Appeals promulgated a
decision 7 affirming in toto the decision of the trial court.
Hence, this appeal. 8
The Issue
The issue is whether petitioners have the right of first refusal
under Presidential Decree No. 1517.
The Court's Ruling
The petition is without merit.
The area involved has not been proclaimed an Urban Land Reform
Zone (ULRZ). In fact, petitioners filed a petition with the National
Housing Authority requesting that the land they were occupying be
declared as an ULRZ. On May 27, 1986, the request was referred
to Mr. Jose L. Atienza, General Manager, National Housing
Authority, for appropriate action. 9 The request was further
referred to acting mayor Zafiro Respicio, Davao City, as per 2nd
Indorsement dated July 1, 1986. 10 Clearly, the request to have
the land proclaimed as an ULRZ would not be necessary if the
property was an ULRZ.
Presidential Decree No. 1517, otherwise known as "The Urban
Land Reform Act," pertains to areas proclaimed as Urban Land
Reform Zones. 11 Consequently, petitioners cannot claim any
right under the said law since the land involved is not an ULRZ.
To be able to qualify and avail oneself of the rights and privileges
granted by the said decree, one must be: (1) a legitimate tenant of
the land for ten (10) years or more; (2) must have built his home
on the land by contract; and, (3) has resided continuously for the
last ten (10) years. Obviously, those who do not fall within the said
category cannot be considered "legitimate tenants" and, therefore,
not entitled to the right of first refusal to purchase the property
should the owner of the land decide to sell the same at a
reasonable price within a reasonable time. 12
Respondent Reta denies that he has lease agreements with
petitioners Edilberto Alcantara and Ricardo Roble. 13 Edilberto
Alcantara, on the other hand, failed to present proof of a lease
agreement other than his testimony in court that he bought the
house that he is occupying from his father-in-law. 14
Respondent Reta allowed petitioner Ricardo Roble to use
sixty-two (62) coconut trees for P186 from where he
gathered tuba. This arrangement would show that it is a
usufruct and not a lease. Usufruct gives a right to enjoy the
property of another with the obligation of preserving its form and
substance, unless the title constituting it or the law otherwise
provides. 15
Petitioner Roble was allowed to construct his house on the land
because it would facilitate his gathering of tuba. This would be in
the nature of a personal easement under Article 614 of the Civil
Code. 16
Whether the amicable settlement 17 is valid or not, the conclusion
would still be the same since the agreement was one of usufruct
and not of lease. Thus, petitioner Roble is not a legitimate tenant
as defined by Presidential Decree No. 1517.
As to the other petitioners, respondent Reta admitted that he had
verbal agreements with them. This notwithstanding, they are still
not the legitimate tenants contemplated by Presidential Decree
No. 1517, who can exercise the right of first refusal.
A contract has been defined as "a meeting of the minds between
two persons whereby one binds himself, with respect to the other,
to give something or to render some service.'' 18
Clearly, from the moment respondent Reta demanded that the
petitioners vacate the premises, the verbal lease agreements,
which were on a monthly basis since rentals were paid
monthly, 19 ceased to exist as there was termination of the
lease. ACTaDH
Indeed, none of the petitioners is qualified to exercise the right of
first refusal under P.D. No. 1517.
Another factor which militates against petitioners' claim is the fact
that there is no intention on the part of respondent Reta to sell the
property. Hence, even if the petitioners had the right of first refusal,
the situation which would allow the exercise of that right, that is,
the sale or intended sale of the land, has not happened. P.D. No.
1517 applies where the owner of the property intends to sell it to a
third party. 20
The Fallo
WHEREFORE, the Court DENIES the petition. The Court
AFFIRMS the decision of the Court of Appeals 21 and the
resolution denying reconsideration thereof.
No costs.
SO ORDERED.
||| (Alcantara v. Reta, Jr., G.R. No. 136996, [December 14, 2001],
423 PHIL 623-629)
Prosperity Credit Resources, Inc. v. Court of Appeals 301 SCRA
52
SECOND DIVISION
[G.R. No. 114170. January 15, 1999.]
PROSPERITY CREDIT RESOURCES, INC., petitioner, vs.
COURT OF APPEALS and METROPOLITAN FABRICS,
INC., respondents.
Gonzales Batiller Bilog and Associates for petitioner.
Ceferino Padua Law Office for private respondent.
SYNOPSIS
On November 7, 1991, petitioner filed an injunctive suit in the
Regional Trial Court of Quezon City. Petitioner alleged that in
violation of the terms of the Memorandum of Agreement, private
respondent refused to allow petitioner to make excavations on one
side of the access road for the installation of water pipes; that it
banned entry of petitioner's truck and those of its tenants between
11:30 AM to 1:00 PM and 10:00 PM to 7:00 AM; and that it
subjected the vehicles to unnecessary searches. Petitioner sought
the issuance of a writ of preliminary injunction requiring private
respondent to allow to proceed with the MWSS installation project
over the road lot in question, to allow petitioner's and its tenant's
delivery trucks and other vehicles access to the same at any time
and without undergoing unnecessary searches, and to otherwise
recognize petitioner's right of way over said lot. After trial on the
merits, the court a quogranted petitioner's prayer of preliminary
injunction. Aggrieved by the decision, private respondent filed a
petition for certiorari and prohibition with the Court of Appeals to
annul the order of the Regional Trial Court. On November 26,
1994, the appellate court granted the petition and set aside the
questioned orders after finding that the trial court had acted with
grave abuse of discretion in issuing them. Its motion for
reconsideration having been denied, petitioner filed the petition for
review on certiorari. TaDSCA
The Supreme Court found the petition devoid of merit. The Court
ruled that the right of the complainant to justify the issuance of
preliminary mandatory injunction must be clear and unmistakable
because it requires the performance of a particular act or acts and
thus tends to do more than maintain the status quo. In this case,
the Court found that the word "passage" stated in the
memorandum does not clearly and unmistakably convey a
meaning that includes a right to install water pipes on the access
road. To achieve a meaning such as that which petitioner
proposes requires the consideration of evidence showing the
parties' intention in using the word which can only be done during
trial on the merits. Until such time, petitioner cannot claim to have
a clear and unmistakable right justifying the issuance of a writ of
preliminary mandatory injunction in this case. Thus, the trial court
should have observed caution and denied petitioner's application
for the preliminary writ. Accordingly, the decision of the Court of
Appeals dated November 26, 1993 and its resolution dated
February 28, 1994 were affirmed. THESAD
SYLLABUS
REMEDIAL LAW; CIVIL PROCEDURE; PROVISIONAL
REMEDIES; PRELIMINARY MANDATORY INJUNCTION;
JUSTIFICATION FOR THE ISSUANCE THEREOF; THE PARTY
SEEKING THE ISSUANCE OF WRIT OF PRELIMINARY
MANDATORY INJUNCTION MUST HAVE A CLEAR AND
UNMISTAKABLE RIGHT. As held in Pelejo v. Court of
Appeals (117 SCRA 665 [1982]), to justify the issuance of the writ
of preliminary mandatory injunction the following must be shown:
(1) that the complainant has a clear legal right; (2) that his right
has been violated and the invasion is material and substantial; and
(3) that there is an urgent and permanent necessity for the writ to
prevent serious damage. The right of the complainant must be
clear and unmistakable because, unlike an ordinary preliminary
injunction, the writ of preliminary mandatory injunction requires the
performance of a particular act or acts and thus tends to do more
than maintain the status quo. In the case at bar, petitioner anchors
its alleged right to the preliminary mandatory injunction on the
Memorandum of Undertaking, dated September 18, 1987, which
provides that: [T]he above-described lot, being an existing private
road, will remain open to ingress and egress for whatever kind of
passage in favor of PROSPERITY FINANCIAL RESOURCES,
INC. or its successors-in-interest. There is no question as to the
meaning of the terms "ingress" and "egress." They give petitioner
the right to use the private road as a means of entry into and exit
from its property on the northwestern side of the compound. The
question concerns the meaning of the phrase "for whatever kind
of passage." The trial court read this phrase to mean that petitioner
had the right to make excavations on the side of the access road
in order to install a network of water pipes. The word "passage"
does not, however, "clearly and unmistakably" convey a meaning
that includes a right to install water pipes on the access road. The
ordinary meaning of the word, as defined in Webster's Dictionary,
is that it is "the act or action of passing: movement or transference
from one place or point to another." Its legal meaning is not
different. It means, according to Black's Law Dictionary, the "act of
passing; transit; transition." To achieve a meaning such as that
which petitioner proposes requires the consideration of evidence
showing the parties' intention in using the word which can only be
done during trial on the merits. Until such time, petitioner cannot
claim to have a "clear and unmistakable" right justifying the
issuance of a writ of preliminary mandatory injunction in this case.
Thus, the trial court should have observed caution and denied
petitioner's application for the preliminary writ. TDAHCS
DECISION
MENDOZA, J p:
For review in this case is a decision 1 of the Sixth Division of the
Court of Appeals in CA G.R. 28684-SP dated November 26, 1993
setting aside a writ of preliminary mandatory injunction issued by
the Regional Trial Court of Quezon City (Branch 95).
On August 3, 1984, petitioner Prosperity Credit Resources, Inc.
gave a loan to private respondent Metropolitan Fabrics, Inc. 2 To
secure the payment of the loan, private respondent mortgaged to
petitioner seven parcels of land located at 685 Tandang Sora
Avenue, Bo. Banlat, Quezon City. 3 The lots comprise a
commercial compound with Tandang Sora Avenue as the nearest
public road.
By October 27, 1987, private respondent's loan amounted to
P10.5 million. 4 As private respondent defaulted in the payment of
the loan, petitioner foreclosed the mortgage and, in the ensuing
public bidding, became the highest bidder and purchaser of the
seven (7) lots subject of the mortgage.
Later, private respondent negotiated with petitioner for the
redemption of three lots covered by TCT Nos. 317705, 317706,
and 317707, 5 all located on the southern and middle portions of
the compound. As the reacquisition of these three lots by private
respondent would leave the remaining four lots on the
northwestern side without access to Tandang Sora Avenue,
petitioner acceded to private respondent's request on the
condition that petitioner be given a right of way on the
existing private road which forms part of the area to be
redeemed by private respondent. The parties' agreement was
embodied in a Memorandum of Undertaking, dated September
18, 1987, the full text of which reads: 6
MEMORANDUM OF UNDERTAKING
KNOW ALL MEN THESE PRESENTS:
That METROPOLITAN FABRICS, INC. is the registered owner of
that certain land covered by Transfer Certificate of Title No.
317709, more particularly described as follows:
A parcel of land (Lot 11 (Existing Road) of the consolidation-
subdn. plan (LRC) Pcs-27706, approved as a non-subdn. project,
being a portion of the consolidation of Lots 373-E, (LRC) Psd-
16383; 377-B, Fls-2163-D; 377-C-1, 2, 3, & 4 (LRC) Psd-5025;
377-C-5-A, & B, (LRC) Psd-9474; 384-A & 387-B-1, (LRC) Psd-
254813; 388-A & C, Psd-30663; 388-B-1, 2, 3, 4 & 5, Psd-54827;
389-A-1, 2 & 3, 389-B-1 (LRC) Psd-10087; and 389-B-2-C, (LRC)
Psd-18842; LRC (GLRO) Rec. No. 5975) situated in the Bo. of
Banlat, Quezon City, Metro Manila, Is. of Luzon . . . containing of
an area of FIVE THOUSAND THREE HUNDRED SIXTY SEVEN
(5,367) SQUARE METERS, more or less.
That the above-described lot, being an existing private road,
will remain open to ingress and egress for whatever kind of
passage in favor of PROSPERITY FINANCIAL RESOURCES,
INC. or its successors-in-interest, the mortgagee of Lots 1, 4, 5,
6, 7, 8 and 9 of the consolidation-subdivision plan, Pcs-27706 of
Transfer Certificates of Title Nos. 317699, 317702, 317703,
317704, 317705, 317706 & 317707, respectively, in the name of
METROPOLITAN FABRICS, INC.
DONE this Sep. 18, 1987 in the city of Manila.
On November 7, 1991, petitioner filed an injunctive suit in the
Regional Trial Court of Quezon City (Branch 95). Petitioner alleged
that, in violation of the terms of the Memorandum of Agreement,
private respondent refused to allow petitioner to make
excavations on one side of the access road for the installation
of water pipes; that it banned entry of petitioner's trucks and
those of its tenants between 11:30 A.M. to 1:00 P.M. and 10:00
P.M. to 7:00 A.M.; and that it subjected the vehicles to
unnecessary searches. Petitioner sought the issuance of a writ
of preliminary mandatory injunction requiring private respondent
"to allow [petitioner] to proceed with the MWSS installation project
over the road lot in question, to allow [petitioner's] and [its] tenants'
delivery trucks and other vehicles access to the same at any time
and without undergoing unnecessary searches, and to otherwise
recognize [petitioner's] right of way over the said lot." 7 Petitioner
prayed that, after trial, the writ be made final.
On December 21, 1991, private respondent filed an answer with
counterclaim, alleging that petitioner's right to undertake
excavations on the access road was not provided for in the
Memorandum of Undertaking. 8 As counterclaim, private
respondent alleged that it was petitioner which caused damage to
private respondent's tenants by undertaking, without its consent,
construction works on the access road which raised its level to
about a meter and caused serious flooding of the nearby buildings
whenever it rained; 9 and that, as a result, its tenants demanded
compensation for damage to their merchandise and equipment
occasioned by the flooding. Private respondent prayed for P2.1
million as counterclaim. 10
The trial court required the parties to submit position papers in
connection with petitioner's prayer for a preliminary mandatory
injunction. 11 After the parties had done so, the trial court granted,
on February 14, 1992, petitioner's prayer for a preliminary writ,
conditioned upon the filing by petitioner of a bond in the amount of
P500,000.00. The trial court said in part:
. . . [T]he court finds that to deny plaintiff's application for a
preliminary mandatory injunction writ would be to disregard its right
of way in respect of the road lot in question, a right clearly set forth
in defendant's memorandum of undertaking of September 18,
1987; indeed, no cogent reason appears to warrant treating the
terms "for whatever kind of passage" contained therein as nothing
more than a useless, meaningless redundancy . . .
ACCORDINGLY, plaintiff's subject application is hereby granted
and the Court hereby directs that upon the filing and approval of
the corresponding injunction bond in the sum of P500,000.00, . . .
let corresponding preliminary mandatory injunction writ be issued
directing defendant to allow plaintiff to proceed with its MWSS
installation project over the road lot in question, to allow plaintiff's
and its tenant's delivery trucks and other vehicles access to the
same at any time and without undergoing unnecessary searches,
and to otherwise recognize plaintiff's right of way over the said
road lot, pending the termination of this litigation and/or unless a
contrary order is issued by this Court . . . 12
On March 2, 1992, the trial court issued the writ upon filing of the
required bond by petitioner. 13 Private respondent filed a motion
for reconsideration of the orders granting injunction which the trial
court denied. 14 However, it increased the injunction bond to P2.1
million. 15
Private respondent filed a petition for certiorari and prohibition with
the Court of Appeals to annul the aforesaid orders, dated February
14, 1992 and March 2, 1992, of the trial court. On November 26,
1994, the appellate court granted the petition and set aside the
questioned orders after finding that the trial court had acted with
grave abuse of discretion in issuing them. 16 Its motion for
reconsideration having been denied on February 28, 1994,
petitioner filed the present petition for review on certiorari alleging
that: 17
1. THE COURT OF APPEALS GRAVELY ERRED WHEN IT
EXERCISED CERTIORARI POWERS TO REVERSE AN ERROR
OF JUDGMENT COMMITTED BY THE REGIONAL TRIAL
COURT, UPON FINDING THAT THE LOWER COURT
"MISUNDERSTOOD" THE RIGHT OF HEREIN PETITIONER
PROSPERITY OVER THE ROAD LOT IN QUESTION.
2. THE COURT OF APPEALS GROSSLY ERRED WHEN IT
APPLIED THE DOCTRINE ENUNCIATED IN RIVAS V. SEC (190
SCRA 295) DESPITE THE DIVERSITY IN FACTUAL SETTING
OF THE INSTANT CASE VIS-A-VIS THAT OBTAINING IN THE
CITED CASE. LLjur
3. THE COURT OF APPEALS GRAVELY ERRED WHEN IT
DECIDED THE MERITS OF THE MAIN CASE IN
A CERTIORARI PROCEEDING PRACTICALLY RENDERING
ACADEMIC THE HEARING PROPER YET TO BE CONDUCTED
BY THE REGIONAL TRIAL COURT.
4. THE COURT OF APPEALS GRAVELY ERRED WHEN IT
MADE FINDINGS OF FACTS ON THE BASIS OF THE
REPRESENTATION AND RECITAL OF FACTS MADE IN THE
MFI PETITION AND PROCEEDED TO INTERPRET THE
MEMORANDUM OF UNDERTAKING WITHOUT CONSIDERING
FACTS AND CIRCUMSTANCES SURROUNDING ITS
EXECUTION WHICH WERE YET TO BE ESTABLISHED IN A
FULL BLOWN TRIAL.
ISSUE:
The assignment of errors raises a single question: whether, in
issuing a writ of preliminary mandatory injunction ordering private
respondent to allow petitioner to undertake excavations along the
access road for the purpose of installing water pipes, the Regional
Trial Court gravely abused its discretion.
HELD:
As held in Pelejo v. Court of Appeals, 18 to justify the issuance of
the writ of preliminary mandatory injunction the following must be
shown: (1) that the complainant has a clear legal right; (2) that his
right has been violated and the invasion is material and
substantial; and (3) that there is an urgent and permanent
necessity for the writ to prevent serious damage.
The right of the complainant must be clear and unmistakable
because, unlike an ordinary preliminary injunction, the writ of
preliminary mandatory injunction requires the performance of a
particular act or acts 19 and thus tends to do more than maintain
the status quo. 20 In the case at bar, petitioner anchors its alleged
right to the preliminary mandatory injunction on the Memorandum
of Undertaking, dated September 18, 1987, which provides that:
[T]he above-described lot, being an existing private road, will
remain open to ingress and egress for whatever kind of passage
in favor of PROSPERITY FINANCIAL RESOURCES, INC. or its
successors-in-interest.
There is no question as to the meaning of the terms "ingress" and
"egress." They give petitioner the right to use the private road as
a means of entry into and exit from its property on the northwestern
side of the compound. The question concerns the meaning of the
phrase "for whatever kind of passage." The trial court read this
phrase to mean that petitioner had the right to make excavations
on the side of the access road in order to install a network of water
pipes. The word "passage" does not, however, "clearly and
unmistakably" convey a meaning that includes a right to install
water pipes on the access road. The ordinary meaning of the word,
as defined in Webster's Dictionary, is that it is "the act or action of
passing: movement or transference from one place or point to
another." 21 Its legal meaning is not different. It means, according
to Black's Law Dictionary, the "act of passing; transit;
transition." 22 To achieve a meaning such as that which petitioner
proposes requires the consideration of evidence showing the
parties' intention in using the word which can only be done during
trial on the merits. Until such time, petitioner cannot claim to have
a "clear and unmistakable" right justifying the issuance of a writ of
preliminary mandatory injunction in this case. Thus, the trial court
should have observed caution and denied petitioner's application
for the preliminary writ.
Petitioner contends that resort should be made to facts
surrounding the execution of the Memorandum of Undertaking
which, according to it, shows the intention of the parties to give
petitioner the right to install water pipes along the side of the
access road. 23 It cites Rule 130 11 24 of the 1964 Rules of
Court, which provides:
SEC. 11. Interpretation according to circumstances. For the
proper construction of an instrument, the circumstances under
which it was made, including the situation of the subject thereof
and of the parties to it, may be shown, so that the judge may be
placed in the position of those whose language he is to interpret.
That is precisely what we are saying. The recourse petitioner
proposes must await the presentation of the parties' evidence
during trial and the determination of their intention must be made
by the trial court, not by this Court. Petitioner cannot circumvent
the process by asking this Court to determine the facts
surrounding the execution of their agreement. Indeed, for us to
undertake such inquiry would be to expand the scope of the
present review and intrude into the domain of the trial court.
Petitioner will have ample opportunity to substantiate its
allegations on this point during the trial of the case. Rule 130 11,
which petitioner invokes, is actually a rule for interpretation of
documentary evidence formally offered at the trial. It does not
apply to preliminary proceedings concerning the issuance of
ancillary remedies.
Anent petitioner's contention that the writ of certiorari does not lie
because the error sought to be corrected is an error of judgment,
suffice it to say that the lower court acted with grave abuse of
discretion in issuing the writ of preliminary mandatory injunction
despite the doubt on petitioner's right to it.
WHEREFORE, the decision of the Court of Appeals, dated
November 26, 1993, and its resolution, dated February 28, 1994,
are hereby AFFIRMED. cdasia
SO ORDERED.
||| (Prosperity Credit Resources, Inc. v. Court of Appeals, G.R. No.
114170, [January 15, 1999], 361 PHIL 30-39)
Villanueva v. Velasco 346 SCRA 99
SECOND DIVISION
[G.R. No. 130845. November 27, 2000.]
BRYAN U. VILLANUEVA, petitioner, vs. HON. TIRSO D.C.
VELASCO in his capacity as Presiding Judge of the Regional
Trial Court of Quezon City, Branch 88, JULIO N. SEBASTIAN
and SHIRLEY LORILLA, respondents.
The Law Firm of Chan Robles & Associates for petitioner.
Pedro I. Rodriguez for private respondents.
SYNOPSIS
Petitioner Villanueva is the registered owner of a parcel of land
previously owned by spouses Gabriel. When Villanueva bought
the land, there was a small house on the southeastern portion,
occupying one meter of the two-meter wide easement of right of
way the Gabriel spouses granted to the Espinolas, predecessors-
in-interest of private respondent. Unknown to Villanueva, even
before he bought the land, there was already a final and executory
decision enforcing the right to easement where the small house
encroaching the same was ordered demolished by Judge
Velasco.
The easement in the case at bar is both voluntary and legal
easement. The settled rule is that the needs of the dominant estate
determine the width of the easement. Hence, petitioner ought to
demolish the small house on the easement obstructing the entry
of private respondents' cement mixer and motor vehicle. And even
if the easement was not annotated in the title of the land and the
notice of lis pendens was not recorded with the Register of Deeds,
in legal easement, the servient estate is bound to provide the
dominant estate ingress from and egress to the public highway.
Further, the decision enforcing the right of easement against the
previous owner, is conclusive and binding upon the successor-in-
interest.
SYLLABUS
1. CIVIL LAW; PROPERTY; EASEMENTS; KINDS; LEGAL
EASEMENT; ELUCIDATED. [A] legal easement is one
mandated by law, constituted for public use or for private interest,
and becomes a continuing property right. As a compulsory
easement, it is inseparable from the estate to which it belongs, as
provided for in said Article 617 of the Civil Code. The essential
requisites for an easement to be compulsory are: (1) the dominant
estate is surrounded by other immovables and has no adequate
outlet to a public highway; (2) proper indemnity has been paid; (3)
the isolation was not due to acts of the proprietor of the dominant
estate; (4) the right of way claimed is at a point least prejudicial to
the servient estate; and (5) to the extent consistent with the
foregoing rule, where the distance from the dominant estate to a
public highway may be the shortest.
2. ID.; ID.; ID.; THE NEEDS OF THE DOMINANT ESTATE
DETERMINE THE WIDTH OF THE EASEMENT. [T]he small
house occupying one meter of the two-meter wide easement
obstructs the entry of private respondents' cement mixer and
motor vehicle. One meter is insufficient for the needs of private
respondents. It is well-settled that the needs of the dominant
estate determine the width of the easement. Conformably then,
petitioner ought to demolish whatever edifice obstructs the
easement in view of the needs of private respondents' estate.
3. ID.; ID.; ID.; LEGAL EASEMENT BINDING EVEN IF NOT
ANNOTATED IN THE TITLE AND NOTICE OF LIS PENDENS OF
CASE ENFORCING THE SAME NOT RECORDED.
Petitioner's second proposition, that he is not bound by the
contract of easement because the same was not annotated in the
title and that a notice of lis pendens of the complaint to enforce the
easement was not recorded with the Register of Deeds, is
obviously unmeritorious . . . it is in the nature of legal easement
that the servient estate (of petitioner) is legally bound to provide
the dominant estate (of private respondents in this case) ingress
from and egress to the public highway.
4. REMEDIAL LAW; CIVIL PROCEDURE; EFFECT OF
JUDGMENTS; DECISION IN A CASE BINDING TO THE
PARTIES AND SUCCESSOR-IN-INTEREST AFTER CASE
COMMENCED. Petitioner's last argument that he was not a
party to Civil Case No. Q-91-8703 and that he had not been given
his day: in court, is also without merit [in view of] Rule 39, Sec. 47,
of the Revised Rules of Court. . . . [A] decision in a case is
conclusive and binding upon the parties to said case and those
who are their successor in interest by title after said case has been
commenced or filed in court. In this case, private respondents. . .
initiated; Civil Case No. Q-91-8703 on May 8,1991, against the
original owners. . . . Title in the name of petitioner was entered in
the Register of Deeds on March 24, 1995, after he bought the
property from the bank which had acquired it from the Gabriels.
Hence, the decision in Civil Case No. Q-91-8703 binds petitioner.
For, although not a party to the suit, he is a successor-in-interest
by title subsequent to the commencement of the action in court.
DECISION
QUISUMBING, J p:
This petition for certiorari assails (1) the decision 1 dated
December 27, 1996 of the Court of Appeals in CA-G.R. SP No.
39166, dismissing petitioner's petition for review under Rule 65
with prayer for the issuance of a cease and desist order and/or
temporary restraining order, and (2) the resolution 2 dated August
14, 1997 denying the subsequent motion for reconsideration.
Petitioner Bryan Villanueva is the registered owner of the parcel of
land covered by Transfer Certificate of Title No. 127862 of the
Register of Deeds of Quezon City. He bought it from Pacific
Banking Corporation, the mortgagee of said property. The bank
had acquired it from the spouses Maximo and Justina Gabriel at a
public auction on March 19, 1983. When petitioner bought the
parcel of land there was a small house on its southeastern portion.
It occupied one meter of the two-meter wide easement of right
of way the Gabriel spouses granted to the Espinolas,
predecessors-in-interest of private respondents, in a
Contract of Easement of Right of Way. The pertinent portion of
the contract dated November 28, 1979, states:
. . . in order to have an access to and from their aforementioned
land where their houses are constructed and to have an outlet to
Tandang Sora Ave. which is the nearest public road and the least
burdensome to the servient estate and to third persons, it would
be necessary for them to pass through spouses MAXIMO
GABRIEL and JUSTINA CAPUNO's land and for this purpose, a
path or passageway of not less than two (2) meters wide of said
spouses' property is necessary for the use of ROMEO,
RODOLFO, NENITA and AURORA ESPINOLA and for all their
needs in entering their property.
xxx xxx xxx
WHEREFORE, in view of the fact that the property of the
ESPINOLA had been bought by them from MAXIMO CAPUNO,
father of MAXIMO GABRIEL, spouses MAXIMO GABRIEL and
JUSTINA CAPUNO hereby agree and permit RODOLFO,
ROMEO, NENITA and AURORA ESPINOLA and their families to
have a permanent easement of right of way over the
aforementioned property of said spouses limited to not more than
two meters wide, throughout the whole length of the southeast side
of said property and as specifically indicated in the attached plan
which is made an integral part of this Contract as Annex "A";
This Agreement shall be binding between the parties and upon
their heirs, successors, assigns, without prejudice in cases of sale
of subject property that will warrant the circumstances. 3
Unknown to petitioner, even before he bought the land, the
Gabriels had constructed the aforementioned small house that
encroached upon the two-meter easement. Petitioner was also
unaware that private respondents, Julio Sebastian and Shirley
Lorilla, had filed on May 8, 1991, Civil Case No. Q-91-8703, for
easement, damages and with prayer for a writ of preliminary
injunction and/or restraining order against the spouses
Gabriel. 4 As successors-in-interest, Sebastian and Lorilla wanted
to enforce the contract of easement.
On May 15, 1991, the trial court issued a temporary restraining
order. On August 13, 1991, it issued a writ of preliminary
mandatory injunction ordering the Gabriels to provide the right of
way and to demolish the small house encroaching on the
easement. On August 15, 1991, the Gabriels filed a motion for
reconsideration which was also denied. Thus, they filed a petition
for certiorari before the Court of Appeals.
On March 26, 1992, the Eighth Division of the Court of Appeals
dismissed the petition and upheld the RTC's issuances. The
decision became final and executory on July 31, 1992. 5
On January 5, 1995, Judge Tirso Velasco of the RTC in Quezon
City, Branch 88, issued an Alias Writ of Demolition. On June 20,
1995, the sheriff tried to demolish the small house pursuant to the
writ. Petitioner filed a Third Party Claim with Prayer to
Quash Alias Writ of Demolition. He maintains that the writ of
demolition could not apply to his property since he was not a party
to the civil case. His Third Party Claim with prayer to quash the
writ of demolition was denied for lack of merit on August 16,
1995. 6 The motion for reconsideration as well as the
Supplemental Motion for Reconsideration dated September 12,
1995 were denied on October 19, 1995. 7
Petitioner, thereafter, filed a petition for certiorari before the Court
of Appeals, docketed as CA-G.R. SP No. 39166, asserting that the
existence of the easement of right of way was not annotated in his
title and that he was not a party to Civil Case No. Q-91-8703,
hence the contract of easement executed by the Gabriels in favor
of the Espinolas could not be enforced against him. The Court of
Appeals dismissed the petition for lack of merit and denied the
reconsideration, disposing thus:
WHEREFORE, the instant petition is hereby dismissed by this
court for lack of merit.
No costs considering the failure of private respondents to file their
comment, despite notice. 8
Hence, this instant petition.
Petitioner now avers that the appellate court erred in declaring,
(1) THAT FOLLOWING THE ESSENCE OF INHERENCE AND
INTRANSMISSIBILITY OF AN EASEMENT, A RIGHT OF WAY
CAN EXIST EVEN IF THEY ARE NOT EXPRESSLY STATED OR
ANNOTATED ON THE TORRENS TITLE;
(2) THAT PETITIONER, AS PROSPECTIVE BUYER, SHOULD
HAVE EXERCISED ORDINARY PRUDENCE BY TAKING THE
INITIATIVE TO DETERMINE THAT AN EASEMENT HAS BEEN
CONSTITUTED ON THE PROPERTY HE INTENDS TO BUY;
AND,
(3) THAT IN AS MUCH AS THE HEREIN PETITIONER IS NOT A
PARTY TO CIVIL CASE NO. Q-91-8703, HE CANNOT BE
BOUND BY ANY JUDGMENT OR ORDER RENDERED
THEREIN. 9
Primarily, the issue is whether the easement on the property binds
petitioner.
Petitioner argues it could not be enforced against him. First, he
says that a right of way cannot exist when it is not expressly stated
or annotated on the Torrens title. According to him, even if an
easement is inherent and inseparable from the estate to which it
actively belongs as provided in Art. 617 of the Civil Code, 10 the
same is extinguished when the servient estate is registered and
the easement was not annotated in said title conformably
with Section 39 of the Land Registration Law. Second, petitioner
points out that the trial court erred when it faulted him for relying
solely on the clean title of the property he bought, as it is well-
settled that a person dealing with registered land is not required to
go beyond what is recorded in the title. He adds that it is private
respondents who should have made sure their right of way was
safeguarded by having the same annotated on the title with the
Register of Deeds. He adds that Section 76 of P.D. No.
1529 11 also requires that when a case is commenced involving
any right to registered land under the Land Registration Law (now
the Property Registration Decree), any decision on it will only be
effectual between or among the parties thereto, unless a notice
of lis pendens of such action is filed and registered in the registry
office where the land is recorded. There was no such annotation
in the title of the disputed land, according to
petitioner. Lastly, since he was not a party to Civil Case No. Q-91-
8703, petitioner argues that he cannot be bound by the writ of
demolition and be forcibly divested of a portion of his land without
having his day in court.
Private respondents Sebastian and Lorilla, for their part, adopted
the disquisition of the appellate court as their Comment and asked
for the dismissal of the petition and P100,000.00 in damages. In
its decision the appellate court, citing the decision of the lower
court, stressed that unlike other types of encumbrance of real
property, a servitude like a right of way can exist even if they are
not expressly stated or annotated as an encumbrance in
a Torrens title because servitudes are inseparable from the
estates to which they actively or passively belong. Moreover,
Villanueva was bound by the contract of easement, not only as a
voluntary easement but as a legal easement. A legal easement is
mandated by law, and continues to exists unless its removal is
provided for in a title of conveyance or the sign of the easement is
removed before the execution of the conveyance conformably
with Article 649 12 in accordance with Article 617 13 of the Civil
Code.
At the outset, we note that the subject easement (right of way)
originally was voluntarily constituted by agreement between the
Gabriels and the Espinolas. But as correctly observed by the
Court of Appeals, the easement in the instant petition is both
(1) an easement by grant or a voluntary easement, and (2) an
easement by necessity or a legal easement. A legal easement
is one mandated by law, constituted for public use or for private
interest, and becomes a continuing property right. 14 As a
compulsory easement, it is inseparable from the estate to which it
belongs, as provided for in said Article 617 of the Civil Code. The
essential requisites for an easement to be compulsory are: (1) the
dominant estate is surrounded by other immovables and has no
adequate outlet to a public highway; (2) proper indemnity has been
paid; (3) the isolation was not due to acts of the proprietor of the
dominant estate; (4) the right of way claimed is at a point least
prejudicial to the servient estate; and (5) to the extent consistent
with the foregoing rule, where the distance from the dominant
estate to a public highway may be the shortest. 15 The trial court
and the Court of Appeals have declared the existence of said
easement (right of way). This finding of fact of both courts below
is conclusive on this Court, 16 hence we see no need to further
review, but only to re-affirm, this finding. The small house
occupying one meter of the two-meter wide easement obstructs
the entry of private respondents' cement mixer and motor vehicle.
One meter is insufficient for the needs of private respondents. It is
well-settled that the needs of the dominant estate determine the
width of the easement. 17 Conformably then, petitioner ought to
demolish whatever edifice obstructs the easement in view of the
needs of private respondents' estate.
Petitioner's second proposition, that he is not bound by the
contract of easement because the same was not annotated in the
title and that a notice of lis pendens of the complaint to enforce the
easement was not recorded with the Register of Deeds, is
obviously unmeritorious. As already explained, it is in the nature of
legal easement that the servient estate (of petitioner) is legally
bound to provide the dominant estate (of private respondents in
this case) ingress from and egress to the public highway.
Petitioner's last argument that he was not a party to Civil Case No.
Q-91-8703 and that he had not been given his day in court, is also
without merit. Rule 39, Sec. 47, of the Revised Rules of Court:
SECTION 47. Effect of judgments or final orders. The effect of
a judgment or final order rendered by a court of the Philippines,
having jurisdiction to pronounce the judgment or final order, may
be as follows:
(a) In case of a judgment or final order against a specific thing, or
in respect to the probate of a will, or the administration of the estate
of a deceased person, or in respect to the personal, political, or
legal condition or status of a particular person or his relationship
to another, the judgment or final order is conclusive upon the title
to the thing, the will or administration, or the condition, status or
relationship of the person; however, the probate of a will or
granting of letters of administration shall only be prima
facie evidence of the death of the testator or intestate;
(b) In other cases, the judgment or final order is, with respect to
the matter directly adjudged or as to any other matter that could
have been raised in relation thereto, conclusive between the
parties and their successors in interest by title subsequent to the
commencement of the action or special proceeding, litigating for
the same thing and under the same title and in the same capacity;
and
(c) In any other litigation between the same parties or their
successors-in-interest, that only is deemed to have been adjudged
in a former judgment or final order which appears upon its face to
have been so adjudged, or which was actually and necessarily
included therein or necessary thereto. (Italics supplied).
Simply stated, a decision in a case is conclusive and binding upon
the parties to said case and those who are their successor-in-
interest by title after said case has been commenced or filed in
court. 18 In this case, private respondents, Julio Sebastian and
Shirley Lorilla, initiated Civil Case No. Q-91-8703 on May 8,
1991, 19 against the original owners, the spouses Maximo and
Justina Gabriel. Title in the name of petitioner was entered in the
Register of Deeds 20 on March 24, 1995, after he bought the
property from the bank which had acquired it from the Gabriels.
Hence, the decision in Civil Case No. Q-91-8703 binds petitioner.
For, although not a party to the suit, he is a successor-in-interest
by title subsequent to the commencement of the action in court.
WHEREFORE, the instant petition is DENIED. The assailed
decision and resolution of the Court of Appeals are AFFIRMED.
Costs against petitioner.
SO ORDERED.
||| (Villanueva v. Velasco, G.R. No. 130845, [November 27, 2000],
399 PHIL 664-674)
National Irrigation Administration v. Court of Appeals 440 SCRA
661
FIRST DIVISION
[G.R. No. 114348. September 20, 2000.]
NATIONAL IRRIGATION ADMINISTRATION, petitioner, vs. CO
URT OF APPEALS and DICK MANGLAPUS, respondents.
The Solicitor General for petitioner.
Atty. Simeon T. Agustin for private respondent.
SYNOPSIS
A free patent over three (3) hectares of land, situated in barrio
Baybayog, Municipality of Alcala, Province of Cagayan, was
issued in the name of respondent's predecessor-in-interest
Vicente Manglapus. The land grant provided, among others, a
condition that the land shall be subject to all conditions and public
easements and servitudes recognized and prescribed by law
especially those mentioned in Sections 109, 110, 111, 112, 113
and 114 of Commonwealth Act No. 141, as amended.
Subsequently, respondent Manglapus acquired the lot from
Vicente Manglapus by absolute sale. Sometime in 1982, the NIA
entered into a contract with Villamar Development Construction.
Under the contract, the NIA was to construct canals in Amulung,
Cagayan and Alcala, Cagayan. The NIA then entered a
portion of Manglapus' land and made diggings and fillings thereon.
Manglapus filed with the Regional Trial Court, Tuguegarao,
Cagayan a complaint for damages against the NIA. Manglapus
alleged that the NIA's diggings and fillings destroyed the
agricultural use of his land and that no reasonable compensation
was paid for its taking. The trial court rendered a decision in
favor of Manglapus ordering the defendant to pay plaintiff the
sum of One Hundred Fifty Thousand Six Hundred Pesos
(P150,600.00) and Fifty Thousand (P50,000.00) Pesos as
compensatory damages. On appeal,
the Court of Appealsaffirmed in toto the decision of the trial court.
Hence, the present petition by the NIA.
The Supreme Court granted the petition and set aside the
decision of the trial court awarding Manglapus just compensation.
According to the Court, the Transfer Certificate of Title and the
Original Certificate of Title covering the subject parcel of land
contained a reservation granting the government a right ofway
over the land covered therein. The transfer certificate of title, on
which both the trial court and Court of Appeals relied, contained
such a reservation, and said reservation, unlike the
other provisos imposed on the grant, was not limited by any time
period and thus is a subsisting condition.
SYLLABUS
1. CIVIL LAW; PROPERTY; EASEMENT OF A RIGHT OF WAY;
THE TRANSFER CERTIFICATE OF TITLE OF THE SUBJECT
PARCEL OF LAND CONTAINED RESERVATION GRANTING
THE GOVERNMENT A RIGHT OF WAY OVER THE LAND
COVERED THEREIN. We agree with NIA that the Transfer
Certificate of Title and the Original Certificate of Title covering the
subject parcel of land contained a reservation granting the
government a right of way over the land covered therein. The
transfer certificate of title, on which both the
trial court and Court of Appeals relied, contains such a units, or institutions, the land hereby acquired shall be inalienable
reservation. It states that title to the land shall be: ". . . subject to
the provisions of said Land Registration Act and the Public Land
Act, as well as those of Mining Laws, if the land is mineral, and
subject, further to such conditions contained in the original title as
may be subsisting." Under the Original Certificate of Title, there
was a reservation and condition that the land is subject to "to all
conditions and public easements and servitudes recognized and
prescribed by law especially those mentioned in Sections 109,
110, 111, 112, 113 and 114, Commonwealth Act No. 141, as
amended." This reservation, unlike the other provisos imposed on
the grant, was not limited by any time period and thus is a
subsisting condition. Section 112, Commonwealth Act No. 141,
provides that lands granted by patent, "shall further be subject to
a right of way not exceeding twenty meters in width for public
highways, railroads, irrigation ditches, aqueducts, telegraphs and
telephone lines, and similar works as the Government or any
public or quasi-public service or enterprises, including mining or
forest concessionaires may reasonably require for carrying on
their business, with damages for the improvements only." We note
that the canal NIA constructed was only eleven (11) meters in
width. This is well within the limit provided by law. Manglapus has
therefore no cause to complain. TAIEcS
2. ID.; ID.; ID.; LEGAL EASEMENT OF RIGHT OF WAY EXISTS
IN FAVOR OF THE GOVERNMENT IN CASE AT BAR. Article
619 of the Civil Code provides that, "Easements are established
either by law or by the will of the owners. The former are called
legal and the latter voluntary easements." In the present case, we
find and declare that a legal easement of a right-of-way exists in
favor of the government. The land was originally public land, and
awarded to respondent Manglapus by free patent. The ruling
would be otherwise if the land were originally private property, in
which case, just compensation must be paid for the taking of a part
thereof for public use as an easement of a right of way. Neither
can Manglapus argue that he was a transferee or buyer in good
faith. Under the Torrens system, for one to be a buyer in good faith
and for value, the vendee must see the transfer certificate of title
and rely upon the same. Here, the annotation on the transfer
certificate of title imposed on Manglapus the duty to refer to the
conditions annotated on the back of the original certificate of title.
This, he did not do. The law cannot protect him. Manglapus is a
transferee with notice of the liens annotated in the title.
DECISION
PARDO, J p:
This case is an appeal 1 from the
decision of the Court of Appeals 2 affirming in toto the
decision of the Regional Trial Court, Branch 04, Tuguegarao,
Cagayan 3ruling in favor of private respondent Dick Manglapus
(hereinafter referred to as "Manglapus"), and ordering
petitioner National Irrigation Administration(hereinafter referred to
as "NIA") to pay Manglapus one hundred fifty thousand six
hundred pesos (P150,600.00), and fifty thousand pesos
(P50,000.00), as compensatory damages, five thousand pesos
(P5,000.00), as attorney's fees, and two thousand pesos
(P2,000.00), as litigation expenses and costs.
FACTS:
On June 28, 1963, a free patent over three (3) hectares of land,
situated in barrio Baybayog, municipality of Alcala,
province of Cagayan was issued in the name of respondent's
predecessor-in-interest, Vicente Manglapus, and registered under
Original Certificate of Title No. P-24814, in his name. The land was
granted to Vicente Manglapus, 4 subject to the
following proviso expressly stated in the title: 5
"TO HAVE AND TO HOLD the said tract of land, with the
appurtenances thereunto of right belonging unto the said
VICENTE MANGLAPUS and to his heirs and assigns forever,
subject to the provisions of Sections 113, 121, 122 and
124 of Commonwealth Act. No. 141, as amended which provide
that except in favor of the Government or any of its branches,
and shall not be subject to encumbrance for a period of five (5)
years from the date of this patent, and shall not be liable for the
satisfaction of any debt contracted prior to the expiration of that
period; that it shall not be encumbered, alienated, or transferred to
any person, corporation, association or partnership not qualified to
acquire lands of the public domain under said Commonwealth Act
No. 141, as amended; and that it shall not be subject to any
encumbrance whatsoever in favor of any corporation, association
or partnership except with the consent of the grantee and the
approval of the Secretary of Agriculture and Natural Resources
and solely for educational, religious or charitable purposes or for a
right of way; and subject finally to all conditions and public
easements and servitudes recognized and prescribed by law
especially those mentioned in Sections 109, 110, 111, 112, 113
and 114 of Commonwealth Act No. 141 as amended, and the
right of the Government to administer and protect the timber found
thereon for a term of five (5) years from the date of this patent,
provided, however, that the grantee or heirs may cut and utilize
such timber for his or their personal use (emphasis ours)."
Subsequently, respondent Manglapus acquired the lot from
Vicente Manglapus by absolute sale.
On July 18, 1974, the land was registered in Dick Manglapus'
name under Transfer Certificate of Title No. T-26658 of the
Register of Deeds for the Province of Cagayan. 6 The land is
particularly described as follows: 7
"Lot No. 3559, Pls-497, with an area of 30,438 square meters, and
covered by TRANSFER CERTIFICATE OF TITLE NO. T-26658,
and Tax Declaration No. 11985."
Sometime in 1982, NIA entered into a contract with Villamar
Development Construction. Under the contract, NIA was to
construct canals in Amulung, Cagayan and Alcala, Cagayan. NIA
then entered a portion of Manglapus' land and made diggings and
fillings thereon. 8
The portion of Manglapus' land entered into by NIA is described
as follows: 9
"In a sketch prepared by NIA's employee labeled as NIA canal
"Lateral "D", with an area of 7,880 square meters, which is a
portion of Lot 3559, Pls-497."
On March 14, 1991, Manglapus filed with the Regional Trial Court,
Tuguegarao, Cagayan a complaint for damages against
NIA. 10 Manglapus alleged that NIA's diggings and fillings
destroyed the agricultural use of his land and that no reasonable
compensation was paid for its taking. 11
Despite service of notice of the pre-trial conference, 12 NIA did
not appear at the pre-trial conference. 13
On December 3, 1991, the trial court declared NIA in default and
received Manglapus' evidence ex parte. 14
On December 23, 1991, the trial court rendered a decision in
favor of Manglapus, thus: 15
"WHEREFORE, and in consideration of the foregoing,
the Court finds preponderance of evidence in favor of the plaintiff
and against the defendant:
"1) Ordering the defendant to pay plaintiff the sum of One Hundred
Fifty Thousand Six Hundred Pesos (P150,600.00) and Fifty
Thousand (P50,000.00) Pesos as compensatory damages;
"2) Ordering the defendant to pay to plaintiff the sum of Five
Thousand Pesos (P5,000.00) as attorney's fees and Two
Thousand Pesos (P2,000.00) as litigation expenses; and
"3) To pay the cost of the suit.
"SO ORDERED."
On January 27, 1992, NIA filed a motion to lift the order of default
dated December 3, 1991, and to set aside the afore-quoted
decision of December 23, 1991. 16
On June 3, 1992, the trial court issued a resolution denying the
motion for lack of merit. 17
On July 17, 1992, NIA filed a notice of appeal to
the Court of Appeals. 18
On July 27, 1992, the trial court gave due course to the appeal and
ordered the transmission of the original records to
the Court of Appeals. 19
On July 30, 1992, Manglapus filed a motion for
execution of judgment with the trial court. 20
On August 7, 1992, the NIA through the Solicitor General filed an
opposition to the motion for execution. 21
On August 17, 1992, the trial court declared that since the
notice of appeal of NIA was given due course, the motion for
execution was "moot and academic." 22
On March 8, 1994, the Court of Appeals promulgated its decision,
the dispositive portion of which reads: 23
"WHEREFORE, PREMISES CONSIDERED, the decision
appealed from is hereby AFFIRMED in toto and the appeal is
hereby DISMISSED.
"SO ORDERED."
Hence, this appeal. 24
ISSUE:
The sole issue is whether the NIA should pay Manglapus just
compensation for the taking of a portion of his property for use as
easement of a right of way.
HELD:
We find that NIA is under no such obligation. We sustain the
appeal.
We agree with NIA that the Transfer Certificate of Title 25 and the
Original Certificate of Title 26 covering the subject parcel of land
contained a reservation granting the government a right of way
over the land covered therein. 27
The transfer certificate of title, on which both the
trial court and Court of Appeals relied, contains such a HIDALGO ENTERPRISES,
reservation. It states that title to the land shall be: 28
". . . subject to the provisions of said Land Registration Act and the
Public Land Act, as well as those of Mining Laws, if the land is
mineral, and subject, further to such conditions contained in the
original title as may be subsisting (emphasis ours)."
Under the Original Certificate of Title, 29 there was a reservation
and condition that the land is subject to "to all conditions and public
easements and servitudes recognized and prescribed by law
especially those mentioned in Sections 109, 110, 111, 112, 113
and 114, Commonwealth Act No. 141, as amended." This
reservation, unlike the other provisos 30 imposed on the grant,
was not limited by any time period and thus is a subsisting
condition.
Section 112, Commonwealth Act No. 141, provides that lands
granted by patent,
"shall further be subject to a right of way not exceeding twenty
meters in width for public highways,
railroads, irrigation ditches, aqueducts, telegraphs and telephone
lines, and similar works as the Government or any public or quasi-
public service or enterprises, including mining or forest
concessionaires may reasonably require for carrying on their
business, with damages for the improvements only (emphasis
ours)."
We note that the canal NIA constructed was only eleven (11)
meters in width. This is well within the limit provided by
law. 31 Manglapus has therefore no cause to complain.
Article 619 of the Civil Code provides that, "Easements are
established either by law or by the will of the owners. The former
are called legal and the latter voluntary easements." In the present
case, we find and declare that a legal easement of a right-of-way
exists in favor of the government. The land was originally public
land, and awarded to respondent Manglapus by free patent. The
ruling would be otherwise if the land were originally private
property, in which case, just compensation must be paid for the
taking of a part thereof for public use as an easement of a
right of way. 32
Neither can Manglapus argue that he was a transferee or buyer in
good faith. Under the Torrens system, for one to be a buyer in good
faith and for value, the vendee must see the transfer
certificate of title and rely upon the same. 33 Here, the annotation
on the transfer certificate of title imposed on Manglapus the duty
to refer to the conditions annotated on the back of the original
certificate of title. This, he did not do. The law cannot protect him.
Manglapus is a transferee with notice of the liens annotated in the
title.
One who deals with property registered under the Torrens system
is charged with notice of burdens and claims that are annotated on
the title. 34
WHEREFORE, the Court GRANTS the petition for review
on certiorari, and REVERSES the
decision of the Court of Appeals in CA-G.R. CV No. 38835.
IN LIEU THEREOF, the Court SETS ASIDE the decision of the
Regional Trial Court, Branch IV, Tuguegarao, Cagayan in Civil
Case No. 4266, and DISMISSES the complaint.
No costs.
SO ORDERED.
||| (National Irrigation Administration v. Court of Appeals, G.R. No.
114348, [September 20, 2000], 395 PHIL 48-57)
Title 8 Nuisance (Arts. 694-707)
CASE:
Hidalgo Enterprises, Inc. v. Balandan 91 Phil.
EN BANC
[G.R. No. L-3422. June 13, 1952.]
INC., petitioner, vs.
GUILLERMO BALANDAN, ANSELMA ANILA and THE COURT
OF APPEALS, respondents.
Quisumbing, Sycip, Quisumbing & Salazar for petitioner.
Antonio M. Moncado for respondents.
SYLLABUS
1. ATTRACTIVE NUISANCE, WHAT CONSTITUTES;
MAINTAINER LIABLE FOR INJURIES CAUSED TO CHILD.
One who maintains on his premises dangerous instrumentalities
or appliances of a character likely to attract children in play, and
who fails to exercise ordinary care to prevent children from playing
therewith or resorting thereto, is liable to a child of tender years
who is injured thereby, even if the child is technically a trespasser
in the premises.
2. ID.; DOCTRINE NOT APPLICABLE TO SWIMMING POOL OR
WATER TANK. The attractive nuisance doctrine generally is not
applicable to bodies of water, artificial as well as natural, in the
absence of some unusual condition or artificial feature other than
the mere water and its location.
DECISION
BENGZON, J p:
This is an appeal by certiorari, from a decision of the Court of
Appeals requiring Hidalgo Enterprises, Inc. to pay
Guillermo Balandan and his wife, damages in the sum of P2,000
for the death of their son Mario.
It appears that the petitioner Hidalgo Enterprises, Inc. "was the
owner of an ice-plant factory in the City of San Pablo, Laguna, in
whose premises were installed two tanks full of water, nine feet
deep, for cooling purposes of its engine. While the factory
compound was surrounded with fence, the tanks themselves were
not provided with any kind of fence or top covers. The edges of the
tank were barely a foot high from the surface of the ground.
Through the wide gate entrance, which was continually open,
motor vehicles hauling ice and persons buying said commodity
passed, and any one could easily enter the said factory, as he
pleased. There was no guard assigned on the gate. At about noon
of April 16, 1948, plaintiffs' son, Mario Balandan, a boy barely 8
years old, while playing with and in company of other boys of his
age, entered the factory premises through the gate, to take a bath
in one of said tanks; and while thus bathing, Mario sank to the
bottom of the tank, only to be fished out later, already a cadaver,
having died of 'asphyxia secondary to drowning.'".
The Court of Appeals, and the Court of First Instance of Laguna,
took the view that the petitioner maintained an attractive nuisance
(the tanks), and neglected to adopt the necessary precautions to
avoid accident to persons entering its premises. It applied the
doctrine of attractive nuisance, of American origin, recognized in
this jurisdiction in Taylor vs. Manila Electric 16 Phil., 8.
The doctrine may be stated, in short, as follows: One who
maintains on his premises dangerous instrumentalities or
appliances of a character likely to attract children in play, and who
fails to exercise ordinary care to prevent children from playing
therewith or resorting thereto, is liable to a child of tender years
who is injured thereby, even if the child is technically a trespasser
in the premises. (See 65 C. J. S., p. 455.)
The principal reason for the doctrine is that the condition or
appliance in question although its danger is apparent to those of
age, is so enticing or alluring to children of tender years as to
induce them to approach, get on or use it, and this attractiveness
is an implied invitation to such children (65 C. J. S., p. 458).
Now, is a swimming pool or water tank an instrumentality or
appliance likely to attract little children in play? In other words is
the body of water an attractive nuisance? The great majority of
American decisions say no.
"The attractive nuisance doctrine generally is not applicable to
bodies of water, artificial as well as natural, in the absence of some
unusual condition or artificial feature other than the mere water
and its location."
"There are numerous cases in which the attractive nuisance
doctrine has been held not to be applicable to ponds or reservoirs,
pools of water, streams, canals, dams, ditches, culverts, drains,
cesspools or sewer pools, . . . ." (65 C. J. S., p. 476 et seg. citing
decisions of California, Georgia, Idaho, Illinois, Kansas, Iowa,
Louisiana, Miss., Missouri, Montana, Oklahoma, Pennsylvania,
Tennessee, Texas, Nebraska, Wisconsin.)
In fairness to the Court of Appeals it should be stated that the
above volume of Corpus Juris Secundum was published in 1950,
whereas its decision was promulgated on September 30, 1949.
The reason why a swimming pool or pond or reservoir of water is
not considered an attractive nuisance was lucidly explained by the
Indiana Appellate Court as follows:
"Nature has created streams, lakes and pools which attract
children. Lurking in their waters is always the danger of drowning.
Against this danger children are early instructed so that they are
sufficiently presumed to know the danger; and if the owner of
private property creates an artificial pool on his own property,
merely duplicating the work of nature without adding any new
danger, . . . (he) is not liable because of having created an
'attractive nuisance.' Anderson vs. Reith-Riley Const. Co., N. E.,
2nd, 184, 185; 184, 185; 112 Ind. App., 170.
Therefore, as petitioner's tanks are not classified as attractive
nuisance, the question whether the petitioner had taken
reasonable precautions becomes immaterial. And the other issue
submitted by petitioner - that the parents of the boy were guilty of
contributory negligence precluding recovery, because they left for
Manila on that unlucky day leaving their son under the care of no
responsible individual needs no further discussion.
The appealed decision is reversed and the Hidalgo Enterprises,
Inc. is absolved from liability. No costs.
Feria, Padilla, Tuason, Montemayor and Bautista Angelo,
JJ., concur.
||| (Hidalgo Enterprises, Inc. v. Balandan, G.R. No. L-3422, [June
13, 1952], 91 PHIL 488-492)
Title 9 Registry of Property (Arts. 708-711)
BOOK THREE Different Modes of Acquiring Ownership
A. Theory of Mode and Title
CASE:
Acap v. Court of Appeals 251 SCRA 30
Title 1 Occupation(Arts. 713-720)
A. Requisites
Title 2 Intellectual Creation (Arts. 721-724)
Title 3 Donation
A. Concept of Donation
B. Classifications of Donation
C.Forms of Donation
1. Immovable Property
2. Movable Property
D.Persons Who May Give or Receive Donations (Arts. 735-
749)
E. Effects and Limitations of Donation (Arts. 750-759)
F. Revocation and Reduction of Donations (Arts. 760-773)
CASES:
De Luna v. Abrigo 181 SCRA 150
FIRST DIVISION
[G.R. No. 57455. January 18, 1990.]
EVELYN DE LUNA, ROSALINA DE LUNA, PRUDENCIO DE
LUNA, JR., WILLARD DE LUNA, ANTONIO DE LUNA, and
JOSELITO DE LUNA, petitioners, vs. HON. SOFRONIO F.
ABRIGO, Presiding Judge of the Court of First Instance of
Quezon, Branch IX, and LUZONIAN UNIVERSITY
FOUNDATION, INC., respondents.
Milberto B. Zurbano for petitioners.
Jovito E. Talabong for private respondent.
SYLLABUS
1. CIVIL LAW; DONATION; CLASSIFICATION AS TO MOTIVE,
PURPOSE OR CAUSE. From the viewpoint of motive, purpose
or cause, donations may be 1) simple, 2) remuneratory or 3)
onerous. A simple donation is one the cause of which is pure
liberality (no strings attached). A remuneratory donation is one
where the donee gives something to reward past or future services
or because of future charges or burdens, when the value of said
services, burdens or charges is less than the value of the donation.
An onerous donation is one which is subject to burdens, charges
or future services equal (or more) in value than that of the thing
donated (Edgardo L. Paras, Civil Code of the Philippines
Annotated, 11 ed., 726).
2. ID.; ONEROUS DONATION GOVERNED BY RULES ON
CONTRACT AND GENERAL RULES ON PRESCRIPTION OF
ACTION. Under the old Civil Code, it is settled rule that
donations with an onerous cause are governed not by the law on
donations but by the rules on contracts, as held in the cases of
Carlos v. Ramil, L-6736, September 5, 1911, 20 Phil. 183, Manalo
vs. de Mesa, L-9449, February 12, 1915, 29 Phil. 495. On the
matter of prescription of actions for the revocation of onerous
donation, it was held that the general rules on prescription applies.
(Parks v. Province of Tarlac, supra.) The same rules apply under
the New Civil Code as provided in Article 733 thereof which
provides: "Article 733. Donations with an onerous cause shall be
governed by the rules on contracts, and remuneratory donations
by the provisions of the present Title as regards that portion which
exceeds the value of the burden imposed."
3. ID.; CONTRACTS; PARTIES THERETO HAVE THE RIGHT TO
ESTABLISH STIPULATIONS NOT CONTRARY TO LAW.
Under Article 1306 of the New Civil Code, the parties to a contract
have the right "to establish such stipulations, clauses, terms and
conditions as they may deemed convenient, provided they are not
contrary to law, morals, good customs, public orders or public
policy." Paragraph 11 of the "Revival of Donation Intervivos, has
provided that" violation of any of the conditions (herein) shall cause
the automatic reversionof the donated area to the donor, his heirs,
. . . , without the need of executing any other document for that
purpose and without obligation on the part of the DONOR". Said
stipulation not being contrary to law, morals, good customs, public
order or public policy, is valid and binding upon the foundation who
voluntarily consented thereto.
4. ID.; ID.; JUDICIAL ACTION FOR RESCISSION OF
CONTRACT NOT NECESSARY WHEN SO STIPULATED. The
validity of the stipulation in the contract providing for the automatic
reversion of the donated property to the donor upon non-
compliance cannot be doubted. It is in the nature of an agreement
granting a party the right to rescind a contract unilaterally in case
of breach, without need of going to court. Upon the happening of
the resolutory condition of non-compliance with the conditions of
the contract, the donation is automatically revoked without need of
a judicial declaration to that effect. In the case of University of the
Philippines v. de los Angeles, L-28602, September 29, 1970, 35
SCRA 102-107, it was held: ". . . There is nothing in the law that
prohibits the parties from entering into agreement that violation of
the terms of the contract would cause cancellation thereof, even
without court intervention. In other words, it is not always
necessary for the injured party to resort to court for rescission of
the contract (Froilan v. Pan Oriental Shipping Co., et al., L-11897,
31 October 1964,12 SCRA 276)." This was reiterated in the case
of Angeles v. Calasanz, L-42283, March 18, 1985: "Well settled is,
however, the rule that a judicial action for the rescission of a
contract is not necessary where the contract provides that it may
be revoked and cancelled for violation of any of its terms and
conditions (Lopez v. Commissioner of Customs, 37 SCRA 327,
334, and cases cited therein). Resort to judicial action for
rescission is obviously not contemplated. The validity of the
stipulation can not be seriously disputed. It is in the nature of a
facultative resolutory condition which in many cases has been
upheld, by this court. (Ponce Enrile v. Court of Appeals, 29 SCRA
504)"
5. REMEDIAL LAW; CIVIL PROCEDURE; JUDGMENT ON THE
PLEADING; MOTION OF PARTY NECESSARY. On the matter
of the donee's non-compliance with the conditions of the donation
have been contested by private respondents who claimed that
improvements more valuable than the donated property had been
introduced, a judgment on the pleadings is not proper. Moreover,
in the absence of a motion for judgment on the pleadings, the court
cannot motu proprio render such judgment. Section 1 of Rule 19
provides: "Where an answer fails to tender an issue, or otherwise
admits the material allegations of the adverse party's pleading, the
court may, on motion of that party, direct judgment on such
pleading."
DECISION
MEDIALDEA, J p:
This is a petition for review on certiorari of the Order dated July, 7,
1981 of respondent judge Sofronio F. Abrigo of the Court of First
Instance of Quezon, Branch IX in Civil Case No. 8624 dismissing
the complaint of petitioners on the ground of prescription of action.
The antecedent facts are as follows:
On January 24, 1965, Prudencio de Luna donated a portion of
7,500 square meters of Lot No. 3707 of the Cadastral Survey of
Lucena covered by Transfer Certificate of Title No. 1-5775 to the
Luzonian Colleges, Inc., (now Luzonian University Foundation,
Inc., herein referred to as the foundation). The donation, embodied
in a Deed of Donation Intervivos (Annex "A" of Petition) was
subject to certain terms and conditions and provided for the
automatic reversion to the donor of the donated property in case
of violation or non-compliance (pars. 7 and 10 of Annex "A", p.
20, Rollo). The foundation failed to comply with the conditions of
the donation. On April 9, 1971, Prudencio de Luna "revived" the
said donation in favor of the foundation, in a document entitled
"Revival of Donation Intervivos" (Annex "B" of Petition) subject to
terms and conditions which among others, required:
xxx xxx xxx
"3. That the DONEE shall construct at its own expense a Chapel,
a Nursery and Kindergarten School, to be named after St.
Veronica, and other constructions and accessories shall be
constructed on the land herein being donated strictly in
accordance with the plans and specifications prepared by the O.R.
Quinto & Associates and made part of this donation; provided that
the flooring of the Altar and parts of the Chapel shall be of
granoletic marble.
"4. That the construction of the Chapel, Nursery and Kindergarten
School shall start immediately and must be at least SEVENTY (70)
PER CENTUM finished by the end of THREE (3) YEARS from the
date hereof, however, the whole project as drawn in the plans and
specifications made parts of this donation must be completed
within FIVE (5) YEARS from the date hereon, unless extensions
are granted by the DONOR in writing;
" . . . ." (p. 23, Rollo)
As in the original deed of donation, the "Revival of Donation
Intervivos" also provided for the automatic reversion to the donor
of the donated area in case of violation of the conditions thereof,
couched in the following terms:
xxx xxx xxx
"11. That violation of any of the conditions herein provided shall
cause the automatic reversion of the donated area to the donor,
his heirs, assigns and representatives, without the need of
executing any other document for that purpose and without
obligation whatever on the part of the DONOR." (p. 24, Rollo)
The foundation, through its president, accepted the donation in the
same document, subject to all the terms and conditions stated in
the donation (p. 24, Rollo). The donation was registered and
annotated on April 15, 1971 in the memorandum of encumbrances
as Entry No. 17939 of Transfer Certificate of Title No. T-5775 (p.
15, Rollo)
On August 3, 1971, Prudencio de Luna and the foundation
executed a "Deed of Segregation" (Annex "C" of Petition) whereby
the area donated which is now known as Lot No. 3707-B of
Subdivision Plan Psd-40392 was adjudicated to the foundation. As
a result, Transfer Certificate of Title No. T-16152 was issued in the
name of the foundation. The remaining portion known as Lot No.
3707-A was retained by the donor. (p. 16, Rollo).
On September 23, 1980, herein petitioners, Evelyn, Rosalina,
Prudencio, Jr., Willard, Antonio and Joselito, all surnamed de
Luna, who claim to be the children and only heirs of the late
Prudencio de Luna who died on August 18, 1980, filed a complaint
(pp. 14-17, Rollo) with the Regional Trial Court of Quezon alleging
that the terms and conditions of the donation were not complied
with by the foundation. Among others, it prayed for the cancellation
of the donation and the reversion of the donated land to the heirs.
The complaint was docketed as Civil Case No. 8624.
In its answer (pp. 29-36, Rollo), respondent foundation claimed
that it had partially and substantially complied with the conditions
of the donation and that the donor has granted the foundation an
indefinite extension of time to complete the construction of the
chapel. It also invoked the affirmative defense of prescription of
action and prayed for the dismissal of the complaint. prcd
During the pre-trial of the case, the foundation moved for a
preliminary hearing of its affirmative defense of prescription of
action which was opposed by the plaintiffs. After the parties have
filed their respective written motions, oppositions and memoranda,
an Order (pp. 40-43, Rollo) dated July 7, 1981 was issued
dismissing the complaint. The dispositive portion of the Order
states:
"In view of the foregoing considerations, this Court finds the motion
to dismiss deemed filed by the defendant on the ground of
prescription to be well-taken and the same is hereby GRANTED.
"WHEREFORE, the instant complaint is hereby ordered
DISMISSED.
"No pronouncement as to costs.
"SO ORDERED." (pp. 42-43, Rollo)
No motion for reconsideration was filed by petitioners.
On July 22, 1981, petitioners brought the instant petition for review
with the following assignments of error:
"I. THE LOWER COURT ERRED IN HOLDING THAT THE
DONEE'S CONSENT TO THE REVOCATION OF A DONATION
TO BE VALID MUST BE GIVEN SUBSEQUENT TO THE
EFFECTIVITY OF THE DONATION OR VIOLATION OF (THE)
ANY OF THE CONDITIONS IMPOSED THEREIN.
"II. THE LOWER COURT ERRED IN TREATING THE
COMPLAINT AS ONE FOR JUDICIAL DECREE OF
REVOCATION OF THE DONATION IN QUESTION AS
CONTEMPLATED IN ARTICLE 764 OF THE CIVIL CODE OF
THE PHILIPPINES AND WHICH PRESCRIBES IN FOUR (4)
YEARS AND IN NOT CONSIDERING IT AS AN ACTION TO
ENFORCE A WRITTEN CONTRACT WHICH PRESCRIBES IN
TEN (10) YEARS AS PROVIDED IN ARTICLE 1144, HENCE,
THE LOWER COURT ERRED IN DISMISSING THE
COMPLAINT.
"III. THE LOWER COURT ERRED IN NOT RENDERING
JUDGMENT ON THE MERITS BY WAY OF JUDGMENT ON THE
PLEADINGS." (pp. 1-2, Petitioner's Brief)
We gave due course to the petition on August 3, 1981 (p.
45, Rollo). After the parties' submission of their respective briefs,
the Court resolved to consider the petition submitted for decision
on January 27, 1982 (p. 62, Rollo).
The assailed order of the trial court stated that revocation (of a
donation) will be effective only either upon court judgment or upon
consent of the donee as held in the case of Parks v. Province of
Tarlac, No. 24190, July 13, 1926, 49 Phil. 143. The trial court
dismissed the claim of petitioners that the stipulation in the
donation providing for revocation in case of non-compliance of
conditions in the donation is tantamount to the consent of the
donee, opining that the consent contemplated by law should be
such consent given by the donee subsequent to the effectivity of
the donation or violation of the conditions imposed therein. The
trial court further held that, far from consenting to the revocation,
the donee claimed that it had already substantially complied with
the conditions of the donation by introducing improvements in the
property donated valued at more than the amount of the donated
land. In view thereof, a judicial decree revoking the subject
donation is necessary. Accordingly, under Article 764 of the New
Civil Code, actions to revoke a donation on the ground of non-
compliance with any of the conditions of the donation shall
prescribe in four years counted from such non-compliance. In the
instant case, the four-year period for filing the complaint for
revocation commenced on April 9, 1976 and expired on April 9,
1980. Since the complaint was brought on September 23, 1980 or
more than five (5) months beyond the prescriptive period, it was
already barred by prescription. LLjur
On the other hand, petitioners argue that Article 764 of the New
Civil Code was adopted to provide a judicial remedy in case of
non-fulfillment of conditions when revocation of the donation has
not been agreed upon by the parties. By way of contrast, when
there is a stipulation agreed upon by the parties providing for
revocation in case of non-compliance, no judicial action is
necessary. It is then petitioners' claim that the action filed before
the Court of First Instance of Quezon is not one for revocation of
the donation under Article 764 of the New Civil Code which
prescribes in four (4) years, but one to enforce a written contract
which prescribes in ten (10) years.
The petition is impressed with merit.
From the viewpoint of motive, purpose or cause, donations may
be 1) simple, 2) remuneratory or 3) onerous. A simple donation is
one the cause of which is pure liberality (no strings attached). A
remuneratory donation is one where the donee gives something to
reward past or future services or because of future charges or
burdens, when the value of said services, burdens or charges is
less than the value of the donation. An onerous donation is one
which is subject to burdens, charges or future services equal (or
more) in value than that of the thing donated (Edgardo L. Paras,
Civil Code of the Philippines Annotated, 11 ed., 726).
It is the finding of the trial court, which is not disputed by the
parties, that the donation subject of this case is one with an
onerous cause. It was made subject to the burden requiring the
donee to construct a chapel, a nursery and a kindergarten school
in the donated property within five years from execution of the
deed of donation.
Under the old Civil Code, it is settled rule that donations with an
onerous cause are governed not by the law on donations but by
the rules on contracts, as held in the cases of Carlos v. Ramil, L-
6736, September 5, 1911, 20 Phil. 183, Manalo vs. de Mesa, L-
9449, February 12, 1915, 29 Phil. 495. On the matter of
prescription of actions for the revocation of onerous donation, it
was held that the general rules on prescription applies. (Parks v.
Province of Tarlac, supra.) The same rules apply under the New
Civil Code as provided in Article 733 thereof which provides:
"Article 733. Donations with an onerous cause shall be governed
by the rules on contracts, and remuneratory donations by the
provisions of the present Title as regards that portion which
exceeds the value of the burden imposed."
It is true that Article 764 of the New Civil Code, actions for the
revocation of a donation must be brought within for (4) years from
the non-compliance of the conditions of the donation. However, it
is Our opinion that the said article does not apply to onerous
donations in view of the specific provision of Article 733 providing
that onerous donations are governed by the rules on contracts.
In the light of the above, the rules on contracts and the general
rules on prescription and not the rules on donations are applicable
in the case at bar.
Under Article 1306 of the New Civil Code, the parties to a contract
have the right "to establish such stipulations, clauses, terms and
conditions as they may deemed convenient, provided they are not
contrary to law, morals, good customs, public orders or public
policy." Paragraph 11 of the "Revival of Donation Intervivos, has
provided that" violation of any of the conditions (herein) shall cause
the automatic reversion of the donated area to the donor, his heirs,
. . . , without the need of executing any other document for that
purpose and without obligation on the part of the DONOR". Said
stipulation not being contrary to law, morals, good customs, public
order or public policy, is valid and binding upon the foundation who
voluntarily consented thereto. prcd
The validity of the stipulation in the contract providing for the
automatic reversion of the donated property to the donor upon
non-compliance cannot be doubted. It is in the nature of an
agreement granting a party the right to rescind a contract
unilaterally in case of breach, without need of going to court. Upon
the happening of the resolutory condition of non-compliance with
the conditions of the contract, the donation is automatically
revoked without need of a judicial declaration to that effect. In the
case of University of the Philippines v. de los Angeles, L-28602,
September 29, 1970, 35 SCRA 102-107, it was held:
" . . . There is nothing in the law that prohibits the parties from
entering into agreement that violation of the terms of the contract
would cause cancellation thereof, even without court intervention.
In other words, it is not always necessary for the injured party to
resort to court for rescission of the contract (Froilan v. Pan Oriental
Shipping Co., et al., L-11897, 31 October 1964,12 SCRA 276)."
This was reiterated in the case of Angeles v. Calasanz, L-42283,
March 18, 1985:
"Well settled is, however, the rule that a judicial action for the
rescission of a contract is not necessary where the contract
provides that it may be revoked and cancelled for violation of any
of its terms and conditions (Lopez v. Commissioner of Customs,
37 SCRA 327, 334, and cases cited therein).
"Resort to judicial action for rescission is obviously not
contemplated. The validity of the stipulation can not be seriously
disputed. It is in the nature of a facultative resolutory condition
which in many cases has been upheld, by this court. (Ponce Enrile
v. Court of Appeals, 29 SCRA 504)".
However, in the University of the Philippines v. Angeles case,
(supra), it was held that in cases where one of the parties contests
or denies the rescission, "only the final award of the court of
competent jurisdiction can conclusively settle whether the
resolution is proper or not." It was held, thus:.
" . . . since in every case, where the extrajudicial resolution is
contested, only the final award of the court of competent
jurisdiction can conclusively settle whether the resolution was
proper or not. It is in this sense that judicial action will be necessary
as without it, the extrajudicial resolution will remain contestable
and subject to judicial invalidation, unless attack thereon should
become barred by acquiescence, estoppel or prescription."
It is clear, however, that judicial intervention is necessary not for
purposes of obtaining a judicial declaration rescinding a contract
already deemed rescinded by virtue of an agreement providing for
rescission even without judicial intervention, but in order to
determine whether or not the rescission was proper. prcd
The case of Parks v. Province of Tarlac, supra, relied upon by the
trial court, is not applicable in the case at bar. While the donation
involved therein was also onerous, there was no agreement in the
donation providing for automatic rescission, thus, the need for a
judicial declaration revoking said donation.
The trial court was therefore not correct in holding that the
complaint in the case at bar is barred by prescription under Article
764 of the New Civil Code because Article 764 does not apply to
onerous donations.
As provided in the donation executed on April 9, 1971, compliance
with the terms and conditions of the contract of donation, shall be
made within five (5) years from its execution. The complaint which
was filed on September 23, 1980 was then well within the ten (10)
year prescriptive period to enforce a written contract (Article
1144[1], New Civil Code), counted from April 9, 1976.
Finally, considering that the allegations in the complaint on the
matter of the donee's non-compliance with the conditions of the
donation have been contested by private respondents who
claimed that improvements more valuable than the donated
property had been introduced, a judgment on the pleadings is not
proper. Moreover, in the absence of a motion for judgment on the
pleadings, the court cannot motu proprio render such
judgment. Section 1 of Rule 19 provides: "Where an answer fails
to tender an issue, or otherwise admits the material allegations of
the adverse party's pleading, the court may, on motion of that
party, direct judgment on such pleading." (Emphasis Ours)
ACCORDINGLY, the petition is GRANTED. Civil Case No. 8624
is hereby ordered reinstated. Respondent judge is ordered to
conduct a trial on the merits to determine the propriety of the
revocation of the subject donation.
SO ORDERED.
||| (De Luna v. Abrigo, G.R. No. 57455, [January 18, 1990], 260
PHIL 157-167)
Reyes v. Mosqueda 187 SCRA 661
THIRD DIVISION
[G.R. No. L-45262. July 23, 1990.]
RUPERTO REYES and REYNALDO C. SAN JUAN, in his
capacity as Special Administrator, petitioners, vs. HON.
LORENZO R. MOSQUEDA, Judge of CFI, Pampanga (Branch
VII), and URSULA D PASCUAL, respondents.
[G.R. No. L- 45394. July 23, 1990.]
PEDRO DALUSONG, petitioner, vs. HON LORENZO R.
MOSQUEDA, JUDGE, BRANCH VII, COURT OF FIRST
INSTANCE OF PAMPANGA, and URSULA D.
PASCUAL, respondents.
[G.R. Nos. 73241-42. July 23, 1990.]
OFELIA D. PARUNGAO and ROSARIO DUNCIL, petitioners, vs.
THE HON. INTERMEDIATE APPELLATE COURT, (Third Civil
Cases Division), BENJAMIN P. REYES and OSCAR
REYES, respondents.
DECISION
GUTIERREZ, JR., J p:
The instant petitions have been consolidated as they arose from
the same facts and involve similar issues.
Dr. Emilio Pascual died intestate and without issue on November
18, 1972. He was survived by his sister, Ursula Pascual and the
children of his late sisters as follows: (1) Maria Pascual Reyes
Ruperto Reyes and Jose Reyes; (2) Ines Pascual Reyes Jose
P. Reyes, Benito Reyes, and Marina Reyes Manalastas; (3)
Josefa Pascual Reyes Augusto Reyes and Benjamin Reyes;
and (4) Escolastica Pascual Dalusong (half-blood) Pedro
Dalusong.
On December 3, 1973, the heirs of Dr. Pascual filed Special
Proceedings No. 73-30-M in the then Court of First Instance of
Pampanga for the administration of his estate. Atty. Marcela
Macapagal, Clerk of Court of Branch VII was appointed special
administratrix. Macapagal was, however, replaced by Reynaldo
San Juan.
On February 12, 1976, Ursula Pascual filed a motion to exclude
some properties from the inventory of Pascual's estate and to
deliver the titles thereto to her. Ursula alleged that Dr. Pascual
during his lifetime or on November 2, 1966 executed a "Donation
Mortis Causa" in her favor covering properties which are included
in the estate of Dr. Pascual (subject of Special Proceedings No.
73-30-M) and therefore should be excluded from the
inventory. cdphil
On August 1, 1976; the trial court issued an order excluding from
the inventory of the estate the properties donated to Ursula, to wit:
"WHEREFORE, in view of all the foregoing discussion, let the
properties listed in paragraph 2 of the motion of February 12, 1976
filed by Ursula D. Pascual thru counsel be, as it is hereby ordered,
excluded from the inventory of the estate of the deceased Dr.
Emilio D. Pascual, without prejudice to its final determination in a
separate action. Special Administrator Reynaldo San Juan is
hereby ordered to return to Court the custody of the corresponding
certificates of titles of these properties, until the issue of ownership
is finally determined in a separate action." (G. R. No. 45262, pp.
23-24).
The Order is now the subject of G. R. Nos. 45262 and 45394. On
January 5, 1977, we issued a temporary restraining order
enjoining the trial court from enforcing the August 1, 1976 Order.
Among the properties included in the "donation mortis causa" in
favor of Ursula was Lot 24, Block No. 15 of the subdivision plan
Psd-3231, located at 1109-1111 R. Papa St., Tondo, Manila as
evidenced by Transfer Certificate of Title No. 17854. The records
show that on May 15, 1969, Emilio Pascual executed a deed of
donation of real property inter vivos over the abovementioned lot
in Manila in favor of Ofelia D. Parungao, petitioner in G. R. Nos.
73241-42 a minor with her mother, Rosario Duncil, accepting the
gift and donation for and in her behalf. When Parungao reached
the age of majority or on December 20, 1976, she tried to have the
donation registered. However, she found out that the certificate of
title was missing from where it was supposed to be kept, prompting
her to file a petition for reconstitution of title with the Court of First
Instance of Manila. The petition was granted in October 1977.
Parungao registered the deed of donation with the Register of
Deeds of Manila who cancelled Transfer Certificate of Title No.
17854 and issued in lieu thereof Transfer Certificate of Title No.
129092 in the name of Ofelia Parungao. She then filed a motion
for exclusion in Special Proceedings No. 73-30-M.
In the meantime, on September 23, 1976, Ursula Pascual
executed a deed of absolute sale over the Tondo property in favor
of Benjamin, Oscar, Jose and Emmanuel, all surnamed Reyes.
On May 2, 1978, Benjamin Reyes, private respondent in G. R.
Nos. 73241-42 filed a complaint for declaration of nullity of
Transfer Certificate of Title No. 129092, Register of Deeds of
Manila and/or reconveyance of deed of title against Ofelia
Parungao and Rosario Duncil with the then Court of First Instance
of Manila. The case was docketed as Civil Case No. 115164.
In their answer with compulsory counterclaim Parungao and
Duncil denied Reyes' assertion of ownership over the Tondo
property. On November 6, 1978, Ofelia Parungao filed a complaint
for recovery of possession over the Tondo property against
Benjamin Reyes and his nephew Oscar Reyes with the Court of
First Instance of Manila. The case was docketed as Civil Case No.
119359. In her complaint, Parungao also alleged that as early as
1973, the defendants occupied two (2) doors of the apartment
situated at the Tondo property by mere tolerance of the previous
owner, Dr. Emilio Pascual, and later by her until April 8, 1978 when
she formally demanded that the defendants vacate the premises.
Parungao prayed that the defendants be evicted from the
premises.
The two cases were consolidated. On June 3, 1982, the then Court
of First Instance, Branch 8 rendered a joint decision, the
dispositive portion of which reads:
"WHEREFORE, judgment is hereby rendered:
In Civil Case No. 115164
1) Declaring TCT No. 129092 in the name of Ofelia Parungao null
and void; and ordering the Register of Deeds of Manila to cancel
said title and to restore, in lieu thereof, TCT No. 17854 in the name
of Emilio D. Pascual;
2) Ordering Ofelia D. Parungao to pay plaintiff Benjamin P. Reyes
the sum of Two Thousand (P2,000.00) Pesos, as and for
attorney's fees; and to pay the costs of suit including all fees which
the Register of Deeds may prescribe for the full implementation of
this decision.
For lack of merit, the counterclaim is dismissed.
In Civil Case No. 119359
1) Dismissing the complaint for want of merit; and
2) On the counterclaim, ordering Ofelia Parungao to pay
defendants the sum of Two Thousand (P2,000.00) Pesos as and
for attorney's fees."
Parungao appealed the decision to the then Intermediate
Appellate Court. The decision was, however, affirmed, with costs
against the appellant.
The Intermediate Appellate Court decision is now the subject
matter in G. R. Nos. 73241-42.
On January 29, 1986, we issued a minute resolution denying the
above petition for lack of merit. The resolution became final and
executory on March 10, 1986 and on this same day the entry of
judgment was effected. The entry of judgment was however set
aside in the resolution dated January 19, 1987 on the ground that
the January 29, 1986 resolution was not received by the
petitioners' counsel of record. The petitioner was granted leave to
file a motion for reconsideration of the January 29, 1986
resolution. LLjur
The motion for reconsideration is now before us for resolution.
The issues raised in these petitions are two-fold: (1) In G.R. No. L-
45394, petitioner Pedro Dalusong questions the jurisdiction of the
probate court to exclude the properties donated to Ursula Pascual
in its Order dated August 1, 1976, and (2) In G.R. No. L-45262 and
G.R. Nos. 73241-42 Ruperto Reyes, Reynaldo C. San Juan, in his
capacity as special administrator of the estate of Emilio Pascual
(petitioner in G.R. No. L-45262), Ofelia Parungao and Rosario
Duncil (petitioners in G.R. Nos. 73241-42) question the appellate
court's finding that the "Donation Mortis Causa" executed by Emilio
Pascual in favor of his sister Ursula Pascual was actually a
Donation Inter Vivos.
We first discuss the issue on jurisdiction. The questioned August
1, 1976 order of the then Court of First Instance of Pampanga in
S.P. Proc. No. 73-30-M categorically stated that the exclusion from
the inventory of the estate of the deceased Dr. Emilio D. Pascual
was "without prejudice to its final determination in a separate
action." The provisional character of the exclusion of the contested
properties in the inventory as stressed in the order is within the
jurisdiction of the probate court. This was stressed in the case
of Cuizon v. Ramolete(129 SCRA 495 [1984]) which we cited in
the case of Morales v. Court of First Instance of Cavite, Branch
V (146 SCRA 373 [1986]):
"It is well-settled rule that a probate court or one in charge of
proceedings whether testate or intestate cannot adjudicate or
determine title to properties claimed to be a part of the estate and
which are equally claimed to belong to outside parties. All that the
said court could do as regards said properties is to determine
whether they should or should not be included in the inventory or
list of properties to be administered by the administrator. If there is
no dispute, well and good; but if there is, then the parties, the
administrator, and the opposing parties have to resort to an
ordinary action for a final determination of the conflicting claims of
title because the probate court cannot do so (Mallari v. Mallari, 92
Phil. 694; Baquial v. Amihan, 92 Phil. 501).
Similarly, in Valero Vda. de Rodriguez v. Court of Appeals, (91
SCRA 540) we held that for the purpose of determining whether a
certain property should or should not be included in the inventory,
the probate court may pass upon the title thereto but such
determination is not conclusive and is subject to the final decision
in a separate action regarding ownership which may be instituted
by the parties (3 Moran's Comments on the Rules of Court, 1970
Edition, pages 448-449 and 473; Lachenal v. Salas, L-42257, June
14, 1976, 71 SCRA 262, 266)."
On the second issue, it may be noted that the Court of Appeals did
not pass upon the authenticity of the 1969 donation to Parungao
because of its finding that the 1966 donation to Pascual was inter
vivos. The petitioners do not press the authenticity of the 1969
donation as their challenge centers on whether or not the 1966
donation was inter vivos. However, the trial court has a lengthy
discussion reflecting adversely on the authenticity of the 1969
donation to Parungao.
The petitioners assert that the 1966 donation was null and void
since it was not executed with the formalities of a will. Therefore,
the petitioners in G.R. No. L-45262 insist that the donated
properties should revert to the estate of Emilio Pascual while the
petitioners in G.R. Nos. 73241-42 insist that the donation of real
property inter vivos in favor of Ofelia Parungao be given
effect. LexLib
The subject deed of donation titled "DONATION MORTIS CAUSA"
duly notarized by a certain Cornelio M. Sigua states:
"That Dr. Emilio D. Pascual, Filipino, single, of age and resident of
Apalit, Pampanga, hereinafter called the DONOR and Ursula D.
Pascual, Filipino, single, also of age, resident of and with postal
address at Apalit, Pampanga, hereinafter called the DONEE, have
agreed, as they do hereby agree, to the following, to wit:
That the said DONOR, Dr. Emilio D. Pascual, for and in
consideration of the love and affection which he has and bears
unto the said DONEE, as also for the personal services rendered
by the said DONEE to the said DONOR, does hereby by these
presents voluntarily GIVE, GRANT, and DONATE MORTIS
CAUSA, unto the said DONEE URSULA D. PASCUAL, her heirs
and assigns, all of my rights, title and interest, in and to the
following parcels of land with all the improvements thereon,
situated in the Municipality of Apalit, Pampanga, and more
particularly described and identified as follows:
xxx xxx xxx
(Enumerated herein are 41 parcels of land)
Also included in this DONATION MORTIS CAUSA are all personal
properties of the DONOR in the form of cash money or bank
deposits and insurance in his favor, and his real properties situated
in other towns of Pampanga, such as San Simon, and in the
province of Rizal, San Francisco del Monte and in the City of
Manila.
That the said donor has reserved for himself sufficient property to
maintain him for life; and that the said DONEE does hereby
ACCEPT and RECEIVE this DONATION MORTIS CAUSA, and
further does express his appreciation and gratefulness for the
generosity of said DONOR;" (Rollo of G.R. No. L-45262, pp. 12-
16).
xxx xxx xxx
Considering the provisions of the DONATION MORTIS CAUSA
the appellate court ruled that the deed of donation was actually a
donation inter vivos although denominated as DONATION
MORTIS CAUSA.
It is, now a settled rule that the title given to a deed of donation is
not the determinative factor which makes the donation "inter vivos"
or "mortis causa." As early as the case of Laureta vs. Manta, et
al., (44 Phil. 668 [1928]) this Court ruled that the dispositions in a
deed of donation whether "inter vivos" or "mortis causa" do not
depend on the title or term used in the deed of donation but on the
provisions stated in such deed. This Court explained
in Concepcion v. Concepcion (91 Phil. 823 [1952])
". . . But, it is a rule consistently followed by the courts that it is the
body of the document of donation and the statements contained
therein, and not the title that should be considered in ascertaining
the intention of the donor. Here, the donation is entitled and called
donacio onerosa mortis causa. From the body, however, we find
that the donation was of a nature remunerative rather than
onerous. It was for past services rendered, services which may not
be considered as a debt to be paid by the donee but services
rendered to her freely and in goodwill. The donation instead of
being onerous or for a valuable consideration, as in payment of a
legal obligation, was more of remuneratory or compensatory
nature, besides being partly motivated by affection.
We should not give too much importance or significance to or be
guided by the use of the phrase 'mortis causa' in a donation and
thereby to conclude that the donation is not one of inter vivos. In
the case of De Guzman et al. v. Ibea, et al. (67 Phil. 633), this
Court through Mr. Chief Justice Avancea said that if a donation
by its terms is inter vivos, this character is not altered by the fact
that the donor styles it mortis causa.
In the case of Laureta v. Mata, et al. (44 Phil. 668), the court held
that the donation involved was inter vivos. There, the donor Severa
Magno y Laureta gave the properties involved as
" 'a reward for the services which he is rendering me, and as a
token of my affection toward him and of the fact that he stands
high in my estimation, I hereby donate 'mortis causa' to said youth
all the properties described as follows:
xxx xxx xxx
" 'I also declare that it is the condition of this donation that the
donee cannot take possession of the properties donated before
the death of the donor, and in the event of her death the said donee
shall be under obligation to cause a mass to be held annually as a
suffrage in behalf of my soul, and also to defray the expenses of
my burial and funerals.'
It will be observed that the present case and that of Laureta above
cited are similar in that in both cases the donation was being made
as a reward for services rendered and being rendered, and as a
token of affection for the donee; the phrase 'mortis causa' was
used; the donee to take possession of the property donated only
after the death of the donor; the donee was under obligation to
defray the expenses incident to the celebration of the anniversary
of the donor's death, including church fees. The donation in both
cases were duly accepted. In said case of Laureta this Court held
that the donation was in praesenti and not a gift in futuro."
In the later case of Bonsato, et al. v. Court of Appeals, et al. (95
Phil. 481 [1954]) this Court, distinguished the characteristics of a
donation inter vivos and "mortis causa" in this wise:
"Did the late Domingo Bonsato make donations inter vivos or
dispositions post mortem in favor of the petitioners herein? If the
latter, then the documents should reveal any or all of the following
characteristics:
(1) Convey no title or ownership to the transferee before the death
of the transferor; or, what amounts to the same thing, that the
transferor should retain the ownership (full or naked) and control
of the property while alive (Vidal v. Posadas, 58 Phil., 108;
Guzman v. Ibea, 67 Phil., 633);
(2) That before his death, the transfer should be revocable by the
transferor at will, ad nutum; but revocability may be provided for
indirectly by means of a reserved power in the donor to dispose of
the properties conveyed (Bautista v. Sabiniano, G.R. No. L-4326,
November 18, 1952);
(3) That the transfer should be void if the transferor should survive
the transferee.
These principles were repeated in the case of Castro v. Court of
Appeals (27 SCRA 1076 [1969]), to wit:
"Whether a donation is inter vivos or mortis causa depends upon
the nature of the disposition made. 'Did the donor intend to transfer
the ownership of the property donated upon the execution of the
donation? If this is so, as reflected from the provisions contained
in the donation, then it is inter vivos; otherwise, it is merely mortis
causa, or made to take effect after death.' (Howard v. Padilla and
Court of Appeals, G.R. No. L-7064 and L-7098, April 22, 1955."
Applying the above principles to the instant petitions, there is no
doubt that the so-called DONATION MORTIS CAUSA is really a
donation inter vivos. The donation was executed by Dr. Pascual in
favor of his sister Ursula Pascual out of love and affection as well
as a recognition of the personal services rendered by the donee to
the donor. The transfer of ownership over the properties donated
to the donee was immediate and independent of the death of the
donor. The provision as regards the reservation of properties for
the donor's subsistence in relation to the other provisions of the
deed of donation confirms the intention of the donor to give naked
ownership of the properties to the donee immediately after the
execution of the deed of donation. LLpr
With these findings we find no need to discuss the other
arguments raised by the petitioners.
WHEREFORE, this Court hereby renders judgment as follows:
1) In G.R. Nos. 45262 and 45394 the petitions are DENIED. The
Temporary Restraining Order issued on January 5, 1977 is hereby
LIFTED; and
2) In G.R. Nos. 73241-42, the motion for reconsideration is
DENIED. This DENIAL is FINAL.
SO ORDERED.
||| (Reyes v. Mosqueda, G.R. No. L-45262, 45394, 73241-42, [July
23, 1990], 265 PHIL 710-721)
Liguez v. Court of Appeals 102 Phil. 577
FIRST DIVISION
[G.R. No. L-11240. December 18, 1957.]
CONCHITA LIGUEZ, petitioner, vs. THE HONORABLE COURT
OF APPEALS, MARIA NGO VDA. DE LOPEZ, ET
AL., respondents.
Ruiz, Ruiz & Ruiz for appellant.
Laurel Law Offices for appellees.
SYLLABUS
1. DONATION; CAUSE OR CONSIDERATION; LIBERALITY OF
DONOR WHEN DEEMED "CAUSA". Under Article 1274, of the
Civil Code of 1889, liberality of the donor is deemed causa only in
those contracts that are of "pure" beneficience that is to say,
contracts designed solely and exclusively to procure the welfare of
the beneficiary, without any intent of producing any satisfaction for
the donor; contacts, in other words, in which the idea of self-
interest is totally absent on the part of the transferor. For this very
reason, the same Article 1274 provides that
in remuneratory contracts, the consideration is
the service or benefit for which the remuneration is given; causa is
not liberality in these cases because the contract or conveyance
is not made out of pure beneficience, but "solvendi animo".
2. ID.; ID.; MOTIVE REGARDED AS "CAUSA.". The motive of
the parties may be regarded as causa when it predetermines the
purpose of the contract.
3. ID.; DONATION OF CONJUGAL PROPERTY BY THE
HUSBAND, EFFECT OF. The right of the husband to donate
community property is strictly limited by law (Article 1409, 1413,
1415, Civil Code of 1889; Baello vs. Villanueva, 54 Phil. 213).
However, the donation made in contravention of the law is not void
in its entirely, but only in so far as it prejudices the interest of the
wife. The rule applies whether the donation is gratuitous or for a
consideration.
4. ID.; ID.; LEGITIMATE OF FORCED HEIRS UNAFFECTED;
LEGITIMATE, HOW COMPUTED. The forced heirs are entitled
to have the donation set aside in so far as inofficious; i.e., in
excess of the portion of free disposal (Civil Code of 1889, Arts.
636, 654), computed as provided in Article 818 and 819, and
bearing in mind that "collationable gifts" under Article 818 should
include gifts made not only in favor of the forced heirs, but even
those made in favor of strangers. (Decision of the Supreme Court
Spain, May 4, 1889 and June 16, 1902.)
5. "PARI DELICTO" PARTIES TO ILLEGAL CONTRACT
BARRED FROM PLEADING ILLEGALITY OF BARGAIN. The
rule that the parties to an illegal contract, if equally guilty, will not
be aided by the law but will both be left where it finds them, has
been interpreted by this Court as barring the party from pleading
the illegality of the bargain either as a cause of action or as a
defense.
6. ACCESSION; RULES GOVERNING IMPROVEMENTS MADE
IN GOOD FAITH. Improvements made in good faith are
governed by the rules of accession and possession in good faith.
DECISION
REYES, J. B. L., J p:
From a decision of the Court of Appeals, affirming that of the Court
of First Instance of Davao dismissing her complaint for recovery of
land, Conchita Liguez has resorted to this Court, praying that the
aforesaid decision be reversed on points of law. We granted
certiorari on October 9, 1956.
The case began upon complaint filed by petitioner-appellant
against the widow and heirs of the late Salvador P. Lopez to
recover a parcel of 51.84 hectares of land, situated in Barrio
Bogac-Linot, of the municipality of Mati, Province of Davao.
Plaintiff averred to be its legal owner, pursuant to a deed of
donation of said land, executed in her favor by the late owner,
Salvador P. Lopez, on 18 May 1943. The defense interposed was
that the donation was null and void for having an illicit causa or
consideration, which was plaintiff's entering into marital relations
with Salvador P. Lopez, a married man; and that the property had
been adjudicated to the appellees as heirs of Lopez by the Court
of First Instance, since 1949.
The Court of Appeals found that the deed of donation was
prepared by the Justice of the Peace of Mati, Davao, before whom
it was signed and ratified on the date aforesaid. At the time,
appellant Liguez was a minor, only 16 years of age. While the deed
recites
"That the DONOR, Salvador P. Lopez, for and in consideration of
his love and affection for the said DONEE, Conchita Liguez, and
also for the good and valuable services rendered to the DONOR
by the DONEE, does by these presents, voluntarily give, grant and
donate to the said donee, etc." (Paragraph 2, Exhibit "A")
the Court of Appeals found that when the donation was made,
Lopez had been living with the parents of appellant for barely a
month; that the donation was made in view of the desire of
Salvador P. Lopez, a man of mature years to have sexual relations
with appellant Conchita Liguez; that Lopez had confessed to his
love for appellant to the instrumental witnesses, with the remark
that her parents would not allow Lopez to live with her unless he
first donated the land in question; that after the donation, Conchita
Liguez and Salvador P. Lopez lived together in the house that was
built upon the latter's orders, until Lopez was killed on July 1st,
1943, by some guerrillas who believed him to be pro-Japanese.
It was also ascertained by the Court of Appeals that the donated
land originally belonged to the conjugal partnership of Salvador P.
Lopez and his wife, Maria Ngo; that the latter had met and berated
Conchita for living maritally with her husband, sometime during
June of 1943; that the widow and children of Lopez were in
possession of the land and made improvements thereon; that the
land was assessed in the tax rolls first in the name of Lopez and
later in that of his widow; and that the need of donation was never
recorded.
Upon these facts, the Court of Appeals held that the deed of
donation was inoperative, and null and void (1) because the
husband, Lopez, had no right to donate conjugal property to the
plaintiff appellant; and (2) because the donation was tainted with
illegal causa or consideration, of which donor and donee were
participants.
Appellant vigorously contends that the Court of First Instance as
well as the Court of Appeals erred in holding the donation void for
having an illicit causa or consideration. It is argued that under
Article 1274 of the Civil Code of 1889 (which was the governing
law in 1943, when the donation was executed), "in contracts of
pure beneficence the consideration is the liberality of the donor",
and that liberality per se can never be illegal, since it is neither
against law or morals or public policy.
The flaw in this argument lies in ignoring that under Article 1274,
liberality of the donor is deemed causa only in those contracts that
are of "pure" beneficence; that is to say, contracts designed solely
and exclusively to procure the welfare of the beneficiary, without
any intent of producing any satisfaction for the donor; contracts, in
other words, in which the idea of self-interest is totally absent on
the part of the transferor. For this very reason, the same Article
1274 provides that in remuneratory contracts, the consideration is
the service or benefit for which the remuneration is given; causa is
not liberality in these cases because the contract or conveyance
is not made out of pure beneficence, but "solvendi animo." In
consonance with this view, this Supreme Court in Philippine Long
Distance Co. vs. Jeturian* G. R. L-7756, July 30, 1955, like the
Supreme Court of Spain in its decision of 16 Feb. 1899, has ruled
that bonuses granted to employees to excite their zeal and
efficiency, with consequent benefit for the employer, do not
constitute donation having liberality for a consideration.
Here the facts as found by the Court of Appeals (and which we can
not vary) demonstrate that in making the donation in question, the
late Salvador P. Lopez was not moved exclusively by the desire to
benefit appellant Conchita Liguez, but also to secure her
cohabiting with him, so that he could gratify his sexual impulses.
This is clear from the confession of Lopez to the witnesses
Rodriguez and Ragay, that he was in love with appellant, but her
parents would not agree unless he donated the land in question to
her. Actually, therefore, the donation was but one part of an
onerous transaction (at least with appellant's parents) that must be
viewed in its totality. Thus considered, the conveyance was clearly
predicated upon an illicit causa.
Appellant seeks to differentiate between the alleged liberality of
Lopez, as causa for the donation in her favor, and his desire for
cohabiting with appellant, as motives that impelled him to make
the donation, and quotes from Manresa and the jurisprudence of
this Court on the distinction that must be maintained between
causa and motives (De Jesus vs. Urrutia and Co., 33 Phil. 171). It
is well to note, however, that Manresa himself (Vol. 8, pp. 641-
642), while maintaining the distinction and upholding the
inoperativeness of the motives of the parties to determine the
validity of the contract, expressly excepts from the rule those
contracts that are conditioned upon the attainment of the motives
of either party.
". . . distincion importantisima, que impide anular el contrato por la
sola influencia de los motivos a no ser que se hubiera subordinado
al cumplimiento de estos como condiciones la eficacia de aquel."
The same view is held by the Supreme Court of Spain, in its
decisions of February 4, 1941, and December 4, 1946, holding that
the motive may be regarded as causa when it predetermines the
purpose of the contract.
In the present case, it is scarsely disputable that Lopez would not
have conveyed the property in question had he known that
appellant would refuse to cohabit with him; so that the cohabitation
was an implied condition to the donation, and being unlawful,
necessarily tainted the donation itself.
The Court of Appeals rejected the appellant's claim on the basis
of the well-known rule "in pari delicto non oritur actio" as embodied
in Article 1306 of the Code of 1889 (reproduced in Article 1412 of
the new Civil Code):
"ART. 1412. If the act in which the unlawful or forbidden cause
consists does not constitute a criminal offense, the following rules
shall be observed:
(1) When the fault is on the part of both contracting parties, neither
may recover what he has given by virtue of the contract, or
demand the performance of the other's undertaking;
(2) When only one of the contracting parties is at fault, he cannot
recover what he has given by reason of the contract, or ask for
fulfillment of what has been promised him. The other, who is not
at fault, may demand the return of what he has given without any
obligation to comply with his promise."
In our opinion, the Court of Appeals erred in applying to the present
case the pari delicto rule. First, because it can not be said that both
parties here had equal guilt when we consider that as against the
deceased Salvador P. Lopez, who was a man advanced in years
and mature experience, the appellant was a mere minor, 16 years
of age, when the donation was made; that there is no finding made
by the Court of Appeals that she was fully aware of the terms of
the bargain entered into by and between Lopez and her parents;
that her acceptance in the deed of donation (which was authorized
by Article 626 of the old Civil Code) did not necessarily imply
knowledge of conditions and terms not set forth therein; and that
the substance of the testimony of the instrumental witnesses is
that it was the appellant's parents who insisted on the donation
before allowing her to live with Lopez. These facts are more
suggestive of seduction than of immoral bargaining on the part of
appellant. It must not be forgotten that illegality is not presumed,
but must be duly and adequately proved.
In the second place, the rule that parties to an illegal contract, if
equally guilty, will not be aided by the law but will both be left where
it finds them, has been interpreted by this Court as barring the
party from pleading the illegality of the bargain either as a cause
of action or as a defense. Memo auditor propriam turpitudinem
allegans. Said this Court in Perez vs. Herranz, 7 Phil. 695-696:
"It is unnecessary to determine whether a vessel for which a
certificate and license have been fraudulently obtained incurs
forfeiture under these or any other provisions of this act. It is
enough for this case that the statute prohibits such an
arrangement as that between the plaintiff and defendant so as to
render illegal both the arrangement itself and all contracts between
the parties growing out of it.
It does not, however, follow that the plaintiff can succeed in this
action. There are two answers to his claim as urged in his brief. It
is a familiar principle that the courts will not aid either party to
enforce an illegal contract, but will leave them both where it finds
them; but where the plaintiff can establish a cause of action without
exposing its illegality, the vice does not affect his right to recover.
The American authorities cited by the plaintiff fully sustain this
doctrine. The principle applies equally to a defense. The law in
those Islands applicable to the case is found in article 1305 of the
Civil Code, shutting out from relief either of the two guilty parties
to an illegal or vicious contract.
In the case at bar the plaintiff could establish prima facie his sole
ownership by the bill of sale from Smith, Bell & Co. and the official
registration. The defendant, on his part, might overthrow this title
by proof through a certain subsequent agreement between him
and the plaintiff, dated March 16, 1902, that they had become
owners in common of the vessel, the agreement not disclosing the
illegal motive for placing the formal title in the plaintiff. Such an
ownership is not in itself prohibited, for the United States courts
recognize the equitable ownership of a vessel as against the
holder of a legal title, where the arrangement is not one in fraud of
the law. (Weston vs. Penniman, Federal Case 17455;
Scudder vs. Calais Steamboat Company, Federal Case 12566.)
On this proof, the defendant being a part owner of the vessel,
would have defeated the action for its exclusive possession by the
plaintiff. The burden would then be cast upon the plaintiff to show
the illegality of the arrangement, which under the cases cited he
would not be allowed to do."
The rule was reaffirmed in Lim vs. Lim ChuKao, 51 Phil. 477.
The situation confronting us is exactly analogous. The appellant
seeks recovery of the disputed land on the strength of a donation
regular on its face. To defeat its effect, the appellees must plead
and prove that the same is illegal. But such plea on the part of the
Lopez heirs is not receivable, since Lopez himself, if living, would
be barred from setting up that plea; and his heirs, as his privies
and successors in interest, can have no better rights than Lopez
himself.
Appellees, as successors of the late donor, being thus precluded
from pleading the defense of immorality or illegal causa of the
donation, the total or partial ineffectiveness of the same must be
decided by different legal principles. In this regard, the Court of
Appeals correctly held that Lopez could not donate the entirety of
the property in litigation, to the prejudice of his wife Maria Ngo,
because said property was conjugal in character, and the right of
the husband to donate community property is strictly limited by law
(Civil Code of 1889, Arts. 1409, 1415, 1413; Baello vs. Villanueva,
54 Phil. 213).
"ART. 1409. The conjugal partnership shall also be chargeable
with anything which may have been given or promised by the
husband alone to the children born of the marriage in order to
obtain employment for them or give them a profession or by both
spouses by common consent, should they not have stipulated that
such expenditures should be borne in whole or in part by the
separate property of one of them."
"ART. 1415. The husband may dispose of the property of the
conjugal partnership for the purposes mentioned in Article 1409."
"ART. 1413. In addition to his powers as manager the husband
may for a valuable consideration alienate and encumber the
property of the conjugal partnership without the consent of the
wife."
The text of the articles makes it plain that the donation made by
the husband in contravention of law is not void in its entirety, but
only in so far as it prejudices the interest of the wife. In this regard,
as Manresa points out (Commentaries, 5th Ed., pp. 650-651, 652-
653), the law makes no distinction between gratuitous transfers
and conveyances for a consideration.
"Puede la mujer como proprietaria hacer anular las donaciones
aun durante el matrimonio? Esta es, en suma, la cuestion,
reducida a determinar si la distinta naturaleza entre los actos a
titulo oneroso y los actos a titulo lucrativo, y sus especiales y
diversas circunstancias, pueden motivar una solucion diferente en
cuanto a la epoca en que la mujer he de reclamar y obtener la
nulidad del acto; cuestion que no deja de ser interesantisima.
El Codigo, a pesar de la variacion que ha introducido en el
proyecto de 1851, poniendo como segundo parrafo del articulo
1.413, o como limitacion de las enajenaciones uobligaciones a
titulo oneroso, lo que era una limitacion general de todos los actos
del marido, muestra, sin embargo, que no ha variado de criterio, y
que para el las donaciones deben en todo equipararse a cualquier
otro acto ilegal o fraudulento de caracter oneroso, al decir en el
art. 1.419: 'Tambien se traera a colacion en el inventario de la
sociedad el importe de las donaciones y enajenaciones que
deban considerarse ilegales o fraudulentas, con sujecion al art.
1.413.' (Debio tambien citarse el articulo 1.415, que es el que
habla de donaciones.)"
"En resumen: el marido solo puede donar los bienes gananciales
dentro de los limites marcados en el art. 1.415. Sin embargo, solo
la mujer o sus herederos pueden reclamar contra la valides de la
donacion, pues solo eusuinteres se establece la prohibicion. La
mujer o sus herederos, para poder dejar sin efecto el acto, han de
sufrir verdadero perjuicio, entendiendose que no le hay hasta,
tanto que, terminada por cualquier causa la sociedad de
gananciales, y hecha suliquidacion, no pueda imputarse lo donado
al haber por cualquier concepto del marido, ni obtener en
suconsecuencia la mujer la dibida indemnizacion. La donacion
reviste por tanto legalmente, una eficacia condicional, y en
armonia con este caracter, deben fijarse los efectos de la misma
con relacion a los adquirentes y a los terceros poseedores,
teniendo, en sucaso, en cuenta lo dispuesto en la ley Hipotecaria.
Para prevenir todo perjuicio, puede la mujer, durante el
matrimonio inmediatamente al acto, hacer constar ante los
Tribunales suexistencia y solicitar medidas de precaucion, como
ya se ha dicho. Para evitarlo en lo sucesivo, y cuando las
circunstancias lo requieran, puede instar la declaracion de
prodigalidad."
To determine the prejudice to the widow, it must be shown that the
value of her share in the property donated can not be paid out of
the husband's share of the community profits. The requisite data,
however, are not available to us and necessitate a remand of the
records to the court of origin that settled the estate of the late
Salvador P. Lopez.
The situation of the children and forced heirs of Lopez
approximates that of the widow. As privies of their parent, they are
barred from invoking the illegality of the donation. But their right to
a legitime out of his estate is not thereby affected, since the
legitime is granted them by the law itself, over and above the
wishes of the deceased. Hence, the forced heirs are entitled to
have the donation set aside in so far as inofficious: i.e., in excess
of the portion of free disposal (Civil Code of 1889, Articles 636,
654), computed as provided in Articles 818 and 819, and bearing
in mind that "collationable gifts" under Article 818 should include
gifts made not only in favor of the forced heirs, but even those
made in favor of strangers, as decided by the Supreme Court of
Spain in its decisions of 4 May 1899 and 16 June 1902. So that in
computing the legitimes, the value of the property donated to
herein appellant, Conchita Liguez, should be considered part of
the donor's estate. Once again, only the court of origin has the
requisite date to determine whether the donation is inofficious or
not. With regard to the improvements in the land in question, the
same should be governed by the rules of accession and
possession in good faith, it being undisputed that the widow and
heirs of Lopez were unaware of the donation in favor of the
appellant when the improvements were made.
The appellees, relying on Galion vs. Garayes, 53 Phil. 43, contend
that by her failure to appear at the liquidation proceedings of the
estate of Salvador P. Lopez in July 1943, the appellant has
forfeited her right to uphold the donation if the prejudice to the
widow Maria Ngo resulting from the donation could be made good
out of the husband's share in the conjugal profits. It is also argued
that appellant was guilty of laches in failing to enforce her rights as
donee until 1951. This line of argument overlooks the capital fact
that in 1943, appellant was still a minor of sixteen; and she did not
reach the age of majority until 1948. Hence, her action in 1951 was
only delayed three years. Nor could she be properly expected to
intervene in the settlement of the estate of Lopez: first, because
she was a minor during the great part of the proceedings; second,
because she was not given notice thereof; and third, because the
donation did not make her a creditor of the estate. As we have
ruled in Lopez vs. Olbes, 15 Phil. 547-548:
"The prima facie donation inter vivos and its acceptance by the
donees having been proved by means of a public instrument, and
the donor having been duly notified of said acceptance, the
contract is perfect and obligatory and it is perfectly in order to
demand its fulfillment, unless an exception is proved which is
based on some legal reason opportunely alleged by the donor or
her heirs.
So long as the donation in question has not been judicially proved
and declared to be null, inefficacious, or irregular, the land donated
is of the absolute ownership of the donees and consequently, does
not form a part of the property of the estate of the deceased
Martina Lopez, wherefore the action instituted demanding
compliance with the contract, the delivery by the deforciant of the
land donated, or that it be prohibited to disturb the right of the
donees, should not be considered as incidental to the probate
proceedings aforementioned."
The case of Galion vs. Gayares, supra, is not in point. First,
because that case involved a simulated transfer that can have no
effect, while a donation with illegal causa may produce effects
under certain circumstances where the parties are not of equal
guilt; and again, because the transferee in the Galion case took
the property subject to lis pendens notice, that in this case does
not exist.
In view of the foregoing, the decisions appealed from are reversed
and set aside, and the appellant Conchita Liguez declared entitled
to so much of the donated property as may be found, upon proper
liquidation, not to prejudice the share of the widow Maria Ngo in
the conjugal partnership with Salvador P. Lopez or the legitimes of
the forced heirs of the latter. The records are ordered remanded
to the court of origin for further proceedings in accordance with this
opinion. Costs against appellees. So ordered.
||| (Liguez v. Court of Appeals, G.R. No. L-11240, [December 18,
1957], 102 PHIL 577-588)
Pershing tan Queto v. Court of Appeals 148 SCRA 54
EN BANC
[G.R. No. L-35648. February 27, 1987.]
PERSHING TAN QUETO, petitioner, vs. COURT OF APPEALS,
JUAN POMBUENA and RESTITUTA TACALINAR GUANGCO
DE POMBUENA, respondents.
SYLLABUS
1. REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT OF THE
TRIAL AND APPELLATE COURTS NOT BINDING WHEN
BASED ON ERRONEOUS INFERENCES. The finding by both
the Court of First Instance and the Court of Appeals, that the
disputed lot is paraphernal and that TAN QUETO is a builder in
bad faith were regarded by Us in our assailed decision as findings
of facts and thus ordinarily conclusive on Us. Assuming they are
factual findings, still if they are erroneous inferences from certain
facts, they cannot bind this court.
2. CIVIL LAW; PERSONS AND FAMILY RELATIONS;
PROPERTY ACQUIRED BY BOTH SPOUSES THROUGH
ONEROUS TITLE, CONJUGAL. The land is conjugal, not
paraphernal. How was ownership transferred, if at all, from her
mother to RESTITUTA? The fact is ownership was acquired
by both JUAN and RESTITUTA by tradition (delivery) as a
consequence of the contract of sale (See Art. 712, Civil Code) with
P50.00 (then a considerable amount) as the cause or
consideration of the transaction. The lot is thereof conjugal, having
been acquired by the spouses thru onerous title (the money used
being presumably conjugal, there being no proof that RESTITUTA
had paraphernal funds of her own).
3. ID.; CONTRACTS; DONATION; VOID FOR NON-
COMPLIANCE WITH FORMALITIES OF LAW.
The oral donation of the lot cannot be a valid
donation intervivos because it was not executed in a public
instrument (Art. 749, Civil Code), nor as valid donation mortis
causa for the formalities of a will were not complied with.
4. ID.; ID.; CONTRACTUAL TRANSMISSION OF FUTURE
INHERITANCE, PROHIBITED. The allegation that the transfer
was a conveyance to RESTITUTA of her hereditary share in the
estate of her mother (or parents) cannot be sustained for the
contractual transmission of future inheritance is generally
prohibited.
5. ID.; ID.; SALE; NOT FICTITIOUS; PRESENCE OF VALID
CONSIDERATION. The contention that the sale was fictitious
or simulated (and therefore void) is bankrupt. Firstly, there was a
valid consideration thereof. Secondly, assuming that there had
indeed been a simulation, the parties thereto cannot use said
simulation to prejudice a stranger to said strategem (like petitioner
herein).
6. ID.; POSSESSION; BUILDER IS BAD FAITH ENTITLED TO
REIMBURSEMENT WHERE OWNER OF THE LAND FAILED TO
PROHIBIT CONSTRUCTION OF BUILDING. Was Tan Queto
a possessor and builder in good faith or in bad faith Even assuming
that despite registration of the lot as conjugal, Tan Queto nursed
the belief that the lot was actually RESTITUTA's (making him in
bad faith ), still RESTITUTA's failure to prohibit him from building
despite her knowledge that construction was actually being done,
makes her also in bad faith. The net resultant of mutual bad faith
would entitle TAN QUETO to the rights of a builder in good faith
(Art. 448, Civil code), ergo, reimbursement should be given him if
RESTITUTA decides to appropriates that building for herself (Art.
448, Civil Code).
7. ID.; DIFFERENT MODES OF ACQUIRING OWNERSHIP;
BARTER; CASE AT BAR. TAN QUETO having bartered his
own and small house with the questioned lot with JUAN (who has
been adverted to by a court decision and by the OCT a conjugal
owner) may be said to be the OWNER-POSSESSOR of the lot.
Certainly he is not merely a possessor or builder in good faith (this
phrase presupposes ownership in another); much less is he a
builder in bad faith. He is a builder-possessor (jus
possidendi) because he is the OWNER himself. Please note that
the Chapter on Possession (jus possessionis, not jus possidenti)
in the Civil Code refers to a possessor other than the owner.
Please note further that the difference between a builder (or
possessor) in good faith and one in bad faith is that the former is
NOT AWARE of the defect or flaw in his title or mode of acquisition
while the latter is AWARE of such defect or flaw (Art. 526, Civil
Code). But in either case there is a flaw or defect. In the case of
TAN QUETO there is no such flaw or defect because it is he
himself (not somebody else) who is the owner of the property. Our
decision promulgated on May 16, 1983 is hereby SET ASIDE, and
a new one is hereby rendered declaring the questioned lot
together with the building thereon, as TAN QUETO's exclusive
property.
RESOLUTION
PARAS, J p:
This is a Motion for Reconsideration of the decision dated May 16,
1983 of this Court * in the above-entitled case, asking for the
reversal of said decision on the following grounds: cdphil
1. Decision erred in disregarding the fact that Lot No. 304-B was
registered in the name of the husband, Juan Pombuena, as per
OCT No. 0-1160 issued pursuant to the November
22, 1938 Decision (Exh. 3) of the Cadastral Court in Cadastral
Case No. 12, G.L.R.O. Cad. Rec. No. 1638, and that petitioner had
the right to rely on said OCT;
2. The Decision erred in misinterpreting the admission in the
Answer of petitioner to the complaint in the unlawful detainer Case
No. 448 (City Court of Ozamiz City) as his admission that Lot 304-
B is the paraphernal property of the wife, Restituta Tacalinar;
3. The Decision erred in reforming the Contract of Sale (Exh. B) of
Lot 304-B from Basilides Tacalinar (mother) to the respondent,
Restituta Tacalinar Guangco de Pombuena, from a sale to a
conveyance of the share of the wife Restituta Tacalinar (daughter)
in the future hereditary estate of her parents;
4. The Decision erred in over-looking that the barter agreement is
an onerous contract of exchange, whereby private respondents-
spouses received valuable consideration, concessions and other
benefits therefor and in concluding that `the barter agreement has
no effect;'
5. The Decision erred in disregarding the fact that petitioner
constructed his concrete building on Lot No. 304-B in good
faith relying OCT No. 0-1160, after the dismissal of the ejectment
case and only after the execution of said barter agreement;
6. The Decision erred in confusing the conclusion of law that
petitioner is a builder in bad faith with a finding of fact. The rule is
that questions of law are reviewable on appeal or by certiorari.
Moreover, the rule on finding of fact is subject to well-
settled exceptions. (pp. 257-258, Rollo).
It will be recalled that the undisputed relevant facts indicate:
(1) that Restituta Tagalinar Guangco de Pombuena (RESTITUTA,
for short) received the questioned lot (no. 304-B), of the Cadastre
Survey of the Municipality of Centro, Misamis Occidental either as
a purported donation or by way of purchase on (February
11, 1927) (with P50.00) as the alleged consideration thereof;
(2) that the transaction took place during her mother's lifetime, her
father having predeceased the mother;
(3) that the donation or sale was consummated while RESTITUTA
was already married to her husband Juan Pombuena (JUAN, for
short);
(4) that on January 22, 1935, JUAN filed for himself and his
supposed co-owner RESTITUTA an application for a Torrens Title
over the land;
(5) that under date of November 22, 1938 a decision was
promulgated in G.L.R.C. No. 1638 (Cadastral Case No. 12)
pronouncing JUAN (`married to RESTITUTA') as the owner of the
land;
(6) that on September 22, 1949 a contract of lease over the lot was
entered into between Pershing Tan Queto (TAN QUETO, for short,
the herein petitioner) and RESTITUTA (with the consent of her
husband JUAN) for a period of ten (10) years;
(7) that on December 27, 1960 RESTITUTA sued TAN QUETO for
unlawful detainer (the lease contract having expired) before the
Municipal Court of Ozamis City;
(8) that as a consequence of the cadastral case, an Original
Certificate of Title (Exh. 10) was issued in JUAN's name ("married
to RESTITUTA") on April 22, 1962;
(9) that the unlawful detainer case was won by the spouses in the
Municipal Court; but on appeal in the Court of First Instance, the
entire case was DISMISSED because of an understanding (barter)
whereby TAN QUETO became the owner of the disputed lot, and
the spouses RESTITUTA and JUAN in turn became the owners of
a parcel of land (with the house constructed thereon) previously
owned (that is, before the barter) by TAN QUETO;
(10) that after the barter agreement dated October 10, 1962
between JUAN and TAN QUETO, the latter constructed (See p.
257, Rollo, Vol. II) on the disputed land a concrete building, without
any objection on the part of RESTITUTA;
(11) that later, RESTITUTA sued both JUAN and TAN QUETO for
reconveyance of the title over the registered but disputed lot, for
annulment of the barter, and for recovery of the land with
damages.
The two principal issues are clearly the following: LibLex
(1) Is the questioned lot paraphernal or conjugal?
(2) In having constructed the building on the lot, should TAN
QUETO be regarded as a builder in good faith (and hence entitled
to reimbursement) or a builder in bad faith (with no right to
reimbursement)?
The finding by both the Court of First Instance and the Court of
Appeals that the disputed lot is paraphernal and that TAN QUETO
is a builder in bad faith were regarded by Us in Our assailed
decision as findings of facts and thus ordinarily conclusive on Us.
Assuming they are factual findings, still if they are erroneous
inferences from certain facts, they cannot bind this Court.
A second hard look at the circumstances of the case has
constrained Us to rule as follows:
(1) The land is conjugal, not paraphernal. How was ownership
transferred, if at all, from her mother to RESTITUTA? The oral
donation of the lot cannot be a valid donation inter-vivos because
it was not executed in a public instrument (Art. 749, Civil Code),
nor as a valid donation mortis causa for the formalities of a will
were not complied with. The allegation that the transfer was a
conveyance to RESTITUTA of her hereditary share in the estate
of her mother (or parents) cannot be sustained for the contractual
transmission of futureinheritance is generally prohibited.
The fact is ownership was acquired by both JUAN and
RESTITUTA by tradition (delivery) as a consequence of the
contract of sale (See Art. 712, Civil Code) with P50.00 (then a
considerable amount) as the cause or consideration of the
transaction. The lot is therefore conjugal, having been acquired by
the spouses thru onerous title (the money used being presumably
conjugal, there being no proof that RESTITUTA had paraphernal
funds of her own). The contention that the sale was fictitious or
simulated (and therefore void) is bankrupt. Firstly, there was a
valid consideration therefor. Secondly, assuming that there had
indeed been a simulation, the parties thereto cannot use said
simulation to prejudice a stranger to said strategem (like petitioner
herein).
One nagging question has been posed. But did not TAN QUETO
admit in his Answer that RESTITUTA was the owner of the lot. This
is not so. He admitted RESTITUTA was "an owner"
(not the owner) of the lot, and this is true, for she was a co-owner
(with JUAN, and therefore "an owner." Surely, there is no
admission of RESTITUTA's exclusive ownership. And yet this is
the basis of the trial court's conclusion that the lot was indeed
paraphernal.
(2) Was Tan Queto a possessor and builder in good faith or in bad
faith?.
Even assuming that despite registration of the lot as conjugal, Tan
Queto nursed the belief that the lot was actually RESTITUTA's
(making him in bad faith), still RESTITUTA's failure to prohibit him
from building despite her knowledge that construction was actually
being done, makes her also in bad faith. The net resultant of
mutual bad faith would entitle TAN QUETO to the rights of a builder
in good faith (Art. 448, Civil Code), ergo, reimbursement should be
given him if RESTITUTA decides to appropriate the building for
herself (Art. 448, Civil Code). prLL
However, as already previously intimated, TAN QUETO having
bartered his own lot and small house with the questioned lot with
JUAN (who has been adverted to by a court decision and by the
OCT a conjugal owner) may be said to be the OWNER-
POSSESSOR of the lot. Certainly he is not merely a possessor
or builder in good faith (this phrase presupposes ownership
in another); much less is he a builder in bad faith. He is a builder-
possessor (jus possidendi) because he is the OWNER himself.
Please note that the Chapter on Possession (jus
possessionis, not jus possidendi) in the Civil Code refers to a
possessor other than the owner. Please note further that the
difference between a builder (or possessor) in good faith and one
in bad faith is that the former is NOT AWARE of the defect or flaw
in his title or mode of acquisition while the latter is AWARE of such
defect or flaw (Art. 526, Civil Code). But in either case there is a
flaw or defect. In the case of TAN QUETO there is no such flaw or
defect because it is he himself (not somebody else) who is the
owner of the property.
WHEREFORE, Our decision promulgated on May 16, 1983 is
hereby SET ASIDE, and a new one is hereby rendered declaring
the questioned lot together with the building thereon, as TAN
QUETO's exclusive property. No costs.
SO ORDERED.
||| (Tan Queto v. Court of Appeals, G.R. No. L-35648 (Resolution),
[February 27, 1987], 232 PHIL 57-64)
Pijarillo v. Intermidiate Appellate Court 176 SCRA 340
Cruz v. Court of Appeals 140 SCRA 245
FIRST DIVISION
[G.R. No. L-58671. November 22, 1985.]
EDUVIGIS J. CRUZ, petitioner, vs. COURT OF APPEALS, ET
AL., respondents.
DECISION
PLANA, J p:
This is a petition for review of the decision of the
defunct Court of Appeals dated August 20, 1981 in CA-G.R. No.
65338-R reversing that of the Court of First Instance of Rizal, and
dismissing petitioner's complaint for
revocation of donation against herein private respondents
Teresita, Lydia and Cecilia, all surnamed De Leon.
In 1973, Eduvigis J. Cruz, a childless widow, donated a 235.5
sq.m. residential lot in San Isidro, Taytay, Rizal together with the
two-door apartment created thereon to her grandnieces, private
respondents herein, in a deed of donation entitled "Kasulatan Sa
Kaloobpala". The property was accordingly transferred to the
names of private respondents.
In 1974, Eduvigis Cruz judicially adopted Cresencia Ocreto, a
minor, after which she extrajudicially tried to revoke the donation,
but the donees resisted, alleging that
(a) the property in question was co-owned by Eduvigis Cruz and
her brother, the late Maximo Cruz, grandfather of the donees,
hence the latter own 1/2 of the property by inheritance; and
(b) Eduvigis Cruz owns another property, an agricultural
land of more than two hectares situated in Barrio Dolores, Taytay,
Rizal, hence the donation did not impair the presumptive
legitime of the adopted child.
In 1975, petitioner filed a complaint against the donees for
revocation of donation in the Court of First Instance of Rizal (Civil
Case No. 21049), invoking Article 760, paragraph 3 of the New
Civil Code, which reads:
Art. 760. Every donation inter vivos, made by a person having no
children or descendants, legitimate or legitimated by subsequent
marriage, or illegitimate, may be revoked or reduced as provided
in the next article, by the happening of any of these events:
xxx xxx xxx
(3) If the donor should subsequently adopt a minor child.
After trial, the trial court rendered a decision revoking
the donation. It did not find merit in defendants' claim that the lot
was co-owned by donor and her deceased brother, Maximo Cruz,
because the donor's ownership was deemed admitted by the
donees by accepting the deed of donation. It also rejected
defendants' argument that the donation did not impair the legitime,
saying that said claim was "beside the point" and did not limit
plaintiff's right under Art. 760 of the Civil Code. LLpr
On appeal, the Court of Appeals reversed the trial court and
dismissed the complaint. It found that
(a) the trial court took into consideration only Article 760 of the
Civil Code and ignored Article 761 which states: "In the cases
referred to in the preceding article, the donationshall be revoked
or reduced insofar as it exceeds the portion that may be freely
disposed of by will, taking into account the whole estate of the
donor at the time of the birth, appearance or adoption of a child.
(b) Eduvigis Cruz owns another lot in Dolores, Taytay, Rizal,
although the subject of a pending litigation, valued at P273,420.00
in 1977.
(c) The donated lot did not belong entirely to Eduvigis as 1/2
thereof belonged to her brother Maximo Cruz,
grandfather of defendants. In 1974 it had a total market
value ofP17,000. One-half thereof was P8,500. Adding thereto a
P50,000 value of the apartment house constructed thereon, the
total value of the donation would still be within the free
portion of donor's estate and therefore would not impair the
legitime of the adopted child.
(d) In an action for revocation of donation, the donor has the
burden to show that the donation has impaired the legitime of the
subsequent child; but in this case, Eduvigis did not even allege it
in her complaint.
In the instant petition for review, petitioner imputes to the
appellate court alleged errors which boil down to the question as
to whether under the facts as established and the law, the decision
under review correctly dismissed the complaint to annul the
subject donation. We hold that it did.
In the case of the subsequent adoption of a minor by one who had
previously donated some or all of his properties to another, the
donor may sue for the annulment or
reduction ofthe donation within four years from the
date of adoption, if the donation impairs the legitime of the
adopted, taking into account the whole estate of the donor at the
time of the adoption of the child. (Civil Code, Articles 760, 761 and
763). Of course, the burden of proof is on the plaintiff-donor, who
must allege and establish the requirements prescribed by law, on
the basis of which annulment or reduction of the donation can be
adjudged.
Unfortunately, in the case at bar, the complaint for annulment does
not allege that the subject donation impairs the legitime of the
adopted child. Indeed it contains no indication at all of the total
assets of the donor.
Nor is there proof of impairment of legitime. On the contrary, there
is unrebutted evidence that the donor has another piece of land
(27,342 sq. m.) situated in Dolores, Taytay, Rizal worth
P273,420.00 in 1977, although then subject to litigation. LibLex
The legal situation of petitioner-donor, as plaintiff, is made worse
by the factual finding of the Court of Appeals that the
grandfather of the donees was the owner pro indiviso of one-
half of the donated land, the effect of which is to reduce the
value of the donation which can then more easily be taken from
the portion of the estate within the free disposal ofpetitioner.
WHEREFORE, the decision under review is affirmed.
SO ORDERED.
||| (Cruz v. Court of Appeals, G.R. No. L-58671, [November 22,
1985], 224 PHIL 380-384)
Roman Catholic Archbishop of Manila v. Court of Appeals 198
SCRA 300
SECOND DIVISION
[G.R. No. 77425. June 19, 1991.]
THE ROMAN CATHOLIC ARCHBISHOP OF MANILA, THE
ROMAN CATHOLIC BISHOP OF IMUS, and the SPOUSES
FLORENCIO IGNAO and SOLEDAD C.
IGNAO,petitioners, vs. HON. COURT OF APPEALS, THE
ESTATE OF DECEASED SPOUSES EUSEBIO DE CASTRO
and MARTINA RIETA, represented by MARINA RIETA
GRANADOS and THERESA RIETA TOLENTINO, respondents.
[G.R. No. 77450. June 19, 1991.]
THE ROMAN CATHOLIC ARCHBISHOP OF MANILA, THE
ROMAN CATHOLIC BISHOP OF IMUS, and the SPOUSES
FLORENCIO IGNAO and SOLEDAD C.
IGNAO,petitioners, vs. HON. COURT OF APPEALS, THE
ESTATE OF DECEASED SPOUSES EUSEBIO DE CASTRO
and MARTINA RIETA, represented by MARINA RIETA
GRANADOS and THERESA RIETA TOLENTINO, respondents.
Severino C. Dominguez for petitioner Roman Catholic Bishop of
Imus, Cavite.
Dolorfino and Dominguez Law Offices for Sps. Ignao.
Joselito R. Enriquez for private respondents.
SYLLABUS
1. CIVIL LAW; DEED OF DONATION; WHEN CONTENTS
THEREOF PROVIDE FOR AUTOMATIC REVERSION OF
PROPERTY DONATED IN CASE OF VIOLATION OF
CONDITIONS SET FORTH THEREIN, JUDICIAL ACTION FOR
RESCISSION, NOT NECESSARY. The deed of donation
involved herein expressly provides for automatic reversion of the
property donated in case of violation of the condition therein,
hence a judicial declaration revoking the same is not necessary.
As aptly stated by the Court of Appeals: "By the very express
provision in the deed of donation itself that the violation of the
condition thereof would render ipso facto null and void the deed of
donation, WE are of the opinion that there would be no legal
necessity anymore to have the donation judicially declared null
and void for the reason that the very deed of donation itself
declares it so. For where (sic) it otherwise and that the donors and
the donee contemplated a court action during the execution of the
deed of donation to have the donation judicially rescinded or
declared null and void should the condition be violated, then the
phrase reading 'would render ipso facto null and void' would not
appear in the deed of donation." In support of its aforesaid position,
respondent court relied on the rule that a judicial action for
rescission of a contract is not necessary where the contract
provides that it may be revoked and cancelled for violation of any
of its terms and conditions. It called attention to the holding that
there is nothing in the law that prohibits the parties from entering
into an agreement that a violation of the terms of the contract
would cause its cancellation even without court intervention, and
that it is not always necessary for the injured party to resort to court
for rescission of the contract. It reiterated the doctrine that a
judicial action is proper only when there is absence of a special
provision granting the power of cancellation.
2. ID.; ID.; ID.; DE LUNA, ET AL., v. ABRIGO, ET AL. [181 SCRA
150], APPLICABLE IN CASE AT BAR; RATIONALE FOR THE
RULE. The validity of such a stipulation in the deed of donation
providing for the automatic reversion of the donated property to
the donor upon non-compliance of the condition was upheld in the
recent case of De Luna, et al. vs. Abrigo, et al., 181 SCRA 150
(1990). It was held therein that said stipulation is in the nature of
an agreement granting a party the right to rescind a contract
unilaterally in case of breach, without need of going to court, and
that, upon the happening of the resolutory condition or non-
compliance with the conditions of the contract, the donation is
automatically revoked without need of a judicial declaration to that
effect. While what was the subject of that case was an onerous
donation which, under Article 733 of the Civil Code is governed by
the rules on contracts, since the donation in the case at bar is also
subject to the same rules because of its provision on automatic
revocation upon the violation of a resolutory condition, from parity
of reasons said pronouncements in De Luna pertinently apply.
The rationale for the foregoing is that in contracts providing for
automatic revocation, judicial intervention is necessary not for
purposes of obtaining a judicial declaration rescinding a contract
already deemed rescinded by virtue of an agreement providing for
rescission even without judicial intervention, but in order to
determine whether or not the rescission was proper.
3. ID.; ID.; ID.; GENERAL RULES ON CONTRACT AND
PRESCRIPTION SHOULD APPLY, NOT ART. 764 OF THE
CODE. When a deed of donation, as in this case, expressly
provides for automatic revocation and reversion of the property
donated, the rules on contract and the general rules on
prescription should apply, and not Article 764 of the Civil Code.
Since Article 1306 of said Code authorizes the parties to a contract
to establish such stipulations, clauses, terms and conditions not
contrary to law, morals, good customs, public order or public
policy, we are of the opinion that, at the very least, that stipulation
of the parties providing for automatic revocation of the deed of
donation, without prior judicial action for that purpose, is valid
subject to the determination of the propriety of the rescission
sought. Where such propriety is sustained, the decision of the
court will be merely declaratory of the revocation, but it is not in
itself the revocatory act.
4. ID.; ID.; PROHIBITION AGAINST ALIENATION FOR AN
UNREASONABLE LENGTH OF TIME; CONTRARY TO PUBLIC
POLICY. The cause of action of private respondents is based
on the alleged breach by petitioners of the resolutory condition in
the deed of donation that the property donated should not be sold
within a period of one hundred (100) years from the date of
execution of the deed of donation. Said condition, in our opinion,
constitutes an undue restriction on the rights arising from
ownership of petitioners and is, therefore, contrary to public policy.
Donation, as a mode of acquiring ownership, results in an effective
transfer of title over the property from the donor to the donee. Once
a donation is accepted, the donee becomes the absolute owner of
the property donated. Although the donor may impose certain
conditions in the deed of donation, the same must not be contrary
to law, morals, good customs, public order and public policy. The
condition imposed in the deed of donation in the case before us
constitutes a patently unreasonable and undue restriction on the
right of the donee to dispose of the property donated, which right
is an indispensable attribute of ownership. Such a prohibition
against alienation, in order to be valid, must not be perpetual or for
an unreasonable period of time.
5. ID.; ID.; ID.; SHOULD BE DECLARED NULL AND VOID AS AN
IMPOSSIBLE CONDITION. It is significant that the provisions
therein regarding a testator also necessarily involve, in the main,
the devolution of property by gratuitous title hence, as is generally
the case of donations, being an act of liberality, the imposition of
an unreasonable period of prohibition to alienate the property
should be deemed anathema to the basic and actual intent of
either the donor or testator. For that reason, the regulatory arm of
the law is or must be interposed to prevent an unreasonable
departure from the normative policy expressed in the aforesaid
Articles 494 and 870 of the Code. In the case at bar, we hold that
the prohibition in the deed of donation against the alienation of the
property for an entire century, being an unreasonable
emasculation and denial of an integral attribute of ownership,
should be declared as an illegal or impossible condition within the
contemplation of Article 727 of the Civil Code. Consequently, as
specifically stated in said statutory provision, such condition shall
be considered as not imposed. No reliance may accordingly be
placed on said prohibitory paragraph in the deed of donation. The
net result is that, absent said proscription, the deed of sale
supposedly constitutive of the cause of action for the nullification
of the deed of donation is not in truth violative of the latter hence,
for lack of cause of action, the case for private respondents must
fail.
6. SUPREME COURT; HAS AUTHORITY TO REVIEW
MATTERS EVEN IF THEY ARE NOT ASSIGNED AS ERRORS
ON APPEAL; CASE AT BAR. It will readily be noted that the
provision in the deed of donation against alienation of the land for
one hundred (100) years was the very basis for the action to nullify
the deed of donation. At the same time, it was likewise the
controverted fundament of the motion to dismiss the case a quo,
which motion was sustained by the trial court and set aside by
respondent court, both on the issue of prescription. That ruling of
respondent court interpreting said provision was assigned as an
error in the present petition. While the issue of the validity of the
same provision was not squarely raised, it is ineluctably related to
petitioner's aforesaid assignment of error since both issues are
grounded on and refer to the very same provision. This Court is
clothed with ample authority to review matters, even if they are not
assigned as errors on appeal, if it finds that their consideration is
necessary in arriving at a just decision of the case. Thus, we have
held that an unassigned error closely related to an error properly
assigned, or upon which the determination of the question properly
assigned is dependent, will be considered by the appellate court
notwithstanding the failure to assign it as error.
7. ID.; ID.; FOR THE EXPEDITIOUS ADMINISTRATION OF
SUBSTANTIAL JUSTICE, REMAND OF THE CASE TO THE
LOWER COURT FOR FURTHER RECEPTION OF EVIDENCE,
NOT NECESSARY. We have laid down the rule that the
remand of the case to the lower court for further reception of
evidence is not necessary where the Court is in a position to
resolve the dispute based on the records before it. On many
occasions, the Court, in the public interest and for the expeditious
administration of justice has resolved actions on the merits instead
of remanding them to the trial court for further proceedings, such
as where the ends of justice, would not be subserved by the
remand of the case. The aforestated considerations obtain in and
apply to the present case with respect to the matter of the validity
of the resolutory condition in question.
DECISION
REGALADO, J p:
These two petitions for review on certiorari 1 seek to overturn the
decision of the Court of Appeals in CA-G.R. CV No. 05456 2 which
reversed and set aside the order of the Regional Trial Court of
Imus, Cavite dismissing Civil Case No. 095-84, as well as the order
of said respondent court denying petitioner's motions for the
reconsideration of its aforesaid decision.
On November 29, 1984, private respondents as plaintiffs, filed a
complaint for nullification of deed of donation, rescission of
contract and reconveyance of real property with damages against
petitioners Florencio and Soledad C. Ignao and the Roman
Catholic Bishop of Imus, Cavite, together with the Roman Catholic
Archbishop of Manila, before the Regional Trial Court, Branch XX,
Imus, Cavite and which was docketed as Civil Case No. 095-84
therein. 3
In their complaint, private respondents alleged that on August 23,
1930, the spouses Eusebio de Castro and Martina Rieta, now both
deceased, executed a deed of donation in favor of therein
defendant Roman Catholic Archbishop of Manila covering a parcel
of land (Lot No. 626, Cadastral Survey of Kawit), located at Kawit,
Cavite, containing an area of 964 square meters, more or less. The
deed of donation allegedly provides that the donee shall not
dispose or sell the property within a period of one hundred (100)
years from the execution of the deed of donation, otherwise a
violation of such condition would render ipso facto null and void
the deed of donation and the property would revert to the estate of
the donors.
It is further alleged that on or about June 30, 1980, and while still
within the prohibitive period to dispose of the property, petitioner
Roman Catholic Bishop of Imus, in whose administration all
properties within the province of Cavite owned by the Archdiocese
of Manila was allegedly transferred on April 26, 1962, executed a
deed of absolute sale of the property subject of the donation in
favor of petitioners Florencio and Soledad C. Ignao in
consideration of the sum of P114,000.00. As a consequence of the
sale, Transfer Certificate of Title No. 115990 was issued by the
Register of Deeds of Cavite on November 15, 1980 in the name of
said petitioner spouses.
What transpired thereafter is narrated by respondent court in its
assailed decision. 4 On December 17, 1984, petitioners Florencio
Ignao and Soledad C. Ignao filed a motion to dismiss based on the
grounds that (1) herein private respondents, as plaintiffs therein,
have no legal capacity to sue; and (2) the complaint states no
cause of action.
On December 19, 1984, petitioner Roman Catholic Bishop of Imus
also filed a motion to dismiss on three (3) grounds, the first two (2)
grounds of which were identical to that of the motion to dismiss
filed by the Ignao spouses, and the third ground being that the
cause of action has prescribed.
On January 9, 1985, the Roman Catholic Archbishop of Manila
likewise filed a motion to dismiss on the ground that he is not a
real party in interest and, therefore, the complaint does not state a
cause of action against him.
After private respondents had filed their oppositions to the said
motions to dismiss and the petitioners had countered with their
respective replies, with rejoinders thereto by private respondents,
the trial court issued an order dated January 31, 1985, dismissing
the complaint on the ground that the cause of action has
prescribed. 5
Private respondents thereafter appealed to the Court of Appeals
raising the issues on (a) whether or not the action for rescission of
contracts (deed of donation and deed of sale) has prescribed; and
(b) whether or not the dismissal of the action for rescission of
contracts (deed of donation and deed of sale) on the ground of
prescription carries with it the dismissal of the main action for
reconveyance of real property. 6
On December 23, 1986, respondent Court of Appeals, holding that
the action has not yet prescribed, rendered a decision in favor of
private respondents, with the following dispositive portion: Cdpr
"WHEREFORE, the Order of January 31, 1985 dismissing
appellants' complaint is SET ASIDE and Civil Case No. 095-84 is
hereby ordered REINSTATED and REMANDED to the lower court
for further proceedings. No costs." 7
Petitioners Ignao and the Roman Catholic Bishop of Imus then
filed their separate motions for reconsideration which were denied
by respondent Court of Appeals in its resolution dated February 6,
1987, 8 a hence, the filing of these appeals by certiorari.
It is the contention of petitioners that the cause of action of herein
private respondents has already prescribed, invoking Article 764
of the Civil Code which provides that "(t)he donation shall be
revoked at the instance of the donor, when the donee fails to
comply with any of the conditions which the former imposed upon
the latter," and that "(t)his action shall prescribe after four years
from the non-compliance with the condition, may be transmitted to
the heirs of the donor, and may be exercised against the donee's
heirs."
We do not agree.
Although it is true that under Article 764 of the Civil Code an action
for the revocation of a donation must be brought within four (4)
years from the non-compliance of the conditions of the donation,
the same is not applicable in the case at bar. The deed of donation
involved herein expressly provides for automatic reversion of the
property donated in case of violation of the condition therein,
hence a judicial declaration revoking the same is not necessary.
As aptly stated by the Court of Appeals:
"By the very express provision in the deed of donation itself that
the violation of the condition thereof would render ipso facto null
and void the deed of donation, WE are of the opinion that there
would be no legal necessity anymore to have the donation
judicially declared null and void for the reason that the very deed
of donation itself declares it so. For where (sic) it otherwise and
that the donors and the donee contemplated a court action during
the execution of the deed of donation to have the donation
judicially rescinded or declared null and void should the condition
be violated, then the phrase reading 'would render ipso facto null
and void' would not appear in the deed of donation." 9
In support of its aforesaid position, respondent court relied on the
rule that a judicial action for rescission of a contract is not
necessary where the contract provides that it may be revoked and
cancelled for violation of any of its terms and conditions. 10 It
called attention to the holding that there is nothing in the law that
prohibits the parties from entering into an agreement that a
violation of the terms of the contract would cause its cancellation
even without court intervention, and that it is not always necessary
for the injured party to resort to court for rescission of the
contract. 11 It reiterated the doctrine that a judicial action is proper
only when there is absence of a special provision granting the
power of cancellation. 12
It is true that the aforesaid rules were applied to the contracts
involved therein, but we see no reason why the same should not
apply to the donation in the present case. Article 732 of the Civil
Code provides that donations inter vivos shall be governed by the
general provisions on contracts and obligations in all that is not
determined in Title III, Book III on donations. Now, said Title III
does not have an explicit provision on the matter of a donation with
a resolutory condition and which is subject to an express provision
that the same shall be considered ipso facto revoked upon the
breach of said resolutory condition imposed in the deed therefor,
as is the case of the deed presently in question. The suppletory
application of the foregoing doctrinal rulings to the present
controversy is consequently justified.
The validity of such a stipulation in the deed of donation providing
for the automatic reversion of the donated property to the donor
upon non-compliance of the condition was upheld in the recent
case of De Luna, et al. vs. Abrigo, et al. 13 It was held therein that
said stipulation is in the nature of an agreement granting a party
the right to rescind a contract unilaterally m case of breach, without
need of going to court, and that, upon the happening of the
resolutory condition or non-compliance with the conditions of the
contract, the donation is automatically revoked without need of a
judicial declaration to that effect. While what was the subject of
that case was an onerous donation which, under Article 733 of the
Civil Code is governed by the rules on contracts, since the
donation in the case at bar is also subject to the same rules
because of its provision on automatic revocation upon the violation
of a resolutory condition, from parity of reasons said
pronouncements in De Luna pertinently apply. prcd
The rationale for the foregoing is that in contracts providing for
automatic revocation, judical intervention is necessary not for
purposes of obtaining a judicial declaration rescinding a contract
already deemed rescinded by virtue of an agreement providing for
rescission even without judicial intervention, but in order to
determine whether or not the rescission was proper. 14
When a deed of donation, as in this case, expressly provides for
automatic revocation and reversion of the property donated, the
rules on contract and the general rules on prescription should
apply, and not Article 764 of the Civil Code. Since Article 1306 of
said Code authorizes the parties to a contract to establish such
stipulations, clauses, terms and conditions not contrary to law,
morals, good customs, public order or public policy, we are of the
opinion that, at the very least, that stipulation of the parties
providing for automatic revocation of the deed of donation, without
prior judicial action for that purpose, is valid subject to the
determination of the propriety of the rescission sought. Where
such propriety is sustained, the decision of the court will be merely
declaratory of the revocation, but it is not in itself the revocatory
act.
On the foregoing ratiocinations, the Court of Appeals committed
no error in holding that the cause of action of herein private
respondents has not yet prescribed since an action to enforce a
written contract prescribes in ten (10) years. 15 It is our view that
Article 764 was intended to provide a judicial remedy in case of
non-fulfillment or contravention of conditions specified in the deed
of donation if and when the parties have not agreed on the
automatic revocation of such donation upon the occurrence of the
contingency contemplated therein. That is not the situation in the
case at bar.
Nonetheless, we find that although the action filed by private
respondents may not be dismissed by reason of prescription, the
same should be dismissed on the ground that private respondents
have no cause of action against petitioners.
The cause of action of private respondents is based on the alleged
breach by petitioners of the resolutory condition in the deed of
donation that the property donated should not be sold within a
period of one hundred (100) years from the date of execution of
the deed of donation. Said condition, in our opinion, constitutes an
undue restriction on the rights arising from ownership of petitioners
and is, therefore, contrary to public policy.
Donation, as a mode of acquiring ownership, results in an effective
transfer of title over the property from the donor to the donee. Once
a donation is accepted, the donee becomes the absolute owner of
the property donated. Although the donor may impose certain
conditions in the deed of donation, the same must not be contrary
to law, morals, good customs, public order and public policy. The
condition imposed in the deed of donation in the case before us
constitutes a patently unreasonable and undue restriction on the
right of the donee to dispose of the property donated, which right
is an indispensable attribute of ownership. Such a prohibition
against alienation, in order to be valid, must not be perpetual or for
an unreasonable period of time.
Certain provisions of the Civil Code illustrative of the aforesaid
policy may be considered applicable by analogy. Under the third
paragraph of Article 494, a donor or testator may prohibit partition
for a period which shall not exceed twenty (20) years. Article 870,
on its part, declares that the dispositions of the testator declaring
all or part of the estate inalienable for more than twenty (20) years
are void. LLphil
It is significant that the provisions therein regarding a testator also
necessarily involve, in the main, the devolution of property by
gratuitous title hence, as is generally the case of donations, being
an act of liberality, the imposition of an unreasonable period of
prohibition to alienate the property should be deemed anathema
to the basic and actual intent of either the donor or testator. For
that reason, the regulatory arm of the law is or must be interposed
to prevent an unreasonable departure from the normative policy
expressed in the aforesaid Articles 494 and 870 of the Code.
In the case at bar, we hold that the prohibition in the deed of
donation against the alienation of the property for an entire
century, being an unreasonable emasculation and denial of an
integral attribute of ownership, should be declared as an illegal or
impossible condition within the contemplation of Article 727 of the
Civil Code. Consequently, as specifically stated in said statutory
provision, such condition shall be considered as not imposed. No
reliance may accordingly be placed on said prohibitory paragraph
in the deed of donation. The net result is that, absent said
proscription, the deed of sale supposedly constitutive of the cause
of action for the nullification of the deed of donation is not in truth
violative of the latter hence, for lack of cause of action, the case
for private respondents must fail.
It may be argued that the validity of such prohibitory provision in
the deed of donation was not specifically put in issue in the
pleadings of the parties. That may be true, but such oversight or
inaction does not prevent this Court from passing upon and
resolving the same.
It will readily be noted that the provision in the deed of donation
against alienation of the land for one hundred (100) years was the
very basis for the action to nullify the deed of donation. At the same
time, it was likewise the controverted fundament of the motion to
dismiss the case a quo, which motion was sustained by the trial
court and set aside by respondent court, both on the issue of
prescription. That ruling of respondent court interpreting said
provision was assigned as an error in the present petition. While
the issue of the validity of the same provision was not squarely
raised, it is ineluctably related to petitioner's aforesaid assignment
of error since both issues are grounded on and refer to the very
same provision. cdphil
This Court is clothed with ample authority to review matters, even
if they are not assigned as errors on appeal, if it finds that their
consideration is necessary in arriving at a just decision of the
case. 16 Thus, we have held that an unassigned error closely
related to an error properly assigned, 17 or upon which the
determination of the question properly assigned is dependent, will
be considered by the appellate court notwithstanding the failure to
assign it as error. 18
Additionally, we have laid down the rule that the remand of the
case to the lower court for further reception of evidence is not
necessary where the Court is in a position to resolve the dispute
based on the records before it. On many occasions, the Court, in
the public interest and for the expeditious administration of justice,
has resolved actions on the merits instead of remanding them to
the trial court for further proceedings, such as where the ends of
justice, would not be subserved by the remand of the case. 19 The
aforestated considerations obtain in and apply to the present case
with respect to the matter of the validity of the resolutory condition
in question.
WHEREFORE, the judgment of respondent court is SET ASIDE
and another judgment is hereby rendered DISMISSING Civil Case
No. 095-84 of the Regional Trial Court, Branch XX, Imus, Cavite.
SO ORDERED.
||| (Roman Catholic Archbishop v. Court of Appeals, G.R. No.
77425, 77450, [June 19, 1991], 275 PHIL 332-345)
Eduarte v. Court of Appeals 253 SCRA 391
THIRD DIVISION
[G.R. No. 105944. February 9, 1996.]
SPOUSES ROMULO AND SALLY EDUARTE, petitioners, vs.
THE HONORABLE COURT OF APPEALS and PEDRO
CALAPINE (substituted by ALEXANDER CALAPINE and
ARTEMIS CALAPINE), respondents.
Makalintal Barot Torres & Ibarra for petitioners.
Roberto E. Gomez for private respondents.
SYLLABUS
1. CIVIL LAW; OBLIGATIONS AND CONTRACTS; DONATION;
REVOCATION; ALL CRIMES WHICH OFFEND THE DONOR
SHOW INGRATITUDE AND CAUSES REVOCATION. As
noted in Tolentino's Commentaries and Jurisprudence on the Civil
Code on paragraph (1) of Article 765 "all crimes which offend the
donor show ingratitude and are causes for revocation." Petitioners'
attempt to categorize the offenses according to their classification
under the Revised Penal Code is therefore unwarranted
considering that illegal detention, threats and coercion are
considered as crimes against the person of the donor despite the
fact that they are classified as crimes against personal liberty and
security under the Revised Penal Code.
2. REMEDIAL LAW; EVIDENCE; WEIGHT AND SUFFICIENCY;
TESTIMONY OF NBI HANDWRITING EXPERT GIVEN MORE
WEIGHT AND CREDENCE THAN THE
TESTIMONY OF EXPERT FROM THE PC CRIME
LABORATORY WHERE THE FORMER WAS COMPLETE,
THOROUGH AND SCIENTIFIC.
Respondent Court of Appeals and the trial court cannot be faulted
for giving more weight and credence to the testimony of the NBI
handwriting expert considering that the examination of the said
witness proved to be complete, thorough and scientific.
Confronted with contradicting testimonies from two handwriting
experts, the trial court and respondent Court of Appeals were
convinced by the opinion of the NBI handwriting expert as it was
more exhaustive, in contrast with the testimony of petitioners'
witness from the PCCL which was discarded on account of the
several flaws. At the same time, petitioners' witness failed to rebut
the convincing testimony of the NBI handwriting expert presented
by private respondents. We therefore find no reason to deviate
from the assailed conclusions as the same are amply supported
by the evidence on record.
3. CIVIL LAW; LAND TITLES AND DEED; TORRENS
SYSTEM OF LAND REGISTRATION; POSSESSION CANNOT
DEFEAT TITLE. The rule is well-settled that mere possession
cannot defeat the title of a holder of a registered torrens title to real
property. Moreover, reliance on the doctrine that a forged deed
can legally be the root of a valid title is squarely in point in this
case.
4. ID.; ID.; ID.; CASE AT BAR. When herein petitioner
purchased the subject property from Helen Doria, the same was
already covered by TCT No. T-23205 under the latter's name. And
although Helen Doria's title was fraudulently secured, such fact
cannot prejudice the rights of herein petitioners absent any
showing that they had any knowledge or participation in such
irregularity. Thus, they cannot be obliged to look beyond the
certificate of title which appeared to be valid on its face and sans
any annotation or notice ofprivate respondents' adverse claim.
5. ID.; OBLIGATIONS AND CONTRACTS; SALE; PURCHASER
DEEMED IN GOOD FAITH WHERE DISPUTED PROPERTY
WAS BOUGHT WITHOUT NOTICE THAT SOME OTHER
PERSON HAS A RIGHT OR INTEREST IN SUCH PROPERTY.
Contrary therefore to the conclusion of respondent Court,
petitioners are purchasers in good faith and for value as they
bought the disputed property without notice that some other
person has a right or interest in such property, and paid a full price
for the same at the time of the purchase or before they had
notice of the claim or interest of some other person in the property.
6. ID.; ID.; ID.; INNOCENT PURCHASER FOR VALUE MUST BE
RESPECTED AND PROTECTED DESPITE FRAUD EMPLOYED
BY THE SELLER IN SECURING HIS TITLE.
Respondent Court therefore committed a reversible error when it
affirmed the ruling of the trial court annulling and setting aside the
deed of absolute sale dated March 25, 1988 between petitioners
and Helen Doria, as well as the Transfer Certificate of Title No. T-
27434 issued under petitioners' name, the established rule being
that the rights of an innocent purchaser for value must be
respected and protected notwithstanding the fraud employed by
the seller in securing his title. RHLY
7. REMEDIAL LAW; ACTIONS; ACTION FOR DAMAGES
AGAINST THE TREASURER OF THE PHILIPPINES, PROPER
REMEDY OF TRUE OWNER OF PROPERTY FRAUDULENTLY
DISPOSSESSED OF THE SAME. In this regard, it has been
held that the proper recourse of the true owner of the property who
was prejudiced and fraudulently dispossessed of the same is to
bring an action for damages against those who caused or
employed the fraud, and if the latter are insolvent, an action
against the Treasurer of the Philippines may be filed for
recovery of damages against the Assurance Fund.
8. ID.; ID.; APPEALS; PERSON WHO FRAUDULENTLY
ACQUIRED TITLE OVER DISPUTED PROPERTY ADJUDGED
LIABLE FOR DAMAGES TO TRUE OWNERS. Conformably
with the foregoing, having established beyond doubt that Helen
Doria fraudulently secured her title over the disputed property
which she subsequently sold to petitioners, Helen Doria should
instead be adjudged liable to private respondents, and not to
petitioners as declared by the trial court and
respondent Court of Appeals, for the resulting damages to the true
owner and original plaintiff, Pedro Calapine.
DECISION
FRANCISCO, J p:
A donation is an act of liberality whereby a person disposes
gratuitously of a thing or right in favor of another, who accepts
it. 1 On the part of the donor, it is an exercise of one's generosity.
However, on several occasions, instead of being accorded
recognition and appreciation for this act of beneficence, the donor
ends up as a victim of greed and ingratitude. This was the fate that
befell Pedro Calapine (herein original plaintiff) constraining him to
cause the revocation of the donation that he made to his niece in
1984. The instant petition for certiorari is interposed by the
spouses Romulo and Sally Eduarte, assailing the
decision of the Court of Appeals in CA-G.R. CV No. 29175 which
affirmed the revocation of the donation made by Pedro Calapine
to his niece, Helen Doria, and at the same time declared
petitioners as purchasers in bad faith of the property donated.
As set out in the appealed decision, the undisputed facts are as
follows:
"Pedro Calapine was the registered owner of a parcel of land
located in San Cristobal, San Pablo City, with an area of 12,199
square meters, as evidenced by Original Certificate ofTitle No. P-
2129 (Exhibits A and 1). On April 26, 1984, he executed a deed
entitled 'Pagbibigay-Pala (Donacion Inter-Vivos)' ceding one-half
portion thereof to his niece Helen S. Doria (Exhibit B).
"On July 26, 1984, another deed identically entitled was
purportedly executed by Pedro Calapine ceding unto Helen S.
Doria the whole of the parcel of land covered by OCT No. P-2129
(Exhibits C and D), on the basis of which said original certificate
was cancelled and in lieu thereof Transfer Certificate of Title No.
T-23205 was issued in her name (Exhibits G and 2).
"On February 26, 1986, Helen S. Doria donated a portion of 157
square meters of the parcel of land covered by TCT No. T-23205
to the Calauan Christian Reformed Church, Inc. (Exhibit H), on the
basis of which said transfer certificate of title was cancelled and
TCT No. T-24444 was issued in its name covering 157 square
meters (Exhibit 2-A) and TCT No. T-24445, in the name of Helen
S. Doria covering the remaining portion of 12,042 square meters
(Exhibit 3).
"On March 25, 1988, Helen S. Doria sold, transferred and
conveyed unto the spouses Romulo and Sally Eduarte the
parcel of land covered by TCT No. T-24445, save the
portion of700 square meters on which the vendor's house had
been erected (Exhibits 1 and 3-F), on the basis of which TCT No.
24445 was cancelled and in lieu thereof TCT No. T-27434, issued
in the name of the vendees (Exhibit 4).
"Claiming that his signature to the deed of donation (Exhibits C
and D) was a forgery and that she was unworthy of his liberality,
Pedro Calapine brought suit against Helen S. Doria, the Calauan
Christian Reformed Church, Inc. and the spouses Romulo and
Sally Eduarte to revoke the donation made in favor of Helen S.
Doria (Exhibit B), to declare null and void the
deeds of donation and sale that she had executed in favor of the
Calauan Christian Reformed Church, Inc. and the spouses
Romulo and Sally Eduarte (Exhibits H, l and 3-F) and to cancel
TCT Nos. T-24444, 24445 and T-27434.
"Answering the complaint, the defendants spouses denied
knowledge of the first deed of donation and alleged that after a
part of the property was donated to the defendant Calauan
Christian Reformed Church, Inc., the remaining portion thereof
was sold to them by the defendant Helen S. Doria; and that the
plaintiff's purported signature in the second deed of donation was
his own, hence genuine. They prayed that the complaint against
them be dismissed; that upon their counterclaim, the plaintiff be
ordered to pay them moral and exemplary damages and attorney's
fees; and that upon their cross-claim the defendant Helen S. Doria
be ordered to reimburse them the purchase price ofP110,000 and
to pay them moral and exemplary damages and attorney's fees
(pp. 23-31, rec.).
"The defendant Calauan Christian Reformed Church, Inc.
manifested in its answer the willingness to reconvey to the plaintiff
that part of the property donated to it by Helen S. Doria (pp. 36-38,
rec.). And having executed the corresponding
deed of reconveyance, the case as against it was dismissed (pp.
81-83; 84, rec.).
"The defendants Helen S. Doria and the City Assessor and the
Registrar of Deeds of San Pablo City did not file answers to the
plaintiff's complaint.
"After the plaintiff's death on August 27, 1989, on motion, he was
substituted by his nephews Alexander and Artemis Calapine upon
order of the Court (pp. 147-152; 250, rec.).
"After trial, the Regional Trial Court, Fourth Judicial Region,
Branch 30, San Pablo City rendered judgment, the dispositive
part of which provides:
WHEREFORE, premises considered, judgment is hereby
rendered by the Court in the instant case in favor of plaintiff and
against defendant Eduartes to wit:
1. DECLARING as it is hereby declared, the revocation of the
Deed of Donation dated April 26, 1984;
2. ANNULLING, voiding, setting aside and declaring of no force
and effect the Deed of Donation dated July 26, 1984, the
deed of absolute sale executed on March 25, 1988 by and
between spouses Eduartes and Helen Doria, and the Transfer
Certificate of Title No. T-27434 issued under the name of spouses
Romulo and Sally Eduarte;
3. ORDERING the office of the Register of Deeds, San Pablo City,
to cancel TCT No. T-27434 or any other adverse title emanating
from OCT No. P-2129 and in lieu thereof, to issue a new transfer
certificate of title covering the subject property under the
names of the substitute-plaintiffs Alexander and Artemis both
surnamed Calapine, after payment of the corresponding fees and
taxes therefor; and
4. ORDERING defendant Helen Doria to pay substitute-plaintiffs
the sum of P20,000.00 as and for attorney's fees.
Judgment on the cross-claim of defendant Eduartes against Helen
Doria is further rendered by ordering the latter to pay the former
the sum of P110,000.00 with legal interest thereon starting from
March 25, 1988 until full payment, and the further
sum of P20,000.00 as and for attorney's fees.
The counterclaim of defendant Eduartes against plaintiff is hereby
dismissed for lack of merit.
Costs against defendant Helen Doria in both the complaint and the
cross-claim (pp. 11-12, decision, pp. 264-265, rec.).
"Only the defendants Eduarte spouses took an appeal (p. 266,
rec.), claiming that the trial court erred
1. In annulling, voiding, setting aside, and declaring of no force
and effect
(a) the deed of donation (Exhibit C and 1-A), dated July 26, 1984;
(b) the deed of absolute sale (Exhibit 1 and 3-E) executed on
March 25, 1988 by and between Spouses Eduartes and Helen
Doria;
(c) TCT No. T-27434 (Exhibit 4) issued in the name of spouses
Romulo Eduarte and Sally Eduarte; and
in revoking the deed of donation (Exhibit B) dated April 26, 1984;
2. In declaring the appellants Eduartes buyers in bad faith;
3. In not finding the plaintiffs guilty of estoppel by silence and/or
guilty of suppression of evidence instead of finding the appellants
Eduartes guilty of suppression ofevidence; and
4. In finding that the signature of Pedro Calapine in the
deed of donation (Exhibits C and 1-A) dated July 26, 1984 a
forgery based on the opposite findings of the handwriting experts
presented by each party and in the absence of the
testimony of Pedro Calapine who was then still alive (pp. 1-2,
appellants' brief.)" 2
In its decision dated April 22,
1992, 3 respondent Court of Appeals dismissed petitioners'
appeal and affirmed the decision of the trial court.
Respondent court was in complete accord with the trial court in
giving more credence to the testimony of private respondents'
expert witness, NBI document examiner Bienvenido Albacea, who
found Pedro Calapine's signature in the second
deed of donation to be a forgery. It also ruled that by falsifying
Pedro Calapine's signature, Helen Doria committed an
act of ingratitude which is a valid ground for
revocation of the donation made in her favor in accordance with
Article 765 of the Civil Code. Furthermore,
respondent court upheld the trial court's finding that petitioners are
not buyers in good faith of the donated property as they failed to
exercise due diligence in verifying the true ownership of the
property despite the existence ofcircumstances that should have
aroused their suspicions. cdll
Petitioners are now before us taking exception to the foregoing
findings of respondent Court of Appeals and contending that the
same are not in accord with the law and evidence on record.
Anent the revocation of the first deed of donation, petitioners
submit that paragraph (1) of Article 765 of the Civil Code does not
apply in this case because the acts of ingratitude referred to
therein pertain to offenses committed by the donee against the
person or property of the donor. Petitioners argue that as the
offense imputed to herein donee Helen Doria falsification of a
public document is neither a crime against the person nor
property of the donor but is a crime against public interest under
the Revised Penal Code, the same is not a ground for revocation.
In support of this contention, petitioners cite the following portions
found in Tolentino's Commentaries and Jurisprudence on the Civil
Code:
"Offense against Donor . . . . The crimes against the
person of the donor would include not only homicide and physical
injuries, but also illegal detention, threats and coercion; and those
against honor include offenses against chastity and those against
the property, include robbery, theft, usurpation, swindling, arson,
damages, etc. (5 Manresa 175-176)." 4
This assertion, however, deserves scant consideration. The full
text of the very same commentary cited by petitioners belies their
claim that falsification of the deed of donation is not an
act of ingratitude, to wit:
"Offense Against Donor. All crimes which offend the donor
show ingratitude and are causes for revocation. There is no doubt,
therefore, that the donee who commits adultery with the wife of the
donor, gives cause for revocation by reason of ingratitude. The
crimes against the person of the donor would include not only
homicide and physical injuries, but also illegal detention, threats,
and coercion; those against honor include offenses against
chastity; and those against the property, include robbery, theft,
usurpation, swindling, arson, damages, etc. [Manresa 175-
176]." 5 (Emphasis supplied).
Obviously, the first sentence was deleted by petitioners because it
totally controverts their contention. As noted in the aforecited
opinion "all crimes which offend the donor show ingratitude and
are causes for revocation." Petitioners' attempt to categorize the
offenses according to their classification under the Revised Penal
Code is therefore unwarranted considering that illegal detention,
threats and coercion are considered as crimes against the
person of the donor despite the fact that they are classified as
crimes against personal liberty and security under the Revised
Penal Code. 6
Petitioners also impute grave error to
respondent Court of Appeals in finding that the second
deed of donation dated July 26, 1984 was falsified. Petitioners
deplore the fact that more credence was given to the
testimony of the NBI handwriting expert who found Pedro
Calapine's signature in the second deed of donation to be a
forgery despite the existence of controverting testimony by PC-
INP Crime Laboratory (PCCL) Chief Document Examiner which
petitioners adduced as evidence on their part.
We are not persuaded. Respondent Court of Appeals and the
trial court cannot be faulted for giving more weight and credence
to the testimony of the NBI handwriting expert considering that the
examination of the said witness proved to be complete, thorough
and scientific.
In gauging the relative weight to be given to the
opinion of handwriting experts, we adhere to the following
standards:
"We have held that the value of the opinion of a handwriting expert
depends not upon his mere statements of whether a writing is
genuine or false, but upon the assistance he may afford in pointing
out distinguishing marks, characteristics and discrepancies in and
between genuine and false specimens of writing which would
ordinarily escape notice or detection from an unpracticed
observer. The test of genuineness ought to be the resemblance,
not the formation of letters in some other specimens but to the
general character of writing, which is impressed on it as the
involuntary and unconscious result of constitution, habit or other
permanent course, and is, therefore itself permanent." 7
Confronted with contradicting testimonies from two handwriting
experts, the trial court and respondent Court of Appeals were
convinced by the opinion of the NBI handwriting expert as it was
more exhaustive, in contrast with the testimony of petitioners'
witness from the PCCL which was discarded on account of the
following flaws:
"The Court is not convinced with Cruz's explanations. Apart from
the visual inconsistencies, i.e., the strokes with which some letters
were made, the variety in the sizes of the letters, the depth, the
difference in the slant which the Court itself observed in its own
examination of both the questioned signatures and those standard
specimen signatures, there is evidence showing that Cruz did not
make a thorough examination of all the signatures involved in this
particular issue. Thus even in the report submitted by the PCCL it
was admitted that they omitted or overlooked the examination of at
least three (3) standard specimen signatures of Pedro Calapine
which were previously subject of the NBI examination marked as
Exhibits S-9, S-10 and S-11. When questioned regarding this
oversight, Cruz testified that in his opinion, the inclusion or non-
inclusion of said exhibits in their examination will not affect the
same and they would have arrived at the same conclusion
anyway. Again, when asked why they did not bother to have the
original copies ofthe documents being questioned (Exhs. Q-1
through Q-3) for their examination, Cruz replied that they are using
a special film so it will not matter whether the documents being
examined are the original or a mere photocopy (TSN 8, 10, 12 and
26, Hearing of Nov. 23, 1989).
"The Court will not attempt to make its own conclusion or
resolution on such a technical issue as the matter at hand in the
light of the cavalier attitude of Cruz. In fine, between the
examinations made by the two witnesses, that of Albacea's proved
to be complete, thorough and scientific and is worthy of credence
and belief." 8
The afore-quoted findings confirm beyond doubt the
failure of petitioners' expert witness to satisfy the above-
mentioned criteria for evaluating the opinion of handwriting
experts. At the same time, petitioners' witness failed to rebut the
convincing testimony of the NBI handwriting expert presented by
private respondents. We therefore find no reason to deviate from
the assailed conclusions as the same are amply supported by the
evidence on record.
Finally, proceeding to the crucial issue that directly affects herein
petitioners, it is reiterated that petitioners are buyers in good
faith of the donated property, and therefore, it was grave error to
annul and set aside the deed of sale executed between petitioners
and donee Helen Doria.
In adjudging petitioners as buyers in bad faith,
respondent Court of Appeals affirmed the trial court's finding that
the attendant circumstances, that is, the presence of other
occupants as well as houses built of strong materials and fruit
bearing trees in the subject land, should have aroused the
suspicion of petitioners and impelled them to exercise due
diligence in verifying the true ownership of the property being sold.
Petitioners dispute the lower court's conclusion and argue that
although there were other occupants in the subject property, no
adverse claim was made by the latter as they were mere tenants
therein, thus, petitioners were not obliged to make any further
inquiry because the property being sold was covered by a
certificate of title under Helen Doria's name.
We agree with petitioners. The rule is well-settled that mere
possession cannot defeat the title of a holder of a registered
torrens title to real property. 9 Moreover, reliance on the doctrine
that a forged deed can legally be the root of a valid title is squarely
in point in this case:
"Although generally a forged or fraudulent deed is a nullity and
conveys no title, however there are instances when such a
fraudulent document may become the root of a valid title. One
such instance is where the certificate of title was already
transferred from the name of the true owner to the forger, and
while it remained that way, the land was subsequently sold to an
innocent purchaser. For then, the vendee had the right to rely upon
what appeared in the certificate.
"Where there was nothing in the certificate of title to indicate any
cloud or vice in the ownership of the property, or any encumbrance
thereon, the purchaser is not required to explore further than what
the Torrens Title upon its face indicates in quest for any hidden
defect or inchoate right that may subsequently defeat his right
thereto. If the rule were otherwise, the efficacy and
conclusiveness of the certificate of title which the Torrens System
seeks to insure would entirely be futile and nugatory." 10
When herein petitioners purchased the subject property from
Helen Doria, the same was already covered by TCT No. T-23205
under the latter's name. And although Helen Doria's title was
fraudulently secured, such fact cannot prejudice the
rights of herein petitioners absent any showing that they had any
knowledge or participation in such irregularity. Thus, they cannot
be obliged to look beyond the certificate of title which appeared to
be valid on its face and sans any annotation or notice of private
respondents' adverse claim. Contrary therefore to the
conclusion of respondent Court, petitioners are purchasers in
good faith and for value as they bought the disputed property
without notice that some other person has a right or interest in such
property, and paid a full price for the same at the time of the
purchase or before they had notice of the claim or interest of some
other person in the property. 11
Respondent Court therefore committed a reversible error when it
affirmed the ruling of the trial court annulling and setting aside the
deed of absolute sale dated March 25, 1988 between petitioners
and Helen Doria, as well as the Transfer Certificate of Title No. T-
27434 issued under petitioners' name, the established rule being
that the rights of an innocent purchaser for value must be
respected and protected notwithstanding the fraud employed by
the seller in securing his title. 12
In this regard, it has been held that the proper recourse of the true
owner of the property who was prejudiced and fraudulently
dispossessed of the same is to bring an action for damages
against those who caused or employed the fraud, and if the latter
are insolvent, an action against the Treasurer of the Philippines
may be filed for recovery of damages against the Assurance
Fund. 13
Conformably with the foregoing, having established beyond doubt
that Helen Doria fraudulently secured her title over the disputed
property which she subsequently sold to petitioners, Helen Doria
should instead be adjudged liable to private respondents, and not
to petitioners as declared by the trial court and
respondent Court of Appeals, for the resulting damages to the true
owner and original plaintiff, Pedro Calapine.
ACCORDINGLY, the petition is GRANTED and the appealed
decision is hereby MODIFIED. The portions of the decision of the
Regional Trial Court of San Pablo City, Branch 30, as affirmed by
the Court of Appeals in CA-G.R. CV No. 29175 which ordered the
following:
"xxx xxx xxx
"2. ANNULLING, voiding, setting aside and declaring of no force
and effect . . . , the deed of absolute sale executed on March 25,
1988 by and between spouses Eduartes and Helen Doria, and the
Transfer Certificate of Title No T-27434 issued under the
name of spouses Romulo and Sally Eduarte;
"3. ORDERING the office of the Register of Deeds, San Pablo
City, to cancel TCT No. T-27434 or any other adverse title
emanating from OCT No. P-2129 and in lieu thereof, to issue a
new transfer certificate of title covering the subject property under
the names of the substitute-plaintiffs Alexander and Artemis both
surnamed Calapine, after payment of the corresponding fees and
taxes therefor; and
"4 . . .
"Judgment on the cross-claim of defendant Eduartes against
Helen Doria is further rendered by ordering the latter to pay the
former the sum of P110,000.00 with legal interest thereon starting
from March 25, 1988 until full payment, . . ."
are hereby REVERSED and SET ASIDE.
Instead, Helen Doria is hereby ordered to pay herein private
respondents the sum of P110,000.00 with legal interest counted
from March 25, 1988 until full payment, as damages for the
resulting loss to original plaintiff Pedro Calapine.
In all other respects, the appealed decision is hereby
affirmed. LLpr
SO ORDERED.
||| (Spouses Eduarte v. Court of Appeals, G.R. No. 105944,
[February 9, 1996], 323 PHIL 462-478)
Quilala v. Alacntara 371 SCRA 311
Hemedes v. Court of Appeals 316 SCRA 347
8. ID.; PROPERTY; MODE OF ACQUIRING OWNERSHIP;
DONATION; CONSIDERED VOID WHERE THE PURPORTED
OBJECT THEREOF DID NOT EXIST AT TIME OF TRANSFER.
In upholding the deed of conveyance in favor of Maxima
Hemedes, we must concomitantly rule that Enrique D. Hemedes
and his transferee, Dominium, did not acquire any rights over the
subject property. Justa Kausapin sought to transfer to her stepson
exactly what she had earlier transferred to Maxima Hemedes
the ownership of the subject property pursuant to the first condition
stipulated in the deed of donation executed by her husband. Thus,
the donation in favor of Enrique D. Hemedes is null and void for
the purported object thereof did not exist at the time of the transfer,
having already been transferred to his sister. Similarly, the sale of
the subject property by Enrique D. Hemedes to Dominium is also
a nullity for the latter cannot acquire more rights than its
predecessor-in-interest and is definitely not an innocent purchaser
for value since Enrique D. Hemedes did not present any certificate
of title upon which it relied.||| (Hemedes v. Court of Appeals, G.R.
No. 107132, 108472, [October 8, 1999], 374 PHIL 692-733)
Siguan v. Lim 318 SCRA 725
FIRST DIVISION
[G.R. No. 134685. November 19, 1999.]
MARIA ANTONIA SIGUAN, petitioner, vs. ROSA LIM, LINDE
LIM, INGRID LIM and NEIL LIM, respondents.
Florido & Associates for petitioner.
Zosa & Quijano Law Offices for respondents.
SYNOPSIS
Respondent Rosa was charged by petitioner with two counts of
violation of Batas Pambansa Blg. 22 for issuing checks, in the total
amount of P541,668, dishonored by the bank for the reason of
"account closed." The conviction was affirmed by the Court of
Appeals and is now pending review with this Court. Petitioner,
thereafter filed action pauliana against respondent Rosa to
rescind, the notarized deed of donation over 4 parcels of land
Rosa executed in favor of her three children, the other
respondents. Petitioner claimed that there was fraudulent transfer
leaving no sufficient properties to pay her obligations with her and
that the deed of donation was not antedated. During the hearing
of the case, petitioner presented evidence on Rosa's civil liability
to one Victoria Suarez in the amount of P169,000. For her
defense, Rosa denied liability and the alleged antedating of the
deed. The trial court rendered judgment in favor of petitioner,
ordered the rescission of the contract and declared the titles in the
name of Rosa's children null and void. On appeal, the Court of
Appeals reversed the trial court and dismissed the action pauliana.
It ruled that the deed of donation was not fraudulent transfer as
respondent debtor Rosa still owns 4 parcels of land sufficient to
cover her debts to petitioner, that the notarized deed of donation,
a public document in the absence of convincing evidence that the
notary and the parties antedated the instrument, is evidence of the
fact that gave rise to its execution and of the date thereof.
Petitioner's motion for reconsideration having been denied she
resorted to this recourse.
The Supreme Court held that contracts undertaken in fraud of
creditors are rescissible when the latter cannot in any other
manner collect the claims due them; that rescission is but a
subsidiary remedy which cannot be instituted except when the
party suffering damage has no other legal means to obtain
reparation for the same. In the case at bar, respondent Rosa has
4 other real properties, hence, the presumption of fraud will not
come into play; and that a party cannot invoke the credit of others
to justify rescission of the deed of donation.
SYLLABUS
1. REMEDIAL LAW; EVIDENCE; FINDINGS OF FACT OF
COURT OF APPEALS GENERALLY CONCLUSIVE ON APPEAL;
EXCEPTION. The rule is well settled that the jurisdiction of this
Court in cases brought before it from the Court of Appeals via Rule
45 of the Rules of Court is limited to reviewing errors of law.
Findings of fact of the latter court are conclusive, except in a
number of instances. In the case at bar, one of the recognized
exceptions warranting a review by this Court of the factual findings
of the Court of Appeals exists, to wit, the factual findings and
conclusions of the lower court and Court of Appeals are conflicting,
especially on the issue of whether the Deed of Donation in
question was in fraud of creditors. HTIEaS
2. ID.; ACTIONS; ACCION PAULIANA; REQUISITE FOR
ACTION TO PROSPER. The action to rescind contracts in
fraud of creditors is known as accion pauliana. For this action to
prosper, the following requisites must be present: (1) the plaintiff
asking for rescission has a credit prior to the alienation, although
demandable later; (2) the debtor has made a subsequent contract
conveying a patrimonial benefit to a third person; (3) the creditor
has no other legal remedy to satisfy his claim; (4) the act being
impugned is fraudulent; (5) the third person who received the
property conveyed, if it is by onerous title, has been an accomplice
in the fraud.
3. ID.; ID.; ID.; CREDIT MUST EXIST PRIOR TO FRAUDULENT
ALIENATION. The general rule is that rescission requires the
existence of creditors at the time of the alleged fraudulent
alienation, and this must be proved as one of the bases of the
judicial pronouncement setting aside the contract. Without any
prior existing debt, there can neither be injury nor fraud. While it is
necessary that the credit of the plaintiff in the accion pauliana must
exist prior to the fraudulent alienation, the date of the judgment
enforcing it is immaterial. Even if the judgment be subsequent to
the alienation, it is merely declaratory, with retroactive effect to the
date when the credit was constituted.
4. ID.; ID.; ID.; ID.; ALLEGED ANTEDATING OF DOCUMENT
NOT PROVED BY LATE REGISTRATION OF ACKNOWLEDGED
DOCUMENT. In the instant case, the alleged debt of LIM in
favor of petitioner was incurred in August 1990, while the deed of
donation was purportedly executed on 10 August 1989. We are
not convinced with the allegation of the petitioner that the
questioned deed was antedated to make it appear that it was
made prior to petitioner's credit. Notably, that deed is a public
document, it having been acknowledged before a notary public. As
such, it is evidence of the fact which gave rise to its execution and
of its date, pursuant to Section 23, Rule 132 of the Rules of Court.
In the present case, the fact that the questioned Deed was
registered only on 2 July 1991 is not enough to overcome the
presumption as to the truthfulness of the statement of the date in
the questioned deed, which is 10 August 1989. Petitioner's claim
against LIM was constituted only in August 1990, or a year after
the questioned alienation. Thus, the first two requisites for the
rescission of contracts are absent.
5. ID.; ID.; ID.; CREDITOR CANNOT IN ANY MANNER COLLECT
CLAIM. Even assuming arguendo that petitioner became a
creditor of LIM prior to the celebration of the contract of donation,
still her action for rescission would not fare well because the third
requisite was not met. Under Article 1381 of the Civil Code,
contracts entered into in fraud of creditors may be rescinded only
when the creditors cannot in any manner collect the claims due
them. Also, Article 1383 of the same Code provides that the action
for rescission is but a subsidiary remedy which cannot be instituted
except when the party suffering damage has no other legal means
to obtain reparation for the same. The term "subsidiary remedy"
has been defined as "the exhaustion of all remedies by the
prejudiced creditor to collect claims due him before rescission is
resorted to." It is, therefore, "essential that the party asking for
rescission prove that he has exhausted all other legal means to
obtain satisfaction of his claim. Petitioner neither alleged nor
proved that she did so. On this score, her action for the rescission
of the questioned deed is not maintainable even if the fraud
charged actually did exist.
6. ID.; ID.; ID.; DEBTOR DID NOT RESERVE SUFFICIENT
PROPERTY TO PAY DEBT PRIOR TO DONATION. The fourth
requisite for an accion pauliana to prosper is not present either.
Article 1387, first paragraph, of the Civil Code provides: "All
contracts by virtue of which the debtor alienates property by
gratuitous title are presumed to have been entered into in fraud of
creditors when the donor did not reserve sufficient property to pay
all debts contracted before the donation." Likewise, Article 759 of
the same Code, second paragraph, states that the donation is
always presumed to be in fraud of creditors when at the time
thereof the donor did not reserve sufficient property to pay his
debts prior to the donation. For this presumption of fraud to apply,
it must be established that the donor did not leave adequate
properties which creditors might have recourse for the collection
of their credits existing before the execution of the donation. As
earlier discussed, petitioner's alleged credit existed only a year
after the deed of donation was executed. She cannot, therefore,
be said to have been prejudiced or defrauded by such alienation.
7. ID.; ID.; ID.; BADGES OF FRAUD. Nevertheless, a creditor
need not depend solely upon the presumption laid down in Articles
759 and 1387 of the Civil Code. Under the third paragraph of
Article 1387, the design to defraud may be proved in any other
manner recognized by the law of evidence. Thus in the
consideration of whether certain transfers are fraudulent, the Court
has laid down specific rules by which the character of the
transaction may be determined. The following have been
denominated by the Court as badges of fraud: (1) The fact that the
consideration of the conveyance is fictitious or is inadequate; (2)
A transfer made by a debtor after suit has begun and while it is
pending against him; (3) A sale upon credit by an insolvent debtor;
(4) Evidence of large indebtedness or complete insolvency; (5)
The transfer of all or nearly all of his property by a debtor,
especially when he is insolvent or greatly embarrassed financially;
(6) The fact that the transfer is made between father and son,
when there are present other of the above circumstances; and (7)
The failure of the vendee to take exclusive possession of all the
property. The above enumeration, however, is not an exclusive
list. The circumstances evidencing fraud are as varied as the men
who perpetrate the fraud in each case. This Court has therefore
declined to define it, reserving the liberty to deal with it under
whatever form it may present itself.
8. ID.; ID.; ID.; RESCISSION SHALL ONLY BE TO EXTENT OF
CREDITOR'S UNSATISFIED CREDIT. It should be noted that
the complainant in that case, Victoria Suarez, albeit a creditor prior
to the questioned alienation, is not a party to this accion pauliana.
Article 1384 of the Civil Code provides that rescission shall only be
to the extent necessary to cover the damages caused. Under this
Article, only the creditor who brought the action for rescission can
benefit from the rescission; those who are strangers to the action
cannot benefit from its effects. And the revocation is only to the
extent of the plaintiff creditors unsatisfied credit; as to the excess,
the alienation is maintained. Thus, petitioner cannot invoke the
credit of Suarez to justify rescission of the subject deed of
donation.
9. CIVIL LAW; DAMAGES; MORAL DAMAGES, ATTORNEY'S
FEES AND EXPENSES OF LITIGATION; AWARD DELETED
FOR WANT OF BASIS IN FACT, LAW OR EQUITY. Now on
the propriety of the trial court's awards of moral damages,
attorney's fees and expenses of litigation in favor of the petitioner.
We have pored over the records and found no factual or legal basis
therefor. The trial court made these awards in the dispositive
portion of its decision without stating, however, any justification for
the same in the ratio decidendi. Hence, the Court of Appeals
correctly deleted these awards for want of basis in fact, law or
equity.
DECISION
DAVIDE, JR., C.J p:
May the Deed of Donation executed by respondent Rosa Lim
(hereafter LIM) in favor of her children be rescinded for being in
fraud of her alleged creditor, petitioner Maria Antonia Siguan? This
is the pivotal issue to be resolved in this petition for review
on certiorari under Rule 45 of the Revised Rules of Court. LibLex
The relevant facts, as borne out of the records, are as follows:
On 25 and 26 August 1990, LIM issued two Metrobank checks in
the sums of P300,000 and P241,668, respectively, payable to
"cash." Upon presentment by petitioner with the drawee bank, the
checks were dishonored for the reason "account closed."
Demands to make good the checks proved futile. As a
consequence, a criminal case for violation of Batas Pambansa
Blg. 22, docketed as Criminal Cases Nos. 22127-28, were filed by
petitioner against LIM with Branch 23 of the Regional Trial Court
(RTC) of Cebu City. In its decision 1 dated 29 December 1992, the
court a quo convicted LIM as charged. The case is pending before
this Court for review and docketed as G.R. No. 134685.
It also appears that on 31 July 1990 LIM was convicted of estafa
by the RTC of Quezon City in Criminal Case No. Q-89-2216 2 filed
by a certain Victoria Suarez. This decision was affirmed by the
Court of Appeals. On appeal, however, this Court, in a
decision 3 promulgated on 7 April 1997, acquitted LIM but held her
civilly liable in the amount of P169,000, as actual damages, plus
legal interest.
Meanwhile, on 2 July 1991, a Deed of Donation 4 conveying the
following parcels of land and purportedly executed by LIM on 10
August 1989 in favor of her children, Linde, Ingrid and Neil, was
registered with the Office of the Register of Deeds of Cebu City:
(1) a parcel of land situated at Barrio Lahug, Cebu City, containing
an area of 563 sq. m. and covered by TCT No. 93433;
(2) a parcel of land situated at Barrio Lahug, Cebu City, containing
an area of 600 sq. m. and covered by TCT No. 93434;
(3) a parcel of land situated at Cebu City containing an area of 368
sq. m. and covered by TCT No. 87019; and
(4) a parcel of land situated at Cebu City, Cebu containing an area
of 511 sq. m. and covered by TCT No. 87020.
New transfer certificates of title were thereafter issued in the
names of the donees. 5
On 23 June 1993, petitioner filed an accion pauliana against LIM
and her children before Branch 18 of the RTC of Cebu City to
rescind the questioned Deed of Donation and to declare as null
and void the new transfer certificates of title issued for the lots
covered by the questioned Deed. The complaint was docketed as
Civil Case No. CEB-14181. Petitioner claimed therein that
sometime in July 1991, LIM, through a Deed of Donation,
fraudulently transferred all her real property to her children in bad
faith and in fraud of creditors, including her; that LIM conspired and
confederated with her children in antedating the questioned Deed
of Donation, to petitioner's and other creditors' prejudice; and that
LIM, at the time of the fraudulent conveyance, left no sufficient
properties to pay her obligations.
On the other hand, LIM denied any liability to petitioner. She
claimed that her convictions in Criminal Cases Nos. 22127-28
were erroneous, which was the reason why she appealed said
decision to the Court of Appeals. As regards the questioned Deed
of Donation, she maintained that it was not antedated but was
made in good faith at a time when she had sufficient property.
Finally, she alleged that the Deed of Donation was registered only
on 2 July 1991 because she was seriously ill.
In its decision of 31 December 1994, 6 the trial court ordered the
rescission of the questioned deed of donation; (2) declared null
and void the transfer certificates of title issued in the names of
private respondents Linde, Ingrid and Neil Lim; (3) ordered the
Register of Deeds of Cebu City to cancel said titles and to reinstate
the previous titles in the name of Rosa Lim; and (4) directed the
LIMs to pay the petitioner, jointly and severally, the sum of
P10,000 as moral damages; P10,000 as attorney's fees; and
P5,000 as expenses of litigation.
On appeal, the Court of Appeals, in a decision 7 promulgated on
20 February 1998, reversed the decision of the trial court and
dismissed petitioner's accion pauliana. It held that two of the
requisites for filing an accion pauliana were absent, namely, (1)
there must be a credit existing prior to the celebration of the
contract; and (2) there must be a fraud, or at least the intent to
commit fraud, to the prejudice of the creditor seeking the
rescission.
According to the Court of Appeals, the Deed of Donation, which
was executed and acknowledged before a notary public, appears
on its face to have been executed on 10 August 1989. Under
Section 23 of Rule 132 of the Rules of Court, the questioned Deed,
being a public document, is evidence of the fact which gave rise to
its execution and of the date thereof. No antedating of the Deed of
Donation was made, there being no convincing evidence on record
to indicate that the notary public and the parties did antedate it.
Since LIM's indebtedness to petitioner was incurred in August
1990, or a year after the execution of the Deed of Donation, the
first requirement for accion pauliana was not met.
Anent petitioner's contention that assuming that the Deed of
Donation was not antedated it was nevertheless in fraud of
creditors because Victoria Suarez became LIM's creditor on 8
October 1987, the Court of Appeals found the same untenable, for
the rule is basic that the fraud must prejudice the creditor seeking
the rescission. cdll
Her motion for reconsideration having been denied, petitioner
came to this Court and submits the following issue:
WHETHER OR NOT THE DEED OF DONATION, EXH. 1, WAS
ENTERED INTO IN FRAUD OF [THE] CREDITORS OF
RESPONDENT ROSA [LIM].
Petitioner argues that the finding of the Court of Appeals that the
Deed of Donation was not in fraud of creditors is contrary to well-
settled jurisprudence laid down by this Court as early as 1912 in
the case of Oria v. McMicking, 8 which enumerated the various
circumstances indicating the existence of fraud in a transaction.
She reiterates her arguments below, and adds that another fact
found by the trial court and admitted by the parties but untouched
by the Court of Appeals is the existence of a prior final judgment
against LIM in Criminal Case No. Q-89-2216 declaring Victoria
Suarez as LIM's judgment creditor before the execution of the
Deed of Donation.
Petitioner further argues that the Court of Appeals incorrectly
applied or interpreted Section 23, 9 Rule 132 of the Rules of Court,
in holding that "being a public document, the said deed of donation
is evidence of the fact which gave rise to its execution and of the
date of the latter." Said provision should be read with Section
30 10 of the same Rule which provides that notarial documents
are prima facie evidence of their execution, not "of the facts which
gave rise to their execution and of the date of the latter."
Finally, petitioner avers that the Court of Appeals overlooked
Article 759 of the New Civil Code, which provides: "The donation
is always presumed to be in fraud of creditors when at the time of
the execution thereof the donor did not reserve sufficient property
to pay his debts prior to the donation." In this case, LIM made no
reservation of sufficient property to pay her creditors prior to the
execution of the Deed of Donation.
On the other hand, respondents argue that (a) having agreed on
the law and requisites of accion pauliana, petitioner cannot take
shelter under a different law; (b) petitioner cannot invoke the credit
of Victoria Suarez, who is not a party to this case, to support
her accion pauliana; (c) the Court of Appeals correctly applied or
interpreted Section 23 of Rule 132 of the Rules of Court; (d)
petitioner failed to present convincing evidence that the Deed of
Donation was antedated and executed in fraud of petitioner; and
(e) the Court of Appeals correctly struck down the awards of
damages, attorney's fees and expenses of litigation because there
is no factual basis therefor in the body of the trial court's decision.
The primordial issue for resolution is whether the questioned Deed
of Donation was made in fraud of petitioner and, therefore,
rescissible. A corollary issue is whether the awards of damages,
attorney's fees and expenses of litigation are proper.
We resolve these issues in the negative.
The rule is well settled that the jurisdiction of this Court in cases
brought before it from the Court of Appeals via Rule 45 of the Rules
of Court is limited to reviewing errors of law. Findings of fact of the
latter court are conclusive, except in a number of instances. 11 In
the case at bar, one of the recognized exceptions warranting a
review by this Court of the factual findings of the Court of Appeals
exists, to wit, the factual findings and conclusions of the lower
court and Court of Appeals are conflicting, especially on the issue
of whether the Deed of Donation in question was in fraud of
creditors.
Article 1381 of the Civil Code enumerates the contracts which are
rescissible, and among them are "those contracts undertaken in
fraud of creditors when the latter cannot in any other manner
collect the claims due them."
The action to rescind contracts in fraud of creditors is known
as accion pauliana. For this action to prosper, the following
requisites must be present: (1) the plaintiff asking for rescission
has a credit prior to the alienation, 12 although demandable later;
(2) the debtor has made a subsequent contract conveying a
patrimonial benefit to a third person; (3) the creditor has no other
legal remedy to satisfy his claim; 13 (4) the act being impugned is
fraudulent; 14 (5) the third person who received the property
conveyed, if it is by onerous title, has been an accomplice in the
fraud. 15
The general rule is that rescission requires the existence of
creditors at the time of the alleged fraudulent alienation, and this
must be proved as one of the bases of the judicial pronouncement
setting aside the contract. 16 Without any prior existing debt, there
can neither be injury nor fraud. While it is necessary that the credit
of the plaintiff in the accion pauliana must exist prior to the
fraudulent alienation, the date of the judgment enforcing it is
immaterial. Even if the judgment be subsequent to the alienation,
it is merely declaratory, with retroactive effect to the date when the
credit was constituted. 17
In the instant case, the alleged debt of LIM in favor of petitioner
was incurred in August 1990, while the deed of donation was
purportedly executed on 10 August 1989.
We are not convinced with the allegation of the petitioner that the
questioned deed was antedated to make it appear that it was
made prior to petitioner's credit. Notably, that deed is a public
document, it having been acknowledged before a notary
public. 18 As such, it is evidence of the fact which gave rise to its
execution and of its date, pursuant to Section 23, Rule 132 of the
Rules of Court.
Petitioner's contention that the public documents referred to in said
Section 23 are only those entries in public records made in the
performance of a duty by a public officer does not hold
water. Section 23 reads:
SEC. 23. Public documents as evidence. Documents consisting
of entries in public records made in the performance of a duty by
a public officer are prima facie evidence of the facts therein
stated. All other public documents are evidence, even against a
third person, of the fact which gave rise to their execution and of
the date of the latter. (Emphasis supplied).
The phrase "all other public documents" in the second sentence of
Section 23 means those public documents other than the entries
in public records made in the performance of a duty by a public
officer. And these include notarial documents, like the subject
deed of donation. Section 19, Rule 132 of the Rules of Court
provides:
SEC. 19. Classes of documents. For the purpose of their
presentation in evidence, documents are either public or private.
Public documents are:
(a) . . .
(b) Documents acknowledged before a notary public except last
wills and testaments. . . .
It bears repeating that notarial documents, except last wills and
testaments, are public documents and are evidence of the facts
that gave rise to their execution and of their date.
In the present case, the fact that the questioned Deed was
registered only on 2 July 1991 is not enough to overcome the
presumption as to the truthfulness of the statement of the date in
the questioned deed, which is 10 August 1989. Petitioner's claim
against LIM was constituted only in August 1990, or a year after
the questioned alienation. Thus, the first two requisites for the
rescission of contracts are absent.
Even assuming arguendo that petitioner became a creditor of LIM
prior to the celebration of the contract of donation, still her action
for rescission would not fare well because the third requisite was
not met. Under Article 1381 of the Civil Code, contracts entered
into in fraud of creditors may be rescinded only when the creditors
cannot in any manner collect the claims due them. Also, Article
1383 of the same Code provides that the action for rescission is
but a subsidiary remedy which cannot be instituted except when
the party suffering damage has no other legal means to obtain
reparation for the same. The term "subsidiary remedy" has been
defined as "the exhaustion of all remedies by the prejudiced
creditor to collect claims due him before rescission is resorted
to." 19 It is, therefore, essential that the party asking for rescission
prove that he has exhausted all other legal means to obtain
satisfaction of his claim. 20 Petitioner neither alleged nor proved
that she did so. On this score, her action for the rescission of the
questioned deed is not maintainable even if the fraud charged
actually did exist." 21
The fourth requisite for an accion pauliana to prosper is not
present either.
Article 1387, first paragraph, of the Civil Code provides: "All
contracts by virtue of which the debtor alienates property by
gratuitous title are presumed to have been entered into in fraud of
creditors when the donor did not reserve sufficient property to pay
all debts contracted before the donation. Likewise, Article 759 of
the same Code, second paragraph, states that the donation is
always presumed to be in fraud of creditors when at the time
thereof the donor did not reserve sufficient property to pay his
debts prior to the donation. prcd
For this presumption of fraud to apply, it must be established that
the donor did not leave adequate properties which creditors might
have recourse for the collection of their credits existing before the
execution of the donation.
As earlier discussed, petitioner's alleged credit existed only a year
after the deed of donation was executed. She cannot, therefore,
be said to have been prejudiced or defrauded by such alienation.
Besides, the evidence disclose that as of 10 August 1989, when
the deed of donation was executed, LIM had the following
properties:
(1) A parcel of land containing an area of 220 square meters,
together with the house constructed thereon, situated in Sto. Nio
Village, Mandaue City, Cebu, registered in the name of Rosa Lim
and covered by TCT No. 19706; 22
(2) A parcel of land located in Benros Subdivision, Lawa-an,
Talisay, Cebu; 23
(3) A parcel of land containing an area of 2.152 hectares, with
coconut trees thereon, situated at Hindag-an, St. Bernard,
Southern Leyte, and covered by Tax Declaration No. 13572. 24
(4) A parcel of land containing an area of 3.6 hectares, with
coconut trees thereon, situated at Hindag-an, St. Bernard,
Southern Leyte, and covered by Tax Declaration No. 13571. 25
During her cross-examination, LIM declared that the house and lot
mentioned in no. 1 was bought by her in the amount of about
P800,000 to P900,000. 26 Thus:
ATTY. FLORIDO:
Q These properties at the Sto. Nio Village, how much did you
acquire this property?
A Including the residential house P800,000.00 to P900,000.00.
Q How about the lot which includes the house. How much was the
price in the Deed of Sale of the house and lot at Sto. Nio Violage
[sic]?
A I forgot.
Q How much did you pay for it?
A That is P800,000.00 to P900,000.00.
Petitioner did not adduce any evidence that the price of said
property was lower. Anent the property in no. 2, LIM testified that
she sold it in 1990. 27 As to the properties in nos. 3 and 4, the total
market value stated in the tax declarations dated 23 November
1993 was P56,871.60. Aside from these tax declarations,
petitioner did not present evidence that would indicate the actual
market value of said properties. It was not, therefore, sufficiently
established that the properties left behind by LIM were not
sufficient to cover her debts existing before the donation was
made. Hence, the presumption of fraud will not come into play.
Nevertheless, a creditor need not depend solely upon the
presumption laid down in Articles 759 and 1387 of the Civil Code.
Under the third paragraph of Article 1387, the design to defraud
may be proved in any other manner recognized by the law of
evidence. Thus in the consideration of whether certain transfers
are fraudulent, the Court has laid down specific rules by which the
character of the transaction may be determined. The following
have been denominated by the Court as badges of fraud:
(1) The fact that the consideration of the conveyance is fictitious
or is inadequate;
(2) A transfer made by a debtor after suit has begun and while it is
pending against him;
(3) A sale upon credit by an insolvent debtor;
(4) Evidence of large indebtedness or complete insolvency;
(5) The transfer of all or nearly all of his property by a debtor,
especially when he is insolvent or greatly embarrassed financially;
(6) The fact that the transfer is made between father and son,
when there are present other of the above circumstances; and
(7) The failure of the vendee to take exclusive possession of all
the property. 28
The above enumeration, however, is not an exclusive list. The
circumstances evidencing fraud are as varied as the men who
perpetrate the fraud in each case. This Court has therefore
declined to define it, reserving the liberty to deal with it under
whatever form it may present itself. 29
Petitioner failed to discharge the burden of proving any of the
circumstances enumerated above or any other circumstance from
which fraud can be inferred. Accordingly, since the four
requirements for the rescission of a gratuitous contract are not
present in this case, petitioner's action must fail.
In her further attempt to support her action for rescission, petitioner
brings to our attention the 31 July 1990 Decision 30 of the RTC of
Quezon City, Branch 92, in Criminal Case No. Q-89-2216. LIM
was therein held guilty of estafa and was ordered to pay
complainant Victoria Suarez the sum of P169,000 for the
obligation LIM incurred on 8 October 1987. This decision was
affirmed by the Court of Appeals. Upon appeal, however, this
Court acquitted LIM of estafa but held her civilly liable for P169,000
as actual damages.
It should be noted that the complainant in that case, Victoria
Suarez, albeit a creditor prior to the questioned alienation, is not a
party to this accion pauliana. Article 1384 of the Civil Code
provides that rescission shall only be to the extent necessary to
cover the damages caused. Under this Article, only the creditor
who brought the action for rescission can benefit from the
rescission; those who are strangers to the action cannot benefit
from its effects. 31 And the revocation is only to the extent of the
plaintiff creditor's unsatisfied credit; as to the excess, the alienation
is maintained. 32 Thus, petitioner cannot invoke the credit of
Suarez to justify rescission of the subject deed of donation.
Now on the propriety of the trial court's awards of moral damages,
attorney's fees and expenses of litigation in favor of the petitioner.
We have pored over the records and found no factual or legal basis
therefor. The trial court made these awards in the dispositive
portion of its decision without stating, however, any justification for
the same in the ratio decidendi. Hence, the Court of Appeals
correctly deleted these awards for want of basis in fact, law or
equity.
WHEREFORE, the petition is hereby DISMISSED and the
challenged decision of the Court of Appeals in CA-G.R. CV. No.
50091 is AFFIRMED in toto. cda
No pronouncement as to costs.
SO ORDERED.
||| (Siguan v. Lim, G.R. No. 134685, [November 19, 1999], 376
PHIL 840-857)
Noceda v. Court of Appeals 316 SCRA 504
THIRD DIVISION
[G.R. No. 119730. September 2, 1999.]
RODOLFO NOCEDA, petitioner, vs. COURT OF APPEALS and
AURORA ARBIZO DIRECTO, respondents.
Eufracio Segundo C. Pagunuran for petitioner.
Edano, Amog and Associates Law Office for private respondent.
SYNOPSIS
On June 1, 1981, Aurora Directo, Rodolfo Noceda and Maria
Arbizo extrajudicially settled a parcel of land. On the same date,
Directo donated 625 square meters of her share to Noceda, who
is her nephew being the son of her deceased sister, Carolina. On
August 17, 1981, the same parties executed another extrajudicial-
settlement partition of the same lot. Three fifths of the said land
went to Arbizo while Directo and Noceda got only one-fifth each.
Sometime in 1981, Noceda constructed a house on the land
donated to him by Directo. Directo fenced the portion allotted to
her in the extrajudicial settlement, excluding the donated lot and
constructed thereon 3 huts. However, in 1985, Noceda removed
the fence earlier constructed by Directo and occupied the 3 huts
and fenced the entire lot of Directo without her consent. Directo
demanded from Noceda to vacate her land, but the latter refused.
Directo filed a complaint for recovery of possession and
rescission/annulment of donation, against Noceda before the
trial court. The trial court rendered a decision in favor of Directo.
The trial court ordered Noceda to vacate and reconvey the
property to Directo. The trial court also declared the extrajudicial
settlement dated August 17, 1981 valid and revoked the
Deed of Donation dated June 1, 1981. Noceda appealed to
the Court of Appeals which affirmed the trial court. Hence, the
present petition. IDaCcS
The Supreme Court denied the petition and affirmed the
decision of both the trial court and the Court of Appeals.
The Court ruled that petitioner's act of occupying the portion
pertaining to private respondent Directo without the latter's
knowledge is an act of usurpation which is an offense against
property of the donor and considered as an act ofingratitude of a
donee against the donor. The law does not require
conviction of the donee, it is enough that the offense be proved in
the action for revocation. With regard to the
contention of petitioner Noceda that the right to enforce the
revocation of the donation had already prescribed, the Court was
not persuaded. The Court ruled that while the complaint for
revocation was filed more than one (1) year from the alleged
usurpation by petitioner of private respondent's share in the
subject lot, no competent proof was adduced by petitioner to prove
his allegation. The action to revoke by reason of ingratitude
prescribes within one (1) year to be counted from the time (a) the
donor had knowledge of the fact; (b) provided that it was possible
for him to bring the action. It is incumbent upon petitioner to show
proof of the concurrence of these two condition in order that the
one (1) year period for bringing the action be considered to have
already prescribed. According to the Court, no competent proof
was adduced by petitioner to prove his allegation
The Court stressed that in civil cases, the party having the
burden of proof must establish his case by
preponderance of evidence and he who alleges a fact has the
burden of proving it and a mere allegation is not evidence.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; PARTIES TO CIVIL
ACTIONS; A PARTY IS NOT INDISPENSABLE TO THE SUIT IF
HIS INTEREST IN THE CONTROVERSY OR SUBJECT MATTER
IS DISTINCT AND DIVISIBLE FROM THE INTEREST OF THE
OTHER PARTIES AND WILL NOT NECESSARILY BE
PREJUDICED BY A JUDGMENT WHICH DOES NOT
COMPLETE JUSTICE TO THE PARTIES. Notably, defendant's
counsel requested for the appearance of Cecilia Obispo and
despite notice to her to appear in court and bring with her the
alleged free patent in her name, she failed to appear and even
failed to intervene to protect whatever interest and right she has
over the subject lot. As to the other possessors of residential
houses in Lot 8 of Lot 1121, they are not considered as
indispensable parties to this case. A party is not indispensable to
the suit if his interest in the controversy or subject matter is distinct
and divisible from the interest of the other parties and will not
necessarily be prejudiced by a judgment which does complete
justice to the parties in court. Private respondent is not claiming
the entire area of Lot 1121 but only a portion thereof which was
adjudicated to her based on the August 17, 1981 extrajudicial
settlement and which was denominated in the survey plan as Lot
C of Lot 1121; thus there was no need to implead the
occupants of Lot 8. ATcaID
2. CIVIL LAW; SUCCESSION; EFFECT OF PARTITION ON
PROPERTY OWNED IN COMMON. In this case the
source of co-ownership among the heirs was intestate
succession. Where there are two or more heirs, the whole
estate of the decedent is, before its partition, owned in common by
such heirs subject to the payment of debts of the deceased.
Partition, in general, is the separation, division and
assignment of a thing held in common among those to whom it
may belong. The purpose of partition is to put an end to co-
ownership. It seeks a severance of the individual interest of each
co-owner vesting in each a sole estate in specific property and
giving to each one a right to enjoy his estate without supervision
or interference from the other. And one way of effecting a
partition of the decedent's estate is by the heirs themselves
extrajudicially. The heirs of the late Celestino Arbizo namely Maria
Arbizo, Aurora A. Directo (private respondent) and
Rodolfo Noceda (petitioner) entered into an extrajudicial
settlement of the estate on August 17, 1981 and agreed to
adjudicate among themselves the property left by their
predecessor-in-interest. Thus, the areas allotted to each heir are
now specifically delineated in the survey plan. There is no co-
ownership where portion owned is correctly determined and
identifiable, though not technically described, or that said portions
are still embraced in one and the same certificate of title does not
make said portions less determinable or identifiable, or
distinguishable, one from the other, nor that dominion over each
portion less exclusive, in their respective owners. A partition legally
made confers upon each heir the exclusive ownership of the
property adjudicated to him.
3. ID.; MODES OF ACQUIRING OWNERSHIP; DONATION;
GROUNDS FOR REVOCATION; PETITIONER'S
ACT OF OCCUPYING THE PORTION PERTAINING TO
ONE OF THE PRIVATE RESPONDENTS WITHOUT THE
LATTER'S KNOWLEDGE AND CONTEST IS AN
ACT OF USURPATION WHICH IS AN OFFENSE AGAINST
PROPERTY OF THE DONOR AND CONSIDERED AS AN
ACT OF INGRATITUDE OF A DONEE AGAINST THE DONOR.
We also find unmeritorious petitioner's argument that since
there was no effective and real partition of the subject lot there
exist no basis for the charge of usurpation and hence there is also
no basis for finding ingratitude against him. It was established that
petitioner Noceda occupied not only the portion donated to him by
private respondent Aurora Arbizo-Directo but he also fenced the
whole area of Lot C which belongs to private respondent Directo,
thus petitioner's act of occupying the portion pertaining to private
respondent Directo without the latter's knowledge and consent is
an act of usurpation which is an offense against the property of the
donor and considered as an act of ingratitude of a donee against
the donor. The law does not require conviction of the donee; it is
enough that the offense be proved in the action for
revocation. CITSAc
4. ID.; ID.; ID.; ID.; ACTION TO REVOKE DONATION HAS NOT
YET PRESCRIBED. The action to revoke by
reason of ingratitude prescribes within one (1) year to be counted
from the time (a) the donor had knowledge of the fact; (b) provided
that it was possible for him to bring the action. It is incumbent upon
petitioner to show proof of the concurrence ofthese two conditions
in order that the one (1) year period for bringing the action be
considered to have already prescribed. No competent proof was
adduced by petitioner to prove his allegation. In Civil Cases, the
party having burden of proof must establish his case by
preponderance of evidence. He who alleges a fact has the
burden of proving it and a mere allegation is not evidence.
DECISION
GONZAGA-REYES, J p:
This petition for review on certiorari under Rule 45 of the
Rules of Court seeks to reverse the decision dated March 31,
1995 of the respondent Court of Appeals 1 in CA GR CV No.
38126, affirming with modification the decision of the Regional
Trial Court, Branch 71, of Iba, Zambales, 2 in an action by private
respondent against petitioner for recovery ofpossession and
ownership and rescission/annulment of donation.
The facts of the case as summarized by the respondent Court are
as follows: 3
"On June 1, 1981, plaintiff Aurora Directo, defendant
Rodolfo Noceda, and Maria Arbizo, the daughter, grandson, and
widow, respectively, of the late Celestino Arbizo, who died in 1956,
extrajudicially settled a parcel of land, Lot 1121, located at Bitaog,
San Isidro, Cabangan, Zambales, which was said to have an
area of 66,530 square meters. Plaintiff Directo's share was 11,426
square meters, defendant Noceda got 13,294 square meters, and
the remaining 41,810 square meters went to Maria Arbizo (Exhibit
G). On the same date, plaintiff Directo donated 625 square
meters of her share to defendant Noceda, who is her nephew
being the son of her deceased sister, Carolina (Exhibit D).
However, on August 17, 1981, another extrajudicial settlement-
partition of Lot 1121 was executed by plaintiff Directo,
defendant Noceda, and Maria Arbizo. Three fifths of the said land
went to Maria Arbizo while plaintiff Directo and
defendant Noceda got only one-fifth each. In said extrajudicial
settlement-partition as well as in the Tax Declaration 16-0032 over
Lot 1121 in the name of the late Celestino Arbizo, the said
parcel of land was said to have an area of only 29,845 square
meters (Exhibit C). Sometime in 1981,
defendant Nocedaconstructed his house on the land donated to
him by plaintiff Directo. Plaintiff Directo fenced the portion allotted
to her in the extrajudicial settlement, excluding the donated
portion, and constructed thereon three huts. But in 1985,
defendant Noceda removed the fence earlier constructed by
plaintiff Directo, occupied the three huts (3) and fenced the entire
land of plaintiff Directo without her consent. Plaintiff Directo
demanded from defendant Noceda to vacate her land, but the
latter refused. Hence, plaintiff Directo filed the present suit, a
complaint for the recovery of possession and ownership and
rescission/annulment of donation, against
defendant Noceda before the lower court. During the trial, the
lower court ordered that a relocation survey of Lot 1121 be
conducted by Engr. Edilberto Quejada of the Bureau of Lands.
After the survey of Lot 1121 in the presence ofboth parties, Engr.
Edilberto Quejada reported that the area of Lot 1121 stated in the
extrajudicial settlement-partition of August 17, 1981 was smaller
than the actual area of Lot 1121 which is 127,298 square meters.
Engr. Quejada subdivided Lot 1121, excluding the portions
occupied by third persons, known as Lot 8, the salvage zone and
the road lot, on the basis of the actual occupancy of Lot 1121 by
the heirs of the late Celestino Arbizo and the extrajudicial
settlement-partition of August 17, 1981. The portion denominated
as Lot A, with an area of 12,957 square meters was the
share of defendant Noceda; Lot C, with the same area as
that of Lot A, was the share of plaintiff Directo, a portion of which
was donated to defendant Noceda; and Lot B, with an
area of 38,872 square meters, went to Maria Arbizo (Exhibit
E)." cdphil
On November 6, 1991, the Regional Trial Court, Branch 71, of Iba,
Zambales rendered a decision, the dispositive portion of which
reads as follows: 4
"WHEREFORE, in view of the foregoing considerations,
the Court hereby renders judgment:
(a) Declaring the Extra-Judicial Settlement-Partition dated August
19, 1981, valid;
(b) Declaring the Deed of Donation dated June 1, 1981, revoked;
(c) Ordering the defendant to vacate and reconvey that donated
portion of Lot 2, Lot 1121 subject of the Deed of Donation dated
June 1, 1981 to the plaintiff or her heirs or assigns;
(d) Ordering the defendant to remove the house built inside the
donated portion at the defendant's expense or pay a monthly
rental of P300.00 Philippine Currency;
(e) Ordering the defendant to pay attorney's fees in the
amount of P5,000.00; and
(f) To pay the cost."
Rodolfo Nocedo appealed to the respondent Court which affirmed
the trial court as follows: 5
"WHEREFORE, judgment is hereby rendered, ORDERING
defendant Rodolfo Noceda to VACATE the portion known as Lot
"C" of Lot 1121 per Exhibit E, which was allotted to plaintiff Aurora
Arbizo Directo. Except for this modification, the Decision, dated
November 6, 1991, of the RTC-Iba, Zambales, Branch 71, in Civil
Case No. RTC-354-I, is hereby AFFIRMED in all other respects.
Costs against defendant Rodolfo Noceda."
Dissatisfied, petitioner filed the instant petition for review with the
following assignment of errors: 6
THE COURT OF APPEALS ERRED IN HOLDING THAT THE
SUBJECT PROPERTY IDENTIFIED AS LOT 1121 CONTAINS
AN AREA IN EXCESS OF THAT STATED IN ITS TAX
DECLARATION.
THE COURT OF APPEALS ERRED IN HOLDING THAT LOT
1121 SHOULD BE PARTITIONED IN ACCORDANCE WITH THE
EXTRA-JUDICIAL SETTLEMENT DATED 17 AUGUST 1981.
THE COURT OF APPEALS ERRED IN ADJUDICATING AND
ALLOTTING LOT "C" AS APPEARING IN THE SURVEY PLAN
PREPARED BY GEODETIC ENGINEER EDILBERTO QUEJADA
TO THE RESPONDENT.
THE COURT OF APPEALS ERRED IN FINDING THAT THE
PETITIONER USURPED AN AREA ADJUDICATED TO THE
RESPONDENT.
THE COURT OF APPEALS ERRED IN REVOKING THE
DEED OF DONATION DATED 1 JUNE 1981.
The first issue raised refers to the actual area of the subject lot
known as Lot 1121, which was registered under Tax Declaration
No. 16-0032 under the name of the late Celestino Arbizo.
Petitioner claims that Tax Declaration No. 16-0032 contains only
an area of 29,845 sq. meter; thus the respondent Court exceeded
its judicial authority when it sustained the lower court's findings
that the subject property actually contains an area of 127,289
square meters.
We find the argument unmeritorious. The records disclose that the
trial court in an Order dated June 8, 1987 gave both parties to this
case the chance to have the subject property re-surveyed by a
licensed surveyor to determine the actual area of Lot
1121. 7 Plaintiff Aurora Directo filed a motion/compliance where
she suggested that Geodetic Engineer Edilberto V. Quejada of the
Bureau of Lands, Iba, Zambales be commissioned to undertake
the survey 8 said motion was also sent to defendant's counsel,
Atty. Eufracio Pagunuran for Comment, 9 but Atty. Pagunuran
however failed to file his Comment within the given period. Thus
the trial court designated Engineer Quejada to undertake the
survey of Lot 1121. 10 Petitioner Noceda through counsel
belatedly filed his Comment without any opposition to the
appointment of Engineer Quejada but proposed that the latter be
tasked to solely (a) re-survey, determine and identify the metes
and bounds of the lot covered by Tax Declaration No. 16-0032; (b)
to identify the areas occupied by the parties therein; and (c) to
conduct the re-survey with notice and in the presence of the
parties therein and their respective counsels. 11 The Comment
was not, however, acted upon by the trial court in view of its earlier
Order directing Engineer Quejada to undertake the survey of the
land. 12 Engr. Quejada conducted the survey with the conformity
and in the presence of both parties, taking into consideration the
extrajudicial partition dated August 17, 1981, deed of donation
dated June 1, 1981 executed by plaintiff Aurora Directo in
favor of defendant Rodolfo Noceda and the actual area occupied
by the parties, 13 as well as the sketch plan 14 and the technical
description of Lot 1121 taken from the Records Section of the
Bureau of Lands, Manila. 15 The report and the survey plan
submitted by Engr. Quejada were approved by the Trial Court in
an Order dated December 7, 1987. 16 These circumstances show
that the lower court ordered the re-survey of the lot to determine
the actual area of Lot 1121 and such survey was done with the
conformity and in the presence of both parties. The actual land
area based on the survey plan which was conducted in the
presence of both parties, showed a much bigger area than the
area declared in the tax declaration but such differences are not
uncommon as early tax declarations are, more often than not,
based on approximation or estimation rather than on
computation. 17 We hold that the respondent court did not err in
sustaining the trial court's findings that the actual area of Lot 1121
is 127,289 square meters. LexLib
Petitioner also contends that said judicial determination improperly
encroaches on the rights and claims of third persons who were
never impleaded below; that the subject lot was also declared in
the name of one Cecilia Obispo and a Free Patent over the said
lot was also issued in her name and that there are several
residential houses constructed and existing on Lot 8 of lot 1121,
thus these possessors/occupants of Lot 8 should be joined as
defendants for their non-inclusion would be fatal to respondent's
cause of action.
We find no merit in this argument. The respondent Court correctly
ratiocinated on this issue as follows: 18
"The fact that Cecilia Obispo has tax declarations in her name over
Lot 1121 and several persons occupied a portion thereof did not
make them indispensable parties in the present case.
Defendant Noceda merely presented the tax declarations in the
name of Cecilia Obispo without the alleged free patent in her
name. Moreover, no evidence was presented showing that Cecilia
Obispo possessed or claimed possession of Lot 1121. Tax
receipts and declarations of ownership for tax purposes are not
conclusive evidence ofownership of property (Republic vs.
Intermediate Appellate Court, 224 SCRA 285).
It was not necessary that the occupants of a portion of Lot 1121,
designated as Lot 8, be impleaded in the present case. Lot 8,
though part of Lot 1121, was excluded by Engr. Quejada in
determining the respective portions of Lot 1121 occupied by
plaintiff Directo, defendant Noceda and Maria Arbizo pursuant to
the extrajudicial settlement which they executed on August 17,
1981. The result of the present suit shall not in any way affect the
occupants of Lot 8, since the issues involved in the present case
are the usurpation by defendant Noceda of the land adjudicated to
plaintiff Directo and the propriety of the cancellation of the
deed of donation in favor of defendant Noceda due to his
ingratitude to plaintiff Directo."
Notably, defendant's counsel requested for the
appearance of Cecilia Obispo and despite notice to her to appear
in court and bring with her the alleged free patent in her
name, 19she failed to appear and even failed to intervene to
protect whatever interest and right she has over the subject lot. As
to the other possessors of residential houses in Lot 8 of Lot 1121,
they are not considered as indispensable parties to this case. A
party is not indispensable to the suit if his interest in the
controversy or subject matter is distinct and divisible from the
interest of the other parties and will not necessarily be prejudiced
by a judgment which does complete justice to the parties
in court. 20 Private respondent is not claiming the entire
area of Lot 1121 but only a portion thereof which was adjudicated
to her based on the August 17, 1981 extrajudicial settlement and
which was denominated in the survey plan as Lot C of Lot 1121;
thus there was no need to implead the occupants of Lot 8.
Petitioner further claims that the subject property could not be
partitioned based on the extrajudicial settlement-partition dated
August 17, 1981, since the distributive share of the heirs of the
late Celestino Arbizo and the area of Lot 1121 stated therein were
different from the extrajudicial settlement executed on June 1,
1981; that the discrepancies between the two deeds of partition
with respect to the area of Lot 1121 and the respective
share of the parties therein indicated that they never intended that
any of the deeds to be the final determination of the portions of Lot
1121 allotted to them; that the extrajudicial settlement-
partition of August 17, 1981 could not effectively subdivide Lot
1121 because it partitioned only 29,845 square meters, and not its
actual area of 127,298 square meters.
We see no cogent reason to disturb the findings of the
respondent Court as follows: 21
The discrepancies between the extrajudicial settlements executed
by plaintiff Directo, defendant Noceda and Maria Arbizo on June
1, 1981 and August 17, 1981 only meant that the latter was
intended to supersede the former. The
signature of defendant Noceda in the extrajudicial
settlement of August 17, 1981 would show his conformity to the
new apportionment of Lot 1121 among the heirs of the late
Celestino Arbizo. The fact that defendant Noceda occupied the
portion allotted to him in the extrajudicial settlement, as well as the
donated portion of the share of plaintiff Directo, presupposes his
knowledge of the extent of boundaries of the portion of Lot 1121
allotted to him. Moreover, the statement in the extrajudicial
settlement of August 17, 1981 with respect to the area of Lot 1121,
which was 29,845 square meters, is not conclusive because it was
found out, after the relocation survey was conducted on Lot 1121,
that the parties therein occupied an area larger than what they
were supposed to possess per the extrajudicial settlement-
partition of August 17, 1981. llcd
Although in the extrajudicial settlement dated August 17, 1981 the
heirs of Celestino Arbizo partitioned only a 29,845 square meter
lot to conform with the area declared under tax declaration 16-
0032 yet the heirs were each actually occupying a bigger portion
the total area of which exceeded 29,845 square meters. This was
confirmed by Geodetic Engineer Quejada in his report submitted
to the trial court where he stated among other things: 22
7. that upon computation of actual survey, it is informed (sic) that
the area dated (sic) as per extrajudicial settlement-partition in the
name of Celestino Arbizo was smaller than the computed
lots of their actual occupancy as per survey on the ground;
8. The Lot A, Lot B, and Lot C as appearing on prepared plan for
ready reference was subdivided, base (sic) on stated sharing as
per EXTRA JUDICIAL SETTLEMENT-PARTITION base (sic) on
actual occupancy.
The survey conducted on Lot 1121 was only a confirmation of the
actual areas being occupied by the heirs taking into account the
percentage proportion adjudicated to each heir on the
basis of their August 17, 1981 extrajudicial settlement.
Petitioner further alleges that the said partition tries to vest in
favor of a third person, Maria Arbizo, a right over the said property
notwithstanding the absence of evidence establishing that she is
an heir of the late Celestino Arbizo since Maria Arbizo was never
impleaded as a party in this case and her interest over Lot 1121
was not established.
Such contention deserves scant consideration. We find no
compelling basis to disturb the finding of the trial court on this
factual issue, as follows: 23
In effect, the defendant denies the allegation of the plaintiff that
Maria Arbizo was the third wife of Celestino Arbizo and Agripina is
her half sister with a common father. On this point,
the Court believes the version of the plaintiff. The Court observes
that in the "Extra-Judicial Settlement-Partition" (Exhibit "C"), Maria
Arbizo is named one of the co-heirs ofthe defendant, being the
widow of his grandfather, Celestino Arbizo. The
names of Anacleto and Agripina do not also appear in the Extra-
judicial Settlement and Partition because according to the plaintiff,
they had sold their shares to Maria Arbizo. And the defendant is
one of the signatories to the said Deed of Extra-judicial
Settlement-Partition acknowledged before Notary Public Artemio
Maranon. Under the circumstances, the Court is convinced that
the defendant knew that Maria Arbizo was the widow of Celestino
Arbizo and he knew of the sale of the share of Anacleto Arbizo his
share, as well as that of Agripina. When the defendant signed the
Extra-Judicial Settlement, he was already an adult since when he
testified in 1989, he gave his age as 50 years old. So that in 1981,
he was already 41 years old. If he did not know all of these, the
defendant would have not agreed to the sharing and signed this
document and acknowledged it before the Notary Public. And who
could have a better knowledge of the relationship of Agripina and
Maria Arbizo to Celestino Arbizo than the latter's daughter?
Besides, at the time of the execution of the Extra-Judicial
Settlement-Partition by the plaintiff and defendant, they were still
in good terms. There was no reason for the plaintiff to favor Maria
Arbizo and Agripina Arbizo over the defendant. Furthermore, the
defendant had failed to support his allegation that when his
grandfather died he had no wife and child. cdphil
We likewise find unmeritorious petitioner's claim that there exist no
factual and legal basis for the adjudication of Lot C of Lot 1121 to
private respondent Aurora Directo. It bears stress that the
relocation survey plan prepared by Geodetic Engineer Quejada
was based on the extrajudicial settlement dated August 17, 1981,
and the actual possession by the parties and the technical
description of Lot 1121. It was established by the survey plan that
based on the actual possession of the parties, and the extrajudicial
settlement among the heirs the portion denominated as Lot
C of Lot 1121 of the survey plan was being occupied by private
respondent Aurora Directo and it was also shown that it is in Lot C
where the 625 square meter area donated by private respondent
Directo to petitioner is located. There is no obstacle to adjudicate
Lot C to private respondent as her rightful share allotted to her in
the extrajudicial settlement.
Petitioner argues that he did not usurp the property of respondent
Directo since, to date, the metes and bounds of the parcel of land
left by their predecessor in interest, Celestino Arbizo, are still
undetermined since no final determination as to the exact areas
properly pertaining to the parties herein; hence they are still
considered as co-owners thereof.
We do not agree.
In this case the source of co-ownership among the heirs was
intestate succession. Where there are two or more heirs, the whole
estate of the decedent is, before its partition, owned in common by
such heirs subject to the payment of debts of the
deceased. 24 Partition, in general, is the separation, division and
assignment of a thing held in common among those to whom it
may belong. 25 The purpose of partition is to put an end to co-
ownership. It seeks a severance of the individual interest of each
co-owner, vesting in each a sole estate in specific property and
giving to each one a right to enjoy his estate without supervision
or interference from the other. 26 And one way of effecting a
partition of the decedent's estate is by the heirs themselves
extrajudicially. The heirs of the late Celestino Arbizo namely Maria
Arbizo, Aurora A. Directo (private respondent) and
Rodolfo Noceda (petitioner) entered into an extrajudicial
settlement of the estate on August 17, 1981 and agreed to
adjudicate among themselves the property left by their
predecessor-in-interest in the following manner:
To Rodolfo Noceda goes the northern one-fifth (1/5) portion
containing an area of 5,989 sq. meters;
To Maria Arbizo goes the middle three-fifths (3/5) portion;
and To Aurora Arbizo goes the southern one-fifth (1/5) portion. 27
In the survey plan submitted by Engineer Quejada, the portions
indicated by red lines and numbered alphabetically were based on
the percentage proportion in the extrajudicial settlement and the
actual occupancy of each heir which resulted to these divisions as
follows: 28
Lot A; the area is 2,957 sq.m. goes to Rodolfo A. Noceda (1/5)
Lot B; 38,872 sq.m. Maria Arbizo (3/5) LLpr
Lot C; 12,957 sq.m. Aurora Arbizo (1/5)
Thus, the areas allotted to each heir are now specifically
delineated in the survey plan. There is no co-ownership where
portion owned is concretely determined and identifiable, though
not technically described, or that said portions are still embraced
in one and the same certificate of title does not make said portions
less determinable or identifiable, or distinguishable, one from the
other, nor that dominion over each portion less exclusive, in their
respective owners. 29 A partition legally made confers upon each
heir the exclusive ownership of the property adjudicated to him. 30
We also find unmeritorious petitioner's argument that since there
was no effective and real partition of the subject lot there exists no
basis for the charge of usurpation and hence there is also no basis
for finding ingratitude against him. It was established that
petitioner Noceda occupied not only the portion donated to him by
private respondent Aurora Arbizo-Directo but he also fenced the
whole area of Lot C which belongs to private respondent Directo,
thus petitioner's act of occupying the portion pertaining to private
respondent Directo without the latter's knowledge and consent is
an act of usurpation which is an offense against the property of the
donor and considered as an act of ingratitude of a donee against
the donor. 31The law does not require conviction of the donee; it
is enough that the offense be proved in the action for
revocation. 32
Finally, petitioner contends that granting revocation is proper, the
right to enforce the same had already prescribed since as admitted
by private respondent, petitioner usurped her property in the first
week of September 1985 while the complaint for revocation was
filed on September 16, 1986, thus more than one (1) year had
passed from the alleged usurpation by petitioner of private
respondent's share in Lot 1121. We are not persuaded. The
respondent Court rejected such argument in this wise:
"Article 769 of the New Civil Code states that: "The action granted
to the donor by reason of ingratitude cannot be renounced in
advance. This action prescribes within one year to be counted
from the time the donor had knowledge of the fact and it was
possible for him to bring the action." As expressly stated, the donor
must file the action to revoke his donation within one year from the
time he had knowledge of the ingratitude of the donee. Also, it
must be shown that it was possible for the donor to institute the
said action within the same period. The concurrence ofthese two
requisites must be shown by defendant Noceda in order to bar the
present action. Defendant Noceda failed to do so. He reckoned
the one year prescriptive period from the occurrence of the
usurpation of the property of plaintiff Directo in the first
week of September, 1985, and not from the time the latter had the
knowledge of the usurpation. Moreover, defendant Noceda failed
to prove that at the time plaintiff Directo acquired knowledge of his
usurpation, it was possible for plaintiff Directo to institute an action
for revocation of her donation." Cdpr
The action to revoke by reason of ingratitude prescribes within one
(1) year to be counted from the time (a) the donor had
knowledge of the fact; (b) provided that it was possible for him to
bring the action. It is incumbent upon petitioner to show
proof of the concurrence of these two conditions in order that the
one (1) year period for bringing the action be considered to have
already prescribed. No competent proof was adduced by petitioner
to prove his allegation. In Civil Cases, the party having the
burden of proof must establish his case by
preponderance of evidence. 33 He who alleges a fact has the
burden of proving it and a mere allegation is not evidence. 34
Factual findings of the Court of Appeals, supported by substantial
evidence on record are final and conclusive on the parties and
carry even more weight when the Court of Appealsaffirms the
factual findings of the trial court; 35 for it is not the
function of this Court to re-examine all over again the oral and
documentary evidence submitted by the parties unless the
findings of fact of the Court of Appeals are not supported by the
evidence on record or the judgment is based on the
misapprehension of facts. 36 The jurisdiction of this court is thus
limited to reviewing errors of law unless there is a showing that the
findings complained of are totally devoid of support in the record
or that they are so glaringly erroneous as to constitute serious
abuse of discretion. 37 We find no such showing in this case.
We find that both the trial court and the respondent Court had
carefully considered the questions of fact raised below and the
respondent Court's conclusions are based on the evidence on
record. No cogent reason exists for disturbing such
findings. 38 We also note that petitioner in this petition merely
rehashed the same issues and arguments raised in the
respondent Court in whose decision we find no reversible error.
Clearly, petitioner failed to present any substantial argument to
justify a reversal of the assailed decision.
WHEREFORE, the petition for review is hereby DENIED. Costs
against appellant.
SO ORDERED.
||| (Noceda v. Court of Appeals, G.R. No. 119730, [September 2,
1999], 372 PHIL 383-400)
Heirs of Cesario Velasquez v. Court of Appeals 325 SCRA 552
Gonzales v. Court of Appeals 358 SCRA 393
Imperial v. Court of Appeals 316 SCRA 393
THIRD DIVISION
[G.R. No. 112483. October 8, 1999.]
ELOY IMPERIAL, petitioner, vs. COURT OF APPEALS,
REGIONAL TRIAL COURT OF LEGASPI CITY, CESAR
VILLALON, JR., TERESA VILLALON, ANTONIO VILLALON,
AUGUSTO VILLALON, ROBERTO VILLALON, RICARDO
VILLALON and ESTHER VILLALON, respondents.
Joaquin "Bobby" Yuseco for petitioner.
De Leoz Madarieta & Nieva Law Offices for private respondents.
SYNOPSIS
Leoncio Imperial filed Civil Case No. 1177 to annul the donation
(evidenced by a deed of absolute sale in the amount of P1.00) of
a parcel of land to petitioner Eloy Imperial, his acknowledged
natural child. A compromise judgment was approved by the trial
court whereby Leoncio recognized the rights of petitioner over the
land while petitioner agreed to sell a portion of the lot for the benefit
of Leoncio. Leoncio, upon his death, was substituted by his
adopted son, Atty. Victor Imperial, who moved for the execution of
the compromise judgment. Victor died single, and survived by his
natural father, Ricardo Villalon, who became a lessee of a portion
of the disputed land. Five years after Ricardo's death, his 2
children, Cesar and Teresa, filed Civil Case No. 7646 for the
annulment of the donation on the ground of fraud, deceit, and
inofficiousness as Leoncio had no other property at the time of his
death. Petitioner moved to dismiss the complaint on the ground
of res judicata. The complaint was amended in 1989 to allege that
the conveyance impaired the legitime of Victor, their natural
brother and predecessor-in-interest. The trial court rendered
judgment finding the donation inofficious which impaired Victor's
legitime and ruled that the action has not yet prescribed. It
computed Victor's legitime based on the area donated. The
assailed decision was affirmed on appeal by the Court of Appeals,
hence, this petition.
The Court held that res judicata does not apply when there is no
identity of causes of action and identity of parties between the two
actions filed. In the case at bar, Civil Case No. 1177 was an action
for annulment filed by the donor against the donee for fraud, while
Civil Case No. 7646 was filed by private respondents in
representation of a compulsory heir for inofficious character of the
donation. aSEHDA
Repudiation cannot be presumed by mere substitution of an heir
to a case affecting the subject property, as tacit repudiation of
inheritance is not countenanced and that the death of a
compulsory heir does not even preclude his heirs from impugning
an inofficious donation.
In the absence of any specific provision on prescription for an
action for reduction or revocation of donation, Article 1144 of the
Civil Code applies. It provides for a 10-year prescriptive period
commencing upon the death of the donor-decedent when the
net estate may be ascertained and on the basis of which the
legitimes may be determined. Thus, the failure of a compulsory
heir to contest the donations for more than 10 years constitutes
estoppel.
While the parties may limit the scope of the trial by the terms of the
pre-trial, the same may be disregarded as an issue such as
prescription was manifest in the pleadings of the parties as well as
the findings of fact of the lower courts.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; JUDGMENT; RES
JUDICATA; REQUIREMENTS; NOT MET IN CASE AT BAR. It
is an indispensable requirement in res judicata that there be,
between the first and second action, identity of parties, of subject
matter and of cause of action. A perusal of the records leads us to
conclude that there is no identity of parties and of cause of action
as between Civil Case No. 1177 and Civil Case No. 7646. Civil
Case No. 1177 was instituted by Leoncio in his capacity as donor
of the questioned donation. While it is true that upon his death,
Victor was substituted as plaintiff of the action, such does not alter
the fact that Victor's participation in the case was in representation
of the interests of the original plaintiff, Leoncio. The purpose
behind the rule on substitution of parties is to ensure that the
deceased party would continue to be properly represented in the
suit through the duly appointed legal representative of the estate,
or his heir, as in this case, for which no court appointment is
required. Petitioner's argument, therefore, that there is substantial
identity between Leoncio and private respondents, being heirs and
successors-in-interest of Victor, is unavailing. Moreover, Leoncio's
cause of action as donor of the property was fraud, purportedly
employed upon him by petitioner in the execution of the donation.
While the same circumstances of fraud and deceit are alleged in
private respondents' complaint, it also raises the additional ground
of inofficiousness of donation.
2. ID.; ID.; ACTIONS; CAUSE OF ACTION; INOFFICIOUSNESS
AS CAUSE OF ACTION MAY ARISE ONLY UPON DEATH OF
DONOR. Contrary to petitioner's contentions, inofficiousness of
donation does not, and could not, form part of Leoncio's cause of
action in Civil Case No. 1177. Inofficiousness as a cause of action
may arise only upon the death of the donor, as the value of the
donation will then be contrasted with the net value of the estate of
the donor-deceased.
3. CIVIL LAW; MODES OF ACQUIRING OWNERSHIP;
SUCCESSION; LEGITIME NOT RENOUNCED BY
SUBSTITUTION OF HEIR AS PLAINTIFF IN ACTION
CONTESTING DONATION. As argued by petitioner, when
Leoncio died on January 8, 1962, it was only Victor who was
entitled to question the donation. However, instead of filing an
action to contest the donation, Victor asked to be substituted as
plaintiff in Civil Case No. 1177 and even moved for execution of
the compromise judgment therein. No renunciation of legitime may
be presumed from the foregoing acts. It must be remembered that
at the time of the substitution, the judgment approving the
compromise agreement has already been rendered. Victor merely
participated in the execution of the compromise judgment. He was
not a party to the compromise agreement. More importantly, our
law on succession does not countenance tacit repudiation of
inheritance. Rather, it requires an express act on the part of the
heir. (Article 1051 of Civil Code) Thus, when Victor substituted
Leoncio in Civil Case No. 1177 upon the latter's death, his act of
moving for execution of the compromise judgment cannot be
considered an act of renunciation of his legitime. He was,
therefore, not precluded or estopped from subsequently seeking
the reduction of the donation, under Article 772. Nor are Victor's
heirs, upon his death, precluded from doing so, as their right to do
so is expressly recognized under Article 772, and also in Article
1053.
4. ID.; ID.; ID.; CLAIM FOR LEGITIME DOES NOT AMOUNT TO
CLAIM OF TITLE; VALUE OF PROPERTY AT TIME OF
DONATION BROUGHT TO COLLATION. A claim for legitime
does not amount to a claim of title. In the recent case of Vizconde
vs. Court of Appeals, we declared that what is brought to collation
is not the donated property itself, but the value of the property at
the time it was donated. The rationale for this is that the donation
is a real alienation which conveys ownership upon its acceptance,
hence, any increase in value or any deterioration or loss thereof is
for the account of the heir or donee. Thus, it is the value of the
property at the time it is donated, and not the property itself, which
is brought to collation. Consequently, even when the donation is
found inofficious and reduced to the extent that it impaired Victor's
legitime, private respondents will not receive a corresponding
share in the property donated. Thus, in this case where the
collatable property is an immovable, what may be received is: (1)
an equivalent, as much as possible, in property of the same
nature, class and quality; (2) if such is impracticable, the
equivalent value of the impaired legitime in cash or marketable
securities; or (3) in the absence of cash or securities in the estate,
so much of such other property as may be necessary, to be sold
in public auction.
5. ID.; PRESCRIPTION OF ACTIONS; ACTION FOR
REDUCTION OF INOFFICIOUS DONATION; PRESCRIBES IN
TEN YEARS FROM DEATH OF DONOR; ACTION FILED IN
CASE AT BAR, PRESCRIBED. What, then, is the prescriptive
period for an action for reduction of an inofficious donation? The
Civil Code specifies the following instances of reduction or
revocation of donations: (1) four years, in cases of subsequent
birth, appearance, recognition or adoption of a child; (2) four years,
for non-compliance with conditions of the donation; and (3) at any
time during the lifetime of the donor and his relatives entitled to
support, for failure of the donor to reserve property for his or their
support. Interestingly, donations as in the instant case, the
reduction of which hinges upon the allegation of impairment of
legitime, are not controlled by a particular prescriptive period, for
which reason we must resort to the ordinary rules of prescription.
Under Article 1144 of the Civil Code, actions upon an obligation
created by law must be brought within ten years from the time the
right of action accrues. Thus, the ten-year prescriptive period
applies to the obligation to reduce inofficious donations, required
under Article 771 of the Civil Code, to the extent that they impair
the legitime of compulsory heirs. From when shall the ten-year
period be reckoned? The case of Mateo vs. Lagua, 29 SCRA 864,
which involved the reduction for inofficiousness of a
donation propter nuptias, recognized that the cause of action to
enforce a legitime accrues upon the death of the donor-decedent.
Clearly so, since it is only then that the net estate may be
ascertained and on which basis, the legitimes may be determined.
It took private respondents 24 years since the death of Leoncio to
initiate this case. The action, therefore, has long prescribed.
6. REMEDIAL LAW; ACTIONS; PRE-TRIAL; DEFENSE NOT
RAISED, NOT WAIVED. As for the trial court's holding that the
defense of prescription had been waived, it not being one of the
issues agreed upon at pre-trial, suffice it to say that while the terms
of the pre-trial order bind the parties as to the matters to be taken
up in trial, it would be the height of injustice for us to adhere to this
technicality when the fact of prescription is manifest in the
pleadings of the parties, as well as the findings of fact of the lower
courts.
7. ID.; ID.; ESTOPPEL BY LACHES; CONSTRUED. Estoppel
by laches is the failure or neglect for an unreasonable or
unexplained length of time to do that which, by exercising due
diligence, could or should have been done earlier, warranting a
presumption that the person has abandoned his right or declined
to assert it.
8. ID.; ID.; ID.; CASE AT BAR. A perusal of the factual
antecedents reveals that not only has prescription set in, private
respondents are also guilty of estoppel by laches. It may be
recalled that Leoncio died on January 8, 1962. Fifteen years later,
Victor died, leaving as his sole heir Ricardo Villalon, who also died
four years later. While Victor was alive, he gave no indication of
any interest to contest the donation of his deceased father. As we
have discussed earlier, the fact that he actively participated in Civil
Case No. 1177 did not amount to a renunciation of his inheritance
and does not preclude him from bringing an action to claim his
legitime. These are matters that Victor could not possibly be
unaware of, considering that he is a lawyer. Ricardo Villalon was
even a lessee of a portion of the donated property, and could have
instituted the action as sole heir of his natural son, or at the very
least, raised the matter of legitime by way of counterclaim in an
ejectment case filed against him by petitioner in 1979. Neither
does it help private respondents' cause that five years have
elapsed since the death of Ricardo in 1981 before they filed their
complaint with the RTC.
9. CIVIL LAW; MODES OF ACQUIRING OWNERSHIP;
SUCCESSION; STEPS TO BE TAKEN BEFORE LEGAL SHARE
DUE COMPULSORY HEIR MAY BE REACHED. Our rules of
succession require that before any conclusion as to the legal share
due to a compulsory heir may be reached, the following steps must
be taken: (1) the net estate of the decedent must be ascertained,
by deducting all the payable obligations and charges from the
value of the property owned by the deceased at the time of his
death; (2) the value of all donations subject to collation would be
added to it. TSIaAc
DECISION
GONZAGA-REYES, J p:
Petitioner seeks to set aside the Decision of the Court of Appeals
in C.A.-G.R. CV No. 31976 1 , affirming the Decision of the
Regional Trial Court of Legazpi City 2 , which rendered inofficious
the donation made by Leoncio Imperial in favor of herein petitioner,
to the extent that it impairs the legitime of Victor Imperial, and
ordering petitioner to convey to herein private respondents, heirs
of said Victor Imperial, that portion of the donated land
proportionate to Victor Imperial's legitime. LLjur
Leoncio Imperial was the registered owner of a 32,837-square
meter parcel of land covered by Original Certificate of Title No.
200, also known as Lot 45 of the Cadastral Survey of Albay. On
July 7, 1951, Leoncio sold the said lot for P1.00 to his
acknowledged natural son, petitioner herein, who then acquired
title over the land and proceeded to subdivide it into several lots.
Petitioner and private respondents admit that despite the
contract's designation as one of "Absolute Sale", the transaction
was in fact a donation.
On July 28, 1953, or barely two years after the donation, Leoncio
filed a complaint for annulment of the said Deed of Absolute Sale,
docketed as Civil Case No. 1177, in the then Court of First
Instance of Albay, on the ground that he was deceived by
petitioner herein into signing the said document. The dispute,
however, was resolved through a compromise agreement,
approved by the Court of First Instance of Albay on November 3,
1961 3 , under which terms: (1) Leoncio recognized the legality
and validity of the rights of petitioner to the land donated; and (2)
petitioner agreed to sell a designated 1,000-square meter portion
of the donated land, and to deposit the proceeds thereof in a bank,
for the convenient disposal of Leoncio. In case of Leoncio's death,
it was agreed that the balance of the deposit will be withdrawn by
petitioner to defray burial costs.
On January 8, 1962, and pending execution of the above
judgment, Leoncio died, leaving only two heirs the herein
petitioner, who is his acknowledged natural son, and an adopted
son, Victor Imperial. On March 8, 1962, Victor was substituted in
place of Leoncio in the above-mentioned case, and it was he who
moved for execution of judgment. On March 15, 1962, the motion
for execution was duly granted.
Fifteen years thereafter, or on July 26, 1977, Victor died single and
without issue, survived only by his natural father, Ricardo Villalon,
who was a lessee of a portion of the disputed land. Four years
hence, or on September 25, 1981, Ricardo died, leaving as his
only heirs his two children, Cesar and Teresa Villalon.
Five years thereafter, or sometime in 1986, Cesar and Teresa filed
a complaint for annulment of the donation with the Regional Trial
Court of Legazpi City, docketed as Civil Case No. 7646. Petitioner
moved to dismiss on the ground of res judicata, by virtue of the
compromise judgment rendered by the Court of First Instance of
Albay. The trial court granted the motion to dismiss, but the Court
of Appeals reversed the trial court's order and remanded the case
for further proceedings.
On October 18, 1989, Cesar and Teresa filed an amended
complaint in the same case, Civil Case No. 7646, for "Annulment
of Documents, Reconveyance and Recovery of Possession" with
the Regional Trial Court of Legazpi City, seeking the nullification
of the Deed of Absolute Sale affecting the above property, on
grounds of fraud, deceit and inofficiousness. In the amended
complaint, it was alleged that petitioner caused Leoncio to execute
the donation by taking undue advantage of the latter's physical
weakness and mental unfitness, and that the conveyance of said
property in favor of petitioner impaired the legitime of Victor
Imperial, their natural brother and predecessor-in-interest. 4
In his Answer, petitioner: (1) alleged that Leoncio had conveyed
sufficient property to Victor to cover his legitime, consisting of 563
hectares of agricultural land in Manito, Albay; (2) reiterated the
defense of res judicata, and (3) raised the additional defenses of
prescription and laches.
Plaintiff Cesar Villalon died on December 26, 1989, while the case
was pending in the Regional Trial Court, and was substituted in
this action by his sons, namely, Antonio, Roberto, Augusto,
Ricardo and Cesar, Jr., all surnamed Villalon, and his widow,
Esther H. Villalon.
The RTC held the donation to be inofficious and impairing the
legitime of Victor, on the basis of its finding that at the time of
Leoncio's death, he left no property other than the 32,837-square
meter parcel of land which he had donated to petitioner. The RTC
went on further to state that petitioner's allegation that other
properties existed and were inherited by Victor was not
substantiated by the evidence. 5
The legitime of Victor was determined by the trial court in this
manner:
Considering that the property donated is 32,837 square meters,
one half of that or 16,418 square meters becomes the free portion
of Leoncio which could be absorbed in the donation to defendant.
The other half, which is also 16,418 square meters is where the
legitime of the adopted son Victor Imperial has to be taken.
The proportion of the legitime of the legitimate child (including the
adopted child) in relation to the acknowledged natural child
(defendant) is 10 is to 5[,] with the acknowledged natural child
getting 1/2 of the legitime of the legitimate (adopted) child, in
accordance with Art. 895 of the New Civil Code which
provides: LibLex
"The legitime of each of the acknowledged natural children and
each of the natural children by legal fiction shall consist of one-half
of the legitime of each of the legitimate children or descendants."
From the 16,418 square meters left (after the free portion has been
taken) plaintiffs are therefore entitled to 10,940 square meters
while defendant gets 5,420 square meters. 6
The trial court likewise held that the applicable prescriptive period
is 30 years under Article 1141 of the Civil Code 7 , reckoned from
March 15, 1962, when the writ of execution of the compromise
judgment in Civil Case 1177 was issued, and that the original
complaint having been filed in 1986, the action has not yet
prescribed. In addition, the trial court regarded the defense of
prescription as having been waived, this not being one of the
issues agreed upon at pre-trial.
Thus, the dispositive portion of the RTC's Decision of December
13, 1990 reads:
WHEREFORE, premises considered, the Deed of Absolute Sale
otherwise known as Doc. No. 8; Book No. 14; Page No. 1; Series
of 1951 of the Notarial file of Pompeyo B. Calleja which is
considered a donation, is hereby reduced proportionately insofar
as it affected the legitime of the late Victor Imperial, which share is
inherited by the plaintiffs herein, to the extent that plaintiffs are
ordered to be given by defendant a portion of 10,940 square
meters thereof.
In order to avoid further conflict, the 10,940 share to be given to
plaintiffs should include the portion which they are presently
occupying, by virtue of the extended lease to their father Ricardo
Villalon, where the bungalow in question stands.
The remaining portion to be given to plaintiffs may come from any
other portion that may be agreed upon by the parties, otherwise,
this court will appoint a commissioner to undertake the partition.
The other 21,897 square meters should go to the defendant as
part of his legitime and by virtue of the reduced donation.
No pronouncement as to damages as they were not sufficiently
proved.
SO ORDERED. 8
The Court of Appeals affirmed the RTC Decision in toto.
Before us, petitioner questions the following findings of respondent
court: (1) that there was no res judicata, there being no identity of
parties and cause of action between the instant case and Civil
Case No. 1177; (2) that private respondents had a right to question
the donation; (3) that private respondents' action is barred by
prescription, laches and estoppel; and (4) that the donation was
inofficious and should be reduced.
It is an indispensable requirement in res judicata that there be,
between the first and second action, identity of parties, of subject
matter and of cause of action. 9 A perusal of the records leads us
to conclude that there is no identity of parties and of cause of
action as between Civil Case No. 1177 and Civil Case No. 7646.
Civil Case No. 1177 was instituted by Leoncio in his capacity as
donor of the questioned donation. While it is true that upon his
death, Victor was substituted as plaintiff of the action, such does
not alter the fact that Victor's participation in the case was in
representation of the interests of the original plaintiff, Leoncio. The
purpose behind the rule on substitution of parties is to ensure that
the deceased party would continue to be properly represented in
the suit through the duly appointed legal representative of the
estate 10 , or his heir, as in this case, for which no court
appointment is required. 11 Petitioner's argument, therefore, that
there is substantial identity between Leoncio and private
respondents, being heirs and successors-in-interest of Victor, is
unavailing.
Moreover, Leoncio's cause of action as donor of the property was
fraud, purportedly employed upon him by petitioner in the
execution of the donation. While the same circumstances of fraud
and deceit are alleged in private respondents' complaint, it also
raises the additional ground of inofficiousness of donation.
Contrary to petitioner's contentions, inofficiousness of donation
does not, and could not, form part of Leoncio's cause of action in
Civil Case No. 1177. Inofficiousness as a cause of action may
arise only upon the death of the donor, as the value of the donation
will then be contrasted with the net value of the estate of the donor-
deceased. 12
Consequently, while in Civil Case No. 1177, Leoncio sought the
revocation in full of the donation on ground of fraud, the instant
case actually has two alternative causes of action. First, for fraud
and deceit, under the same circumstances as alleged in Leoncio's
complaint, which seeks the annulment in full of the donation, and
which the trial court correctly dismissed because the compromise
agreement in Civil Case No. 1177 served as a ratification and
waiver on the part of Leoncio of whatever defects in voluntariness
and consent may have been attendant in the making of the
donation. The second cause of action is the alleged
inofficiousness of the donation, resulting in the impairment of
Victor's legitime, which seeks the annulment, not of the entire
donation, but only of that portion diminishing the legitime. 13 It is
on the basis of this second cause of action that private
respondents prevailed in the lower courts.
Petitioner next questions the right of private respondents to
contest the donation. Petitioner sources his argument from Article
772 of the Civil Code, thus:
Only those who at the time of the donor's death have a right to the
legitime and their heirs and successors in interest may ask for the
reduction of inofficious donations. . . .
As argued by petitioner, when Leoncio died on January 8, 1962, it
was only Victor who was entitled to question the donation.
However, instead of filing an action to contest the donation, Victor
asked to be substituted as plaintiff in Civil Case No. 1177 and even
moved for execution of the compromise judgment therein. prcd
No renunciation of legitime may be presumed from the foregoing
acts. It must be remembered that at the time of the substitution,
the judgment approving the compromise agreement has already
been rendered. Victor merely participated in the execution of the
compromise judgment. He was not a party to the compromise
agreement.
More importantly, our law on succession does not countenance
tacit repudiation of inheritance. Rather, it requires an express act
on the part of the heir. Thus, under Article 1051 of Civil Code:
The repudiation of an inheritance shall be made in a public or
authentic instrument, or by petition presented to the court having
jurisdiction over the testamentary or intestate proceedings.
Thus, when Victor substituted Leoncio in Civil Case No. 1177 upon
the latter's death, his act of moving for execution of the
compromise judgment cannot be considered an act of renunciation
of his legitime. He was, therefore, not precluded or estopped from
subsequently seeking the reduction of the donation, under Article
772. Nor are Victor's heirs, upon his death, precluded from doing
so, as their right to do so is expressly recognized under Article 772,
and also in Article 1053:
If the heir should die without having accepted or repudiated the
inheritance, his right shall be transmitted to his heirs.
Be that as it may, we find merit in petitioner's other assignment of
errors. Having ascertained this action as one for reduction of an
inofficious donation, we cannot sustain the holding of both the trial
court and the Court of Appeals that the applicable prescriptive
period is thirty years, under Article 1141 of the Civil Code. The
sense of both courts that this case is a "real action over an
immovable" allots undue credence to private respondents'
description of their complaint, as one for "Annulment of
Documents, Reconveyance and Recovery of Possession of
Property", which suggests the action to be, in part, a real action
enforced by those with claim of title over the disputed land.
Unfortunately for private respondents, a claim for legitime does not
amount to a claim of title. In the recent case of Vizconde vs. Court
of Appeals 14 , we declared that what is brought to collation is not
the donated property itself, but the value of the property at the time
it was donated. The rationale for this is that the donation is a real
alienation which conveys ownership upon its acceptance, hence,
any increase in value or any deterioration or loss thereof is for the
account of the heir or donee. 15
What, then, is the prescriptive period for an action for reduction of
an inofficious donation? The Civil Code specifies the following
instances of reduction or revocation of donations: (1) four years, in
cases of subsequent birth, appearance, recognition or adoption of
a child; 16 (2) four years, for non-compliance with conditions of the
donation; 17 and (3) at any time during the lifetime of the donor
and his relatives entitled to support, for failure of the donor to
reserve property for his or their support. 18 Interestingly,
donations as in the instant case, 19 the reduction of which hinges
upon the allegation of impairment of legitime, are not controlled by
a particular prescriptive period, for which reason we must resort to
the ordinary rules of prescription.
Under Article 1144 of the Civil Code, actions upon an obligation
created by law must be brought within ten years from the time the
right of action accrues. Thus, the ten-year prescriptive period
applies to the obligation to reduce inofficious donations, required
under Article 771 of the Civil Code, to the extent that they impair
the legitime of compulsory heirs.
From when shall the ten-year period be reckoned? The case
of Mateo vs. Lagua, 29 SCRA 864, which involved the reduction
for inofficiousness of a donation propter nuptias, recognized that
the cause of action to enforce a legitime accrues upon the death
of the donor-decedent. Clearly so, since it is only then that the net
estate may be ascertained and on which basis, the legitimes may
be determined.
It took private respondents 24 years since the death of Leoncio to
initiate this case. The action, therefore, has long prescribed.
As for the trial court's holding that the defense of prescription had
been waived, it not being one of the issues agreed upon at pre-
trial, suffice it to say that while the terms of the pre-trial order bind
the parties as to the matters to be taken up in trial, it would be the
height of injustice for us to adhere to this technicality when the fact
of prescription is manifest in the pleadings of the parties, as well
as the findings of fact of the lower courts. 20
A perusal of the factual antecedents reveals that not only has
prescription set in, private respondents are also guilty of estoppel
by laches. It may be recalled that Leoncio died on January 8, 1962.
Fifteen years later, Victor died, leaving as his sole heir Ricardo
Villalon, who also died four years later. While Victor was alive, he
gave no indication of any interest to contest the donation of his
deceased father. As we have discussed earlier, the fact that he
actively participated in Civil Case No. 1177 did not amount to a
renunciation of his inheritance and does not preclude him from
bringing an action to claim his legitime. These are matters that
Victor could not possibly be unaware of, considering that he is a
lawyer. 21 Ricardo Villalon was even a lessee of a portion of the
donated property, and could have instituted the action as sole heir
of his natural son, or at the very least, raised the matter of legitime
by way of counterclaim in an ejectment case 22 filed against him
by petitioner in 1979. Neither does it help private respondents'
cause that five years have elapsed since the death of Ricardo in
1981 before they filed their complaint with the RTC. cdll
Estoppel by laches is the failure or neglect for an unreasonable or
unexplained length of time to do that which, by exercising due
diligence, could or should have been done earlier, warranting a
presumption that the person has abandoned his right or declined
to assert it. 23 We find the necessity for the application of the
principle of estoppel by laches in this case, in order to avoid an
injustice.
A final word on collation of donations. We observe that after finding
the donation to be inofficious because Leoncio had no other
property at the time of his death, the RTC computed the legitime
of Victor based on the area of the donated property. Hence, in its
dispositive portion, it awarded a portion of the property to private
respondents as Victor's legitime. This was upheld by the Court of
Appeals.
Our rules of succession require that before any conclusion as to
the legal share due to a compulsory heir may be reached, the
following steps must be taken: (1) the net estate of the decedent
must be ascertained, by deducting all the payable obligations and
charges from the value of the property owned by the deceased at
the time of his death; (2) the value of all donations subject to
collation would be added to it. 24
Thus, it is the value of the property at the time it is donated, and
not the property itself, which is brought to collation. Consequently,
even when the donation is found inofficious and reduced to the
extent that it impaired Victor's legitime, private respondents will not
receive a corresponding share in the property donated. Thus, in
this case where the collatable property is an immovable, what may
be received is: (1) an equivalent, as much as possible, in property
of the same nature, class and quality; 25 (2) if such is
impracticable, the equivalent value of the impaired legitime in cash
or marketable securities; 26 or (3) in the absence of cash or
securities in the estate, so much of such other property as may be
necessary, to be sold in public auction. 27
We believe this worth mentioning, even as we grant the petition on
grounds of prescription and laches.
ACCORDINGLY, the decision of the Court of Appeals in C.A. G.R.
CV No. 31976, affirming in toto the decision of the Regional Trial
Court in Civil Case No. 7646, is reversed and set aside. No costs.
SO ORDERED.
||| (Imperial v. Court of Appeals, G.R. No. 112483, [October 8,
1999], 374 PHIL 740-757)
Republic v. Silim 356 SCRA 1
FIRST DIVISION
[G.R. No. 140487. April 2, 2001.]
REPUBLIC OF THE PHILIPPINES, petitioner, vs. LEON SILIM
and ILDEFONSA MANGUBAT, respondents.
DECISION
KAPUNAN, J p:
Before the Court is a petition for review under Rule 45 seeking the
reversal of the Decision of the Court of Appeals in CA-G.R. No.
43840, entitled Leon Silim, et al. vs. Wilfredo Palma, et al., which
declared null and void the donation made by respondents of a
parcel of land in favor of the Bureau of Public Schools, Municipality
of Malangas, Zamboanga del Sur.
The antecedents of this case are as follows:
On 17 December 1971, respondents, the Spouses Leon Silim and
Ildefonsa Mangubat, donated a 5,600 square meter parcel of land
in favor of the Bureau of Public Schools, Municipality of Malangas,
Zamboanga del Sur (BPS). In the Deed of Donation, respondents
imposed the condition that the said property should "be used
exclusively and forever for school purposes only." 1 This donation
was accepted by Gregorio Buendia, the District Supervisor of BPS,
through an Affidavit of Acceptance and/or Confirmation of
Donation. aTcESI
Through a fund raising campaign spearheaded by the Parent-
Teachers Association of Barangay Kauswagan, a school building
was constructed on the donated land. However, the Bagong
Lipunan school building that was supposed to be allocated for the
donated parcel of land in Barangay Kauswagan could not be
released since the government required that it be built upon a one
(1) hectare parcel of land. To remedy this predicament, Assistant
School Division Superintendent of the Province of Zamboanga del
Sur, Sabdani Hadjirol, authorized District Supervisor Buendia to
officially transact for the exchange of the one-half (1/2) hectare old
school site of Kauswagan Elementary School to a new and
suitable location which would fit the specifications of the
government. Pursuant to this, District Supervisor Buendia and
Teresita Palma entered into a Deed of Exchange whereby the
donated lot was exchanged with the bigger lot owned by the latter.
Consequently, the Bagong Lipunan school buildings were
constructed on the new school site and the school building
previously erected on the donated lot was dismantled and
transferred to the new location.
When respondent Leon Silim saw, to his surprise, that Vice-Mayor
Wilfredo Palma was constructing a house on the donated land, he
asked the latter why he was building a house on the property he
donated to BPS. Vice Mayor Wilfredo Palma replied that he is
already the owner of the said property. Respondent Leon Silim
endeavored to stop the construction of the house on the donated
property but Vice-Mayor Wilfredo Palma advised him to just file a
case in court.
On February 10, 1982, respondents filed a Complaint for
Revocation and Cancellation of Conditional Donation, Annulment
of Deed of Exchange and Recovery of Possession and Ownership
of Real Property with damages against Vice Mayor Wilfredo
Palma, Teresita Palma, District Supervisor Buendia and the BPS
before the Regional Trial Court of Pagadian City, Branch 21. In its
Decision dated 20 August 1993, the trial court dismissed the
complaint for lack of merit. 2 The pertinent portion of the decision
reads:
Thus, it is the considered view of this Court that there was no
breach or violation of the condition imposed in the subject Deed of
Donation by the donee. The exchange is proper since it is still for
the exclusive use for school purposes and for the expansion and
improvement of the school facilities within the community. The
Deed of Exchange is but a continuity of the desired purpose of the
donation made by plaintiff Leon Silim.
In sum, it may be safely stated that the aforesaid transaction of
exchange is a (sic) exception to the law invoked by the plaintiffs
(Art. 764, Civil Code). The donee, being the State had the greater
reciprocity of interest in the gratuitous and onerous contract of
donation. It would be illogical and selfish for the donor to
technically preclude the donee from expanding its school site and
improvement of its school facilities, a paramount objective of the
donee in promoting the general welfare and interests of the people
of Barangay Kauswagan. But it is a well-settled rule that if the
contract is onerous, such as the Deed of Donation in question, the
doubt shall be settled in favor of the greatest reciprocity of
interests, which in the instant case, is the donee.
xxx xxx xxx
WHEREFORE, in view of all the foregoing, judgment is hereby
rendered:
1. Dismissing the complaint for lack of merit;
2. Dismissing the counterclaim for the sake of harmony and
reconciliation between the parties;
3. With costs against plaintiffs. SaDICE
SO ORDERED. 3
Not satisfied with the decision of the trial court, respondents
elevated the case to the Court of Appeals. In its Decision dated 22
October 1999, the Court of Appeals reversed the decision of the
trial court and declared the donation null and void on the grounds
that the donation was not properly accepted and the condition
imposed on the donation was violated. 4
Hence, the present case where petitioner raises the following
issues:
I. WHETHER THE COURT OF APPEALS ERRED IN
DECLARING THE DONATION NULL AND VOID DUE TO AN
INVALID ACCEPTANCE BY THE DONEE.
II. WHETHER THE COURT OF APPEALS ERRED IN
DECLARING THE DONATION NULL AND VOID DUE TO AN
ALLEGED VIOLATION OF A CONDITION IN THE DONATION. 5
The Court gives DUE COURSE to the petition.
Petitioner contends that the Court of Appeals erred in declaring
the donation null and void for the reason that the acceptance was
not allegedly done in accordance with Articles 745 6 and 749 7 of
the New Civil Code.
We agree.
Donations, according to its purpose or cause, may be categorized
as: (1) pure or simple; (2) remuneratory or compensatory; (3)
conditional or modal; and (4) onerous. A pure or simple donation
is one where the underlying cause is plain gratuity. 8 This is
donation in its truest form. On the other hand, a remuneratory or
compensatory donation is one made for the purpose of rewarding
the donee for past services, which services do not amount to a
demandable debt. 9 A conditional or modal donation is one where
the donation is made in consideration of future services or where
the donor imposes certain conditions, limitations or charges upon
the donee, the value of which is inferior than that of the donation
given. 10 Finally, an onerous donation is that which imposes upon
the donee a reciprocal obligation or, to be more precise, this is the
kind of donation made for a valuable consideration, the cost of
which is equal to or more than the thing donated. 11
Of all the foregoing classifications, donations of the onerous type
are the most distinct. This is because, unlike the other forms of
donation, the validity of and the rights and obligations of the parties
involved in an onerous donation is completely governed not by the
law on donations but by the law on contracts. In this regard, Article
733 of the New Civil Code provides:
ARTICLE 733. Donations with an onerous cause shall be
governed by the rules on contracts, and remuneratory donations
by the provisions of the present Title as regards that portion which
exceeds the value of the burden imposed. AIDTHC
The donation involved in the present controversy is one which is
onerous since there is a burden imposed upon the donee to build
a school on the donated property. 12
The Court of Appeals held that there was no valid acceptance of
the donation because:
xxx xxx xxx
Under the law the donation is void if there is no acceptance. The
acceptance may either be in the same document as the deed of
donation or in a separate public instrument. If the acceptance is in
a separate instrument, "the donor shall be notified thereof in an
authentic form, and his step shall be noted in both instruments.
"Title to immovable property does not pass from the donor to the
donee by virtue of a deed of donation until and unless it has been
accepted in a public instrument and the donor duly noticed thereof.
(Abellera vs. Balanag, 37 Phils. 85; Alejandro vs. Geraldez, 78
SCRA 245). If the acceptance does not appear in the same
document, it must be made in another. Solemn words are not
necessary; it is sufficient if it shows the intention to accept, But in
this case, it is necessary that formal notice thereof be given to the
donor and the fact that due notice has been given it must be noted
in both instruments (that containing the offer to donate and that
showing acceptance). Then and only then is the donation
perfected. (11 Manresa 155-11, cited in Vol. II, Civil Code of the
Philippines by Tolentino.)."
This Court perused carefully the Deed of Donation marked as
exhibit "A" and "1" to determine whether there was acceptance of
the donation. This Court found none. We further examined the
record if there is another document which embodies the
acceptance, we found one. Although the Court found that in the
offer of exhibits of the defendants, a supposed affidavit of
acceptance and/or confirmation of the donation, marked as exhibit
"8" appears to have been offered.
However, there is nothing in the record that the exhibits offered by
the defendants have been admitted nor such exhibits appear on
record.
Assuming that there was such an exhibit, the said supposed
acceptance was not noted in the Deed of Donation as required
under Art. 749 of the Civil Code. And according to Manresa, supra,
a noted civilist, the notation is one of the requirements of perfecting
a donation. In other words, without such a notation, the contract is
not perfected contract. Since the donation is not perfected, the
contract is therefore not valid. 13
xxx xxx xxx
We hold that there was a valid acceptance of the donation.
Sections 745 and 749 of the New Civil Code provide:
ARTICLE 745. The donee must accept the donation personally, or
through an authorized person with a special power for the purpose,
or with a general and sufficient power; otherwise the donation shall
be void.
ARTICLE 749. In order that the donation of an immovable may be
laid, it must be made in a public document, specifying therein the
property donated and the value of the charge which the donee
must satisfy.
The acceptance may be made in the same deed of donation or in
a separate public document, but it shall not take effect unless it is
done during the lifetime of the donor.
If the acceptance is made in a separate instrument, the donor shall
be notified thereof in an authentic form, and this step shall be noted
in both instruments.
Private respondents, as shown above, admit that in the offer of
exhibits by the defendants in the trial court, an affidavit of
acceptance and/or confirmation of the donation, marked as Exhibit
"8," was offered in evidence. However, private respondents now
question this exhibit because, according to them "there is nothing
in the record that the exhibits offered by the defendants have been
admitted nor such exhibit appear on record."
Respondents' stance does not persuade. The written acceptance
of the donation having been considered by the trial court in arriving
at its decision, there is the presumption that this exhibit was
properly offered and admitted by the court. AcICHD
Moreover, this issue was never raised in the Court of Appeals.
Nowhere in their brief did respondents question the validity of the
donation on the basis of the alleged defect in the acceptance
thereof. If there was such a defect, why did it take respondents
more than ten (10) years from the date of the donation to question
its validity? In the very least, they are guilty of estoppel. 14
Respondents further argue that assuming there was a valid
acceptance of the donation, the acceptance was not noted in the
Deed of Donation as required in Article 749 of the Civil Code,
hence, the donation is void.
The purpose of the formal requirement for acceptance of a
donation is to ensure that such acceptance is duly communicated
to the donor. Thus, in Pajarillo vs. Intermediate Appellate
Court, 15 the Court held:
There is no question that the donation was accepted in a separate
public instrument and that it was duly communicated to the donors.
Even the petitioners cannot deny this. But what they do contend is
that such acceptance was not "noted in both instruments,"
meaning the extrajudicial partition itself and the instrument of
acceptance, as required by the Civil Code.
That is perfectly true. There is nothing in either of the two
instruments showing that "authentic notice" of the acceptance was
made by Salud to Juana and Felipe. And while the first instrument
contains the statement that "the donee does hereby accept this
donation and does hereby express her gratitude for the kindness
and liberality of the donor," the only signatories thereof were Felipe
Balane and Juana Balane de Suterio. That was in fact the reason
for the separate instrument of acceptance signed by Salud a
month later.
A strict interpretation of Article 633 can lead to no other conclusion
that the annulment of the donation for being defective in form as
urged by the petitioners. This would be in keeping with the
unmistakable language of the above-quoted provision. However,
we find that under the circumstances of the present case, a literal
adherence to the requirement of the law might result not in justice
to the parties but conversely a distortion of their intentions. It is
also a policy of the Court to avoid such as interpretation.
The purpose of the formal requirement is to insure that the
acceptance of the donation is duly communicated to the donor. In
the case at bar, it is not even suggested that Juana was unaware
of the acceptance for she in fact confirmed it later and requested
that the donated land be not registered during her lifetime by
Salud. Given this significant evidence, the Court cannot in
conscience declare the donation ineffective because there is no
notation in the extra-judicial settlement of the donee's acceptance.
That would be placing too much stress on mere form over
substance. It would also disregard the clear reality of the
acceptance of the donation as manifested in the separate
instrument dated June 20, 1946, and as later acknowledged by
Juan.
In the case at bar, a school building was immediately constructed
after the donation was executed. Respondents had knowledge of
the existence of the school building put up on the donated lot
through the efforts of the Parents-Teachers Association of
Barangay Kauswagan. It was when the school building was being
dismantled and transferred to the new site and when Vice-Mayor
Wilfredo Palma was constructing a house on the donated property
that respondents came to know of the Deed of Exchange. The
actual knowledge by respondents of the construction and
existence of the school building fulfilled the legal requirement that
the acceptance of the donation by the donee be communicated to
the donor.
On respondents' claim, which was upheld by the Court of Appeals,
that the acceptance by BPS District Supervisor Gregorio Buendia
of the donation was ineffective because of the absence of a special
power of attorney from the Republic of the Philippines, it is
undisputed that the donation was made in favor of the Bureau of
Public Schools. Such being the case, his acceptance was
authorized under Section 47 of the 1987 Administrative Code
which states:
SECTION 47. Contracts and Conveyances. Contracts or
conveyances may be executed for and in behalf of the
Government or of any of its branches, subdivisions, agencies, or
instrumentalities, whenever demanded by the exigency or
exigencies of the service and as long as the same are not
prohibited by law.
Finally, it is respondents' submission that the donee, in exchanging
the donated lot with a bigger lot, violated the condition in the
donation that the lot be exclusively used for school purposes only.
What does the phrase "exclusively used for school purposes"
convey? "School" is simply an institution or place of
education. 16 "Purpose" is defined as "that which one sets before
him to accomplish or attain; an end, intention, or aim, object, plan,
project. Term is synonymous with the ends sought, an object to be
attained, an intention, etc." 17 "Exclusive" means "excluding or
having power to exclude (as by preventing entrance or debarring
from possession, participation, or use); limiting or limited to
possession, control or use. 18
Without the slightest doubt, the condition for the donation was not
in any way violated when the lot donated was exchanged with
another one. The purpose for the donation remains the same,
which is for the establishment of a school. The exclusivity of the
purpose was not altered or affected. In fact, the exchange of the
lot for a much bigger one was in furtherance and enhancement of
the purpose of the donation. The acquisition of the bigger lot paved
the way for the release of funds for the construction of Bagong
Lipunan school building which could not be accommodated by the
limited area of the donated lot. CDaSAE
WHEREFORE, the decision of the Court of Appeals is hereby
REVERSED and SET ASIDE and the decision of the Regional
Trial Court is REINSTATED.
SO ORDERED.
||| (Republic v. Silim, G.R. No. 140487, [April 2, 2001], 408 PHIL
69-82)
Gestopa v. Court of Appeals 342 SCRA 105
SECOND DIVISION
[G.R. No. 111904. October 5, 2000.]
SPS. AGRIPINO GESTOPA and ISABEL SILARIO
GESTOPA, petitioners, vs. COURT OF APPEALS and
MERCEDES DANLAG y PILAPIL, respondents.
Batiquin & Batiquin Law Office for petitioners.
Danilo L. Pilapil for private respondent.
SYNOPSIS
Sometime in 1965 and 1966, three (3) deeds of donation mortis
causa over several parcels of unregistered land were executed in
favor of Mercedes Danlag y Pilapil by spouses Diego and Catalina
Danlag. In January 1973, Diego, with the consent of Catalina,
executed a deed of donation inter vivos over said parcels of land
again in favor of respondent Mercedes. This contained the
condition that the spouses Danlag shall continue to enjoy the fruits
of the land during their lifetime. Likewise, it imposed a limitation on
Mercedes' right to sell the land during the lifetime of the spouses
without their consent and approval. However, years later, spouses
Danlag sold several parcels of the land so donated to spouses
Gestopa. Thus, Mercedes filed with the Regional Trial Court a
petition for quieting of title, the main issue being the nature of the
donation executed in favor of Mercedes. The trial court ruled in
favor of the defendants. The Court of Appeals reversed this
judgment. Hence, this petition for review.
The granting clause in the Deed of Donation showed that Diego
donated the properties out of love and affection for the spouse.
This is a mark of a donation inter vivos. The reservation of lifetime
usufruct indicates that the donor intended to transfer the naked
ownership over the properties. The donor reserved sufficient
properties for his maintenance indicating that the donor intended
to part with the parcels of land donated. Lastly, the donee
accepted the donation. Acceptance is a requirement for
donations inter vivos.
SYLLABUS
1. CIVIL LAW; MODES OF ACQUIRING OWNERSHIP;
DONATIONS; TO DETERMINE WHETHER DONATION
IS INTER VIVOS OR MORTIS CAUSA, INTENT OF DONOR
MUST BE ASCERTAINED. Crucial in resolving whether the
donation was inter vivos or mortis causa is the determination of
whether the donor intended to transfer the ownership over the
properties upon the execution of the deed. In ascertaining the
intention of the donor, all of the deed's provisions must be read
together.
2. ID.; ID.; ID.; ID.; CASE AT BAR. The granting clause shows
that Diego donated the properties out of love and affection for the
donee. This is a mark of a donation inter vivos. Second, the
reservation of lifetime usufruct indicates that the donor intended to
transfer the naked ownership over the properties. As correctly
posed by the Court of Appeals, what was the need for such
reservation if the donor and his spouse remained the owners of
the properties? Third, the donor reserved sufficient properties for
his maintenance in accordance with his standing in society,
indicating that the donor intended to part with the six parcels of
land. Lastly, the donee accepted the donation.
3. ID.; ID.; ID.; ID.; A DEED OF REVOCATION, THE VALIDITY
OF WHICH IS BEING ASSAILED, CANNOT BE USED TO SHOW
DONOR'S INTENT. As correctly observed by the Court of
Appeals, the Danlag spouses were aware of the difference
between the two donations. If they did not intend to donate inter
vivos, they would not again donate the four lots already
donated mortis causa. Petitioner's counter argument that this
proposition was erroneous because six years after, the spouses
changed their intention with the deed of revocation, is not only
disingenuous but also fallacious. Petitioners cannot use the deed
of revocation to show the spouses' intent because its validity is one
of the issues in this case.
4. ID.; ID.; ID.; ACCEPTANCE CLAUSE IS A MARK OF A
DONATION INTER VIVOS. In the case of Alejandro vs.
Geraldez, 78 SCRA 245 (1977), we said that an acceptance
clause is a mark that the donation is inter vivos. Acceptance is a
requirement for donations inter vivos. Donations mortis causa,
being in the form of a will, are not required to be accepted by the
donees during the donors' lifetime.
5. ID.; ID.; ID.; LIMITATION ON THE RIGHT TO SELL, AN
IMPLICATION THAT OWNERSHIP HAD PASSED TO THE
DONEE. A limitation on the right to sell during the donors'
lifetime implied that ownership had passed to the donees and
donation was already effective during the donors' lifetime.
6. ID.; ID.; ID.; REVOCATION; GENERALLY, A VALID
DONATION, ONCE ACCEPTED IS IRREVOCABLE;
EXCEPTIONS. A valid donation, once accepted, becomes
irrevocable, except on account of officiousness, failure by the
donee to comply with the charges imposed in the donation, or
ingratitude. The donor-spouses did not invoke any of these
reasons in the deed of revocation.
7. REMEDIAL LAW; EVIDENCE, PRESUMPTIONS;
REGULARITY IN THE PERFORMANCE OF OFFICIAL DUTIES,
PRESUMED UNLESS PROVEN OTHERWISE. Petitioners
aver that Mercedes' tax declarations in her name can not be a
basis in determining the donor's intent. They claim that it is easy
to get tax declarations from the government offices such that tax
declarations are not considered proofs of ownership. However,
unless proven otherwise, there is a presumption of regularity in the
performance of official duties. ACaEcH
8. ID.; ID.; FINDINGS OF FACT BY APPELLATE COURT
GENERALLY UPHELD IN A PETITION FOR REVIEW. As a
rule, a finding of fact by the appellate court, especially when it is
supported by evidence on record, is binding on us.
DECISION
QUISUMBING, J p:
This petition for review, 1 under Rule 45 of the Rules of Court,
assails the decision 2 of the Court of Appeals dated August 31,
1993, in CA-G.R. CV No. 38266, which reversed the judgment 3 of
the Regional Trial Court of Cebu City, Branch 5.
The facts, as culled from the records, are as follows:
Spouses Diego and Catalina Danlag were the owners of six
parcels of unregistered lands. They executed three deeds of
donation mortis causa, two of which are dated March 4, 1965 and
another dated October 13, 1966, in favor of private respondent
Mercedes Danlag-Pilapil. 4 The first deed pertained to parcels 1 &
2 with Tax Declaration Nos. 11345 and 11347, respectively. The
second deed pertained to parcel 3, with TD No. 018613. The last
deed pertained to parcel 4 with TD No. 016821. All deeds
contained the reservation of the rights of the donors (1) to amend,
cancel or revoke the donation during their lifetime, and (2) to sell,
mortgage, or encumber the properties donated during the donors'
lifetime, if deemed necessary.
On January 16, 1973, Diego Danlag, with the consent of his wife,
Catalina Danlag, executed a deed of donation inter
vivos 5 covering the aforementioned parcels of land plus two other
parcels with TD Nos. 11351 and 11343, respectively, again in
favor of private respondent Mercedes. This contained two
conditions, that (1) the Danlag spouses shall continue to enjoy the
fruits of the land during their lifetime, and that (2) the donee can
not sell or dispose of the land during the lifetime of the said
spouses, without their prior consent and approval. Mercedes
caused the transfer of the parcels' tax declaration to her name and
paid the taxes on them.
On June 28, 1979 and August 21, 1979, Diego and Catalina
Danlag sold parcels 3 and 4 to herein petitioners, Mr. and Mrs.
Agripino Gestopa. On September 29, 1979, the Danlags executed
a deed of revocation 6 recovering the six parcels of land subject of
the aforecited deed of donation inter vivos.
On March 1, 1983, Mercedes Pilapil (herein private respondent)
filed with the RTC a petition against the Gestopas and the
Danlags, for quieting of title 7 over the above parcels of land. She
alleged that she was an illegitimate daughter of Diego Danlag; that
she lived and rendered incalculable beneficial services to Diego
and his mother, Maura Danlag, when the latter was still alive. In
recognition of the services she rendered, Diego executed a Deed
of Donation on March 20, 1973, conveying to her the six (6) parcels
of land. She accepted the donation in the same instrument, openly
and publicly exercised rights of ownership over the donated
properties, and caused the transfer of the tax declarations to her
name. Through machination, intimidation and undue influence,
Diego persuaded the husband of Mercedes, Eulalio Pilapil, to buy
two of the six parcels covered by the deed of donation. Said
donation inter vivos was coupled with conditions and, according to
Mercedes, since its perfection, she had complied with all of them;
that she had not been guilty of any act of ingratitude; and that
respondent Diego had no legal basis in revoking the subject
donation and then in selling the two parcels of land to the
Gestopas. aTIEcA
In their opposition, the Gestopas and the Danlags averred that the
deed of donation dated January 16, 1973 was null and void
because it was obtained by Mercedes through machinations and
undue influence. Even assuming it was validly executed, the
intention was for the donation to take effect upon the death of the
donor. Further, the donation was void for it left the donor, Diego
Danlag, without any property at all.
On December 27, 1991, the trial court rendered its decision, thus:
"WHEREFORE, the foregoing considered, the Court hereby
renders judgment in favor of the defendants and against the
plaintiff:
1. Declaring the Donations Mortis Causa and Inter Vivos as
revoked, and, therefore, has (sic) no legal effect and force of law.
2. Declaring Diego Danlag the absolute and exclusive owner of the
six (6) parcels of land mentioned in the Deed of revocation (Exh.
P-plaintiff, Exh. 6-defendant Diego Danlag).
3. Declaring the Deeds of Sale executed by Diego Danlag in favor
of spouses Agripino Gestopa and Isabel Gestopa dated June 28,
1979 (Exh. S-plaintiff; Exh. 18-defendant); Deed of Sale dated
December 18, 1979 (Exh. T-plaintiff; Exh. 9-defendant); Deed of
Sale dated September 14, 1979 (Exh. 8); Deed of Sale dated June
30, 1975 (Exh. U); Deed of Sale dated March 13, 1978 (Exh X) as
valid and enforceable duly executed in accordance with the
formalities required by law.
4. Ordering all tax declaration issued in the name of Mercedes
Danlag y Pilapil covering the parcel of land donated cancelled and
further restoring all the tax declarations previously cancelled,
except parcels nos. 1 and 5 described, in the Deed of
Donation Inter Vivos (Exh. "1") and Deed of Sale (Exh. "2")
executed by defendant in favor of plaintiff and her husband.
5. With respect to the contract of sale of abovestated parcels of
land, vendor Diego Danlag and spouse or their estate have the
alternative remedies of demanding the balance of the agreed price
with legal interest, or rescission of the contract of sale.
SO ORDERED." 8
In rendering the above decision, the trial court found that the
reservation clause in all the deeds of donation indicated that Diego
Danlag did not make any donation; that the purchase by Mercedes
of the two parcels of land covered by the Deed of Donation Inter
Vivos bolstered this conclusion; that Mercedes failed to rebut the
allegations of ingratitude she committed against Diego Danlag;
and that Mercedes committed fraud and machination in preparing
all the deeds of donation without explaining to Diego Danlag their
contents.
Mercedes appealed to the Court of Appeals and argued that the
trial court erred in (1) declaring the donation dated January 16,
1973 as mortis causa and that the same was already revoked on
the ground of ingratitude; (2) finding that Mercedes purchased
from Diego Danlag the two parcels of land already covered by the
above donation and that she was only able to pay three thousand
pesos, out of the total amount of twenty thousand pesos; (3) failing
to declare that Mercedes was an acknowledged natural child of
Diego Danlag.
On August 31, 1993, the appellate court reversed the trial court. It
ruled:
"PREMISES CONSIDERED, the decision appealed from is
REVERSED and a new judgment is hereby rendered as follows:
1. Declaring the deed of donation inter vivos dated January 16,
1973 as not having been revoked and consequently the same
remains in full force and effect;
2. Declaring the Revocation of Donation dated June 4, 1979 to be
null and void and therefore of no force and effect;
3. Declaring Mercedes Danlag Pilapil as the absolute and
exclusive owner of the six (6) parcels of land specified in the
above-cited deed of donation inter vivos;
4. Declaring the Deed of Sale executed by Diego Danlag in favor
of spouses Agripino and Isabel Gestopa dated June 28, 1979
(Exhibits S and 18), Deed of Sale dated December 18, 1979
(Exhibits T and 19), Deed of Sale dated September 14, 1979
(Exhibit 8), Deed of Sale dated June 30, 1975 (Exhibit U), Deed of
Sale dated March 13, 1978 (Exhibit X) as well as the Deed of Sale
in favor of Eulalio Danlag dated December 27, 1978 (Exhibit 2) not
to have been validly executed;
5. Declaring the above-mentioned deeds of sale to be null and void
and therefore of no force and effect;
6. Ordering spouses Agripino Gestopa and Isabel Silario Gestopa
to reconvey within thirty (30) days from the finality of the instant
judgment to Mercedes Danlag Pilapil the parcels of land above-
specified, regarding which titles have been subsequently
fraudulently secured, namely those covered by O.C.T. T-17836
and O.C.T. No. 17523.
7. Failing to do so, ordering the Branch Clerk of Court of the
Regional Trial Court (Branch V) at Cebu City to effect such
reconveyance of the parcels of land covered by O.C.T. T-17836
and 17523.
SO ORDERED." 9
The Court of Appeals held that the reservation by the donor of
lifetime usufruct indicated that he transferred to Mercedes the
ownership over the donated properties; that the right to sell
belonged to the donee, and the donor's right referred to that of
merely giving consent; that the donor changed his intention by
donating inter vivos properties already donated mortis causa; that
the transfer to Mercedes' name of the tax declarations pertaining
to the donated properties implied that the donation was inter vivos;
and that Mercedes did not purchase two of the six parcels of land
donated to her.
Hence, this instant petition for review filed by the Gestopa
spouses, asserting that:
"THE HONORABLE COURT OF APPEALS, TWELFTH
DIVISION, HAS GRAVELY ERRED IN REVERSING THE
DECISION OF THE COURT A QUO." 10
Before us, petitioners allege that the appellate court overlooked
the fact that the donor did not only reserve the right to enjoy the
fruits of the properties, but also prohibited the donee from selling
or disposing the land without the consent and approval of the
Danlag spouses. This implied that the donor still had control and
ownership over the donated properties. Hence, the donation
was post mortem.
Crucial in resolving whether the donation was inter vivos or mortis
causa is the determination of whether the donor intended to
transfer the ownership over the properties upon the execution of
the deed. 11
In ascertaining the intention of the donor, all of the deed's
provisions must be read together. 12 The deed of donation dated
January 16, 1973, in favor of Mercedes contained the following:
"That for and in consideration of the love and affection which the
Donor inspires in the Donee and as an act of liberality and
generosity, the Donor hereby gives, donates, transfers and
conveys by way of donation unto the herein Donee, her heirs,
assigns and successors, the above-described parcels of land;
That it is the condition of this donation that the Donor shall continue
to enjoy all the fruits of the land during his lifetime and that of his
spouse and that the donee cannot sell or otherwise, dispose of the
lands without the prior consent and approval by the Donor and her
spouse during their lifetime.
xxx xxx xxx
That for the same purpose as hereinbefore stated, the Donor
further states that he has reserved for himself sufficient properties
in full ownership or in usufruct enough for his maintenance of a
decent livelihood in consonance with his standing in society.
That the Donee hereby accepts the donation and expresses her
thanks and gratitude for the kindness and generosity of the
Donor." 13
Note first that the granting clause shows that Diego donated the
properties out of love and affection for the donee. This is a mark
of a donation inter vivos. 14 Second, the reservation of lifetime
usufruct indicates that the donor intended to transfer the naked
ownership over the properties. As correctly posed by the Court of
Appeals, what was the need for such reservation if the donor and
his spouse remained the owners of the properties? Third, the
donor reserved sufficient properties for his maintenance in
accordance with his standing in society, indicating that the donor
intended to part with the six parcels of land. 15 Lastly, the donee
accepted the donation. In the case of Alejandro vs. Geraldez, 78
SCRA 245 (1977), we said that an acceptance clause is a mark
that the donation is inter vivos. Acceptance is a requirement for
donations inter vivos. Donations mortis causa, being in the form of
a will, are not required to be accepted by the donees during the
donors' lifetime. acHCSD
Consequently, the Court of Appeals did not err in concluding that
the right to dispose of the properties belonged to the donee. The
donor's right to give consent was merely intended to protect his
usufructuary interests. In Alejandro, we ruled that a limitation on
the right to sell during the donors' lifetime implied that ownership
had passed to the donees and donation was already effective
during the donors' lifetime.
The attending circumstances in the execution of the subject
donation also demonstrated the real intent of the donor to transfer
the ownership over the subject properties upon its
execution. 16 Prior to the execution of donation inter vivos, the
Danlag spouses already executed three donations mortis
causa. As correctly observed by the Court of Appeals, the Danlag
spouses were aware of the difference between the two donations.
If they did not intend to donate inter vivos, they would not again
donate the four lots already donated mortis causa. Petitioners'
counter argument that this proposition was erroneous because six
years after, the spouses changed their intention with the deed of
revocation, is not only disingenious but also fallacious. Petitioners
cannot use the deed of revocation to show the spouses' intent
because its validity is one of the issues in this case.
Petitioners aver that Mercedes' tax declarations in her name can
not be a basis in determining the donor's intent. They claim that it
is easy to get tax declarations from the government offices such
that tax declarations are not considered proofs of
ownership. However, unless proven otherwise, there is a
presumption of regularity in the performance of official
duties. 17 We find that petitioners did not overcome this
presumption of regularity in the issuance of the tax declarations.
We also note that the Court of Appeals did not refer to the tax
declarations as proofs of ownership but only as evidence of the
intent by the donor to transfer ownership.
Petitioners assert that since private respondent purchased two of
the six parcels of land from the donor, she herself did not believe
the donation was inter vivos. As aptly noted by the Court of
Appeals, however, it was private respondent's husband who
purchased the two parcels of land.
As a rule, a finding of fact by the appellate court, especially when
it is supported by evidence on record, is binding on us. 18 On the
alleged purchase by her husband of two parcels, it is reasonable
to infer that the purchase was without private respondent's
consent. Purchase by her husband would make the properties
conjugal to her own disadvantage. That the purchase is against
her self-interest, weighs strongly in her favor and gives credence
to her claim that her husband was manipulated and unduly
influenced to make the purchase, in the first place.

Was the revocation valid? A valid donation, once accepted,

becomes irrevocable, except on account of officiousness, failure
by the donee to comply with the charges imposed in the donation,
or ingratitude. 19 The donor-spouses did not invoke any of these
reasons in the deed of revocation. The deed merely stated:
WHEREAS, while the said donation was a donation Inter Vivos,
our intention thereof is that of Mortis Causa so as we could be sure
that-in case of our death, the above-described properties will be
inherited and/or succeeded by Mercedes Danlag de Pilapil; and
that said intention is clearly shown in paragraph 3 of said donation
to the effect that the Doneecannot dispose and/or sell the
properties donated during our life-time, and that we are the one
enjoying all the fruits thereof." 20
Petitioners cited Mercedes' vehemence in prohibiting the donor to
gather coconut trees and her filing of instant petition for quieting of
title. There is nothing on record, however, showing that private
respondent prohibited the donors from gathering coconuts. Even
assuming that Mercedes prevented the donor from gathering
coconuts, this could hardly be considered an act covered by Article
765 of the Civil Code. 21 Nor does this Article cover respondent's
filing of the petition for quieting of title, where she merely asserted
what she believed was her right under the law. AcHaTE
Finally, the records do not show that the donor-spouses instituted
any action to revoke the donation in accordance with Article 769
of the Civil Code. 22 Consequently, the supposed revocation on
September 29, 1979, had no legal effect.
WHEREFORE, the instant petition for review is DENIED. The
assailed decision of the Court of Appeals dated August 31, 1993,
is AFFIRMED.
Costs against petitioners.
SO ORDERED. A
||| (Spouses Gestopa v. Court of Appeals, G.R. No. 111904,
[October 5, 2000], 396 PHIL 262-273)

Title 4 Prescription
1.Acquisitive Prescription
2.Extinctive Prescription
3.Laches
4.Prescription of Ownership and Other Real Rights (Arts.
1117-1138)
Prescription of Actions (Arts. 1139-1155)
UPDATES IN JURISPRUDENCE
LA TONDENA v. REPUBLIC
SECOND DIVISION
[G.R. No. 194617. August 5, 2015.]
LA TONDEA, INC., petitioner, vs. REPUBLIC OF THE
PHILIPPINES, respondent.
DECISION
LEONEN, J p:
La Tondea, Inc. (La Tondea) applied for registration of a 14,286-
square-meter parcel of land, with La Tondea alleging acquisition
and possession even before the Second World War. It argues the
inadmissibility of the Department of Environment and Natural
Resources-Community Environment and Natural Resources
Office's (DENR-CENRO) Report on the land's classification as
alienable and disposable only on January 21, 1987 as this Report
was not formally offered as evidence before the trial court.
This case involves an application of Section 14 (1) of Property
Registration Decree in relation to Section 48 (b) of Commonwealth
Act No. 141, as amended, on the requisites for judicial
confirmation of imperfect title. 1
This Petition for Review on Certiorari 2 assails the Court of
Appeals August 10, 2010 Decision 3 that reversed and set aside
the Municipal Trial Court December 15, 2005 Decision 4 granting
La Tondea's application for land registration. 5 La Tondea prays
that this court reverse and set aside the Court of Appeals Decision
and Resolution, 6 then affirm in toto the Municipal Trial Court
Decision or, in the alternative, remand the case for further
reception of evidence. 7
On September 28, 2004, La Tondea, through its Vice President
Rosendo A. Bautista, 8 filed an Application 9 for the registration of
a 14,286-square-meter parcel of land in Central West, Bauang, La
Union. 10
La Tondea alleged obtaining title or ownership by purchase from
one Pablo Rimorin and attached the following documents with its
application: "(a) original tracing plan together with its print copies;
(b) technical description of the land; (c) certification, in lieu of lost
Surveyor's Certificate for registration; (d) certificate of tax
assessment from 1948 up to the present; (e) copy of Tax
Declaration No. 27726; and (f) copy of the Secretary's Certificate
authorizing Rosendo A. Bautista." 11
On October 15, 2004, the Land Registration Authority
Administrator forwarded the entire records to the Municipal Trial
Court. 12 On December 17, 2004, the trial court sent a Notice of
Initial Hearing to the Office of the Solicitor General. 13
On March 21, 2005, during the initial hearing, the trial court
entered an Order of Special Default against the whole world
except against the Republic of the Philippines that filed a formal
written opposition to the application. 14
The trial court scheduled the hearing for marking of exhibits on
April 12, 2005. 15 Rosendo A. Bautista testified and identified the
documents submitted with the application for registration. 16 He
alleged that all records showing La Tondea's purchase of the land
from one Pablo Rimorin were burned, thus, applicant can only
present tax declarations in its name for years 1948, 1953, 1964,
1974, 1980, 1985, 1994, and 1999. 17
On May 30, 2005, La Tondea's property administrator Victor
Dumuk testified that from the time his father, Juan Dumuk, was
property administrator before the Second World War up to Victor
Dumuk's present administration, La Tondea's ownership of the
land was uncontested, and its possession was peaceful,
continuous, open, and public. 18He testified that property taxes
were paid from 1994 to 2005, and that mango trees and a
basketball court can be found on the land. 19
DENR-CENRO Land Investigator Wilfredo Valera submitted a
Report dated May 31, 2005 to the trial court, stating that the land
was declared alienable and disposable only on January 21,
1987. 20 The trial court summarized the Report's contents in its
Decision: CAIHTE
In the investigation report submitted by Special Investigator
Wilfredo B. Valera of the DENR, CENRO, San Fernando City, La
Union, the land is covered by Survey Plan No. AP-01-004436
approved by the Regional Land District/Land Management
Bureau, Region I, pursuant to P.D. No. 239 dated September
1973; that it consists of 14,286 square meters and is located in
Brgy. Central West, Bauang, La Union; that the entire area is
within the alienable and disposable zone as classified under
Project No. 9, LC No. 3330 and released as well as certified as
such on January 21, 1987; that this parcel of land is not within
any civil or military reservations, and is outside of any forest zone
and watershed reservations; that it is not covered by any
previously issued land patent, decree or title; that this land was
declared for the first time in the year 1948 under Tax declaration
No. 1745 in the name of La Tondea Distilleries with an area of
13,292 square meters; that this land is now covered by Tax
declaration No. 27726 in the name of La Tondea Distilleria
Incorporada; that the corresponding realty taxes as per record of
the Municipal Treasurer of Bauang, La Union have been paid since
1948; that this lot has not been earmarked for public use and not
reserved for any future government projects; that this lot is flat in
terrain, presently for agricultural purposes, with bamboos and
some fruit trees planted in it and about .00365 kilometers from the
poblacion; that this lot was found to be free from adverse claims
and conflicts during the inspection; that La Tondea Distilleria
Incorporada is in actual occupation and possession of the land;
that this lot does not encroach upon any bodies of water, Right of
Way, and park sites that are devoted to the public; and that during
the investigation and ocular inspection of the area, applicant La
Tondea, Inc. thru its authorized representative, presented the
following documents, to wit: Print copy of AP-01-004436 and tax
declarations from the year 1948 up to the present. 21 (Emphasis
supplied)
La Tondea alleged that this Report was not presented and
formally offered during the proceedings, and it only learned of its
existence during appeal. 22
The Municipal Trial Court, in its Decision dated December 15,
2005, approved La Tondea's application for registration:
Considering that the government represented by the Asst.
Provincial Prosecutor, Bauang, La Union for and in behalf of the
Solicitor General (SOLGEN) is not presenting any evidence,
documentary or testimonial to substantiate the formal written
opposition which was filed, the said formal written opposition is
hereby ordered dismissed for lack of merit.
Wherefore, this Court, confirming the Order of Special Default,
hereby approves the application and orders the adjudication and
registration of the land described in Survey Plan No. AP-01-
004436 (Exh. "J") and the Technical description of said lot, Lot
4551, CAD 474-D, Bauang Cadastre (Exh. "K") containing an area
of Fourteen thousand two hundred eighty-six (14,286) square
meters situated at Brgy. Central West, Bauang, La Union.
Once this decision becomes final and executory, let the
corresponding decree be issued.
So Ordered. 23
The Republic of the Philippines filed a Notice of Appeal 24 before
the Court of Appeals on the ground that the trial court's Decision
was "contrary to law and evidence." 25 It raised the Report dated
May 31, 2005 on the land's classification as alienable and
disposable only on January 21, 1987, thus, the land cannot be the
subject matter of an application for judicial confirmation of
imperfect title under Commonwealth Act No. 141 that requires
possession from June 12, 1945 or earlier. 26
Instead of filing its Memorandum, La Tondea filed a Manifestation
with Motion to Remand Case 27 dated January 29, 2007 to
present further evidence that the land was private land at the time
of its acquisition. 28 The Court of Appeals noted the Comment of
the Republic of the Philippines, and denied the Motion of La
Tondea. 29 DETACa
La Tondea filed a Motion for Reconsideration 30 dated
December 18, 2008 attaching as newly discovered evidence the
"Plan of Private Land as surveyed for Pablo Rimonin" under Psu-
67458 duly approved on March 5, 1930. 31 The Court of Appeals
denied reconsideration. 32
The Court of Appeals, in its Decision dated August 10, 2010,
reversed and set aside the Municipal Trial Court December 15,
2005 Decision, and dismissed La Tondea's application for
registration. 33 It also denied reconsideration. 34
Hence, La Tondea filed this Petition.
La Tondea submits that the Report dated May 31, 2005 should
not have been considered by the trial court since it was not
identified and formally offered as evidence. 35Wilfredo Valera was
never presented in court, thus, he was never cross-examined in
violation of La Tondea's right to due process. 36 La Tondea
alleges that it only saw a copy of the Report when the case was
on appeal. 37
In any event, La Tondea raises the survey plan notation
confirming that the land was "inside alienable and disposable area
as per Project No. 09, L.C. Map No. 0333 as certified on Aug. 12,
1934." 38 The survey plan was approved by the Department of
Environment and Natural Resources in the performance of its
official function that carries the presumption of regularity. 39 La
Tondea argues that the Republic of the Philippines did not
controvert this evidence, and Wilfredo Valera's Report dated May
31, 2005 that was not formally offered as evidence cannot prevail
over the survey plan that the trial court duly admitted as
evidence. 40
Assuming the land was only reclassified on January 21, 1987, La
Tondea argues that it acquired a vested right over the land under
the 1935 Constitution that allows a private corporation to acquire
alienable and disposable land of public domain: 41
With due indulgence, the Honorable Court of Appeals failed to
consider that petitioner has acquired a vested right over the land
sought to be registered under the 1935 Philippine Constitution and
prior to the effectivity of the 1973 and 1987 Philippine
Constitutions. As a general rule, constitutional provisions are given
prospective application, not retroactive, unless retroactivity is
expressly provided or necessarily implied (People vs. Isagani, et
al., 63 SCRA 4). Hence, due to the prospective application of the
1973 and 1987 Constitutions, it is the provisions of the 1935
Constitution that should apply to petitioner's application for
registration. Undoubtedly, under the 1935 Philippine Constitution,
private corporations are allowed in acquiring alienable and
disposable land of the public domain. (Republic vs. T.A.N.
Properties, Inc.[,] G.R. No. 154953, June 26, 2008).
Interestingly, the original reckoning point for the required length of
possession under the Public Land Act (C.A. 141) is possession
since July 26, 1894. The period of possession was shortened to
thirty (30) years by Republic Act No. 1942, which was enacted on
June 22, 1957. Then, on January 25, 1977, Presidential Decree
No. 1073 was enacted pegging the reckoning point of possession
to June 12, 1945. Hence, until 1972, prior to the effectivity of the
1973 Philippine Constitution, the required possession of alienable
public land that would qualify to judicial confirmation under C.A.
141 is at least thirty (30) years, or at least from the year 1942. If
reckoned from 1972, the latest date when private corporations are
allowed to acquire alienable public lands. Therefore, petitioner
already acquired a vested right over the subject property in
1972. 42
La Tondea submits that "its possession was open, continuous,
uninterrupted for more than thirty (30) years until 1972 prior to the
effectivity of the 1973 and 1987 Philippine Constitution[,] [t]hus,
the land became a private property by acquisitive prescription in
accordance with the doctrine that open, exclusive and undisputed
possession of alienable 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 order or
other sanction ceases to be public land and becomes private
property." 43
La Tondea contends that it presented sufficient evidence for
approval of its application for registration. Alternatively, a remand
would allow it to cross-examine Wilfredo Valera on his Report, and
La Tondea can present additional evidence to show that the land
was private land as early as March 5, 1930 as stated in the "Plan
of Private Land as Surveyed for Pablo Rimorin" approved by the
Department of Agriculture and Natural Resources. 44 ATICcS
The Republic of the Philippines counters that Section 29
of Presidential Decree No. 1529 provides that courts are "duty-
bound to consider not only the evidence presented by the [parties,]
but alto the reports of the Commissioner of Land Registration and
the Director of Lands[.]" 45
Assuming the Report dated May 31, 2005 is inadmissible in
evidence, La Tondea still failed to present proof that the land was
declared alienable and disposable on or before June 12,
1945. 46 La Tondea cannot rely on the notation on the Sephia
Plan of AP-01-004436 and its blueprint copy since this is not the
proof required by law. 47 Neither can La Tondea invoke the 30-
year prescriptive period under Republic Act No.
1942 since Presidential Decree No. 1073, already applicable
when La Tondea filed its application for registration in 2004,
requires possession from June 12, 1945 or earlier. 48 The
Republic of the Philippines quoted at length Heirs of Mario
Malabanan v. Republic 49 andRepublic v. Rizalvo, Jr. 50 on the
30-year rule on land registration. 51 Lastly, La Tondea cannot
invoke Article 1113 of the Civil Code since it did not present
evidence that the state declared the land "no longer intended for
public service or for the development of the national wealth." 52
The issues for resolution are:
First, whether petitioner La Tondea, Inc. complied with all the
requirements for land registration under Section 48 (b)
of Commonwealth Act No. 141, as amended, in relation to Section
14 (1) of Presidential Decree No. 1529;
Second, whether petitioner La Tondea, Inc. acquired a vested
right under the 1935 Constitution that allows a private corporation
to acquire alienable and disposable land of public domain; and
Finally, whether the Court of Appeals can consider the Report
dated May 31, 2005 that was not marked, identified, and formally
offered as evidence before the trial court.
We deny the Petition.
I
Commonwealth Act No. 141 known as The Public Land Act covers
matters such as "what lands are open to disposition or
concession[.]" 53 Section 48 (b), as amended, governs judicial
confirmation of imperfect title:
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 alienable and
disposable lands of the public domain, under a bona fide claim of
acquisition or ownership, since June 12, 1945, or earlier,
immediately preceding the filing of the applications 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. 54 (Emphasis supplied)
Section 14 (1) of Presidential Decree No. 1529 known as
the Property Registration Decree similarly reads:
SEC. 14. Who may apply. The following persons may file in the
proper Court of First Instance an application for registration of title
to land, whether personally or through their duly authorized
representatives:
1. Those who by themselves or through their predecessors-in-
interest have been in open, continuous, exclusive and notorious
possession and occupation of alienable and disposable lands of
the public domain under a bona fide claim of ownership since June
12, 1945, or earlier. TIADCc
Based on Section 48 (b) of the Public Land Act in relation to
Section 14 (1) of the Property Registration Decree, an applicant
for land registration must comply with the following requirements:
1. The applicant, by himself or through his predecessor-in-interest,
has been in possession and occupation of the property subject of
the application;
2. The possession and occupation must be open, continuous,
exclusive, and notorious;
3. The possession and occupation must be under a bona
fide claim of acquisition of ownership;
4. The possession and occupation must have taken place since
June 12, 1945, or earlier; and
5. The property subject of the application must be an agricultural
land of the public domain. 55
Petitioner argues that the survey plan notation stating that the land
was confirmed as alienable and disposable on August 12, 1934
should prevail over the Report dated May 31, 2005 stating that the
land was reclassified as alienable and disposable only on January
21, 1987 since this Report was not formally offered as evidence
before the trial court. 56
Respondent counters that Section 29 of Presidential Decree No.
1529 mandates the court to consider the Report dated May 31,
2005, 57 and even assuming this Report is inadmissible, petitioner
still failed to prove that the land was declared alienable and
disposable on or before June 12, 1945. 58 Section 29 reads:
SEC. 29. Judgment confirming title. All conflicting claims of
ownership and interest in the land subject of the application shall
be determined by the court. If the court,after considering the
evidence and the reports of the Commissioner of Land
Registration and the Director of Lands, finds that the applicant or
the oppositor has sufficient title proper for registration, judgment
shall be rendered confirming the title of the applicant, or the
oppositor, to the land or portions thereof. (Emphasis supplied)
The parties' arguments on the admissibility of the Report dated
May 31, 2005 as evidence on when the land was classified as
alienable and disposable are mooted by this court's ruling in Heirs
of Mario Malabanan v. Republic. 59
Heirs of Mario Malabanan clarified that the June 12, 1945
reckoning point refers to date of possession and not to date of land
classification as alienable and disposable. 60
This court held that "the agricultural land subject of the application
needs only to be classified as alienable and disposable as of the
time of the application, provided the applicant's possession and
occupation of the land dated back to June 12, 1945, or earlier." 61
Petitioner filed the application for registration on September 28,
2004. All dates claimed as dates of classification of the land as
alienable and disposable August 12, 1934 as stated in the
survey plan notation that petitioner relies upon; January 21, 1987
as stated in the Report dated May 31, 2005 that petitioner argues
to be inadmissible; and March 5, 1930 as stated in the "Plan of
Private Land as Surveyed for Pablo Rimorin" that petitioner would
like to present as additional evidence if the court remands the case
were all prior to the September 28, 2004 application date, in
compliance with the Heirs of Mario Malabanan ruling. AIDSTE
II
Petitioner's vested-right argument based on the 1935
Constitution that allows a private corporation to acquire alienable
and disposable land of public domain 62 must also fail.
Under the 1935 Constitution, private corporations can still acquire
public agricultural lands within the limited area
prescribed. 63 In The Director of Lands v. Intermediate Appellate
Court, 64 "the land was already private land when Acme acquired
it from its owners in 1962 and, thus, Acme acquired a registrable
title." 65
In Republic v. T.A.N. Properties, Inc., 66 this court found The
Director of Lands inapplicable since respondent corporation
"acquired the land on 8 August 1997 from Porting, who, along with
his predecessors-in-interest, has not shown to have been, as of
that date, in open, continuous, and adverse possession of the land
for 30 years since 12 June 1945[,] [i]n short, when respondent
acquired the land from Porting, the land was not yet private
property." 67
Similarly, petitioner has not shown any proof of its purchase of the
land, alleging that all records of this transaction were
burned. 68 Without evidence on the exact acquisition date, or the
character of its predecessor's occupation or possession of the
land, 69 no proof exists that the property was already private land
at the time of petitioner's acquisition.
Survey notations are not considered substantive evidence of the
land's classification as alienable and disposable. Republic v.
T.A.N. Properties, Inc. discussed the required proof:
Further, it is not enough for the PENRO or CENRO to certify that
a land is alienable and disposable. The applicant for land
registration must prove that the DENR Secretary had approved the
land classification and released the land of the public domain as
alienable and disposable, and that the land subject of the
application for registration falls within the approved area per
verification through survey by the PENRO or CENRO. In addition,
the applicant for land registration must present a copy of the
original classification approved by the DENR Secretary and
certified as a true copy by the legal custodian of the official records.
These facts must be established to prove that the land is alienable
and disposable. Respondent failed to do so because the
certifications presented by respondent do not, by themselves,
prove that the land is alienable and disposable. 70 (Emphasis
supplied)
Petitioner's contention that it acquired a vested right over the
land in 1972 since Republic Act No. 1942 was enacted on June
22, 1957 shortened the required possession to 30 years, thus, until
1972 or prior to the 1973 Constitution and Presidential Decree No.
1073, the required possession for judicial confirmation is at least
30 years or at least from 1942 71 also fails to convince.
Heirs of Mario Malabanan discussed that the 30-year-period rule
in Republic Act No. 1942 was repealed by Presidential Decree No.
1073 in 1977, thus, only applications for registration filed prior to
1977 may invoke Republic Act No. 1942. 72 Since petitioner only
filed for registration on September 28, 2004, the June 12, 1945
reckoning date under Presidential Decree No. 1073 applies.
III
Petitioner failed to prove possession and occupation since June
12, 1945 or earlier.
Petitioner's evidence consisted of tax declarations, and the
testimonies of Rosendo Bautista and Victor Dumuk. 73
The trial court granted the application, despite lack of records
showing petitioner's purchase and possession of the land prior to
June 12, 1945, by relying on Rosendo Bautista's testimony:
Based on the evidences [sic] presented, testimonial and
documentary as well, it is appearing that the applicant company,
La Tondea, Inc., thru its representative has established a
satisfactory proof that it has a registrable title over the subject
property, it being a corporation duly organized and existing under
the law of the Philippines with principal address at CPJ Bldg., 105
Carlos Palanca, Jr. St., Legaspi Village, Makati City, Metro Manila,
and qualified to own, acquire and possess land in the
Philippines, it being established that its possession dates
back to 1948 when it was first declared for the first time but before
that, said applicant La Tondea, Inc. has owned the land subject
of this case before the Second World War since the oldest tax
declaration recorded which is Tax declaration No. 1745 series of
1948 cancelled Tax declaration No. 6590. Besides, this Court
believes the testimony of Rosendo Bautista to be trustworthy
being given in the ordinary course of business when he
stated that La Tondea, Inc. acquired this property by
purchase from a certain Pablo Rimorin but he had no records
about that transaction and all that the company has are tax
declarations as early as 1948 and tax receipt. Hence, applicant
La Tondea, Inc. has established a satisfactory proof that it has a
reg[i]strable title to the said land subject of this case since it has
owned it for more than fifty-seven (57) years or more. 74 AaCTcI
The Court of Appeals did not err in reversing and setting aside the
trial court's Decision, and dismissing petitioner's application for
registration. It discussed the insufficiency of proof regarding
petitioner's acquisition of the land and, consequently, the
character of the alleged possession by its predecessor-in-interest:
The OSG correctly points out the property is incapable of being
the subject matter of an application for judicial confirmation of
imperfect title under C.A. 141, as amended, even by a natural
person because of the requirement that the period of possession
must be from June 12, 1945 or earlier. Confronted with the DENR-
CENRO Report dated May 31, 2005, appellee did not present
proof to establish its claim that the property was already alienable
and disposable from the time it acquired the same in 1948, let
alone, its allegation that it acquired the property by
purchase. Even Appellee's exact date of acquisition as
purported buyer was not shown with clarity. Neither did it
show how its predecessor-in-interest himself got hold of the
property, the character of his possession or occupation, and
how long a time did he exercise the same on the land, if at
all. 75 (Emphasis supplied)
On the tax declarations, the oldest recorded one presented by
petitioner was for year 1948. 76 This does not prove possession
on or before June 12, 1945. 77
In Republic v. Heirs of Doroteo Montoya, 78 the only evidence
presented to prove occupation and possession from 1940 was a
tax declaration for year 1947 with notation that realty tax payments
were paid since 1940. 79 This court discussed that "[a] tax
declaration, much less a tax declaration the existence of which is
proved by means of an annotation, is not a conclusive evidence of
ownership, which is, at best, only a basis for inferring
possession." 80
Petitioner claims possession even before the Second World War,
yet petitioner only produced nine (9) tax declarations. 81 This
court has held that "intermittent and sporadic assertion of alleged
ownership does not prove open, continuous, exclusive and
notorious possession and occupation." 82
This court has also held that "it is only when these tax declarations
are coupled with proof of actual possession of the property that
they may become the basis of a claim of ownership." 83
On property administrator Victor Dumuk's testimony, he
mentioned that his father was property administrator before the
Second World War until he died in 1984 after which his mother,
Felicidad Dumuk, took over. 84 While the tax declarations
indicated his father as property administrator, 85 again, none of
these were issued on or before June 12, 1945.
The letter dated March 23, 1994 86 of petitioner's VP Treasurer
Amando C. Ramat, Jr. to Victor Dumuk confirming Victor Dumuk
as caretaker of all petitioner's properties in Bauang, La Union
effective January 1, 1994 87 also does not prove possession on
or before June 12, 1945.
Since petitioner failed to comply with all the requisites for
registration as provided by law, the Court of Appeals did not err in
reversing the trial court, and dismissing petitioner's application for
registration.
WHEREFORE, the Petition is DENIED. EcTCAD
SO ORDERED.
||| (La Tondea, Inc. v. Republic, G.R. No. 194617, [August 5,
2015])
HEIRS OF MALABANAN v. REPUBLIC
EN BANC
[G.R. No. 179987. April 29, 2009.]
HEIRS OF MARIO MALABANAN, petitioner, vs. REPUBLIC OF
THE PHILIPPINES, respondent.
DECISION
TINGA, J p:
One main reason why the informal sector has not become formal
is that from Indonesia to Brazil, 90 percent of the informal lands
are not titled and registered. This is a generalized phenomenon in
the so-called Third World. And it has many
consequences. STHDAc
xxx xxx xxx
The question is: How is it that so many governments, from
Suharto's in Indonesia to Fujimori's in Peru, have wanted to title
these people and have not been able to do so effectively? One
reason is that none of the state systems in Asia or Latin America
can gather proof of informal titles. In Peru, the informals have
means of proving property ownership to each other which are not
the same means developed by the Spanish legal system. The
informals have their own papers, their own forms of agreements,
and their own systems of registration, all of which are very clearly
stated in the maps which they use for their own informal business
transactions.
If you take a walk through the countryside, from Indonesia to Peru,
and you walk by field after field in each field a different dog is
going to bark at you. Even dogs know what private property is all
about. The only one who does not know it is the government. The
issue is that there exists a "common law" and an "informal law"
which the Latin American formal legal system does not know how
to recognize.
Hernando De Soto 1
This decision inevitably affects all untitled lands currently in
possession of persons and entities other than the Philippine
government. The petition, while unremarkable as to the facts, was
accepted by the Court en banc in order to provide definitive clarity
to the applicability and scope of original registration proceedings
under Sections 14 (1) and 14 (2) of the Property Registration
Decree. In doing so, the Court confronts not only the relevant
provisions of the Public Land Act and the Civil Code, but also the
reality on the ground. The countrywide phenomenon of untitled
lands, as well as the problem of informal settlement it has
spawned, has unfortunately been treated with benign neglect. Yet
our current laws are hemmed in by their own circumscriptions in
addressing the phenomenon. Still, the duty on our part is primarily
to decide cases before us in accord with the Constitution and the
legal principles that have developed our public land law, though
our social obligations dissuade us from casting a blind eye on the
endemic problems.
I.
On 20 February 1998, Mario Malabanan filed an application for
land registration covering a parcel of land identified as Lot 9864-
A, Cad-452-D, Silang Cadastre, 2 situated in Barangay Tibig,
Silang Cavite, and consisting of 71,324 square
meters. Malabanan claimed that he had purchased the property
from Eduardo Velazco, 3 and that he and his predecessors-in-
interest had been in open, notorious, and continuous adverse and
peaceful possession of the land for more than thirty (30)
years. HaSEcA
The application was raffled to the Regional Trial Court of (RTC)
Cavite-Tagaytay City, Branch 18. The Office of the Solicitor
General (OSG) duly designated the Assistant Provincial
Prosecutor of Cavite, Jose Velazco, Jr., to appear on behalf of the
State. 4 Apart from presenting documentary
evidence, Malabanan himself and his witness, Aristedes Velazco,
testified at the hearing. Velazco testified that the property was
originally belonged * to a twenty-two hectare property owned by
his great-grandfather, Lino Velazco. Lino had four sons
Benedicto, Gregorio, Eduardo and Esteban the fourth being
Aristedes's grandfather. Upon Lino's death, his four sons inherited
the property and divided it among themselves. But by 1966,
Esteban's wife, Magdalena, had become the administrator of all
the properties inherited by the Velazco sons from their father, Lino.
After the death of Esteban and Magdalena, their son Virgilio
succeeded them in administering the properties, including Lot
9864-A, which originally belonged to his uncle, Eduardo Velazco.
It was this property that was sold by Eduardo Velazco
to Malabanan. 5
Assistant Provincial Prosecutor Jose Velazco, Jr. did not cross-
examine Aristedes Velazco. He further manifested that he "also
[knew] the property and I affirm the truth ofthe testimony given by
Mr. Velazco." 6 The Republic of the Philippines likewise did not
present any evidence to controvert the application.
Among the evidence presented by Malabanan during trial was a
Certification dated 11 June 2001, issued by the Community
Environment & Natural Resources Office,
Department of Environment and Natural Resources (CENRO-
DENR), which stated that the subject property was "verified to be
within the Alienable or Disposable land per Land Classification
Map No. 3013 established under Project No. 20-A and approved
as such under FAO 4-1656 on March 15, 1982." 7
On 3 December 2002, the RTC rendered judgment in
favor of Malabanan, the dispositive portion of which reads:
WHEREFORE, this Court hereby approves this application for
registration and thus places under the operation of Act 141, Act
496 and/or P.D. 1529, otherwise known as Property Registration
Law, the lands described in Plan Csd-04-0173123-D, Lot 9864-A
and containing an area of Seventy One Thousand Three Hundred
Twenty Four (71,324) Square Meters, as supported by its technical
description now forming part of the record of this case, in addition
to other proofs adduced in the name of MARIO MALABANAN,
who is oflegal age, Filipino, widower, and with residence at
Munting Ilog, Silang, Cavite. HcDaAI
Once this Decision becomes final and executory, the
corresponding decree of registration shall forthwith issue.
SO ORDERED.
The Republic interposed an appeal to the Court of Appeals,
arguing that Malabanan had failed to prove that the property
belonged to the alienable and disposable land ofthe public
domain, and that the RTC had erred in finding that he had been in
possession of the property in the manner and for the length of time
required by law for confirmation of imperfect title.
On 23 February 2007, the Court of Appeals rendered a
Decision 8 reversing the RTC and dismissing the
application of Malabanan. The appellate court held that under
Section 14 (1) of the Property Registration Decree any
period of possession prior to the classification of the lots as
alienable and disposable was inconsequential and should be
excluded from the computation of the period of possession. Thus,
the appellate court noted that since the CENRO-DENR
certification had verified that the property was declared alienable
and disposable only on 15 March 1982, the Velazcos' possession
prior to that date could not be factored in the computation of the
period of possession. This interpretation of the
Court of Appeals of Section 14 (1) of the Property Registration
Decree was based on the Court's ruling in Republic v. Herbieto. 9
Malabanan died while the case was pending with the
Court of Appeals; 10 hence, it was his heirs who appealed the
decision of the appellate court. Petitioners, before this Court, rely
on our ruling in Republic v. Naguit, 11 which was handed down
just four months prior to Herbieto. Petitioners suggest that the
discussion in Herbieto cited by the Court of Appeals is
actually obiter dictum since the Metropolitan Trial Court therein
which had directed the registration of the property had no
jurisdiction in the first place since the requisite notice of hearing
was published only after the hearing had already
begun. Naguit, petitioners argue, remains the controlling doctrine,
especially when the property in question is agricultural land.
Therefore, with respect to agricultural lands, any possession prior
to the declaration of the alienable property as disposable may be
counted in reckoning the period of possession to perfect title
under the Public Land Act and the Property Registration Decree.
The petition was referred to the Court en banc, 12 and on 11
November 2008, the case was heard on oral arguments. The
Court formulated the principal issues for the oral arguments, to
wit: HICEca
1. In order that an alienable and disposable land of the public
domain may be registered under Section 14(1) of Presidential
Decree No. 1529, otherwise known as the Property Registration
Decree, should the land be classified as alienable and disposable
as of June 12, 1945 or is it sufficient that such classification occur
at any time prior to the filing of the applicant for registration
provided that it is established that the applicant has been in open,
continuous, exclusive and notorious possession of the land under
a bona fide claim of ownership since June 12, 1945 or earlier?
2. For purposes of Section 14(2) of the Property Registration
Decree may a parcel of land classified as alienable and
disposable be deemed private land and therefore susceptible to
acquisition by prescription in accordance with the Civil Code?
3. May a parcel of land established as agricultural in character
either because of its use or because its slope is below
that of forest lands be registrable under Section
14(2) ofthe Property Registration Decree in relation to the
provisions of the Civil Code on acquisitive prescription?
4. Are petitioners entitled to the registration of the subject land in
their names under Section 14(1) or Section 14(2) of the Property
Registration Decree or both? 13
Based on these issues, the parties formulated their respective
positions.
With respect to Section 14 (1), petitioners reiterate that the
analysis of the Court in Naguit is the correct interpretation of the
provision. The seemingly contradictory pronouncement
in Herbieto, it is submitted, should be considered obiter
dictum, since the land registration proceedings therein was
void ab initio due to lack of publication of the notice of initial
hearing. Petitioners further point out that in Republic v.
Bibonia, 14 promulgated in June of 2007, the Court
applied Naguit and adopted the same observation that the
preferred interpretation by the OSG of Section 14 (1) was patently
absurd. For its part, the OSG remains insistent that for Section 14
(1) to apply, the land should have been classified as alienable and
disposable as of 12 June 1945. Apart from Herbieto, the OSG also
cites the subsequent rulings
in Buenaventura v. Republic, 15 Fieldman Agricultural
Trading v. Republic 16 and Republic v. Imperial Credit
Corporation, 17 as well as the earlier case of Director of Lands v.
Court of Appeals. 18 ACTEHI
With respect to Section 14 (2), petitioners submit that open,
continuous, exclusive and notorious possession of an alienable
land of the public domain for more than 30 years ipso
jure converts the land into private property, thus placing it under
the coverage of Section 14 (2). According to them, it would not
matter whether the land sought to be registered was previously
classified as agricultural land of the public domain so long as, at
the time of the application, the property had already been
"converted" into private property through prescription. To bolster
their argument, petitioners cite extensively from our 2008 ruling
in Republic v. T.A.N. Properties. 19
The arguments submitted by the OSG with respect to Section 14
(2) are more extensive. The OSG notes that under Article
1113 of the Civil Code, the acquisitive
prescription of properties of the State refers to "patrimonial
property", while Section 14 (2) speaks of "private lands". It
observes that the Court has yet to decide a case that presented
Section 14 (2) as a ground for application for registration, and that
the 30-year possession period refers to the period of possession
under Section 48 (b) of the Public Land Act, and not the
concept of prescription under the Civil Code. The OSG further
submits that, assuming that the 30-year prescriptive period can run
against public lands, said period should be reckoned from the time
the public land was declared alienable and disposable.
Both sides likewise offer special arguments with respect to the
particular factual circumstances surrounding the subject property
and the ownership thereof.
II.
First, we discuss Section 14 (1) of the Property Registration
Decree. For a full understanding of the provision, reference has to
be made to the Public Land Act. HSEIAT
A.
Commonwealth Act No. 141, also known as the Public Land Act,
has, since its enactment, governed the classification and
disposition of lands of the public domain. The President is
authorized, from time to time, to classify the lands of the public
domain into alienable and disposable, timber, or mineral
lands. 20 Alienable and disposable lands ofthe public domain are
further classified according to their uses into (a) agricultural; (b)
residential, commercial, industrial, or for similar productive
purposes; (c) educational, charitable, or other similar purposes; or
(d) reservations for town sites and for public and quasi-public
uses. 21
May a private person validly seek the registration in his/her
name of alienable and disposable lands of the public domain?
Section 11 of the Public Land Act acknowledges that public lands
suitable for agricultural purposes may be disposed of "by
confirmation of imperfect or incomplete titles" through "judicial
legalization". 22 Section 48 (b) of the Public Land Act, as
amended by P.D. No. 1073, supplies the details and unmistakably
grants that right, subject to the requisites stated therein:
Sec. 48. The following described citizens of the Philippines,
occupying lands of the public domain or claiming to own any such
land or an interest therein, but 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 alienable and disposable
lands of the public domain, under a bona fide
claim of acquisition of ownership, since June 12, 1945, or earlier,
immediately preceding the filing of the application for
confirmation of title except when prevented by war or force
majeure. These shall be conclusively presumed to have performed
all the conditions essential to a Government grant and shall be
entitled to a certificate of title under the provisions of this
chapter. DEHcTI
Section 48 (b) of Com. Act No. 141 received its present wording in
1977 when the law was amended by P.D. No. 1073. Two
significant amendments were introduced by P.D. No.
1073. First, the term "agricultural lands" was changed to "alienable
and disposable lands of the public domain". The OSG submits that
this amendment restricted the scope ofthe lands that may be
registered. 23 This is not actually the case. Under Section 9 of the
Public Land Act, "agricultural lands" are a mere
subset of "lands of the public domain alienable or open to
disposition." Evidently, alienable and disposable lands of the
public domain are a larger class than only "agricultural lands".
Second, the length of the requisite possession was changed from
possession for "thirty (30) years immediately preceding the
filing of the application" to possession "since June 12, 1945 or
earlier". The Court in Naguit explained:
When the Public Land Act was first promulgated in 1936, the
period of possession deemed necessary to vest the right to
register their title to agricultural lands of the public domain
commenced from July 26, 1894. However, this period was
amended by R.A. No. 1942, which provided that the bona
fide claim of ownership must have been for at least thirty (30)
years. Then in 1977, Section 48(b) of the Public Land Act was
again amended, this time by P.D. No. 1073, which pegged the
reckoning date at June 12, 1945. . . .
It bears further observation that Section 48 (b) of Com. Act No,
141 is virtually the same as Section 14 (1) of the Property
Registration Decree. Said Decree codified the various laws
relative to the registration of property, including lands of the public
domain. It is Section 14 (1) that operationalizes the
registration of such lands of the public domain. The provision
reads:
SEC. 14. Who may apply. The following persons may file in the
proper Court of First Instance an application for registration of title
to land, whether personally or through their duly authorized
representatives:
(1) those who by themselves or through their predecessors-in-
interest have been in open, continuous, exclusive and notorious
possession and occupation of alienable and disposable
lands of the public domain under a bona fide claim of ownership
since June 12, 1945, or earlier. SDTIaE
Notwithstanding the passage of the Property Registration
Decree and the inclusion of Section 14 (1) therein, the Public Land
Act has remained in effect. Both laws commonly refer to persons
or their predecessors-in-interest who "have been in open,
continuous, exclusive and notorious possession and
occupation of alienable and disposable lands of the public domain
under a bona fide claim of ownership since June 12, 1945, or
earlier." That circumstance may have led to the impression that
one or the other is a redundancy, or that Section 48 (b) of the
Public Land Act has somehow been repealed or mooted. That is
not the case.
The opening clauses of Section 48 of the Public Land Act and
Section 14 of the Property Registration Decree warrant
comparison:
Sec. 48 [of the Public Land Act]. The following described
citizens of the Philippines, occupying lands of the public domain or
claiming to own any such land or an interest therein, but 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
Sec. 14 [of the Property Registration Decree]. Who may apply.
The following persons may file in the proper Court of First Instance
an application for registration of title to land, whether personally or
through their duly authorized representatives:
xxx xxx xxx
It is clear that Section 48 of the Public Land Act is more
descriptive of the nature of the right enjoyed by the possessor
than Section 14 of the Property Registration Decree, which seems
to presume the pre-existence of the right, rather than establishing
the right itself for the first time. It is proper to assert that it is the
Public Land Act, as amended by P.D. No. 1073 effective 25
January 1977, that has primarily established the right of a Filipino
citizen who has been "in open, continuous, exclusive, and
notorious possession and occupation of alienable and disposable
lands of the public domain, under a bona fide
claim of acquisition of ownership, since June 12, 1945" to perfect
or complete his title by applying with the proper court for the
confirmation of his ownership claim and the issuance of the
corresponding certificate of title. DCSETa
Section 48 can be viewed in conjunction with the afore-quoted
Section 11 of the Public Land Act, which provides that public lands
suitable for agricultural purposes may be disposed of by
confirmation of imperfect or incomplete titles, and given the notion
that both provisions declare that it is indeed the Public Land
Act that primarily establishes the substantive ownership of the
possessor who has been in possession of the property since 12
June 1945. In turn, Section 14 (a) of the Property Registration
Decree recognizes the substantive right granted under Section 48
(b) of the Public Land Act, as well provides the corresponding
original registration procedure for the judicial confirmation of an
imperfect or incomplete title.
There is another limitation to the right granted under Section 48
(b). Section 47 of the Public Land Act limits the period within which
one may exercise the right to seek registration under Section 48.
The provision has been amended several times, most recently
by Rep. Act No. 9176 in 2002. It currently reads thus:
Section 47. The persons specified in the next following section are
hereby granted time, not to extend beyond December 31, 2020
within which to avail of the benefits of this Chapter: Provided, That
this period shall apply only where the area applied for does not
exceed twelve (12) hectares: Provided, further, That the several
periods of time designated by the President in accordance with
Section Forty-Five of this Act shall apply also to the lands
comprised in the provisions of this Chapter, but this Section shall
not be construed as prohibiting any said persons from acting under
this Chapter at any time prior to the period fixed by the
President. 24
Accordingly under the current state of the law, the substantive
right granted under Section 48 (b) may be availed of only until 31
December 2020.
B.
Despite the clear text of Section 48 (b) of the Public Land Act, as
amended and Section 14 (a) of the Property Registration Decree,
the OSG has adopted the position that for one to acquire the right
to seek registration of an alienable and disposable land of the
public domain, it is not enough that the applicant and his/her
predecessors-in-interest be in possession under a bona
fide claim of ownership since 12 June 1945; the alienable and
disposable character of the property must have been declared
also as of 12 June 1945. Following the OSG's approach, all lands
certified as alienable and disposable after 12 June 1945 cannot be
registered either under Section 14 (1) of the Property Registration
Decree or Section 48 (b) of the Public Land Act as amended. The
absurdity of such an implication was discussed in Naguit. EcTDCI
Petitioner suggests an interpretation that the alienable and
disposable character of the land should have already been
established since June 12, 1945 or earlier. This is not borne out
by the plain meaning of Section 14(1). "Since June 12, 1945", as
used in the provision, qualifies its antecedent phrase "under a
bonafide claim of ownership". Generally speaking, qualifying
words restrict or modify only the words or phrases to which they
are immediately associated, and not those distantly or remotely
located. 25 Ad proximum antecedents fiat relation nisi impediatur
sentencia.
Besides, we are mindful of the absurdity that would result if we
adopt petitioner's position. Absent a legislative amendment, the
rule would be, adopting the OSG's view, that all lands of the public
domain which were not declared alienable or disposable before
June 12, 1945 would not be susceptible to original registration, no
matter the length ofunchallenged possession by the occupant.
Such interpretation renders paragraph (1) of Section 14 virtually
inoperative and even precludes the government from giving it
effect even as it decides to reclassify public agricultural lands as
alienable and disposable. The unreasonableness of the situation
would even be aggravated considering that before June 12, 1945,
the Philippines was not yet even considered an independent
state.
Accordingly, the Court in Naguit explained:
[T]he more reasonable interpretation of Section 14(1) is that it
merely requires the property sought to be registered as already
alienable and disposable at the time the application for
registration of title is filed. If the State, at the time the application
is made, has not yet deemed it proper to release the property for
alienation or disposition, the presumption is that the government
is still reserving the right to utilize the property; hence, the need to
preserve its ownership in the State irrespective of the
length of adverse possession even if in good faith. However, if the
property has already been classified as alienable and disposable,
as it is in this case, then there is already an intention on the
part of the State to abdicate its exclusive prerogative over the
property. EIcSTD
The Court declares that the correct interpretation of Section 14 (1)
is that which was adopted in Naguit. The contrary pronouncement
in Herbieto, as pointed out in Naguit,absurdly limits the
application of the provision to the point of virtual inutility since it
would only cover lands actually declared alienable and disposable
prior to 12 June 1945, even if the current possessor is able to
establish open, continuous, exclusive and notorious possession
under a bona fide claim of ownership long before that date.
Moreover, the Naguit interpretation allows more possessors under
a bona fide claim of ownership to avail of judicial
confirmation of their imperfect titles than what would be feasible
under Herbieto. This balancing fact is significant, especially
considering our forthcoming discussion on the scope and
reach of Section 14 (2) of the Property Registration Decree.
Petitioners make the salient observation that the contradictory
passages from Herbieto are obiter dicta since the land registration
proceedings therein is void ab initio in the first place due to
lack of the requisite publication of the notice of initial hearing.
There is no need to explicitly overturn Herbieto, as it suffices that
the Court's acknowledgment that the particular line of argument
used therein concerning Section 14 (1) is indeed obiter.
It may be noted that in the subsequent
case of Buenaventura, 26 the Court, citing Herbieto, again stated
that "[a]ny period of possession prior to the date when the [s]ubject
[property was] classified as alienable and disposable is
inconsequential and should be excluded from the
computation of the period of possession. . ." That statement, in the
context of Section 14 (1), is certainly erroneous. Nonetheless, the
passage as cited in Buenaventura should again be considered
as obiter. The application therein was ultimately granted, citing
Section 14 (2). The evidence submitted by petitioners therein did
not establish any mode of possession on their part prior to 1948,
thereby precluding the application of Section 14 (1). It is not even
apparent from the decision whether petitioners therein had
claimed entitlement to original registration following Section 14 (1),
their position being that they had been in exclusive possession
under a bona fide claim of ownership for over fifty (50) years, but
not before 12 June 1945. aCHDST
Thus, neither Herbieto nor its principal discipular
ruling Buenaventura has any precedental value with respect to
Section 14 (1). On the other hand, the ratio of Naguit is embedded
in Section 14 (1), since it precisely involved situation wherein the
applicant had been in exclusive possession under a bona
fide claim of ownership prior to 12 June 1945. The Court's
interpretation of Section 14 (1) therein was decisive to the
resolution of the case. Any doubt as to which
between Naguit or Herbieto provides the final word ofthe Court on
Section 14 (1) is now settled in favor of Naguit.
We noted in Naguit that it should be distinguished
from Bracewell v. Court of Appeals 27 since in the latter, the
application for registration had been filed before the land was
declared alienable or disposable. The dissent though
pronounces Bracewell as the better rule between the two. Yet two
years after Bracewell, its ponente, the esteemed Justice
Consuelo Ynares-Santiago, penned the ruling in Republic v.
Ceniza, 28 which involved a claim of possession that extended
back to 1927 over a public domain land that was declared
alienable and disposable only in
1980. Ceniza cited Bracewell, quoted extensively from it, and
following the mindset of the dissent, the attempt at registration
in Ceniza should have failed. Not so.
To prove that the land subject of an application for registration is
alienable, an applicant must establish the existence of a positive
act of the government such as a presidential proclamation or an
executive order; an administrative action; investigation
reports of Bureau of Lands investigators; and a legislative act or a
statute.
In this case, private respondents presented a certification dated
November 25, 1994, issued by Eduardo M. Inting, the Community
Environment and Natural Resources Officer in the
Department of Environment and Natural Resources Office in Cebu
City, stating that the lots involved were "found to be within the
alienable and disposable (sic) Block-I, Land Classification Project
No. 32-A, per map 2962 4-I555 dated December 9, 1980". This is
sufficient evidence to show the real character of the land
subject of private respondents' application. Further, the
certification enjoys a presumption of regularity in the
absence of contradictory evidence, which is true in this case.
Worth noting also was the observation of the Court of Appeals
stating that:
[n]o opposition was filed by the Bureaus of Lands and Forestry to
contest the application of appellees on the ground that the
property still forms part of the public domain. Nor is there any
showing that the lots in question are forestal land. . . . IDASHa
Thus, while the Court of Appeals erred in ruling that mere
possession of public land for the period required by law would
entitle its occupant to a confirmation of imperfect title, it did not err
in ruling in favor of private respondents as far as the first
requirement in Section 48(b) of the Public Land Act is concerned,
for they were able to overcome the burden of proving the
alienability of the land subject of their application.
As correctly found by the Court of Appeals, private respondents
were able to prove their open, continuous, exclusive and notorious
possession of the subject land even before the year 1927. As a
rule, we are bound by the factual findings of the Court of Appeals.
Although there are exceptions, petitioner did not show that this is
one of them. 29
Why did the Court in Ceniza, through the same eminent member
who authored Bracewell, sanction the registration under Section
48 (b) of public domain lands declared alienable or disposable
thirty-five (35) years and 180 days after 12 June 1945? The telling
difference is that in Ceniza, the application for registration was
filed nearly six (6) years after the land had been declared
alienable or disposable, while in Bracewell, the application was
filed nine (9) years before the land was declared alienable or
disposable. That crucial difference was also stressed in Naguit to
contradistinguish it from Bracewell, a difference which the dissent
seeks to belittle.
III.
We next ascertain the correct framework of analysis with respect
to Section 14 (2). The provision reads:
SEC. 14. Who may apply. The following persons may file in the
proper Court of First Instance an application for registration of title
to land, whether personally or through their duly authorized
representatives:
xxx xxx xxx
(2) Those who have acquired ownership over private lands by
prescription under the provisions of existing laws.
The Court in Naguit offered the following discussion concerning
Section 14 (2), which we did even then recognize, and still do, to
be an obiter dictum, but we nonetheless refer to it as material for
further discussion, thus:
Did the enactment of the Property Registration Decree and the
amendatory P.D. No. 1073 preclude the application for
registration of alienable lands of the public domain, possession
over which commenced only after June 12, 1945? It did not,
considering Section 14(2) of the Property Registration Decree,
which governs and authorizes the application of "those who have
acquired ownership of private lands by prescription under the
provisions of existing laws." DEcSaI
Prescription is one of the modes of acquiring ownership under the
Civil Code. [ 30 ] There is a consistent jurisprudential rule that
properties classified as alienable public land may be converted
into private property by reason of open, continuous and exclusive
possession of at least thirty (30) years. [ 31 ] With such
conversion, such property may now fall within the
contemplation of "private lands" under Section 14(2), and thus
susceptible to registration by those who have acquired ownership
through prescription. Thus, even if possession of the alienable
public land commenced on a date later than June 12, 1945, and
such possession being been open, continuous and exclusive, then
the possessor may have the right to register the land by
virtue of Section 14(2) of the Property Registration Decree.
Naguit did not involve the application of Section 14 (2), unlike in
this case where petitioners have based their registration bid
primarily on that provision, and where the evidence definitively
establishes their claim of possession only as far back as 1948. It
is in this case that we can properly appreciate the nuances of the
provision.
A.
The obiter in Naguit cited the Civil Code provisions on prescription
as the possible basis for application for original registration under
Section 14 (2). Specifically, it is Article 1113 which provides legal
foundation for the application. It reads:
All things which are within the commerce of men are
susceptible of prescription, unless otherwise provided.
Property of the State or any of its subdivisions not patrimonial in
character shall not be the object of prescription.
It is clear under the Civil Code that where lands of the public
domain are patrimonial in character, they are susceptible to
acquisitive prescription. On the other hand, among the public
domain lands that are not susceptible to acquisitive prescription
are timber lands and mineral lands. The Constitution itself
proscribes private ownership oftimber or mineral lands. caTESD
There are in fact several provisions in the Civil Code concerning
the acquisition of real property through prescription.
Ownership of real property may be acquired by ordinary
prescription of ten (10) years, 32 or through extraordinary
prescription of thirty (30) years. 33 Ordinary acquisitive
prescription requires possession in good faith, 34 as well as just
title. 35
When Section 14 (2) of the Property Registration Decree explicitly
provides that persons "who have acquired ownership over private
lands by prescription under the provisions of existing laws", it
unmistakably refers to the Civil Code as a valid basis for the
registration of lands. The Civil Code is the only existing law that
specifically allows the acquisition by prescription of private lands,
including patrimonial property belonging to the State. Thus, the
critical question that needs affirmation is whether Section 14 (2)
does encompass original registration proceedings over
patrimonial property of the State, which a private person has
acquired through prescription.
The Naguit obiter had adverted to a frequently reiterated
jurisprudence holding that properties classified as alienable public
land may be converted into private property by reason of open,
continuous and exclusive possession of at least thirty (30)
years. 36 Yet if we ascertain the source of the "thirty-year" period,
additional complexities relating to Section 14 (2) and to how
exactly it operates would emerge. For there are in fact two
distinct origins of the thirty (30)-year rule.
The first source is Rep. Act No. 1942, enacted in 1957, which
amended Section 48 (b) of the Public Land Act by granting the
right to seek original registration of alienable public lands through
possession in the concept of an owner for at least thirty years.
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: TDCaSE
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. (emphasis supplied) 37
This provision was repealed in 1977 with the enactment of P.D.
1073, which made the date 12 June 1945 the reckoning point for
the first time. Nonetheless, applications for registration filed prior
to 1977 could have invoked the 30-year rule introduced by Rep.
Act No. 1942.
The second source is Section 14 (2) of P.D. 1529 itself, at least by
implication, as it applies the rules on prescription under the Civil
Code, particularly Article 1113 in relation to Article 1137. Note that
there are two kinds of prescription under the Civil Code ordinary
acquisitive prescription and extraordinary acquisitive prescription,
which, under Article 1137, is completed "through uninterrupted
adverse possession. . . for thirty years, without need of title
or of good faith".
Obviously, the first source of the thirty (30)-year period rule, Rep.
Act No. 1942, became unavailable after 1977. At present, the only
legal basis for the thirty (30)-year period is the law on prescription
under the Civil Code, as mandated under Section 14 (2). However,
there is a material difference between how the thirty (30)-year rule
operated under Rep. Act No. 1942 and how it did under the Civil
Code.
Section 48 (b) of the Public Land Act, as amended by Rep. Act No.
1942, did not refer to or call into application the Civil Code
provisions on prescription. It merely set forth a requisite thirty-year
possession period immediately preceding the application for
confirmation of title, without any qualification as to whether the
property should be declared alienable at the beginning of, and
continue as such, throughout the entire thirty (30) years. There is
neither statutory nor jurisprudential basis to assert Rep. Act No.
1942 had mandated such a requirement, 38 similar to our earlier
finding with respect to the present language of Section 48 (b),
which now sets 12 June 1945 as the point of reference.
Then, with the repeal of Rep. Act No. 1942, the thirty-year
possession period as basis for original registration became
Section 14 (2) of the Property Registration Decree, which entitled
those "who have acquired ownership over private lands by
prescription under the provisions of existing laws" to apply for
original registration. Again, the thirty-year period is derived from
the rule on extraordinary prescription under Article 1137 of the
Civil Code. At the same time, Section 14 (2) puts into operation
the entire regime ofprescription under the Civil Code, a fact which
does not hold true with respect to Section 14 (1).
B.
Unlike Section 14 (1), Section 14 (2) explicitly refers to the
principles on prescription under existing laws. Accordingly, we are
impelled to apply the civil law concept ofprescription, as set forth
in the Civil Code, in our interpretation of Section 14 (2). There is
no similar demand on our part in the case of Section 14
(1). DSHTaC
The critical qualification under Article 1113 of the Civil Code is
thus: "[p]roperty of the State or any of its subdivisions not
patrimonial in character shall not be the object ofprescription". The
identification what consists of patrimonial property is provided by
Articles 420 and 421, which we quote in full:
Art. 420. The following things are property of public dominion:
(1) Those intended for public use, such as roads, canals, rivers,
torrents, ports and bridges constructed by the State, banks,
shores, roadsteads, and others of similar character;
(2) Those which belong to the State, without being for public use,
and are intended for some public service or for the
development of the national wealth.
Art. 421. All other property of the State, which is not of the
character stated in the preceding article, is patrimonial property.
It is clear that property of public dominion, which generally
includes property belonging to the State, cannot be the
object of prescription or, indeed, be subject of the
commerce of man. 39 Lands of the public domain, whether
declared alienable and disposable or not, are property of public
dominion and thus insusceptible to acquisition by prescription.
Let us now explore the effects under the Civil Code of a
declaration by the President or any duly authorized government
officer of alienability and disposability of lands ofthe public
domain. Would such lands so declared alienable and disposable
be converted, under the Civil Code, from property of the public
dominion into patrimonial property? After all, by connotative
definition, alienable and disposable lands may be the object of the
commerce of man; Article 1113 provides that all things within the
commerce of man are susceptible to prescription; and the same
provision further provides that patrimonial property of the State
may be acquired by prescription. IEcDCa
Nonetheless, Article 422 of the Civil Code states that
"[p]roperty of public dominion, when no longer intended for public
use or for public service, shall form part of the patrimonial
property of the State". It is this provision that controls how public
dominion property may be converted into patrimonial property
susceptible to acquisition by prescription. After all, Article 420 (2)
makes clear that those property "which belong to the State, without
being for public use, and are intended for some public service or
for the development of the national wealth" are public dominion
property. For as long as the property belongs to the State,
although already classified as alienable or disposable, it remains
property of the public dominion if when * it is "intended for some
public service or for the development of the national wealth".
Accordingly, there must be an express declaration by the
State that the public dominion property is no longer intended
for public service or the development ofthe national wealth or
that the property has been converted into patrimonial.
Without such express declaration, the property, even if
classified as alienable or disposable, remains property of the
public dominion, pursuant to Article 420 (2), and thus
incapable of acquisition by prescription. It is only when such
alienable and disposable lands are expressly declared by the
State to be no longer intended for public service or for the
development of the national wealth that the
period ofacquisitive prescription can begin to run. Such
declaration shall be in the form of a law duly enacted by
Congress or a Presidential Proclamation in cases where the
President is duly authorized by law.
It is comprehensible with ease that this reading of Section 14
(2) of the Property Registration Decree limits its scope and reach
and thus affects the registrability even oflands already declared
alienable and disposable to the detriment of the bona
fide possessors or occupants claiming title to the lands. Yet this
interpretation is in accord with the Regalian doctrine and its
concomitant assumption that all lands owned by the State,
although declared alienable or disposable, remain as such and
ought to be used only by the Government.
Recourse does not lie with this Court in the matter. The duty of the
Court is to apply the Constitution and the laws in accordance with
their language and intent. The remedy is to change the law, which
is the province of the legislative branch. Congress can very well
be entreated to amend Section 14 (2) of the Property Registration
Decree and pertinent provisions of the Civil Code to liberalize the
requirements for judicial confirmation of imperfect or incomplete
titles. aATEDS
The operation of the foregoing interpretation can be illustrated by
an actual example. Republic Act No. 7227, entitled "An Act
Accelerating The Conversion Of Military Reservations Into Other
Productive Uses, etc.", is more commonly known as the BCDA
law. Section 2 of the law authorizes the sale of certain military
reservations and portions ofmilitary camps in Metro Manila,
including Fort Bonifacio and Villamor Air Base. For
purposes of effecting the sale of the military camps, the law
mandates the President to transfer such military lands to the
Bases Conversion Development Authority (BCDA) 40 which in
turn is authorized to own, hold and/or administer them. 41 The
President is authorized to sell portions of the military camps, in
whole or in part. 42 Accordingly, the BCDA law itself declares that
the military lands subject thereof are "alienable and disposable
pursuant to the provisions of existing laws and regulations
governing sales of government properties." 43
From the moment the BCDA law was enacted the subject military
lands have become alienable and disposable. However, said lands
did not become patrimonial, as the BCDA law itself expressly
makes the reservation that these lands are to be sold in order to
raise funds for the conversion of the former American bases at
Clark and Subic. 44 Such purpose can be tied to either "public
service" or "the development of national wealth" under Article 420
(2). Thus, at that time, the lands remained property of the public
dominion under Article 420 (2), notwithstanding their status as
alienable and disposable. It is upon their sale as authorized under
the BCDA law to a private person or entity that such lands become
private property and cease to be property of the public dominion.
C.
Should public domain lands become patrimonial because they are
declared as such in a duly enacted law or duly promulgated
proclamation that they are no longer intended for public service or
for the development of the national wealth, would the
period of possession prior to the conversion of such public
dominion into patrimonial be reckoned in counting the prescriptive
period in favor of the possessors? We rule in the negative.
The limitation imposed by Article 1113 dissuades us from ruling
that the period of possession before the public domain land
becomes patrimonial may be counted for the
purpose of completing the prescriptive period.
Possession of public dominion property before it becomes
patrimonial cannot be the object of prescription according to the
Civil Code. As the application for registration under Section 14 (2)
falls wholly within the framework of prescription under the Civil
Code, there is no way that possession during the time that the land
was still classified as public dominion property can be counted to
meet the requisites of acquisitive prescription and justify
registration. EHTSCD
Are we being inconsistent in applying divergent rules for Section
14 (1) and Section 14 (2)? There is no inconsistency. Section 14
(1) mandates registration on the basis ofpossession, while
Section 14 (2) entitles registration on the
basis of prescription. Registration under Section 14 (1) is
extended under the aegis of the Property Registration
Decree and the Public Land Act while registration under
Section 14 (2) is made available both by the Property
Registration Decree and the Civil Code.
In the same manner, we can distinguish between the thirty-year
period under Section 48 (b) of the Public Land Act, as amended
by Rep. Act No. 1472, and the thirty-year period available through
Section 14 (2) of the Property Registration Decree in relation to
Article 1137 of the Civil Code. The period under the former
speaks of a thirty-year period of possession, while the period
under the latter concerns a thirty-year period of extraordinary
prescription. Registration under Section 48 (b) of the Public
Land Act as amended by Rep. Act No. 1472 is based on thirty
years of possession alone without regard to the Civil Code,
while the registration under Section 14 (2) ofthe Property
Registration Decree is founded on extraordinary prescription
under the Civil Code.
It may be asked why the principles of prescription under the Civil
Code should not apply as well to Section 14 (1). Notwithstanding
the vaunted status of the Civil Code, it ultimately is just
one of numerous statutes, neither superior nor inferior to other
statutes such as the Property Registration Decree. The legislative
branch is not bound to adhere to the framework set forth by the
Civil Code when it enacts subsequent legislation. Section 14 (2)
manifests a clear intent to interrelate the registration allowed under
that provision with the Civil Code, but no such intent exists with
respect to Section 14 (1).
IV.
One of the keys to understanding the framework we set forth today
is seeing how our land registration procedures correlate with our
law on prescription, which, under the Civil Code, is one of the
modes for acquiring ownership over property.
The Civil Code makes it clear that patrimonial property of the State
may be acquired by private persons through prescription. This is
brought about by Article 1113, which states that "[a]ll things which
are within the commerce of man are susceptible to prescription",
and that [p]roperty of the State or any of its subdivisions not
patrimonial in character shall not be the object of prescription".
There are two modes of prescription through which immovables
may be acquired under the Civil Code. The first is ordinary
acquisitive prescription, which, under Article 1117, requires
possession in good faith and with just title; and, under Article 1134,
is completed through possession of ten (10) years. There is
nothing in the Civil Code that bars a person from acquiring
patrimonial property of the State through ordinary acquisitive
prescription, nor is there any apparent reason to impose such a
rule. At the same time, there are indispensable requisites good
faith and just title. The ascertainment of good faith involves the
application of Articles 526, 527, and 528, as well as Article
1127 of the Civil Code, 45 provisions that more or less speak for
themselves.
On the other hand, the concept of just title requires some
clarification. Under Article 1129, there is just title for the
purposes of prescription "when the adverse claimant came into
possession of the property through one of the modes recognized
by law for the acquisition of ownership or other real rights, but the
grantor was not the owner or could not transmit any right". Dr.
Tolentino explains: ITCcAD
Just title is an act which has for its purpose the
transmission of ownership, and which would have actually
transferred ownership if the grantor had been the owner. This vice
or defect is the one cured by prescription. Examples: sale with
delivery, exchange, donation, succession, and dacion in
payment. 46
The OSG submits that the requirement of just title necessarily
precludes the applicability of ordinary acquisitive prescription to
patrimonial property. The major premise for the argument is that
"the State, as the owner and grantor, could not transmit ownership
to the possessor before the completion of the required
period of possession". 47 It is evident that the OSG erred when it
assumed that the grantor referred to in Article 1129 is the State.
The grantor is the one from whom the person invoking ordinary
acquisitive prescription derived the title, whether by sale,
exchange, donation, succession or any other mode of the
acquisition of ownership or other real rights. SIEHcA
Earlier, we made it clear that, whether under ordinary prescription
or extraordinary prescription, the period of possession preceding
the classification of public dominion lands as patrimonial cannot
be counted for the purpose of computing prescription. But after the
property has been become patrimonial, the period of prescription
begins to run in favor of the possessor. Once the requisite period
has been completed, two legal events ensue: (1) the patrimonial
property is ipso jure converted into private land; and (2) the person
in possession for the periods prescribed under the Civil Code
acquires ownership of the property by operation of the Civil Code.
It is evident that once the possessor automatically becomes the
owner of the converted patrimonial property, the ideal next step is
the registration of the property under the Torrens system. It should
be remembered that registration of property is not a
mode of acquisition of ownership, but merely a that Malabanan has acquired ownership over the subject property
mode of confirmation of ownership. 48
Looking back at the registration regime prior to the
adoption of the Property Registration Decree in 1977, it is
apparent that the registration system then did not fully
accommodate the acquisition of ownership of patrimonial property
under the Civil Code. What the system accommodated was the
confirmation of imperfect title brought about by the completion of a
period of possession ordained under the Public Land Act (either
30 years following Rep. Act No. 1942, or since 12 June 1945
following P.D. No. 1073).
The Land Registration Act 49 was noticeably silent on the
requisites for alienable public lands acquired through ordinary
prescription under the Civil Code, though it arguably did not
preclude such registration. 50 Still, the gap was lamentable,
considering that the Civil Code, by itself, establishes ownership
over the patrimonial property ofpersons who have completed the
prescriptive periods ordained therein. The gap was finally closed
with the adoption of the Property Registration Decree in 1977,
with Section 14 (2) thereof expressly authorizing original
registration in favor of persons who have acquired ownership over
private lands by prescription under the provisions of existing laws,
that is, the Civil Code as of now. AcDaEH
V.
We synthesize the doctrines laid down in this case, as follows:
(1) In connection with Section 14 (1) of the Property Registration
Decree, Section 48 (b) of the Public Land Act recognizes and
confirms that "those who by themselves or through their
predecessors in interest have been in open, continuous, exclusive,
and notorious possession and occupation of alienable and
disposable lands of the public domain, under a bona fide
claim of acquisition of ownership, since June 12, 1945" have
acquired ownership of, and registrable title to, such lands based
on the length and quality of their possession.
(a) Since Section 48 (b) merely requires possession since 12 June
1945 and does not require that the lands should have been
alienable and disposable during the entire period of possession,
the possessor is entitled to secure judicial confirmation of his title
thereto as soon as it is declared alienable and disposable, subject
to the timeframe imposed by Section 47 of the Public Land Act. 51
(b) The right to register granted under Section 48 (b) of the Public
Land Act is further confirmed by Section 14 (1) of the Property
Registration Decree.
(2) In complying with Section 14 (2) of the Property Registration
Decree, consider that under the Civil Code, prescription is
recognized as a mode of acquiring ownership of patrimonial
property. However, public domain lands become only patrimonial
property not only with a declaration that these are alienable or
disposable. There must also be an express government
manifestation that the property is already patrimonial or no longer
retained for public service or the development of national wealth,
under Article 422 ofthe Civil Code. And only when the property has
become patrimonial can the prescriptive period for the
acquisition of property of the public dominion begin to run.
(a) Patrimonial property is private property of the government. The
person acquires ownership of patrimonial property by prescription
under the Civil Code is entitled to secure registration thereof under
Section 14 (2) of the Property Registration Decree.
(b) There are two kinds of prescription by which patrimonial
property may be acquired, one ordinary and other extraordinary.
Under ordinary acquisitive prescription, a person acquires
ownership of a patrimonial property through possession for at
least ten (10) years, in good faith and with just title. Under
extraordinary acquisitive prescription, a person's uninterrupted
adverse possession of patrimonial property for at least thirty (30)
years, regardless of good faith or just title, ripens into ownership.
B.
We now apply the above-stated doctrines to the case at bar.
It is clear that the evidence of petitioners is insufficient to establish
under Section 48 (b) of the Public Land Act. There is no
substantive evidence to establish that Malabanan or petitioners as
his predecessors-in-interest have been in possession of the
property since 12 June 1945 or earlier. The earliest that petitioners
can date back their possession, according to their own evidence
the Tax Declarations they presented in particular is to the
year 1948. Thus, they cannot avail themselves of registration
under Section 14 (1) of the Property Registration
Decree. EaCDAT
Neither can petitioners properly invoke Section 14 (2) as basis for
registration. While the subject property was declared as alienable
or disposable in 1982, there is no competent evidence that is no
longer intended for public use service or for the
development of the national evidence, conformably with Article
422 of the Civil Code. The classification of the subject property as
alienable and disposable land of the public domain does not
change its status as property of the public dominion under Article
420 (2) ofthe Civil Code. Thus, it is insusceptible to acquisition by
prescription.
VI.
A final word. The Court is comfortable with the correctness of the
legal doctrines established in this decision. Nonetheless,
discomfiture over the implications of today's ruling cannot be
discounted. For, every untitled property that is occupied in the
country will be affected by this ruling. The social implications
cannot be dismissed lightly, and the Court would be abdicating its
social responsibility to the Filipino people if we simply levied the
law without comment.
The informal settlement of public lands, whether declared
alienable or not, is a phenomenon tied to long-standing habit and
cultural acquiescence, and is common among the so-called "Third
World" countries. This paradigm powerfully evokes the disconnect
between a legal system and the reality on the ground. The law so
far has been unable to bridge that gap. Alternative
means of acquisition of these public domain lands, such as
through homestead or free patent, have proven unattractive due
to limitations imposed on the grantee in the encumbrance or
alienation of said properties. 52 Judicial confirmation of imperfect
title has emerged as the most viable, if not the most attractive
means to regularize the informal settlement of alienable or
disposable lands of the public domain, yet even that system, as
revealed in this decision, has considerable limits.
There are millions upon millions of Filipinos who have individually
or exclusively held residential lands on which they have lived and
raised their families. Many more have tilled and made productive
idle lands of the State with their hands. They have been regarded
for generation by their families and their communities as common
law owners. There is much to be said about the
virtues of according them legitimate states. Yet such virtues are
not for the Court to translate into positive law, as the law itself
considered such lands as property of the public dominion. It could
only be up to Congress to set forth a new phase of land reform to
sensibly regularize and formalize the settlement of such lands
which in legal theory are lands of the public domain before the
problem becomes insoluble. This could be accomplished, to cite
two examples, by liberalizing the standards for judicial
confirmation of imperfect title, or amending the Civil Code itself to
ease the requisites for the conversion of public dominion property
into patrimonial.
One's sense of security over land rights infuses into every
aspect of well-being not only of that individual, but also to the
person's family. Once that sense of security is deprived, life and
livelihood are put on stasis. It is for the political branches to bring
welcome closure to the long pestering problem. caHIAS
WHEREFORE, the Petition is DENIED. The Decision of the
Court of Appeals dated 23 February 2007 and Resolution dated 2
October 2007 are AFFIRMED. No pronouncement as to costs.
SO ORDERED.
||| (Heirs of Malabanan v. Republic, G.R. No. 179987, [April 29,
2009], 605 PHIL 244-326)
EN BANC
[G.R. No. 179987. September 3, 2013.]
HEIRS OF MARIO MALABANAN (Represented by Sally
A. Malabanan), petitioners, vs. REPUBLIC OF THE
PHILIPPINES, respondent.
RESOLUTION
BERSAMIN, J p:
For our consideration and resolution are the motions for
reconsideration of the parties who both assail the decision
promulgated on April 29, 2009, whereby we upheld the ruling ofthe
Court of Appeals (CA) denying the application of the petitioners
for the registration of a parcel of land situated in Barangay Tibig,
Silang, Cavite on the ground that they had not established by
sufficient evidence their right to the registration in accordance with
either Section 14 (1) or Section 14 (2) of Presidential Decree No.
1529 (Property Registration Decree). SIcEHC
Antecedents
The property subject of the application for registration is a
parcel of land situated in Barangay Tibig, Silang, Cavite, more
particularly identified as Lot 9864-A, Cad-452-D, with an
area of 71,324-square meters. On February 20, 1998, applicant
Mario Malabanan, who had purchased the property from Eduardo
Velazco, filed an application for land registration covering the
property in the Regional Trial Court (RTC) in Tagaytay City,
Cavite, claiming that the property formed part of the alienable and
disposable land of the public domain, and that he and his
predecessors-in-interest had been in open, continuous,
uninterrupted, public and adverse possession and
occupation of the land for more than 30 years, thereby entitling
him to the judicial confirmation of his title. 1
To prove that the property was an alienable and disposable
land of the public domain, Malabanan presented during trial a
certification dated June 11, 2001 issued by the Community
Environment and Natural Resources Office (CENRO) of the
Department of Environment and Natural Resources (DENR),
which reads:
This is to certify that the parcel of land designated as Lot No. 9864
Cad 452-D, Silang Cadastre as surveyed for Mr. Virgilio Velasco
located at Barangay Tibig, Silang, Cavite containing an
area of 249,734 sq. meters as shown and described on the Plan
Ap-04-00952 is verified to be within the Alienable or Disposable
land per Land Classification Map No. 3013 established under
Project No. 20-A and approved as such under FAO 4-1656 on
March 15, 1982. 2
After trial, on December 3, 2002, the RTC rendered judgment
granting Malabanan's application for land registration, disposing
thusly:
WHEREFORE, this Court hereby approves this application for
registration and thus places under the operation of Act 141, Act
496 and/or P.D. 1529, otherwise known as Property Registration
Law, the lands described in Plan Csd-04-0173123-D, Lot 9864-A
and containing an area of Seventy One Thousand Three Hundred
Twenty Four (71,324) Square Meters, as supported by its technical
description now forming part of the record of this case, in addition
to other proofs adduced in the name of MARIO MALABANAN,
who is oflegal age, Filipino, widower, and with residence at
Munting Ilog, Silang, Cavite. aDACcH
Once this Decision becomes final and executory, the
corresponding decree of registration shall forthwith issue.
SO ORDERED. 3
The Office of the Solicitor General (OSG) appealed the judgment
to the CA, arguing that Malabanan had failed to prove that the
property belonged to the alienable and disposable land of the
public domain, and that the RTC erred in finding that he had been
in possession of the property in the manner and for the
length of time required by law for confirmation of imperfect title.
On February 23, 2007, the CA promulgated its decision reversing
the RTC and dismissing the application for
registration of Malabanan. Citing the ruling in Republic v.
Herbieto(Herbieto), 4 the CA declared that under Section 14
(1) of the Property Registration Decree, any period of possession
prior to the classification of the land as alienable and disposable
was inconsequential and should be excluded from the
computation of the period of possession. Noting that the CENRO-
DENR certification stated that the property had been declared
alienable and disposable only on March 15, 1982, Velazco's
possession prior to March 15, 1982 could not be tacked for
purposes of computing Malabanan's period ofpossession.
Due to Malabanan's intervening demise during the appeal in the
CA, his heirs elevated the CA's decision of February 23, 2007 to
this Court through a petition for review on certiorari.
The petitioners assert that the ruling in Republic v.
Court of Appeals and Corazon Naguit 5 (Naguit) remains the
controlling doctrine especially if the property involved is
agricultural land. In this regard, Naguit ruled that any
possession of agricultural land prior to its declaration as alienable
and disposable could be counted in the reckoning of the
period ofpossession to perfect title under the Public Land
Act (Commonwealth Act No. 141) and the Property Registration
Decree. They point out that the ruling in Herbieto, to the effect that
the declaration of the land subject of the application for
registration as alienable and disposable should also date back to
June 12, 1945 or earlier, was a mere obiter dictumconsidering that
the land registration proceedings therein were in fact found and
declared void ab initio for lack of publication of the notice of initial
hearing. AacCIT
The petitioners also rely on the ruling in Republic v. T.A.N.
Properties, Inc. 6 to support their argument that the property had
been ipso jure converted into private property by reason of the
open, continuous, exclusive and notorious possession by their
predecessors-in-interest of an alienable land of the public domain
for more than 30 years. According to them, what was essential was
that the property had been "converted" into private property
through prescription at the time of the application without regard to
whether the property sought to be registered was previously
classified as agricultural land of the public domain.
As earlier stated, we denied the petition for review
on certiorari because Malabanan failed to establish by sufficient
evidence possession and occupation of the property on his part
and on the part of his predecessors-in interest since June 12,
1945, or earlier.
Petitioners' Motion for Reconsideration
In their motion for reconsideration, the petitioners submit that the
mere classification of the land as alienable or disposable should
be deemed sufficient to convert it into patrimonial property of the
State. Relying on the rulings in Spouses de Ocampo v.
Arlos, 7 Menguito v. Republic 8 and Republic v. T.A.N.
Properties, Inc., 9 they argue that the reclassification of the land
as alienable or disposable opened it to acquisitive prescription
under the Civil Code; that Malabanan had purchased the property
from Eduardo Velazco believing in good faith that Velazco and his
predecessors-in-interest had been the real owners of the land with
the right to validly transmit title and ownership thereof; that
consequently, the ten-year period prescribed by Article
1134 of the Civil Code, in relation to Section 14 (2) of the Property
Registration Decree, applied in their favor; and that
when Malabanan filed the application for registration on February
20, 1998, he had already been in possession of the land for almost
16 years reckoned from 1982, the time when the land was
declared alienable and disposable by the State. ASTcaE
The Republic's Motion for Partial Reconsideration
The Republic seeks the partial reconsideration in order to obtain a
clarification with reference to the application of the rulings
in Naguit and Herbieto.
Chiefly citing the dissents, the Republic contends that the decision
has enlarged, by implication, the interpretation of Section 14
(1) of the Property Registration Decree through judicial legislation.
It reiterates its view that an applicant is entitled to registration only
when the land subject of the application had been declared
alienable and disposable since June 12, 1945 or earlier.
Ruling
We deny the motions for reconsideration.
In reviewing the assailed decision, we consider to be imperative to
discuss the different classifications of land in relation to the
existing applicable land registration laws of the Philippines.
Classifications of land according to
ownership
Land, which is an immovable property, 10 may be classified as
either of public dominion or of private ownership. 11 Land is
considered of public dominion if it either: (a) is intended for public
use; or (b) belongs to the State, without being for public use, and
is intended for some public service or for the development of the
national wealth. 12 Land belonging to the State that is not of such
character, or although of such character but no longer intended for
public use or for public service forms part of the patrimonial
property of the State. 13Land that is other than part of the
patrimonial property of the State, provinces, cities and
municipalities is of private ownership if it belongs to a private
individual.
Pursuant to the Regalian Doctrine (Jura Regalia), a legal concept
first introduced into the country from the West by Spain through
the Laws of the Indies and the Royal Cedulas, 14 all lands of the
public domain belong to the State. 15 This means that the State is
the source of any asserted right to ownership of land, and is
charged with the conservation of such patrimony. 16 All lands not
appearing to be clearly under private ownership are presumed to
belong to the State. Also, public lands remain part of the
inalienable land of the public domain unless the State is shown to
have reclassified or alienated them to private
persons. 17 HCEcAa
Classifications of public lands
according to alienability
Whether or not land of the public domain is alienable and
disposable primarily rests on the classification of public lands
made under the Constitution. Under the 1935
Constitution, 18 lands of the public domain were classified into
three, namely, agricultural, timber and mineral. 19 Section 10,
Article XIV of the 1973 Constitution classified lands of the public
domain into seven, specifically, agricultural, industrial or
commercial, residential, resettlement, mineral, timber or forest,
and grazing land, with the reservation that the law might provide
other classifications. The 1987 Constitution adopted the
classification under the 1935 Constitution into agricultural, forest
or timber, and mineral, but added national parks. 20 Agricultural
lands may be further classified by law according to the uses to
which they may be devoted. 21 The identification of lands
according to their legal classification is done exclusively by and
through a positive act of the Executive Department. 22
Based on the foregoing, the Constitution places a limit on the
type of public land that may be alienated. Under Section 2, Article
XII of the 1987 Constitution, only agricultural lands ofthe public
domain may be alienated; all other natural resources may not be.
Alienable and disposable lands of the State fall into two
categories, to wit: (a) patrimonial lands of the State, or those
classified as lands of private ownership under Article
425 of the Civil Code, 23 without limitation; and (b) lands of the
public domain, or the public lands as provided by the Constitution,
but with the limitation that the lands must only be agricultural.
Consequently, lands classified as forest or timber, mineral, or
national parks are not susceptible of alienation or disposition
unless they are reclassified as agricultural. 24A positive act of the
Government is necessary to enable such reclassification, 25 and
the exclusive prerogative to classify public lands under existing
laws is vested in the Executive Department, not in the courts. 26 If,
however, public land will be classified as neither agricultural, forest
or timber, mineral or national park, or when public land is no longer
intended for public service or for the development of the national
wealth, thereby effectively removing the land from the
ambit of public dominion, a declaration of such conversion must
be made in the form of a law duly enacted by Congress or by a
Presidential proclamation in cases where the President is duly
authorized by law to that effect. 27 Thus, until the Executive
Department exercises its prerogative to classify or reclassify lands,
or until Congress or the President declares that the State no longer
intends the land to be used for public service or for the
development of national wealth, the Regalian Doctrine is
applicable. cEaACD
Disposition of alienable public lands
Section 11 of the Public Land Act (CA No. 141) provides the
manner by which alienable and disposable lands of the public
domain, i.e., agricultural lands, can be disposed of, to wit:
Section 11. Public lands suitable for agricultural purposes can be
disposed of only as follows, and not otherwise:
(1) For homestead settlement;
(2) By sale;
(3) By lease; and
(4) By confirmation of imperfect or incomplete titles:
(a) By judicial legalization; or
(b) By administrative legalization (free patent).
The core of the controversy herein lies in the proper
interpretation of Section 11 (4), in relation to Section 48
(b) of the Public Land Act, which expressly requires possession by
a Filipino citizen of the land since June 12, 1945, or earlier, viz.:
Section 48. The following-described citizens of the Philippines,
occupying lands of the public domain or claiming to own any such
lands or an interest therein, but whose titles have not been
perfected or completed, may apply to the Court of First
Instance of the province where the land is located for
confirmation of their claims and the issuance of a certificate of title
thereafter, 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 alienable and disposable
lands of the public domain, under a bona
fide claim of acquisition of ownership, since June 12, 1945, or
earlier, immediately preceding the filing of the applications 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.
(Bold emphasis supplied) cDCEIA
Note that Section 48 (b) of the Public Land Act used the
words "lands of the public domain" or "alienable and disposable
lands of the public domain" to clearly signify that lands otherwise
classified, i.e., mineral, forest or timber, or national parks, and
lands of patrimonial or private ownership, are outside the
coverage of the Public Land Act. What the law does not include, it
excludes. The use of the descriptive phrase "alienable and
disposable" further limits the coverage of Section 48 (b) to only the
agricultural lands of the public domain as set forth in Article XII,
Section 2 of the 1987 Constitution. Bearing in mind such
limitations under the Public Land Act, the applicant must satisfy
the following requirements in order for his application to come
under Section 14 (1) of the Property Registration Decree, 28 to
wit:
1. The applicant, by himself or through his predecessor-in-interest,
has been in possession and occupation of the property
subject of the application;
2. The possession and occupation must be open, continuous,
exclusive, and notorious;
3. The possession and occupation must be under a bona
fide claim of acquisition of ownership;
4. The possession and occupation must have taken place since
June 12, 1945, or earlier; and
5. The property subject of the application must be an agricultural
land of the public domain.
Taking into consideration that the Executive Department is vested
with the authority to classify lands of the public domain, Section 48
(b) of the Public Land Act, in relation to Section 14
(1) of theProperty Registration Decree, presupposes that the land
subject of the application for registration must have been already
classified as agricultural land of the public domain in order for the
provision to apply. Thus, absent proof that the land is already
classified as agricultural land of the public domain, the Regalian
Doctrine applies, and overcomes the presumption that the land is
alienable and disposable as laid down in Section 48
(b) of the Public Land Act. However, emphasis is placed on the
requirement that the classification required by Section 48
(b) of the Public Land Act is classification or reclassification of a
public land as agricultural. HcaATE
The dissent stresses that the classification or
reclassification of the land as alienable and disposable agricultural
land should likewise have been made on June 12, 1945 or earlier,
because any possession of the land prior to such classification or
reclassification produced no legal effects. It observes that the fixed
date of June 12, 1945 could not be minimized or glossed over by
mere judicial interpretation or by judicial social policy concerns,
and insisted that the full legislative intent be respected.
We find, however, that the choice of June 12, 1945 as the
reckoning point of the requisite possession and occupation was
the sole prerogative of Congress, the determination ofwhich
should best be left to the wisdom of the lawmakers. Except that
said date qualified the period of possession and occupation, no
other legislative intent appears to be associated with the
fixing of the date of June 12, 1945. Accordingly, the Court should
interpret only the plain and literal meaning of the law as written by
the legislators.
Moreover, an examination of Section 48 (b) of the Public Land
Act indicates that Congress prescribed no requirement that the
land subject of the registration should have been classified as
agricultural since June 12, 1945, or earlier. As such, the applicant's
imperfect or incomplete title is derived only from possession and
occupation since June 12, 1945, or earlier. This means that the
character of the property subject of the application as alienable
and disposable agricultural land of the public domain determines
its eligibility for land registration, not the ownership or title over it.
Alienable public land held by a possessor, either personally or
through his predecessors-in-interest, openly, continuously and
exclusively during the prescribed statutory period is converted to
private property by the mere lapse or completion of the
period. 29 In fact, by virtue of this doctrine, corporations may now
acquire lands of the public domain for as long as the lands were
already converted to private ownership, by operation of law, as a
result of satisfying the requisite period ofpossession prescribed by
the Public Land Act. 30 It is for this reason that the property
subject of the application of Malabanan need not be classified as
alienable and disposable agricultural land of the public domain for
the entire duration of the requisite period of possession. HaTDAE
To be clear, then, the requirement that the land should have been
classified as alienable and disposable agricultural land at the
time of the application for registration is necessary only to dispute
the presumption that the land is inalienable.
The declaration that land is alienable and disposable also serves
to determine the point at which prescription may run against the
State. The imperfect or incomplete title being confirmed under
Section 48 (b) of the Public Land Act is title that is acquired by
reason of the applicant's possession and occupation of the
alienable and disposable agricultural land of the public domain.
Where all the necessary requirements for a grant by the
Government are complied with through actual physical, open,
continuous, exclusive and public possession of an alienable and
disposable land of the public domain, the possessor is deemed to
have acquired by operation of law not only a right to a grant, but a
grant by the Government, because it is not necessary that a
certificate of title be issued in order that such a grant be
sanctioned by the courts. 31
If one follows the dissent, the clear objective of the Public Land
Act to adjudicate and quiet titles to unregistered lands in
favor of qualified Filipino citizens by reason of their occupation
and cultivation thereof for the number of years prescribed by
law 32 will be defeated. Indeed, we should always bear in mind
that such objective still prevails, as a fairly recent legislative
development bears out, when Congress enacted legislation
(Republic Act No. 10023) 33 in order to liberalize stringent
requirements and procedures in the adjudication of alienable
public land to qualified applicants, particularly residential lands,
subject to area limitations. 34
On the other hand, if a public land is classified as no longer
intended for public use or for the development of national wealth
by declaration of Congress or the President, thereby converting
such land into patrimonial or private land of the State, the
applicable provision concerning disposition and registration is no
longer Section 48 (b) of thePublic Land Actbut the Civil Code, in
conjunction with Section 14 (2) of the Property Registration
Decree. 35 As such, prescription can now run against the State.
To sum up, we now observe the following rules relative to the
disposition of public land or lands of the public domain,
namely: EaIDAT
(1) As a general rule and pursuant to the Regalian Doctrine, all
lands of the public domain belong to the State and are inalienable.
Lands that are not clearly under private ownership are also
presumed to belong to the State and, therefore, may not be
alienated or disposed;
(2) The following are excepted from the general rule, to wit:
(a) Agricultural lands of the public domain are rendered alienable
and disposable through any of the exclusive modes enumerated
under Section 11 of thePublic Land Act. If the mode is judicial
confirmation of imperfect title under Section 48 (b) of the Public
Land Act, the agricultural land subject of the application needs
only to be classified as alienable and disposable as of the
time of the application, provided the applicant's possession and
occupation ofthe land dated back to June 12, 1945, or earlier.
Thereby, a conclusive presumption that the applicant has
performed all the conditions essential to a government grant
arises, 36 and the applicant becomes the owner of the land by
virtue of an imperfect or incomplete title. By legal fiction, the land
has already ceased to be part of the public domain and has
become private property. 37
(b) Lands of the public domain subsequently classified or declared
as no longer intended for public use or for the
development of national wealth are removed from the
sphere of public dominion and are considered converted into
patrimonial lands or lands of private ownership that may be
alienated or disposed through any of the modes of acquiring
ownership under the Civil Code. If the mode of acquisition is
prescription, whether ordinary or extraordinary, proof that the land
has been already converted to private ownership prior to the
requisite acquisitive prescriptive period is a condition sine qua
non in observance of the law (Article 1113, Civil Code) that
property of the State not patrimonial in character shall not be the
object of prescription. HaSEcA
To reiterate, then, the petitioners failed to present sufficient
evidence to establish that they and their predecessors-in-interest
had been in possession of the land since June 12, 1945. Without
satisfying the requisite character and period of possession
possession and occupation that is open, continuous, exclusive,
and notorious since June 12, 1945, or earlier the land cannot
be considered ipso jure converted to private property even upon
the subsequent declaration of it as alienable and disposable.
Prescription never began to run against the State, such that the
land has remained ineligible for registration under Section 14
(1) of the Property Registration Decree. Likewise, the land
continues to be ineligible for land registration under Section 14
(2) of the Property Registration Decree unless Congress enacts a
law or the President issues a proclamation declaring the land as
no longer intended for public service or for the development of the
national wealth.
WHEREFORE, the Court DENIES the petitioners' Motion for
Reconsideration and the respondent's Partial Motion for
Reconsideration for their lack of merit.
SO ORDERED.
||| (Heirs of Malabanan v. Republic, G.R. No. 179987, [September
3, 2013], 717 PHIL 141-209)
AQUINO v. MUNICIPALITY OF MALAY
THIRD DIVISION
[G.R. No. 211356. September 29, 2014.]
CRISOSTOMO
B. AQUINO, petitioner, vs. MUNICIPALITY OF MALAY,
AKLAN, represented by HON. MAYOR JOHN P. YAP,
SANGGUNIANG BAYAN OF MALAY, AKLAN, represented by
HON. EZEL FLORES, DANTE PASUGUIRON, ROWEN
AGUIRRE, WILBEC GELITO, JUPITER GALLENERO,
OFFICE OF THE MUNICIPAL ENGINEER, OFFICE OF THE
MUNICIPAL TREASURER, BORACAY PNP CHIEF, BORACAY
FOUNDATION, INC., represented by NENETTE GRAF,
MUNICIPAL AUXILIARY POLICE, and JOHN and JANE
DOES, respondents.
DECISION
VELASCO, JR., J p:
Nature of the Case
Before the Court is a Petition for Review on Certiorari challenging
the Decision 1 and the Resolution of the Court of Appeals (CA) in
CA-G.R. SP No. 120042 dated August 13, 2013 and February 3,
2014, respectively. The assailed rulings denied
Crisostomo Aquino's Petition for Certiorari for not being the proper
remedy to question the issuance and implementation of Executive
Order No. 10, Series of 2011 (EO 10), ordering the
demolition of his hotel establishment.
The Facts
Petitioner is the president and chief executive officer of Boracay
Island West Cove Management Philippines, Inc. (Boracay West
Cove). On January 7, 2010, the company applied for a zoning
compliance with the municipal government of Malay,
Aklan. 2 While the company was already operating a resort in the
area, the application sought the issuance of a building permit
covering the construction of a three-storey hotel over a
parcel of land measuring 998 sq.m. located in Sitio Diniwid,
Barangay Balagab, Boracay Island, Malay, Aklan, which is
covered by a Forest Land Use Agreement for Tourism Purposes
(FLAgT) issued by the Department of Environment and Natural
Resources (DENR) in favor of Boracay West Cove.
Through a Decision on Zoning dated January 20, 2010, the
Municipal Zoning Administrator denied petitioner's application on
the ground that the proposed construction site was within the "no
build zone" demarcated in Municipal Ordinance 2000-131
(Ordinance). 3 As provided in the Ordinance:
SECTION 2. Definition of Terms. As used in this Ordinance,
the following words, terms and phrases shall mean as follows:
xxx xxx xxx
(b) No Build Zone the space twenty-five (25) meters from the
edge of the mean high water mark measured inland;
xxx xxx xxx
SECTION 3. No building or structure of any kind whether
temporary or permanent shall be allowed to be set up, erected or
constructed on the beaches around the Island of Boracay and in
its offshore waters. During the conduct of special activities or
special events, the Sangguniang Bayan may, through a
Resolution, authorize the Office of the Mayor to issue Special
Permits for construction of temporary structures on the beach for
the duration of the special activity as embodied in the Resolution.
In due time, petitioner appealed the denial action to the
Office of the Mayor on February 1, 2010. TAacHE
On May 13, 2010, petitioner followed up his appeal through a letter
but no action was ever taken by the respondent mayor. On April 5,
2011, however, a Notice of Assessment was sent to petitioner
asking for the settlement of Boracay West Cove's unpaid taxes
and other liabilities under pain of a recommendation for closure in
view of its continuous commercial operation since 2009 sans the
necessary zoning clearance, building permit, and business and
mayor's permit. In reply, petitioner expressed willingness to settle
the company's obligations, but the municipal treasurer refused to
accept the tendered payment. Meanwhile, petitioner continued
with the construction, expansion, and operation of the resort hotel.
Subsequently, on March 28, 2011, a Cease and Desist Order was
issued by the municipal government, enjoining the
expansion of the resort, and on June 7, 2011, the Office of the
Mayor of Malay, Aklan issued the assailed EO 10, ordering the
closure and demolition of Boracay West Cove's hotel.
EO 10 was partially implemented on June 10, 2011. Thereafter,
two more instances followed wherein respondents demolished the
improvements introduced by Boracay West Cove, the most
recent of which was made in February 2014. caCSDT
Alleging that the order was issued and executed with grave
abuse of discretion, petitioner filed a Petition for Certiorari with
prayer for injunctive relief with the CA. He argued that judicial
proceedings should first be conducted before the respondent
mayor could order the demolition of the company's establishment;
that Boracay West Cove was granted a FLAgT by the DENR,
which bestowed the company the right to construct permanent
improvements on the area in question; that since the area is a
forestland, it is the DENR and not the municipality of Malay, or
any other local government unit for that matter that has primary
jurisdiction over the area, and that the Regional Executive
Director of DENR-Region 6 had officially issued an opinion
regarding the legal issues involved in the present case; that the
Ordinance admits of exceptions; and lastly, that it is the mayor
who should be blamed for not issuing the necessary clearances in
the company's favor.
In rebuttal, respondents contended that the FLAgT does not
excuse the company from complying with the Ordinance
and Presidential Decree No. 1096 (PD 1096), otherwise known as
the National Building Code of the Philippines. Respondents also
argued that the demolition needed no court order because the
municipal mayor has the express power under the Local
Government Code (LGC)to order the removal of illegally
constructed buildings.
Ruling of the Court of Appeals
In its assailed Decision dated August 13, 2013, the CA dismissed
the petition solely on procedural ground, i.e., the special
writ of certiorari can only be directed against a tribunal, board, or
officer exercising judicial or quasi-judicial functions and since the
issuance of EO 10 was done in the exercise of executive
functions, and not of judicial or quasi-judicial
functions, certiorari will not lie. Instead, the proper remedy for the
petitioner, according to the CA, is to file a petition for declaratory
relief with the Regional Trial Court.
Petitioner sought reconsideration but this was denied by the CA
on February 3, 2014 through the challenged Resolution. Hence,
the instant petition raising arguments on both procedure and
substance.
The Issues
Stripped to the essentials, the pivotal issues in the extant case are
as follows:
1. The propriety under the premises of the filing of a petition
for certiorari instead of a petition for declaratory relief;
a. Whether or not declaratory relief is still available to petitioner;
b. Whether or not the CA correctly ruled that the respondent mayor
was performing neither a judicial nor quasi-judicial function when
he ordered the closure and demolition of Boracay West Cove's
hotel;
2. Whether or not respondent mayor committed grave
abuse of discretion when he issued EO 10;
a. Whether or not petitioner's right to due process was violated
when the respondent mayor ordered the closure and
demolition of Boracay West Cove's hotel without first conducting
judicial proceedings;
b. Whether or not the LGU's refusal to issue petitioner the
necessary building permit and clearances was justified;
c. Whether or not petitioner's rights under the FLAgT prevail over
the municipal ordinance providing for a no-build zone; and
d. Whether or not the DENR has primary jurisdiction over the
controversy, not the LGU.
The Court's Ruling
We deny the petition.
Certiorari, not declaratory relief, is the proper remedy
a. Declaratory relief no longer viable
Resolving first the procedural aspect of the case, We find merit in
petitioner's contention that the special writ of certiorari, and not
declaratory relief, is the proper remedy for assailing EO 10. As
provided under Sec. 1, Rule 63 of the Rules of Court: SIcEHC
SECTION 1. Who may file petition. Any person interested
under a deed, will, contract or other written instrument, whose
rights are affected by a statute, executive order or regulation,
ordinance or any other governmental regulation may, before
breach or violation thereof, bring an action in the appropriate
Regional Trial Court to determine any question of construction or
validity arising, and for a declaration of his rights or duties,
thereunder. . . . (emphasis added)
An action for declaratory relief presupposes that there has been
no actual breach of the instruments involved or of the rights
arising thereunder. Since the purpose of an action for declaratory
relief is to secure an authoritative statement of the rights and
obligations of the parties under a statute, deed, or contract for their
guidance in the enforcement thereof, or compliance therewith, and
not to settle issues arising from an alleged breach thereof, it may
be entertained before the breach or violation of the statute, deed
or contract to which it refers. A petition for declaratory relief gives
a practical remedy for ending controversies that have not reached
the state where another relief is immediately available; and
supplies the need for a form of action that will set controversies at
rest before they lead to a repudiation of obligations, an
invasion of rights, and a commission of wrongs. 4
In the case at bar, the petition for declaratory relief became
unavailable by EO 10's enforcement and implementation. The
closure and demolition of the hotel rendered futile any possible
guidelines that may be issued by the trial court for carrying out the
directives in the challenged EO 10. Indubitably, the CA erred when
it ruled that declaratory relief is the proper remedy given such a
situation.
b. Petitioner correctly resorted to certiorari
On the propriety of filing a petition for certiorari, Sec. 1, Rule
65 of the Rules of Court provides:
Section 1. Petition for certiorari. When any tribunal, board or
officer exercising judicial or quasi-judicial functions has acted
without or in excess of its or his jurisdiction, or with grave
abuse of discretion amounting to lack or excess of jurisdiction,
and there is no appeal, or any plain, speedy, and adequate remedy
in the ordinary course of law, a person aggrieved thereby may file
a verified petition in the proper court, alleging the facts with
certainty and praying that judgment be rendered annulling or
modifying the proceedings of such tribunal, board or officer, and
granting such incidental reliefs as law and justice may require. . . .
For certiorari to prosper, the petitioner must establish the
concurrence of the following requisites, namely:
1. The writ is directed against a tribunal, board, or officer
exercising judicial or quasi-judicial functions;
2. Such tribunal, board, or officer has acted without or in
excess of jurisdiction, or with grave abuse of discretion amounting
to lack or excess of jurisdiction; and
3. There is no appeal or any plain speedy, and adequate remedy
in the ordinary course of law. 5
Guilty of reiteration, the CA immediately dismissed the Petition
for Certiorari upon determining that the first element is wanting
that respondent mayor was allegedly not exercising judicial or
quasi-judicial functions when he issued EO 10.
We are not persuaded.
The CA fell into a trap when it ruled that a mayor, an officer from
the executive department, exercises an executive function
whenever he issues an Executive Order. This is tad too
presumptive for it is the nature of the act to be performed, rather
than of the office, board, or body which performs it, that
determines whether or not a particular act is a discharge of judicial
or quasi-judicial functions. The first requirement for certiorari is
satisfied if the officers act judicially in making their decision,
whatever may be their public character. 6
It is not essential that the challenged proceedings should be strictly
and technically judicial, in the sense in which that word is used
when applied to courts of justice, but it is sufficient if they are
quasi-judicial. 7 To contrast, a party is said to be exercising
a judicial function where he has the power to determine what the
law is and what legal rights of the parties are, and then undertakes
to determine these questions and adjudicate upon the rights of the
parties, whereas quasi-judicial function is "a term which applies to
the actions, discretion, etc., of public administrative officers or
bodies . . . required to investigate facts or ascertain the
existence of facts, hold hearings, and draw conclusions from them
as a basis for their official action and to exercise discretion of a
judicial nature." 8
In the case at bench, the assailed EO 10 was issued upon the
respondent mayor's finding that Boracay West Cove's
construction, expansion, and operation of its hotel in Malay, Aklan
is illegal. Such a finding of illegality required the respondent
mayor's exercise of quasi-judicial functions, against which the
special writ of certiorari may lie. Apropos hereto is Our ruling
in City Engineer of Baguio v. Baniqued: 9
There is no gainsaying that a city mayor is an executive official nor
is the matter of issuing demolition notices or orders not a
ministerial one. In determining whether or not a structure is illegal
or it should be demolished, property rights are involved thereby
needing notices and opportunity to be heard as provided for in the
constitutionally guaranteed right of due process. In
pursuit of these functions, the city mayor has to exercise quasi-
judicial powers.
With the foregoing discussion, the CA erred in ruling that the
respondent mayor was merely exercising his executive functions,
for clearly, the first requisite for the special writ has been satisfied.
Aside from the first requisite, We likewise hold that the third
element, i.e., the unavailability of a plain, speedy, or adequate
remedy, is also present herein. While it may be argued that, under
the LGC,Executive Orders issued by mayors are subject to review
by provincial governors, 10 this cannot be considered as an
adequate remedy given the exigencies ofpetitioner's predicament.
In a litany of cases, We have held that it is inadequacy, not the
mere absence of all other legal remedies and the
danger of failure of justice without the writ, that must usually
determine the propriety of certiorari. A remedy is plain, speedy and
adequate if it will promptly relieve the petitioner from the injurious
effects of the judgment, order, or resolution of the lower court or
agency. It is understood, then, that a litigant need not mark time
by resorting to the less speedy remedy of appeal in order to have
an order annulled and set aside for being patently void for
failure of the trial court to comply with the Rules of Court. 11
Before applying this doctrine, it must first be borne in mind that
respondents in this case have already taken measures towards
implementing EO 10. In fact, substantial segments ofthe hotel
have already been demolished pursuant to the mayor's directive.
It is then understandable why petitioner prayed for the
issuance of an injunctive writ a provisional remedy that would
otherwise have been unavailable had he sought a reversal from
the office of the provincial governor of Aklan. Evidently, petitioner
correctly saw the urgent need for judicial intervention via certiorari.
In light of the foregoing, the CA should have proceeded to grab the
bull by its horns and determine the existence of the second
element of certiorari whether or not there was grave
abuse of discretion on the part of respondents.
Upon Our finding that a petition for certiorari under Rule 65 is the
appropriate remedy, We will proceed to resolve the core issues in
view of the urgency of the reliefs prayed for in the petition.
Respondents did not commit grave abuse of discretion
a. The hotel's classification as a nuisance
Article 694 of the Civil Code defines "nuisance" as any act,
omission, establishment, business, condition or property, or
anything else that (1) injures or endangers the health or
safety of others; (2) annoys or offends the senses; (3) shocks,
defies or disregards decency or morality; (4) obstructs or interferes
with the free passage of any public highway or street, or any
body of water; or (5) hinders or impairs the use of property. 12
In establishing a no build zone through local legislation, the LGU
effectively made a determination that constructions therein,
without first securing exemptions from the local council, qualify as
nuisances for they pose a threat to public safety. No build zones
are intended for the protection of the public because the
stability of the ground's foundation is adversely affected by the
nearby body of water. The ever present threat of high rising storm
surges also justifies the ban on permanent constructions near the
shoreline. Indeed, the area's exposure to potential geo-hazards
cannot be ignored and ample protection to the residents of Malay,
Aklan should be afforded.
Challenging the validity of the public respondents' actuations,
petitioner posits that the hotel cannot summarily be abated
because it is not a nuisance per se, given the hundred million
peso-worth of capital infused in the venture. Citing Asilo, Jr. v.
People, 13 petitioner also argues that respondents should have
first secured a court order before proceeding with the
demolition. SDTIaE
Preliminarily, We agree with petitioner's posture that the property
involved cannot be classified as a nuisance per se, but not for the
reason he so offers. Property valuation, after all, is not the litmus
test for such a determination. More controlling is the property's
nature and conditions, which should be evaluated to see if it
qualifies as a nuisance as defined under the law.
As jurisprudence elucidates, nuisances are of two kinds:
nuisance per se and nuisance per accidens. The first is
recognized as a nuisance under any and all circumstances,
because it constitutes a direct menace to public health or safety,
and, for that reason, may be abated summarily under the
undefined law of necessity. The second is that which depends
upon certain conditions and circumstances, and its existence
being a question of fact, it cannot be abated without due hearing
thereon in a tribunal authorized to decide whether such a thing
does in law constitute a nuisance. 14
In the case at bar, the hotel, in itself, cannot be considered as a
nuisance per se since this type of nuisance is generally defined as
an act, occupation, or structure, which is a nuisance at all
times and under any circumstances, regardless of location or
surrounding. 15 Here, it is merely the hotel's particular incident
its location and not its inherent qualities that rendered it a
nuisance. Otherwise stated, had it not been constructed in the no
build zone, Boracay West Cove could have secured the necessary
permits without issue. As such, petitioner is correct that the hotel
is not a nuisance per se, but to Our mind, it is still a nuisance per
accidens.
b. Respondent mayor has the power to order the
demolition of illegal constructions
Generally, LGUs have no power to declare a particular thing as a
nuisance unless such a thing is a nuisance per se. 16 So it was
held in AC Enterprises v. Frabelle Properties Corp.: 17
We agree with petitioner's contention that, under Section
447(a)(3)(i) of R.A. No. 7160, otherwise known as the Local
Government Code, the Sangguniang Panglungsod is empowered
to enact ordinances declaring, preventing or abating noise and
other forms of nuisance. It bears stressing, however, that the
Sangguniang Bayan cannot declare a particular thing as a
nuisance per se and order its condemnation. It does not have the
power to find, as a fact, that a particular thing is a nuisance
when such thing is not a nuisance per se; nor can it authorize
the extrajudicial condemnation and destruction of that as a
nuisance which in its nature, situation or use is not such.
Those things must be determined and resolved in the
ordinary courts of law. If a thing, be in fact, a nuisance due to
the manner of its operation, that question cannot be determined
by a mere resolution of the Sangguniang Bayan. (emphasis
supplied)
Despite the hotel's classification as a nuisance per accidens,
however, We still find in this case that the LGU may nevertheless
properly order the hotel's demolition. This is because, in the
exercise of police power and the general welfare
clause, 18 property rights of individuals may be subjected to
restraints and burdens in order to fulfil the objectives of the
government. Otherwise stated, the government may enact
legislation that may interfere with personal liberty, property, lawful
businesses and occupations to promote the general welfare. 19
One such piece of legislation is the LGC,which authorizes city and
municipal governments, acting through their local chief executives,
to issue demolition orders. Under existing laws, the office of the
mayor is given powers not only relative to its function as the
executive official of the town; it has also been endowed with
authority to hear issues involving property rights of individuals and
to come out with an effective order or resolution
thereon. 20 Pertinent herein is Sec. 444 (b) (3)
(vi) of the LGC,which empowered the mayor to order the closure
and removal of illegally constructed establishments for failing to
secure the necessary permits, to wit:
Section 444. The Chief Executive: Powers, Duties, Functions and
Compensation.
xxx xxx xxx
(b) For efficient, effective and economical governance the
purpose of which is the general welfare of the municipality and its
inhabitants pursuant to Section 16 of this Code, the municipal
mayor shall:
xxx xxx xxx
(3) Initiate and maximize the generation of resources and
revenues, and apply the same to the
implementation of development plans, program objectives and
priorities as provided for under Section 18 of this Code, particularly
those resources and revenues programmed for agro-industrial
development and country-wide growth and progress, and relative
thereto, shall:
xxx xxx xxx
(vi) Require owners of illegally constructed houses, buildings
or other structures to obtain the necessary permit, subject to
such fines and penalties as may be imposed by law or
ordinance, or to make necessary changes in the
construction of the same when said construction violates any
law or ordinance, or to order the demolition or removal of said
house, building or structure within the period prescribed by
law or ordinance. (emphasis supplied)
c. Requirements for the exercise of the power are present
i. Illegality of structures
In the case at bar, petitioner admittedly failed to secure the
necessary permits, clearances, and exemptions before the
construction, expansion, and operation of Boracay Wet Cove's
hotel in Malay, Aklan. To recall, petitioner declared that the
application for zoning compliance was still pending with the
office of the mayor even though construction and operation were
already ongoing at the same time. As such, it could no longer be
denied that petitioner openly violated Municipal Ordinance 2000-
131, which provides:
SECTION 9. Permits and Clearances.
(a) No building or structure shall be allowed to start
construction unless a Building Permit therefore has been
duly issued by the Office of the Municipal Engineer. Once
issued, the building owner or any person in charge of the
construction shall display on the lot or on the building undergoing
construction a placard containing the Building Permit Number and
the date of its issue. The office of the Municipal Engineer shall
not issue any building permit unless:
1. The proposed construction has been duly issued a Zoning
Clearance by the Office of the Municipal Zoning Officer;
2. The proposed construction has been duly endorsed by the
Sangguniang Bayan through a Letter of Endorsement.
(b) Only buildings/structures which has complied with all the
requirements for its construction as verified to by the Building
Inspector and the Sangguniang Bayan shall be issued a
Certificate of Occupancy by the Office of the Municipal Engineer.
(c) No Business or Mayor's Permit shall be issued to
businesses being undertaken on buildings or structures
which were not issued a certificate of Occupancy beginning
January 2001 and thereafter.
xxx xxx xxx
SECTION 10. Penalties.
xxx xxx xxx
(e) Any building, structure, or contraption erected in any public
place within the Municipality of Malay such as but not limited to
streets, thoroughfares, sidewalks, plazas, beaches or in any other
public place are hereby declared as nuisance and illegal
structure. Such building structure or contraption shall be
demolished by the owner thereof or any of his authorized
representative within ten (10) days from receipt of the notice
to demolish. Failure or refusal on the part of the owner or
any of his authorized representative to demolish the illegal
structure within the period herein above specified shall
automatically authorize the
government of the Municipality of Malayto demolish the
same, gather and keep the construction materials of the
demolished structure. (emphasis supplied) CTcSIA
Petitioner cannot justify his position by passing the blame onto the
respondent mayor and the latter's failure to act on his appeal for
this does not, in any way, imply that petitioner can proceed with
his infrastructure projects. On the contrary, this only means that
the decision of the zoning administrator denying the
application still stands and that petitioner acquired no right
to construct on the no build zone. The illegality of the
construction cannot be cured by merely tendering payment for the
necessary fees and permits since the LGU's refusal rests on valid
grounds.
Instead of taking the law into his own hands, petitioner could have
filed, as an alternative, a petition for mandamus to compel the
respondent mayor to exercise discretion and resolve the
controversy pending before his office. There is indeed an
exception to the rule that matters involving judgment and
discretion are beyond the reach of a writ ofmandamus, for such
writ may be issued to compel action in those matters, when
refused. Whether or not the decision would be for or against
petitioner would be for the respondent mayor to decide, for
while mandamus may be invoked to compel the
exercise of discretion, it cannot compel such discretion to be
exercised in a particular way. 21 What would have been important
was for the respondent mayor to immediately resolve the case for
petitioner to be able to go through the motions that the zoning
clearance application process entailed.
Alas, petitioner opted to defy the zoning administrator's ruling. He
consciously chose to violate not only the Ordinance but also Sec.
301 of PD 1096, laying down the requirement ofbuilding permits,
which provides:
Section 301. Building Permits. No person, firm or corporation,
including any agency or instrumentality of the government shall
erect, construct, alter, repair, move, convert or demolish any
building or structure or cause the same to be done without first
obtaining a building permit therefor from the Building Official
assigned in the place where the subject building is located or the
building work is to be done.
This twin violation of law and ordinance warranted the LGU's
invocation of Sec. 444 (b) (3) (vi) of the LGC,which power is
separate and distinct from the power to summarily abate
nuisances per se. Under the law, insofar as illegal constructions
are concerned, the mayor can, after satisfying the
requirement of due notice and hearing, order their closure and
demolition.
ii. Observance of procedural due process rights
In the case at bench, the due process requirement is deemed to
have been sufficiently complied with. First, basic is the rule that
public officers enjoy the presumption of regularity in the
performance of their duties. 22 The burden is on the petitioner
herein to prove that Boracay West Cove was deprived of the
opportunity to be heard before EO 10 was issued. Regrettably,
copies of the Cease and Desist Order issued by the LGU
and of the assailed EO 10 itself were never attached to the petition
before this Court, which documents could have readily shed light
on whether or not petitioner has been accorded the 10-day grace
period provided in Section 10 of the Ordinance. In view of this fact,
the presumption ofregularity must be sustained. Second, as
quoted by petitioner in his petition before the CA, the assailed EO
10 states that petitioner received notices from
the municipalitygovernment on March 7 and 28, 2011, requiring
Boracay West Cove to comply with the zoning ordinance and yet
it failed to do so. 23 If such was the case, the grace period can be
deemed observed and the establishment was already ripe for
closure and demolition by the time EO 10 was issued in
June. Third, the observance of the 10-day allowance for the owner
to demolish the hotel was never questioned by petitioner so there
is no need to discuss the same. Verily, the only grounds invoked
by petitioner in crying due process violation are (1) the
absence of a court order prior to demolition and (2) the municipal
government's exercise of jurisdiction over the controversy
instead of the DENR. Therefore, it can no longer be belatedly
argued that the 10-day grace period was not observed because to
entertain the same would result in the violation of the respondents'
own due process rights.
Given the presence of the requirements under Sec. 444 (b) (3)
(vi) of the LGC,whether the building constituted a nuisance per
se or a nuisance per accidens becomes immaterial. The hotel was
demolished not exactly because it is a nuisance but because it
failed to comply with the legal requirements prior to construction.
It just so happened that, in the case at bar, the hotel's incident that
qualified it as a nuisance per accidens its being constructed
within the no build zone further resulted in the non-
issuance of the necessary permits and clearances, which is a
ground for demolition under the LGC.Under the premises, a court
order that is required under normal circumstances is hereby
dispensed with.
d. The FLAgT cannot prevail over the municipal ordinance
and PD 1096
Petitioner next directs our attention to the following FLAgT
provision:
VII. The SECOND PARTY may construct permanent and/or
temporary improvements or infrastructure in the FLAgT Area
necessary and appropriate for its development for tourism
purposes pursuant to the approved SMP. "Permanent
Improvements" refer to access roads, and buildings or structures
which adhere to the ground in a fixed and permanent manner. On
the other hand, "Temporary Improvements" include those which
are detachable from the foundation or the ground introduced by
the SECOND PARTY in the FLAgT Area and which the SECOND
PARTY may remove or dismantle upon expiration or
cancellation of this AGREEMENT . . . . 24
Taken in conjunction with the exceptions laid down in Sections 6
and 8 of the Ordinance, petitioner argues that Boracay West Cove
is exempted from securing permits from the LGU. Said exceptions
read:
SECTION 6. No building or structure shall be allowed to be
constructed on a slope Twenty Five Percent (25%) or higher
unless provided with soil erosion protective structures and
authorized by the Department of Environment and Natural
Resources.
xxx xxx xxx
SECTION 8. No building or structure shall be allowed to be
constructed on a swamp or other water-clogged areas unless
authorized by the Department of Environment and Natural
Resources.
According to petitioner, the fact that it was issued a FLAgT
constitutes sufficient authorization from the DENR to proceed with
the construction of the three-storey hotel.
The argument does not persuade.
The rights granted to petitioner under the FLAgT are not unbridled.
Forestlands, although under the management of the DENR, are
not exempt from the territorial application ofmunicipal laws, for
local government units legitimately exercise their
powers of government over their defined territorial
jurisdiction. SITCEA
Furthermore, the conditions set forth in the FLAgT and the
limitations circumscribed in the ordinance are not mutually
exclusive and are, in fact, cumulative. As sourced from Sec. 447
(a) (5) (i) of the LGC:
Section 447. Powers, Duties, Functions and Compensation.
(a) The sangguniang bayan, as the legislative
body of the municipality, shall enact ordinances, approve
resolutions and appropriate funds for the general
welfare of the municipality and its inhabitants pursuant to Section
16 of this Code and in the proper exercise of the corporate
powers of the municipality as provided for under Section 22 of this
Code, and shall:
xxx xxx xxx
(5) Approve ordinances which shall ensure the efficient and
effective delivery of the basic services and facilities as provided for
under Section 17 of this Code, and in addition to said services and
facilities, shall:
(i) Provide for the establishment, maintenance, protection,
and conservation of communal forests and watersheds, tree
parks, greenbelts, mangroves, and other similar forest
development projects . . . . (emphasis added)
Thus, aside from complying with the provisions in the FLAgT
granted by the DENR, it was incumbent on petitioner to likewise
comply with the no build zone restriction under Municipal
Ordinance 2000-131, which was already in force even before the
FLAgT was entered into. On this point, it is well to stress that
Sections 6 and 8 of the Ordinance do not exempt petitioner from
complying with the restrictions since these provisions adverted to
grant exemptions from the ban on constructions on slopes and
swamps, not on the no build zone.
Additionally, the FLAgT does not excuse petitioner from complying
with PD 1096. As correctly pointed out by respondents, the
agreement cannot and will not amend or change the law because
a legislative act cannot be altered by mere contractual agreement.
Hence, petitioner has no valid reason for its failure to secure a
building permit pursuant to Sec. 301 of the National Building
Code.
e. The DENR does not have primary jurisdiction over the
controversy
Lastly, in ascribing grave abuse of discretion on the part of the
respondent mayor, petitioner argued that the hotel site is a
forestland under the primary jurisdiction of the DENR. As such, the
merits of the case should have been passed upon by the agency
and not by the LGU. In the alternative, petitioner explains that even
if jurisdiction over the matter has been devolved in favor of the
LGU, the DENR still has the power of review and supervision over
the former's rulings. As cited by the petitioner, the LGC reads:
Section 17. Basic Services and Facilities.
xxx xxx xxx
(b) Such basic services and facilities include, but are not limited to,
the following:
xxx xxx xxx
(2) For a Municipality:
xxx xxx xxx
(ii) Pursuant to national policies and subject to supervision,
control and review of the DENR, implementation of community-
based forestry projects which include integrated social forestry
programs and similar projects; management and
control of communal forests with an area not exceeding fifty (50)
square kilometers; establishment of tree parks, greenbelts, and
similar forest development projects. (emphasis added)
Petitioner has made much of the fact that in line with this provision,
the DENR Region 6 had issued an opinion favourable to
petitioner. 25 To petitioner, the adverted opinion effectively
reversed the findings of the respondent mayor that the structure
introduced was illegally constructed.
We disagree. SHTcDE
In alleging that the case concerns the development and the proper
use of the country's environment and natural resources, petitioner
is skirting the principal issue, which is Boracay West Cove's non-
compliance with the permit, clearance, and zoning requirements
for building constructions under national and municipal laws. He
downplays Boracay West Cove's omission in a bid to justify
ousting the LGU of jurisdiction over the case and transferring the
same to the DENR. He attempts to blow the issue out of proportion
when it all boils down to whether or not the construction of the
three-storey hotel was supported by the necessary documentary
requirements.
Based on law and jurisprudence, the office of the mayor has quasi-
judicial powers to order the closing and
demolition of establishments. This power granted by the LGC,as
earlier explained, We believe, is not the same power devolved in
favor of the LGU under Sec. 17 (b) (2) (ii), as above-quoted, which
is subject to review by the DENR. The fact that the building to be
demolished is located within a forestland under the
administration of the DENR is of no moment, for what is involved
herein, strictly speaking, is not an issue on environmental
protection, conservation of natural resources, and the
maintenance of ecological balance, but the legality or
illegality of the structure. Rather than treating this as an
environmental issue then, focus should not be diverted from the
root cause of this debacle compliance.
Ultimately, the purported power of review by a regional
office of the DENR over respondents' actions exercised through
an instrumentality of an ex-parte opinion, in this case, finds no
sufficient basis. At best, the legal opinion rendered, though
perhaps informative, is not conclusive on the courts and should be
taken with a grain of salt.
WHEREFORE, in view of the foregoing, the petition is
hereby DENIED for lack of merit. The Decision and the
Resolution of the Court of Appeals in CA-G.R. SP No. 120042
dated August 13, 2013 and February 3, 2014, respectively, are
hereby AFFIRMED.
SO ORDERED.
||| (Aquino v. Municipality of Malay, Aklan, G.R. No. 211356,
[September 29, 2014], 744 PHIL 497-525)
CRUZ v. PANDACAN HIKERS CLUB
THIRD DIVISION
[G.R. No. 188213. January 11, 2016.]
NATIVIDAD C. CRUZ and BENJAMIN
DELA CRUZ, petitioners, vs. PANDACAN HIKER'S CLUB,
INC., Represented by its President, PRISCILA
ILAO, respondent.
DECISION
PERALTA, J p:
Before the Court is a petition for review on certiorari under Rule 45
of the Rules of Court seeking to annul and set aside the Court of
Appeals Decision 1 dated March 31, 2008 in CA-G.R. SP. No.
104474. The appellate court reversed and set aside the earlier
decision of the Office of the Ombudsman dismissing the complaint
filed against petitioners.
Below are the facts of the case.
Petitioner Natividad C. Cruz (Cruz) was Punong Barangay or
Chairperson of Barangay 848, Zone 92, City of Manila. 2 On
November 10, 2006, around five o'clock in the afternoon, and
along Central Street, Pandacan, Manila, within the vicinity of her
barangay, she allegedly confronted persons playing basketball
with the following statements:
Bakit nakabukas ang (baskelball) court? Wala kayong karapatang
maglaro sa court na 'to, barangay namin ito! . . . Wala kayong
magagawa. Ako ang chairman dito. Mga walanghiya kayo, patay
gutom! Hindi ako natatakot! Kaya kong panagutan lahat! 3
Then, she allegedly gave an order to the other
petitioner, Barangay Tanod Benjamin dela Cruz (Dela Cruz), to
destroy the basketball ring by cutting it up with a hacksaw which
Dela Cruz promptly complied with, thus, rendering the said
basketball court unusable. 4
The acts of petitioners prompted the filing of a Complaint (for
Malicious Mischief, Grave Misconduct, Conduct Prejudicial to the
Best Interest of the Service and Abuse of Authority) 5 before the
Prosecutor's Office and the Office of the Ombudsman by the group
that claims to be the basketball court's owners, herein
respondents Pandacan Hiker's Club, Inc. (PHC) and its president
Priscila Ilao (Ilao). In the complaint, they alleged that PHC, a non-
stock, non-profit civic organization engaged in "health,
infrastructure, sports and other so-called poverty alleviation
activities" in the Pandacan area of Manila, is the group that had
donated, administered and operated the subject basketball court
for the Pandacan community until its alleged destruction by
petitioners. 6
The complaint averred that the damage caused by petitioners was
in the amount of around P2,000.00. It was supported by the
affidavits of ten (10) members of PHC who allegedly witnessed the
destruction. Meanwhile, respondent Ilao added that the acts of
petitioner Cruz, the Barangay Chairperson, of ordering the cutting
up of the basketball ring and uttering abusive language were
"unwarranted and unbecoming of a public official." 7
In answer to the complaint, Cruz alleged that the basketball court
affected the peace in the barangay and was the subject of many
complaints from residents asking for its closure. She alleged that
the playing court blocked jeepneys from passing through and was
the site of rampant bettings and fights involving persons from
within and outside the barangay. She claimed that innocent
persons have been hurt and property had been damaged by such
armed confrontations, which often involved the throwing of rocks
and improvised "molotov" bombs. She also averred that noise from
the games caused lack of sleep among some residents and that
the place's frequent visitors used the community's fences as
places to urinate. Cruz maintained that the court's users never
heeded the barangay officials' efforts to pacify them and when the
basketball ring was once padlocked, such was just removed at will
while members of the complainants' club continued playing.
When Cruz asked for the PHC to return the steel bar and padlock,
the request was simply ignored, thus, prompting her to order
Dela Cruz to destroy the basketball ring. The destruction was
allegedly also a response to the ongoing clamor of residents to
stop the basketball games. 8 Cruz denied allegations that she
shouted invectives at the PHC members. In support of her
answer, Cruz attached copies of the complaints, a "certification"
and letters of barangay residents asking for a solution to the
problems arising from the disruptive activities on the said playing
venue. 9
After the parties' submission of their respective Position
Papers, 10 the Office of the Ombudsman rendered its
Decision 11 dated April 26, 2007 dismissing the complaint filed by
Ilao, et al. The Ombudsman found that the act of destroying the
basketball ring was only motivated by Cruz and
Dela Cruz performing their sworn duty, as defined in the Local
Government Code.12 It found the act to be a mere response to the
clamor of constituents. 13 The office found that though the cutting
of the ring was "drastic," it was done by the barangay officials
within their lawful duties, as the act was only the result of the
unauthorized removal of and failure to return the steel bar and
padlock that were earlier placed thereon. 14 Neither did the office
give credence to the allegation that Cruz uttered invectives
against the complainants' witnesses, noting that the said
witnesses are tainted by their personal animosity against the
barangay officials. 15
After the Ombudsman's ruling dismissing the complaint filed
against Cruz and Dela Cruz, the complainants Ilao, et al. filed a
petition for review before the Court of Appeals praying for the latter
court to nullify the Ombudsman's decision. 16 The petition's thesis
was that any actions in furtherance of the community's welfare
must be approved by ordinance and that unless a thing is a
nuisance per se, such a thing may not be abated via an ordinance
and extrajudicially. 17 CAIHTE
Commenting on the petition for review, the Office of the
Ombudsman, through the Office of the Solicitor General, averred
that Section 389 of the Local Government Code,which defines the
powers, duties and functions of the punong barangay, among
which are the power to enforce all laws and ordinances applicable
within the barangay and the power to maintain public order in the
barangay and, in pursuance thereof, to assist the city or municipal
mayor and the sanggunian members in the performance of their
duties and functions, does not require an ordinance for the said
official to perform said functions. 18 The acts were also in
pursuance of the promotion of the general welfare of the
community, as mentioned in Section 16 of the Code. 19
In its assailed Decision dated March 31, 2008, the Court of
Appeals reversed and set aside the decision of the Office of the
Ombudsman. The appellate court found petitioner Natividad
C. Cruz liable for conduct prejudicial to the best interest of the
service and penalized her with a suspension of six (6) months and
one (1) day, while it reprimanded the other petitioner Benjamin
dela Cruz, and also warned both officials that a future repetition of
the same or similar acts will be dealt with more severely.
The appellate court sustained the contentions of Ilao, et
al. that Cruz and Dela Cruz performed an abatement of what they
thought was a public nuisance but did the same without following
the proper legal procedure, thus making them liable for said
acts. 20 It held Cruz to be without the power to declare a thing a
nuisance unless it is a nuisance per se. 21 It declared the subject
basketball ring as not such a nuisance and, thus, not subject to
summary abatement. The court added that even if the same was
to be considered a nuisance per accidens, the only way to
establish it as such is after a hearing conducted for that
purpose. 22
A motion for reconsideration, filed by Cruz and Dela Cruz was
likewise denied by the appellate court. 23 Hence, they filed this
petition.
Petitioners maintain that they acted merely with the intention to
regain free passage of people and vehicles over the street and
restore the peace, health and sanitation of those affected by the
basketball court. Cruz, in particular, asserts that she merely
abated a public nuisance which she claimed was within her power
as barangay chief executive to perform and was part of her duty to
maintain peace and order. 24
We deny the petition.
Under normal circumstances, this Court would not disturb the
findings of fact of the Office of the Ombudsman when they are
supported by substantial evidence. 25However, We make an
exception of the case at bar because the findings of fact of the
Ombudsman and the Court of Appeals widely differ. 26
It is held that the administrative offense of conduct prejudicial to
the interest of the service is committed when the questioned
conduct tarnished the image and integrity of the officer's public
office; the conduct need not be related or connected to the public
officer's official functions for the said officer to be meted the
corresponding penalty. 27 The basis for such liability is Republic
Act No. 6713, or the Code of Conduct and Ethical Standards for
Public Officials and Employees, particularly Section 4 (c) thereof,
which ordains that public officials and employees shall at all times
respect the rights of others, and shall refrain from doing acts
contrary to public safety and public interest. 28 In one case, this
Court also stated that the Machiavellian principle that "the end
justifies the means" has no place in government service, which
thrives on the rule of law, consistency and stability. 29
For these reasons, in the case at bar, We agree with the appellate
court that the petitioners' actions, though well-intentioned, were
improper and done in excess of what was required by the situation
and fell short of the aforementioned standards of behavior for
public officials.
It is clear from the records that petitioners indeed cut or sawed in
half the subject basketball ring, which resulted in the destruction
of the said equipment and rendered it completely
unusable. 30 Petitioners also moved instantaneously and did not
deliberate nor consult with the Sangguniang Barangay prior to
committing the subject acts; neither did they involve any police or
law enforcement agent in their actions. They acted while tempers
were running high as petitioner Cruz, the Barangay Chairperson,
became incensed at the removal of the steel bar and padlock that
was earlier used to close access to the ring and at the inability or
refusal of respondents' group to return the said steel bar and
padlock to her as she had ordered.
The destructive acts of petitioners, however, find no legal sanction.
This Court has ruled time and again that no public official is above
the law. 31 The Court of Appeals correctly ruled that although
petitioners claim to have merely performed an abatement of a
public nuisance, the same was done summarily while failing to
follow the proper procedure therefor and for which, petitioners
must be held administratively liable.
Prevailing jurisprudence holds that unless a nuisance is a
nuisance per se, it may not be summarily abated. 32
There is a nuisance when there is "any act, omission,
establishment, business, condition of property, or anything else
which: (1) injures or endangers the health or safety of others; or
(2) annoys or offends the senses; or (3) shocks, defies or
disregards decency or morality; or (4) obstructs or interferes with
the free passage of any public highway or street, or any body of
water; or (5) hinders or impairs the use of property." 33 But other
than the statutory definition, jurisprudence recognizes that the
term "nuisance" is so comprehensive that it has been applied to
almost all ways which have interfered with the rights of the citizens,
either in person, property, the enjoyment of his property, or his
comfort. 34 DETACa
A nuisance is classified in two ways: (1) according to the object it
affects; or (2) according to its susceptibility to summary
abatement.
As for a nuisance classified according to the object or objects that
it affects, a nuisance may either be: (a) a public nuisance, i.e., one
which "affects a community or neighborhood or any considerable
number of persons, although the extent of the annoyance, danger
or damage upon individuals may be unequal"; or (b) a private
nuisance, or one "that is not included in the foregoing definition"
which, in jurisprudence, is one which "violates only private rights
and produces damages to but one or a few persons." 35
A nuisance may also be classified as to whether it is susceptible
to a legal summary abatement, in which case, it may either be: (a)
a nuisance per se, when it affects the immediate safety of persons
and property, which may be summarily abated under the
undefined law of necessity; 36 or, (b) a nuisance per accidens,
which "depends upon certain conditions and circumstances, and
its existence being a question of fact, it cannot be abated without
due hearing thereon in a tribunal authorized to decide whether
such a thing does in law constitute a nuisance;" 37 it may only be
so proven in a hearing conducted for that purpose and may not be
summarily abated without judicial intervention. 38
In the case at bar, none of the tribunals below made a factual
finding that the basketball ring was a nuisance per se that is
susceptible to a summary abatement. And based on what appears
in the records, it can be held, at most, as a mere nuisance per
accidens, for it does not pose an immediate effect upon the safety
of persons and property, the definition of a nuisance per se.
Culling from examples cited in jurisprudence, it is unlike a mad dog
on the loose, which may be killed on sight because of the
immediate danger it poses to the safety and lives of the people;
nor is it like pornographic materials, contaminated meat and
narcotic drugs which are inherently pernicious and which may be
summarily destroyed; nor is it similar to a filthy restaurant which
may be summarily padlocked in the interest of the public
health. 39 A basketball ring, by itself, poses no immediate harm or
danger to anyone but is merely an object of recreation. Neither is
it, by its nature, injurious to rights of property, of health or of
comfort of the community and, thus, it may not be abated as a
nuisance without the benefit of a judicial hearing. 40
But even if it is assumed, ex gratia argumenti, that the basketball
ring was a nuisance per se, but without posing any immediate
harm or threat that required instantaneous action, the destruction
or abatement performed by petitioners failed to observe the proper
procedure for such an action which puts the said act into legal
question.
Under Article 700 of the Civil Code,the abatement, including one
without judicial proceedings, of a public nuisance is the
responsibility of the district health of officer. Under Article 702 of
the Code, the district health officer is also the official who shall
determine whether or not abatement, without judicial proceedings,
is the best remedy against a public nuisance. The two articles do
not mention that the chief executive of the local government, like
the Punong Barangay, is authorized as the official who can
determine the propriety of a summary abatement.
Further, both petitioner Cruz, as Punong Barangay, and petitioner
Dela Cruz, as Barangay Tanod, claim to have acted in their official
capacities in the exercise of their powers under the general welfare
clause of the Local Government Code.However, petitioners could
cite no barangay nor city ordinance that would have justified their
summary abatement through the exercise of police powers found
in the said clause. No barangay nor city ordinance was violated;
neither was there one which specifically declared the said
basketball ring as a nuisance per se that may be summarily
abated. Though it has been held that a nuisance per se may be
abated via an ordinance, without judicial proceedings, 41 We add
that, in the case at bar, petitioners were required to justify their
abatement via such an ordinance because the power they claim to
have exercised the police power under the general welfare
clause is a power exercised by the government mainly through
its legislative, and not the executive, branch. The prevailing
jurisprudence is that local government units such as the provinces,
cities, municipalities and barangays exercise police power through
their respective legislative bodies. 42
The general welfare clause provides for the exercise of police
power for the attainment or maintenance of the general welfare of
the community. The power, however, is exercised by the
government through its legislative branch by the enactment of laws
regulating those and other constitutional and civil
rights. 43 Jurisprudence defines police power as the plenary
power vested in the legislature to make statutes and ordinances
to promote the health, morals, peace, education, good order or
safety and general welfare of the people. 44 The Latin maxim
is salus populi est suprema lex (the welfare of the people is the
supreme law). 45 Police power is vested primarily with the national
legislature, which may delegate the same to local governments
through the enactment of ordinances through their legislative
bodies (the sanggunians). 46 The so-called general welfare
clause, provided for in Section 16 of the Local Government Code,
provides for such delegation of police power, to wit:
Section 16. General Welfare. Every local government unit shall
exercise the powers expressly granted, those necessarily implied
therefrom, as well as powers necessary, appropriate, or incidental
for its efficient and effective governance, and those which are
essential to the promotion of the general welfare. Within their
respective territorial jurisdictions, local government units shall
ensure and support, among other things, the preservation and
enrichment of culture, promote health and safety, enhance the
right of the people to a balanced ecology, encourage and support
the development of appropriate and self-reliant scientific and
technological capabilities, improve public morals, enhance
economic prosperity and social justice, promote full employment
among their residents, maintain peace and order, and preserve
the comfort and convenience of their inhabitants.
Flowing from this delegated police power of local governments, a
local government unit like Barangay 848, Zone 92 in which
petitioners were public officials, exercises police power through its
legislative body, in this case, its Sangguniang
Barangay. 47 Particularly, the ordinances passed by
the sanggunian partly relate to the general welfare of the
barangay, as also provided for by the Local Government Code as
follows: aDSIHc
Section 391. Powers, Duties, and Functions.
(a) The sangguniang barangay, as the legislative body of the
barangay, shall:
(1) Enact ordinances as may be necessary to discharge the
responsibilities conferred upon it by law or ordinance and to
promote the general welfare of the inhabitants therein;
(emphasis supplied)
Even the powers granted to the punong barangay consist mainly
of executing only those laws and ordinances already enacted by
the legislative bodies, including the said official's
own sangguniang barangay, to wit:
Section 389. Chief Executive: Powers, Duties, and Functions.
(a) The punong barangay, as the chief executive of the barangay
government, shall exercise such powers and perform such duties
and functions, as provided by this Code and other laws.
(b) For efficient, effective and economical governance,
the purpose of which is the general welfare of the barangay and
its inhabitants pursuant to Section 16 of this Code, the punong
barangay shall:
(1) Enforce all laws and ordinances which are applicable within
the barangay;
xxx xxx xxx
(3) Maintain public order in the barangay and, in pursuance
thereof, assist the city or municipal mayor and the sanggunian
members in the performance of their duties and functions;
xxx xxx xxx
(14) Promote the general welfare of the barangay;
(15) Exercise such other powers and perform such other
duties and functions as may be prescribed by law or
ordinance. 48
Clearly, the complete destruction of the basketball ring by the
petitioners is justified neither by law or ordinance nor even by
equity or necessity, which makes the act illegal and petitioners
liable. And even as an action to maintain public order, it was done
excessively and was unjustified. Where a less damaging action,
such as the mere padlocking, removal or confiscation of the ring
would have sufficed, petitioners resorted to the drastic measure of
completely destroying and rendering as unusable the said ring,
which was a private property, without due process. Such an act
went beyond what the law required and, in being so, it tarnished
the image and integrity of the offices held by petitioners and
diminished the public's confidence in the legal system. Petitioners
who were public officials should not have been too earnest at what
they believed was an act of restoring peace and order in the
community if in the process they would end up disturbing it
themselves. They cannot break the law that they were duty-bound
to enforce. Although the Court bestows sympathy to the numerous
constituents who allegedly complained against the basketball
court to petitioners, it cannot legally agree with the methods
employed by the said officials. Their good intentions do not justify
the destruction of private property without a legal warrant, because
the promotion of the general welfare is not antithetical to the
preservation of the rule of law. 49 Unlike the examples cited earlier
of a mad dog on the loose, pornography on display or a filthy
restaurant, which all pose immediate danger to the public and,
therefore, could be addressed by anyone on sight, a basketball
ring as a nuisance poses no such urgency that could have
prevented petitioners from exercising any form of deliberation or
circumspection before, acting on the same.
Petitioners do not claim to have acted in their private capacities
but in their capacities as public officials, thus, they are held
administratively liable for their acts. And even in their capacities as
private individuals who may have abated a public nuisance,
petitioners come up short of the legal requirements. They do not
claim to have complied with any of the requisites laid down in
Article 704 of the Civil Code,to wit:
Art. 704. Any private person may abate a public nuisance which is
specially injurious to him by removing, or if necessary, by
destroying the thing which constitutes the same, without
committing a breach of the peace, or doing unnecessary injury.
But it is necessary:
(1) That demand be first made upon the owner or possessor of the
property to abate the nuisance;
(2) That such demand has been rejected;
(3) That the abatement be approved by the district health officer
and executed with the assistance of the local police; and
(4) That the value of the destruction does not exceed three
thousand pesos.
WHEREFORE, premises considered, the petition is DENIED. The
Court of Appeals Decision dated March 31, 2008 in CA-G.R. SP.
No. 104474 is AFFIRMED.
SO ORDERED.
||| (Cruz v. Pandacan Hiker's Club, Inc., G.R. No. 188213, [January
11, 2016])
PILAR DEVT CORP. v. DUMADAG
THIRD DIVISION
[G.R. No. 194336. March 11, 2013.]
PILAR DEVELOPMENT CORPORATION, petitioner, vs.
RAMON DUMADAG, EMMA BACABAC, RONALDO
NAVARRO, JIMMY PAGDALIAN, PAY DELOS SANTOS,
ARMANDO TRILLOS, FELICISIMO TRILLOS, ARCANGEL
FLORES, EDDIE MARTIN, PRESILLA LAYOG, CONRADO
CAGUYONG, GINA GONZALES, ARLENE PEDROSA,
JOCELYN ABELINO, ROQUE VILLARAZA, ROLANDO
VILLARAZA, CAMILO GENOVE, NILDA ROAYANA, SUSAN
ROAYANA, JUANCHO PANGANIBAN, BONG DE GUZMAN,
ARNOLD ENVERSO, DONNA DELA RAZA, EMELYN
HAGNAYA, FREDDIE DE LEON, RONILLO DE LEON, MARIO
MARTINEZ, and PRECY LOPEZ,respondents.
DECISION
PERALTA, J p:
Challenged in this petition for review on certiorari under Rule 45 of
the Rules of Civil Procedure are the March 5, 2010 Decision 1 and
October 29, 2010 Resolution 2 of the Court of Appeals (CA) in CA-
G.R. CV No. 90254, which affirmed the May 30, 2007
Decision 3 of the Las Pias Regional Trial Court, Branch 197 (trial
court) dismissing the complaint filed by petitioner.
On July 1, 2002, petitioner filed a Complaint 4 for accion
publiciana with damages against respondents for allegedly
building their shanties, without its knowledge and consent, in its
5,613-square-meter property located at Daisy Road,
Phase V, Pilar Village Subdivision, Almanza, Las Pias City. It
claims that said parcel of land, which is duly registered in its name
under Transfer Certificate of Title No. 481436 of the Register of
Deeds for the Province of Rizal, was designated as an open space
of Pilar Village Subdivision intended for village recreational
facilities and amenities for subdivision residents. 5 In their Answer
with Counterclaim, 6 respondents denied the material allegations
of the Complaint and briefly asserted that it is the local
government, not petitioner, which has jurisdiction and authority
over them.
Trial ensued. Both parties presented their respective witnesses
and the trial court additionally conducted an ocular inspection of
the subject property.
On May 30, 2007, the trial court dismissed petitioner's complaint,
finding that the land being occupied by respondents are situated
on the sloping area going down and leading towards the
Mahabang Ilog Creek, and within the three-meter legal easement;
thus, considered as public property and part of public dominion
under Article 502 7 of the New Civil Code (Code), which could not
be owned by petitioner. The court held: DacASC
. . . The land title of [petitioner] only proves that it is the owner in
fee simple of the respective real properties described therein, free
from all liens and encumbrances, except such as may be
expressly noted thereon or otherwise reserved by law . . . . And in
the present case, what is expressly reserved is what is written in
TCT No. T-481436, to wit "that the 3.00 meter strip of the lot
described herein along the Mahabang Ilog Creek is reserved for
public easement purposes. (From OCT 1873/A-50) and to the
limitations imposed by Republic Act No. 440. . . ." 8
The trial court opined that respondents have a better right to
possess the occupied lot, since they are in an area reserved for
public easement purposes and that only the local government of
Las Pias City could institute an action for recovery of possession
or ownership.
Petitioner filed a motion for reconsideration, but the same was
denied by the trial court in its Order dated August 21,
2007. 9 Consequently, petitioner elevated the matter to the Court
of Appeals which, on March 5, 2010, sustained the dismissal of
the case.
Referring to Section 2 10 of Administrative Order (A.O.) No. 99-21
of the Department of Environment and Natural Resources
(DENR), the appellate court ruled that the 3-meter area being
disputed is located along the creek which, in turn, is a form of a
stream; therefore, belonging to the public dominion. It said that
petitioner could not close its eyes or ignore the fact, which is
glaring in its own title, that the 3-meter strip was indeed reserved
for public easement. By relying on the TCT, it is then estopped
from claiming ownership and enforcing its supposed right. Unlike
the trial court, however, the CA noted that the proper party entitled
to seek recovery of possession of the contested portion is not the
City of Las Pias, but the Republic of the Philippines, through the
Office of the Solicitor General (OSG), pursuant to Section
101 11 of Commonwealth Act (C.A.) No. 141 (otherwise known
as The Public Land Act).
The motion for reconsideration filed by petitioner was denied by
the CA per Resolution dated October 29, 2010, hence, this
petition.
Anchoring its pleadings on Article 630 12 of the Code, petitioner
argues that although the portion of the subject property occupied
by respondents is within the 3-meter strip reserved for public
easement, it still retains ownership thereof since the strip does not
form part of the public dominion. As the owner of the subject parcel
of land, it is entitled to its lawful possession, hence, the proper
party to file an action for recovery of possession against
respondents conformably with Articles 428 13 and 539 14 of the
Code. cAaETS
We deny.
An easement or servitude is a real right on another's property,
corporeal and immovable, whereby the owner of the latter must
refrain from doing or allowing somebody else to do or something
to be done on his or her property, for the benefit of another person
or tenement; it is jus in re aliena, inseparable from the estate to
which it actively or passively belongs, indivisible, perpetual, and a
continuing property right, unless extinguished by causes provided
by law. 15 The Code defines easement as an encumbrance
imposed upon an immovable for the benefit of another immovable
belonging to a different owner or for the benefit of a community, or
of one or more persons to whom the encumbered estate does not
belong. 16 There are two kinds of easement according to source:
by law or by will of the owners the former are called legal and
the latter voluntary easement. 17 A legal easement or compulsory
easement, or an easement by necessity constituted by law has for
its object either public use or the interest of private persons. 18
While Article 630 of the Code provides for the general rule that
"[t]he owner of the servient estate retains the ownership of the
portion on which the easement is established, and may use the
same in such a manner as not to affect the exercise of the
easement," Article 635 thereof is specific in saying that "[a]ll
matters concerning easements established for public or
communal use shall be governed by the special laws and
regulations relating thereto, and, in the absence thereof, by the
provisions of this Title [Title VII on Easements or Servitudes]."
In the case at bar, the applicability of DENR A.O. No. 99-21 dated
June 11, 1999, which superseded DENR A.O. No. 97-05 19 dated
March 6, 1997 and prescribed the revised guidelines in the
implementation of the pertinent provisions of Republic Act (R.A.)
No. 1273 and Presidential Decree (P.D.) Nos. 705 and 1067,
cannot be doubted. Inter alia, it was issued to further the
government's program of biodiversity preservation. Aside from
Section 2.1 above-quoted, Section 2.3 of which further mandates:
2.3 Survey of Titled Lands:
2.3.1 Administratively Titled Lands:
The provisions of item 2.1.a and 2.1.b shall be observed as the
above. However, when these lands are to be subdivided,
consolidated or consolidated-subdivided, the strip of three (3)
meters which falls within urban areas shall be demarcated and
marked on the plan for easement and bank protection. TEDHaA
The purpose of these strips of land shall be noted in the technical
description and annotated in the title.
xxx xxx xxx
2.3.3 Complex Subdivision or Consolidation Subdivision Surveys
for Housing/Residential, Commercial or Industrial Purposes:
When titled lands are subdivided or consolidated-subdivided into
lots for residential, commercial or industrial purposes the
segregation of the three (3) meter wide strip along the banks of
rivers or streams shall be observed and be made part of the open
space requirement pursuant to P.D. 1216.
The strip shall be preserved and shall not be subject to subsequent
subdivision. (Underscoring supplied)
Certainly, in the case of residential subdivisions, the allocation of
the 3-meter strip along the banks of a stream, like the Mahabang
Ilog Creek in this case, is required and shall be considered as
forming part of the open space requirement pursuant to P.D. 1216
dated October 14, 1977. 20 Said law is explicit: open spaces are
"for public use and are, therefore, beyond the commerce of men"
and that "[the] areas reserved for parks, playgrounds and
recreational use shall be non-alienable public lands, and non-
buildable."
Running in same vein is P.D. 1067 or The Water Code of the
Philippines 21 which provides:
Art. 51. The banks of rivers and streams and the shores of the
seas and lakes throughout their entire length and within a zone of
three (3) meters in urban areas, twenty (20) meters in agricultural
areas and forty (40) meters in forest areas, along their
margins, are subject to the easement of public use in the interest
of recreation, navigation, floatage, fishing and salvage. No person
shall be allowed to stay in this zone longer than what is necessary
for recreation, navigation, floatage, fishing or salvage or to build
structures of any kind. (Underscoring supplied) ISDHEa
Thus, the above proves that petitioner's right of ownership and
possession has been limited by law with respect to the 3-meter
strip/zone along the banks of Mahabang Ilog Creek. Despite this,
the Court cannot agree with the trial court's opinion, as to which
the CA did not pass upon, that respondents have a better right to
possess the subject portion of the land because they are
occupying an area reserved for public easement purposes. Similar
to petitioner, respondents have no right or title over it precisely
because it is public land. Likewise, we repeatedly held that
squatters have no possessory rights over the land intruded
upon. 22 The length of time that they may have physically
occupied the land is immaterial; they are deemed to have entered
the same in bad faith, such that the nature of their possession is
presumed to have retained the same character throughout their
occupancy. 23
As to the issue of who is the proper party entitled to institute a case
with respect to the 3-meter strip/zone, We find and so hold that
both the Republic of the Philippines, through the OSG and the
local government of Las Pias City, may file an action depending
on the purpose sought to be achieved. The former shall be
responsible in case of action for reversion under C.A. 141, while
the latter may also bring an action to enforce the relevant
provisions of Republic Act No. 7279 (otherwise known as
the Urban Development and Housing Act of 1992). 24 Under R.A.
7279, which was enacted to uplift the living conditions in the poorer
sections of the communities in urban areas and was envisioned to
be the antidote to the pernicious problem of squatting in the
metropolis, 25 all local government units (LGUs) are mandated to
evict and demolish persons or entities occupying danger areas
such as esteros, railroad tracks, garbage dumps, riverbanks,
shorelines, waterways, and other public places such as sidewalks,
roads, parks, and playgrounds. 26 Moreover, under pain of
administrative and criminal liability in case of non-compliance, 27 it
obliges LGUs to strictly observe the following:
Section 29. Resettlement. Within two (2) years from the
effectivity of this Act, the local government units, in coordination
with the National Housing Authority, shall implement the relocation
and resettlement of persons living in danger areas such as
esteros, railroad tracks, garbage dumps, riverbanks, shorelines,
waterways, and in other public places such as sidewalks, roads,
parks and playgrounds. The local government unit, in coordination
with the National Housing Authority, shall provide relocation or
resettlement sites with basic services and facilities and access to
employment and livelihood opportunities sufficient to meet the
basic needs of the affected families.
Section 30. Prohibition Against New Illegal Structures. It shall
be unlawful for any person to construct any structure in areas
mentioned in the preceding section.
After the effectivity of this Act, the barangay, municipal or city
government units shall prevent the construction of any kind or
illegal dwelling units or structures within their respective localities.
The head of any local government unit concerned who allows,
abets or otherwise tolerates the construction of any structure in
violation of this section shall be liable to administrative sanctions
under existing laws and to penal sanctions provided for in this
Act. SIcCTD
Yet all is not lost for petitioner. It may properly file an action
for mandamus to compel the local government of Las Pias City
to enforce with reasonable dispatch the eviction, demolition, and
relocation of respondents and any other persons similarly situated
in order to give flesh to one of the avowed policies of R.A. 7279,
which is to reduce urban dysfunctions, particularly those that
adversely affect public health, safety, and ecology. 28 Indeed, as
one of the basic human needs, housing is a matter of state concern
as it directly and significantly affects the general welfare. 29
WHEREFORE, the petition is DENIED. The March 5, 2010
Decision and October 29, 2010 Resolution of the Court of Appeals
in CA-G.R. CV No. 90254, which affirmed the May 30, 2007
Decision of the Las Pias RTC, Branch 197, dismissing petitioner's
complaint, is hereby AFFIRMED.
SO ORDERED.
||| (Pilar Development Corp. v. Dumadag, G.R. No. 194336,
[March 11, 2013], 706 PHIL 93-105)
CALIMOSO v. ROULLO
SECOND DIVISION
[G.R. No. 198594. January 25, 2016.]
HELEN CALIMOSO, MARILYN P. CALIMOSO and LIBY
P. CALIMOSO, petitioners, vs. AXEL D. ROULLO, respondent.
DECISION
BRION, J p:
Before us is a petition for review on certiorari 1 assailing the
December 15, 2010 decision 2 and the August 23, 2011
resolution 3 of the Court of Appeals (CA), Cebu City, in CA-G.R.
CEB CV No. 00834. The CA affirmed the decision of the Regional
Trial Court (RTC), Branch 29, Iloilo City, in Civil Case No. CEB-
23858 that ordered the establishment of an "easement of right of
way" in favor of respondent Axel D. Roullo.
Facts of the Case
In his Complaint 4 for Easement of Right of Way, the respondent
mainly alleged: that he is the owner of Lot 1462-C-1 5 situated in
Brgy. Sambag, Jaro, Iloilo City; that his lot is isolated by several
surrounding estates, including Lot 1454-B-25 6 owned by
petitioners Helen, Marilyn, and Liby, all surnamed Calimoso; that
he needs a right-of-way in order to have access to a public road;
and that the shortest and most convenient access to the nearest
public road, i.e., Fajardo Subdivision Road, passes through the
petitioners' lot.
The petitioners objected to the establishment of the easement
because it would cause substantial damage to the two (2) houses
already standing on their property. They alleged that the
respondent has other right-of-way alternatives, such as the
existing wooden bridge over Sipac Creek bounding the
respondent's lot on the northeast; that the bridge, if made
concrete, could provide ingress or egress to the Fajardo
Subdivision Road. AaCTcI
Due to the respondent's allegedly malicious and groundless suit,
the petitioners claimed entitlement to the following awards:
P100,000.00 as moral damages, P30,000.00 as exemplary
damages, P50,000.00 as attorney's fees, P1,000.00 as
appearance fee, and P15,000.00 as litigation expenses.
In a decision dated September 29, 2003, the RTC granted the
respondent's complaint and ordered the petitioners to provide the
respondent an easement of right-of-way "measuring 14 meters in
length and 3 meters in width (42 square meters, more or less) over
Lot 1454-B-25, specifically at the portion adjoining the bank of
Sipac Creek." Accordingly, the RTC ordered the respondent to pay
the petitioners proper indemnity in the amount of "Php1,500.00 per
square meter of the portion of the lot subject of the easement." The
petitioners appealed the RTC's decision to the CA.
The CA, in its assailed December 15, 2010 decision, affirmed in
toto the RTC's decision and held that all the requisites for the
establishment of a legal or compulsory easement of right-of-way
were present in the respondent's case: first, that the subject lot is
indeed surrounded by estates owned by different individuals and
the respondent has no access to any existing public road; second,
that the respondent has offered to compensate the petitioners for
the establishment of the right-of-way through the latter's
property; third, that the isolation of the subject lot was not caused
by the respondent as he purchased the lot without any adequate
ingress or egress to a public highway; and, fourth and last, given
the available options for the right-of-way, the route that passes
through the petitioners' lot requires the shortest distance to
a public road and can be established at a point least
prejudicial to the petitioners' property.
The petitioners moved to reconsider the CA's decision arguing
that, while the establishment of the easement through their lot
provided for the shortest route, the adjudged right-of-way would
cause severe damage not only to the nipa hut situated at the
corner of the petitioners' lot, but also to the bedroom portion of the
other concrete house that stood on the property. The CA, however,
did not consider the petitioners' arguments on the ground that the
matters alleged were not raised or proven before the trial court,
thus, it denied the petitioners' motion for reconsideration.
The petitioners filed the present petition for review
on certiorari raising the issues of: (a) whether the respondent has
met all the requisites for the establishment of a legal easement of
right-of-way on Lot 1454-B-25 owned by the petitioners, (b)
whether the establishment of the right-of-way on the petitioners' lot
is at the point least prejudicial to the servient estate, and (c)
whether a right-of-way can be established through other lots
surrounding the respondent's property other than through the
petitioners' property.
OUR RULING
We disagree with the CA finding that all the requisites for the
valid establishment of an easement of right-of-way are
present in this case.
To be entitled to an easement of right-of-way, the following
requisites should be met:
"1. The dominant estate is surrounded by other immovables and
has no adequate outlet to a public highway;
2. There is payment of proper indemnity;
3. The isolation is not due to the acts of the proprietor of the
dominant estate; and EcTCAD
4. The right-of-way claimed is at the point least prejudicial to the
servient estate; and insofar as consistent with this rule, where the
distance from the dominant estate to a public highway may be the
shortest." 7
The immovable in whose favor the easement is established is
called the dominant estate, and the property subject to the
easement is called the servient estate. 8 Here, the respondent's
lot is the dominant estate and the petitioners' lot is the servient
estate.
That the respondent's lot is surrounded by several estates and has
no access to a public road are undisputed. The only question
before this Court is whether the right-of-way passing through the
petitioners' lot satisfies the fourth requirement of
being established at the point least prejudicial to the servient
estate.
Three options were then available to the respondent for the
demanded right-of-way: the first option is to traverse directly
through the petitioners' property, which route has an approximate
distance of fourteen (14) meters from the respondent's lot to the
Fajardo Subdivision Road; the second option is to pass through
two vacant lots (Lots 1461-B-1 and 1461-B-2) located on the
southwest of the respondent's lot, which route has an approximate
distance of forty-three (43) meters to another public highway, the
Diversion Road; and the third option is to construct a concrete
bridge over Sipac Creek and ask for a right-of-way on the property
of a certain Mr. Basa in order to reach the Fajardo Subdivision
Road.
Among the right-of-way alternatives, the CA adopted the first
option, i.e., passing through the petitioner's lot, because it offered
the shortest distance (from the respondent's lot) to the Fajardo
Subdivision Road and the right-of-way would only affect the
"nipa hut" standing on the petitioners' property. The CA held that
the establishment of the easement through the petitioners' lot was
more practical, economical, and less burdensome to the parties.
Article 650 of the Civil Code provides that the easement of right-
of-way shall be established at the point least prejudicial to the
servient estate, and, insofar as consistent with this rule, where the
distance from the dominant estate to a public highway may be
the shortest. Under this guideline, whenever there are several
tenements surrounding the dominant estate, the right-of-way must
be established on the tenement where the distance to the public
road or highway is shortest and where the least damage would be
caused. If these two criteria (shortest distance and least damage)
do not concur in a single tenement, we have held in the past that
the least prejudice criterion must prevail over the shortest
distance criterion. 9
In this case, the establishment of a right-of-way through the
petitioners' lot would cause the destruction of the wire fence and a
house on the petitioners' property. 10Although this right-of-way
has the shortest distance to a public road, it is not the least
prejudicial considering the destruction pointed out, and that an
option to traverse two vacant lots without causing any damage,
albeit longer, is available. HSAcaE
We have held that "mere convenience for the dominant estate is
not what is required by law as the basis of setting up a compulsory
easement;" 11 that "a longer way may be adopted to avoid injury
to the servient estate, such as when there are constructions or
walls which can be avoided by a round-about way." 12
WHEREFORE, we hereby GRANT the present petition for review
on certiorari and REVERSE and SET ASIDE the decision dated
December 15, 2010, and resolution dated August 23, 2011, of the
Court of Appeals in CA-G.R. CEB CV No. 00834. The complaint
for the easement of right-of-way is DISMISSED without prejudice
to another complaint that the respondent may file against the
proper party or parties based on the terms of this Decision.
Costs against respondent Axel D. Roullo.
SO ORDERED.
||| (Calimoso v. Roullo, G.R. No. 198594, [January 25, 2016])
LIWAG v. GLEN LOOP HOMEOWNERS ASSOC
SECOND DIVISION
[G.R. No. 189755. July 4, 2012.]
EMETERIA LIWAG, petitioner, vs. HAPPY GLEN LOOP HOME
OWNERS ASSOCIATION, INC., respondent.
DECISION
SERENO, J p:
This Rule 45 Petition assails the Decision 1 and Resolution 2 of
the Court of Appeals (CA) in CA-G.R. SP No. 100454. The CA
affirmed with modification the Decision 3 and Order 4 of the Office
of the President (O.P.) in OP Case No. 05-G-224, which had set
aside the Decision 5 of the Board of Commissioners of the
Housing and Land Use Regulatory Board (HLURB) in HLURB
Case No. REM-A-041210-0261 and affirmed the Decision 6 of the
Housing and Land Use Arbiter in HLURB Case No. REM-030904-
12609.
The controversy stems from a water facility
in Happy Glen Loop Subdivision (the Subdivision), which is
situated in Deparo, Caloocan City.
Sometime in 1978, F.G.R. Sales, the original developer
of Happy Glen Loop, obtained a loan from Ernesto Marcelo
(Marcelo), the owner of T.P. Marcelo Realty Corporation. To settle
its debt after failing to pay its obligation, F.G.R. Sales assigned to
Marcelo all its rights over several parcels of land in the Subdivision,
as well as receivables from the lots already sold. 7
As the successor-in-interest of the original developer, Marcelo
represented to subdivision lot buyers, the National Housing
Authority (NHA) and the Human Settlement Regulatory
Commission (HSRC) that a water facility was available in the
Subdivision. 8
For almost 30 years, the residents of the Subdivision relied on this
facility as their only source of water. 9 This fact was acknowledged
by Marcelo and Hermogenes Liwag(Hermogenes), petitioner's
late husband who was then the president of
respondent Happy Glen Loop Homeowners Association
(Association). 10 TIaCAc
Sometime in September 1995, Marcelo sold Lot 11, Block No. 5 to
Hermogenes. As a result, Transfer Certificate of Title (TCT) No. C-
350099 was issued to him. When Hermogenes died in 2003,
petitioner Emeteria P. Liwag subsequently wrote a letter to
respondent Association, demanding the removal of the overhead
water tank from the subject parcel of land. 11
Refusing to comply with petitioner's demand, respondent
Association filed before the HLURB an action for specific
performance; confirmation, maintenance and donation of water
facilities; annulment of sale; and cancellation of TCT No. 350099
against T.P. Marcelo Realty Corporation (the owner and developer
of the Subdivision), petitioner Emeteria, and the other surviving
heirs of Hermogenes.
After the parties submitted their respective position papers,
Housing and Land Use Arbiter Joselito Melchor (Arbiter Melchor)
ruled in favor of the Association. He invalidated the transfer of the
parcel of land in favor of Hermogenes in a Decision dated 5
October 2004, the dispositive portion of which reads: 12
WHEREFORE, premises considered, judgment is hereby
rendered as follows:
1. Confirming the existence of an easement for water
system/facility or open space on Lot 11, Block 5 of TCT No. C-
350099 wherein the deep well and overhead tank are situated,
2. Making the Temporary Restraining Order dated 01 April 2004
permanent so as to allow the continuous use and maintenance of
the said water facility, i.e., deep well and over head water tank, on
the subject lot, by the complainant's members and residents of the
subject project, and restraining all the respondents from
committing the acts complained of and as described in the
complaint,
3. Declaring as void ab initio the deed of sale dated 26 February
2001, involving Lot 11, Block 5 in favor of spouses Liwag, and TCT
No. C-350099 in the name of same respondents without prejudice
to complainant's right to institute a criminal action in coordination
with the prosecuting arms of the government against respondents
Marcelo and Liwag, and furthermore, with recourse
by Liwag against T.P. and/or Marcelo to ask for replacement for
controverted lot with a new one within the subject project; and
4. Ordering respondents, jointly and severally, to pay complainant
the amount of P10,000.00 as attorney's fees and the amount of
P20,000.00 as damages in favor of the complainant's members.
SO ORDERED.
On appeal before the HLURB Board of Commissioners, the Board
found that Lot 11, Block 5 was not an open space. Moreover, it
ruled that Marcelo had complied with the requirements
of Presidential Decree No. (P.D.) 1216 with the donation of 9,047
square meters of open space and road lots. It further stated that
there was no proof that Marcelo or the original subdivision owner
or developer had at any time represented that Lot 11, Block 5 was
an open space. It therefore concluded that the use of the lot as site
of the water tank was merely tolerated. 13 SCEHaD
Respondent Association interposed an appeal to the OP, which
set aside the Decision of the HLURB Board of Commissioners and
affirmed that of the Housing and Land Use Arbiter. 14
The OP ruled that Lot 11, Block 5 was an open space, because it
was the site of the water installation of the Subdivision, per
Marcelo's official representation on file with the HLURB National
Capital Region Field Office. The OP further ruled that the open
space required under P.D. 957 excluded road lots; and, thus, the
Subdivision's open space was still short of that required by law.
Finally, it ruled that petitioner Liwag was aware of the
representations made by Marcelo and his predecessors-in-
interest, because he had acknowledged the existence of a water
installation system as per his Affidavit of 10 August 1982. 15
Petitioner Liwag unsuccessfully moved for
reconsideration, 16 then filed a Rule 43 Petition for Review before
the CA. 17
The CA affirmed that the HLURB possessed jurisdiction to
invalidate the sale of the subject parcel of land to Hermogenes and
to invalidate the issuance of TCT No. C-350099 pursuant
thereto. 18 The appellate court agreed with the OP that an
easement for water facility existed on the subject parcel of land
and formed part of the open space required to be reserved by the
subdivision developer under P.D. 957. 19 However, it ruled that
Arbiter Melchor should not have recommended the filing of a
criminal action against petitioner, as she was not involved in the
development of the Subdivision or the sale of its lots to
buyers. 20 The CA likewise deleted the award of attorney's fees
and damages in favor of respondent. 21
Aggrieved, petitioner filed the instant Petition before this Court.
The Court's Ruling
We affirm the ruling of the appellate court.
I
The HLURB has exclusive jurisdiction
over the case at bar
The jurisdiction of the HLURB is outlined in P.D. 1344,
"Empowering the National Housing Authority to Issue Writ of
Execution in the Enforcement of its Decision under Presidential
Decree No. 957," viz.:
Sec. 1. In the exercise of its functions to regulate real estate trade
and business and in addition to its powers provided for
in Presidential Decree No. 957, the National Housing Authority
shall have the exclusive jurisdiction to hear and decide cases of
the following nature.
A. Unsound real estate business practices;
B. Claims involving refund and any other claims filed by
subdivision lot or condominium unit buyer against the project
owner, developer, dealer, broker or salesman; and
C. Cases involving specific performance of contractual and
statutory obligations filed by buyers of subdivision lots or
condominium units against the owner, developer, broker or
salesman.
When respondent Association filed its Complaint before the
HLURB, it alleged that Marcelo's sale of Lot 11, Block 5 to
Hermogenes was done in violation of P.D. 957 in the following
manner:
12. Through fraudulent acts and connivance of [T.P. and Ernesto
Marcelo] and the late Liwag and without the knowledge and
consent of the complainants all in violation of P.D. 957 and its
implementing regulations, respondents T.P. and Ernesto
Marcelo transferred the same lot where the deep well is located
which is covered by TCT No. C-41785 in favor of
spouses Hermogenes Liwag and Emeteria Liwag to the great
damage and prejudice of complainants . . . . 22 (Emphasis in
the original) SaCIAE
We find that this statement sufficiently alleges that the subdivision
owner and developer fraudulently sold to Hermogenes the lot
where the water facility was located. Subdivisions are mandated
to maintain and provide adequate water facilities for their
communities. 23 Without a provision for an alternative water
source, the subdivision developer's alleged sale of the lot where
the community's sole water source was located constituted a
violation of this obligation. Thus, this allegation makes out a case
for an unsound real estate business practice of the subdivision
owner and developer. Clearly, the case at bar falls within the
exclusive jurisdiction of the HLURB.
It is worthy to note that the HLURB has exclusive jurisdiction over
complaints arising from contracts between the subdivision
developer and the lot buyer, or those aimed at compelling the
subdivision developer to comply with its contractual and statutory
obligations to make the Subdivision a better place to live
in. 24 This interpretation is in line with one of P.D. 957's "Whereas
clauses," which provides:
WHEREAS, numerous reports reveal that many real estate
subdivision owners, developers, operators, and/or sellers have
reneged on their representations and obligations to provide and
maintain properly subdivision roads, drainage, sewerage, water
systems, lighting systems, and other similar basic requirements,
thus endangering the health and safety of home and lot buyers. . .
..
P.D. 957 was promulgated to closely regulate real estate
subdivision and condominium businesses. 25 Its provisions were
intended to encompass all questions regarding subdivisions and
condominiums. 26 The decree aimed to provide for an appropriate
government agency, the HLURB, to which aggrieved parties in
transactions involving subdivisions and condominiums may take
recourse. 27
II
An easement for water facility exists on Lot 11, Block 5
of Happy Glen Loop Subdivision
Easements or servitudes are encumbrances imposed upon an
immovable for the benefit of another immovable belonging to a
different owner, 28 for the benefit of a community, 29or for the
benefit of one or more persons to whom the encumbered estate
does not belong. 30
The law provides that easements may be continuous or
discontinuous and apparent or non-apparent. The pertinent
provisions of the Civil Code are quoted below: IHCacT
Art. 615. Easements may be continuous or discontinuous,
apparent or non-apparent.
Continuous easements are those the use of which is or may be
incessant, without the intervention of any act of man.
Discontinuous easements are those which are used at intervals
and depend upon the acts of man.
Apparent easements are those which are made known and are
continually kept in view by external signs that reveal the use and
enjoyment of the same.
Non-apparent easements are those which show no external
indication of their existence.
In this case, the water facility is an encumbrance on Lot 11, Block
5 of the Subdivision for the benefit of the community. It is
continuous and apparent, because it is used incessantly without
human intervention, and because it is continually kept in view by
the overhead water tank, which reveals its use to the public.
Contrary to petitioner's contention that the existence of the water
tank on Lot 11, Block 5 is merely tolerated, we find that the
easement of water facility has been voluntarily established either
by Marcelo, the Subdivision owner and developer; or by F.G.R.
Sales, his predecessor-in-interest and the original developer of the
Subdivision. For more than 30 years, the facility was continuously
used as the residents' sole source of water. 31 The Civil
Code provides that continuous and apparent easements are
acquired either by virtue of a title or by prescription of 10
years. 32 It is therefore clear that an easement of water facility has
already been acquired through prescription. CcTHaD
III
Lot 11, Block 5 of Happy Glen Loop Subdivision forms part
of its open space
The term "open space" is defined in P.D. 1216 as "an area
reserved exclusively for parks, playgrounds, recreational uses,
schools, roads, places of worship, hospitals, health
centers, barangay centers and other similar facilities and
amenities. 33
The decree makes no specific mention of areas reserved for water
facilities. Therefore, we resort to statutory construction to
determine whether these areas fall under "other similar facilities
and amenities."
The basic statutory construction principle of ejusdem
generis states that where a general word or phrase follows an
enumeration of particular and specific words of the same class,
the general word or phrase is to be construed to include or to
be restricted to things akin to or resembling, or of the same kind
or class as, those specifically mentioned. 34
Applying this principle to the afore-quoted Section 1 of P.D. 1216,
we find that the enumeration refers to areas reserved for the
common welfare of the community. Thus, the phrase "other similar
facilities and amenities" should be interpreted in like manner.
Here, the water facility was undoubtedly established for the benefit
of the community. Water is a basic need in human
settlements, 35 without which the community would not survive.
We therefore rule that, based on the principle of ejusdem
generis and taking into consideration the intention of the law to
create and maintain a healthy environment in human
settlements, 36 the location of the water facility in the Subdivision
must form part of the area reserved for open space.
IV
The subject parcel of land is beyond the commerce of man
and its sale is prohibited under the law
The law expressly provides that open spaces in subdivisions are
reserved for public use and are beyond the commerce of
man. 37 As such, these open spaces are not susceptible of private
ownership and appropriation. We therefore rule that the sale of the
subject parcel of land by the subdivision owner or developer to
petitioner's late husband was contrary to law. Hence, we find no
reversible error in the appellate court's Decision upholding the
HLURB Arbiter's annulment of the Deed of Sale.
Petitioner attempts to argue in favor of the validity of the sale of
the subject parcel of land by invoking the principle of indefeasibility
of title and by arguing that this action constitutes a collateral attack
against her title, an act proscribed by the Property Registration
Decree.
Petitioner is mistaken on both counts.
First, the rule that a collateral attack against a Torrens title is
prohibited by law 38 finds no application to this case.
There is an attack on the title when the object of an action is to
nullify a Torrens title, thus challenging the judgment or proceeding
pursuant to which the title was decreed. 39 In the present case,
this action is not an attack against the validity of the Torrens title,
because it does not question the judgment or proceeding that led
to the issuance of the title. Rather, this action questions the validity
of the transfer of land from Marcelo to petitioner's husband. As
there is no attack direct or collateral against the title,
petitioner's argument holds no water.
Second, the principle of indefeasibility of title is not absolute, and
there are well-defined exceptions to this rule. 40 In Aqualab
Philippines, Inc. v. Heirs of Pagobo, 41 we ruled that this defense
does not extend to a transferee who takes the title with knowledge
of a defect in that of the transferee's predecessor-in-interest.
In this case, Spouses Liwag were aware of the existence of the
easement of water facility when Marcelo sold Lot 11, Block 5 to
them. Hermogenes even executed an Affidavit dated 10 August
1982 attesting to the sufficiency of the water supply coming from
an electrically operated water pump in the Subdivision. 42 It is
undisputed that the water facility in question was their only water
source during that time. As residents of the Subdivision, they had
even benefited for almost 30 years from its existence. Therefore,
petitioner cannot be shielded by the principle of indefeasibility and
conclusiveness of title, as she was not an innocent purchaser in
good faith and for value.
From the discussion above, we therefore conclude that the
appellate court committed no reversible error in the assailed
Decision and accordingly affirm it in toto.
WHEREFORE, premises considered, the instant Petition for
Review is DENIED, and the assailed Decision and Resolution of
the Court of Appeals in CA-G.R. SP No. 100454 are
hereby AFFIRMED. cASTED
SO ORDERED.
||| (Liwag v. Happy Glen Loop Homeowners Association, Inc., G.R.
No. 189755, [July 4, 2012], 690 PHIL 321-335)
QUINTOS v. NICOLAS
THIRD DIVISION
[G.R. No. 210252. June 16, 2014.]
VILMA QUINTOS, represented by her Attorney-in-Fact FIDEL
I. QUINTOS, JR.; FLORENCIA I. DANCEL, represented by her
Attorney-in-Fact FLOVY I. DANCEL; and CATALINO L.
IBARRA, petitioners, vs. PELAGIA I. NICOLAS, NOLI L.
IBARRA, SANTIAGO L. IBARRA, PEDRO L. IBARRA, DAVID L.
IBARRA, GILBERTO L. IBARRA, HEIRS OF AUGUSTO L.
IBARRA, namely CONCHITA R. IBARRA, APOLONIO IBARRA,
and NARCISO IBARRA, and the spouses RECTO
CANDELARIO and ROSEMARIE CANDELARIO, respondents.
DECISION
VELASCO, JR., J p:
The Case
Before the Court is a Petition for Review on Certiorari filed under
Rule 45 challenging the Decision 1 and Resolution 2 of the Court
of Appeals (CA) in CA-G.R. CV No. 98919 dated July 8, 2013 and
November 22, 2013, respectively. The challenged rulings affirmed
the May 7, 2012 Decision 3 of the Regional Trial Court (RTC),
Branch 68 in Camiling, Tarlac that petitioners and respondents are
co-owners of the subject property, which should be partitioned as
per the subdivision plan submitted by respondent spouses Recto
and Rosemarie Candelario.
The Facts
As culled from the records, the facts of the case are as follows:
Petitioners Vilma Quintos, Florencia Dancel, and Catalino Ibarra,
and respondents Pelagia Nicolas, Noli Ibarra, Santiago Ibarra,
Pedro Ibarra, David Ibarra, Gilberto Ibarra, and the late Augusto
Ibarra are siblings. Their parents, Bienvenido and Escolastica
Ibarra, were the owners of the subject property, a 281 sq.m. parcel
of land situated along Quezon Ave., Poblacion C, Camiling, Tarlac,
covered by Transfer Certificate Title (TCT) No. 318717.
By 1999, both Bienvenido and Escolastica had already passed
away, leaving to their ten (10) children ownership over the subject
property. Subsequently, sometime in 2002, respondent siblings
brought an action for partition against petitioners. The case was
docketed as Civil Case No. 02-52 and was raffled to the RTC,
Branch 68, Camiling, Tarlac. However, in an Order 4 dated March
22, 2004, the trial court dismissed the case disposing as follows:
For failure of the parties, as well as their counsels, to appear
despite due notice, this case is hereby DISMISSED.
SO ORDERED.
As neither set of parties appealed, the ruling of the trial court
became final, as evidenced by a Certificate of Finality 5 it
eventually issued on August 22, 2008.
Having failed to secure a favorable decision for partition,
respondent siblings instead resorted to executing a Deed of
Adjudication 6 on September 21, 2004 to transfer the property in
favor of the ten (10) siblings. As a result, TCT No. 318717 was
canceled and in lieu thereof, TCT No. 390484 was issued in its
place by the Registry of Deeds of Tarlac in the names of the ten
(10) heirs of the Ibarra spouses. ScCDET
Subsequently, respondent siblings sold their 7/10 undivided share
over the property in favor of their co-respondents, the spouses
Recto and Rosemarie Candelario. By virtue of a Deed of Absolute
Sale 7 dated April 17, 2007 executed in favor of the spouses
Candelario and an Agreement of Subdivision 8 purportedly
executed by them and petitioners, TCT No. 390484 was partially
canceled and TCT No. 434304 was issued in the name of the
Candelarios, covering the 7/10 portion.
On June 1, 2009, petitioners filed a complaint for Quieting of Title
and Damages against respondents wherein they alleged that
during their parents' lifetime, the couple distributed their real and
personal properties in favor of their ten (10) children. Upon
distribution, petitioners alleged that they received the subject
property and the house constructed thereon as their share. They
likewise averred that they have been in adverse, open, continuous,
and uninterrupted possession of the property for over four (4)
decades and are, thus, entitled to equitable title thereto. They also
deny any participation in the execution of the aforementioned
Deed of Adjudication dated September 21, 2004 and the
Agreement of Subdivision.
Respondents countered that petitioners' cause of action was
already barred by estoppel when sometime in 2006, one of
petitioners offered to buy the 7/10 undivided share of the
respondent siblings. They point out that this is an admission on the
part of petitioners that the property is not entirely theirs. In addition,
they claimed that Bienvenido and Escolastica Ibarra mortgaged
the property but because of financial constraints, respondent
spouses Candelario had to redeem the property in their behalf. Not
having been repaid by Bienvenido and Escolastica, the
Candelarios accepted from their co-respondents their share in the
subject property as payment. Lastly, respondents sought, by way
of counterclaim, the partition of the property.
Docketed as Civil Case No. 09-15 of the RTC of Camiling, Tarlac,
the quieting of title case was eventually raffled to Branch 68 of the
court, the same trial court that dismissed Civil Case No. 02-52.
During pre-trial, respondents, or defendants a quo, admitted
having filed an action for partition, that petitioners did not
participate in the Deed of Adjudication that served as the basis for
the issuance of TCT No. 390484, and that the Agreement of
Subdivision that led to the issuance of TCT No. 434304 in favor of
respondent spouses Candelario was falsified. 9
Despite the admissions of respondents, however, the RTC,
through its May 27, 2012 Decision, dismissed petitioners'
complaint. The court did not find merit in petitioners' asseverations
that they have acquired title over the property through acquisitive
prescription and noted that there was no document evidencing that
their parents bequeathed to them the subject property. Finding that
respondent siblings were entitled to their respective shares in the
property as descendants of Bienvenido and Escolastica Ibarra and
as co-heirs of petitioners, the subsequent transfer of their interest
in favor of respondent spouses Candelario was then upheld by the
trial court. The dispositive portion of the Decision reads:
WHEREFORE, premises considered, the above-entitled case is
hereby Dismissed.
Also, defendants-spouses Rosemarie Candelario and Recto
Candelario are hereby declared as the absolute owners of the 7/10
portion of the subject lot.
Likewise, the court hereby orders the partition of the subject lots
between the herein plaintiffs and the defendants-spouses
Candelarios.
SO ORDERED. THaCAI
Aggrieved, petitioners appealed the trial court's Decision to the
CA, pleading the same allegations they averred in their underlying
complaint for quieting of title. However, they added that the
partition should no longer be allowed since it is already barred
by res judicata, respondent siblings having already filed a case for
partition that was dismissed with finality, as admitted by
respondents themselves during pre-trial.
On July 8, 2013, the CA issued the assailed Decision denying the
appeal. The fallo reads:
WHEREFORE, premises considered, the Decision dated May 7,
2012 of the Regional Trial Court of Camiling, Tarlac, Branch 68, in
Civil Case No. 09-15, is hereby AFFIRMED.
SO ORDERED.
Similar to the trial court, the court a quo found no evidence on
record to support petitioners' claim that the subject property was
specifically bequeathed by Bienvenido and Escolastica Ibarra in
their favor as their share in their parents' estate. It also did not
consider petitioners' possession of the property as one that is in
the concept of an owner. Ultimately, the appellate court upheld the
finding that petitioners and respondent spouses Candelario co-
own the property, 30-70 in favor of the respondent spouses.
As regards the issue of partition, the CA added:
. . . Since it was conceded that the subject lot is now co-owned by
the plaintiffs-appellants, (with 3/10 undivided interest) and
defendants-appellees Spouses Candelarios (with 7/10 undivided
interest) and considering that plaintiffs-appellants had already
constructed a 3-storey building at the back portion of the property,
then partition, in accordance with the subdivision plan (records, p.
378) undertaken by defendants-appellants [sic] spouses, is in
order. 10
On November 22, 2013, petitioners' Motion for Reconsideration
was denied. Hence, the instant petition.
Issues
In the present petition, the following errors were raised:
I. THE COURT OF APPEALS MANIFESTLY OVERLOOKED
RELEVANT AND UNDISPUTED FACTS WHICH, IF PROPERLY
CONSIDERED, WOULD JUSTIFY PETITIONERS' CLAIM OF
EQUITABLE TITLE.
II. THE COURT OF APPEALS ERRED WHEN IT AFFIRMED THE
ORDER OF PARTITION DESPITE THE FACT THAT THE
COUNTERCLAIM FOR PARTITION, BASED ON THE DEED OF
ABSOLUTE SALE EXECUTED IN 2007, IS BARRED BY
LACHES.
III. THE COURT OF APPEALS RENDERED A SUBSTANTIALLY
FLAWED JUDGMENT WHEN IT NEGLECTED TO RULE ON
PETITIONERS' CONTENTION THAT THE COUNTERCLAIM
FOR PARTITION IS ALSO BARRED BY PRIOR JUDGMENT,
DESPITE ITS HAVING BEEN SPECIFICALLY ASSIGNED AS
ERROR AND PROPERLY ARGUED IN THEIR BRIEF, AND
WHICH, IF PROPERLY CONSIDERED, WOULD JUSTIFY THE
DISMISSAL OF THE COUNTERCLAIM.
IV. THE COURT OF APPEALS ERRED WHEN IT ORDERED
PARTITION IN ACCORDANCE WITH THE SUBDIVISION PLAN
MENTIONED IN ITS DECISION, IN CONTRAVENTION OF THE
PROCEDURE ESTABLISHED IN RULE 69 OF THE RULES OF
CIVIL PROCEDURE. 11
To simplify, the pertinent issues in this case are as
follows: ISCTcH
1. Whether or not the petitioners were able to prove ownership
over the property;
2. Whether or not the respondents' counterclaim for partition is
already barred by laches or res judicata; and
3. Whether or not the CA was correct in approving the subdivision
agreement as basis for the partition of the property.
The Court's Ruling
The petition is meritorious in part.
Petitioners were not able to prove equitable
title or ownership over the property
Quieting of title is a common law remedy for the removal of any
cloud, doubt, or uncertainty affecting title to real property. 12 For
an action to quiet title to prosper, two indispensable requisites
must concur, namely: (1) the plaintiff or complainant has a legal or
equitable title to or interest in the real property subject of the action;
and (2) the deed, claim, encumbrance, or proceeding claimed to
be casting cloud on the title must be shown to be in fact invalid or
inoperative despite its prima facie appearance of validity or
efficacy. 13 In the case at bar, the CA correctly observed that
petitioners' cause of action must necessarily fail mainly in view of
the absence of the first requisite.
At the outset, it must be emphasized that the determination of
whether or not petitioners sufficiently proved their claim of
ownership or equitable title is substantially a factual issue that is
generally improper for Us to delve into. Section 1, Rule 45 of the
Rules of Court explicitly states that the petition for review
on certiorari "shall raise only questions of law, which must be
distinctly set forth." In appeals by certiorari, therefore, only
questions of law may be raised, because this Court is not a trier of
facts and does not normally undertake the re-examination of the
evidence presented by the contending parties during the
trial. 14 Although there are exceptions 15 to this general rule as
eloquently enunciated in jurisprudence, none of the circumstances
calling for their application obtains in the case at bar. Thus, We are
constrained to respect and uphold the findings of fact arrived at by
both the RTC and the CA.
In any event, a perusal of the records would readily show that
petitioners, as aptly observed by the courts below, indeed, failed
to substantiate their claim. Their alleged open, continuous,
exclusive, and uninterrupted possession of the subject property is
belied by the fact that respondent siblings, in 2005, entered into a
Contract of Lease with the Avico Lending Investor Co. over the
subject lot without any objection from the
petitioners. 16 Petitioners' inability to offer evidence tending to
prove that Bienvenido and Escolastica Ibarra transferred the
ownership over the property in favor of petitioners is likewise fatal
to the latter's claim. On the contrary, on May 28, 1998, Escolastica
Ibarra executed a Deed of Sale covering half of the subject
property in favor of all her 10 children, not in favor of petitioners
alone. 17
The cardinal rule is that bare allegation of title does not suffice.
The burden of proof is on the plaintiff to establish his or her case
by preponderance of evidence. 18 Regrettably, petitioners, as
such plaintiff, in this case failed to discharge the said burden
imposed upon them in proving legal or equitable title over the
parcel of land in issue. As such, there is no reason to disturb the
finding of the RTC that all 10 siblings inherited the subject property
from Bienvenido and Escolastica Ibarra, and after the respondent
siblings sold their aliquot share to the spouses Candelario,
petitioners and respondent spouses became co-owners of the
same.
The counterclaim for partition is not barred by prior judgment
This brings us to the issue of partition as raised by respondents in
their counterclaim. In their answer to the counterclaim, petitioners
countered that the action for partition has already been barred
by res judicata.
The doctrine of res judicata provides that the judgment in a first
case is final as to the claim or demand in controversy, between the
parties and those privy with them, not only as to every matter which
was offered and received to sustain or defeat the claim or demand,
but as to any other admissible matter which must have been
offered for that purpose and all matters that could have been
adjudged in that case. 19 It precludes parties from relitigating
issues actually litigated and determined by a prior and final
judgment. 20 As held in Yusingco v. Ong Hing Lian: 21
It is a rule pervading every well-regulated system of jurisprudence,
and is put upon two grounds embodied in various maxims of the
common law; the one, public policy and necessity, which makes it
to the interest of the state that there should be an end to litigation
republicae ut sit, finis litium; the other, the hardship on the
individual that he should be vexed twice for the same cause
nemo debet bis vexari et eadem causa. A contrary doctrine
would subject the public peace and quiet to the will and neglect of
individuals and prefer the gratitude identification of a litigious
disposition on the part of suitors to the preservation of the public
tranquility and happiness. 22 AICDSa
The rationale for this principle is that a party should not be vexed
twice concerning the same cause. Indeed, res judicata is a
fundamental concept in the organization of every jural society, for
not only does it ward off endless litigation, it ensures the stability
of judgment and guards against inconsistent decisions on the
same set of facts. 23
There is res judicata when the following requisites are present: (1)
the formal judgment or order must be final; (2) it must be a
judgment or order on the merits, that is, it was rendered after a
consideration of the evidence or stipulations submitted by the
parties at the trial of the case; (3) it must have been rendered by a
court having jurisdiction over the subject matter and the parties;
and (4) there must be, between the first and second actions,
identity of parties, of subject matter and of cause of action. 24
In the case at bar, respondent siblings admit that they filed an
action for partition docketed as Civil Case No. 02-52, which the
RTC dismissed through an Order dated March 22, 2004 for the
failure of the parties to attend the scheduled hearings.
Respondents likewise admitted that since they no longer appealed
the dismissal, the ruling attained finality. Moreover, it cannot be
disputed that the subject property in Civil Case No. 02-52 and in
the present controversy are one and the same, and that in both
cases, respondents raise the same action for partition. And lastly,
although respondent spouses Candelario were not party-litigants
in the earlier case for partition, there is identity of parties not only
when the parties in the case are the same, but also between those
in privity with them, such as between their successors-in-
interest. 25
With all the other elements present, what is left to be determined
now is whether or not the dismissal of Civil case No. 02-52
operated as a dismissal on the merits that would complete the
requirements of res judicata.
In advancing their claim, petitioners cite Rule 17, Sec. 3 of
the Rules of Court,to wit:
Section 3. Dismissal due to fault of plaintiff. If, for no justifiable
cause, the plaintiff fails to appear on the date of the presentation
of his evidence in chief on the complaint, or to prosecute his action
for an unreasonable length of time, or to comply with these Rules
or any order of the court, the complaint may be dismissed upon
motion of the defendant or upon the court's own motion, without
prejudice to the right of the defendant to prosecute his
counterclaim in the same or in a separate action. This dismissal
shall have the effect of an adjudication upon the merits,
unless otherwise declared by the court.
The afore-quoted provision enumerates the instances when a
complaint may be dismissed due to the plaintiff's fault: (1) if he fails
to appear on the date for the presentation of his evidence in chief
on the complaint; (2) if he fails to prosecute his action for an
unreasonable length of time; or (3) if he fails to comply with the
Rules or any order of the court. The dismissal of a case for failure
to prosecute has the effect of adjudication on the merits, and is
necessarily understood to be with prejudice to the filing of another
action, unless otherwise provided in the order of dismissal. Stated
differently, the general rule is that dismissal of a case for failure to
prosecute is to be regarded as an adjudication on the merits and
with prejudice to the filing of another action, and the only exception
is when the order of dismissal expressly contains a qualification
that the dismissal is without prejudice. 26 In the case at bar,
petitioners claim that the Order does not in any language say that
the dismissal is without prejudice and, thus, the requirement that
the dismissal be on the merits is present.
Truly, We have had the occasion to rule that dismissal with
prejudice under the above-cited rule amply satisfies one of the
elements of res judicata. 27 It is, thus, understandable why
petitioners would allege res judicata to bolster their claim.
However, dismissal with prejudice under Rule 17, Sec. 3 of
the Rules of Court cannot defeat the right of a co-owner to ask for
partition at any time, provided that there is no actual adjudication
of ownership of shares yet.
Pertinent hereto is Article 494 of the Civil Code,which reads:
Article 494. No co-owner shall be obliged to remain in the co-
ownership. Each co-owner may demand at any time the
partition of the thing owned in common, insofar as his share
is concerned.
Nevertheless, an agreement to keep the thing undivided for a
certain period of time, not exceeding ten years, shall be valid. This
term may be extended by a new agreement. EaICAD
A donor or testator may prohibit partition for a period which shall
not exceed twenty years.
Neither shall there be any partition when it is prohibited by law.
No prescription shall run in favor of a co-owner or co-heir against
his co-owners or co-heirs so long as he expressly or impliedly
recognizes the co-ownership. (emphasis supplied)
From the above-quoted provision, it can be gleaned that the law
generally does not favor the retention of co-ownership as a
property relation, and is interested instead in ascertaining the co-
owners' specific shares so as to prevent the allocation of portions
to remain perpetually in limbo. Thus, the law provides that each
co-owner may demand at any time the partition of the thing
owned in common.
Between dismissal with prejudice under Rule 17, Sec. 3 and the
right granted to co-owners under Art. 494 of the Civil Code,the
latter must prevail. To construe otherwise would diminish the
substantive right of a co-owner through the promulgation of
procedural rules. Such a construction is not sanctioned by the
principle, which is too well settled to require citation, that a
substantive law cannot be amended by a procedural rule. 28 This
further finds support in Art. 496 of the New Civil Code, viz.:
Article 496. Partition may be made by agreement between the
parties or by judicial proceedings. Partition shall be governed by
the Rules of Court insofar as they are consistent with this
Code.
Thus, for the Rules to be consistent with statutory provisions, We
hold that Art. 494, as cited, is an exception to Rule 17, Sec. 3 of
the Rules of Court to the effect that even if the order of dismissal
for failure to prosecute is silent on whether or not it is with
prejudice, it shall be deemed to be without prejudice.
This is not to say, however, that the action for partition will never
be barred by res judicata. There can still be res judicata in partition
cases concerning the same parties and the same subject matter
once the respective shares of the co-owners have been
determined with finality by a competent court with jurisdiction or if
the court determines that partition is improper for co-ownership
does not or no longer exists.
So it was that in Rizal v. Naredo, 29 We ruled in the following wise:
Article 484 of the New Civil Code provides that there is co-
ownership whenever the ownership of an undivided thing or right
belongs to different persons. Thus, on the one hand, a co-owner
of an undivided parcel of land is an owner of the whole, and over
the whole he exercises the right of dominion, but he is at the same
time the owner of a portion which is truly abstract. On the other
hand, there is no co-ownership when the different portions
owned by different people are already concretely determined
and separately identifiable, even if not yet technically
described.
Pursuant to Article 494 of the Civil Code,no co-owner is obliged to
remain in the co-ownership, and his proper remedy is an action for
partition under Rule 69 of the Rules of Court,which he may bring
at anytime in so far as his share is concerned. Article 1079 of
the Civil Code defines partition as the separation, division and
assignment of a thing held in common among those to whom it
may belong. It has been held that the fact that the agreement of
partition lacks the technical description of the parties' respective
portions or that the subject property was then still embraced by the
same certificate of title could not legally prevent a partition, where
the different portions allotted to each were determined and
became separately identifiable.
The partition of Lot No. 252 was the result of the approved
Compromise Agreement in Civil Case No. 36-C, which was
immediately final and executory. Absent any showing that said
Compromise Agreement was vitiated by fraud, mistake or duress,
the court cannot set aside a judgment based on compromise. It is
axiomatic that a compromise agreement once approved by the
court settles the rights of the parties and has the force of res
judicata. It cannot be disturbed except on the ground of vice of
consent or forgery.
Of equal significance is the fact that the compromise judgment in
Civil Case No. 36-C settled as well the question of which specific
portions of Lot No. 252 accrued to the parties separately as their
proportionate shares therein. Through their subdivision survey
plan, marked as Annex "A" of the Compromise Agreement and
made an integral part thereof, the parties segregated and
separately assigned to themselves distinct portions of Lot No. 252.
The partition was immediately executory, having been
accomplished and completed on December 1, 1971 when
judgment was rendered approving the same. The CA was correct
when it stated that no co-ownership exist when the different
portions owned by different people are already concretely
determined and separately identifiable, even if not yet
technically described. (emphasis supplied)
In the quoted case, We have held that res judicata applied
because after the parties executed a compromise agreement that
was duly approved by the court, the different portions of the
owners have already been ascertained. Thus, there was no longer
a co-ownership and there was nothing left to partition. This is in
contrast with the case at bar wherein the co-ownership, as
determined by the trial court, is still subsisting 30-70 in favor of
respondent spouses Candelario. Consequently, there is no legal
bar preventing herein respondents from praying for the partition of
the property through counterclaim. DSAEIT
The counterclaim for partition is not barred by laches
We now proceed to petitioners' second line of attack. According to
petitioners, the claim for partition is already barred by laches since
by 1999, both Bienvenido and Escolastica Ibarra had already died
and yet the respondent siblings only belatedly filed the action for
partition, Civil Case No. 02-52, in 2002. And since laches has
allegedly already set in against respondent siblings, so too should
respondent spouses Candelario be barred from claiming the same
for they could not have acquired a better right than their
predecessors-in-interest.
The argument fails to persuade.
Laches is the failure or neglect, for an unreasonable and
unexplained length of time, to do that which by the exercise of
due diligence could or should have been done earlier. It is the
negligence or omission to assert a right within a reasonable period,
warranting the presumption that the party entitled to assert it has
either abandoned or declined to assert it. 30 The principle is a
creation of equity which, as such, is applied not really to penalize
neglect or sleeping upon one's right, but rather to avoid
recognizing a right when to do so would result in a clearly
inequitable situation. As an equitable defense, laches does not
concern itself with the character of the petitioners' title, but only
with whether or not by reason of the respondents' long inaction or
inexcusable neglect, they should be barred from asserting this
claim at all, because to allow them to do so would be inequitable
and unjust to petitioners. 31
As correctly appreciated by the lower courts, respondents cannot
be said to have neglected to assert their right over the subject
property. They cannot be considered to have abandoned their right
given that they filed an action for partition sometime in 2002, even
though it was later dismissed. Furthermore, the fact that
respondent siblings entered into a Contract of Lease with Avico
Lending Investor Co. over the subject property is evidence that
they are exercising rights of ownership over the same.
The CA erred in approving the Agreement for Subdivision
There is merit, however, in petitioners' contention that the CA erred
in approving the proposal for partition submitted by respondent
spouses. Art. 496, as earlier cited, provides that partition shall
either be by agreement of the parties or in accordance with
the Rules of Court. In this case, the Agreement of Subdivision
allegedly executed by respondent spouses Candelario and
petitioners cannot serve as basis for partition, for, as stated in the
pre-trial order, herein respondents admitted that the agreement
was a falsity and that petitioners never took part in preparing the
same. The "agreement" was crafted without any consultation
whatsoever or any attempt to arrive at mutually acceptable terms
with petitioners. It, therefore, lacked the essential requisite of
consent. Thus, to approve the agreement in spite of this fact would
be tantamount to allowing respondent spouses to divide
unilaterally the property among the co-owners based on their own
whims and caprices. Such a result could not be countenanced.
To rectify this with dispatch, the case must be remanded to the
court of origin, which shall proceed to partition the property in
accordance with the procedure outlined in Rule 69 of the Rules of
Court.
WHEREFORE, premises considered, the petition is
hereby PARTLY GRANTED. The assailed Decision and
Resolution of the Court of Appeals in CA-G.R. CV No. 98919 dated
July 8, 2013 and November 22, 2013, respectively, are
hereby AFFIRMED with MODIFICATION. The case is
hereby REMANDED to the RTC, Branch 68 in Camiling, Tarlac for
purposes of partitioning the subject property in accordance with
Rule 69 of the Rules of Court.
SO ORDERED.
||| (Quintos v. Nicolas, G.R. No. 210252, [June 16, 2014], 736
PHIL 438-460)
VDA DE FIGURACION v. FIGURACION-GERILLA
FIRST DIVISION
[G.R. No. 151334. February 13, 2013.]
CAROLINA (CARLINA) VDA. DE FIGURACION, HEIRS OF
ELENA FIGURACION-ANCHETA, namely: LEONCIO
ANCHETA, JR., and ROMULO ANCHETA, HEIRS OF HILARIA
A. FIGURACION, namely: FELIPA FIGURACION-MANUEL,
MARY FIGURACION-GINEZ, and EMILIA FIGURACION-
GERILLA, AND HEIRS OF QUINTIN FIGURACION, namely:
LINDA M. FIGURACION, LEANDRO M. FIGURACION, II, and
ALLAN M. FIGURACION, petitioners, vs.
EMILIA FIGURACION-GERILLA,respondent.
DECISION
REYES, J p:
At bar is a Petition for Review on Certiorari 1 under Rule 45 of the
Rules of Court, assailing the Decision 2 dated December 11, 2001
of the Court of Appeals (CA) in CA-G.R. CV No. 58290, which
reversed and set aside the Decision 3 dated June 26, 1997 of the
Regional Trial Court (RTC) of Urdaneta, Pangasinan, Branch 49.
The RTC decision (1) dismissed respondent Emilia Figuracion-
Gerilla's (Emilia) complaint for partition, annulment of documents,
reconveyance, quieting of title and damages, and (2) annulled
the Affidavit of Self-Adjudication executed by petitioner Carolina
(Carlina) Vda. De Figuracion (Carolina).
The Facts
The parties are the heirs of Leandro Figuracion (Leandro) who
died intestate in May 1958. Petitioner Carolina is the surviving
spouse. The other petitioners Elena Figuracion-Ancheta,
Hilaria A. Figuracion (Hilaria), Felipa Figuracion-Manuel (Felipa),
Quintin Figuracion, and Mary Figuracion-Ginez and respondent
Emilia were Carolina and Leandro's children. 4
Subject of the dispute are two parcels of land both situated in
Urdaneta, Pangasinan, which were acquired by Leandro during his
lifetime. These properties were: (1) Lot No. 2299 with a land area
of 7,547 square meters originally covered by Transfer Certificate
of Title (TCT) No. 4221-P; 5 and (2) Lot No. 705 measuring 2,900
square meters and covered by TCT No. 4220-P. Both lands were
registered in the name of "Leandro Figuracion married to Carolina
Adviento". Leandro executed a Deed of Quitclaim over the above
real properties in favor of his six (6) children on August 23, 1955.
Their shares, however, were not delineated with particularity
because spouses Leandro and Carolina reserved the lots and its
fruits for their expenses. ISTECA
Also involved in the controversy is Lot No. 707 of the Cadastral
Survey of Urdaneta, Pangasinan, with an area of 3,164 square
meters originally owned by Eulalio Adviento (Eulalio), covered by
Original Certificate of Title (OCT) No. 15867 issued in his name on
August 21, 1917. Eulalio begot Agripina Adviento (Agripina) with
his first wife Marcela Estioko (Marcela), whom Eulalio survived.
When he remarried, Eulalio had another daughter, herein
petitioner Carolina, with his second wife, Faustina Escabesa
(Faustina). 6
On November 28, 1961, Agripina 7 executed a Deed of
Quitclaim 8 over the eastern half of Lot No. 707 in favor of her
niece, herein respondent Emilia.
Soon thereafter or on December 11, 1962, petitioner Carolina
executed an Affidavit of Self-Adjudication 9 adjudicating unto
herself the entire Lot No. 707 as the sole and exclusive heir of her
deceased parents, Eulalio and Faustina. 10 On the same date,
Carolina also executed a Deed of Absolute Sale 11 over Lot No.
707 in favor of petitioners Hilaria and Felipa, who in turn
immediately caused the cancellation of OCT No. 15867 and the
issuance of TCT No. 42244 in their names. 12
In 1971, Emilia and her family went to the United States and
returned to the Philippines only in 1981. Upon her return and
relying on the Deed of Quitclaim, she built a house on the eastern
half of Lot No. 707. 13
The legal debacle of the Figuracions started in 1994 when Hilaria
and her agents threatened to demolish the house of Emilia who,
in retaliation, was prompted to seek the partition of Lot No. 707 as
well as Lot Nos. 2299 and 705. The matter was initially brought
before the Katarungang Pambarangay, but no amicable
settlement was reached by the parties. 14On May 23, 1994,
respondent Emilia instituted the herein Complaint 15 for the
partition of Lot Nos. 2299, 705 and 707, annulment of the Affidavit
of Self-Adjudication, Deed of Absolute Sale and TCT No. 42244,
reconveyance of eastern half portion of Lot No. 707, quieting of
title and damages.
In opposition, the petitioners averred the following special and
affirmative defenses: (1) the respondent's cause of action had long
prescribed and that she is guilty of laches hence, now estopped
from bringing the suit; (2) TCT No. 42244 in the name of Felipa
and Hilaria have already attained indefeasibility and
conclusiveness as to the true owners of Lot No. 707; and (3) an
action for partition is no longer tenable because Felipa and Hilaria
have already acquired rights adverse to that claimed by
respondent Emilia and the same amount to a repudiation of the
alleged co-ownership. 16 STcaDI
During pre-trial conference, the issues were simplified into: (1)
whether or not Lot Nos. 2299 and 705 are the exclusive properties
of Leandro; and (2) whether or not respondent Emilia is the owner
of the eastern half of Lot No. 707. 17
On the basis of the evidence adduced by the parties, the RTC
rendered its Decision dated June 26, 1997 disposing as follows:
WHEREFORE, premises considered, the complaint for partition,
reconveyance, quieting of title and damages is hereby ordered
dismissed whereas the affidavit of self-adjudication[,] deed of sale
and the transfer certificate of title involving Lot 707 are hereby
declared null and void.
No costs.
SO ORDERED. 18
The RTC ruled that a partition of Lot Nos. 2299 and 705 will be
premature since their ownership is yet to be transmitted from
Leandro to his heirs whose respective shares thereto must still be
determined in estate settlement proceedings. Anent Lot No. 707,
the RTC held that petitioner Carolina transferred only her one-half
(1/2) share to Felipa and Hilaria and any conveyance of the other
half pertaining to Agripina was void. While the RTC nullified
the Affidavit of Self-Adjudication, Deed of Absolute Sale and TCT
No. 42244, it refused to adjudicate the ownership of the lot's
eastern half portion in favor of respondent Emilia since a
settlement of the estate of Eulalio is yet to be undertaken. 19
Respondent Emilia appealed to the CA, which, in its Decision
dated December 11, 2001, ruled that the RTC erred in refusing to
partition Lot No. 707. The CA explained that there is no necessity
for placing Lot No. 707 under judicial administration since Carolina
had long sold her 1/2 pro indiviso share to Felipa and Hilaria.
Thus, when Carolina sold the entire Lot No. 707 on December 11,
1962 as her own, the sale affected only her share and not that
belonging to her co-owner, Agripina. The proper action in such
case is not the nullification of the sale, or for the recovery of
possession of the property owned in common from the third
person, but for a division or partition of the entire lot. Such partition
should result in segregating the portion belonging to the seller and
its delivery to the buyer.
The CA, however, agreed with the RTC that a partition of Lot Nos.
2299 and 705 is indeed premature considering that there is a
pending legal controversy with respect to Lot No. 705 and the
accounting of the income from Lot No. 2299 and of the expenses
for the last illness and burial of Leandro and Carolina, for which
the lots appear to have been intended.
Accordingly, the decretal portion of the CA decision
reads: STcHDC
WHEREFORE, premises considered, the present appeal is hereby
GRANTED and the decision appealed from in Civil Case No. U-
5826 is hereby VACATED and SET ASIDE. A new judgment is
hereby rendered declaring Lot No. 707 covered by TCT No. 42244
to be owned by appellant Emilia Figuracion-Gerilla [herein
respondent], 1/2 pro indiviso share, appellee
Felipa Figuracion [herein petitioner], 1/4 pro indiviso share, and
appellee Hilaria Figuracion [herein petitioner], 1/4 pro
indiviso share, who are hereby directed to partition the same and
if they could not agree on a partition, they may petition the trial
court for the appointment of a commissioner to prepare a project
of partition, in accordance with the procedure as provided in Rule
69 of the 1997 Rules of Civil Procedure, as amended.
No pronouncement as to costs.
SO ORDERED. 20
Respondent Emilia appealed the CA's decision to the Court,
docketed as G.R. No. 154322. In a Decision promulgated on
August 22, 2006, the Court denied the appeal, concurring with the
CA's ruling that a partition of Lot Nos. 2299 and 705 would be
inappropriate considering that: (1) the ownership of Lot No. 705 is
still in dispute; and (2) there are still unresolved issues as to the
expenses chargeable to the estate of Leandro.
The present petition involves the appeal of the petitioners who
attribute this sole error committed by the CA:
THE DECISION RENDERED BY THE HONORABLE COURT OF
APPEALS IS CONTRARY TO LAW AND EXISTING
JURISPRUDENTIAL DICTA LAID DOWN BY THE HONORABLE
SUPREME COURT. 21
In view of the Court's ruling in G.R. No. 154322, the ensuing
discussion shall concern only Lot No. 707.
The Arguments of the Parties
The petitioners argue that respondent Emilia has no valid basis for
her claim of ownership because the Deed of Quitclaim executed in
her favor by Agripina was in fact a deed of donation that contained
no acceptance and thus, void. The petitioners attached a copy of
the Deed of Quitclaim and stressed on the following
portions, viz.: ACETIa
I, AGRIPINA ESTIOKO ADVIENTO, of le[ga]l age, Filipino citizen,
single and a resident [of] San Vicenter (sic), Urdaneta City,
Pangasinan, for and in consideration of the sum of ONE PESO
([P]1.00), Philippine Currency and the services rendered by my
niece EMILIA FIGURACION, 20 years old, single, Filipino citizen
and a resident of San Vicente, Urdaneta City, Pangasinan, do
hereby by these presentsw (sic) RENOUNCE, RELEASE and
forever QUITCLAIM in favor of EMILIA FIGURACION, her heirs,
and assigns the ONE[-]HALF (1/2) eastern portion of the following
parcel of land more particularly described and bounded as follows
to wit[.]22
They further aver that the Deed of Quitclaim is riddled with defects
that evoke questions of law, because: (a) it has not been
registered with the Register of Deeds, albeit, allegedly executed
as early as 1961; (b) a certification dated June 3, 2003 issued by
the Office of the Clerk of Court (OCC) of the RTC of Urdaneta,
Pangasinan, shows that it does not have a copy of the Deed of
Quitclaim; (c) the Office of the National Archives which is the
depository of old and new notarized documents has no record of
the Deed of Quitclaim as evidenced by a certification dated May
19, 2003; 23 and (d) Atty. Felipe V. Abenojar, who supposedly
notarized the Deed of Quitclaim was not commissioned to notarize
in 1961 per the certification dated June 9, 2003 from the OCC of
the RTC of Urdaneta, Pangasinan. 24
Respondent Emilia, on the other hand, contends that the Deed of
Quitclaim should be considered an onerous donation that requires
no acceptance as it is governed by the rules on contracts and not
by the formalities for a simple donation. 25
The Court's Ruling
Issues not raised before the courts a
quo cannot be raised for the first
time in a petition filed under Rule
45
Records show that there is a palpable shift in the defense raised
by the petitioners before the RTC and the CA.
In the Pre-Trial Order 26 of the RTC dated April 4, 1995, the
parties agreed to limit the issue with regard to Lot No. 707 as
follows: whether or not respondent Emilia is the owner of the
eastern half portion of Lot No. 707. The petitioners' supporting
theory for this issue was that "the Deed of Quitclaim dated
November 28, 1961 was rendered ineffective by the issuance of
[TCT No. 42244] in the name of Felipa and Hilaria." 27 On appeal
to the CA, however, the petitioners raised a new theory by
questioning the execution and enforceability of the Deed
of Quitclaim. They claimed that it is actually a donation that was
not accepted in the manner required by law. 28
The inconsistent postures taken by the petitioners breach the
basic procedural tenet that a party cannot change his theory on
appeal as expressly adopted in Rule 44, Section 15 of the Rules
of Court,which reads: AISHcD
Sec. 15. Questions that may be raised on appeal. Whether or
not the appellant has filed a motion for new trial in the court below,
he may include in his assignment of errors any question of law or
fact that has been raised in the court below and which is within the
issues framed by the parties.
Fortifying the rule, the Court had repeatedly emphasized that
defenses not pleaded in the answer may not be raised for the first
time on appeal. When a party deliberately adopts a certain theory
and the case is decided upon that theory in the court below, he will
not be permitted to change the same on appeal, because to permit
him to do so would be unfair to the adverse party. 29 The Court
had likewise, in numerous times, affirmed that points of law,
theories, issues and arguments not brought to the attention of the
lower court need not be, and ordinarily will not be, considered by
a reviewing court, as these cannot be raised for the first time at
such late stage. Basic considerations of due process underlie this
rule. It would be unfair to the adverse party who would have no
opportunity to present further evidence material to the new theory,
which it could have done had it been aware of it at the time of the
hearing before the trial court. 30
While a party may change his theory on appeal when the factual
bases thereof would not require presentation of any further
evidence by the adverse party in order to enable it to properly meet
the issue raised in the new theory, 31 this exception does not,
however, obtain in the case at hand.
Contrary to the petitioners' assertion, the Court finds that the
issues on the supposed defects and actual nature of the Deed of
Quitclaim are questions of fact that require not only a review or re-
evaluation of the evidence already adduced by the parties but also
the reception of new evidence as the petitioners themselves have
acknowledged when they attached in the petition several
certifications 32 in support of their new argument. It is settled that
questions of fact are beyond the province of a Rule 45 petition
since the Court is not a trier of facts. 33
Accordingly, the Court will not give due course to the new issues
raised by the petitioners involving the nature and execution of
the Deed of Quitclaim. For their failure to advance these questions
during trial, the petitioners are now barred by estoppel 34 from
imploring an examination of the same.
The respondent can compel the
partition of Lot No. 707
The first stage in an action for partition is the settlement of the
issue of ownership. Such an action will not lie if the claimant has
no rightful interest in the subject property. In fact, the parties filing
the action are required by the Rules of Court to set forth in their
complaint the nature and the extent of their title to the property. It
would be premature to effect a partition until and unless the
question of ownership is first definitely resolved. 35 IAEcCT
Here, the respondent traces her ownership over the eastern half
of Lot No. 707 from the Deed of Quitclaim executed by Agripina,
who in turn, was the co-owner thereof being one of the legitimate
heirs of Eulalio. It is well to recall that the petitioners failed to
categorically dispute the existence of the Deed of Quitclaim.
Instead, they averred that it has been rendered ineffective by TCT
No. 42244 in the name of Felipa and Hilaria this contention is,
of course, flawed.
Mere issuance of a certificate of title in the name of any person
does not foreclose the possibility that the real property may be
under co-ownership with persons not named in the certificate, or
that the registrant may only be a trustee, or that other parties may
have acquired interest over the property subsequent to the
issuance of the certificate of title. 36Stated differently, placing a
parcel of land under the mantle of the Torrens system does not
mean that ownership thereof can no longer be disputed. The
certificate cannot always be considered as conclusive evidence of
ownership. 37 In this case, co-ownership of Lot No. 707 was
precisely what respondent Emilia was able to successfully
establish, as correctly found by the RTC and affirmed by the
CA.
The status of Agripina and Carolina as the legitimate heirs of
Eulalio is an undisputed fact. As such heirs, they became co-
owners of Lot No. 707 upon the death of Eulalio on July 20, 1930.
Since Faustina was predeceased by Eulalio, she likewise became
a co-owner of the lot upon Eulalio's death. Faustina's share,
however, passed on to her daughter Carolina when the former
died on October 18, 1949. The Affidavit of Self-
Adjudication executed by Carolina did not prejudice the share of
Agripina because it is not legally possible for one to adjudicate
unto himself an entire property he was not the sole owner of. A co-
owner cannot alienate the shares of her other co-owners nemo
dat qui non habet. 38
Hence, Lot No. 707 was a co-owned property of Agripina and
Carolina. As co-owners, each of them had full ownership of her
part and of the fruits and benefits pertaining thereto. Each of them
also had the right to alienate the lot but only in so far as the extent
of her portion was affected. 39
Thus, when Carolina sold the entire Lot No. 707 on December 11,
1962 to Hilaria and Felipa without the consent of her co-owner
Agripina, the disposition affected only Carolina's pro
indiviso share, and the vendees, Hilaria and Felipa, acquired only
what corresponds to Carolina's share. A co-owner is entitled to sell
his undivided share; hence, a sale of the entire property by one
co-owner without the consent of the other co-owners is not null
and void and only the rights of the co-owner/seller are transferred,
thereby making the buyer a co-owner of the property. 40 IaAEHD
Accordingly, the deed of sale executed by Carolina in favor of
Hilaria and Felipa was a valid conveyance but only insofar as the
share of Carolina in the co-ownership is concerned. As Carolina's
successors-in-interest to the property, Hilaria and Felipa could not
acquire any superior right in the property than what Carolina is
entitled to or could transfer or alienate after partition.
In a contract of sale of co-owned property, what the vendee
obtains by virtue of such a sale are the same rights as the vendor
had as co-owner, and the vendee merely steps into the shoes of
the vendor as co-owner. 41 Hilaria and Felipa did not acquire the
undivided portion pertaining to Agripina, which has already been
effectively bequeathed to respondent Emilia as early as November
28, 1961 thru the Deed of Quitclaim. In turn, being the successor-
in-interest of Agripina's share in Lot No. 707, respondent Emilia
took the former's place in the co-ownership and as such co-owner,
has the right to compel partition at any time. 42
The respondent's right to demand
for partition is not barred by
acquisitive prescription or laches
The petitioners posit that the issuance of TCT No. 42244 in the
name of Hilaria and Felipa over Lot No. 707 on December 11, 1962
was an express repudiation of the co-ownership with respondent
Emilia. Considering the period of time that has already lapsed
since then, acquisitive prescription has already set in and the
respondent is now barred by laches from seeking a partition of the
subject lot.
The contention is specious.
Co-heirs or co-owners cannot acquire by acquisitive prescription
the share of the other co-heirs or co-owners absent a clear
repudiation of the co ownership. 43 The act of repudiation, as a
mode of terminating co-ownership, is subject to certain conditions,
to wit: (1) a co-owner repudiates the co-ownership; (2) such an act
of repudiation is clearly made known to the other co-owners; (3)
the evidence thereon is clear and conclusive; and (4) he has been
in possession through open, continuous, exclusive, and notorious
possession of the property for the period required by law. 44
The petitioners failed to comply with these conditions. The act of
Hilaria and Felipa in effecting the registration of the entire Lot No.
707 in their names thru TCT No. 42244 did not serve to effectively
repudiate the co-ownership. The respondent built her house on the
eastern portion of the lot in 1981 without any opposition from the
petitioners. Hilaria also paid realty taxes on the lot, in behalf of the
respondent, for the years 1983-1987. 45 These events indubitably
show that Hilaria and Felipa failed to assert exclusive title in
themselves adversely to Emilia. Their acts clearly manifest that
they recognized the subsistence of their co-ownership with
respondent Emilia despite the issuance of TCT No. 42244 in 1962.
Their acts constitute an implied recognition of the co-ownership
which in turn negates the presence of a clear notice of repudiation
to the respondent. To sustain a plea of prescription, it must always
clearly appear that one who was originally a joint owner has
repudiated the claims of his co-owners, and that his co-owners
were apprised or should have been apprised of his claim of
adverse and exclusive ownership before the alleged prescriptive
period began to run. 46 THEDcS
In addition, when Hilaria and Felipa registered the lot in their
names to the exclusion of Emilia, an implied trust was created by
force of law and the two of them were considered a trustee of the
respondent's undivided share. 47 As trustees, they cannot be
permitted to repudiate the trust by relying on the registration.
In Ringor v. Ringor, 48 the Court had the occasion to explain the
reason for this rule:
A trustee who obtains a Torrens title over a property held in
trust for him by another cannot repudiate the trust by relying
on the registration. A Torrens Certificate of Title in Jose's name
did not vest ownership of the land upon him. The Torrens system
does not create or vest title. It only confirms and records title
already existing and vested. It does not protect a usurper from the
true owner. The Torrens system was not intended to foment
betrayal in the performance of a trust. It does not permit one to
enrich himself at the expense of another. Where one does not
have a rightful claim to the property, the Torrens system of
registration can confirm or record nothing. Petitioners cannot rely
on the registration of the lands in Jose's name nor in the name of
the Heirs of Jose M. Ringor, Inc., for the wrong result they seek.
For Jose could not repudiate a trust by relying on a Torrens title he
held in trust for his co-heirs. The beneficiaries are entitled to
enforce the trust, notwithstanding the irrevocability of the Torrens
title. The intended trust must be sustained. 49 (Citations omitted
and emphasis ours)
Further, records do not reflect conclusive evidence showing the
manner of occupation and possession exercised by Hilaria and
Felipa over the lot from the time it was registered in their names.
The only evidence of possession extant in the records dates back
only to 1985 when Hilaria and Felipa declared the lot in their
names for taxation purposes. 50Prescription can only produce all
its effects when acts of ownership, or in this case, possession, do
not evince any doubt as to the ouster of the rights of the other co-
owners. Hence, prescription among co-owners cannot take place
when acts of ownership exercised are vague or uncertain. 51
Moreover, the evidence relative to the possession, as a fact upon
which the alleged prescription is based, must be clear, complete
and conclusive in order to establish said prescription without any
shadow of doubt; and when upon trial it is not shown that the
possession of the claimant has been adverse and exclusive and
opposed to the rights of the others, the case is not one of
ownership, and partition will lie. 52 The petitioners failed to muster
adequate evidence of possession essential for the reckoning of
the 10-year period for acquisitive prescription. IEcDCa
The express disavowal of the co-ownership did not happen on
December 11, 1962 when TCT No. 42244 was issued but in 1994
when Hilaria attempted to demolish Emilia's house thus explicitly
excluding her from the co-ownership. It was the only time that
Hilaria and Felipa made known their denial of the co-ownership.
On the same year, the respondent instituted the present complaint
for partition; hence, the period required by law for acquisitive
period to set in was not met.
Anent laches, the Court finds it unavailing in this case in view of
the proximity of the period when the co-ownership was expressly
repudiated and when the herein complaint was filed. Laches is the
negligence or omission to assert a right within a reasonable time,
warranting a presumption that the party entitled to assert it has
abandoned it or declined to assert it. 53 More so, laches is a
creation of equity and its application is controlled by equitable
considerations. It cannot be used to defeat justice or perpetrate
fraud and injustice. Neither should its application be used to
prevent the rightful owners of a property from recovering what has
been fraudulently registered in the name of another. 54
Partition of Lot No. 707
Under the Old Civil Code 55 which was then in force at the time of
Eulalio and Marcela's marriage, Lot No. 707 was their conjugal
property. 56 When Marcela died, one-half of the lot was
automatically reserved to Eulalio, the surviving spouse, as his
share in the conjugal partnership. 57 Marcela's rights to the other
half, in turn, were transmitted to her legitimate child, Agripina and
surviving spouse Eulalio. 58 Under Article 834 of the Old Civil
Code, Eulalio was entitled only to the usufruct of the lot while the
naked ownership belonged to Agripina. When he remarried,
Eulalio's one half portion of the lot representing his share in the
conjugal partnership and his usufructuary right over the other half
were brought into his second marriage with Faustina. 59
When Eulalio died on July 20, 1930, 1/4 portion of the lot was
reserved for Faustina as her share in the conjugal
partnership. 60 The remaining 1/4 were transmitted equally to the
widow Faustina and Eulalio's children, Carolina and
Agripina. 61 However, Faustina is only entitled to the usufruct of
the third available for betterment. 62 IATHaS
The usufructuary of Eulalio over the 1/2 portion inherited by
Agripina earlier was merged with her naked ownership. 63 Upon
the death of Faustina, the shares in Lot No. 707 which represents
her share in the conjugal partnership and her inheritance from
Eulalio were in turn inherited by Carolina 64 including Faustina's
usufructuary rights which were merged with Carolina's naked
ownership. 65
Consequently, Agripina is entitled to 5/8 portion of Lot No. 707
while the remaining 3/8 pertains to Carolina. Thus, when Carolina
sold Lot No. 707 to Hilaria and Felipa, the sale affected only 3/8
portion of the subject lot. Since the Deed of Quitclaim, bequeathed
only the 1/2 eastern portion of Lot No. 707 in favor of Emilia instead
of Agripina's entire 5/8 share thereof, the remaining 1/8 portion
shall be inherited by Agripina's nearest collateral relative, 66 who,
records show, is her sister Carolina.
In sum, the CA committed no reversible error in holding that the
respondent is entitled to have Lot No. 707 partitioned. The CA
judgment must, however, be modified to conform to the above-
discussed apportionment of the lot among Carolina, Hilaria, Felipa
and Emilia.
WHEREFORE, the petition is DENIED. The Decision of the Court
of Appeals in CA-G.R. CV No. 58290 dated December 11, 2001,
is AFFIRMED with MODIFICATIONS as follows: (1) 3/8 portion of
Lot No. 707 shall pertain in equal shares to Hilaria Figuracion and
Felipa Figuracion-Manuel; (2) 1/2 portion of Lot No. 707 shall
pertain to Emilia Figuracion-Gerilla; and (3) 1/8 portion of Lot No.
707 shall pertain to the estate of Carolina
(Carlina) Vda. De Figuracion. The case is REMANDED to the
Regional Trial Court of Urdaneta, Pangasinan, Branch 49, who is
directed to conduct a PARTITION BY COMMISSIONERS and
effect the actual physical partition of the subject property, as well
as the improvements that lie therein, in the foregoing manner. The
trial court is DIRECTED to appoint not more than three (3)
competent and disinterested persons, who should determine the
technical metes and bounds of the property and the proper share
appertaining to each co-owner, including the improvements, in
accordance with Rule 69 of the Rules of Court. When it is made to
appear to the commissioners that the real estate, or a portion
thereof, cannot be divided without great prejudice to the interest of
the parties, the court a quo may order it assigned to one of the
parties willing to take the same, provided he pays to the other
parties such sum or sums of money as the commissioners deem
equitable, unless one of the parties interested ask that the property
be sold instead of being so assigned, in which case the court shall
order the commissioners to sell the real estate at public sale, and
the commissioners shall sell the same accordingly, and thereafter
distribute the proceeds of the sale appertaining to the just share of
each co-owner. No pronouncement as to costs. cIHCST
SO ORDERED.
||| (Vda. de Figuracion v. Figuracion-Gerilla, G.R. No. 151334,
[February 13, 2013], 703 PHIL 455-477)
LOPEZ v. VDA DE CUAYCONG
FIRST DIVISION
[G.R. No. 46079. March 24, 1944.]
MARIA LOPEZ, plaintiff-appellant, vs. MAGDALENA
GONZAGA VDA. DE CUAYCONG ET AL., defendants-
appellees; LOPEZ SUGAR CENTRAL MILL CO.,
INC.,intervenor-appellant.
SYLLABUS
1. COMMUNITY PROPERTY; RIGHT OF A COOWNER TO
ALIENATE HIS UNDIVIDED SHARE WITHOUT THE CONSENT
OF HIS COOWNERS. Each coowner may alienate his
undivided or ideal share in the community, even without the
consent of his coowners.
2. ID.; RIGHTS ACQUIRED BY PURCHASERS FROM A
COOWNER. The rights acquired by purchasers from a coowner
are the same as those which the grantor had as coowner in an
ideal share in the property held in common.
3. ID.; CONTRACT OF SALE BY COOWNER PURPORTING TO
CONVEY CONCRETE PORTION THEREOF, EFFECT OF.
The fact that the contract of sale made by a coowner purports to
sell a concrete portion of the property held in common, does not
render the sale void, for it is a well-established principle that the
binding force of a contract must be recognized as far as it is legally
possible to do so.
4. ID.; COOWNER'S RIGHTS TO DISPOSE OF HIS SHARE
BEFORE PARTITION, LIMITATION OF. Before partition,
conventional or judicial, no coowner may dispose of any physically
identified portion of the common property; and any conveyance by
a coowner is subject to the result of a subsequent partition.
RESOLUTION
BOCOBO, J p:
The intervenor and appellant, the Lopez Sugar Central Mill Co.,
Inc., moves for a reconsideration of the resolution of this Court
promulgated on July 20, 1940, in so far as said resolution declared
the deed of sale, Exhibit D, void in its entirety and denied certain
remedies prayed for.
In the decision of this Court under date of January 29, 1940, this
Court held the sale in question void and of no effect in so far as
the three daughters, Maria Cristina, Josefina and Anita Cuaycong,
were concerned because they had not taken part therein, but valid
as to the widow and other children of Cuaycong who had
consented to the transaction. In said decision, this Court ordered
intervenor to remove the buildings constructed on Lot 178-B.
Then, in the resolution dated July 20, 1940, this Court held that
said contract was void in its entirety. The portion of said resolution
whose reconsideration is sought reads: "And with respect to the
widow of Cuaycong and his children of age, the sale was also void,
because they alienated, without a previous partition of
the hacienda, a definite and concrete part thereof, although they
had only an abstract and undivided share of said property."
We shall discuss three questions raised in the motion for
reconsideration: (1) Was the consent of the three daughters, Maria
Cristina, Josefina and Anita Cuaycong necessary to the sale in
question? (2) What rights did the intervenor acquire in this sale?
(3) Whether the distillery building and other improvements
constructed on Lot 178-B should be removed by the intervenor.
I
On the first question, we believe the consent of the three
daughters above named was not necessary to the validity of the
sale in question. Each coowner may alienate his undivided or ideal
share in the community.
Articles 392 and 399 of the Civil Code provide:
"Article 392. There is co-ownership whenever the ownership of a
thing or of a right belongs undivided to different persons.
"Art. 399. Todo condueo tendra la plena propiedad de su parte y
la de los frutos y utilidades que le correspondan, pudiendo en su
consecuencia enajenarla, cederla o hipotecarla, y aun sustituir
otro en su aprovechamiento, salvo si se tratare de derechos
personales. Pero el efecto de la enajenacion o hipoteca con
relacion a los condueos estara limitado a la porcion que se le
adjudique en la division al cesar la comunidad.
"Article 399. Each one of the co-owners shall have the absolute
ownership of his part and that of the fruits and profits pertaining
thereto, and he may therefore sell, assign or mortgage it, and even
substitute another person in its enjoyment, unless personal rights
are involved. But the effect of the alienation or mortgage with
respect to the co-owners shall be limited to the share which may
be allotted to him in the division upon the termination of the co-
ownership."
Manresa has the following to say on this subject:
"Cada condomino lo es del todo, y sobre el todo ejerce derechos
dominicales, pero al mismo tiempo es proprietario de una parte
realmente abstracta, porque hasta que la division se efectue no
queda aquella determinada concretamente. Los derechos de los
comuneros son, por lo expuesto, todo lo absolutos que el dominio
requiere, puesto que aquellos pueden gozar y disponer de la cosa
comun, sin otras limitaciones que las de no perjudicar en el
ejercicio de su derecho los intereses generales de la comunidad,
yposeen ademas la plena propiedad de su parte, que pueden
enajenar, ceder o hipotecar: parte que, repetimos, no sera cierta
hasta el momento de cesar la comunidad. El derecho de
propiedad, por consiguiente, tal y como lo define el art. 348 del
presente Codigo civil, con sus notas de absoluto y con su caracter
de individualizacion, aparece ejercido en el condominio, sin otra
diferencia entre la propiedad singular y la comun que la que
acertadamente establece el codigo portugues (arts. 2175 y 2176),
al decir 'que el propietario singular ejerce de modo exclusivo sus
derechos, y el proprietario en comun los ejerce conjuntamente con
los otros'; pero, aadiremos nosotros, estandole atribuidos al
condomino de modo individual sobre su parte indivisa todos los
derechos de tal propietario, a mas del uso y disfrute de la cosa,
que es comun a todos los propietarios." (Italics supplied.)
"Each co-owner owns the whole, and over it he exercises rights of
dominion, but at the same time he is the owner of a share which is
really abstract, because until the division is effected, such share is
not concretely determined. The rights of the co-owners are,
therefore, as absolute as dominion requires, because they may
enjoy and dispose of the common property, without any limitation
other than that they should not, in the exercise of their right,
prejudice the general interest of the community, and possess, in
addition, the full ownership of their share, which they may alienate,
convey or mortgage: which share, we repeat, will not be certain
until the community ceases. The right of ownership, therefore, as
defined in Art. 348 of the present Civil Code, with its absolute
features and its individualized character, is exercised in co-
ownership, with no other differences between sole and common
ownership than that which is rightly established by the Portuguese
Code (Arts. 2175 and 2176), when it says 'that the sole owner
exercises his rights exclusively, and the co-owner exercises them
jointly with the other co-owners'; but we shall add, to each co-
owner pertains individually, over his undivided share, all the rights
of the owner, aside from the use and enjoyment of the thing, which
is common to all the co-owners." (Italics supplied.)
Manresa further says that in the alienation of his undivided or ideal
share, a co-owner does not need the consent of the others. (Vol.
3, pp. 486-487, 3rd Ed.)
Sanchez Roman also says ("Estudios de Derecho Civil", vol. 3, pp.
174-175):
"Muestra el 399 la integridad esencial del derecho de cada
condueo en la porcion mental que en el condominio o comunidad
le corresponde."
xxx xxx xxx
". . . el ser condueo o coparticipe de una propiedad no significa
quedar privado de todo reconocimiento de disposicion de la cosa,
del libre uso de su derecho dentro de las condiciones
circunstanciales de tal estado juridico, ni que para ejercer el uso y
disfrute, o el de libre disposicion, sea preciso el previo
consentimiento de todos los interesados."
"Article 399 shows the essential integrity of the right of each co-
owner in the mental portion which belongs to him in the co-
ownership or community.
xxx xxx xxx
"To be a co-owner of a property does not mean that one is
deprived of every recognition of the disposal of the thing, of the
free use of his right within the circumstantial conditions of such
juridical status, nor is it necessary, for the use and enjoyment, or
the right of free disposal, that the previous consent of all the
interested parties be obtained . . ."
According to Scaevola (Codigo Civil, vol. 7, pp. 154-155):
"2.a. Derecho absoluto de cada comunero respecto de su parte o
cuota. Respecto de esta se equipara al propietario individual.
Es, en efecto, un propietario singular, con todos los derechos
inherentes a tal condicion. La cuota del comunero, o sea la parte
que idealmente le corresponde en la cosa o derecho comun y que
se halla representada por una cantidad determinada, es suya y
puede disponer de ella como le plazca, porque no afecta al
derecho de los demas. Dicha cantidad equivale a un credito contra
la cosa o derecho comun, propiedad particular de cada acreedor
(comunero). Las diversas cuotas suponen idealmente otras tantas
unidades de cosa o derecho, pertenecientes de modo singular a
los various propietarios, o sea una unidad a cada dueo."
"2nd. Absolute right of each co-owner with respect to his part or
share. With respect to the latter, each co-owner is the same as
an individual owner. He is a singular owner, with all the rights
inherent in such condition. The share of the co-owner, that is, the
part which ideally belongs to him in the common thing or right and
is represented by a certain quantity, is his and he may dispose of
the same as he pleases, because it does not affect the right of the
others. Such quantity is equivalent to a credit against the common
thing or right, and is the private property of each creditor (co-
owner). The various shares ideally signify as many units of thing
or right, pertaining individually to the different owners; in other
words, a unit for each owner."
It follows that the consent of the three daughters Maria Cristina,
Josefina and Anita Cuaycong to the sale in question was not
necessary.
II
The second question is: What rights did the intervenor acquire in
this sale? The answer is: the same rights as the grantors had as
co- owners in an ideal share equivalent in value to 10,832 square
meters of the hacienda. No specific portion, physically identified,
of the hacienda has been sold, but only an abstract and undivided
share equivalent in value to 10,832 square meters of the common
property. What portion of the hacienda has been sold will not be
physically and concretely ascertained until after the division. This
sale is therefore subject to the result of such partition, but this
condition does not render the contract void, for an alienation by
the co-owner of his ideal share is permitted by law, as already
indicated. If in the partition this lot 178-B should be adjudicated to
the intervenor, the problem would be simplified; otherwise, the
sellers would have to deliver to the intervenor another lot
equivalent in value to Lot No. 178-B. Incidentally, it should be
stated that according to Rule 71, sec. 4, of the new Rules of Court,
regarding partition of real estate, the commissioners on partition
shall set apart the real property "to the several parties in such lots
or parcels as will be most advantageous and equitable, having due
regard to the improvements, situation and quality of the different
parts thereof." (Italics supplied.) Consequently, without deciding
that the commissioners on partition must assign Lot 178-B to
intervenor, we deem it proper to state that if in the partition
proceedings, the commissioners should set apart said lot to
intervenor, they would be acting within the letter and spirit of the
provision, just quoted, of Rule 71, sec. 4; and that they will
probably make such adjudication.
In the Sentence of December 29, 1905, the Supreme Tribunal of
Spain declared that the alienation, by a co-owner, of either an
abstract or a concrete part of the property owned in common does
not mean the cessation of the ownership. Said sentence held:
"No es de estimar el primer motivo, porque tal estado de derecho
no desaparece, ni siquiera se desvirtua, con respecto a los
copropietarios entre si, por haber ambos, o alguno de ellos,
ejecutado actos que pudieran reputarse no comprendidos en las
facultades inherentes a la administracion, unicas que de mutuo
acuerdo se habian conferido en determinados bienes, porque si
bien todo condueo puede enajenar, ceder o hipotecar la
propiedad de su parte, el efecto de tal enajenacion esta limitado,
con referencia a los condueos, a la porcion que se le adjudique
ulteriormente, conforme al articulo 399 del Codigo civil, y no
implica la cesacion de la comunidad, ya se refiera la venta a parte
abstracta de los bienes, ya a parte concreta y determinada de los
mismos, porque esto ultimo, que podra afectar a la forma y
condiciones con que en su dia haya de practicarse la particion, no
altera en manera alguna la situacion juridica de los que poseen
colectivamente, mientras no se realice la division de la cosa
comun, que se declara no haber tenido efecto." (Italics supplied.)
"The first assignment of error cannot be sustained, because such
legal status does not disappear, nor is it impaired, with respect to
the co-owners between themselves simply because both or either
of them executed acts which may be considered as beyond the
powers inherent in administration, the only powers which by
mutual agreement had been conferred as to certain properties,
inasmuch as although every co-owner may alienate, grant, or
mortgage the ownership of his share, the effect of such alienation
is limited, with reference to the co-owners, to the portion which
may be adjudicated to him later, according to Art 399 of the Civil
Code, and does not imply the cessation of the community, whether
the sale refers to an abstract part of the property, or to a concrete
and definite part thereof, because though in the latter case the
form and conditions of the subsequent partition may be effected,
nevertheless, the juridical situation of the collective owners is not
in any way altered so long as the partition of the common property
is not carried out, which is declared not to have taken place."
(Italics supplied.)
Applying the above doctrine to the instant case, it cannot be said
that the sale of Lot 178-B to the intervenor had the effect of
partitioning the hacienda and adjudicating that lot to the intervenor.
It merely transferred to the intervenor an abstract share equivalent
in value to 10,832 square meters of said hacienda, subject to the
result of a subsequent partition. The fact that the agreement in
question purported to sell a concrete portion of the hacienda does
not render the sale void, for it is a well-established principle that
the binding force of a contract must be recognized as far as it is
legally possible to do so. "Quando res non valet ut ago, valeat
quantum valere potest." (When a thing is of no force as I do it, it
shall have as much force as it can have.") It is plain that Margarita
G. Vda. de Cuaycong and her children of age intended to sell to
intervenor no more than what they could legally and rightfully
dispose of, and as they could convey only their ideal share,
equivalent in value to 10,832 square meters of the hacienda, that
ideal share alone must be deemed to have been the subject-
matter of the sale in question. They are presumed to know the law
that before partition, conventional or judicial, no coowner may
dispose of any physically identified portion of the common
property; and that any conveyance by a coowner is subject to the
result of a subsequent partition. This interpretation of the contract
does no harm to the minor daughters, as the sale in question is
subject to the result of the partition which intervenor may demand.
As a successor in interest to an abstract or undivided share of the
sellers, equivalent in value to 10,832 square meters of the property
owned in common, the intervenor has the same right as its
predecessors in interest to demand partition at any time, according
to article 400 of the Civil Code which reads:
"Art. 400. Ningun copropietario estara obligado a permanecer en
la comunidad. Cada uno de ellos podra pedir en cualquier tiempo
que se divida la cosa comun.
"Esto no obstante, sera valido el pacto de conservar la cosa
indivisa por tiempo determinado, que no exceda de diez aos.
Este plazo podra prorrogarse por nueva convencion."
III
The third and remaining question is whether the distillery building
and other improvements constructed on Lot 178-B should be
removed by the intervenor. It is clear that the sale in question being
valid, subject to the result of the partition which the intervenor has
a right to demand as a coowner, the intervenor is a builder in good
faith. Hence, if in the partition already discussed, Lot 178-B should
not be adjudicated to the intervenor as a coowner, then article 361
of the Civil Code would have to be applied. Said article provides:
"Art. 361. El dueo del terreno en que se edificare, sembrare o
plantare de buena fe, tendra derecho a hacer suya la obra,
siembra o plantacion, previa la indemnizacion establecida en los
articulos 453 y 454, o a obligar al que fabrico o planto a pagarle el
precio del terreno, y al que sembro la renta correspondiente."
Therefore, upon reconsideration we hereby declare the deed of
sale, Exh. D. valid, binding as it is, not only upon the widow and
her children who consented thereto but also upon her three minor
daughters Maria Cristina, Josefina and Anita Cuaycong. It is
hereby further adjudicated that the intervenor as a coowner has a
right to demand partition; that if in the partition, Lot No. 178-B
should not be adjudicated to the intervenor, then the rights of the
parties concerned should be governed by article 361 of the Civil
Code, the intervenor being a builder in good faith; and that
consequently, our order in the decision of January 29, 1940,
requiring intervenor to remove the buildings constructed on said
lot should be and is hereby cancelled and withdrawn. So ordered.
Yulo, C.J., Horrilleno, Ozaeta, and Paras, JJ., concur.
||| (Lopez v. Vda. de Cuaycong, G.R. No. 46079 (Resolution),
[March 24, 1944], 74 PHIL 601-610)
TORRES v. LAPINID
FIRST DIVISION
[G.R. No. 187987. November 26, 2014.]
VICENTE TORRES, JR., CARLOS VELEZ, AND THE HEIRS OF
MARIANO VELEZ, NAMELY: ANITA CHIONG VELEZ, ROBERT
OSCAR CHIONG VELEZ, SARAH JEAN CHIONG VELEZ AND
TED CHIONG VELEZ, petitioners, vs. LORENZO LAPINID AND
JESUS VELEZ, respondents.
DECISION
PEREZ, J p:
This is a Petition for Review on Certiorari 1 under Rule 45 of the
Rules of Court filed by the petitioners assailing the 30 January
2009 Decision 2 and 14 May 2009 Resolution 3 of the Twentieth
Division of the Court of Appeals in CA-G.R. CV No. 02390,
affirming the 15 October 2007 Decision 4 of the Regional Trial
Court of Cebu City (RTC Cebu City) which dismissed the
complaint for the declaration of nullity of deed of sale against
respondent Lorenzo Lapinid (Lapinid).
The facts as reviewed are the following:
On 4 February 2006, Vicente V. Torres, Jr. (Vicente), Mariano
Velez (Mariano) 5 and Carlos Velez (petitioners) filed a
Complaint 6 before RTC Cebu City praying for the nullification of
the sale of real property by respondent Jesus Velez (Jesus) in
favor of Lapinid; the recovery of possession and ownership of the
property; and the payment of damages.
Petitioners alleged in their complaint that they, including Jesus, are
co-owners of several parcels of land including the disputed Lot No.
4389 7 located at Cogon, Carcar, Cebu. Sometime in 1993, Jesus
filed an action for partition of the parcels of land against the
petitioners and other co-owners before Branch 21 of RTC Cebu
City. On 13 August 2001, a judgment was rendered based on a
compromise agreement signed by the parties wherein they agreed
that Jesus, Mariano and Vicente were jointly authorized to sell the
said properties and receive the proceeds thereof and distribute
them to all the co-owners. However, the agreement was later
amended to exclude Jesus as an authorized seller. Pursuant to
their mandate, the petitioners inspected the property and
discovered that Lapinid was occupying a specific portion of the
3000 square meters of Lot No. 4389 by virtue of a deed of sale
executed by Jesus in favor of Lapinid. It was pointed out by
petitioner that as a consequence of what they discovered, a
forcible entry case was filed against Lapinid.
The petitioners prayed that the deed of sale be declared null and
void arguing that the sale of a definite portion of a co-owned
property without notice to the other co-owners is without force and
effect. Further, the complainants prayed for payment of rental fees
amounting to P1,000.00 per month from January 2004 or from the
time of deprivation of property in addition to attorney's fees and
litigation expenses.
Answering the allegations, Jesus admitted that there was a
partition case between him and the petitioners filed in 1993
involving several parcels of land including the contested Lot No.
4389. However, he insisted that as early as 6 November 1997, a
motion 8 was signed by the co-owners (including the petitioners)
wherein Lot No. 4389 was agreed to be adjudicated to the co-
owners belonging to the group of Jesus and the other lots be
divided to the other co-owners belonging to the group of Torres.
Jesus further alleged that even prior to the partition and motion,
several co-owners in his group had already sold their shares to
him in various dates of 1985, 1990 and 2004. 9 Thus, when the
motion was filed and signed by the parties on 6 November 1997,
his rights as a majority co-owner (73%) of Lot No. 4389 became
consolidated. Jesus averred that it was unnecessary to give notice
of the sale as the lot was already adjudicated in his favor. He
clarified that he only agreed with the 2001 Compromise
Agreement believing that it only pertained to the remaining parcels
of land excluding Lot No. 4389. 10
On his part, Lapinid admitted that a deed of sale was entered into
between him and Jesus pertaining to a parcel of land with an area
of 3000 square meters. However, he insisted on the validity of sale
since Jesus showed him several deeds of sale making him a
majority owner of Lot No. 4389. He further denied that he acquired
a specific and definite portion of the questioned property, citing as
evidence the deed of sale which does not mention any boundaries
or specific portion. He explained that Jesus permitted him to
occupy a portion not exceeding 3000 square meters conditioned
on the result of the partition of the co-owners. 11 IcCEDA
Regarding the forcible entry case, Jesus and Lapinid admitted that
such case was filed but the same was already dismissed by the
Municipal Trial Court of Carcar, Cebu. In that decision, it was ruled
that the buyers, including Lapinid, were buyers in good faith since
a proof of ownership was shown to them by Jesus before buying
the property. 12
On 15 October 2007, the trial court dismissed the complaint of
petitioners in this wise:
Therefore, the Court DISMISSES the Complaint. At the same time,
the Court NULLIFIES the site assignment made by Jesus Velez in
the Deed of Sale, dated November 9, 1997, of Lorenzo Lapinid's
portion, the exact location of which still has to be determined either
by agreement of the co-owners or by the Court in proper
proceedings. 13
Aggrieved, petitioners filed their partial motion for reconsideration
which was denied through a 26 November 2007 Order of the
court. 14 Thereafter, they filed a notice of appeal on 10 December
2007. 15
On 30 January 2009, the Court of Appeals affirmed 16 the
decision of the trial court. It validated the sale and ruled that the
compromise agreement did not affect the validity of the sale
previously executed by Jesus and Lapinid. It likewise dismissed
the claim for rental payments, attorney's fees and litigation
expenses of the petitioners.
Upon appeal before this Court, the petitioners echo the same
arguments posited before the lower courts. They argue that
Lapinid, as the successor-in-interest of Jesus, is also bound by the
2001 judgment based on compromise stating that the parcels of
land must be sold jointly by Jesus, Mariano and Vicente and the
proceeds of the sale be divided among the co-owners. To further
strengthen their contention, they advance the argument that since
the portion sold was a definite and specific portion of a co-owned
property, the entire deed of sale must be declared null and void.
We deny the petition.
Admittedly, Jesus sold an area of land to Lapinid on 9 November
1997. To simplify, the question now is whether Jesus, as a co-
owner, can validly sell a portion of the property he co-owns in favor
of another person. We answer in the affirmative.
A co-owner has an absolute ownership of his undivided and pro-
indiviso share in the co-owned property. 17 He has the right to
alienate, assign and mortgage it, even to the extent of substituting
a third person in its enjoyment provided that no personal rights will
be affected. This is evident from the provision of the Civil Code:
Art. 493. Each co-owner shall have the full ownership of his part
and of the fruits and benefits pertaining thereto, and he may
therefore alienate, assign or mortgage it, and even substitute
another person in its enjoyment, except when personal rights are
involved. But the effect of the alienation or the mortgage, with
respect to the co-owners, shall be limited to the portion which may
be allotted to him in the division upon the termination of the co-
ownership.
A co-owner is an owner of the whole and over the whole he
exercises the right of dominion, but he is at the same time the
owner of a portion which is truly abstract. 18 Hence, his co-owners
have no right to enjoin a co-owner who intends to alienate or
substitute his abstract portion or substitute a third person in its
enjoyment. 19
In this case, Jesus can validly alienate his co-owned property in
favor of Lapinid, free from any opposition from the co-owners.
Lapinid, as a transferee, validly obtained the same rights of Jesus
from the date of the execution of a valid sale. Absent any proof
that the sale was not perfected, the validity of sale subsists. In
essence, Lapinid steps into the shoes of Jesus as co-owner of an
ideal and proportionate share in the property held in
common. 20 Thus, from the perfection of contract on 9 November
1997, Lapinid eventually became a co-owner of the property.
Even assuming that the petitioners are correct in their allegation
that the disposition in favor of Lapinid before partition was a
concrete or definite portion, the validity of sale still prevails.
In a catena of decisions, 21 the Supreme Court had repeatedly
held that no individual can claim title to a definite or concrete
portion before partition of co-owned property. Each co-owner only
possesses a right to sell or alienate his ideal share after partition.
However, in case he disposes his share before partition, such
disposition does not make the sale or alienation null and void.
What will be affected on the sale is only his proportionate share,
subject to the results of the partition. The co-owners who did not
give their consent to the sale stand to be unaffected by the
alienation. 22
As explained in Spouses Del Campo v. Court of Appeals: 23
We are not unaware of the principle that a co-owner cannot
rightfully dispose of a particular portion of a co-owned property
prior to partition among all the co-owners. However, this should
not signify that the vendee does not acquire anything at all in case
a physically segregated area of the co-owned lot is in fact sold to
him. Since the co-owner/vendor's undivided interest could properly
be the object of the contract of sale between the parties, what the
vendee obtains by virtue of such a sale are the same rights as the
vendor had as co-owner, in an ideal share equivalent to the
consideration given under their transaction. In other words, the
vendee steps into the shoes of the vendor as co-owner and
acquires a proportionate abstract share in the property held in
common. 24 DSHcTC
Also worth noting is the pronouncement in Lopez v. Vda. De
Cuaycong: 25
. . . The fact that the agreement in question purported to sell
a concrete portion of the hacienda does not render the sale
void, for it is a well-established principle that the binding force of a
contract must be recognized as far as it is legally possible to do
so. "Quando res non valet ut ago, valeat quantum valere
potest." (When a thing is of no force as I do it, it shall have as much
force as it can have). 26 (Italics theirs).
Consequently, whether the disposition involves an abstract or
concrete portion of the co-owned property, the sale remains validly
executed.
The validity of sale being settled, it follows that the subsequent
compromise agreement between the other co-owners did not
affect the rights of Lapinid as a co-owner.
Records show that on 13 August 2001, a judgment based on
compromise agreement was rendered with regard to the previous
partition case involving the same parties pertaining to several
parcels of land, including the disputed lot. The words of the
compromise state that:
COME NOW[,] the parties and to this Honorable Court, most
respectfully state that instead of partitioning the properties, subject
matter of litigation, that they will just sell the properties covered by
TCT Nos. 25796, 25797 and 25798 of the Register of Deeds of the
Province of Cebu and divide the proceeds among themselves.
That Jesus Velez, Mariano Velez and Vicente Torres, Jr. are
currently authorized to sell said properties, receive the proceeds
thereof and distribute them to the parties. 27
Be that as it may, the compromise agreement failed to defeat the
already accrued right of ownership of Lapinid over the share sold
by Jesus. As early as 9 November 1997, Lapinid already became
a co-owner of the property and thus, vested with all the rights
enjoyed by the other co-owners. The judgment based on the
compromise agreement, which is to have the covered properties
sold, is valid and effectual provided as it does not affect the
proportionate share of the non-consenting party. Accordingly,
when the compromise agreement was executed without Lapinid's
consent, said agreement could not have affected his ideal and
undivided share. Petitioners cannot sell Lapinid's share absent his
consent. Nemo dat quod non habet "no one can give what he
does not have." 28
This Court has ruled in many cases that even if a co-owner sells
the whole property as his, the sale will affect only his own share
but not those of the other co-owners who did not consent to the
sale. This is because the sale or other disposition of a co-owner
affects only his undivided share and the transferee gets only what
would correspond to his grantor in the partition of the thing owned
in common. 29
We find unacceptable the argument that Lapinid must pay rental
payments to the other co-owners.
As previously discussed, Lapinid, from the execution of sale,
became a co-owner vested with rights to enjoy the property held
in common.
Clearly specified in the Civil Code are the following rights:
Art. 486. Each co-owner may use the thing owned in common,
provided he does so in accordance with the purpose for which it is
intended and in such a way as not to injure the interest of the co-
ownership or prevent the other co-owners from using it according
to their rights. The purpose of the co-ownership may be changed
by agreement, express or implied.
Art. 493. Each co-owner shall have the full ownership of his part
and of the fruits and benefits pertaining thereto, and he may
therefore alienate, assign or mortgage it and even substitute
another person in its enjoyment, except when personal rights are
involved. But the effect of the alienation or mortgage, with respect
to the co-owners, shall be limited to the portion which may be
allotted to him in the division upon the termination of the co-
ownership.
Affirming these rights, the Court held in Aguilar v. Court of
Appeals that: 30
. . . Each co-owner of property held pro indiviso exercises his
rights over the whole property and may use and enjoy the same
with no other limitation than that he shall not injure the interests of
his co-owners, the reason being that until a division is made, the
respective share of each cannot be determined and every co-
owner exercises, together with his co-participants joint ownership
over the pro indiviso property, in addition to his use and enjoyment
of the same. 31
From the foregoing, it is absurd to rule that Lapinid, who is already
a co-owner, be ordered to pay rental payments to his other co-
owners. Lapinid's right of enjoyment over the property owned in
common must be respected despite opposition and may not be
limited as long he uses the property to the purpose for which it is
intended and he does not injure the interest of the co-
ownership. ADEaHT
Finally, we find no error on denial of attorney's fees and litigation
expenses.
Pursuant to Article 2208 of the New Civil Code, attorney's fees and
expenses of litigation, in the absence of stipulation, are awarded
only in the following instances:
xxx xxx xxx
1. When exemplary damages are awarded;
2. When the defendant's act or omission has compelled the
plaintiff to litigate with third persons or to incur expenses
to protect his interests;
3. In criminal cases of malicious prosecution against the plaintiff;
4. In case of a clearly unfounded civil action or proceeding against
the plaintiff;
5. Where the defendant acted in gross and evident bad faith in
refusing to satisfy the plaintiff's plainly valid and demandable
claim;
6. In actions for legal support;
7. In actions for the recovery of wages of household helpers,
laborers and skilled workers;
8. In actions for indemnity under workmen's compensation and
employer's liability laws;
9. In a separate civil action to recover civil liability arising from a
crime;
10. When at least double judicial costs are awarded;
11. In any other case where the court deems it just and equitable
that attorney's fees and expenses of litigation should be
recovered.
In all cases, the attorney's fees and expenses of litigation must be
reasonable.
Petitioners cite Jesus' act of selling a definite portion to Lapinid as
the reason which forced theirs to litigate and file their complaint.
However, though the Court may not fault the complainants when
they filed a complaint based on their perceived cause of action,
they should have also considered thoroughly that it is well within
the rights of a co-owner to validly sell his ideal share pursuant to
law and jurisprudence.
WHEREFORE, the petition is DENIED. Accordingly, the Decision
and Resolution of the Court of Appeals dated 30 January 2009 and
14 May 2009 are hereby AFFIRMED.
SO ORDERED.
||| (Torres, Jr. v. Lapinid, G.R. No. 187987, [November 26, 2014])
ARAMBULO v. NOLASCO
SECOND DIVISION
[G.R. No. 189420. March 26, 2014.]
RAUL V. ARAMBULO AND TERESITA A. DELA
CRUZ, petitioners, vs. GENARO NOLASCO AND JEREMY
SPENCER NOLASCO, respondents.
DECISION
PEREZ, J p:
This is a Petition for Review of the 7 October 2008 Decision 1 and
30 July 2009 Resolution 2 of the Court of Appeals in CA-G.R. CV
No. 76449, which reversed and set aside the Decision 3 of the
Regional Trial Court (RTC) of Manila, Branch 51, dated 19
September 2002.
Petitioners Raul V. Arambulo and Teresita A. Dela Cruz, along
with their mother Rosita Vda. de Arambulo, and siblings
Primo V. Arambulo, Ma. Lorenza A. Lopez, Ana
Maria V. Arambulo, Maximiano V. Arambulo,
Julio V. Arambulo and Iraida Arambulo Nolasco (Iraida) are co-
owners of two (2) parcels of land located in Tondo, Manila, with an
aggregate size of 233 square meters. When Iraida passed away,
she was succeeded by her husband, respondent
Genaro Nolasco and their children, Iris Abegail Nolasco, Ingrid
Aileen Arambuloand respondent Jeremy Spencer Nolasco.
On 8 January 1999, petitioners filed a petition for relief under
Article 491 of the Civil Code with the RTC of Manila, alleging that
all of the co-owners, except for respondents, have authorized
petitioners to sell their respective shares to the subject properties;
that only respondents are withholding their consent to the sale of
their shares; that in case the sale pushes through, their mother
and siblings will get their respective 1/9 share of the proceeds of
the sale, while respondents will get 1/4 share each of the 1/9 share
of Iraida; that the sale of subject properties constitutes alteration;
and that under Article 491 of the Civil Code,if one or more co-
owners shall withhold their consent to the alterations in the thing
owned in common, the courts may afford adequate relief. 4
In their Answer, respondents sought the dismissal of the petition
for being premature. Respondents averred that they were not
aware of the intention of petitioners to sell the properties they co-
owned because they were not called to participate in any
negotiations regarding the disposition of the property. 5
After the pre-trial, two (2) issues were submitted for consideration:
1. Whether or not respondents are withholding their consent in the
sale of the subject properties; and ECaScD
2. In the affirmative, whether or not withholding of consent of sale
by the respondents is prejudicial to the petitioners. 6
On 19 September 2002, the trial court ruled in favor of petitioners
and ordered respondents to give their consent to the sale. The
dispositive portion of the decision reads:
WHEREFORE, in view of the foregoing, judgment is hereby
rendered in favor of the petitioners and against the respondents:
1. Directing respondents Genaro Nolasco and Jeremy Spencer
A. Nolasco to give their consent to the sale of their shares on the
subject properties;
2. Allowing the sale of the aforementioned properties;
3. Directing the petitioners and the co-owners, including the
respondents herein to agree with the price in which the subject
properties are to be sold and to whom to be sold; and
4. Directing the distribution of the proceeds of the sale of the
aforementioned properties in the following proportion:
a.) Rosita V. Vda. de Arambulo 1/9
b.) Primo V. Arambulo 1/9
c.) Maximiano V. Arambulo 1/9
d.) Ana Maria V. Arambulo 1/9
e.) Ma. Lorenza A. Lopez 1/9
f.) Julio V. Arambulo 1/9
g.) Raul V. Arambulo 1/9
h.) Teresita A. dela Cruz 1/9
i.) Genaro Nolasco, Jr. 1/4 of 1/9
j.) Jeremy Spencer A. Nolasco 1/4 of 1/9
k.) Iris Abegail A. Nolasco 1/4 of 1/9
l.) Ingrid Aileen Arambulo 1/4 of 1/9 7
Going along with petitioners' reliance on Article 491 of the Civil
Code,the trial court found that respondents' withholding of their
consent to the sale of their shares is prejudicial to the common
interest of the co-owners.
Respondents filed a Notice of Appeal and the trial court gave due
course to the appeal and the entire records of the case were
elevated to the Court of Appeals.
In a Decision dated 7 October 2008, the Court of Appeals granted
the appeal and reversed the trial court's decision. The Court of
Appeals held that the respondents had the full ownership of their
undivided interest in the subject properties, thus, they cannot be
compelled to sell their undivided shares in the properties. It
referred to the provisions of Article 493 of the Civil Code.However,
the Court of Appeals, implying applicability of Article 491 also
observed that petitioners failed to show how respondents'
withholding of their consent would prejudice the common interest
over the subject properties.
Hence, the instant petition seeking the reversal of the appellate
court's decision and praying for the affirmance of the trial court's
decision that ordered respondents to give their consent to the sale
of the subject properties. Petitioners emphasize that under Article
491 of the Civil Code,they may ask the court to afford them
adequate relief should respondents refuse to sell their respective
shares to the co-owned properties. They refute the appellate
court's finding that they failed to show how the withholding of
consent by respondents becomes prejudicial to their common
interest. Citing the testimony of petitioner Teresita A. Dela Cruz,
they assert that one of the two subject properties has an area of
122 square meters and if they decide to partition, instead of selling
the same, their share would be reduced to a measly 30-square
meter lot each. The other property was testified to as measuring
only 111 square meters. Petitioners reiterate that all the other co-
owners are willing to sell the property and give respondents their
share of the proceeds of the sale.
At the core of this petition is whether respondents, as co-owners,
can be compelled by the court to give their consent to the sale of
their shares in the co-owned properties. Until it reached this Court,
the discussion of the issue moved around Article 491 of the Civil
Code.We have to remove the issue out of the coverage of Article
491. It does not apply to the problem arising out of the proposed
sale of the property co-owned by the parties in this case.
The Court of Appeals correctly applied the provision of Article 493
of the Civil Code,which states: ECSHAD
Art. 493. Each co-owner shall have the full ownership of his part
and of the fruits and benefits pertaining thereto, and he may
therefore alienate, assign or mortgage it, and even substitute
another person in its enjoyment, except when personal rights are
involved. But the effect of the alienation or the mortgage, with
respect to the co-owners, shall be limited to the portion which may
be allotted to him in the division upon the termination of the co-
ownership.
Upon the other hand, Article 491 states:
Art. 491. None of the co-owners shall, without the consent of the
others, make alterations in the thing owned in common, even
though benefits for all would result therefrom. However, if the
withholding of the consent by one or more of the co-owners is
clearly prejudicial to the common interest, the courts may afford
adequate relief.
As intimated above, the erroneous application of Article 491 is, in
this case, an innate infirmity. The very initiatory pleading below
was captioned Petition for Relief under Article 491 of the New Civil
Code. Petitioners, likewise petitioners before the RTC, filed the
case on the submission that Article 491 covers the petition and
grants the relief prayed for, which is to compel the respondent co-
owners to agree to the sale of the co-owned property. The trial
court took up all that petitioners tendered, and it favored the
pleading with the finding that:
. . . To this court, the act of respondents of withholding consent to
the sale of the properties is not only prejudicial to the common
interest of the co-owners but is also considered as an alteration
within the purview of Article 491 of the New Civil Code. . . . . Hence,
it is deemed just and proper to afford adequate relief to herein
petitioners under Article 491 of the New Civil Code. 8
That a sale constitutes an alteration as mentioned in Article 491 is
an established jurisprudence. It is settled that alterations include
any act of strict dominion or ownership and any encumbrance or
disposition has been held implicitly to be an act of
alteration. 9 Alienation of the thing by sale of the property is an act
of strict dominion. 10 However, the ruling that alienation is
alteration does not mean that a sale of commonly owned real
property is covered by the second paragraph of Article 491, such
that if a co-owner withholds consent to the sale, the courts, upon
a showing of a clear prejudice to the common interest, may, as
adequate relief, order the grant of the withheld consent. Such is
the conclusion drawn by the trial court, and hinted at, if not relied
upon, by the appellate court.
Ruling that the trial court erred in its conclusion, the Court of
Appeals correctly relied on Article 493 in support of the finding that
respondents cannot be compelled to agree with the sale. We affirm
the reversal by the Court of Appeals of the judgment of the trial
court.
1. There is co-ownership whenever, as in this case, the ownership
of an undivided thing, belongs to different persons. 11 Article 493
of the Code defines the ownership of the co-owner, clearly
establishing that each co-owner shall have full ownership of his
part and of its fruits and benefits.
Pertinent to this case, Article 493 dictates that each one of the
parties herein as co-owners with full ownership of their parts can
sell their fully owned part. The sale by the petitioners of their parts
shall not affect the full ownership by the respondents of the part
that belongs to them. Their part which petitioners will sell shall be
that which may be apportioned to them in the division upon the
termination of the co-ownership. With the full ownership of the
respondents remaining unaffected by petitioners' sale of their
parts, the nature of the property, as co-owned, likewise stays. In
lieu of the petitioners, their vendees shall be co-owners with the
respondents. The text of Article 493 says so.
2. Our reading of Article 493 as applied to the facts of this case is
a reiteration of what was pronounced in Bailon-Casilao v. Court of
Appeals. 12 The rights of a co-owner of a certain property are
clearly specified in Article 493 of the Civil Code.Thus: ECTAHc
Art. 493. Each co-owner shall have the full ownership of his
part and of the fruits and benefits pertaining thereto, and he may
therefore alienate, assign or mortgage it[,] and even substitute
another person in its enjoyment, except when personal rights are
involved. But the effect of the alienation or [the] mortgage, with
respect to the co-owners, shall be limited to the portion which may
be allotted to him in the division upon the termination of the co-
ownership.
As early as 1923, this Court has ruled that even if a co-owner sells
the whole property as his, the sale will affect only his own share
but not those of the other co-owners who did not consent to the
sale. 13 This is because under the
aforementioned codal provision, the sale or other disposition
affects only his undivided share and the transferee gets only what
would correspond to his grantor in the partition of the thing owned
in common. 14 Consequently, by virtue of the sales made by
Rosalia and Gaudencio Bailon which are valid with respect to their
proportionate shares, and the subsequent transfers which
culminated in the sale to private respondent Celestino Afable, the
said Afable thereby became a co-owner of the disputed parcel of
land as correctly held by the lower court since the sales produced
the effect of substituting the buyers in the enjoyment thereof. 15
From the foregoing, it may be deduced that since a co-owner is
entitled to sell his undivided share, a sale of the entire property by
one co-owner without the consent of the other co-owners is not
null and void. However, only the rights of the co-owner-seller are
transferred, thereby making the buyer a co-owner of the
property. 16 (Italics theirs).
Nearer to the dispute at hand are the pronouncements in the 1944
case of Lopez v. Vda. de Cuaycong. 17 Citing Manresa on Article
399 which is the present Article 493 of the Civil Code,the Court
said:
. . . Article 399 shows the essential integrity of the right of each co-
owner in the mental portion which belongs to him in the ownership
or community.
xxx xxx xxx
To be a co-owner of a property does not mean that one is deprived
of every recognition of the disposal of the thing, of the free use of
his right within the circumstantial conditions of such judicial status,
nor is it necessary, for the use and enjoyment, or the right of free
disposal, that the previous consent of all the interested parties be
obtained. 18(Underscoring supplied).
The Court in Lopez further cited Scaevola:
2nd. Absolute right of each co-owner with respect to his part or
share. With respect to the latter, each co-owner is the same as
an individual owner. He is a singular owner, with all the rights
inherent in such condition. The share of the co-owner, that is, the
part which ideally belongs to him in the common thing or right and
is represented by a certain quantity, is his and he may dispose of
the same as he pleases, because it does not affect the right of the
others. Such quantity is equivalent to a credit against the common
thing or right and is the private property of each creditor (co-
owner). The various shares ideally signify as many units of thing
or right, pertaining individually to the different owners; in other
words, a unit for each owner. 19 (Underscoring supplied).
The ultimate authorities in civil law, recognized as such by the
Court, agree that co-owners such as respondents have over their
part, the right of full and absolute ownership. Such right is the
same as that of individual owners which is not diminished by the
fact that the entire property is co-owned with others. That part
which ideally belongs to them, or their mental portion, may be
disposed of as they please, independent of the decision of their
co-owners. So we rule in this case. The respondents cannot be
ordered to sell their portion of the co-owned properties. In the
language of Rodriguez v. Court of First Instance of Rizal, 20 "each
party is the sole judge of what is good for him." 21
3. Indeed, the respected commentaries suggest the conclusion
that, insofar as the sale of co-owned properties is concerned, there
is no common interest that may be prejudiced should one or more
of the co-owners refuse to sell the co-owned property, which is
exactly the factual situation in this case. When respondents
disagreed to the sale, they merely asserted their individual
ownership rights. Without unanimity, there is no common interest.
Petitioners who project themselves as prejudiced co-owners may
bring a suit for partition, which is one of the modes of extinguishing
co-ownership. Article 494 of the Civil Codeprovides that no co-
owner shall be obliged to remain in the co-ownership, and that
each co-owner may demand at any time partition of the thing
owned in common insofar as his share is concerned. Corollary to
this rule, Article 498 of the Civil Code states that whenever the
thing is essentially indivisible and the co-owners cannot agree that
it be allotted to one of them who shall indemnify the others, it shall
be sold and its proceeds accordingly distributed. This is resorted
to (a) when the right to partition the property is invoked by any of
the co-owners but because of the nature of the property, it cannot
be subdivided or its subdivision would prejudice the interests of
the co-owners, and (b) the co-owners are not in agreement as to
who among them shall be allotted or assigned the entire property
upon proper reimbursement of the co-owners. 22 This is the result
obviously aimed at by petitioners at the outset. As already shown,
this cannot be done while the co-ownership exists.
Essentially, a partition proceeding accords all parties the
opportunity to be heard, the denial of which was raised as a
defense by respondents for opposing the sale of the subject
properties.
The necessity of partition could not be more emphasized than
in Rodriguez v. Court of First Instance of Rizal, 23 to wit: cAaETS
. . . That this recourse would entail considerable time, trouble and
expense, unwarranted by the value of the property from the
standpoint of the [respondents], is no legal justification for the
apportionment of the property not agreeable to any of the co-
owners. Disagreements and differences impossible of adjustment
by the parties themselves are bound to arise, and it is precisely
with such contingency in view that the law on partition was
evolved. 24
WHEREFORE, based on the foregoing, the petition
is DENIED without prejudice to the filing of an action for partition.
The Decision of the Court of Appeals in CA-G.R. CV No. 76449
is AFFIRMED.
SO ORDERED.
||| (Arambulo v. Nolasco, G.R. No. 189420, [March 26, 2014], 730
PHIL 464-474)
CRUZ v. CATAPANG
SECOND DIVISION
[G.R. No. 164110. February 12, 2008.]
LEONOR B. CRUZ, petitioner, vs. TEOFILA
M. CATAPANG, respondent.
DECISION
QUISUMBING, J p:
This petition for review seeks the reversal of the Decision 1 dated
September 16, 2003 and the Resolution 2 dated June 11, 2004 of
the Court of Appeals in CA-G.R. SP No. 69250. The Court of
Appeals reversed the Decision 3 dated October 22, 2001 of the
Regional Trial Court (RTC), Branch 86, Taal, Batangas, which had
earlier affirmed the Decision 4 dated September 20, 1999 of the
7th Municipal Circuit Trial Court (MCTC) of Taal, Batangas
ordering respondent to vacate and deliver possession of a portion
of the lot co-owned by petitioner, Luz Cruz and Norma Maligaya.
The antecedent facts of the case are as follows.
Petitioner Leonor B. Cruz, Luz Cruz and Norma Maligaya are the
co-owners of a parcel of land covering an area of 1,435 square
meters located at Barangay Mahabang Ludlod, Taal,
Batangas. 5 With the consent of Norma Maligaya, one of the
aforementioned co-owners, respondent Teofila M. Catapang built
a house on a lot adjacent to the abovementioned parcel of land
sometime in 1992. The house intruded, however, on a portion of
the co-owned property. 6
In the first week of September 1995, petitioner Leonor
B. Cruz visited the property and was surprised to see a part of
respondent's house intruding unto a portion of the co-owned
property. She then made several demands upon respondent to
demolish the intruding structure and to vacate the portion
encroaching on their property. The respondent, however, refused
and disregarded her demands. 7
On January 25, 1996, the petitioner filed a complaint 8 for forcible
entry against respondent before the 7th MCTC of Taal, Batangas.
The MCTC decided in favor of petitioner, ruling that consent of only
one of the co-owners is not sufficient to justify defendant's
construction of the house and possession of the portion of the lot
in question. 9 The dispositive portion of the MCTC decision reads:
WHEREFORE, judgment is hereby rendered ordering the
defendant or any person acting in her behalf to vacate and deliver
the possession of the area illegally occupied to the plaintiff;
ordering the defendant to pay plaintiff reasonable attorney's fees
of P10,000.00, plus costs of suit.
SO ORDERED. 10
On appeal, the RTC, Branch 86, Taal, Batangas, affirmed the
MCTC's ruling in a Decision dated October 22, 2001, the
dispositive portion of which states:
Wherefore, premises considered, the decision [appealed] from is
hereby affirmed in toto.
SO ORDERED. 11
After her motion for reconsideration was denied by the RTC,
respondent filed a petition for review with the Court of Appeals,
which reversed the RTC's decision. The Court of Appeals held that
there is no cause of action for forcible entry in this case because
respondent's entry into the property, considering the consent given
by co-owner Norma Maligaya, cannot be characterized as one
made through strategy or stealth which gives rise to a cause of
action for forcible entry. 12 The Court of Appeals' decision further
held that petitioner's remedy is not an action for ejectment but an
entirely different recourse with the appropriate forum. The Court of
Appeals disposed, thus:
WHEREFORE, premises considered, the instant Petition is
hereby GRANTED. The challenged Decision dated 22 October
2001 as well as the Order dated 07 January 2002 of the Regional
Trial Court of Taal, Batangas, Branch 86, are
hereby REVERSED and SET ASIDE and, in lieu thereof, another
is entered DISMISSING the complaint for forcible entry docketed
as Civil Case No. 71-T.
SO ORDERED. 13
After petitioner's motion for reconsideration was denied by the
Court of Appeals in a Resolution dated June 11, 2004, she filed
the instant petition.
Raised before us for consideration are the following issues:
I.
WHETHER OR NOT THE KNOWLEDGE AND CONSENT OF
CO-OWNER NORMA MALIGAYA IS A VALID LICENSE FOR
THE RESPONDENT TO ERECT THE BUNGALOW HOUSE ON
THE PREMISES OWNED PRO-INDIVISO SANS CONSENT
FROM THE PETITIONER AND OTHE[R] CO-OWNER[.]
II.
WHETHER OR NOT RESPONDENT, BY HER ACTS, HAS
ACQUIRED EXCLUSIVE OWNERSHIP OVER THE PORTION
OF THE LOT SUBJECT OF THE PREMISES PURSUANT TO
THE CONSENT GRANTED UNTO HER BY CO-OWNER NORMA
MALIGAYA TO THE EXCLUSION OF THE PETITIONER AND
THE OTHER CO-OWNER. 14
III.
. . . WHETHER OR NOT RESPONDENT IN FACT OBTAINED
POSSESSION OF THE PROPERTY IN QUESTION BY MEANS
OF SIMPLE STRATEGY. 15
Petitioner prays in her petition that we effectively reverse the Court
of Appeals' decision.
Simply put, the main issue before us is whether consent given by
a co-owner of a parcel of land to a person to construct a house on
the co-owned property warrants the dismissal of a forcible entry
case filed by another co-owner against that person.
In her memorandum, 16 petitioner contends that the consent and
knowledge of co-owner Norma Maligaya cannot defeat the action
for forcible entry since it is a basic principle in the law of co-
ownership that no individual co-owner can claim title to any definite
portion of the land or thing owned in common until partition.
On the other hand, respondent in her memorandum 17 counters
that the complaint for forcible entry cannot prosper because her
entry into the property was not through strategy or stealth due to
the consent of one of the co-owners. She further argues that since
Norma Maligaya is residing in the house she built, the issue is not
just possession de facto but also one of possession de jure since
it involves rights of co-owners to enjoy the property.
As to the issue of whether or not the consent of one co-owner will
warrant the dismissal of a forcible entry case filed by another co-
owner against the person who was given the consent to construct
a house on the co-owned property, we have held that a co-owner
cannot devote common property to his or her exclusive use to the
prejudice of the co-ownership. 18 In our view, a co-owner cannot
give valid consent to another to build a house on the co-owned
property, which is an act tantamount to devoting the property to his
or her exclusive use.
Furthermore, Articles 486 and 491 of the Civil Code provide:
Art. 486. Each co-owner may use the thing owned in common,
provided he does so in accordance with the purpose for which it is
intended and in such a way as not to injure the interest of the co-
ownership or prevent the other co-owners from using it according
to their rights. The purpose of the co-ownership may be changed
by agreement, express or implied.
Art. 491. None of the co-owners shall, without the consent of the
others, make alterations in the thing owned in common, even
though benefits for all would result therefrom. However, if the
withholding of the consent by one or more of the co-owners is
clearly prejudicial to the common interest, the courts may afford
adequate relief.
Article 486 states each co-owner may use the thing owned in
common provided he does so in accordance with the purpose for
which it is intended and in such a way as not to injure the interest
of the co-ownership or prevent the other co-owners from using it
according to their rights. Giving consent to a third person to
construct a house on the co-owned property will injure the interest
of the co-ownership and prevent other co-owners from using the
property in accordance with their rights.
Under Article 491, none of the co-owners shall, without the
consent of the others, make alterations in the thing owned in
common. It necessarily follows that none of the co-owners can,
without the consent of the other co-owners, validly consent to the
making of an alteration by another person, such as respondent, in
the thing owned in common. Alterations include any act of strict
dominion or ownership and any encumbrance or disposition has
been held implicitly to be an act of alteration. 19 The construction
of a house on the co-owned property is an act of dominion.
Therefore, it is an alteration falling under Article 491 of the Civil
Code. There being no consent from all co-owners, respondent had
no right to construct her house on the co-owned property.
Consent of only one co-owner will not warrant the dismissal of the
complaint for forcible entry filed against the builder. The consent
given by Norma Maligaya in the absence of the consent of
petitioner and Luz Cruz did not vest upon respondent any right to
enter into the co-owned property. Her entry into the property still
falls under the classification "through strategy or stealth".
The Court of Appeals held that there is no forcible entry because
respondent's entry into the property was not through strategy or
stealth due to the consent given to her by one of the co-owners.
We cannot give our imprimatur to this sweeping conclusion.
Respondent's entry into the property without the permission of
petitioner could appear to be a secret and clandestine act done in
connivance with co-owner Norma Maligaya whom respondent
allowed to stay in her house. Entry into the land effected
clandestinely without the knowledge of the other co-owners could
be categorized as possession by stealth. 20 Moreover,
respondent's act of getting only the consent of one co-owner, her
sister Norma Maligaya, and allowing the latter to stay in the
constructed house, can in fact be considered as a strategy which
she utilized in order to enter into the co-owned property. As such,
respondent's acts constitute forcible entry.
Petitioner's filing of a complaint for forcible entry, in our view, was
within the one-year period for filing the complaint. The one-year
period within which to bring an action for forcible entry is generally
counted from the date of actual entry to the land. However, when
entry is made through stealth, then the one-year period is counted
from the time the petitioner learned about it. 21 Although
respondent constructed her house in 1992, it was only in
September 1995 that petitioner learned of it when she visited the
property. Accordingly, she then made demands on respondent to
vacate the premises. Failing to get a favorable response, petitioner
filed the complaint on January 25, 1996, which is within the one-
year period from the time petitioner learned of the construction.
WHEREFORE, the petition is GRANTED. The Decision dated
September 16, 2003 and the Resolution dated June 11, 2004 of
the Court of Appeals in CA-G.R. SP No. 69250 are REVERSED
and SET ASIDE. The Decision dated October 22, 2001 of the
Regional Trial Court, Branch 86, Taal, Batangas is REINSTATED.
Costs against respondent.
SO ORDERED.
||| (Cruz v. Catapang, G.R. No. 164110, [February 12, 2008], 568
PHIL 472-480)
CABALES v. CA
FIRST DIVISION
[G.R. No. 162421. August 31, 2007.]
NELSON CABALES and RITO CABALES, petitioners, vs.
COURT OF APPEALS, JESUS FELIANO and ANUNCIACION
FELIANO, respondents.
DECISION
PUNO, C.J p:
This is a petition for review on certiorari seeking the reversal of the
decision 1 of the Court of Appeals dated October 27, 2003, in CA-
G.R. CV No. 68319 entitled "Nelson Cabales and Rito Cabales v.
Jesus Feliano and Anunciacion Feliano," which affirmed with
modification the decision 2 of the Regional Trial Court of Maasin,
Southern Leyte, Branch 25, dated August 11, 2000, in Civil Case
No. R-2878. The resolution of the Court of Appeals dated February
23, 2004, which denied petitioners' motion for reconsideration, is
likewise herein assailed.
The facts as found by the trial court and the appellate court are
well established. ACcaET
Rufino Cabales died on July 4, 1966 and left a 5,714-square meter
parcel of land located in Brgy. Rizal, Sogod, Southern Leyte,
covered by Tax Declaration No. 17270 to his surviving wife
Saturnina and children Bonifacio, Albino, Francisco, Leonora,
Alberto and petitioner Rito.
On July 26, 1971, brothers and co-owners Bonifacio, Albino and
Alberto sold the subject property to Dr. Cayetano Corrompido for
P2,000.00, with right to repurchase within eight (8) years. The
three (3) siblings divided the proceeds of the sale among
themselves, each getting a share of P666.66.
The following month or on August 18, 1971, Alberto secured a note
("vale") from Dr. Corrompido in the amount of P300.00. cSaADC
In 1972, Alberto died leaving his wife and son, petitioner Nelson.
On December 18, 1975, within the eight-year redemption period,
Bonifacio and Albino tendered their payment of P666.66 each to
Dr. Corrompido. But Dr. Corrompido only released the document
of sale with pacto de retro after Saturnina paid for the share of her
deceased son, Alberto, including his "vale" of P300.00. CcHDSA
On even date, Saturnina and her four (4) children Bonifacio,
Albino, Francisco and Leonora sold the subject parcel of land to
respondents-spouses Jesus and Anunciacion Feliano for
P8,000.00. The Deed of Sale provided in its last paragraph, thus:
It is hereby declared and understood that the amount of TWO
THOUSAND TWO HUNDRED EIGHTY SIX PESOS (2,286.00)
corresponding and belonging to the Heirs of Alberto Cabales and
to Rito Cabales who are still monitors upon the execution of this
instrument are held in trust by the VENDEE and to be paid and
delivered only to them upon reaching the age of 21.
On December 17, 1985, the Register of Deeds of Southern Leyte
issued Original Certificate of Title No. 17035 over the purchased
land in the names of respondents-spouses.
On December 30, 1985, Saturnina and her four (4) children
executed an affidavit to the effect that petitioner Nelson would only
receive the amount of P176.34 from respondents-spouses when
he reaches the age of 21 considering that Saturnina paid Dr.
Corrompido P966.66 for the obligation of petitioner Nelson's late
father Alberto, i.e., P666.66 for his share in the redemption of the
sale with pacto de retro as well as his "vale" of P300.00. DIETcC
On July 24, 1986, 24-year old petitioner Rito Cabales
acknowledged receipt of the sum of P1,143.00 from respondent
Jesus Feliano, representing the former's share in the proceeds of
the sale of subject property.
In 1988, Saturnina died. Petitioner Nelson, then residing in Manila,
went back to his father's hometown in Southern Leyte. That same
year, he learned from his uncle, petitioner Rito, of the sale of
subject property. In 1993, he signified his intention to redeem the
subject land during a barangay conciliation process that he
initiated.
On January 12, 1995, contending that they could not have sold
their respective shares in subject property when they were minors,
petitioners filed before the Regional Trial Court of Maasin,
Southern Leyte, a complaint for redemption of the subject land
plus damages. DTIcSH
In their answer, respondents-spouses maintained that petitioners
were estopped from claiming any right over subject property
considering that (1) petitioner Rito had already received the
amount corresponding to his share of the proceeds of the sale of
the project property, and (2) that petitioner Nelson failed to consign
to the court the total amount of the redemption price necessary for
legal redemption. They prayed for the dismissal of the case on the
grounds of laches and prescription.
No amicable settlement was reached at pre-trial. Trial ensued and
on August 11, 2000, the trial court ruled against petitioners. It held
that (1) Alberto or, by his death, any of his heirs including petitioner
Nelson lost their right to subject land when not one of them
repurchased it from Dr. Corrompido; (2) Saturnina was effectively
subrogated to the rights and interests of Alberto when she paid for
Alberto's share as well as his obligation to Dr. Corrompido; and (3)
petitioner Rito had no more right to redeem his share to subject
property as the sale by Saturnina, his legal guardian pursuant to
Section 7, Rule 93 of the Rules of Court, was perfectly valid; and
it was shown that he received his share of the proceeds of the sale
on July 24, 1986, when he was 24 years old. HcTEaA
On appeal, the Court of Appeals modified the decision of the trial
court. It held that the sale by Saturnina of petitioner Rito's
undivided share to the property was unenforceable for lack of
authority or legal representation but that the contract was
effectively ratified by petitioner Rito's receipt of the proceeds on
July 24, 1986. The appellate court also ruled that petitioner Nelson
is co-owner to the extent of one-seventh (1/7) of subject property
as Saturnina was not subrogated to Alberto's rights when she
repurchased his share to the property. It further directed petitioner
Nelson to pay the estate of the late Saturnina Cabales the amount
of P966.66, representing the amount which the latter paid for the
obligation of petitioner Nelson's late father Alberto. Finally,
however, it denied petitioner Nelson's claim for redemption for his
failure to tender or consign in court the redemption money within
the period prescribed by law.
In this petition for review on certiorari, petitioners contend that the
Court of Appeals erred in (1) recognizing petitioner Nelson
Cabales as co-owners of subject land but denied him the right of
legal redemption, and (2) not recognizing petitioner Rito Cabales
as co-owner of subject land with similar right of legal redemption.
First, we shall delineate the rights of petitioners to subject land.
When Rufino Cabales died intestate, his wife Saturnina and his six
(6) children, Bonifacio, Albino, Francisco, Leonora, Alberto and
petitioner Rito, survived and succeeded him. Article 996 of the
New Civil Code provides that "[i]f a widow or widower and
legitimate children or descendants are left, the surviving spouse
has in the succession the same share as that of each of the
children." Verily, the seven (7) heirs inherited equally on subject
property. Petitioner Rito and Alberto, petitioner Nelson's father,
inherited in their own rights and with equal shares as the others.
But before partition of subject land was effected, Alberto died. By
operation of law, his rights and obligations to one-seventh of
subject land were transferred to his legal heirs his wife and his
son petitioner Nelson.
We shall now discuss the effects of the two (2) sales of subject
land to the rights of the parties.
The first sale with pacto de retro to Dr. Corrompido by the brothers
and co-owners Bonifacio, Albino and Alberto was valid but only as
to their pro-indiviso shares to the land. When Alberto died prior to
repurchasing his share, his rights and obligations were transferred
to and assumed by his heirs, namely his wife and his son,
petitioner Nelson. But the records show that it was Saturnina,
Alberto's mother, and not his heirs, who repurchased for him. As
correctly ruled by the Court of Appeals, Saturnina was not
subrogated to Alberto's or his heirs' rights to the property when she
repurchased the share.
In Paulmitan v. Court of Appeals, 3 we held that a co-owner who
redeemed the property in its entirety did not make her the owner
of all of it. The property remained in a condition of co-ownership
as the redemption did not provide for a mode of terminating a co-
ownership. 4 But the one who redeemed had the right to be
reimbursed for the redemption price and until reimbursed, holds a
lien upon the subject property for the amount due. 5 Necessarily,
when Saturnina redeemed for Alberto's heirs who had then
acquired his pro-indivisoshare in subject property, it did not vest in
her ownership over the pro-indiviso share she redeemed. But she
had the right to be reimbursed for the redemption price and held a
lien upon the property for the amount due until reimbursement.
The result is that the heirs of Alberto, i.e., his wife and his son
petitioner Nelson, retained ownership over their pro-
indiviso share.
Upon redemption from Dr. Corrompido, the subject property was
resold to respondents-spouses by the co-owners. Petitioners Rito
and Nelson were then minors and as indicated in the Deed of Sale,
their shares in the proceeds were held in trust by respondents-
spouses to be paid and delivered to them upon reaching the age
of majority.
As to petitioner Rito, the contract of sale was unenforceable as
correctly held by the Court of Appeals. Articles 320 and 326 of the
New Civil Code 6 state that:
Art. 320. The father, or in his absence the mother, is the legal
administrator of the property pertaining to the child under parental
authority. If the property is worth more than two thousand pesos,
the father or mother shall give a bond subject to the approval of
the Court of First Instance.
Art. 326. When the property of the child is worth more than two
thousand pesos, the father or mother shall be considered a
guardian of the child's property, subject to the duties and
obligations of guardians under the Rules of Court.
In other words, the father, or, in his absence, the mother, is
considered legal administrator of the property pertaining to the
child under his or her parental authority without need of giving a
bond in case the amount of the property of the child does not
exceed two thousand pesos. 7 Corollary to this, Rule 93, Section
7 of the Revised Rules of Court of 1964, applicable to this case,
automatically designates the parent as legal guardian of the child
without need of any judicial appointment in case the latter's
property does not exceed two thousand pesos, 8 thus:
Sec. 7. Parents as guardians. When the property of the child
under parental authority is worth two thousand pesos or less, the
father or the mother, without the necessity of court appointment,
shall be his legal guardian . . . 9
Saturnina was clearly petitioner Rito's legal guardian without
necessity of court appointment considering that the amount of his
property or one-seventh of subject property was P1,143.00, which
is less than two thousand pesos. However, Rule 96, Sec.
1 10 provides that:
Section 1. To what guardianship shall extend. A guardian
appointed shall have the care and custody of the person of his
ward, and the management of his estate, or the management of
the estate only, as the case may be. The guardian of the estate of
a nonresident shall have the management of all the estate of the
ward within the Philippines, and no court other than that in which
such guardian was appointed shall have jurisdiction over the
guardianship.
Indeed, the legal guardian only has the plenary power of
administration of the minor's property. It does not include the
power of alienation which needs judicial authority. 11 Thus, when
Saturnina, as legal guardian of petitioner Rito, sold the latter's pro-
indiviso share in subject land, she did not have the legal authority
to do so.
Article 1403 of the New Civil Code provides, thus:
Art. 1403. The following contracts are unenforceable, unless they
are ratified:
(1) Those entered into in the name of another person by one who
has been given no authority or legal representation, or who has
acted beyond his powers;
xxx xxx xxx
Accordingly, the contract of sale as to the pro-indiviso share of
petitioner Rito was unenforceable. However, when he
acknowledged receipt of the proceeds of the sale on July 24, 1986,
petitioner Rito effectively ratified it. This act of ratification rendered
the sale valid and binding as to him. aDIHCT
With respect to petitioner Nelson, on the other hand, the contract
of sale was void. He was a minor at the time of the sale. Saturnina
or any and all the other co-owners were not his legal guardians
with judicial authority to alienate or encumber his property. It was
his mother who was his legal guardian and, if duly authorized by
the courts, could validly sell his undivided share to the property.
She did not. Necessarily, when Saturnina and the others sold the
subject property in its entirety to respondents-spouses, they only
sold and transferred title to their pro-indiviso shares and not that
part which pertained to petitioner Nelson and his mother.
Consequently, petitioner Nelson and his mother retained
ownership over their undivided share of subject property. 12
But may petitioners redeem the subject land from respondents-
spouses? Articles 1088 and 1623 of the New Civil Code are
pertinent:
Art. 1088. Should any of the heirs sell his hereditary rights to a
stranger before the partition, any or all of the co-heirs may be
subrogated to the rights of the purchaser by reimbursing him for
the price of the sale, provided they do so within the period of one
month from the time they were notified in writing of the sale by the
vendor.
Art. 1623. The right of legal pre-emption or redemption shall not
be exercised except within thirty days from the notice in writing by
the prospective vendor, or by the vendor, as the case may be. The
deed of sale shall not be recorded in the Registry of Property,
unless accompanied by an affidavit of the vendor that he has given
written notice thereof to all possible redemptioners.
The right of redemption of co-owners excludes that of adjoining
owners.
Clearly, legal redemption may only be exercised by the co-owner
or co-owners who did not part with his or their pro-indiviso share
in the property held in common. As demonstrated, the sale as to
the undivided share of petitioner Rito became valid and binding
upon his ratification on July 24, 1986. As a result, he lost his right
to redeem subject property. SEHTAC
However, as likewise established, the sale as to the undivided
share of petitioner Nelson and his mother was not valid such that
they were not divested of their ownership thereto. Necessarily,
they may redeem the subject property from respondents-spouses.
But they must do so within thirty days from notice in writing of the
sale by their co-owners vendors. In reckoning this period, we held
in Alonzo v. Intermediate Appellate Court, 13 thus:
. . . we test a law by its results; and likewise, we may add, by its
purposes. It is a cardinal rule that, in seeking the meaning of the
law, the first concern of the judge should be to discover in its
provisions the intent of the lawmaker. Unquestionably, the law
should never be interpreted in such a way as to cause injustice as
this is never within the legislative intent. An indispensable part of
that intent, in fact, for we presume the good motives of the
legislature, is to render justice.
Thus, we interpret and apply the law not independently of but in
consonance with justice. Law and justice are inseparable, and we
must keep them so. . . .
. . . While we may not read into the law a purpose that is not there,
we nevertheless have the right to read out of it the reason for its
enactment. In doing so, we defer not to "the letter that killeth" but
to "the spirit that vivifieth," to give effect to the lawmaker's will.
In requiring written notice, Article 1088 (and Article 1623 for that
matter) 14 seeks to ensure that the redemptioner is properly
notified of the sale and to indicate the date of such notice as the
starting time of the 30-day period of redemption. Considering the
shortness of the period, it is really necessary, as a general rule, to
pinpoint the precise date it is supposed to begin, to obviate the
problem of alleged delays, sometimes consisting of only a day or
two.
In the instant case, the right of redemption was invoked not days
but years after the sale was made in 1978. We are not unmindful
of the fact that petitioner Nelson was a minor when the sale was
perfected. Nevertheless, the records show that in 1988, petitioner
Nelson, then of majority age, was informed of the sale of subject
property. Moreover, it was noted by the appellate court that
petitioner Nelson was likewise informed thereof in 1993 and he
signified his intention to redeem subject property during
a barangay conciliation process. But he only filed the complaint for
legal redemption and damages on January 12, 1995, certainly
more than thirty days from learning about the sale.
In the face of the established facts, petitioner Nelson cannot feign
ignorance of the sale of subject property in 1978. To require strict
proof of written notice of the sale would be to countenance an
obvious false claim of lack of knowledge thereof, thus
commending the letter of the law over its purpose, i.e., the
notification of redemptioners.
The Court is satisfied that there was sufficient notice of the sale to
petitioner Nelson. The thirty-day redemption period commenced in
1993, after petitioner Nelson sought the barangay conciliation
process to redeem his property. By January 12, 1995, when
petitioner Nelson filed a complaint for legal redemption and
damages, it is clear that the thirty-day period had already expired.
As in Alonzo, the Court, after due consideration of the facts of the
instant case, hereby interprets the law in a way that will render
justice. 15
Petitioner Nelson, as correctly held by the Court of Appeals, can
no longer redeem subject property. But he and his mother remain
co-owners thereof with respondents-spouses. Accordingly, title to
subject property must include them.
IN VIEW WHEREOF, the petition is DENIED. The assailed
decision and resolution of the Court of Appeals of October 27,
2003 and February 23, 2004 are AFFIRMED WITH
MODIFICATION. The Register of Deeds of Southern Leyte is
ORDERED to cancel Original Certificate of Title No. 17035 and to
issue in lieu thereof a new certificate of title in the name of
respondents-spouses Jesus and Anunciacion Feliano for the 6/7
portion, and petitioner Nelson Cabales and his mother for the
remaining 1/7 portion, pro indiviso.
SO ORDERED.
||| (Cabales v. Court of Appeals, G.R. No. 162421, [August 31,
2007], 558 PHIL 450-465)
TAGHOY v. TIGOL
THIRD DIVISION
[G.R. No. 159665. August 3, 2010.]
9:48 A.M.
ANSELMO TAGHOY and the late VICENTA T. APA,
substituted by her heirs, namely, MANUEL T. APA, NICASIO
T. APA, DELFIN T. APA, ALMA A. JACALAN, ARLENE A.
SUMALINOG, AIDA A. ARONG, ELENA A. COSEP, ALFREDO
T. APA, ISABELO T. APA, JR., ISABELO T. APA III, SHERWIN
T. APA, and FLORITO T. APA, petitioners, vs. SPS.
FELIXBERTO TIGOL, JR. and ROSITA TIGOL, respondents.
DECISION
BRION, J p:
We resolve the present petition for review on certiorari 1 filed by
petitioners Anselmo Taghoy and the heirs of Vicenta T.
Apa (petitioners) to challenge the decision 2 and the
resolution 3 of the Court of Appeals (CA) in CA-G.R. CV No.
54385. 4 The CA decision set aside the decision 5 of the Regional
Trial Court (RTC), Branch 27, Lapu-lapu City in Civil Case No.
2247. The CA resolution denied the petitioners' subsequent
motion for reconsideration. EICDSA
FACTUAL BACKGROUND
The facts of the case, gathered from the records, are briefly
summarized below.
Spouses Filomeno Taghoy and Margarita Amit 6 owned an 11,067
square meter parcel of land, known as Lot 3635-B of subdivision
plan (LRC) Psd-212881 (subject property), located in Barrio Agus,
Lapu-Lapu City, Cebu under Transfer Certificate of Title (TCT) No.
6466 of the Lapu-Lapu City Registry of Deeds. 7
On August 6, 1975, Filomeno and Margarita 8 executed a special
power of attorney, appointing Felixberto Tigol, Jr. as their attorney-
in-fact. 9 On August 21, 1975, Felixberto, as attorney-in-fact,
executed a real estate mortgage over the subject property to
secure a loan of P22,000.00 with the Philippine National
Bank (PNB). 10 Filomeno and Margarita obtained the loan to
finance the shellcraft business of their children. 11
Filomeno died intestate on February 12, 1976. On July 27, 1979,
his widow, Margarita, and their seven children, namely, Vicenta,
Felisa, Pantaleon, Gaudencio, Anselmo, Anastacia and Rosita, as
heirs of the deceased, executed a Deed of Extrajudicial Settlement
and Sale, adjudicating to themselves the subject property and
selling the same to Rosita and her husband
Felixberto (respondents) for P1,000.00. 12
Subsequently, on September 7, 1981 and August 10, 1982,
Filomeno's heirs executed two (2) Deeds of Confirmation of Sale,
confirming the supposed sale of the subject property by Filomeno
and Margarita in favor of the respondents for
P1,000.00. 13 Simultaneous with the execution of the deeds,
however, the respondents executed explanatory Joint Affidavits
attesting that the sale was without any consideration, and was only
executed to secure a loan. 14
On March 9, 1983, TCT No. 13250 was issued in the respondents'
names. 15 On July 1, 1983, the respondents obtained a
P70,000.00 loan with the Philippine Banking Corporation, secured
by a real estate mortgage on the subject property. 16 AEDcIH
Seven (7) years later, on April 17, 1990, Anselmo and Vicenta,
together with Margarita, Felisa, Gaudencio, and Pantaleon's
surviving heir, Annabel, filed a complaint against the respondents
and Anastacia for declaration of nullity of the respondents' TCT
and for judicial partition. 17 They alleged that the deeds of
confirmation of sale became the bases for the transfer of the title
in the respondents' names, but the sale was fictitious or simulated,
as evidenced by the respondents' own explanatory joint affidavits
attesting that the transfer was for the purpose only of convenience
in securing a loan, not for absolute conveyance or sale.
The respondents admitted that they executed the joint affidavits
but countered that they acquired a valid title to the subject property
through the Extrajudicial Settlement of Heirs and Sale. They
claimed that when Filomeno died without the PNB loan being paid,
the heirs agreed that the respondents will advance payment of the
loan, subject to reimbursement, to save the foreclosure of the
subject property; the heirs then executed the Extrajudicial
Settlement and Sale in the respondents' favor as their way of
reimbursing the amount the latter paid; the respondents executed
the joint affidavits out of generosity, expressing their willingness to
be reimbursed, but when the heirs failed to reimburse the amounts
advanced by them, then they caused the registration of the title in
their names. 18
Margarita, Felisa, Gaudencio and Annabel failed to appear at the
initial hearing, prompting the petitioners' counsel to manifest that,
except for Anselmo and Vicenta, they were abandoning the
complaint. 19 The petitioners subsequently amended the
complaint to implead Margarita, Felisa, Gaudencio and Annabel
as party defendants or unwilling plaintiffs. 20
THE RTC RULING
In its decision, the RTC found that the sale of the subject property
was absolutely simulated since the deeds of confirmation of sale
were executed only to accommodate the respondents' loan
application using the subject property as collateral. The lower court
thus ordered the nullification of the respondents' title. It likewise
ordered the partition of the subject property after reimbursement
of the amount the respondents paid for the loan. 21
Subsequently, the respondents filed a motion for new trial,
anchored on newly discovered evidence allegedly proving that the
subject property is Margarita's paraphernal property. 22 When the
RTC denied 23 the motion for new trial, the respondents filed an
appeal with the CA, under Rule 41 of the Rules of Court. DHEACI
THE CA RULING
The CA decided the appeal on August 26, 2002, reversing the
RTC decision. Relying upon Margarita's testimony that the
respondents paid the loan, the CA found that the contract between
the parties was relatively simulated; the respondents' payment of
the PNB loan was the real consideration for the transfer of title.
After the CA denied 24 the motion for reconsideration 25 that
followed, the petitioners filed the present petition.
THE PETITION
The petitioners argue that the heirs, in executing the extrajudicial
settlement, did not intend to divest themselves of their respective
rightful shares, interests and participation in the subject property
because it lacked a consideration, as affirmed by the respondents'
own joint affidavits; the payment of the PNB loan could not be a
valid consideration for the transfer since the loan was still unpaid
and outstanding at the time of the execution of the extrajudicial
settlement. 26
THE CASE FOR THE RESPONDENTS
The respondents, on the other hand, maintain that the Extrajudicial
Settlement and Sale was the basis of their registration of title, and
their payment of the PNB loan was the real consideration for the
transfer; the joint affidavits were executed only out of generosity
and kindness, subject to the heirs' reimbursement of the amounts
they paid for the loan, such that when the heirs did not reimburse
the amounts paid, they then caused the registration of title in their
names. 27
THE ISSUE
The core issue boils down to whether the sale of the subject
property between the parties was absolutely or relatively
simulated.
OUR RULING
We find the petition meritorious.
This Court is not a trier of facts. However, if the inference drawn
by the appellate court from the facts is manifestly mistaken, as in
the present case, we can review the evidence to allow us to arrive
at the correct factual conclusions based on the record. 28 IHCacT
In the interpretation of contracts, the intention of the parties is
accorded primordial consideration; 29 such intention is
determined from the express terms of their agreement, 30 as well
as their contemporaneous and subsequent acts. 31 When the
parties do not intend to be bound at all, the contract is absolutely
simulated; if the parties conceal their true agreement, then the
contract is relatively simulated. 32 An absolutely simulated
contract is void, and the parties may recover from each other what
they may have given under the simulated contract, while a
relatively simulated contract is valid and enforceable as the parties'
real agreement binds them. 33 Characteristic of simulation is that
the apparent contract is not really desired or intended to produce
legal effects, or in any way, alter the juridical situation of the
parties. 34
In the present case, the parties never intended to be bound by their
agreement as revealed by the two (2) joint affidavits executed by
the respondents simultaneous with the execution of the deeds of
confirmation of sale. The September 7, 1981 Joint Affidavit stated:
2. That the truth of the matter is that the deed of sale and the
confirmation of said sale by the legal heirs are executed for the
purpose of securing a loan in our name but which amount of said
loan shall be divided equally among the legal heirs, and that every
heir shall pay his corresponding share in the amortization payment
of said loan;
3. That said sale was without any consideration, and that we
executed this affidavit to establish the aforestated facts for
purposes of loan only but not for conveyance and transfer in our
name absolutely and forever but during the duration of the
terms of the loan;
4. That we executed this affidavit voluntarily and freely in order to
establish this facts (sic) above-mentioned and to undertake to
return the said land to the legal heirs of the late spouse,
Filomeno Taghoy, survived by his widow, Rita Amit-Taghoy, upon
full payment of our intended loan. 35
The August 10, 1982 Joint Affidavit, on the other hand, averred:
3. That the truth of the matter is that said Lot No. 3635-B was sold
without any purchase price or consideration paid to said
Filomeno Taghoy, but for the purpose of securing a loan in our
name but which amount of said loan shall be divided equally
among us, the legal heirs of Filomeno Taghoy; DAaIEc
4. That in case the loan will be fully paid, we shall obligate
ourselves to resell, reconvey the said Lot No. 3635-B in favor of
the Heirs of Filomeno Taghoy and Rita Amit, and in case, the said
loan will not be post (sic) through.
5. That we executed this affidavit voluntarily and freely in order to
establish the aforestated facts and to attest the fact that said deed
of confirmation of sale is only for purposes of convenience in
securing the loan and not for absolute conveyance or sale. 36
The joint affidavits are very solid pieces of evidence in the
petitioners' favor. They constitute admissions against interest
made by the respondents under oath. An admission against
interest is the best evidence that affords the greatest certainty of
the facts in dispute, 37 based on the presumption that no man
would declare anything against himself unless such declaration is
true. 38 It is fair to presume that the declaration corresponds with
the truth, and it is his fault if it does not. 39
Thus, by the respondents' own admissions, they never intended to
be bound by the sale; they merely executed the documents for
convenience in securing a bank loan, and they agreed to reconvey
the subject property upon payment of the loan. The sale was
absolutely simulated and, therefore, void.
We find that the CA misappreciated Margarita's testimony that the
respondents are entitled to the entire property because they
redeemed or paid the bank loan. 40 The failure of the other heirs
to reimburse the amounts advanced by the respondents in
payment of the loan did not entitle the latter to claim full ownership
of the co-owned property. 41 It only gave them the right to claim
reimbursement for the amounts they advanced in behalf of the co-
ownership. The respondents' advance payments are in the nature
of necessary expenses for the preservation of the co-ownership.
Article 488 of the Civil Code provides that necessary expenses
may be incurred by one co-owner, subject to his right to collect
reimbursement from the remaining co-owners. 42 Until
reimbursed, the respondents hold a lien upon the subject property
for the amount they advanced. cSDHEC
Based on the foregoing, we find that the CA erred in setting aside
the decision of the RTC and in dismissing the petitioners'
complaint against the respondents.
WHEREFORE, we hereby REVERSE and SET ASIDE the
decision dated August 26, 2002 and the resolution dated July 22,
2003 of the Court of Appeals in CA-G.R. CV No. 54385. The
decision dated February 23, 1994 of the Regional Trial Court,
Branch 27, Lapu-Lapu City in Civil Case No. 2247
is REINSTATED. No pronouncement as to costs.
SO ORDERED.
||| (Taghoy v. Spouses Tigol, Jr., G.R. No. 159665, [August 3,
2010], 640 PHIL 385-396)
BASBAS v. SAYSON
FIRST DIVISION
[G.R. No. 172660. August 24, 2011.]
EUGENIO BASBAS, TEOFILO ARAS, RUFINO ARAS,
GERVACIO BASBAS, ISMAEL ARAS, EUGENIO ARAS,
SIMFRONIO ARAS, FELICIANO ARAS, ROSITA ARAS,
EUGENIO BASBAS, JR. and SPOUSES PABLITO BASARTE
and MARCELINA BASBAS BASARTE, petitioners, vs.
BEATA SAYSON and ROBERTO SAYSON, JR.,respondents.
DECISION
DEL CASTILLO, J p:
Petitioners seek to prevent the revival of a judgment rendered in
favor of the respondents more than two decades back.
This Petition for Review on Certiorari assails the February 17,
2004 Decision 1 of the Court of Appeals (CA) in CA-G.R. CV No.
72385 which denied the appeal filed before it and affirmed in
toto the May 21, 2001 Order 2 of the Regional Trial Court of
Ormoc City, Branch 35. Also assailed is the April 19, 2006
Resolution 3 denying the Motion for Reconsideration thereto.
Factual Antecedents
On September 2, 1976, respondent Beata Sayson (Beata) and her
husband Roberto Sayson, Sr. (Roberto, Sr.) filed a Petition for
Registration of an agricultural land located in Cagbatang,
Balagtas, Matag-ob, Leyte docketed as Land Registration Case
No. 0-177. The said application was opposed by the Republic of
the Philippines and herein petitioners Eugenio Basbas (Eugenio,
Sr.), Teofilo Aras (Teofilo) and Rufino Aras (Rufino). On March 22,
1979, the Court of First Instance (CFI) of Leyte, Branch V (Ormoc
City) rendered a Decision adjudicating to the spouses Sayson said
agricultural land and approving its registration under their
names. 4 cADaIH
The oppositors filed their appeal to the CA docketed as CA-G.R.
No. 66541. In a Decision 5 dated July 24, 1985, the appellate court
affirmed in toto the Decision of the CFI. This CA Decision became
final and executory on August 21, 1985 6 and, accordingly, a Writ
of Possession was issued on November 21, 1985, which was
never implemented.
The following year or on September 17, 1986, Original Certificate
of Title (OCT) No. 2496 7 was issued to the
spouses Sayson pursuant to the March 22, 1979 CFI Decision. An
Alias Writ of Possession was issued on April 6, 1989 but this could
also not be implemented in view of the refusal of Eugenio, Sr. and
his son Eugenio Basbas, Jr. (Eugenio, Jr.). Claiming that the land
they occupied is not the same land subject of the CFI
Decision, 8 they demanded that a relocation survey be conducted.
Hence, a relocation survey was conducted by order of the
Regional Trial Court (RTC), Branch 12, Ormoc City. 9
In an Order 10 dated September 13, 1989, the RTC approved the
Commissioner's Report 11 on the relocation survey and ordered
the original oppositors, petitioners Eugenio, Sr., Teofilo and
Rufino, as well as their co-petitioners herein
Gervacio Basbas (Gervacio), Ismael Aras (Ismael), Eugenio Aras
(Eugenio), Simfronio Aras (Simfronio), Feliciano Aras (Feliciano),
Rosita Aras (Rosita) and Eugenio, Jr. to vacate the subject
property, viz.:
[R]espondents are directed to vacate the portion of Lot No. 1, Psu-
08-000235 covered by OCT No. 2496 and subject of the final
decree of registration which, [up to the] present, said respondents
are still possessing pursuant to the final and executory judgment
of the Court of Appeals and as particularly defined in the
Commissioner's report submitted on August 3, 1989 . . . .
Respondents are reminded that under Rule 71 of the New Rules
of Court, failure on their part to so obey this order may make them
liable for contempt of this Court.
SO ORDERED. 12
Gervacio, Ismael, Eugenio, Simfronio, Feliciano, Rosita and
Eugenio, Jr., although not oppositors in CA-G.R. No. 66541, were
likewise ordered to vacate the property in view of the following
pronouncement in the RTC's September 13, 1989 Order:
It appearing from the records that respondents Eugenio Basbas,
Teofilo Aras, Gervacio Basbas, Rufino Aras, Ismael Aras,
Eugenio Aras, Simfronio Aras, Feliciano Aras, Rosita Aras
and Eugenio Basbas[,] Jr. are parties to the present case,
they having been the principal oppositors to the petition filed
by the applicants as shown in the records, pages 34, 35 and
36, Vol. 1 . . . 13 (Emphasis supplied.)
This September 13, 1989 Order was, however, not implemented
within the five-year period from the time it became final. 14 Hence,
respondent Beata and her son Roberto Sayson, Jr. (Roberto, Jr.),
as successor-in-interest of the late Roberto, Sr., filed on August
18, 1995 a Complaint for Revival of Judgment 15 before the RTC
of Ormoc City, Branch 12, 16 docketed as Civil Case No. 3312-0.
Impleaded as defendants were Eugenio, Sr., Teofilo, Rufino,
Gervacio, Ismael, Eugenio, Simfronio, Feliciano, Rosita, and
Eugenio, Jr. Petitioner-spouses Pablito Basarte and
Marcelina Basbas-Sabarte 17 (spouses Basarte), who, although
not identified in the September 13, 1989 Order as principal
oppositors in the land registration case, were likewise impleaded
as defendants since they also allegedly harvested, processed, and
sold the coconuts found in the subject property.
Upon receipt of summons, Gervacio, Rufino, Ismael, Eugenio,
Feliciano, Rosita and Eugenio, Jr. filed a Motion to Dismiss 18 on
the ground that the Complaint states no cause of action. This was,
however, denied 19 so the same set of petitioners, except for
Feliciano, filed an Answer with Counterclaim. 20
In their Answer with counterclaim, said petitioners admitted the
allegations in paragraphs 4, 5, 6, 7, 8, 9, 10, 11 and 12 of
respondents' Complaint which state that: DIcSHE
xxx xxx xxx
4. On March 22, 1979, the Honorable Judge Numeriano Estenzo
rendered a decision in the above-mentioned Land Registration
[c]ase in favor of the petitioners . . . and against the oppositors, the
dispositive portion of said decision reads:
'WHEREFORE, decision is hereby rendered . . . [and] the land
described under Plan PSU-08-000235 dated September 10, 1973
of Geodetic Engineer Nestorio Encenzo already APPROVED by
the Acting Regional Director on June 27, 1974 is hereby
adjudicated and registered in the names of the Spouses
ROBERTO SAYSON and BEATA O. SAYSON, of legal ages,
Filipinos, spouses and residents of Campokpok, Tabango, Leyte,
Philippines and as soon as this decision becomes final, let a
decree of registration be issued by the Land Registration
Commission.
SO ORDERED.' (. . .)
5. From the above decision the oppositors (defendants herein)
appealed;
6. On July 24, 1985, the Honorable Court of Appeals rendered its
decision, the dispositive portion [of which] reads:
'WHEREFORE, PREMISES CONSIDERED, finding no merit in
this appeal the decision appealed from is hereby AFFIRMED in
toto.
SO ORDERED.'
and the said decision has become final and executory on August
21, 1985 per Entry of Judgment issued by the Court of Appeals . .
..
7. That consequently, on September 17, 1986 an Original
Certificate of Title No. N-2496 was issued in the names of
Roberto Sayson and Beata O. Sayson, pursuant to Decree No. N-
191615, by the Register of Deeds for the Province of Leyte;
8. That on motion, the Honorable Court, on November 21, 1985,
issued a Writ of Possession which for some reason or [another]
was not satisfied, so that the Honorable Court, on April 7, 1989
acting on an ex-parte motion dated April 6, 1989 directed the
issuance of an Alias Writ of Possession;
9. That the Deputy Sheriff of this Court, Mr. Placid[o] Cayco
tendered the Alias Writ of Possession to the oppositors,
particularly to Mr. Eugenio Basbas, Sr. and Eugenio Basbas, Jr.
who, as the Deputy Sheriff stated in his Progress Report dated
May 18, 1989 'did not believe and obey the CFI Decision and the
decision of the Court of Appeals' and '. . . [t]hey demanded a
relocation survey to determine the exact location of applicants'
(complainant[s] herein) property described in the alias writ of
possession.' . . .;
10. That on June 16, 1989, the Honorable Court, acting on the
Progress Report of Deputy Sheriff Placido Cayco, issued an Order
on even date appointing Geodetic Engineer Jose A. Tahil as Court
Commissioner specifically 'to relocate Lot No. 1, Plan Psu-08-
000235, LRC No. 0-177, Land Reg. Record No. N51830 . . .' This
Order was dictated in open court in the presence of Mr.
Eugenio Basbas, Sr. and Eugenio Basbas, Jr. who had both
objected to the Writ of Possession, and their counsel Atty.
Evargisto Escalon, and Attorney Demetrio D. Sarit, counsel for the
applicants. . . .
11. That pursuant to the [O]rder dated June 16, 1989 . . . the Court
assigned Commissioner, Engr. Jose A. Tahil, submitted his report
stating that 'the job assigned to the commissioner was already fully
and peacefully accomplished; that his 'findings [show] that all
points are existing and intact on the field except . . . corner 3 of
said lot . . . which at present [is] already defined and indicated on
the ground.' The commissioner also attached a Sketch Plan of the
land to his report. . . .
12. That, finally, the Honorable Court, on September 13, 1989
issued an Order approving the Commissioner's Report and further
stated:
[R]espondents (defendants herein) are directed to vacate the
portion of Lot No. 1, Psu-08-000235 covered by OCT No. 2496
and subject of final decree of registration which, until [the] present,
said respondents are still possessing, pursuant to the final and
executory judgment of the Court of Appeals and as particularly
[defined] in the Commissioner's Report submitted on August 3,
1989 . . .
Respondents are reminded that under Rule 71 of the New Rules
of Court, failure on their part to so obey this Order may make them
liable for contempt of this Court. 21
However, petitioners admitted but denied in part:
1) paragraphs 2 and 3, insofar as they alleged that they were all
oppositors to the land registration case when only Eugenio, Sr.,
Teofilo and Rufino were the oppositors therein; and
2) paragraph 14, with respect to the allegation on the retirement of
the Deputy Sheriff and the heart condition of the Clerk of Court, for
lack of sufficient knowledge and information sufficient to form a
belief thereon.
On the other hand, they specifically denied:
1) paragraph 13, on the ground that they have the right of
ownership and/or possession over the subject property; and
2) paragraph 15, on the ground that the property they are
cultivating is owned by them, hence, respondents cannot suffer
losses and damages.
Paragraphs 2, 3, 13, 14 and 15 alluded to in the foregoing are as
follows:
2. All the defendants named above are . . . of legal age and are
residents of Balagtas, Matag-ob, Leyte where they may be served
summons and other court processes; while defendant-spouses
Pablito Basarte and Marcelina Basbas Basarte were not named
as among the oppositors in the land registration case whose
decision is herein sought to be revived, said spouses are
nonetheless participating in the harvest, processing and sale of
the coconuts with the other defendants named above; HTCaAD
3. Plaintiffs Beata Sayson and her late husband,
Roberto Sayson are petitioners in Land Registration Case No. 0-
177 for the registration of a parcel of agricultural land situated in
Barrio Balagtas, Matag-ob, Leyte, filed on September 2, 1976 with
the then Court of First Instance of Leyte, Branch V, Ormoc City.
The above-named defendants, namely: Eugenio Basbas, Teofilo
Aras, Gervacio Basbas, Rufino Aras, Ismael Aras, Eugenio Aras,
Simfronio Aras, Feliciano Aras, Rosita Aras and Eugenio Basbas,
Jr. were oppositors to the application; 22
xxx xxx xxx
13. That despite this admonition in the [September 13, 1989]
[O]rder that they could be cited for contempt of Court, the
respondents, defendants herein, had continuously defied the
same and this notwithstanding the fact that it was upon their own
demands and insistence that a relocation survey be made on the
premises subject of this case before they would obey the alias writ
of possession . . . and that the finding[s] of the Court[-]appointed
Commissioner Engr. Jose A. Tahil show that the oppositors-
respondents did [encroach] on the land of plaintiffs herein;
14. That this [September 13, 1989] Order however was not
implemented thru a Writ of Execution within the five-year period
from the time the Order became final because of the retirement of
Deputy Sheriff Placido Cayco and by reason also of the fact that
the then Clerk of Court, Atty. Constantino A. Trias, Jr. who was
also the ex-officio Provincial Sheriff was not physically fit to hike
thru the mountains and hills of Brgy. Balagtas where the property
and the defendants therein reside due to his heart condition;
15. That despite their knowledge of the Court['s] [September 13,
1989] Order, the same [having been] dictated in open court, the
respondents had continued to occupy the land of the plaintiffs and
for more than five (5) years since this Order for them to vacate the
land in question was issued, they had harvested the coconuts
growing thereon and such other produce of the land herein
involved. And until the decision of the Court of Appeals is
executed, plaintiff will continue to suffer losses and damages by
reason of defendants' unlawful occupation and possession and
their continued harvesting of the produce of this land of the herein
plaintiffs. 23
By way of special and affirmative defenses, said petitioners
contended that the Order sought to be revived is not the
"judgment" contemplated under Section 6, Rule 39 of the Rules of
Court, hence the action for revival of judgment is improper. Also,
except for Rufino, petitioners averred that they cannot be made
parties to the complaint for revival of judgment as they were not
parties to the land registration case. They thus believed that the
September 13, 1989 Order sought to be revived is not binding
upon them and hence, the complaint states no cause of action with
respect to them. As to the counterclaim, petitioners prayed that
respondents pay them moral and exemplary damages, attorney's
fees and litigation expenses.
Pre-trial conference was thereafter set 24 but since not all
petitioners were served with summons, this was reset and alias
summons was issued and served upon Simfronio and the spouses
Basarte. 25 Upon receipt of summons, Simfronio adopted the
Answer with Counterclaim of Gervacio, Rufino, Ismael, Eugenio,
Feliciano, Rosita and Eugenio, Jr. 26while the spouses Basarte
filed a Motion to Dismiss 27 on the ground of lack of cause of
action. As said motion was also denied, 28 the spouses Basarte
later filed a Manifestation 29 that they were also adopting the
Answer with Counterclaim filed by Gervacio and the others.
During the pre-trial conference on July 14, 1999, the RTC issued
an Order 30 which provides in part, viz.:
In today's pre-trial conference, manifestations and counter-
manifestations were exchanged. All the parties and their counsels
are present. . . . [P]laintiffs' counsel presented a Special Power
of Attorney by Beata Sayson but the Court observed that
same was not duly acknowledged before the Philippine
Consulate or Embassy in Canada. However, this matter is not
so important[.] [W]hen the Court tried to dig and discuss with the
parties on their real positions, it turned out that the plaintiffs are
seeking revival of the previous final judgment, the original
parties of which were Eugenio Basbas, Teofilo Aras and
Rufino Aras. Eugenio and Teofilo are all dead, leaving Rufino
Aras alive. It is quite complicated considering that in this
action, the plaintiffs relied on the Order of this Court penned
by the previous judge dated September 13, 1989 which was
made after or consequent to the final judgment
aforementioned, wherein the names of the other defendants
were mentioned in the body thereof. After considering the
merits of the various contentions, the Court is of the view that
the complaint had to limit itself to the names of the original
parties appearing in the original judgment now being sought
for revival. The interest of the plaintiffs in seeking implementation
or execution of the judgment sought to be revived which would
involve the other defendants can be taken when the judgment shall
have been revived. CHaDIT
In this connection therefore and as part of the matters to be made
part in the pre-trial conference, in the exercise of the authority
granted to it by law, this Court directs the plaintiffs to make the
necessary amendment and/or to submit a manifestation first
to this Court on the point above raised regarding amendment
of the designation of the parties having in mind the objection of
the defendants who manifested that should there be an
amendment, this counter-claim shall be disregarded since they
were brought in unnecessarily in this kind of action.
Plaintiffs therefore are given a period of ten (10) days from today
within which to submit the requisite manifestation furnishing copy
thereof to the defendant who upon receipt shall also be given a
period of ten (10) days within which this Court will make the
necessary resolution before allowing any amendment.
Hold the pre-trial conference in abeyance.
SO ORDERED. 31 (Emphasis supplied.)
In their Manifestation with Prayer, 32 respondents informed the
RTC about the death of Eugenio, Sr. and Teofilo who were
oppositors in the land registration case and the substitution by their
heirs, namely, Gervacio, Marcelina Basbas Basarte, 33 and
Eugenio, Jr. for Eugenio, Sr. and Ismael, Vicente, Ligaya Aras
(Ligaya), Rosendo Aras (Rosendo) and Daina Aras (Daina) for
Teofilo. Respondents prayed that their manifestation be
considered for the purpose of determining the proper parties to the
case. Despite petitioners' Counter-Manifestation, 34 the RTC
issued the following Order 35 on May 15, 1999:
The Manifestation of plaintiffs and the Counter-Manifestation of
defendants having already been submitted and duly noted, the
Court hereby directs that henceforth in the denomination of this
case, the names of the original parties, Eugenio Basbas and
Teofilo Aras (in Land Registration Case No. 0-177) shall still
remain to be so stated as defendants for purposes of the present
case but with additional names of their respective heirs to be
included and stated immediately after each name as heirs in
substitution, namely: for Eugenio Basbas 1) Gervacio Basbas,
2) Marcelina Basbas Basarte, and 3) Eugenio Basbas, Jr.; and for
Teofilo Aras 1) Ismael Aras, 2) Vicente Aras, 3) Ligaya Aras, 4)
Rosendo Aras, and 5) Daina Aras.
Since from the records, only Gervacio Basbas, Eugenio Basbas,
Jr. and Ismael Aras were duly served with summons, the Branch
Clerk of Court is hereby directed to serve summons on the other
heirs, namely: Marcelina Basbas Basarte, Vicente Aras, Ligaya
Aras, Rosendo Aras, and Daina Aras.
xxx xxx xxx 36
After summons were served, Vicente, Rosendo, Ligaya and Daina
were, however, declared in default for not filing any responsive
pleading. 37 On February 2, 2001, the RTC issued a Pre-Trial
Order 38 where the controverted stipulations and issues to be
tried, among others, were enumerated as follows:
Controverted Stipulations:
1. That defendants are not enjoying the produce of the land
because there are period[s] wherein the fruits were subject of theft
and the same is now pending at the Municipal Trial Court of Matag-
ob;
2. That [even] before the start of the original case, the original
defendants referring to the late Eugenio Basbas, Sr. and Teofilo
Aras, [and] Rufino Aras were occupying the property and they
were succeeded by the respective heirs of the deceased
Eugenio Basbas, Sr. and Teofilo Aras [sic];
3. That plaintiff Teofilo Aras, Sr. has a daughter named Fedeliza
Aras;
Issues
1. Whether . . . the plaintiffs are entitled to revival of judgment in
the earlier [land registration] case;
2. Whether . . . the defendants except for defendant Rufino Aras
are the proper parties in the present action;
3. Whether . . . the complaint states a cause of action;
4. Whether . . . defendants are entitled to their counterclaim,
and; TIDHCc
5. Whether judgment on the pleadings is allowed or is tenable. 39
Respondents subsequently filed an Omnibus Motion for Judgment
on the Pleadings and/or Summary Judgment. 40 They contended
that since petitioners' Answer failed to tender an issue, they having
expressly admitted the material allegations in the complaint,
particularly paragraphs 4 to 12, a judgment on the pleadings or
summary judgment is proper.
Petitioners filed an Opposition Re: Omnibus Motion for Judgment
on the Pleadings and/or Summary Judgment and Memorandum
Re: Failure of Plaintiff Beata Sayson to Appear in the Pre-trial
Conference. 41 They argued that the case cannot be decided
based on the pleadings nor through summary judgment
considering that the controverted stipulations and issues defined
in the Pre-Trial Order must be proven by evidence. In addition,
they questioned the Special Power of Attorney (SPA) executed by
Beata in Canada empowering her son Roberto, Jr. to appear on
her behalf in the pre-trial conference. They argued that since said
SPA has not been authenticated by a Philippine Consulate official,
it is not sufficient authorization and hence, Beata cannot be
considered to have attended the pre-trial conference. The case
must, therefore, be dismissed insofar as she is concerned.
Ruling of the Regional Trial Court
In resolving respondents' Omnibus Motion for Judgment on the
Pleadings and/or Summary Judgment, the RTC found that
petitioners' Answer does not essentially tender an issue since the
material allegations of the Complaint were admitted. Hence, said
court issued an Order 42 dated May 21, 2001, the dispositive
portion of which reads:
Wherefore, finding merit in the motion, judgment is hereby
rendered for and in favor of the plaintiffs and against the
defendants ordering the revival of the decision of the Court of
Appeals promulgated on July 24, 1985 affirming the decree of
registration of this Court in the decision of the Land Registration
Case No. 0-177 dated March 22, 1979, and of the final Order of
this Court dated September 13, 1989 and upon finality of this
Order, ordering the issuance of Writ of Possession for the lot made
subject of the decision. Without pronouncement as to costs.
SO ORDERED. 43
Petitioners thus filed a Notice of Appeal 44 which was approved in
an Order dated June 06, 2001. 45
Ruling of the Court of Appeals
Finding no merit in the appeal, the CA denied the same in a
Decision 46 dated February 17, 2004. It noted that petitioners'
Answer admitted almost all of the allegations in respondents'
complaint. Hence, the RTC committed no reversible error when it
granted respondents' Motion for Judgment on the Pleadings
and/or Summary Judgment. The appellate court likewise found
untenable the issue as regards the failure of the complaint to state
a cause of action. To the appellate court, petitioners' refusal to
vacate the subject property despite the final and executory
Decision of the CA in the land registration case and the September
13, 1989 Order of the RTC for them to vacate the same, clearly
support respondents' cause of action against them. Also contrary
to petitioners' posture, the September 13, 1989 Order is a final
order as it finally disposed of the controversy between the parties
in the land registration case. The CA likewise found the SPA
executed by Beata in favor of Roberto, Jr. as valid, hence, she was
duly represented during the pre-trial conference. The dispositive
portion of said CA Decision reads:
WHEREFORE, premises considered, the present appeal is
DENIED. The May 21, 2001 Decision of the Regional Trial Court
of Ormoc City, Branch 35 is AFFIRMED.
SO ORDERED. 47
Their Motion for Reconsideration 48 having been denied in a
Resolution 49 dated April 19, 2006, petitioners are now before this
Court through the present Petition for Review
on Certiorari. CAaDTH
Issues
Petitioners impute upon the CA the following errors:
1. The Honorable Court of Appeals clearly committed serious
errors of law in its decision and Resolution dated February 17,
2004 and April 19, 2006 when it affirmed the Order of the Regional
Trial Court dated May 21, 2001 and declared that no reversible
error was committed by the Regional Trial Court of Ormoc City in
granting respondents' motion for judgment on the pleadings and/or
summary judgment;
2. The Honorable Court of Appeals clearly committed serious
errors of law in its Decision and Resolution dated February 17,
2004 and April 19, 2006 when it affirmed the Order of the Regional
Trial Court of Ormoc City dated May 21, 2001 and declared that
petitioners' argument that respondents' complaint failed to state a
cause of action has no merit.
3. The Honorable Court of Appeals clearly committed serious
errors of law when it affirmed the Order of the Regional Trial Court
of Ormoc City which ordered the revival of the Judgment of this
Court of Appeals in CA-G.R. No. 66541 entitled Beata Sayson and
Roberto Sayson vs. Eugenio Basbas, et al., despite the fact that
this was not the judgment sought to be revived in Civil Case No.
3312-0;
4. The Honorable Court of Appeals clearly committed serious
errors of law in ruling that the duly notarized Special Power of
Attorney in favor of Roberto Sayson[,] Jr. is valid and the latter is
authorized to represent his mother, Beata Sayson[,] which is
contrary to the ruling in the case of ANGELITA LOPEZ,
represented by PRISCILLA L. TY vs. COURT OF APPEALS,
REGIONAL TRIAL COURT OF QUEZON CITY . . . (G.R. No.
77008, December 29, 1987). 50
The Parties' Arguments
Petitioners insist that a judgment on the pleadings or a summary
judgment is not proper in this case since the controverted
stipulations and the first three issues enumerated in the pre-trial
order involve facts which must be threshed out during trial. They
also claim that the Complaint for Revival of Judgment states no
cause of action because the September 13, 1989 Order which it
sought to revive is not the "judgment" contemplated under Section
6, Rule 39 of the Rules of Court and, therefore, cannot be the
subject of such an action. Moreover, they argue that the CA
Decision in the land registration case should not have been
revived as same was not prayed for in the Complaint for Revival
of Judgment. Lastly, petitioners assail the SPA which authorized
Roberto, Jr. to represent his mother, Beata, during the pre-trial
conference, it not having been authenticated by a Philippine
consulate officer in Canada where it was executed. Citing Lopez v.
Court of Appeals, 51 they contend that said document cannot be
admitted in evidence and hence, Beata was not duly represented
during said pre-trial conference. The case, therefore, should have
been dismissed insofar as she is concerned.
For their part, respondents point out that the RTC's basis in
granting the Motion for Judgment on the Pleadings and/or
Summary Judgment was petitioners' admission of practically all
the material allegations in the complaint. They aver that Section 1,
Rule 34 of the Rules of Court clearly provides that where an
answer fails to tender an issue or otherwise admits the material
allegations of the adverse party's pleading, the court may, on
motion of that party, direct judgment on the pleadings. Also, the
test for a motion for summary judgment is whether the pleadings,
affidavits or exhibits in support of the motion are sufficient to
overcome the opposing papers and to justify a finding as a matter
of law that there is no defense to the action or the claim is clearly
meritorious. And since, as found by the CA, petitioners' Answer did
not tender an issue and that there is no defense to the action, the
grant of the Motion for Judgment on the Pleadings and/or
Summary Judgment was appropriate. Respondents likewise
contend that if their prayer in the Complaint is taken in its proper
context, it can be deduced that what they were really seeking is
the implementation of the CA Decision dated July 24, 1985 and
the orders ancillary thereto. With respect to the SPA, they submit
that the law does not require that a power of attorney be notarized.
Moreover, Section 4, Rule 18 of the Rules of Court simply requires
that a representative appear fully authorized "in writing". It does
not specify a particular form of authority.
Our Ruling
There is no merit in the petition.
I. The instant case is proper for the rendition of a summary
judgment.
Petitioners principally assail the CA's affirmance of the RTC's
Order granting respondents' Motion for Judgment on the
Pleadings and/or Summary Judgment.
In Tan v. De la Vega, 52 citing Narra Integrated Corporation v.
Court of Appeals, 53 the court distinguished summary judgment
from judgment on the pleadings, viz.:
The existence or appearance of ostensible issues in the pleadings,
on the one hand, and their sham or fictitious character, on the
other, are what distinguish a proper case for summary judgment
from one for a judgment on the pleadings. In a proper case for
judgment on the pleadings, there is no ostensible issue at all
because of the failure of the defending party's answer to raise an
issue. On the other hand, in the case of a summary judgment,
issues apparently exist i.e., facts are asserted in the complaint
regarding which there is as yet no admission, disavowal or
qualification; or specific denials or affirmative defenses are in truth
set out in the answer but the issues thus arising from the
pleadings are sham, fictitious or not genuine, as shown by
affidavits, depositions, or admissions. . . . . TCaEAD
Simply stated, what distinguishes a judgment on the pleadings
from a summary judgment is the presence of issues in the Answer
to the Complaint. When the Answer fails to tender any issue, that
is, if it does not deny the material allegations in the complaint or
admits said material allegations of the adverse party's pleadings
by admitting the truthfulness thereof and/or omitting to deal with
them at all, a judgment on the pleadings is appropriate. 54 On the
other hand, when the Answer specifically denies the material
averments of the complaint or asserts affirmative defenses, or in
other words raises an issue, a summary judgment is proper
provided that the issue raised is not genuine. "A 'genuine issue'
means an issue of fact which calls for the presentation of evidence,
as distinguished from an issue which is fictitious or contrived or
which does not constitute a genuine issue for trial." 55
a) Judgment on the pleadings is not
proper because petitioners' Answer
tendered issues.
In this case, we note that while petitioners' Answer to respondents'
Complaint practically admitted all the material allegations therein,
it nevertheless asserts the affirmative defenses that the action for
revival of judgment is not the proper action and that petitioners are
not the proper parties. As issues obviously arise from these
affirmative defenses, a judgment on the pleadings is clearly
improper in this case.
However, before we consider this case appropriate for the
rendition of summary judgment, an examination of the issues
raised, that is, whether they are genuine issues or not, should first
be made.
b) The issues raised are not genuine
issues, hence rendition of summary
judgment is proper.
To resolve the issues of whether a revival of judgment is the proper
action and whether respondents are the proper parties thereto, the
RTC merely needed to examine the following: 1) the RTC Order
dated September 13, 1989, to determine whether same is a
judgment or final order contemplated under Section 6, Rule 39 of
the Rules of Court; and, 2) the pleadings of the parties and
pertinent portions of the records 56 showing, among others, who
among the respondents were oppositors to the land registration
case, the heirs of such oppositors and the present occupants of
the property. Plainly, these issues could be readily resolved based
on the facts established by the pleadings. A full-blown trial on
these issues will only entail waste of time and resources as they
are clearly not genuine issues requiring presentation of evidence.
Petitioners aver that the RTC should not have granted
respondents' Motion for Judgment on the Pleadings and/or
Summary Judgment because of the controverted stipulations and
the first three issues enumerated in the Pre-trial Order, which,
according to them, require the presentation of evidence. These
stipulations and issues, however, when examined, basically boil
down to questions relating to the propriety of the action resorted to
by respondents, which is revival of judgment, and to the proper
parties thereto the same questions which we have earlier
declared as not constituting genuine issues.
In sum, this Court holds that the instant case is proper for the
rendition of a summary judgment, hence, the CA committed no
error in affirming the May 21, 2001 Order of the RTC granting
respondents' Motion for Judgment on the Pleadings and/or
Summary Judgment.
II. The Complaint states a cause of action.
Petitioners contend that the complaint states no cause of action
since the September 13, 1989 Order sought to be revived is not
the judgment contemplated under Section 6, Rule 39 of the Rules
of Court. They also aver that the RTC erred when it ordered the
revival not only of the September 13, 1989 Order but also of the
July 24, 1985 CA Decision, when what was prayed for in the
complaint was only the revival of the former.
This Court, however, agrees with respondents that these matters
have already been sufficiently addressed by the RTC in its Order
of May 9, 1997 57 and we quote with approval, viz.:
The body of the Complaint as well as the prayer mentioned about
the executory decision of the Court of Appeals promulgated on
July 24, 1985 that had to be finally implemented. So it appears to
this Court that the Complaint does not alone invoke or use as
subject thereof the Order of this Court which would implement the
decision or judgment regarding the land in question. The Rules of
Court referring to the execution of judgment, particularly Rule 39,
Sec. 6, provides a mechanism by which the judgment that had not
been enforced within five (5) years from the date of its entry or
from the date the said judgment has become final and executory
could be enforced. In fact, the rule states: ". . . judgment may be
enforced by action."
So in this Complaint, what is sought is the enforcement of a
judgment and the Order of this Court dated September 13, 1989
is part of the process to enforce that judgment. To the mind of the
Court, therefore, the Complaint sufficiently states a cause of
action. 58
III. Any perceived defect in the SPA would not serve to bar the
case from proceeding.
Anent the SPA, we find that given the particular circumstances in
the case at bar, an SPA is not even necessary such that its efficacy
or the lack of it would not in any way preclude the case from
proceeding. This is because upon Roberto, Sr.'s death, Roberto,
Jr., in succession of his father, became a co-owner of the subject
property together with his mother, Beata. As a co-owner, he may,
by himself alone, bring an action for the recovery of the co-owned
property pursuant to the well-settled principle that "in a co-
ownership, co-owners may bring actions for the recovery of co-
owned property without the necessity of joining all the other co-
owners as co-plaintiffs because the suit is presumed to have been
filed for the benefit of his co-owners." 59 STaAcC
While we note that the present action for revival of judgment is not
an action for recovery, the September 13, 1989 Order sought to
be revived herein ordered the petitioners, among others, to vacate
the subject property pursuant to the final and executory judgment
of the CA affirming the CFI's adjudication of the same in favor of
respondents. This Order was issued after the failure to enforce the
writ of execution and alias writ of execution due to petitioner's
refusal to vacate the property. To this Court's mind, respondent's
purpose in instituting the present action is not only to have the CA
Decision in the land registration case finally implemented but
ultimately, to recover possession thereof from petitioners. This
action is therefore one which Roberto, Jr., as co-owner, can bring
and prosecute alone, on his own behalf and on behalf of his co-
owner, Beata. Hence, a dismissal of the case with respect to Beata
pursuant to Sec. 5, 60 Rule 18 of the Rules of Court will be futile
as the case could nevertheless be continued by Roberto, Jr. in
behalf of the two of them.
WHEREFORE, the Petition of Review
on Certiorari is DENIED and the assailed Decision of the Court of
Appeals dated February 17, 2004 and Resolution dated April 19,
2006 in CA-G.R. CV No. 72385 are AFFIRMED.
SO ORDERED.
||| (Basbas v. Sayson, G.R. No. 172660, [August 24, 2011], 671
PHIL 662-686)
GALANG v. REYES
THIRD DIVISION
[G.R. No. 184746. August 15, 2012.]
SPOUSES CRISPIN GALANG and
CARIDAD GALANG, petitioners, vs. SPOUSES CONRADO
S. REYES AND FE DE KASTRO REYES (As substituted by
their legal heir: Hermenigildo K. Reyes), respondents.
DECISION
MENDOZA, J p:
This petition for review on certiorari under Rule 45 seeks to
reverse and set aside the April 9, 2008 Decision 1 of the Court of
Appeals (CA) and its October 6, 2008 Resolution, 2 in CA-G.R.
CV. No. 85660.
The Facts
On September 4, 1997, spouses Conrado S. Reyes and Fe de
Kastro Reyes (the Reyeses) filed a case for the annulment of
Original Certificate of Title (OCT) No. P-928 against spouses
Crispin and Caridad Galang (the Galangs) with the Regional Trial
Court, Antipolo, Rizal (RTC), docketed as Civil Case No. 97-4560.
In their Complaint, 3 the Reyeses alleged that they owned two
properties: (1) a subdivision project known as Ponderosa Heights
Subdivision (Ponderosa), and (2) an adjoining property covered by
Transfer Certificate of Title (TCT) No. 185252, with an area of
1,201 sq.m.; 4 that the properties were separated by the
Marigman Creek, which dried up sometime in 1980 when it
changed its course and passed through Ponderosa; that the
Galangs, by employing manipulation and fraud, were able to
obtain a certificate of title over the dried up creek bed from the
Department of Environment and Natural Resources (DENR),
through its Provincial Office (PENRO); that, specifically, the
property was denominated as Lot 5735, Cad 29 Ext., Case-1, with
an area of 1,573 sq.m. covered by OCT No. P-928; that they
discovered the existence of the certificate of title sometime in
March 1997 when their caretaker, Federico Enteroso (Enteroso),
informed them that the subject property had been fraudulently
titled in the names of the Galangs; that in 1984, prior to such
discovery, Enteroso applied for the titling of the property, as he
had been occupying it since 1968 and had built his house on it;
that, later, Enteroso requested them to continue the application
because of financial constraints on his part; 5 that they continued
the application, but later learned that the application papers were
lost in the Assessor's Office; 6 and that as the owners of the land
where the new course of water passed, they are entitled to the
ownership of the property to compensate them for the loss of the
land being occupied by the new creek. aICHEc
The Galangs in their Answer 7 denied that the land subject of the
complaint was part of a creek and countered that OCT No. P-928
was issued to them after they had complied with the free patent
requirements of the DENR, through the PENRO; that they and
their predecessor-in-interest had been in possession, occupation,
cultivation, and ownership of the land for quite some time; that the
property described under TCT No. 185252 belonged to
Apolonio Galang, their predecessor-in-interest, under OCT No.
3991; that the property was transferred in the names of the
Reyeses through falsified document; 8 that assuming ex gratia
argumenti that the creek had indeed changed its course and
passed through Ponderosa, the Reyeses had already claimed for
themselves the portion of the dried creek which adjoined and co-
existed with their property; that Enteroso was able to occupy a
portion of their land by means of force, coercion, machinations,
and stealth in 1981; that such unlawful entry was then the subject
of an Accion Publiciana before the RTC of Antipolo City (Branch
72); and that at the time of the filing of the Complaint, the matter
was still subject of an appeal before the CA, under CA-G.R. CV
No. 53509.
The RTC Decision
In its Decision, 9 dated July 16, 2004, the RTC dismissed the
complaint for lack of cause of action and for being an erroneous
remedy. The RTC stated that a title issued upon a patent may be
annulled only on grounds of actual and intrinsic fraud, which much
consist of an intentional omission of fact required by law to be
stated in the application or willful statement of a claim against the
truth. In the case before the trial court, the Reyeses presented no
evidence of fraud despite their allegations that the Galangs were
not in possession of the property and that it was part of a dried
creek. There being no evidence, these contentions remained
allegations and could not defeat the title of the Galangs. The RTC
wrote:
A title issued upon patent may be annulled only on ground of actual
fraud.
Such fraud must consist [of] an intentional omission of fact
required by law to be stated in the application or willful statement
of a claim against the truth. It must show some specific facts
intended to deceive and deprive another of his right. The fraud
must be actual and intrinsic, not merely constructive or intrinsic;
the evidence thereof must be clear, convincing and more than
merely preponderant, because the proceedings which are being
assailed as having been fraudulent are judicial proceedings, which
by law, are presumed to have been fair and regular. (Libudan v.
Palma Gil 45 SCRA 17) ADaEIH
However, aside from allegations that defendant Galang is not in
possession of the property and that the property was part of a dried
creek, no other sufficient evidence of fraud was presented by the
plaintiffs. They have, thus, remained allegations, which cannot
defeat the defendants title. 10
The RTC added that the land, having been acquired through a
homestead patent, was presumably public land. Therefore, only
the State can institute an action for the annulment of the title
covering it.
It further opined that because the Reyeses claimed to have
acquired the property by right of accretion, they should have filed
an action for reconveyance, explaining "[t]hat the remedy of
persons whose property had been wrongly or erroneously
registered in another's name is not to set aside the decree/title, but
an action for reconveyance, or if the property has passed into the
hands of an innocent purchaser for value, an action for
damages." 11
The Court of Appeals Decision
In its Decision, dated April 9, 2008, the CA reversed and set
aside the RTC decision and ordered the cancellation of OCT No.
P-928 and the reconveyance of the land to the Reyeses.
The CA found that the Reyeses had proven by preponderance of
evidence that the subject land was a portion of the creek bed that
was abandoned through the natural change in the course of the
water, which had now traversed a portion of Ponderosa. As
owners of the land occupied by the new course of the creek, the
Reyeses had become the owners of the abandoned creek
bed ipso facto. Inasmuch as the subject land had become private,
a free patent issued over it was null and void and produced no
legal effect whatsoever. A posteriori, the free patent covering the
subject land, a private land, and the certificate of title issued
pursuant thereto, are null and void. 12
The Galangs moved for a reconsideration, 13 but their motion was
denied in a Resolution dated October 6, 2008.
Hence, this petition.
Issues
The Galangs present, as warranting a review of the questioned CA
decision, the following grounds: ACDIcS
THE HONORABLE COURT OF APPEALS COMMITTED
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF
JURISDICTION IN NOT RESOLVING THAT THE OFFICE OF
THE SOLICITOR GENERAL, NOT THE PRIVATE
RESPONDENTS, HAS THE SOLE AUTHORITY TO FILE
[CASES FOR] ANNULMENT OF TITLE INVOLVING PUBLIC
LAND.
THE HONORABLE COURT OF APPEALS COMMITTED
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF
JURISDICTION IN HOLDING THAT PRIVATE RESPONDENTS
HAVE [A] CAUSE OF ACTION AGAINST PETITIONERS EVEN
WITHOUT EXHAUSTION OF ADMINISTRATIVE REMED[IES].
THE HONORABLE COURT OF APPEALS COMMITTED
GRAVE ABUSE OF DISCRETION AMOUNTING TO LACK OF
JURISDICTION IN DEVIATING FROM THE FINDINGS OF FACT
OF THE TRIAL COURT AND INTERPRETING ARTICLE 420 IN
RELATION TO ARTICLE 461 OF THE CIVIL CODE OF THE
PHILIPPINES BY SUBSTITUTING ITS OWN OPINION BASED
ON ASSUMPTION OF FACTS. 14
A reading of the records discloses that these can be synthesized
into two principal issues, to wit: (1) whether the Reyeses can file
the present action for annulment of a free patent title and
reconveyance; and (2) if they can, whether they were able to prove
their cause of action against the Galangs.
The Court's Ruling
Regarding the first issue, the Galangs state that the property was
formerly a public land, titled in their names by virtue of Free Patent
No. 045802-96-2847 issued by the DENR. Thus, they posit that
the Reyeses do not have the personality and authority to institute
any action for annulment of title because such authority is vested
in the Republic of the Philippines, through the Office of the Solicitor
General. 15
In this regard, the Galangs are mistaken. The action filed by the
Reyeses seeks the transfer to their names of the title registered in
the names of the Galangs. In their Complaint, they alleged that:
first, they are the owners of the land, being the owners of the
properties through which the Marigman creek passed when it
changed its course; and second, the Galangs illegally
dispossessed them by having the same property registered in their
names. It was not an action for reversion which requires that the
State be the one to initiate the action in order for it to prosper. The
distinction between the two actions was elucidated in the case
of Heirs of Kionisala v. Heirs of Dacut, 16 where it was
written: CTIDcA
An ordinary civil action for declaration of nullity of free
patents and certificates of title is not the same as an action
for reversion. The difference between them lies in the allegations
as to the character of ownership of the realty whose title is sought
to be nullified. In an action for reversion, the pertinent
allegations in the complaint would admit State ownership of
the disputed land. Hence in Gabila v. Barriga where the plaintiff
in his complaint admits that he has no right to demand the
cancellation or amendment of the defendant's title because even
if the title were cancelled or amended the ownership of the land
embraced therein or of the portion affected by the amendment
would revert to the public domain, we ruled that the action was for
reversion and that the only person or entity entitled to relief would
be the Director of Lands.
On the other hand, a cause of action for declaration of nullity
of free patent and certificate of title would require allegations
of the plaintiff's ownership of the contested lot prior to the
issuance of such free patent and certificate of title as well as
the defendant's fraud or mistake; as the case may be, in
successfully obtaining these documents of title over the
parcel of land claimed by plaintiff. In such a case, the nullity
arises strictly not from the fraud or deceit but from the fact that the
land is beyond the jurisdiction of the Bureau of Lands to bestow
and whatever patent or certificate of title obtained therefor is
consequently void ab initio. The real party in interest is not the
State but the plaintiff who alleges a pre-existing right of
ownership over the parcel of land in question even before the
grant of title to the defendant. In Heirs of Marciano Nagano v.
Court of Appeals we ruled
. . . from the allegations in the complaint . . . private respondents
claim ownership of the 2,250 square meter portion for having
possessed it in the concept of an owner, openly, peacefully,
publicly, continuously and adversely since 1920. This claim is an
assertion that the lot is private land . . . . Consequently, merely on
the basis of the allegations in the complaint, the lot in question is
apparently beyond the jurisdiction of the Director of the Bureau of
Lands and could not be the subject of a Free Patent. Hence, the
dismissal of private respondents' complaint was premature and
trial on the merits should have been conducted to thresh out
evidentiary matters. It would have been entirely different if the
action were clearly for reversion, in which case, it would have to
be instituted by the Solicitor General pursuant to Section 101
of C.A. No. 141 . . .
It is obvious that private respondents allege in their complaint all
the facts necessary to seek the nullification of the free patents as
well as the certificates of title covering Lot 1015 and Lot 1017.
Clearly, they are the real parties in interest in light of their
allegations that they have always been the owners and
possessors of the two (2) parcels of land even prior to the issuance
of the documents of title in petitioners' favor, hence the latter could
only have committed fraud in securing them EACIaT
. . . That plaintiffs are absolute and exclusive owners and in actual
possession and cultivation of two parcels of agricultural lands
herein particularly described as follows [technical description of
Lot 1017 and Lot 1015] . . . 3. That plaintiffs became absolute and
exclusive owners of the abovesaid parcels of land by virtue of
inheritance from their late father, Honorio Dacut, who in turn
acquired the same from a certain Blasito Yacapin and from then
on was in possession thereof exclusively, adversely and in the
concept of owner for more than thirty (30) years . . . 4. That
recently, plaintiff discovered that defendants, without the
knowledge and consent of the former, fraudulently applied for
patent the said parcels of land and as a result thereof certificates
of titles had been issued to them as evidenced by certificate of title
No. P-19819 in the name of the Hrs. of Ambrocio Kionisala, and
No. P-20229 in the name of Isabel Kionisala . . . 5. That the patents
issued to defendants are null and void, the same having been
issued fraudulently, defendants not having been and/or in actual
possession of the litigated properties and the statement they may
have made in their application are false and without basis in fact,
and, the Department of Environment and Natural Resources not
having any jurisdiction on the properties the same not being
anymore public but already private property . . .
It is not essential for private respondents to specifically state in the
complaint the actual date when they became owners and
possessors of Lot 1015 and Lot 1017. The allegations to the effect
that they were so preceding the issuance of the free patents and
the certificates of title, i.e., "the Department of Environment and
Natural Resources not having any jurisdiction on the properties the
same not being anymore public but already private property," are
unquestionably adequate as a matter of pleading to oust the State
of jurisdiction to grant the lots in question to petitioners. If at all,
the oversight in not alleging the actual date when private
respondents' ownership thereof accrued reflects a mere deficiency
in details which does not amount to a failure to state a cause of
action. The remedy for such deficiency would not be a motion to
dismiss but a motion for bill of particulars so as to enable the filing
of appropriate responsive pleadings.
With respect to the purported cause of action for reconveyance,
it is settled that in this kind of action the free patent and the
certificate of title are respected as incontrovertible. What is
sought instead is the transfer of the property, in this case the
title thereof, which has been wrongfully or erroneously
registered in the defendant's name. All that must be alleged
in the complaint are two (2) facts which admitting them to be
true would entitle the plaintiff to recover title to the disputed
land, namely, (1) that the plaintiff was the owner of the land
and, (2) that the defendant had illegally dispossessed him of
the same. DScTaC
We rule that private respondents have sufficiently pleaded (in
addition to the cause of action for declaration of free patents and
certificates of title) an action for reconveyance, more specifically,
one which is based on implied trust. An implied trust arises where
the defendant (or in this case petitioners) allegedly acquires the
disputed property through mistake or fraud so that he (or they)
would be bound to hold and reconvey the property for the benefit
of the person who is truly entitled to it. In the complaint, private
respondents clearly assert that they have long been the absolute
and exclusive owners and in actual possession and cultivation of
Lot 1015 and Lot 1017 and that they were fraudulently deprived of
ownership thereof when petitioners obtained free patents and
certificates of title in their names. These allegations certainly
measure up to the requisite statement of facts to constitute an
action for reconveyance. 17 [Emphases supplied]
In this case, the complaint instituted by the Reyeses before the
RTC was for the annulment of the title issued to the Galangs, and
not for reversion. Thus, the real party in interest here is not the
State but the Reyeses who claim a right of ownership over the
property in question even before the issuance of a title in favor of
the Galangs. Although the Reyeses have the right to file an action
for reconveyance, they have failed to prove their case. Thus, on
the second issue, the Court agrees with the RTC that the Reyeses
failed to adduce substantial evidence to establish their allegation
that the Galangs had fraudulently registered the subject property
in their names.
The CA reversed the RTC decision giving the reason that the
property was the former bed of Marigman Creek, which changed
its course and passed through their Ponderosa property, thus,
ownership of the subject property was automatically vested in
them.
The law in this regard is covered by Article 461 of the Civil Code,
which provides:
Art. 461. River beds which are abandoned through the natural
change in the course of the waters ipso facto belong to the owners
whose lands are occupied by the new course in proportion to the
area lost. However, the owners of the lands adjoining the old bed
shall have the right to acquire the same by paying the value
thereof, which value shall not exceed the value of the area
occupied by the new bed.
If indeed a property was the former bed of a creek that changed
its course and passed through the property of the claimant, then,
pursuant to Article 461, the ownership of the old bed left to dry by
the change of course was automatically acquired by the
claimant. 18 Before such a conclusion can be reached, the fact
of natural abandonment of the old course must be shown, that is,
it must be proven that the creek indeed changed its course without
artificial or man-made intervention. Thus, the claimant, in this case
the Reyeses, must prove three key elements by clear and
convincing evidence. These are: (1) the old course of the creek,
(2) the new course of the creek, and (3) the change of course of
the creek from the old location to the new location
by natural occurrence. DcCIAa
In this regard, the Reyeses failed to adduce indubitable evidence
to prove the old course, its natural abandonment and the new
course. In the face of a Torrens title issued by the government,
which is presumed to have been regularly issued, the evidence of
the Reyeses was clearly wanting. Uncorroborated testimonial
evidence will not suffice to convince the Court to order the
reconveyance of the property to them. This failure did not escape
the observation of the Office of the Solicitor General. Thus, it
commented:
In the case at bar, it is not clear whether or not the Marigman
Creek dried-up naturally back in 1980. Neither did private
respondents submit any findings or report from the Bureau of
Lands or the DENR Regional Executive Director, who has the
jurisdiction over the subject lot, regarding the nature of change in
the course of the creek's waters. Worse, what is
even uncertain in the present case is the exact location of the
subject matter of dispute. This is evident from the decision of the
Regional Trial Court which failed to specify which portion of the
land is actually being disputed by the contending parties.
xxx xxx xxx
Since the propriety of the remedy taken by private respondents in
the trial court and their legal personality to file the aforesaid action
depends on whether or not the litigated property in the present
case still forms part of the public domain, or had already been
converted into a private land, the identification of the actual
portion of the land subject of the controversy becomes
necessary and indispensable in deciding the issues herein
involved.
xxx xxx xxx
Notably, private respondents failed to submit during trial any
convincing proof of a similar declaration by the government that a
portion of the Marigman Creek had already dried-up and that the
same is already considered alienable and disposable agricultural
land which they could acquire through acquisitive prescription.
Indeed, a thorough investigation is very imperative in the light of
the conflicting factual issues as to the character and actual location
of the property in dispute. These factual issues could properly be
resolved by the DENR and the Land Management Bureau, which
have the authority to do so and have the duty to carry out the
provisions of the Public Land Act, after both parties have been fully
given the chance to present all their evidence. 19 [Emphases
supplied]
Moreover, during cross-examination, Conrado S. Reyes admitted
that the plan surveyed for Fe de Castro Reyes and Jose de
Castro, * marked before the RTC as Exhibit "A-2," was prepared
by a geodetic engineer without conducting an actual survey on the
ground:
COUNSEL FOR DEFENDANTS: TAcSaC
I am showing to you Exhibit "A-2" which is a plan surveyed for Fe
de Kastro Reyes and Jose de Kastro. This plan was prepared by
the geodetic engineer without conducting actual survey on the
ground, is it not?
A: I cannot agree to that question.
Q: But based on the certification of the geodetic engineer, who
prepared this it appears that this plan was plotted only based on
the certification on this plan marked as Exhibit "A-2", is it not?
A: Yes, sir.
Q: So, based on this certification that the geodetic engineer
conducted the survey of this plan based on the technical
description without conducting actual survey on the ground?
A: Yes, sir. 20
At some point, Mr. Reyes admitted that he was not sure that the
property even existed:
COUNSEL FOR DEFENDANTS:
The subject matter of this document Exhibit I is that, that property
which at present is titled in the name of Fe de
Castro Reyes married to Conrado Reyes, et al. is that correct?
A: Yes.
Q: The subject matter of this case now is the adjoining lot of this
TCT 185252, is that correct?
A: I do not know.
Q: You mean you do not know the lot subject matter of this case?
A: I do not know whether it really exists.
Q: Just answer the question, you do not know?
A: Yes. 21
The conflicting claims here are (1) the title of the Galangs issued
by the DENR, through the PENRO, and (2) the claim of the
Reyeses, based on unsubstantiated testimony, that the land in
question is the former bed of a dried up creek. As between these
two claims, this Court is inclined to decide in favor of the Galangs
who hold a valid and subsisting title to the property which, in the
absence of evidence to the contrary, the Court presumes to have
been issued by the PENRO in the regular performance of its
official duty. TcAECH
The bottom line here is that, fraud and misrepresentation, as
grounds for cancellation of patent and annulment of title, should
never be presumed, but must be proved by clear and convincing
evidence, with mere preponderance of evidence not being
adequate. Fraud is a question of fact which must be proved. 22
In this case, the allegations of fraud were never proven. There was
no evidence at all specifically showing actual fraud or
misrepresentation. Thus, the Court cannot sustain the findings of
the CA.
WHEREFORE, the petition is GRANTED. The April 9, 2008
Decision and the October 6, 2008 Resolution of the Court of
Appeals, in CA-G.R. CV. No. 85660, are
hereby REVERSED and SET ASIDE. Civil Case No. 97-4560 of
the Regional Trial Court of Antipolo City, Branch 73, is hereby
ordered DISMISSED for lack of merit.
SO ORDERED.
||| (Spouses Galang v. Spouses Reyes, G.R. No. 184746, [August
15, 2012], 692 PHIL 652-667)
DEPT OF EDUCATION v. CASIBANG
THIRD DIVISION
[G.R. No. 192268. January 27, 2016.]
DEPARTMENT OF EDUCATION, represented by its Regional
Director, petitioner, vs. DELFINA C. CASIBANG, ANGELINA C.
CANAPI, ERLINDA C. BAJAN, LORNA G. GUMABAY,
DIONISIA C. ALONZO, MARIA C. BANGAYAN and DIGNA C.
BINAYUG, respondents.
DECISION
PERALTA, J p:
For resolution of this Court is the Petition for Review
on Certiorari, dated June 18,
2010, of petitioner Department of Education (DepEd), represente
d by its Regional Director seeking to reverse and set aside the
Decision 1 dated April 29, 2010 of the
Court of Appeals (CA) affirming the Decision 2 dated January 10,
2008 of the Regional Trial Court (RTC) ofTuguegarao City,
Cagayan, Branch 5, declaring the respondents the
owners of property in controversy and ordering the DepEd to pay
the value of the property. ETHIDa
The antecedents follow:
The property in controversy is a seven thousand five hundred
thirty-two (7,532) square meter portion of Lot 115 covered by
Original Certificate of Title (OCT) No. O-627 registered under the
name of Juan Cepeda, the respondents' late father. 3
Sometime in 1965, upon the request of the then Mayor Justo
Cesar Caronan, Cepeda allowed the construction and
operation of a school on the western portion of his property. The
school is now known as Solana North Central School, operating
under the control and supervision of the petitioner DepEd. 4
Despite Cepeda's death in 1983, the herein respondents and other
descendants of Cepeda continued to tolerate the use and
possession of the property by the school. 5
Sometime between October 31, 2000 and November 2, 2000, the
respondents entered and occupied a portion of the property. Upon
discovery of the said occupation, the teachers of the school
brought the matter to the attention of the barangay captain. The
school officials demanded the respondents to vacate the
property. 6 However, the respondents refused to vacate the
property, and asserted Cepeda's ownership of the lot. 7
On June 21, 2001, the DepEd filed a Complaint for Forcible Entry
and Damages against respondents before the Municipal Circuit
Trial Court (MCTC) of Solana-Enrile. The MCTC ruled in
favor of the petitioner and directed respondents to vacate the
premises. 8 On appeal, the RTC affirmed the decision of the
MCTC. 9
Thereafter, respondents demanded the petitioner to either pay
rent, purchase the area occupied, or vacate the premises. DepEd
did not heed the demand and refused to recognize the
ownership of the respondents over the property. 10
On March 16, 2004, the respondents filed an action for
Recovery of Possession and/or Sum of Money against the
DepEd. 11 Respondents averred that since their late father did not
have any immediate need of the land in 1965, he consented to the
building of the temporary structure and allowed the
conduct of classes in the premises. They claimed that they have
been deprived of the use and the enjoyment of the portion of the
land occupied by the school, thus, they are entitled to just
compensation and reasonable rent for the use of property. 12
In its Answer, the DepEd alleged that it owned the subject property
because it was purchased by civic-minded residents of Solana,
Cagayan from Cepeda. It further alleged that contrary to
respondents' claim that the occupation is by mere tolerance, the
property has always been occupied and used adversely,
peacefully, continuously and in the concept of owner for almost
forty (40) years. 13 It insisted that the respondents had lost
whatever right they had over the property through laches. 14
During the trial, respondents presented, inter alia, the OCT No. O-
627 registered in the name of Juan Cepeda; Tax Declarations also
in his name and the tax receipts showing that they had been
paying real property taxes on the property since 1965. 15 They
also presented the Technical Description of the lot by
the Department of Environment and Natural Resources Land
Management Services showing that the subject property was
surveyed in the name of Cepeda and a certification from the
Municipal Trial Court of Solana, Cagayan declaring that Lot 115
was the subject of Cad Case No. N-13 in LRC Cad. Record No. N-
200 which was adjudicated to Cepeda. 16
On the other hand, despite notice and reset of hearing, the DepEd
failed to present its evidence or witness to substantiate its
defense. 17
Consequently, the RTC considered the case submitted for
decision and rendered a Decision dated January 10, 2008, finding
that the respondents are the owners of the subject property,
thus: TIADCc
WHEREFORE, judgment is hereby rendered.
1. Declaring plaintiffs as the owner of Lot 115 covered by Original
Certificate of Title No. O-627.
2. Ordering the reconveyance of the portion of the subject
property occupied by the Solana North Central School, Solana,
Cagayan. However, since restoration of possession of said
portion by the defendant Department of Education is no longer
feasible or convenient because it is now used for the school
premises, the only relief available is for the government to pay due
compensation which should have [been] done years ago.
2.1 To determine due compensation for the Solana North Central
School the basis should be the price or value of the property at the
time of taking.
3. No pronouncement as to cost.
SO ORDERED. 18
The DepEd, through the Office of the Solicitor
General (OSG), appealed the case before the CA. In its appeal,
the DepEd insisted that the respondents have lost their right over
the subject property for their failure to assert the same for more
than thirty (30) years, starting in 1965, when the Mayor placed the
school in possession thereof. 19
The CA then affirmed the decision of the RTC. The dispositive
portion of the said decision reads:
WHEREFORE, the appeal is DISMISSED, and the Decision dated
10 January 2008, of the Regional Trial Court, Branch 5,
Tuguegarao, Cagayan in Civil Case No. 6336 for
Recovery of Possession and/or Sum of Money, declaring plaintiffs
as the owners of the property in controversy, and ordering
the Department of Education to pay them the value of the property
taken is AFFIRMED in toto.
SO ORDERED. 20
Aggrieved, the DepEd, through the OSG, filed before this Court
the present petition based on the sole ground that:
THE COURT OF APPEALS ERRED IN AFFIRMING THE TRIAL
COURT'S DECISION THAT THE RESPONDENTS' RIGHT TO
RECOVER THE POSSESSION OF THE SUBJECT PROPERTY
IS NOT BARRED BY PRESCRIPTION AND/OR LACHES. 21
This Court finds the petition without merit.
Laches, in a general sense, is the failure or neglect for an
unreasonable and unexplained length of time, to do that which, by
exercising due diligence, could or should have been done earlier;
it is negligence or omission to assert a right within a reasonable
time, warranting a presumption that the party entitled to assert it
either has abandoned it or declined to assert it. 22
There is no absolute rule as to what constitutes laches or
staleness of demand; each case is to be determined according to
its particular circumstances. The question oflaches is addressed
to the sound discretion of the court, and since laches is an
equitable doctrine, its application is controlled by equitable
considerations. It cannot work to defeat justice or to perpetrate
fraud and injustice. 23
Laches is evidentiary in nature, a fact that cannot be established
by mere allegations in the pleadings. 24 The following elements,
as prescribed in the case of Go Chi Gun, et al. v. Co Cho, et
al., 25 must be present to constitute laches:
. . . (1) conduct on the part of the defendant, or of one under whom
he claims, giving rise to the situation of which complaint is made
for which the complaint seeks a remedy; (2) delay in asserting the
complainant's rights, the complainant having had knowledge or
notice, of the defendant's conduct and having been afforded an
opportunity to institute a suit; (3) lack of knowledge or notice on
the part of the defendant that the complainant would assert the
right on which he bases his suit; and (4) injury or prejudice to the
defendant in the event relief is accorded to the complainant, or the
suit is not held to be barred. 26
To refute the respondents' claim that its possession of the subject
lot was merely tolerated, the DepEd averred that it owned the
subject property because the land was purchased by the civic-
minded residents of Solana. 27 It further alleged that since it was
the then Mayor who convinced Cepeda to allow the school to
occupy the property and use the same, it believed in good faith
that the ownership of the property was already transferred to it. 28
However, the DepEd did not present, in addition to the
deed of sale, a duly-registered certificate of title in proving the
alleged transfer or sale of the property. Aside from its allegation,
the DepEd did not adduce any evidence to the
transfer of ownership of the lot, or that Cepeda received any
consideration for the purported sale.
On the other hand, to support their claim of ownership of the
subject lot, respondents presented the following: (1) the OCT No.
O-627 registered in the name of Juan Cepeda; 29 (2) Tax
Declarations in the name of Cepeda and the tax receipts showing
the payment of the real property taxes on the property since
1965; 30 (3) Technical Description of the lot by
the Department of Environment and Natural Resources Land
Management Services, surveyed in the name of Cepeda; 31 and
(4) Certification from the Municipal Trial Court of Solana, Cagayan
declaring that Lot 115 was adjudicated to Cepeda. 32
After a scrutiny of the records, this Court finds that the above were
sufficient to resolve the issue on who had better
right of possession. That being the case, it is the burden of the
DepEd to prove otherwise. Unfortunately, the DepEd failed to
present any evidence to support its claim that the disputed land
was indeed purchased by the residents. By the DepEd's
admission, it was the fact that the then Mayor of Solana, Cagayan
convinced Cepeda to allow the school to occupy the property for
its school site that made it believe that the ownership of the
property was already transferred to it. We are not swayed by the
DepEd's arguments. As against the DepEd's unsubstantiated self-
serving claim that it acquired the property by virtue of a sale, the
Torrens title of respondents must prevail. AIDSTE
It is undisputed that the subject property is covered by OCT No.
O-627, registered in the name of the Juan Cepeda. 33 A
fundamental principle in land registration under the Torrens
system is that a certificate of title serves as evidence of an
indefeasible and incontrovertible title to the property in favor of the
person whose name appears therein. 34Thus, the
certificate of title becomes the best proof of ownership of a
parcel of land. 35
As registered owners of the lots in question, the respondents have
a right to eject any person illegally occupying their property. This
right is imprescriptible. Even if it be supposed that they were
aware of the petitioner's occupation of the property, and
regardless of the length of that possession, the lawful owners
have a right to demand the return of their property at any time as
long as the possession was unauthorized or merely tolerated, if at
all. This right is never barred by laches. 36
Case law teaches that those who occupy the land of another at the
latter's tolerance or permission, without any contract between
them, are necessarily bound by an implied promise that the
occupants will vacate the property upon demand. 37
In the case of Sarona, et al. v. Villegas, et al., 38 this Court
described what tolerated acts mean, in this language:
Professor Arturo M. Tolentino states that acts merely tolerated are
"those which by reason of neighborliness or familiarity, the
owner of property allows his neighbor or another person to do on
the property; they are generally those particular services or
benefits which one's property can give to another without material
injury or prejudice to the owner, who permits them
out of friendship or courtesy." . . . . and, Tolentino
continues, even though "this is continued for a long time, no
right will be acquired by prescription." . . . 39
It was out of respect and courtesy to the then Mayor who was a
distant relative that Cepeda consented to the building of the
school. 40 The occupancy of the subject property by the DepEd to
conduct classes therein arose from what Professor Arturo
Tolentino refers to as the sense of "neighborliness or
familiarity" of Cepeda to the then Mayor that he allowed the said
occupation and use of his property.
Professor Tolentino, as cited in the Sarona case, adds that
tolerated acts are acts of little disturbances which a person, in the
interest of neighborliness or friendly relations, permits others to do
on his property, such as passing over the land, tying a horse
therein, or getting some water from a well. 41 In tolerated acts, the
said permission of the owner for the acts done in his property
arises from an "impulse of sense of neighborliness or good
familiarity with persons" 42 or out of "friendship or
courtesy," 43 and not out of duty or obligation. By
virtue of tolerance that is considered as an authorization,
permission, or license, acts of possession are realized or
performed. 44
Thus, in light of the DepEd's admission that it was the then Mayor
who convinced Cepeda to allow its use of his property and in the
absence of evidence that the same was indeed sold to it, the
occupation and use as school site of the subject lot by the DepEd
upon Cepeda's permission is considered a tolerated act. Cepeda
allowed the use of his property out of his respect, courtesy and
familiarity with the then Mayor who convinced him to allow the
use of his property as a school site.
Considering that the occupation of the subject lot is by mere
tolerance or permission of the respondents, the DepEd, without
any contract between them, is bound by an implied promise that it
will vacate the same upon demand. Hence, until such demand to
vacate was communicated by the respondents to the DepEd,
respondents are not required to do any act to recover the subject
land, precisely because they knew of the nature of the DepEd's
possession which is by mere tolerance. SDAaTC
Therefore, respondents are not guilty of failure or neglect to assert
a right within a reasonable time. The nature of that possession by
the DepEd has never changed from 1965 until the filing of the
complaint for forcible entry against the respondents on June 21,
2001. It was only then that the respondents had knowledge of the
adverse claim of the DepEd over the property. The respondents
filed the action for recovery of possession on March 16, 2004 after
they lost their appeal in the forcible entry case and upon the
continued refusal of the DepEd to pay rent, purchase the lot or
vacate the premises. 45
Lastly, the DepEd maintains that the respondents' inaction for
more than 30 years reduced their right to recover the subject
property into a stale demand. It cited the case of Eduarte v.
CA, 46 Catholic Bishop of Balanga v. CA, 47 Mactan-Cebu
International Airport Authority (MCIAA) v. Heirs of Marcelina L.
Sero, et al. 48 and DepEd Division of Albay v. Oate 49 to bolster
its claim that a registered owner may lose his right to recover the
possession of his registered property by reason of laches. It
alleged that the fact that the respondents possess the
certificate of title of the property is of no moment since a
registered landowner, like the respondents, lost their right to
recover the possession of the registered property by
reason of laches.
In the Eduarte case, the respondents therein knew of Eduarte's
adverse possession of the subject lot as evidenced by their Joint
Affidavit dated March 18, 1959. In the case of Catholic
Bishop of Balanga v. CA, the petitioner, by its own admission, was
aware of private respondent's occupation in the
concept of owner of the lot donated in its behalf to private
respondent's predecessor-in-interest in 1936. The subject lot in
the case of Mactan-Cebu International Airport Authority was
obtained through expropriation proceedings and registered in the
name of the petitioner. In the Oate case, no evidence was
presented to show that the respondent or his predecessor-in-
interest protested against the adverse possession of the disputed
lot by the Municipality of Daraga and, subsequently, by the
petitioner.
Unlike the cases cited by the DepEd, there was no solid
evidentiary basis to establish that laches existed in the instant
case. The DepEd failed to substantiate its claim ofpossession in
the concept of an owner from the time it occupied the lot after
Cepeda allowed it to use the same for a school site in 1965. The
possession by the DepEd of the subject lot was clearly by mere
tolerance, since it was not proven that it laid an adverse claim over
the property by virtue of the purported sale.
Moreover, the trial court ruled that the DepEd is a builder in good
faith. To be deemed a builder in good faith, it is essential that a
person asserts title to the land on which he builds, i.e., that he be
a possessor in the concept of owner, and that he be unaware that
there exists in his title or mode of acquisition any flaw which
invalidates it. 50 However, there are cases where Article
448 of the Civil Code was applied beyond the recognized and
limited definition of good faith, e.g., cases wherein the builder has
constructed improvements on the land of another with the
consent of the owner. 51 The Court ruled therein that the
structures were built in good faith in those cases that the owners
knew and approved of the construction of improvements on the
property. 52
Despite being a possessor by mere tolerance, the DepEd is
considered a builder in good faith, since Cepeda permitted the
construction of building and improvements to conduct classes on
his property. Hence, Article 448 may be applied in the case at bar.
Article 448, in relation to Article 546 of the Civil Code,provides for
the rights of respondents as landowners as against the DepEd, a
builder in good faith. The provisions respectively read:
Article 448. The owner of the land on which anything has been
built, sown or planted in good faith, shall have the right to
appropriate as his own the works, sowing, or planting, after
payment of the indemnity provided for in Articles 546 and 548, or
to oblige the one who built or planted to pay the price of the land,
and the one who sowed, the proper rent. However, the builder or
planter cannot be obliged to buy the land if its value is considerably
more than that of the building or trees. In such case, he shall pay
reasonable rent, if the owner of the land dues not choose to
appropriate the building or trees after proper indemnity. The
parties shall agree upon the terms of the lease and in
case of disagreement, the court shall fix the terms thereof.
Article 546. Necessary expenses shall be refunded to every
possessor; but only the possessor in good faith may retain the
thing until he has been reimbursed therefor.
Useful expenses shall be refunded only to the possessor in good
faith with the same right of retention, the person who has defeated
him in the possession having the option of refunding the
amount of the expenses or of paying the increase in value which
the thing may have acquired by reason thereof.
In the case of Bernardo v. Bataclan, 53 the Court explicated that
Article 448 provides a just and equitable solution to the
impracticability of creating "forced co-ownership" by giving the
owner of the land the option to acquire the improvements after
payment of the proper indemnity or to oblige the builder or planter
to pay for the land and the sower to pay the proper rent. 54 The
owner of the land is allowed to exercise the said options because
his right is older and because, by the principle of accession, he is
entitled to the ownership of the accessory thing. 55
Thus, the two options available to the respondents as landowners
are: (a) they may appropriate the improvements, after
payment of indemnity representing the value ofthe improvements
introduced and the necessary and useful expenses defrayed on
the subject lots; or (b) they may oblige the DepEd to pay the
price of the land. However, it is also provided under Article 448
that the builder cannot be obliged to buy the land if its value is
considerably more than that of the improvements and buildings. If
that is the case, the DepEd is not duty-bound to pay the
price of the land should the value of the same be considerably
higher than the value of the improvement introduced by the DepEd
on the subject property. In which case, the law provides that the
parties shall agree on the terms of the lease and, in
case of disagreement, the court shall fix the terms thereof.
The RTC, as affirmed by the CA, ruled that the option of the
landowner to appropriate after payment of the indemnity
representing the value of the improvements introduced and the
necessary and useful expenses defrayed on the subject lots is no
longer feasible or convenient because it is now being used as
school premises. Considering that the
appropriation of improvements upon payment of indemnity
pursuant to Article 546 by the respondents of the buildings being
used by the school is no longer practicable and feasible, the
respondents are thus left with the second option of obliging the
DepEd to pay the price of the land or to require the DepEd to pay
reasonable rent if the value ofthe land is considerably more than
the value of the buildings and improvements. acEHCD
Since the determination of the value of the subject property is
factual in nature, this Court finds a need to remand the case to the
trial court to determine its value. In case the trial court determines
that the value of the land is considerably more than that of the
buildings and improvements introduced, the DepEd may not be
compelled to pay the value of the land, instead it shall pay
reasonable rent upon agreement by the parties of the terms of the
lease. In the event of a disagreement between the parties, the trial
court shall fix the terms of lease.
Lastly, the RTC ruled that the basis of due compensation for the
respondents should he the price or value of the property at the
time of the taking. In the case of Ballatan v. CA, 56 the Court has
settled that the time of taking is determinative of just
compensation in expropriation proceedings but not in a case
where a landowner has been deprived ofthe use of a
portion of this land for years due to the
encroachment of another. 57
In such instances, the case of Vda. de Roxas v. Our Lady's
Foundation, Inc. 58 is instructive. The Court elucidated therein
that the computation of the value of the property should be fixed at
the prevailing market value. 59 The reckoning period for valuing
the property in case the landowner exercised his rights in
accordance with Article 448 shall be at the time the landowner
elected his choice. 60 Therefore, the basis for the
computation of the value of the subject property in the instant case
should be its present or current fair market value.
WHEREFORE, the Petition for Review on Certiorari, dated June
18, 2010, of petitioner Department of Education, represented by
its Regional Director, is hereby DENIED.Accordingly, the Decision
dated April 29, 2010 of the Court of Appeals in CA-G.R. CV No.
90633, affirming the Decision dated January 10, 2008 of the
Regional Trial Court ofTuguegarao City, Cagayan, Branch 5,
which declared the respondents the owners of property in
controversy, is hereby AFFIRMED.
Accordingly, this case is REMANDED to the court of origin to
determine the value of the subject property. If the value of the
property is less than the value of the buildings and improvements,
the Department of Education is ordered to pay such amount. If the
value of the property is greater than the value of the buildings and
improvements, the DepEd is ordered to pay reasonable rent in
accordance with the agreement of the parties. In
case of disagreement, the trial court shall fix the
amount of reasonable rent.
SO ORDERED.
||| (Department of Education v. Casibang, G.R. No. 192268,
[January 27, 2016])
ROSALES v. CASTELLTORT
THIRD DIVISION
[G.R. No. 157044. October 5, 2005.]
RODOLFO V. ROSALES, (represented by his heirs, Rodolfo,
Jr., Romeo Allan, Lillian Rhodora, Roy Victor, Roger Lyle and
Alexander Nicolai, all surnamed Rosales) and LILY
ROSQUETA-ROSALES, petitioners, vs.
MIGUEL CASTELLTORT, JUDITH CASTELLTORT, and LINA
LOPEZ-VILLEGAS, assisted by her Attorney-in-Fact, Rene
Villegas, respondents.
DECISION
CARPIO MORALES, J p:
The present petition for review on certiorari assails the October 2,
2002 Decision 1 and February 6, 2003 Resolution 2 of the Court
of Appeals (CA) in CA G.R. CV No. 64046 and seeks to reinstate
the April 21, 1999 Decision 3 of the Regional Trial Court (RTC) of
Calamba, Laguna, Branch 34 in Civil Case No. 2229-95-C.
Spouses-petitioners Rodolfo V. Rosales and Lily Rosqueta-
Rosales (petitioners) are the registered owners of a parcel of land
with an area of approximately 315 square meters, covered by
Transfer Certificate of Title (TCT) No. 36856 4 and designated as
Lot 17, Block 1 of Subdivision Plan LRC Psd-55244 situated in Los
Baos, Laguna.
On August 16, 1995, petitioners discovered that a house was
being constructed on their lot, without their knowledge and
consent, by respondent Miguel Castelltort (Castelltort). 5
It turned out that respondents Castelltort and his wife Judith had
purchased a lot, Lot 16 of the same Subdivision Plan, from
respondent Lina Lopez-Villegas (Lina) through her son-attorney-
in-fact Rene Villegas (Villegas) but that after a survey thereof by
geodetic engineer Augusto Rivera, he pointed to Lot 17 as the Lot
16 the Castelltorts purchased.
Negotiations for the settlement of the case thus began, with
Villegas offering a larger lot near petitioners' lot in the same
subdivision as a replacement thereof. 6 In the alternative, Villegas
proposed to pay the purchase price of petitioners' lot with legal
interest. 7 Both proposals were, however, rejected by
petitioners 8 whose counsel, by letter 9 of August 24, 1995,
directed Castelltort to stop the construction of and demolish his
house and any other structure he may have built thereon, and
desist from entering the lot.
Petitioners subsequently filed on September 1, 1995 a
complaint 10 for recovery of possession and damages with prayer
for the issuance of a restraining order and preliminary injunction
against spouses-respondents Miguel and Judith Castelltort before
the RTC of Calamba, Laguna, docketed as Civil Case No. 2229-
95-C.
To the complaint, the Castelltorts claimed in their Answer with
Counterclaim 11 that they were builders in good faith.
Lina, represented by her son-attorney-in-fact Villegas, soon filed a
Motion for Intervention 12 before the RTC which was granted by
Order 13 of December 19, 1995.
In her Answer to the complaint, 14 Lina alleged that the
Castelltorts acted in good faith in constructing the house on
petitioners' lot as they in fact consulted her before commencing
any construction thereon, they having relied on the technical
description of the lot sold to them, Lot 16, which was verified by
her officially designated geodetic engineer.
Nevertheless, Lina proposed to give petitioners a lot containing an
area of 536 square meters together with the house and duplex
structure built thereon or, if petitioners choose, to encumber the
536 square meter lot as collateral "to get immediate cash" through
a financing scheme in order to compensate them for the lot in
question. 15
Ruling out good faith, the RTC, by Decision of April 21, 1999, found
for petitioners in this wise:
In the instant case, there is no well-founded belief of ownership by
the defendants of the land upon which they built their house. The
title or mode of acquisition upon which they based their belief of
such ownership stemmed from a Contract to Sell (Exhibit "P") of
which they were not even parties, the designated buyer being
Elizabeth Yson Cruz and the sale even subjected to the judicial
reconstitution of the title. And by their own actions, particularly
defendant Miguel Castelltort, defendants betrayed this very belief
in their ownership when realizing the inutility of anchoring their
ownership on the basis of the Contract of Sale, defendant
Miguel Castelltort in his testimony declared Elizabeth Yson Cruz
as his wife (tsn, pp. 7-8, March 24, 1998) despite an admission in
their answer that they are the spouses named as defendants (tsn,
p. 8, January 12, 1998) and which declaration is an utter falsehood
as the Contract to Sell itself indicates the civil status of said
Elizabeth Yson Cruz to be single.
Even if we are to concede that defendants built their house in good
faith on account of the representation of attorney-in-fact Rene
Villegas, their failure to comply with the requirements of the
National Building Code, particularly the procurement of a building
permit, stained such good faith and belief.
xxx xxx xxx
From any and all indications, this deliberate breach is an
unmitigated manifestation of bad faith. And from the evidence thus
adduced, we hold that defendants and the intervenor were
equally guilty of negligence which led to the construction of the
defendants' house on plaintiffs' property and therefore jointly and
severally liable for all the damages suffered by the
plaintiffs. 16 (Underscoring supplied)
The dispositive portion of the trial court's Decision reads,
quoted verbatim:
ACCORDINGLY, in view of all the foregoing, judgment is hereby
rendered in favor of plaintiffs and against the defendants, ordering
the latter to surrender the possession of the property covered by
TCT No. 36856 of the Register of Deeds of Laguna including any
and all improvements built thereon to the plaintiffs.
Defendants and intervenors are likewise jointly and severally
directed to pay to plaintiffs the following damages:
a) TWO THOUSAND (P2,000.00) PESOS per month from
February 1995 by way of reasonable compensation for the use of
plaintiffs' property until the surrender of the same;
b) FIFTY THOUSAND (P50,000.00) PESOS by way of moral
damages;
c) THIRTY THOUSAND (P30,000.00) PESOS as exemplary
damages;
d) TWENTY THOUSAND (P20,000.00) PESOS as attorney's fees
and cost of suit.
The counterclaim interposed by the defendants in their responsive
pleading is hereby dismissed for lack of merit.
SO ORDERED. 17
Respondents thereupon filed their respective appeals with the CA.
Petitioner Rodolfo Rosales, in the meantime, died on December 7,
2001. His heirs Rodolfo, Jr., Romeo Allan, Lillian Rhodora, Roy
Victor, Roger Lyle and Alexander Nicolai, all surnamed Rosales,
filed their Appearance 18 as his substitute.
By Decision of October 2, 2002, the CA granted the appeal and
set aside the April 21, 1999 RTC Decision. The dispositive portion
of the Decision reads, quoted verbatim:
WHEREFORE, premises considered, the instant appeal is
hereby GRANTED and the assailed decision of the court a
quo REVERSED AND SET ASIDE. In accordance with the cases
of Technogas Philippines Manufacturing Corp. vs. Court of
Appeals and Depra vs. Dumlao, applying Article 448 of the Civil
Code, this case is REMANDED to the Regional Trial Court of
Calamba, Laguna, Branch 34, for further proceedings, as follows:
1. to determine the present fair price of appellees' 315 square
meter area of land and the amount of the expenses actually spent
by the appellants for building the house as of 21 August 1995,
which is the time they were notified of appellees' rightful claim over
Lot 17.
2. to order the appellees to exercise their option under the law
(Article 448, Civil Code), whether to appropriate the house as their
own by paying to the appellants the amount of the expenses spent
for the house as determined by the court a quo in accordance with
the limitations as aforestated or to oblige the appellants to pay the
price of the land.
In case the appellees exercise the option to oblige the appellants
to pay the price of the land but the latter reject such purchase
because, as found by the court, the value of the land is
considerably more than that of the house, the court shall order the
parties to agree upon the terms of a forced lease, and give the
court a quo a formal written notice of such agreement and its
provisos. If no agreement is reached by the parties, the court a
quo shall then fix the terms of the forced lease, provided that the
monthly rental to be fixed by the Court shall not be less that Two
Thousand Pesos (P2,000.00) per month, payable within the first
five (5) days of each calendar month and the period thereof shall
not be more than two (2) years, counted from the finality of the
judgment.
Upon the expiration of the forced lease, or upon default by the
appellants in the payment of rentals for two (2) consecutive
months, the appellees shall be entitled to terminate the forced
lease, to recover their land, and to have the improvement removed
by the appellants at the latter's expense. The rentals herein
provided shall be tendered by the appellants to the court for
payment to the appellees, and such tender shall constitute
evidence of whether or not compliance was made within the period
fixed by the court.
In any event, the appellants shall pay the appellees the amount of
Two Thousand Pesos (P2,000.00) as reasonable compensation
for their occupancy of the encroached property from the time said
appellants' good faith cease (sic) to exist until such time the
possession of the property is delivered to the appellees subject to
the reimbursement of the aforesaid expenses in favor of the
appellants or until such time the payment of the purchase price of
the said lot be made by the appellants in favor of the appellees in
case the latter opt for the compulsory sale of the same. IaDSEA
SO ORDERED. 19 (Emphasis in the original)
In reversing the trial court, the CA held:
xxx xxx xxx
. . . A perusal of the records readily reveals that said court instead
relied on flimsy, if not immaterial, allegations of the appellees,
which have no direct bearing in the determination of whether the
appellants are builders in bad faith.
For one, the pivotal issue to be resolved in this case, i.e. whether
appellant Miguel is a builder in good faith, was ignored by the court
a quo. The instant case does not in any way concern the personal
and property relations of spouses-appellants and Elizabeth Yson
Cruz which is an altogether different matter that can be ventilated
by the concerned parties through the institution of a proper action.
. . . The court a quo should have focused on the issue of whether
appellant Miguel built, in good faith, the subject house without
notice of the adverse claim of the appellees and under the honest
belief that the lot which he used in the construction belongs to him.
...
. . . As it is, appellant Miguel relied on the title which the intervenor
showed to him which, significantly, has no annotation that would
otherwise show a prior adverse claim. Thus, as far as appellant
Miguel is concerned, his title over the subject lot, as well as the
title of the intervenor thereto, is clean and untainted by an adverse
claim or other irregularities.
For another, the appellants' failure to secure a building permit from
the Municipal Engineer's Office on their construction on Lot 17
does not impinge on the good faith of the appellants. In fact, it can
be told that a building permit was actually filed by appellant Miguel
with respect to Lot 16 and it was only due to the confusion and
misapprehension by the intervenor of the exact parameters of the
property which caused appellant's belief that Lot 17 [the
questioned lot], is his. This fact bolsters appellant Miguel's good
faith in building his house on appellees' lot under the mistaken
belief that the same is his property. Otherwise, he should have
secured a building permit on Lot 17 instead or should not have
bothered to take the necessary measures to obtain a building
permit on Lot 16 in the first place.
By and large, the records show that, as testified to by Engr.
Rebecca T. Lanuang, appellant Miguel had already applied for a
building permit as early as February 1994 and was in fact issued
a temporary building permit pending the completion of the
requirements for said permit. Although the building permit was
belatedly issued in January 1996, this does not in any way detract
from appellant Miguel's good faith.
xxx xxx xxx
In holding the appellants as builders in bad faith, the court a
quo defied law and settled jurisprudence considering that the
factual basis of its findings and the incontrovertible evidence in
support thereof prove that the appellant Miguel, in good faith, built
the house on appellees' land without knowledge of an adverse
claim or any other irregularities that might cast a doubt as to the
veracity of the assurance given to him by the intervenor. Having
been assured by the intervenor that the stone monuments were
purposely placed, albeit wrongfully, by the land surveyor in said
land to specifically identify the lot and its inclusive boundaries, the
appellants cannot be faulted for having relied on the expertise of
the land surveyor who is more equipped and experienced in the
field of land surveying. Although under the Torrens system of land
registration, the appellant is presumed to have knowledge of the
metes and bounds of the property with which he is dealing,
appellant however, considering that he is a layman not versed in
the technical description of his property, cannot be faulted in his
reliance on the survey plan that was delivered to him by the
intervenor and the stone monuments that were placed in the
encroached property.
xxx xxx xxx
Peremptorily, contrary to the flawed pronouncements made by the
court a quo that appellant Miguel is deemed as a builder in bad
faith on the basis of a mere assertion that he built his house without
initially satisfying himself that he owns the said property, this Court
finds reason to maintain good faith on the part of the
appellant. Admittedly, the appellants' house erroneously
encroached on the property of the appellees due to a mistake in
the placement of stone monuments as indicated in the survey plan,
which error is directly attributable to the fault of the geodetic
engineer who conducted the same. This fact alone negates bad
faith on the part of appellant Miguel.
xxx xxx xxx
Moreover, it is quite illogical for appellant Miguel to knowingly build
his house on a property which he knew belongs to another person.
...
xxx xxx xxx
In view of the good faith of both parties in this case, their
rights and obligations are to be governed by Article 448,
which has been applied to improvements or portions of
improvements built by mistaken belief on land belonging to
the adjoining owner. . . .
xxx xxx xxx 20 (Emphasis and underscoring supplied)
Petitioners' Motion for Reconsideration 21 dated October 22, 2002
having been denied by the CA by Resolution of March 13, 2002,
the present petition was filed raising the following issues:
I.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
COMMITTED A GRAVE ABUSE OF DISCRETION IN MAKING A
FINDING THAT IS CONTRARY TO THE ADMISSIONS BY THE
PARTIES
II.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
COMMITTED A REVERSIBLE ERROR OF LAW IN
CONCLUDING THAT THE TRIAL COURT, IN DECIDING THE
CASE, RELIED ON FLIMSY, IF NOT IMMATERIAL,
ALLEGATIONS OF THE PETITIONERS, WHICH HAVE NO
DIRECT BEARING IN THE DETERMINATION OF WHETHER
THE RESPONDENTS ARE BUILDERS IN GOOD FAITH
III.
WHETHER OR NOT THE HONORABLE COURT OF APPEALS
COMMITTED A REVERSIBLE ERROR OF LAW IN RENDERING
A DECISION THAT IS UNENFORCEABLE AGAINST BOTH
RESPONDENT JUDITH CASTELLTORT AND THIRD-PARTY
ELIZABETH CRUZ 22
Petitioners initially hammer against respondents' proving
that Castelltort and a certain Elizabeth Cruz are the builders of the
house on the subject property, they faulting them with estoppel for
alleging in their Answer before the trial court that "they
(respondents Castelltort and Judith) caused the construction of
their house which they bought from a certain Lina Lopez-Villegas."
Petitioners rely on the following doctrine established in Elayda v.
Court of Appeals: 23
"an admission made in the pleadings cannot be controverted by
the party making such admission and are conclusive as to him and
that all proofs submitted by him contrary thereto or inconsistent
therewith, should be ignored, whether objection is interposed by
the party or not . . ."
Petitioners' contention is hardly relevant to the case at bar.
Whether it was Castelltort and Judith or Castelltort and Elizabeth
Cruz who purchased the property from Lina is not material to the
outcome of the instant controversy. As found by the CA:
The fact remains that appellant [Castelltort] is the builder of the
house on Lot 17 . . . The court a quo should have focused on the
issue of whether appellant Miguel built, in good faith, the subject
house without notice of the adverse claim of the appellees and
under the honest belief that the lot which he used in the
construction belongs to him. . . . it cannot be gainsaid that
appellant Miguel has a title over the land that was purchased from
the intervenor . . . 24
At all events, as this Court held in the case of Gardner v. Court of
Appeals: 25
In its Resolution reversing the original Decision, respondent Court
discredited the testimony of Ariosto SANTOS for being at variance
with the allegations in his Answer. The fact, however, that the
allegations made by Ariosto SANTOS in his pleadings and in his
declarations in open Court differed will not militate against the
findings herein made nor support the reversal by respondent
Court. As a general rule, facts alleged in a party's pleading are
deemed admissions of that party and binding upon it, but this is
not an absolute and inflexible rule. An Answer is a mere statement
of fact which the party filing it expects to prove, but it is not
evidence. As Ariosto SANTOS himself, in open Court, had
repudiated the defenses he had raised in his Answer and against
his own interest, his testimony is deserving of weight and
credence. 26 (Underscoring supplied)
The issue determinative of the controversy in the case at bar
hinges on whether Castelltort is a builder in good faith.
A builder in good faith is one who builds with the belief that the
land he is building on is his, or that by some title one has the right
to build thereon, and is ignorant of any defect or flaw in his title. 27
Article 527 of the Civil Code provides that good faith is always
presumed, and upon him who alleges bad faith on the part of a
possessor rests the burden of proof. 28
In the case at bar, Lot 16 was sold by Lina, through her attorney-
in-fact Villegas, to Castelltort and a certain Elizabeth Cruz 29 for a
consideration of P500,000.00. While prior to the sale, what
Villegas showed Castelltort as evidence of his mother Lina's
ownership of the property was only a photocopy of her title TCT
No. (T-42171) T-18550 30 he explaining that the owner's duplicate
of the title was lost and that judicial reconstitution thereof was
ongoing, Castelltort acted in the manner of a prudent man and
went to the Registry of Deeds of Laguna to procure a certified true
copy of the TCT. 31 The certified true copy bore no annotation
indicating any prior adverse claim on Lot 16. cEaSHC
The records indicate that at the time Castelltort began
constructing his house on petitioners' lot, he believed that it was
the Lot 16 he bought and delivered to him by Villegas.
In his cross-examination, Villegas testified:
Q: You said the surveyor placed a mujon along boundary of the
property?
A: Yes.
Q: When were the mujons placed in the boundary of the property?
A: These mujons were the basis for my locating the property in
pointing to Mr. Castelltort.
xxx xxx xxx
Q: Is it not a fact that before Miguel Castelltort started constructing
that house he sought your advice or permission to construct the
same over that particular lot?
A: Yes.
Q: And you gave your consent?
A: Yes, because based on my knowledge also that that was the
lot as pointed by Engr. Rivera.
xxx xxx xxx
Q: Was there any remarkable difference between lot 16 and 17 at
the time that this particular lot was sold to Miguel Castelltort and
Elizabeth Cruz?
xxx xxx xxx
A: Both lots 16 and 17 are practically the same. The (sic) have the
same frontage. There is only a difference of 4 square meters, one
is 311 square meters and the other 315 square meters. Both sides
were fenced, as drawn they were facing the same road. They are
practically the same.
Q: But at the time or immediately before Mr. Castelltort started the
construction of the house, was there any remarkable distinction
between these two properties?
A: None. 32 (Emphasis and underscoring supplied)
The confusion in the identification of Lot 16 was eventually traced
to the error committed by geodetic engineer Augusto Rivera's
employees in placing stone monuments on petitioners' property,
instead of on Lot 16, the lot sold to Castelltort, based on the survey
made by the engineer in 1992.
The engineer so testified:
Q: Now, aside from inspecting personally the site, what else did
your men or assistants do?
A: After computing the subdivision lots, they went back to the field
to plant those subdivision corners with concrete monuments.
Q: Which is (sic) also called as "mohons"?
A: Yes, sir.
Q: Now, can you point to this Honorable Court where exactly did
your men place these additional mohons and how many?
A: Later on we discovered that they placed the mohons in the
adjoining lot, lot 17.
xxx xxx xxx
Q: . . . when again did you meet Mr. Rene Villegas or after how
many months or year?
A: Maybe after a year, sir.
Q: And you met him again because he had a problem regarding
the property of one Engr. Rosales?
A: Yes, sir.
Q: And when he confided to you this matter, did you go to the site
of Lot 16 or 17?
A: Yes, sir.
Q: And what did you see there?
A: A house being constructed then I rechecked the location of the
house and it turned out to be in Lot 17.
xxx xxx xxx
Q: Considering that you found out that a mistake was actually
made by your assistants Dennis Orencio, Mario Carpio and
Sovejano when you allowed them to proceed on their own to make
this computation, did you confront these men of yours afterwards?
A: Yes, sir.
Q: In what manner?
A: I actually reprimanded them verbally and also I dismissed Mario
Carpio from my office.
xxx xxx xxx
Q: And did you investigate how your men committed this mistake
of planting these monuments on another lot when corners 4 & 1
were clearly planted on the ground?
A: I myself rechecked it and found out that they committed an
error.
xxx xxx xxx
Q: And now, you are saying that your men committed a mistake
by placing thereon monuments by planting these monuments not
on Lot 16 but on Lot 17?
A: When I investigated how did they commit (sic) a mistake it came
to be like this. Before when we surveyed first this in 1992, at that
time Dante Villegas contracted my services there was a fence here
then when we went back, the road was already removed so they
committed an error that this point is Lot 19, they thought that it was
Lot 19, the back portion.
xxx xxx xxx
Q: In this particular case, did you find out how your men checked
the succeeding lots, how they determine (sic) the exact location of
lot 16?
A: They just relied on one side of the subdivision.
Q: By just counting the number of lots?
A: Yes, sir.
Q: Without making any actual measurement?
A: They made an actual measurement but the reference point is
not the one, the correct one because they also checked it with the
other corner of the road going back.
xxx xxx xxx
Q: And how did they commit a mistake when you said they
checked the lot at the back of Lot 16?
A: Because they were quite confident since we had already
relocated the property two years ago so they thought that they get
(sic) the right lot without checking the other side of the subdivision.
xxx xxx xxx
Q: Now, you said that when you went to the place because you
heard from Rene Villegas that there was a mistake you no longer
could find the monuments on lines 1 and 4 and according to you
the reason is that a fence was already constructed?
A: Yes, sir.
Q: For clarification, is this line 1 & 4 on Lot 16 a common line 1 &
4 on Lot 17?
A: Yes, sir a common line.
Q: In other words, this line 1 & 4 devides (sic) Lot 16 & 17?
A: Yes, sir.
Q: So that when these monuments were placed on lines 1 & 4
somebody could mistake it for Lot 17 also because there were
monuments now 1 & 4 for lot 16 since these are common lines for
Lot 17 also with Lot 16, it could also be construed that these are
monuments for Lot 17?
A: Yes, sir possible. 33 (Underscoring supplied)
As correctly found by the CA, both parties having acted in good
faith at least until August 21, 1995, the applicable provision in this
case is Article 448 of the Civil Code which reads:
Art. 448. The owner of the land on which anything has been built,
sown or planted in good faith, shall have the right to appropriate
as his own the works, sowing or planting, after payment of the
indemnity provided for in Articles 546 and 548, or to oblige the one
who built or planted to pay the price of the land, and the one who
sowed, the proper rent. However, the builder or planter cannot be
obliged to buy the land if its value is considerably more than that
of the building or trees. In such case, he shall pay reasonable rent,
if the owner of the land does not choose to appropriate the building
or trees after proper indemnity. The parties shall agree upon the
terms of the lease and in case of disagreement, the court shall fix
the terms thereof.
Under the foregoing provision, the landowner can choose between
appropriating the building by paying the proper indemnity or
obliging the builder to pay the price of the land, unless its value is
considerably more than that of the structures, in which case the
builder in good faith shall pay reasonable rent. 34 If the parties
cannot come to terms over the conditions of the lease, the court
must fix the terms thereof.
The choice belongs to the owner of the land, a rule that accords
with the principle of accession, i.e., that the accessory follows the
principal and not the other way around. Even as the option lies with
the landowner, the grant to him, nevertheless, is
preclusive. 35 The landowner cannot refuse to exercise either
option and compel instead the owner of the building to remove it
from the land. 36
The raison d'etre for this provision has been enunciated thus:
Where the builder, planter or sower has acted in good faith, a
conflict of rights arises between the owners, and it becomes
necessary to protect the owner of the improvements without
causing injustice to the owner of the land. In view of the
impracticability of creating a state of forced co-ownership, the law
has provided a just solution by giving the owner of the land the
option to acquire the improvements after payment of the proper
indemnity, or to oblige the builder or planter to pay for the land and
the sower the proper rent. He cannot refuse to exercise either
option. It is the owner of the land who is authorized to exercise the
option, because his right is older, and because, by the principle of
accession, he is entitled to the ownership of the accessory
thing. 37
Possession acquired in good faith does not lose this character
except in the case and from the moment facts exist which show
that the possessor is not unaware that he possesses the thing
improperly or wrongfully. 38 The 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 suit for recovery
of the property by the true owner. 39
In the case at bar, Castelltort's good faith ceased on August 21,
1995 when petitioners personally apprised him of their title over
the questioned lot. As held by the CA, should petitioners then opt
to appropriate the house, they should only be made to pay for that
part of the improvement built by Castelltort on the questioned
property at the time good faith still existed on his part or until
August 21, 1995.
The CA, however, failed to qualify that said part of the
improvement should be pegged at its current fair market value
consistent with this Court's pronouncement in Pecson v. Court of
Appeals. 40
And, as correctly found by the CA, the commencement
of Castelltort's payment of reasonable rent should start on August
21, 1995 as well, to be paid until such time that the possession of
the property is delivered to petitioners, subject to the
reimbursement of expenses, that is, if such option is for petitioners
to appropriate the house.
This Court quotes the CA's ratiocination with approval:
. . . Generally, Article 448 of the Civil Code provides that the
payment of reasonable rent should be made only up to the date
appellees serve notice of their option as provided by law upon the
appellants and the court a quo; that is, if such option is for
appellees to appropriate the encroaching structure. In such event,
appellants would have a right to retain the land on which they have
built in good faith until they are reimbursed the expenses incurred
by them. This is so because the right to retain the improvements
while the corresponding indemnity is not paid implies the tenancy
or possession in fact of the land on which it is built, planted or
sown.
However, considering that appellants had ceased as builders in
good faith at the time that appellant Miguel was notified of
appellees' lawful title over the disputed property, the payment of
reasonable rent should accordingly commence at that time since
he can no longer avail of the rights provided under the law for
builders in good faith. 41
If the option chosen by petitioners is compulsory sale, however,
the payment of rent should continue up to the actual transfer of
ownership. 42
Respecting petitioners' argument that the appellate court erred in
rendering a decision that is "unenforceable against Judith who is
not the owner of the house and Elizabeth Cruz who was found to
be a part owner of the house built on their lot but is not a party to
the case," the same does not lie. ISTHED
While one who is not a party to a proceeding shall not be affected
or bound 43 by a judgment rendered therein, 44 like Elizabeth
Cruz, this does not detract from the validity and enforceability of
the judgment on petitioners and respondents Castelltorts.
WHEREFORE, the petition is DENIED. The Decision dated
October 2, 2002 and Resolution dated February 6, 2003 of the
Court of Appeals are AFFIRMED with MODIFICATION such that
the trial court shall include for determination the increase in value
("plus value") which petitioners' 315 square meter lot may have
acquired by reason of the existence of that portion of the house
built before respondents Miguel and Judith Castelltort were
notified of petitioners' rightful claim on said lot, and the current fair
market value of said portion.
SO ORDERED.
||| (Rosales v. Castelltort, G.R. No. 157044, [October 5, 2005], 509
PHIL 137-156)
TORBELA v. ROSARIO
FIRST DIVISION
[G.R. No. 140528. December 7, 2011.]
MARIA TORBELA, represented by her heirs, namely:
EULOGIO TOSINO, husband and children: CLARO,
MAXIMINO, CORNELIO, OLIVIA and CALIXTA, all surnamed
TOSINO, APOLONIA TOSINO VDA. DE RAMIREZ and JULITA
TOSINO DEAN; PEDRO TORBELA, represented by his heirs,
namely: JOSE and DIONISIO, both surnamed TORBELA;
EUFROSINA TORBELA ROSARIO, represented by her heirs,
namely: ESTEBAN T. ROSARIO, MANUEL T. ROSARIO,
ROMULO T. ROSARIO and ANDREA ROSARIO-HADUCA;
LEONILA TORBELA TAMIN; FERNANDO TORBELA,
represented by his heirs, namely: SERGIO T. TORBELA,
EUTROPIA T. VELASCO, PILAR T. ZULUETA, CANDIDO T.
TORBELA, FLORENTINA T. TORBELA and PANTALEON T.
TORBELA; DOLORES TORBELA TABLADA; LEONORA
TORBELA AGUSTIN, represented by her heirs, namely:
PATRICIO, SEGUNDO, CONSUELO and FELIX, all surnamed
AGUSTIN; and SEVERINA TORBELA
ILDEFONSO,petitioners, vs. SPOUSES ANDRES T. ROSARIO
and LENA DUQUE-ROSARIO and BANCO FILIPINO SAVINGS
AND MORTGAGE BANK, respondents.
[G.R. No. 140553. December 7, 2011.]
LENA DUQUE-ROSARIO, petitioner, vs. BANCO FILIPINO
SAVINGS AND MORTGAGE BANK, respondent.
DECISION
LEONARDO-DE CASTRO, J p:
Presently before the Court are two consolidated Petitions for
Review on Certiorari under Rule 45 of the Rules of Court, both
assailing the Decision 1 dated June 29, 1999 and
Resolution 2 dated October 22, 1999 of the Court of Appeals in
CA-G.R. CV No. 39770.
The petitioners in G.R. No. 140528 are siblings Maria
Torbela, 3 Pedro Torbela, 4 Eufrosina Torbela Rosario, 5 Leonila
Torbela Tamin, Fernando Torbela, 6 Dolores Torbela Tablada,
Leonora Torbela Agustin, 7 and Severina Torbela Ildefonso
(Torbela siblings).
The petitioner in G.R. No. 140553 is Lena Duque-Rosario (Duque-
Rosario), who was married to, but now legally separated from, Dr.
Andres T. Rosario (Dr. Rosario). Dr. Rosario is the son of
Eufrosina Torbela Rosario and the nephew of the other Torbela
siblings.
The controversy began with a parcel of land, with an area of 374
square meters, located in Urdaneta City, Pangasinan (Lot No. 356-
A). It was originally part of a larger parcel of land, known as Lot
No. 356 of the Cadastral Survey of Urdaneta, measuring 749
square meters, and covered by Original Certificate of Title (OCT)
No. 16676, 8 in the name of Valeriano Semilla (Valeriano), married
to Potenciana Acosta. Under unexplained circumstances,
Valeriano gave Lot No. 356-A to his sister Marta Semilla, married
to Eugenio Torbela (spouses Torbela). Upon the deaths of the
spouses Torbela, Lot No. 356-A was adjudicated in equal shares
among their children, the Torbela siblings, by virtue of a Deed of
Extrajudicial Partition 9 dated December 3, 1962.
On December 12, 1964, the Torbela siblings executed a Deed of
Absolute Quitclaim 10 over Lot No. 356-A in favor of Dr. Rosario.
According to the said Deed, the Torbela siblings "for and in
consideration of the sum of NINE PESOS (P9.00) . . . transfer[red]
and convey[ed] . . . unto the said Andres T. Rosario, that undivided
portion of THREE HUNDRED SEVENTY-FOUR square meters of
that parcel of land embraced in Original Certificate of Title No.
16676 of the land records of Pangasinan . . . ." 11 Four days later,
on December 16, 1964, OCT No. 16676 in Valeriano's name was
partially cancelled as to Lot No. 356-A and TCT No. 52751 12 was
issued in Dr. Rosario's name covering the said property.
Another Deed of Absolute Quitclaim 13 was subsequently
executed on December 28, 1964, this time by Dr. Rosario,
acknowledging that he only borrowed Lot No. 356-A from the
Torbela siblings and was already returning the same to the latter
for P1.00. The Deed stated: ECSHID
That for and in consideration of the sum of one peso (P1.00),
Philippine Currency and the fact that I only borrowed the above
described parcel of land from MARIA TORBELA, married to
Eulogio Tosino, EUFROSINA TORBELA, married to Pedro
Rosario, PEDRO TORBELA, married to Petra Pagador, LEONILA
TORBELA, married to Fortunato Tamen, FERNANDO TORBELA,
married to Victoriana Tablada, DOLORES TORBELA, widow,
LEONORA TORBELA, married to Matias Agustin and SEVERINA
TORBELA, married to Jorge Ildefonso, . . . by these presents do
hereby cede, transfer and convey by way of this ABSOLUTE
QUITCLAIM unto the said Maria, Eufrosina, Pedro, Leonila,
Fernando, Dolores, Leonora and Severina, all surnamed Torbela
the parcel of land described above. 14 (Emphasis ours.)
The aforequoted Deed was notarized, but was not immediately
annotated on TCT No. 52751.
Following the issuance of TCT No. 52751, Dr. Rosario obtained a
loan from the Development Bank of the Philippines (DBP) on
February 21, 1965 in the sum of P70,200.00, secured by a
mortgage constituted on Lot No. 356-A. The mortgage was
annotated on TCT No. 52751 on September 21, 1965 as Entry
No. 243537. 15 Dr. Rosario used the proceeds of the loan for the
construction of improvements on Lot No. 356-A.
On May 16, 1967, Cornelio T. Tosino (Cornelio) executed an
Affidavit of Adverse Claim, 16 on behalf of the Torbela siblings.
Cornelio deposed in said Affidavit:
3. That ANDRES T. ROSARIO later quitclaimed his rights in favor
of the former owners by virtue of a Deed of Absolute Quitclaim
which he executed before Notary Public Banaga, and entered in
his Notarial Registry as Dec. No. 43; Page No. 9; Book No. I;
Series of 1964;
4. That it is the desire of the parties, my aforestated kins, to
register ownership over the above-described property or to perfect
their title over the same but their Deed could not be registered
because the registered owner now, ANDRES T. ROSARIO
mortgaged the property with the DEVELOPMENT BANK OF THE
PHILIPPINES, on September 21, 1965, and for which reason, the
Title is still impounded and held by the said bank;
5. That pending payment of the obligation with the
DEVELOPMENT BANK OF THE PHILIPPINES or redemption of
the Title from said bank, I, CORNELIO T. TOSINO, in behalf of my
mother MARIA TORBELA-TOSINO, and my Aunts EUFROSINA
TORBELA, LEONILA TORBELA-TAMEN, DOLORES TORBELA,
LEONORA TORBELA-AGUSTIN, SEVERINA TORBELA-
ILDEFONSO, and my Uncles PEDRO TORBELA and
FERNANDO, also surnamed TORBELA, I request the Register of
Deeds of Pangasinan to annotate their adverse claim at the back
of Transfer Certificate of Title No. 52751, based on the annexed
document, Deed of Absolute Quitclaim by ANDRES T. ROSARIO,
dated December 28, 1964, marked as Annex "A" and made a part
of this Affidavit, and it is also requested that the DEVELOPMENT
BANK OF THE PHILIPPINES be informed accordingly. 17
The very next day, on May 17, 1967, the Torbela siblings had
Cornelio's Affidavit of Adverse Claim dated May 16, 1967 and Dr.
Rosario's Deed of Absolute Quitclaim dated December 28, 1964
annotated on TCT No. 52751 as Entry Nos.
274471 18 and 274472, 19 respectively.
The construction of a four-storey building on Lot No. 356-A was
eventually completed. The building was initially used as a hospital,
but was later converted to a commercial building. Part of the
building was leased to PT&T; and the rest to Mrs. Andrea Rosario-
Haduca, Dr. Rosario's sister, who operated the Rose Inn Hotel and
Restaurant.
Dr. Rosario was able to fully pay his loan from DBP. Under Entry
No. 520197 on TCT No. 52751 20 dated March 6, 1981, the
mortgage appearing under Entry No. 243537 was cancelled per
the Cancellation and Discharge of Mortgage executed by DBP in
favor of Dr. Rosario and ratified before a notary public on July 11,
1980. cDCHaS
In the meantime, Dr. Rosario acquired another loan from the
Philippine National Bank (PNB) sometime in 1979-1981. Records
do not reveal though the original amount of the loan from PNB, but
the loan agreement was amended on March 5, 1981 and the loan
amount was increased to P450,000.00. The loan was secured by
mortgages constituted on the following properties: (1) Lot No. 356-
A, covered by TCT No. 52751 in Dr. Rosario's name; (2) Lot No.
4489, with an area of 1,862 square meters, located in Dagupan
City, Pangasinan, covered by TCT No. 24832; and (3) Lot No. 5-
F-8-C-2-B-2-A, with an area of 1,001 square meters, located in
Nancayasan, Urdaneta, Pangasinan, covered by TCT No.
104189. 21 The amended loan agreement and mortgage on Lot
No. 356-A was annotated on TCT No. 52751 on March 6, 1981
as Entry No. 520099. 22
Five days later, on March 11, 1981, another annotation, Entry No.
520469, 23 was made on TCT No. 52751, canceling the adverse
claim on Lot No. 356-A under Entry Nos. 274471-274472, on the
basis of the Cancellation and Discharge of Mortgage executed by
Dr. Rosario on March 5, 1981. Entry No. 520469 consisted of both
stamped and handwritten portions, and exactly reads:
Entry No. 520469. Cancellation of Adverse Claim executed
by Andres Rosario in favor of same. The incumbrance/mortgage
appearing under Entry No. 274471-72 is now cancelled as per
Cancellation and Discharge of Mortgage Ratified before Notary
Public Mauro G. Meris on March 5, 1981: Doc. No. 215; Page
No. 44; Book No. 1; Series of 1981.
Lingayen, Pangasinan, 3-11, 19981 n
[Signed: Pedro dela Cruz]
Register of Deeds 24
On December 8, 1981, Dr. Rosario and his wife, Duque-Rosario
(spouses Rosario), acquired a third loan in the amount of
P1,200,000.00 from Banco Filipino Savings and Mortgage Bank
(Banco Filipino). To secure said loan, the spouses Rosario again
constituted mortgages on Lot No. 356-A, Lot No. 4489, and Lot
No. 5-F-8-C-2-B-2-A. The mortgage on Lot No. 356-A was
annotated on TCT No. 52751 as Entry No. 533283 25 on
December 18, 1981. Since the construction of a two-storey
commercial building on Lot No. 5-F-8-C-2-B-2-A was still
incomplete, the loan value thereof as collateral was deducted from
the approved loan amount. Thus, the spouses Rosario could only
avail of the maximum loan amount of P830,064.00 from Banco
Filipino.
Because Banco Filipino paid the balance of Dr. Rosario's loan from
PNB, the mortgage on Lot No. 356-A in favor of PNB was
cancelled per Entry No. 533478 26 on TCT No. 52751 dated
December 23, 1981.
On February 13, 1986, the Torbela siblings filed before the
Regional Trial Court (RTC) of Urdaneta, Pangasinan, a Complaint
for recovery of ownership and possession of Lot No. 356-A, plus
damages, against the spouses Rosario, which was docketed
as Civil Case No. U-4359. On the same day, Entry Nos. 593493
and 593494 were made on TCT No. 52751 that read as follows:
Entry No. 593494 Complaint Civil Case No. U-4359 (For:
Recovery of Ownership and Possession and Damages. (Sup.
Paper).
Entry No. 593493 Notice of Lis Pendens The parcel of land
described in this title is subject to Lis Pendens executed by Liliosa
B. Rosario, CLAO, Trial Attorney dated February 13, 1986. Filed
to TCT No. 52751 February 13, 1986-1986 February 13 3:30
p.m.
(SGD.) PACIFICO M. BRAGANZA
Register of Deeds 27
The spouses Rosario afterwards failed to pay their loan from
Banco Filipino. As of April 2, 1987, the spouses Rosario's
outstanding principal obligation and penalty charges amounted to
P743,296.82 and P151,524.00, respectively. 28
Banco Filipino extrajudicially foreclosed the mortgages on Lot No.
356-A, Lot No. 4489, and Lot No. 5-F-8-C-2-B-2-A. During the
public auction on April 2, 1987, Banco Filipino was the lone bidder
for the three foreclosed properties for the price of P1,372,387.04.
The Certificate of Sale 29 dated April 2, 1987, in favor of Banco
Filipino, was annotated on TCT No. 52751 on April 14, 1987
as Entry No. 610623. 30
On December 9, 1987, the Torbela siblings filed before the RTC
their Amended Complaint, 31 impleading Banco Filipino as
additional defendant in Civil Case No. U-4359 and praying that the
spouses Rosario be ordered to redeem Lot No. 356-A from Banco
Filipino. cSIADH
The spouses Rosario instituted before the RTC on March 4, 1988
a case for annulment of extrajudicial foreclosure and damages,
with prayer for a writ of preliminary injunction and temporary
restraining order, against Banco Filipino, the Provincial Ex
Officio Sheriff and his Deputy, and the Register of Deeds of
Pangasinan. The case was docketed as Civil Case No. U-4667.
Another notice of lis pendens was annotated on TCT No. 52751
on March 10, 1988 as Entry No. 627059, viz.:
Entry No. 627059 Lis Pendens Dr. Andres T. Rosario and
Lena Duque Rosario, Plaintiff versus Banco Filipino, et al. Civil
Case No. U-4667 or Annulment of Extrajudicial Foreclosure of
Real Estate Mortgage The parcel of land described in this title
is subject to Notice of Lis Pendens subscribed and sworn to before
Notary Public Mauro G. Meris, as Doc. No. 21; Page No. 5; Book
111; S-1988. March 7, 1988-1988 * March 10, 1:00 p.m.
(SGD.) RUFINO M. MORENO, SR.
Register of Deeds 32
The Torbela siblings intervened in Civil Case No. U-4667.
Eventually, on October 17, 1990, the RTC issued an
Order 33 dismissing without prejudice Civil Case No. U-4667 due
to the spouses Rosario's failure to prosecute.
Meanwhile, the Torbela siblings tried to redeem Lot No. 356-A
from Banco Filipino, but their efforts were unsuccessful. Upon the
expiration of the one-year redemption period in April 1988, the
Certificate of Final Sale 34 and Affidavit of
Consolidation 35 covering all three foreclosed properties were
executed on May 24, 1988 and May 25, 1988, respectively.
On June 7, 1988, new certificates of title were issued in the name
of Banco Filipino, particularly, TCT No. 165812 for Lot No. 5-F-8-
C-2-B-2-A and TCT No. 165813 for Lot No. 356-A. 36
The Torbela siblings thereafter filed before the RTC on August 29,
1988 a Complaint 37 for annulment of the Certificate of Final Sale
dated May 24, 1988, judicial cancellation of TCT No. 165813, and
damages, against Banco Filipino, the Ex Officio Provincial Sheriff,
and the Register of Deeds of Pangasinan, which was docketed
as Civil Case No. U-4733.
On June 19, 1991, Banco Filipino filed before the RTC of Urdaneta
City a Petition for the issuance of a writ of possession. In said
Petition, docketed as Pet. Case No. U-822, Banco Filipino prayed
that a writ of possession be issued in its favor over Lot No. 5-F-8-
C-2-B-2-A and Lot No. 356-A, plus the improvements thereon, and
the spouses Rosario and other persons presently in possession of
said properties be directed to abide by said writ.
The RTC jointly heard Civil Case Nos. U-4359 and U-4733 and
Pet. Case No. U-822. The Decision 38 on these three cases was
promulgated on January 15, 1992, the dispositive portion of which
reads:
WHEREFORE, judgment is rendered:
1. Declaring the real estate mortgage over Lot 356-A covered by
TCT 52751 executed by Spouses Andres Rosario in favor of
Banco Filipino, legal and valid;
2. Declaring the sheriff's sale dated April 2, 1987 over Lot 356-A
covered by TCT 52751 and subsequent final Deed of Sale dated
May 14, 1988 over Lot 356-A covered by TCT No. 52751 legal and
valid;
3. Declaring Banco Filipino the owner of Lot 356-A covered by
TCT No. 52751 (now TCT 165813);
4. Banco Filipino is entitled to a Writ of Possession over Lot 356-
A together with the improvements thereon (Rose Inn Building).
The Branch Clerk of Court is hereby ordered to issue a writ of
possession in favor of Banco Filipino;
5. [The Torbela siblings] are hereby ordered to render accounting
to Banco Filipino the rental they received from tenants of Rose Inn
Building from May 14, 1988;
6. [The Torbela siblings] are hereby ordered to pay Banco Filipino
the sum of P20,000.00 as attorney's fees;
7. Banco Filipino is hereby ordered to give [the Torbela siblings]
the right of first refusal over Lot 356-A. The Register of Deeds is
hereby ordered to annotate the right of [the Torbela siblings] at the
back of TCT No. 165813 after payment of the required
fees; cCSEaA
8. Dr. Rosario and Lena Rosario are hereby ordered to reimburse
[the Torbela siblings] the market value of Lot 356-A as of
December, 1964 minus payments made by the former;
9. Dismissing the complaint of [the Torbela siblings] against Banco
Filipino, Pedro Habon and Rufino Moreno in Civil Case No. U-
4733; and against Banco Filipino in Civil Case No. U-4359. 39
The RTC released an Amended Decision 40 dated January 29,
1992, adding the following paragraph to the dispositive:
Banco Filipino is entitled to a Writ of Possession over Lot-5-F-8-C-
2-[B]-2-A of the subdivision plan (LRC) Psd-122471, covered by
Transfer Certificate of Title 104189 of the Registry of Deeds of
Pangasinan[.] 41
The Torbela siblings and Dr. Rosario appealed the foregoing RTC
judgment before the Court of Appeals. Their appeal was docketed
as CA-G.R. CV No. 39770.
In its Decision 42 dated June 29, 1999, the Court of Appeals
decreed:
WHEREFORE, foregoing considered, the appealed decision is
hereby AFFIRMED with modification. Items Nos. 6 and 7 of the
appealed decision are DELETED. Item No. 8 is modified requiring
[Dr. Rosario] to pay [the Torbela siblings] actual damages, in the
amount of P1,200,000.00 with 6% per annum interest from finality
of this decision until fully paid. [Dr. Rosario] is
further ORDERED to pay [the Torbela siblings] the amount of
P300,000.00 as moral damages; P200,000.00 as exemplary
damages and P100,000.00 as attorney's fees.
Costs against [Dr. Rosario]. 43
The Court of Appeals, in a Resolution 44 dated October 22, 1999,
denied the separate Motions for Reconsideration of the Torbela
siblings and Dr. Rosario.
The Torbela siblings come before this Court via the Petition for
Review in G.R. No. 140528, with the following assignment of
errors:
First Issue and Assignment of Error:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
NOT FINDING THAT THE REGISTRATION OF THE DEED OF
ABSOLUTE QUITCLAIM EXECUTED BY [DR. ANDRES T.
ROSARIO] IN FAVOR OF THE [TORBELA SIBLINGS] DATED
DECEMBER 28, 1964 AND THE REGISTRATION OF THE
NOTICE OF ADVERSE CLAIM EXECUTED BY THE [TORBELA
SIBLINGS], SERVE AS THE OPERATIVE ACT TO CONVEY OR
AFFECT THE LAND AND IMPROVEMENTS THEREOF IN SO
FAR AS THIRD PERSONS ARE CONCERNED.
Second Issue and Assignment of Error:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
FINDING THAT THE SUBJECT PROPERTY COVERED BY
T.C.T. NO. 52751 IS CLEAN AND FREE, DESPITE OF THE
ANNOTATION OF ENCUMBRANCES OF THE NOTICE OF
ADVERSE CLAIM AND THE DEED OF ABSOLUTE QUITCLAIM
APPEARING AT THE BACK THEREOF AS ENTRY NOS. 274471
AND 274472, RESPECTIVELY.
Third Issue and Assignment of Error:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
FINDING THAT THE NOTICE OF ADVERSE CLAIM OF THE
[TORBELA SIBLINGS] UNDER ENTRY NO. 274471 WAS
VALIDLY CANCELLED BY THE REGISTER OF DEEDS, IN THE
ABSENCE OF A PETITION DULY FILED IN COURT FOR ITS
CANCELLATION.
Fourth Issue and Assignment of Error:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
FINDING THAT RESPONDENT BANCO FILIPINO SAVINGS
AND MORTGAGE BANK IS A MORTGAGEE IN GOOD
FAITH. CaTcSA
Fifth Issue and Assignment of Error:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
NOT FINDING THAT THE FILING OF A CIVIL CASE NO. U-4359
ON DECEMBER 9, 1987, IMPLEADING RESPONDENT BANCO
FILIPINO AS ADDITIONAL PARTY DEFENDANT, TOLL OR
SUSPEND THE RUNNING OF THE ONE YEAR PERIOD OF
REDEMPTION.
Sixth Issue and Assignment of Error:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
NOT FINDING THAT THE OWNERSHIP OVER THE SUBJECT
PROPERTY WAS PREMATURELY CONSOLIDATED IN FAVOR
OF RESPONDENT BANCO FILIPINO SAVINGS AND
MORTGAGE BANK.
Seventh Issue and Assignment of Error:
THE HONORABLE COURT OF APPEALS GRAVELY ERRED IN
FINDING THAT THE SUBJECT PROPERTY IS AT LEAST
WORTH P1,200,000.00. 45
The Torbela siblings ask of this Court:
WHEREFORE, in the light of the foregoing considerations, the
[Torbela siblings] most respectfully pray that the questioned
DECISION promulgated on June 29, 1999 (Annex "A", Petition)
and the RESOLUTION dated October 22, 1999 (Annex "B",
Petition) be REVERSED and SET ASIDE, and/or further
MODIFIED in favor of the [Torbela siblings], and another
DECISION issue ordering, among other reliefs, the respondent
Banco Filipino to reconvey back Lot No. 356-A, covered by T.C.T.
No. 52751, in favor of the [Torbela siblings] who are the actual
owners of the same.
The [Torbela siblings] likewise pray for such other reliefs and
further remedies as may be deemed just and equitable under the
premises. 46
Duque-Rosario, now legally separated from Dr. Rosario, avers in
her Petition for Review in G.R. No. 140553 that Lot No. 4489 and
Lot No. 5-F-8-C-2-B-2-A were registered in her name, and she was
unlawfully deprived of ownership of said properties because of the
following errors of the Court of Appeals:
A relates to the performance of his official functions;
THE HON. COURT OF APPEALS PATENTLY ERRED IN NOT
FINDING THAT THE PERIOD TO REDEEM THE PROPERTY
HAS NOT COMMENCED, HENCE, THE CERTIFICATE OF
SALE, THE CONSOLIDATION OF OWNERSHIP BY [BANCO
FILIPINO], ARE NULL AND VOID.
B Minister of Justice and the Minister of Local Government.
THE COURT OF APPEALS PATENTLY ERRED IN REFUSING
TO RULE THAT THE FILING OF THE COMPLAINT BEFORE
THE COURT A QUO BY THE [TORBELA SIBLINGS] HAD
ALREADY BEEN PRESCRIBED. 47
Duque-Rosario prays that the appealed decision of the Court of
Appeals be reversed and set aside, and that Lot No. 4489 and Lot
No. 5-F-8-C-2-B-2-A be freed from all obligations and
encumbrances and returned to her.
Review of findings of fact by the
RTC and the Court of Appeals
warranted.
A disquisition of the issues raised and/or errors assigned in the
Petitions at bar unavoidably requires a re-evaluation of the facts
and evidence presented by the parties in the court a quo.
In Republic v. Heirs of Julia Ramos, 48 the Court summed up the
rules governing the power of review of the Court:
Ordinarily, this Court will not review, much less reverse, the factual
findings of the Court of Appeals, especially where such findings
coincide with those of the trial court. The findings of facts of the
Court of Appeals are, as a general rule, conclusive and binding
upon this Court, since this Court is not a trier of facts and does not
routinely undertake the re-examination of the evidence presented
by the contending parties during the trial of the case. TESDcA
The above rule, however, is subject to a number of exceptions,
such as (1) when the inference made is manifestly mistaken,
absurd or impossible; (2) when there is grave abuse of discretion;
(3) when the finding is grounded entirely on speculations,
surmises, or conjectures; (4) when the judgment of the Court of
Appeals is based on misapprehension of facts; (5) when the
findings of fact are conflicting; (6) when the Court of Appeals, in
making its findings, went beyond the issues of the case and the
same is contrary to the admissions of both parties; (7) when the
findings of the Court of Appeals are contrary to those of the trial
court; (8) when the findings of fact are conclusions without citation
of specific evidence on which they are based; (9) when the Court
of Appeals manifestly overlooked certain relevant facts not
disputed by the parties and which, if properly considered, would
justify a different conclusion; and (10) when the findings of fact of
the Court of Appeals are premised on the absence of evidence
and are contradicted by the evidence on record. 49
As the succeeding discussion will bear out, the first, fourth, and
ninth exceptions are extant in these case.
Barangay conciliation was not a
pre-requisite to the institution of Civil
Case No. U-4359.
Dr. Rosario contends that Civil Case No. U-4359, the Complaint of
the Torbela siblings for recovery of ownership and possession of
Lot No. 356-A, plus damages, should have been dismissed by the
RTC because of the failure of the Torbela siblings to comply with
the prior requirement of submitting the dispute
to barangay conciliation.
The Torbela siblings instituted Civil Case No. U-4359 on February
13, 1986, when Presidential Decree No. 1508, Establishing a
System of Amicably Settling Disputes at the Barangay Level, was
still in effect. 50 Pertinent provisions of said issuance read:
Section 2. Subject matters for amicable settlement.
The Lupon of each barangay shall have authority to bring together
the parties actually residing in the same city or
municipality for amicable settlement of all disputes except:
1. Where one party is the government, or any subdivision or
instrumentality thereof;
2. Where one party is a public officer or employee, and the dispute
3. Offenses punishable by imprisonment exceeding 30 days, or a
fine exceeding P200.00;
4. Offenses where there is no private offended party;
5. Such other classes of disputes which the Prime Minister may in
the interest of justice determine upon recommendation of the
Section 3. Venue. Disputes between or among persons
actually residing in the same barangay shall be brought for
amicable settlement before the Lupon of said barangay.Those
involving actual residents of different barangays within the same
city or municipality shall be brought in the barangay where the
respondent or any of the respondents actually resides, at the
election of the complainant. However, all disputes which
involved real property or any interest therein shall be brought
in the barangay where the real property or any part thereof is
situated.
The Lupon shall have no authority over disputes:
1. involving parties who actually reside in barangays of
different cities or municipalities, except where
such barangays adjoin each other; and
2. involving real property located in different municipalities.
xxx xxx xxx
Section 6. Conciliation, pre-condition to filing of complaint. No
complaint, petition, action or proceeding involving any matter
within the authority of the Lupon as provided in Section 2 hereof
shall be filed or instituted in court or any other government office
for adjudication unless there has been a confrontation of the
parties before the Lupon Chairman or the Pangkat and no
conciliation or settlement has been reached as certified by the
Lupon Secretary or the Pangkat Secretary, attested by
the Lupon or Pangkat Chairman, or unless the settlement has
been repudiated. . . . . (Emphases supplied.) TASCEc
The Court gave the following elucidation on the jurisdiction of
the Lupong Tagapayapa in Tavora v. Hon. Veloso: 51
The foregoing provisions are quite clear. Section 2 specifies the
conditions under which the Lupon of a barangay "shall have
authority" to bring together the disputants for amicable settlement
of their dispute: The parties must be "actually residing in the
same city or municipality." At the same time, Section 3 while
reiterating that the disputants must be "actually residing in the
same barangay" or in "different barangays" within the same city or
municipality unequivocably declares that the Lupon shall have
"no authority" over disputes "involving parties who actually reside
in barangays of different cities or municipalities," except where
such barangays adjoin each other.
Thus, by express statutory inclusion and exclusion,
the Lupon shall have no jurisdiction over disputes where the
parties are not actual residents of the same city or
municipality, except where the barangays in which they
actually reside adjoin each other.
It is true that immediately after specifying
the barangay whose Lupon shall take cognizance of a given
dispute, Sec. 3 of PD 1508 adds:
"However, all disputes which involve real property or any interest
therein shall be brought in the barangay where the real property or
any part thereof is situated."
Actually, however, this added sentence is just an
ordinary proviso and should operate as such.
The operation of a proviso, as a rule, should be limited to its normal
function, which is to restrict or vary the operation of the principal
clause, rather than expand its scope, in the absence of a clear
indication to the contrary.
"The natural and appropriate office of a proviso is . . . to except
something from the enacting clause; to limit, restrict, or qualify the
statute in whole or in part; or to exclude from the scope of the
statute that which otherwise would be within its terms." (73 Am Jur
2d 467.)
Therefore, the quoted proviso should simply be deemed to restrict
or vary the rule on venue prescribed in the principal clauses of the
first paragraph of Section 3, thus: Although venue is generally
determined by the residence of the parties, disputes involving
real property shall be brought in the barangay where the real
property or any part thereof is situated, notwithstanding that
the parties reside elsewhere within the same
city/municipality. 52 (Emphases supplied.)
The original parties in Civil Case No. U-4359 (the Torbela siblings
and the spouses Rosario) do not reside in the same barangay, or
in different barangays within the same city or municipality, or in
different barangays of different cities or municipalities but are
adjoining each other. Some of them reside outside Pangasinan
and even outside of the country altogether. The Torbela siblings
reside separately in Barangay Macalong, Urdaneta, Pangasinan;
Barangay Consolacion, Urdaneta, Pangasinan; Pangil, Laguna;
Chicago, United States of America; and Canada. The spouses
Rosario are residents of Calle Garcia, Poblacion, Urdaneta,
Pangasinan. Resultantly, the Lupon had no jurisdiction over the
dispute and barangay conciliation was not a pre-condition for the
filing of Civil Case No. U-4359.
The Court now looks into the merits of Civil Case No. U-4359.
There was an express trust between
the Torbela siblings and Dr. Rosario.
There is no dispute that the Torbela sibling inherited the title to Lot
No. 356-A from their parents, the Torbela spouses, who, in turn,
acquired the same from the first registered owner of Lot No. 356-
A, Valeriano.
Indeed, the Torbela siblings executed a Deed of Absolute
Quitclaim on December 12, 1964 in which they transferred and
conveyed Lot No. 356-A to Dr. Rosario for the consideration of
P9.00. However, the Torbela siblings explained that they only
executed the Deed as an accommodation so that Dr. Rosario
could have Lot No. 356-A registered in his name and use said
property to secure a loan from DBP, the proceeds of which would
be used for building a hospital on Lot No. 356-A a claim
supported by testimonial and documentary evidence, and borne
out by the sequence of events immediately following the execution
by the Torbela siblings of said Deed. On December 16, 1964, TCT
No. 52751, covering Lot No. 356-A, was already issued in Dr.
Rosario's name. On December 28, 1964, Dr. Rosario executed
his own Deed of Absolute Quitclaim, in which he expressly
acknowledged that he "only borrowed" Lot No. 356-A and was
transferring and conveying the same back to the Torbela siblings
for the consideration of P1.00. On February 21, 1965, Dr.
Rosario's loan in the amount of P70,200.00, secured by a
mortgage on Lot No. 356-A, was approved by DBP. Soon
thereafter, construction of a hospital building started on Lot No.
356-A. DIESHT
Among the notable evidence presented by the Torbela siblings is
the testimony of Atty. Lorenza Alcantara (Atty. Alcantara), who had
no apparent personal interest in the present case. Atty. Alcantara,
when she was still a boarder at the house of Eufrosina Torbela
Rosario (Dr. Rosario's mother), was consulted by the Torbela
siblings as regards the extrajudicial partition of Lot No. 356-A. She
also witnessed the execution of the two Deeds of Absolute
Quitclaim by the Torbela siblings and Dr. Rosario.
In contrast, Dr. Rosario presented TCT No. 52751, issued in his
name, to prove his purported title to Lot No. 356-A. In Lee Tek
Sheng v. Court of Appeals, 53 the Court made a clear distinction
between title and the certificate of title:
The certificate referred to is that document issued by the Register
of Deeds known as the Transfer Certificate of Title (TCT). By title,
the law refers to ownership which is represented by that document.
Petitioner apparently confuses certificate with title. Placing a
parcel of land under the mantle of the Torrens system does not
mean that ownership thereof can no longer be disputed.
Ownership is different from a certificate of title. The TCT is only
the best proof of ownership of a piece of land. Besides, the
certificate cannot always be considered as conclusive evidence of
ownership. Mere issuance of the certificate of title in the name
of any person does not foreclose the possibility that the real
property may be under co-ownership with persons not named
in the certificate or that the registrant may only be a trustee
or that other parties may have acquired interest subsequent
to the issuance of the certificate of title. To repeat, registration
is not the equivalent of title, but is only the best evidence
thereof. Title as a concept of ownership should not be
confused with the certificate of title as evidence of such
ownership although both are interchangeably used. . . .
. 54 (Emphases supplied.)
Registration does not vest title; it is merely the evidence of such
title. Land registration laws do not give the holder any better title
than what he actually has. 55Consequently, Dr. Rosario must still
prove herein his acquisition of title to Lot No. 356-A, apart from his
submission of TCT No. 52751 in his name.
Dr. Rosario testified that he obtained Lot No. 356-A after paying
the Torbela siblings P25,000.00, pursuant to a verbal agreement
with the latter. The Court though observes that Dr. Rosario's
testimony on the execution and existence of the verbal agreement
with the Torbela siblings lacks significant details (such as the
names of the parties present, dates, places, etc.) and is not
corroborated by independent evidence.
In addition, Dr. Rosario acknowledged the execution of the two
Deeds of Absolute Quitclaim dated December 12, 1964 and
December 28, 1964, even affirming his own signature on the latter
Deed. The Parol Evidence Rule provides that when the terms of
the agreement have been reduced into writing, it is considered as
containing all the terms agreed upon and there can be, between
the parties and their successors in interest, no evidence of such
terms other than the contents of the written agreement. 56 Dr.
Rosario may not modify, explain, or add to the terms in the two
written Deeds of Absolute Quitclaim since he did not put in issue
in his pleadings (1) an intrinsic ambiguity, mistake, or imperfection
in the Deeds; (2) failure of the Deeds to express the true intent and
the agreement of the parties thereto; (3) the validity of the Deeds;
or (4) the existence of other terms agreed to by the Torbela siblings
and Dr. Rosario after the execution of the Deeds. 57
Even if the Court considers Dr. Rosario's testimony on his alleged
verbal agreement with the Torbela siblings, the Court finds the
same unsatisfactory. Dr. Rosario averred that the two Deeds were
executed only because he was "planning to secure loan from the
Development Bank of the Philippines and Philippine National Bank
and the bank needed absolute quitclaim[.]" 58 While Dr. Rosario's
explanation makes sense for the first Deed of Absolute Quitclaim
dated December 12, 1964 executed by the Torbela siblings (which
transferred Lot No. 356-A to Dr. Rosario for P9.00.00), the same
could not be said for the second Deed of Absolute Quitclaim dated
December 28, 1964 executed by Dr. Rosario. In fact, Dr. Rosario's
Deed of Absolute Quitclaim (in which he admitted that he only
borrowed Lot No. 356-A and was transferring the same to the
Torbela siblings for P1.00.00) would actually work against the
approval of Dr. Rosario's loan by the banks. Since Dr. Rosario's
Deed of Absolute Quitclaim dated December 28, 1964 is a
declaration against his self-interest, it must be taken as favoring
the truthfulness of the contents of said Deed. 59 HIEASa
It can also be said that Dr. Rosario is estopped from claiming or
asserting ownership over Lot No. 356-A based on his Deed of
Absolute Quitclaim dated December 28, 1964. Dr. Rosario's
admission in the said Deed that he merely borrowed Lot No. 356-
A is deemed conclusive upon him. Under Article 1431 of the Civil
Code, "[t]hrough estoppel an admission or representation is
rendered conclusive upon the person making it, and cannot be
denied or disproved as against the person relying
thereon." 60 That admission cannot now be denied by Dr. Rosario
as against the Torbela siblings, the latter having relied upon his
representation.
Considering the foregoing, the Court agrees with the RTC and the
Court of Appeals that Dr. Rosario only holds Lot No. 356-A in trust
for the Torbela siblings.
Trust is the right to the beneficial enjoyment of property, the legal
title to which is vested in another. It is a fiduciary relationship that
obliges the trustee to deal with the property for the benefit of the
beneficiary. Trust relations between parties may either be express
or implied. An express trust is created by the intention of the trustor
or of the parties, while an implied trust comes into being by
operation of law. 61
Express trusts are created by direct and positive acts of the
parties, by some writing or deed, or will, or by words either
expressly or impliedly evincing an intention to create a trust. Under
Article 1444 of the Civil Code, "[n]o particular words are required
for the creation of an express trust, it being sufficient that a trust is
clearly intended." 62 It is possible to create a trust without using
the word "trust" or "trustee." Conversely, the mere fact that these
words are used does not necessarily indicate an intention to create
a trust. The question in each case is whether the trustor
manifested an intention to create the kind of relationship which to
lawyers is known as trust. It is immaterial whether or not he knows
that the relationship which he intends to create is called a trust,
and whether or not he knows the precise characteristics of the
relationship which is called a trust. 63
In Tamayo v. Callejo, 64 the Court recognized that a trust may
have a constructive or implied nature in the beginning, but the
registered owner's subsequent express acknowledgement in a
public document of a previous sale of the property to another party,
had the effect of imparting to the aforementioned trust the nature
of an express trust. The same situation exists in this case. When
Dr. Rosario was able to register Lot No. 356-A in his name under
TCT No. 52751 on December 16, 1964, an implied trust was
initially established between him and the Torbela siblings under
Article 1451 of the Civil Code, which provides:
ART. 1451. When land passes by succession to any person and
he causes the legal title to be put in the name of another, a trust is
established by implication of law for the benefit of the true owner.
Dr. Rosario's execution of the Deed of Absolute Quitclaim on
December 28, 1964, containing his express admission that he only
borrowed Lot No. 356-A from the Torbela siblings, eventually
transformed the nature of the trust to an express one. The express
trust continued despite Dr. Rosario stating in his Deed of Absolute
Quitclaim that he was already returning Lot No. 356-A to the
Torbela siblings as Lot No. 356-A remained registered in Dr.
Rosario's name under TCT No. 52751 and Dr. Rosario kept
possession of said property, together with the improvements
thereon.
The right of the Torbela siblings to
recover Lot No. 356-A has not yet
prescribed.
The Court extensively discussed the prescriptive period for
express trusts in the Heirs of Maximo Labanon v. Heirs of
Constancio Labanon, 65 to wit:
On the issue of prescription, we had the opportunity to rule
in Bueno v. Reyes that unrepudiated written express trusts are
imprescriptible:
"While there are some decisions which hold that an action upon a
trust is imprescriptible, without distinguishing between express
and implied trusts, the better rule, as laid down by this Court in
other decisions, is that prescription does supervene where the
trust is merely an implied one. The reason has been expressed by
Justice J.B.L. Reyes in J.M. Tuason and Co., Inc. vs.
Magdangal, 4 SCRA 84, 88, as follows: 2005jur
Under Section 40 of the old Code of Civil Procedure, all actions for
recovery of real property prescribed in 10 years, excepting only
actions based on continuing or subsisting trusts that were
considered by section 38 as imprescriptible. As held in the case
of Diaz v. Gorricho, L-11229, March 29, 1958, however, the
continuing or subsisting trusts contemplated in section 38 of the
Code of Civil Procedure referred only to express unrepudiated
trusts, and did not include constructive trusts (that are imposed by
law) where no fiduciary relation exists and the trustee does not
recognize the trust at all."
This principle was amplified in Escay v. Court of Appeals this way:
"Express trusts prescribe 10 years from the repudiation of the trust
(Manuel Diaz, et al. vs. Carmen Gorricho et al., 54 O.G. p. 8429,
Sec. 40, Code of Civil Procedure)."
In the more recent case of Secuya v. De Selma, we again ruled
that the prescriptive period for the enforcement of an express trust
of ten (10) years starts upon the repudiation of the trust by the
trustee. 66
To apply the 10-year prescriptive period, which would bar a
beneficiary's action to recover in an express trust, the repudiation
of the trust must be proven by clear and convincing evidence and
made known to the beneficiary. 67 The express trust disables the
trustee from acquiring for his own benefit the property committed
to his management or custody, at least while he does not openly
repudiate the trust, and makes such repudiation known to the
beneficiary or cestui que trust. For this reason, the old Code of
Civil Procedure (Act 190) declared that the rules on adverse
possession do not apply to "continuing and subsisting" (i.e.,
unrepudiated) trusts. In an express trust, the delay of the
beneficiary is directly attributable to the trustee who undertakes to
hold the property for the former, or who is linked to the beneficiary
by confidential or fiduciary relations. The trustee's possession is,
therefore, not adverse to the beneficiary, until and unless the latter
is made aware that the trust has been repudiated. 68
Dr. Rosario argues that he is deemed to have repudiated the trust
on December 16, 1964, when he registered Lot No. 356-A in his
name under TCT No. 52751, so when on February 13, 1986, the
Torbela siblings instituted before the RTC Civil Case No. U-4359,
for the recovery of ownership and possession of Lot No. 356-A
from the spouses Rosario, over 21 years had passed. Civil Case
No. U-4359 was already barred by prescription, as well as laches.
The Court already rejected a similar argument in Ringor v.
Ringor 69 for the following reasons:
A trustee who obtains a Torrens title over a property held in
trust for him by another cannot repudiate the trust by relying
on the registration. A Torrens Certificate of Title in Jose's name
did not vest ownership of the land upon him. The Torrens system
does not create or vest title. It only confirms and records title
already existing and vested. It does not protect a usurper from the
true owner. The Torrens system was not intended to foment
betrayal in the performance of a trust. It does not permit one to
enrich himself at the expense of another. Where one does not
have a rightful claim to the property, the Torrens system of
registration can confirm or record nothing. Petitioners cannot rely
on the registration of the lands in Jose's name nor in the name of
the Heirs of Jose M. Ringor, Inc., for the wrong result they seek.
For Jose could not repudiate a trust by relying on a Torrens title he
held in trust for his co-heirs. The beneficiaries are entitled to
enforce the trust, notwithstanding the irrevocability of the Torrens
title. The intended trust must be sustained. 70 (Emphasis
supplied.)
In the more recent case of Heirs of Tranquilino Labiste v. Heirs of
Jose Labiste, 71 the Court refused to apply prescription and
laches and reiterated that:
[P]rescription and laches will run only from the time the express
trust is repudiated. The Court has held that for acquisitive
prescription to bar the action of the beneficiary against the trustee
in an express trust for the recovery of the property held in trust it
must be shown that: (a) the trustee has performed unequivocal
acts of repudiation amounting to an ouster of the cestui que
trust; (b) such positive acts of repudiation have been made known
to the cestui que trust, and (c) the evidence thereon is clear and
conclusive. Respondents cannot rely on the fact that the
Torrens title was issued in the name of Epifanio and the other
heirs of Jose. It has been held that a trustee who obtains a
Torrens title over property held in trust by him for another
cannot repudiate the trust by relying on the registration. The
rule requires a clear repudiation of the trust duly communicated to
the beneficiary. The only act that can be construed as repudiation
was when respondents filed the petition for reconstitution in
October 1993. And since petitioners filed their complaint in
January 1995, their cause of action has not yet prescribed, laches
cannot be attributed to them. 72 (Emphasis supplied.) CEaDAc
It is clear that under the foregoing jurisprudence, the registration
of Lot No. 356-A by Dr. Rosario in his name under TCT No. 52751
on December 16, 1964 is not the repudiation that would have
caused the 10-year prescriptive period for the enforcement of an
express trust to run.
The Court of Appeals held that Dr. Rosario repudiated the express
trust when he acquired another loan from PNB and constituted a
second mortgage on Lot No. 356-A sometime in 1979, which,
unlike the first mortgage to DBP in 1965, was without the
knowledge and/or consent of the Torbela siblings.
The Court only concurs in part with the Court of Appeals on this
matter.
For repudiation of an express trust to be effective, the unequivocal
act of repudiation had to be made known to the Torbela siblings
as the cestuis que trust and must be proven by clear and
conclusive evidence. A scrutiny of TCT No. 52751 reveals the
following inscription:
Entry No. 520099
Amendment of the mortgage in favor of PNB inscribed under Entry
No. 490658 in the sense that the consideration thereof has been
increased to PHILIPPINE PESOS Four Hundred Fifty Thousand
Pesos only (P450,000.00) and to secure any and all negotiations
with PNB, whether contracted before, during or after the date of
this instrument, acknowledged before Notary Public
of Pangasinan Alejo M. Dato as Doc. No. 198, Page No. 41, Book
No. 11, Series of 1985.
Date of Instrument March 5, 1981
Date of Inscription March 6, 1981 73
Although according to Entry No. 520099, the original loan and
mortgage agreement of Lot No. 356-A between Dr. Rosario and
PNB was previously inscribed as Entry No. 490658, Entry No.
490658 does not actually appear on TCT No. 52751 and, thus, it
cannot be used as the reckoning date for the start of the
prescriptive period.
The Torbela siblings can only be charged with knowledge of the
mortgage of Lot No. 356-A to PNB on March 6, 1981 when the
amended loan and mortgage agreement was registered on TCT
No. 52751 as Entry No. 520099. Entry No. 520099 is constructive
notice to the whole world 74 that Lot No. 356-A was mortgaged by
Dr. Rosario to PNB as security for a loan, the amount of which was
increased to P450,000.00. Hence, Dr. Rosario is deemed to have
effectively repudiated the express trust between him and the
Torbela siblings on March 6, 1981, on which day, the prescriptive
period for the enforcement of the express trust by the Torbela
siblings began to run.
From March 6, 1981, when the amended loan and mortgage
agreement was registered on TCT No. 52751, to February 13,
1986, when the Torbela siblings instituted before the RTC Civil
Case No. U-4359 against the spouses Rosario, only about five
years had passed. The Torbela siblings were able to institute Civil
Case No. U-4359 well before the lapse of the 10-year prescriptive
period for the enforcement of their express trust with Dr. Rosario.
Civil Case No. U-4359 is likewise not barred by laches. Laches
means the failure or neglect, for an unreasonable and unexplained
length of time, to do that which by exercising due diligence could
or should have been done earlier. It is negligence or omission to
assert a right within a reasonable time, warranting a presumption
that the party entitled to assert it either has abandoned it or
declined to assert it. As the Court explained in the preceding
paragraphs, the Torbela siblings instituted Civil Case No. U-4359
five years after Dr. Rosario's repudiation of the express trust, still
within the 10-year prescriptive period for enforcement of such
trusts. This does not constitute an unreasonable delay in asserting
one's right. A delay within the prescriptive period is sanctioned by
law and is not considered to be a delay that would bar relief.
Laches apply only in the absence of a statutory prescriptive
period. 75
Banco Filipino is not a mortgagee
and buyer in good faith.
Having determined that the Torbela siblings are the true owners
and Dr. Rosario merely the trustee of Lot No. 356-A, the Court is
next faced with the issue of whether or not the Torbela siblings
may still recover Lot No. 356-A considering that Dr. Rosario had
already mortgaged Lot No. 356-A to Banco Filipino, and upon Dr.
Rosario's default on his loan obligations, Banco Filipino foreclosed
the mortgage, acquired Lot No. 356-A as the highest bidder at the
foreclosure sale, and consolidated title in its name under TCT No.
165813. The resolution of this issue depends on the answer to the
question of whether or not Banco Filipino was a mortgagee in good
faith. CHTAIc
Under Article 2085 of the Civil Code, one of the essential
requisites of the contract of mortgage is that the mortgagor should
be the absolute owner of the property to be mortgaged; otherwise,
the mortgage is considered null and void. However, an exception
to this rule is the doctrine of "mortgagee in good faith." Under this
doctrine, even if the mortgagor is not the owner of the mortgaged
property, the mortgage contract and any foreclosure sale arising
therefrom are given effect by reason of public policy. This principle
is based on the rule that all persons dealing with property covered
by a Torrens Certificate of Title, as buyers or mortgagees, are not
required to go beyond what appears on the face of the title. This is
the same rule that underlies the principle of "innocent purchasers
for value." The prevailing jurisprudence is that a mortgagee has a
right to rely in good faith on the certificate of title of the mortgagor
to the property given as security and in the absence of any sign
that might arouse suspicion, has no obligation to undertake further
investigation. Hence, even if the mortgagor is not the rightful owner
of, or does not have a valid title to, the mortgaged property, the
mortgagee in good faith is, nonetheless, entitled to protection. 76
On one hand, the Torbela siblings aver that Banco Filipino is not a
mortgagee in good faith because as early as May 17, 1967, they
had already annotated Cornelio's Adverse Claim dated May 16,
1967 and Dr. Rosario's Deed of Absolute Quitclaim dated
December 28, 1964 on TCT No. 52751 as Entry Nos. 274471-
274472, respectively.
On the other hand, Banco Filipino asseverates that it is a
mortgagee in good faith because per Section 70 of Presidential
Decree No. 1529, otherwise known as the Property Registration
Decree, the notice of adverse claim, registered on May 17, 1967
by the Torbela siblings under Entry Nos. 274471-274472 on TCT
No. 52751, already lapsed after 30 days or on June 16, 1967.
Additionally, there was an express cancellation of Entry Nos.
274471-274472 by Entry No. 520469 dated March 11, 1981. So
when Banco Filipino approved Dr. Rosario's loan for
P1,200,000.00 and constituted a mortgage on Lot No. 356-A
(together with two other properties) on December 8, 1981, the only
other encumbrance on TCT No. 52751 was Entry No. 520099
dated March 6, 1981, i.e., the amended loan and mortgage
agreement between Dr. Rosario and PNB (which was eventually
cancelled after it was paid off with part of the proceeds from Dr.
Rosario's loan from Banco Filipino). Hence, Banco Filipino was not
aware that the Torbela siblings' adverse claim on Lot No. 356-A
still subsisted.
The Court finds that Banco Filipino is not a mortgagee in good
faith. Entry Nos. 274471-274472 were not validly cancelled, and
the improper cancellation should have been apparent to Banco
Filipino and aroused suspicion in said bank of some defect in Dr.
Rosario's title.
The purpose of annotating the adverse claim on the title of the
disputed land is to apprise third persons that there is a controversy
over the ownership of the land and to preserve and protect the
right of the adverse claimant during the pendency of the
controversy. It is a notice to third persons that any transaction
regarding the disputed land is subject to the outcome of the
dispute. 77
Adverse claims were previously governed by Section 110 of Act
No. 496, otherwise known as the Land Registration Act, quoted in
full below:
ADVERSE CLAIM
SEC. 110. Whoever claims any part or interest in registered land
adverse to the registered owner, arising subsequent to the date of
the original registration, may, if no other provision is made in this
Act for registering the same, make a statement in writing setting
forth fully his alleged right or interest, and how or under whom
acquired, and a reference to the volume and page of the certificate
of title of the registered owner, and a description of the land in
which the right or interest is claimed.
The statement shall be signed and sworn to, and shall state the
adverse claimant's residence, and designate a place at which all
notices may be served upon him. This statement shall be entitled
to registration as an adverse claim, and the court, upon a petition
of any party in interest, shall grant a speedy hearing upon the
question of the validity of such adverse claim and shall enter such
decree therein as justice and equity may require. If the claim is
adjudged to be invalid, the registration shall be cancelled. If in any
case the court after notice and hearing shall find that a claim thus
registered was frivolous or vexatious, it may tax the adverse
claimant double or treble costs in its discretion. AIHDcC
Construing the aforequoted provision, the Court stressed in Ty Sin
Tei v. Lee Dy Piao 78 that "[t]he validity or efficaciousness of the
[adverse] claim . . . may only be determined by the Court upon
petition by an interested party, in which event, the Court shall order
the immediate hearing thereof and make the proper adjudication
as justice and equity may warrant. And it is ONLY when such claim
is found unmeritorious that the registration thereof may be
cancelled." The Court likewise pointed out in the same case that
while a notice of lis pendens may be cancelled in a number of
ways, "the same is not true in a registered adverse claim, for it may
be cancelled only in one instance, i.e., after the claim is adjudged
invalid or unmeritorious by the Court . . . ;" and "if any of the
registrations should be considered unnecessary or superfluous, it
would be the notice of lis pendens and not the annotation of the
adverse claim which is more permanent and cannot be cancelled
without adequate hearing and proper disposition of the claim."
With the enactment of the Property Registration Decree on June
11, 1978, Section 70 thereof now applies to adverse claims:
SEC. 70. Adverse claim. Whoever claims any part or interest in
registered land adverse to the registered owner, arising
subsequent to the date of the original registrations, may, if no other
provision is made in this Decree for registering the same, make a
statement in writing setting forth fully his alleged right, or interest,
and how or under whom acquired, a reference to the number of
the certificate of title of the registered owner, the name of the
registered owner, and a description of the land in which the right
or interest is claimed.
The statement shall be signed and sworn to, and shall state the
adverse claimant's residence, and a place at which all notices may
be served upon him. This statement shall be entitled to registration
as an adverse claim on the certificate of title. The adverse claim
shall be effective for a period of thirty days from the date of
registration. After the lapse of said period, the annotation of
adverse claim may be cancelled upon filing of a verified
petition therefor by the party in interest: Provided, however,
that after cancellation, no second adverse claim based on the
same ground shall be registered by the same claimant.
Before the lapse of thirty days aforesaid, any party in interest
may file a petition in the Court of First Instance where the land
is situated for the cancellation of the adverse claim, and the
court shall grant a speedy hearing upon the question of the
validity of such adverse claim, and shall render judgment as
may be just and equitable. If the adverse claim is adjudged to be
invalid, the registration thereof shall be ordered cancelled. If, in
any case, the court, after notice and hearing, shall find that the
adverse claim thus registered was frivolous, it may fine the
claimant in an amount not less than one thousand pesos nor more
than five thousand pesos, in its discretion. Before the lapse of thirty
days, the claimant may withdraw his adverse claim by filing with
the Register of Deeds a sworn petition to that effect. (Emphases
supplied.)
In Sajonas v. Court of Appeals, 79 the Court squarely interpreted
Section 70 of the Property Registration Decree, particularly, the
new 30-day period not previously found in Section 110 of the Land
Registration Act, thus:
In construing the law aforesaid, care should be taken that every
part thereof be given effect and a construction that could render a
provision inoperative should be avoided, and inconsistent
provisions should be reconciled whenever possible as parts of a
harmonious whole. For taken in solitude, a word or phrase might
easily convey a meaning quite different from the one actually
intended and evident when a word or phrase is considered with
those with which it is associated. In ascertaining the period of
effectivity of an inscription of adverse claim, we must read the law
in its entirety. Sentence three, paragraph two of Section 70 of P.D.
1529 provides:
"The adverse claim shall be effective for a period of thirty days
from the date of registration."
At first blush, the provision in question would seem to restrict the
effectivity of the adverse claim to thirty days. But the above
provision cannot and should not be treated separately, but should
be read in relation to the sentence following, which reads:
"After the lapse of said period, the annotation of adverse claim may
be cancelled upon filing of a verified petition therefor by the party
in interest." IDSETA
If the rationale of the law was for the adverse claim to ipso
facto lose force and effect after the lapse of thirty days, then it
would not have been necessary to include the foregoing caveat to
clarify and complete the rule. For then, no adverse claim need be
cancelled. If it has been automatically terminated by mere lapse of
time, the law would not have required the party in interest to do a
useless act.
A statute's clauses and phrases must not be taken separately, but
in its relation to the statute's totality. Each statute must, in fact, be
construed as to harmonize it with the pre-existing body of laws.
Unless clearly repugnant, provisions of statutes must be
reconciled. The printed pages of the published Act, its history,
origin, and its purposes may be examined by the courts in their
construction. . . . .
xxx xxx xxx
Construing the provision as a whole would reconcile the apparent
inconsistency between the portions of the law such that the
provision on cancellation of adverse claim by verified petition
would serve to qualify the provision on the effectivity period. The
law, taken together, simply means that the cancellation of the
adverse claim is still necessary to render it ineffective,
otherwise, the inscription will remain annotated and shall
continue as a lien upon the property. For if the adverse claim
has already ceased to be effective upon the lapse of said
period, its cancellation is no longer necessary and the
process of cancellation would be a useless ceremony.
It should be noted that the law employs the phrase "may be
cancelled," which obviously indicates, as inherent in its decision
making power, that the court may or may not order the cancellation
of an adverse claim, notwithstanding such provision limiting the
effectivity of an adverse claim for thirty days from the date of
registration. The court cannot be bound by such period as it would
be inconsistent with the very authority vested in it. A fortiori, the
limitation on the period of effectivity is immaterial in determining
the validity or invalidity of an adverse claim which is the principal
issue to be decided in the court hearing. It will therefore depend
upon the evidence at a proper hearing for the court to determine
whether it will order the cancellation of the adverse claim or not.
To interpret the effectivity period of the adverse claim as absolute
and without qualification limited to thirty days defeats the very
purpose for which the statute provides for the remedy of an
inscription of adverse claim, as the annotation of an adverse claim
is a measure designed to protect the interest of a person over a
piece of real property where the registration of such interest or
right is not otherwise provided for by the Land Registration Act or
Act 496 (now P.D. 1529 or the Property Registration Decree), and
serves as a warning to third parties dealing with said property that
someone is claiming an interest or the same or a better right than
the registered owner thereof.
The reason why the law provides for a hearing where the
validity of the adverse claim is to be threshed out is to afford
the adverse claimant an opportunity to be heard, providing a
venue where the propriety of his claimed interest can be
established or revoked, all for the purpose of determining at
last the existence of any encumbrance on the title arising
from such adverse claim. This is in line with the provision
immediately following:
"Provided, however, that after cancellation, no second adverse
claim shall be registered by the same claimant."
Should the adverse claimant fail to sustain his interest in the
property, the adverse claimant will be precluded from registering a
second adverse claim based on the same ground.
It was held that "validity or efficaciousness of the claim may only
be determined by the Court upon petition by an interested party,
in which event, the Court shall order the immediate hearing thereof
and make the proper adjudication as justice and equity may
warrant. And it is only when such claim is found unmeritorious that
the registration of the adverse claim may be cancelled, thereby
protecting the interest of the adverse claimant and giving notice
and warning to third parties." 80 (Emphases supplied.)
Whether under Section 110 of the Land Registration Act or
Section 70 of the Property Registration Decree, notice of adverse
claim can only be cancelled after a party in interest files a petition
for cancellation before the RTC wherein the property is located,
and the RTC conducts a hearing and determines the said claim to
be invalid or unmeritorious.
No petition for cancellation has been filed and no hearing has been
conducted herein to determine the validity or merit of the adverse
claim of the Torbela siblings. Entry No. 520469 cancelled the
adverse claim of the Torbela siblings, annotated as Entry Nos.
274471-774472, upon the presentation by Dr. Rosario of a mere
Cancellation and Discharge of Mortgage. CDHcaS
Regardless of whether or not the Register of Deeds should have
inscribed Entry No. 520469 on TCT No. 52751, Banco Filipino
could not invoke said inscription in support of its claim of good
faith. There were several things amiss in Entry No. 520469 which
should have already aroused suspicions in Banco Filipino, and
compelled the bank to look beyond TCT No. 52751 and inquire
into Dr. Rosario's title. First, Entry No. 520469 does not mention
any court order as basis for the cancellation of the adverse claim.
Second, the adverse claim was not a mortgage which could be
cancelled with Dr. Rosario's Cancellation and Discharge of
Mortgage. And third, the adverse claim was against Dr. Rosario,
yet it was cancelled based on a document also executed by Dr.
Rosario.
It is a well-settled rule that a purchaser or mortgagee cannot close
his eyes to facts which should put a reasonable man upon his
guard, and then claim that he acted in good faith under the belief
that there was no defect in the title of the vendor or mortgagor. His
mere refusal to believe that such defect exists, or his willful closing
of his eyes to the possibility of the existence of a defect in the
vendor's or mortgagor's title, will not make him an innocent
purchaser or mortgagee for value, if it afterwards develops that the
title was in fact defective, and it appears that he had such notice
of the defects as would have led to its discovery had he acted with
the measure of precaution which may be required of a prudent
man in a like situation. 81
While the defective cancellation of Entry Nos. 274471-274472 by
Entry No. 520469 might not be evident to a private individual, the
same should have been apparent to Banco Filipino. Banco Filipino
is not an ordinary mortgagee, but is a mortgagee-bank, whose
business is impressed with public interest. In fact, in one
case, 82 the Court explicitly declared that the rule that persons
dealing with registered lands can rely solely on the certificate of
title does not apply to banks. In another case, 83 the Court
adjudged that unlike private individuals, a bank is expected to
exercise greater care and prudence in its dealings, including those
involving registered lands. A banking institution is expected to
exercise due diligence before entering into a mortgage contract.
The ascertainment of the status or condition of a property offered
to it as security for a loan must be a standard and indispensable
part of its operations.
Banco Filipino cannot be deemed a mortgagee in good faith, much
less a purchaser in good faith at the foreclosure sale of Lot No.
356-A. Hence, the right of the Torbela siblings over Lot No. 356-A
is superior over that of Banco Filipino; and as the true owners of
Lot No. 356-A, the Torbela siblings are entitled to a reconveyance
of said property even from Banco Filipino.
Nonetheless, the failure of Banco Filipino to comply with the due
diligence requirement was not the result of a dishonest purpose,
some moral obliquity, or breach of a known duty for some interest
or ill will that partakes of fraud that would justify damages. 84
Given the reconveyance of Lot No. 356-A to the Torbela siblings,
there is no more need to address issues concerning redemption,
annulment of the foreclosure sale and certificate of sale (subject
matter of Civil Case No. U-4733), or issuance of a writ of
possession in favor of Banco Filipino (subject matter of Pet. Case
No. U-822) insofar as Lot No. 356-A is concerned. Such would
only be superfluous. Banco Filipino, however, is not left without
any recourse should the foreclosure and sale of the two other
mortgaged properties be insufficient to cover Dr. Rosario's loan,
for the bank may still bring a proper suit against Dr. Rosario to
collect the unpaid balance.
The rules on accession shall govern
the improvements on Lot No. 356-A
and the rents thereof.
The accessory follows the principal. The right of accession is
recognized under Article 440 of the Civil Code which states that
"[t]he ownership of property gives the right by accession to
everything which is produced thereby, or which is incorporated or
attached thereto, either naturally or artificially."
There is no question that Dr. Rosario is the builder of the
improvements on Lot No. 356-A. The Torbela siblings themselves
alleged that they allowed Dr. Rosario to register Lot No. 356-A in
his name so he could obtain a loan from DBP, using said parcel of
land as security; and with the proceeds of the loan, Dr. Rosario
had a building constructed on Lot No. 356-A, initially used as a
hospital, and then later for other commercial purposes. Dr. Rosario
supervised the construction of the building, which began in 1965;
fully liquidated the loan from DBP; and maintained and
administered the building, as well as collected the rental income
therefrom, until the Torbela siblings instituted Civil Case No. U-
4359 before the RTC on February 13, 1986. TACEDI
When it comes to the improvements on Lot No. 356-A, both the
Torbela siblings (as landowners) and Dr. Rosario (as builder) are
deemed in bad faith. The Torbela siblings were aware of the
construction of a building by Dr. Rosario on Lot No. 356-A, while
Dr. Rosario proceeded with the said construction despite his
knowledge that Lot No. 356-A belonged to the Torbela siblings.
This is the case contemplated under Article 453 of the Civil Code,
which reads:
ART. 453. If there was bad faith, not only on the part of the person
who built, planted or sowed on the land of another, but also on the
part of the owner of such land, the rights of one and the other
shall be the same as though both had acted in good faith.
It is understood that there is bad faith on the part of the landowner
whenever the act was done with his knowledge and without
opposition on his part. (Emphasis supplied.)
When both the landowner and the builder are in good faith, the
following rules govern:
ART. 448. The owner of the land on which anything has been built,
sown or planted in good faith, shall have the right to appropriate
as his own the works, sowing or planting, after payment of the
indemnity provided for in articles 546 and 548, or to oblige the one
who built or planted to pay the price of the land, and the one who
sowed, the proper rent. However, the builder or planter cannot be
obliged to buy the land if its value is considerably more than that
of the building or trees. In such case, he shall pay reasonable rent,
if the owner of the land does not choose to appropriate the building
or trees after proper indemnity. The parties shall agree upon the
terms of the lease and in case of disagreement, the court shall fix
the terms thereof.
ART. 546. Necessary expenses shall be refunded to every
possessor; but only the possessor in good faith may retain the
thing until he has been reimbursed therefor.
Useful expenses shall be refunded only to the possessor in good
faith with the same right of retention, the person who has defeated
him in the possession having the option of refunding the amount
of the expenses or of paying the increase in value which the thing
may have acquired by reason thereof.
ART. 548. Expenses for pure luxury or mere pleasure shall not be
refunded to the possessor in good faith; but he may remove the
ornaments with which he has embellished the principal thing if it
suffers no injury thereby, and if his successor in the possession
does not prefer to refund the amount expended.
Whatever is built, planted, or sown on the land of another, and the
improvements or repairs made thereon, belong to the owner of the
land. Where, however, the planter, builder, or sower has acted in
good faith, a conflict of rights arises between the owners and it
becomes necessary to protect the owner of the improvements
without causing injustice to the owner of the land. In view of the
impracticability of creating what Manresa calls a state of "forced
co-ownership," the law has provided a just and equitable solution
by giving the owner of the land the option to acquire the
improvements after payment of the proper indemnity or to oblige
the builder or planter to pay for the land and the sower to pay the
proper rent. It is the owner of the land who is allowed to exercise
the option because his right is older and because, by the principle
of accession, he is entitled to the ownership of the accessory
thing. 85
The landowner has to make a choice between appropriating the
building by paying the proper indemnity or obliging the builder to
pay the price of the land. But even as the option lies with the
landowner, the grant to him, nevertheless, is preclusive. He must
choose one. He cannot, for instance, compel the owner of the
building to remove the building from the land without first
exercising either option. It is only if the owner chooses to sell his
land, and the builder or planter fails to purchase it where its value
is not more than the value of the improvements, that the owner
may remove the improvements from the land. The owner is entitled
to such remotion only when, after having chosen to sell his land,
the other party fails to pay for the same. 86
This case then must be remanded to the RTC for the determination
of matters necessary for the proper application of Article 448, in
relation to Article 546, of the Civil Code.Such matters include the
option that the Torbela siblings will choose; the amount of
indemnity that they will pay if they decide to appropriate the
improvements on Lot No. 356-A; the value of Lot No. 356-A if they
prefer to sell it to Dr. Rosario; or the reasonable rent if they opt to
sell Lot No. 356-A to Dr. Rosario but the value of the land is
considerably more than the improvements. The determination
made by the Court of Appeals in its Decision dated June 29, 1999
that the current value of Lot No. 356-A is P1,200,000.00 is not
supported by any evidence on record. HSTaEC
Should the Torbela siblings choose to appropriate the
improvements on Lot No. 356-A, the following ruling of the Court
in Pecson v. Court of Appeals 87 is relevant in the determination
of the amount of indemnity under Article 546 of the Civil Code:
Article 546 does not specifically state how the value of the useful
improvements should be determined. The respondent court and
the private respondents espouse the belief that the cost of
construction of the apartment building in 1965, and not its current
market value, is sufficient reimbursement for necessary and useful
improvements made by the petitioner. This position is, however,
not in consonance with previous rulings of this Court in similar
cases. In Javier vs. Concepcion, Jr., this Court pegged the value
of the useful improvements consisting of various fruits, bamboos,
a house and camarin made of strong material based on
the market value of the said improvements. In Sarmiento vs.
Agana, despite the finding that the useful improvement, a
residential house, was built in 1967 at a cost of between eight
thousand pesos (P8,000.00) to ten thousand pesos (P10,000.00),
the landowner was ordered to reimburse the builder in the amount
of forty thousand pesos (P40,000.00), the value of the house at
the time of the trial. In the same way, the landowner was required
to pay the "present value" of the house, a useful improvement, in
the case of De Guzman vs. De la Fuente, cited by the petitioner.
The objective of Article 546 of the Civil Code is to administer
justice between the parties involved. In this regard, this Court had
long ago stated in Rivera vs. Roman Catholic Archbishop of
Manila that the said provision was formulated in trying to adjust the
rights of the owner and possessor in good faith of a piece of land,
to administer complete justice to both of them in such a way as
neither one nor the other may enrich himself of that which does
not belong to him. Guided by this precept, it is therefore
the current market value of the improvements which should be
made the basis of reimbursement. A contrary ruling would unjustly
enrich the private respondents who would otherwise be allowed to
acquire a highly valued income-yielding four-unit apartment
building for a measly amount. Consequently, the parties should
therefore be allowed to adduce evidence on the present market
value of the apartment building upon which the trial court should
base its finding as to the amount of reimbursement to be paid by
the landowner. 88(Emphases supplied.)
Still following the rules of accession, civil fruits, such as rents,
belong to the owner of the building. 89 Thus, Dr. Rosario has a
right to the rents of the improvements on Lot No. 356-A and is
under no obligation to render an accounting of the same to
anyone. In fact, it is the Torbela siblings who are required to
account for the rents they had collected from the lessees of the
commercial building and turn over any balance to Dr. Rosario. Dr.
Rosario's right to the rents of the improvements on Lot No. 356-A
shall continue until the Torbela siblings have chosen their option
under Article 448 of the Civil Code.And in case the Torbela siblings
decide to appropriate the improvements, Dr. Rosario shall have
the right to retain said improvements, as well as the rents thereof,
until the indemnity for the same has been paid. 90
Dr. Rosario is liable for damages to
the Torbela siblings.
The Court of Appeals ordered Dr. Rosario to pay the Torbela
siblings P300,000.00 as moral damages; P200,000.00 as
exemplary damages; and P100,000.00 as attorney's fees.
Indeed, Dr. Rosario's deceit and bad faith is evident when, being
fully aware that he only held Lot No. 356-A in trust for the Torbela
siblings, he mortgaged said property to PNB and Banco Filipino
absent the consent of the Torbela siblings, and caused the
irregular cancellation of the Torbela siblings' adverse claim on TCT
No. 52751. Irrefragably, Dr. Rosario's betrayal had caused the
Torbela siblings (which included Dr. Rosario's own mother,
Eufrosina Torbela Rosario) mental anguish, serious anxiety, and
wounded feelings. Resultantly, the award of moral damages is
justified, but the amount thereof is reduced to P200,000.00.
In addition to the moral damages, exemplary damages may also
be imposed given that Dr. Rosario's wrongful acts were
accompanied by bad faith. However, judicial discretion granted to
the courts in the assessment of damages must always be
exercised with balanced restraint and measured objectivity. The
circumstances of the case call for a reduction of the award of
exemplary damages to P100,000.00. cDCaTH
As regards attorney's fees, they may be awarded when the
defendant's act or omission has compelled the plaintiff to litigate
with third persons or to incur expenses to protect his interest.
Because of Dr. Rosario's acts, the Torbela siblings were
constrained to institute several cases against Dr. Rosario and his
spouse, Duque-Rosario, as well as Banco Filipino, which had
lasted for more than 25 years. Consequently, the Torbela siblings
are entitled to an award of attorney's fees and the amount of
P100,000.00 may be considered rational, fair, and reasonable.
Banco Filipino is entitled to a writ of
possession for Lot No. 5-F-8-C-2-B-2-A.
The Court emphasizes that Pet. Case No. U-822, instituted by
Banco Filipino for the issuance of a writ of possession before the
RTC of Urdaneta, included only Lot No. 5-F-8-C-2-B-2-A and Lot
No. 356-A (Lot No. 4489, the third property mortgaged to secure
Dr. Rosario's loan from Banco Filipino, is located in Dagupan City,
Pangasinan, and the petition for issuance of a writ of possession
for the same should be separately filed with the RTC of Dagupan
City). Since the Court has already granted herein the
reconveyance of Lot No. 356-A from Banco Filipino to the Torbela
siblings, the writ of possession now pertains only to Lot No. 5-F-8-
C-2-B-2-A.
To recall, the Court of Appeals affirmed the issuance by the RTC
of a writ of possession in favor of Banco Filipino. Dr. Rosario no
longer appealed from said judgment of the appellate court. Already
legally separated from Dr. Rosario, Duque-Rosario alone
challenges the writ of possession before this Court through her
Petition in G.R. No. 140553.
Duque-Rosario alleges in her Petition that Lot No. 5-F-8-C-2-B-2-
A had been registered in her name under TCT No. 104189. Yet,
without a copy of TCT No. 104189 on record, the Court cannot
give much credence to Duque-Rosario's claim of sole ownership
of Lot No. 5-F-8-C-2-B-2-A. Also, the question of whether Lot No.
5-F-8-C-2-B-2-A was the paraphernal property of Duque-Rosario
or the conjugal property of the spouses Rosario would not alter the
outcome of Duque-Rosario's Petition.
The following facts are undisputed: Banco Filipino extrajudicially
foreclosed the mortgage constituted on Lot No. 5-F-8-C-2-B-2-A
and the two other properties after Dr. Rosario defaulted on the
payment of his loan; Banco Filipino was the highest bidder for all
three properties at the foreclosure sale on April 2, 1987; the
Certificate of Sale dated April 2, 1987 was registered in April 1987;
and based on the Certificate of Final Sale dated May 24, 1988 and
Affidavit of Consolidation dated May 25, 1988, the Register of
Deeds cancelled TCT No. 104189 and issued TCT No. 165812 in
the name of Banco Filipino for Lot No. 5-F-8-C-2-B-2-A on June 7,
1988.
The Court has consistently ruled that the one-year redemption
period should be counted not from the date of foreclosure sale, but
from the time the certificate of sale is registered with the Registry
of Deeds. 91 No copy of TCT No. 104189 can be found in the
records of this case, but the fact of annotation of the Certificate of
Sale thereon was admitted by the parties, only differing on the date
it was made: April 14, 1987 according to Banco Filipino and April
15, 1987 as maintained by Duque-Rosario. Even if the Court
concedes that the Certificate of Sale was annotated on TCT No.
104189 on the later date, April 15, 1987, the one-year redemption
period already expired on April 14, 1988. 92 The Certificate of
Final Sale and Affidavit of Consolidation were executed more than
a month thereafter, on May 24, 1988 and May 25, 1988,
respectively, and were clearly not premature.
It is true that the rule on redemption is liberally construed in favor
of the original owner of the property. The policy of the law is to aid
rather than to defeat him in the exercise of his right of
redemption. 93 However, the liberal interpretation of the rule on
redemption is inapplicable herein as neither Duque-Rosario nor
Dr. Rosario had made any attempt to redeem Lot No. 5-F-8-C-2-
B-2-A. Duque-Rosario could only rely on the efforts of the Torbela
siblings at redemption, which were unsuccessful. While the
Torbela siblings made several offers to redeem Lot No. 356-A, as
well as the two other properties mortgaged by Dr. Rosario, they
did not make any valid tender of the redemption price to effect a
valid redemption. The general rule in redemption is that it is not
sufficient that a person offering to redeem manifests his desire to
do so. The statement of intention must be accompanied by an
actual and simultaneous tender of payment. The redemption price
should either be fully offered in legal tender or else validly
consigned in court. Only by such means can the auction winner be
assured that the offer to redeem is being made in good faith. 94 In
case of disagreement over the redemption price, the redemptioner
may preserve his right of redemption through judicial action, which
in every case, must be filed within the one-year period of
redemption. The filing of the court action to enforce redemption,
being equivalent to a formal offer to redeem, would have the effect
of preserving his redemptive rights and "freezing" the expiration of
the one-year period. 95 But no such action was instituted by the
Torbela siblings or either of the spouses Rosario. TcSICH
Duque-Rosario also cannot bar the issuance of the writ of
possession over Lot No. 5-F-8-C-2-B-2-A in favor of Banco Filipino
by invoking the pendency of Civil Case No. U-4359, the Torbela
siblings' action for recovery of ownership and possession and
damages, which supposedly tolled the period for redemption of the
foreclosed properties. Without belaboring the issue of Civil Case
No. U-4359 suspending the redemption period, the Court simply
points out to Duque-Rosario that Civil Case No. U-4359 involved
Lot No. 356-A only, and the legal consequences of the institution,
pendency, and resolution of Civil Case No. U-4359 apply to Lot
No. 356-A alone.
Equally unpersuasive is Duque-Rosario's argument that the writ of
possession over Lot No. 5-F-8-C-2-B-2-A should not be issued
given the defects in the conduct of the foreclosure sale (i.e., lack
of personal notice to Duque-Rosario) and consolidation of title (i.e.,
failure to provide Duque-Rosario with copies of the Certificate of
Final Sale).
The right of the purchaser to the possession of the foreclosed
property becomes absolute upon the expiration of the redemption
period. The basis of this right to possession is the purchaser's
ownership of the property. After the consolidation of title in the
buyer's name for failure of the mortgagor to redeem, the writ of
possession becomes a matter of right and its issuance to a
purchaser in an extrajudicial foreclosure is merely a ministerial
function. 96
The judge with whom an application for a writ of possession is filed
need not look into the validity of the mortgage or the manner of its
foreclosure. Any question regarding the validity of the mortgage or
its foreclosure cannot be a legal ground for the refusal to issue a
writ of possession. Regardless of whether or not there is a pending
suit for the annulment of the mortgage or the foreclosure itself, the
purchaser is entitled to a writ of possession, without prejudice, of
course, to the eventual outcome of the pending annulment case.
The issuance of a writ of possession in favor of the purchaser in a
foreclosure sale is a ministerial act and does not entail the exercise
of discretion. 97
WHEREFORE, in view of the foregoing, the Petition of the Torbela
siblings in G.R. No. 140528 is GRANTED, while the Petition of
Lena Duque-Rosario in G.R. No. 140553 is DENIED for lack of
merit. The Decision dated June 29, 1999 of the Court of Appeals
in CA-G.R. CV No. 39770, which affirmed with modification the
Amended Decision dated January 29, 1992 of the RTC in Civil
Case Nos. U-4359 and U-4733 and Pet. Case No. U-822,
is AFFIRMED WITH MODIFICATIONS, to now read as follows:
(1) Banco Filipino is ORDERED to reconvey Lot No. 356-A to the
Torbela siblings;
(2) The Register of Deeds of Pangasinan is ORDERED to cancel
TCT No. 165813 in the name of Banco Filipino and to issue a new
certificate of title in the name of the Torbela siblings for Lot No.
356-A;
(3) The case is REMANDED to the RTC for further proceedings to
determine the facts essential to the proper application of Articles
448 and 546 of the Civil Code, particularly: (a) the present fair
market value of Lot No. 356-A; (b) the present fair market value of
the improvements thereon; (c) the option of the Torbela siblings to
appropriate the improvements on Lot No. 356-A or require Dr.
Rosario to purchase Lot No. 356-A; and (d) in the event that the
Torbela siblings choose to require Dr. Rosario to purchase Lot No.
356-A but the value thereof is considerably more than the
improvements, then the reasonable rent of Lot No. 356-A to be
paid by Dr. Rosario to the Torbela siblings;
(4) The Torbela siblings are DIRECTED to submit an accounting
of the rents of the improvements on Lot No. 356-A which they had
received and to turn over any balance thereof to Dr. Rosario;
(5) Dr. Rosario is ORDERED to pay the Torbela siblings
P200,000.00 as moral damages, P100,000.00 as exemplary
damages, and P100,000.00 as attorney's fees; and
(6) Banco Filipino is entitled to a writ of possession over Lot-5-F-
8-C-2-B-2-A, covered by TCT No. 165812. The RTC Branch Clerk
of Court is ORDERED to issue a writ of possession for the said
property in favor of Banco Filipino.
SO ORDERED.
||| (Torbela v. Spouses Rosario, G.R. No. 140528, 140553,
[December 7, 2011], 678 PHIL 1-63)
NARVAEZ v. ALCISO
FIRST DIVISION
[G.R. No. 165907. July 27, 2009.]
SPS. DOMINADOR R. NARVAEZ and LILIA
W. NARVAEZ, petitioners, vs. SPS. ROSE OGAS ALCISO and
ANTONIO ALCISO, respondents.
DECISION
CARPIO, J p:
The Case
This is a petition 1 for review on certiorari under Rule 45 of the
Rules of Court. The petition challenges the 29 October 2004
Decision 2 of the Court of Appeals in CA-G.R. CV No. 63757. The
Court of Appeals affirmed with modification the 6 April 1998
Decision 3 of the Regional Trial Court (RTC), Judicial Region 1,
Branch 8, La Trinidad, Benguet, in Civil Case No. 84-CV-0094.
The Facts
Larry A. Ogas (Ogas) owned a 1,329-square meter parcel of land
situated in Pico, La Trinidad, Benguet. The property was covered
by Transfer Certificate of Title (TCT) No. T-1068, and a portion
was subject to a 30-year lease agreement 4 with Esso Standard
Eastern, Inc. Ogas sold the property to his daughter Rose
O. Alciso (Alciso). TCT No T-1068 was cancelled and TCT No. T-
12422 5 was issued in the name of Alciso.
On 25 August 1979, Alciso entered into a Deed of Sale with Right
to Repurchase, 6 selling the property to Jaime Sansano
(Sansano) for P10,000. Alciso later repurchased the property from
Sansano and, on 28 March 1980, she entered into another Deed
of Absolute Sale, 7 this time selling the property to Celso S. Bate
(Bate) for P50,000. The Deed stated that:
The SELLER warrants that her title to and ownership of the
property herein conveyed are free from all liens and
encumbrances except those as appear on the face of the title,
specifically, that lease over the said property in favor of ESSO
STANDARD EASTERN, INC., the rights over which as a lessor the
SELLER likewise hereby transfers in full to the buyer. 8 cHECAS
TCT No. T-12422 was cancelled and TCT No. T-16066 9 was
issued in the name of Bate. On 14 August 1981, Bate entered into
a Deed of Sale of Realty, 10 selling the property to the spouses
Dominador R. Narvaez and Lilia W. Narvaez (Spouses Narvaez)
for P80,000. TCT No. T-16066 was cancelled and TCT No. T-
16528 11 was issued in the name of the Spouses Narvaez. In
1982, the Spouses Narvaez built a commercial building on the
property amounting to P300,000.
Alciso demanded that a stipulation be included in the 14 August
1981 Deed of Sale of Realty allowing her to repurchase the
property from the Spouses Narvaez. In compliance with Alciso's
demand, the Deed stated that, "The SELLER (Bate) carries over
the manifested intent of the original SELLER of the property
(Alciso) to buy back the same at a price under such conditions as
the present BUYERS (Spouses Narvaez) may impose." The
Spouses Narvaez furnished Alciso with a copy of the Deed.
Alciso alleged that she informed the Spouses Narvaez that she
wanted to repurchase the property. The
Spouses Narvaez demanded P300,000, but Alciso was willing to
pay only P150,000. Alciso and the Spouses Narvaez failed to
reach an agreement on the repurchase price.
In a Complaint 12 dated 15 June 1984 and filed with the
RTC, Alciso prayed that (1) the 25 August 1979 Deed of Sale with
Right to Repurchase, the 28 March 1980 Deed of Absolute Sale,
and the 14 August 1981 Deed of Sale of Realty be annulled; (2)
the Register of Deeds be ordered to cancel TCT Nos. T-16066 and
T-16528; (3) the Spouses Narvaezbe ordered to reconvey the
property; and (4) Sansano, Bate, and the Spouses Narvaez be
ordered to pay damages, attorney's fees and expenses of
litigation. Alciso claimed that the intention of the parties was to
enter into a contract of real estate mortgage and not a contract of
sale with right of repurchase. She stated that:
[C]ontrary to the clear intention and agreement of the parties,
particularly the plaintiffs herein, defendant JAIME SANSANO,
taking advantage of the good faith and financial predicament and
difficulties of plaintiffs at the time, caused to be prepared and
induced with insidous [sic] words and machinations, prevailed
upon plaintiff to sign a contract denominated as "Sale With Right
to Repurchase", instead of Deed of Real Estate Mortgage as was
the clear intention and agreement of the parties.
xxx xxx xxx
Defendant JAIME SANSANO caused to be prepared a contract
denominated as DEED OF ABSOLUTE SALE, covering the lot in
question, contrary to the clear intention and understanding of
plaintiff who was inveigled into signing said contract under the
impression that what she was executing was a real estate
mortgage. 13 ESCcaT
The RTC's Ruling
In its 6 April 1998 Decision, the RTC held that (1) the 25 August
1979 Deed of Sale with Right to Repurchase became functus
officio when Alciso repurchased the property; (2) the action to
annul the 28 March 1980 Deed of Absolute Sale had prescribed;
(3) Alciso had no legal personality to annul the 14 August 1981
Deed of Sale of Realty; (4) the 14 August 1981 Deed of Sale of
Realty contained a stipulation pour autrui in favor
of Alciso Alciso could repurchase the property;
(5) Alciso communicated to the Spouses Narvaezher acceptance
of the favor contained in the stipulation pour autrui; (6) the
repurchase price was P80,000; (7) Alciso could either appropriate
the commercial building after payment of the indemnity equivalent
to one-half of its market value when constructed or sell the land to
the Spouses Narvaez; and (8) Alciso was entitled to P100,000
attorney's fees and P20,000 nominal damages.
The Spouses Narvaez appealed to the Court of Appeals. In their
Appellants Brief 14 dated 21 November 2000, the
Spouses Narvaez claimed that (1) the 14 August 1981 Deed of
Sale of Realty did not contain a stipulation pour autrui not all
requisites were present; (2) the RTC erred in setting the
repurchase price at P80,000; (3) they were purchasers for value
and in good faith; and (4) they were builders in good faith.
The Court of Appeals' Ruling
In its 29 October 2004 Decision, the Court of Appeals held that (1)
the 14 August 1981 Deed of Sale of Realty contained a
stipulation pour autrui; (2) Alciso accepted the favor contained in
the stipulation pour autrui; (3) the RTC erred in setting the
repurchase price at P80,000; (4) the 14 August 1981 Deed of Sale
of Realty involved a contract of sale with right of repurchase and
not real estate mortgage; (5) the Spouses Narvaez were builders
in good faith; and (6) Alciso could either appropriate the
commercial building after payment of the indemnity or oblige the
Spouses Narvaez to pay the price of the land, unless the price was
considerably more than that of the building. The Court of Appeals
remanded the case to the RTC for determination of the property's
reasonable repurchase price.
The Issue
The Spouses Narvaez elevated the case to the Court. In their
Petition dated 15 December 2004, the Spouses Narvaez claimed
that Alciso did not communicate her acceptance of the favor
contained in the stipulation pour autrui; thus, she could not
repurchase the property. CDaSAE
The Court's Ruling
The petition is unmeritorious.
Article 1311, paragraph 2, of the Civil Code states the rule on
stipulations pour autrui:
If a contract should contain some stipulation in favor of a third
person, he may demand its fulfillment provided he communicated
his acceptance to the obligor before its revocation. A mere
incidental benefit or interest of a person is not sufficient. The
contracting parties must have clearly and deliberately conferred a
favor upon a third person.
In Limitless Potentials, Inc. v. Quilala, 15 the Court laid down the
requisites of a stipulation pour autrui: (1) there is a stipulation in
favor of a third person; (2) the stipulation is a part, not the whole,
of the contract; (3) the contracting parties clearly and deliberately
conferred a favor to the third person the favor is not an
incidental benefit; (4) the favor is unconditional and
uncompensated; (5) the third person communicated his or her
acceptance of the favor before its revocation; and (6) the
contracting parties do not represent, or are not authorized by, the
third party.
All the requisites are present in the instant case: (1) there is a
stipulation in favor of Alciso; (2) the stipulation is a part, not the
whole, of the contract; (3) Bate and the Spouses Narvaez clearly
and deliberately conferred a favor to Alciso; (4) the favor is
unconditional and uncompensated; (5) Alciso communicated her
acceptance of the favor before its revocation she demanded
that a stipulation be included in the 14 August 1981 Deed of Sale
of Realty allowing her to repurchase the property from the
Spouses Narvaez, and she informed the Spouses Narvaez that
she wanted to repurchase the property; and (6) Bate and the
Spouses Narvaez did not represent, and were not authorized
by, Alciso.
The Spouses Narvaez claim that Alciso did not communicate her
acceptance of the favor. They state that:
A perusal of the provision of the Deed of Sale of Realty between
Celso Bate and the spouses Dominador R. Narvaez and Lilia
W. Narvaez (Annex "B") which clearly provides that "the third
person" (Rose O. Alciso) must have communicated her
acceptance to the obligors (spouses Dominador R. Narvaez and
Lilia W. Narvaez) before its revocation was not complied with. The
acceptance is at best by mere inference. ScHAIT
xxx xxx xxx
Petitioner Narvaez clearly stated that while the contract (Deed of
Sale of Realty, Annex "D") contained an [sic] stipulation in favor of
a third person (Rose O. Alciso), she did not demand its fulfillment
and communicate her acceptance to the obligors before its
revocation.
xxx xxx xxx
We maintain that the stipulation aforequoted is not a
stipulation pour autrui. Let the following be emphasized:
1. While the contract contained a stipulation in favor of a third
person (Rose Alciso) she did not demand its fulfillment and she
never communicated her acceptance to the obligors
(Spouses Narvaez) before its revocation (Uy Tam vs. Leonard, 30
Phil. 471; Coquia vs. Fieldmen's Insurance Co., Inc., 26 SCRA
178)
2. Granting arguendo that the stipulation is a pour autrui yet in the
three meetings Rose Alciso had with Mrs. Narvaez she never
demanded fulfillment of the alleged stipulation pour autrui and,
what is worse, she did not communicate her acceptance to the
obligors before it is revoked. 16
A petition for review on certiorari under Rule 45 of the Rules of
Court should include only questions of law questions of fact are
not reviewable. A question of law exists when the doubt centers
on what the law is on a certain set of facts, while a question of fact
exists when the doubt centers on the truth or falsity of the alleged
facts. There is a question of law if the issue raised is capable of
being resolved without need of reviewing the probative value of
the evidence. Once the issue invites a review of the evidence, the
question is one of fact. 17
Whether Alciso communicated to the Spouses Narvaez her
acceptance of the favor contained in the stipulation pour autrui is
a question of fact. It is not reviewable.
The factual findings of the trial court, especially when affirmed by
the Court of Appeals, are binding on the Court. 18 In its 6 April
1998 Decision, the RTC found that Alcisocommunicated to the
Spouses Narvaez her acceptance of the favor contained in the
stipulation pour autrui. The RTC stated that:
Rose Alciso communicated her acceptance of such favorable
stipulation when she went to see defendant
Lillia [sic] Narvaez in their house. Under the foregoing
circumstances, there is no question that plaintiff Rose Alciso can
maintain her instant action for the enforcement and/or fulfillment of
the aforestated stipulation in her favor to by [sic] back the property
in question. 19 (Emphasis supplied) CSTDEH
In Florentino v. Encarnacion, Sr., 20 the Court held that the
acceptance may be made at any time before the favorable
stipulation is revoked and that the acceptance may be in any
form it does not have to be formal or express but may be
implied. During the trial, Alciso testified that she informed the
Spouses Narvaez that she wanted to repurchase the property:
Q What was your proposal to Mrs. Narvaez by way of settlement?
A I tried to go to her and asked her if I could redeem the property
and Mrs. Narvaez told me why not, you could redeem the property
but not our price.
xxx xxx xxx
Q Now, when you went back to her, what if any did you propose to
her or tell her, Madam witness?
A I just asked for the redemption for the property, sir and she just
told me wa [sic] the price that I could only redeem the property.
Q Three Hundred thousand pesos?
A Yes, Sir.
Q Did you make any counter proposal?
A Yes, for the third time I want [sic] back again your Honor . . . 21
The exceptions to the rule that the factual findings of the trial court
are binding on the Court are (1) when there is grave abuse of
discretion; (2) when the findings are grounded on speculations; (3)
when the inference made is manifestly mistaken; (4) when the
judgment of the Court of Appeals is based on a misapprehension
of facts; (5) when the factual findings are conflicting; (6) when the
Court of Appeals went beyond the issues of the case and its
findings are contrary to the admissions of the parties; (7) when the
Court of Appeals overlooked undisputed facts which, if properly
considered, would justify a different conclusion; (8) when the
findings of the Court of Appeals are contrary to those of the trial
court; (9) when the facts set forth by the petitioners are not
disputed by the respondents; and (10) when the findings of the
Court of Appeals are premised on the absence of evidence and
are contradicted by the evidence on record. 22 The
Spouses Narvaez did not show that the instant case falls under
any of the exceptions. ACIEaH
In its 29 October 2004 Decision, the Court of Appeals held that
Bate and the Spouses Narvaez entered into a sale with right of
repurchase and that, applying Article 448 of the Civil
Code, Alciso could either appropriate the commercial building
after payment of the indemnity or oblige the Spouses Narvaez to
pay the price of the land, unless the price was considerably more
than that of the building. Article 448 states:
Art. 448. The owner of the land on which anything has been built,
sown or planted in good faith, shall have the right to appropriate
as his own the works, sowing or planting, after payment of the
indemnity provided for in Articles 546 and 548, or to oblige the one
who built or planted to pay the price of the land, and the one who
sowed, the proper rent. However, the builder or planter cannot be
obliged to buy the land if its value is considerably more than that
of the building or the trees. In such case, he shall pay reasonable
rent, if the owner of the land does not choose to appropriate the
building or trees after proper indemnity. The parties shall agree
upon the terms of the lease and in case of disagreement, the court
shall fix the terms thereof.
The Court of Appeals stated that:
[T]he contract between defendants-appellants Bate
and Narvaez spouses is a contract of sale with a stipulation
granting plaintiffs-appellees the right to repurchase the property at
a reasonable price. Being the absolute owners of the property in
question, defendants-appellants Narvaez spouses have the
undisputed right to use, enjoy and build thereon.
Having built the improvement on the land they own and registered
in their names, they are likened to builders in good faith and their
rights over the improvement shall be governed by Article 448 of
the Civil Code which provides:
ART. 448. The owner of the land on which anything has been built,
sown or planted in good faith, shall have the right to appropriate
as his own the works, sowing or planting, after payment of the
indemnity provided for in articles 546 and 548, or to oblige the one
who built or planted to pay the price of the land, and the one who
sowed, the proper rent. However, the builder or planter cannot be
obliged to buy the land if its value is considerably more than that
of the building or tress. * In such case, he shall pay reasonable
rent, if the owner of the land does not choose to appropriate the
building or trees after proper indemnity. The parties shall agree
upon the terms of the lease and in case of disagreement, the court
shall fix the terms thereof. HDcaAI
Applying said Article, plaintiffs-appellees, after repurchasing the
land, will have the following options:
(1) to appropriate for themselves the building upon payment of its
value to defendants-appellants Narvaez spouses; OR
(2) to compel the defendants-appellants Narvaez spouses to buy
the land, unless the value of thereof [sic] be considerably more
than that of the building, in which case, said spouses may lease
the land instead. The parties shall agree upon the terms of the
lease and in case of disagreement, the courts shall fix the terms
thereof. 23
The Court disagrees.
The rule is that only errors specifically assigned and properly
argued in the appellant's brief will be considered, except
jurisdictional and clerical errors. 24 However, the Court is clothed
with ample authority to review matters not assigned as errors if
their consideration is necessary in arriving at a just decision. 25
Article 448 is inapplicable in cases involving contracts of sale with
right of repurchase it is inapplicable when the owner of the land
is the builder, sower, or planter. InPecson v. Court of
Appeals, 26 the Court held that:
Article 448 does not apply to a case where the owner of the
land is the builder, sower, or planter who then later loses
ownership of the land by sale or donation. This Court said so
in Coleongco v. Regalado:
Article 361 of the old Civil Code is not applicable in this case,
for Regalado constructed the house on his own land before he
sold said land to Coleongco. Article 361 applies only in cases
where a person constructs a building on the land of another
in good or in bad faith, as the case may be. It does not apply
to a case where a person constructs a building on his own
land, for then there can be no question as to good or bad faith
on the part of the builder.
Elsewise stated, where the true owner himself is the builder of
the works on his own land, the issue of good faith or bad faith
is entirely irrelevant. (Emphasis supplied) HcSaAD
Article 448 is inapplicable in the present case because the
Spouses Narvaez built the commercial building on the land that
they own. Besides, to compel them to buy the land, which they
own, would be absurd.
As the Court of Appeals correctly observed, the terms of the 14
August 1981 Deed of Sale of Realty show that Bate and the
Spouses Narvaez entered into a sale with right of repurchase,
where Bate transferred his right of repurchase to Alciso. The Deed
states that, "The SELLER (Bate) carries over the manifested intent
of the original SELLER of the property (Alciso) to buy back the
same at a price under such conditions as the present BUYERS
(Spouses Narvaez) may impose." Article 1601 of the Civil Code
states that, "Conventional redemption shall take place when the
vendor reserves the right to repurchase the thing sold, with the
obligation to comply with the provisions of Article 1616 and other
stipulations which may have been agreed upon." In Gallar v.
Husain, 27 the Court held that "the right of repurchase may be
exercised only by the vendor in whom the right is recognized by
contract or by any person to whom the right may have been
transferred."
In a sale with right of repurchase, the applicable provisions are
Articles 1606 and 1616 of the Civil Code, not Article 448. Articles
1606 and 1616 state:
Art. 1606. The right referred to in Article 1601, in the absence of
an express agreement, shall last four years from the date of the
contract.
Should there be an agreement, the period cannot exceed ten
years.
However, the vendor may still exercise the right to repurchase
within thirty days from the time final judgment was rendered in a
civil action on the basis that the contract was a true sale with right
to repurchase.
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. aCcEHS
Under Article 1616, Alciso may exercise her right of redemption by
paying the Spouses Narvaez (1) the price of the sale, (2) the
expenses of the contract, (3) legitimate payments made by reason
of the sale, and (4) the necessary and useful expenses made on
the thing sold. In the present case, the cost of the building
constitutes a useful expense. Useful expenses include
improvements which augment the value of the land. 28
Under the first paragraph of Article 1606, Alciso had four years
from 14 August 1981 to repurchase the property since there was
no express agreement as to the period when the right can be
exercised. Tender of payment of the repurchase price is necessary
in the exercise of the right of redemption. Tender of payment is the
seller's manifestation of his or her desire to repurchase the
property with the offer of immediate performance. 29
Alciso's intimation to the Spouses Narvaez that she wanted to
repurchase the property was insufficient. To have effectively
exercised her right of repurchase, Alciso should have tendered
payment. In Lee v. Court of Appeals, 30 the Court held that:
The rule that tender of payment of the repurchase price is
necessary to exercise the right of redemption finds support in civil
law. Article 1616 of the Civil Code of the Philippines . . . furnishes
the guide, to wit: "The vendor cannot avail himself of the right of
repurchase without returning to the vendee the price of the sale . .
."
Thus, in the case of Angao vs. Clavano, 17 Phil. 152, it was held
that "it is not sufficient for the vendor to intimate or to state to the
vendee that the former desires to redeem the thing sold, but he
must immediately thereupon offer to repay the price . . ." Likewise,
in several other cases decided by the Supreme Court (Fructo vs.
Fuentes, 15 Phil. 362; Retes vs. Suelto, 20 Phil. 394; Rosales vs.
Reyes, et al., 25 Phil. 495; Canuto vs. Mariano, 37 Phil. 840; De la
Cruz, et al. vs. Resurreccion, et al., 98 Phil. 975; and other cases)
where the right to repurchase was held to have been properly
exercised, there was a definite finding of tender of payment having
been made by the vendor. (Emphasis supplied.)
Nevertheless, under the third paragraph of Article
1606, Alciso has 30 days from the finality of this Decision to
exercise her right of repurchase. In Laserna v. Javier, 31 the Court
held that:
The new Civil Code in Article 1606, thereof gives the vendors a
retro "the right to repurchase within thirty days from the time final
judgment was rendered in a civil action, on the basis that the
contract was a true sale with the right to repurchase." This
provision has been construed to mean that "after the courts have
decided by a final or executory judgment that the contract was
a pacto de retro and not a mortgage, the vendor (whose claim as
mortgagor had definitely been rejected) may still have the privilege
of repurchasing within 30 days." (Perez, et al. vs. Zulueta, 106
Phil., 264.) ECSHAD
The third paragraph of Article 1606 allows sellers, who considered
the transaction they entered into as mortgage, to repurchase the
property within 30 days from the time they are bound by the
judgment finding the transaction to be one of sale with right of
repurchase.
WHEREFORE, the Court DENIES the petition. The
Court AFFIRMS the 29 October 2004 Decision of the Court of
Appeals in CA-G.R. CV No. 63757
with MODIFICATION.Respondent Rose O. Alciso may exercise
her right of redemption by paying the petitioners Spouses
Dominador R. Narvaez and Lilia W. Narvaez (1) the price of the
sale, (2) the expenses of the contract, (3) legitimate payments
made by reason of the sale, and (4) the necessary and useful
expenses made on the subject property. The Court DIRECTS the
Regional Trial Court, Judicial Region 1, Branch 8, La Trinidad,
Benguet, to determine the amounts of the expenses of the
contract, the legitimate expenses made by reason of the sale, and
the necessary and useful expenses made on the subject property.
After such determination, respondent Rose O. Alciso shall have
30 days to pay the amounts to petitioners Spouses Dominador
R. Narvaez and Lilia W. Narvaez.
SO ORDERED.
||| (Spouses Narvaez v. Spouses Alciso, G.R. No. 165907, [July
27, 2009], 611 PHIL 452-469)
FELICIANO v. ZALDIVAR
FIRST DIVISION
[G.R. No. 162593. September 26, 2006.]
REMEGIA Y. FELICIANO, Substituted by the Heirs of Remegia
Y. Feliciano, as represented by NILO
Y. FELICIANO, petitioners, vs. SPOUSES AURELIO and
LUZ ZALDIVAR, respondents.
DECISION
CALLEJO, SR., J p:
Before the Court is the petition for review on certiorari filed by the
Heirs of Remegia Y. Feliciano (as represented by Nilo
Y. Feliciano) seeking the reversal of the Decision 1 dated July 31,
2003 of the Court of Appeals (CA) in CA-G.R. CV No. 66511 which
ordered the dismissal of the complaint filed by Remegia
Y. Feliciano 2 for declaration of nullity of title and reconveyance of
property. The assailed decision of the appellate court reversed and
set aside that of the Regional Trial Court (RTC) of Cagayan de Oro
City, Branch 25 in Civil Case No. 92-423.
The factual and procedural antecedents of the present case are
as follows:
Remegia Y. Feliciano filed against the spouses Aurelio and
Luz Zaldivar a complaint for declaration of nullity of Transfer
Certificate of Title (TCT) No. T-17993 and reconveyance of the
property covered therein consisting of 243 square meters of lot
situated in Cagayan de Oro City. The said title is registered in the
name of Aurelio Zaldivar.
In her complaint, Remegia alleged that she was the registered
owner of a parcel of land situated in the District of Lapasan in
Cagayan de Oro City with an area of 444 square meters, covered
by TCT No. T-8502. Sometime in 1974, Aurelio, allegedly through
fraud, was able to obtain TCT No. T-17993 covering the 243-sq-m
portion of Remegia's lot as described in her TCT No. T-8502.
According to Remegia, the 243-sq-m portion (subject lot) was
originally leased from her by Pio Dalman, Aurelio's father-in-law,
for P5.00 a month, later increased to P100.00 a month in 1960.
She further alleged that she was going to mortgage the subject lot
to Ignacio Gil for P100.00, which, however, did not push through
because Gil took back the money without returning the receipt she
had signed as evidence of the supposed mortgage contract.
Thereafter, in 1974, Aurelio filed with the then Court of First
Instance of Misamis Oriental a petition for partial cancellation of
TCT No. T-8502. It was allegedly made to appear therein that
Aurelio and his spouse Luz acquired the subject lot from Dalman
who, in turn, purchased it from Gil. The petition was granted and
TCT No. T-17993 was issued in Aurelio's name. aEcTDI
Remegia denied that she sold the subject lot either to Gil or
Dalman. She likewise impugned as falsified the joint affidavit of
confirmation of sale that she and her uncle, Narciso Labuntog,
purportedly executed before a notary public, where Remegia
appears to have confirmed the sale of the subject property to Gil.
She alleged that she never parted with the certificate of title and
that it was never lost. As proof that the sale of the subject lot never
transpired, Remegia pointed out that the transaction was not
annotated on TCT No. T-8502.
In their answer, the spouses Zaldivar denied the material
allegations in the complaint and raised the affirmative defense that
Aurelio is the absolute owner and possessor of the subject lot as
evidenced by TCT No. 17993 and Tax Declaration No. 26864
covering the same. Aurelio claimed that he acquired the subject
lot by purchase from Dalman who, in turn, bought the same from
Gil on April 4, 1951. Gil allegedly purchased the subject lot from
Remegia and this sale was allegedly conformed and ratified by the
latter and her uncle, Narciso Labuntog, before a notary public on
December 3, 1965.
After Aurelio obtained a loan from the Government Service
Insurance System (GSIS), the spouses Zaldivar constructed their
house on the subject lot. They alleged that they and their
predecessors-in-interest had been occupying the said property
since 1947 openly, publicly, adversely and continuously or for over
41 years already. Aurelio filed a petition for the issuance of a new
owner's duplicate copy of TCT No. T-8502 because when he
asked Remegia about it, the latter claimed that it had been
lost. THEDCA
After due trial, the RTC rendered judgment in favor of Remegia. It
declared that TCT No. 17993 in the name of Aurelio was null and
void for having been obtained through misrepresentation, fraud or
evident bad faith by claiming in his affidavit that Remegia's title
(TCT No. T-8502) had been lost, when in fact it still existed.
The court a quo explained that "the court that orders a title
reconstituted when the original is still existing has not acquired
jurisdiction over the case. A judgment otherwise final may be
annulled not only on extrinsic fraud but also for lack of
jurisdiction." 3 Aurelio's use of a false affidavit of loss, according
to the court a quo, was similar to the use during trial of a forged
document or perjured testimony that prevented the adverse party,
Remegia, from presenting her case fully and fairly.
The RTC likewise noted that no public instrument was presented
in evidence conveyancing or transferring title to the subject lot from
Remegia to Dalman, the alleged predecessor-in-interest of the
spouses Zaldivar. The only evidence presented by the said
spouses was a joint affidavit of confirmation of sale purportedly
signed by Remegia and her uncle, the execution of which was
denied by the latter's children. The certificate of title of the
spouses Zaldivar over the subject property was characterized as
irregular because it was issued in a calculated move to deprive
Remegia of dominical rights over her own property. Further, the
spouses Zaldivar could not set up the defense of indefeasibility of
Torrens title since this defense does not extend to a transferor who
takes the certificate of title with notice of a flaw therein.
Registration, thus, did not vest title in favor of the spouses; neither
could they rely on their adverse or continuous possession over the
subject lot for over 41 years, as this could not prevail over the title
of the registered owner pursuant to Sections 50 4 and 51 5 of Act
No. 496, otherwise known as The Land Registration Act.
The dispositive portion of the decision of the court a quo reads:
IN THE LIGHT OF THE FOREGOING, and by preponderance of
evidence, judgment is hereby rendered canceling TCT T-17993
and reconveyance of 243 square meters the title and possession
of the same, by vacating and turning over possession of the 243
square meters of the subject property to the plaintiff [referring to
Remegia] which is part of the land absolutely owned by the plaintiff
covered by [TCT] T-8502 and to solidarily pay the plaintiff Fifty
Thousand Pesos (P50,000.00) as moral damages; Ten Thousand
Pesos (P10,000.00) as exemplary damages; Fifty Thousand
Pesos (P50,000.00) as attorney's fees and Ten Thousand Pesos
(P10,000.00) expenses for litigation to the plaintiff.
SO ORDERED. 6
On appeal, the CA reversed the decision of the RTC and ruled in
favor of the spouses Zaldivar. In holding that Remegia sold to Gil
a 243 sq m portion of the lot covered by TCT No. T-8502, the
appellate court gave credence to Exhibit "5," the deed of sale
presented by the spouses Zaldivar to prove the transaction. The
CA likewise found that Gil thereafter sold the subject property to
Dalman who took actual possession thereof. By way of a
document denominated as joint affidavit of confirmation of sale
executed before notary public Francisco Velez on December 3,
1965, Remegia and her uncle, Narciso Labuntog, confirmed the
sale by Remegia of the subject lot to Gil and its subsequent
conveyance to Dalman. Per Exhibit "6," the CA likewise found that
Dalman had declared the subject lot for taxation purposes in his
name. In 1965, Dalman sold the same to the
spouses Zaldivar who, in turn, had it registered in their names for
taxation purposes beginning 1974. Also in the same year, Aurelio
filed with the then CFI of Misamis Oriental a petition for the
issuance of a new owner's duplicate copy of TCT No. T-8502,
alleging that the owner's duplicate copy was lost; the CFI granted
the petition on March 20, 1974. Shortly, Aurelio filed with the same
CFI another petition, this time for the partial cancellation of TCT
No. T-8502 and for the issuance of a new certificate of title in
Aurelio's name covering the subject lot. The CFI issued an order
granting the petition and, on the basis thereof, the Register of
Deeds of Cagayan de Oro City issued TCT No. T-17993 covering
the subject lot in Aurelio's name.
Based on the foregoing factual findings, the appellate court upheld
the spouses Zaldivar's ownership of the subject lot. The CA stated
that Remegia's claim that she did not sell the same to Gil was
belied by Exhibit "5," a deed which showed that she transferred
ownership thereof in favor of Gil. The fact that the said transaction
was not annotated on Remegia's title was not given significance
by the CA since the lack of annotation would merely affect the
rights of persons who are not parties to the said contract. The CA
also held that the joint affidavit of confirmation of sale executed by
Remegia and Narciso Labuntog before a notary public was a valid
instrument, and carried the evidentiary weight conferred upon it
with respect to its due execution. 7 Moreover, the CA found that
the notary public (Atty. Francisco Velez) who notarized the said
document testified not only to its due execution and authenticity
but also to the truthfulness of its contents. The contradiction
between the testimonies of the children of Narciso Labuntog and
the notary public (Atty. Velez), according to the CA, casts doubt on
the credibility of the former as it was ostensible that their version
of the story was concocted. 8
The CA further accorded in favor of the judge who issued the order
for the issuance of the new owner's duplicate copy of TCT No. T-
8502 the presumption of regularity in the performance of his official
duty. It noted that the same was issued by the CFI after due notice
and hearing. AECIaD
Moreover, prescription and laches or estoppel had already set in
against Remegia. The appellate court pointed out that TCT No. T-
17993 in the name of Aurelio was issued on September 10, 1974,
while Remegia's complaint for annulment and reconveyance of
property was filed more than 17 years thereafter or on August 10,
1992. Consequently, Remegia's action was barred by prescription
because an action for reconveyance must be filed within 10 years
from the issuance of the title since such issuance operates as a
constructive notice. 9 The CA also noted that the
spouses Zaldivar constructed their house on the subject lot some
time in 1974-1975, including a 12-foot firewall made of hollow
blocks, and Remegia took no action to prevent the said
construction.
The dispositive portion of the assailed CA decision reads:
WHEREFORE, foregoing premises considered, the December 3,
1999 Decision of the Regional Trial Court of Misamis Oriental,
Cagayan de Oro City, in Civil Case No. 92-423, is REVERSED
and SET ASIDE and a new one is entered DISMISSING the said
civil case.
SO ORDERED. 10
When their motion for reconsideration was denied by the CA in the
assailed Resolution dated February 4, 2004, the heirs of Remegia
(the petitioners) sought recourse to the Court. In their petition for
review, they allege that the appellate court gravely erred
A.
IN NOT DISMISSING THE APPEAL OF THE RESPONDENTS
(DEFENDANTS-APELLANTS) MOTU PROPIO OR EXPUNGING
THE BRIEF FOR DEFENDANTS-APPELLANTS FROM RECORD
FOR FAILURE TO FILE THE REQUIRED BRIEF FOR THE
DEFENDANTS-APPELLANTS ON TIME BUT BEYOND THE
LAST AND FINAL EXTENDED PERIOD WITHIN WHICH TO FILE
THE SAID BRIEF IN VIOLATION TO SECTION 7 AND SECTION
12, RULE 44 OF THE REVISED RULES OF COURT AND IN
CONTRADICTION TO THE RULING ENUNCIATED IN
CATALINA ROXAS, ET AL. VS. COURT OF APPEALS, G.R. NO.
L-76549, DECEMBER 10, 1987.
B.
IN DENYING THE MOTION FOR RECONSIDERATION WHICH
WAS FILED WITHIN THE FIFTEEN-DAY REGLEMENTARY
PERIOD IN VIOLATION TO THE RULES OF COURT.
C.
IN RULING THAT THE COURT WHO ORDERED THE
ISSUANCE OF NEW CERTIFICATE OF TITLE DESPITE
EXISTENCE OF OWNER'S DUPLICATE COPY THAT WAS
NEVER LOST HAS JURISDICTION OVER THE CASE.
D.
IN CONCLUDING THAT PETITIONER'S (PLAINTIFF-
APPELLEE) CLAIM OF OWNERSHIP OVER THE SUBJECT LOT
WAS BARRED BY ESTOPPEL OR LACHES.
E.
IN CONCLUDING THAT THE RESPONDENTS (DEFENDANTS-
APPELLANTS) ARE THE ABSOLUTE OWNERS OF THE
SUBJECT LOT BASED ON TCT NO. 17993 ISSUED TO THEM.
F.
IN OBVIATING ESSENTIAL AND RELEVANT FACTS, HAD IT
BEEN PROPERLY APPRECIATED, WOULD MAINTAIN
ABSOLUTE OWNERSHIP OF PETITIONER (PLAINTIFF-
APPELLEE) OVER THE SUBJECT LOT AS EVIDENCED BY
EXISTING TCT NO. T-8502. 11
The Court finds the petition meritorious.
It should be recalled that respondent Aurelio Zaldivar filed with the
then CFI of Misamis Oriental a petition for issuance of a new
owner's duplicate copy of TCT No. T-8502, alleging that the
owner's duplicate copy was lost. In the Order dated March 20,
1974, the said CFI granted the petition and consequently, a new
owner's duplicate copy of TCT No. T-8502 was issued.
However, as the trial court correctly held, the CFI which granted
respondent Aurelio's petition for the issuance of a new owner's
duplicate copy of TCT No. T-8502 did not acquire jurisdiction to
issue such order. It has been consistently ruled that "when the
owner's duplicate certificate of title has not been lost, but is in fact
in the possession of another person, then the reconstituted
certificate is void, because the court that rendered the decision
had no jurisdiction. Reconstitution can validly be made only in case
of loss of the original certificate." 12 In such a case, the decision
authorizing the issuance of a new owner's duplicate certificate of
title may be attacked any time. 13
The new owner's duplicate TCT No. T-8502 issued by the CFI
upon the petition filed by respondent Aurelio is thus void. As
Remegia averred during her testimony, the owner's duplicate copy
of TCT No. T-8502 was never lost and was in her possession from
the time it was issued to her:
Q A while ago, you said that you were issued a title in 1968, can
you tell the Honorable Court who was in possession of the title?
A I am the one in possession and I am the one keeping the title.
Q Even up to the present?
A Yes, Sir.
Q Was there any instance that this title was borrowed from you?
A No, Sir.
Q Was there any instance that this title was lost from your
possession?
A No, Sir.
Q Was there any instance that this title was surrendered to the
Register of Deeds of the City of Cagayan de Oro?
A No, Sir. There never was an instance . . . There never was an
instance that this title was surrendered to the Register of Deeds.
Q As there any instance that you petitioned to the Honorable Court
for the issuance of a new owner's duplicate copy of this title in lieu
of the lost copy of said title?
A No, Sir. There was never an instance because this title was
never lost. 14
Consequently, the court a quo correctly nullified TCT No. T-17993
in Aurelio's name, emanating as it did from the new owner's
duplicate TCT No. T-8502, which Aurelio procured through fraud.
Respondent Aurelio cannot raise the defense of indefeasibility of
title because "the principle of indefeasibility of a Torrens title does
not apply where fraud attended the issuance of the title. The
Torrens title does not furnish a shield for fraud." 15 As such, a title
issued based on void documents may be annulled. 16
The appellate court's reliance on the joint affidavit of confirmation
of sale purportedly executed by Remegia and her uncle, Narciso
Labuntog, is not proper. In the first place, respondent Aurelio
cannot rely on the joint affidavit of confirmation of sale to prove
that they had validly acquired the subject lot because, by itself, an
affidavit is not a mode of acquiring ownership. 17 Moreover, the
affidavit is written entirely in English in this wise:
JOINT AFFIDAVIT OF CONFIRMATION OF SALE 18
We, NARCISO LABUNTOG and REMEGIA YAPE
DE FELICIANO, both of legal age, Filipino citizens and residents
of Lapasan, Cagayan de Oro City, Philippines, after being duly
sworn according to law, depose and say:
1. That the late FRANCISCO LABUNTOG is our common
ancestor, the undersigned NARCISO LABUNTOG being one of his
sons and the undersigned REMEGIA YAPE DE FELICIANO being
the daughter of the late Emiliana Labuntog, sister of Narciso
Labuntog; cADEIa
2. That after his death, the late Francisco Labuntog left behind a
parcel of land known as Lot No. 2166 C-2 of the Cagayan Cadastre
situated at Lapasan, City of Cagayan de Oro, Philippines which is
being administered by the undersigned Narciso Labuntog under
Tax Decl. No. 27633;
3. That the entire Cadastral Lot No. 2166 C-2 has been subdivided
and apportioned among the heirs of the late Francisco Labuntog,
both of the undersigned affiants having participated and shared in
the said property, Remegia Yape de Feliciano having inherited the
share of her mother Emiliana Labuntog, sister of Narciso
Labuntog;
4. That on April 4, 1951, Remegia Yape de Feliciano sold a portion
of her share to one Ignacio Gil and which portion is more
particularly described and bounded as follows:
"On the North for 13 meters by Agustin Cabaraban;
On the South for 13 meters by Antonio Babanga;
On the East for 18 meters by Clotilde Yape; and
On the West for 18 meters by Agustin Cabaraban;"
5. That sometime in the year 1960, the said Ignacio Gil conveyed
the same portion to Pio Dalman, who is of legal age, Filipino citizen
and likewise a resident of Lapasan, Cagayan de Oro City and that
since 1960 up to the present, the said Pio Dalman has been in
continuous, open, adverse and exclusive possession of the
property acquired by him in concept of owner;
6. That we hereby affirm, ratify and confirm the acquisition of the
above described portion acquired by Pio Dalman inasmuch as the
same is being used by him as his residence and family home and
we hereby request the Office of the City Assessor to segregate
this portion from our Tax Decl. No. 27633 and that a new tax
declaration be issued in the name of PIO DALMAN embracing the
area acquired and occupied by him.
IN WITNESS WHEREOF, we have hereunto affixed our
signatures on this 3rd day of December, 1965 at Cagayan de Oro
City, Philippines.
(SGD.) Narciso Labuntog (SGD.)Remegia Yape de Feliciano
NARCISO LABUNTOG REMEGIA YAPE DE FELICIANO
Affiant Affiant
SUBSCRIBED & SWORN to before me this 3rd day of December,
1965 at Cagayan de Oro City, Philippines, affiants exhibited their
Residence Certificates as follows: NARCISO LABUNTOG, A-
1330509 dated Oct. 5, 1965 and REMEGIA YAPE
DE FELICIANO, A-1811104 dated Dec. 3, 1965 both issued at
Cagayan de Oro City.
(SGD.) ILLEGIBLE
FRANCISCO X. VELEZ
Notary Public
However, based on Remegia's testimony, she could not read and
understand English:
COURT:
Can you read English?
A No, I cannot read and understand English.
ATTY. LEGASPI:
Q What is your highest educational attainment?
A Grade 3.
Q But you can read and understand Visayan?
A Yes, I can read Visayan, but I cannot understand well idiomatic
visayan terms (laglom nga visayan). 19
On this point, Article 1332 of the Civil Code is relevant:
ART. 1332. When one of the parties is unable to read, or if the
contract is in a language not understood by him, and mistake or
fraud is alleged, the person enforcing the contract must show that
the terms thereof have been fully explained to the former.
The principle that a party is presumed to know the import of a
document to which he affixes his signature is modified by the
foregoing article. Where a party is unable to read or when the
contract is in a language not understood by the party and mistake
or fraud is alleged, the obligation to show that the terms of the
contract had been fully explained to said party who is unable to
read or understand the language of the contract devolves on the
party seeking to enforce the contract to show that the other party
fully understood the contents of the document. If he fails to
discharge this burden, the presumption of mistake, if not, fraud,
stands unrebutted and controlling. 20
Applying the foregoing principles, the presumption is that
Remegia, considering her limited educational attainment, did not
understand the full import of the joint affidavit of confirmation of
sale and, consequently, fraud or mistake attended its execution.
The burden is on respondents, the spouses Zaldivar, to rebut this
presumption. They tried to discharge this onus by presenting Atty.
Francisco Velez (later RTC Judge) who notarized the said
document. Atty. Velez testified that he "read and interpreted" the
document to the affiants and he asked them whether the contents
were correct before requiring them to affix their signatures
thereon. 21 The bare statement of Atty. Velez that he "read and
interpreted" the document to the affiants and that he asked them
as to the correctness of its contents does not necessarily establish
that Remegia actually comprehended or understood the import of
the joint affidavit of confirmation of sale. Nowhere is it stated in the
affidavit itself that its contents were fully explained to Remegia in
the language that she understood before she signed the same.
Thus, to the mind of the Court, the presumption of fraud or mistake
attending the execution of the joint affidavit of confirmation of sale
was not sufficiently overcome.
Moreover, the purported joint affidavit of confirmation of sale failed
to state certain important information. For example, it did not
mention the consideration or price for the alleged sale by Remegia
of the subject lot to Ignacio Gil. Also, while it stated that the subject
lot was conveyed by Ignacio Gil to Pio Dalman, it did not say
whether the conveyance was by sale, donation or any other mode
of transfer. Finally, it did not also state how the ownership of the
subject lot was transferred from Pio Dalman to respondent Aurelio
or respondents.
Respondents' claim that they had been occupying the subject lot
since 1947 openly, publicly, adversely and continuously or for over
41 years is unavailing. In a long line of cases, 22the Court has
consistently ruled that lands covered by a title cannot be acquired
by prescription or adverse possession. A claim of acquisitive
prescription is baseless when the land involved is a registered land
following Article 1126 23 of the Civil Code in relation to Section 46
of Act No. 496 or the Land Registration Act (now Section
47 24 of P.D. No 1529):
Appellants' claim of acquisitive prescription is likewise baseless.
Under Article 1126 of the Civil Code, prescription of ownership of
lands registered under the Land Registration Actshall be governed
by special laws. Correlatively, Act No. 496 provides that no title to
registered land in derogation of that of the registered owner shall
be acquired by adverse possession. Consequently, proof of
possession by the defendants is both immaterial and
inconsequential. 25
Neither can the respondents spouses Zaldivar rely on the principle
of indefeasibility of TCT No. 17793 which was issued on
September 10, 1974 in favor of respondent Aurelio. As it is, the
subject lot is covered by two different titles: TCT No. T-8502 in
Remegia's name covering an area of 444 sq m including therein
the subject lot, and TCT No. 17793 in the name of respondent
Aurelio covering the subject lot. Aurelio's title over the subject lot
has not become indefeasible, by virtue of the fact that TCT No. T-
8502 in the name of Remegia has remained valid. The following
disquisition is apropos:
The claim of indefeasibility of the petitioner's title under the Torrens
land title system would be correct if previous valid title to the same
parcel of land did not exist. The respondent had a valid title . . . It
never parted with it; it never handed or delivered to anyone its
owner's duplicate of the transfer certificate of title; it could not be
charged with negligence in the keeping of its duplicate certificate
of title or with any act which could have brought about the issuance
of another certificate upon which a purchaser in good faith and for
value could rely. If the petitioner's contention as to indefeasibility
of his title should be upheld, then registered owners without the
least fault on their part could be divested of their title and deprived
of their property. Such disastrous results which would shake and
destroy the stability of land titles had not been foreseen by those
who had endowed with indefeasibility land titles issued under the
Torrens system. 26
Remegia's TCT No. T-8502, thus, prevails over respondent
Aurelio's TCT No. 17793, especially considering that, as earlier
opined, the latter was correctly nullified by the RTC as it emanated
from the new owner's duplicate TCT No. T-8502, which in turn,
respondent Aurelio was able to procure through fraudulent
means.
Contrary to the appellate court's holding, laches has not set in
against Remegia. She merely tolerated the occupation by the
respondents of the subject lot:
Q You also stated in the direct that the defendants in this case, Mr.
and Mrs. Zaldivar, were issued a title over a portion of this land
which you described a while ago?
A We knew about that only recently.
Q When was that when you knew that the defendants were issued
title over a portion of the land you described a while ago?
A In June, 1992.
Q In what way did you discover that a portion of the land was titled
in the name of the defendants?
A I discovered that my property was titled by Mr. and
Mrs. Zaldivar when I went to the Register of Deeds for the purpose
of partitioning my property among my children.
Q And you were surprised why it is titled in their names?
A Yes.
Q Is it not a fact that the defendants have constructed their house
on a portion of the land you described a while ago?
A Yes. I knew that the Zaldivars built a house on the property I
described a while ago, but I did not bother because I know that I
can get that property because I own that property.
Q And the defendants constructed that house in 1974-75, am I
correct?
A Yes.
Q And as a matter of fact, you have also a house very near to the
house that was constructed by the defendants in this case?
A Yes.
Q Can you tell us what is the distance between your house and
the house constructed by the defendants in 1974?
A They are very near because they constructed their house in my
lot.
Q How many meters, more or less?
A It is very near, very close.
Q When they constructed their house, meaning the defendants,
did you not stop the defendants from the construction?
A I did not bother in stopping the Zaldivars in constructing the
house because I am certain that I can get the land because I own
the land.
Q Aside from not protesting to the construction, did you not bring
this matter to the attention of the barangay captain or to the police
authorities?
A No, because I did not bring this matter to the barangay captain
nor to the police authorities. It is only now that we discovered that
it is already titled.
Q When you said now, it is in 1992?
A Yes.
Q Is it not a fact that after the house was finished the defendants
and their family resided in that house which they constructed?
A Yes, after the house was finished, they resided in that house.
Q As a matter of fact, from that time on up to the present, the
defendants are still residing in that house which they constructed
in 1974 or 1975, am I correct?
A Yes.
Q As a matter of fact also the defendants fenced the lot in which
their house was constructed with hollow blocks, am I correct?
A Yes, the house of the Zaldivars was fenced by them with hollow
blocks and I did not stop them to avoid trouble.
Q As a matter of fact, the boundary between your house and the
house of Zaldivar, there was constructed a firewall made of hollow
blocks about twelve feet in height, am I correct?
A Yes.
Q Such that you cannot see their house and also the Zaldivars
cannot see your house because of that high firewall, am I correct?
A We can still see each other because the firewall serves as the
wall of their house.
Q When did the Zaldivars construct that hollow blocks fence? After
the house was finished?
A I cannot remember.
Q But it could be long time ago?
ATTY. VEDAD:
Q That would be repetitious. She answered she could not
remember.
ATTY. LEGASPI:
Q It could be many years ago?
A I cannot remember when they constructed the fence.
Q Did you [file] any protest or complaint when the Zaldivars
constructed the hollow blocks fence?
A No.
Q Neither did you bring any action in court or with the barangay
captain or the police authorities when the Zaldivars constructed
that hollow blocks fence?
A No, I did not complain the fencing by the Zaldivars. Only now
that we know that we bring this matter to the barangay captain.
Q And in the [office of the] barangay captain, you were able to
meet the defendants, am I correct?
A No. When we went to the barangay captain, the Zaldivars did
not appear there; therefore, we hired a lawyer and filed this
case. 27
Case law teaches that if the claimant's possession of the land is
merely tolerated by its lawful owner, the latter's right to recover
possession is never barred by laches:
As registered owners of the lots in question, the private
respondents have a right to eject any person illegally occupying
their property. This right is imprescriptible. Even if it be supposed
that they were aware of the petitioner's occupation of the property,
and regardless of the length of that possession, the lawful owners
have a right to demand the return of their property at any time as
long as the possession was unauthorized or merely tolerated, if at
all. This right is never barred by laches. 28
Nonetheless, the Court is not unmindful of the fact that
respondents had built their house on the subject lot and, despite
knowledge thereof, Remegia did not lift a finger to prevent it.
Article 453 of the Civil Code is applicable to their case:
ART. 453. If there was bad faith, not only on the part of the person
who built, planted or sowed on the land of another, but also on the
part of the owner of such land, the rights of one and the other shall
be the same as though both had acted in good faith.
It is understood that there is bad faith on the part of the landowner
whenever the act was done with his knowledge and without
opposition on his part.
Under the circumstances, respondents and Remegia are in mutual
bad faith and, as such, would entitle the former to the application
of Article 448 of the Civil Code governing builders in good faith:
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 29 and 548, 30 or to oblige
the one who built or planted to pay the price of the land, and the
one who sowed, the proper rent. However, the builder or planter
cannot be obliged to buy the land if its value is considerably more
than that of the building or trees. In such a case, he shall pay
reasonable rent, if the owner of the land does not choose to
appropriate the building or trees after the proper indemnity. The
parties shall agree upon the terms of the lease and in case of
disagreement, the court shall fix the terms thereof.
Following the above provision, 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 building, planting or sowing,
after payment to the builder, planter or sower of the necessary and
useful expenses, and in the proper case, expenses for pure luxury
or mere pleasure. 31
The owner of the land may also oblige the builder, planter or sower
to purchase and pay the price of the land. If the owner chooses to
sell his land, the builder, planter or sower must purchase the land,
otherwise the owner may remove the improvements thereon. The
builder, planter, or sower, however, is not obliged to purchase the
land if its value is considerably more than the building, planting or
sowing. In such case, the builder, planter or sower must pay rent
to the owner of the land. If the parties cannot come to terms over
the conditions of the lease, the court must fix the terms thereof. 32
The right to choose between appropriating the improvement or
selling the land on which the improvement of the builder, planter
or sower stands, is given to the owner of the land, 33 Remegia, in
this case, who is now substituted by petitioners as her heirs.
Consequently, the petitioners are obliged to exercise either of the
following options: (1) to appropriate the improvements, including
the house, built by the respondents on the subject lot by paying
the indemnity required by law, or (2) sell the subject lot to the
respondents. Petitioners cannot refuse to exercise either option
and compel respondents to remove their house from the
land. 34 In case petitioners choose to exercise the second option,
respondents are not obliged to purchase the subject lot if its value
is considerably more than the improvements thereon and in which
case, respondents must pay rent to petitioners. If they are unable
to agree on the terms of the lease, the court shall fix the terms
thereof.
In light of the foregoing disquisition, the Court finds it unnecessary
to resolve the procedural issues raised by petitioners.
WHEREFORE, the petition is GRANTED. The Decision dated July
31, 2003 and Resolution dated February 4, 2004 of the Court of
Appeals in CA-G.R. CV No. 66511 are REVERSED and SET
ASIDE. The Decision dated December 3, 1999 of the Regional
Trial Court of Cagayan de Oro City, Branch 25 in Civil Case No.
92-423 is REINSTATED with the MODIFICATION that petitioners
are likewise ordered to exercise the option under Article 448 of the
Civil Code. aDHCEA
SO ORDERED.
||| (Feliciano v. Spouses Zaldivar, G.R. No. 162593, [September
26, 2006], 534 PHIL 280-306)
COMMUNITY CAGAYAN INC v. NANOL
SECOND DIVISION
[G.R. No. 176791. November 14, 2012.]
COMMUNITIES CAGAYAN, INC., petitioner, vs. SPOUSES
ARSENIO (Deceased) and ANGELES NANOL AND ANYBODY
CLAIMING RIGHTS UNDER THEM,respondents.
DECISION
DEL CASTILLO, J p:
Laws fill the gap in a contract.
This Petition for Review on Certiorari 1 under Rule 45 of the Rules
of Court assails the December 29, 2006 Decision 2 and the
February 12, 2007 Order 3 of the Regional Trial Court
(RTC), Cagayan de Oro City, Branch 18, in Civil Case No. 2005-
158. HSDaTC
Factual Antecedents
Sometime in 1994, respondent-spouses Arsenio and
Angeles Nanol entered into a Contract to Sell 4 with
petitioner Communities Cagayan, Inc., 5 whereby the latter
agreed to sell to respondent-spouses a house and Lots 17 and
19 6 located at Block 16, Camella Homes
Subdivision, Cagayan de Oro City, 7 for the price of
P368,000.00. 8 Respondent-spouses, however, did not avail of
petitioner's in-house financing due to its high interest
rates. 9 Instead, they obtained a loan from Capitol Development
Bank, a sister company of petitioner, using the property as
collateral. 10 To facilitate the loan, a simulated sale over the
property was executed by petitioner in favor of respondent-
spouses. 11 Accordingly, titles were transferred in the names of
respondent-spouses under Transfer Certificates of Title (TCT)
Nos. 105202 and 105203, and submitted to Capitol Development
Bank for loan processing. 12 Unfortunately, the bank collapsed
and closed before it could release the loan. 13
Thus, on November 30, 1997, respondent-spouses entered into
another Contract to Sell 14 with petitioner over the same property
for the same price of P368,000.00. 15 This time, respondent-
spouses availed of petitioner's in-house financing 16 thus,
undertaking to pay the loan over four years, from 1997 to 2001. 17
Sometime in 2000, respondent Arsenio demolished the original
house and constructed a three-story house allegedly valued at
P3.5 million, more or less. 18
In July 2001, respondent Arsenio died, leaving his wife, herein
respondent Angeles, to pay for the monthly amortizations. 19
On September 10, 2003, petitioner sent respondent-spouses a
notarized Notice of Delinquency and Cancellation of Contract to
Sell 20 due to the latter's failure to pay the monthly amortizations.
In December 2003, petitioner filed before Branch 3 of the
Municipal Trial Court in Cities of Cagayan de Oro City, an action
for unlawful detainer, docketed as C3-Dec-2160, against
respondent-spouses. 21 When the case was referred for
mediation, respondent Angeles offered to pay P220,000.00 to
settle the case but petitioner refused to accept the
payment. 22The case was later withdrawn and consequently
dismissed because the judge found out that the titles were already
registered under the names of respondent-spouses. 23
Unfazed by the unfortunate turn of events, petitioner, on July 27,
2005, filed before Branch 18 of the RTC, Cagayan de Oro City, a
Complaint for Cancellation of Title, Recovery of Possession,
Reconveyance and Damages, 24 docketed as Civil Case No.
2005-158, against respondent-spouses and all persons claiming
rights under them. Petitioner alleged that the transfer of the titles
in the names of respondent-spouses was made only in compliance
with the requirements of Capitol Development Bank and that
respondent-spouses failed to pay their monthly amortizations
beginning January 2000. 25 Thus, petitioner prayed that TCT Nos.
T-105202 and T-105203 be cancelled, and that respondent
Angeles be ordered to vacate the subject property and to pay
petitioner reasonable monthly rentals from January 2000 plus
damages. 26
In her Answer, 27 respondent Angeles averred that the Deed of
Absolute Sale is valid, and that petitioner is not the proper party to
file the complaint because petitioner is different from Masterplan
Properties, Inc. 28 She also prayed for damages by way of
compulsory counterclaim. 29
In its Reply, 30 petitioner attached a copy of its Certificate of Filing
of Amended Articles of Incorporation 31 showing that Masterplan
Properties, Inc. and petitioner are one and the same. As to the
compulsory counterclaim for damages, petitioner denied the same
on the ground of "lack of knowledge sufficient to form a belief as
to the truth or falsity of such allegation." 32
Respondent Angeles then moved for summary judgment and
prayed that petitioner be ordered to return the owner's duplicate
copies of the TCTs. 33
Pursuant to Administrative Order No. 59-2005, the case was
referred for mediation. 34 But since the parties failed to arrive at
an amicable settlement, the case was set for preliminary
conference on February 23, 2006. 35
On July 7, 2006, the parties agreed to submit the case for decision
based on the pleadings and exhibits presented during the
preliminary conference. 36
Ruling of the Regional Trial Court
On December 29, 2006, the RTC rendered judgment declaring the
Deed of Absolute Sale invalid for lack of consideration. 37 Thus, it
disposed of the case in this wise: SITCcE
WHEREFORE, the Court hereby declares the Deed of Absolute
Sale VOID. Accordingly, Transfer Certificate[s] of Title Nos.
105202 and 105203 in the names of the [respondents], Arsenio
(deceased) and Angeles Nanol, are ordered CANCELLED. The
[respondents] and any person claiming rights under them are
directed to turn-over the possession of the house and lot to
[petitioner], Communities Cagayan, Inc., subject to the latter's
payment of their total monthly installments and the value of the
new house minus the cost of the original house.
SO ORDERED. 38
Not satisfied, petitioner moved for reconsideration of the Decision
but the Motion 39 was denied in an Order 40 dated February 12,
2007.
Issue
Instead of appealing the Decision to the Court of Appeals (CA),
petitioner opted to file the instant petition directly with this Court on
a pure question of law, to wit:
WHETHER . . . THE ACTION [OF] THE [RTC] BRANCH 18 . . . IN
ORDERING THE RECOVERY OF POSSESSION BY
PETITIONER 'subject to the latter's payment of their total monthly
installments and the value of the new house minus the cost of the
original house' IS CONTRARY TO LAW AND JURISPRUDENCE
. . . . 41
Petitioner's Arguments
Petitioner seeks to delete from the dispositive portion the order
requiring petitioner to reimburse respondent-spouses the total
monthly installments they had paid and the value of the new house
minus the cost of the original house. 42 Petitioner claims that there
is no legal basis for the RTC to require petitioner to reimburse the
cost of the new house because respondent-spouses were in bad
faith when they renovated and improved the house, which was not
yet their own. 43 Petitioner further contends that instead of
ordering mutual restitution by the parties, the RTC should have
applied Republic Act No. 6552, otherwise known as the Maceda
Law, 44 and that instead of awarding respondent-spouses a
refund of all their monthly amortization payments, the RTC should
have ordered them to pay petitioner monthly rentals. 45
Respondent Angeles' Arguments
Instead of answering the legal issue raised by petitioner,
respondent Angeles asks for a review of the Decision of the RTC
by interposing additional issues. 46 She maintains that the Deed
of Absolute Sale is valid. 47 Thus, the RTC erred in cancelling
TCT Nos. 105202 and 105203.
Our Ruling
The petition is partly meritorious.
At the outset, we must make it clear that the issues raised by
respondent Angeles may not be entertained. For failing to file an
appeal, she is bound by the Decision of the RTC. Well entrenched
is the rule that "a party who does not appeal from a judgment can
no longer seek modification or reversal of the same. He may
oppose the appeal of the other party only on grounds consistent
with the judgment." 48 For this reason, respondent Angeles may
no longer question the propriety and correctness of the annulment
of the Deed of Absolute Sale, the cancellation of TCT Nos. 105202
and 105203, and the order to vacate the property.
Hence, the only issue that must be resolved in this case is whether
the RTC erred in ordering petitioner to reimburse respondent-
spouses the "total monthly installments and the value of the new
house minus the cost of the original house." 49 Otherwise stated,
the issues for our resolution are:
1) Whether petitioner is obliged to refund to respondent-spouses
all the monthly installments paid; and
2) Whether petitioner is obliged to reimburse respondent-spouses
the value of the new house minus the cost of the original house.
Respondent-spouses are entitled to the
cash surrender value of the payments
on the property equivalent to 50% of the
total payments made.
Considering that this case stemmed from a Contract to Sell
executed by the petitioner and the respondent-spouses, we agree
with petitioner that the Maceda Law, which governs sales of real
estate on installment, should be applied. AHCaED
Sections 3, 4, and 5 of the Maceda Law provide for the rights of a
defaulting buyer, to wit:
Section 3. In all transactions or contracts involving the sale or
financing of real estate on installment payments, including
residential condominium apartments but excluding industrial lots,
commercial buildings and sales to tenants under Republic Act
Numbered Thirty-eight hundred forty-four, as amended by
Republic Act Numbered Sixty-three hundred eighty-nine, where
the buyer has paid at least two years of installments, the buyer is
entitled to the following rights in case he defaults in the payment
of succeeding installments:
(a) To pay, without additional interest, the unpaid installments due
within the total grace period earned by him which is hereby fixed
at the rate of one month grace period for every one year of
installment payments made: Provided, That this right shall be
exercised by the buyer only once in every five years of the life of
the contract and its extensions, if any.
(b) If the contract is canceled, the seller shall refund to the
buyer the cash surrender value of the payments on the
property equivalent to fifty percent of the total payments
made, and, after five years of installments, an additional five per
cent every year but not to exceed ninety per cent of the total
payments made: Provided, That the actual cancellation of the
contract shall take place after thirty days from receipt by the buyer
of the notice of cancellation or the demand for rescission of the
contract by a notarial act and upon full payment of the cash
surrender value to the buyer.
Down payments, deposits or options on the contract shall be
included in the computation of the total number of installment
payments made. (Emphasis supplied.)
Section 4. In case where less than two years of installments were
paid, the seller shall give the buyer a grace period of not less than
sixty days from the date the installment became due.
If the buyer fails to pay the installments due at the expiration of the
grace period, the seller may cancel the contract after thirty days
from receipt by the buyer of the notice of cancellation or the
demand for rescission of the contract by a notarial act.
Section 5. Under Sections 3 and 4, the buyer shall have the right
to sell his rights or assign the same to another person or to
reinstate the contract by updating the account during the grace
period and before actual cancellation of the contract. The deed of
sale or assignment shall be done by notarial act.
In this connection, we deem it necessary to point out that, under
the Maceda Law, the actual cancellation of a contract to sell takes
place after 30 days from receipt by the buyer of the notarized
notice of cancellation, 50 and upon full payment of the cash
surrender value to the buyer. 51 In other words, before a contract
to sell can be validly and effectively cancelled, the seller has (1) to
send a notarized notice of cancellation to the buyer and (2) to
refund the cash surrender value. 52 Until and unless the seller
complies with these twin mandatory requirements, the contract to
sell between the parties remains valid and subsisting. 53 Thus, the
buyer has the right to continue occupying the property subject of
the contract to sell, 54 and may "still reinstate the contract by
updating the account during the grace period and before the actual
cancellation" 55 of the contract.
In this case, petitioner complied only with the first condition by
sending a notarized notice of cancellation to the respondent-
spouses. It failed, however, to refund the cash surrender value to
the respondent-spouses. Thus, the Contract to Sell remains valid
and subsisting and supposedly, respondent-spouses have the
right to continue occupying the subject property. Unfortunately, we
cannot reverse the Decision of the RTC directing respondent-
spouses to vacate and turn-over possession of the subject
property to petitioner because respondent-spouses never
appealed the order. The RTC Decision as to respondent-spouses
is therefore considered final. ESCTaA
In addition, in view of respondent-spouses' failure to appeal, they
can no longer reinstate the contract by updating the account.
Allowing them to do so would be unfair to the other party and is
offensive to the rules of fair play, justice, and due process. Thus,
based on the factual milieu of the instant case, the most that we
can do is to order the return of the cash surrender value. Since
respondent-spouses paid at least two years of installment, 56 they
are entitled to receive the cash surrender value of the payments
they had made which, under Section 3 (b) of the Maceda Law, is
equivalent to 50% of the total payments made.
Respondent-spouses are entitled to
reimbursement of the improvements
made on the property.
Petitioner posits that Article 448 of the Civil Code does not apply
and that respondent-spouses are not entitled to reimbursement of
the value of the improvements made on the property because they
were builders in bad faith. At the outset, we emphasize that the
issue of whether respondent-spouses are builders in good faith or
bad faith is a factual question, which is beyond the scope of a
petition filed under Rule 45 of the Rules of Court. 57 In fact,
petitioner is deemed to have waived all factual issues since it
appealed the case directly to this Court, 58 instead of elevating the
matter to the CA. It has likewise not escaped our attention that
after their failed preliminary conference, the parties agreed to
submit the case for resolution based on the pleadings and exhibits
presented. No trial was conducted. Thus, it is too late for petitioner
to raise at this stage of the proceedings the factual issue of
whether respondent-spouses are builders in bad faith. Hence, in
view of the special circumstances obtaining in this case, we are
constrained to rely on the presumption of good faith on the part of
the respondent-spouses which the petitioner failed to rebut. Thus,
respondent-spouses being presumed builders in good faith, we
now rule on the applicability of Article 448 of the Civil Code.
As a general rule, Article 448 on builders in good faith does not
apply where there is a contractual relation between the
parties, 59 such as in the instant case. We went over the records
of this case and we note that the parties failed to attach a copy of
the Contract to Sell. As such, we are constrained to apply Article
448 of the Civil Code, which provides viz.:
ART. 448. The owner of the land on which anything has been built,
sown or planted in good faith, shall have the right to appropriate
as his own the works, sowing or planting, after payment of the
indemnity provided for in Articles 546 and 548, or to oblige the one
who built or planted to pay the price of the land, and the one who
sowed, the proper rent. However, the builder or planter cannot be
obliged to buy the land if its value is considerably more than that
of the building or trees. In such case, he shall pay reasonable rent,
if the owner of the land does not choose to appropriate the building
or trees after proper indemnity. The parties shall agree upon the
terms of the lease and in case of disagreement, the court shall fix
the terms thereof.
Article 448 of the Civil Code applies when the builder believes that
he is the owner of the land or that by some title he has the right to
build thereon, 60 or that, at least, he has a claim of title
thereto. 61 Concededly, this is not present in the instant case. The
subject property is covered by a Contract to Sell hence ownership
still remains with petitioner being the seller. Nevertheless, there
were already instances where this Court applied Article 448 even
if the builders do not have a claim of title over the property. Thus:
This Court has ruled that this provision covers only cases in which
the builders, sowers or planters believe themselves to be owners
of the land or, at least, to have a claim of title thereto. It does not
apply when the interest is merely that of a holder, such as a mere
tenant, agent or usufructuary. From these pronouncements, good
faith is identified by the belief that the land is owned; or that by
some title one has the right to build, plant, or sow thereon.
However, in some special cases, this Court has used Article 448
by recognizing good faith beyond this limited definition. Thus,
in Del Campo v. Abesia, this provision was applied to one whose
house despite having been built at the time he was still co-
owner overlapped with the land of another. This article was also
applied to cases wherein a builder had constructed improvements
with the consent of the owner. The Court ruled that the law deemed
the builder to be in good faith. In Sarmiento v. Agana, the builders
were found to be in good faith despite their reliance on the consent
of another, whom they had mistakenly believed to be the owner of
the land. 62
The Court likewise applied Article 448 in Spouses Macasaet v.
Spouses Macasaet 63 notwithstanding the fact that the builders
therein knew they were not the owners of the land. In said case,
the parents who owned the land allowed their son and his wife to
build their residence and business thereon. As found by this Court,
their occupation was not by mere tolerance but "upon the invitation
of and with the complete approval of (their parents), who desired
that their children would occupy the premises. It arose from familial
love and a desire for family solidarity . . . ." 64 Soon after, conflict
between the parties arose. The parents demanded their son and
his wife to vacate the premises. The Court thus ruled that as
owners of the property, the parents have the right to possession
over it. However, they must reimburse their son and his wife for
the improvements they had introduced on the property because
they were considered builders in good faith even if they knew for
a fact that they did not own the property, thus: CSaITD
Based on the aforecited special cases, Article 448 applies to the
present factual milieu. The established facts of this case show that
respondents fully consented to the improvements introduced by
petitioners. In fact, because the children occupied the lots upon
their invitation, the parents certainly knew and approved of the
construction of the improvements introduced thereon. Thus,
petitioners may be deemed to have been in good faith when they
built the structures on those lots.
The instant case is factually similar to Javier v. Javier. In that case,
this Court deemed the son to be in good faith for building the
improvement (the house) with the knowledge and consent of his
father, to whom belonged the land upon which it was built. Thus,
Article 448 was applied. 65
In fine, the Court applied Article 448 by construing good faith
beyond its limited definition. We find no reason not to apply the
Court's ruling in Spouses Macasaet v. Spouses Macasaet in this
case. We thus hold that Article 448 is also applicable to the instant
case. First, good faith is presumed on the part of the respondent-
spouses. Second, petitioner failed to rebut this presumption. Third,
no evidence was presented to show that petitioner opposed or
objected to the improvements introduced by the respondent-
spouses. Consequently, we can validly presume that petitioner
consented to the improvements being constructed. This
presumption is bolstered by the fact that as the subdivision
developer, petitioner must have given the respondent-spouses
permits to commence and undertake the construction. Under
Article 453 of the Civil Code, "[i]t is understood that there is bad
faith on the part of the landowner whenever the act was done with
his knowledge and without opposition on his part."
In view of the foregoing, we find no error on the part of the RTC in
requiring petitioner to pay respondent-spouses the value of the
new house minus the cost of the old house based on Article 448
of the Civil Code, subject to succeeding discussions.
Petitioner has two options under Article
448 and pursuant to the ruling in
Tuatis v. Escol. 66
In Tuatis, we ruled that the seller (the owner of the land) has two
options under Article 448: (1) he may appropriate the
improvements for himself after reimbursing the buyer (the builder
in good faith) the necessary and useful expenses under Articles
546 67 and 548 68 of the Civil Code; or (2) he may sell the land to
the buyer, unless its value is considerably more than that of the
improvements, in which case, the buyer shall pay reasonable
rent. 69 Quoted below are the pertinent portions of our ruling in
that case:
Taking into consideration the provisions of the Deed of Sale by
Installment and Article 448 of the Civil Code, Visminda has the
following options:
Under the first option, Visminda may appropriate for herself the
building on the subject property after indemnifying Tuatis for
the necessary and useful expenses the latter incurred for said
building, as provided in Article 546 of the Civil Code.
It is worthy to mention that in Pecson v. Court of Appeals, the
Court pronounced that the amount to be refunded to the
builder under Article 546 of the Civil Code should be the
current market value of the improvement, thus:
xxx xxx xxx
Until Visminda appropriately indemnities Tuatis for the building
constructed by the latter, Tuatis may retain possession of the
building and the subject property.
Under the second option, Visminda may choose not to
appropriate the building and, instead, oblige Tuatis to pay the
present or current fair value of the land. The P10,000.00 price
of the subject property, as stated in the Deed of Sale on Installment
executed in November 1989, shall no longer apply, since Visminda
will be obliging Tuatis to pay for the price of the land in the exercise
of Visminda's rights under Article 448 of the Civil Code, and not
under the said Deed. Tuatis' obligation will then be statutory, and
not contractual, arising only when Visminda has chosen her option
under Article 448 of the Civil Code. TcCDIS
Still under the second option, if the present or current value of
the land, the subject property herein, turns out to be
considerably more than that of the building built thereon,
Tuatis cannot be obliged to pay for the subject property, but
she must pay Visminda reasonable rent for the same.
Visminda and Tuatis must agree on the terms of the lease;
otherwise, the court will fix the terms.
Necessarily, the RTC should conduct additional proceedings
before ordering the execution of the judgment in Civil Case No. S-
618. Initially, the RTC should determine which of the
aforementioned options Visminda will choose. Subsequently, the
RTC should ascertain: (a) under the first option, the amount of
indemnification Visminda must pay Tuatis; or (b) under the second
option, the value of the subject property vis- -vis that of the
building, and depending thereon, the price of, or the reasonable
rent for, the subject property, which Tuatis must pay Visminda.
The Court highlights that the options under Article 448 are
available to Visminda, as the owner of the subject property. There
is no basis for Tuatis' demand that, since the value of the building
she constructed is considerably higher than the subject property,
she may choose between buying the subject property from
Visminda and selling the building to Visminda for P502,073.00.
Again, the choice of options is for Visminda, not Tuatis, to make.
And, depending on Visminda's choice, Tuatis' rights as a builder
under Article 448 are limited to the following: (a) under the first
option, a right to retain the building and subject property until
Visminda pays proper indemnity; and (b) under the second option,
a right not to be obliged to pay for the price of the subject property,
if it is considerably higher than the value of the building, in which
case, she can only be obliged to pay reasonable rent for the same.
The rule that the choice under Article 448 of the Civil
Code belongs to the owner of the land is in accord with the
principle of accession, i.e., that the accessory follows the principal
and not the other way around. Even as the option lies with the
landowner, the grant to him, nevertheless, is preclusive. The
landowner cannot refuse to exercise either option and compel
instead the owner of the building to remove it from the land.
The raison d'etre for this provision has been enunciated thus:
Where the builder, planter or sower has acted in good faith, a
conflict of rights arises between the owners, and it becomes
necessary to protect the owner of the improvements without
causing injustice to the owner of the land. In view of the
impracticability of creating a state of forced co-ownership, the law
has provided a just solution by giving the owner of the land the
option to acquire the improvements after payment of the proper
indemnity, or to oblige the builder or planter to pay for the land and
the sower the proper rent. He cannot refuse to exercise either
option. It is the owner of the land who is authorized to exercise the
option, because his right is older, and because, by the principle of
accession, he is entitled to the ownership of the accessory thing.
Visminda's Motion for Issuance of Writ of Execution cannot be
deemed as an expression of her choice to recover possession of
the subject property under the first option, since the options
under Article 448 of the Civil Code and their respective
consequences were also not clearly presented to her by the
19 April 1999 Decision of the RTC. She must then be given the
opportunity to make a choice between the options available
to her after being duly informed herein of her rights and
obligations under both. 70 (Emphasis supplied.)
In conformity with the foregoing pronouncement, we hold that
petitioner, as landowner, has two options. It may appropriate the
new house by reimbursing respondent Angeles the current market
value thereof minus the cost of the old house. Under this option,
respondent Angeles would have "a right of retention which negates
the obligation to pay rent." 71 In the alternative, petitioner may sell
the lots to respondent Angeles at a price equivalent to the current
fair value thereof. However, if the value of the lots is considerably
more than the value of the improvement, respondent Angeles
cannot be compelled to purchase the lots. She can only be obliged
to pay petitioner reasonable rent.
In view of the foregoing disquisition and in accordance
with Depra v. Dumlao 72 and Technogas Philippines
Manufacturing Corporation v. Court of Appeals, 73 we find it
necessary to remand this case to the court of origin for the purpose
of determining matters necessary for the proper application of
Article 448, in relation to Articles 546 and 548 of the Civil
Code.DHTCaI
WHEREFORE, the petition is hereby PARTIALLY GRANTED.
The assailed Decision dated December 29, 2006 and the Order
dated February 12, 2007 of the Regional Trial Court, Cagayan de
Oro City, Branch 18, in Civil Case No. 2005-158 are
hereby AFFIRMED with MODIFICATION that
petitioner Communities Cagayan, Inc. is hereby ordered
to RETURN the cash surrender value of the payments made by
respondent-spouses on the properties, which is equivalent to 50%
of the total payments made, in accordance with Section 3 (b)
of Republic Act No. 6552, otherwise known as the Maceda Law.
The case is hereby REMANDED to the Regional Trial
Court, Cagayan de Oro City, Branch 18, for further proceedings
consistent with the proper application of Articles 448, 546 and 548
of the Civil Code, as follows:
1. The trial court shall determine:
a) the present or current fair value of the lots;
b) the current market value of the new house;
c) the cost of the old house; and
d) whether the value of the lots is considerably more than the
current market value of the new house minus the cost of the old
house.
2. After said amounts shall have been determined by competent
evidence, the trial court shall render judgment as follows:
a) Petitioner shall be granted a period of 15 days within which to
exercise its option under the law (Article 448, Civil Code), whether
to appropriate the new house by paying to respondent Angeles the
current market value of the new house minus the cost of the old
house, or to oblige respondent Angeles to pay the price of the lots.
The amounts to be respectively paid by the parties, in accordance
with the option thus exercised by written notice to the other party
and to the court, shall be paid by the obligor within 15 days from
such notice of the option by tendering the amount to the trial court
in favor of the party entitled to receive it.
b) If petitioner exercises the option to oblige respondent Angeles
to pay the price of the lots but the latter rejects such purchase
because, as found by the trial court, the value of the lots is
considerably more than the value of the new house minus the cost
of the old house, respondent Angeles shall give written notice of
such rejection to petitioner and to the trial court within 15 days from
notice of petitioner's option to sell the land. In that event, the
parties shall be given a period of 15 days from such notice of
rejection within which to agree upon the terms of the lease, and
give the trial court formal written notice of the agreement and
its provisos. If no agreement is reached by the parties, the trial
court, within 15 days from and after the termination of the said
period fixed for negotiation, shall then fix the period and terms of
the lease, including the monthly rental, which shall be payable
within the first five days of each calendar month. Respondent
Angeles shall not make any further constructions or improvements
on the building. Upon expiration of the period, or upon default by
respondent Angeles in the payment of rentals for two consecutive
months, petitioner shall be entitled to terminate the forced lease,
to recover its land, and to have the new house removed by
respondent Angeles or at the latter's expense.
c) In any event, respondent Angeles shall pay petitioner
reasonable compensation for the occupancy of the property for the
period counted from the time the Decision dated December 29,
2006 became final as to respondent Angeles or 15 days after she
received a copy of the said Decision up to the date petitioner
serves notice of its option to appropriate the encroaching
structures, otherwise up to the actual transfer of ownership to
respondent Angeles or, in case a forced lease has to be imposed,
up to the commencement date of the forced lease referred to in
the preceding paragraph.
d) The periods to be fixed by the trial court in its decision shall be
non-extendible, and upon failure of the party obliged to tender to
the trial court the amount due to the obligee, the party entitled to
such payment shall be entitled to an order of execution for the
enforcement of payment of the amount due and for compliance
with such other acts as may be required by the prestation due the
obligee. ETHSAI
SO ORDERED.
||| (Communities Cagayan, Inc. v. Spouses Nanol, G.R. No.
176791, [November 14, 2012], 698 PHIL 648-669)
REPUBLIC v. RURAL BANK OF KABACAN
SECOND DIVISION
[G.R. No. 185124. January 25, 2012.]
REPUBLIC OF THE PHILIPPINES, represented by the
NATIONAL IRRIGATION ADMINISTRATION
(NIA), petitioner, vs. RURAL BANK OF KABACAN, INC.,
LITTIE SARAH A. AGDEPPA, LEOSA NANETTE AGDEPPA
and MARCELINO VIERNES, MARGARITA TABOADA, PORTIA
CHARISMA RUTH ORTIZ, represented by LINA ERLINDA A.
ORTIZ and MARIO ORTIZ, JUAN MAMAC and GLORIA
MATAS, respondents.
DECISION
SERENO, J p:
Before the Court is a Petition for Review on Certiorari under Rule
45 of the Rules of Court, seeking the reversal of the 12 August
2008 Court of Appeals (CA) Decision and 22 October 2008
Resolution in CA-G.R. CV No. 65196.
The assailed issuances affirmed with modification the 31 August
1999 "Judgment" promulgated by the Regional Trial Court (RTC),
Branch 22, Judicial Region, Kabacan, Cotabato. The RTC had
fixed the just compensation for the value of the land and
improvements thereon that were expropriated by petitioner, but
excluded the value of the excavated soil.
Petitioner Republic of the Philippines is represented in this case
by the National Irrigation Authority (NIA).
The Facts
NIA is a government-owned-and-controlled corporation created
under Republic Act No. (R.A.) 3601 on 22 June 1963. It is primarily
responsible for irrigation development and management in the
country. Its charter was amended by Presidential Decree (P.D.)
552 on 11 September 1974 and P.D. 1702 on 17 July 1980. To
carry out its purpose, NIA was specifically authorized under P.D.
552 to exercise the power of eminent domain. 1
NIA needed some parcels of land for the purpose of constructing
the Malitubog-Marigadao Irrigation Project. On 08 September
1994, it filed with the RTC of Kabacan, Cotabato a Complaint for
the expropriation of a portion of three (3) parcels of land covering
a total of 14,497.91 square meters. 2 The case was docketed as
Special Civil Case No. 61 and was assigned to RTC-Branch 22.
The affected parcels of land were the following: ESTCHa
1) Lot No. 3080 covered by Transfer Certificate of Title (TCT)
No. T-61963 and registered under the Rural Bank of Kabacan
2) Lot No. 455 covered by TCT No. T-74516 and registered
under the names of RG May, Ronald and Rolando, all surnamed
Lao
3) Lot No. 3039 registered under the name of Littie Sarah
Agdeppa 3
On 11 July 1995, NIA filed an Amended Complaint to include
Leosa Nanette A. Agdeppa and Marcelino Viernes as registered
owners of Lot No. 3039. 4
On 25 September 1995, NIA filed a Second Amended Complaint
to allege properly the area sought to be expropriated, the exact
address of the expropriated properties and the owners thereof.
NIA further prayed that it be authorized to take immediate
possession of the properties after depositing with the Philippine
National Bank the amount ofP19,246.58 representing the
provisional value thereof. 5
On 31 October 1995, respondents filed their Answer with
Affirmative and Special Defenses and Counterclaim. 6 They
alleged, inter alia, that NIA had no authority to expropriate
portions of their land, because it was not a sovereign political
entity; that it was not necessary to expropriate their properties,
because there was an abandoned government property adjacent
to theirs, where the project could pass through; that Lot No. 3080
was no longer owned by the Rural Bank of Kabacan; that NIA's
valuation of their expropriated properties was inaccurate
because of the improvements on the land that should have placed
its value at P5 million; and that NIA never negotiated with the
landowners before taking their properties for the project, causing
permanent and irreparable damages to their properties valued at
P250,000. 7
On 11 September 1996, the RTC issued an Order forming a
committee tasked to determine the fair market value of the
expropriated properties to establish the just compensation to be
paid to the owners. The committee was composed of the
Clerk of Court of RTC Branch 22 as chairperson and two (2)
members of the parties to the case. 8
On 20 September 1996, in response to the expropriation
Complaint, respondents-intervenors Margarita Tabaoda, Portia
Charisma Ruth Ortiz, Lina Erlinda Ortiz, Mario Ortiz, Juan Mamac
and Gloria Matas filed their Answer-in-Intervention with Affirmative
and Special Defenses and Counter-Claim. They essentially
adopted the allegations in the Answer of the other respondents
and pointed out that Margarita Tabaoda and Portia Charisma Ruth
Ortiz were the new owners of Lot No. 3080, which the two
acquired from the RuralBank of Kabacan. They further alleged
that the four other respondents-intervenors were joint tenants-
cultivators of Lot Nos. 3080 and 3039. 9 TIEHSA
On 10 October 1996, the lower court issued an Order stating it
would issue a writ of possession in favor of NIA upon the
determination of the fair market value of the properties,
subject of the expropriation proceedings. 10 The lower court later
amended its ruling and, on 21 October 1996, issued a
Writ of Possession in favor of NIA. 11
On 15 October 1996, the committee submitted a Commissioners'
Report 12 to the RTC stating the following observations:
In the process of ocular inspection, the following were jointly
observed:
1) The area that was already occupied is 6x200 meters which is
equivalent to 1,200 square meters;
2) The area which is to be occupied is 18,930 square meters, more
or less;
3) That the area to be occupied is fully planted by gmelina trees
with a spacing of 1x1 meters;
4) That the gmelina tress found in the area already occupied and
used for [the] road is planted with gmelina with spacing of 2x2 and
more or less one (1) year old;
5) That the gmelina trees found in the area to be occupied are
already four (4) years old;
6) That the number of banana clumps (is) two hundred twenty
(220);
7) That the number of coco trees found (is) fifteen (15). 13
The report, however, stated that the committee members could not
agree on the market value of the subject properties and
recommended the appointment of new independent
commissioners to replace the ones coming from the parties
only. 14 On 22 October 1996, the RTC issued an
Order 15 revoking the appointments of Atty. Agdeppa and Engr.
Mabang as members of the committee and, in their stead,
appointed Renato Sambrano, Assistant Provincial Assessor of the
Province of Cotabato; and Jack Tumacmol, Division Chief of the
Land Bank of the Philippines-Kidapawan Branch. 16 DCcHAa
On 25 November 1996, the new committee submitted its
Commissioners' Report to the lower court. The committee had
agreed that the fair market value of the land to be expropriated
should be P65 per square meter based on the zonal
valuation of the Bureau of Internal Revenue (BIR). As regards the
improvement on the properties, the report recommended the
following compensation:
a. P200 for each gmelina tree that are more than four (4) years old
b. P150 for each gmelina tree that are more than one (1) year old
c. P164 for each coco tree
d. P270 for each banana clump 17
On 03 December 1997, the committee submitted to the RTC
another report, which had adopted the first Committee Report, as
well as the former's 25 November 1996 report. However, the
committee added to its computation the value of the earthfill
excavated from portions of Lot Nos. 3039 and 3080. 18 Petitioner
objected to the inclusion ofthe value of the excavated soil in the
computation of the value of the land. 19
The Ruling of the Trial Court
On 31 August 1999, the RTC promulgated its "Judgment," 20 the
dispositive portion of which reads:
WHEREFORE, IN VIEW of all the foregoing considerations, the
court finds and so holds that the commissioners have arrived at
and were able to determine the fair market value ofthe properties.
The court adopts their findings, and orders:
1. That 18,930 square meters of the lands owned by the
defendants is hereby expropriated in favor of the Republic of the
Philippines through the National Irrigation Administration;
2. That the NIA shall pay to the defendants the
amount of P1,230,450 for the 18,930 square meters expropriated
in proportion to the areas so expropriated;
3. That the NIA shall pay to the defendant-intervenors,
owners of Lot No. 3080, the sum of P5,128,375.50, representing
removed earthfill; TACEDI
4. That the NIA shall pay to the defendants, owners of Lot No.
3039, the sum of P1,929,611.30 representing earthfill;
5. To pay to the defendants the sum of P60,000 for the destroyed
G-melina trees (1 year old);
6. To pay to the defendants the sum of P3,786,000.00 for the 4-
year old G-melina trees;
7. That NIA shall pay to the defendants the sum of P2,460.00 for
the coconut trees;
8. That all payments intended for the
defendant Rural Bank of Kabacan shall be given to the
defendants and intervenors who have already acquired ownership
over the land titled in the name of the Bank. 21
NIA, through the Office of the Solicitor General (OSG), appealed
the Decision of the RTC to the CA, which docketed the case as
CA-G.R. CV No. 65196. NIA assailed the trial court's
adoption of the Commissioners' Report, which had determined the
just compensation to be awarded to the owners of the lands
expropriated. NIA also impugned as error the RTC's inclusion for
compensation of the excavated soil from the expropriated
properties. Finally, it disputed the trial court's Order to deliver the
payment intended for the Rural Bank of Kabacan to defendants-
intervenors, who allegedly acquired ownership of the land still
titled in the name of the said rural bank. 22
The Ruling of the Court of Appeals
On 12 August 2008, the CA through its Twenty-First (21st)
Division, promulgated a Decision 23 affirming with modification
the RTC Decision. It ruled that the committee tasked to determine
the fair market value of the properties and improvements for the
purpose of arriving at the just compensation, properly performed
its function. The appellate court noted that the committee
members had conducted ocular inspections of the area
surrounding the expropriated properties and made their
recommendations based on official documents from the BIR with
regard to the zonal valuations of the affected properties. 24 The
CA observed that, as far as the valuation of the improvements on
the properties was concerned, the committee members took into
consideration the provincial assessor's appraisal of the age of the
trees, their productivity and the inputs made. 25 The appellate
court further noted that despite the Manifestation of NIA that it be
allowed to present evidence to rebut the recommendation of the
committee on the valuations of the expropriated properties, NIA
failed to do so. 26
The assailed CA Decision, however, deleted the inclusion of the
value of the soil excavated from the properties in the just
compensation. It ruled that the property owner was entitled to
compensation only for the value of the property at the time of the
taking. 27 In the construction of irrigation projects, excavations
are necessary to build the canals, and the excavated soil cannot
be valued separately from the land expropriated. Thus, it
concluded that NIA, as the new owner of the affected properties,
had the right to enjoy and make use of the property, including the
excavated soil, pursuant to the latter's objectives. 28 CaAcSE
Finally, the CA affirmed the trial court's ruling that recognized
defendants-intervenors Margarita Tabaoda and Portia Charisma
Ruth Ortiz as the new owners of Lot No. 3080 and held that they
were thus entitled to just compensation. The appellate court based
its conclusion on the non-participation by
the Rural Bank of Kabacan in the expropriation proceedings and
the latter's Manifestation that it no longer owned Lot No. 3080. 29
On 11 September 2008, the NIA through the OSG filed a Motion
for Reconsideration of the 12 August 2008 Decision, but that
motion was denied. 30
Aggrieved by the appellate court's Decision, NIA now comes to
this Court via a Petition for Review on Certiorari under Rule 45.
The Issues
The following are the issues proffered by petitioner:
THE COURT OF APPEALS SERIOUSLY ERRED IN AFFIRMING
THE TRIAL COURT'S FINDING OF JUST
COMPENSATION OF THE LAND AND THE IMPROVEMENTS
THEREON BASED ON THE REPORT OF THE
COMMISSIONERS.
THE COURT OF APPEALS ERRED IN RULING THAT THE
PAYMENT OF JUST COMPENSATION FOR LOT NO. 3080
SHOULD BE MADE TO RESPONDENTS MARGARITA
TABOADA AND PORTIA CHARISMA RUTH ORTIZ. 31
The Court's Ruling
On the first issue, the Petition is not meritorious.
In expropriation proceedings, just compensation is defined as the
full and fair equivalent of the property taken from its owner by the
expropriator. The measure is not the taker's gain, but the owner's
loss. The word "just" is used to intensify the meaning of the word
"compensation" and to convey thereby the idea that the equivalent
to be rendered for the property to be taken shall be real,
substantial, full and ample. 32 The constitutional limitation of "just
compensation" is considered to be a sum equivalent to the market
value of the property, broadly defined as the price fixed by the
seller in open market in the usual and ordinary course of legal
action and competition; or the fair value of the property; as
between one who receives and one who desires to sell it, fixed at
the time of the actual taking by the government. 33
In the instant case, we affirm the appellate court's ruling that the
commissioners properly determined the just compensation to be
awarded to the landowners whose properties were expropriated
by petitioner. TEHDIA
The records show that the trial court dutifully followed the
procedure under Rule 67 of the 1997 Rules of Civil
Procedure when it formed a committee that was tasked to
determine the just compensation for the expropriated properties.
The first set of committee members made an ocular
inspection of the properties, subject of the expropriation. They
also determined the exact areas affected, as well as the kinds and
the number of improvements on the properties. 34 When the
members were unable to agree on the valuation of the land and
the improvements thereon, the trial court selected another
batch of disinterested members to carry out the
task of determining the value of the land and the improvements.
The new committee members even made a second ocular
inspection of the expropriated areas. They also obtained data from
the BIR to determine the zonal valuation ofthe expropriated
properties, interviewed the adjacent property owners, and
considered other factors such as distance from the highway and
the nearby town center. 35 Further, the committee members also
considered Provincial Ordinance No. 173, which was promulgated
by the Province of Cotabato on 15 June 1999, and which provide
for the value ofthe properties and the improvements for taxation
purposes. 36
We can readily deduce from these established facts that the
committee members endeavored a rigorous process to determine
the just compensation to be awarded to the owners of the
expropriated properties. We cannot, as petitioner would want us
to, oversimplify the process undertaken by the committee in
arriving at its recommendations, because these were not based on
mere conjectures and unreliable data.
In National Power Corporation v. Diato-Bernal, 37 this Court
emphasized that the "just"-ness of the compensation could only be
attained by using reliable and actual data as bases for fixing the
value of the condemned property. The reliable and actual data we
referred to in that case were the sworn declarations of realtors in
the area, as well as tax declarations and zonal valuation from the
BIR. In disregarding the Committee Report assailed by the
National Power Corporation in the said case, we ruled thus:
It is evident that the above conclusions are highly speculative and
devoid of any actual and reliable basis. First, the market
values of the subject property's neighboring lots were mere
estimates and unsupported by any corroborative documents, such
as sworn declarations of realtors in the area concerned, tax
declarations or zonal valuation from the Bureau of Internal
Revenue for the contiguous residential dwellings and commercial
establishments. The report also failed to elaborate on how and by
how much the community centers and convenience facilities
enhanced the value of respondent's property. Finally, the market
sales data and price listings alluded to in the report were not even
appended thereto.
As correctly invoked by NAPOCOR, a commissioners'
report of land prices which is not based on any documentary
evidence is manifestly hearsay and should be disregarded by the
court. ETAICc
The trial court adopted the flawed findings of the commissioners
hook, line, and sinker. It did not even bother to require the
submission of the alleged "market sales data" and "price listings."
Further, the RTC overlooked the fact that the recommended just
compensation was gauged as of September 10, 1999 or more
than two years after the complaint was filed on January 8, 1997. It
is settled that just compensation is to be ascertained as of the
time of the taking, which usually coincides with the
commencement of the expropriation proceedings. Where the
institution of the action precedes entry into the property, the just
compensation is to be ascertained as of the time of the filing of the
complaint. Clearly, the recommended just compensation in the
commissioners' report is unacceptable. 38
In the instant case, the committee members based their
recommendations on reliable data and, as aptly noted by the
appellate court, considered various factors that affected the
value of the land and the improvements. 39
Petitioner, however, strongly objects to the CA's affirmation of the
trial court's adoption of Provincial Ordinance No. 173. The OSG,
on behalf of petitioner, strongly argues that the
recommendations of the committee formed by the trial court were
inaccurate. The OSG contends that the ordinance reflects the
1999 market values of real properties in the Province of Cotabato,
while the actual taking was made in 1996. 40
We are not persuaded.
We note that petitioner had ample opportunity to rebut the
testimonial, as well as documentary evidence presented by
respondents when the case was still on trial. It failed to do so,
however. The issue raised by petitioner was adequately addresses
by the CA's assailed Decision in this wise:
A thorough scrutiny of the records reveals that the second
set of Commissioners, with Atty. Marasigan still being the
Chairperson and Mr. Zambrano and Mr. Tomacmol as members,
was not arbitrary and capricious in performing the task assigned
to them. We note that these Commissioners were competent and
disinterested persons who were handpicked by the court a
quo due to their expertise in appraising the value of the land and
the improvements thereon in the province of Cotabato. They made
a careful study ofthe area affected by the expropriation,
mindful of the fact that the value of the land and its may be
affected by many factors. The duly appointed Commissioners
made a second ocular inspection of the subject area on 4
September 1997; went to the BIR office in order to get the BIR
zonal valuation of the properties located in Carmen, Cotabato;
interviewed adjacent property owners; and took into consideration
various factors such as the location of the land which is just less
than a kilometer away from the Poblacion and half a kilometer
away from the highway and the fact that it is near a military
reservation. With regard to the improvements, the Commissioners
took into consideration the valuation of the Provincial Assessor,
the age of the trees, and the inputs and their productivity.
Thus, it could not be said that the schedule of market values in
Ordinance No. 173 was the sole basis of the Commissioners in
arriving at their valuation. Said ordinance merely gave credence to
their valuation which is comparable to the current price at that time.
Besides, Mr. Zambrano testified that the date used as bases for
Ordinance No. 173 were taken from 1995 to 1996. 41
Moreover, factual findings of the CA are generally binding on this
Court. The rule admits of exceptions, though, such as when the
factual findings of the appellate court and the trial court are
contradictory, or when the findings are not supported by the
evidence on record. 42 These exceptions, however, are not
present in the instant case. DTIaCS
Thus, in the absence of contrary evidence, we affirm the
findings of the CA, which sustained the trial court's Decision
adopting the committee's recommendations on the just
compensation to be awarded to herein respondents.
We also uphold the CA ruling, which deleted the inclusion of the
value of the excavated soil in the payment for just compensation.
There is no legal basis to separate the value of the excavated soil
from that of the expropriated properties, contrary to what the trial
court did. In the context of expropriation proceedings, the soil has
no value separate from that of the expropriated land. Just
compensation ordinarily refers to the value of the land to
compensate for what the owner actually loses. Such value could
only be that which prevailed at the time of the taking.
In National Power Corporation v. Ibrahim, et al., 43 we held that
rights over lands are indivisible, viz.:
[C]onsequently, the CA's findings which upheld those of the trial
court that respondents owned and possessed the property and
that its substrata was possessed by petitioner since 1978 for the
underground tunnels, cannot be disturbed. Moreover, the Court
sustains the finding of the lower courts that the sub-terrain
portion of the property similarly belongs to respondents. This
conclusion is drawn from Article 437 of the Civil Code which
provides:
ART. 437. The owner of a parcel of land is the owner of its surface
and of everything under it, and he can construct thereon any works
or make any plantations and excavations which he may deem
proper, without detriment to servitudes and subject to special laws
and ordinances. He cannot complain of the reasonable
requirements of aerial navigation.
Thus, the ownership of land extends to the surface as well as to
the subsoil under it.
xxx xxx xxx
Registered landowners may even be ousted of ownership and
possession of their properties in the event the latter are
reclassified as mineral lands because real properties are
characteristically indivisible. For the loss sustained by such
owners, they are entitled to just compensation under the Mining
Laws or in appropriate expropriation proceedings.
Moreover, petitioner's argument that the landowners' right extends
to the sub-soil insofar as necessary for their practical interests
serves only to further weaken its case. The theory would limit the
right to the sub-soil upon the economic utility which such area
offers to the surface owners. Presumably, the landowners' right
extends to such height or depth where it is possible for them to
obtain some benefit or enjoyment, and it is extinguished beyond
such limit as there would be no more interest protected by
law. HEScID
Hence, the CA correctly modified the trial court's Decision when it
ruled thus:
We agree with the OSG that NIA, in the construction of irrigation
projects, must necessarily make excavations in order to build the
canals. Indeed it is preposterous that NIA will be made to pay not
only for the value of the land but also for the soil excavated from
such land when such excavation is a necessary phase in the
building of irrigation projects. That NIA will make use of the
excavated soil is of no moment and is of no concern to the
landowner who has been paid the fair market value of his land. As
pointed out by the OSG, the law does not limit the use of the
expropriated land to the surface area only. Further, NIA, now being
the owner of the expropriated property, has the right to enjoy and
make use of the property in accordance with its mandate and
objectives as provided by law. To sanction the payment of the
excavated soil is to allow the landowners to recover more than the
value of the land at the time when it was taken, which is the true
measure of the damages, or just compensation, and would
discourage the construction ofimportant public improvements. 44
On the second issue, the Petition is meritorious.
The CA affirmed the ruling of the trial court, which had awarded
the payment of just compensation intended for Lot No. 3080
registered in the name of the Rural Bank ofKabacan to the
defendants-intervenors on the basis of the non-
participation of the rural bank in the proceedings and the latter's
subsequent Manifestation that it was no longer the owner of that
lot. The appellate court erred on this matter.
It should be noted that eminent domain cases involve the
expenditure of public funds. 45 In this kind of proceeding, we
require trial courts to be more circumspect in their evaluation of the
just compensation to be awarded to the owner of the expropriated
property. 46 Thus, it was imprudent for the appellate court to rely
on the Rural Bank ofKabacan's mere declaration of non-
ownership and non-participation in the expropriation proceeding to
validate defendants-intervenors' claim of entitlement to that
payment.
The law imposes certain legal requirements in order for a
conveyance of real property to be valid. It should be noted that Lot
No. 3080 is a registered parcel of land covered by TCT No. T-
61963. In order for the reconveyance of real property to be valid,
the conveyance must be embodied in a public document 47 and
registered in the office of the Register of Deeds where the
property is situated. 48
We have scrupulously examined the records of the case and
found no proof of conveyance or
evidence of transfer of ownership of Lot No. 3080 from its
registered owner, the Rural Bank of Kabacan, to defendants-
intervenors. As it is, the TCT is still registered in the name of the
said rural bank. It is not disputed that the bank did not participate
in the expropriation proceedings, and that it manifested that it no
longer owned Lot No. 3080. The trial court should have
nevertheless required the rural bank and the defendants-
intervenors to show proof or evidence pertaining to the
conveyance of the subject lot. The court cannot rely on mere
inference, considering that the payment of just compensation is
intended to be awarded solely owner based on the latter's
proof of ownership. IATSHE
The trial court should have been guided by Rule 67, Section
9 of the 1997 Rules of Court, which provides thus:
SEC. 9. Uncertain ownership; conflicting claims. If the
ownership of the property taken is uncertain, or there are
conflicting claims to any part thereof, the court may order any sum
or sums awarded as compensation for the property to be paid to
the court for the benefit of the person adjudged in the same
proceeding to be entitled thereto. But the judgment shall require
the payment of the sum or sums awarded to either the defendant
or the court before the plaintiff can enter upon the property, or
retain it for the public use or purpose if entry has already been
made.
Hence, the appellate court erred in affirming the trial court's Order
to award payment of just compensation to the defendants-
intervenors. There is doubt as to the real owner of Lot No. 3080.
Despite the fact that the lot was covered by TCT No. T-61963 and
was registered under its name,
the Rural Bank of Kabacan manifested that the owner ofthe lot
was no longer the bank, but the defendants-intervenors; however,
it presented no proof as to the conveyance thereof. In this regard,
we deem it proper to remand this case to the trial court for the
reception of evidence to establish the present owner of Lot No.
3080 who will be entitled to receive the payment of just
compensation.
WHEREFORE, the Petition is PARTLY GRANTED. The 12
August 2008 CA Decision in CA-G.R. CV No. 65196, awarding just
compensation to the defendants as owners of the expropriated
properties and deleting the inclusion of the value of the excavated
soil, is hereby AFFIRMED with MODIFICATION. The case is
hereby REMANDED to the trial court for the reception of evidence
to establish the present owner of Lot No. 3080. No
pronouncements as to cost.
SO ORDERED.
||| (Republic v. Rural Bank of Kabacan, Inc., G.R. No. 185124,
[January 25, 2012], 680 PHIL 247-265)
MANILA ELECTRIC COMPANY v. CITY ASSESSOR
FIRST DIVISION
[G.R. No. 166102. August 5, 2015.]
MANILA ELECTRIC COMPANY, petitioner, vs. THE CITY ASS
ESSOR and CITY TREASURER OF
LUCENA CITY, respondents.
DECISION
LEONARDO-DE CASTRO, J p:
Before the Court is a Petition for Review on Certiorari under Rule
45 of the Rules of Court filed
by Manila Electric Company (MERALCO), seeking the reversal of
the Decision 1dated May 13, 2004 and Resolution 2 dated
November 18, 2004 of the Court of Appeals in CA-G.R. SP No.
67027. The appellate court affirmed the Decision 3 dated May 3,
2001 of the Central Board of Assessment Appeals (CBAA) in
CBAA Case No. L-20-98, which, in turn, affirmed with modification
the Decision 4 dated June 17, 1998 5 of the Local Board of
Assessment Appeals (LBAA) of Lucena City, Quezon Province, as
regards Tax Declaration Nos. 019-6500 and 019-7394, ruling that
MERALCO is liable for real property tax on its
transformers, electric posts (or poles), transmission lines,
insulators, and electric meters, beginning 1992.
MERALCO is a private corporation organized and existing under
Philippine laws to operate as a public utility engaged
in electric distribution. MERALCO has been successively granted
franchises to operate in Lucena City beginning 1922 until present
time, particularly, by: (1) Resolution No. 36 6 dated May 15, 1922
of the Municipal Council of Lucena; (2) Resolution No. 108 7 dated
July 1, 1957 of the Municipal Council of Lucena; (3) Resolution No.
2679 8 dated June 13, 1972 of the Municipal Board of
Lucena City; 9 (4) Certificate of Franchise 10 dated October 28,
1993 issued by the National Electrification Commission; and 019
(5) Republic Act No. 9209 11 approved on June 9, 2003 by - P65,448,800 P3,272,440 P2,356,156 P5,628,596.8
1990-94
Congress. 12 650 .00 .00 .80 0
On February 20, 1989, MERALCO received from 0
the City Assessor of Lucena a copy of Tax Declaration No. 019- 019
6500 13 covering the following electric facilities, classified as - 78,538,560.0
1995 785,385.60 534,062.21 1,319,447.81
capital investment, of the company: (a) transformer 739 0
and electric post; (b) transmission line; (c) insulator; and 4
(d) electric meter, located in Quezon Ave. Ext., Brgy. Gulang-
1996 785,385.60 345,569.66 1,130,955.26
Gulang, Lucena City. Under Tax Declaration No. 019-6500,
these electric facilities had a market value of P81,811,000.00 and 1st-
589,039.20 117,807.84 706,847.04
an assessed value of P65,448,800.00, and were subjected to real 3rd/1997
property tax as of 1985. TIADCc 4th 1997 196,346.40 (19,634.64) 176,711.76
MERALCO appealed Tax Declaration No. 019-6500 before the
LBAA of Lucena City, which was docketed as LBAA-89-2.
MERALCO claimed that its capital investment consisted only of its
substation facilities, the true and correct value of which was only P8,962,558.6
BASIC
P9,454,400.00; and that MERALCO was exempted from payment 7
of real property tax on said substation facilities. SEF 8,962,558.67
The LBAA rendered a Decision 14 in LBAA-89-2 on July 5, 1989,
finding that under its franchise, MERALCO was required to pay
the City Government of Lucena a tax equal to 5% of its gross
earnings, and "[s]aid tax shall be due and payable quarterly and TOTAL TAXP17,925,117.
shall be in lieu of any and all taxes of any kind, nature, or DELINQUENCY 34
description levied, established, or collected . . ., on its poles, wires, ==========
insulators, transformers and structures, installations, conductors, ===
and accessories, . . ., from which taxes the grantee (MERALCO)
is hereby expressly exempted." 15 As regards the issue of The City Treasurer of Lucena requested that MERALCO settle the
whether or not the poles, wires, insulators, transformers, payable amount soon to avoid accumulation of penalties. Attached
and electric meters of MERALCO were real properties, the LBAA to the letter were the following documents: (a) Notice of
cited the 1964 case of Board of Assessment Assessment 20 dated October 20, 1997 issued by
Appeals v. Manila Electric Company 16 (1964 MERALCO the City Assessor of Lucena, pertaining to Tax Declaration No.
case) in which the Court held that: (1) the steel towers fell within 019-7394, which increased the market value and assessed value
the term "poles" expressly exempted from taxes under the of the machinery; (b) Property Record Form; 21 and (c) Tax
franchise of MERALCO; and (2) the steel towers were personal Declaration No. 019-6500. 22
properties under the provisions of the Civil Code and, hence, not MERALCO appealed Tax Declaration Nos. 019-6500 and 019-
subject to real property tax. The LBAA lastly ordered that Tax 7394 before the LBAA of Lucena City on December 23, 1997 and
Declaration No. 019-6500 would remain and the poles, wires, posted a surety bond 23 dated December 10, 1997 to guarantee
insulators, transformers, and electric meters of MERALCO would payment of its real property tax delinquency. MERALCO asked the
be continuously assessed, but the City Assessor would stamp on LBAA to cancel and nullify the Notice of Assessment dated
the said Tax Declaration the word "exempt." The LBAA decreed in October 20, 1997 and declare the properties covered by Tax
the end: Declaration Nos. 019-6500 and 019-7394 exempt from real
WHEREFORE, from the evidence adduced by the parties, the property tax.
Board overrules the claim of the [City Assessor of Lucena] and In its Decision dated June 17, 1998 regarding Tax Declaration
sustain the claim of [MERALCO]. Nos. 019-6500 and 019-7394, the LBAA declared that Sections
Further, the Appellant (Meralco) is hereby ordered to render an 234 and 534 (f) of the Local Government Coderepealed the
accounting to the City Treasurer of Lucena and to pay provisions in the franchise of MERALCO and Presidential Decree
the City Government of Lucena the amount corresponding to the No. 551 24 pertaining to the exemption of MERALCO from
Five (5%) per centum of the gross earnings in compliance with payment of real property tax on its poles, wires, insulators,
paragraph 13 both Resolutions 108 and 2679, respectively, transformers, and meters. The LBAA refused to apply as res
retroactive from November 9, 1957 to date, if said tax has not yet judicata its earlier judgment in LBAA-89-2, as affirmed by the
been paid. 17 CBAA, because it involved collection of taxes from 1985 to 1989,
The City Assessor of Lucena filed an appeal with the CBAA, which while the present case concerned the collection of taxes from 1989
was docketed as CBAA Case No. 248. In its Decision 18 dated to 1997; and LBAA is only an administrative body, not a court or
April 10, 1991, the CBAA affirmed the assailed LBAA judgment. quasi-judicial body. The LBAA though instructed that the
Apparently, the City Assessor of Lucena no longer appealed said computation of the real property tax for the machineries should be
CBAA Decision and it became final and executory. based on the prevailing 1991 Schedule of Market Values, less the
Six years later, on October 16, 1997, MERALCO received a depreciation cost allowed by law. The LBAA ultimately disposed:
letter 19 dated October 16, 1997 from the City Treasurer of WHEREFORE, in view of the foregoing, it is hereby ordered that:
Lucena, which stated that the company was being assessed real 1) MERALCO's appeal be dismissed for lack of merit;
property tax delinquency on its machineries beginning 1990, in the 2) MERALCO be required to pay the realty tax on the questioned
total amount of P17,925,117.34, computed as follows: properties, because they are not exempt by law, same to be based
COVER on the 1991 level of assessment, less depreciation cost allowed
TAX ASSESSED TAX DUE PENALTY TOTAL by law. 25
ED
DE MERALCO went before the CBAA on appeal, which was docketed
VALUE PERIOD as CBAA Case No. L-20-98. The CBAA, in its Decision dated May
C. #
3, 2001, agreed with the LBAA that MERALCO could no longer
claim exemption from real property tax on its machineries with the
enactment of Republic Act No. 7160, otherwise known as
the Local Government Code of 1991, thus: SDAaTC
Indeed, the Central Board of Assessment Appeals has had the
opportunity of ruling in [MERALCO's] favor in connection with this
very same issue. The matter was settled on April 10, 1991 where
this Authority ruled that "wires, insulators, transformers
and electric meters which are mounted on poles and can be
separated from the poles and moved from place to place without
breaking the material or causing [the] deterioration of the object,
are deemed movable or personal property". The same position of
MERALCO would have been tenable and that decision may have
stood firm prior to the enactment of R.A. 7160 but not anymore in
this jurisdiction. The Code provides and now sets a more stringent
yet broadened concept of machinery, . . .:
xxx xxx xxx
The pivotal point where the difference lie between the former and
the current case is that by the very wordings of [Section 199(O)],
the ground being anchored upon by MERALCO concerning the
properties in question being personal in nature does not hold
anymore for the sole reason that these come now within the
purview and new concept of Machineries. The new law has treated
these in an unequivocal manner as machineries in the sense that
they are instruments, mechanical contrivances or apparatus
though not attached permanently to the real properties of
[MERALCO] are actually, directly and exclusively used to meet
their business of distributing electricity.
xxx xxx xxx
Clearly, [Section 234 of the Local Government Code] lists down
the instances of exemption in real property taxation and very
apparent is the fact that the enumeration is exclusive in character
in view of the wordings in the last paragraph. Applying the maxim
"Expressio Unius est Exclusio Alterius", we can say that "Where
the statute enumerates those who can avail of the exemption, it is
construed as excluding all others not mentioned therein".
Therefore, the above-named company [had] lost its previous
exemptions under its franchise because of non-inclusion in the
enumeration in Section 234. Furthermore, all tax exemptions being
enjoyed by all persons, whether natural or juridical, including all
government-owned or controlled corporations are expressly
withdrawn, upon effectivity of R.A. 7160.
In the given facts, it has been manifested that the Municipal Board
of Lucena passed Resolution No. 108 on July 1, 1957 extending
the franchise of MERALCO to operate in
Lucena city an electric light system for thirty-five years, which
should have expired on November 9, 1992 and under Resolution
No. 2679 passed on June 13, 1972 by the CityCouncil of
Lucena City awarding [MERALCO] a franchise to operate for
twenty years an electric light, heat and power system in
Lucena City, also to expire in the year 1992. Under those
franchises, they were only bound to pay franchise taxes and
nothing more.
Now, granting arguendo that there is no express revocation of the
exemption under the franchise of [MERALCO] since,
unquestionably [MERALCO] is a recipient of another franchise
granted this time by the National Electrification Commission as
evidenced by a certificate issued on October 28, 1993, such
conferment does not automatically include and/or award
exemption from taxes, nor does it impliedly give the franchisee the
right to continue the privileges like exemption granted under its
previous franchise. It is just a plain and simple franchise. In
countless times, the Supreme Court has ruled that exemption must
be clear in the language of the law granting such exemption for it
is strictly construed and favored against the person invoking it. In
addition, a franchise though in the form of a contract is also a
privilege that must yield to the sublime yet inherent powers of the
state, one of these is the power of taxation.
Looking into the law creating the National Electrification
Administration (Commission), P.D. 269 as amended by P.D. 1645,
nowhere in those laws can we find such authority to bestow upon
the grantee any tax exemption of whatever nature except those of
cooperatives. This we believe is basically in consonance with the
provisions of the Local Government Code more particularly
Section 234.
Furthermore, Section 534(f) of R.A. 7160 which is taken in relation
to Section 234 thereof states that "All general and special laws,
acts, city charters, decrees, executive orders, proclamations and
administrative regulations or part or parts thereof which are
inconsistent with any of the provisions of this Code are hereby
repealed or modified accordingly". Anent this unambiguous
mandate, P.D. 551 is mandatorily repealed due to its contradictory
and irreconcilable provisions with R.A. 7160. 26
Yet, the CBAA modified the ruling of the LBAA by excluding from
the real property tax deficiency assessment the years 1990 to
1991, considering that:
In the years 1990 and 1991, the exemption granted to MERALCO
under its franchise which incidentally expired upon the effectivity
of the Local Government Code of 1991 was very much in effect
and the decision rendered by the Central Board of Assessment
Appeals (CBAA) classifying its poles, wires, insulators,
transformers and electric meters as personal property was still
controlling as the law of the case. So, from 1990 to 1991, it would
be inappropriate and illegal to make the necessary assessment on
those properties, much more to impose any penalty for non-
payment of such.
But, assessments made beginning 1992 until 1997 by
the City Government of Lucena is legal, both procedurally and
substantially. When R.A. 7160, which incorporated amended
provisions of the Real Property Tax Code, took effect on January
1, 1992, as already discussed, the nature of the aforecited
questioned properties considered formerly as personal
metamorphosed to machineries and the exemption being invoked
by [MERALCO] was automatically withdrawn pursuant to the letter
and spirit of the law. . . . . 27 acEHCD
Resultantly, the decretal portion of said CBAA Decision reads:
WHEREFORE, in view of the foregoing, the Decision appealed
from is hereby modified. The City Assessor of Lucena City is
hereby directed to make a new assessment on the subject
properties to retroact from the year 1992 and the City Treasurer to
collect the tax liabilities in accordance with the provisions of the
cited Section 222 of the Local Government Code. 28
The CBAA denied the Motion for Reconsideration of MERALCO in
a Resolution 29 dated August 16, 2001.
Disgruntled, MERALCO sought recourse from the Court of
Appeals by filing a Petition for Review under Rule 43 of the Rules
of Court, which was docketed as CA-G.R. SP No. 67027.
The Court of Appeals rendered a Decision on May 13, 2004
rejecting all arguments proffered by MERALCO. The appellate
court found no deficiency in the Notice of Assessment issued by
the City Assessor of Lucena:
It was not disputed that [MERALCO] failed to provide the
[City Assessor and City Treasurer of Lucena] with a sworn
statement declaring the true value of each of the subject
transformer and electric post, transmission line, insulator
and electric meter which should have been made the basis of the
fair and current market value of the aforesaid property and which
would enable the assessor to identify the same for assessment
purposes. [MERALCO] merely claims that the assessment made
by the [CityAssessor and City Treasurer of Lucena] was incorrect
but did not even mention in their pleading the true and correct
assessment of the said properties. Absent any sworn statement
given by [MERALCO], [the City Assessor and City Treasurer of
Lucena] were constrained to make an assessment based on the
materials within [their reach]. 30
The Court of Appeals further ruled that there was no more basis
for the real property tax exemption of MERALCO under the Local
Government Code and that the withdrawal of said exemption did
not violate the non-impairment clause of the Constitution, thus:
Although it could not be denied that [MERALCO] was previously
granted a Certificate of Franchise by the National Electrification
Commission on October 28, 1993 . . ., such conferment does not
automatically include an exemption from the payment of realty tax,
nor does it impliedly give the franchisee the right to continue the
privileges granted under its previous franchise considering that
Sec. 534(f) of the Local Government Code of 1991 expressly
repealed those provisions which are inconsistent with the Code.
At the outset, the Supreme Court has held that "Section 193 of the
LGC prescribes the general rule, viz., tax exemptions or incentives
granted to or presently enjoyed by natural or juridical persons are
withdrawn upon the effectivity of the LGC except with respect to
those entities expressly enumerated. In the same vein, We must
hold that the express withdrawal upon effectivity of the LGC of all
exemptions except only as provided therein, can no longer be
invoked by MERALCO to disclaim liability for the local tax."
(City Government of San Pablo, Laguna vs. Reyes, 305 SCRA
353, 362-363)
In fine, [MERALCO's] invocation of the non-impairment clause of
the Constitution is accordingly unavailing. The LGC was enacted
in pursuance of the constitutional policy to ensure autonomy to
local governments and to enable them to attain fullest
development as self-reliant communities. The power to tax is
primarily vested in Congress. However, in our jurisdiction, it may
be exercised by local legislative bodies, no longer merely by virtue
of a valid delegation as before, but pursuant to [a] direct authority
conferred by Section 5, Article X of the Constitution. The important
legal effect of Section 5 is that henceforth, in interpreting statutory
provisions on municipal fiscal powers, doubts will be resolved in
favor of the municipal corporations. (Ibid. pp. 363-365) 31
MERALCO similarly failed to persuade the Court of Appeals that
the transformers, transmission lines, insulators,
and electric meters mounted on the electric posts of MERALCO
were not real properties. The appellate court invoked the definition
of "machinery" under Section 199 (o) of the Local Government
Code and then wrote that:
We firmly believe and so hold that the wires, insulators,
transformers and electric meters mounted on the poles of
[MERALCO] may nevertheless be considered as improvements on
the land, enhancing its utility and rendering it useful in distributing
electricity. The said properties are actually, directly and exclusively
used to meet the needs of [MERALCO] in the distribution of
electricity.
In addition, "improvements on land are commonly taxed as realty
even though for some purposes they might be considered
personalty. It is a familiar personalty phenomenon to see things
classed as real property for purposes of taxation which on general
principle might be considered personal property." (Caltex (Phil.),
Inc. vs. Central Board of Assessment Appeals, 114 SCRA 296,
301-302) 32
Lastly, the Court of Appeals agreed with the CBAA that the new
assessment of the transformers, electric posts, transmission lines,
insulators, and electric meters of MERALCO shall retroact to
1992.
Hence, the Court of Appeals adjudged:
WHEREFORE, premises considered, the assailed Decision
[dated] May 3, 2001 and Resolution dated August 16, 2001 are
hereby AFFIRMED in toto and the present petition is hereby
DENIED DUE COURSE and accordingly DISMISSED for lack
of merit. 33
In a Resolution dated November 18, 2004, the Court of Appeals
denied the Motion for Reconsideration of MERALCO. SDHTEC
MERALCO is presently before the Court via the instant Petition for
Review on Certiorari grounded on the following lone assignment
of error:
THE COURT OF APPEALS COMMITTED A GRAVE
REVERSIBLE ERROR IN AFFIRMING IN TOTO THE DECISION
OF THE CENTRAL BOARD OF ASSESSMENT APPEALS
WHICH HELD THAT THE SUBJECT PROPERTIES ARE REAL
PROPERTIES SUBJECT TO REAL PROPERTY TAX; AND THAT
ASSESSMENT ON THE SUBJECT PROPERTIES SHOULD BE
MADE TO TAKE EFFECT RETROACTIVELY FROM 1992 UNTIL
1997, WITH PENALTIES; THE SAME BEING UNJUST,
WHIMSICAL AND NOT IN ACCORD WITH THE LOCAL
GOVERNMENT CODE. 34
MERALCO argues that its transformers, electric posts,
transmission lines, insulators, and electric meters are not subject
to real property tax, given that: (1) the definition of "machinery"
under Section 199 (o) of the Local Government Code, on which
real property tax is imposed, must still be within the contemplation
of real or immovable property under Article 415 of the Civil
Code because it is axiomatic that a statute should be construed to
harmonize with other laws on the same subject matter as to form
a complete, coherent, and intelligible system; (2) the Decision
dated April 10, 1991 of the CBAA in CBAA Case No. 248, which
affirmed the Decision dated July 5, 1989 of the LBAA in LBAA-89-
2, ruling that the transformers, electric posts, transmission lines,
insulators, and electric meters of MERALCO are movable or
personal properties, is conclusive and binding; and (3)
the electric poles are not exclusively used to meet the needs of
MERALCO alone since these are also being utilized by other
entities such as cable and telephone companies.
MERALCO further asserts that even if it is assumed for the sake
of argument that the transformers, electric posts, transmission
lines, insulators, and electric meters are real properties, the
assessment of said properties by the City Assessor in 1997 is a
patent nullity. The collection letter dated October 16, 1997 of
the City Treasurer of Lucena, Notice of Assessment dated
October 20, 1997 of the City Assessor of Lucena, the Property
Record Form dated October 20, 1997, and Tax Declaration No.
019-6500 simply state a lump sum market value for all the
transformers, electric posts, transmission lines, insulators,
and electric meters covered and did not provide an inventory/list
showing the actual number of said properties, or a schedule of
values presenting the fair market value of each property or type of
property, which would have enabled MERALCO to verify the
correctness and reasonableness of the valuation of its properties.
MERALCO was not furnished at all with a copy of Tax Declaration
No. 019-7394, and while it received a copy of Tax Declaration No.
019-6500, said tax declaration did not contain the requisite
information regarding the date of operation of MERALCO and the
original cost, depreciation, and market value for each property
covered. For the foregoing reasons, the assessment of the
properties of MERALCO in 1997 was arbitrary, whimsical, and
without factual basis in patent violation of the right to due
process of MERALCO. MERALCO additionally explains that it
cannot be expected to make a declaration of its
transformers, electric posts, transmission lines, insulators,
and electric meters, because all the while, it was of the impression
that the said properties were personal properties by virtue of the
Decision dated July 5, 1989 of the LBAA in LBAA-89-2 and the
Decision dated April 10, 1991 of the CBAA in CBAA Case No.
248.
Granting that the assessment of its transformers, electric posts,
transmission lines, insulators, and electric meters by
the City Assessor of Lucena in 1997 is valid, MERALCO
alternatively contends that: (1) under Sections 221 35 and
222 36 of the Local Government Code, the assessment should
take effect only on January 1, 1998 and not retroact to 1992; (2)
MERALCO should not be held liable for penalties and interests
since its nonpayment of real property tax on its properties was in
good faith; and (3) if interest may be legally imposed on
MERALCO, it should only begin to run on the date it received the
Notice of Assessment on October 29, 1997 and not all the way
back to 1992.
At the end of its Petition, MERALCO prays:
WHEREFORE, it is respectfully prayed of this Honorable Court
that the appealed Decision dated May 13, 2004 of the Court of
Appeals, together with its Resolution dated November 18, 2004 be taxes and penalties due, it posted a surety bond in the amount of
reversed and set aside, and judgment be rendered . . . nullifying P17,925,117.34.
and cancel[l]ing the Notice of Assessment, dated October 20, By posting the surety bond, MERALCO may be considered to have
1997, issued by respondent City Assessor, and the collection substantially complied with Section 252 of the Local Government
letter dated October 16, 1997 of respondent City Treasurer. Code for the said bond already guarantees the payment to the
Petitioner also prays for such other relief as may be deemed just Office of the City Treasurer of Lucena of the total amount of real
and equitable in the premises. 37 property taxes and penalties due on Tax Declaration Nos. 019-
The City Assessor and City Treasurer of Lucena counter that: (1) 6500 and 019-7394. This is not the first time that the Court allowed
MERALCO was obliged to pay the real property tax due, instead a surety bond as an alternative to cash payment of the real
of posting a surety bond, while its appeal was pending, because property tax before protest/appeal as required by Section 252
Section 231 of the Local Government Code provides that the of the Local Government Code. In Camp John Hay Development
appeal of an assessment shall not suspend the collection of the Corporation v. Central Board of Assessment Appeals, 39 the
real property taxes; (2) the cases cited by MERALCO can no Court affirmed the ruling of the CBAA and the Court of Tax
longer be applied to the case at bar since they had been decided Appeals en banc applying the "payment under protest"
when Presidential Decree No. 464, otherwise known as the Real requirement in Section 252 of the Local Government Code and
Property Tax Code, was still in effect; (3) under the now prevailing remanding the case to the LBAA for "further proceedings subject
Local Government Code, which expressly repealed the Real to a full and up-to-date payment, either in cash or surety, of
Property Tax Code, the transformers, electric posts, transmission realty tax on the subject properties . . . ."
lines, insulators, and electric meters of MERALCO fall within the Accordingly, the LBAA herein correctly took cognizance of and
new definition of "machineries," deemed as real properties subject gave due course to the appeal of Tax Declaration Nos. 019-6500
to real property tax; and (4) the Notice of Assessment dated and 019-7394 filed by MERALCO.
October 20, 1997 covering the transformers, electric posts, Beginning January 1, 1992,
transmission lines, insulators, and electric meters of MERALCO MERALCO can no longer claim
only retroacts to 1992, which is less than 10 years prior to the date exemption from real property tax of
of initial assessment, so it is in compliance with Section 222 of the its transformers, electric posts,
Local Government Code, and since MERALCO has yet to pay the transmission lines, insulators, and
real property taxes due on said assessment, then it is just right and electric meters based on its
appropriate that it also be held liable to pay for penalties and franchise.
interests from 1992 to present time. Ultimately, MERALCO relies heavily on the Decision dated April 10, 1991 of
the CityAssessor and City Treasurer of Lucena seek judgment the CBAA in CBAA Case No. 248, which affirmed the Decision
denying the instant Petition and ordering MERALCO to pay the dated July 5, 1989 of the LBAA in LBAA-89-2. Said decisions of
real property taxes due. AScHCD the CBAA and the LBAA, in turn, cited Board of Assessment
The Petition is partly meritorious. Appeals v. Manila Electric Co., 40 which was decided by the
The Court finds that the transformers, electric posts, transmission Court way back in 1964 (1964 MERALCO case). The decisions in
lines, insulators, and electric meters of MERALCO are no longer CBAA Case No. 248 and the 1964 MERALCO case recognizing
exempted from real property tax and may qualify as "machinery" the exemption from real property tax of the
subject to real property tax under the Local Government Code. transformers, electric posts, transmission lines, insulators,
Nevertheless, the Court declares null and void the appraisal and and electric meters of MERALCO are no longer applicable
assessment of said properties of MERALCO by because of subsequent developments that changed the factual
the City Assessor in 1997 for failure to comply with the and legal milieu for MERALCO in the present case.
requirements of the Local Government Code and, thus, violating In the 1964 MERALCO case, the City Assessor of
the right of MERALCO to due process. Quezon City considered the steel towers of MERALCO as real
By posting a surety bond before property and required MERALCO to pay real property taxes for the
filing its appeal of the assessment said steel towers for the years 1952 to 1956. MERALCO was
with the LBAA, MERALCO operating pursuant to the franchise granted under Ordinance No.
substantially complied with the 44 dated March 24, 1903 of the Municipal Board of Manila, which
requirement of payment under it acquired from the original grantee, Charles M. Swift. Under its
protest in Section 252 of the Local franchise, MERALCO was expressly granted the following tax
Government Code. exemption privilege:
Section 252 of the Local Government Code mandates that "[n]o Par 9. The grantee shall be liable to pay the same taxes upon its
protest shall be entertained unless the taxpayer first pays the tax." real estate, buildings, plant (not including poles, wires,
It is settled that the requirement of "payment under protest" is a transformers, and insulators), machinery and personal property as
condition sine qua non before an appeal may be other persons are or may be hereafter required by law to pay. . . .
entertained. 38 Section 231 of the same Code also dictates that Said percentage shall be due and payable at the times stated in
"[a]ppeal on assessments of real property . . . shall, in no case, paragraph nineteen of Part One hereof, . . . and shall be in lieu of
suspend the collection of the corresponding realty taxes on the all taxes and assessments of whatsoever nature, and by
property involved as assessed by the provincial or city assessor, whatsoever authority upon the privileges, earnings, income,
without prejudice to subsequent adjustment depending upon the franchise, and poles, wires, transformers, and insulators of the
final outcome of the appeal." Clearly, under the Local Government grantee from which taxes and assessments the grantee is hereby
Code, even when the assessment of the real property is appealed, expressly exempted. . . . . 41
the real property tax due on the basis thereof should be paid to Given the express exemption from taxes and assessments of the
and/or collected by the local government unit concerned. "poles, wires, transformers, and insulators" of MERALCO in the
In the case at bar, the City Treasurer of Lucena, in his letter dated aforequoted paragraph, the sole issue in the 1964 MERALCO
October 16, 1997, sought to collect from MERALCO the amount case was whether or not the steel towers of MERALCO qualified
of P17,925,117.34 as real property taxes on its machineries, plus as "poles" which were exempted from real property tax. The Court
penalties, for the period of 1990 to 1997, based on Tax Declaration ruled in the affirmative, ratiocinating that:
Nos. 019-6500 and 019-7394 issued by the City Assessor of Along the streets, in the City of Manila, may be seen cylindrical
Lucena. MERALCO appealed Tax Declaration Nos. 019-6500 and metal poles, cubical concrete poles, and poles of the PLDT Co.
019-7394 with the LBAA, but instead of paying the real property which are made of two steel bars joined together by an interlacing
metal rod. They are called "poles" notwithstanding the fact that
they are not made of wood. It must be noted from paragraph 9,
above quoted, that the concept of the "poles" for which exemption
is granted, is not determined by their place or location, nor by the
character of the electric current it carries, nor the material or form
of which it is made, but the use to which they are dedicated. In
accordance with the definitions, a pole is not restricted to a long
cylindrical piece of wood or metal, but includes "upright standards
to the top of which something is affixed or by which something is
supported." As heretofore described, respondent's steel supports
consist of a framework of four steel bars or strips which are bound
by steel cross-arms atop of which are cross-arms supporting five
high voltage transmission wires (See Annex A) and their sole
function is to support or carry such wires.
The conclusion of the CTA that the steel supports in question are
embraced in the term "poles" is not a novelty. Several courts of
last resort in the United States have called these steel supports
"steel towers", and they have denominated these supports or
towers, as electric poles. In their decisions the words "towers" and
"poles" were used interchangeably, and it is well understood in that
jurisdiction that a transmission tower or pole means the same
thing.
xxx xxx xxx
It is evident, therefore, that the word "poles", as used in Act No.
484 and incorporated in the petitioner's franchise, should not be
given a restrictive and narrow interpretation, as to defeat the very
object for which the franchise was granted. The poles as
contemplated thereon, should be understood and taken as a part
of the electricpower system of the respondent Meralco, for the
conveyance of electric current from the source thereof to its
consumers. . . . . 42
Similarly, it was clear that under the 20-year franchise granted to
MERALCO by the Municipal Board of Lucena City through
Resolution No. 2679 dated June 13, 1972, the
transformers, electric posts, transmission lines, insulators,
and electric meters of MERALCO were exempt from real property
tax. Paragraph 13 of Resolution No. 2679 is quoted in full
below: caITAC
13. The grantee shall be liable to pay the same taxes upon its real
estate, building, machinery, and personal property (not including
poles, wires, transformers, and insulators) as other persons
are now or may hereafter be required by law to pay. In
consideration of the franchise and rights hereby granted, the
grantee shall pay into the CityTreasury of Lucena a tax equal to
FIVE (5%) PER CENTUM of the gross earnings received
from electric current sold or supplied under this franchise. Said tax
shall be due and payable quarterly and shall be in lieu of any and
all taxes of any kind, nature or description levied, established,
or collected by any authority whatsoever, municipal, provincial, or
national, now or in the future, on its poles, wires, insulators,
switches, transformers and structures, installations,
conductors, and accessories, placed in and over and under all
the private and/or public property, including public streets and
highways, provincial roads, bridges, and public squares, and on its
franchise rights, privileges, receipts, revenues and profits, from
which taxes the grantee is hereby expressly exempted.
(Emphases supplied.)
In CBAA Case No. 248 (and LBAA-89-2),
the City Assessor assessed the transformers, electric posts,
transmission lines, insulators, and electric meters of MERALCO
located in Lucena City beginning 1985 under Tax Declaration No.
019-6500. The CBAA in its Decision dated April 10, 1991 in CBAA
Case No. 248 sustained the exemption of the said properties of
MERALCO from real property tax on the basis of paragraph 13 of
Resolution No. 2679 and the 1964 MERALCO case.
Just when the franchise of MERALCO in Lucena City was about
to expire, the Local Government Code took effect on January 1,
1992, Sections 193 and 234 of which provide:
Section 193. Withdrawal of Tax Exemption Privileges. Unless
otherwise provided in this Code, tax exemptions or incentives
granted to, or presently enjoyed by all persons, whether natural or
juridical, including government-owned or controlled corporations,
except local water districts, cooperatives duly registered
under R.A. No. 6938, non-stock and non-profit hospitals and
educational institutions, are hereby withdrawn upon the effectivity
of this Code.
Section 234. Exemptions from Real Property Tax. The following
are exempted from payment of the real property tax:
(a) Real property owned by the Republic of the Philippines or any
of its political subdivisions except when the beneficial use thereof
has been granted, for consideration or otherwise, to a taxable
person;
(b) Charitable institutions, churches, parsonages or convents
appurtenant thereto, mosques, nonprofit or religious cemeteries
and all lands, buildings, and improvements actually, directly, and
exclusively used for religious, charitable or educational purposes;
(c) All machineries and equipment that are actually, directly and
exclusively used by local water districts and government-owned or
controlled corporations engaged in the supply and distribution of
water and/or generation and transmission of electric power;
(d) All real property owned by duly registered cooperatives as
provided for under R.A. No. 6938; and
(e) Machinery and equipment used for pollution control and
environmental protection.
Except as provided herein, any exemption from payment of real
property tax previously granted to, or presently enjoyed by, all
persons, whether natural or juridical, including all government-
owned or controlled corporations are hereby withdrawn upon the
effectivity of this Code.
The Local Government Code, in addition, contains a general
repealing clause under Section 534 (f) which states that "[a]ll
general and special laws, acts, city charters, decrees, executive
orders, proclamations and administrative regulations, or part or
parts thereof which are inconsistent with any of the provisions of
this Code are hereby repealed or modified accordingly."
Taking into account the above-mentioned provisions, the evident
intent of the Local Government Code is to withdraw/repeal all
exemptions from local taxes, unless otherwise provided by the
Code. The limited and restrictive nature of the tax exemption
privileges under the Local Government Code is consistent with the
State policy to ensure autonomy of local governments and the
objective of the Local Government Code to grant genuine and
meaningful autonomy to enable local government units to attain
their fullest development as self-reliant communities and make
them effective partners in the attainment of national goals. The
obvious intention of the law is to broaden the tax base of local
government units to assure them of substantial sources of
revenue. 43
Section 234 of the Local Government Code particularly identifies
the exemptions from payment of real property tax, based on the
ownership, character, and use of the property, viz.:
(a) Ownership Exemptions. Exemptions from real property taxes
on the basis of ownership are real properties owned by: (i) the
Republic, (ii) a province, (iii) a city, (iv) a municipality, (v)
a barangay, and (vi) registered cooperatives.
(b) Character Exemptions. Exempted from real property taxes on
the basis of their character are: (i) charitable institutions, (ii)
houses and temples of prayer like churches, parsonages or
convents appurtenant thereto, mosques, and (iii) nonprofit or
religious cemeteries.
(c) Usage exemptions. Exempted from real property taxes on the
basis of the actual, direct and exclusive use to which they are
devoted are: (i) all lands, buildings and improvements which are
actually directly and exclusively used for religious, charitable or
educational purposes; (ii) all machineries and equipment actually,
directly and exclusively used by local water districts or by
government-owned or controlled corporations engaged in the
supply and distribution of water and/or generation and collected, an annual ad
transmission of electric power; and (iii) all machinery and valorem tax
equipment used for pollution control and environmental on real property, including
Effectivity: xxx
protection. land,
To help provide a healthy environment in the midst of the buildings, machinery, and
January 1, 1940
modernization of the country, all machinery and equipment for other
pollution control and environmental protection may not be taxed improvements not(f) Machinery, which
by local governments. hereinafter term
2. Other Exemptions Withdrawn. All other exemptions previously shall embrace
specifically exempted.
granted to natural or juridical persons including government- machines,
owned or controlled corporations are withdrawn upon the mechanical
effectivity of the Code. 44 contrivances,
The last paragraph of Section 234 had unequivocally withdrawn, instruments,
upon the effectivity of the Local Government Code, exemptions appliances, and
from payment of real property taxes granted to natural or juridical apparatus attached
persons, including government-owned or controlled corporations, to the real
except as provided in the same section. estate, used for
MERALCO, a private corporation engaged in electric distribution, industrial
and its transformers, electric posts, transmission lines, insulators, agricultural or
and electric meters used commercially do not qualify under any of manufacturing
the ownership, character, and usage exemptions enumerated in purposes, during the
Section 234 of the Local Government Code. It is a basic precept first five
of statutory construction that the express mention of one person, years of the operation
thing, act, or consequence excludes all others as expressed in the of the
familiar maxim expressio unius est exclusio alterius. 45Not being
machinery.
among the recognized exemptions from real property tax in
Section 234 of the Local Government Code, then the exemption of
the transformers, electric posts, transmission lines, insulators,
and electric meters of MERALCO from real property tax granted Section 38. Incidence ofSection 3. Definition
Real Property
under its franchise was among the exemptions withdrawn upon the Real of Terms.
effectivity of the Local Government Code on January 1, 1998. Property Tax. There When used in this
Tax Code
It is worthy to note that the subsequent franchises for operation shall be Code
granted to MERALCO, i.e., under the Certificate of Franchise levied, assessed and
dated October 28, 1993 issued by the National Electrification collected in
Commission and Republic Act No. 9209 enacted on June 9, 2003 all provinces, cities and
Effectivity: xxx
by Congress, are completely silent on the matter of exemption municipalities
from real property tax of MERALCO or any of its properties. an annual ad valorem tax
June 1, 1974
It is settled that tax exemptions must be clear and unequivocal. A on real
taxpayer claiming a tax exemption must point to a specific property, such as land,(m) Machinery
provision of law conferring on the taxpayer, in clear and plain buildings, shall embrace
terms, exemption from a common burden. Any doubt whether a machinery and othermachines,
tax exemption exists is resolved against the improvements mechanical
taxpayer. 46 MERALCO has failed to present herein any express affixed or attached to realcontrivances,
grant of exemption from real property tax of its property instruments,
transformers, electric posts, transmission lines, insulators, not hereinafter specificallyappliances and
and electric meters that is valid and binding even under the Local exempted. apparatus attached
Government Code. cDHAES to the real estate. It
The transformers, electric posts, includes the
transmission lines, insulators, and physical facilities
electric meters of MERALCO may available for
qualify as "machinery" under the production, as well
Local Government Code subject to as the
real property tax. installations and
Through the years, the relevant laws have consistently considered appurtenant
"machinery" as real property subject to real property tax. It is the service facilities,
definition of "machinery" that has been changing and expanding, together with
as the following table will show: all other equipment
Incidence of RealDefinition of designed
Real Property for or essential to
Property Tax Machinery 47
its
Tax Law manufacturing,
industrial or
agricultural
The AssessmentSection 2. Incidence of realSection 3. Property purposes.
Law property exempt
tax. Except in charteredfrom tax. The
Commonwealth Section 38. Incidence ofSection 3. Definition
cities, exemptions
Real Property
there shall be levied, Real of Terms.
Act No. 470) shall be as follows:
assessed, and
 Property Tax. There When used in this apparatus which
Tax Code,
shall be Code may or may not
levied, assessed and be attached,
as amended by
collected in permanently or
Presidential temporarily, to the
all provinces, cities and xxx
Decree real
property. It includes
No. 1383 municipalities an annual ad
the physical
valorem tax on real(m) Machinery facilities for
property, such shall embrace production, the
as land,machines, installations and
Effectivity:
buildings, machinery and equipment, appurtenant
other improvements affixedmechanical service
May 25, 1978
or contrivances, facilities, those
attached to real propertyinstruments, which are
not appliances and mobile, self-
hereinafter specificallyapparatus attached powered or self-
exempted. to the real propelled, and those
estate. It shall include not
the permanently
physical facilities attached to the real
available for property which are
production, as well as actually,
the directly, and
installations and exclusively used to
appurtenant meet the needs of the
service particular
facilities, together industry, business or
with activity and
all those not which by their very
permanently nature and
attached to the real purpose are
estate but designed for, or
are actually, directly necessary to its
and manufacturing,
essentially used to mining, logging,
meet the commercial,
needs of the industrial or
particular agricultural
industry, business,
purposes[.]
or works,
which by their very
nature and MERALCO is a public utility engaged in electric distribution, and
purpose are its transformers, electric posts, transmission lines, insulators,
designed for, or and electric meters constitute the physical facilities through which
essential to MERALCO delivers electricity to its consumers. Each may be
manufacturing, considered as one or more of the following: a
commercial, mining, "machine," 48 "equipment," 49 "contrivance," 50"instrument," 51 "
industrial appliance," 52 "apparatus," 53 or "installation." 54
or agricultural The Court highlights that under Section 199 (o) of the Local
purposes. Government Code, machinery, to be deemed real property subject
Local Section 232. Power to LevySection 199. to real property tax, need no longer be annexed to the land or
Government Real Definitions. building as these "may or may not be attached, permanently or
Property Tax. A provinceWhen used in this temporarily to the real property," and in fact, such machinery may
Code
or city Title: even be "mobile." 55 The same provision though requires that to
be machinery subject to real property tax, the physical facilities for
or a municipality within the
production, installations, and appurtenant service facilities, those
Metropolitan Manila Area which are mobile, self-powered or self-propelled, or not
Effectivity: xxx
may permanently attached to the real property (a) must be actually,
levy an annual ad directly, and exclusively used to meet the needs of the particular
January 1, 1992
valorem tax on industry, business, or activity; and (2) by their very nature and
real property such as land,(o) "Machinery" purpose, are designed for, or necessary for manufacturing, mining,
building, embraces logging, commercial, industrial, or agricultural purposes. Thus,
machinery, and othermachines, Article 290 (o) of the Rules and Regulations Implementing
improvement equipment, the Local Government Code of 1991 recognizes the following
not hereinafter specificallymechanical exemption:
exempted. contrivances, Machinery which are of general purpose use including but not
instruments, limited to office equipment, typewriters, telephone equipment,
appliances or breakable or easily damaged containers (glass or cartons),
microcomputers, facsimile machines, telex machines, cash
dispensers, furnitures and fixtures, freezers, refrigerators, display
cases or racks, fruit juice or beverage automatic dispensing
machines which are not directly and exclusively used to meet the
needs of a particular industry, business or activity shall not be
considered within the definition of machinery under this Rule.
(Emphasis supplied.)
The 1964 MERALCO case was decided when The Assessment
Law was still in effect and Section 3 (f) of said law still required that
the machinery be attached to the real property. Moreover, as the
Court pointed out earlier, the ruling in the 1964 MERALCO case
that the electric poles (including the steel towers) of MERALCO
are not subject to real property tax was primarily based on the
express exemption granted to MERALCO under its previous
franchise. The reference in said case to the Civil Code definition
of real property was only an alternative argument:
Granting for the purpose of argument that the steel supports
or towers in question are not embraced within the term poles,
the logical question posited is whether they constitute real
properties, so that they can be subject to a real property
tax. The tax law does not provide for a definition of real property;
but Article 415 of the Civil Code does, by stating the following
are immovable property: ASEcHI
(1) Land, buildings, roads, and constructions of all kinds adhered
to the soil;
xxx xxx xxx
(3) Everything attached to an immovable in a fixed manner, in such
a way that it cannot be separated therefrom without breaking the
material or deterioration of the object;
xxx xxx xxx
(5) Machinery, receptacles, instruments or implements intended
by the owner of the tenement for an industry or works which may
be carried in a building or on a piece of land, and which tends
directly to meet the needs of the said industry or works;
xxx xxx xxx
The steel towers or supports in question, do not come within the
objects mentioned in paragraph 1, because they do not constitute
buildings or constructions adhered to the soil. They are not
constructions analogous to buildings nor adhering to the soil. As
per description, given by the lower court, they are removable and
merely attached to a square metal frame by means of bolts, which
when unscrewed could easily be dismantled and moved from
place to place. They can not be included under paragraph 3, as
they are not attached to an immovable in a fixed manner, and they
can be separated without breaking the material or causing
deterioration upon the object to which they are attached. Each of
these steel towers or supports consists of steel bars or metal
strips, joined together by means of bolts, which can be
disassembled by unscrewing the bolts and reassembled by
screwing the same. These steel towers or supports do not also fall
under paragraph 5, for they are not machineries or receptacles,
instruments or implements, and even if they were, they are not
intended for industry or works on the land. Petitioner is not
engaged in an industry or works on the land in which the steel
supports or towers are constructed. 56 (Emphases supplied.)
The aforequoted conclusions of the Court in the 1964 MERALCO
case do not hold true anymore under the Local Government Code.
While the Local Government Code still does not provide for a
specific definition of "real property," Sections 199 (o) and 232 of
the said Code, respectively, gives an extensive definition of what
constitutes "machinery" and unequivocally subjects such
machinery to real property tax. The Court reiterates that the
machinery subject to real property tax under the Local
Government Code "may or may not be attached, permanently or
temporarily to the real property;" and the physical facilities for
production, installations, and appurtenant service facilities, those
which are mobile, self-powered or self-propelled, or are not
permanently attached must (a) be actually, directly, and
exclusively used to meet the needs of the particular industry,
business, or activity; and (2) by their very nature and purpose, be
designed for, or necessary for manufacturing, mining, logging,
commercial, industrial, or agricultural purposes.
Article 415, paragraph (1) of the Civil Code declares as
immovables or real properties "[l]and, buildings, roads and
constructions of all kinds adhered to the soil." The land, buildings,
and roads are immovables by nature "which cannot be moved from
place to place," whereas the constructions adhered to the soil are
immovables by incorporation "which are essentially movables, but
are attached to an immovable in such manner as to be an integral
part thereof." 57 Article 415, paragraph (3) of the Civil Code,
referring to "[e]verything attached to an immovable in a fixed
manner, in such a way that it cannot be separated therefrom
without breaking the material or deterioration of the object," are
likewise immovables by incorporation. In contrast, the Local
Government Code considers as real property machinery which
"may or may not be attached, permanently or temporarily to the
real property," and even those which are "mobile."
Article 415, paragraph (5) of the Civil Code considers as
immovables or real properties "[m]achinery, receptacles,
instruments or implements intended by the owner of the tenement
for an industry or works which may be carried on in a building or
on a piece of land, and which tend directly to meet the needs of
the said industry or works." The Civil Code, however, does not
define "machinery."
The properties under Article 415, paragraph (5) of the Civil
Code are immovables by destination, or "those which are
essentially movables, but by the purpose for which they have been
placed in an immovable, partake of the nature of the latter because
of the added utility derived therefrom." 58 These properties,
including machinery, become immobilized if the following
requisites concur: (a) they are placed in the tenement by the owner
of such tenement; (b) they are destined for use in the industry or
work in the tenement; and (c) they tend to directly meet the needs
of said industry or works. 59 The first two requisites are not found
anywhere in the Local Government Code.
MERALCO insists on harmonizing the aforementioned provisions
of the Civil Code and the Local Government Code. The Court
disagrees, however, for this would necessarily mean imposing
additional requirements for classifying machinery as real property
for real property tax purposes not provided for, or even in direct
conflict with, the provisions of the Local Government Code.
As between the Civil Code, a general law governing property and
property relations, and the Local Government Code, a special law
granting local government units the power to impose real property
tax, then the latter shall prevail. As the Court pronounced
in Disomangcop v. The Secretary of the Department of Public
Works and Highways Simeon A. Datumanong: 60 ITAaHc
It is a finely-imbedded principle in statutory construction that a
special provision or law prevails over a general one. Lex specialis
derogant generali. As this Court expressed in the case
of Leveriza v. Intermediate Appellate Court, "another basic
principle of statutory construction mandates that general
legislation must give way to special legislation on the same
subject, and generally be so interpreted as to embrace only cases
in which the special provisions are not applicable, that specific
statute prevails over a general statute and that where two statutes
are of equal theoretical application to a particular case, the one
designed therefor specially should prevail." (Citations omitted.)
The Court also very clearly explicated in Vinzons-Chato v. Fortune
Tobacco Corporation 61 that:
A general law and a special law on the same subject are statutes
in pari materia and should, accordingly, be read together and
harmonized, if possible, with a view to giving effect to both. The
rule is that where there are two acts, one of which is special and
particular and the other general which, if standing alone, would
include the same matter and thus conflict with the special act, the
special law must prevail since it evinces the legislative intent more
clearly than that of a general statute and must not be taken as
intended to affect the more particular and specific provisions of the reproduction cost for so long as the machinery is useful and in
earlier act, unless it is absolutely necessary so to construe it in operation.
order to give its words any meaning at all. It is apparent from these two provisions that every machinery must
The circumstance that the special law is passed before or after the be individually appraised and assessed depending on its
general act does not change the principle. Where the special law acquisition cost, remaining economic life, estimated economic life,
is later, it will be regarded as an exception to, or a qualification of, replacement or reproduction cost, and depreciation. CHTAIc
the prior general act; and where the general act is later, the special Article 304 of the Rules and Regulations Implementing the Local
statute will be construed as remaining an exception to its terms, Government Code of 1991 expressly authorizes the
unless repealed expressly or by necessary implication. (Citations local assessor or his deputy to receive evidence for the proper
omitted.) appraisal and assessment of the real property:
Furthermore, in Caltex (Philippines), Inc. v. Central Board of Article 304. Authority of Local Assessors to Take Evidence. For
Assessment Appeals, 62 the Court acknowledged that "[i]t is a the purpose of obtaining information on which to base the market
familiar phenomenon to see things classed as real property for value of any real property, the assessor of the province, city, or
purposes of taxation which on general principle might be municipality or his deputy may summon the owners of the
considered personal property[.]" properties to be affected or persons having legal interest therein
Therefore, for determining whether machinery is real property and witnesses, administer oaths, and take deposition concerning
subject to real property tax, the definition and requirements the property, its ownership, amount, nature, and value.
under the Local Government Code are controlling. The Local Government Code further mandates that the taxpayer
MERALCO maintains that its electric posts are not machinery be given a notice of the assessment of real property in the
subject to real property tax because said posts are not being following manner:
exclusively used by MERALCO; these are also being utilized by Section 223. Notification of New or Revised Assessment. When
cable and telephone companies. This, however, is a factual issue real property is assessed for the first time or when an existing
which the Court cannot take cognizance of in the Petition at bar as assessment is increased or decreased, the provincial, city or
it is not a trier of facts. Whether or not the electric posts of municipal assessor shall within thirty (30) days give written notice
MERALCO are actually being used by other companies or of such new or revised assessment to the person in whose name
industries is best left to the determination of the City Assessor or the property is declared. The notice may be delivered personally
his deputy, who has been granted the authority to take evidence or by registered mail or through the assistance of the punong
under Article 304 of the Rules and Regulations Implementing barangay to the last known address of the person to served.
the Local Government Code of 1991. A notice of assessment, which stands as the first instance the
Nevertheless, the appraisal and taxpayer is officially made aware of the pending tax liability, should
assessment of the transformers, be sufficiently informative to apprise the taxpayer the legal basis
electric posts, transmission lines, of the tax. 64 In Manila Electric Company v. Barlis, 65 the Court
insulators, and electric meters of described the contents of a valid notice of assessment of real
MERALCO as machinery under Tax property and differentiated the same from a notice of collection:
Declaration Nos. 019-6500 and 019- A notice of assessment as provided for in the Real Property Tax
7394 were not in accordance with the Code should effectively inform the taxpayer of the value of a
Local Government Code and in specific property, or proportion thereof subject to tax, including the
violation of the right to due process discovery, listing, classification, and appraisal of properties. The
of MERALCO and, therefore, null September 3, 1986 and October 31, 1989 notices do not contain
and void. the essential information that a notice of assessment must specify,
The Local Government Code defines "appraisal" as the "act or namely, the value of a specific property or proportion thereof which
process of determining the value of property as of a specific date is being taxed, nor does it state the discovery, listing, classification
for a specific purpose." "Assessment" is "the act or process of and appraisal of the property subject to taxation. In fact, the tenor
determining the value of a property, or proportion thereof subject of the notices bespeaks an intention to collect unpaid taxes, thus
to tax, including the discovery, listing, classification, and appraisal the reminder to the taxpayer that the failure to pay the taxes shall
of the properties[.]" 63 When it comes to machinery, its appraisal authorize the government to auction off the properties subject to
and assessment are particularly governed by Sections 224 and taxes . . . .
225 of the Local Government Code, which read: Although the ruling quoted above was rendered under the Real
Section 224. Appraisal and Assessment of Machinery. (a) The Property Tax Code, the requirement of a notice of assessment has
fair market value of a brand-new machinery shall be the acquisition not changed under the Local Government Code.
cost. In all other cases, the fair market value shall be determined A perusal of the documents received by MERALCO on October
by dividing the remaining economic life of the machinery by its 29, 1997 reveals that none of them constitutes a valid notice of
estimated economic life and multiplied by the replacement or assessment of the transformers, electricposts, transmission lines,
reproduction cost. insulators, and electric meters of MERALCO.
(b) If the machinery is imported, the acquisition cost includes The letter dated October 16, 1997 of the City Treasurer of Lucena
freight, insurance, bank and other charges, brokerage, arrastre (which interestingly precedes the purported Notice of Assessment
and handling, duties and taxes, plus cost of inland transportation, dated October 20, 1997 of the CityAssessor of Lucena) is a notice
handling, and installation charges at the present site. The cost in of collection, ending with the request for MERALCO to settle the
foreign currency of imported machinery shall be converted to peso payable amount soon in order to avoid accumulation of penalties.
cost on the basis of foreign currency exchange rates as fixed by It only presented in table form the tax declarations covering the
the Central Bank. machinery, assessed values in the tax declarations in lump sums
Section 225. Depreciation Allowance for Machinery. For for all the machinery, the periods covered, and the taxes and
purposes of assessment, a depreciation allowance shall be made penalties due again in lump sums for all the machinery.
for machinery at a rate not exceeding five percent (5%) of its The Notice of Assessment dated October 20, 1997 issued by
original cost or its replacement or reproduction cost, as the case the City Assessor gave a summary of the new/revised
may be, for each year of use: Provided, however, That the assessment of the "machinery" located in "Quezon Avenue Ext.,
remaining value for all kinds of machinery shall be fixed at not less Brgy. Gulang-Gulang, Lucena City," covered by Tax Declaration
than twenty percent (20%) of such original, replacement, or No. 019-7394, with total market value of P98,173,200.00 and total
assessed value of P78,538,560.00. The Property Record Form
basically contained the same information. Without specific
description or identification of the machinery covered by said tax
declaration, said Notice of Assessment and Property Record Form
give the false impression that there is only one piece of machinery
covered.
In Tax Declaration No. 019-6500, the City Assessor reported its
findings under "Building and Improvements" and not "Machinery."
Said tax declaration covered "capital investment-commercial,"
specifically: (a) Transformer and Electric Post; (b) Transmission
Line, (c) Insulator, and (d) Electric Meter, with a total market value
of P81,811,000.00, assessment level of 80%, and assessed value
of P65,448,800.00. Conspicuously, the table for "Machinery"
requiring the description, date of operation, replacement cost,
depreciation, and market value of the machinery is totally blank.
MERALCO avers, and the City Assessor and the City Treasurer of
Lucena do not refute at all, that MERALCO has not been furnished
the Owner's Copy of Tax Declaration No. 019-7394, in which the
total market value of the machinery of MERALCO was increased
by P16,632,200.00, compared to that in Tax Declaration No. 019-
6500.
The Court cannot help but attribute the lack of a valid notice of
assessment to the apparent lack of a valid appraisal and
assessment conducted by the City Assessor of Lucena in the first
place. It appears that the City Assessor of Lucena simply lumped
together all the transformers, electric posts, transmission lines,
insulators, and electric meters of MERALCO located in
Lucena City under Tax Declaration Nos. 019-6500 and 019-7394,
contrary to the specificity demanded under Sections 224 and 225
of the Local Government Code for appraisal and assessment of
machinery. The City Assessor and the City Treasurer of Lucena
did not even provide the most basic information such as the
number of transformers, electric posts, insulators,
and electric meters or the length of the transmission lines
appraised and assessed under Tax Declaration Nos. 019-6500
and 019-7394. There is utter lack of factual basis for the
assessment of the transformers, electric posts, transmission lines,
insulators, and electric meters of MERALCO. EATCcI
The Court of Appeals laid the blame on MERALCO for the lack of
information regarding its transformers, electric posts, transmission
lines, insulators, and electric meters for appraisal and assessment
purposes because MERALCO failed to file a sworn declaration of
said properties as required by Section 202 of the Local
Government Code. As MERALCO explained, it cannot be
expected to file such a declaration when all the while it believed
that said properties were personal or movable properties not
subject to real property tax. More importantly, Section 204 of the
Local Government Code exactly covers such a situation, thus:
Section 204. Declaration of Real Property by the Assessor.
When any person, natural or juridical, by whom real property is
required to be declared under Section 202 hereof, refuses or fails
for any reason to make such declaration within the time
prescribed, the provincial, city or municipal assessor shall himself
declare the property in the name of the defaulting owner, if known,
or against an unknown owner, as the case may be, and shall
assess the property for taxation in accordance with the provision
of this Title. No oath shall be required of a declaration thus made
by the provincial, city or municipal assessor.
Note that the only difference between the declarations of property
made by the taxpayer, on one hand, and the
provincial/city/municipal assessor, on the other, is that the former
must be made under oath. After making the declaration of the
property himself for the owner, the
provincial/city/municipal assessor is still required to assess the
property for taxation in accordance with the provisions of the Local
Government Code.
It is true that tax assessments by tax examiners are presumed
correct and made in good faith, with the taxpayer having the
burden of proving otherwise. 66 In this case, MERALCO was able
to overcome the presumption because it has clearly shown that
the assessment of its properties by the City Assessor was
baselessly and arbitrarily done, without regard for the
requirements of the Local Government Code.
The exercise of the power of taxation constitutes a deprivation of
property under the due process clause, and the taxpayer's right to
due process is violated when arbitrary or oppressive methods are
used in assessing and collecting taxes. 67 The Court applies by
analogy its pronouncements in Commissioner of Internal
Revenue v. United Salvage and Towage (Phils.),
Inc., 68 concerning an assessment that did not comply with the
requirements of the National Internal Revenue Code:
On the strength of the foregoing observations, we ought to
reiterate our earlier teachings that "in balancing the scales
between the power of the State to tax and its inherent right to
prosecute perceived transgressors of the law on one side, and the
constitutional rights of a citizen to due process of law and the equal
protection of the laws on the other, the scales must tilt in favor of
the individual, for a citizen's right is amply protected by the Bill of
Rights under the Constitution." Thus, while "taxes are the lifeblood
of the government," the power to tax has its limits, in spite of all its
plenitude. Even as we concede the inevitability and
indispensability of taxation, it is a requirement in all democratic
regimes that it be exercised reasonably and in accordance with
the prescribed procedure. (Citations omitted.)
The appraisal and assessment of the transformers, electric posts,
transmission lines, insulators, and electric meters of MERALCO
under Tax Declaration Nos. 019-6500 and 019-7394, not being in
compliance with the Local Government Code, are attempts at
deprivation of property without due process of law and, therefore,
null and void.
WHEREFORE, premises considered, the Court PARTLY
GRANTS the instant Petition and AFFIRMS with
MODIFICATION the Decision dated May 13, 2004 of the Court of
Appeals in CA-G.R. SP No. 67027, affirming in toto the Decision
dated May 3, 2001 of the Central Board of Assessment Appeals in
CBAA Case No. L-20-98. The Court DECLARESthat the
transformers, electric posts, transmission lines, insulators,
and electric meters of Manila Electric Company are NOT
EXEMPTED from real property tax under the Local Government
Code. However, the Court also DECLARES the appraisal and
assessment of the said properties under Tax Declaration Nos.
019-6500 and 019-7394 as NULL and VOID for not complying
with the requirements of the Local Government Code and violating
the right to due process of Manila Electric Company,
and ORDERS the CANCELLATION of the collection letter dated
October 16, 1997 of the City Treasurer of Lucena and the Notice
of Assessment dated October 20, 1997 of the City Assessor of
Lucena, but WITHOUT PREJUDICE to the conduct of a new
appraisal and assessment of the same properties by
the City Assessor of Lucena in accord with the provisions of the
Local Government Code and guidelines issued by the Bureau of
Local Government Financing.
SO ORDERED.
||| (Manila Electric Co. v. City Assessor, G.R. No. 166102, [August
5, 2015])
CAPITOL WIRELESS INC v. PROVINCIAL TREASURER OF
BATANGAS
THIRD DIVISION
[G.R. No. 180110. May 30, 2016.]
CAPITOL WIRELESS, INC., petitioner, vs. THE PROVINCIAL T
REASURER OF BATANGAS, THE PROVINCIAL ASSESSOR
OF BATANGAS, THE MUNICIPAL TREASURERAND
ASSESSOR OF NASUGBU, BATANGAS, respondents.
DECISION
PERALTA, J p:
Before the Court is a petition for review on certiorari under Rule 45
of the Rules of Court seeking to annul and set aside the Court of
Appeals' Decision 1 dated May 30, 2007 and Resolution 2 dated
October 8, 2007 in CA-G.R. SP No. 82264, which both denied the Statement of True Value of Real Properties are taxable real
appeal of petitioner against the decision of the Regional Trial property, a determination that was contested by Capwire in an
Court. exchange of letters between the company and the public
Below are the facts of the case. respondent. 12 The reason cited by Capwire is that the cable
Petitioner Capitol Wireless, Inc. (Capwire) is a Philippine system lies outside of Philippine territory, i.e., on international
corporation in the business of providing international waters. 13
telecommunications services. 3 As such provider, Capwire has On February 7, 2003 and March 4, 2003, Capwire received a
signed agreements with other local and foreign Warrant of Levy and a Notice of Auction Sale, respectively, from
telecommunications companies covering an international network the respondent Provincial Treasurer of
of submarine cable systems such as the Asia Pacific Cable Batangas (Provincial Treasurer). 14
Network System (APCN) (which connects Australia, Thailand, On March 10, 2003, Capwire filed a Petition for Prohibition and
Malaysia, Singapore, Hong Kong, Taiwan, Korea, Japan, Declaration of Nullity of Warrant of Levy, Notice of Auction Sale
Indonesia and the Philippines); the Brunei-Malaysia-Philippines and/or Auction Sale with the Regional Trial Court (RTC) of
Cable Network System (BMP-CNS), the Philippines-Italy (SEA- Batangas City. 15 CAIHTE
ME-WE-3 CNS), and the Guam Philippines (GP- After the filing of the public respondents' Comment, 16 on May 5,
CNS) systems. 4 The agreements provide for co-ownership and 2003, the RTC issued an Order dismissing the petition for failure
other rights among the parties over the network. 5 of the petitioner Capwire to follow the requisite of payment under
Petitioner Capwire claims that it is co-owner only of the so-called protest as well as failure to appeal to the Local Board of
"Wet Segment" of the APCN, while the landing stations or Assessment Appeals (LBAA), as provided for in Sections 206 and
terminals and Segment E of APCN located in Nasugbu, Batangas 226 of Republic Act (R.A.) No. 7160, or the Local Government
are allegedly owned by the Philippine Long Distance Telephone Code. 17
Corporation (PLDT). 6 Moreover, it alleges that the Wet Segment Capwire filed a Motion for Reconsideration, 18 but the same was
is laid in international, and not Philippine, waters. 7 likewise dismissed by the RTC in an Order 19 dated August 26,
Capwire claims that as co-owner, it does not own any particular 2003. It then filed an appeal to the Court of Appeals. 20
physical part of the cable system but, consistent with its financial On May 30, 2007, the Court of Appeals promulgated its Decision
contributions, it owns the right to use a certain capacity of the said dismissing the appeal filed by Capwire and affirming the order of
system. 8 This property right is allegedly reported in its financial the trial court. The dispositive portion of the CA's decision states:
books as "Indefeasible Rights in Cable Systems." 9 WHEREFORE, premises considered, the assailed Orders dated
However, for loan restructuring purposes, Capwire claims that "it May 5, 2003 and August 26, 2003 of the Regional Trial Court,
was required to register the value of its right," hence, it engaged Branch II of Batangas City, are AFFIRMED.
an appraiser to "assess the market value of the international SO ORDERED. 21
submarine cable system and the cost to Capwire." 10 On May 15, The appellate court held that the trial court correctly dismissed
2000, Capwire submitted a Sworn Statement of True Value of Real Capwire's petition because of the latter's failure to comply with the
Properties at the ProvincialTreasurer's Office, Batangas City, requirements set in Sections 226 and 229 of the Local
Batangas Province, for the Wet Segment of the system, stating: Government Code, that is, by not availing of remedies before
administrative bodies like the LBAA and the Central Board of
System Sound Value
Assessment Appeals (CBAA). 22Although Capwire claims that it
saw no need to undergo administrative proceedings because its
petition raises purely legal questions, the appellate court did not
APCN P203,300,000.00 share this view and noted that the case raises questions of fact,
such as the extent to which parts of the submarine cable system
BMP-CNS P65,662,000.00 lie within the territorial jurisdiction of the taxing authorities, the
public respondents. 23 Further, the CA noted that Capwire failed
SEA-ME-WE-3 CNSP P7,540,000.00 to pay the tax assessed against it under protest, another strict
requirement under Section 252 of the Local Government Code. 24
GP-CNS P1,789,000.00 Hence, the instant petition for review of Capwire.
Petitioner Capwire asserts that recourse to the Local Board of
Assessment Appeals, or payment of the tax under protest, is
Capwire claims that it also reported that the system "interconnects inapplicable to the case at bar since there is no question of fact
at the PLDT Landing Station in Nasugbu, Batangas," which is involved, or that the question involved is not the reasonableness
covered by a transfer certificate of title and tax declarations in the of the amount assessed but, rather, the authority and power of the
name of PLDT. 11 assessor to impose the tax and of the treasurer to collect it. 25 It
As a result, the respondent Provincial Assessor of contends that there is only a pure question of law since the issue
Batangas (Provincial Assessor) issued the following Assessments is whether its submarine cable system, which it claims lies in
of Real Property (ARP) against Capwire: international waters, is taxable. 26 Capwire holds the position that
ARP Cable System Assessed Value the cable system is not subject to tax. 27
Respondents assessors and treasurers of the Province of
Batangas and Municipality of Nasugbu, Batangas disagree with
Capwire and insist that the case presents questions of fact such
019-00967 BMP-CNS P52,529,600.00 as the extent and portion of the submarine cable system that lies
within the jurisdiction of the said local governments, as well as the
019-00968 APCN P162,640,000.00 nature of the so-called indefeasible rights as property of
Capwire. 28 Such questions are allegedly resolvable only before
019-00969 SEA-ME-WE3-CNS P6,032,000.00 administrative agencies like the Local Board of Assessment
Appeals. 29
019-00970 GP-CNS P1,431,200.00 The Court confronts the following issues: Is the case cognizable
by the administrative agencies and covered by the requirements
In essence, the Provincial Assessor had determined that the in Sections 226 and 229 of the Local Government Code which
submarine cable systems described in Capwire's Sworn makes the dismissal of Capwire's petition by the RTC proper? May
submarine communications cables be classified as taxable real
property by the local governments?
The petition is denied. No error attended the ruling of the appellate
court that the case involves factual questions that should have
been resolved before the appropriate administrative bodies.
In disputes involving real property taxation, the general rule is to
require the taxpayer to first avail of administrative remedies and
pay the tax under protest before allowing any resort to a judicial
action, except when the assessment itself is alleged to be illegal
or is made without legal authority. 30 For example, prior resort to
administrative action is required when among the issues raised is
an allegedly erroneous assessment, like when the
reasonableness of the amount is challenged, while direct court
action is permitted when only the legality, power, validity or
authority of the assessment itself is in question. 31 Stated
differently, the general rule of a prerequisite recourse to
administrative remedies applies when questions of fact are raised,
but the exception of direct court action is allowed when purely
questions of law are involved. 32
This Court has previously and rather succinctly discussed the
difference between a question of fact and a question of law.
In Cosmos Bottling Corporation v. Nagrama, Jr., 33it held:
The Court has made numerous dichotomies between questions of
law and fact. A reading of these dichotomies shows that labels
attached to law and fact are descriptive rather than definitive. We
are not alone in Our difficult task of clearly distinguishing questions
of fact from questions of law. The United States Supreme Court
has ruled that: "we [do not] yet know of any other rule or principle
that will unerringly distinguish a factual finding from a legal
conclusion."
In Ramos v. Pepsi-Cola Bottling Co. of the P.I., the Court ruled:
There is a question of law in a given case when the doubt or
difference arises as to what the law is on a certain state of facts;
there is a question of fact when the doubt or difference arises as
to the truth or the falsehood of alleged facts. DETACa
We shall label this the doubt dichotomy.
In Republic v. Sandiganbayan, the Court ruled:
. . . A question of law exists when the doubt or controversy
concerns the correct application of law or jurisprudence to a
certain set of facts; or when the issue does not call for an
examination of the probative value of the evidence presented, the
truth or falsehood of facts being admitted. In contrast, a question
of fact exists when the doubt or difference arises as to the truth or
falsehood of facts or when the query invites calibration of the
whole evidence considering mainly the credibility of the witnesses,
the existence and relevancy of specific surrounding circumstances
as well as their relation to each other and to the whole, and the
probability of the situation.
For the sake of brevity, We shall label this the law application and
calibration dichotomy.
In contrast, the dynamic legal scholarship in the United States has
birthed many commentaries on the question of law and question
of fact dichotomy. As early as 1944, the law was described as
growing downward toward "roots of fact" which grew upward to
meet it. In 1950, the late Professor Louis Jaffe saw fact and law as
a spectrum, with one shade blending imperceptibly into the other.
Others have defined questions of law as those that deal with the
general body of legal principles; questions of fact deal with "all
other phenomena . . . ." Kenneth Culp Davis also weighed in and
noted that the difference between fact and law has been
characterized as that between "ought" questions and "is"
questions. 34
Guided by the quoted pronouncement, the Court sustains the CA's
finding that petitioner's case is one replete with questions of fact
instead of pure questions of law, which renders its filing in a judicial
forum improper because it is instead cognizable by local
administrative bodies like the Board of Assessment Appeals,
which are the proper venues for trying these factual issues. Verily,
what is alleged by Capwire in its petition as "the crux of the
controversy," that is, "whether or not an indefeasible right over a
submarine cable system that lies in international waters can be
subject to real property tax in the Philippines," 35 is not the
genuine issue that the case presents as it is already obvious
and fundamental that real property that lies outside of Philippine
territorial jurisdiction cannot be subjected to its domestic and
sovereign power of real property taxation but, rather, such
factual issues as the extent and status of Capwire's ownership of
the system, the actual length of the cable/s that lie in Philippine
territory, and the corresponding assessment and taxes due on the
same, because the public respondents imposed and collected the
assailed real property tax on the finding that at least a portion or
some portions of the submarine cable system that Capwire owns
or co-owns lies inside Philippine territory. Capwire's disagreement
with such findings of the administrative bodies presents little to no
legal question that only the courts may directly resolve. HEITAD
Instead, Capwire argues and makes claims on mere assumptions
of certain facts as if they have been already admitted or
established, when they have not, since no evidence of such have
yet been presented in the proper agencies and even in the current
petition. As such, it remains unsettled whether Capwire is a mere
co-owner, not full owner, of the subject submarine cable and, if the
former, as to what extent; whether all or certain portions of the
cable are indeed submerged in water; and whether the waters
wherein the cable/s is/are laid are entirely outside of Philippine
territorial or inland waters, i.e., in international waters. More
simply, Capwire argues based on mere legal conclusions,
culminating on its claim of illegality of respondents' acts, but the
conclusions are yet unsupported by facts that should have been
threshed out quasi-judicially before the administrative agencies. It
has been held that "a bare characterization in a petition of
unlawfulness, is merely a legal conclusion and a wish of the
pleader, and such a legal conclusion unsubstantiated by facts
which could give it life, has no standing in any court where issues
must be presented and determined by facts in ordinary and
concise language." 36 Therefore, Capwire's resort to judicial
action, premised on its legal conclusion that its cables (the
equipment being taxed) lie entirely on international waters, without
first administratively substantiating such a factual premise, is
improper and was rightly denied. Its proposition that the cables lie
entirely beyond Philippine territory, and therefore, outside of
Philippine sovereignty, is a fact that is not subject to judicial notice
since, on the contrary, and as will be explained later, it is in fact
certain that portions of the cable would definitely lie within
Philippine waters. Jurisprudence on the Local Government
Code is clear that facts such as these must be threshed out
administratively, as the courts in these types of cases step in at
the first instance only when pure questions of law are involved.
Nonetheless, We proceed to decide on whether submarine wires
or cables used for communications may be taxed like other real
estate.
We hold in the affirmative.
Submarine or undersea communications cables are akin to electric
transmission lines which this Court has recently declared in Manila
Electric Company v. City Assessor and City Treasurer of Lucena
City, 37 as "no longer exempted from real property tax" and may
qualify as "machinery" subject to real property tax under the Local
Government Code. To the extent that the equipment's location is
determinable to be within the taxing authority's jurisdiction, the
Court sees no reason to distinguish between submarine cables
used for communications and aerial or underground wires or lines
used for electric transmission, so that both pieces of property do
not merit a different treatment in the aspect of real property
taxation. Both electric lines and communications cables, in the
strictest sense, are not directly adhered to the soil but pass
through posts, relays or landing stations, but both may be
classified under the term "machinery" as real property under
Article 415 (5) 38 of the Civil Code for the simple reason that such
pieces of equipment serve the owner's business or tend to meet
the needs of his industry or works that are on real estate. Even
objects in or on a body of water may be classified as such, as
"waters" is classified as an immovable under Article 415 (8) 39 of
the Code. A classic example is a boathouse which, by its nature,
is a vessel and, therefore, a personal property but, if it is tied to the
shore and used as a residence, and since it floats on waters which
is immovable, is considered real property. 40 Besides, the Court
has already held that "it is a familiar phenomenon to see things
classed as real property for purposes of taxation which on general
principle might be considered personal property." 41
Thus, absent any showing from Capwire of any express grant of
an exemption for its lines and cables from real property taxation,
then this interpretation applies and Capwire's submarine cable
may be held subject to real property tax.
Having determined that Capwire is liable, and public respondents
have the right to impose a real property tax on its submarine cable,
the issue that is unresolved is how much of such cable is taxable
based on the extent of Capwire's ownership or co-ownership of it
and the length that is laid within respondents' taxing jurisdiction.
The matter, however, requires a factual determination that is best
performed by the Local and Central Boards of Assessment
Appeals, a remedy which the petitioner did not avail of.
At any rate, given the importance of the issue, it is proper to lay
down the other legal bases for the local taxing authorities' power
to tax portions of the submarine cables of petitioner. It is not in
dispute that the submarine cable system's Landing Station in
Nasugbu, Batangas is owned by PLDT and not by Capwire.
Obviously, Capwire is not liable for the real property tax on this
Landing Station. Nonetheless, Capwire admits that it co-owns the
submarine cable system that is subject of the tax assessed and
being collected by public respondents. As the Court takes judicial
notice that Nasugbu is a coastal town and the surrounding sea falls
within what the United Nations Convention on the Law of the
Sea (UNCLOS) would define as the country's territorial sea (to the
extent of 12 nautical miles outward from the nearest baseline,
under Part II, Sections 1 and 2) over which the country has
sovereignty, including the seabed and subsoil, it follows that
indeed a portion of the submarine cable system lies within
Philippine territory and thus falls within the jurisdiction of the said
local taxing authorities. 42 It easily belies Capwire's contention
that the cable system is entirely in international waters. And even
if such portion does not lie in the 12-nautical-mile vicinity of the
territorial sea but further inward, in Prof. Magallona v. Hon. Ermita,
et al. 43 this Court held that "whether referred to as Philippine
'internal waters' under Article I of the Constitution 44 or as
'archipelagic waters' under UNCLOS Part III, Article 49 (1, 2,
4), 45 the Philippines exercises sovereignty over the body of water
lying landward of (its) baselines, including the air space over it and
the submarine areas underneath." Further, under Part VI, Article
79 46 of the UNCLOS, the Philippines clearly has jurisdiction with
respect to cables laid in its territory that are utilized in support of
other installations and structures under its jurisdiction. ATICcS
And as far as local government units are concerned, the areas
described above are to be considered subsumed under the term
"municipal waters" which, under the Local Government Code,
includes "not only streams, lakes, and tidal waters within the
municipality, not being the subject of private ownership and not
comprised within the national parks, public forest, timber lands,
forest reserves or fishery reserves, but also marine waters
included between two lines drawn perpendicularly to the general
coastline from points where the boundary lines of the municipality
or city touch the sea at low tide and a third line parallel with the
general coastline and fifteen (15) kilometers from it." 47Although
the term "municipal waters" appears in the Code in the context of
the grant of quarrying and fisheries privileges for a fee by local
governments, 48 its inclusion in the Code's Book II which covers
local taxation means that it may also apply as guide in determining
the territorial extent of the local authorities' power to levy real
property taxation.
Thus, the jurisdiction or authority over such part of the subject
submarine cable system lying within Philippine jurisdiction
includes the authority to tax the same, for taxation is one of the
three basic and necessary attributes of sovereignty, 49 and such
authority has been delegated by the national legislature to the local
governments with respect to real property taxation. 50
As earlier stated, a way for Capwire to claim that its cable system
is not covered by such authority is by showing a domestic
enactment or even contract, or an international agreement or
treaty exempting the same from real property taxation. It failed to
do so, however, despite the fact that the burden of proving
exemption from local taxation is upon whom the subject real
property is declared. 51 Under the Local Government Code, every
person by or for whom real property is declared, who shall claim
tax exemption for such property from real property taxation "shall
file with the provincial, city or municipal assessor within thirty (30)
days from the date of the declaration of real property sufficient
documentary evidence in support of such claim." 52 Capwire
omitted to do so. And even under Capwire's legislative
franchise, RA 4387, which amended RA 2037, where it may be
derived that there was a grant of real property tax exemption for
properties that are part of its franchise, or directly meet the needs
of its business, 53 such had been expressly withdrawn by
the Local Government Code, which took effect on January 1,
1992, Sections 193 and 234 of which provide: 54
Section 193. Withdrawal of Tax Exemption Privileges. Unless
otherwise provided in this Code, tax exemptions or incentives
granted to, or presently enjoyed by all persons, whether
natural or juridical, including government-owned or
controlled corporations, except local water districts,
cooperatives duly registered under R.A. No. 6938, non-stock
and nonprofit hospitals and educational institutions, are
hereby withdrawn upon the effectivity of this Code.
xxx xxx xxx
Section 234. Exemptions from Real Property Tax. The following
are exempted from payment of the real property tax:
(a) Real property owned by the Republic of the Philippines or any
of its political subdivisions except when the beneficial use thereof
has been granted, for consideration of otherwise, to a taxable
person;
(b) Charitable institutions, churches, parsonages or convents
appurtenant thereto, mosques, nonprofit or religious cemeteries
and all lands, buildings, and improvements actually, directly, and
exclusively used for religious, charitable or educational purposes;
(c) All machineries and equipment that are actually, directly and
exclusively used by local water districts and government-owned or
controlled corporations engaged in the supply and distribution of
water and/or generation and transmission of electric power;
(d) All real property owned by duly registered cooperatives as
provided for under R.A. No. 6938; and
(e) Machinery and equipment used for pollution control and
environmental protection.
Except as provided herein, any exemption from payment of
real property tax previously granted to, or presently enjoyed
by, all persons, whether natural or juridical, including all
government-owned or controlled corporations are hereby
withdrawn upon the effectivity of this Code. 55
Such express withdrawal had been previously held effective upon
exemptions bestowed by legislative franchises granted prior to the
effectivity of the Local Government Code. 56Capwire fails to
allege or provide any other privilege or exemption that were
granted to it by the legislature after the enactment of the Local
Government Code. Therefore, the presumption stays that it enjoys
no such privilege or exemption. Tax exemptions are strictly
construed against the taxpayer because taxes are considered the
lifeblood of the nation. 57
WHEREFORE, the petition is DENIED. The Court of Appeals'
Decision dated May 30, 2007 and Resolution dated October 8,
2007 are AFFIRMED.
SO ORDERED. TIADC
||| (Capitol Wireless, Inc. v. Provincial Treasurer of Batangas, G.R.
No. 180110, [May 30, 2016])