G.R. No.
198585 July 2, 2012 and her siblings, Melinda and Hernando, inherited the
REPUBLIC OF THE PHILIPPINES, Petitioner,
vs.
METRO INDEX REALTY AND DEVELOPMENT
CORPORATION, Respondent.
DECISION
REYES, J.:
This is a petition for review on certiorari assailing the
Decision1 dated September 14, 2011 of the Court of Appeals
(CA) in CA-G.R. CV No. 94616.
The Facts
Sometime in June 2006, Metro Index Realty and
Development Corporation (respondent) filed with the
Regional Trial Court (RTC), Naic, Cavite an application for
judicial confirmation of title over three (3) parcels of land
located at Barangay Alulod/Mataas na Lupa, Indang, Cavite.
These properties have a consolidated area of 39,490 square
meters and more particularly described as Lot No. 16742
Csd-04-014277-D, Lot No. 17154 and Lot No. 17155 Cad-
459-D of the Indang Cadastre.
During the hearings on the application, which was docketed
as LRC Case No. NC-2005-0006, the respondent presented
two (2) witnesses, Enrico Dimayuga (Enrico) and Herminia
Sicap-Fojas (Herminia). Enrico, who was the respondents
Project Documentation Officer, testified that: (a) the
respondent bought the subject properties from Herminia,
Melinda Sicap (Melinda), and Hernando Sicap (Hernando);
(b) the subject properties had been declared for tax
purposes in the respondents name since 2006; (c) the
subject properties are alienable and disposable as evidenced
by the certification issued by the Department of
Environment and Natural
Resources (DENR); (d) as shown by their respective
affidavits, the adjoining lot owners had no adverse claim and
objections to the respondents application; and (e) the
respondent and its predecessors-in-interest had been in
possession of the subject properties for more than fifty (50)
years. Herminia, on the other hand, testified that: (a) she
constructive possession of the entire tract, so long as no
subject properties from their parents, Brigido Sicap and
Juana Espineli; (b) their parents had been in possession of
the subject properties since 1956 as shown by the tax
declarations in their name; (c) from the time they inherited
the subject properties, they had actively cultivated them and
religiously paid the taxes due;2 and (d) the subject
properties are planted with coconut, banana, santol, palay
and corn.3
On August 7, 2009, the RTC issued a Decision4 granting the
respondents application, ratiocinating that:
From the evidence presented by the applicant thru counsel,
this Court finds that the land being applied for registration
is alienable and disposable land; that it is not within any
military or naval reservation; that the possession of herein
applicant as well as that of its predecessor(s)-in-interest has
(sic) been open, public[,] continuous, notorious and adverse
to the whole world and therefore, the applicant is entitled to
the relief prayed for.5
On appeal to the CA, the same was denied. In its assailed
decision, the CA ruled that while only a few trees are found
on the subject properties, this fact coupled with the diligent
payment of taxes since 1956 sufficed to substantiate the
claim that the respondent and its predecessors-in-interest
had been in possession in the manner and for the length of
time required by law.
Although as a rule, tax declarations are not conclusive
evidence of ownership, they are proof that the holder has a
claim of title over the property and serve as sufficient basis
for inferring possession.
It may be true that only few trees are planted and grown on
the lots, but this does not mean that appellee and their
predecessors-in-interest do now own them. Surely,
ownership is not measured alone by the number or kind of
crops planted on the land. Possession in the eyes of the law
does not mean that a man has to have his feet on every
square meter of ground before it can be said that he is in
possession. Actual possession consists in the manifestation
of acts of dominion over it of such a nature as a party would
naturally exercise over his own property. The general rule is
that the possession and cultivation of a portion of a tract
under claim of ownership of its entirely (sic) is a
portion thereof is in the adverse possession of another. At
any rate, some owners may be hardworking enough to fully
utilize their lands, some may not be as hardworking. But
both do not retain or lose their ownership on the basis alone
of the degree of hard work they put into their respective
lands.
This Court finds that while appellees predecessors-in-
interest may not have fully tilled the lots, this does not
destroy their open, continuous, exclusive and notorious
possession thereof, in the concept of owner. They have
proven their particular acts of ownership by planting crops
on the lots, declaring them for tax purposes in their names,
religiously paying taxes thereon since 1956 onward, and
retaining peaceful, open, uninterrupted, exclusive and
notorious possession of it for over 50 years. x x x:6 (Citation
omitted)
In the instant petition, this Court is urged to reverse the CA
as the respondent allegedly failed to prove its compliance
with the requirements of either Section 14(1) or Section
14(2) of Presidential Decree (P.D.) No. 1529.
Assuming that the respondents application was anchored
on Section 14(1), there is no evidence that possession and
occupation of its predecessors-in-interest commenced on
June 12, 1945 or earlier. In fact, the earliest tax declaration
presented by the respondent was for the year 1956. On the
other hand, assuming that the respondents claim of
imperfect title is based on Section 14(2), the subject
properties cannot be acquired by prescription as there is no
showing that they had been classified as patrimonial at least
thirty (30) years prior to the filing of the application. The
respondent failed to show proof of an official declaration
that the subject properties are no longer intended for public
service or for the development of national wealth; hence, the
subject properties cannot be acquired by prescription.
In any case, the petitioner posited, the CA erred in finding
that the respondent and its predecessors-in-interest
possessed and occupied the property openly, continuously,
notoriously and exclusively for more than fifty (50) years.
Tax declarations, per se, are not conclusive evidence of
ownership. Alternatively, while the tax declarations are
accompanied by the claim that the subject properties are
planted with coconut and fruit-bearing trees, their numbers
are insignificant to suggest actual cultivation. Moreover,
only the tax declarations in the name of the respondent
show the existence of these fruit-bearing trees.
Our Ruling
Finding merit in the foregoing submissions, this Court
resolves to GRANT this petition. The issue of whether the
respondent had proven that it is entitled to the benefits of
P.D. No. 1529 on confirmation of imperfect titles should be
resolved against it.
It is not clear from the assailed decision of the CA as well as
that of the RTC whether the grant of the respondents
application is based on Section 14(1) or Section 14(2) of P.D.
No. 1529. Nonetheless, considering the respondents
evidence purportedly demonstrating that its predecessors-
in-interest started to possess and occupy the subject
properties sometime in 1956 and not on June 12, 1945 or
earlier, the reasonable conclusion is that its claim of having
acquired an imperfect title over the subject properties is
premised on its supposed compliance with the requirements
of Section 14(2), which states:
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:
xxxx
(2) Those who have acquired ownership of private lands by
prescription under the provisions of existing laws. That
properties of the public dominion are not susceptible to
prescription and that only properties of the State that are no
longer earmarked for public use, otherwise known as
patrimonial, may be acquired by prescription are
fundamental, even elementary, principles in this
jurisdiction. In Heirs of Mario Malabanan v. Republic,7 this
Court, in observance of the foregoing, clarified the import of
Section 14(2) and made the following declarations: (a) the
prescriptive period for purposes of acquiring an imperfect
title over a property of the State shall commence to run from
the date an official declaration is issued that such property
is no longer intended for public service or the development
of national wealth; and (b) prescription will not run as
against the State even if the property has been previously
classified as alienable and disposable as it is that official
declaration that converts the property to patrimonial.
Particularly:
(2) In complying with Section 14(2) of the Property
Registration Decree, consider that under the Civil Code,
prescription is recognized as a mode of acquiring ownership
of patrimonial property.
However, public domain lands become only patrimonial
property not only with a declaration that these are alienable
and disposable. There must also be an express government
manifestation that the property is already patrimonial or no
longer retained for public service or the development of
national wealth, under Article 422 of the Civil Code. And
only when the property has become patrimonial can the
prescriptive period for the acquisition of property of the
public dominion begin to run.8
The Court deemed it appropriate to reiterate the foregoing
principles in Republic v. Rizalvo, Jr.9 as follows:
On this basis, respondent would have been eligible for
application for registration because his claim of ownership
and possession over the subject property even exceeds
thirty (30) years. However, it is jurisprudentially clear that
the thirty (30)-year period of prescription for purposes of
acquiring ownership and registration of public land under
Section 14(2) of P.D. No. 1529 only begins from the moment
the State expressly declares that the public dominion
property is no longer intended for public service or the
development of national wealth or that the property has
been converted into patrimonial. x x x10
Simply put, it is not the notorious, exclusive and
uninterrupted possession and occupation of an alienable
and disposable public land for the mandated periods that
converts it to patrimonial. The indispensability of an official
declaration that the property is now held by the State in its
private capacity or placed within the commerce of man for
prescription to have any effect against the State cannot be
overemphasized. This Court finds no evidence of such
official declaration and for this reason alone, the
respondents application should have been dismissed
outright.
It is rather unfortunate that the lower courts operated on
the erroneous premise that a public land, once declared
alienable and disposable, can be acquired by prescription.
Indeed, familiarity with the principles cited above would
have instantly alerted them to the inherent incongruity of
such proposition. First, an alienable and disposable land of
the public domain is not necessarily patrimonial. For while
the property is no longer for public use, the intent to use it
for public service or for the development of national wealth
is presumed unless the contrary is expressly manifested by
competent authority. Second, while the State had already
deemed it proper to release the property for alienation and
disposition, the only mode which the law provides for its
acquisition is that provided under Section 14(1) of P.D. No.
1529.
It was therefore of no moment if the respondent and its
predecessors-in-interest had allegedly been in possession
and occupation of the subject properties for more than fifty
(50) years for the subject properties cannot be acquired by
prescription for as long as they remain reserved for public
service or the development of national wealth. That there
was much ado on whether the evidence on the character
and nature of the respondents possession and that of its
predecessors-in-interest measured up to the standards
imposed by law and jurisprudence is definitely futile and
otiose; the primary question of whether the subject
properties are patrimonial, hence, may be acquired by
prescription should have been addressed first hand but
regrettably neglected.
Worse than its failure to see that the subject properties
cannot be acquired by prescription, the CA erred in
concluding that the possession and occupation of the
respondent and its predecessors-in-interest was in the
manner contemplated by law. The CA is definitely mistaken
in downplaying the importance and indispensability of
demonstrating actual cultivation and development in
substantiating a claim of imperfect title and in putting much
premium on the religious payment of realty taxes effected
by the respondent and its predecessors-in-interest. It is
well-settled that tax declarations are mere bases for
inferring possession. They must be coupled with proof of
actual possession for them to constitute "well-nigh
incontrovertible" evidence of a claim of ownership.11
Moreover, it is undisputed that the number of coconut trees
is unspecified while the number of fruit-bearing trees is too
few (three santol, one avocado and one star apple).
However, the CA haphazardly ruled that this warranted the
application of the doctrine of constructive possession
without considering the size of the subject properties
contrary to this Courts pronouncements in Spouses
Rumarate v. Hernandez:12
However, the records do not support the argument of
respondents that Santiagos alleged possession and
cultivation of Lot No. 379 is in the nature contemplated by
the Public Land Act which requires more than constructive
possession and casual cultivation. As explained by the Court
in Director of Lands v. Intermediate Appellate Court:
It must be underscored that 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 one to qualify
under paragraph (b) of the aforesaid section, his possession
of the land must not be mere fiction. As this Court stated,
through then Mr. Justice Jose P. Laurel, in Lasam vs. The
Director of Lands:
"x x x Counsel for the applicant invokes the doctrine laid
down by us in Ramos vs. Director of Lands (39 Phil. 175,
180). (See also Rosales vs. Director of Lands, 51 Phil. 302,
304). But it should be observed that the application of the
doctrine of constructive possession in that case is subject to
certain qualifications, and this court was careful to observe
that among these qualifications is one particularly relating
to the size of the tract in controversy with reference to the
portion actually in possession of the claimant. While,
therefore, possession in the eyes of the law does not mean
that a man has to have his feet on every square meter of
ground before it can be said that he is in possession,
possession under paragraph 6 of section 54 of Act No. 926,
as amended by paragraph (b) of section 45 of Act No. 2874,
is not gained by mere nominal claim. The mere planting of a
sign or symbol of possession cannot justify a Magellan-like
claim of dominion over an immense tract of territory.
Possession as a means of acquiring ownership, while it may
be constructive, is not a mere fiction x x x."
Earlier, in Ramirez vs. The Director of Lands, this Court
noted:
"x x x The mere fact of declaring uncultivated land for
taxation purposes and visiting it every once in a while, as
was done
by him, does not constitute acts of possession."13 (Citation
omitted)
Rather than proof of constructive possession, the presence
of a meager number of plantings on the subject properties
shows that the respondent and its predecessors-in-interest
engaged in mere casual cultivation, which does not
constitute possession under claim of ownership. As ruled in
Republic of the Philippines, et al. v. Hon. Vera etc., et al.:14
A mere casual cultivation of portions of the land by the
claimant does not constitute possession under claim of
ownership. In that sense, possession is not exclusive and
notorious so as to give rise to a presumptive grant from the
State.15
Republic of the Philippines v. Intermediate Appellate
Court,16 which is an illustration of what is considered casual
cultivation, states:
But even granting that the witnesses presented by herein
respondent applicants were indeed bona fide overseers and
tenants or workers of the land in question, it appears rather
strange why only about 3,000 coconut trees and some fruit
trees were planted (2,000 coconut trees on Lot 1 which is
119 hectares, and 1,000 coconut trees on Lot 2 which is 19
hectares) on the vast tract of land subject of the instant
petition. In a practical and scientific way of planting, a one-
hectare land can be planted to about 114 coconut trees. In
the instant case, if the hired tenants and workers of
respondent applicants managed to plant only 3,000 coconut
trees, it could only mean that about only 25 hectares out of
the 138 hectares claimed by herein respondent applicants
were cleared, cultivated, and planted to coconut trees and
fruit trees. Once planted, a coconut is left to grow and need
not be tended or watched. This is not what the law considers
as possession under claim of ownership. On the contrary, it
merely showed casual or occasional cultivation of portions
of the land in question. In short, possession is not exclusive
nor notorious, much less continuous, so as to give rise to a
presumptive grant from the government.17
Furthermore, in Wee v. Republic, 18 this Court held it is not
enough that improvements or signs of use and cultivation
can be found on the property; there must be proof that the
use or development of the property is attributable to the
applicant and his predecessors-in-interest:
We are, therefore, constrained to conclude that the mere
existence of an unspecified number of coffee plants, sans
any evidence as to who planted them, when they were
planted, whether cultivation or harvesting was made or
what other acts of occupation and ownership were
undertaken, is not sufficient to demonstrate the petitioner's
right to the registration of title in her favor.19
This Court does not see why this case should be decided
otherwise given that the evidence of the alleged overt acts of
possession in the two cases cited above and in this case are
unsatisfactory and cannot be considered as "well-nigh
incontrovertible" that the law and jurisprudence requires.
WHEREFORE, premises considered, the petition is
GRANTED.
The Decision dated September 14, 2011 of the Court of
Appeals in CA-G.R.
CV No. 94616 is hereby REVERSED and SET ASIDE. The
respondent's application for original registration of Lot No.
16742 Csd-04-0 14277-D, Lot No. 17154 and Lot No. 17155
Cad-459-D of the Indang Cadastre is DENIED for lack of
merit.
SO ORDERED.
HEIRS OF ROMAN SORIANO, petitioners,
vs.
THE HONORABLE COURT OF APPEALS, SPOUSES
BRAULIO ABALOS and AQUILINA ABALOS,respondents.
YNARES-SANTIAGO,J.:
May a winning party in a land registration case effectively
eject the possessor thereof, whose security of tenure rights
are still pending determination before the DARAB?
The instant petition for certiorari seeks to set aside the
Decision 1 dated September 20, 1996 of the Court of
Appeals in CA-G.R. SP No. 34930 as well as its Resolution 2
dated January 15, 1997, denying petitioners' Motion for
Reconsideration.
We quote the undisputed facts as narrated by the Court of
Appeals, to wit
The property subject of this case is a parcel of land
containing an area of 24,550 square meters, more or less,
located in Lingayen, Pangasinan, and particularly described
as follows:
A parcel of land (Nipa with an area of 8,410 square meters;
fishpond with an area of 14,000 square meters; and
residential land with an area of 1,740 square meters, more
or less. Bounded on the N, by river and Filemon Anselmo; on
the South by Alejandro Soriano and Filemon Anselmo; and
on the West by Fortunata Soriano.
Originally owned by Adriano Soriano until his death in 1947,
the above-described property passed on to his heirs who
leased the same to spouses David de Vera and Consuelo
Villasista for a period of fifteen (15) years beginning July 1,
1967 with Roman Soriano, one of the children of Adriano
Soriano, acting as caretaker of the property during the
period of the lease. After executing an extra judicial
settlement among themselves, the heirs of Adriano Soriano
subsequently subdivided the property into two (2) lots, Lot
No. 60052 and Lot No. 8459. Lot No. 60052 was assigned to
Lourdes, Candido and the heirs of Dionisia while Lot No.
8459 was assigned to Francisca, Librada, Elocadio and
Roman. In 1971, Lot No. 60052 was sold by Lourdes,
Candido and the heirs of Dionisia to petitioner spouses
Braulio and Aquilina Abalos (hereinafter referred to as
petitioners), while, Elocadio, Francisca and Librada sold
their three-fourths shares in Lot No. 8459 also to
petitioners.
On March 14, 1968, the de Vera spouses ousted Roman
Soriano as caretaker and appointed Isidro Verzosa and Vidal
Verzosa as his substitutes. Thereafter, Roman Soriano
filedCAR Case No. 1724-P-68 for reinstatement and
reliquidation against the de Vera spouses. The agrarian
court authorized the ejectment of Roman Soriano but on
appeal, the decision was reversed by the Court of Appeals,
which decision became final and executory. However, prior
to the execution of the said decision, the parties entered into
a post-decisional agreement wherein the de Vera spouses
allowed Roman Soriano to sub-lease the property until the
termination of the lease in 1982. In an Order dated
December 22, 1972, the post-decisional agreement was
approved by the agrarian court.
On August 16, 1976, petitioners filed with the Regional Trial
Court of Lingayen, Pangasinan, Branch 38, an application for
registration of title over Lot No. 60052 and three-fourths
(3/4)pro-indiviso of Lot No. 8459, docketed asLRC Case No.
N-3405. Said application for registration was granted by the
trial court, acting as a land registration court, per Decision
dated June 27, 1983. On appeal, the Court of Appeals
affirmed the decision of the land registration court. The
petition for review filed with the Supreme Court by Roman
Soriano docketed asG.R. 70842, was denied for lack of merit
and entry of judgment was entered on December 16, 1985.
Meanwhile, it appears that on July 15, 1983, a day after the
promulgation of the land registration court's decision,
Roman Soriano, together with Elocadio and Librada Soriano,
filed before the Regional Trial Court of Lingayen, Branch 37,
and against petitioners, an action for annulment of
document and/or redemption, ownership and damages,
docketed asCivil Case No. 159568 (sic; should be 15958).
Petitioners filed a motion to dismiss on the ground ofres
judicata, pendency of another action, laches, misjoinder of
parties and lack of jurisdiction, which was denied by the
trial court.
Thereafter, on August 22, 1984, or eleven (11) years after
the approval of the post-decisional agreement between
Roman Soriano and the spouses de Vera inCAR Case No.
1724-P-68 for reinstatement and reliquidation, petitioners
filed with the agrarian court a motion for execution of said
post-decisional agreement which allowed Roman Soriano to
sub-lease the property. The motion prayed that petitioners
be placed in possession of the subject property, jointly with
Roman Soriano, and to levy so much of Roman's property to
answer for the use and occupation by Soriano of 6/7 share
of the property. On October 25, 1984, Roman Soriano filed a
motion to suspend hearing on the rental demanded by
petitioners, which, however, was denied by the agrarian
court. The agrarian court likewise authorized the
substitution of the de Vera spouses by petitioners. Soriano's
motion for reconsideration was also denied, prompting
Soriano to file a petition for certiorari with the Court of
Appeals.
In the meantime, Roman Soriano died on December 11,
1985. Thus, the complaint inCivil Case No. 159568(sic) for
annulment of document and/or redemption, ownership and
damages, was amended to substitute Soriano's heirs, herein
private respondents, as party-plaintiffs. The complaint was
again amended to include Juanito Ulanday as party-
defendant for having allegedly purchased part of the
disputed property from petitioners. On motion of
petitioners, the re-amended complaint was dismissed by the
trial court on the ground that the re-amended complaint
altered the cause of action. Upon reconsideration, the
dismissal was set aside and petitioners were ordered to file
their Answer, in view of which petitioners filed a petition for
certiorari and prohibition with the Court of Appeals,
docketed asC.A. GR SP No. 22149.
On April 25, 1990, the Court of Appeals denied the petition
filed by Roman Soriano (substituted by private
respondents) impugning the denial of their motion to
suspend hearing on the rental demanded by petitioners, and
authorizing the substitution of the de Vera spouses by
petitioners, on the ground that no grave abuse of discretion
was committed by the agrarian court. Thus, private
respondents filed a petition for review on certiorari with the
Supreme Court, docketed asG.R. 93401.
Meanwhile, on December 7, 1990, the Court of Appeals
inC.A. GR SP No. 22149, also denied the petition for certiorari
and prohibition filed by petitioners, ruling that the land
registration court committed no error when it refused to
adhere to the rule ofres judicata. Petitioners then filed with
the Supreme Court a petition for review on certiorari,
docketed asG.R. 99843.
On June 26, 1991, the Supreme Court promulgated its
decision inG.R. 93401, and granted the petition filed by
private respondents. Thus, the decision of the Court of
Appeals denying the petition of private respondents was set
aside, and the motion for execution filed by petitioners
inCAR Case No. 1724-P-48 was denied.
On June 22, 1993, the Supreme Court, inG.R. 99843, reversed
and set aside the denial of the Court of Appeals inC.A. GR SP
No. 22149, and consequently,Civil Case No. 15958 for
annulment of document and/or redemption, ownership and
damages, was ordered dismissed.
On October 18, 1993, private respondents filed with the
Department of Agrarian Adjudication Board (sic), a
complaint against petitioners for "Security of Tenure with
prayer for Status Quo Order and Preliminary Injunction"
docketed asDARAB Case No. 528-P-93.
Meanwhile, it appears that the decision of the land
registration court inLRC Case No. N-3405 was partially
executed with the creation of a Committee on Partition per
Order dated March 25, 1987. On July 27, 1988, the land
registration court approved the partition of Lot No. 8459,
with Lot No. 8459-A assigned to private respondent, and Lot
No. 8459-B assigned to petitioners. For Lot No. 60052, O.C.T.
No. 22670 was issued in the name of petitioners; for Lot No.
8459-B, O.C.T. No. 22687 was issued, also in the name of
petitioner; and for Lot No. 8459-A, O.C.T. No. 22686 was
issued in the name of Roman Soriano. Dissatisfied with said
partition, private respondents appealed to the Court of
Appeals, docketed asCA G.R. SP No. 119497. The appellate
court affirmed the partition but reversed the order of the
land registration court directing the issuance of a writ of
possession on the ground of pendency ofCivil Case No.
15958.
On November 15, 1993, the trial court in compliance with
the decision of the Supreme Court inG.R. No. 99843,
dismissedCivil Case No. 15958, in view of which, petitioner,
on November 25, 1993, inLRC Case No. N-3405, moved for
the issuance of an alias writ of execution and/or writ of
possession to place them in possession of Lot No. 60052 and
Lot No. 8459-B. Per Resolution dated January 21, 1994, said
motion was held in abeyance by the land registration court
until and afterDARAB Case No. 528-P-93 for security of
tenure with prayer forstatus quo, has been resolved.
Their motion for reconsideration having been denied on
April 5, 1984, petitioners interposed an appeal to the
Supreme Court, docketed asG.R. 115073. In a Resolution
dated July 27, 1994 issued by the Supreme Court,
petitioners' appeal, which was treated as a petition for
certiorari, was referred to this Court [of Appeals] for
determination and disposition.3
The Court of Appeals annulled and set aside the Resolution
of the land registration court and ordered instead the
issuance of the corresponding writ of possession in favor of
private respondents. With the denial of their Motion for
Reconsideration, petitioners are now before us raising the
following grounds:
1. THE DECISION AND RESOLUTION OF THE RESPONDENT
COURT OF APPEALS ARE CONTRARY TO THE PROVISIONS
OF THE AGRARIAN REFORM LAWS AND JURISPRUDENCE
ON THE SECURITY OF TENURE OF TENANT-CARETAKER.
2. THE DECISION AND RESOLUTION OF THE RESPONDENT
COURT OF APPEALS ARE VIOLATIVE OF THE PROVISION
ON RIGHT TO DUE PROCESS.
3. THE HONORABLE COURT OF APPEALS GRAVELY ABUSED
ITS DISCRETION IN GIVING DUE COURSE TO THE PETITION
CONSIDERING THAT PRIVATE RESPONDENTS HAD
EARLIER PERFECTED AN APPEAL OF THE RESOLUTION
SUBJECT OF THEIR PETITION.4
Possession and ownership are distinct legal concepts. There
is ownership when a thing pertaining to one person is
completely subjected to his will in a manner not prohibited
by law and consistent with the rights of others. Ownership
confers certain rights to the owner, among which are the
right to enjoy the thing owned and the right to exclude other
persons from possession thereof. On the other hand,
possession is defined as the holding of a thing or the
enjoyment of a right. Literally, to possess means to actually
and physically occupy a thing with or without right.
Possession may be had in one of two ways: possession in the
concept of an owner and possession of a holder.5 A person
may be declared owner but he may not be entitled to
possession. The possession may be in the hands of another
either as a lessee or a tenant. A person may have
improvements thereon of which he may not be deprived
without due hearing. He may have other valid defenses to
resist surrender of possession. A judgment for ownership,
therefore, does not necessarily include possession as a
necessary incident.6
There is no dispute that private respondents' (petitioners
below) title over the land under litigation has been
confirmed with finality. As explained above, however, such
declaration pertains only to ownership and does not
automatically include possession, especially so in the instant
case where there is a third party occupying the said parcel
of land, allegedly in the concept of an agricultural tenant.
While the issue of ownership of the subject land has been
laid to rest in the final judgment of the land registration
court, the right of possession thereof is, as yet, controverted.
This is precisely what is put in issue in the security of tenure
case filed by petitioners (private respondents below) before
the DARAB.
It is important to note that although private respondents
have been declared titled owners of the subject land, the
exercise of their rights of ownership are subject to
limitations that may be imposed by law.7 The Tenancy Act
provides one such limitation. Agricultural lessees are
entitled to security of tenure and they have the right to work
on their respective landholdings once the leasehold
relationship is established. Security of tenure is a legal
concession to agricultural lessees which they value as life
itself and deprivation of their landholdings is tantamount to
deprivation of their only means of livelihood.8 The exercise
of the right of ownership, then, yields to the exercise of the
rights of an agricultural tenant.
However, petitioners' status as tenant has not yet been
declared by the DARAB. In keeping with judicial order, we
refrain from ruling on whether petitioners may be
dispossessed of the subject property. As ratiocinated inNona
v. Plan9
It is to the credit of respondent Judge that he has shown
awareness of the recent Presidential Decrees which are
impressed with an even more solicitous concern for the
rights of the tenants.If, therefore, as he pointed out in his
order granting the writ of possession, there is a pending case
between the parties before the Court of Agrarian Relations,
ordinary prudence, let alone the letter of the law, ought to
have cautioned him against granting the plea of private
respondents that they be placed in possession of the land in
controversy,x x x. At the time the challenged orders were
issued, without any showing of how the tenancy controversy
in the Court of Agrarian Relations was disposed of,
respondent Judge could not by himself and with due
observance of the restraints that cabin and confine his
jurisdiction pass upon the question of tenancy. (Emphasis
ours)
In its challenged Decision, the Court of Appeals relied
heavily on the principle of finality of judgments. It applied
the legal doctrine that once a judgment has become final, the
issuance of a writ of execution becomes ministerial. The
appellate court held that petitioner's situation does not fall
under any of the exceptions to this rule since his occupation
of the subject land did not transpire after the land
registration court's adjudication became final.
In so ruling, however, the Court of Appeals loses sight of the
fact that petitioner's claim of possession as a tenant of the
litigated property, if proven, entitles him to protection
against dispossession.
Private respondents argue that petitioners' tenancy claim is
barred byres judicata, having been ruled upon in G.R. Nos.
99843 and 93401. However, not being an issue in the case
before us, this question should properly be resolved in
DARAB Case No. 528-P-93. To restate, the only issue before
us is whether or not a winning party in a land registration
case can effectively eject the possessor thereof, whose
security of tenure rights are still pending determination
before the DARAB.
A judgment in a land registration case cannot be effectively
used to oust the possessor of the land, whose security of
tenure rights are still pending determination before the
DARAB. Stated differently, the prevailing party in a land
registration case cannot be placed in possession of the area
while it is being occupied by one claiming to be an
agricultural tenant, pending a declaration that the latter's
occupancy was unlawful.
WHEREFORE, the instant petition for certiorari is hereby
GRANTED. The Decision of respondent Court of Appeals in
CA-G.R. SP No. 34930 dated September 20, 1996, as well as
its Resolution dated January 15, 1997 are SET ASIDE. The
Resolution of the Regional Trial Court of Lingayen,
Pangasinan in LRC Case No. N-3405 dated January 21, 1994
is ordered REINSTATED.
SO ORDERED.
G.R. No. 166865 March 2, 2007
ANGELITA F. BUENAVENTURA and PRECIOSA F.
BUENAVENTURA, Petitioners,
vs.
REPUBLIC OF THE PHILIPPINES, Respondent.
DECISION
CHICO-NAZARIO, J.:
The case before this Court is a Petition for Review on
Certiorari under Rule 45 of the 1997 Revised Rules of Civil
Procedure seeking to annul and set aside the Decision1 and
Resolution2 of the Court of Appeals in CA-G.R. CV No. 72925
entitled, Angelita F. Buenaventura and Preciosa F.
Buenaventura vs. Republic of the Philippines, dated 23
August 2004 and 25 January 2005, respectively, which
granted the appeal filed by the Republic of the Philippines
(Republic) and declared the parcel of land subject matter of
this Petition as public land, thus, reversing the Order3 of the
Regional Trial Court (RTC) of Paraaque City dated 29
October 2001, which recognized and confirmed the rights of
herein petitioners Angelita F. Buenaventura (Angelita) and
Preciosa F. Buenaventura (Preciosa), over the subject
property, and issued a decree of registration of the same in
their favor.
The antecedent facts of the case are as follows:
Petitioners Angelita and Preciosa are the applicants for
registration of title over the subject property. They are the
heirs of spouses Amado Buenaventura and Irene Flores
(spouses Buenaventura) from whom they acquired the
subject property.
The facts reveal that the subject property was acquired by
the spouses Buenaventura from the Heirs of Lazaro de Leon,
namely: Aurelio de Leon and his sister Rodencia Sta. Agueda
even before World War II. However, it was only on 30
January 1948 that the corresponding Deed of Sale4 was
executed in favor of the spouses Buenaventura. After the
execution of the said Deed of Sale, the spouses
Buenaventura transferred the tax declaration in their name.
Consequently, Tax Declaration (T.D.) No. 5492 covering the
subject property in the names of Aurelio and Rodencia was
cancelled and T.D. No. 61035 was issued in the name of
spouses Buenaventura.
In 1978, the spouses Buenaventura transferred, by way of
Deed of Sale,6 the subject property, together with the
adjacent property, which they previously acquired from
Mariano Pascual, to their children, among whom are herein
petitioners. As a result thereof, a new tax declaration (T.D.
No. A-004-05698)7 was issued in the name of the spouses
Buenaventuras children.
Petitioners then filed an Application for Registration of Title
on 5 June 2000 before the RTC of Paraaque City of the
subject property, more particularly described as Cadastral
Lot No. 5001-B, Csd-007604-000176-D, Paraaque
Cadastre, located in San Dionisio, Paraaque City, with an
area of 3,520.92 square meters, more or less. Petitioners
alleged that "they and their predecessors-in-interest
acquired title to the said parcel of land thru inheritance,
transfer, and possession as owners of the same since time
immemorial and/or within the period provided for by law."8
As the trial court found the application to be sufficient in
form and substance, it thereby set the case for hearing, and
directed the service and publication of the notice thereof
pursuant to Section 239 of the Property Registration Decree
(Presidential Decree No. 1529).
On 27 September 2001, when the case was called for
hearing, no interested party appeared before the trial court
other than the petitioners. Consequently, petitioners
proceeded to present several documents in order to
establish compliance with the jurisdictional requirements.
The same were marked and offered in evidence before the
court a quo.
No formal opposition had been filed and no oppositor
appeared in any of the previously set hearings of the case;
hence, petitioners counsel moved for the declaration of
general default except for the Republic. The same was
granted by the court a quo. The case was then referred to a
commissioner, who directly received petitioners evidence
in chief.
Petitioners presented five witnesses, namely: Aniceta C.
Capiral, Engr. Teofilo R. La Guardia, Atty. Reginald L.
Hernandez, Ricardo H. Lopez, and herein petitioner Angelita,
in order to establish the fact that petitioners and their
predecessors have acquired vested right over the subject
property by their open, continuous, and exclusive
possession under a bona fide claim of ownership for over 50
years completely unmolested by any adverse claim,
meaning, their possession of the subject property was in the
manner and for the period required by law; likewise, to
prove the alienable and disposable character of the subject
property.
Other than the respective testimonies of the above-named
witnesses, they also presented and identified several
documents10 offered in evidence, which tend to establish
further the following: (1) petitioners fee simple title over
the subject property; (2) the nature of the possession and
occupation of the property; (3) its classification as part of
the alienable and disposable zone of the government; and
(4) the improvements introduced thereon and the taxes
paid on the subject property. Said documents were duly
admitted by the trial court.
On 29 October 2001, based on the pieces of evidence
presented by petitioners, the court a quo issued an Order
granting the application for registration of title of the
subject property, the decretal portion of which reads as
follows:
WHEREFORE, finding the application of registration of title
to the subject parcel of land, known as Lot 5001-B Cad 299,
Paraaque Cadastre, and more particularly described in
approved Survey Plan Csd 007604-000176 is hereby
confirmed and ordered registered in the names of
[petitioners] Preciosa, Angelita, [and in the names of their
other siblings] Crisostomo, and Alfredo, all surnamed
Buenaventura, free from all liens and encumbrances.
ONCE THIS DECISION has become final, let another one
issue directing the Land Registration Authority to issue the
corresponding decree.
Let copies of this [D]ecision be furnished to the adjoining
owners, Land Registration Authority, Land Management
Bureau, Office of the Solicitor General, Sec. of Public Works
and Highways, Department of Agrarian Reform, the
Director, Forest Management Bureau, Chairman
Metropolitan Manila Development Authority, DENR
[Department of Environment and Natural Resources], South
CENRO, Land Management Sector, City Mayor of Paraaque
and Registry of Deeds, Paraaque City.11
Feeling aggrieved with the aforementioned Order of the trial
court, the Republic appealed to the Court of Appeals.
According to the Republic, petitioners failed to prove
continuous, open, exclusive and notorious possession by
their predecessors-in-interest and by themselves; hence, the
trial court erred in granting petitioners application for
registration of the subject property. The Republic prayed for
the reversal of the Order of the trial court and for the
dismissal of the application for registration filed by
petitioners.
On 23 August 2004, the Court of Appeals rendered a
Decision in favor of the Republic, thus, overturning the
Order of the court a quo. The dispositive portion of the
Decision reads as:
WHEREFORE, the appeal is GRANTED and the Decision of
the Regional Trial Court, Branch 274, Paraaque City dated
October 29, 2001 is REVERSED and SET ASIDE and the
parcel of land subject matter of the application is declared
public land.12
Petitioners filed a Motion for Reconsideration of the
aforesaid Decision on 20 September 2004. In a Resolution
dated 25 January 2005 rendered by the appellate court, said
Motion for Reconsideration was forthwith denied for lack of
merit.
Hence, this Petition.
Petitioners raise the following issues for the resolution of
this Court:
I. Whether or not the Court of Appeals erred in nullifying the
Decision of the trial court confirming petitioners title over
the subject property for not being allegedly supported by
substantial evidence as required by law.
II. Whether or not the Court of Appeals gravely erred in
declaring the subject property as pubic land and ignoring
petitioners evidence of over 50 year possession in the
concept of an owner and completely unmolested by any
adverse claim.
In the Memorandum13 of the petitioners, they allege that the
appellate court committed grave error when it nullified the
trial courts Order dated 29 October 2001, which confirmed
their title to the subject property. Petitioners claim that
contrary to the findings of the Court of Appeals that the
above-mentioned Order was not supported by evidence, the
records of the case clearly speak of the existence, not
absence, of sufficient evidence to sustain the findings of the
court a quo that petitioners have established possession of
the subject property in the manner and for the period
required by law, that is by open, continuous, exclusive, and
notorious possession in the concept of an owner since 12
June 1945 or earlier, to warrant the registration of their title
to the subject property.
Petitioners likewise argue that the appellate court gravely
erred when it declared as public land the subject property
despite the fact that they were able to prove by clear and
convincing evidence that their possession of the subject
property was indeed in the manner and within the period
required by law. Having been in possession of the subject
property for more than 30 years, they have already acquired
vested right or title over the subject property by operation
of law based on the period provided for under the prevailing
land registration and property laws; hence, the Decision of
the Court of Appeals is inconsistent with the facts and the
law.
The Petition is meritorious.
In resolving the issues involved in the present case, there is
a need for this Court to re-examine the facts of the case for
the proper determination of the issues raised herein.
As a rule, in the exercise of the Supreme Courts power of
review, the 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 of the
case considering that the findings of fact of the Court of
Appeals are conclusive and binding on the Court.14However,
the rule is not without exceptions. There are several
recognized exceptions15 in which factual issues may be
resolved by this Court and two of these exceptions find
application in this present case, to wit: (1) when the findings
of the appellate court are contrary to those of the trial court;
and (2) when the findings of fact of the appellate court are
premised on the supposed absence of evidence but
contradicted by the evidence on record.
The issues presented by petitioners will be discussed
concurrently, since they are interrelated.
In the assailed Decision of the Court of Appeals, it ruled that
petitioners failed to show possession and occupation of the
subject property under a bona fide claim of ownership since
12 June 1945 or earlier as provided for in Section 14(1) of
the Property Registration Decree. It further said that the
testimonial evidence presented by petitioners was not
sufficient to prove petitioners possession in the manner and
within the period required by the aforesaid law because
petitioners witnesses merely testified on their familiarity
with the subject property.
Section 14 of the Property Registration Decree speaks of
who may apply for registration of land. The said provision of
law refers to an original registration through ordinary
registration proceedings.16 It specifically provides:
SEC. 14. Who may apply. The following persons may file in
the proper Court of First Instance [now Regional Trial
Court] 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.
(2) Those who have acquired ownership of private lands by
prescription under the provisions of existing laws.
From the aforesaid provisions of the Property Registration
Decree, we can deduce that there are three requisites for the
filing of an application for registration of title under the first
category, to wit: (1) that the property in question is
alienable and disposable land of the public domain; (2) that
the applicants by themselves or through their predecessors-
in-interest have been in open, continuous, exclusive and
notorious possession and occupation; and (3) that such
possession is under a bona fide claim of ownership since 12
June 1945 or earlier.17 The second classification relates to
the acquisition of private lands by prescription.
In the case at bar, the Republic argues, through the Office of
the Solicitor General, that petitioners own evidence tends to
show that the subject property is not alienable and
disposable because it was a salt bed and a fishpond and
under Section 2, Article XII of the Constitution, except for
agricultural lands, all other natural resources shall not be
alienated. Likewise, under the Regalian Doctrine, all lands
not otherwise appearing to be clearly within private
ownership are presumed to belong to the State.
It is true that under the Regalian Doctrine all lands of the
public domain belong to the State and all lands not
otherwise appearing to be clearly within private ownership
are presumed to belong to the State.18 However, such
presumption is not conclusive. It can be rebutted by the
applicants presentation of incontrovertible evidence
showing that the land subject of the application for
registration is alienable and disposable.19
After a thorough examination of the records of this case, this
Court found out that petitioners offered in evidence a
certification20 from the Department of Environment and
Natural Resources, National Capital Region dated 29
October 2001, to prove that the subject property was
alienable and disposable land of the public domain. The said
certification contains the following statements:
This is to certify that the parcel of land as shown and
described on the reverse side of this plan- Lot 5001-B, Cad-
299, Paraaque Cadastre situated at San Dionisio,
Paraaque City, Metro Manila containing an area of 3,520.92
square meters as prepared by Geodetic Engineer Mariano V.
Flotildes for Amado Buenaventura, et al., was verified to be
within the Alienable and Disposable Land per L.C. Map 2623,
Project No. 25 of Paraaque per Forestry Administrative
Order No. 4-1141 dated January 3, 1968.21 (Emphasis
supplied.)
To our minds, the said certification is sufficient to establish
the true nature or character of the subject property. The
certification enjoys a presumption of regularity in the
absence of contradictory evidence.22 As it is, the said
certification remains uncontested and even the Republic
itself did not present any evidence to refute the contents of
the said certification. Therefore, the alienable and
disposable character of the questioned parcel of land has
been clearly established by the evidence of the petitioners,
by 3 January 1968, at the latest.
Now, going to the requisites of open, continuous, exclusive
and notorious possession and occupation under a bona fide
claim of ownership since 12 June 1945 or earlier, Republic
alleges that no sufficient evidence was adduced by
petitioners to show that they and their predecessors-in-
interest have been in exclusive possession of the subject
property since 12 June 1945 or earlier in the concept of an
owner, to which the Court of Appeals agreed. The Court of
Appeals in its decision said that:
Although they were able to show possession by their
parents, their predecessors-in-interest, since 1948, they
failed to prove the fact of possession since [12 June 1945]
before the filing of the application.23
Emphasis should be given to the fact that the Court of
Appeals, in its Decision, did not question petitioners
possession of the subject property since 1948. Verily, it even
stated in the said Decision that petitioners possession may
be reckoned from 1948, the year of the execution of the
Deed of Sale. The only reason posited by the appellate court
in denying the Order of the trial court which granted the
application for registration of title of the petitioners was the
fact that petitioners evidence was not sufficient to prove
that their possession of the subject property was since 12
June 1945 or earlier.
We agree with the findings of the Court of Appeals that the
evidence presented by petitioners was not enough to prove
that their possession of the subject property started since
12 June 1945 or earlier because the evidence established
that the questioned parcel of land was acquired by
petitioners parents only on 30 January 1948, the date of the
execution of the Deed of Absolute Sale by its previous
owners. They can neither tack their possession to that of the
previous owners because they failed to present any
evidence of possession by those prior owners. Moreover,
petitioners possession of the subject property could only
ripen into ownership on 3 January 1968, when the same
became alienable and disposable. "Any period of possession
prior to the date when the [s]ubject [property was]
classified as alienable and disposable is inconsequential and
should be excluded from the computation of the period of
possession; such possession can never ripen into ownership
and unless the land had been classified as alienable and
disposable, the rules on confirmation of imperfect title shall
not apply thereto."24
Be that as it may, this will not be an insurmountable bar to
the petitioners to have the title to the subject property
registered in their names.
In the case of Republic v. Court of Appeals,25 this Court
closely examined the land registration laws governing land
registration proceedings in the Philippines. In the aforesaid
case, the Court made the following pronouncements:
When the Public Land Act was first promulgated in 1936,
the period of possession deemed necessary to vest the right
to register their title to agricultural lands of the public
domain commenced from July 26, 1894. However, this
period was amended by R.A. [Republic Act] No. 1942, which
provided that the bona fide claim of ownership must have
been for at least thirty (30) years. Then in 1977, Section
48(b) of the Public Land Act was again amended, this time
by P.D. No. 1073, which pegged the reckoning date at June
12, 1945. This new starting point is concordant with Section
14(1) of the Property Registration Decree.
Indeed, there are no material differences between Section
14(1) of the Property Registration Decree and Section 48(b)
of the Public Land Act, as amended. True, the Public Land
Act does refer to "agricultural lands of the public domain,"
while the Property Registration Decree uses the term
"alienable and disposable lands of the public domain." It
must be noted though that the Constitution declares that
"alienable lands of the public domain shall be limited to
agricultural lands." Clearly the subject lands under Section
48(b) of the Public Land Act and Section 14(1) of the
Property Registration Decree are of the same type.
Did the enactment of the Property Registration Decree and
the amendatory P.D. No. 1073 preclude the application for
registration of alienable lands of the public domain,
possession over which commenced only after June 12,
1945? It did not, considering Section 14(2) of the Property
Registration Decree, which governs and authorizes the
application of "those who have acquired ownership of
private lands by prescription under the provisions of
existing laws."26 (Emphasis supplied.)
It becomes crystal clear from the aforesaid ruling of the
Court that even if the possession of alienable lands of the
public domain commenced only after 12 June 1945,
application for registration of the said property is still
possible by virtue of Section 14(2) of the Property
Registration Decree which speaks of prescription.
Under the Civil Code, prescription is one of the modes of
acquiring ownership.27 Article 1106 of the Civil Code
provides:
By prescription, one acquires ownership and other real
rights through the lapse of time in the manner and under the
conditions laid down by law.
Also in Article 1113 of the Civil Code, it is provided that:
All things which are within the commerce of men are
susceptible of prescription, unless otherwise provided.
Property of the State or any of its subdivision not
patrimonial in character shall not be the object of
prescription.
Likewise, Article 1137 of the Civil Code states that:
Ownership and other real rights over immovables also
prescribe through uninterrupted adverse possession thereof
for thirty years, without need of title or of good faith.
(Emphasis supplied.)
It is well-settled that properties classified as alienable and
disposable land may be converted into private property by
reason of open, continuous and exclusive possession of at
least 30 years.28 Such property now falls within the
contemplation of "private lands" under Section 14(2), over
which title by prescription can be acquired. Hence, because
of Section 14(2) of Presidential Decree No. 1529, those who
are in possession of alienable and disposable land, and
whose possession has been characterized as open,
continuous and exclusive for 30 years or more, may have the
right to register their title to such land despite the fact that
their possession of the land commenced only after 12 June
1945.29
The aforesaid jurisprudential rule truly demonstrates that,
in the present case, while petitioners possession over the
subject property can be reckoned only on 3 January 1968,
the date when according to evidence, the subject property
became alienable and disposable, they can still have the
subject property registered in their names by virtue of
Section 14(2) of the Property Registration Decree.
The records, indeed, reveal that petitioners were in
possession of the subject property for more than 30 years,
32 years to be exact, reckoned from the year 1968, when the
subject property was finally declared alienable and
disposable by the DENR to the time they filed an application
for registration of title over the subject property on 5 June
2000. Petitioners possession of the subject property since
1968 has been characterized as open, continuous, exclusive
and notorious possession and occupation in the concept of
an owner.
Petitioners presented as evidence their tax declarations
covering the years from 1948 until the third quarter of
2001. They also offered in evidence a certification30 from the
Office of the Treasurer of the City of Paraaque to prove that
realty taxes over the subject property had been duly paid by
petitioners. 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. The
voluntary declaration of a piece of property for taxation
purposes manifests not only ones sincere and honest desire
to obtain title to the property and announces his adverse
claim against the State and all other interested parties, but
also the intention to contribute needed revenues to the
Government. Such an act strengthens ones bona fide claim
of acquisition of ownership.31
In the same breath, it cannot be gainsaid that petitioners
have been in actual possession of the subject property since
1968, at the latest. According to the testimony of their
witnesses, parts of the subject property are planted with
bananas and some vegetables, and a bamboo grove. The
other parts of the subject property were used as a fishpond,
as well as devoted to salt making until 1990.32 However,
when the property was no longer suitable for agricultural
purposes, for fishpond, and for salt making because of its
conversion to non-agricultural purposes consistent with the
zonal development of the area, the petitioners backfilled the
subject property with gravel and sand, for which they paid
their farm helpers just compensation. Thereafter, they
enclosed the property with perimeter fence, installed guards
and a caretaker to prevent potential squatters from
penetrating the area.33 When tax declarations and receipts
are coupled with actual possession, they constitute evidence
of great weight and can be the basis of a claim of ownership
through prescription.34
Conspicuously, the petitioners witnesses are one in
pointing out that petitioners and their predecessors-in-
interest are the sole claimants of the subject property.
It bears stressing that the pieces of evidence submitted by
petitioners are incontrovertible. No one, not even the
Republic, presented any evidence to contradict the claims of
the petitioners that they are in possession of the subject
property and their possession of the same is open,
continuous and exclusive in the concept of an owner for
over 30 years. Verily, even the appellate court mentioned in
its Decision that petitioners were able to show possession of
the subject property as early as 1948, the only basis for its
Decision reversing the Order of the trial court being the
insufficiency of the evidence presented by petitioners to
establish their possession of the subject property prior to 12
June 1945.
IN ALL, petitioners were able to prove sufficiently that they
have been in possession of the subject property for more
than 30 years, which possession is characterized as open,
continuous, exclusive, and notorious, in the concept of an
owner. By this, the subject alienable and disposable public
land had been effectively converted into private property
over which petitioners have acquired ownership through
prescription to which they are entitled to have title through
registration proceedings. Petitioners right to have their title
to the subject property registered cannot be defeated simply
because the possession of petitioners commenced on a date
later than 12 June 1945, for the law and supplementing
jurisprudence amply, justly and rightfully provides the
necessary remedy to what would otherwise result in an
unjust and unwarranted situation. It would be the height of
injustice if petitioners registration of title over the said
property will de denied solely on that ground.
WHEREFORE, premises considered, the instant Petition is
hereby GRANTED. The Decision and Resolution of the Court
of Appeals dated 23 August 2004 and 25 January 2005,
respectively, are hereby REVERSED and SET ASIDE. The
Order of the trial court dated 29 October 2001 which
granted petitioners application for registration of the
subject property and directing the issuance of a decree of
registration in petitioners favor once the judgment has
become final and executory is hereby REINSTATED. No
costs.
SO ORDERED.
Garcia vs. CA
Facts:
This case is about the issuance of two or more transfer
certificates of title to different persons for the same lot, or
subdivisions thereof, due to the fact that the original title
was allegedly not cancelled when the first transfer
certificates of title were issued to replace the original title.
A deed of sale for lots E and G of Hacienda Maysilo and
covered by OCT No. 983 was executed in favor of Ismael
Lapus, a bona fide occupant thereof. The deed of sale was
presented for registration and contained entries showing
that it was annotated on the back of the OCT. Contrary to
SOP however, the deed of sale was not annotated on the OCT
and that consequently, that title was apparently not
cancelled.
As a result of the registration of the deed of sale, TCT No.
4910 (Lapus Title) was issued to Lapus. Upon his death,
the two lots were inherited by his daughter Carolina Lapuz-
Gozon, who had the land subdivided into 55 lots and sold
some to her now co-respondents. Lapus and successors-in-
interest have been in possession of the lands even before
1910 of more than 70 years.
In 1962, the Riveras, alleged heirs of the late Maria de la
Concepcion Vidal filed a motion in land registration cases,
alleging that they were deprived of their participation in the
Hacienda Maysilo. Since per the OCT the land seemed
unencumbered, the court adjudicated the land in their favor.
The OCT was then cancelled and TCT No. 112235 (Rivera
Title) was issued to the Riveras. Lots 5 and 7 (E and G)
were then assigned to Bartolome Rivera to Sergio Cruz and
Pacifico Garcia, and subsequent TCTs were issued in their
behalf.
Garcia had Lot 7 (G) subdivided into lots A and B, retained
lot A and assigned B to Antonio Munoz. Munoz mortgaged
lot B to Associated Banking Corp.
On the other hand, Cruz sold Lot 5 (E) to Santiago Go. Go
mortgaged Lot 5 to Philippine National Bank. Both Munoz
and Go did not pay their mortgage debts, hence the two
banks foreclosed the properties. PNB bought the mortgaged
Lot 5 at the auction, but notice of lis pendens was already
annotated on the title.
Riveras and their successors-in-interest have never set foot
on the disputed lots.
Gozon finally learned about the Riveras and others acquiring
the land, had her adverse claims registered on the titles of
lots 5 and 7 and filed an action to quiet title and damages.
The trial court ruled in favor of Gozon and co-plaintiffs and
voided the TCTs issued to the Riveras, others. CA affirmed
the decision. Garcia and PNB appealed.
Issue:
W/N the 1920 Lapus title prevails over the 1963 Rivera title
and subsequent titles derived from it?

Held:
Yes, Lapus title prevails. Lapus was an innocent purchaser
for value who validly transmitted to his successors-in-
interest his indefeasible title or ownership over the disputed
lots. That title could not be nullified or defeated by the
issuance 43 years later to other persons of another title over
the same lots due to the failure of the register of deeds to
cancel the title preceding the title issued to Lapus. This must
be so considering that Lapus and his successors-in-interest
remained in possession of the disputed lots and the rival
claimants never possessed the same.
The general rule is that in the case of two certificates of
title, purporting to include the same land, the earlier in
date prevails. It is settled that in this jurisdiction the
maxim prior est in tempore, potior est in jure (he who is
first in time is preferred in right) is followed in land
resgistration matters.
The contention of PNB that it was a buyer in good faith has
no merit because the deed of sale in favor of Lapus and the
titles issued to him and his successors-in-interest are all a
matter of public record in the registry of deeds. When a
conveyance has been properly recorded, such record is a
constructive notice of its contents and all interests, legal and
equitable, included therein. Under the rule of notice, it is
presumed that the purchaser has examined every
instrument of record affecting the title. This presumption
cannot be overcome by proof of innocence and good faith
otherwise the very purpose of the law requiring a record
would be destroyed. The bank should have made an on-the-
spot investigation of the lot mortgaged.
Decision affirmed.
G.R. No. 178906 February 18, 2009
ELVIRA T. ARANGOTE, petitioner,
vs.
SPS. MARTIN MAGLUNOB and LOURDES S. MAGLUNOB,
and ROMEO SALIDO, Respondents.
DECISION
CHICO-NAZARIO, J.:
Before this Court is a Petition for Review on Certiorari
under Rule 45 of the 1997 Revised Rules of Civil Procedure
seeking to reverse and set aside the Decision1 dated 27
October 2006 and Resolution2 dated 29 June 2007 of the
Court of Appeals in CA-G.R. SP No. 64970. In its assailed
Decision, the appellate court affirmed the Decision3dated 12
September 2000 of the Regional Trial Court (RTC), 6th
Judicial Region, Branch 1, Kalibo, Aklan, in Civil Case No.
5511, which reversed the Decision4 dated 6 April 1998 of
the 7th Municipal Circuit Trial Court (MCTC) of Ibajay-
Nabas, Ibajay, Aklan, in Civil Case No. 156; and declared5 the
herein respondent-Spouses Martin and Lourdes Maglunob
(Spouses Maglunob) and respondent Romeo Salido (Romeo)
as the lawful owners and possessors of Lot 12897 with an
area of 982 square meters, more or less, located in Maloco,
Ibajay, Aklan (subject property). In its assailed Resolution,
the appellate court denied herein petitioner Elvira T.
Arangotes Motion for Reconsideration.
Elvira T. Arangote, herein petitioner married to Ray Mars E.
Arangote, is the registered owner of the subject property, as
evidenced by Original Certificate of Title (OCT) No. CLOA-
1748.6 Respondents Martin (Martin II) and Romeo are first
cousins and the grandnephews of Esperanza Maglunob-
Dailisan (Esperanza), from whom petitioner acquired the
subject property.
The Petition stems from a Complaint7 filed by petitioner and
her husband against the respondents for Quieting of Title,
Declaration of Ownership and Possession, Damages with
Preliminary Injunction, and Issuance of Temporary
Restraining Order before the MCTC, docketed as Civil Case
No. 156.
The Complaint alleged that Esperanza inherited the subject
property from her uncle Victorino Sorrosa by virtue of a
notarized Partition Agreement8 dated 29 April 1985,
executed by the latters heirs. Thereafter, Esperanza
declared the subject property in her name for real property
tax purposes, as evidenced by Tax Declaration No. 16218
(1985).9
The Complaint further stated that on 24 June 1985,
Esperanza executed a Last Will and
Testament10 bequeathing the subject property to petitioner
and her husband, but it was never probated. On 9 June 1986,
Esperanza executed another document, an Affidavit,11 in
which she renounced, relinquished, waived and quitclaimed
all her rights, share, interest and participation whatsoever
in the subject property in favor of petitioner and her
husband. On the basis thereof, Tax Declaration No. 16218 in
the name of Esperanza was cancelled and Tax Declaration
No. 1666612(1987) was issued in the name of the petitioner
and her husband.
In 1989, petitioner and her husband constructed a house on
the subject property. On 26 March 1993, OCT No. CLOA-
1748 was issued by the Secretary of the Department of
Agrarian Reform (DAR) in the name of petitioner, married to
Ray Mars E. Arangote. However, respondents, together with
some hired persons, entered the subject property on 3 June
1994 and built a hollow block wall behind and in front of
petitioners house, which effectively blocked the entrance to
its main door.
As a consequence thereof, petitioner and her husband were
compelled to institute Civil Case No. 156.
In their Answer with Counterclaim in Civil Case No. 156,
respondents averred that they co-owned the subject
property with Esperanza. Esperanza and her siblings, Tomas
and Inocencia, inherited the subject property, in equal
shares, from their father Martin Maglunob (Martin I). When
Tomas and Inocencia passed away, their shares passed on
by inheritance to respondents Martin II and Romeo,
respectively. Hence, the subject property was co-owned by
Esperanza, respondent Martin II (together with his wife
Lourdes), and respondent Romeo, each holding a one-
third pro-indiviso share therein. Thus, Esperanza could not
validly waive her rights and interest over the entire subject
property in favor of the petitioner.
Respondents also asserted in their Counterclaim that
petitioner and her husband, by means of fraud, undue
influence and deceit were able to make Esperanza, who was
already old and illiterate, affix her thumbmark to the
Affidavit dated 9 June 1986, wherein she renounced all her
rights and interest over the subject property in favor of
petitioner and her husband. Respondents thus prayed that
the OCT issued in petitioners name be declared null and
void insofar as their two-thirds shares are concerned.
After trial, the MCTC rendered its Decision dated 6 April
1998 in Civil Case No. 156, declaring petitioner and her
husband as the true and lawful owners of the subject
property. The decretal portion of the MCTC Decision reads:
WHEREFORE, judgment is hereby rendered:
A. Declaring the [herein petitioner and her husband] the
true, lawful and exclusive owners and entitled to the
possession of the [subject property] described and referred
to under paragraph 2 of the [C]omplaint and covered by Tax
Declaration No. 16666 in the names of the [petitioner and
her husband];
B. Ordering the [herein respondents] and anyone hired by,
acting or working for them, to cease and desist from
asserting or claiming any right or interest in, or exercising
any act of ownership or possession over the [subject
property];
C. Ordering the [respondents] to pay the [petitioner and her
husband] the amount of 10,000.00 as attorneys fee. With
cost against the [respondents].13
The respondents appealed the aforesaid MCTC Decision to
the RTC. Their appeal was docketed as Civil Case No. 5511.
Respondents argued in their appeal that the MCTC erred in
not dismissing the Complaint filed by the petitioner and her
husband for failure to identify the subject property therein.
Respondents further faulted the MCTC for not declaring
Esperanzas Affidavit dated 9 June 1986 -- relinquishing all
her rights and interest over the subject property in favor of
petitioner and her husband -- as null and void insofar as
respondents two-thirds share in the subject property is
concerned.
On 12 September 2000, the RTC rendered its Decision
reversing the MCTC Decision dated 6 April 1998. The RTC
adjudged respondents, as well as the other heirs of Martin
Maglunob, as the lawful owners and possessors of the entire
subject property. The RTC decreed:
WHEREFORE, judgment is hereby rendered as follows:
1) The appealed [D]ecision is REVERSED;
2) [Herein respondents] and the other heirs of Martin
Maglunob are declared the lawful owners and possessors of
the whole [subject property] as described in Paragraph 2 of
the [C]omplaint, as against the [herein petitioner and her
husband].
3) [Petitioner and her husband] are ordered to immediately
turn over possession of the [subject property] to the
[respondents] and the other heirs of Martin Maglunob; and
4) [Petitioner and her husband] are ordered to pay
[respondents] attorneys fees of 5,000.00, other litigation
expenses of 5,000.00, moral damages of 10,000.00 and
exemplary damages of P5,000.00.14
Petitioner and her husband filed before the RTC, on 26
September 2000, a Motion for New Trial or
Reconsideration15 on the ground of newly discovered
evidence consisting of a Deed of Acceptance16 dated 23
September 2000, and notice17 of the same, which were both
made by the petitioner, for herself and in behalf of her
husband,18 during the lifetime of Esperanza. In the RTC
Order19 dated 2 May 2001, however, the RTC denied the
aforesaid Motion for New Trial or Reconsideration.
The petitioner and her husband then filed a Petition for
Review, under Rule 42 of the 1997 Revised Rules of Civil
Procedure, before the Court of Appeals, where the Petition
was docketed as CA-G.R. SP No. 64970.
In their Petition before the appellate court, petitioner and
her husband raised the following errors committed by the
RTC in its 12 September 2000 Decision:
I. It erred in reversing the [D]ecision of the [MCTC];
II. It erred in declaring the [herein respondents] and the
other heirs of Martin Maglunob as the lawful owners and
possessors of the whole [subject property];
III. It erred in declaring [OCT] No. CLOA-1748 in the name of
[herein petitioner] Elvie T. Arangote as null and void;
IV. It erred in denying [petitioner and her husbands]
[M]otion for [N]ew [T]rial or [R]econsideration dated [26
September 2000; and
V. It erred in not declaring the [petitioner and her husband]
as possessors in good faith.20
On 27 October 2006, the Court of Appeals rendered a
Decision denying the Petition for Review of petitioner and
her husband and affirming the RTC Decision dated 12
September 2000. Petitioner and her husbands subsequent
Motion for Reconsideration was similarly denied by the
Court of Appeals in its Resolution dated 29 June 2007.
Hence, petitioner21 now comes before this Court raising in
her Petition the following issues:
I. Whether the [RTC] acted with grave abuse of discretion
amounting to lack or excess of jurisdiction when it declared
the [petitioner and her husbands title to the subject
property] null and void;
II. Whether the [RTC] acted with grave abuse of discretion
amounting to lack of jurisdiction when it declared the
Affidavit of Quitclaim null and void; and
III. Whether the [RTC] and the Honorable Court of Appeals
acted with grave abuse of discretion amounting to lack or
excess of jurisdiction when it rejected petitioners claim as
possessors (sic) in good faith, hence, entitled to the rights
provided in [Article] 448 and [Article] 546 of the Civil
Code.22
Petitioner contends that the aforesaid OCT No. CLOA-1748
was issued in her name on 26 March 1993 and was
registered in the Registry of Deeds of Aklan on 20 April
1993. From 20 April 1993 until the institution of Civil Case
No. 156 on 10 June 1994 before the MCTC, more than one
year had already elapsed. Considering that a Torrens title
can only be attacked within one year after the date of the
issuance of the decree of registration on the ground of fraud
and that such attack must be through a direct proceeding, it
was an error on the part of the RTC and the Court of Appeals
to declare OCT No. CLOA-1748 null and void.
Petitioner additionally posits that both the RTC and the
Court of Appeals committed a mistake in declaring null and
void the Affidavit dated 9 June 1986 executed by Esperanza,
waiving all her rights and interest over the subject property
in favor of petitioner and her husband. Esperanzas Affidavit
is a valid and binding proof of the transfer of ownership of
the subject property in petitioners name, as it was also
coupled with actual delivery of possession of the subject
property to petitioner and her husband. The Affidavit is also
proof of good faith on the part of petitioner and her
husband.
Finally, petitioner argues that, assuming for the sake of
argument, that Esperanzas Affidavit is null and void,
petitioner and her husband had no knowledge of any flaw in
Esperanzas title when the latter relinquished her rights to
and interest in the subject property in their favor. Hence,
petitioner and her husband can be considered as possessors
in good faith and entitled to the rights provided under
Articles 448 and 546 of the Civil Code.
This present Petition is devoid of merit.
It is a hornbook doctrine that the findings of fact of the trial
court are entitled to great weight on appeal and should not
be disturbed except for strong and valid reasons, because
the trial court is in a better position to examine the
demeanor of the witnesses while testifying. It is not a
function of this Court to analyze and weigh evidence by the
parties all over again. This Courts jurisdiction is, in
principle, limited to reviewing errors of law that might have
been committed by the Court of Appeals.23 This rule,
however, is subject to several exceptions,24 one of which is
present in this case, i.e., when the factual findings of the
Court of Appeals and the trial court are contradictory.
In this case, the findings of fact of the MCTC as regards the
origin of the subject property are in conflict with the
findings of fact of both the RTC and the Court of Appeals.
Hence, this Court will have to examine the records to
determine first the true origin of the subject property and to
settle whether the respondents have the right over the same
for being co-heirs and co-owners, together with their grand
aunt, Esperanza, before this Court can resolve the issues
raised by the petitioner in her Petition.
After a careful scrutiny of the records, this Court affirms the
findings of both the RTC and the Court of Appeals as regards
the origin of the subject property and the fact that
respondents, with their grand aunt Esperanza, were co-heirs
and co-owners of the subject property.
The records disclosed that the subject property was part of
a parcel of land25 situated in Maloco, Ibajay, Aklan,
consisting of 7,176 square meters and commonly owned in
equal shares by the siblings Pantaleon Maglunob
(Pantaleon) and Placida Maglunob-Sorrosa (Placida). Upon
the death of Pantaleon and Placida, their surviving and legal
heirs executed a Deed of Extrajudicial Settlement and
Partition of Estate in July 1981,26 however, the Deed was not
notarized. Considering that Pantaleon died without issue,
his one-half share in the parcel of land he co-owned with
Placida passed on to his four siblings (or their respective
heirs, if already deceased), namely: Placida, Luis, Martin I,
and Victoria, in equal shares.
According to the aforementioned Deed of Extrajudicial
Settlement and Partition of Estate, the surviving and legal
heirs of Pantaleon and Placida agreed to have the parcel of
land commonly owned by the siblings declared for real
property tax purposes in the name of Victorino Sorrosa
(Victorino), Placidas husband. Thus, Tax Declarations No.
5988 (1942),27 No. 6200 (1945)28 and No. 7233
(1953)29 were all issued in the name of Victorino.
Since Martin I already passed away when the Deed of
Extrajudicial Settlement and Partition of Estate was
executed, his heirs30 were represented therein by
Esperanza. By virtue of the said Deed, Martin I received as
inheritance a portion of the parcel of land measuring 897
square meters.
After the death of Victorino, his heirs31 executed another
Partition Agreement on 29 April 1985, which was notarized
on the same date. The Partition Agreement mentioned four
parcels of land. The subject property, consisting of a portion
of the consolidated parcels 1, 2, and 3, and measuring
around 982 square meters, was allocated to Esperanza. In
comparison, the property given to Esperanza under the
Partition Agreement is bigger than the one originally
allocated to her earlier under the Deed of Extrajudicial
Settlement and Partition of Estate dated July 1981, which
had an area of only 897 square meters. It may be reasonably
assumed, however, that the subject property, measuring 982
square meters, allocated to Esperanza under the Partition
Agreement dated 29 April 1985, is already inclusive of the
smaller parcel of 897 square meters assigned to her under
the Deed of Extrajudicial Settlement and Partition of Estate
dated July 1981. As explained by the RTC in its 12
September 2000 Decision:
The [subject property] which is claimed by the [herein
petitioner and her husband] and that which is claimed by
the [herein respondents] are one and the same, the
difference in area and technical description being due to the
repartition and re-allocation of the parcel of land originally
co-owned by Pantaleon Maglunob and his sister Placida
Maglunob and subsequently declared in the name of
[Victorino] under Tax Declaration No. 5988 of 1949.32
It is clear from the records that the subject property was not
Esperanzas exclusive share, but also that of the other heirs
of her father, Martin I. Esperanza expressly affixed her
thumbmark to the Deed of Extrajudicial Settlement of July
1981 not only for herself, but also on behalf of the other
heirs of Martin I. Though in the Partition Agreement dated
29 April 1985 Esperanza affixed her thumbmark without
stating that she was doing so not only for herself, but also on
behalf of the other heirs of Martin I, this does not mean that
Esperanza was already the exclusive owner thereof. The
evidence shows that the subject property is the share of the
heirs of Martin I. This is clear from the sketch33 attached to
the Partition Agreement dated 29 April 1985, which reveals
the proportionate areas given to the heirs of the two
siblings, Pantaleon and Placida, who were the original
owners of the whole parcel of land34 from which the subject
property was taken.
Further, it bears emphasis that the Partition Agreement was
executed by and among the son, grandsons, granddaughters
and cousins of Victorino. Esperanza was neither the
granddaughter nor the cousin of Victorino, as she was only
Victorinos grandniece. The cousin of Victorino is Martin I,
Esperanzas father. In effect, therefore, the subject property
allotted to Esperanza in the Partition Agreement was not
her exclusive share, as she holds the same for and on behalf
of the other heirs of Martin I, who was already deceased at
the time the Partition Agreement was made.
To further bolster the truth that the subject property was
not exclusively owned by Esperanza, the Affidavit she
executed in favor of petitioner and her husband on 6 June
1985 was worded as follows:
That I hereby renounce, relinquish, waive and quitclaim all
my rights, share, interest and participation whatsoever in
the [subject property] unto the said Sps. Ray Mars Arangote
and Elvira T. Arangote, their heirs, successors, and assigns
including the improvement found thereon;35
Logically, if Esperanza fully owned the subject property, she
would have simply waived her rights to and interest in the
subject property, without mentioning her "share" and
"participation" in the same. By including such words in her
Affidavit, Esperanza was aware of and was limiting her
waiver, renunciation, and quitclaim to her one-third share
and participation in the subject property.
Going to the issues raised by the petitioner in this Petition,
this Court will resolve the same concurrently as they are
interrelated.
In this case, the petitioner derived her title to the subject
property from the notarized Affidavit executed by
Esperanza, wherein the latter relinquished her rights, share,
interest and participation over the same in favor of the
petitioner and her husband.
A careful perusal of the said Affidavit reveals that it is not
what it purports to be. Esperanzas Affidavit is, in fact, a
Donation. Esperanzas real intent in executing the said
Affidavit was to donate her share in the subject property to
petitioner and her husband.
As no onerous undertaking is required of petitioner and her
husband under the said Affidavit, the donation is regarded
as a pure donation of an interest in a real property covered
by Article 749 of the Civil Code.36 Article 749 of the Civil
Code provides:
Art. 749. In order that the donation of an immovable may be
valid, it must be made in a public document, specifying
therein the property donated and the value of the charges
which the donee must satisfy.
The acceptance may be made in the same deed of donation
or in a separate public document, but it shall not take effect
unless it is done during the lifetime of the donor.
If the acceptance is made in a separate instrument, the
donor shall be notified thereof in an authentic form, and this
step shall be noted in both instruments.
From the aforesaid provision, there are three requisites for
the validity of a simple donation of a real property, to wit:
(1) it must be made in a public instrument; (2) it must be
accepted, which acceptance may be made either in the same
Deed of Donation or in a separate public instrument; and (3)
if the acceptance is made in a separate instrument, the
donor must be notified in an authentic form, and the same
must be noted in both instruments.
This Court agrees with the RTC and the Court of Appeals
that the Affidavit executed by Esperanza relinquishing her
rights, share, interest and participation over the subject
property in favor of the petitioner and her husband suffered
from legal infirmities, as it failed to comply with the
aforesaid requisites of the law.
In Sumipat v. Banga,37 this Court declared that title to
immovable property does not pass from the donor to the
donee by virtue of a Deed of Donation until and unless it has
been accepted in a public instrument and the donor duly
notified thereof. The acceptance may be made in the very
same instrument of donation. If the acceptance does not
appear in the same document, it must be made in another.
Where the Deed of Donation fails to show the acceptance, or
where the formal notice of the acceptance, made in a
CLOA-1748 in the name of petitioner and her husband null
separate instrument, is either not given to the donor or else
and void.
not noted in the Deed of Donation and in the separate
acceptance, the donation is null and void.38
In the present case, the said Affidavit, which is tantamount
to a Deed of Donation, met the first requisite, as it was
notarized; thus, it became a public instrument. Nevertheless,
it failed to meet the aforesaid second and third requisites.
The acceptance of the said donation was not made by the
petitioner and her husband either in the same Affidavit or in
a separate public instrument. As there was no acceptance
made of the said donation, there was also no notice of the
said acceptance given to the donor, Esperanza. Therefore,
the Affidavit executed by Esperanza in favor of petitioner
and her husband is null and void.
The subsequent notarized Deed of Acceptance39 dated 23
September 2000, as well as the notice40 of such acceptance,
executed by the petitioner did not cure the defect. Moreover,
it was only made by the petitioner several years after the
Complaint was filed in court, or when the RTC had already
rendered its Decision dated 12 September 2000, although it
was still during Esperanzas lifetime. Evidently, its execution
was a mere afterthought, a belated attempt to cure what
was a defective donation.
It is true that the acceptance of a donation may be made at
any time during the lifetime of the donor. And granting
arguendo that such acceptance may still be admitted in
evidence on appeal, there is still need for proof that a formal
notice of such acceptance was received by the donor and
noted in both the Deed of Donation and the separate
instrument embodying the acceptance.41 At the very least,
this last legal requisite of annotation in both instruments of
donation and acceptance was not fulfilled by the petitioner.
Neither the Affidavit nor the Deed of Acceptance bears the
fact that Esperanza received notice of the acceptance of the
donation by petitioner. For this reason, even Esperanzas
one-third share in the subject property cannot be
adjudicated to the petitioner.
With the foregoing, this Court holds that the RTC and the
Court of Appeals did not err in declaring null and void
Esperanzas Affidavit.
The next issue to be resolved then is whether the RTC, as
well as the Court of Appeals, erred in declaring OCT No.
Again, this Court answers the said issue in the negative.
Section 48 of Presidential decree No. 1529 states:
SEC. 48. Certificate not subject to collateral attack. - 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.
Such proscription has long been enshrined in Philippine
jurisprudence. The judicial action required to challenge the
validity of title is a direct attack, not a collateral attack.42
The attack is considered direct when the object of an action
is to annul or set aside such proceeding, or enjoin its
enforcement. Conversely, an attack is indirect or collateral
when, in an action to obtain a different relief, an attack on
the proceeding is nevertheless made as an incident thereof.
Such action to attack a certificate of title may be an original
action or a counterclaim, in which a certificate of title is
assailed as void.43
A counterclaim is considered a new suit in which the
defendant is the plaintiff and the plaintiff in the complaint
becomes the defendant. It stands on the same footing as, and
is to be tested by the same rules as if it were, an
independent action.44
In their Answer to the Complaint for Quieting of Title filed
by the petitioner and her husband before the MCTC,
respondents included therein a Counterclaim wherein they
repleaded all the material allegations in their affirmative
defenses, the most essential of which was their claim that
petitioner and her husband -- by means of fraud, undue
influence and deceit -- were able to make their grand aunt,
Esperanza, who was already old and illiterate, affix her
thumbmark to the Affidavit, wherein she renounced,
waived, and quitclaimed all her rights and interest over the
subject property in favor of petitioner and her husband. In
addition, respondents maintained in their Answer that as
petitioner and her husband were not tenants either of
Esperanza or of the respondents, the DAR could not have
validly issued in favor of petitioner and her husband OCT
No. CLOA-1748. Thus, the respondents prayed, in their
counterclaim in Civil Case No. 156 before the MCTC, that
OCT No. CLOA-1748 issued in the name of petitioner,
married to Ray Mars E. Arangote, be declared null and void,
insofar as their two-thirds shares in the subject property are
concerned.
It is clear, thus, that respondents Answer with Counterclaim
was a direct attack on petitioners certificate of title.
Furthermore, since all the essential facts of the case for the
determination of the validity of the title are now before this
Court, to require respondents to institute a separate
cancellation proceeding would be pointlessly circuitous and
against the best interest of justice.
Esperanzas Affidavit, which was the sole basis of
petitioners claim to the subject property, has been declared
null and void. Moreover, petitioner and her husband were
not tenants of the subject property. In fact, petitioner herself
admitted in her Complaint filed before the MCTC that her
husband is out of the country, rendering it impossible for
him to work on the subject property as a tenant. Instead of
cultivating the subject property, petitioner and her husband
possessed the same by constructing a house thereon. Thus,
it is highly suspicious how the petitioner was able to secure
from the DAR a Certificate of Land Ownership Award
(CLOA) over the subject property. The DAR awards such
certificates to the grantees only if they fulfill the
requirements of Republic Act No. 6657, otherwise known as
the Comprehensive Agrarian Reform Program
(CARP).45 Hence, the RTC and the Court of Appeals did not
err in declaring null and void OCT No. CLOA-1748 in the
name of the petitioner, married to Ray Mars E. Arangote.
Considering that Esperanza died without any compulsory
heirs and that the supposed donation of her one-third share
in the subject property per her Affidavit dated 9 June 1985
was already declared null and void, Esperanzas one-third
share in the subject property passed on to her legal heirs,
the respondents.
As petitioners last-ditch effort, she claims that she is a
possessor in good faith and, thus, entitled to the rights
provided for under Articles 448 and 546 of the Civil Code.
This claim is untenable.
The Civil Code describes a possessor in good faith as
follows:
Art. 526. He is deemed a possessor in good faith who is not
aware that there exists in his title or mode of acquisition any
flaw which invalidates it.
He is deemed a possessor in bad faith who possesses in any
case contrary to the foregoing.
Mistake upon a doubtful or difficult question of law may be
the basis of good faith.
Art. 1127. The good faith of the possessor consists in the
reasonable belief that the person from whom he received
the thing was the owner thereof, and could transmit his
ownership.
Possession in good faith ceases from the moment defects in
the title are made known to the possessor by extraneous
evidence or by a suit for recovery of the property by the true
owner. Every possessor in good faith becomes a possessor
in bad faith from the moment he becomes aware that what
he believed to be true is not so.46
In the present case, when respondents came to know that an
OCT over the subject property was issued and registered in
petitioners name on 26 March 1993, respondents brought a
Complaint on 7 August 1993 before the Lupon of Barangay
Maloco, Ibajay, Aklan, challenging the title of petitioner to
the subject property on the basis that said property
constitutes the inheritance of respondent, together with
their grandaunt Esperanza, so Esperanza had no authority
to relinquish the entire subject property to petitioner. From
that moment, the good faith of the petitioner had ceased.
Petitioner cannot be entitled to the rights under Articles 448
and 546 of the Civil Code, because the rights mentioned
therein are applicable only to builders in good faith and not
to possessors in good faith.
Moreover, the petitioner cannot be considered a builder in
good faith of the house on the subject property. In the
context that such term is used in particular reference to
Article 448 of the Civil Code, a builder in good faith is one
who, not being the owner of the land, builds on that land,
believing himself to be its owner and unaware of any defect
in his title or mode of acquisition.47
The various provisions of the Civil Code, pertinent to the
subject, read:
Article 448. The owner of the land on which anything has
been built, sown, or planted in good faith, shall have the
right to appropriate as his own the works, sowing or
planting, after payment of the indemnity provided for in
Articles 546 and 548, or to oblige the one who built or
planted to pay the price of the land, and the one who sowed,
the proper rent. However, the builder or planter cannot be
obliged to buy the land if its value is considerably more than
that of the building or trees. In such a 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.1avvphi1
Article 449. He who builds, plants, or sows in bad faith on
the land of another, loses what is built, planted or sown
without right to indemnity.
Article 450. The owner of the land on which anything has
been built, planted or sown in bad faith may demand the
demolition of the work, or that the planting or sowing be
removed, in order to replace things in their former
condition at the expense of the person who built, planted or
sowed; or he may compel the builder or planter to pay the
price of the land, and the sower the proper rent.
Under the foregoing provisions, the builder in good faith can
compel the landowner to make a choice between
appropriating the building by paying the proper indemnity
or obliging the builder to pay the price of the land. The
choice belongs to the owner of the land, a rule that accords
with the principle of accession, i.e., that the accessory
follows the principal and not the other way around. Even as
the option lies with the landowner, the grant to him,
nevertheless, is preclusive. He must choose one. He cannot,
for instance, compel the owner of the building to instead
remove it from the land. In order, however, that the builder
can invoke that accruing benefit and enjoy his
corresponding right to demand that a choice be made by the
landowner, he should be able to prove good faith on his
part.48
Good faith, here understood, is an intangible and abstract
quality with no technical meaning or statutory definition,
and it encompasses, among other things, an honest belief,
the absence of malice and the absence of design to defraud
or to seek an unconscionable advantage. An individuals
personal good faith is a concept of his own mind and,
therefore, may not conclusively be determined by his
protestations alone. It implies honesty of intention, and
freedom from knowledge of circumstances which ought to
put the holder upon inquiry. The essence of good faith lies in
an honest belief in the validity of ones right, ignorance of a
superior claim, and absence of intention to overreach
another. Applied to possession, one is considered in good
faith if he is not aware that there exists in his title or mode
of acquisition any flaw which invalidates it.49
In this case, the subject property waived and quitclaimed by
Esperanza to the petitioner and her husband in the Affidavit
was only covered by a tax declaration in the name of
Esperanza. Petitioner did not even bother to look into the
origin of the subject property and to probe into the right of
Esperanza to relinquish the same. Thus, when petitioner and
her husband built a house thereon in 1989 they cannot be
considered to have acted in good faith as they were fully
aware that when Esperanza executed an Affidavit
relinquishing in their favor the subject property the only
proof of Esperanzas ownership over the same was a mere
tax declaration. This fact or circumstance alone was enough
to put the petitioner and her husband under inquiry. Settled
is the rule that a tax declaration does not prove ownership.
It is merely an indicium of a claim of ownership. Payment of
taxes is not proof of ownership; it is, at best, an indicium of
possession in the concept of ownership. Neither tax receipts
nor a declaration of ownership for taxation purposes is
evidence of ownership or of a right to possess realty when
not supported by other effective proofs.50
With the foregoing, the petitioner is not entitled to the rights
under Article 448 and 546 as the petitioner is not a builder
and possessor in good faith.
WHEREFORE, premises considered, the instant Petition is
hereby DENIED. The Decision and Resolution of the Court of
Appeals in CA-G.R. SP No. 64970, dated 27 October 2006 and
29 June 2007, respectively, affirming the RTC Decision dated
12 September 2000 in Civil Case No. 5511 and declaring the
respondents the lawful owners and possessors of the
subject property are hereby AFFIRMED. No costs.
SO ORDERED.
G.R. No. 159578 February 18, 2009
ROGELIA DACLAG and ADELINO DACLAG (deceased),
substituted by RODEL M. DACLAG, and ADRIAN M.
DACLAG, Petitioners,
vs.
ELINO MACAHILIG, ADELA MACAHILIG, CONRADO
MACAHILIG, LORENZA HABER and BENITA DEL
ROSARIO, Respondents.
RESOLUTION
AUSTRIA-MARTINEZ, J.:
Before us is petitioners' Motion for Reconsideration of our
Decision dated July 28, 2008 where we affirmed the
Decision dated October 17, 2001 and the Resolution dated
August 7, 2003 of the Court of Appeals (CA) in CA-G.R. CV
No. 48498.
Records show that while the land was registered in the
name of petitioner Rogelia in 1984, respondents complaint
for reconveyance was filed in 1991, which was within the
10-year prescriptive period.
We ruled that since petitioners bought the property when it
was still an unregistered land, the defense of having
purchased the property in good faith is unavailing. We
affirmed the Regional Trial Court (RTC) in finding that
petitioners should pay respondents their corresponding
share in the produce of the subject land from the time they
were deprived thereof until the possession is restored to
them.
In their Motion for Reconsideration, petitioners contend
that the 10-year period for reconveyance is applicable if the
action is based on an implied or a constructive trust; that
since respondents' action for reconveyance was based on
fraud, the action must be filed within four years from the
discovery of the fraud, citing Gerona v. De Guzman,1 which
was reiterated in Balbin v. Medalla.2
We do not agree.
In Caro v. Court of Appeals,3 we have explicitly held that "the
prescriptive period for the reconveyance of
fraudulently registered real property is 10 years
reckoned from the date of the issuance of the certificate
of title x x x."4
However, notwithstanding petitioners' unmeritorious
argument, the Court deems it necessary to make certain
clarifications. We have earlier ruled that respondents' action
for reconveyance had not prescribed, since it was filed
within the 10-year prescriptive period.
However, a review of the factual antecedents of the case
shows that respondents' action for reconveyance was not even
subject to prescription.
The deed of sale executed by Maxima in favor of petitioners
was null and void, since Maxima was not the owner of the
land she sold to petitioners, and the one-half northern
portion of such land was owned by respondents. Being an
absolute nullity, the deed is subject to attack anytime, in
accordance with Article 1410 of the Civil Code that an action
to declare the inexistence of a void contract does not
prescribe. Likewise, we have consistently ruled that when
there is a showing of such illegality, the property registered
is deemed to be simply held in trust for the real owner by
the person in whose name it is registered, and the former
then has the right to sue for the reconveyance of the
property.5 An action for reconveyance based on a void
contract is imprescriptible.6 As long as the land wrongfully
registered under the Torrens system is still in the name of
the person who caused such registration, an action in
personam will lie to compel him to reconvey the property to
the real owner.7 In this case, title to the property is in the
name of petitioner Rogelia; thus, the trial court correctly
ordered the reconveyance of the subject land to
respondents.
Petitioners next contend that they are possessors in good
faith, thus, the award of damages should not have been
imposed. They further contend that under Article 544, a
possessor in good faith is entitled to the fruits received
before the possession is legally interrupted; thus, if indeed
petitioners are jointly and severally liable to respondents
for the produce of the subject land, the liability should be
reckoned only for 1991 and not 1984.
We find partial merit in this argument.
Article 528 of the Civil Code provides that possession
acquired in good faith does not lose this character, except in
a case and from the moment facts exist which show that the
possessor is not unaware that he possesses the thing
improperly or wrongfully. Possession in good faith ceases
from the moment defects in the title are made known to the
possessors, by extraneous evidence or by suit for recovery
of the
property by the true owner. Whatever may be the cause or
the fact from which it can be deduced that the possessor has
knowledge of the defects of his title or mode of acquisition,
it must be considered sufficient to show bad faith.8Such
interruption takes place upon service of
summons.9lawphil.net
Article 544 of the same Code provides that a possessor in
good faith is entitled to the fruits only so long as his
possession is not legally interrupted. Records show that
petitioners received a summons together with respondents'
complaint on August 5, 1991;10 thus, petitioners' good faith
ceased on the day they received the summons.
Consequently, petitioners should pay respondents 10
cavans of palay per annum beginning August 5, 1991 instead
of 1984.
Finally, petitioner would like this Court to look into the
finding of the RTC that "since Maxima died in October 1993,
whatever charges and claims petitioners may recover from
her expired with her"; and that the proper person to be held
liable for damages to be awarded to respondents should be
Maxima Divison or her estate, since she misrepresented
herself to be the true owner of the subject land.
We are not persuaded.
Notably, petitioners never raised this issue in their
appellants' brief or in their motion for reconsideration filed
before the CA. In fact, they never raised this matter before
us when they filed their petition for review. Thus,
petitioners cannot raise the same in this motion for
reconsideration without offending the basic rules of fair
play, justice and due process, specially since Maxima was
not substituted at all by her heirs after the promulgation of
the RTC Decision.
WHEREFORE, petitioners Motion for Reconsideration
is PARTLY GRANTED. The Decision of the Court of Appeals
dated July 28, 2008 is MODIFIED only with respect to
prescription as discussed in the text of herein Resolution,
and the dispositive portion of the Decision is MODIFIED to
the effect that petitioners are ordered to pay respondents 10
cavans of palay per annum beginning August 5, 1991 instead
of 1984.
SO ORDERED.
FRANK N. LIU, deceased, substituted by his surviving
spouse Diana Liu, and children, namely: Walter, Milton,
Frank, Jr., Henry and Jockson, all surnamed Liu, Rebecca
Liu Shui and Pearl Liu Rodriguez, petitioners, vs.
ALFREDO LOY, JR., TERESITA A. LOY and ESTATE OF
JOSE VAO, respondents.
G.R. No. 145982 July 3, 2003
FACTS: Teodoro Vao (Teodoro), as attorney-in-fact of Jose
Vao, sold seven lots to Benito Liu, through petitioner Frank
Liu (Frank), and to Cirilo Pangalo. The lots sold to Benito Liu
were Lot Nos. 5, 6, 13, 14, and 15 while the lots sold to Cirilo
Pangalo were Lot Nos. 14 and 15. When Jose Vao passed
away Benito Liu stopped further payments but after the
Supreme Court declared valid the will of his father, Teodoro
informed Frank that he could already transfer the titles to
the buyers names upon payment of the balance of the
purchase price. It was only after nine years that Frank
responded that he was ready to pay the balance of the
purchase price of the seven lots after he had purchased the
lots formerly sold to Benito Liu and Cirilo Panglao. He
requested for the execution of a deed of sale of the lots in his
name and the delivery of the titles to him.
Despite repeated demands by Frank, Teodoro sold
Lot No. 6 to respondent Teresita Loy. Frank then filed a
complaint against Teodoro for specific performance,
execution of deed of absolute sale, issuance of certificates of
title and construction of subdivision roads, before the Court
of First Instance and a notice of lis pendens on the seven lots
was filed before the Register of Deeds. A year after, Teodoro
sold Lot No. 5 to respondent Alfredo Loy.
When the complaint filed by Frank was dismissed,
he filed his claim to the probate court which was
subsequently granted. Milagros Vao, who succeeded as
administratrix of the Estate of Jose Vao, executed a deed of
conveyance covering the seven lots in favor of Frank. The
probate court, however, also approved the sale to
respondents Teresita and Alfredo Loy upon their motion
and new titles were issued under their name.
As a result, Frank Liu filed a complaint for reconveyance or
annulment of title of Lot Nos. 5 and 6. The trial court
confirmed the unilateral extrajudicial rescission of the
contract by the late Teodoro Vao and it was later on
affirmed by the Court of Appeals.
ISSUE: Whether the registration by the Loys of their
contracts of sale made them the first registrants in good
faith to defeat petitioners claim as prior buyers.
HELD: No, registration by the Loys of their contracts of sale
did not defeat the right of petitioner as prior buyers because
the person who signed the Loys contracts was not the
registered owner. The registered owner of Lot Nos. 5 and 6
was the Estate of Jose Vao. Teodoro Vao was the seller respondent Court, he is "presumed to know the metes and
in the contract of sale with Alfredo Loy, Jr., while the Estate
of Jose Vao was the seller in the contract of sale with
Teresita Loy. Teodoro Vao signed both contracts of sale.
The rule is well-settled that one who buys from a person
who is not the registered owner is not a purchaser in good
faith. This is because purchasers were under notice to
inquire why the land was not registered in the name of the
person who executed the contracts of sale. In this case, the
Loys were under notice that the lots belonged to the Estate
of Jose Vao and any sale of the lots required court
approval.
Moreover, the contracts of the Loys did not convey
ownership of the lots to them as against third persons
because there was no approval of the sale by the probate
court and registration with the Register of Deeds. The Court
ruled that registration of the contracts without court
approval would be ineffective to bind third persons,
especially creditors of the estate. Otherwise, this will open
the door to fraud on creditors of the estate.
G.R. No. 108894 February 10, 1997
TECNOGAS PHILIPPINES MANUFACTURING
CORPORATION, petitioner,
vs.
COURT OF APPEALS (FORMER SPECIAL SEVENTEENTH
DIVISION) and EDUARDO UY, respondents.
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
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?
These are the questions raised in the petition for review of
the Decision1 dated August 28, 1992, in CA-G.R. CV No.
28293 of respondent Court2 where the disposition reads:3
WHEREFORE, premises considered, the Decision of the
4331-A (should be 4531-A) of Lot 4531 of the Cadastral
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
attorney's 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
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 plaintiff's 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 defendant's 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 defendant's
adjoining land; that upon learning of the encroachment or
occupation by its buildings and wall of a portion of
defendant's land, plaintiff offered to buy from defendant
that particular portion of defendant's 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 plaintiff's 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 plaintiff's 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 plaintiff's 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 defendant's 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 Court6 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 plaintiff's 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 attorney's 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 respondent's 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 supplemental 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 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 court's 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 Uy's 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 quo was 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 not have 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 respondent's 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 Court's Ru1ing
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 neighbor's 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 petitioner's 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 respondent's 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 Pariz's 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. 25The 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 petitioner's 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 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 petitioner's 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 respondent's
"right" over the disputed property. It held that by
undertaking to demolish the fence under said settlement,
petitioner recognized private respondent's 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."
...
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 landowner's 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 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 respondent's 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 petitioner's
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 petitioner's 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 attorney's 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 respondent's 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 respondent'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 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 latter's 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 respondent's 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 non-extendible, and upon failure of the party
obliged to tender to the trial court the amount due to the
obligee, the party entitled to such payment shall be entitled
to an order of execution for the enforcement of payment of
the amount due and for compliance with such other acts as
may be required by the prestation due the obligee.
No costs.
SO ORDERED.