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CASES IN

PROPERTY Bachelor of Laws 2 C

Contributors:

Francis Dominick P. Abril Noreen J. Lagmay


Michelle V. Alvaro Jing Jing D. Leonar
Alistin A. Arce John Paul N. Mamitag
Hazel T. Basinga Avance S. Manginga
Theresa Buaquen Jose B. Masarate
Jovilyn M. Bumohya Levin Dwytte Motio
Ma. Angelica Z. Bunquin Kristel Angeline Rose P. Nacion
Trudi Cario Sharlaine L. Onia
Lyndon D. Castro Mark Fevy R. Ordinario
Joseph M. Dimalanta Wilbert Orteza
Mary Luz A. Ebes Xymann Dario M. Paquitol
Von Kurt L. Gallano Charlene A. Quindara
Ian Cliff C. Gomeyac Rafael Louise T. Roca
Anna Monica V. Gorospe Joan D. Tamayo
Raquel M. Guay Irish Ruth L. Villanueva
Rico G. Lagazo Jemson Ivan R. Walcien
Prince Jan Ronald D. Wacnang

Atty. Norma L. Carranza


Department of Civil and Labor Laws
Faculty Adviser

December 2017
Table of Contents

CHAPTER I Importance of Classifying Property....................................................... 8


(1) Golden Sun Finance Corporation v. Albano ....................................................................8
(2) Latorre v. Latorre ..................................................................................................................... 10

CHAPTER II Immovable Property .............................................................................. 12


Section 1 - Immovable Property by Incorporation .................................................. 12
(1) Tumalad v. Vicencio................................................................................................................. 12
(2) Prudential Bank v. Panis ....................................................................................................... 13

Section 2 - Immovable Property by Destination ....................................................... 15


(1) Manila Electric Company v. Central Board of Assessment Appeals ................. 15
(2) Star Two (SPV-AMC), Inc. v. Paper City Corporation of the Philippines ........ 17
(3) Serg's Products, Inc. v. PCI Leasing & Finance, Inc. .................................................. 18
(4) Tsai v. Court of Appeals ......................................................................................................... 20
(5) Makati Leasing & Finance Corporation v. Wearever Textile Mills, Inc. .......... 22
(6) Light Rail Transit Authority v. Central Board of Assessment Appeals ........... 23
(7) Caltex (Philippines), Inc. v. Central Board of Assessment Appeals .................. 25
(8) FELS Energy, Inc. v. Province of Batangas .................................................................... 27

Section 3 Immovable Property by Analogy ............................................................. 29


Go v. United Coconut Planters Bank .............................................................................................. 29

CHAPTER III Movable Property .................................................................................. 32


(1) Laurel v. Abrogar ...................................................................................................................... 32
(2) BPI Family Bank v. Franco ................................................................................................... 34

CHAPTER IV Property of Public Dominion .............................................................. 37


(1) Republic v. (Apostolita) San Mateo .................................................................................. 37
(2) Remman Enterprises, Inc. v. Republic ............................................................................ 38
(3) Republic v. (Michael C.) Santos .......................................................................................... 40
(4) Republic v. (Corazon C.) Sese .............................................................................................. 42
(5) Republic v. (Francisca) Santos ........................................................................................... 45
(6) Republic v. (Emmanuel C.) Cortez .................................................................................... 46
(7) Republic v. AFP Retirement and Separation Benefits System ............................ 48

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(8) (Jean) Tan v. Republic ............................................................................................................ 49
(9) Yu Chang v. Republic ............................................................................................................... 51
(10) Aranda v. Republic ................................................................................................................... 52
(11) Republic v. Bantigue Point Development Corporation .......................................... 54
(12) (Joyce Y.) Lim v. Republic ..................................................................................................... 56
(13) Heirs of Mario Malabanan v. Republic ............................................................................ 58
(14) Secretary of the DENR v. Yap .............................................................................................. 59
(15) Heirs of Spouses Palanca v. Republic .............................................................................. 61
(16) Del RosarioIgtiben v. Republic ........................................................................................ 62
(17) Republic v. Naguiat .................................................................................................................. 64
(18) Director of Forestry v. Villareal ......................................................................................... 66
(19) Gordula v. Court of Appeals ................................................................................................. 67
(20) Spouses De Ocampo v. Arlos ............................................................................................... 69
(21) Zarate v. Director of Lands ................................................................................................... 71
(22) Republic v. Court of Appeals (Azarraga and Yu) ....................................................... 73
(23) Republic v. Candy Maker, Inc. ............................................................................................. 74
(24) Usero v. Court of Appeals...................................................................................................... 75
(25) Menchavez v. Teves Jr. ........................................................................................................... 77
(26) Republic v. (Socorro R.) Jacob ............................................................................................ 80
(27) Chavez v. Public Estates Authority ................................................................................... 82
(28) Arbias v. Republic ..................................................................................................................... 83
(29) Republic v. (Cayetano L.) Serrano .................................................................................... 86
(30) (Florencia G.) Diaz v. Republic ........................................................................................... 87
(31) Manila International Airport Authority v. City of Pasay ........................................ 89
(32) Manila International Airport Authority v. Court of Appeals ................................ 91
(33) Philippine Fisheries Development Authority v. Court of Appeals .................... 93
(34) Macasiano v. Diokno................................................................................................................ 94
(35) Republic v. Regional Trial Court, Branch 18, Roxas City, Capiz ......................... 96

CHAPTER V Attributes of Ownership ........................................................................ 99


Section 1 Right to Possess ............................................................................................ 99
Aneco Realty and Devt Corporation v. Landex Devt Corporation ................................ 99

Section 2 Right to Recover ........................................................................................... 99


(1) Spouses Ocampo v. Heirs of Bernardino U. Dionisio ............................................... 99
(2) Piedad v. Gurieza ................................................................................................................... 101
(3) Lim v. Ligon .............................................................................................................................. 103
(4) Gabriel v. Crisologo ............................................................................................................... 104

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(5) Suarez v. Emboy ..................................................................................................................... 105
(6) Spouses Dela Cruz v. Spouses Capco ............................................................................ 107
(7) Rivera-Calingasan v. Rivera .............................................................................................. 108
(8) Tolentino v. Laurel ................................................................................................................ 110
(9) Jakosalem v. Barangan ........................................................................................................ 112
(10) Palali v. Awisan ....................................................................................................................... 114
(11) Lagazo v. Soriano ................................................................................................................... 115
(12) Heirs of Pedro Laurora v. Sterling Technopark III ................................................ 116
(13) Philippine National Bank v. Austria .............................................................................. 118
(14) Hutchinson v. Buscas ........................................................................................................... 121
(15) Lao v. Lao ................................................................................................................................... 123
(16) Ganila v. Court of Appeals.................................................................................................. 125
(17) Santos v. Ayon ......................................................................................................................... 127
(18) Heirs of Demetrio Melchor v. Melchor ........................................................................ 129
(19) Acaylar v. Harayo ................................................................................................................... 131
(20) Heirs of Nieto v. Meycauayan .......................................................................................... 132
(21) Dy v. Mandy Commodities Co., Inc. ............................................................................... 134

Section 3 Right to Accession ..................................................................................... 138


(1) Arriola v. Arriola .................................................................................................................... 138
(2) Villasi v. Garcia ........................................................................................................................ 139

Subsection 1 Accession Discreta ............................................................................. 141


(3) Republic v. Holy Trinity Realty Development Corporation .............................. 141

Subsection 2 Ownership as to Fruits...................................................................... 143


(4) Equatorial Realty Development, Inc. v. Mayfair Theater, Inc. .......................... 143

Subsection 3 Accession Industrial .......................................................................... 145


(5) Torbella v. Rosario ................................................................................................................ 145
(6) Benedicto v. Villaflores ....................................................................................................... 148
(7) Briones v. Macabagdal......................................................................................................... 149
(8) Barstowe Philippines Corporation v. Republic ....................................................... 151
(9) Nuguid v. Court of Appeals................................................................................................ 153
(10) Philippine National Bank v. De Jesus ........................................................................... 154
(11) Evadel Realty Development Corporation v. Spouses Soriano .......................... 157
(12) Technogas Phil. v. Court of Appeals .............................................................................. 159
(13) Programme, Inc. v. Province of Bataan ....................................................................... 161

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(14) Sulo sa Nayon, Inc. v. Nayong Pilipino Foundation ............................................... 162
(15) Cheng v. Spouses Donini .................................................................................................... 164
(16) Spouses Jimenez v. Patricia, Inc. ..................................................................................... 165
(17) National Housing Authority v. Grace Baptist Church ........................................... 168

Subsection 4 Accession Natural............................................................................... 169


(18) Office of the City Mayor of Paraaque v. Ebio.......................................................... 169
(19) Bagaipo v. Court of Appeals .............................................................................................. 171
(20) Heirs of Emiliano Navarro v. Intermediate Appellate Court ............................ 172
(21) Vda. de Nazareno v. Intermediate Appellate Court ............................................... 174
(22) Jagualing v. Court of Appeals ........................................................................................... 177
(23) Khemani v. Heirs of Anastacio Trinidad ..................................................................... 178
(24) Agustin v. Intermediate Appellate Court.................................................................... 180
(25) Agne v. Director of Lands................................................................................................... 182
(26) Ronquillo v. Court of Appeals .......................................................................................... 184

CHAPTER VI QUIETING OF TITLE ............................................................................ 186


(1) Residents of Lower Atab v. Sta. Monica Industrial Devt Corporation......... 186
(2) Heirs of Pacifico Pocdo v. Avila ....................................................................................... 187
(3) Lucasan v. Philippine Deposit Insurance Corporation ........................................ 190

CHAPTER VII Co-ownership ..................................................................................... 193


(1) Teodoro v. Espino.................................................................................................................. 193
(2) Ining v. Vega ............................................................................................................................. 195
(3) Catedrilla v. Lauron .............................................................................................................. 196
(4) Vda. de Figuracion v. Figuracion-Gerilla .................................................................... 197
(5) Pascual v. Ballesteros........................................................................................................... 199
(6) Gonzales v. Bugaay................................................................................................................ 201
(7) Spouses Del Campo v. Court of Appeals...................................................................... 203
(8) Titan Construction v. Court of Appeals ....................................................................... 206
(9) Iglesia ni Kristo v. Penferrada ......................................................................................... 207
(10) De Guia v. Court of Appeals............................................................................................... 209
(11) Villanueva v. Court of Appeals......................................................................................... 210
(12) Avila v. Barabat ....................................................................................................................... 212
(13) Monteroso v. Court of Appeals ........................................................................................ 214
(14) Cruz v. Catapang ..................................................................................................................... 215
(15) Republic v. Heirs of Dignos-Sorono .............................................................................. 217
(16) Balus v. Balus ........................................................................................................................... 219
(17) Quilatan v. Heirs of Quilatan ............................................................................................ 221

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(18) Dadizon v. Bernadas ............................................................................................................. 223
(19) De Leon v. De Leon ................................................................................................................ 225

CHAPTER VIII - Possession .......................................................................................... 227


(1) Abadilla v. Obrero .................................................................................................................. 227
(2) Heirs of Tanyag v. Gabriel.................................................................................................. 228
(3) Imuan v. Cereno...................................................................................................................... 230
(4) Semirara Coal Corporation v. HGL Development Corporation........................ 233
(5) Lubos v. Galupo ...................................................................................................................... 236
(6) Caniza v. Court of Appeals ................................................................................................. 238
(7) Habagat Grill v. DMC-Urban Property ......................................................................... 240

CHAPTER IX - Usufruct .................................................................................................. 242


Sepulveda v. Pelaez ............................................................................................................................ 242

CHAPTER X - Nuisance .................................................................................................. 244


(1) Gancayco v. City Government of Quezon City .......................................................... 244
(2) Telmo v. Bustamante ........................................................................................................... 246
(3) Perez v. Madrona ................................................................................................................... 247
(4) Lucena Grand Terminal, Inc. v. JAC Liner, Inc. ......................................................... 248
(5) Hidalgo Enterprises, Inc. v. Balandan .......................................................................... 249
(6) Calma v. Court of Appeals .................................................................................................. 251
(7) Parayno v. Jovellanos ........................................................................................................... 252

CHAPTER XI Voluntary Easement ........................................................................... 255


(1) Pilar Development Corporation v. Dumadag ........................................................... 255
(2) Bicol Agro Industrial Corporation v. Obias ............................................................... 257
(3) Alcantara v. Reta .................................................................................................................... 258
(4) National Irrigation Administration v. Court of Appeals ...................................... 259
(5) Camarines Norte Electric Coop. v. Court of Appeals ............................................. 262
(6) Villanueva v. Velasco ............................................................................................................ 264
(7) Remman Enterprises, Inc. v. Court of Appeals ........................................................ 267
(8) Costabella v. Court of Appeals ......................................................................................... 269
(9) Encarnacion v. Court of Appeals .................................................................................... 271
(10) Fajardo v. Freedom to Build, Inc. ................................................................................... 272
(11) De la Cruz v. Ramiscal.......................................................................................................... 274

CHAPTER XII - Donation ............................................................................................... 277

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(1) Republic v. Silim ..................................................................................................................... 277
(2) Gonzales v. Court of Appeals ............................................................................................ 278
(3) Austria-Magat v. Court of Appeals................................................................................. 280
(4) Heirs of Florencio v. Heirs of De Leon ......................................................................... 283
(5) Abello v. Collector of Internal Revenue ...................................................................... 285

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CHAPTER I
IMPORTANCE OF CLASSIFYING PROPERTY
Different provisions of the law govern the acquisition, possession, loss, and
registration of immovable and movable properties. 1

(1) Golden Sun Finance Corporation v. Albano


A.M. No. P-11-2888
27 July 2011

If a judgment debtor does not choose a property which may be levied upon, a sheriff, in
executing the judgment, must FIRST levy on the debtors PERSONAL properties which
are not exempt from execution. Should it be insufficient, then the sheriff may levy on
the real properties.

FACTS. Ricardo R. Albano (respondent), Sheriff III of Metropolitan Trial Court


(MeTC), Branch 62, Makati City, was charged with negligence and grave misconduct
by Golden Sun Finance Corporation (complainant).

On 7 January 2009, the complainant filed a complaint for the recovery of a Honda
Civic Sedan with the Regional Trial Court (RTC), Quezon City, Branch 81, against one
Lucila S. Reyes. The subject motor vehicle, registered in the name of Reyes, was
encumbered in its favor, as shown in the Certificate of Registration issued by the
Land Transportation Office.

The RTC decided in favor of the complainant and issued a writ of replevin. However,
the complainant found out that the car had already been levied upon by the
respondent by virtue of a writ of execution issued on 27 March 2009 by the MeTC,
Makati City, Branch 62, for Reyes violation of Batas Pambansa Bilang 22. The car
was sold at a public auction conducted by the respondent on 29 April 2009, with the
Royal Makati Credit Resource as the highest bidder. On the same day, a Certificate of
Sale was issued in favor of the Royal Makati Credit Resource.

COMPLAINANT. The complainant averred that the levy and sale of the motor
vehicle by the respondent was illegal. The respondent should have looked into the
cars Certificate of Registration to determine whether it was encumbered or not. The
encumbrance on the motor vehicle having been made prior to the suit filed by the

1 2 Paras 5.

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Royal Makati Credit Resource, the complainant said that its claim should have
priority over the formers claims.

RESPONDENT. The respondent contended that he had no knowledge that the car
was encumbered because the Certificate of Registration was never shown to him. He
also had no knowledge that the car was the subject of a writ of replevin. Having
acted within the scope of his duty as sheriff when he enforced the writ of execution,
he asked for the dismissal of the complaint.

ISSUE. Is Sheriff Albano justified in levying the car despite the earlier
encumbrance by the complainant?

RULING. YES. In determining properties to be levied upon, the Section 9(b), Rule
39 of the Rules of Court requires the sheriff to levy only on those "properties of the
judgment debtor" which are "not otherwise exempt from execution." For purposes
of the levy, a property is deemed to belong to the judgment debtor if he holds a
beneficial interest in such property that he can sell or otherwise dispose of for value.
In a contract of mortgage, the debtor retains beneficial interest over the property
notwithstanding the encumbrance, since the mortgage only serves to secure the
fulfillment of the principal obligation. Even if the debtor defaults, this fact does not
operate to vest in the creditor the ownership of the property; the creditor must still
resort to foreclosure proceedings. Thus, a mortgaged property may still be levied
upon by the sheriff to satisfy the judgment debtors obligations, as what happened in
the present case. After ascertaining the judgment debtors (Reyes) interest over the
car, the respondent properly enforced the levy thereon an act that is in accordance
with the Rules of Court.

It was thus irrelevant for the complainant to argue that had the respondent checked
the cars certificate of registration, the respondent would have been aware of the
encumbrance. The encumbrance, until foreclosed, will not in any way affect the
judgment debtors rights over the property or exempt the property from the levy.
Even the pendency of the proceeding for replevin that the complainant instituted
would not serve to prevent the sheriff from levying on the car, since Reyes default
and the complainants right to foreclose still had to be settled in the proceeding.

Same section of the Rules provide that should the debtor not exercise his/her right
to choose which properties may be levied upon to satisfy the judgment debt, the
sheriff shall first levy on the personal properties, if any, and then on the real
properties if the personal properties are insufficient to answer for the judgment.

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Sheriff Albano did exhaust the available personal properties first in accordance with
the Rules. Thus, he cannot be held administratively liable.

(2) Latorre v. Latorre


G.R. No. 183926
29 March 2010

Venue of actions: Real actions shall be commenced and tried in the proper court that
has territorial jurisdiction over the area where the real property is situated. Personal
actions, on the other hand, shall be commenced and tried in proper courts where the
plaintiff or any of the principal plaintiffs or defendant or any of the principal
defendants resides.

FACTS. On October 2000, petitioner Generosa Almeda Latorre (petitioner) filed


before the RTC of Muntinlupa City a Complaint for Collection and Declaration of
Nullity of Deed of Absolute Sale with application for Injunction against her own son,
herein respondent Luis Esteban Latorre (respondent), and one Ifzal Ali (Ifzal).

PETITIONER. Petitioner averred that, on September 28, 1999, respondent and


Ifzal entered into a Contract of Lease over a 1,244 square meter real property,
situated at No. 1366 Caballero St., Dasmarias Village, Makati City (subject property).
Under the said contract, respondent, as lessor, declared that he was the absolute and
registered owner of the subject property. Petitioner alleged that respondent's
declaration therein was erroneous because she and respondent were co-owners of
the subject property in equal shares.

Petitioner narrated that, on 14 March 1989, she and respondent executed their
respective Deeds of Donation, conveying the subject property in favor of The
Porfirio D. Latorre Memorial & Fr. Luis Esteban Latorre Foundation, Inc. (the
Foundation). Thus, Transfer Certificate of Title (TCT) No. 161963 was issued in the
name of the Foundation. Subsequently, on 2 September 1994, petitioner and
respondent executed separate Deeds of Revocation of Donation and Reconveyance
of the subject property, consented to by the Foundation, through the issuance of
appropriate corporate resolutions. However, the Deeds of Revocation were not
registered; hence, the subject property remained in the name of the Foundation.
Petitioner insisted, however, that respondent was fully aware that the subject
property was owned in common by both of them. To protect her rights as co-owner,

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petitioner formally demanded from Ifzal the payment of her share of the rentals,
which the latter, however, refused to heed.

Likewise, petitioner also discovered that respondent caused the annotation of an


adverse claim on the TCT of the subject property, claiming full ownership over the
same by virtue of a Deed of Absolute Sale dated March 21, 2000, allegedly executed
by petitioner in favor of respondent. Petitioner claimed that the deed was a falsified
document, that her signature thereon was forged by respondent, and that she never
received 21 Million or any other amount as consideration for her share of the
subject property.

RESPONDENT. Respondent immediately filed a Motion to Dismiss on the sole


ground that the venue of the case was improperly laid. He stressed that while the
complaint was denominated as one for Collection and Declaration of Nullity of Deed
of Absolute Sale with application for Injunction, in truth the case was a real action
affecting title to and interest over the subject property. Respondent insisted that all
of petitioner's claims were anchored on her claim of ownership over one-half
portion of the subject property. Since the subject property is located in Makati City,
respondent argued that petitioner should have filed the case before the RTC of
Makati City and not of Muntinlupa City.

ISSUE. Considering that the subject property is located in Makati, should the case
filed in the RTC of Muntinlupa be dismissed?

RULING. YES. Sections 1 and 2 of Rule 4 of the 1997 Rules of Civil Procedure state
that actions affecting title to or possession of real property or an interest therein
(real actions) shall be commenced and tried in the proper court that has territorial
jurisdiction over the area where the real property is situated. On the other hand, all
other actions (personal actions) shall be commenced and tried in the proper courts
where the plaintiff or any of the principal plaintiffs resides or where the defendant
or any of the principal defendants resides.

In this case, while the action was denominated as Collection and Declaration of
Nullity of Deed of Absolute Sale, the primary objective for the filing of the case is
the recovery of the subject property on the basis of co-ownership a real action.
The subject property was located in Makati City. Consequently, petitioner should
have filed her complaint with the RTC that has territorial jurisdiction over the
subject property which is the RTC of Makati and NOT of Muntinlupa. Since the case
was filed in Muntinlupa, it should be dismissed by the RTC on the ground of
improper venue.

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CHAPTER II
IMMOVABLE PROPERTY
Articles 415 & 426, Civil Code

Section 1
Immovable Property by Incorporation

(1) Tumalad v. Vicencio


G.R. No. L-30173
30 September 1971

If a house belonging to a person stands on a rented land belonging to another person,


it may be treated as a personal property and be subjected to a chattel mortgage. The
contracting parties are ESTOPPED from questioning its validity later.

FACTS. On 1 September 1955, Alberta Vicencio and Emiliano Simeon executed a


chattel mortgage in favor of Gavino A. Tumalad and Generosa R. Tumalad over their
house of strong materials located at No. 550 Int. 3, Quezon Boulevard, Quiapo,
Manila, over Lot Nos. 6-B and 7-B, Block No. 2554, which were being rented from
Madrigal & Company, Inc. The mortgage was registered in the Registry of Deeds of
Manila. It was executed to guarantee a loan of 4,800 received, payable within one
year at 12% per annum. The mode of payment was P150 monthly and the lump sum
of 3,150. It was also agreed that default in the payment of any of the amortizations,
would cause the remaining unpaid balance to become immediately due and the
Chattel Mortgage will be enforceable.

The defendants-appellants defaulted in paying. Thus, the mortgage was


extrajudicially foreclosed and the house was sold at public auction pursuant to the
said contract.

DEFENDANTS-APPELLANTS. Defendants-appellants impugned the legality of the


chattel mortgage, claiming that they are still the owners of the house. They
predicate their theory of nullity of the chattel mortgage on the following: (1) that,
their signatures on the chattel mortgage were obtained through fraud, deceit, or
trickery; and (2) that the subject matter of the mortgage is a house of strong
materials, and, being an immovable, it can only be the subject of a real estate
mortgage and not a chattel mortgage.

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ISSUE. Is the Chattel Mortgage executed by Gavino and Generosa Tumalad over
their house of strong materials valid?

RULING. YES, but only insofar as the contracting parties are concerned. It is based,
partly, upon the principle of estoppel. If a house belonging to a person stands on a
rented land belonging to another person, it may be mortgaged as a personal
property as so stipulated in the document of mortgage. Moreover, a mortgaged
house built on a rented land was held to be a personal property, not only because
the deed of mortgage considered it as such, but also because it did not form part of
the land. It is settled that an object placed on land by one who had only a temporary
right does not become immobilized by attachment.

In this case, there is no specific statement referring to the subject house as personal
property, yet by ceding, selling or transferring a property by way of chattel
mortgage defendants-appellants could only have meant to convey the house as
chattel, or at least, intended to treat the same as such, so that they should not now
be allowed to make an inconsistent stand by claiming otherwise. It is NOT third
persons who are assailing the validity of the chattel mortgage but the defendants-
appellants themselves. The doctrine of estoppel therefore applies to them having
treated the subject house as personalty.

Moreover, the subject house stood on a rented lot to which defendants-appellants


merely had temporary right as lessee, and although this cannot in itself alone
determine the status of the property, it does so when combined with other factors to
sustain the interpretation that the parties, particularly the mortgagors, intended to
treat the house as a personalty.

(2) Prudential Bank v. Panis


G.R. No. L-50008
31 August 1987

A real mortgage may be made separately on a building built on a land belonging to the
government before the issuance of a sales patent. But after the issuance of such sales
patent, the restrictions under the Public Land Act must be observed.

FACTS. On 19 November 1971, spouses Fernando A. Magcale and Teodula Baluyut


Magcale (private respondents) secured a loan in the sum of 70,000 from the
Prudential Bank (petitioner). To secure payment of this loan, private respondents

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executed in favor of petitioner a Deed of Real Estate Mortgage over a 2-storey, semi-
concrete, residential building with warehouse spaces, generally constructed of
mixed hard wood and concrete materials which were built on a lot subject to a sales
patent application by the private respondents. This was registered with the Register
of Deeds of Zambales under the Provisions of Act 3344 on 23 November 1971.

On 24 April 1973, the Secretary of Agriculture issued Miscellaneous Sales Patent No.
4776 over the parcel of land in the name of Fernando A. Magcale.

On 2 May 1973, private respondents secured an additional loan from petitioner in


the sum of 20,000. To secure payment of this additional loan, private respondents
executed in favor of the said petitioner another Deed of Real Estate Mortgage over
the same properties. The same was registered with the Register of Deeds.

For failure of the private respondents to pay their obligation to petitioner after it
became due, and upon application of the petitioner, the Deeds of Real Estate
Mortgage were extrajudicially foreclosed. Consequent to the foreclosure was the
sale of the properties to the petitioner as the highest bidder in a public auction.

On 3 November 1978, respondent Court declared the Deeds of Real Estate Mortgage
as null and void. Thus, this petition for certiorari was filed by the petitioner.

ISSUE. Are the Deeds of Real Estate Mortgage valid?

RULING. The first Deed of 19 November 1971 is VALID; the second Deed of 2 May
1971 is VOID.

As regards the first Deed, while it is true that a mortgage of land necessarily
includes, in the absence of stipulation of the improvements thereon, buildings, still a
building by itself may be mortgaged apart from the land on which it has been built.
Such a mortgage would be still a real estate mortgage for the building would still be
considered immovable property even if dealt with separately and apart from the
land. Possessory rights over said properties before title is vested on the grantee may
be validly transferred or conveyed as in a Deed.

The first Deed was executed and registered before the issuance of the sales patent
on 24 April 1973 and before the government was divested of its tile to the land.
Under the foregoing considerations, it is evident that the mortgage executed by
private respondent on his own building which was erected on the land belonging to

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the government is to all intents and purposes a valid mortgage. Restrictions with
regard to encumbrances of a land under a sales patent do not yet apply.

As regards the second Deed, there are already restrictions as to the encumbrance of
the property under Sections 121, 122, and 124 of the Public Land Act and Section 2
of Republic Act No. 730 since the Deed was executed and registered after the
issuance of the sales patent. Consequently, the second mortgage is null and void.

Not even the doctrine of estoppel can give a validating effect on the void mortgage.
Even if, as pointed out by the petitioner, the private respondents, after physically
possessing the title for five years, voluntarily surrendered it to the bank in order
that the mortgage be annotated, it is not within the competence of any citizen to
barter away what public policy by law seeks to preserve.

Section 2
Immovable Property by Destination

(1) Manila Electric Company v. Central Board of Assessment


Appeals
G.R. No. L-47943
31 May 1982

For purposes of taxation, the term "real property" may include things which should
generally be regarded as personal property which enhance a real propertys value,
beauty or utility or to adapt it for new or further purposes. Oil storage tanks are
taxable realties.

FACTS. This case is about the imposition of the realty tax on two oil storage tanks
installed in 1969 by Manila Electric Company (Meralco) on a lot in San Pascual,
Batangas which it leased in 1968 from Caltex (Phil.), Inc. The tanks are within the
Caltex refinery compound. They have a total capacity of 566,000 barrels. They are
used for storing fuel oil for Meralcos power plants.

According to Meralco, the storage tanks are made of steel plates welded and
assembled on the spot. Their bottoms rest on a foundation consisting of compacted
earth as the outermost layer, a sand pad as the intermediate layer and a two-inch
thick bituminous asphalt stratum as the top layer. The bottom of each tank is in
contact with the asphalt layer.

15
The steel sides of the tank are directly supported underneath by a circular wall
made of concrete, eighteen inches thick, to prevent the tank from sliding. Hence,
according to Meralco, the tank is not attached to its foundation. It is not anchored or
welded to the concrete circular wall. Its bottom plate is not attached to any part of
the foundation by bolts, screws or similar devices. The tank merely sits on its
foundation. Each empty tank can be floated by flooding its dike-inclosed location
with water four feet deep.

In 1970, the municipal treasurer of Bauan, Batangas required Meralco to pay realty
taxes on the two tanks. Affirming the assessment, the Central Board of Assessment
Appeals ruled that the tanks together with the foundation, walls, dikes, steps,
pipelines and other appurtenances constitute taxable improvements.

PETITIONER. Meralco contends that the said oil storage tanks do not fall within
any of the kinds of real property enumerated in article 415 of the Civil Code and,
therefore, they cannot be categorized as realty by nature, by incorporation, by
destination nor by analogy. Stress is laid on the fact that the tanks are not attached
to the land and that they were placed on leased land, not on the land owned by
Meralco.

ISSUE. Are the oil storage tanks of Meralco taxable realties?

RULING. YES. Section 2 of the Assessment Law provides that the realty tax is due
"on real property, including land, buildings, machinery, and other improvements"
not specifically exempted in section 3 thereof. This provision is reproduced with
some modification in the Real Property Tax Code which provides:

Sec. 38. Incidence of Real Property Tax. They shall be levied, assessed and
collected in all provinces, cities and municipalities an annual ad valorem tax
on real property, such as land, buildings, machinery and other
improvements affixed or attached to real property not hereinafter
specifically exempted.

The Code contains the following definition in its section 3:

k) Improvements is a valuable addition made to property or an


amelioration in its condition, amounting to more than mere repairs or
replacement of waste, costing labor or capital and intended to enhance its
value, beauty or utility or to adapt it for new or further purposes.
(Underscoring supplied)

16
While the two storage tanks are not embedded in the land, they may, nevertheless,
be considered as improvements on the land, enhancing its utility and rendering it
useful to the oil industry. It is undeniable that the two tanks have been installed
with some degree of permanence as receptacles for the considerable quantities of
oil needed by Meralco for its operations. Moreover, for purposes of taxation, the
term "real property" may include things which should generally be regarded as
personal property. Hence, the oil storage tanks are taxable realties.

(2) Star Two (SPV-AMC), Inc. v. Paper City Corporation of the


Philippines
G.R. No. 169211
6 March 2013

FACTS. Paper City applied for a loan from Rizal Commercial Banking Corporation
(RCBC) four times. Those four loans secured by four (4) Deeds of Continuing Chattel
Mortgages on its machineries and equipment found inside its paper plants.

On 25 August 1992, a unilateral Cancellation of Deed of Continuing Chattel Mortgage


on inventory of Merchandise/StocksinTrade was executed by RCBC, without the
consent of Paper City.

On 26 August 1992, the parties entered into a Mortgage Trust Indenture (MTI),
wherein Paper City acquired an additional loan of 170,000,000 in addition to their
previous loan amounting to 110,000,000, making the entire loan in a total of
280,000,000. The old loan was secured by parcels of land in five (5) Deeds of Real
Estate Mortgage. The new loan was secured by the same five (5) Deeds of Real
Estate Mortgage and additional real and personal properties, including the
machineries and equipment of Paper City.

The MTI was later increased to 80,000,000 and 70,000,000 more. Even if they
executed a Deed of Amendment to the said MTI, the securities for such were still the
same, included still are the machineries and equipment of Paper City. The MTI was
later amended twice increasing not only on the load which now included a newly
constructed two-story building and other improvements, machineries, and
equipment located in the existing plant site.

After the compromise agreement for the foreclosure to be only up to 34.23%, Paper
City filed a manifestation to remove or dispose machinery since those machinery

17
inside the building were deteriorating and that the said machineries were covered
by the MTI. However, after Paper City filed a motion for reconsideration, the trial
court granted the motion for reconsideration, which was then affirmed by the Court
of Appeals.

ISSUE. Are the subject machineries and equipment included in the mortgage,
extrajudicial foreclosure, and, thereafter, the sale?

RULING. Yes, by contracts, all uncontested in this case, machineries and


equipment are included in the mortgage in favor of RCBC. In the foreclosure of the
mortgage and in the consequent sale on foreclosure also in favor of petitioner.

The plain language and literal interpretation of the MTIs must be applied. The
petitioner, respondent, and other creditor banks intended that the machineries be
included in the mortgage, extrajudicial foreclosure, and the consequent sale. Those
machineries were listed and considered as improvements to the Real Estate
Mortgage.

The Real Estate Mortgage over the machineries and equipment is even in full accord
with the classification of such properties under Article 415 of the Civil Code of the
Philippines under the topic of Immovable property. Thus:

Article 415 of the Civil Code of the Philippines

1. Land, buildings, roads and constructions of all kinds adhered to the soil.
2. Machinery, receptacles, instruments, or implements intended by the owner
of the tenement for an industry or work which may be carried on in a
building or on a piece of land, and which tend directly to meet the needs of
the said industry or work.

(3) Serg's Products, Inc. v. PCI Leasing & Finance, Inc.


G.R. No. 137705
22 August 2000

Machineries which are immovable by destination may be treated by contracting


parties as personal properties and may subsequently be subject to a writ of replevin.
However, such characterization does not affect third persons acting in good faith.

18
FACTS. Respondent PCI Leasing and Finance, Inc. (PCI Leasing) filed with the RTC
of Quezon City a complaint for a sum of money, with an application for a writ of
replevin.

Upon an ex-parte application of PCI Leasing, respondent judge issued a writ of


replevin directing its sheriff to seize and deliver the machineries and equipment to
PCI Leasing after five days and upon the payment of the necessary expenses.

In implementation of said writ, the sheriff proceeded to petitioners (Serg's


Products, Inc.) factory and seized one machinery with the word that he would
return for the other machineries.

Petitioners filed a motion for special protective order, invoking the power of the
court to control the conduct of its officers and amend and control its processes,
praying for a directive for the sheriff to defer enforcement of the writ of replevin.
The motion was opposed by PCI Leasing.

PETITIONERS. The properties sought to be seized were immovable as defined in


Article 415 of the Civil Code, the parties agreement to the contrary notwithstanding.
To give effect to the agreement would be prejudicial to innocent third parties.
Further, PCI Leasing was estopped from treating these machineries as personal
because the contracts in which the alleged agreement were embodied were totally
sham and farcical.

RESPONDENT. The properties were still personal and therefore still subject to
seizure and a writ of replevin.

COURT OF APPEALS. Citing the Agreement of the parties, the subject machines
were personal property, and that they had only been leased, not owned, by
petitioners. The words of the contract are clear and leave no doubt upon the true
intention of the contracting parties.

ISSUE. Can the said machineries be subject to a writ of replevin?

RULING. YES. In the present case, the machines that were the subjects of the Writ
of Replevin were placed by petitioners in the factory built on their own land.
Indisputably, they were essential and principal elements of their chocolate-making
industry. Hence, although each of them was movable or personal property on its
own, all of them have become immobilized by destination because they are essential
and principal elements in the industry. In that sense, petitioners are correct in

19
arguing that the said machines are real, not personal, property pursuant to Article
415 (5) of the Civil Code.

Be that as it may, the court disagrees with the submission of the petitioners that the
said machines are not proper subjects of the Writ of Replevin.

The Court has held that contracting parties may validly stipulate that a real property
be considered as personal. After agreeing to such stipulation, they are consequently
estopped from claiming otherwise. Under the principle of estoppel, a party to a
contract is ordinarily precluded from denying the truth of any material fact found
therein.

In the present case, the Lease Agreement clearly provides that the machines in
question are to be considered as personal property. Petitioners are estopped from
denying the characterization of the subject machines as personal property. Under
the circumstances, they are proper subjects of the Writ of Replevin.

It should be stressed, however, that the courts holding that the machines should
be deemed personal property pursuant to the Lease Agreement is good only insofar
as the contracting parties are concerned. Hence, while the parties are bound by the
Agreement, third persons acting in good faith are not affected by its stipulation
characterizing the subject machinery as personal. In any event, there is no showing
that any specific third party would be adversely affected.

(4) Tsai v. Court of Appeals


G.R. No. 120098
2 October 2001

FACTS. Ever Textile Mills, Inc. (EVERTEX) obtained a loan of three million peso
from Philippine Bank of Communications (PBCom), as a security for said loan
EVERTEX executed in favor of PBCom, a deed of Real and Chattel Mortgage over the
lot, where its factory stands, and the chattels located therein.

In 1979, EVERTEX obtained a second loan of P3,356,000.00, the loan was secured
by a Chattel Mortgage over personal, these listed properties were similar to those
listed the first mortgage deed.

However, Due to business reverses, EVERTEX filed for insolvency and was later
declared by the Court of First Instance insolvent. In the meantime, upon EVERTEX's

20
failure to meet its obligation to PBCom, the latter commenced extrajudicial
foreclosure proceedings against EVERTEX under Act 3135, otherwise known as "An
Act to Regulate the Sale of Property under Special Powers Inserted in or Annexed to
Real Estate Mortgages" and Act 1506 or "The Chattel Mortgage Law". A Notice of
Sheriff's Sale was issued on December 1, 1982.

In the first public auction, PBCom emerged as the highest bidder and a Certificate of
Sale was issued in its favor. Another public auction was held and again, PBCom was
the highest bidder. The sheriff issued a Certificate of Sale on the same day.

PBCom consolidated its ownership over the lot and all the properties in it. In
November 1986, it leased the entire factory premises to petitioner Ruby L. Tsai for
P50,000.00 a month. Thereafter, PBCom sold the factory, lock, stock and barrel to
Tsai for P9,000,000.00, including the contested machineries.

ISSUE. Are the disputed machineries of EVERTEXT considered immovable?

RULING. The Supreme Court ruled that while it is true that the controverted
properties appear to be immobile, a perusal of the contract of Real and Chattel
Mortgage executed by the parties herein gives us a contrary indication. In the case at
bar, both the trial and the appellate courts reached the same finding that the true
intention of PBCOM and the owner, EVERTEX, is to treat machinery and equipment
as chattels.

Citing the case of Navarro v. Pineda, 9 SCRA 631 (1963), an immovable may be
considered a personal property if there is a stipulation as when it is used as security
in the payment of an obligation where a chattel mortgage is executed over it, as in
the case at bar.

In the instant case, the parties herein: (1) executed a contract styled as "Real Estate
Mortgage and Chattel Mortgage," instead of just "Real Estate Mortgage" if indeed
their intention is to treat all properties included therein as immovable, and (2)
attached to the said contract a separate "LIST OF MACHINERIES & EQUIPMENT".
These facts, taken together, evince the conclusion that the parties' intention is to
treat these units of machinery as chattels. A fortiori, the contested after-acquired
properties, which are of the same description as the units enumerated under the
title "LIST OF MACHINERIES & EQUIPMENT," must also be treated as chattels.

Accordingly, the Court find no reversible error in the respondent appellate court's
ruling that inasmuch as the subject mortgages were intended by the parties to

21
involve chattels, insofar as equipment and machinery were concerned, the Chattel
Mortgage Law applies, which provides in Section 7 thereof that: "a chattel mortgage
shall be deemed to cover only the property described therein and not like or
substituted property thereafter acquired by the mortgagor and placed in the same
depository as the property originally mortgaged, anything in the mortgage to the
contrary notwithstanding."

(5) Makati Leasing & Finance Corporation v. Wearever Textile


Mills, Inc.
G.R. No. L-58469
16 May 1983

The parties to a contract may, by agreement, treat as personal property that which by
nature would be a real property as long as no interest of third parties would be
prejudiced thereby. There is absolutely no reason why machinery, which is movable in
its nature and becomes immobilized only by destination or purpose, may not be
likewise treated as personal property.

FACTS. Wearever Textile Mills, Inc. executed a chattel mortgage contract in favor
of Makati Leasing and Finance Corporation covering certain raw materials and
machinery. Upon default, Makati Leasing filed a petition for judicial foreclosure of
the properties mortgaged. Acting on Makati Leasings application for replevin, the
lower court issued a writ of seizure. Pursuant thereto, the sheriff enforcing the
seizure order seized the machinery subject matter of the mortgage. In a petition for
certiorari and prohibition, the Court of Appeals ordered the return of the machinery
on the ground that the same cannot be the subject of replevin because it is a real
property pursuant to Article 415 of the new Civil Code, the same being attached to
the ground by means of bolts and the only way to remove it from Wearever textiles
plant would be to drill out or destroy the concrete floor. When the motion for
reconsideration of Makati Leasing was denied by the Court of Appeals, Makati
Leasing elevated the matter to the Supreme Court.

ISSUE. From the point of view of the parties, can the subject machinery be
considered a personal property?

RULING. YES. There is no logical justification to exclude the rule out the present
case from the application of the pronouncement in Tumalad v. Vicencio (41 SCRA
143). If a house of strong materials, like what was involved in the Tumalad case, may

22
be considered as personal property for purposes of executing a chattel mortgage
thereon as long as the parties to the contract so agree and no innocent third party
will be prejudiced thereby, there is absolutely no reason why a machinery, which is
movable in its nature and becomes immobilized only by destination or purpose, may
not be likewise treated as such. This is really because one who has so agreed is
estopped from the denying the existence of the chattel mortgage.

It must be pointed out that the characterization by the private respondent is


indicative of the intention and impresses upon the property the character
determined by the parties. As stated in Standard Oil Co. of New York v. Jaramillo (44
Phil. 630), it is undeniable that the parties to a contract may, by agreement, treat as
personal property that which by nature would be a real property as long as no
interest of third parties would be prejudiced thereby.

The status of the subject matter as movable or immovable property was not raised
as an issue before the lower court and the Court of Appeals (CA), except in a
supplemental memorandum in support of the petition filed in the appellate court.
There is no record showing that the mortgage has been annulled, or that steps were
taken to nullify the same. On the other hand, respondent has benefited from the said
contract.

Equity dictates that one should not benefit at the expense of another. As such,
private respondent could no longer be allowed to impugn the efficacy of the chattel
mortgage after it has benefited therefrom.

Therefore, the questioned machinery should be considered as personal property for


the purposes of the chattel mortgage.

(6) Light Rail Transit Authority v. Central Board of Assessment


Appeals
G.R. No. 127316
12 October 2000

Real property is classified for assessment purposes on the basis of actual use the
purpose for which the property is principally or predominantly utilized by the person
in possession of the property.

23
FACTS. The Light Rail Transit Authority (LRTA) is a government-owned and
controlled corporation. LRTA acquired real properties and constructed structural
improvements, such as buildings, carriageways, passenger terminal stations, and
installed various kinds of machinery and equipment and facilities for the purpose of
its operations.

The respondent, Appellee City Assessor of Manila, assessed the real properties of
LRTA. The LRTA paid its real property taxes on all its real property holdings, except
the carriageways and passenger terminal stations including the land where it is
constructed on the ground that the same are not real properties under the Real
Property Tax Code, and if the same are real property, these are for public use or
purpose, therefore, exempt from realty taxation. The Local Board of Assessment
Appeals of Manila declared that carriageways and passenger terminal stations are
improvements, therefore, are real property under the Code, and not exempt from
the payment of real property tax.

CBAA and CA. The Court of Appeals (CA) affirmed the decision of the Central Board
of Assessment Appeals (CBAA) which had declared petitioner's carriageways and
passenger terminals as improvements subject to real property taxes. The CBAA had
concluded that since petitioner was not engaged in purely governmental or public
service, the latter's endeavors were proprietary. Indeed, petitioner was deemed as a
profit-oriented endeavor, serving as it did, only the paying public.

ISSUE. Are the petitioner's carriageways and passenger terminal stations subject
to real property taxes?

RULING. YES. The Real Property Tax Code mandated that "there shall be levied,
assessed and collected in all provinces, cities and municipalities an annual ad
valorem tax on real property such as lands, buildings, machinery and other
improvements affixed or attached to real property not hereinafter specifically
exempted."

Petitioner does not dispute that its subject carriageways and stations may be
considered real property under Article 415 of the Civil Code. However, it resolutely
argues that the same are improvements, not of its properties, but of the
government-owned national roads to which they are immovably attached. They are
thus not taxable as improvements under the Real Property Tax Code. In essence, it
contends that to impose a tax on the carriageways and terminal stations would be to
impose taxes on public roads.

24
Under the Real Property Tax Code, real property is classified for assessment
purposes on the basis of actual use, which is defined as "the purpose for which the
property is principally or predominantly utilized by the person in possession of the
property.

Unlike public roads which are open for use by everyone, the Light Rail Transit (LRT)
is accessible only to those who pay the required fare. It is thus apparent that
petitioner does not exist solely for public service, and that the LRT carriageways and
terminal stations are not exclusively for public use. Although petitioner is a public
utility, it is nonetheless profit-earning. It actually uses those carriageways and
terminal stations in its public utility business and earns money therefrom.

Though the creation of the LRTA was impelled by public service to provide mass
transportation to alleviate the traffic and transportation situation in Metro Manila
its operation undeniably partakes of ordinary business. Petitioner is clothed with
corporate status and corporate powers in the furtherance of its proprietary
objectives. Indeed, it operates much like any private corporation engaged in the
mass transport industry. Given that it is engaged in a service-oriented commercial
endeavor, its carriageways and terminal stations are patrimonial property subject to
tax, notwithstanding its claim of being a government-owned or controlled
corporation.

(7) Caltex (Philippines), Inc. v. Central Board of Assessment


Appeals
G.R. No. L-50466
31 May 1982

FACTS. This case is about the realty tax on machinery and equipmentinstalled by
Caltex (Philippines) Inc. in its gas stations located on leased land. The machines and
equipment consists of underground tanks, elevated tank, elevated water tanks,
water tanks, gasoline pumps, computing pumps, waterpumps, car washer, car
hoists, truck hoists, air compressors and tireflators. The said machines and
equipment are loaned by Caltex to gas stationoperators under an appropriate lease
agreement or receipt. It is stipulated inthe lease contract that the operators, upon
demand, shall return to Caltex themachines and equipment in good condition as
when received, ordinary wearand tear excepted. Caltex retains the ownership
thereof during the term of thelease. The city assessor of Pasay City characterized the
said items of gas stationequipment and machinery as taxable realty. The realty tax

25
on said equipmentamounts to P4,541.10 annually (p. 52, Rollo). The city board of
tax appealsruled that they are personalty. The assessor appealed to the Central
Board of Assessment Appeals. The Board held that the said machines and equipment
are real property withinthe meaning of sections 3(k) & (m) and 38 of the Real
Property Tax Code,Presidential Decree No. 464, which took effect on June 1, 1974,
and that thedefinitions of real property and personal property in articles 415 and
416 of the Civil Code are not applicable to this case and was reiterated by the
Boardin its resolution of January 12, 1978, denying Caltex's motion
forreconsideration, a copy of which was received by its lawyer on April 2, 1979.On
May 2, 1979 Caltex filed this certiorari petition wherein it prayed for thesetting
aside of the Board's decision and for a declaration that the saidmachines and
equipment are personal property not subject to realty tax.

The Solicitor General's contention that the Court of Tax Appeals has exclusive
appellate jurisdiction over this case is not correct. When Republic act No. 1125
created the Tax Court in1954, there was as yet no Central Board of Assessment
Appeals. Section 7(3) of that law inproviding that the Tax Court had jurisdiction to
review by appeal decisions of provincial or cityboards of assessment appeals had in
mind the local boards of assessment appeals but not the Central Board of
Assessment Appeals which under the Real Property Tax Code has appellate
jurisdiction over decisions of the said local boards of assessment appeals and is,
therefore, inthe same category as the Tax Court.Section 36 of the Real Property Tax
Code provides that the decision of the Central Board of Assessment Appeals shall
become final and executory after the lapse of fifteen days from thereceipt of its
decision by the appellant. Within that fifteen-day period, a petition for
reconsideration may be filed. The Code does not provide for the review of the
Board's decisionby this Court. Consequently, the only remedy available for seeking a
review by this Court of the decision of the Central Board of Assessment Appeals is
the special civil action of certiorari,the recourse resorted to herein by Caltex
(Philippines), Inc.

ISSUE. Are the pieces of gas station equipment and machinery subject to realty
tax?

RULING. YES. This issue has to be resolved primarily under the provisions of
theAssessment Law and the Real Property Tax Code. Section 2 of the Assessment
Law provides that the realty tax is due "on realproperty, including land, buildings,
machinery, and other improvements" notspecifically exempted in section 3 thereof.
This provision is reproduced withsome modification in the Real Property Tax Code
which provides:

26
SEC. 38. Incidence of Real Property Tax. There shall be levied, assessed
andcollected in all provinces, cities and municipalities an annual ad valorem
tax onreal property, such as land, buildings, machinery and other
improvementsaffixed or attached to real property not hereinafter
specifically exempted.

The Code contains the following definitions in its section 3:

k) Improvements is a valuable addition made to property or an


ameliorationin its condition, amounting to more than mere repairs or
replacement of waste,costing labor or capital and intended to enhance its
value, beauty or utility or toadapt it for new or further purposes.

m) Machinery shall embrace machines, mechanical


contrivances,instruments, appliances and apparatus attached to the real
estate. It includesthe physical facilities available for production, as well as
the installations andappurtenant service facilities, together with all other
equipment designed for oressential to its manufacturing, industrial or
agricultural purposes.

Therefore, the said equipment and machinery, as appurtenances to the gasstation


building or shed owned by Caltex (as to which it is subject to realtytax) and which
fixtures are necessary to the operation of the gas station, forwithout them the gas
station would be useless, and which have been attachedor affixed permanently to
the gas station site or embedded therein, aretaxable improvements and machinery
within the meaning of the Assessment Law and the Real Property Tax Code.

(8) FELS Energy, Inc. v. Province of Batangas


G.R. No. 168557
16 February 2007

Power barges are categorized as immovable property by destination.

FACTS. Before us were filed by petitioners FELS Energy, Inc. (FELS) and National
Power Corporation (NPC), respectively for review on certiorari assailing the
decisions of the Court of Appeals in favor of The Province of Batangas, classifying
the Power Barges as real property, hence, subject to real property taxes.

On 18 January 1993, NPC entered into a lease contract with Polar Energy, Inc. over
3x30 MW diesel engine power barges moored at Balayan Bay in Calaca, Batangas.

27
The contract, denominated as an Energy Conversion Agreement (Agreement), was
for a period of five years. The Agreement includes an Article which pertains that
NAPOCOR shall be responsible for the payment of all taxes, import duties, fees,
charges and other levies imposed by the National Government of the Republic of the
Philippines or any agency or instrumentality thereof to which Polar may be or
become subject to or in relation to the performance of their obligations under this
agreement.

Subsequently, Polar Energy, Inc. assigned its rights under the Agreement to FELS.
On 7 August 1995, FELS received an assessment of real property taxes on the power
barges from Provincial Assessor Lauro C. Andaya of Batangas City. The assessed tax,
which likewise covered those due for 1994, amounted to 56,184,088.40 per
annum. FELS referred the matter to NPC, reminding it of its obligation under the
Agreement to pay all real estate taxes. It then gave NPC the full power and authority
to represent it in any conference regarding the real property assessment of the
Provincial Assessor.

In a letter dated 7 September 1995, NPC sought reconsideration of the Provincial


Assessors decision to assess real property taxes on the power barges. However, the
motion was denied. This prompted NPC to file a petition with the Local Board of
Assessment Appeals (LBAA) for the setting aside of the assessment and the
declaration of the barges as non-taxable items; it also prayed that should LBAA find
the barges to be taxable, the Provincial Assessor be directed to make the necessary
corrections. The Petition was likewise denied.

Aggrieved, FELS appealed the LBAAs ruling to the Central Board of Assessment
Appeals (CBAA). It initially ruled in favor of the Petitioner but subsequently
reversed its decision and affirmed the LBAA Batangas.

LBAA AND CBAA RESOLUTION. The LBAA ruled that the power plant facilities,
while they may be classified as movable or personal property, are nevertheless
considered real property for taxation purposes because they are installed at a
specific location with a character of permanency. The LBAA also pointed out that the
owner of the barges, FELS, a private corporation is the one being taxed, not NPC. A
mere agreement making NPC responsible for the payment of all real estate taxes and
assessments will not justify the exemption of FELS; such a privilege can only be
granted to NPC and cannot be extended to FELS. Resolution affirmed by the CBAA.

ISSUE. May the power barges, which are movable or personal property in nature,
be considered as real property that may be subjected to real property tax?

28
RULING. YES. The barges on which were mounted gas turbine power plants
designated to generate electrical power, the fuel oil barges which supplied fuel oil to
the power plant barges, and the accessory equipment mounted on the barges are
subject to real property taxation. Power barges are categorized as immovable
property by destination, being in the nature of machinery and other implements
intended by the owner for an industry or work which may be carried on in a
building or on a piece of land and which tend directly to meet the needs of said
industry or work.

Section 3
Immovable Property by Analogy

Go v. United Coconut Planters Bank


G.R. No. 156187
11 November 2004

The cancellation of the real estate mortgage is a real action, considering that a real
estate mortgage is a real right and a real property by itself.

FACTS. Petitioner Jimmy T. Go and Alberto T. Looyuko are co-owners of Noahs


Ark International, Noahs Ark Sugar Carriers, Noahs Ark Sugar Truckers, Noahs Ark
Sugar Repacker, Noahs Ark Sugar Insurers, Noahs Ark Sugar Terminal, Noahs Ark
Sugar Building, and Noahs Ark Sugar Refinery.

Sometime in August 1996, petitioner Jimmy T. Go and Alberto T. Looyuko applied


for an Omnibus Line accommodation with respondent United Coconut Planters
Bank (UCPB) in the amount of Nine Hundred Million (P900,000,000) Pesos and was
favorably acted upon by the latter and was secured by Real Estate Mortgages over
parcels of land, covered by Transfer Certificate of Title (TCT) No. 64070, located at
Mandaluyong City, and registered in the name of Mr. Looyuko; and TCT No. 3325,
also located at Mandaluyong City registered in the name of Noahs Ark Sugar
Refinery. Subsequently, the the approved Omnibus Line accommodation granted to
petitioner was cancelled by respondent UCPB.

Petitioner Jimmy T. Go filed a complaint for Cancellation of Real Estate Mortgage


and damages, with prayer for temporary restraining order and/or writ of
preliminary injunction, against respondent bank and its officers.

29
COMPLAINANT. The complaint alleged that that the approved omnibus credit line
applied for by him and Looyuko did not materialize and was cancelled by
respondent bank on 21 July 1997, so that the pre-signed real estate mortgages were
likewise cancelled; that he demanded from respondent bank that TCTs No. 64070
and No. 3325 be returned to him, but respondent bank refused to do so; that despite
the cancellation of the omnibus credit line on 21 July 1997, respondent bank had the
two deeds of real estate mortgage dated and notarized on 22 July 1997 and caused
the extrajudicial foreclosure of mortgage constituted on TCT No. 64070; that the
auction sale scheduled on 11 April 2000 and 03 May 2000 be enjoined; that the two
real estate mortgages be cancelled and TCTs No. 64070 and No. 3325 be returned to
him; and that respondent bank and its officers be ordered to pay him moral and
exemplary damages and attorneys fees.

RESPONDENT. The respondent filed a motion to dismiss based on the following


grounds: (1) that the court has no jurisdiction over the case due to nonpayment of
the proper filing and docket fees; (2) that the complaint was filed in the wrong
venue; (3) an indispensable party/real party in interest was not impleaded and,
therefore, the complaint states no cause of action; (4) that the complaint was
improperly verified; and (5) that petitioner is guilty of forum shopping and
submitted an insufficient and false certification of non-forum shopping.

ISSUE. Does the complaint for cancellation of real estate mortgage is a real action
for the purpose of determining venue?

RULING. YES. In a real action, the plaintiff seeks the recovery of real property, or
as provided for in Section 1, Rule 4 of the Rules of Court, a real action is an action
affecting title to or possession of real property, or interest therein. These include
partition or condemnation of, or foreclosure of mortgage on, real property. The
venue for real actions is the same for regional trial courts and municipal trial courts
-- the court which has territorial jurisdiction over the area where the real property
or any part thereof lies.

Personal action is one brought for the recovery of personal property, for the
enforcement of some contract or recovery of damages for its breach, or for the
recovery of damages for the commission of an injury to the person or property. The
venue for personal actions is likewise the same for the regional and municipal trial
courts -- the court of the place where the plaintiff or any of the principal plaintiffs
resides, or where the defendant or any of the principal defendants resides, at the
election of the plaintiff, as indicated in Section 2 of Rule 4.

30
In the case of Francisco S. Hernandez v. Rural Bank of Lucen, it was primarily an
action to compel the mortgagee bank to accept payment of the mortgage debt and to
release the mortgage. That action, which is not expressly included in the
enumeration found in Section 2(a) of Rule 4 of the Old Civil Procedure and now
under Section 1, Rule 4 of the 1997 Rules of Civil Procedure, does not involve titles
to the mortgaged lots. It is a personal action and not a real action. The mortgagee
has not foreclosed the mortgage. Hence, the venue of the plaintiffs personal action
is the place where the defendant or any of the defendants resides or may be found,
or where the plaintiff or any of the plaintiffs resides, at the election of the plaintiff.

In the case at bar, the action for cancellation of real estate mortgage filed by herein
petitioner was primarily an action to compel private respondent bank to return to
him the properties covered by TCTs No. 64070 and No. 3325 over which the bank
had already initiated foreclosure proceedings because of the cancellation by the said
respondent bank of the omnibus credit line. The prime objective is to recover said
real properties.

In sum, the cancellation of the real estate mortgage, subject of the instant petition, is
a real action, considering that a real estate mortgage is a real right and a real
property by itself. An action for cancellation of real estate mortgage is necessarily an
action affecting the title to the property. It is, therefore, a real action which should
be commenced and tried in Mandaluyong City, the place where the subject property
lies.

---oOo---

31
CHAPTER III
MOVABLE PROPERTY
Articles 416-418 & 426, Civil Code

(1) Laurel v. Abrogar


G.R. No. 155076
27 February 2006

International long distance calls and interest in business are considered personal
properties which may be subject of theft.

FACTS. On September 1999 in Makati City, the petitioner Luis Marcos P. Laurel
was charged for theft under Article 308 of the Revised Penal Code (RPC) for
unlawfully taking, stealing, and using the international long distance calls belonging
to Philippine Long Distance Telephone Company (PLDT) by conducting
International Simple Resale (ISR), which is a method of routing and completing
international long distance calls using lines, cables, antenae, and/or air wave
frequency which connect directly to the local or domestic exchange facilities of the
country where the call is destined, effectively stealing this business from PLDT
while using its facilities in the estimated amount of P20,370,651.92 to the damage
and prejudice of PLDT.

Petitioner filed a "Motion to Quash (with Motion to Defer Arraignment)," on the


ground that the factual allegations in the Amended Information do not constitute
the felony of theft. The trial court denied the Motion to Quash the Amended
Information, as well petitioner's subsequent Motion for Reconsideration.

Petitioner's special civil action for certiorari was dismissed by the Court of Appeals
(CA). Thus, petitioner filed the instant Petition for Review with the Supreme Court
(SC). The SC held that the Information does not contain material allegations
charging petitioner with theft of personal property since international long distance
calls and the business of providing telecommunication or telephone services are not
personal properties under Article 308 of the Revised Penal Code.

Respondent PLDT filed a Motion for Reconsideration with Motion to Refer the Case
to the Supreme Court En Banc. It maintains that the Revised Penal Code (RPC)
should be interpreted in the context of the Civil Code's definition of real and
personal property. The enumeration of real properties in Article 415 of the Civil
Code is exclusive such that all those not included therein are personal properties.

32
Since Article 308 of the RPC used the words "personal property" without
qualification, it follows that all "personal properties" as understood in the context of
the Civil Code, may be the subject of theft under Article 308 of the RPC. PLDT alleges
that the international calls and business of providing telecommunication or
telephone service are personal properties capable of appropriation and can be
objects of theft.

ISSUE. Can the international calls and the business of PLDT be considered as
personal properties which can be the subject of theft?

RULING. YES; however, in this case, only the business of PLDT is the subject of
theft. Personal property" is anything susceptible of appropriation and not real
property. Taking from the Civil Code, the legislature did not limit or qualify the
definition of "personal property" in the Revised Penal Code (RPC). Neither did it
provide a restrictive definition or an exclusive enumeration of "personal property"
in the RPC, thereby showing its intent to retain for the term an extensive and
unqualified interpretation.

Petitioner's acts constitute theft of respondent PLDT's business and service,


committed by means of the unlawful use of the latter's facilities. In this regard, the
Amended Information inaccurately describes the offense by making it appear that
what petitioner took were the international long distance telephone calls, rather
than respondent PLDT's business.

It may be conceded that "international long distance calls," the matter alleged to be
stolen in the instant case, take the form of electrical energy (a force of nature under
the control of science), it cannot be said that such international long distance calls
were personal properties belonging to PLDT since the latter could not have acquired
ownership over such calls. PLDT merely encodes, augments, enhances, decodes and
transmits said calls using its complex communications infrastructure and facilities.
PLDT not being the owner of said telephone calls, then it could not validly claim that
such telephone calls were taken without its consent. It is the use of these
communications facilities without the consent of PLDT that constitutes the crime of
theft, which is the unlawful taking of the telephone services and business.

Therefore, the business of providing telecommunication and the telephone service


are personal property under Article 308 of the Revised Penal Code, and the act of
engaging in ISR is an act of "subtraction" penalized under said article. In order to
correct the inaccuracy of the Information, the case was remanded to the trial court
and the prosecution directed to amend the Amended Information, to clearly state

33
that the property subject of the theft are the services and business of respondent
PLDT.

(2) BPI Family Bank v. Franco


G.R. No. 123498
23 November 2007

The owner of a specific or determinate movable may recover its possession from
another. Such rule does not apply to generic movables like money.

FACTS. Franco opened 3 accounts with BPI with the total amount of 2,000,000.
The said amount used to open these accounts is traceable to a check issued by
Tevesteco. The funding for the P2,000,000 check was part of the P80,000,000
debited by BPI from FMICs account (with a deposit of P100,000,000) and credited
to Tevestecos account pursuant to an Authority to Debit which was allegedly forged
as claimed by FMIC.

Tevesteco effected several withdrawals already from its account amounting to


37,455,410.54 including the 2,000,000 paid to Franco.

Franco issued two checks which were dishonored upon presentment for payment
due to garnishment of his account filed by BPI.

BPI claimed that it had a better right to the amounts which consisted of part of the
money allegedly fraudulently withdrawn from it by Tevesteco and ending up in
Francos account. BPI urges us that the legal consequence of FMICs forgery claim is
that the money transferred by BPI to Tevesteco is its own, and considering that it
was able to recover possession of the same when the money was redeposited by
Franco, it had the right to set up its ownership thereon and freeze Francos accounts.

ISSUE. Does the bank have a better right to the deposits in Francos account?

RULING. NO. Article 559 of the Civil Code provides that the possession of movable
property acquired in good faith is equivalent to a title. Nevertheless, one who has
lost any movable or has been unlawfully deprived thereof, may recover it from the
person in possession of the same.

34
If the possessor of a movable lost or of which the owner has been unlawfully
deprived, has acquired it in good faith at a public sale, the owner cannot obtain its
return without reimbursing the price paid therefor.

The deposit in Francos accounts consists of money which, albeit characterized as a


movable, is generic and fungible. The quality of being fungible depends upon the
possibility of the property, because of its nature or the will of the parties, being
substituted by others of the same kind, not having a distinct individuality.

Significantly, while Article 559 permits an owner who has lost or has been
unlawfully deprived of a movable to recover the exact same thing from the current
possessor, BPI simply claims ownership of the equivalent amount of money, that is,
the value thereof, which it had mistakenly debited from FMICs account and credited
to Tevestecos, and subsequently traced to Francos account. In fact, this is what BPI
did in filing the Makati Case against Franco. It staked its claim on the money itself
which passed from one account to another, commencing with the forged Authority
to Debit.

It bears emphasizing that money bears no earmarks of peculiar ownership, and this
characteristic is all the more manifest in the instant case which involves money in a
banking transaction gone awry. Its primary function is to pass from hand to hand as
a medium of exchange, without other evidence of its title. Money, which had passed
through various transactions in the general course of banking business, even if of
traceable origin, is no exception.

Thus, inasmuch as what is involved is not a specific or determinate personal


property, Article 559 is inapplicable to the instant case.

There is no doubt that BPI owns the deposited monies in the accounts of Franco, but
not as a legal consequence of its unauthorized transfer of FMICs deposits to
Tevestecos account. BPI conveniently forgets that the deposit of money in banks is
governed by the Civil Code provisions on simple loan or mutuum. As there is a
debtor-creditor relationship between a bank and its depositor, BPI-FB ultimately
acquired ownership of Francos deposits, but such ownership is coupled with a
corresponding obligation to pay him an equal amount on demand. Although BPI
owns the deposits in Francos accounts, it cannot prevent him from demanding
payment of BPI obligation by drawing checks against his current account, or asking
for the release of the funds in his savings account. Thus, when Franco issued checks
drawn against his current account, he had every right as creditor to expect that
those checks would be honored by BPI as debtor.

35
More importantly, BPI does not have a unilateral right to freeze the accounts of
Franco based on its mere suspicion that the funds therein were proceeds of the
multi-million peso scam Franco was allegedly involved in. To grant BPI, or any bank
for that matter, the right to take whatever action it pleases on deposits which it
supposes are derived from shady transactions, would open the floodgates of public
distrust in the banking industry.

---oOo---

36
CHAPTER IV
PROPERTY OF PUBLIC DOMINION
Articles 419-424, Civil Code

(1) Republic v. (Apostolita) San Mateo


G.R. No. 203560
10 November 2014

It is not enough for the PENRO or CENRO to certify that a land is alienable and
disposable; the applicant for land registration must prove that the DENR Secretary
had approved the land classification.

FACTS. The case started from a petition for registration of land. The respondents,
Mateo, Tapang, Action and Mercado petitioned for registration of title over a 12,896
square meter parcel of land located in Taguig City. Respondents averred that the
land used to be owned by their grandfather, Leocadio Landrito. When Leocadio died,
it was inherited by his three children, Crisanta, Amador, and Juanito. Juanito and
Amador subsequently mortgaged their share to Crisanta and her husband and
former failed to settle their obligation. Because of this, waiver of rights in favor of
the respondents was executed in favor of the heirs of Crisanta.

After the notice for initial hearing was published and posted in several public places
in Taguig, there were three who opposed the petition for registration, namely: Globe
Steel Corporation, New Donavel Compound Neighborhood Association, and Laguna
Lake Development Authority. New Donavel Compound Neighborhood Association
argued that they have a better right to apply for registration because the lot would
be unfit for human habitation. Laguna Lake Development Authority, on the other
hand, claimed that the lot is an inalienable land because it is located below the
reglementary lake elevation of 12.5 meters.

The Regional Trial Court (RTC) granted the registration for the petition for title for
two reasons:

First, because, based on the tax declarations, the family and the heirs of Locadio had
been in open, continuous, exclusive and notorious possession of the subject lot since
1948. Tax declarations are not conclusive proof of ownership but a good indicia of
possession.

37
Second, RTC found that the lot is alienable. It relied on the certifications of the
Department of Environment and Natural Resources (DENR) South Community
Environment and Natural Resources Office (CENRO) that the lot is within the
alienable and disposable land.

ISSUE. Were the respondents able to prove that the subject property is alienable?

RULING. NO. As a rule, it is not enough for the CENRO to certify that a land is
alienable and disposable. The applicant for land registration must prove that the
DENR Secretary had approved the land classification for registration.

Respondents merely relied on the verification of DENR-South CENRO to the effect


that the subject property is alienable without the approval of such certification by
the DENR Secretary making it insufficient to support a petition for registration of
land. Hence, the respondents' application for registration of title shall be denied.

(2) Remman Enterprises, Inc. v. Republic


G.R. No. 188494
26 November 2014

An application for original registration must be accompanied by: (1) CENRO or PENRO
Certification; and (2) a copy of the original classification approved by the DENR
Secretary and certified as a true copy by the legal custodian of the official records.

FACTS. The petitioner, through its authorized representative Ronnie P. Inocencio


(Inocencio), filed with the Regional Trail Court (RTC) on 4 June 1998 an application
for registration of the subject properties situated in Barangay Napindan, Taguig,
Metro Manila, with an area of 27,477 sq. m., 23,179 sq. m., and 45,636 sq. m. The
State, through the Office of the Solicitor General (OSG), interposed its opposition to
the application.

During the initial hearing of the case on 4 May 1999, the petitioner presented and
marked documentary evidence to prove its compliance with jurisdictional
requirements. On 25 October 1999, the petitioner was allowed to present its
evidence before the Branch Clerk of Court of the RTC. Inocencio, the petitioners
sales manager, testified that the subject properties were purchased on 28 August
1989 by the petitioner from sellers Magdalena Samonte, Jaime Aldana and Virgilio
Navarro. The properties were declared for taxation purposes on 9 August 1989.

38
After the sale, the petitioner occupied the properties and planted thereon crops like
rice, corn and vegetables. Witness Cenon Serquia (Serquia) supported the
application for registration by claiming that he had been the caretaker of the subject
properties since 1957, long before the lots were purchased by the petitioner.
Serquia alleged that no person other than the applicant and its predecessors-in-
interest had claimed ownership or rights over the subject properties.

REGIONAL TRIAL COURT. On 27 November 2001, the RTC rendered its Decision
granting the petitioners application. Dissatisfied, the State appealed to the Court of
Appeals (CA) by alleging substantive and procedural defects in the petitioners
application. It argued that the identity of the subject properties was not sufficiently
established. The State further claimed that the character and length of possession
required by law in land registration cases were not satisfied by the petitioner.

COURT OF APPEALS. Finding merit in the appeal, the CA reversed the RTC
decision. The CA explained that the survey plans and technical descriptions
submitted by the petitioner failed to establish the true identity of the subject
properties. The application should have been accompanied by the original tracing
cloth plan duly approved by the Director of Lands. The petitioner should have also
submitted a certification from the proper government office stating that the
properties were already declared alienable and disposable. The CA further cited a
failure to establish that the petitioner and its predecessors-in-interest possessed the
subject parcels of land under a bona fide claim of ownership since 12 June 1945 or
earlier.

PETITIONER. The petitioner argues that the identity of the subject properties was
sufficiently established through the submission of the original tracing cloth plans,
survey plans and technical descriptions. The alienable and disposable character of
the properties was also duly established via a certification issued by the Community
Environment and Natural Resources Office (CENRO) of the Department of
Environment and Natural Resources (DENR). Further, it claims that it and its
predecessors-in-interest possessed the parcels of land in the nature and within the
length of time required by law.

ISSUE. Is the subject property alienable and disposable?

RULING. NO. the CAs dismissal of the petitioners application for original
registration was proper considering the latters failure to sufficiently establish that
the subject properties were already declared alienable and disposable by the

39
government. Its reliance on a Report, issued by the CENRO, DENR National Capital
Region, West Sector, was misplaced.

A Provincial Environment and Natural Resources Office (PENRO) or CENRO


certification, by itself, fails to prove the alienable and disposable character of a
parcel of land. It is not enough for the PENRO or CENRO to certify that a land is
alienable and disposable. The applicant for land registration must prove that the
DENR Secretary had approved the land classification and released the land of the
public domain as alienable and disposable, and that the land subject of the
application for registration falls within the approved area per verification through
survey by the PENRO or CENRO. In addition, the applicant for land registration must
present a copy of the original classification approved by the DENR Secretary and
certified as a true copy by the legal custodian of the official records. These facts
must be established to prove that the land is alienable and disposable. Respondents
failed to do so because the certifications presented by respondent do not, by
themselves, prove that the land is alienable and disposable.

The present rule on the matter then requires that an application for original
registration be accompanied by: (1) CENRO or PENRO Certification; and (2) a copy
of the original classification approved by the DENR Secretary and certified as a true
copy by the legal custodian of the official records.

The burden of proof in overcoming the presumption of State ownership of the lands
of the public domain is on the person applying for registration, who must prove that
the properties subject of the application are alienable and disposable. Even the
notations on the survey plans submitted by the petitioner cannot be admitted as
evidence of the subject properties alienability and disposability. Such notations do
not constitute incontrovertible evidence to overcome the presumption that the
subject properties remain part of the inalienable public domain.

(3) Republic v. (Michael C.) Santos


G.R. No. 180027
18 July 2012

Jura Regalia: The State is the original proprietor of all lands and, as such, is the
general source of all private titles. Absent a clear showing that land had been let into
private ownership through the States imprimatur, such land is presumed to belong to
the State.

40
FACTS. Michael C. Santos, Vannessa C. Santos, Michelle C. Santos, and Delfin Santos
purchased three (3) parcels of unregistered land situated in Barangay Carasuchi,
Indang, Cavite. They purchased it from Generosa Asuncion, Teresita Sernal, and the
spouses Jimmy and Imelda Antona. The three (3) parcels were consolidated into a
single lot (Lot 3) with a determined total area of nine thousand five hundred
seventy-seven (9,577) square meters.

On 12 March 2002, the respondents filed with the Regional Trial Court (RTC) an
Application for Original Registration of Lot 3. Their application was docketed as LRC
Case No. NC-2002-1292. The Trial Court required the Department of Environment
and Natural Resources (DENR) to submit a report on the status of Lot 3. The DENR
Calabarzon Office submitted its Report to the RTC. The Report relates that the area
covered by Lot 3 "falls within the Alienable and Disposable Land, Project No. 13 of
Indang, Cavite certified on March 15, 1982." After fulfillment of the jurisdictional
requirements, the government, through the Office of the Solicitor General, filed the
lone opposition to the respondents application on 13 May 2003. During trial,
Generosa revealed that the portions of Lot 3 previously pertaining to her and
Teresita were once owned by her father, Mr. Valentin Sernal and that the latter had
"continuously, openly and peacefully occupied and tilled as absolute owner" such
lands even "before the outbreak of World War 2. To further substantiate the above
testimonies, the respondents also presented various Tax Declarations covering
certain areas of Lot 3 the earliest of which dates back to 1948 and covers the
portions of the subject lot previously belonging to Generosa and Teresita. The
government however insists that the subject Lot still forms part of the public
domain and, hence, not subject to private acquisition and registration.

ISSUE. Does Lot 3 still form part of the public domain and therefore not subject
to private acquisition and registration?

RULING. YES. Jura Regalia means that the State is the original proprietor of all
lands and, as such, is the general source of all private titles. Absent a clear showing
that land had been let into private ownership through the States imprimatur, such
land is presumed to belong to the State.

The Governing law in the case at bat is Section 14(1) of Presidential Decree No.
1529 refers to the original registration of "imperfect" titles to public land acquired
under Section 11(4) in relation to Section 48(b) of Commonwealth Act No. 141, or
the Public Land Act, as amended. Section 14(1) of Presidential Decree No. 1529 and
Section 48(b) of Commonwealth Act No. 141 specify identical requirements for the
judicial confirmation of "imperfect" titles, to wit:

41
1. That the subject land forms part of the alienable and disposable lands 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 of the subject land under a bona fide claim of ownership, and;

3. That such possession and occupation must be since June 12, 1945 or earlier.

The respondents were not able to satisfy the third requisite, none of them testified
about possession and occupation of the subject parcels of land dating back to 12
June 1945 or earlier. Rather, the said witnesses merely related that they have been
in possession of their lands "for over thirty years" prior to the purchase thereof by
respondents in 1997. Furthermore the supporting tax declarations presented by the
respondents also fall short of proving possession since 12 June 1945 or earlier. With
no further acceptable claim by the respondents, the Regalian presumption stands
and must be enforced in this case.

(4) Republic v. (Corazon C.) Sese


G.R. No. 185092
4 June 2014

Without the express declaration by the State that such land is no longer intended for
public use and that it is already for the development of National wealth or converted
to a patrimonial property, it remains to be property of public domain and not
susceptible for acquisition by virtue of prescription.

FACTS. On 17 September 2002, Corazon C. Sese and Fe C. Sese (respondents) filed


with the MTC an application for original registration of land over a parcel of land
with an area of 10,792 square meters, situated in Barangay Sto. Cristo, Municipality
of Pulilan, Province of Bulacan, and more particularly described as Lot 11247, Cad.
345, Pulilan Cadastre, under Plan No. AP-03-004226.

In support of their application, respondents submitted the following documents,


namely: (1) Tax Declaration No. 99-19015-01557 "in the name of Corazon Sese and
Fe Sese, minor, representing their mother Resurreccion Castro, as her Natural
Guardian"; (2) Certificate of Technical Description which was approved on 10
December 1998 by the Land Management Service, Region III, of the Department of

42
Environment and Natural Resources (DENR); (3) Certification in lieu of lost
Surveyors Certificate issued by the same authority; (4) Official Receipt of payment
of real property tax over the subject property; (5) Certification from the Office of the
Municipal Treasurer of Pulilan, stating that the registered owners of a property
under Tax Declaration No. 99-19-015-01557 were Corazon Sese and others; and (6)
Survey plan of Lot 11247, CAD 345, Pulilan Cadastre, approved by the Regional
Technical Director of the Land Management Service, Region III, of the DENR, stating
that the land subject of the survey was alienable and disposable land, and as
certified to by the Bureau of Forestry on 1 March 1927, was outside of any civil or
military reservation. On the lower portion of the plan, there was a note stating that a
deed of absolute sale over the subject property was executed by a certain Luis
Santos and Fermina Santos (the Santoses) in favor of Resurreccion on 4 October
1950.

On the lower portion of the survey plan, a note stated, among others, that: "This
survey is inside the alienable and disposable area as per Project No. 20 LC Map No.
637 certified by the Bureau of Forestry on 1 March 1927. It is outside any civil or
military reservation." The said plan was approved by the DENR, Land Management
Services, Regional Office III, San Fernando, Pampanga, on 3 December 1998.

The Municipal Trial Court (RTC) ruled that the respondents were the owner having
established the sufficient form and substance and for the failure of the Office of
Solicitor General (OSG) to oppose. The Court of Appeals (CA) ruled that the survey
plan issued by the DENR is a public document thus sufficient.

OSG. The OSG interposed an appeal with the CA, and presented the following
assignment of errors: (a) only alienable lands of the public domain occupied and
possessed in concept of owner for a period of at least thirty (30) years is entitled to
confirmation of title; and (b) respondents failed to prove specific acts of possession.

The OSG argued that there was no proof that the subject property was already
segregated from inalienable lands of the public domain. Verily, it was only from the
date of declaration of such lands as alienable and disposable that the period for
counting the statutory requirement of possession would start. Also, there was
absolutely no proof of respondents supposed possession of the subject property.
Save for the testimony of Corazon that "at present, the worker of (her) mother is
occupying the subject property," there was no evidence that respondents were
actually occupying the subject tract of land or that they had introduced
improvement thereon.

43
APPLICANTS. Corazon and Fe alleged that on 22 July 1972, they acquired, through
a donation inter vivos from their mother, Resurreccion L. Castro (Resurreccion), the
subject agricultural land; that they, through their predecessors-in-interest, had been
in possession of the subject property; and that the property was not within a
reservation.

ISSUE. Can Corazon and Fe file for the application for the original registration over
the said parcel of land?

RULING. NO. Applicants for registration of land title must establish and prove: (1)
that the subject land forms part of the disposable and alienable lands of the public
domain; (2) that the applicant and his predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation of the same; and (3)
that it is under a bona fide claim of ownership since June 12, 1945, or earlier.
Compliance with the foregoing requirements is indispensable for an application for
registration of land title, under Section 14(1) of P.D. No. 1529, to validly prosper.
The absence of any one requisite renders the application for registration
substantially defective.

Section 2, Article XII of the 1987 Constitution, provides: "All lands of the public
domain, waters, minerals, coal, petroleum, and other mineral oils, all forces of
potential energy, fisheries, forests or timber, wildlife, flora and fauna, and other
natural resources are owned by the State. In the present case, petitioners cite a
surveyor geodetic engineers notation in Exhibit "E" indicating that the survey was
inside alienable and disposable land. Such notation does not constitute a positive
government act validly changing the classification of the land in question. Verily, a
mere surveyor has no authority to reclassify lands of the public domain. By relying
solely on the said surveyors assertion, petitioners have not sufficiently proven that
the land in question has been declared alienable.

Respondents likewise failed, to prove that the earliest that respondents and their
predecessor-in-interest can trace back possession and occupation of the subject
land was only in the year 1950, when their mother, Resurreccion, acquired the
subject land from the Santoses on October 4, 1950 by virtue of an absolute sale.
Evidently, their possession of the subject property commenced roughly five (5)
years beyond 12 June 1945, the reckoning date expressly provided under Section
14(1) of P.D. No. 1529. Thus, their application for registration of land title was
legally infirm.

44
Without the express declaration by the State that such land is no longer intended for
public use and that it is already for the development of National wealth or converted
to a patrimonial property, it remains to be property of public domain and not
susceptible for acquisition by virtue of prescription. Not only did respondents need
to prove the classification of the subject land as alienable and disposable, but also to
show that it has been converted into patrimonial.

(5) Republic v. (Francisca) Santos


G.R. No. 191516
4 June 2014

An applicant must prove that the land subject of an application for registration is
alienable and disposable by establishing the existence of a positive act of the
government.

FACTS. The respondents, Francisca, Geronimo and Crispin, all surnamed Santos,
filed an Application for Registration of title for four parcels of land described as Lot
Nos. 1101, 1214, 1215, all Mcadm 590-D of the Taguig Cadastre, covering areas of
12,221; 4,218; 9,237; and 1,000 square meters, respectively. Lot Nos. 1101, 1214
and 1215, described in SWO-13-000464, are located in Barrio Sta. Ana, Taguig.

On 28 April 1997, respondents and Eusebio Santos filed a Joint Motion-


Manifestation praying that the latter be included as one of the applicants.
Accordingly, on 8 September 1997, the Court a quo ordered the inclusion of Eusebio
Santos as one of the applicants for the land registration.

On 16 March 2004, the applicants presented their evidence ex parte. On 28 March


2006, applicant Francisca Santos was presented as a witness on behalf of all the
applicants. The court a quo, based on the above-mentioned oral and documentary
evidence submitted, was satisfied that the respondents have discharged their
burden of proving their registrable right over the said properties. Accordingly, on 19
April 2006, the court a quo ordered the registration of the said properties in the
names of the respondents.

On 3 July 2008, the Solicitor General filed an appeal before the Court of Appeals
(CA). On 15 July 2009, the CA promulgated its Decision affirming in toto the Decision
of the Regional Trial Court (RTC).

45
ISSUE. Have the subject lots been declared alienable and disposable lands of the
public domain at the time the application was filed?

RULING. NO. An applicant must prove that the land subject of an application for
registration is alienable and disposable by establishing the existence of a positive
act of the government such as a presidential proclamation or an executive order; an
administrative action; investigation reports of Bureau of Lands investigators; and a
legislative act or a statute. The applicant may also secure a certification from the
government that the land claimed to have been possessed for the required number
of years is alienable and disposable. The evidence required to establish that land
subject of an application for registration is alienable and disposable are: (1) CENRO
or PENRO Certification; and (2) a copy of the original classification approved by the
DENR Secretary and certified as a true copy by the legal custodian of the official
records. In the present case, the foregoing documents had not been submitted in
evidence. There is no copy of the original classification approved by the DENR
Secretary. As ruled by this Court, a mere certification issued by the Forest Utilization
& Law Enforcement Division of the DENR is not enough. Petitioner is then correct
that evidence on record is not sufficient to prove that subject lots had been declared
alienable and disposable lands.

(6) Republic v. (Emmanuel C.) Cortez


G.R. No. 186639
5 February 2014

Applicants for registration of title must sufficiently establish first, that the subject land
forms part of the disposable and alienable lands of the public domain; second, that the
applicant and his predecessors-in-interest have been in open, continuous, exclusive,
and notorious possession and occupation of the same; and third, that it is under a bona
fide claim of ownership since 12 June 1945, or earlier.

FACTS. Respondent Cortez filed for a judicial confirmation of title over a parcel of
land located at Pateros, Manila. In support of his application, he submitted the
following documents: (1) tax declarations for various years from 1966 until 2005;
(2) survey plan of the property, with the annotation that the property is classified as
alienable and disposable; (3) technical description of the property, with a
certification issued by a geodetic engineer; (4) tax clearance certificate; (5)
extrajudicial settlement of estate dated March 21, 1998, conveying the subject
property to Cortez; and (6) escritura de particion extrajudicial dated July 19, 1946,
allocating the subject property to Felicisima Cotas Cortez mother. He claimed that

46
the subject parcel of land was part of a bigger parcel of land owned by his mother.
When his parents died, he and his siblings executed and extra-judicial settlement of
Estate and the subject parcel of land was given to him. He added that he and his
predecessors-in-interest had been in the possession over the land since time
immemorial and that it was also classified as alienable and disposable and that it
was not part of the reservation as certified by the Department of Environment and
Natural Resources (DENR). The Regional Trial Court (RTC) then granted the
application.

The Republic of the Philippines, as represented by the Office of the Solicitor General
(OSG), appealed to the Court of Appeals (CA) and alleged that the grant of
application was erroneous because no certification was shown to prove that the
land was classified as alienable and disposable, and that Cortez also failed to show
that they had been in possession over the land for at least 30 years. However, the CA
confirmed the decision of the RTC and ruled that Cortez was able to prove that the
subject property was indeed alienable and disposable and that he and his
predecessors-in-interest had been in open, continuous, exclusive and notorious
possession over the parcel of land since time immemorial.

ISSUE. Did the CA err in confirming the grant of application by the RTC to Cortez?

RULING. YES. Cortez failed to comply with the required requisite under Section 14
of P.D. No. 1529. The said law refers to the judicial confirmation of imperfect or
incomplete titles to public land acquired under Section 48(b) of C.A. No. 141, as
amended by P.D. No. 1073. Under Section 14(1) [of P.D. No. 1529], applicants for
registration of title must sufficiently establish first, that the subject land forms part
of the disposable and alienable lands of the public domain; second, that the
applicant and his predecessors-in-interest have been in open, continuous, exclusive,
and notorious possession and occupation of the same; and third, that it is under a
bona fide claim of ownership since 12 June 1945, or earlier.

All the requisites were not complied. First, the annotation at the survey plan that the
subject parcel of land was classified as alienable and disposable is not and
incontrovertible evidence to overcome the presumption that the subject property
remains part of the inalienable. The applicant must at the very least submit a
certification from the proper government agency stating that the parcel of land
subject of the application for registration is indeed alienable and disposable. Second
and third, Cortez failed to present any evidence to prove that he and his
predecessors-in-interest have been in open, continuous, exclusive, and notorious
possession and occupation of the subject property since 12 June 1945, or earlier.

47
Cortez was only able to present oral and documentary evidence of his and his
mothers ownership and possession of the subject property since 1946, the year in
which his mother supposedly inherited the same. Further, the earliest tax
declaration presented by Cortez was only in 1966. Cortez failed to explain why,
despite his claim that he and his predecessors-in-interest have been in possession of
the subject property since time immemorial, it was only in 1966 that his
predecessors-in-interest started to declare the same for purposes of taxation.

(7) Republic v. AFP Retirement and Separation Benefits System


G.R. No. 180463
16 January 2013

Certificates of title issued covering inalienable and non-disposable public land, even in
the hands of an alleged innocent purchaser for value, should be cancelled.

FACTS. Lots X, Y-1 and Y-2 lands of the public domain consisting of 52,678 square
meters located in Barrio Dadiangas, General Santos Municipality were reserved for
recreation and health purposes by virtue of Proclamation No. 168, which was issued
in 1963. Respondents-intervenors waged a campaign through petitions and pleas
made to the President to have Lots Y-1 and Y-2 taken out of the reservation for the
reason that through their predecessor Cabalo Kusop, they have acquired vested
private rights over these lots. This campaign resulted in Proc. 2273, which re-
classified and returned Lots Y-1 and Y-2 to their original alienable and disposable
state. In 1983, Proclamation No. 2273 was issued amending Proc. 168, and
removing and segregating Lots Y-1 and Y-2 from the reservation and declaring them
open for disposition to qualified applicants. As a result, only Lot X which consists of
15,020 square meters remained part of the reservation now known as Magsaysay
Park.

In 1997, respondents-intervenors filed applications for the issuance of individual


miscellaneous sales patents over the whole of Lot X with the Department of
Environment and Natural Resources (DENR) regional office in General Santos City,
which approved them. Consequently, 16 original certificates of title (OCTs) covering
Lot X were issued in the names of respondents-intervenors and several others. In
September 1997, these 16 titles were simultaneously conveyed to herein
respondent AFP-Retirement and Separation Benefits System (AFP-RSBS), resulting
in the issuance of 16 new titles (the AFP-RSBS titles) Transfer Certificates of Title
(TCT) No. T-81051 through T-81062, T-81146-T-81147, and T-81150-T-81151.

48
On 11 September 1998, herein petitioner Republic of the Philippines instituted Civil
Case No. 6419, which is a Complaint for reversion, cancellation and annulment of
the AFP-RSBS titles, on the thesis that they were issued over a public park which is
classified as inalienable and non-disposable public land.

ISSUE. Is Lot X disposable?

RULING. NO. Evidently, the sales patents over Lot X are null and void, for at the
time the sales patents were applied for and granted, the land had lost its alienable
and disposable character. It was set aside and was being utilized for a public
purpose, that is, as a recreational park. Under Section 83 of C.A. No. 141, "the
President may designate by proclamation any tract or tracts of land of the public
domain as reservations for the use of the Commonwealth of the Philippines or of
any of its branches, or of the inhabitants thereof, in accordance with regulations
prescribed for this purpose, or for quasi-public uses or purposes, when the public
interest requires it, including reservations for highways, rights of way for railroads,
hydraulic power sites, irrigation systems, communal pastures or leguas comunales,
public parks, public quarries, public fishponds, workingmen's village and other
improvements for the public benefit." And under the present Constitution, national
parks are declared part of the public domain, and shall be conserved and may not be
increased nor diminished, except by law.

Proof or evidence of possession since time immemorial becomes irrelevant and


cannot support a claim of ownership or application for a patent, not only because
respondents-intervenors have conceded ownership to the State, but also on account
of the fact that Lot X has been withdrawn from being alienable and disposable public
land, and is now classified and being used as a national park. It has ceased to be
alienable, and no proof by the respondents-intervenors will operate to bolster their
claim; Lot X will never be awarded to them or to anybody so long as it is being used
as a public park or reserve.

(8) (Jean) Tan v. Republic


G.R. No. 193443
16 April 2012

Possession and occupation of an alienable and disposable public land for the periods
provided under the Civil Code will not convert it to patrimonial or private property.
There must be an express declaration that the property is no longer intender for public
service or the development of national wealth.

49
FACTS. On 14 June 2001, petitioners Jean Tan et. al. filed an application for land
registration of a 6,920 sq. m. land located in Barangay Bancod, Indang, Cavite. The
petitioners alleged that they acquired the property from Gregorio Gatdula on 25
April 1996, and that they and their predecessors have been in open, continuous and
exclusive possession of the property for more than 30 years. The Regional Trial
Court (RTC) granted their application and registered the land in the names of Jean
Tan and co.

The Republic of the Philippines filed an appeal to the Court of Appeals (CA) who
ruled that the petitioners failed to prove that they and their predecessors have been
in possession of the subject property for more than 30 years stating in their decision
that their possession can only be reckoned from 21 June 1983 when the subject
property became alienable and disposable. With that said, the petitioners have only
been in possession of the property for only 18 years falling short of the 30 year
requirement. Moreover, the CA posited that there was no adequate evidence
indicating possession in the concept of an owner. Petitioners only presented various
tax declarations to prove possession.

The petitioners submitted an appeal to the Supreme Court (SC) containing


documents such as testimonies, tax declarations, resolutions of the Sangguniang
Bayan of Indang, Cavite, and various certifications which they claim is sufficient to
demonstrate that they acquired title over the property by prescription.

ISSUE. Have the petitioners proven themselves to be qualified to the benefits


under the relevant laws on the confirmation of imperfect or incomplete titles?

RULING. NO. Possession and occupation of an alienable and disposable public land
for the periods provided under the Civil Code will not convert it to patrimonial or
private property. There must be an express declaration that the property is no
longer intender for public service or the development of national wealth. In the
absence of such, the property, even if classified as alienable or disposable, remains
the property of the State, and thus, may not be acquired by prescription.

In addition, the Court finds the evidence presented by the petitioners to be wanting.
Tax declarations per se do not qualify as competent evidence of actual possession
for purposes of prescription. More so, how can the petitioners claim ownership for
the entire period of prescription when taxes were paid only on 11 occasions within
the 40-year period from 1961 to 2001? This type of sporadic assertion of ownership
does not prove open, continuous, exclusive and notorious possession. A claim of

50
ownership will not prosper on the basis of tax declarations if unaccompanied by
proof of actual possession.

Finally, the petitioners application was filed only one year from the time the
property may be considered patrimonial which was when the conversion order was
issued on 13 July 2000. The 30-year prescriptive period can only start from such
date.

(9) Yu Chang v. Republic


G.R. No. 171726
23 February 2011

A forested area classified as forest land of the public domain does not lose such
classification simply because loggers or settlers may have stripped it of its forest cover.
The classification of land is descriptive of its legal nature or status and does not have
to be descriptive of what the land actually looks like. And unless there is an act of
government releasing the land from its classification such will remain as forest land.

FACTS. On 22 March 1949, petitioners father, L. Yu Chang and the Municipality of


Pili, Camarines Sur, through its then Mayor, Justo Casuncad, executed an Agreement
to Exchange Real Property. Wherein Yu Chang exchanged his 400 sq. m. lot in San
Roque for a 400 sq. m. lot in San Juan. Upon Yu Changs death the property was
inherited by his wife and 7 children.

On 1 March 1978, a Deed of Transfer and Renunciation of their rights over the
property was executed by L. Yu Chang's five children in favor of herein petitioners.

On 21 February 1997, petitioner filed a petition for registration of title over the lots.
The Republic, through the Office of the Solicitor General (OSG), filed an Opposition.
It contended that the land is not subject to appropriation, and that the petitioners
have not been in open, continuous, exclusive and notorious possession of the land.

The trial court rendered a Decision granting petitioners' application.

The Republic appealed to the Court of Appeals (CA) asserting that the land was
classified as public forest land; hence, it could not be subject to appropriation and
alienation. The CA reversed the trial courts decision.

51
ISSUE. Did the petitioners fail to comply with the requirements of the Public Land
Act?

RULING. YES. The petitioner must prove that the subject land forms part of the
disposable and alienable lands of the public domain and that they have been in
open, continuous, exclusive and notorious possession and occupation of the same
under a bona fide claim of ownership, since 12 June 1945, or earlier.

Petitioners did not adduce any evidence to the effect that the lots subject of their
application are alienable and disposable land of the public domain. Petitioners
contend that the subject properties could no longer be considered and classified as
forest land since there are structures and houses in the area. The Court held that a
forested area classified as forest land of the public domain does not lose such
classification simply because loggers or settlers may have stripped it of its forest
cover. "Forest lands" do not have to be on mountains or in out-of-the-way places.
The classification of land is descriptive of its legal nature or status and does not have
to be descriptive of what the land actually looks like. And unless there is an act of
government releasing the land from its classification such will remain as forest land.

Further the land was only alienable and disposable only on 30 October 1986. Prior
to that period, the Court held that the lot could not be the subject of confirmation of
imperfect title. Petitioners possession of the subject forest land prior to the date
when it was classified as alienable and disposable is inconsequential.

(10) Aranda v. Republic


G.R. No. 172331
24 August 2011

A person who seeks the registration of title to a piece of land on the basis of possession
by himself and his predecessors-in-interest must prove his claim by clear and
convincing evidence.

FACTS. ICTSI Warehousing, Inc. (ICTSI-WI), represented by Chairman Enrique K.


Razon was the original petitioner in this case. The company sought for the
registration of a 9,103 square meter parcel of land located in San Andres, Malvar,
Batangas; however, ICTSI-WI sought leave of court because the sale between the
vendor and applicant corporation cannot push through and consequently the tax
declaration is still in the name of vendor Ramon Aranda and the land cannot be
transferred and declared in the name of ICTSI-WI.

52
The trial court admitted the Amended Application for Registration of Title this time
filed in the name of Ramon Aranda, herein petitioner.

According to the petitioner, he acquired the land through a donation to him by his
father, Anatalio Aranda in 2000 who bought the same from Lucio Olan. However,
petitioner had been tilling the land since 1965, planting it with rice and corn. He did
not hire any tenant to work therein; neither did he introduce any improvement on
the land. As such, he had been in continuous possession of the subject land in the
concept of owner, publicly, openly and adversely for more than thirty (30) years
prior to the filing of the application. As evidence, petitioner presented the deed of
donation as well as testimonial evidence from two other witnesses.

The Regional Trial Court (RTC) granted the petition. The Court of Appeals (CA)
reversed the RTC on the ground that petitioners evidence does not satisfactorily
establish the character and duration of possession required by law, as petitioner
failed to prove specific acts showing the nature of the possession by his
predecessors-in-interest.

ISSUE. Did the trial court err in granting the petition of Aranda?

RULING. YES. The Property Registration Decree (P.D. No. 1529) provides for
original registration of land in an ordinary registration proceeding in compliance
with the following requisites: (a) that the property in question is alienable and
disposable land of the public domain; (b) that the applicants by themselves or
through their predecessors-in-interest have been in open, continuous, exclusive and
notorious possession and occupation; and (c) that such possession is under a bona
fide claim of ownership since 12 June 1945 or earlier.

Unless public land is shown to have been reclassified or alienated to a private


person by the State, it remains part of the inalienable public domain. To prove that
the land subject of an application for registration is alienable, an applicant must
establish the existence of a positive act of the government such as a presidential
proclamation or an executive order; an administrative action; and a legislative act or
a statute.

In this case, the Department of Environment and Natural Resources (DENR) in


compliance with the directive of the RTC, issued a Certification stating that the
subject property falls within the Alienable and Disposable Land certified on 26
March 1928; however, the Certification states that the same land is within the
alienable and disposable zone as certified on 22 December 1997 except for twenty

53
meters strip of land along the creek bounding on the north eastern portion which is
to be maintained as stream bank protection. Such discrepancy was not addressed by
the petitioner.

Furthermore, petitioner presented tax declarations and the deeds of confirmation of


the 1946 sale from the original owner (Lucio Olan) to Anatalio Aranda and the 1965
donation made by the latter in favor of petitioner; but as found by the CA, the
history of the land shows that it was declared for taxation purposes for the first time
only in 1981. The petitioner started paying corresponding taxes only in 1994 or just
three years before the filing of the application for original registration.

Petitioner likewise failed to prove the alleged possession of his predecessors-in-


interest. There was no evidence that Lucio Olan declared the property for tax
purposes at any time before he sold it to Anatalio Aranda. There is also no showing
that Anatalio Aranda declared the property in his name from the time he bought it
from Lucio Olan. Mere casual cultivation of the land does not amount to exclusive
and notorious possession that would give rise to ownership. Specific acts of
dominion must be clearly shown by the applicant.

(11) Republic v. Bantigue Point Development Corporation


G. R. No. 162322
14 March 2012

A CENRO certification is insufficient to prove the alienable and disposable character of


the land sought to be registered.

FACTS. Petitioner Republic of the Philippines (Republic) assails the decision of the
Court of Appeals (CA) in CA-G.R. CV No. 70349, which affirmed the decision of the
Municipal Trial Court (MTC) of San Juan, Batangas granting respondent Bantigue
Point Development Corporations (Corporation) application for original registration
of a parcel of land.

On 17 July 1997, respondent Bantigue Point Development Corporation filed with the
Regional Trial Court (RTC) of Rosario, Batangas an application for original
registration of title over a parcel of land with a total assessed value of 14,920 for
the entire property, more particularly described as Lot 8060 of Cad 453-D, San Juan
Cadastre, with an area of more or less 10,732 square meters, located at Barangay
Barualte, San Juan, Batangas. The RTC issued an order setting the case for initial
hearing on 22 October 1997 and issued second order setting for initial hearing on 4

54
November 1997. On March 31, 1998, the RTC Clerk of Court transmitted motu
proprio the records of the case to the MTC of San Juan, because the assessed value of
the property was allegedly less than 100,000. Thereafter, the MTC entered an
Order of General Default and commenced with the reception of evidence. Thereafter,
it awarded the land to respondent Corporation.

COMPLAINANT. Petitioner Republic filed its opposition to the application for


registration while the records were still with the RTC.

RESPONDENT. The respondent filed its documents among the documents


presented by respondent in support of its application are Tax Declarations, a Deed
of Absolute Sale in its favor, and a Certification from the Department of
Environment and Natural Resources (DENR) Community Environment and Natural
Resources Office (CENRO) of Batangas City that the lot in question is within the
alienable and disposable zone.

Acting on an appeal filed by the Republic, the CA further found that respondent
Corporation had sufficiently established the latters registrable title over the subject
property after having proven open, continuous, exclusive and notorious possession
and occupation of the subject land by itself and its predecessors-in-interest even
before the outbreak of World War II.

ISSUE. Is a certification from the CENRO a sufficient proof that the property in
question is alienable and disposable land of the public domain?

RULING. NO. The Regalian doctrine dictates which states that all lands of the
public domain belong to the State. The applicant for land registration has the burden
of overcoming the presumption of State ownership by establishing through
incontrovertible evidence that the land sought to be registered is alienable or
disposable based on a positive act of the government. A CENRO certification is
insufficient to prove the alienable and disposable character of the land sought to be
registered. The applicant must also show sufficient proof that the DENR Secretary
has approved the land classification and released the land in question as alienable
and disposable. Hence, the present rule is that an application for original
registration must be accompanied by: (1) a CENRO or PENRO Certification; and (2) a
copy of the original classification approved by the DENR Secretary and certified as a
true copy by the legal custodian of the official records. In the present case,
respondent Corporation only presented a CENRO certification in support of its
application. Clearly, this falls short of the requirements for original registration.

55
(12) (Joyce Y.) Lim v. Republic
G.R. No. 158630
4 September 2009

The reckoning period of the counting of 30 years of open, continuous, exclusive and
notorious possession of the land should start from the year when the land was
classified or declared alienable and disposable.

FACTS. The case is about the filing of application of tile to the Regional Trial Court
(RTC) of Tagaytay City of a certain Joyce Lim for two separate land, lot number
13687 and lot number 13686 respectively, located at Cavite.

Joyce Lim purchased these subject lands to spouses Pagkalinawan in year 1997. Lim
filed for registration of the said land to RTC Tagaytay. She claimed that the land is in
open, continuous, exclusive and notorious possession of the land way back 1967.
Counting from 1967 up to 1998, this would amount to 31 years of possession of the
land. This claim is corroborated with the several tax declarations pertaining to the
lot and a testimony given by a certain Destura.

Unfortunately for the republic, the respondent in this case, it failed to adduce any
evidence to dispute the claim of Lim, hence the RTC of Tagaytay City granted the
registration of tile to Lim to both land with two separate decisions.

These decisions prompted the Solicitor general to appeal to the Court of Appeals
(CA) contending that Lim failed to meet the thirty (30) years requirement of open,
continuous, exclusive and notorious possession of the land a per declared on the
issuance of certification by Community Environment and Natural Resources Office
(CENRO) stating that the said lands was declared alienable and disposable only in
year 1984. The certification of alienability and disposability of the land holds a
presumption that the land still belongs to the public domain. The Solicitor General
added that the testimony of the person Destura is hearsay due to the fact that he has
no personal knowledge of the real status of the land. Lim failed to dispute these
claims of the Solicitor general, hence the CA reversed and set aside the decision of
the RTC.

FIRST ISSUE. Is the land claim by Joyce Lim considered as a public property?

RULING, FIRST ISSUE. NO. The land claimed by Joyce Lim is already declared or
classified as alienable and disposable land. According to the certification of

56
alienability and disposability issued by the CENRO, the land is declared and
classified as alienable and disposable effective from year 1982.

SECOND ISSUE. When should be the reckoning period of the thirty year
requirement of the law as being open, continuous, exclusive and notorious
possession of the land in order to have the land ripen to acquisition by prescription?

RULING, SECOND ISSUE. The reckoning period of the counting of 30 years of


open, continuous, exclusive and notorious possession of the land should start from
the year when the land was classified or declared alienable and disposable and in
this case, it shall start from the year of certification of alienability and disposability
up to the year it was filed to be registered.

The Court ruled the claim may be true that they are in open, continuous, exclusive
and notorious possession of the land dated back 1967, the time 1967 which is the
alleged start of the 30 year possession of the land and 1982 which is the year of
declaration of the land being an alienable and disposable land shall not be credited
as part of the 30 year requirement because as pursuant to the certification issued by
the CENRO the land became alienable and disposable only in year 1982, even if such
a land will be occupied by a claimant, no matter how long shall never ripen into
acquisition by prescription because it of the fact the if a land is a public property as
its status and there was no showing or any declaration that the land is alienable and
disposable then such possession, no matter how long will not ripen to acquisition by
prescription. Also, the Court ruled that even if the same land was characterize to be
alienable and disposable even dated back 1945 or earlier, the Public Land Act
requires that the state must have an active or express participation in declaring that
the land is alienable and disposable and this can be inferred from a declaration, like
for instance those declarations issued by the CENRO. The absence of these elements,
a land being occupied by a private property and the government is tolerating it but
there was no showing of an active manifestation on the part of the Government to
declare it to be alienable and disposable, will give rise to the presumption that the
state still reserves its right over the property in utilizing it.

Since it is clear from the Declaration of issued by CENRO that the subject lands is
classified as alienable and disposable only from 1982, the time of possession of the
land in open, continuous, exclusive and notorious possession shall reckoned from
this year up to the year of filing of the registration of title and in this case year 1998.
Counting from year 1982 up to 1998, the period of the open, continuous, exclusive
and notorious possession should only be 16 years in total; hence, the 30 year
requirement was not met.

57
While the subject lots were declared alienable or disposable on 15 March 1982,
there is no competent evidence that they are no longer intended for public use or for
public service. The classification of the lots as alienable and disposable lands of the
public domain does not change its status as properties of the public dominion.
Petitioner cannot thus acquire title to them by prescription as yet.

(13) Heirs of Mario Malabanan v. Republic


G.R. No. 179987
29 April 2009

The classification of a property as alienable and disposable land of the public domain
does not change its status as property of the public dominion under Article 420(2) of
the Civil Code. It is insusceptible to acquisition by prescription.

FACTS. Mario Malaban filed an application for land registration covering a parcel
of land situated in Brgy. Tibig, Silang Cavite and consisting of 71,324 sq. m. He
claimed that he had purchased the property from Eduardo Velazco, and that he and
his predecessors-in-interest had been in open, notorious, and continuous adverse
and peaceful possession of the land for more than 30 years. He presented in the
court a certification issued by Community Environment and Natural Resources
Office (CENRO) which stated that the subject property was verified to be within the
alienable and disposable land. He also testified together with his witness Aristedes
Velazco that the property originally belonged to a 22 hectare owned by his great-
grandfather and later distributed to his sons.

The Regional Trial Court (RTC) granted the application of Malabanan. However, the
Republic interposed an appeal to the Court of Appeals (CA), arguing that Malabanan
had failed to prove that the property belonged to the alienable and disposable land
of the public domain, and that the RTC had erred in finding that he had been in
possession of the property in the manner and for the length of time required by law
for confirmation of imperfect title. The CA reversed the decision of the RTC and held
that since the land has been declared only as alienable and disposable by CENRO in
1982 prior possession could not be factored in counting of period of possession as
provided by Sec. 14(1) of P.D. No. 1529. Petitioners also argued that under Section
14(2) they have been in open, continuous, exclusive and notorious possession of an
alienable land of the public domain for more than 30 years converting the land into
private property.

58
ISSUE. Are the petitioners entitled to the registration of the land under Sec. 14(1)
or Sec. 14(2) of the Property Registration Decree?

RULING. NO. The Court ruled that Section 14(1) merely requires possession since
12 June 1945 and does not require that the lands should have been alienable and
disposable during the entire period of possession; the possessor is entitled to secure
judicial confirmation of his title thereto as soon as it is declared alienable and
disposable.

In this case, there is no substantive evidence to establish that Malabanan or


petitioners as his predecessors-in-interest have been in possession of the property
since 12 June 1945 or earlier. The earliest that petitioners can date back their
possession, according to their own evidence the Tax Declarations they presented in
particular to the year 1948. Thus, they cannot avail themselves of registration under
Section 14(1) of the Property Registration Decree. Neither can petitioners properly
invoke Section 14(2) as basis for registration. While the subject property was
declared as alienable or disposable in 1982, there is no competent evidence that is
no longer intended for public use service or for the development of the national
evidence, conformably with Article 422 of the Civil Code. The classification of the
subject property as alienable and disposable land of the public domain does not
change its status as property of the public dominion under Article 420(2) of the Civil
Code. Thus, it is insusceptible to acquisition by prescription.

(14) Secretary of the DENR v. Yap


G.R. No. 167707
8 October 2008

Unclassified lands are considered public forest under P.D. No. 705.

FACTS. Then President Ferdinand E. Marcos issued Presidential Proclamation


(P.P.) No. 1801 declaring Boracay Island and other islands, caves, and peninsulas
around the country as tourist zones and marine reserves, under the administration
of the Philippine Tourism Authority (PTA) on 10 November 1978. Four years later,
he approved the issuance of PTA Circular 3-82 implementing P.P. No. 1801. The first
batch of respondents assailed the proclamation citing their and their predecessors-
in-interest, their right to secure titles over their occupied lands, claiming that they
had been in open, continuous, exclusive, and notorious possession in Boracay since
time immemorial. Hence, they were diligent realty tax payers of their lands. On the

59
other hand, the petitioners belied the formers claim, stating that Boracay Island was
an unclassified land of the public domain, and, as such, is declared a public forest.

The Regional Trial Court (RTC) and Court of Appeals (CA) ruled in favor of the
respondents on the grounds that the respondents have the right to have their
occupied lands titled, and that, no declaration of the lands as part of the forest
reserve could prejudice the respondents occupation of the land since time
immemorial.

During the pendency of the first petition, then President Gloria M. Arroyo issued P.P.
No. 1064, classifying Boracay Island into 400 hectares of forest reserve, and 628.96
hectares of agricultural land. It also provided for a 15 meter buffer zone on each side
of the centerline of roads and trails, reserved for right-of-way and simultaneously,
forming part of the area for forest land protection. The other petitioner-claimants
opposed P.P. No. 1064 on the ground that it infringed their prior vested rights over
portions of the land, and they too, were in continuous possession of their lands.
Further, they claimed the redundancy of P.P. No. 1064 on the ground that since
Boracay Island was never classified into either mineral nor timber land, it is
considered as an agricultural land under the Philippine Bill of 1902 and Public Land
Act No. 926.

ISSUE. Are the lands in question alienable agricultural lands?

RULING. NO. Neither P.P. No. 1801 nor PTA Circular 3-82 converts the whole of
Boracay into an agricultural land. There is nothing in the law or the circular which
made Boracay Island an agricultural land. The reference in Circular 3-82 to private
lands and areas declared as alienable and disposable does not by itself classify the
entire island as agricultural. Notably, Circular 3-82 makes reference not only to
private lands and areas but also to public forested lands. Rule VIII, Sec. 3 provides:
No trees in forested private lands may be cut without prior authority from the PTA.
All forested areas in public lands are declared forest reserves. Clearly, the reference
in the circular to both private and public lands merely recognizes that the island can
be classified by the Executive department pursuant to its powers under C.A. No. 141.
In fact, Section 5 of the circular recognizes the then Bureau of Forest Developments
authority to declare areas in the island as alienable and disposable when it provides:
Subsistence farming, in areas declared as alienable and disposable by the Bureaus of
Forest Development. Therefore, P.P. No. 1801 cannot be deemed the positive act
needed to classify Boracay Island as alienable and disposable land. If President
Marcos intended to classify the island as alienable and disposable or forest, or both,

60
he would have identified the specific limits of each, as President Arroyo did in P.P.
No. 1064. This was not done in P.P. No. 1801.

Moreover, it is plain error for petitioners to argue that under the Philippine Bill of
1902 and Public Land Act No. 926, mere possession by private individuals of lands
creates the legal presumption that the lands are alienable and disposable. Except for
lands already covered by existing titles, Boracay was an unclassified land of the
public domain prior to P.P. No. 1064. Such unclassified lands are considered public
forest under P.D. No. 705. The DENR and the National Mapping and Resource
Information Authority certify that Boracay Island is an unclassified land of the
public domain.

(15) Heirs of Spouses Palanca v. Republic


G.R. No. 151312
30 August 2006

The possession of unclassified lands, however long, cannot convert the same into
private property.

FACTS. The heirs of Pedro S. Palanca filed an application to bring the pieces of
land they allegedly owned under the operation of the Land Registration Act (LRA).
They acquired said realties by inheritance from the late Pedro S. Palanca, who had
occupied and possessed said land openly and continuously in the concept of an
owner since 1934 or for 39 years before the filing of said application, and planted on
said lands about 1,200 coconut trees on each land, declared the same for taxation
purposes and paid the taxes thereof. Petitioners submitted the plan and technical
description of the land, a survey certificate approved by the Bureau of Lands and
also tax declarations.

On 6 December 2000, or after almost 23 years, respondent Republic of the


Philippines filed with the Court of Appeals (CA) a petition for annulment of
judgment, cancellation of the decree of registration and title and reversion. In
support of this proposition, respondent presented Land Classification Map dated 9
December 1929, showing that the subject properties were unclassified lands.

ISSUE. Is the subject property an alienable land?

RULING. NO. Unclassified lands are public forests. Public forests are inalienable
public lands. The possession of public forests on the part of the claimant, however

61
long, cannot convert the same into private property. The subject properties has
never been released for public disposition from the time that petitioners and their
predecessor-in-interest were occupying the properties in 1934 until the time that
an application for registration was filed in 1973, these properties remained as
inalienable public lands. It is true that the land classification map does not
categorically state that the islands are public forests, the fact that they were
unclassified lands leads to the same result. Petitioners have failed to present
incontrovertible proof that the lands they claimed had previously been classified as
alienable. The lands in question indeed remain part of the public domain and form
part of the national reserves.

(16) Del RosarioIgtiben v. Republic


G.R. No. 158449
22 October 2004

Section 44 of the Public Land Act, as amended by RA No. 6940, which provides for a
prescriptive period of thirty (30) years possession, applies only to applications for free
patents. For conformation of imperfect title, possession must start from 12 June 1945
or earlier.

FACTS. On 8 January 1998, petitioners filed with the trial court an application for
registration of land under Presidential Decree (P.D.) No. 1529, otherwise known as
the Property Registration Decree (PRD). The application covered a parcel of land
situated in Barangay Malabag, Silang, Cavite. Petitioners alleged that they acquired
the Subject Property by purchase, and that they, by themselves and through their
predecessors-in-interest, had been in actual, continuous, uninterrupted, open,
public, and adverse possession of the Subject Property in the concept of owner for
more than 30 years.

No opposition was filed against the application and so petitioners proceeded with
the presentation of their evidence. The State was represented in the proceedings by
Assistant Provincial Prosecutor Jose M. Velasco, Jr.

Based on the testimonial and documentary evidence presented, Teodoro Calanog


came into possession of the Subject Property in 1968. In the same year, the Subject
Property was transferred to spouses Alfredo Tonido and Agatona Calanog. After the
demise of Agatona Calanog, the rest of the Tonido family, consisting of Alfredo and
his children, Samuel, Elizabeth, Benjamin, Imelda and Esther, shared possession of

62
the Subject Property. On 21 November 1995, the Tonido family sold the Subject
Property to petitioners, as evidenced by a Deed of Absolute Sale.

The history of possession of the Subject Property was supported by tax declarations
in the name of petitioners and their predecessors-in-interest from 1958 to 1998.
The trial court rendered a decision approving petitioners application for
registration of the Subject Property.

The Republic of the Philippines, represented by the Office of the Solicitor General
(OSG), appealed the decision of the trial court to the Court of Appeals (CA). The CA
rendered a decision setting aside the decision of the trial court, and dismissing the
application for registration of petitioners.

PETITIONER. In the original application filed by petitioners before the trial court,
they claim that they are entitled to confirmation and registration of their title to the
Subject Property in accordance with Section 14 of the PRD.

RESPONDENT. The Republic alleged that the petitioner failed to prove open,
continuous, exclusive and notorious possession and occupation of the Subject
Property since 12 June 1945, or earlier, as required by Section 48(b) of
Commonwealth Act (C.A.) No. 141, otherwise known as the Public Land Act, as
amended by P.D. No. 1073. Moreover, petitioners also failed to produce muniments
of title to tack their possession to those of their predecessors-in-interest in
compliance with the prescriptive period required by law.

ISSUE. Have petitioners complied with the period of possession and occupation
required by the Public Land Act?

RULING. NO. Section 44 of the Public Land Act, as amended by R.A. No. 6940,
which provides for a prescriptive period of thirty (30) years possession, applies only
to applications for free patents. On the other hand, the judicial application for
confirmation of an imperfect or incomplete title over the Subject Property is
covered by Section 48(b) of the Public Land Act. In the case at bar, the earliest
period that the applicants could claim ownership over the property is in 1958,
which is the earliest date Justina Hintog, the previous owner/occupant, declared the
property for taxation purposes. This is far later than 12 June 1945, the date
prescribed by law that the applicants possession under claim of ownership should
have begun at the latest. Section 48(b) of the Public Land Act requires for judicial
confirmation of an imperfect or incomplete title the continuous possession of the
land since 12 June 1945, or earlier, which petitioners herein failed to comply with.

63
(17) Republic v. Naguiat
G.R. No. 134209
24 January 2006

Public forest lands or forest reserves, unless declassified and released by positive act of
the Government so that they may form part of the disposable agricultural lands of the
public domain, are not capable of private appropriation. The rules on confirmation of
imperfect title do not apply. Moreover, the onus to overturn the presumption that all
lands belongs to the State rests with the applicant.

FACTS. Celestina Naguiat filed an application for registration of title to four (4)
parcels of land located in Panan, Botolan, Zambales, with the Regional Trial Court
(RTC) of Zambales. She alleges that she is the owner of the said parcels of land
having acquired them by purchase from the LID Corporation which likewise
acquired the same from Demetria Calderon, Josefina Moraga and Fausto Monje and
their predecessors-in-interest who have been in possession thereof for more than
thirty (30) years; and that to the best of her knowledge, said lots suffer no mortgage
or encumbrance of whatever kind nor is there any person having any interest, legal
or equitable, or in possession thereof.

The Republic of the Philippines filed an opposition to the application on the ground
that neither the applicant nor her predecessors-in interest have been in open,
continuous, exclusive and notorious possession and occupation of the lands in
question since 12 June 1945 or prior thereto; that the muniments of title and tax
payment receipts of applicant do not constitute competent and sufficient evidence
of a bona-fide acquisition of the lands applied for or of his open, continuous,
exclusive and notorious possession and occupation thereof in the concept of an
owner; that the applicants claim of ownership in fee simple on the basis of Spanish
title or grant can no longer be availed of and that the parcels of land applied for are
part of the public domain belonging to the Republic of the Philippines not subject to
private appropriation.

On 15 October 1990, the lower court issued an order of general default and
proceeded with the hearing of this registration case. The Provincial Prosecutor
interposed no objection to the admission of the exhibits and the Government had no
evidence to adduce.

The trial court rendered judgment in favor of the respondent. Motion for
reconsideration having been denied, petitioner appealed to the Court of Appeals
(CA). The CA affirmed the decision of the RTC.

64
ISSUE. Did the areas in question cease to have the status of forest or other
inalienable lands of the public domain?

RULING. NO. The said areas are still classified as forest land. Petitioner has not
established that the lands in question have been declassified from forest or timber
zone to alienable and disposable property. Hence, the issue of whether or not
Naguiat and her predecessor- in- interest have been in possession thereof for more
than thirty (30) years is of little moment.

Public forest lands or forest reserves, unless declassified and released by positive
act of the Government so that they may form part of the disposable agricultural
lands of the public domain, are not capable of private appropriation. The rules on
confirmation of imperfect title do not apply.

A forested area classified as forest land does not lose such classification simply
because loggers or settlers have stripped it of its forest cover. "Forest lands" do not
have to be on mountains or in out of the way places. The classification is merely
descriptive of its legal nature or status and does not have to be descriptive of what
the land actually looks like.

Public lands not shown to have been reclassified or released as alienable


agricultural land or alienated to a private person by the State remain part of the
inalienable public domain. The prerogative of classifying or reclassifying lands of the
public domain belongs to the Executive Branch of the government and not the court.
The onus to overturn the presumption that all lands belongs to the State rests with
the applicant.

Here, respondent never presented the required certification from the proper
government agency or official proclamation reclassifying the land applied for as
alienable and disposable. Matters of land classification or reclassification cannot be
assumed. It calls for proof. Tax receipts, survey map and technical descriptions of
the lands provides no information respecting the classification of the property and
are not sufficient to overcome the presumption that the land sought to be registered
forms part of the public domain.

Unclassified land cannot be acquired by adverse occupation or possession.


Occupation thereof in the concept of owner, however long, cannot ripen into private
ownership and be registered as title. Respondents application for original
registration of title is denied.

65
(18) Director of Forestry v. Villareal
G.R. No. L-32266
27 February 1989

Mangrove swamps or manglares are comprised within the public forest of the
Philippines as defined in the Section 1820 of the Administrative Code of 1917.

FACTS. In 1949, respondent Ruperto Villareal applied for the registration of


178,113 square meters of mangrove swamps situated in Sapian, Capiz alleging that
he and his predecessors-in-interest had been in possession of the land for more than
forty (40) years. The Court of First Instance (CFI) of Capiz approved the application,
which was further affirmed by the Court of Appeals (CA).

Petitioner, the Director of Forestry, then filed a petition for review on certiorari
claiming that the subject land was forestall in nature and not subject to private
appropriation and asking for the reversal of the registration.

The respondent invoked the survey plan of the mangrove swamps approved by the
Director of Lands as a proof that the land is registrable. He also sustained his claim
of possession over the subject land by providing the tax declarations as evidence for
such.

ISSUE. What is the legal classification of mangrove swamps, commonly known as


manglares?

RULING. The Supreme Court concluded that mangrove swamps or manglares


should be understood as comprised within the public forest of the Philippines as
defined in the Section 1820 of the Administrative Code of 1917 which provides that
public forest includes, except as otherwise specifically indicated, all unreserved
public land, including nipa and mangrove swamps, and all forest reserves of
whatever character.

The classification of mangrove swamps as forest lands is descriptive of its legal


nature or status and does not have to be descriptive of what the land actually looks
like. Unless and until the land classified as forest is released in an official
proclamation to that effect so that it may form part of the disposable agricultural
lands of the public domain, the rules on confirmation of imperfect titles do not
apply.

66
Such description of mangrove swamps as pertaining to our agricultural lands should
be understood as covering only those lands over which ownership had already
vested before 1 October 1917 when the Administrative Code of 1917 became
effective. Such lands could not be retroactively legislated as forest lands for this
would prejudice a duly acquired property right protected by the due process clause.

Thus, the subject land being admittedly a part of the mangrove swamps of Sapian,
for which a minor forest license had in fact been issued by the Bureau of Forestry
from 1920 to 1950, must be considered forest land and cannot be the subject of the
adverse possession and consequent ownership claimed by the respondent in
support of his application for registration.

The mere existence of a survey plan would not have the effect of converting the
mangrove swamps, which are forest lands, into agricultural land. And the approval
by the Director of Lands is ineffectual, since it is clearly officious, because his office
was not authorized to act in the premises. It is the Director of Forestry who has the
authority to determine whether forest land is more valuable for agricultural rather
than forestry uses, as a basis for its declaration as agricultural land and release for
private ownership.

Tax declarations are not sufficient to prove possession and much less vest
ownership over a property as the Higher Court has held in several cases. Hence, the
application shall be denied.

(19) Gordula v. Court of Appeals


G.R. No. 127296
22 January 1998

(1) The defense of indefeasibility of title does not lie against the State; (2) Errors by the
government or its agencies do not have the effect of converting forest reserves into
public alienable lands.

FACTS. In 1969, President Ferdinand Marcos issued Proclamation No. 573


withdrawing from sale and settlement and setting aside as permanent forest
reserve, subject to private rights, Caliraya-Lumot River Forest Reserve (Parcel No.
9) and 11 other forest reserves. All of these reserves are located in Talaongan,
Cavinti, Laguna with a total area of 29,707 square meters. These are used primarily
as watershed areas. The northern area is bounded by the National Power
Corporation (NAPOCOR).

67
Three years later, Edubigis Gordula, a petitioner, filed an application for free patent
over a portion of the forest land located in Parcel No. 9. The Bureau of Lands
referred the application to NAPOCOR. Through a letter by its then General Manager
Ravanal Ravanzano, NAPOCOR did not oppose the application. As a result, Gordula
was issued an Original Certificate of Title (OCT). Subsequently, through a series of
sales, the land subject of the OCT was subdivided into nine lots. Four of these lots
ended up with the Development Bank of the Philippines, another four with Nora
Estrellado, and one with J.F. Festejo Co., Inc all petitioners in this case.

Meanwhile, the Republic surveyed Gordulas property and it was determined that
his property is in the saddle of the watershed. When President Corazon Aquino
came to power, she designated NAPOCOR as having jurisdiction, control and
regulation over Caliraya-Lumot watershed. When roads and fences were being
constructed over the subject land by one of the petitioners, NAPOCOR, under new
management, apprehended them and banned the construction for being in the
saddle of the watershed.

A complaint for Annulment of Free Patent and Cancellation of Titles was then filed
by the Republic to cancel the title issued to Gordula and the subsequent issuances.
In his defense, Gordula said that he occupied and cultivated the said property for 25
years before he applied for a free patent thus subjecting the forest reserve to
private rights as contemplated under Proclamation No. 573. He said further that
his right has been recognized by the NAPOCOR through the letter of Ravanzano.

ISSUE. Did Gordula acquire private rights over the forest reserve before the
issuance of Proclamation No. 573?

RULING. NO. In order to acquire private rights as contemplated under the


Proclamation, it must still comply with the provisions of the Public Land Act on
adverse possession.

Forest lands, being an all-important natural resource, needed to be reserved and


saved to promote the peoples welfare. By their very nature or through a legislative
fiat, they are outside the commerce of man, regardless of their actual state they are
incapable of private possession.

To fall within the meaning of private rights, it must still comply with the
requirements of the Public Land Act before the issuance of the Proclamation, i.e.,
Gordula must have been in open, continuous, exclusive and notorious possession for
at least 30 years. Gordula fell short of the required years so that the forest land

68
could have been subjected to private rights. When the said Proclamation was issued,
the forest land became unalienable. Thus, no matter how long Gordula has already
occupied the property from that point, he cannot claim ownership over the said
property for the Statute of Limitations and the defense of indefeasibility does not lie
against the State.

Finally, the letter issued by Ravanzana does not have the effect of converting the
forest reserves into public alienable lands. This error does not grant Gordula any
right over the property. To convert the said forest reserve, it takes no less than the
Philippine President to declassify the said lands from the public domain.

(20) Spouses De Ocampo v. Arlos


G.R. No. 135527
19 October 2000

The thirty-year prescriptive period will only start to count once a public land has been
declared alienable and disposable.

FACTS. On 14 April 1977, Federico S. Arlos and Teofilo D. Ojerio, respondents,


filed an application for land registration, wherein they seek judicial confirmation of
their titles to three parcels of land all located at Cabcaben, Mariveles, Bataan.

Spouses Geminiano de Ocampo and Amparo De Ocampo and spouses Pedro Santos
and Crisanta Santos, petitioners, opposed the application for registration, alleging
that they are the co-owners of 2 lots, situated at Cabcaben, Mariveles, Bataan, and
their ownership is evidenced by a Transfer Certificate of Title (TCT) of each lot, and
that they became owners of said lots by purchase from the government through
sales patents.

Respondents claim that they purchased the subject lots in 1967 from Bernardo and
Arsenio Obdin, who in turn had been in possession of the property since 1947.
Hence, when the former filed their application for registration in 1977, they and
their predecessors-in-interest had been occupying and cultivating, in the concept of
owners, the said parcels of land for at least 30 years, as required by the Public Land
Act.

The Republic of the Philippines also opposed the application, contending that
neither the applicants nor their predecessors-in-interests have been in open,
continuous, exclusive and notorious possession and occupation of the lands in

69
question for at least 30 years immediately preceding the filing of the application;
and that the parcels of land applied for are portions of the public domain belonging
to the Republic of the Philippines not subject to private appropriation.

The trial court concluded that respondents and their predecessors-in-interest were
in actual possession of the subject lands in 1947 and continuously up to the present.
In contrast, the checkered testimonies of petitioners reveal that they have never
been in possession of the lands. And because of the absence of the actual occupancy
on their part, the sales patents and titles issued in their favor are null and void citing
therein the ruling in Republic v. Mina that the alleged misrepresentation of the
applicant that he had been occupying and cultivating the land are sufficient grounds
to nullify the patent and title under Section 9 of the Public Land Laws.

The Court of Appeals (CA) affirmed the trial court and it ruled that petitioners had
failed to comply with the Public Land Act, which required sales patent applicants to
be the actual occupants and cultivators of the land. It held that the testimonies of
petitioners, which were "incongruous with reality," bolstered the "finding that they
had never occupied, cultivated or made improvements on the property." Hence, this
Petition.

ISSUE. Is the respondents application for land registration under the Public Land
Act proper?

RULING. NO. A title may be judicially confirmed under Section 48 of the Public
Land Act only if it pertains to alienable lands of the public domain. Unless such
assets are reclassified and considered disposable and alienable, occupation thereof
in the concept of owner, no matter how long cannot ripen into ownership and be
registered as a title. Verily, Presidential Decree No. 1073 clarified Section 48 (b) of
the Public Land Act by specifically declaring that the latter applied only to alienable
and disposable lands of the public domain.

In the present case, the disputed land which was formerly a part of a U.S. military
reservation that had been turned over to the Philippine government in 1965, was
declared disposable and alienable only in 1971.

Respondents and their predecessors-in-interest could not have occupied the subject
property from 1947 until 1971 when the land was declared alienable and
disposable, because it was a military reservation at the time. Hence, it was not
subject to occupation, entry or settlement. This is clear from Sections 83 and 88 of
the Public Land Act.

70
The Court reiterated that the land was declared alienable only in 1971; hence,
respondents have not satisfied the thirty-year requirement under the Public Land
Act. Moreover, they could not have occupied the property for thirty years, because it
formed part of a military reservation. Clearly then, their application for the
registration of their titles was erroneously granted by the appellate and the trial
courts.

(21) Zarate v. Director of Lands


G.R. No. L-13334
18 March 1919

There can be no imperfect title to be confirmed over lands not yet classified as
disposable or alienable.

FACTS. Francisco Zarate (applicant) filed for registration of land on 27 December


1976 to have his three parcels of land brought under the operation of the Land
Registration Act. The subject parcels of land contain a land area of 68.2787 hectares
and 10.5135 hectares, located at Dumatiad, Tangalan, Aklan, and of 3.8500 hectares,
located at Afga, Tangalan, Aklan. The said parcels have been subdivided into six (6)
lots.

Appellant claims that the first two parcels of land which formed only one parcel of
land consisting of about 78.7922 hectares originally belonged to the spouses
Solomon Tirol and Venancia Hontiveros. When they died in 1905 and 1913,
respectively, the said parcels of land were inherited by their children Gregorio,
Ignacio, Lamberto, Eleanor and Carmen, all surnamed Tirol.

On 26 May 1923, they donated said parcel to Josefino Tirol, son of Gregorio, and
Angeles Arcenas in consideration of their marriage (Exh. Z). Said land was later
subdivided into two, one with an area of 68.2787 hectares and the other 10.5135
hectares which was later sold to herein appellant on 7 January 1976 (Exh. HH). The
third parcel (with an area of 3.8500 hectares) was inherited by Gregorio Tirol,
father of Josefino, from his ancestors. When Gregorio died, Josefino inherited the
same. He later sold the said land to herein appellant on 11 March 1976.

PETITIONER. Applicant claims that he and his predecessors-in-interest have been


in peaceful possession and usufruct of the property for over eighty (80) years,
religiously paying the taxes thereon. Nobody disturbed their possession and
usufruct for more than fifty (50) years, until oppositors Maximo Villanueva, Jose

71
Corpuz, Dominador Tagbalay, Marcelinito Honorio, Lolito Talaga, Felipe Villanueva
and Jose Molo, entered and occupied portions of the land sometime in 1970.

RESPONDENT. Oppositors Preciosa Tirol Davila, on the other hand, contends that
Lot 1, Plan Psu-06-000253 with an area of 530,310 sq. meters situated in Tangalan,
Aklan, owned by her, was previously the property of Ignacio Tirol, her father. When
Ignacio died, the said lot was entrusted to Josefino Tirol, who was his lawyer and
first cousin. She did not have any tax declarations because Josefino assured her that
he would be responsible for them. Preciosa denied that the said property was
donated by his father to Josefino and that the signature appearing on the deed of
donation was forged.

Oppositor Development Bank of the Philippines gave another version. It claims that
the questioned lots are owned by spouses Valeriano Molo and Lutgarda Molo. The
said parcel which consists of about 190,922 square meters located at Afga,
Tangalan, Aklan, was mortgaged to the bank. When the couple failed to pay their
indebtedness, the mortgage was foreclosed and the land became the property of the
bank in whose name the land is now declared for taxation purposes.

Oppositors Regalado, Patria, Renato, Rosalinda, Ryl and Probo, all surnamed
Toriaga, likewise, contend that the land claimed by them which is about 4 hectares
in area and situated in Afga, Tangalan, Aklan, originally belonged to Eulalio Tanasa,
who possessed it before 1949. When he died, the land was inherited by his daughter
Prima who was married to Probio (sic) Toriaga. Prima continuously resided on the
land until her death in 1977. The land passed to her son, Regalado Toriaga, Sr.,
husband of oppositor Patria and father of the other oppositors. The said land is
declared in the name of the Toriagas.

All the oppositors claim that the land applied for by appellant was unoccupied and
covered with wild trees and cogon. They cleared the land, built their houses and
planted mangoes, casoy, jackfruit, bananas, camote, and cassava. Neither Josefino
Tirol nor Francisco Zarate possessed the land nor enjoyed the products thereof.

Oppositor Republic of the Philippines, for its part, claims that the subject land was
timberland or unclassified forest. In 1970, at the time of oppositors occupation, the
lands were covered with wild trees and thickets and was (sic) released as alienable
and disposable under Land Classification Map No. 2779, Project 10-A only on 16
April 1973.

72
ISSUE. Is the applicant entitled to registration (premised on acquisitive
prescription) over a forest land?

RULING. NO. There can be no imperfect title to be confirmed over lands not yet
classified as disposable or alienable. In the absence of such classification, the land
remains unclassified public land until released therefrom and open to disposition.
Indeed, it has been held that the rules on [the] confirmation of imperfect title do not
apply unless and until the land classified as forest land is released in an official
proclamation to that effect so that it may form part of the disposable agricultural
lands of the public domain.

In the present case, the lands applied for title were released as alienable and
disposable only on April 16, 1973 (Exhs. 5-RP and 6-RP) as per Project No. 10-A,
Land Classification Map No. 2779. The application for registration was filed on
December 27, 1976. Since the applicant, and likewise, the private oppositors,
possessed the land from the time of release on April 16, 1973, for only three (3)
years and eight (8) months prior to the filing of the application, the thirty (30) year
possession required by law was not complied with.

The Court, therefore, holds that the applicant, as well as the private oppositors,
failed to prove by sufficient evidence that they have complied with the requisites
provided by law to warrant registration of title to the three (3) parcels of land.

(22) Republic v. Court of Appeals (Azarraga and Yu)


G.R. No. 126316
25 June 2004

Foreshore lands are part of the alienable land of the public domain and may be
disposed of only by lease and not otherwise.

FACTS. On 22 June 1994, Angel T. Yu filed a petition for registration of a parcel of


land, designated as Lot 524, Cad. 633-D, Estancia Cadastre, with an area of 1,194
square meters, more or less, situated at the Poblacion, Zone 1, Municipality of
Estancia, Province of Iloilo. The Regional Trial Court (RTC) received a certification
from the Land Management Bureau, Department of Environment and Natural
Resources (DENR), Manila stating that the office has no record of any kind of public
land application/land patent covering the parcel of land situated in Estancia, Iloilo,
identified as Lot No. 524.

73
The RTC issued judgment confirming the title of Angel T. Yu over the said parcel of
land. No motion for reconsideration was filed by the City Prosecutor on behalf of the
Solicitor General. Hence, the said decision became final and executory.

Subsequently, Office of the Solicitor General (OSG) received a copy of the


supplementary report and findings of Land Management Officer Myra B. Rosal dated
12 April 1995 which was submitted to the trial court stating that the said parcel of
land is covered by a Foreshore Lease Application applied for by Angel Tilos Yu on 1
July 1977, with the then Bureau of Lands. Moreover, out of the total area of 1,194
square meters, only around 850 square meters is dry land and that an area of 334
square meters which used to be covered and uncovered by water during high tide is
now a reclaimed area.

The Court of Appeals (CA) dismissed the petition for annulment of judgment since
the RTC decision had already become final and executory; the technical description
could no longer be modified to include the increased area as prayed for by the
private respondent.

ISSUE. Is Lot 524 a foreshore land which is part of the public domain?

RULING. YES, Lot 524 is a foreshore land. Foreshore land is that strip of land that
lies between the high and low water marks and is alternatively wet and dry
according to the flow of tide. It is that part of the land adjacent to the sea, which is
alternately covered and left dry by the ordinary flow of tides. It is part of the
alienable land of the public domain and may be disposed of only by lease and not
otherwise. Foreshore land remains part of the public domain and is outside the
commerce of man. It is not capable of private appropriation.

Angel T. Yu had, in fact, filed a foreshore lease application in 1977 and paid the
corresponding fees thereon. There is, therefore, doubt to the respondents claim that
he had been in actual, open, notorious, continuous possession, in the concept of an
owner.

(23) Republic v. Candy Maker, Inc.


G.R. No. 163766
22 June 2006

A mere casual cultivation of portions of the land by the claimant does not constitute
sufficient basis for a claim of ownership, such possession is not exclusive and notorious

74
as to give rise to presumptive grant from the state.

FACTS. On 29 April 1999, Antonia, Eladia, and Felisa, all surnamed Cruz, executed
a Deed of Absolute Sale in favor of Candy Maker, Inc. for a parcel of land located
below the reglementary lake elevation of 12.50 meters, about 900 meters away the
Laguna de Bay. Candy Maker, Inc. as applicant filed an application with the
Municipal Trial Court (MTC) of Taytay, Rizal for registration of its alleged title over
the lot. The Community Environment and Natural Resources Office (CENRO) of
Antipolo City declared the land to fall within the alienable and disposable zone. On
the other hand, the Land Registration Authority recommended the exclusion of lot
no. 3138-B on the ground that it is a legal easement and intended for public use,
hence, inalienable and indisposable. On July 2001, the Republic of the Philippines,
the Laguna Lake Development Authority (LLDA) filed its opposition which alleged
that the lot subject of the application for registration may not be alienated and
disposed since it is considered part of the Laguna Lake Bed, a public land within, its
jurisdiction.

ISSUE. Is the property subject of the amended application alienable and


disposable property of the State? If so, did respondent adduce the requisite
quantum of evidence to prove its ownership over the property?

RULING. The property subject of this application was alienable and disposable
public agricultural land. However, respondent failed to prove that it possesses
registrable title over the property. The statute of limitations with regard to public
agricultural lands does not operate against the statute unless the occupant proves
possession and occupation of the same after a claim of ownership for the required
number of years to constitute a grant from the State. A mere casual cultivation of
portions of the land by the claimant does not constitute sufficient basis for a claim of
ownership, such possession is not exclusive and notorious as to give rise to
presumptive grant from the state.

(24) Usero v. Court of Appeals


G.R. No. 152115
26 January 2005

A creek is a recess or an arm of a river. It is property belonging to the public domain


which is not susceptible to private ownership. Being public water, a creek cannot be
registered under the Torrens System in the name of any individual.

75
FACTS. Petitioners Lutgarda R. Samela and Nimfa Usero are the owners of Lot Nos.
1 and 2. Private respondent spouses Polinar are the registered owners of a parcel of
land at No. 18 behind the lots of petitioners Samela and Usero.

Situated between the lots of the parties is a low-level strip of land, with a stagnant
body of water filled with floating water lilies; abutting and perpendicular to the lot
of petitioner Samela, the lot of the Polinars. Apparently, every time a storm or heavy
rains occur, the water in said strip of land rises and the strong current passing
through it causes considerable damage to the house of respondent Polinars. Later,
private respondent spouses erected a concrete wall on the bank of the low-level
strip of land about three meters from their house and rip-rapped the soil on that
portion of the strip of land.

Claiming ownership of the subject strip of land, petitioners Samela and Usero
demanded that the spouses Apolinar stop their construction but the spouses paid no
heed, believing the strip to be part of a creek. Nevertheless, for the sake of peace, the
Polinars offered to pay for the land being claimed by petitioners Samela and Usero.
However, the parties failed to settle their differences.

Petitioners filed separate complaints for forcible entry against the Polinars and the
trial court rendered a decision in favor of petitioners Samela and Usero.

According to a geodetic engineers survey, he found out that there is no existing


creek on the boundary of the said lot.

The Regional Trial Court (RTC) reversed the decision of the trial court and
confirmed the existence of the creek between the lots of the petitioners and private
respondents.

ISSUE. Is the disputed strip of land the property of petitioners Samela and Usero?

RULING. NO. A careful scrutiny of the records reveals that the assailed decisions
are founded on sufficient evidence. That the subject strip of land is a creek is
evidenced by: (1) a barangay certification that a creek exists in the disputed strip of
land; (2) a certification from the Second Manila Engineering District, NCR-DPWH,
that the subject strip of land is located is bounded by a tributary of Talon Creek and
(3) photographs showing the abundance of water lilies in the subject strip of land.
The fact that water lilies thrive in that strip of land can only mean that there is a
permanent stream of water or creek there.

76
In contrast, petitioners failed to present proof sufficient to support their claim.
Petitioners presented the Transfer Certificate of Titles (TCTs) of their respective lots
to prove that there is no creek between their properties and that of the Polinars.
However, an examination of said TCTs reveals that the descriptions thereon are
incomplete. Moreover the tax declaration presented by petitioner is devoid of any
entry on the location of the creek. All the pieces of evidence taken together, the
Court can only conclude that the adjoining portion of these boundaries is in fact a
creek and belongs to no one but the state.

ART. 420. The following things are property of public dominion:

(1) Those intended for public use, such as roads, canals, rivers, torrents,
ports and bridges constructed by the State, banks, shores, roadsteads, and
others of similar character; x x x

The phrase others of similar character includes a creek which is a recess or an arm
of a river. It is property belonging to the public domain which is not susceptible to
private ownership. Being public water, a creek cannot be registered under the
Torrens System in the name of any individual.

Accordingly, the Polinar spouses may utilize the rip-rapped portion of the creek to
prevent the erosion of their property. The consolidated petitions are denied.

(25) Menchavez v. Teves Jr.


G.R. No. 153201
26 January 2005

FACTS. On 28 February 1986, a Contract of Lease was executed by the petitioners


as lessors and the respondent as lessee. The petitioners leased a fishpond covered
by Fishpond Application No. VI-1076 of Juan Menchavez, Sr.

On 2 June 1988, Cebu Regional Trial Court (RTC) Sheriffs Gumersindo Gimenez and
Arturo Cabigon demolished the fishpond dikes constructed by respondent and
delivered possession of the subject property to other parties. As a result, he filed a
Complaint for damages with application for preliminary attachment against
petitioners. The respondent alleged that the Petitioners had violated their Contract
of Lease, specifically the peaceful and adequate enjoyment of the property for the
entire duration of the Contract. He further asserted that the Petitioners had
withheld from him the findings of the trial court in Civil Case No. 510-T involving

77
the same property, subject of the lease, the Menchavez spouses were ordered to
remove the dikes illegally constructed and to pay damages and attorneys fees.

RESPONDENT. The respondent claims that petitioners mislead him into executing
the contract. The respondent claims that he relied on their assertions regarding
their ownership of the property.

REGIONAL TRIAL COURT. The court looked into the present law on the matter of
fishponds. And this is P.D. No. 704 which provides in Section 24:

Lease of fishponds-Public lands available for fishpond development


including those earmarked for family-size fishponds and not yet leased prior
to November 9, 1972 shall be leased only to qualified persons, associations,
cooperatives or corporations, subject to the following conditions:

1. The lease shall be for a period of twenty five years (25), renewable for
another twenty five years;

2. Fifty percent of the area leased shall be developed and be producing in


commercial scale within three years and the remaining portion shall be
developed and be producing in commercial scale within five years; both
periods begin from the execution of the lease contract;

3. All areas not fully developed within five years from the date of the
execution of the lease contract shall automatically revert to the public
domain for disposition of the bureau; provided that a lessee who failed to
develop the area or any portion thereof shall not be permitted to reapply for
said area or any portion thereof or any public land under this decree; and/or
any portion thereof or any public land under this decree;

4. No portion of the leased area shall be subleased.

As a consequence of these provisions, and the declared public policy of the State
under the Regalian Doctrine, the lease contract between Florentino Teves, Jr. and
Juan Menchavez Sr. and his family is a patent nullity. Being a patent nullity,
[petitioners] could not give any rights to Florentino Teves, Jr. under the principle
nemo dat quod non habet (one cannot give what he does not have), considering that
this property in litigation belongs to the State and not to petitioners. Therefore, the
first issue is resolved in the negative, as the court declares the contract of lease as
invalid and void ab-initio.

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On the issue of whether [respondent] and [petitioners] are guilty of mutual fraud,
the court rules that the [respondent] and [petitioners] are in pari-delicto. As a
consequence of this, the court must leave them where they are found.

CA Ruling: The CA disagreed with the RTCs finding that petitioners and respondent
were in pari delicto. It contended that while there was negligence on the part of
respondent for failing to verify the ownership of the subject property, there was no
evidence that he had knowledge of petitioners lack of ownership. It held as follows:

x x x. Contrary to the findings of the lower court, it was not duly proven and
established that Teves had actual knowledge of the fact that [petitioners]
merely usurped the property they leased to him. What Teves admitted was
that he did not ask for any additional document other than those shown to
him, one of which was the fishpond application. In fact, [Teves] consistently
claimed that he did not bother to ask the latter for their title to the property
because he relied on their representation that they are the lawful owners of
the fishpond they are holding for lease.

ISSUE. Were the parties in Pari Delicto?

RULING. Yes. The evidence presented by the respondent demonstrates the


contradictory claims of petitioners regarding their alleged ownership of the
fishpond. This circumstance should have been sufficient to place him on notice. It
should have compelled him to determine their right over the fishpond, including the
right to lease it.

The parties do not dispute the finding of the trial and the appellate courts that the
Contract of Lease was void.

Being merely applicants for the lease of the fishponds, petitioners had no
transferable right over them. And even of the State were to grant their application,
the law expressly disallowed sublease of the fishponds to respondent. Void are all
contracts in which the cause, object or purpose is contrary to law, public order or
public policy.

The CA erred in finding that petitioners had failed to prove actual knowledge of
respondent of the ownership status of the property that had been leased to him. On
the contrary, as the party alleging the fact, it was he who had the burden of proving
through a preponderance of evidence -- that they misled him regarding the
ownership of the fishpond. His evidence fails to support this contention. Instead, it

79
reveals his fault in entering into a void Contract. As both parties are equally at fault,
neither may recover against the other.

(26) Republic v. (Socorro R.) Jacob


G.R. No. 146874
20 July 2006

Actual possession of a land consists in the manifestation of acts of dominion of such a


nature as a party would naturally exercise over her own property. A mere casual
cultivation of portions of land by the claimant does not constitute sufficient basis for a
claim of ownership.

FACTS. On 14 August 1970, then President Ferdinand E. Marcos issued


Proclamation No. 739, "Establishing as Reservation for the Purpose of the
Exploration, Development, Exploitation and Utilization of Geothermal Energy,
Natural Gas and Methane Gas a Parcel of Land in the Province of Albay, Island of
Luzon, Philippines."

Nevertheless, respondent filed an application with the Regional Trial Court (RTC) of
Albay for the confirmation and registration of her alleged title over Lot No. 4094.

The Office of the Solicitor General opposed.

Private respondent adduced pieces of evidence and factual allegations to support


her application before the RTC. She started by tracing cloth plan of the property
under the name of Sotero Bondal but when cross-examines, she admitted that she
had no copy of the deed of sale executed by Sotero Bondal in favor of Macario
Monjardin.

PETITIONER. Private respondent failed to prove her claim that the original owner
of the property, Sotero Bondal, sold the property to her uncle Macario Monjardin. It
was likewise pointed out that private respondent admitted that she had no copy of
any such deed of sale. The fact that the property was declared under the name of
Sotero Bondal in 1991 (as shown by the tracing cloth plan approved by the Land
Registration Authority on 27 February 1991) negates private respondent's claim
that the property was sold to Monjardin. Even assuming the existence of such sale,
the OSG claimed that private respondent still failed to prove that her predecessors-
in-interest had exclusive, open and adverse occupation under a bona fide claim of

80
ownership over the property since 12 June 1945 or earlier, up to 14 August 1970
when the property was declared as a reservation under Proclamation No. 739.

ISSUE. Did the respondent acquire a vested right over the subject parcel of land
even before the effectivity of Proclamation No. 739 of 14 August 1970?

RULING. NO. Under the Property Registration Decree, Applicants for confirmation
of imperfect title must, therefore, prove the following: (a) that the land forms part of
the disposable and alienable agricultural lands of the public domain; and (b) that
they have been in open, continuous, exclusive, and notorious possession and
occupation of the same under a bona fide claim of ownership either since time
immemorial or since 12 June 1945.

Under the Regalian doctrine, all lands not otherwise appearing to be clearly within
private ownership are presumed to belong to the State. Property of the public
domain is beyond the commerce of man and not susceptible of private
appropriation and acquisitive prescription. Occupation thereof in the concept of
owner no matter how long cannot ripen into ownership and be registered as a title.
No public land can be acquired by private persons without any grant from the
government, whether express or implied.

In the case at bar, when private respondent filed her application with the RTC on 6
May 1994, Lot No. 4094 was no longer alienable and disposable property of the
public domain, since as of August 14, 1970, by virtue of Proclamation No. 739, it was
segregated from the public domain and declared part of the reservation for the
development of geothermal energy. Private respondent filed her application for
confirmation 24 years after the said proclamation was issued; thus, the period of her
possession and occupancy after such proclamation can no longer be tacked in favor
of the claimant.

The court also mentioned possession and occupation. Possession is broader than
occupation because it includes constructive possession. Taken together with the
words "continuous," "exclusive" and "notorious," the word "occupation" seems to
highlight the facts that for an applicant to qualify, her possession of the property
must not be a mere fiction.

Actual possession of a land consists in the manifestation of acts of dominion of such


a nature as a party would naturally exercise over her own property. A mere casual
cultivation of portions of land by the claimant does not constitute sufficient basis for
a claim of ownership. Such possession is not exclusive and notorious as it gives rise

81
to a presumptive grant from the State. The applicant is burdened to offer proof of
specific acts of ownership to substantiate the claim over the land. The good faith of
the person consists in the reasonable belief that the person from whom she received
the property was the owner thereof and could transfer ownership.

Private respondent promised to submit proof based on the records in the Register of
Deeds and other government agencies showing that Sotero Bondal sold the property
to Macario Monjardin; and that such records had been destroyed during the Second
World War. However, she failed to do so.

There is thus no evidence that the parents of private respondent ever had open,
continuous, adverse and actual possession of Lot No. 4094.

(27) Chavez v. Public Estates Authority


G.R. No. 133250
11 November 2003

FACTS. The Public Estates Authority (PEA) was created under P.D. No. 1084,
tasked with developing and leasing of reclaimed lands. These lands were
transferred to the care of PEA under P.D. No. 1085 as part of the Manila Cavite Road
and Reclamation Project (MCRRP).

In 1988, Special Patent No. 3517 was issued transferring lands to PEA. It was
followed by the transfer of three Titles to PEA covering the three reclaimed islands
known as the Freedom Islands. Thereafter, PEA entered into a joint venture
agreement (JVA) with AMARI, a private corporation, to develop the Freedom
Islands, without public bidding. Along with another 250 hectares, PEA and AMARI
entered the JVA which would later transfer said lands to AMARI.

Petitioner Frank J. Chavez filed case as a taxpayer praying for mandamus, a writ of
preliminary injunction and a TRO against the sale of reclaimed lands by PEA to
AMARI and from implementing the JVA.

Following these events, PEA and AMARI entered into an Amended JVA.

FIRST SUPREME COURT DECISION. The Courts decision of 9 July 2002 on the
instant case concluded that clearly, the Amended JVA violated Sections 2 and 3,
Article XII of the 1987 Constitution. Under Article 1409 of the Civil Code, contracts

82
whose object or purpose is contrary to law, or whose object is outside the commerce
of men, are inexistent and void from the beginning.

ISSUE. Are the lands, subject of the Amended JVA, part of the property of public
dominion?

RULING. YES. Submerged lands, like the waters (sea or bay) above them, are part
of the States inalienable natural resources. Submerged lands are property of public
dominion, absolutely inalienable and outside the commerce of man. This is also true
with respect to foreshore lands. Any sale of submerged or foreshore lands is void
being contrary to the Constitution.

The bulk of the lands subject of the Amended JVA are still submerged lands even to
this very day, and therefore inalienable and outside the commerce of man. Of the
750 hectares subject of the Amended JVA, 592.15 hectares or 78% of the total area
are still submerged, permanently under the waters of Manila Bay. Under the
Amended JVA, the PEA conveyed to Amari the submerged lands even before their
actual reclamation, although the documentation of the deed of transfer and issuance
of the certificates of title would be made only after actual reclamation.

Citing the Ponce Cases, the City of Cebu retained ownership of the reclaimed
foreshore lands and Essel, Inc. only had an irrevocable option to purchase portions
of the foreshore lands once actually reclaimed. In sharp contrast, in the instant case
ownership of the reclamation area, including the submerged lands, was immediately
transferred to the joint venture. Amari immediately acquired the absolute right to
own 70% percent of the reclamation area, with the deeds of transfer to be
documented and the certificates of title to be issued upon actual reclamation.
Amaris right to own the submerged lands is immediately effective upon the
approval of the Amended JVA and not merely an option to be exercised in the future
if and when the reclamation is actually realized. The submerged lands, being
inalienable and outside the commerce of man, could not be the subject of the
commercial transactions specified in the Amended JVA.

Public Estates Authority and Amari Coastal Bay Development Corporation are
denied.

(28) Arbias v. Republic


G.R. No. 173808
17 September 2008

83
The burden of proof in overcoming the presumption of State ownership of lands of the
public domain is on the person applying for registration.

FACTS. On 12 March 1993, Lourdes T. Jardeleza executed a Deed of Absolute Sale


selling to petitioner a parcel of unregistered land situated at Poblacion, Estancia,
Iloilo, and identified as Cadastral Lot No. 287 of the Estancia Cadastre (subject
property), for the sum of 33,000. According to the Deed, the subject property was
residential and consisted of 600 square meters, more or less. Three years thereafter,
on 17 June 1996, petitioner filed with the Regional Trial Court (RTC) a verified
Application for Registration of Title over the subject property, docketed as LRC Case
No. N-1025. She attached to her application the Tracing Cloth with Blue Print copies,
the Deed of Absolute Sale involving the subject property, the Surveyors
Certification, the Technical Description of the land, and Declaration of Real Property
in the name of petitioner and her spouse. She claims that she and her predecessors
in interest have been in continuous possession of the land for more than 30 years.

On 3 September 1996, the RTC transmitted the application with all the attached
documents and evidences to the Land Registration Authority (LRA), pursuant to the
latters function as the central repository of records relative to original registration
of lands. On 13 April 1998, the LRA submitted its report to the RTC that petitioner
had already complied with all the requirements precedent to the publication.
Subsequently, the RTC ordered that its initial hearing of LRC Case No. N-1025 be
held on 17 February 1999.

On 6 January 1999, the respondent Republic of the Philippines, through the Office of
the Solicitor General (OSG), filed its Notice of Appearance and deputized the City
Prosecutor of Iloilo City to appear on its behalf before the RTC in LRC Case No. N-
1025. Thereafter, the respondent filed an Opposition to petitioners application for
registration of the subject property. At the hearing on 23 July 1999 before the RTC,
petitioner took the witness stand where she identified documentary exhibits and
testified as to her purchase of the subject property, as well as her acts of ownership
and possession over the same. The owners of the lots adjoining the subject property
who attended the hearing were Hector Tiples, who opposed the supposed area of
the subject property; and Pablo Garin, who declared that he had no objection
thereto. On 26 June 2000, the RTC ruled and granted petitioners application for
registration.

Respondent, through the OSG, filed with the RTC a Notice of Appeal of the above
Decision. In its Brief before the Court of Appeals (CA), respondent questioned the
granting by the RTC of the application, notwithstanding the alleged non-approval of

84
the survey plan by the Director of the Land Management Bureau (LMB); the
defective publication of the notice of initial hearing; and the failure of petitioner to
prove the continuous, open, exclusive and notorious possession by their
predecessor-in-interest. On 2 September 2005, the CA rendered the assailed
Decision setting aside the decision of the RTC and dismissing the application for
original registration of the title.

ISSUE. Did the land in question cease to become public land?

RULING. NO. Under the Regalian doctrine, all lands of the public domain belong to
the State, and the State is the source of any asserted right to ownership of land and
charged with the conservation of such patrimony. This same doctrine also states
that all lands not otherwise appearing to be clearly within private ownership are
presumed to belong to the State. Hence, the burden of proof in overcoming the
presumption of State ownership of lands of the public domain is on the person
applying for registration. The applicant must show that the land subject of the
application is alienable or disposable.

In the case at bar, petitioner miserably failed to discharge the burden of proof
imposed on her by the law. The Deed of Sale merely stated that the vendor of the
subject property, Jardeleza, was the true and lawful owner of the subject property,
and that she sold the same to petitioner on 12 March 1993. The Deed did not state
the duration of time during which the vendor (or her predecessors-in-interest)
possessed the subject property in the concept of an owner. As correctly found by the
CA, petitioner cannot thereby rely on her assertions to prove her claim of possession
in the concept of an owner for the period required by law. Petitioner herself
admitted that she only possessed the property for six years. The bare claim of
petitioner that the land applied for had been in the possession of her predecessor-
in-interest, Jardeleza, for 30 years, does not constitute the "well-nigh inconvertible"
and "conclusive" evidence required in land registration, neither does the evidence
on record establish to our satisfaction that the subject property has been classified
as alienable and disposable. To prove this requirement, petitioner merely points to
an annotation in the lower left portion of the blueprint of the subject property. An
applicant cannot rely on the notation in the blueprint made by a surveyor-geodetic
engineer indicating that the property involved is alienable and disposable land.
Petitioner cannot also invoke estoppel on the part of the OSG as to bar the latter
from challenging the decision of the RTC. In land registration cases, the Solicitor
General is not merely the principal, but the only legal counsel of the government.
Simply, petitioner failed to prove that she had an imperfect title to the subject
property, which could be confirmed by registration. Petition is denied.

85
(29) Republic v. (Cayetano L.) Serrano
G.R. No. 183063
24 February 2010

The requisites for the filing of an application are: (1) that the property 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 thereof; and (3) that such possession is under a bona fide
claim of ownership since 12 June 1945 or earlier.

FACTS. Respondent filed an application for registration over a 533 square meter
parcel of commercial land. Cayetano claimed to have acquired the lot by inheritance,
by virtue of a Deed of Exchange dated 10 February 1961 and by a private deed of
partition and extrajudicial settlement forged by him and his co-heirs.

Cayetano also claimed to have been in open, continuous, exclusive and notorious
possession of the lot under a claim of ownership before 1917 by himself and
through his deceased parentspredecessors-in-interest or for more than 70 years.

The Heirs of Catalino Alaan, intervened and filed an application for registration,
their predecessor-in-interest Catalino Alaan having purchased a 217.45 square
meter undivided portion of the lot from Cayetano on 27 February 1989 during the
pendency of Cayetanos application for registration. They prayed that their
application for confirmation of title be considered jointly with that of Cayetanos,
and that, thereafter, original certificates of title be issued in both their names.

Respondent presented the original survey plan dated 3 January 1957 and certified
by the Department of Environment and Natural Resources (DENR), and Bureau of
Lands Director technical description of the lot, Tax Declarations for the years 1924
and 1948-1997, Official Receipts showing Real Estate Tax payments from 1948-
1997, Surveyors Certificate No. 157485 dated January 1957, and, as respondents
sole witness, Leonardo.

ISSUE. Is the property alienable?

RULING. YES. The requisites for the filing of an application for registration of title
under Section 14(1) of the Property Registration Decree are: (1) that the property 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 thereof; and (3) that

86
such possession is under a bona fide claim of ownership since 12 June 1945 or
earlier.

Respondents sole witness, Leonardo, clearly established the character of the


possession of Cayetano and his predecessors-in-interest over the lot. Thus he
declared that the lot was first owned by Lazaro Raada who sold the same to Julian
Ydulzura in 1917 who in turn sold it to his and Cayetanos father Simeon in 1923;
that Simeon built a house thereon after its acquisition, which fact is buttressed by
entries in Tax Declaration No. 18587 in the name of Simeon for the year 1924
indicating the existence of a 40 square meter residential structure made of nipa and
mixed materials, and of coconut trees planted thereon; and that after Simeons
demise in 1931, Cayetano built his own house beside the old nipa house before the
war, and a bodega after the war, which claims find support in Tax Declarations
made in 1948-1958.

Finally, the official receipts of realty tax payments religiously made by Cayetano
from 1948 to 1997 further serve as credible indicia that Cayetano, after his fathers
death in 1931, continued to exercise acts of dominion over the lot.

(30) (Florencia G.) Diaz v. Republic


G.R. No. 181502
2 February 2010

Prior to the conversion of forest land as alienable land, any occupation or possession
thereof cannot be counted in reckoning compliance with the thirty-year possession
requirement under Commonwealth Act No. 141.

FACTS. This is a letter-motion praying for reconsideration (for the third time) of
the 16 June 2008 resolution of the Supreme Court denying the petition for review
filed by petitioner Florencia G. Diaz and to consider the validity of the Compromise
Agreement between the Petitioner and The Republic of the Philippines as
represented by the Office of the Solicitor General (OSG) regarding the petitioners
private rights over a land within the Fort Magsaysay Military Reservation (FMMR).

On 12 August 1976, petitioners late mother, Flora Garcia, filed an application for
registration of a vast tract of land located in Laur, Nueva Ecija and Palayan City
before the then Court of First Instance (CFI), Branch 1, Nueva Ecija. She alleged that
she possessed the land as owner and worked, developed and harvested the
agricultural products and benefits of the same continuously, publicly and adversely

87
for more or less 26 years. The Republic of the Philippines, represented by the OSG,
opposed the application because the land in question was within the FMMR,
established by virtue of Proclamation No. 237 in 1955. Thus, it was inalienable as it
formed part of the public domain. In a decision dated 1 July 1981, the CFI ruled in
favor of the Garcia.

The Republic eventually appealed the decision of the CFI to the Court of Appeals
(CA). In its decision dated 26 February 1992, the CA reversed and set aside the
decision of the CFI. It concluded that inasmuch as the land was situated inside a
military reservation, Garcia did not validly acquire title thereto.

During the pendency of the case in the CA, Garcia passed away and was substituted
by her heirs, one of whom was petitioner Florencia G. Diaz.

Petitioner filed a motion for reconsideration of the Decision. Subsequently, the CA


encouraged the parties to reach an amicable settlement on the matter. The parties
ultimately entered into a compromise agreement with the Republic withdrawing its
claim on the more or less 4,689 hectares supposedly outside the FMMR. For her
part, petitioner withdrew her application for the portion of the property inside the
military reservation. On 30 June 1999, the CA approved the compromise agreement,
and eventually directed the Land Registration Administration (LRA) to issue the
corresponding decree of registration in petitioners favor. However, acting on a
letter written by a certain Atty. Restituto S. Lazaro, the OSG filed a motion for
reconsideration of the CA resolution ordering the issuance of the decree of
registration. The OSG informed the appellate court that the tract of land subject of
the amicable settlement was still within the military reservation.

On 16 April 2007, the CA issued an amended resolution annulling the compromise


agreement entered into between the parties.

PETITIONER. The private rights must be respected as the subject land even prior
to the establishment of the FMMR, is in their possession as owner and worked,
developed and harvested the agricultural products and benefits of the same
continuously, publicly and adversely for more or less 26 years. Moreover, the
subject land may be a valid object of the amicable agreement

RESPONDENT. The tract of land subject of the amicable settlement was still within
the military reservation by virtue of Proclamation No. 237. Hence, it is inalienable
and formed part of the public domain

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ISSUE. Can the occupation of a land within the military reservation be ripened into
ownership in favor of a private person?

RULING. NO. It is true that forest lands may be registered when they have been
reclassified as alienable by the President in a clear and categorical manner (upon
the recommendation of the proper department head who has the authority to
classify the lands of the public domain into alienable or disposable, timber and
mineral lands) coupled with possession by the claimant as well as that of her
predecessors-in-interest. Unfortunately for petitioner, she was not able to produce
such evidence. Accordingly, her occupation thereof, and that of her predecessors-in-
interest, could not have ripened into ownership of the subject land. This is because
prior to the conversion of forest land as alienable land, any occupation or possession
thereof cannot be counted in reckoning compliance with the thirty-year possession
requirement under Commonwealth Act No. 141 (C.A. 141) or the Public Land Act.
Moreover, the rules on the confirmation of imperfect titles do not apply unless and
until the land classified as forest land is released through an official proclamation to
that effect. Then and only then will it form part of the disposable agricultural lands
of the public domain. Therefore, even if possession was for more than 30 years, it
could never ripen to ownership.

The possession of public land, however long the period may have extended, never
confers title thereto upon the possessor because the statute of limitations with
regard to public land does not operate against the State unless the occupant can
prove possession and occupation of the same under claim of ownership for the
required number of years to constitute a grant from the State.

(31) Manila International Airport Authority v. City of Pasay


G.R. No. 163072
2 April 2009

The airport lands and buildings of Manila International Airport Authority are
properties of public dominion intended for public use, and as such are exempt from
real property tax.

FACTS. Petitioner Manila International Airport Authority (MIAA) operates and


administers the Ninoy Aquino International Airport (NAIA) Complex under
Executive Order (E.O.) No. 903, or the Revised Charter of the Manila International
Airport Authority. E.O. No. 903 was issued on 21 July 1983 by then President
Ferdinand E. Marcos. Under Sections 34 and 225 of EO 903, approximately 600

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hectares of land, including the runways, the airport tower, and other airport
buildings, were transferred to MIAA. The NAIA Complex is located along the border
between Pasay City and Paraaque City.

On 28 August 2001, MIAA received Final Notices of Real Property Delinquency from
the City of Pasay for the taxable years 1992 to 2001. MIAA filed with the Court of
Appeals (CA) a petition for prohibition and injunction with prayer for preliminary
injunction or temporary restraining order. The petition sought to enjoin the City of
Pasay from imposing real property taxes on, levying against, and auctioning for
public sale the NAIA Pasay properties.

The CA dismissed the petition and upheld that Sections 193 and 234 of R.A. No.
7160 or the Local Government Code, which took effect on 1 January 1992, withdrew
the exemption from payment of real property taxes granted to natural or juridical
persons, including government-owned or controlled corporations, except local
water districts, cooperatives duly registered under Republic Act No. 6938, non-stock
and non-profit hospitals and educational institutions. Since MIAA is a government-
owned corporation, it follows that its tax exemption under Section 21 of EO 903 has
been withdrawn upon the effectivity of the Local Government Code.

ISSUE. Are the NAIA properties of MIAA exempt from real property tax?

RULING. Yes. MIAA is not a government-owned or controlled corporation under


Section 2(13) of the Introductory Provisions of the Administrative Code because it is
not organized as a stock or non-stock corporation. Neither is MIAA a government-
owned or controlled corporation under Section 16, Article XII of the 1987
Constitution because MIAA is not required to meet the test of economic viability.
MIAA is a government instrumentality vested with corporate powers and
performing essential public services pursuant to Section 2(10) of the Introductory
Provisions of the Administrative Code. As a government instrumentality, MIAA is
not subject to any kind of tax by local governments under Section 133(o) of the
Local Government Code. The exception to the exemption in Section 234(a) does not
apply to MIAA because MIAA is not a taxable entity under the Local Government
Code. Such exception applies only if the beneficial use of real property owned by the
Republic is given to a taxable entity.

The Airport Lands and Buildings of MIAA are properties devoted to public use and
thus are properties of public dominion. Properties of public dominion are owned by
the State or the Republic. Article 420 of the Civil Code enumerates the properties of
public dominion, which are: (1) those intended for public use, such as roads, canals,

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rivers, torrents, ports and bridges constructed by the State, banks, shores,
roadsteads, and others of similar character; and (2) those which belong to the State,
without being for public use, and are intended for some public service or for the
development of the national wealth.

The term "ports constructed by the State" includes airports and seaports. The
Airport Lands and Buildings of MIAA are intended for public use, and at the very
least intended for public service. Whether intended for public use or public service,
the Airport Lands and Buildings are properties of public dominion. As properties of
public dominion, the Airport Lands and Buildings are owned by the Republic and
thus exempt from real estate tax under Section 234(a) of the Local Government
Code.

(32) Manila International Airport Authority v. Court of Appeals


G.R. No. 155650
20 July 2006

Properties of public dominion are not subject to execution or foreclosure sale.

FACTS. Petitioner Manila International Airport Authority (MIAA) operates the


Ninoy Aquino International Airport (NAIA) Complex in Paraaque City under
Executive Order (E.O.) No. 903, otherwise known as the Revised Charter of the
Manila International Airport Authority. MIAA administers the land, improvements
and equipment within the NAIA Complex. The MIAA Charter transferred to MIAA
approximately 600 hectares of land, including the runways and buildings then
under the Bureau of Air Transportation. The MIAA Charter further provides that no
portion of the land transferred to MIAA shall be disposed of through sale or any
other mode unless specifically approved by the President of the Philippines. The
Office of the Government Corporate Counsel (OGCC) opined that the Local
Government Code of 1991 withdrew the exemption from real estate tax granted to
MIAA under Section 21 of the MIAA Charter. Thus, MIAA negotiated with
respondent City of Paraaque to pay the real estate tax imposed by the City. MIAA
then paid some of the real estate tax already due. The City of Paraaque issued
notices of levy and warrants of levy on the Airport Lands and Buildings. The Mayor
of the City of Paraaque threatened to sell at public auction the Airport Lands and
Buildings should MIAA fail to pay the real estate tax delinquency. The OGCC issued
Opinion No. 147 clarifying OGCC Opinion No. 061. The OGCC pointed out that
Section 206 of the Local Government Code requires persons exempt from real estate

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tax to show proof of exemption. The OGCC opined that Section 21 of the MIAA
Charter is the proof that MIAA is exempt from real estate tax.

MIAA filed with the Court of Appeals (CA) an original petition for prohibition and
injunction, with prayer for preliminary injunction or temporary restraining order.
The petition sought to restrain the City of Paraaque from imposing real estate tax
on, levying against, and auctioning for public sale the Airport Lands and Buildings.
The CA dismissed the petition because MIAA filed it beyond the 60-day
reglementary period. The CA also denied on 27 September 2002 MIAA's motion for
reconsideration and supplemental motion for reconsideration. Meanwhile, the City
of Paraaque posted notices of auction sale and published the notices in the 3 and
10 January 2003 issues of the Philippine Daily Inquirer. A day before the public
auction MIAA filed before the Supreme Court (SC) an Urgent Ex-Parte and
Reiteratory Motion for the Issuance of a Temporary Restraining Order. The Court
issued a temporary restraining order effective immediately. The Court ordered
respondents to cease and desist from selling at public auction the Airport Lands and
Buildings. Respondents received the TRO on the same day that the Court issued it.
However, respondents received the TRO only at 1:25 p.m. or three hours after the
conclusion of the public auction. MIAA admits that the MIAA Charter has placed the
title to the Airport Lands and Buildings in the name of MIAA. However, MIAA points
out that it cannot claim ownership over these properties since the real owner of the
Airport Lands and Buildings is the Republic of the Philippines. The MIAA Charter
mandates MIAA to devote the Airport Lands and Buildings for the benefit of the
general public. Since the Airport Lands and Buildings are devoted to public use and
public service, the ownership of these properties remains with the State. The
Airport Lands and Buildings are thus inalienable and are not subject to real estate
tax by local governments.

ISSUE. Are the Airport Lands and Buildings of MIAA exempt from real estate tax
under existing laws?

RULING. YES, MIAA's Airport Lands and Buildings are exempt from real estate tax
imposed by local governments. First, MIAA is not a government-owned or controlled
corporation but an instrumentality of the National Government and thus exempt
from local taxation. Second, the real properties of MIAA are owned by the Republic
of the Philippines and thus exempt from real estate tax.

Under Article 420 of the Civil Code, the Airport Lands and Buildings of MIAA, being
devoted to public use, are properties of public dominion and thus owned by the
State or the Republic of the Philippines. Article 420 specifically mentions "ports x x x

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constructed by the State," which includes public airports and seaports, as properties
of public dominion and owned by the Republic. As properties of public dominion
owned by the Republic, there is no doubt whatsoever that the Airport Lands and
Buildings are expressly exempt from real estate tax under Section 234(a) of the
Local Government Code. Properties of public dominion are not subject to execution
or foreclosure sale.

(33) Philippine Fisheries Development Authority v. Court of


Appeals
G.R. No. 169836
31 July 2007

A property of public dominion cannot be sold at public auction to satisfy the tax
delinquency.

FACTS. On 11 August 1976, then President Ferdinand E. Marcos issued


Presidential Decree (P.D.) No. 977 creating the Authority and placing it under the
direct control and supervision of the Secretary of Natural Resources. On 8 February
1982, Executive Order (E.O.) No. 772 was issued amending P.D. No. 977, and
renaming the Authority as the now "Philippine Fisheries Development Authority,"
and attaching said agency to the Ministry of Natural Resources.

Beginning 31 October 1981, the then Ministry of Public Works and Highways
reclaimed from the sea a 21-hectare parcel of land in Barangay Tanza, Iloilo City,
and constructed thereon the Iloilo Fishing Port Complex (IFPC). The Ministry of
Public Works and Highways turned over IFPC to the Authority. Notwithstanding
said turn over, title to the land and buildings of the IFPC remained with the
Republic.

The Authority thereafter leased portions of IFPC to private firms and individuals
engaged in fishing related businesses.

Sometime in May 1988, the City of Iloilo assessed the entire IFPC for real property
taxes. To satisfy the tax delinquency, the City of Iloilo scheduled on 30 August 1990,
the sale at public auction of the IFPC.

The Authority filed an injunction case with the Regional Trial Court (RTC). At the
pre-trial, the parties agreed to avail of administrative proceedings, that is, for the
Authority to file a claim for tax exemption with the Iloilo City Assessors Office.

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The Department of Finance ruled that the Authority is liable to pay real property
taxes to the City of Iloilo because it enjoys the beneficial use of the IFPC.

The Authority filed a petition before the Office of the President but it was dismissed.
It also denied the motion for reconsideration filed by the Authority.

On petition with the CA, it affirmed the decision of the Office of the President. It
opined, however, that the IFPC may be sold at public auction to satisfy the tax
delinquency of the Authority.

ISSUE. Is the Authority liable to pay real property tax to the City of Iloilo? If the
answer is in the affirmative, may the IFPC be sold at public auction to satisfy the tax
delinquency?

RULING. The Authority is an instrumentality of the national government which is


generally exempt from payment of real property tax. However, said exemption does
not apply to the portions of the IFPC which the Authority leased to private entities.
With respect to these properties, the Authority is liable to pay real property tax.
Nonetheless, the IFPC, being a property of public dominion cannot be sold at public
auction to satisfy the tax delinquency. This means that the City of Iloilo has to satisfy
the tax delinquency through means other than the sale at public auction of the IFPC.

(34) Macasiano v. Diokno


G.R. No. 97764
10 August 1992

A public street is property for public use hence outside the commerce of man (Arts.
420, 424, Civil Code).

FACTS. On 13 June 1990, the respondent municipality passed Ordinance No. 86,
Series of 1990 which authorized the closure of J. Gabrielle, G.G. Cruz, Bayanihan, Lt.
Garcia Extension and Opena Streets located at Baclaran, Paraaque, Metro Manila
and the establishment of a flea market thereon. The said ordinance was approved by
the municipal council pursuant to MCC Ordinance No. 2, Series of 1979, authorizing
and regulating the use of certain city and/or municipal streets, roads and open
spaces within Metropolitan Manila as sites for flea market and/or vending areas,
under certain terms and conditions.

94
Thereafter, respondent municipality and respondent Palanyag, a service
cooperative, entered into an agreement whereby the latter shall operate, maintain
and manage the flea market in the aforementioned streets with the obligation to
remit dues to the treasury of the municipal government of Paraaque.
Consequently, market stalls were put up by respondent Palanyag on the said streets.

Petitioner Brig. Gen. Macasiano, PNP Superintendent of the Metropolitan Traffic


Command, ordered the destruction and confiscation of stalls along G.G. Cruz and J.
Gabrielle St. in Baclaran. Thus, respondents municipality and Palanyag filed with the
trial court a joint petition for prohibition and mandamus with damages and prayer
for preliminary injunction.

Trial court issued a temporary restraining order to enjoin petitioner from enforcing
his letter-order of 16 October 1990 pending the hearing on the motion for writ of
preliminary injunction. On 17 December 1990, it upheld the validity of Ordinance
No. 86 s. 1990 of the Municipality of Paranaque.

Hence, the Office of the Solicitor General filed this petition alleging grave abuse of
discretion tantamount to lack or excess of jurisdiction on the part of the trial judge
in issuing the assailed order.

SOLICITOR GENERAL. The Solicitor General, in behalf of petitioner, contends that


municipal roads are used for public service and are therefore public properties; that
as such, they cannot be subject to private appropriation or private contract by any
person, even by the respondent Municipality of Paraaque. Petitioner submits that a
property already dedicated to public use cannot be used for another public purpose
and that absent a clear showing that the Municipality of Paraaque has been
granted by the legislature a specific authority to convert a property already in public
use to another public use, respondent municipality is, therefore, bereft of any
authority to close municipal roads for the establishment of a flea market. Petitioner
also submits that assuming that the respondent municipality is authorized to close
streets, it failed to comply with the conditions set forth by the Metropolitan Manila
Authority for the approval of the ordinance.

RESPONDENT. Chapter II Section 10 of the Local Government Code is a statutory


grant of power given to local government units, the Municipality of Paraaque as
such, is empowered under that law to close its roads, streets or alley subject to
limitations stated therein.

95
ISSUE. Is the ordinance issued by the municipal council of Paraaque authorizing
the lease and use of public streets or thoroughfares as sites for flea markets valid?

RULING. NO. Based on the foregoing, J. Gabrielle G.G. Cruz, Bayanihan, Lt. Gacia
Extension and Opena streets are local roads used for public service and are
therefore considered public properties of respondent municipality. Properties of the
local government which are devoted to public service are deemed public and are
under the absolute control of Congress. Hence, local governments have no authority
whatsoever to control or regulate the use of public properties unless specific
authority is vested upon them by Congress.

There is no doubt that the disputed areas from which the private respondents
market stalls are sought to be evicted are public streets, as found by the trial court
in Civil Case No. C-12921. A public street is property for public use hence outside the
commerce of man (Arts. 420, 424, Civil Code). Being outside the commerce of man, it
may not be the subject of lease or other contract.

The powers of a local government unit are not absolute. They are subject to
limitations laid down by the Constitution and the laws such as our Civil Code. The
petition was granted.

(35) Republic v. Regional Trial Court, Branch 18, Roxas City, Capiz
G.R. No. 172931
18 June 2009

FACTS. On 14 September 1984, the Regional Trial Court (RTC) of Roxas City,
Branch 18 rendered a decision in Land Registration Case (LRC) No. N-785 granting
the Application for Registration of Title dated June 20, 1977 filed by Rizal Recio for
himself and in behalf of his brother Oscar Recio and sisters Teresita Recio and
Paciencia Recio.The RTCs decision became final, and pursuant thereto, Original
Certificate of Title (OCT) No. 0-2107 covering the 11,189 square meter piece of land,
was issued in the Recios names on 17 April 1985.

In 1997, a number of occupants of Lot No. 900, namely Joselito Alba, Virginia
Bengora, Teodosia Alba, Celso Bullos, Elizabeth Barrosa, Noel Gallardo, Paquita
Ducit and Arturo Borleo filed a protest before the Department of Environment and
Natural Resources (DENR), Roxas City against the issuance of OCT No. 0-2107 on the
ground that the land covered therein is within forest lands or timberlands, hence it
cannot be the subject of private appropriation. Acting on the protest, Lorna L.

96
Jomento, Special Investigator II of the Lands Management Department (LMD),
DENR, Region VI, Iloilo City conducted an ocular inspection and investigation on the
status of Lot No. 900.

On 19 January 1998, Jomento rendered a written report that Lot No. 900 falls within
the forest lands of Project No. 20-A, established on 17 January 1986 under Forestry
Administrative Order No. 4-1777, per Land Classification (LC) Map No. 3132.
Jomento recommended that an action be instituted in the proper court for the
cancellation of OCT No. 0-2107.

On 9 September 2002, the Office of the Solicitor General (OSG), filed a petition for
annulment of judgment before the Court of Appeals (CA) seeking to annul the
Decision dated 14 September 1984 on the ground that the RTC had no jurisdiction
to adjudicate title over the subject parcel of land which forms part of the public
forest.

In their Answer to the Petition for Annulment of Judgment, the Recios argued that
the RTC of Roxas City, Branch 18 has jurisdiction over the case. They contended that
petitioner hastily and negligently filed the petition without first examining the
records of LRC No. N-785 and despite its knowledge of their duly approved Plan
LRC-SWO-14402 for Lot No. 900 of the Pilar Cadastre. They pointed out that said
approved plan clearly showed that Lot No. 900 was not within LC Project No. 20-A,
but LC Project No. 20 which was duly certified as alienable and disposable on 28
September 1960 as per BFD Map LC-2401. They also argued that the Decision dated
September 14, 1984, has been declared final and executory, and OCT No. 0-2107 has
been issued on April 17, 1985, in their names. Hence, LRC No. N-785 is already a
closed case and res judicata has set in.

Subsequently, on 25 May 2006, the CA dismissed the petition for lack of sufficient
evidence.

ISSUE. Did petitioner fail to discharge the burden of establishing the inalienable
character of the land?

RULING. YES. In an action to annul a judgment, the burden of proving the


judgments nullity rests upon the petitioner. The petitioner has to establish by clear
and convincing evidence that the judgment being challenged is fatally defective.

The CA ruled that petitioner failed to sufficiently prove its allegation that Lot No.
900 forms part of the forest lands of the public domain since its evidence consists

97
only of the testimonies of two witnesses, a written report of Jomento, and a
photocopy of the sketch plan of Lot No. 900. It ruled that a mere photocopy is
without probative value and inadmissible in evidence and petitioner should have
presented a land classification map indicating where Lot No. 900 lies to refute the
Certification dated 8 November 1976 of the then Bureau of Forest Development.

At the time of application for registration of the subject land by the Recios in 1977,
the land was classified as alienable public land. The Recios presented a Certification
dated 8 November 1976 from the then Bureau of Forest Development certifying that
the subject land containing an area of 11,189 square meters and described as Lot
No. 900, Pilar Cadastre is found to be within the alienable and disposable land block
of LC Project No. 20 of Pilar, Capiz certified as such on 28 September 1960 per BFD
Map LC-2401. In contrast, petitioner presented Jomentos report which stated that
Lot No. 900 falls within forest lands for fishpond development of Project 20-A,
established on 17 January 1986 under Forestry Administrative Order No. 4-1777
per LC Map No. 3132.

---oOo---

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CHAPTER V
ATTRIBUTES OF OWNERSHIP

Section 1
Right to Possess

Aneco Realty and Development Corporation v. Landex Development


Corporation
G.R. No. 165952
28 July 2008

FACTS. Fernandez Hermanos Development, Inc. (FHDI) sold 22 lots to petitioner


Aneco and 17 lots to Landex. Landex constructed a concrete wall on one of its lots.
To restrain construction of the wall, Aneco filed a complaint for injunction with the
RTC in Quezon City. Petitioner later filed supplemental complaints seeking to
demolish the newly-built wall and to hold Landex liable damages.

Landex filed its Answer alleging, among others, that Aneco was not deprived access
to its lots due to the construction of the concrete wall. Landex claimed that Aneco
has its own entrance toits property along Miller Street, Resthaven Street, and San
Francisco del Monte Street. The Resthaven access, however, was rendered
inaccessible when Aneco constructed a building on said street.

ISSUE. Whether or not Aneco may enjoin Landex from constructing a concrete
wall on its own property.

RULING. No. Under Article 430 of the Civil Code, every owner the right to enclose
or fence his land or tenement. The right to fence flows from the right of ownership
subject only to the limitations and restrictions provided by law.

Section 2
Right to Recover

(1) Spouses Ocampo v. Heirs of Bernardino U. Dionisio


G.R. No. 191101
1 October 2014

99
Prescription and laches cannot apply to registered land covered by the Torrens system
because under the Property Registration Decree, no title to registered land in
derogation to that of the registered owner shall be acquired by prescription or adverse
possession.

FACTS. On 28 August 1996, Bernardino U. Dionisio filed a complaint for forcible


entry with the Municipal Trial Court (MTC) of Cardona, Rizal, docketed as Civil Case
No. 96-0031 (forcible entry case), against Mario Ocampo and Felix Ocampo. Dionisio
sought to recover the possession of a portion of his property, covered by Original
Certificate of Title (OCT) No. M-4559, situated in Dalig, Cardona, Rizal, alleging that
Mario and Felix built a piggery thereon without his consent. In his answer, Mario
denied Dionisio's allegation, claiming that the disputed parcel of land is owned by
his wife, Carmelita Ocampo, who inherited the same from her father. Mario further
claimed that they have been in possession of the said parcel of land since 1969.

On 12 September 1997, the MTC rendered a decision, which dismissed the


complaint for forcible entry filed by Dionisio. The MTC opined that Dionisio failed to
establish his prior possession of the disputed parcel of land. Dionisio's notice of
appeal was denied by the MTC in its Order dated 26 January 1998 for having been
filed beyond the reglementary period.

Dionisio died on 27 September 1997. Consequently, on 3 July 1998, the heirs of


Dionisio (respondents), filed a complaint for recovery of possession with the MTC,
docketed as Civil Case No. 98-0006 (recovery of possession case), against the
spouses Mario and Carmelita (petitioners). The respondents sought to recover the
same portion of the parcel of land subject of Civil Case No. 96-0031.

COMPLAINANT. The petitioners maintained that the subject parcel of land is


owned by Carmelita, having acquired the same through inheritance and that they
have been in possession thereof since 1969. Additionally, the petitioners claimed
that the respondents' complaint for recovery of possession of the subject property is
barred by res judicata in the light of the finality of the decision in the forcible entry
case.

RESPONDENT. The respondents averred that the subject property was acquired
by Dionisio on 10 February 1945 when he purchased the same from Isabelo
Capistrano. That Dionisio thereafter took possession of the subject property and
was able to obtain a free patent covering the subject property. OCT No. M-4559 was
subsequently issued in the name of Dionisio on 22 December 1987. The respondents

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further claimed that sometime in 1995, Mario constructed a piggery on a portion of
the subject property without their consent.

FIRST ISSUE. Were the respondents able to establish their ownership of the
subject property?

RULING, FIRST ISSUE. YES. Between the petitioners' unsubstantiated and self-
serving claim that the subject property was inherited by Carmelita from her father
and OCT No. M-4559 registered in Dionisio's name, the latter must prevail. The
respondents' title over the subject property is evidence of their ownership thereof.
That a certificate of title serves as evidence of an indefeasible and incontrovertible
title to the property in favor of the person whose name appears therein and that a
person who has a Torrens title over a land is entitled to the possession thereof are
fundamental principles observed in this jurisdiction. Further, it is settled that a
Torrens Certificate of Title is indefeasible and binding upon the whole world unless
and until it has been nullified by a court of competent jurisdiction.

SECOND ISSUE. Is respondents' cause of action already barred by laches?

RULING, SECOND ISSUE. NO. As owners of the subject property, the respondents
have the right to recover the possession thereof from any person illegally occupying
their property. This right is imprescriptible. Assuming arguendo that the petitioners
indeed have been occupying the subject property for a considerable length of time,
the respondents, as lawful owners, have the right to demand the return of their
property at any time as long as the possession was unauthorized or merely
tolerated, if at all.

(2) Piedad v. Gurieza


G.R. No. 207525
10 June 2014

A complaint for unlawful detainer must allege that: (1) the defendant originally had
lawful possession of the property, either by virtue of a contract or by tolerance of the
plaintiff; (2) eventually, the defendants possession of the property became illegal or
unlawful upon notice by the plaintiff to defendant of the expiration or the termination
of the defendants right of possession; (3) thereafter, the defendant remained in
possession of the property and deprived the plaintiff the enjoyment thereof; and (4)
within one year from the unlawful deprivation or withholding of possession, the
plaintiff instituted the complaint for ejectment.

101
FACTS. The instant case stemmed from a Complaint for Unlawful Detainer and
Damages filed by Bonifacio against Spouses Gurieza before the Municipal Trial Court
(MTC) of Bayombong, Nueva Vizcaya. In his complaint, Bonifacio alleged that he is
the absolute owner of the 1/3 middle portion of a parcel of residential land
designated as Lot 1227, located at La Torre, Bayombong, Nueva Vizcaya, with an
area of 4,640.98 square meters which he acquired through intestate succession
from his late father who inherited the same from the latters parents, Alejandro
Piedad and Tomasa Villaray. He also claimed that his ownership of the subject lot
took place even before his fathers death and was validated through a Deed of
Confirmation of an Adjudication and Partition executed by Alejandro and Tomasas
legal heirs. Further, Bonifacio alleged that before migrating to Hawaii, he built a
bungalow on the subject lot and assigned numerous caretakers to look after it, the
last of which were Spouses Gurieza. Sometime in 2005, however, Spouses Gurieza
allegedly took interest of the bungalow and the subject lot after learning from an
employee of the Department of Environment and Natural Resources (DENR) that
Lot 1227 is public land. Using such information, Spouses Gurieza had the subject lot
declared under their name for tax purposes, caused a subdivision survey of Lot
1227, and filed an application for survey authority and titling with the Bureau of
Land Management, Community Environment and Natural Resources Office (CENRO)
of the DENR, Bayombong, Nueva Vizcaya.

Thus, Bonifacio was constrained to file the instant case as his last resort. In their
defense, Spouses Gurieza denied Bonifacios claim. Dissatisfied, Sps. Gurieza
appealed to the Regional Trial Court (RTC). The RTC affirmed the MTC ruling in toto.
The Court of Appeals (CA) reversed and set aside the RTC ruling, and consequently,
ordered the dismissal of Bonifacios Complaint for Unlawful Detainer and Damages.
Bonifacio moved for reconsideration but was, however, denied in a Resolution dated
5 June 2013.

ISSUE. Who between the parties have the better right of possession de facto over
the subject lot?

RULING. Bonifacio had clearly established his cause of action for unlawful
detainer. Under Section 1, Rule 70 of the Rules of Court, the complaint must be filed
within one year after such unlawful deprivation or withholding of possession and
must allege that: (1) the defendant originally had lawful possession of the property,
either by virtue of a contract or by tolerance of the plaintiff; (2) eventually, the
defendants possession of the property became illegal or unlawful upon notice by
the plaintiff to defendant of the expiration or the termination of the defendants
right of possession; (3) thereafter, the defendant remained in possession of the

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property and deprived the plaintiff the enjoyment thereof; and (4) within one year
from the unlawful deprivation or withholding of possession, the plaintiff instituted
the complaint for ejectment.

(3) Lim v. Ligon


G.R. No. 183589
25 June 2014

FACTS. Tomas Fernandez filed a free patent application over a parcel of land
situated at Nasugbu, Batangas. After his death, his son Felicisimo pursued the
application then the survey plan over the parcel of land was approved by the Bureau
of Lands. However, Spouses Ronulo claimed that a parcel of land containing 1,000
square meters which they have been occupying since the 1950s was included in the
approved survey plan. The Department of Environment and Natural Resources
(DENR) Provisional Region IV-A then approved the claim of spouses Ronulo and the
approved survey plan of Fernandez was cancelled. Fernandez then appealed to the
Secretary of the DENR. While the case was not yet final and executory, the spouses
Ronulo and their heirs executed an Affidavit of Waiver of Rights over the subject
parcel of land in favor of plaintiff Lim. Fernandez also sold the subject parcel of land
over the defendant spouses Ligon, whereby the latter introduced improvements
therein including a beach house. Plaintiff Lim filed a complaint for forcible entry
against the petitioners with the MTC, which rendered a decision in favor of Lim and
ordered the spouses Ligon to vacate the area. The Regional Trial Court (RTC) and
Court of Appeals (CA) affirmed the decision. After sometime, the appeal of
Fernandez was decided by the Secretary of DENR who reversed the decision of the
DENR Provisional Region dismissing the protest of the Ronulos, and ordering that
TCT No. TP-1792 in the name of plaintiffs "shall remain undisturbed." The decision
became final and executory after the Secretary of DENR rejected the two motions for
reconsideration of spouses Ronulo, and as a result, the spouses Ligon filed a
complaint against Lim to restore them to their possession of the subject property
and to enjoin herein plaintiff Lim from demolishing their beach house. The RTC then
decided in favor of the spouses Ligon. The CA affirmed the ruling of the RTC.

ISSUE. Whether or not the defendant spouses Ligon has the right of ownership
over the parcel of land

RULING. Yes. Failing to adduce evidence to overturn the ruling of both the RTC
and the CA, the Court affirmed the indefeasibility of defedants title over the 9,478-
squaremeter property. A certificate of title issued pursuant to a public land patent

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indefeasible and incontrovertible upon the expiration of one year from the date of
issuance of the order for the issuance of the patent is a disputable presumption. A
free patent obtained through fraud or misrepresentation is void. Hence, the one-
year prescriptive period provided in the Public Land Act does not bar the State from
asking for the reversion of property acquired through such means.

(4) Gabriel v. Crisologo


G.R. No. 204626
9 June 2014

The titleholder is entitled to all the attributes of ownership of the property, including
possession.

FACTS. Crisologo alleged that she was the registered owner of two parcels of land
with a total area of approximately 2,000 square meters, described in, and covered
by, two certificates of title Transfer Certificate of Title (TCT) Nos. T-13935 and T-
13936. The properties were covered by an Assessment of Real Property and the
payments of realty taxes on the said properties were updated. Sometime in 2006,
she discovered that petitioners occupied her properties without her prior consent
and knowledge, and constructed their houses thereon. Upon discovery of their
illegal occupation, her daughter, Atty. Carmelita Crisologo, and Isican personally
went to the properties and verbally demanded that petitioners vacate the premises
and remove their structures thereon. The petitioners begged and promised to buy
the said but they reneged on their promise to buy them. Moreover, petitioners
refused to vacate the subject properties despite several demands knowing well that
the subject premises they were occupying were titled properties.

Petitioners countered that the titles of Crisologo were products of Civil Registration
Case No. 1, Record 211, which were declared void by the Supreme Court which was
later enacted into law, Presidential Decree (P.D.) No. 1271, entitled An Act
Nullifying Decrees of Registration and Certificates of Title within the Baguio
Townsite Reservation Case No.1, GLRO Record No. 211, pursuant to Act No. 931, as
amended, but Considering as Valid Certain Titles of Lands that are Alienable and
Disposable Under Certain Conditions and For Other Purposes which took effect on
22 December 1977. Hence, the titles were void due to Crisologos failure to comply
with the conditions provided in Section 1 of P.D. No. 1271 for the validation of said
titles. Petitioners further claimed that they had been in open, actual, exclusive,
notorious, uninterrupted, and continuous possession of the subject land, in good
faith.

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ISSUE. Do petitioners have the right to possess the subject parcels of land?

RULING. NO. The respondents certificates of title give her the better right to
possess the subject parcels of land. It is settled that a Torrens title is evidence of
indefeasible title to property in favor of the person in whose name the title appears.
It is conclusive evidence with respect to the ownership of the land described
therein. It is also settled that the titleholder is entitled to all the attributes of
ownership of the property, including possession. The age-old rule is that the person
who has a Torrens title over a land is entitled to possession thereof.

As for the attack against Crisologos title, P.D. No. 1271 expressly states that all
certificates of titles issued on or before 31 July 1973 shall be considered valid and
the lands covered by them shall be deemed to have been conveyed in fee simple to
the registered owners. The subject parcels of land were registered on 24 August
1967. Thus, the titles are valid although subject to the conditions set by the said law.
But whether or not Crisologo complied with the said conditions would not matter
because this would be a collateral attack on her registered titles. As a holder of a
Torrens certificate of title, the law protects Crisologo from a collateral attack.

Consequently, as the lawful possessor, the respondent has the right to eject the
petitioners and recover the possession of the subject parcels of land. The testimonial
and documentary evidence on record prove that Crisologo has a preferred claim of
possession over that of petitioners. Hence, she deserves to be respected and
restored to her lawful possession. The petition was denied.

(5) Suarez v. Emboy


G.R. No. 187944
12 March 2014

When the complaint fails to aver facts constitutive of forcible entry or unlawful
detainer, as where it does not state how entry was effected or how and when
dispossession started, the remedy should either be an accion publiciana or accion
reivindicatoria.

FACTS. A 222 square meter lot partitioned between the heirs of Carlos and
Asuncion Padilla became the subject of the instant case after Carmencita Suarez, to
whose name the TCT of the lot was issued to, filed a complaint of unlawful detainer
against Felix and Marilou Emboy. The latter two claim that they had occupied the

105
said lot for decades after inheriting the same from their mother, Claudia, who had in
turn succeeded her own parents, Carlos and Asuncion.

Felix and Marilou were asked by their cousins to vacate the lot. They refused
insisting that Claudias inheritance pertained to the said partition of the lot.
Carmencita sent a demand letter to Felix and Marilou informing them that she had
already purchased the lot from their relatives. Felix and Marilou did not heed the
demand and instead filed before the RTC of Cebu City a complaint for nullification of
the partition and the issuance of new Transfer Certificate of Titles (TCTs) covering
their respective portions. Carmencita filed before the Municipal Trial Court in Cities
(MTCC) the said unlawful detainer case since she alleged that she had bought the lot
from the registered owner relatives of Felix and Marilou who let the two occupy the
same by mere tolerance. The MTCC granted her claim and ordered Felix and Marilou
to vacate the lot. The Regional Trial Court (RTC) affirmed the ruling.

Felix and Marilou appealed to Court of Appeals (CA) alleging that they have been
occupying the lot in the concept of an owner for decades and that Carmencita was a
buyer in bad faith for having purchased the property despite the notice of lis
pendens clearly annotated on title. They also stressed that the deed of sale bore
signs of being spurious. They also presented a newly discovered duly notarized
agreement showing Vicente Padilla and his spouse (the parents of the owner
relatives) waiving their hereditary rights. They also averred that Carmencitas
complaint lacked a cause of action.

The CA reversed the decision of the RTC. The CA distinguished forcible entry from
unlawful detainer for the reason that the nature of the defendants entry into the
land determines the cause of action. The CA said that the case was neither for the
complaint did not characterize Felix and Marilous alleged entry into the land, but
the case is essentially involved in an issue of ownership which must be resolved in
an accion reinvidicatoria. Carmencita should have filed her claim in the proper RTC
in an accion publiciana or accion reinvidicatoria, and not before the MTCC in a
summary proceeding of unlawful detainer or forcible entry.

ISSUE. Did Carmencita sufficiently allege and prove a cause of action for unlawful
detainer?

RULING. NO. Carmencita had not amply alleged and proven that all the requisites
for unlawful detainer are present in the case. Without a doubt, the registered owner
of real property is entitled to its possession. However, the owner cannot simply
wrest possession thereof from whoever is in actual occupation of the property. To

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recover possession, he must resort to the proper judicial remedy and, once he
chooses what action to file, he is required to satisfy the conditions necessary for
such action to prosper. The jurisdictional facts must appear on the face of the
complaint. When the complaint fails to aver facts constitutive of forcible entry or
unlawful detainer, as where it does not state how entry was effected or how and
when dispossession started, the remedy should either be an accion publiciana or
accion reivindicatoria.

(6) Spouses Dela Cruz v. Spouses Capco


G.R. No. 176055
17 March 2014

When the property is registered under the Torrens system, the registered owner's title
to the property is presumed legal and cannot be collaterally attacked, especially in a
mere action for unlawful detainer.

FACTS. On 6 October 2003, the spouses Dela Cruz filed a Complaint for Unlawful
Detainer against the spouses Capco. They alleged that Teodora T. Concio, mother of
petitioner Amelia Concio-Dela Cruz, acquired ownership over a piece of land by
virtue of a Regional Trial Court (RTC) decision and that they only tolerated the
Capcos occupation thereof. As the spouses Capco refused, the matter was brought
before the Barangay Lupon for conciliation but to no avail.

In their Answer, the spouses Capco pointed out that the Complaint is defective for
failing to allege the exact metes and bounds of the property. They asserted that they
have all the rights to occupy the subject property since respondent Rufino Capco is
an heir of its true owner.

The Metropolitan Trial Court (MeTC) rendered a Decision on 9 July 2004. One-half
of that property was adjudicated in favor of Hermogenes Reyes, and the other half
was awarded to Teodora T. Concio.

Notwithstanding the decision the spouses Capco remained in possession of the


subject property by reason of the tolerance extended to them by the Concios.

Upon the death of Teodora the heirs executed a Deed of Extra-Judicial Settlement in
favor of petitioner. Based on this, the MeTC rejected the spouses Capcos claimed
right to possess the subject property. The MeTC concluded that since the spouses
Capcos possession of the subject property was by mere tolerance of the spouses

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Dela Cruz, the latter have the better right to possess and thus may recover the same
upon demand.

The RTC denied spouses Capcos appeal. However The Court of Appeals (CA) found
in favor of the spouses Capco in its Decision on 18 August 2006.

Petitioners assert they right of ownership over the land based on the judgment in
the land registration case. On the other hand, the spouses Capco reiterate that they
are the rightful possessors of the property as Rufino is an heir of the true owner.

ISSUE. Do petitioners have the right to possess the lot?

RULING. YES. The spouses Dela Cruz are able to establish by preponderance of
evidence that they are the rightful possessors of the property. Moreover, the
spouses Dela Cruz were able to prove that they are the owners of the lot. Their
allegation that the subject property was adjudicated to Teodora by virtue of a
decision in a land registration case and was later conveyed in their favor, is
supported by a copy of the Decision in the said land registration case, the title of the
land issued to Teodora and, the Deed of Extra-Judicial Settlement of the Estate of
Teodora wherein the latters heirs agreed to convey the said property to Amelia.

On the other hand, aside from their bare allegation that respondent Rufino is an heir
of the true owners thereof, respondents presented nothing to support their claim.
The presentation of tax declarations does not suffice to support their claim. When
the property is registered under the Torrens system, the registered owner's title to
the property is presumed legal and cannot be collaterally attacked, especially in a
mere action for unlawful detainer.

As its present owners, the spouses Dela Cruz have a right to the possession of the
property which is one of the attributes of ownership. The Petition was granted.

(7) Rivera-Calingasan v. Rivera


G.R. No.171555
17 April 2013

A party who can prove prior possession can recover such possession even against the
owner himself. Whatever may be the character of his possession, if he has in his favor
prior possession in time, he has the security that entitles him to remain on the property
until a person with a better right lawfully ejects him.

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FACTS. Wilfredo Rivera and his wife, Loreto Inciong owned two parcels of land in
Lipa City, Batangas , covered by Transfer Certificate of Title (TCT) Nos. T-22290 and
T-30557. Loreto died, leaving Wilfredo and their daughters, Evangeline and Brigida
Liza, as her surviving heirs.

On 29 March 1993, Loretos heirs executed an extrajudicial settlement of her one-


half share of the conjugal estate, adjudicating all the properties in favor of their two
daughters; Wilfredo waived his rights to the properties, with a reservation of his
usufructuary rights during his lifetime. TCT Nos. T-22290 and T-30557 were
cancelled and TCT Nos. T-87494 and T-87495 were issued in place thereof in the
names of Evangeline and Brigida Liza, with an annotation of Wilfredos usufructuary
rights.

On 13 March 2003, Wilfredo filed with the Municipal Trial Court in Cities (MTCC) of
Lipa City a complaint for forcible entry against the petitioners claiming that he
lawfully possessed and occupied the two parcels of land covered by TCT Nos. T-
87494 and T-87495, with a building used for his furniture business; that the
petitioners took advantage of his hospital confinement by taking possession and
causing the renovation of the building on the property; and that with the aid of
armed men, petitioners barred him from entering the property in December 2002.

COMPLAINANT. Wilfredo voluntarily renounced his usufructuary rights in a


petition for cancellation of usufructuary rights dated 4 March 1996, and that
another action between the same parties is pending with the Regional Trial Court
(RTC) of Lipa City, Branch 13 (an action for the annulment of the petition for
cancellation of usufructuary rights filed by Wilfredo).

RESPONDENT. Petitioners mistakenly relied on petitioners claim that they


occupied the land since 1997; such statements had been rendered in an
interlocutory order, and should not prevail over Evangelines admission in her
answer of "Poblacion, Rosario, Batangas as her residence.

ISSUE. Does Wilfredo have prior physical possession of the property?

RULING. YES. Wilfredo had been in prior possession of the property and the
petitioners deprived him of such possession by means of force, strategy and stealth.
The Court of Appeals (CA) did not err in equating residence with physical
possession since residence is a manifestation of possession and occupation.
Wilfredo had consistently alleged that he resided on "C.M. Recto Avenue, Lipa City,
Batangas," the location of the property, whereas Evangeline has always admitted

109
that she has been a resident of "J. Belen Street, Rosario, Batangas." The petitioners
failed to prove that they have occupied the property through some other person,
even if they have declared their residence in another area.

A party who can prove prior possession can recover such possession even against
the owner himself. Whatever may be the character of his possession, if he has in his
favor prior possession in time, he has the security that entitles him to remain on the
property until a person with a better right lawfully ejects him.

The complicating factor in the case is the nature and basis of Wilfredos possession;
he was holding the property as usufructuary. The right to the usufruct is now
rendered moot by the death of Wilfredo since death extinguishes a usufruct under
Article 603(1) of the Civil Code. This development deprives the heirs of the
usufructuary the right to retain or to reacquire possession of the property even if
the ejectment judgment directs its restitution. Thus, what actually survives under
the circumstances is the award of damages, by way of compensation.

(8) Tolentino v. Laurel


G.R. No. 181368
22 February 2012

The objective of the plaintiffs in an accion publiciana is to recover possession only, not
ownership.

FACTS. For several years, petitioners have been in actual possession of the
western portion of the subject property with a total area of 620,000 square meters
which they tried to develop into fishponds. In the years 1993 and 1994, respondents
informed petitioners, through Gustavo C. Tolentino Sr. who was then representing
them, that the area they are occupying was inside the respondents' property and,
therefore, they should vacate and leave the same. Gustavo, however, asked for time
to verify respondents' claim. If found to be true, then the petitioners were willing to
discuss with respondents the improvements that they have introduced on the
subject area. Respondents have waited for almost a year for the outcome of the
intended verification, but they waited in vain until Gustavo died. Petitioners
continued to develop the area they were occupying into fishponds, thereby
manifesting their unwillingness to vacate the premises and restore the possession
thereof in favor of respondents. Hence, respondents filed a suit against petitioners
to recover the property and demand payment of unearned income, attorney's fees
and costs of suit.

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On 27 August 1996, petitioners were declared in default, for failure to appear at the
pre-trial conference. However, the trial court set aside the default order and reset
the pre-trial conference. Despite several resetting of the pre-trial conference of
which petitioners were notified, petitioners failed to appear. Hence, on 21 March
2000, the trial court issued an Order allowing respondents to present their evidence
ex parte, instead of declaring petitioners in default.

COMPLAINANT. Petitioners, as defendants in the trial court, averred in their


answer that the subject property is owned by the Republic and they are occupying
the same by virtue of a Fishpond Lease Agreement entered with the Department of
Agriculture. Thus, their stay over the property is lawful. Also, petitioners maintain
that they were denied their day in court, because they were not allowed to present
their evidence before the trial court which resulted in the denial of their right to due
process.

RESPONDENT. Respondent alleged that they are the registered owners of a parcel
of land situated in Barangay Balugo, Tagkawayan, Quezon, with an area of 1,056,275
square meters, covered by Transfer Certificate of Title (TCT) No. T-43927.

ISSUE. Is the certificate of title an enough evidence for ownership of land?

RULING. YES. Petitioners questioned the validity of the respondents' title by


claiming that since the property is owned by the government, it is part of the public
domain and, therefore, cannot be privately owned by the respondents. The
petitioners' submission is not meritorious.

It is a rule that a certificate of title cannot be the subject of collateral attack. It must
be pointed out that notwithstanding petitioners' submission that the subject
property is owned by the Republic, there is no showing that the Office of the
Solicitor General (OSG) or its representatives initiated an action for reversion of the
subject property to become part of the public domain. All actions for the reversion
to the Government of lands of the public domain or improvements thereon shall be
instituted by the Solicitor General or the officer acting in his stead, in the proper
courts, in the name of the Republic of the Philippines. Unless and until the land is
reverted to the State by virtue of a judgment of a court of law in a direct proceeding
for reversion, the Torrens certificate of title thereto remains valid and binding
against the whole world.

Besides, it must be emphasized that the action filed before the trial court is an
accion publiciana, which is a plenary action for recovery of possession in an

111
ordinary civil proceeding in order to determine the better and legal right to possess,
independently of title. The objective of the plaintiffs in an accion publiciana is to
recover possession only, not ownership. However, where the parties raise the issue
of ownership, the courts may pass upon the issue to determine who between the
parties has the right to possess the property. This adjudication, however, is not a
final and binding determination of the issue of ownership; it is only for the purpose
of resolving the issue of possession, where the issue of ownership is inseparably
linked to the issue of possession. The adjudication of the issue of ownership, being
provisional, is not a bar to an action between the same parties involving title to the
property. It is undisputed that the subject property is covered by TCT No. T-43927,
registered in the name of the respondents. On the other hand, petitioners do not
claim ownership, but allege that they are leasing the portion they are occupying
from the government.

Respondents' title over the subject property is evidence of their ownership thereof.
It is a fundamental principle in land registration that the certificate of title serves as
evidence of an indefeasible and incontrovertible title to the property in favor of the
person whose name appears therein. It is conclusive evidence with respect to the
ownership of the land described therein. It is also settled that the titleholder is
entitled to all the attributes of ownership of the property, including possession.
Thus, the Court held that the age-old rule is that the person who has a Torrens title
over a land is entitled to possession thereof.

(9) Jakosalem v. Barangan


G.R. No. 175025
15 February 2012

In order to recover possession, a person must prove: (1) the identity of the land
claimed, and (2) his title. No title to registered land in derogation to that of the
registered owner shall be acquired by prescription or adverse possession.

FACTS. Col. Roberto S. Barangan entered into a Land Purchase Agreement with
Ireneo S. Labsilica to purchase on installment a 300 square meter parcel of land.
Upon full payment of the purchase price, a Deed of Absolute Sale was executed.
Baragan has been dutifully paying real property taxes. He was not, however, able to
physically occupy the subject property because as a member of the Philippine Air
Force 1993, when he was about to retire from the government service, respondent
Barangan went to visit his property, planning to build a retirement home.

112
He discovered that it was being occupied by petitioner Godofredo Dulfo. Barangan
sent a letter to petitioner Dulfo demanding that he and his family vacate the subject
property within 30 days. Atty. Rogelio J. Jakosalem, the son-in-law of petitioner
Dulfo, sent a letter claiming ownership over the subject property. Barangan filed
with Barangay San Luis, Antipolo, Rizal, a complaint for Violation of Presidential
Decree No. 772 or the Anti-Squatting Law against petitioners. No settlement so it
was filed to the proper court. Respondent Barangan commissioned Geodetic
Engineer Lope C. Jonco to conduct a survey pertaining the location of his property.

The relocation survey revealed that the property occupied by petitioner Dulfo and
his family is the same property covered by respondent Barangans title. Respondent
Barangan filed a Complaint for Recovery of Possession, Regional Trial Court (RTC),
Branch 73, Antipolo City to vacate a property his property.

Petitioners Dulfo and Jakosalem claimed that the subject property was assigned to
petitioner Jakosalem by Mr. Nicanor Samson (Samson) that they have been in
possession of the subject property since 8 May 1979 and that the property covered
by respondent Barangans title is not the property occupied by petitioner Dulfo and
his family.

Respondent Barangan testified for himself and presented three witnesses. Testifying
that the lang belongs to barangan.

Jakosalem who maintained that he acquired the subject property by assignment


from its previous owner, Samson.

RTC rendered a Decision against respondent Barangan for failure to present


sufficient evidence to prove his claim. The RTC further said that even if the subject
property is owned by respondent Barangan, prescription and laches have already
set in; thus, respondent Barangan may no longer recover the same.

Court of Appels (CA) reversed the findings of the RTC. It found respondent Barangan
entitled to recover possession of the subject property because he was able to
sufficiently prove the identity of the subject property and that the same is owned by
him, as evidenced by TCT No. N-10772.

ISSUE. Can Barangan still recover his property on the ground that prescription
and laches will not run against him?

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RULING. YES, Barangan is entitled to recover the subject property. Pursuant to
Article 434 of the Civil Code provides that in an action to recover, the property must
be identified, and the plaintiff must rely on the strength of his title and not on the
weakness of the defendants claim. In other words, in order to recover possession, a
person must prove (1) the identity of the land claimed, and (2) his title. The act of
refusal of petitioners to participate in the relocation survey does not speak well of
their claim two things: (1) that they know for a fact that the result would be
detrimental to their case; or (2) that they have doubts that the result would be in
their favor. To prove the identity of the property, he offered the testimonies of Engr.
Jonco, who conducted the relocation survey and Estardo, the caretaker of the
subdivision, who showed respondent Barangan the exact location of the subject
property. He likewise submitted as evidence the Verification Survey Plan of Lot 11,
Block 5, (LRC) Psd-60846, which was plotted based on the technical description
appearing on respondent Barangans title.

Laches and prescription do not apply. Jurisprudence consistently holds that


prescription and laches cannot apply to registered land covered by the Torrens
system because under the Property Registration Decree, no title to registered land
in derogation to that of the registered owner shall be acquired by prescription or
adverse possession.

(10) Palali v. Awisan


G.R. No. 158385
12 February 2010

Possession, when coupled with a tax declaration, is a weighty evidence of ownership. It


certainly is more weighty and preponderant than a tax declaration alone.

FACTS. Respondent claimed to own a 6.6698 hectare of land in Sitio Camambaey,


Tapapan, Bauko, Mountain Province, under a tax declaration. On 7 March 1994, she
filed an action for quieting of title against petitioner after finding out that the latter
encroached in the northern part of her property. She claimed that her father
originally owned the subject lot, to which the latter and his wife consolidated their
ownership on the subject property. On the other hand, the petitioner denied the
encroachment, and claimed that the northern part of the subject property was his
own, that he and his predecessors-in-interest were in open possession since time
immemorial. Further, he declared the 848 square meters portion as his for tax
purposes in 1974. During the trial, there was a new allegation of encroachment in
the southern portion of the respondents lot, made by the petitioner, but was not

114
included in the complaint. The Bontoc Regional Trial Court (RTC) dismissed the case
and upheld the ownership of the northern portion by the petitioner as he was able
to prove his actual, continuous, exclusive and notorious possession of the subject
portion, aside from his tax declaration, and which was duly verified by the court
upon its ocular inspection of the subject property. The Court of Appeals (CA),
however, overturned the RTC decision.

ISSUE. Who between the parties has the better right to the subject property?

RULING. It is the petitioner who has the better claim or title to the subject
property. While the respondent merely relied upon her tax declaration, petitioner
was able to prove actual possession of the subject property coupled with his tax
declaration. Possession, when coupled with a tax declaration, is a weighty evidence
of ownership. It certainly is more weighty and preponderant than a tax declaration
alone.

The preponderance of evidence is therefore clearly in favor of petitioner,


particularly considering that, as actual possessor under claim of ownership, he
enjoys the presumption of ownership. Moreover, settled is the principle that a party
seeking to recover real property must rely on the strength her case rather than on
the weakness of the defense. The burden of proof rests on the party who asserts the
affirmative of an issue. For he who relies upon the existence of a fact should be
called upon to prove that fact. Having failed to discharge her burden to prove her
affirmative allegations, we find that the trial court rightfully dismissed respondents
complaint.

(11) Lagazo v. Soriano


16 February 2010

FACTS. On 16 January 2001, Gerald and Galileo Soriano filed with the Municipal
Trial Court (MTC) of Tabuk, Kalinga , a complaint for Forcible Entry with Application
for Termporary Restraining Order and a Writ of Preliminary Injunction and
Damages against Nelson Lagazo. Respondents claimed they were the owners of a
parcel of land covered by Original Certificate of Title No. P-665, Lot No. 816, Pls-93
with an area of 58,171 square meters. They allegedly acquired the same by purchase
from their grandfather, Arsenio Baac, on 10 September 1998, but even prior thereto,
they were already allowed by Arsenio Baac to cultivate said land. They paid real
property taxes for said property from 1990 to 1998 and had been in actual
possession from that time. However, on 6 January 2001, petitioner allegedly

115
unlawfully entered the property by means of force, stealth, and strategy and began
cultivating the land for himself.

On the other hand, petitioner insisted in his Answer that he, together with his
mother, brothers, and sisters, were the lawful owners of the land in question, being
the legal heirs of Alfredo Lagazo, the registered owner thereof. They denied that the
subject land was sold to Arsenio Baac, alleging instead that the agreement between
Alfredo Lagazo and Arsenio Baac was merely one of mortgage. Petitioner, likewise
maintained that he and his co-heirs had always been in possession of the disputed
land. They allegedly tried several times to redeem the property, but Baac increased
the redemption price from 10,000.00 to 100,000.00. This prompted them to bring
the matter before the Barangay Lupon of Balong, Tabuk, Kalinga, but no agreement
was reached.

ISSUE. Who had prior physical possession of the disputed land?

RULING. RESPONDENTS. The most important evidence for respondents was the
testimony of Brgy. Capt. Artemio Fontanilla, who stated that he was born and had
continuously resided in Balong, Tabuk, Kalinga; that the disputed land was only
about three kilometers from his house; that for the longest time, he had always
known that it was Arsenio Baac who was cultivating and occupying said property;
and that it was only sometime in January 2001, when the police asked him to
accompany them to the subject land, that he saw petitioner with some other men
working said land. The foregoing leaves no doubt in our mind that it was only on 6
January 2001 that petitioner, believing himself to be the lawful owner of the
disputed land, entered the same, thereby disturbing respondents' peaceful
possession thereof.

(12) Heirs of Pedro Laurora v. Sterling Technopark III


G.R. No. 146815
9 April 2003
The owners of a property have no authority to use force and violence to eject alleged
usurpers who were in prior physical possession of it. They must file the appropriate
action in court and should not take the law into their own hands.

FACTS. The petitioners, Pedro Laurora and Leonora Laurora alleged that they
were the owners of Lot 1315-G, SWD-40763 of the Yaptinchay Estate with an area of
39,771 square meters that was located in Carmona, Cavite. Pedro Laurora planted
trees and has possessed the land up to the present.

116
On 2 April 1969, the Land Authority issued an order of award in favor of petitioners
approving the application of Pedro Laurora to buy the subject Lot 1315-G from the
government. The petitioners requested the Department of Agrarian Reform for the
transfer of the lot to Juan Manaig. Favorably acted upon, the DAR issued a permit to
transfer. Juan Manaig, as transferee and buyer, paid the required amount to the
government. On 26 March 1976, the petitioners, as sellers and witnessed by their
sons, Efren Laurora and Dominador Laurora, executed a Kasulatan ng Paglilipatan
ng Lupa transferring the land to Juan Manaig as buyer. On 11 June 1976, the
petitioners again witnessed by their sons, Efren and Dominador, executed a
Kasulatan ng Bilihang Tuluyan or Deed of Sale wherein they sold Lot 1315-G
including all improvements therein, in favor of Juan Manaig.

The Deed of Absolute Sale was approved by the Department of Agrarian Reform.
After the approval of the sale, Juan Manaig paid its real estate taxes. The tax
declarations of the land in the name of its previous owners were cancelled and
transferred to Juan Manaig. Thereupon, the heirs of the late Juan Manaig sold the
land to Golden Mile Resources Development Corporation which likewise sold it to
respondent S. P. Properties, Inc.

On 15 September 1997, the respondents, Sterling Technopark III and S.P. Properties,
Inc. through their Engr. Bernie Gatchalian bulldozed and uprooted the trees and
plants, and with the use of armed men and by means of threats and intimidation,
succeeded in forcibly ejecting the petitioners. As a result of their dispossession, the
petitioners suffered actual damages in the amount of 3,000,000 and 10,000.00 as
attorneys fees.

After summary proceedings in the Municipal Circuit Trial Court (MCTC), a judgment
was rendered dismissing the complaint. The case was elevated to the Regional Trial
Court. The said court rendered a decision reversing the MCTC judgment. The Court
of Appeals (CA) reversed the Regional Trial Court (RTC) and reinstated the Order of
dismissal issued by the MCTC. It held that there was no evidence to support the
claim of petitioners to the prior physical possession of the property. Accordingly,
their subsequent entry into and possession of the land constituted plain usurpation,
which could not be the source of any right to occupy it. Being planters in bad faith,
they had no right to be reimbursed for improvements on the land, in accordance
with Article 449 of the New Civil Code.

PETITIONERS. The improvements made by the petitioners on the land must be


reimbursed by the respondents. Moreover, the respondents must also pay the
damages incurred by the petitioners as a result of their dispossession.

117
RESPONDENTS. The respondents averred that petitioners were not the owners of
the land because they disposed of it sometime in 1976 as shown by legal documents.
Therefore, no reimbursements must be made.

ISSUE. Do respondents have a valid and legal right to forcibly eject the petitioners
from the premises despite their resistance and objection, through the use of armed
men and by bulldozing, cutting, and destroying trees and plants planted by
petitioners, without court order, to the damage and prejudice of the latter?

RULING. NO. Notwithstanding the actual condition of the title to the property, a
person in possession cannot be ejected by force, violence or terror not even by the
owners. Granting arguendo that petitioners illegally entered into and occupied the
property in question, respondents had no right to take the law into their own hands
and summarily or forcibly eject the occupants therefrom. Verily, even if petitioners
were mere usurpers of the land owned by respondents, still they are entitled to
remain on it until they are lawfully ejected therefrom. Under appropriate
circumstances, respondents may file, other than an ejectment suit, an accion
publiciana which is a plenary action intended to recover the better right to possess
or an accion reivindicatoria which is an action to recover ownership of real property.

The availment of the aforementioned remedies is the legal alternative to prevent


breaches of peace and criminal disorder resulting from the use of force by claimants
out to gain possession. The rule of law does not allow the mighty and the privileged
to take the law into their own hands to enforce their alleged rights. They should go
to court and seek judicial vindication. The Petition is granted.

(13) Philippine National Bank v. Austria


G.R. No. 135219
17 January 2002
One who claims to be the owner of a property possessed by another must bring the
appropriate judicial action for its physical recovery.

FACTS. Sometime during the late 1970s, the spouses Godofredo and Wilma
Monsod loaned amounting to 120,000 from petitioner Philippine National Bank
(PNB). The Monsods mortgaged to PNB a parcel of land to secure their loan.
Monsods failed to pay their loan obligation. Thus, PNB extra judicially foreclosed the
mortgage. A certificate of sale was issued in favor of PNB. Ownership of the property
was consolidated in PNB upon expiration of the redemption period. The trial court
granted PNBs petition and issued a writ of possession.

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Respondents Ernesto and Loreto Quintana Austria filed a Motion for Intervention
and to stop the enforcement of the Writ of Possession. They alleged that they are the
actual occupants of the subject lot which they bought from the Monsods as early as
1974. They claimed that the foreclosed property was enclosed within a concrete
fence and formed part of their family compound. PNB allegedly knew of this fact
even before it granted the loan to the Monsods, because the banks credit
investigators were advised of the same when they inspected the property in the
summer of 1976. The Austrias maintained that the issuance of the possessory writ
ex parte was improper because it will deprive them of their property without due
process. Three (3) writs of possession were issued by the same court but all were
not enforced.

Fourth Alias Writ was granted which was partially enforced.

The Austrias for the fifth time filed a motion to stop the enforcement of the fourth
alias writ and to set aside all prior writs issued by the trial court which was denied
but ruled that any writ of possession that may be issued in this case is declared
unenforceable against the respondents until the Court declares otherwise.

PNB filed before the Court of Appeals (CA) a petition for certiorari which was
dismissed by CA.

ISSUE. Can an ex parte writ of possession be issued? Can it be enforced against a


third person who is in actual possession of the foreclosed property and who is not in
privity with the debtor or a mortgagor?

RULING. An ex parte writ of possession cannot be issued and be made binding to


third persons. Respondents acquired their rights as owners of the property by
virtue of a sale made to them by the Monsods prior to the banks mortgage lien.
Under applicable laws and jurisprudence, they cannot be dispossessed therefrom
without due notice and hearing through the simple expedient of an ex-parte
possessory writ.

The operative provision under Act No. 3135, as amended, is Section 6, which states:

Sec. 6. Redemption. In all cases in which an extrajudicial sale is made under


the special power hereinbefore referred to, the debtor, his successors in
interest or any person having a lien on the property subsequent to the
mortgage or deed of trust under which the property is sold, may redeem the
same at any time within the term of one year from and after the date of the

119
sale; and such redemption shall be governed by the provisions of section
four hundred and sixty-four to four hundred and sixty-six, inclusive, of the
Code of Civil Procedure, in so far as these are not inconsistent with the
provisions of this Act.

Section 33 provides:

Upon the expiration of the right of redemption, the purchaser or


redemptioner shall be substituted to and acquire all the rights, title, interest
and claim of the judgment obligor to the property at the time of levy. The
possession of the property shall be given to the purchaser or last
redemptioner by the same officer unless a third party is actually holding the
property adversely to the judgment obligor.

The Civil Code protects the actual possessor of a property, to wit:

Art. 433. Actual possession under claim of ownership raises a disputable


presumption of ownership. The true owner must resort to judicial process
for the recovery of the property.

One who claims to be the owner of a property possessed by another must bring the
appropriate judicial action for its physical recovery. The term judicial process mean
no less than an ejectment suit or reinvindicatory action, in which the ownership
claims of the contending parties may be properly heard and adjudicated.

An ex parte petition for issuance of a possessory writ under Section 7 of Act No.
3135 is not, strictly speaking, a judicial process as contemplated. A third person in
possession of an extra judicially foreclosed realty, who claims a right superior to
that of the original mortgagor, will have no opportunity to be heard on his claim in a
proceeding of this nature. To enforce the writ against an unwitting third party
possessor, who took no part in the foreclosure proceedings would be tantamount to
the taking of real property without the benefit of proper judicial intervention.

Consequently, it was not a ministerial duty of the trial court under Act No. 3135 to
issue a writ of possession for the ouster of respondents from the lot subject of this
instant case. The trial court was without authority to grant the ex parte writ since
petitioner PNBs right of possession under said Act could be rightfully recognized
only against the Monsods and the latters successors-in-interest but not against
respondents who assert a right adverse to the Monsods. Respondents are not
obliged to prove their ownership of the foreclosed lot in the ex-parte proceedings

120
conducted. The trial court has no jurisdiction to determine who between the parties
is entitled to ownership and possession of the foreclosed lot.

Registration of the lot in petitioner PNBs name does not automatically entitle the
latter to possession. PNB must resort to the appropriate judicial process for
recovery of the property and cannot simply invoke its title in an ex-parte proceeding
to justify the ouster of respondents. Petition is denied and the resolution of the CA is
affirmed.

(14) Hutchinson v. Buscas


G.R. No. 158554
26 May 2005

To successfully maintain an action to recover ownership of a real property, the person


who claims a better right to it must prove: (1) the identity of the real property being
claimed; and (2) his title thereto.

FACTS. In 1987, petitioners, Spouses Ronald and Valentine Hutchison, purchased


a 76,207 square meter land situated in San Juan, Lubao, Pampanga from V.A.
Development Enterprises, Inc. After a title under their names was issued, they
occupied the land.

In 1989, respondent Enrique Buscas bought a 7,581 square meter portion of the lot
adjacent to that of the petitioners from Juanita Arrastia which was evidenced by a
Quitclaim Deed. He occupied the 1,100 square meters but failed to register the lot in
his name. Thus, title still remained under Arrastias name.

In 1995, respondent commissioned geodetic engineer Narciso Manansala who


surveyed the property and found out that 6,471 square meters of the formers
property was occupied by petitioners. Hence, respondent sent a demand letter
asking petitioners to vacate the encroached area which the latter refused by
insisting that it was part of their land.

The respondent filed before the Municipal Trial Court (MTC) of Lubao, Pampanga a
complaint for unlawful detainer against petitioners and obtained a favorable
decision. But on appeal, the Regional Trial Court (RTC) dismissed the case for the
MTC has no jurisdiction over the subject matter of boundary dispute. The proper
action of accion reinvindicatoria should have been filed before the RTC. The

121
respondent then filed a case for accion reinvindicatoria against petitioners before
the RTC of Guagua, Pampanga.

The respondent adduced the Quitclaim Deed to prove his title over the subject area.
He also presented the survey conducted by Manansala. Another geodetic engineer,
Angelito Nicdao, who was directed by the MTC to conduct a verification survey over
the lots using the title of petitioners and the records the Bureau of Lands in relation
to the unlawful detainer case, revealed in his report that petitioners encroached on
6,471 square meters of the adjacent land claimed by respondent.

The RTC dismissed the complaint for lack of merit and ruled that the Quitclaim Deed
was not sufficient proof of ownership, that respondent failed to clearly identify the
property claimed as it was only marked with an X, and that petitioners, as registered
owners, are entitled to possession of the subject lot.

On appeal, the Court of Appeals reversed the decision of the RTC and ruled that
respondent is entitled to possession of the disputed lot as he was able to prove his
ownership claim and the subject lands identity.

ISSUE. Did the respondent sufficiently identify the property he seeks to recover?

RULING. NO. In civil cases, the law requires that the party who alleges a fact and
substantially asserts the affirmative of the issue has the burden of proving it.

Under Article 434 of the New Civil Code, to successfully maintain an action to
recover ownership of a real property, the person who claims a better right to it must
prove: (1) the identity of the real property being claimed, and (2) his title thereto;
both of which was not established by the respondent in this case.

In relation to the identity of the land, the location, area and boundaries thereof must
be described. The Quitclaim Deed presented by the respondent specified only the
extent of the area and failed to mention the metes and bounds of the land subject of
the sale. A piece of land is defined by the boundaries thereof which enclose the land
and indicate its exact limits, and not the size mentioned in the instrument.

As to the title requirement, a party can claim a right of ownership only over a parcel
of land that was the object of the instrument. Respondent failed to present the
specific portion of the property to him since the attached plan described the entire
lot of Arrastia, and marking the subject property only with an X sign.

122
Moreover, the rules on evidence provide that where the contents of the documents
are the facts in issue, the best evidence is the instrument itself. And it is the settled
rule that in an action to recover real property, the plaintiff must rely on the strength
of his title, and not on the weakness of the defendants. This rule was based on two
reasons: (1) the possibility that neither of the parties is the true owner, and (2) the
burden of proof lies on the party who substantially asserts the affirmative of an
issue for he who relies upon the existence of a fact should be called upon to prove
that fact.

In the present case, as respondent failed to prove his title and identity of the subject
land, there is no legal ground to turn over the possession of the contested area to
him.

Thus, the Supreme Court REVERSED the decision of the CA; REINSTATED the
decision of the RTC dismissing the complaint for accion reinvindicatoria; and made
no pronouncement as to costs.

(15) Lao v. Lao


G.R. No. 149599
16 May 2005

A vendee has to respect the lease contract between the original owner as the lessee
and the lessor.

FACTS. As early as 1956, the spouses Julian Lao and Anita Lao had constructed a
building on a parcel of land in Balasan, Iloilo City, owned by Alfredo Alava and
covered by Transfer Certificate of Title (TCT) No. 28382. On 12 May 1982, Alfredo
Alava, as lessor, and Anita Lao, as lessee, executed a Contract of Lease over the said
property. The parties agreed that the lease of the property was to be for a period of
35 years, at an annual rental of 120.00. However, the contract of lease was not filed
with the Office of the Register of Deeds.

Aside from Anita Lao, petitioner Rudy Lao also leased another portion of the same
property where he put up his business. In fact, Anita Laos building was adjacent to
where the petitioner conducted his business. At that time, the petitioner knew that
Anita Lao and her husband were the owners of the said building. He also knew that
she had leased that portion of the property, and that respondent Jaime Lao, their
son, managed and maintained the building, as well as the business thereon.

123
In the meantime, on 21 March 1995, the petitioner purchased the property from
Alava, and was later issued TCT No. 152097 in his name. By then, the property had
been classified as commercial, but the yearly rental of 120.00 in the contract of
lease between Alava and Anita Lao subsisted. On 14 July 1997, the petitioner filed a
Complaint for Unlawful Detainer against the respondent with the 1st Municipal
Circuit Trial Court (MCTC) of Carles-Balasan, Iloilo City which favored the
petitioner. This decision was affirmed by the Regional Trial Court but reversed by
the Court of Appeals ruling that the real party-in-interest as defendant in the
Municipal Circuit Trial Court (MCTC) was Anita Lao and not the respondent who
was merely a manager of the property.

PETITIONER. The petitioner alleged that the respondent had occupied a portion of
his property without any lease agreement and without paying any rentals therefor,
and that the same was only through his tolerance and generosity. The petitioner
avers that the respondent was the real party-in-interest as defendant in the
complaint for unlawful detainer because the respondents possession of the
property was in his personal capacity, and not as the caretaker of the property and
the business in the building owned by Anita Lao. The petitioner argues that the
defendant in an ejectment case is the person in actual physical possession of the
property.

RESPONDENT. In his answer to the complaint, the respondent alleged that the
petitioner had no cause of action against him, the truth being that the lessee of the
property was his mother, Anita Lao, as evidenced by a contract of lease executed by
Alava, the former owner thereof. He further alleged that she had been paying the
annual rentals therefor, the last of which was on July 16, 1997 and evidenced by a
receipt. He further alleged that she had designated him as manager to maintain the
building, pay rentals and operate the business.

ISSUE. Can the ejectment case filed by petitioner against respondent prosper?

RULING. NO. In ejectment cases, the word possession means nothing more than
actual physical possession, not legal possession, in the sense contemplated in civil
law. The only issue in such cases is who is entitled to the physical or material
possession of the property involved, independent of any claim of ownership set
forth by any of the party-litigants.

In an action for unlawful detainer, the real party-in-interest as party-defendant is


the person who is in possession of the property without the benefit of any contract
of lease and only upon the tolerance and generosity of its owner. Such occupant is

124
bound by an implied promise that he will vacate the premises upon demand. This
situation is analogous to that of a lessee or tenant whose term has expired, but
whose occupancy continued by mere tolerance of the owner. He is the real party-in-
interest as defendant.

However, the respondent in this case has been in possession of the property subject
of the complaint not by mere tolerance or generosity of the petitioner, but as the
manager of his mother, Anita Lao, who conducted her business in the
building/warehouse which stood on a portion of the property leased from Alava, the
former owner. Contrary to the petitioners claim, the respondents possession of the
property was in behalf of his mother, the lessee thereof, and not in his own right,
independently of that of his mother.

The petitioner cannot feign ignorance of the existence of the lease of the subject
property by Anita Lao, the existence of the building and her business thereon, and
the fact that the respondent managed his mothers building and business. While it is
true that the contract of lease between Alava and Anita Lao was not filed in the
Office of the Register of Deeds and annotated at the dorsal portion of the petitioners
title over the property, nevertheless, the petitioner was bound by the terms and
conditions of the said contract of lease. The lease, in effect, became a part of the
contract of sale.

The petitioner, as the vendee of the property, had the right to file an action for
unlawful detainer against Anita Lao upon demand, but ONLY for breach of the
contract of lease under Section 2, Rule 70 of the Rules of Court. In this case, the
petitioner does not even have a cause of action for unlawful detainer against Anita
Lao because the latter did not breach the contract of lease. What the petitioner had
no right to do directly, he did indirectly by filing a complaint for unlawful detainer
against her son, the respondent, believing that by so doing, he will be rid of Anita
Laos lease contract. Thus, no ejectment suit will prosper. The petition is denied.

(16) Ganila v. Court of Appeals


461 SCRA 435

The cause of action for unlawful detainer springs from the failure to vacate the lot
upon lawful demand by the rightful owner of the property.

FACTS. On 19 March 1997, private respondent Violeta Herrera filed 21 ejectment


Complaints before the Municipal Circuit Trial Court (MCTC) alleging that she owns

125
Lot 1227 of the Cadastral Survey of Jordan, Guimaras, with an area of 43,210 square
meters; that she inherited the lot from her parents; and that she only tolerated
petitioners to construct residential houses or other improvements on certain
portions of the lot without rental. Sometime in September or October 1996, private
respondent demanded that the petitioners vacate the lot and remove their houses
and other improvements thereon. Petitioners refused, despite offer of money by
way of assistance to them. After the barangay conciliation failed, private respondent
filed the complaints.

In their Answers, eight of the petitioners claimed that Lot 1227 was formerly a
shoreline which they developed when they constructed their respective houses.
Another eight maintained that their houses stood on Lot 1229 of the Cadastral
Survey of Jordan, Guimaras. The other three asserted that Lot 1227 is a social forest
area.

The MCTC consequently decided in favor of the plaintiff. Petitioners appealed to the
Regional Trial Court (RTC) which ruled that the evidence showed the better right of
private respondent to possess Lot 1227. Private respondents position paper,
affidavit and tax declaration supported her allegations. In addition, the
commissioners report and sketch plan showed that indeed petitioners occupy Lot
1227. On the other hand, according to the RTC, the petitioners failed to present
evidence which would show that they are entitled to possess the lot. The RTC
dismissed the cases against Gabasa and Amatorio since their houses occupy only a
small area of Lot 1227, declaring that they believed in good faith that the whole area
they occupied was part of the seashore.

The 19 petitioners, who were ordered to vacate the lot, filed a joint petition for
review with the Court of Appeals (CA) which denied the petition.

ISSUE. Did the private respondent file the proper case to recover possession of her
property?

RULING. YES. In this case for ejectment, private respondents allegations


sufficiently present a case of unlawful detainer. While petitioners assert that this
case involves only deprivation of possession, they confuse the remedy of an action
for forcible entry with that of unlawful detainer. In unlawful detainer, prior physical
possession by the plaintiff is not necessary. It is enough that plaintiff has a better
right of possession. Actual, prior physical possession of a property by a party is
indispensable only in forcible entry cases. In unlawful detainer cases, the defendant
is necessarily in prior lawful possession of the property but his possession

126
eventually becomes unlawful upon termination or expiration of his right to possess.
Thus, the fact that petitioners are in possession of the lot does not automatically
entitle them to remain in possession. And the issue of prior lawful possession by the
defendants does not arise at all in a suit for unlawful detainer, simply because prior
lawful possession by virtue of contract or other reasons is given or admitted. Unlike
in forcible entry where defendants, by force, intimidation, threat, strategy or stealth,
deprive the plaintiff or the prior physical possessor of possession. Here there is no
evidence to show that petitioners entered the lot by any of these acts.

What really distinguishes an action for unlawful detainer from a possessory action
(accion publiciana) and from a reinvindicatory action (accion reinvindicatoria) is
that the first is limited to the question of possession de facto. An unlawful detainer
suit (accion interdictal) together with forcible entry are the two forms of an
ejectment suit that may be filed to recover possession of real property. Aside from
the summary action of ejectment, accion publiciana or the plenary action to recover
the right of possession and accion reinvindicatoria or the action to recover
ownership which includes recovery of possession, make up the three kinds of
actions to judicially recover possession.

A person who occupies the land of another at the latters tolerance or permission,
without any contract between them, is necessarily bound by an implied promise
that he will vacate upon demand, failing which a summary action for ejectment is
the proper remedy against him. His status is analogous to that of a lessee or tenant
whose term of lease has expired but whose occupancy continued by tolerance of the
owner. In such a case, the date of unlawful deprivation or withholding of possession
is to be counted from the date of the demand to vacate. The petition is denied.

(17) Santos v. Ayon


G.R. No. 137013
6 May 2005

All actions for forcible entry or unlawful detainer shall be filed with the proper
Metropolitan Trial Courts, the Municipal Trial Courts and the Municipal Circuit Trial
Courts.

FACTS. Ruben Santos, petitioner, filed with the Municipal Trial Court in Cities
(MTCC), Branch 2, Davao City a complaint for illegal detainer against spouses Tony
and Mercy Ayon.

127
PETITIONER. He averred that he is the registered owner of three lots situated at
Lanzona Subdivision, Matina, Davao City, covered by Transfer Certificates of Title
(TCT) Nos. 108174, 108175, and 108176. Respondent spouses are the registered
owners of an adjacent parcel of land covered by TCT No. T-247792. The previous
occupant of this property built a building which straddled both the lots of the herein
parties. Respondents have been using the building as a warehouse.

Petitioner said he informed respondents that the building occupies a portion of his
land. However, he allowed them to continue using the building. But in 1996, he
needed the entire portion of his lot, hence, he demanded that respondents demolish
and remove the part of the building encroaching his property and turn over to him
their possession. But they refused. Instead, they continued occupying the contested
portion and even made improvements on the building. The dispute was then
referred to the barangay lupon, but the parties failed to reach an amicable
settlement. Accordingly, on 27 March 1996, a certification to file action was issued.

RESPONDENT. Respondents sought a dismissal of this case on the ground that the
court has no jurisdiction over it since there is no lessor-lessee relationship between
the parties. Respondents denied they were occupying petitioners property by mere
tolerance, claiming they own the contested portion and have been occupying the
same long before petitioner acquired his lots in 1985.

LOWER COURTS RULING. On 31 July 1997, the MTCC rendered its Decision in
favor of petitioner. On appeal, the Regional Trial Court (RTC), affirmed in toto the
MTCC judgment. Respondents then elevated the case to the Court of Appeals (CA)
through a petition for review, and reversed the MTCC/RTCs ruling.

ISSUE. Was the complaint for unlawful detainer correctly filed before the MTCC?

RULING. YES. All actions for forcible entry or unlawful detainer shall be filed with
the proper Metropolitan Trial Courts, the Municipal Trial Courts and the Municipal
Circuit Trial Courts, which actions shall include not only the plea for restoration of
possession but also all claims for damages and costs arising therefrom. The said
courts are not divested of jurisdiction over such cases even if the defendants therein
raises the question of ownership over the litigated property in his pleadings and the
question of possession cannot be resolved without deciding the issue of ownership.

Section 1, Rule 70 on forcible entry and unlawful detainer of the 1997 Rules of Civil
Procedure, as amended, reads:

128
Section 1. Who may institute proceedings, and when. Subject to the
provisions of the next succeeding section, a person deprived of the
possession of any land or building by force, intimidation, threat, strategy, or
stealth, or a lessor, vendor, vendee, or other person against whom the
possession of any land or building is unlawfully withheld after the expiration
or termination of the right to hold possession, by virtue of any contract,
express or implied, or the legal representatives or assigns of any such lessor,
vendor, vendee or other person may, at any time within one (1) year after
such unlawful deprivation or withholding of possession, bring an action in
the proper Municipal Trial Court against the person or persons unlawfully
withholding or depriving of possession, or any person or persons claiming
under them, for the restitution of such possession, together with damages
and costs.

In the case at bar, petitioners allegations in his complaint clearly make a case for an
unlawful detainer. Therefore, the complaint was properly filed before the MTCC.

(18) Heirs of Demetrio Melchor v. Melchor


G.R. No. 150633
12 November 2003

In ejectment cases, the jurisdiction of the court is determined by the allegations of the
complaint. The test for determining the sufficiency of those allegations is whether,
admitting the facts alleged, the court can render a valid judgment in accordance with
the prayer of the plaintiff.

FACTS. Petitioners claim to be the owners, by way of succession, of the subject


property allegedly in possession of Julio Melchor. The subject property is a portion
of the twenty (20) hectares of land registered in the name of Pedro Melchor. The
said property was purchased by the late Demetrio Melchor from Pedro Melchor, the
deceased father of Julio Melchor. During the lifetime of the late Demetrio, the
approval of Deed of Sale dated 14 February 1947 between Demetrio and Pedro was
made to the Secretary of Agriculture and Natural Resources.

Petitioners sent to the Julio several demand letters, demanding him to vacate and
surrender the said property, but the latter refused. Petitioners filed against Julio a
complaint for ejectment before the Municipal Trial Court (MTC) of Cauayan, Isabela.

Julio Melchor principally raised the matter of ownership by alleging


affirmative/special defenses, among others, that the parcel of land in possession of

129
the defendant is registered in the name of Antonia Quiteras, the deceased mother of
the defendant and that the same property is now owned by the defendant and his
three sisters and one brother, having inherited the same from their late mother.

ISSUE. Is there a sufficient cause of action for unlawful detainer against Julio
Melchor?

RULING. NO. Even if petitioners may be correct in saying that prior physical
possession by the plaintiff need not be alleged in an action for unlawful detainer, the
absence of such possession does not ipso facto make their complaint sufficient to
confer jurisdiction on the MTC.

In ejectment cases, the jurisdiction of the court is determined by the allegations of


the complaint. The test for determining the sufficiency of those allegations is
whether, admitting the facts alleged, the court can render a valid judgment in
accordance with the prayer of the plaintiff.

On the case at bar, allegations in the complaint failed to constitute a case for either
forcible entry or unlawful detainer. These actions, which deal with physical or de
facto possession, may be distinguished as follows:

(1) In an action for forcible entry, the plaintiff must allege and prove that he was in
prior physical possession of the premises until deprived thereof, while in illegal
detainer, the plaintiff need not have been in prior physical possession; and

(2) In forcible entry, the possession by the defendant is unlawful ab initio because
he acquires possession by force, intimidation, threat, strategy, or stealth, while in
unlawful detainer, possession is originally lawful but becomes illegal by reason
of the termination of his right of possession under his contract with the plaintiff.

Petitioners merely alleged their ownership of the land, which had supposedly been
possessed by respondent since 1947. There was no allegation showing that his
possession of it was initially legal by virtue of a contract, express or implied and
that it became illegal after the expiration of his right to possess.

Neither did the complaint claim as a fact any overt act on the part of petitioners
showing that they had permitted or tolerated respondents occupancy of the subject
property. It is a settled rule that in order to justify an action for unlawful detainer,
the owners permission or tolerance must be present at the beginning of the
possession.

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(19) Acaylar v. Harayo
G.R. No. 176995
30 July 2008

The rule is that possession by tolerance is lawful, but such possession becomes
unlawful upon demand to vacate made by the owner and the possessor by tolerance
refuses to comply with such demand.

FACTS. Danilo Harayo filed a complaint with the Municipal Trial Court in Cities
(MTCC) against Pablo Acaylar, son of the spouses Acaylar for forcible entry. He
alleged that he acquired the property from the spouses Acaylar by virtue of a Deed
of Sale executed on 14 September 2004 and took possession of the property at the
same day.

Pablo countered that the subject property is a portion of the entire property owned
by his parents. He is in possession the entire property since 1979 and he built his
house on the property and farmed the land. Harayo cannot definitely claim which
portion of the entire property he was able to buy from the spouses since the same
was not clearly delineated. He presented an Affidavit of Zoila Acaylar attesting that
she sold the subject property to him for consideration and she did not give Pablo
authority to either administer or remain on the subject property.

MTCC rendered a Decision awarding to Danilo the possession of the property, giving
credence to Danilo's claim that he took immediate possession after the execution of
the Deed of Sale. On appeal, Regional Trial Court (RTC) affirmed the award of
possession in favor of Harayo and declared that the sale of the subject property by
spouses Acaylar vested ownership and possession after the execution of the Deed of
Sale. On appeal, RTC affirmed the award of possession in favor of Harayo and
declared that the sale of the subject property by spouses Acaylar vested ownership
and possession of said property in Harayo, thus Acaylar's acts of entering of subject
property constitute forcible entry. Court of Appeals (CA) denied Acaylar's motion
for reconsideration.

ISSUE. Is there forcible entry or unlawful detainer?

RULING. NONE. The only question that the courts must resolve in ejectment
proceedings is who is entitled to the physical or material possession of the
property; and they should not involve the question of ownership or of possession de
jure, which is to be settled in the proper court and in a proper action. Hence the
Deed of Sale conferring ownership of the subject property upon Harayo is irrelevant

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in the case presented. The Deed of Sale did not automatically place him in physical
possession of the property.

In Affidavits of Zoila Acaylar, we find that Pablo was in peaceful possession of the
subject property prior to its sale to Harayo. Even if Pablo was not authorized by
Zoila as administrator, his possession was not opposed and was, thus, tolerated by
his parents.

The rule is that possession by tolerance is lawful, but such possession becomes
unlawful upon demand to vacate made by the owner and the possessor by tolerance
refuses to comply with such demand.

In this case, there is no showing that either Zoila or Harayo made an express
demand upon Pablo to vacate the property. In the absence of an oral or written
demand, Pablos possession of the subject property has yet to become unlawful. The
absence of demand to vacate precludes the Court from treating this case, originally
instituted as one for forcible entry, as one of unlawful detainer, since demand to
vacate is jurisdictional in an action for unlawful detainer.

(20) Heirs of Nieto v. Meycauayan


G.R. No. 150654
13 December 2007

An action to recover possession of a registered land never prescribes.

FACTS. Anacleto Nieto was the registered owner of a parcel of land. The property
is being used by respondent, Municipality of Meycauayan, Bulacan, which
constructed an extension of the public market.

Upon Anacletos death, his wife, petitioners Sixta P. Nieto, and their three children,
collated all the documents pertaining to his estate. When petitioners failed to locate
the owners duplicate copy of the Transfer Certificate of Title (TCT), they filed a
petition for the issuance of a second owners copy with the Regional Trial Court
(RTC). In that case, petitioners discovered that the missing copy of the title was in
the possession of the respondent. Consequently, petitioners withdrew the petition
and demanded from respondent the return of property and the certificate of title.

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Petitioners formally demanded from respondent the return of the possession and
full control of the property, and payment of a monthly rent with interest.
Respondent did not comply with petitioners demand.

PETITONERS. They averred that respondent occupied the subject property by


making it appear that it would expropriate the same. Respondent then used the land
as a public market site and leased the stalls therein to several persons without
paying Anacleto Nieto the value of the land or rent therefor.

RESPONDENT. Respondent alleged that the property was donated to it and that
the action was already time-barred because 32 years had elapsed since it possessed
the property.

For lack of proof, the RTC disregarded respondents claim that Anacleto Nieto
donated the property to it in light of the fact that the title remained in the name of
Anacleto. Nonetheless, the RTC did not rule in favor of petitioners because of its
finding that the case was already barred by prescription. It held that the
imprescriptibility of actions to recover land covered by the Torrens System could
only be invoked by the registered owner, Anacleto Nieto, and that the action was
also barred by laches.

ISSUE. Are lands covered by the Torrens System subject to prescription?

RULING. NO. An action to recover possession of a registered land never prescribes


in view of the provision of Section 44 of Act No. 496 to the effect that no title to
registered land in derogation of that of a registered owner shall be acquired by
prescription or adverse possession. It follows that an action by the registered owner
to recover a real property registered under the Torrens System does not prescribe.
It is well settled that the rule on imprescriptibility of registered lands not only
applies to the registered owner but extends to the heirs of the registered owner as
well because the latter step into the shoes of the decedent by operation of law and
are the continuation of the personality of their predecessor-in-interest. Hence,
petitioners, as heirs of Anacleto Nieto, the registered owner, cannot be barred by
prescription from claiming the property.

The Court has held that an action to recover registered land covered by the Torrens
System may not be barred by laches. Laches cannot be set up to resist the
enforcement of an imprescriptible legal right. Laches, which is a principle based on
equity, may not prevail against a specific provision of law, because equity, which has

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been defined as justice outside legality, is applied in the absence of and not against
statutory law or rules of procedure.

It should be stressed that laches is not concerned only with the mere lapse of time.
The following elements must be present in order to constitute laches:

(1) conduct on the part of the defendant, or of one under whom he claims, giving
rise to the situation of which complaint is made for which the complaint seeks
a remedy;

(2) delay in asserting the complainants rights, the complainant having had
knowledge or notice, of the defendants conduct and having been afforded an
opportunity to institute a suit;

(3) lack of knowledge or notice on the part of the defendant that the complainant
would assert the right on which he bases his suit; and

(4) injury or prejudice to the defendant in the event relief is accorded to the
complainant, or the suit is not held to be barred.

The Court has consistently held that those who occupy the land of another at the
latters tolerance or permission, without any contract between them, are necessarily
bound by an implied promise that the occupants will vacate the property upon
demand.

In this case, the first element of laches occurred the moment respondent refused to
vacate the property, upon petitioners demand. Case law teaches that if the
claimants possession of the land is merely tolerated by its lawful owner, the latters
right to recover possession is never barred by laches. Furthermore, the doctrine of
laches cannot be invoked to defeat justice or to perpetrate fraud and injustice. The
petition is granted.

(21) Dy v. Mandy Commodities Co., Inc.


G.R. No. 171842

FACTS. The National Government entered into a contract with PNB. The former
leased in favor of the latter the 21,727 square meter government owned land
located at Numancia Street, corner Urbiztondo, Binondo Manila. The lease was good
for 25 years and renewable for the same period upon the agreement of the parties.

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On 17 October 1994, PNB sublet a portion of the subject land consisting of 8,530.16
square meters to respondent Mandy Commodities Co., Inc., for a period
corresponding to PNBs contract with the National Government. Respondent
constructed on the subleased portion a two-storey warehouse which was leased out
to its tenants.

When the expiration of the subject lease contract was approaching, then
Department of Environment and Natural Resources (DENR) Secretary Heherson
Alvarez, on behalf of the government, issued a Memorandum Order dated 6 May
2002 initially approving the renewal of PNBs lease for another 25 years. In another
Memorandum dated 6 August 2002, Secretary Alvarez, however, recalled the earlier
6 May 2002 Memorandum and revoked the renewal of the said lease contract for the
purpose of clarifying the terms thereof and re-evaluating the role, qualifications and
capability of the subject realtys sub-lessees. Later, in a Final Endorsement dated 29
November 2002, Secretary Alvarez had a change of heart and approved the renewal
of the lease in favor of PNB and included respondent as one of the sub-lessees. This
Final Endorsement, though, did not last long as the then new DENR Secretary, Elisea
Gozun, issued a Memorandum dated 27 May 2003, withdrawing the lease contract
with PNB and, consequently calling off the sub-lease contract with the respondent.

On 30 July 2003, in order to avert the eventual take over, PNB commenced a
complaint for Injunction (PNB Injunction Case) with prayer for the issuance of a
Temporary Restraining Order (TRO). The PNB alleged that the contract of lease
between it and the National Government had already been renewed by virtue of the
29 November 2002 Final Endorsement of then Secretary Alvarez; hence, PNBs
possession of the disputed property must be respected by the LMB.

On 18 September 2003, the Court of Appeals, in the PNB Injunction Case, nullified
the said RTC Order and granted PNBs application for TRO.

In the meantime, banking on the same OSG opinion, LMB granted petitioner Gloria
Dy a provisional permit to occupy the subject realty. Equipped with the provisional
permit from the LMB, petitioner was able to enter and install her own guards in the
premises of the property on 10 October 2003. Petitioner also posted notices
announcing that all the tenants therein should secure from her an authorization to
enter the same.

On 15 October 2003, respondent Mandy Commodoties, being the sub-lessee, reacted


to petitioners intrusion on the subject property by filing a complaint for Damages
with prayer for injunction (Respondents Injunction Case) and TRO docketed as Civil

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Case No. 03108128 before the Manila RTC, Branch 25. On 21 October 2003, through
the aid of its own security personnel, respondent regained possession of the same
property.

On 7 November 2003, petitioner was able to wrest from respondent possession of


the property in question.

On 4 December 2003, respondent commenced the instant case with the


Metropolitan Trial Court (MeTC) of Manila, Branch 20, for Forcible Entry.

Ruling of the MeTC: The MeTC Manila ruled against respondent, opining that, by
virtue of the expiration of PNBs lease contract, respondent lost its right to possess
said property. Concomitantly, as respondents right thereto was intertwined with
that of PNB, the same right also vanished.

Ruling of the RTC: On 12 July 2004, the RTC Manila, in Respondents Forcible Entry
Case, reversed the MeTC decision and ordered petitioner to vacate the subject
property. It ruled that despite the take over by the LMB, respondent was allowed to
continue its business and possession of the disputed landholding. Hence, it was
respondent who had prior, actual and physical possession of the property and had a
better right over it.

In the meantime, on 15 May 2005, without waiting for the result of Respondents
Forcible Entry Case (CA-G.R. SP No. 86478) pending before the Court of Appeals,
petitioner filed an Unlawful Detainer case (Petitioners Unlawful Detainer Case)
against respondent before the MeTC Manila, Branch 15, where it was docketed as
Civil Case No. 00000004-CV. In her complaint, petitioner made use of the same facts
as in CA-G.R. SP No. 86478.

Ruling of the CA: The Court of Appeals dismissed CA-G.R. SP No. 86478 on the
ground of forum shopping and for lack of merit.

ISSUE. Did the petitioner commit forum shopping?

RULING. Yes, the petitioner committed forum shopping. Forum shopping is a


deplorable practice of litigants consisting of resorting to two different fora for the
purpose of obtaining the same relief, to increase the chances of obtaining a
favorable judgment. What is pivotal to the determination of whether forum
shopping exists or not is the vexation caused to the courts and the party-litigants by
a person who asks appellate courts and/or administrative entities to rule on the

136
same related causes and/or to grant the same or substantially the same relief, in the
process creating the possibility of conflicting decisions by the different courts or
fora upon the same issues.

The test for determining the existence of forum shopping is whether the elements of
litis pendentia are present, or whether a final judgment in one case amounts to res
judicata in another. Thus, there is forum shopping when the following elements are
present: (a) identity of parties, or at least such parties as represent the same
interests in both actions; (b) identity of rights asserted and reliefs prayed for, the
relief being founded on the same facts; and (c) the identity of the two preceding
particulars, such that any judgment rendered in the other action will, regardless of
which party is successful, amount to res judicata in the action under consideration.
Said requisites are also constitutive of the requisites for auter action pendant or lis
pendens.

In the instant case, the first element of forum shopping is present. The parties to CA-
G.R. SP No. 86478 and Petitioners Unlawful Detainer Case are the same. As to the
second element, it must be stressed that in ejectment cases, either in unlawful
detainer or in forcible entry cases, the only issue to be resolved is the question of
who is entitled to the physical or material possession of the premises or possession
de facto. Thus, these are summary proceedings intended to provide an expeditious
means of protecting actual possession or right of possession of property. Title is not
involved; that is why it is a special civil action with a special procedure. Here, the
rights asserted in both cases are also identical, namely, the right of possession over
the subject property. In fact, in the Unlawful Detainer case, petitioners cause of
action was based on her alleged superior right over the property in question as a
lessee thereof, pursuant to the provisional permit from the LMB, as against
respondents allegedly expired sub-lease contract with the National Government.
This is the very same assertion of petitioner and the contentious fact involved in CA-
G.R. SP No. 86478 (Respondents Forcible Entry Case). As the issues in both cases
refer singularly to the right of material possession over the disputed property, then
an adjudication in Repondents Forcible Entry Case constitutes an adjudication of
Petitioners Unlawful Detainer Case, such that the latter court would be bound
thereby and could not render a contrary ruling on the very same issue.

WHEREFORE, premises considered, the instant petition is DENIED.

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Section 3
Right to Accession

(1) Arriola v. Arriola


G.R. No. 177703
28 January 2008

FACTS. Fidel Arriola died and is survived by his legal heirs, John Nabor Arriola
(respondent), his son with his first wife, and Vilma G. Arriola, his second wife and
his other son, Anthony Ronald Arriola (petitioners).

On 16 February 2004, the Regional Trial Court (RTC) rendered a decision ordering
the partition of the parcel of land covered by Transfer Certificate Title (TCT) No.
383714 (84191) left by the decedent Fidel S. Arriola by and among his heirs John
Nabor C. Arriola, Vilma G. Arriola and Anthony Ronald G. Arriola in equal shares of
one-third (1/3) each without prejudice to the rights of creditors or mortgagees
thereon, if any.

However, the parties failed to agree on how to divide the above mentioned property
and so the respondent proposed to sell it though public auction. The petitioners
initially agreed but refused to include in the auction the house standing on the
subject land. The respondent then filed an Urgent Manifestation and Motion for
Contempt of Court but was denied by the Regional Trial Court (RTC) for lack of
merit.

When a motion of reconsideration was still denied by the RTC, the respondent
elevated the case to the Court of Appeals (CA) with a petition for certiorari and
prayed that he be allowed to push through with the auction of the subject land
including the house built on it. The CA granted the petition and ordered the public
auction sale of the subject lot including the house built on it. Petitioners filed a
motion for reconsideration but the CA denied the said motion.

ISSUE. Can the subject house be separated from the land partition?

RULING. YES. The Supreme Court agree that the subject house is covered by the
judgment of partition but in view of the suspended proscription imposed under
Article 159 of the Family Code, the subject house immediately partitioned to the
heirs. Furthermore, the Family Code provides:

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Article 152. The family home, constituted jointly by the husband and the
wife or by an unmarried head of a family, is the dwelling house where they
and their family reside, and the land on which it is situated.

Article 153. The family home is deemed constituted on a house and lot from
the time it is occupied as a family residence. From the time of its constitution
and so long as any of its beneficiaries actually resides therein, the family
home continues to be such and is exempt from execution, forced sale or
attachment except as hereinafter provided and to the extent of the value
allowed by law.

Thus, applying these concepts, the subject house as well as the specific portion of
the subject land on which it stands is deemed constituted as a family home by the
deceased and petitioner Vilma from the moment they began occupying the same as
a family residence 20 years back.

The family home shall continue despite the death of one or both spouses or of the
unmarried head of the family for a period of ten years or for as long as there is a
minor beneficiary, and the heirs cannot partition the same unless the court finds
compelling reasons therefor. (Article 159, Family Code) This rule shall apply
regardless of whoever owns the property or constituted the family home.

(2) Villasi v. Garcia


G.R. No. 190106
15 January 2014

In cases where there is a clear and convincing evidence to prove that the principal and
the accessory are not owned by one and the same person or entity, the presumption
shall not be applied and the actual ownership shall be upheld.

FACTS. Magdalena T. Villasi engaged the services of Fil-Garcia Construction, Inc.


(FGCI) to construct a seven-storey condominium building in Quezon City. For failure
of Villasi to fully pay the contract price despite several demands, FGCI initiated a
suit for collection of sum of money before the Regional Trial Court (RTC) of Quezon
City. FGCI prayed, for the payment of the amount of 2,865,000.00, representing the
unpaid accomplishment billings.

Villasi filed an answer specifically denying the material allegations of the complaint.
Contending that FGCI has no cause of action against her, Villasi averred that she

139
delivered the total amount of 7,490,325.10 to FGCI but the latter accomplished
only 28% of the project.

The RTC rendered a Decision in FGCIs favor. While the trial court brushed aside the
allegation of Villasi that an excess payment was made, it upheld the claim of FGCI to
the unpaid amount of the contract price.

The Court of Appeals (CA) reversed the disquisition of the RTC. The appellate court
ruled that an overpayment was made by Villasi and thereby directed FGCI to return
the amount that was paid in excess.

To enforce her right as prevailing party, Villasi filed a Motion for Execution, which
was favorably acted upon by the RTC. A Writ of Execution was issued, commanding
the Sheriff to execute and make effective the 20 November 2000 Decision of the CA.

The sheriff levied on a building located at No. 140 Kalayaan Avenue, Quezon City.
While the building was declared for taxation purposes in the name of FGCI, the lots
in which it was erected were registered in the names of the Spouses Filomeno
Garcia and Ermelinda Halili-Garcia (Spouses Garcia).

The Spouses Garcia filed an Affidavit of Third Party Claim and a Motion to Set Aside
Notice of Sale on Execution, claiming that they are the lawful owners of the property
which was erroneously levied upon by the sheriff. To persuade the court a quo to
grant their motion, the Spouses Garcia argued that the building covered by the levy
was mistakenly assessed by the City Assessor in the name of FGCI. The motion was
opposed by Villasi who insisted that its ownership belongs to FGCI and not to the
Spouses Garcia as shown by the tax declaration.

ISSUE. Can the general rule on accession can be applied in the case at bar?

RULING. NO. While it is a hornbook doctrine that the accessory follows the
principal, that is, the ownership of the property gives the right by accession to
everything which is produced thereby, or which is incorporated or attached thereto,
either naturally or artificially, such rule is not without exception. In cases where
there is a clear and convincing evidence to prove that the principal and the
accessory are not owned by one and the same person or entity, the presumption
shall not be applied and the actual ownership shall be upheld. In a number of cases,
the Court recognized the separate ownership of the land from the building and
brushed aside the rule that accessory follows the principal.

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The rule on accession is not an iron-clad dictum. On instances where this Court was
confronted with cases requiring judicial determination of the ownership of the
building separate from the lot, it never hesitated to disregard such rule. The case at
bar is of similar import. When there are factual and evidentiary evidence to prove
that the building and the lot on which it stands are owned by different persons, they
shall be treated separately. As such, the building or the lot, as the case may be, can
be made liable to answer for the obligation of its respective owner.

Subsection 1
Accession Discreta

(3) Republic v. Holy Trinity Realty Development Corporation


G.R. No. 172410
14 April 2008

Interest earned in an expropriated account does not automatically accrue to the


expropriator.

FACTS. On 29 December 2000, petitioner Republic of the Philippines, represented


by the Toll Regulatory Board (TRB), filed with the RTC a Consolidated Complaint for
Expropriation against landowners whose properties would be affected by the
construction, rehabilitation and expansion of the North Luzon Expressway.
Respondent Holy Trinity Realty and Development Corporation (HTRDC) was one of
the affected landowners. On 18 March 2002, TRB filed an Urgent Ex-Parte Motion
for the issuance of a Writ of Possession, manifesting that it deposited a sufficient
amount to cover the payment of 100% of the zonal value of the affected properties,
in the total amount of 28,406,700.00, with the Land Bank of the Philippines, South
Harbor Branch (LBP-South Harbor), an authorized government depository. TRB
maintained that since it had already complied with the provisions of Section 4 of
Republic Act No. 8974 in relation to Section 2 of Rule 67 of the Rules of Court, the
issuance of the writ of possession becomes ministerial on the part of the RTC.

The Regional Trial Court issued, on 19 March 2002, an Order for the Issuance of a
Writ of Possession, as well as the Writ of Possession itself. HTRDC thereafter moved
for the reconsideration of the 19 March 2002 Order of the RTC. On 7 October 2002,
the Sheriff filed with the RTC a Report on Writ of Possession stating, among other
things, that since none of the landowners voluntarily vacated the properties subject
of the expropriation proceedings, the assistance of the Philippine National Police

141
(PNP) would be necessary in implementing the Writ of Possession. Accordingly,
TRB, through the Office of the Solicitor General (OSG), filed with the RTC an
Omnibus Motion praying for an Order directing the PNP to assist the Sheriff in the
implementation of the Writ of Possession. On 15 November 2002, the RTC issued an
Order directing the landowners to file their comment on TRBs Omnibus Motion.

On 3 March 2003, HTRDC filed with the RTC a Motion to Withdraw Deposit, praying
that the respondent or its duly authorized representative be allowed to withdraw
the amount of 22,968,000.00, out of TRBs advance deposit of P28,406,700.00 with
LBP-South Harbor, including the interest which accrued thereon. Acting on said
motion, the RTC issued an Order dated 21 April 2003, directing the manager of LBP-
South Harbor to release in favor of HTRDC the amount of 22,968,000.00 since the
latter already proved its absolute ownership over the subject properties and paid
the taxes due thereon to the government. According to the RTC, the issue however
on the interest earned by the amount deposited in the bank, if there is any, should
still be threshed out.

On 11 March 2004, the RTC issued an Order resolving as follows the issue of
ownership of the interest that had accrued on the amount deposited by DPWH in its
expropriation current account with LBP-South Harbor. On 7 February 2005, the RTC
likewise granted TRBs Motion for Reconsideration. The RTC ruled that the issue as
to whether or not HTRDC is entitled to payment of interest should be ventilated
before the Board of Commissioners which will be created later for the
determination of just compensation.

HTRDC sought recourse with the Court of Appeals (CA) by filing a Petition for
Certiorari, docketed as CA-G.R. SP No. 90981. In its Decision, promulgated on 21
April 2006, the Court of Appeals vacated the Orders dated 7 February 2005 and 16
May 2005 of the RTC, and reinstated the Order dated 11 March 2004 of the said trial
court wherein it ruled that the interest which accrued on the amount deposited in
the expropriation account belongs to HTRDC by virtue of accession.

ISSUE. Was the CA correct in holding that the interest earned by the deposited
amount in the expropriation account would accrue to HRTDC by virtue of accession?

RULING. NO. There is no question that the proceedings in this case deal with the
expropriation of properties intended for a national government infrastructure
project. Therefore, the RTC correctly applied the procedure laid out in Republic Act
No. 8974, by requiring the deposit of the amount equivalent to 100% of the zonal
value of the properties sought to be expropriated before the issuance of a writ of

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possession in favor of the Republic. Since the CA found that the HTRDC is the owner
of the deposited amount, then the latter should also be entitled to the interest which
accrued thereon. The critical factor in the different modes of effecting delivery
which gives legal effect to the act is the actual intention to deliver on the part of the
party making such delivery. The intention of the TRB in depositing such amount
through DPWH was clearly to comply with the requirement of immediate payment
in Republic Act No. 8974, so that it could already secure a writ of possession over
the properties subject of the expropriation and commence implementation of the
project. In fact, TRB did not object to HTRDCs Motion to Withdraw Deposit with the
RTC, for as long as HTRDC shows (1) that the property is free from any lien or
encumbrance and (2) that respondent is the absolute owner thereof. A close
scrutiny of TRBs arguments would further reveal that it does not directly challenge
the CA determinative pronouncement that the interest earned by the amount
deposited in the expropriation account accrues to HTRDC by virtue of accession.
TRB only asserts that HTRDC is entitled only to an amount equivalent to the zonal
value of the expropriated property, nothing more and nothing less. Considering that
the expropriation account is in the name of DPWH, then, DPWH should at most be
deemed as the trustee of the amounts deposited in the said accounts irrefragably
intended as initial payment for the landowners of the properties subject of the
expropriation, until said landowners are allowed by the RTC to withdraw the same.
TRB does not object to HTRDCs withdrawal of the amount of 22,968,000.00 from
the expropriation account, provided that it is able to show (1) that the property is
free from any lien or encumbrance and (2) that it is the absolute owner thereof. The
said conditions do not put in abeyance the constructive delivery of the said amount
to HTRDC pending the latters compliance therewith. Article 1187 of the Civil Code
provides that the effects of a conditional obligation to give, once the condition has
been fulfilled, shall retroact to the day of the constitution of the obligation. Hence,
when HTRDC complied with the given conditions, as determined by the RTC in its
Order dated 21 April 2003, the effects of the constructive delivery retroacted to the
actual date of the deposit of the amount in the expropriation account of DPWH.

Subsection 2
Ownership as to Fruits

(4) Equatorial Realty Development, Inc. v. Mayfair Theater, Inc.


G.R. No. 133879
21 November 2001

143
Where there is bad faith and no delivery, theres no entitlement to the fruits.

FACTS. Carmelo & Bauermann, Inc. used to own a parcel of land, together with
two-storey buildings constructed thereon. On 1 June 1967 and 31 March 1969,
Carmelo entered into two Contract of Lease with Mayfair Theater Inc. covering a
portion of the second floor and mezzanine, and the two store spaces on the ground
floor and mezzanine of the two-storey building for a period of 20 years which
respondent used as a movie house. Both leases contained a provision granting
Mayfair a right of first refusal to purchase the subject properties. However, within
the 20-year-lease term, the subject properties were sold by Carmelo to Equatorial
Realty Development, Inc. for the total sum of 11,300,000, without their first being
offered to Mayfair.

As a result of the sale of the subject properties to Equatorial, Mayfair filed a


complaint. The Court rendered it decision in its mother case, Equatorial Realty
Development, Inc. & Carmelo & Bauermann, Inc. v. Mayfair Theater, Inc. (G.R. No.
106063, 21 November 1996), stating that the Deed of Absolute Sale between
petitioners Equatorial Realty Development, Inc. and Carmelo & Bauermann, Inc. is
hereby deemed rescinded; Carmelo & Bauermann is ordered to allow Mayfair
Theater, Inc. to buy the aforesaid lots for 11,300,000. The foregoing Decision of the
Court became final and executory.

Meanwhile, on 18 September 1997, Equatorial filed with the Regional Trial Court
(RTC) an action for the collection of a sum of money against Mayfair, claiming
payment of rentals or reasonable compensation for the defendant's use of the
subject premises after its lease contracts had expired. Equatorial claimed that it was
the owner of the subject property and could thus enjoy the fruits or rentals by
reason of the Contract of Sale it entered with Carmelo. However, the RTC dismissed
the complaint, holding that the rescission of the Deed of Absolute Sale in the mother
case did not confer on Equatorial any vested or residual proprietary rights.

ISSUE. Is Equatorial entitled to back rentals?

RULING. NO. Equatorial is not entitled to back rentals for the patent failure to
deliver the property to it and petitioner's bad faith.

No right of ownership was transferred from Carmelo to Equatorial in view of a


patent failure to deliver the property to the buyer. It is clear that petitioner never
took actual control and possession of the property sold, in view of respondent's
timely objection to the sale and the continued actual possession of the property.

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It has been held that the execution of a contract of sale, as a form of constructive
delivery, is a legal fiction. It holds true only when there is no impediment that may
prevent the passing of the property from the hands of the vendor into those of the
vendee. When there is such impediment, fiction yields to reality the delivery has
not been effected. Hence, respondent's opposition to the transfer of the property, by
way of sale to Equatorial, was a legally sufficient impediment that effectively
prevented the passing of the property into the latter's hands.

Furthermore, assuming for the sake of argument that there was valid delivery,
petitioner is not entitled to any benefits from the "rescinded" Deed of Absolute Sale
because of its bad faith.

In the mother case, the Court categorically denied the payment of interest, a fruit of
ownership. By the same token, rentals, another fruit of ownership, cannot be
granted without mocking this Court's En Banc Decision, which has long become
final.

Subsection 3
Accession Industrial

(5) Torbella v. Rosario


G.R. No. 140528
7 December 2012

When both parties acted in bad faith, both shall be treated their rights as though acted
in good faith. The landowner has the choice between: (1) appropriating the building
by paying the proper indemnity; or (2) obliging the builder to pay the price of the land.
The owner must choose only one.

FACTS. The controversy began with a parcel of land, with an area of 374 square
meters, located in Urdaneta City, Pangasinan (Lot No. 356-A). It was originally under
the name of Marta Semilla, married to Eugenio Torbela. Upon the deaths of the
spouses Torbela, Lot No. 356-A was adjudicated in equal shares among their
children, Maria Torbela, Pedro Torbela, Eufrosina Torbela Rosario, Leonila Torbela
Tamin, Fernando Torbela, Dolores Torbela Tablada, Leonora Torbela Agustin, and
Severina Torbela Ildefonso (Torbela siblings) by virtue of a Deed of Extrajudicial
Partition. Subsequently, the Torbela siblings executed a Deed of Absolute Quitclaim
over Lot No. 356-A in favor of Dr. Andres T. Rosario, the son of Eufrosina and

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nephew of other Torbela siblings. The Deed states that for and in consideration of
9, the Torbela siblings transfer and convey unto the said Andres T. Rosario, that
undivided portion of 374 square meters of that parcel of land embraced in Original
Certificate of Title No. 16676. The OCT No. 16676 then, was partially canceled TCT
No. 52751was issued in Dr. Rosarios name covering the said property.

On 28 December 1964, another Deed of Absolute Quitclaim was executed by Dr.


Rosario which provides the acknowledgement that he only borrowed Lot No. 356-A
from the Torbela siblings and was already returning the same to the latter for P1.00.
The aforequoted Deed was notarized, but was not immediately annotated on TCT
No. 52751.

On 21 February 1965, Dr. Rosario obtained a loan from the Development Bank of
the Philippines (DBP) in the sum of 70,200, secured by a mortgage constituted on
Lot No. 356-A. The same was annotated on TCT No. 52751 Dr. Rosario used the
proceeds of the loan for the construction of improvements on Lot No. 356-A.

On 16 May 1967, Cornelio T. Tosino executed an Affidavit of Adverse Claim, on


behalf of the Torbela siblings. In the Affidavit, he contends that Dr. Rosario
quitclaimed his rights in favor of the former owners by virtue of a Deed of Absolute
Quitclaim.

Eventually, The construction of a four-storey building on Lot No. 356-A was


completed. The building was initially used as a hospital, but was later converted to a
commercial building. Part of the building was leased to PT&T; and the rest to Mrs.
Andrea Rosario-Haduca, Dr. Rosarios sister, who operated the Rose Inn Hotel and
Restaurant. Thereafter, Dr. Rosario was able to fully pay his loan from DBP.

Sometime in 1979-1981. Dr. Rosario acquired another loan from the Philippine
National Bank (PNB). The loan was secured by mortgages constituted along others,
Lot No. 356-A in Dr. Rosarios name.

On 8 December 1981, Dr. Rosario and his wife, Duque-Rosario (spouses Rosario),
acquired a third loan from Banco Filipino Savings and Mortgage Bank. To secure
said loan, the spouses Rosario again constituted mortgages on Lot No. 356-A.
Because Banco Filipino paid the balance of Dr. Rosarios loan from Philippine
National Bank, the mortgage on Lot No. 356-A in favor of PNB was cancelled per
Entry No. 533478 on TCT No. 52751. However, spouses Rosario failed to pay the
loan. During the public auction on 2 April 1987, Banco Filipino was the lone bidder
for the three foreclosed properties.

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On 13 February 1986, The Torbelas filed before the Regional Trial Court (RTC) of
Urdaneta, Pangasinan, a Complaint for recovery of ownership and possession of Lot
No. 356-A, plus damages, against the spouses Rosario, and later, impleaded Banco
Filipino. They also claim that they have the rights over rents of the building because
they are the land owners. They showed as proof the deed of absolute quitclaim
presented executed by Rosario himself. Torbela siblings tried to redeem Lot No.
356-A from Banco Filipino, but their efforts were unsuccessful. Upon the expiration
of the one-year redemption period in April 1988.

PETITIONER. The Torbela Siblings have the rights over the rents the spouses they
received from tenants of Rose Inn Building from 14 May 1988 for they are the
owners of the Subject land and they only allowed Dr. Rosario to register Lot No.
356-A in his name so he could obtain a loan from DBP, using said parcel of land as
security, as evidenced by the Deed of Absolute quitclaim executed by Dr. Rosario.

RESPONDENT. Dr. Rosario must be the one who has the rights over the
improvements as well as the rental income collected from the tenants of Rose Inn
Building because he was the one who supervised and built the commercial building
on the Lot No. 356-A

ISSUE. Can Dr. Rosario, as the builder, have the rights over the improvements
(commercial building) built on the land owned by the Torbela siblings?

RULING. YES. The rules on accession shall govern the improvements on Lot No.
356-A and the rents thereof. The accessory follows the principal. The right of
accession is recognized under Article 440 of the Civil Code which states that the
ownership of property gives the right by accession to everything which is produced
thereby, or which is incorporated or attached thereto, either naturally or
artificially.

There is no question that Dr. Rosario is the builder of the improvements on Lot No.
356-A. When it comes to the improvements on Lot No. 356-A, both the Torbela
siblings (as landowners) and Dr. Rosario (as builder) are deemed in bad faith. The
Torbela siblings were aware of the construction of a building by Dr. Rosario on Lot
No. 356-A, while Dr. Rosario proceeded with the said construction despite his
knowledge that Lot No. 356-A belonged to the Torbela siblings. This is the case
contemplated under Article 453 of the Civil Code, which reads:

Article 453. If there was bad faith, not only on the part of the person who
built, planted or sowed on the land of another, but also on the part of the

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owner of such land, the rights of one and the other shall be the same as
though both had acted in good faith.

As contemplated in Article 453, when both parties acted in bad faith, both shall be
treated their rights as though acted in good faith, thus, finding the application of Art.
448 of the Civil Code (Article which governs the rules on accession when parties
acted in good faith) to the present case wherein it gives the landowner the choice
between: (1) appropriating the building by paying the proper indemnity; or (2)
obliging the builder to pay the price of the land. The owner must choose only one.

(6) Benedicto v. Villaflores


G.R. No. 185020
6 October 2010

A builder in good faith is entitled to full reimbursement for all the necessary and useful
expenses incurred; it also gives him right of retention until full reimbursement is made.

FACTS. Maria Villaflores (Maria) was the owner of Lot 2-A, in Poblacion,
Meycauayan, Bulacan, covered by Transfer Certificate of Title (TCT) No. T-84.761
(M). In 1980, Maria sold a portion of Lot 2-A to her nephew, respondent Antonio
Villaflores (Antonio). Antonio then took possession of the portion sold to him and
constructed a house thereon. Twelve (12) years later, or on 15 August 1992, Maria
executed in favor of Antonio a Kasulatan ng Bilihang Tuluyan covering the entire Lot
2-A. However, Antonio did not register the sale or pay the real property taxes for the
subject land.

On 31 August 1994, Maria sold the same Lot 2-A to Filomena, evidenced by a
Kasulatan ng Bilihang Tuluyan. Filomena registered the sale with the Registry of
Deeds of Meycauayan on 6 September 1994. Consequently, Transfer Certificate Title
(TCT) No. T-84.761 (M) in the name of Maria was cancelled and TCT No. T-208265
(M) was issued in the name of Filomena. Since then Filomena paid the real property
taxes for the subject parcel of land.

Filomena filed a case for accion publiciana with Cancellation of Notice of Adverse
Claim, Damages and Attorneys Fees against Antonio. Antonio traversed the
complaint, asserting absolute ownership over Lot 2-A. He alleged that he purchased
the subject property from Maria in 1980; and that he took possession of the same
and constructed his house thereon. He came to know of the sale in favor of Filomena

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only in 2000 when the latter demanded that he vacate the property. He averred that
Filomena was aware of the sale.

ISSUE. Is a builder on good faith entitled to reimbursement?

RULING. YES. The SC sustain the finding that Antonio is a builder in good faith.
Under Article 448, a landowner is given the option to either appropriate the
improvement as his own upon payment of the proper amount of indemnity, or sell
the land to the possessor in good faith. Relatedly, Article 546 provides that a builder
in good faith is entitled to full reimbursement for all the necessary and useful
expenses incurred; it also gives him right of retention until full reimbursement is
made.

The objective of Article 546 of the Civil Code is to administer justice between the
parties involved. In this regard, this Court had long ago stated in Rivera vs. Roman
Catholic Archbishop of Manila [40 Phil. 717 (1920)] that the said provision was
formulated in trying to adjust the rights of the owner and possessor in good faith of
a piece of land, to administer complete justice to both of them in such a way as
neither one nor the other may enrich himself of that which does not belong to him.
Guided by this precept, it is therefore the current market value of the improvements
which should be made the basis of reimbursement. A contrary ruling would unjustly
enrich the private respondents who would otherwise be allowed to acquire a highly
valued income-yielding four-unit apartment building for a measly amount.

Consequently, the parties should therefore be allowed to adduce evidence on the


present market value of the apartment building upon which the trial court should
base its finding as to the amount of reimbursement to be paid by the landowner. The
petition is denied.

(7) Briones v. Macabagdal


3 August 2010

FACTS. Respondent-spouses purchased from Vergon Realty Investments


Corporation Lot No. 2-R, a 325-square-meter land located in Vergonville Subdivision
No. 10 at Las Pias City, Metro Manila. On the other hand, petitioners are the owners
of Lot No. 2-S, which is adjacent to Lot No. 2-R.

Sometime in 1984, after obtaining the necessary building permit and the approval of
Vergon, petitioners constructed a house on Lot No. 2-R which they thought was Lot

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No. 2-S. After being informed of the mix up by Vergons manager, respondent-
spouses immediately demanded petitioners to demolish the house and vacate the
property. Petitioners, however, refused to heed their demand.

Thus, respondent-spouses filed an action to recover ownership and possession of


the said parcel of land with the Regional Trial Court (RTC) of Makati City. The RTC
ruled in favor of respondent-spouses and found that petitioners house was
undoubtedly built on Lot No. 2-R.

The Court of Appeals (CA) affirmed the RTCs finding that the lot upon which
petitioners built their house was not the one which Vergon sold to them. Based on
the documentary evidence, such as the titles of the two lots, the contracts to sell, and
the survey report made by the geodetic engineer, petitioners house was built on the
lot of the respondent-spouses. There was no basis to presume that the error was
Vergons fault. Also the warranty against eviction under Article 1548 of the Civil
Code was not applicable as there was no deprivation of property: the lot on which
petitioners built their house was not the lot sold to them by Vergon, which remained
vacant and ready for occupation. The CA further ruled that petitioners cannot use
the defense of allegedly being a purchaser in good faith for wrongful occupation of
land.

ISSUE. Whether or not the petitioners must not bear the damage alone

RULING. The builders, sowers or planters believe themselves to be owners of the


land or, at least, to have a claim of title thereto. 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. However,
even as the option lies with the landowner, the grant to him, nevertheless, is
preclusive. He must choose one. He cannot, for instance, compel the owner of the
building to remove the building from the land without first exercising either option.
It is only if the owner chooses to sell his land, and the builder or planter fails to
purchase it where its value is not more than the value of the improvements, that the
owner may remove the improvements from the land. The owner is entitled to such
remotion only when, after having chosen to sell his land, the other party fails to pay
for the same.

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(8) Barstowe Philippines Corporation v. Republic
G.R. No. 133110
28 March 2007

Where one of the parties is in good faith and the other is in bad faith, the party in good
faith may exercise two options: (1) recovery of the land and demand that demolition at
the expense of the party in bad faith; or (2) surrender the lad and just compel the party
in bad faith to reimburse the party in good faith for the purchase price paid.

FACTS. This case involves the conflicting titles to the same parcels of land (subject
lots) of petitioner Barstowe Philippines Corporation (BPC) and the respondent
Republic of the Philippines.

BPC traces its titles to the subject lots back to Servando Accibal (Servando) who was
supposedly issued a Transfer Certificates of Title (TCTs) over the subject lots.

Servando executed a Deed of Absolute Sale of the subject lots to his son Antonio
Accibal, with the concurrence of his other heirs. Despite his prior sale of the subject
lots to Antonio, Servando, by virtue of a Deed of Conveyance transferred/conveyed
the subject lots to BPC in exchange for subscription of 51% of the capital stock of
BPC. About a year after the death of Servando, Antonio executed another Deed of
Conveyance of the subject lots in favor of BPC in exchange for subscription of 2,450
shares of its capital stock.

Due to the fire that gutted the Office of the Quezon City Register of Deeds and
destroyed many certificates of title kept therein, Antonio sought the administrative
reconstitution of the original copies and owners duplicate copies with the Land
Registration Authority.

Quezon City Register of Deeds issued a new Transfer Certificate of Title (TCT) in
favor of BCP. Meanwhile, according to Republic, the subject lots were owned by First
Philippine Holdings Corporation (FPHC). Pursuant to a Deed of Sale, FPHC sold both
of the subject lots to the Republic. A TCT was issued in favor of Republic for both
subject lots.

Because of the fire that razed the Quezon City Registry of Deeds the original copies
were destroyed and the Republic applied for administrative reconstruction of such
titles. It was then that they came to know of the other party applying for the same
cause.

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While Civil Case was still pending before the Regional Trial Court (RTC), there were
two intervenors.

Gloria Accibal Rettoriano alleged that she was the only child of Basilia Accibal,
Servandos sister; the subject lots were inherited by Basilia, Servando, and their
other siblings from their parents Martin and Mauricia Accibal; upon her mothers
death, Gloria inherited and came into possession of a portion of the subject lots;
Servando, through fraudulent means, was able to secure TCTs over all the subject
lots, including Glorias portion therein; the inclusion of Glorias portion in the TCTs
of Servando and, later, in those of BPC, was done through fraud and gross bad faith;
and unless the TCTs of Servando and BPC are declared null and void, Gloria will be
deprived of her property without due process and just compensation.

BPC opposed Glorias intervention alleging that they entered into a Compromise
Agreement with BPC in which she waived and renounced any and all claims
whatsoever which she may have over the titles of BPC in consideration of the
payment by the latter.

The RTC found both found both the Republic and the BPC as buyers in good faith, it
held that the titles of BPC should prevail. The rationale was that the titles of BPC
were issued 5-6 years earlier than Republics.

Republic filed with the Court of Appeals (CA) a Petition for Certiorari and
Mandamus questioning the denial of its Notice of Appeal by the RTC in its Order on
the basis that the RTC Decision constitutes a compromise agreement, and is
immediately final and executory.

The CA issued a writ of preliminary injunction enjoining the RTC from implementing
and enforcing its Order until otherwise directed by the appellate court.

ISSUE. Does the BPC qualify as an innocent purchaser for value which acquired
valid titles to the subject lots, despite the fact that the titles of its predecessor-in-
interest were found to be forged and spurious?

RULING. NO. BPC did not acquire the subject lots in good faith and for value, and
its certificates of title cannot defeat those of the Republics. The Republic has better
titles to the subject lots being the purchaser thereof in good faith and for value from
FPHC.

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Certificates of title over portions of the subject lots, acquired by purchasers in good
faith and for value, from BPC, are valid and indefeasible, even as against the
certificates of title of the Republic. The Republic, however, is entitled to recover
from BPC the purchase price the Republic paid to FPHC for the said portions, plus
appropriate interests; and

As portions of the subject lots are still unsold and their corresponding certificates of
title remain in the name of BPC, the Republic may exercise two options: (1) It may
recover the said portions and demand that BPC demolish whatever improvements it
has made therein, so as to return the said portions to their former condition, at the
expense of BPC. In such a case, certificates of title of BPC over the said portions shall
be cancelled and new ones issued in the name of the Republic; or (2) it may
surrender the said portions to BPC and just compel BPC to reimburse the Republic
for the purchase price the Republic paid to FPHC for the said portions, plus
appropriate interest.

(9) Nuguid v. Court of Appeals


G.R. No. 151815
23 February 2005

A builder in good faith is entitled to full reimbursement for all the necessary and useful
expenses incurred; it also gives him right of retention until full reimbursement is made.

FACTS. Pedro P. Pecson owned a commercial lot located at 27 Kamias Road,


Quezon City, on which he built a four-door two-storey apartment building. For
failure to pay realty taxes, the lot was sold at public auction by the City Treasurer of
Quezon City to Mamerto Nepomuceno, who in turn sold it for 103,000 to the
spouses Juan and Erlinda Nuguid.

Pecson challenged the validity of the auction sale before the RTC. The trail court
upheld the spouses' title but declared that the four-door two-storey apartment
building was not included in the auction sale. This was affirmed in toto by the Court
of Appeals. By virtue of the Entry of Judgment, the Nuguids became the uncontested
owners of the 256 square meter commercial lot. As a result, the Nuguid spouses
moved for delivery of possession of the lot and the apartment building. Frustrated
by this turn of events, Pecson filed a Petition for Review.

The parties arrived at a compromise agreement that the value of the said
improvement/building is 400,000 The Court notes that the plaintiff has already

153
received 300,000. However, when defendant was ready to pay the balance of
100,000, the plaintiff now insists that there should be a rental to be paid by
defendants. After conducting a hearing, the lower directed the spouses to pay the
sum of 1,344,000 as reimbursement of the unrealized income of Pecson for the
period beginning 22 November 1993 up to December 1997.

ISSUE. Is Pedro Pecson entitled of the rentals?

RULING. YES. Under Article 448, the landowner is given the option, either to
appropriate the improvement as his own upon payment of the proper amount of
indemnity or to sell the land to the possessor in good faith. Relatedly, Article 546
provides that a builder in good faith is entitled to full reimbursement for all the
necessary and useful expenses incurred; it also gives him right of retention until full
reimbursement is made.

Given the circumstances of the instant case where the builder in good faith has been
clearly denied his right of retention for almost half a decade. The petitioners had
reaped all the benefits from the improvement introduced by the respondent during
said period, without paying any amount to the latter as reimbursement for his
construction costs and expenses. They should account and pay for such benefits.
Respondent is clearly entitled to payment by virtue of his right of retention over the
said improvement.

The herein petitioners, Spouses Juan and Erlinda Nuguid, to account for the rental
income of the four-door two-storey apartment building from November 1993 until
December 1997, in the amount of 1,344,000, computed on the basis of Twenty-
eight Thousand (28,000) pesos monthly, for a period of 48 months. The instant
petition is denied.

(10) Philippine National Bank v. De Jesus


G.R. No. 149295
23 September 2003

A builder in good faith can, under the foregoing provisions, 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.

154
FACTS . On 10 June 1995, respondent filed a complaint against petitioner before
the Regional Trial Court (RTC) of Occidental Mindoro for recovery of ownership and
possession, with damages, over the questioned property. In his complaint,
respondent stated that he had acquired a parcel of land situated in Mamburao,
Occidental Mindoro, with an area of 1,144 square meters covered by Transfer
Certificate of Title (TCT) No. T-17197, and that on 26 March 1993, he had caused a
verification survey of the property and discovered that the northern portion of the
lot was being encroached upon by a building of petitioner to the extent of 124
square meters. Despite two letters of demand sent by respondent, petitioner failed
and refused to vacate the area.

Petitioner, in its answer, asserted that when it acquired the lot and the building
sometime in 1981 from then Mayor Bienvenido Ignacio, the encroachment already
was in existence and to remedy the situation, Mayor Ignacio offered to sell the area
in question (which then also belonged to Ignacio) to petitioner at 100 per square
meter which offer the latter claimed to have accepted. The sale, however, did not
materialize when, without the knowledge and consent of petitioner, Mayor Ignacio
later mortgaged the lot to the Development Bank of the Philippines.

The trial court decided the case in favor of respondent declaring him to be the
rightful owner of the disputed 124 square meter portion of the lot and ordering
petitioner to surrender possession of the property to respondent and to cause, at its
expense, the removal of any improvement thereon. The Court of Appeals (CA), on
appeal, sustained the trial court.

ISSUE. Is PNB a builder in bad faith over the encroached property?

RULING. YES. The RTC and the CA have both rejected the idea that petitioner can
be considered a builder in good faith. In the context that such term is used in
particular reference to Article 448, et seq., 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.

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

155
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.

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.

A builder in good faith can, under the foregoing provisions, 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 much 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.

Given the findings of both the trial court and the appellate court, it should be evident
enough that petitioner would fall much too short from its claim of good faith.
Evidently, petitioner was quite aware, and indeed advised, prior to its acquisition of
the land and building from Ignacio that a part of the building sold to it stood on the
land not covered by the land conveyed to it.

Equally significant is the fact that the building, constructed on the land by Ignacio,
has in actuality been part of the property transferred to petitioner. Article 448, of
the Civil Code refers to a piece of land whose ownership is claimed by two or more
parties, one of whom has built some works (or sown or planted something) and not
to a case where the owner of the land is the builder, sower, or planter who then later
loses ownership of the land by sale or otherwise for, elsewise stated, where the true

156
owner himself is the builder of works on his own land, the issue of good faith or bad
faith is entirely irrelevant.

(11) Evadel Realty Development Corporation v. Spouses Soriano


G.R. No. 144291
20 April 2001

FACTS. On 12 April 1996, the spouses Antero and Virginia Soriano (respondent
spouses), as sellers, entered into a Contract to Sell with Evadel Realty and
Development Corporation (petitioner), as buyer, over a parcel of land denominated
as Lot 5536-C of the Subdivision Plan of Lot 5536 covered by Transfer Certificate of
Title No. 125062 which was part of a huge tract of land known as the Imus Estate.
Upon payment of the first installment, petitioner introduced improvements thereon
and fenced off the property with concrete walls. Later, respondent spouses
discovered that the area fenced off by petitioner exceeded the area subject of the
contract to sell by 2,450 square meters. Upon verification by representatives of both
parties, the area encroached upon was denominated as Lot 5536-D-1 of the
subdivision plan of Lot 5536-D of Psd-04-092419 and was later on segregated from
the mother title and issued a new transfer certificate of title, TCT No. 769166, in the
name of respondent spouses.

RESPONDENT. Respondent spouses successively sent demand letters to petitioner


on February 14, March 7, and April 24, 1997, to vacate the encroached area.
Petitioner admitted receiving the demand letters but refused to vacate the said area.
Thus, on May 23, 1997, a complaint for accion reinvindicatoria was filed by
respondent spouses against petitioner with the Regional Trial Court, Branch 88 of
Cavite City.
Respondent spouses, on the other hand, maintain that there are no genuine issues of
fact in the present case in view of the admission by petitioner of (1) the existence of
the title over the subject property in the name of respondent spouses; and (2) its
encroachment on the northern side of sold Lot 5536-C which is the area in dispute.
It is claimed that such admissions are tantamount to an admission that respondents
have a rightful claim of ownership to the subject property warranting a summary
judgment in their favor.

PETITIONERS. In its Answer, petitioner admitted the encroachment but claimed


that it was a builder in good faith since it merely relied on the boundaries pointed
out by the representatives of respondent spouses. Petitioner also argued that there

157
was a novation of contract because of the encroachment made by the national road
on the property subject of the contract by 1,647 square meters.

ISSUE. Whether the trial court was in error in rendering summary judgment on
the case.

RULING. Applying these principles to the present case, we hold that the CA did not
commit any reversible error in affirming the summary judgment rendered by the
trial court. Hence, the instant petition must be denied.

The case at bar is one for accion reinvindicatoria which is an action to recover
ownership over real property. Respondent spouses (plaintiffs below) seek to
recover a certain portion of land with a total area of 2,450 square meters from
petitioner which portion was allegedly in excess of the total area of the property
actually sold by them to the latter. In a reinvindicatory action, the basic issue for
resolution is that of ownership and in the present case, the determination of
ownership of the subject property is hinged on the following questions of fact - first,
what was the total area of the lot sold to petitioner by respondent spouses as agreed
upon and embodied in the contract to sell; and second, whether or not the area
being occupied by the petitioner is in excess of the land which it actually bought
from respondent spouses under the said contract.

With the foregoing admissions by petitioner, clearly, there is no genuine issue of fact
as to ownership of the subject property because the said admissions made by
petitioner in its Answer are tantamount to an admission that respondent spouses
owned the property in question. The CA thus correctly affirmed the trial court as it
summarily resolved the issue of ownership of the subject property in favor of
respondent spouses.

Petitioners contention is untenable. As correctly pointed out by the trial court and
the CA, petitioner already admitted in its Amended Answer that the lot in dispute is
covered by TCT No. T-769166 of respondent spouses. With this admission,
petitioner can no longer claim that it was a builder in good faith. 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.[9] In this case, since petitioner, by its own admission,
had knowledge of respondent spouses title over the subject lot, it was clearly in bad
faith when it introduced improvements thereon.

Further, the contract to sell between petitioner and respondent spouses, the
genuineness and due execution thereof was admitted by petitioner, clearly

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delineated the metes and bounds of the lot subject thereof. Attached to the said
contract was a graphic illustration of the lot purchased by petitioner including a
technical description thereof. Petitioner, as a real estate developer, is presumed to
be experienced in its business and ought to have sufficient technical expertise to
correctly determine the metes and bounds of the lands it acquires. Despite this,
petitioner still introduced improvements on the lot not covered by the contract to
sell. Petitioners bad faith had been duly established by the pleadings and there was
thus no need to further conduct any trial on the matter.

In the instant case, there was no express novation because the second agreement
was not even put in writing. Neither was there implied novation since it was not
shown that the two agreements were materially and substantially incompatible with
each other. We quote with approval the following findings of the trial court:

Since the alleged agreement between the plaintiffs [herein respondents] and
defendant [herein petitioner] is not in writing and the alleged agreement pertains to
the novation of the conditions of the contract to sell of the parcel of land subject of
the instant litigation, ipso facto, novation is not applicable in this case since, as
stated above, novation must be clearly proven by the proponent thereof and the
defendant in this case is clearly barred by the Statute of Frauds from proving its
claim.

(12) Technogas Phil. v. Court of Appeals


268 SCRA 5

FACTS. 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 4531-A of Lot 4531 of the
Cadastral Survey of Paraaque, Metro Manila. that said land was purchased by
petitioner 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. Portions of the buildings and wall bought by petitioner together
with the land from Pariz Industries are occupying a portion of defendants adjoining
land. Upon learning of the encroachment or occupation by its buildings and wall of a
portion of defendants land, petitioner offered to buy from defendant that particular
portion of defendants land occupied by portions of its buildings and wall with an
area of 770 square meters, more or less, but defendant, however, refused the offer.
In 1973, the parties entered into a private agreement before a certain Col. Rosales in

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Malacaang, wherein petitioner 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 petitioners wall. Petitioner filed in Court a formal proposal for settlement of the
case but said proposal, however, was ignored by defendant.

After trial on the merits, the Regional Trial Court rendered a decision in favor of
petitioner. Appeal was duly interposed with respondent Court, which as previously
stated, reversed and set aside the decision of the RTC. Hence, this petition.

ISSUE. Is petitioner a builder in good faith?

RULING. YES. Article 527 of the Civil Code presumes good faith, and since no proof
exists to show that the encroachment over a narrow, needle-shaped portion of
private respondents land was done in bad faith by the builder of the encroaching
structures, the latter should be presumed to have built them in good faith. It is
presumed that possession continues to be enjoyed in the same character in which it
was acquired, until the contrary is proved. 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. Hence, such good faith, by law, passed on to Parizs successor, petitioner
in this case. Further, where 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. 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. The good faith ceases from the moment defects in the title are made
known to the possessor, by extraneous evidence or by suit for recovery of the
property by the true owner.

In view of the good faith of both petitioner and private respondent, their rights and
obligations are to be governed by Art. 448. 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.

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(13) Programme, Inc. v. Province of Bataan
G.R. No. 144635
26 June 2006

The benefits granted to a possessor in good faith cannot be maintained by the lessee
against the lessor, otherwise, it would always be in the power of a tenant to improve
his landlord out of his property.

FACTS. Bataan Shipyard and Engineering Co., Inc. (BASECO) was the owner of
Piazza Hotel and Mariveles Lodge, both located in Mariveles, Bataan. On May 14,
1986, BASECO granted petitioner a contract of lease over Piazza Hotel at a monthly
rental of P6,500 for three years, i.e., from January 1, 1986 to January 1, 1989, subject
to renewal by mutual agreement of the parties. After the expiration of the three-year
lease period, petitioner was allowed to continue operating the hotel on monthly
extensions of the lease.

In April 1989, however, the Presidential Commission on Good Government (PCGG)


issued a sequestration order against BASECO pursuant to Executive Order No. 1 of
former President Corazon C. Aquino. Among the properties provisionally seized and
taken over was the lot on which Piazza Hotel stood. Piazza Hotel was sold at a public
auction for non-payment of taxes to respondent Province of Bataan. The title of the
property was transferred to respondent. BASECOs Transfer Certificate of Title (TCT)
No. T-59631 was cancelled and a new one, TCT No. T-128456, was issued to the
Province of Bataan.
On July 21, 1989, petitioner filed a complaint for preliminary injunction and
collection of sum of money against BASECO. Respondent filed a complaint-in-
intervention praying, inter alia, that petitioner be ordered to vacate Piazza Hotel
and Mariveles Lodge for lack of legal interest. The parties agreed that the case be
tried on the sole issue of whether respondent province, as complainant-intervenor,
was the legitimate owner of the Piazza Hotel and Mariveles Lodge. The trial court
rendered judgment in favor of respondent and was affirmed by the CA.

ISSUE. Is the respondent the legitimate owner of the Piazza Hotel and Mariveles
Lodge?

RULING. Yes. The evidence clearly established respondents ownership of Piazza


Hotel. First, the title of the land on which Piazza Hotel stands was in the name of
respondent. Second, Tax Declaration No. 12782 was in the name of respondent as
owner of Piazza Hotel. On the other hand, petitioners assertion that Piazza Hotel
was constructed at (its) expense found no support in the records. Neither did any

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document or testimony prove this claim. Petitioner was doubtlessly just a lessee. In
the lease contract annexed to the complaint, petitioner in fact admitted BASECOs
ownership then of the subject property.

Furthermore, petitioners reference to Article 448 of the Civil Code to justify its
supposed rights as possessor in good faith was erroneous. For emphasis:

The benefits granted to a possessor in good faith cannot be maintained by the lessee
against the lessor because, such benefits are intended to apply only to a case where
one builds or sows or plants on land which he believes himself to have a claim of
title and not to lands wherein ones only interest is that of a tenant under a rental
contract, otherwise, it would always be in the power of a tenant to improve his
landlord out of his property. Besides, as between lessor and lessee, the Code applies
specific provisions designed to cover their rights.

Hence, the lessee cannot claim reimbursement, as a matter of right, for useful
improvements he has made on the property, nor can he assert a right of retention
until reimbursed. His only remedy is to remove the improvement if the lessor does
not choose to pay its value; but the court cannot give him the right to buy the land.

The ruling of the CA was affirmed.

(14) Sulo sa Nayon, Inc. v. Nayong Pilipino Foundation


G.R. No. 170923
20 January 2009

FACTS. Respondent Nayong Pilipino Foundation, a government-owned and


controlled corporation, is the owner of a parcel of land in Pasay City, known as the
Nayong Pilipino Complex. Petitioner Philippine Village Hotel, Inc. (PVHI), formerly
called Sulo sa Nayon, Inc., is a domestic corporation.

June 1, 1975, respondent leased a portion of the Nayong Pilipino Complex, to


petitioner Sulo sa Nayon, Inc. for the construction and operation of a hotel building.
The lease was for an initial period of 21 years.

March 7, 1995, petitioners sent respondent a letter notifying the latter of their
intention to renew the contract for another 25 years. The parties agreed to the
renewal of the contract for another 25 years. Petitioner PVHI was then bound to pay
the monthly rental on a per square meter basis at the rate of 20.00 per square

162
meter, which shall be subject to an increase of 20% at the end of every 3-year
period.

January 2001, petitioners defaulted in the payment of their monthly rental. On


September 5, 2001, respondent filed a complaint for unlawful detainer.

The MeTC rendered its decision in favor of respondent. It found that defendants
defaulted in the payment of their rentals and ordered them to vacate the premises
and pay the rentals.

The RTC modified the trial courts decision, it ordered that the appellee desist
and/or refrain from doing acts in the furtherance or exercise of its rights and
demolition against appellants.

Respondent appealed to the CA which held that the RTC erroneously applied the
rules on accession and its classification of petitioners are builders on good faith.

ISSUE. Whether the rules on accession apply to the case.

RULING. Petitioners insist is that because of the improvements, which are of


substantial value, which they have introduced on the leased premises with the
permission of respondent, they should be considered builders in good faith who
have the right to retain possession of the property until reimbursement by
respondent.

The Court agreed with the CA that introduction of valuable improvements on the
leased premises does not give the petitioners the right of retention and
reimbursement which rightfully belongs to a builder in good faith. The Court
reiterated the doctrine that a lessee is neither a builder in good faith nor in bad faith
that would call for the application of Articles 448 and 546 of the Civil Code. The
rights of the lessee is governed by Article 1678.

Further In the case at bar, petitioners have no adverse claim or title to the land. In
fact, as lessees, they recognize that the respondent is the owner of the land. The
Court quoted from Senator Tolentino that the article is intended to apply only to a
case where one builds, plants, or sows on land in which he believes himself to have a
claim of title, and not to lands where the only interest of the builder, planter or
sower is that of a holder, such as a tenant. Wherefore the petition is DENIED.

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(15) Cheng v. Spouses Donini
G.R. No. 167017
22 June 2009

To be entitled to full reimbursement for useful improvements introduced on the


property, one must be considered a builder in good faith.

FACTS. The subject of this petition is an oral lease agreement that went sour.
Petitioner Serafin Cheng agreed to lease his property located at Mandaluyong City to
respondents, Spouses Vittorio and Ma. Helen Donini, who intended to put up a
restaurant thereon. They agreed to a monthly rental of P17,000, to commence in
December 1990. Respondents proceeded to introduce improvements in the
premises through the Interim Grant of Authority executed by petitioner.

However, before respondents' business could take off and before any final lease
agreement could be drafted and signed, the parties began to have serious
disagreements regarding its terms and conditions. Petitioner thus wrote
respondents on January 28, 1991, demanding payment of the deposit and rentals,
and signifying that he had no intention to continue with the agreement should
respondents fail to pay. Respondents, however, ignored petitioner's demand and
continued to occupy the premises until April 17, 1991.

Respondents then filed an action for specific performance and damages with a
prayer for the issuance of a writ of preliminary injunction in the Regional Trial
Court (RTC) of Pasig City. It prayed that petitioner be ordered to execute a written
lease contract for five years, deducting from the deposit and rent the cost of repairs
in the amount of P445,000, or to order petitioner to return their investment in the
amount of P964,000 and compensate for their unearned net income of P200,000
with interest, plus attorney's fees. Petitioner, in his answer, denied respondents'
claims.

RESPONDENT. They were possessors in good faith, hence, Articles 448 and 546 of
the Civil Code applied and they should be indemnified for the improvements
introduced on the leased premises. Respondents contend that petitioner was going
to benefit from these improvements.

RTC rendered its decision in favor of petitioner. The CA reversed the trial court
decision.

164
ISSUE. Did the CA err in ordering the petitioner to reimburse respondents the full
value of expenses for their alleged repairs and improvements of the leased
premises?

RULING. YES. Contrary to respondents' position, Articles 448 and 546 of the Civil
Code did not apply. Under these provisions, to be entitled to full reimbursement for
useful improvements introduced on the property, respondents must be considered
builders in good faith. A builder in good faith is one who is unaware of any flaw in
his title to the land at the time he builds on it. But respondents cannot be considered
possessors or builders in good faith. Being mere lessees, respondents knew that
their right to occupy the premises existed only for the duration of the lease.

The fact that petitioner will benefit from the improvements introduced by
respondents is of no moment. Respondents introduced these improvements at their
own risk as lessees. Respondents were not forced or obliged to splurge on the leased
premises as it was a matter of necessity as well as a business strategy. In fact, had
respondents only complied with their obligation to pay the deposit/rent, there
would have been no dispute to begin with. If they were able to shell out more than a
million pesos to improve the property, the P34,000 deposit demanded by petitioner
was a mere "drop in the bucket.

Petitioner is ordered to pay only the amount of P171,650.95 to respondents as


indemnity for the useful improvements.

(16) Spouses Jimenez v. Patricia, Inc.


G.R. No. 134651
18 September 2000

FACTS. The Joint Decision of the Court of Appeals on dismissing the petition for
review filed by spouses Virgilio and Josie Jimenez and giving due course to the
petition for review filed by Patricia, Inc., in effect reversing the decision of the
Regional Trial Court and reinstating that of the Metropolitan Trial Court, is assailed
in the instant petition.

Petitioners Virgilio and Josie Jimenez, spouses, are sublessees of a lot and building
located at 2853 Juan Luna Street, Tondo, Manila, owned by respondent Patricia Inc.,
a domestic corporation duly organized and existing under Philippine laws. The
Jimenez spouses subleased the property in 1980 from a certain Purisima Salazar
who had been leasing the property from PATRICIA since 1970. Sometime in 1995

165
Purisima Salazar abandoned the property thus incurring back rentals dating back to
January 1992. Hence, by reason of her non-payment of the monthly rentals, her
contract of lease with PATRICIA was terminated. PATRICIA then sent a letter to the
Jimenez spouses informing them of the termination of the lease and demanding that
they vacate the premises within fifteen (15) days from notice since they had no
existing lease contract with it. But the spouses refused to leave.

Thus, on 5 May 1995 PATRICIA filed a complaint for unlawful detainer against the
Jimenez spouses.

MeTC RULING. The MeTC ruled in favor of PATRICIA and ordered the Jimenez
spouses to vacate the premises, to pay PATRICIA the sum of P3,000.00 a month as
reasonable rental and/or compensation for the use of the premises beginning April
1995 until they finally vacated the premises, and to pay PATRICIA the sum of
P5,000.00 as reasonable attorney's fees, plus costs of suit.

RTC RULING. The RTC modified the decision in favor of the spouses holding that
an implied new lease contract existed between the Jimenez spouses and PATRICIA
in view of the latter's acceptance of rentals from the former. Thus the RTC extended
the term of the lease between the parties for a period of one (1) year from date of
decision, and ordered PATRICIA to reimburse the Jimenez spouses the expenses
incurred in the construction of the house built on the property and/or for the
Jimenez spouses to remove the improvements thereon.

COURT OF APPEALS RULING. The Court of Appeals in due course rendered a Joint
Decision dismissing the Petition for Review filed by the Jimenez spouses while
giving due course to the petition of PATRICIA. The Court of Appeals held that there
was no implied renewal of the lease contract between the parties since, to begin
with, there was no lease contract between them; hence, the Jimenez spouses could
not have tendered payment of rentals to PATRICIA. Instead, it declared the status of
the Jimenez spouses as being analogous to that of a lessee or tenant whose lease has
expired but whose occupancy has been continued by mere tolerance of the owner,
and hence, bound by an implied promise that he would vacate the premises upon
demand. Thus, the appellate court reversed and set aside the decision of the RTC
and reinstated the decision of the MeTC which, among others, ordered the Jimenez
spouses to vacate the premises.

COMPLAINANT. The Jimenez spouses claimed that they occupied the premises as
sublessees of Purisima Salazar with the knowledge of PATRICIA; that the building
originally found on the lot was owned by Purisima Salazar which she sold to them in

166
1984 with notice and without any objection from PATRICIA; that, when the building
was gutted by fire in 1987 they constructed a new house on the lot worth
P1,500,000.00 with the knowledge and without any objection from PATRICIA; and,
that PATRICIA never collected any rental for the land but they nevertheless
voluntarily paid the amount of P23,537.25 as rent corresponding to the period of
September 1979 to 31 December 1991.

RESPONDENT. PATRICIA filed a complaint for unlawful detainer against the


Jimenez spouses alleging, among others, that the lessee Purisima Salazar subleased
the premises to the Jimenezes; that Purisima Salazar no longer occupied the
premises; that this notwithstanding, the Jimenez spouses continued to occupy the
premises without any contract with PATRICIA, its owner, hence, their stay was
merely being tolerated by the latter; and, that despite demands made upon them,
they refused to vacate the premises thereby unlawfully and illegally withholding the
property to the damage and prejudice of PATRICIA.

ISSUE. Does the MeTC has the jurisdiction to decide on cases on of accion
publiciano or reivindicatoria?

RULING. The rule is settled that a question of jurisdiction may be raised at any
time, even on appeal, provided that its application does not result in a mockery of
the tenets of fair play. In the instant case, the jurisdictional issue was raised by
petitioners for the first time only in the instant Petition for Review. However, it
should be noted that they did so only after an adverse decision was rendered by the
Court of Appeals. Despite several opportunities in the RTC, petitioners never
advanced the question of jurisdiction of the MeTC. Additionally, petitioners
participated actively in the proceedings before the MeTC and invoked its
jurisdiction with the filing of their answer, in seeking affirmative relief from it, in
subsequently filing a notice of appeal before the RTC, and later, a Petition for Review
with the Court of Appeals. Laches now bars them from doing so.

A complaint for unlawful detainer is sufficient if it alleges that the withholding of


possession or the refusal to vacate is unlawful without necessarily employing the
terminology of the law. The fact that the complaint failed to state that respondent
was in prior possession of the property before it was unlawfully withheld by
petitioner spouses is of no moment. Prior physical possession is indispensable only
in actions for forcible entry but not in unlawful detainer. The status of petitioner
spouses is akin to that of a lessee or a tenant whose term of lease has expired but
whose occupancy has continued by tolerance of the owner. A person who occupies
the land of another at the latter's forbearance or permission without any contract

167
between them is necessarily bound by an implied promise that he will vacate upon
demand failing which a summary action for ejectment is the proper remedy against
him. The present action being for unlawful detainer, it is well within the exclusive
original jurisdiction of the metropolitan trial courts.

Joint Decision of the Court of Appeals reversing and setting aside the decision of the
Regional Trial Court and reinstating the decision of the Metropolitan Trial Court is
AFFIRMED with the MODIFICATION that petitioner spouses Virgilio and Josie
Jimenez should also remove the house they have constructed on the lot at their own
expense.

(17) National Housing Authority v. Grace Baptist Church


G.R. No. 156437
1 March 2004

FACTS. On June 13, 1986, respondent Grace Baptist Church (hereinafter, the
Church) wrote a letter to petitioner National Housing Authority (NHA), manifesting
its interest in acquiring Lots 4 and 17 of the General Mariano Alvarez Resettlement
Project in Cavite and it was granted by the NHA. Thereafter, the church occupy the
lot and introduced some improvements thereon. The church tendered its payment
in full, but the NHA refused on the ground that the payment is insufficient. The
church repeatedly demanded that the payment be accepted by the NHA but the
church failed. So, the Church instituted a complaint for specific performance and
damages against the NHA with the Regional Trial Court of Quezon City.

The RTC rendered its decision stating that there was no perfected contract of sale
with respect to Lots 4 and 17 and ordering the church to return possession of the
property to the defendant and to pay the latter reasonable rental and to order the
NHA to reimburse all the church paid for the lot. The Court of Appeals, affirmed the
decision with modification and that is to order the NHA to sell the lot in
consideration of the improvement introduced by the church thereon and knowingly
granted the Church temporary use of the subject properties and did not prevent the
Church from making improvements thereon.

ISSUE. Can the NHA be compelled to sell the subject lots to Grace Baptist Church in
the absence of any perfected contract of sale between the parties?

RULING. No. NHA is not estopped from selling the subject lots at a price equal to
their fair market value, even if it failed to expressly revoke Resolution No. 2126. It is,

168
after all, hornbook law that the principle of estoppel does not operate against the
Government for the act of its agents, or, as in this case, their inaction.

It appearing that there is no dispute that this case involves an unperfected contract,
the Civil Law principles governing contracts should apply. The offer of the NHA to
sell the subject property, as embodied in Resolution No. 2126, was similarly not
accepted by the Church.24 Thus, the alleged contract involved in this case should be
more accurately denominated as inexistent. There being no concurrence of the offer
and acceptance, it did not pass the stage of generation to the point of perfection. As
such, it is without force and effect from the very beginning or from its incipiency, as
if it had never been entered into, and hence, cannot be validated either by lapse of
time or ratification.Equity can not give validity to a void contract, and this rule
should apply with equal force to inexistent contracts. We note from the records,
however, that the Church, despite knowledge that its intended contract of sale with
the NHA had not been perfected, proceeded to introduce improvements on the
disputed land. On the other hand, the NHA knowingly granted the Church temporary
use of the subject properties and did not prevent the Church from making
improvements thereon. Thus, the Church and the NHA, who both acted in bad faith,
shall be treated as if they were both in good faith. Since this is the cases, The parties
shall agree upon the terms of the lease and in case of disagreement, the court shall
fix the terms thereof. The Court affirmed the decision of the RTC and remanded the
cases to the same, for further proceedings consistent with Articles 448 and 546 of
the Civil Code.

Subsection 4
Accession Natural

(18) Office of the City Mayor of Paraaque v. Ebio


G.R. No. 178411
23 June 2010

FACTS. Respondents claim absolute ownership of a parcel of land located at


Vitalez Compound, Vitalez, Paranaque City, under a tax declaration, which was an
accretion of Cutcut creek. They asserted that their great grandfather occupied that
land in 1930, and subsequently gave it to his son. For purposes of obtaining a tax
declaration over the subject lot, the son executed an affidavit declaring possession
and occupancy in 1966. The son continued possessing and tilled the land. When
respondent Mario Ebio married the sons daughter, he secured in 1964 and 1971

169
building permits from the Paranaque Municipal Office of their house in the
compound. In 1987, the son executed a notarized transfer of rights to respondent
Ebio, his son-in-law, and was issued new tax declarations.

In 1999, the office of the sangguniang barangay ng Vitalez passed a resolution


seeking assistance from the City Government for the construction of an access road
along cutcut creek, traversing through the respondents lot. Despite advise to vacate,
the respondents refused and opposed the road construction. After suing the
government officials who cut their coconut trees, and despite meetings with
barangay officials, no definite agreement was met by the parties. 2 years later, the
Paranaque City Administrator wrote the respondents ordering them to vacate the
lot within 30 days, which the respondents replied, reiterating their claim over the
lot, but the letter went unheeded. The RTC denied the respondents petition for lack
of merit, but was overturned by the CA.

ISSUE. Do the respondents own the subject property?

RULING. It is an uncontested fact that the subject land was formed from the
alluvial deposits that have gradually settled along the banks of Cut-cut creek. This
being the case, the law that governs ownership over the accreted portions is Art. 84
of the Spanish law of waters of 1866, which remains in effect, in relation to Art. 457
of the Civil Code. Art. 84 specifically covers ownership over alluvial deposits along
the banks of a creek. Art. 457 states: to the owners of lands adjoining the banks of
rivers belong the accretion which they gradually receive from the effects of the
current of the waters.
It is therefore explicit that alluvial deposits along the banks of a creek do not form
part of the public domain as the alluvial property automatically belongs to the
owner of the estate to which it may have been added. The only restriction provided
for by law is that the owner of the adjoining property must register the same under
the Torrens system, otherwise, the alluvial property may be subject to acquisition
through prescription by third persons. In contrast, properties of the public domain
cannot be acquired by prescription. No matter how long the possession of the
properties has been, there can be no prescription against the State regarding
property of public domain. Even a city or municipality cannot acquire them by
prescription as against the State.

Hence, while it is true that a creek is a property of public dominion, the land which
is formed by the gradual and imperceptible accumulation of sediments along its
banks does not form part of the public domain by clear provision of law.

170
(19) Bagaipo v. Court of Appeals
G.R. No. 116290
December 8, 2000

FACTS. Petitioner Dionisia P. Bagaipo is the registered owner of Lot No. 415, a
146,900 square meter agricultural land situated in Ma-a, Davao City under Transfer
Certificate of Title No. T-15757 particularly described as follows:

Bounded on the NE., by Lots Nos. 419 and 416; on the SE by the Davao River; on the
SE., by Lots Nos. 1092 and 1091; and on the NW., by Lots Nos. 413 and 418.
Respondent Leonor Lozano is the owner of a registered parcel of land located across
and opposite the southeast portion of petitioners lot facing the Davao River. Lozano
acquired and occupied her property in 1962 when his wife inherited the land from
her father who died that year. On May 26, 1989, Bagaipo filed a complaint for
Recovery of Possession with Mandatory Writ of Preliminary Injunction and
Damages against Lozano.

Lozano insisted that the land claimed by Bagaipo is actually an accretion to their
titled property. He asserted that the Davao River did not change its course and that
the reduction in Bagaipos domain was caused by gradual erosion due to the current
of the Davao River. Lozano added that it is also because of the rivers natural action
that silt slowly deposited and added to his land over a long period of time. He
further averred that this accretion continues up to the present and that registration
proceedings instituted by him over the alluvial formation could not be concluded
precisely because it continued to increase in size.

On April 5, 1991, the trial court conducted an ocular inspection. It concluded that
the applicable law is Article 457. To the owners of lands adjoining the banks of
rivers belong the accretion which they gradually receive from the effects of the
current of the waters.7 of the New Civil Code and not Art. 461 The reduction in the
land area of plaintiff was caused by erosion and not by a change in course of the
Davao River. Conformably then, the trial court dismissed the complaint.

ISSUE. Did the trial court err in holding that there was no change in course of the
Davao River such that petitioner owns the abandoned river bed pursuant to Article
461 of the Civil Code?

Did private respondent own Lot 415-C in accordance with the principle of accretion
under Article 457?

171
RULING. The trial court and the appellate court both found that the decrease in
land area was brought about by erosion and not a change in the rivers course. This
conclusion was reached after the trial judge observed during ocular inspection that
the banks located on petitioners land are sharp, craggy and very much higher than
the land on the other side of the river. Additionally, the riverbank on respondents
side is lower and gently sloping. The lower land therefore naturally received the
alluvial soil carried by the river current. These findings are factual, thus conclusive
on this Court, unless there are strong and exceptional reasons, or they are
unsupported by the evidence on record, or the judgment itself is based on a
misapprehension of facts. These factual findings are based on an ocular inspection
of the judge and convincing testimonies, and we find no convincing reason to
disregard or disbelieve them.

The decrease in petitioners land area and the corresponding expansion of


respondents property were the combined effect of erosion and accretion
respectively. Art. 461 of the Civil Code is inapplicable. Petitioner cannot claim
ownership over the old abandoned riverbed because the same is inexistent. The
riverbeds former location cannot even be pinpointed with particularity since the
movement of the Davao River took place gradually over an unspecified period of
time, up to the present.

The rule is well-settled that accretion benefits a riparian owner when the following
requisites are present: 1) That the deposit be gradual and imperceptible; 2) That it
resulted from the effects of the current of the water; and 3) That the land where
accretion takes place is adjacent to the bank of the river. These requisites were
sufficiently proven in favor of respondents. In the absence of evidence that the
change in the course of the river was sudden or that it occurred through avulsion,
the presumption is that the change was gradual and was caused by alluvium and
erosion.

(20) Heirs of Emiliano Navarro v. Intermediate Appellate Court


G.R. No. 68166
12 February 1997

Lands added to the shores by accretions and alluvial deposits caused by the action of
the sea, form part of the public domain.

172
FACTS. Sinforoso Pascual filed an application for foreshore lease covering a tract
of foreshore land in Sibocon, Balanga, Bataan, having an area of approximately
seventeen (17) hectares. This application, however, was denied.

Subsequently, Emiliano Navarro, filed a fishpond application with the Bureau of


Fisheries covering twenty five (25) hectares of foreshore land also in Sibocon,
Balanga, Bataan. The Bureau of Fisheries gave due course to his application but only
to the extent of seven (7) hectares of the property as may be certified by the Bureau
of Forestry as suitable for fishpond purposes.

Sometime in the early part of 1960, Sinforoso Pascual filed an application to register
and confirm his title to a parcel of land, situated in Sibocon, Balanga, Bataan,
described in Plan Psu-175181 and said to have an area of 146,611 square meters.
Pascual claimed that this land is an accretion to his property, situated in Barrio
Puerto Rivas, Balanga, Bataan, and covered by Original Certificate of Title No. 6830.
It is bounded on the eastern side by the Talisay River, on the western side by the
Bulacan River, and on the northern side by the Manila Bay. The Talisay River as well
as the Bulacan River flow downstream and meet at the Manila Bay thereby
depositing sand and silt on Pascual's property resulting in an accretion thereon.

The Director of Lands, represented by the Assistant Solicitor General, filed an


opposition thereto stating that neither Pascual nor his predecessors-in-interest
possessed sufficient title to the subject property, the same being a portion of the
public domain and, therefore, it belongs to the Republic of the Philippines.

The Regional Trial Court rendered judgment finding the subject property to be
foreshore land and, being a part of the public domain, it cannot be the subject of
land registration proceedings. On appeal, the respondent court reversed the
findings of the RTC.

PETITIONERS. Navarro claimed that the land sought to be registered has always
been part of the public domain, it being a part of the foreshore of Manila Bay; that he
was a lessee and in possession of a part of the subject property by virtue of a
fishpond permit issued by the Bureau of Fisheries and confirmed by the Office of the
President; and that he had already converted the area covered by the lease into a
fishpond.

RESPONDENTS. Pascual claimed that the land was formed through accretion. He
claimed the accretion as the riparian owner.

173
ISSUE. Will the accretion taking place on property adjacent to the sea be
registered in favor of the petitioner?

RULING. No. Under Article 457 of the Civil Code, accretion, as a mode of acquiring
property, requires the concurrence of the following requisites: (1) that the
accumulation of soil or sediment be gradual and imperceptible; (2) that it be the
result of the action of the waters of the river; and (3) that the land where the
accretion takes place is adjacent to the bank of the river. In the case at bar, the land
claimed by Pascual and his Heirs is not adjacent to the rivers of Talisay and Bulacan.
The accretion formed at said portion of appellants' titled land was not caused by the
current of the two rivers but by the action of the Manila Bay into which the rivers
empty. The law is clear on this. Accretion of land along the river bank may be
registered while the accretion of land along the sea always belongs to the State and
cannot be a subject of private acquisition. Moreover, Accretion on a sea bank is
foreshore land and the applicable law is not Article 457 of the Civil Code but Article
4 of the Spanish Law of Waters of 1866 which states that lands added to the shores
by accretions and alluvial deposits caused by the action of the sea, form part of the
public domain.

(21) Vda. de Nazareno v. Intermediate Appellate Court


G.R. No. 98045
26 June 1996

FACTS. The subject of this controversy is a parcel of land situated in Telegrapo,


Puntod, Cagayan de Oro City which was formed as a result of sawdust dumped into
the dried-up Balacanas Creek and along the banks of the Cagayan River. Private
respondents Jose Salasalan and Leo Rabaya leased the lots on which their houses
stood from one Antonio Nazareno, petitioners' predecessor-in-interest.
Respondents allegedly stopped paying rentals which prompted the filing of an
ejectment case. A decision was rendered against private respondents which was
affirmed by the RTC. The decision of the lower court was finally enforced with the
private respondents being ejected from portions of the subject lots they occupied.

Antonio Nazareno caused the approval by the Bureau of Lands of the survey plan
designated for perfecting his title over the accretion area being claimed by him
before he died. Before the approved survey plan could be released, private
respondents protested before the Bureau of Lands.

174
Based on report of the investigation, respondent Regional Director of the Bureau of
Lands Roberto Hilario ordered the amendment of the survey plan in the name of
Antonio Nazareno by segregating therefrom the areas occupied by the private
respondents who, if qualified, may file public land applications covering their
respective portions.

Antonio Nazareno filed a motion for reconsideration with respondent Rolleo


Ignacio, who denied the motion. Director of Lands, Abelardo Palad then ordered him
to vacate the portions adjudicated to private respondents and remove whatever
improvements they have introduced thereon. He also ordered that private
respondents be placed in possession thereof.

Petitioners Desamparado Vda. de Nazareno and Leticia Tapia Nazareno filed a case
before the RTC for annulment of the following: order of investigation by respondent
Gillera, report and recommendation by respondent Labis, decision by respondent
Hilario, order by respondent Ignacio affirming the decision of respondent Hilario
and order of execution by respondent Palad. The RTC dismissed the complaint for
failure to exhaust administrative remedies which resulted in the finality of the
administrative decision of the Bureau of Lands.

The CA affirmed the decision of the RTC dismissing the complaint. Applying Section
4 of C.A. No. 141, as amended, it contended that the approval of the survey plan
belongs exclusively to the Director of Lands. The failure of Antonio Nazareno to
appeal to the Secretary of Agriculture and Natural Resources, the present case does
not fall within the exception to the doctrine of exhaustion of administrative
remedies. It also held that there was no showing of oppressiveness in the manner in
which the orders were issued and executed.

Petitioners claim that the subject land is private land being an accretion to his titled
property, applying Article 457 of the Civil Code which provides:

To the owners of lands adjoining the banks of rivers belong the accretion which they
gradually receive from the effects of the current of the waters. Hence, this petition.

ISSUE. Does the petitioners acquires ownership over the property through
accretion?

RULING. No. The Court held that accretion, as a mode of acquiring property under
Art. 457 of the Civil Code, requires the concurrence of these requisites :

175
(1) that the deposition of soil or sediment be gradual and imperceptible;

(2) that it be the result of the action of the waters of the river (or sea); and

(3) that the land where accretion takes place is adjacent to the banks of rivers (or
the sea coast).

For petitioners to insist on the application of these rules on alluvion to their case,
the above-mentioned requisites must be present. However, they admit that the
accretion was formed by the dumping of boulders, soil and other filling materials on
portions of the Balacanas Creek and the Cagayan River bounding their land. It
cannot be claimed that the accumulation of such boulders, soil and other filling
materials was gradual and imperceptible, resulting from the action of the waters or
the current of the Balacanas Creek and the Cagayan River.

The word "current" indicates the participation of the body of water in the ebb and
flow of waters due to high and low tide. Petitioners' submission not having met the
first and second requirements of the rules on alluvion, they cannot claim the rights
of a riparian owner.

The Bureau of Lands classified the subject land as an accretion area which was
formed by deposits of sawdust in the Balacanas Creek and the Cagayan River, in
accordance with the ocular inspection conducted by the Bureau of Lands. Therefore
the accretion was man-made or artificial.

The Court ruled that the requirement that the deposit should be due to the effect of
the current of the river is indispensable. This excludes from Art. 457 of the Civil
Code all deposits caused by human intervention. Alluvion must be the exclusive
work of nature.

In the case at bar, the subject land was the direct result of the dumping of sawdust
by the Sun Valley Lumber Co. consequent to its sawmill operations.Even if this
Court were to take into consideration petitioners' submission that the accretion site
was the result of the late Antonio Nazareno's labor consisting in the dumping of
boulders, soil and other filling materials into the Balacanas Creek and Cagayan River
bounding his land, the same would still be part of the public domain. The petition is
dismissed for lack of merit.

176
(22) Jagualing v. Court of Appeals
G.R. No. 94283
4 March 1991

FACTS. Janita Eduave (private respondent) claims that she inherited a parcel of
land from her parents. She further state that the entire land had an area of 16,452
square meters appearing in the deed of extrajudicial partition, while in the tax
declaration the area is only 4,937 square meters, and she reasoned out that she
included the land that was under water. The land was eroded sometime in
November 1964 due to typhoon Ineng, destroying the bigger portion and the
improvements leaving only a coconut tree. In 1966 due to the movement of the river
deposits on the land that was not eroded increased the area to almost half a hectare
and in 1970 the appellant started to plant bananas.

In 1973, Maximo and Anuncita Jagualing (petitioners) asked her permission to plant
corn and bananas under the condition that they prevent squatters to come to the
area.

The land was the subject of a reconveyance case between Janita Eduave and Heirs of
Antonio Factura (the latter being the petitioners) which was the subject of judgment
by compromise in view of the amicable settlement of the parties. In the amicable
settlement the heirs of Antonio Factura, ceded a portion of the land with an area of
1,289 square meters more or less to Eduave.

Later, the Jagualings denied the claim of ownership of Eduave, and asserted that
they are the real owners of the land in litigation containing an area of 18,000 square
meters more or less. According to them, they acquired the land by acquisitive
prescription since they have occupied the land since 1969. They presented tax
declarations and photos of actual occupation to prove claim of prescription.

REGIONAL TRIAL COURT. Eduave filed an action to quiet title and/or remove a
cloud over the property in question against the Jagualings. The Regional Trial Court
(RTC) dismissed the complaint for failure of Eduave to establish by preponderance
of evidence their claim of ownership over the land in litigation and that the land is a
delta thus is part of public domain not susceptible of appropriation.

COURT OF APPEALS. The Court of Appeals (CA) found that the island was formed
by the branching off of the river and subsequent thereto the accumulation of alluvial
deposits. Basing its ruling on Articles 463 and 465 of the Civil Code, the CA reversed
the decision of the RTC, declared private respondents as the lawful and true owners

177
of the land subject of this case and ordered petitioners to vacate the premises and
deliver possession of the land to private respondents.

ISSUE. Did the Jagualings acquire the subject land thru prescription?

RULING. NO. From the evidence thus submitted, CA had sufficient basis for the
finding that the property of Eduave actually existed and was identified prior to the
branching off or division of the river. The CA, therefore, properly applied Article 463
of the Civil Code which allows the ownership over a portion of land separated or
isolated by river movement to be retained by the owner thereof prior to such
separation or isolation. The parcel of land in question is part of an island that
formed in a non-navigable and non-floatable river; from a small mass of eroded or
segregated outcrop of land, it increased to its present size due to the gradual and
successive accumulation of alluvial deposits. In this regard the CA also did not err in
applying Article 465 of the Civil Code. Under this provision, the island belongs to the
owner of the land along the nearer margin as sole owner thereof; or more
accurately, because the island is longer than the property of private respondents,
they are deemed ipso jure to be the owners of that portion which corresponds to the
length of their property along the margin of the river.

It is well-settled that lands formed by accretion belong to the riparian owner. This
preferential right is, under Article 465, also granted the owners of the land located
in the margin nearest the formed island for the reason that they are in the best
position to cultivate and attend to the exploitation of the same. In fact, no specific
act of possession over the accretion is required. If, however, the riparian owner fails
to assert his claim thereof, the same may yield to the adverse possession of third
parties, as indeed even accretion to land titled under the Torrens system must itself
still be registered.

On the other hand, Jagualing failed to prove adverse possession of the land for the
required period and their possession cannot be considered in good faith since by
their admission they have recognized Eduaves ownership over the land. Thus, the
land still belongs to Eduave.

(23) Khemani v. Heirs of Anastacio Trinidad


G.R. No. 147340
13 December 2007

178
Accretion on private property no longer belongs to the Government.

FACTS. Petitioner Cynthia Cruz Khemani is the registered owner of Lot No. 107,
which is covered by Transfer Certificate of Title (TCT) No. 58976 issued on March
10, 1994. Khemani purchased the lot from the heirs of Jose B. Pea (the Pea Heirs)
on February 17, 1994. Subject of the instant case is a 340 sqm portion (the Disputed
Property) of Lot No. 107 over which respondents Heirs of Anastacio Trinidad are
claiming ownership.

Lot No. 107 and Lot Nos. 108 and 109, constitute Lot No. 355 which was part of the
public domain. On July 10, 1950, Lot No. 355 with an original area of 1,500 square
meters was awarded to Jesus M. Larrabaster by the National Land Settlement
Administration (NLSA) who subsequently sold his rights and interests over the said
property to Jose B. Pea (Pea) on June 29, 1956.

Thereafter, the original area of Lot No. 355 which was 1,500 square meters
increased to 3,616.93 square meters due to accretion. Pea then requested the
Bureau of Lands (BOL) to adjust the area of the lot awarded to him but the BOL
denied the request on the ground that the accretion belonged to the government.

The BOL subdivided the land into three accordingly, Lot 107 to Mendoza, Lot 108 to
Pea and Lot 109 to Roxas. Subsequently, appeal was made to the Office of the
President with regard to the decision rendered by BOL. The Office of the President
however decided and held that the entire area of Lot 355 belonged to Pea and not
to the government. Mendoza, another third party, filed a special action for certiorari
claiming that he was denied due process when the Office of the President decided to
award the lot to Pea. He asserted ownership over them on the strength of a
Miscellaneous Sales Application. This case was elevated to the Supreme Court which
was decided upon in favor of Pea.

Respondents herein are claiming ownership and allege that their predecessors in
interest have openly, publicly, peacefully and adversely possessed said subject land
in the concept of an owner since 1950. They further claim that they applied for a
Miscellaneous Sales Application over the land which was approved by the BOL.

The heirs of Pea motioned to dismiss the case alleging that the respondents
predecessor in interest was a mere squatter who had been allowed by Mendoza, the
former adverse claimant to the land, to occupy it and that since there was already a
decision in the previous case, that this was res judicata.

179
ISSUE. Is the BOL correct in its action of subdividing the land with accretion into
three?

RULING. No. The accretion shall belong not to the Government. It appears from
the records that the Courts ruling in the Assistant Executive Secretary case in 1989,
the BOL issued a Patent on September 20, 1993 in favor of the Pea Heirs which
became the basis for the issuance of an OCT covering Lot No. 107. However, as held
in the Assistant Executive Secretary case, Lot No. 107 as accretions to the original
lot, Lot No. 355, awarded to Larrabaster on July 10, 1950 "no longer belonged to
the Government, the subdivision thereof by the Bureau of Lands into three lots (Lot
No. 107, Lot No. 108 and Lot No. 109), as well as the allocation of said lots to two
other individuals, was beyond the scope of its authority." As a result, while Lot No.
107 may no longer be acquired under the provisions of the Public Land Act, it does
not absolutely foreclose the possibility that, as a private property, a portion thereof
(the Disputed Property) may have been acquired by respondents through
acquisitive prescription under the Civil Code. These matters, however, are the
proper subject of a separate action should one be filed subject, of course, to such
claims and defenses that either party may have under relevant laws.

All told, it would be premature to order the dismissal of respondents complaint as


they have yet to be given an opportunity to substantiate their claims. We note that
respondents are in actual physical possession of the Disputed Property up to this
date, and the fact of their physical possession over many years is not disputed by
petitioner. Under the circumstances, it would be more in keeping with the standards
of fairness to have a full-blown trial where the evidentiary matters are threshed out.
The petition is denied.

(24) Agustin v. Intermediate Appellate Court


G.R. Nos. L-66075-76
5 July 1990

FACTS. As the years went by, the Cagayan River moved gradually eastward,
depositing silt on the western bank. The shifting of the river and the siltation
continued until 1968.

In 1950, all lands west of the river were included in the Solana Cadastre. Among
these occupying lands covered by the Solana Cadastre were plaintiffs-private
respondents, namely, Pablo Binayug, who has been in possession of Lots 3349,
7876, 7877, 7878, 7879, 7875, 7881, 7882, 7883, 7884, 7885, 7891 and 7892, and

180
Maria Melad, who owns Lot 3351 (Exh. 3-Binayug; Exh. B-Melad). Pablo Binayug
began his possession in 1947. An area of eight (8) hectares was planted to tobacco
and corn while 12 hectares were overgrown with talahib (Exh. C-1 Binayug.)
Binayug's Homestead Application No. W-79055 over this land was approved in
1959 (Exh. B-Binayug). Binayug's possession was recognized in the decision in Civil
Case No. 101 (Exh. F-Binayug). On the other hand, as a result of Civil Case No. 343-T,
Macario Melad, the predecessor-in-interest of Maria Melad and Timoteo Melad, was
issued Original Certificate of Title No. P-5026 for Lot 3351 of Cad. 293 on June 1,
1956.

Through the years, the Cagayan River eroded lands of the Tuguegarao Cadastre on
its eastern bank among which was defendant-petitioner Eulogio Agustin's Lot 8457
(Exh. E-Melad), depositing the alluvium as accretion on the land possessed by Pablo
Binayug on the western bank.

However, in 1968, after a big flood, the Cagayan River changed its course, returned
to its 1919 bed, and, in the process, cut across the lands of Maria Melad, Timoteo
Melad, and the spouses Pablo Binayug and Geronima Ubina whose lands were
transferred on the eastern, or Tuguegarao, side of the river. To cultivate those lots
they had to cross the river.

In April, 1969, while the private respondents and their tenants were planting corn
on their lots located on the eastern side of the Cagayan River, the petitioners,
accompanied by the mayor and some policemen of Tuguegarao, claimed the same
lands as their own and drove away the private respondents from the premises.

On April 21, 1970, private respondents Maria Melad and Timoteo Melad filed a
complaint (Civil Case No. 343-T) to recover Lot No. 3351 with an area of 5 hectares
and its 6.6-hectare accretion. On April 24, 1970, private respondent Pablo Binayug
filed a separate complaint (Civil Case No. 344-T) to recover his lots and their
accretions.

ISSUE. Whether Sps. Binayug lost ownership of the accretion to their lands upon
the sudden and abrupt change of the course of the Cagayan River

RULING. Pablo Binayugs property, grew from its original area of 18 hectares, by
an additional 50 hectares through alluvium as the Cagayan River gradually moved to
the east. These accretions belong to riparian owners upon whose lands the alluvial
deposits were made. (Roxas vs. Tuason, 9 Phil. 408; Director of Lands vs. Rizal, 87
Phil. 806).

181
Furthermore, their ownership of the accretion to their lands was not lost upon the
sudden and abrupt change of the course of the Cagayan River in 1968 or 1969 when
it reverted to its old 1919 bed, and separated or transferred said accretions to the
other side (or eastern bank) of the river. Articles 459 and 463 of the New Civil Code
apply to this situation.

Art. 459. Whenever the current of a river, creek or torrent segregates from an estate
on its bank a known portion of land and transfers it to another estate, the owner of
the land to which the segregated portion belonged retains the ownership of it,
provided that he removes the same within two years.

Art. 463. Whenever the current of a river divides itself into branches, leaving a piece
of land or part thereof isolated, the owner of the land retains his ownership. He also
retains it if a portion of land is separated from the estate by the current. (Emphasis
supplied).

In the case at bar, the sudden change of course of the Cagayan River as a result of a
strong typhoon in 1968 caused a portion of the lands of the private respondents to
be "separated from the estate by the current." The private respondents have
retained the ownership of the portion that was transferred by avulsion to the other
side of the river.

(25) Agne v. Director of Lands


G.R. No. L-40399
6 February 1990

FACTS. The land subject matter of this case was originally covered by Free Patent
No. 23263 issued on April 17, 1937 in the name of Herminigildo Agpoon. Pursuant
to the said patent, the Register of Deeds of Pangasinan issued to Herminigildo
Agpoon Original Certificate of Title No. 2370. Presentacion Agpoon Gascon
inherited the said parcel of land upon the death of her father, Herminigildo, and was
issued Transfer Certificate of Title No. 32209. Respondent Presentacion declared
the said land for taxation purposes in her name under Tax Declaration No. 11506
and taxes were paid thereon in her name.

Spouses Gascon filed in the then Court of First Instance of Pangasinan for recovery
of possession and damages against Agne. They stated that they are the registered
owners under Transfer Certificate of Title No. 32209 of the parcel of land situated in
Barrio Bantog, Asingan, Pangasinan which is now in the possession of petitioners.

182
During the Japanese occupation, petitioners, taking advantage of the abnormal
conditions then obtaining, took possession of said land by means of fraud, stealth,
strategy and intimidation. Private respondents repeatedly demanded the surrender
of the physical possession of said property but the latter refused.

Petitioners alleged that the land in question was formerly a part of the river bed of
the Agno-Chico River. In the year 1920, a big flood occurred which caused the river
to change its course and abandon its original bed. By virtue of the provisions of
Article 370 of the Spanish Civil Code which was then the law in force, petitioners, by
operation of law, became the owners by accession or accretion of the respective
aliquot parts of said river bed bordering their properties.

ISSUE. Whether or not the land in question was private land under Article 370 of
the old Civil Code and that the subsequent derivative certificates of title in question
were null and void ab initio because the said land was not within the authority of
the government to dispose of in favor of any party.

RULING. The land in question was and is of private ownership and, therefore,
beyond the jurisdiction of the Director of Lands. The free patent and subsequent
title issued pursuant thereto are null and void. The indefeasibility and
imprescriptibility of a Torrens title issued pursuant to a patent may be invoked only
when the land involved originally formed part of the public domain. If it was a
private land, the patent and certificate of title issued upon the patent are a nullity.

The rule on the incontrovertibility of a certificate of title upon the expiration of one
year, after the entry of the decree, pursuant to the provisions of the Land
Registration Act, does not apply where an action for the cancellation of a patent and
a certificate of title issued pursuant thereto is instituted on the ground that they are
null and void because the Bureau of Lands had no jurisdiction to issue them at all,
the land in question having been withdrawn from the public domain prior to the
subsequent award of the patent and the grant of a certificate of title to another
person.

Although a period of one year has already expired from the time a certificate of title
was issued pursuant to a public grant, said title does not become incontrovertible
but is null and void if the property covered thereby is originally of private
ownership, and an action to annul the same does not prescribe. Moreover, since
herein petitioners are in possession of the land in dispute, an action to quiet title is
imprescriptible. Their action for reconveyance which, in effect, seeks to quiet title
to property in one's possession is imprescriptible. Their undisturbed possession for

183
a number of years gave them a continuing right to seek the aid of a court of equity to
determine the nature of the adverse claims of a third party and the effect on her
title.

It clear under the provision of the Old Civil Code that once the river bed has been
abandoned, the riparian owners become the owners of the abandoned bed. The
acquisition of ownership is automatic. There need be no act on the part of the
riparian owners to subject the accession to their ownership, as it is subject thereto
ipso jure from the moment the mode of acquisition becomes evident, without the
need of any formal act of acquisition. Such abandoned river bed had fallen to the
private ownership of the owner of the riparian land even without any formal act of
his will and any unauthorized occupant will be considered as a trespasser. The right
in re to the principal is likewise a right in re to the accessory, as it is a mode of
acquisition provided by law, as the result of the right of accretion. Since the
accessory follows the nature of the principal, there need not be any tendency to the
thing or manifestation of the purpose to subject it to our ownership, as it is subject
thereto ipso jure from the moment the mode of acquisition becomes evident.

Petitioners herein became owners of aliquot portions of said abandoned river bed
as early as 1920, when the Agno River changed its course, without the necessity of
any action or exercise of possession on their part, prior to its registration, was an
abandoned bed of the Agno River and that petitioners are the riparian owners of the
lands adjoining the said bed. The failure of herein petitioners to register the
accretion in their names and declare it for purposes of taxation did not divest it of
its character as a private property.

(26) Ronquillo v. Court of Appeals


195 SCRA 433

FACTS. Del Rosario owns a registered land adjacent to Estero Calubcub which is
already dried up due to the dumping of garbage by the sorrounding neighborhood
and not by any natural causes. Defendant now occupies said dried up land until Del
Rosario, claiming ownership over the same, required him to vacate on the basis of
Article 370 of the Civil Code which provides that riparian owner owns the dried up
river bed abandoned by natural changes.

ISSUE. Whether or not Article 370 applies.

184
RULING. No. The rules on alluvion do not apply to man-made or artificial
accretions nor to accretions to lands that adjoin canals or esteros or artificial
drainage systems. Considering our earlier finding that the dried-up portion of Estero
Calubcub was actually caused by the active intervention of man, it follows that
Article 370 does not apply to the case at bar and, hence, the Del Rosarios cannot be
entitled thereto supposedly as riparian owners.

The dried-up portion of Estero Calubcub should thus be considered as forming part
of the land of the public domain which cannot be subject to acquisition by private
ownership.

---oOo---

185
CHAPTER VI
QUIETING OF TITLE

(1) Residents of Lower Atab v. Sta. Monica Industrial Development


Corporation
G. R. No. 198878
15 October 2014

FACTS. In May 2001, petitioners filed a civil case for quieting of title with damages
against respondent Sta. Monica Industrial and Development Corporation. The
Complaint in said case essentially alleged that petitioners are successors and
transferees-in-interest of Torres, the supposed owner of an unregistered parcel of
land in Baguio City which Torres possessed and declared for tax purposes in 1918;
that they are in possession of the subject property in the concept of owner, declared
their respective lots and homes for tax purposes, and paid the real estate taxes
thereon; that in May 2000, respondent began to erect a fence on the subject
property, claiming that it is the owner of a large portion thereof by virtue of
Transfer Certificate of Title No. T-631849 (TCT No. T-63184); that said TCT No. T-
63184 is null and void, as it was derived from Original Certificate of Title No. O-281
(OCT No. O-281), which was declared void pursuant to Presidential Decree No.
127110 (PD 1271) and in the decided case of Republic v. Marcos;11 and that TCT
No. T-63184 is a cloud upon their title and interests and should therefore be
cancelled. Petitioners thus prayed that respondents TCT No. T-63184 be
surrendered and cancelled; that actual, moral and exemplary damages, attorneys
fees, legal expenses, and costs be awarded in their favor; and finally, that injunctive
relief be issued against respondent to prevent it from selling the subject property.

REGIONAL TRIAL COURT. The RTC dismissed the Complaint for Quieting of Title. If
it is held that if it is claimed that respondents title is void, then a direct proceeding
should have been filed by the State to annul it and to secure reversion of the land;
petitioners have no standing to do so through a quieting of title case.

ISSUE. Will the action to quiet the title prosper?

RULING. No, For an action to quiet title to prosper, two indispensable requisites
must be present, namely: "(1) the plaintiff or complainant has a legal or an equitable
title to or interest in the real property subject of the action; and (2) the deed, claim,
encumbrance, or proceeding claimed to be casting cloud on his title must be shown

186
to be in fact invalid or inoperative despite its prima facie appearance of validity or
legal efficacy."

Beneficial ownership has been defined as ownership recognized by law and capable
of being enforced in the courts at the suit of the beneficial owner.

Petitioners do not have legal or equitable title to the subject property. Evidently,
there are no certificates of title in their respective names. And by their own
admission in their pleadings, specifically in their pre-trial brief and memorandum
before the trial court, they acknowledged that they applied for the purchase of the
property from the government, through townsite sales applications coursed through
the DENR. In their Petition before this Court, they particularly prayed that TCT No.
T-63184 be nullified in order that the said title would not hinder the approval of
their townsite sales applications pending with the DENR.

(2) Heirs of Pacifico Pocdo v. Avila


G.R. No. 199146
19 March 2014

FACTS. The lots were the subject of a petition to reopen judicial proceedings filed
by the Heirs of Pocdo Pool. The registration of the lots in the names of the
petitioners were granted in October 1964, but since the decision was not
implemented within the 10 years prescribed period, the Heirs filed their ancestral
land claims with the DENR. In August 1991, Certificates of Ancestral Lands Claims
(CALS) were issued by the DENR was not approved due to Memorandum Order 98
15 issued by the DENR Secretary in September 1998.

On April 18, 1981, Polon entered into a Catulagan with Arsenia Avila authorizing the
latter to undertake the segregation of his onehectare land from Lot 43 in accord
with the amicable settlement of September 3, 1980. In exchange, Polon would award
to her 2,000 square meters from the 1hectare lot. After spending time, money and
effort in the execution of the survey, Avila gave the survey results to Polon
prompting Polon to execute a Waiver of Rights dated January 21, 1987. Accordingly,
the subdivided lots were declared for tax purposes and the corresponding tax
declaration issued to Polon and Arsenia, with 8,010 square meters going to Polon
and 1,993 square meters to Avila.

On March 10, 2000, finding the amicable settlement, the Catulagan and Waiver of
Rights in order, the CENRO of Baguio City issued in favor of Avila a Certificate of

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Exclusion of 993 square meters from the Ancestral Land Claim of the Heirs of Pocdo
Pool over Lot 43.

On April 27, 2000, however, the Heirs of Polon Pocdo and his wife Konon filed an
affidavit of cancellation with OICCENRO Teodoro Suaking and on that basis,
Suaking cancelled the Certificate of Exclusion. On May 8, 2000, Avila complained to
the Regional Executive Director or RED the unlawful cancellation of her Certificate
of Exclusion, and on June 1, 2000, the RED issued a memorandum setting aside the
revocation and restoring the Certificate of Exclusion.

Acting on the motion for reconsideration by Avila against oppositors Pacifico Pocdo,
the RED in an Order on October 28, 2002 set aside the July 16, 2002 order. The
Affidavit of Cancellation dated April 27, 2002 filed by the heirs of Polon Pocdo was
dismissed for lack of jurisdiction and the validity of the Amicable Settlement,
Catulagan and Deed of Waiver of Rights were recognized.

The DENR Secretary affirmed his Order.

Pacifico Pocdo, as the appellant, went on appeal to the Office of the President which
resulted in an affirmance of DENR Secretarys decision.

RTCs DECISION. Regional Trial Court dismissed the case for lack of jurisdiction.
The trial court held that the DENR had already declared the disputed property as
public land, which the State, through the DENR, has the sole power to dispose. Thus,
the claim of petitioners to quiet title is not proper since they do not have title over
the disputed property. The trial court agreed with the DENR Secretarys ruling that
petitioner may participate in the public bidding of the disputed property if qualified
under applicable rules.

PETITIONER. The case is not limited to quieting of title since there are other issues
not affected by the DENR ruling, particularly the validity of the Waiver of Rights and
the Catulagan. Petitioners maintained that the DENRs ruling that the disputed
property is public land did not preclude the court from taking cognizance of the
issues on who is entitled possession to the disputed property and whether the
questioned documents are valid and enforceable against Pacifico and his heirs.

COURT OF APPEALS. The Court of Appeals ruled that petitioners, in raising the
issue of quieting of title, failed to allege any legal or equitable title to quiet. Under
Article 477 of the Civil Code, in an action to quiet title, the plaintiff must have legal
or equitable title to, or interest in the real property which is the subject matter of

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the action. Instead of an action to quiet title or accion reivindicatoria, the Court of
Appeals stated that petitioners should have filed an accion publiciana based merely
on the recovery of possession de jure.

On the validity of the Catulagan and the Waiver of Rights, the Court of Appeals held
that petitioners have no right to question these since they were not parties to said
documents had not participated in any manner in their execution. The Court of
Appeals ruled that only the contracting parties are bound by the stipulations of the
said documents. Those not parties to the said documents, and for whose benefit they
were not expressly made, cannot maintain an action based on the said documents.

ISSUES. 1) Did the RTC had jurisdiction since it is the courts, not the DENR, that
has jurisdiction over actions involving possession of lands, even assuming that the
land is a public land? 2) Did the petitioners have title to the property that would
support an action for quieting of title when trial had not yet commenced?

RULING. 1) No.The DENR Decision was affirmed by the Office of the President
which held that lands within the Baguio Townsite Reservation belong to the public
domain and are no longer registrable under the Land Registration Act.7 The Office
of the President ordered the disposition of the disputed property in accordance with
the applicable rules of procedure for the disposition of alienable public lands within
the Baguio Townsite Reservation, particularly Chapter X of Commonwealth Act No.
141 on Townsite Reservations and other applicable rules.

Having established that the disputed property is public land, the trial court was
therefore correct in dismissing the complaint to quiet title for lack of jurisdiction.
The trial court had no jurisdiction to determine who among the parties have better
right over the disputed property which is admittedly still part of the public domain.

2) None. Under Articles 476 and 477 of the Civil Code, the two indispensable
requisites in an action to quiet title are: (1) that the plaintiff has a legal or equitable
title to or interest in the real property subject of the action; and (2) that there is a
cloud on his title by reason of any instrument, record, deed, claim, encumbrance or
proceeding, which must be shown to be in fact invalid or inoperative despite its
prima facie appearance of validity.

In this case, petitioners, claiming to be owners of the disputed property, allege that
respondents are unlawfully claiming the disputed property by using void
documents, namely the Catulagan and the Deed of Waiver of Rights. However, the
records reveal that petitioners do not have legal or equitable title over the disputed

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property, which forms part of Lot 43, a public land within the Baguio Townsite
Reservation. It is clear from the facts of the case that petitioners predecessorsin
interest, the heirs of Pocdo Pool, were not even granted a Certificate of Ancestral
Land Claim over Lot 43, which remains public land.

(3) Lucasan v. Philippine Deposit Insurance Corporation


G.R. No. 176929
4 July 2008

FACTS. Petitioner Inocencio Y. Lucasan (Lucasan) and his wife Julianita Sorbito
(now deceased) were the owners of Lot situated in Bacolod City. Pacific Banking
Corporation (PBC) extended a loan to Lucasan, with Carlos Benares as his co-maker.
Lucasan and Benares failed to pay the loan when it became due and demandable.
Consequently, PBC filed a collection case with the RTC of Bacolod City. The RTC
rendered a decision ordering Lucasan and Benares to jointly and severally pay PBC
until the full payment of the obligation. Lucasan failed to pay the monetary award;
thus, to satisfy the judgment, the RTC issued a writ of execution directing the sheriff
to effect a levy on the properties owned by Lucasan and sell the same at public
auction. In compliance with the writ, the City Sheriff of Bacolod issued a Notice of
Embargo. Annotated therefore on Lucasans TCTs as prior encumbrances on the
same titles were the mortgages in favor of Philippine National Bank (PNB) and
Republic Planters Bank (RPB) executed to secure Lucasans loans with the banks.
The lots were later sold at a public auction where PBC was awarded the highest
bidder. A certificate of sale was executed in its favor and was registered. Neither
PNB nor RPB, the mortgagees, assailed the auction sale. Lucasan, as well as the
mortgagee banks, PNB and RPB, did not redeem the properties within the
redemption period. Nevertheless, PBC did not file a petition for consolidation of
ownership. Lucasan, through counsel, wrote a letter to the Philippine Deposit
Insurance Corporation (PDIC), PBCs receiver and liquidator seeking the
cancellation of the certificate of sale and offering to pay PBCs claim against Lucasan.
Not long thereafter, Lucasan paid his loans with the PNB and RPB. Consequently, the
mortgagee banks executed their respective releases of mortgage, resulting in the
cancellation of the prior encumbrances in favor of PNB and RPB. Later, PDIC denied
Lucasans request for the cancellation of the certificate of sale stating that the
subject lots have already become part of the acquired assets of Pacific Banking
Corporation by virtue of a Certificate of Sale executed by the City Sheriff of Bacolod.
That reacquisition of the subject properties have to be through PDICs public
bidding disposal policy. Lucasan then filed a petition denominated as declaratory
relief with the RTC of Bacolod City. He sought confirmation of his rights provided in

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the second paragraph of Section 1, Rule 63 of the Rules of Court in relation to
Section 75 of Presidential Decree (P.D.) No. 1529 and pleaded for the lifting and/or
cancellation of the notice of embargo and the certificate of sale, offering to pay as
consideration for the cancellation. PDIC moved to dismiss the complaint for lack of
cause of action. It averred that an action to quiet title under Section 1 of Rule 63 may
only be brought when there is a cloud on, or to prevent a cloud from being cast
upon, the title to real property. It asseverated that a cloud on the title is an
outstanding instrument record, claim, encumbrance or proceeding which is actually
invalid or inoperative, but which may nevertheless impair or affect injuriously the
title to property. PDIC claimed that the notice of embargo was issued pursuant to a
writ of execution while the certificate of sale was executed as a result of a public
bidding. Thus, their annotations on the titles were valid, operative or effective. PDIC
asserted that Lucasans petition is nothing but a disguised attempt to compel PDIC
to resell the properties at a reduced price. Accordingly, it prayed for the dismissal of
the petition. Lucasan opposed the motion. He countered that the subject properties
were still in his possession, and neither PBC nor PDIC instituted an action for
consolidation of ownership. Since the certificate of title was still in his name, he
contended that he could pursue all legal and equitable remedies, including those
provided for in Section 1, Rule 63 of the Rules of Court to reacquire the properties.
He also claimed that PDICs policy of disposing the subject properties through public
bidding was unjust, capricious and arbitrary, considering that the judgment debt
was lower in amount. The RTC granted PDICs motion to dismiss, finding the claim
of any cloud over the titles of [Lucasan] to be bereft of basis in fact and in law.
Lucasan filed a motion for reconsideration, but the RTC denied. On appeal, the CA
affirmed in toto the RTC ruling. It declared that Lucasan already lost his right to
redeem the properties when he failed to exercise it within the prescribed period.
The effect of such failure was to vest in PBC absolute ownership over the subject
properties. Lucasan sought a reconsideration of the CA Decision, but the same was
denied.

ISSUE. Whether or not Lucasan has sufficient cause of action for quieting of title.

RULING. No. The requisites of quieting of title are wanting in this case. Quieting of
title is a common law remedy for the removal of any cloud of doubt or uncertainty
with respect to real property. To avail of the remedy of quieting of title, two (2)
indispensable requisites must concur, namely: (1) the plaintiff or complainant has a
legal or an equitable title to or interest in the real property subject of the action; and
(2) the deed, claim, encumbrance or proceeding claimed to be casting a cloud on his
title must be shown to be in fact invalid or inoperative despite its prima facie
appearance of validity or legal efficacy. Stated differently, the plaintiff must show

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that he has a legal or at least an equitable title over the real property in dispute, and
that some deed or proceeding beclouds its validity or efficacy. Admittedly, the
subject parcels of land were levied upon by virtue of a writ of execution. They were
later sold on a public auction, awarded to PBC as the highest bidder. A certificate of
sale in favor of PBC was issued. Under the Rules of Court, the judgment debtor or
redemptioner had the right to redeem the property from PBC within twelve (12)
months from the registration of the certificate of sale. With the expiration of the
twelve-month period of redemption and no redemption having been made, the
judgment debtor or the redemptioner lost whatever right he had over the land in
question. Lucasan admitted that he failed to redeem the properties within the
redemption period, on account of his then limited financial situation.It was only
fifteen (15) years later that he manifested his desire to reacquire the properties.
Clearly thus, he had lost whatever right he had over the subject lots. The payment of
loans made by Lucasan to PNB and RPB cannot, in any way, operate to restore
whatever rights he had over the subject properties. Such payment only extinguished
his loan obligations to the mortgagee banks and the liens which Lucasan claimed
were subsisting at the time of the registration of the notice of embargo and
certificate of sale. Neither can Lucasan capitalize on PBCs failure to file a petition for
consolidation of ownership after the expiration of the redemption period. Certainly,
Lucasan no longer possess any legal or equitable title to or interest over the subject
parcels of land; hence, he cannot validly maintain an action for quieting of title.

---oOo---

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CHAPTER VII
CO-OWNERSHIP

(1) Teodoro v. Espino


G.R. No. 189248
5 February 2014

FACTS. A total area of 248 square meters, covered by Tax Declaration No. 99
050030246, registered in the name of Genaro, long deceased ascendant of the
herein parties. Genaro had five children: Santiago; Maria, from whom respondents
descended and trace their claim of ownership and right of possession; Petra,
Mariano, Teodoro Teodoros father; and Ana. Genaro and his children are all
deceased. While Respondents (Danilo Espino, Rosario Santiago, Juliana Castillo,
Paulina Litao, Raquel Rodriguez, Rufina Dela Cruz, and Leonila Cruz) respective
parents are first cousins of Teodoro Teodoro (Petitioner, as substituted by his
heirs). All parties are collateral relatives of Petra Teodoro: Teodoro Teodoro is her
nephew while respondents are her grandnephews and grandnieces, descendants of
Petras sister, Maria Teodoro.

Only Petra occupied the subject property, living at the ancestral house. After Petras
death, her purported will, a holographic will, was probated in Special Proceedings
before RTC 8 Malolos, Bulacan, which Decision on the wills extrinsic validity has
become final and executory. In the will, Petra, asserting ownership, devised the
subject property to Teodoro Teodoro. Thereafter, Teodoro Teodoro effected the
demolition of the ancestral house, intending to use the subject property for other
purposes.

Shortly, herein respondents, who resided at portions of the subject land (Lot No.
2476) that surround the subject property on which the ancestral house previously
stood, erected a fence on the surrounding portion, barricaded its frontage, and put
up a sign thereat, effectively dispossessing Teodoro Teodoro of the property
bequeathed to him by Petra. As a response Teodoro Teodoro demanded the
respondents to vacate the property but it went unheeded prompting him to file the
complaint for forcible entry against respondents before the MTC which decided to
dismiss the complaint. However, the RTC reversed the ruling, and ruled in favor of
Teodoro Teodoro and ordered the ejectment of respondents from the subject
property and retain the physical possession of the land to Teodoro.

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PETITIONER. Teodoro Teodero has validly designated as administrator of Petras
state through a executed holographic will. And that he has claimed ownership of the
subject property acquired through testate succession, and as an exercise of his
ownership and incident of his physical possession of the subject property, to his act
of demolition of the ancestral house.

RESPONDENT. Respondents assert possession by virtue of ownership manifested


in their residence spanning more than five (5) decades, from the time, respondents
grandmother, Maria and sister of Petra, was alive and resided thereat, wherein they
pay real taxes. According to respondents, from the partition, the heirs of all three
Genaro children possessed and occupied their respective shares: respondents
received Lot No. 2476 which encompasses herein subject property. They also
contend that the demolition was allowed by them in order to have the same be
partitioned among themselves, as per verbal agreement.

ISSUE. Who owns the subject land?

RULING. The land is a community property. Both parties in this case are legal
heirs of Genaro, and in the absence of an approved partition among the heirs, the
parcel of land remains a community property over which the legal heirs of Genaro
Teodoro have the right to inherit. All therefore are entitled to exercise the right of
dominion including the right of possession.
Civil Code state:

Art. 484. There is coownership whenever the ownership of an undivided thing or


right belongs to different persons.

Art. 1078. When there are two or more heirs, the whole estate of the decedent is,
before its partition, owned in common by such heirs, subject to the payment of
debts of the deceased.

Certainly, and as found by the trial courts, the whole of Lot No. 2476 including the
portion now litigated is, owing to the fact that it has remained registered in the
name of Genaro who is the common ancestor of both parties herein, coowned
property. All, or both Teodoro Teodoro and respondents are entitled to exercise the
right of possession as coowners. Neither party can exclude the other from
possession. Although the property remains unpartitioned, the respondents in fact
possess specific areas. Teodoro Teodoro can likewise point to a specific area, which
is that which was possessed by Petra. Teodoro Teodoro cannot be dispossessed of
such area, not only by virtue of Petras bequeathal in his favor but also because of

194
his own right of possession that comes from his coownership of the property. As
the RTC concluded, petitioners, as heirs substituting Teodoro Teodoro in this suit,
should be restored in the lawful possession of the disputed area.

(2) Ining v. Vega


G.R. No. 174727
12 August 2013

No prescription shall run in favor of a co-owner or co-heir against his co-owners or co-
heirs so long as he expressly or impliedly recognizes the co-ownership.

FACTS. Herein petitioners, except for Ramon Tresvalles (Tresvalles) and Roberto
Tajonera (Tajonera), are Gregorias grandchildren or spouses thereof (Gregorias
heirs).

In 1997, acting on the claim that one-half of subject property belonged to him as
Romanas surviving heir, Leonardo filed with the Regional Trial Court (RTC) of
Kalibo, Aklan Civil Case No. 5275 for partition, recovery of ownership and
possession, with damages, against Gregorias heirs.

In their Answer with counterclaim, Teodora, Camilo, Adolfo, Lucimo Jr. and
Herminigildo claimed that Leonardo had no cause of action against them; that they
have become the sole owners of the subject property through Lucimo Sr. who
acquired the same in good faith by sale from Juan Enriquez (Enriquez), who in turn
acquired the same from Leon, and Leonardo was aware of this fact; that they were in
continuous, actual, adverse, notorious and exclusive possession of the property with
a just title; that they have been paying the taxes on the property; that Leonardos
claim is barred by estoppel and laches; and that they have suffered damages and
were forced to litigate as a result of Leonardos malicious suit. They prayed that Civil
Case No. 5275 be dismissed; that Leonardo be declared to be without any right to
the property; that Leonardo be ordered to surrender the certificate of title to the
property.

ISSUE. Is Leonardo entitled to a share in Leons estate?

RULING. Yes. The finding that Leon did not sell the property to Lucimo Sr. had
long been settled and had become final for failure of petitioners to appeal. Thus, the
property remained part of Leons estate. It then concluded that no such sale from
Leon to Lucimo Sr. ever took place. Despite this finding, petitioners did not appeal.

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Consequently, any doubts regarding this matter should be considered settled. Thus,
petitioners insistence on Lucimo Sr.s 1943 purchase of the property to reinforce
their claim over the property must be ignored. Since no transfer from Leon to
Lucimo Sr. took place, the subject property clearly remained part of Leons estate
upon his passing in 1962.

Since Leon died without issue, his heirs are his siblings, Romana and Gregoria, who
thus inherited the property in equal shares. In turn, Romanas and Gregorias heirs
the parties herein became entitled to the property upon the sisters passing.

Thus, having succeeded to the property as heirs of Gregoria and Romana, petitioners
and respondents became co-owners thereof. As co-owners, they may use the
property owned in common, provided they do so in accordance with the purpose for
which it is intended and in such a way as not to injure the interest of the co-
ownership or prevent the other co-owners from using it according to their rights.
They have the full ownership of their parts and of the fruits and benefits pertaining
thereto, and may alienate, assign or mortgage them, and even substitute another
person in their enjoyment, except when personal rights are involved. Each co-owner
may demand at any time the partition of the thing owned in common, insofar as his
share is concerned. Finally, no prescription shall run in favor of one of the co-heirs
against the others so long as he expressly or impliedly recognizes the co-ownership.
In order that the title may prescribe in favor of a co-owner, the following requisites
must concur: (1) the co-owner has performed unequivocal acts of repudiation
amounting to an ouster of the other co-owners; (2) such positive acts of repudiation
have been made known to the other co-owners; and (3) the evidence thereof is clear
and convincing.

In fine, since none of the co-owners made a valid repudiation of the existing co-
ownership, Leonardo could seek partition of the property at any time.

(3) Catedrilla v. Lauron


15 April 2013

FACTS. On February 12, 2003, petitioner Rey Castigador Catedrilla filed with the
Municipal Trial Court a Complaint for ejectment against the spouses Mario and
Margie Lauron. In their Answer, respondents claimed that petitioner had no cause of
action against them, since they are not the owners of the residential building
standing on petitioner's lot, but Mildred Kascher sister of respondent Margie, as
shown by the tax declaration in Mildred's name. MTC ordered defendants to vacate

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the lot in question. The MTC found that from the allegations and evidence presented,
it appeared that petitioner is one of the heirs of Lilia Castigador Catedrilla, the
owner of the subject lot and that respondents are occupying the subject lot; that
petitioner is a party who may bring the suit in accordance with Article 487 of the
Civil Code; and as a co-owner, petitioner is allowed to bring this action for ejectment
under Section 1, Rule 70 of the Rules of Court. RTC affirmed the decision of the MTC.
CA reversed and set aside the decision of RTC. The CA found that only petitioner
filed the case for ejectment against respondents and ruled that the other heirs
should have been impleaded as plaintiffs citing Section 1, Rule 7 and Section 7, Rule
3 of the Rules of Court; that the presence of all indispensable parties is a condition
sine qua non for the exercise of judicial power; that when an indispensable party is
not before the court, the action should be dismissed as without the presence of all
the other heirs as plaintiffs, the trial court could not validly render judgment and
grant relief in favor of the respondents.

ISSUE. W/N the petitioners can file the action without impleading his co-owners

RULING. Yes, Petitioner can file the action for ejectment without impleading his
co-owners.

ART. 487. Any one of the co-owners may bring an action in ejectment.

This article covers all kinds of action for the recovery of possession and recovery of
ownership. A co-owner may bring such an action, without the necessity of joining all
the other co-owners as co-plaintiffs, because the suit is deemed to be instituted for
the benefit of all. If the action is for the benefit of the plaintiff alone, such that he
claims possession for himself and not for the co-ownership, the action will not
prosper.

(4) Vda. de Figuracion v. Figuracion-Gerilla


G.R. No. 151334
13 February 2013

FACTS. The parties are the heirs of Leandro Figuracion (Leandro) who died
intestate in May 1958. Petitioner Carolina is the surviving spouse. The other
petitioners Elena Figuracion-Ancheta, Hilaria A. Figuracion (Hilaria), Felipa
Figuracion-Manuel (Felipa), Quintin Figuracion, and Mary Figuracion-Ginez and
respondent Emilia were Carolina and Leandros children.

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Subject of the dispute are two parcels of land both situated in Urdaneta, Pangasinan,
which were acquired by Leandro during his lifetime. Both lands were registered in
the name of "Leandro Figuracion married to Carolina Adviento". Leandro executed a
Deed of Quitclaim over the above real properties in favor of his six (6) children.

Their shares, however, were not delineated with particularity because spouses
Leandro and Carolina reserved the lots and its fruits for their expenses.

Also involved in the controversy is Lot No. 707 of the Cadastral Survey of Urdaneta,
Pangasinan, originally owned by Eulalio Adviento (Eulalio). Eulalio begot Agripina
Adviento (Agripina) with his first wife Marcela Estioko (Marcela), whom Eulalio
survived. When he remarried, Eulalio had another daughter, herein petitioner
Carolina, with his second wife, Faustina Escabesa (Faustina).

In 1971, Emilia and her family went to the United States and returned to the
Philippines only in 1981. Upon her return and relying on the Deed of Quitclaim, she
built a house on the eastern half of Lot No. 707.

The legal debacle of the Figuracions started in 1994 when Hilaria and her agents
threatened to demolish the house of Emilia who, in retaliation, was prompted to
seek the partition of Lot No. 707 as well as Lot Nos. 2299 and 705. The matter was
initially brought before the Katarungang Pambarangay, but no amicable settlement
was reached by the parties. On May 23, 1994, respondent Emilia instituted the
herein Complaint for the partition of Lot Nos. 2299, 705 and 707, annulment of the
Affidavit of Self- Adjudication, Deed of Absolute Sale and TCT No. 42244,
reconveyance of eastern half portion of Lot No. 707, quieting of title and damages.

ISSUE. W/N there needs to be a prior settlement of Leandros intestate estate


before the properties can be partitioned or distributed.

RULING. The first stage in an action for partition is the settlement of the issue of
ownership. Such an action will not lie if the claimant has no rightful interest in the
subject property. In fact, the parties filing the action are required by the Rules of
Court to set forth in their complaint the nature and the extent of their title to the
property. It would be premature to effect a partition until and unless the question of
ownership is first definitely resolved.

Here, the respondent traces her ownership over the eastern half of Lot No. 707 from
the Deed of Quitclaim executed by Agripina, who in turn, was the co-owner thereof
being one of the legitimate heirs of Eulalio. It is well to recall that the petitioners

198
failed to categorically dispute the existence of the Deed of Quitclaim. Instead, they
averred that it has been rendered ineffective by TCT No. 42244 in the name of Felipa
and Hilariathis contention is, of course, flawed.

Mere issuance of a certificate of title in the name of any person does not foreclose
the possibility that the real property may be under coownership with persons not
named in the certificate, or that the registrant may only be a trustee, or that other
parties may have acquired interest over the property subsequent to the issuance of
the certificate of title. Stated differently, placing a parcel of land under the mantle of
the Torrens system does not mean that ownership thereof can no longer be
disputed. The certificate cannot always be considered as conclusive evidence of
ownership. In this case, co-ownership of Lot No. 707 was precisely what respondent
Emilia was able to successfully establish, as correctly found by the RTC and affirmed
by the CA.

In a contract of sale of co-owned property, what the vendee obtains by virtue of such
a sale are the same rights as the vendor had as co-owner, and the vendee merely
steps into the shoes of the vendor as co-owner. Hilaria and Felipa did not acquire
the undivided portion pertaining to Agripina, which has already been effectively
bequeathed to respondent Emilia as early as November 28, 1961 thru the Deed of
Quitclaim. In turn, being the successor-in-interest of Agripinas share in Lot No. 707,
respondent Emilia took the formers place in the co-ownership and as such co-
owner, has the right to compel partition at any time.

(5) Pascual v. Ballesteros


G.R. No. 186269
15 February 2012

This Court has long established the rule that notwithstanding actual knowledge of a
co-owner, the latter is still entitled to a written notice from the selling co-owner in
order to remove all uncertainties about the sale, its terms and conditions, as well as its
efficacy and status.

FACTS. This is a petition for review on certiorari under Rule 45 of the Rules of
Court filed by the spouses Roman A. Pascual and Mercedita R. Pascual (Spouses
Pascual), Francisco A. Pascual (Francisco), Margarita Corazon D. Mariano
(Margarita), Edwin D. Mariano and Danny R. Mariano (petitioners) assailing the
Decision dated July 29, 2008 and Resolution dated January 30, 2009 issued by the
Court of Appeals (CA) in CA-G.R. CV No. 89111.

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The case involves a 1,539 square meter parcel of land situated in Barangay Sta.
Maria, Laoag City and covered by Transfer Certificate of Title (TCT) No. T-30375 of
the Laoag City registry. The subject property is owned by the following persons,
with the extent of their respective shares over the same: (1) the spouses Albino and
Margarita Corazon Mariano, 330 square meters; (2) Angela Melchor (Angela), 466.5
square meters; and (3) the spouses Melecio and Victoria Melchor (Spouses
Melchor), 796.5 square meters.

Upon the death of the Spouses Melchor, their share in the subject property was
inherited by their daughter Lorenza Melchor Ballesteros (Lorenza). Subsequently,
Lorenza and her husband Antonio Ballesteros (respondents) acquired the share of
Angela in the subject property by virtue of an Affidavit of Extrajudicial Settlement
with Absolute Sale dated October 1, 1986.

On August 11, 2000, Margarita, then already widowed, together with her children,
sold their share in the subject property to Spouses Pascual and Francisco.

COMPLAINANT. Consequently, the respondents, claiming that they did not receive
any written notice: thus, they are entitled to redeem the portion of the subject
property sold to Spouses Pascual and Francisco being co-owners of the same.

RESPONDENT. The petitioners claimed that there was no co-ownership over the
subject property considering that the shares of the registered owners thereof had
been particularized, specified and subdivided and, hence, the respondents has no
right to redeem the portion of the subject property that was sold to them.

The RTC held that the respondents and the predecessors-in-interest of the
petitioners are co-owners of the subject property considering that the petitioners
failed to adduce any evidence showing that the respective shares of each of the
registered owners thereof were indeed particularized, specified and subdivided.
And, ruled that the respondents failed to seasonably exercise their right of
redemption within the 30-day period pursuant to Article 1623 of the Civil Code. On
appeal, the CA reversed the trial courts decision, allowing the respondents to
exercise their right of redemption.

ISSUE. Does the petitioner have a right of redemption?

RULING. Yes. The written notice of sale is mandatory. This Court has long
established the rule that notwithstanding actual knowledge of a co-owner, the latter
is still entitled to a written notice from the selling co-owner in order to remove all

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uncertainties about the sale, its terms and conditions, as well as its efficacy and
status.

From these premises, we ruled that Petitioner-heirs have not lost their right to
redeem, for in the absence of a written notification of the sale by the vendors, the
30-day period has not even begun to run. The right to exercise their right of legal
redemption exists, and the running of the period for its exercise has not even been
triggered because they have not been notified in writing of the fact of sale.

(6) Gonzales v. Bugaay


G.R. No. 17300
22 February 2012

FACTS. The deceased spouses Bartolome Ayad and Marcelina Tejada (Spouses
Ayad) had five (5) children: Enrico, Encarnacion, Consolacion, Maximiano and
Mariano. The latter, who was single, predeceased his parents on December 4, 1943.
Marcelina died in September 1950 followed by Bartolome much later on February
17, 1964.

Enrico has remained single. Encarnacion died on April 8, 1966 and is survived by
her children, Nenita Gonzales, Generosa Gonzales, Felipe Gonzales, Lolita Gonzales,
Dolores Gonzales, Conchita Gonzales and Beatriz Gonzales, the petitioners in this
case. Consolacion, meanwhile, was married to the late Imigdio Bugaay. Their
children are Mariano Bugaay, Alicia Bugaay, Amelita Bugaay, Rodolfo Bugaay,
Letecia Bugaay, Lydia Bugaay, Luzviminda Bugaay and Belen Bugaay, respondents
herein. Maximiano died single and without issue on August 20, 1986. The spouses of
petitioners, except Nenita, a widow, and those of the respondents, except Lydia and
Belen, were joined as parties in this case.

In their Amended Complaintfor Partition and Annulment of Documents with


Damages dated February 5, 1991 against Enrico, Consolacion and the respondents,
petitioners alleged, inter alia, that the only surviving children of the Spouses Ayad
are Enrico and Consolacion, and that during the Spouses Ayad's lifetime, they owned
several agricultural as well as residential properties.

Petitioners averred that in 1987, Enrico executed fraudulent documents covering all
the properties owned by the Spouses Ayad in favor of Consolacion and respondents,
completely disregarding their rights. Thus, they prayed, among others, for the
partition of the Spouses Ayad's estate, the nullification of the documents executed

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by Enrico, and the award of actual, moral and exemplary damages, as well as
attorney's fees.

As affirmative defenses, Enrico, Consolacion and respondents claimed that


petitioners had long obtained their advance inheritance from the estate of the
Spouses Ayad, and that the properties sought to be partitioned are now individually
titled in respondents' names.

After due proceedings, the RTC rendered a Decision dated November 24, 1995,
awarding one-fourth pro-indiviso share of the estate each to Enrico, Maximiano,
Encarnacion and Consolacion as the heirs of the Spouses Ayad, excluding Mariano
who predeceased them. It likewise declared the Deed of Extrajudicial Settlement
and Partition executed by Enrico and respondents, as well as all other documents
and muniments of title in their names, as null and void. It also directed the parties to
submit a project of partition within 30 days from finality of the Decision.

Aggrieved, respondents elevated their case to the CA through a petition for


certiorari, imputing grave abuse of discretion on the part of the RTC in denying their
demurrer notwithstanding petitioners' failure to present the documents sought to
be annulled. On March 23, 2006, the CA rendered the assailed Decision reversing
and setting aside the Orders of the RTC.

ISSUE. Whether the CA's dismissal of the Amended Complaint in accordance with
law, rules of procedure and jurisprudence.

RULING. The Court has previously explained the nature of a demurrer to evidence
in the case of Celino v. Heirs of Alejo and Teresa Santiago as follows:

A demurrer to evidence is a motion to dismiss on the ground of insufficiency of


evidence and is presented after the plaintiff rests his case. It is an objection by one of
the parties in an action, to the effect that the evidence which his adversary produced
is insufficient in point of law, whether true or not, to make out a case or sustain the
issue. The evidence contemplated by the rule on demurrer is that which pertains to
the merits of the case.

In passing upon the sufficiency of the evidence raised in a demurrer, the court is
merely required to ascertain whether there is competent or sufficient proof to
sustain the judgment. Being considered a motion to dismiss, thus, a demurrer to
evidence must clearly be filed before the court renders its judgment.

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In this case, respondents demurred to petitioners' evidence after the RTC
promulgated its Decision. While respondents' motion for reconsideration and/or
new trial was granted, it was for the sole purpose of receiving and offering for
admission the documents not presented at the trial. As respondents never complied
with the directive but instead filed a demurrer to evidence, their motion should be
deemed abandoned. Consequently, the RTC's original Decision stands.

Accordingly, the CA committed reversible error in granting the demurrer and


dismissing the Amended Complaint a quo for insufficiency of evidence. The
demurrer to evidence was clearly no longer an available remedy to respondents and
should not have been granted, as the RTC had correctly done.

(7) Spouses Del Campo v. Court of Appeals


351 SCRA 1

FACTS. Salome, Consorcia, Alfredo, Maria, Rosalia, Jose, Quirico and Julita, all
surnamed Bornales, were the original co-owners of Lot 162 of the Cadastral Survey
of Pontevedra, Capiz under Original Certificate of Title No. 18047. As appearing
therein, the lot, which consisted of a total area of 27,179 square meters was divided
in aliquot shares among the eight (8) co-owners as follows: Salome Bornales 4/16,
Consorcia Bornales 4/16, Alfredo Bornales 2/16, Maria Bornales 2/16, Jose
Bornales 1/16, Quirico Bornales 1/16, Rosalia Bornales 1/16, Julita Bornales 1/16.
On July 14, 1940, Salome sold part of her 4/16 share in Lot 162 for P200.00 to
Soledad Daynolo. In the Deed of Absolute Sale signed by Salome and two other co-
owners, Consorcia and Alfredo, the portion of Lot 162 sold to Soledad.

Thereafter, Soledad Daynolo immediately took possession of the land described


above and built a house thereon. A few years later, Soledad and her husband,
Simplicio Distajo, mortgaged the subject portion of Lot 162 as security for a P400.00
debt to Jose Regalado, Sr. This transaction was evidenced by a Deed of Mortgage[2]
dated May 1, 1947. On April 14, 1948, three of the eight co-owners of Lot 162,
specifically, Salome, Consorcia and Alfredo, sold 24,993 square meters of said lot to
Jose Regalado, Sr.

On May 4, 1951, Simplicio Distajo, heir of Soledad Daynolo who had since died, paid
the mortgage debt and redeemed the mortgaged portion of Lot 162 from Jose
Regalado, Sr. The latter, in turn, executed a Deed of Discharge of Mortgage[3] in
favor of Soledads heirs, namely: Simplicio Distajo, Rafael Distajo and Teresita
Distajo-Regalado.

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In 1987, petitioners Manuel and Salvacion del Campo brought this complaint for
repartition, resurvey and reconveyance against the heirs of the now deceased Jose
Regalado, Sr. Petitioners claimed that they owned an area of 1,544 square meters
located within Lot 162-C-6 which was erroneously included in TCT No. 14566 in the
name of Regalado.

PETITIONER. Petitioners alleged that they occupied the disputed area as


residential dwelling ever since they purchased the property from the Distajos way
back in 1951. They also declared the land for taxation purposes and paid the
corresponding taxes.

RESPONDENT. The said heirs sold the redeemed portion of Lot 162 for P1,500.00
to herein petitioners, the spouses Manuel Del Campo and Salvacion Quiachon.
Meanwhile, Jose Regalado, Sr. caused the reconstitution of Original Certificate of
Title No. 18047. The reconstituted OCT No. RO-4541 initially reflected the shares of
the original co-owners in Lot 162.However, title was transferred later to Jose
Regalado, Sr. who subdivided the entire property into smaller lots, each covered by
a respective title in his name. One of these small lots is Lot No. 162-C-6 with an area
of 11,732 square meters which was registered on February 24, 1977 under TCT No.
14566.

ISSUES. (1) Would the sale by a co-owner of a physical portion of an undivided


property held in common be valid?

(2) Is respondent estopped from denying petitioners right and title over the
disputed area?

(3) Under the facts and circumstances duly established by the evidence, are
petitioners entitled to repartition, resurvey and reconveyance of the property in
question?

RULING. (1) Applying this principle to the instant case, there can be no doubt that
the transaction entered into by Salome and Soledad could be legally recognized in
its entirety since the object of the sale did not even exceed the ideal shares held by
the former in the co-ownership. As a matter of fact, the deed of sale executed
between the parties expressly stipulated that the portion of Lot 162 sold to Soledad
would be taken from Salomes 4/16 undivided interest in said lot, which the latter
could validly transfer in whole or in part even without the consent of the other co-
owners. Salomes right to sell part of her undivided interest in the co-owned
property is absolute in accordance with the well-settled doctrine that a co-owner

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has full ownership of his pro-indiviso share and has the right to alienate, assign or
mortgage it, and substitute another person in its enjoyment[13] Since Salomes clear
intention was to sell merely part of her aliquot share in Lot 162, in our view no valid
objection can be made against it and the sale can be given effect to the full extent.

We are not unaware of the principle that a co-owner cannot rightfully dispose of a
particular portion of a co-owned property prior to partition among all the co-
owners. However, this should not signify that the vendee does not acquire anything
at all in case a physically segregated area of the co-owned lot is in fact sold to him.
Since the co-owner/vendors undivided interest could properly be the object of the
contract of sale between the parties, what the vendee obtains by virtue of such a sale
are the same rights as the vendor had as co-owner, in an ideal share equivalent to
the consideration given under their transaction. In other words, the vendee steps
into the shoes of the vendor as co-owner and acquires a proportionate abstract
share in the property held in common.

Resultantly, Soledad became a co-owner of Lot 162 as of the year 1940 when the
sale was made in her favor. It follows that Salome, Consorcia and Alfredo could not
have sold the entire Lot 162 to Jose Regalado, Sr. on April 14, 1948 because at that
time, the ideal shares held by the three co-owners/vendors were equivalent to only
10/16 of the undivided property less the aliquot share previously sold by Salome to
Soledad. Based on the principle that no one can give what he does not have,[14]
Salome, Consorcia and Alfredo could not legally sell the shares pertaining to Soledad
since a co-owner cannot alienate more than his share in the co-ownership. We have
ruled many times that even if a co-owner sells the whole property as his, the sale
will affect only his own share but not those of the other co-owners who did not
consent to the sale. Since a co-owner is entitled to sell his undivided share, a sale of
the entire property by one co-owner will only transfer the rights of said co-owner to
the buyer, thereby making the buyer a co-owner of the property.

(2) Consequently, respondents are estopped from asserting that they own the
subject land in view of the Deed of Mortgage and Discharge of Mortgage executed
between Regalado and petitioners predecessor-in-interest. As petitioners correctly
contend, respondents are barred from making this assertion under the equitable
principle of estoppel by deed, whereby a party to a deed and his privies are
precluded from asserting as against the other and his privies any right or title in
derogation of the deed, or from denying the truth of any material fact asserted in it.
A perusal of the documents evidencing the mortgage would readily reveal that
Soledad, as mortgagor, had declared herself absolute owner of the piece of land now

205
being litigated. This declaration of fact was accepted by Regalado as mortgagee and
accordingly, his heirs cannot now be permitted to deny it.

(3) An action for reconveyance based on an implied trust ordinarily prescribes in


ten years. But when the right of the true and real owner is recognized, expressly or
implicitly such as when he remains undisturbed in his possession, the said action is
imprescriptible, it being in the nature of a suit for quieting of title.[19] Having
established by clear and convincing evidence that they are the legal owners of the
litigated portion included in TCT No. 14566, it is only proper that reconveyance of
the property be ordered in favor of petitioners. The alleged incontrovertibility of
Regalados title cannot be successfully invoked by respondents because certificates
of title merely confirm or record title already existing and cannot be used to protect
a usurper from the true owner or be used as a shield for the commission of fraud.

(8) Titan Construction v. Court of Appeals


G.R. No. 169548
15 March 2010

All property acquired during the marriage, whether the acquisition appears to have
been made, contracted or registered in the name of one or both spouses, is presumed to
be conjugal unless the contrary is proved.

FACTS. Manuel A. David, Sr. and Martha S. David were married on March 25, 1957.
In 1970, the spouses acquired a 602 square meter lot located at White Plains,
Quezon City, which was registered in the name of MARTHA S. DAVID, of legal age,
Filipino, married to Manuel A. David. In 1976, the spouses separated de facto, and
no longer communicated with each other. Sometime in March 1995, Manuel
discovered that Martha had previously sold the property to Titan Construction
Corporation for P1,500,000.00 through a Deed of Sale.

Thus, on March 13, 1996, Manuel filed a Complaint for Annulment of Contract and
Recovenyance against Titan before the RTC of Quezon City. Manuel alleged that the
sale executed by Martha in favor of Titan was without his knowledge and consent,
and therefore void. He prayed that the Deed of Sale, that the property be reconveyed
to the spouses, and that a new title be issued in their names. In its Answer with
Counterclaim, Titan claimed that it was a buyer in good faith and for value because it
relied on a Special Power of Attorney (SPA) signed by Manuel which authorized
Martha to dispose of the property on behalf of the spouses. Titan thus prayed for the
dismissal of the complaint.

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In his unverified Reply, Manuel claimed that the SPA was spurious, and that the
signature purporting to be his was a forgery; hence, Martha was wholly without
authority to sell the property. On March 7, 2000, the RTC issued a Decision which
invalidated both the Deed of Sale ordered Titan to reconvey the property to Martha
and Manuel. In its Decision dated July 20, 2004, the CA affirmed the Decision of the
trial court.

ISSUE. Is the property part of the spouses conjugal partnership?

RULING. Article 116 of the Family Code is even more unequivocal in that all
property acquired during the marriage, whether the acquisition appears to have
been made, contracted or registered in the name of one or both spouses, is
presumed to be conjugal unless the contrary is proved.

We are not persuaded by Titans arguments that the property was Marthas exclusive
property because Manuel failed to present before the RTC any proof of his income in
1970, hence he could not have had the financial capacity to contribute to the
purchase of the property in 1970; and that Manuel admitted that it was Martha who
concluded the original purchase of the property. In consonance with our ruling in
Spouses Castro v. Miat, Manuel was not required to prove that the property was
acquired with funds of the partnership. Rather, the presumption applies even when
the manner in which the property was acquired does not appear. Here, we find that
Titan failed to overturn the presumption that the property, purchased during the
spouses marriage, was part of the conjugal partnership.

(9) Iglesia ni Kristo v. Penferrada


G.R. No. 168943
27 October 2006

A co-owner may bring such an action, even without joining all the other co-owners as
co-plaintiffs, because the suit is deemed to be instituted for the benefit of all.

FACTS. Plaintiffs/respondents alleged therein that, during his lifetime, Enrique


Santos was the owner of a 936-square-meter parcel of land located in Tandang Sora,
Quezon City covered by Transfer Certificate of Title (TCT) No. 57272 issued by the
Register of Deeds on July 27, 1961 which cancelled TCT No. 57193-289. He had been
in possession of the owners duplicate of said title and had been in continuous, open,
adverse and peaceful possession of the property. He died on February 9, 1970 and
was survived by his wife, Alicia Santos, and other plaintiffs, who were their children.

207
Sometime in February 1996, plaintiffs learned that defendant was claiming
ownership over the property based on TCT No. 321744 issued on September 18,
1984 which, on its face, cancelled TCT No. 320898, under the name of the Philippine
National Bank, which allegedly cancelled TCT No. 252070 in the names of the
spouses Marcos and Romana dela Cruz. Enrique Santos, during his lifetime, and his
heirs, after his death, never encumbered or disposed the property.

In 1996, plaintiffs had the property fenced but defendant deprived them of the final
use and enjoyment of their property. Plaintiffs filed a complaint praying that the
judgment be rendered quieting their title and/or recover possession of their said
property in the name of deceased Enrique Santos, covered by said TCT No. RT-
110323(57272) of the Register of Deeds at Quezon City. Defendant/ petitioner
claimed that the complaint is defective and moved for the dismissal of the
complaint. One reason is that, although there is an allegation that Enrique Santos
represents the other heirs, there is nothing in the pleading to show the latters
authority to that effect. The trial court denied the defendants motion to dismiss and
was affirmed by the CA.

ISSUE. Did the CA err when it held in favor of the authority of the Respondent
Enrique G. Santos to represent his co- heirs in the filing of the complaint against the
petitioner.

RULING. No. Respondents are considered co-owners pro indiviso of the whole
property since no specific portion yet has been adjudicated to any of the heirs. As
such co-owners, each of the heirs may properly bring an action for ejectment,
forcible entry and detainer, or any kind of action for the recovery of possession of
the subject properties. Consequently, as one of the heirs and principal party, the
lone signature of Enrique G. Santos in the verification and certification is sufficient
for the RTC to take cognizance of the case. The commonality of their interest gave
Enrique G. Santos the authority to inform the RTC on behalf of the other plaintiffs
therein that they have not commenced any action or claim involving the same issues
in another court or tribunal, and that there is no other pending action or claim in
another court or tribunal involving the same issues. Thus, a co-owner may bring
such an action, even without joining all the other co-owners as co-plaintiffs, because
the suit is deemed to be instituted for the benefit of all. Hence, the RTC correctly
denied the motion to dismiss filed by petitioner and the CA did not err in affirming
the application of the rule on substantial compliance. The petition was denied.

208
(10) De Guia v. Court of Appeals
G.R. No. 120864
8 October 2003

FACTS. On 12 May 1986, ABEJO instituted an action for recovery of possession


with damages against DE GUIA.

ABEJO alleged that he is the owner of the undivided portion of a property used as
a fishpond. And that De Guias possession of such constituted damages and
prejudice against him. ABEJO asked the trial court to order DE GUIA to vacate the
premises and to pay damages.

DE GUIA, for his answer, ABEJO is not the owner of the entire FISHPOND but the
heirs of Primitiva Lejano who authorized him to possess the entire FISHPOND.
Further he forwarded that ABEJOs ownership of the undivided portion of the
FISHPOND is void.

The parties submitted their pre-trial brief and Hearing commenced on 30 July 1990.
The evidence adduced by plaintiff traced the acquisition and possession of the
subject property. On the other hand, defendants evidence tends to show that the
entire fishpondwas leased to him and that he became the absolute owner of one half
of the undivided area of the fishpond.
The trial court rendered a decision in favor of the plaintiff and ordered petitioner to
vacate the premises. The Court of Appeals found DE GUIAs appeal without merit
and affirmed the trial courts decision. Hence the present recourse.

ISSUE. Whether or not the petitioner have rights over the property as a co-owner.

RULING. Under Article 484 of the Civil Code, "there is co-ownership whenever the
ownership of an undivided thing or right belongs to different persons." A co-owner
of an undivided parcel of land is an "owner of the whole, and over the whole he
exercises the right of dominion, but he is at the same time the owner of a portion
which is truly abstract."On the other hand, there is no co-ownership when the
different portions owned by different people are already concretely determined and
separately identifiable, even if not yet technically described.

Following the features of co-ownership, while Abejo and DE Guia have equal shares
in the fishpond, they also have the same right in a qualitative sense as co-owners. As
co-owners, Abejo and DE Guia may jointly exercise the right of dominion over the

209
entire fishpond until they partition it by identifying or segregating their respective
portions.

Since a co-ownership subsists between ABEJO and DE GUIA, judicial or extra-judicial


partition is the proper recourse.

Further the Court reiterated that any co-owner may file an action not only against a
third person, but also against another co-owner who takes exclusive possession and
asserts exclusive ownership of the property.However, the only effect of such action
is recognition of the co-ownership. The courts cannot proceed with the actual
partitioning of the co-owned property.

With respect to the payment of damages and rentals, the Court affirmed the Court of
Appeals decision.

(11) Villanueva v. Court of Appeals


G.R. No. 143286
14 April 2004

FACTS. Plaintiff Eusebia Retuya, is the legal wife of defendant Nicolas Retuya.
They begot five (5) children. During their marriage they acquired real properties in
Mandaue City and Consolacion, Cebu. Nicolas is also a co-owner of a parcel of land
situated in Mandaue City which he inherited from his parents as well as the
purchasers of hereditary shares of approximately eight (8) parcels of land in
Mandaue City.

In 1945, Nicolas no longer lived with his legitimate family and cohabited with Pacita
Villanueva; defendant Procopio Villanueva is their illegitimate son. Nicolas, then,
was the only person who received the income of the above-mentioned properties.
Pacita Villanueva has no occupation; she had no properties of her own from which
she could derive income.

In 1985, Nicolas suffered a stroke and can neither talk nor walk. Natividad Retuya
knew of the physical condition of her father because they visited him at the hospital.
From the time Nicolas suffered a stroke on January 27, 1985 and until the present, it
is defendant Procopio who has been receiving the income of these properties.
Natividad went to Procopio to negotiate because at this time their father Nicolas
was already senile and has a childlike mind, but Procopio refused.

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Plaintiff, complained to the Barangay Captain for reconciliation/mediation but no
settlement was reached, hence, the said official issued a certification to file action.
Written demands were made by plaintiff, through her counsel, to the defendants,
including the illegitimate family asking for settlement but no settlement was
reached by the parties.

The RTC ruled in favor of Eusebia stating that the subject properties are conjugal in
nature. The CA concurred with the findings of the trial court.

ISSUE. Are the subject properties co-owned by Pacita and Nicolas or are they
conjugal in nature?

RULING. The subject property is conjugal.

The Family Code provisions on conjugal partnerships govern the property relations
between Nicolas and Eusebia even if they were married before the effectivity of
Family Code. Under the Family Code, if the properties are acquired during the
marriage, the presumption is that they are conjugal. The tax declarations covering
the subject properties, along with the unrebutted testimony of Eusebias witnesses,
establish the fact that the properties were acquired during their marriage.

Even if the deed of sale, the transfer certificate of title and the tax declaration of Lot
No. 152 are all in the name of Pacita, the petitioners cannot claim that she is the real
owner of the property. The totality of the evidence reveals that this was merely just
one of the several schemes Nicolas employed to deprive Eusebia of their conjugal
property. Furthermore, even if the tax declarations are in the name of Nicolas alone,
this does not mean that Nicolas exclusively owns the properties. Under Article 116
of the Family Code, all property acquired by the spouses during the marriage,
regardless in whose name the property is registered, is presumed conjugal unless
proved otherwise.

Petitioners reliance on Article 148 of the Family Code is misplaced. Under Article
148 there must be proof of actual joint contribution by both the live-in partners
before the property becomes co-owned by them in proportion to their contribution.
The presumption of equality of contribution arises only in the absence of proof of
their proportionate contributions, subject to the condition that actual joint
contribution is proven first. Simply put, proof of actual contribution by both parties
is required, otherwise there is no co-ownership and no presumption of equal
sharing. Petitioners failed to show proof of actual contribution by Pacita in the
acquisition of Lot No. 152. In short, petitioners failed to prove that Pacita bought Lot

211
No. 152 with her own money, or that she actually contributed her own money to
acquire it.

(12) Avila v. Barabat


G.R. No. 141993
17 March 2006

FACTS. This petition for review on certiorari under Rule 45 of the Rules of Court
assails the July 30, 1999 decision1 and January 19, 2000 resolution of the Court of
Appeals in CA-G.R. CV No. 50899.

A parcel of land in Cebu is registered in the name of Anunciacion Bahena vda de


Nemeo. Upon her death, ownership was transferred to her five children, the
petitioners in this case. These heirs built respective houses on the lot. Respondent
Barabat leased a portion of the house owned by Avila, his wife moved in with him
after their marriage. Avila relocated to CDO and decided to sell her hose and share in
the lot. Respondents agreed to buy it, evidenced by a private document.
Respondents stopped paying rent and took possession of the property as owners
and assumed the payment of realty taxes. The spouses received a letter informing
them that Avila sold the house and share in the lot to the spouses Adlawan. The
spouses demanded that Avila execute a public document evidencing the sale of the
property to them, but Avila refused.
Respondents filed complaint for quieting of title with the RTC. The complaint was
subsequently amended to include annulment of the deed of sale to the spouses
Adlawan, specific performance, partition and damages as additional causes of
action. RTC rendered judgment in favor of respondents. It declared Exhibit "A" as a
valid and lawful deed of sale. It nullified the subsequent deed of sale between Avila
and the spouses Adlawan. Avila was ordered to execute a formal and notarized deed
of sale in favor of respondents. It also held petitioners liable for moral damages and
attorneys fees. Petitioners appealed to the CA. CA affirmed the decision of the RTC
in toto. They filed a motion for reconsideration but it was denied.

COMPLAINANT. Avila denied having offered to sell her property to respondents.


She claimed that respondents gave her an P8,000 loan conditioned on her signing a
document constituting her house and share in lot no. 348 as security for its
payment. She alleged that she innocently affixed her signature on Exhibit "A" which
was prepared by respondents and which they now claim as a private deed of sale
transferring ownership to them.

212
Petitioners claim that the appellate court erred in ruling that the transaction
between respondents and Avila was an absolute sale, not an equitable mortgage.
They assert that the facts of the case fell within the ambit of Article 1602 in relation
to Article 1604 of the Civil Code on equitable mortgage because they religiously paid
the realty tax on the property and there was gross inadequacy of consideration.
They also claim that the court erred in denying them the right to redeem the
property and in ruling that there was implied partition by the acts of the parties.

RESPONDENT. Respondents were confronted by petitioner Januario Adlawan who


informed them that they had until March 1982 only to stay in Avilas place because
he was buying the property. Respondents replied that the property had already
been sold to them by Avila.

Respondents filed a complaint for quieting of title with the Regional Trial Court
(RTC) of Toledo City, Branch 29.3 Docketed as Civil Case No. T-53, the complaint
was subsequently amended to include annulment of the deed of sale to the spouses
Adlawan, specific performance, partition and damages as additional causes of
action. Respondents anchored their claim over the property to the July 17, 1979
private document which they presented as Exhibit "A."

ISSUE. Is the claim of right to redemption valid?

RULING. No. Art. 1623. The right of legal pre-emption or redemption shall not be
exercised except within thirty days from the notice in writing by the prospective
vendor, or by the vendor, as the case may be. The deed of sale shall not be recorded
in the Registry of Property, unless accompanied by an affidavit of the vendor that he
has given written notice thereof to all possible redemptioners.

The right of redemption of co-owners excludes that of adjoining owners. Petitioners


right to redeem would have existed only had there been co-ownership among
petitioners-siblings. But there was none. For this right to be exercised, co-ownership
must exist at the time the conveyance is made by a co-owner and the redemption is
demanded by the other co-owner or co-owner(s). However, by their own admission,
petitioners were no longer co-owners when the property was sold to respondents in
1979. The co-ownership had already been extinguished by partition. The regime of
co-ownership exists when the ownership of an undivided thing or right belongs to
different persons. By the nature of co-ownership, a co-owner cannot point to any
specific portion of the property owned in common as his own because his share in it
remains intangible and ideal.

213
The purpose of partition is to separate, divide and assign a thing held in common
among those to whom it belongs. By their own admission, petitioners already
segregated and took possession of their respective shares in the lot. Their respective
shares were therefore physically determined, clearly identifiable and no longer
ideal. Thus, the co-ownership had been legally dissolved. With that, petitioners
right to redeem any part of the property from any of their former co-owners was
already extinguished. As legal redemption is intended to minimize co-ownership,
once a property is subdivided and distributed among the co-owners, the community
ceases to exist and there is no more reason to sustain any right of legal redemption.

(13) Monteroso v. Court of Appeals


G.R. No. 105608
30 April 2008

FACTS. Don Fabian B. Monteroso, Sr., was a justice of the peace and a municipal
mayor of Cabadbaran, Agusan Del Norte who sired 8 children from 2 marriages.
Upon the death of his first wife, he filed for intestate proceedings for the 5 parcels of
land they owned, which was partitioned among his first 4 children and him in 1936.
One of his children from the first marriage, Benjamin, died in 1947. More than a year
later, Don Fabian passed away. Before and shortly after his demise, conveyances
involving parcels of land mentioned were purportedly made. During his second
marriage, he further acquired 4 more parcels of land, while he allegedly acquired an
additional 3 parcels of land after the partition of the 5 parcels of land with him and
his children from the first marriage. In 1969, Benjamins heirs filed an action for
recovery of property with damages against their full uncle Tirso, alleging that the
latter refused to hand over to them their fathers share of fourth parcel of land that
was included in the partition under the intestate proceedings. Tirso countered that
their full Aunt Soledad was in possession of Benjamins share. A year later, Tirso
filed for partition and damages with receivership against his stepmother and all his
full and half siblings and or their representatives, alleging that the 1936 partition
was null and void, that both parcels of land acquired by their father during the first
and second marriage were conjugal property; and those lots acquired during the
second marriage were not paraphernal properties of his stepmother.

The trial court, after 15 years, decided that both parties should pay each other for
the accrual of the rentals and/or other fruits that form part of the parcels of lands,
and to pay damages to the aggrieved heirs. The CA later affirmed with modification
the trial courts decision.

214
ISSUE. Does the CAs decision mean that the Spouses Cagampang admitted the
existence of a co-ownership?

RULING. Thus, the CA ruled that by invoking extinctive prescription as a defense,


the lone exception against imprescriptibility of action by a co-owner, the
Cagampang spouses are deemed to have contextually recognized the co-ownership
of Tirso and must have repudiated such co-ownership in order for acquisitive
prescription to set in. xxx Therefore, we hold that the CA did not err in finding that
the Cagampang spouses are effectively barred from invoking prescription, given that
the subject properties are conjugal properties of the decedent. Don Fabian, which
cannot be subjected to acquisitive prescription, the necessary consequence of
recognizing the co-ownership stake of other legal heirs.

(14) Cruz v. Catapang


G.R. No. 164110

FACTS. Petitioner Leonor B. Cruz, Luz Cruz and Norma Maligaya are the co-
owners of a parcel of land covering an area of 1,435 square meters located at
Barangay Mahabang Ludlod, Taal, Batangas. With the consent of Norma Maligaya,
one of the aforementioned co-owners, respondent Teofila M. Catapang built a house
on a lot adjacent to the abovementioned parcel of land sometime in 1992. The house
intruded, however, on a portion of the co-owned property. In the first week of
September 1995, petitioner Leonor B. Cruz visited the property and was surprised
to see a part of respondents house intruding unto a portion of the co-owned
property. She then made several demands upon respondent to demolish the
intruding structure and to vacate the portion encroaching on their property. The
respondent, however, refused and disregarded her demands.

On January 25, 1996, the petitioner filed a complaint for forcible entry against
respondent. The MCTC decided in favor of petitioner, ruling that consent of only one
of the co-owners is not sufficient to justify defendants construction of the house and
possession of the portion of the lot in question.

On appeal, the RTC, Branch 86, Taal, Batangas, affirmed the MCTCs ruling in a
Decision dated October 22, 2001.

ISSUE. Whether consent given by a co-owner of a parcel of land to a person to


construct a house on the co-owned property warrants the dismissal of a forcible
entry case filed by another co-owner against that person.

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RULING. A co-owner cannot give valid consent to another to build a house on the
co-owned property, which is an act tantamount to devoting the property to his or
her exclusive use.

Furthermore, Articles 486 and 491 of the Civil Code provide:

Art. 486. Each co-owner may use the thing owned in common, provided he
does so in accordance with the purpose for which it is intended and in such a
way as not to injure the interest of the co-ownership or prevent the other co-
owners from using it according to their rights. The purpose of the co-
ownership may be changed by agreement, express or implied.

Art. 491. None of the co-owners shall, without the consent of the others,
make alterations in the thing owned in common, even though benefits for all
would result therefrom. However, if the withholding of the consent by one
or more of the co-owners is clearly prejudicial to the common interest, the
courts may afford adequate relief.

Article 486 states each co-owner may use the thing owned in common provided he
does so in accordance with the purpose for which it is intended and in such a way as
not to injure the interest of the co-ownership or prevent the other co-owners from
using it according to their rights. Giving consent to a third person to construct a
house on the co-owned property will injure the interest of the co-ownership and
prevent other co-owners from using the property in accordance with their rights.

Under Article 491, none of the co-owners shall, without the consent of the others,
make alterations in the thing owned in common. It necessarily follows that none of
the co-owners can, without the consent of the other co-owners, validly consent to
the making of an alteration by another person, such as respondent, in the thing
owned in common. Alterations include any act of strict dominion or ownership and
any encumbrance or disposition has been held implicitly to be an act of alteration.
The construction of a house on the co-owned property is an act of dominion.
Therefore, it is an alteration falling under Article 491 of the Civil Code. There being
no consent from all co-owners, respondent had no right to construct her house on
the co-owned property.

Consent of only one co-owner will not warrant the dismissal of the complaint for
forcible entry filed against the builder. The consent given by Norma Maligaya in the
absence of the consent of petitioner and Luz Cruz did not vest upon respondent any
right to enter into the co-owned property. Her entry into the property still falls
under the classification through strategy or stealth.

216
The Court of Appeals held that there is no forcible entry because respondents entry
into the property was not through strategy or stealth due to the consent given to her
by one of the co-owners. We cannot give our imprimatur to this sweeping
conclusion. Respondents entry into the property without the permission of
petitioner could appear to be a secret and clandestine act done in connivance with
co-owner Norma Maligaya whom respondent allowed to stay in her house. Entry
into the land effected clandestinely without the knowledge of the other co-owners
could be categorized as possession by stealth.[20] Moreover, respondents act of
getting only the consent of one co-owner, her sister Norma Maligaya, and allowing
the latter to stay in the constructed house, can in fact be considered as a strategy
which she utilized in order to enter into the co-owned property. As such,
respondents acts constitute forcible entry.

(15) Republic v. Heirs of Dignos-Sorono


G.R. No. 171571
24 March 2008

Even if a co-owner sells the whole property as his, the sale will affect only his own
share but not those of the other co-owners who did not consent to the sale.

FACTS. Lot Nos. 2296 and 2316 of the Cadastral Survey of Opon, Lapu-lapu City
were adjudicated by the Court of First Instance of Cebu in favor of the following in
four equal shares:

a. Francisca Dignos, married to Blas Sorono - share in the two lots;


b. Tito Dignos, married to Candida Torrebillas - share in the two lots; and
c. Predecessor-in-interest of respondent - share in the two lots.

It appears that the two lots were not partitioned by the adjudicatees. It appears
further that the heirs of Tito Dignos, who, as reflected above, was awarded share
in the two lots, sold for 2,565.59 the entire two lots to the then Civil Aeronautics
Administration (CAA) via a public instrument entitled "Extrajudicial Settlement and
Sale" executed on October 11, 1957, without the knowledge of respondents whose
predecessors-in-interest were the adjudicatees of the rest of the portion of the
two lots.

In 1996, CAAs successor-in-interest, the Mactan Cebu International Airport


Authority (MCIAA), erected a security fence one of the lot and relocated a number

217
of families, who had built their dwellings within the airport perimeter, to a portion
of said lot to enhance airport security.

MCIAA later caused the issuance in its name of a Tax Declarations of the 2 lots.
Respondents soon asked the agents of MCIAA to cease giving third persons
permission to occupy the lots but the same was ignored. Respondents thereupon
filed a Complaint for Quieting of Title, Legal Redemption with Prayer for a Writ of
Preliminary Injunction against MCIAA before the RTC of Lapu-lapu City.

The trial court found for respondents. The CA affirmed the trial courts decision.
Hence, the present petition for review on certiorari.

The Republic, represented by the MCIAA in its Answer with Counterclaim,


maintained that from the time the lots were sold to its predecessor-in-interest CAA,
it has been in open, continuous, exclusive, and notorious possession thereof;
through acquisitive prescription, it had acquired valid title to the lots since it was a
purchaser in good faith and for value; and assuming arguendo that it did not have
just title, it had, by possession for over 30 years, acquired ownership thereof by
extraordinary prescription. At all events, petitioner contended that respondents
action was barred by estoppel and laches.

Respondents further alleged that neither they nor their predecessors-in-interests


sold, alienated or disposed of their shares in the lots of which they have been in
continuous peaceful possession. Respondents furthermore alleged that neither
petitioner nor its predecessor-in-interest had given them any written notice of its
acquisition of the share of Tito Dignos.

ISSUE. Does the sale of the entire 2 lots by the heirs of Tito Dignos binding to the
respondents?

RULING. No. Article 493 of the Civil Code provides that each co-owner shall have
the full ownership of his part and of the fruits and benefits pertaining thereto, and
he may therefore alienate, assign or mortgage it, and even substitute another person
in its enjoyment, except when personal rights are involved. But the effect of the
alienation of the mortgage, with respect to the co-owners, shall be limited to the
portion which may be allotted to him in the division upon the termination of the co-
ownership. Moreover, applying the case of Bailon-Casilao v. CA, the court held that
even if a co-owner sells the whole property as his, the sale will affect only his own
share but not those of the other co-owners who did not consent to the sale. This is
because under the aforementioned Codal Provision, the sale or other disposition

218
affects only his undivided share and the transferee gets only what would
correspond to his grantor in the partition of the thing owned in common. In the case
at bar, it may be deduced that since a co-owner is entitled to sell his undivided
share, a sale of the entire property by one co-owner without the consent of the other
co-owners is not null and void. However, only the rights of the co-owner-seller are
transferred, thereby making the buyer a co-owner of the property. Thus, the
petitioners predecessor-in-interest CAA thus acquired only the rights pertaining to
the sellers-heirs of Tito Dignos, which is only undivided share of the two lots.

(16) Balus v. Balus


G.R. No. 168970
15 January 2010

FACTS. Herein petitioner and respondents are the children of the spouses Rufo
and Sebastiana Balus. Sebastiana died on September 6, 1978, while Rufo died on July
6, 1984. Rufo mortgaged a parcel of land, which he owns, as security for a loan he
obtained from the Rural Bank of Maigo, Lanao del Norte (Bank). The said property
was originally covered by Original Certificate of Title No. P-439(788) containing an
area of 3.0740 hectare situated in Iligan City. Rufo failed to pay his loan. As a result,
the mortgaged property was foreclosed and was subsequently sold to the Bank as
the sole bidder at a public auction A Certificate of Sale was executed by the sheriff in
favor of the Bank. The property was not redeemed within the period allowed by law.
A Definite Deed of Sale was executed in Bank's favor and a new title was issued in
the name of the Bank.

Herein petitioner and respondents executed an Extrajudicial Settlement of Estate


adjudicating to each of them a specific one-third portion of the subject property
consisting of 10,246 square meters. The parties admitted knowledge of the fact that
their father mortgaged the subject property to the Bank and that they intended to
redeem the same at the soonest possible time.

Respondents bought the subject property from the Bank and a Deed of Sale of
Registered Land was executed by the Bank in their favor. Transfer Certificate of Title
was issued in the name of respondents. Petitioner continued possession of the
subject lot.

Respondents filed a Complaint for Recovery of Possession and Damages against


petitioner contending that they had already informed petitioner of the fact that they
were the new owners of the disputed property but the petitioner still refused to

219
surrender possession of the same to them. Respondents claimed that they had
exhausted all remedies for the amicable settlement of the case but to no avail.

The RTC rendered a decision ordering the plaintiffs to execute a Deed of Sale in
favor of the defendant.The amount of 6,733.33 consigned by the defendant with
the Clerk of Court is ordered delivered to the plaintiffs as purchase price of the one-
third portion of the land in question.

The RTC held that the right of petitioner to purchase from the respondents his share
in the disputed property was recognized by the provisions of the Extrajudicial
Settlement of Estate which the parties had executed before the respondents bought
the subject lot from the Bank.

Respondents filed an appeal with the CA. The CA reversed the decision of the RTC
and ordered petitioner to immediately surrender possession of the subject property
to the respondents. The CA ruled that when petitioner and respondents did not
redeem the subject property within the redemption period and allowed the
consolidation of ownership and the issuance of a new title in the name of the Bank,
their co-ownership was extinguished. Hence, the instant petition.

ISSUE. Are herein petitioner and respondents are co-owners over the subject
property?

RULING. No. The rights to a person's succession are transmitted from the moment
of his death. In addition, the inheritance of a person consists of the property and
transmissible rights and obligations existing at the time of his death, as well as those
which have accrued thereto since the opening of the succession. In the present case,
since Rufo lost ownership of the subject property during his lifetime, it only follows
that at the time of his death, the disputed parcel of land no longer formed part of his
estate to which his heirs may lay claim. Petitioner and respondents never inherited
the subject lot from their father.

Petitioner and respondents were wrong in assuming that they became co-owners of
the subject lot. Thus, any issue arising from the supposed right of petitioner as co-
owner of the contested parcel of land is negated by the fact that in the eyes of the
law, the disputed lot did not pass into the hands of petitioner and respondents as
compulsory heirs of Rufo at any given point in time.

In the present case, there is nothing in the subject Extrajudicial Settlement to


indicate any express stipulation for petitioner and respondents to continue with

220
their supposed co-ownership of the contested lot. For petitioner to claim that the
Extrajudicial Settlement is an agreement between him and his siblings to continue
what they thought was their ownership of the subject property, even after the same
had been bought by the Bank, is stretching the interpretation of the said
Extrajudicial Settlement too far.

In the first place, as earlier discussed, there is no co-ownership to talk about and no
property to partition, as the disputed lot never formed part of the estate of their
deceased father.

In addition, it appears from the recitals in the Extrajudicial Settlement that, at the
time of the execution thereof, the parties were not yet aware that the subject
property was already exclusively owned by the Bank. Nonetheless, the lack of
knowledge on the part of petitioner and respondents that the mortgage was already
foreclosed and title to the property was already transferred to the Bank does not
give them the right or the authority to unilaterally declare themselves as co-owners
of the disputed property. The petition is denied.

(17) Quilatan v. Heirs of Quilatan


G.R. No. 183059
28 August 2009

FACTS. In 1999, petitioners Ely Quilatan and Rosvida Quilatan Elias filed a civil
case for the partition of the estate of the late Pedro Quilatan with damages against
respondent heirs of Lorenzo Quilatan, and for the nullification of Tax Declarations
Nos. D-014-00330 and D-014-00204, under the names of spouses Lorenzo Quilatan
and Anita Lizertiquez, which cancelled the Tax Declarations Nos. 1680 and 2301 of
Pedro Quilatan.

The RTC of Pasig City declared the cancellation of Tax Declarations Nos. 1680 and
2301 void and ordered the partition of the subject properties into three equal
shares among the heirs of Francisco, Ciriaco and Lorenzo, all surnamed Quilatan.

On appeal, the CA reversed the decision of the RTC and dismissed without prejudice
the civil case because of failure of the petitioners to implead all the indispensable
parties to the case. Thus, the judgment of the RTC was null and void for want of
jurisdiction. Petitioners filed a motion for reconsideration which was denied.

Hence, this petition for review.

221
ISSUE. Did the CA correctly reverse the decision of the RTC and order the
dismissal without prejudice of the civil case due to failure of the petitioners to
implead all the indispensable parties to the case?

RULING. Yes. Under Section 1, Rule 69 and Section 7, Rule 3 of the Rules of Court:
(1) in a complaint in action for partition of real estate, a person having the right to
compel such must set forth the nature and extent of his title and an adequate
description of the real estate and joining as defendants all the other persons
interested in the property; and (2) Compulsory joinder as plaintiffs or defendants of
indispensable parties in interest without whom no final determination can be had of
an action. Hence, the ROC mandates the petitioner or plaintiff in impleading all the
indispensable parties in an action for partition of real properties. The absence of one
such party renders all subsequent actions of the court null and void for want of
authority to act, not only as to the absent parties but even to those present.

Pedro Quilatan died intestate in 1960 and was survived by his three children
Ciriaco, Francisco and Lorenzo, all three were already deceased. Ciriaco were
survived by his children Purita Santos, Rosita Reyes, Renato, Danilo and Carlito
Quilatan; Francisco was survived by herein petitioners and their two other siblings,
Solita Trapsi and Rolando Quilatan; and Lorenzo was survived by his children,
herein respondents.

Petitioners failed to implead their two other siblings, Solita and Rolando, and all the
heirs of Ciriaco, as co-plaintiffs or as defendants. Since the filed civil case was for the
reversion of the subject properties to the estate of Pedro Quilatan, making all his
heirs pro-indiviso co-owners and to partition thereof equally among themselves, all
the co-heirs and persons having interest in the subject properties are indispensable
parties to said partition which will not lie without the joinder of the said parties.

In Moldes v. Villanueva, the Court defined an indispensable party as one who has
such an interest in the controversy or subject matter that a final adjudication cannot
be made, in his absence, without injuring or affecting that interest. In Commissioner
Domingo v. Sheer, the Court also held that joinder of indispensable parties is
mandatory, and the absence of them to the suit, the judgment of the court cannot
attain real finality. Given in Metropolitan Bank and Trust Company v. Hon. Alejo,
such rules regarding the joinder of indispensable parties are for complete
determination of all possible issues, not only between the parties themselves, but
also as regards to other persons who may be affected by the judgment. Thus, a valid
judgment cannot be rendered where there is want of indispensable parties.

222
In Arcelona vs. CA, all co-owners are treated as indispensable parties in a suit
involving the co-owned property in order to prevent multiplicity of suits by
requiring the person asserting a right against the defendant to include him, either as
co-plaintiffs or as co-defendants, all persons standing in the same position, so that
the whole matter in dispute may be determined once and for all in one litigation.

Thus, the Supreme Court DENIED the petition for review on certiorari; AFFIRMED
the decision of the CA reversing the decision of the RTC for want of jurisdiction for
failure to implead all indispensable parties; and REMANDED the case to the trial
court and DIRECTED to implead all indispensable parties.

(18) Dadizon v. Bernadas


588 SCRA 678

If parties are unable to agree upon the partition of properties, the court shall appoint
commissioners to make the partition.

FACTS. Petitioners and respondents are the children and representatives of the
deceased children of the late Diosdado Bernadas, Sr. who died intestate on February
1, 1977, leaving in co-ownership with his then surviving spouse, Eustaquia
Bernadas (who died on May 26, 2000), several parcels of agricultural and residential
land situated in Naval, Biliran.

On May 14, 1999, respondents filed a Complaint against petitioners to compel the
partition of the one-half (1/2) conjugal share of the properties left by their late
father (subject properties) based on the Deed of Extrajudicial Partition dated
February 24, 1996. Respondents alleged that petitioner Felicidad Dadizon was in
possession of the subject properties and refused to heed their demands to cause the
partition of the same.

In their Answer, petitioners averred that the Deed of Extrajudicial Partition dated
February 24, 1996, which respondents sought to enforce, was revoked by the Deed
of Extrajudicial Partition dated February 10, 1999. They argued that certain parcels
of land included in respondents complaint had long been disposed of or
extrajudicially partitioned by them. They further claimed that certain parcels of land
listed in the Deed of Extrajudicial Partition dated February 24, 1996 as sold to
respondent Socorro Bernadas could not go to the latter, since the alleged sales were
under annulment in a civil case pending before the RTC, a case filed by their mother,

223
Eustaquia Bernadas, to revoke the sales of her one-half (1/2) conjugal share on the
grounds of lack of consideration, fraud and lack of consent.

In their Reply, respondents contended that the Deed of Extrajudicial Partition dated
February 10, 1999 was a product of malice directed against respondent Socorro
Bernadas, for not all of the heirs of their late father participated in the execution of
the alleged subsequent deed of partition. The sales executed between their mother,
Eustaquia Bernadas, and respondent Soccorro Bernadas have not been annulled by
the court; hence, they remain valid and subsisting.

During trial, on June 13, 2000, both parties manifested that in view of the death of
their mother, Eustaquia Bernadas, they have an ongoing negotiation for the
extrajudicial partition of the subject properties to end their differences once and for
all. On January 30, 2001, the counsel of respondents filed a Project of Partition dated
October 23, 2000, however, the same was not signed by all of the heirs. On July 23,
2001, the RTC issued an Order approving the Project of Partition, which the
petitioners appealed before the CA alleging, among others, that the RTC erred in
finding that their counsel agreed to the approved Project of Partition dated October
23, 2000, and that it should be noted that the said document does not bear the
signature of their counsel. On December 7, 2005, the CA rendered its decision
finding the appeal to be without merit, hence, this petition.

ISSUE. Are the lower courts correct in approving the Project of Partition of the
parties without the signature of all the heirs?

RULING. No. The Project of Partition must be signed by all the heirs signifying that
they have agreed with the partition, otherwise, the court shall appoint
commissioners to make the partition. There are two stages in every action for
partition under Rule 69 of the Rules of Court. The first stage is the determination of
whether or not a co-ownership in fact exists and a partition is proper and may be
made by voluntary agreement of all the parties interested in the property. The
second stage commences when it appears that "the parties are unable to agree upon
the partition" directed by the court. In that event, partition shall be done for the
parties by the court with the assistance of not more than three commissioners. Thus,
two ways in which a partition can take place under Rule 69: by agreement under
Section 2, and through commissioners when such agreement cannot be reached
under Sections 3 to 6.

A careful study of the records of this case reveals that the RTC departed from the
foregoing procedure mandated by Rule 69. The records show that the Project of

224
Partition dated October 23, 2000 was filed only by respondents counsel, and that
the same was not signed by the respondents or all of the parties. Only a document
signed by all of the parties can signify that they agree on a partition. Hence, the RTC
had no authority to approve the Project of Partition dated October 23, 2000. The
RTC should have ordered the appointment of commissioners to make the partition
as mandated by Section 3, Rule 69.

In partition proceedings, reference to commissioners is required as a procedural


step in the action and is not discretionary on the part of the court. It has been held in
a number of cases that if the parties are unable to agree on a partition, the trial court
should order the appointment of commissioners. The petition is partially granted.

(19) De Leon v. De Leon


593 SCRA 768

FACTS. On July 20, 1965, Bonifacio De Leon, then single, and the Peoples
Homesite and Housing Corporation (PHHC) entered into a Conditional Contract to
Sell for the purchase on installment of a lot situated in Quezon City. On April 24,
1968, Bonifacio married Anita de Leon. They had two children, Danilo and Vilma. On
June 22, 1970, PHHC executed a Final Deed of Sale in favor of Bonifacio upon full
payment of the price of the lot. TCT was issued on February 24, 1972 in the name of
Bonifacio, single. On January 12, 1974, Bonifacio sold the lot to his sister, Lita, and
her husband, Felix Tarrosa. The Deed of Sale did not bear the written consent and
signature of Anita. On February 29, 1996, Bonifacio died.

Three months later, Tarrosa spouses registered the Deed of Sale. Anita, Danilo, and
Vilma filed a reconveyance suit allegeing that Bonifacio was still the owner of the
lands. Tarrosa spouses averred that the lot Bonifacio sold to them was his exclusive
property because he was still single when he acquired it from PHHC. They further
alleged that they were not aware of the marriage between Bonifacio and Anita at the
time of the execution of the Deed of Sale.

The RTC ruled in favor of Anita De Leon et al. stating that the lot in question was the
conjugal property of Bonifacio and Anita. The CA affirmed the decision of the RTC.

ISSUE. What is the status of the sale?

RULING. The Sale executed on January 12, 1974 between Bonifacio and the
Tarrosas covering the PHHC lot is void.

225
The 1950 Civil Code is very explicit on the consequence of the husband alienating or
encumbering any real property of the conjugal partnership without the wifes
consent. To a specific point, the sale of a conjugal piece of land by the husband, as
administrator, must, as a rule, be with the wifes consent. Else, the sale is not valid.
So it is that in several cases we ruled that the sale by the husband of property
belonging to the conjugal partnership without the consent of the wife is void ab
initio, absent any showing that the latter is incapacitated, under civil interdiction, or
like causes. The nullity, as we have explained, proceeds from the fact that sale is in
contravention of the mandatory requirements of Art. 166 of the Code. Since Art. 166
of the Code requires the consent of the wife before the husband may alienate or
encumber any real property of the conjugal partnership, it follows that the acts or
transactions executed against this mandatory provision are void except when the
law itself authorized their validity.

In this case, Anitas conformity to the sale of the disputed lot to petitioners was
never obtained or at least not formally expressed in the conveying deed. Therefore,
the sale of sad conjugal property is void.

---oOo---

226
CHAPTER VIII
POSSESSION

(1) Abadilla v. Obrero


G.R. No. 199448
12 November 2014

FACTS. Spouses Obrero alleged that they are the registered owners of Lot No.
37565, situated at Barangay 37, Calayab, Laoag City and covered by Transfer
Certificate of Title No. T-38422 issued on July 3, 2007. Erected on the land are
various improvements utilized for residential and business purposes.

On September 22, 2007, Rolando S. Abadilla, Jr. with the aid of armed men and
hireling, forcibly fenced the perimeter of the said parcel of land with barbed wire.
The petitioner and his men also intimidated the respondents and their customers
and destroyed some of the improvements on the land.

Petitioner claimed that he, along with the other legal heirs of his father, Rolando
Abadilla, Sr., are the real owners and actual, lawful possessors of the subject land.
The respondents conveyed the land to the petitioners father in 1991 through a
Deed of Absolute Sale. The petitioner and his co-heirs fenced the subject land as
safety measure since they all reside in Metro Manila and seldom visit Ilocos Norte
where the land is located. They left a caretaker to oversee the subject land and the
other properties of Abadilla, Sr. in that province.

The petitioner alleged that the subject land was formerly the subject of a Homestead
Patent Application in the name of one Ernesto Palma. The respondents through
illegal machinations, made Palma sign a quitclaim in their favor. Palma thereafter
instituted a criminal case against the respondents for falsifying his signature in the
purported quitclaim.

The MTCC dismissed the complaint since it is actually an accion for reinvidicatoria
which it had no jurisdiction. The RTC reversed the decision of the lower court
because the 1991 Deed of Absolute Sale between the respondents and Abadilla, Sr.
was found of no force and effect for lack of consideration.

ISSUE. Whether or not Rolando Abadilla, Jr. has better right to possess the subject
parcel of land over the Spouses Obrero.

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RULING. The right of possession claimed by both parties is anchored on
ownership. As between the petitioners Deed of Absolute Sale and the respondents
TCT No. T-38422, the latter must prevail. A certificate of title is evidence of
indefeasible and incontrovertible title to the property in favor of the person whose
name appears therein. A title issued under the Torrens system is entitled to all the
attributes of property ownership, which necessarily includes possession. Hence, as
holders of the Torrens title over the subject land, the respondents are entitled to its
possession.

The admission by respondent Bonifacio that it is his signature which appears on the
Deed of Absolute Sale in favor of Abadilla, Sr. failed to conclusively establish that the
respondents parted with their ownership over the subject land in favor of the
petitioners predecessor-in-interest. No sale was perfected because they failed to
agree on the purchase price.

The petitioner failed to show any competent and convincing evidence of possession
or act of dominion in contrast to the overwhelming proof of actual possession and
occupation proffered by the respondents. Consequently, it is indubitable that the
respondents, as registered owners, are entitled to and must be restored to the
physical possession forcibly wrested from them by the petitioner. It remains
undisputed that the petitioner and his men unlawfully entered the land, enclosed it
with barbed-wire fence, destroyed the improvements and excluded the
respondents. These actions necessarily imply the use of force which is remedied by
the proceedings for ejectment.

(2) Heirs of Tanyag v. Gabriel


G.R. No. 175763
11 April 2012

FACTS. Subject of controversy are two adjacent parcels of land located at Ruhale,
Barangay Calzada, Municipality of Taguig (now part of Pasig City, Metro Manila).
The first parcel ("Lot 1") with an area of 686 square meters was originally declared
in the name of Jose Gabriel under Tax Declaration (TD) Nos. 1603 and 6425 issued
for the years 1949 and 1966, while the second parcel ("Lot 2") consisting of 147
square meters was originally declared in the name of Agueda Dinguinbayan under
TD Nos. 6418 and 9676 issued for the years 1966 and 1967. For several years, these
lands lined with bamboo plants remained undeveloped and uninhabited.

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Petitioners claimed that Lot 1 was owned by Benita Gabriel, sister of Jose Gabriel, as
part of her inheritance as declared by her in a 1944 notarized instrument ("Affidavit
of Sale") whereby she sold the said property to spouses Gabriel Sulit and Cornelia
Sanga. Lot 1 allegedly came into the possession of Benita Gabriels own daughter,
Florencia Gabriel Sulit, when her father-in-law Gabriel Sulit gave it to her as part of
inheritance of his son, Eliseo Sulit who was Florencias husband. Florencia Sulit sold
the same lot to Bienvenido S. Tanyag, father of petitioners, as evidenced by a
notarized deed of sale dated October 14, 1964. Petitioners then took possession of
the property, paid the real estate taxes due on the land and declared the same for
tax purposes.

As to Lot 2, petitioners averred that it was sold by Agueda Dinguinbayan to Araceli


Tanyag under Deed of Sale executed on October 22, 1968. Thereupon, petitioners
took possession of said property and declared the same for tax purposes. Petitioners
claimed to have continuously, publicly, notoriously and adversely occupied both
Lots 1 and 2 through their caretaker Juana Quinones; they fenced the premises and
introduced improvements on the land. On March 20, 2000, petitioners instituted in a
civil case alleging that respondents never occupied the whole 686 square meters of
Lot 1 and fraudulently caused the inclusion of Lot 2 such that Lot 1 consisting of 686
square meters originally declared in the name of Jose Gabriel was increased to 1,763
square meters. On the other hand, respondents asserted that petitioners have no
cause of action against them for they have not established their ownership over the
subject property covered by a Torrens title in respondents name.

In its decision, the trial court dismissed the complaint as well as the counterclaim,
holding that petitioners failed to establish ownership of the subject property and
finding the respondents to be the declared owners and legal possessors. It likewise
ruled that petitioners were unable to prove by preponderance of evidence that
respondents acquired title over the property through fraud and deceit. Petitioners
appealed to the CA which affirmed the trial courts ruling. Petitioners motion for
reconsideration was likewise denied by the CA. Hence, this petition.

ISSUE. Whether or not the petitioners acquired the property through acquisitive
prescription.

RULING. Yes. The court held that the CA was mistaken in concluding that
petitioners have not acquired any right over the subject property simply because
they failed to establish Benita Gabriels title over said property. The appellate court
ignored petitioners evidence of possession that complies with the legal
requirements of acquiring ownership by prescription.

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Acquisitive prescription is a mode of acquiring ownership by a possessor through
the requisite lapse of time. In order to ripen into ownership, possession must be in
the concept of an owner, public, peaceful and uninterrupted. Possession is open
when it is patent, visible, apparent, notorious and not clandestine. It is continuous
when uninterrupted, unbroken and not intermittent or occasional; exclusive when
the adverse possessor can show exclusive dominion over the land and an
appropriation of it to his own use and benefit; and notorious when it is so
conspicuous that it is generally known and talked of by the public or the people in
the neighborhood. The party who asserts ownership by adverse possession must
prove the presence of the essential elements of acquisitive prescription.

In this case, it was only in 1979 that respondents began to assert a claim over the
property by securing a tax declaration in the name of Jose Gabriel albeit over a
bigger area than that originally declared. In 1998, they finally obtained an original
certificate of title covering the entire 1,763 square meters which included Lot 1.
Thus, from 1969 until the filing of this complaint by the petitioners in March 2000,
the latter have been in continuous, public and adverse possession of the subject land
for 31 years. Having possessed the property for the period and in the character
required by law as sufficient for extraordinary acquisitive prescription, petitioners
have indeed acquired ownership over the subject property. Such right cannot be
defeated by respondents acts of declaring again the property for tax purposes in
1979 and obtaining a Torrens certificate of title in their name in 1998.

(3) Imuan v. Cereno


G.R. 167995
11 September 2009

FACTS. During his lifetime, Pablo de Guzman (Pablo) contracted two marriages.
His first marriage was with Teodora Soriano (Teodora), with whom he had three
children, namely, Alfredo de Guzman (Alfredo), Cristita G. Velasquez (Cristita), and
Inday G. Soriano (Inday). His second marriage was in 1919 with Juana Velasquez
(Juana), with whom he also had three children, namely: Nena De Guzman (Nena),
Teodora de Guzman (Teodora), and Soledad G. Cereno (Soledad). All these children
are now dead.

Petitioners are Pablo's grandchildren by his first marriage, while respondent Juanito
Cereno (Juanito) is Soledad's husband and the other respondents are their children.

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On July 15, 1936, Pablo died intestate leaving two parcels of land, to wit: (1) a parcel
of coconut land located at Salaan Mangaldan, Pangasinan, containing an area of nine
hundred eighty-six (986) square meters, more or less, declared under Tax
Declaration No. 8032; and (2) a parcel of cornland located at (Inlambo) Palua,
Mangaldan, Pangasinan, containing an area of three thousand three hundred thirty-
four (3,334) square meters, more or less, declared under Tax Declaration No. 5155.

After Pablo's death in 1936, his second wife Juana and their children continued to be
in possession of the parcel of land located at Salaan, Mangaldan, Pangasinan.

Sometime in January 1999, petitioners entered and took the property by building a
small nipa hut thereon.

On April 5, 1999, petitioners filed with the RTC of Dagupan City a Complaint for
annulment of document, reconveyance and damages against respondents alleging
that: (1) the estate of their grandfather Pablo has not yet been settled or partitioned
among his heirs nor had Pablo made disposition of his properties during his
lifetime; (2) it was only through their tolerance that Juana and his children
constructed their house on Lot 3559; (3) the sale of the disputed property made by
Juana to respondents-spouses Cereno and the issuance of tax declarations in the
latter's names are null and void. Petitioners prayed for the annulment of the deed of
sale, cancellation of Tax Declaration Nos. 21268 and 21269, the reconveyance of the
property to them and damages.

In their Answer, respondents claimed that after the death of Pablo's first wife, Pablo
partitioned his property among his children and that spouses Nicomedes and
Cristita Velasquez acquired most of the properties as they were more financially
capable; that at the time Pablo married Juana, the properties he had were his
exclusive share in the partition; that of the two parcels of land Pablo had at that
time, he donated the subject property to Juana in a donation propter nuptias when
they married; that the deed of donation was lost during the Japanese occupation and
such loss was evidenced by the Joint Affidavit executed by Alfredo de Guzman and
Teofilo Cendana attesting to such donation; that Juana could validly convey the
property to the Spouses Cereno at the time of the sale because she was the owner;
and that they have been in public and uninterrupted possession of the disputed lot
since its acquisition and have been paying the realty taxes due thereon. As
affirmative defense, respondents contended that petitioners' rights over the
property were already barred by the statute of limitations.

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The RTC found that Juana and her children of the second nuptial built their house on
the disputed property by tolerance of Pablos children of the first marriage; that
Juana alone sold the property to respondents Spouses Cereno and such sale was not
valid because she was not the owner of the property at the time she sold the same;
that the estate of Pablo has not been settled among the heirs since the property was
still in the name of Pablo at the time Juana sold the same; that respondents Spouses
Cerenos claim that the property was donated to Juana by Pablo by way of donation
propter nuptias was not supported by evidence; that Pablo could not have donated
the property to Juana because Pablos children were the legal heirs of his first wife,
and have rights and interests over the property. The RTC found the Joint Affidavit
dated January 26, 1970 executed by Alfredo, Pablos son by first marriage, and
Teofilo Cendana, a former Chief of Police of Mangaldan, Pangasinan, attesting that
the donation propter nuptias executed by Pablo in favor of Juana was lost during the
Japanese occupation was inconsequential, since it cannot substitute for the donation
which validity was highly questionable; that petitioners were able to prove that the
property was the conjugal property of Pablo and his first wife which has not been
divided between Pablo and his children of the first nuptial.

While the CA agreed with the findings of the RTC that there was no evidence that
Pablo undertook a partition of the properties of his first marriage before he
contracted his second marriage and that the Joint Affidavit dated January 26, 1970
could not be considered as conclusive proof of the transfer of the property by Pablo
to Juana, it was not a sufficient basis for Juana to validly transfer the property to
respondent Spouses Cereno, however, the CA gave probative value to the joint
affidavit as it was executed long before the present controversy arose. The CA found
that the joint affidavit was executed by Alfredo, one of Pablos children by his first
marriage who was necessarily affected by the claimed donation propter nuptias and
who ought to know the facts attested to; that the affidavit was evidence of the basis
of Juana's own good faith belief that the property was hers to dispose of when she
sold it to respondents Spouses Cereno; that the same affidavit can also be the basis
of respondents Spouses Cereno's good faith belief that Juana, who had undisputably
been in possession of the disputed property at the time of the sale, was the owner
and could transfer the property to them by sale.

ISSUES. (1) Did the respondents acquire the property by acquisitive prescription?
(2) Are the petitioners barred by Laches to assert their claim?

RULING. (1) Yes. Prescription is another mode of acquiring ownership and other
real rights over immovable property. It is concerned with lapse of time in the

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manner and under conditions laid down by law, namely, that the possession should
be in the concept of an owner, public, peaceful, uninterrupted and adverse.

Acquisitive prescription of real rights may be ordinary or extraordinary. Ordinary


acquisitive prescription requires possession in good faith and with just title for ten
years. In extraordinary prescription, ownership and other real rights over
immovable property are acquired through uninterrupted adverse possession for
thirty years without need of title or of good faith.

Records show that as early as 1970, when the property was sold by Juana to
respondents Spouses Cereno, the latter immediately took possession of the
property. Since then, respondents possessed the property continuously, openly,
peacefully, in the concept of an owner, exclusively and in good faith with just title, to
the exclusion of the petitioners and their predecessors-in-interest until the filing of
the complaint in 1999 which is the subject of this present petition.

(2) Laches is defined as the failure to assert a right for an unreasonable and
unexplained length of time, warranting a presumption that the party entitled to
assert it has either abandoned or declined to assert it. This equitable defense is
based upon grounds of public policy, which requires the discouragement of stale
claims for the peace of society.

Juana sold the property to the Spouses Cereno in 1970 and since then have
possessed the property peacefully and publicly without any opposition from
petitioners. While petitioners claim that they knew about the sale only in 1980 yet
they did not take any action to recover the same and waited until 1999 to file a suit
without offering any excuse for such delay. Records do not show any justifiable
reason for petitioners' inaction for a long time in asserting whatever rights they
have over the property given the publicity of respondents' conduct as owners of the
property.

(4) Semirara Coal Corporation v. HGL Development Corporation


G.R. No. 166854
6 December 2006

FACTS. Semirara Mining Corporation is a grantee by the Department of Energy


(DOE) of a Coal Operating Contract under PD No. 972over the entire Island of
Semirara, Antique, which contains an area of 5,500 hectares more or less.

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HGL Development Corporation is a grantee of Forest Land Grazing Lease Agreement
(FLGLA) No. 184 by the then Ministry of Environment and Natural Resources, over
367 hectares of land located at the barrios of Bobog and Pontod, Semirara, Caluya,
Antique. The FLGLA No. 184 was issued on September 28, 1984for a term of 25
years, to end on December 31, 2009. Since its grant, HGL has been grazing cattle on
the subject property.

Sometime in 1999, Semirara Corp. requested HGL Corp. to allow their trucks and
other equipment to pass through the property covered by the FLGLA. HGL said yes
as long as Semirara wouldnt violate the FLGLA in any way. But then they did.
Semiraras violations include:

1. several buildings for their administrative offices and employees' residences


without HGL's permission;
2. Conducted blasting and excavation;
3. Constructed an access road to petitioner's minesite in the Panaan Coal
Reserve, Semirara; and
4. Maintained a stockyard Erected for the coal it extracted from its mines.

And because of this, HGLs lands were destroyed and lots of cows got dead.

September 22, 1999, HGL wrote Semirara demanding full disclosure of their
activities on the subject land and saying that they cant construct/ make
improvements without their consent. Semirara ignored such and continued with
their activities.

December 6, 2000, DENR cancelled HGLs FLGLA and ordered Semirara to vacate
because they werent able to pay rent, surcharges and refused to give grazing
reports. Motions for reconsideration to DENR were all denied. November 17, 2003,
HGL filed a complaint against the DENR for specific performance and damages with
prayer for a temporary restraining order and/or writ of preliminary injunction with
the Caloocan RTC enjoining the DENR from enforcing its December 6, 2000 Order of
Cancellation.

November 17, 2003, HGL had also filed on, a complaint against Semirara for
Recovery of Possession and Damages with Prayer for TRO and/or Writ of
Preliminary Mandatory Injunction with the RTC.

RTC granted the prayer for issuance of a Writ of Preliminary Mandatory Injunction.
Petitioner did not move for reconsideration of the order. The Writ of Preliminary

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Mandatory Injunction was accordingly issued by the trial court on October 6, 2004.
The writ restrained petitioner or its agents from encroaching on the subject land or
conducting any activities in it, and commanded petitioner to restore possession of
the subject land to HGL or its agents. The CA, denied the petition.

ISSUE. Did the CA seriously erred or committed grave abuse of discretion in


affirming the RTC granting the writ of preliminary mandatory injunction?

RULING. No. New Civil Code 539 provides that a lawful possessor is entitled to be
respected in his possession and any disturbance of possession is a ground for the
issuance of a writ of preliminary mandatory injunction to restore the possession.
Thus, Semiraras claim that the issuance of a writ of preliminary mandatory
injunction is improper because the instant case is allegedly one for accion publiciana
deserves no consideration.

Torre, et al. v. Hon. J. Querubin, et al. Prior to the NCC, it was deemed improper to
issue a writ of preliminary injunction where the party to be enjoined had already
taken complete material possession of the property involved. However, with the
enactment of Article 539, the plaintiff is now allowed to avail of a writ of
preliminary mandatory injunction to restore him in his possession during the
pendency of his action to recover possession.

A writ of mandatory injunction is granted upon a showing that:

1. the invasion of the right is material and substantial;


2. the right of complainant is clear and unmistakable; and
3. there is an urgent and permanent necessity for the writ to prevent serious
damage.

Here, its obvious that HGL, holding the FLGLA No. 184, has a clear and unmistakable
right to the possession of the subject property. Thus, being the lawful possessor,
HGL is entitled to protection of its possession of the subject property and any
disturbance of its possession is a valid ground for the issuance of a writ of
preliminary mandatory injunction in its favor. Semirara even confirmed this right
when it sought permission from HGL to use its property back in 1999. PS
possession therefore only a mere tolerance of PR.

The issuance of a writ of mandatory injunction is necessary for HGL stands to suffer
material and substantial injury as a result of petitioner's continuous intrusion into
the subject property. Like:

235
1. HGL of the use and possession of the subject property;
2. HGL's business operations. (Semiraras occupation happened when HGL still
had the right to the use and possession of the property for another 10 years.)
At the very least, the failure of HGL to operate its cattle-grazing business is
perceived as an inability by HGL to comply with the demands of its
customers and sows doubts in HGL's capacity to continue doing business.
This damage to HGL's business standing is irreparable injury because no fair
and reasonable redress can be had by HGL insofar as the damage to its
goodwill and business reputation is concerned.

Semiraras contention that the FLGLA had already been cancelled by the DENR is
without merit. The CA correctly held that the alleged cancellation through a
unilateral act of the DENR does not automatically render the FLGLA invalid since the
unilateral cancellation is subject of a separate case which is still pending before the
Caloocan RTC. Notably, said court has issued a writ of preliminary injunction
enjoining the DENR from enforcing its order of cancellation of FLGLA No. 184.

The CA was correct when it found that Semiraras construction and activities were
done without the consent of HGL, but in blatant violation of its rights as the lessee of
the subject property. Thus, these unauthorized activities were detrimental to the
business of HGL and will undeniably work injustice to HGL. Thus, the CA correctly
upheld the issuance of the writ of preliminary mandatory injunction in favor of HGL.

(5) Lubos v. Galupo


G. R. No. 139136
16 January 2002

FACTS. The subject of the said case is a parcel of land with an area of 10.8224
hectares, more or less, located in Sitio Naganaga, Barrio Cababtuan, Municipality of
Pambujan, Northern Samar, originally tax declared in the name of Victoriana Dulay.
Mansueto Galupo, Sr. died in 1981. The plaintiffs are his children out of two
marriages.

The plaintiffs complain that in 1984, they discovered the land to be occupied by the
tenant farmers of defendant Lina Abalon Lubos. They checked with the Office of the
Municipal Assessor, and they found that the original Tax Declaration No. 17056 had
been re-assessed by Lina Abalon Lubos, who obtained a new Tax Declaration No.
34286 in her name, while Tax Declaration No. 24041 in their fathers name had been
removed from the files. On or about November 16, 1990, Lina Abalon Lubos sold a

236
portion of the said land to Alicio Poldo, married to Teresita Poldo. The plaintiffs
sought the annulment of the said sale, and a declaration that they are the lawful
owners of the land.

On the other hand, defendant Lina Abalon Lubos contends that the subject land was
originally owned by Victoriana Dulay alone, who is her great grandmother.
Victoriana Dulay sold the property to her father Juan F. Abalon. Her father
possessed the property for over thirty (30) years until 1975, when he sold the same
to her (Exh. 5). Consequently, she caused the cancellation of Tax Declaration No.
17056 and she obtained Tax Declaration No. 34286 in her name. Subsequently, she
sold a portion of the property to the spouses Poldo, who claim to be purchasers in
good faith. On November 26, 1992, the trial court rendered a decision declaring the
plaintiffs as the exclusive and absolute owners of the parcel of land described and
delimited in their complaint, as amended, Commanding the defendants to vacate
from the premises in question, and to peacefully deliver the same to the possession
of plaintiffs, with costs against the defendants. The Court of Appeals promulgated a
decision affirming in toto the decision of the trial court, hence this petition.

ISSUE. Who as between the parties have a better right or title to the subject lot?

RULING. We deny the petition. The issue raised is factual. It is a well-settled rule
that factual findings of the trial court, adopted and confirmed by the Court of
Appeals, are final and conclusive and may not be reviewed on appeal. Article 1141,
Civil Code, governs prescription of real action over immovables. We deny the
petition. The issue raised is factual. It is a well-settled rule that factual findings of
the trial court, adopted and confirmed by the Court of Appeals, are final and
conclusive and may not be reviewed on appeal.

Article 1141, Civil Code, governs prescription of real action over immovables. For
the purposes of prescription, there is just title when the adverse claimant came into
possession of the property through one of the modes recognized by law for the
acquisition of ownership or other real rights, but the grantor was not the owner or
could not transmit any right. On the other hand, good faith consists in the
reasonable belief that the person from whom the possessor received the thing was
its owner but could not transmit the ownership thereof.

The trial court found that the contract entered into between petitioner Lubos and
her father, Juan Abalon, was fictitious, to which we agree. Consequently, petitioner
has not acquired a just title to the property. Petitioners lack of good faith was also
apparent. When the respondents filed the instant case on October 10, 1991,

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petitioner Lubos was in possession of the property for only twenty-eight (28) years
counted from 1963 as testified to by petitioners witnesses. This is short of the
required thirty years of uninterrupted adverse possession without just title and
good faith. Obviously, petitioner has failed to establish the chain of title through
which the land passed to her. As heretofore stated, no proof was presented to show
that, indeed, the land was transferred from its original owner, Victoriana Dulay, to
petitioners father, Juan Abalon. The respondents have shown that the land came to
their possession as heirs of Mansueto Galupo, Sr. who was the heir of Juan Galupo,
the person to whom Victoriana Dulay transferred the land. WHEREFORE, the Court
DENIES the petition and AFFIRMS the decision of the Court of Appeals.

(6) Caniza v. Court of Appeals


268 SCRA 640
24 February 1997

FACTS. On November 20, 1989, being then ninety-four (94) years of age, Carmen
Caiza was declared incompetent by judgment of the Regional Trial Court of Quezon
City, Branch 107, in a guardianship proceeding instituted by her niece, Amparo A.
Evangelista (Amparo) due to her age, cataracts in both eyes and senile dementia.
Amparo then was appointed legal guardian of her person and estate.

Caiza was the owner of a house and lot at No. 61 Tobias St., Quezon City. On
September 17, 1990, her guardian Amparo Evangelista representing Caiza
commenced a suit in the Metropolitan Trial Court (MetroTC) of Quezon City (Branch
35) to eject the spouses Pedro and Leonora Estrada from said premises.

In the complaint, she alleged that plaintiff Caiza being the absolute owner of the
property, out of kindness she had allowed the Estrada Spouses, their children,
grandchildren and sons-in-law to temporarily reside in her house, rent-free.
However, in order to meet the expenses needed for support, maintenance and
medical treatment of Caiza, since they are not paying rent for the house, Caiza (was)
losing much money as her house could not be rented by others.

The MetroTC rendered a decision in Caizas favor and ordered the Estradas to vacate
the premises and pay Caiza P5,000.00 by way of attorney's fee. However the Decisio
was reversed by the RTC on the ground that action by which the issue of defendants'
possession should be resolved is accion publiciana, the obtaining factual and legal
situation.

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Caiza's act of allowing the Estradas to occupy her house, rent-free, did not create a
permanent and indefeasible right of possession in the latter's favor. Common sense,
and the most rudimentary sense of fairness clearly require that act of liberality be
implicitly, but no less certainly, accompanied by the necessary burden on the
Estradas of returning the house to Caiza upon her demand.

The defendants declared that they had been living in Caiza's house since the 1960's;
that in consideration of their faithful service they had been considered by Caiza as
her own family, and the latter had in fact executed a holographic will on September
4, 1988 by which she "bequeathed" to the Estradas the house and lot in question.

ISSUE. Did the Estradas lengthy rent free occupation of the house owned by Caiza
create a permanent and indefeasible right of possession in the formers favor?

RULING. NO. More than once has this Court adjudged that a person who occupies
the land of another at the latter's tolerance or permission without any contract
between them is necessarily bound by an implied promise that he will vacate upon
demand, failing which a summary action for ejectment is the proper remedy against
him. The situation is not much different from that of a tenant whose lease expires
but who continues in occupancy by tolerance of the owner, in which case there is
deemed to be an unlawful deprivation or withholding of possession as of the date of
the demand to vacate. Thus, in Asset Privatization Trust vs. Court of Appeals, where
a company, having lawfully obtained possession of a plant upon its undertaking to
buy the same, refused to return it after failing to fulfill its promise of payment
despite demands, this Court held that "(a)fter demand and its repudiation, ** (its)
continuing possession ** became illegal and the complaint for unlawful detainer
filed by the ** (plant's owner) was its proper remedy."

The Estradas' possession of the house stemmed from the owner's express
permission. That permission was subsequently withdrawn by the owner, as was her
right; and it is immaterial that the withdrawal was made through her judicial
guardian, the latter being indisputably clothed with authority to do so. Nor is it of
any consequence that Carmen Caiza had executed a will bequeathing the disputed
property to the Estradas; that circumstance did not give them the right to stay in the
premises after demand to vacate on the theory that they might in future become
owners thereof, that right of ownership being at best inchoate, no transfer of
ownership being possible unless and until the will is duly probated.

239
(7) Habagat Grill v. DMC-Urban Property
G.R. No. 155110
31 March 2005

The two forms of ejectment suits -- forcible entry and unlawful detainer -- may be
distinguished from each other mainly by the fact that in forcible entry, the plaintiffs
must prove that they were in prior possession of the premises until they were deprived
thereof by the defendants; in unlawful detainer, the plaintiffs need not have been in
prior physical possession.

FACTS. On June 11, 1981, David M. Consunji, Inc. acquired and became the owner
of a residential lot situated in Matina, Davao City and covered by TCT No. T-82338.
On June 13, 1981, David M. Consunji, Inc. transferred said lot to its sister company,
the DMC Urban Property Developers, Inc. (DMC) in whose favor TCT No. T-279042
was issued. Alleging that Louie Biraogo forcibly entered said lot and built thereon
the Habagat Grill in December, 1993, DMC filed on March 28, 1994 a Complaint for
Forcible Entry against Habagat Grill and/or Louie Biraogo. The Complaint alleged
that as owner DMC possessed the lot in question from June 11, 1981 until December
1, 1993; that on that day, December 1, 1993, Louie Biraogo, by means of strategy
and stealth, unlawfully entered into the lot in question and constructed the Habagat
Grill thereon, thus illegally depriving DMC of the possession of said lot since then up
to the present; that the reasonable rental value of said lot is 10,000.00 a month.

The Complaint alleged that as owner DMC possessed the lot in question from June
11, 1981 until December 1, 1993; that on that day, December 1, 1993, Louie Biraogo,
by means of strategy and stealth, unlawfully entered into the lot in question and
constructed the Habagat Grill thereon, thus illegally depriving DMC of the
possession of said lot since then up to the present; that the reasonable rental value
of said lot is 10,000.00 a month.

ISSUE. Does respondent Biraogo had prior possession of the property?

RULING. Yes. There is only one issue in ejectment proceedings: who is entitled to
physical or material possession of the premises; that is, to possession de facto, not
possession de jure? Issues as to the right of possession or ownership are not
involved in the action; evidence thereon is not admissible, except only for the
purpose of determining the issue of possession.

The two forms of ejectment suits -- forcible entry or unlawful detainer -- may be
distinguished from each other mainly by the fact that in forcible entry, the plaintiffs

240
must prove that they were in prior possession of the premises until they were
deprived thereof by the defendant; in unlawful detainer, the plaintiff need not have
been in prior physical possession.

Possession can be acquired by juridical acts. These are acts to which the law gives
the force of acts of possession. Examples of these are donations, succession, x x x
execution and registration of public instruments, and the inscription of possessory
information titles. For one to be considered in possession, one need not have actual
or physical occupation44 of every square inch of the property at all times. In the
present case, prior possession of the lot by respondents predecessor was
sufficiently proven by evidence of the execution and registration of public
instruments and by the fact that the lot was subject to its will from then until
December 1, 1993, when petitioner unlawfully entered the premises and deprived
the former of possession thereof.

---oOo---

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CHAPTER IX
USUFRUCT

Sepulveda v. Pelaez
450 SCRA 302

FACTS. On December 6, 1972, private respondent Atty. Pacifico Pelaez filed a


complaint against his granduncle, Pedro Sepulveda, Sr., with the then Court of First
Instance of Cebu, for the recovery of possession and ownership of his one-half (1/2)
undivided share of several parcels of land covered by Tax Declaration. His undivided
one-third (1/3) share in several other lots. The eleven lots were among the twenty-
five (25) parcels of land which the private respondents mother, Dulce Sepulveda,
inherited from her grandmother, Dionisia Sepulveda under the Project of Partition
dated April 16, 1937 submitted by Pedro Sepulveda, Sr. as the administrator of the
formers estate, duly approved by the then CFI of Cebu in Special Proceeding. Under
the said deed, Pedro Sepulveda, Sr. appeared to be the owner of an undivided
portion of Lot No. 28199, while his brother and Dulces uncle Santiago Sepulveda,
was the undivided owner of one-half (1/2) of the parcels of land covered by T.D.
Nos. 18197, 18193 and 28316. Dulce and her uncles, Pedro and Santiago, were
likewise indicated therein as the co-owners of the eleven other parcels of land, each
with an undivided one-third (1/3) share thereof. In his complaint, the private
respondent alleged that his mother Dulce died intestate on March 2, 1944, and aside
from himself, was survived by her husband Rodolfo Pelaez and her mother Carlota
Sepulveda. Dulces grandfather Vicente Sepulveda died intestate on October 25,
1920, and Dulce was then only about four years old. According to the private
respondent, his grandmother Carlota repeatedly demanded the delivery of her
mothers share in the eleven (11) parcels of land, but Pedro Sepulveda, Sr. who by
then was the Municipal Mayor of Tudela, refused to do so. Dulce, likewise, later
demanded the delivery of her share in the eleven parcels of land, but Pedro
Sepulveda, Sr. still refused, claiming that he needed to continue to possess the
property to reap the produce therefrom which he used for the payment of the realty
taxes on the subject properties. The private respondent alleged that he himself
demanded the delivery of his mothers share in the subject properties on so many
occasions, the last of which was in 1972, to no avail. The trial court ruled that the
private respondents action for reconveyance based on constructive trust had not yet
prescribed when the complaint was filed; that he was entitled to a share in the
proceeds of the sale of the property to Danao City; and that the partition of the
subject property among the adjudicatees thereof was in order. Court of Appeals held
that: Under articles 807 and 834 of the old Civil Code the surviving spouse is a

242
forced heir and entitled to a share in usufruct in the estate of the deceased spouse
equal to that which by way of legitime corresponds or belongs to each of the
legitimate children or descendants who have not been bettered or have not received
any share in the one-third share destined for betterment. The right of the surviving
spouse to have a share in usufruct in the estate of the deceased spouse is provided
by law of which such spouse cannot be deprived and which cannot be ignored. Of
course, the spouse may waive it but the waiver must be express.

ISSUE. W/N Pelaez is an indespensable party to a share in usufruct

RULING. Yes, Rodolfo Pelaez is an indispensable party he being entitled to a share


in usufruct, equal to the share of the respondent in the subject properties. There is
no showing that Rodolfo Pelaez had waived his right to usufruct.

SEC. 7. Compulsory joinder of indispensable parties. Parties in interest


without whom no final determination can be had of an action shall be joined
either as plaintiffs or defendants.

Indeed, the presence of all indispensable parties is a condition sine qua non for the
exercise of judicial power. It is precisely when an indispensable party is not before
the court that the action should be dismissed. Thus, the plaintiff is mandated to
implead all the indispensable parties, considering that the absence of one such party
renders all subsequent actions of the court null and void for want of authority to act,
not only as to the absent parties but even as to those present. One who is a party to a
case is not bound by any decision of the court, otherwise, he will be deprived of his
right to due process. Without the presence of all the other heirs as plaintiffs, the trial
court could not validly render judgment and grant relief in favor of the private
respondent. The failure of the private respondent to implead the other heirs as
parties-plaintiffs constituted a legal obstacle to the trial court and the appellate
courts exercise of judicial power over the said case, and rendered any orders or
judgments rendered therein a nullity. To reiterate, the absence of an indispensable
party renders all subsequent actions of the court null and void for want of authority
to act, not only as to the absent parties but even as to those present.

---oOo---

243
CHAPTER X
NUISANCE

(1) Gancayco v. City Government of Quezon City


G.R. No. 177807
11 October 2011

Article 694 of the Civil Code defines nuisance as any act, omission, establishment,
business, condition or property, or anything else that (1) injures or endangers the
health or safety of others; (2) annoys or offends the senses; (3) shocks, defies or
disregards decency or morality; (4) obstructs or interferes with the free passage of any
public highway or street, or any body of water; or, (5) hinders or impairs the use of
property. A nuisance may be per se or per accidents. A nuisance per se is that which
affects the immediate safety of persons and property and may summarily be abated
under the undefined law of necessity.

FACTS. In the early 1950s, retired Justice Emilio A. Gancayco bought a parcel of
land located at 746 Epifanio delos Santos Avenue (EDSA), Quezon City. On 27 March
1956, the Quezon City Council issued Ordinance No. 2904, entitled "An Ordinance
Requiring the Construction of Arcades, for Commercial Buildings to be Constructed
in Zones Designated as Business Zones in the Zoning Plan of Quezon City, and
Providing Penalties in Violation Thereof." An arcade is defined as any portion of a
building above the first floor projecting over the sidewalk beyond the first storey
wall used as protection for pedestrians against rain or sun. Ordinance No. 2904
required the relevant property owner to construct an arcade with a width of 4.50
meters and height of 5.00 meters along EDSA. There was yet no building code
passed by the national legislature. Thus, the regulation of the construction of
buildings was left to the discretion of local government units. The building owner is
not allowed to construct his wall up to the edge of the property line.

The ordinance covered the property of Justice Gancayco. Subsequently, he sought


the exemption of a two-storey building being constructed on his property from the
application of Ordinance. On 2 February 1966, the City Council acted favorably on
Justice Gancaycos request, "subject to the condition that upon notice by the City
Engineer, the owner shall, within reasonable time, demolish the enclosure of said
arcade at his own expense when public interest so demands."

On 28 April 2003, the MMDA sent a notice of demolition to Justice Gancayco alleging
that a portion of his building violated the National Building Code of the Philippines

244
(Building Code) in relation to Ordinance No. 2904. Justice Gancayco did not comply
with the notice. The MMDA proceeded to demolish the party wall.

On 29 May 2003, Justice Gancayco filed a Petition with prayer for a temporary
restraining order and/or writ of preliminary injunction before the Regional Trial
Court (RTC), he alleged that the ordinance authorized the taking of private property
without due process of law and just compensation. In addition, he claimed that the
ordinance was selective and discriminatory.

The MMDA stated that the questioned property was a public nuisance impeding the
safe passage of pedestrians. RTC in favor of Justice Gancayco while CA upheld the
validity of Ordinance No. 2904.

ISSUE. Is the wing wall of Justice Gancaycos building a public nuisance?

RULING. No. The fact that in 1966 the City Council gave Justice Gancayco an
exemption from constructing an arcade is an indication that the wing walls of the
building are not nuisances per se. The wing walls do not per se immediately and
adversely affect the safety of persons and property. The fact that an ordinance may
declare a structure illegal does not necessarily make that structure a nuisance.

Article 694 of the Civil Code defines nuisance as any act, omission, establishment,
business, condition or property, or anything else that (1) injures or endangers the
health or safety of others; (2) annoys or offends the senses; (3) shocks, defies or
disregards decency or morality; (4) obstructs or interferes with the free passage of
any public highway or street, or any body of water; or, (5) hinders or impairs the
use of property. A nuisance may be per se or per accidens. A nuisance per se is that
which affects the immediate safety of persons and property and may summarily be
abated under the undefined law of necessity.

Clearly, when Justice Gancayco was given a permit to construct the building, the city
council or the city engineer did not consider the building, or its demolished portion,
to be a threat to the safety of persons and property. This fact alone should have
warned the MMDA against summarily demolishing the structure.

Neither does the MMDA have the power to declare a thing a nuisance. Only courts of
law have the power to determine whether a thing is a nuisance.

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(2) Telmo v. Bustamante
G.R. No. 182567
13 July 2009

FACTS. This case arose from the Verified Complaint filed by respondent Luciano
M. Bustamante before the Office of the Deputy Ombudsman for Luzon against
petitioner Guillermo Telmo, Municipal Engineer of Naic, Cavite, Danilo Consumo,
Barangay (Brgy.) Chairman, Brgy. Halang, Naic, Cavite, and Elizalde Telmo, a private
individual.

The complaint alleged that respondent is a co-owner of a real property of 616


square meters in Brgy. Halang, Naic, Cavite, known as Lot 952-A and covered by
Transfer Certificate of Title No. T-957643 of the Register of Deeds of Cavite.
Petitioner and Elizalde Telmo (Telmos) are the owners of the two (2) parcels of land
denominated as Lot 952-B and 952-C, respectively, located at the back of
respondents lot. When his lot was transgressed by the construction of the Noveleta-
Naic-Tagaytay Road, respondent offered for sale the remaining lot to the Telmos.
The latter refused because they said they would have no use for it, the remaining
portion being covered by the roads 10-meter easement.

The complaint further alleged that, on May 8, 2005, respondent caused the resurvey
of Lot 952-A in the presence of the Telmos. The resurvey showed that the Telmos
encroached upon respondents lot. Petitioner then uttered, Hanggat ako ang
municipal engineer ng Naic, Cavite, hindi kayo makakapagtayo ng anuman sa lupa
nyo; hindi ko kayo bibigyan ng building permit.

On May 10, 2005, respondent put up concrete poles on his lot. However, around
7:00 p.m. of the same day, the Telmos and their men allegedly destroyed the
concrete poles. The following day, respondents relatives went to Brgy. Chairman
Consumo to report the destruction of the concrete poles. Consumo told them that he
would not record the same, because he was present when the incident occurred.
Consumo never recorded the incident in the barangay blotter.

ISSUE. Is the concrete posts were in the nature of a nuisance per se, which may be
the subject of summary abatement?

RULING. No. A nuisance per se is that which affects the immediate safety of
persons and property and may be summarily abated under the undefined law of
necessity. Evidently, the concrete posts summarily removed by petitioner did not at
all pose a hazard to the safety of persons and properties, which would have

246
necessitated immediate and summary abatement. What they did, at most, was to
pose an inconvenience to the public by blocking the free passage of people to and
from the national road.

(3) Perez v. Madrona


G.R. No. 184478
21 March 2012

FACTS. Respondent-spouses Fortunito Madrona and Yolanda B. Pante are


registered owners of a residential property located in Lot 22, Block 5, France Street
corner Italy Street, Greenheights Subdivision, Phase II, Marikina City and covered by
Transfer Certificate of Title No. 169365[4] of the Registry of Deeds of Marikina. In
1989, respondents built their house thereon and enclosed it with a concrete fence
and steel gate. In 1999, respondents received the following letter dated May 25,
1999 from petitioner Jaime S. Perez, Chief of the Marikina Demolition Office.

On June 9, 1999, respondents received a letter[7] from petitioner requesting them


to provide his office a copy of the relocation survey on the subject property.
Respondents, however, did not oblige because it was as if petitioner was fishing
evidence from them.More than a year later or on February 28, 2001, petitioner sent
another letter[8] with the same contents as the May 25, 1999 letter but this time
giving respondents ten days from receipt thereof to remove the structure allegedly
protruding to the sidewalk. This prompted respondents to file a complaint for
injunction before the Marikina City RTC on March 12, 2001.

ARGUMENT OF THE RESPONDENT: (1) contained an accusation libelous in nature


as it is condemning him and his property without due process; (2) has no basis and
authority since there is no court order authorizing him to demolish their structure;
(3) cited legal bases which do not expressly give petitioner authority to demolish;
and (4) contained a false accusation since their fence did not in fact extend to the
sidewalk.

ARGUMENT OF THE PETITIONER: That their newly built house is in violation of the
laws of the province and that the said house is considered as a nuisance.

ISSUES. (1) Are the requisites for the issuance of a writ of injunction present?
(2) Are the fences considered as nuisance?

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RULING. (1) For injunction to issue, two requisites must concur: first, there must
be a right to be protected and second, the acts against which the injunction is to be
directed are violative of said right.[29] Here, the two requisites are clearly present:
there is a right to be protected, that is, respondents right over their concrete fence
which cannot be removed without due process; and the act, the summary
demolition of the concrete fence, against which the injunction is directed, would
violate said right.

If petitioner indeed found respondents fence to have encroached on the sidewalk,


his remedy is not to demolish the same summarily after respondents failed to heed
his request to remove it. Instead, he should go to court and prove respondents
supposed violations in the construction of the concrete fence. Indeed, unless a thing
is a nuisance per se, it may not be abated summarily without judicial intervention.
Our ruling in Lucena Grand Central Terminal, Inc. v. JAC Liner, Inc., on the need for
judicial intervention when the nuisance is not a nuisance per se, is well worth
mentioning.

(2) Respondents fence is not a nuisance per se. By its nature, it is not injurious to the
health or comfort of the community. It was built primarily to secure the property of
respondents and prevent intruders from entering it. And as correctly pointed out by
respondents, the sidewalk still exists. If petitioner believes that respondents fence
indeed encroaches on the sidewalk, it may be so proven in a hearing conducted for
that purpose. Not being a nuisance per se, but at most a nuisance per accidens, its
summary abatement without judicial intervention is unwarranted.

(4) Lucena Grand Terminal, Inc. v. JAC Liner, Inc.


G.R. No. 148339
23 February 2005

Unless a thing is nuisance per se, however, it may not be abated via an ordinance,
without judicial proceedings.

FACTS. Respondent, JAC Liner, Inc., a common carrier operating buses which ply
various routes to and from Lucena City, assailed, via a petition for prohibition and
injunction against the City of Lucena, its Mayor, and the Sangguniang Panlungsod of
Lucena before the Regional Trial Court (RTC) of Lucena City, City Ordinance Nos.
1631 and 1778 as unconstitutional on the ground that, inter alia, the same
constituted an invalid exercise of police power, an undue taking of private property,
and a violation of the constitutional prohibition against monopolies. Respondent,

248
who had maintained a terminal within the city, was one of those affected by the
ordinances. Petitioner, Lucena Grand Central Terminal, Inc., claiming legal interest
as the grantee of the exclusive franchise for the operation of the common terminal,
was allowed to intervene in the petition before the trial court.

RTC rendered judgment upholding the validity of the ordinance no. 1631 and 1778.
By Decision of December 15, 2000, the appellate court dismissed the petition and
affirmed the challenged orders of the trial court. Its motion for reconsideration
having been denied by the appellate court by Resolution dated June 5, 2001. Hence
this petition.

ISSUE. Did the City of Lucena properly exercised its police power when it enacted
the subject ordinances?

RULING. As with the State, the local government may be considered as having
properly exercised its police power only if the following requisites are met: (1) the
interests of the public generally, as distinguished from those of a particular class,
require the interference of the State, and (2) the means employed are reasonably
necessary for the attainment of the object sought to be accomplished and not unduly
oppressive upon individuals. Otherwise stated, there must be a concurrence of a
lawful subject and lawful method.

In the subject ordinances, however, the scope of the proscription against the
maintenance of terminals is so broad that even entities which might be able to
provide facilities better than the franchised terminal are barred from operating at
all.

Neither are terminals public nuisances as petitioner argues. For their operation is a
legitimate business which, by itself, cannot be said to be injurious to the rights of
property, health, or comfort of the community.

But even assuming that terminals are nuisances due to their alleged indirect effects
upon the flow of traffic, at most they are nuisance per accidens, not per se.

Unless a thing is nuisance per se, however, it may not be abated via an ordinance,
without judicial proceedings, as was done in the case at bar.

(5) Hidalgo Enterprises, Inc. v. Balandan


G.R. No. L-3422

249
13 June 1952

The attractive nuisance doctrine generally is not applicable to bodies of water,


artificial as well as natural, in the absence of some unusual condition or artificial
feature other than the mere water and its location.

FACTS. Hidalgo Enterprises, Inc. "was the owner of an ice-plant factory in the City
of San Pablo, Laguna, in whose premises were installed two tanks full of water, nine
feet deep, for cooling purposes of its engine. While the factory compound was
surrounded with fence, the tanks themselves were not provided with any kind of
fence or top covers. The edges of the tanks were barely a foot high from the surface
of the ground. Through the wide gate entrance, which is continually open, motor
vehicles hauling ice and persons buying said commodity passed, and any one could
easily enter the said factory, as he pleased. There was no guard assigned on the gate.
At about noon of April 16, 1948, plaintiff's son, Mario Balandan, a boy barely 8 years
old, while playing with and in company of other boys of his age entered the factory
premises through the gate, to take a bath in one of said tanks; and while thus
bathing, Mario sank to the bottom of the tank, only to be fished out later, already a
cadaver, having been died of asphyxia secondary to drowning .

The Court of Appeals, and the Court of First Instance of Laguna, took the view that
the petitioner maintained an attractive nuisance (the tanks), and neglected to adopt
the necessary precautions to avoid accidents to persons entering its premises. It
applied the doctrine of attractive nuisance, of American origin, recognized in our
Jurisdiction in Taylor vs. Manila Electric 16 Phil., 8. The doctrine may be stated, in
short, as follows:

One who maintains on his premises dangerous instrumentalities or appliances of a


character likely to attract children in play, and who fails to exercise ordinary care to
prevent children from playing therewith or resorting thereto, is liable to a child of
tender years who is injured thereby, even if the child is technically a trespasser in
the premises.

ISSUE. Is the subject body of water an attractive nuisance?

RULING. No. The attractive nuisance doctrine generally is not applicable to bodies
of water, artificial as well as natural, in the absence of some unusual condition or
artificial feature other than the mere water and its location.

250
Nature has created streams, lakes and pools which attract children. Lurking in their
waters is always the danger of drowning. Against this danger children are early
instructed so that they are sufficiently presumed to know the danger; and if the
owner of private property creates an artificial pool on his own property, merely
duplicating the work of nature without adding any new danger . . . (he) is not liable
because of having created an "attractive nuisance."

The appealed decision is reversed and the Hidalgo Enterprises, Inc. is absolved from
liability.

(6) Calma v. Court of Appeals


G.R. No. 78447
17 August 1989

FACTS. Sometime in August 1975, the spouses Restituto and Pilar Calma
purchased a lot in respondent Pleasantville Development Corporation's subdivision.
They built a house and established residence therein.

In 1979-1980 the spouses Ong purchased the lot in front of petitioners house and
established residence therein and conducted their business.

On 25 April 1981, petitioner Calma wrote the president of the Association of


Residents of City Heights, Inc. complaining that the compound of the Ongs was
being utilized as a lumber yard and loathsome noises emanated from it.

On reply the association referred the matter to the Ongs who took action. Petitioner
was unsatisfied and demanded for the association to abate the nuisance. Petitioner
did not receive a reply and as such filed a complaint for damages against the Ong
spouses and PLEASANTVILLE. Petitioner also filed a case in the National Housing
Authority.

The COMMISSION, which had in the meantime taken over the powers of the NHA,
dismissed the complaint but ordered respondents to abate the nuisance in the
compound. It held that it was a part of its implied warranty that its subdivision lots
would be used solely and primarily for residential purpose.

PLEASANTVILLE filed a petition for prohibition with preliminary injunction. The


Court of Appeals granted the petition holding that the Commission acted in excess of
its jurisdiction. Aggrieved, petitioner brought the present recourse.

251
ISSUE. Whether or not there was grave abuse of discretion on the part of the
Commission.

RULING. The Court held that there no reversible error committed by the Court of
Appeals when it nullified the assailed portion of the COMMISSION's decision, the
order granting the writ of execution, and any writ of execution issued pursuant
thereto.

The COMMISSION's conclusion that the activities being conducted and the
structures in the property of the Ongs constituted a nuisance was not supported by
any evidence. Accordingly the Solicitor General admits that the decision of the
COMMISSION did not make any finding of a nuisance. Apparently the COMMISSION
assumed the existence of the nuisance, without receiving evidence on the matter, to
support its order for the prevention or abatement of the alleged nuisance.

Moreover, the spouses Ong, were not even party to the proceedings before the
COMMISSION which culminated in the order for the prevention or abatement of the
alleged nuisance. The parties before the COMMISSION were petitioner and
PLEASANTVILLE only, although the persons who would be directly affected by a
decision favorable to petitioner would be the Ong spouses.

(7) Parayno v. Jovellanos


G.R. No. 148408
14 July 2006

FACTS. Concepcion Parayno was the owner of a gasoline filling station in Calasiao,
Pangasinan. In 1989, some residents of Calasiao petitioned the Sangguniang Bayan
(SB) of said municipality for the closure or transfer of the station to another
location. The matter was referred to the Municipal Engineer, Chief of Police,
Municipal Health Officer and the Bureau of Fire Protection for investigation. Upon
their advice, the Sangguniang Bayan recommended to the Mayor the closure or
transfer of location of petitioner's gasoline station on the following grounds:

1. the existing gasoline station is a blatant violation and disregard of the Official
Zoning Code of Calasiao because it is less than a hundred meters away from
an elementary school and a church;

252
2. it is in a thickly populated area with commercial/residential buildings, and
houses closed to each other which endanger the lives and safety of the people
in case of fire;

3. the residents complain of the irritating smell of gasoline most of the time
especially during gas filling, exposing the residents especially children to
frequent colds, asthma, cough and the like;

4. it violated the Building and Fire Safety Codes because the station has a 2nd
storey used for business rental offices, with iron grilled windows, no
firewalls; and

5. it hampers the flow of traffic, the entrance and exit are closed to the street
property lines.

Petitioner moved for the reconsideration of the SB resolution but it was denied.
Hence, she filed a special civil action for prohibition and mandamus with the RTC of
Dagupan City.

PETITIONERS ARGUMENT. The gasoline station was not covered by Section 44 of


the Official Zoning Code since it was not a "gasoline service station" but a "gasoline
filling station" governed by Section 21 thereof. She added that the decision of the
HLURB, in a previous case filed by the same respondent Jovellanos against her
predecessor (Dennis Parayno), barred the grounds invoked by respondent
municipality in Resolution No. 50.

RTC RULING. Section 44 of the Official Zoning Code of respondent municipality


does not mention a gasoline filling station, but following the principle of ejusdem
generis, a gasoline filling station falls within the ambit of Section 44. Justice dictates
that the gasoline station should not be allowed to continue operating its business
because it endangers the lives and safety of people.

CA denied petition for certiorari, prohibition and mandamus, with a prayer for
injunctive relief.

ISSUE. Did respondent municipality invalidly use its police powers in ordering the
closure/transfer of petitioner's gasoline station?

RULING. NO. A local government is considered to have properly exercised its


police powers only when the following requisites are met: (1) the interests of the

253
public generally, as distinguished from those of a particular class, require the
interference of the State and (2) the means employed are reasonably necessary for
the attainment of the object sought to be accomplished and not unduly oppressive.
The first requirement refers to the equal protection clause and the second, to the
due process clause of the Constitution.

Respondent municipality failed to comply with the due process clause when it
passed Resolution No. 50. While it maintained that the gasoline filling station of
petitioner was less than 100 meters from the nearest public school and church, the
records do not show that it even attempted to measure the distance,
notwithstanding that such distance was crucial in determining whether there was
an actual violation of Section 44. The different local offices that respondent
municipality tapped to conduct an investigation never conducted such
measurement either.

Petitioners business could not be considered a nuisance which respondent


municipality could summarily abate in the guise of exercising its police powers. The
abatement of a nuisance without judicial proceedings is possible only if it is a
nuisance per se. A gas station is not a nuisance per se or one affecting the immediate
safety of persons and property; hence, it cannot be closed down or transferred
summarily to another location.

Respondent municipality could not find solace in the legal maxim of ejusdem generis
which means of the same kind, class or nature. Under this maxim, where general
words follow the enumeration of particular classes of persons or things, the general
words will apply only to persons or things of the same general nature or class as
those enumerated. Instead, what applied in this case was the legal maxim xclusion
unius est xclusion alterius which means that the express mention of one thing
implies the exclusion of others. Hence, because of the distinct and definite meanings
alluded to the two terms by the zoning ordinance, respondents could not insist that
gasoline service station under Section 44 necessarily included gasoline filling
station under Section 21. Indeed, the activities undertaken in a gas service station
did not automatically embrace those in a gas filling station.

---oOo---

254
CHAPTER XI
VOLUNTARY EASEMENT

(1) Pilar Development Corporation v. Dumadag


G.R. No. 194336
11 March 2013

FACTS. Challenged in this petition for review on certiorari under Rule 45 of the
Rules of Civil Procedure are the March 5, 2010 Decision and October 29, 2010
Resolution of the Court of Appeals (CA) in CA-G.R. CV No. 90254, which affirmed the
May 30, 2007 Decision of the Las Pias Regional Trial Court, Branch 197 (trial
court) dismissing the complaint filed by petitioner.

Petitioner filed a Complaint for accion publiciana with damages against respondents
for allegedly building their shanties, without its knowledge and consent, in its 5,613-
square-meter property located at Daisy Road, Phase V, Pilar Village Subdivision,
Almanza, Las Pias City.

Trial ensued. Both parties presented their respective witnesses and the trial court
additionally conducted an ocular inspection of the subject property. On May 30,
2007, the trial court dismissed petitioner's complaint, finding that the land being
occupied by respondents are situated on the sloping area going down and leading
towards the Mahabang Ilog Creek, and within the three-meter legal easement; thus,
considered as public property and part of public dominion under Article 502 of the
New Civil Code (Code), which could not be owned by petitioner.

The trial court opined that respondents have a better right to possess the occupied
lot, since they are in an area reserved for public easement purposes and that only
the local government of Las Pias City could institute an action for recovery of
possession or ownership. Petitioner filed a motion for reconsideration, but the same
was denied by the trial court in its Order dated August 21, 2007.

Consequently, petitioner elevated the matter to the Court of Appeals which, on


March 5, 2010, sustained the dismissal of the case. The motion for reconsideration
filed by petitioner was denied by the CA per Resolution dated October 29, 2010,
hence, this petition.

APPELATE COURTS RULING. Referring to Section 2 of Administrative Order (A.O.)


No. 99-21 of the Department of Environment and Natural Resources (DENR), the

255
appellate court ruled that the 3-meter area being disputed is located along the creek
which, in turn, is a form of a stream; therefore, belonging to the public dominion. It
said that petitioner could not close its eyes or ignore the fact, which is glaring in its
own title, that the 3-meter strip was indeed reserved for public easement. By relying
on the TCT, it is then estopped from claiming ownership and enforcing its supposed
right. Unlike the trial court, however, the CA noted that the proper party entitled to
seek recovery of possession of the contested portion is not the City of Las Pias, but
the Republic of the Philippines, through the Office of the Solicitor General (OSG),
pursuant to Section 101 of Commonwealth Act (C.A.) No. 141 (otherwise known as
The Public Land Act).

COMPLAINANT. Petitioner claims that said parcel of land, which is duly registered
in its name under Transfer Certificate of Title No. 481436 of the Register of Deeds
for the Province of Rizal, was designated as an open space of Pilar Village
Subdivision intended for village recreational facilities and amenities for subdivision
residents.

RESPONDENT. Respondents denied the material allegations of the Complaint and


briefly asserted that it is the local government, not petitioner, which has jurisdiction
and authority over them.

ISSUE. Does the petitioner retains ownership although the portion of the subject
property occupied by respondents is within the 3-meter strip reserved for public
easement since the strip does not form part of the public dominion?

RULING. No. An easement or servitude is a real right on another's property,


corporeal and immovable, whereby the owner of the latter must refrain from doing
or allowing somebody else to do or something to be done on his or her property, for
the benefit of another person or tenement; it is jus in re aliena, inseparable from the
estate to which it actively or passively belongs, indivisible, perpetual, and a
continuing property right, unless extinguished by causes provided by law. The Code
defines easement as an encumbrance imposed upon an immovable for the benefit of
another immovable belonging to a different owner or for the benefit of a
community, or of one or more persons to whom the encumbered estate does not
belong. There are two kinds of easement according to source: by law or by will of
the owners the former are called legal and the latter voluntary easement. A legal
easement or compulsory easement, or an easement by necessity constituted by law
has for its object either public use or the interest of private persons.

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While Article 630 of the Code provides for the general rule that "the owner of the
servient estate retains the ownership of the portion on which the easement is
established, and may use the same in such a manner as not to affect the exercise of
the easement," Article 635 thereof is specific in saying that "all matters concerning
easements established for public or communal use shall be governed by the special
laws and regulations relating thereto, and, in the absence thereof, by the provisions
of this Title Title VII on Easements or Servitudes."

The above prove that petitioner's right of ownership and possession has been
limited by law with respect to the 3-meter strip/zone along the banks of Mahabang
Ilog Creek. Despite this, the Court cannot agree with the trial court's opinion, as to
which the CA did not pass upon, that respondents have a better right to possess the
subject portion of the land because they are occupying an area reserved for public
easement purposes. Similar to petitioner, respondents have no right or title over it
precisely because it is public land. Likewise, we repeatedly held that squatters have
no possessory rights over the land intruded upon. The length of time that they may
have physically occupied the land is immaterial; they are deemed to have entered
the same in bad faith, such that the nature of their possession is presumed to have
retained the same character throughout their occupancy.

(2) Bicol Agro Industrial Corporation v. Obias


G.R. No. 172077
9 October 2009

FACTS. Sometime in 1972, the Bicol Sugar Development Corporation (BISUDECO)


was established at Himaao, Pili, Camarines Sur. In the same year, BISUDECO
constructed a road (the disputed road) measuring approximately 7 meters wide and
2.9 kilometers long. The disputed road was used by BISUDECO in hauling and
transporting sugarcane to and from its mill site (Pensumil) and has thus become
indispensable to its sugar milling operations. Bicol Agro-Industrial Producers
Cooperative, Inc. acquired the assets of BISUDECO. petitioner filed a
Complaint[5]against respondents EdmundoObias, Perfecto Obias, Victor Bagasina,
Elena Benosa, MelchorBrandes, Rogelio Montero, Pedro Montero, Claudio Resari,
PilarGalon, Antonio Buison, PrudencioBenosa, Jr., Victor Bagasina Jr., Maria Villamer,
and Roberto Padua, alleging that on March 27, 1993 and April 3, 1993, respondents
unjustifiably barricaded the disputed road by placing bamboos, woods, placards and
stones across it, preventing petitioners and the other sugar planters vehicles from
passing through the disputed road, thereby causing serious damage and prejudice to
petitioner. respondents denied having entered into an agreement with BISUDECO

257
regarding the construction and the use of the disputed road. They alleged that
BISUDECO, surreptitiously and without their knowledge and consent, constructed
the disputed road on their properties and has since then intermittently and
discontinuously used the disputed road for hauling sugarcane despite their repeated
protests. Respondents claimed they tolerated BISUDECO in the construction and the
use of the road since BISUDECO was a government-owned and controlled
corporation, and the entire country was then under Martial Law. Respondents
likewise denied that the road has become a public road, since no public funds were
used for its construction and maintenance. They added the fact that they are actual
tillers of the ricelands, having acquired their rights over said lands under
Presidential Decree No. 27. It was proven that there was no contract between
BISUDECO and the owners of the land. The RTC rendered its decision that Bicol
Agro-Industrial Cooperative, Inc., (BAPCI) is hereby ordered to pay the owners of
the lots affected by the road . Upon full payment thereof, the plaintiff shall be
declared the absolute owner of the road in question. Legal rate if interest is hereby
imposed upon the plaintiff from the finality of this decision until fully payment
hereof. The Court of Appeals affirmed the decision.

ISSUE. Can the BAPSI claim the road by virtue of prescription?

RULING. NO. We found no conclusive proof to sufficiently establish the existence


of an agreement between BISUDECO and the defendants-appellants regarding the
construction and the use of the disputed road. Based on the foregoing, the inability
of petitioner to prove the existence of an agreement militates its allegations in
herein petition. On this score, both the RTC and the CA are one in ruling that
petitioner had failed to prove the existence of the agreement between BISUDECO
and the respondents for the construction of the road. Also, well-established is the
rule that "factual findings of the Court of Appeals are conclusive on the parties and
carry even more weight when the said court affirms the factual findings of the trial
court."

(3) Alcantara v. Reta


G.R. No. 136996
14 December 2001

FACTS. Petitioners filed a complaint against respondent for the exercise of right of
first refusal under Presidential Decree No. 1517. They claimed that they were
tenants of the land located at Sasa, Davao City, which is owned by respondent and
converted into a commercial center, thus threatening them of ejection from the land.

258
They insisted that they have the right of first refusal to purchase the land in
accordance with Sec. 3 (g), PD 1517 since they are legitimate tenants. Respondent
countered that the petitioners claim is beyond the ambit of PD 1517. The trial court
dismissed the complaint in March 1994, and was upheld a month later by the CA.

ISSUE. Do the petitioners have the right of first refusal under PD 1517?

RULING. Presidential Decree No. 1517, otherwise known as "The Urban Land
Reform Act," pertains to areas proclaimed as Urban Land Reform Zones.
Consequently, petitioners cannot claim any right under the said law since the land
involved is not an ULRZ. To be able to qualify and avail oneself of the rights and
privileges granted by the said decree, one must be: 1. A legitimate tenant of the land
for 10 years or more; 2. Must have built his home on the land by contract; and, 3.
Has resided continuously for the last 10 years. Obviously, those who do not fall
within the said category cannot be considered "legitimate tenants" and, therefore,
not entitled to the right of first refusal to purchase the property should the owner of
the land decide to sell the same at a reasonable price within a reasonable time.
Petitioner Roble was allowed to construct his house on the land because it would
facilitate his gathering of tuba. This would be in the nature of a personal easement
under Article 614 of the Civil Code.

(4) National Irrigation Administration v. Court of Appeals


G.R. No. 129169
17 November 1999

FACTS. A competitive bidding held by NIA in August 1978, Hydro Resources


Contractors Corporation (hereafter HYDRO) was awarded Contract MPI-C-2 for the
construction of the main civil works of the Magat River Multi-Purpose Project. The
contract provided that HYDRO would be paid partly in Philippine pesos and partly
in U.S. dollars. HYDRO substantially completed the works under the contract in 1982
and final acceptance by NIA was made in 1984. HYDRO thereafter determined that it
still had an account receivable from NIA representing the dollar rate differential of
the price escalation for the contract.

After unsuccessfully pursuing its case with NIA, HYDRO, on 7 December 1994, filed
with the CIAC a Request for Adjudication of the aforesaid claim. HYDRO nominated
six arbitrators for the arbitration panel, from among whom CIAC appointed Engr.
Lauro M. Cruz. On 6 January 1995, NIA filed its Answer wherein it questioned the
jurisdiction of the CIAC alleging lack of cause of action, laches and estoppel in view

259
of HYDROs alleged failure to avail of its right to submit the dispute to arbitration
within the prescribed period as provided in the contract. On the same date, NIA filed
a Compliance wherein it nominated six arbitrators, from among whom CIAC
appointed Atty. Custodio O. Parlade, and made a counterclaim for damages.

At the preliminary conference, NIA manifested that it could not admit the
genuineness of HYDROs evidence since NIAs records had already been destroyed.
NIA requested an opportunity to examine the originals of the documents which
HYDRO agreed to provide.

On 13 March 1995, NIA filed a Motion to Dismiss alleging lack of jurisdiction over
the disputes. NIA contended that there was no agreement with HYDRO to submit the
dispute to CIAC for arbitration considering that the construction contract was
executed in 1978 and the project completed in 1982, whereas the Construction
Industry Arbitration Law creating CIAC was signed only in 1985; and that while they
have agreed to arbitration as a mode of settlement of disputes, they could not have
contemplated submission of their disputes to CIAC. NIA further argued that records
show that it had not voluntarily submitted itself to arbitration by CIAC.

On 11 April 1995, the arbitral body issued an order which deferred the
determination of the motion to dismiss and resolved to proceed with the hearing of
the case on the merits as the grounds cited by NIA did not seem to be indubitable.
NIA filed a motion for reconsideration of the aforesaid Order. CIAC in denying the
motion for reconsideration ruled that it has jurisdiction over the HYDROs claim over
NIA pursuant to E.O 1008 and that the hearing should proceed as scheduled.

ISSUE. Whether or notrespondent ciac has no authority or juridiction to hear and


try this dispute between the herein parties as e.o. no. 1008 had no retroactive effect.

RULING. The CIAC has jurisdiction over the controversy. Executive Order No.1008,
otherwise known as the Construction Industry Arbitration Law which was
promulgated on 4 February 1985, vests upon CIAC original and exclusive
jurisdiction over disputes arising from, or connected with contracts entered into by
parties involved in construction in the Philippines, whether the dispute arises
before or after the completion of the contract, or after the abandonment or breach
thereof. The disputes may involve government or private contracts. For the Board to
acquire jurisdiction, the parties to a dispute must agree to submit the same to
voluntary arbitration.

260
The complaint of HYDRO against NIA on the basis of the contract executed between
them was filed on 7 December 1994, during the effectivity of E.O. No. 1008. Hence, it
is well within the jurisdiction of CIAC. The jurisdiction of a court is determined by
the law in force at the time of the commencement of the action.

NIA also contended that the CIAC did not acquire jurisdiction over the dispute since
it was only HYDRO that requested for arbitration. It asserts that to acquire
jurisdiction over a case, as provided under E.O. 1008, the request for arbitration
filed with CIAC should be made by both parties, and hence the request by one party
is not enough.

It is undisputed that the contracts between HYDRO and NIA contained an


arbitration clause wherein they agreed to submit to arbitration any dispute between
them that may arise before or after the termination of the agreement. Consequently,
the claim of HYDRO having arisen from the contract is arbitrable.

Under the present Rules of Procedure, for a particular construction contract to fall
within the jurisdiction of CIAC, it is merely required that the parties agree to submit
the same to voluntary arbitration. Unlike in the original version of Section 1, as
applied in the Tesco case, the law as it now stands does not provide that the parties
should agree to submit disputes arising from their agreement specifically to the
CIAC for the latter to acquire jurisdiction over the same. Rather, it is plain and clear
that as long as the parties agree to submit to voluntary arbitration, regardless of
what forum they may choose, their agreement will fall within the jurisdiction of the
CIAC, such that, even if they specifically choose another forum, the parties will not
be precluded from electing to submit their dispute before the CIAC because this
right has been vested upon each party by law, i.e., E.O. No. 1008.

Moreover, it is undeniable that NIA agreed to submit the dispute for arbitration to
the CIAC. NIA through its counsel actively participated in the arbitration
proceedings by filing an answer with counterclaim, as well as its compliance
wherein it nominated arbitrators to the proposed panel, participating in the
deliberations on, and the formulation of, the Terms of Reference of the arbitration
proceeding, and examining the documents submitted by HYDRO after NIA asked for
the originals of the said documents.

As to the defenses of laches and prescription, they are evidentiary in nature which
could not be established by mere allegations in the pleadings and must not be
resolved in a motion to dismiss. Those issues must be resolved at the trial of the
case on the merits wherein both parties will be given ample opportunity to prove

261
their respective claims and defenses. Under the rule the deferment of the resolution
of the said issues was, thus, in order. An allegation of prescription can effectively be
used in a motion to dismiss only when the complaint on its face shows that indeed
the action has already prescribed. In the instant case, the issue of prescription and
laches cannot be resolved on the basis solely of the complaint. It must, however, be
pointed that under the new rules, deferment of the resolution is no longer
permitted. The court may either grant the motion to dismiss, deny it, or order the
amendment of the pleading.

(5) Camarines Norte Electric Coop. v. Court of Appeals


345 SCRA 85
20 November 2000

A courts writ of demolition cannot prevail over the easement of a right-of-way which
falls within the power of eminent domain.

FACTS. On May 18, 1989, Conrad L. Leviste filed with the Regional Trial Court,
Daet, Camarines Norte, a complaint for collection of a sum of money and foreclosure
of mortgage against Philippine Smelter Corporation (PSC). For failure to file an
answer to the complaint, the trial court declared PSC in default and allowed plaintiff
Leviste to present evidence ex-parte. On November 23, 1989, the trial court
rendered a decision in favor of plaintiff and against the defendant ordering the latter
to pay damages, attorneys fees and litigation expenses.

When the decision became final and executory, the trial court issued a writ of
execution and respondent sheriff Eduardo R. Moreno levied upon two (2) parcels of
land covered TCT Nos. T-13505 and T-13514 issued by the Registrar of Deeds in the
name of PSC. On April 24, 1990, the parcels of land were sold at public auction in
favor of Vines Realty Corporation (Vines Realty). On June 23, 1992, Vines Realty
moved for the issuance of a writ of possession over said property. On August 7,
1992, copy of the writ of possession was served on petitioner as owner of the power
lines standing on certain portions of the subject property. Later, on August 12, 1992,
Vines Realty filed an amended motion for an order of demolition and removal of
improvements on the subject land. Among the improvements for removal were the
power lines and electric posts belonging to petitioner.

The trial court ordered the issuance of a writ of demolition.

262
Petitioner filed with the Court of Appeals a petition for prohibition with restraining
order and preliminary injunction. Petitioner argued that the trial court acted
without or in excess of its jurisdiction or with grave abuse of discretion in issuing
the order. The Court of Appeals sent telegrams to respondents informing them of
the issuance of a restraining order. On the same day, however, the trial court issued
a writ of demolition.

On December 11, 1992, the trial court issued another order directing the National
Power Corporation sub-unit in Camarines Norte to shut off the power lines
energizing the New Lucena Oil Products Corporation, one of the consumers serviced
by petitioner, as shown by the radiogram. On the same day respondent Vines Realty
cut down petitioners electric posts professedly using a chainsaw and resulting in a
loud blast affecting the area.

In response to the publics urgent basic need, petitioner re-constructed its power
lines along the provincial road leading to the Port of Osmea upon authority of the
District Engineer of the Department of Public Works and Highways. On April 23,
1993, however, petitioner received a letter from Vines Realty stating its opposition.

ARGUMENT OF THE PETITIONER. Petitioner argued that the power lines were
constructed within the right of way of the provincial road leading to the port of
Osmea as granted by the District Engineer of DPWH. Therefore, it has the right to
re-construct its power lines to provide public utilities to the people.

DEFENSE OF THE RESPONDENT. The respondent was the owner of the roadside
and that petitioner could not construct power lines therein without its permission.

ISSUE. Do electric cooperatives, like CANORECO, have the vested right to exercise
the Power of Eminent Domain?

RULING. Yes. Section 16 of Presidential Decree No. 269, provides that Electric
Cooperatives have the power to:

(j) To construct, maintain and operate electric transmission and distribution


lines along, upon, under and across publicly owned lands and public
thoroughfares, including, without limitation, all roads, highways, streets,
alleys, bridges and causeways; Provided, that such shall not prevent or
unduly impair the primary public uses to which such lands and
thoroughfares are otherwise devoted;

263
(k) To exercise the power of eminent domain in the manner provided by law
for the exercise of such power by other corporations constructing or
operating electric generating plants and electric transmission and
distribution lines or systems.

The acquisition of an easement of a right-of-way falls within the purview of the


power of eminent domain. Such conclusion finds support in easements of right-of-
way where the Supreme Court sustained the award of just compensation for private
property condemned for public use. It is unquestionable that real property may,
through expropriation, be subjected to an easement of right-of-way. Vines Realty
retains full ownership and it is not totally deprived of the use of the land. It can
continue doing what it wants to do with the land, except those that would result in
contact with the wires. The acquisition of this easement, nevertheless, is not gratis.
Considering the nature and effect of the installation power lines, the limitations on
the use of the land for an indefinite period deprives private respondents of its
ordinary use. For these reasons, Vines Realty is entitled to payment of just
compensation. CANORECO only sought the continuation of the exercise of its right-
of-way easement and not ownership over the land. Public utilities power of eminent
domain may be exercised although title is not transferred to the expropriator.

Therefore, private respondents are ordered to restore or restitute petitioners


electric posts and power lines or otherwise indemnify petitioner for the cost of the
restoration thereof. Private respondents are permanently enjoined or prohibited
from disturbing or interfering with the operation and maintenance of the business
of petitioner.

(6) Villanueva v. Velasco


G.R. No. 130845
27 November 2000

FACTS. Petitioner Bryan Villanueva is the registered owner of the parcel of land.
He bought it from Pacific Banking Corporation. The bank had acquired it from the
spouses Maximo and Justina Gabriel at a public auction. There was a small house on
its southeastern portion. It occupied one meter of the two-meter wide easement of
right of way the Gabriel spouses granted to the Espinolas, predecessors-in-interest
of private respondents, in a Contract of Easement of Right of Way. This Agreement
shall be binding between the parties and upon their heirs, successors, assigns,
without prejudice in cases of sale of subject property that will warrant the
circumstances.

264
Unknown to petitioner, even before he bought the land, the Gabriels had
constructed the aforementioned small house that encroached upon the two-meter
easement. Petitioner was also unaware that private respondents, Julio Sebastian and
Shirley Lorilla, had filed Civil for easement, damages and with prayer for a writ of
preliminary injunction and restraining order against the spouses Gabriel. As
successors-in-interest, Sebastian and Lorilla wanted to enforce the contract of
easement.

The trial court issued a TRO. It issued a writ of preliminary mandatory injunction
ordering the Gabriels to provide the right of way and to demolish the small house
encroaching on the easement. The Gabriels filed a motion for reconsideration which
was also denied. Thus, they filed a petition for certiorari before the C.A which the
C.A. dismissed.

A Writ of Demolition was issued. Petitioner filed a Third Party Claim with Prayer to
Quash Alias Writ of Demolition. He maintains that the writ of demolition could not
apply to his property since he was not a party to the civil case which was denied for
lack of merit.

Petitioner filed a petition for certiorari before C.A. asserting that the existence of the
easement of right of way was not annotated in his title and that he was not a party to
Civil Case. Hence, the contract of easement executed by the Gabriels in favor of the
Espinolas could not be enforced against him. The Court of Appeals dismissed the
petition.

Petitioner argues it could not be enforced against him. First, he says that a right of
way cannot exist when it is not expressly stated or annotated on the Torrens title.
Second, petitioner points out that the trial court erred when it faulted him for
relying solely on the clean title of the property he bought, as it is well-settled that a
person dealing with registered land is not required to go beyond what is recorded in
the title. Lastly, since he was not a party to Civil Case No. Q-91-8703, petitioner
argues that he cannot be bound by the writ of demolition and be forcibly divested of
a portion of his land without having his day in court.

Hence, this instant petition.

ISSUE. Does the easement on the property binds petitioner?

265
RULING. The subject easement (right of way) originally was voluntarily
constituted by agreement between the Gabriels and the Espinolas. But as correctly
observed by the Court of Appeals, the easement in the instant petition is both (1) an
easement by grant or a voluntary easement, and (2) an easement by necessity or a
legal easement. A legal easement is one mandated by law, constituted for public use
or for private interest, and becomes a continuing property right. As a compulsory
easement, it is inseparable from the estate to which it belongs, as provided for in
said Article 617 of the Civil Code. The essential requisites for an easement to be
compulsory are: (1) the dominant estate is surrounded by other immovables and
has no adequate outlet to a public highway; (2) proper indemnity has been paid; (3)
the isolation was not due to acts of the proprietor of the dominant estate; (4) the
right of way claimed is at a point least prejudicial to the servient estate; and (5) to
the extent consistent with the foregoing rule, where the distance from the dominant
estate to a public highway may be the shortest. The trial court and the Court of
Appeals have declared the existence of said easement (right of way). This finding of
fact of both courts below is conclusive on this Court. The small house occupying one
meter of the two-meter wide easement obstructs the entry of private respondents
cement mixer and motor vehicle. One meter is insufficient for the needs of private
respondents. It is well-settled that the needs of the dominant estate determine the
width of the easement. Conformably then, petitioner ought to demolish whatever
edifice obstructs the easement in view of the needs of private respondents estate.

Petitioners second proposition, that he is not bound by the contract of easement


because the same was not annotated in the title and that a notice of lis pendens of
the complaint to enforce the easement was not recorded with the Register of Deeds,
is obviously unmeritorious. As already explained, it is in the nature of legal
easement that the servient estate (of petitioner) is legally bound to provide the
dominant estate (of private respondents in this case) ingress from and egress to the
public highway.

Petitioners last argument that he was not a party to Civil Case and that he had not
been given his day in court is without merit. Rule 39, Sec. 47, of the Revised Rules of
Court. A decision in a case is conclusive and binding upon the parties to said case
and those who are their successor in interest by title after said case has been
commenced or filed in court. In this case, private respondents, Julio Sebastian and
Shirley Lorilla, initiated Civil Case against the original owners. Title in the name of
petitioner was entered in the Register of Deeds after he bought the property from
the bank which had acquired it from the Gabriels. Hence, the decision in Civil Case
binds petitioner. Although he is not a party to the suit, he is a successor-in-interest

266
by title subsequent to the commencement of the action in court. The petition is
denied.

(7) Remman Enterprises, Inc. v. Court of Appeals


G.R. No. 188494
26 November 2014

FACTS. The petitioner, through its authorized representative Ronnie P. Inocencio


(Inocencio), filed with the RTC on June 4, 1998 an application for registration of the
subject properties situated in Barangay Napindan, Taguig, Metro Manila, with an
area of 27,477 square meters, 23,179 sq m and 45,636 sq m. The State, through the
Office of the Solicitor General, interposed its opposition to the application.1avvphi1
During the initial hearing of the case on May 4, 1999, the petitioner presented and
marked documentary evidence6 to prove its compliance with jurisdictional
requirements. On October 25, 1999, the petitioner was allowed to present its
evidence before the Branch Clerk of Court of the RTC. Inocencio, the petitioners
sales manager, testified that the subject properties were purchased on August 28,
1989 by the petitioner from sellers Magdalena Samonte, Jaime Aldana and Virgilio
Navarro. The properties were declared for taxation purposes on August 9,
1989.After the sale, the petitioner occupied the properties and planted thereon
crops like rice, corn and vegetables. Witness Cenon Serquia (Serquia) supported
the application for registration by claiming that he had been the caretaker of the
subject properties since 1957, long before the lots were purchased by the petitioner.
Serquia alleged that no person other than the applicant and its predecessors-in-
interest had claimed ownership or rights over the subject properties.

On November 27, 2001, the RTC rendered its Decision granting the petitioners
application. Dissatisfied, the State appealed to the CA by alleging substantive and
procedural defects in the petitioners application. It argued that the identity of the
subject properties was not sufficiently established. The State further claimed that
the character and length of possession required by law in land registration cases
were not satisfied by the petitioner.Finding merit in the appeal, the CA reversed the
RTC decision. The CA explained that the survey plans and technical descriptions
submitted by the petitioner failed to establish the true identity of the subject
properties. The application should have been accompanied by the original tracing
cloth plan duly approved by the Director of Lands. The petitioner should have also
submitted a certification from the proper government office stating that the
properties were already declared alienable and disposable. The CA further cited a
failure to establish that the petitioner and its predecessors-in-interest possessed the

267
subject parcels of land under a bona fide claim of ownership since June 12, 1945 or
earlier.

The petitioner argues that the identity of the subject properties was sufficiently
established through the submission of the original tracing cloth plans, survey plans
and technical descriptions. The alienable and disposable character of the properties
was also duly established via a certification issued by the Community Environment
and Natural Resources Office (CENRO) of the Department of Environment and
Natural Resources (DENR). Further, it claims that it and its predecessors-in-interest
possessed the parcels of land in the nature and within the length of time required by
law.

ISSUE. Is the subject property alienable and disposable?

RULING. No. the CAs dismissal of the petitioners application for original
registration was proper considering the latters failure to sufficiently establish that
the subject properties were already declared alienable and disposable by the
government. Its reliance on a Report, issued by the CENRO, DENR National Capital
Region, West Sector, was misplaced. The Court ruled in Republic v. Medida:

In Republic v. T.A.N. Properties, Inc.,this Court explained that a Provincial


Environment and Natural Resources Office (PENRO) or CENRO certification, by
itself, fails to prove the alienable and disposable character of a parcel of land. We
ruled:

It is not enough for the PENRO or CENRO to certify that a land is alienable and
disposable. The applicant for land registration must prove that the DENR Secretary
had approved the land classification and released the land of the public domain as
alienable and disposable, and that the land subject of the application for registration
falls within the approved area per verification through survey by the PENRO or
CENRO. In addition, the applicant for land registration must present a copy of the
original classification approved by the DENR Secretary and certified as a true copy
by the legal custodian of the official records. These facts must be established to
prove that the land is alienable and disposable. Respondents failed to do so because
the certifications presented by respondent do not, by themselves, prove that the
land is alienable and disposable.

The present rule on the matter then requires that an application for original
registration be accompanied by: (1) CENRO or PENRO Certification; and (2) a copy

268
of the original classification approved by the DENR Secretary and certified as a true
copy by the legal custodian of the official records.

The burden of proof in overcoming the presumption of State ownership of the lands
of the public domain is on the person applying for registration, who must prove that
the properties subject of the application are alienable and disposable. Even the
notations on the survey plans submitted by the petitioner cannot be admitted as
evidence of the subject properties alienability and disposability. Such notations do
not constitute incontrovertible evidence to overcome the presumption that the
subject properties remain part of the inalienable public domain.

(8) Costabella v. Court of Appeals


193 SCRA 333

The owner of the dominant estate may validly claim a compulsory right of way only
after he has established the existence of four requisites, to wit: (1) the (dominant)
estate is surrounded by other immovables and is without adequate outlet to a public
highway; (2) after payment of the proper indemnity; (3) the isolation was not due to
the proprietor's own acts; and (4) the right of way claimed is at a point least
prejudicial to the servient estate.

FACTS. Petitioner owns real estate properties on which it had constructed a resort
and hotel. The private respondents, on the other hand, are the owners of adjoining
properties. Before the petitioner began the construction of its beach hotel, the
private respondents, in going to and from their respective properties and the
provincial road, passed through a passageway which traversed the petitioner's
property. In 1981, the petitioner closed the aforementioned passageway when it
began the construction of its hotel, but nonetheless opened another route across its
property through which the private respondents, as in the past, were allowed to
pass. Later, or sometime in August, 1982, when it undertook the construction of the
second phase of its beach hotel, the petitioner fenced its property thus closing even
the alternative passageway and preventing the private respondents from traversing
any part of it.

As a direct consequence of these closures, an action for injunction with damages


was filed against the petitioner by the private respondents on September 2, 1982
before the then Court of First Instance of Cebu. The private respondents assailed the
petitioner's closure of the original passageway which they (private respondents)
claimed to be an "ancient road right of way" that had been existing before World

269
War II and since then had been used by them, the community, and the general
public, either as pedestrians or by means of vehicles, in going to and coming from
Lapu-Lapu City and other parts of the country. The private respondents averred that
by closing the alleged road right of way in question, the petitioner had deprived
them access to their properties and caused them damages.

In its answer, the petitioner denied the existence of an ancient road through its
property and counter-averred, among others, that it and its predecessors-in-interest
had permitted the temporary, intermittent, and gratuitous use of, or passage
through, its property by the private respondents and others by mere tolerance and
purely as an act of neighborliness. At any rate, the petitioner alleged, the private
respondents were not entirely dependent on the subject passageway as they
(private respondents) had another existing and adequate access to the public road
through other properties.

After trial, the court a quo rendered a decision on finding that the private
respondents had acquired a vested right over the passageway in controversy. This
decision was appealed to the Court of Appeals which rendered its decision stating
that an easement of right of way is a discontinuous one which, under Article 622 of
the New Civil Code, may only be acquired by virtue of a title and not by
prescription. It further ruled that in the interest of justice and in the exercise by
this Court of its equity jurisdiction, the easement sought in this case is a compulsory
one that is legally demandable by the owner of the dominant estate from the owner
of the servient estate. Legally, the old road could be closed; but since the existing
outlet is inconvenient to the plaintiff, equitably the plaintiff should be given a chance
to pay for a more convenient outlet through the land of the defendant at a point
least prejudicial to the latter.

The petitioner contends that the decision of the respondent appellate court is
grossly erroneous and not in accord with the provisions of Articles 649 and 650 of
the Civil Code on easements and the prevailing jurisprudence on the matter, hence,
this petition.

ISSUE. Is Costabella obliged to open its properties for the use of the private
respondents?

RULING. No. Easement of right of way cannot be acquired by prescription and the
respondents were not able to establish a valid claim of compulsory right. The owner
of the dominant estate may validly claim a compulsory right of way only after he has
established the existence of four requisites, to wit: (1) the (dominant) estate is

270
surrounded by other immovables and is without adequate outlet to a public
highway; (2) after payment of the proper indemnity; (3) the isolation was not due to
the proprietor's own acts; and (4) the right of way claimed is at a point least
prejudicial to the servient estate. Additionally, the burden of proving the existence
of the foregoing pre-requisites lies on the owner of the dominant estate.

When there is already an existing adequate outlet from the dominant estate to a
public highway, even if the said outlet, for one reason or another, be inconvenient,
the need to open up another servitude is entirely unjustified. For to justify the
imposition of an easement or right of way, "there must be a real, not a fictitious or
artificial necessity for it."

Hence, the private respondents' properties cannot be said to be isolated, for which a
compulsory easement is demandable. Servitudes of right of way are demanded by
necessity, that is, to enable owners of isolated estates to make full use of their
properties, which lack of access to public roads has denied them. Under Article 649
of the Civil Code, they are compulsory and hence, legally demandable, subject to
indemnity and the concurrence of the other conditions above-referred to.

But while a right of way is legally demandable, the owner of the dominant estate is
not at liberty to impose one based on arbitrary choice. Under Article 650 of the
Code, it shall be established upon two criteria: (1) at the point least prejudical to the
servient state; and (2) where the distance to a public highway may be the shortest.
According, however, to one commentator, "least prejudice" prevails over "shortest
distance." Yet, each case must be weighed according to its individual merits, and
judged according to the sound discretion of the court.

(9) Encarnacion v. Court of Appeals


195 SCRA 74

FACTS. Tomas Encarnacion is the owner of the dominant estate which is bounded
on the north by the servient estates of Eusebio de Sagun and Mamerto Masigno, on
the south by a dried river and the Taal Lake. The servient estate is bounded on the
north by the National Highway.

Prior to 1960, persons going to the national highway would just cross the servient
estate at no particular point. In 1960, Sagun and Masigno enclosed their lands with a
fence but provided a roadpath 25 meters long and about 1 meter in width. At this
time, Encarnacion started his plant nursery business on his land. When his business

271
flourished, it became more difficult to transfer the plants and garden soil through
the use of a pushcart so Encarnacion bought an owner-type jeep for transporting the
plants. However, the jeep could not pass through the roadpath so he approached
Sagun and Masigno asking them if they would sell to him 1 meters of their
property to add to the existing roadpath but the 2 refused the offer.

Encarnacion then instituted an action before the RTC to seek the issuance of a writ
of easement of a right of way over an additional width of at least 2 meters. The RTC
dismissed the complaint for there is another outlet, which is through the dried river
bed. This was affirmed by the CA thus the case at bar.

ISSUE. Whether or not Encarnacion is entitled to an widening of an already


existing easement of right-of-way.

RULING. Encarnacion has sufficiently established his claim.

A right of way may be demanded:

(1) when there is absolutely no access to a public highway; and


(2) when, even if there is one, it is difficult or dangerous to use or is grossly
insufficient.

In the case at bar, although there is a dried river bed, t it traversed by a semi-
concrete bridge and there is no egress or ingress from the highway. For the jeep to
reach the level of the highway, it must literally jump 4-5 meters up. And during
rainy season, it is impassable due to the floods. When a private property has no
access to a public road, it has the right of easement over adjacent servient estates as
a matter of law. With the non-availability of the dried river bed as an alternative
route, the servient estates should accommodate the needs of the dominant estate.
Art. 651 provides that the width of the easement of right of way shall be that which
is sufficient for the needs of the dominant estate To grant the additional
easement of right of way of 1 meters, Encarnacion must indemnify Sagun and
Masigno the value of the land occupied plus amount of the damages caused until his
offer to buy the land is considered.

(10) Fajardo v. Freedom to Build, Inc.


G.R. No. 134692
1 August 2000

272
FACTS. Freedom to Build, Incorporated, an owner-developer and seller of low-cost
housing, sold to Spouses Fajardo a house and lot designated Lot No. 33, Block 14, of
the De la Costa Homes in Barangka, Marikina, Metro Manila. The Contract to Sell
executed between the parties, contained a Restrictive Covenant for the creation of
easements and prohibition for upward expansion of the two-storey buildings. The
above restrictions were also contained in Transfer Certificate of Title No. N-115384
covering the lot issued in the name of spouses.

Despite repeated warnings from respondent, petitioners extended the roof of their
house to the property line and expanded the second floor of their house to a point
directly above the original front wall.

Respondent filed before the Regional Trial Court an action to demolish the
unauthorized structures. The RTC directed the Spouses Fajardo to immediately
demolish and remove the extension of their expanded housing unit that exceeds the
limitations impose on the Restrictive Covenant. On appeal, the CA affirmed the
decision of the lower court.

ISSUE. Whether or not the Restrictive Covenant for easements serve as


unreasonable restriction on the use of ones property.

RULING. Courts which generally view restrictive covenants with disfavor for being
a restriction on the use of one's property, have, nevertheless, sustained them where
the covenants are reasonable, not contrary to public policy, or to law, and not in
restraint of trade.

The provisions in a restrictive covenant prescribing the type of the building to be


erected are crafted not solely for the purpose of creating easements, generally of
light and view, nor as a restriction as to the type of construction, but may also be
aimed as a check on the subsequent uses of the building conformably with what the
developer originally might have intended the stipulations to be. There appears to be
no cogent reasons for not upholding restrictive covenants aimed to promote
aesthetics, health, and privacy or to prevent overcrowding.

A suit for equitable enforcement of a restrictive covenant can only be made by one
for whose benefit it is intended. It is not normally enforceable by one who has no
right nor interest in the land for the benefit of which the restriction has been
imposed. Thus, a developer of a subdivision can enforce restrictions, even as against
remote grantees of lots, only if he retains part of the land. There would have been
merit in the argument of petitioners that respondent, having relinquished

273
ownership of the subdivision to the homeowners, is precluded from claiming any
right or interest on the same property - had not the homeowners' association,
confirmed by its board of directors, allowed respondent to enforce the provisions of
the restrictive covenant.

(11) De la Cruz v. Ramiscal


G.R. No. 137882
February 04, 2005

FACTS. Respondent Olga Ramiscal is the registered owner of a parcel of land


located at the corner of 18th Avenue and Boni Serrano Avenue, Murphy, Quezon
City, covered by Transfer Certificate of Title (TCT) No. 300302 of the Register of
Deeds for Quezon City. Petitioners SPS. ELIZABETH and ALFREDO DE LA CRUZ are
occupants of a parcel of land, with an area of eighty-five (85) square meters, located
at the back of Ramiscals property, and covered by TCT No. RT-56958 (100547) in
the name of Concepcion de la Pea, mother of petitioner Alfredo de la Cruz.

The subject matter of this case is a 1.10-meter wide by 12.60-meter long strip of
land owned by respondent which is being used by petitioners as their pathway to
and from 18th Avenue, the nearest public highway from their property. Petitioners
had enclosed the same with a gate, fence, and roof.

In 1976, respondent leased her property, including the building thereon, to Phil.
Orient Motors. Phil. Orient Motors also owned a property adjacent to that of
respondents. In 1995, Phil. Orient Motors sold its property to San Benito Realty.
After the sale, Engr. Rafael Madrid prepared a relocation survey and location plan
for both contiguous properties of respondent and San Benito Realty. It was only
then that respondent discovered that the aforementioned pathway being occupied
by petitioners is part of her property.

Through her lawyer, respondent immediately demanded that petitioners demolish


the structure constructed by them on said pathway without her knowledge and
consent. As her letter dated 18 February 1995 addressed to petitioners went
unheeded, the former referred the matter to the Barangay for conciliation
proceedings, but the parties arrived at no settlement. Hence, respondent filed this
complaint with the RTC in Civil Case No. Q-95-25159, seeking the demolition of the
structure allegedly illegally constructed by petitioners on her property. Respondent
asserted in her complaint that petitioners have an existing right of way to a public

274
highway other than the current one they are using, which she owns. She prayed for
the payment of damages.

In support of the complaint, respondent presented TCT No. RT-56958 (100547)


covering the property denominated as Lot 1-B in the name of Concepcion de la Pea,
mother of petitioner herein Alfredo de la Cruz. The aforesaid TCT reveals that a
portion of Lot 1-B, consisting of 85 square meters and denominated as Lot 1-B-2, is
being occupied by petitioners. To prove that petitioners have an existing right of
way to a public highway other than the pathway which respondent owns, the latter
adduced in evidence a copy of the plan of a subdivision survey for Concepcion de la
Pea and Felicidad Manalo prepared in 1965 and subdivision plan for Concepcion de
la Pea prepared in 1990. These documents establish an existing 1.50-meter wide
alley, identified as Lot 1-B-1, on the lot of Concepcion de la Pea, which serves as
passageway from the lot being occupied by petitioners (Lot 1-B-2), to Boni Serrano
Avenue.

On the other hand, petitioners, in their Answer, admitted having used a 1.10-meter
wide by 12.60-meter long strip of land on the northern side of respondents property
as their pathway to and from 18th Avenue, the nearest public highway from their
property, but claimed that such use was with the knowledge of respondent.

Petitioners alleged in their Answer that in 1976, respondent initiated the


construction on her property of a motor shop known as Phil. Orient Motors and
they, as well as the other occupants of the property at the back of respondents land,
opposed the construction of the perimeter wall as it would enclose and render their
property without any adequate ingress and egress. They asked respondent to give
them a 1.50-meter wide and 40.15-meter long easement on the eastern side of her
property, which would be reciprocated with an equivalent 1.50-meter wide
easement by the owner of another adjacent estate. Respondent did not want to give
them the easement on the eastern side of her property, towards Boni Serrano
Avenue but, instead, offered to them the said 1.10-meter wide passageway along the
northern side of her property towards 18th Avenue, which offer they had accepted.

Petitioners additionally averred in their Answer that they were made to sign a
document stating that they waived their right to ask for an easement along the
eastern side of respondents property towards Boni Serrano Avenue, which
document was among those submitted in the application for a building permit by a
certain Mang Puling, the person in charge of the construction of the motor shop.
That was why, according to petitioners, the perimeter wall on respondents property
was constructed at a distance of 1.10-meters offset and away from respondents

275
property line to provide a passageway for them to and from 18th Avenue. They
maintained in their Answer that respondent knew all along of the 1.10-meter
pathway and had, in fact, tolerated their use thereof.
On 31 July 1997, the RTC handed down a decision, giving probative weight to the
evidence adduced by respondent.

ISSUE. Whether or not the petitioners are entitled to a voluntary or legal easement
of right of way.

RULING. No. An easement or servitude is a real right, constituted on the corporeal


immovable property of another, by virtue of which the owner has to refrain from
doing, or must allow someone to do, something on his property, for the benefit of
another thing or persons. The statutory basis for this right is Article 613, in
connection with Article 619, of the Civil Code, which states that, Art. 613. An
easement or servitude is an encumbrance imposed upon an immovable for the
benefit of another immovable belonging to a different owner.

The immovable in favor of which the easement is established is called the dominant
estate; that which is subject thereto, the servient estate.

Art. 619. Easements are established either by law or by the will of the owners. The
former are called legal and the latter voluntary easements.

---oOo---

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CHAPTER XII
DONATION

(1) Republic v. Silim


G.R. No. 140487
2 April 2001

FACTS. Spouses Silim and Mangubat donated a 5,600 sq. m parcel of land in favor
of the Bureau of Public Schools, Malangas, Zamboanga del Sur. In the Deed of
Donation, respondents imposed the condition that the said property should "be
used exclusively and forever for school purposes only." This donation was accepted
by Gregorio Buendia, the District Supervisor of BPS, through an Affidavit of
Acceptance and/or Confirmation of Donation.

A school building was constructed on the donated land. However, the Bagong
Lipunan school building that was supposed to be allocated for the donated parcel of
land could not be released since the government required that it be built upon a one
(1) hectare parcel of land. To remedy this predicament Buendia was authorized to
officially transact for the exchange of the old school site to a new and suitable
location which would fit the specifications of the government. Pursuant to this,
Buendia and Teresita Palma entered into a Deed of Exchange whereby the donated
lot was exchanged with the bigger lot owned by the latter. The Bagong Lipunan
school buildings were constructed on the new school site and the school building
previously erected on the donated lot was dismantled and transferred to the new
location.

The Silim spouses learned of the Deed of Exchange when thay learned that Vice-
Mayor Wilfredo Palma was constructing a house on the donated property. They filed
a complaint to annul the donation claiming that there was no valid acceptance made
by the donee and that there was a violation of the condition in the donation.

ISSUES. (1) Was there a valid acceptance based on Arts. 745 and 749 of the NCC?
(2) Was the condition in the donation violated?

RULING. (1) Yes. There was a valid acceptance.

The last paragraph of Art. 749 reads: 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. The purpose of the formal requirement for

277
acceptance of a donation is to ensure that such acceptance is duly communicated to
the donor.

Here, a school building was immediately constructed after the donation was
executed. Respondents had knowledge of the existence of the school building. It was
when the school building was being dismantled and transferred to the new site and
when Vice-Mayor Wilfredo Palma was constructing a house on the donated property
that respondents came to know of the Deed of Exchange. The actual knowledge by
respondents of the construction and existence of the school building fulfilled the
legal requirement that the acceptance of the donation by the donee be
communicated to the donor.

Under Art. 745, the law requires the donee to accept the donation personally, or
through an authorized person with a special power for the purpose, or with a
general and sufficient power; otherwise the donation shall be void.

The respondents claim that the acceptance by Buendia of the donation was
ineffective because of the absence of a special power of attorney from the Republic
of the Philippines. The donation was made in favor of the Bureau of Public Schools.
Such being the case, Buendias acceptance was authorized under Section 47 of the
1987 Administrative Code which states:

SEC. 47. Contracts and Conveyances. - Contracts or conveyances may be


executed for and in behalf of the Government or of any of its branches,
subdivisions, agencies, or instrumentalities, whenever demanded by the
exigency or exigencies of the service and as long as the same are not
prohibited by law.

(2) No. The condition was not violated.

The exclusivity of the purpose of the donation was not altered or affected when
Buendia exchanged the lot for a much bigger one. It was in furtherance and
enhancement of the purpose of the donation. The acquisition of the bigger lot paved
the way for the release of funds for the construction of Bagong Lipunan school
building which could not be accommodated by the limited area of the donated lot.

(2) Gonzales v. Court of Appeals


G. R. No. 139136
16 January 2002

278
FACTS. On 18 April1972, petitioners Carolina Abad Gonzales, Dolores de Mesa
Abad and Cesar de Mesa Tioseco sought the settlement of the intestate estate of
their brother, Ricardo de Mesa Abad. In their petition, petitioners claimed that they
were the only heirs of their brother as he had allegedly died a bachelor, leaving no
descendants or ascendants, whether legitimate or illegitimate. Petitioners amended
their petition by alleging that the real properties listed as belonging to the decedent
were actually only administered by him and that the true owner was their late
mother, Lucila de Mesa.

The trial court appointed Cesar de Mesa Tioseco as administrator of the intestate
estate of Ricardo de Mesa Abad. Petitioners executed an extrajudicial settlement of
the estate of their late mother Lucila de Mesa in their favor.

On 7 July 1972, private respondents Honoria Empaynado, Cecilia Abad Empaynado,


and Marian Abad Empaynado filed a motion to set aside proceedings. In their
motion, they alleged that Honoria Empaynado had been the common-law wife of
Ricardo Abad for twenty-seven (27) years before his death, or from 1943 to 1971,
and that during this period, their union had produced two (2) children, Cecilia Abad
Empaynado and Marian Abad Empaynado. They also disclosed the existence of
Rosemarie Abad, a child allegedly fathered by Ricardo Abad with another woman,
Dolores Saracho. As the law awards the entire estate to the surviving children to the
exclusion of collateral relatives, they charged petitioners with eliberately concealing
the existence of said children in order to deprive the latter of their rights to the
estate of Ricardo Abad.

ISSUE. Whether or not the three children were entitled to inherit.

RULING. Yes. Evidence presented by private respondents overwhelmingly proved


that they are the acknowledged natural children of Ricardo Abad. They were able to
prove that he stated in his individual income tax returns as his legitimate dependent
children, Cecilia, Marian and Rosemarie Abad. He insured his daughters on a 20 year
endowment plan. He opened a trust fund account for his daughters.

Finding that private respondents are the illegitimate children of Ricardo Abad,
petitioners should have been precluded from inheriting the estate of their brother
on the basis of the following Civil Code provisions:

Art. 988. In the absence of legitimate descendants or ascendants, the


illegitimate children shall succeed to the entire estate of the deceased.

279
Art. 1003. If there are no illegitimate children, or a surviving spouse, the
collateral relatives shall succeed to the entire estate of the deceased in
accordance with the following articles.

Petitioners contested the filiation of the children by submitting that the husband of
Honoria Empaynado, Jose Libunao, was still alive when Cecilia and Marian Abad
were born. It was undisputed that prior to her relationship with Ricardo Abad,
Honoria Empaynado was married to Jose Libunao. But while private respondents
claim that Jose Libunao died in 1943, petitioners claim that the latter died sometime
in 1971.

The evidence presented by petitioners to prove that Jose Libunao died in 1971 was
inconclusive. The evidence presented was an enrolment form wherein there was
failure to indicate that Jose was deceased. Such proof did not necessarily prove
that said parent was still living during the time the form was being accomplished.
The records of Loyola Memorial Park also showed that a certain Jose Bautista
Libunao was indeed buried there in 1971. Such person was different from the
husband whose full name was Jose Santos Libunao.

(3) Austria-Magat v. Court of Appeals


G.R. No. 106755
1 February 2002

The donation is a donation mortis causa pursuant to Article 728 of the New Civil Code
inasmuch as the same expressly provides that it would take effect upon the death of
the donor; that the provision stating that the donor reserved the right to revoke the
donation is a feature of a donation mortis causa which must comply with the
formalities of a will; and that inasmuch as the donation did not follow the formalities
pertaining to wills, the same is void and produced no effect whatsoever.

FACTS. Basilisa Comerciante is a mother of five (5) children, namely, Rosario


Austria, Consolacion Austria, herein petitioner Apolinaria Austria-Magat, Leonardo,
and one of herein respondents, Florentino Lumubos. Leonardo died in a Japanese
concentration camp at Tarlac during World War II.

On December 17, 1975, Basilisa executed a document designated as Kasulatan sa


Kaloobpala (Donation). The said document which was notarized by Atty. Carlos
Viniegra, reads as follows:

280
"xxxNa ang Kaloob palang ito ay magkakabisa lamang simula sa araw na
akoy pumanaw sa mundo, at sa ilalim ng kondision na:

Magbubuhat o babawasin sa halaga ng nasabing lupa at bahay ang anumang


magugul o gastos sa aking libing at nicho at ang anumang matitira ay
hahatiin ng APAT na parte, parepareho isang parte sa bawat anak kong
nasasabi sa itaas nito upang maliwanang (sic) at walang makakalamang
sinoman sa kanila xxx"

On February 6, 1979, Basilisa executed a Deed of Absolute Sale of the subject house
and lot in favor of herein petitioner Apolinaria Austria-Magat for Five Thousand
Pesos (P5,000.00). As the result of the registration of that sale, Transfer Certificate
of Title (TCT for brevity) No. RT-4036 in the name of the donor was cancelled and in
lieu thereof TCT No. T-10434 was issued by the Register of Deeds of Cavite City in
favor of petitioner Apolinaria Austria-Magat on February 8, 1979.

On September 21, 1983, herein respondents Teodora Carampot, Domingo Comia,


and Ernesto Apolo (representing their deceased mother Consolacion Austria),
Ricardo, Mamerto and Segunda, all surnamed Sumpelo (representing their deceased
mother Rosario Austria) and Florentino Lumubos filed before the Regional Trial
Court of Cavite an action, docketed as Civil Case No. 4426 against the petitioner for
annulment of TCT No. T-10434 and other relevant documents, and for reconveyance
and damages.

ISSUE. Does the donor validly revoked the donation when one of her daughters
and donees, Consolacion Austria, violated the prohibition to encumber the
property.

RULING. No. The act of selling the subject property to the petitioner herein cannot
be considered as a valid act of revocation of the deed of donation for the reason that
a formal case to revoke the donation must be filed pursuant to Article 764 of the
Civil Code which speaks of an action that has a prescriptive period of four (4) years
from non-compliance with the condition stated in the deed of donation. The rule
that there can be automatic revocation without benefit of a court action does not
apply to the case at bar for the reason that the subject deed of donation is devoid of
any provision providing for automatic revocation in event of non-compliance with
the any of the conditions set forth therein. Thus, a court action is necessary to be
filed within four (4) years from the non-compliance of the condition violated. As
regards the ground of estoppel, the donor, Basilisa, cannot invoke the violation of
the provision on the prohibition to encumber the subject property as a basis to

281
revoke the donation thereof inasmuch as she acknowledged the validity of the
mortgage executed by the donee, Consolacion Austria, when the said donor asked
respondent Domingo Comia to redeem the same. Thereafter, the donor, Basilisa
likewise asked respondent Florentino Lumubos and the petitioner herein to redeem
the same. Those acts implied that the donees have the right of control and naked
title of ownership over the property considering that the donor, Basilisa condoned
and acknowledged the validity of the mortgage executed by one of the donees,
Consolacion Austria.

The petitioner asserts that the action, against the petitioner, for annulment of TCT
No. T-10434 and other relevant documents, for reconveyance and damages, filed by
the respondents on September 21, 1983 on the ground of fraud and/or implied trust
has already prescribed. The sale happened on February 6, 1979 and its registration
was made on February 8, 1979 when TCT No. RT-4036 in the name of the donor was
cancelled and in lieu thereof TCT No. T-10434 in the name of the petitioner was
issued. Thus, more than four (4) years have passed since the sale of the subject real
estate property was registered and the said new title thereto was issued to the
petitioner. The petitioner contends that an action for reconveyance of property on
the ground of alleged fraud must be filed within four (4) years from the discovery of
fraud which is from the date of registration of the deed of sale on February 8, 1979;
and that the same prescriptive period also applies to a suit predicated on a trust
relationship that is rooted on fraud of breach of trust.

When ones property is registered in anothers name without the formers consent, an
implied trust is created by law in favor of the true owner. Article 1144 of the New
Civil Code provides:

Art. 1144. The following actions must be brought within ten years from the
time the right of action accrues: (1) Upon a written contract; (2) Upon an
obligation created by law;(3) Upon a judgment.

Thus, an action for reconveyance of the title to the rightful owner prescribes in ten
(10) years from the issuance of the title. It is only when fraud has been committed
that the action will be barred after four (4) years.

However, the four-year prescriptive period is not applicable to the case at bar for
the reason that there is no fraud in this case. The findings of fact of the appellate
court which are entitled to great respect, are devoid of any finding of fraud. The
records do not show that the donor, Basilisa, and the petitioner ever intended to
defraud the respondents herein with respect to the sale and ownership of the said

282
property. On the other hand, the sale was grounded upon their honest but
erroneous interpretation of the deed of donation that it is mortis causa, not inter
vivos; and that the donor still had the rights to sell or dispose of the donated
property and to revoke the donation.

There being no fraud in the trust relationship between the donor and the donees
including the herein petitioner, the action for reconveyance prescribes in ten (10)
years. Considering that TCT No. T-10434 in the name of the petitioner and covering
the subject property was issued only on February 8, 1979, the filing of the complaint
in the case at bar in 1983 was well within the ten-year prescriptive period.

(4) Heirs of Florencio v. Heirs of De Leon


12 March 2004

FACTS. Teresa Sevilla de Leon, owned a residential lot with an area of 828 square
meters located in San Miguel, Bulacan. In the 1960s, De Leon allowed the spouses
Rosendo and Consuelo Florencio to construct a house on the said property and stay
therein without any rentals therefor. On September 26, 1966, De Leon, with the
consent of her husband Luis, leased the aforesaid parcel of land for P5 per month to
Bienvenido Santos for as long as the lessor had an outstanding loan with the Second
Quezon City Development Bank of Quezon City but not to exceed the period of
fifteen years. Thereafter, Bienvenido Santos constructed a house thereon. In
November 1978, De Leon, then already a widow, died intestate. In deference to her
wishes, her heirs allowed Rosendo Florencio to continue staying in the property. In
March 1995, Florencio died intestate, but his heirs, the respondents, remained in the
property. On April 26, 1995, the heirs of De Leon, through counsel, sent a letter to
the heirs of Florencio, demanding that they vacate the property within ninety days
from receipt thereof. The latter refused and failed to vacate the property. The heirs
of De Leon, through Valeriana L. Morente, thereafter filed a complaint for ejectment
against the heirs of Florencio before the Municipal Trial Court of San Miguel,
Bulacan. Therein, the plaintiffs alleged that they were the pro-indiviso owners of the
828 square-meter lot covered by TCT No. T-44349, which they inherited from their
mother. During her lifetime, their mother allowed Florencio and his family to occupy
the property without any compensation, subject to the condition that they shall
vacate the same upon demand; such arrangement went on even after their mothers
demise. They further averred that sometime in 1995, they demanded that the heirs
of Florencio vacate the property, but that the latter refused to do so. MTC finds the
defendants as having a better right of possession over the subject parcel of land as
against the plaintiffs. The RTC ruled that the deed of donation was insufficient to

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support the claim of the heirs of Florencio that they were the owners of the property
and were, thus, entitled to its possession. The CA adopted the findings of the RTC
and its disquisitions on why the deed of donation was not a credible piece of
evidence to support the petitioners claim over the property; hence, did not transfer
title over the property in favor of the petitioners.The CA adopted the findings of the
RTC and its disquisitions on why the deed of donation was not a credible piece of
evidence to support the petitioners claim over the property; hence, did not transfer
title over the property in favor of the petitioners.

ISSUE. W/N the petitioners, as heirs of Rosendo Florencio, who appears to be the
donee under the unregistered Deed of Donation, have a better right to the physical
or material possession of the property over the respondents, the heirs of Teresa de
Leon, the registered owner of the property.

RULING. No, Under the New Civil Code, donation is one of the modes of acquiring
ownership. Among the attributes of ownership is the right to possess the property.

The essential elements of donation are as follows: (a) the essential reduction of the
patrimony of the donor; (b) the increase in the patrimony of the donee; and (c) the
intent to do an act of liberality or animus donandi. When applied to a donation of an
immovable property, the law further requires that the donation be made in a public
document and that the acceptance thereof be made in the same deed or in a
separate public instrument; in cases where the acceptance is made in a separate
instrument, it is mandated that the donor be notified thereof in an authentic form, to
be noted in both instruments.

In this case, the deed of donation, on its face, appears to bear all the essential
requisites of a valid donation inter vivos. With Teresa de Leon as the donor and
Rosendo Florencio as the donee, the deed of donation appears to have been
notarized by Notary Public Tirso Manguiat. On this premise, Florencio, and after his
death, his heirs, acquired ownership over the property although Certificate of Title
No. T-44349 under the name of Teresa de Leon had not yet been cancelled.
However, as pointed out by the RTC and the Court of Appeals, there are cogent facts
and circumstances of substance which engender veritable doubts as to whether the
petitioners have a better right of possession over the property other than the
respondents, the lawful heirs of the deceased registered owner of the property,
Teresa de Leon, based on the Deed of Donation.

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(5) Abello v. Collector of Internal Revenue
G.R. No. 120721
23 February 2005

FACTS. During the 1987 national elections, petitioners, who are partners in the
Angara, Abello, Concepcion, Regala and Cruz (ACCRA) law firm, contributed
P882,661.31 each to the campaign funds of Senator Edgardo Angara, then running
for the Senate. In letters dated April 21, 1988, the Bureau of Internal Revenue (BIR)
assessed each of the petitioners P263,032.66 for their contributions. On August 2,
1988, petitioners questioned the assessment through a letter to the BIR. They
claimed that political or electoral contributions are not considered gifts under the
National Internal Revenue Code (NIRC), and that, therefore, they are not liable for
donors tax. The claim for exemption was denied by the Commissioner.

On September 12, 1988, petitioners filed a petition for review with the CTA, which
was decided on October 7, 1991 in favor of the petitioners. As aforestated, the CTA
ordered the Commissioner to desist from collecting donors taxes from the
petitioners.

On appeal, the Court of Appeals reversed and set aside the CTA decision on April 20,
1994. The appellate Court ordered the petitioners to pay donors tax amounting to
P263,032.66 each, reasoning as follows:

The National Internal Revenue Code, as amended, provides:

Sec. 91. Imposition of Tax. (a) There shall be levied, assessed, collected, and
paid upon the transfer by any person, resident, or non-resident, of the
property by gift, a tax, computed as provided in Section 92. (b) The tax shall
apply whether the transfer is in trust or otherwise, whether the gift is direct
or indirect, and whether the property is real or personal, tangible or
intangible.

Pursuant to the above-quoted provisions of law, the transfer of property by gift,


whether the transfer is in trust or otherwise, whether the gift is direct or indirect,
and whether the property is real or personal, tangible or intangible, is subject to
donors or gift tax.

A gift is generally defined as a voluntary transfer of property by one to another


without any consideration or compensation therefor (28 C.J. 620; Santos vs.
Robledo, 28 Phil. 250).

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In the instant case, the contributions are voluntary transfers of property in the form
of money from private respondents to Sen. Angara, without considerations therefor.
Hence, they squarely fall under the definition of donation or gift.

As correctly pointed out by the Solicitor General, the fact that the contributions
were given to be used as campaign funds of Sen. Angara does not affect the
character of the fund transfers as donation or gift. There was thereby no retention of
control over the disposition of the contributions. There was simply an indication of
the purpose for which they were to be used. For as long as the contributions were
used for the purpose for which they were intended, Sen. Angara had complete and
absolute power to dispose of the contributions. He was fully entitled to the
economic benefits of the contributions. Section 91 of the Tax Code is very clear. A
donors or gift tax is imposed on the transfer of property by gift.

ISSUE. Is the political contribution considered as a gift, hence subject to donors


tax?

RULING. Yes. Since animus donandi or the intention to do an act of liberality is an


essential element of a donation, petitioners argue that it is important to look into the
intention of the giver to determine if a political contribution is a gift. Petitioners
argument is not tenable. First of all, donative intent is a creature of the mind. It
cannot be perceived except by the material and tangible acts which manifest its
presence. This being the case, donative intent is presumed present when one gives a
part of ones patrimony to another without consideration. Second, donative intent is
not negated when the person donating has other intentions, motives or purposes
which do not contradict donative intent. This Court is not convinced that since the
purpose of the contribution was to help elect a candidate, there was no donative
intent. Petitioners contribution of money without any material consideration
evinces animus donandi. The fact that their purpose for donating was to aid in the
election of the donee does not negate the presence of donative intent.

Since the purpose of an electoral contribution is to influence the results of the


election, petitioners again claim that donative intent is not present. Petitioners
attempt to place the barrier of mutual exclusivity between donative intent and the
purpose of political contributions. This Court reiterates that donative intent is not
negated by the presence of other intentions, motives or purposes which do not
contradict donative intent.

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In fine, the purpose for which the sums of money were given, which was to fund the
campaign of Senator Angara in his bid for a senatorial seat, cannot be considered as
a material consideration so as to negate a donation.

---oOo---

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