[G.R. No. L-6204. July 31, 1956.

]
CAPITOL SU!I"ISION, INC., Plaintiff-Appellee, #$. PRO"INC% O& N%GROS
OCCI!%NTAL, Defendant-Appellant.

! % C I S I O N
R%'%S, A., J.:
The Provincial Hospital of Occidental Negros, located in the City of Bacolod, capital of the
province, was built in 19! at a cost of about P"","""# But subse$uent i%prove%ents brought
the total cost to %ore than half a %illion pesos#
The Hospital was erected on a parcel of land of %ore than ,""" s$uare %eters identified as lot
No# &'( of the Bacolod Cadastre and clai%ed by the province of Occidental Negros as its
property by virtue of a deed of sale with donation e)ecuted in its favor by *ose Benares, for%er
owner, as a result of e)propriation proceedings# +t does not appear that a transfer certificate of
title has been issued to the province# But the lot has for %any years stood in the records of the
assess%ent office as the property of the Province or the Hospital and en,oyed e)e%ption fro%
the realty ta) as such#
+n 19!9, the Capitol -ubdivision, +nc#, a real estate co%pany, clai%ing to be the owner of the lot,
$uestioned the right of the Hospital to occupy it, and when its clai% of ownership was re,ected, it
brought the present action in the Court of .irst +nstance of Occidental Negros to recover
possession of the lot and reasonable rents for its use# But before filing the action, it had, in /ay,
190", the lot declared in its na%e for assess%ent purposes#
+t would appear that the lot in $uestion was part of a large tract of land 1nown as the Hacienda
/andalagan, for%erly owned by 2gustin 2%enabar and Pilar 2%enabar# The land consisted of
several lots# +n 193 the lots were purchased by *ose Benares, who later %ortgaged the% to the
Philippine National Ban1# The %ortgage having been foreclosed, the Ban1 bought the lots at a
foreclosure sale and had transfer certificates of title issued to it in 19&!# +n 19&0 the Ban1 signed
a contract agreeing to sell the lots to Carlos Benares for P!"",""", payable P&",""" down and
the balance in ten e$ual install%ents, the title to re%ain in the Ban1 until the price had been fully
paid# +n an instru%ent signed on the sa%e date, Carlos Benares, on his part, assigned to the
-ubdivision the rights ac$uired by hi% under his contract with the Ban1# 4ith the pay%ent of
the last install%ent in 19!9, a deed of absolute sale was e)ecuted by the Ban1 in favor of the
-ubdivision, and as a result the latter was issued the corresponding transfer certificates of title for
the lots, of which transfer certificate of title No# 1'9( pertains to lot No# &'(, the one here in
$uestion#
+n resisting the action of the subdivision, the Province put up the defense that it had ac$uired the
lot in $uestion fro% its for%er owner, *ose Benares, and that the subdivision was aware of that
fact when it bought the hacienda# +n support of this defense, the province endeavored to prove
that in co%pliance with 2ct No# &1!!, as a%ended, which re$uired the Province to provide a site
for the hospital before the funds for its construction could be released, the Province instituted
conde%nation proceedings, 5Civil Case No# &"!16 in 19! or 190 against *ose Benares for the
ac$uire%ent of the lot in $uestion, too1 possession of the sa%e and began the construction of the
hospital7 chan roblesvirtualawlibrary that pending trial the case was a%icably settled, with the Province paying to Benares
the assessed value of the lot and Benares donating to the Province so %uch of the purchase price
as was in e)cess of the assessed value7 chan roblesvirtualawlibrarythat to give effect to the settle%ent Benares e)ecuted a
deed of sale with donation in favor of the Province, which deed was delivered to the cler1 of
court and attached to the record of the case7 chan roblesvirtualawlibrarythat as a result of this transaction the lot beca%e
the property of the province7 chan roblesvirtualawlibrary that the court record of the case, including the deed of sale and
donation, was totally destroyed during the last war7 chan roblesvirtualawlibrary that the subdivision had constructive
notice of those facts and was therefore not an innocent purchaser, 1nowing fully well that at the
ti%e it bought the lot this was already occupied by the Hospital and the Hospital had been in full
operation as a public institution for %any years prior to the date of the alleged ac$uisition7 chan roblesvirtualawlibrary and
that /r# 2lfredo /ontelibano, the controlling stoc1holder and president and general %anager of
the subdivision, had 1nowledge of those facts because during his incu%bency as first city %ayor
of Bacolod, the city was contributing a large su% yearly for the support, operation, and
%aintenance of the Hospital#
2fter trial, the lower court rendered ,udg%ent in favor of Plaintiff re$uiring the Defendant to
restore possession of the lot to Plaintiff sub,ect to the latter8s right to e)ercise the option granted
in 2rticle &31 of the old Civil Code and further re$uiring the Defendant to pay rents fro%
Nove%ber (, 19&0, which all in all would a%ount to P101,'"3#9# .ro% this ,udg%ent
Defendant appealed directly to this court# .or so%e un1nown reason the record was elevated to
the Court of 2ppeals, but that court, upon %otion of the Plaintiff9Appellee, certified the case
here, for involving %ore than P0","""#
The $uestions for deter%ination are 516 whether the Defendant had already ac$uired right or title
to the lot as a result of the alleged e)propriation proceedings and deed of sale with donation, and
56 whether Plaintiff had actual or constructive 1nowledge of such fact at the ti%e it bought the
property#
2fter going over the record, we do not feel that those $uestions could be ,ustly decided on the
so%ewhat li%ited evidence actually ad%itted by the trial court# 4ith the record of e)propriation
proceedings destroyed together with the deed of sale and donation attached thereto, secondary
proof of such proceedings and deed should have been allowed# But presentation of that proof was
effectively barred when the trial court refused to give the provincial fiscal sufficient ti%e to
resubpoena two i%portant witnesses, who had failed to co%e on the day of the continuation of
the trial for lac1 of notice# Those witnesses were /r# *ose Benares 5the person fro% who% the
Province allegedly ac$uired the lot6 and /r# +ldefonso Coscolluela, who, as for%er treasurer of
the Province, had 1nowledge of such ac$uisition# Considering the a%ount of the public funds and
the public interest involved, the trial court should have granted the fiscal sufficient ti%e to
produce the said witnesses# 2 delay of two or three days for that purpose would not have
a%ounted to %uch, and the plea that the adverse party was incurring heavy e)penses for its
attorneys8 continued stay in Bacolod could have been %et with a ruling that those e)penses, if
reasonable, should be ta)ed against the party that caused the%# :iberality should be e)ercised in
granting postpone%ents of trial to obtain presence of %aterial evidence and to prevent
%iscarriage of ,ustice# 5Canal Oil Co# vs# National Oil Co# Cal 2ppeal, 33 P# d 19'#6 2 litigant
is entitled to reasonable delay and opportunity to get his witnesses# 5/oran vs# :eone, 19 -o#
&9(, 1, 2a# 2pp# !07 chan roblesvirtualawlibraryEndnote:chanroblesvirtuallawlibrary (, 1' C.J. -# !#6 4hile the granting or refusal of %otions
for continuance is discretionary# that discretion %ust be e)ercised wisely with a view to
substantial ,ustice#
Other evidence of vital i%portance to the case also appears to have barred#
On the $uestion of the subdivision8s good or bad faith, /r# /ontelibano, the president and
general %anager and controlling stoc1holder of the -ubdivision, pretends that the -ubdivision
had no 1nowledge of the e)propriation or deed of sale with donation at the ti%e it bought the
land# The fiscal8s efforts to cross9e)a%ine hi% on those %atters were frustrated by Plaintiff8s
counsel8s ob,ections and the trial court8s rulings sustaining those ob,ections# The court reasoned
that /r# /ontelibano was then on the stand as Plaintiff8s own witness and could not be
$uestioned in such a way as to %a1e hi% to the Defendant8s witness# But the fact alone that /r#
/ontelibano was then testifying as Plaintiff8s witness is no ,ustification for not per%itting the
fiscal to cross9e)a%ine hi% on any %atter that would elicit all i%portant facts bearing on the
issue# 2s for%er Chief *ustice /oran puts it ;
+n this ,urisdiction, section (' above $uoted provided that the adverse party %ay cross9e)a%ine a
witness for the purpose a%ong others, of eliciting all i%portant facts bearing upon the issue#
.ro% this provision it %ay clearly be inferred that a party %ay cross9 e)a%ine a witness on
%atters not e%braced in his direct e)a%ination# But this does not %ean that a party by doing so
is %a1ing the witness his own accordance with section (&#< 5+++ /oran, =ules of Court, &rd ed#
0('#6
The trial court refused to allow the witness *ose /arco, a for%er deputy cler1 of court, to say
anything about the e)propriation proceeding in $uestion on the e)cuse that his testi%ony on this
%atter would be i%%aterial and inco%petent# The loss of the records of said e)propriation
proceeding had already been established, and section 01, =ule 1&, e)pressly per%its proof by
secondary evidence#
The trial court, after thus preventing Defendant fro% proving the e)istence of the e)propriation
case through the testi%ony of *ose /arco, willingly acceded to the presentation in rebuttal of a
witness who testified to the non9e)istence of the said e)propriation case, thus per%itting Plaintiff
to prove in rebuttal what he had refused Defendant to substantiate in defense#
The trial court appears to have had no ,ustification in refusing to ad%it %ost of the e)hibits
offered in evidence for the Defendant# Those e)hibits have direct bearing on the issue of
ownership#
+n fine, we are persuaded that the interests of ,ustice de%and that there be further trial in this
case#
4herefore, the ,udg%ent appealed fro% is set aside and the case ordered re%anded to the court
of origin for further trial in order that the Defendant %ay have an opportunity to fully prove its
case, with e$ual opportunity to the Plaintiff to %eet such further evidence as the Defendant %ay
present, it being understood that the evidence already ta1en need not be reintroduced# No
pronounce%ent as to costs#