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CALICDAN v.

CENDAÑA As a rule, our jurisdiction in cases brought from the Court of Appeals
is limited to the review and revision of errors of law allegedly
1. The instant controversy involves a 760 square meter parcel of committed by the appellate court. This is because its findings of fact
unregistered land formerly owned by Sixto Calicdan, who died are deemed conclusive and we are not duty-bound to analyze and
intestate weigh all over again the evidence already considered in the
 Survived by his wife, Fermina, and three children, proceedings below.9
namely, petitioner Soledad, Jose and Benigno, all The rule, however, admits of the following exceptions:
surnamed Calicdan. (1) when the findings are grounded on speculation, surmises or
2. Years after his death, Fermina executed a deed of conjectures;
donation inter vivos whereby she conveyed the land to Cendaña (2) when the inference made is manifestly mistaken, absurd or
 Cendaña immediately entered into possession of the impossible;
land, built a fence around the land and constructed a (3) when there is grave abuse of discretion in the appreciation of
two-storey residential house thereon sometime in 1949, facts;
where he resided until his death in 1998. (4) when the factual findings of the trial and appellate courts are
3. Calicdan through her legal guardian Guadalupe Castillo, filed a conflicting;
complaint for "Recovery of Ownership, Possession and (5) when the Court of Appeals, in making its findings, has gone
Damages" against the respondent, alleging that: beyond the issues of the case and such findings are contrary to the
 The donation was void; admissions of both appellant and appellee;
(6) when the judgment of the appellate court is premised on a
 Respondent took advantage of her incompetence in
misapprehension of facts or when it has failed to consider certain
acquiring the land; and that
relevant facts which, if properly taken into account, will justify a
 She merely tolerated respondent’s possession of the
different conclusion;
land as well as the construction of his house thereon.
(7) when the findings of fact are conclusions without citation of
4. Defense: donated and he had been publicly, peacefully,
specific evidence upon which they are based; and
continuously, and adversely in possession of the land for a
(8) when findings of fact of the Court of Appeals are premised on the
period of 45 years.
absence of evidence but are contradicted by the evidence on
 Moreover, he argued that the complaint was barred by record.10
prior judgment in the special proceedings for the In the case at bar, the factual findings of the trial court and the
"Inventory of Properties of Incompetent Soledad Court of Appeals are conflicting; thus, we are constrained to
Calicdan", where the court decreed the exclusion of the review the findings of facts.
land from the inventory of properties of the petitioner.
The trial court found the donation of the land void because Fermina
5. Trial court: in favor of petitioner
was not the owner thereof, considering that it was inherited by Sixto
6. CA: Reversed from his parents. Thus, the land was not part of the conjugal property
of the spouses Sixto and Fermina Calicdan, because under the
Issues: Spanish Civil Code, the law applicable when Sixto died in 1941, the
(1) whether or not the donation inter vivos is valid; and
surviving spouse had a right of usufruct only over the estate of the
(2) whether or not petitioner lost ownership of the land by
deceased spouse. Consequently, respondent, who derived his
prescription.
rights from Fermina, only acquired the right of usufruct as it was the
only right which the latter could convey.
RULING: NO donation BUT acquired ownership by prescription
1. ISSUE OF DONATION
After a review of the evidence on record, we find that the Court of  The records show that the subject land is an
Appeals’ ruling that the donation was valid was not supported by unregistered land. When the petitioner filed the instant
convincing proof. Respondent himself admitted during the cross case on June 29, 1992, respondent was in possession
examination that he had no personal knowledge of whether of the land for 45 years counted from the time of the
Sixto Calicdan in fact purchased the subject land from donation in 1947.
Felomino Bautista.  Such possession was public, adverse and in the
In People v. Guittap, we held that: concept of an owner. Respondent fenced the land and
Under Rule 130, Section 36 of the Rules of Court, a witness can built his house in 1949, with the help of Guadalupe’s
testify only to those facts which he knows of his own personal father as his contractor. His act of cultivating and
knowledge, i.e., which are derived from his own perception; reaping the fruits of the land was manifest and visible to
otherwise, such testimony would be hearsay. all. He declared the land for taxation purposes and
The Court of Appeals thus erred in ruling based on respondent’s religiously paid the realty taxes thereon. Together with
bare hearsay testimony as evidence of the donation made by his actual possession of the land, these tax declarations
Fermina. constitute strong evidence of ownership of the land
2. ISSUE OF PRESCRIPTION occupied by him.
Notwithstanding the invalidity of the donation, we find that Although tax declarations or realty tax payment of property are not
respondent has become the rightful owner of the land by conclusive evidence of ownership, nevertheless, they are good
extraordinary acquisitive prescription. indicia of possession in the concept of owner, for no one in his right
Prescription is another mode of acquiring ownership and other mind would be paying taxes for a property that is not in his actual or
real rights over immovable property. constructive possession. They constitute at least proof that the
 The possession should be in the concept of an owner, holder has a claim of title over the property. The voluntary
public, peaceful, uninterrupted and adverse declaration of a piece of property for taxation purposes manifests
Acquisitive prescription is either ordinary or extraordinary. not only one’s sincere and honest desire to obtain title to the property
a. Ordinary = GF + just title for 10 yrs and announces his adverse claim against the State and all other
b. Extraordinary = uninterrupted adverse possession thereof for interested parties, but also the intention to contribute needed
thirty years without need of title or of good faith. revenues to the Government. Such an act strengthens one’s bona
GF = consists in the reasonable belief that the person from whom fide claim of acquisition of ownership.
he received the thing was the owner thereof, and could transmit his Moreover, the deed of donation inter vivos, albeit void for having
ownership. been executed by one who was not the owner of the property
Just title = when the adverse claimant came into possession of the donated, may still be used to show the exclusive and adverse
property through one of the modes recognized by law for the character of respondent’s possession.
acquisition of ownership or other real rights, but the grantor was not
the owner or could not transmit any right.

Assuming that there is no ordinary acquisitive prescription in this


case as it demands that the possession be "in good faith and with
just title,"16 and there is no evidence on record to prove respondent’s
"good faith", nevertheless, his adverse possession of the land for
more than 45 years aptly shows that he has met the requirements
for extraordinary acquisitive prescription to set in.
RP v. CORTEZ 5. RP appealed to CA
 Although Cortez declared that he and his predecessors-
1. Cortez filed an application for judicial confirmation fo title over a in-interest were in possession of the subject parcel of
parcel of land with the RTC land since time immemorial, no document was ever
 In support of his application, Cortez submitted, inter presented that would establish his predecessors-in-
alia, the following documents: (1) tax declarations for interest’s possession of the same during the period
various years from 1966 until 2005; (2) survey plan of required by law. Contention is a mere claim, which
the property, with the annotation that the property is should not have been given weight by the RTC.
classified as alienable and disposable; (3) technical  No certification from any government agency that the
description of the property, with a certification issued by subject property had already been declared alienable
a geodetic engineer; (4) tax clearance certificate; (5) and disposable.
extrajudicial settlement of estate conveying the subject 6. CA: affirmed
property to Cortez; and (6) escritura de particion  Able to prove land was indeed alienable and
extrajudicial allocating the subject property to Cortez’ disposable, as evidenced by the declaration/notation
mother. from the BFD
2. As there was no opposition, the RTC issued an Order of General  Cortez and his predecessors-in-interest had been in
Default and Cortez was allowed to present his evidence ex- open, continuous, and exclusive possession of the
parte. subject property for more than 30 years: traced from
3. Cortez claimed that: time subject property was declared alienable and
 The land is a portion of Lot 2697 declared for taxation disposable and not way back in 1946, the year when he
purposes in the name of his mother. inherited the same from his mother. At any rate, at the
 He alleged that Lot No. 2697 was inherited by his time the application for registration was filed in 2003,
mother from her parents in 1946; that, on March 21, there was already sufficient compliance with the
1998, after his parents died, he and his siblings requirement of possession.
executed an Extra-Judicial Settlement of Estate over
the properties of their deceased parents and one of the ISSUE: WON RTC erred
properties allocated to him was the subject property.
 He alleged that the subject property had been in the RULING: YES
possession of his family since time immemorial; that the At the outset, the Court notes that the RTC did not cite any specific
subject parcel of land is not part of the reservation of the provision of law under which authority Cortez’ application for
(DENR) and is, in fact, classified as alienable and registration of title to the subject property was granted. In
disposable by the Bureau of Forest Development granting the application for registration, the RTC merely stated that
 Cortez likewise adduced in evidence the testimony of "the possession of the land being applied for by [Cortez] and his
Ernesto Santos, who testified that he has known the predecessor-in-interest have been in open, actual, uninterrupted,
family of Cortez for over sixty (60) years and that Cortez and adverse possession, under claim of title and in the concept of
and his predecessors-in-interest have been in owners, all within the time prescribed by law[.]"11 On the other hand,
possession of the subject property since he came to the CA assumed that Cortez’ application for registration was based
know them. on Section 14(2) of P.D. No. 1529. Nevertheless, Cortez, in the
4. RTC: granted (open, actual, uninterrupted, and adverse application for registration he filed with the RTC, proffered that
possession, under claim of title and in the concept of owners) should the subject property not be registrable under Section
14(2) of P.D. No. 1529, it could still be registered under Section nothing to do whatsoever with the nature and character of
48(b) of the Public Land Act the property surveyed. Respondents failed to submit a
Under P.D. 1529, applicants for registration of title must sufficiently certification from the proper government agency to prove
establish: that the lands subject for registration are indeed alienable
1. The subject land forms part of the disposable and alienable and disposable.
lands of the public domain; The applicant bears the burden of proving the status of the land. In
2. That the applicant and his predecessors-in-interest have been this connection, the Court has held that he must present a certificate
in open, continuous, exclusive, and notorious possession and of land classification status issued by the Community Environment
occupation of the same; and Natural Resources Office (CENRO) or the Provincial
3. That it is under a bona fide claim of ownership since June 12, Environment and Natural Resources Office (PENRO) of the DENR.
1945, or earlier. He must also prove that the DENR Secretary had approved the land
FIRST REQUIREMENT = NOT SATISFIED classification and released the land as alienable and disposable,
The first requirement was not satisfied in this case. To prove that the and that it is within the approved area per verification through survey
subject property forms part of the alienable and disposable lands of by the CENRO or PENRO. Further, the applicant must present a
the public domain, Cortez adduced in evidence a survey plan copy of the original classification approved by the DENR Secretary
prepared by Geodetic Engineer Oscar B. Fernandez and certified by and certified as true copy by the legal custodian of the official
the Lands Management Bureau of the DENR. records. These facts must be established by the applicant to prove
The reliance on the foregoing annotation in the survey plan is amiss; that the land is alienable and disposable.
it does not constitute incontrovertible evidence to overcome the Here, Roche did not present evidence that the land she applied
presumption that the subject property remains part of the inalienable for has been classified as alienable or disposable land of the
public domain. The applicant must at the very least submit a public domain. She submitted only the survey map and
certification from the proper government agency stating that the technical description of the land which bears no information
parcel of land subject of the application for registration is indeed regarding the land’s classification. She did not bother to
alienable and disposable. establish the status of the land by any certification from the
In the present case, the only evidence to prove the character of appropriate government agency.
the subject lands as required by law is the notation appearing
in the Advance Plan stating in effect that the said properties are SECOND AND THIRD REQUIREMENTS = NONE
alienable and disposable. Cortez failed to present any evidence to prove that he and his
 An applicant must establish the existence of a positive act predecessors-in-interest have been in open, continuous, exclusive,
of the government such as a presidential proclamation or an and notorious possession and occupation of the subject property
executive order, an administrative action, investigation since June 12, 1945, or earlier.
reports of Bureau of Lands investigators, and a legislative  Cortez was only able to present oral and documentary
act or statute. evidence of his and his mother’s ownership and possession
 The applicant may also secure a certification from the of the subject property since 1946, the year in which his
Government that the lands applied for are alienable and mother supposedly inherited the same.
disposable.  Bare claim + NO other evidence = It is a rule that general statements
 In the case at bar, while the Advance Plan bearing the that are mere conclusions of law and not factual proof of possession
notation was certified by the Lands Management Services are unavailing and cannot suffice.
of the DENR, the certification refers only to the technical  Further, the earliest tax declaration presented by Cortez was only in
correctness of the survey plotted in the said plan and has 1966. Cortez failed to explain why, despite his claim that he and his
predecessors-in-interest have been in possession of the subject of national wealth before it can be acquired by prescription; that a
property since time immemorial, it was only in 1966 that his mere declaration by government officials that a land of the public
predecessors-in-interest started to declare the same for purposes of domain is already alienable and disposable would not suffice for
taxation. purposes of registration under Section 14(2) of P.D. No. 1529.
 That Cortez and his predecessors-in-interest have been in
possession of the subject property for 57 years at the time he filed Accordingly, although lands of the public domain that are
his application for registration in 2003 would likewise not entitle him considered patrimonial may be acquired by prescription under
to registration. Section 14(2) of P.D. No. 1529, before acquisitive prescription
could commence, the property sought to be registered must
"As Section 14(2) [of P.D. No. 1529] categorically provides, only not only be classified as alienable and disposable; it must also
private properties may be acquired thru prescription and under be declared by the State that it is no longer intended for public
Articles 420 and 421 of the Civil Code, only those properties, use, public service or the development of the national wealth.
which are not for public use, public service or intended for the
development of national wealth, are considered private."20 The Court finds no evidence of any official declaration from the state
In Heirs of Mario Malabanan v. Republic,21 the Court however attesting to the patrimonial character of the subject property. Cortez
clarified that lands of the public domain that are patrimonial in failed to prove that acquisitive prescription has begun to run against
character are susceptible to acquisitive prescription and, the State, much less that he has acquired title to the subject property
accordingly, eligible for registration under Section 14(2) of P.D. No. by virtue thereof.
1529, viz:
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 property 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:

1. 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.

The Court nevertheless emphasized that there must be an official


declaration by the State that the public dominion property is no
longer intended for public use, public service, or for the development
RP v. CHING  Accordingly, the State presumably owns all lands not
otherwise appearing to be clearly within private ownership.
1. Ching filed a verified Application for Registration of Title To overcome such presumption, irrefutable evidence must
covering a parcel of land with improvements be shown by the applicant that the land subject of
 The subject lot is a consolidation of three (3) contiguous registration has been declassified and now belongs to the
lots alienable and disposable portion of the public domain.
 In support of his application, respondent attached the
(a) Sketch plan;3 (b) Technical description;4 (c) Tracing The sketch plan, technical description and the tracing clothing
Cloth of Plan duly approved by the Bureau of Land plan that respondent presented do not show the actual legal
DENR Region XIII on July 08, 1998 covering the subject status of the land.
land It is clear that there was no substantive evidence to show that he
 Respondent alleged that he purchased the subject land complied with the requirement of possession and occupation since
from the late former governor and Congressman Plaza June 12, 1945 or earlier.
as evidenced by a Deed of Sale of Unregistered Lands  Tax declarations
2. RP opposed: no OCEAN possession + public land First lot = began only in 1948
3. RTC: dismissed; not the owner Second = 1952
4. CA: reversed; possession for more than 30 yrs need no proof Third = 1948
that prop is alienable and disposable land of public domain Unmistakably, the respondent cannot avail of registration
under Section 14(1) of P.D. 1529.
ISSUE: WoN possession for more than 30 yrs need no proof that
prop is alienable and disposable land of public domain Ching: Should not the land be registrable under Section 14(1) of
P.D. 1529, it could still be registered under Section 14(2) of P.D.
Based on these legal parameters, applicants for registration of title 1529.
under Section 14(1) must sufficiently establish: SC: He cannot.
(1) that the subject land forms part of the disposable and alienable (2) In complying with Section 14(2) of the Property Registration
lands of the public domain; Decree, consider that under the Civil Code, prescription is
(2) that the applicant and his predecessors-in-interest have been in recognized as a mode of acquiring ownership of patrimonial
open, continuous, exclusive and notorious possession and property. However, public domain lands become only
occupation of the same; and patrimonial property not only with a declaration that these are
(3) that it is under a bona fide claim of ownership since June 12, alienable or disposable. There must also be an express
1945, or earlier. government manifestation that the property is already
Thus, before an applicant can adduce evidence of open, patrimonial or no longer retained for public service or the
continuous, exclusive and notorious possession and development of national wealth, under Article 422 of the Civil
occupation of the property in question, he must first prove that Code.36 And only when the property has become patrimonial can
the land belongs to the alienable and disposable lands of the the prescriptive period for the acquisition of property of the public
public domain. It is doctrinal that, under the Regalian doctrine, all dominion begin to run.
lands of the public domain pertain to the State and the latter is the (a) Patrimonial property is private property of the government. The
foundation of any asserted right to ownership in land. 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.
HEIRS OF RESTAR v HEIRS OF CICHON  Adolfo: no COA
 Policarpio: Flores was owner but a portion was sold to
1. Emilio Restar (Restar) died intestate, leaving eight (8) children- him
compulsory heirs 6. RTC: dismissed
2. Restar’s eldest child, Flores, on the basis of a Joint Affidavit he  Flores’ share in Restar’s estate was not the lot
executed with one Helen Restar, caused the cancellation of Tax nevertheless, they had acquired the lot by prescription.
Declaration in Restar’s name covering a 5,9183 square meter  Policarpio’s claim: NOT true; signature of Flores in the
parcel of land which was among the properties left by Restar, DoS different in other documents
and the issuance of Tax Declaration in his name. 7. CA: reversed
3. Years after Flores died, the co-heirs of Flores discovered the  Heirs of Flores failed to prove that their possession of
cancellation of Restar’s Tax Declaration and the issuance in lieu the lot excluded their co-owners or that they derived title
thereof of Tax Declaration in the name of Flores. to it from a separate conveyance to them by Restar.
4. The heirs of Flores’ sisters who had in the meantime died,  There was no adequate notice by Flores to his other co-
together with Flores’ surviving sisters filed a Complaint against heirs/co-owners of the repudiation of the co-ownership
Flores’ heirs for "partition, declaration of nullity of and neither was there a categorical assertion by the
documents, ownership with damages and preliminary defendants of their exclusive right to the entire lot that
injunction" before the RTC. barred the plaintiffs’ claim of ownership
 Flores’ brothers were impleaded also as defendants, they  Plaintiffs failed to immediately take legal action to
being unwilling co-plaintiffs protect their rights on account of forbearance towards
 Alleged that, inter alia, during the lifetime of Flores, they their eldest brother who had asked them to continue
were given their shares of palay from the lot and even after cultivating the lot to support his children’s education
Flores death up to 1991; after Flores’ death in 1989, his
widow Esmenia appealed to them to allow her to hold on to ISSUE: WON there was acquisitive prescription on the land in
the lot to finance the education of her children, to which they question
(the plaintiffs) agreed on the condition that after the children
had finished their education, it would be divided into eight RULING: YES
(8) equal parts; and upon their demand for partition of the While the action to demand partition of a co-owned property
lot, the defendants Heirs of Flores refused, they claiming does not prescribe, a co-owner may acquire ownership thereof
that they were the lawful owners thereof as they had by prescription where there exists a clear repudiation of the co-
inherited it from Flores. ownership, and the co-owners are apprised of the claim of
5. Defenses: adverse and exclusive ownership
 They had been in possession of the lot in the concept of Acquisitive prescription of dominion and other real rights may be
owner for more than 30 years and have been paying ordinary or extraordinary. Ordinary acquisitive prescription requires
realty taxes since time immemorial. possession of things in good faith and with just title for a period of
 Denied the statements of the Respondents ten years. Without good faith and just title, acquisitive prescription
 Further claimed that Flores caused the transfer of can only be extraordinary in character which requires uninterrupted
parcels of ricelands to his siblings as their shares from adverse possession for thirty years.
the estate of their father Restar and an extra-judicial Resolving the main issue of whether petitioners acquired ownership
partition was subsequently executed by Restar’s heirs, over the lot by extraordinary prescription, the appellate court held in
which was notarized the negative.
While this Court is not a trier of facts, if the inference drawn by the From the foregoing evidence, it can be seen that the adverse
appellate court from the facts is manifestly mistaken, it may, in the possession of Flores started in 1960, the time when the tax
interest of justice, review the evidence in order to arrive at the correct declaration was transferred in his name. The period of acquisitive
factual conclusions based on the record.23 prescription started to run from this date. Hence, the adverse
Contrary to the findings of the appellate court, the records of possession of Flores Restar from 1960 vested in him exclusive
the case amply support petitioners’ claim that the requirements ownership of the land considering the lapse of more than 38 years.
for extraordinary prescription had been duly met. Acquisitive prescription of ownership, laches and prescription of the
When Restar died in 1935, his eight children became pro action for partition should be considered in favor of Flores Restar
indiviso co-owners of the lot by intestate succession. and his heirs.
 He never possessed the lot, however, much less asserted While tax declarations and receipts are not conclusive evidence of
their claim thereto until 1999 when they filed the complaint ownership and do not prove title to the land, nevertheless, when
for partition subject of the present petition. coupled with actual possession, they constitute evidence of great
 In contrast, Flores took possession of the lot after Restar’s weightand can be the basis of a claim of ownership through
death and exercised acts of dominion thereon – tilling and prescription.
cultivating the land, introducing improvements, and enjoying
the produce thereof. Indeed, the following acts of Flores show possession adverse to his
The statutory period of prescription, however, commenced not co-heirs: the cancellation of the tax declaration certificate in the
in 1935 but in 1960 when Flores, who had neither title nor good name of Restar and securing another in his name; the execution of
faith, secured a tax declaration in his name and may, therefore, a Joint Affidavit stating that he is the owner and possessor thereof
be said to have adversely claimed ownership of the lot. And to the exclusion of respondents; payment of real estate tax and
respondents were also deemed to have been on said date irrigation fees without respondents having ever contributed any
become aware of the adverse claim. share therein; and continued enjoyment of the property and its
As far back as 1959, Flores Restar adjudicated unto himself the produce to the exclusion of respondents. And Flores’ adverse
whole land in question as his share from his father by means of a possession was continued by his heirs.
joint affidavit, which was the basis of the transfer of Tax Declaration The appellate court’s crediting of respondents’ justification for failing
No. 6686 from Emilio Restar to Flores Restar. So that from 1960 the to immediately take legal action to protect their rights — forbearance
land was declared in the name of Flores Restar. This was the first toward Flores and/or his wife who asked to be allowed to cultivate
concrete act of repudiation made by Flores of the co-ownership the land to support their children’s education — does not impress.
Plaintiffs did not deny that they had partition of other lands owned For assuming such justification to be true, why did not any of
by Emilio. If they were able to demand the partition, why then did respondents assail Flores’ continuous possession after his children
they not demand the inclusion of the land in question in order to completed their college education in 1977?
settle once and for all the inheritance from their father Emilio Restar,
considering that at that time all of the brothers and sisters, the eight
heirs of Emilio Restar, were still alive and participated in the signing
of the extra-judicial partition?
Also it was admitted that Flores died only in 1989. Plaintiffs had all
the chancesto file a case against him for a period of 29 years when
he was still alive, yet they failed to do so. They filed the instant case
almost ten (10) years after Flores’ death.
VDA. DE GUALBERTO v. GO If such title is to be challenged, it may not be done collaterally, as in
the present case, because the judicial action required is a direct
1. Generoso Gualberto is the former registered owner of a parcel attack. Section 48 of the Property Registration Decree expressly
of land. provides that a certificate of title cannot be subject to collateral
2. Sometime in 1965, the subject parcel of land was sold by attack and can be altered, modified or cancelled only in a direct
Gualberto and his wife, Consuelo to respondents’ father Go proceeding in accordance with law. This was the same rule under
Kiang Act 496.
3. However, in a case for Unlawful Detainer filed by Demetria The next two (2) remaining issues boil down to whether or not a
Garcia against herein petitioners, the latter alleged that therein registered owner’s right to assail the validity of his defendant’s title
plaintiff Garcia "is not a real party in interest and therefore has and to thereafter seek reconveyance thereof, may be lost by
no legal capacity and cause of action to sue the defendants; that prescription or laches. Being interrelated, these will be addressed
the real parties in interest are Generoso Gualberto and Go S. jointly.
Kiang Just as an implied or constructive trust in (sic) an offspring of the law
4. In a Forcible Entry case filed by respondents against petitioners (Art. 1465, Civil Code), so is the corresponding obligation to
MCTC: in favor of respondents reconvey the property and the title thereto in favor of the true owner.
RTC: affirmed In this context, and vis-à-vis prescription, Article 1144 of the Civil
CA: affirmed Code is applicable.
5. In the meantime an OCT was issued in the name of respondent ‘Article 1144. The following actions must be brought within ten years
Rosa Javier Go, wife of Go S. Kiang. from the time the right of action accrues:
6. Petitioners filed against respondents their complaint in this case 1) Upon a written contract;
for Conveyance, Accion Publiciana, and Quieting of Title with 2) Upon an obligation created by law;
Damages 3) Upon a judgment;
7. RTC: dismissed ‘An action for reconveyance based on an implied or constructive
8. CA: affirmed trust prescribes in ten years from the issuance of the Torrens title
over the property. The only discordant note, it seems, is Balbin v.
ISSUES: Medalla, which states that the prescriptive period for a
1. WoN a titled property can be the subject of a free patent title reconveyance action is four years. However, this variance can be
2. WoN the right of a registered owner to demand the return of explained by the erroneous reliance on Gerona v. de Guzman. But
his property can be lost by prescription or laches in Gerona, the fraud was discovered on June 25, 1948, hence
3. WoN an action for reconveyance of property based on a Section 43(3) of Act No. 190 was applied, the New Civil Code not
nullity of title prescribes coming into effect until August 30, 1950 as mentioned earlier.
"An action for reconveyance has its basis in Section 53, paragraph
HELD: 3 of Presidential Decree No. 1529, which provides:
FIRST ISSUE ‘In all cases of registration procured by fraud, the owner may pursue
The first issue raised by petitioners attacks the validity of respondent all his legal and equitable remedies against the parties to such fraud
Rosa Javier Go’s free patent title. This cannot be done in the present without prejudice, however, to the rights of any innocent holder of
recourse for two (2) basic reasons: first, the validity of a torrens title the decree of registration on the original petition or application, x x
cannot be assailed collaterally; and second, the issue is being x.’
raised for the first time before this Court. "This provision should be read in conjunction with Article 1456 of the
Civil Code, which provides:
‘Article 1456. If property is acquired through mistake or fraud, the
person obtaining it is, by force of law, considered a trustee of an
implied trust for the benefit of the person from whom the property
comes.’
"The law thereby creates the obligation of the trustee to reconvey
the property and the title thereto in favor of the true owner.
Correlating Section 53, paragraph 3 of Presidential Decree No. 1529
and Article 1456 of the Civil Code with Article 1144 (2) of the Civil
Code, supra, the prescriptive period for the reconveyance of
fraudulently registered real property is ten (10) years reckoned
from the date of the issuance of the certificate of title.
In the present case, therefore, inasmuch as Civil Case No. 10235
was filed on June 4, 1975, it was well-within the prescriptive period
of ten (10) years from the date of the issuance of "Original Certificate
of Title No. 0-6836 on September 17, 1970."

Petitioners insist that their action for reconveyance is


imprescriptible.
We do not agree.
Plaintiff is in ACTUAL, CONTINUOUS AND PEACEFUL possession
= imprescriptible
Otherwise = 10 yrs
The reason for this is that one who is in actual possession of a piece
of land claiming to be the owner thereof may wait until his
possession is disturbed or his title is attacked before taking steps to
vindicate his right, the reason for the rule being, that his undisturbed
possession gives him a continuing right to seek the aid of a court of
equity to ascertain and determine the nature of the adverse claim of
a third party and its effect on his own title, which right can be claimed
only by one who is in possession."
Here, it was never established that petitioners remained in
actual possession of the property after their father’s sale
thereof to Go S. Kiang in 1965 and up to the filing of their complaint
in this case on August 10, 1995. On the contrary, the trial court’s
factual conclusion is that respondents had actual possession of the
subject property ever since. The action for reconveyance in the
instant case is, therefore, not in the nature of an action for quieting
of title, and is not imprescriptible.
MARIANO v PETRON CORPORATION on the Property, without seeking the Aure Group’s prior
consent.
1. Pacita V. Aure, Nicomedes Aure Bundac, and Zeny Abundo 8. Defense: Contract was not breached because PNOC merely
(Aure Group), owners of a parcel of land in Tagaytay City acquired ESSO Eastern’s shares in ESSO Philippines, a
leased the Property to ESSO Standard Eastern, Inc., (ESSO separate corporate entity.
Eastern), a foreign corporation doing business in the country  Alternatively, Petron argued that petitioner’s suit, filed
through its subsidiary ESSO Standard Philippines, Inc. (ESSO on 18 March 1999, was barred by prescription under
Philippines). Article 1389 and Article 1146(1) of the Civil Code as
 The lease period is 90 yearsand the rent is payable petitioner should have sought rescission within four
monthly for the first 10 years, and annually for the years from PNOC’s purchase of ESSO Philippines on
remaining period 23 December 197713 or before 23 December 1981.14
 The lease contract (Contract) contained an 9. RTC: granted
assignment veto clause barring the parties from  Breach of K
assigning the lease without prior consent of the other.7  However, because the Aure Group (and later
 Excluded from the prohibition were certain petitioner) tolerated ESSO Philippines’ continued use
corporations to whom ESSO Eastern may unilaterally of the Property by receiving rental payments, the law
assign its leasehold right on implied new lease governs the relationship of the
2. ESSO Eastern sold ESSO Philippines to the Philippine Aure Group (and later petitioner) and Petron, creating
National Oil Corporation (PNOC) for them an implied new lease terminating on 21
 Apparently, the Aure Group was not informed of the December 1998 upon Petron’s receipt of petitioner’s
sale. notice to vacate.
 PNOC bought the 10. CA: reversed
3. ESSO Philippines, whose corporate name was successively  The Court of Appeals found no reason to pierce ESSO
changed to Petrophil Corporation then to Petron Corporation Philippines’ corporate veil, treating PNOC’s buy-out of
(Petron), took possession of the Property. ESSO Philippines as mere change in ESSO
4. Mariano (petitioner) bought the Property from the Aure Group Philippines’ stockholding.
and obtained title to the Property issued in his name bearing  Suit barred by the four-year prescriptive period under
an annotation of ESSO Eastern’s lease Article 1389 and Article 1146 (1) of the Civil Code,
5. Petitioner sent to Petron a notice to vacate the Property. reckoned from PNOC’s buy-out of ESSO Philippines
 Petitioner informed Petron that PD 471 reduced the on 23 December 1977 (for Article 1389) or the
Contract’s duration from 90 to 25 years execution of the Contract on 13 November 196819 (for
6. Despite receiving the notice to vacate, Petron remained on the Article 1146 [1]).20
Property.
7. Petitioner sued Petron to rescind the Contract and recover ISSUE: WoN the K subsists between petitioner and Petron.
possession of the Property.
 Aside from invoking PD 471, petitioner alternatively HELD: YES
theorized that the Contract was terminated on 23
December 1977 when ESSO Eastern sold ESSO ESSO Eastern Assigned to PNOC its
Philippines to PNOC, thus assigning to PNOC its lease Leasehold Right over the Property, Breaching the Contract
PNOC’s buy-out of ESSO Philippines was total and unconditional, Second, the Contract was executed by ESSO Eastern, not ESSO
leaving no residual rights to ESSO Eastern. Logically, this change Philippines, as lessee, with the Aure Group as lessor. ESSO Eastern
of ownership carried with it the transfer to PNOC of any proprietary leased the Property for the use of ESSO Philippines, acting as
interest ESSO Eastern may hold through ESSO Philippines, ESSO Eastern’s Philippine branch. Consistent with such status,
including ESSO Eastern’s lease over the Property. This is the import ESSO Philippines took possession of the Property after the
of Petron’s admission in the Joint Motion that by PNOC’s buy-out of execution of the Contract. Thus, for purposes of the Contract, ESSO
ESSO Philippines "[PNOC], x x x acquired ownership of ESSO Philippines was a mere alter ego of ESSO Eastern.
Standard Philippines, Inc., including its leasehold right over the land
in question, through the acquisition of its shares of stocks." As the The Lessor’s Continued Acceptance of Lease Payments
Aure Group gave no prior consent to the transaction between Despite Breach of Contract Amounted to Waiver
ESSO Eastern and PNOC, ESSO Eastern violated the Contract’s The breach of contract notwithstanding, we hold that the Contract
assignment veto clause. subsists. Contrary to the trial court’s conclusion that ESSO Eastern’s
violation of the assignment veto clause extinguished the Contract,
Petron’s objection to this conclusion, sustained by the Court of replaced by a new implied lease with a monthly term, we hold that
Appeals, is rooted on its reliance on its separate corporate the breach merely gave rise to a cause of action for the Aure Group
personality and on the unstated assumption that ESSO Philippines to seek the lessee’s ejectment as provided under Article 1673,
(not ESSO Eastern) initially held the leasehold right over the paragraph 3 of the Civil Code.24 Although the records do not show
Property. Petron is wrong on both counts. that the Aure Group was formally notified of ESSO Philippines’ sale
Courts are loathe to pierce the fictive veil of corporate personality, to PNOC, the successive changes in the lessee’s name (from ESSO
cognizant of the core doctrine in corporation law vesting on Philippines to Petrophil Corporation then to Petron) suffice to alert
corporations legal personality distinct from their shareholders the Aure Group of a likely change in the personality of the lessee,
(individual or corporate) thus facilitating the conduct of corporate which, for lack of the Aure Group’s prior consent, was in obvious
business. However, fiction gives way to reality when the corporate breach of the Contract. Thus, the continued receipt of lease
personality is foisted to justify wrong, protect fraud, or defend crime, payments by the Aure Group (and later by petitioner) despite the
thwarting the ends of justice.21 The fiction even holds lesser sway contractual breach amounted to a waiver of their option to eject the
for subsidiary corporations whose shares are wholly if not almost lessee.
wholly owned by its parent company. The structural and systems
overlap inherent in parent and subsidiary relations often render the Petitioner’s Suit Barred by Prescription
subsidiary as mere local branch, agency or adjunct of the foreign Petitioner’s waiver of Petron’s contractual breach was compounded
parent corporation.22 by his long inaction to seek judicial redress. Petitioner filed his
Here, the facts compel the conclusion that ESSO Philippines was a complaint nearly 22 years after PNOC acquired the leasehold rights
mere branch of ESSO Eastern in the execution and breach of the to the Property and almost six years after petitioner bought the
Contract. First, by ESSO Eastern’s admission in the Contract, it is Property from the Aure Group. The more than two decades lapse
"a foreign corporation organized under the laws of the State of puts this case well within the territory of the 10 year prescriptive bar
Delaware, U.S.A., duly licensed to transact business in the to suits based upon a written contract under Article 1144 (1) of the
Philippines, and doing business therein under the business name Civil Code.25
and style of ‘Esso Standard Philippines’ x x x". In effect, ESSO
Eastern was ESSO Philippines for all of ESSO Eastern’s Philippine
business.