Republic of the Philippines

Supreme Court
Manila
THIRD DIVISION
PACIFICO M. VALIAO, for himself and in G.R. No. 170757
behalf of his co-heirs LODOVICO,
RICARDO, BIENVENIDO, all Surnamed Present:
VALIAO and NEMESIO M. GRANDEA,
Petitioners,
VELASCO, JR., J., Chairperson,
- versusPERALTA,
ABAD,
MENDOZA, and
REPUBLIC
OF
THE
PHILIPPINES,
PERLAS-BERNABE, JJ.
MACARIO ZAFRA, and MANUEL YUSAY,
Respondents,
Promulgated:
November 28, 2011

x---------------------------------------------------------------------------------------------------------------------------------------x
DECISION
PERALTA, J.:
Before this Court is a petition for review on certiorari under Rule 45 of the Rules of Court
seeking to set aside the Decision[1] and Resolution[2] of the Court of Appeals (CA) in CA-G.R.
CV No. 54811, which reversed the Decision[3] of the Regional Trial Court (RTC) of
Kabankalan, Negros Occidental, Branch 61, in Land Registration Case No. 03, granting
petitioners' application for registration of title over a parcel of land located in Ilog, Negros
Occidental.
The factual milieu of this case is as follows:
On August 11, 1987, petitioners[4] Pacifico, Lodovico, Ricardo, Bienvenido, all surnamed
Valiao, and Nemesio Grandea filed with the RTC of Kabankalan, Negros Occidental an
application for registration of a parcel of land with an area of 504,535 square meters,
more or less, situated in Barrio Galicia, Municipality of Ilog, Negros Occidental.
On June 20, 1988, private oppositors Macario Zafra and Manuel Yusay filed their Motion to
Dismiss the application on the following grounds: (1) the land applied for has not been
declared alienable and disposable; (2) res judicata has set in to bar the application for
registration; and (3) the application has no factual or legal basis.
On August 24, 1988, the Republic of the Philippines (Republic), through the Office of the
Solicitor General (OSG), opposed the application for registration on the following grounds,
among others: that neither the applicants nor their predecessors-in-interest had been in

open, continuous, exclusive and notorious possession and occupation of the land in
question since June 12, 1945 or prior thereto; that the muniment/s of title and/or the tax
declaration/s and tax payments/receipts of applicants, if any, attached to or alleged in the
application, do/es not constitute competent and sufficient evidence of a bona
fide acquisition of the land applied for or of their open, continuous, exclusive and
notorious possession and occupation in the concept of owner, since June 12, 1945 or prior
thereto; that the parcel of land applied for is a portion of public domain belonging to the
Republic, which is not subject to private appropriation; and that the present action is
barred by a previous final judgment in a cadastral case prosecuted between the same
parties and involving the same parcel of land.
On July 3, 1989, the RTC denied private oppositors' Motion to Dismiss. Trial thereafter
ensued.
In support of their application for registration, petitioners alleged that they acquired the
subject property in 1947, upon the death of their uncle Basilio Millarez (Basilio), who
purchased the land from a certain Fermin Payogao, pursuant to a Deed of Sale [5] dated
May 19, 1916 entirely handwritten in Spanish language. Basilio possessed the land in
question from May 19, 1916 until his death in 1947. Basilio's possession was open,
continuous, peaceful, adverse, notorious, uninterrupted and in the concept of an owner.
Upon Basilio's death, the applicants as co-heirs possessed the said land until 1966, when
oppositor Zafra unlawfully and violently dispossessed them of their property, which
compelled them to file complaints of Grave Coercion and Qualified Theft against Zafra. In
support of their claim of possession over the subject property, petitioners submitted in
evidence Tax Declaration No. 9562[6] dated September 29, 1976 under the names of the
heirs of Basilio Millarez.
The RTC, in its Decision dated December 15, 1995, granted petitioners' application for
registration of the subject property, the dispositive portion of which states:
WHEREFORE, in view of the foregoing, this Court hereby orders and
decrees registration of Lot No. 2372 subject of the present
proceedings and the registration of title thereto, in favor of the
applicants, who are declared the true and lawful owners of said Lot
No. 2372, except applicant Lodovico Valiao, who sold his right to
Macario Zafra.
Upon the finality of this decision, let the corresponding decree of
registration and Certificate of Title be issued in the name of the
applicants, Heirs of Basilio Millarez, namely: Pacifico Valiao, Ricardo
Valiao, Bienvenido Valiao and Nemesio Grandea, subject to the rights
of private oppositors, Macario Zafra and Manuel Yusay over said lot
whose fishpond permits are declared VALID and will expire on
December 31, 2003.
No costs.
SO ORDERED.[7]

Aggrieved by the Decision, the private oppositors and the Republic, through Assistant
Prosecutor Josue A. Gatin, filed an appeal with the CA, which reversed the trial court's
findings in its Decision dated June 23, 2005. The CA ruled that the classification of lands of
the public domain is an exclusive prerogative of the executive department of the
government and in the absence of such classification, the lands remain as unclassified until
it is released therefrom and rendered open to disposition. Further, there exists a prior
cadastral case involving the same parties herein and the same Lot No. 2372, which ruled
that Lot No. 2372 belongs to the Republic. The CA held that such judgment constitutes res
judicata that bars a subsequent action for land registration. It also ruled that the subject
property is part of the inalienable land of the public domain and petitioners failed to prove
that they and their predecessors-in-interest had been in open, continuous, exclusive and
notorious possession of the land in question since June 12, 1945 or earlier. The dispositive
portion of the decision reads:
WHEREFORE, premises considered, the instant appeal is
GRANTED. Accordingly, We REVERSE the Decision dated December 15,
1995 of the Regional Trial Court, DENY the application for registration of
title filed by petitioners-appellees, DECLARE as moot and academic any
and all claims of private oppositors-appellants over Lot No. 2372, and
DECLARE the subject parcel of land to be inalienable and indisposable
land belonging to the public domain.
SO ORDERED.[8]
Petitioners filed a motion for reconsideration, which was denied by the CA in a Resolution
dated November 17, 2005. Hence, the present petition with the following issues:
I
WHETHER OR NOT LOT NO. 2372 OF THE ILOG CADASTRE IS ALIENABLE
AND DISPOSABLE LAND OF THE PUBLIC DOMAIN.
II
WHETHER OR NOT THE CLAIM OF PRESCRIPTION BY THE APPLICANT
WILL LIE ON LOT NO. 2372.
III
WHETHER OR NOT THE DECISION OF THE COURT OF APPEALS IN CAD.
CASE NO. 23, ENTITLED LODOVICO VALIAO, ET, AL., VS. MACARIO
ZAFRA, ET, AL., AC G.R. NO. CV-68873, CONSTITUTES RES JUDICATA AS
FAR AS THIS APPLICATION FOR REGISTRATION IS CONCERNED.
IV
WHETHER OR NOT THE ALLEGED POSSESSION OF THE APPLICANTS
THROUGH THEIR PREDECESSORS-IN-INTEREST IS SUFFICIENT TO
SUSTAIN THEIR CLAIM FOR PRESCRIPTION.[9]
Petitioners claim that Lot No. 2372 is an alienable and disposable portion of the public
domain. The possession of applicants' predecessors-in interest since 1916 until 1966 had
been open, continuous and uninterrupted; thus, converting the said land into a private

land. The subject lot had already become private in character in view of the length of time
the applicants and their predecessors-in-interest had possessed the subject lot, which
entitles them to the confirmation of their title. Petitioners further claim that prior
dismissal in a cadastral proceeding does not constitute res judicata in a subsequent
application for registration of a parcel of land.
In its Comment, the OSG submits that the issues to be resolved in the present petition, i.e.,
whether Lot No. 2372 is alienable and disposable land of the public domain and whether
petitioners have the right to have the said property registered in their name through
prescription of time are questions of fact, which were already passed upon by the CA and
no longer reviewable by the Court, since findings of fact of the CA, when supported by
sufficient evidence, are conclusive and binding on the parties. The OSG further claims that
petitioners failed to prove that the subject lot is part of the alienable and disposable
portion of the public domain and that petitioners' application for land registration is
already barred by a prior decision in a cadastral case. Lastly, the OSG asserts that
petitioners did not present sufficient evidence to prove that their possession over the
subject lot applied for had been open, peaceful, exclusive, continuous and adverse.
Anent the propriety of filing a petition for review under Rule 45 of the Rules of Court, the
principle is well-established that this Court is not a trier of facts and that only questions of
law may be raised. The resolution of factual issues is the function of the lower courts
whose findings on these matters are received with respect and are, as a rule, binding on
this Court. This rule, however, is subject to certain exceptions. One of these is when the
findings of the appellate court are contrary to those of the trial court.[10] Due to the
divergence of the findings of the CA and the RTC, the Court will now re-examine the facts
and evidence adduced before the lower courts.
Section 14 (1) of Presidential Decree No. (PD) 1529, otherwise known as the Property
Registration Decree provides:
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.
From the foregoing, petitioners need to prove that: (1) the land forms part of the alienable
and disposable land of the public domain; and (2) they, by themselves or through their
predecessors-in-interest, have been in open, continuous, exclusive, and notorious
possession and occupation of the subject land under a bona fide claim of ownership from
June 12, 1945 or earlier.[11] These the petitioners must prove by no less than clear, positive
and convincing evidence.[12]

Under the Regalian doctrine, which is embodied in our Constitution, all lands of the public
domain belong to the State, which is the source of any asserted right to any ownership of
land. All lands not appearing to be clearly within private ownership are presumed to
belong to the State. Accordingly, public lands not shown to have been reclassified or
released as alienable agricultural land or alienated to a private person by the State remain
part of the inalienable public domain.[13] Unless public land is shown to have been
reclassified as alienable or disposable to a private person by the State, it remains part of
the inalienable public domain. Property of the public domain is beyond the commerce of
man and not susceptible of private appropriation and acquisitive prescription. Occupation
thereof in the concept of owner no matter how long cannot ripen into ownership and be
registered as a title.[14] The burden of proof in overcoming the presumption of State
ownership of the lands of the public domain is on the person applying for registration (or
claiming ownership), who must prove that the land subject of the application is alienable
or disposable. To overcome this presumption, incontrovertible evidence must be
established that the land subject of the application (or claim) is alienable or disposable.[15]
There must be a positive act declaring land of the public domain as alienable and
disposable. To prove that the land subject of an application for registration is alienable,
the 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. The applicant
may also secure a certification from the government that the land claimed to have been
possessed for the required number of years is alienable and disposable.[16]
No such evidence was offered by the petitioners to show that the land in question has
been classified as alienable and disposable land of the public domain. In the absence of
incontrovertible evidence to prove that the subject property is already classified as
alienable and disposable, we must consider the same as still inalienable public
domain.[17] Verily, the rules on the confirmation of imperfect title do not apply unless and
until the land subject thereof is released in an official proclamation to that effect so that it
may form part of the disposable agricultural lands of the public domain.
With respect to the existence of a prior cadastral case, it appears that on July 11,
1966, the petitioners filed in Cadastral Case No. 23 of the then CFI of Negros Occidental a
petition to reopen the proceedings relative to three lots, one of which is Lot No. 2372. The
lower court, in its Order[18] dated October 20, 1980, held that Lot No. 2372 belongs to the
Republic. It found that after the subject lot was declared public land, it was found to be
inside the communal forest. On appeal, the CA, in its Decision[19] dated August 7, 1984,
found no reversible error and affirmed the decision of the cadastral court. Thereafter, a
petition elevating the case to this Court was dismissed for lack of merit.[20] In the present
case, the CA, in its Decision dated June 23, 2005, ruled that such judgment constitutes res
judicata that will bar a subsequent action for land registration on the same land.
In Director of Lands v. Court of Appeals,[21] the Court held that a judicial declaration that a
parcel of land is public, does not preclude even the same applicant from subsequently
seeking a judicial confirmation of his title to the same land, provided he thereafter
complies with the provisions of Section 48[22] of Commonwealth Act No. 141, as amended,

and as long as said public lands remain alienable and disposable. In the case at bar, not
only did the petitioners fail to prove that the subject land is part of the alienable and
disposable portion of the public domain, they failed to demonstrate that they by
themselves or through their predecessors-in-interest have possessed and occupied the
subject land since June 12, 1945 or earlier as mandated by the law.
It is settled that the applicant must present proof of specific acts of ownership
to substantiate
the claim
and cannot
just offer general statements
which
are mereconclusions of law than factual evidence of possession.[23] Actual possession
consists in the manifestation of acts of dominion over it of such a nature as a party would
actually exercise over his own property.[24]
The testimonies of Nemesio and Pacifico as to their own and their predecessors-ininterest's possession and ownership over the subject lot fail to convince Us.Petitioners
claim that Basilio was in possession of the land way back in 1916. Yet no tax declaration
covering the subject property, during the period Basilio allegedly occupied the subject
property, i.e., 1916 to 1947, was presented in evidence. Other than the bare allegations
of Nemesio and Pacifico that Basilio allegedly introduced improvements on the subject
property, there is nothing in the records which would substantiate petitioners' claim that
Basilio was in possession of Lot No. 2372 since June 12, 1945 or earlier, the period of
possession required by law. Hence, petitioners' assertion that Basilio possessed the
property in question from 1916 to 1947 is, at best, conjectural and self-serving.
As regards petitioners' possession of the land in question from 1947 to 1966, petitioners
could only support the same with a tax declaration dated September 29, 1976.At best,
petitioners can only prove possession since said date. What is required is open, exclusive,
continuous and notorious possession by petitioners and their predecessors-in-interest,
under a bona fide claim of ownership, since June 12, 1945 or earlier.[25] Petitioners failed to
explain why, despite their claim that their predecessors-in-interest have possessed the
subject properties in the concept of an owner even before June 12, 1945, it was only in
1976 that they started to declare the same for purposes of taxation.
Moreover, tax declarations and receipts are not conclusive evidence of ownership or of
the right to possess land when not supported by any other evidence. The
disputed property may have been declared for taxation purposes in the names of the
applicants for registration, or of their predecessors-in-interest, but it does not necessarily
prove ownership. They are merely indicia of a claim of ownership.[26]
Evidently, since the petitioners failed to prove that (1) the subject property was classified
as part of the disposable and alienable land of the public domain; and (2) they and their
predecessors-in-interest had been in open, continuous, exclusive, and notorious
possession and occupation thereof under a bona fide claim of ownership since June 12,
1945 or earlier, their application for confirmation and registration of the subject property
under PD 1529 should be denied.
WHEREFORE, the Decision and Resolution of the Court of Appeals in CA-G.R. CV No. 54811,
which reversed the Decision of the Regional Trial Court of Kabankalan, Negros Occidental,
Branch 61, in Land Registration Case No. 03, is AFFIRMED. The application for registration
of title filed by the petitioners Pacifico Valiao, Lodovico Valiao, Ricardo Valiao, Bienvenido

Valiao, and Nemesio Grandea, over Lot No. 2372, with a total area of 504,535 square
meters, more or less, situated in Barrio Galicia, Municipality of Ilog, Negros
Occidental, is DENIED.
SO ORDERED.
Republic of the Philippines
Supreme Court
Manila
THIRD DIVISION
REPUBLIC OF THE PHILIPPINES,
G. R. No. 177790
Petitioner,
Present:
CARPIO MORALES, J.,
Chairperson,
- versus BRION,
BERSAMIN,
VILLARAMA, JR., and
SERENO, JJ.
CARLOS R. VEGA, MARCOS R. VEGA,
ROGELIO R. VEGA, LUBIN R. VEGA, HEIRS
OF GLORIA R. VEGA, NAMELY: FRACISCO
Promulgated:
L. YAP, MA. WINONA Y. RODRIGUEZ, MA.
WENDELYN V. YAP and FRANCISCO V.
January 17, 2011
YAP, JR.,
Respondents,
ROMEA G. BUHAY-OCAMPO, FRANCISCO
G. BUHAY, ARCELI G. BUHAY-RODRIGUEZ,
ORLANDO G. BUHAY, SOLEDAD G. BUHAYVASQUEZ, LOIDA G. BUHAY-SENADOSA,
FLORENDO G. BUHAY, OSCAR G. BUHAY,
ERLYN BUHAY-GINORGA, EVELYN BUHAYGRANETA, and EMILIE BUHAY-DALLAS,
Respondents-Intervenors.
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DECISION
SERENO, J.:
This is a Rule 45 Petition filed by the Republic of the Philippines (petitioner
Republic), through the Office of the Solicitor General (OSG), questioning the Decision of
the Court of Appeals,[1] which affirmed a lower courts grant of an application for original
registration of title covering a parcel of land located in Los Baos, Laguna.
The facts of the case as culled from the records of the trial court and the appellate court
are straightforward and without much contention from the parties.

On 26 May 1995, respondents Carlos R. Vega, Marcos R. Vega, Rogelio R. Vega, Lubin R.
Vega and Heirs of Gloria R. Vega namely, Francisco L. Yap, Ma. Winona Y. Rodriguez, Ma.
Wendelyn V. Yap and Francisco V. Yap, Jr. (respondents Vegas) filed an application for
registration of title. The application covered a parcel of land, identified as Lot No. 6191,
Cadastre 450 of Los Baos, Laguna, with a total area of six thousand nine hundred two
(6,902) square meters (the subject land). The case was docketed as Land Registration Case
No. 103-95-C and raffled to the Regional Trial Court of Calamba, Laguna, Branch 92.
Respondents Vegas alleged that they inherited the subject land from their mother, Maria
Revilleza Vda. de Vega, who in turn inherited it from her father, Lorenzo Revilleza. Their
mothers siblings (two brothers and a sister) died intestate, all without leaving any
offspring.
On 21 June 1995, petitioner Republic filed an opposition to respondents Vegas application
for registration on the ground, inter alia, that the subject land or portions thereof were
lands of the public domain and, as such, not subject to private appropriation.
During the trial court hearing on the application for registration, respondents
Vegas presented several exhibits in compliance with the jurisdictional requirements, as
well as witnesses to prove respondents Vegas ownership, occupation and possession of
the land subject of the registration. Significant was the testimony of Mr. Rodolfo Gonzales,
a Special Investigator of the Community Environment and Natural Resources Office
(CENRO) of Los Baos, Laguna, under the Department of Environment and Natural
Resources (DENR). He attested to having conducted an inspection of the subject land[2] and
identified the corresponding Report dated 13 January 1997, which he had submitted to
the Regional Executive Director, Region IV. The report stated that the area subject of the
investigation was entirely within the alienable and disposable zone, and that there was no
public land application filed for the same land by the applicant or by any other person. [3]
During the trial, respondents-intervenors Romea G. Buhay-Ocampo, Francisco G. Buhay,
Arceli G. Buhay-Rodriguez, Orlando G. Buhay, Soledad G. Buhay-Vasquez, Loida G. BuhaySenadosa, Florendo G. Buhay, Oscar G. Buhay, Erlyn Buhay-Ginorga, Evelyn Buhay-Grantea
and Emilie Buhay-Dallas (respondents-intervenors Buhays) entered their appearance and
moved to intervene in respondents Vegas application for registration.[4] Respondentsintervenors Buhays claimed a portion of the subject land consisting of eight hundred
twenty-six (826) square meters, purportedly sold by respondents Vegas mother (Maria
Revilleza Vda. de Vega) to the formers predecessors-in-interest - the sisters Gabriela
Gilvero and Isabel Gilverio - by virtue of a Bilihan ng Isang Bahagi ng Lupang Katihan dated
14 January 1951.[5] They likewise formally offered in evidence Subdivision Plan Csd-04024336-D, which indicated the portion of the subject land, which they claimed was sold to
their predecessors-in-interest.[6]
In a Decision dated 18 November 2003, the trial court granted respondents Vegas
application and directed the Land Registration Authority (LRA) to issue the corresponding
decree of registration in the name of respondents Vegas and respondents-intervenors
Buhays predecessors, in proportion to their claims over the subject land.
Petitioner Republic appealed the Decision of the trial court, arguing that respondents
Vegas failed to prove that the subject land was alienable and disposable, since the
testimony of Mr. Gonzales did not contain the date when the land was declared as such.
Unpersuaded by petitioner Republics arguments, the Court of Appeals affirmed in toto the
earlier Decision of the trial court. Aggrieved by the ruling, petitioner filed the instant Rule
45 Petition with this Court.

Respondents Vegas, who are joined by respondents-intervenors Buhays

(collectively, respondents), raise procedural issues concerning the filing of the instant
Petition, which the Court shall resolve first. Briefly, respondents found, in the instant
Petition, procedural deficiencies that ought to warrant its outright dismissal. These
deficiencies are as follows: (a) petitioner Republic failed to include the pertinent portions
of the record that would support its arguments under Rule 45, Section 4 (d) of the Rules of
Court, specifically the Appellees Brief of respondents Vegas in the appellate proceedings;
and (b) it raised questions of fact, which are beyond the purview of a Rule 45 Petition. [7]
The Court is not persuaded by respondents arguments concerning the purported
defects of the Petition.
First, petitioner Republics failure to attach a copy of respondents Vegas
Appellees Brief to the instant Petition is not a fatal mistake, which merits the immediate
dismissal of a Rule 45 Petition. The requirement that a petition for review on certiorari
should be accompanied by such material portions of the record as would support the
petition is left to the discretion of the party filing the petition.[8] Except for the duplicate
original or certified true copy of the judgment sought to be appealed from, [9] there are no
other records from the court a quo that must perforce be attached before the Court can
take cognizance of a Rule 45 petition.
Respondents cannot fault petitioner Republic for excluding pleadings, documents
or records in the lower court, which to their mind would assist this Court in deciding
whether the Decision appealed from is sound. Petitioner Republic is left to its own
estimation of the case in deciding which records would support its Petition and should
thus be attached thereto. In any event, respondents are not prevented from attaching to
their pleadings pertinent portions of the records that they deem necessary for the Courts
evaluation of the case, as was done by respondents Vegas in this case when they attached
their Appellees Brief to their Comment. In the end, it is the Court, in finally resolving the
merits of the suit that will ultimately decide whether the material portions of the records
attached are sufficient to support the Petition.
Second, the Petition raises a question of law, and not a question of fact.
Petitioner Republic simply takes issue against the conclusions made by the trial and the
appellate courts regarding the nature and character of the subject parcel of land, based on
the evidence presented. When petitioner asks for a review of the decisions made by a
lower court based on the evidence presented, without delving into their probative value
but simply on their sufficiency to support the legal conclusions made, then a question of
law is raised.
In New Rural Bank of Guimba (N.E.) Inc. v. Fermina S. Abad and Rafael
Susan,[10] the Court reiterated the distinction between a question of law and a question of
fact in this wise:
We reiterate the distinction between a question of law and a
question of fact. 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
the facts being admitted. A question of fact exists when a 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. (Emphasis supplied)
Petitioner Republic is not calling for an examination of the probative value or
truthfulness of the evidence presented, specifically the testimony of Mr. Gonzales. It,
however, questions whether the evidence on record is sufficient to support the lower
courts conclusion that the subject land is alienable and disposable. Otherwise stated,
considering the evidence presented by respondents Vegas in the proceedings below, were
the trial and the appellate courts justified under the law and jurisprudence in their findings
on the nature and character of the subject land? Undoubtedly, this is a pure question of
law, which calls for a resolution of what is the correct and applicable law to a given set of
facts.
Going now to the substantial merits, petitioner Republic places before the Court
the question of whether, based on the evidence on record, respondents Vegas have
sufficiently established that the subject land is alienable and disposable. Was it erroneous
for the Court of Appeals to have affirmed the trial courts grant of registration applied for
by respondents Vegas over the subject land? We find no reversible error on the part of
either the trial court or the Court of Appeals.
Presidential Decree No. 1529, otherwise known as the Property Registration
Decree, provides for the instances when a person may file for an application for
registration of title over a parcel of land:
Section 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:
Those who by themselves or through their predecessors-ininterest 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. x x x.

Thus, pursuant to the afore-quoted provision of law, applicants for registration of

title must prove the following: (1) that the subject land forms part of the disposable and
alienable lands of the public domain; and (2) that they have been in open, continuous,
exclusive and notorious possession and occupation of the land under a bona fide claim of
ownership since 12 June 1945 or earlier.[11] Section 14 (1) of the law requires that the
property sought to be registered is already alienable and disposable at the time the
application for registration is filed.[12]
Raising no issue with respect to respondents Vegas open, continuous, exclusive
and notorious possession of the subject land in the present Petition, the Court will limit its
focus on the first requisite: specifically, whether it has sufficiently been demonstrated that
the subject land is alienable and disposable.
Unless a land is reclassified and declared alienable and disposable, occupation of
the same in the concept of an owner - no matter how long -cannot ripen into ownership

and result in a title; public lands not shown to have been classified as alienable and
disposable lands remain part of the inalienable domain and cannot confer ownership or
possessory rights.[13]
Matters of land classification or reclassification cannot be assumed; they call for
proof.[14] To prove that the land subject of an application for registration is alienable, an
applicant must conclusively establish the existence of a positive act of the government,
such as any of the following: a presidential proclamation or an executive order; other
administrative actions; investigation reports of the Bureau of Lands investigator; or a
legislative act or statute.[15] The applicant may also secure a certification from the
government that the lands applied for are alienable and disposable.[16]
Previously, a certification from the DENR that a lot was alienable and disposable
was sufficient to establish the true nature and character of the property and enjoyed the
presumption of regularity in the absence of contradictory evidence. [17]
However, in Republic v. T.A.N. Properties, Inc.,[18] the Supreme Court overturned
the grant by the lower courts of an original application for registration over a parcel of
land in Batangas and ruled that a CENRO certification is not enough to certify that a land is
alienable and disposable:
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. (Emphasis
supplied)
Thus, as it now stands, aside from a CENRO certification, an application for
original registration of title over a parcel of land must be accompanied by 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 in order to establish that the land indeed is alienable
and disposable.[19]
To comply with the first requisite for an application for original registration of
title under the Property Registration Decree, respondents Vegas should have submitted a
CENRO certification and a certified true copy of the original classification by the DENR
Secretary that the land is alienable and disposable, together with their application.
However, as pointed out by the Court of Appeals, respondents Vegas failed to submit a
CENRO certification -- much less an original classification by the DENR Secretary -- to prove
that the land is classified as alienable and disposable land of the public domain.[20] If the
stringent rule imposed in Republic v. T.A.N. Properties, Inc., is to be followed, the absence
of these twin certifications justifies a denial of an application for registration. Significantly,

however, the Courts pronouncement in Republic v. T.A.N. Properties, Inc., was issued after
the decisions of the trial court[21] and the appellate court[22] in this case.
Recently, however, in Republic v. Serrano,[23] the Court affirmed the findings of
the trial and the appellate courts that the parcel of land subject of registration was
alienable and disposable. The Court held that a DENR Regional Technical Directors
certification, which is annotated on the subdivision plan submitted in evidence,
constitutes substantial compliance with the legal requirement:
While Cayetano failed to submit any certification which would
formally attest to the alienable and disposable character of the land
applied for, the Certification by DENR Regional Technical Director
Celso V. Loriega, Jr., as annotated on the subdivision plan submitted in
evidence by Paulita, constitutes substantial compliance with the legal
requirement. It clearly indicates that Lot 249 had been verified as
belonging to the alienable and disposable area as early as July 18,
1925.
The DENR certification enjoys the presumption of regularity
absent any evidence to the contrary. It bears noting that no opposition
was filed or registered by the Land Registration Authority or the DENR
to contest respondents' applications on the ground that their
respective shares of the lot are inalienable. There being no substantive
rights which stand to be prejudiced, the benefit of the Certification may
thus be equitably extended in favor of respondents. (Emphasis
supplied)
Indeed, the best proofs in registration proceedings that a land is alienable and
disposable are a certification from the CENRO or Provincial Environment and Natural
Resources Office (PENRO) and a certified true copy of the DENRs original classification of
the land. The Court, however, has nonetheless recognized and affirmed applications for
land registration on other substantial and convincing evidence duly presented without any
opposition from the LRA or the DENR on the ground of substantial compliance.
Applying these precedents, the Court finds that despite the absence of a
certification by the CENRO and a certified true copy of the original classification by the
DENR Secretary, there has been substantial compliance with the requirement to show that
the subject land is indeed alienable and disposable based on the evidence on record.
First, respondents Vegas were able to present Mr. Gonzales of the CENRO who
testified that the subject land is alienable and disposable, and who identified his written
report on his inspection of the subject land.
In the Report,[24] Mr. Gonzales attested under oath that (1) the area is entirely
within the alienable and disposable zone as classified under Project No. 15, L.C. Map No.
582, certified on 31 December 1925;[25] (2) the land has never been forfeited in favor of
the government for non-payment of taxes; (3) the land is not within a previously
patented/decreed/titled property;[26] (4) there are no public land application/s filed by the
applicant for the same land;[27] and (5) the land is residential/commercial.[28] That Mr.
Gonzales appeared and testified before an open court only added to the reliability of the
Report, which classified the subject land as alienable and disposable public land. The Court
affirms the Court of Appeals conclusion that Mr. Gonzales testimony and written report

under oath constituted substantial evidence to support their claim as to the nature of the
subject land.
Second, Subdivision Plan Csd-04-02433-6, formally offered as evidence by
respondents-intervenors Buhays,[29] expressly indicates that the land is alienable and
disposable. Similar to Republic v. Serrano, Mr. Samson G. de Leon, the officer-in-charge of
the Office of the Assistant Regional Executive Director for Operations of the DENR,
approved the said subdivision plan, which was annotated with the following proviso: [T]his
survey is inside alienable and disposable area as per Project No. 15, L.C. Map No. 582,
certified on Dec. 31, 1925. Notably, Mr. De Leons annotation pertaining to the
identification of the land as alienable and disposable coincides with the investigation
report of Mr. Gonzales.
Finally, upon being informed of respondents Vegas application for original
registration, the LRA never raised the issue that the land subject of registration was not
alienable and disposable. In the Supplementary Report submitted during the trial court
proceedings,[30] the LRA did not interpose any objection to the application on the basis of
the nature of the land. It simply noted that the subject subdivision plan (Psu-51460) had
also been applied for in Case No. 1469, GLRO Record No. 32505, but that there was no
decree of registration issued therefor. Thus, the LRA recommended that should the instant
case be given due course, the application in Case No. 1469, GLRO Record No. 32505 with
respect to plan Psu-51460 be dismissed. In addition, not only did the government fail to
cross-examine Mr. Gonzales, it likewise chose not to present any countervailing evidence
to support its opposition. In contrast to the other cases brought before this Court, [31] no
opposition was raised by any interested government body, aside from the pro
forma opposition filed by the OSG.
The onus in proving that the land is alienable and disposable still remains with
the applicant in an original registration proceeding; and the government, in opposing the
purported nature of the land, need not adduce evidence to prove otherwise.[32] In this case
though, there was no effective opposition, except the pro forma opposition of the OSG, to
contradict the applicants claim as to the character of the public land as alienable and
disposable. The absence of any effective opposition from the government, when coupled
with respondents other pieces of evidence on record persuades this Court to rule in favor
of respondents.
In the instant Petition, petitioner Republic also assails the failure of Mr. Gonzales
to testify as to when the land was declared as alienable and disposable. Indeed, his
testimony in open court is bereft of any detail as to when the land was classified as
alienable and disposable public land, as well as the date when he conducted the
investigation. However, these matters could have been dealt with extensively during
cross-examination, which petitioner Republic waived because of its repeated absences and
failure to present counter evidence.[33] In any event, the Report, as well as the Subdivision
Plan, readily reveals that the subject land was certified as alienable and disposable as early
as 31 December 1925 and was even classified as residential and commercial in nature.
Thus, the Court finds that the evidence presented by respondents Vegas, coupled
with the absence of any countervailing evidence by petitioner Republic, substantially
establishes that the land applied for is alienable and disposable and is the subject of
original registration proceedings under the Property Registration Decree. There was no
reversible error on the part of either the trial court or the appellate court in granting the
registration.

Respondents-intervenors Buhays title to that portion of the subject land is

likewise affirmed, considering that the joint claim of respondents-intervenors Buhays over
the land draws its life from the same title of respondents Vegas, who in turn failed to
effectively oppose the claimed sale of that portion of the land to the formers
predecessors-in-interest.
It must be emphasized that the present ruling on substantial compliance
applies pro hac vice. It does not in any way detract from our rulings in Republic v. T.A.N.
Properties, Inc., and similar cases which impose a strict requirement to prove that the
public land is alienable and disposable, especially in this case when the Decisions of the
lower court and the Court of Appeals were rendered prior to these rulings. [34] To establish
that the land subject of the application is alienable and disposable public land, the general
rule remains: all applications for original registration under the Property Registration
Decree must include both (1) a CENRO or PENRO certification and (2) a certified true copy
of the original classification made by the DENR Secretary.
As an exception, however, the courts - in their sound discretion and based solely
on the evidence presented on record - may approve the application, pro hac vice, on the
ground of substantial compliance showing that there has been a positive act of
government to show the nature and character of the land and an absence of effective
opposition from the government. This exception shall only apply to applications for
registration currently pending before the trial court prior to this Decision and shall be
inapplicable to all future applications.
WHEREFORE, premises considered, the instant Petition is DENIED. The Court of
Appeals Decision dated 30 April 2007 and the trial courts Decision dated 18 November
2003 are hereby AFFIRMED.
SO ORDERED.
SECOND DIVISION
[G.R. No. 178635, April 11 : 2011]
SERVILLANO E. ABAD, PETITIONER, VS. OSCAR C. FARRALES AND DAISY C. FARRALESVILLAMAYOR, RESPONDENTS.
DECISION
ABAD, J.:
This case is about a) the need, when establishing the jurisdiction of the court over an
action for forcible entry, for plaintiff to allege in his complaint prior physical possession of
the property and b) the need for plaintiff to prove as well the fact of such prior physical
possession.
The Facts and the Case
Petitioner Servillano Abad claims that on August 6, 2002 he and his wife, Dr. Estrella E.
Gavilan-Abad, bought a 428-square meter registered property on 7 Administration St.,
GSIS Village, Project 8, Quezon City,[1] from Teresita, Rommel, and Dennis Farrales. The
latter were the wife and sons, respectively, of the late brother of respondents Oscar
Farrales (Oscar) and Daisy Farrales-Villamayor (Daisy).[2] Teresita operated a boarding
house on the property.[3]
Because the Abads did not consider running the boarding house themselves, they agreed
to lease the property back to Teresita for P30,000.00 a month so she could continue with

her business.[4] But, although the lease had a good start, Teresita suddenly abandoned the
boarding house,[5] forcing the Abads to take over by engaging the services of Bencio Duran,
Teresita's helper, to oversee the boarding house business.[6]
On December 7, 2002, Dr. Abad went to the boarding house to have certain damage to
some toilets repaired. While she was attending to the matter, she also hired house
painters to give the boarding house fresh coat of paint.[7] On December 8, 2002 Oscar and
Daisy came, accompanied by two men, and forcibly took possession of the boarding
house. Frightened, the painters called the Abads who immediately sought police help. The
Abads were later appeased, however, when they learned that the intruders left the place.
Two days later or on December 10, 2002, the day the Abads left for abroad, Oscar and
Daisy forcibly entered and took possession of the property once again. Because of this, on
March 10, 2003 petitioner Servillano Abad (Abad) filed a complaint[8] for forcible entry
against the two before the Metropolitan Trial Court (MeTC) of Quezon City.[9]
Oscar and Daisy vehemently denied that they forcibly seized the place. They claimed
ownership of it by inheritance. They also claimed that they had been in possession of the
same from the time of their birth.[10] That Oscar had been residing on the property since
1967 as attested to by a March 31, 2003 certification issued by Barangay Bahay Toro.[11]
While the defendants admitted that Daisy herself ceased to reside on the property as early
as 1986, they pointed out that she did not effectively give up her possession. Oscar and
Daisy further claimed that when their parents were still alive, the latter mortgaged the
property to a bank to secure a loan. After their mother passed away, they decided to
lease portions of the property to help pay the loan. Daisy managed the operation of the
boarding house.[12] To bolster their claim, Oscar and Daisy presented copies of rental
receipts[13] going back from 2001 to 2003. They would not have been able to lease the
rooms unless they were in possession.[14]
Further, Oscar and Daisy asked the MeTC to dismiss the action on the ground of failure of
Abad to show that he and his wife enjoyed prior physical possession of the property, an
essential requisite in forcible entry cases. Abad's allegation that he and his wife
immediately leased the property after they bought it was proof that they were never in
possession of it for any length of time.[15]
On March 30, 2005 the MeTC rendered a decision[16] in favor of Abad, stating that Oscar
and Daisy could not acquire ownership of the property since it was registered. And, as
owner, Abad was entitled to possession.
Disagreeing with the MeTC, Oscar and Daisy went up to the Regional Trial Court (RTC) of
Quezon City. In a decision17 dated October 26, 2005, the RTC affirmed the decision of the
MeTC in its totality. It held that Oscar and Daisy could no longer impugn the jurisdiction of
the MeTC over the action since they raised the ground of Abad's failure to allege prior
physical possession in his complaint for the first time on appeal. Besides, said the RTC,
since the complaint alleged that Servillano owned the property, it may be presumed that
he also had prior possession of it. No evidence to the contrary having been presented, the
presumption stood.

Abad moved for immediate execution[18] and partial reconsideration[19] of the decision with
respect to his claim for attorney's fees, exemplary damages, and reasonable rents. For
their part, Oscar and Daisy sought reconsideration[20] of the RTC decision and moved to
strike out Abad's motions.[21] On December 1, 2005 the RTC issued an Order,[22] granting
Abad's motion for immediate execution that would place him in possession and ordering
the immediate release to him of the P390,000.00 supersedeas bond that Oscar and Daisy
posted in the case. Further, the RTC partially reconsidered its decision by awarding
attorney's fees of P20,000.00 to Abad. Oscar and Daisy moved for the reconsideration of
this order.[23] In an Order dated December 9, 2005, the RTC denied the motion for
reconsideration filed by Oscar and Daisy of its October 26, 2005 Decision on the ground of
non-compliance with Section 4, Rule 15 of the Rules of Court.
Undaunted, Oscar and Daisy filed a petition for review[24] with the Court of Appeals
(CA). On March 8, 2007 the CA rendered a decision,[25] annulling the decisions and orders
of both the MeTC and the RTC on the ground of lack of jurisdiction. The CA pointed out
that Abad merely alleged in his complaint that he leased the property to Teresita after he
and his wife bought the same and that, thereafter, Oscar and Daisy forcibly entered the
same. Since Abad did not make the jurisdictional averment of prior physical possession,
the MeTC did not acquire jurisdiction over his action. Further, Oscar and Daisy ably proved
actual possession from 1967 through the barangay certification. Since the MeTC had no
jurisdiction over the case, all the proceedings in the case were void.[26]
Abad moved for reconsideration but the CA denied the same,[27] hence, in the present
petition for review.[28]
Questions Presented
The case presents the following questions:
1. Whether or not Abad sufficiently alleged in his complaint the jurisdictional fact of prior
physical possession of the disputed property to vest the MeTC with jurisdiction over his
action; and
2. In the affirmative, whether or not Abad sufficiently proved that he enjoyed prior
physical possession of the property in question.
The Court's Rulings
Two allegations are indispensable in actions for forcible entry to enable first level courts to
acquire jurisdiction over them: first, that the plaintiff had prior physical possession of the
property; and,second, that the defendant deprived him of such possession by means of
force, intimidation, threats, strategy, or stealth.[29]
There is no question that Abad made an allegation in his complaint that Oscar and Daisy
forcibly entered the subject property. The only issue is with respect to his allegation, citing
such property as one "of which they have complete physical and material possession of the
same until deprived thereof." Abad argues that this substantially alleges plaintiffs prior
physical possession of the property before the dispossession, sufficient to confer on the
MeTC jurisdiction over the action. The Court agrees. The plaintiff in a forcible entry suit is

not required to use in his allegations the exact terminology employed by the rules. It is
enough that the facts set up in the complaint show that dispossession took place under
the required conditions.[30]
It is of course not enough that the allegations of the complaint make out a case for forcible
entry. The plaintiff must also be able to prove his allegations. He has to prove that he had
prior physical possession[31] for this gives him the security that entitles him to remain in
the property until a person with a better right lawfully ejects him. [32]
Here, evidently, the Abads did not take physical possession of the property after buying
the same since they immediately rented it to Teresita who had already been using the
property as a boarding house. Abad claims that their renting it to Teresita was an act of
ownership that amounted to their acquiring full physical possession of the same.[33]
But the Abad's lease agreement with Teresita began only in September 2002.[34] Oscar and
Daisy, on the other hand, have proved that they had been renting spaces in the property
as early as 2001 as evidenced by receipts that they issued to their lessees. This was long
before they supposedly entered the property, using force, in 2002.

For these reasons, the Court finds that Servillano utterly failed to prove prior physical
possession in his favor. The absence of prior physical possession by the plaintiff in a
forcible entry warrants the dismissal of the complaint.[40]
WHEREFORE, the Court DENIES the petition for review of petitioner Servillano E. Abad
andAFFIRMS in their entirety the decision dated March 8, 2007 and resolution dated June
19, 2007 of the Court of Appeals in CA-G.R. SP 92617.
SO ORDERED.
__________________________________________________________________________
Republic of the Philippines
Supreme Court
Manila
FIRST DIVISION
SPOUSES MANUEL AND
FLORENTINA DEL ROSARIO,
Petitioners,

Of course, Abad pointed out that the cited receipts covered rents in a place called "D's
Condominium" in Sampaloc, Manila, and were only made to appear through handwritten
notations that they were issued for rooms in the property subject of the suit.[35] But a
close examination of the receipts shows that "D's Condominium" was just the name that
Daisy employed in her business of renting rooms. The receipts did not necessarily describe
another place. Indeed, they provided blank spaces for describing as the subject of rent the
property subject of this case. And, except for Abad's bare claim that Teresita and his sons
had long been in possession before they sold it to him and his wife, he offered no evidence
to show that this was in fact the case.
Abad assails as irregularly issued the barangay certification that Oscar had been residing
on the subject property since 1967. He claims that it could have been issued as a mere
favor to a friend, the barangay chairman having been Oscar's childhood playmate [36] But
Abad has no proof of these allegations. He has not overcome the presumption that the
barangay chairman performed his official duty and acted regularly in issuing such
certification.[37]
Finally, Abad argued that with the title to the property in his name, he has in his favor the
right to the actual, physical, exclusive, continuous, and peaceful possession of the same.
He pointed out that his possession de facto began from the time of the signing and
notarization of the deed of absolute sale, becoming de jure once the title was issued in his
name.[38]
It is of course true that a property owner has the right to exercise the attributes of
ownership, one of which is the right to possess the property. But Abad is missing the point.
He is referring to possession flowing from ownership which is not in issue in this case.
Possession in forcible entry cases means nothing more than physical possession or
possession de facto, not legal possession in the sense contemplated in civil law. Only prior
physical possession, not title, is the issue.[9]

G.R. No. 170575

Present:
CORONA, C.J., Chairperson,
- versus -

VELASCO, JR.,
LEONARDO-DE CASTRO,
DEL CASTILLO, and
PEREZ, JJ.

GERRY ROXAS FOUNDATION, INC.,

Respondent.

Promulgated:
June 8, 2011

x - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- - - - - - - - - - - - - - - - - - - x
DECISION
DEL CASTILLO, J.:
The allegations in the complaint and the reliefs prayed for are the determinants of the
nature of the action[1] and of which court has jurisdiction over the action.[2]
This Petition for Review on Certiorari assails the April 26, 2005 Decision[3] of the Court of
Appeals (CA) in CA-G.R. SP No. 87784 which dismissed the Petition for Review before it. Also assailed
is the CA Resolution[4] dated November 15, 2005 denying the Motion for Reconsideration thereto.
Factual Antecedents
The controversy between petitioners Manuel and Florentina Del Rosario

and respondent Gerry Roxas Foundation Inc. emanated from a Complaint for Unlawful Detainer filed
by the former against the latter, the surrounding circumstances relative thereto as summarized by
the CA in its assailed Decision are as follows:
The petitioner Manuel del Rosario appears to be the registered
owner of Lot 3-A of Psd-301974 located in Roxas City which is described in and
covered by Transfer Certificate of Title No. T-18397 of the Registry of Deeds for
the City of Roxas.
Sometime in 1991, the respondent, as a legitimate foundation, took
possession and occupancy of said land by virtue of a memorandum of
agreement entered into by and between it and the City ofRoxas. Its possession
and occupancy of said land is in the character of being lessee thereof.
In February and March 2003, the petitioners served notices upon the
respondent to vacate the premises of said land. The respondent did not heed
such notices because it still has the legal right to continue its possession and
occupancy of said land.[5]
On July 7, 2003, petitioners filed a Complaint[6] for Unlawful Detainer against the
respondent before the Municipal Trial Court in Cities (MTCC) of Roxas City, docketed as Civil Case No.
V-2391. Said complaint contains, among others, the following significant allegations:
3. Plaintiffs are the true, absolute and registered owner[s] of a parcel
of land, situated at Dayao, Roxas City and covered by and described in Transfer
Certificate of Title No. 18397 issued to the plaintiffs by the Register of Deeds
for Roxas City as evidenced by a xerox copy thereof which is hereto attached as
Annex A.

despite the lapse of the fifteen-day period specified in the said demand
letters. Consequently, defendant is unlawfully withholding possession of the
subject property from the plaintiffs, who are the owners thereof.[7]
Upon service of summons, respondent filed its Answer[8] dated July 31, 2003 where it
averred that:
3. The defendant ADMITS the allegations set forth in paragraph 4 of
the Complaint to the effect that the defendant took full control and possession
of the subject property, developed the same and has been using the premises in
accordance with its agreements with the City of Roxas and the purposes of the
defendant corporation without any objection or opposition of any kind on the
part of the plaintiffs for over twenty-two long years; the defendant specifically
DENIES the allegations contained in the last part of this paragraph 4 of the
Complaint that the defendant has used the property leased for commercial
purposes, the truth of the matter being that the defendant has used and [is] still
using the property only for civic non-profit endeavors hewing closely to
purposes of the defendant Gerry Roxas Foundation Inc.,inter alia, devoted to
general welfare, protection, and upliftment of the people of Roxas City, Capiz,
and in Panay Island, and elsewhere in the Philippines; that the Foundation has
spent out of its own funds for the compliance of its avowed aims and purposes,
up to the present, more than P25M, and that all the improvements, including a
beautiful auditorium built in the leased premises of the Foundation shall accrue
to the CITY (of Roxas), free from any compensation whatsoever, upon the
expiration of this Lease (Memorandum of Agreement, Annex 2 hereof),
eighteen (18) years hence;
xxxx

4. Sometime in 1991, without the consent and authority of the

plaintiffs, defendant took full control and possession of the subject property,
developed the same and use[d] it for commercial purposes.
xxxx
7. Plaintiffs have allowed the defendant for several years, to make use
of the land without any contractual or legal basis. Hence, defendants possession
of the subject property is only by tolerance.

5. The defendant specifically DENIES the allegations set forth in

paragraph 7 of the Complaint, the truth being that the defendant took
possession of the subject property by virtue of Memorandums of Agreement,
photo-copies of which are hereto attached as Annexes 1 and 2 and made
integral parts hereof, entered into by defendant and the City of Roxas, which is
the true and lawful owner thereof; thus, the possession of the subject property
by the defendant foundation is lawful, being a lessee thereof;
xxxx

8. But [plaintiffs] patience has come to its limits. Hence, sometime in

the last quarter of 2002, plaintiffs made several demands upon said defendant
to settle and/or pay rentals for the use of the property.
xxxx
10. Notwithstanding receipt of the demand letters, defendant failed
and refused, as it continues to fail and refuse to pay reasonable monthly rentals
for the use and occupancy of the land, and to vacate the subject premises

8. The defendant ADMITS the allegations set forth in paragraph 10 of

the Complaint that defendant refused to pay monthly rental to the plaintiffs and
to vacate the premises, but specifically DENIES the rest of the allegations
thereof, the truth being that defendant has no obligation whatsoever, to the
plaintiffs, as they are neither the owners or lessors of the land occupied by
defendant;
xxxx

10

As and by way of
AFFIRMATIVE DEFENSE
The defendant repleads the foregoing allegations, and avers further
that:
12. The plaintiffs have no cause of action against defendant.
The leased property does not belong to the plaintiffs. The property
covered by Transfer Certificate of Title No. T-18397, [is] occupied by the
[defendant] as [lessee] of the City of Roxas since 1991, the latter having
acquired it by purchase from the plaintiffs way back on February 19, 1981, as
evidenced by the Deed of Absolute Sale which is hereto attached as Annex 3
and made an integral part hereof.While, admittedly, the said certificate of title is
still in the name of the plaintiffs, nevertheless, the ownership of the property
covered therein has already transferred to the City of Roxas upon its delivery to
it. Article 1496 of the Civil Code provides that, 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. It
is also provided under Article 1498 of the Civil Code that, when the sale is made
through a public instrument, the execution thereof shall be equivalent to the
delivery of the thing, which is the object of the contract, if from the deed the
contrary does not appear or cannot clearly be inferred. Upon execution of the
Deed of Absolute Sale (Annex 3), the plaintiffs have relinquished ownership of
the property subject thereof in favor of the vendee, City of Roxas. Necessarily,
the possession of the property subject of the said Deed of Absolute Sale now
pertains to the City of Roxas and the plaintiffs have no more right, whatsoever,
to the possession of the same. It is defendant foundation by virtue of the
Memorandums of Agreement (Annexes 1 and 2 hereof), which has the legal
right to have possession of the subject property;[9]
After the MTCC issued an Order setting the case for preliminary conference, respondent
filed on October 20, 2003 a Motion to Resolve its Defenses on Forum Shopping and Lack of Cause of
Action. Records show that before the instant case was filed, the City of Roxas had already filed a case
against petitioners for Surrender of Withheld Duplicate Certificate Under Section 107, [Presidential
Decree No.] 1529 docketed as Special Case No. SPL-020-03 with the Regional Trial Court (RTC)
of Roxas City. Subsequently, on October 27, 2003, petitioners filed their Opposition to the said
Motion.
Ruling of the Municipal Trial Court in Cities
On November 24, 2003, the MTCC issued an Order[10] resolving the respondents
Motion. In the said Order, the MTCC held that:

The plaintiffs [have] no cause of action against herein defendant. The

defendant is the lessee of the City of Roxas of the parcel of land in
question. There has been no previous contractual relationship between the
plaintiffs Del Rosarios and the defendant Gerry Roxas Foundation, Inc. affecting
the title of the land leased by the [Gerry] Roxas Foundation. The Gerry Roxas
Foundation, Inc. has not unlawfully withheld the possession of the land it is
leasing from its lessor. Its right to the physical possession of the land leased by it
from the City of Roxas subsists and continues to subsist until the termination of
the contract of lease according to its terms and pursuant to law.
The defendant had presented as its main defense that the property
was already sold by the plaintiffs to the present lessor of the property, the City
of Roxas thru a Deed of Absolute Sale dated February 19, 1981 executed by
herein [plaintiff] spouses as vendors.
Plaintiffs had not directly and specifically shown that the purported
Deed of Absolute Sale does not exist; rather, they contend that said document is
merely defective. They had not even denied the signatories to the said Contract
of Sale; specifically the authenticity of the spouses-plaintiffs signatures; all that
plaintiffs did merely referred to it as null and void and highly questionable
without any specifications.
When the parties pleadings fail to tender any issue of fact, either
because all the factual allegations have been admitted expressly or impliedly; as
when a denial is a general denial; there is no need of conducting a trial, since
there is no need of presenting evidence anymore. The case is then ripe for
judicial determination, either through a judgment on the pleadings (Rules of
Court, Rule 34) or by summary judgment under Rule 35, Rules of Court.
In the instant case, plaintiffs alleged that sometime in 1991, without
the consent and authority of the plaintiffs, defendant took full control and
possession of the subject property, developed the same and use[d] it for
commercial purposes. x x x for so many years, plaintiffs patiently waited for
someone to make representation to them regarding the use of the subject
property, but the same never happened.Plaintiff[s] have allowed the defendant
for several years, to make use of the land without any contractual or legal
basis. Hence, defendants possession of the subject property is only by tolerance.
xxxx
Defendant admits the allegations of the plaintiffs that the defendant
took full control and possession of the subject property, developed the same
and has been using the premises in accordance with its agreements with the
City of Roxas and the purposes of the defendant corporation without any
objection or opposition of any kind on the part of the plaintiffs for over twentytwo long years.

11

That the defendants possession of the subject property is by virtue of

a contract of lease entered into by the defendant foundation with the City of
Roxas which is the true and lawful owner, the latter having acquired said
property by virtue of a Deed of Absolute Sale as early as February 19, 1981, long
before the defendant foundations occupation of the property. In Alcos v. IAC
162 SCRA 823 (1988), Buyers immediate possession and occupation of the
property was deemed corroborative of the truthfulness and authenticity of the
deed of sale.
WHEREFORE, although this Court finds the defense on forum
shopping interposed by the defendant to be untenable and unmeritorious, and
hence, denied; this Court still finds the pleadings filed by the plaintiffs-spouses to
be without a cause of action and hence, dismisses this instant complaint. With
cost against the plaintiffs.

The allegations in petitioners

Complaint
constitute
judicial
admissions.
Petitioners alleged in their Complaint before the MTCC, among others, that: (1) sometime
in 1991, without their consent and authority, respondent took full control and possession of the
subject property, developed the same and used it for commercial purposes; and (2) they allowed the
respondent for several years, to make use of the land without any contractual or legal
basis. Petitioners thus conclude that respondents possession of subject property is only by tolerance.
Section 4, Rule 129 of the Rules of Court provides that:
Sec. 4. Judicial admissions. An admission, verbal or written, made by a
party in the course of the proceedings in the same case, does not require
proof. x x x

SO ORDERED.[11]
Ruling of the Regional Trial Court
On appeal, the RTC of Roxas City, Branch 17 rendered a Decision[12] dated July 9, 2004 affirming the
MTCC Order.
Ruling of the Court of Appeals
Aggrieved, petitioners filed with the CA a Petition for Review. However, the CA, in a
Decision[13] dated April 26, 2005, dismissed the petition and affirmed the assailed Decision of the RTC.
Petitioners timely filed a Motion for Reconsideration[14] which was, however, denied in a
Resolution[15] dated November 15, 2005.
Issues
Still undaunted, petitioners now come to this Court on a Petition for Review
on Certiorari raising the following issues:
I. Whether x x x in determining if there is a case for unlawful detainer, a court
should limit itself in interpreting a single phrase/allegation in the
complaint; and,
II. Whether x x x there exists an unlawful detainer in this case.[16]

Our Ruling
The petition is bereft of merit.

A judicial admission is one so made in pleadings filed or in the progress of a trial as to

dispense with the introduction of evidence otherwise necessary to dispense with some rules of
practice necessary to be observed and complied with.[17] Correspondingly, facts alleged in the
complaint are deemed admissions of the plaintiff and binding upon him.[18]The allegations,
statements or admissions contained in a pleading are conclusive as against the pleader.[19]
In this case, petitioners judicially admitted that respondents took control and possession of
subject property without their consent and authority and that respondents use of the land was
without any contractual or legal basis.
Nature of the action is determined by
the judicial admissions in the
Complaint.
In Spouses Huguete v. Spouses Embudo,[20] citing Caiza v. Court of Appeals,[21] this Court
held that what determines the nature of an action as well as which court has jurisdiction over it are
the allegations of the complaint and the character of the relief sought.
This Court, in Sumulong v. Court of Appeals,[22] differentiated the distinct causes of action in forcible
entry vis--vis unlawful detainer, to wit:
Forcible entry and unlawful detainer are two distinct causes of action
defined in Section 1, Rule 70 of the Rules of Court. In forcible entry, one is
deprived of physical possession of any land or buildingby means of force,
intimidation, threat, strategy, or stealth. In unlawful detainer, one unlawfully
withholds possession thereof after the expiration or termination of his right to
hold possession under any contract, express or implied. In forcible entry,
the possession is illegal from the beginning and the only issue is who has the
prior possession de facto. In unlawful detainer, possession was originally lawful
but became unlawful by the expiration or termination of the right to possess
and the issue of rightful possession is the one decisive, for in such action, the

12

defendant is the party in actual possession and the plaintiff's cause of action is
the termination of the defendant's right to continue in possession.[23]

The words by force, intimidation, threat, strategy or stealth shall include every situation or
condition under which one person can wrongfully enter upon real property and exclude another,
who has had prior possession, therefrom.[24] The foundation of the action is really the forcible
exclusion of the original possessor by a person who has entered without right.[25]
The act of going on the property and excluding the lawful possessor therefrom necessarily
implies the exertion of force over the property, and this is all that is necessary.[26]The employment of
force, in this case, can be deduced from petitioners allegation that respondent took full control and
possession of the subject property without their consent and authority.
Stealth, on the other hand, is defined as any secret, sly, or clandestine act to avoid
discovery and to gain entrance into or remain within residence of another without
permission,[27] while strategy connotes the employment of machinations or artifices to gain
possession of the subject property.[28] The CA found that based on the petitioners allegations in their
complaint, respondents entry on the land of the petitioners was by stealth x x x.[29] However, stealth
as defined requires a clandestine character which is not availing in the instant case as the entry of the
respondent into the property appears to be with the knowledge of the petitioners as shown by
petitioners allegation in their complaint that [c]onsidering the personalities behind the defendant
foundation and considering further that it is plaintiffs nephew, then the vice-mayor, and now the
Mayor of the City of Roxas Antonio A. del Rosario, although without any legal or contractual right,
who transacted with the foundation, plaintiffs did not interfere with the activities of the foundation
using their property.[30] To this Courts mind, this allegation if true, also illustrates strategy.
Taken in its entirety, the allegations in
the Complaint establish a cause of
action for forcible entry, and not for
unlawful detainer.
In forcible entry, one is deprived of physical possession of any land or building by means of
force, intimidation, threat, strategy, or stealth.[31] [W]here the defendants possession of the property
is illegal ab initio, the summary action for forcible entry (detentacion) is the remedy to recover
possession.[32]
In their Complaint, petitioners maintained that the respondent took possession and
control of the subject property without any contractual or legal basis.[33] Assuming that these
allegations are true, it hence follows that respondents possession was illegal from the very
beginning. Therefore, the foundation of petitioners complaint is one for forcible entry that is the
forcible exclusion of the original possessor by a person who has entered without right.[34] Thus, and
as correctly found by the CA, there can be no tolerance as petitioners alleged that respondents
possession was illegal at the inception.[35]
Corollarily, since the deprivation of physical possession, as alleged in

petitioners Complaint and as earlier discussed, was attended by strategy and force, this Court finds
that the proper remedy for the petitioners was to file a Complaint for Forcible Entry and not the
instant suit for unlawful detainer.
Petitioners should have filed a
Complaint for Forcible Entry within the
reglementary one-year period from
the time of dispossession.

Petitioners likewise alleged in their Complaint that respondent took possession and
occupancy of subject property in 1991. Considering that the action for forcible entry must be filed
within one year from the time of dispossession,[36] the action for forcible entry has already prescribed
when petitioners filed their Complaint in 2003. As a consequence, the Complaint failed to state a
valid cause of action against the respondent.
In fine, the MTCC properly dismissed the Complaint, and the RTC and the CA correctly
affirmed said order of dismissal.
WHEREFORE, the petition is DENIED. The Decision dated April 26, 2005 and the Resolution
dated November 15, 2005 of the Court of Appeals in CA-G.R. SP No. 87784 are AFFIRMED.
SO ORDERED.
SECOND DIVISION
[G.R. No. 151369, March 23 : 2011]
ANITA MONASTERIO-PE AND THE SPOUSES ROMULO TAN AND EDITHA PE-TAN,
PETITIONERS, VS. JOSE JUAN TONG, HEREIN REPRESENTED BY HIS ATTORNEY-IN-FACT,
JOSE Y. ONG, RESPONDENT.
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court
seeking the reversal and nullification of the Decision[1] and Order,[2] respectively dated
October 24, 2001 and January 18, 2002, of the Regional Trial Court (RTC) of Iloilo City,
Branch 24.
The instant petition stemmed from an action for ejectment filed by herein respondent
Jose Juan Tong (Tong) through his representative Jose Y. Ong (Ong) against herein
petitioners Anita Monasterio-Pe (Anita) and the spouses Romulo Tan and Editha Pe-Tan
(Spouses Tan). The suit was filed with the Municipal Trial Court in Cities (MTCC), Branch 3,
Iloilo City and docketed as Civil Case No. 2000(92).
In the Complaint, it was alleged that Tong is the registered owner of two parcels of land
known as Lot Nos. 40 and 41 and covered by Transfer Certificate of Title (TCT) Nos. T-9699
and T-9161, together with the improvements thereon, located at Barangay Kauswagan,
City Proper, Iloilo City; herein petitioners are occupying the house standing on the said
parcels of land without any contract of lease nor are they paying any kind of rental and

13

that their occupation thereof is simply by mere tolerance of Tong; that in a letter dated
December 1, 1999, Tong demanded that respondents vacate the house they are
occupying, but despite their receipt of the said letter they failed and refused to vacate the
same; Tong referred his complaint to the Lupon of Barangay Kauswagan, to no avail.[3]
In their Answer with Defenses and Counterclaim, herein petitioners alleged that Tong is
not the real owner of the disputed property, but is only a dummy of a certain alien named
Ong Se Fu, who is not qualified to own the said lot and, as such, Tong's ownership is null
and void; petitioners are the true and lawful owners of the property in question and by
reason thereof they need not lease nor pay rentals to anybody; a case docketed as CA-G.R.
CV No. 52676 (RTC Civil Case No. 20181) involving herein petitioner Pe and respondent is
pending before the Court of Appeals (CA) where the ownership of the subject property is
being litigated; respondent should wait for the resolution of the said action instead of
filing the ejectment case; petitioners also claimed that there was, in fact, no
proper barangay conciliation as Tong was bent on filing the ejectment case before
conciliation proceedings could be validly made.[4]

petitioners would readily show that they are raising factual issues the resolution of which
requires the examination of evidence. Certainly, issues which are being raised in the
present petition, such as the questions of whether the issue of physical possession is
already included as one of the issues in a case earlier filed by petitioner Anita and her
husband, as well as whether respondent complied with the law and rules
on barangay conciliation, are factual in nature.
Moreover, the appeal under Rule 45 of the said Rules contemplates that the RTC rendered
the judgment, final order or resolution acting in its original jurisdiction.[8] In the present
case, the assailed Decision and Order of the RTC were issued in the exercise of its
appellate jurisdiction.
Thus, petitioners pursued the wrong mode of appeal when they filed the present petition
for review on certiorari with this Court. Instead, they should have filed a petition for
review with the CA pursuant to the provisions of Section 1,[9] Rule 42 of the Rules of Court.
On the foregoing bases alone, the instant petition should be denied.

On March 19, 2001, the MTCC rendered judgment in favor of herein respondent, the
dispositive portion of which reads as follows:
WHEREFORE, judgment is rendered, finding the defendants Anita Monasterio-Pe, and
Spouses Romulo Tan and Editha Pe-Tan to be unlawfully withholding the property in
litigation, i.e., Lot. Nos. 40 and 41 covered by TCT Nos. T-9699 and 9161, respectively,
together with the buildings thereon, located at Brgy. Kauswagan, Iloilo City Proper, and
they are hereby ordered together with their families and privies, to vacate the premises
and deliver possession to the plaintiff and/or his representative.

In any case, the instant petition would still be denied for lack of merit, as discussed below.
In their first assigned error, petitioners contend that the RTC erred in holding that the law
authorizes an attorney-in-fact to execute the required certificate against forum shopping
in behalf of his or her principal. Petitioners argue that Tong himself, as the principal, and
not Ong, should have executed the certificate against forum shopping.
The Court is not persuaded.

The defendants are likewise ordered to pay plaintiff reasonable compensation for the use
and occupancy of the premises in the amount of P15,000.00 per month starting January,
2000 until they actually vacate and deliver possession to the plaintiff and attorney's fees in
the amount of P20,000.00.
Costs against the defendants.
SO DECIDED.[5]
Aggrieved by the above-quoted judgment, petitioners appealed the decision of the MTCC
with the RTC of Iloilo City.
In its presently assailed Decision, the RTC of Iloilo City, Branch 24 affirmed in its entirety
the appealed decision of the MTCC.
Hence, the instant petition for review on certiorari.
At the outset, it bears emphasis that in a petition for review on certiorari under Rule 45 of
the Rules of Court, only questions of law may be raised by the parties and passed upon by
this Court.[6] It is a settled rule that in the exercise of this Court's power of review, it does
not inquire into the sufficiency of the evidence presented, consistent with the rule that
this Court is not a trier of facts.[7] In the instant case, a perusal of the errors assigned by

It is true that the first paragraph of Section 5,[10] Rule 7 of the Rules of Court, requires that
the certification should be signed by the "petitioner or principal party" himself. The
rationale behind this is because only the petitioner himself has actual knowledge of
whether or not he has initiated similar actions or proceedings in different courts or
agencies.[11] However, the rationale does not apply where, as in this case, it is the
attorney-in-fact who instituted the action.[12] Such circumstance constitutes reasonable
cause to allow the attorney-in-fact to personally sign the Certificate of Non-Forum
Shopping. Indeed, the settled rule is that the execution of the certification against forum
shopping by the attorney-in-fact is not a violation of the requirement that the parties must
personally sign the same.[13] The attorney-in-fact, who has authority to file, and who
actually filed the complaint as the representative of the plaintiff, is a party to the
ejectment suit.[14] In fact, Section 1,[15] Rule 70 of the Rules of Court includes the
representative of the owner in an ejectment suit as one of the parties authorized to
institute the proceedings. In the present case, there is no dispute that Ong is respondent's
attorney-in-fact. Hence, the Court finds that there has been substantial compliance with
the rules proscribing forum shopping.
Petitioners also aver that the certificate against forum shopping attached to the complaint
in Civil Case No. 2000(92) falsely stated that there is no other case pending before any
other tribunal involving the same issues as those raised therein, because at the time the
said complaint was filed, Civil Case No. 20181 was, in fact, still pending with the CA (CA-

14

G.R. CV No. 52676), where the very same issues of ejectment and physical possession
were already included.
Corollarily, petitioners claim that the MTCC has no jurisdiction over Civil Case No. 2000(92)
on the ground that the issue of physical possession raised therein was already included by
agreement of the parties in Civil Case No. 20181. As such, petitioners assert that
respondent is barred from filing the ejectment case, because in doing so he splits his cause
of action and indirectly engages in forum shopping.
The Court does not agree.
The Court takes judicial notice of the fact that the disputed properties, along with three
other parcels of land, had been the subject of two earlier cases filed by herein petitioner
Anita and her husband Francisco against herein respondent and some other persons. The
first case is for specific performance and/or rescission of contract and reconveyance of
property with damages. It was filed with the then Court of First Instance (CFI) of Iloilo City
and docketed as Civil Case No. 10853. The case was dismissed by the CFI. On appeal, the
Intermediate Appellate Court (IAC) upheld the decision of the trial court. When the case
was brought to this Court,[16] the decision of the IAC was affirmed. Subsequently, the
Court's judgment in this case became final and executory per Entry of Judgment issued on
May 27, 1991.
Subsequently, in 1992, the Spouses Pe filed a case for nullification of contract, cancellation
of titles, reconveyance and damages with the RTC of Iloilo City. This is the case presently
cited by petitioners. Eventually, the case, docketed as Civil Case No. 20181, was dismissed
by the lower court on the ground of res judicata. The RTC held that Civil Case No. 10853
serves as a bar to the filing of Civil Case No. 20181, because both cases involve the same
parties, the same subject matter and the same cause of action. On appeal, the CA affirmed
the dismissal of Civil Case No. 20181. Herein petitioner Anita assailed the judgment of the
CA before this Court, but her petition for review oncertiorari was denied via a
Resolution[17] dated January 22, 2003. On June 25, 2003, the said Resolution became final
and executory. The Court notes that the case was disposed with finality without any
showing that the issue of ejectment was ever raised. Hence, respondent is not barred from
filing the instant action for ejectment.
In any case, it can be inferred from the judgments of this Court in the two aforementioned
cases that respondent, as owner of the subject lots, is entitled to the possession thereof.
Settled is the rule that the right of possession is a necessary incident of
ownership.[18] Petitioners, on the other hand, are consequently barred from claiming that
they have the right to possess the disputed parcels of land, because their alleged right is
predicated solely on their claim of ownership, which is already effectively debunked by the
decisions of this Court affirming the validity of the deeds of sale transferring ownership of
the subject properties to respondent.
Petitioners also contend that respondent should have filed an accion publiciana and not an
unlawful detainer case, because the one-year period to file a case for unlawful detainer
has already lapsed.

The Court does not agree.

Sections 1 and 2, Rule 70 of the Rules of Court provide:
Section 1. Who may institute proceedings and when. - Subject to the provisions of the next
succeeding section, a person deprived of the possession of any land or building by force,
intimidation, threat, strategy, or stealth, or a lessor, vendor, vendee, or other person
against whom the possession of any land or building is unlawfully withheld after the
expiration or termination of the right to hold possession, by virtue of any contract, express
or implied, or the legal representatives or assigns of any such lessor, vendor, vendee, or
other person, may, at any time within one (1) year after such unlawful deprivation or
withholding of possession, bring an action in the proper Municipal Trial Court against the
person or persons unlawfully withholding or depriving of possession, or any person or
persons claiming under them, for the restitution of such possession, together with
damages and costs.
Section 2. Lessor to proceed against lessee only after demand. - Unless otherwise
stipulated, such action by the lessor shall be commenced only after demand to pay or
comply with the conditions of the lease and to vacate is made upon the lessee, or by
serving written notice of such demand upon the person found on the premises, or by
posting such notice on the premises if no person be found thereon, and the lessee fails to
comply therewith after fifteen (15) days in the case of land or five (5) days in the case of
buildings.
Respondent alleged in his complaint that petitioners occupied the subject property by his
mere tolerance. While tolerance is lawful, such possession becomes illegal upon demand
to vacate by the owner and the possessor by tolerance refuses to comply with such
demand.[19] Respondent sent petitioners a demand letter dated December 1, 1999 to
vacate the subject property, but petitioners did not comply with the demand. A person
who occupies the land of another at the latter's tolerance or permission, without any
contract between them, is necessarily bound by an implied promise that he will vacate
upon demand, failing which a summary action for ejectment is the proper remedy against
him.[20] Under Section 1, Rule 70 of the Rules of Court, the one-year period within which a
complaint for unlawful detainer can be filed should be counted from the date of demand,
because only upon the lapse of that period does the possession become
unlawful.[21] Respondent filed the ejectment case against petitioners on March 29, 2000,
which was less than a year from December 1, 1999, the date of formal demand. Hence, it
is clear that the action was filed within the one-year period prescribed for filing an
ejectment or unlawful detainer case.
Neither is the Court persuaded by petitioners' argument that respondent has no cause of
action to recover physical possession of the subject properties on the basis of a contract of
sale because the thing sold was never delivered to the latter.
It has been established that petitioners validly executed a deed of sale covering the
subject parcels of land in favor of respondent after the latter paid the outstanding account
of the former with the Philippine Veterans Bank.
Article 1498 of the Civil Code provides that when the sale is made through a public

15

instrument, the execution thereof shall be equivalent to the delivery of the thing which is
the object of the contract, if from the deed the contrary does not appear or cannot clearly
be inferred. In the instant case, petitioners failed to present any evidence to show that
they had no intention of delivering the subject lots to respondent when they executed the
said deed of sale. Hence, petitioners' execution of the deed of sale is tantamount to a
delivery of the subject lots to respondent. The fact that petitioners remained in possession
of the disputed properties does not prove that there was no delivery, because as found by
the lower courts, such possession is only by respondent's mere tolerance.
Lastly, the Court does not agree with petitioners' assertion that the filing of the unlawful
detainer case was premature, because respondent failed to comply with the provisions of
the law on barangay conciliation. As held by the RTC, Barangay Kauswagan City Proper,
through its Pangkat Secretary and Chairman, issued not one but two certificates to file
action after herein petitioners and respondent failed to arrive at an amicable settlement.
The Court finds no error in the pronouncement of both the MTCC and the RTC that any
error in the previous conciliation proceedings leading to the issuance of the first certificate
to file action, which was alleged to be defective, has already been cured by the MTCC's act
of referring back the case to the PangkatTagapagkasundo of Barangay Kauswagan for
proper conciliation and mediation proceedings. These subsequent proceedings led to the
issuance anew of a certificate to file action.
WHEREFORE, the instant petition is DENIED. The assailed Decision and Order of the
Regional Trial Court of Iloilo City, Branch 24, are AFFIRMED.
SO ORDERED.
Carpio, (Chairperson), Nachura, Brion,* and Abad, JJ., concur.
Endnotes:
Republic of the Philippines
Supreme Court
Manila
FIRST DIVISION
PEDRO ANGELES , Represented by
G.R. No. 157150
ADELINA T. ANGELES, Attorney-in Fact,
Petitioner,
Present:

- versus -

ESTELITA B. PASCUAL, MARIA THERESA

PASCUAL, NERISSA PASCUAL, IMELDA
PASCUAL, MA. LAARNI PASCUAL and
EDWIN PASCUAL,
Respondents.

CORONA, C.J., Chairperson,

LEONARDO-DE CASTRO,
BERSAMIN,
DEL CASTILLO, and
*
PEREZ, JJ.
Promulgated:

September 21, 2011

x-----------------------------------------------------------------------------------------x
RESOLUTION
BERSAMIN, J.:
Under appeal is the decision promulgated on January 31, 2002 in CA- G.R. CV No.
61600,[1] which involved a dispute about the true location of the respective lots of the
parties, with the respondents claiming that the petitioner had encroached on their lot but
the latter denying the encroachment.
Antecedents
Neighbors Regidor Pascual (Pascual) and Pedro Angeles (Angeles) were registered owners
of adjacent parcels of land located in Cabanatuan City. Pascual owned Lot 4, Block 2 (Lot 4)
of the consolidation-subdivision plan (LRC) Psd-951, a portion of the consolidation of Lots
1419-B-2B-3, 1419-B-2-B-4 and 1419-B-2-B-5, Psd- 9016, LGC (GLRO) Cadastral Record No.
94 covered by Transfer Certificate Title No. T-43707 of the Registry of Deeds of Nueva
Ecija;[2] Angeles owned Lot 5, Block 2 (Lot 5) of the same consolidation-subdivision plan
covered by TCT No. T-9459 of the Registry of Deeds of Nueva Ecija.[3] Each of them built a
house on his respective lot, believing all the while that his respective lot was properly
delineated. It was not until Metropolitan Bank and Trust Company (Metrobank), as the
highest bidder in the foreclosure sale of the adjacent Lot 3, Block 2 (Lot 3), caused the
relocation survey of Lot 3 that the geodetic engineer discovered that Pascuals house had
encroached on Lot 3. As a consequence, Metrobank successfully ejected Pascual.
In turn, Pascual caused the relocation survey of his own Lot 4 and discovered that Angeles
house also encroached on his lot. Of the 318 square meters comprising Lot 4, Angeles
occupied 252 square meters, leaving Pascual with only about 66 square meters. Pascual
demanded rentals for the use of the encroached area of Lot 4 from Angeles, or the
removal of Angeles house. Angeles refused the demand. Accordingly, Pascual sued
Angeles for recovery of possession and damages in the Regional Trial Court (RTC) in
Cabanatuan City.
In the course of the trial, Pascual presented Clarito Fajardo, the geodetic engineer who
had conducted the relocation survey and had made the relocation plan of Lot 4.[4] Fajardo
testified that Angeles house was erected on Lot 4. On the other hand, Angeles presented
Juan Fernandez, the geodetic engineer who had prepared the sketch plan relied upon by
Angeles to support his claim that there had been no encroachment.[5] However, Fernandez
explained that he had performed only a table work, that is, he did not actually go to the
site but based the sketch plan on the descriptions and bearings appearing on the TCTs of
Lot 4, Lot 5 and Lot 6; and recommended the conduct of a relocation survey.[6]
In its decision of November 3, 1998,[7] the RTC held that there was no dispute that Pascual
and Angeles were the respective registered owners of Lot 4 and Lot 5; that what was
disputed between them was the location of their respective lots; that Pascual proved
Angeles encroachment on Lot 4 by preponderant evidence; and that Pascual was entitled
to relief. The RTC thus disposed:
WHEREFORE, premises considered, judgment is rendered in favor of the
plaintiff and against the defendant as follows:

16

1)

2)

ordering the defendant or persons claiming right through

him to cause the removal of his house insofar as the same
occupies the portion of Lot 4, Block 2 (TCT No. T-43707), of
an area of 252 square meters, as particularly indicated in
the Sketch Plan (Exhibit C-1); and
and without pronouncement to damages in both the
complainant and counterclaim.

With Costs.

Angeles expectedly sought reconsideration, but the CA denied his motion on February 13,
2003.
Issues
Hence, Angeles appeals, assailing: (a) the credence the CA accorded to the testimony and
relocation plan of Fajardo as opposed to the survey plan prepared by Fernandez; and (b)
the options laid down by the CA, i.e., for Pascual either to buy the portion of Angeles
house or to sell to Angeles the portion of his land occupied by Angeles were contrary to its
finding of good faith.

SO ORDERED.[8]

Ruling
The petition lacks merit.

Angeles appealed to the CA.

On January 31, 2002, the CA affirmed the RTC,[9] and held that as between the findings of
the geodetic engineer (Fajardo) who had actually gone to the site and those of the other
(Fernandez) who had based his findings on the TCTs of the owners of the three lots, those
of the former should prevail. However, the CA, modifying the RTCs ruling, applied Article
448 of the Civil Code (which defined the rights of a builder, sower and planter in good
faith). The decision decreed thus:[10]
WHEREFORE, the decision appealed from is MODIFIED. Plaintiffsappellees are ordered to exercise within thirty (30) days from the
finality of this decision their option to either buy the portion of
defendant-appellants house on their Lot. No. 4, or to sell to defendantappellant the portion of their land on which his house stands. If
plaintiffs-appellees elect to sell the land or buy the improvement, the
purchase price must be at the prevailing market price at the time of
payment. If buying the improvement will render the defendantappellants house useless, then plaintiffs-appellees should sell the
encroached portion of their land to defendant-appellant. If plaintiffsappellees choose to sell the land but defendant-appellant is unwilling or
unable to buy, then the latter must vacate the subject portion and pay
reasonable rent from the time plaintiffs-appellees made their choice up
to the time they actually vacate the premises. But if the value of the
land is considerably more than the value of the improvement, then
defendant-appellant may elect to lease the land, in which case the
parties shall agree upon the terms of the lease. Should they fail to agree
on said terms, the court of origin is directed to fix the terms of the
lease. From the moment plaintiffs-appellees shall have exercised their
option, defendant-appellant shall pay reasonable monthly rent up to
the time the parties agree on the terms of the lease or until the court
fixes such terms. This is without prejudice to any future compromise
which may be agreed upon by the parties.
SO ORDERED.

I
The Court, not being a trier of facts,
cannot review factual issues
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
appeal by certiorari, therefore, only questions of law may be raised, because the Supreme
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. The resolution of factual
issues is the function of lower courts, whose findings thereon are received with respect
and are binding on the Supreme Court subject to certain exceptions.[11] A question, to be
one of law, must not involve an examination of the probative value of the evidence
presented by the litigants or any of them. There is a question of law in a given case when
the doubt or difference arises as to what the law is on certain state of facts; there is a
question of fact when the doubt or difference arises as to the truth or falsehood of alleged
facts.[12]
Whether certain items of evidence should be accorded probative value or weight, or
should be rejected as feeble or spurious; or whether or not the proofs on one side or the
other are clear and convincing and adequate to establish a proposition in issue; whether
or not the body of proofs presented by a party, weighed and analyzed in relation to
contrary evidence submitted by adverse party, may be said to be strong, clear and
convincing; whether or not certain documents presented by one side should be accorded
full faith and credit in the face of protests as to their spurious character by the other
side; whether or not inconsistencies in the body of proofs of a party are of such gravity as
to justify refusing to give said proofs weight all these are issues of fact. Questions like
these are not reviewable by the Supreme Court whose review of cases decided by the CA
is confined only to questions of law raised in the petition and therein distinctly set forth. [13]
Nonetheless, the Court has recognized several exceptions to the rule, including:
(a) when the findings are grounded entirely on speculation, surmises or conjectures; (b)
when the inference made is manifestly mistaken, absurd or impossible; (c) when there is
grave abuse of discretion; (d) when the judgment is based on a misapprehension of facts;

17

(e) when the findings of facts are conflicting; (f) 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; (g) when the findings are contrary to those of the
trial court; (h) when the findings are conclusions without citation of specific evidence on
which they are based; (i) when the facts set forth in the petition as well as in the
petitioners main and reply briefs are not disputed by the respondent; (j) when the findings
of fact are premised on the supposed absence of evidence and contradicted by the
evidence on record; and (k) when the Court of Appeals manifestly overlooked certain
relevant facts not disputed by the parties, which, if properly considered, would justify a
different conclusion.[14] The circumstances of this case indicate that none of such
exceptions is attendant herein.
The credence given by the RTC to the testimony and relocation plan of Fajardo was
conclusive upon this Court especially by virtue of the affirmance by the CA of the
RTC. Resultantly, the fact of Angeles encroachment on Pascuals Lot 4 was proved by
preponderant evidence.

on his own lot. Good faith consists in the belief of the builder that the land he is building
on is his and in his ignorance of a defect or flaw in his title.[15]
With the unassailable finding that Angeles house straddled the lot of Pascual, and that
Angeles had built his house in good faith, Article 448 of the Civil Code, which spells out the
rights and obligations of the owner of the land as well as of the builder, is unquestionably
applicable. Consequently, the land being the principal and the building the accessory,
preference is given to Pascual as the owner of the land to make the choice as between
appropriating the building or obliging Angeles as the builder to pay the value of the
land. Contrary to the insistence of Angeles, therefore, no inconsistency exists between the
finding of good faith in his favor and the grant of the reliefs set forth in Article 448 of
the Civil Code.

It is noteworthy to point out, too, that the argument of Angeles based on the
indefeasibility and incontrovertibility of Torrens titles pursuant to Presidential Decree No.
1529 (The Property Registration Decree) is inapplicable considering that the ownership of
Lot 4 and Lot 5 was not the issue. Nor were the metes and bounds of the lots as indicated
in the respective TCTs being assailed, for the only issue concerned the exact and actual
location of Lot 4 and Lot 5.

SO ORDERED.

II
Angeles was a builder in good faith
To be next determined is whether the CAs application of Article 448 of the Civil Code was
correct and proper.
Article 448 of the Civil Code provides thusly:
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 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 provision contemplates a person building, or sowing, or planting in good faith on land
owned by another. The law presupposes that the land and the building or plants are
owned by different persons, like here. The RTC and CA found and declared Angeles to be a
builder in good faith. We cannot veer away from their unanimous conclusion, which can
easily be drawn from the fact that Angeles insists until now that he built his house entirely

WHEREFORE, the Court DENIES the petition for review on certiorari; and AFFIRMS the
decision promulgated on January 31, 2002 by the Court of Appeals in C.A.-G.R. CV No.
61600. No pronouncement on costs of suit.

Republic of the Philippines

SUPREME COURT
Manila
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.
x - - - - - - - - - - - - - - - - - - - - - - -x
G.R. No. 140553
LENA DUQUE-ROSARIO, Petitioner,
vs.
BANCO FILIPINO SAVINGS AND MORTGAGE BANK, Respondent.
DECISION
LEONARDO-DE CASTRO, J.:
Presently before the Court are two consolidated Petitions for Review on Certiorari under
Rule 45 of the Rules of Court, both assailing the Decision1 dated June 29, 1999 and
Resolution2 dated October 22, 1999 of the Court of Appeals in CA-G.R. CV No. 39770.

18

The petitioners in G.R. No. 140528 are siblings Maria Torbela,3 Pedro Torbela,4 Eufrosina
Torbela Rosario,5Leonila 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. 16676,8in 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 Partition9 dated December 3, 1962.
On December 12, 1964, the Torbela siblings executed a Deed of Absolute Quitclaim10 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) x x x transfer[red] and convey[ed] x
x x unto the said Andres T. Rosario, that undivided portion of THREE HUNDRED SEVENTYFOUR square meters of that parcel of land embraced in Original Certificate of Title No.
16676 of the land records of Pangasinan x x x."11 Four days later, on December 16, 1964,
OCT No. 16676 in Valerianos name was partially cancelled as to Lot No. 356-A and TCT No.
5275112 was issued in Dr. Rosarios name covering the said property.
Another Deed of Absolute Quitclaim13 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:
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, x x x 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 TORBELAAGUSTIN, 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 Cornelios Affidavit of
Adverse Claim dated May 16, 1967 and Dr. Rosarios Deed of Absolute Quitclaim dated
December 28, 1964 annotated on TCT No. 52751 as Entry Nos. 27447118 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.
Rosarios 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.
5275120 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.
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. Rosarios
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. 274471274472, 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

19

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
[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. 53328325 on December 18,
1981. Since the construction of a two-storey commercial building on Lot No. 5-F-8-C-2-B-2A 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. Rosarios loan from PNB, the mortgage on
Lot No. 356-A in favor of PNB was cancelled per Entry No. 53347826 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. U4359. 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 Deeds27
The spouses Rosario afterwards failed to pay their loan from Banco Filipino. As of April 2,
1987, the spouses Rosarios 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 Sale29 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.
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 Deeds32
The Torbela siblings intervened in Civil Case No. U-4667. Eventually, on October 17, 1990,
the RTC issued an Order33 dismissing without prejudice Civil Case No. U-4667 due to the
spouses Rosarios 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 Sale34and Affidavit of Consolidation35 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 cancelation 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
Decision38 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 sheriffs 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 attorneys fees;

20

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;
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 Decision40 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 Decision42 dated June 29, 1999, the Court of Appeals decreed:
WHEREFORE, foregoing considered, the appealed decision is hereby AFFIRMED with
modification. Items No. 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
attorneys fees.
Costs against [Dr. Rosario].43
The Court of Appeals, in a Resolution44 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.
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
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
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.

21

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.http://sc.judiciary.gov.ph/jurisprudence/2010/february2010/169481.htm - _ftn 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 reexamination of the evidence presented by the contending parties during the trial of the
case.
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 relates to the
performance of his official functions;
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 Minister of Justice and the
Minister of Local Government.

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.
xxxx
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. x x x. (Emphases supplied.)
The Court gave the following elucidation on the jurisdiction of the Lupong Tagapayapa in
Tavora v. Hon. Veloso51:
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

22

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. U4359.
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. Rosarios 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. Rosarios loan in
the amount ofP70,200.00, 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.
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. Rosarios 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. x x x.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.55 Consequently, 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. Rosarios 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. Rosarios 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. Rosarios 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. Rosarios 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. Rosarios loan by the banks.
Since Dr. Rosarios 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
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

23

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 owners 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. Rosarios 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. Rosarios 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:

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 beneficiarys 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.67The 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
Joses 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 Joses 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:

24

[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.)
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, 198173
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 world74 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.
Rosarios 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. Rosarios 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.
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 Cornelios Adverse Claim
dated May 16, 1967 and Dr. Rosarios 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

25

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. Rosarios loan forP1,200,000.00 and constituted a mortgage on Lot No. 356A (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. Rosarios 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. 274471274472 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.
Rosarios 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 claimants
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.
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 x x x 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 x x x;" 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 claimants
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."
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.

26

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 preexisting 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. x x x.
xxxx
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.
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. Rosarios 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. Rosarios 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

27

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. Rosarios 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. 356A, 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.
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.
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 Appeals87 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

28

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. Rosarios
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 attorneys fees.
Indeed, Dr. Rosarios 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.
Rosarios betrayal had caused the Torbela siblings (which included Dr. Rosarios 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.
Rosarios 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.
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. Rosarios 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-C2-B-2-A and Lot No. 356-A (Lot No. 4489, the third property mortgaged to secure Dr.
Rosarios 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-Rosarios claim of sole ownership of Lot No. 5F-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-Rosarios 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-8C-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

29

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.95But
no such action was instituted by the Torbela siblings or either of the spouses Rosario.
Duque-Rosario also cannot bar the issuance of the writ of possession over Lot No. 5-F-8-C2-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-Rosarios 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.961avvphi1
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 CAG.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 attorneys
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.
TERESITA J. LEONARDO-DE CASTRO
Associate Justice
WE CONCUR:
RENATO C. CORONA
Chief Justice
Chairperson
LUCAS P. BERSAMIN
MARIANO C. DEL CASTILLO
Associate Justice
Associate Justice
MARTIN S. VILLARAMA, JR.
Associate Justice
CERTIFICATION
Pursuant to Section 13, Article VIII of the Constitution, I certify that the conclusions in the
above Decision had been reached in consultation before the case was assigned to the
writer of the opinion of the Courts Division.
RENATO C. CORONA
Chief Justice
THIRD DIVISION
[G.R. No. 108894. February 10, 1997]
TECNOGAS PHILIPPINES MANUFACTURING CORPORATION, petitioner, vs. COURT OF
APPEALS (FORMER SPECIAL SEVENTEENTH DIVISION) and EDUARDO
UY, respondents.
DECISION
PANGANIBAN, J.:
The parties in this case are owners of adjoining lots in Paraaque, Metro Manila. It
was discovered in a survey that a portion of a building of petitioner, which was presumably
constructed by its predecessor-in-interest, encroached on a portion of the lot owned by
private respondent. What are the rights and obligations of the parties? Is petitioner
considered a builder in bad faith because, as held by respondent Court, he is presumed to
know the metes and bounds of his property as described in his certificate of title? Does
petitioner succeed into the good faith or bad faith of his predecessor-in-interest which
presumably constructed the building?

30

These are the questions raised in the petition for review of the Decision[1] dated
August 28, 1992, in CA-G.R. CV No. 28293 of respondent Court[2] where the disposition
reads:[3]
WHEREFORE, premises considered, the Decision of the Regional Trial Court is hereby
reversed and set aside and another one entered 1. Dismissing the complaint for lack of cause of action;
2. Ordering Tecnogas to pay the sum of P2,000.00 per month as reasonable rental from
October 4, 1979 until appellee vacates the land;
3. To remove the structures and surrounding walls on the encroached area;
4. Ordering appellee to pay the value of the land occupied by the two-storey building;
5. Ordering appellee to pay the sum of P20,000.00 for and as attorneys fees;
6. Costs against appellee.
Acting on the motions for reconsideration of both petitioner and private respondent,
respondent Court ordered the deletion of paragraph 4 of the dispositive portion in an
Amended Decision dated February 9, 1993, as follows:[4]
WHEREFORE, premises considered, our decision of August 28, 1992 is hereby modified
deleting paragraph 4 of the dispositive portion of our decision which reads:
4. Ordering appellee to pay the value of the land occupied by the two-storey building.
The motion for reconsideration of appellee is hereby DENIED for lack of merit.
The foregoing Amended Decision is also challenged in the instant petition.
The Facts
The facts are not disputed. Respondent Court merely reproduced the factual findings
of the trial court, as follows:[5]
That plaintiff (herein petitioner) which is a corporation duly organized and existing under
and by virtue of Philippine laws is the registered owner of a parcel of land situated in
Barrio San Dionisio, Paraaque, Metro Manila known as Lot 4331-A (should be 4531-A) of
Lot 4531 of the Cadastral Survey of Paraaque, Metro Manila, covered by Transfer
Certificate of Title No. 409316 of the Registry of Deeds of the Province of Rizal; that said
land was purchased by plaintiff from Pariz Industries, Inc. in 1970, together with all the
buildings and improvements including the wall existing thereon; that the defendant
(herein private respondent) is the registered owner of a parcel of land known as Lot No.
4531-B of Lot 4531 of the Cadastral Survey of Paraaque, LRC (GLRO) Rec. No. 19645
covered by Transfer Certificate of Title No. 279838, of the Registry of Deeds for the
Province of Rizal; that said land which adjoins plaintiffs land was purchased by defendant
from a certain Enrile Antonio also in 1970; that in 1971, defendant purchased another lot
also adjoining plaintiffs land from a certain Miguel Rodriguez and the same was registered
in defendants name under Transfer Certificate of Title No. 31390, of the Registry of Deeds
for the Province of Rizal; that portions of the buildings and wall bought by plaintiff
together with the land from Pariz Industries are occupying a portion of defendants
adjoining land; that upon learning of the encroachment or occupation by its buildings and
wall of a portion of defendants land, plaintiff offered to buy from defendant that particular
portion of defendants land occupied by portions of its buildings and wall with an area of
770 square meters, more or less, but defendant, however, refused the offer. In 1973, the
parties entered into a private agreement before a certain Col. Rosales in Malacaang,
wherein plaintiff agreed to demolish the wall at the back portion of its land thus giving to
defendant possession of a portion of his land previously enclosed by plaintiffs wall; that
defendant later filed a complaint before the office of Municipal Engineer of Paraaque,
Metro Manila as well as before the Office of the Provincial Fiscal of Rizal against plaintiff in

connection with the encroachment or occupation by plaintiffs buildings and walls of a

portion of its land but said complaint did not prosper; that defendant dug or caused to be
dug a canal along plaintiffs wall, a portion of which collapsed in June, 1980, and led to the
filing by plaintiff of the supplemental complaint in the above-entitled case and a separate
criminal complaint for malicious mischief against defendant and his wife which ultimately
resulted into the conviction in court of defendants wife for the crime of malicious
mischief; that while trial of the case was in progress, plaintiff filed in Court a formal
proposal for settlement of the case but said proposal, however, was ignored by defendant.
After trial on the merits, the Regional Trial Court[6] of Pasay City, Branch 117, in Civil
Case No. PQ-7631-P, rendered a decision dated December 4, 1989 in favor of petitioner
who was the plaintiff therein. The dispositive portion reads:[7]
WHEREFORE, judgment is hereby rendered in favor of plaintiff and against defendant and
ordering the latter to sell to plaintiff that portion of land owned by him and occupied by
portions of plaintiffs buildings and wall at the price of P2,000.00 per square meter and to
pay the former:
1. The sum of P44,000.00 to compensate for the losses in materials and properties
incurred by plaintiff through thievery as a result of the destruction of its wall;
2. The sum of P7,500.00 as and by way of attorneys fees; and
3. The costs of this suit.
Appeal was duly interposed with respondent Court, which as previously stated,
reversed and set aside the decision of the Regional Trial Court and rendered the assailed
Decision and Amended Decision. Hence, this recourse under Rule 45 of the Rules of Court.
The Issues
The petition raises the following issues:[8]
(A)
Whether or not the respondent Court of Appeals erred in holding the petitioner a
builder in bad faith because it is presumed to know the metes and bounds of his
property.
(B)
Whether or not the respondent Court of Appeals erred when it used the amicable
settlement between the petitioner and the private respondent, where both parties
agreed to the demolition of the rear portion of the fence, as estoppel amounting to
recognition by petitioner of respondents right over his property including the
portions of the land where the other structures and the building stand, which were
not included in the settlement.
(C)
Whether or not the respondent Court of Appeals erred in ordering the removal of the
structures and surrounding walls on the encroached area and in withdrawing its earlier
ruling in its August 28, 1992 decision for the petitioner to pay for the value of the land
occupied by the building, only because the private respondent has manifested its choice to
demolish it despite the absence of compulsory sale where the builder fails to pay for the
land, and which choice private respondent deliberately deleted from its September 1,
1980 answer to the supple-mental complaint in the Regional Trial Court.
In its Memorandum, petitioner poses the following issues:
A
The time when to determine the good faith of the builder under Article 448 of the New
Civil Code, is reckoned during the period when it was actually being built; and in a case
where no evidence was presented nor introduced as to the good faith or bad faith of the

31

builder at that time, as in this case, he must be presumed to be a builder in good faith,
since bad faith cannot be presumed.[9]
B.
In a specific boundary overlap situation which involves a builder in good faith, as in this
case, it is now well settled that the lot owner, who builds on the adjacent lot
is not charged with constructive notice of the technical metes and bounds contained in
their torrens titles to determine the exact and precise extent of his boundary perimeter. [10]
C.
The respondent courts citation of the twin cases of Tuason & Co. v. Lumanlan and Tuason
& Co. v. Macalindong is not the judicial authority for a boundary dispute situation between
adjacent torrens titled lot owners, as the facts of the present case do not fall
within nor square with the involved principle of a dissimilar case.[11]
D.
Quite contrary to respondent Uys reasoning, petitioner Tecnogas continues to be a builder
in good faith, even if it subsequently built/repaired the walls/other permanent structures
thereon while the case a quowas pending and even while respondent sent the petitioner
many letters/filed cases thereon.[12]
D. (E.)
The amicable settlement between the parties should be interpreted as a contract and
enforced only in accordance with its explicit terms, and not over and beyond that agreed
upon; because the courts do nothave the power to create a contract nor expand its
scope.[13]
E. (F.)
As a general rule, although the landowner has the option to choose between:
(1) buying the building built in good faith, or (2) selling the portion of his land on which
stands the building under Article 448 of the Civil Code; the first option is not absolute,
because an exception thereto, once it would be impractical for the landowner to choose to
exercise the first alternative, i.e. buy that portion of the house standing on his land, for the
whole building might be rendered useless. The workable solution is for him to select the
second alternative, namely, to sell to the builder that part of his land on which was
constructed a portion of the house.[14]
Private respondent, on the other hand, argues that the petition is suffering from the
following flaws:[15]
1. It did not give the exact citations of cases decided by the Honorable Supreme
Court that allegedly contradicts the ruling of the Hon. Court of Appeals based on
the doctrine laid down in Tuason vs. Lumanlan case citing also Tuason vs.
Macalindong case (Supra).
2. Assuming that the doctrine in the alleged Co Tao vs. Chico case is contradictory to
the doctrine in Tuason vs. Lumanlan and Tuason vs. Macalindong, the two cases
being more current, the same should prevail.
Further, private respondent contends that the following unmistakably point to the bad
faith of petitioner: (1) private respondents purchase of the two lots, was ahead of the
purchase by petitioner of the building and lot from Pariz Industries; (2) the declaration of
the General Manager of Tecnogas that the sale between petitioner and Pariz Industries
was not registered because of some problems with China Banking Corporation; and (3) the
Deed of Sale in favor of petitioner was registered in its name only in the month of May
1973.[16]
The Courts Ruling

The petition should be granted.

Good Faith or Bad Faith
Respondent Court, citing the cases of J. M. Tuason & Co., Inc. vs. Vda. de
Lumanlan[17] and J. M. Tuason & Co., Inc. vs. Macalindong,[18] ruled that petitioner cannot
be considered in good faith because as a land owner, it is presumed to know the metes
and bounds of his own property, specially if the same are reflected in a properly issued
certificate of title. One who erroneously builds on the adjoining lot should be considered a
builder in (b)ad (f)aith, there being presumptive knowledge of the Torrens title, the area,
and the extent of the boundaries.[19]
We disagree with respondent Court. The two cases it relied upon do not support its
main pronouncement that a registered owner of land has presumptive knowledge of the
metes and bounds of its own land, and is therefore in bad faith if he mistakenly builds on
an adjoining land. Aside from the fact that those cases had factual moorings radically
different from those obtaining here, there is nothing in those cases which would suggest,
however remotely, that bad faith is imputable to a registered owner of land when a part of
his building encroaches upon a neighbors land, simply because he is supposedly presumed
to know the boundaries of his land as described in his certificate of title. No such doctrinal
statement could have been made in those cases because such issue was not before the
Supreme Court. Quite the contrary, we have rejected such a theory in Co Tao vs.
Chico,[20] where we held that unless one is versed in the science of surveying, no one can
determine the precise extent or location of his property by merely examining his paper
title.
There is no question that when petitioner purchased the land from Pariz Industries,
the buildings and other structures were already in existence. The record is not clear as to
who actually built those structures, but it may well be assumed that petitioners
predecessor-in-interest, Pariz Industries, did so. Article 527 of the Civil Code presumes
good faith, and since no proof exists to show that the encroachment over a narrow,
needle-shaped portion of private respondents land was done in bad faith by the builder of
the encroaching structures, the latter should be presumed to have built them in good
faith.[21] It is presumed that possession continues to be enjoyed in the same character in
which it was acquired, until the contrary is proved.[22] Good faith consists in the belief of
the builder that the land he is building on is his, and his ignorance of any defect or flaw in
his title.[23] Hence, such good faith, by law, passed on to Parizs successor, petitioner in this
case. Further, (w)here one derives title to property from another, the act, declaration, or
omission of the latter, while holding the title, in relation to the property, is evidence
against the former.[24] And possession acquired in good faith does not lose this character
except in case and from the moment facts exist which show that the possessor is not
unaware that he possesses the thing improperly or wrongfully.[25] The good faith ceases
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. [26]
Recall that the encroachment in the present case was caused by a very slight
deviation of the erected wall (as fence) which was supposed to run in a straight line from
point 9 to point 1 of petitioners lot. It was an error which, in the context of the attendant
facts, was consistent with good faith. Consequently, the builder, if sued by the aggrieved
landowner for recovery of possession, could have invoked the provisions of Art. 448 of the
Civil Code, which reads:
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

32

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.
The obvious benefit to the builder under this article is that, instead of being outrightly
ejected from the land, he can compel the landowner to make a choice between the two
options: (1) to appropriate the building by paying the indemnity required by law, or (2) sell
the land to the builder. The landowner cannot refuse to exercise either option and compel
instead the owner of the building to remove it from the land.[27]
The question, however, is whether the same benefit can be invoked by petitioner
who, as earlier stated, is not the builder of the offending structures but possesses them as
buyer.
We answer such question in the affirmative.
In the first place, there is no sufficient showing that petitioner was aware of the
encroachment at the time it acquired the property from Pariz Industries. We agree with
the trial court that various factors in evidence adequately show petitioners lack of
awareness thereof. In any case, contrary proof has not overthrown the presumption of
good faith under Article 527 of the Civil Code, as already stated, taken together with the
disputable presumptions of the law on evidence. These presumptions state, under Section
3 (a) of Rule 131 of the Rules of Court, that the person is innocent of a crime or wrong; and
under Section 3 (ff) of Rule 131, that the law has been obeyed. In fact, private respondent
Eduardo Uy himself was unaware of such intrusion into his property until after 1971 when
he hired a surveyor, following his purchase of another adjoining lot, to survey all his newly
acquired lots. Upon being apprised of the encroachment, petitioner immediately offered
to buy the area occupied by its building -- a species of conduct consistent with good faith.
In the second place, upon delivery of the property by Pariz Industries, as seller, to the
petitioner, as buyer, the latter acquired ownership of the property. Consequently and as
earlier discussed, petitioner is deemed to have stepped into the shoes of the seller in
regard to all rights of ownership over the immovable sold, including the right to compel
the private respondent to exercise either of the two options provided under Article 448 of
the Civil Code.
Estoppel
Respondent Court ruled that the amicable settlement entered into between
petitioner and private respondent estops the former from questioning the private
respondents right over the disputed property. It held that by undertaking to demolish the
fence under said settlement, petitioner recognized private respondents right over the
property, and cannot later on compel private respondent to sell to it the land since private
respondent is under no obligation to sell.[28]
We do not agree. Petitioner cannot be held in estoppel for entering into the
amicable settlement, the pertinent portions of which read:[29]
That the parties hereto have agreed that the rear portion of the fence that separates the
property of the complainant and respondent shall be demolished up to the back of the
building housing the machineries which demolision (sic) shall be undertaken by the
complainant at anytime.

That the fence which serve(s) as a wall housing the electroplating machineries shall not be
demolished in the mean time which portion shall be subject to negotiation by herein
parties.
From the foregoing, it is clear that petitioner agreed only to the demolition of a
portion of the wall separating the adjoining properties of the parties -- i.e. up to the back
of the building housing the machineries. But that portion of the fence which served as the
wall housing the electroplating machineries was not to be demolished. Rather, it was to be
subject to negotiation by herein parties. The settlement may have recognized the
ownership of private respondent but such admission cannot be equated with bad
faith. Petitioner was only trying to avoid a litigation, one reason for entering into an
amicable settlement.
As was ruled in Osmea vs. Commission on Audit,[30]
A compromise is a bilateral act or transaction that is expressly acknowledged as a juridical
agreement by the Civil Code and is therein dealt with in some detail. `A compromise,
declares Article 2208 of said Code, `is a contract whereby the parties, by making reciprocal
concessions, avoid a litigation or put an end to one already commenced.
xxx xxx xxx
The Civil Code not only defines and authorizes compromises, it in fact encourages them in
civil actions. Art. 2029 states that `The Court shall endeavor to persuade the litigants in a
civil case to agree upon some fair compromise. x x x.
In the context of the established facts, we hold that petitioner did not lose its rights
under Article 448 of the Civil Code on the basis merely of the fact that some years after
acquiring the property in good faith, it learned about -- and aptly recognized -- the right of
private respondent to a portion of the land occupied by its building. The supervening
awareness of the encroachment by petitioner does not militate against its right to claim
the status of a builder in good faith. In fact, a judicious reading of said Article 448 will
readily show that the landowners exercise of his option can only take place after the
builder shall have come to know of the intrusion -- in short, when both parties shall have
become aware of it. Only then will the occasion for exercising the option arise, for it is only
then that both parties will have been aware that a problem exists in regard to their
property rights.
Options of Private Respondent
What then is the applicable provision in this case which private respondent may
invoke as his remedy: Article 448 or Article 450[31] of the Civil Code?
In view of the good faith of both petitioner and private respondent, their rights and
obligations are to be governed by Art. 448. The essential fairness of this codal provision
has been pointed out by Mme. Justice Ameurfina Melencio-Herrera, citing Manresa and
applicable precedents, in the case of Depra vs. Dumlao,[32] to wit:
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 impracticality 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 to pay the proper
rent. 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. (3 Manresa 213; Bernardo vs. Bataclan, 37 Off. Gaz. 1382; Co Tao vs. Chan

33

Chico, G. R. No. 49167, April 30, 1949; Article applied; see Cabral, et al. vs. Ibanez [S.C.] 52
Off. Gaz. 217; Marfori vs. Velasco, [C.A.] 52 Off. Gaz. 2050).
The private respondents insistence on the removal of the encroaching structures as
the proper remedy, which respondent Court sustained in its assailed Decisions, is thus
legally flawed. This is not one of the remedies bestowed upon him by law. It would be
available only if and when he chooses to compel the petitioner to buy the land at a
reasonable price but the latter fails to pay such price.[33] This has not taken place. Hence,
his options are limited to: (1) appropriating the encroaching portion of petitioners building
after payment of proper indemnity, or (2) obliging the latter to buy the lot occupied by the
structure. He cannot exercise a remedy of his own liking.
Neither is petitioners prayer that private respondent be ordered to sell the
land[34] the proper remedy. While that was dubbed as the more workable solution in Grana
and Torralba vs. The Court of Appeals, et al.,[35] it was not the relief granted in that case as
the landowners were directed to exercise within 30 days from this decision their option to
either buy the portion of the petitioners house on their land or sell to said petitioners the
portion of their land on which it stands.[36] Moreover, in Grana and Torralba, the area
involved was only 87 square meters while this case involves 520 square meters [37]. In line
with the case of Depra vs. Dumlao,[38] this case will have to be remanded to the trial court
for further proceedings to fully implement the mandate of Art. 448. It is a rule of
procedure for the Supreme Court to strive to settle the entire controversy in a single
proceeding leaving no root or branch to bear the seeds of future litigation. [39]
Petitioner, however, must also pay the rent for the property occupied by its building
as prescribed by respondent Court from October 4, 1979, but only up to the date private
respondent serves notice of its option upon petitioner and the trial court; that is, if such
option is for private respondent to appropriate the encroaching structure. In such event,
petitioner would have a right of retention which negates the obligation to pay rent. [40] The
rent should however continue if the option chosen is compulsory sale, but only up to the
actual transfer of ownership.
The award of attorneys fees by respondent Court against petitioner is unwarranted
since the action appears to have been filed in good faith. Besides, there should be no
penalty on the right to litigate.[41]
WHEREFORE, premises considered, the petition is hereby GRANTED and the assailed
Decision and the Amended Decision are REVERSED and SET ASIDE. In accordance with the
case of Depra vs. Dumlao,[42] this case is REMANDED to the Regional Trial Court of Pasay
City, Branch 117, for further proceedings consistent with Articles 448 and 546 [43]of the
Civil Code, as follows:
The trial court shall determine:
a) the present fair price of private respondents 520 square-meter area of land;
b) the increase in value (plus value) which the said area of 520 square meters
may have acquired by reason of the existence of the portion of the
building on the area;
c) the fair market value of the encroaching portion of the building; and
d) whether the value of said area of land is considerably more than the fair
market value of the portion of the building thereon.
2. After said amounts shall have been determined by competent evidence, the regional
trial court shall render judgment as follows:
a) The private respondent shall be granted a period of fifteen (15) days within
which to exercise his option under the law (Article 448, Civil

Code), whether to appropriate the portion of the building as his own by

paying to petitioner its fair market value, or to oblige petitioner to pay the
price of said area. The amounts to be respectively paid by petitioner and
private respondent, in accordance with the option thus exercised by
written notice of the other party and to the court, shall be paid by the
obligor within fifteen (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 private respondent exercises the option to oblige petitioner to pay the
price of the land but the latter rejects such purchase because, as found by
the trial court, the value of the land is considerably more than that of the
portion of the building, petitioner shall give written notice of such rejection
to private respondent and to the trial court within fifteen (15) days from
notice of private respondents option to sell the land. In that event, the
parties shall be given a period of fifteen (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 fifteen (15) days
from and after the termination of the said period fixed for negotiation, shall
then fix the terms of the lease provided that the monthly rental to be fixed
by the Court shall not be less than two thousand pesos (P2,000.00) per
month, payable within the first five (5) days of each calendar month. The
period for the forced lease shall not be more than two (2) years, counted
from the finality of the judgment, considering the long period of time since
1970 that petitioner has occupied the subject area. The rental thus fixed
shall be increased by ten percent (10%) for the second year of the forced
lease. Petitioner shall not make any further constructions or improvements
on the building. Upon expiration of the two-year period, or upon default by
petitioner in the payment of rentals for two (2) consecutive months, private
respondent shall be entitled to terminate the forced lease, to recover his
land, and to have the portion of the building removed by petitioner or at
latters expense. The rentals herein provided shall be tendered by petitioner
to the trial court for payment to private respondent, and such tender shall
constitute evidence of whether or not compliance was made within the
period fixed by the said court.
c) In any event, petitioner shall pay private respondent an amount computed at
two thousand pesos (P2,000.00) per month as reasonable compensation for
the occupancy of private respondents land for the period counted from
October 4, 1979, up to the date private respondent serves notice of its
option to appropriate the encroaching structures, otherwise up to the
actual transfer of ownership to petitioner 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 nonextendible, 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.

34

No costs.
SO ORDERED.
Narvasa, C.J., (Chairman), Davide, Jr., Melo, and Francisco, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-57348 May 16, 1985
FRANCISCO DEPRA, plaintiff-appellee,
vs.
AGUSTIN DUMLAO, defendant-appellant.
Roberto D. Dineros for plaintiff-appellee.
Veil D. Hechanova for defendant-appellant.
MELENCIO-HERRERA, J.:
This is an appeal from the Order of the former Court of First Instance of Iloilo to the then
Court of Appeals, which the latter certified to this instance as involving pure questions of
law
Plaintiff-appellee, Francisco Depra, is the owner of a parcel of land registered under
Transfer Certificate of Title No. T3087, known as Lot No. 685, situated in the municipality
of Dumangas, Iloilo, with an area of approximately 8,870 square meters. Agustin Dumlao,
defendant-appellant, owns an adjoining lot, designated as Lot No. 683, with an
approximate area of 231 sq. ms.
Sometime in 1972, when DUMLAO constructed his house on his lot, the kitchen thereof
had encroached on an area of thirty four (34) square meters of DEPRA's property, After
the encroachment was discovered in a relocation survey of DEPRA's lot made on
November 2,1972, his mother, Beatriz Depra after writing a demand letter asking
DUMLAO to move back from his encroachment, filed an action for Unlawful Detainer on
February 6,1973 against DUMLAO in the Municipal Court of of Dumangas, docketed as
Civil Case No 1, Said complaint was later amended to include DEPRA as a party plain.
plaintiff.
After trial, the Municipal Court found that DUMLAO was a builder in good faith, and
applying Article 448 of the Civil Code, rendered judgment on September 29, 1973, the
dispositive portion of which reads:
Ordering that a forced lease is created between the parties with the
plaintiffs, as lessors, and the defendants as lessees, over the disputed
portion with an area of thirty four (34) square meters, the rent to be
paid is five (P5.00) pesos a month, payable by the lessee to the lessors
within the first five (5) days of the month the rent is due; and the lease
shall commence on the day that this decision shall have become final.
From the foregoing judgment, neither party appeal so that, ff it were a valid judgment, it
would have ordinarily lapsed into finality, but even then, DEPRA did not accept payment of
rentals so that DUMLAO deposited such rentals with the Municipal Court.

On July 15,1974, DEPRA filed a Complaint for Quieting of Title against DUMLAO before the
then Court of First Instance of Iloilo, Branch IV (Trial Court), involving the very same 34
square meters, which was the bone of contention in the Municipal Court. DUMLAO, in his
Answer, admitted the encroachment but alleged, in the main, that the present suit is
barred by res judicata by virtue of the Decision of the Municipal Court, which had become
final and executory.
After the case had been set for pre-trial, the parties submitted a Joint Motion for
Judgment based on the Stipulation of Facts attached thereto. Premised thereon, the Trial
Court on October 31, 1974, issued the assailed Order, decreeing:
WHEREFORE, the Court finds and so holds that the thirty four (34)
square meters subject of this litigation is part and parcel of Lot 685 of
the Cadastral Survey of Dumangas of which the plaintiff is owner as
evidenced by Transfer Certificate of Title No. 3087 and such plaintiff is
entitled to possess the same.
Without pronouncement as to costs.
SO ORDERED.
Rebutting the argument of res judicata relied upon by DUMLAO, DEPRA claims that the
Decision of the Municipal Court was null and void ab initio because its jurisdiction is
limited to the sole issue of possession, whereas decisions affecting lease, which is an
encumbrance on real property, may only be rendered by Courts of First Instance.
Addressing out selves to the issue of validity of the Decision of the Municipal Court, we
hold the same to be null and void. The judgment in a detainer case is effective in respect
of possession only (Sec. 7, Rule 70, Rules of Court). 1 The Municipal Court over-stepped its
bounds when it imposed upon the parties a situation of "forced lease", which like "forced
co-ownership" is not favored in law. Furthermore, a lease is an interest in real property,
jurisdiction over which belongs to Courts of First Instance (now Regional Trial Courts) (Sec.
44(b), Judiciary Act of 1948; 2 Sec. 19 (2) Batas Pambansa Blg. 129). 3 Since the Municipal
Court, acted without jurisdiction, its Decision was null and void and cannot operate as res
judicata to the subject complaint for Queting of Title. Besides, even if the Decision were
valid, the rule on res judicata would not apply due to difference in cause of action. In the
Municipal Court, the cause of action was the deprivation of possession, while in the action
to quiet title, the cause of action was based on ownership. Furthermore, Sec. 7, Rule 70 of
the Rules of Court explicitly provides that judgment in a detainer case "shall not bar an
action between the same parties respecting title to the land. " 4
Conceded in the Stipulation of Facts between the parties is that DUMLAO was a builder in
good faith. Thus,
8. That the subject matter in the unlawful detainer case, Civil Case No.
1, before the Municipal Court of Dumangas, Iloilo involves the same
subject matter in the present case, the Thirty-four (34) square meters
portion of land and built thereon in good faith is a portion of
defendant's kitchen and has been in the possession of the defendant
since 1952 continuously up to the present; ... (Emphasis ours)
Consistent with the principle that our Court system, like any other, must be a dispute
resolving mechanism, we accord legal effect to the agreement of the parties, within the
context of their mutual concession and stipulation. They have, thereby, chosen a legal
formula to resolve their dispute to appeal ply to DUMLAO the rights of a "builder in good
faith" and to DEPRA those of a "landowner in good faith" as prescribed in Article 448.
Hence, we shall refrain from further examining whether the factual situations of DUMLAO

35

and DEPRA conform to the juridical positions respectively defined by law, for a "builder in
good faith" under Article 448, a "possessor in good faith" under Article 526 and a
"landowner in good faith' under Article 448.
In regards to builders in good faith, Article 448 of the Civil Code 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 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 (Paragraphing
supplied)
Pursuant to the foregoing provision, DEPRA has the option either to pay for the
encroaching part of DUMLAO's kitchen, or to sell the encroached 34 square meters of his
lot to DUMLAO. He cannot refuse to pay for the encroaching part of the building, and to
sell the encroached part of his land, 5 as he had manifested before the Municipal Court.
But that manifestation is not binding because it was made in a void proceeding.
However, the good faith of DUMLAO is part of the Stipulation of Facts in the Court of First
Instance. It was thus error for the Trial Court to have ruled that DEPRA is "entitled to
possession," without more, of the disputed portion implying thereby that he is entitled to
have the kitchen removed. He is entitled to such removal only when, after having chosen
to sell his encroached land, DUMLAO fails to pay for the same. 6 In this case, DUMLAO had
expressed his willingness to pay for the land, but DEPRA refused to sell.
The owner of the building erected in good faith on a land owned by
another, is entitled to retain the possession of the land until he is paid
the value of his building, under article 453 (now Article 546). The owner
of the land, upon the other hand, has the option, under article 361 (now
Article 448), either to pay for the building or to sell his land to the
owner of the building. But he cannot as respondents here did refuse
both to pay for the building and to sell the land and compel the owner
of the building to remove it from the land where it erected. He is
entitled to such remotion only when, after having chosen to sell his
land. the other party fails to pay for the same (italics ours).
We hold, therefore, that the order of Judge Natividad compelling
defendants-petitioners to remove their buildings from the land
belonging to plaintiffs-respondents only because the latter chose
neither to pay for such buildings nor to sell the land, is null and void, for
it amends substantially the judgment sought to be executed and is.
furthermore, offensive to articles 361 (now Article 448) and 453 (now
Article 546) of the Civil Code. (Ignacio vs. Hilario, 76 Phil. 605,
608[1946]).
A word anent the philosophy behind Article 448 of the Civil rode.

The original provision was found in Article 361 of the Spanish Civil Code; which provided:
ART. 361. The owner of land on which anything has been built, sown or
planted in good faith, shall have the right to appropriate as his own the
work, sowing or planting, after the payment of the indemnity stated in
Articles 453 and 454, or to oblige the one who built or planted to pay
the price of the land, and the one who sowed, the proper rent.
As will be seen, the Article favors the owner of the land, by giving him one of the two
options mentioned in the Article. Some commentators have questioned the preference in
favor of the owner of the land, but Manresa's opinion is that the Article is just and fair.
. . . es justa la facultad que el codigo da al dueno del suelo en el articulo
361, en el caso de edificacion o plantacion? Algunos comentaristas la
conceptuan injusta, y como un extraordinario privilegio en favor de la
propiedad territorial. Entienden que impone el Codigo una pena al
poseedor de buena fe y como advierte uno de los comentaristas
aludidos 'no se ve claro el por que de tal pena . . . al obligar al que obro
de buena fe a quedarse con el edificio o plantacion, previo el pago del
terreno que ocupa, porque si bien es verdad que cuando edifico o
planto demostro con este hecho, que queria para si el edificio o plantio
tambien lo es que el que edifico o planto de buena fe lo hizo en la
erronea inteligencia de creerse dueno del terreno Posible es que, de
saber lo contrario, y de tener noticia de que habia que comprar y pagar
el terreno, no se hubiera decidido a plantar ni a edificar. La ley
obligandole a hacerlo fuerza su voluntad, y la fuerza por un hecho
inocente de que no debe ser responsable'. Asi podra suceder pero la
realidad es que con ese hecho voluntario, aunque sea inocente, se ha
enriquecido torticeramente con perjuicio de otro a quien es justo
indemnizarle,
En nuestra opinion, el Codigo ha resuelto el conflicto de la manera mas
justa y equitativa y respetando en lo possible el principio que para la
accesion se establece en el art. 358. 7
Our own Code Commission must have taken account of the objections to Article 361 of the
Spanish Civil Code. Hence, the Commission provided a modification thereof, and Article
448 of our Code has been made to provide:
ART. 448. The owner of the land on which anything has been built, sown
or planted in good faith, shall have the right to appropriate as his own
the works, sowing or planting, after payment of the indemnity provided
for in articles 546 and 548, or to oblige the one who built or planted to
pay the price of the land, and the one who sowed, the proper rent.
However, the builder or planter cannot be obliged to buy the land if its
value is considerably more than that of the building or trees. In such
case, he shall pay reasonable rent, if the owner of the land does not
choose to appropriate the building or trees after proper indemnity. The
parties shall agree upon the terms of the lease and in case of
disagreement, the court shall fix the terms thereof.
Additional benefits were extended to the builder but the landowner retained his options.
The fairness of the rules in Article 448 has also been explained as follows:
Where the builder, planter or sower has acted in good faith, a conflict
of rights arises between the owners, and it becomes necessary to

36

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 to pay for the proper rent. 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. (3 Manresa 213; Bernardo vs.
Bataclan, 37 Off. Gaz. 1382; Co Tao vs. Chan Chico, G.R. No. 49167, April
30, 1949; Article applied: see Cabral, et al vs. Ibanez [S.C.] 52 Off. Gaz.
217; Marfori vs. Velasco, [C.A.] 52 Off. Gaz. 2050). 8
WHEREFORE, the judgment of the trial Court is hereby set aside, and this case is hereby
ordered remanded to the Regional Trial Court of Iloilo for further proceedings consistent
with Articles 448 and 546 of the Civil Code, as follows:
1. The trial Court shall determine
a) the present fair price of DEPRA's 34 square meter area of land;
b) the amount of the expenses spent by DUMLAO for the building of the
kitchen;
c) the increase in value ("plus value") which the said area of 34 square
meters may have acquired by reason thereof, and
d) whether the value of said area of land is considerably more than that
of the kitchen built thereon.
2. After said amounts shall have been determined by competent evidence, the Regional,
Trial Court shall render judgment, as follows:
a) The trial Court shall grant DEPRA a period of fifteen (15) days within
which to exercise his option under the law (Article 448, Civil Code),
whether to appropriate the kitchen as his own by paying to DUMLAO
either the amount of tile expenses spent by DUMLAO f or the building
of the kitchen, or the increase in value ("plus value") which the said
area of 34 square meters may have acquired by reason thereof, or to
oblige DUMLAO to pay the price of said area. The amounts to be
respectively paid by DUMLAO and DEPRA, in accordance with the
option thus exercised by written notice of the other party and to the
Court, shall be paid by the obligor within fifteen (15) days from such
notice of the option by tendering the amount to the Court in favor of
the party entitled to receive it;
b) The trial Court shall further order that if DEPRA exercises the option
to oblige DUMLAO to pay the price of the land but the latter rejects
such purchase because, as found by the trial Court, the value of the land
is considerably more than that of the kitchen, DUMLAO shall give
written notice of such rejection to DEPRA and to the Court within
fifteen (15) days from notice of DEPRA's option to sell the land. In that
event, the parties shall be given a period of fifteen (15) days from such
notice of rejection within which to agree upon the terms of the lease,
and give the Court formal written notice of such agreement and its
provisos. If no agreement is reached by the parties, the trial Court,
within fifteen (15) days from and after the termination of the said

period fixed for negotiation, shall then fix the terms of the lease,
provided that the monthly rental to be fixed by the Court shall not be
less than Ten Pesos (P10.00) per month, payable within the first five (5)
days of each calendar month. The period for the forced lease shall not
be more than two (2) years, counted from the finality of the judgment,
considering the long period of time since 1952 that DUMLAO has
occupied the subject area. The rental thus fixed shall be increased by
ten percent (10%) for the second year of the forced lease. DUMLAO
shall not make any further constructions or improvements on the
kitchen. Upon expiration of the two-year period, or upon default by
DUMLAO in the payment of rentals for two (2) consecutive months,
DEPRA shall be entitled to terminate the forced lease, to recover his
land, and to have the kitchen removed by DUMLAO or at the latter's
expense. The rentals herein provided shall be tendered by DUMLAO to
the Court for payment to DEPRA, and such tender shall constitute
evidence of whether or not compliance was made within the period
fixed by the Court.
c) In any event, DUMLAO shall pay DEPRA an amount computed at Ten
Pesos (P10.00) per month as reasonable compensation for the
occupancy of DEPRA's land for the period counted from 1952, the year
DUMLAO occupied the subject area, 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 Precision shall be
inextendible, 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.
No costs,
SO ORDERED.
Teehankee, Actg. C.J., Plana, Relova, De la Fuente and Alampay, JJ., concur.
Gutierrez, Jr., * J., took no part.

37

Republic of the Philippines

Supreme Court
Manila
FIRST DIVISION
THE HEIRS OF PROTACIO GO, SR. and MARTA
BAROLA, namely: LEONOR, SIMPLICIO, PROTACIO,
JR., ANTONIO, BEVERLY ANN LORRAINNE, TITA,
CONSOLACION, LEONORA and ASUNCION, all
surnamed GO, represented by
LEONORA B. GO,
Petitioners,
-versus ESTER L. SERVACIO and RITO B. GO,
Respondents.

G.R. No. 157537

Present:
CORONA, C.J., Chairperson,
LEONARDO-DE CASTRO,
BERSAMIN,
DEL CASTILLO, and
VILLARAMA, JR., JJ.

Promulgated:
September 7, 2011
x-----------------------------------------------------------------------------------------x
DECISION
BERSAMIN, J.:

The disposition by sale of a portion of the conjugal property by the surviving spouse
without the prior liquidation mandated by Article 130 of the Family Code is not necessarily
void if said portion has not yet been allocated by judicial or extrajudicial partition to
another heir of the deceased spouse. At any rate, the requirement of prior liquidation
does not prejudice vested rights.
Antecedents
On February 22, 1976, Jesus B. Gaviola sold two parcels of land with a total area of 17,140
square meters situated in Southern Leyte to Protacio B. Go, Jr. (Protacio, Jr.). Twenty three
years later, or on March 29, 1999, Protacio, Jr. executed an Affidavit of Renunciation and
Waiver,[1] whereby he affirmed under oath that it was his father, Protacio Go, Sr. (Protacio,
Sr.), not he, who had purchased the two parcels of land (the property).

On November 25, 1987, Marta Barola Go died. She was the wife of Protacio, Sr. and
mother of the petitioners.[2] On December 28, 1999, Protacio, Sr. and his son Rito B. Go
(joined by Ritos wife Dina B. Go) sold a portion of the property with an area of 5,560
square meters to Ester L. Servacio (Servacio) for 5,686,768.00.[3]On March 2, 2001, the
petitioners demanded the return of the property,[4] but Servacio refused to heed their
demand. After barangay proceedings failed to resolve the dispute,[5] they sued Servacio
and Rito in the Regional Trial Court in Maasin City, Southern Leyte (RTC) for the annulment
of the sale of the property.
The petitioners averred that following Protacio, Jr.s renunciation, the property became
conjugal property; and that the sale of the property to Servacio without the prior
liquidation of the community property between Protacio, Sr. and Marta was null and
void.[6]
Servacio and Rito countered that Protacio, Sr. had exclusively owned the
property because he had purchased it with his own money.[7]
On October 3, 2002,[8] the RTC declared that the property was the conjugal property of
Protacio, Sr. and Marta, not the exclusive property of Protacio, Sr., because there were
three vendors in the sale to Servacio (namely: Protacio, Sr., Rito, and Dina); that the
participation of Rito and Dina as vendors had been by virtue of their being heirs of the late
Marta; that under Article 160 of the Civil Code, the law in effect when the property was
acquired, all property acquired by either spouse during the marriage was conjugal unless
there was proof that the property thus acquired pertained exclusively to the husband or to
the wife; and that Protacio, Jr.s renunciation was grossly insufficient to rebut the legal
presumption.[9]
Nonetheless, the RTC affirmed the validity of the sale of the property, holding that: xxx As
long as the portion sold, alienated or encumbered will not be allotted to the other heirs in
the final partition of the property, or to state it plainly, as long as the portion sold does not
encroach upon the legitimate (sic) of other heirs, it is valid.[10]Quoting Tolentinos
commentary on the matter as authority,[11] the RTC opined:
In his comment on Article 175 of the New Civil Code regarding the
dissolution of the conjugal partnership, Senator Arturo Tolentino, says
[sic]
Alienation by the survivor. After the death of one of the
spouses, in case it is necessary to sell any portion of the
community property in order to pay outstanding obligation
of the partnership, such sale must be made in the manner
and with the formalities established by the Rules of Court
for the sale of the property of the deceased persons. Any
sale, transfer, alienation or disposition of said property
affected without said formalities shall be null and void,
except as regards the portion that belongs to the vendor as
determined in the liquidation and partition. Pending the
liquidation, the disposition must be considered as limited

38

only to the contingent share or interest of the vendor in the

particular property involved, but not to the corpus of the
property.
Ruling
This rule applies not only to sale but also to
mortgages. The alienation, mortgage or disposal of the
conjugal property without the required formality, is not
however, null ab initio, for the law recognizes their validity
so long as they do not exceed the portion which, after
liquidation and partition, should pertain to the surviving
spouse who made the contract. [underlining supplied]
It seems clear from these comments of Senator Arturo Tolentino on the
provisions of the New Civil Code and the Family Code on the alienation
by the surviving spouse of the community property that jurisprudence
remains the same - that the alienation made by the surviving spouse of
a portion of the community property is not wholly void ab initio despite
Article 103 of the Family Code, and shall be valid to the extent of what
will be allotted, in the final partition, to the vendor. And rightly so,
because why invalidate the sale by the surviving spouse of a portion of
the community property that will eventually be his/her share in the
final partition? Practically there is no reason for that view and it would
be absurd.
Now here, in the instant case, the 5,560 square meter portion of the
17,140 square-meter conjugal lot is certainly mush (sic) less than what
vendors Protacio Go and his son Rito B. Go will eventually get as their
share in the final partition of the property. So the sale is still valid.
WHEREFORE, premises considered, complaint is hereby DISMISSED
without pronouncement as to cost and damages.
SO ORDERED.[12]
The RTCs denial of their motion for reconsideration[13] prompted the petitioners to appeal
directly to the Court on a pure question of law.
Issue
The petitioners claim that Article 130 of the Family Code is the applicable law; and that the
sale by Protacio, Sr., et al. to Servacio was void for being made without prior liquidation.
In contrast, although they have filed separate comments, Servacio and Rito both
argue that Article 130 of the Family Code was inapplicable; that the want of the liquidation
prior to the sale did not render the sale invalid, because the sale was valid to the extent of
the portion that was finally allotted to the vendors as his share; and that the sale did not
also prejudice any rights of the petitioners as heirs, considering that what the sale
disposed of was within the aliquot portion of the property that the vendors were entitled
to as heirs.[14]

The appeal lacks merit.

Article 130 of the Family Code reads:
Article 130. Upon the termination of the marriage by death, the
conjugal partnership property shall be liquidated in the same
proceeding for the settlement of the estate of the deceased.
If no judicial settlement proceeding is instituted, the surviving
spouse shall liquidate the conjugal partnership property either judicially
or extra-judicially within one year from the death of the deceased
spouse. If upon the lapse of the six month period no liquidation is
made, any disposition or encumbrance involving the conjugal
partnership property of the terminated marriage shall be void.
Should the surviving spouse contract a subsequent marriage
without compliance with the foregoing requirements, a mandatory
regime of complete separation of property shall govern the property
relations of the subsequent marriage.
Article 130 is to be read in consonance with Article 105 of the Family Code, viz:
Article 105. In case the future spouses agree in the marriage
settlements that the regime of conjugal partnership of gains shall
govern their property relations during marriage, the provisions in this
Chapter shall be of supplementary application.
The provisions of this Chapter shall also apply to conjugal
partnerships of gains already established between spouses before the
effectivity of this Code, without prejudice to vested rights already
acquired in accordance with the Civil Code or other laws, as provided
in Article 256. (n) [emphasis supplied]
It is clear that conjugal partnership of gains established before and after the
effectivity of the Family Code are governed by the rules found in Chapter 4 (Conjugal
Partnership of Gains) of Title IV (Property Relations Between Husband And Wife) of
the Family Code. Hence, any disposition of the conjugal property after the dissolution of
the conjugal partnership must be made only after the liquidation; otherwise, the
disposition is void.
Before applying such rules, however, the conjugal partnership of gains must be
subsisting at the time of the effectivity of the Family Code. There being no dispute that
Protacio, Sr. and Marta were married prior to the effectivity of the Family Code on August

39

3, 1988, their property relation was properly characterized as one of conjugal partnership
governed by the Civil Code. Upon Martas death in 1987, the conjugal partnership was
dissolved, pursuant to Article 175 (1) of the Civil Code,[15] and an implied ordinary coownership ensued among Protacio, Sr. and the other heirs of Marta with respect to her
share in the assets of the conjugal partnership pending a liquidation following its
liquidation.[16] The ensuing implied ordinary co-ownership was governed by Article 493 of
the Civil Code,[17] to wit:
Article 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 coowners, shall be limited to the portion which may be allotted to him in
the division upon the termination of the co-ownership. (399)
Protacio, Sr., although becoming a co-owner with his children in respect of Martas share in
the conjugal partnership, could not yet assert or claim title to any specific portion of
Martas share without an actual partition of the property being first done either by
agreement or by judicial decree. Until then, all that he had was an ideal or abstract quota
in Martas share.[18] Nonetheless, a co-owner could sell his undivided share; hence,
Protacio, Sr. had the right to freely sell and dispose of his undivided interest, but not the
interest of his co-owners.[19] Consequently, the sale by Protacio, Sr. and Rito as co-owners
without the consent of the other co-owners was not necessarily void, for the rights of the
selling co-owners were thereby effectively transferred, making the buyer (Servacio) a coowner of Martas share.[20] This result conforms to the 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).[21]
Article 105 of the Family Code, supra, expressly provides that the applicability of
the rules on dissolution of the conjugal partnership is without prejudice to vested rights
already acquired in accordance with the Civil Code or other laws. This provision gives
another reason not to declare the sale as entirely void. Indeed, such a declaration
prejudices the rights of Servacio who had already acquired the shares of Protacio, Sr. and
Rito in the property subject of the sale.
In their separate comments,[22] the respondents aver that each of the heirs had
already received a certain allotted portion at the time of the sale, and that Protacio, Sr.
and Rito sold only the portions adjudicated to and owned by them. However, they did not
present any public document on the allocation among her heirs, including themselves, of
specific shares in Martas estate. Neither did they aver that the conjugal properties had
already been liquidated and partitioned. Accordingly, pending a partition among the heirs
of Marta, the efficacy of the sale, and whether the extent of the property sold adversely
affected the interests of the petitioners might not yet be properly decided with finality.
The appropriate recourse to bring that about is to commence an action for judicial
partition, as instructed in Bailon-Casilao v. Court of Appeals,[23] to wit:

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.
The proper action in cases like this is not for the nullification of
the sale or for the recovery of possession of the thing owned in
common from the third person who substituted the co-owner or coowners who alienated their shares, but the DIVISION of the common
property as if it continued to remain in the possession of the co-owners
who possessed and administered it[Mainit v. Bandoy, supra].
Thus, it is now settled that the appropriate recourse of coowners in cases where their consent were not secured in a sale of the
entire property as well as in a sale merely of the undivided shares of
some of the co-owners is an action for PARTITION under Rule 69 of the
Revised Rules of Court. xxx[24]
In the meanwhile, Servacio would be a trustee for the benefit of the co-heirs of
her vendors in respect of any portion that might not be validly sold to her. The following
observations of Justice Paras are explanatory of this result, viz:
xxx [I]f it turns out that the property alienated or mortgaged really
would pertain to the share of the surviving spouse, then said
transaction is valid. If it turns out that there really would be, after
liquidation, no more conjugal assets then the whole transaction is null
and void. But if it turns out that half of the property thus alienated or
mortgaged belongs to the husband as his share in the conjugal
partnership, and half should go to the estate of the wife, then that
corresponding to the husband is valid, and that corresponding to the
other is not. Since all these can be determined only at the time the
liquidation is over, it follows logically that a disposal made by the
surviving spouse is not void ab initio. Thus, it has been held that the sale
of conjugal properties cannot be made by the surviving spouse without
the legal requirements. The sale is void as to the share of the deceased
spouse (except of course as to that portion of the husbands share
inherited by her as the surviving spouse). The buyers of the property
that could not be validly sold become trustees of said portion for the
benefit of the husbands other heirs, the cestui que trust ent. Said heirs
shall not be barred by prescription or by laches (See Cuison, et al. v.
Fernandez, et al.,L-11764, Jan.31, 1959.)[25]
WHEREFORE, we DENY the petition for review on certiorari;
and AFFIRM the decision of the Regional Trial Court.

40

The petitioners shall pay the costs of suit.

SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 165427
March 21, 2011
BETTY B. LACBAYAN, Petitioner,
vs.
BAYANI S. SAMOY, JR., Respondent.
DECISION
VILLARAMA, JR., J.:
This settles the petition for review on certiorari filed by petitioner Betty B. Lacbayan
against respondent Bayani S. Samoy, Jr. assailing the September 14, 2004 Decision1 of the
Court of Appeals (CA) in CA-G.R. CV No. 67596. The CA had affirmed the February 10, 2000
Decision2 of the Regional Trial Court (RTC), Branch 224, of Quezon City declaring
respondent as the sole owner of the properties involved in this suit and awarding to
himP100,000.00 as attorneys fees.
This suit stemmed from the following facts.
Petitioner and respondent met each other through a common friend sometime in 1978.
Despite respondent being already married, their relationship developed until petitioner
gave birth to respondents son on October 12, 1979.3
During their illicit relationship, petitioner and respondent, together with three more
incorporators, were able to establish a manpower services company.4 Five parcels of land
were also acquired during the said period and were registered in petitioner and
respondents names, ostensibly as husband and wife. The lands are briefly described as
follows:
1. A 255-square meter real estate property located at Malvar St., Quezon City
covered by TCT No. 303224 and registered in the name of Bayani S. Samoy, Jr.
"married to Betty Lacbayan."5
2. A 296-square meter real estate property located at Main Ave., Quezon City
covered by TCT No. 23301 and registered in the name of "Spouses Bayani S.
Samoy and Betty Lacbayan."6
3. A 300-square meter real estate property located at Matatag St., Quezon City
covered by TCT No. RT-38264 and registered in the name of Bayani S. Samoy, Jr.
"married to Betty Lacbayan Samoy."7
4. A 183.20-square meter real estate property located at Zobel St., Quezon City
covered by TCT No. 335193 and registered in the name of Bayani S. Samoy, Jr.
"married to Betty L. Samoy."8
5. A 400-square meter real estate property located at Don Enrique Heights,
Quezon City covered by TCT No. 90232 and registered in the name of Bayani S.
Samoy, Jr. "married to Betty L. Samoy."9
Initially, petitioner lived with her parents in Mapagbigay St., V. Luna, Quezon City. In 1983,
petitioner left her parents and decided to reside in the property located in Malvar St. in

Project 4, Quezon City. Later, she and their son transferred to Zobel St., also in Project 4,
and finally to the 400-square meter property in Don Enrique Heights.10
Eventually, however, their relationship turned sour and they decided to part ways
sometime in 1991. In 1998, both parties agreed to divide the said properties and
terminate their business partnership by executing a Partition Agreement.11 Initially,
respondent agreed to petitioners proposal that the properties in Malvar St. and Don
Enrique Heights be assigned to the latter, while the ownership over the three other
properties will go to respondent.12 However, when petitioner wanted additional demands
to be included in the partition agreement, respondent refused.13 Feeling aggrieved,
petitioner filed a complaint for judicial partition14 of the said properties before the RTC in
Quezon City on May 31, 1999.
In her complaint, petitioner averred that she and respondent started to live together as
husband and wife in 1979 without the benefit of marriage and worked together as
business partners, acquiring real properties amounting toP15,500,000.00.15 Respondent, in
his Answer,16 however, denied petitioners claim of cohabitation and said that the
properties were acquired out of his own personal funds without any contribution from
petitioner.17
During the trial, petitioner admitted that although they were together for almost 24 hours
a day in 1983 until 1991, respondent would still go home to his wife usually in the wee
hours of the morning.18 Petitioner likewise claimed that they acquired the said real estate
properties from the income of the company which she and respondent established.19
Respondent, meanwhile, testified that the properties were purchased from his personal
funds, salaries, dividends, allowances and commissions.20 He countered that the said
properties were registered in his name together with petitioner to exclude the same from
the property regime of respondent and his legal wife, and to prevent the possible
dissipation of the said properties since his legal wife was then a heavy
gambler.21 Respondent added that he also purchased the said properties as investment,
with the intention to sell them later on for the purchase or construction of a new
building.22
On February 10, 2000, the trial court rendered a decision dismissing the complaint for lack
of merit.23 In resolving the issue on ownership, the RTC decided to give considerable
weight to petitioners own admission that the properties were acquired not from her own
personal funds but from the income of the manpower services company over which she
owns a measly 3.33% share.24
Aggrieved, petitioner elevated the matter to the CA asserting that she is the pro indiviso
owner of one-half of the properties in dispute. Petitioner argued that the trial courts
decision subjected the certificates of title over the said properties to collateral attack
contrary to law and jurisprudence. Petitioner also contended that it is improper to thresh
out the issue on ownership in an action for partition.25
Unimpressed with petitioners arguments, the appellate court denied the appeal,
explaining in the following manner:
Appellants harping on the indefeasibility of the certificates of title covering the subject
realties is, to say the least, misplaced. Rather than the validity of said certificates which
was nowhere dealt with in the appealed decision, the record shows that what the trial
court determined therein was the ownership of the subject realties itself an issue
correlative to and a necessary adjunct of the claim of co-ownership upon which appellant
anchored her cause of action for partition. It bears emphasizing, moreover, that the rule
on the indefeasibility of a Torrens title applies only to original and not to subsequent

41

registration as that availed of by the parties in respect to the properties in litigation. To

our mind, the inapplicability of said principle to the case at bench is even more
underscored by the admitted falsity of the registration of the selfsame realties in the
parties name as husband and wife.
The same dearth of merit permeates appellants imputation of reversible error against the
trial court for supposedly failing to make the proper delineation between an action for
partition and an action involving ownership. 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, an action for partition may be seen to present simultaneously
two principal issues, i.e., first, the issue of whether the plaintiff is indeed a co-owner of the
property sought to be partitioned and, second assuming that the plaintiff successfully
hurdles the first the issue of how the property is to be divided between plaintiff and
defendant(s). Otherwise stated, the court must initially settle the issue of ownership for
the simple reason that it cannot properly issue an order to divide the property without
first making a determination as to the existence of co-ownership. Until and unless the
issue of ownership is definitely resolved, it would be premature to effect a partition of the
properties. This is precisely what the trial court did when it discounted the merit in
appellants claim of co-ownership.26
Hence, this petition premised on the following arguments:
I. Ownership cannot be passed upon in a partition case.
II. The partition agreement duly signed by respondent contains an admission
against respondents interest as to the existence of co-ownership between the
parties.
III. An action for partition cannot be defeated by the mere expedience of
repudiating co-ownership based on self-serving claims of exclusive ownership of
the properties in dispute.
IV. A Torrens title is the best evidence of ownership which cannot be outweighed
by respondents self-serving assertion to the contrary.
V. The properties involved were acquired by both parties through their actual
joint contribution of money, property, or industry.27
Noticeably, the last argument is essentially a question of fact, which we feel has been
squarely threshed out in the decisions of both the trial and appellate courts. We deem it
wise not to disturb the findings of the lower courts on the said matter absent any showing
that the instant case falls under the exceptions to the general rule that questions of fact
are beyond the ambit of the Courts jurisdiction in petitions under Rule 45 of the 1997
Rules of Civil Procedure, as amended. The issues may be summarized into only three:
I. Whether an action for partition precludes a settlement on the issue of
ownership;
II. Whether the Torrens title over the disputed properties was collaterally
attacked in the action for partition; and
III. Whether respondent is estopped from repudiating co-ownership over the
subject realties.
We find the petition bereft of merit.
Our disquisition in Municipality of Bian v. Garcia28 is definitive. There, we explained that
the determination as to the existence of co-ownership is necessary in the resolution of an
action for partition. Thus:
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, and a partition is proper (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, on 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. x x x
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 [c]ourt 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
[c]ourt 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. x x x29 (Emphasis supplied.)
While it is true that the complaint involved here is one for partition, the same is premised
on the existence or non-existence of co-ownership between the parties. Petitioner insists
she is a co-owner pro indiviso of the five real estate properties based on the transfer
certificates of title (TCTs) covering the subject properties. Respondent maintains
otherwise. Indubitably, therefore, until and unless this issue of co-ownership is definitely
and finally resolved, it would be premature to effect a partition of the disputed
properties.30 More importantly, the complaint will not even lie if the claimant, or
petitioner in this case, does not even have any rightful interest over the subject
properties.31
Would a resolution on the issue of ownership subject the Torrens title issued over the
disputed realties to a collateral attack? Most definitely, it would not.
There is no dispute that a Torrens certificate of title cannot be collaterally attacked,32 but
that rule is not material to the case at bar. What cannot be collaterally attacked is the
certificate of title and not the title itself.33 The certificate referred to is that document
issued by the Register of Deeds known as the TCT. In contrast, the title referred to by law
means ownership which is, more often than not, represented by that
document.34 Petitioner apparently confuses title with the certificate of title. 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.35
Moreover, 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 latter only serving as the best proof of ownership over a piece of
land. The certificate cannot always be considered as conclusive evidence of ownership.36 In
fact, 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 over the property subsequent to the issuance of the certificate of
title.37 Needless to say, registration does not vest ownership over a property, but may be
the best evidence thereof.1avvphi1
Finally, as to whether respondents assent to the initial partition agreement serves as an
admission against interest, in that the respondent is deemed to have admitted the
existence of co-ownership between him and petitioner, we rule in the negative.
An admission is any statement of fact made by a party against his interest or unfavorable
to the conclusion for which he contends or is inconsistent with the facts alleged by

42

him.38 Admission against interest is governed by Section 26 of Rule 130 of the Rules of
Court, which provides:
Sec. 26. Admissions of a party. The act, declaration or omission of a party as to a relevant
fact may be given in evidence against him.
To be admissible, an admission must (a) involve matters of fact, and not of law; (b) be
categorical and definite; (c) be knowingly and voluntarily made; and (d) be adverse to the
admitters interests, otherwise it would be self-serving and inadmissible.39
A careful perusal of the contents of the so-called Partition Agreement indicates that the
document involves matters which necessitate prior settlement of questions of law, basic
of which is a determination as to whether the parties have the right to freely divide among
themselves the subject properties. Moreover, to follow petitioners argument would be to
allow respondent not only to admit against his own interest but that of his legal spouse as
well, who may also be lawfully entitled co-ownership over the said properties. Respondent
is not allowed by law to waive whatever share his lawful spouse may have on the disputed
properties. Basic is the rule that rights may be waived, unless the waiver is contrary to law,
public order, public policy, morals, good customs or prejudicial to a third person with a
right recognized by law.40
Curiously, petitioner herself admitted that she did not assent to the Partition Agreement
after seeing the need to amend the same to include other matters. Petitioner does not
have any right to insist on the contents of an agreement she intentionally refused to sign.
As to the award of damages to respondent, we do not subscribe to the trial courts view
that respondent is entitled to attorneys fees. Unlike the trial court, we do not
commiserate with respondents predicament. The trial court ruled that respondent was
forced to litigate and engaged the services of his counsel to defend his interest as to
entitle him an award of P100,000.00 as attorneys fees. But we note that in the first place,
it was respondent himself who impressed upon petitioner that she has a right over the
involved properties. Secondly, respondents act of representing himself and petitioner as
husband and wife was a deliberate attempt to skirt the law and escape his legal obligation
to his lawful wife. Respondent, therefore, has no one but himself to blame the
consequences of his deceitful act which resulted in the filing of the complaint against him.
WHEREFORE, the petition is DENIED. The September 14, 2004 Decision of the Court of
Appeals in CA-G.R. CV No. 67596 is AFFIRMED with MODIFICATION. Respondent Bayani S.
Samoy, Jr. is hereby declared the sole owner of the disputed properties, without prejudice
to any claim his legal wife may have filed or may file against him. The award
of P100,000.00 as attorneys fees in respondents favor is DELETED.
No costs.
SO ORDERED.
MARTIN S. VILLARAMA, JR.
Associate Justice
WE CONCUR:
CONCHITA CARPIO MORALES
Associate Justice
Chairperson
ARTURO D. BRION
LUCAS P. BERSAMIN
Associate Justice
Associate Justice
MARIA LOURDES P. A. SERENO
Associate Justice

ATTESTATION
I attest that the conclusions in the above Decision had been reached in consultation
before the case was assigned to the writer of the opinion of the Courts Division.
CONCHITA CARPIO MORALES
Associate Justice
Chairperson, Third Division
CERTIFICATION
Pursuant to Section 13, Article VIII of the 1987 Constitution and the Division Chairpersons
Attestation, I certify that the conclusions in the above Decision had been reached in
consultation before the case was assigned to the writer of the opinion of the Courts
Division.
RENATO C. CORONA
Chief Justice

Republic of the Philippines

Supreme Court
Baguio City
SECOND DIVISION
CRISPIN DICHOSO, JR.,
EVELYN DICHOSO VALDEZ, and ROSEMARIE DICHOSO PE BENITO,
Petitioners,

G.R. No. 180282

- versus -

CARPIO, J.,
Chairperson,
NACHURA,
PERALTA,
ABAD, and
MENDOZA, JJ.
Promulgated:
April 11, 2011

PATROCINIO L. MARCOS,
Respondent.

Present:

x-----------------------------------------------------------------------------------x
DECISION
NACHURA, J.:

43

This is a petition for review on certiorari under Rule 45 of the Rules of Court, seeking to
reverse and set aside the Court of Appeals (CA) Decision[1] dated January 31, 2007 and
Resolution[2] dated October 23, 2007 in CA-G.R. CV No. 85471. The assailed Decision
reversed and set aside the July 15, 2005 decision[3] of the Regional Trial Court (RTC) of
Laoag City, Branch 14, in Civil Case No. 12581-14; while the assailed Resolution denied the
Motion for Reconsideration filed by petitioners Crispin Dichoso, Jr., Evelyn Dichoso Valdez,
and Rosemarie Dichoso Pe Benito.
The facts of the case, as culled from the records, are as follows:
On August 2, 2002, petitioners filed a Complaint for Easement of Right of Way [4] against
respondent Patrocinio L. Marcos. In their complaint, petitioners alleged that they are the
owners of Lot No. 21553 of the Cadastral Survey of Laoag City, covered by Transfer
Certificate of Title No. T-31219; while respondent is the owner of Lot No. 1. As petitioners
had no access to a public road to and from their property, they claimed to have used a
portion of Lot No. 1 in accessing the road since 1970. Respondent, however, blocked the
passageway with piles of sand. Though petitioners have been granted another passageway
by the spouses Benjamin and Sylvia Arce (Spouses Arce), the owners of another adjacent
lot, designated as Lot No. 21559-B, the former instituted the complaint before the RTC
and prayed that:
WHEREFORE, it is respectfully prayed of this Honorable Court that
judgment be rendered:
1. Granting the plaintiffs right of way over an area of 54 square meters
more or less of Lot 01 by paying the defendant the amount
of P54,000.00, and that the right be annotated on defendants title;
2. Ordering the defendant to pay the plaintiffs the sum of P30,000.00 as
damages for attorneys fees and costs of suit;
Other reliefs, just and equitable under the premises, are likewise
sought.[5]
Instead of filing an Answer, respondent moved[6] for the dismissal of the complaint on the
ground of lack of cause of action and noncompliance with the requisite certificate of nonforum shopping.
During the hearing on respondents motion to dismiss, the parties agreed that an ocular
inspection of the subject properties be conducted. After the inspection, the RTC directed
the parties to submit their respective position papers.

available to petitioners granted by the Spouses Arce. Thus, there is no need to establish
another easement over respondents property.
In an Order[9] dated July 6, 2005, the RTC declared that respondents answer failed to
tender an issue, and opted to render judgment on the pleadings and thus deemed the
case submitted for decision.
On July 15, 2005, the RTC rendered a decision[10] in favor of petitioners, the dispositive
portion of which reads, as follows:
WHEREFORE, in view of the foregoing, judgment is hereby rendered, as
follows:
1.

granting plaintiffs a right of way over an area of 54

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

2.

ordering plaintiffs to pay defendant the amount

of P54,000.00 as proper indemnity; and

3.

ordering the Register of Deeds of Laoag City to duly

annotate this right of way on defendants title to the
property.

SO ORDERED.[11]
The RTC found that petitioners adequately established the requisites to justify an
easement of right of way in accordance with Articles 649 and 650 of the Civil Code. The
trial court likewise declared petitioners in good faith as they expressed their willingness to
pay proper indemnity.[12]
On appeal, the CA reversed and set aside the RTC decision and consequently
dismissed petitioners complaint. Considering that a right of way had already been granted
by the (other) servient estate, designated as Lot No. 21559-B and owned by the Spouses
Arce, the appellate court concluded that there is no need to establish an easement over
respondents property. The CA explained that, while the alternative route through the
property of the Spouses Arce is longer and circuitous, said access road is adequate. It
emphasized that the convenience of the dominant estate is never the gauge for the grant
of compulsory right of way. Thus, the opening of another passageway is unjustified. [13]
Aggrieved, petitioners come before this Court, raising the following issues:

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

I.
CAN PETITIONERS BE ENTITLED TO A GRANT OF LEGAL
EASEMENT OF RIGHT OF WAY FROM THEIR LANDLOCKED PROPERTY
THROUGH THE PROPERTY OF PRIVATE RESPONDENT WHICH IS THE

44

SHORTEST ROUTE IN GOING TO AND FROM THEIR PROPERTY TO

THE PUBLIC STREET AND WHERE THEY USED TO PASS?

The present case falls under the 7th exception, as the RTC and the CA arrived at
conflicting findings of fact and conclusions of law.

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

The conferment of a legal easement of right of way is governed by Articles 649

and 650 of the Civil Code, quoted below for easy reference:[16]
Article 649. The owner, or any person who by virtue of a real
right may cultivate or use any immovable, which is surrounded by other
immovables pertaining to other persons and without adequate outlet to
a public highway, is entitled to demand a right of way through the
neighboring estates, after payment of the proper indemnity.

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

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.

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

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

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

conjectures;

This easement is not compulsory if the isolation of the immovable is

due to the proprietors own acts.

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

or impossible;

Article 650. The easement of right of way shall be established at the

point least prejudicial to the servient estate, and, insofar as consistent
with this rule, where the distance from the dominant estate to a public
highway may be the shortest.

(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;

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

met:

(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;

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;

(8) when the findings are conclusions without citation of

specific evidence on which they are based;

3. The isolation is not due to the acts of the proprietor of the

dominant estate; and

(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

4. The right of way claimed is at the point least prejudicial to

the servient estate; and insofar as consistent with this rule, where the
distance from the dominant estate to a public highway may be the
shortest.[17]

(10) when the findings of fact are premised on the supposed

absence of evidence and contradicted by the evidence on record.[15]

45

Petitioners may be correct in the theoretical reading of Articles 649 and 650 of
the Civil Code, but they nevertheless failed to show sufficient factual evidence to satisfy
the above-enumerated requirements.[18]
It must be stressed that, by its very nature, and when considered with reference
to the obligations imposed on the servient estate, an easement involves an abnormal
restriction on the property rights of the servient owner and is regarded as a charge or
encumbrance on the servient estate. It is incumbent upon the owner of the dominant
estate to establish by clear and convincing evidence the presence of all the preconditions
before his claim for easement of right of way may be granted.[19] Petitioners failed in this
regard.
Admittedly, petitioners had been granted a right of way through the other
adjacent lot owned by the Spouses Arce. In fact, other lot owners use the said outlet in
going to and coming from the public highway. Clearly, there is an existing outlet to and
from the public road.
However, petitioners claim that the outlet is longer and circuitous, and they have
to pass through other lots owned by different owners before they could get to the
highway. We find petitioners concept of what is adequate outlet a complete disregard of
the well-entrenched doctrine that in order to justify the imposition of an easement of right
of way, there must be real, not fictitious or artificial, necessity for it. Mere convenience for
the dominant estate is not what is required by law as the basis of setting up a compulsory
easement. Even in the face of necessity, if it can be satisfied without imposing the
easement, the same should not be imposed.[20]

estate to a public highway, as in this case, even when the said outlet, for one reason or
another, be inconvenient, the need to open up another servitude is entirely unjustified.[21]
Thus, in Cristobal v. CA,[22] the Court disallowed the easement prayed for because
an outlet already exists which is a path walk located at the left side of petitioners property
and which is connected to a private road about five hundred (500) meters long. The
private road, in turn, leads to Ma. Elena Street, which is about 2.5 meters wide, and finally,
to Visayas Avenue. This outlet was determined by the Court to be sufficient for the needs
of the dominant estate.
Also in Floro v. Llenado,[23] we refused to impose a right of way over petitioners
property although private respondents alternative route was admittedly inconvenient
because he had to traverse several ricelands and rice paddies belonging to different
persons, not to mention that said passage is impassable during the rainy season.
And in Ramos v. Gatchalian Realty, Inc.,[24] this Court refused to grant the
easement prayed for even if petitioner had to pass through lots belonging to other
owners, as temporary ingress and egress, which lots were grassy, cogonal, and greatly
inconvenient due to flood and mud because such grant would run counter to the
prevailing jurisprudence that mere convenience for the dominant estate does not suffice
to serve as basis for the easement.[25]
WHEREFORE, premises considered, the petition is DENIED. The Court of Appeals
Decision dated January 31, 2007 and Resolution dated October 23, 2007 in CA-G.R. CV No.
85471 are AFFIRMED.
SO ORDERED.
Republic of the Philippines
Supreme Court
Manila

We quote with approval the CAs observations in this wise:

As it shows, [petitioners] had been granted a right of way
through the adjacent estate of Spouses Arce before the complaint
below was even filed. [Respondent] alleged that this right of way is
being used by the other estates which are similarly situated as
[petitioners]. [Petitioners] do not dispute this fact. There is also a
reason to believe that this right of way is Spouses Arces outlet to a
public road since their property, as it appears from the Sketch Map, is
also surrounded by other estates. The fact that Spouses Arce are not
insisting on a right of way through respondents property, although an
opening on the latters property is undoubtedly the most direct and
shortest distance to P. Gomez St. from the formers property, bolsters
our conviction that they have adequate outlet to the highway which
they are now likewise making available to [petitioners].
The convenience of the dominant estate has never been the gauge for the grant
of compulsory right of way. To be sure, the true standard for the grant of the legal right is
adequacy. Hence, when there is already an existing adequate outlet from the dominant

SECOND DIVISION
MARGARITA F. CASTRO,

G.R. No. 183719

Petitioner,
Present:
CARPIO, J.,
Chairperson,
NACHURA,
PERALTA,
ABAD, and
MENDOZA, JJ.

- versus -

Promulgated:
NAPOLEON A. MONSOD,
Respondent.

February 2, 2011

46

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

DECISION
NACHURA, J.:

Before the Court is a petition for review on certiorari under Rule 45 of the Rules of Court,
assailing the Decision[1] dated May 25, 2007 and the Resolution[2] dated July 14, 2008 of
the Court of Appeals (CA) in CA-G.R. CV No. 83973.

47

The antecedents of the case are as follows:

Petitioner is the registered owner of a parcel of land located on Garnet
Street, Manuela Homes, Pamplona, Las Pias City, and covered by Transfer Certificate of
Title (TCT) No. T-36071, with an area of one hundred thirty (130) square meters
(sq.m.). Respondent, on the other hand, is the owner of the property adjoining the lot of
petitioner, located on Lyra Street, Moonwalk Village, Phase 2, Las Pias City. There is a
concrete
fence,
more
or
less
two
(2)
meters
high,
dividing Manuela Homesfrom Moonwalk Village.[3]
On February 29, 2000, respondent caused the annotation of an adverse claim against sixtyfive (65) sq.m. of the property of petitioner covered by TCT No. T-36071. The adverse
claim was filed without any claim of ownership over the property. Respondent was merely
asserting the existing legal easement of lateral and subjacent support at the rear portion
of his estate to prevent the property from collapsing, since his property is located at an
elevated plateau of fifteen (15) feet, more or less, above the level of petitioners
property.[4] Respondent also filed a complaint for malicious mischief and malicious
destruction before the office of the barangaychairman.[5]
In defiance, petitioner filed a complaint for damages with temporary restraining
order/writ of preliminary injunction before the Regional Trial Court (RTC) of Las Pias City.
Petitioner also prayed that the Register of Deeds of Las Pias City be ordered to cancel the
annotation of the adverse claim on TCT No. T-36071.[6]
Prior to the filing of the case before the RTC, there were deposits of soil and rocks about
two (2) meters away from the front door of the house of
petitioner. As such, petitioner was not able to park her vehicle at the dead-end portion
of Garnet Street. When petitioner noticed a leak that caused the front portion of her
house to be slippery, she hired construction workers to see where the leak was coming
from. The workers had already started digging when police officers sent by respondent
came and stopped the workers from finishing their job.[7]
Petitioner averred that when she bought the property from Manuela Homes in 1994,
there was no annotation or existence of any easement over the property. Respondent
neither asked permission nor talked to her with regard to the use of 65 sq.m. of her
property as easement. Upon learning of the adverse claim, she felt disturbed and
experienced sleepless nights for fear that she would not be able to sell her
property. Petitioner admitted that TCT No. 36071 does not cover the open space at the
dead-end portion of Garnet Street.[8]
For his part, respondent claimed that he and his family had been residing
in Moonwalk Village since June 1984. Adjacent to his property is the land of petitioner
inManuela Homes. When he bought the property in 1983, the land elevation
of Moonwalk Village was almost on the same level as Manuela Homes. However,
sometime in 1985 and 1986, Pilar Development Corporation, the developer
of Manuela Homes, bulldozed, excavated, and transferred portions of the elevated land to
the lower portions of Manuela Homes. Thus, Manuela Homes became lower
than Moonwalk Village.[9]
Before the said excavation, respondent personally complained to Pilar

Development Corporation and was assured that, as provided by the National Building
Code, an embankment will be retained at the boundary of Manuela Homes and Moonwalk
Village, which is more or less fifteen (15) feet higher than Manuela Homes. [10]
Manuela Homes retained the embankment consisting of soil and rocks. Respondent had
the open space riprapped with stones as reinforcement against any potential soil erosion,
earthquake, and possible digging by any person.
Respondent asserted that the affidavit of adverse claim was for the annotation of the
lateral and subjacent easement of his property over the property of petitioner, in view of
the latters manifest determination to remove the embankment left by the developer
of Manuela Homes.
On October 11, 2004, the RTC rendered a decision,[11] the dispositive portion of which
reads:
WHEREFORE, premises considered, this court hereby renders judgment:
(1) ordering the cancellation of [respondents] adverse claim at the back
of Transfer Certificate of Title No. T-36071 at the expense of
[respondent] Napoleon Monsod; (2) ordering the said [respondent] to
pay the herein [petitioner] the amount of Php50,000.00 as moral
damages; and (3) dismissing [petitioners] claim for actual damages,
attorneys fees, litigation costs and costs of suit and [respondents]
compulsory counterclaim for lack of merit.
SO ORDERED.[12]
The trial court ratiocinated that the adverse claim of respondent was non-registrable
considering that the basis of his claim was an easement and not an interest adverse to the
registered owner, and neither did he contest the title of petitioner. Furthermore, the
adverse claim of respondent failed to comply with the requisites provided under Section
70 of Presidential Decree No. 1529.[13]
On appeal, the CA reversed the decision of the trial court in a Decision[14] dated May 25,
2007, the fallo of which reads:
WHEREFORE, premises considered, the instant appeal is GRANTED. The
Decision of the Regional Trial Court, Branch 198, Las Pias City dated
October 11, 2004 is REVERSED and SET ASIDE. The Court hereby orders
the retention of the annotation at the back of Transfer Certificate of
Title No. T-36071, not as an adverse claim, but a recognition of the
existence of a legal easement of subjacent and lateral support
constituted on the lengthwise or horizontal land support/embankment
area of sixty-five (65) square meters, more or less, of the property of
[petitioner] Margarita Castro. The writ of preliminary injunction issued
by this Court on April 18, 2006 is hereby made permanent. [Petitioners]
claim for damages is likewise DISMISSED.
SO ORDERED.[15]

48

The CA ruled that while respondents adverse claim could not be sanctioned because it did
not fall under the requisites for registering an adverse claim, the same might be duly
annotated in the title as recognition of the existence of a legal easement of subjacent and
lateral support. The purpose of the annotation was to prevent petitioner from making
injurious excavations on the subject embankment as to deprive the residential house and
lot of respondent of its natural support and cause it to collapse. Respondent only asked
that petitioner respect the legal easement already existing thereon.[16]
On June 15, 2007, petitioner filed a motion for reconsideration. However, the CA denied
the same in a Resolution[17] dated July 14, 2008.
Hence, this petition.
The issue in this case is whether the easement of lateral and subjacent support exists on
the subject adjacent properties and, if it does, whether the same may be annotated at the
back of the title of the servient estate.
Article 437 of the Civil Code provides that 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. However, such right of the owner
is not absolute and is subject to the following limitations: (1)servitudes or
easements,[18] (2) special laws,[19] (3) ordinances,[20] (4) reasonable requirements of aerial
navigation,[21] and (5) rights of third persons.[22]
Respondent filed before the RTC an affidavit of adverse claim, the pertinent portions of
which read:
5. That our adverse claim consists of rights of legal or compulsory
easement of lateral and subjacent support (under the Civil Code) over a
portion of the above-described property of owner Margarita F. Castro,
that is, covering the lengthwise or horizontal land support/embankment
area of sixty-five (65) square meters, more or less.
6. That said registered owner has attempted to destroy and/or remove
portions of the existing lateral/subjacent land and cement supports
adjoining the said two properties. In fact, a portion of the easement was
already destroyed/removed, to the continuing prejudice of herein
adverse claimant, and that a formal complaint against said registered
owner was filed by the herein adverse claimant before the Office of the
Barangay Chairman of Talon V, Las Pias City and the same proved
futile.[23]
Respondents assertion that he has an adverse claim over the 65 sq.m. property of
petitioner is misplaced since he does not have a claim over the ownership of the land. The
annotation of an adverse claim over registered land under Section 70 of Presidential
Decree 1529[24] requires a claim on the title of the disputed land. Annotation is done 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.[25]
In reality, what respondent is claiming is a judicial recognition of the existence of the
easement of subjacent and lateral support over the 65 sq. m. portion of petitioners
property covering the land support/embankment area. His reason for the annotation is
only to prevent petitioner from removing the embankment or from digging on the
property for fear of soil erosion that might weaken the foundation of the rear portion of
his property which is adjacent to the property of petitioner.
An easement or servitude is an encumbrance imposed upon an immovable for the benefit
of another immovable belonging to a different owner.[26] There are two kinds of
easements according to source. An easement is established either by law or by will of the
owners.[27] The courts cannot impose or constitute any servitude where none existed. They
can only declare its existence if in reality it exists by law or by the will of the owners. There
are therefore no judicial easements.[28]
Article 684 of the Civil Code provides that no proprietor shall make such excavations upon
his land as to deprive any adjacent land or building of sufficient lateral or subjacent
support. An owner, by virtue of his surface right, may make excavations on his land, but
his right is subject to the limitation that he shall not deprive any adjacent land or building
of sufficient lateral or subjacent support. Between two adjacent landowners, each has an
absolute property right to have his land laterally supported by the soil of his neighbor, and
if either, in excavating on his own premises, he so disturbs the lateral support of his
neighbors land as to cause it, or, in its natural state, by the pressure of its own weight, to
fall away or slide from its position, the one so excavating is liable.[29]
In the instant case, an easement of subjacent and lateral support exists in favor of
respondent. It was established that the properties of petitioner and respondent adjoin
each other. The residential house and lot of respondent is located on an elevated plateau
of fifteen (15) feet above the level of petitioners property. The embankment and the
riprapped stones have been in existence even before petitioner became the owner of the
property. It was proven that petitioner has been making excavations and diggings on the
subject embankment and, unless restrained, the continued excavation of the embankment
could cause the foundation of the rear portion of the house of respondent to collapse,
resulting in the destruction of a huge part of the family dwelling.[30]
We sustain the CA in declaring that a permanent injunction on the part of petitioner from
making injurious excavations is necessary in order to protect the interest of respondent.
However, an annotation of the existence of the subjacent and lateral support is no longer
necessary. It exists whether or not it is annotated or registered in the registry of property.
A judicial recognition of the same already binds the property and the owner of the same,
including her successors-in-interest. Otherwise, every adjoining landowner would come to
court or have the easement of subjacent and lateral support registered in order for it to be
recognized and respected.
WHEREFORE, in view of the foregoing, the Decision dated May 25, 2007 and the
Resolution dated July 14, 2008 of the Court of Appeals in CA-G.R. CV No. 83973 are
hereby AFFIRMED WITH MODIFICATION that the annotation at the back of Transfer

49

Certificate of Title No. T-36071, recognizing the existence of the legal easement of
subjacent and lateral support constituted on the lengthwise or horizontal land
support/embankment area of sixty-five (65) square meters, more or less, of the property
of petitioner Margarita F. Castro, is hereby ordered removed.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 172804
January 24, 2011
GONZALO VILLANUEVA, represented by his heirs, Petitioner,
vs.
SPOUSES FROILAN and LEONILA BRANOCO, Respondents.
DECISION
CARPIO, J.:
The Case
This resolves the petition for review1 of the ruling2 of the Court of Appeals dismissing a suit
to recover a realty.
The Facts
Petitioner Gonzalo Villanueva (petitioner), here represented by his heirs,3 sued
respondents, spouses Froilan and Leonila Branoco (respondents), in the Regional Trial
Court of Naval, Biliran (trial court) to recover a 3,492 square-meter parcel of land in
Amambajag, Culaba, Leyte (Property) and collect damages. Petitioner claimed ownership
over the Property through purchase in July 1971 from Casimiro Vere (Vere), who, in turn,
bought the Property from Alvegia Rodrigo (Rodrigo) in August 1970. Petitioner declared
the Property in his name for tax purposes soon after acquiring it.
In their Answer, respondents similarly claimed ownership over the Property through
purchase in July 1983 from Eufracia Rodriguez (Rodriguez) to whom Rodrigo donated the
Property in May 1965. The two-page deed of donation (Deed), signed at the bottom by the
parties and two witnesses, reads in full:
KNOW ALL MEN BY THESE PRESENTS:
That I, ALVEGIA RODRIGO, Filipino, of legal age, widow of the late Juan Arcillas, a resident
of Barrio Bool, municipality of Culaba, subprovince of Biliran, Leyte del Norte, Philippines,
hereby depose and say:
That as we live[d] together as husband and wife with Juan Arcillas, we begot children,
namely: LUCIO, VICENTA, SEGUNDINA, and ADELAIDA, all surnamed ARCILLAS, and by
reason of poverty which I suffered while our children were still young; and because my
husband Juan Arcillas aware as he was with our destitution separated us [sic] and left for
Cebu; and from then on never cared what happened to his family; and because of that one
EUFRACIA RODRIGUEZ, one of my nieces who also suffered with our poverty, obedient as
she was to all the works in our house, and because of the love and affection which I feel
[for] her, I have one parcel of land located at Sitio Amambajag, Culaba, Leyte bearing Tax
Decl. No. 1878 declared in the name of Alvegia Rodrigo, I give (devise) said land in favor of
EUFRACIA RODRIGUEZ, her heirs, successors, and assigns together with all the

improvements existing thereon, which parcel of land is more or less described and
bounded as follows:
1. Bounded North by Amambajag River; East, Benito Picao; South, Teofilo Uyvico; and
West, by Public land; 2. It has an area of 3,492 square meters more or less; 3. It is planted
to coconuts now bearing fruits; 4. Having an assessed value of P240.00; 5. It is now in the
possession of EUFRACIA RODRIGUEZ since May 21, 1962 in the concept of an owner, but
the Deed of Donation or that ownership be vested on her upon my demise.
That I FURTHER DECLARE, and I reiterate that the land above described, I already devise in
favor of EUFRACIA RODRIGUEZ since May 21, 1962, her heirs, assigns, and that if the
herein Donee predeceases me, the same land will not be reverted to the Donor, but will
be inherited by the heirs of EUFRACIA RODRIGUEZ;
That I EUFRACIA RODRIGUEZ, hereby accept the land above described from Inay Alvegia
Rodrigo and I am much grateful to her and praying further for a longer life; however, I will
give one half (1/2) of the produce of the land to Apoy Alve during her lifetime. 4
Respondents entered the Property in 1983 and paid taxes afterwards.
The Ruling of the Trial Court
The trial court ruled for petitioner, declared him owner of the Property, and ordered
respondents to surrender possession to petitioner, and to pay damages, the value of the
Propertys produce since 1982 until petitioners repossession and the costs.5 The trial
court rejected respondents claim of ownership after treating the Deed as a
donation mortis causa which Rodrigo effectively cancelled by selling the Property to Vere
in 1970.6 Thus, by the time Rodriguez sold the Property to respondents in 1983, she had
no title to transfer.
Respondents appealed to the Court of Appeals (CA), imputing error in the trial courts
interpretation of the Deed as a testamentary disposition instead of an inter vivos donation,
passing title to Rodriguez upon its execution.
Ruling of the Court of Appeals
The CA granted respondents appeal and set aside the trial courts ruling. While conceding
that the "language of the [Deed is] x x x confusing and which could admit of possible
different interpretations,"7 the CA found the following factors pivotal to its reading of the
Deed as donation inter vivos: (1) Rodriguez had been in possession of the Property as
owner since 21 May 1962, subject to the delivery of part of the produce to Apoy Alve; (2)
the Deeds consideration was not Rodrigos death but her "love and affection" for
Rodriguez, considering the services the latter rendered; (3) Rodrigo waived dominion over
the Property in case Rodriguez predeceases her, implying its inclusion in Rodriguezs
estate; and (4) Rodriguez accepted the donation in the Deed itself, an act necessary to
effectuate donations inter vivos, not devises.8 Accordingly, the CA upheld the sale between
Rodriguez and respondents, and, conversely found the sale between Rodrigo and
petitioners predecessor-in-interest, Vere, void for Rodrigos lack of title.
In this petition, petitioner seeks the reinstatement of the trial courts ruling. Alternatively,
petitioner claims ownership over the Property through acquisitive prescription, having
allegedly occupied it for more than 10 years.9
Respondents see no reversible error in the CAs ruling and pray for its affirmance.
The Issue
The threshold question is whether petitioners title over the Property is superior to
respondents. The resolution of this issue rests, in turn, on whether the contract between
the parties predecessors-in-interest, Rodrigo and Rodriguez, was a donation or a devise. If
the former, respondents hold superior title, having bought the Property from Rodriguez. If

50

the latter, petitioner prevails, having obtained title from Rodrigo under a deed of sale the
execution of which impliedly revoked the earlier devise to Rodriguez.
The Ruling of the Court
We find respondents title superior, and thus, affirm the CA.
Naked Title Passed from Rodrigo to Rodriguez Under a Perfected Donation
We examine the juridical nature of the Deed whether it passed title to Rodriguez upon
its execution or is effective only upon Rodrigos death using principles distilled from
relevant jurisprudence. Post-mortem dispositions typically
(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;
(2) That before the *donors+ 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;
(3) That the transfer should be void if the transferor should survive the
transferee.10
Further
[4] [T]he specification in a deed of the causes whereby the act may be revoked by
the donor indicates that the donation is inter vivos, rather than a
disposition mortis causa[;]
[5] That the designation of the donation as mortis causa, or a provision in the
deed to the effect that the donation is "to take effect at the death of the donor"
are not controlling criteria; such statements are to be construed together with
the rest of the instrument, in order to give effect to the real intent of the
transferor[;] [and]
(6) That in case of doubt, the conveyance should be deemed donation inter
vivos rather than mortis causa, in order to avoid uncertainty as to the ownership
of the property subject of the deed.11
It is immediately apparent that Rodrigo passed naked title to Rodriguez under a perfected
donation inter vivos. First. Rodrigo stipulated that "if the herein Donee predeceases me,
the [Property] will not be reverted to the Donor, but will be inherited by the heirs of x x x
Rodriguez," signaling the irrevocability of the passage of title to Rodriguezs estate,
waiving Rodrigos right to reclaim title. This transfer of title was perfected the moment
Rodrigo learned of Rodriguezs acceptance of the disposition12 which, being reflected in
the Deed, took place on the day of its execution on 3 May 1965. Rodrigos acceptance of
the transfer underscores its essence as a gift in presenti, not in futuro, as only
donations inter vivos need acceptance by the recipient.13 Indeed, had Rodrigo wished to
retain full title over the Property, she could have easily stipulated, as the testator did in
another case, that "the donor, may transfer, sell, or encumber to any person or entity the
properties here donated x x x"14 or used words to that effect. Instead, Rodrigo expressly
waived title over the Property in case Rodriguez predeceases her.
In a bid to diffuse the non-reversion stipulations damning effect on his case, petitioner
tries to profit from it, contending it is a fideicommissary substitution clause. 15 Petitioner
assumes the fact he is laboring to prove. The question of the Deeds juridical nature,
whether it is a will or a donation, is the crux of the present controversy. By treating the
clause in question as mandating fideicommissary substitution, a mode of testamentary
disposition by which the first heir instituted is entrusted with the obligation to preserve
and to transmit to a second heir the whole or part of the inheritance,16 petitioner assumes

that the Deed is a will. Neither the Deeds text nor the import of the contested clause
supports petitioners theory.
Second. What Rodrigo reserved for herself was only the beneficial title to the Property,
evident from Rodriguezs undertaking to "give one *half+ x x x of the produce of the land to
Apoy Alve during her lifetime."17 Thus, the Deeds stipulation that "the ownership shall be
vested on [Rodriguez] upon my demise," taking into account the non-reversion clause,
could only refer to Rodrigos beneficial title. We arrived at the same conclusion in Balaqui
v. Dongso18 where, as here, the donor, while "b[inding] herself to answer to the [donor]
and her heirs x x x that none shall question or disturb [the donees+ right," also stipulated
that the donation "does not pass title to [the donee] during my lifetime; but when I die,
[the donee] shall be the true owner" of the donated parcels of land. In finding the
disposition as a gift inter vivos, the Court reasoned:
Taking the deed x x x as a whole, x x x x it is noted that in the same deed [the donor]
guaranteed to [the donee] and her heirs and successors, the right to said property thus
conferred. From the moment [the donor] guaranteed the right granted by her to [the
donee] to the two parcels of land by virtue of the deed of gift, she surrendered such right;
otherwise there would be no need to guarantee said right. Therefore, when [the donor]
used the words upon which the appellants base their contention that the gift in question is
a donation mortis causa [that the gift "does not pass title during my lifetime; but when I
die, she shall be the true owner of the two aforementioned parcels"] the donor meant
nothing else than that she reserved of herself the possession and usufruct of said two
parcels of land until her death, at which time the donee would be able to dispose of them
freely.19(Emphasis supplied)
Indeed, if Rodrigo still retained full ownership over the Property, it was unnecessary for
her to reserve partial usufructuary right over it.20
Third. The existence of consideration other than the donors death, such as the donors
love and affection to the donee and the services the latter rendered, while also true of
devises, nevertheless "corroborates the express irrevocability of x x x [inter vivos]
transfers."21 Thus, the CA committed no error in giving weight to Rodrigos statement of
"love and affection" for Rodriguez, her niece, as consideration for the gift, to underscore
its finding.
It will not do, therefore, for petitioner to cherry-pick stipulations from the Deed tending to
serve his cause (e.g. "the ownership shall be vested on [Rodriguez] upon my demise" and
"devise"). Dispositions bearing contradictory stipulations are interpreted wholistically, to
give effect to the donors intent. In no less than seven cases featuring deeds of donations
styled as "mortis causa" dispositions, the Court, after going over the deeds, eventually
considered the transfers inter vivos,22 consistent with the principle that "the designation of
the donation as mortis causa, or a provision in the deed to the effect that the donation is
to take effect at the death of the donor are not controlling criteria *but+ x x x are to be
construed together with the rest of the instrument, in order to give effect to the real
intent of the transferor."23 Indeed, doubts on the nature of dispositions are resolved to
favor inter vivostransfers "to avoid uncertainty as to the ownership of the property subject
of the deed."24
Nor can petitioner capitalize on Rodrigos post-donation transfer of the Property to Vere
as proof of her retention of ownership. If such were the barometer in interpreting deeds
of donation, not only will great legal uncertainty be visited on gratuitous dispositions, this
will give license to rogue property owners to set at naught perfected transfers of titles,

51

which, while founded on liberality, is a valid mode of passing ownership. The interest of
settled property dispositions counsels against licensing such practice.25
Accordingly, having irrevocably transferred naked title over the Property to Rodriguez in
1965, Rodrigo "cannot afterwards revoke the donation nor dispose of the said property in
favor of another."26 Thus, Rodrigos post-donation sale of the Property vested no title to
Vere. As Veres successor-in-interest, petitioner acquired no better right than him. On the
other hand, respondents bought the Property from Rodriguez, thus acquiring the latters
title which they may invoke against all adverse claimants, including petitioner.
Petitioner Acquired No Title Over the Property
Alternatively, petitioner grounds his claim of ownership over the Property through his and
Veres combined possession of the Property for more than ten years, counted from Veres
purchase of the Property from Rodrigo in 1970 until petitioner initiated his suit in the trial
court in February 1986.27 Petitioner anchors his contention on an unfounded legal
assumption. The ten year ordinary prescriptive period to acquire title through possession
of real property in the concept of an owner requires uninterrupted possession coupled
with just title and good faith.28There is just title 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.29 Good faith, on the other hand, consists in the reasonable belief that the person
from whom the possessor received the thing was the owner thereof, and could transmit
his ownership.30
Although Vere and petitioner arguably had just title having successively acquired the
Property through sale, neither was a good faith possessor. As Rodrigo herself disclosed in
the Deed, Rodriguez already occupied and possessed the Property "in the concept of an
owner" ("como tag-iya"31) since 21 May 1962, nearly three years before Rodrigos
donation in 3 May 1965 and seven years before Vere bought the Property from Rodrigo.
This admission against interest binds Rodrigo and all those tracing title to the Property
through her, including Vere and petitioner. Indeed, petitioners insistent claim that
Rodriguez occupied the Property only in 1982, when she started paying taxes, finds no
basis in the records. In short, when Vere bought the Property from Rodrigo in 1970,
Rodriguez was in possession of the Property, a fact that prevented Vere from being a
buyer in good faith.
Lacking good faith possession, petitioners only other recourse to maintain his claim of
ownership by prescription is to show open, continuous and adverse possession of the
Property for 30 years.32 Undeniably, petitioner is unable to meet this requirement.1avvphil
Ancillary Matters Petitioner Raises Irrelevant
Petitioner brings to the Courts attention facts which, according to him, support his theory
that Rodrigo never passed ownership over the Property to Rodriguez, namely, that
Rodriguez registered the Deed and paid taxes on the Property only in 1982 and Rodriguez
obtained from Vere in 1981 a waiver of the latters "right of ownership" over the Property.
None of these facts detract from our conclusion that under the text of the Deed and based
on the contemporaneous acts of Rodrigo and Rodriguez, the latter, already in possession
of the Property since 1962 as Rodrigo admitted, obtained naked title over it upon the
Deeds execution in 1965. Neither registration nor tax payment is required to perfect
donations. On the relevance of the waiver agreement, suffice it to say that Vere had
nothing to waive to Rodriguez, having obtained no title from Rodrigo. Irrespective of
Rodriguezs motivation in obtaining the waiver, that document, legally a scrap of paper,
added nothing to the title Rodriguez obtained from Rodrigo under the Deed.

WHEREFORE, we DENY the petition. We AFFIRM the Decision dated 6 June 2005 and the
Resolution dated 5 May 2006 of the Court of Appeals.
SO ORDERED.
ANTONIO T. CARPIO
Republic of the Philippines
Supreme Court
Manila
THIRD DIVISION
JAIME ABALOS and SPOUSES FELIX SALAZAR and CONSUELO
SALAZAR, GLICERIO ABALOS, HEIRS OF AQUILINO ABALOS,
namely: SEGUNDA BAUTISTA, ROGELIO ABALOS, DOLORES A.
ROSARIO, FELICIDAD ABALOS, ROBERTO ABALOS, JUANITO
ABALOS, TITA ABALOS, LITA A. DELA CRUZ AND HEIRS OF
AQUILINA ABALOS, namely: ARTURO BRAVO, PURITA B.
MENDOZA, LOURDES B. AGANON, CONSUELO B. SALAZAR,
PRIMA B. DELOS SANTOS, THELMA APOSTOL and GLECERIO
ABALOS,
Petitioners,

G.R. No. 175444

Present:

VELASCO, JR., J., Chairperson

PERALTA,
ABAD,
MENDOZA, and
PERLAS-BERNABE, JJ.

- versus Promulgated:
HEIRS OF VICENTE TORIO, namely: PUBLIO TORIO, LIBORIO
TORIO, VICTORINA TORIO, ANGEL TORIO, LADISLAO TORIO,
PRIMO TORIO and NORBERTO TORIO,
Respondents.

December 14, 2011

x-----------------------------------------------------------------------------------------x
DECISION
PERALTA, J.:
Before the Court is a petition for review on certiorari seeking to set aside the
Decision1 dated June 30, 2006 and Resolution2 dated November 13, 2006 by the Court of
Appeals (CA) in CA-G.R. SP No. 91887. The assailed Decision reversed and set aside the
Decision3 dated June 14, 2005 of the Regional Trial Court (RTC) of Lingayen, Pangasinan,
Branch 69, while the questioned Resolution denied petitioners' Motion for
Reconsideration.
The factual and procedural antecedents of the case are as follows:
On July 24, 1996, herein respondents filed a Complaint for Recovery of Possession and
Damages with the Municipal Trial Court (MTC) of Binmaley, Pangasinan against Jaime
Abalos (Jaime) and the spouses Felix and Consuelo Salazar. Respondents contended that:
they are the children and heirs of one Vicente Torio (Vicente) who died intestate on
September 11, 1973; at the time of the death of Vicente, he left behind a parcel of land

52

measuring 2,950 square meters, more or less, which is located at San Isidro Norte,
Binmaley, Pangasinan; during the lifetime of Vicente and through his tolerance, Jaime and
the Spouses Salazar were allowed to stay and build their respective houses on the subject
parcel of land; even after the death of Vicente, herein respondents allowed Jaime and the
Spouses Salazar to remain on the disputed lot; however, in 1985, respondents asked Jaime
and the Spouses Salazar to vacate the subject lot, but they refused to heed the demand of
respondents forcing respondents to file the complaint.4

SO ORDERED.7
Jaime and the Spouses Salazar appealed the Decision of the MTC with the RTC of Lingayen,
Pangasinan.8 Herein petitioners, who were intervenors, did not file an appeal.

Jaime and the Spouses Salazar filed their Answer with Counterclaim, denying the material
allegations in the Complaint and asserting in their Special and Affirmative Defenses that:
respondents' cause of action is barred by acquisitive prescription; the court a quo has no
jurisdiction over the nature of the action and the persons of the defendants; the absolute
and exclusive owners and possessors of the disputed lot are the deceased predecessors of
defendants; defendants and their predecessors-in-interest had been in actual, continuous
and peaceful possession of the subject lot as owners since time immemorial; defendants
are faithfully and religiously paying real property taxes on the disputed lot as evidenced by
Real Property Tax Receipts; they have continuously introduced improvements on the said
land, such as houses, trees and other kinds of ornamental plants which are in existence up
to the time of the filing of their Answer.5

Aggrieved, herein respondents filed a petition for review with the CA assailing the Decision
of the RTC.

On the same date as the filing of defendants' Answer with Counterclaim, herein
petitioners filed their Answer in Intervention with Counterclaim. Like the defendants,
herein petitioners claimed that their predecessors-in-interest were the absolute and
exclusive owners of the land in question; that petitioners and their predecessors had been
in possession of the subject lot since time immemorial up to the present; they have paid
real property taxes and introduced improvements thereon.6
After the issues were joined, trial ensued.
On December 10, 2003, the MTC issued a Decision, the dispositive portion of which reads
as follows:
WHEREFORE, in view of the foregoing consideration[s], the Court
adjudged the case in favor of the plaintiffs and against the defendants
and defendants-intervenors are ordered to turn over the land in
question to the plaintiffs (Lot Nos. 869 and 870, Cad. 467-D. Binmaley
Cadastre located in Brgy. San Isidro Norte, Binmaley, Pangasinan with
an area of 2,950 sq. m., more or less, bounded and described in
paragraph 3 of the Complaint[)]; ordering the defendants and
defendants-intervenors to remove their respective houses standing on
the land in dispute; further ordering the defendants and defendantsintervenors, either singly or jointly to pay the plaintiffs land rent in the
amount of P12,000.00 per year to be reckoned starting the year 1996
until defendants and defendants-intervenors will finally vacate the
premises; furthermore, defendants and defendants-intervenors are also
ordered to pay, either singly or jointly, the amount ofP10,000.00 as and
by way of attorney's fees and costs of suit.

In its Decision dated June 14, 2005, the RTC ruled in favor of Jaime and the Spouses
Salazar, holding that they have acquired the subject property through prescription.
Accordingly, the RTC dismissed herein respondents' complaint.

On June 30, 2006, the CA promulgated its questioned Decision, the dispositive portion of
which reads, thus:
WHEREFORE, the petition is GRANTED. The Decision dated June 14,
2005 of the Regional Trial Court, Branch 69, Lingayen, Pangasinan is
hereby REVERSED and SET ASIDE. In its stead, a new one is entered
reinstating the Decision dated December 10, 2003 of the Municipal Trial
Court of Binmaley, Pangasinan.
SO ORDERED.9
Jaime and the Spouses Salazar filed a Motion for Reconsideration, but the same was
denied by the CA in its Resolution dated November 13, 2006.
Hence, the instant petition based on a sole assignment of error, to wit:
THE COURT OF APPEALS ERRED IN NOT APPRECIATING THAT THE
PETITIONERS HEREIN ARE NOW THE ABSOLUTE AND EXCLUSIVE
OWNERS OF THE LAND IN QUESTION BY VIRTUE OF ACQUISITIVE
PRESCRIPTION.10
The main issue raised by petitioners is whether they and their predecessors-in-interest
possessed the disputed lot in the concept of an owner, or whether their possession is by
mere tolerance of respondents and their predecessors-in-interest. Corollarily, petitioners
claim that the due execution and authenticity of the deed of sale upon which respondents'
predecessors-in-interest derived their ownership were not proven during trial.
The petition lacks merit.
Preliminarily, the Court agrees with the observation of respondents that some of the
petitioners in the instant petition were the intervenors11 when the case was filed with the
MTC. Records would show that they did not appeal the Decision of the MTC.12 The settled
rule is that failure to perfect an appeal renders the judgment final and executory.13 Hence,
insofar as the intervenors in the MTC are concerned, the judgment of the MTC had already
become final and executory.

53

It also bears to point out that the main issue raised in the instant petition, which is the
character or nature of petitioners' possession of the subject parcel of land, is factual in
nature.
Settled is the rule that questions of fact are not reviewable in petitions for review
on certiorari under Rule 45 of the Rules of Court.14 Section 1 of Rule 45 states that
petitions for review on certiorari shall raise only questions of law which must be distinctly
set forth.
Doubtless, the issue of whether petitioners possess the subject property as owners, or
whether they occupy the same by mere tolerance of respondents, is a question of fact.
Thus, it is not reviewable.
Nonetheless, the Court has, at times, allowed exceptions from the abovementioned
restriction. Among the recognized exceptions are the following:
(a) When the findings are grounded entirely on speculation, surmises,
or conjectures;
(b) When the inference made is manifestly mistaken, absurd, or
impossible;
(c) When there is grave abuse of discretion;
(d) When the judgment is based on a misapprehension of facts;
(e) When the findings of facts are conflicting;
(f) When in making its findings the CA went beyond the issues of the
case, or its findings are contrary to the admissions of both the
appellant and the appellee;
(g) When the CAs findings are contrary to those by the trial court;
(h) When the findings are conclusions without citation of specific
evidence on which they are based;
(i) When the facts set forth in the petition as well as in the petitioners
main and reply briefs are not disputed by the respondent;
(j) When the findings of fact are premised on the supposed absence of
evidence and contradicted by the evidence on record; or
(k) When the CA manifestly overlooked certain relevant facts not
disputed by the parties, which, if properly considered, would
justify a different conclusion.15
In the present case, the findings of fact of the MTC and the CA are in conflict with those of
the RTC.
After a review of the records, however, the Court finds that the petition must fail as it finds
no error in the findings of fact and conclusions of law of the CA and the MTC.
Petitioners claim that they have acquired ownership over the disputed lot through
ordinary acquisitive prescription.
Acquisitive prescription of dominion and other real rights may be ordinary or
extraordinary.16 Ordinary acquisitive prescription requires possession in good faith and
with just title for ten (10) years.17 Without good faith and just title, acquisitive prescription

can only be extraordinary in character which requires uninterrupted adverse possession

for thirty (30) years.18
Possession in good faith consists in the reasonable belief that the person from whom the
thing is received has been the owner thereof, and could transmit his ownership.19There is
just title 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.20
In the instant case, it is clear that during their possession of the property in question,
petitioners acknowledged ownership thereof by the immediate predecessor-in-interest of
respondents. This is clearly shown by the Tax Declaration in the name of Jaime for the year
1984 wherein it contains a statement admitting that Jaime's house was built on the land of
Vicente, respondents' immediate predecessor-in-interest.21 Petitioners never disputed
such an acknowledgment. Thus, having knowledge that they nor their predecessors-ininterest are not the owners of the disputed lot, petitioners' possession could not be
deemed as possession in good faith as to enable them to acquire the subject land by
ordinary prescription. In this respect, the Court agrees with the CA that petitioners'
possession of the lot in question was by mere tolerance of respondents and their
predecessors-in-interest. Acts of possessory character executed due to license or by mere
tolerance of the owner are inadequate for purposes of acquisitive
prescription.22 Possession, to constitute the foundation of a prescriptive right, must be en
concepto de dueo, or, to use the common law equivalent of the term, that possession
should be adverse, if not, such possessory acts, no matter how long, do not start the
running of the period of prescription.23
Moreover, the CA correctly held that even if the character of petitioners' possession of the
subject property had become adverse, as evidenced by their declaration of the same for
tax purposes under the names of their predecessors-in-interest, their possession still falls
short of the required period of thirty (30) years in cases of extraordinary acquisitive
prescription. Records show that the earliest Tax Declaration in the name of petitioners was
in 1974. Reckoned from such date, the thirty-year period was completed in 2004.
However, herein respondents' complaint was filed in 1996, effectively interrupting
petitioners' possession upon service of summons on them.24 Thus, petitioners possession
also did not ripen into ownership, because they failed to meet the required statutory
period of extraordinary prescription.
This Court has held that the evidence relative to the possession upon which the alleged
prescription is based, must be clear, complete and conclusive in order to establish the
prescription.25 In the present case, the Court finds no error on the part of the CA in holding
that petitioners failed to present competent evidence to prove their alleged good faith in
neither possessing the subject lot nor their adverse claim thereon. Instead, the records
would show that petitioners' possession was by mere tolerance of respondents and their
predecessors-in-interest.
Finally, as to the issue of whether the due execution and authenticity of the deed of sale
upon which respondents anchor their ownership were not proven, the Court notes that
petitioners did not raise this matter in their Answer as well as in their Pre-Trial Brief. It was
only in their Comment to respondents' Petition for Review filed with the CA that they

54

raised this issue. Settled is the rule that points of law, theories, issues, and arguments not
adequately brought to the attention of the trial court need not be, and ordinarily will not
be, considered by a reviewing court.26 They cannot be raised for the first time on appeal.
To allow this would be offensive to the basic rules of fair play, justice and due process. 27

REPUBLIC OF THE PHILIPPINES,

Respondent.

Even granting that the issue of due execution and authenticity was properly raised, the
Court finds no cogent reason to depart from the findings of the CA, to wit:
xxxx

DECISION
VILLARAMA, JR., J.:
On appeal is the Decision[1] dated July 26, 2005 and Resolution[2] dated April 11, 2006 of
the Court of Appeals (CA) in CA-G.R. CV No. 73067 which reversed and set aside the
Decision[3] dated January 31, 2001 of the Regional Trial Court (RTC) of Tanauan, Batangas,
Branch 6 in Land Reg. Case No. T-335 (LRA Record No. N-69447).
Subject of a petition for original registration before the RTC is a parcel of land situated in
San Andres, Malvar, Batangas with an area of 9,103 square meters and designated
as Lot 3730, Psc 47, Malvar Cadastre. The petition[4] was originally filed by ICTSI
Warehousing, Inc. (ICTSI-WI) represented by its Chairman, Enrique K. Razon, Jr. The
Republic through the Office of the Solicitor General (OSG) filed its opposition[5] on grounds
that the land applied for is part of the public domain and the applicant has not acquired a
registrable title thereto under the provisions of Commonwealth Act No. 141 as amended
by Republic Act No. 6940.
ICTSI-WI sought leave of court to amend the application citing the following reasons: (1)
the petition was not accompanied by a certification of non-forum shopping; (2) the
statement of technical description was based merely on the boundaries set forth in the tax
declaration; and (3) due to a technicality, the sale between the vendor and applicant
corporation cannot push through and consequently the tax declaration is still in the name
of vendor Ramon Aranda and the land cannot be transferred and declared in the name of
ICTSI-WI.[6]
The trial court admitted the Amended Application for Registration of Title, [7] this time filed
in the name of Ramon Aranda, herein petitioner. Petitioner prayed that should the Land
Registration Act be not applicable to this case, he invokes the liberal provisions of Section
48 of Commonwealth Act No. 141, as amended, having been in continuous possession of
the subject land in the concept of owner, publicly, openly and adversely for more than
thirty (30) years prior to the filing of the application.[8]
In support of the application, petitioners sister Merlita A. Enriquez testified that in 1965
her father Anatalio Aranda donated the subject land to his brother (petitioner), as
evidenced by documents Pagpapatunay ng Pagkakaloob ng Lupa which she and her
siblings executed on June 7, 2000.[9] She came to know the land for the first time in 1965
when she was eight years old and his brother Ramon has been tilling the land since then,
planting it with rice and corn. His brother did not introduce any permanent improvement
and also did not hire a tenant to work on the land. As to the donation made by his father
to his brother Ramon, she recalled there was such a document but it was eaten by rats.[10]
Another witness, Luis Olan, testified that his father Lucio Olan originally owned the land
and that he had known about this property since he was six (6) years old as he used to
accompany his father in going to the land. His father farmed the land and planted it first,
with rice, and later corn. They had open, peaceful, continuous and adverse possession of
the land in the concept of owner until his father sold the land in 1946 to Anatalio
Aranda. The children of Anatalio then took over in tilling the land, planting it with rice and
corn and adding a few coconut trees. He does not have any copy of the document of sale
because his mother gave it to Anatalio.[11]

Based on the foregoing, respondents [Jaime Abalos and the Spouses

Felix and Consuelo Salazar] have not inherited the disputed land
because the same was shown to have already been validly sold to
Marcos Torio, who, thereupon, assigned the same to his son Vicente,
the father of petitioners [herein respondents]. A valid sale was amply
established and the said validity subsists because the deed evidencing
the same was duly notarized.
There is no doubt that the deed of sale was duly acknowledged before a
notary public. As a notarized document, it has in its favor the
presumption of regularity and it carries the evidentiary weight
conferred upon it with respect to its due execution. It is admissible in
evidence without further proof of its authenticity and is entitled to full
faith and credit upon its face.28
Indeed, settled is the rule in our jurisdiction that a notarized document has in its favor the
presumption of regularity, and to overcome the same, there must be evidence that is
clear, convincing and more than merely preponderant; otherwise, the document should be
upheld.29 In the instant case, petitioners' bare denials will not suffice to overcome the
presumption of regularity of the assailed deed of sale.
WHEREFORE, the petition is DENIED. The assailed Decision and Resolution of the Court of
Appeals in CA-G.R. SP No. 91887 are AFFIRMED.
SO ORDERED.
_______________________________________________________________________
FIRST DIVISION
RAMON ARANDA,
Petitioner,

G.R. No. 172331

Present:

- versus -

CORONA, C.J.,
Chairperson,
LEONARDO-DE CASTRO,
BERSAMIN,
VILLARAMA, JR., and
PEREZ,* JJ.

Promulgated:

August 24, 2011

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

55

On January 31, 2001, the trial court rendered its Decision[12] granting the application and
ordering the issuance of a decree of registration in favor of petitioner.
The Republic appealed to the CA which reversed the trial court. The CA held that
petitioners evidence does not satisfactorily establish the character and duration of
possession required by law, as petitioner failed to prove specific acts showing the nature
of the possession by his predecessors-in-interest. The CA also did not give evidentiary
weight to the documents Pagpapatunay ng Pagkakaloob ng Lupa and Pagpapatunay ng
Bilihang Lampasan ng Lupa,[13] both prepared only in the year 2000 when the application
for registration was filed, as factual proof of ownership by the parties to the compromise
agreement.
Petitioners motion for reconsideration was likewise denied by the CA.
Hence, this appeal by way of a petition for review on certiorari under Rule 45 alleging that
the decision of the CA is based on a misapprehension of facts with regard to compliance
with the required 30 years of open, exclusive, public and adverse possession in the
concept of owner. Petitioner argues that the deeds of confirmation of the 1946 sale in
favor of Anatalio Aranda and the 1965 donation to petitioner are competent proof of
transfer of ownership notwithstanding that these were executed only in the year 2000. He
asserts that the testimonies of witnesses Merlita Aranda-Enriquez and Luis Olan on the
fact of loss and destruction of copies of the aforesaid deeds constitute secondary evidence
of the contents thereof based on recollection of persons who are adversely affected. Such
testimonial evidence coupled with the deeds of confirmation warrants the application of
the exception from the best evidence rule. Petitioner thus contends that the CA had no
legal basis to doubt the veracity of the donation and sale of the subject property, and to
conclude that the confirmation deeds can be treated as compromise agreement
considering that the transactions had been previously completed and perfected by the
parties.
We deny the petition.
The Property Registration Decree (P.D. No. 1529) provides for original registration of land in
an ordinary registration proceeding. Under Section 14(1)[14] thereof, a petition may be
granted upon compliance with the following requisites: (a) that the property in question is
alienable and disposable land of the public domain; (b) that the applicants by themselves or
through their predecessors-in-interest have been in open, continuous, exclusive and
notorious possession and occupation; and (c) that such possession is under a bona fide claim
of ownership since June 12, 1945 or earlier.
Under the Regalian doctrine which is embodied in Section 2, Article XII of
the 1987 Constitution, all lands of the public domain belong to the State, which is the
source of any asserted right to ownership of land. All lands not appearing to be clearly
within private ownership are presumed to belong to the State. Unless public land is shown
to have been reclassified or alienated to a private person by the State, it remains part of
the inalienable public domain. To overcome this presumption, incontrovertible evidence
must be established that the land subject of the application is alienable or disposable.[15]
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.[16] The applicant
may also secure a certification from the Government that the lands applied for are
alienable and disposable.[17]

In this case, the Assistant Regional Executive Director For Operations-Mainland Provinces
of the Department of Environment and Natural Resources (DENR), in compliance with the
directive of the trial court, issued a certification stating that the subject property falls
within the Alienable and Disposable Land, Project No. 22-A of Lipa, Batangas per LC Map
718 certified on March 26, 1928.[18] However, in the Certification[19] dated January 14,
2000 issued by the DENR CENR Officer ofBatangas City, Pancrasio M. Alcantara, which was
submitted in evidence by the petitioner, it states that:
This is to certify that based on projection from the technical
reference map of this Office, Lot No. 3730, Ap-04-009883, situated at
Barangay San Andres, Malvar, Batangas containing an area of NINE
THOUSAND ONE HUNDRED THREE AND FORTY SEVEN (9,103.47)
SQUARE METERS and shown at the reverse side hereof has been
verified to be within the ALIENABLE AND DISPOSABLE ZONE
under Project No. 39, Land Classification Map No. 3601 certified on 22
December 1997 except for twenty meters strip of land along the creek
bounding on the northeastern portion which is to be maintained as
streambank protection.
x x x x (Emphasis supplied.)
Petitioner has not explained the discrepancies in the dates of classification[20] mentioned
in the foregoing government certifications. Consequently, the status of the land applied
for as alienable and disposable was not clearly established.
We also agree with the CA that petitioners evidence failed to show that he
possessed the property in the manner and for the duration required by law.
Petitioner presented tax declarations and the deeds of confirmation of the 1946 sale from
the original owner (Lucio Olan) to Anatalio Aranda and the 1965 donation made by the
latter in favor of petitioner. But as found by the CA, the history of the land shows that it
was declared for taxation purposes for the first time only in 1981. On the other hand, the
Certification issued by the Municipal Treasurer of Malvar stated that petitioner, who
supposedly received the property from his father in 1965, had been paying the
corresponding taxes for said land for more than five consecutive years including the
current year [1999], or beginning 1994 only or just three years before the filing of the
application for original registration. While, as a rule, tax declarations or realty tax
payments of property are not conclusive evidence of ownership, nevertheless they are
good indicia of possession in the concept of owner, for no one in his right mind would be
paying taxes for a property that is not in his actual or constructive possession they
constitute at least proof that the holder has a claim of title over the property.[21]
Petitioner likewise failed to prove the alleged possession of his predecessors-in-interest.
His witness Luis Olan testified that he had been visiting the land along with his father Lucio
since he was 6 years old (he was 70 years old at the time he testified), or as early as
1936. Yet, there was no evidence that Lucio Olan declared the property for tax purposes at
anytime before he sold it to Anatalio Aranda. There is also no showing that Anatalio
Aranda declared the property in his name from the time he bought it from Lucio Olan. And
even assuming that Lucio actually planted rice and corn on the land, such statement is not
sufficient to establish possession in the concept of owner as contemplated by law. Mere
casual cultivation of the land does not amount to exclusive and notorious possession that
would give rise to ownership.[22] Specific acts of dominion must be clearly shown by the
applicant.

56

We have held that a person who seeks the registration of title to a piece of land on the
basis of possession by himself and his predecessors-in-interest must prove his claim by
clear and convincing evidence, i.e., he must prove his title and should not rely on the
absence or weakness of the evidence of the oppositors.[23]Furthermore, the court has the
bounden duty, even in the absence of any opposition, to require the petitioner to show, by
a preponderance of evidence and by positive and absolute proof, so far as possible, that
he is the owner in fee simple of the lands which he is attempting to register.[24] Since
petitioner failed to meet the quantum of proof required by law, the CA was correct in
reversing the trial court and dismissing his application for judicial confirmation of title.
WHEREFORE, the present petition for review on certiorari is DENIED. The Decision
dated July 26, 2005 and Resolution dated April 11, 2006 of the Court of Appeals in CA-G.R.
CV No. 73067 are AFFIRMED and UPHELD.
With costs against the petitioner.
SO ORDERED.

FIRST DIVISION
DCD CONSTRUCTION, INC.,
Petitioner,

G.R. No. 179978

Present:

- versus -

REPUBLIC OF THE PHILIPPINES,

Respondent.

CORONA, C.J.,
Chairperson,
LEONARDO-DE CASTRO,
BERSAMIN,
DEL CASTILLO, and
VILLARAMA, JR., JJ.
Promulgated:

August 31, 2011

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION
VILLARAMA, JR., J.:
Before us is a petition for review on certiorari under Rule 45 which seeks to set
aside the Decision[1] dated June 25, 2007 and Resolution[2] dated September 10, 2007 of
the Court of Appeals (CA) in CA-G.R. CV No. 77868. The CA reversed the
Decision[3] dated August 22, 2002 of the Regional Trial Court (RTC) ofDanao City, Branch 25
in LRC No. 147 (LRA Rec. No. N-73333).
On January 19, 2001, petitioner DCD Construction, Inc., through its President and
CEO Danilo D. Dira, Jr., filed a verified application for registration [4] of a parcel of land
situated in Taytay, Danao City with an area of 4,493 square meters designated as Cadastral
Lot No. 5331-part, CAD 681-D. It was alleged that applicant which acquired the property
by purchase, together with its predecessors-in-interest, have been in continuous, open,

adverse, public, uninterrupted, exclusive and notorious possession and occupation of the
property for more than thirty (30) years. Thus, petitioner prayed to have its title judicially
confirmed.
After compliance with the jurisdictional requirements, the trial court through its
clerk of court conducted hearings for the reception of petitioners evidence. Based on
petitioners documentary and testimonial evidence, it appears that although designated as
Cadastral Lot No. 5331-part, the approved technical description indicated the lot number
as Lot 30186, CAD 681-D which is allegedly identical to Lot 21225-A, Csd-07-006621
consisting of 3,781 square meters. Lot 5331-part (4,493 sq. ms.) was subdivided into two
(Lots 21225-A and 21225-B) so that the 712 square meters (Lot 21225-B) can be
segregated as salvage zone pursuant to DENR Administrative Order No. 97-05.[5]
Andrea Batucan Enriquez, one of the six (6) children of Vivencio and Paulina
Batucan, testified that her parents originally owned the subject land which was bought by
her father after the Second World War. Vivencio and Paulina died on April 2,
1967 and November 11, 1980, respectively. Upon the death of their parents, she and her
siblings inherited the land which they possessed and declared for tax purposes.
On December 22, 1993, they executed a Deed of Extrajudicial Settlement With Absolute
Sale whereby they sold the property to Danilo C. Dira, Sr., petitioners father. [6]
Danilo D. Dira, Jr. testified that the subject land declared under Tax Declaration
(TD) No. 0400583 in the name of Danilo C. Dira, Sr. was among those properties which
they inherited from his father, as shown in the Extrajudicial Settlement of Estate With
Special Power of Attorney dated May 28, 1996 and Supplemental Extrajudicial Settlement
of Estate dated February 27, 1997. On June 26, 2000, his mother, brothers and sisters
executed a Deed of Absolute Sale whereby the subject land was sold to petitioner.
Thereafter, petitioner declared the property for tax purposes and also paid realty
taxes. His father had possessed the land beginning 1992 or 1994, and presently petitioner
is in possession thereof. Petitioner also assumed the P3.8 million mortgage obligation with
Land Bank of thePhilippines as evidenced by the Deed of Undertaking/Agreement
dated March 30, 2000.[7]
On August 22, 2002, the trial court rendered its decision, the dispositive portion
of which reads:
WHEREFORE, from all of the foregoing undisputed facts, this
Court finds and so holds that the applicant DCD CONSTRUCTION INC.,
has a registerable title to Lot No. 5331-A with an area of 3,781 square
meters as part of Lot 5331, CAD-681-D, under Csd-072223-003891
which is identical to Lot No. 21225-A as part of Lot No. 21225, CAD-681D, under Csd-07-006621, and is covered by Tax Declaration No. 00400469 situated in Taytay, Danao City, hereby confirming the same
and ordering its registration under Act 496, as amended by Presidential
Decree No. 1529, strictly in line with the Technical Description of Lot
30186, Danao, CAD-681-D, identical to Lot 21225-A, Csd-07-006621,
upon finality of this decision.
SO ORDERED.[8]
On appeal by respondent Republic of the Philippines, the CA reversed the trial
court. The CA ruled that the evidence failed to show that the land applied for was
alienable and disposable considering that only a notation in the survey plan was presented
to show the status of the property. The CA also found that petitioners evidence was
insufficient to establish the requisite possession as the land was bought by Vivencio

57

Batucan only after the Second World War or in 1946, further noting that the earliest tax
declaration submitted was issued only in 1988. As to the testimony of witness Andrea
Batucan Enriquez, the CA held that it did not prove open, continuous, exclusive and
notorious possession under a bona fide claim of ownership since June 12, 1945.
Its motion for reconsideration having been denied, petitioner is now before this
Court raising the following arguments:
I
IN RULING THAT PETITIONER FAILED TO PROVE THAT THE LAND
APPLIED FOR IS ALIENABLE AND DISPOSABLE, THE COURT OF APPEALS
COMMITTED A GROSS MISAPPREHENSION OF FACTS, WHICH
WARRANTS A REVIEW BY THE HONORABLE SUPREME COURT, IN
ACCORDANCE WITH THE RULING INMEGAWORLD AND HOLDINGS, INC.
VS. HON. JUDGE BENEDICTO G. COBARDE, ET AL. AND SUPERLINES
TRANSPORTATION COMPANY, INC. VS. PHILIPPINE NATIONAL
CONSTRUCTION COMPANY, ET AL.
(A)
THE BUREAU OF LANDS VERIFIED AND CERTIFIED THE
SUBJECT LOT AS ALIENABLE AND DISPOSABLE.
(B)
THE DENR CERTIFIED THAT ITS OWN LAND CLASSIFICATION
MAP SHOWS THAT SUBJECT LOT IS WITHIN THE ALIENABLE
AND DISPOSABLE AREA.
II
THE COURT OF APPEALS DECIDED THE CASE IN A WAY NOT IN ACCORD
WITH LAW AND SETTLED DECISION OF THE HONORABLE SUPREME
COURT, WHEN IT RULED THAT PETITIONER FAILED TO PROVE THAT THE
REQUIREMENT OF OPEN, CONTINUOUS, EXCLUSIVE AND NOTORIOUS
POSSESSION AND OCCUPATION OF THE SUBJECT LAND FOR THE PERIOD
REQUIRED BY LAW HAS BEEN COMPLIED WITH, DESPITE THE FACT
THAT:
(A)
WITNESS ANDREA ENRIQUEZS TESTIMONY SHOWS THAT
PETITIONERS PREDECESSORS-IN-INTEREST ACQUIRED AND
POSSESSED SUBJECT LOT IN 1942.
(B)
IN REPUBLIC OF THE PHILS. VS. SPOUSES ENRIQUEZ, THE
SUPREME COURT CATEGORICALLY RULED THAT POSSESSION
FOR 34 YEARS IS SUFFICIENT COMPLIANCE WITH THE LEGAL
REQUIREMENT FOR REGISTRATION.[9]
We deny the petition.
In Megaworld Properties and Holdings, Inc. v. Cobarde,[10] the Court held that as
an exception to the binding effect of the trial courts factual findings which were affirmed
by the CA, a review of such factual findings may be made when the judgment of the CA is
premised on a misapprehension of facts or a failure to consider certain relevant facts that
would lead to a completely different conclusion. In the same vein, we declared
in Superlines Transportation Company, Inc. v. Philippine National Construction
Company,[11] that while it is settled that this Court is not a trier of facts and does not, as a
rule, undertake a re-examination of the evidence presented by the parties, a number of
exceptions have nevertheless been recognized by the Court, such as when the judgment is
based on a misapprehension of facts, and when the CA manifestly overlooked certain
relevant facts not disputed by the parties, which, if properly considered, would justify a
different conclusion. Petitioner invokes the foregoing exceptions urging this Court to pass

upon anew the CAs findings regarding the status of the subject land and compliance with
the required character and duration of possession by an applicant for judicial confirmation
of title.
After a thorough review, we find no reversible error committed by the CA in
ruling that petitioner failed to establish a registrable title on the subject land.
Applicants for confirmation of imperfect title must prove the following: (a) that
the land forms part of the disposable and alienable agricultural lands of the public domain
and (b) that they have been in open, continuous, exclusive and notorious possession and
occupation of the same under a bona fide claim of ownership either since time
immemorial or since June 12, 1945.[12]
Under Section 2, Article XII of the Constitution, which embodies the Regalian
doctrine, all lands of the public domain belong to the State the source of any asserted right
to ownership of land.[13] All lands not appearing to be clearly of private dominion
presumptively belong to the State.[14] Accordingly, public lands not shown to have been
reclassified or released as alienable and disposable agricultural land or alienated to a
private person by the State remain part of the inalienable public
domain.[15] Incontrovertible evidence must be presented to establish that the land subject
of the application is alienable or disposable.[16]
In support of its contention that Lot 5331-A, CAD-681-D under Csd-072223003891 is alienable and disposable, petitioner presented the following notation appearing
in the survey plan which reads:
CONFORMED
PER
LC
MAP
NOTATION
LC Map No. 1321, Project No. 26-A
certified on June 07, 1938, verified to
be within Alienable & Disposable
Area
(SGD.) CYNTHIA L. IBAEZ
Chief, Map Projection Section[17]
Petitioner assailed the CA in refusing to give weight to the above certification, stressing
that the DENR-Lands Management Services (LMS) approved the survey plan in its entirety,
without any reservation as to the inaccuracy or incorrectness of Cynthia L. Ibaez[s]
annotation found therein.[18] Petitioner relies on the statement of Rafaela A. Belleza, Chief,
Surveys Assistance Section, DENR-LMS, who testified (direct examination) as follows:
Atty. Paylado continues:
Q Before this is given to the surveyor, did these two (2) documents
pass your office?
A Yes, sir.
Q When you said it passed your office, it passed your office as you have
to verify all the entries in these documents whether they are
correct?
A Yes, sir.
Q Were you able to have a personal look and verification on these
Exhibits P and Q and will you confirm that all the entries here
are true and correct?
A Yes, sir.
Q Based on the records in your office?

58

A As a whole.
x x x x[19] (Emphasis supplied)
Petitioner contends that the foregoing declaration of Belleza conclusively proves that the
LMS itself had approved and adopted the notation made by Ibaez on the survey plan as its
own. Such approval amounts to a positive act of the government indicating that the land
applied for is indeed alienable and disposable.
We do not agree.
First, it must be clarified that the survey plan (Exhibit Q) was not offered by petitioner as
evidence of the lands classification as alienable and disposable. The formal offer of
exhibits stated that said document and entries therein were offered for the purpose of
proving the identity of the land, its metes and bounds, boundaries and adjacent lots; and
that the survey has passed and was approved by the DENR-LMS. And while it was also
stated therein that the evidence is also being offered as part of the testimony of Belleza,
nowhere in her testimony do we find a confirmation of the notation concerning the lands
classification as correct. In fact, said witness denied having any participation in the actual
approval of the survey plan. This can be gleaned from her testimony on cross-examination
which immediately followed the afore-quoted portion of her testimony that the survey
plan passed their office, thus:
CROSS-EXAMINATION: (FISCAL KYAMKO TO THE WITNESS)
Q Madam Witness, you said that Exhibits P and Q passed before your
office, now, the question is, could you possibly inform the
Court whether you have some sort of an initial on the two (2)
documents or the two (2) exhibits?
A Actually, sir, I am not a part of this approval because this will
undergo in the isolated survey and my section is I am the
Chief, Surveys Assistant Section, which concerns of the LRA,
issuance of Certified Sketch Plans, issuance of certified
Technical Descriptions of Untitled Lots to correct the titles for
judicial purpose.
Q In other words, since Exhibits P and Q are originals, they did not
actually pass your office, is it not?
A Our office, yes, but not in my section, sir.
Q So it passed your office but it did not pass your section?
A Yes, sir.
Q In other words, you had [no] hand in re-naming or renumbering of
the subject lots, is it not?
A It is in the Isolated Survey Section, sir.
Q In other words, you cannot possibly testify with authority as to the
manner by which the numbering of the subject lot was
renumbered, is it not?
A Yes, sir.
x x x x[20] (Emphasis supplied.)
Clearly, the testimony of the officer from DENR-LMS, Rafaela Belleza, did not at
all attest to the veracity of the notation made by Ibaez on the survey plan regarding the
status of the subject land. Hence, no error was committed by the CA in finding that the
certification made by DENR-LMS pertained only to the technical correctness of the survey
plotted in the survey plan and not to the nature and character of the property surveyed.

In Republic v. Court of Appeals,[21] this Court noted that 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;
and administrative action; investigation reports of Bureau of Lands investigators; and a
legislative act or a statute.[22] A certification issued by a Community Environment and
Natural Resources Officer in the Department of Environment and Natural Resources
(DENR) stating that the lots involved were found to be within the alienable and disposable
area was deemed sufficient to show the real character of the land.[23]
As to notations appearing in the subdivision plan of the lot stating that it is within the
alienable and disposable area, the consistent holding is that these do not constitute proof
required by the law.[24] In Menguito v. Republic,[25] the Court declared:
x x x petitioners cite a surveyor-geodetic engineers notation x
x x indicating that the survey was inside alienable and disposable
land. Such notation does not constitute a positive government act
validly changing the classification of the land in question. Verily, a mere
surveyor has no authority to reclassify lands of the public domain. By
relying solely on the said surveyors assertion, petitioners have not
sufficiently proven that the land in question has been declared
alienable.[26]
The above ruling equally applies in this case where the notation on the survey plan is
supposedly made by the Chief of Map Projection Unit of the DENR-LMS. Such certification
coming from an officer of the DENR-LMS is still insufficient to establish the classification of
the property surveyed. It is not shown that the notation was the result of an investigation
specifically conducted by the DENR-LMS to verify the status of the subject land. The
certifying officer, Cynthia L. Ibaez, did not testify on her findings regarding the
classification of the lot as reflected in her notation on the survey plan. As to the
testimonial evidence presented by the petitioner, the CA noted that Engr. Norvic Abella
who prepared the survey plan had no authority to reclassify lands of the public domain,
while Rafaela A. Belleza who is the Chief of the Surveys Assistance Section, admitted on
cross-examination that she had no part in the approval of the subdivision plan, and hence
incompetent to testify as to the correctness of Ibaezs notation. More important, petitioner
failed to establish the authority of Cynthia L. Ibaez to issue certifications on land
classification status for purpose of land registration proceedings.
Our pronouncement in Republic v. T.A.N. Properties, Inc.[27] is instructive:
In this case, respondent submitted two certifications issued by
the Department of Environment and Natural Resources (DENR). The 3
June 1997 Certification by the Community Environment and Natural
Resources Offices (CENRO), Batangas City, certified that lot 10705, Cad424, Sto. Tomas Cadastre situated at Barangay San Bartolome, Sto.
Tomas, Batangas with an area of 596,116 square meters falls within the
ALIENABLE AND DISPOSABLE ZONE under Project No. 30, Land
Classification Map No. 582 certified [on] 31 December 1925. The second
certification in the form of a memorandum to the trial court, which was
issued by the Regional Technical Director, Forest Management Services
of the DENR (FMS-DENR), stated that the subject area falls within
an alienable and disposable land, Project No. 30 of Sto. Tomas,
Batangas certified on Dec. 31, 1925 per LC No. 582.

59

The certifications are not sufficient. DENR Administrative

Order (DAO) No. 20, dated 30 May 1988, delineated the functions and
authorities of the offices within the DENR. Under DAO No. 20, series of
1988, the CENRO issues certificates of land classification status for areas
below 50 hectares. The Provincial Environment and Natural Resources
Offices (PENRO) issues certificate of land classification status for lands
covering over 50 hectares. DAO No. 38, dated 19 April 1990, amended
DAO No. 20, series of 1988. DAO No. 38, series of 1990 retained the
authority of the CENRO to issue certificates of land classification status
for areas below 50 hectares, as well as the authority of the PENRO to
issue certificates of land classification status for lands covering over 50
hectares. In this case, respondent applied for registration of Lot 10705B. The area covered by Lot 10705-B is over 50 hectares (564,007 square
meters). The CENRO certificate covered the entire Lot 10705 with an
area of 596,116 square meters which, as per DAO No. 38, series of
1990, is beyond the authority of the CENRO to certify as alienable and
disposable.
The Regional Technical Director, FMS-DENR, has no authority
under DAO Nos. 20 and 38 to issue certificates of land classification. x x
x
xxxx
Hence, the certification issued by the Regional Technical Director, FMSDENR, in the form of a memorandum to the trial court, has no probative
value.
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.
Only Torres, respondents Operations Manager, identified the
certifications submitted by respondent. The government officials who
issued the certifications were not presented before the trial court to
testify on their contents. The trial court should not have accepted the
contents of the certifications as proof of the facts stated therein. Even if
the certifications are presumed duly issued and admissible in evidence,
they have no probative value in establishing that the land is alienable
and disposable.
xxxx
Applying Section 24 of Rule 132, the record of public documents
referred to in Section 19(a), when admissible for any purpose, may be

evidenced by an official publication thereof or by a copy attested by

the officer having legal custody of the record, or by his deputy x x x.
The CENRO is not the official repository or legal custodian of the
issuances of the DENR Secretary declaring public lands as alienable and
disposable. The CENRO should have attached an official publication of
the DENR Secretarys issuance declaring the land alienable and
disposable.
xxxx
The CENRO and Regional Technical Director, FMS-DENR, certifications
do not fall within the class of public documents contemplated in the
first sentence of Section 23 of Rule 132. The certifications do not reflect
entries in public records made in the performance of a duty by a public
officer, such as entries made by the Civil Registrar in the books of
registries, or by a ship captain in the ships logbook. The certifications
are not the certified copies or authenticated reproductions of original
official records in the legal custody of a government office. The
certifications are not even records of public documents. The
certifications are conclusions unsupported by adequate proof, and thus
have no probative value. Certainly, the certifications cannot be
considered prima facie evidence of the facts stated therein.
The CENRO and Regional Technical Director, FMS-DENR, certifications
do not prove that Lot 10705-B falls within the alienable and disposable
land as proclaimed by the DENR Secretary. Such government
certifications do not, by their mere issuance, prove the facts stated
therein. Such government certifications may fall under the class of
documents contemplated in the second sentence of Section 23 of Rule
132. As such, the certifications are prima facie evidence of their due
execution and date of issuance but they do not constitute prima facie
evidence of the facts stated therein.
x x x x[28] (Emphasis supplied.)
In the light of the foregoing, it is clear that the notation inserted in the survey plan (Exhibit
Q) hardly satisfies the incontrovertible proof required by law on the classification of land
applied for registration.
The CA likewise correctly held that there was no compliance with the required possession
under a bona fide claim of ownership since June 12, 1945.
The phrase adverse, continuous, open, public, peaceful and in concept of owner, are mere
conclusions of law requiring evidentiary support and substantiation. The burden of proof is
on the applicant to prove by clear, positive and convincing evidence that the alleged
possession was of the nature and duration required by law.[29]The bare statement of
petitioners witness, Andrea Batucan Enriquez, that her family had been in possession of
the subject land from the time her father bought it after the Second World War does not
suffice.
Moreover, the tax declaration in the name of petitioners father, TD No. 0400583 was
issued only in 1994, while TD No. 0-0400469 in its own name was issued in
2000.Petitioners predecessors-in-interest were able to submit a tax declaration only for
the year 1988, which was long after both spouses Vivencio and Paulina Batucan have
died. Although tax declarations or realty tax payments of property are not conclusive
evidence of ownership, nevertheless, they are good indicia of possession in the concept of

60

owner.[30] And while Andrea Batucan Enriquez claimed knowledge of their familys
possession since she was just ten (10) years old although she said she was born in 1932 -there was no clear and convincing evidence of such open, continuous, exclusive and
notorious possession under a bona fide claim of ownership.She never mentioned any act
of occupation, development, cultivation or maintenance over the property throughout the
alleged length of possession.[31] There was no account of the circumstances regarding their
fathers acquisition of the land, whether their father introduced any improvements or
farmed the land, and if they established residence or built any house thereon.
We have held that the bare claim of the applicant that the land applied for had been in the
possession of her predecessor-in-interest for 30 years does not constitute the well-nigh
inconvertible and conclusive evidence required in land registration.[32]
As the Court declared in Republic v. Alconaba:[33]
The law speaks of possession and occupation. Since these
words are separated by the conjunction and, the clear intention of the
law is not to make one synonymous with the other. Possession is
broader than occupation because it includes constructive possession.
When, therefore, the law adds the word occupation, it seeks to delimit
the all-encompassing effect of constructive possession. Taken together
with the words open, continuous, exclusive and notorious, the word
occupation serves to highlight the fact that for an applicant to qualify,
his possession must not be a mere fiction. Actual possession of a land
consists in the manifestation of acts of dominion over it of such a
nature as a party would naturally exercise over his own
property.[34] (Emphasis supplied.)
WHEREFORE, the petition for review on certiorari is DENIED. The Decision dated June 25,
2007 and Resolution dated September 10, 2007 of the Court of Appeals in CA-G.R. CV No.
77868 are AFFIRMED.
With costs against the petitioner.
SO ORDERED.
THIRD DIVISION
VICENTE YU CHANG AND SOLEDAD YU
CHANG,
Petitioners,

- versus -

REPUBLIC OF THE PHILIPPINES,

Respondent.

G.R. No. 171726

Present:
BRION,* J.,
Acting Chairperson,
BERSAMIN,
ABAD,*
VILLARAMA, JR., and
SERENO, JJ.
Promulgated:

February 23, 2011

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

DECISION
VILLARAMA, JR. J.:
This petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure, as
amended, assails the Decision[1] dated August 26, 2005 and the Resolution[2] dated
February 13, 2006 of the Court of Appeals (CA) in CA-G.R. CV No. 67430. The CA reversed
and set aside the April 28, 2000 Decision[3] of the Regional Trial Court of Pili, Camarines
Sur, Branch 31, in LRC No. P-115, LRA Rec. No. N-68012, which granted petitioners
application for registration of title over two parcels of land, denominated as Lots 2199 and
2200 of Cad. 291, Pili Cadastre.
The antecedent facts, as culled from the records, are as follows:
On March 22, 1949, petitioners father, L. Yu Chang[4] and the Municipality of Pili,
Camarines Sur, through its then Mayor, Justo Casuncad, executed an Agreement to
Exchange Real Property[5] wherein the former assigned and transferred to the Municipality
of Pili his 400-square-meter residential lot in Barrio San Roque, Pili, Camarines Sur, in
exchange for a 400-square-meter piece of land located in San Juan, Pili. Thereafter, L. Yu
Chang and his family took possession of the property thus obtained and erected a
residential house and a gasoline station thereon. He also declared the property in his
name under Tax Declaration No. 01794[6]and 01795[7] and paid the real property taxes
thereon as evidenced by twenty-eight (28) official receipts from February 21, 1951 up to
March 10, 1976. When L. Yu Chang died on September 30, 1976, his wife, Donata Sta. Ana
and his seven children inherited the property and succeeded in the possession of the
property.
On March 1, 1978, a Deed of Transfer and Renunciation[8] of their rights over the
property was executed by L. Yu Chang's five children, Rafaela, Catalina, Flaviana,
Esperanza, and Antonio, in favor of herein petitioners. After the transfer, petitioners had
the subject property surveyed and subdivided into two lots, Lot 2199[9] and Lot 2200[10] of
Plan SWO-05-000888, Pili Cadastre. Petitioners also declared the lots in their names for
taxation purposes as shown in Tax Declaration No. 02633[11] and paid the real property
taxes thereon.
On February 21, 1997, petitioner Soledad Yu Chang, for herself and in representation of
her brother and co-petitioner, Vicente Yu Chang, filed a petition[12] for registration of title
over the aforementioned lots under the Property Registration Decree. In their petition,
they declared that they are the co-owners of the subject lots; that they and their
predecessors-in-interest have been in actual, physical, material, exclusive, open,
occupation and possession of the above described parcels of land for more than 100
years[13]; and that allegedly, they have continuously, peacefully, and adversely possessed
the property in the concept of owners. Hence, they are entitled to confirmation of
ownership and issuance and registration of title in their names.
In support of their application, petitioners submitted the following documents, to wit:
1.
2.
3.
4.
5.

Agreement to Exchange Real Property;

Deed of Transfer and Renunciation;
Approved Plan of Lot 2199 and Lot 2200, Cad. 291, Pili Cadastre;
Approved Technical Description of Lot 2199;
Approved Technical Description of Lot 2200;

61

6.
7.

Field Appraisal and Assessment Sheet (FAAS) A.R.P. No. 026-044 for Lot
2199 Cad. 291; and
Field Appraisal and Assessment Sheet (FAAS) A.R.P. No. 026-043 for Lot
2200 Cad. 291 Pili Cadastre.

The Republic, through the Office of the Solicitor General (OSG), filed an Opposition[14] to
the application, alleging, inter alia, that: (1) neither the applicants nor their predecessorsin-interest have been in open, continuous, exclusive and notorious possession of the land
since June 12, 1945 or prior thereto; (2) the muniments of title, tax declarations and tax
receipts do not constitute competent and sufficient evidence of a bona fide acquisition of
the land; and (3) that the parcels of land applied for are portions of the public domain and
are not subject to private appropriation.
No other parties filed their opposition. Thus, on December 14, 1998, an Order of
General Default[15] was issued by the trial court.
After hearing, the trial court rendered a Decision granting petitioners'
application. The fallo of the trial courts decision reads:
WHEREFORE, in view of the foregoing, decision is hereby rendered as follows:
1. Confirming the imperfect title of the herein applicants
Vicente Yu Chang and Soledad Yu Chang over the two (2) parcels of land
described in paragraph two (2) page 2 of the Petition, particularly Lot
2199, Plans S0-05-000888, Cad. 291, Pili Cadastre and Lot 2200, Plan
SWO-05-000888, Cad. 291, Pili Cadastre; both Filipino citizens, residents
of #14 Joaquin St., Corinthian Garden, Quezon City and San Juan, Pili,
Camarines Sur respectively;
2. Ordering the dismissal of the application in the Cadastral proceeding
with respect to Lots 2199 and 2200, Cad. 291, Pili Cadastre under CAD
Case No. N-9;
3. After finality of this decision, let the corresponding decree of
registration be issued by the Administrator, Land Registration Authority
to the herein applicants above-mentioned.
SO ORDERED.[16]
The Republic appealed the decision to the CA on the ground that the court a quo erred in
granting petitioners application for registration of Lots 2199 and 2200 despite their failure
to show compliance with the requirements of the law. In addition, the Republic asserted
that the land was classified as public forest land; hence, it could not be subject to
appropriation and alienation.
As aforesaid, the CA reversed the trial court's decision on August 26, 2005, and dismissed
petitioners application for land registration. The CA considered the petition to be
governed by Section 48(b) of Commonwealth Act (C.A.) No. 141 or the Public Land Act, as
amended, and held that petitioners were not able to present incontrovertible evidence
that the parcels of land sought to be registered are alienable and disposable. [17] The CA
relied on the testimony of Lamberto Orcena, Land Management Officer III of CENRO, Iriga
City, who testified that prior to October 30, 1986, the entire area encompassing the right
side of the Naga-Legaspi Highway, including the subject properties, was classified as forest
land. According to the CA, even if the area within which the subject properties are located
is now being used for residential and commercial purposes, such fact will not convert the
subject parcels of land into agricultural land.[18] The CA stressed that there must be a

positive act from the government declassifying the land as forest land before it could be
deemed alienable or disposable land for agricultural or other purposes. [19]
Additionally, the CA noted that the lands sought to be registered were declared disposable
public land only on October 30, 1986. Thus, it was only from that time that the period of
open, continuous and notorious possession commenced to toll against the State.
Aggrieved, petitioners are now before this Court via the present appeal, raising the sole
issue of whether the appellate court erred in dismissing their application for registration of
title on the ground that they failed to prove compliance with the requirements of Section
48(b) of the Public Land Act, as amended.
Petitioners insist that the subject properties could no longer be considered and classified
as forest land since there are buildings, residential houses and even government
structures existing and standing on the land.[20] In their Memorandum,[21] petitioners point
out that the original owner and possessor of the subject land was the Municipal
Government of Pili which was established in 1930. The land was originally part of the
municipal ground adjacent to the Municipal Building located at the right side of the NagaLegaspi National Highway.[22] From 1949, when L. Yu Chang acquired the property through
barter and up to the filing of petitioners application in 1997, petitioners and their
predecessors-in-interest had been in actual physical and material possession of the land in
the concept of an owner, notorious and known to the public and adverse to the whole
world.
The Republic, through the OSG, for its part, maintains that petitioners failed to prove their
open, continuous, exclusive and notorious possession of the subject lots for the period of
time required by law. The OSG also submits that the subject lands were declared as
alienable and disposable only on October 30, 1986.
We deny the petition for lack of merit.
Section 48(b) of the Public Land Act, as amended by P.D. 1073, under which petitioners
application was filed, provides:
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 Regional Trial Court of the province or city
where the land is located for confirmation of their claims and the
issuance of a certificate of title therefor, under the Property
Registration Decree, to wit:
xxxx
(b) Those who by themselves or through their predecessors[]in[-]interest have been in the open, continuous, exclusive, and
notorious possession and occupation of alienable and disposable
agricultural lands of the public domain, under a bona fide claim of
acquisition or ownership, since June 12, 1945, 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.
x x x x[23]
Under this provision, in order that petitioners application for registration of title may be
granted, they must first establish the following: (1) that the subject land forms part of the

62

disposable and alienable lands of the public domain and (2) that they have been in open,
continuous, exclusive and notorious possession and occupation of the same under a bona
fide claim of ownership, since June 12, 1945, or earlier.[24] Applicants must overcome the
presumption that the land they are applying for is part of the public domain and that they
have an interest therein sufficient to warrant registration in their names arising from an
imperfect title.[25]
In the instant case, petitioners did not adduce any evidence to the effect that the lots
subject of their application are alienable and disposable land of the public domain.
Instead, petitioners contend that the subject properties could no longer be considered
and classified as forest land since there are building structures, residential houses and
even government buildings existing and standing on the area. This, however, is hardly the
proof required under the law. As clarified by this Court in Heirs of Jose Amunategui v.
Director of Forestry,[26] a forested area classified as forest land of the public domain does
not lose such classification simply because loggers or settlers may have stripped it of its
forest cover. Parcels of land classified as forest land may actually be covered with grass or
planted with crops by kaingin cultivators or other farmers. Forest lands do not have to be
on mountains or in out-of-the-way places. The classification of land is descriptive of its
legal nature or status and does not have to be descriptive of what the land actually looks
like.[27] Unless and until the land classified as forest land is released in an official
proclamation to that effect so that it may form part of the disposable agricultural lands of
the public domain, the rules on confirmation of imperfect title do not apply.[28] As aptly
held by the appellate court:
[T]he fact that the area within which the subject parcels of land are
located is being used for residential and commercial purposes does not
serve to convert the subject parcels of land into agricultural land. It is
fundamental that before any land may be declassified from the forest
group and converted into alienable or disposable land for agricultural or
other purposes, there must be a positive act from the government. A
person cannot enter into forest land and by the simple act of cultivating
a portion of that land, earn credits towards an eventual confirmation of
imperfect title. The Government must first declare the forest land to be
alienable and disposable agricultural land before the year of entry,
cultivation and exclusive and adverse possession can be counted for
purposes of an imperfect title.[29]
Moreover, during the hearing of petitioners' application, the Republic presented a
Report[30] of Rene Gomez, Land Investigator/Inspector, CENRO No. V-2-3, which
disclosed that the lots applied for by the petitioners were classified as alienable and
disposable under Project No. 9-E, L.C. Map No. 3393 and released and certified as
such only on October 30, 1986. A Compliance[31] dated January 19, 1999 submitted by
OIC-CENR Officer Joaquin Ed A. Guerrero to the trial court also stated that Lots. 2199
and 2200 of Cad. 291 were verified to be within Alienable and Disposable area under
Project No. 9-E, L.C. Map No. 3393, as certified on October 30, 1986 by the then
Bureau of Forestry. Evidently, therefore, the subject lots were declared alienable and
disposable only on October 30, 1986. Prior to that period, the same could not be the
subject of confirmation of imperfect title. Petitioners possession of the subject forest
land prior to the date when it was classified as alienable and disposable is
inconsequential and should be excluded from the computation of the period of
possession.[32] To reiterate, it is well settled that possession of forest land, prior to its

classification as alienable and disposable land, is ineffective since such possession

may not be considered as possession in the concept of owner.[33]The adverse
possession which can be the basis of a grant of title in confirmation of imperfect title
cases cannot commence until after forest land has been declared and alienable.[34]
Much as this Court wants to conform to the States policy of encouraging and
promoting the distribution of alienable public lands to spur economic growth and remain
true to the ideal of social justice, our hands are tied by the laws stringent safeguards
against registering imperfect titles.[35] Here, petitioners failed to present well-nigh
incontrovertible evidence necessary to prove their compliance of the requirements under
Section 48(b) of C.A. No. 141. Hence, the Court of Appeals did not err in dismissing their
application for confirmation and registration of title.
WHEREFORE, the petition is hereby DENIED. The Decision dated August 26, 2005 and the
Resolution dated February 13, 2006 of the Court of Appeals in CA-G.R. CV No. 67430 are
hereby AFFIRMED.
With costs against the petitioners.
SO ORDERED.
_________________________________________________________________________
Republic of the Philippines
Supreme Court
Manila
SECOND DIVISION
G.R. No. 156318
SPOUSES ANSELMO[1] and PRISCILLA BULAONG,
Petitioners,

Present:
CARPIO, J., Chairperson,
BRION,
PEREZ,
MENDOZA,* and
SERENO, JJ.
Promulgated:
September 5, 2011

- versus -

VERONICA GONZALES,
Respondent.

x---------------------------------------------------------------------------------------------------------x
DECISION

63

BRION, J.:
Petitioners Anselmo Bulaong and Priscilla Bulaong collectively referred to as
the Bulaongs seek, through their petition for review on certiorari, the reversal of the
decision[2] of the Court of Appeals (CA) dated July 31, 2002 in CA-G.R. SP No. 55423 and
the subsequent resolution of November 27, 2002[3] reiterating this decision. These CA
rulings reversed and set aside the decision[4] of the Regional Trial Court (RTC) of Malolos,
Bulacan, Branch 12, that ordered the cancellation of Transfer Certificate of Title (TCT) No.
T-62002 and TCT No. T-62003.

Thereafter, on February 24, 1993, new titles were again issued upon
the extrajudicial settlement of the estate of Reginas parents. Thus, TCT No. RT-29488 was
cancelled and TCT No. T-30395 was issued in its place, with Regina replacing her parents as
the registered owner; similarly, TCT No. RT-22489 was cancelled and TCT No. T-30396 was
issued in the names of Pacifica Limpo and Regina Limpo, as her parents heir.[13]
To the Bulaongs astonishment, the new titles in Reginas name now contained the
following entries:
TCT No. T-30395

FACTUAL ANTECEDENTS
This case traces its roots to the conflicting claims of two sets of parties over two parcels of
land. The first parcel of land, with an area of 237 square meters and covered by TCT No. T249639,[5] was originally registered in the name of Fortunato E. Limpo, married to Bertha
Limpo.[6] The other parcel of land, with an area of 86 square meters and covered by TCT
No. T-249641,[7] was originally registered in the names of Pacifica E. Limpo, married to
Nicanor C. Sincionco, and Fortunato E. Limpo, married to Bertha Limpo.[8]
These parcels of land were mortgaged by the daughter of Fortunato and Bertha
Limpo, Regina Christi Limpo, upon the authority of her father,[9] to the Bulaongs, to secure
a loan in the amount of P4,300,000.00. The mortgage was evidenced by a Deed of
Mortgage dated January 13, 1993.[10]
The Bulaongs alleged that before they executed the mortgage, Regina gave them
the owners duplicates of title of the two properties. In early January
1993 (the exactdate is unknown but prior to the execution of the mortgage), Anselmo
Bulaong, together with his counsel, Atty. Roberto Dionisio, allegedly went to the Office of
the Register of Deeds of Bulacan to check the titles of the properties to be
mortgaged. According to the Bulaongs, the Register of Deeds, Atty. Elenita Corpus,
assured them that TCT Nos. T-249639 and T-249641 were completely clear of any liens or
encumbrances from any party. Relying on this assurance, Anselmo Bulaong agreed to the
execution of the mortgage over the two properties.[11]

After the execution of the mortgage, the Bulaongs once again went to the Office of the
Register of Deeds of Bulacan to register and annotate the mortgage on the titles.They
learned then that the Register of Deeds copies of the two titles were among the records
that were burned in the fire that destroyed the entire office of the Register of Deeds of
Bulacan on March 7, 1987. Atty. Elenita Corpus convinced them to cause the
reconstitution of the originals of the titles, and further assured them that the mortgage
over the properties would be protected since a copy of the Deed of Mortgage had already
been given to her office for annotation.[12]
On February 4, 1993, the newly reconstituted titles were issued TCT No. RT29488 replaced TCT No. T-249639, and TCT No. RT-22489 replaced TCT No. T-249641, still
in the names of Fortunato Limpo, and of Pacifica Limpo and Fortunato Limpo, respectively.

Entry No. 5306; Kind: Condition: The property herein described is

subject to the prov. of sec. 4, rule 74 of the rules of court. date of
instrument: 1-13-93; date of inscription: 2-24-93 at10:42 a.m.
(SGD.) ELENITA E. CORPUS
Register of Deeds
Entry No. 5484; Kind: Mortgage: Exec. In favor of: Sps. Anselmo
Bulaong & Priscilla Bulaong; Condition: Covering the parcel of land
herein described, for the sum of P4,300,000.00 subject to all the
conditions stipulated in the deed of mortgage on file in this office. Doc.
No. 428, Page 86, Book XXX, S. of 1993, N.P. Roberto Dionisio of Mal.
Bul. Date of Instrument: 1-13-93; date of inscription 3-1-93 at 9:20 a.m.
(SGD.) ELENITA E. CORPUS
Register of Deeds
/5306
(NOTE: Proceed to Entry no. 5484)
Entry No. 7808: Kind: NOTICE OF LEVY ON EXECUTION: Conditions:
Notice is hereby given that by virtue of the Writ of Execution, issued in
Crim. Cases Nos. 9638 to 9646-M, entitled People of the Philippines v.
Reggie Christi Schaetchen Limpo and Maria Lourdes (Bong) Diaz y
Gamir, et al., Accused by the Regional Trial Court, Third Jud. Region,
Branch 12, Malolos, Bulacan, under date of Dec. 29, 1992, and at the
instance of the private complainant Veronica R. Gonzales, thru counsel,
levy on execution is hereby made upon all the rights, shares, interests
and participations of accused Reggie Christi Schaetchen[14] over the real
properties described in T-249641 and T-249639, by virtue of Deeds of
Absolute Sale executed by former registered owners in favor of Reggie
Christi Schaetchen dated November 5, 1991, together with all the
improvements existing thereon, was levied on execution preparatory to
the sale of the same without prejudice to third persons having better
right thereof and to any valid lien and encumbrances. Date of
instrument Jan. 4, 1993; Date of inscription Jan. 4, 1993 at11:50 a.m.
(SGD.) ELENITA E. CORPUS
Register of Deeds/negm[15] (emphasisours)

64

TCT No. T-30396

Entry No. 5306; Kind: Condition: One-half (1/2) of the property herein
described is subject to the prov. of sec. 4, rule 74 of the rules of court.
date of instrument: 1-13-93; date of inscription:2-24-93 at 10:42 a.m.
(SGD.) ELENITA E. CORPUS
Register of Deeds
Entry No. 5484; Kind: Mortgage: Exec. In favor of: Sps. Anselmo Bulaong
& Priscilla Bulaong; Condition: Covering the parcel of land herein
described, for the sum of P4,300,000.00 subject to all the conditions
stipulated in the deed of mortgage on file in this office. Doc. No. 428,
Page 86, Book XXX, S. of 1993, N.P. Roberto Dionisio of Mal. Bul. Date of
Instrument: 1-13-93; date of inscription 3-1-93 at 9:20 a.m.
(SGD.)
ELENITA
E.
CORPUS
Register of Deeds

/5306
(NOTE: Proceed to Entry No. 5484)
Entry No. 7808: Kind: NOTICE OF LEVY ON EXECUTION: Conditions:
Notice is hereby given that by virtue of the Writ of Execution, issued in
Crim. Cases Nos. 9638 to 9646-M, entitled People of the Philippines v.
Reggie Christi Schaetchen Limpo and Maria Lourdes (Bong) Diaz y
Gamir, et al., Accused by the Regional Trial Court, Third Jud. Region,
Branch 12, Malolos, Bulacan, under date of Dec. 29, 1992, and at the
instance of the private complainant Veronica R. Gonzales, thru counsel,
levy on execution is hereby made upon all the rights, shares, interests
and participations of accused Reggie Christi Schaetchen over the real
properties described in T-249641 and T-249639, by virtue of Deeds of
Absolute Sale executed by former registered owners in favor of Reggie
Christi Schaetchen dated Nov. 5, 1991, together with all the
improvements existing thereon, was levied on execution preparatory to
the sale of the same without prejudice to third persons having better
right thereof and to any valid lien and encumbrances. Date of
instrument Jan. 4, 1993; Date of inscription Jan. 4, 1993 at 11:50 a.m.
(SGD.) ELENITA E. CORPUS
Register of Deeds/negm[16] (emphasisours)

It appears that a certain Veronica Gonzales had filed a criminal case for estafa
against Regina with the RTC of Bulacan, Branch 12.[17] On October 28, 1991, the RTC
rendered a decision acquitting Regina, but at the same time ordering her to pay Veronica

actual damages in the total amount of P275,000.00.[18] By virtue of a writ of execution

issued on December 29, 1992, the above-quoted notice of levy was recorded in the
Primary Entry Book of the Registry of Bulacan on January 4, 1993. However, this was not
annotated on the titles themselves because at the time of the levy, the properties had not
yet been transferred to Regina, but were still registered in the name of her parents.[19]
Based on the annotation referring to the notice of levy, the subject of the levy
was Reginas interest in the properties which, in turn, was anchored on a Deed of Absolute
Sale allegedly executed by her parents on November 5, 1991 to transfer their interest in
both properties to her. Notably, Regina never registered this sale with the Register of
Deeds.
To satisfy Reginas judgment debt, the two lots were sold at public auction
on June 8, 1993 to Veronica, the only bidder, for P640,354.14.[20] The Certificate of Sale
was annotated on the titles on June 8, 1993 as Entry No. 2075. Upon the lapse of the one
year redemption period on June 20, 1994, Veronicas titles over the properties were
consolidated. A final deed of sale was issued in Veronicas name and annotated as Entry
No. 40425 on TCT Nos. T-30395 and T-30396 on June 24, 1994.[21]
On the other hand, the Bulaongs also had the mortgage extrajudicially
foreclosed, with the sheriff conducting the auction sale on August 22, 1994. The Bulaongs
were the highest bidders, buying the properties for the sum of P4,300,000.00. They also
paid the corresponding capital gains tax of P215,000.00, plus P64,500.00 for the
documentary stamp tax, which were required before the titles to the lots could be
transferred in their names. The Certificate of Sale in their favor was inscribed onAugust 23,
1994 on TCT No. T-30395 and TCT No. T-30396 as Entry No. 46739.[22]
Veronica thereafter filed a petition for the surrender to the Register of Deeds of
the owners copies of TCT Nos. T-30395 and T-30396 with the RTC of Malolos, docketed as
LRC Case No. P-292. On December 16, 1994, the RTC granted the petition and ordered
Regina to surrender her owners copies of the titles; should Regina fail to comply, the RTC
ordered the Register of Deeds to cancel these titles and issue new ones in Veronicas
name. Complying with this order, the Register of Deeds cancelled TCT Nos. T-30395 and T30396, and issued TCT No. T-62002 in Veronicas name, and TCT No. T-62003 in the name
of Veronica and Pacifica Limpo. These new titles were clean and did not contain any
annotations, liens or encumbrances.
The Bulaongs thus filed a petition for mandamus with the RTC of Bulacan against
Ramon Sampana, the incumbent Register of Deeds of Bulacan, and Veronica, praying that
the court order Sampana to cancel TCT Nos. T-62002 and T-62003, and issue new titles in
their names; and order the respondents therein to pay them moral and exemplary
damages, and attorneys fees.
On July 30, 1999, the RTC ruled in favor of the Bulaongs. According to the RTC,
allowing Veronica to levy on the properties worth at least P5,000,000.00 for a judgment
of P275,000.00 would result in gross unjust enrichment. The RTC thus ordered the Register
of Deeds of Bulacan to issue new titles in the name of the Bulaongs, but only after the
Bulaongs had reimbursed the amount of P275,000.00 to Veronica, with interest. The RTC

65

also ordered Veronica to pay the BulaongsP50,000.00 as attorneys fees. The dispositive
portion of the RTC decision reads:
WHEREFORE, conformably with all the foregoing, judgment is
hereby rendered:
1.

Annulling and cancelling Transfer Certificates of Title Nos. T-62002

in the name of defendant Veronica Gonzales, and T-62003 in the
name of defendant Veronica Gonzales and Pacifica E. Limpo
married to Nicanor C. Sincioco;

In its July 31, 2002 decision, the CA upheld the validity of the Notice of Levy on Execution,
noting that it created a lien in favor of the judgment creditor over the property. According
to the CA, when the Bulaongs received the owners copies of TCT Nos. T-30395 and T30396, the Notice of Levy was already annotated on the titles and, thus, should have put
them on guard. As mortgagees of the lots, the Bulaongs had the option to redeem the
properties within the redemption period provided by law. Since they failed to avail of this
remedy, the consolidation of titles in Veronicas name was proper.
THE PETITION
The Bulaongs filed the present petition, raising the following issues:

2.

3.

4.

5.

Ordering the Ex-Officio Sheriff of Bulacan to execute a final deed

of sale in favor of petitioner spouses Anselmo Bulaong and
Pr[i]scilla Bulaong on the basis of the registered Certificate of Sale
executed by said court officer on August 23, 1994, in favor of said
spouses-mortgagee, without the owner-mortgagors exercising the
right of redemption since then;
Ordering the Register of Deeds of Bulacan to issue new titles, in
place of Transfer Certificate of Title Nos. T-62002 and T-62003, this
time in the name of petitioner spouses Anselmo Bulaong and
Pr[is]cilla Bulaong, as soon as the aforesaid final deed of sale in
their favor is executed by the Ex-Officio Sheriff of Bulacan and only
after said spouses shall have paid and/or reimbursed Veronica
Gonzales lien as judgment creditor in the amount of P275,000.00,
plus interests at the legal rate computed from November 19, 1995,
until fully paid and satisfied;
Order[ing] herein defendants Veronica R. Gonzales and the
Register of Deeds of Bulacan upon notice of this judgment, not to
effect any transfer, encumbrance or any disposition whatsoever of
the parcels of land covered by Transfer Certificates of Title Nos.
62002 and T-62003, or any part thereof, right or interest therein,
either by sale or any form of conveyance, lien or encumbrance; and
Ordering only defendant Veronica R. Gonzales to pay herein
petitioners P50,000.00 as just and equitable attorneys fees, and
the costs of suit, defendant Ramon C. Sampana as the Register of
Deeds of Bulacan having merely performed his ministerial duty of
following the court order of issuing titles to defendant Gonzales.

No pronouncement as to moral and exemplary damages

alleged in the petition but not even testified to by petitioners at the
trial.[23]

Both parties appealed to the CA, with the case docketed as CA-G.R. SP No. 55423.

a) Whether Entry No. 7808 is valid;

b) Whether Veronica has a superior right over the properties; and
c)

Assuming the notice of levy earlier annotated in favor of Veronica to be

valid, whether there was a valid foreclosure sale.
THE COURTS RULING

We GRANT the petition.

Procedural issues
Time and again, we have stated that petitions for review on certiorari shall only
raise questions of law, as questions of fact are not reviewable by this Court. The main
issue of who has a better right over the disputed properties is not only a question of law
but one that requires a thorough review of the presented evidence, in view particularly of
the Bulaongs allegation that fraud attended the annotation of Entry No. 7808 in the titles.
Thus, in the usual course, we would have denied the present petition for violation of
Section 1, Rule 45 of the Rules of Court, which provides:
Section 1. Filing of petition with Supreme Court. A party
desiring to appeal by certiorari from a judgment or final order or
resolution of the Court of Appeals, the Sandiganbayan, the Regional
Trial Court or other courts whenever authorized by law, may file with
the Supreme Court a verified petition for review on certiorari. The
petition shall raise only questions of law which must be distinctly set
forth. (emphasis ours)
This rule, however, admits of several exceptions. Questions of fact may be
reviewed, among others, when the lower court makes inferences that are manifestly
mistaken, and when the judgment of the CA is based on a misapprehension of facts. [24] As
will be apparent in the discussions below, these exceptional circumstances are present in
the present case. A review of the evidence, therefore, is not only allowed, but is necessary
for the proper resolution of the presented issues.

THE COURT OF APPEALS DECISION

66

It has not escaped our attention that the Bulaongs appear to have erroneously
filed a petition for mandamus for what is essentially an action to assail the validity of
Veronicas certificates of title over the subject properties. This lapse, however, is not legally
significant under the well-settled rule that the cause of action in a complaint is not the title
or designation of the complaint, but the allegations in the body of the complaint. The
designation or caption is not controlling as it is not even an indispensable part of the
complaint; the allegations of the complaint control.[25] We thus proceed to resolve the
case, bearing in mind that the relief the Bulaongs sought before the lower court was to
nullify Veronicas certificates of title and to order the Register of Deeds to issue new titles
in their name.
Redemption not the proper remedy
The CA faulted the Bulaongs for not redeeming the properties from Veronica
when they had the option of doing so. For failing to exercise this right, the CA concluded
that the consolidation of the titles to the lots in Veronicas name thus became a matter of
course.
We disagree.
At the outset, we observe that this is not a simple case of determining which lien
came first. A perusal of the Bulaongs submissions to the Court shows that they have
consistently maintained that the levy and the corresponding execution sale in Veronicas
favor are null and void. Had the Bulaongs merely exercised the right of redemption, they
would have been barred from raising these issues in court, pursuant to our ruling
in Cometa v. Intermediate Appellate Court: [26]
The respondent appellate court's emphasis on the failure of
the petitioner to redeem the properties within the period required by
law is misplaced because redemption, in this case, is inconsistent with
the petitioner's claim of invalidity of levy and sale. Redemption is an
implied admission of the regularity of the sale and would estop the
petitioner from later impugning its validity on that
ground.[27] (emphasis ours)

The Bulaongs were thus justified in their refusal to redeem the properties.
Annotation is valid
The Bulaongs assail the validity of Entry No. 7808 (relating to the Notice of Levy
on Execution in Veronicas favor) on the two titles, asserting that it is null and void for
being a fraudulent entry. In support of this contention, they note the following suspicious
circumstances: (a) although Entry No. 7808 has a higher number and appears after Entry
No. 5484 (corresponding to the Bulaongs mortgage) on the titles, Entry No. 7808 appeared
in an earlier volume of the Book of Entries; and (b) although the Notice of Levy on
Execution was purportedly presented to the Registry of Bulacan on January 4, 1993, or

prior to the date when the Bulaongs deed of mortgage was presented on January 13,
1993, the Notice of Levy on Execution, Entry No. 7808, was numbered and placed after the
mortgage, Entry No. 5484, on the titles.
We agree that these circumstances render the Notice of Levy on Execution,
annotated on the titles, highly suspicious. These circumstances, however, can be
sufficiently explained when the records are examined.
The records show that on January 4, 1993, Veronica went to the Registry of
Bulacan with the Notice of Levy on Execution, requesting that the notice be registered.
While the Register of Deeds placed the Notice of Levy on Execution in the Primary Entry
Book, she did not immediately make a registration when a question arose regarding the
registrability of the notice; the question necessitated the submission of a consulta to the
Land Registration Authority (LRA) on January 25, 1993.[28]
The LRA Administrator responded to the consulta only on February 10,
1993.[29] Thus, the Notice of Levy on Execution was not immediately annotated on the
newly reconstituted titles, which were issued on February 4, 1993. It was only when new
titles were again issued to reflect the extrajudicial settlement of the estate ofReginas
parents on February 24, 1993 that the Notice of Levy on Execution appeared on the titles
as Entry No. 7808.
The apparent discrepancy in the numbering of the Notice of Levy on Execution
and the date of inscription on the certificates of title is suitably explained by Section 56 of
Presidential Decree No. 1529 whose pertinent portion states:
Section 56. Primary Entry Book; fees; certified copies. Each
Register of Deeds shall keep a primary entry book in which, upon
payment of the entry fee, he shall enter, in the order of their
reception, all instruments including copies of writs and processes filed
with him relating to registered land. He shall, as a preliminary process
in registration, note in such book the date, hour and minute of
reception of all instruments, in the order in which they were
received. They shall be regarded as registered from the time so noted,
and the memorandum of each instrument, when made on the
certificate of title to which it refers, shall bear the same date:
Provided, that the national government as well as the provincial and
city governments shall be exempt from the payment of such fees in
advance in order to be entitled to entry and registration. [emphases
ours]

In other words, the order of entries in the Primary Entry Book determines the
priority in registration. Thus, the Register of Deeds merely complied with the law when she
fixed Entry No. 7808s date of inscription as January 4, 1993, to coincide with the date
when the Notice of Levy on Execution was presented and inscribed in the Primary Entry
Book.

67

The late annotation of the levy on execution on the titles did not at all lessen its
effectivity. Jurisprudence has already established the rule that the entry of the notice of
levy on execution in the Primary Entry Book, even without the corresponding annotation
on the certificate of titles, is sufficient notice to all persons that the land is already subject
to the levy.[30] As we explained in Armed Forces and Police Mutual Benefit Association, Inc.
v. Santiago:[31]
The notice of levy on attachment in favor of petitioner may be
annotated on TCT No. PT-94912. Levin v. Bass (91 Phil. 420 [1952]; see
also Dr. Caviles, Jr. v. Bautista, 377 Phil. 25; 319 SCRA 24 [1999]; Garcia
v. Court of Appeals, 184 Phil. 358; 95 SCRA 380 [19890]) provided the
distinction between voluntary registration and involuntary registration.
Involuntary registration, such as a sale, mortgage, lease and the like, if
the owner's duplicate certificate be not surrendered and presented or if
no payment of registration fees be made within fifteen (15) days, entry
in the day book of the deed of sale does not operate to convey and
affect the land sold. In involuntary registration, such as an attachment,
levy upon execution, lis pendens and the like, entry thereof in the day
book is a sufficient notice to all persons of such adverse claim.
The entry of the notice of levy on attachment in the primary
entry book or day book of the Registry of Deeds on September 14,
1994 is sufficient notice to all persons, including the respondent, that
the land is already subject to an attachment. The earlier registration of
the notice of levy on attachment already binds the land insofar as
third persons are concerned.[32] (emphases ours)

Consequently, when the Register of Deeds placed the Notice of Levy on

Execution in the Primary Entry Book on January 4, 1993, this entry already bound third
persons to the notice entered.
Validity of the Levy
i.

Reginas interest in the properties is not established

The levy on execution for judgment is the act x x x by which an officer sets apart
or appropriate[s,] for the purpose of satisfying the command of the writ, a part or the
whole of the judgment debtors property.[33] Every interest which the judgment debtor may
have in the property may be subjected to levy on execution.[34] As established by the Court
in Reyes v. Grey:[35]
The term "property" as here applied to lands comprehends
every species of title, inchoate or complete; legal or equitable. This
statute authorizes the sale under execution of every kind of property,
and every interest in property which is, or may be, the subject of
private ownership and transfer. It deals with equitable rights and

interests as it deals with legal, without anywhere expressly recognizing

or making any distinction between them. [emphases ours]

In Reyes, the Court set the standard to be applied in determining the kind of
property that can be subject to attachment:
We think the real test, as to whether or not property can be attached
and sold upon execution is does the judgment debtor hold such
a beneficial interest in such property that he can sell or otherwise
dispose of it for value? If he does, then the property is subject to
execution and payment of his debts.[36] (emphasis and underscoring
ours)

Applying the test in Reyes, the Court, in Gotauco & Co. v. Register of Deeds of
Tayabas,[37] recognized as valid the inscription of a notice of levy on execution on the
certificates of title, even though the titles were not in the name of the judgment debtor
(Rafael Vilar). According to the Court, while the certificates of title were still registered in
the name of Florentino Vilar, since Rafael Vilar presented a copy of a petition filed with the
lower court, from which it could be inferred that Florentino Vilar was dead and Rafael Vilar
was one of his heirs, Rafael had an interest in Florentinos property that could properly be
the subject of attachment, even if his participation in Florentinos property
was indeterminable before the final liquidation of the estate.
Similarly, in Pacific Commercial Co. v. Geaga,[38] the Court held that although the Register
of Deeds may properly reject an attachment where it appears that the titles involved are
not registered in the name of the defendants (debtors), that rule yields to a case where
there is evidence submitted to indicate that the defendants have present or future
interests in the property covered by said titles, regardless of whether they still stand in the
names of other persons. The fact that the present interests of the defendants are still
indeterminate, and even though there was no judicial declaration of heirship yet, is of no
consequence for the purpose of registering the attachment in question. This is the case
since what is being attached and what may be later sold at public auction in pursuance
of the attachment cannot be anything more than whatever rights, titles, interests and
participations which the defendants may or might have in the property so attached. In
other words, if they had actually nothing in the property, then nothing is affected and the
property will remain intact.[39] This rule is expressed in Section 35, Rule 39 of the old Rules
of Civil Procedure, which provides:
Upon the execution and delivery of said deed [of conveyance
and possession], the purchaser, or redemptioner, or his assignee, shall
be substituted to and acquire all the right, title, interest and claim of
the judgment debtor to the property as of the time of the
levy[.] [emphases ours]

68

Although we recognize the validity of the annotation of the levy on the execution
in the present case, the question of whether the levy itself is valid remains to be
determined. To do this, Reginas interest in the subject properties at the time of the levy
has to be ascertained. To recall, Veronicas notice of levy on execution is based on Reginas
interest in the two properties, which she acquired via the Deed of Absolute Sale
purportedly executed by her parents in her favor on November 5, 1991. But is this Deed of
Absolute Sale a sufficient evidence of Reginas interest in the subject properties?
After carefully reviewing the evidence on record, we rule in the negative.
To begin with, not only were the properties subject of the attachment not
registered in Reginas name, the Deed of Absolute Sale on which Regina based her
interest was not even annotated on these titles. While Regina purportedly purchased her
parents rights to the subject properties in 1991, she never asserted her rights over these
properties by presenting the Deed of Absolute Sale to the Register of Deeds for
registration and annotation on the titles. As a matter of fact, it was Veronica, and
not Regina, who presented the Deed of Absolute Sale to the Register of Deeds.
More importantly, from the records, it is clear that the subject properties were
finally registered in Reginas name, not by virtue of the 1991 Deed of Absolute Sale,
but by virtue of succession, specifically by the Adjudication that Regina filed with the
Register of Deeds on February 24, 1993,[40] pursuant to Section 1, Rule 74 of the Rules of
Court.[41] The procedure by which the properties were registered in Reginas name suggests
that when Reginas parents died, the subject lots still formed part of Reginas parents
estate, and were not, as Veronica claims, sold to Regina in 1991, thereby casting doubt to
the validity of the Deed of Absolute Sale. As the Bulaongs reason in their memorandum, if
the subject properties had already been sold to Regina as early as 1991, why would they
still be considered a part of her parents estate in 1993?[42]
Another point to consider is that Regina dealt with the Bulaongs as her fathers
representative when they were negotiating the mortgage over the properties.[43] If she had
already acquired her parents interest in these properties in 1991, she would not have
needed any authority from her father to execute the mortgage with the Bulaongs; she
would have done so in her own capacity.
These facts, taken together, lead us to doubt that Regina had any interest in the
properties at the time of the levy. Thus, unlike in the previously cited cases where the
debtors, although possessing merely an inchoate interest in the properties at the time of
the levy, had interests that were established with reasonable certainty and could be the
subject of attachment; in the present case, the evidence on record fails to prove that
Regina actually had any interest in the properties which could be the subject of levy.
The spring cannot rise higher than its source.[44] Since Regina had no established
interest in the subject properties at the time of the levy, Veronicas levy had nothing to
attach to in the subject properties.
ii.

Unregistered sale of land cannot bind third parties

Even assuming that the Deed of Absolute Sale in Reginas favor was valid, we still
cannot uphold the validity of the levy and execution sale in Veronicas favor.
The general rule in dealing with registered land is set forth in Section 51 of P.D.
No. 1529:
Section 51. Conveyance and other dealings by registered
owner. An owner of registered land may convey, mortgage, lease,
charge or otherwise deal with the same in accordance with existing
laws. He may use such forms of deeds, mortgages, leases or other
voluntary instruments as are sufficient in law. But no deed, mortgage,
lease, or other voluntary instrument, except a will purporting to convey
or affect registered land shall take effect as a conveyance or bind the
land, but shall operate only as a contract between the parties and as
evidence of authority to the Register of Deeds to make registration.
The act of registration shall be the operative act to convey or
affect the land insofar as third persons are concerned, and in all cases
under this Decree, the registration shall be made in the office of the
Register of Deeds for the province or city where the land lies.
[emphases ours]

From the standpoint of third parties, a property registered under

the Torrens system remains, for all legal purposes, the property of the person in whose
name it is registered, notwithstanding the execution of any deed of conveyance, unless
the corresponding deed is registered.[45] Simply put, if a sale is not registered, it is binding
only between the seller and the buyer, but it does not affect innocent third persons.
Undoubtedly, Veronicas claim on the properties is rooted in the unregistered
Deed of Absolute Sale between Regina and her parents. The Bulaongs do not appear to
have had any knowledge that this sale ever took place. To recall, Regina gave the Bulaongs
the owners duplicate certificates of the properties, which showed that the properties were
registered in the names of her parents, Fortunato and Bertha Limpo. It thus appears that
the Bulaongs first learned about the sale betweenRegina and her parents when they
received the newly issued titles in Reginas name which contained the annotation of the
levy in Veronicas favor.
One of the principal features of the Torrens system of registration is that all
encumbrances on the land shall be shown, or at least intimated upon the certificate of title
and a person dealing with the owner of the registered land is not bound to go behind the
certificate and inquire into transactions, the existence of which is not there
intimated.[46] Since the Bulaongs had no knowledge of the unregistered sale
between Regina and her parents, the Bulaongs can neither be bound by it, nor can they
be prejudiced by its consequences. This is but the logical corollary to the rule set forth in
Section 51 of P.D. No. 1529, in keeping with the basic legal maxim that what cannot be
done directly cannot be done indirectly.

69

Execution sale in Veronicas favor was highly irregular

We also find that the execution sale in favor of Veronica is invalid because Reginas interest
in both lots was sold together, in violation of Sections 15 and 21, Rule 39 of the old Rules
of Court. The pertinent portions of these provisions provide:
Section 15. Execution of money judgments. The officer must enforce an
execution of a money judgment by levying on all the property, real and
personal of every name and nature whatsoever, and which may be
disposed of for value, of the judgment debtor not exempt from
execution, or on a sufficient amount of such property, if there be
sufficient, and selling the same, and paying to the judgment creditor, or
his attorney, so much of the proceeds as will satisfy the judgment. Any
excess in the proceeds over the judgment and accruing costs must be
delivered to the judgment debtor, unless otherwise directed by the
judgment or order of the court. When there is more property of the
judgment debtor than is sufficient to satisfy the judgment and accruing
costs, within the view of the officer, he must levy only on such part of
the property as is amply sufficient to satisfy the judgment and costs.
Section 21. How property sold on execution. Who may direct manner
and order of sale. All sales of property under execution must be made
at public auction, to the highest bidder, between the hours of nine in
the morning and five in the afternoon. After sufficient property has
been sold to satisfy the execution, no more shall be sold. When the
sale is of real property, consisting of several known lots, they must be
sold separately; or, when a portion of such real property is claimed by a
third person, he may require it to be sold separately. [emphases ours]
Where the property to be sold consists of distinct lots, tracts or parcels, or is
susceptible of division without injury, it should be offered for sale in parcels and not en
masse, for the reason that a sale in that manner will generally realize the best price, and
will not result in taking from the debtor any more property than is necessary to satisfy the
judgment. It will also enable the defendant to redeem any one or more of the parcels
without being compelled to redeem all the land sold.[47] A sale of additional land or
personal property after enough has been sold to satisfy the judgment is unauthorized. [48]

From this premise, we can logically assume that the sale of just one of the lots
would have been sufficient to satisfy the judgment debt. Yet no explanation was provided
as to why the sheriff sold both parcels of land at the execution sale for the paltry sum
of P640,354.14. This act undoubtedly resulted in great prejudice to the Bulaongs. To our
minds, this renders the execution sale defective, and provides sufficient ground for us to
set the sale aside.
For the foregoing reasons, we rule and so hold that the levy and the
corresponding execution sale in Veronicas favor are invalid, and must be set
aside. Veronica, however, is not without recourse, as she may still seek to enforce the
judgment debt against Regina.

WHEREFORE, premises considered, we GRANT the petition and REVERSE the

decision of the Court of Appeals dated July 31, 2002 in CA-G.R. SP No. 55423.
We REINSTATE the decision of the Regional Trial Court, Branch 12, Malolos, Bulacan,
dated July 30, 1999 in Civil Case No. 170-M-95, with theMODIFICATION that petitioners
Anselmo Bulaong and Priscilla Bulaong are no longer required to reimburse Veronica
Gonzales for her lien in the amount ofP275,000.00, plus interest.
SO ORDERED.
_______________________________________________________________________
FIRST DIVISION
EMERITA MUOZ,
Petitioner,
- versus ATTY. VICTORIANO R. YABUT, JR. and SAMUEL GO CHAN,
Respondents.
x------------------------x
EMERITA MUOZ,
Petitioner,
- versus SPOUSES SAMUEL GO CHAN and AIDA C. CHAN, and THE BANK
OF THE PHILIPPINE ISLANDS,
Respondents.

While the general policy of the law is to sustain execution sales, the sale may be
set aside where there is a resulting injury based on fraud, mistake and
irregularity.[49] Where the properties were sold together when the sale of less than the
whole would have been sufficient to satisfy the judgment debt, the sale may be set
aside.[50]

G.R. No. 142676

G.R. No. 146718
Present:
CORONA, C.J.,
Chairperson,
VELASCO, JR.,
LEONARDO-DE
CASTRO,
DEL CASTILLO, and
PEREZ, JJ.
Promulgated:
June 6, 2011

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
In Caja v. Nanquil, [51] we took judicial notice of the fact that the value of a
property was usually bigger than the amount for which it could be mortgaged.Since the
two properties, taken together, were mortgaged to the petitioners to secure a loan
worth P4,300,000.00, we can easily assume that these properties are worth at least this
amount. Even Veronica does not contest this assumption.

DECISION

LEONARDO-DE CASTRO, J.:

70

Before Us are the following consolidated petitions for review on certiorari under
Rule 45 of the Rules of Court.
In G.R. No. 142676, Emerita Muoz (Muoz) is seeking the reversal, annulment, and
setting aside of the Decision[1] dated July 21, 1995 and Resolution[2] dated March 9, 2000
of the Court of Appeals in CA-G.R. SP No. 35322, which affirmed the Orders[3] dated June
10, 1994 and August 5, 1994 of the Regional Trial Court, Branch 88 (RTC-Branch 88) of
Quezon City in Civil Case No. Q-94-20632. The RTC dismissed Civil Case No. 8286, the
forcible entry case instituted by Muoz against Atty. Victoriano R. Yabut, Jr. (Atty. Yabut)
and Samuel Go Chan before the Metropolitan Trial Court (MeTC), Branch 33 of Quezon
City; and nullified the MeTC Order[4] dated May 16, 1994, granting Muozs prayer for the
issuance of a writ of preliminary mandatory injunction which restored possession of the
subject property to Muoz.
In G.R. No. 146718, Muoz is praying for the reversal, setting aside, and
nullification of the Decision[5] dated September 29, 2000 and Resolution[6] dated January 5,
2001 of the Court of Appeals in CA-G.R. SP No. 40019, which affirmed the Orders[7] dated
August 21, 1995 and October 3, 1995 of the Quezon City RTC, Branch 95 (RTC-Branch 95)
in Civil Case No. Q-28580 denying Muozs Motion for an Alias Writ of Execution and
Application for Surrender of the Owners Duplicate Copy of TCT No. 53297[8] against
respondents Bank of the Philippine Islands (BPI) and the spouses Samuel Go Chan and Aida
C. Chan (spouses Chan).

the annotation of a notice of lis pendens on TCT No. 258977 of the spouses Go. In an Order
dated December 17, 1979, the RTC-Branch 95 granted the spouses Gos motion for the
issuance of a writ of preliminary mandatory injunction and ordered the sheriff to put the
spouses Go in possession of the subject property. The writ was implemented by the sheriff
on March 26, 1980, driving Muoz and her housemates away from the subject property.
Muoz filed a petition for certiorari and prohibition before the Court of Appeals,
assailing the issuance of the writ of preliminary mandatory injunction, which was docketed
as CA-G.R. SP No. 10148. The appellate court dismissed Muozs petition on January 4,
1980. Yee L. Ching and his son Frederick M. Ching filed an urgent motion for leave to
intervene in CA-G.R. SP No. 10148 and for the issuance of a temporary restraining order
(TRO). The Court of Appeals issued a TRO. However, in a Resolution dated March 18, 1980,
the appellate court denied the motion to intervene of Yee L. Ching and Frederick M. Ching,
and cancelled the TRO previously issued. Yee L. Ching and Frederick M. Ching challenged
before this Court, in G.R. No. 53463, the Resolution dated March 18, 1980 of the Court of
Appeals.Eventually, in a Resolution dated June 3, 1981, the Court dismissed the petition in
G.R. No. 53463, for lack of merit and failure of Yee L. Ching and Frederick M. Ching to
substantially show that the RTC-Branch 95 and the Court of Appeals gravely abused their
discretion. In a subsequent Resolution dated June 21, 1982, the Court clarified that its
Resolution of June 3, 1981 was without prejudice to the continuation of the litigation in
Civil Case No. Q-28580 still pending before the trial court, in order that proper and final
adjudication may be made of whether or not the deed of sale by Emerita L. Muoz in favor
of Emilia M. Ching is a real, genuine and authentic transaction, thereby to settle once and
for all the issue of ownership of the property herein in question.[11]
Trial in Civil Case No. Q-28580 proceeded before RTC-Branch 95.

I
FACTS
The subject property is a house and lot at No. 48 Scout Madrian St.,
Diliman, Quezon City, formerly owned by Yee L. Ching. Yee L. Ching is married to Emilia M.
Ching (spouses Ching), Muozs sister. Muoz lived at the subject property with the spouses
Ching. As consideration for the valuable services rendered by Muoz to the spouses Chings
family, Yee L. Ching agreed to have the subject property transferred to Muoz. By virtue of
a Deed of Absolute Sale, seemingly executed by Yee L. Ching in favor of Muoz, [9] the latter
acquired a Transfer Certificate of Title (TCT) No. 186306 covering the subject property in
her name on December 22, 1972.[10]However, in a Deed of Absolute Sale dated December
28, 1972, Muoz purportedly sold the subject property to her sister, Emilia M. Ching. As a
result, TCT No. 186306 was cancelled and TCT No. 186366 was issued in Emilia M. Chings
name. Emilia M. Ching, in a Deed of Absolute Sale dated July 16, 1979, sold the subject
property to spouses Go Song and Tan Sio Kien (spouses Go), hence, TCT No. 186366 was
cancelled and replaced by TCT No. 258977 in the spouses Gos names.
On October 15, 1979, Muoz registered her adverse claim to the subject property
on TCT No. 258977 of the spouses Go. The next day, on October 16, 1979, Muoz filed a
complaint for the annulment of the deeds of absolute sale dated December 28, 1972 and
July 16, 1979, the cancellation of TCT No. 258977 in the spouses Gos names, and the
restoration and revival of TCT No. 186306 in Muozs name. The complaint was docketed as
Civil Case No. Q-28580 and raffled to RTC-Branch 95. On October 17, 1979, Muoz caused

In the meantime, Muozs adverse claim and notice of lis pendens on TCT No.
258977 was cancelled on October 28, 1982 on the basis of an alleged final judgment in
favor of the spouses Go.[12] The spouses Go obtained a loan of P500,000.00 from BPI
Family Savings Bank (BPI Family) and to secure the same, they constituted a mortgage on
the subject property on November 23, 1982.[13] When the spouses Go defaulted on the
payment of their loan, BPI Family foreclosed the mortgage. BPI Family was the highest
bidder at the auction sale of the subject property. The spouses Go failed to exercise their
right of redemption within the prescribed period, thus, BPI Family was finally able to
register the subject property in its name on October 23, 1987 under TCT No.
370364.[14] Apparently, the original copy of TCT No. 370364 was among those razed in the
fire at the Quezon City Register of Deeds on June 11, 1988. As a result of the
administrative reconstitution of the lost title, TCT No. RT-54376 (370364) was issued to BPI
Family. On December 3, 1990, BPI Family executed in favor of the spouses Samuel Go Chan
and Aida C. Chan (spouses Chan) a Deed of Absolute Sale[15] covering the subject property
for and in consideration of P3,350,000.00. Consequently, TCT No. RT-54376 (370364) in
the name of BPI Family was cancelled and TCT No. 53297 was issued in the spouses Chans
names on January 28, 1991.[16] The spouses Chan obtained a loan from BPI Family on
October 2, 1992 for the construction of a building on the subject property, and to secure
the same, constituted a mortgage on the subject property in favor of BPI Family. [17]

71

On July 19, 1991, RTC-Branch 95 rendered its Decision[18] in Civil Case No. Q28580, against Emilia M. Ching, Yee L. Ching, and the spouses Go (Emilia M. Ching, et
al.). It found that Muozs signature on the Deed of Absolute Sale dated December 28, 1972
was forged; that Muoz never sold the subject property to her sister, Emilia M. Ching; and
that the spouses Go were not innocent purchasers for value of the subject
property. The fallo of the said decision reads:
WHEREFORE, judgment is hereby rendered dismissing for lack
of merit [Emilia M. Ching, et al.s] respective counterclaims, cross-claims,
and counter-cross-claim, declaring as null and void ab initio the
following documents, to wit: (a) Deed of Absolute Sale dated December
28, 1972, copy of which is marked in evidence as Exh. M; (b) TCT No.
186366 of the Registry of Deeds for Quezon City, copy of which is
marked in evidence as Exh. N; (c) Deed of Absolute Sale dated July 16,
1979, copy of which is marked in evidence as Exh. 3; and, (d) TCT No.
258977 of the Registry of Deeds for Metro Manila District III, copy of
which is marked in evidence as Exh. 4, and directing defendant Register
of Deeds of Quezon City to cancel from the records of the subject
property the registrations of all the said documents and to restore and
revive, free from all liens and encumbrances, TCT No. 186306 of the
Registry of Deeds for Quezon City, copy of which is marked in evidence
as Exh. L, as well as ordering defendants Emilia M. Ching, Go Song and
Tan Sio Kien jointly and severally to pay [Muoz] the sum ofP50,000.00
as and for attorneys fees and to pay the costs of suit. The court also
hereby dismisses the rest of the claims in [Muozs] complaint, there
being no satisfactory warrant therefor.[19]

Emilia M. Ching, et al.s, appeal of the foregoing judgment of the RTC-Branch 95

was docketed as CA-G.R. CV No. 33811 before the Court of Appeals. In its
Decision[20] dated March 4, 1993, the appellate court not only affirmed the appealed
judgment, but also ordered the spouses Go and their successors-in-interest and assigns
and those acting on their behalf to vacate the subject property, to wit:
WHEREFORE, premises considered, the decision appealed
from is AFFIRMED, with costs against [Emilia M. Ching, et al.]. The writ
of preliminary mandatory injunction issued on December 17, 1979 is
hereby set aside and declared dissolved. Defendants-appellants Go and
Tan, their successors-in-interest and assigns and those acting on their
behalf, are ordered to vacate the disputed premises and to deliver the
same to [Muoz] immediately upon receipt of this decision.[21]
Emilia L. Ching, et al., filed before this Court a motion for extension of time to file
their petition for review, which was assigned the docket number G.R. No.
109260. However, they failed to file their intended petition within the extended period
which expired on April 23, 1993. In a Resolution[22] dated July 12, 1993, the Court declared
G.R. No. 109260 terminated. The Resolution dated July 12, 1993 of the Court in G.R. No.

109260 became final and executory on July 15, 1993 and was entered in the Book of
Entries of Judgments on even date.[23]
More than two months later, on September 20, 1993, the RTC-Branch 95 issued a
writ of execution to implement the judgment in Civil Case No. Q-28580.
The spouses Chan, who bought the subject property from BPI Family, then came forward
and filed before the RTC-Branch 95 on October 22, 1993 an Urgent Motion to Stop
Execution as Against Spouses Samuel Go Chan and Aida Chan,[24] opposing the writ of
execution issued in Civil Case No. Q-28580. The spouses Chan asserted ownership and
possession of the subject property on the basis of a clean title registered in their names
under TCT No. 53297. The spouses Chan further contended that the final judgment in Civil
Case No. Q-28580 could not be executed against them since they were not parties to the
said case; they were not successors-in-interest, assigns, or acting on behalf of the spouses
Go; and they purchased the subject property from BPI Family without any notice of defect
in the latters title.
It was only at this point that Muoz, upon her own inquiry, discovered the
cancellation on October 28, 1982 of her adverse claim and notice of lis pendensannotated
on the spouses Gos TCT No. 258977, and the subsequent events that led to the transfer
and registration of the title to the subject property from the spouses Go, to BPI Family,
and finally, to the spouses Chan.
In its Order[25] dated December 28, 1993, the RTC-Branch 95 denied the spouses
Chans urgent motion to stop the execution. According to the RTC-Branch 95, the
photocopy of TCT No. 370364 in the name of BPI Family, submitted by the spouses Chan
with their motion, could hardly be regarded as satisfactory proof that Muozs adverse claim
and notice of lis pendens annotated therein were also missing from the original copy of
said certificate of title. Muozs adverse claim and notice of lis pendens were annotated on
TCT No. 258977 in the spouses Gos names as P.E.-8078 and P.E.-8178, respectively. So
when TCT No. 258977 of the spouses Go was cancelled and TCT No. 370364 was issued to
BPI Family, it could be presumed that the Register of Deeds regularly performed his official
duty by carrying over Muozs adverse claim and notice of lis pendens to TCT No. 370364. In
addition, the RTC-Branch 95 pointed out that in this jurisdiction, the entry of the notice
of lis pendens in the day book of the Register of Deeds was already sufficient notice to the
whole world of the dispute over the subject property, and there was no more need to
annotate the same on the owners duplicate of the certificate of title. Finally, the RTCBranch 95 held that TCT No. RT-54376 (370364) of BPI Family and TCT No. 53297 of the
spouses Chan shall be subject to the reservation under Section 7 of Republic Act No.
26[26] [t]hat certificates of title reconstituted extrajudicially, in the manner stated in
sections five and six hereof, shall be without prejudice to any party whose right or interest
in the property was duly noted in the original, at the time it was lost or destroyed, but
entry or notation of which has not been made on the reconstituted certificate of
title. Thus, the spouses Chan were deemed to have taken the disputed property subject to
the final outcome of Civil Case No. Q-28580.
On January 3, 1994, the RTC-Branch 95 issued an Alias Writ of Execution.[27] On
January 10, 1994, the writ was enforced, and possession of the subject property was taken

72

from the spouses Chan and returned to Muoz.[28] In its Orders dated April 8, 1994 and June
17, 1994, the RTC-Branch 95 denied the spouses Chans motion for reconsideration and
notice of appeal, respectively.[29]

against the spouses Chan and there was, indeed, a turn-over of possession of the subject
property to Muoz. Accordingly, the MeTC granted Muozs prayer for the issuance of a writ
of preliminary mandatory injunction, restoring possession of the subject property to
Muoz.

G.R. No. 142676

Pending resolution by the RTC-Branch 95 of the spouses Chans motion for

reconsideration and notice of appeal in Civil Case No. Q-28580, Muoz instituted before the
MeTC on February 4, 1994 a Complaint for Forcible Entry with Prayer for Preliminary
Mandatory Injunction[30] against Samuel Go Chan and Atty. Yabut, docketed as Civil Case
No. 8286. Muoz alleged in her complaint that she had been in actual and physical
possession of the subject property since January 10, 1994.She hired a caretaker and two
security guards for the said property. On February 2, 1994, Samuel Go Chan and Atty.
Yabut, along with 20 other men, some of whom were armed, ousted Muoz of possession
of the subject property by stealth, threat, force, and intimidation. Muoz prayed for the
issuance of a writ of preliminary mandatory injunction directing Samuel Go Chan and Atty.
Yabut and all persons claiming right under them to vacate the subject property. Muoz
additionally prayed for judgment making the mandatory injunction permanent and
directing Samuel Go Chan and Atty. Yabut to pay Muoz: (1) compensation for the unlawful
occupation of the subject property in the amount of P50,000.00 per month, beginning
February 2, 1994 until the said property is fully and completely turned over to Muoz; (2)
attorneys fees in the amount of P50,000.00, plus P1,500.00 per court appearance of
Muozs counsel; and (3) costs of suit.
Samuel Go Chan and Atty. Yabut denied Muozs allegations, insisting that Samuel
Go Chan is the valid, lawful, and true legal owner and possessor of the subject
property. Samuel Go Chan and Atty. Yabut averred that the Turn-Over of Possession and
Receipt of Possession dated January 10, 1994 attached to Muozs complaint as proof that
the subject property had been placed in her possession is a falsified document. The Writ of
Execution issued on September 20, 1993 in Civil Case No. Q-28580 had already expired and
the Sheriffs Return on the Writ another document purporting to show that possession of
the subject property was turned-over to Muoz on January 10, 1994 was then being
challenged in a complaint before the Office of Deputy Court Administrator Reynaldo L.
Suarez of the Supreme Court. Samuel Go Chans possession of the subject property has
never been interrupted. His sister, Cely Chan, resided at the subject property and was
never removed therefrom. On February 2, 1994, Atty. Yabut was at the subject property
only to protect the rights and interest of his client, Samuel Go Chan, and since the latters
possession of the subject property had never been interrupted, Atty. Yabut entered the
same peacefully, without intimidation, force, or stealth. The other people at the subject
property on February 2, 1994 were there to attend the services at
the Buddhist Temple which occupied the fourth floor of the building erected by the
spouses Chan on the subject property. Samuel Go Chan and Atty. Yabut, thus, asked the
MeTC to dismiss Muozs complaint for lack of merit and legal basis.[31]
The MeTC received evidence from the parties on whether a writ of preliminary
injunction should be issued, as prayed for by Muoz. In its Order dated May 16, 1994, the
MeTC adjudged that the final judgment in Civil Case No. Q-28580 was already executed

Samuel Go Chan and Atty. Yabut questioned the foregoing MeTC order through a
Petition for Certiorari with Prayer for Temporary Restraining Order and Writ of Preliminary
Injunction[32] before the RTC-Branch 88, which was docketed as Civil Case No. Q-9420632. They asserted that they were not bound by the execution of the final judgment of
RTC-Branch 95 in Civil Case No. Q-28580 as they were not parties to the said case. Muoz,
on the other hand, argued that the MeTC Order of May 16, 1994 was an interlocutory
order, and under Section 19 of the Rules of Summary Procedure, a petition
for certiorari against an interlocutory order issued by the court is one of the prohibited
pleadings and motions in summary proceedings.
In its Order dated June 10, 1994, the RTC-Branch 88 issued a writ of preliminary
injunction to enjoin the implementation of the MeTC Order dated May 16, 1994.
On August 5, 1994, the RTC-Branch 88 issued another Order resolving Muozs
motion to dismiss the petition for certiorari in Civil Case No. Q-94-20632, motion for
reconsideration of the Order dated June 10, 1994 of RTC-Branch 88 granting the issuance
of a writ of preliminary injunction, and motion to resolve with additional grounds for
dismissal. According to the RTC-Branch 88, the MeTC failed to distinguish the issue of
finality of the judgment of the RTC-Branch 95 in Civil Case No. Q-28580 from the assertions
of Samuel Go Chan and Atty. Yabut that the spouses Chan are not covered by said final
judgment because they are not successors-in-interest, assigns, or privies of the spouses Go
and they are purchasers of the subject property in good faith. The issue of whether the
final judgment in Civil Case No. Q-28580 extended to the spouses Chan was then still being
litigated in the same case before RTC-Branch 95, where the spouses Chans motion for
reconsideration of the denial of their notice of appeal was pending. The RTC-Branch 88
further found that the MeTC committed grave abuse of discretion in not dismissing Muozs
complaint for forcible entry on the ground of lis pendens, as the issue as to who between
Muoz and the spouses Chan had the better right to possession of the subject property was
the subject of the pending proceeding in Civil Case No. Q-28580 before the RTC-Branch
95. In the end, the RTC-Branch 88 decreed:
WHEREFORE, premises considered, the Court renders
judgment
(a) Denying the motion to dismiss of respondent Muoz for lack
of merit;
(b) Denying the motion for reconsideration of respondent
Muoz for the recall and/or setting aside of the writ of preliminary
injunction granted to petitioners;
(c) Declaring the Order dated May 16, 1994 of Public
respondent Hon. Elsa de Guzman in Civil Case No. 8286 illegal and
therefore null and void; and

73

(d) Dismissing the ejectment suit in Civil Case No. 8286 on

ground of lis pendens.
Without pronouncement as to costs.[33]

Muoz appealed the Orders dated June 10, 1994 and August 5, 1994 of RTCBranch 88 before the Court of Appeals. Her appeal was docketed as CA-G.R. SP No.
35322. Aside from the nullification of the two orders, Muoz additionally prayed for the
dismissal from the service of the RTC-Branch 88 presiding judge and the disbarment of
Atty. Yabut.
The Court of Appeals, in its Decision dated July 21, 1995, sustained the appealed
orders of RTC-Branch 88. The Court of Appeals held that the MeTC should have dismissed
the forcible entry case on the ground of lis pendens; that the spouses Chan were not
parties in Civil Case No. Q-28580, and impleading them only in the execution stage of said
case vitiated their right to due process; that the order of the RTC-Branch 95 involving the
spouses Chan in Civil Case No. Q-28580 was null and void, considering that they are
strangers to the case, and they are innocent purchasers for value of the subject property;
that the notice of lis pendens was already cancelled from the spouses Gos certificate of
title at the time they mortgaged the subject property to BPI Family; and that the title to
the subject property was already free of any and all liens and encumbrances when the
spouses Chan purchased the said property from BPI Family. The Court of Appeals, in its
Resolution dated March 9, 2000, denied Muozs motion for reconsideration.

and revive, free from all liens and encumbrances Muozs TCT No. 186306, but likewise to
cancel the present certificate of title covering the subject property, TCT No. 53297.
In its Order dated August 21, 1995, the RTC-Branch 95 denied all of Muozs
aforementioned motions. The RTC-Branch 95 was of the view that Samuel Go Chans title
should be litigated in another forum, not in Civil Case No. Q-28580 where the judgment
had already become final and executory. The RTC-Branch 95 also stressed that since the
judgment in Civil Case No. Q-28580 had long become final and executory, it could no
longer be changed or amended except for clerical error or mistake. Accordingly, the RTCBranch 95 resolved as follows:
1. Ordering, as it hereby orders, the denial of [Muozs] first and
second motions for contempt and hereby absolves respondents Samuel
Go Chan, Celia Chan, Atty. Victoriano R. Yabut, Jr., and several John
Does of the Contempt Charges against them.
2. Ordering, as it hereby orders, the issuance of an alias writ of
execution directing the Courts Deputy Sheriff:
(a)

Defendants Go Song and Tan Sio Kien, their

successors-in-interest and assigns and those acting
on their behalf to vacate the disputed premises and
deliver the same to [Muoz];

(b)

Defendant Register of Deeds of Quezon City to

cancel from the records of the subject property the
registration of all the following documents, to wit: (1)
Deed of Absolute Sale dated December 28, 1972; (2)
Transfer Certificate of Title (TCT) No. 186366 of the
Register of Deeds of Quezon City; (3) Deed of
Absolute Sale dated July 16, 1979; and (4) TCT No.
258977 of the Registry of Deeds for Metro Manila II,
and to restore and revive, free from all liens and
encumbrances TCT No. 186306 of the Registry of
Deeds for Quezon City; and

(c)

Defendants Emilia M. Ching, Go Song and Tan Sio

Kien jointly and severally to pay [Muoz] the sum
of P50,000.00 as and for attorneys fees and to pay
the cost of suit.[37]

G.R. No. 146718

Meanwhile, Muoz filed before the RTC-Branch 95 in Civil Case No. Q-28580 a Motion to
Cite the Register of Deeds in Contempt of Court for the failure of the Register of Deeds to
restore Muozs TCT No. 186306 despite having been served with a copy of the writ of
execution on October 11, 1993. In its Judgment (on the Contempt Proceedings against the
Register of Deeds of Quezon City Samuel C. Cleofe) [34] dated March 18, 1994, the RTCBranch 95 denied Muozs motion, convinced that the Register of Deeds had a valid excuse
for his inability to implement the served writ. The Register of Deeds could not cancel the
spouses Chans TCT No. 53297, the subsisting certificate of title over the subject property,
absent any authority or directive for him to do so. The directive in the final judgment in
Civil Case No. Q-28580 and the writ of execution for the same only pertained to the
cancellation of the spouses Gos TCT No. 258977.
Thereafter, Muoz filed a Motion for Contempt against the spouses Chan and a
Second Motion for Contempt against Samuel Go Chan and Atty. Yabut. Muoz also filed a
Motion for an Alias Writ of Execution and Application for Surrender of the Owners
Duplicate Copy of TCT No. 53297,[35] in which she prayed for the issuance of an alias writ of
execution directing the Register of Deeds not only to cancel TCT No. 258977 and all
documents declared null and void ab initio in the dispositive portion of the
Decision[36] dated July 19, 1991 of RTC-Branch 95 in Civil Case No. Q-28580, and to restore

Unrelenting, Muoz filed a Motion for Clarificatory Order, pointing out that the
spouses Chan are the present occupants of the subject property. The Order dated August
21, 1995 of the RTC-Branch 95 directed the deputy sheriff to deliver the subject property
to Muoz, and this could not be done unless the spouses Chan are evicted
therefrom. Resultantly, Muoz prayed that a clarificatory order be made categorically

74

stating that the spouses Samuel Go Chan and Aida C. Chan, and all persons claiming right
under them, are likewise evicted from the subject premises pursuant to the Order of 21
August 1995.[38]
Once more, the RTC-Branch 95 denied Muozs motion in its Order dated October
3, 1995. The RTC-Branch 95 reiterated the rule that after the judgment had become final,
only clerical errors, as distinguished from substantial errors, can be amended by the
court. Furthermore, when the decision or judgment sought to be amended is promulgated
by an appellate court, it is beyond the power of the trial court to change, amplify, enlarge,
alter, or modify. Ultimately, the RTC-Branch 95 pronounced that it was restrained x x x to
consider as mere clerical error the exclusion of spouses Samuel Go Chan and Aida C. Chan
in the Decision of the Court dated July 19, 1991, a final judgment, which judgment cannot
now be made to speak a different language.[39]
Attributing grave abuse of discretion on the part of the RTC-Branch 95 in issuing
its Orders dated August 21, 1995 and October 3, 1995, Muoz filed before this Court a
Petition for Certiorari and Mandamus, which was remanded to the Court of Appeals in
observance of the hierarchy of courts, where it was docketed as CA-G.R. SP No. 40019. The
Court of Appeals promulgated its Decision on September 29, 2000 dismissing Muozs
petition. The Court of Appeals agreed with the RTC-Branch 95 that the spouses Chan could
not be covered by the alias writ of execution considering that they were not impleaded in
Civil Case No. Q-28580. The cancellation of TCT No. 53297 in the spouses Chans names
could not be done apart from a separate action exclusively for that matter. The spouses
Chan are deemed buyers in good faith and for value as the certificate of title delivered to
them by BPI Family was free from any liens or encumbrances or any mark that would have
raised the spouses Chans suspicions. Every person dealing with registered lands may safely
rely on the correctness of the certificate of title of the vendor/transferor, and he is not
required to go beyond the certificate and inquire into the circumstances culminating in the
vendors acquisition of the property. The Court of Appeals denied Muozs motion for
reconsideration in a Resolution dated January 5, 2001.
Muoz comes before this Court via the present consolidated petitions.
Muoz posits that the final judgment and writ of execution of RTC-Branch 95 in
Civil Case No. Q-28580 bind not only Emilia M. Ching and the spouses Go, but also their
successors-in-interest, assigns, or persons acting on their behalf, namely, BPI Family and
spouses Chan. The spouses Chan cannot be deemed innocent purchasers for value of the
property since the cancellation of the adverse claim and notice of lis pendens on the
spouses Gos TCT No. 258977 is completely null and void.
Muoz further argues that the MeTC Order dated May 16, 1994 in Civil Case No.
8286 correctly ordered the issuance of a writ of preliminary mandatory injunction
restoring possession of the subject property to her, as she had already acquired prior
possession of the said property upon the execution of the final judgment in Civil Case No.
Q-28580. Also, the spouses Chans petition for certiorari before the RTC-Branch 88,
docketed as Civil Case No. Q-94-20632, challenging the Order dated May 16, 1994 of the
MeTC in Civil Case No. 8286, is a prohibited pleading under the Rules of Summary
Procedure; and the RTC-Branch 88 and the Court of Appeals should be faulted for giving
due course to the said petition even in the absence of jurisdiction.

On the other hand, in their comments to the two petitions at bar, the spouses
Chan, Atty. Yabut, and BPI Family assert that given the peculiar factual circumstances of
the case, RTC-Branch 88 was justified in taking cognizance of Samuel Go Chan and Atty.
Yabuts petition for certiorari in Civil Case No. Q-94-20632; that Muoz is estopped from
questioning the jurisdiction of RTC-Branch 88 after participating in the proceedings in Civil
Case No. Q-94-20632; that the spouses Chans title to the subject property is not affected
by the final judgment of RTC-Branch 95 in Civil Case No. Q-28580, and the said judgment
cannot be executed against the spouses Chan since they are neither parties to the case,
nor are they the successors-in-interest, assigns, or persons acting on behalf of Emilia M.
Ching or the spouses Go; that BPI Family and consequently, the spouses Chan, obtained
title to the subject property as innocent purchasers for value, there being no notice of any
infirmity in said title; and that Muoz is guilty of forum shopping for filing her petition in
G.R. No. 146718 even while her petition in G.R. No. 142676 is still pending.
II
RULING

For the sake of expediency, we will be discussing first the merits of the petition in G.R. No.
146718.
G.R. No. 146718
Civil Case No. Q-28580 involved Muozs complaint for the annulment of the deeds
of absolute sale dated December 28, 1972[40] and July 16, 1979,[41] the cancellation of the
spouses Gos TCT No. 258977, and the restoration and revival of Muozs TCT No.
186306. The final judgment of RTC-Branch 95 in Civil Case No. Q-28580 was in favor of
Muoz and against Emilia M. Ching and the spouses Go. The problem arose when during
the pendency of the said case, title and possession of the subject property were
transferred from the spouses Go, to BPI Family, and finally, to the spouses Chan. BPI
Family and the spouses Chan were never impleaded as parties and were not referred to in
the dispositive portion of the final judgment in Civil Case No. Q-28580.
Muoz questions in G.R. No. 146718: (1) the Order dated August 21, 1995 denying her
Motion for Contempt against the spouses Chan, Second Motion for Contempt against
Samuel Go Chan and Atty. Yabut, and Motion for an Alias Writ of Execution and
Application for Surrender of the Owners Duplicate Copy of TCT No. 53297; and (2) the
Order dated October 3, 1995 denying her Motion for Clarificatory Order, both issued by
the RTC-Branch 95 in Civil Case No. Q-28580, and upheld by the Court of Appeals in CAG.R. SP No. 40019. In sum, Muoz was seeking in her aforementioned motions: (1) a
categorical order from the RTC-Branch 95 that the final judgment in Civil Case No. Q-28580
be executed against the spouses Chan; and (2) the surrender and cancellation of the
spouses Chans TCT No. 53297 and restoration of Muozs TCT No. 186306.
There is no merit in Muozs petition in G.R. No. 146718.

75

Civil Case No. Q-28580 is an action for reconveyance of real property. In Heirs of
Eugenio Lopez, Sr. v. Enriquez,[42] we described an action for reconveyance as follows:
An action for reconveyance is an action in personam available
to a person whose property has been wrongfully registered under
the Torrens system in anothers name. Although the decree is
recognized as incontrovertible and no longer open to review, the
registered owner is not necessarily held free from liens. As a remedy,
an action for reconveyance is filed as an ordinary action in the ordinary
courts of justice and not with the land registration
court. Reconveyance is always available as long as the property has
not passed to an innocent third person for value. A notice of lis
pendens may thus be annotated on the certificate of title immediately
upon the institution of the action in court. The notice of lis pendens will
avoid transfer to an innocent third person for value and preserve the
claim of the real owner.[43] (Emphases ours.)

The rule is that: (1) a judgment in rem is binding upon the whole world, such as a
judgment in a land registration case or probate of a will; and (2) a judgment in personam is
binding upon the parties and their successors-in-interest but not upon strangers. A
judgment directing a party to deliver possession of a property to another is in personam; it
is binding only against the parties and their successors-in-interest by title subsequent to
the commencement of the action. An action for declaration of nullity of title and recovery
of ownership of real property, or re-conveyance, is a real action but it is an action in
personam, for it binds a particular individual only although it concerns the right to a
tangible thing. Any judgment therein is binding only upon the parties properly
impleaded.[44]
Since they were not impleaded as parties and given the opportunity to
participate in Civil Case No. Q-28580, the final judgment in said case cannot bind BPI
Family and the spouses Chan. The effect of the said judgment cannot be extended to BPI
Family and the spouses Chan by simply issuing an alias writ of execution against them. No
man shall be affected by any proceeding to which he is a stranger, and strangers to a case
are not bound by any judgment rendered by the court. In the same manner, a writ of
execution can be issued only against a party and not against one who did not have his day
in court. Only real parties in interest in an action are bound by the judgment therein and
by writs of execution issued pursuant thereto.[45]

petitioners were never actually joined as defendants in said

case. Impleading petitioners as additional defendants only in the
execution stage of said case violated petitioners right to due process as
no notice of lis pendens was annotated on the existing certificate of title
of said property nor were petitioners given notice of the pending case,
therefore petitioners remain strangers in said case and the Order of the
trial court involving them is null and void, considering that petitioners
are innocent purchasers of the subject property for value.[47]

We further stress that Section 48 of Presidential Decree No. 1529, otherwise

known as the Property Registration Decree, clearly provides that [a] certificate of title shall
not be subject to collateral attack. It cannot be altered, modified or cancelled except in a
direct proceeding in accordance with law. Herein, several Torrens titles were already
issued after the cancellation of Muozs. Certificates of title had been successively issued to
Emilia M. Ching, spouses Go, BPI Family, and spouses Chan. Civil Case No. Q-28580, in
which a final judgment had already been rendered, specifically challenged the validity of
the certificates of title of Emilia M. Ching and the spouses Go only. To have the present
certificate of title of the spouses Chan cancelled, Muoz must institute another case directly
attacking the validity of the same.
The fact that the titles to the subject property of Emilia M. Ching and the spouses
Go were already declared null and void ab initio by final judgment in Civil Case No. Q28580 is not enough, for it does not automatically make the subsequent titles of BPI
Family and the spouses Chan correspondingly null and void ab initio.
It has long been ingrained in our jurisprudence that a void title may become the
root of a valid title if the derivative title was obtained in good faith and for value.Following
the principle of indefeasibility of a Torrens title, every person dealing with registered lands
may safely rely on the correctness of the certificate of title of the vendor/transferor, and
he is not required to go beyond the certificate and inquire into the circumstances
culminating in the vendors acquisition of the property. The rights of innocent third persons
who relied on the correctness of the certificate of title and acquired rights over the
property covered thereby cannot be disregarded and the courts cannot order the
cancellation of such certificate for that would impair or erode public confidence in
the Torrens system of land registration.[48]

A similar situation existed in Dino v. Court of Appeals,[46] where we resolved that:

Hence, we pronounced in Republic v. Agunoy, Sr.[49]:

As the registered owner of the subject property, petitioners

are not bound by decision in Civil Case No. R-18073 for they were never
summoned in said case and the notice of lis pendens annotated on TCT
No. 73069 was already cancelled at the time petitioners purchased the
subject property. While it is true that petitioners are indispensable
parties in Civil Case No. R-18073, without whom no complete relief
could be accorded to the private respondents, the fact still remains that

Here, it bears stressing that, by petitioner's own judicial

admission, the lots in dispute are no longer part of the public domain,
and there are numerous third, fourth, fifth and more parties
holding Torrens titles in their favor and enjoying the presumption of
good faith. This brings to mind what we have reechoed in Pino v. Court
of Appeals and the cases therein cited:

76

[E]ven on the supposition that the sale was void, the

general rule that the direct result of a previous illegal
contract cannot be valid (on the theory that the
spring cannot rise higher than its source) cannot
apply here for We are confronted with the
functionings of the Torrens System of Registration.
The doctrine to follow is simple enough: a fraudulent
or forged document of sale may become the ROOT
of a valid title if the certificate of title has already
been transferred from the name of the true owner
to the name of the forger or the name indicated by
the forger.[50] (Emphases ours.)

Although the RTC-Branch 95 had declared with finality in Civil Case No. Q-28580
that the titles of Emilia M. Ching and the spouses Go were null and void, there is yet no
similar determination on the titles of BPI Family and the spouses Chan. The question of
whether or not the titles to the subject property of BPI Family and the spouses Chan are
null and void, since they are merely the successors-in-interest, assigns, or privies of Emilia
M. Ching and the spouses Go, ultimately depends on the issue of whether or not BPI
Family and the spouses Chan obtained their titles to the subject property in bad faith, i.e.,
with notice of Muozs adverse claim and knowledge of the pendency of Civil Case No. Q28580. The latter is a factual issue on which we cannot rule in the present petition, not
only because we are not a trier of facts, but more importantly, because it was not among
the issues raised and tried in Civil Case No. Q-28580.
In support of her prayer for an alias writ of execution against BPI Family and the
spouses Go, Muoz cites our ruling in Calalang v. Register of Deeds of Quezon City,[51] in
relation to De la Cruz v. De la Cruz.[52]
De la Cruz is an action for reconveyance of Lot 671 founded on breach of trust
filed by Augustina de la Cruz, et al., against Lucia dela Cruz (Lucia) and Iglesia Ni Kristo
(INK). We upheld the validity of the sale of Lot 671 by Lucia to INK, and thereby validated
the title of INK to the said property.
Calalang actually involved two petitions: (1) a special civil action
for certiorari and prohibition originally filed by Virginia Calalang (Calalang) before this
Court, and (2) a petition for injunction with damages originally filed by Augusto M. de Leon
(De Leon), et al., before the RTC and docketed as Civil Case No. Q-45767.Calalang and De
Leon, et al., assert titles that were adverse to that of INK. De Leon, et al., in particular,
claim that their titles to Lot 671 were derived from Amando Clemente. Calalang and De
Leon, et al., sought from the court orders enjoining INK from building a fence to enclose
Lot 671; requiring the Administrator of the National Land Titles and Deeds Registration
Administration (NLTDRA) to conduct an investigation of the anomaly regarding Lucias
reconstituted title to Lot 671; and dismissing the proceedings instituted by the Register of
Deeds for the cancellation of their titles. We dismissed the petitions of Calalang and
De Leon, et al., on the ground of res judicata, the legality or validity of the title of INK
over Lot 671 had been settled with finality in De la Cruz. De la Cruz was applied to Calalang

and De Leon, et al., since the facts on which such decision was predicated continued to be
the facts on which the petitions of Calalang and De Leon, et al., were based.
Muozs reliance on Calalang is misplaced. There are substantial differences in the
facts and issues involved in Calalang and the present case.
In Calalang, there is duplication or overlapping of certificates of title issued to
different persons over the same property. We already upheld in De la Cruz the validity of
the certificate of title of INK over Lot 671, which effectively prevents us from recognizing
the validity of any other certificate of title over the same property.In addition, Lucia, the
predecessor-in-interest of INK, had her certificate of title judicially reconstituted. The
judicial reconstitution of title is a proceeding in rem, constituting constructive notice to the
whole world. Hence, we rejected the petitions of Calalang and De Leon, et al., to enjoin
INK from building a fence enclosing Lot 671, and the concerned public authorities from
instituting appropriate proceedings to have all other certificates of title over Lot 671
annulled and cancelled.
In the instant case, there has been no duplication or overlapping of certificates of
title. The subject property has always been covered by only one certificate of title at a
time, and at present, such certificate is in the spouses Chans names. As we have previously
discussed herein, Muoz cannot have the spouses Chans TCT No. 53297 cancelled by a
mere motion for the issuance of an alias writ of execution in Civil Case No. Q-28580, when
the spouses Chan were not parties to the case. Civil Case No. Q-28580 was a proceeding in
personam, and the final judgment rendered therein declaring null and void the titles to the
subject property of Emilia M. Ching and the spouses Go should bind only the parties
thereto. Furthermore, despite the void titles of Emilia M. Ching and the spouses Go, the
derivative titles of BPI Family and the spouses Chan may still be valid provided that they
had acquired the same in good faith and for value.
More in point with the instant petition is Pineda v. Santiago.[53] Pineda still
involved Lot 671. INK sought from the RTC a second alias writ of execution to implement
the judgment in Calalang against Conrado Pineda (Pineda), et. al. In opposing the issuance
of such writ, Pineda, et al., asserted that they held titles to Lot671 adverse to those of
Lucia and INK and that they were not parties in De la Cruz or in Calalang. In its assailed
order, the RTC granted the second alias writ of execution on the basis that the issue of
ownership of Lot 671 was already determined with finality in favor of Lucia and INK. The
writ ordered the deputy sheriff to eject Pineda, et al., from Lot 671. When the matter was
brought before us, we annulled the assailed order as the writ of execution issued was
against Pineda, et al., who were not parties to Civil Case No. Q-45767, the ejectment suit
instituted by De Leon, et al. We elaborated in Pineda that:
Being a suit for injunction, Civil Case No. Q-45767 partakes of
an action in personam. In Domagas v. Jensen, we have explained the
nature of an action in personam and enumerated some actions and
proceedings which are in personam, viz:
The settled rule is that the aim and object
of an action determine its character. Whether a

77

proceeding is in rem, or in personam, or quasi in

rem for that matter, is determined by its nature and
purpose, and by these only. A proceeding in
personam is a proceeding to enforce personal rights
and obligations brought against the person and is
based on the jurisdiction of the person, although it
may involve his right to, or the exercise of ownership
of, specific property, or seek to compel him to
control or dispose of it in accordance with the
mandate of the court. The purpose of a
proceeding in personam is to impose, through the
judgment of a court, some responsibility or liability
directly upon the person of the defendant. Of this
character are suits to compel a defendant to
specifically perform some act or actions to fasten a
pecuniary liability on him.An action in personam is
said to be one which has for its object a judgment
against the person, as distinguished from a
judgment against the propriety to determine its
state. It has been held that an action in personam is
a proceeding to enforce personal rights or
obligations; such action is brought against the
person. As far as suits for injunctive relief are
concerned, it is well-settled that it is an injunctive
act in personam. In Combs v. Combs, the appellate
court held that proceedings to enforce personal
rights and obligations and in which personal
judgments are rendered adjusting the rights and
obligations between the affected parties is in
personam. Actions for recovery of real property
are in personam.
The respondent judge's jurisdiction is, therefore, limited to the
parties in the injunction suit. To stress, the petition for injunction,
docketed as Civil Case No. Q-45767, was filed only by therein petitioners
Augusto M. de Leon, Jose de Castro, Jose A. Panlilio, Felicidad Vergara
Vda. De Pineda, Fernando L. Vitug I, Fernando M. Vitug II, Fernando M.
Vitug III, and Faustino Tobia, and later amended to include Elena Ostrea
and Feliza C. Cristobal-Generoso as additional petitioners therein,
against Bishop Erao Manalo, in his capacity as titular and spiritual head
of I.N.K. Herein petitioners Conrado Pineda, et al. never became parties
thereto. Any and all orders and writs of execution, which the
respondent judge may issue in that case can, therefore, be enforced
only against those parties and not against the herein
petitioners Conrado Pineda, et al. In issuing the assailed Order dated 22
April 1998, which directed the issuance of the 2nd Alias Writ of
Execution to eject non-parties (herein petitioners), the respondent

judge clearly went out of bounds and committed grave abuse of

discretion.
The nature of the injunction suit Civil Case No. Q-45767 as an
action in personam in the RTC remains to be the same whether it is
elevated to the CA or to this Court for review. An action in
personam does not become an action in rem just because a
pronouncement confirming I.N.K.'s title to Lot 671 was made by this
Court in the Calalang decision. Final rulings may be made by this Court,
as the Highest Court of the Land, in actions in personam but such
rulings are binding only as against the parties therein and not against
the whole world. Here lies another grave abuse of discretion on the
part of the respondent judge when he relied on the Calalang decision in
his assailed Order dated 07 May 1998 as if it were binding against the
whole world, saying:
After evaluating the arguments of both
parties, decisive on the incident is the decision of the
Supreme Court in favor of the respondent I.N.K.,
represented by its titular and spiritual head Bishop
Erao G. Manalo, sustaining its ownership over the
subject Lot 671. This Court could do no less but to
follow and give substantial meaning to its ownership
which shall include all dominical rights by way of a
Writ of Execution. To delay the issuance of such writ
is a denial of justice due the I.N.K.
As a final word, this decision shall not be misinterpreted as
disturbing or modifying our ruling in Calalang. The final ruling on
I.N.K.'s ownership and title is not at all affected. Private respondent
I.N.K., as the true and lawful owner of Lot 671 as ruled by the Court
in Calalang, simply has to file the proper action against the herein
petitioners to enforce its property rights within the bounds of the law
and our rules. I.N.K.'s recourse of asking for the issuance of an alias writ
of execution against the petitioners inCivil Case No. Q-45767 and the
respondent judge's orders in said case, granting I.N.K.'s prayer and
enforcing the alias writ of execution against the present petitioners,
constitutes blatant disregard of very fundamental rules and must
therefore be stricken down.[54] (Emphases ours.)

Consistent with Pineda, and as appositely recommended by the RTC-Branch 95

and the Court of Appeals in the present case, Muozs legal remedy is to directly assail in a
separate action the validity of the certificates of title of BPI Family and the spouses Chan.
G.R. No. 142676

78

G.R. No. 142676 is Muozs appeal of the dismissal of Civil Case No. 8286, the
forcible entry case she instituted against Samuel Go Chan and Atty. Yabut before the
MeTC.
There is forcible entry or desahucio when one is deprived of physical possession
of land or building by means of force, intimidation, threat, strategy or stealth. In such
cases, the possession is illegal from the beginning and the basic inquiry centers on who
has the prior possession de facto. In filing forcible entry cases, the law tells us that two
allegations are mandatory for the municipal court to acquire jurisdiction: first, the plaintiff
must allege prior physical possession of the property, and second, he must also allege that
he was deprived of his possession by any of the means provided for in Section 1, Rule 70 of
the Rules of Court, i.e., by force, intimidation, threat, strategy, or stealth. It is also settled
that in the resolution thereof, what is important is determining who is entitled to the
physical possession of the property. Indeed, any of the parties who can prove prior
possession de facto may recover such possession even from the owner himself since
such cases proceed independently of any claim of ownership and the plaintiff needs
merely to prove prior possession de facto and undue deprivation thereof.[55]
Title is never in issue in a forcible entry case, the court should base its decision on
who had prior physical possession. The main thing to be proven in an action for forcible
entry is prior possession and that same was lost through force, intimidation, threat,
strategy, and stealth, so that it behooves the court to restore possession regardless of title
or ownership.[56]

Thus, a party who can prove prior possession can recover

such possession even against the owner himself. Whatever may be
the character of his possession, if he has in his favor prior possession
in time, he has the security that entitles him to remain on the
property until a person with a better right lawfully ejects him. To
repeat, the only issue that the court has to settle in an ejectment suit is
the right to physical possession.[58] (Emphases ours.)

Based on the foregoing, we find that the RTC-Branch 88 erred in ordering the
dismissal of Civil Case No. 8286 even before completion of the proceedings before the
MeTC. At the time said case was ordered dismissed by RTC-Branch 88, the MeTC had only
gone so far as holding a hearing on and eventually granting Muozs prayer for the issuance
of a writ of preliminary mandatory injunction.
Muoz alleges in her complaint in Civil Case No. 8286 that she had been in prior
possession of the subject property since it was turned-over to her by the sheriff on January
10, 1994, pursuant to the Alias Writ of Execution issued by the RTC-Branch 95 to
implement the final judgment in Civil Case No. Q-28580. The factual issue of who was in
prior possession of the subject property should be litigated between the parties regardless
of whether or not the final judgment in Civil Case No. Q-28580 extended to the spouses
Chan. Hence, the pendency of the latter issue in Civil Case No. Q-28580 before the RTCBranch 95 did not warrant the dismissal of Civil Case No. 8286 before the MeTC on the
ground of litis pendentia. The two cases could proceed independently of one another.

We more extensively discussed in Pajuyo v. Court of Appeals[57] that:

Ownership or the right to possess arising from ownership is
not at issue in an action for recovery of possession. The parties cannot
present evidence to prove ownership or right to legal possession except
to prove the nature of the possession when necessary to resolve the
issue of physical possession. The same is true when the defendant
asserts the absence of title over the property. The absence of title over
the contested lot is not a ground for the courts to withhold relief from
the parties in an ejectment case.
The only question that the courts must resolve in ejectment
proceedings is - who is entitled to the physical possession of the
premises, that is, to the possession de facto and not to the
possession de jure. It does not even matter if a partys title to the
property is questionable, or when both parties intruded into public land
and their applications to own the land have yet to be approved by the
proper government agency. Regardless of the actual condition of the
title to the property, the party in peaceable quiet possession shall not
be thrown out by a strong hand, violence or terror. Neither is the
unlawful withholding of property allowed. Courts will always uphold
respect for prior possession.

Samuel Go Chan and Atty. Yabut aver that the spouses Chan have never lost
possession of the subject property since acquiring the same from BPI Family in 1990. This
is a worthy defense to Muozs complaint for forcible entry, which Samuel Go Chan and
Atty. Yabut should substantiate with evidence in the continuation of the proceedings in
Civil Case No. 8286 before the MeTC.
In addition, Civil Case No. 8286, a forcible entry case, is governed by the Revised
Rule on Summary Procedure, Section 19 whereof provides:
SEC. 19. Prohibited pleadings and motions. The following
pleadings, motions, or petitions shall not be allowed in the cases
covered by this Rule:
xxxx
(g) Petition for certiorari, mandamus, or prohibition against
any interlocutory order issued by the court.

The purpose of the Rule on Summary Procedure is to achieve an expeditious and

inexpensive determination of cases without regard to technical rules. Pursuant to this
objective, the Rule prohibits petitions for certiorari, like a number of other pleadings, in
order to prevent unnecessary delays and to expedite the disposition of cases. [59]

79

Interlocutory orders are those that determine incidental matters that do not
touch on the merits of the case or put an end to the proceedings.[60] An order granting a
preliminary injunction, whether mandatory or prohibitory, is interlocutory and
unappealable.[61]
The writ of preliminary mandatory injunction issued by the MeTC in its Order
dated May 16, 1994, directing that Muoz be placed in possession of the subject property
during the course of Civil Case No. 8286, is an interlocutory order. Samuel Go Chan and
Atty. Yabut assailed the said order before the RTC-Branch 88 via a petition for certiorari,
docketed as Civil Case No. Q-94-20632. The RTC-Branch 88 gave due course to said
petition, and not only declared the MeTC Order dated May 16, 1994 null and void, but
went further by dismissing Civil Case No. 8286.
The prohibition in Section 19(g) of the Revised Rule on Summary Procedure is
plain enough. Its further exposition is unnecessary verbiage.[62] The petition forcertiorari of
Samuel Go Chan and Atty. Yabut in Civil Case No. Q-94-20632 is clearly covered by the said
prohibition, thus, it should have been dismissed outright by the RTC-Branch 88. While the
circumstances involved in Muozs forcible entry case against Samuel Go Chan and Atty.
Yabut are admittedly very peculiar, these are insufficient to except the petition
for certiorari of Samuel Go Chan and Atty. Yabut in Civil Case No. Q-94-20632 from the
prohibition. The liberality in the interpretation and application of the rules applies only in
proper cases and under justifiable causes and circumstances. While it is true that litigation
is not a game of technicalities, it is equally true that every case must be prosecuted in
accordance with the prescribed procedure to insure an orderly and speedy administration
of justice.[63]
Nonetheless, even though the peculiar circumstances extant herein do not justify
the dismissal of Civil Case No. 8286, they do require limiting pro hac vice the reliefs the
MeTC may accord to Muoz in the event that she is able to successfully prove forcible entry
by Samuel Go Chan and Atty. Yabut into the subject property (i.e., that the sheriff actually
turned-over to Muoz the possession of the subject property on January 10, 1994, and that
she was deprived of such possession by Samuel Go Chan and Atty. Yabut on February 2,
1994 by means of force, intimidation, threat, strategy, and stealth). Taking into account
our ruling in G.R. No. 146718 that the final judgment in Civil Case No. Q-28580 does not
extend to the spouses Chan, who were not impleaded as parties to the said case the MeTC
is precluded from granting to Muoz relief, whether preliminary or final, that will give her
possession of the subject property. Otherwise, we will be perpetuating the wrongful
execution of the final judgment in Civil Case No. Q-28580. Based on the same reason,
Muoz can no longer insist on the reinstatement of the MeTC Order dated May 16, 1994
granting a preliminary mandatory injunction that puts her in possession of the subject
property during the course of the trial. Muoz though may recover damages if she is able to
prove wrongful deprivation of possession of the subject property from February 2, 1994
until the finality of this decision in G.R. No. 146718.
WHEREFORE, in view of the foregoing, we:

(1) GRANT Emerita Muozs petition in G.R. No. 142676. We REVERSE and SET ASIDE the
Decision dated July 21, 1995 and Resolution dated March 9, 2000 of the Court of Appeals
in CA-G.R. SP No. 35322, which affirmed the Orders dated June 10, 1994 and August 5,
1994 of the Regional Trial Court, Branch 88 of Quezon City in Civil Case No. Q-9420632. We DIRECT the Metropolitan Trial Court, Branch 33 of Quezon City to reinstate
Emerita Muozs complaint for forcible entry in Civil Case No. 8286 and to resume the
proceedings only to determine whether or not Emerita Muoz was forcibly deprived of
possession of the subject property from February 2, 1994 until finality of this judgment,
and if so, whether or not she is entitled to an award for damages for deprivation of
possession during the aforementioned period of time; and
(2) DENY Emerita Munozs petition in G.R. No. 146718 for lack of merit, and AFFIRM the
Decision dated September 29, 2000 and Resolution dated January 5, 2001 of the Court of
Appeals in CA-G.R. SP No. 40019, which in turn, affirmed the Orders dated August 21, 1995
and October 3, 1995 of the Regional Trial Court, Branch 95 of Quezon City in Civil Case No.
Q-28580.
No pronouncement as to costs.
SO ORDERED.
_______________________________________________________________________
Republic of the Philippines
Supreme Court
Manila
FIRST DIVISION
JOSE FERNANDO, JR., ZOILO FERNANDO,
NORMA FERNANDO BANARES, ROSARIO
FERNANDO TANGKENCGO, HEIRS OF
TOMAS FERNANDO, represented by
ALFREDO V. FERNANDO, HEIRS OF
GUILLERMO FERNANDO, represented by
Ronnie H. Fernando, HEIRS OF ILUMINADA
FERNANDO, represented by Benjamin
Estrella and HEIRS OF GERMOGENA
FERNANDO,
Petitioners,

G.R. No. 161030

Present:
CORONA, C.J.,
Chairperson,
LEONARDO-DE CASTRO,
BERSAMIN,
DEL CASTILLO, and
VILLARAMA, JR., JJ.

- versus LEON ACUNA, HERMOGENES FERNANDO,

HEIRS OF SPOUSES ANTONIO FERNANDO
AND FELISA CAMACHO, represented by
HERMOGENES FERNANDO,
Respondents.

80

Promulgated:

September 14, 2011

x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
LEONARDO-DE CASTRO, J.:

This is a petition for review on certiorari under Rule 45 of the 1997 Rules of Civil Procedure
seeking to reverse and set aside the Decision[1] dated November 24, 2003 of the Court of
Appeals in CA-G.R. CV No. 75773, entitled Jose Fernando, Jr., et al. v. Heirs of Germogena
Fernando, et al., which reversed and set aside the Decision[2] dated May 16, 2002 of
Branch 84, Regional Trial Court (RTC) of Malolos, Bulacan in Civil Case No. 256-M-97.
At the heart of this controversy is a parcel of land covered by Original Certificate
of Title (OCT) No. RO-487 (997)[3] registered in the names of Jose A. Fernando, married to
Lucila Tinio, and Antonia A. Fernando, married to Felipe Galvez, and located in San Jose,
Baliuag, Bulacan. When they died intestate, the property remained undivided.
Petitioners herein namely, Jose Fernando, Jr., Zoilo Fernando, Norma Fernando Banares,
Rosario Fernando Tangkencgo, the heirs of Tomas Fernando, the heirs of Guillermo
Fernando, the heirs of Iluminada Fernando and the heirs of Germogena Fernando are the
heirs and successors-in-interest of the deceased registered owners. However, petitioners
failed to agree on the division of the subject property amongst themselves, even after
compulsory conciliation before the Barangay Lupon.
Thus, petitioners, except for the heirs of Germogena Fernando, filed a
Complaint[4] for partition on April 17, 1997 against the heirs of Germogena Fernando. In
the Complaint, plaintiffs alleged, among others, that they and defendants are common
descendants and compulsory heirs of the late spouses Jose A. Fernando and Lucila Tinio,
and the late spouses Antonia A. Fernando and Felipe Galvez. They further claimed that
their predecessors-in-interest died intestate and without instructions as to the disposition
of the property left by them covered by OCT No. RO-487 (997). There being no settlement,
the heirs are asking for their rightful and lawful share because they wish to build up their
homes or set up their business in the respective portions that will be allotted to them. In
sum, they prayed that the subject property be partitioned into eight equal parts,
corresponding to the hereditary interest of each group of heirs.
In their Answer[5] filed on May 20, 1997, defendants essentially admitted all of the
allegations in the complaint. They alleged further that they are not opposing the partition
and even offered to share in the expenses that will be incurred in the course of the
proceedings.
In his Complaint in Intervention[6] filed on January 12, 1998, respondent Leon
Acuna (Acuna) averred that in the Decision[7] dated November 29, 1929 of the Cadastral
Court of Baliuag, Bulacan, the portion of the property identified as Lot 1303 was already

adjudicated to: (a) Antonio Fernando, married to Felisa Camacho; (b) spouses Jose
Martinez and Gregoria Sison; (c) spouses Ignacio de la Cruz and Salud Wisco; and (d) Jose
Fernando, married to Lucila Tinio, the petitioners predecessor-in-interest. He likewise
claimed that in a 1930 Decision of the Cadastral Court, the portion identified as Lot 1302
was also already adjudicated to other people as well.
Respondent Acuna further alleged that Salud Wisco, through her authorized
attorney-in-fact, Amador W. Cruz, sold her lawful share denominated as Lot 1303-D with
an area of 3,818 square meters to Simeon P. Cunanan,[8] who in turn sold the same piece
of land to him as evidenced by a Deed of Sale.[9] He also belied petitioners assertion that
the subject property has not been settled by the parties after the death of the original
owners in view of the Decision[10] dated July 30, 1980 of the Court of First Instance (CFI) of
Baliuag, Bulacan, in LRC Case No. 80-389 which ordered the Register of Deeds of Bulacan
to issue the corresponding certificates of title to the claimants of the portion of the subject
property designated as Lot 1302.[11] Norma Fernando, one of the petitioners in the instant
case, even testified in LRC Case No. 80-389. According to respondent Acuna, this
circumstance betrayed bad faith on the part of petitioners in filing the present case for
partition.
Respondent Acuna likewise averred that the action for partition cannot prosper
since the heirs of the original owners of the subject property, namely Rosario, Jose Jr.,
Norma, Tomas, Guillermo, Leopoldo, Hermogena, Illuminada and Zoilo, all surnamed
Fernando, and Lucila Tinio, purportedly had already sold their respective one-tenth (1/10)
share each in the subject property to Ruperta Sto. Domingo Villasenor for the amount
of P35,000.00 on January 25, 1978 as evidenced by aKasulatan sa Bilihang
Patuluyan.[12] He added that he was in possession of the original copy of OCT No. RO-487
(997) and that he had not commenced the issuance of new titles to the subdivided lots
because he was waiting for the owners of the other portions of the subject property to
bear their respective shares in the cost of titling.
Subsequently, a Motion for Intervention[13] was filed on June 23, 1998 by
respondent Hermogenes Fernando (Hermogenes), for himself and on behalf of the heirs of
the late spouses, Antonio A. Fernando and Felisa Camacho. According to him, in the July
30, 1980 Decision of the CFI of Bulacan, their predecessors-in-interest had already been
adjudged owners of Lots 1302-A, 1302-F, 1302-G,[14] 1302-H and 1302-J of OCT No. RO-487
(997) and any adverse distribution of the properties would cause respondents damage and
prejudice. He would also later claim, in his Answer-in-Intervention,[15] that the instant case
is already barred by res judicata and, should be dismissed.
In the interest of substantial justice, the trial court allowed the respondents to
intervene in the case.
The plaintiffs and defendants jointly moved to have the case submitted for
judgment on the pleadings on May 7, 1999.[16] However, the trial court denied said motion
in a Resolution[17] dated August 23, 1999 primarily due to the question regarding the
ownership of the property to be partitioned, in light of the intervention of respondents
Acuna and Hermogenes who were claiming legal right thereto.

81

In their Manifestation[18] filed on April 12, 2000, petitioners affirmed their

execution of a Deed of Sale in favor of Ruperta Sto. Domingo Villasenor in 1978, wherein
they sold to her 1,000 square meters from Lot 1303 for the sum of 35,000.00.
After the pre-trial conference, trial ensued. On September 19, 2000, petitioner
Elizabeth Alarcon testified that they (plaintiffs) are not claiming the entire property
covered by OCT No. RO-487 (997) but only the area referred to as Lot 1303 and Sapang
Bayan. She also admitted that Lot 1302 had already been divided into ten (10) sublots and
allocated to various owners pursuant to the July 30, 1980 Decision of the CFI of Baliuag,
Bulacan and these owners already have their own titles. She likewise claimed that the
entire area consisting of Lot 1303 and Sapang Bayan is based on the subdivision plan of
Lot 1303. She admitted that plaintiffs predecessor-in-interest was only allocated a portion
of Lot 1303 based on the said plan. However, she claimed that the November 29, 1929
Decision subdividing Lot 1303 was never implemented nor executed by the parties.[19]
Petitioner Norma Fernando testified on October 3, 2000 that she is one of the
children of Jose A. Fernando and Lucila Tinio. She affirmed that plaintiffs were only
claiming Lot 1303 and Sapang Bayan. She also testified that Sapang Bayan was supposedly
included in Lot 1302 and was previously a river until it dried up.Unlike Lot 1302, the rest of
the property was purportedly not distributed. She likewise averred that she is aware of a
November 29, 1929 Decision concerning the distribution of Lot 1303 issued by the
cadastral court but insisted that the basis of the claims of the petitioners over Lot 1303 is
the title in the name of her ascendants and not said Decision.[20]
On November 16, 2000, as previously directed by the trial court and agreed to by
the parties, counsel for respondent Hermogenes prepared and submitted an English
translation of the November 29, 1929 Decision. The same was admitted and marked in
evidence as Exhibit X[21] as a common exhibit of the parties. The petitioners also presented
Alfredo Borja, the Geodetic Engineer who conducted a relocation survey of the subject
property.
After plaintiffs rested their case, respondent Hermogenes testified on December
7, 2000. In his testimony, he claimed to know the plaintiffs and defendants as they were
allegedly his relatives and neighbors. He confirmed that according to the November 29,
1929 Decision, portions of Lot 1303 was designated as Lots 1303-A, 1303-B, 1303-C and
1303-D which were adjudicated to certain persons, including Jose Fernando, while the rest
of Lot 1303 was adjudicated to his parents, Antonio A. Fernando married to Felisa
Camacho. According to respondent Hermogenes, his familys tenant and the latters
children occupied the portion of Lot 1303 allotted to his (Hermogenes) parents while the
rest of Lot 1303 was occupied by the persons named in the said November 29, 1929
Decision. He admitted, however, that nobody among the purported possessors of Lot 1303
registered the lots assigned to them in the Decision.[22]
On January 18, 2001, respondent Hermogenes presented a witness, Engineer
Camilo Vergara who testified that the subject land is divided into Lots 1302 and 1303 with
a creek dividing the two lots known as Sapang Bayan. He also identified a Sketch Plan
numbered as PSD-45657 and approved on November 11, 1955.[23]During the hearing on
January 30, 2001, respondent Hermogenes made an oral offer of his evidence and rested

his case. On the same date, respondent Acuna, in lieu of his testimony, offered for the
parties to simply stipulate on the due execution and authenticity of the Deeds of Sale
dated April 6, 1979 and December 28, 1980,showing the transfer of Lot 1303-D from Salud
Wisco to Simeon Cunanan and subsequently to respondent Acuna. When counsel for
plaintiffs and defendants agreed to the stipulation, albeit objecting to the purpose for
which the deeds of sale were offered, the trial court admitted Acunas exhibits and Acuna
rested his case.[24]
On February 15, 2001, plaintiffs recalled Norma Fernando as a rebuttal
witness. In her rebuttal testimony, she identified the tax declaration[25] over the said
property in the name of Jose A. Fernando; an official receipt[26] dated October 3, 1997
issued by the Office of the Treasurer of the Municipality of Baliuag, Bulacan for payment of
real property taxes from 1991 to 1997; and a real property tax clearance [27] dated October
6, 1997, to show that plaintiffs have allegedly been paying the real property taxes on the
entire property covered by OCT No. RO-487 (997). However, she further testified that they
were now willing to pay taxes only over the portion with an area of 44,234 square meters,
which is included in their claim.[28]
In a Decision dated May 16, 2002, the trial court ruled that plaintiffs and
defendants (petitioners herein) were indeed the descendants and successors-in-interest of
the registered owners, Jose A. Fernando (married to Lucila Tinio) and Antonia Fernando
(married to Felipe Galvez), of the property covered by OCT No. RO-487 (997). After finding
that the parties admitted that Lot 1302 was already distributed and titled in the names of
third persons per the July 30, 1980 Decision of the CFI of Baliuag, Bulacan the trial court
proceeded to rule on the allocation of Lot 1303 and Sapang Bayan.
With respect to Lot 1303, the trial court found that the November 29, 1929
Decision of the Cadastral Court, adjudicating said lot to different persons and limiting Jose
Fernandos share to Lot 1303-C, was never implemented nor executed despite the lapse of
more than thirty years. Thus, the said decision has already prescribed and can no longer be
executed. The trial court ordered the reversion of Lot 1303 to the ownership of spouses
Jose A. Fernando and Lucila Tinio and spouses Antonia A. Fernando and Felipe Galvez
under OCT No. RO-487 (997) and allowed the partition of Lot 1303 among petitioners as
successors-in-interest of said registered owners. Excluded from the partition, however,
were the portions of the property which petitioners admitted had been sold or transferred
to Ruperta Sto. Domingo Villasenor and respondent Acuna.
As for the ownership of Sapang Bayan, the trial court found that the same had
not been alleged in the pleadings nor raised as an issue during the pre-trial
conference. Also, according to the trial court, the parties failed to clearly show
whether Sapang Bayan was previously a dry portion of either Lot 1302 or Lot 1303.Neither
was there any proof that Sapang Bayan was a river that just dried up or that it was an
accretion which the adjoining lots gradually received from the effects of the current of
water. It was likewise not established who were the owners of the lots adjoining Sapang
Bayan. The trial court concluded that none of the parties had clearly and sufficiently
established their claims over Sapang Bayan.
The dispositive portion of the May 16, 2002 Decision of the trial court reads:

82

WHEREFORE, all the foregoing considered, judgment is hereby

rendered ordering the reversion of Lot 1303, except the portions
allotted to Acuna and Ruperta Sto. Domingo Villasenor, to the
ownership of Jose Fernando and Lucia Tinio and Antonia Fernando and
Felipe Galvez under OCT No. 997 and thereafter allowing the partition
of said Lot 1303 among the plaintiffs and the defendants as successorsin-interest of Jose and Lucia as well as Antonia and Felipe after the
settlement of any inheritance tax, fees, dues and/or obligation
chargeable against their estate.[29]

All the parties, with the exception of respondent Acuna, elevated this case to the
Court of Appeals which rendered the assailed November 24, 2003 Decision, the dispositive
portion of which reads:
WHEREFORE, premises considered, the decision dated May 16,
2002, of the Regional Trial Court of Malolos, Bulacan, Third Judicial
Region, Branch 84, in Civil Case No. 256-M-97, is hereby REVERSED and
SET ASIDE and the complaint dated April 17, 1997 filed by plaintiffsappellants is dismissed. Costs against plaintiffs-appellants.[30]

Hence, plaintiffs and defendants in the court a quo elevated the matter for our
review through the instant petition.
Petitioner raises the following issues for consideration:
1.

2.

Whether or not the ownership of Lot 1303 and the Sapang Bayan portion of
the piece of land covered by O.C.T. No. RO-487 (997) or Plan Psu-39080
should revert to the descendants and heirs of the late spouses Jose
Fernando and Lucila Tinio and Antonia Fernando, married to Felipe Galvez;
Whether or not a title registered under the Torrens system, as the subject
original certificate of title is the best evidence of ownership of land and is a
notice against the world.[31]

The petition is without merit.

Petitioners based their claims to the disputed areas designated as Lot 1303
and Sapang Bayan on their ascendants title, OCT No. RO-487 (997), which was issued on
February 26, 1927 in the name of Jose A. Fernando married to Lucila Tinio and Antonia A.
Fernando married to Felipe Galvez. The Court now rules on these claims in seriatim.
Petitioners claim with respect to Lot 1303

As the records show, in the November 29, 1929 Decision of the Cadastral Court
of Baliuag, Bulacan (in Cadastral Record No. 14, GLRO Cad. Record No. 781) which was
written in Spanish, Lot 1303 had already been divided and adjudicated to spouses Jose A.
Fernando and Lucila Tinio; spouses Antonia A. Fernando and Felipe Galvez; spouses
Antonio A. Fernando and Felisa Camacho; spouses Jose Martinez and Gregoria Sison; and
spouses Ignacio de la Cruz and Salud Wisco from whom respondent Acuna derived his
title. The English translation of the said November 29, 1929 Decision was provided by
respondent Hermogenes and was adopted by all the parties as a common exhibit
designated as Exhibit X. The agreed English translation of said Decision reads:
Lot No. 1303 This lot is decreed in record No. 448, G.L.R.O.
Record No. 25414 and actually with Original Certificate No. 997
(exhibited today) in the name of Jose A. Fernando and Antonia A.
Fernando, who now pray that said lot be subdivided in accordance with
the answers recorded in the instant cadastral record, and the sketch,
Exh. A, which is attached to the records.
A part or portion of the lot has been claimed by Antonio A.
Fernando, of legal age, married to Felisa Camacho; another portion by
the spouses Jose Martinez and Gregoria Sison; another portion by
Antonia A. Fernando, of legal age, married to Felipe Galvez; another
portion by Jose A. Fernando, of legal age, married to Lucila Tinio; and
another portion by the spouses Ignacio de la Cruz and Salud Wisco, both
of legal age. The part claimed by the spouses Jose A. Martinez and
Gregoria Sison is Lot 1303-A of Exh. A; the part claimed by Antonia A.
Fernando is Lot 1303-B of said exhibit; the part claimed by Jose A.
Fernando is Lot 1303-C of said exhibit, and the part claimed by the
spouses Ignacio de la Cruz and Salud Wisco is Lot 1303-D of the
aforementioned Exhibit.
The subdivision of said lot is hereby ordered, separating from
the same the portions that correspond to each of the claimants, which
portions are known as Lots 1303-A, 1303-B, 1303-C, and 1303-D in the
sketch, Exh. A, and once subdivided, are adjudicated in favor of the
spouses, Jose Martinez and Gregoria Sison, of legal age, Lot No. 1303-A,
in favor of Antonia A. Fernando, of legal age, married to Felipe Galvez,
Lot No. 1303-B; in favor of Jose A. Fernando, of legal age, married to
Lucila Tinio, Lot 1303-C; in favor of the spouses Ignacio de la Cruz and
Salud Wisco, of legal age, Lot 1303-D; and the rest of Lot 1303 is
adjudged in favor of Antonio A. Fernando married to Felisa Camacho. It
is likewise ordered that once the subdivision plan is approved, the same
be forwarded by the Director of Lands to this Court for its final decision.
It is ordered that the expense for mentioned subdivision, shall
be for the account of the spouses Jose Martinez and Gregoria Sison,
Antonia A. Fernando, Jose A. Fernando, the spouses Ignacio de la Cruz
and Salud Wisco, and Antonio A. Fernando.[32]

83

From the foregoing, it would appear that petitioners ascendants themselves

petitioned for the cadastral court to divide Lot 1303 among the parties to the 1929 case
and they were only allocated Lots 1303-B and 1303-C. Still, as the trial court noted, the
November 29, 1929 Decision was never fully implemented in the sense that the persons
named therein merely proceeded to occupy the lots assigned to them without having
complied with the other directives of the cadastral court which would have led to the
titling of the properties in their names. Nonetheless, it is undisputed that the persons
named in the said November 29, 1929 Decision and, subsequently, their heirs and assigns
have since been in peaceful and uncontested possession of their respective lots for more
than seventy (70) years until the filing of the suit for partition on April 17, 1997 by
petitioners which is the subject matter of this case. Respondent Hermogenes, who
testified that petitioners were his relatives and neighbors, further affirmed before the trial
court that the persons named in the November 29, 1929 Decision took possession of their
respective lots:

The persons named in the Decision already took possession of

the lots allotted to them as per that Decision. So that was
already answered. Anything else?
ATTY. VENERACION;
No more question, Your Honor.[33]

It is noteworthy that petitioners do not dispute that the November 29, 1929
Decision of the cadastral court already adjudicated the ownership of Lot 1303 to persons
other than the registered owners thereof. Petitioners would, nonetheless, claim that
respondents purported failure to execute the November 29, 1929 Decision over Lot 1303
(i.e., their failure to secure their own titles) meant that the entire Lot 1303 being still
registered in the name of their ascendants rightfully belongs to them.This is on the theory
that respondents right to have the said property titled in their names have long
prescribed.

ATTY. VENERACION:
On this point, we agree with the appellate court.
Q This Jose A. Fernando married to Lucila Tinio, you testified earlier are
the parents of the plaintiffs. Did they take possession of lot
1303-C?
A Yes, sir. They took possession.

Section 47 of Presidential Decree No. 1529, otherwise known as the Property

Registration Decree, states that [n]o title to registered land in derogation of the title of the
registered owner shall be acquired by prescription or adverse possession. Thus, the Court
has held that the right to recover possession of registered land is imprescriptible because
possession is a mere consequence of ownership.[34]

Q Did they take possession of the other lots?

A No. Yes, the portion
Q The other lots in the name of the other persons. Did they take
possession of that?
A Yes, they took took possession of the other No, sir.
Q I am asking you whether they took possession, the children
ATTY. SANTIAGO:
The questions are already answered, your Honor.
ATTY. VENERACION:
What is the answer?

However, in Heirs of Anacleto B. Nieto v. Municipality of Meycauayan,

Bulacan,[35] the Court had recognized the jurisprudential thread regarding the exception to
the foregoing doctrine that while it is true that a Torrens title is indefeasible and
imprescriptible, the registered landowner may lose his right to recover possession of his
registered property by reason of laches.
Thus, in Heirs of Batiog Lacamen v. Heirs of Laruan,[36] the Court had held that
while a person may not acquire title to the registered property through continuous
adverse possession, in derogation of the title of the original registered owner, the heir of
the latter, however, may lose his right to recover back the possession of such property and
the title thereto, by reason of laches.
In the more recent case of Bartola M. Vda. De Tirona v. Encarnacion,[37] we
similarly held that while jurisprudence is settled on the imprescriptibility and
indefeasibility of a Torrens title, there is equally an abundance of cases where we
unequivocally ruled that registered owners may lose their right to recover possession of
property through the equitable principle of laches.

ATTY. SANTIAGO:
Its in the record.
COURT:

Laches means the failure or neglect for an unreasonable and unexplained length
of time to do that which, by observance of due diligence, could or should have been done
earlier. It is negligence or omission to assert a right within a reasonable time, warranting
the presumption that the party entitled to assert his right either has abandoned or

84

declined to assert it. Laches thus operates as a bar in equity.[38] The essential elements of
laches are: (a) conduct on the part of the defendant, or of one under whom he claims,
giving rise to the situation complained of; (b) delay in asserting complainants rights after
he had knowledge of defendants acts and after he has had the opportunity to sue; (c) lack
of knowledge or notice by defendant that the complainant will assert the right on which
he bases his suit; and (d) injury or prejudice to the defendant in the event the relief is
accorded to the complainant.[39]

Court has ruled that the ten-year prescriptive period applies only when the person
enforcing the trust is not in possession of the property. If a person claiming to be its owner
is in actual possession of the property, the right to seek reconveyance, which in effect
seeks to quiet title to the property, does not prescribe. The reason is that the one who is in
actual possession of the land claiming to be its owner may wait until his possession is
disturbed or his title is attacked before taking steps to vindicate his right. [44]
Petitioners claim with respect to Sapang Bayan

In view of respondents decades long possession and/or ownership of their

respective lots by virtue of a court judgment and the erstwhile registered owners inaction
and neglect for an unreasonable and unexplained length of time in pursuing the recovery
of the land, assuming they retained any right to recover the same, it is clear that
respondents possession may no longer be disturbed. The right of the registered owners as
well as their successors-in-interest to recover possession of the property is already a stale
demand and, thus, is barred by laches.
In the same vein, we uphold the finding of the Court of Appeals that the title of
petitioners ascendants wrongfully included lots belonging to third persons.[40]Indeed,
petitioners ascendants appeared to have acknowledged this fact as they were even the
ones that prayed for the cadastral court to subdivide Lot 1303 as evident in the November
29, 1929 Decision. We concur with the Court of Appeals that petitioners ascendants held
the property erroneously titled in their names under an implied trust for the benefit of the
true owners. Article 1456 of the Civil Code provides:
ART. 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.

As aptly observed by the appellate court, the party thus aggrieved has the right
to recover his or their title over the property by way of reconveyance while the same has
not yet passed to an innocent purchaser for value.[41] As we held in Medizabel v.
Apao,[42] the essence of an action for reconveyance is that the certificate of title is
respected as incontrovertible. What is sought is the transfer of the property, in this case its
title, which has been wrongfully or erroneously registered in another person's name, to its
rightful owner or to one with a better right. It is settled in jurisprudence that 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.[43]
We cannot subscribe to petitioners argument that whatever rights or claims
respondents may have under the November 29, 1929 Decision has prescribed for their
purported failure to fully execute the same. We again concur with the Court of Appeals in
this regard. An action for reconveyance of registered land based on implied trust
prescribes in ten (10) years, the point of reference being the date of registration of the
deed or the date of the issuance of the certificate of title over the property. However, this

As for the issue of the ownership of Sapang Bayan, we sustain the appellate
court insofar as it ruled that petitioners failed to substantiate their ownership over said
area. However, we find that the Court of Appeals erred in ruling that the principle of
accretion is applicable. The said principle is embodied in Article 457 of the Civil Code which
states that [t]o 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. We have held
that for Article 457 to apply the following requisites must concur: (1) that the deposit be
gradual and imperceptible; (2) that it be made through the effects of the current of the
water; and (3) that the land where accretion takes place is adjacent to the banks of
rivers.[45] The character of the Sapang Bayanproperty was not shown to be of the nature
that is being referred to in the provision which is an accretion known as alluvion as no
evidence had been presented to support this assertion.
In fact from the transcripts of the proceedings, the parties could not agree
how Sapang Bayan came about. Whether it was a gradual deposit received from the river
current or a dried-up creek bed connected to the main river could not be ascertained.
Even assuming that Sapang Bayan was a dried-up creek bed, under Article 420,
paragraph 1[46] and Article 502, paragraph 1[47] of the Civil Code, rivers and their natural
beds are property of public dominion. In the absence of any provision of law vesting
ownership of the dried-up river bed in some other person, it must continue to belong to
the State.
We ruled on this issue in Republic v. Court of Appeals,[48] to wit:

The lower court cannot validly order the registration of Lots 1

and 2 in the names of the private respondents. These lots were portions
of the bed of the Meycauayan river and are therefore classified as
property of the public domain under Article 420 paragraph 1 and Article
502, paragraph 1 of the Civil Code of the Philippines. They are not open
to registration under the Land Registration act. The adjudication of the
lands in question as private property in the names of the private
respondents is null and void.[49]

Furthermore, in Celestial v. Cachopero,[50] we similarly ruled that a dried-up creek

bed is property of public dominion:

85

A creek, like the Salunayan Creek, is a recess or arm extending

from a river and participating in the ebb and flow of the sea. As such,
under Articles 420(1) and 502(1) of the Civil Code, the Salunayan Creek,
including its natural bed, is property of the public domain which is not
susceptible to private appropriation and acquisitive prescription. And,
absent any declaration by the government, that a portion of the creek
has dried-up does not, by itself, alter its inalienable character.[51]

Therefore, on the basis of the law and jurisprudence on the matter, Sapang
Bayan cannot be adjudged to any of the parties in this case.
WHEREFORE, premises considered, the petition is hereby DENIED. The
assailed Decision dated November 24, 2003 of the Court of Appeals in CA-G.R. CV No.
75773 is hereby AFFIRMED. Costs against petitioners.
SO ORDERED.
__________________________________________________________________________
Republic of the Philippines
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-27088 July 31, 1975
HEIRS OF BATIOG LACAMEN, petitioners-appellants,
vs.
HEIRS OF LARUAN, * respondents-appellants.
Leonardo A. Amores for petitioners-appellants.
Reyes and Cabato for respondents-appellees.
MARTIN, J.:
Petition for review by certiorari of a decision of the Honorable Court of Appeals affirming
the judgment of the Court of First Instance of Baguio City in Civil Case No. 738 entitled
"Heirs of Batiog Lacamen vs. Heirs of Laruan" "... declaring the contract of sale between
Lacamen and Laruan null and void [for lack of approval of the Director of the Bureau of
Non-Christian Tribes] ..."
Petitioners-appellants are the surviving heirs of Batiog Lacamen, while respondentsappellants are the heirs of Laruan. 1
Sometime on January 28, 1928, Laruan executed a Deed of Sale in favor of Batiog
Lacamen 2 conveying for the sum of P300.00 his parcel of land situated in the sitio of La
Trinidad, Benguet, Mountain Province, comprising 86 ares and 16 centares 3 and covered
by Certificate of Title No. 420 of the Registry of Benguet. The deed was acknowledged
before Antonio Rimando, a notary public in the City of Baguio. 4

Immediately after the sale, Laruan delivered the certificate of title to Lacamen.
Thereupon, Lacamen entered in possession and occupancy of the land without first
securing the corresponding transfer certificate of title in his name. He introduced various
improvements and paid the proper taxes. His possession was open, continuous, peaceful,
and adverse. After his death in 1942, his heirs remained in and continued possession and
occupancy of the land. They too paid the taxes.
After the last Global War, Lacamen's heirs "started fixing up the papers of all the
properties" left by him 5 In or about June, 1957, they discovered that Laruan's heirs,
respondents-appellants, were able to procure a new owner's copy of Certificate of Title
No. 420 by a petition filed in court alleging that their copy has been lost or destroyed.
Through this owner's copy, respondents-appellants caused the transfer of the title on the
lot in their names. 6 Transfer Certificate of Title No. T-775 was issued to them by the
Registry of Deeds of Benguet.
Refused of their demands for reconveyance of the title, petitioners-appellants sued
respondents-appellants in the Court of First Instance of Baguio City on December 9, 1957,
prayings among other things, that they be declared owners of the subject property; that
respondents-appellants be ordered to convey to them by proper instruments or
documents the land in question; and that the Register of Deeds of Benguet be ordered to
cancel Transfer Certificate of Title No. T-775 and issue in lieu thereof a new certificate of
title in their names. 7
In answer, respondents-appellants traversed the averments in the complaint
and claim absolute ownership over the land. They asserted that their deceased
father, Laruan, never sold the property and that the Deed of Sale was not thumbmarked
by him. 8
On 5 April 1962, the Court of First Instance of Baguio City found for respondentsappellants and against petitioners-appellants. Forthwith, petitioners-appellants appealed
to the Court of Appeals.
On 7 December 1966, the Court of Appeals sustained the trial court.
In this review, petitioners-appellants press that the Court of Appeals erred
I
... IN DECLARING THE SALE BETWEEN LACAMEN AND LARUAN TO BE
NULL AND VOID.
II
... IN APPLYING STRICTLY THE PROVISIONS OF SECTIONS 118 AND 122
OF ACT NO. 2874 AND SECTIONS 145 AND 164 OF THE CODE OF
MINDANAO AND SULU.
III
... IN AFFIRMING THE DECISION OF THE COURT OF FIRST INSTANCE OF
BAGUIO CITY.
which assignments could be whittled down into the pervading issue of whether the
deceased Batiog Lacamen and/or his heirs, herein petitioners-appellants, have validly
acquired ownership over the disputed parcel of land.
The 1917 Administrative Code of Mindanao and Sulu declares in its Section 145 that no
contract or agreement relating to real property shall be made by any person with any nonChristian inhabitant of the Department of Mindanao and Sulu, unless such contract shall
bear the approval of the provincial governor of the province wherein the contract was
executed, or his representative duly authorized for such purpose in writing endorsed upon

86

it. 9 Any contract or agreement in violation of this section is "null and void" under the
succeeding Section 146. 10
On 24 February 1919, Act No. 2798 was approved by the Philippine Legislature extending
to the Mountain Province and the Province of Nueva Vizcaya the laws and other legal
provisions pertaining to the provinces and minor political subdivisions of the Department
of Mindanao and Sulu, with the specific proviso that the approval of the land transaction
shall be by the Director of the Bureau of Non-Christian Tribes. 11
Then on 29 November 1919, came Act No. 2874 otherwise known as "The Public Land
Act". It provided in Section 118 thereof that "Conveyances and encumbrances made by
persons belonging to the so-called 'non-Christian tribes', when proper, shall not be valid
unless duly approved by the Director of the Bureau of non-Christian Tribes." Any violation
of this injunction would result in the nullity and avoidance of the transaction under the
following Section 122.
During the regime of the Commonwealth, C.A. 141 otherwise known as "The Public Land
Act" was passed November 7, 1936 amending Act No. 2874. However, it contained a
similar provision in its Section 120 that "Conveyances and encumbrances made by
illiterate non-Christians shall not be valid unless duly approved by the Commissioner of
Mindanao and Sulu.
The contracting parties, Lacamen and Laruan, are bound by the foregoing laws, since both
of them are illiterate Igorots, belonging to the "non-Christian Tribes" of the Mountain
Province 12 , and the controverted land was derived from a Free Patent 13 or acquired from
the public domain. 14
The trial court did show cordiality to judicial pronouncements when it avoided the realty
sale between Lacamen and Laruan for want of approval of the Director of the Bureau of
Non-Christian Tribes. For jurisprudence decrees that non-approved conveyances and
encumbrances of realty by illiterate non-Christians are not valid, i.e., not binding or
obligatory. 15
Nevertheless, the thrust of the facts in the case before Us weakens the gathered strength
of the cited rule. The facts summon the equity of laches.
"Laches" has been defined as "such neglect or ommission to assert a right, taken in
conjunction with lapse of time and other circumstances causing prejudice to an adverse
party, as will operate as a bar in equity." 16 It is a delay in the assertion of a right "which
works disadvantage to another" 17 because of the "inequity founded on some change in
the condition or relations of the property or parties." 18 It is based on public policy which,
for the peace of society, 19 ordains that relief will be denied to a stale demand which
otherwise could be a valid claim. 20 It is different from and applies independently of
prescription. While prescription is concerned with the fact of delay, laches is concerned
with the effect of delay. Prescription is concerned with the effect of delay. Prescription is a
matter of time; laches is principally a question of inequity of permitting a claim to be
enforced, this inequity being founded on some change in the condition of the property or
the relation of the parties. Prescription is statutory; laches is not. Laches applies in equity,
whereas prescription applies at law. Prescription is based on a fixed time, laches is not. 21
Laruan's sale of the subject lot to Lacamen could have been valid were it not for the sole
fact that it lacked the approval of the Director of the Bureau of Non-Christian Tribes. There
was impressed upon its face full faith and credit after it was notarized by the notary
public. 22 The non-approval was the only "drawback" of which the trial court has found the
respondents-appellants to "have taken advantage as their lever to deprive [petitionersappellants] of this land and that their motive is out and out greed." 23 As

between Laruan and Lacamen, the sale was regular, not infected with any
flaw. Laruan's delivery of his certificate of title to Lacamen just after the sale symbolizes
nothing more than a bared recognition and acceptance on his part that Lacamen is the
new owner of the property. Thus, not any antagonistic show of ownership was ever
exhibited by Laruan after that sale and until his death in May 1938.
From the transfer of the land on January 28, 1928, Lacamen possessed and occupied the
ceded land in concepto de dueo until his death in April 1942. Thereafter his heirs,
petitioners-appellants herein, took over and exercised dominion over the property,
likewise unmolested for nearly 30 years (1928-1957) until the heirs of Laruan,
respondents-appellants, claimed ownership over the property and secured registration of
the same in their names. At the trial, petitioners-appellants have been found to have
introduced improvements on the land consisting of houses, barns, greenhouses, walls,
roads, etc., and trees valued at P38,920.00. 24
At this state, therefore, respondents-appellants' Claim of absolute ownership over the
land cannot be countenanced. It has been held that while a person may not acquire title to
the registered property through continuous adverse possession, in derogation of the title
of the original registered owner, the heir of the latter, however, may lose his right to
recover back the possession of such property and the title thereto, by reason of
laches. 25 Much more should it be in the instant case where the possession of nearly 30
years or almost half a century now is in pursuance of sale which regrettably did not bear
the approval of the executive authority but which the vendor never questioned during his
life time. Laruan's laches extends to his heirs, the respondents-appellants herein, since
they stand in privity with him. 26
Indeed, in a like case, 27 it was ruled that
Courts can not look with favor at parties who, by their silence, delay
and inaction, knowingly induce another to spend time, effort and
expense in cultivating the land, paying taxes and making improvements
thereon for 30 long years, only to spring from ambush and claim title
when the possessor's efforts and the rise of land values offer an
opportunity to make easy profit at his expense.
For notwithstanding the invalidity of the sale, the vendor Laruan suffered the vendee
Lacamen to enter, possess and occupy the property in concepto de dueo without
demurrer and molestation, from 1928, until the former's death in 1938; and when
respondents-appellants succeeded to the estate of their father, they too kept silent, never
claiming that the lot is their own until in 1957 or after almost 30 years they took
"advantage of the [non-approval of the sale] as their lever to deprive [petitionersappellants] of this land" with a motive that was "out and out greed." Even granting,
therefore, that no prescription lies against their father's recorded title, their quiescence
and inaction for almost 30 years now commands the imposition of laches against their
adverse claim. (Miguel, footnote 27)
It results that as against Laruan and his heirs, respondents-appellants herein, the late
Batiog Lacamen and his heirs, petitioners-appellants herein, have superior right and,
hence, have validly acquired ownership of the litigated land. Vigilantibus non dormientibos
sequitas subvenit.
IN VIEW OF THE FOREGOING, the judgment of the Court of Appeals affirming that of the
trial court is hereby reversed and set aside.
The petitioners-appellants are hereby declared the lawful owners of the land in question.
Accordingly, Transfer Certificate of Title No. T-775 in the name of respondents-appellants

87

is hereby cancelled and in lieu thereof the Register of Deeds of Benguet is ordered to issue
a new transfer certificate of title in the name of petitioners-appellants.
Without pronouncement as to costs.
SO ORDERED.
Makasiar, Esguerra and Muoz Palma, JJ., concur.
Castro, J., concurs in the result.
Republic of the Philippines
SUPREME COURT
Manila

ANUNCIACION VDA. DE OUANO, MARIO P. OUANO,

LETICIA OUANO ARNAIZ, and CIELO
OUANO MARTINEZ,
Petitioners,

G.R. No. 168770

- versus -

CORONA, C.J., Chairperson,

VELASCO, JR.,
LEONARDO-DE CASTRO,
DEL CASTILLO,
PEREZ, JJ.

MACTAN-CEBUINTERNATIONAL AIRPORT AUTHORITY

(MCIAA),
Petitioner,

DECISION
VELASCO, JR., J.:

At the center of these two (2) Petitions for Review on Certiorari under Rule 45 is the issue
of the right of the former owners of lots acquired for the expansion of
theLahug Airport in Cebu City to repurchase or secure reconveyance of their respective
properties.

FIRST DIVISION

THE REPUBLIC OF THEPHILIPPINES, THE MACTAN-CEBU

INTERNATIONAL AIRPORT AUTHORITY, and THE
REGISTER OF DEEDS FOR THE CITY OF CEBU,
Respondents.
x-------------------------------------------x

February 9, 2011
x-----------------------------------------------------------------------------------------x

Present:

In the first petition, docketed as G.R. No. 168770, petitioners Anunciacion vda.
de Ouano, Mario Ouano, Leticia Ouano Arnaiz and Cielo Ouano Martinez (the Ouanos)
seek to nullify the Decision[1] dated September 3, 2004 of the Court of Appeals (CA) in CAG.R. CV No. 78027, affirming the Order dated December 9, 2002 of the Regional Trial Court
(RTC), Branch 57 in Cebu City, in Civil Case No. CEB-20743, a suit to compel the Republic of
the Philippines and/or the Mactan-Cebu International Airport Authority (MCIAA) to
reconvey to the Ouanos a parcel of land.
The second petition, docketed as G.R. No. 168812, has the MCIAA seeking principally to
annul and set aside the Decision[2] and Resolution[3] dated January 14, 2005 and June 29,
2005, respectively, of the CA in CA-G.R. CV No. 64356, sustaining the RTC, Branch 13 in
Cebu City in its Decision of October 7, 1988 in Civil Case No. CEB-18370.
Per its October 19, 2005 Resolution, the Court ordered the consolidation of both cases.

G.R. No. 168812

- versus RICARDO L. INOCIAN, in his personal capacity and as

Attorney-in-Fact of OLYMPIA E. ESTEVES, EMILIA E.
BACALLA, RESTITUTA E. MONTANA, and RAUL L.
INOCIAN; and ALETHA SUICO MAGAT, in her personal
capacity and as Attorney-in-Fact of PHILIP M. SUICO,
DORIS S. DELA CRUZ, JAMES M. SUICO, EDWARD M.
SUICO, ROSELYN SUICO-LAWSIN, REX M. SUICO,
KHARLA SUICO-GUTIERREZ, ALBERT CHIONGBIAN, and
JOHNNY CHAN,
Respondents.

Promulgated:

Except for the names of the parties and the specific lot designation involved, the relevant
factual antecedents which gave rise to these consolidated petitions are, for the most part,
as set forth in the Courts Decision[4] of October 15, 2003, as reiterated in a
Resolution[5] dated August 9, 2005, in G.R. No. 156273 entitled Heirs of Timoteo Moreno
and Maria Rotea v. Mactan-Cebu International Airport Authority (Heirs of Moreno), and in
other earlier related cases.[6]
In 1949, the National Airport Corporation (NAC), MCIAAs predecessor agency,
pursued a program to expand the Lahug Airport in Cebu City. Through its team of
negotiators, NAC met and negotiated with the owners of the properties situated around
the airport, which included Lot Nos. 744-A, 745-A, 746, 747, 761-A, 762-A, 763-A, 942, and
947 of the Banilad Estate. As the landowners would later claim, the government
negotiating team, as a sweetener, assured them that they could repurchase their
respective lands should the Lahug Airport expansion project do not push through or once
the Lahug Airport closes or its operations transferred toMactan-Cebu Airport. Some of the
landowners accepted the assurance and executed deeds of sale with a right of repurchase.
Others, however, including the owners of the aforementioned lots, refused to sell because
the purchase price offered was viewed as way below market, forcing the hand of the
Republic, represented by the then Civil Aeronautics Administration (CAA), as successor
agency of the NAC, to file a complaint for the expropriation of Lot Nos. 744-A, 745-A, 746,

88

747, 761-A, 762-A, 763-A, 942, and 947, among others, docketed as Civil Case No. R1881 entitled Republic v. Damian Ouano, et al.
On December 29, 1961, the then Court of First Instance (CFI) of Cebu rendered
judgment for the Republic, disposing, in part, as follows:
IN VIEW OF THE FOREGOING, judgment is hereby rendered:
1. Declaring the expropriation of Lots Nos. 75, 76, 76, 89, 90, 91, 92,
105, 106, 107, 108, 104, 921-A, 88, 93, 913-B, 72, 77, 916, 777-A, 918,
919, 920, 764-A, 988, 744-A, 745-A, 746, 747, 762-A, 763-A, 951, 942,
720-A, x x x and 947, included in the Lahug Airport, Cebu City, justified
in and in lawful exercise of the right of eminent domain.
xxxx
3. After the payment of the foregoing financial obligation to the
landowners, directing the latter to deliver to the plaintiff the
corresponding Transfer Certificates of Title to their respective lots; and
upon the presentation of the said titles to the Register of Deeds,
ordering the latter to cancel the same and to issue, in lieu thereof, new
Transfer Certificates of Title in the name of the plaintiff.[7]

In view of the adverted buy-back assurance made by the government, the

owners of the lots no longer appealed the decision of the trial court. [8] Following the
finality of the judgment of condemnation, certificates of title for the covered parcels of
land were issued in the name of the Republic which, pursuant to Republic Act No.
6958,[9] were subsequently transferred to MCIAA.
At the end of 1991, or soon after the transfer of the aforesaid lots to
MCIAA, Lahug Airport completely ceased operations, Mactan Airport having opened to
accommodate incoming and outgoing commercial flights. On the ground, the expropriated
lots were never utilized for the purpose they were taken as no expansion
ofLahug Airport was undertaken. This development prompted the former lot owners to
formally demand from the government that they be allowed to exercise their promised
right to repurchase. The demands went unheeded. Civil suits followed.
G.R. No. 168812 (MCIAA Petition)
On February 8, 1996, Ricardo L. Inocian and four others (all children of Isabel Limbaga who
originally owned six [6] of the lots expropriated); and Aletha Suico Magat and seven
others, successors-in-interest of Santiago Suico, the original owner of two (2) of the
condemned lots (collectively, the Inocians), filed before the RTC in Cebu City a complaint
for reconveyance of real properties and damages against MCIAA. The complaint, docketed
as Civil Case No. CEB-18370, was eventually raffled to Branch 13 of the court.

On September 29, 1997, one Albert Chiongbian (Chiongbian), alleging to be the owner of
Lot Nos. 761-A and 762-A but which the Inocians were now claiming, moved and was later
allowed to intervene.
During the pre-trial, MCIAA admitted the following facts:
1.
That the properties, which are the subject matter of Civil
Case No. CEB-18370, are also the properties involved in Civil Case R1881;
2.
That the purpose of the expropriation was for the
expansion of the old Lahug Airport; that the Lahug Airport was not
expanded;
3.
That the old Lahug Airport was closed sometime in June
1992;
4.
That the price paid to the lot owners in the expropriation
case is found in the decision of the court; and
5.
That some properties were reconveyed by the MCIAA
because the previous owners were able to secure express waivers or
riders wherein the government agreed to return the properties should
the expansion of the Lahug Airport not materialize.
During trial, the Inocians adduced evidence which included the testimony of
Ricardo Inocian (Inocian) and Asterio Uy (Uy). Uy, an employee of the CAA, testified that
he was a member of the team which negotiated for the acquisition of certain lots in Lahug
for the proposed expansion of the Lahug Airport. He recalled that he acted as
the interpreter/spokesman of the team since he could speak the Cebuano dialect. He
stated that the other members of the team of negotiators were Atty. Pedro Ocampo, Atty.
Lansang, and Atty. Saligumba. He recounted that, in the course of the negotiation, their
team assured the landowners that their landholdings would be reconveyed to them in the
event the Lahug Airport would be abandoned or if its operation were transferred to
the Mactan Airport. Some landowners opted to sell, while others were of a different bent
owing to the inadequacy of the offered price.
Inocian testified that he and his mother, Isabel Lambaga, attended a meeting
called by the NAC team of negotiators sometime in 1947 or 1949 where he and the other
landowners were given the assurance that they could repurchase their lands at the same
price in the event the Lahug Airport ceases to operate. He further testified that they
rejected the NACs offer. However, he said that they no longer appealed the decree of
expropriation due to the repurchase assurance adverted to.
The MCIAA presented Michael Bacarizas (Bacarizas), who started working for
MCIAA as legal assistant in 1996. He testified that, in the course of doing research work on
the lots subject of Civil Case No. CEB-18370, he discovered that the same lots were
covered by the decision in Civil Case No. R-1881. He also found out that the said decision
did not expressly contain any condition on the matter of repurchase.

89

Ruling of the RTC

assurance, a demandable agreement of repurchase by itself, has been adequately

established.

On October 7, 1998, the RTC rendered a Decision in Civil Case No. CEB-18370, the
dispositive portion of which reads as follows:

On September 21, 2005, the MCIAA filed with Us a petition for review of the CAs Decision,
docketed as G.R. No. 168812.

WHEREFORE, in view of the foregoing, judgment is hereby

rendered directing defendant Mactan Cebu International Airport
Authority (MCIAA) to reconvey (free from liens and encumbrances) to
plaintiffs Ricardo Inocian, Olimpia E. Esteves, Emilia E. Bacalla, Restituta
E. Montana and Raul Inocian Lots No. 744-A, 745-A, 746, 762-A, 747,
761-A and to plaintiffs Aletha Suico Magat, Philip M. Suico, Doris S. dela
Cruz, James M. Suico, Edward M. Suico, Roselyn S. Lawsin, Rex M. Suico
and Kharla Suico-Gutierrez Lots No. 942 and 947, after plaintiffs shall
have paid MCIAA the sums indicated in the decision in Civil Case No. R1881. Defendant MCIAA is likewise directed to pay the aforementioned
plaintiffs the sum or P50,000.00 as and for attorneys fees and
P10,000.00 for litigation expenses.

G.R. No. 168770 (Ouano Petition)

Albert Chiongbians intervention should be, as

hereby DENIED for utter lack of factual basis.
With costs against defendant MCIAA.[10]

it is

Therefrom, MCIAA went to the CA on appeal, docketed as CA-G.R. CV No. 64356.

Ruling of the CA
On January 14, 2005, the CA rendered judgment for the Inocians, declaring them
entitled to the reconveyance of the questioned lots as the successors-in-interest of the
late Isabel Limbaga and Santiago Suico, as the case may be, who were the former
registered owners of the said lots. The decretal portion of the CAs Decision reads:
WHEREFORE, in view of the foregoing premises, judgment is hereby
rendered
by
us DISMISSING the
appeal
filed
in
this
case and AFFFIRMING the decision rendered by the court a quo on
October 7, 1998 in Civil Case No. CEB-18370.
SO ORDERED.
The CA, citing and reproducing excerpts from Heirs of Moreno,[11] virtually held
that the decision in Civil Case No. R-1881 was conditional, stating that the expropriation of
[plaintiff-appellees] lots for the proposed expansion of the Lahug Airport was ordered by
the CFI of Cebu under the impression that Lahug Airport would continue in
operation.[12] The condition, as may be deduced from the CFIs decision, was that should
MCIAA, or its precursor agency, discontinue altogether with the operation of Lahug
Airport, then the owners of the lots expropriated may, if so minded, demand of MCIAA to
make good its verbal assurance to allow the repurchase of the properties. To the CA, this

Soon after the MCIAA jettisoned the Lahug Airport expansion project, informal settlers
entered and occupied Lot No. 763-A which, before its expropriation, belonged to the
Ouanos. The Ouanos then formally asked to be allowed to exercise their right to
repurchase the aforementioned lot, but the MCIAA ignored the demand. On August 18,
1997, the Ouanos instituted a complaint before the Cebu City RTC against the Republic and
the MCIAA for reconveyance, docketed as Civil Case No. CEB-20743.
Answering, the Republic and MCIAA averred that the Ouanos no longer have
enforceable rights whatsoever over the condemned Lot No. 763-A, the decision in Civil
Case No. R-1881 not having found any reversionary condition.
Ruling of the RTC
By a Decision dated November 28, 2000, the RTC, Branch 57 in Cebu City ruled in
favor of the Ouanos, disposing as follows:
WHEREFORE, in the light of the foregoing, the Court hereby renders
judgment in favor of the plaintiffs, Anunciacion Vda. De Ouano, Mario
P. Ouano, Leticia Ouano Arnaiz and Cielo Ouano Martinez and against
the Republic of the Philippines and Mactan Cebu International Airport
Authority (MCIAA) to restore to plaintiffs, the possession and ownership
of their land, Lot No. 763-A upon payment of the expropriation price to
defendants; and
2. Ordering the Register of Deeds to effect the transfer of the Certificate
of Title from defendant Republic of the Philippines on Lot 763-A,
canceling TCT No. 52004 in the name of defendant Republic of the
Philippines and to issue a new title on the same lot in the names of
Anunciacion Vda. De Ouano, Mario P. Ouano, Leticia Ouano Arnaiz and
Cielo Ouano Martinez.
No pronouncement as to costs.[13]
Acting on the motion of the Republic and MCIAA for reconsideration, however, the RTC,
Branch 57 in Cebu City, presided this time by Judge Enriqueta L. Belarmino, issued, on
December 9, 2002, an Order[14] that reversed its earlier decision of November 28, 2000 and
dismissed the Ouanos complaint.
Ruling of the CA

90

In time, the Ouanos interposed an appeal to the CA, docketed as CA-G.R. CV No. 78027.
Eventually, the appellate court rendered a Decision[15] dated September 3, 2004, denying
the appeal, thus:

Whether or not the testimonial evidence of the petitioners proving the

promises, assurances and representations by the airport officials and
lawyers are inadmissbale under the Statute of Frauds.

WHEREFORE, premises considered, the Order dated December 9, 2002,

of the Regional Trial Court, 7th Judicial Region, Branch 57, Cebu City, in
Civil Case No. CEB-20743, is hereby AFFIRMED. No pronouncement as
to costs.

Whether or not under the ruling of this Honorable Court in the heirs of
Moreno Case, and pursuant to the principles enunciated therein,
petitioners herein are entitiled to recover their litigated property.
Reasons for Allowances of this Petition

SO ORDERED.

Explaining its case disposition, the CA stated that the decision in Civil Case No. R-1881 did
not state any condition that Lot No. 763-A of the Ouanosand all covered lots for that
matterwould be returned to them or that they could repurchase the same property if it
were to be used for purposes other than for the Lahug Airport. The appellate court also
went on to declare the inapplicability of the Courts pronouncement in MCIAA v. Court of
Appeals, RTC, Branch 9, Cebu City, Melba Limbago, et al.,[16] to support the Ouanos cause,
since the affected landowners in that case, unlike the Ouanos, parted with their property
not through expropriation but via a sale and purchase transaction.
The Ouanos filed a motion for reconsideration of the CAs Decision, but was
denied per the CAs May 26, 2005 Resolution.[17] Hence, they filed this petition in G.R. No.
168770.
The Issues
G.R. No. 168812
GROUNDS FOR ALLOWANCE OF THE PETITION
l.
THE ASSAILED ISSUANCES ILLEGALLY STRIPPED THE
REPUBLIC OF ITS ABSOLUTE AND UNCONDITIONAL TITLE TO THE
SUBJECT EXPROPRIATED PROPERTIES.
ll.
THE IMPUNGED DISPOSITIONS INVALIDLY OVERTURNED
THIS HONORABLE COURTS FINAL RULINGS IN FERY V. MUNICIPALITY
OF CABANATUAN, MCIAA V. COURT OF APPEALS AND REYES V.
NATIONAL HOUSING AUTHORITY.

Respondents did not object during trial to the admissibility of

petitioners testimonial evidence under the Statute of Frauds and have
thus waived such objection and are now barred from raising the same.
In any event, the Statute of Frauds is not applicable herein.
Consequently, petitioners evidence is admissible and should be duly
given weight and credence, as initially held by the trial court in its
original Decision.[19]

While their respective actions against MCIAA below ended differently, the Ouanos and the
Inocians proffered arguments presented before this Court run along parallel lines, both
asserting entitlement to recover the litigated property on the strength of the Courts ruling
in Heirs of Moreno. MCIAA has, however, formulated in its Consolidated Memorandum the
key interrelated issues in these consolidated cases, as follows:
I
WHETHER ABANDONMENT OF THE PUBLIC USE FOR WHICH THE
SUBJECT PROPERTIES WERE EXPROPRIATED ENTITLES PETITIONERS
OUANOS, ET AL. AND RESPONDENTS INOCIAN, ET AL. TO REACQUIRE
THEM.
II
WHETHER PETITIONERS OUANOS, ET AL. AND RESPONDENTS INOCIAN,
ET AL. ARE ENTITLED TO RECONVEYANCE OF THE SUBJECT PROPERTIES
SIMPLY ON THE BASIS OF AN ALLEGED VERBAL PROMISE OR
ASSURANCE OF SOME NAC OFFICIALS THAT THE SUBJECT PROPERTIES
WILL BE RETUNRED IF THE AIRPORT PROJECT WOULD BE ABANDONED.

The Courts Ruling

lll. THE COURT OF APPEALS GRAVELY ERRED IN APPLYING THIS
HONORABLE COURTS RULING IN MORENO, ALBEIT IT HAS NOT YET
ATTAINED FINALITY.[18]
G.R. No. 168770
Questions of law presented in this Petition

The Republic and MCIAAs petition in G.R. No. 168812 is bereft of merit, while the Ouano
petition in G.R. No. 168770 is meritorious.
At the outset, three (3) fairly established factual premises ought to be emphasized:
First, the MCIAA and/or its predecessor agency had not actually used the lots subject of
the final decree of expropriation in Civil Case No. R-1881 for the purpose they were

91

originally taken by the government, i.e., for the expansion and development
of Lahug Airport.
Second, the Lahug Airport had been closed and abandoned. A significant portion
of it had, in fact, been purchased by a private corporation for development as a
commercial complex.[20]
Third, it has been preponderantly established by evidence that the NAC, through
its team of negotiators, had given assurance to the affected landowners that they would
be entitled to repurchase their respective lots in the event they are no longer used for
airport purposes.[21] No less than Asterio Uy, the Court noted in Heirs of Moreno, one of
the members of the CAA Mactan Legal Team, which interceded for the acquisition of the
lots for the Lahug Airports expansion, affirmed that persistent assurances were given to
the landowners to the effect that as soon as the Lahug Airport is abandoned or transferred
to Mactan, the lot owners would be able to reacquire their properties.[22] In Civil Case No.
CEB-20743, Exhibit G, the transcript of the deposition[23] of Anunciacion vda. de Ouano
covering the assurance made had been formally offered in evidence and duly considered
in the initial decision of the RTC Cebu City. In Civil Case No. CEB-18370, the trial court, on
the basis of testimonial evidence, and later the CA, recognized the reversionary rights of
the suing former lot owners or their successors in interest [24] and resolved the case
accordingly. In point with respect to the representation and promise of the government to
return the lots taken should the planned airport expansion do not materialize is what the
Court said in Heirs of Moreno, thus:
This is a difficult case calling for a difficult but just solution. To
begin with there exists an undeniable historical narrative that the
predecessors of respondent MCIAA had suggested to the landowners of
the properties covered by the Lahug Airport expansion scheme that
they could repurchase their properties at the termination of the
airports venue. Some acted on this assurance and sold their properties;
other landowners held out and waited for the exercise of eminent
domain to take its course until finally coming to terms with respondents
predecessors that they would not appeal nor block further judgment of
condemnation if the right of repurchase was extended to them. A
handful failed to prove that they acted on such assurance when they
parted with ownership of their land.[25] (Emphasis supplied; citations
omitted.)
For perspective, Heirs of Morenolater followed by MCIAA v. Tudtud (Tudtud)[26] and the
consolidated cases at baris cast under the same factual setting and centered on the
expropriation of privately-owned lots for the public purpose of expanding
the Lahug Airport and the alleged promise of reconveyance given by the negotiating NAC
officials to the private lot owners. All the lots being claimed by the former owners or
successors-in-interest of the former owners in the Heirs of Moreno, Tudtud,and the
present cases were similarly adjudged condemned in favor of the Republic in Civil Case No.
R-1881. All the claimants sought was or is to have the condemned lots reconveyed to them
upon the payment of the condemnation price since the public purpose of

the expropriation was never met. Indeed, the expropriated lots were never used and
were, in fact, abandoned by the expropriating government agencies.
In all then, the issues and supporting arguments presented by both sets of
petitioners in these consolidated cases have already previously been passed upon,
discussed at length, and practically peremptorily resolved in Heirs of Moreno and the
November 2008 Tudtud ruling. The Ouanos, as petitioners in G.R. No. 168770, and the
Inocians, as respondents in G.R. No. 168812, are similarly situated as the heirs
of Moreno in Heirs of Moreno and Benjamin Tudtud in Tudtud. Be that as it may, there is
no reason why the ratio decidendi in Heirs of Moreno and Tudtud should not be made to
apply to petitioners Ouanos and respondents Inocians such that they shall be entitled to
recover their or their predecessors respective properties under the same manner and
arrangement as the heirs of Moreno and Tudtud. Stare decisis et non quieta movere (to
adhere to precedents, and not to unsettle things which are established).[27]
Just like in Tudtud and earlier in Heirs of Moreno, MCIAA would foist the theory that the
judgment of condemnation in Civil Case No. R-1881 was without qualification and was
unconditional. It would, in fact, draw attention to the fallo of the expropriation courts
decision to prove that there is nothing in the decision indicating that the government gave
assurance or undertook to reconvey the covered lots in case the Lahug airport expansion
project is aborted. Elaborating on this angle, MCIAA argues that the claim of the Ouanos
and the Inocians regarding the alleged verbal assurance of the NAC negotiating team that
they can reacquire their landholdings is barred by the Statute of Frauds.[28]
Under the rule on the Statute of Frauds, as expressed in Article 1403 of the Civil
Code, a contract for the sale or acquisition of real property shall be unenforceable unless
the same or some note of the contract be in writing and subscribed by the party charged.
Subject to defined exceptions, evidence of the agreement cannot be received without the
writing, or secondary evidence of its contents.
MCIAAs invocation of the Statute of Frauds is misplaced primarily because the
statute applies only to executory and not to completed, executed, or partially
consummated contracts.[29] Carbonnel v. Poncio, et al., quoting Chief Justice Moran,
explains the rationale behind this rule, thusly:
x x x The reason is simple. In executory contracts there is a wide field for
fraud because unless they may be in writing there is no palpable
evidence of the intention of the contracting parties.The statute has
been precisely been enacted to prevent fraud. x x x However, if a
contract has been totally or partially performed, the exclusion of parol
evidence would promote fraud or bad faith, for it would enable the
defendant to keep the benefits already derived by him from the
transaction in litigation, and at the same time, evade the obligations,
responsibilities or liabilities assumed or contracted by him
thereby.[30] (Emphasis in the original.)

Analyzing the situation of the cases at bar, there can be no serious objection to
the proposition that the agreement package between the government and the private lot

92

owners was already partially performed by the government through the acquisition of the
lots for the expansion of the Lahug airport. The parties, however, failed to accomplish the
more important condition in the CFI decision decreeing the expropriation of the lots
litigated upon: the expansion of the Lahug Airport. The projectthe public purpose behind
the forced property takingwas, in fact, never pursued and, as a consequence, the lots
expropriated were abandoned. Be that as it may, the two groups of landowners can, in an
action to compel MCIAA to make good its oral undertaking to allow repurchase, adduce
parol evidence to prove the transaction.
At any rate, the objection on the admissibility of evidence on the basis of the
Statute of Frauds may be waived if not timely raised. Records tend to support the
conclusion that MCIAA did not, as the Ouanos and the Inocians posit, object to the
introduction of parol evidence to prove its commitment to allow the former landowners to
repurchase their respective properties upon the occurrence of certain events.
In a bid to deny the lot owners the right to repurchase, MCIAA, citing
cases,[31] points to the dispositive part of the decision in Civil Case R-1881 which, as
couched, granted the Republic absolute title to the parcels of land declared expropriated.
The MCIAA is correct about the unconditional tone of the dispositive portion of the
decision, but that actuality would not carry the day for the agency. Addressing the matter
of the otherwise absolute tenor of the CFIs disposition in Civil Case No. R-1881, the Court,
in Heirs of Moreno, after taking stock of the ensuing portion of the body of the CFIs
decision, said:
As for the public purpose of the expropriation proceeding, it cannot
now be doubted. Although Mactan Airport is being constructed, it does
not take away the actual usefulness and importance of
the Lahug Airport: it is handling the air traffic of both civilian and
military. From it aircrafts fly to Mindanao and Visayas and pass thru it
on their flights to the North and Manila. Then, no evidence was adduced
to show how soon is the Mactan Airport to be placed in operation and
whether the Lahug Airport will be closed immediately thereafter. It is up
to the other departments of the Government to determine said
matters. The Court cannot substitute its judgments for those of the said
departments or agencies. In the absence of such showing, the court will
presume that the Lahug Airport will continue to be in
operation.[32] (Emphasis supplied.)

We went on to state as follows:

While the trial court in Civil Case No. R-1881 could have simply
acknowledged the presence of public purpose for the exercise of
eminent domain regardless of the survival of the Lahug Airport, the trial
court in its Decision chose not to do so but instead prefixed its finding of
public purpose upon its understanding that Lahug Airport will continue
to be in operation. Verily, these meaningful statements in the body of
the Decision warrant the conclusion that the expropriated properties

would remain to be so until it was confirmed that Lahug Airport was no

longerin operation. This inference further implies two (2) things: (a)
after the Lahug Airport ceased its undertaking as such and the
expropriated lots were not being used for any airport expansion project,
the rights vis--vis the expropriated lots x x x as between the State and
their former owners, petitioners herein, must be equitably adjusted;
and (b) the foregoing unmistakable declarations in the body of
the Decision should merge with and become an intrinsic part of
the fallo thereof which under the premises is clearly inadequate since
the dispositive portion is not in accord with the findings as contained in
the body thereof.[33]
Not to be overlooked of course is what the Court said in its Resolution disposing
of MCIAAs motion to reconsider the original ruling in Heirs of Moreno. In that resolution,
We stated that the fallo of the decision in Civil Case R-1881 should be viewed and
understood in connection with the entire text, which contemplated a return of the
property taken if the airport expansion project were abandoned. For ease of reference,
following is what the Court wrote:
Moreover, we do not subscribe to the [MCIAAs] contention
that since the possibility of the Lahug Airports closure was actually
considered by the trial court, a stipulation on reversion or repurchase
was so material that it should not have been discounted by the court a
quo in its decision in Civil Case No. R-1881, if, in fact, there was one. We
find it proper to cite, once more, this Courts ruling that the fallo of the
decision in Civil Case No. R-1881 must be read in reference to the other
portions of the decision in which it forms a part. A reading of the Courts
judgment must not be confined to the dispositive portion alone; rather
it should be meaningfully construed in unanimity with the ratio
decidendi thereof to grasp the true intent and meaning of a decision.[34]
The Court has, to be sure, taken stock of Fery v. Municipality of Cabanatuan,[35] a case
MCIAA cites at every possible turn, where the Court made these observations:
If, for example, land is expropriated for a particular purpose,
with the condition that when that purpose is ended or abandoned the
property shall return to its former owner, then of course, when the
purpose is terminated or abandoned, the former owner reacquires the
property so expropriated. x x x If, upon the contrary, however the
decree of expropriation gives to the entity a fee simple title, then, of
course, the land becomes the absolute property of the expropriator x x
x and in that case the non-user does not have the effect of defeating
the title acquired by the expropriation proceedings x x x.
Fery notwithstanding, MCIAA cannot really rightfully say that it has absolute title to the
lots decreed expropriated in Civil Case No. R-1881. The correct lesson of Feryis captured by
what the Court said in that case, thus: the government acquires only such rights in
expropriated parcels of land as may be allowed by the character of its title over the

93

properties. In light of our disposition in Heirs of Moreno and Tudtud, the statement
immediately adverted to means that in the event the particular public use for which a
parcel of land is expropriated is abandoned, the owner shall not be entitled to recover or
repurchase it as a matter of right, unless such recovery or repurchase is expressed in
or irresistibly deducible from the condemnation judgment. But as has been determined
below, the decision in Civil Case No. R-1881 enjoined MCIAA, as a condition of approving
expropriation, to allow recovery or repurchase upon abandonment of the Lahug airport
project. To borrow from our underlying decision in Heirs of Moreno, [n]o doubt, the return
or repurchase of the condemned properties of petitioners could readily be justified as the
manifest legal effect of consequence of the trial courts underlying presumption that Lahug
Airport will continue to be in operation when it granted the complaint for eminent domain
and the airport discontinued its activities.[36]
Providing added support to the Ouanos and the Inocians right to repurchase is what
in Heirs of Moreno was referred to as constructive trust, one that is akin to the implied
trust expressed in Art. 1454 of the Civil Code,[37] the purpose of which is to prevent unjust
enrichment.[38] In the case at bench, the Ouanos and the Inocians parted with their
respective lots in favor of the MCIAA, the latter obliging itself to use the realties for the
expansion of Lahug Airport; failing to keep its end of the bargain, MCIAA can be compelled
by the former landowners to reconvey the parcels of land to them, otherwise, they would
be denied the use of their properties upon a state of affairs that was not conceived nor
contemplated when the expropriation was authorized. In effect, the government merely
held the properties condemned in trust until the proposed public use or purpose for which
the lots were condemned was actually consummated by the government. Since the
government failed to perform the obligation that is the basis of the transfer of the
property, then the lot owners Ouanos and Inocians can demand the reconveyance of their
old properties after the payment of the condemnation price.
Constructive trusts are fictions of equity that courts use as devices to remedy any situation
in which the holder of the legal title, MCIAA in this case, may not, in good conscience,
retain the beneficial interest. We add, however, as in Heirs of Moreno, that the party
seeking the aid of equitythe landowners in this instance, in establishing the trustmust
himself do equity in a manner as the court may deem just and reasonable.
The Court, in the recent MCIAA v. Lozada, Sr., revisited and abandoned the Fery ruling that
the former owner is not entitled to reversion of the property even if the public purpose
were not pursued and were abandoned, thus:
On this note, we take this opportunity to revisit our ruling
in Fery, which involved an expropriation suit commenced upon parcels
of land to be used as a site for a public market. Instead of putting up a
public market, respondent Cabanatuan constructed residential houses
for lease on the area. Claiming that the municipality lost its right to the
property taken since it did not pursue its public purpose, petitioner Juan
Fery, the former owner of the lots expropriated, sought to recover his
properties. However, as he had admitted that, in 1915,
respondent Cabanatuan acquired a fee simple title to the lands in
question, judgment was rendered in favor of the municipality, following

American jurisprudence, particularly City of Fort Wayne v. Lake Shore &

M.S. RY. Co., McConihay v. Theodore Wright, and Reichling v. Covington
Lumber Co., all uniformly holding that the transfer to a third party of the
expropriated real property, which necessarily resulted in the
abandonment of the particular public purpose for which the property
was taken, is not a ground for the recovery of the same by its previous
owner, the title of the expropriating agency being one of fee simple.
Obviously, Fery was not decided pursuant to our now sacredly
held constitutional right that private property shall not be taken for
public use without just compensation. It is well settled that the taking of
private property by the Governments power of eminent domain is
subject to two mandatory requirements: (1) that it is for a particular
public purpose; and (2) that just compensation be paid to the property
owner. These requirements partake of the nature of implied conditions
that should be complied with to enable the condemnor to keep the
property expropriated.
More particularly, with respect to the element of public use,
the expropriator should commit to use the property pursuant to the
purpose stated in the petition for expropriation filed, failing which, it
should file another petition for the new purpose. If not, it is then
incumbent upon the expropriator to return the said property to its
private owner, if the latter desires to reacquire the same. Otherwise,
the judgment of expropriation suffers an intrinsic flaw, as it would lack
one indispensable element for the proper exercise of the power of
eminent domain, namely, the particular public purpose for which the
property will be devoted. Accordingly, the private property owner
would be denied due process of law, and the judgment would violate
the property owners right to justice, fairness, and equity.
In light of these premises, we now expressly hold that the
taking of private property, consequent to the Governments exercise of
its power of eminent domain, is always subject to the condition that the
property be devoted to the specific public purpose for which it was
taken. Corollarily, if this particular purpose or intent is not initiated or
not at all pursued, and is peremptorily abandoned, then the former
owners, if they so desire, may seek the reversion of the property,
subject to the return of the amount of just compensation received. In
such a case, the exercise of the power of eminent domain has become
improper for lack of the required factual justification.[39] (Emphasis
supplied.)

Clinging to Fery, specifically the fee simple concept underpinning it, is no longer
compelling, considering the ensuing inequity such application entails. Too, the Court
resolved Fery not under the cover of any of the Philippine Constitutions, each decreeing
that private property shall not be taken for public use without just compensation. The twin

94

elements of just compensation and public purpose are, by themselves, direct limitations to
the exercise of eminent domain, arguing, in a way, against the notion of fee simple title.
The fee does not vest until payment of just compensation.[40]
In esse, expropriation is forced private property taking, the landowner being really without
a ghost of a chance to defeat the case of the expropriating agency. In other words, in
expropriation, the private owner is deprived of property against his will. Withal, the
mandatory requirement of due process ought to be strictly followed, such that the state
must show, at the minimum, a genuine need, an exacting public purpose to take private
property, the purpose to be specifically alleged or least reasonably deducible from the
complaint.
Public use, as an eminent domain concept, has now acquired an expansive meaning to
include any use that is of usefulness, utility, or advantage, or what is productive of general
benefit [of the public].[41] If the genuine public necessitythe very reason or condition as it
wereallowing, at the first instance, the expropriation of a private land ceases or
disappears, then there is no more cogent point for the governments retention of the
expropriated land. The same legal situation should hold if the government devotes the
property to another public use very much different from the original or deviates from the
declared purpose to benefit another private person. It has been said that the direct use by
the state of its power to oblige landowners to renounce their productive possession to
another citizen, who will use it predominantly for that citizens own private gain, is
offensive to our laws.[42]
A condemnor should commit to use the property pursuant to the purpose
stated in the petition for expropriation, failing which it should file another petition for
the new purpose. If not, then it behooves the condemnor to return the said property
to its private owner, if the latter so desires. The government cannot plausibly keep
the property it expropriated in any manner it pleases and, in the process, dishonor
the judgment of expropriation. This is not in keeping with the idea of fair play,
The notion, therefore, that the government, via expropriation proceedings,
acquires unrestricted ownership over or a fee simple title to the covered land, is no longer
tenable. We suggested as much in Heirs of Moreno and in Tudtud and more recently
in Lozada, Sr. Expropriated lands should be differentiated from a piece of land, ownership
of which was absolutely transferred by way of an unconditional purchase and sale contract
freely entered by two parties, one without obligation to buy and the other without the
duty to sell. In that case, the fee simple concept really comes into play. There is really no
occasion to apply the fee simple concept if the transfer is conditional. The taking of a
private land in expropriation proceedings is always conditioned on its continued devotion
to its public purpose. As a necessary corollary, once the purpose is terminated or
peremptorily abandoned, then the former owner, if he so desires, may seek its reversion,
subject of course to the return, at the very least, of the just compensation received.
To be compelled to renounce dominion over a piece of land is, in itself, an
already bitter pill to swallow for the owner. But to be asked to sacrifice for the common
good and yield ownership to the government which reneges on its assurance that the
private property shall be for a public purpose may be too much. But it would be worse if
the power of eminent domain were deliberately used as a subterfuge to benefit another
with influence and power in the political process, including development firms. The

mischief thus depicted is not at all far-fetched with the continued application of Fery. Even
as the Court deliberates on these consolidated cases, there is an uncontroverted allegation
that the MCIAA is poised to sell, if it has not yet sold, the areas in question to Cebu
Property Ventures, Inc. This provides an added dimension to abandon Fery.
Given the foregoing disquisitions, equity and justice demand the reconveyance
by MCIAA of the litigated lands in question to the Ouanos and Inocians. In the same token,
justice and fair play also dictate that the Ouanos and Inocian return to MCIAA what they
received as just compensation for the expropriation of their respective properties plus
legal interest to be computed from default, which in this case should run from the time
MCIAA complies with the reconveyance obligation.[43] They must likewise pay MCIAA the
necessary expenses it might have incurred in sustaining their respective lots and the
monetary value of its services in managing the lots in question to the extent that they, as
private owners, were benefited thereby.
In accordance with Art. 1187 of the Civil Code on mutual compensation, MCIAA
may keep whatever income or fruits it may have obtained from the parcels of land
expropriated. In turn, the Ouanos and Inocians need not require the accounting of
interests earned by the amounts they received as just compensation.[44]
Following Art. 1189 of the Civil Code providing that [i]f the thing is improved by
its nature, or by time, the improvement shall inure to the benefit of the creditor x x x,
the Ouanos and Inocians do not have to settle the appreciation of the values of their
respective lots as part of the reconveyance process, since the value increase is merely the
natural effect of nature and time.
Finally, We delete the award of PhP 50,000 and PhP 10,000, as attorneys fees
and litigation expenses, respectively, made in favor of the Inocians by the Cebu City RTC in
its judgment in Civil Case No. CEB-18370, as later affirmed by the CA. As a matter of sound
policy, no premium should be set on the right to litigate where there is no doubt about
the bona fides of the exercise of such right,[45] as here, albeit the decision of MCIAA to
resist the former landowners claim eventually turned out to be untenable.
WHEREFORE, the petition in G.R. No. 168770 is GRANTED. Accordingly, the CA
Decision dated September 3, 2004 in CA-G.R. CV No. 78027 isREVERSED and SET ASIDE.
Mactan-Cebu International Airport Authority is ordered to reconvey subject Lot No. 763-A
to petitioners Anunciacion vda. de Ouano, Mario P. Ouano, Leticia Ouano Arnaiz, and Cielo
Ouano Martinez. The Register of Deeds of Cebu City is ordered to effect the necessary
cancellation of title and transfer it in the name of the petitioners within fifteen (15) days
from finality of judgment.
The petition of the Mactan-Cebu International Airport Authority in G.R. No.
168812 is DENIED, and the CAs Decision and Resolution dated January 14, 2005 and June
29, 2005, respectively, in CA-G.R. CV No. 64356 are AFFIRMED, except insofar as they
awarded attorneys fees and litigation expenses that are herebyDELETED. Accordingly,
Mactan-Cebu International Airport Authority is ordered to reconvey to respondents
Ricardo L. Inocian, Olympia E. Esteves, Emilia E. Bacalla, Restituta E. Montana, and Raul L.
Inocian the litigated Lot Nos. 744-A, 745-A, 746, 762-A, 747, and 761-A; and to
respondents Aletha Suico Magat, Philip M. Suico, Dolores S. dela Cruz, James M. Suico,

95

Edward M. Suico, Roselyn S. Lawsin, Rex M. Suico, and Kharla Suico-Gutierrez the litigated
Lot Nos. 942 and 947. The Register of Deeds of Cebu City is ordered to effect the necessary
cancellation of title and transfer it in the name of respondents within a period of fifteen
(15) days from finality of judgment.
The foregoing dispositions are subject to QUALIFICATIONS, to apply to these
consolidated petitions, when appropriate, as follows:

BERSAMIN, J.:

By petition for review on certiorari, the petitioners appeal the adverse decision
promulgated by the Court of Appeals (CA) on March 31, 2000, [1] and the resolution issued
on August 28, 2002 (denying their motion for reconsideration).[2]
Antecedents

(1) Petitioners Ouano, et al. in G.R. No. 168770 and respondents Ricardo L
Inocian, et al. in G.R. No. 168812 are ordered to return to the MCIAA the just
compensation they or their predecessors-in-interest received for the expropriation of their
respective lots as stated in Civil Case No. R-1881, within a period of sixty (60) days from
finality of judgment;
(2) The MCIAA shall be entitled to RETAIN whatever fruits and income it may
have obtained from the subject expropriated lots without any obligation to refund the
same to the lot owners; and
(3) Petitioners Ouano, et al. in G.R. No. 168770 and respondents Ricardo L.
Inocian, et al. in G.R. No. 168812 shall RETAIN whatever interests the amounts they
received as just compensation may have earned in the meantime without any obligation
to refund the same to MCIAA.
SO ORDERED.
Republic of the Philippines
Supreme Court
Manila

EMILIANA G. PEA,
AMELIA C. MAR, and
CARMEN REYES, Petitioners,

-versus -

THIRD DIVISION
G.R. No. 155227-28
Present:
CARPIO MORALES, Chairperson,
BRION,
PERALTA,*
BERSAMIN,
VILLARAMA, JR., JJ.

SPOUSES ARMANDO TOLENTINO AND LETICIA

Promulgated:
TOLENTINO,
Respondents.
February 9, 2011
x-----------------------------------------------------------------------------------------x
DECISION

The petitioners are lessees of three distinct and separate parcels of land owned
by the respondents, located in the following addresses, to wit: Carmen Reyes, 1460
Velasquez, Tondo, Manila; for Amelia Mar, 479 Perla, Tondo, Manila; and for Emiliana Pea,
1461 Sta. Maria, Tondo, Manila.
Based on the parties oral lease agreements, the petitioners agreed to pay
monthly rents, pegged as of October 9, 1995 at the following rates, namely: for Carmen
Reyes, P570.00; for Amelia Mar, P840.00; and for Emiliana Pea, P480.00.
On August 15, 1995, the respondents wrote a demand letter to each of the petitioners,
informing that they were terminating the respective month-to-month lease contracts
effective September 15, 1995; and demanding that the petitioners vacate and remove
their houses from their respective premises, with warning that should they not heed the
demand, the respondents would charge them P3,000.00/month each as reasonable
compensation for the use and occupancy of the premises from October 1, 1995 until they
would actually vacate.
After the petitioners refused to vacate within the period allowed, the respondents filed
on October 9, 1995 three distinct complaints for ejectment against the petitioners in the
Metropolitan Trial Court (MeTC) of Manila. The three cases were consolidated upon the
respondents motion.
In their respective answers, the petitioners uniformly contended that the
respondents could not summarily eject them from their leased premises without
circumventing Presidential Decree (P.D.) No. 20 and related laws.
During the preliminary conference, the parties agreed on the following issues: [3]
1.

Whether or not each of the petitioners could be ejected on the

ground that the verbal contract of lease had expired; and

2.

Whether or not the reasonable compensation demanded by the

respondents was exorbitant or unconscionable.

Ruling of the MeTC

On May 17, 1996, the MeTC ruled in favor of the respondents,[4] viz:

96

Ruling of the RTC

WHEREFORE, judgment is rendered in favor of the plaintiff
spouses:
1. Ordering defendant Emiliana Pea in Civil Case No. 149598CV to immediately vacate the lot located at 1461 Sta. Maria, Tondo,
Manila, and surrender the possession thereof to the plaintiff spouses;
to pay the latter the amount of P2,000.00 a month as reasonable
compensation for the use and occupancy of the premises from 1
October 1995 until the same is finally vacated; to pay the plaintiff
spouses the amount of P5,000.00 as attorneys fees; and to pay the
costs of suit;

On appeal, the Regional Trial Court (RTC) modified the MeTCs decision,[5] viz:

2. Ordering the defendant Amelia Mar in Civil Case No.

149599-CV to immediately vacate the lot situated at 479 Perla St.,
Tondo, Manila, and surrender possession thereof to the plaintiff
spouses; to pay the latter the amount of P2,500.00 per month as
reasonable compensation for the use and occupancy of the premises
from 1 October 1995 until the same is finally vacated; to pay the
plaintiff spouses the amount of P5,000.00 as attorneys fees; and to pay
the costs of suit; and

WHEREFORE, premises considered, judgment is hereby rendered

modifying the decision appealed from as follows:
a. Defendants having stayed in the leased premises for not less
than thirty (30) years, instead of being on a month-to-month basis, the
lease is fixed for a term of two (2) years reckoned from the date of this
decision.
b. Upon expiration of the term of the lease, defendants shall
demolish their respective houses at their own expense and vacate the
leased premises;
c. The lease being covered by the Rent Control Law, defendants
shall continue to pay the old monthly rental to be gradually increased in
accordance with said law;
d. Both parties shall pay their respective counsels the required
attorney's fees; and
e. To pay the costs of the suit.
SO ORDERED.

3. Ordering the defendant Carmen Reyes in Civil Case No.

149601-CV to immediately vacate the lot with address at 1460
Velasquez Street, Tondo, Manila, and surrender possession thereof to
the plaintiff spouses; to pay the latter the amount of P2,0500.00 a
month as reasonable compensation for the use and occupancy of the
leased premises from 1 October 1995 until the same is finally vacated;
to pay the plaintiff-spouses the amount of P5,000.00 as attorneys fees;
and to pay the costs of suit; and

The RTC affirmed the MeTCs holding that the leases expired at the end of every
month, upon demand to vacate by the respondents; but decreed based on the authority
of the court under Article 1687 of the Civil Code to fix a longer term that the leases were
for two years reckoned from the date of its decision, unless extended by the parties
pursuant to the law and in keeping with equity and justice, considering that the
respondents had allowed the petitioners to construct their own houses of good materials
on the premises, and that the petitioners had been occupants for over 30 years.

SO ORDERED.

Ruling of the CA

The MeTC explained in its decision:

Both parties appealed by petition for review.[6]

Defendants themselves categorically state that the rentals on

the respective lots leased to them were paid every month. xxx Pertinent
to the cases, thus, is the Supreme Court ruling in the case of Acab, et. al.
vs Court of Appeals (G.R. No. 112285, 21 February 1995) that lease
agreements with no specified period, but in which rentals are paid
monthly, are considered to be on a month-to-month basis. They are for
a definite period and expire after the last day of any given thirty day
period of lease, upon proper demand and notice of lessor to vacate, and
in which case, there is sufficient cause for ejectment under Sec. 5(f) of
Batas Pambansa 877, that is, the expiration of the period of the lease
contract.

The petitioners petition for review was docketed as C.A.-G.R. SP NO. 44172; that
of the respondents was docketed as C.A.-G.R. SP No. 44192. Nonetheless, the separate
appeals were consolidated on November 20, 1997.[7]
On March 31, 2000, the CA promulgated its decision,[8] thus:
WHEREFORE, judgment is rendered SETTING ASIDE the decision
of the RTC, Branch 26, Manila and REINSTATING the decision of the
MTC,
Branch
3,
Manila
with
the
modification that the defendants shall pay their respective agreed renta
ls which may be gradually increased in accordance with the Rent Contro
l Law for the use and occupancy of the premises from 1 October 1995
until the same is finally vacated.

97

SO ORDERED.

For the enlightenment of the petitioners in order to dispel their confusion, the following
brief review of the rental laws that came after P.D. 20 and B.P. Blg. 25 is helpful.

The petitioners sought reconsideration, but the CA denied their motion for
reconsideration on August 28, 2002, and granted the respondents motion for execution
pending appeal and ordered the MeTC to issue a writ of execution to enforce the
judgment pending appeal.
Issues
Hence, this appeal to the Court, whereby the petitioners urge the following grounds, [9] to
wit:
I.
THE EJECTMENT OF HEREIN PETITIONERS FROM THE SAID LEASED
PREMISES IS VIOLATIVE OF P.D. NO. 20
II. HEREIN PETITIONER CANNOT BE EJECTED FROM THE SUBJECT
LEASED PROPERTY WITHOUT CLEARLY VIOLATING THE URBAN
LAND REFORM CODE (P.D. 1517) AND R.A. 3516.

B.P. Blg. 25 remained in force for five years, after which P.D. 1912[15] and B.P. Blg.
867 were enacted to extend the effectivity of B.P. Blg. 25 for eight months and six months,
respectively. When the extension of B.P. Blg. 25 ended on June 30, 1985, a new rental
law, B.P. Blg. 877,[16] was enacted on July 1, 1985.B.P. Blg. 877, although initially effective
only until December 31, 1987, came to be extended up to December 31, 1989 by Republic
Act No. 6643.[17] Subsequently, Congress passed R.A. No. 7644[18] to further extend the
effectivity of B.P. Blg. 877 by three years. Finally, R.A. No. 8437[19] extended the rent
control period provided in B.P. Blg. 877 from January 1, 1998 up to December 31, 2001.
It is clear, therefore, that B.P. Blg. 877 was the controlling rental law when the
complaints against the petitioners were filed on October 9, 1995.

Ruling of the Court

We note that on January 1, 2002, R.A. No. 9161[20] took effect. Its Section 7(e) provided
that the expiration of the period of the lease contract was still one of the grounds for
judicial ejectment. Also, its Section 10 provided for the suspension of paragraph 1 of
Article 1673 of the Civil Code, which was similar to Section 6 ofB.P. Blg. 877, quoted
hereunder:

1.
Were the contracts of lease
for an indefinite period?

Sec. 6 Application of the Civil Code and Rules of Court of the

Philippines Except when the lease is for a definite period, the provisions
of paragraph (1) of Article 1673 of the Civil Codeof the Philippines,
insofar as they refer to residential units covered by this Act shall be
suspended during the effectivity of this Act, but other provisions of
the Civil Code and the Rules of Court on lease contracts, insofar as they
are not in conflict with the provisions of the Act shall apply.

The petition lacks merit.

[10]

The petitioners contend that their lease contracts were covered by P.D. No. 20, which
suspended paragraph 1 of Article 1673,[11] Civil Code; that as a result, the expiration of the
period of their leases was no longer a valid ground to eject them; and that their leases
should be deemed to be for an indefinite period.
In refutation, the respondents argue that P.D. 20 suspended only Article 1673, not Article
1687,[12] Civil Code; that under Article 1687, a lease on a month-to-month basis was a lease
with a definite period; and that the petitioners could be ejected from the leased premises
upon the expiration of the definite period, particularly as a demand to that effect was
made.
The petitioners contention is erroneous.
First of all, the petitioners reliance on P.D. 20 is futile and misplaced because that law had
no application to their cause. They ignored that Batas Pambansa Blg. 25,[13] approved
on April 10, 1979 and effective immediately, had expressly repealed P.D. 20 pursuant to its
Section 10.[14]

In several rulings,[21] the Court held that Section 6 of B.P. Blg. 877 did not suspend the
effects of Article 1687 of the Civil Code; and that the only effect of the suspension of
paragraph 1, Article 1673 of the Civil Code was that, independently of the grounds for
ejectment enumerated in B.P. Blg. 877, the owner/lessor could not eject the tenant by
reason of the expiration of the period of lease as fixed or determined under Article 1687 of
the Civil Code. Consequently, the determination of the period of the lease could still be
made in accordance with Article 1687.
Under Section 5 (f) of B.P. Blg. 877,[22] the expiration of the period of the lease is among
the grounds for judicial ejectment of a lessee. In this case, because no definite period was
agreed upon by the parties, their contracts of lease being oral, the leases were deemed to
be for a definite period, considering that the rents agreed upon were being paid monthly,
and terminated at the end of every month, pursuant to Article 1687.[23] In addition, the
fact that the petitioners were notified of the expiration of the leases effective September
15, 1995 brought their right to stay in their premises to a definite end as of that date. [24]
2
May petitioners validly raise their
alleged rights under P.D. 1517, R.A. 3516

98

and P.D. 2016 for the first time on appeal?

The petitioners contend that the decisions of the MeTC, RTC, and CA were
contrary to law; that they held the right of first refusal to purchase their leased premises
pursuant to Sections 6 of P.D. 1517,[25] because they had resided on the leased lots for
almost 40 years, even before the respondents purchased the properties from the former
owners, and because they had erected their own apartments on the leased lots; that
under Section 5 of R.A. No. 3516,[26] a lessor was prohibited from selling the leased
premises to any person other than his lessee, without securing the latters written
renunciation of his right of first refusal to purchase the leased property; and that Section 2
of P.D. 2016[27] likewise protected them.
The respondents counter that the petitioners could not validly raise the applicability of the
cited laws for the first time in this Court, without violating their right to due process.
In reply, the petitioners posit that the provisions of P.D. 1517 and R.A. No. 3516, although
cited for the first time only on appeal, were always presumed to be part of their
affirmative or special defenses; that the lower courts were bound to take judicial notice of
and should render decisions consistent with said provisions of law; that the Court was also
clothed with ample authority to review matters even if not assigned as errors on appeal if
it found that their consideration was necessary to arrive at a just determination of a case;
and that Section 8 of Rule 51 of the Rules of Court authorizes the Court to consider and
resolve a plain error, although not specifically assigned, for, otherwise, substance may be
sacrificed for technicalities.
We cannot side with the petitioners.
Firstly, the petitioners appear to have known of their supposed right of first refusal even
before the respondents came to acquire the leased premises by purchase. They implied so
in their petition for review filed on May 30, 1997 in the CA:[28]
xxx It must also be borne in mind herein that the said petitioners had
started occupying the said property even before the same was
purchased by the herein private respondents. In fact, the said sale
should even be considered as illegal if not null and void from the very
beginning because the herein petitioners were not even properly
informed of the said sale considering that under the Urban Land Reform
Code they even have the right of first refusal over the said property.
The public respondent should also consider the said fact in resolving to
give a longer period of lease to the herein petitioners and certainly not
for two (2) years only. Of course it would be a different matter if the
public respondent himself (RTC) had at least convinced if not goaded
the herein private respondents to compensate the petitioners for the
value of the improvements introduced on the said leased premises in
the interest of equity, fairness and justice. We submit to this Honorable
Court that the herein petitioners should be allowed to enjoy their said
improvements for a period of at least five (5) years before they can be
ejected from the said leased premises.

Yet, the petitioners did not invoke their supposed right of first refusal from the
time when the respondents filed their complaints for ejectment against them onOctober
9, 1995 until they brought the present recourse to this Court. Neither did they offer any
explanation for their failure to do so. It is notable that the only defense they raised is that
their eviction from the premises on the sole ground of expiration of the lease contract
violated R.A. No. 9161.
Moreover, the petitioners did not also assert their supposed right of first refusal
despite the respondents informing them (through their position paper filed in the MeTC
on March 21, 1996)[29] that they had terminated the petitioners leases because they were
intending to sell the premises to a third person. In fact, as the records bear out, the only
reliefs the petitioners prayed for in the MTC, RTC, and CA were the extension of their
leases, and the reimbursement by the respondents of the values of their
improvements.[30] It is inferable from the petitioners silence, therefore, that they had
neither the interest nor the enthusiasm to assert the right of first refusal.
Secondly, the petitioners are precluded from invoking their supposed right of first
refusal at this very late stage after failing to assert it within a reasonable time from the
respondents purchase of the respective properties where their premises were respectively
located. The presumption that they had either abandoned or declined to assert their rights
becomes fully warranted.[31]
Thirdly, it is clear that the petitioners are changing their theory of the case on
appeal. That change is impermissible on grounds of its elemental unfairness to the adverse
parties, who would now be forced to adapt to the change and to incur additional expense
in doing so. Besides, such a change would effectively deprive the lower courts of the
opportunity to decide the merits of the case fairly. It is certainly a basic rule in appellate
procedure that the trial court should be allowed themeaningful opportunity not only to
consider and pass upon all the issues but also to avoid or correct any alleged errors before
those issues or errors become the basis for an appeal.[32] In that regard, the Court has
observed in Carantes v. Court of Appeals:[33]
The settled rule is that defenses not pleaded in the answer may not be
raised for the first time on appeal. A party cannot, on appeal, change
fundamentally the nature of the issue in the case. 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.
Indeed, the settled rule in this jurisdiction, according to Mon v. Court of
Appeals,[34] is that a party cannot change his theory of the case or his cause of action on
appeal. This rule affirms that courts of justice have no jurisdiction or power to decide a
question not in issue. Thus, a judgment that goes beyond the issues and purports to
adjudicate something on which the court did not hear the parties is not only irregular but
also extrajudicial and invalid.[35] The legal theory under which the controversy
was heard and decided in the trial court should be the same theory under which
the review on appeal is conducted. Otherwise, prejudice will result to the adverse

99

party. We stress that points of law, theories, issues, and arguments not adequately
brought to the attention of the lower court will not be ordinarily considered by a
reviewing court, inasmuch as they cannot be raised for the first time on appeal. [36] This
would be offensive to the basic rules of fair play, justice, and due process. [37]
Lastly, the issue of whether the leased premises were covered by P. D. 1517 or not is truly
a factual question that is properly determined by the trial court, not by this Court due to
its not being a trier of facts.
3
CAs reinstatement of MeTCs decision
on the ejectment of petitioners is sustained,
subject to modification on rentals

Although the CA correctly reinstated the MeTCs decision as far as it ordered the
petitioners ejectment from the leased premises, we cannot uphold its modification by
requiring the petitioners instead to pay their respective agreed rentals which shall be
gradually increased in accordance with the Rent Control Law for the use and occupancy of
the premises from 1 October 1995 until the same is finally vacated without any elucidation
of the reasons for ordering the payment of agreed rentals for the use and occupancy of
the premises in lieu of the MeTCs requiring the petitioners to pay reasonable
compensation.
It is true that the MeTC had not also given any justification for fixing reasonable
compensation in the respective amounts found in the dispositive portion of its decision,
instead of rentals. However, we discern that the MeTC had taken off from the demand
letters of the respondents to each of the petitioners, which included the warning to them
that should they refuse to vacate as demanded they would each be
charged P3,000.00/month as reasonable compensation for the use and occupancy of the
premises from October 1, 1995 until they would actually vacate. We opt not to disturb the
MeTCs holding on reasonable compensation, in lieu of agreed rentals, considering that the
petitioners did not raise any issue against it, and considering further that the CA did not
find any error committed by the MeTC as to that. At any rate, it is worthy to note that the
award of reasonable compensation, not rentals, is more consistent with the conclusion of
the MeTC that the leases of the petitioners had expired. Indeed, to peg the respondents
monetary recovery to the unadjusted rentals, instead of reasonable compensation, is not
fair.
Accordingly, we modify the CAs decision by reinstating the MeTCs decision
without qualification.
WHEREFORE, we modify the decision promulgated on March 31, 2000 by the Court of
Appeals by reinstating the decision dated May 17, 1996 by the Metropolitan Trial Court in
Manila without qualification.
Costs of suit to be paid by the petitioners.
SO ORDERED.

Republic of the Philippines

SUPREME COURT
Manila
EN BANC
February 7, 1924
G.R. No. 21271
ISIDRO PENSADER, ET AL., plaintiffs-appellants,
vs.
ALEJANDRA PENSADER, ET AL., defendants-appellees.
Lorenzo C. Campo for appellants.
Marcelo T. Boncan for appellees.
ROMUALDEZ, J.:
In this case the partition is sought of a cocoanut land described in the complaint and which
the plaintiffs allege is an undivided inheritance between them and the defendants.
The court absolved the latter from the complaint and the plaintiffs took this appeal,
assigning as errors of the lower court the holding that the appellants and appellees have
been holding the disputed land in common; the finding that the possession exercised by
the appellee Silverio P. Revelar and his predecessors in interest for more than thirty years
is adverse to them, and the holding that plaintiff's action has prescribed; the finding that
the decease Canuto Pensader transferred to Fr. Pablo Pajarillo the title to said land, when
as a matter of fact he was commissioned only to see that the realty was distributed among
the former's heirs; and finally its failure to permit the plaintiffs to introduce parol evidence
concerning certain admissions made by the appellee Alejandra Pensader and her husband
and by Vicente Revelar as to her title to the land.
The facts proven are: Canuto Pensader, who was living maritally with Maria Revelar,
acquired the land in question from Eulalio Punio. Said Canuto had several brothers whose
children, nephews of said Canuto, are the herein plaintiffs and defendant Alejandra
Pensader, and died without leaving any forced heir.
In 1892, Canuto Pensader donated one-half of the land in dispute to his paramour Maria
Revelar, and the other half to his niece Alejandra Pensader, defendant herein, mother of
the other defendant, Silverio P. Revelar. By virtue of this donation and immediately after
the death of Canuto Pensader, which occurred at the end of the year 1892, Maria Revelar
and Alejandra Pensader, the latter being married with Vicente Revelar, entered upon the
possession of the land in question and since then they have been cultivating it until the
death of Vicente Revelar, whose heirs, in an extrajudicial partition and in accord with
Alejandra Pensader allotted the land to the herein defendant Silverio P. Revelar. Maria
Revelar in turn waived her share of the realty in favor of said Silverio P. Revelar, who has
been cultivating and improving the same and enjoying its fruits since then. The possession
of this Silverio P. Revelar, together with that of his parents and aunt Maria Revelar, dates
back to thirty years ago, and is continuous, public, peaceful, and under claim of ownership.
It was not shown that such possession was in common with the plaintiffs. As above stated,
the origin of said possession is adverse to such community, namely, the donation, which
although it is not established by a sufficient documentary evidence, stands in this case as a
circumstance explaining the exclusive character of the possession of Maria Revelar and
Alejandra Pensader and that of their common successor in interest Silverio P. Revelar.
Besides, it appears that in the year 1905, the plaintiffs made an extrajudicial demand for
the partition of this property, but did not obtain it, the defendants having continued in
possession and exclusive enjoyment thereof.

100

These facts, under the circumstances shown by the evidence as a whole, are sufficient to
establish the adverse character of the possession which the defendant Silverio P. Revelar
and his predecessors in interest had been exercising over the land in question, and,
therefore, to justify the holding that the action brought by the plaintiffs has already
prescribed.
We do not find in the assignments of error sufficient merit for altering the judgment
appealed from. It is, therefore, affirmed with the costs against the appellants. So ordered.
Araullo, C.J., Johnson, Street, Malcolm, Avancea, Ostrand, and Johns, JJ., concur.
EN BANC
[G.R. No. L-8029. June 28, 1956.]
EMILIA ESPIQUE and SANTIAGO ESPIQUE, Plaintiffs-Appellants, vs. JACINTO
ESPIQUE,Defendant-Appellee.
DECISION
BAUTISTA ANGELO, J.:
This is an action for partition of three parcels of land situated in Tayug, Pangasinan based
on the claim that they are owned in common and pro indiviso
by Plaintiffs and Defendant.Plaintiffs also pray for damages representing unenjoyed profits
from 1916 to 1949, or a period of 33 years.
The defense of Defendant is that said lands were given to him and his wife by his parents
Basilio ESPIQUE and Maria Diaz as well as his grandfather Julian ESPIQUE by way of a
donation propter nuptias on May 8, 1906 and since then he and his wife have been in
possession and enjoyment thereof for a period of 44 years adversely and without
interruption. He pleaded prescription and lack of cause of action.
On the date set for hearing, the parties submitted a stipulation of facts wherein, among
other things, they agreed (1) that Plaintiffs and Defendant are the legitimate children of
Basilio ESPIQUE and Maria Diaz, the former being the legitimate son of Julian ESPIQUE,
and (2) that the properties in question were donated propter nuptias by Julian ESPIQUE
and the spouses Basilio ESPIQUE and Maria Diaz in favor of Jacinto ESPIQUE and Victorina
Abenojar, but the donation was merely made in a private document executed on May 8,
1906.
In view of the above stipulation of facts, Defendant submitted a motion to dismiss, to
whichPlaintiffs filed a reply and, thereafter, the court rendered judgment finding
that Plaintiffs complaint has no cause of action it appearing that the properties which are
sought to be partitioned were donated to Defendant since 1906 who has been in
possession thereof adversely and continuously for more than forty years and, hence, has
acquired title thereto by prescription. Consequently, the court dismissed the action
without pronouncement as to costs. Plaintiffs appealed from this decision in due course
but the Court of Appeals certified the case to this Court on the ground that it merely
involves questions of law.
The question to be determined is whether the lower court erred in concluding
that Plaintiffs complaint states no cause of action because, considering its allegations and
the stipulation of facts submitted by the parties, the properties in question were donated
to Defendant by his predecessors-in-interest way back in 1906 and since then he has been
in possession and enjoyment thereof adversely, openly and without interruption up to
1949, or for a period of more than forty years.

Plaintiffs sustain the affirmative on the plain plea that the deed of donation
which Defendantclaims as the basis of his title being one in consideration of marriage is
null and void and as such could not have conveyed or transferred any title, right or interest
over the lands in question to Defendant because it has not been executed in a public
document. And even if said donation may be said to be the basis of acquisitive
prescription, Plaintiffs contend that there is no evidence whatever showing that the
possession of Defendant has been continuous, public open and adverse for more than 30
years as found by the trial court.
There is no question that the donation in question is invalid because it involves an
immovable property and the donation was not made in a public document as required by
Article 633 of the old Civil Code, in connection with Article 1328 of the same Code
(concerning gifts propter nuptias), but it does not follow that said donation may not serve
as basis of acquisitive prescription when on the strength thereof the donee has taken
possession of the property adversely and in the concept of owner, for, as this Court well
said:chanroblesvirtuallawlibrary While the verbal donation, under which the Defendants,
and his predecessors in interest have been in possession of the lands in question, is not
effective as a transfer of title, yet it is a circumstance which may explain the adverse and
exclusive character of the possession (Pensader vs. Pensader, 47 Phil., 959; chan
roblesvirtualawlibrarySee also Dimaliwat vs. Dimaliwat, 55 Phil., 673-680). That is also an
action for partition. It was shown that the donation of the property was made not even in
a private document but only verbally. It was also shown that the Defendants, through their
predecessors-in-interest, were in adverse and continuous possession of the lands for a
period of over 30 years. Yet, the court decided the case in favor of Defendants on the
ground of acquisitive prescription. There is also a close parallelism between the facts of
this case and the present.
It is true that no evidence was presented showing the character of the possession held by
theDefendant of the lands in question, but such is unnecessary considering the admissions
made by Plaintiffs in the complaint and in the stipulation of facts. A careful analysis of the
admissions made in both pleadings would at once reveal that Defendant has been in open,
adverse and continuous possession of said lands since at least 1916 up to 1949, or for a
period of 33 years. Thus, it appears in paragraphs 4 and 5 of the first cause of action
that Defendanthas been in possession of the lands in question and has appropriated unto
himself the whole produce of the aforementioned parcels of land, from 1916 up to the
present so much so thatPlaintiffs prayed that they be given their share of the produce
during said period by way of damages in the total amount of P22,000.
We do not need to stretch our mind to see that under such allegations Plaintiffs intended
to convey the idea that Defendant has possessed the lands openly, adversely and without
interruption from 1916 to 1949 for he is the one who has possessed them and reaped the
whole benefit thereof. As to the character of the possession held by Defendant during that
period one cannot also deny that it is in the concept of owner considering that the lands
were donated to him by his predecessors-in-interest on the occasion of his marriage even
if the same was not embodied in a public instrument. The essential elements constituting
acquisitive prescription are therefore present which negative the right of Plaintiffs to ask
for partition of said properties. On this point we find pertinent the following observation
of the trial court. Any person who claims right of ownership over immovable properties
and does not invoke that right but instead tolerated others in possession for thirty years is
guilty of laches and negligence and he must suffer the consequences of his acts.

101

With regard to the contention that the trial court dismissed the case without first receiving
the evidence the Plaintiffs may desire to present in support of their contention, it is true
that this right was reserved by the parties in the stipulation of facts and Plaintiffs asked in
their motion for reconsideration that they be given a chance to prove some additional
facts, but they failed to state clearly what those facts are and the nature of the evidence
they would like to present, for which reason the court denied their request. Undoubtedly,
the trial court did not deem necessary any additional evidence considering the admissions
made by the Plaintiffs as above adverted to.
Considering the conclusion we have reached, we hold that the trial court did not err in this
respect.
Wherefore, the decision appealed from is affirmed, without pronouncement as to costs.
Paras, C.J., Bengzon, Padilla, Montemayor, Reyes, A., Labrador, Concepcion, Reyes,
J.B.L., and Endencia, JJ., concur.
SECOND DIVISION
GOLDCREST REALTY CORPORATION,
Petitioner,

G.R. No. 171072

Present:

- versus -

QUISUMBING, J., Chairperson,

CARPIO MORALES,
TINGA,
VELASCO, JR., and
BRION, JJ.

CYPRESS GARDENS CONDOMINIUM

Promulgated:
CORPORATION,
Respondent.
April 7, 2009
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -x
DECISION
QUISUMBING, J.:
For review on certiorari are the Decision[1] dated September 29, 2005 and the
Resolution[2] dated January 16, 2006 of the Court of Appeals in CA G.R. SP No. 79924.
The antecedent facts in this case are as follows:
Petitioner Goldcrest Realty Corporation (Goldcrest) is the developer
of Cypress Gardens,
a
ten-storey
building
located
at Herrera
Street, Legaspi Village, MakatiCity. On April 26, 1977, Goldcrest executed a Master Deed
and Declaration of Restrictions[3] which constituted Cypress Gardens into a condominium
project and incorporated respondent Cypress Gardens Condominium Corporation
(Cypress) to manage the condominium project and to hold title to all the common
areas. Title to the land on which the condominium stands was transferred
to Cypress under Transfer Certificate of Title No. S-67513. But Goldcrest retained
ownership of the two-level penthouse unit on the ninth and tenth floors of the

condominium registered under Condominium Certificate of Title (CCT) No. S-1079 of the
Register of Deeds ofMakati City. Goldcrest and its directors, officers, and assigns likewise
controlled the management and administration of the Condominium until 1995.
Following the turnover of the administration and management of the
Condominium to the board of directors of Cypress in 1995, it was discovered that certain
common areas pertaining to Cypress were being occupied and encroached upon by
Goldcrest. Thus, in 1998, Cypress filed a complaint with damages against Goldcrest before
the Housing and Land Use Regulatory Board (HLURB), seeking to compel the latter to vacate
the common areas it allegedly encroached on and to remove the structures it built
thereon. Cypress sought to remove the door erected by Goldcrest along the stairway
between the 8th and 9th floors, as well as the door built in front of the 9th floor elevator lobby,
and the removal of the cyclone wire fence on the roof deck. Cypress likewise prayed that
Goldcrest pay damages for its occupation of the said areas and for its refusal to remove the
questioned structures.
For its part, Goldcrest averred that it was granted the exclusive use of the roof
decks limited common area by Section 4(c)[4] of the condominiums Master Deed. It
likewise argued that it constructed the contested doors for privacy and security purposes,
and that, nonetheless, the common areas occupied by it are unusable and inaccessible to
other condominium unit owners.
Upon the directive of HLURB Arbiter San Vicente, two ocular inspections[5] were
conducted on the condominium project. During the first inspection, it was found that
Goldcrest enclosed and used the common area fronting the two elevators on the ninth
floor as a storage room. It was likewise discovered that Goldcrest constructed a
permanent structure which encroached 68.01 square meters of the roof decks common
area.[6]
During the second inspection, it was noted that Goldcrest failed to secure an
alteration approval for the said permanent structure.
In his Decision[7] dated December 2, 1999, Arbiter San Vicente ruled in favor
of Cypress. He required Goldcrest, among other things, to: (1) remove the questioned
structures, including all other structures which inhibit the free ingress to and egress from
the condominiums limited and unlimited common areas; (2) vacate the roof decks
common areas and to pay actual damages for occupying the same; and (3) pay an
administrative fine for constructing a second penthouse and for making an unauthorized
alteration of the condominium plan.
On review, the HLURB Special Division modified the decision of Arbiter San
Vicente. It deleted the award for actual damages after finding that the encroached areas
were not actually measured and that there was no evidentiary basis for the rate of
compensation fixed by Arbiter San Vicente. It likewise held that Cypress has no cause of
action regarding the use of the roof decks limited common area because only Goldcrest
has the right to use the same. The dispositive portion of the decision reads:
WHEREFORE, in view of the foregoing, the decision of the
office [is] modified as follows:
1. Directing respondent to immediately remove any or all
structures which obstruct the use of the stairway from the eighth to
tenth floor, the passage and use of the lobbies at the ninth and tenth
floors of the Cypress Gardens Condominium; and to remove any or all
structures that impede the use of the unlimited common areas.

102

2. Ordering the respondent to pay an administrative fine

of P10,000.00 for its addition of a second penthouse and/or
unauthorized alteration of the condominium plan.
All other claims are hereby dismissed.
SO ORDERED.[8]
Aggrieved, Cypress appealed to the Office of the President. It questioned the
deletion of the award for actual damages and argued that the HLURB Special Division in
effect ruled that Goldcrest could erect structures on the roof decks limited common area
and lease the same to third persons.
The Office of the President dismissed the appeal. It ruled that the deletion of the
award for actual damages was proper because the exact area encroached by Goldcrest
was not determined. It likewise held that, contrary to the submissions of Cypress, the
assailed decision did not favor the building of structures on either the condominiums
limited or unlimited common areas. The Office of the President stressed that the decision
did not only order Goldcrest to remove the structures impeding the use of the unlimited
common areas, but also fined it for making unauthorized alteration and construction of
structures on the condominiums roof deck.[9]The dispositive portion of the decision reads:
WHEREFORE, premises considered, the appeal of Cypress
Gardens Corporation is hereby DISMISSED and the decision of the
Board a quo dated May 11, 2000 is herebyAFFIRMED.
SO ORDERED.[10]
Cypress thereafter elevated the matter to the Court of Appeals, which partly
granted its appeal. The appellate court noted that the right of Goldcrest under Section 4(c)
of the Master Deed for the exclusive use of the easement covering the portion of the roof
deck appurtenant to the penthouse did not include the unrestricted right to build
structures thereon or to lease such area to third persons. Thus the appellate court ordered
the removal of the permanent structures constructed on the limited common area of the
roof deck. The dispositive portion of the decision reads:
WHEREFORE, the petition is PARTIALLY GRANTED. The
Decision of the Office of the President dated June 2, 2003 is hereby
AFFIRMED with modification. Respondent Goldcrest Realty Corporation
is further directed to remove the permanent structures constructed on
the limited common area of the roof deck.
SO ORDERED.[11]
The parties separately moved for partial reconsideration but both motions were
denied.
Hence this petition, raising the following issues:
I.
[WHETHER OR NOT] THE APPELLATE COURT ERRED IN RULING THAT
GOLDCREST BUILT AN OFFICE STRUCTURE ON A SUPPOSED
ENCROACHED AREA IN THE OPEN SPACE OF THE ROOF DECK.
II.
[WHETHER OR NOT] THE APPELLATE COURT ERRED IN RULING THAT
PETITIONER IMPAIRED THE EASEMENT ON THE PORTION OF THE ROOF
DECK DESIGNATED AS A LIMITED COMMON AREA.[12]
Anent the first issue, Goldcrest contends that since the areas it allegedly
encroached upon were not actually measured during the previous ocular inspections, the
finding of the Court of Appeals that it built an office structure on the roof decks limited

common area is erroneous and that its directive to remove the permanent
structures[13] constructed on the limited common area of the roof deck is impossible to
implement.
On the other hand, Cypress counters that the Court of Appeals finding is
correct. It also argues that the absence of such measurement does not make the assailed
directive impossible to implement because the roof decks limited common area is
specifically identified by Section 4(c) of the Master Deed, which reads:
Section. 4. The Limited Common Areas. Certain parts of the
common areas are to be set aside and reserved for the exclusive use of
certain units and each unit shall have appurtenant thereto as exclusive
easement for the use of such limited areas:
xxxx
(c) Exclusive use of the portion of the roof deck (not shaded
red in sheet 10 of Annex B) by the Penthouse unit on the roof deck. [14]
xxxx
We rule in favor of Cypress. At this stage of the proceedings, the failure to
measure the supposed encroached areas is no longer relevant because the award for
actual damages is no longer in issue. Moreover, a perusal of the records shows that the
finding of the Court of Appeals that Goldcrest built an office structure on the roof decks
limited common area is supported by substantial evidence and established facts, to wit: (1)
the ocular inspection reports submitted by HLURB Inspector Edwin D. Aquino; (2) the fact
that the second ocular inspection of the roof deck was intended to measure the actual
area encroached upon by Goldcrest;[15] (3) the fact that Goldcrest had been fined for
building a structure on the limited common area;[16] and (4) the fact that Goldcrest neither
denied the structures existence nor its encroachment on the roof decks limited common
area.
Likewise, there is no merit in Goldcrests submission that the failure to conduct an
actual measurement on the roof decks encroached areas makes the assailed directive of
the Court of Appeals impossible to implement. As aptly pointed out by Cypress, the limited
common area of the roof deck is specifically identified by Section 4(c) of the Master Deed.
Anent the second issue, Goldcrest essentially contends that since the roof decks
common limited area is for its exclusive use, building structures thereon and leasing the
same to third persons do not impair the subject easement.
For its part, Cypress insists the said acts impair the subject easement because the
same are already beyond the contemplation of the easement granted to Goldcrest.
The question of whether a certain act impairs an easement is undeniably one of
fact, considering that its resolution requires us to determine the acts propriety in relation to
the character and purpose of the subject easement.[17] In this case, we find no cogent reason
to overturn the similar finding of the HLURB, the Office of the President and the Court of
Appeals that Goldcrest has no right to erect an office structure on the limited common area
despite its exclusive right to use the same. We note that not only did Goldcrests act impair
the easement, it also illegally altered the condominium plan, in violation of Section 22[18] of
Presidential Decree No. 957.[19]
The owner of the dominant estate cannot violate any of the following prescribed
restrictions on its rights on the servient estate, to wit: (1) it can only exercise rights necessary
for the use of the easement;[20] (2) it cannot use the easement except for the benefit of the
immovable originally contemplated;[21] (3) it cannot exercise the easement in any other
manner than that previously established;[22] (4) it cannot construct anything on it which is not

103

necessary for the use and preservation of the easement;[23] (5) it cannot alter or make the
easement more burdensome;[24] (6) it must notify the servient estate owner of its intention
to make necessary works on the servient estate;[25] and (7) it should choose the most
convenient time and manner to build said works so as to cause the least convenience to the
owner of the servient estate.[26] Any violation of the above constitutes impairment of the
easement.
Here, a careful scrutiny of Goldcrests acts shows that it breached a number of
the aforementioned restrictions. First, it is obvious that the construction and the lease of
the office structure were neither necessary for the use or preservation of the roof decks
limited area. Second, the weight of the office structure increased the strain on the
condominiums foundation and on the roof decks common limited area, making the
easement more burdensome and adding unnecessary safety risk to all the condominium
unit owners. Lastly, the construction of the said office structure clearly went beyond the
intendment of the easement since it illegally altered the approved condominium project
plan and violated Section 4[27] of the condominiums Declaration of Restrictions.[28]
WHEREFORE, the petition is DENIED for lack of merit. The assailed Decision
dated September 29, 2005 of the Court of Appeals in CA G.R. SP. No. 79924 is
hereby AFFIRMED. Costs against the petitioner.
SO ORDERED.
_________________________________________________________________________
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-26053
February 21, 1967
CITY OF MANILA, plaintiff-appellee,
vs.
GERARDO GARCIA CARMENCITA VILLANUEVA, MODESTA PARAYNO NARCISO
PARAYNO, JUAN ASPERAS, MARIA TABIA SIMEON DILIMAN, AQUILINO BARRIOS
LEONORA RUIZ, LAUREANO DIZO, BERNABE AYUDA LEOGARDA DE LOS SANTOS,
ISABELO OBAOB ANDREA RIPARIP, JOSE BARRIENTOS, URBANO RAMOS,1 ELENA
RAMOS, ESTEFANIA NEPACINA, MODESTA SANCHEZ, MARCIAL LAZARO, MARCIANA
ALANO, HONORIO BERIO SEDORA ORAYLE, GLORIA VELASCO, WILARICO RICAMATA,
BENEDICTO DIAZ, ANA DEQUIZ (MRS.) ALUNAN, LORENZO CARANDANG, JUAN
PECAYO, FELICIDAD MIRANDA EMIGDIO EGIPTO, defendants-appellants.
Mauricio Z. Alunan for defendants-appellants.
City Fiscal's Office for plaintiff-appellee.
SANCHEZ, J.:
Plaintiff City of Manila is owner of parcels of land, forming one compact area, bordering
Kansas, Vermont and Singalong streets in Malate, Manila, and covered by Torrens Titles
Nos. 49763, 37082 and 37558. Shortly after liberation from 1945 to 1947, defendants
entered upon these premises without plaintiff's knowledge and consent. They built houses
of second-class materials, again without plaintiff's knowledge and consent, and without
the necessary building permits from the city. There they lived thru the years to the
present.
In November, 1947, the presence of defendants having previously been discovered,
defendants Felicidad Miranda (Emigdio Egipto), Modesta C. Parayno, Benedicto Diaz,

Laureano Dizo, Jose Barrientos, Elena Ramos, Estefania Nepacina, Modesta Sanchez,
Honorio Berio, Gloria Velasco, Ana Dequis Alunan and Benedicto Ofiaza (predecessor of
defendant Carandang) were given by Mayor Valeriano E. Fugoso written permits each
labeled "lease contract" to occupy specific areas in the property upon conditions
therein set forth. Defendants Isabelo Obaob and Gerardo Garcia (in the name of Marta A.
Villanueva) received their permits from Mayor Manuel de la Fuente on January 29 and
March 18, respectively, both of 1948. The rest of the 23 defendants exhibited none.
For their occupancy, defendants were charged nominal rentals.1wph1.t
Following are the rentals due as of February, 1962:
NAME

Area
Monthly
in sq.m. Rental

Amt. due from

date of delinquency
to Feb. 1962

1. Gerardo Garcia

66.00

P7.92

P1,628.97

2. Modesta C. Parayno

87.75

10.53

379.08

3. Juan Asperas

39.00

4.68

9.36

4. Maria Tabia

35.20

5.76

570.24

5. Aquilino Barrios
(Leonora Ruiz)

54.00

4.32

99.36

6. Laureano Dizo

35.00

2.80

22.40

7. Bernabe Ayuda

39.60

3.17

323.34

8. Isabelo Obaob

75.52

9.06

208.38

9. Jose Barrientos

39.53

4.74

744.18

10. Cecilia Manzano in

lieu of Urbano Ramos (deceased)

46.65

5.60

Paid up to
Feb. 1962.

11. Elena Ramos

34.80

2.78

186.26

12. Estefania Nepacina

41.80

3.34

504.34

13. Modesta Sanchez

33.48

2.68

444.88

14. Marcial Lazaro

22.40

1.79

688.32

15. Marciana Alano

25.80

2.06

255.44

16. Honorio Berio

24.00

1.92

188.16

17. Gloria Velasco

32.40

2.59

56.98

18. Wilarico Ricamata

45.83

3.67

739.68

104

19. Benedicto Diaz

40.20

4.82

Paid up to
March 1962.

20. Ana Dequis Alunan

64.26

7.71

30.84

21. Lorenzo Carandang

45.03

5.40

437.40

22. Juan N. Pecayo

25.52

3.06

30.60

23. Felicidad Miranda

48.02

5.76

132.48
P7,580.69

Epifanio de los Santos Elementary School is close, though not contiguous, to the property.
Came the need for this school's expansion; it became pressing. On September 14, 1961,
plaintiff's City Engineer, pursuant to the Mayor's directive to clear squatters' houses on
city property, gave each of defendants thirty (30) days to vacate and remove his
construction or improvement on the premises. This was followed by the City Treasurer's
demand on each defendant, made in February and March, 1962, for the payment of the
amount due by reason of the occupancy and to vacate in fifteen (15) days. Defendants
refused. Hence, this suit to recover possession.2
The judgment below directed defendants to vacate the premises; to pay the amounts
heretofore indicated opposite their respective names; and to pay their monthly rentals
from March, 1962, until they vacate the said premises, and the costs. Defendants
appealed.
1. We are called upon to rule on the forefront question of whether the trial court
properly found that the city needs the premises for school purposes.
The city's evidence on this point is Exhibit E, the certification of the Chairman,
Committee on Appropriations of the Municipal Board. That document recites
that the amount of P100,000.00 had been set aside in Ordinance 4566, the 19621963 Manila City Budget, for the construction of an additional building of the
Epifanio de los Santos Elementary School. It is indeed correct to say that the
court below, at the hearing, ruled out the admissibility of said document. But
then, in the decision under review, the trial judge obviously revised his views. He
there declared that there was need for defendants to vacate the premises for
school expansion; he cited the very document, Exhibit E, aforesaid.
It is beyond debate that a court of justice may alter its ruling while the case is
within its power, to make it conformable to law and justice.3 Such was done here.
Defendants' remedy was to bring to the attention of the court its contradictory
stance. Not having done so, this Court will not reopen the case solely for this
purpose.4
Anyway, elimination of the certification, Exhibit E, as evidence, would not profit
defendants. For, in reversing his stand, the trial judge could well have taken
because the was duty bound to take judicial notice5 of Ordinance 4566. The
reason being that the city charter of Manila requires all courts sitting therein to
take judicial notice of all ordinances passed by the municipal board of
Manila.6 And, Ordinance 4566 itself confirms the certification aforesaid that an

appropriation of P100,000.00 was set aside for the "construction of additional

building" of the Epifanio de los Santos Elementary School.
Furthermore, defendants' position is vulnerable to assault from a third direction.
Defendants have absolutely no right to remain in the premises. The excuse that
they have permits from the mayor is at best flimsy. The permits to occupy are
recoverable on thirty days' notice. They have been asked to leave; they refused
to heed. It is in this factual background that we say that the city's need for the
premises is unimportant. The city's right to throw defendants out of the area
cannot be gainsaid. The city's dominical right to possession is paramount. If error
there was in the finding that the city needs the land, such error is harmless and
will not justify reversal of the judgment below.7
2. But defendants insist that they have acquired the legal status of tenants. They
are wrong.
They entered the land, built houses of second-class materials thereon without
the knowledge and consent of the city. Their homes were erected without city
permits.
These constructions are illegal. In a language familiar to all, defendants are
squatters:
Since the last global war, squatting on another's property in this country has
become a widespread vice. It was and is a blight. Squatters' areas pose problems
of health, sanitation. They are breeding places for crime. They constitute proof
that respect for the law and the rights of others, even those of the government,
are being flouted. Knowingly, squatters have embarked on the pernicious act of
occupying property whenever and wherever convenient to their interests
without as much as leave, and even against the will, of the owner. They are
emboldened seemingly because of their belief that they could violate the law
with impunity. The pugnaciousness of some of them has tied up the hands of
legitimate owners. The latter are thus prevented from recovering possession by
peaceful means. Government lands have not been spared by them. They know,
of course, that intrusion into property, government or private, is wrong. But,
then, the mills of justice grind slow, mainly because of lawyers who, by means,
fair or foul, are quite often successful in procuring delay of the day of reckoning.
Rampancy of forcible entry into government lands particularly, is abetted by the
apathy of some public officials to enforce the government's rights. Obstinacy of
these squatters is difficult to explain unless it is spawned by official tolerance, if
not outright encouragement or protection. Said squatters have become
insensible to the difference between right and wrong. To them, violation of law
means nothing. With the result that squatting still exists, much to the detriment
of public interest. It is high time that, in this aspect, sanity and the rule of law be
restored. It is in this environment that we look into the validity of the permits
granted defendants herein.
These permits, erroneously labeled "lease" contracts, were issued by the mayors
in 1947 and 1948 when the effects of the war had simmered down and when
these defendants could have very well adjusted themselves. Two decades have
now elapsed since the unlawful entry. Defendants could have, if they wanted to,
located permanent premises for their abode. And yet, usurpers that they are,
they preferred to remain on city property.

105

Defendants' entry as aforesaid was illegal. Their constructions are as illegal,

without permits.8 The city charter enjoins the mayor to "safeguard all the lands"
of the City of Manila.9
Surely enough, the permits granted did not "safeguard" the city's land in
question. It is our considered view that the Mayor of the City of Manila cannot
legalize forcible entry into public property by the simple expedient of giving
permits, or, for that matter, executing leases.
Squatting is unlawful and no amount of acquiescence on the part of the city
officials will elevate it into a lawful act. In principle, a compound of illegal entry
and official permit to stay is obnoxious to our concept of proper official norm of
conduct. Because, such permit does not serve social justice; it fosters moral
decadence. It does not promote public welfare; it abets disrespect for the law. It
has its roots in vice; so it is an infected bargain. Official approval of squatting
should not, therefore, be permitted to obtain in this country where there is an
orderly form of government.
We, accordingly, rule that the Manila mayors did not have authority to give
permits, written or oral, to defendants, and that the permits herein granted are
null and void.
3. Let us look into the houses and constructions planted by defendants on the
premises. They clearly hinder and impair the use of that property for school
purposes. The courts may well take judicial notice of the fact that housing school
children in the elementary grades has been and still is a perennial problem in the
city. The selfish interests of defendants must have to yield to the general good.
The public purpose of constructing the school building annex is paramount.10
In the situation thus obtaining, the houses and constructions aforesaid constitute
public nuisance per se. And this, for the reason that they hinder and impair the
use of the property for a badly needed school building, to the prejudice of the
education of the youth of the land.11 They shackle the hands of the government
and thus obstruct performance of its constitutionally ordained obligation to
establish and maintain a complete and adequate system of public education, and
more, to "provide at least free public primary instruction".12
Reason dictates that no further delay should be countenanced. The public
nuisance could well have been summarily abated by the city authorities
themselves, even without the aid of the courts.13
4. Defendants challenge the jurisdiction of the Court of First Instance of Manila.
They say that the case should have been started in the municipal court. They
prop up their position by the averment that notice for them to vacate was only
served in September, 1961, and suit was started in July, 1962. Their legal ground
is Section 1, Rule 70 of the Rules of Court. We have reached the conclusion that
their forcible entry dates back to the period from 1945 to 1947. That entry was
not legalized by the permits. Their possession continued to remain illegal from
incipiency. Suit was filed long after the one-year limitation set forth in Section 1
of Rule 70. And the Manila Court of First Instance has jurisdiction.14
Upon the premises, we vote to affirm the judgment under review. Costs against
defendants-appellants. So ordered.
Concepcion, C.J., Reyes, J.B.L., Dizon, Regala, Makalintal, Bengzon, J.P., Zaldivar and
Castro, JJ., concur.

Republic of the Philippines

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-33213 June 29, 1979
ARTEMIO C. REYES and HILARION C. REYES, petitioners,
vs.
HON. ANDRES STA. MARIA, Presiding Judge, Court of First Instance of Bulacan, Branch II,
HILARIA SANTOS VDA. DE LOPEZ and PILAR SANTOS, respondents.
E. M. Reyes for petitioner.
Ruben T. Reyes for respondents.
TEEHANKEE, J.:
The Court sets aside the lower court's Order which dismissed petitioners-plaintiffs'
complaint filed before it for recovery of the property in the possession of respondentsdefendants and for declaration of ownership thereof as against said respondents' contrary
claim of ownership on the ground of alleged lack of jurisdiction. Such action was clearly
an accion publiciana for the recovery of the right to possess (possesion de jure) (if not
an accion reivindicatoria) falling within the lower court's jurisdiction and not a mere action
for detainer to recover physical possession (possession de facto) which would fall within
the jurisdiction of the municipal court (if filed within one year after unlawful deprivation or
withholding of possession) as erroneously held by the lower court in its dismissal order.
Petitioners as plaintiffs in the Court of First Instance of Bulacan had filed on April 1, 1968
an action which they termed as one to quiet title to a certain residential lot in Barrio San
Sebastian, Hagonoy, Bulacan with an area of 368.5 square meters and to recover the
possession thereof from respondents as defendants, 1 wherein they made the following
averments:
2. That plaintiffs are owners pro-indiviso of a certain residential lot
situated in the Barrio of San Sebastian, Hagonoy, Bulacan, and more
particularly bounded and described as follows:
(Description omitted)
3. That through the tolerance and goodwill of plaintiffs, thru the
intervention and entreaty of one Maximo Santos, father of the
defendants, the latter used and occupied said land free of charge, under
the following conditions, to wit: (a) that instead of paying rentals on the
premises defendants undertook to pay the corresponding real estate
taxes on the land; and (b) that said defendants will leave and vacate the
premises anytime the plaintiffs so demand;
4. That sometime in February, 1968, plaintiffs verbally notified
defendants that said plaintiffs were in need of the land, hence, said
defendants should vacate and leave the same, but said defendants
unreasonably refused at the same time claiming ownership of the
property, and alleging further that they bought the same from a certain
Pablo Aguinaldo;

106

5. That in order to quiet the title of ownership over this land, the
plaintiffs have been compelled to institute the present action and, as a
consequence, she suffered damages in the sum of One Thousand Pesos
(P1,000.00), Philippine Currency, as attorney's fees;
6. That the defendants thru their acts stated above have therefore
maliciously and unlawfully detained the land of plaintiffs since February,
1968; and
7. That for the unlawful occupation of the land, an estimate of Fifty
(P50.00) Pesos monthly rental is hereby claimed as reasonable damages
suffered by plaintiffs since February, 1968. 2
Petitioners accordingly prayed in their complaint for judgment (a) "declaring [them] to be
the owners of the property described ... "; (b) "ordering the defendants to vacate the
premises and return the possession of the same to plaintiffs;" (c) "ordering the defendants
to pay plaintiffs, jointly and severally, the sum of Fifty Pesos (P50.00), Philippine Currency,
rental or damages every month effective the first day of February, 1968, until the
possession of the premises is finally restored in favor of plaintiffs;" and further ordering
defendants to pay them (d) P1,000.00 attorney's fees and (e) costs of suit.
Upon respondents' motion to dismiss the complaint on the ground that "the court has no
jurisdiction over the nature of the action or suit" and that the action embodied in
petitioners' complaint "is actually one for ejectment or unlawful detainer. Consequently,
the case falls within the original exclusive jurisdiction of the inferior court or municipal
court" as against petitioners? opposition that "plaintiffs' complaint is principally one to
quiet title to property, the question of possession being merely reduced to an incidental
issue," the lower court issued its appealed order of August 15, 1968, finding the motion to
dismiss to be "well founded" and dismissing the case "for lack of jurisdiction".The lower
court reasoned that:
A perusal of the actual averments of facts in the complaint do not
reveal any allegation of ultimate facts which could sufficiently support
an action to quiet title. Upon the other hand, it is plain that the
allegations of facts are only constitutive of an action for unlawful
detainer. The allegation in paragraph 5 of said complaint 'that in order
to quiet the title of ownership over this land, the plaintiffs have been
compelled to institute the present action ... is not sufficient by itself to
consider this case as an action for quieting title under Article 476 of the
New Civil Code. Neither does the prayer of said complaint asking that
the plaintiffs be declared the owners of the property in question
constitute a cause of action.
Hence, the present petition for review and setting aside of the dismissal order, which the
Court finds to be meritorious. The lower court was clearly in error in issuing its dismissal
order on its mistaken notion "that the allegations of facts are only constitutive of an action
for unlawful detainer" since the complaint shows on its face that respondents' refusal to
deliver the possession of the property was due to their adverse claim of ownership of the
same property and their counter-allegation that they had bought the same from a certain
Pablo Aguinaldo, and, therefore, petitioners' action was clearly one for recovery of their
right to possess the property (possessionde jure) as well as to be declared the owners
thereof as against the contrary claim of respondents.
As restated by the late Chief Justice Moran: "There are three kinds of actions for the
recovery of possession of real pro. property, namely, (1) the summary action for forcible

entry or detainer (denominated accion interdictalunder the former law of procedure, Ley
de Enjuiciamiento Civil) which seeks the recovery of physical possession only and is
brought within one year in the justice of the peace court; (2) the accion publiciana which is
for the recovery of the right to possess and is a plenary action in an ordinary civil
proceeding in a Court of First Instance; and (3) accion de reivindicacion which seeks the
recovery of ownership (which of course includes the jus utendi and the jus fruendi also
brought in the Court of First Instance. 3
It has been said that "(T)he only issue in forcible entry and detainer cases is
the physical possession of real property possession de facto and not possession de jure If
plaintiff can prove a prior possession in himself, he may recover such possession even
from the owner himself. Whatever may be the character of his prior possession, if he has
in his favor priority of time, he has the security that 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. 4Petitioners' action was not merely for recovery of possession de
facto. Their action was clearly one of accion publiciana for recovery of possession de jure if
not one of accion reivindicatoria for declaration of their ownership of the land.
As reaffirmed by the Court in the analogous case of Aguilon vs. Bohol 5 petitioners action is
at least "an accion publiciana, which action 'correspondent al que tiene derecho a la
possession, contra el que posee sin derecho o' con titulo menos firme para que se ponga la
cosa en poder del actor con todas las accesiones, frutos ets' (I Enciclopedia Juridica
Espanola 450)," and such accion publiciana or the plenary action in an ordinary civil
proceeding to determine the better and legal right to possess (independently of title)
clearly falls within the jurisdiction of the Courts of First Instance and not of the Municipal
Courts. The Court further underscored therein "that an action for recovery of possession is
an urgent matter which must be decided promptly to forestall breaches of peace, violence
or even loss of life and, therefore, the court should act swiftly and expeditiously in cases of
that nature.
Petitioners, therefore, correctly filed their accion publiciana before the lower court as
against respondents! claim that they should instead have filed a summary action for
detainer in the municipal court. Having been fully apprised of respondents' refusal to
surrender possession and their contrary claim of ownership of the same property,
petitioners properly filed their accion publiciana with the Court of First Instance to avoid
getting enmeshed in what would certainly have been another jurisdictional dispute, since
they could reasonably foresee that if indeed they had filed a summary action for illegal
detainer instead in the municipal court, respondents would then have contended, contrary
to their present claim, that the municipal court is without jurisdiction over the detainer
case by virtue of their contrary claim of ownership of the property. 6
ACCORDINGLY, judgment is hereby rendered, setting aside the lower court's dismissal
order of August 15, 1968 and the case is remanded to respondent Court of First Instance
with instructions to expedite the proceedings and trial and determination thereof on the
merits. With costs against respondents. This decision is immediately executory.
Makasiar, Fernandez, Guerrero, De Castro and Melencio-Herrera, JJ., concur.

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Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-15334
January 31, 1964
BOARD OF ASSESSMENT APPEALS, CITY ASSESSOR and CITY TREASURER OF QUEZON
CITY, petitioners,
vs.
MANILA ELECTRIC COMPANY, respondent.
Assistant City Attorney Jaime R. Agloro for petitioners.
Ross, Selph and Carrascoso for respondent.
PAREDES, J.:
From the stipulation of facts and evidence adduced during the hearing, the following
appear:
On October 20, 1902, the Philippine Commission enacted Act No. 484 which authorized
the Municipal Board of Manila to grant a franchise to construct, maintain and operate an
electric street railway and electric light, heat and power system in the City of Manila and
its suburbs to the person or persons making the most favorable bid. Charles M. Swift was
awarded the said franchise on March 1903, the terms and conditions of which were
embodied in Ordinance No. 44 approved on March 24, 1903. Respondent Manila Electric
Co. (Meralco for short), became the transferee and owner of the franchise.
Meralco's electric power is generated by its hydro-electric plant located at Botocan Falls,
Laguna and is transmitted to the City of Manila by means of electric transmission wires,
running from the province of Laguna to the said City. These electric transmission wires
which carry high voltage current, are fastened to insulators attached on steel towers
constructed by respondent at intervals, from its hydro-electric plant in the province of
Laguna to the City of Manila. The respondent Meralco has constructed 40 of these steel
towers within Quezon City, on land belonging to it. A photograph of one of these steel
towers is attached to the petition for review, marked Annex A. Three steel towers were
inspected by the lower court and parties and the following were the descriptions given
there of by said court:
The first steel tower is located in South Tatalon, Espaa Extension, Quezon City.
The findings were as follows: the ground around one of the four posts was
excavated to a depth of about eight (8) feet, with an opening of about one (1)
meter in diameter, decreased to about a quarter of a meter as it we deeper until
it reached the bottom of the post; at the bottom of the post were two parallel
steel bars attached to the leg means of bolts; the tower proper was attached to
the leg three bolts; with two cross metals to prevent mobility; there was no
concrete foundation but there was adobe stone underneath; as the bottom of
the excavation was covered with water about three inches high, it could not be
determined with certainty to whether said adobe stone was placed purposely or
not, as the place abounds with this kind of stone; and the tower carried five high
voltage wires without cover or any insulating materials.

The second tower inspected was located in Kamuning Road, K-F, Quezon City, on
land owned by the petitioner approximate more than one kilometer from the
first tower. As in the first tower, the ground around one of the four legs was
excavate from seven to eight (8) feet deep and one and a half (1-) meters wide.
There being very little water at the bottom, it was seen that there was no
concrete foundation, but there soft adobe beneath. The leg was likewise
provided with two parallel steel bars bolted to a square metal frame also bolted
to each corner. Like the first one, the second tower is made up of metal rods
joined together by means of bolts, so that by unscrewing the bolts, the tower
could be dismantled and reassembled.
The third tower examined is located along Kamias Road, Quezon City. As in the
first two towers given above, the ground around the two legs of the third tower
was excavated to a depth about two or three inches beyond the outside level of
the steel bar foundation. It was found that there was no concrete foundation.
Like the two previous ones, the bottom arrangement of the legs thereof were
found to be resting on soft adobe, which, probably due to high humidity, looks
like mud or clay. It was also found that the square metal frame supporting the
legs were not attached to any material or foundation.
On November 15, 1955, petitioner City Assessor of Quezon City declared the aforesaid
steel towers for real property tax under Tax declaration Nos. 31992 and 15549. After
denying respondent's petition to cancel these declarations, an appeal was taken by
respondent to the Board of Assessment Appeals of Quezon City, which required
respondent to pay the amount of P11,651.86 as real property tax on the said steel towers
for the years 1952 to 1956. Respondent paid the amount under protest, and filed a
petition for review in the Court of Tax Appeals (CTA for short) which rendered a decision
on December 29, 1958, ordering the cancellation of the said tax declarations and the
petitioner City Treasurer of Quezon City to refund to the respondent the sum of
P11,651.86. The motion for reconsideration having been denied, on April 22, 1959, the
instant petition for review was filed.
In upholding the cause of respondents, the CTA held that: (1) the steel towers come within
the term "poles" which are declared exempt from taxes under part II paragraph 9 of
respondent's franchise; (2) the steel towers are personal properties and are not subject to
real property tax; and (3) the City Treasurer of Quezon City is held responsible for the
refund of the amount paid. These are assigned as errors by the petitioner in the brief.
The tax exemption privilege of the petitioner is quoted hereunder:
PAR 9. The grantee shall be liable to pay the same taxes upon its real estate,
buildings, plant (not including poles, wires, transformers, and insulators),
machinery and personal property as other persons are or may be hereafter
required by law to pay ... Said percentage shall be due and payable at the time
stated in paragraph nineteen of Part One hereof, ... and shall be in lieu of all
taxes and assessments of whatsoever nature and by whatsoever authority upon
the privileges, earnings, income, franchise, and poles, wires, transformers, and
insulators of the grantee from which taxes and assessments the grantee is hereby
expressly exempted. (Par. 9, Part Two, Act No. 484 Respondent's Franchise;
emphasis supplied.)
The word "pole" means "a long, comparatively slender usually cylindrical piece of wood or
timber, as typically the stem of a small tree stripped of its branches; also by extension, a
similar typically cylindrical piece or object of metal or the like". The term also refers to

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"an upright standard to the top of which something is affixed or by which something is
supported; as a dovecote set on a pole; telegraph poles; a tent pole; sometimes,
specifically a vessel's master (Webster's New International Dictionary 2nd Ed., p. 1907.)
Along the streets, in the City of Manila, may be seen cylindrical metal poles, cubical
concrete poles, and poles of the PLDT Co. which are made of two steel bars joined
together by an interlacing metal rod. They are called "poles" notwithstanding the fact that
they are no 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, 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 consists of a framework
of four steel bars or strips which are bound by steel cross-arms atop of which are crossarms 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 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.
In a proceeding to condemn land for the use of electric power wires, in which the law
provided that wires shall be constructed upon suitable poles, this term was construed to
mean either wood or metal poles and in view of the land being subject to overflow, and
the necessary carrying of numerous wires and the distance between poles, the statute was
interpreted to include towers or poles. (Stemmons and Dallas Light Co. (Tex) 212 S.W. 222,
224; 32-A Words and Phrases, p. 365.)
The term "poles" was also used to denominate the steel supports or towers used by an
association used to convey its electric power furnished to subscribers and members,
constructed for the purpose of fastening high voltage and dangerous electric wires
alongside public highways. The steel supports or towers were made of iron or other metals
consisting of two pieces running from the ground up some thirty feet high, being wider at
the bottom than at the top, the said two metal pieces being connected with criss-cross
iron running from the bottom to the top, constructed like ladders and loaded with high
voltage electricity. In form and structure, they are like the steel towers in question. (Salt
River Valley Users' Ass'n v. Compton, 8 P. 2nd, 249-250.)
The term "poles" was used to denote the steel towers of an electric company engaged in
the generation of hydro-electric power generated from its plant to the Tower of Oxford
and City of Waterbury. These steel towers are about 15 feet square at the base and
extended to a height of about 35 feet to a point, and are embedded in the cement
foundations sunk in the earth, the top of which extends above the surface of the soil in the
tower of Oxford, and to the towers are attached insulators, arms, and other equipment
capable of carrying wires for the transmission of electric power (Connecticut Light and
Power Co. v. Oxford, 101 Conn. 383, 126 Atl. p. 1).
In a case, the defendant admitted that the structure on which a certain person met his
death was built for the purpose of supporting a transmission wire used for carrying hightension electric power, but claimed that the steel towers on which it is carried were so

large that their wire took their structure out of the definition of a pole line. It was held
that in defining the word pole, one should not be governed by the wire or material of the
support used, but was considering the danger from any elevated wire carrying electric
current, and that regardless of the size or material wire of its individual members, any
continuous series of structures intended and used solely or primarily for the purpose of
supporting wires carrying electric currents is a pole line (Inspiration Consolidation Cooper
Co. v. Bryan 252 P. 1016).
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 electric power system of the
respondent Meralco, for the conveyance of electric current from the source thereof to its
consumers. If the respondent would be required to employ "wooden poles", or "rounded
poles" as it used to do fifty years back, then one should admit that the Philippines is one
century behind the age of space. It should also be conceded by now that steel towers, like
the ones in question, for obvious reasons, can better effectuate the purpose for which the
respondent's franchise was granted.
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:
(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 construction 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, 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 in the land in which the steel supports or towers are constructed.

109

It is finally contended that the CTA erred in ordering the City Treasurer of Quezon City to
refund the sum of P11,651.86, despite the fact that Quezon City is not a party to the case.
It is argued that as the City Treasurer is not the real party in interest, but Quezon City,
which was not a party to the suit, notwithstanding its capacity to sue and be sued, he
should not be ordered to effect the refund. This question has not been raised in the court
below, and, therefore, it cannot be properly raised for the first time on appeal. The herein
petitioner is indulging in legal technicalities and niceties which do not help him any; for
factually, it was he (City Treasurer) whom had insisted that respondent herein pay the real
estate taxes, which respondent paid under protest. Having acted in his official capacity as
City Treasurer of Quezon City, he would surely know what to do, under the circumstances.
IN VIEW HEREOF, the decision appealed from is hereby affirmed, with costs against the
petitioners.
Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Barrera and
Regala, JJ., concur.
Makalintal, J., concurs in the result.
Dizon, J., took no part.

110