Prop PPP

FIRST DIVISION
[G.R. No. 120961. October 2, 1997]

DISTILLERIA WASHINGTON, INC. or WASHINGTON DISTILLERY, INC., petitioner vs LA
TONDEA DISTILLERS, INC. and THE HONORABLE COURT OF APPEALS, respondents.
RESOLUTION
KAPUNAN, J.:
On October 17, 1996, this court rendered a decision in the above-entitled case, the dispositive portion
of which reads, as follows:
WHEREFORE, the decision of the appellate court is MODIFIED by ordering LTDI to pay petitioner
just compensation for the seized bottles. Instead, however, of remanding the case to the Court of
Appeals to receive evidence on, and thereafter resolve, the assessment thereof, this Court accepts and
accordingly adopts the quantification of P18,157.00 made the the trial court. No costs.
With the deanial of the Motion for Reconsideration ,petitioner sought a second reconsideration with
leave of court of our decision raising new issues, to wit:
1.01.d. The Supreme Court, in its Decision of October 17, 1996, modified the decision of the Court of
Appeals. It held that ownership of the bottles has passed to the consumer, ultimately, to Washington
Distillery, Inc., thereby upholding the finding of the Regional Trial Court and reversing the ruling or
the Court of Appeals; nonetheless, while ruling that the ownership over the bottles had passed to
Washington Distillery, Inc.,it held that Washington Distillery, Inc. may not use the bottles because of
the trademark protection to the registrant (La Tondea Distillers, Inc.). Instead of directing the return to
the bottles to Washington Distillery, Inc., the Court ordered La Tondea Distillers, Inc. to pay
Washington Distillery, Inc. the amount of P18,157.00.
2.00. The decision of the Supreme Court itself therefore raises new issues. As owner of the bottles,
should not Washington Distillery, Inc. be given possession of the bottles? Would its use of the bottles
violate the trademark protection of the registrant, La Tondea Distillers, Inc. afforded by R.A. 623, as
amended?
3.00. The Motion for Reconsideration of the petitioner Washington Distillery, Inc. is addressed to these
new issues. They had not been previously addressed by the parties. They could not have been
previously passed upon. It could hardly be said that no substantial argument, not previously raised, is
made in the Motion for Reconsideration to warrant a modification of the Courts decision.
On May 21, 1997, the Court resolved to set for hearing the motion for reconsideration on May 28, 1997
for its judicious disposition. Thereafter, the parties as required by the Court filed their simultaneous
memoranda to expound and lay particular emphasis on the provision of Section 5 of R.A. 623 which
proscribes the filing of an action against any person to whom registered manufacturer, bottler or seller
has transferred by way of sale, any to the containers. The parties complied.
A reexamination of the arguments raised by petitioner in its Second Motion for Reconsideration filed
on February 13, 1997, in the hearing on May 28, 1997 and in the subsequent memorandum filed
thereafter, convinces us the merits of its position.
To recall, La Tondea Distillers, Inc. (La Tondea, for short) filed before the Regional Trial Court for the
recovery, under its claim of ownership, of possession or replevin against Distilleria Washington, Inc. or
Washington Distillery, Inc. (Distilleria Washington) of 18,157 empty 350 c.c. white flint bottles bearing
the blown-in marks of La Tondea Inc. and Ginebra San Miguel, averring that Distilleria Washington
was using the bottles for its own Gin Seven products without the consent of Distilleria Washington in
violation of Republic Act 623.
The trial court in its decision dismissed the complaint, upholding Distilleria Washingtons contention
that a purchaser of liquor pays only a single price for the liquor and the bottle and is not required to
return the bottle at any time.
The Court of Appeals reversed the trial courts decision, ruling that under Republic Act 623, the use of
marked bottles by any person other than the manufacturer, bottler or seller, without the latters written
consent, is unlawful. It emphasized that the marks of La Tondea s ownership stamped or blown-in to
the bottles are sufficient notice to the public that the bottles are La Tondeas property; hence, Distilleria
Washington cannot be considered a purchaser on good faith.
While our decision of October 17, 1996 affirmed with modification the Court of Appeals decision, we
at least implicitly acknowledge that there was a valid transfer of the bottles to Distilleria Washington,
except that its possession of the bottles without the written consent of La Tondea gives rise to a prima
facie presumption of illegal use under R.A. 623.
In seeking reconsideration of the decision of this Court, petitioner advances, among others, the
following arguments:
(1) If, as the Court found in its decision of October 17, 1996, Distilleria Washington had acquired
ownership of the bottles, La Tondeas suit for replevin, where the sole issue is possession, should be
denied.
(2) Since the right of ownership over the bottles gives rise, accordiing to the Courts own language, to
its own elements of jus posidendi, jus utendi, jus fruendi, jus disponendi, and jus abutendi, along with
the applicable jus lex, to allow La Tondea to keep the bottles is to deny Distilleria Washington, the very
attributes or elements of its ownership.
(3) There is no showing--and it cannot be assumed--that if Distilleria Washington would have
possession of the bottles, it will exercise the other attributes of ownership, along with the applicable jus
lex, over the marks of ownership stamped or marked on the bottles.
(4) The provision in Sec. 3 of Republic Act 623 to the effect that the use by any person other than the
registered manufacturer, bottler or seller without the written permission of the latter of any such bottle,
etc. shall give rise to a prima facie presumption that such use or possession is unlawful, does not arise
in the instant case because the Court has itself found Section 5 of the same law applicable.
Additionally, petitioner argues with persuasion the following points in its memorandum:
(5) It is absurd to hold the buyer such as Distilleria Washington, liable for the possession and use of its
own bottles without the written consent of La Tondea who is no longer the owner thereof and for which
it has received payment in full.
(6) To hold the buyer liable under Sections 2 and 3 would grant La Tondea the extraordinary right not
only of possession and use of the bottles which it has sold and no longer owns, but also to sell said
bottles ad infinitum, thus enriching itself unjustly.
(7) It is manifestly unjust and unconscionable that millions of buyers of Ginebra San Miguel, who pay
not only for gin but also for the bottles containing it should run the risk of criminal prosecution by the
mere fact of possession of the empty bottles after consuming the liquor.
Distilleria Washingtons motion raises the novel issue that if, as we ruled in our decision of October 17,
1996, petitioner became the owner over the bottles seized from it by replevin, then it has the right to
their possession and use as attributes of ownership, unless their use violates the trademark or
incorporeal rights accorded private respondent by R.A 623 which has not really been established in this
case.
As pointed out in our decision,
Parenthetically, petitioner is not here being charged with violation of Sec. 2 of R.A. 623 or the
Trademark Law. The instant case is one for replevin (manual delivery) where the claimant must be able
to show convincingly that he is either the owner or clearly entitled to the possession of the object
sought to be recovered. Replevin is a possessory action. The gist of which focuses on the right of
possession that in turn, is dependent on a legal basis that, not infrequently, looks to the ownership of
the object sought to be replevied.
Since replevin as a possessory action is dependent upon ownership, it is relevant to ask: Did La Tondea
Distillers, Inc. transfer ownership of its marked bottles or containers when it sold its products in the
market? Were the marked bottles or containers part of the products sold to the public?
In our decision sought to be reconsidered, we categorically answered the question in the affirmative in
this wise:
R.A. No. 623 does not disallow the sale or transfer of ownership of the marked bottles or containers. In
fact, the contrary is implicit in the law thus:
SEC. 5. x x x.
SEC. 6. x x x
Scarcely disputed are certain and specific industry practices in the sale of gin. The manufacturer sells
the product in marked containers, through dealers, to the public in supermarkets, grocery shops, retail
stores and other sales outlets. The buyer takes the item; he is neither required to return the bottle nor
required to make a deposit to assure its return to the seller. He could return the bottle and get a refund.
A number of bottles at times find their way to commercial users. It cannot be gainsaid that ownership
of the containers does pass on the consumer albeit subject to the statutory limitations on the use of the
registered containers and to the trademark rights of the registrant. The statement in Section 5 of R.A.
623 to the effect that the sale of beverage contained the said containers shall not include the sale of the
containers unless specifically so provided is not a rule of proscription. It is a rule of construction that,
in keeping with the spirit and intent of the law, establishes at best a presumption (of non-conveyance of
the container) and which by no means can be taken to be either interdictive or conclusive in character.
Upon the other hand, LTDIs sales invoice, stipulating that the sale does not include the bottles with the
blown-in marks of ownership of La Tondea Distillers, cannot affect those who are not privies thereto.
In plain terms, therefore, La Tondea not only sold its gin products but also the marked bottles or
containers, as well. And when these products were transferred by way of sale, then ownership over the
bottles and all its attributes (jus utendi, jus abutendi, just fruendi, jus disponendi) passed to the buyer. It
necessarily follows that the transferee has the right to possession of the bottles unless he uses them in
violation of the original owners registered or incorporeal rights.
After practically saying that La Tondea has surrendered ownership and consequently, possession of the
marked bottles or container, it is incongrous and, certainly, it does not seem fair and just to still allow
La Tondea, citing the prima facie presumption of illegal use under Sec. 3 of R.A. 623., to retain
possession of the seized bottles by simply requiring payment of just compensation to petitioner.
The pertinent provisions of R.A. 623 are as follows:
SEC. 2. It shall be unlawful for any person, without the written consent of the manufacturer, bottler, or
seller (underscoring supplied) who has successfully registered the marks of ownership in accordance
with the provisions of the next preceding section, to fill such bottles, boxes, kegs, barrels, steel
cylinders, tanks, flasks, accumulators, or other similar containers so marked or stamped, for the
purpose of sale, or to sell, dispose of, buy or traffic in, or wantonly destroy the same, whether filled or
not to use the same for drinking vessels or glasses or drain pipes, foundation pipers, for any other
purpose than that registered by the manufacturer, bottler or seller. Any violation of this section shall be
punished by a fine of not more than one thousand pesos or imprisonment of not more than one year or
both.
SEC. 3. The use by any person other than the registered manufacturer, bottler or seller, without written
permission of the latter (underscoring supplied) of any such bottle, cask, barrel, keg, box, steel
cylinders, tanks, flask, accumulators, or other similar containers, or the possession thereof without
written permission of the manufacturer, by any junk dealer or dealer in casks, barrels, keg, boxes, steel
cylinders, tanks, flask, accumulators or other similar containers, the same being duly marked or
stamped and registered as herein provided, shall give rise to a prima facie presumption that such use or
possession is unlawful.
xxx
SEC. 5. No action shall be brought under this Act (underscoring supplied) against any person to whom
the registered manufacturer, bottler or seller, has transferred by way of sale, (underscoring supplied)
any of the containers herein referred to, but the sale of the beverage contained in the said containers
shall not include the sale of the containers unless specifically so provided.
In resolving that petitioner is the owner of the bottles, this Court applied Section 5 of R.A. 623; and in
withholding possession of the bottles from the petitioner and in concluding that use or possession
thereof without the written permission of the registered owner would constitute prima facie
presumption of illegal use, this Court invoked Sections 2 and 3 of the same law.
A careful reading of Sections 2, 3 and 5 of R.A. 623 would lead to the conclusion that they contemplate
situations separate and distinct from each other. Section 2 prohibits any person from using, selling or
otherwise disposing of registered containers without the written consent of the registrant. Such rights
belong exclusively to the registrant. Under Section 3, mere possession of such registered containers
without the written consent of the registrant is prima facie presumed unlawful.
It appears - and this is the critical point - that Sections 2 and 3 apply only when the filling up of the
bottle or the use of the bottle is without the written permission of the registered manufacturer, bottler,
or seller, who has registered the marks of ownership of the bottles. It is thus implicit that Sections 2 and
3 apply only when the registered manufacturer, bottler, or seller retain ownership of the bottles.
Upon the other hand, when the bottles have been transferred by way of sale, Section 5 applies, thereby
precluding the institution of any action under this Act, meaning to say, including any action under
Sections 2 and 3.
The general rule on ownership, therefore, must apply and petitioner be allowed to enjoy all the rights of
an owner in regard the bottles in question, to wit: the jus utendi or the right to receive from the thing
what it produces; the jus abutendi or the right to consume the thing by its use; the jus disponendi or the
power of the owner to alienate, encumber, transform and even destroy the thing owned; and the jus
vindicandi or the right to exclude from the possession of the thing owned any other person to whom the
owner has not transmitted such thing. What is proscribed is the use of the bottles in infringement of
anothers trademark or incorporeal rights.
Since the Court has found that the bottles have been transferred by way of sale then, La Tondea has
relinquished all its proprietary rights over the bottles in favor of Distilleria Washington who has
obtained them in due course. Now as owner, it can exercise all attributes of ownership over the bottles.
This is the import of the decision that La Tondea had transferred ownership over its marked bottles or
containers when it sold its gin products to the public. While others may argue that Section 5 is
applicable only to the immediate transferee of the marked bottles or container, this matter is best
discussed where the applicability of Sec. 5, R.A. 623 is squarely raised. It must be recalled, however,
that this is a case of replevin, not a violation of the "trademark protection of the registrant" under R.A.
623 or of the Trademark Law.
A query may be posed: Would use of the bottles constitute a violation of the incorporeal rights of La
Tondea Distillers, Inc. over its marks of ownership embossed on the bottles? While apparently relevant,
it would be improper and premature for this Court to rule on the point because:
First, because violation of the marks of ownership of La Tondea Distillers, Inc, on the bottles has not
been put in issue, the parties did not have the opportunity to ventilate their respective positions on the
matter. Thus, a ruling would be violative of due process.
Second, the question calls for a factual investigation which this Court has generally not taken upon
itself to undertake because it is not a trier of facts; and
Third, disregarding the above, the facts before this Court do not provide a sufficient basis for a fair and
intelligent resolution of the question.
Moreover, our decision added that the Court sees no other insistence to keep the bottles, except for such
continued use. This, to our mind, is rather speculative at this point; something which was never touched
upon in the proceedings below.
We cannot also be oblivious of the fact that if La Tondeas thesis that every possession of the bottles
without the requisite written consent is illegal, thousands upon thousands of buyers of Ginebra San
Miguel would be exposed to criminal prosecution by the mere fact of possession of the empty bottles
after consuming the content.
One last point. It may not be amiss to state that La Tondea is a big and established distillery which
already has captured a big share of the gin market, estimated to be 90%. Distilleria Washington, on the
other hand, together with other small distillers - around 40 in number; admittedly concedes that it
cannot fight this giant but only asks a share of the market. It cannot afford to manufacture its own
bottles and just have to rely on recycled bottles to sell its products. To disallow the use of these
recycled products would necessarily deprive it a share of the market which La Tondea seeks to
monopolize.
We recognize the role of large industry in the growth of our nascent economy. However, small
industries likewise play a vital role in economic growth, playing a significant part in the success of
such tiger economies as Korea, Taiwan and Thailand. Industries, big and small, should adopt symbiotic
relationship, not the animosity of Goliath and David. Our holding today merely recognizes that in the
countrys march toward economic development and independence, it is essential that a balance
protecting small industries and large scale businesses be maintained.
IN VIEW OF THE FOREGOING, the Court RESOLVED to RECONSIDER its Decision
promulgated on October 17, 1996 and render another judgment REVERSING in toto the Decision of
the Court of Appeals promulgated on January 11, 1995 and its Resolution of June 23, 1995. The
decision of the Regional Trial Court of December 3, 1991 is REINSTATED.
SO ORDERED.
Republic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-23685 April 25, 1968
CIRILA EMILIA, plaintiff-appellant,
vs.
EPIFANIO BADO (Alias Paño), ET AL., defendants-appellees.
Manuel Deaño for plaintiff-appellant.
Irene D. Jurado for defendants-appellees.
SANCHEZ, J.:
The relief prayed for but denied in an order of the court below, now the subject of the present appeal, is
that injunction issue to restrain defendants from continuing with the construction of a house of light
materials on a 48-square meter area on the northern border of plaintiff's land.
The suit started on December 12, 1963 with the complaint, as amended, 1 that on or about December 1,
1962, defendants, confederating and helping one another, entered plaintiff's land and commenced the
construction of a house of light materials on the northern boundary of her Lot 1131 in Iligan City
bordering the bank of Salabao Creek, covered by her Torrens Title 0-267; that the continuance of such
act against the will of plaintiff would cause great and irreparable damage and injury and injustice to
her; and that there is no other plan, speedy and adequate remedy in the ordinary course of law.
Whereupon, she prayed for preliminary and final injunction and damages. Preliminary injunction was
issued ex-parte.
Plaintiff's said complaint was met by defendants' motion to dismiss upon the ground of lack of cause of
action. They attached to their motion the sketch of a private land surveyor, Flordelito Aragon, and his
affidavit, both of which were intended to convey the alleged fact that the new house being constructed
was inside defendant Glicerio Bado's Lot 2894 (covered by his Torrens Title 0-275) being held by him.
They averred, too, that the house did not encroach upon the boundaries of plaintiff's adjoining property
(Lot 1131).
Obviously of the belief that procedural niceties should not bar consideration of the equities of the case, 2
the trial court, on the face of the conflicting assertions of fact, called for a summary hearing.
On February 27, 1964, the trial court came out with an order sustaining the motion to dismiss. The
court gave credence to the testimony of surveyor Flordelito Aragon (also a deputy public land
surveyor) that the house under construction was within Glicerio Bado's Lot 2894 (Torrens Title 0-275)
and not on plaintiff's Lot 1131 (Torrens Title 0-267). The trial court took the position that to stop
defendants from building a house within Glicerio Bado's lot "would be tantamount to depriving the
enjoyment of his lawful dominical rights; that even on the assumption that defendant Glicerio Bado's
title to Lot 2894 was obtained through fraud, as plaintiff avers, nonetheless, said title subsists until
declared null and void by a competent court; and that these circumstances would tie up the hands of the
court from granting the relief prayed for. Whereupon, the court dissolved the preliminary injunction
theretofore issued, and dismissed the complaint.
1. The procedural question presented asks of us a ruling as to whether injunction is the proper remedy
in the premises.
Whether defendant Glicerio Bado's lot is registrable or not, because, as plaintiff avers, that land
registered in the name of defendant Glicerio Bado is a creek — Salabao Creek — is beside the point
here. Unless and until plaintiff succeeds in annulling the decree of registration in defendant's favor
which she has sought in the cadastral proceedings, that title subsists. 3 It is to be presumed that the
judicial proceedings leading to the issuance of the decree are valid.
The pivotal facts that the record discloses may thus be summarized this way: Plaintiff claims that the
house being built is on her land; defendants, on the other hand, say that house is on the land of Glicerio
Bado. Both hold Torrens titles. The lower court, prima facie at least, believes that there is factual
support for defendants' averment.
The remedy of injunction has been the subject of numerous judicial pronouncements. The court cannot
now afford to depart from the well-ingrained precept that injunctions are not available to take property
out of possession or control of one party and place it into that of another whose title has not clearly
been established. Instructive in this respect is the early 1909 decision in Devesa vs. Arbes, 13 Phil. 273,
where injunction was sought to recover possession of real property. Mr. Justice Carson there pithily
summed up4 the limited concept of injunction which may not be availed of "'while the rights between
the parties are undetermined, except in extraordinary cases where material and irreparable injury will
be done', which cannot be compensated in damages." To hold otherwise, Mr. Justice Carson continued
to say, "would be to render practically of no effect the various provisions of the code (of civil
procedure) touching many if not most of the ordinary actions, and the enforcement of judgment in such
actions; for it may well be supposed that if a complainant could secure relief by injunction in every
case where 'the defendant is doing or threatens or is about to do, or is procuring or suffering to be done,
some act probably in violation of the plaintiff's rights' and could enforce the judgment granting the
injunction by the summary contempt proceedings authorized in section 172 of the code to punish
violations of injunctions, he would seldom elect to enforce his rights in such cases by the ordinary
remedies, involving as they do the difficult and oft-times fruitless labor of enforcing judgments
obtained therein by execution."5
Long divorced from doubt is the doctrine that where legal title is disputed and the possessor asserts
ownership over the land in controversy, no injunction can issue to dispossess him. 6 Reason for this is
that before the issue of ownership is determined by evidence, justice and equity demand that the parties
be maintained in their status quo so that no advantage may be given to one to the prejudice of the
other.7
Given the fact that there is the debatable question of where the house was being erected, we say that
adherence to the precept just enunciated is a forbidding obstacle to the grant of injunction.
2. To be sure, there are recognized exceptions to the rule, as where defendant is clearly a mere
intruder,8 or where the action seeks to prevent a purchaser at an auction sale from molesting the
debtor's co-owners whose rights have not been affected by the sale. 9 But these, generally upon hearing
and not upon ex parte application for injunction.10
3. Upon well-entrenched jurisprudence, plaintiff's principal suit for injunction cannot, at bottom,
prosper because there is an adequate remedy in law open to her. It is elementary to the point of triteness
that the special remedy of injunction may not issue where there is a plain, speedy and adequate remedy
in the ordinary course of law.
It is in line with the principle just enunciated that in affirming Devesa vs. Arbes, supra, Palafox vs.
Madamba, 19 Phil. 444, 446, declared in no uncertain terms that injunction is not the appropriate
remedy where "there exists the ordinary remedy of action for property of possession, which may be
either plenary or summary, according to the method by which she may have been deprived of her
alleged possession." A long line of cases has since then stabilized the principle.11
Under the present state of the law, there are three kinds of actions available to recover possession of
real property: (a) the summary action for forcible entry (where preliminary mandatory injunction may
be sought within ten days from the filing of the complaint under Article 539 of the Civil Code) or
illegal detainer, which seeks the recovery of physical possession only and is brought within one year in
the municipal court; (b) the accion publiciana, which is for the recovery of the right to possess and is a
plenary action in an ordinary civil proceeding in a Court of First Instance; and (c) acción de
reivindicación, which seeks the recovery of ownership, which includes the jus utendi and the jus
fruendi, also brought in the Court of First Instance.12
Plaintiff Cirila Emilia claims ownership of a 48-square meter portion of land, which she avers is
covered by Torrens title in her name. Defendant Glicerio Bado, on the other hand, also professes
ownership over the same portion of land backed up, too, by a Torrens title in his name. From these two
directly opposing positions, a legitimate issue of ownership emerges. This guides us to no other
conclusion than that plaintiff Cirila Emilia should have brought suit for ownership (acción de
reivindicación). Correctly did the trial judge dissolve the preliminary injunction wrongfully issued and
refuse the grant of a perpetual injunction sought by her.
4. In a situation like the present, it was suggested in Devesa vs. Arbes, supra, that it would not be
improper if the record were to be returned to the court of origin with instructions to further amend the
complaint,13 such that the question of ownership and possession (accion reivindicatoria) may bring
about a head-on contest between plaintiff and Glicerio Bado in the same injunction case. As we make
an appraisal of the record before us, however, we are constrained to say that confusion may arise
because of the so many pleadings filed and court actuations taken before this decision. With the
voluminous record, difficulty may arise in pinpointing the exact issue between the parties.
Administration of justice could suffer thereby. And then, there is the continued pendency of this case
which has been started since early five years ago. A final decision on the validity of Glicerio Bado's
title in the cadastral proceeding could yet prevent further controversy between the parties.
Upon the view we take of this case, we vote to affirm the order of February 27, 1964, dismissing the
complaint.1äwphï1.ñët
With costs against plaintiff-appellant. So ordered.
Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar, Castro, Angeles and Fernando, JJ., concur.
Concepcion, C.J., is on leave.
FIRST DIVISION
[G.R. No. 121939. October 4, 1999]
SPOUSES ROMAN & AMELITA T. CRUZ and SPOUSES SEVERINO & PRIMITIVA T.
BAUTISTA, petitioners, vs. SPOUSES ALFREDO & MELBA TORRES and THE HONORABLE
COURT OF APPEALS, respondents.
DECISION
PARDO, J.:
The case before the Court is an appeal via certiorari from the decision of the Court of Appeals[1]
affirming that of the Regional Trial Court, Pasig City, Branch 162[2] ordering petitioners to surrender
to respondents the lot described in TCT No. 42806 and remove petitioners house and other
improvements thereon, and to pay respondents P5,000.00 as reasonable attorneys fees.
The facts as found by the Court of Appeals and which bind the parties in this appeal are the following:
x x x plaintiff Alfredo Torres is the elder brother of defendants Amelia Torres Cruz and Primitiva Torres
Bautista. Their parents are the late Simplicio and Gregoria Castaeda Torres. In 1946, while in his
youthful years, Alfredo worked as a mechanic for a US Army ambulance unit stationed at Manila. From
his earnings, he purchased by installments from Ortigas Madrigal Co., Inc. a parcel of land in Barangay
Saniga, Mandaluyong, Rizal (now Mandaluyong City), with an area of 299 square meters. When his
American employer left, he was employed as a municipal electrician in Mandaluyong. In 1956, he was
issued the land title (T.C.T. No. 42806).
Meanwhile, the Torres family were being evicted from their residence. Alfredo allowed them to
construct their dwelling on the lot. Eventually, Alfredos sisters married and left the house, except his
sisters Amelia and Primitiva and their spouses.
On February 2, 1958, Alfredo and co-plaintiff Melba Baldeo were married. They lived with his parents
and defendants-sisters but left after a year because the house was overcrowded and they wanted
privacy.
Subsequently, Alfredo mortgaged the lot to finance his wifes medical board examinations and
internship but redeemed it a year later.
In 1962, Alfredo verbally asked his sisters Amelia and Primitiva to vacate the premises because he
needed the lot to construct a medical clinic for his wife. Amelia and Primitiva requested an extension
and Alfredo agreed.
After the death of his father Simplicio in 1970, Alfredo again demanded from his sisters to vacate the
place but the latter stubbornly refused and even claimed that their father is the real owner of the lot.
Despite the refusal of Amelia and Primitiva to vacate the premises, Alfredo continued paying the realty
taxes on the lot. However, after 1982, he stopped paying the taxes for he realized that only his sisters
are benefiting from the lot.
On September 2, 1987, Alfredo and Melba through counsel, sent Amelia and Primitiva a final letter of
demand for them to vacate the lot.
The case was referred to the barangay which issued a certificate to file action when the parties failed to
settle amicably. Thus, the instant complaint was filed on October 7, 1987.[3]
On December 18, 1990, the trial court rendered decision, the decretal portion of which reads:
WHEREFORE, in view of the foregoing considerations, judgment is hereby rendered in favor of
plaintiffs Alfredo and Melba Torres and against defendants spouses Roman and Amelia Cruz and
spouses Severino and Primitiva Bautista, ordering the latter and all other persons claiming rights over
them to surrender the lot described in TCT No. 42806 to plaintiffs, and remove at their expense the
house they are now occupying as well as additional constructions thereon; to pay the amount of
P5,000.00 pesos as reasonable attorneys fees.
With costs against defendants.
SO ORDERED.
In due time, defendants appealed to the Court of Appeals.[4]
After due proceedings, on June 23, 1995, the Court of Appeals rendered decision affirming the
appealed decision, with costs against appellants.
Hence, this appeal.[5]
On March 20, 1996, the Court required private respondents to comment on the petition within ten (10)
days from notice.[6]
On September 6, 1996, private respondents filed their belated comment.[7] On October 30, 1996,
petitioners filed a reply to the comment.[8]
We deny the petition.
The sole issue raised is whether it is the regional trial court or the municipal trial court which has
jurisdiction over the subject of the action or suit, petitioners contending that the action is one for
unlawful detainer within the jurisdiction of a municipal trial court.
We find petitioners contention untenable.
The jurisdiction of the court over the subject matter of the action is determined by the allegations of the
complaint, irrespective of whether or not the plaintiff is entitled to recover upon all or some of the
claims asserted therein. The jurisdiction of the court can not be made to depend upon the defenses set
up in the answer or upon the motion to dismiss, for otherwise, the question of jurisdiction would almost
entirely depend upon the defendant.[9]
The present action, although termed as one for reconveyance of real property is actually one for
recovery of the right to possess or accion publiciana. This is an action for recovery of the right to
possess and is a plenary action in an ordinary civil proceeding in a regional trial court to determine the
better right of possession of realty independently of the title.[10] Accion publiciana or plenaria de
posesion is also used to refer to an ejectment suit filed after the expiration of one year from the accrual
of the cause of action or from the unlawful withholding of possession of the realty.[11] In such case,
the regional trial court has jurisdiction.[12] Here, the parties admit that the subject real property is
registered in the name of respondent Alfredo Torres. In the regional trial court what respondent sought
was to recover possession of the subject real property alleging that he owned the lot on which he had
allowed his father (now deceased) and sisters, petitioners herein, to erect their houses. Since the
complaint alleged that respondent Alfredo Torres was the owner of the subject lot and that he merely
allowed his father Simplicio Torres and his sisters Amelia and Primitiva to construct their houses
thereon, and that since 1972 respondent pleaded to petitioners to remove their houses and such
additional constructions thereon as respondent needed the lot for his own use, the action is plainly one
for recovery of possession of real property, or accion publiciana, filed on October 7, 1987, more than
one year after dispossession or when possession became unlawful, which is within the jurisdiction of a
regional trial court.[13] As heretofore stated, the jurisdiction of the court is determined by the
allegations of the complaint, not by the answer nor by the evidence adduced at the trial. Thus, the
jurisdiction of the lower court is not affected by the fact that petitioners asserted in their answer to the
complaint that the subject lot was truly owned by the estate of their father, also the father of
respondent, or that the last written demand to vacate was given on September 2, 1987, just more than a
month prior to the filing of the action. Since initial demand to vacate was made in 1972, petitioners
occupancy became unlawful. Subsequent demands were merely in the nature of reminders or
reiterations of the original demand, the one-year period to commence suit is counted from the first
demand.[14] When the dispossession lasted beyond one year, the proper action is accion publiciana for
recovery of possession of the subject property filed in the regional trial court.[15]
IN VIEW WHEREOF, the Court DENIES the petition for review on certiorari and AFFIRMS the
decision of the Court of Appeals in CA-G.R. CV No. 33757, promulgated on June 23, 1995, and its
resolution adopted on September 7, 1995.
No costs.
SO ORDERED.
SECOND DIVISION
[G.R. No. 138842. October 18, 2000]
NATIVIDAD P. NAZARENO, MAXIMINO P. NAZARENO, JR., petitioners, vs. COURT OF
APPEALS, ESTATE OF MAXIMINO A. NAZARENO, SR., ROMEO P. NAZARENO and ELIZA
NAZARENO, respondents.
DECISION
MENDOZA, J.:
This is a petition for review on certiorari of the decision[1] of the Court of Appeals in CA-GR CV No.
39441 dated May 29, 1998 affirming with modifications the decision of the Regional Trial Court,
Branch 107, Quezon City, in an action for annulment of sale and damages.
The facts are as follows:
Maximino Nazareno, Sr. and Aurea Poblete were husband and wife. Aurea died on April 15, 1970,
while Maximino, Sr. died on December 18, 1980. They had five children, namely, Natividad, Romeo,
Jose, Pacifico, and Maximino, Jr. Natividad and Maximino, Jr. are the petitioners in this case, while the
estate of Maximino, Sr., Romeo, and his wife Eliza Nazareno are the respondents.
During their marriage, Maximino Nazareno, Sr. and Aurea Poblete acquired properties in Quezon City
and in the Province of Cavite. It is the ownership of some of these properties that is in question in this
case.
It appears that after the death of Maximino, Sr., Romeo filed an intestate case in the Court of First
Instance of Cavite, Branch XV, where the case was docketed as Sp. Proc. No. NC-28. Upon the
reorganization of the courts in 1983, the case was transferred to the Regional Trial Court of Naic,
Cavite. Romeo was appointed administrator of his fathers estate.
In the course of the intestate proceedings, Romeo discovered that his parents had executed several
deeds of sale conveying a number of real properties in favor of his sister, Natividad. One of the deeds
involved six lots in Quezon City which were allegedly sold by Maximino, Sr., with the consent of
Aurea, to Natividad on January 29, 1970 for the total amount of P47,800.00. The Deed of Absolute
Sale reads as follows:
DEED OF ABSOLUTE SALE
KNOW ALL MEN BY THESE PRESENTS:
I, MAXIMINO A. NAZARENO, Filipino, married to Aurea Poblete-Nazareno, of legal age and a
resident of the Mun. of Naic, Prov. of Cavite, Philippines,
-WITNESSETH-
That I am the absolute registered owner of six (6) parcels of land with the improvements thereon
situated in Quezon City, Philippines, which parcels of land are herewith described and bounded as
follows, to wit:
TRANS. CERT. OF TITLE NO. 140946
A parcel of land (Lot 3-B of the subdivision plan Psd-47404, being a portion of Lot 3, Block D-3
described on plan Bsd-10642, G.L.R.O. Record No.) situated in the Quirino District, Quezon City.
Bounded on the N., along line 1-2 by Lot 15, Block D-3 of plan Bsd - 10642; along line 2-3 by Lot 4,
Block D-3 of plan Bsd-10642; along line 3-4 by Aurora Boulevard (Road Lot-1, Bsd-10642); and along
line 4-1 by Lot 3-D of the subdivision plan. Beginning at a point marked 1 on plan, being S.29 deg.
26E., 1156.22 m. from B.L.L.M. 9, Quezon City,
thence N. 79 deg. 53E., 12.50 m. to point 2;
thence S. 10 deg. 07E., 40.00 m. to point 3;
thence S. 79 deg. 53W., 12.50 m. to point 4;
thence N. 10 deg. 07W., 40.00 m. to the point
of beginning; containing an area of FIVE HUNDRED (500) SQUARE METERS. All points referred to
are indicated on the plan and are marked on the ground as follows: points 1 and 4 by P.L.S. Cyl. Conc.
Mons. bearings true; date of the original survey, April 8-July 15, 1920 and that of the subdivision
survey, March 25, 1956.
A parcel of land (Lot 3, Block 93 of the subdivision plan Psd-57970 being a portion of Lot 6, Pcs-4786,
G.L.R.O. Rec. No. 917) situated in Quirino District Quezon City. Bounded on the NW., along line 1-2,
by Lot 1, Block 93; on the NE., along line 2-3, by Road Lot 101; on the SE., along line 3-4, by Road
Lot 100; on the SW., along line 4-1, by Lot 4, Block 93; all of the subdivision plan. Beginning at point
marked 1 on plan, being S. 65 deg. 40 3339.92 m. from B.L.L.M. No. 1, Marikina, Rizal;
thence N. 23 deg. 28 min. E., 11.70 m. to point 2;
thence S. 66 deg. 32 min. E., 18.00 m. to point 3;
thence S. 23 deg. 28 min. W., 11.70 m. to point 4;
thence N. 66 deg. 32. min. W., 18.00 m. to the point
of beginning; containing an area of TWO HUNDRED TEN SQUARE METERS AND SIXTY
SQUARE DECIMETERS (210.60). All points referred to are indicated on the plan and are marked on
the ground by B.L. Cyl. Conc. Mons. 15 x 60 cm.; bearings true; date of the original survey, Nov. 10,
1920 and Jan. 31-March 31, 1924 and that of the subdivision survey, February 1 to September 30,
1954. Date approved - March 9, 1962.
A parcel of land (Lot No. 10, of the consolidation and subdivision plan Pcs-988, being a portion of the
consolidated Lot No. 26, Block No. 6, Psd-127, and Lots Nos. 27-A and 27-B, Psd-14901, G.L.R.O.
Record No. 917), situated in the District of Cubao, Quezon City, Island of Luzon. Bounded on the NE.,
by Lot No. 4 of the consolidation and subdivision plan; on the SE., by Lot No. 11 of the consolidation
and subdivision plan; on the SW., by Lot No. 3 of the consolidation and subdivision plan; and on the
NW., by Lot No. 9 of the consolidation and subdivision plan. Beginning at a point marked 1 on the
plan, being S. 7 deg. 26W., 4269.90 m. more or less from B.L.L.M. No. 1, Mp. of Mariquina;
thence N. 25 deg. 00W., 12.00 m to point 4;
thence N. 64 deg. 59E., 29.99 m. to the point of
beginning; containing an area of THREE HUNDRED SIXTY SQUARE METERS (360), more or less.
All points referred to are indicated on the plan and on the ground are marked by P.L.S. Conc. Mons. 15
x 60 cm.; bearings true; declination 0 deg. 50E., date of the original survey, April 8 to July 15, 1920,
and that of the consolidation and subdivision survey, April 24 to 26, 1941.
by Lot No. 4 of the consolidation and subdivision plan; on the SE., by Lot No. 12 of the consolidation
and subdivision plan; on the SW., by Lot No. 3 of the consolidation and subdivision plan; on the NW.,
by Lot No. 10 of the consolidation and subdivision plan. Beginning at a point marked 1 on plan, being
S. 79 deg. 07W., 4264.00 m. more or less from B.L.L.M. No. 1, Mp. of Mariquina;
thence N. 25 deg. 00W., 12.00 m. to point 3;
thence S. 26 deg. 00E., 12.00 m. to the point of
All points referred to are indicated on the plan and on the ground, are marked by P.L.S. Conc. Mons. 15
x 60 cm.; bearings true; declination 0 deg. 50E.; date of the original survey, April 8 to July 15, 1920,
A parcel of land (Lot No. 13 of the consolidation and subdivision plan Pcs-988, being a portion of the
by Lot No. 4 of the consolidation and subdivision plan; on the SE., by Lot No. 14, of the consolidation;
NW., by Lot No. 12, of the consolidation and subdivision plan. Beginning at the point marked 1 on
plan, being S.78 deg. 48W., 4258.20 m. more or less from B.L.L.M. No. 1, Mp. of Mariquina;
thence N. 25 deg. 00W., 12.00 m. to point 3;
thence S.25 deg. 00E., 12.00 m. to point of
beginning; containing an area of THREE HUNDRED SIXTY SQUARE METERS (360, more or less.
by Lot No. 4 of the consolidation and subdivision plan; on the SE., by Lot No. 15, of the consolidation
NW., by Lot No. 13 of the consolidation and subdivision plan. Beginning at the point marked 1 on plan,
being S.78 deg. 48W., 4258.20 m. more or less from B.L.L.M. No. 1, Mp. of Mariquina;
thence N.64 deg. 58E., 30.00 m. to the point of
That for and in consideration of the sum of FORTY THREE THOUSAND PESOS (P43,000.00)
PHILIPPINE CURRENCY, to me in hand paid by NATIVIDAD P. NAZARENO, Filipino, single, of
legal age and a resident of the Mun. of Naic, Prov. of Cavite, Philippines, the receipt whereof is
acknowledged to my entire satisfaction, I do hereby CEDE, SELL, TRANSFER, CONVEY and
ASSIGN unto the said Natividad P. Nazareno, her heirs, administrators and assigns, all my title, rights,
interests and participations to the abovedescribed parcels of land with the improvements thereon, with
the exception of LOT NO. 11 COVERED BY T.C.T. NO. 118886, free of any and all liens and
encumbrances; and
That for and in consideration of the sum of FOUR THOUSAND EIGHT HUNDRED PESOS
(P4,800.00) PHILIPPINE CURRENCY, to me in hand paid by NATIVIDAD P. NAZARENO, Filipino,
single, of legal age and a resident of the Mun. of Naic, Prov. of Cavite, Philippines, the receipt whereof
is acknowledged to my entire satisfaction, I do hereby CEDE, SELL, TRANSFER, CONVEY and
ASSIGN unto the said Natividad P. Nazareno, her heirs, administrators and assigns, all my title, rights,
interests and participations in and to Lot No. 11 covered by T.C.T. No. 118886 above-described, free of
any and all liens and encumbrances, with the understanding that the title to be issued in relation hereto
shall be separate and distinct from the title to be issued in connection with Lots Nos. 13 and 14,
although covered by the same title.
IN WITNESS WHEREOF, I have hereunto signed this deed of absolute sale in the City of Manila,
Philippines, this 29th day of January, 1970.[2]
By virtue of this deed, transfer certificates of title were issued to Natividad, to wit: TCT No. 162738
(Lot 3-B),[3] TCT No. 162739 (Lot 3),[4] TCT No. 162735 (Lot 10),[5] TCT No. 162736 (Lot 11),[6]
and TCT No. 162737 (Lots 13 and 14),[7] all of the Register of Deeds of Quezon City.
Among the lots covered by the above Deed of Sale is Lot 3-B which is registered under TCT No.
140946. This lot had been occupied by Romeo, his wife Eliza, and by Maximino, Jr. since 1969.
Unknown to Romeo, Natividad sold Lot 3-B on July 31, 1982 to Maximino, Jr.,[8] for which reason the
latter was issued TCT No. 293701 by the Register of Deeds of Quezon City.[9]
When Romeo found out about the sale to Maximino, Jr., he and his wife Eliza locked Maximino, Jr. out
of the house. On August 4, 1983, Maximino, Jr. brought an action for recovery of possession and
damages with prayer for writs of preliminary injunction and mandatory injunction with the Regional
Trial Court of Quezon City. On December 12, 1986, the trial court ruled in favor of Maximino, Jr. In
CA-G.R. CV No. 12932, the Court of Appeals affirmed the decision of the trial court.[10]
On June 15, 1988, Romeo in turn filed, on behalf of the estate of Maximino, Sr., the present case for
annulment of sale with damages against Natividad and Maximino, Jr. The case was filed in the
Regional Trial Court of Quezon City, where it was docketed as Civil Case No. 88-58.[11] Romeo
sought the declaration of nullity of the sale made on January 29, 1970 to Natividad and that made on
July 31, 1982 to Maximino, Jr. on the ground that both sales were void for lack of consideration.
On March 1, 1990, Natividad and Maximino, Jr. filed a third-party complaint against the spouses
Romeo and Eliza.[12] They alleged that Lot 3, which was included in the Deed of Absolute Sale of
January 29, 1970 to Natividad, had been surreptitiously appropriated by Romeo by securing for himself
a new title (TCT No. 277968) in his name.[13] They alleged that Lot 3 is being leased by the spouses
Romeo and Eliza to third persons. They therefore sought the annulment of the transfer to Romeo and
the cancellation of his title, the eviction of Romeo and his wife Eliza and all persons claiming rights
from Lot 3, and the payment of damages.
The issues having been joined, the case was set for trial. Romeo presented evidence to show that
Maximino and Aurea Nazareno never intended to sell the six lots to Natividad and that Natividad was
only to hold the said lots in trust for her siblings. He presented the Deed of Partition and Distribution
dated June 28, 1962 executed by Maximino Sr. and Aurea and duly signed by all of their children,
except Jose, who was then abroad and was represented by their mother, Aurea. By virtue of this deed,
the nine lots subject of this Deed of Partition were assigned by raffle as follows:
1. Romeo - Lot 25-L (642 m2)
2. Natividad - Lots 23 (312 m2) and 24 (379 m2)
3. Maximino, Jr. - Lots 6 (338 m2) and 7 (338 m2)
4. Pacifico - Lots 13 (360 m2) and 14 (360 m2)
5. Jose - Lots 10 (360 m2) and 11 (360 m2)
Romeo received the title to Lot 25-L under his name,[14] while Maximino, Jr. received Lots 6 and 7
through a Deed of Sale dated August 16, 1966 for the amount of P9,500.00.[15] Pacifico and Joses
shares were allegedly given to Natividad, who agreed to give Lots 10 and 11 to Jose, in the event the
latter came back from abroad. Natividads share, on the other hand, was sold to third persons[16]
because she allegedly did not like the location of the two lots. But, Romeo said, the money realized
from the sale was given to Natividad.
Romeo also testified that Lot 3-B was bought for him by his father, while Lot 3 was sold to him for
P7,000.00 by his parents on July 4, 1969.[17] However, he admitted that a document was executed by
his parents transferring six properties in Quezon City, i.e., Lots 3, 3-B, 10, 11, 13, and 14, to Natividad.
Romeo further testified that, although the deeds of sale executed by his parents in their favor stated that
the sale was for a consideration, they never really paid any amount for the supposed sale. The transfer
was made in this manner in order to avoid the payment of inheritance taxes.[18] Romeo denied stealing
Lot 3 from his sister but instead claimed that the title to said lot was given to him by Natividad in 1981
after their father died.
Natividad and Maximino, Jr. claimed that the Deed of Partition and Distribution executed in 1962 was
not really carried out. Instead, in December of 1969, their parents offered to sell to them the six lots in
Quezon City, i.e., Lots 3, 3-B, 10, 11, 13 and 14. However, it was only Natividad who bought the six
properties because she was the only one financially able to do so. Natividad said she sold Lots 13 and
14 to Ros-Alva Marketing Corp.[19] and Lot 3-B to Maximino, Jr. for P175,000.00.[20] Natividad
admitted that Romeo and the latters wife were occupying Lot 3-B at that time and that she did not tell
the latter about the sale she had made to Maximino, Jr.
Natividad said that she had the title to Lot 3 but it somehow got lost. She could not get an original copy
of the said title because the records of the Registrar of Deeds had been destroyed by fire. She claimed
she was surprised to learn that Romeo was able to obtain a title to Lot 3 in his name.
Natividad insisted that she paid the amount stated in the Deed of Absolute Sale dated January 29, 1970.
She alleged that their parents had sold these properties to their children instead of merely giving the
same to them in order to impose on them the value of hardwork.
Natividad accused Romeo of filing this case to harass her after Romeo lost in the action for recovery of
possession (Civil Case No. Q-39018) which had been brought against him by Maximino, Jr. It appears
that before the case filed by Romeo could be decided, the Court of Appeals rendered a decision in CA-
GR CV No. 12932 affirming the trial courts decision in favor of Maximino, Jr.
On August 10, 1992, the trial court rendered a decision, the dispositive portion of which states:
WHEREFORE, judgment is hereby rendered declaring the nullity of the Deed of Sale dated January
29, 1970. Except as to Lots 3, 3-B, 13 and 14 which had passed on to third persons, the defendant
Natividad shall hold the rest in trust for Jose Nazareno to whom the same had been adjudicated. The
Register of Deeds of Quezon City is directed to annotate this judgment on Transfer Certificate of Titles
Nos. 162735 and 162736 as a lien in the titles of Natividad P. Nazareno.
The defendants counterclaim is dismissed. Likewise, the third-party complaint is dismissed.
The defendants are hereby directed to pay to the plaintiff jointly and severally the sum of P30,000 as
and for attorneys fees. Likewise, the third-party plaintiff is directed to pay the third-party defendants
attorneys fees of P20,000.
All other claims by one party against the other are dismissed.
SO ORDERED.[21]
Natividad and Maximino, Jr. filed a motion for reconsideration. As a result, on October 14, 1992 the
trial court modified its decision as follows:
WHEREFORE, the plaintiffs Partial Motion for Reconsideration is hereby granted. The judgment dated
August 10, 1992 is hereby amended, such that the first paragraph of its dispositive portion is
correspondingly modified to read as follows:
WHEREFORE, judgment is hereby rendered declaring the nullity of the Deeds of Sale dated January
29, 1970 and July 31, 1982.
Except as to Lots 3, 13 and 14 which had passed on to third person, the defendant Natividad shall hold
the rest OF THE PROPERTIES COVERED BY THE DEED OF SALE DATED JANUARY 29, 1970
(LOTS 10 and 11) in trust for Jose Nazareno to whom the same had been adjudicated.
The Register of Deeds of Quezon City is directed to annotate this judgment on Transfer Certificates of
Title No. 162735 and 162736 as a lien on the titles of Natividad P. Nazareno.
LIKEWISE, THE SAID REGISTER OF DEEDS IS DIRECTED TO CANCEL TCT NO. 293701
(formerly 162705) OVER LOT 3-B AND RESTORE TCT NO. 140946 IN THE NAME OF
MAXIMINO NAZARENO SR. AND AUREA POBLETE.[22]
On appeal to the Court of Appeals, the decision of the trial court was modified in the sense that titles to
Lot 3 (in the name of Romeo Nazareno) and Lot 3-B (in the name of Maximino Nazareno, Jr.), as well
as to Lots 10 and 11 were cancelled and ordered restored to the estate of Maximino Nazareno, Sr. The
dispositive portion of the decision dated May 29, 1998 reads:
WHEREFORE, the appeal is GRANTED. The decision and the order in question are modified as
follows:
1. The Deed of Absolute Sale dated 29 January 1970 and the Deed of Absolute Sale dated 31 July 1982
are hereby declared null and void;
2. Except as to Lots 13 and 14 ownership of which has passed on to third persons, it is hereby declared
that Lots 3, 3-B, 10 and 11 shall form part of the estate of the deceased Maximino Nazareno, Sr.;
3. The Register of Deeds of Quezon City is hereby ordered to restore TCT No. 140946 (covering Lot 3-
B), TCT No. 132019 (covering Lot 3), TCT No. 118885 (covering Lot 10), and TCT No. 118886
(covering Lot 11).[23]
Petitioners filed a motion for reconsideration but it was denied in a resolution dated May 27, 1999.
Hence this petition.
Petitioners raise the following issues:
1. WHETHER OR NOT THE UNCORROBORATED TESTIMONY OF PRIVATE RESPONDENT
ROMEO P. NAZARENO CAN DESTROY THE FULL FAITH AND CREDIT ACCORDED TO
NOTARIZED DOCUMENTS LIKE THE DEED OF ABSOLUTE SALE DATED JANUARY 29, 1970
(EXH. 1) EXECUTED BY THE DECEASED SPOUSES MAXIMINO A. NAZARENO, SR. AND
AUREA POBLETE IN FAVOR OF PETITIONER NATIVIDAD P. NAZARENO.
2. WHETHER OR NOT THE RESPONDENT COURT GROSSLY MISAPPRECIATED THE FACTS
OF THE CASE WITH RESPECT TO THE VALIDITY OF THE SAID DEED OF ABSOLUTE SALE
DATED JANUARY 29, 1970 (EXH. 1) IN THE LIGHT OF THE FOLLOWING:
A) THE DOCUMENTARY EVIDENCE, ALL OF WHICH ARE NOTARIZED,
EXECUTED BY THE DECEASED SPOUSES DURING THEIR LIFETIME INVOLVING
SOME OF THEIR CONJUGAL PROPERTIES.
B) THE EXECUTION OF AN EXTRA-JUDICIAL PARTITION WITH WAIVER OF
RIGHTS AND CONFIRMATION OF SALE DATED MAY 24, 1975 (EXH. 14A) OF THE
ESTATE OF AUREA POBLETE BY THE DECEASED MAXIMINO A. NAZARENO, SR.
AND THEIR CHILDREN INVOLVING THE ONLY REMAINING ESTATE OF AUREA
POBLETE THUS IMPLIEDLY ADMITTING THE VALIDITY OF PREVIOUS
DISPOSITIONS MADE BY SAID DECEASED SPOUSES ON THEIR CONJUGAL
PROPERTIES, HALF OF WHICH WOULD HAVE BECOME A PART OF AUREA
POBLETES ESTATE UPON HER DEMISE.
C) THE ADMISSION MADE BY MAXIMINO A. NAZARENO, SR. IN HIS TESTIMONY
IN OPEN COURT ON AUGUST 13, 1980 DURING HIS LIFETIME IN CIVIL CASE NO.
NC-712 (EXH. 81, 81B) THAT HE HAD SOLD CERTAIN PROPERTIES IN FAVOR OF
NATIVIDAD P. NAZARENO THUS BELYING THE CLAIM OF ROMEO P. NAZARENO
THAT THE DEED OF ABSOLUTE SALE DATED JANUARY 29, 1970 IS ONE AMONG
THE DOCUMENTS EXECUTED BY THE DECEASED SPOUSES TO BE WITHOUT
CONSIDERATION.
D) THE ADMISSIONS MADE BY ROMEO P. NAZARENO HIMSELF CONTAINED IN
A FINAL DECISION OF THE RESPONDENT COURT IN CA-GR CV NO. 12932 DATED
AUGUST 31, 1992 AND AN ANNEX APPEARING IN HIS ANSWER TO THE
COMPLAINT IN CIVIL CASE NO. Q-39018 (EXH. 11-B) INVOLVING LOT 3B, ONE
OF THE PROPERTIES IN QUESTION THAT THE SAID PROPERTY IS OWNED BY
PETITIONER NATIVIDAD P. NAZARENO.
E) THE PARTIAL PROJECT OF PARTITION DATED MAY 24, 1995 WHICH WAS
APPROVED BY THE INTESTATE COURT IN SP. PROC. NO. NC-28 AND EXECUTED
IN ACCORDANCE WITH THE LATTER COURTS FINAL ORDER DATED JULY 9, 1991
DETERMINING WHICH WERE THE REMAINING PROPERTIES OF THE ESTATE.
3. WHETHER OR NOT THE DEED OF ABSOLUTE SALE DATED JANUARY 29, 1970
EXECUTED BY THE DECEASED SPOUSES MAXIMINO A. NAZARENO, SR. AND AUREA
POBLETE DURING THEIR LIFETIME INVOLVING THEIR CONJUGAL PROPERTIES IS AN
INDIVISIBLE CONTRACT? AND IF SO WHETHER OR NOT UPON THEIR DEATH, THE
ESTATE OF MAXIMINO A. NAZARENO, SR. ALONE CAN SEEK THE ANNULMENT OF SAID
SALE?
4. WHETHER OR NOT THE SALE OF LOT 3 UNDER THE DEED OF ABSOLUTE SALE DATED
JANUARY 29, 1970 IN FAVOR OF PETITIONER NATIVIDAD P. NAZARENO, IS VALID
CONSIDERING THAT AS PER THE ORDER OF THE LOWER COURT DATED NOVEMBER 21,
1990. ROMEO NAZARENO ADMITTED THAT HE DID NOT PAY THE CONSIDERATION
STATED IN THE DEED OF ABSOLUTE SALE DATED JULY 4, 1969 EXECUTED BY THE
DECEASED SPOUSES IN HIS FAVOR (EXH. M-2).
5. WHETHER OR NOT AS A CONSEQUENCE, THE TITLE ISSUED IN THE NAME OF ROMEO
P. NAZARENO, TCT NO. 277968 (EXH. M) SHOULD BE CANCELLED AND DECLARED NULL
AND VOID AND A NEW ONE ISSUED IN FAVOR OF NATIVIDAD P. NAZARENO PURSUANT
TO THE DEED OF ABSOLUTE SALE EXECUTED IN THE LATTERS FAVOR ON JANUARY 29,
1970 BY THE DECEASED SPOUSES.[24]
We find the petition to be without merit.
First. Petitioners argue that the lone testimony of Romeo is insufficient to overcome the presumption of
validity accorded to a notarized document.
To begin with, the findings of fact of the Court of Appeals are conclusive on the parties and carry even
more weight when these coincide with the factual findings of the trial court. This Court will not weigh
the evidence all over again unless there is a showing that the findings of the lower court are totally
devoid of support or are clearly erroneous so as to constitute serious abuse of discretion.[25] The lone
testimony of a witness, if credible, is sufficient. In this case, the testimony of Romeo that no
consideration was ever paid for the sale of the six lots to Natividad was found to be credible both by the
trial court and by the Court of Appeals and it has not been successfully rebutted by petitioners. We,
therefore, have no reason to overturn the findings by the two courts giving credence to his testimony.
The fact that the deed of sale was notarized is not a guarantee of the validity of its contents. As held in
Suntay v. Court of Appeals:[26]
Though the notarization of the deed of sale in question vests in its favor the presumption of regularity,
it is not the intention nor the function of the notary public to validate and make binding an instrument
never, in the first place, intended to have any binding legal effect upon the parties thereto. The intention
of the parties still and always is the primary consideration in determining the true nature of a contract.
Second. Petitioners make capital of the fact that in C.A.-G.R. CV No. 12932, which was declared final
by this Court in G.R. No. 107684, the Court of Appeals upheld the right of Maximino, Jr. to recover
possession of Lot 3-B. In that case, the Court of Appeals held:
As shown in the preceding disquisition, Natividad P. Nazareno acquired the property in dispute by
purchase in 1970. She was issued Transfer Certificate of Title No. 162738 of the Registry of Deeds of
Quezon City. When her parents died, her mother Aurea Poblete-Nazareno in 1970 and her father
Maximino A. Nazareno, Sr. in 1980, Natividad P. Nazareno had long been the exclusive owner of the
property in question. There was no way therefore that the aforesaid property could belong to the estate
of the spouses Maximino Nazareno, Sr. and Aurea Poblete. The mere fact that Romeo P. Nazareno
included the same property in an inventory of the properties of the deceased Maximino A. Nazareno,
Sr. will not adversely affect the ownership of the said realty. Appellant Romeo P. Nazarenos suspicion
that his parents had entrusted all their assets under the care and in the name of Natividad P. Nazareno,
their eldest living sister who was still single, to be divided upon their demise to all the compulsory
heirs, has not progressed beyond mere speculation. His barefaced allegation on the point not only is
without any corroboration but is even belied by documentary evidence. The deed of absolute sale
(Exhibit B), being a public document (Rule 132, Secs. 19 and 23, Revised Rules on Evidence), is
entitled to great weight; to contradict the same, there must be evidence that is clear, convincing and
more than merely preponderant (Yturralde vs. Aganon, 28 SCRA 407; Favor vs. Court of Appeals, 194
SCRA 308). Defendants-appellants own conduct disproves their claim of co-ownership over the
property in question. Being themselves the owner of a ten-unit apartment building along Stanford St.,
Cubao Quezon City, defendants-appellants, in a letter of demand to vacate addressed to their tenants
(Exhibits P, P-1 and P-2) in said apartment, admitted that the house and lot located at No. 979 Aurora
Blvd., Quezon City where they were residing did not belong to them. Also, when they applied for a
permit to repair the subject property in 1977, they stated that the property belonged to and was
registered in the name of Natividad P. Nazareno. Among the documents submitted to support their
application for a building permit was a copy of TCT No. 162738 of the Registry of Deeds of Quezon
City in the name of Natividad Nazareno (Exhibit O and submarkings; tsn March 15, 1985, pp. 4-5).[27]
To be sure, that case was for recovery of possession based on ownership of Lot 3-B. The parties in that
case were Maximino, Jr., as plaintiff, and the spouses Romeo and Eliza, as defendants. On the other
hand, the parties in the present case for annulment of sale are the estate of Maximino, Sr., as plaintiff,
and Natividad and Maximino, Jr., as defendants. Romeo and Eliza were named third-party defendants
after a third-party complaint was filed by Natividad and Maximino, Jr. As already stated, however, this
third-party complaint concerned Lot 3, and not Lot 3-B.
The estate of a deceased person is a juridical entity that has a personality of its own.[28] Though
Romeo represented at one time the estate of Maximino, Sr., the latter has a separate and distinct
personality from the former. Hence, the judgment in CA-GR CV No. 12932 regarding the ownership of
Maximino, Jr. over Lot 3-B binds Romeo and Eliza only, and not the estate of Maximino, Sr., which
also has a right to recover properties which were wrongfully disposed.
Furthermore, Natividads title was clearly not an issue in the first case. In other words, the title to the
other five lots subject of the present deed of sale was not in issue in that case. If the first case resolved
anything, it was the ownership of Maximino, Jr. over Lot 3-B alone.
Third. Petitioners allege that, as shown by several deeds of sale executed by Maximino, Sr. and Aurea
during their lifetime, the intention to dispose of their real properties is clear. Consequently, they argue
that the Deed of Sale of January 29, 1970 should also be deemed valid.
This is a non-sequitur. The fact that other properties had allegedly been sold by the spouses Maximino,
Sr. and Aurea does not necessarily show that the Deed of Sale made on January 29, 1970 is valid.
Romeo does not dispute that their parents had executed deeds of sale. The question, however, is
whether these sales were made for a consideration. The trial court and the Court of Appeals found that
the Nazareno spouses transferred their properties to their children by fictitious sales in order to avoid
the payment of inheritance taxes.
Indeed, it was found both by the trial court and by the Court of Appeals that Natividad had no means to
pay for the six lots subject of the Deed of Sale.
All these convince the Court that Natividad had no means to pay for all the lots she purportedly
purchased from her parents. What is more, Romeos admission that he did not pay for the transfer to
him of lots 3 and 25-L despite the considerations stated in the deed of sale is a declaration against
interest and must ring with resounding truth. The question is, why should Natividad be treated any
differently, i.e., with consideration for the sale to her, when she is admittedly the closest to her parents
and the one staying with them and managing their affairs? It just seems without reason. Anyway, the
Court is convinced that the questioned Deed of Sale dated January 29, 1970 (Exh. A or 1) is simulated
for lack of consideration, and therefore ineffective and void.[29]
In affirming this ruling, the Court of Appeals said:
Facts and circumstances indicate badges of a simulated sale which make the Deed of Absolute Sale
dated 29 January 1970 void and of no effect. In the case of Suntay vs. Court of Appeals (251 SCRA
430 [1995]), the Supreme Court held that badges of simulation make a deed of sale null and void since
parties thereto enter into a transaction to which they did not intend to be legally bound.
It appears that it was the practice in the Nazareno family to make simulated transfers of ownership of
real properties to their children in order to avoid the payment of inheritance taxes. Per the testimony of
Romeo, he acquired Lot 25-L from his parents through a fictitious or simulated sale wherein no
consideration was paid by him. He even truthfully admitted that the sale of Lot 3 to him on 04 July
1969 (Deed of Absolute Sale, Records, Vol. II, p. 453) likewise had no consideration. This document
was signed by the spouses Max, Sr. and Aurea as vendors while defendant-appellant Natividad signed
as witness.[30]
Fourth. Petitioners argue further:
The Deed of Absolute Sale dated January 29, 1970 is an indivisible contract founded on an indivisible
obligation. As such, it being indivisible, it can not be annulled by only one of them. And since this suit
was filed only by the estate of Maximino A. Nazareno, Sr. without including the estate of Aurea
Poblete, the present suit must fail. The estate of Maximino A. Nazareno, Sr. can not cause its annulment
while its validity is sustained by the estate of Aurea Poblete.[31]
An obligation is indivisible when it cannot be validly performed in parts, whatever may be the nature of
the thing which is the object thereof. The indivisibility refers to the prestation and not to the object
thereof.[32] In the present case, the Deed of Sale of January 29, 1970 supposedly conveyed the six lots
to Natividad. The obligation is clearly indivisible because the performance of the contract cannot be
done in parts, otherwise the value of what is transferred is diminished. Petitioners are therefore
mistaken in basing the indivisibility of a contract on the number of obligors.
In any case, if petitioners only point is that the estate of Maximino, Sr. alone cannot contest the validity
of the Deed of Sale because the estate of Aurea has not yet been settled, the argument would
nonetheless be without merit. The validity of the contract can be questioned by anyone affected by it.
[33] A void contract is inexistent from the beginning. Hence, even if the estate of Maximino, Sr. alone
contests the validity of the sale, the outcome of the suit will bind the estate of Aurea as if no sale took
place at all.
Fifth. As to the third-party complaint concerning Lot 3, we find that this has been passed upon by the
trial court and the Court of Appeals. As Romeo admitted, no consideration was paid by him to his
parents for the Deed of Sale. Therefore, the sale was void for having been simulated. Natividad never
acquired ownership over the property because the Deed of Sale in her favor is also void for being
without consideration and title to Lot 3 cannot be issued in her name.
Nonetheless, it cannot be denied that Maximino, Sr. intended to give the six Quezon City lots to
Natividad. As Romeo testified, their parents executed the Deed of Sale in favor of Natividad because
the latter was the only female and the only unmarried member of the family.[34] She was thus entrusted
with the real properties in behalf of her siblings. As she herself admitted, she intended to convey Lots
10 and 11 to Jose in the event the latter returned from abroad. There was thus an implied trust
constituted in her favor. Art. 1449 of the Civil Code states:
There is also an implied trust when a donation is made to a person but it appears that although the legal
estate is transmitted to the donee, he nevertheless is either to have no beneficial interest or only a part
thereof.
There being an implied trust, the lots in question are therefore subject to collation in accordance with
Art. 1061 which states:
Every compulsory heir, who succeeds with other compulsory heirs, must bring into the mass of the
estate any property or right which he may have received from the decedent, during the lifetime of the
latter, by way of donation, or any other gratuitous title, in order that it may be computed in the
determination of the legitime of each heir, and in the account of the partition.
As held by the trial court, the sale of Lots 13 and 14 to Ros-Alva Marketing, Corp. on April 20,
1979[35] will have to be upheld for Ros-Alva Marketing is an innocent purchaser for value which
relied on the title of Natividad. The rule is settled that every person dealing with registered land may
safely rely on the correctness of the certificate of title issued therefor and the law will in no way oblige
him to go behind the certificate to determine the condition of the property.[36]
WHEREFORE, the decision of the Court of Appeals is AFFIRMED.
SO ORDERED.
Bellosillo, (Chairman), Quisumbing, and De Leon, Jr., JJ., concur.
Buena, J., no part.
SECOND DIVISION
[G.R. No. 39430 : December 3, 1990.]
191 SCRA 795-805
FRANCISCO MANLAPAZ, DELFIN SANGCAP, DOMINGO SANGCAP, PEDRO CUNANAN,

FAUSTO DE LA PENA and HONORATA DE LA PENA, Petitioners, vs. HON. COURT OF
APPEALS, HON. JUDGE LORENZO R. MOSQUEDA, HON. JUDGE VIRGILIO CANIVEL,
TEODORO RIVERA, PABLO RIVERA, RENATO RIVERA and BONIFACIO RIVERA,
Respondents.
DECISION
REGALADO, J.:
Through this special civil action for certiorari and mandamus with a prayer for preliminary
injunction, petitioners would have us reverse and set aside the decision of the Court of Appeals 1
which affirmed the order of the former Court of First Instance of Pampanga, Branch VII,
authorizing the immediate execution of the judgment rendered by the former Municipal Court of
Candaba, Pampanga in Civil Case No. 425 for ejectment. :-cralaw
On October 20, 1971, herein private respondents, as plaintiffs, filed an ejectment case in the
Municipal Court of Candaba, Pampanga against herein petitioners as defendants, docketed therein
as Civil Case No. 425, alleging that on or about September 1, 1971 herein petitioners, thru force,
intimidation and threats and with the use of guns, forcibly ousted the private respondents from
Lots 32, 36, 37, 38, 39, 40 and 41, Block 21 of Bahay Pare, Pampanga, which private respondents
had been occupying and cultivating peacefully, notoriously and continually for more than ten (10)
years.
Petitioners resisted the ejectment case alleging lack of jurisdiction due to the pendency of Civil
Case No. 79371 in the then Court of First Instance of Manila, and denied all other material
allegations in the complaint.
Thereafter, the parties entered into a stipulation of facts wherein they agreed that:
1. The lots under litigation are Lots 32, 36, 37, 38, 39, 40 and 41 of Block 21 of the Bahay Pare
Estate, Candaba, Pampanga;
2. The said lots belong to the Land Authority;
3. Both parties had filed their respective applications to purchase said lots from the Government;
4. On May 20, 1968, the Land Authority rendered its decision dismissing the applications of
petitioners;
5. On appeal to the Office of the President, the decision of the Land Authority was reversed and
the awards in favor of private respondents were cancelled;
6. Private respondents seasonably petitioned for judicial review and for annulment of said decision
of the Office of the President before the Court of First Instance of Manila, docketed as Civil Case
No. 79371;
7. During the pendency of Civil Case No. 79371, the Land Authority issued Orders of Award to
petitioners on September 21, 1970;
8. The ejectment case was filed by private respondents during the pendency of said Civil Case No.
79371 of the Court of First Instance of Manila;
9. Private respondents have been regularly harvesting an average one hundred (100) cavans per
hectare from the land in dispute; and
10. On September 1, 1971, private respondents discovered petitioners' intrusion over subject
property; 2
On February 27, 1974, the Municipal Court of Candaba rendered judgment in favor of private
respondents, ordering petitioners to vacate the lots and restore possession thereof to private
respondents, and to pay as rentals twenty-five (25) cavans per hectare for each year from May,
1971 until they shall have vacated the controverted lots. 3
Petitioners duly appealed the said decision of the Court of First Instance of Macabebe, Pampanga,
docketed therein as Civil Case No. 73-70-M. During the pendency of said appeal, a motion for
execution pending appeal was filed by private respondents for failure of petitioners to file a
supersedeas bond. On April 2, 1974, the Court of First Instance of Candaba, Pampanga issued an
order granting the same. 4
Petitioners filed a petition for certiorari with the Court of Appeals, docketed therein as CA-G.R. No.
SP-02996, and obtained therefrom a writ of preliminary injunction on a cash bond of P2,000.00. 5
However, on June 3, 1974, respondent court rendered a decision, the dispositive part of which
reads:: nad
"IN VIEW WHEREOF, this Court is constrained to dismiss, as it now dismisses, and denies
certiorari; with costs, and preliminary injunction issued by this Court on 30 April, 1974 is
set aside.
IT IS SO ORDERED." 6
Petitioners filed a motion for reconsideration which allegedly has not been resolved by respondent
court and by reason of which the respondent lower courts issued a writ of execution, 7 hence the
petition at bar. 8
We find petitioners' present recourse devoid of merit.

The writ of execution was properly issued pending appeal in the case. Respondent judge had
neither abused his discretion nor committed an error of judgment, but merely complied with his
ministerial duty under the Rules of Court when he granted private respondents' motion for
immediate execution of the judgments in their favor for failure of petitioners to file a supersedeas
bond.
Section 8, Rule 70 of the Rules of Court provides in part that:
"If judgment is rendered against the defendant, execution shall issue immediately, unless an
appeal has been perfected and the defendant to stay execution files a sufficient bond, approved
by the justice of the peace or municipal court and executed to the plaintiff to enter the action in
the Court of First Instance and to pay the rents, damages, and costs accruing down to the time of
the judgment appealed from, and unless, during the pendency of the appeal, he deposits with the
appellate court the amount of rent due from time to time under the contract, if any, as found by
the judgment of the justice of the peace or municipal court to exist. In the absence of a contract,
he shall deposit with the court the reasonable value of the use and occupation of the premises for
the preceding month or period at the rate determined by the judgment, on or before the tenth
day of each succeeding month or period. . . ."
Under this rule, to stay the immediate execution of judgment in an ejectment proceeding it is
required that the defendant-appellant must (a) perfect his appeal, (b) file a supersedeas bond,
and (c) periodically deposit the rentals falling due during the pendency of the appeal. Failure to
comply with said requirements is a ground for the outright execution of the judgment upon
petition of the prevailing party. 9
It has been repeatedly held that the requirement for the filing of a supersedeas bond is
mandatory and cannot be dispensed with by the courts. When the supersedeas bond is not filed,
the duty of the court to order the execution of the appealed decision is ministerial and imperative
and the execution of the judgment shall then issue immediately, 10 without prejudice to the
appeal taking its course. 11
In the instant case, petitioners' failure to file a supersedeas bond necessary to stay execution
pending appeal made or rendered the original decision executory and gave private respondents
the right to immediate execution of the judgment which the court is bound to grant and enforce.
The claim of petitioners that the order of execution is contrary to the doctrine laid down and
reiterated in the cases of Rallon vs. Ruiz, Jr., et al., 12 Realiza vs. Duarte, 13 and Hernandez, et
al. vs. Clapis, et al. 14 is without merit.
:-cralaw
The aforementioned cases stand on different factual settings, hence the common dictum therein is
not applicable in the case at bar. In those cases, the order of the executive department, giving
the defendant in the ejectment case preferential right over the land in dispute, was already final
and executory. The rights of the defendants therein over the property that they claimed were
already settled and not contested by the adverse parties.
In the present case, the rights of petitioners over the land in controversy is doubtful. The decision
of the Office of the President giving petitioners preferential rights to own the questioned lots,
setting aside the decision of the Land Authority awarding the same to private respondents, was
questioned by the latter before the Court of First Instance of Manila in Civil Case No. 79371. In
fact, on November 17, 1972, the Secretary of Agrarian Reform, upon learning of the pendency of
said case, ordered the suspension of the processing of all papers relative to the disputed lots and
the holding in abeyance of further action on said papers until Civil Case No. 79371 shall have been
terminated. 15 In addition, on August 10, 1977, private respondents submitted to the Court a
copy of the decision in Civil Case No. 79371 of the Court of First Instance of Manila, dated April
28, 1977, declaring the letter decision of the Office of the President dated October 4, 1968 and its
letter order of February 27, 1970 as null and void, and declaring private respondents Hernando,
Teodoro, Pablo, Renato and Bonifacio, all surnamed Rivera, as qualified applicants of the
questioned lots. 16
Moreover, in the present case the decision is not yet final but became executory by reason of the
very act of herein petitioners in not filing a supersedeas bond necessary to stay execution pending
appeal as required by Section 8, Rule 70 of the Rules of Court. Herein petitioners could have
prevented the execution of said decision by simply complying with the rules but they opted not to
do so, hence they have only themselves to blame.
On the issue of jurisdiction, it is the contention of petitioners that the Municipal Court of Candaba
has no jurisdiction over the ejectment case for two reasons, namely, (1) a civil case for annulment
of the decision of the Office of the President is still pending final determination in the Court of First
Instance of Manila, and (2) there was no compliance with Presidential Decree No. 316 requiring
prior referral of the ejectment case to the Department of Agrarian Reform.
We reject these pretensions.
Firmly settled is the rule that a municipal court has jurisdiction over forcible entry or unlawful
detainer cases even if the ownership of the property is in disputed. 17 A resum of the basic legal
principles in point would be apropos.
In an action for forcible entry and detainer, the main issue is one of priority of possession. The
legal right thereto is not essential to the possessor's cause of action, for no one may take law into
his own hands and forcibly eject another or deprive him of his possession by stealth, even if his
title thereto were questionable or actually disputed in another case. 18 If the plaintiff can prove
prior physical possession in himself, he may recover such possession even from the owner, but on
the other hand, if he cannot prove such prior physical possession, he has no right of action for
forcible entry and detainer even if he should be the owner of the property. 19
An action for recovery of possession is totally distinct and different from an action for recovery of
title or ownership. In fact, a judgment rendered in a case for recovery of possession is conclusive
only on the question of possession and not that of ownership. It does not in any way bind the title
or affect the ownership of the land or building. 20 Section 7 of Rule 70 expressly states that: : nad
"The judgment rendered in an action for forcible entry or detainer shall be effective with respect
to the possession only and in no wise bind the title or affect the ownership of the land or building.
Such judgment shall not bar an action between the value parties respecting title to the land or
building, nor shall it be held conclusive of the fact therein found in a case between the same
parties upon a different cause of action not involving possession."
We have held that in giving recognition to the action of forcible entry and detainer the purpose of
the law is to protect the person who in fact has actual possession; and in case of controverted
right, it requires the parties to preserve the status quo until one or the other of them sees fit to
invoke the decision of a court of competent jurisdiction upon the question of ownership. It is
obviously just that the person who has first acquired possession should remain in possession
pending this decision; and the parties cannot be permitted meanwhile to engage in a petty
warfare over the possession of the property which is the subject of dispute. To permit this would
be highly dangerous to individual security and disturbing to social order.
Therefore, where a person supposes himself to be the owner of a piece of land and desires to
indicate his ownership against the party actually in possession, it is incumbent upon him to
institute an action to this end in a court of competent jurisdiction; and he cannot be permitted, by
invading the property and excluding the actual possessor to place upon the latter the burden of
instituting an action to try the property right. 21 In no case may possession be acquired through
force or intimidation as long as there is a possessor who objects thereto. He who believes that he
has an action or a right to deprive another of the holding of a thing, must invoke the aid of the
competent court, if the holder should refuse to deliver the thing. 22 When a person is in
possession of the land and has maintained that possession for years, he cannot be forcibly
dispossessed thereof, even by the owner. 23
Further, the authority given to the Bureau of Lands over the disposition of public lands does not
exclude the courts from their jurisdiction over possessory actions, the public character of the land
notwithstanding. The exercise by the courts of such jurisdiction is not an interference with the
alienation, disposition and control of public lands. 24 The determination of the respective rights or
rival claimants to public lands is different from the determination of who has the actual possession
or occupation with a view to protecting the same and preventing disorder and breaches of the
peace. A judgment of the court ordering restitution of a parcel of land to the actual occupant, who
has been deprived thereof by another through the use of force or another illegal manner, can
never be prejudicial interference with the disposition or alienation of public lands. On the contrary,
if courts were deprived of jurisdiction over the cases involving conflicts of possession, the threat of
judicial action against breaches of peace committed on public lands would be eliminated, and a
state of lawlessness would probably be produced between applicants, occupants, or squatters,
where force or might, not right or justice, would rule. 25
It is, therefore, clear that the municipal court correctly assumed jurisdiction over the case below
as the complaint filed before it sufficiently avers that private respondents seek to recover
possession of the lots from petitioners. The pendency of Civil Case No. 79371, wherein the
question of ownership was raised, is of no moment. Pending final adjudication of ownership, the
municipal court has jurisdiction to determine in the meantime the right of possession over the
land. 26
Prior referral of this case to the Department of Agrarian Reform under the provisions of Section 2
of Presidential Decree No. 316, in relation to Presidential Decree No. 27, is not necessary. The
said laws are not applicable to the case at bar. There is here no allegation in the pleadings nor
any showing in the records that a tenancy relation exists between petitioners and private
respondents. Both groups are claiming a right of possession in the concept of an owner. The
referral provisions of Presidential Decree No. 316 apply only in cases wherein the parties are
landlords and tenants and not when they are applicants of a public land claiming preferential right
over it, as in this case.
As we ruled in Castro, et al. vs. Court of Appeals, et al.: 27
". . . for the lands subject of the action to come under Operation Land Transfer under Pres. Decree
No. 27, there must first be a showing that they are tenanted lands and for the action to come
within the referral provisions of Pres. Decree Nos. 316 and 946, it must first be established that
the action involves tenants. The aforecited decrees specifically speak of 'tenant-farmer',
'sharecrop or lease tenancy', 'tenant', and 'tenant-tiller'."
WHEREFORE, the instant petition is hereby DISMISSED and the writs prayed for are DENIED. The
temporary restraining order issued by the Court on May 16, 1975 is hereby lifted. : nad
SO ORDERED.
Melencio-Herrera, Paras, Padilla and Sarmiento, JJ., concu

THIRD DIVISION
[G.R. No. 105912. June 28, 1999]
SPOUSES TEOFILO C. VILLARICO and MAXIMA A. FAUSTINO, petitioners, vs. HONORABLE
COURT OF APPEALS, REPUBLIC OF THE PHILIPPINES and MARCOS CAMARGO,
respondents.
DECISION
PURISIMA, J.:
This is a petition for review on certiorari of the decision of the Court of Appeals[1] in CA-G.R. CV
No. 22608, affirming the decision of Branch 22 of the Regional Trial Court, Malolos, Bulacan, which
dismissed the application for confirmation of title in LRC Case No. 604-V-77.
The facts that matter are as follows:
On May 31, 1977, an application for confirmation of title was filed by the spouses, Teofilo Villarico
and Maxima Villarico, over a 1,834 square meter parcel of land in Ubihan, Meycauayan, Bulacan,
docketed as LRC Case No. 604-V-77 before the then court of First Instance of Bulacan. Among others,
applicants alleged that they are the absolute owners of subject property, having bought the same from
the spouses, Segundo Villarico (Teofilo's father) and Mercedes Cardenas, that they and their
predecessors-in-interest have been in actual, open, adverse and continuous possession thereof for more
than thirty (30) years, that they are not aware of any mortgage or encumbrance thereon nor of any
person having an estate or interest therein, and that the land involve is not within the forest zone or
government reservation.
The application for land registration at bar was opposed by Marcos Camargo, who claims to be the real
owner thereof.[2] The Government interposed its opposition, through the Director of Forestry (now
Director of Forest Management), averring that the land in question is part of the public domain, within
the unclassified area in Meycauayan, Bulacan per LC Map No. 637 dated March 1, 1927 of the Bureau
of Forest Management and consequently, not available for private appropriation.
On May 23, 1989, the trial court of origin dismissed the case, ratiocinating thus:
"It is well settled in this jurisdiction that a certificate of title is void when it covers property of the
public domain classified as forest or timber and mineral lands. Any title thus issued on non-disposable
lots, even in the hands of an innocent purchaser for value, should be cancelled (Lepanto Consolidated
Mining vs. Dumyang, L-31666, April 30, 1979). There being no concrete evidence presented in this
case that the property in question was ever acquired by the applicants or by the private oppositor (as
attested to by the proceedings of B.L. Claim No. 38 (N) before the Bureau of Lands) or by their
respective predecessors-in-interest either by composition of title or by any other means for the
acquisition of public lands, the property in question must be held to be part of the public domain,
especially so that the private parties had not presented any Certification from the Bureau of Forestry
attesting to the fact that the subject property is no longer within the unclassified region of Meycauayan,
Bulacan. Thus, if the land in question still forms part of the public forest, then, possession thereof,
however long, cannot convert it into private property as it is within the exclusive jurisdiction of the
Bureau of Forestry and beyond the power and jurisdiction of the cadastral court to register under the
Torrens System (Republic vs. Court of Appeals, 89 SCRA 648).
WHEREFORE, premises considered, let this case be, as it is hereby DISMISSED.
No pronouncement as to costs.
SO ORDERED."[3]
Therefrom, petitioners appealed to the Court of Appeals, which came out with a judgment of
affirmance on June 26, 1992. Respondent court affirmed the findings of facts below, holding that
subject parcel of land is within the public domain not available for private appropriation.
Undaunted, petitioners found their way to this court via the present petition for review on certiorari;
placing reliance on the assignment of errors, that:
I
THE HONORABLE COURT OF APPEALS ERRED IN SUSTAINING THE FINDINGS OF THE
TRIAL COURT THAT BEFORE 1948 THERE WAS NO DOCUMENTATION IN FAVOR OF
EITHER PARTIES.
II
THE HONORABLE COURT OF APPEALS ERRED IN SUSTAINING THE FINDING OF THE
TRIAL COURT THAT BUENAVENTURA VILLARICO APPARENTLY DIED PRIOR TO 1914.
III
TRIAL COURT THAT TAX DECLARATION NO. 3912 IN THE NAME OF BUENAVENTURA
VILLARICO COULD HAVE BEEN CONTRIVED SENSING THAT A CONFLICT OVER THE
PROPERTY IN THE NEAR FUTURE WAS INEVITABLE.
IV
TRIAL COURT THAT THERE IS NO CONCRETE EVIDENCE PRESENTED TO THE EFFECT
THAT THE PROPERTY IN QUESTION WAS EVER ACQUIRED BY THE APPLICANT OR BY
THE PRIVATE OPPOSITOR OR BY THEIR RESPECTIVE PREDECESSORS-IN-INTEREST
THROUGH LAWFUL MEANS FOR THE ACQUISITION OF PUBLIC LANDS.
V
THE HONORABLE COURT OF APPEALS AND THE TRIAL COURT ERRED IN DISMISSING
THE CASE AT BAR.
The appeal is without merit and cannot prosper.
It bears stressing that the first, second, and third assigned errors relate to factual and evidentiary matters
which the Supreme Court does not inquire into in an appeal on certiorari.[4] It is well-settled that in a
petition for review on certiorari as a mode of appeal under Rule 45 of the Rules of Court, only
questions of law may be raised.[5] The Supreme Court is not a trier of facts.[6] Findings of fact by the
trial court and the Court of Appeals are binding on the Supreme Court.[7]
In the case under consideration, the Court discerns no compelling reason to reverse such findings
arrived at by the trial court and affirmed by the respondent court, absent any showing of any error,
mistake, or misappreciation of facts. Records on hand indicate that the decisions under attack accord
with the law and the evidence.
As aptly observed by the respondent court, the primordial issue here is the character or classification of
the property applied for registration -- whether or not the same still forms part of the public domain. On
this crucial question, the trial court a quo and the Court of Appeals correctly adjudged the area at stake
as within the unclassified forest zone incapable of private appropriation. Accordingly, the Court of
Appeals held:
"xxx In the case at bar, as found by the court a quo, there has been no showing that a declassification
has been made by the Director of Forestry declaring the land in question as disposable or alienable.
And the record indeed discloses that applicants have not introduced any evidence which would have
led the court a quo to find or rule otherwise. xxx
And so, considering the foregoing, possession of the land in question by the applicants and/or their
predecessors-in-interest even for more than 30 years, as they allege, cannot convert the land into
private property capable of private appropriation." (Court of Appeals' Decision, pp. 4-5)
Indeed, forest lands cannot be owned by private persons.[8] Possession thereof, no matter how long,
does not ripen into a registrable title. The adverse possession which may be the basis of a grant of title
or confirmation of an imperfect title refers only to alienable or disposable portions of the public
domain.[9]
WHEREFORE, the petition is DENIED and the Decision of the Court of Appeals in CA-G.R. CV No.
22608 AFFIRMED in toto. No pronouncements as to costs.
SO ORDERED.
Vitug, Panganiban, and Gonzaga-Reyes, JJ., concur.
Romero, J., (Chairman), abroad on official business.
THIRD DIVISION
FLAVIANA LIM CAJAYON and G.R. No. 149118
CARMELITA LIM CONSTANTINO,
Petitioners,
Present:
QUISUMBING, J.,
Chairman,
- versus - CARPIO,
CARPIO-MORALES, and
TINGA, JJ.
SPOUSES SANTIAGO and Promulgated:
FORTUNATA BATUYONG,
Respondents.
February 16, 2006
x------------------------------------------------------------------------------------x
DECISION
TINGA, J.:
This petition for review on certiorari challenges the two rulings of the Court of
Appeals in CA G.R. SP. No. 50952. The first decision dated 27 November 2000[1]
upheld the ruling of the Regional Trial Court (RTC) affirming the Metropolitan
Trial Court (MeTC) order for ejectment, while the Resolution dated 5 July 2001[2]
denied the motion for reconsideration.
First, the factual background of the case.
Flaviana Lim Cajayon and Carmelita Lim Constantino (petitioners) and Isagani P.
Candelaria (Candelaria) were co-owners of a 260-square meter lot, then covered
by Transfer Certificate of Title (TCT) No. C-10870. On 1 February 1995, a
partition agreement[3] was entered into by petitioners and Candelaria, wherein Lot
6-A, Psd 00-034294, containing an area of 100 square meters, more or less, was
adjudicated to Candelaria, while Lot 6-B, Psd 00-034294, containing an area of
160 square meters, more or less, was given to petitioners. TCT No. C-10870 was
cancelled and TCT No. 288500 was issued in the name of petitioners.
On 30 May 1995, Candelaria sold his property, including the improvements

thereon, to Spouses Santiago and Fortunata Batuyong (respondents). TCT No.
294743 was issued in their names over the said parcel of land.[4]
On 21 May 1996, petitioners started the construction of a seven (7)-door

bungalow-type building that allegedly intruded into the lot of respondents. At the
instance of respondents, petitioners were summoned by barangay officials to a
meeting on the matter. It was then agreed upon that petitioners would defer the
construction work pending the result of a relocation survey to be conducted by a
government surveyor.
A verification survey was conducted by Geodetic Engineer Florentina C. Valencia.

She submitted a report dated 12 November 1996 which yielded the findings that
Lot 6-A (Candelarias) and Lot 6-B (petitioners) were not correctly positioned
geographically on the ground with respect to TCT No. 294743. Thus, as per
survey, sub-lot B with an area of 10.43 square meters serves as right of way of Lot
6-B (petitioners lot) while sub-lot C with an area of 10.18 square meters was the
portion of Lot 6-A (respondents lot) presently occupied by petitioners.[5]
Despite the delineation of said boundaries, petitioners proceeded with the

forestalled construction, allegedly occupying at least 20.61 square meters of
respondents lot, including the portion being used as right of way for petitioners
tenants.
After respondents secured a permit from the barangay and the Caloocan City
Building Official to fence their lot, they made demands to petitioners to vacate the
encroached portion but to no avail. Respondents brought the matter to the
barangay but no amicable settlement was reached. A Certificate to File Action was
issued to them by the Barangay Lupon Tagapayapa. A final demand was made
through a letter dated 20 May 1997 upon petitioners to vacate the encroached
premises. Petitioners, however, vehemently refused to vacate and surrender the
premises.
On 14 April 1997, respondents filed an ejectment case against petitioners before

the Metropolitan Trial Court[6] (MeTC) of Caloocan City, docketed as Civil Case
No. 23359. In a Decision[7] dated 2 July 1998, the MeTC ordered petitioners to
vacate and surrender possession of a portion of respondents lot and to pay P500.00
per month as fair rental value from May 1996 until the premises is finally vacated,
plus P5,000.00 as attorneys fees and costs of the suit.[8]
On appeal, the RTC[9] affirmed the judgment of the MeTC.[10] In doing so, the
RTC debunked the three (3) arguments posed by petitioners. First, contrary to
petitioners submission, the RTC ruled that the MeTC had jurisdiction over the
instant complaint. The RTC noted that the issue of jurisdiction was never raised in
the court a quo while on the other hand, petitioners actively participated in the
proceedings therein by filing their Answer and Position Paper. Evidently,
petitioners raised the question of jurisdiction as a mere afterthought as he did so
only after he obtained an adverse judgment. Second, the allegations of the
complaint sufficiently averred a case for ejectment which the RTC found to be
within the jurisdiction of the court a quo. Third, the trial court ruled that
petitioners categorically recognized the validity of the verification survey done by
Engineer Valencia, as shown by the presence of petitioner Flaviana Cajayon
during the verification survey and setting of monuments per survey report.[11]
Petitioners filed a motion for new trial and/or reconsideration but it was denied in
an Order[12] dated 12 January 1999 of the RTC. They elevated the case to the
Court of Appeals by way of petition for review under Rule 42 of the Rules of
Court. On 27 November 2000, the appellate court rendered a Decision[13]
dismissing the petition. Holding that the exclusive jurisdiction to try unlawful
detainer cases is vested with the MeTC, the appellate court ratiocinated, thus:
The complaint in the instant case establishes jurisdictional facts necessary to

sustain the action for unlawful detainer and the remedy it seeks is merely to
obtain possession of the controverted lot from respondents. Specifically, it alleges
that sometime on May 21, 1996, petitioners started construction works in the area
which intruded into a portion of respondents property; that the parties eventually
agreed to stop the construction subject to the result of a survey to be conducted
thereon; that a survey was conducted in the presence of the parties and a report
was submitted by Engr. Valencia on November 12, 1996, showing an
encroachment of about 20.61 square meters of respondents lot including that
portion being used as a right of way for petitioners tenants; that even after the
boundaries had been verified, petitioners resumed the construction on the area;
that despite verbal and written demands, the last of which was made on March
20, 1999, petitioners refused to vacate and surrender the encroached area. Surely,
respondents resort to unlawful detainer when petitioners failed to leave the
controverted premises upon demand is in order.[14]
The appellate court also held that the fact that petitioners houses already stood on
the controverted lot long before the purchase of the land by respondents failed to
negate the case for ejectment.[15] The appellate court emphasized that prior
physical possession is not a condition sine qua non in unlawful detainer cases. The
court likewise sustained the RTC findings on the validity of the verification survey
conducted by Engineer Valencia that petitioners have encroached on a 20.61
square meter portion of respondents lot.
On 5 July 2001, the Court of Appeals issued a Resolution[16] denying petitioners

Motion for Reconsideration.
Petitioners now come to us via the present petition, submitting as issues the
question of jurisdiction and the weight to be accorded to the verification survey
results.[17]
Petitioners anchor their petition on the court a quos lack of jurisdiction over the
instant suit. The averments in the complaint do not make out a case for ejectment,
they claim, as their entry into the disputed lot was not made by force, intimidation,
threat, strategy or stealth. Neither was their possession of the disputed property by
virtue of the tolerance of respondents or the latters predecessor-in-interest.
Respondents counter that the jurisdictional elements necessary to maintain an

action for unlawful detainer clearly obtain in the case at bar, namely: (a) after the
parties agreed to the conduct of a survey by a government surveyor and after the
survey, it was determined that the structures introduced by herein petitioners have
encroached a portion of herein respondents lot; (b) notices to vacate and surrender
of possession of the encroached portion were made to petitioners, the last being on
March 20, 1997; and (c) the suit was instituted on April 11, 1997 or within one (1)
year from date of last demand.[18]
Respondents also stress that possession of the premises by petitioners took place
more than one year before the filing of the complaint and the absence of an
allegation in the complaint that such possession of the disputed portion was merely
by virtue of respondents tolerance does not deprive the lower court of its original
and exclusive jurisdiction nor will it negate respondents action for unlawful
detainer.[19]
It is settled that jurisdiction of the court in ejectment cases is determined by the

allegations of the complaint and the character of the relief sought.[20]
The Complaint[21] filed by respondents (plaintiffs therein) alleged these material

facts:
2. That defendants and Isagani P. Candelaria were the former co-owners of a certain
piece of land located in Maypajo, Caloocan City containing an area of 260 square
meters, more or less, under TCT No. C-10870 issued by the Register of Deeds of
Caloocan City;
3. That on February 1, 1995, said co-owners subdivided this parcel of land by virtue of a
Partition Agreement wherein Lot 6-A, Psd 00-034294, containing an area of 100 square
meters, more or less, was given to Isagani P. Candelaria, while Lot 6-B, Psd 00-034294,
containing an area of 160 square meters, more or less, was given to defendants. A copy
of said Partition Agreement is hereto attached as Annex A;
xxx xxx xxx
5. That on May 30, 1995, Isagani P. Candelaria sold his share to the herein plaintiffs,
including the improvements thereon, in the sum of P100,000.00, under a Deed of
Absolute Sale x x x;
xxx xxx xxx
7. That sometime in May 21, 1996, defendants started construction works in the
area and intruded into the lot owned by the plaintiffs causing the latter to protest
and report the matter to the barangay authorities;
8. That on the same day, the parties were summoned to appear before the Barangay
Chairman wherein defendants agreed to stop the construction works, and in a subsequent
conference on June 7, 1996, they agreed to defer the matter pending the result of a
survey to be conducted by a government surveyor;
xxx xxx xxx
11. That the following day, September 5, 1996, Geodetic Engineer Florentina C.
Valencia conducted a survey of the aforesaid property and placed the concrete
monuments thereon in the presence of plaintiffs and defendants;
12. That on November 12, 1996, a verification survey report was submitted by Geodetic
Engineer Florentina C. Valencia together with the survey verification plan xxx;
13. That despite defendants knowledge of the property boundary, and despite
repeated serious objections from plaintiffs, defendants proceeded to construct a
seven-door bungalow-type semi-concrete building, occupying at least 10.18 square
meters and another 10.43 square meters for the right of way, thus encroaching
upon at least 20.61 square meters of plaintiffs lot, and further demolishing
plaintiffs wall.
xxx xxx xxx
20. That despite repeated and continuous demands made by plaintiffs upon
defendants, both oral and written, the last being on March 20, 1997, defendants in
manifest bad faith, wanton attitude, and in a malevolent and oppressive manner
and in utter disregard of the property rights of plaintiffs, have failed and refused,
and still fail and refuse to vacate the same up to the present time x x x.[22]
From the above-quoted allegations taken in tandem with the textbook
distinctions between forcible entry and unlawful detainer, it is clear that the
complaint makes out a case for forcible entry, as opposed to unlawful detainer. The
distinctions between the two forms of ejectment suits, are: first, in forcible entry,
the plaintiff must prove that he was in prior physical possession of the premises
until he was deprived thereof by the defendant, whereas, in unlawful detainer, the
plaintiff need not have been in prior physical possession; second, in forcible entry,
the possession of the land by the defendant is unlawful from the beginning as he
acquires possession thereof by force, intimidation, threat, strategy or stealth, while
in unlawful detainer, the possession of the defendant is inceptively lawful but it
becomes illegal by reason of the termination of his right to the possession of the
property under his contract with the plaintiff; third, in forcible entry, the law does
not require a previous demand for the defendant to vacate the premises, but in
unlawful detainer, the plaintiff must first make such demand, which is
jurisdictional in nature.[23]
Respondents had been in prior physical possession of the property in the concept
of owner prior to petitioners intrusion on 21 May 1996. When petitioners
encroached upon respondents lot and started construction works thereon the latter
was dispossessed of the area involved. Despite various demands by respondents to
vacate, petitioners obstinately refused to do so. Clearly, petitioners entry into the
said property was illegal from the beginning, precluding an action for unlawful
detainer.
On the other hand, to establish a case of forcible entry, the complaint must allege
that one in physical possession of a land or building has been deprived of that
possession by another through force, intimidation, threat, strategy or stealth.[24] It
is not essential, however, that the complaint should expressly employ the language
of the law. It would be sufficient that facts are set up showing that dispossession
took place under said conditions.[25]
The words "by force, intimidation, threat, strategy or stealth" include every
situation or condition under which one person can wrongfully enter upon real
property and exclude another, who has had prior possession thereof. To constitute
the use of "force" as contemplated in the above-mentioned provision, the
trespasser does not have to institute a state of war. Nor is it even necessary that he
use violence against the person of the party in possession. The act of going on the
property and excluding the lawful possessor therefrom necessarily implies the
exertion of force over the property, and this is all that is necessary.[26] In the case
at bar, petitioners encroachment into respondents property in an oppressive and
malevolent manner, coupled with their refusal to vacate the premises despite
knowledge of the proper boundaries and heedless of respondents serious
objections, indelibly connotes force within the meaning of the law.
Petitioners contend that while they concede they might have intruded on
respondents property, the action is barred by prescription because it was filed more
than one (1) year after the occurrence of the alleged intrusion. The contention is
baseless. Section 1, Rule 70 of the Rules of Court allows a plaintiff to bring an
action in the proper inferior court for forcible entry or unlawful detainer within
one (1) year, respectively, after such unlawful deprivation or withholding of
possession. In forcible entry, the one-year period is counted from the date of actual
entry on the land.[27]
Records show that the ejectment suit was instituted on 11 April 1997. Petitioners
actual entry into the property, according to the complaint, took place on 21 May
1996. Thus, the suit was filed well within the one (1)-year period mandated by
law.
As a collateral issue, petitioners claim that they are at least entitled to the rights of
a builder in good faith on the premise that they are not the owners of the property
encroached upon.
This contention is not tenable. 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.
[28] In the instant case, when the verification survey report came to petitioners
knowledge their good faith ceased. The survey report is a professionals field
confirmation of petitioners encroachment of respondents titled property. It is
doctrinal in land registration law that possession of titled property adverse to the
registered owner is necessarily tainted with bad faith. Thus, proceeding with the
construction works on the disputed lot despite knowledge of respondents
ownership put petitioners in bad faith.
Now, the second issue. Petitioners question the evidentiary weight of the
verification survey report. They point out that since the survey was a unilateral act
of respondents, done as it was without their consent, they should not be bound by
its findings.[29]
In raising the issue, petitioners are in effect asking this Court to reassess the
factual findings of the courts below, a task which is beyond this Courts domain.
Factual matters cannot be raised in a petition for review on certiorari. This Court at
this stage is limited to reviewing errors of law that may have been committed by
the lower courts.[30] We find no ample reason to depart from this rule, more so in
this case where the Court of Appeals has affirmed the factual findings of the RTC
and the MeTC.
Moreover, there is a presumption that official duty is regularly performed,[31] i.e.,

government officials who perform them are clothed with the presumption of
regularity,[32] as the courts below pointed out.[33] In this case, the verification
survey was conducted by a government functionary.
Even prescinding from the presumption of regularity, what appears on

record is that the verification survey was conducted with the
agreement of both parties and in their presence. That was the finding
made by the courts below and affirmed by the appellate court without
any wrinkle.[34]
WHEREFORE, based on the foregoing, this Petition is DENIED and the assailed
Decision AFFIRMED. Costs against petitioners.
SO ORDERED.
SUPREME COURT
Manila
EN BANC
G.R. No. 5730 September 9, 1910
REGINO SALACUP, plaintiff-appellant,
vs.
SOTERO RAMBAC, defendant-appellee.
Antonio Adiarte, for appellant.
Iñigo Bitanga, for appellee.
TORRES, J.:
On July 22, 1908, counsel for Regino Salacup filed a complaint in the Court of First Instance of Ilocos
Norte, alleging that Salacup was the owner, by title arising out of quiet, peaceful, and uninterrupted
possession for more than thirty years, of rural real property lying toward Nambaran on the north and
toward Mumud, of the pueblo of Bacarra, Ilocos Norte, on the south; that the said land has a perimeter
of 445 meters and produces 10 uyones of palay, approximately, per annum, and was formerly bounded
on the north by the property of Genaro Galam and Roman Galam, now by that of Gregorio Bulusan and
Graciano Galam; on the east, formerly by that of Andres Dacuycuy and Ciriaco Visco, now by that of
Gregorio Bulusan; on the south, formerly by that of the said Visco, now by that of Hilario Magaoay;
and on the west, formerly by that of Alvaro Galapon and Placido Butac, now by that of Antonio Acob;
that for the past five years the defendant had been arbitrarily and illegally detaining a portion of the
land in question, measured from its southern side, which part produces yearly about 1 uyon, 1 baar and
1 manojo of palay; that by such detention the plaintiff had suffered loss and damage to the extent of 5
uyones, 5 baares, and 5 manojos of palay, which he failed to gather during the said five years, as the
product of the said part of his land withheld from him as before stated, which product should be worth
P55.50, at P10 an uyon. The complaint concluded by asking that judgment be rendered in plaintiff's
favor, declaring the said property to be of his exclusive ownership, and sentencing the defendant to
make immediate delivery thereof and to pay damages in the amount of 5 uyones, 5 baares, and 5
manojos of palay, or their cash value, P55.50, and the costs.
Defendant's counsel in his answer denied each and all of the allegations made in the preceding
complaint, and set up, as a special defense, that the defendant was the true owner of the property
described therein and had been in possession of the same for more than twenty years, which he offered
to prove at the trial.
The case having come to trial and testimony having been furnished by both sides, the documents
exhibited being attached to the record, the judge, on July 26, 1909, found that the complaint had not
been substantiated and absolved the defendant, without special finding as to costs. The plaintiff, on
being notified of this judgment, took exception and moved for a new trial, which motion was overruled
and exception was taken by the appellant, who duly filed the proper bill of exceptions which was
certified and forwarded to the clerk of this court with a transcript of the evidence.
The purpose of this litigation is to recover rural property, unduly usurped some five years since,
through the institution of the proper action for recovery of title.
In order that an action for the recovery of title may prosper, it is indispensable, in accordance with the
precedents established by the courts, that the party who prosecutes it fully prove, not only his
ownership of the thing claimed, but also the identity of the same.
The plaintiff, Regino Salacup, alleged that he had possessed the land described in his complaint for
more than twenty years, and for the purpose of proving his ownership exhibited a certified copy of a
possessory information duly recorded in the registry of property of the district of Ilocos Norte, on the
27th of March, 1895, which title does not appear to have been impugned, nor assailed as invalid.
A possessory information title has the same force and effect as have all other titles recognized by law,
and a possessory information recorded in the registry of property is prima facie proof that the possessor
of the land to which it relates is the owner thereof. (Inchausti & Co. vs. The Commanding General of
the Division of the Philippines, 6 Phil., Rep., 556; Baldovino vs. Amenos, 9 Phil. Rep., 537.)
From the context of the said possessory information it is perfectly well proven that the land which was
usurped by the defendant five years ago is included in the said information and is a part of the first
parcel mentioned therein, which land is situated between the two places called Nambaran, to the north,
and Mumud, to the south, of the district of Bacarra, and its old boundaries agree with those given in the
complaint and by plaintiff's witnesses in their testimony, as well as with those contained in the record
of the ocular inspection.
This inspection was made, it is true, at the request of the defendant's attorney. The deputy sheriff and
the litigating parties with their respective attorneys went to the place where the property in question is
situated and the deputy sheriff proceeded to measure the land, the southern part of which it is claimed
was usurped by the plaintiff. This measurement shows the present boundaries to be, to the north, the
properties of Gregorio Bulusan and Graciano Galan; to the east, those of the said Bulusan and Hilario
Magaoay; to the south, that of the said Magaoay, and to the west, that of Antonio Acob. It was also
ascertained that the property has a perimeter of 438 meters. The part of the said land alleged to be
unlawfully withheld by the defendant having likewise been measured, it was found that its boundaries
are, to the north, the property of Regimo Salacup; to the east and south, that of Hilario Magaoay, and to
the west, that of Alvaro Galapon. These measurements confirm the averments made by the plaintiff in
his complaint, that the defendant usurped the southern part of plaintiff's land. The property in question
claimed by the defendant has a perimeter of 202 meters, and according to the report of the deputy
sheriff who carried out the above-mentioned proceedings, which report was made pursuant to an order
issued by the court and an agreement by the attorneys for both litigants, the said land held by the
defendant, of 202 meters perimeter, is included within the 438 meters of plaintiff's land, this lesser
parcel being situated in the southern part of the greater one designated by the plaintiff.
From the foregoing facts it is clearly shown that the plaintiff legally possessed the said real property
that was usurped under claim of ownership, as proved by the possessory information entered in the
registry of property, which he exhibited. The identity of the land unlawfully held by the defendant has
also been proved in a conclusive manner, and as the said defendant has in nowise substantiated his
claim that he is the owner of the land in question, the action instituted for the recovery of title is
unquestionably proper and restitution must be made of the property so unduly held, together with the
products collected therefrom or their value, inasmuch as it was proven at the trial that the defendant
usurped the said land and was unlawfully holding it without either title or good reason, and
consequently he could not acquire the status of owner in good faith, in accordance with the provisions
of article 433 of the Civil Code.
It is, therefore, incontrovertible that the plaintiff is the owner of the land in question, and accordingly
he has a right of action against the holder and possessor of the said land to recover the same, pursuant
to the provisions of article 348 of the Civil Code.
For the foregoing reasons, it is proper, in our opinion, with a reversal of the judgment appealed from, to
condemn, as we do hereby condemn the defendant, Sotero Rambac, to restore the aforesaid part of the
land unlawfully held, measuring some 202 meters in perimeter, to Regino Salacup, who is declared to
be the owner thereof, together with 5 uyones, 5 baares, and 5 manojos of palay or their value, P55.50.
No special findings is made as to the costs in either instance.
Arellano, C.J., Johnson, Moreland and Trent, JJ., concur.
SUPREME COURT
Manila
EN BANC
G.R. No. L-8574 December 27, 1913
VICTORIANO SANTOS, and ANDREA ESPINOSA, plaintiffs-appellees,
vs.
ELIAS ESTEJADA, ET AL., defendants-appellants.
Benito Gimenez Zoboli, for appellants.
Crispin Oben, for appellees.
TORRES, J.:
This appeal was raised by counsel for the defendants, through bill of exceptions, from the judgment
rendered on October 8, 1912, by the Honorable Vicente Jocson, judge, whereby he held the land in
question, bounded on the north of the Balian River and by the property of Elias Estejada, on the south
by that of Pedro Sales and Maximo Heredia, on the east by that of Elias Estejada, and on the west by
the Balian River, belonged to the plaintiffs; without special finding as to costs.
On January 13, 1912, counsel for Victoriano Santos and Andrea Espinosa filed a complaint with the
Court of First Instance of Laguna alleging that they had been in the peaceable and uninterrupted
possession, for the past twenty years, up to October 16, 1911, as owners, of a tract of unirrigated land
of about 50 ares and 48 centiares, worth P700, sustaining 160 coco palms, situated in the barrio of
Bullero, of the pueblo of Pangil, Laguna, and bounded on the north by land of Pedro Sales, on the east
by land of the defendants, and on the west by the said Balian River; that, up to October 16, 1911, they
had been in peaceable and uninterrupted possession of the property, and that the defendants had, until
then, as tenants-on-shares of the plaintiffs on the said land, recognized the latter to be the owners of the
property, but from that date appropriated the same to themselves and refused to recognize the plaintiffs
right of ownership, thus depriving the latter of their possession of the said property, whereby they had
suffered losses and damages to the extent of P300. Said counsel therefore prayed that judgment be
rendered holding the land to belong to the plaintiffs, and sentencing the defendants to deliver the same
to the plaintiffs and pay the sum stated, as an indemnity for losses and damages, and the costs.
Counsel for the defendants admitted in his answers the first paragraph of the complaint and denied
generally and specifically each and all of the others. As a special defense he alleged that the land
referred to in paragraph 2 of the complaint was acquired through the purchase in 1863 by the spouses
Isabelo Ages and Justa Acaylar, from whom it was inherited by their grandson, Domingo Balugay, the
present owner and possessor, and that the defendants were mere tenants-on-shares or caretakers of the
said Balugay, with respect to the land in question. He therefore asked that the defendants be absolved
from the complaint, with the costs against the plaintiffs.
By a written petition of March 29, 1912, counsel for the plaintiffs requested the court to order the
inclusion of Domingo Balugay as a party-defendant in the case, and to allow an amendment to the
complaint by adding at the end of paragraph 4 thereof the following words: "under the pretext that they
are simple tenants-on-shares or caretakers of one Domingo Balugay, who claims to be the present
owner and possessor of the said land."
Counsel for the defendants, by written motion of April 2, likewise stated that he desired to amend his
previous written answer so as to include therein the new defendant, Domingo Balugay.lawphil.net
After the hearing of the case and the introduction of evidence by the parties, the court pronounced the
judgment cited, to which counsel for the defendants excepted and moved for a new trial. This motion
was denied, the appellants excepted and presented the proper bill or exceptions, which was approved
and forwarded to this court.
It is sought, through an action for the recovery of possession brought by the plaintiffs, to obtain an
express declaration from the courts that the land concerned in the complaint is the exclusive property of
the plaintiffs, which allegation is denied by the defendants.
It is admitted in this suit that the defendants have been holding the said land, although the plaintiffs
claim that the defendants were and are in possession of it as tenants of theirs on shares; but the
defendants, in turn, allege that they are in charge of the said land as the tenants-on-shares of its owner,
Domingo Balugay, and deny that the land belongs to the plaintiffs, Santos and Espinosa.
So the question to be decided is: "Who is or are the owner or owners of the land in litigation? Its
present possessors are mere caretakers of Domingo Balugay, according to the defendants; and of the
plaintiffs, Victoriano Santos and Andrea Espinosa, according to them.
To decide this suit it must be determined which of the two parties, Victoriano Santos and wife of
Domingo Balugay, is the lawful owner of the land in dispute, because the defendants, the Estejadas,
hold possession of the land either in the name of the plaintiffs, as the latter's witnesses affirm, or in the
name of the defendant Balugay, according to his witnesses.
Were it solely a question of a mere right of possession, it is undeniable, notwithstanding the
contradictory evidence given by both parties, that, in consideration of the weight and merits of that
evidence and of the proved fact that the defendants, the Estejadas, are in actual possession of the land
in litigation, this suit should be decided in favor of the defendant Balugay as the present possessor
holding through them; but, owing to the nature of the action brought and of the petition made by the
plaintiffs in their complaint, it is imperative to decide to whom the control; and ownership of the said
land lawfully belong.
From the evidence presented by counsel for the plaintiffs it does not follow that they are the owners
and proprietors of the disputed land, since the document Exhibit A, translated on page 7 of the record,
does not constitute a title through which they had may have lawfully acquired ownership of said land.
Pursuant to the agreement contained in the said document and made between Silverio Adan and
Petrona Dionisio, the owners of the land therein mentioned, in consideration of the sum of ten pesos
which they received from the spouses Victoriano Santos and Andrea Espinosa, these two latter formed
a partnership with the two former for the purpose of utilizing the coffee plants and coconut trees
planted on the said land, the products from which there to be divided among the partners, under the
obligation on the part of the owners of the land to take care of the crops thereon, under penalty, for
failure so to do, of forfeiting all right to the products thereof.
This contract, as may be seen by its contents, did not transfer the ownership of the property to the
parties Victoriano Santos and Andrea Espinosa, neither does it show that these spouses had any legal
reason to support their possession of the said land. The evidence, then, oral and documentary,
introduced by the plaintiffs does not prove in any wise that they were the owners of the land in
litigation. The testimony of their witnesses tends only to establish that the defendants, the Estejadas, the
present possessors of the said land, hold the same in the name of the plaintiffs; but this is denied by the
defendants, who allege that they are in possession of the land as tenants- on-shares and caretakers for
Domingo Balugay.
It is true that Balugay did not prove, by the documents which he presented to substantiate his
allegations, that he acquired the said land through inheritance by having succeeded to the rights of the
original owners, Isabelo Ages and Justa Acaylar, his grandparents and ascendants; but it is an
unquestionable fact that the documents exhibited by the defendants were delivered to Domingo
Balugay in his capacity as heir of his aforesaid ascendants, by Bruno Acaylar, the testamentary
executor and administrator of the estate of the deceased Justa Acaylar, an ascendant of the defendant
Balugay and the original owner of the land concerned. Therefore the possession of the said land which
Balugay has been enjoining, through the other documents Elias and Maria Estejada, is that of an owner
and not of a mere precarious holder.
In the decision rendered in the case of Compañia General de Tabacos de Filipinas vs. Miguel Topiño et
al., (4 Phil. Rep., 33), the rule was laid down that: "In an action of ejectment the plaintiff seeking to
recover possession of land must recover upon the strength of his own title rather than upon the
weakness of the title of the defendant, and the burden of showing his title rests upon him who asserts
it."1awphi1.net
In the decision of Belen Vs. Belen (13 Phil. Rep., 202), it is stated: "Mere possession of the thing
claimed is sufficient to insure respect for the present holder, while no other person appears to show and
prove a better right, in accordance with the doctrine of the courts."
In the same decision of the following was likewise laid down: "If the plaintiff, upon whom rests the
burden of proving his cause of action, fails to show in a satisfactory manner the facts upon which he
bases his claim, the defendant is under no obligation to prove his exceptions or defense."
In view of the fact that the plaintiffs have not duly proved their title to the land actually occupied by the
defendants, the Estejadas, as the tenants-on-shares and representatives of Domingo Balugay, who is
found to be the lawful owner of the said land, although the proofs adduced by him are somewhat
deficient, there exists no legal ground upon which to deprive him of the possession he now enjoys as
owner.
For the foregoing reasons it is our opinion that, with reversal of the judgment appealed from, we
should, and we do hereby, absolve the defendants from the complaint filed by the plaintiffs; without
special finding as to costs.
Arellano, C.J., Johnson, Carson and Trent, JJ., concur.
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-22006 July 28, 1975
BASILIO PEREZ and PETRA MONTALBO, petitioners,

vs.
NICOLAS MENDOZA, MARGARITA MACALALAD and the HONORABLE COURT OF APPEALS, respondents.
Pedro T. Panganiban for petitioners.
Julio D. Enriquez, Sr. for respondents.
MUNOZ PALMA, J.:
Civil Case 689 of the Court of First Instance of Batangas was an action to quiet title over a piece of land filed on March 20, 1959, by spouses Basilio Perez and
Petra Montalbo with spouses Nicolas Mendoza and Margarita Macalalad as defendants. According to the complaint, the land in controversy is located in barrio
Dagatan, municipality of Taysan, Batangas, with an area of approximately 4,765 sq. meters, declared for taxation purposes in the name of the "Heirs of
Estanislao Montalbo", and is "bounded on the north by a school site, on the east by Calixto Flores, on the south by a creek, and on the west by a creek and the
land of Gregorio Mendoza." On the basis of evidence adduced by the parties, the trial court then presided by Hon. Lorenzo Relova rendered judgment on
February 19, 1962, dismissing the complaint and declaring the spouses Mendoza "to have a better right to the property in question."1
Spouses Perez elevated the Relova decision to the Court of Appeals which, however, affirmed in toto the findings of the court a quo, and declared that "upon the
evidence it has been shown by a great preponderance that the land in question belongs to the defendants."2
The case is now before Us on a petition for certiorari filed by spouses Perez.
The findings of fact both of the trial court and the Court of Appeals may be briefly summarized as follows:
The litigated parcel of land was originally part of a bigger tract owned by Estanislao Montalbo. When Estanislao died in 1918, his properties passed on to his
children Petra, Felisa, and Pedro all surnamed Montalbo, and because Pedro died single the two women remained as the only heirs. By mutual agreement Petra
and Felisa divided between themselves the lands of their father and the parcel of which the litigated land was a part was assigned to Felisa. Sometime in 1922
Felisa exchanged the above-mentioned parcel with a land belonging to her aunt. Andrea Montalbo, a sister of her father. The reason for the exchange was that
Andrea wanted to donate a piece of land to the municipality for use as a school site and the land of Felisa was what the municipality preferred as it was adjacent
to other properties of the municipality. (Exh. 5 for defendants Mendoza) Upon her acquisition of Felisa's aforementioned land, Andrea donated to the municipality
the northern portion thereof which constituted almost one-half of the entire parcel, and since then that portion was declared for taxation purposes by the
municipality together with its adjoining properties (Exhs. 6, 6-A, 6-B).1äwphï1.ñët In 1927 the remainder of the lot was given by Andrea Montalbo to her daughter
Margarita Macalalad on the occasion of her marriage to Nicolas Mendoza, and from the time of their marriage the couple possessed the said property. That
donation was confirmed subsequently in a public instrument dated August 15, 1951 (Exh. 2 for the Mendozas). Nicolas Mendoza sought to transfer the tax
declaration of the property to his name and of his wife and for that purpose he submitted a deed of exchange of property dated January 14, 1922, allegedly
executed by Felisa Montalbo and Andrea Montalbo in the presence of the municipal secretary Rafael Manahan (Exh. 5). When Basilio Perez came to know about
the supposed deed of exchange, he had it investigated and upon discovering that the signature of Rafael Manahan appearing on the document was forged, he
filed a criminal complaint before the Fiscal's office which led to an accusation for falsification of private document against Andrea Montalbo and Nicolas Mendoza.
Only Nicolas Mendoza was arraigned and tried and was convicted by the Court of First Instance of Batangas, but on appeal he was acquitted by the Court of
Appeals for insufficiency of evidence to show that he participated in affixing the signature of Rafael Manahan or that he was aware of the falsity of the document
in question when he presented it to the tax assessor's office.3 Notwithstanding the forged signature of Rafael Manahan on the document Exhibit 5, there is
sufficient evidence to prove that an exchange of property did in fact occur in 1922 between Andrea and Felisa Montalbo, and that Felisa's land passed on to
Andrea who in turn gave part of it to the municipality and part to her daughter, Margarita; hence, the decision in favor of the spouses Mendoza.
On the other hand, petitioners contend that the disputed property was inherited by Petra and Felisa Montalbo from their father Estanislao who died in 1918 and
since that date the two sisters were in possession of said land. In 1934 a deed of partition of the various properties of Estanislao was executed between Petra
and the heirs of Felisa, and the land in question was divided equally, between them; among those who signed as witnesses to that agreement was Andrea
Montalbo(Exh. D for petitioners). In 1952 Felisa's husband, Jose Ortega, and children sold their one-half share to spouses Petra Montalbo and Basilio Perez,
now petitioners, but the deed of sale was lost a year after. Sometime in 1946 petitioners leased the property to the Mendozas and when the lease expired in
1951 they demanded for the return of the land but the Mendozas refused and so petitioners had to file an ejectment suit before the justice of the peace court of
Taysan which was still pending at the time of the trial of the civil case in 1960. (tsn. witness Basilio Perez, December 15, 1960, pp. 16-34)
For not giving credit to the foregoing evidence, petitioners now assail the adverse decision of respondent court on four assigned errors.
1. Petitioners contend that respondent court erred in considering the criminal case for falsification res adjudicata on the matter of ownership of the land in
litigation when the "question of ownership was not actually and directly in issue in the criminal case and the latter was not the proper vehicle for the determination
of the ownership of the land." (p. 9, petitioners brief) Petitioners refer to portions in the decision of respondent court, viz:
The land in question, together with that portion that was acquired by the municipality of Taysan, the identity of which is admitted by the
parties, belonged to Felisa Montalbo, as held in the decision of the Court of Appeals, thus — "The said parcel of land previously belonged
to Felisa Montalbo (married to Jose Ortega), who inherited it from her deceased father, the aforecited Estanislao Montalbo;", and the land
in question was donated propter nuptias by Andrea Montalbo to Margarita Macalalad and Nicolas Mendoza, the defendants, (Margarita
Macalalad is the daughter of Andrea Montalbo) on the occasion of their marriage on February 27, 1927, as found and held in the decision
of the Court of Appeals, thus — "and this land was acquired by the donor (Andrea Montalbo) by means of a barter with her own parcel of
land planted with bamboos and mango trees"
Upon the basis of the findings of fact and conclusion arrived at in the decision of the Court of Appeals , it clearly appears that although the
document of exchange of the lands was found to be falsified, nevertheless the Court found upon the facts as demonstrated by the
evidence that the land in question "previously belonged to Felisa Montalbo (married to Jose Ortega), who inherited it from her deceased
father, the aforesaid Estanislao Montalbo ..."; that said land was donated propter nuptias by Andrea Montalbo to the defendants on the
occasion of their marriage on February 27, 1927; and that "this land was acquired by the donor by means of a barter with her own parcel
of land planted with bamboos and mango trees". From the context of the decision the natural and logical inference is that factually the
exchange of the lands had been consummated.... (pp. 6-7, CA decision at pp. 20-21, rollo; emphasis supplied to indicate disputed
statements)
Undoubtedly, there is merit to the contention of petitioners that the pronouncements or findings of fact made by the Court of Appeals in the criminal case
concerning the possession and ownership of the land now in litigation in the civil case, do not constitute the law on the matter and cannot be taken or adopted as
a basis for deciding the question of ownership of said land in this civil case. Since there is no identity of parties in the two cases — the petitioners here not being
parties in the criminal case — and the object or subject matter in the criminal prosecution is different, the latter being concerned with the guilt or innocence of
accused Nicolas Mendoza for falsification of private document, it follows that the judgment in the criminal action cannot be used as evidence in the civil case
where the issue is ownership of a piece of land. It is the rule that the plea of res judicata generally cannot be interposed except where the parties, facts, and
questions are the
same,4 hence, the judgment in a criminal case cannot be pleaded as res judicata in a civil action.5
But whatever error was committed by respondent court in this regard, the same is not sufficient to nullify the appealed decision.
Analyzing the decision of respondent court. We see that the latter made its own appraisal and evaluation of the evidence existing in the record relative to the
possession and ownership of the land in question. Thus it said that the conclusions arrived at by the Court of Appeals in the criminal case to wit(1) that there was
an exchange of lands consummated between Andrea and Felisa and (2) that the exchanged land was later donated by Andrea to her daughter Margarita in 1927,
"can hardly be doubted if we take account of the undisputed fact that the defendants have been in possession of the land since 1927, and the plaintiffs (meaning
spouses Perez) have not attempted to disturb defendants' possession of the land until 1952 when said plaintiffs filed an action of unlawful detainer against the
defendants." (p. 7 of appealed decision at p. 21, SC rollo; emphasis supplied) Continuing, respondent court expounded:
Contrary to the allegation in the complaint — "That plaintiffs were in possession of the land prior and up to January, 1946, when the same
was leased to the defendants ...", and the testimony of Basilio Perez to the same tenor, the evidence has conclusively shown that the
defendants have been in continuous possession of the land since 1927 to the present time, and they have built a house on the land in
1928 where they have resided and lived to the present, as testified to by the defendant Mendoza, ....
The plaintiffs have contended, however, with the support of the testimony of Basilio Perez, that the possession of the defendants since
1946 was that of a mere lessee of the land. On this matter, the trial court said, "the records do not show any documentary evidence to
support such contention. Nor is any document, say receipts of payment of rentals presented to bolster their theory. On the contrary their
averment has been strongly denied by the defendants and the records show that it was only in 1952 that a civil action was instituted by the
plaintiffs against the defendants in the Justice of the Peace Court of Taysan, Batangas, for detainer and damages", and said allegation of
possession of the defendants as lessees of the land "is not supported by positive and convincing evidence". We find no reason to
disagree with the foregoing findings of fact and conclusion of the trial court because the same is supported by the preponderance of
evidence, and the plaintiffs have not pointed to us any fact of significance or influence which have been disregarded by the court, other
than the testimony of Basilio Perez who testified about the supposed contract of lease. (pp. 21-22, 23, ibid.; emphasis supplied)
Digging further into the evidence of herein petitioners, respondent court found for itself that the agreement of partition dated May 27, 1934, Exhibit D, is not
incontrovertible proof that in 1934 the litigated property belonged in common to Petra and the heirs of Felisa Montalbo both of whom may have been guided by
the fact that the property was still declared for taxation purposes in the name of Estanislao Montalbo, and that the document of partition "did not overcome the
evidence on record that Andrea Montalbo became the owner of the land, and that since 1927 the defendants have been in continuous possession of the land,
openly, adversely and in the concept of owners thereby acquiring ownership of the land through acquisitive prescription." (p. 10 of CA decision at p. 24, SC rollo)
Independently therefore of the pronouncements of the Court of Appeals in the criminal case, respondent court examined the evidence in this civil case and made
its own findings of fact on the basis of which it affirmed the decision of the trial court.
We could have stopped here and resolved this petition under well-entrenched precepts in Philippine jurisprudence that findings of fact of the Court of Appeals are
as a rule conclusive and binding upon this Court;6 nonetheless, to set our mind at rest that the conclusions of respondent court were not grounded on
speculation, surmises or conjectures,7 We went over the evidence before Us.
Certain salient facts strongly support the claim of respondents Mendoza over the property in dispute:
First, the northern boundary of the land in controversy is undisputably a school site which originally was part of a bigger tract belonging to Estanislao Montalbo.
This is admitted by petitioner Basilio Perez who to a question propounded by his counsel, Atty. Panganiban, declared:
Mr. Panganiban: (Counsel of petitioners)
Q. According to these tax declarations which you said covers the land in question, the boundaries on the north,
school site; on the east, land of Calixto Flores; on the south, estero; and on the west, estero and Gregoria
Mendoza, why is it that there is a discrepancy?
A. Because from the whole parcel of land a portion was taken for the school site, and that which remains now is the
land in question, sir. (tsn December 15, 1960, pp. 22-23)
No explanation however was offered by Perez as to how that portion became a school site. On the other hand, there is evidence of respondent Mendoza that
because Andrea Montalbo wanted to donate a piece of land to be used as a school site and the municipality preferred the location of the land inherited by Felisa
from her father, the two women exchanged lands after which Andrea gave one-half of the property to the municipality while the remaining portion which is the
land now in litigation was donated propter nuptias to her daughter Margarita way back in 1927. (tsn October 24, 1961, pp. 14-18) This donation of Andrea was
not disproved by any evidence of petitioners. On the part of respondents Mendoza, their documentary evidence, Exhibits 6, 6-A and 6-B, show that the
municipality of Taysan declared the donated property in its name as early as July, 1925, which supports respondents' claim that the exchange of properties
between Andrea and Felisa Montalbo took place sometime in 1922.
Second, the provincial authorities authorities dealt with the Mendozas for the widening of the provincial road which traverses the land in question. Nicolas
Mendoza testified that the land covered by the complaint actually consists of two lots which he described in his sketch, Exhibit 1, with letters "A" and "B"
respectively, separated by a provincial road leading to the municipality of Lobo; that lot "A" which is the bigger parcel is the one donated to his wife, Margarita, by
Andrea Montalbo on the occasion of their marriage in 1927 (Exh. 2); while lot "B" was bought from Donata Mendoza in 1951 as shown by the deed of sale,
Exhibit 7; that sometime in 1937-38, the province widened the provincial road traversing the two lots, and he and his wife were approached by the provincial
authorities more particularly, Engineer Ramirez, for them to give without compensation from lot "A" a stretch of land of one meter in width to widen said road, and
they agreed. At that time Donata Mendoza still owned lot "B" and she was also asked to give part of her land for the road but she was paid for the value of the
plants destroyed in the process.(tsn October 24, 1961, pp. 32-34) For his part, petitioner Perez admitted during the cross-examination conducted by the opposite
counsel, Atty. Julio Enriquez, that the provincial authorities did not deal with him at all during the widening of that particular road. (tsn September 25, 1961, p. 34)
This is of marked significance, because if it were true as claimed by petitioners that they were in possession of the property since the death of Estanislao
Montalbo in 1918 or even after the deed of partition in 1934, they would have been the persons approached by the authorities for the widening of the road. The
fact that the Mendozas were the ones who gave away part of the land for the widening of the Lobo road shows that they were in possession of the property and
were living there at the time.
Third, respondents Mendoza have been in possession of the property since 1927 in concept of owners thereof. We have the testimony of respondent Nicolas
Mendoza that after the land was donated to his wife in 1927 they built a house on it and lived there continuously, witness referring particularly to what he
described as lot "A" in his sketch Exhibit 1. (tsn October 24, 1961, pp. 7, .30-31) Respondent's testimony was found both by the trial and appellate courts credible
because (1) petitioner Basilio Perez himself admitted during cross-examination that even before the last world war the Mendozas had constructed a house on the
land in litigation (tsn September 25, 1971, pp. 37-39; see Exh. E-3) which admission disproves the allegation in the complaint and Perez' testimony that it was
only in 1946 when the Mendozas occupied the property as lessees; (2) the testimony of Nicolas Mendoza was corroborated by witness Adriano Gonzales, a
retired justice of the peace of Taysan, Batangas, who declared that he knew the Mendozas since 1937 and he saw them living on the land in question and they
have not changed residence at all since he had known them (tsn December 6, 1961, pp. 5-6); and (3) the respondents Mendoza were the ones who were living
on the property and not the petitioners at the time the provincial government in 1937 widened the Lobo road which crosses said land.
The court a quo and the respondent appellate court did not err when they upheld the claim of ownership of the Mendozas principally on the ground that the latter
were in actual possession of the property since 1927 and were sought to be dispossessed by petitioners herein only in 1952 when an ejectment suit was filed
against them.
Possession is an indicium of ownership of the thing possessed and to the possessor goes the presumption that he holds the thing under a claim of ownership. 8
Article 433 of the Civil Code provides that "(A)ctual 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." In Chan vs. Court of Appeals, et al., L-27488, June 30, 1970, 33 SCRA 737, this Court upheld the
finding of the Court of Appeals that the litigated property belonged to the private respondents therein based on their possession of the property, not only because
such findings of fact of the appellate court are conclusive and binding on this Court but because the conclusion is in accordance with Articles 433 and 531 of the
Civil Code. 9
As we have here conflicting claims of possession by the parties over the land in controversy and because the fact of possession cannot be recognized at the
same time in two different personalities except in cases of co-possession, the present possessor is to be preferred pursuant to Article 538 of the Civil Code which
We quote:
Possession as a fact cannot be recognized at the same time in two different personalities except in the cases of co-possession. Should a
question arise regarding the fact of possession, the present possessor shall be preferred; if there are two possessors, the one longer in
possession; if the dates of the possession are the same, the one who presents a title; and if all these conditions are equal, the thing shall
be placed in judicial deposit pending determination of its possession or ownership through proper proceedings." 10
The pretension of petitioners that the possession of the Mendozas is that of a mere lessee was not believed by the trial judge and the appellate court not only
because of the absence of any written or oral evidence on the matter other than the bare testimony of petitioner Basilio Perez, but also due to the circumstances
present in the case which We indicated and enumerated at pages 7 to 9 of this decision. In fine, it is a fact that the Mendozas are presently in possession of the
property and the presumption of ownership in their favor has not been successfully rebutted by evidence that they are mere lessees of the land in their
possession as claimed by petitioners.
2. In their second assigned error, petitioners contend that respondent court should not have given weight to the evidence of respondent Mendoza because the
latter's Exhibit 5 was proven to be a falsified document.
To recall, Exhibit 5 is the alleged deed of exchange or barter of lands between Andrea and Felisa Montalbo dated January 14, 1922. On this point, petitioners
overlook the fact that Exhibit 5 was made the basis of a criminal accusation of falsification of private document solely on the allegation that the signature of
Rafael Manahan, the person before whom the parties to the document allegedly appeared, was not his. There was no finding in that criminal case as per
decision rendered therein that the barter or exchange of lands between Andrea and Felisa Montalbo did not in effect take place. On the contrary, what appears in
said decision offered by petitioners as their Exhibit J are the following findings of the Court of Appeals, viz: that the land donated by Andrea Montalbo to her
daughter Margarita Macalalad "was acquired by the donor by means of a barter with her own parcel of land planted with bamboos and mango trees"; that while it
is true that because of this presentation of the falsified document appellant (now respondent Nicolas Mendoza) was able to secure the declaration of the property
donated in his name, no criminal liability should be imposed upon him in the absence of any evidence that he presented said exhibit with the knowledge that it
was forged "especially if we take into consideration the fact that he and his wife were and are still in possession of the land donated since 1927 "; that in fact, the
color and appearance of the document in question show that it is not a new document but an old one thus confirming Mendoza's theory that it was executed in or
about the year 1922 as appearing in the document or five years before his marriage. (pp. 1, 5, 6 of Exh. J, folder of exhibits) Thus, if the document Exhibit 5 was
held to be forged, it was simply because the municipal secretary, Rafael Manahan, did not sign it and not for any other reason. What is material and relevant to
the civil case is that both the trial court and respondent appellate court found for a fact that there was an exchange of lands between Andrea and Felisa Montalbo
on the basis of evidence other than the disputed Exhibit 5. As to what the evidence is, has been discussed above.
Petitioners cite Gonzales vs. Mauricio, 53 Phil. 728 where this Court stated inter alia that the introduction of a forged instrument by a witness renders the
testimony of the latter practically worthless. That statement however is not applicable to the situation before Us because in Gonzalez the particular document or
receipt referred to was found to be entirely false as to its contents, handwriting, and signature, whereas here all that was found to be false is the signature of a
witnessing official.
3. The last argument of petitioners is the object of the third assigned error. It is contended that the appellate court erred in not giving effect to the deed of
partition, Exhibit D, notwithstanding the fact that the name of Andrea Montalbo appears in the document as one of the witnesses thereto.
Exhibit D appears to be a document dated May 27, 1934, wherein certain properties allegedly belonging to Estanislao Montalbo were divided between Petra
Montalbo and Jose Ortega, husband of deceased Felisa Montalbo. Petitioner Basilio Perez declared that one of the parcels of land mentioned in the document is
the land now in litigation which is particularly marked as Exhibit D-1. He also testified that Exhibit D was signed by him and his wife, Petra Montalbo, by Jose
Ortega, husband of deceased Felisa Montalbo, and thumbmarked by the latter's children all in his presence. (tsn December 15,1960, pp. 19-24) Surprisingly,
however, Basilio Perez did not at all mention during the course of his testimony that the old woman, Andrea Montalbo, signed the deed of partition as a witness.
We have gone over the transcript of Basilio Perez' declaration on direct and cross-examination (tsn December 15, 1960, pp. 15-34; September 25, 1961, pp. 3-
40) and at no instance did he ever state that Andrea Montalbo was present during the preparation of the document, that she read or knew the contents thereof
which by the way consists of six handwritten pages, and that she signed her name on the document. It was incumbent upon petitioners to identify the signature
of Andrea Montalbo on the document if her signature was truly there. As a matter of fact, examining the document Exhibit D We entertain doubts whether the
name referred to by petitioners is "Andrea Montalbo", for, as written, it also can read "Maria Montalbo". At any rate, whatever is the import of said deed of
partition, the same binds only the parties thereto but does not affect third persons such as Andrea Montalbo or the herein Mendozas in the absence of proof that
they participated in one way or another in the preparation and execution of thedocument. As it is, Andrea Montalbo was a stranger to that deed of partition and
any recital therein concerning the property under litigation cannot be used as evidence to prejudice her and her successors-in-interest or place her in estoppel as
to her claims over the property. Res inter alios acta alteri nocere non debet. A transaction between two parties ought not to operate to the prejudice of a third
person or stranger. 11
4. In the fourth assignment of error, petitioners claim that the appellate court should have rendered a decision in their favor. That both the trial court and
respondent appellate court have correctly evaluated the evidence, has been clearly demonstrated by Us.
IN VIEW OF ALL THE ABOVE CONSIDERATIONS, We find no reversible error in the decision under review and We AFFIRM the same with costs against
petitioners.
So Ordered.
Castro (Chairman), Makasiar, Esguerra and Martin, JJ., concur.
Teehankee, J., is on leave.
Footnotes

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-21231 July 30, 1975
CONCORDIA LALUAN, et al., petitioners,

vs.
APOLINARIO MALPAYA, MELECIO TAMBOT, BERNARDINO JASMIN, et al., respondents.
Primicias, Regino and Macaraeg for petitioners.
Saturnino D. Bautista for respondents.
CASTRO, J.:
In 1950 the Laluans,1 the Laguits2 and the Sorianos3 (hereinafter referred to as the petitioners) filed with the Court of First Instance of Pangasinan a complaint
against Apolinario Malpaya, Melecio Tambot and Bernardino Jasmin (hereinafter referred to as the respondents) for recovery of ownership and possession of two
parcels of land. The petitioners seek a declaration that they are the owners pro indiviso of
A PARCEL OF RICELAND, situated in the barrio of Inoman, Pozorrubio, Pangasinan, Philippines ... containing an area of 1 hectare nine
hundred seventy one (10,971) square meters, more or less; bounded on the N. by Nicolas Estares; on the E. by Zanja; on the S. by Estero
Inoman and on W. by Aniceta Marquez; ...,
and the owners pro indiviso of one-half of
A PARCEL OF RICELAND AND CORNLAND, situated in the barrio of Inoman, Pozorrubio, Pangasinan, ... containing an area of (31,548)
square meters, more or less, bounded on N. by Rosendo Serran; E. by Esteban Malpaya; S. by Creek and W. by Creek that surround
it; ....
They base their claim on their alleged right to inherit, by legal succession, from Marciana Laluan (the respondent Malpaya's wife) who died intestate on July 17,
1948 and without any children.
The first parcel of land they allege as paraphernal property of the late Marciana Laluan. They claim that the respondent Malpaya, taking advantage of the senility
of his wife, sold the land to the respondent Tambot, as evidenced by the "Deed of Absolute Sale of Real Property" dated June 26, 1948. The second parcel of
land they allege as conjugal property of the spouses Malpaya and Laluan, and charge that the respondent Malpaya, with right to sell only one-half thereof, sold
the whole property, four days after the death of his wife, to the respondents Tambot and Jasmin, as evidenced by the "Absolute Deed of Sale" dated July 21,
1948.
The respondents filed their answer,4 denying the allegations of the complaint and claiming that the parcels of land belonged to the respondent Malpaya as his
exclusive property. The respondents Tambot and Jasmin further aver that the respondent Malpaya had the "perfect legal right" to dispose of the said parcels of
land and that they bought the properties in good faith, unaware of any flaw in the title of their vendor.
To expedite the proceedings, the parties entered into a partial stipulation of facts at the hearings of August 31 and October 25, 1950. The petitioners then
proceeded to adduce their evidence.
Several postponements of the scheduled hearings followed. Then, at the hearing scheduled on August 1, 1957 neither the respondents nor their counsel
appeared, notwithstanding due and proper notice served on them. Nor did they file any motion for postponement. The petitioners thus moved for leave to
continue with the presentation of their evidence. This the court a quo granted, allowing the petitioners to adduce their evidence before the clerk of court.
On September 23, 1957 the court a quo rendered judgment declaring null and void the "Deed of Absolute Sale of Real Property" dated June 26, 1948 as well the
"Absolute Deed of Sale" dated July 21, 1948, except as regards the one-half portion of the land described in the latter document which belonged to the
respondent Malpaya. With respect to the parcel of land covered by the "Deed of Absolute Sale of Real Property," the court a quo declared the petitioners owners
pro indiviso of the entirety thereof and ordered the respondent Tambot not only to deliver the possession of the land to them but also to pay them, by way of
damages, the amount of P750 — the value of the crops which the petitioners failed to realize for the last nine years from the land — plus P500 annually from
date until possession thereof shall have been delivered to them. With respect to the parcel of land subject of the "Absolute Deed of Sale," the court a quo
likewise declared the petitioners owners pro indiviso of one-half thereof and ordered the respondents Tambot and Jasmin to deliver the possession of the half-
portion to the petitioners, as well as to pay them, in damages, the sum of P1,343.75 — the value of the produce which the petitioners failed to realize for the last
nine years from the half-portion of the land - plus P687.50 annually from date until possession thereof shall have been delivered to them.
On October 7, 1957 the respondents Tambot and Jasmin filed their Mocion de Reconsideracion. On October 18, 1957 the court a quo, finding the grounds
invoked by the respondents in their motion without merit, denied the same.
The respondents then appealed to the Court of Appeals (hereinafter referred to as the respondent Court). On January 31, 1963 the respondent Court rendered
judgment setting aside the appealed decision and entered another remanding the case to the court a quo for further proceedings. The respondent Court voided
the procedure whereby, at the continuation of the hearing of the case on August 1, 1957, the court a quo, in the absence of the respondents and their counsel,
allowed the petitioners to present their evidence before the clerk of court.
In due time, the petitioners, through a motion for reconsideration, asked the respondent Court to re-examine its decision. This motion, however, the respondent
Court denied.
In the instant petition for certiorari, the petitioners pray for the reversal of the decision of the respondent Court as well its resolution denying their motion for
reconsideration, and ask that judgment be rendered affirming in toto the decision of the court a quo dated September 23, 1957.
The petitioners and the respondents point to what they believe is the sole question for resolution; whether or not the reception by the clerk of court of the
petitioners' evidence, in the absence of the respondents and their counsel, constitutes a prejudicial error that vitiated the proceedings.
The petitioners argue that a trial court has authority to designate its clerk of court to receive the evidence of the party present when the other party fails to
appear. In receiving evidence, the petitioners continue, the clerk of court merely performs a ministerial task. The ministerial nature of such a task allows the clerk
of court to dispense with the procedural steps5 prescribed by Rule 33 of the Rules of Court.
The respondents, on the other hand, contend that the court a quo arrogated unto itself the power, otherwise denied it, to designate its clerk of court to receive the
petitioners' evidence. No provision of the Rules of Court, according to them, empowers a trial court to authorize its clerk of court to receive the evidence of a
party litigant; only when the clerk of court becomes a commissioner, by appointment pursuant to Rule 33, has he the authority to so receive the evidence of a
party litigant, and even in such a situation Rule 33 requires the clerk of court to observe the procedural steps therein prescribed.
The provisions of Rule 33 of the Rules of Court invoked by both parties properly relate to the reference by a court of any or all of the issues in a case to a person
so commissioned to act or report thereon. These provisions explicitly spell out the rules governing the conduct of the court, the commissioner, and the parties
before, during, and after the reference proceedings. Compliance with these rules of conduct becomes imperative only when the court formally orders a reference
of the case to a commissioner. Strictly speaking then, the provisions of Rule 33 find no application to the case at bar where the court a quo merely directed the
clerk of court to take down the testimony of the witnesses6 presented and to mark the documentary evidence7 proffered on a date previously set for hearing.
No provision of law or principle of public policy prohibits a court from authorizing its clerk of court to receive the evidence of a party litigant. After all, the reception
of evidence by the clerk of court constitutes but a ministerial task — the taking down of the testimony of the witnesses and the marking of the pieces of
documentary evidence, if any, adduced by the party present. This task of receiving evidence precludes, on the part of the clerk of court, the exercise of judicial
discretion usually called for when the other party who is present objects to questions propounded and to the admission of the documentary evidence proffered. 8
More importantly, the duty to render judgment on the merits of the case still rests with the judge who is obliged to personally and directly prepare the decision
based upon the evidence reported. 9
But where the proceedings before the clerk of court and the concomitant result thereof, i.e., the judgment rendered by the court based on the evidence presented
in such limited proceedings, prejudice the substantial rights of the aggrieved party, then there exists sufficient justification to grant the latter complete opportunity
to thresh out his case in court.
1. Anent the parcel of land subject of the "Deed of Absolute Sale of Real Property," the court a quo, in its decision dated September 23, 1957, declared it as the
paraphernal property of the deceased Marciana Laluan. In so doing, the court a quo relied mainly on the documents — the deed of donation propter nuptias and
the translation thereof in English — presented by the petitioners before the clerk of court at the hearing on August 1, 1957. However, the respondents contend —
and this the respondent court took significant note of in its resolution dated March 30, 1963 — that the land described in the "Deed of Absolute Sale of Real
Property" is not any of those set forth in the deed of donation.
The "Deed of Absolute Sale of Real Property" describes the land subject thereof as follows:
A parcel of riceland, together with all the improvements existing thereon situated in the Barrio of Inoman, Pozorrubio, Pangasinan,
Philippines, ... containing an area of 1 hectare nine hundred seventy one (10,971) square meters, more or less; bounded on the N. by
Nicolas Estaris; on the E. by Zanja; on the east by Estero Inoman and on the W. by Aniceta Marquez; the boundaries consists of visible
dikes that surround it; declared under Tax No. 20006 in the name of the Vendor and assessed at P330.00 of the current year of
Pozorrubio, Pangasinan; said land is not registered under Act No. 496 nor under the Spanish Mortgage Law. 10
On the other hand, the deed of donation propter nuptias treats of three parcels of land in this manner.
First: A parcel of riceland situated in Paldit, municipality of Pozorrubio, Pangasinan, the measurement and boundaries on all sides could
be seen from the sketch at the back hereof, this parcel of land is given in lieu of jewelry, whose value is TEN (P10.00) PESOS.
Second: Another parcel of riceland situated in the same place mentioned above, also its measurements and boundaries on all sides could
be seen from the sketch at the back hereof, and valued at THIRTY (P30.00) PESOS.
... a parcel of riceland ... situated in Inmatotong, this municipality, its measurements in brazes and boundaries on all sides could be seen
on the sketch herein below, and this said parcel of land is valued at TEN (P10.00) PESOS.
The sketch appearing on the deed of donation covers three parcels of land: the first parcel, 63 X 52 brazas, 11 bounded on the north by Jacinto Malpaya, on the
west by a payas, and on the south and east by Pedro Malpaya; the second parcel, 30 X 63 brazas, bounded on the north by Tomas Tollao, on the west by
Jacinto Laluan, on the south by a colos, and on the east by Pedro Malpaya; and the third parcel, 52 X 23 brazas, bounded on the north and west by Pedro
Malpaya, on the south by Roman Gramata, and on the east by Eustaquio Marquez. All of these three parcels have stated metes and bounds quite different from
those of the land covered by the "Deed of Absolute Sale of Real Property," the location too of the latter land differs from those of the parcels described in the
deed of donation. While the land subject of the "Deed of Absolute Sale of Real Property" lies in Inoman, Pozorrubio, Pangasinan, the parcels included in the
deed of donation lie either in Paldit or in Inmatotong, both also in Pozorrubio, Pangasinan. At first sight also appears the marked variance between the respective
areas of those parcels described in the deed of donation and the parcel subject of the "Deed of Absolute Sale of Real Property."
Indeed, there arises the possibility that in the interim of fifty six years from February 15, 1892 (the date of the deed of donation propter nuptias) to June 26, 1948
(the date of the "Deed of Absolute Sale of Real Property"), the parcels of land contiguous to those described in the deed of donation passed in ownership from
one hand to another, or changes in the man-made or natural boundaries used to indicate the confines of the parcels set forth in the said document occurred. This
could very well explain the discrepancies between the names of the boundary owners of the piece of land described in the "Deed of Absolute Sale of Real
Property" and the names of the adjacent owners of the parcels subject of the deed of donation as well as the absence of any mention of the payas and colos in
the later "Deed of Absolute Sale of Real Property." In addition, the variance between the location of the land described in the "Deed of Absolute Sale of Real
Property" and those of the parcels set forth in the deed of donation could reasonably be due to the creation of new barrios in the municipality of Pozorrubio
Pangasinan, or the alteration of the boundaries of the barrios therein.
However, the apparent difference between the area of the land described in the "Deed of Absolute Sale of Real Property" and the areas of the parcels included in
the deed of donation propter nuptias should be fully and properly explained. The record shows that the petitioners neither offered nor attempted to offer any
evidence indicating that the land sold by the respondent Malpaya to his co-respondent Tambot corresponds with any of the three parcels described in the deed of
donation. The petitioners failed to specify precisely which of the three parcels — its location, area, and contiguous owners — subject of the deed of donation
constitutes the very land delimited in the "Deed of Absolute Sale of Real Property."
All these give rise to a grave doubt as to the specific identity of one of the parcels of land in dispute which the court a quo neither noticed nor considered
notwithstanding the obvious fact that the location, area and boundaries of the land covered by the "Deed of Absolute Sale of Real Property" do not coincide with
those of any of the parcels described in the deed of donation propter nuptias.
The invariable applicable rule 12 is to the effect that in order to maintain an action to recover ownership, the person who claims that he has a better right to the
property must prove not only his ownership of the property claimed but also the identity thereof. The party who desires to recover must fix the identity of the land
he claims. 13 And where doubt and uncertainty exist as to the identity of the land claimed, a court should resolve the question by recourse to the pleadings and
the record as well as to extrinsic evidence, oral or written.
Absent, therefore, any indicium in the record to show and identify with absolute certainty any of the three parcels of land included in the deed of donation propter
nuptias as the land described in the "Deed of Absolute Sale of Real Property," the prudent course open obviously consists in an investigation by the court a quo,
either in the form of a hearing or an ocular inspection, or both, to enable it to know positively the land in litigation. If, indeed, the "Deed of Absolute Sale of Real
Property" treats of a piece of land entirely different and distinct from the parcels described in the deed of donation propter nuptias, and considering that the court
a quo, in its decision dated September 23, 1957, relied mainly on the said deed of donation in declaring the land subject of the "Deed of Absolute Sale of Real
Property" as the paraphernal property of the late Marciana Laluan and in nullifying the latter document, then there exists sufficient ground to remand the case to
the court a quo for a new trial on the matter.
2. Anent the parcel of land subject of the "Absolute Deed of Sale," the court a quo, in its decision dated September 23, 1957, found and declared it as the
conjugal property of the spouses Laluan and Malpaya. In so doing, the court a quo relied heavily on the presumption established by article 1407 14 of the Civil
Code of 1889 that "[a] 11 the property of the spouses shall be deemed partnership property in the absence of proof that it belongs exclusively to the husband or
to the wife."
It needs no emphasis to point out that the court a quo committed no error in declaring that the parcel of land subject of the "Absolute Deed of Sale" belongs to
the conjugal partnership of the spouses Laluan and Malpaya. Indeed, the spouses Laluan and Malpaya acquired the said parcel of land from Eustaquio Marquez
"sometime in 1912" or, specifically, during the marriage. Following the rule then that proof of acquisition of the property in dispute during the marriage suffices to
render the statutory presumption operative, 15 it seems clear enough that the parcel covered by the "Absolute Deed of Sale" pertains to the conjugal partnership
of the spouses Laluan and Malpaya.
Likewise, the court a quo committed no error in declaring the "Absolute Deed of Sale" null and void as to the one-half portion of the land described therein which
belonged to Laluan, spouse of the respondent Malpaya; in declaring the petitioners the owners pro indiviso of one-half of the land subject of the said "Absolute
Deed of Sale;" and in ordering the respondents Tambot and Jasmin to deliver the possession of the said half-portion to the petitioners. The court a quo also
correctly cited and applied the provisions of articles 953 16 and 837 17 of the Civil Code of 1889 which, pursuant to article 2263 18 of the new Civil Code, govern
the rights of the petitioners and the respondent Malpaya to the property left by Marciana Laluan who died on July 17, 1948 or before the effectivity of the new
code. Consequently, the court a quo correctly ordered the respondents Tambot and Jasmin to pay to the petitioners, by way of damages, the amount of
P1,343.75 which is the value of the produce which the said petitioners failed to realize for nine years from the half-portion of the land subject of the "Absolute
Deed of Sale" — plus the sum of P687.50 annually from September 23, 1957 until possession of the said half-portion of land shall have been delivered to them.
ACCORDINGLY, (1) the judgment of the Court of Appeals dated January 31, 1963 and its resolution dated March 30, 1963 are set aside; (2) the judgment of the
court a quo dated September 23, 1957, insofar as it pertains to the "Absolute Deed of Sale," is hereby affirmed; and (3) the judgment of the court a quo of the
same date, insofar as it relates to the "Deed of Absolute Sale of Real Property," is set aside, and the case (civil case 11219) is hereby remanded to the court a
quo for a new trial, to the end that the identities of the parcels of land in dispute may be specifically established. At the new trial, it will not be necessary to retake
evidence already taken, but the parties shall be afforded opportunity to present such evidence as they may deem relevant to the particular question raised
herein. No costs.
Makasiar, Esguerra, Muñoz Palma and Martin, JJ., concur.
Teehankee, J., is on leave.
FIRST DIVISION
[G.R. No. 91869. October 19, 1992.]

MARCELINA SAPU-AN, ESTER ABIERA, FULGENCIO SOLAMILLO, ROGELIO ABIERA,
CARMELITA ABIERA and ESLIE ABIERA, Petitioners, v. THE HON. COURT OF APPEALS,
CALIXTO TINGCAY, EUFRONIA ENOFERIO, CASIMIRO TINGCAY, and GAUDENCIA
ARAQUIN, Respondents.
Alfonso P. Briones for Petitioner.
Escolastico A. Deloria, Sr. for Private Respondents.
SYLLABUS
1. REMEDIAL LAW; CIVIL PROCEDURE; BURDEN OF PROOF; PREPONDERANCE OF

EVIDENCE, MEANING OF. — The general rule in civil cases is that the party having the burden of
proof must establish his case by a preponderance of evidence. By "preponderance of evidence" is
meant that the evidence as a whole adduced by one side is superior to that of the other. In determining
where the preponderance or superior weight of evidence on the issues involved lies, the court may
consider all the facts and circumstances of the case, the witnesses’ manner of testifying, their
intelligence, their means and opportunity of knowing the facts on which they are testifying, the nature
of such facts, the probability or improbability of their testimony, their interest or want of interest, and
also their personal credibility as far as the same may legitimately appear at the trial. The court may also
consider the number of witnesses, although the preponderance is not necessarily with the greatest
number.
2. ID.; ID.; PLEADINGS; GENUINENESS AND DUE EXECUTION OF THE DOCUMENT;

REQUIREMENT ON SPECIFIC DENIAL THEREOF, TO WHOM APPLICABLE; CASE AT BAR.
— It is true that the genuineness and due execution of the two deeds of sale presented in evidence by
the petitioners were not denied by the private respondents under oath, and that under Rule 8, Section 8,
of the Rules of Court, the "genuineness and due execution of the instrument shall be deemed admitted
unless the adverse party, under oath, specifically denies them." However, this rule applies only to the
parties to the document and not, in the case at bar, to the private respondents. The reason is that they
were not parties to the deeds of sale but merely the heirs of the alleged vendors. It follows that the
unauthenticated deeds of sale cannot serve as valid bases for the petitioners’ claim of ownership over
the land in question.
3. CIVIL CODE; ACQUISITIVE PRESCRIPTION; REQUIREMENTS THEREOF; CASE AT BAR.

— Ordinary acquisitive prescription is governed by Article 1134 of the Civil Code, quoted above. It
requires possession of things in good faith and with just title during the time fixed by law. The good
faith of the possessor consists in the reasonable belief that the person from whom he received the thing
was the owner thereof and could transmit his ownership. For the purpose 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. It is well-settled that possession, to constitute the foundation of a
prescriptive right, must be adverse and under a claim of title. Possession by license or mere tolerance
does not give rise to acquisitive prescription. The above requirements have not been satisfactorily met
by the petitioners. They could not have possessed the land in good faith and with just title.
4. ID.; EXTINCTIVE PRESCRIPTION; 30-YEAR PRESCRIPTIVE PERIOD FOR REAL ACTIONS;

CASE AT BAR. — Actions for the recovery of land are real actions. Extinctive prescription of such
kind of actions is governed by Article 1141 which provides that: Art. 1141. — Real actions over
immovable prescribe after thirty years. (Emphasis supplied). The private respondents’ submission that
their cause of action arose in 1960, when they objected to the expansion being made by the petitioners,
is immaterial. As of now, the 30-year prescriptive period has not yet expired.
5. REMEDIAL LAW; APPEALS; FINDINGS OF FACT OF THE TRIAL COURT GENERALLY

UPHELD ON APPEAL; CASE AT BAR. — This case turns mainly on questions of fact, which have
been correctly appreciated by both the trial court and respondent court. Their conclusions in favor of
the private respondents are based on the evidence of record and there is no reason for this Court to
reverse or modify them. Absent a convincing showing that the challenged decision was reached
arbitrarily or in disregard of such evidence, our clear and only duty on appeal is to uphold the courts
below. It is settled that matters of credibility are addressed basically to the trial judge who is in better
position than the appellate court to appreciate the weight and evidentiary value of the testimonies of
witnesses who have personally appeared before him.
DECISION
CRUZ, J.:
The subject of this dispute is a 786 sq. m. lot situated in Valencia, Negros Oriental. It has been
occupied since the last World War by both the petitioners and the private respondents, who now
mutually assert adverse claims of exclusive ownership over the property.
The petitioners built their house near the center of the lot while the private respondents built their house
near the western boundary. Both parties made tax payments on the lot in the name of Alfonsa Ohoy and
caused separate surveys to be made on the land.
The petitioners claim the land by virtue of separate sales made by the original owners, namely Alfonsa
Ohoy, Luciana Ohoy, Porfirio Ohoy and Maria Ohoy, to Candida Favor, Ceriaco Abiera, Josefa Abiera,
and Roberto (or Edilberto) Abiera, the petitioners’ predecessors-in-interest.
For their part, the private respondents claim the same land by inheritance from their mother, Alfonsa
Ohoy, who had in turn acquired it from her mother after the land had been partitioned among her
children.
Both the petitioners and the private respondents say they have occupied and farmed the disputed land
without objection from each other. The petitioners aver that it was they who gave permission to Calixto
Tingcay to build his house on the land after World War II. The private respondents contend that it was
they who gave permission to petitioner Marcelina Sapu-an to build her house on the land, also after
World War II.
In 1962, the petitioners allegedly demolished their old house and began constructing a bigger one over
the private respondent’s objections. When their protests were ignored, the private respondents sued the
petitioners for the recovery of the land, with damages.
At the trial, the plaintiffs presented four witnesses, among them Zacarias Villegas, who testified that his
mother, Maria Ohoy, did not own any share in the disputed lot and that it belonged exclusively to
Alfonsa. He also said that he lived with the Tingcays for some time and that it was really Marcelina
Sapu-an who requested permission to live on the land. 1
They also submitted in evidence (1) tax declarations in the name of Alfonsa Ohoy from 1906 to 1949
and in the name of Calixto Tingcay for 1962; (2) receipts of tax payments made by them for the period
from 1953 to 1979; (3) two private documents dated December 15, 1964, and March 18, 1947,
respectively, evidencing the sale of coconut trees planted thereon, to third persons; (4) a sworn
statement on the current and fair value of the real property; and (5) a survey of the land made by a
geodetic engineer. 2
The defendants, for their part, presented two witnesses, Josefa Abiera, sister-in-law of Marcelina Sapu-
an, and Ester Abiera Solamillo, one of the petitioners. chanrobl es law library
Josefa Abiera testified that she witnessed the execution and signing of the deed of sale disposing of
Alfonsa’s and Porfirio’s shares in the land, on April 2, 1943, for a consideration of P25.00. Luciana
Ohoy also sold her shares in the land to Josefa’s parents before the war broke out. Josefa was already
thirty years old at the time this earlier sale took place. She further declared that Atilano sold Maria
Ohoy’s share to her and Edilberto Abiera for P5.00 during the evacuation of Valencia. 3
Ester Solamillo testified that her grandparents, Candida Favor and Ceriaco Abiera, her father Roberto,
and her aunt Josefa, purchased the disputed land in separate transactions with Luciana, Alfonsa and
Porfirio Ohoy, and Maria Ohoy, through her son Atilano. She also said that the defendants were the
ones who introduced the improvements on the land and enjoyed its fruits. Sometime in 1950, her father,
Roberto Abiera, sought the cancellation of the name of Alfonsa Ohoy in the tax declaration and the
entry of their names therein, but the treasurer’s office deferred action, pending the submission of
supporting papers. 4
The defendants also presented (1) two private deeds of sale in their favor; (2) receipts of tax payments
on the land by Teopista and Ester Abiera; and (3) a survey contract of the land prepared by a surveyor.
5
After considering the testimonial and documentary evidence of the parties, the trial court 6 disposed as
follows:chanrob1es virtual 1aw library
WHEREFORE. and in view of the foregoing, judgment is hereby rendered in favor of the plaintiffs and
against the defendants, declaring the plaintiffs as the absolute owners of the land in question described
in paragraph 4 of the Complaint, original and amended, and ordering the defendants to leave and vacate
the property in question within thirty days upon the finality of this decision.
On appeal, the decision was affirmed by the respondent court. 7 The petitioners then filed a motion for
reconsideration, raising therein the sole issue of prescription of the private respondents’ cause of action.
This motion was denied by the appellate court, prompting this petition.
The petitioners now invoke three grounds for the allowance of the petition.
First, they contend that the respondent court failed or refused to apply to this case the "equiponderance
of evidence" rule, which states:chanrob1es virtual 1aw library
When the scale shall stand upon an equipoise and there is nothing in the evidence which shall incline it
to one side or the other, the court will find for the defendant. 8
Under this principle, the plaintiff must rely on the strength of his evidence and not on the weakness of
the defendant’s claim. Even if the evidence of the plaintiff may be stronger than that of the defendant,
there is no preponderance of evidence on his side if such evidence is insufficient in itself to establish
his cause of action. 9
The petitioners’ point is that on the whole, their evidence should be given more credence than that of
the respondents. chanrobl es.com : virtual law library
The general rule in civil cases is that the party having the burden of proof must establish his case by a
preponderance of evidence. By "preponderance of evidence" is meant that the evidence as a whole
adduced by one side is superior to that of the other. 10
In determining where the preponderance or superior weight of evidence on the issues involved lies, the
court may consider all the facts and circumstances of the case, the witnesses’ manner of testifying, their
intelligence, their means and opportunity of knowing the facts on which they are testifying, the nature
of such facts, the probability or improbability of their testimony, their interest or want of interest, and
also their personal credibility as far as the same may legitimately appear at the trial. The court may also
consider the number of witnesses, although the preponderance is not necessarily with the greatest
number. 11
It is settled that matters of credibility are addressed basically to the trial judge who is in better position
than the appellate court to appreciate the weight and evidentiary value of the testimonies of witnesses
who have personally appeared before him.
Significantly, both the trial court and the respondent court found the credibility of Josefa Abiera to be
highly questionable. As the respondent court observed: chanrob1es virtual 1aw library
Appellants argue that the nullity of the said deed was not sufficiently established by the appellees nor
had the testimony of Josefa Abiera as to the due execution of the same been properly impeached. A re-
examination of the records of this case strengthens the opinion of this Court that the testimony of
Josefa Abiera as to the fact of sale of the alleged shares of Porfirio and Alfonsa Ohoy over the subject
lot and the due execution of the purported document evidencing the said sale cannot be given full
credence. Not only had the testimony of the said witness been successfully impeached by the appellees
as regards the alleged sale of the shares of Luciana and Marie Ohoy over the subject lot by a proper
showing that Luciana could not have sold her alleged share in 1936 as testified to by Josefa Abiera (pp.
41-42; t.s.n., May 13, 1982, hearing) because Luciana died in 1921 as evidenced by her death
certificate and that Josefa’s testimony to the effect that Maria Ohoy’s son, Atilano Villegas sold Maria’s
share over the said lot during the war was belied by the uncontroverted evidence for the appellees that
Atilano migrated to Dipolog, Mindanao, during the war and that the circumstances under which the
sale was allegedly perfected rendered Josefa’s testimony highly improbable; e.g. she never met Atilano
before the alleged sale took place, no written authority to sell from Maria Ohoy was presented by the
man who introduced himself as Atilano Villegas and most importantly, all their neighbors evacuated to
another place in the morning of the day when the alleged sale took place for fear of the Japanese forces
who were headed their place but Josefa and Roberto Abiera, the only ones left in the place, still found
time in the afternoon of that day to perfect a contract of sale with a complete stranger; the
unquestionable and substantial interest of Josefa Abiera over the subject lot as co-owner thereof had
also been shown by the appellees as follows: chanrobles virtual lawlibrary
"ATTY. BRIONES: chanrob1es virtual 1aw library
Q. Mrs. Abiera, when you last declared in this case on July 25, 1977, and in the latter part of your
testimony, you told the Honorable Court that the property in question is owned in common between
you and your brothers Roberto, Teopisto and Pablo, all surnamed Abiera. Now, how much of the entire
property is owned between you and your aforesaid brother Roberto, Pablo and Teopisto?
WITNESS: chanrob1es virtual 1aw library
A. 778 square meters.
Q I am not asking you on specific figures. I am asking you on the proportion how much of the entire
property is owned by you only including your brothers Roberto, Teopisto and Pablo?
A Three-fourths for the four of us.
Q All right, now, the remaining one-fourth (1/4), and who owns the same?
A Maria Ohoy.
Q How about . . . What happened to that share of Maria Ohoy?
A It was sold.
Q Sold to whom?
A It was sold to me and with my brother Roberto.
Q Which sales was evidenced by Exhibit "5" of this case, the document executed by Atilano Villegas?
A Yes, sir." cral aw virtua1aw library
In view of Josefa Abiera’s dubious credibility and her inclination in favor of the cause for the
appellants, the uncorroborated testimony of Josefa Abiera cannot lend validity to the purported deed of
sale. (p. 13, t.s.n., May 13, 1982, hearing)
It is true that the genuineness and due execution of the two deeds of sale presented in evidence by the
petitioners were not denied by the private respondents under oath, and that under Rule 8, Section 8, of
the Rules of Court, the "genuineness and due execution of the instrument shall be deemed admitted
unless the adverse party, under oath, specifically denies them." However, this rule applies only to the
parties to the document and not, in the case at bar, to the private respondents. The reason is that they
were not parties to the deeds of sale but merely the heirs of the alleged vendors.
It follows that the unauthenticated deeds of sale cannot serve as valid bases for the petitioners’ claim of
ownership over the land in question.
This Court has held that a mere tax declaration or a tax assessment, such as the one presented by the
respondents, does not by itself give title and is of little value in proving one’s ownership. 12 It must be
noted, nevertheless, that the conclusion of the respondent court was not premised on such declarations
alone for, as it correctly held: chanrob1es virtual 1aw library
Moreover, the acts of ownership exercised by the appellees over the subject lot such as the selling of a
number of trees to third parties with right of repurchase without objection from the appellants is very
strong evidence in appellee’s favor that they indeed are the owners of the subject lot and possessed it as
such. chanrobles law library
The petitioners also submit, as their second and third grounds, that the complaint is bound by the
principle of acquisitive prescription and the statute of limitations.
Their contention is that their evidence shows they possessed the subject land in good faith and with just
title and they consequently validly acquired the disputed lot pursuant to Article 1134 of the Civil Code,
providing as follows: chanrob1es virtual 1aw library
Ownership and other real rights over immovable property are acquired by ordinary prescription through
possession of ten years.
The said period of ten years must, so they maintain, be counted at the earliest from April 2, 1943, when
Exh. "4" was executed, or at the latest from the year 1946, when they commenced possession of the lot
in question. Since then and up to the filing of the complaint by the private respondents on November
20, 1964, a period of at least eighteen years had elapsed, making the action definitely tardy under the
statute of limitations.
The respondent court held that the petitioners’ failure to raise the defense of prescription of the
respondents’ cause of action precluded them from raising it for the first time on appeal. Demurring, the
petitioners agree that this issue was raised in their answer to the complaint when they alleged: chanrob1es virtual 1aw library
2. That from the time this parcel of land was acquired by the predecessors-in-interest of the defendants,
their possession over the same which was continued by the latter, was continuous, public, peaceful, and
in the concept of owner, until this unwarranted civil action by plaintiffs disturbed their lawful
possession.
They also invoke Gicano v. Gegato, 13 where the Court observed that: chanrob1es virtual 1aw library
What is essential only, to repeat, is that the facts demonstrating the lapse of the prescriptive period, be
otherwise sufficiently and satisfactorily apparent on the record; either in the averments of the plaintiff’s
complaint, or otherwise established by the evidence. chanrobles virtual lawlibrary
The petitioners seem to have confused the terms "acquisitive prescription" and "extinctive
prescription." These concepts are distinguishable as follows: chanrob1es virtual 1aw library
Adverse possession of real property for the requisite period confers title as effectually as any paper
title, with the exception that such a title cannot be acquired as against a title registered under the
provisions of the Land Registration Act. The statute of limitations is merely a bar to a right of action
and does not operate as a transfer of title at all. The statute of limitations is, therefore, new matter,
which must be specially pleaded. 14
Ordinary acquisitive prescription is governed by Article 1134 of the Civil Code, quoted above. It
requires possession of things in good faith and with just title during the time fixed by law. The good
faith of the possessor consists in the reasonable belief that the person from whom he received the thing
was the owner thereof and could transmit his ownership. For the purpose 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. 15 It is well-settled that possession, to constitute the foundation
of a prescriptive right, must be adverse and under a claim of title. 16 Possession by license or mere
tolerance does not give rise to acquisitive prescription.
The above requirements have not been satisfactorily met by the petitioners. They could not have
possessed the land in good faith and with just title because, as aptly observed by the respondent court:
library
chanrob1es virtual 1aw
A scrupulous examination of the evidence presented by the parties would show that the plaintiffs and
their mother Alfonsa Ohoy have actually resided in the land in question in the house of Alfonsa Ohoy.
That Alfonsa Ohoy had a house in the land in question as early as 1906 is shown by Tax Declaration
No. 2924 (Exh. "A" and "16"). At the back side or page 2 of the said tax declaration under the heading
"Building and Other Structures" the entry, "Una casa caña y nipa" valued at P5.00. Plaintiffs’ evidence
shows that plaintiffs lived with their mother in the land in question since birth until they evacuated to
the mountains during the Second World War; that after the war they returned to the land in question.
The fact that plaintiffs have a house in the land in question is admitted by defendant Ester Abiera. Thus,
in her testimony or direct examination by their counsel, Ester Abiera unguardedly blurted out that the
plaintiffs have a house in the lot in question even if the question asked was with respect to the
defendants’ having a house in the said lot.
The petitioners’ contention that the private respondents’ cause of action has already prescribed is also
untenable. Actions for the recovery of land are real actions. Extinctive prescription of such kind of
actions is governed by Article 1141 which provides that: chanrobles law library
ARTICLE 1141. — Real actions over immovable prescribe after thirty years. (Emphasis supplied)
The private respondents’ submission that their cause of action arose in 1960, when they objected to the
expansion being made by the petitioners, is immaterial. As of now, the 30-year prescriptive period has
not yet expired.
Moreover, what the petitioners alleged in their answer was not prescription of the plaintiffs’ cause of
action but their own alleged ownership over the lot in question by virtue of acquisitive prescription.
That claim was rejected by the respondent court when it recognized the private respondents as the real
owners of the land.
We find that this case turns mainly on questions of fact, which have been correctly appreciated by both
the trial court and respondent court. Their conclusions in favor of the private respondents are based on
the evidence of record and there is no reason for this Court to reverse or modify them. Absent a
convincing showing that the challenged decision was reached arbitrarily or in disregard of such
evidence, our clear and only duty on appeal is to uphold the courts below. We so affirm.
WHEREFORE, the petition is DENIED, with costs against the petitioners. It is so ordered.
Griño-Aquino and Bellosillo, JJ., concur.
Padilla and Medialdea, JJ., are on leave.
THIRD DIVISION
[G.R. No. 103949. June 17, 1999]
THE DIRECTOR OF LANDS, petitioner, vs. COURT OF APPEALS, MONICO RIVERA and
ESTRELLA NOTA, respondents.
DECISION
GONZAGA-REYES, J.:
This petition for review under Rule 45 of the Rules of Court seeks a reversal of the decision of the
Court of Appeals in C. A. G. R. No. CV No. 30607 which affirmed the decision of the Regional Trial
Court, Branch 12, Ligao, Albay, in Cadastral Case No. N-11-LV, LRC Rec. No. N-554 involving Lot
No. 10704, Cadastral Survey of Oas, Albay.
Cadastral Case No. N-11-LV is a cadastral proceeding for the Oas Cadastre filed by the petitioner
Director of Lands before the Regional Trial Court, Ligao, Albay. Lot No. 10704 contains an area of
68,179 square meters, and is partly cocal and corn land, situated at Cagmanaba, Oas, Albay bounded on
the North, South and West by Burias Pass and on the East by Lot 10976.
When the case was called for initial hearing, nobody offered any opposition; whereupon an order of
general default against the whole world was issued. Claimant was allowed to present his evidence. The
court held:
Lot 10704 is one of the uncontested lots. It is a parcel of land party cocal and corn land situated at
Cagmanaba, Oas, Albay containing an area of 68,179 square meters bounded on the North, South and
West by Burias Pass and on the East by Lot 10976. Originally the land was owned by Eliseo Rivera
who began possessing and occupying the same in the concept of owner openly, continuously, adversely,
notoriously and exclusively since 1926. He planted corn in the vacant spaces and some coconut
seedlings which later bore fruit. Sometime on January 7, 1928, the Spouses Ignacio Almazar and
Gregoria Rivera purchased the land from him (Exh. 2). The land now was declared in the name of
Gregoria Rivera under Tax Declaration No. 18333 (Exh. 3). There was another re-assessment under Tax
Declaration No. 7968 (Exh. 3-A). They continued planting corn. On May 22, 1971, claimant herein and
his wife purchased the land from Gregoria Rivera (Exh. 1). She caused the land to be declared in her
name under Tax Declaration No. 10641 (Exh. 4). There was another re-assessment under Tax
Declaration No. 10403 (Exh. 4-A). There was a house which they constructed as their abode. They
continued planting corn and harvested about 10 to 15 sacks of ears of corn. They shelled the ears of
corn and sold the same to the market for their own livelihood. Meanwhile, on the coconut trees they
harvest about 50 to 100 nuts every 45 days for family consumption.
The land was surveyed in the name of the herein claimant per certification of the CENRO (Exh. 5). The
cadastral survey costs in the amount of P101.70 had been paid under Official Receipt No. 2155546
(Exh. 6). Likewise, all taxes have been paid up to the current year (Exh. 7).[1]
Finding that the claimant, together with his predecessor-in-interest, has satisfactorily possessed and
occupied the land in the concept of owner openly, continuously, adversely, notoriously and exclusively
since 1926, very much earlier to June 12, 1945, the court ordered the registration and confirmation of
Lot 10704 in the name of the Spouses Monico Rivera and Estrella Nota.
The Director of Lands appealed to the Court of Appeals, alleging that the finding of the trial court that
claimants-appellees and their predecessor-in-interest have possessed Lot 10704 since 1926 is not
sufficiently supported by the evidence. The appellant contended that the earliest tax declaration
presented by appellee took effect only in 1949 and that there is no evidence that Gregoria Rivera
declared the same in her name for tax purposes during her alleged occupancy.
The Court of Appeals affirmed the judgment appealed from. It ruled:
There is competent evidence to prove that the lot in question was originally owned or claimed to be
owned by Eliseo Rivera. Sometime in 1928, the spouses Ignacio Almazar and Gregoria Rivera
purchased said lot from Eliseo Rivera. This is evidenced by a notarial deed of absolute sale (Exh. 2).
The land was declared in the name of Gregoria Rivera under Tax Declaration No. 1833 (Exh. 3). This
tax declaration was superseded by Tax Declaration No. 7968 (Exh. 3-A). On May 22, 1971, appellee
and his wife Estrella Nota purchased the land from Gregoria Rivera (Exh. 1). From then on, the
appellee and his wife continued to possess the lot in question in the concept of owner.[2]
The appellate court held that appellee was competent to testify with regard to the possession of lot in
question, and the finding of the trial court involving the credibility of witnesses carries great weight on
appeal.
Motion for reconsideration of the above-mentioned decision having been denied, the Director of Lands
has brought the instant petition, essentially raising the same arguments in the Court of Appeals to the
effect that the tax declarations presented by appellees do not prove their allegation of possession by
their predecessor-in-interest since 1926; the earliest tax declaration took effect only in 1949 and
claimant Monico Rivera was not competent to testify as to the possession of his vendor since 1926 as
he had no personal knowledge thereof.
Claimant-appellee himself filed Answer/Comment and relies on the decisions of the trial court and the
Court of Appeals to bolster his claim of title to the lot in question.
We find no merit in the appeal.
The petitioner assigns as error the finding of the respondent court that spouses Monico Rivera and
Estrella Nota have a registrable title to the lot in question and ordering registration of such title.
The question whether spouses Monico Rivera and Estrella Nota were in open, continuous, exclusive
and notorious possession of ownership under a bona fide claim of ownership for at least thirty years
prior to 1973 is a question of fact which was resolved affirmatively by the trial court and the Court of
Appeals. Such factual finding is generally binding upon this court which should limit itself to questions
of law in an appeal by petition for review on certiorari under Rule 45.[3] There is a question of law
where there is a doubt raised concerning the correct application of law and jurisprudence on the matter.
[4]
We find no reversible error in the assailed judgment.
Section 48 of the Public Land Act, as amended provides:
Sec. 48. The following described citizens of the Philippines, occupying lands of public domain or
claiming to own any such lands or an interest thereon, but whose titles have not been perfected or
completed, may apply to the Court of First Instance of the province where the land is located for
confirmation of their claims, and the issuance of a certificate of title therefor, under the Land
Registration Act, to wit:
xxx xxx xxx
(b) those who by themselves or through their predecessor-in-interest have been in open, continuous,
exclusive and notorious possession and occupation of agricultural lands of the public domain, under a
bona fide claim of acquisition or ownership, for at least thirty years immediately preceding the filing of
the application for confirmation of title except when prevented by war or force majeure. They shall be
conclusively presumed to have performed all the conditions essential to a Government grant and shall
be entitled to a certificate of title under the provisions of this Chapter.
The period of filing applications for judicial confirmation of imperfect or incomplete titles was
extended to December 31, 1987 under P. D. No. 1073. Section 4 of P. D. No. 1073 provides:
Section 4. The provisions of Section 48(b) and Section 48 (c), Chapter VIII, of the Public Land Act are
hereby amended in the sense that these provisions shall apply only to alienable and disposable lands of
the public domain which have been in open, continuous, exclusive and notorious possession and
occupation by the applicant himself or thru his predecessor-in-interest, under a bona fide claim of
acquisition of ownership, since June 12, 1945.
Since claimant Monico Rivera acquired lot 10704 from Gregoria Rivera by deed of absolute sale dated
May 22, 1971 (Exh. 1) and has been in possession for only over two years when he filed his Amended
Answer on August 10, 1973, he had the burden of proving that he together with his predecessor-in-
interest Gregoria Rivera have been in possession since June 12, 1945 under a bona fide claim of
ownership.
Claimant Riveras evidences consisted of: (1) The deed of sale dated January 7, 1928 entitled Escritura
de Venta Real y Absoluta whereby the former owner (Eliseo Rivera) sold the lot to Ignacio Almazar
married to Gregoria Rivera (Exh. 2); (2) Tax Declaration No. 18333 in the name of Gregoria Rivera,
which was notarized in December 1927 (Exh. 3); (3) Tax Declaration No. 7968 in the name of Gregoria
Rivera beginning with the year 1949, which cancelled Tax Declaration No. 18333 (Exh. 3-A); (4) Deed
of Absolute Sale executed by Gregoria Rivera, widow of Ignacio Almazar, in favor of Estrella Nota,
married to Monico Rivera dated May 22, 1971 (Exh. 1); (5) Tax Declaration No. 10641 in the name of
Estrella Nota (who is the wife of Eliseo Rivera) (Exh. 4); (6) Tax Declaration No. 10403 in the name of
Estrella Nota beginning with the year 1980, which cancelled Tax Declaration No. 10641 (Exh. 4-A).
Claimant also presented a certification that Lot No. 10704 was surveyed and is not covered by any
public land application (Exh. 5; Exh. 6), and a certification dated July 23, 1990 of the office of the
Municipal Treasurer of Oas that Ignacio Almazar, the declared owner paid taxes for 1949-1977 ( O. R.
No. 4676603 dated December 17, 1986); 1978-1979 (O. R. No. 4676602 dated December 17, 1986);
1980-1985 (O. R. No. 4676601 dated December 17, 1986; 1986 (O. R. No. 4676602 dated December
17, 1986); and 1987-1990 (O. R. No. 6422562 dated July 23, 1990) (See Exh. 7).
Claimant Monico Rivera also testified that Gregoria Rivera from whom he bought the lot in question
has been in possession since 1928, and planted corn and coconuts; after having bought the same in
1971 from Gregoria Rivera, claimant continued planting corn and harvesting the coconuts, and built a
small hut where his family lives.[5]
Contrary to the contention of appellant Director of Lands, the earliest tax declaration presented by the
claimant is not for 1949. Tax Declaration No. 18333 (Exh. 3) in the name of Gregoria Rivera is an
ancient notarized document, torn at the bottom, but the jurat at the back thereof clearly shows that the
declaration was subscribed in December 1927. This was the tax declaration that was cancelled by Tax
Declaration No. 7968 (Exh. 3-A), which begins with the year 1949. Considering the date of the earliest
tax declaration, which shows it is not of recent vintage to support a pretended possession of property, it
is believed that the respondent court did not commit reversible error in affirming the finding of the trial
court that Monico Riveras assertion of possession under claim of ownership is tenable.
Although tax declarations or realty tax payment of property are not conclusive evidence of ownership,
nevertheless, they are good indicia of possession in the concept of owner for no one in his right mind
would be paying taxes for a property that is not in his actual or at least constructive possession. They
constitute at least proof that the holder has a claim of title over the property. The voluntary declaration
of a piece of property for taxation purposes manifests not only ones sincere and honest desire to obtain
title to the property and announces his adverse claim against the State and all other interested parties,
but also the intention to contribute needed revenues to the Government. Such an act strengthens ones
bona fide claim of acquisition of ownership.[6]
There is reason to reject the appellants claim that Monico was incompetent to testify regarding
Gregorias possession. Aside from the fact that Monico Rivera and his wife Estrella Nota bought the
property from Gregoria Rivera, it appears undisputed that the latter was the sister of Eliseo Rivera, the
father of Monico and that claimant was born on Lot 10704 and grew up there.[7]
WHEREFORE, finding no reversible error in the decision appealed from, the same is AFFIRMED.
SO ORDERED.
Romero, (Chairman), Vitug, Panganiban, and Purisima, JJ., concur.
EN BANC
LAND BANK OF THE G.R. No. 171941
PHILIPPINES,
Present:
Petitioner,
- versus - PUNO, C.J.,
LUZ LIM and PURITA LIM
CABOCHAN, QUISUMBING,
Respondents. YNARES-SANTIAGO,
SANDOVAL-GUTIERREZ,
CARPIO,
AUSTRIA-MARTINEZ,
CORONA,
CARPIO MORALES,
AZCUNA,
TINGA,
GARCIA,
CHICO-NAZARIO,
VELASCO, JR., and
NACHURA, JJ.
Promulgated:
August 2, 2007
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION
CARPIO MORALES, J.:
Assailed by petition for review on certiorari are the Court of Appeals Decision of
November 11, 2005[1] affirming the December 21, 2001 Order of the Regional Trial
Court (RTC) of Sorsogon, Branch 52 fixing the valuation for purposes of just
compensation of respondents property, and Resolution of March 13, 2006[2] denying
petitioners motion for reconsideration of said decision.
Pursuant to the Comprehensive Agrarian Reform Law of 1988 (RA 6657, as amended),
the Department of Agrarian Reform (DAR) compulsorily acquired 32.8363 hectares of
agricultural land situated in Patag, Irosin, Sorsogon (the property) owned by respondents
Luz Lim and Purita Lim Cabochan.[3] Petitioner Land Bank of the Philippines (LBP)[4]
computed the value of the property at P725,804.21.[5]
Respondents rejected petitioners valuation. Thus, pursuant to Section 16(d) of RA 6657,

as amended, a summary administrative proceeding was conducted before the Provincial
Agrarian Reform Adjudicator (PARAD) to determine the valuation of the property.[6]
The PARAD initially valued it at P1,174,659.60 but later reduced the amount to
P725,804.21 upon motion of petitioner.[7]
Dissatisfied with the PARADs decision, respondents filed on January 26, 1998 a petition
for determination of just compensation with the RTC of Sorsogon where they prayed for
a compensation of at least P150,000 per hectare, or an aggregate amount of P4,925,445.
[8] The case proceeded to trial, with the RTC appointing each partys nominee as
commissioner.[9]
By Report submitted on December 9, 1998, Commissioner Florencio C. Dino II,
respondents nominee, valued the property at P1,548,000.[10] Commissioner Jesus D.
Empleo, petitioners nominee, submitted his own report on February 8, 1999, valuing the
property at P947,956.68.[11]
By September 14, 2001 Decision,[12] Branch 52 of the Sorsogon RTC adopted the
valuation submitted by respondents commissioner (P1,548,000). Both parties moved for
reconsideration, and by December 21, 2001 Order,[13] the RTC reconsidered its earlier
decision and increased the valuation to P2,232,868.40, ratiocinating as follows:
The ground relied upon by the Plaintiff[s] is that the Award was based on the Report only of
[Commissioner Dino] premised on taxation purposes and it did not consider the fact that in 1986 the
same land or part of it was paid by the defendant Land Bank the amount of P68,549.00 per hectare
when the rate of exchange between the peso and a dollar was only 22 pesos per dollar.
xxxx
x x x [T]his Court finds that indeed the decision x x x did not take into consideration the comparable
selling price of the adjoining land, which according to the plaintiff during Pre-trial, it was admitted by
the defendants Land Bank and the DAR and the same was already stated in the findings of fact of the
Court in its decision x x x, that the property subject of the acquisition is situated at Patag, Irosin,
Sorsogon like the property of Roger Lim, brother of the plaintiff and the same was acquired by the
defendant Land Bank and paid as just compensation in the amount of P68,549.01 per hectare. These
facts were admitted by the defendants Land Bank and DAR x x x.
xxxx
After due consideration of the Motion for Reconsideration, and taking into consideration the Plaintiffs
[sic] Commissioners Report submitted to the Court as well as his testimony and the admission of the
defendants x x x, and also other factors such as location, neighborhood, utility, size and the time
element involved, the price paid by the defendant Land Bank of the property of Roger Lim, brother of
the herein plaintiffs in the amount of P68,000.00 per hectare is adopted which should be the basis for
the full and fair equivalent of the property taken from the owner, so that for the area of 32.8363
hectares subject of acquisition, the Court hereby fixes the total price in the amount of P2,232,868.40.
(Underscoring supplied)
By Decision[14] of November 11, 2005, the Court of Appeals denied petitioners appeal
and ruled that:
The decision of the trial court should be affirmed because the appeal of the defendant appellant Land
Bank is frivolous. The compensation fixed at P68,000 per hectare or Php2,232,868.40 for the entire
32.8363 hectares is not reasonable nor just considering the evidence presented with respect to sales in
the surrounding nearby areas and the trial court did not even consider other factors such as location,
neighborhood, utility, size and time element. The compensation should have been higher but the
plaintiffs-appellees chose no longer to appeal because they alleged that they were too old to further any
appeals and they wanted the money as soon as possible and they wanted an end to the litigation as soon
as possible a wish thwarted by the appeal by the Land Bank.
xxxx
When the evidence pointed preponderantly to the fact that the trial courts computation of just
compensation had already been regarded by the parties as drastically low, any appeal by the Land Bank
to such already drastically low figures would be suspect. (Underscoring supplied)
The appellate court in fact ordered petitioner to pay legal interest of 12% on the
P2,232,868.40 from the time of the taking of the property until actual payment, and
double costs.
Petitioners Motion for Reconsideration was denied by Resolution of March 13, 2006,
[15] hence, this petition,[16] petitioner contending that:
A. The amount of P2,232,868.40 which the Court of Appeals fixed as the just compensation of the
acquired property consisting of 32.8363 hectares, is in clear violation of Section 17 of RA 6657, DAR
AO No. 11, series of 1994, and the Supreme Court ruling in Land Bank of the Philippines vs. Spouses
Vicente Banal and Leonidas Arenas-Banal.[17]
B. The Court of Appeals seriously erred in ordering the payment of interest on the compensation, at
12% per annum reckoned from the time of taking up to the time of actual payment.[18]
C. The Court of Appeals likewise erred in ordering LBP to pay double costs.[19] (Underscoring
supplied)
The threshold issue is whether the RTC erred in simply adopting the price previously
paid by petitioner for the land of respondents brother, and dispensing with the formula
prescribed by DAR Administrative Order No. 6, series of 1992 (DAR AO 6-92), as
amended by DAR Administrative Order No. 11, series of 1994 (DAR AO 11-94).
Petitioner answers the issue in the affirmative, contending that consideration of the
valuation factors under Section 17 of RA 6657 and the formula under DAR AO 11-94 is
mandatory insofar as lands acquired under RA 6657 are concerned.[20] On the other
hand, respondents opine otherwise, contending that Section 17 is merely a guide, the
courts having recourse to other means of determining just compensation, it being a
judicial function.[21]
Petitioners position impresses.
In Land Bank of the Philippines v. Spouses Banal,[22] this Court underscored the
mandatory nature of Section 17 of RA 6657 and DAR AO 6-92, as amended by
DAR AO 11-94, viz:
In determining just compensation, the RTC is required to consider several factors enumerated in
Section 17 of R.A. 6657, as amended, thus:
Sec. 17. Determination of Just Compensation. In determining just
compensation, the cost of acquisition of the land, the current value of like
properties, its nature, actual use and income, the sworn valuation by the owner,
the tax declarations, and the assessment made by government assessors shall be
considered. The social and economic benefits contributed by the farmers and the
farmworkers and by the Government to the property, as well as the non-
payment of taxes or loans secured from any government financing institution on
the said land, shall be considered as additional factors to determine its valuation.
These factors have been translated into a basic formula in [DAR AO 6-92], as amended by [DAR AO
11-94], issued pursuant to the DAR's rule-making power to carry out the object and purposes of R.A.
6657, as amended.
The formula stated in [DAR AO 6-92], as amended, is as follows:
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
LV = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
The above formula shall be used if all the three factors are present, relevant and applicable.
A.1 When the CS factor is not present and CNI and MV are applicable, the formula shall be:
LV = (CNI x 0.9) + (MV x 0.1)
xxxx
While the determination of just compensation involves the exercise of judicial discretion, however,
such discretion must be discharged within the bounds of the law. Here, the RTC wantonly disregarded
R.A. 6657, as amended, and its implementing rules and regulations. ([DAR AO 6-92], as amended by
[DAR AO 11-94]).
xxxx
WHEREFORE, x x x. Civil Case No. 6806 is REMANDED to the RTC x x x. The trial judge is
directed to observe strictly the procedures specified above in determining the proper valuation of
the subject property. (Emphasis and underscoring supplied; citations omitted)
And in LBP v. Celada,[23] this Court set aside the valuation fixed by the RTC of
Tagbilaran, which was based solely on the valuation of neighboring properties, because
it did not apply the DAR valuation formula. The Court explained:
While [the RTC] is required to consider the acquisition cost of the land, the current value of like
properties, its nature, actual use and income, the sworn valuation by the owner, the tax declaration and
the assessments made by the government assessors to determine just compensation, it is equally true
that these factors have been translated into a basic formula by the DAR pursuant to its rule-making
power under Section 49 of R.A. No. 6657. As the government agency principally tasked to implement
the agrarian reform program, it is the DAR's duty to issue rules and regulations to carry out the object
of the law. [The] DAR [Administrative Order] precisely "filled in the details" of Section 17, R.A. No.
6657 by providing a basic formula by which the factors mentioned therein may be taken into account.
The [RTC] was at no liberty to disregard the formula which was devised to implement the said
provision.
It is elementary that rules and regulations issued by administrative bodies to interpret the law which
they are entrusted to enforce, have the force of law, and are entitled to great respect. Administrative
issuances partake of the nature of a statute and have in their favor a presumption of legality. As
such, courts cannot ignore administrative issuances especially when, as in this case, its validity was not
put in issue. Unless an administrative order is declared invalid, courts have no option but to apply
the same. (Emphasis and underscoring supplied; citations omitted)
Consequently, as the amount of P2,232,868 adopted by the RTC in its December 21,
2001 Order was not based on any of the mandatory formulas prescribed in DAR AO 6-
92, as amended by DAR AO 11-94, the Court of Appeals erred when it affirmed the
valuation adopted by the RTC.
The second and more important issue is the correct valuation of the property. Petitioner
asserts that the valuation of P947,956.68 computed by Commissioner Empleo is based
on DAR AO 6-92, as amended by DAR AO 11-94, and should, therefore, be upheld.[24]
On this score, the petition fails.
The pertinent portions of Item II of DAR AO 6-92, as amended by DAR AO 11-94,

provide:
A. There shall be one basic formula for the valuation of lands covered by [Voluntary Offer to Sell] or
[Compulsory Acquisition] regardless of the date of offer or coverage of the claim:
LV = (CNI x 0.6) + (CS x 0.3) + (MV x 0.1)
Where: = Land Value
CNI = Capitalized Net Income
CS = Comparable Sales
MV = Market Value per Tax Declaration
The above formula shall be used if all the three factors are present, relevant and applicable.
A.1 When the CS factor is not present [25] and CNI and MV are applicable, the formula shall be:
LV = (CNI x 0.9) + (MV x 0.1)
xxxx
A.5 For purposes of this Administrative Order, the date of receipt of claimfolder by LBP from DAR
shall mean the date when the claimfolder is determined by the LBP to be complete with all the required
documents and valuation inputs duly verified and validated, and is ready for final
computation/processing.
A.6 The basic formula in the grossing-up of valuation inputs such as x x x Market Value per Tax
Declaration (MV) shall be:
Valuation input x
Grossed-up
= Regional Consumer Price
Valuation Input
Index (RCPI) Adjustment
Factor
The RCPI Adjustment Factor shall refer to the ratio of RCPI for the month issued by the National
Statistics Office as of the date when the claimfolder (CF) was received by LBP from DAR for
processing or, in its absence, the most recent available RCPI for the month issued prior to the date of
receipt of CF from DAR and the RCPI for the month as of the date/effectivity/registration of the
valuation input. Expressed in equation form:
RCPI for the Month as of the
Date of Receipt of Claimfolder by
LBP from DAR or the Most recent
RCPI for the Month Issued Prior
RCPI
to the Date of Receipt of CF
Adjustment =
Factor
RCPI for the Month Issued as of
the Date / Effectivity /
Registration of the Valuation
Input
B. Capitalized Net Income (CNI) This shall refer to the difference between the gross sales (AGP x SP)
and total cost of operations (CO) capitalized at 12%.
Expressed in equation form:
CNI = (AGP x SP) CO
.12
Where: CNI = Capitalized Net Income
AGP = Latest available 12-months gross production immediately preceding the date of offer in case
of VOS or date of notice of coverage in case of CA.
SP = The average of the latest available 12-months selling prices prior to the date of receipt of the
claimfolder by LBP for processing, such prices to be secured from the Department of Agriculture
(DA) and other appropriate regulatory bodies or, in their absence, from the Bureau of Agricultural
Statistics. If possible, SP data shall be gathered from the barangay or municipality where the property is
located. In the absence thereof, SP may be secured within the province or region.
CO = Cost of Operations
Whenever the cost of operations could not be obtained or verified, an assumed net income rate (NIR) of
20% shall be used. Landholdings planted to coconut which are productive at the time of offer/coverage
shall continue to use the 70% NIR. DAR and LBP shall continue to conduct joint industry studies to
establish the applicable NIR for each crop covered under CARP.
.12 = Capitalization Rate
xxxx
D. In the computation of Market Value per Tax Declaration (MV), the most recent Tax Declaration
(TD) and Schedule of Unit Market Value (SMV) issued prior to receipt of claimfolder by LBP
shall be considered. The Unit Market Value (UMV) shall be grossed up from the date of its effectivity
up to the date of receipt of claimfolder by LBP from DAR for processing, in accordance with item
II.A.A.6. (Emphasis and underscoring supplied)
Thus, in computing Capitalized Net Income (CNI), the Average Gross Production (AGP)
of the latest available 12 months immediately preceding the date of notice of coverage,
and the average Selling Price (SP) of the latest available 12 months prior to the date of
receipt of the claimfolder by LBP for processing, should be used.
While both dates are not indicated in the records, the date of notice of coverage would
have to be sometime prior to February 1994, which is the date of the Field Investigation
Report,[26] because under DAR Administrative Order No. 9, series of 1990,[27] as
amended by DAR Administrative Order No. 1, series of 1993, the field investigation is
conducted after the notice of coverage is issued to the landowner. Also, the claimfolder
would have been received by LBP on or before 1996, the year the property was
distributed to the agrarian reform beneficiaries,[28] because land distribution is the last
step in the procedure prescribed by the said administrative orders. Thus, the data for the
AGP should pertain to a period prior to February 1994, while the data for the SP should
pertain to 1996 or earlier.
However, Commissioner Empleo instead used the available data prior to [January 1999,
the] date of [his ocular inspection][29] for the AGP, and the [a]verage selling price for
the period January 1998 to December 1998[30] for the SP, contrary to DAR AO 6-92, as
amended by DAR AO 11-94.
Secondly, the Regional Consumer Price Index (RCPI) Adjustment Factor, which is used
in computing the market value of the property, is the ratio of the RCPI for the month
when the claimfolder was received by LBP, to the RCPI for the month of the registration
of the most recent Tax Declaration and Schedule of Unit Market Value[31] issued prior
to receipt of claimfolder by LBP. Consistent with the earlier discussion, the applicable
RCPIs should therefore be dated on or before 1996.
However, Commissioner Empleo instead used the RCPIs for December 1998 and
January 1997 in computing the RCPI Adjustment Factor,[32] again, contrary to DAR
AO 6-92, as amended by DAR AO 11-94.
Parenthetically, Commissioner Empleo testified[33] that his computations were based on

DAR Administrative Order No. 5, series of 1998.[34] However, as this administrative
order took effect only on May 11, 1998, the applicable valuation rules in this case
remain to be those prescribed by DAR AO 6-92, as amended by DAR AO 11-94.
In any event, even if the 1998 valuation rules were applied, the data for the AGP would
still pertain to a period prior to February 1994,[35] the revised reference date being the
date of the field investigation, while the data for the SP and the RCPIs would still pertain
to 1996 or earlier, there being no substantial revisions in their reference dates.
Finally, while the Field Investigation Report[36] shows that the representatives of
petitioner, the DAR, and the Barangay Agrarian Reform Committee, all observed that,
except for seven hectares, the whole area of the property was planted with coconut
intercropped with abaca or vice-versa, Commissioner Empleo did not take this into
account in his computation, contrary to DAR AO 6-92, as amended by DAR AO 11-94
which provides that the [t]otal income shall be computed from the combination of crops
actually produced on the covered land whether seasonal or permanent.[37]
For all the above reasons, the valuation asserted by petitioner must be rejected.
The Court notes that this case has been pending for almost a decade, and commiserates
with respondents. However, while the Court wants to write finis to this case by
computing the just compensation due to respondents, the evidence on record is not
sufficient for the Court to do so in accordance with DAR AO 6-92, as amended by DAR
AO 11-94.
The Court is thus compelled to remand the case for determination of the valuation of the
property by the RTC which is mandated to consider the factors provided under above
quoted Section 17 of RA 6657, as amended, as translated into the formula prescribed in
DAR AO 6-92, as amended by DAR AO 11-94.[38]
Furthermore, upon its own initiative, or at the instance of any of the parties, the RTC
may again appoint one or more commissioners to examine, investigate and ascertain
facts relevant to the dispute including the valuation of properties, and to file a written
report thereof with the RTC.[39]
The amount determined by the RTC would be the basis of the interest income on the
cash and bond deposits due respondents from the time of the taking of the property up to
the time of actual payment of just compensation.[40]
WHEREFORE, the November 11, 2005 Decision and March 13, 2006 Resolution of
the Court of Appeals in CA-G.R. CV No. 73881 are REVERSED and SET ASIDE.
Civil Case No. 98-6432 is REMANDED to the court of origin, Branch 52 of the
Regional Trial Court of Sorsogon, Sorsogon, which is directed to determine with
dispatch the just compensation due respondents strictly in accordance with the
procedures specified above.
SO ORDERED.
CONCHITA CARPIO MORALES

Associate Justice
FIRST DIVISION
[G.R. No. 106804. August 12, 2004]
NATIONAL POWER CORPORATION, petitioner, vs. COURT OF APPEALS and ANTONINO
POBRE, respondents.
DECISION
CARPIO, J.:
The Case
Before us is a petition for review[1] of the 30 March 1992 Decision[2] and 14 August 1992 Resolution of
the Court of Appeals in CA-G.R. CV No. 16930. The Court of Appeals affirmed the Decision[3] of the
Regional Trial Court, Branch 17, Tabaco, Albay in Civil Case No. T-552.
The Antecedents
Petitioner National Power Corporation (NPC) is a public corporation created to generate geothermal,
hydroelectric, nuclear and other power and to transmit electric power nationwide.[4] NPC is authorized
by law to acquire property and exercise the right of eminent domain.
Private respondent Antonino Pobre (Pobre) is the owner of a 68,969 square-meter land (Property)
located in Barangay Bano, Municipality of Tiwi, Albay. The Property is covered by TCT No. 4067 and
Subdivision Plan 11-9709.
In 1963, Pobre began developing the Property as a resort-subdivision, which he named as Tiwi Hot
Springs Resort Subdivision. On 12 January 1966, the then Court of First Instance of Albay approved
the subdivision plan of the Property. The Register of Deeds thus cancelled TCT No. 4067 and issued
independent titles for the approved lots. In 1969, Pobre started advertising and selling the lots.
On 4 August 1965, the Commission on Volcanology certified that thermal mineral water and steam
were present beneath the Property. The Commission on Volcanology found the thermal mineral water
and steam suitable for domestic use and potentially for commercial or industrial use.
NPC then became involved with Pobres Property in three instances.
First was on 18 February 1972 when Pobre leased to NPC for one year eleven lots from the approved
subdivision plan.
Second was sometime in 1977, the first time that NPC filed its expropriation case against Pobre to
acquire an 8,311.60 square-meter portion of the Property.[5] On 23 October 1979, the trial court ordered
the expropriation of the lots upon NPCs payment of P25 per square meter or a total amount of
P207,790. NPC began drilling operations and construction of steam wells. While this first expropriation
case was pending, NPC dumped waste materials beyond the site agreed upon by NPC with Pobre. The
dumping of waste materials altered the topography of some portions of the Property. NPC did not act
on Pobres complaints and NPC continued with its dumping.
Third was on 1 September 1979, when NPC filed its second expropriation case against Pobre to acquire
an additional 5,554 square meters of the Property. This is the subject of this petition. NPC needed the
lot for the construction and maintenance of Naglagbong Well Site F-20, pursuant to Proclamation No.
739[6] and Republic Act No. 5092.[7] NPC immediately deposited P5,546.36 with the Philippine
National Bank. The deposit represented 10% of the total market value of the lots covered by the second
expropriation. On 6 September 1979, NPC entered the 5,554 square-meter lot upon the trial courts
issuance of a writ of possession to NPC.
On 10 December 1984, Pobre filed a motion to dismiss the second complaint for expropriation. Pobre
claimed that NPC damaged his Property. Pobre prayed for just compensation of all the lots affected by
NPCs actions and for the payment of damages.
On 2 January 1985, NPC filed a motion to dismiss the second expropriation case on the ground that
NPC had found an alternative site and that NPC had already abandoned in 1981 the project within the
Property due to Pobres opposition.
On 8 January 1985, the trial court granted NPCs motion to dismiss but the trial court allowed Pobre to
adduce evidence on his claim for damages. The trial court admitted Pobres exhibits on the damages
because NPC failed to object.
On 30 August 1985, the trial court ordered the case submitted for decision since NPC failed to appear
to present its evidence. The trial court denied NPCs motion to reconsider the submission of the case for
decision.
NPC filed a petition for certiorari[8] with the then Intermediate Appellate Court, questioning the 30
August 1985 Order of the trial court. On 12 February 1987, the Intermediate Appellate Court dismissed
NPCs petition but directed the lower court to rule on NPCs objections to Pobres documentary exhibits.
On 27 March 1987, the trial court admitted all of Pobres exhibits and upheld its Order dated 30 August
1985. The trial court considered the case submitted for decision.
On 29 April 1987, the trial court issued its Decision in favor of Pobre. The dispositive portion of the
decision reads:
WHEREFORE, premises considered, judgment is hereby rendered in favor of the defendant and
against the plaintiff, ordering the plaintiff to pay unto the defendant:
(1) The sum of THREE MILLION FOUR HUNDRED FORTY EIGHT THOUSAND FOUR
HUNDRED FIFTY (P3,448,450.00) PESOS which is the fair market value of the subdivision
of defendant with an area of sixty eight thousand nine hundred sixty nine (68,969) square
meters, plus legal rate of interest per annum from September 6, 1979 until the whole amount
is paid, and upon payment thereof by the plaintiff the defendant is hereby ordered to execute
the necessary Deed of Conveyance or Absolute Sale of the property in favor of the plaintiff;
(2) The sum of ONE HUNDRED FIFTY THOUSAND (P150,000.00) PESOS for and as attorneys
fees.
Costs against the plaintiff.
SO ORDERED.[9]
On 13 July 1987, NPC filed its motion for reconsideration of the decision. On 30 October 1987, the
trial court issued its Order denying NPCs motion for reconsideration.
NPC appealed to the Court of Appeals. On 30 March 1992, the Court of Appeals upheld the decision of
the trial court but deleted the award of attorneys fees. The dispositive portion of the decision reads:
WHEREFORE, by reason of the foregoing, the Decision appealed from is AFFIRMED with the
modification that the award of attorneys fees is deleted. No pronouncement as to costs.
SO ORDERED.[10]
The Court of Appeals denied NPCs motion for reconsideration in a Resolution dated 14 August 1992.
The Ruling of the Trial Court
In its 69-page decision, the trial court recounted in great detail the scale and scope of the damage NPC
inflicted on the Property that Pobre had developed into a resort-subdivision. Pobres Property suffered
permanent injury because of the noise, water, air and land pollution generated by NPCs geothermal
plants. The construction and operation of the geothermal plants drastically changed the topography of
the Property making it no longer viable as a resort-subdivision. The chemicals emitted by the
geothermal plants damaged the natural resources in the Property and endangered the lives of the
residents.
NPC did not only take the 8,311.60 square-meter portion of the Property, but also the remaining area of
the 68,969 square-meter Property. NPC had rendered Pobres entire Property useless as a resort-
subdivision. The Property has become useful only to NPC. NPC must therefore take Pobres entire
Property and pay for it.
The trial court found the following badges of NPCs bad faith: (1) NPC allowed five years to pass
before it moved for the dismissal of the second expropriation case; (2) NPC did not act on Pobres plea
for NPC to eliminate or at least reduce the damage to the Property; and (3) NPC singled out Pobres
Property for piecemeal expropriation when NPC could have expropriated other properties which were
not affected in their entirety by NPCs operation.
The trial court found the just compensation to be P50 per square meter or a total of P3,448,450 for
Pobres 68,969 square-meter Property. NPC failed to contest this valuation. Since NPC was in bad faith
and it employed dilatory tactics to prolong this case, the trial court imposed legal interest on the
P3,448,450 from 6 September 1979 until full payment. The trial court awarded Pobre attorneys fees of
P150,000.
The Ruling of the Court of Appeals
The Court of Appeals affirmed the decision of the trial court. However, the appellate court deleted the
award of attorneys fees because Pobre did not properly plead for it.
The Issues
NPC claims that the Court of Appeals committed the following errors that warrant reversal of the
appellate courts decision:
1. In not annulling the appealed Decision for having been rendered by the trial court with grave abuse
of discretion and without jurisdiction;
2. In holding that NPC had taken the entire Property of Pobre;
3. Assuming arguendo that there was taking of the entire Property, in not excluding from the Property
the 8,311.60 square-meter portion NPC had previously expropriated and paid for;
4. In holding that the amount of just compensation fixed by the trial court at P3,448,450.00 with
interest from September 6, 1979 until fully paid, is just and fair;
5. In not holding that the just compensation should be fixed at P25.00 per square meter only as what
NPC and Pobre had previously mutually agreed upon; and
6. In not totally setting aside the appealed Decision of the trial court.[11]
Procedural Issues
NPC, represented by the Office of the Solicitor General, insists that at the time that it moved for the
dismissal of its complaint, Pobre had yet to serve an answer or a motion for summary judgment on
NPC. Thus, NPC as plaintiff had the right to move for the automatic dismissal of its complaint. NPC
relies on Section 1, Rule 17 of the 1964 Rules of Court, the Rules then in effect. NPC argues that the
dismissal of the complaint should have carried with it the dismissal of the entire case including Pobres
counterclaim.
NPCs belated attack on Pobres claim for damages must fail. The trial courts reservation of Pobres right
to recover damages in the same case is already beyond review. The 8 January 1985 Order of the trial
court attained finality when NPC failed to move for its reconsideration within the 15-day reglementary
period. NPC opposed the order only on 27 May 1985 or more than four months from the issuance of
the order.
We cannot fault the Court of Appeals for not considering NPCs objections against the subsistence of
Pobres claim for damages. NPC neither included this issue in its assignment of errors nor discussed it
in its appellants brief. NPC also failed to question the trial courts 8 January 1985 Order in the petition
for certiorari[12] it had earlier filed with the Court of Appeals. It is only before this Court that NPC now
vigorously assails the preservation of Pobres claim for damages. Clearly, NPCs opposition to the
existence of Pobres claim for damages is a mere afterthought. Rules of fair play, justice and due
process dictate that parties cannot raise an issue for the first time on appeal.[13]
We must correct NPCs claim that it filed the notice of dismissal just shortly after it had filed the
complaint for expropriation. While NPC had intimated several times to the trial court its desire to
dismiss the expropriation case it filed on 5 September 1979,[14] it was only on 2 January 1985 that NPC
filed its notice of dismissal.[15] It took NPC more than five years to actually file the notice of dismissal.
Five years is definitely not a short period of time. NPC obviously dilly-dallied in filing its notice of
dismissal while NPC meanwhile burdened Pobres property rights.
Even a timely opposition against Pobres claim for damages would not yield a favorable ruling for NPC.
It is not Section 1, Rule 17 of the 1964 Rules of Court that is applicable to this case but Rule 67 of the
same Rules, as well as jurisprudence on expropriation cases. Rule 17 referred to dismissal of civil
actions in general while Rule 67 specifically governed eminent domain cases.
Eminent domain is the authority and right of the state, as sovereign, to take private property for public
use upon observance of due process of law and payment of just compensation.[16] The power of
eminent domain may be validly delegated to the local governments, other public entities and public
utilities[17] such as NPC. Expropriation is the procedure for enforcing the right of eminent domain.[18]
Eminent Domain was the former title of Rule 67 of the 1964 Rules of Court. In the 1997 Rules of Civil
Procedure, which took effect on 1 July 1997, the prescribed method of expropriation is still found in
Rule 67, but its title is now Expropriation.
Section 1, Rule 17 of the 1964 Rules of Court provided the exception to the general rule that the
dismissal of the complaint is addressed to the sound discretion of the court.[19] For as long as all of the
elements of Section 1, Rule 17 were present the dismissal of the complaint rested exclusively on the
plaintiffs will.[20] The defending party and even the courts were powerless to prevent the dismissal.[21]
The courts could only accept and record the dismissal.[22]
A plain reading of Section 1, Rule 17 of the 1964 Rules of Court makes it obvious that this rule was not
intended to supplement Rule 67 of the same Rules. Section 1, Rule 17 of the 1964 Rules of Court,
provided that:
SECTION 1. Dismissal by the plaintiff. An action may be dismissed by the plaintiff without order of
court by filing a notice of dismissal at any time before service of the answer or of a motion for
summary judgment. Unless otherwise stated in the notice, the dismissal is without prejudice, except
that a notice operates as an adjudication upon the merits when filed by a plaintiff who has once
dismissed in a competent court an action based on or including the same claim. A class suit shall not be
dismissed or compromised without approval of the court.
While Section 1, Rule 17 spoke of the service of answer or summary judgment, the Rules then did not
require the filing of an answer or summary judgment in eminent domain cases.[23] In lieu of an answer,
Section 3 of Rule 67 required the defendant to file a single motion to dismiss where he should present
all of his objections and defenses to the taking of his property for the purpose specified in the
complaint.[24] In short, in expropriation cases under Section 3 of Rule 67, the motion to dismiss took the
place of the answer.
The records show that Pobre had already filed and served on NPC his motion to dismiss/answer[25] even
before NPC filed its own motion to dismiss. NPC filed its notice of dismissal of the complaint on 2
January 1985. However, as early as 10 December 1984, Pobre had already filed with the trial court and
served on NPC his motion to dismiss/answer. A certain Divina Cerela received Pobres pleading on
behalf of NPC.[26] Unfortunately for NPC, even Section 1, Rule 17 of the 1964 Rules of Court could
not save its cause.
NPC is in no position to invoke Section 1, Rule 17 of the 1964 Rules of Court. A plaintiff loses his
right under this rule to move for the immediate dismissal of the complaint once the defendant had
served on the plaintiff the answer or a motion for summary judgment before the plaintiff could file his
notice of dismissal of the complaint.[27] Pobres motion to dismiss/answer, filed and served way ahead of
NPCs motion to dismiss, takes the case out of Section 1, Rule 17 assuming the same applies.
In expropriation cases, there is no such thing as the plaintiffs matter of right to dismiss the complaint
precisely because the landowner may have already suffered damages at the start of the taking. The
plaintiffs right in expropriation cases to dismiss the complaint has always been subject to court
approval and to certain conditions.[28] The exceptional right that Section 1, Rule 17 of the 1964 Rules
of Court conferred on the plaintiff must be understood to have applied only to other civil actions. The
1997 Rules of Civil Procedure abrogated this exceptional right.[29]
The power of eminent domain is subject to limitations. A landowner cannot be deprived of his right
over his land until expropriation proceedings are instituted in court.[30] The court must then see to it that
the taking is for public use, there is payment of just compensation and there is due process of law.[31]
If the propriety of the taking of private property through eminent domain is subject to judicial scrutiny,
the dismissal of the complaint must also pass judicial inquiry because private rights may have suffered
in the meantime. The dismissal, withdrawal or abandonment of the expropriation case cannot be made
arbitrarily. If it appears to the court that the expropriation is not for some public use,[32] then it becomes
the duty of the court to dismiss the action.[33] However, when the defendant claims that his land
suffered damage because of the expropriation, the dismissal of the action should not foreclose the
defendants right to have his damages ascertained either in the same case or in a separate action.[34]
Thus, NPCs theory that the dismissal of its complaint carried with it the dismissal of Pobres claim for
damages is baseless. There is nothing in Rule 67 of the 1964 Rules of Court that provided for the
dismissal of the defendants claim for damages, upon the dismissal of the expropriation case. Case law
holds that in the event of dismissal of the expropriation case, the claim for damages may be made either
in a separate or in the same action, for all damages occasioned by the institution of the expropriation
case.[35] The dismissal of the complaint can be made under certain conditions, such as the reservation of
the defendants right to recover damages either in the same or in another action.[36] The trial court in this
case reserved Pobres right to prove his claim in the same case, a reservation that has become final due
to NPCs own fault.
Factual Findings of the Trial and Appellate Courts Bind the Court
The trial and appellate courts held that even before the first expropriation case, Pobre had already
established his Property as a resort-subdivision. NPC had wrought so much damage to the Property that
NPC had made the Property uninhabitable as a resort-subdivision. NPCs facilities such as steam wells,
nag wells, power plants, power lines, and canals had hemmed in Pobres Property. NPCs operations of
its geothermal project also posed a risk to lives and properties.
We uphold the factual findings of the trial and appellate courts. Questions of facts are beyond the pale
of Rule 45 of the Rules of Court as a petition for review may only raise questions of law.[37] Moreover,
factual findings of the trial court, particularly when affirmed by the Court of Appeals, are generally
binding on this Court.[38] We thus find no reason to set aside the two courts factual findings.
NPC points out that it did not take Pobres 68,969 square-meter Property. NPC argues that assuming
that it is liable for damages, the 8,311.60 square-meter portion that it had successfully expropriated and
fully paid for should have been excluded from the 68,969 square-meter Property that Pobre claims NPC
had damaged.
We are not persuaded.
In its 30 October 1987 Order denying NPCs motion for reconsideration, the trial court pointed out that
the Property originally had a total area of 141,300 square meters.[39] Pobre converted the Property into a
resort-subdivision and sold lots to the public. What remained of the lots are the 68,969 square meters of
land.[40] Pobre no longer claimed damages for the other lots that he had before the expropriation.
Pobre identified in court the lots forming the 68,969 square-meter Property. NPC had the opportunity to
object to the identification of the lots.[41] NPC, however, failed to do so. Thus, we do not disturb the
trial and appellate courts finding on the total land area NPC had damaged.
NPC must Pay Just Compensation for the Entire Property
Ordinarily, the dismissal of the expropriation case restores possession of the expropriated land to the
landowner.[42] However, when possession of the land cannot be turned over to the landowner because it
is neither convenient nor feasible anymore to do so, the only remedy available to the aggrieved
landowner is to demand payment of just compensation.[43]
In this case, we agree with the trial and appellate courts that it is no longer possible and practical to
restore possession of the Property to Pobre. The Property is no longer habitable as a resort-subdivision.
The Property is worthless to Pobre and is now useful only to NPC. Pobre has completely lost the
Property as if NPC had physically taken over the entire 68,969 square-meter Property.
In United States v. Causby,[44] the U.S. Supreme Court ruled that when private property is rendered
uninhabitable by an entity with the power to exercise eminent domain, the taking is deemed complete.
Such taking is thus compensable.
In this jurisdiction, the Court has ruled that if the government takes property without expropriation and
devotes the property to public use, after many years the property owner may demand payment of just
compensation.[45] This principle is in accord with the constitutional mandate that private property shall
not be taken for public use without just compensation.[46]
In the recent case of National Housing Authority v. Heirs of Isidro Guivelondo,[47] the Court
compelled the National Housing Authority (NHA) to pay just compensation to the landowners even
after the NHA had already abandoned the expropriation case. The Court pointed out that a government
agency could not initiate expropriation proceedings, seize a persons property, and then just decide not
to proceed with the expropriation. Such a complete turn-around is arbitrary and capricious and was
condemned by the Court in the strongest possible terms. NHA was held liable to the landowners for the
prejudice that they had suffered.
In this case, NPC appropriated Pobres Property without resort to expropriation proceedings. NPC
dismissed its own complaint for the second expropriation. At no point did NPC institute expropriation
proceedings for the lots outside the 5,554 square-meter portion subject of the second expropriation. The
only issues that the trial court had to settle were the amount of just compensation and damages that
NPC had to pay Pobre.
This case ceased to be an action for expropriation when NPC dismissed its complaint for expropriation.
Since this case has been reduced to a simple case of recovery of damages, the provisions of the Rules
of Court on the ascertainment of the just compensation to be paid were no longer applicable. A trial
before commissioners, for instance, was dispensable.
We have held that the usual procedure in the determination of just compensation is waived when the
government itself initially violates procedural requirements.[48] NPCs taking of Pobres property without
filing the appropriate expropriation proceedings and paying him just compensation is a transgression of
procedural due process.
From the beginning, NPC should have initiated expropriation proceedings for Pobres entire 68,969
square-meter Property. NPC did not. Instead, NPC embarked on a piecemeal expropriation of the
Property. Even as the second expropriation case was still pending, NPC was well aware of the damage
that it had unleashed on the entire Property. NPC, however, remained impervious to Pobres repeated
demands for NPC to abate the damage that it had wrought on his Property.
NPC moved for the dismissal of the complaint for the second expropriation on the ground that it had
found an alternative site and there was stiff opposition from Pobre.[49] NPC abandoned the second
expropriation case five years after it had already deprived the Property virtually of all its value. NPC
has demonstrated its utter disregard for Pobres property rights.
Thus, it would now be futile to compel NPC to institute expropriation proceedings to determine the just
compensation for Pobres 68,969 square-meter Property. Pobre must be spared any further delay in his
pursuit to receive just compensation from NPC.
Just compensation is the fair and full equivalent of the loss.[50] The trial and appellate courts
endeavored to meet this standard. The P50 per square meter valuation of the 68,969 square-meter
Property is reasonable considering that the Property was already an established resort-subdivision. NPC
has itself to blame for not contesting the valuation before the trial court. Based on the P50 per square
meter valuation, the total amount of just compensation that NPC must pay Pobre is P3,448,450.
The landowner is entitled to legal interest on the price of the land from the time of the taking up to the
time of full payment by the government.[51] In accord with jurisprudence, we fix the legal interest at six
per cent (6%) per annum.[52] The legal interest should accrue from 6 September 1979, the date when the
trial court issued the writ of possession to NPC, up to the time that NPC fully pays Pobre.[53]
NPCs abuse of its eminent domain authority is appalling. However, we cannot award moral damages
because Pobre did not assert his right to it.[54] We also cannot award attorneys fees in Pobres favor since
he did not appeal from the decision of the Court of Appeals denying recovery of attorneys fees.[55]
Nonetheless, we find it proper to award P50,000 in temperate damages to Pobre. The court may award
temperate or moderate damages, which are more than nominal but less than compensatory damages, if
the court finds that a party has suffered some pecuniary loss but its amount cannot be proved with
certainty from the nature of the case.[56] As the trial and appellate courts noted, Pobres resort-
subdivision was no longer just a dream because Pobre had already established the resort-subdivision
and the prospect for it was initially encouraging. That is, until NPC permanently damaged Pobres
Property. NPC did not just destroy the property. NPC dashed Pobres hope of seeing his Property
achieve its full potential as a resort-subdivision.
The lesson in this case must not be lost on entities with eminent domain authority. Such entities cannot
trifle with a citizens property rights. The power of eminent domain is an extraordinary power they must
wield with circumspection and utmost regard for procedural requirements. Thus, we hold NPC liable
for exemplary damages of P100,000. Exemplary damages or corrective damages are imposed, by way
of example or correction for the public good, in addition to the moral, temperate, liquidated or
compensatory damages.[57]
WHEREFORE, we DENY the petition for lack of merit. The appealed Decision of the Court of
Appeals dated 30 March 1992 in CA-G.R. CV No. 16930 is AFFIRMED with MODIFICATION.
National Power Corporation is ordered to pay Antonino Pobre P3,448,450 as just compensation for the
68,969 square-meter Property at P50 per square meter. National Power Corporation is directed to pay
legal interest at 6% per annum on the amount adjudged from 6 September 1979 until fully paid. Upon
National Power Corporations payment of the full amount, Antonino Pobre is ordered to execute a Deed
of Conveyance of the Property in National Power Corporations favor. National Power Corporation is
further ordered to pay temperate and exemplary damages of P50,000 and P100,000, respectively. No
costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Quisumbing, Ynares-Santiago, and Azcuna, JJ., concur.

SUPREME COURT
Manila
EN BANC
G.R. No. L-14242 September 20, 1920
JULIAN REYES, ET AL., plaintiffs-appellant,
vs.
FRANCISCA CORDERO, MARIA CORDERO, and AMANDO GATMAITAN, defendants-
appellees.
Gabriel N. Trinidad and Fernando Torrillo for appellants.
Ambrosio Santos for appellee Gatmaitan.
No appearance for the other appellees.
ARAULLO, J.:
The complaint presented in the Court of First Instance of Bulacan prayed that after trial judgment be
rendered ordering the partition, in accordance with law, of the land described in paragraph 2 thereof. To
this end the plaintiffs alleged that they and the defendants Francisca Cordero and Maria Cordero were
the descendants of the owner of said parcel of land, Leon Alfaro, who died long ago in the municipality
of Paombong, Province of Bulacan; that upon his death one of his daughter, Felipa Alfaro, now
deceased, mother of the defendants Francisca and Maria Cordero, succeeded him in the possession
thereof; and that said land was still undivided property of the heirs. It was also alleged in paragraph 6
of the complaint that the other defendant, Amando Gatmaitan, was made a party because he was in
possession of said land, claiming a supposed interest adverse to that to the plaintiffs.
To the complaint a demurrer was presented by the defendant Amando Gatmaitan on the grounds of
misjoinder of parties in that he was made a party defendant and that the facts alleged did not constitute
a cause of action as to him. After hearing, the court, by order of February 9, 1918, sustained the
demurrer, to which order the plaintiff excepted. The plaintiffs not having amended their complaint
within the time fixed by the rules of court, the court dismissed the case as to said defendant, Amando
Gatmaitan, to which action of the lower court the plaintiffs also excepted and brought the case to this
court on appeal by bill of exceptions.
The question presented in this proceeding is whether the defendant Amando Gatmaitan, who is neither
a descendant of the deceased Leon Alfaro, nor a coheir or coowner of the plaintiffs and the other two
defendant, as to the land described in the complaint, may be made a party to the suit for partition
instituted by the plaintiffs, or, in other words, whether his joinder as a party defendant was proper.
An action for partition of real property, as the name itself clearly suggests, is a judicial controversy
between persons, who, being coowners or coparceners thereof, seek to secure a division or partition
among them of the common property, giving to each one the part corresponding to him.
The right to bring such action or to ask at any time for the division of the common property belongs
solely to a coowner or coparcener (art. 400, Civil Code, and section 181, Code of Civil Procedure). The
action for partition of real property cannot therefore be instituted except by the coowners or
coparceners of said property, and cannot be maintained against persons who are not such, because in an
action for partition of such property it is an indispensable requisite that there should be common
ownership of the thing and that the parties, plaintiffs and defendants, should be coowners of
coparceners.
NATURE AND OBJECTS OF PARTITION. — The object of partition proceedings is to enable
those who own property as joint tenants, or coparceners or tenants in common, to put an end to
the tenancy so as to vest in each a sole estate in specific property or an allotment of the lands or
tenements. . . . (Ruling Case Law, vol. 20, p. 716, paragraph 2.)
. . . It is generally held that it is a prerequisite to the maintenance of a proceeding for the
compulsory partition of lands that the petitioner have, at the commencement of such
proceeding, an actual or constructive possession, in common with the defendants, of the land
sought to be partitioned. . . . (Id., p. 730, paragraph 13.)
This court has laid down the doctrine in several cases, among them, that of Rodriguez vs. Ravilan (17
Phil., 63), that:
In an action for the partition of property held in common, it is assumed that the parties by whom
it is prosecuted are all coowners or coproprietors of the property to be divided, as he who claims
or demands the partition of property of common ownership must necessarily have the status of
coproprietor of the undivided property.
In such an action for partition the question of common ownership is not to be argued, nor the
fact as to whether the interested parties are or are not the owners of the property in question, but
only as to how, and in what manner, and in what proportion the said property of common
ownership shall be distributed among the interested parties by order of the court.
The appellants admit in their brief that it is not alleged in the complaint that the defendant Amando
Gatmaitan is made a party for the reason that he is owner or possessor of the property in that capacity;
and they state that, as it has been alleged therein that he is possession of the land and claims a supposed
interest opposed to that of the plaintiff, these facts are matters of proof, the burden of which is upon the
plaintiffs. This is just the error committed by the plaintiffs. Had it been alleged that the possession of
the defendant was in the capacity of coowner with the plaintiffs or that his interest opposed to that of
the latter consists in his having been subrogated by assignment, sale, or other mode of transferring
ownership, to the proprietary right which any of the other defendants had in the property in question,
then the joinder of the defendant Gatmaitan as such would have been proper, inasmuch as every
coowner has the absolute right to his part and consequently may alienate, assign, or mortgage it and
even substitute another in its enjoyment, the effect of the alienation being of course limited to the part
which may be adjudicated to him upon the division of the thing in common (art. 399, Civ. Code). Said
defendant, as coowner and coparcener, as to a part of the property, would have the right to be a party to
the partition proceeding, and, in such case, if he is not joined as defendant, he could intervene. This is
the reason why it is provided in section 183 of the Code of Civil Procedure that the complaint in
partition proceedings should, besides stating the nature of the title of the plaintiff and describing the
real property sought to be partitioned, also name as defendant every tenant in common, coheir or other
person interested in said property. But he could by no means be joined in the complaint as defendant,
with the right to prove his common ownership with the plaintiffs and the other two defendants or his
corresponding right to the property, because this would amount to converting the partition proceeding
into another proceeding for ejectment or unlawful entry against said defendant; and it would serve as a
means by which the plaintiffs could investigate the right or interest which the defendant Gatmaitan
claim to possess in the property which is the subject-matter of the complaint for partition.
One who holds property in common and pro indiviso with others has a perfect right to have a
division made of the same. No hindrance to the exercise and effectiveness of this right can lie in
any conveyances made of various portion of the property by some of the cotenants thereof in
favor of other persons, for the law, besides granting these latter the right to a voice in the
division of the thing owned in common and to object to any division made without their
concurrence, considers them, in an action for the partition of real estate, as subrogated to the
rights of the vendors in the portion of the property in their possession. (Arts. 399, 400, 403, and
1051, Civil Code; sec. 762, Code of Civil Procedure.) (Dancel vs. Dancel, 29 Phil., 25.)
. . . It has been held that under a statute providing that during the pendency of any partition suit
any person claiming to be interested in the premises may appear and assert his right, the right to
intervene is given to all persons claiming an interest in the land, whether under the common title
sought to be partitioned or by title independent thereof. But even under statutes allowing the
adjudication of the rights and interests of the parties to a bona fide partition suit, an action for
partition cannot be used as a substitute for the action of ejectment nor for the sole purpose of
testing a legal title. (Ruling Case Law, vol. 20, p. 730, paragraph 12.)
Neither would the doctrine laid down by this court in Araullo vs. Araullo (3 Phil., 567), relied upon by
the plaintiff, justify the joinder of Amando Gatmaitan as defendant, in view of the allegations of the
complaint as to him. In that case, the property sought to be partitioned was in the actual possession of a
third persons who enjoyed possession as owners without being joined as parties to the proceeding, that
is they claimed to be owners of the property by virtue of a title opposed to that both the plaintiff and the
defendants, and the commissioners who were to effect the partition had already been appointed by the
court. This court declared that the proceedings could not be continued because the commissioners
appointed to effect the partition had no right, for the purpose of taking a view as required by law, to
enter lands possessed by third persons as owners, who were not made parties in the partition
proceeding; but the following is stated in the body of the decision: "Whether the persons should be
made parties to the partition suit and their claims there determined, or whether an independent action
must be brought against them, we do not decide." Therefore this court did not hold in that case, as
appellants seem to have understood that in a complaint for partition of property in order that the
proceedings might be continued those persons should be joined as defendants who, being in possession
of the property or part thereof, alleged themselves to be the owners thereof by virtue of a title opposed
to that of the parties to the proceeding, or claim an interest adverse also to theirs; on the contrary the
court abstained from deciding it, and did not determine whether they should be included as parties in
the same proceeding or whether a new and independent action should be instituted against them.
Nevertheless it is indisputable that when the property which is yet undivided among various coowners
has been usurped or is in the possession of a third person who claims a title opposed to that of the
former, the common owners thereof may recover it in a proper proceeding, for, as the supreme court of
Spain has held in its decision of April 6, 1896 (79 Jur. Civ., 641), "Any coowner of an undivided
property may bring an action to recover it for the benefit of all." This once more shows that a person
cannot be joined as defendant, who does not a possess the property as coowner or joint owner, but by
virtue of a title the nature of which is unknown but opposed to those seeking partition thereof as
coowners, or who possesses the same under a claim of interest opposed to the latter. A person who like
the defendant, Amando Gatmaitan, is in this situation, may be sued in another proceeding, but not in a
proceeding for partition.
The demurrer filed by said defendant to the complaint was therefore correctly sustained and the
plaintiffs not having amended it within the time fixed by the rules of court, the dismissal thereof as to
said defendant was proper.
The order appealed from is therefore affirmed, with costs. So ordered.
Mapa, C.J., Johnson, Malcolm, Avanceña and Villamor, JJ., concur.
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 184746 August 8, 2012
SPOUSES CRISPIN GALANG and CARlOAD GALANG, Petitioners,
vs.
SPOUSES CONRADO S. REYES AND FE DE KASTRO REYES (As substituted by their legal
heir: Hermenigildo K. Reyes), Respondents.
REYES,*
DECISION
MENDOZA, J.:
This petition for review on certiorari under Rule 45 seeks to reverse and set aside the April 9, 2008
Decision1 of the Court of Appeals (CA) and its October 6, 2008 Resolution,2 in CA-G.R. CV. No.
85660.
The Facts
On September 4, 1997, spouses Conrado S. Reyes and Fe de Kastro Reyes (the Reyeses) filed a case for
the annulment of Original Certificate of Title (OCT) No. P-928 against spouses Crispin and Caridad
Galang (the Galangs) with the Regional Trial Court, Antipolo, Rizal (RTC),docketed as Civil Case No.
97-4560.
In their Complaint,3 the Reyeses alleged that they owned two properties: (1) a subdivision project
known as Ponderosa Heights Subdivision (Ponderosa), and (2) an adjoining property covered by
Transfer Certificate of Title (TCT) No. 185252, with an area of 1,201 sq.m.;4 that the properties were
separated by the Marigman Creek, which dried up sometime in 1980 when it changed its course and
passed through Ponderosa; that the Galangs, by employing manipulation and fraud, were able to obtain
a certificate of title over the dried up creek bed from the Department of Environment and Natural
Resources (DENR), through its Provincial Office (PENRO); that, specifically, the property was
denominated as Lot 5735, Cad 29 Ext., Case-1, with an area of 1,573 sq.m. covered by OCT No. P-
928; that they discovered the existence of the certificate of title sometime in March 1997 when their
caretaker, Federico Enteroso (Enteroso), informed them that the subject property had been fraudulently
titled in the names of the Galangs; that in 1984, prior to such discovery, Enteroso applied for the titling
of the property, as he had been occupying it since 1968 and had built his house on it; that, later,
Enteroso requested them to continue the application because of financial constraints on his part;5 that
they continued the application, but later learned that the application papers were lost in the Assessor’s
Office;6 and that as the owners of the land where the new course of water passed, they are entitled to
the ownership of the property to compensate them for the loss of the land being occupied by the new
creek.
The Galangs in their Answer7 denied that the land subject of the complaint was part of a creek and
countered that OCT No. P-928 was issued to them after they had complied with the free patent
requirements of the DENR, through the PENRO; that they and their predecessor-in-interest had been in
possession, occupation, cultivation, and ownership of the land for quite some time; that the property
described under TCT No. 185252 belonged to Apolonio Galang, their predecessor-in-interest, under
OCT No. 3991; that the property was transferred in the names of the Reyeses through falsified
document;8 that assuming ex gratia argumenti that the creek had indeed changed its course and passed
through Ponderosa, the Reyeses had already claimed for themselves the portion of the dried creek
which adjoined and co-existed with their property; that Enteroso was able to occupy a portion of their
land by means of force, coercion, machinations, and stealth in 1981; that such unlawful entry was then
the subject of an Accion Publiciana before the RTC of Antipolo City (Branch 72); and that at the time
of the filing of the Complaint, the matter was still subject of an appeal before the CA, under CA-G.R.
CV No. 53509.
The RTC Decision
In its Decision,9 dated July 16, 2004, the RTC dismissed the complaint for lack of cause of action and
for being an erroneous remedy. The RTC stated that a title issued upon a patent may be annulled only
on grounds of actual and intrinsic fraud, which much consist of an intentional omission of fact required
by law to be stated in the application or willful statement of a claim against the truth. In the case before
the trial court, the Reyeses presented no evidence of fraud despite their allegations that the Galangs
were not in possession of the property and that it was part of a dried creek. There being no evidence,
these contentions remained allegations and could not defeat the title of the Galangs. The RTC wrote:
A title issued upon patent may be annulled only on ground of actual fraud.
Such fraud must consist [of] an intentional omission of fact required by law to be stated in
the application or willful statement of a claim against the truth. It must show some specific
facts intended to deceive and deprive another of his right. The fraud must be actual and
intrinsic, not merely constructive or intrinsic; the evidence thereof must be clear,
convincing and more than merely preponderant, because the proceedings which are being
assailed as having been fraudulent are judicial proceedings, which by law, are presumed to
have been fair and regular. (Libudan v. Palma Gil 45 SCRA 17)
However, aside from allegations that defendant Galang is not in possession of the property
and that the property was part of a dried creek, no other sufficient evidence of fraud was
presented by the plaintiffs. They have, thus, remained allegations, which cannot defeat the
defendants title.10
The RTC added that the land, having been acquired through a homestead patent, was presumably
public land. Therefore, only the State can institute an action for the annulment of the title covering it.
It further opined that because the Reyeses claimed to have acquired the property by right of accretion,
they should have filed an action for reconveyance, explaining "[t]hat the remedy of persons whose
property had been wrongly or erroneously registered in another’s name is not to set aside the
decree/title, but an action for reconveyance, or if the property has passed into the hands of an innocent
purchaser for value, an action for damages."11
The Court of Appeals Decision
In its Decision, dated April 9, 2008, the CA reversed and set aside the RTC decision and ordered the
cancellation of OCT No. P-928 and the reconveyance of the land to the Reyeses.
The CA found that the Reyeses had proven by preponderance of evidence that the subject land was a
portion of the creek bed that was abandoned through the natural change in the course of the water,
which had now traversed a portion of Ponderosa. As owners of the land occupied by the new course of
the creek, the Reyeses had become the owners of the abandoned creek bed ipso facto. Inasmuch as the
subject land had become private, a free patent issued over it was null and void and produced no legal
effect whatsoever. A posteriori, the free patent covering the subject land, a private land, and the
certificate of title issued pursuant thereto, are null and void.12
The Galangs moved for a reconsideration,13 but their motion was denied in a Resolution dated October
6, 2008.
Hence, this petition.
Issues
The Galangs present, as warranting a review of the questioned CA decision, the following grounds:
THE HONORABLE COURT OF APPEALS COMMITTED GRAVE ABUSE OF
DISCRETION AMOUNTING TO LACK OF JURISDICTION IN NOT RESOLVING
THAT THE OFFICE OF THE SOLICITOR GENERAL, NOT THE PRIVATE
RESPONDENTS, HAS THE SOLE AUTHORITY TO FILE [CASES FOR]
ANNULMENT OF TITLE INVOLVING PUBLIC LAND.

DISCRETION AMOUNTING TO LACK OF JURISDICTION IN HOLDING THAT
PRIVATE RESPONDENTS HAVE [A] CAUSE OF ACTION AGAINST
PETITIONERS EVEN WITHOUT EXHAUSTION OF ADMINISTRATIVE
REMED[IES].

DISCRETION AMOUNTING TO LACK OF JURISDICTION IN DEVIATING
FROM THE FINDINGS OF FACT OF THE TRIAL COURT AND INTERPRETING
ARTICLE 420 IN RELATION TO ARTICLE 461 OF THE CIVIL CODE OF THE
PHILIPPINES BY SUBSTITUTING ITS OWN OPINION BASED ON
ASSUMPTION OF FACTS.14
A reading of the records discloses that these can be synthesized into two principal issues, to wit: (1)
whether the Reyeses can file the present action for annulment of a free patent title and reconveyance;
and (2) if they can, whether they were able to prove their cause of action against the Galangs.
The Court’s Ruling
Regarding the first issue, the Galangs state that the property was formerly a public land, titled in their
names by virtue of Free Patent No. 045802-96-2847 issued by the DENR. Thus, they posit that the
Reyeses do not have the personality and authority to institute any action for annulment of title because
such authority is vested in the Republic of the Philippines, through the Office of the Solicitor
General.15
In this regard, the Galangs are mistaken. The action filed by the Reyeses seeks the transfer to their
names of the title registered in the names of the Galangs. In their Complaint, they alleged that: first,
they are the owners of the land, being the owners of the properties through which the Marigman creek
passed when it changed its course; and second, the Galangs illegally dispossessed them by having the
same property registered in their names. It was not an action for reversion which requires that the State
be the one to initiate the action in order for it to prosper. The distinction between the two actions was
elucidated in the case of Heirs of Kionisala v. Heirs of Dacut,16 where it was written:
An ordinary civil action for declaration of nullity of free patents and certificates of
title is not the same as an action for reversion. The difference between them lies in the
allegations as to the character of ownership of the realty whose title is sought to be
nullified. In an action for reversion, the pertinent allegations in the complaint would
admit State ownership of the disputed land. Hence in Gabila v. Barriga where the
plaintiff in his complaint admits that he has no right to demand the cancellation or
amendment of the defendant’s title because even if the title were cancelled or amended the
ownership of the land embraced therein or of the portion affected by the amendment would
revert to the public domain, we ruled that the action was for reversion and that the only
person or entity entitled to relief would be the Director of Lands.
On the other hand, a cause of action for declaration of nullity of free patent and
certificate of title would require allegations of the plaintiff’s ownership of the
contested lot prior to the issuance of such free patent and certificate of title as well as
the defendant’s fraud or mistake; as the case may be, in successfully obtaining these
documents of title over the parcel of land claimed by plaintiff. In such a case, the nullity
arises strictly not from the fraud or deceit but from the fact that the land is beyond the
jurisdiction of the Bureau of Lands to bestow and whatever patent or certificate of title
obtained therefor is consequently void ab initio. The real party in interest is not the State
but the plaintiff who alleges a pre-existing right of ownership over the parcel of land
in question even before the grant of title to the defendant. In Heirs of Marciano Nagano
v. Court of Appeals we ruled –
x x x x from the allegations in the complaint x x x private respondents claim

ownership of the 2,250 square meter portion for having possessed it in the
concept of an owner, openly, peacefully, publicly, continuously and adversely
since 1920. This claim is an assertion that the lot is private land x x x x
Consequently, merely on the basis of the allegations in the complaint, the lot in
question is apparently beyond the jurisdiction of the Director of the Bureau of
Lands and could not be the subject of a Free Patent. Hence, the dismissal of
private respondents’ complaint was premature and trial on the merits should
have been conducted to thresh out evidentiary matters. It would have been
entirely different if the action were clearly for reversion, in which case, it would
have to be instituted by the Solicitor General pursuant to Section 101 of C.A.
No. 141 x x x x
It is obvious that private respondents allege in their complaint all the facts necessary to seek
the nullification of the free patents as well as the certificates of title covering Lot 1015 and
Lot 1017. Clearly, they are the real parties in interest in light of their allegations that they
have always been the owners and possessors of the two (2) parcels of land even prior to the
issuance of the documents of title in petitioners’ favor, hence the latter could only have
committed fraud in securing them –
x x x x That plaintiffs are absolute and exclusive owners and in actual

possession and cultivation of two parcels of agricultural lands herein
particularly described as follows [technical description of Lot 1017 and Lot
1015 x x x x 3. That plaintiffs became absolute and exclusive owners of the
abovesaid parcels of land by virtue of inheritance from their late father, Honorio
Dacut, who in turn acquired the same from a certain Blasito Yacapin and from
then on was in possession thereof exclusively, adversely and in the concept of
owner for more than thirty (30) years x x x x 4. That recently, plaintiff
discovered that defendants, without the knowledge and consent of the former,
fraudulently applied for patent the said parcels of land and as a result thereof
certificates of titles had been issued to them as evidenced by certificate of title
No. P-19819 in the name of the Hrs. of Ambrocio Kionisala, and No. P- 20229
in the name of Isabel Kionisala x x x x 5. That the patents issued to defendants
are null and void, the same having been issued fraudulently, defendants not
having been and/or in actual possession of the litigated properties and the
statement they may have made in their application are false and without basis in
fact, and, the Department of Environment and Natural Resources not having
any jurisdiction on the properties the same not being anymore public but
already private property x x x x
It is not essential for private respondents to specifically state in the complaint the actual
date when they became owners and possessors of Lot 1015 and Lot 1017. The allegations
to the effect that they were so preceding the issuance of the free patents and the certificates
of title, i.e., "the Department of Environment and Natural Resources not having any
jurisdiction on the properties the same not being anymore public but already private
property," are unquestionably adequate as a matter of pleading to oust the State of
jurisdiction to grant the lots in question to petitioners. If at all, the oversight in not alleging
the actual date when private respondents’ ownership thereof accrued reflects a mere
deficiency in details which does not amount to a failure to state a cause of action. The
remedy for such deficiency would not be a motion to dismiss but a motion for bill of
particulars so as to enable the filing of appropriate responsive pleadings.
With respect to the purported cause of action for reconveyance, it is settled that in this kind
of action the free patent and the certificate of title are respected as incontrovertible. What is
sought instead is the transfer of the property, in this case the title thereof, which has
been wrongfully or erroneously registered in the defendant’s name. All that must be
alleged in the complaint are two (2) facts which admitting them to be true would
entitle the plaintiff to recover title to the disputed land, namely, (1) that the plaintiff
was the owner of the land and, (2) that the defendant had illegally dispossessed him of
the same.
We rule that private respondents have sufficiently pleaded (in addition to the cause of
action for declaration of free patents and certificates of title) an action for reconveyance,
more specifically, one which is based on implied trust. An implied trust arises where the
defendant (or in this case petitioners) allegedly acquires the disputed property through
mistake or fraud so that he (or they) would be bound to hold and reconvey the property for
the benefit of the person who is truly entitled to it. In the complaint, private respondents
clearly assert that they have long been the absolute and exclusive owners and in actual
possession and cultivation of Lot 1015 and Lot 1017 and that they were fraudulently
deprived of ownership thereof when petitioners obtained free patents and certificates of title
in their names. These allegations certainly measure up to the requisite statement of facts to
constitute an action for reconveyance.17 [Emphases supplied]
In this case, the complaint instituted by the Reyeses before the RTC was for the annulment of the title
issued to the Galangs, and not for reversion. Thus, the real party in interest here is not the State but the
Reyeses who claim a right of ownership over the property in question even before the issuance of a title
in favor of the Galangs. Although the Reyeses have the right to file an action for reconveyance, they
have failed to prove their case. Thus, on the second issue, the Court agrees with the RTC that the
Reyeses failed to adduce substantial evidence to establish their allegation that the Galangs had
fraudulently registered the subject property in their names.
The CA reversed the RTC decision giving the reason that the property was the former bed of Marigman
Creek, which changed its course and passed through their Ponderosa property, thus, ownership of the
subject property was automatically vested in them.
The law in this regard is covered by Article 461 of the Civil Code, which provides:
Art. 461. River beds which are abandoned through the natural change in the course of the
waters ipso facto belong to the owners whose lands are occupied by the new course in
proportion to the area lost. However, the owners of the lands adjoining the old bed shall
have the right to acquire the same by paying the value thereof, which value shall not exceed
the value of the area occupied by the new bed.
If indeed a property was the former bed of a creek that changed its course and passed through the
property of the claimant, then, pursuant to Article 461, the ownership of the old bed left to dry by the
change of course was automatically acquired by the claimant.18 Before such a conclusion can be
reached, the fact of natural abandonment of the old course must be shown, that is, it must be proven
that the creek indeed changed its course without artificial or man-made intervention. Thus, the
claimant, in this case the Reyeses, must prove three key elements by clear and convincing evidence.
These are: (1) the old course of the creek, (2) the new course of the creek, and (3) the change of course
of the creek from the old location to the new location by natural occurrence.
In this regard, the Reyeses failed to adduce indubitable evidence to prove the old course, its natural
abandonment and the new course. In the face of a Torrens title issued by the government, which is
presumed to have been regularly issued, the evidence of the Reyeses was clearly wanting.
Uncorroborated testimonial evidence will not suffice to convince the Court to order the reconveyance
of the property to them. This failure did not escape the observation of the Office of the Solicitor
General. Thus, it commented:
In the case at bar, it is not clear whether or not the Marigman Creek dried-up naturally
back in 1980. Neither did private respondents submit any findings or report from the
Bureau of Lands or the DENR Regional Executive Director, who has the jurisdiction over
the subject lot, regarding the nature of change in the course of the creek’s waters. Worse,
what is even uncertain in the present case is the exact location of the subject matter of
dispute. This is evident from the decision of the Regional Trial Court which failed to
specify which portion of the land is actually being disputed by the contending parties.
xxx
Since the propriety of the remedy taken by private respondents in the trial court and their
legal personality to file the aforesaid action depends on whether or not the litigated property
in the present case still forms part of the public domain, or had already been converted into
a private land, the identification of the actual portion of the land subject of the
controversy becomes necessary and indispensable in deciding the issues herein involved.
xxx
Notably, private respondents failed to submit during trial any convincing proof of a similar
declaration by the government that a portion of the Marigman Creek had already dried-up
and that the same is already considered alienable and disposable agricultural land which
they could acquire through acquisitive prescription.
Indeed, a thorough investigation is very imperative in the light of the conflicting factual
issues as to the character and actual location of the property in dispute. These factual issues
could properly be resolved by the DENR and the Land Management Bureau, which have
the authority to do so and have the duty to carry out the provisions of the Public Land Act,
after both parties have been fully given the chance to present all their evidence.19
[Emphases supplied]
Moreover, during cross-examination, Conrado S. Reyes admitted that the plan surveyed for Fe de
Castro Reyes and Jose de Castro, marked before the RTC as Exhibit "A-2," was prepared by a geodetic
engineer without conducting an actual survey on the ground:
COUNSEL FOR DEFENDANTS:
I am showing to you Exhibit "A-2" which is a plan surveyed for Fe de Kastro Reyes and
Jose de Kastro. This plan was prepared by the geodetic engineer without conducting actual
survey on the ground, is it not?
A: I cannot agree to that question.
Q: But based on the certification of the geodetic engineer, who prepared this it appears that
this plan was plotted only based on the certification on this plan marked as Exhibit "A-2",
is it not?
A: Yes, sir.
Q: So, based on this certification that the geodetic engineer conducted the survey of this
plan based on the technical description without conducting actual survey on the ground?
A: Yes, sir.20
At some point, Mr. Reyes admitted that he was not sure that the property even existed:
COUNSEL FOR DEFENDANTS:
The subject matter of this document Exhibit I is that, that property which at present is titled
in the name of Fe de Castro Reyes married to Conrado Reyes, et.al. is that correct?
A: Yes.
Q: The subject matter of this case now is the adjoining lot of this TCT 185252, is that
correct?
A: I do not know.
Q: You mean you do not know the lot subject matter of this case?
A: I do not know whether it really exists.
Q: Just answer the question, you do not know?
A: Yes.21
The conflicting claims here are (1) the title of the Galangs issued by the DENR, through the PENRO,
and (2) the claim of the Reyeses, based on unsubstantiated testimony, that the land in question is the
former bed of a dried up creek. As between these two claims, this Court is inclined to decide in favor of
the Galangs who hold a valid and subsisting title to the property which, in the absence of evidence to
the contrary, the Court presumes to have been issued by the PENRO in the regular performance of its
official duty.
The bottom line here is that, fraud and misrepresentation, as grounds for cancellation of patent and
annulment of title, should never be presumed, but must be proved by clear and convincing evidence,
with mere preponderance of evidence not being adequate. Fraud is a question of fact which must be
proved.22
In this case, the allegations of fraud were never proven. There was no evidence at all specifically
showing actual fraud or misrepresentation. Thus, the Court cannot sustain the findings of the CA.
WHEREFORE, the petition 1s GRANTED. The April 9, 2008 Decision and the October 6, 2008
Resolution .of the Court of Appeals, in CA-G.R. CV. No. -85660, are hereby REVERSED and SET
ASIDE. Civil Case No. 97-4560 of the Regional Trial Court of Anti polo City, Branch 73, is hereby
ordered DISMISSED for lack of merit.
SO ORDERED.
JOSE CATRAL MENDOZA
Associate Justice
WE CONCUR:
SUPREME COURT
Manila
EN BANC
JULIAN REYES, ET AL., plaintiffs-appellant,
vs.
FRANCISCA CORDERO, MARIA CORDERO, and AMANDO GATMAITAN, defendants-
appellees.
Gabriel N. Trinidad and Fernando Torrillo for appellants.
Ambrosio Santos for appellee Gatmaitan.
No appearance for the other appellees.
ARAULLO, J.:
The complaint presented in the Court of First Instance of Bulacan prayed that after trial judgment be
rendered ordering the partition, in accordance with law, of the land described in paragraph 2 thereof. To
this end the plaintiffs alleged that they and the defendants Francisca Cordero and Maria Cordero were
the descendants of the owner of said parcel of land, Leon Alfaro, who died long ago in the municipality
of Paombong, Province of Bulacan; that upon his death one of his daughter, Felipa Alfaro, now
deceased, mother of the defendants Francisca and Maria Cordero, succeeded him in the possession
thereof; and that said land was still undivided property of the heirs. It was also alleged in paragraph 6
of the complaint that the other defendant, Amando Gatmaitan, was made a party because he was in
possession of said land, claiming a supposed interest adverse to that to the plaintiffs.
To the complaint a demurrer was presented by the defendant Amando Gatmaitan on the grounds of
misjoinder of parties in that he was made a party defendant and that the facts alleged did not constitute
a cause of action as to him. After hearing, the court, by order of February 9, 1918, sustained the
demurrer, to which order the plaintiff excepted. The plaintiffs not having amended their complaint
within the time fixed by the rules of court, the court dismissed the case as to said defendant, Amando
Gatmaitan, to which action of the lower court the plaintiffs also excepted and brought the case to this
court on appeal by bill of exceptions.
The question presented in this proceeding is whether the defendant Amando Gatmaitan, who is neither
a descendant of the deceased Leon Alfaro, nor a coheir or coowner of the plaintiffs and the other two
defendant, as to the land described in the complaint, may be made a party to the suit for partition
instituted by the plaintiffs, or, in other words, whether his joinder as a party defendant was proper.
An action for partition of real property, as the name itself clearly suggests, is a judicial controversy
between persons, who, being coowners or coparceners thereof, seek to secure a division or partition
among them of the common property, giving to each one the part corresponding to him.
The right to bring such action or to ask at any time for the division of the common property belongs
solely to a coowner or coparcener (art. 400, Civil Code, and section 181, Code of Civil Procedure). The
action for partition of real property cannot therefore be instituted except by the coowners or
coparceners of said property, and cannot be maintained against persons who are not such, because in an
action for partition of such property it is an indispensable requisite that there should be common
ownership of the thing and that the parties, plaintiffs and defendants, should be coowners of
coparceners.
NATURE AND OBJECTS OF PARTITION. — The object of partition proceedings is to enable
those who own property as joint tenants, or coparceners or tenants in common, to put an end to
the tenancy so as to vest in each a sole estate in specific property or an allotment of the lands or
tenements. . . . (Ruling Case Law, vol. 20, p. 716, paragraph 2.)
. . . It is generally held that it is a prerequisite to the maintenance of a proceeding for the
compulsory partition of lands that the petitioner have, at the commencement of such
proceeding, an actual or constructive possession, in common with the defendants, of the land
sought to be partitioned. . . . (Id., p. 730, paragraph 13.)
This court has laid down the doctrine in several cases, among them, that of Rodriguez vs. Ravilan (17
Phil., 63), that:
In an action for the partition of property held in common, it is assumed that the parties by whom
it is prosecuted are all coowners or coproprietors of the property to be divided, as he who claims
or demands the partition of property of common ownership must necessarily have the status of
coproprietor of the undivided property.
In such an action for partition the question of common ownership is not to be argued, nor the
fact as to whether the interested parties are or are not the owners of the property in question, but
only as to how, and in what manner, and in what proportion the said property of common
ownership shall be distributed among the interested parties by order of the court.
The appellants admit in their brief that it is not alleged in the complaint that the defendant Amando
Gatmaitan is made a party for the reason that he is owner or possessor of the property in that capacity;
and they state that, as it has been alleged therein that he is possession of the land and claims a supposed
interest opposed to that of the plaintiff, these facts are matters of proof, the burden of which is upon the
plaintiffs. This is just the error committed by the plaintiffs. Had it been alleged that the possession of
the defendant was in the capacity of coowner with the plaintiffs or that his interest opposed to that of
the latter consists in his having been subrogated by assignment, sale, or other mode of transferring
ownership, to the proprietary right which any of the other defendants had in the property in question,
then the joinder of the defendant Gatmaitan as such would have been proper, inasmuch as every
coowner has the absolute right to his part and consequently may alienate, assign, or mortgage it and
even substitute another in its enjoyment, the effect of the alienation being of course limited to the part
which may be adjudicated to him upon the division of the thing in common (art. 399, Civ. Code). Said
defendant, as coowner and coparcener, as to a part of the property, would have the right to be a party to
the partition proceeding, and, in such case, if he is not joined as defendant, he could intervene. This is
the reason why it is provided in section 183 of the Code of Civil Procedure that the complaint in
partition proceedings should, besides stating the nature of the title of the plaintiff and describing the
real property sought to be partitioned, also name as defendant every tenant in common, coheir or other
person interested in said property. But he could by no means be joined in the complaint as defendant,
with the right to prove his common ownership with the plaintiffs and the other two defendants or his
corresponding right to the property, because this would amount to converting the partition proceeding
into another proceeding for ejectment or unlawful entry against said defendant; and it would serve as a
means by which the plaintiffs could investigate the right or interest which the defendant Gatmaitan
claim to possess in the property which is the subject-matter of the complaint for partition.
One who holds property in common and pro indiviso with others has a perfect right to have a
division made of the same. No hindrance to the exercise and effectiveness of this right can lie in
any conveyances made of various portion of the property by some of the cotenants thereof in
favor of other persons, for the law, besides granting these latter the right to a voice in the
division of the thing owned in common and to object to any division made without their
concurrence, considers them, in an action for the partition of real estate, as subrogated to the
rights of the vendors in the portion of the property in their possession. (Arts. 399, 400, 403, and
1051, Civil Code; sec. 762, Code of Civil Procedure.) (Dancel vs. Dancel, 29 Phil., 25.)
. . . It has been held that under a statute providing that during the pendency of any partition suit
any person claiming to be interested in the premises may appear and assert his right, the right to
intervene is given to all persons claiming an interest in the land, whether under the common title
sought to be partitioned or by title independent thereof. But even under statutes allowing the
adjudication of the rights and interests of the parties to a bona fide partition suit, an action for
partition cannot be used as a substitute for the action of ejectment nor for the sole purpose of
testing a legal title. (Ruling Case Law, vol. 20, p. 730, paragraph 12.)
Neither would the doctrine laid down by this court in Araullo vs. Araullo (3 Phil., 567), relied upon by
the plaintiff, justify the joinder of Amando Gatmaitan as defendant, in view of the allegations of the
complaint as to him. In that case, the property sought to be partitioned was in the actual possession of a
third persons who enjoyed possession as owners without being joined as parties to the proceeding, that
is they claimed to be owners of the property by virtue of a title opposed to that both the plaintiff and the
defendants, and the commissioners who were to effect the partition had already been appointed by the
court. This court declared that the proceedings could not be continued because the commissioners
appointed to effect the partition had no right, for the purpose of taking a view as required by law, to
enter lands possessed by third persons as owners, who were not made parties in the partition
proceeding; but the following is stated in the body of the decision: "Whether the persons should be
made parties to the partition suit and their claims there determined, or whether an independent action
must be brought against them, we do not decide." Therefore this court did not hold in that case, as
appellants seem to have understood that in a complaint for partition of property in order that the
proceedings might be continued those persons should be joined as defendants who, being in possession
of the property or part thereof, alleged themselves to be the owners thereof by virtue of a title opposed
to that of the parties to the proceeding, or claim an interest adverse also to theirs; on the contrary the
court abstained from deciding it, and did not determine whether they should be included as parties in
the same proceeding or whether a new and independent action should be instituted against them.
Nevertheless it is indisputable that when the property which is yet undivided among various coowners
has been usurped or is in the possession of a third person who claims a title opposed to that of the
former, the common owners thereof may recover it in a proper proceeding, for, as the supreme court of
Spain has held in its decision of April 6, 1896 (79 Jur. Civ., 641), "Any coowner of an undivided
property may bring an action to recover it for the benefit of all." This once more shows that a person
cannot be joined as defendant, who does not a possess the property as coowner or joint owner, but by
virtue of a title the nature of which is unknown but opposed to those seeking partition thereof as
coowners, or who possesses the same under a claim of interest opposed to the latter. A person who like
the defendant, Amando Gatmaitan, is in this situation, may be sued in another proceeding, but not in a
proceeding for partition.
The demurrer filed by said defendant to the complaint was therefore correctly sustained and the
plaintiffs not having amended it within the time fixed by the rules of court, the dismissal thereof as to
said defendant was proper.
The order appealed from is therefore affirmed, with costs. So ordered.
Mapa, C.J., Johnson, Malcolm, Avanceña and Villamor, JJ., concur.
U.S. Supreme Court

United States v. Causby, 328 U.S. 256 (1946)
United States v. Causby
No. 630
Argued May 1, 1946
Decided May 27, 1946
328 U.S. 256
Syllabus
Respondents owned a dwelling and a chicken farm near a municipal airport. The safe path of glide to
one of the runways of the airport passed directly over respondents' property at 83 feet, which was 67
feet above the house, 63 feet above the barn and 18 feet above the highest tree. It was used 4% of the
time in taking off and 7% of the time in landing. The Government leased the use of the airport for a
term of one month commencing June 1, 1942, with a provision for renewals until June 30, 1967, or six
months after the end of the national emergency, whichever was earlier. Various military aircraft of the
United States used the airport. They frequently came so close to respondents' property that they barely
missed the tops of trees, the noise was startling, and the glare from their landing lights lighted the place
up brightly at night. This destroyed the use of the property as a chicken farm and caused loss of sleep,
nervousness, and fright on the part of respondents. They sued in the Court of Claims to recover for an
alleged taking of their property and for damages to their poultry business. The Court of Claims found
that the Government had taken an easement over respondents' property, and that the value of the
property destroyed and the easement taken was $2,000; but it made no finding as to the precise nature
or duration of the easement.
Held:
1. A servitude has been imposed upon the land for which respondents are entitled to compensation
under the Fifth Amendment. Pp. 328 U. S. 260-267.
(a) The common law doctrine that ownership of land extends to the periphery of the universe has no
place in the modern world. Pp. 328 U. S. 260-261.
(b) The air above the minimum safe altitude of flight prescribed by the Civil Aeronautics Authority is a
public highway and part of the public domain, as declared by Congress in the Air Commerce Act of
1926, as amended by the Civil Aeronautics Act of 1938. Pp. 328 U. S. 260-261, 328 U. S. 266.
(c) Flights below that altitude are not within the navigable air space which Congress placed within the
public domain, even though they are within the path of glide approved by the Civil Aeronautics
Authority. Pp. 328 U. S. 263-264.
Page 328 U. S. 257
(d) Flights of aircraft over private land which are so low and frequent as to be a direct and immediate
interference with the enjoyment and use of the land are as much an appropriation of the use of the land
as a more conventional entry upon it. Pp. 328 U. S. 261-262, 328 U. S. 264-267.
2. Since there was a taking of private property for public use, the claim was "founded upon the
Constitution," within the meaning of § 141(1) of the Judicial Code, and the Court of Claims had
jurisdiction to hear and determine it. P. 328 U. S. 267.
3. Since the court's findings of fact contain no precise description of the nature or duration of the
easement taken, the judgment is reversed, and the cause is remanded to the Court of Claims so that it
may make the necessary findings. Pp. 328 U. S. 267-268.
(a) An accurate description of the easement taken is essential, since that interest vests in the United
States. P. 328 U. S. 267.
(b) Findings of fact on every "material issue" are a statutory requirement, and a deficiency in the
findings cannot be rectified by statements in the opinion. Pp. 328 U. S. 267-268.
(c) A conjecture in lieu of a conclusion from evidence would not be a proper foundation for liability of
the United States. P. 328 U. S. 268.
104 Ct.Cls. 342, 60 F.Supp. 751, reversed and remanded.
The Court of Claims granted respondents a judgment for the value of property destroyed and damage to
their property resulting from the taking of an easement over their property by low-flying military
aircraft of the United States, but failed to include in its findings of fact a specific description of the
nature or duration of the easement. 104 Ct.Cls. 342, 60 F.Supp. 751. This Court granted certiorari. 327
U.S. 775. Reversed and remanded, p. 328 U. S. 268.
Page 328 U. S. 258
FIRST DIVISION
[G.R. No. 138974. September 19, 2002]
PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. ROBERTO SEGOVIA, accused-appellant.
DECISION
YNARES-SANTIAGO, J.:
Before us is an appeal of the Decision[1] dated July 10, 1998 of the Regional Trial Court of Iloilo City,
Branch 22, in Criminal Case No. 32713, finding accused-appellant Roberto Segovia guilty of rape and
sentencing him to suffer the penalty of reclusion perpetua.
Accused-appellant was charged with rape in an Information which reads as follows:
That on or about 22nd day of November 1987 in the Municipality of Nueva Valencia, Guimaras, Iloilo,
Phils., and within the jurisdiction of this Honorable Court, said accused armed with a knife, did then
and there willfully, unlawfully and feloniously, through the use of force, violence and intimidation,
have sexual intercourse with a certain Miriam Montalvo, then a thirteen-year old and mentally
defective child, without her consent and against her will.
Contrary to law.[2]
Upon arraignment, accused-appellant pleaded not guilty to the crime charged. Thereafter, the case was
tried on the merits.
The victim, thirteen year-old Miriam Montalvo, was a resident of Barangay Lanipe, Nueva Valencia,
Guimaras, Iloilo. She regularly walked to school with her cousin, Stephen Deles. The two would pass
by the store of accused-appellant to fetch his granddaughter, Jennylin Bilib-on, and bring her to school.
When Miriam and Stephen arrived at accused-appellants store in the morning of November 21, 1986,
the latter told them that Jennylin had gone back home to fetch water. Accused-appellant insisted that
they wait for her, but Stephen decided to go ahead since he did not want to be late for class. Accused-
appellant invited Miriam to come in and wait for Jennylin inside the store. Miriam initially refused but
later acceded upon accused-appellants insistence. When they got inside, Miriam sat on a stool while
accused-appellant closed the door. Miriam started to feel uncomfortable and decided to leave, but
accused-appellant held her left hand and pushed her towards a bamboo bed about two meters away.
Accused-appellant pointed a knife at Miriam and lay on top of her. Miriam struggled and fought back
but accused-appellant was too strong. He took off his shorts and brief and, after removing Miriams
panties, forced her legs apart with his knees. Miriam felt intense pain as accused-appellant inserted and
repeatedly thrust his penis into her vagina. After satisfying his lust, he again pointed the knife at
Miriams neck and threatened to kill her if she told anybody what he did.
Miriams vagina bled profusely and stained her dress. After accused-appellant got up, Miriam put on her
panties and hurriedly left the store. She proceeded to her school but did not attend her classes. Instead,
she waited for Stephen at the gate. When morning classes were over, she and Stephen walked home
together. Stephen noticed that Miriams eyes were swollen but he said nothing. As soon as they arrived
home, Miriam changed her clothes and washed them. She stopped going to school since then.
Six months later, Miriams cousin, Luzvminda Deles, discovered that she was pregnant. When she
confronted her, Miriam confessed that she was raped by accused-appellant Roberto Segovia. In August
1987, Miriam gave birth to a baby girl.
On January 18, 1989, complainant finally mustered the courage to file a criminal complaint, charging
accused-appellant of the crime of rape.
Accused-appellant interposed the defense of denial and alibi. He alleged that on the day of the alleged
rape, he stayed in his house in Nueva Valencia, Guimaras and did not go to the store, which is located
half a kilometer away.
After trial, judgment was rendered against the accused-appellant, the dispositive portion of which
reads:
WHEREFORE, in view of the foregoing, the Court hereby renders judgment finding the accused,
Roberto Segovia, GUILTY beyond reasonable doubt of having committed the crime of rape. He is
hereby sentenced to suffer the penalty of reclusion perpetua. He is further ordered to indemnify the
victim, Miriam Montalvo, the amount of P50,000.00, pay moral damages in the amount of P20,000.00,
and P10,000.00 as exemplary damages in order to serve as an object lesson to the public that no one
may deprive a young woman of the right to grow up and discover the wonders of womanhood in the
normal way, without subsidiary imprisonment in case of insolvency.
He is further ordered to acknowledge and support the child delivered by Miriam Montalvo in August
1987 whose complete name has not been revealed.
Costs against him.
SO ORDERED.
Accused-appellant interposed the instant appeal, raising the following assignment of errors:
I
THE TRIAL COURT ERRED IN NOT DISMISSING THE CASE ON THE GROUND OF
VARIANCE OF THE DATE OF THE COMMISSION OF THE ALLEGED RAPE AND THAT
WHICH THE PROSECUTION PROVED DURING THE TRIAL SINCE THE COMPLAINT WAS
NEVER AMENDED NOR SUBSTITUTED.
II
THE TRIAL COURT ERRED IN GIVING CREDENCE TO THE TESTIMONY OF THE
OFFENDED PARTY DESPITE THE FACT THAT SHE GAVE INCONSISTENT,
CONTRADICTORY AND EVASIVE DECLARATIONS DURING THE TRIAL AND DURING THE
PRELIMINARY INVESTIGATION OF THE CASE.
III
THE TRIAL COURT ERRED IN NOT HOLDING THE IMPROBABILITY OF THE COMMISSION
OF THE CRIME ON NOVEMBER 22, 1987 OR NOVEMBER 21, 1986, WHICH WAS ALLEGED
AS A SCHOOL DAY AND, THEREFORE, IN DISCREDITING THE TESTIMONY OF THE
OFFENDED PARTY AS REGARDS THE COMMISSION OF RAPE.
IV
THE TRIAL COURT ERRED IN NOT ACQUITTING THE ACCUSED FOR LACK OF EVIDENCE
WHICH WILL SUSTAIN HIS CONVICTION.
Accused-appellant alleged that the case should have been dismissed because while the complaint
alleged that the rape was committed on November 22, 1987, the evidence showed that the crime was
committed on November 21, 1986.
The pertinent provision of the Revised Rules of Criminal Procedure is Rule 110, Section 11, which
states:
Date of commission of the offense. It is not necessary to state in the complaint or information the
precise date the offense was committed except when it is a material ingredient of the offense. The
offense may be alleged to have been committed on a date as near as possible to the actual date of its
commission.
In rape cases, the date of the commission of the crime is not an essential element of the crime and,
therefore, need not be accurately stated.[3] The material fact or circumstance to be considered is the
occurrence of the rape, not the time of its commission. The date or time of the commission of rape is
not a material ingredient of the said crime because the gravamen of rape is carnal knowledge of a
woman through force and intimidation. In fact, the precise time when the rape takes place has no
substantial bearing on its commission. As such, the date or time need not be stated with absolute
accuracy. It is sufficient if the complaint or information states that the crime has been committed at any
time as near as possible to the date of its actual commission.[4]
In the case at bar, the complaint alleges that the rape was committed on or about 22nd day of November
1987.[5] This sufficiently apprised accused-appellant of the charge proffered against him.[6] The date
alleged was stated near to the actual date of commission. Thus, the same afforded accused-appellant
ample opportunity to prepare an intelligent defense and avoid surprise and substantial prejudice to the
defense.[7]
In People v. Bugayong,[8] we held that a difference of one (1) year or twelve (12) months is merely a
matter of form and does not prejudice the rights of the accused. The phrase on or about employed in the
information does not require the prosecution to prove any precise date but may prove any date which is
not so remote as to surprise and prejudice the defendant.[9]
Similarly, the discrepancy in the dates does not discredit complainant. Sworn statements such as that
given by complainant during the preliminary investigation, being ex parte, are often incomplete and
inaccurate because of partial suggestion or want of suggestions and inquiries, without the aid of which
the witness may be unable to recall all connected circumstances. Thus, as between the sworn statement
and the testimony of the complainant given in court, the latter is given more weight.[10]
Significantly, accused-appellant in this case admitted that complainant ultimately answered that she
was raped on November 21, 1986, and that she was sure it was a Friday.[11] In this connection, we quote
with approval the following observations of the trial court, to wit:
There were instances that she got confused of the exact date when the act of rape was committed. There
were minor discrepancies between her previous testimony during the preliminary investigation in the
fiscals office and her testimony in open court. However, she was able to satisfactorily explain them in
the course of her cross-examination. The variance of the date as stated in the information with that as
stated in her testimony before the prosecutors office and the Court is not so fatal an error that will cause
the dismissal of the case.[12]
Complainant positively and categorically testified that accused-appellant sexually molested her in the
morning of November 21, 1986. Accused-appellants commission of the rape was accompanied with the
use of force and intimidation, by pointing a knife at her neck to subdue her. Her continued silence after
the incident is consistent with the ordinary behavior pattern of a child who had undergone a traumatic
experience. She even decided to quit school on the very same day she was raped. In fact, Stephen
testified that while they were on their way home, he noticed that Miriams eyes were swollen from
crying.
It has been stressed often enough that the testimony of rape victims who are young and immature
deserve full credence. It is improbable for a girl of complainants age to fabricate a charge so
humiliating to herself and her family had she not been truly subjected to the painful experience of
sexual abuse. At any rate, a girl of tender years, innocent and guileless, can not be expected to brazenly
impute a crime so serious as rape to any man if it were not true.[13]
Accused-appellants defense of denial and alibi must fail in view of Miriams positive identification.[14]
Alibi, like denial, is inherently weak and easily fabricated.[15] It is elementary that for alibi to prosper,
the requirements of time and place must be strictly met.[16] The accused must not only prove his
presence at another place at the time of the commission of the offense but he must also demonstrate
that it would be physically impossible for him to be at the scene of the crime at that time.[17]
In the case at bar, accused-appellant failed to establish with clear and convincing evidence that it was
physically impossible for him to have been at the scene of the crime during its commission, considering
that the distance between the place of the incident and the location of his house is only half a kilometer.
Thus, the trial court did not err in finding accused-appellant guilty beyond reasonable doubt of the
crime of rape and in imposing the penalty of reclusion perpetua, pursuant to Article 335 of the Revised
Penal Code.
Finally, in line with the prevailing jurisprudence, we affirm the trial courts award of P50,000.00 as civil
indemnity, in line with the current policy of this Court to award civil indemnity ex delicto in the said
amount for each count of rape upon an indubitable showing of its commission.[18] With respect to the
moral damages, the amount of P20,000.00 should be increased to P50,000.00. Moral damages are
automatically granted in rape cases without need of further proof other than the commission of the
crime, because it is assumed that a rape victim has actually suffered moral injuries entitling her to such
an award.[19]
It has been the policy of the Court to award outrightly an amount not exceeding P50,000 to victims of
rape upon an indubitable showing of its commission; this is categorized as civil indemnity ex delicto. In
response to the rising incidence of heinous crimes against chastity, the Court has laid down the rule that
if the crime of rape is committed and effectively qualified by any of the circumstances under which the
death penalty is authorized by law, the indemnity for the victim shall be increased to the amount of
P75,000.00. Since this case is not qualified, the indemnity should properly be P50,000.00. As to the
award of moral damages, this Court has now been consistently awarding the amount of P50,000.00 as
moral damages to the victim in a rape case. This amount is automatically granted without need of
further proof, other than the commission of the crime. It is assumed that the offended party has suffered
moral injuries entitling her to the award of such damages.[20]
The trial courts award of exemplary damages, however, should be deleted. Also known as punitive or
vindictive damages, exemplary or corrective damages are intended to serve as deterrent to serious
wrong doings, and as a vindication of undue sufferings and wanton invasion of the rights of an injured
or a punishment for those guilty of outrageous conduct.[21]
Under Article 2230 of the Civil Code, exemplary damages as a part of the civil liability may be
imposed when the crime was committed with one or more aggravating circumstances. Such damages
are separate and distinct from fines and shall be paid to the offended party. Considering that no
aggravating circumstance attended the commission of the crime in this case, accused-appellant cannot
be ordered to pay exemplary damages.
Finally, we affirm the order of the trial court for accused-appellant to support the offspring of
complainant, pursuant to Article 345 of the Revised Penal Code and prevailing jurisprudence.[22]
WHEREFORE, the Decision of the Regional Trial Court of Iloilo City, Branch 22, in Criminal Case
No. 32713, finding accused-appellant guilty beyond reasonable doubt of the crime of rape and
sentencing him to suffer the penalty of reclusion perpetua, is AFFIRMED with MODIFICATION.
Accused-appellant Roberto Segovia is ordered to pay the victim, Miriam Montalvo, the amount of
P50,000.00 as civil indemnity and P50,000.00 as moral damages. The award of exemplary damages is
DELETED for lack of legal basis. Finally, accused-appellant is ordered to SUPPORT the offspring of
complainant delivered in August 1987.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Vitug, and Carpio, JJ., concur.
SUPREME COURT
Manila
EN BANC
G.R. No. 4223 August 19, 1908
NICOLAS LUNOD, ET AL., plaintiffs-appellees,
vs.
HIGINO MENESES, defendant-appellant.
T. Icasiano, for appellant.
R. Salinas, for appellee.
TORRES, J.:
On the 14th of March, 1904, Nicolas Lunod, Juan de la Vega, Evaristo Rodriguez, Fernando Marcelo,
Esteban Villena, Benito Litao, Ventura Hernandez, and Casimiro Pantanilla, residents of the town of
Bulacan, province of the same name, filed a written complaint against Higino Meneses, alleging that
they each owned and possessed farm lands, situated in the places known as Maytunas and Balot, near a
small lake named Calalaran; that the defendant is the owner of a fish-pond and a strip of land situated
in Paraanan, adjoining the said lake on one side, and the River Taliptip on the other; that from time
immemorial, and consequently for more than twenty years before 1901, there existed and still exists in
favor of the rice fields of the plaintiffs a statutory easement permitting the flow of water over the said
land in Paraanan, which easement the said plaintiffs enjoyed until the year 1901 and consisted in that
the water collected upon their lands and in the Calalaran Lake flow through Paraanan into the Taliptip
River. From that year however, the defendant, without any right or reason, converted the land in
Paraanan into a fishpond and by means of a dam and a bamboo net, prevented the free passage of the
water through said place into the Taliptip River, that in consequence the lands of the plaintiff became
flooded and damaged by the stagnant waters, there being no outlet except through the land in Paraanan;
that their plantation were destroyed, causing the loss and damages to the extent of about P1,000, which
loss and damage will continue if the obstructions to the flow of the water are allowed to remain,
preventing its passage through said land and injuring the rice plantations of the plaintiffs. They
therefore asked that judgment be entered against the defendant, declaring that the said tract of land in
Paraanan is subject to a statutory easement permitting the flow of water from the property of the
plaintiffs, and that, without prejudice to the issuing of a preliminary injunction, the defendant be
ordered to remove and destroy the obstructions that impede the passage of the waters through Paraanan,
and that in future, and forever, he abstain from closing in any manner the aforesaid tract of land; that,
upon judgment being entered, the said injunction be declared to be final and that the defendant be
sentenced to pay to the plaintiffs an indemnity of P1,000, and the costs in the proceedings; that they be
granted any other and further equitable or proper remedy in accordance with the facts alleged and
proven.
In view of the demurrer interposed by the plaintiffs to the answer of the defendant, the latter, on the
29th of August, 1904, filed an amended answer, denying each and everyone of the allegations of the
complaint, and alleged that no statutory easement existed nor could exist in favor of the lands described
in the complaint, permitting the waters to flow over the fish pond that he, together with his brothers,
owned in the sitio of Bambang, the area and boundaries of which were stated by him, and which he and
his brothers had inherited from their deceased mother.
Apolinara de Leon; that the same had been surveyed by a land surveyor in September, 1881, he also
denied that he had occupied or converted any land in the barrio of Bambang into a fishpond; therefore,
and to sentence the plaintiffs to pay the costs and corresponding damages.
Upon the evidence adduced by both parties to the suit, the court, on the 13th of March, 1907, entered
judgment declaring that the plaintiffs were entitled to a decision in their favor, and sentenced the
defendant to remove the dam placed on the east of the Paraanan passage on the side of the Taliptip
River opposite the old dam in the barrio of Bambang, as well as to remove and destroy the obstacles to
the free passage of the waters through the strip of land in Paraanan; to abstain in future, and forever,
from obstructing or closing in any manner the course of the waters through the said strip of land. The
request that the defendant be sentenced to pay an indemnity was denied, and no ruling was made as to
costs.
The defendant excepted to the above judgment and furthermore asked for a new trial which was denied
and also excepted to, and, upon approval of the bill of exceptions, the question was submitted to this
court.
Notwithstanding the defendant's denial in his amended answer, it appears to have been clearly proven
in this case that the lands owned by the plaintiffs in the aforesaid barrio, as well as the small adjoining
lake, named Calalaran, are located in places relatively higher than the sitio called Paraanan where the
land and fish pond of the defendant are situated, and which border on the Taliptip River; that during the
rainy season the rain water which falls on he land of the plaintiffs, and which flows toward the small
Calalaran Lake at flood time, has no outlet to the Taliptip River other than through the low land of
Paraanan: that the border line between Calalaran and Paraanan there has existed from time immemorial
a dam, constructed by the community for the purpose of preventing the salt waters from the Taliptip
River, at high tide, from flooding the land in Calalaran, passing through the lowlands of Paraanan; but
when rainfall was abundant, one of the residents was designated in his turn by the lieutenant or justice
of the barrio to open the sluice gate in order to let out the water that flooded the rice fields, through the
land of Paraanan to the above-mentioned river, that since 1901, the defendant constructed another dam
along the boundary of this fishpond in Paraanan, thereby impeding the outlet of the waters that flood
the fields of Calalaran, to the serious detriment of the growing crops.
According to article 530 of the Civil Code, an easement is charge imposed upon one estate for the
benefit of another estate belonging to a different owner, and the realty in favor of which the easement is
established is called the dominant estate, and the one charged with it the servient estate.
The lands of Paraanan being the lower are subject to the easement of receiving and giving passage to
the waters proceeding from the higher lands and the lake of Calalaran; this easement was not
constituted by agreement between the interested parties; it is of a statutory nature, and the law had
imposed it for the common public utility in view of the difference in the altitude of the lands in the
barrio Bambang.
Article 552 of the Civil code provides:
Lower estates must receive the waters which naturally and without the intervention of man
descend from the higher estates, as well as the stone or earth which they carry with them.
Neither may the owner of the lower estates construct works preventing this easement, nor the
one of the higher estate works increasing the burden.
Article 563 of the said code reads also:
The establishment, extent, form, and conditions of the easements of waters to which this section
refers shall be governed by the special law relating thereto in everything not provided for in this
code.
The special law cited in the Law of Waters of August 3, 1866, article 111 of which, treating of natural
easements relating to waters, provides:
Lands situated at a lower level are subject to receive the waters that flow naturally, without the
work of man, from the higher lands together with the stone or earth which they carry with them.
Hence, the owner of the lower lands can not erect works that will impede or prevent such an easement
or charge, constituted and imposed by the law upon his estate for the benefit of the higher lands
belonging to different owners; neither can the latter do anything to increase or extend the easement.
According to the provisions of law above referred to, the defendant, Meneses, had no right to construct
the works, nor the dam which blocks the passage, through his lands and the outlet to the Taliptip River,
of the waters which flood the higher lands of the plaintiffs; and having done so, to the detriment of the
easement charged on his estate, he has violated the law which protects and guarantees the respective
rights and regulates the duties of the owners of the fields in Calalaran and Paraanan.
It is true that article 388 of said code authorizes every owner to enclose his estate by means of walls,
ditches fences or any other device, but his right is limited by the easement imposed upon his estate.
The defendant Meneses might have constructed the works necessary to make and maintain a fish pond
within his own land, but he was always under the strict and necessary obligation to respect the statutory
easement of waters charged upon his property, and had no right to close the passage and outlet of the
waters flowing from the lands of the plaintiffs and the lake of Calalaran into the Taliptip River. He
could not lawfully injure the owners of the dominant estates by obstructing the outlet to the Taliptip
River of the waters flooding the upper lands belonging to the plaintiffs.
It is perhaps useful and advantageous to the plaintiffs and other owners of high lands in Calalaran, in
addition to the old dike between the lake of said place and the low lands in Paraanan, to have another
made by the defendant at the border of Paraanan adjoining the said river, for the purpose of preventing
the salt waters of the Taliptip River flooding, at high tide, not only the lowlands in Paraanan but also
the higher ones of Calalaran and its lake, since the plaintiffs can not prevent the defendant from
protecting his lands against the influx of salt water; but the defendant could never be permitted to
obstruct the flow of the waters through his lands to the Taliptip River during the heavy rains, when the
high lands in Calalaran and the lake in said place are flooded, thereby impairing the right of the owners
of the dominant estates.
For the above reasons, and accepting the findings of the court below in the judgment appealed from in
so far as they agree with the terms of this decision, we must and do hereby declare that the defendant,
Higino Meneses, as the owner of the servient estate, is obliged to give passage to and allow the flow of
the waters descending from the Calalaran Lake and from the land of the plaintiffs through his lands in
Paraanan for their discharge into the Taliptip River; and he is hereby ordered to remove any obstacle
that may obstruct the free passage of the waters whenever there may be either a small or large volume
of running water through his lands in the sitio of Paraanan for their discharge into the Taliptip River;
and in future to abstain from impeding, in any manner, the flow of the waters coming from the higher
lands. The judgment appealed from is affirmed, in so far as it agrees with decision, and reversed in
other respects, with the costs of this instance against the appellants. So ordered.
Carson, Willard and Tracey, JJ., concur.
EN BANC
[G.R. No. 29010. October 2, 1928.]
THE CITY OF MANILA, Plaintiff-Appellant, v. ASUNCION MITCHEL, Vda. de Sy Quia, and

MANILA RAILROAD CO., Defendants-Appellees.
City Fiscal Guevara for Appellant.
J. E. Blanco for appellee Mitchel.
Jose C. Abreu for Manila Railroad Co.
SYLLABUS
1. LAND TAX; WHEN DUE. — Although the law grants an option to pay the land tax in two
installments, this does not prevent the tax from existing from the first day of the year; and thus it is,
that from said first day of the year the realty is subject to the lien, or the preferential incumbrance, in
favor of the State, as conclusively provided in section 2497 of the Administrative Code.
2. ID.; ID.; INSTALLMENTS. — Notwithstanding the fact that the law (sec. 2493 of said Code) gives
the taxpayer the benefit of the installments, the State is not thereby deprived of its right to receive the
tax from the first day of the year, should the taxpayer pay it. What the State relinquishes in granting
such periods is solely the right to enforce the payment while the periods still run.
3. ID.; ID.; PERSONAL LIABILITY FOR THE TAX. — Whenever the realty subject to the tax
changes ownership after the year has begun before the periods allowed by law for its payment have
elapsed, the personal responsibility for the tax remains in him who was the owner at the beginning of
the year; and while it i9 true that before such periods lapse no penalty is imposed for failure to pay the
tax, it is not so when the periods lapse, for then not only the tax but also the penalty is demandable,
not from the owner of the property at the expiration of the term, but from the owner of the property at
the beginning of the year, inasmuch as it was from that time incumbent upon the owner to answer for
the tax.
DECISION
ROMUALDEZ, J.:
Two fundamental questions raised in the demurrers to the complaint are at issue in this appeal, to wit:
The sufficiency of the allegations of the complaint, and the inclusion of the Manila Railroad Company
as defendant.
Considering the defendants, Asuncion Mitchel Vda. de Sy Quia, as administratrix of the estate of
Pedro Sy Quia, and the Manila Railroad Company, to be jointly and severally liable, the City of
Manila demanded of them the payment of the land tax upon property belonging to the estate located at
No. 973-985 Calle Azcarraga, known as lot 1, block No. 14, District of Tondo, for the year 1927,
which, together with the penalties amounted to P3,053.47.
It appears from the complaint that in February 1927, the Manila Railroad Company acquired said real
property by expropriation proceeding. In the face of this fact, the defendant administratrix does not
believe herself bound to pay the tax demanded by the plaintiff, because she alleges that at the time the
ownership of the property of said estate passed to the Manila Railroad Company, said tax was as yet
neither due nor payable, but was to become payable some five months later, that is on June 30th, as
provided by section 2493 of the Administrative Code.
The Manila Railroad Company in turn argues that the obligation that would at all events fall upon it
would be the one arising from a real action against the property itself and not the personal obligation
to pay the tax as demanded in the complaint, because it would be bound, in due time, only by the
preferential lien on the realty pursuant to the provisions of section 2497 of the same Code. For this
reason it maintains that the complaint does not allege facts sufficient to constitute this personal action
brought against it.
It further alleges that it should be excluded from the complaint because as its only obligation was to
secure the payment of the tax with the lien in case the taxpayer failed to do so, and as the complaint
does not allege that the latter is insolvent and cannot pay it, its inclusion as defendant is improper and
premature.
Being of opinion that the tax in question was not yet payable at the date when the realty passed from
the ownership of the defendant estate to that of the Manila Railroad Company, and as said estate no
longer owned the realty when the tax became demandable, the trial court held that said estate was not
bound to pay the tax; neither was the new owner, the Manila Railroad Company, called upon to pay it,
being exempted therefrom by Act No. 1510. Upon these grounds the lower court found merit in the
demurrers and dismissed the complaint.
However, the City of Manila has the right to bring this action against both Pedro Sy Quia’s estate and
the Manila Railroad Company.
The former was properly made party defendant, because although the law grants an option to pay the
land tax in two installments, this does not prevent the tax from existing from the first day of the year;
and thus it is, that from said first day of the year; the realty is subject to the lien, the preferential
incumbrance, in favor of the State, as conclusively provided in section 2497 of the Administrative
Code.
Notwithstanding the fact that the law (2493 of the same Code) gives the taxpayer the benefit of the
installments, the State is not thereby deprived of its right to receive the tax from the first day of year,
should the taxpayer pay it. That the State relinquishes in granting such periods, is solely the right to
enforce the payment while the periods still run.
For this reason whenever, as in the present case, the realty subject to the tax changes ownership after
the year has begun but before the periods allowed by law for its payment have elapsed, the personal
responsibility for the tax remains in him who was the owner at the beginning of the year; and while it
is true that before such periods lapse no penalty is imposed for failure to pay the tax, it is not so when
the periods lapse, for then not only the tax but also the penalty is demandable, not from the owner of
the property at the expiration of the term, but from the owner of the property at the beginning of the
year, inasmuch as it was from that time incumbent upon the owner to answer for the tax.
In that case the lien, the preferential incumbrance, in favor of the State remains on the property in
spite of the transfer. It is thus provided in section 2497 of the Administrative Code cited above. And
this is the ground of the action here brought against the Manila Railroad Company. Said company is
here made defendant as the owner and possessor of the property thus subject to the lien in favor of the
Treasury in order to submit and deliver said property to the enforcement of the lien, should the
defendant estate fail to satisfy the tax due and the penalties. For this reason its inclusion as defendant
is not improper or premature. However, the Manila Railroad Company does not answer for the
personal obligation to pay such tax and penalties, not because the law in general exempts it, since we
are here concerned with taxes corresponding to a year in which the property was still subject to
taxation, but because it does not appear that said company assumed the obligation to pay it.
This fact, however, does not appear from the allegations of the complaint, in accordance with which,
for the reasons stated, an action lies against both defendants.
The appealed order is reversed, the demurrers overruled and it is hereby ordered that the record be
remanded to the court of origin in order that the defendants may answer the complaint within the legal
period, and let the case proceed to its termination. Without costs. So ordered.
Avanceña, C.J., Johnson, Street and Ostrand, JJ., concur.
Separate Opinions
MALCOLM, J., dissenting: chanrob1es virtual 1aw library
In contrast to section 364 of the Revised Administrative Code which is of general application, section
2493 of the Manila Charter provides as to the annual tax and penalties that "All taxes shall be due and
payable on or before the thirtieth day of June of each year, and if any taxpayer shall fail to pay the
taxes assessed against him on or before the thirtieth day of June of the year for which such taxes are
due, he shall be delinquent in such payment . . . ." Section 2497 of the City Charter further provides
that "Taxes and penalties assessed against realty shall constitute a lien thereon, which shall be superior
to all other liens, mortgages, or incumbrances of any kind whatsoever; shall be enforceable against the
property whether in the possession of the delinquent or any subsequent owner, and can only be
removed by the payment of the tax and penalty. A lien upon real estate for taxes levied for each year
shall attach on the first day of January of such year." Accordingly, applying the law directly to the
admitted facts, the lien attached to the property of Asuncion Mitchel Vda. de Sy Quia on January 1,
1927. However, the land passed out of her possession by transfer to the Manila Railroad Company in
February, 1927. Consequently, Mrs. Sy Quia was not a "delinquent," within the meaning of the law,
because on June 30, 1927, when the taxes became due and payable she was not a taxpayer. As to the
"subsequent owner," within the meaning of the law, the Manila Railroad Company was not a taxpayer
on June 30, 1927, because its charter, Act No. 1510, exempted it from all municipal taxes.
There are points which cannot be reasoned away, and so I think that the order of Judge Opisso
sustaining the demurrer should be sustained.
Villa-Real, J., concurs.

SUPREME COURT
Manila
EN BANC
G.R. No. L-18841 January 27, 1969
REPUBLIC OF THE PHILIPPINES, plaintiff-appellant,
vs.
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, defendant-appellant.
Office of the Solicitor General Arturo A. Alafriz, Assistant Solicitor General Antonio A. Torres and
Solicitor Camilo D. Quiason for plaintiff-appellant.
Ponce Enrile, Siguion Reyna, Montecillo and Belo for defendant-appellant.
REYES, J.B.L., J.:
Direct appeals, upon a joint record on appeal, by both the plaintiff and the defendant from the
dismissal, after hearing, by the Court of First Instance of Manila, in its Civil Case No. 35805, of their
respective complaint and counterclaims, but making permanent a preliminary mandatory injunction
theretofore issued against the defendant on the interconnection of telephone facilities owned and
operated by said parties.
The plaintiff, Republic of the Philippines, is a political entity exercising governmental powers through
its branches and instrumentalities, one of which is the Bureau of Telecommunications. That office was
created on 1 July 1947, under Executive Order No. 94, with the following powers and duties, in
addition to certain powers and duties formerly vested in the Director of Posts: 1awphil.ñêt
SEC. 79. The Bureau of Telecommunications shall exercise the following powers and duties:
(a) To operate and maintain existing wire-telegraph and radio-telegraph offices, stations, and
facilities, and those to be established to restore the pre-war telecommunication service under the
Bureau of Posts, as well as such additional offices or stations as may hereafter be established to
provide telecommunication service in places requiring such service;
(b) To investigate, consolidate, negotiate for, operate and maintain wire-telephone or radio
telephone communication service throughout the Philippines by utilizing such existing facilities
in cities, towns, and provinces as may be found feasible and under such terms and conditions or
arrangements with the present owners or operators thereof as may be agreed upon to the
satisfaction of all concerned;
(c) To prescribe, subject to approval by the Department Head, equitable rates of charges for
messages handled by the system and/or for time calls and other services that may be rendered
by said system;
(d) To establish and maintain coastal stations to serve ships at sea or aircrafts and, when public
interest so requires, to engage in the international telecommunication service in agreement with
other countries desiring to establish such service with the Republic of the Philippines; and
(e) To abide by all existing rules and regulations prescribed by the International
Telecommunication Convention relative to the accounting, disposition and exchange of
messages handled in the international service, and those that may hereafter be promulgated by
said convention and adhered to by the Government of the Republic of the Philippines. 1
The defendant, Philippine Long Distance Telephone Company (PLDT for short), is a public service
corporation holding a legislative franchise, Act 3426, as amended by Commonwealth Act 407, to
install, operate and maintain a telephone system throughout the Philippines and to carry on the business
of electrical transmission of messages within the Philippines and between the Philippines and the
telephone systems of other countries. 2 The RCA Communications, Inc., (which is not a party to the
present case but has contractual relations with the parties) is an American corporation authorized to
transact business in the Philippines and is the grantee, by assignment, of a legislative franchise to
operate a domestic station for the reception and transmission of long distance wireless messages (Act
2178) and to operate broadcasting and radio-telephone and radio-telegraphic communications services
(Act 3180). 3
Sometime in 1933, the defendant, PLDT, and the RCA Communications, Inc., entered into an
agreement whereby telephone messages, coming from the United States and received by RCA's
domestic station, could automatically be transferred to the lines of PLDT; and vice-versa, for calls
collected by the PLDT for transmission from the Philippines to the United States. The contracting
parties agreed to divide the tolls, as follows: 25% to PLDT and 75% to RCA. The sharing was amended
in 1941 to 30% for PLDT and 70% for RCA, and again amended in 1947 to a 50-50 basis. The
arrangement was later extended to radio-telephone messages to and from European and Asiatic
countries. Their contract contained a stipulation that either party could terminate it on a 24-month
notice to the other. 4 On 2 February 1956, PLDT gave notice to RCA to terminate their contract on 2
February 1958. 5
Soon after its creation in 1947, the Bureau of Telecommunications set up its own Government
Telephone System by utilizing its own appropriation and equipment and by renting trunk lines of the
PLDT to enable government offices to call private parties. 6 Its application for the use of these trunk
lines was in the usual form of applications for telephone service, containing a statement, above the
signature of the applicant, that the latter will abide by the rules and regulations of the PLDT which are
on file with the Public Service Commission. 7 One of the many rules prohibits the public use of the
service furnished the telephone subscriber for his private use. 8 The Bureau has extended its services to
the general public since 1948, 9 using the same trunk lines owned by, and rented from, the PLDT, and
prescribing its (the Bureau's) own schedule of rates. 10 Through these trunk lines, a Government
Telephone System (GTS) subscriber could make a call to a PLDT subscriber in the same way that the
latter could make a call to the former.
On 5 March 1958, the plaintiff, through the Director of Telecommunications, entered into an
agreement with RCA Communications, Inc., for a joint overseas telephone service whereby the Bureau
would convey radio-telephone overseas calls received by RCA's station to and from local residents. 11
Actually, they inaugurated this joint operation on 2 February 1958, under a "provisional" agreement. 12
On 7 April 1958, the defendant Philippine Long Distance Telephone Company, complained to the
Bureau of Telecommunications that said bureau was violating the conditions under which their Private
Branch Exchange (PBX) is inter-connected with the PLDT's facilities, referring to the rented trunk
lines, for the Bureau had used the trunk lines not only for the use of government offices but even to
serve private persons or the general public, in competition with the business of the PLDT; and gave
notice that if said violations were not stopped by midnight of 12 April 1958, the PLDT would sever the
telephone connections. 13 When the PLDT received no reply, it disconnected the trunk lines being
rented by the Bureau at midnight on 12 April 1958. 14 The result was the isolation of the Philippines, on
telephone services, from the rest of the world, except the United States. 15
At that time, the Bureau was maintaining 5,000 telephones and had 5,000 pending applications for
telephone connection. 16 The PLDT was also maintaining 60,000 telephones and had also 20,000
pending applications. 17 Through the years, neither of them has been able to fill up the demand for
telephone service.
The Bureau of Telecommunications had proposed to the PLDT on 8 January 1958 that both enter into
an interconnecting agreement, with the government paying (on a call basis) for all calls passing through
the interconnecting facilities from the Government Telephone System to the PLDT. 18 The PLDT
replied that it was willing to enter into an agreement on overseas telephone service to Europe and Asian
countries provided that the Bureau would submit to the jurisdiction and regulations of the Public
Service Commission and in consideration of 37 1/2% of the gross revenues. 19 In its memorandum in
lieu of oral argument in this Court dated 9 February 1964, on page 8, the defendant reduced its offer to
33 1/3 % (1/3) as its share in the overseas telephone service. The proposals were not accepted by either
party.
On 12 April 1958, plaintiff Republic commenced suit against the defendant, Philippine Long Distance
Telephone Company, in the Court of First Instance of Manila (Civil Case No. 35805), praying in its
complaint for judgment commanding the PLDT to execute a contract with plaintiff, through the
Bureau, for the use of the facilities of defendant's telephone system throughout the Philippines under
such terms and conditions as the court might consider reasonable, and for a writ of preliminary
injunction against the defendant company to restrain the severance of the existing telephone
connections and/or restore those severed.
Acting on the application of the plaintiff, and on the ground that the severance of telephone
connections by the defendant company would isolate the Philippines from other countries, the court a
quo, on 14 April 1958, issued an order for the defendant:
(1) to forthwith reconnect and restore the seventy-eight (78) trunk lines that it has disconnected
between the facilities of the Government Telephone System, including its overseas telephone
services, and the facilities of defendant; (2) to refrain from carrying into effect its threat to sever
the existing telephone communication between the Bureau of Telecommunications and
defendant, and not to make connection over its telephone system of telephone calls coming to
the Philippines from foreign countries through the said Bureau's telephone facilities and the
radio facilities of RCA Communications, Inc.; and (3) to accept and connect through its
telephone system all such telephone calls coming to the Philippines from foreign countries —
until further order of this Court.
On 28 April 1958, the defendant company filed its answer, with counterclaims.
It denied any obligation on its part to execute a contrary of services with the Bureau of
Telecommunications; contested the jurisdiction of the Court of First Instance to compel it to enter into
interconnecting agreements, and averred that it was justified to disconnect the trunk lines heretofore
leased to the Bureau of Telecommunications under the existing agreement because its facilities were
being used in fraud of its rights. PLDT further claimed that the Bureau was engaging in commercial
telephone operations in excess of authority, in competition with, and to the prejudice of, the PLDT,
using defendants own telephone poles, without proper accounting of revenues.
After trial, the lower court rendered judgment that it could not compel the PLDT to enter into an
agreement with the Bureau because the parties were not in agreement; that under Executive Order 94,
establishing the Bureau of Telecommunications, said Bureau was not limited to servicing government
offices alone, nor was there any in the contract of lease of the trunk lines, since the PLDT knew, or
ought to have known, at the time that their use by the Bureau was to be public throughout the Islands,
hence the Bureau was neither guilty of fraud, abuse, or misuse of the poles of the PLDT; and, in view
of serious public prejudice that would result from the disconnection of the trunk lines, declared the
preliminary injunction permanent, although it dismissed both the complaint and the counterclaims.
Both parties appealed.
Taking up first the appeal of the Republic, the latter complains of the action of the trial court in
dismissing the part of its complaint seeking to compel the defendant to enter into an interconnecting
contract with it, because the parties could not agree on the terms and conditions of the interconnection,
and of its refusal to fix the terms and conditions therefor.
We agree with the court below that parties can not be coerced to enter into a contract where no
agreement is had between them as to the principal terms and conditions of the contract. Freedom to
stipulate such terms and conditions is of the essence of our contractual system, and by express
provision of the statute, a contract may be annulled if tainted by violence, intimidation, or undue
influence (Articles 1306, 1336, 1337, Civil Code of the Philippines). But the court a quo has apparently
overlooked that while the Republic may not compel the PLDT to celebrate a contract with it, the
Republic may, in the exercise of the sovereign power of eminent domain, require the telephone
company to permit interconnection of the government telephone system and that of the PLDT, as the
needs of the government service may require, subject to the payment of just compensation to be
determined by the court. Nominally, of course, the power of eminent domain results in the taking or
appropriation of title to, and possession of, the expropriated property; but no cogent reason appears
why the said power may not be availed of to impose only a burden upon the owner of condemned
property, without loss of title and possession. It is unquestionable that real property may, through
expropriation, be subjected to an easement of right of way. The use of the PLDT's lines and services to
allow inter-service connection between both telephone systems is not much different. In either case
private property is subjected to a burden for public use and benefit. If, under section 6, Article XIII, of
the Constitution, the State may, in the interest of national welfare, transfer utilities to public ownership
upon payment of just compensation, there is no reason why the State may not require a public utility to
render services in the general interest, provided just compensation is paid therefor. Ultimately, the
beneficiary of the interconnecting service would be the users of both telephone systems, so that the
condemnation would be for public use.
The Bureau of Telecommunications, under section 78 (b) of Executive Order No. 94, may operate and
maintain wire telephone or radio telephone communications throughout the Philippines by utilizing
existing facilities in cities, towns, and provinces under such terms and conditions or arrangement with
present owners or operators as may be agreed upon to the satisfaction of all concerned; but there is
nothing in this section that would exclude resort to condemnation proceedings where unreasonable or
unjust terms and conditions are exacted, to the extent of crippling or seriously hampering the operations
of said Bureau.
A perusal of the complaint shows that the Republic's cause of action is predicated upon the radio
telephonic isolation of the Bureau's facilities from the outside world if the severance of interconnection
were to be carried out by the PLDT, thereby preventing the Bureau of Telecommunications from
properly discharging its functions, to the prejudice of the general public. Save for the prayer to compel
the PLDT to enter into a contract (and the prayer is no essential part of the pleading), the averments
make out a case for compulsory rendering of inter-connecting services by the telephone company upon
such terms and conditions as the court may determine to be just. And since the lower court found that
both parties "are practically at one that defendant (PLDT) is entitled to reasonable compensation from
plaintiff for the reasonable use of the former's telephone facilities" (Decision, Record on Appeal, page
224), the lower court should have proceeded to treat the case as one of condemnation of such services
independently of contract and proceeded to determine the just and reasonable compensation for the
same, instead of dismissing the petition.
This view we have taken of the true nature of the Republic's petition necessarily results in overruling
the plea of defendant-appellant PLDT that the court of first instance had no jurisdiction to entertain the
petition and that the proper forum for the action was the Public Service Commission. That body, under
the law, has no authority to pass upon actions for the taking of private property under the sovereign
right of eminent domain. Furthermore, while the defendant telephone company is a public utility
corporation whose franchise, equipment and other properties are under the jurisdiction, supervision and
control of the Public Service Commission (Sec. 13, Public Service Act), yet the plaintiff's
telecommunications network is a public service owned by the Republic and operated by an
instrumentality of the National Government, hence exempt, under Section 14 of the Public Service Act,
from such jurisdiction, supervision and control. The Bureau of Telecommunications was created in
pursuance of a state policy reorganizing the government offices —
to meet the exigencies attendant upon the establishment of the free and independent
Government of the Republic of the Philippines, and for the purpose of promoting simplicity,
economy and efficiency in its operation (Section 1, Republic Act No. 51) —
and the determination of state policy is not vested in the Commission (Utilities Com. vs. Bartonville
Bus Line, 290 Ill. 574; 124 N.E. 373).
Defendant PLDT, as appellant, contends that the court below was in error in not holding that the
Bureau of Telecommunications was not empowered to engage in commercial telephone business, and
in ruling that said defendant was not justified in disconnecting the telephone trunk lines it had
previously leased to the Bureau. We find that the court a quo ruled correctly in rejecting both
assertions.
Executive Order No. 94, Series of 1947, reorganizing the Bureau of Telecommunications, expressly
empowered the latter in its Section 79, subsection (b), to "negotiate for, operate and maintain wire
telephone or radio telephone communication service throughout the Philippines", and, in subsection (c),
"to prescribe, subject to approval by the Department Head, equitable rates of charges for messages
handled by the system and/or for time calls and other services that may be rendered by the system".
Nothing in these provisions limits the Bureau to non-commercial activities or prevents it from serving
the general public. It may be that in its original prospectuses the Bureau officials had stated that the
service would be limited to government offices: but such limitations could not block future expansion
of the system, as authorized by the terms of the Executive Order, nor could the officials of the Bureau
bind the Government not to engage in services that are authorized by law. It is a well-known rule that
erroneous application and enforcement of the law by public officers do not block subsequent correct
application of the statute (PLDT vs. Collector of Internal Revenue, 90 Phil. 676), and that the
Government is never estopped by mistake or error on the part of its agents (Pineda vs. Court of First
Instance of Tayabas, 52 Phil. 803, 807; Benguet Consolidated Mining Co. vs. Pineda, 98 Phil. 711,
724).
The theses that the Bureau's commercial services constituted unfair competition, and that the Bureau
was guilty of fraud and abuse under its contract, are, likewise, untenable.
First, the competition is merely hypothetical, the demand for telephone service being very much more
than the supposed competitors can supply. As previously noted, the PLDT had 20,000 pending
applications at the time, and the Bureau had another 5,000. The telephone company's inability to meet
the demands for service are notorious even now. Second, the charter of the defendant expressly
provides:
SEC. 14. The rights herein granted shall not be exclusive, and the rights and power to grant to
any corporation, association or person other than the grantee franchise for the telephone or
electrical transmission of message or signals shall not be impaired or affected by the granting of
this franchise: — (Act 3436)
And third, as the trial court correctly stated, "when the Bureau of Telecommunications subscribed to
the trunk lines, defendant knew or should have known that their use by the subscriber was more or less
public and all embracing in nature, that is, throughout the Philippines, if not abroad" (Decision, Record
on Appeal, page 216).
The acceptance by the defendant of the payment of rentals, despite its knowledge that the plaintiff had
extended the use of the trunk lines to commercial purposes, continuously since 1948, implies assent by
the defendant to such extended use. Since this relationship has been maintained for a long time and the
public has patronized both telephone systems, and their interconnection is to the public convenience, it
is too late for the defendant to claim misuse of its facilities, and it is not now at liberty to unilaterally
sever the physical connection of the trunk lines.
..., but there is high authority for the position that, when such physical connection has been
voluntarily made, under a fair and workable arrangement and guaranteed by contract and the
continuous line has come to be patronized and established as a great public convenience, such
connection shall not in breach of the agreement be severed by one of the parties. In that case,
the public is held to have such an interest in the arrangement that its rights must receive due
consideration. This position finds approval in State ex rel. vs. Cadwaller, 172 Ind. 619, 636, 87
N.E. 650, and is stated in the elaborate and learned opinion of Chief Justice Myers as follows:
"Such physical connection cannot be required as of right, but if such connection is voluntarily
made by contract, as is here alleged to be the case, so that the public acquires an interest in its
continuance, the act of the parties in making such connection is equivalent to a declaration of a
purpose to waive the primary right of independence, and it imposes upon the property such a
public status that it may not be disregarded" — citing Mahan v. Mich. Tel. Co., 132 Mich. 242,
93 N.W. 629, and the reasons upon which it is in part made to rest are referred to in the same
opinion, as follows: "Where private property is by the consent of the owner invested with a
public interest or privilege for the benefit of the public, the owner can no longer deal with it as
private property only, but must hold it subject to the right of the public in the exercise of that
public interest or privilege conferred for their benefit." Allnut v. Inglis (1810) 12 East, 527. The
doctrine of this early case is the acknowledged law. (Clinton-Dunn Tel. Co. v. Carolina Tel. &
Tel. Co., 74 S.E. 636, 638).
It is clear that the main reason for the objection of the PLDT lies in the fact that said appellant did not
expect that the Bureau's telephone system would expand with such rapidity as it has done; but this
expansion is no ground for the discontinuance of the service agreed upon.
The last issue urged by the PLDT as appellant is its right to compensation for the use of its poles for
bearing telephone wires of the Bureau of Telecommunications. Admitting that section 19 of the PLDT
charter reserves to the Government —
the privilege without compensation of using the poles of the grantee to attach one ten-pin
cross-arm, and to install, maintain and operate wires of its telegraph system thereon; Provided,
however, That the Bureau of Posts shall have the right to place additional cross-arms and wires
on the poles of the grantee by paying a compensation, the rate of which is to be agreed upon by
the Director of Posts and the grantee; —
the defendant counterclaimed for P8,772.00 for the use of its poles by the plaintiff, contending that
what was allowed free use, under the aforequoted provision, was one ten-pin cross-arm attachment and
only for plaintiff's telegraph system, not for its telephone system; that said section could not refer to the
plaintiff's telephone system, because it did not have such telephone system when defendant acquired its
franchise. The implication of the argument is that plaintiff has to pay for the use of defendant's poles if
such use is for plaintiff's telephone system and has to pay also if it attaches more than one (1) ten-pin
cross-arm for telegraphic purposes.
As there is no proof that the telephone wires strain the poles of the PLDT more than the telegraph
wires, nor that they cause more damage than the wires of the telegraph system, or that the Government
has attached to the poles more than one ten-pin cross-arm as permitted by the PLDT charter, we see no
point in this assignment of error. So long as the burden to be borne by the PLDT poles is not increased,
we see no reason why the reservation in favor of the telegraph wires of the government should not be
extended to its telephone lines, any time that the government decided to engage also in this kind of
communication.
In the ultimate analysis, the true objection of the PLDT to continue the link between its network and
that of the Government is that the latter competes "parasitically" (sic) with its own telephone services.
Considering, however, that the PLDT franchise is non-exclusive; that it is well-known that defendant
PLDT is unable to adequately cope with the current demands for telephone service, as shown by the
number of pending applications therefor; and that the PLDT's right to just compensation for the
services rendered to the Government telephone system and its users is herein recognized and preserved,
the objections of defendant-appellant are without merit. To uphold the PLDT's contention is to
subordinate the needs of the general public to the right of the PLDT to derive profit from the future
expansion of its services under its non-exclusive franchise.
WHEREFORE, the decision of the Court of First Instance, now under appeal, is affirmed, except in so
far as it dismisses the petition of the Republic of the Philippines to compel the Philippine Long
Distance Telephone Company to continue servicing the Government telephone system upon such
terms, and for a compensation, that the trial court may determine to be just, including the period
elapsed from the filing of the original complaint or petition. And for this purpose, the records are
ordered returned to the court of origin for further hearings and other proceedings not inconsistent with
this opinion. No costs.
Concepcion, C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Fernando, Capistrano, Teehankee and
Barredo, JJ., concur.
SUPREME COURT
Manila
EN BANC
G.R. No. L-7012 March 26, 1913
THE ILOILO ICE AND COLD STORAGE COMPANY, plaintiff-appellee,
vs.
THE MUNICIPAL COUNCIL OF ILOILO, ET AL., defendants-appellants.
Juan de Leon, Quirico Abeto, and Crecenciano Lozano, for appellants.
Bruce, Lawrence, Ross and Block, for appellee.
TRENT, J.:
According to the pleadings, the plaintiff, upon authority granted by the defendant, constructed an ice
and cold storage plant in the city of Iloilo. Some time after the plant had been completed and was in
operation, nearby residents made complaints to the defendant that the smoke from the plant was very
injurious to their health and comfort. Thereupon the defendant appointed a committee to investigate
and report upon the matters contained in said complaints. The committee reported that the complaints
were well-founded. The defendant counsel then passed a resolution which reads in part as follows:
That after the approval by the honorable provincial board of this resolution, a period of one
month will be granted to the said entity. The Iloilo Ice and Cold Storage Company, in which to
proceed with the elevation of said smokestacks, and if not done, the municipal president will
execute the order requiring the closing or suspension of operations of said establishment.
Upon receipt of this resolution and order, the plaintiff commenced this action in the Court of First
Instance to enjoin the defendant from carrying into effect the said resolution. The fifth paragraph of the
complaint is as follows:
That the defendants intend and threaten to require compliance with said resolution
administratively and without the intervention of the court, and by force to compel the closing
and suspension of operations of the plaintiff's machinery and consequently of the entire plant,
should the plaintiff not proceed with the elevation of the smokestacks to one hundred feet,
which the plaintiff maintains it is not obliged to do and will not do.
Upon notice and after hearing, a preliminary injunction was issued. Subsequently thereto the defendant
answered, admitting paragraphs 1 and 4 and denying all the other allegations in the complaint, and as a
special defense alleged:
1. xxx xxx xxx.
2. That the factory of the plaintiff company stands in a central and populated district of the
municipality;
3. That the quantity of smoke discharged from the smokestacks of said factory is so great and so
dense that it penetrates into the dwelling houses situated near it and causes great annoyance to
the residents and prejudice to their health;
4. That the municipal board of health of the city has reported that the smoke discharged from
the smokestacks of said factory is prejudicial and injurious to the public health;
5. That the plaintiff company has no right to maintain and operate machinery in its factory under
the conditions which it is at present operating the same, without complying with the regulations
which were imposed upon it when the license for its installation was granted, because it thereby
violates the ordinances of the city now in force upon the matter.
Wherefore, the defendant prays that it be absolved from the complaint and the plaintiff be declared to
have no right to the remedy asked, and that the preliminary injunction issued in this case be set aside,
with the costs against the plaintiff.
The plaintiff demurred to this answer upon the following grounds:
1. That the facts alleged in the answer do not constitute a defense; and
2. That the answer is vague and ambiguous and contains arguments and conclusions of law
instead of facts.
This demurrer was sustained, the court saying:
The defendant will amend his answer within five days or the injunction will be permanently
granted as prayed for, with costs to the defendant.
To this order the defendant excepted and, not desiring to amend its answer, appealed to this court.
It is alleged in paragraph 1 that both the plaintiff and the defendants are corporations duly organized
under the laws of the Philippine Islands; and paragraph 4 sets forth the resolution complained of, the
dispositive part of which is inserted above. The allegations in paragraph 2, 3, 5, 6, 7, and 8, which are
specifically denied in the answer, all (except the fifth) relate to the building of the plant under authority
granted by the defendant, the cost of its construction, the legality of the resolution in question, the
power of the defendant to pass such resolution, and the damages which will result if that resolution is
carried into effect. As before stated, the allegations in paragraph 5 to the effect that the defendants
intend and are threatening to close by force and without the intervention of the courts the plaintiff's
plant is specifically denied. The issue in this case, according to the pleadings, relates to the power of
the municipal council to declare the plant of the petitioner a nuisance as operated, and the method of
abating it.
The municipal council is, under section 39 (j) of the Municipal Code, specifically empowered "to
declare and abate nuisances." A nuisance is, according to Blackstone, "Any thing that worketh hurt,
inconvenience, or damages." (3 Black. Com., 216.) They arise from pursuing particular trades or
industries in populous neighborhoods; from acts of public indecency, keeping disorderly houses, and
houses of ill fame, gambling houses, etc. (2 Bouv., 248; Miller vs. Burch, 32 Tex., 208.) Nuisances
have been divided into two classes: Nuisances per se, and nuisances per accidens. To the first belong
those which are unquestionably and under all circumstances nuisances, such as gambling houses,
houses of ill fame, etc. The number of such nuisances is necessarily limited, and by far the greater
number of nuisances are such because of particular facts and circumstances surrounding the otherwise
harmless cause of the nuisance. For this reason, it will readily be seen that whether a particular thing is
a nuisance is generally a question of fact, to be determined in the first instance before the term nuisance
can be applied to it. This is certainly true of a legitimate calling, trade, or business such as an ice plant.
Does the power delegated to a municipal council under section 39 (j) of the Municipal Code commit to
the unrestrained will of that body the absolute power of declaring anything to be a nuisance? Is the
decision of that body final despite the possibility that it may proceed from animosity or prejudice, from
partisan zeal or enmity, from favoritism and other improper influences and motives, easy of
concealment and difficult to be detected and exposed? Upon principle and authority, we think it does
not.
In Rutton vs. City of Camden, 39 N.J.L., 122, 129; 23 Am. Rep. 203, 209, the court said:
The authority to decide when a nuisance exists in an authority to find facts, to estimate their
force, and to apply rules of law to the case thus made. This is the judicial function, and it is a
function applicable to a numerous class of important interests. The use of land and buildings,
the enjoyment of water rights, the practice of many trades and occupations, and the business of
manufacturing in particular localities, all fall on some occasions, in important respects, within
its sphere. To say to a man that he shall not use his property as he pleases, under certain
conditions, is to deprive him pro tanto of the enjoyment of such property. To find conclusively
against him that a state of facts exists with respect to the use of his property, or the pursuit of his
business, which subjects him to the condemnation of the law, is to affect his rights in a vital
point. The next thing to depriving a man of his property is to circumscribe him in its use, and
the right to use property is as much under the protection of the law as the property itself, in any
other aspect, is, and the one interest can no more be taken out of the hands of the ordinary
tribunal than the other can. If a man's property cannot be taken away from him except upon trial
by jury, or by the exercise of the right of eminent domain upon compensation made, neither can
be, in any other mode, be limited in the use of it. The right to abate public nuisances, whether
we regard it as existing in the municipalities, or in the community, or in the land of the
individual, is a common law right, and is derived, in every instance of its exercise, from the
same source — that of necessity. It is akin to the right of destroying property for the public
safety, in case of the prevalence of a devastating fire or other controlling exigency. But the
necessity must be present to justify the exercise of the right, and whether present or not, must be
submitted to a jury under the guidance of a court. The finding of a sanitary committee, or of a
municipal council, or of any other body of a similar kind, can have no effect whatever for any
purpose, upon the ultimate disposition of the matter of this kind. It cannot be used as evidence
in any legal proceeding, for the end of establishing, finally, the fact of nuisance, and if can be
made testimony for any purpose, it would seem that it can be such only to show that the persons
acting in pursuance of it were devoid of that malicious spirit which sometimes aggravates a
trespass and swells the damages. I repeat that the question of nuisance can conclusively be
decided, for all legal uses, by the established courts of law or equity alone, and that the
resolutions of officers, or of boards organized by force of municipal charters, cannot, to any
degree, control such decision.
The leading case upon this point is Yates vs. Milwaukee, (10 Wall., 497; 19 L. ed., 984). The following
quotation from this case has been cited or quoted with approval in a great number of cases. (See Notes
to this case in 19 L. ed., Notes, page 356.)
But the mere declaration by the city council of Milwaukee that a certain structure was an
encroachment or obstruction did not make structure was an encroachment or obstruction did not
make it so, nor could such declaration make it a nuisance unless it in fact had that character. It is
a doctrine not to be tolerated in this country, that a municipal corporation, without any general
laws either of the city or of the State, within which a given structure can be shown to be a
nuisance, can, by its mere declaration that it is one, subject it to removal by any person
supposed to be aggrieved, or even by the city itself. This would place every house, every
business, and all the property of the city at the uncontrolled will of the temporary local
authorities. Yet this seems to have been the view taken by counsel who defended this case in the
circuit court; for that single ordinance of the city, declaring the wharf of Yates a nuisance, and
ordering its abatement, is the only evidence in the record that it is a nuisance or an obstruction
to navigation, or in any manner injurious to the public.
In Cole vs. Kegler (64 la., 59, 61) the court said:
We do not think the general assembly intended to confer on cities and towns the power of
finally and conclusively determine, without notice or a hearing, and without the right of appeal,
that any given thing constitutes a nuisance, unless, probably, in cases of great emergency, so
strong as to justify extraordinary measures upon the ground of paramount necessity. The law
does not contemplate such an exigency, and therefore does not provide for it. If it did, it would
no longer be the undefined law of necessity. (Nelson, J., in The People vs. The Corporation of
Albay, 11 Wend., 539.)
Nuisance may be abated by an individual, but they must in fact exist, The determination of the
individual that a nuisance exists does not make it so, and if he destroys property on the that it is
a nuisance, he is responsible, unless it is established that the property destroyed constituted a
nuisance. This precise power, and no more, is conferred by the statute on cities and towns. In
Wood on Nuisances, section 740, it is said: "If the authorities of a city abate a nuisance under
authority of an ordinance of the city, they are subject to the same perils and liabilities as an
individual, if the thing in fact is not nuisance."
In Grossman vs. City of Oakland (30 Ore., 478, 483) the court said:
In our opinion this ordinance cannot be sustained as a legitimate exercise of municipal power.
The character of the city confers upon it the power to prevent and restrain nuisances, and to
"declare what shall constitute a nuisance;" but this does not authorize it to declare a particular
use of property a nuisance, unless such use comes within the common law or statutory idea of a
nuisance. (2 Wood on Nuisances (3d ed.), 977; Yates vs. Milwaukee, 77 U.S. (10 Wall.), 497;
Village of Des Plaines vs. Poyer, 123 Ill., 348; 5 Am. St. Rep., 524; 14 N.E., 677; Quintini vs.
City Board of Aldermen, 64 Miss., 483; 60 Am. Rep., 62; 1 So., 625; Chicago & Rock Islands
R.R. Co. vs. City of Joliet, 79 Ill., 44; Hutton vs. City of Camden, 39 N.J. Law, 122; 23 Am.
Rep., 203.) By this provision of the charter the city is clothed with authority to declare by
general ordinance under what circumstances and conditions certain specified acts or things
injurious to the health or dangerous to the public are to constitute and be deemed nuisances,
leaving the question of fact open for judicial determination as to whether the particular act or
thing complained of comes within the prohibited class; but it cannot by ordinance arbitrarily
declare any particular thing a nuisance which has not heretofore been so declared by law, or
judicially determined to be such. (City of Dener vs. Mullen, 7 Colo., 345).
In Western & Atlantic R. Co. vs. Atlanta (113 Ga., 537, 551), after an extensive review of the
authorities, the court, per Lumpkin, J., said:
It is our opinion that the provisions of our code require, when a municipal corporation is
seeking to abate a nuisance such as it was alleged the floor of the union passenger station was in
this case, that the parties interested be given reasonable notice of the time and place of hearing
at which the fact whether the property complained of is or is not a nuisance shall be inquired
into and determined; that, without such notice and a judgment on the facts by the body invested
with power to abate the nuisance, it is unlawful to enter thereon and remove or destroy it as a
nuisance. If the thing, as we said, is declared by law to be a nuisance, or if it is unquestionably a
nuisance, such as a rabid dog, infected clothing, the carcass of a dead animal on a private lot,
the presence of a smallpox patient on the street, it may be abated by the municipal authorities at
once, by order, from the necessity of the case, and to meet an emergency which exists, to at
once protect the health and lives of the people.
In Everett vs. City of Council Bluffs (46 Ia., 66, 67), where the council passed an ordinance declaring
trees on certain streets to be a nuisance and ordering the marshall to abate the same, the court held:
The defendant is incorporated under a special charter, which provides that the city council has
power "to declare what shall be a nuisance, and to prevent, remove, or abate the same." This
general grant of power, however, will not authorize the council to declare anything a nuisance
which is not such at common law, or has been declared such by statute.
In Frostburg vs. Wineland (98 Md., 239, 243) the court said:
The first question, then, in the case revolves itself to this, was the summary proceeding of the
appellants in declaring the two trees in front of the appellee's property to be a nuisance and an
obstruction to the paving and curbing of the street, and directing them to be removed and
destroyed, so far final as not to be reviewable by the Courts?
This question we think was in effect settled by this court in the recent cases of New Windsor vs.
Stocksdale (95 Md., 215) and King vs. Hamil (97 Md., 103). In the latter case it is said that
equity will not lend its aid to enforce by injunction the by-laws or ordinances of a municipal
corporation, restraining an act, unless the act is shown to be a nuisance per se. . . .
It is clear, we think, both upon reason and authority, that when a municipality undertakes to
destroy private property which is not a nuisance per se, it then transcends its powers and its acts
are reviewable by a court of equity.
In C.R.I. & P.R. Co. vs. City of Joilet (79 Ill., 25, 44) the court said:
As to the ordinance of the common council of the city of Joilet, of September, 1872, declaring
the railroad a nuisance, we regard that as without effect upon the case, although the charter of
the city confers upon the common council the power to abate and remove nuisances, and to
punish the authors thereof, and to define and declare what shall be deemed nuisances. We will,
in this respect, but refer to the language of the Supreme Court of the United State in Yates vs.
Milwaukee (10 Wall., 505). (See supra.)
In the leading case of Denver vs. Mullen (7 Colo., 345, 353) where an extended review of the
authorities is made, the court said:
The basis of authority for the action of the city in the premises is made to rest upon certain
provisions of the city charter, and certain ordinances, which are set out as exhibits in the
testimony; and the following, among other of the enumerated powers conferred by the
legislature upon the city, in said charter, is relied upon, viz: "To make regulations to secure the
general health of the inhabitants, to declare what shall be a nuisance, and to prevent and remove
the same."
The proper construction of this language is that the city is clothed with authority to declare, by
general ordinance, what shall constitute a nuisance. That is to say, the city may, by such
ordinance, define, classify and enact what things or classes of things, and under what conditions
and circumstances, such specified things are to constitute and be deemed nuisances. For
instance, the city might, under such authority, declare by ordinance that slaughter-houses within
the limits of the city, carcasses of dead animals left lying within the city, goods, boxes, and the
like, piled up or remaining for certain length of time on the sidewalks, or other things injurious
to health, or causing obstruction or danger to the public in the use of the streets and sidewalks,
should be deemed nuisances; not that the city council may, by a mere resolution or motion,
declare any particular thing a nuisance which has not theretofore been pronounced to be such by
law, or so adjudged by judicial determination. (Everett vs. Council Bluffs, 40 Iowa, 66; Yates
vs. Milwaukee, 10 Wall., 497.) No law or ordinance, under which the city council assumed to
act in respect to this ditch, has been cited which defines nuisance, or within the meaning of
which such ditch is comprehended.
xxx xxx xxx
It is only certain kinds of nuisances that may be removed or abated summarily by the acts of
individuals or by the public, such as those which affect the health, or interfere with the safety of
property or person, or are tangible obstructions to streets and highways under circumstances
presenting an emergency; such clear cases of nuisances per se, are well understood, and need
not to be further noticed here to distinguish them from the case before us. If it were admitted
that this ditch, by reason of its obstruction to the use of the public streets, at the time of the acts
complained of, was a nuisance, it must also be admitted that it was not a nuisance per se. It was
constructed for a necessary, useful and lawful purpose, was used for such purpose, and therefore
in its nature was not a nuisance, as a matter of law. Nor as a matter of fact was it a nuisance
while it was no hurt, detriment, or offense to the public, or to any private citizen. If, then, it has
become a nuisance, it is by reason of a change of circumstances brought about neither by the
ditch itself, nor its use. Indeed, the sole matter complained of, to warrant its being regarded as a
nuisance, is the absence of bridges at street crossings. The town has become populous; its
growth has extended beyond the ditch and along its line for a great distance; streets laid out
across its course have come to be traveled so much, that without bridges, the ditch, as appears
by the testimony, has become inconvenient, detrimental, and an obstruction to the full, safe and
lawful use of such streets as highways by the public. To this extent, and from these causes
outside the ditch and its use per se, has the ditch come to be a public nuisance, if, as a matter of
fact, it is such. But whether it is such or not is a fact which must first be ascertained by judicial
determination before it can be lawfully abated, either by the public or by a private person.
In Joyce vs. Woods (78 Ky., 386, 388) the court said:
There was no judicial determination that there was a nuisance, and no opportunity offered the
owner of the lot to contest that matter. Under the exercise of the police power, it may be
conceded that municipalities can declare and abate nuisances in cases of necessity, without
citation and without adjudication as to whether there is in fact a nuisance. But whenever the
action of the municipality in declaring and abating a nuisance goes so far as to fix a burden
upon the owner of the property, he is entitled to be heard upon the question as to the existence
of the nuisance. This right to a hearing upon this question may come before or after the nuisance
is abated, as circumstances may require, but there must be an opportunity offered him to be
heard upon that matter before his property can be loaded with the cost of the removal of the
nuisance. To the extent that property is thus burdened by the action of the city council, when
there is no necessity to precipitate action without adjudication, the owner is deprived of his
property, regardless of "the law of the land." The meaning of that provision of the constitution
has generally been construed to be a law that hears before condemning, and arrives at a
judgment for the divestiture of the rights of property through what is ordinarily understood to be
judicial process — the general rules that govern society in reference, to the rights of property;
and it is only in extreme cases, where the preservation and repose of society or the protection of
the property rights of a large class of the community absolutely require a departure, that the
courts recognize any exception. In this case there is no pretense of a necessity for precipitate
action. There is no reason why appellant should not have been permitted to test the question as
to the existence of the nuisance.
In Everett vs. Marquette (53 Mich., 450, 451) the court, per Cooley, J., said:
But it is not necessary in this case to determine whether the permission given by the village
council was in due form for the purposes of a permanent appropriation, or even whether the
council had the power to consent to such an appropriation. It is undoubted that the council had
general control of the streets under the village charter; and it was a part of its duty to prevent the
creation of any public nuisance within them. It is not to be assumed that consent would have
been given to such a nuisance, and when, by formal resolution the council assumed to give
permission to complainant to make the openings and build the stairways complained of, it must
have been done in the belief that no public inconvenience would follow. If the permission was
effectual for no other purpose, it at least rebutted any presumption which might otherwise have
existed, that this partial appropriation of the street was per se a nuisance.
If the permission was a mere license, and the subsequent action of the city council is to be
regarded as a revocation of the license, it does not follow that the plaintiff has by the revocation
immediately been converted into a wrongdoer. The question will then be whether the act of the
complainant in maintaining his structures constitutes a public nuisance; and while the city
council is entitled, under its supervisory control of the public streets, to consider and pass upon
that question for the purpose of deciding upon the institution of legal proceedings for
abatement, it cannot make itself the judge. Maintaining a nuisance is a public offense; and the
fact, as in other cases of alleged criminality, is to be tried on proper accusation and in the
regular courts. The mere fact that the party makes use of some part of a public street for his
private purposes does not make out the public offense. This was decided in People vs. Carpenter
(1 Mich., 273), and has never been doubted in this State.
The city in this case proceeding in an act of destruction on an assumption that the structures
were already condemned as illegal. This was unwarranted, and it was quite right that the action
should be restrained.
The above authorities are collated in Judge Dillon's work on Municipal Corporations, fifth edition,
section 684, with the following comment by the author:
It is to secure and promote the public health, safety, and convenience that municipal
corporations are so generally and so liberally endowed with power to prevent and abate
nuisances. This authority and its summary exercise may be constitutionally conferred on the
incorporated place, and it authorizes its council to act against that which comes within the legal
notion of a nuisance; but such power, conferred in general terms, cannot be taken to authorize
the extrajudicial condemnation and destruction of that as a nuisance which, in its nature,
situation, or use, is not such.
The questions discussed in this august array of authorities are exactly those of the present case, and the
controlling principles and the reasoning upon which they are founded are so fully and lucidly set forth
as to justify us in refraining from comment of our own. It is clear that municipal councils have, under
the code, the power to declare and abate nuisances, but it is equally clear that they do not have the
power to find as a fact that a particular thing is a nuisance when such thing is not a nuisance per se; nor
can they authorize the extrajudicial condemnation and destruction of that as a nuisance which in its
nature, situation, or use is not such. These things must be determined in the ordinary courts of law.
In the present case it is certain that the ice factory of the plaintiff is not a nuisance per se. It is a
legitimate industry, beneficial to the people, and conducive to their health and comfort. If it be in fact a
nuisance due to the manner of its operation, that question cannot de determined by a mere resolution of
the board. The petitioner is entitled to a fair and impartial hearing before a judicial tribunal.
The respondent has, we think, joined issued by its answer denying that it was intending to proceed with
the abatement of the alleged nuisance by arbitrary administrative proceedings. This is the issue of the
present case, and upon its determination depends whether the injunction should be made permanent
(but limited in its scope to prohibiting the closing of petitioner's factory by administrative action), or
whether the injunction should be dissolved, which will be done in case it be shown that the municipal
officials intend to proceed with the abatement of the alleged nuisance in an orderly and legal manner.
It is said that the plaintiff cannot be compelled to build its smokestack higher if said stack is in fact a
nuisance, for the reason that the stack was built under authority granted by the defendant, and in
accordance with the prescribed requirements. If the charter or license does not expressly subject the
business or industry to the exercise of the police power by the State, it is conceded by the great
preponderance of authority that such a reservation is implied to the extent that may be reasonably
necessary for the public welfare. (Freud, Police Power, § 361 et seq, and § 513 et seq.)
For the foregoing reasons, the order sustaining the plaintiff's demurrer to the defendant's answer is
reversed. The record will be returned to the court whence it came with instructions to proceed with the
trial of the cause in accordance with this opinion. No costs will be allowed in this instance. So ordered.
Arellano, C.J., Torres and Moreland, JJ., concur.
Johnson, J., dissents.
SUPREME COURT
Manila
EN BANC
G.R. No. L-5060 January 26, 1910
THE UNITED STATES, plaintiff-appellee,
vs.
LUIS TORIBIO, defendant-appellant.
Rodriguez & Del Rosario, for appellant.
Attorney-General Villamor, for appellee.
CARSON, J.:
The evidence of record fully sustains the findings of the trial court that the appellant slaughtered or
caused to be slaughtered for human consumption, the carabao described in the information, without a
permit from the municipal treasure of the municipality wherein it was slaughtered, in violation of the
provisions of sections 30 and 33 of Act No. 1147, an Act regulating the registration, branding, and
slaughter of large cattle.
It appears that in the town of Carmen, in the Province of Bohol, wherein the animal was slaughtered
there is no municipal slaughterhouse, and counsel for appellant contends that under such circumstances
the provisions of Act No. 1147 do not prohibit nor penalize the slaughter of large cattle without a
permit of the municipal treasure. Sections 30, 31, 32, and 33 of the Act are as follows:
SEC. 30. No large cattle shall be slaughtered or killed for food at the municipal slaughterhouse
except upon permit secured from the municipal treasure. Before issuing the permit for the
slaughter of large cattle for human consumption, the municipal treasurer shall require for
branded cattle the production of the original certificate of ownership and certificates of transfer
showing title in the person applying for the permit, and for unbranded cattle such evidence as
may satisfy said treasurer as to the ownership of the animals for which permit to slaughter has
been requested.
SEC. 31. No permit to slaughter has been carabaos shall be granted by the municipal treasurer
unless such animals are unfit for agricultural work or for draft purposes, and in no event shall a
permit be given to slaughter for food any animal of any kind which is not fit for human
consumption.
SEC. 32. The municipal treasurer shall keep a record of all permits for slaughter issued by him,
and such record shall show the name and residence of the owner, and the class, sex, age, brands,
knots of radiated hair commonly know as remolinos or cowlicks, and other marks of
identification of the animal for the slaughter of which permit is issued and the date on which
such permit is issued. Names of owners shall be alphabetically arranged in the record, together
with date of permit.
A copy of the record of permits granted for slaughter shall be forwarded monthly to the
provincial treasurer, who shall file and properly index the same under the name of the owner,
together with date of permit.
SEC. 33. Any person slaughtering or causing to be slaughtered for human consumption or
killing for food at the municipal slaughterhouse any large cattle except upon permit duly
secured from the municipal treasurer, shall be punished by a fine of not less than ten nor more
than five hundred pesos, Philippine currency, or by imprisonment for not less than one month
nor more than six months, or by both such fine and imprisonment, in the discretion of the court.
It is contended that the proper construction of the language of these provisions limits the prohibition
contained in section 30 and the penalty imposed in section 33 to cases (1) of slaughter of large cattle for
human consumption in a municipal slaughter without a permit duly secured from the municipal
treasurer, and (2) cases of killing of large cattle for food in a municipal slaughterhouse without a
permit duly secured from the municipal treasurer; and it is urged that the municipality of Carmen not
being provided with a municipal slaughterhouse, neither the prohibition nor the penalty is applicable to
cases of slaughter of large cattle without a permit in that municipality.
We are of opinion, however, that the prohibition contained in section 30 refers (1) to the slaughter of
large cattle for human consumption, anywhere, without a permit duly secured from the municipal
treasurer, and (2) expressly and specifically to the killing for food of large cattle at a municipal
slaughterhouse without such permit; and that the penalty provided in section 33 applies generally to the
slaughter of large cattle for human consumption, anywhere, without a permit duly secured from the
municipal treasurer, and specifically to the killing for food of large cattle at a municipal slaughterhouse
without such permit.
It may be admitted at once, that the pertinent language of those sections taken by itself and examined
apart from the context fairly admits of two constructions: one whereby the phrase "at the municipal
slaughterhouse" may be taken as limiting and restricting both the word "slaughtered" and the words
"killed for food" in section 30, and the words "slaughtering or causing to be slaughtered for human
consumption" and the words "killing for food" in section 33; and the other whereby the phrase "at the
municipal slaughterhouse" may be taken as limiting and restricting merely the words "killed for food"
and "killing for food" as used in those sections. But upon a reading of the whole Act, and keeping in
mind the manifest and expressed purpose and object of its enactment, it is very clear that the latter
construction is that which should be adopted.
The Act primarily seeks to protect the "large cattle" of the Philippine Islands against theft and to make
easy the recovery and return of such cattle to their proper owners when lost, strayed, or stolen. To this
end it provides an elaborate and compulsory system for the separate branding and registry of ownership
of all such cattle throughout the Islands, whereby owners are enabled readily and easily to establish
their title; it prohibits and invalidates all transfers of large cattle unaccompanied by certificates of
transfer issued by the proper officer in the municipality where the contract of sale is made; and it
provides also for the disposition of thieves or persons unlawfully in possession, so as to protect the
rights of the true owners. All this, manifestly, in order to make it difficult for any one but the rightful
owner of such cattle to retain them in his possession or to dispose of them to others. But the usefulness
of this elaborate and compulsory system of identification, resting as it does on the official registry of
the brands and marks on each separate animal throughout the Islands, would be largely impaired, if not
totally destroyed, if such animals were requiring proof of ownership and the production of certificates
of registry by the person slaughtering or causing them to be slaughtered, and this especially if the
animals were slaughtered privately or in a clandestine manner outside of a municipal slaughterhouse.
Hence, as it would appear, sections 30 and 33 prohibit and penalize the slaughter for human
consumption or killing for food at a municipal slaughterhouse of such animals without a permit issued
by the municipal treasurer, and section 32 provides for the keeping of detailed records of all such
permits in the office of the municipal and also of the provincial treasurer.
If, however, the construction be placed on these sections which is contended for by the appellant, it will
readily be seen that all these carefully worked out provisions for the registry and record of the brands
and marks of identification of all large cattle in the Islands would prove in large part abortion, since
thieves and persons unlawfully in possession of such cattle, and naturally would, evade the provisions
of the law by slaughtering them outside of municipal slaughterhouses, and thus enjoy the fruits of their
wrongdoing without exposing themselves to the danger of detection incident to the bringing of the
animals to the public slaughterhouse, where the brands and other identification marks might be
scrutinized and proof of ownership required.
Where the language of a statute is fairly susceptible of two or more constructions, that construction
should be adopted which will most tend to give effect to the manifest intent of the lawmaker and
promote the object for which the statute was enacted, and a construction should be rejected which
would tend to render abortive other provisions of the statute and to defeat the object which the
legislator sought to attain by its enactment. We are of opinion, therefore, that sections 30 and 33 of the
Act prohibit and penalize the slaughtering or causing to be slaughtered for human consumption of large
cattle at any place without the permit provided for in section 30.
It is not essential that an explanation be found for the express prohibition in these sections of the
"killing for food at a municipal slaughterhouse" of such animals, despite the fact that this prohibition is
clearly included in the general prohibition of the slaughter of such animals for human consumption
anywhere; but it is not improbable that the requirement for the issue of a permit in such cases was
expressly and specifically mentioned out of superabundance of precaution, and to avoid all possibility
of misunderstanding in the event that some of the municipalities should be disposed to modify or vary
the general provisions of the law by the passage of local ordinances or regulations for the control of
municipal slaughterhouse.
Similar reasoning applied to the specific provisions of section 31 of the Act leads to the same
conclusion. One of the secondary purposes of the law, as set out in that section, is to prevent the
slaughter for food of carabaos fit for agricultural and draft purposes, and of all animals unfit for human
consumption. A construction which would limit the prohibitions and penalties prescribed in the statute
to the killing of such animals in municipal slaughterhouses, leaving unprohibited and unpenalized their
slaughter outside of such establishments, so manifestly tends to defeat the purpose and object of the
legislator, that unless imperatively demanded by the language of the statute it should be rejected; and,
as we have already indicated, the language of the statute is clearly susceptible of the construction which
we have placed upon it, which tends to make effective the provisions of this as well as all the other
sections of the Act.
It appears that the defendant did in fact apply for a permit to slaughter his carabao, and that it was
denied him on the ground that the animal was not unfit "for agricultural work or for draft purposes."
Counsel for appellant contends that the statute, in so far as it undertakes to penalize the slaughter of
carabaos for human consumption as food, without first obtaining a permit which can not be procured in
the event that the animal is not unfit "for agricultural work or draft purposes," is unconstitutional and in
violation of the terms of section 5 of the Philippine Bill (Act of Congress, July 1, 1902), which
provides that "no law shall be enacted which shall deprive any person of life, liberty, or property
without due process of law."
It is not quite clear from the argument of counsel whether his contention is that this provision of the
statute constitutes a taking of property for public use in the exercise of the right of eminent domain
without providing for the compensation of the owners, or that it is an undue and unauthorized exercise
of the police power of the State. But whatever may be the basis of his contention, we are of opinion,
appropriating, with necessary modifications understood, the language of that great jurist, Chief Justice
Shaw (in the case of Com. vs. Tewksbury, 11 Met., 55, where the question involved was the
constitutionality of a statute prohibiting and penalizing the taking or carrying away by any person,
including the owner, of any stones, gravel, or sand, from any of the beaches in the town of Chesea,)
that the law in question "is not a taking of the property for public use, within the meaning of the
constitution, but is a just and legitimate exercise of the power of the legislature to regulate and restrain
such particular use of the property as would be inconsistent with or injurious to the rights of the public.
All property is acquired and held under the tacit condition that it shall not be so used as to injure the
equal rights of others or greatly impair the public rights and interest of the community."
It may be conceded that the benificial use and exclusive enjoyment of the property of all carabao
owners in these Islands is to a greater or less degree interfered with by the provisions of the statute; and
that, without inquiring what quantum of interest thus passes from the owners of such cattle, it is an
interest the deprivation of which detracts from their right and authority, and in some degree interferes
with their exclusive possession and control of their property, so that if the regulations in question were
enacted for purely private purpose, the statute, in so far as these regulations are concerned, would be a
violation of the provisions of the Philippine Bill relied on be appellant; but we are satisfied that it is not
such a taking, such an interference with the right and title of the owners, as is involved in the exercise
by the State of the right of eminent domain, so as to entitle these owners to compensation, and that it is
no more than "a just restrain of an injurious private use of the property, which the legislature had
authority to impose."
In the case of Com. vs. Alger (7 Cush., 53, 84), wherein the doctrine laid down in Com. vs. Tewksbury
(supra) was reviewed and affirmed, the same eminent jurist who wrote the former opinion, in
distinguishing the exercise of the right of eminent domain from the exercise of the sovereign police
powers of the State, said:
We think it is settled principle, growing out of the nature of well-ordered civil society, that
every holder of property, however absolute and unqualified may be his title, holds it under the
implied liability that his use of it may be so regulated that is shall not be injurious to the equal
enjoyment of others having an equal right to the enjoyment of their property, nor injurious to the
rights of the community. . . . Rights of property, like all other social and conventional rights, are
subject to such reasonable limitations in their enjoyment as shall prevent them from being
injurious, and to such reasonable restrain and regulations establish by law, as the legislature,
under the governing and controlling power vested in them by the constitution, may think
necessary and expedient.
This is very different from the right of eminent domain, the right of a government to take and
appropriate private property to public use, whenever the public exigency requires it; which can
be done only on condition of providing a reasonable compensation therefor. The power we
allude to is rather the police power, the power vested in the legislature by the constitution, to
make, ordain, and establish all manner of wholesome and reasonable laws, statutes, and
ordinances, either with penalties or without, not repugnant to the constitution, as they shall
judge to be for the good and welfare of the commonwealth, and of the subjects of the same.
It is much easier to perceive and realize the existence and sources of this power than to mark its
boundaries or prescribe limits to its exercise.
Applying these principles, we are opinion that the restrain placed by the law on the slaughter for human
consumption of carabaos fit for agricultural work and draft purpose is not an appropriation of property
interests to a "public use," and is not, therefore, within the principle of the exercise by the State of the
right of eminent domain. It is fact a mere restriction or limitation upon a private use, which the
legislature deemed to be determental to the public welfare. And we think that an examination of the
general provisions of the statute in relation to the public interest which it seeks to safeguard and the
public necessities for which it provides, leaves no room for doubt that the limitations and restraints
imposed upon the exercise of rights of ownership by the particular provisions of the statute under
consideration were imposed not for private purposes but, strictly, in the promotion of the "general
welfare" and "the public interest" in the exercise of the sovereign police power which every State
possesses for the general public welfare and which "reaches to every species of property within the
commonwealth."
For several years prior to the enactment of the statute a virulent contagious or infectious disease had
threatened the total extinction of carabaos in these Islands, in many sections sweeping away seventy,
eighty, and in some cases as much as ninety and even one hundred per cent of these animals.
Agriculture being the principal occupation of the people, and the carabao being the work animal almost
exclusively in use in the fields as well as for draft purposes, the ravages of the disease with which they
were infected struck an almost vital blow at the material welfare of the country. large areas of
productive land lay waste for years, and the production of rice, the staple food of the inhabitants of the
Islands, fell off to such an extent that the impoverished people were compelled to spend many millions
of pesos in its importation, notwithstanding the fact that with sufficient work animals to cultivate the
fields the arable rice lands of the country could easily be made to produce a supply more that sufficient
for its own needs. The drain upon the resources of the Islands was such that famine soon began to make
itself felt, hope sank in the breast of the people, and in many provinces the energies of the breadwinners
seemed to be paralyzed by the apparently hopeless struggle for existence with which they were
confronted.
To meet these conditions, large sums of money were expended by the Government in relieving the
immediate needs of the starving people, three millions of dollars were voted by the Congress of the
United States as a relief or famine fund, public works were undertaken to furnish employment in the
provinces where the need was most pressing, and every effort made to alleviate the suffering incident to
the widespread failure of the crops throughout the Islands, due in large measure to the lack of animals
fit for agricultural work and draft purposes.
Such measures, however, could only temporarily relieve the situation, because in an agricultural
community material progress and permanent prosperity could hardly be hoped for in the absence of the
work animals upon which such a community must necessarily rely for the cultivation of the fields and
the transportation of the products of the fields to market. Accordingly efforts were made by the
Government to increase the supply of these animals by importation, but, as appears from the official
reports on this subject, hope for the future depended largely on the conservation of those animals which
had been spared from the ravages of the diseased, and their redistribution throughout the Islands where
the need for them was greatest.
At large expense, the services of experts were employed, with a view to the discovery and applications
of preventive and curative remedies, and it is hoped that these measures have proved in some degree
successful in protecting the present inadequate supply of large cattle, and that the gradual increase and
redistribution of these animals throughout the Archipelago, in response to the operation of the laws of
supply and demand, will ultimately results in practically relieving those sections which suffered most
by the loss of their work animals.
As was to be expected under such conditions, the price of carabaos rapidly increase from the three to
five fold or more, and it may fairly be presumed that even if the conservative measures now adopted
prove entirely successful, the scant supply will keep the price of these animals at a high figure until the
natural increase shall have more nearly equalized the supply to the demand.
Coincident with and probably intimately connected with this sudden rise in the price of cattle, the crime
of cattle stealing became extremely prevalent throughout the Islands, necessitating the enactment of a
special law penalizing with the severest penalties the theft of carabaos and other personal property by
roving bands; and it must be assumed from the legislative authority found that the general welfare of
the Islands necessitated the enactment of special and somewhat burdensome provisions for the
branding and registration of large cattle, and supervision and restriction of their slaughter for food. It
will hardly be questioned that the provisions of the statute touching the branding and registration of
such cattle, and prohibiting and penalizing the slaughter of diseased cattle for food were enacted in the
due and proper exercise of the police power of the State; and we are of opinion that, under all the
circumstances, the provision of the statute prohibiting and penalizing the slaughter for human
consumption of carabaos fit for work were in like manner enacted in the due and proper exercise of that
power, justified by the exigent necessities of existing conditions, and the right of the State to protect
itself against the overwhelming disaster incident to the further reduction of the supply of animals fit for
agricultural work or draft purposes.
It is, we think, a fact of common knowledge in these Islands, and disclosed by the official reports and
records of the administrative and legislative departments of the Government, that not merely the
material welfare and future prosperity of this agricultural community were threatened by the ravages of
the disease which swept away the work animals during the years prior to the enactment of the law
under consideration, but that the very life and existence of the inhabitants of these Islands as a civilized
people would be more or less imperiled by the continued destruction of large cattle by disease or
otherwise. Confronted by such conditions, there can be no doubt of the right of the Legislature to adopt
reasonable measures for the preservation of work animals, even to the extent of prohibiting and
penalizing what would, under ordinary conditions, be a perfectly legitimate and proper exercise of
rights of ownership and control of the private property of the citizen. The police power rests upon
necessity and the right of self-protection and if ever the invasion of private property by police
regulation can be justified, we think that the reasonable restriction placed upon the use of carabaos by
the provision of the law under discussion must be held to be authorized as a reasonable and proper
exercise of that power.
As stated by Mr. Justice Brown in his opinion in the case of Lawton vs. Steele (152 U.S., 133, 136):
The extent and limits of what is known as the police power have been a fruitful subject of
discussion in the appellate courts of nearly every State in the Union. It is universally conceded
to include everything essential to the public safely, health, and morals, and to justify the
destruction or abatement, by summary proceedings, of whatever may be regarded as a public
nuisance. Under this power it has been held that the State may order the destruction of a house
falling to decay or otherwise endangering the lives of passers-by; the demolition of such as are
in the path of a conflagration; the slaughter of diseased cattle; the destruction of decayed or
unwholesome food; the prohibition of wooden buildings in cities; the regulation of railways and
other means of public conveyance, and of interments in burial grounds; the restriction of
objectionable trades to certain localities; the compulsary vaccination of children; the
confinement of the insane or those afficted with contagious deceases; the restraint of vagrants,
beggars, and habitual drunkards; the suppression of obscene publications and houses of ill fame;
and the prohibition of gambling houses and places where intoxicating liquors are sold. Beyond
this, however, the State may interfere wherever the public interests demand it, and in this
particular a large discretion is necessarily vested in the legislature to determine, not only what
the interests of the public require, but what measures are necessary for the protection of such
interests. (Barbier vs. Connolly, 113 U. S., 27; Kidd vs. Pearson, 128 U. S., 1.) To justify the
State in thus interposing its authority in behalf of the public, it must appear, first, that the
interests of the public generally, as distinguished from those of a particular class, require such
interference; and, second, that the means are reasonably necessary for the accomplishment of
the purpose, and not unduly oppressive upon individuals. The legislature may not, under the
guise of protecting the public interests, arbitrarily interfere with private business, or impose
unusual and unnecessary restrictions upon lawful occupations. In other words, its determination
as to what is a proper exercise of its police powers is not final or conclusive, but is subject to the
supervision of the court.
From what has been said, we think it is clear that the enactment of the provisions of the statute under
consideration was required by "the interests of the public generally, as distinguished from those of a
particular class;" and that the prohibition of the slaughter of carabaos for human consumption, so long
as these animals are fit for agricultural work or draft purposes was a "reasonably necessary" limitation
on private ownership, to protect the community from the loss of the services of such animals by their
slaughter by improvident owners, tempted either by greed of momentary gain, or by a desire to enjoy
the luxury of animal food, even when by so doing the productive power of the community may be
measurably and dangerously affected.
Chief Justice Redfield, in Thorpe vs. Rutland & Burlington R. R. Co. (27 Vt., 140), said (p. 149) that
by this "general police power of the State, persons and property are subjected to all kinds of restraints
and burdens, in order to secure the general comfort, health, and prosperity of the State; of the perfect
right in the legislature to do which no question ever was, or, upon acknowledge and general principles,
ever can be made, so far as natural persons are concerned."
And Cooley in his "Constitutional Limitations" (6th ed., p. 738) says:
It would be quite impossible to enumerate all the instances in which the police power is or may
be exercised, because the various cases in which the exercise by one individual of his rights
may conflict with a similar exercise by others, or may be detrimental to the public order or
safety, are infinite in number and in variety. And there are other cases where it becomes
necessary for the public authorities to interfere with the control by individuals of their property,
and even to destroy it, where the owners themselves have fully observed all their duties to their
fellows and to the State, but where, nevertheless, some controlling public necessity demands the
interference or destruction. A strong instance of this description is where it becomes necessary
to take, use, or destroy the private property of individuals to prevent the spreading of a fire, the
ravages of a pestilence, the advance of a hostile army, or any other great public calamity. Here
the individual is in no degree in fault, but his interest must yield to that "necessity" which
"knows no law." The establishment of limits within the denser portions of cities and villages
within which buildings constructed of inflammable materials shall not be erected or repaired
may also, in some cases, be equivalent to a destruction of private property; but regulations for
this purpose have been sustained notwithstanding this result. Wharf lines may also be
established for the general good, even though they prevent the owners of water-fronts from
building out on soil which constitutes private property. And, whenever the legislature deem it
necessary to the protection of a harbor to forbid the removal of stones, gravel, or sand from the
beach, they may establish regulations to that effect under penalties, and make them applicable to
the owners of the soil equally with other persons. Such regulations are only "a just restraint of
an injurious use of property, which the legislature have authority" to impose.
So a particular use of property may sometimes be forbidden, where, by a change of
circumstances, and without the fault of the power, that which was once lawful, proper, and
unobjectionable has now become a public nuisance, endangering the public health or the public
safety. Milldams are sometimes destroyed upon this grounds; and churchyards which prove, in
the advance of urban population, to be detrimental to the public health, or in danger of
becoming so, are liable to be closed against further use for cemetery purposes.
These citations from some of the highest judicial and text-book authorities in the United States clearly
indicate the wide scope and extent which has there been given to the doctrine us in our opinion that the
provision of the statute in question being a proper exercise of that power is not in violation of the terms
of section 5 of the Philippine Bill, which provide that "no law shall be enacted which shall deprive any
person of life, liberty, or property without due process of law," a provision which itself is adopted from
the Constitution of the United States, and is found in substance in the constitution of most if not all of
the States of the Union.
The judgment of conviction and the sentence imposed by the trial court should be affirmed with the
costs of this instance against the appellant. So ordered.
Arellano, C.J., Torres, Johnson, Moreland and Elliott, JJ., concur.
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-106528 December 21, 1993
PHILIPPINE COLUMBIAN ASSOCIATION, petitioner,

vs.
THE HONORABLE DOMINGO D. PANIS as Judge, Regional Trial Court of Manila, Branch 41, THE HONORABLE RICARDO DIAZ, as Judge, Regional
Trial Court of Manila, Branch 27, the CITY OF MANILA, ANTONIO GONZALES, JR., KARLO BUTIONG, LEONARDO AQUINO, EDILBERTO LOPEZ,
ANTILANO FERRER, LEONCIA DAVILLO JAMERO, LUIS FERNANDEZ, PATRICIO DE GUZMAN, RICARDO DE LEON, VIRGILIO TORNERO, FAUSTO
FERNANDEZ, DOMINGO MEREN, EDUARDA JACINTO, MAGDALENA VELEZ, LUSITO ALMADRONES, MYRNA BARREDO EBREO, FULGENCIO
CORSINO, PEDRO VELASQUEZ, JUAN INOBAYA, NENITA ARCE, MAGNO ORTINEZ, ARMANDO PARAGAS, HIPOLITO ESTABILLO, FELICIANO
FAUSTINO, VIRGILIO EDIC, JOSE TINGZON, JOSUE MARIANO, MARIA YERO, MA. DOLORES QUIZON, ISIDERO TAGUILIG, CIRIACO MENDOZA,
JUAN ROMERO, JOSE LAGATA, FRUCTUSO PUSING, TEOFILO TERSOL, ANTONIO LACHICA, PIO RAJALES, REGINA VIERNES, JUAN ROMERO,
DOMINGO EDIC, EDUARDA GONZALES, PABLO QUIRANTE, LEONORA SANTIA, MARIA RIVERA, ELENA ARCE, LAZARO GOMEZ, PEDRO MENDOZA,
DOMINADOR ADAO, JUAN PANTERA, FRISCA MANDOT, SOCORRO SANTOS AND GLORIA JEBUNAN, respondents.
Angara, Abello, Concepcion, Regala & Cruz for petitioner.
Dennis A. Padernal for private respondents.
City Legal Officer for respondent City of Manila.
QUIASON, J.:
This is an appeal by certiorari to review: (1) the decision of the Court of Appeals in CA-G.R. SP No. 23338, which dismissed the petition for certiorari filed by
herein petitioner, assailing the orders of (a) respondent Judge Domingo D. Panis of the Regional Trial Court, Branch 41, Manila, in Civil Case No. 90-53531, and
(b) respondent Judge Ricardo D. Diaz, of the Regional Trial Court, Branch 27, Manila, in Civil Case No. 90-53346; and (2) its Resolution dated July 30, 1992,
which denied the motion for reconsideration of the decision.
Philippine Columbian Association, petitioner herein, is a non-stock, non-profit domestic corporation and is engaged in the business of providing sports and
recreational facilities for its members. Petitioner's office and facilities are located in the District of Paco, Manila, and adjacent thereto, is a parcel of land
consisting of 4,842.90 square meters owned by petitioner.
Private respondents are the actual occupants of the said parcel of land, while respondents Antonio Gonzales, Jr. and Karlo Butiong were duly-elected councilors
of the City of Manila.
In 1982, petitioner instituted ejectment proceedings against herein private respondents before the metropolitan Trial Court of Manila. Judgment was rendered
against the said occupants, ordering them to vacate the lot and pay reasonable compensation therefor. This judgment was affirmed by the Regional Trial Court,
the Court of Appeals and subsequently by the Supreme Court in G.R. No. 85262.
As a result of the favorable decision, petitioner filed before the Metropolitan Trial Court of Manila, a motion for execution of judgment, which was granted on April
9, 1990. A writ of demolition was later prayed and likewise issued by the same court on May 30, 1990.
On June 8, 1990, private respondents filed with the Regional Trial Court, Branch 27, Manila, a petition for injunction and prohibition with preliminary injunction
and restraining order against the Metropolitan Trial Court of Manila and petitioner herein (Civil Case No. 90-53346) to enjoin their ejectment from and the
demolition of their houses on the premises in question.
On June 28, 1990, the City of Manila filed a complaint docketed as Civil Case No. 90-53531 against petitioner before the Regional Trial Court, Branch 41, Manila,
for the expropriation of the 4,842.90 square meter lot subject of the ejectment proceedings in Civil Case No. 90-53346. Petitioner, in turn, filed a motion to
dismiss the complaint, alleging, inter alia, that the City of Manila had no power to expropriate private land; that the expropriation is not for public use and welfare;
that the expropriation is politically motivated; and, that the deposit of P2 million in the City of Manila representing the provisional value of the land, was insufficient
and was made under P.D. 1533, a law declared unconstitutional by the Supreme Court.
On September 14, 1990, the Regional Trial Court, Branch 41, Manila, denied petitioner's motion to dismiss and entered an order of condemnation declaring that
the expropriation proceeding was properly instituted in accordance with law. The Court also ordered the parties to submit, within five days, the names of their
respective nominees as commissioners to ascertain just compensation for the land in question.
Petitioner filed a motion for reconsideration of the order denying its motion to dismiss, and later a motion to defer compliance with the order directing the
submission of the names of nominees to be appointed commissioners. The City of Manila, however, filed an ex-parte motion for the issuance of a writ of
possession over the subject lot, mentioning the P2 million deposit with the Philippine National Bank, representing the provisional value of the land.
In separate orders dated October 5 and 8, 1990, the court issued the writ of possession, and at the same time, denied petitioner's motion to defer compliance
and motion for reconsideration.
On September 21, 1990, as a result of the expropriation proceedings, the Regional Trial Court, Branch 27, Manila, in Civil Case No. 90-53346 issued an order,
granting the writ of preliminary injunction prayed for by the private respondents. A motion for reconsideration filed by petitioner was denied.
Petitioner filed before the Court of Appeals a petition before the Court of Appeals a petition assailing the orders dated September 14, 1990, and October 5 and 8,
1990 of Branch 41 of the Regional Trial Court, and the Order dated September 21, 1990 of Branch 27 of the same court (CA-G.R. SP No. 23338). The Court of
Appeals rendered a Decision on November 31, 1992, denying the petition, and a Resolution on July 30, 1992, denying consideration thereof.
The land subject of this case is the 4,842.90 square meter lot, which was formerly a part of the Fabie Estate. As early as November 11, 1966, the Municipal
Board of the City of Manila passed Ordinance No. 5971, seeking to expropriate the Fabie Estate. Through negotiated sales, the City of Manila acquired a total of
18,017.10 square meters of the estate, and thereafter subdivided the land into home lots and distributed the portions to the actual occupants thereof.
The remaining area of 4,842.90 square meters, more or less, was sold in 1977 by its owner, Dolores Fabie-Posadas, to petitioner. Since the time of the sale, the
lot has been occupied by private respondents. On 23, 1989, the City Council of Manila, with the approval of the Mayor, passed Ordinance No. 7704 for the
expropriation of the 4,842.90 square meter lot.
Petitioner claims that expropriation of the lot cannot prosper because:

(1) the City of Manila has no specific power to expropriate private property under the 1987 Constitution; and (2) assuming that it has such power, this was
exercised improperly and illegally in violation of the Public use requirement and petitioner's right to due process.
Petitioner argues that under the 1987 Constitution, there must be a law expressly authorizing local governments to undertake urban land reform (Art. XIII, Sec.
9).
Petitioner forgot that the Revised Charter of the City of Manila, R.A. No. 409, expressly authorizes the City of Manila to "condemn private property for public use"
(Sec. 3) and "to acquire private land . . . and subdivide the same into home lots for sale on easy terms to city residents" (Sec. 100).
The Revised Charter of the City of Manila expressly grants the City of Manila general powers over its territorial jurisdiction, including the power of eminent
domain, thus:
General powers. — The city may have a common seal and alter the same at pleasure, and may take, purchase, receive, hold, lease,
convey, and dispose of real and personal property for the general interest of the city, condemn private property for public use , contract and
be contracted with, sue and be sued, and prosecute and defend to final judgment and execution, and exercise all the powers hereinafter
conferred (R.A. 409, Sec. 3; Emphasis supplied).
Section 100 of said Revised Charter authorizes the City of Manila to undertake urban land reform, thus:
Sec. 100. The City of Manila is authorized to acquire private lands in the city and to subdivide the same into home lots for sale on easy
terms for city residents, giving first priority to the bona fide tenants or occupants of said lands, and second priority to laborers and low-
salaried employees. For the purpose of this section, the city may raise the necessary funds by appropriations of general funds, by
securing loans or by issuing bonds, and, if necessary, may acquire the lands through expropriation proceedings in accordance with law,
with the approval of the President . . . (Emphasis supplied).
The City of Manila, acting through its legislative branch, has the express power to acquire private lands in the city and subdivide these lands into home lots for
sale to bona fide tenants or occupants thereof, and to laborers and low-salaried employees of the city. That only a few could actually benefit from the
expropriation of the property does not diminish its public use character. It is simply not possible to provide all at once land and shelter for all who need them
(Sumulong v. Guerrero, 154 SCRA 461 [1987] ).
Corollary to the expanded notion of public use, expropriation is not anymore confined to vast tracts of land and landed estates (Province of Camarines Sur v.
Court of Appeals, G.R. No. 103125, May 17, 1993; J.M. Tuason and Co., Inc. v. Land Tenure Administration, 31 SCRA 413 [1970] ). It is therefore of no moment
that the land sought to be expropriated in this case is less than half a hectare only (Pulido v. Court of Appeals, 122 SCRA 63 [1983]).
Through the years, the public use requirement in eminent domain has evolved into a flexible concept, influenced by changing conditions (Sumulong v. Guerrero,
supra; Manotok v. National Housing Authority, 150 SCRA 89 [1987]; Heirs of Juancho Ardona v. Reyes, 125 SCRA 220 [1983]). Public use now includes the
broader notion of indirect public benefit or advantage, including in particular, urban land reform and housing.
This concept is specifically recognized in the 1987 Constitution which provides that:
xxx xxx xxx
The state shall, by law, and for the common good, undertake, in cooperation with the private sector, a continuing program of urban land
reform and housing which will make available at affordable cost decent housing and basic services to underprivileged and homeless
citizens in urban centers and resettlement areas. It shall also promote adequate employment opportunities to such citizens. In the
implementation of such program the State shall respect the rights of small property owners (Art. XIII, Sec. 9; Emphasis supplied).
xxx xxx xxx
The due process requirement in the expropriation of subject lot has likewise been complied with. Although the motion to dismiss filed by petitioner was not set for
hearing as the court is required to do (National Housing Authority v. Valenzuela, 159 SCRA 396 [1988]), it never questioned the lack of hearing before the trial
and appellate courts. It is only now before us that petitioner raises the issue of due process.
Indeed, due process was afforded petitioner when it filed its motion for reconsideration of the trial court's order, denying its motion to dismiss.
The Court of Appeals, in determining whether grave abuse of discretion was committed by respondent courts, passed upon the very same issues raised by
petitioner in its motion to dismiss, which findings we uphold. Petitioner therefore cannot argue that it was denied its day in court.
The amount of P2 million representing the provisional value of the land is an amount not only fixed by the court, but accepted by both parties. The fact remains
that petitioner, albeit reluctantly, agreed to said valuation and is therefore estopped from assailing the same. It must be remembered that the valuation is merely
provisional. The parties still have the second stage in the proceedings in the proper court below to determine specifically the amount of just compensation to be
paid the landowner (Revised Rules of Court, Rule 67, Sec. 5; National Power Corporation v. Jocson, 206 SCRA 520 [1992] ).
WHEREFORE, the petition is DENIED for lack of merit.
SO ORDERED.

SUPREME COURT
Manila
EN BANC
G.R. No. L-10572 December 21, 1915
FRANCIS A. CHURCHILL and STEWART TAIT, plaintiffs-appellees,
vs.
JAMES J. RAFFERTY, Collector of Internal Revenue, defendant-appellant.
Attorney-General Avanceña for appellant.
Aitken and DeSelms for appellees.
TRENT, J.:
The judgment appealed from in this case perpetually restrains and prohibits the defendant and his
deputies from collecting and enforcing against the plaintiffs and their property the annual tax
mentioned and described in subsection (b) of section 100 of Act No. 2339, effective July 1, 1914, and
from destroying or removing any sign, signboard, or billboard, the property of the plaintiffs, for the
sole reason that such sign, signboard, or billboard is, or may be, offensive to the sight; and decrees the
cancellation of the bond given by the plaintiffs to secure the issuance of the preliminary injunction
granted soon after the commencement of this action.
This case divides itself into two parts and gives rise to two main questions; (1) that relating to the
power of the court to restrain by injunction the collection of the tax complained of, and (2) that relating
to the validity of those provisions of subsection (b) of section 100 of Act No. 2339, conferring power
upon the Collector of Internal Revenue to remove any sign, signboard, or billboard upon the ground
that the same is offensive to the sight or is otherwise a nuisance.
The first question is one of the jurisdiction and is of vital importance to the Government. The sections
of Act No. 2339, which bear directly upon the subject, are 139 and 140. The first expressly forbids the
use of an injunction to stay the collection of any internal revenue tax; the second provides a remedy for
any wrong in connection with such taxes, and this remedy was intended to be exclusive, thereby
precluding the remedy by injunction, which remedy is claimed to be constitutional. The two sections,
then, involve the right of a dissatisfied taxpayers to use an exceptional remedy to test the validity of
any tax or to determine any other question connected therewith, and the question whether the remedy
by injunction is exceptional.
Preventive remedies of the courts are extraordinary and are not the usual remedies. The origin and
history of the writ of injunction show that it has always been regarded as an extraordinary, preventive
remedy, as distinguished from the common course of the law to redress evils after they have been
consummated. No injunction issues as of course, but is granted only upon the oath of a party and when
there is no adequate remedy at law. The Government does, by section 139 and 140, take away the
preventive remedy of injunction, if it ever existed, and leaves the taxpayer, in a contest with it, the
same ordinary remedial actions which prevail between citizen and citizen. The Attorney-General, on
behalf of the defendant, contends that there is no provisions of the paramount law which prohibits such
a course. While, on the other hand, counsel for plaintiffs urge that the two sections are unconstitutional
because (a) they attempt to deprive aggrieved taxpayers of all substantial remedy for the protection of
their property, thereby, in effect, depriving them of their property without due process of law, and (b)
they attempt to diminish the jurisdiction of the courts, as conferred upon them by Acts Nos. 136 and
190, which jurisdiction was ratified and confirmed by the Act of Congress of July 1, 1902.
In the first place, it has been suggested that section 139 does not apply to the tax in question because
the section, in speaking of a "tax," means only legal taxes; and that an illegal tax (the one complained
of) is not a tax, and, therefore, does not fall within the inhibition of the section, and may be restrained
by injunction. There is no force in this suggestion. The inhibition applies to all internal revenue taxes
imposes, or authorized to be imposed, by Act No. 2339. (Snyder vs. Marks, 109 U.S., 189.) And,
furthermore, the mere fact that a tax is illegal, or that the law, by virtue of which it is imposed, is
unconstitutional, does not authorize a court of equity to restrain its collection by injunction. There must
be a further showing that there are special circumstances which bring the case under some well
recognized head of equity jurisprudence, such as that irreparable injury, multiplicity of suits, or a cloud
upon title to real estate will result, and also that there is, as we have indicated, no adequate remedy at
law. This is the settled law in the United States, even in the absence of statutory enactments such as
sections 139 and 140. (Hannewinkle vs. Mayor, etc., of Georgetown, 82 U.S., 547; Indiana Mfg. Co.
vs. Koehne, 188 U.S., 681; Ohio Tax cases, 232 U. S., 576, 587; Pittsburgh C. C. & St. L. R. Co. vs.
Board of Public Works, 172 U. S., 32; Shelton vs. Plat, 139 U.S., 591; State Railroad Tax Cases, 92 U.
S., 575.) Therefore, this branch of the case must be controlled by sections 139 and 140, unless the same
be held unconstitutional, and consequently, null and void.
The right and power of judicial tribunals to declare whether enactments of the legislature exceed
the constitutional limitations and are invalid has always been considered a grave responsibility,
as well as a solemn duty. The courts invariably give the most careful consideration to questions
involving the interpretation and application of the Constitution, and approach constitutional
questions with great deliberation, exercising their power in this respect with the greatest
possible caution and even reluctance; and they should never declare a statute void, unless its
invalidity is, in their judgment, beyond reasonable doubt. To justify a court in pronouncing a
legislative act unconstitutional, or a provision of a state constitution to be in contravention of
the Constitution of the United States, the case must be so clear to be free from doubt, and the
conflict of the statute with the constitution must be irreconcilable, because it is but a decent
respect to the wisdom, the integrity, and the patriotism of the legislative body by which any law
is passed to presume in favor of its validity until the contrary is shown beyond reasonable
doubt. Therefore, in no doubtful case will the judiciary pronounce a legislative act to be
contrary to the constitution. To doubt the constitutionality of a law is to resolve the doubt in
favor of its validity. (6 Ruling Case Law, secs. 71, 72, and 73, and cases cited therein.)
It is also the settled law in the United States that "due process of law" does not always require, in
respect to the Government, the same process that is required between citizens, though it generally
implies and includes regular allegations, opportunity to answer, and a trial according to some well
settled course of judicial proceedings. The case with which we are dealing is in point. A citizen's
property, both real and personal, may be taken, and usually is taken, by the government in payment of
its taxes without any judicial proceedings whatever. In this country, as well as in the United States, the
officer charged with the collection of taxes is authorized to seize and sell the property of delinquent
taxpayers without applying to the courts for assistance, and the constitutionality of the law authorizing
this procedure never has been seriously questioned. (City of Philadelphia vs. [Diehl] The Collector, 5
Wall., 720; Nicholl vs. U.S., 7 Wall., 122, and cases cited.) This must necessarily be the course, because
it is upon taxation that the Government chiefly relies to obtain the means to carry on its operations, and
it is of the utmost importance that the modes adopted to enforce the collection of the taxes levied
should be summary and interfered with as little as possible. No government could exist if every
litigious man were permitted to delay the collection of its taxes. This principle of public policy must be
constantly borne in mind in determining cases such as the one under consideration.
With these principles to guide us, we will proceed to inquire whether there is any merit in the two
propositions insisted upon by counsel for the plaintiffs. Section 5 of the Philippine Bill provides: "That
no law shall be enacted in said Islands which shall deprive any person of life, liberty, or property
without due process of law, or deny to any person therein the equal protection of the law."
The origin and history of these provisions are well-known. They are found in substance in the
Constitution of the United States and in that of ever state in the Union.
Section 3224 of the Revised Statutes of the United States, effective since 1867, provides that: "No suit
for the purpose of restraining the assessment or collection of any tax shall be maintained in any court."
Section 139, with which we have been dealing, reads: "No court shall have authority to grant an
injunction to restrain the collection of any internal-revenue tax."
A comparison of these two sections show that they are essentially the same. Both expressly prohibit the
restraining of taxes by injunction. If the Supreme Court of the United States has clearly and definitely
held that the provisions of section 3224 do not violate the "due process of law" and "equal protection of
the law" clauses in the Constitution, we would be going too far to hold that section 139 violates those
same provisions in the Philippine Bill. That the Supreme Court of the United States has so held, cannot
be doubted.
In Cheatham vs. United States (92 U.S., 85,89) which involved the validity of an income tax levied by
an act of Congress prior to the one in issue in the case of Pollock vs. Farmers' Loan & Trust Co. (157
U.S., 429) the court, through Mr. Justice Miller, said: "If there existed in the courts, state or National,
any general power of impeding or controlling the collection of taxes, or relieving the hardship incident
to taxation, the very existence of the government might be placed in the power of a hostile judiciary.
(Dows vs. The City of Chicago, 11 Wall., 108.) While a free course of remonstrance and appeal is
allowed within the departments before the money is finally exacted, the General Government has
wisely made the payment of the tax claimed, whether of customs or of internal revenue, a condition
precedent to a resort to the courts by the party against whom the tax is assessed. In the internal revenue
branch it has further prescribed that no such suit shall be brought until the remedy by appeal has been
tried; and, if brought after this, it must be within six months after the decision on the appeal. We regard
this as a condition on which alone the government consents to litigate the lawfulness of the original tax.
It is not a hard condition. Few governments have conceded such a right on any condition. If the
compliance with this condition requires the party aggrieved to pay the money, he must do it."
Again, in State Railroad Tax Cases (92 U.S., 575, 613), the court said: "That there might be no
misunderstanding of the universality of this principle, it was expressly enacted, in 1867, that "no suit
for the purpose of restraining the assessment or collection of any tax shall be maintained in any court."
(Rev, Stat., sec. 3224.) And though this was intended to apply alone to taxes levied by the United
States, it shows the sense of Congress of the evils to be feared if courts of justice could, in any case,
interfere with the process of collecting taxes on which the government depends for its continued
existence. It is a wise policy. It is founded in the simple philosophy derived from the experience of
ages, that the payment of taxes has to be enforced by summary and stringent means against a reluctant
and often adverse sentiment; and to do this successfully, other instrumentalities and other modes of
procedure are necessary, than those which belong to courts of justice."
And again, in Snyder vs. Marks (109 U.S., 189), the court said: "The remedy of a suit to recover back
the tax after it is paid is provided by statute, and a suit to restrain its collection is forbidden. The
remedy so given is exclusive, and no other remedy can be substituted for it. Such has been the current
of decisions in the Circuit Courts of the United States, and we are satisfied it is a correct view of the
law."itc-a1f
In the consideration of the plaintiffs' second proposition, we will attempt to show (1) that the Philippine
courts never have had, since the American occupation, the power to restrain by injunction the collection
of any tax imposed by the Insular Government for its own purpose and benefit, and (2) that assuming
that our courts had or have such power, this power has not been diminished or curtailed by sections 139
and 140.
We will first review briefly the former and present systems of taxation. Upon the American occupation
of the Philippine, there was found a fairly complete system of taxation. This system was continued in
force by the military authorities, with but few changes, until the Civil Government assumed charge of
the subject. The principal sources of revenue under the Spanish regime were derived from customs
receipts, the so-called industrial taxes, the urbana taxes, the stamp tax, the personal cedula tax, and the
sale of the public domain. The industrial and urbana taxes constituted practically an income tax of some
5 per cent on the net income of persons engaged in industrial and commercial pursuits and on the
income of owners of improved city property. The sale of stamped paper and adhesive stamp tax. The
cedula tax was a graduated tax, ranging from nothing up to P37.50. The revenue derived from the sale
of the public domain was not considered a tax. The American authorities at once abolished the cedula
tax, but later restored it in a modified form, charging for each cedula twenty centavos, an amount which
was supposed to be just sufficient to cover the cost of issuance. The urbana tax was abolished by Act
No. 223, effective September 6, 1901.
The "Municipal Code" (Act No. 82) and the Provincial Government Act (No. 83), both enacted in
1901, authorize municipal councils and provincial boards to impose an ad valorem tax on real estate.
The Municipal Code did not apply to the city of Manila. This city was given a special charter (Act No.
183), effective August 30, 1901; Under this charter the Municipal Board of Manila is authorized and
empowered to impose taxes upon real estate and, like municipal councils, to license and regulate
certain occupations. Customs matters were completely reorganized by Act No. 355, effective at the port
of Manila on February 7, 1902, and at other ports in the Philippine Islands the day after the receipt of a
certified copy of the Act. The Internal Revenue Law of 1904 (Act No. 1189), repealed all existing laws,
ordinances, etc., imposing taxes upon the persons, objects, or occupations taxed under that act, and all
industrial taxes and stamp taxes imposed under the Spanish regime were eliminated, but the industrial
tax was continued in force until January 1, 1905. This Internal Revenue Law did not take away from
municipal councils, provincial boards, and the Municipal Board of the city of Manila the power to
impose taxes upon real estate. This Act (No. 1189), with its amendments, was repealed by Act No.
2339, an act "revising and consolidating the laws relative to internal revenue."
Section 84 of Act No. 82 provides that "No court shall entertain any suit assailing the validity of a tax
assessed under this act until the taxpayer shall have paid, under protest, the taxes assessed against
him, . . . ."
This inhibition was inserted in section 17 of Act No. 83 and applies to taxes imposed by provincial
boards. The inhibition was not inserted in the Manila Charter until the passage of Act No. 1793,
effective October 12, 1907. Act No. 355 expressly makes the payment of the exactions claimed a
condition precedent to a resort to the courts by dissatisfied importers. Section 52 of Act No. 1189
provides "That no courts shall have authority to grant an injunction restraining the collection of any
taxes imposed by virtue of the provisions of this Act, but the remedy of the taxpayer who claims that he
is unjustly assessed or taxed shall be by payment under protest of the sum claimed from him by the
Collector of Internal Revenue and by action to recover back the sum claimed to have been illegally
collected."
Sections 139 and 140 of Act No. 2339 contain, as we have indicated, the same prohibition and remedy.
The result is that the courts have been expressly forbidden, in every act creating or imposing taxes or
imposts enacted by the legislative body of the Philippines since the American occupation, to entertain
any suit assailing the validity of any tax or impost thus imposed until the tax shall have been paid under
protest. The only taxes which have not been brought within the express inhibition were those included
in that part of the old Spanish system which completely disappeared on or before January 1, 1905, and
possibly the old customs duties which disappeared in February, 1902.
Section 56 of the Organic Act (No. 136), effective June 16, 1901, provides that "Courts of First
Instance shall have original jurisdiction:
xxx xxx xxx
2. In all civil actions which involve the ... legality of any tax, impost, or assessment, . . . .
xxx xxx xxx
7. Said courts and their judges, or any of them, shall have power to issue writs of injunction,
mandamus, certiorari, prohibition, quo warranto, and habeas corpus in their respective
provinces and districts, in the manner provided in the Code of Civil Procedure.
The provisions of the Code of Civil Procedure (Act No. 190), effective October 1, 1901, which deals
with the subject of injunctions, are sections 162 to 172, inclusive. Injunctions, as here defined, are of
two kinds; preliminary and final. The former may be granted at any time after the commencement of
the action and before final judgment, and the latter at the termination of the trial as the relief or part of
the relief prayed for (sec. 162). Any judge of the Supreme Court may grant a preliminary injunction in
any action pending in that court or in any Court of First Instance. A preliminary injunction may also be
granted by a judge of the Court of First Instance in actions pending in his district in which he has
original jurisdiction (sec. 163). But such injunctions may be granted only when the complaint shows
facts entitling the plaintiff to the relief demanded (sec. 166), and before a final or permanent injunction
can be granted, it must appear upon the trial of the action that the plaintiff is entitled to have
commission or continuance of the acts complained of perpetually restrained (sec. 171). These
provisions authorize the institution in Courts of First Instance of what are known as "injunction suits,"
the sole object of which is to obtain the issuance of a final injunction. They also authorize the granting
of injunctions as aiders in ordinary civil actions. We have defined in Davesa vs. Arbes (13 Phil. Rep.,
273), an injunction to be "A "special remedy" adopted in that code (Act 190) from American practice,
and originally borrowed from English legal procedure, which was there issued by the authority and
under the seal of a court of equity, and limited, as in other cases where equitable relief is sought, to
those cases where there is no "plain, adequate, and complete remedy at law,"which will not be granted
while the rights between the parties are undetermined, except in extraordinary cases where material and
irreparable injury will be done,"which cannot be compensated in damages . . .
By paragraph 2 of section 56 of Act No. 136, supra, and the provisions of the various subsequent Acts
heretofore mentioned, the Insular Government has consented to litigate with aggrieved persons the
validity of any original tax or impost imposed by it on condition that this be done in ordinary civil
actions after the taxes or exactions shall have been paid. But it is said that paragraph 2 confers original
jurisdiction upon Courts of First Instance to hear and determine "all civil actions" which involve the
validity of any tax, impost or assessment, and that if the all-inclusive words "all" and "any" be given
their natural and unrestricted meaning, no action wherein that question is involved can arise over which
such courts do not have jurisdiction. (Barrameda vs. Moir, 25 Phil. Rep., 44.) This is true. But the term
"civil actions" had its well defined meaning at the time the paragraph was enacted. The same legislative
body which enacted paragraph 2 on June 16, 1901, had, just a few months prior to that time, defined
the only kind of action in which the legality of any tax imposed by it might be assailed. (Sec. 84, Act
82, enacted January 31, 1901, and sec. 17, Act No. 83, enacted February 6, 1901.) That kind of action
being payment of the tax under protest and an ordinary suit to recover and no other, there can be no
doubt that Courts of First Instance have jurisdiction over all such actions. The subsequent legislation on
the same subject shows clearly that the Commission, in enacting paragraph 2, supra, did not intend to
change or modify in any way section 84 of Act No. 82 and section 17 of Act No. 83, but, on the
contrary, it was intended that "civil actions," mentioned in said paragraph, should be understood to
mean, in so far as testing the legality of taxes were concerned, only those of the kind and character
provided for in the two sections above mentioned. It is also urged that the power to restrain by
injunction the collection of taxes or imposts is conferred upon Courts of First Instance by paragraph 7
of section 56, supra. This paragraph does empower those courts to grant injunctions, both preliminary
and final, in any civil action pending in their districts, provided always, that the complaint shows facts
entitling the plaintiff to the relief demanded. Injunction suits, such as the one at bar, are "civil actions,"
but of a special or extraordinary character. It cannot be said that the Commission intended to give a
broader or different meaning to the word "action," used in Chapter 9 of the Code of Civil Procedure in
connection with injunctions, than it gave to the same word found in paragraph 2 of section 56 of the
Organic Act. The Insular Government, in exercising the power conferred upon it by the Congress of the
United States, has declared that the citizens and residents of this country shall pay certain specified
taxes and imposts. The power to tax necessarily carries with it the power to collect the taxes. This being
true, the weight of authority supports the proposition that the Government may fix the conditions upon
which it will consent to litigate the validity of its original taxes. (Tennessee vs. Sneed, 96 U.S., 69.)
We must, therefore, conclude that paragraph 2 and 7 of section 56 of Act No. 136, construed in the light
of the prior and subsequent legislation to which we have referred, and the legislative and judicial
history of the same subject in the United States with which the Commission was familiar, do not
empower Courts of firs Instance to interfere by injunction with the collection of the taxes in question in
this case.1awphil.net
If we are in error as to the scope of paragraph 2 and 7, supra, and the Commission did intend to confer
the power upon the courts to restrain the collection of taxes, it does not necessarily follow that this
power or jurisdiction has been taken away by section 139 of Act No. 2339, for the reason that all agree
that an injunction will not issue in any case if there is an adequate remedy at law. The very nature of the
writ itself prevents its issuance under such circumstances. Legislation forbidding the issuing of
injunctions in such cases is unnecessary. So the only question to be here determined is whether the
remedy provided for in section 140 of Act No. 2339 is adequate. If it is, the writs which form the basis
of this appeal should not have been issued. If this is the correct view, the authority to issue injunctions
will not have been taken away by section 139, but rendered inoperative only by reason of an adequate
remedy having been made available.
The legislative body of the Philippine Islands has declared from the beginning (Act No. 82) that
payment under protest and suit to recover is an adequate remedy to test the legality of any tax or
impost, and that this remedy is exclusive. Can we say that the remedy is not adequate or that it is not
exclusive, or both? The plaintiffs in the case at bar are the first, in so far as we are aware, to question
either the adequacy or exclusiveness of this remedy. We will refer to a few cases in the United States
where statutes similar to sections 139 and 140 have been construed and applied.
In May, 1874, one Bloomstein presented a petition to the circuit court sitting in Nashville, Tennessee,
stating that his real and personal property had been assessed for state taxes in the year 1872 to the
amount of $132.60; that he tendered to the collector this amount in "funds receivable by law for such
purposes;" and that the collector refused to receive the same. He prayed for an alternative writ of
mandamus to compel the collector to receive the bills in payment for such taxes, or to show cause to
the contrary. To this petition the collector, in his answer, set up the defense that the petitioner's suit was
expressly prohibited by the Act of the General Assembly of the State of Tennessee, passed in 1873. The
petition was dismissed and the relief prayed for refused. An appeal to the supreme court of the State
resulted in the affirmance of the judgment of the lower court. The case was then carried to the Supreme
Court of the United States (Tennessee vs. Sneed, 96 U. S., 69), where the judgment was again affirmed.
The two sections of the Act of [March 21,] 1873, drawn in question in that cases, read as follows:
1. That in all cases in which an officer, charged by law with the collection of revenue due the
State, shall institute any proceeding, or take any steps for the collection of the same, alleged or
claimed to be due by said officer from any citizen, the party against whom the proceeding or
step is taken shall, if he conceives the same to be unjust or illegal, or against any statute or
clause of the Constitution of the State, pay the same under protest; and, upon his making said
payment, the officer or collector shall pay such revenue into the State Treasury, giving notice at
the time of payment to the Comptroller that the same was paid under protest; and the party
paying said revenue may, at any time within thirty days after making said payment, and not
longer thereafter, sue the said officer having collected said sum, for the recovery thereof. And
the same may be tried in any court having the jurisdiction of the amount and parties; and, if it be
determined that the same was wrongfully collected, as not being due from said party to the
State, for any reason going to the merits of the same, then the court trying the case may certify
of record that the same was wrongfully paid and ought to be refunded; and thereupon the
Comptroller shall issue his warrant for the same, which shall be paid in preference to other
claims on the Treasury.
2. That there shall be no other remedy, in any case of the collection of revenue, or attempt to
collect revenue illegally, or attempt to collect revenue in funds only receivable by said officer
under the law, the same being other or different funds than such as the tax payer may tender, or
claim the right to pay, than that above provided; and no writ for the prevention of the collection
of any revenue claimed, or to hinder or delay the collection of the same, shall in anywise issue,
either injunction, supersedeas, prohibition, or any other writ or process whatever; but in all
cases in which, for any reason, any person shall claim that the tax so collected was wrongfully
or illegally collected, the remedy for said party shall be as above provided, and in no other
manner."
In discussing the adequacy of the remedy provided by the Tennessee Legislature, as above set forth, the
Supreme Court of the United States, in the case just cited, said: "This remedy is simple and effective. A
suit at law to recover money unlawfully exacted is as speedy, as easily tried, and less complicated than
a proceeding by mandamus. ... In revenue cases, whether arising upon its (United States) Internal
Revenue Laws or those providing for the collection of duties upon foreign imports, it (United States)
adopts the rule prescribed by the State of Tennessee. It requires the contestant to pay the amount as
fixed by the Government, and gives him power to sue the collector, and in such suit to test the legality
of the tax. There is nothing illegal or even harsh in this. It is a wise and reasonable precaution for the
security of the Government."
Thomas C. Platt commenced an action in the Circuit Court of the United States for the Eastern District
of Tennessee to restrain the collection of a license tax from the company which he represented. The
defense was that sections 1 and 2 of the Act of 1873, supra, prohibited the bringing of that suit. This
case also reached the Supreme Court of the United States. (Shelton vs. Platt, 139 U. 591.) In speaking
of the inhibitory provisions of sections 1 and 2 of the Act of 1873, the court said: "This Act has been
sanctioned and applied by the Courts of Tennessee. (Nashville vs. Smith, 86 Tenn., 213; Louisville &
N. R. Co. vs. State, 8 Heisk., 663, 804.) It is, as counsel observe, similar to the Act of Congress
forbidding suit for the purpose of restraining the assessment or collection of taxes under the Internal
Revenue Laws, in respect to which this court held that the remedy by suit to recover back the tax after
payment, provided for by the Statute, was exclusive. (Snyder vs. Marks, of this character has been
called for by the embarrassments resulting from the improvident employment of the writ of injunction
in arresting the collection of the public revenue; and, even in its absence, the strong arm of the court of
chancery ought not to be interposed in that direction except where resort to that court is grounded upon
the settled principles which govern its jurisdiction."
In Louisville & N.R. Co. vs. State (8 Heisk. [64 Tenn.], 663, 804), cited by the Supreme Court of the
United States in Shelton vs. Platt, supra, the court said: "It was urged that this statute (sections 1 and 2
of the Act of 1873, supra) is unconstitutional and void, as it deprives the citizen of the remedy by
certiorari, guaranteed by the organic law."
By the 10th section of the sixth article of the Constitution, [Tennessee] it is provided that: "The judges
or justices of inferior courts of law and equity shall have power in all civil cases to issue writs of
certiorari, to remove any cause, or the transcript of the record thereof, from any inferior jurisdiction
into such court of law, on sufficient cause, supported by oath or affirmation."
The court held the act valid as not being in conflict with these provisions of the State constitution.
In Eddy vs. The Township of Lee (73 Mich., 123), the complainants sought to enjoin the collection of
certain taxes for the year 1886. The defendants, in support of their demurrer, insisted that the remedy
by injunction had been taken away by section 107 of the Act of 1885, which section reads as follows:
"No injunction shall issue to stay proceedings for the assessment or collection of taxes under this Act."
It was claimed by the complainants that the above quoted provisions of the Act of 1885 were
unconstitutional and void as being in conflict with article 6, sec. 8, of the Constitution, which provides
that: "The circuit courts shall have original jurisdiction in all matters, civil and criminal, not excepted
in this Constitution, and not prohibited by law. ... They shall also have power to issue writs of habeas
corpus, mandamus, injunction, quo warranto, certiorari, and other writs necessary to carry into effect
their orders, judgments, and decrees."
Mr. Justice Champlin, speaking for the court, said: "I have no doubt that the Legislature has the
constitutional authority, where it has provided a plain, adequate, and complete remedy at law to recover
back taxes illegally assessed and collected, to take away the remedy by injunction to restrain their
collection."
Section 9 of the Philippine Bill reads in part as follows: "That the Supreme Court and the Courts of
First Instance of the Philippine Islands shall possess and exercise jurisdiction as heretofore provided
and such additional jurisdiction as shall hereafter be prescribed by the Government of said Islands,
subject to the power of said Government to change the practice and method of procedure."
It will be seen that this section has not taken away from the Philippine Government the power to
change the practice and method of procedure. If sections 139 and 140, considered together, and this
must always be done, are nothing more than a mode of procedure, then it would seem that the
Legislature did not exceed its constitutional authority in enacting them. Conceding for the moment that
the duly authorized procedure for the determination of the validity of any tax, impost, or assessment
was by injunction suits and that this method was available to aggrieved taxpayers prior to the passage
of Act No. 2339, may the Legislature change this method of procedure? That the Legislature has the
power to do this, there can be no doubt, provided some other adequate remedy is substituted in lieu
thereof. In speaking of the modes of enforcing rights created by contracts, the Supreme Court of the
United States, in Tennessee vs. Sneed, supra, said: "The rule seems to be that in modes of proceedings
and of forms to enforce the contract the Legislature has the control, and may enlarge, limit or alter
them, provided that it does not deny a remedy, or so embarrass it with conditions and restrictions as
seriously to impair the value of the right."
In that case the petitioner urged that the Acts of 1873 were laws impairing the obligation of the contract
contained in the charter of the Bank of Tennessee, which contract was entered into with the State in
1838. It was claimed that this was done by placing such impediments and obstructions in the way of its
enforcement, thereby so impairing the remedies as practically to render the obligation of no value. In
disposing of this contention, the court said: "If we assume that prior to 1873 the relator had authority to
prosecute his claim against the State by mandamus, and that by the statutes of that year the further use
of that form was prohibited to him, the question remains. whether an effectual remedy was left to him
or provided for him. We think the regulation of the statute gave him an abundant means of enforcing
such right as he possessed. It provided that he might pay his claim to the collector under protest, giving
notice thereof to the Comptroller of the Treasury; that at any time within thirty days thereafter he might
sue the officer making the collection; that the case should be tried by any court having jurisdiction and,
if found in favor of the plaintiff on the merits, the court should certify that the same was wrongfully
paid and ought to be refunded and the Comptroller should thereupon issue his warrant therefor, which
should be paid in preference to other claim on the Treasury."
But great stress is laid upon the fact that the plaintiffs in the case under consideration are unable to pay
the taxes assessed against them and that if the law is enforced, they will be compelled to suspend
business. This point may be best answered by quoting from the case of Youngblood vs. Sexton (32
Mich., 406), wherein Judge Cooley, speaking for the court, said: "But if this consideration is sufficient
to justify the transfer of a controversy from a court of law to a court of equity, then every controversy
where money is demanded may be made the subject of equitable cognizance. To enforce against a
dealer a promissory note may in some cases as effectually break up his business as to collect from him
a tax of equal amount. This is not what is known to the law as irreparable injury. The courts have never
recognized the consequences of the mere enforcement of a money demand as falling within that
category."
Certain specified sections of Act No. 2339 were amended by Act No. 2432, enacted December 23,
1914, effective January 1, 1915, by imposing increased and additional taxes. Act No. 2432 was
amended, were ratified by the Congress of the United States on March 4, 1915. The opposition
manifested against the taxes imposed by Acts Nos. 2339 and 2432 is a matter of local history. A great
many business men thought the taxes thus imposed were too high. If the collection of the new taxes on
signs, signboards, and billboards may be restrained, we see no well-founded reason why injunctions
cannot be granted restraining the collection of all or at least a number of the other increased taxes. The
fact that this may be done, shows the wisdom of the Legislature in denying the use of the writ of
injunction to restrain the collection of any tax imposed by the Acts. When this was done, an equitable
remedy was made available to all dissatisfied taxpayers.
The question now arises whether, the case being one of which the court below had no jurisdiction, this
court, on appeal, shall proceed to express an opinion upon the validity of provisions of subsection (b)
of section 100 of Act No. 2339, imposing the taxes complained of. As a general rule, an opinion on the
merits of a controversy ought to be declined when the court is powerless to give the relief demanded.
But it is claimed that this case is, in many particulars, exceptional. It is true that it has been argued on
the merits, and there is no reason for any suggestion or suspicion that it is not a bona fide controversy.
The legal points involved in the merits have been presented with force, clearness, and great ability by
the learned counsel of both sides. If the law assailed were still in force, we would feel that an opinion
on its validity would be justifiable, but, as the amendment became effective on January 1, 1915, we
think it advisable to proceed no further with this branch of the case.
The next question arises in connection with the supplementary complaint, the object of which is to
enjoin the Collector of Internal Revenue from removing certain billboards, the property of the plaintiffs
located upon private lands in the Province of Rizal. The plaintiffs allege that the billboards here in
question "in no sense constitute a nuisance and are not deleterious to the health, morals, or general
welfare of the community, or of any persons." The defendant denies these allegations in his answer and
claims that after due investigation made upon the complaints of the British and German Consuls, he
"decided that the billboard complained of was and still is offensive to the sight, and is otherwise a
nuisance." The plaintiffs proved by Mr. Churchill that the "billboards were quite a distance from the
road and that they were strongly built, not dangerous to the safety of the people, and contained no
advertising matter which is filthy, indecent, or deleterious to the morals of the community." The
defendant presented no testimony upon this point. In the agreed statement of facts submitted by the
parties, the plaintiffs "admit that the billboards mentioned were and still are offensive to the sight."
The pertinent provisions of subsection (b) of section 100 of Act No. 2339 read: "If after due
investigation the Collector of Internal Revenue shall decide that any sign, signboard, or billboard
displayed or exposed to public view is offensive to the sight or is otherwise a nuisance, he may by
summary order direct the removal of such sign, signboard, or billboard, and if same is not removed
within ten days after he has issued such order he my himself cause its removal, and the sign, signboard,
or billboard shall thereupon be forfeited to the Government, and the owner thereof charged with the
expenses of the removal so effected. When the sign, signboard, or billboard ordered to be removed as
herein provided shall not comply with the provisions of the general regulations of the Collector of
Internal Revenue, no rebate or refund shall be allowed for any portion of a year for which the tax may
have been paid. Otherwise, the Collector of Internal Revenue may in his discretion make a
proportionate refund of the tax for the portion of the year remaining for which the taxes were paid. An
appeal may be had from the order of the Collector of Internal Revenue to the Secretary of Finance and
Justice whose decision thereon shall be final."
The Attorney-General, on behalf of the defendant, says: "The question which the case presents under
this head for determination, resolves itself into this inquiry: Is the suppression of advertising signs
displayed or exposed to public view, which are admittedly offensive to the sight, conducive to the
public interest?"
And cunsel for the plaintiffs states the question thus: "We contend that that portion of section 100 of
Act No. 2339, empowering the Collector of Internal Revenue to remove billboards as nuisances, if
objectionable to the sight, is unconstitutional, as constituting a deprivation of property without due
process of law."
From the position taken by counsel for both sides, it is clear that our inquiry is limited to the question
whether the enactment assailed by the plaintiffs was a legitimate exercise of the police power of the
Government; for all property is held subject to that power.
As a consequence of the foregoing, all discussion and authorities cited, which go to the power of the
state to authorize administrative officers to find, as a fact, that legitimate trades, callings, and
businesses are, under certain circumstances, statutory nuisances, and whether the procedure prescribed
for this purpose is due process of law, are foreign to the issue here presented.
There can be no doubt that the exercise of the police power of the Philippine Government belongs to
the Legislature and that this power is limited only by the Acts of Congress and those fundamentals
principles which lie at the foundation of all republican forms of government. An Act of the Legislature
which is obviously and undoubtedly foreign to any of the purposes of the police power and interferes
with the ordinary enjoyment of property would, without doubt, be held to be invalid. But where the Act
is reasonably within a proper consideration of and care for the public health, safety, or comfort, it
should not be disturbed by the courts. The courts cannot substitute their own views for what is proper
in the premises for those of the Legislature. In Munn vs. Illinois (94 U.S., 113), the United States
Supreme Court states the rule thus: "If no state of circumstances could exist to justify such statute, then
we may declare this one void because in excess of the legislative power of this state; but if it could, we
must presume it did. Of the propriety of legislative interference, within the scope of the legislative
power, a legislature is the exclusive judge."
This rule very fully discussed and declared in Powell vs. Pennsylvania (127 U.S., 678) — "oleo-
margarine" case. (See also Crowley vs. Christensen, 137 U.S., 86, 87; Camfield vs. U.S., 167 U.S.,
518.) While the state may interfere wherever the public interests demand it, and in this particular a
large discretion is necessarily vested in the legislature to determine, not only what the interest of the
public require, but what measures are necessary for the protection of such interests; yet, its
determination in these matters is not final or conclusive, but is subject to the supervision of the courts.
(Lawton vs. Steele, 152 U.S., 133.) Can it be said judicially that signs, signboards, and billboards,
which are admittedly offensive to the sight, are not with the category of things which interfere with the
public safety, welfare, and comfort, and therefore beyond the reach of the police power of the
Philippine Government?
The numerous attempts which have been made to limit by definition the scope of the police power are
only interesting as illustrating its rapid extension within comparatively recent years to points heretofore
deemed entirely within the field of private liberty and property rights. Blackstone's definition of the
police power was as follows: "The due regulation and domestic order of the kingdom, whereby the
individuals of the state, like members of a well governed family, are bound to conform their general
behavior to the rules of propriety, good neigborhood, and good manners, to be decent, industrious, and
inoffensive in their respective stations." (Commentaries, vol. 4, p. 162.)
Chanceller Kent considered the police power the authority of the state "to regulate unwholesome
trades, slaughter houses, operations offensive to the senses." Chief Justice Shaw of Massachusetts
defined it as follows: "The power vested in the legislature by the constitution to make, ordain, and
establish all manner of wholesome and reasonable laws, statutes, and ordinances, either with penalties
or without, not repugnant to the constitution, as they shall judge to be for the good and welfare of the
commonwealth, and of the subjects of the same." (Com. vs. Alger, 7 Cush., 53.)
In the case of Butchers' Union Slaughter-house, etc. Co. vs. Crescent City Live Stock Landing, etc. Co.
(111 U.S., 746), it was suggested that the public health and public morals are matters of legislative
concern of which the legislature cannot divest itself. (See State vs. Mountain Timber Co. [1913], 75
Wash., 581, where these definitions are collated.)
In Champer vs. Greencastle (138 Ind., 339), it was said: "The police power of the State, so far, has not
received a full and complete definition. It may be said, however, to be the right of the State, or state
functionary, to prescribe regulations for the good order, peace, health, protection, comfort, convenience
and morals of the community, which do not ... violate any of the provisions of the organic law."
(Quoted with approval in Hopkins vs. Richmond [Va., 1915], 86 S.E., 139.)
In Com. vs. Plymouth Coal Co. ([1911] 232 Pa., 141), it was said: "The police power of the state is
difficult of definition, but it has been held by the courts to be the right to prescribe regulations for the
good order, peace, health, protection, comfort, convenience and morals of the community, which does
not encroach on a like power vested in congress or state legislatures by the federal constitution, or does
not violate the provisions of the organic law; and it has been expressly held that the fourteenth
amendment to the federal constitution was not designed to interfere with the exercise of that power by
the state."
In People vs. Brazee ([Mich., 1914], 149 N.W., 1053), it was said: "It [the police power] has for its
object the improvement of social and economic conditioned affecting the community at large and
collectively with a view to bring about "he greatest good of the greatest number."Courts have
consistently and wisely declined to set any fixed limitations upon subjects calling for the exercise of
this power. It is elastic and is exercised from time to time as varying social conditions demand
correction."
In 8 Cyc., 863, it is said: "Police power is the name given to that inherent sovereignty which it is the
right and duty of the government or its agents to exercise whenever public policy, in a broad sense,
demands, for the benefit of society at large, regulations to guard its morals, safety, health, order or to
insure in any respect such economic conditions as an advancing civilization of a high complex
character requires." (As quoted with approval in Stettler vs. O'Hara [1914], 69 Ore, 519.)
Finally, the Supreme Court of the United States has said in Noble State Bank vs. Haskell (219 U.S.
[1911], 575: "It may be said in a general way that the police power extends to all the great public needs.
It may be put forth in aid of what is sanctioned by usage, or held by the prevailing morality or strong
and preponderant opinion to be greatly and immediately necessary to the public welfare."
This statement, recent as it is, has been quoted with approval by several courts. (Cunningham vs.
Northwestern Imp. Co. [1911], 44 Mont., 180; State vs. Mountain Timber Co. [1913], 75 Wash., 581;
McDavid vs. Bank of Bay Minette [Ala., 1915], 69 Sou., 452; Hopkins vs. City of Richmond [Va.,
1915], 86 S.E., 139; State vs. Philipps [Miss. 1915], 67 Sou., 651.)
It was said in Com. vs. Alger (7 Cush., 53, 85), per Shaw, C.J., that: "It is much easier to perceive and
realize the existence and sources of this police power than to mark its boundaries, or to prescribe limits
to its exercise." In Stone vs. Mississippi (101 U.S., 814), it was said: "Many attempts have been made
in this court and elsewhere to define the police power, but never with entire success. It is always easier
to determine whether a particular case comes within the general scope of the power, than to give an
abstract definition of the power itself, which will be in all respects accurate."
Other courts have held the same vow of efforts to evolve a satisfactory definition of the police power.
Manifestly, definitions which fail to anticipate cases properly within the scope of the police power are
deficient. It is necessary, therefore, to confine our discussion to the principle involved and determine
whether the cases as they come up are within that principle. The basic idea of civil polity in the United
States is that government should interfere with individual effort only to the extent necessary to preserve
a healthy social and economic condition of the country. State interference with the use of private
property may be exercised in three ways. First, through the power of taxation, second, through the
power of eminent domain, and third, through the police power. Buy the first method it is assumed that
the individual receives the equivalent of the tax in the form of protection and benefit he receives from
the government as such. By the second method he receives the market value of the property taken from
him. But under the third method the benefits he derived are only such as may arise from the
maintenance of a healthy economic standard of society and is often referred to as damnum absque
injuria. (Com. vs. Plymouth Coal Co. 232 Pa., 141; Bemis vs. Guirl Drainage Co., 182 Ind., 36.) There
was a time when state interference with the use of private property under the guise of the police power
was practically confined to the suppression of common nuisances. At the present day, however,
industry is organized along lines which make it possible for large combinations of capital to profit at
the expense of the socio-economic progress of the nation by controlling prices and dictating to
industrial workers wages and conditions of labor. Not only this but the universal use of mechanical
contrivances by producers and common carriers has enormously increased the toll of human life and
limb in the production and distribution of consumption goods. To the extent that these businesses affect
not only the public health, safety, and morals, but also the general social and economic life of the
nation, it has been and will continue to be necessary for the state to interfere by regulation. By so
doing, it is true that the enjoyment of private property is interfered with in no small degree and in ways
that would have been considered entirely unnecessary in years gone by. The regulation of rates charged
by common carriers, for instance, or the limitation of hours of work in industrial establishments have
only a very indirect bearing upon the public health, safety, and morals, but do bear directly upon social
and economic conditions. To permit each individual unit of society to feel that his industry will bring a
fair return; to see that his work shall be done under conditions that will not either immediately or
eventually ruin his health; to prevent the artificial inflation of prices of the things which are necessary
for his physical well being are matters which the individual is no longer capable of attending to
himself. It is within the province of the police power to render assistance to the people to the extent that
may be necessary to safeguard these rights. Hence, laws providing for the regulation of wages and
hours of labor of coal miners (Rail & River Coal Co. vs. Taylor, 234 U.S., 224); requiring payment of
employees of railroads and other industrial concerns in legal tender and requiring salaries to be paid
semimonthly (Erie R.R. Co. vs. Williams, 233 U.S., 685); providing a maximum number of hours of
labor for women (Miller vs. Wilson, U.S. Sup. Ct. [Feb. 23, 1915], Adv. Opns., p. 342); prohibiting
child labor (Sturges & Burn vs. Beauchamp, 231 U.S., 320); restricting the hours of labor in public
laundries (In re Wong Wing, 167 Cal., 109); limiting hours of labor in industrial establishment
generally (State vs. Bunting, 71 Ore., 259); Sunday Closing Laws (State vs. Nicholls [Ore., 1915], 151
Pac., 473; People vs. C. Klinck Packing Co. [N.Y., 1915], 108 N. E., 278; Hiller vs. State [Md., 1914],
92 Atl., 842; State vs. Penny, 42 Mont., 118; City of Springfield vs. Richter, 257 Ill., 578, 580; State vs.
Hondros [S.C., 1915], 84 S.E., 781); have all been upheld as a valid exercise of the police power.
Again, workmen's compensation laws have been quite generally upheld. These statutes discard the
common law theory that employers are not liable for industrial accidents and make them responsible
for all accidents resulting from trade risks, it being considered that such accidents are a legitimate
charge against production and that the employer by controlling the prices of his product may shift the
burden to the community. Laws requiring state banks to join in establishing a depositors' guarantee
fund have also been upheld by the Federal Supreme Court in Noble State Bank vs. Haskell (219 U. S.,
104), and Assaria State Bank vs. Dolley (219 U.S., 121).
Offensive noises and smells have been for a long time considered susceptible of suppression in thickly
populated districts. Barring livery stables from such locations was approved of in Reinman vs. Little
Rock (U.S. Sup. Ct. [Apr. 5, 1915], U.S. Adv. Opns., p. 511). And a municipal ordinance was recently
upheld (People vs. Ericsson, 263 Ill., 368), which prohibited the location of garages within two hundred
feet of any hospital, church, or school, or in any block used exclusively for residential purposes, unless
the consent of the majority of the property owners be obtained. Such statutes as these are usually
upheld on the theory of safeguarding the public health. But we apprehend that in point of fact they have
little bearing upon the health of the normal person, but a great deal to do with his physical comfort and
convenience and not a little to do with his peace of mind. Without entering into the realm of
psychology, we think it quite demonstrable that sight is as valuable to a human being as any of his other
senses, and that the proper ministration to this sense conduces as much to his contentment as the care
bestowed upon the senses of hearing or smell, and probably as much as both together. Objects may be
offensive to the eye as well as to the nose or ear. Man's esthetic feelings are constantly being appealed
to through his sense of sight. Large investments have been made in theaters and other forms of
amusement, in paintings and spectacular displays, the success of which depends in great part upon the
appeal made through the sense of sight. Moving picture shows could not possible without the sense of
sight. Governments have spent millions on parks and boulevards and other forms of civic beauty, the
first aim of which is to appeal to the sense of sight. Why, then, should the Government not interpose to
protect from annoyance this most valuable of man's senses as readily as to protect him from offensive
noises and smells?
The advertising industry is a legitimate one. It is at the same time a cause and an effect of the great
industrial age through which the world is now passing. Millions are spent each year in this manner to
guide the consumer to the articles which he needs. The sense of sight is the primary essential to
advertising success. Billboard advertising, as it is now conducted, is a comparatively recent form of
advertising. It is conducted out of doors and along the arteries of travel, and compels attention by the
strategic locations of the boards, which obstruct the range of vision at points where travelers are most
likely to direct their eyes. Beautiful landscapes are marred or may not be seen at all by the traveler
because of the gaudy array of posters announcing a particular kind of breakfast food, or underwear, the
coming of a circus, an incomparable soap, nostrums or medicines for the curing of all the ills to which
the flesh is heir, etc. It is quite natural for people to protest against this indiscriminate and wholesale
use of the landscape by advertisers and the intrusion of tradesmen upon their hours of leisure and
relaxation from work. Outdoor life must lose much of its charm and pleasure if this form of advertising
is permitted to continue unhampered until it converts the streets and highways into veritable canyons
through which the world must travel in going to work or in search of outdoor pleasure.
The success of billboard advertising depends not so much upon the use of private property as it does
upon the use of the channels of travel used by the general public. Suppose that the owner of private
property, who so vigorously objects to the restriction of this form of advertising, should require the
advertiser to paste his posters upon the billboards so that they would face the interior of the property
instead of the exterior. Billboard advertising would die a natural death if this were done, and its real
dependency not upon the unrestricted use of private property but upon the unrestricted use of the public
highways is at once apparent. Ostensibly located on private property, the real and sole value of the
billboard is its proximity to the public thoroughfares. Hence, we conceive that the regulation of
billboards and their restriction is not so much a regulation of private property as it is a regulation of the
use of the streets and other public thoroughfares.
We would not be understood as saying that billboard advertising is not a legitimate business any more
than we would say that a livery stable or an automobile garage is not. Even a billboard is more sightly
than piles of rubbish or an open sewer. But all these businesses are offensive to the senses under certain
conditions.
It has been urged against ministering to the sense of sight that tastes are so diversified that there is no
safe standard of legislation in this direction. We answer in the language of the Supreme Court in Noble
State Bank vs. Haskell (219 U.S., 104), and which has already been adopted by several state courts (see
supra), that "the prevailing morality or strong and preponderating opinion" demands such legislation.
The agitation against the unrestrained development of the billboard business has produced results in
nearly all the countries of Europe. (Ency. Britannica, vol. 1, pp. 237-240.) Many drastic ordinances and
state laws have been passed in the United States seeking to make the business amenable to regulation.
But their regulation in the United states is hampered by what we conceive an unwarranted restriction
upon the scope of the police power by the courts. If the police power may be exercised to encourage a
healthy social and economic condition in the country, and if the comfort and convenience of the people
are included within those subjects, everything which encroaches upon such territory is amenable to the
police power. A source of annoyance and irritation to the public does not minister to the comfort and
convenience of the public. And we are of the opinion that the prevailing sentiment is manifestly against
the erection of billboards which are offensive to the sight.
We do not consider that we are in conflict with the decision in Eubank vs. Richmond (226 U.S., 137),
where a municipal ordinance establishing a building line to which property owners must conform was
held unconstitutional. As we have pointed out, billboard advertising is not so much a use of private
property as it is a use of the public thoroughfares. It derives its value to the power solely because the
posters are exposed to the public gaze. It may well be that the state may not require private property
owners to conform to a building line, but may prescribe the conditions under which they shall make use
of the adjoining streets and highways. Nor is the law in question to be held invalid as denying equal
protection of the laws. In Keokee Coke Co. vs. Taylor (234 U.S., 224), it was said: "It is more pressed
that the act discriminates unconstitutionally against certain classes. But while there are differences of
opinion as to the degree and kind of discrimination permitted by the Fourteenth Amendment, it is
established by repeated decisions that a statute aimed at what is deemed an evil, and hitting it
presumably where experience shows it to be most felt, is not to be upset by thinking up and
enumerating other instances to which it might have been applied equally well, so far as the court can
see. That is for the legislature to judge unless the case is very clear."
But we have not overlooked the fact that we are not in harmony with the highest courts of a number of
the states in the American Union upon this point. Those courts being of the opinion that statutes which
are prompted and inspired by esthetic considerations merely, having for their sole purpose the
promotion and gratification of the esthetic sense, and not the promotion or protection of the public
safety, the public peace and good order of society, must be held invalid and contrary to constitutional
provisions holding inviolate the rights of private property. Or, in other words, the police power cannot
interfere with private property rights for purely esthetic purposes. The courts, taking this view, rest their
decisions upon the proposition that the esthetic sense is disassociated entirely from any relation to the
public health, morals, comfort, or general welfare and is, therefore, beyond the police power of the
state. But we are of the opinion, as above indicated, that unsightly advertisements or signs, signboards,
or billboards which are offensive to the sight, are not disassociated from the general welfare of the
public. This is not establishing a new principle, but carrying a well recognized principle to further
application. (Fruend on Police Power, p. 166.)
For the foregoing reasons the judgment appealed from is hereby reversed and the action dismissed
upon the merits, with costs. So ordered.
Arellano, C.J., Torres, Carson, and Araullo, JJ., concur.
DECISION ON THE MOTION FOR A REHEARING, JANUARY 24, 1916.
TRENT, J.:
Counsel for the plaintiffs call our attention to the case of Ex parte Young (209 U.S., 123); and say that
they are of the opinion that this case "is the absolutely determinative of the question of jurisdiction in
injunctions of this kind." We did not refer to this case in our former opinion because we were satisfied
that the reasoning of the case is not applicable to section 100 (b), 139 and 140 of Act No. 2339. The
principles announced in the Young case are stated as follows: "It may therefore be said that when the
penalties for disobedience are by fines so enormous and imprisonment so severe as to intimidate the
company and its officers from resorting to the courts to test the validity of the legislation, the result is
the same as if the law in terms prohibited the company from seeking judicial construction of laws
which deeply affect its rights.
It is urged that there is no principle upon which to base the claim that a person is entitled to
disobey a statute at least once, for the purpose of testing its validity without subjecting himself
to the penalties for disobedience provided by the statute in case it is valid. This is not an
accurate statement of the case. Ordinarily a law creating offenses in the nature of misdemeanors
or felonies relates to a subject over which the jurisdiction of the legislature is complete in any
event. In these case, however, of the establishment of certain rates without any hearing, the
validity of such rates necessarily depends upon whether they are high enough to permit at least
some return upon the investment (how much it is not now necessary to state), and an inquiry as
to that fact is a proper subject of judicial investigation. If it turns out that the rates are too low
for that purpose, then they are illegal. Now, to impose upon a party interested the burden of
obtaining a judicial decision of such a question (no prior hearing having ever been given) only
upon the condition that, if unsuccessful, he must suffer imprisonment and pay fines as provided
in these acts, is, in effect, to close up all approaches to the courts, and thus prevent any hearing
upon the question whether the rates as provided by the acts are not too low, and therefore
invalid. The distinction is obvious between a case where the validity of the acts depends upon
the existence of a fact which can be determined only after investigation of a very complicated
and technical character, and the ordinary case of a statute upon a subject requiring no such
investigation and over which the jurisdiction of the legislature is complete in any event.
An examination of the sections of our Internal Revenue Law and of the circumstances under which and
the purposes for which they were enacted, will show that, unlike the statutes under consideration in the
above cited case, their enactment involved no attempt on the part of the Legislature to prevent
dissatisfied taxpayers "from resorting to the courts to test the validity of the legislation;" no effort to
prevent any inquiry as to their validity. While section 139 does prevent the testing of the validity of
subsection (b) of section 100 in injunction suits instituted for the purpose of restraining the collection
of internal revenue taxes, section 140 provides a complete remedy for that purpose. And furthermore,
the validity of subsection (b) does not depend upon "the existence of a fact which can be determined
only after investigation of a very complicated and technical character," but the jurisdiction of the
Legislature over the subject with which the subsection deals "is complete in any event." The judgment
of the court in the Young case rests upon the proposition that the aggrieved parties had no adequate
remedy at law.
Neither did we overlook the case of General Oil Co. vs. Crain (209 U.S., 211), decided the same
day and citing Ex parte Young, supra. In that case the plaintiff was a Tennessee corporation,
with its principal place of business in Memphis, Tennessee. It was engaged in the manufacture
and sale of coal oil, etc. Its wells and plant were located in Pennsylvania and Ohio. Memphis
was not only its place of business, at which place it sold oil to the residents of Tennessee, but
also a distributing point to which oils were shipped from Pennsylvania and Ohio and unloaded
into various tanks for the purpose of being forwarded to the Arkansas, Louisiana, and
Mississippi customers. Notwithstanding the fact that the company separated its oils, which were
designated to meet the requirements of the orders from those States, from the oils for sale in
Tennessee, the defendant insisted that he had a right, under the Act of the Tennessee Legislature,
approved April 21, 1899, to inspect all the oils unlocated in Memphis, whether for sale in that
State or not, and charge and collect for such inspection a regular fee of twenty-five cents per
barrel. The company, being advised that the defendant had no such right, instituted this action in
the inferior States court for the purpose of enjoining the defendant, upon the grounds stated in
the bill, from inspecting or attempting to inspect its oils. Upon trial, the preliminary injunction
which had been granted at the commencement of the action, was continued in force. Upon
appeal, the supreme court of the State of Tennessee decided that the suit was one against the
State and reversed the judgment of the Chancellor. In the Supreme Court of the United States,
where the case was reviewed upon a writ of error, the contentions of the parties were stated by
the court as follows: "It is contended by defendant in error that this court is without jurisdiction
because no matter sought to be litigated by plaintiff in error was determined by the Supreme
Court of Tennessee. The court simply held, it is paid, that, under the laws of the State, it had no
jurisdiction to entertain the suit for any purpose. And it is insisted "hat this holding involved no
Federal question, but only the powers and jurisdiction of the courts of the State of Tennessee, in
respect to which the Supreme Court of Tennessee is the final arbiter."
Opposing these contentions, plaintiff in error urges that whether a suit is one against a State
cannot depend upon the declaration of a statute, but depends upon the essential nature ofthe suit,
and that the Supreme Court recognized that the statute "aded nothing to the axiomatic principle
that the State, as a sovereign, is not subject to suit save by its own consent."And it is hence
insisted that the court by dismissing the bill gave effect to the law which was attacked. It is
further insisted that the bill undoubtedly present rights under the Constitution of the United
States and conditions which entitle plaintiff in error to an injunction for the protection of such
rights, and that a statute of the State which operates to deny such rights, or such relief, `is itself
in conflict with the Constitution of the United States."
That statute of Tennessee, which the supreme court of that State construed and held to be prohibitory of
the suit, was an act passed February 28, 1873, which provides: "That no court in the State of Tennessee
has, nor shall hereafter have, any power, jurisdiction, or authority to entertain any suit against the State,
or any officer acting by the authority of the State, with a view to reach the State, its treasury, funds or
property; and all such suits now pending, or hereafter brought, shall be dismissed as to the State, or
such officer, on motion, plea or demurrer of the law officer of the State, or counsel employed by the
State."
The Supreme Court of the United States, after reviewing many cases, said: "Necessarily, to give
adequate protection to constitutional rights a distinction must be made between valid and invalid state
laws, as determining the character of the suit against state officers. And the suit at bar illustrates the
necessity. If a suit against state officer is precluded in the national courts by the Eleventh Amendment
to the Constitution, and may be forbidden by a State to its courts, as it is contended in the case at bar
that it may be, without power of review by this court, it must be evident that an easy way is open to
prevent the enforcement of many provisions of the Constitution; and the Fourteenth Amendment, which
is directed at state action, could be nullified as to much of its operation. ... It being then the right of a
party to be protected against a law which violates a constitutional right, whether by its terms or the
manner of its enforcement, it is manifest that a decision which denies such protection gives effect to the
law, and the decision is reviewable by this court."
The court then proceeded to consider whether the law of 1899 would, if administered against the oils in
question, violate any constitutional right of the plaintiff and after finding and adjudging that the oils
were not in movement through the States, that they had reached the destination of their first shipment,
and were held there, not in necessary delay at means of transportation but for the business purposes and
profit of the company, and resting its judgment upon the taxing power of the State, affirmed the decree
of the supreme court of the State of Tennessee.
From the foregoing it will be seen that the Supreme Court of Tennessee dismissed the case for want of
jurisdiction because the suit was one against the State, which was prohibited by the Tennessee
Legislature. The Supreme Court of the United States took jurisdiction of the controversy for the reasons
above quoted and sustained the Act of 1899 as a revenue law.
The case of Tennessee vs. Sneed (96 U.S., 69), and Shelton vs. Platt (139 U.S., 591), relied upon in our
former opinion, were not cited in General Oil Co. vs. Crain, supra, because the questions presented and
the statutes under consideration were entirely different. The Act approved March 31, 1873, expressly
prohibits the courts from restraining the collection of any tax, leaving the dissatisfied taxpayer to his
exclusive remedy — payment under protest and suit to recover — while the Act approved February 28,
1873, prohibits suits against the State.
In upholding the statute which authorizes the removal of signboards or billboards upon the sole ground
that they are offensive to the sight, we recognized the fact that we are not in harmony with various state
courts in the American Union. We have just examined the decision of the Supreme Court of the State of
Illinois in the recent case (October [December], 1914) of Thomas Cusack Co. vs. City of Chicago (267
Ill., 344), wherein the court upheld the validity of a municipal ordinances, which reads as follows:
"707. Frontage consents required. It shall be unlawful for any person, firm or corporation to erect or
construct any bill-board or sign-board in any block on any public street in which one-half of the
buildings on both sides of the street are used exclusively for residence purposes, without first obtaining
the consent, in writing, of the owners or duly authorized agents of said owners owning a majority of the
frontage of the property, on both sides of the street, in the block in which such bill-board or sign-board
is to be erected, constructed or located. Such written consent shall be filed with the commissioner of
buildings before a permit shall be issued for the erection, construction or location of such bill-board or
sign-board."
The evidence which the Illinois court relied upon was the danger of fires, the fact that billboards
promote the commission of various immoral and filthy acts by disorderly persons, and the inadequate
police protection furnished to residential districts. The last objection has no virtue unless one or the
other of the other objections are valid. If the billboard industry does, in fact, promote such municipal
evils to noticeable extent, it seems a curious inconsistency that a majority of the property owners on a
given block may legalize the business. However, the decision is undoubtedly a considerable advance
over the views taken by other high courts in the United States and distinguishes several Illinois
decisions. It is an advance because it permits the suppression of billboards where they are undesirable.
The ordinance which the court approved will no doubt cause the virtual suppression of the business in
the residential districts. Hence, it is recognized that under certain circumstances billboards may be
suppressed as an unlawful use of private property. Logically, it would seem that the premise of fact
relied upon is not very solid. Objections to the billboard upon police, sanitary, and moral grounds have
been, as pointed out by counsel for Churchill and Tait, duly considered by numerous high courts in the
United States, and, with one exception, have been rejected as without foundation. The exception is the
Supreme Court of Missouri, which advances practically the same line of reasoning as has the Illinois
court in this recent case. (St. Louis Gunning Advt. Co. vs. City of St. Louis, 137 S. W., 929.) In fact, the
Illinois court, in Haller Sign Works vs. Physical Culture Training School (249 Ill., 436), "distinguished"
in the recent case, said: "There is nothing inherently dangerous to the health or safety of the public in
structures that are properly erected for advertising purposes."
If a billboard is so constructed as to offer no room for objections on sanitary or moral grounds, it would
seem that the ordinance above quoted would have to be sustained upon the very grounds which we
have advanced in sustaining our own statute.
It might be well to note that billboard legislation in the United States is attempting to eradicate a
business which has already been firmly established. This business was allowed to expand unchecked
until its very extent called attention to its objectionable features. In the Philippine Islands such
legislation has almost anticipated the business, which is not yet of such proportions that it can be said
to be fairly established. It may be that the courts in the United States have committed themselves to a
course of decisions with respect to billboard advertising, the full consequences of which were not
perceived for the reason that the development of the business has been so recent that the objectionable
features of it did not present themselves clearly to the courts nor to the people. We, in this country, have
the benefit of the experience of the people of the United States and may make our legislation
preventive rather than corrective. There are in this country, moreover, on every hand in those districts
where Spanish civilization has held sway for so many centuries, examples of architecture now
belonging to a past age, and which are attractive not only to the residents of the country but to visitors.
If the billboard industry is permitted without constraint or control to hide these historic sites from the
passerby, the country will be less attractive to the tourist and the people will suffer a district economic
loss.
The motion for a rehearing is therefore denied.
Arellano, C.J., Torres, and Carson, JJ., concur.
SUPREME COURT
Manila
EN BANC
G.R. No. 127876 December 17, 1999
ROXAS & CO., INC., petitioner,

vs.
THE HONORABLE COURT OF APPEALS, DEPARTMENT OF AGRARIAN REFORM, SECRETARY OF AGRARIAN REFORM, DAR REGIONAL DIRECTOR
FOR REGION IV, MUNICIPAL AGRARIAN REFORM OFFICER OF NASUGBU, BATANGAS and DEPARTMENT OF AGRARIAN REFORM ADJUDICATION
BOARD, respondents.
PUNO, J.:
This case involves three (3) haciendas in Nasugbu, Batangas owned by petitioner and the validity of the acquisition of these haciendas by the government under
Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988.
Petitioner Roxas & Co. is a domestic corporation and is the registered owner of three haciendas, namely, Haciendas Palico, Banilad and Caylaway, all located in
the Municipality of Nasugbu, Batangas. Hacienda Palico is 1,024 hectares in area and is registered under Transfer Certificate of Title (TCT) No. 985. This land is
covered by Tax Declaration Nos. 0465, 0466, 0468, 0470, 0234 and 0354. Hacienda Banilad is 1,050 hectares in area, registered under TCT No. 924 and
covered by Tax Declaration Nos. 0236, 0237 and 0390. Hacienda Caylaway is 867.4571 hectares in area and is registered under TCT Nos. T-44662, T-44663, T-
44664 and T-44665.
The events of this case occurred during the incumbency of then President Corazon C. Aquino. In February 1986, President Aquino issued Proclamation No. 3
promulgating a Provisional Constitution. As head of the provisional government, the President exercised legislative power "until a legislature is elected and
convened under a new Constitution." 1 In the exercise of this legislative power, the President signed on July 22, 1987, Proclamation No. 131 instituting a
Comprehensive Agrarian Reform Program and Executive Order No. 229 providing the mechanisms necessary to initially implement the program.
On July 27, 1987, the Congress of the Philippines formally convened and took over legislative power from the President. 2 This Congress passed Republic Act
No. 6657, the Comprehensive Agrarian Reform Law (CARL) of 1988. The Act was signed by the President on June 10, 1988 and took effect on June 15, 1988.
Before the law's effectivity, on May 6, 1988, petitioner filed with respondent DAR a voluntary offer to sell Hacienda Caylaway pursuant to the provisions of E.O.
No. 229. Haciendas Palico and Banilad were later placed under compulsory acquisition by respondent DAR in accordance with the CARL.
Hacienda Palico
On September 29, 1989, respondent DAR, through respondent Municipal Agrarian Reform Officer (MARO) of Nasugbu, Batangas, sent a notice entitled
"Invitation to Parties" to petitioner. The Invitation was addressed to "Jaime Pimentel, Hda. Administrator, Hda. Palico." 3 Therein, the MARO invited petitioner to a
conference on October 6, 1989 at the DAR office in Nasugbu to discuss the results of the DAR investigation of Hacienda Palico, which was "scheduled for
compulsory acquisition this year under the Comprehensive Agrarian Reform Program." 4
On October 25, 1989, the MARO completed three (3) Investigation Reports after investigation and ocular inspection of the Hacienda. In the first Report, the
MARO found that 270 hectares under Tax Declaration Nos. 465, 466, 468 and 470 were "flat to undulating (0-8% slope)" and actually occupied and cultivated by
34 tillers of sugarcane. 5 In the second Report, the MARO identified as "flat to undulating" approximately 339 hectares under Tax Declaration No. 0234 which
also had several actual occupants and tillers of sugarcane; 6 while in the third Report, the MARO found approximately 75 hectare under Tax Declaration No.
0354 as "flat to undulating" with 33 actual occupants and tillers also of sugarcane. 7
On October 27, 1989, a "Summary Investigation Report" was submitted and signed jointly by the MARO, representatives of the Barangay Agrarian Reform
Committee (BARC) and Land Bank of the Philippines (LBP), and by the Provincial Agrarian Reform Officer (PARO). The Report recommended that 333.0800
hectares of Hacienda Palico be subject to compulsory acquisition at a value of P6,807,622.20. 8 The following day, October 28, 1989, two (2) more Summary
Investigation Reports were submitted by the same officers and representatives. They recommended that 270.0876 hectares and 75.3800 hectares be placed
under compulsory acquisition at a compensation of P8,109,739.00 and P2,188,195.47, respectively. 9
On December 12, 1989, respondent DAR through then Department Secretary Miriam D. Santiago sent a "Notice of Acquisition" to petitioner. The Notice was
addressed as follows:
Roxas y Cia, Limited
Soriano Bldg., Plaza Cervantes
Manila, Metro Manila. 10
Petitioner was informed that 1,023.999 hectares of its land in Hacienda Palico were subject to immediate acquisition and distribution by the government under
the CARL; that based on the DAR's valuation criteria, the government was offering compensation of P3.4 million for 333.0800 hectares; that whether this offer
was to be accepted or rejected, petitioner was to inform the Bureau of Land Acquisition and Distribution (BLAD) of the DAR; that in case of petitioner's rejection
or failure to reply within thirty days, respondent DAR shall conduct summary administrative proceedings with notice to petitioner to determine just compensation
for the land; that if petitioner accepts respondent DAR's offer, or upon deposit of the compensation with an accessible bank if it rejects the same, the DAR shall
take immediate possession of the land. 11
Almost two years later, on September 26, 1991, the DAR Regional Director sent to the LBP Land Valuation Manager three (3) separate Memoranda entitled
"Request to Open Trust Account." Each Memoranda requested that a trust account representing the valuation of three portions of Hacienda Palico be opened in
favor of the petitioner in view of the latter's rejection of its offered value. 12
Meanwhile in a letter dated May 4, 1993, petitioner applied with the DAR for conversion of Haciendas Palico and Banilad from agricultural to non-agricultural
lands under the provisions of the CARL. 13 On July 14, 1993, petitioner sent a letter to the DAR Regional Director reiterating its request for conversion of the two
haciendas. 14
Despite petitioner's application for conversion, respondent DAR proceeded with the acquisition of the two Haciendas. The LBP trust accounts as compensation
for Hacienda Palico were replaced by respondent DAR with cash and LBP bonds. 15 On October 22, 1993, from the mother title of TCT No. 985 of the Hacienda,
respondent DAR registered Certificate of Land Ownership Award (CLOA) No. 6654. On October 30, 1993, CLOA's were distributed to farmer beneficiaries. 16
Hacienda Banilad
On August 23, 1989, respondent DAR, through respondent MARO of Nasugbu, Batangas, sent a notice to petitioner addressed as follows:
Mr. Jaime Pimentel
Hacienda Administrator
Hacienda Banilad
Nasugbu, Batangas 17
The MARO informed Pimentel that Hacienda Banilad was subject to compulsory acquisition under the CARL; that should petitioner wish to avail of
the other schemes such as Voluntary Offer to Sell or Voluntary Land Transfer, respondent DAR was willing to provide assistance thereto. 18
On September 18, 1989, the MARO sent an "Invitation to Parties" again to Pimentel inviting the latter to attend a conference on September 21, 1989 at the
MARO Office in Nasugbu to discuss the results of the MARO's investigation over Hacienda Banilad. 19
On September 21, 1989, the same day the conference was held, the MARO submitted two (2) Reports. In his first Report, he found that approximately 709
hectares of land under Tax Declaration Nos. 0237 and 0236 were "flat to undulating (0-8% slope)." On this area were discovered 162 actual occupants and tillers
of sugarcane. 20 In the second Report, it was found that approximately 235 hectares under Tax Declaration No. 0390 were "flat to undulating," on which were 92
actual occupants and tillers of sugarcane. 21
The results of these Reports were discussed at the conference. Present in the conference were representatives of the prospective farmer beneficiaries, the
BARC, the LBP, and Jaime Pimentel on behalf of the landowner. 22 After the meeting, on the same day, September 21, 1989, a Summary Investigation Report
was submitted jointly by the MARO, representatives of the BARC, LBP, and the PARO. They recommended that after ocular inspection of the property, 234.6498
hectares under Tax Declaration No. 0390 be subject to compulsory acquisition and distribution by CLOA. 23 The following day, September 22, 1989, a second
Summary Investigation was submitted by the same officers. They recommended that 737.2590 hectares under Tax Declaration Nos. 0236 and 0237 be likewise
placed under compulsory acquisition for distribution. 24
On December 12, 1989, respondent DAR, through the Department Secretary, sent to petitioner two (2) separate "Notices of Acquisition" over Hacienda Banilad.
These Notices were sent on the same day as the Notice of Acquisition over Hacienda Palico. Unlike the Notice over Hacienda Palico, however, the Notices over
Hacienda Banilad were addressed to:
Roxas y Cia. Limited
7th Floor, Cacho-Gonzales Bldg. 101 Aguirre St., Leg.
Makati, Metro Manila. 25
Respondent DAR offered petitioner compensation of P15,108,995.52 for 729.4190 hectares and P4,428,496.00 for 234.6498 hectares. 26
On September 26, 1991, the DAR Regional Director sent to the LBP Land Valuation Manager a "Request to Open Trust Account" in petitioner's name as
compensation for 234.6493 hectares of Hacienda Banilad. 27 A second "Request to Open Trust Account" was sent on November 18, 1991 over 723.4130
hectares of said Hacienda. 28
On December 18, 1991, the LBP certified that the amounts of P4,428,496.40 and P21,234,468.78 in cash and LBP bonds had been earmarked as compensation
for petitioner's land in Hacienda Banilad. 29
On May 4, 1993, petitioner applied for conversion of both Haciendas Palico and Banilad.
Hacienda Caylaway
Hacienda Caylaway was voluntarily offered for sale to the government on May 6, 1988 before the effectivity of the CARL. The Hacienda has a total area of
867.4571 hectares and is covered by four (4) titles — TCT Nos. T-44662, T-44663, T-44664 and T-44665. On January 12, 1989, respondent DAR, through the
Regional Director for Region IV, sent to petitioner two (2) separate Resolutions accepting petitioner's voluntary offer to sell Hacienda Caylaway, particularly TCT
Nos. T-44664 and T-44663. 30 The Resolutions were addressed to:
Roxas & Company, Inc.
7th Flr. Cacho-Gonzales Bldg.
Aguirre, Legaspi Village
Makati, M. M 31
On September 4, 1990, the DAR Regional Director issued two separate Memoranda to the LBP Regional Manager requesting for the valuation of the land under
TCT Nos. T-44664 and T-44663. 32 On the same day, respondent DAR, through the Regional Director, sent to petitioner a "Notice of Acquisition" over 241.6777
hectares under TCT No. T-44664 and 533.8180 hectares under TCT No. T-44663. 33 Like the Resolutions of Acceptance, the Notice of Acquisition was
addressed to petitioner at its office in Makati, Metro Manila.
Nevertheless, on August 6, 1992, petitioner, through its President, Eduardo J. Roxas, sent a letter to the Secretary of respondent DAR withdrawing its VOS of
Hacienda Caylaway. The Sangguniang Bayan of Nasugbu, Batangas allegedly authorized the reclassification of Hacienda Caylaway from agricultural to non-
agricultural. As a result, petitioner informed respondent DAR that it was applying for conversion of Hacienda Caylaway from agricultural to other
uses. 34
In a letter dated September 28, 1992, respondent DAR Secretary informed petitioner that a reclassification of the land would not exempt it from agrarian reform.
Respondent Secretary also denied petitioner's withdrawal of the VOS on the ground that withdrawal could only be based on specific grounds such as
unsuitability of the soil for agriculture, or if the slope of the land is over 18 degrees and that the land is undeveloped. 35
Despite the denial of the VOS withdrawal of Hacienda Caylaway, on May 11, 1993, petitioner filed its application for conversion of both Haciendas Palico and
Banilad. 36 On July 14, 1993, petitioner, through its President, Eduardo Roxas, reiterated its request to withdraw the VOS over Hacienda Caylaway in light of the
following:
1) Certification issued by Conrado I. Gonzales, Officer-in-Charge, Department of Agriculture, Region 4, 4th Floor, ATI (BA) Bldg., Diliman,
Quezon City dated March 1, 1993 stating that the lands subject of referenced titles "are not feasible and economically sound for further
agricultural development.
2) Resolution No. 19 of the Sangguniang Bayan of Nasugbu, Batangas approving the Zoning Ordinance reclassifying areas covered by
the referenced titles to non-agricultural which was enacted after extensive consultation with government agencies, including [the
Department of Agrarian Reform], and the requisite public hearings.
3) Resolution No. 106 of the Sangguniang Panlalawigan of Batangas dated March 8, 1993 approving the Zoning Ordinance enacted by
the Municipality of Nasugbu.
4) Letter dated December 15, 1992 issued by Reynaldo U. Garcia of the Municipal Planning & Development, Coordinator and Deputized
Zoning Administrator addressed to Mrs. Alicia P. Logarta advising that the Municipality of Nasugbu, Batangas has no objection to the
conversion of the lands subject of referenced titles to non-agricultural. 37
On August 24, 1993 petitioner instituted Case No. N-0017-96-46 (BA) with respondent DAR Adjudication Board (DARAB) praying for the cancellation of the
CLOA's issued by respondent DAR in the name of several persons. Petitioner alleged that the Municipality of Nasugbu, where the haciendas are located, had
been declared a tourist zone, that the land is not suitable for agricultural production, and that the Sangguniang Bayan of Nasugbu had reclassified the land to
non-agricultural.
In a Resolution dated October 14, 1993, respondent DARAB held that the case involved the prejudicial question of whether the property was subject to agrarian
reform, hence, this question should be submitted to the Office of the Secretary of Agrarian Reform for determination. 38
On October 29, 1993, petitioner filed with the Court of Appeals CA-G.R. SP No. 32484. It questioned the expropriation of its properties under the CARL and the
denial of due process in the acquisition of its landholdings.
Meanwhile, the petition for conversion of the three haciendas was denied by the MARO on November 8, 1993.
Petitioner's petition was dismissed by the Court of Appeals on April 28, 1994. 39 Petitioner moved for reconsideration but the motion was denied on January 17,
1997 by respondent court. 40
Hence, this recourse. Petitioner assigns the following errors:
A. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONER'S CAUSE OF ACTION IS PREMATURE
FOR FAILURE TO EXHAUST ADMINISTRATIVE REMEDIES IN VIEW OF THE PATENT ILLEGALITY OF THE RESPONDENTS' ACTS,
THE IRREPARABLE DAMAGE CAUSED BY SAID ILLEGAL ACTS, AND THE ABSENCE OF A PLAIN, SPEEDY AND ADEQUATE
REMEDY IN THE ORDINARY COURSE OF LAW — ALL OF WHICH ARE EXCEPTIONS TO THE SAID DOCTRINE.
B. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN HOLDING THAT PETITIONER'S LANDHOLDINGS ARE SUBJECT TO
COVERAGE UNDER THE COMPREHENSIVE AGRARIAN REFORM LAW, IN VIEW OF THE UNDISPUTED FACT THAT PETITIONER'S
LANDHOLDINGS HAVE BEEN CONVERTED TO NON-AGRICULTURAL USES BY PRESIDENTIAL PROCLAMATION NO. 1520 WHICH
DECLARED THE MUNICIPALITY NASUGBU, BATANGAS AS A TOURIST ZONE, AND THE ZONING ORDINANCE OF THE
MUNICIPALITY OF NASUGBU RE-CLASSIFYING CERTAIN PORTIONS OF PETITIONER'S LANDHOLDINGS AS NON-
AGRICULTURAL, BOTH OF WHICH PLACE SAID LANDHOLDINGS OUTSIDE THE SCOPE OF AGRARIAN REFORM, OR AT THE
VERY LEAST ENTITLE PETITIONER TO APPLY FOR CONVERSION AS CONCEDED BY RESPONDENT DAR.
C. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO DECLARE THE PROCEEDINGS BEFORE
RESPONDENT DAR VOID FOR FAILURE TO OBSERVE DUE PROCESS, CONSIDERING THAT RESPONDENTS BLATANTLY
DISREGARDED THE PROCEDURE FOR THE ACQUISITION OF PRIVATE LANDS UNDER R.A. 6657, MORE PARTICULARLY, IN
FAILING TO GIVE DUE NOTICE TO THE PETITIONER AND TO PROPERLY IDENTIFY THE SPECIFIC AREAS SOUGHT TO BE
ACQUIRED.
D. RESPONDENT COURT OF APPEALS GRAVELY ERRED WHEN IT FAILED TO RECOGNIZE THAT PETITIONER WAS BRAZENLY
AND ILLEGALLY DEPRIVED OF ITS PROPERTY WITHOUT JUST COMPENSATION, CONSIDERING THAT PETITIONER WAS NOT
PAID JUST COMPENSATION BEFORE IT WAS UNCEREMONIOUSLY STRIPPED OF ITS LANDHOLDINGS THROUGH THE
ISSUANCE OF CLOA'S TO ALLEGED FARMER BENEFICIARIES, IN VIOLATION OF R.A. 6657. 41
The assigned errors involve three (3) principal issues: (1) whether this Court can take cognizance of this petition despite petitioner's failure to exhaust
administrative remedies; (2) whether the acquisition proceedings over the three haciendas were valid and in accordance with law; and (3) assuming the
haciendas may be reclassified from agricultural to non-agricultural, whether this court has the power to rule on this issue.
I. Exhaustion of Administrative Remedies.
In its first assigned error, petitioner claims that respondent Court of Appeals gravely erred in finding that petitioner failed to exhaust administrative remedies. As a
general rule, before a party may be allowed to invoke the jurisdiction of the courts of justice, he is expected to have exhausted all means of administrative
redress. This is not absolute, however. There are instances when judicial action may be resorted to immediately. Among these exceptions are: (1) when the
question raised is purely legal; (2) when the administrative body is in estoppel; (3) when the act complained of is patently illegal; (4) when there is urgent need for
judicial intervention; (5) when the respondent acted in disregard of due process; (6) when the respondent is a department secretary whose acts, as an alter ego
of the President, bear the implied or assumed approval of the latter; (7) when irreparable damage will be suffered; (8) when there is no other plain, speedy and
adequate remedy; (9) when strong public interest is involved; (10) when the subject of the controversy is private land; and (11) in quo warranto proceedings. 42
Petitioner rightly sought immediate redress in the courts. There was a violation of its rights and to require it to exhaust administrative remedies before the DAR
itself was not a plain, speedy and adequate remedy.
Respondent DAR issued Certificates of Land Ownership Award (CLOA's) to farmer beneficiaries over portions of petitioner's land without just compensation to
petitioner. A Certificate of Land Ownership Award (CLOA) is evidence of ownership of land by a beneficiary under R.A. 6657, the Comprehensive Agrarian
Reform Law of 1988. 43 Before this may be awarded to a farmer beneficiary, the land must first be acquired by the State from the landowner and ownership
transferred to the former. The transfer of possession and ownership of the land to the government are conditioned upon the receipt by the landowner of the
corresponding payment or deposit by the DAR of the compensation with an accessible bank. Until then, title remains with the landowner. 44 There was no receipt
by petitioner of any compensation for any of the lands acquired by the government.
The kind of compensation to be paid the landowner is also specific. The law provides that the deposit must be made only in "cash" or "LBP bonds." 45
Respondent DAR's opening of trust account deposits in petitioner' s name with the Land Bank of the Philippines does not constitute payment under the law. Trust
account deposits are not cash or LBP bonds. The replacement of the trust account with cash or LBP bonds did not ipso facto cure the lack of compensation; for
essentially, the determination of this compensation was marred by lack of due process. In fact, in the entire acquisition proceedings, respondent DAR
disregarded the basic requirements of administrative due process. Under these circumstances, the issuance of the CLOA's to farmer beneficiaries necessitated
immediate judicial action on the part of the petitioner.
II. The Validity of the Acquisition Proceedings Over the Haciendas.
Petitioner's allegation of lack of due process goes into the validity of the acquisition proceedings themselves. Before we rule on this matter, however, there is
need to lay down the procedure in the acquisition of private lands under the provisions of the law.
A. Modes of Acquisition of Land under R. A. 6657
Republic Act No. 6657, the Comprehensive Agrarian Reform Law of 1988 (CARL), provides for two (2) modes of acquisition of private land: compulsory and
voluntary. The procedure for the compulsory acquisition of private lands is set forth in Section 16 of R.A. 6657, viz:
Sec. 16. Procedure for Acquisition of Private Lands. — For purposes of acquisition of private lands, the following procedures shall be
followed:
a). After having identified the land, the landowners and the beneficiaries, the DAR shall send its notice to acquire
the land to the owners thereof, by personal delivery or registered mail, and post the same in a conspicuous place in
the municipal building and barangay hall of the place where the property is located. Said notice shall contain the
offer of the DAR to pay a corresponding value in accordance with the valuation set forth in Sections 17, 18, and
other pertinent provisions hereof.
b) Within thirty (30) days from the date of receipt of written notice by personal delivery or registered mail, the
landowner, his administrator or representative shall inform the DAR of his acceptance or rejection of the offer.
c) If the landowner accepts the offer of the DAR, the LBP shall pay the landowner the purchase price of the land
within thirty (30) days after he executes and delivers a deed of transfer in favor of the Government and surrenders
the Certificate of Title and other muniments of title.
d) In case of rejection or failure to reply, the DAR shall conduct summary administrative proceedings to determine
the compensation for the land requiring the landowner, the LBP and other interested parties to submit evidence as
to the just compensation for the land, within fifteen (15) days from receipt of the notice. After the expiration of the
above period, the matter is deemed submitted for decision. The DAR shall decide the case within thirty (30) days
after it is submitted for decision.
e) Upon receipt by the landowner of the corresponding payment, or, in case of rejection or no response from the
landowner, upon the deposit with an accessible bank designated by the DAR of the compensation in cash or in LBP
bonds in accordance with this Act, the DAR shall take immediate possession of the land and shall request the
proper Register of Deeds to issue a Transfer Certificate of Title (TCT) in the name of the Republic of the
Philippines. The DAR shall thereafter proceed with the redistribution of the land to the qualified beneficiaries.
f) Any party who disagrees with the decision may bring the matter to the court of proper jurisdiction for final
determination of just compensation.
In the compulsory acquisition of private lands, the landholding, the landowners and the farmer beneficiaries must first be identified. After identification, the DAR
shall send a Notice of Acquisition to the landowner, by personal delivery or registered mail, and post it in a conspicuous place in the municipal building and
barangay hall of the place where the property is located. Within thirty days from receipt of the Notice of Acquisition, the landowner, his administrator or
representative shall inform the DAR of his acceptance or rejection of the offer. If the landowner accepts, he executes and delivers a deed of transfer in favor of
the government and surrenders the certificate of title. Within thirty days from the execution of the deed of transfer, the Land Bank of the Philippines (LBP) pays
the owner the purchase price. If the landowner rejects the DAR's offer or fails to make a reply, the DAR conducts summary administrative proceedings to
determine just compensation for the land. The landowner, the LBP representative and other interested parties may submit evidence on just compensation within
fifteen days from notice. Within thirty days from submission, the DAR shall decide the case and inform the owner of its decision and the amount of just
compensation. Upon receipt by the owner of the corresponding payment, or, in case of rejection or lack of response from the latter, the DAR shall deposit the
compensation in cash or in LBP bonds with an accessible bank. The DAR shall immediately take possession of the land and cause the issuance of a transfer
certificate of title in the name of the Republic of the Philippines. The land shall then be redistributed to the farmer beneficiaries. Any party may question the
decision of the DAR in the regular courts for final determination of just compensation.
The DAR has made compulsory acquisition the priority mode of the land acquisition to hasten the implementation of the Comprehensive Agrarian Reform
Program (CARP). 46 Under Section 16 of the CARL, the first step in compulsory acquisition is the identification of the land, the landowners and the beneficiaries.
However, the law is silent on how the identification process must be made. To fill in this gap, the DAR issued on July 26, 1989 Administrative Order No. 12,
Series or 1989, which set the operating procedure in the identification of such lands. The procedure is as follows:
II. OPERATING PROCEDURE
A. The Municipal Agrarian Reform Officer, with the assistance of the pertinent Barangay Agrarian Reform Committee (BARC), shall:
1. Update the masterlist of all agricultural lands covered under the CARP in his area of responsibility. The masterlist
shall include such information as required under the attached CARP Masterlist Form which shall include the name
of the landowner, landholding area, TCT/OCT number, and tax declaration number.
2. Prepare a Compulsory Acquisition Case Folder (CACF) for each title (OCT/TCT) or landholding covered under
Phase I and II of the CARP except those for which the landowners have already filed applications to avail of other
modes of land acquisition. A case folder shall contain the following duly accomplished forms:
a) CARP CA Form 1 — MARO Investigation Report
b) CARP CA Form 2 — Summary Investigation Report of Findings and Evaluation
c) CARP CA Form 3 — Applicant's Information Sheet
d) CARP CA Form 4 — Beneficiaries Undertaking
e) CARP CA Form 5 — Transmittal Report to the PARO
The MARO/BARC shall certify that all information contained in the above-mentioned forms have been examined
and verified by him and that the same are true and correct.
3. Send a Notice of Coverage and a letter of invitation to a conference/meeting to the landowner covered by the
Compulsory Case Acquisition Folder. Invitations to the said conference/meeting shall also be sent to the
prospective farmer-beneficiaries, the BARC representative(s), the Land Bank of the Philippines (LBP)
representative, and other interested parties to discuss the inputs to the valuation of the property. He shall discuss
the MARO/BARC investigation report and solicit the views, objection, agreements or suggestions of the
participants thereon. The landowner shall also be asked to indicate his retention area . The minutes of the meeting
shall be signed by all participants in the conference and shall form an integral part of the CACF.
4. Submit all completed case folders to the Provincial Agrarian Reform Officer (PARO).
B. The PARO shall:
1. Ensure that the individual case folders are forwarded to him by his MAROs.
2. Immediately upon receipt of a case folder, compute the valuation of the land in accordance with A.O. No. 6,
Series of 1988. 47 The valuation worksheet and the related CACF valuation forms shall be duly certified correct by
the PARO and all the personnel who participated in the accomplishment of these forms.
3. In all cases, the PARO may validate the report of the MARO through ocular inspection and verification of the
property. This ocular inspection and verification shall be mandatory when the computed value exceeds = 500,000
per estate.
4. Upon determination of the valuation, forward the case folder, together with the duly accomplished valuation
forms and his recommendations, to the Central Office. The LBP representative and the MARO concerned shall be
furnished a copy each of his report.
C. DAR Central Office, specifically through the Bureau of Land Acquisition and Distribution (BLAD), shall:
1. Within three days from receipt of the case folder from the PARO, review, evaluate and determine the final land
valuation of the property covered by the case folder. A summary review and evaluation report shall be prepared and
duly certified by the BLAD Director and the personnel directly participating in the review and final valuation.
2. Prepare, for the signature of the Secretary or her duly authorized representative, a Notice of Acquisition (CARP
CA Form 8) for the subject property. Serve the Notice to the landowner personally or through registered mail within
three days from its approval. The Notice shall include, among others, the area subject of compulsory acquisition,
and the amount of just compensation offered by DAR.
3. Should the landowner accept the DAR's offered value, the BLAD shall prepare and submit to the Secretary for
approval the Order of Acquisition. However, in case of rejection or non-reply, the DAR Adjudication Board (DARAB)
shall conduct a summary administrative hearing to determine just compensation, in accordance with the
procedures provided under Administrative Order No. 13, Series of 1989. Immediately upon receipt of the DARAB's
decision on just compensation, the BLAD shall prepare and submit to the Secretary for approval the required Order
of Acquisition.
4. Upon the landowner's receipt of payment, in case of acceptance, or upon deposit of payment in the designated
bank, in case of rejection or non-response, the Secretary shall immediately direct the pertinent Register of Deeds to
issue the corresponding Transfer Certificate of Title (TCT) in the name of the Republic of the Philippines. Once the
property is transferred, the DAR, through the PARO, shall take possession of the land for redistribution to qualified
beneficiaries.
Administrative Order No. 12, Series of 1989 requires that the Municipal Agrarian Reform Officer (MARO) keep an updated master list of all agricultural lands
under the CARP in his area of responsibility containing all the required information. The MARO prepares a Compulsory Acquisition Case Folder (CACF) for each
title covered by CARP. The MARO then sends the landowner a "Notice of Coverage" and a "letter of invitation" to a "conference/meeting" over the land covered
by the CACF. He also sends invitations to the prospective farmer-beneficiaries the representatives of the Barangay Agrarian Reform Committee (BARC), the
Land Bank of the Philippines (LBP) and other interested parties to discuss the inputs to the valuation of the property and solicit views, suggestions, objections or
agreements of the parties. At the meeting, the landowner is asked to indicate his retention area.
The MARO shall make a report of the case to the Provincial Agrarian Reform Officer (PARO) who shall complete the valuation of the land. Ocular inspection and
verification of the property by the PARO shall be mandatory when the computed value of the estate exceeds P500,000.00. Upon determination of the valuation,
the PARO shall forward all papers together with his recommendation to the Central Office of the DAR. The DAR Central Office, specifically, the Bureau of Land
Acquisition and Distribution (BLAD), shall review, evaluate and determine the final land valuation of the property. The BLAD shall prepare, on the signature of the
Secretary or his duly authorized representative, a Notice of Acquisition for the subject property. 48 From this point, the provisions of Section 16 of R.A. 6657 then
apply. 49
For a valid implementation of the CAR program, two notices are required: (1) the Notice of Coverage and letter of invitation to a preliminary conference sent to
the landowner, the representatives of the BARC, LBP, farmer beneficiaries and other interested parties pursuant to DAR A.O. No. 12, Series of 1989; and (2) the
Notice of Acquisition sent to the landowner under Section 16 of the CARL.
The importance of the first notice, i.e., the Notice of Coverage and the letter of invitation to the conference, and its actual conduct cannot be understated. They
are steps designed to comply with the requirements of administrative due process. The implementation of the CARL is an exercise of the State's police power
and the power of eminent domain. To the extent that the CARL prescribes retention limits to the landowners, there is an exercise of police power for the
regulation of private property in accordance with the Constitution. 50 But where, to carry out such regulation, the owners are deprived of lands they own in
excess of the maximum area allowed, there is also a taking under the power of eminent domain. The taking contemplated is not a mere limitation of the use of
the land. What is required is the surrender of the title to and physical possession of the said excess and all beneficial rights accruing to the owner in favor of the
farmer beneficiary. 51 The Bill of Rights provides that "[n]o person shall be deprived of life, liberty or property without due process of law." 52 The CARL was not
intended to take away property without due process of law. 53 The exercise of the power of eminent domain requires that due process be observed in the taking
of private property.
DAR A.O. No. 12, Series of 1989, from whence the Notice of Coverage first sprung, was amended in 1990 by DAR A.O. No. 9, Series of 1990 and in 1993 by
DAR A.O. No. 1, Series of 1993. The Notice of Coverage and letter of invitation to the conference meeting were expanded and amplified in said amendments.
DAR A.O. No. 9, Series of 1990 entitled "Revised Rules Governing the Acquisition of Agricultural Lands Subject of Voluntary Offer to Sell and Compulsory
Acquisition Pursuant to R.A. 6657," requires that:
B. MARO
1. Receives the duly accomplished CARP Form Nos. 1 & 1.1 including supporting
documents.
2. Gathers basic ownership documents listed under 1.a or 1.b above and prepares
corresponding VOCF/CACF by landowner/landholding.
3. Notifies/invites the landowner and representatives of the LBP, DENR, BARC and
prospective beneficiaries of the schedule of ocular inspection of the property at least one
week in advance.
4. MARO/LAND BANK FIELD OFFICE/BARC
a) Identify the land and landowner, and determine the suitability for
agriculture and productivity of the land and jointly prepare Field
Investigation Report (CARP Form No. 2), including the Land Use Map
of the property.
b) Interview applicants and assist them in the preparation of the

Application For Potential CARP Beneficiary (CARP Form No. 3).
c) Screen prospective farmer-beneficiaries and for those found

qualified, cause the signing of the respective Application to Purchase
and Farmer's Undertaking (CARP Form No. 4).
d) Complete the Field Investigation Report based on the result of the

ocular inspection/investigation of the property and documents
submitted. See to it that Field Investigation Report is duly
accomplished and signed by all concerned.
5. MARO
a) Assists the DENR Survey Party in the conduct of a boundary/

subdivision survey delineating areas covered by OLT, retention,
subject of VOS, CA (by phases, if possible), infrastructures, etc.,
whichever is applicable.
b) Sends Notice of Coverage (CARP Form No. 5) to landowner
concerned or his duly authorized representative inviting him for a
conference.
c) Sends Invitation Letter (CARP Form No. 6) for a conference/public

hearing to prospective farmer-beneficiaries, landowner,
representatives of BARC, LBP, DENR, DA, NGO's, farmers'
organizations and other interested parties to discuss the following
matters:
Result of Field Investigation
Inputs to valuation
Issues raised
Comments/recommendations by all parties

concerned.
d) Prepares Summary of Minutes of the conference/public hearing to

be guided by CARP Form No. 7.
e) Forwards the completed VOCF/CACF to the Provincial Agrarian

Reform Office (PARO) using CARP Form No. 8 (Transmittal Memo to
PARO).
xxx xxx xxx
DAR A.O. No. 9, Series of 1990 lays down the rules on both Voluntary Offer to Sell (VOS) and Compulsory Acquisition (CA) transactions involving lands
enumerated under Section 7 of the CARL. 54 In both VOS and CA. transactions, the MARO prepares the Voluntary Offer to Sell Case Folder (VOCF) and the
Compulsory Acquisition Case Folder (CACF), as the case may be, over a particular landholding. The MARO notifies the landowner as well as representatives of
the LBP, BARC and prospective beneficiaries of the date of the ocular inspection of the property at least one week before the scheduled date and invites them to
attend the same. The MARO, LBP or BARC conducts the ocular inspection and investigation by identifying the land and landowner, determining the suitability of
the land for agriculture and productivity, interviewing and screening prospective farmer beneficiaries. Based on its investigation, the MARO, LBP or BARC
prepares the Field Investigation Report which shall be signed by all parties concerned. In addition to the field investigation, a boundary or subdivision survey of
the land may also be conducted by a Survey Party of the Department of Environment and Natural Resources (DENR) to be assisted by the MARO. 55 This
survey shall delineate the areas covered by Operation Land Transfer (OLT), areas retained by the landowner, areas with infrastructure, and the areas subject to
VOS and CA. After the survey and field investigation, the MARO sends a "Notice of Coverage" to the landowner or his duly authorized representative inviting him
to a conference or public hearing with the farmer beneficiaries, representatives of the BARC, LBP, DENR, Department of Agriculture (DA), non-government
organizations, farmer's organizations and other interested parties. At the public hearing, the parties shall discuss the results of the field investigation, issues that
may be raised in relation thereto, inputs to the valuation of the subject landholding, and other comments and recommendations by all parties concerned. The
Minutes of the conference/public hearing shall form part of the VOCF or CACF which files shall be forwarded by the MARO to the PARO. The PARO reviews,
evaluates and validates the Field Investigation Report and other documents in the VOCF/CACF. He then forwards the records to the RARO for another review.
DAR A.O. No. 9, Series of 1990 was amended by DAR A.O. No. 1, Series of 1993. DAR A.O. No. 1, Series of 1993 provided, among others, that:
IV. OPERATING PROCEDURES:
Steps Responsible Activity Forms/
Agency/Unit Document
(requirements)
A. Identification and
Documentation
xxx xxx xxx
5 DARMO Issue Notice of Coverage CARP
to LO by personal delivery Form No. 2
with proof of service, or
registered mail with return
card, informing him that his
property is now under CARP
coverage and for LO to select
his retention area, if he desires
to avail of his right of retention;
and at the same time invites him
to join the field investigation to
be conducted on his property
which should be scheduled at
least two weeks in advance of
said notice.
A copy of said Notice shall CARP

be posted for at least one Form No. 17
week on the bulletin board of
the municipal and barangay
halls where the property is
located. LGU office concerned
notifies DAR about compliance
with posting requirements thru
return indorsement on CARP
Form No. 17.
6 DARMO Send notice to the LBP, CARP
BARC, DENR representatives Form No. 3
and prospective ARBs of the schedule of the field investigation
to be conducted on the subject
property.
7 DARMO With the participation of CARP
BARC the LO, representatives of Form No. 4
LBP the LBP, BARC, DENR Land Use
DENR and prospective ARBs, Map
Local Office conducts the investigation on
subject property to identify
the landholding, determines
its suitability and productivity;
and jointly prepares the Field
Investigation Report (FIR)
and Land Use Map. However,
the field investigation shall
proceed even if the LO, the
representatives of the DENR and
prospective ARBs are not available
provided, they were given due
notice of the time and date of
investigation to be conducted.
Similarly, if the LBP representative
is not available or could not come
on the scheduled date, the field
investigation shall also be conducted,
after which the duly accomplished
Part I of CARP Form No. 4 shall
be forwarded to the LBP
representative for validation. If he agrees
to the ocular inspection report of DAR,
he signs the FIR (Part I) and
accomplishes Part II thereof.
In the event that there is a
difference or variance between
the findings of the DAR and the
LBP as to the propriety of
covering the land under CARP,

whether in whole or in part, on
the issue of suitability to agriculture,
degree of development or slope,
and on issues affecting idle lands,
the conflict shall be resolved by
a composite team of DAR, LBP,
DENR and DA which shall jointly
conduct further investigation
thereon. The team shall submit its
report of findings which shall be
binding to both DAR and LBP,
pursuant to Joint Memorandum
Circular of the DAR, LBP, DENR
and DA dated 27 January 1992.
8 DARMO Screen prospective ARBs
BARC and causes the signing of CARP
the Application of Purchase Form No. 5
and Farmer's Undertaking
(APFU).
9 DARMO Furnishes a copy of the CARP
duly accomplished FIR to Form No. 4
the landowner by personal
delivery with proof of
service or registered mail
will return card and posts
a copy thereof for at least
one week on the bulletin
board of the municipal
and barangay halls where
the property is located.
LGU office concerned CARP
notifies DAR about Form No. 17
compliance with posting
requirement thru return
endorsement on CARP
Form No. 17.
B. Land Survey
10 DARMO Conducts perimeter or Perimeter
And/or segregation survey or
DENR delineating areas covered Segregation
Local Office by OLT, "uncarpable Survey Plan
areas such as 18% slope
and above, unproductive/
unsuitable to agriculture,
retention, infrastructure.
In case of segregation or
subdivision survey, the
plan shall be approved

by DENR-LMS.
C. Review and Completion
of Documents
11. DARMO Forward VOCF/CACF CARP
to DARPO. Form No. 6
xxx xxx xxx.
DAR A.O. No. 1, Series of 1993, modified the identification process and increased the number of government agencies involved in the identification and
delineation of the land subject to acquisition. 56 This time, the Notice of Coverage is sent to the landowner before the conduct of the field investigation and the
sending must comply with specific requirements. Representatives of the DAR Municipal Office (DARMO) must send the Notice of Coverage to the landowner by
"personal delivery with proof of service, or by registered mail with return card," informing him that his property is under CARP coverage and that if he desires to
avail of his right of retention, he may choose which area he shall retain. The Notice of Coverage shall also invite the landowner to attend the field investigation to
be scheduled at least two weeks from notice. The field investigation is for the purpose of identifying the landholding and determining its suitability for agriculture
and its productivity. A copy of the Notice of Coverage shall be posted for at least one week on the bulletin board of the municipal and barangay halls where the
property is located. The date of the field investigation shall also be sent by the DAR Municipal Office to representatives of the LBP, BARC, DENR and
prospective farmer beneficiaries. The field investigation shall be conducted on the date set with the participation of the landowner and the various
representatives. If the landowner and other representatives are absent, the field investigation shall proceed, provided they were duly notified thereof. Should
there be a variance between the findings of the DAR and the LBP as to whether the land be placed under agrarian reform, the land's suitability to agriculture, the
degree or development of the slope, etc., the conflict shall be resolved by a composite team of the DAR, LBP, DENR and DA which shall jointly conduct further
investigation. The team's findings shall be binding on both DAR and LBP. After the field investigation, the DAR Municipal Office shall prepare the Field
Investigation Report and Land Use Map, a copy of which shall be furnished the landowner "by personal delivery with proof of service or registered mail with
return card." Another copy of the Report and Map shall likewise be posted for at least one week in the municipal or barangay halls where the property is located.
Clearly then, the notice requirements under the CARL are not confined to the Notice of Acquisition set forth in Section 16 of the law. They also include the Notice
of Coverage first laid down in DAR A.O. No. 12, Series of 1989 and subsequently amended in DAR A.O. No. 9, Series of 1990 and DAR A.O. No. 1, Series of
1993. This Notice of Coverage does not merely notify the landowner that his property shall be placed under CARP and that he is entitled to exercise his retention
right; it also notifies him, pursuant to DAR A.O. No. 9, Series of 1990, that a public hearing, shall be conducted where he and representatives of the concerned
sectors of society may attend to discuss the results of the field investigation, the land valuation and other pertinent matters. Under DAR A.O. No. 1, Series of
1993, the Notice of Coverage also informs the landowner that a field investigation of his landholding shall be conducted where he and the other representatives
may be present.
B. The Compulsory Acquisition of Haciendas Palico and Banilad
In the case at bar, respondent DAR claims that it, through MARO Leopoldo C. Lejano, sent a letter of invitation entitled "Invitation to Parties" dated September
29, 1989 to petitioner corporation, through Jaime Pimentel, the administrator of Hacienda Palico. 57 The invitation was received on the same day it was sent as
indicated by a signature and the date received at the bottom left corner of said invitation. With regard to Hacienda Banilad, respondent DAR claims that Jaime
Pimentel, administrator also of Hacienda Banilad, was notified and sent an invitation to the conference. Pimentel actually attended the conference on September
21, 1989 and signed the Minutes of the meeting on behalf of petitioner corporation. 58 The Minutes was also signed by the representatives of the BARC, the LBP
and farmer beneficiaries. 59 No letter of invitation was sent or conference meeting held with respect to Hacienda Caylaway because it was subject to a Voluntary
Offer to Sell to respondent DAR. 60
When respondent DAR, through the Municipal Agrarian Reform Officer (MARO), sent to the various parties the Notice of Coverage and invitation to the
conference, DAR A.O. No. 12, Series of 1989 was already in effect more than a month earlier. The Operating Procedure in DAR Administrative Order No. 12
does not specify how notices or letters of invitation shall be sent to the landowner, the representatives of the BARC, the LBP, the farmer beneficiaries and other
interested parties. The procedure in the sending of these notices is important to comply with the requisites of due process especially when the owner , as in this
case, is a juridical entity. Petitioner is a domestic
corporation, 61 and therefore, has a personality separate and distinct from its shareholders, officers and employees.
The Notice of Acquisition in Section 16 of the CARL is required to be sent to the landowner by "personal delivery or registered mail." Whether the landowner be a
natural or juridical person to whose address the Notice may be sent by personal delivery or registered mail , the law does not distinguish. The DAR Administrative
Orders also do not distinguish. In the proceedings before the DAR, the distinction between natural and juridical persons in the sending of notices may be found in
the Revised Rules of Procedure of the DAR Adjudication Board (DARAB). Service of pleadings before the DARAB is governed by Section 6, Rule V of the
DARAB Revised Rules of Procedure. Notices and pleadings are served on private domestic corporations or partnerships in the following manner:
Sec. 6. Service upon Private Domestic Corporation or Partnership. — If the defendant is a corporation organized under the laws of the
Philippines or a partnership duly registered, service may be made on the president, manager, secretary, cashier, agent, or any of its
directors or partners.
Similarly, the Revised Rules of Court of the Philippines, in Section 13, Rule 14 provides:
Sec. 13. Service upon private domestic corporation or partnership. — If the defendant is a corporation organized under the laws of the
Philippines or a partnership duly registered, service may be made on the president, manager, secretary, cashier, agent, or any of its
directors.
Summonses, pleadings and notices in cases against a private domestic corporation before the DARAB and the regular courts are served on the president,
manager, secretary, cashier, agent or any of its directors. These persons are those through whom the private domestic corporation or partnership is capable of
action. 62
Jaime Pimentel is not the president, manager, secretary, cashier or director of petitioner corporation. Is he, as administrator of the two Haciendas, considered an
agent of the corporation?
The purpose of all rules for service of process on a corporation is to make it reasonably certain that the corporation will receive prompt and proper notice in an
action against it. 63 Service must be made on a representative so integrated with the corporation as to make it a priori supposable that he will realize his
responsibilities and know what he should do with any legal papers served on him, 64 and bring home to the corporation notice of the filing of the action. 65
Petitioner's evidence does not show the official duties of Jaime Pimentel as administrator of petitioner's haciendas. The evidence does not indicate whether
Pimentel's duties is so integrated with the corporation that he would immediately realize his responsibilities and know what he should do with any legal papers
served on him. At the time the notices were sent and the preliminary conference conducted, petitioner's principal place of business was listed in respondent
DAR's records as "Soriano Bldg., Plaza Cervantes, Manila," 66 and "7th Flr. Cacho-Gonzales Bldg., 101 Aguirre St., Makati, Metro Manila." 67 Pimentel did not
hold office at the principal place of business of petitioner. Neither did he exercise his functions in Plaza Cervantes, Manila nor in Cacho-Gonzales Bldg., Makati,
Metro Manila. He performed his official functions and actually resided in the haciendas in Nasugbu, Batangas, a place over two hundred kilometers away from
Metro Manila.
Curiously, respondent DAR had information of the address of petitioner's principal place of business. The Notices of Acquisition over Haciendas Palico and
Banilad were addressed to petitioner at its offices in Manila and Makati. These Notices were sent barely three to four months after Pimentel was notified of the
preliminary conference. 68 Why respondent DAR chose to notify Pimentel instead of the officers of the corporation was not explained by the said respondent.
Nevertheless, assuming that Pimentel was an agent of petitioner corporation, and the notices and letters of invitation were validly served on petitioner through
him, there is no showing that Pimentel himself was duly authorized to attend the conference meeting with the MARO, BARC and LBP representatives and farmer
beneficiaries for purposes of compulsory acquisition of petitioner's landholdings. Even respondent DAR's evidence does not indicate this authority. On the
contrary, petitioner claims that it had no knowledge of the letter-invitation, hence, could not have given Pimentel the authority to bind it to whatever matters were
discussed or agreed upon by the parties at the preliminary conference or public hearing. Notably, one year after Pimentel was informed of the preliminary
conference, DAR A.O. No. 9, Series of 1990 was issued and this required that the Notice of Coverage must be sent "to the landowner concerned or his duly
authorized representative." 69
Assuming further that petitioner was duly notified of the CARP coverage of its haciendas, the areas found actually subject to CARP were not properly identified
before they were taken over by respondent DAR. Respondents insist that the lands were identified because they are all registered property and the technical
description in their respective titles specifies their metes and bounds. Respondents admit at the same time, however, that not all areas in the haciendas were
placed under the comprehensive agrarian reform program invariably by reason of elevation or character or use of the land. 70
The acquisition of the landholdings did not cover the entire expanse of the two haciendas, but only portions thereof. Hacienda Palico has an area of 1,024
hectares and only 688.7576 hectares were targetted for acquisition. Hacienda Banilad has an area of 1,050 hectares but only 964.0688 hectares were subject to
CARP. The haciendas are not entirely agricultural lands. In fact, the various tax declarations over the haciendas describe the landholdings as "sugarland," and
"forest, sugarland, pasture land, horticulture and woodland." 71
Under Section 16 of the CARL, the sending of the Notice of Acquisition specifically requires that the land subject to land reform be first identified. The two
haciendas in the instant case cover vast tracts of land. Before Notices of Acquisition were sent to petitioner, however, the exact areas of the landholdings were
not properly segregated and delineated. Upon receipt of this notice, therefore, petitioner corporation had no idea which portions of its estate were subject to
compulsory acquisition, which portions it could rightfully retain, whether these retained portions were compact or contiguous, and which portions were excluded
from CARP coverage. Even respondent DAR's evidence does not show that petitioner, through its duly authorized representative, was notified of any ocular
inspection and investigation that was to be conducted by respondent DAR. Neither is there proof that petitioner was given the opportunity to at least choose and
identify its retention area in those portions to be acquired compulsorily. The right of retention and how this right is exercised, is guaranteed in Section 6 of the
CARL, viz:
Sec. 6. Retention Limits. — . . . .
The right to choose the area to be retained, which shall be compact or contiguous, shall pertain to the landowner; Provided, however, That
in case the area selected for retention by the landowner is tenanted, the tenant shall have the option to choose whether to remain therein
or be a beneficiary in the same or another agricultural land with similar or comparable features. In case the tenant chooses to remain in
the retained area, he shall be considered a leaseholder and shall lose his right to be a beneficiary under this Act. In case the tenant
chooses to be a beneficiary in another agricultural land, he loses his right as a leaseholder to the land retained by the landowner. The
tenant must exercise this option within a period of one (1) year from the time the landowner manifests his choice of the area for retention.
Under the law, a landowner may retain not more than five hectares out of the total area of his agricultural land subject to CARP. The right to choose the area to
be retained, which shall be compact or contiguous, pertains to the landowner. If the area chosen for retention is tenanted, the tenant shall have the option to
choose whether to remain on the portion or be a beneficiary in the same or another agricultural land with similar or comparable features.
C. The Voluntary Acquisition of Hacienda Caylaway
Petitioner was also left in the dark with respect to Hacienda Caylaway, which was the subject of a Voluntary Offer to Sell (VOS). The VOS in the instant case was
made on May 6, 1988, 72 before the effectivity of R.A. 6657 on June 15, 1988. VOS transactions were first governed by DAR Administrative Order No. 19, series
of 1989, 73 and under this order, all VOS filed before June 15, 1988 shall be heard and processed in accordance with the procedure provided for in Executive
Order No. 229, thus:
III. All VOS transactions which are now pending before the DAR and for which no payment has been made shall be subject to the notice
and hearing requirements provided in Administrative Order No. 12, Series of 1989, dated 26 July 1989, Section II, Subsection A,
paragraph 3.
All VOS filed before 15 June 1988, the date of effectivity of the CARL, shall be heard and processed in accordance with the procedure
provided for in Executive Order No. 229.
xxx xxx xxx.
Sec. 9 of E.O. 229 provides:
Sec. 9. Voluntary Offer to Sell. — The government shall purchase all agricultural lands it deems productive and suitable to farmer
cultivation voluntarily offered for sale to it at a valuation determined in accordance with Section 6. Such transaction shall be exempt from
the payment of capital gains tax and other taxes and fees.
Executive Order 229 does not contain the procedure for the identification of private land as set forth in DAR A.O. No. 12, Series of 1989. Section 5 of E.O. 229
merely reiterates the procedure of acquisition in Section 16, R.A. 6657. In other words, the E.O. is silent as to the procedure for the identification of the land, the
notice of coverage and the preliminary conference with the landowner, representatives of the BARC, the LBP and farmer beneficiaries. Does this mean that these
requirements may be dispensed with regard to VOS filed before June 15, 1988? The answer is no.
First of all, the same E.O. 229, like Section 16 of the CARL, requires that the land, landowner and beneficiaries of the land subject to agrarian reform be
identified before the notice of acquisition should be issued. 74 Hacienda Caylaway was voluntarily offered for sale in 1989. The Hacienda has a total area of
867.4571 hectares and is covered by four (4) titles. In two separate Resolutions both dated January 12, 1989, respondent DAR, through the Regional Director,
formally accepted the VOS over the two of these four
titles. 75 The land covered by two titles has an area of 855.5257 hectares, but only 648.8544 hectares thereof fell within the coverage of R.A. 6657. 76 Petitioner
claims it does not know where these portions are located.
Respondent DAR, on the other hand, avers that surveys on the land covered by the four titles were conducted in 1989, and that petitioner, as landowner, was not
denied participation therein, The results of the survey and the land valuation summary report, however, do not indicate whether notices to attend the same were
actually sent to and received by petitioner or its duly authorized representative. 77 To reiterate, Executive Order No. 229 does not lay down the operating
procedure, much less the notice requirements, before the VOS is accepted by respondent DAR. Notice to the landowner, however, cannot be dispensed with. It
is part of administrative due process and is an essential requisite to enable the landowner himself to exercise, at the very least, his right of retention guaranteed
under the CARL.
III. The Conversion of the three Haciendas.
It is petitioner's claim that the three haciendas are not subject to agrarian reform because they have been declared for tourism, not agricultural
purposes. 78 In 1975, then President Marcos issued Proclamation No. 1520 declaring the municipality of Nasugbu, Batangas a tourist zone. Lands in Nasugbu,
including the subject haciendas, were allegedly reclassified as non-agricultural 13 years before the effectivity of R. A. No. 6657. 79 In 1993, the Regional Director
for Region IV of the Department of Agriculture certified that the haciendas are not feasible and sound for agricultural development. 80 On March 20, 1992,
pursuant to Proclamation No. 1520, the Sangguniang Bayan of Nasugbu, Batangas adopted Resolution No. 19 reclassifying certain areas of Nasugbu as non-
agricultural. 81 This Resolution approved Municipal Ordinance No. 19, Series of 1992, the Revised Zoning Ordinance of Nasugbu 82 which zoning ordinance
was based on a Land Use Plan for Planning Areas for New Development allegedly prepared by the University of the Philippines. 83 Resolution No. 19 of the
Sangguniang Bayan was approved by the Sangguniang Panlalawigan of Batangas on March 8, 1993. 84
Petitioner claims that proclamation No. 1520 was also upheld by respondent DAR in 1991 when it approved conversion of 1,827 hectares in Nasugbu into a
tourist area known as the Batulao Resort Complex, and 13.52 hectares in Barangay Caylaway as within the potential tourist belt. 85 Petitioner present evidence
before us that these areas are adjacent to the haciendas subject of this petition, hence, the haciendas should likewise be converted. Petitioner urges this Court
to take cognizance of the conversion proceedings and rule accordingly. 6
We do not agree. Respondent DAR's failure to observe due process in the acquisition of petitioner's landholdings does not ipso facto give this Court the power to
adjudicate over petitioner's application for conversion of its haciendas from agricultural to non-agricultural . The agency charged with the mandate of approving or
disapproving applications for conversion is the DAR.
At the time petitioner filed its application for conversion, the Rules of Procedure governing the processing and approval of applications for land use conversion
was the DAR A.O. No. 2, Series of 1990. Under this A.O., the application for conversion is filed with the MARO where the property is located. The MARO reviews
the application and its supporting documents and conducts field investigation and ocular inspection of the property. The findings of the MARO are subject to
review and evaluation by the Provincial Agrarian Reform Officer (PARO). The PARO may conduct further field investigation and submit a supplemental report
together with his recommendation to the Regional Agrarian Reform Officer (RARO) who shall review the same. For lands less than five hectares, the RARO shall
approve or disapprove applications for conversion. For lands exceeding five hectares, the RARO shall evaluate the PARO Report and forward the records and
his report to the Undersecretary for Legal Affairs. Applications over areas exceeding fifty hectares are approved or disapproved by the Secretary of Agrarian
Reform.
The DAR's mandate over applications for conversion was first laid down in Section 4 (j) and Section 5 (l) of Executive Order No. 129-A, Series of 1987 and
reiterated in the CARL and Memorandum Circular No. 54, Series of 1993 of the Office of the President. The DAR's jurisdiction over applications for conversion is
provided as follows:
A. The Department of Agrarian Reform (DAR) is mandated to "approve or disapprove applications for conversion,
restructuring or readjustment of agricultural lands into non-agricultural uses," pursuant to Section 4 (j) of Executive
Order No. 129-A, Series of 1987.
B. Sec. 5 (l) of E.O. 129-A, Series of 1987, vests in the DAR, exclusive authority to approve or disapprove
applications for conversion of agricultural lands for residential, commercial, industrial and other land uses.
C. Sec. 65 of R.A. No. 6657, otherwise known as the Comprehensive Agrarian Reform Law of 1988, likewise
empowers the DAR to authorize under certain conditions, the conversion of agricultural lands.
D. Sec. 4 of Memorandum Circular No. 54, Series of 1993 of the Office of the President, provides that "action on
applications for land use conversion on individual landholdings shall remain as the responsibility of the DAR, which
shall utilize as its primary reference, documents on the comprehensive land use plans and accompanying
ordinances passed upon and approved by the local government units concerned, together with the National Land
Use Policy, pursuant to R.A. No. 6657 and E.O. No. 129-A. 87
Applications for conversion were initially governed by DAR A.O. No. 1, Series of 1990 entitled "Revised Rules and Regulations Governing Conversion of Private
Agricultural Lands and Non-Agricultural Uses," and DAR A.O. No. 2, Series of 1990 entitled "Rules of Procedure Governing the Processing and Approval of
Applications for Land Use Conversion." These A.O.'s and other implementing guidelines, including Presidential issuances and national policies related to land
use conversion have been consolidated in DAR A.O. No. 07, Series of 1997. Under this recent issuance, the guiding principle in land use conversion is:
to preserve prime agricultural lands for food production while, at the same time, recognizing the need of the other sectors of society
(housing, industry and commerce) for land, when coinciding with the objectives of the Comprehensive Agrarian Reform Law to promote
social justice, industrialization and the optimum use of land as a national resource for public welfare. 88
"Land Use" refers to the manner of utilization of land, including its allocation, development and management. "Land Use Conversion" refers to the act or process
of changing the current use of a piece of agricultural land into some other use as approved by the DAR. 89 The conversion of agricultural land to uses other than
agricultural requires field investigation and conferences with the occupants of the land. They involve factual findings and highly technical matters within the
special training and expertise of the DAR. DAR A.O. No. 7, Series of 1997 lays down with specificity how the DAR must go about its task. This time, the field
investigation is not conducted by the MARO but by a special task force, known as the Center for Land Use Policy Planning and Implementation (CLUPPI-DAR
Central Office). The procedure is that once an application for conversion is filed, the CLUPPI prepares the Notice of Posting. The MARO only posts the notice
and thereafter issues a certificate to the fact of posting. The CLUPPI conducts the field investigation and dialogues with the applicants and the farmer
beneficiaries to ascertain the information necessary for the processing of the application. The Chairman of the CLUPPI deliberates on the merits of the
investigation report and recommends the appropriate action. This recommendation is transmitted to the Regional Director, thru the Undersecretary, or Secretary
of Agrarian Reform. Applications involving more than fifty hectares are approved or disapproved by the Secretary. The procedure does not end with the
Secretary, however. The Order provides that the decision of the Secretary may be appealed to the Office of the President or the Court of Appeals, as the case
may be, viz:
Appeal from the decision of the Undersecretary shall be made to the Secretary, and from the Secretary to the Office of the President or
the Court of Appeals as the case may be. The mode of appeal/motion for reconsideration, and the appeal fee, from Undersecretary to the
Office of the Secretary shall be the same as that of the Regional Director to the Office of the Secretary. 90
Indeed, the doctrine of primary jurisdiction does not warrant a court to arrogate unto itself authority to resolve a controversy the jurisdiction over which is initially
lodged with an administrative body of special competence. 91 Respondent DAR is in a better position to resolve petitioner's application for conversion, being
primarily the agency possessing the necessary expertise on the matter. The power to determine whether Haciendas Palico, Banilad and Caylaway are non-
agricultural, hence, exempt from the coverage of the CARL lies with the DAR, not with this Court.
Finally, we stress that the failure of respondent DAR to comply with the requisites of due process in the acquisition proceedings does not give this Court the
power to nullify the CLOA's already issued to the farmer beneficiaries. To assume the power is to short-circuit the administrative process, which has yet to run its
regular course. Respondent DAR must be given the chance to correct its procedural lapses in the acquisition proceedings. In Hacienda Palico alone, CLOA's
were issued to 177 farmer beneficiaries in 1993. 92 Since then until the present, these farmers have been cultivating their lands. 93 It goes against the basic
precepts of justice, fairness and equity to deprive these people, through no fault of their own, of the land they till. Anyhow, the farmer beneficiaries hold the
property in trust for the rightful owner of the land.
IN VIEW WHEREOF, the petition is granted in part and the acquisition proceedings over the three haciendas are nullified for respondent DAR's failure to observe
due process therein. In accordance with the guidelines set forth in this decision and the applicable administrative procedure, the case is hereby remanded to
respondent DAR for proper acquisition proceedings and determination of petitioner's application for conversion.
SO ORDERED.
Davide, Jr., C.J., Bellosillo, Vitug, Mendoza, Panganiban, Purisima, Buena, Gonzaga-Reyes and De Leon, Jr., JJ., concur.
Melo, J., please see concurring and dissenting opinion.
Ynares-Santiago, J., concurring and dissenting opinion.
Kapunan, J., I join in the concurring and dissenting opinion of Justice C. Y. Santiago.
Quisumbing, J., I join the in the concurring and dissenting opinion of J. Santiago.
Pardo, J., I join the concurring and dissenting opinion of J. Santiago.
Separate Opinions
MELO, J., concurring and dissenting opinion;
I concur in the ponencia of Justice Ynares-Santiago, broad and exhaustive as it is in its treatment of the issues. However, I would like to call attention to two or
three points which I believe are deserving of special emphasis.
The apparent incongruity or shortcoming in the petition is DAR's disregard of a law which settled the non-agricultural nature of the property as early as 1975.
Related to this are the inexplicable contradictions between DAR's own official issuances and its challenged actuations in this particular case.
Presidential Proclamation No. 1520 has the force and effect of law unless repealed. This law declared Nasugbu, Batangas as a tourist zone.
Considering the new and pioneering stage of the tourist industry in 1975, it can safely be assumed that Proclamation 1520 was the result of empirical study and
careful determination, not political or extraneous pressures. It cannot be disregarded by DAR or any other department of Government.
In Province of Camarines Sur, et al. vs. Court of Appeals, et al. (222 SCRA 173, 182 [1993]), we ruled that local governments need not obtain the approval of
DAR to reclassify lands from agricultural to non-agricultural use. In the present case, more than the exercise of that power, the local governments were merely
putting into effect a law when they enacted the zoning ordinances in question.
Any doubts as to the factual correctness of the zoning reclassifications are answered by the February 2, 1993 certification of the Department of Agriculture that
the subject landed estates are not feasible and economically viable for agriculture, based on the examination of their slope, terrain, depth, irrigability, fertility,
acidity, and erosion considerations.
I agree with the ponencia's rejection of respondent's argument that agriculture is not incompatible and may be enforced in an area declared by law as a tourist
zone. Agriculture may contribute to the scenic views and variety of countryside profiles but the issue in this case is not the beauty of ricefields, cornfields, or
coconut groves. May land found to be non-agricultural and declared as a tourist zone by law, be withheld from the owner's efforts to develop it as such? There
are also plots of land within Clark Field and other commercial-industrial zones capable of cultivation but this does not subject them to compulsory land reform. It
is the best use of the land for tourist purposes, free trade zones, export processing or the function to which it is dedicated that is the determining factor. Any
cultivation is temporary and voluntary.
The other point I wish to emphasize is DAR's failure to follow its own administrative orders and regulations in this case.
The contradictions between DAR administrative orders and its actions in the present case may be summarized:
1. DAR Administrative Order No. 6, Series of 1994, subscribes to Department of Justice Opinion No. 44, Series of 1990 that lands classified as non-agricultural
prior to June 15, 1988 when the CARP Law was passed are exempt from its coverage. By what right can DAR now ignore its own Guidelines in this case of land
declared as forming a tourism zone since 1975?
2. DAR Order dated January 22, 1991 granted the conversion of the adjacent and contiguous property of Group Developers and Financiers, Inc. (GDFI) into the
Batulao Tourist Resort. Why should DAR have a contradictory stance in the adjoining property of Roxas and Co., Inc. found to be similar in nature and declared
as such?
3. DAR Exemption Order, Case No. H-9999-050-97 dated May 17, 1999 only recently exempted 13.5 hectares of petitioner's property also found in Caylaway
together, and similarly situated, with the bigger parcel (Hacienda Caylaway) subject of this petition from CARL coverage. To that extent, it admits that its earlier
blanket objections are unfounded.
4. DAR Administrative Order No. 3, Series of 1996 identifies the land outside of CARP coverage as:
(a) Land found by DAR as no longer suitable for agriculture and which cannot be given appropriate valuation by the
Land Bank;
(b) Land where DAR has already issued a conversion order;
(c) Land determined as exempt under DOJ Opinions Nos. 44 and 181; or
(d) Land declared for non-agricultural use by Presidential Proclamation.
It is readily apparent that the land in this case falls under all the above categories except the second one. DAR is acting contrary to its own rules and regulations.
I should add that DAR has affirmed in a Rejoinder (August 20, 1999) the issuance and effectivity of the above administrative orders.
DAR Administrative Order No. 3, Series of 1996, Paragraph 2 of Part II, Part III and Part IV outlines the procedure for reconveyance of land where CLOAs have
been improperly issued. The procedure is administrative, detailed, simple, and speedy. Reconveyance is implemented by DAR which treats the procedure as
"enshrined . . . in Section 50 of Republic Act No. 6657" (Respondent's Rejoinder). Administrative Order No. 3, Series of 1996 shows there are no impediments to
administrative or judicial cancellations of CLOA's improperly issued over exempt property. Petitioner further submits, and this respondent does not refute, that 25
CLOAs covering 3,338 hectares of land owned by the Manila Southcoast Development Corporation also found in Nasugbu, Batangas, have been cancelled on
similar grounds as those in the case at bar.
The CLOAs in the instant case were issued over land declared as non-agricultural by a presidential proclamation and confirmed as such by actions of the
Department of Agriculture and the local government units concerned. The CLOAs were issued over adjoining lands similarly situated and of like nature as those
declared by DAR as exempt from CARP coverage. The CLOAs were surprisingly issued over property which were the subject of pending cases still undecided by
DAR. There should be no question over the CLOAs having been improperly issued, for which reason, their cancellation is warranted.
YNARES-SANTIAGO, J., concurring and dissenting opinion;
I concur in the basic premises of the majority opinion. However, I dissent in its final conclusions and the dispositive portion.
With all due respect, the majority opinion centers on procedure but unfortunately ignores the substantive merits which this procedure should unavoidably sustain.
The assailed decision of the Court of Appeals had only one basic reason for its denial of the petition, i.e., the application of the doctrine of non-exhaustion of
administrative remedies. This Court's majority ponencia correctly reverses the Court of Appeals on this issue. The ponencia now states that the issuance of
CLOA's to farmer beneficiaries deprived petitioner Roxas & Co. of its property without just compensation. It rules that the acts of the Department of Agrarian
Reform are patently illegal. It concludes that petitioner's rights were violated, and thus to require it to exhaust administrative remedies before DAR was not a
plain, speedy, and adequate remedy. Correctly, petitioner sought immediate redress from the Court of Appeals to this Court.
However, I respectfully dissent from the judgment which remands the case to the DAR. If the acts of DAR are patently illegal and the rights of Roxas & Co.
violated, the wrong decisions of DAR should be reversed and set aside. It follows that the fruits of the wrongful acts, in this case the illegally issued CLOAs, must
be declared null and void.
Petitioner Roxas & Co. Inc. is the registered owner of three (3) haciendas located in Nasugbu, Batangas, namely: Hacienda Palico comprising of an area of
1,024 hectares more or less, covered by Transfer Certificate of Title No. 985 (Petition, Annex "G"; Rollo, p. 203); Hacienda Banilad comprising an area of 1,050
hectares and covered by TCT No. 924 (Petition, Annex "I"; Rollo, p. 205); and Hacienda Caylaway comprising an area of 867.4571 hectares and covered by TCT
Nos. T-44655 (Petition, Annex "O"; Rollo, p. 216), T-44662 (Petition, Annex "P"; Rollo, p. 217), T-44663 (Petition, Annex "Q"; Rollo, p. 210) and T-44664 (Petition,
Annex "R"; Rollo, p. 221).
Sometime in 1992 and 1993, petitioner filed applications for conversion with DAR. Instead of either denying or approving the applications, DAR ignored and sat
on them for seven (7) years. In the meantime and in acts of deceptive lip-service, DAR excluded some small and scattered lots in Palico and Caylaway from
CARP coverage. The majority of the properties were parceled out to alleged farmer-beneficiaries, one at a time, even as petitioner's applications were pending
and unacted upon.
The majority ponencia cites Section 16 of Republic Act No. 6657 on the procedure for acquisition of private lands.
The ponencia cites the detailed procedures found in DAR Administrative Order No. 12, Series of 1989 for the identification of the land to be acquired. DAR did
not follow its own prescribed procedures. There was no valid issuance of a Notice of Coverage and a Notice of Acquisition.
The procedure on the evaluation and determination of land valuation, the duties of the Municipal Agrarian Reform Officer (MARO), the Barangay Agrarian Reform
Committee (BARC), Provincial Agrarian Reform Officer (PARO) and the Bureau of Land Acquisition and Distribution (BLAD), the documentation and reports on
the step-by-step process, the screening of prospective Agrarian Reform Beneficiaries (ARBs), the land survey and segregation survey plan, and other mandatory
procedures were not followed. The landowner was not properly informed of anything going on.
Equally important, there was no payment of just compensation. I agree with the ponencia that due process was not observed in the taking of petitioner's
properties. Since the DAR did not validly acquire ownership over the lands, there was no acquired property to validly convey to any beneficiary. The CLOAs were
null and void from the start.
Petitioner states that the notices of acquisition were sent by respondents by ordinary mail only, thereby disregarding the procedural requirement that notices be
served personally or by registered mail. This is not disputed by respondents, but they allege that petitioner changed its address without notifying the DAR.
Notably, the procedure prescribed speaks of only two modes of service of notices of acquisition — personal service and service by registered mail. The non-
inclusion of other modes of service can only mean that the legislature intentionally omitted them. In other words, service of a notice of acquisition other than
personally or by registered mail is not valid. Casus omissus pro omisso habendus est. The reason is obvious. Personal service and service by registered mail are
methods that ensure the receipt by the addressee, whereas service by ordinary mail affords no reliable proof of receipt.
Since it governs the extraordinary method of expropriating private property, the CARL should be strictly construed. Consequently, faithful compliance with its
provisions, especially those which relate to the procedure for acquisition of expropriated lands, should be observed. Therefore, the service by respondent DAR of
the notices of acquisition to petitioner by ordinary mail, not being in conformity with the mandate of R.A. 6657, is invalid and ineffective.
With more reason, the compulsory acquisition of portions of Hacienda Palico, for which no notices of acquisition were issued by the DAR, should be declared
invalid.
The entire ponencia, save for the last six (6) pages, deals with the mandatory procedures promulgated by law and DAR and how they have not been complied
with. There can be no debate over the procedures and their violation. However, I respectfully dissent in the conclusions reached in the last six pages. Inspite of
all the violations, the deprivation of petitioner's rights, the non-payment of just compensation, and the consequent nullity of the CLOAs, the Court is remanding
the case to the DAR for it to act on the petitioner's pending applications for conversion which have been unacted upon for seven (7) years.
Petitioner had applications for conversion pending with DAR. Instead of deciding them one way or the other, DAR sat on the applications for seven (7) years. At
that same time it rendered the applications inutile by distributing CLOAs to alleged tenants. This action is even worse than a denial of the applications because
DAR had effectively denied the application against the applicant without rendering a formal decision. This kind of action preempted any other kind of decision
except denial. Formal denial was even unnecessary. In the case of Hacienda Palico, the application was in fact denied on November 8, 1993.
There are indisputable and established factors which call for a more definite and clearer judgment.
The basic issue in this case is whether or not the disputed property is agricultural in nature and covered by CARP. That petitioner's lands are non-agricultural in
character is clearly shown by the evidence presented by petitioner, all of which were not disputed by respondents. The disputed property is definitely not subject
to CARP.
The nature of the land as non-agricultural has been resolved by the agencies with primary jurisdiction and competence to decide the issue, namely — (1) a
Presidential Proclamation in 1975; (2) Certifications from the Department of Agriculture; (3) a Zoning Ordinance of the Municipality of Nasugbu, approved by the
Province of Batangas; and (4) by clear inference and admissions, Administrative Orders and Guidelines promulgated by DAR itself.
The records show that on November 20, 1975 even before the enactment of the CARP law, the Municipality of Nasugbu, Batangas was declared a "tourist zone"
in the exercise of lawmaking power by then President Ferdinand E. Marcos under Proclamation No. 1520 ( Rollo, pp. 122-123). This Presidential Proclamation is
indubitably part of the law of the land.
On 20 March 1992 the Sangguniang Bayan of Nasugbu promulgated its Resolution No. 19, a zonification ordinance ( Rollo, pp. 124-200), pursuant to its powers
under Republic Act No. 7160, i.e., the Local Government Code of 1991. The municipal ordinance was approved by the Sangguniang Panlalawigan of Batangas
(Rollo, p. 201). Under this enactment, portions of the petitioner's properties within the municipality were re-zonified as intended and appropriate for non-
agricultural uses. These two issuances, together with Proclamation 1520, should be sufficient to determine the nature of the land as non-agricultural. But there is
more.
The records also contain a certification dated March 1, 1993 from the Director of Region IV of the Department of Agriculture that the disputed lands are no longer
economically feasible and sound for agricultural purposes (Rollo, p. 213).
DAR itself impliedly accepted and determined that the municipality of Nasugbu is non-agricultural when it affirmed the force and effect of Presidential
Proclamation 1520. In an Order dated January 22, 1991, DAR granted the conversion of the adjoining and contiguous landholdings owned by Group Developer
and Financiers, Inc. in Nasugbu pursuant to the Presidential Proclamation. The property alongside the disputed properties is now known as "Batulao Resort
Complex". As will be shown later, the conversion of various other properties in Nasugbu has been ordered by DAR, including a property disputed in this petition,
Hacienda Caylaway.
Inspite of all the above, the Court of Appeals concluded that the lands comprising petitioner's haciendas are agricultural, citing, among other things, petitioner's
acts of voluntarily offering Hacienda Caylaway for sale and applying for conversion its lands from agricultural to non-agricultural.
Respondents, on the other hand, did not only ignore the administrative and executive decisions. It also contended that the subject land should be deemed
agricultural because it is neither residential, commercial, industrial or timber. The character of a parcel of land, however, is not determined merely by a process of
elimination. The actual use which the land is capable of should be the primordial factor.
RA 6657 explicitly limits its coverage thus:
The Comprehensive Agrarian Reform Law of 1998 shall cover, regardless of tenurial arrangement and commodity produced, all public and
private agricultural lands as provided in Proclamation No. 131 and Executive Order No. 229, including other lands of the public domain
suitable for agriculture.
More specifically, the following lands are covered by the Comprehensive Agrarian Reform Program:
(a) All alienable and disposable lands of the public domain devoted to or suitable for agriculture. No reclassification of forest or mineral
lands to agricultural lands shall be undertaken after the approval of this Act until Congress, taking into account, ecological, developmental
and equity considerations, shall have determined by law, the specific limits of the public domain;
(b) All lands of the public domain in excess of the specific limits as determined by Congress in the preceding paragraph;
(c) All other lands owned by the Government devoted to or suitable for agriculture; and
(d) All private lands devoted to or suitable for a agriculture regardless of the agricultural products raised or that can be raised thereon."
(RA 6657, Sec. 4; emphasis provided)
In Luz Farms v. Secretary of the Department of Agrarian Reform and Natalia Realty, Inc. v. Department of Agrarian Reform, this Court had occasion to rule that
agricultural lands are only those which are arable and suitable.
It is at once noticeable that the common factor that classifies land use as agricultural, whether it be public or private land, is its suitability for agriculture. In this
connection, RA 6657 defines "agriculture" as follows:
Agriculture, Agricultural Enterprises or Agricultural Activity means the cultivation of the soil, planting of crops, growing of fruit trees, raising
of livestock, poultry or fish, including the harvesting of such farm products, and other farm activities, and practices performed by a farmer
in conjunction with such farming operations done by persons whether natural or juridical. (RA 6657, sec. 3[b])
In the case at bar, petitioner has presented certifications issued by the Department of Agriculture to the effect that Haciendas Palico, Banilad and Caylaway are
not feasible and economically viable for agricultural development due to marginal productivity of the soil, based on an examination of their slope, terrain, depth,
irrigability, fertility, acidity, and erosion factors (Petition, Annex "L", Rollo, p. 213; Annex "U", Rollo, p. 228). This finding should be accorded respect considering
that it came from competent authority, said Department being the agency possessed with the necessary expertise to determine suitability of lands to agriculture.
The DAR Order dated January 22, 1991 issued by respondent itself stated that the adjacent land now known as the Batulao Resort Complex is hilly,
mountainous, and with long and narrow ridges and deep gorges. No permanent sites are planted. Cultivation is by kaingin method. This confirms the findings of
the Department of Agriculture.
Parenthetically, the foregoing finding of the Department of Agriculture also explains the validity of the reclassification of petitioner's lands by the Sangguniang
Bayan of Nasugbu, Batangas, pursuant to Section 20 of the Local Government Code of 1991. It shows that the condition imposed by respondent Secretary of
Agrarian Reform on petitioner for withdrawing its voluntary offer to sell Hacienda Caylaway, i.e., that the soil be unsuitable for agriculture, has been adequately
met. In fact, the DAR in its Order in Case No. A-9999-050-97, involving a piece of land also owned by petitioner and likewise located in Caylaway, exempted it
from the coverage of CARL (Order dated May 17, 1999; Annex "D" of Petitioner's Manifestation), on these grounds.
Furthermore, and perhaps more importantly, the subject lands are within an area declared in 1975 by Presidential Proclamation No. 1520 to be part of a tourist
zone. This determination was made when the tourism prospects of the area were still for the future. The studies which led to the land classification were relatively
freer from pressures and, therefore, more objective and open-minded. Respondent, however, contends that agriculture is not incompatible with the lands' being
part of a tourist zone since "agricultural production, by itself, is a natural asset and, if properly set, can command tremendous aesthetic value in the form of
scenic views and variety of countryside profiles." (Comment, Rollo, 579).
The contention is untenable. Tourist attractions are not limited to scenic landscapes and lush greeneries. Verily, tourism is enhanced by structures and facilities
such as hotels, resorts, rest houses, sports clubs and golf courses, all of which bind the land and render it unavailable for cultivation. As aptly described by
petitioner:
The development of resorts, golf courses, and commercial centers is inconsistent with agricultural development. True, there can be limited
agricultural production within the context of tourism development. However, such small scale farming activities will be dictated by, and
subordinate to the needs or tourism development. In fact, agricultural use of land within Nasugbu may cease entirely if deemed necessary
by the Department of Tourism (Reply, Rollo, p. 400).
The lands subject hereof, therefore, are non-agricultural. Hence, the voluntary offer to sell Hacienda Caylaway should not be deemed an admission that the land
is agricultural. Rather, the offer was made by petitioner in good faith, believing at the time that the land could still be developed for agricultural production.
Notably, the offer to sell was made as early as May 6, 1988, before the soil thereon was found by the Department of Agriculture to be unsuitable for agricultural
development (the Certifications were issued on 2 February 1993 and 1 March 1993). Petitioner's withdrawal of its voluntary offer to sell, therefore, was not borne
out of a whimsical or capricious change of heart. Quite simply, the land turned out to be outside of the coverage of the CARL, which by express provision of RA
6657, Section 4, affects only public and private agricultural lands. As earlier stated, only on May 17, 1999, DAR Secretary Horacio Morales, Jr. approved the
application for a lot in Caylaway, also owned by petitioner, and confirmed the seven (7) documentary evidences proving the Caylaway area to be non-agricultural
(DAR Order dated 17 May 1999, in Case No. A-9999-050-97, Annex "D" Manifestation).
The DAR itself has issued administrative circulars governing lands which are outside of CARP and may not be subjected to land reform. Administrative Order No.
3, Series of 1996 declares in its policy statement what landholdings are outside the coverage of CARP. The AO is explicit in providing that such non-covered
properties shall be reconveyed to the original transferors or owners.
These non-covered lands are:
a. Land, or portions thereof, found to be no longer suitable for agriculture and, therefore, could not be given
appropriate valuation by the Land Bank of the Philippines (LBP);
b. Those were a Conversion Order has already been issued by the DAR allowing the use of the landholding other
than for agricultural purposes in accordance with Section 65 of R.A. No. 6657 and Administrative Order No. 12,
Series of 1994;
c. Property determined to be exempted from CARP coverage pursuant to Department of Justice Opinion Nos. 44
and 181; or
d. Where a Presidential Proclamation has been issued declaring the subject property for certain uses other than
agricultural. (Annex "F", Manifestation dated July 23, 1999)
The properties subject of this Petition are covered by the first, third, and fourth categories of the Administrative Order. The DAR has disregarded its own
issuances which implement the law.
To make the picture clearer, I would like to summarize the law, regulations, ordinances, and official acts which show beyond question that the disputed property is
non-agricultural, namely:
(a) The Law. Proclamation 1520 dated November 20, 1975 is part of the law of the land. It declares the area in and around Nasugbu,
Batangas, as a Tourist Zone. It has not been repealed, and has in fact been used by DAR to justify conversion of other contiguous and
nearby properties of other parties.
(b) Ordinances of Local Governments. Zoning ordinance of the Sangguniang Bayan of Nasugbu, affirmed by the Sangguniang
Panlalawigan of Batangas, expressly defines the property as tourist, not agricultural. The power to classify its territory is given by law to
the local governments.
(c) Certification of the Department of Agriculture that the property is not suitable and viable for agriculture. The factual nature of the land,
its marginal productivity and non-economic feasibility for cultivation, are described in detail.
(d) Acts of DAR itself which approved conversion of contiguous or adjacent land into the Batulao Resorts Complex. DAR described at
length the non-agricultural nature of Batulao and of portion of the disputed property, particularly Hacienda Caylaway.
(e) DAR Circulars and Regulations. DAR Administrative Order No. 6, Series of 1994 subscribes to the Department of Justice opinion that
the lands classified as non-agricultural before the CARP Law, June 15, 1988, are exempt from CARP. DAR Order dated January 22, 1991
led to the Batulao Tourist Area. DAR Order in Case No. H-9999-050-97, May 17, 1999, exempted 13.5 hectares of Caylaway, similarly
situated and of the same nature as Batulao, from coverage. DAR Administrative Order No. 3, Series of 1996, if followed, would clearly
exclude subject property from coverage.
As earlier shown, DAR has, in this case, violated its own circulars, rules and regulations.
In addition to the DAR circulars and orders which DAR itself has not observed, the petitioner has submitted a municipal map of Nasugbu, Batangas (Annex "E",
Manifestation dated July 23, 1999). The geographical location of Palico, Banilad, and Caylaway in relation to the GDFI property, now Batulao Tourist Resort,
shows that the properties subject of this case are equally, if not more so, appropriate for conversion as the GDFI resort.
Petitioner's application for the conversion of its lands from agricultural to non-agricultural was meant to stop the DAR from proceeding with the compulsory
acquisition of the lands and to seek a clear and authoritative declaration that said lands are outside of the coverage of the CARL and can not be subjected to
agrarian reform.
Petitioner assails respondent's refusal to convert its lands to non-agricultural use and to recognize Presidential Proclamation No. 1520, stating that respondent
DAR has not been consistent in its treatment of applications of this nature. It points out that in the other case involving adjoining lands in Nasugbu, Batangas,
respondent DAR ordered the conversion of the lands upon application of Group Developers and Financiers, Inc. Respondent DAR, in that case, issued an Order
dated January 22, 1991 denying the motion for reconsideration filed by the farmers thereon and finding that:
In fine, on November 27, 1975, or before the movants filed their instant motion for reconsideration, then President Ferdinand E. Marcos
issued Proclamation No. 1520, declaring the municipalities of Maragondon and Ternate in the province of Cavite and the municipality of
Nasugbu in the province of Batangas as tourist zone. Precisely, the landholdings in question are included in such proclamation. Up to now,
this office is not aware that said issuance has been repealed or amended (Petition, Annex "W"; Rollo, p. 238).
The DAR Orders submitted by petitioner, and admitted by DAR in its Rejoinder (Rejoinder of DAR dated August 20, 1999), show that DAR has been inconsistent
to the extent of being arbitrary.
Apart from the DAR Orders approving the conversion of the adjoining property now called Batulao Resort Complex and the DAR Order declaring parcels of the
Caylaway property as not covered by CARL, a major Administrative Order of DAR may also be mentioned.
The Department of Justice in DOJ Opinion No. 44 dated March 16, 1990 (Annex "A" of Petitioner's Manifestation) stated that DAR was given authority to approve
land conversions only after June 15, 1988 when RA 6657, the CARP Law, became effective. Following the DOJ Opinion, DAR issued its AO No. 06, Series of
1994 providing for the Guidelines on Exemption Orders (Annex "B", Id.). The DAR Guidelines state that lands already classified as non-agricultural before the
enactment of CARL are exempt from its coverage. Significantly, the disputed properties in this case were classified as tourist zone by no less than a Presidential
Proclamation as early as 1975, long before 1988.
The above, petitioner maintains, constitute unequal protection of the laws. Indeed, the Constitution guarantees that "(n)o person shall be deprived of life, liberty
or property without due process of law, nor shall any person be denied the equal protection of the laws" (Constitution, Art. III, Sec. 1). Respondent DAR,
therefore, has no alternative but to abide by the declaration in Presidential Proclamation 1520, just as it did in the case of Group Developers and Financiers, Inc.,
and to treat petitioners' properties in the same way it did the lands of Group Developers, i.e., as part of a tourist zone not suitable for agriculture.
On the issue of non-payment of just compensation which results in a taking of property in violation of the Constitution, petitioner argues that the opening of a trust
account in its favor did not operate as payment of the compensation within the meaning of Section 16 (e) of RA 6657. In Land Bank of the Philippines v. Court of
Appeals (249 SCRA 149, at 157 [1995]), this Court struck down as null and void DAR Administrative Circular No. 9, Series of 1990, which provides for the
opening of trust accounts in lieu of the deposit in cash or in bonds contemplated in Section 16 (e) of RA 6657.
It is very explicit therefrom (Section 16 [e]) that the deposit must be made only in "cash" or in "LBP bonds." Nowhere does it appear nor
can it be inferred that the deposit can be made in any other form. If it were the intention to include a "trust account" among the valid
modes of deposit, that should have been made express, or at least, qualifying words ought to have appeared from which it can be fairly
deduced that a "trust account" is allowed. In sum, there is no ambiguity in Section 16(e) of RA 6657 to warrant an expanded construction
of the term "deposit."
xxx xxx xxx
In the present suit, the DAR clearly overstepped the limits of its powers to enact rules and regulations when it issued Administrative
Circular No. 9. There is no basis in allowing the opening of a trust account in behalf of the landowner as compensation for his property
because, as heretofore discussed, section 16(e) of RA 6657 is very specific that the deposit must be made only in "cash" or in "LBP
bonds." In the same vein, petitioners cannot invoke LRA Circular Nos. 29, 29-A and 54 because these implementing regulations cannot
outweigh the clear provision of the law. Respondent court therefore did not commit any error in striking down Administrative Circular No. 9
for being null and void.
There being no valid payment of just compensation, title to petitioner's landholdings cannot be validly transferred to the Government. A close scrutiny of the
procedure laid down in Section 16 of RA 6657 shows the clear legislative intent that there must first be payment of the fair value of the land subject to agrarian
reform, either directly to the affected landowner or by deposit of cash or LBP bonds in the DAR-designated bank, before the DAR can take possession of the land
and request the register of deeds to issue a transfer certificate of title in the name of the Republic of the Philippines. This is only proper inasmuch as title to
private property can only be acquired by the government after payment of just compensation In Association of Small Landowners in the Philippines v. Secretary
of Agrarian Reform (175 SCRA 343, 391 [1989]), this Court held:
The CARP Law, for its part, conditions the transfer of possession and ownership of the land to the government on receipt of the landowner
of the corresponding payment or the deposit by the DAR of the compensation in cash or LBP bonds with an accessible bank. Until then,
title also remains with the landowner. No outright change of ownership is contemplated either.
Necessarily, the issuance of the CLOAs by respondent DAR on October 30, 1993 and their distribution to farmer-beneficiaries were illegal inasmuch as no valid
payment of compensation for the lands was as yet effected. By law, Certificates of Land Ownership Award are issued only to the beneficiaries after the DAR
takes actual possession of the land (RA 6657, Sec. 24), which in turn should only be after the receipt by the landowner of payment or, in case of rejection or no
response from the landowner, after the deposit of the compensation for the land in cash or in LBP bonds (RA 6657, Sec. 16[e]).
Respondents argue that the Land Bank ruling should not be made to apply to the compulsory acquisition of petitioner's landholdings in 1993, because it occurred
prior to the promulgation of the said decision (October 6, 1995). This is untenable. Laws may be given retroactive effect on constitutional considerations, where
the prospective application would result in a violation of a constitutional right. In the case at bar, the expropriation of petitioner's lands was effected without a valid
payment of just compensation, thus violating the Constitutional mandate that "(p)rivate property shall not be taken for public use without just compensation"
(Constitution, Art. III, Sec. 9). Hence, to deprive petitioner of the benefit of the Land Bank ruling on the mere expedient that it came later than the actual
expropriation would be repugnant to petitioner's fundamental rights.
The controlling last two (2) pages of the ponencia state:
Finally, we stress that the failure of respondent DAR to comply with the requisites of due process in the acquisition proceedings does not
give this Court the power to nullify the CLOA's already issued to the farmer beneficiaries. To assume the power is to short-circuit the
administrative process, which has yet to run its regular course. Respondent DAR must be given the chance to correct its procedural
lapses in the acquisition proceedings. In Hacienda Palico alone, CLOA's were issued to 177 farmer beneficiaries in 1993. Since then until
the present, these farmers have been cultivating their lands. It goes against the basic precepts of justice, fairness and equity to deprive
these people, through no fault of their own, of the land they till. Anyhow, the farmer beneficiaries hold the property in trust for the rightful
owner of the land.
I disagree with the view that this Court cannot nullify illegally issued CLOA's but must ask the DAR to first reverse and correct itself.
Given the established facts, there was no valid transfer of petitioner's title to the Government. This being so, there was also no valid title to transfer to third
persons; no basis for the issuance of CLOAs.
Equally important, CLOAs do not have the nature of Torrens Title. Administrative cancellation of title is sufficient to invalidate them.
The Court of Appeals said so in its Resolution in this case. It stated:
Contrary to the petitioner's argument that issuance of CLOAs to the beneficiaries prior to the deposit of the offered price constitutes
violation of due process, it must be stressed that the mere issuance of the CLOAs does not vest in the farmer/grantee ownership of the
land described therein.
At most the certificate merely evidences the government's recognition of the grantee as the party qualified to avail of the statutory
mechanisms for the acquisition of ownership of the land. Thus failure on the part of the farmer/grantee to comply with his obligations is a
ground for forfeiture of his certificate of transfer. Moreover, where there is a finding that the property is indeed not covered by CARP, then
reversion to the landowner shall consequently be made, despite issuance of CLOAs to the beneficiaries . (Resolution dated January 17,
1997, p. 6)
DAR Administrative Order 03, Series of 1996 (issued on August 8, 1996; Annex "F" of Petitioner's Manifestation) outlines the procedure for the reconveyance to
landowners of properties found to be outside the coverage of CARP. DAR itself acknowledges that they can administratively cancel CLOAs if found to be
erroneous. From the detailed provisions of the Administrative Order, it is apparent that there are no impediments to the administrative cancellation of CLOAs
improperly issued over exempt properties. The procedure is followed all over the country. The DAR Order spells out that CLOAs are not Torrens Titles. More so if
they affect land which is not covered by the law under which they were issued. In its Rejoinder, respondent DAR states:
3.2. And, finally, on the authority of DAR/DARAB to cancel erroneously issued Emancipation Patents (EPs) or Certificate of
Landownership Awards (CLOAs), same is enshrined, it is respectfully submitted, in Section 50 of Republic Act No. 6657.
In its Supplemental Manifestation, petitioner points out, and this has not been disputed by respondents, that DAR has also administratively cancelled twenty five
(25) CLOAs covering Nasugbu properties owned by the Manila Southcoast Development Corporation near subject Roxas landholdings. These lands were found
not suitable for agricultural purposes because of soil and topographical characteristics similar to those of the disputed properties in this case.
The former DAR Secretary, Benjamin T. Leong, issued DAR Order dated January 22, 1991 approving the development of property adjacent and contiguous to
the subject properties of this case into the Batulao Tourist Resort. Petitioner points out that Secretary Leong, in this Order, has decided that the land —
1. Is, as contended by the petitioner GDFI "hilly, mountainous, and characterized by poor soil condition and nomadic method of cultivation,
hence not suitable to agriculture."
2. Has as contiguous properties two haciendas of Roxas y Cia and found by Agrarian Reform Team Leader Benito Viray to be "generally
rolling, hilly and mountainous and strudded (sic) with long and narrow ridges and deep gorges. Ravines are steep grade ending in low dry
creeks."
3. Is found in an. area where "it is quite difficult to provide statistics on rice and corn yields because there are no permanent sites planted.
Cultivation is by Kaingin Method."
4. Is contiguous to Roxas Properties in the same area where "the people entered the property surreptitiously and were difficult to stop
because of the wide area of the two haciendas and that the principal crop of the area is sugar . . .." (emphasis supplied).
I agree with petitioner that under DAR AO No. 03, Series of 1996, and unlike lands covered by Torrens Titles, the properties falling under improperly issued
CLOAs are cancelled by mere administrative procedure which the Supreme Court can declare in cases properly and adversarially submitted for its decision. If
CLOAs can under the DAR's own order be cancelled administratively, with more reason can the courts, especially the Supreme Court, do so when the matter is
clearly in issue.
With due respect, there is no factual basis for the allegation in the motion for intervention that farmers have been cultivating the disputed property.
The property has been officially certified as not fit for agriculture based on slope, terrain, depth, irrigability, fertility, acidity, and erosion. DAR, in its Order dated
January 22, 1991, stated that "it is quite difficult to provide statistics on rice and corn yields (in the adjacent property) because there are no permanent sites
planted. Cultivation is by kaingin method." Any allegations of cultivation, feasible and viable, are therefore falsehoods.
The DAR Order on the adjacent and contiguous GDFI property states that "(T)he people entered the property surreptitiously and were difficult to stop . . .."
The observations of Court of Appeals Justices Verzola and Magtolis in this regard, found in their dissenting opinion (Rollo, p. 116), are relevant:
2.9 The enhanced value of land in Nasugbu, Batangas, has attracted unscrupulous individuals who distort the spirit of the Agrarian Reform
Program in order to turn out quick profits. Petitioner has submitted copies of CLOAs that have been issued to persons other than those
who were identified in the Emancipation Patent Survey Profile as legitimate Agrarian Reform beneficiaries for particular portions of
petitioner's lands. These persons to whom the CLOAs were awarded, according to petitioner, are not and have never been workers in
petitioner's lands. Petitioners say they are not even from Batangas but come all the way from Tarlac. DAR itself is not unaware of the
mischief in the implementation of the CARL in some areas of the country, including Nasugbu. In fact, DAR published a "WARNING TO
THE PUBLIC" which appeared in the Philippine Daily Inquirer of April 15, 1994 regarding this malpractice.
2.10 Agrarian Reform does not mean taking the agricultural property of one and giving it to another and for the latter to unduly benefit
therefrom by subsequently "converting" the same property into non-agricultural purposes.
2.11 The law should not be interpreted to grant power to the State, thru the DAR, to choose who should benefit from multi-million peso
deals involving lands awarded to supposed agrarian reform beneficiaries who then apply for conversion, and thereafter sell the lands as
non-agricultural land.
Respondents, in trying to make light of this problem, merely emphasize that CLOAs are not titles. They state that "rampant selling of rights", should this occur,
could be remedied by the cancellation or recall by DAR.
In the recent case of "Hon. Carlos O. Fortich, et. al. vs. Hon. Renato C. Corona, et. al." (G.R. No. 131457, April 24, 1998), this Court found the CLOAs given to
the respondent farmers to be improperly issued and declared them invalid. Herein petitioner Roxas and Co., Inc. has presented a stronger case than petitioners
in the aforementioned case. The procedural problems especially the need for referral to the Court of Appeals are not present. The instant petition questions the
Court of Appeals decision which acted on the administrative decisions. The disputed properties in the present case have been declared non-agricultural not so
much because of local government action but by Presidential Proclamation. They were found to be non-agricultural by the Department of Agriculture, and through
unmistakable implication, by DAR itself. The zonification by the municipal government, approved by the provincial government, is not the only basis.
On a final note, it may not be amiss to stress that laws which have for their object the preservation and maintenance of social justice are not only meant to favor
the poor and underprivileged. They apply with equal force to those who, notwithstanding their more comfortable position in life, are equally deserving of
protection from the courts. Social justice is not a license to trample on the rights of the rich in the guise of defending the poor, where no act of injustice or abuse
is being committed against them. As we held in Land Bank (supra.):
It has been declared that the duty of the court to protect the weak and the underprivileged should not be carried out to such an extent as
to deny justice to the landowner whenever truth and justice happen to be on his side. As eloquently stated by Justice Isagani Cruz:
. . . social justice — or any justice for that matter — is for the deserving, whether he be a millionaire in his mansion
or a pauper in his hovel. It is true that, in case of reasonable doubt, we are called upon to tilt the balance in favor of
the poor simply because they are poor, to whom the Constitution fittingly extends its sympathy and compassion.
But never is it justified to prefer the poor simply because they are poor, or to eject the rich simply because they are
rich, for justice must always be served, for poor and rich alike, according to the mandate of the law.
IN THE LIGHT OF THE FOREGOING, I vote to grant the petition for certiorari; and to declare Haciendas Palico, Banilad and Caylaway, all situated in Nasugbu,
Batangas, to be non-agricultural and outside the scope of Republic Act No. 6657. I further vote to declare the Certificates of Land Ownership Award issued by
respondent Department of Agrarian Reform null and void and to enjoin respondents from proceeding with the compulsory acquisition of the lands within the
subject properties. I finally vote to DENY the motion for intervention.
Footnotes
EN BANC
[G.R. No. 103882. November 25, 1998]
REPUBLIC OF THE PHILIPPINES, petitioner, vs. THE HONORABLE COURT OF APPEALS AND
REPUBLIC REAL ESTATE CORPORATION, respondents. CULTURAL CENTER OF THE
PHILIPPINES, intervenor.
[G.R. No. 105276. November 25, 1998]
PASAY CITY AND REPUBLIC REAL ESTATE CORPORATION, petitioners, vs. COURT OF
APPEALS and REPUBLIC OF THE PHILIPPINES, respondents.
DECISION
PURISIMA, J.:
At bar are two consolidated petitions for review on certiorari under Rule 45 of the Revised Rules of
Court. Here, the Court is confronted with a case commenced before the then Court of First Instance
(now Regional Trial Court) of Rizal in Pasay City, in 1961, more than 3 decades back, that has spanned
six administrations of the Republic and outlasted the tenure of ten (10) Chief Justices of the Supreme
Court.
In G.R. No. 103882, the Republic of the Philippines, as petitioner, assails the Decision, dated January
29, 1992 and Amended Decision, dated April 28, 1992, of the Court of Appeals[1], which affirmed with
modification the Decision of the former Court of First Instance of Rizal (Branch 7, Pasay City) in Civil
Case No. 2229-P, entitled Republic of the Philippines versus Pasay City and Republic Real Estate
Corporation.
The facts that matter are, as follows:
Republic Act No. 1899 (RA 1899), which was approved on June 22, 1957, authorized the reclamation
of foreshore lands by chartered cities and municipalities. Section I of said law, reads:
SECTION 1. Authority is hereby granted to all municipalities and chartered cities to undertake and
carry out at their own expense the reclamation by dredging, filling, or other means, of any foreshore
lands bordering them, and to establish, provide, construct, maintain and repair proper and adequate
docking and harbor facilities as such municipalities and chartered cities may determine in consultation
with the Secretary of Finance and the Secretary of Public Works and Communications.
On May 6, 1958, invoking the aforecited provision of RA 1899, the Pasay City Council passed
Ordinance No. 121, for the reclamation of Three Hundred (300) hectares of foreshore lands in Pasay
City, empowering the City Mayor to award and enter into reclamation contracts, and prescribing terms
and conditions therefor. The said Ordinance was amended on April 21, 1959 by Ordinance No. 158,
which authorized the Republic Real Estate Corporation (RREC) to reclaim foreshore lands of Pasay
City under certain terms and conditions.
On April 24, 1959, Pasay City and RREC entered into an Agreement[2] for the reclamation of the
foreshore lands in Pasay City.
On December 19, 1961, the Republic of the Philippines (Republic) filed a Complaint[3] for Recovery
of Possession and Damages with Writ of Preliminary Preventive Injunction and Mandatory Injunction,
docketed as Civil Case No. 2229-P before the former Court of First Instance of Rizal, (Branch 7, Pasay
City).
On March 5, 1962, the Republic of the Philippines filed an Amended Complaint[4] questioning subject
Agreement between Pasay City and RREC (Exhibit P) on the grounds that the subject-matter of such
Agreement is outside the commerce of man, that its terms and conditions are violative of RA 1899, and
that the said Agreement was executed without any public bidding.
The Answers[5] of RREC and Pasay City, dated March 10 and March 14, 1962, respectively, averred
that the subject-matter of said Agreement is within the commerce of man, that the phrase foreshore
lands within the contemplation of RA 1899 has a broader meaning than the cited definition of the term
in the Words and Phrases and in the Websters Third New International Dictionary and the plans and
specifications of the reclamation involved were approved by the authorities concerned.
On April 26,1962, Judge Angel H. Mojica, (now deceased) of the former Court of First Instance of
Rizal (Branch 7, Pasay City) issued an Order[6] the dispositive portion of which was to the following
effect:
WHEREFORE, the court hereby orders the defendants, their agents, and all persons claiming under
them, to refrain from further reclaiming or committing acts of dispossession or dispoilation over any
area within the Manila Bay or the Manila Bay Beach Resort, until further orders of the court.
On the following day, the same trial court issued a writ of preliminary injunction[7] which enjoined the
defendants, RREC and Pasay City, their agents, and all persons claiming under them from further
reclaiming or committing acts of dispossession.
Thereafter, a Motion to Intervene[8], dated June 27, 1962, was filed by Jose L. Bautista, Emiliano
Custodio, Renato Custodio, Roger de la Rosa, Belen Gonzales, Norma Martinez, Emilia E. Paez,
Ambrosio R. Parreno, Antolin M. Oreta, Sixto L. Orosa, Pablo S. Sarmiento, Jesus Yujuico, Zamora
Enterprises, Inc., Industrial and Commercial Factors, Inc., Metropolitan Distributors of the Philippines,
and Bayview Hotel, Inc. stating inter alia that they were buyers of lots in the Manila Bay area being
reclaimed by RREC, whose rights would be affected by whatever decision to be rendered in the case.
The Motion was granted by the trial court and the Answer attached thereto admitted.[9]
The defendants and the intervenors then moved to dismiss[10] the Complaint of the Republic, placing
reliance on Section 3 of Republic Act No. 5187, which reads:
Sec. 3. Miscellaneous Projects
xxx
m. For the construction of seawall and limited access highway from the south boundary of the City of
Manila to Cavite City, to the south, and from the north boundary of the City of Manila to the
municipality of Mariveles, province of Bataan, to the north, including the reclamation of the foreshore
and submerged areas: Provided, That priority in the construction of such seawalls, highway and
attendant reclamation works shall be given to any corporation and/or corporations that may offer to
undertake at its own expense such projects, in which case the President of the Philippines may, after
competitive bidding, award contracts for the construction of such projects, with the winning bidder
shouldering all costs thereof, the same to be paid in terms of percentage fee of the contractor which
shall not exceed fifty percent of the area reclaimed by the contractor and shall represent full
compensation for the purpose, the provisions of the Public Land Law concerning disposition of
reclaimed and foreshore lands to the contrary notwithstanding: Provided, finally, that the foregoing
provisions and those of other laws, executive orders, rules and regulations to the contrary
notwithstanding, existing rights, projects and/or contracts of city or municipal governments for the
reclamation of foreshore and submerged lands shall be respected. x x x. (underscoring ours)
Since the aforecited law provides that existing contracts shall be respected, movants contended that the
issues raised by the pleadings have become moot, academic and of no further validity or effect.
Meanwhile, the Pasay Law and Conscience Union, Inc. (PLCU) moved to intervene[11], alleging as
legal interest in the matter in litigation the avowed purpose of the organization for the promotion of
good government in Pasay City. In its Order of June 10, 1969, the lower court of origin allowed the
said intervention[12].
On March 24, 1972, the trial court of origin came out with a Decision, disposing, thus:
WHEREFORE, after carefully considering (1) the original complaint, (2) the first Amended Complaint,
(3) the Answer of Defendant Republic Real Estate Corporation to the first Amended Complaint, (4) the
Answer of Defendant Pasay City to the first Amended Complaint, (5) the Second Amended Complaint,
(6) the Answer of Defendant Republic Real Estate Corporation to the Second Amended Complaint, (7)
the Answer of Defendant Pasay City to the Second Amended Complaint, (8) the Memorandum in
Support of Preliminary Injunction of Plaintiff, (9) the Memorandum In Support of the Opposition to the
Issuance of Preliminary Injunction of Defendant Pasay City and Defendant Republic Real Estate
Corporation, (10) the Answer in Intervention of Intervenors Bautista, et. al., (11) Plaintiffs Opposition
to Motion to Intervene, (12) the Reply to Opposition to Motion to Intervene of Intervenors Bautista, et.
al. , (13) the Stipulation of Facts by all the parties, (14) the Motion for Leave to Intervene of Intervenor
Pasay Law and Conscience Union, Inc., (15) the Opposition to Motion For Leave to Intervene of
Intervenors Bautista, et. al., (16) the Reply of Intervenor Pasay Law and Conscience Union, Inc., (17)
the Supplement to Opposition to Motion to Intervene of Defendant Pasay City and Republic Real
Estate Corporation, (18) the Complaint in Intervention of Intervenor Pasay Law and Conscience
Union, Inc., (19) the Answer of Defendant Republic Real Estate Corporation, (20) the Answer of
Intervenor Jose L. Bautista, et. al., to Complaint in Intervention, (21) the Motion to Dismiss of
Defendant Republic Real Estate Corporation, and Intervenors Bautista, et. al., (22) the Opposition of
Plaintiff to said Motion to Dismiss, (23) the Opposition of Intervenor Pasay Law and Conscience
Union, Inc., (24) the Memorandum of the Defendant Republic Real Estate Corporation, (25) the
Memorandum for the Intervenor Pasay Law and Conscience Union, Inc., (26) the Manifestation of
Plaintiff filed by the Office of the Solicitor General, and all the documentary evidence by the parties to
wit: (a) Plaintiffs Exhibits A to YYY-4, (b) Defendant Republic Real Estate Corporations Exhibits 1-
RREC to 40-a and (c) Intervenor Pasay Law and Conscience Union, Incs., Exhibits A-PLACU to C-
PLACU, the Court hereby:
(1) Denies the Motion to Dismiss filed on January 10, 1968, by Defendant Republic Real Estate
Corporation and Intervenors Bautista, et. al., as it is the finding of this Court that Republic Act No.
5187 was not passed by Congress to cure any defect in the ordinance and agreement in question and
that the passage of said Republic Act No. 5187 did not make the legal issues raised in the pleadings
moot, academic and of no further validity or effect; and
(2) Renders judgment:
(a) dismissing the Plaintiffs Complaint;
(b) Dismissing the Complaint in Intervention of Intervenor Pasay Law and Conscience Union, Inc.,
(c)Enjoining Defendant Republic Real Estate Corporation and Defendant Pasay City to have all the
plans and specifications in the reclamation approved by the Director of Public Works and to have all
the contracts and sub-contracts for said reclamation awarded by means of, and only after, public
bidding; and
(d) Lifting the preliminary Injunction issued by the Court on April 26, 1962, as soon as Defendant
Republic Real Estate Corporation and Defendant Pasay City shall have submitted the corresponding
plans and specifications to the Director of Public Works, and shall have obtained approval thereof, and
as soon as the corresponding public bidding for the award to the contractor and sub-contractor that
will undertake the reclamation project shall have been effected.
SO ORDERED. (See Court of Appeals Decision dated January 28, 1992; pp. 6-8)
Dissatisfied with the said judgment, the Republic appealed therefrom to the Court of Appeals.
However, on January 11, 1973, before the appeal could be resolved, Presidential Decree No. 3-A
issued, amending Presidential Decree No. 3, thus:
SECTION 1. Section 7 of Presidential Decree No. 3, dated September 26, 1972, is hereby amended by
the addition of the following paragraphs:
The provisions of any law to the contrary notwithstanding, the reclamation of areas under water,
whether foreshore or inland, shall be limited to the National Government or any person authorized by
it under a proper contract.
All reclamations made in violation of this provision shall be forfeited to the State without need of
judicial action.
Contracts for reclamation still legally existing or whose validity has been accepted by the National
Government shall be taken over by the National Government on the basis of quantum meruit, for
proper prosecution of the project involved by administration.
On November 20, 1973, the Republic and the Construction Development Corporation of the
Philippines (CDCP) signed a Contract[13] for the Manila-Cavite Coastal Road Project (Phases I and
II) which contract included the reclamation and development of areas covered by the Agreement
between Pasay City and RREC. Then, there was issued Presidential Decree No. 1085 which transferred
to the Public Estate Authority (PEA) the rights and obligations of the Republic of the Philippines under
the contract between the Republic and CDCP.
Attempts to settle amicably the dispute between representatives of the Republic, on the one hand, and
those of Pasay City and RREC, on the other, did not work out. The parties involved failed to hammer
out a compromise.
On January 28, 1992, the Court of Appeals came out with a Decision[14] dismissing the appeal of the
Republic and holding, thus:
WHEREFORE, the decision appealed from is hereby AFFIRMED with the following modifications:
1. The requirement by the trial court on public bidding and the submission of RRECs plans and
specification to the Department of Public Works and Highways in order that RREC may continue the
implementation of the reclamation work is deleted for being moot and academic;
2. Ordering the plaintiff-appellant to turn over to Pasay City the ownership and possession over all
vacant spaces in the twenty-one hectare area already reclaimed by Pasay City and RREC at the time it
took over the same. Areas thereat over which permanent structures has (sic) been introduced shall,
including the structures, remain in the possession of the present possessor, subject to any negotiation
between Pasay City and the said present possessor, as regards the continued possession and ownership
of the latter area.
3. Sustaining RRECs irrevocable option to purchase sixty (60%) percent of the Twenty-One (21)
hectares of land already reclaimed by it, to be exercised within one (1) year from the finality of this
decision, at the same terms and condition embodied in the Pasay City-RREC reclamation contract, and
enjoining appellee Pasay City to respect RRECs option.
SO ORDERED.
On February 14, 1992, Pasay City and RREC presented a Motion for Reconsideration of such Decision
of the Court of Appeals, contending, among others, that RREC had actually reclaimed Fifty-Five (55)
hectares, and not only Twenty-one (21) hectares, and the respondent Court of Appeals erred in not
awarding damages to them, movants.
On April 28, 1992, the Court of Appeals acted favorably on the said Motion for Reconsideration, by
amending the dispositive portion of its judgment of January 28, 1992, to read as follows:
WHEREFORE, the dispositive portion of our Decision dated January 28, 1992 is hereby AMENDED
to read as follows:
1. The requirement by the trial court on public bidding and the submission of the RRECs plans and
specification to the Department of Public Works and Highways in order that RREC may continue the
implementation of the reclamation work is deleted for being moot and academic.
2. Ordering plaintiff-appellant to turn over to Pasay City the ownership and possession of the above
enumerated lots (1 to 9).
3. Sustaining RRECs irrevocable option to purchase sixty (60%) percent of the land referred to in No. 2
of this dispositive portion, to be exercised within one (1) year from the finality of this Decision, at the
same terms and condition embodied in the Pasay City-RREC reclamation contract, and enjoining
Pasay City to respect RRECs irrevocable option.
SO ORDERED.
From the Decision and Amended Decision of the Court of Appeals aforementioned, the Republic of the
Philippines, as well as Pasay City and RREC, have come to this Court to seek relief, albeit with
different prayers.
On September 10, 1997, the Court commissioned the former thirteenth Division of Court of Appeals to
hear and receive evidence on the controversy. The corresponding Commissioners Report, dated
November 25, 1997, was submitted and now forms part of the records.
On October 11, 1997, the Cultural Center of the Philippines (CCP) filed a Petition in Intervention,
theorizing that it has a direct interest in the case being the owner of subject nine (9) lots titled in its
(CCP) name, which the respondent Court of Appeals ordered to be turned over to Pasay City. The CCP,
as such intervenor, was allowed to present its evidence, as it did, before the Court of Appeals, which
evidence has been considered in the formulation of this disposition.
In G.R. No. 103882, the Republic of the Philippines theorizes, by way of assignment of errors, that:
I
THE COURT OF APPEALS ERRED IN UPHOLDING THE VALIDITY OF PASAY CITY
ORDINANCE NO. 158 DATED APRIL 21, 1959 AND THE RECLAMATION CONTRACT
ENTERED INTO BETWEEN PASAY CITY AND RREC;
II
THE COURT OF APPEALS ERRED IN FINDING THAT RREC HAD RECLAIMED 55 HECTARES
AND IN ORDERING THE TURN-OVER TO PASAY CITY OF THE OWNERSHIP AND
POSSESSION OF NINE (9) LOTS TITLED IN THE NAME OF CCP.
In G.R. No. 105276, the petitioners, Pasay City and RREC, contend, that::
I
THE COURT OF APPEALS ERRED IN NOT DECLARING PRESIDENTIAL DECREE NO. 3-A
UNCONSTITUTIONAL;
II
THE COURT OF APPEALS ERRED IN NOT AWARDING DAMAGES IN FAVOR OF PASAY
CITY AND RREC.
Let us first tackle the issues posed in G.R. No. 103882.
On the first question regarding the validity of Pasay City Ordinance No. 158 dated April 21, 1959 and
the Agreement dated April 24, 1959 between Pasay City and RREC, we rule in the negative.
Section 1 of RA 1899, reads:
SECTION 1. Authority is hereby granted to all municipalities and chartered cities to undertake and
carry out at their own expense the reclamation by dredging, filling, or other means, of any foreshore
lands bordering them, and to establish, provide, construct, maintain and repair proper and adequate
docking and harbor facilities as such municipalities and chartered cities may determine in consultation
with the Secretary of Finance and the Secretary of Public Works and Communications.
It is the submission of the petitioner, Republic of the Philippines, that there are no foreshore lands
along the seaside of Pasay City[15]; that what Pasay City has are submerged or offshore areas outside
the commerce of man which could not be a proper subject matter of the Agreement between Pasay City
and RREC in question as the area affected is within the National Park, known as Manila Bay Beach
Resort, established under Proclamation No. 41, dated July 5, 1954, pursuant to Act No. 3915, of which
area it (Republic) has been in open, continuous and peaceful possession since time immemorial.
Petitioner faults the respondent court for unduly expanding what may be considered foreshore land
through the following disquisition:
The former Secretary of Justice Alejo Mabanag, in response to a request for an opinion from the then
Secretary of Public Works and Communications as to whether the term foreshore areas as used in
Section I of the immediately aforequoted law is that defined in Websters Dictionary and the Law of
Waters so as to make any dredging or filling beyond its prescribed limit illegal, opined:
According to the basic letter of the Director of Public Works, the law of Waters speaks of shore and
defines it thus: that space movement of the tide. Its interior or terrestrial limit in the line reached by
highest equinoctial tides.
Websters definition of foreshore reads as follows:
That part of the shore between high water and low-water marks usually fixed at the line to which the
ordinary means tide flows: also, by extension, the beach, the shore near the waters edge.
If we were to be strictly literal the term foreshore or foreshore lands should be confined to but a
portion of the shore, in itself a very limited area. (p. 6, Intervenors-appellees brief).
Bearing in mind the (Websters and Law of Waters) definitions of shore and of foreshore lands, one is
struck with the apparent inconsistency between the areas thus described and the purpose to which that
area, when reclaimed under the provision of Republic Act No. 1899, shall be devoted. Section I (of said
Law) authorizes the construction thereat of adequate docking and harbor facilities. This purpose is
repeated in Sections 3 and 4 of the Act.
And yet, it is well known fact that foreshore lands normally extend only from 10 to 20 meters along the
coast. Not very much more if at all. In fact, certain parts in Manila bordering on Manila Bay, has no
foreshore to speak of since the sea washes the sea wall.
It does not seem logical, then, that Congress had in mind. Websters limited concept of foreshore when it
enacted Republic Act No. 1899, unless it intends that the wharves, piers, docks, etc. should be
constructed parallel to the shore, which is impractical.
Since it is to be presumed that Congress could not have intended to enact an ineffectual measure not
one that would lead to absurd consequences, it would seem that it used foreshore in a sense wider in
scope that that defined by Webster. xxx
To said opinion on the interpretation of the R.A. 1899, plaintiff-appellant could not offer any refutation
or contrary opinion. Neither can we. In fact, the above construction is consistent with the rule on
context in statutory construction which provides that in construing a statute, the same must be
construed as a whole. The particular words, clauses and phrases should not be studied as detached
and isolated expressions, but the whole and every part of the statute must be considered in fixing the
meaning of any of its parts in order to produce a harmonious whole (see Araneta vs. Concepcion, 99
Phil. 709). There are two reasons for this. Firstly, the force and significance of particular expressions
will largely depend upon the connection in which they are found and their relation to the general
subject-matter of the law. The legislature must be understood to have expressed its whole mind on the
special object to which the legislative act is directed but the vehicle for the expressions of that meaning
is the statute, considered as one entire and continuous act, and not as an agglomeration of unrelated
clauses . Each clause or provision will be illuminated by those which are cognate to it and by the
general tenor of the whole statute and thus obscurities and ambiguities may often be cleared up by the
most direct and natural means. Secondly, effect must be given, if it is possible, to every word and
clause of the statute, so that nothing shall be left devoid of meaning or destitute of force. To this end,
each provision of the statute should be read in the light of the whole. For the general meaning of the
legislature, as gathered from the entire act, may often prevail over the construction which would
appear to be the most natural and obvious on the face of a particular clause. It is by this means that
contradiction and repugnance between the different parts of the statute may be avoided. (See Black,
Interpretation of Laws, 2nd Ed., pp. 317-319).
Resorting to extrinsic aids, the Explanatory Note to House Bill No. 3630, which was subsequently
enacted as Republic Act No. 1899, reads:
In order to develop and expand the Maritime Commerce of the Philippines, it is necessary that harbor
facilities be correspondingly improved, and, where necessary, expanded and developed. The national
government is not in a financial position to handle all this work. On the other hand, with a greater
autonomy, many chartered cities and provinces are financially able to have credit position which will
allow them to undertake these projects. Some cities, such as the City of Bacolod under R.A. 161, has
been authorized to reclaim foreshore lands bordering it.
Other cities and provinces have continuously been requesting for authority to reclaim foreshore lands
on the basis of the Bacolod City pattern, and to undertake work to establish, construct on the reclaimed
area and maintain such port facilities as may be necessary. In order not to unduly delay the
undertaking of these projects, and inorder to obviate the passage of individual pieces of legislation for
every chartered city and province, it is hereby recommended that the accompanying bill be approved. It
covers Authority for All chartered cities and provinces to undertake this work. x x x (underscoring
supplied)
Utilizing the above explanatory note in interpreting and construing the provisions of R.A. 1899, then
Secretary of Justice Mabanag opined:
It is clear that the Bacolod City pattern was the basis of the enactment of the aforementioned bill of
general application. This so-called Bacolod City pattern appears to be composed of 3 parts, namely:
Republic Act No. 161, which grants authority to Bacolod City to undertake or carry out ... the
reclamation ... of any [sic] carry out the reclamation project conformably with Republic Act No. 161;
and Republic Act No. 1132 authorizing Bacolod City to contract indebtedness or to issue bonds in the
amount not exceeding six million pesos to finance the reclamation of land in said city.
Republic Act No. 161 did not in itself specify the precise space therein referred to as foreshore lands,
but it provided that docking and harbor facilities should be erected on the reclaimed portions thereof,
while not conclusive would indicate that Congress used the word foreshore in its broadest sense.
Significantly, the plan of reclamation of foreshore drawn up by the Bureau of Public Works maps out
an area of approximately 1,600,000 square meters, the boundaries of which clearly extend way beyond
Websters limited concept of the term foreshore. As a contemporaneous construction by that branch of
the Government empowered to oversee at least, the conduct of the work, such an interpretation
deserves great weight. Finally, Congress in enacting Republic Act No. 1132 (supplement to RA 161),
tacitly confirmed and approved the Bureaus interpretation of the term foreshore when instead of taking
the occasion to correct the Bureau of over extending its plan, it authorized the city of Bacolod to raise
the full estimated cost of reclaiming the total area covered by the plan. The explanatory note to House
Bill No. 1249 which became Republic Act No. 1132 states among the things:
The Bureau of Public Works already prepared a plan for the reclamation of about 1,600,000 square
meters of land at an estimated costs of about P6,000,000.00. The project is self-supporting because the
proceeds from the sales or leases of lands so reclaimed will be more than sufficient to cover the cost of
the project.
Consequently, when Congress passed Republic Act No. 1899 in order to facilitate the reclamation by
local governments of foreshore lands on the basis of the Bacolod City pattern and in order to obviate
the passage of individual pieces of legislation for every chartered city and provinces requesting
authority to undertake such projects, the lawmaking body could not have had in mind the limited area
described by Webster as foreshore lands. x x x.
If it was really the intention of Congress to limit the area to the strict literal meaning of foreshore lands
which may be reclaimed by chartered cities and municipalities, Congress would have excluded the
cities of Manila, Iloilo, Cebu, Zamboanga and Davao from the operation of RA 1899 as suggested by
Senator Cuenco during the deliberation of the bill considering that these cities do not have foreshore
lands in the strict meaning of the term. Yet, Congress did not approve the proposed amendment of
Senator Cuenco, implying therefore, that Congress intended not to limit the area that may be reclaimed
to the strict definition of foreshore lands.
The opinion of the then Secretary of Justice Mabanag, who was at that time the chief law officer and
legal adviser of the government and whose office is required by law to issue opinions for the guidance
of the various departments of the government, there being then no judicial interpretation to the
contrary, is entitled to respect (see Bengzon vs. Secretary of Justice and Insular Auditor, 68 Phil. 912).
We are not unmindful of the Supreme Court Resolution dated February 3, 1965 in Ponce vs. Gomez (L-
21870) and Ponce vs. City of Cebu (L-2266 , by a unanimous vote of six (6) justices (the other five (5)
members deemed it unnecessary to express their view because in their opinion the questions raised
were not properly brought before the court), which in essence applied the strict dictionary meaning of
foreshore lands as used in RA 1899 in the case of the city of Cebu. But this was promulgated long after
the then Secretary of Justice Mabanag rendered the above opinion on November 16, 1959 and long
after RREC has started the subject reclamation project.
Furthermore, as held by the lower court, Congress, after the Supreme Court issued the aforementioned
Resolution, enacted RA 5187. In Sec. 3 (m) of said law, Congress appropriated money for the
construction of the seawall and limited access highway from the South boundary of the city of Manila
to Cavite City, to the South, and from the North boundary of the city of Manila to the municipality of
Mariveles, province of Bataan, to the North (including the reclamation of foreshore and submerged
areas ... provided ... that ... existing projects and/or contracts of city or municipal governments for the
reclamation of foreshore and submerged lands shall be respected... This is a clear manifestation that
Congress in enacting RA 1899, did not intend to limit the interpretation of the term foreshore land to its
dictionary meaning.
It is presumed that the legislature was acquainted with and had in mind the judicial construction given
to a former statute on the subject, and that the statute on the subject, and that the statute was enacted
having in mind the judicial construction that the prior enactment had received , or in the light of such
existing judicial decisions as have direct bearing upon it (see 50 Am. Jur., Sec. 321, pp. 312-313). But
notwithstanding said interpretation by the Supreme Court of RA 1899 in the Ponce cases, Congress
enacted a law covering the same areas previously embraced in a RA 1899 (as mentioned earlier, cities
without foreshore lands which were sought to be excluded from the operation of RA 1899 were not
excluded), providing that respect be given the reclamation of not only foreshore lands but also of
submerged lands signifying its non-conformity to the judicial construction given to RA 1899. If
Congress was in accord with the interpretation and construction made by the Supreme Court on RA
1899, it would have mentioned reclamation of foreshore lands only in RA 5187, but Congress included
submerged lands in order to clarify the intention on the grant of authority to cities and municipalities
in the reclamation of lands bordering them as provided in RA 1899. It is, therefore, our opinion that it
is actually the intention of Congress in RA 1899 not to limit the authority granted to cities and
municipalities to reclaim foreshore lands in its strict dictionary meaning but rather in its wider scope
as to include submerged lands.
The Petition is impressed with merit.
To begin with, erroneous and unsustainable is the opinion of respondent court that under RA 1899, the
term foreshore lands includes submerged areas. As can be gleaned from its disquisition and
rationalization aforequoted, the respondent court unduly stretched and broadened the meaning of
foreshore lands, beyond the intentment of the law, and against the recognized legal connotation of
foreshore lands. Well entrenched, to the point of being elementary, is the rule that when the law speaks
in clear and categorical language, there is no reason for interpretation or construction, but only for
application.[16] So also, resort to extrinsic aids, like the records of the constitutional convention, is
unwarranted, the language of the law being plain and unambiguous.[17] Then, too, opinions of the
Secretary of Justice are unavailing to supplant or rectify any mistake or omission in the law.[18] To
repeat, the term foreshore lands refers to:
The strip of land that lies between the high and low water marks and that is alternately wet and dry
according to the flow of the tide. (Words and Phrases, Foreshore)
A strip of land margining a body of water (as a lake or stream); the part of a seashore between the low-
water line usually at the seaward margin of a low-tide terrace and the upper limit of wave wash at high
tide usually marked by a beach scarp or berm. (Websters Third New International Dictionary)
The duty of the court is to interpret the enabling Act, RA 1899. In so doing, we cannot broaden its
meaning, much less widen the coverage thereof. If the intention of Congress were to include submerged
areas, it should have provided expressly. That Congress did not so provide could only signify the
exclusion of submerged areas from the term foreshore lands.
Neither is there any valid ground to disregard the Resolution of this Court dated February 3, 1965 in
Ponce v. Gomez (L-21870) and Ponce v. City of Cebu (L-22669) despite the enactment of Republic Act
No. 5187 (RA 5187), the relevant portion of which, reads:
Sec. 3. Miscellaneous Projects
xxx
m. For the construction of seawall and limited access highway from the south boundary of the City of
Manila to Cavite City, to the south, and from the north boundary of the City of Manila to the
municipality of Mariveles, province of Bataan, to the north, including the reclamation of the foreshore
and submerged areas: Provided, That priority in the construction of such seawalls, highway and
attendant reclamation works shall be given to any corporation and/or corporations that may offer to
undertake at its own expense such projects, in which case the President of the Philippines may, after
competitive bidding, award contracts for the construction of such projects, with the winning bidder
shouldering all costs thereof, the same to be paid in terms of percentage fee of the contractor which
shall not exceed fifty percent of the area reclaimed by the contractor and shall represent full
compensation for the purpose, the provisions of the Public Land Law concerning disposition of
reclaimed and foreshore lands to the contrary notwithstanding: Provided, finally, that the foregoing
provisions and those of other laws, executive orders, rules and regulations to the contrary
notwithstanding, existing rights, projects and/or contracts of city or municipal governments for the
reclamation of foreshore and submerged lands shall be respected. x x x.
There is nothing in the foregoing provision of RA 5187 which can be interpreted to broaden the scope
of foreshore lands. The said law is not amendatory to RA 1899. It is an Appropriations Act, entitled AN
ACT APPROPRIATING FUNDS FOR PUBLIC WORKS, SYNCHRONIZING THE SAME WITH
PREVIOUS PUBLIC WORKS APPROPRIATIONS.
All things viewed in proper perspective, we reiterate what was said in Ponce v. Gomez (L-21870) and
Ponce v. City of Cebu (L-22669) that the term foreshore refers to that part of the land adjacent to the sea
which is alternately covered and left dry by the ordinary flow of the tides. As opined by this Court in
said cases:
WHEREAS, six (6) members of the Court (Justices Bautista Angelo, Concepcion, Reyes, Barrera,
Dizon and Jose P. Bengzon) opine that said city ordinance and contracts are ultra vires and hence, null
and void, insofar as the remaining 60% of the area aforementioned, because the term foreshore lands
as used in Republic Act No. 1899 should be understood in the sense attached thereto by common
parlance; (underscoring ours)
The aforesaid ruling was applied by then Secretary of Justice Claudio Teehankee, in his opinion dated
December 22, 1966, in a case with analogous facts as the present one, to wit:
December 22, 1966
The Secretary of Agriculture
and Natural Resources
Diliman, Quezon City
Sir:
xxx
I. Facts -
1. On January 19, 1961, pursuant to the provisions of Republic Act No. 1899, the Municipality of
Navotas enacted Ordinance No. 1 authorizing the Municipal Mayor to enter into a reclamation
contract with Mr. Chuanico.
2. On March 15, 1961, a reclamation contract was concluded between the Municipality of Navotas,
represented by the Municipal Mayor, and Mr. Chuanico in accordance with the above ordinance.
Thereunder, Mr. Chuanico shall be the attorney-in-fact of the Municipality in prosecuting the
reclamation project and shall advance the money needed therefor; that the actual expenses incurred
shall be deemed a loan to the Municipality; that Mr. Chuanico shall have the irrevocable option to buy
70% of the reclaimed area at P7.00 per square meter; that he shall have the full and irrevocable
powers to do any and all things necessary and proper in and about the premises, including the power
to hire necessary personnel for the prosecution of the work, purchase materials and supplies, and
purchase or lease construction machineries and equipment, but any and all contracts to be concluded
by him in behalf of the Municipality shall be submitted to public bidding.
xxx
3. On March 16, 1961, the Municipal Council of Navotas passed Resolution No. 22 approving and
ratifying the contract.
xxx
III. Comments -
1. The above reclamation contract was concluded on the basis of Navotas Ordinance No. 1 which, in
turn, had been enacted avowedly pursuant to Republic Act No. 1899. This being so, the contract, in
order to be valid, must conform to the provisions of the said law.
By authorizing local governments to execute by administration any reclamation work, (Republic Act
No. 1899 impliedly forbids the execution of said project by contract. Thus, in the case of Ponce et al.
vs. Gomez (February 3, 1966), five justices of the Supreme Court voted to annul the contract between
Cebu Development Corporation and Cebu City for the reclamation of foreshore lands because the
provisions of said ... contract are not ... in accordance with the provisions of Republic Act No. 1899, as
against one Justice who opined that the contract substantially complied with the provisions of the said
law. (Five Justices expressed no opinion on this point.)
Inasmuch as the Navotas reclamation contract is substantially similar to the Cebu reclamation
contract, it is believed that the former is likewise fatally defective.
2. The Navotas reclamation project envisages the construction of a channel along the Manila Bay
periphery of that town and the reclamation of approximately 650 hectares of land from said channel to
a seaward distance of one kilometer. In the basic letter it is stated that practically, all the 650 hectares
of lands proposed to be reclaimed under the agreement do not constitute foreshore lands and that the
greater portion of the area . . . is in fact navigable and presently being used as a fishing harbor by
deep-sea fishing operators as well as a fishing ground of sustenance fisherman. Assuming the
correctness of these averments, the Navotas reclamation contract evidently transcends the authority
granted under Republic Act No. 1899, which empowers the local governments to reclaim nothing more
than foreshore lands, i.e., that part of the land adjacent to the sea which is alternately covered and left
dry by the ordinary flow of the tides. (26 C.J. 890.) It was for this reason that in the cited case Ponce
case, the Supreme Court, by a vote of 6-0 with five Justices abstaining, declared ultra vires and void
the contractual stipulation for the reclamation of submerged lands off Cebu City, and permanently
enjoined its execution under Republic Act No. 1899.
xxx
In accordance with the foregoing, I have the honor to submit the view that the Navotas reclamation
contract is not binding and should be disregarded for non-compliance with law.
Very truly yours,
(SGD) CLAUDIO TEEHANKEE
Secretary of Justice
The said opinion of Justice Secretary Teehankee who became Associate Justice, and later Chief Justice,
of this Court, did, in our considered view, supersede the earlier opinion of former Justice Secretary
Alejo Mabanag, aforestated, as the cases, in connection with which subject opinions were sought, were
with similar facts. The said Teehankee opinion accords with RA 1899.
It bears stressing that the subject matter of Pasay City Ordinance No. 121, as amended by Ordinance
No. 158, and the Agreement under attack, have been found to be outside the intendment and scope of
RA 1899, and therefore ultra vires and null and void.
What is worse, the same Agreement was vitiated by the glaring absence of a public bidding.
Obviously, there is a complete dearth of evidence to prove that RREC had really reclaimed 55 hectares.
The letter of Minister Baltazar Aquino relied upon by RREC is no proof at all that RREC had reclaimed
55 hectares. Said letter was just referring to a tentative schedule of work to be done by RREC, even as
it required RREC to submit the pertinent papers to show its supposed accomplishment, to secure
approval by the Ministry of Public Works and Highways to the reclamation plan, and to submit to a
public bidding all contracts and sub-contracts for subject reclamation project but RREC never complied
with such requirements and conditions sine qua non.
No contracts or sub-contracts or agreements, plans, designs, and/or specifications of the reclamation
project were presented to reflect any accomplishment. Not even any statement or itemization of works
accomplished by contractors or subcontractors or vouchers and other relevant papers were introduced
to describe the extent of RRECs accomplishment. Neither was the requisite certification from the City
Engineer concerned that portions of the reclamation project not less than 50 hectares in area shall have
been accomplished or completed obtained and presented by RREC.
As a matter of fact, no witness ever testified on any reclamation work done by RREC, and extent
thereof, as of April 26, 1962. Not a single contractor, sub-contractor, engineer, surveyor, or any other
witness involved in the alleged reclamation work of RREC testified on the 55 hectares supposedly
reclaimed by RREC. What work was done, who did the work, where was it commenced, and when was
it completed, was never brought to light by any witness before the court. Certainly, onus probandi was
on RREC and Pasay City to show and point out the as yet unidentified 55 hectares they allegedly
reclaimed. But this burden of proof RREC and Pasay City miserably failed to discharge.
So also, in the decision of the Pasay Court of First Instance dismissing the complaint of plaintiff-
appellant, now petitioner Republic of the Philippines, the lifting of the writ of Preliminary Injunction
issued on April 26, 1962 would become effective only as soon as Defendant Republic Real Estate
Corporation and Defendant Pasay City shall have submitted the corresponding plans and specifications
to the Director of Public Works, and shall have obtained approval thereof, and as soon as corresponding
public bidding for the award to the contractor and sub-contractor that will undertake the reclamation
project shall have been effected. (Rollo, pp. 127-129, G.R. No. 103882)
From the records on hand, it is abundantly clear that RREC and Pasay City never complied with such
prerequisites for the lifting of the writ of Preliminary Injunction. Consequently, RREC had no authority
to resume its reclamation work which was stopped by said writ of preliminary injunction issued on
April 26, 1962.
From the Contract for Dredging Work, dated November 26, 1960, marked Exhibit 21-A for RREC
before the lower court, and Exhibit EE for CCP before the Court of Appeals, it can be deduced that
only on November 26, 1960 did RREC contract out the dredging work to C and A Construction
Company, Inc., for the reclamation of the 55 hectares initially programmed to be reclaimed by it. But,
as stated by RREC itself in the position paper filed with this Court on July 15, 1997, with reference to
CDCPs reclamation work, mobilization of the reclamation team would take one year before a
reclamation work could actually begin. Therefore, the reclamation work undertaken by RREC could
not have started before November 26, 1961.
Considering that on April 26, 1962 RREC was enjoined from proceeding any further with its
reclamation work, it had barely five (5) months, from November, 1961 to April, 1962, to work on
subject reclamation project. It was thus physically impossible for RREC to reclaim 55 hectares, with
the stipulated specifications and elevation, in such a brief span of time. In the report of RREC (Exhibit
DD for CCP), it was conceded that due to the writ of preliminary injunction issued on April 26, 1962,
C and A Construction Co., Inc. had suspended its dredging operation since May, 1962.
The graphical report on the Pasay Reclamation project, as of April 30, 1962, attached to the Progress
Report marked Exhibit DD, is a schematic representation of the work accomplishment referred to in
such Progress Report, indicating the various elevations of the land surface it embraced, ranging from
0.00 meters to the highest elevation of 2.5 meters above MLLW. Such portrayal of work accomplished
is crucial in our determination of whether or not RREC had actually reclaimed any land as under its
Contract for Dredging Work with C and A Construction Company (Exhibit EE), the required final
elevation for a completely reclaimed land was 3.5 meters above MLLW, as explicitly provided in said
Contract for Dredging Work. So, the irresistible conclusion is - when the work on subject RREC-Pasay
City reclamation project stopped in April, 1962 in compliance with the writ of preliminary injunction
issued by the trial court of origin, no portion of the reclamation project worked on by RREC had
reached the stipulated elevation of 3.5 meters above MLLW. The entire area it worked on was only at
sea level or 0.00 meter above MLLW. In short, RREC had not yet reclaimed any area when the writ of
preliminary injunction issued in April 1962.
On this point, the testimonies of Architect Ruben M. Protacio, Architect and Managing partner of
Leandro V. Locsin and partners, Architect and City Planner Manuel T. Maoza, Jr. of Planning
Resources and Operation System, Inc., Rose D. Cruz, Executive Assistant, Office of the President,
from 1966 to 1970, and Dr. Lucrecia Kasilag, National Artist and member of CCP Advisory
Committee, come to the fore. These credible, impartial and knowledgeable witnesses recounted on the
witness stand that when the construction of the Main Building of the Cultural Center of the Philippines
(CCP) began in 1966, the only surface land available was the site for the said building (TSN, Sept. 29,
1997, pages 8, 14 and 50), what could be seen in front of and behind it was all water (TSN, Sept. 29,
1997, pages 127-128). When the CCP Main Building was being constructed, from 1966 to 1969, the
land above sea level thereat was only where the CCP Main Building was erected and the rest of the
surroundings were all under water, particularly the back portion fronting the bay. (TSN, Sept. 13, 1997,
pp. 181, 182, 185, 186, 188). Dr. Lucrecia R. Kasilag stressed that on April 16, 1966, during the ground
breaking for the CCP Main Building, it was water all around (TSN, Sept. 30, 1997, pp. 320, 324, 325).
There was indeed no legal and factual basis for the Court of Appeals to order and declare that the
requirement by the trial court on public bidding and the submission of RRECs plans and specification
to the Department of Public Works and Highways in order that RREC may continue the
implementation of the reclamation work is deleted for being moot and academic. Said requirement has
never become moot and academic. It has remained indispensable, as ever, and non-compliance
therewith restrained RREC from lawfully resuming the reclamation work under controversy,
notwithstanding the rendition below of the decision in its favor.
Verily, contrary to what the Court of Appeals found, RREC had not reclaimed any area with the
prescribed elevation of 3.5 meters above MLLW, so much so that in 1978, it (RREC) opted to file with
the former Ministry of Public Highways, a claim for compensation of P30,396,878.20, for reclamation
work allegedly done before the CDCP started working on the reclamation of the CCP grounds. On
September 7, 1979, RREC asked the Solicitor General to settle its subject claim for compensation at the
same amount of P30,396,878.20. But on June 10, 1981, guided by the cost data, work volume
accomplished and other relevant information gathered by the former Ministry of Public Highways, the
Solicitor General informed RREC that the value of what it had accomplished, based on 1962 price
levels, was only P8,344,741.29, and the expenses for mobilization of equipment amounted to
P2,581,330.00. The aforesaid evaluation made by the government, through the then Minister of Public
Highways, is factual and realistic, so much so that on June 25, 1981, RREC, in its reply letter to the
Solicitor General, stated:
We regret that we are not agreeable to the amount of P10,926,071.29, based on 1962 cost data,
etc., as compensation based on quantum meruit. The least we would consider is the amount of
P10.926,071.29 plus interest at the rate of 6% per annum from 1962 to the time of payment. We
feel that 6% is very much less than the accepted rate of inflation that has supervened since 1962 to
the present, and even less than the present legal rate of 12% per annum.[19]
Undoubtedly, what RREC claimed for was payment for what it had done, and for the dredge fill of
1,558,395 cubic meters it used, on subject reclamation project.
Respondent Court likewise erred in ordering the turn-over to Pasay City of the following titled lots, to
wit:
LOT NO. BUILDING AREA OCT/TCT
42 Gloria Maris 9,516 sq.m. OCT 159 in the Restaurant name of GSIS
3 Asean Garden 76,299 sq.m. OCT 10251 in the

name of CCP
12 Folk Arts Theater 1.7503 sq.m. TCT 18627 in the

and PICC parking name of CCP
space
22 landscaped with 132,924 sq.m. TCT 75676 in the

sculpture of Asean name of CCP
Artists-site of
Boom na Boom
23 open space, back 34,346 sq.m. TCT 75677 in the

of Philcite name of CCP
24 Parking space for 10,352 sq.m. TCT 75678 in the

Star City, CCP, name of CCP
Philcite
25 open space, 11,323 sq.m. TCT 75679 in the

occupied by Star name of CCP
City

beside PICC name of CCP

leased by El name of CCP
Shaddai
We discern no factual basis nor any legal justification therefor. In the first place, in their answer to the
Complaint and Amended Complaint below, RREC and Pasay City never prayed for the transfer to
Pasay City of subject lots, title to which had long become indefeasible in favor of the rightful title
holders, CCP and GSIS, respectively.
The annotation of a notice of lis pendens on the certificates of title covering the said lots is of no
moment. It did not vest in Pasay City and RREC any real right superior to the absolute ownership
thereover of CCP and GSIS. Besides, the nature of the action did not really warrant the issuance of a
notice of lis pendens.
Section 14 of Rule 13, Revised Rules of Civil Procedure, reads:
Sec. 14. Notice of lis pendens. - In an action affecting the title or the right of possession of real
property, the plaintiff and the defendant, when affirmative relief is claimed in his answer, may record in
the office of the registry of deeds of the province in which the property is situated a notice of the
pendency of the action. Said notice shall contain the names of the parties and the object of the action
or defense, and a description of the property in that province affected thereby. Only from the time of
filing such notice for record shall a purchaser, or encumbrancer of the property affected thereby, be
deemed to have constructive notice of the pendency of the action, and only of its pendency against the
parties designated by their real names.
The notice of lis pendens herein above mentioned may be cancelled only upon order of the court, after
proper showing that the notice is for the purpose of molesting the adverse party, or that it is not
necessary to protect the rights of the party who caused it to be recorded.
Under the aforecited provision of law in point, a notice of lis pendens is necessary when the action is
for recovery of possession or ownership of a parcel of land. In the present litigation, RREC and Pasay
City, as defendants in the main case, did not counterclaim for the turnover to Pasay City of the titled
lots aforementioned.
What is more, a torrens title cannot be collaterally attacked. The issue of validity of a torrens title,
whether fraudulently issued or not, may be posed only in an action brought to impugn or annul it.
(Halili vs. National Labor Relations Commission, 257 SCRA 174; Cimafranca vs. Intermediate
Appellate Court, 147 SCRA 611.) Unmistakable, and cannot be ignored, is the germane provision of
Section 48 of P.D. 1529, that a certificate of title can never be the subject of a collateral attack. It
cannot be altered, modified, or cancelled except in a direct proceeding instituted in accordance with
law.
Although Pasay City and RREC did not succeed in their undertaking to reclaim any area within subject
reclamation project, it appearing that something compensable was accomplished by them, following the
applicable provision of law and hearkening to the dictates of equity, that no one, not even the
government, shall unjustly enrich oneself/itself at the expense of another[20], we believe; and so hold,
that Pasay City and RREC should be paid for the said actual work done and dredge-fill poured in,
worth P10,926,071.29, as verified by the former Ministry of Public Highways, and as claimed by
RREC itself in its aforequoted letter dated June 25, 1981.
It is fervently hoped that long after the end of our sojourn in this valley of tears, the court, for its herein
historic disposition, will be exalted by the future generations of Filipinos, for the preservation of the
national patrimony and promotion of our cultural heritage. As writer Channing rightly puts it:
Whatever expands the affections, or enlarges the sphere of our sympathies - Whatever makes us feel
our relation to the universe and all that it inherits in time and in eternity, and to the great and
beneficent cause of all, must unquestionably refine our nature, and elevate us in the scale of being.
WHEREFORE:
In G.R. No. 103882, the Petition is GRANTED; the Decision, dated January 28, 1992, and Amended
Decision, dated April 28, 1992, of the Court of Appeals, are both SET ASIDE; and Pasay City
Ordinance No. 121, dated May 6, 1958, and Ordinance No. 158, dated April 21, 1959, as well as the
Reclamation Agreements entered into by Pasay City and Republic Real Estate Corporation (RREC) as
authorized by said city ordinances, are declared NULL and VOID for being ultra vires, and contrary to
Rep. Act 1899.
The writ of preliminary injunction issued on April 26, 1962 by the trial court a quo in Civil Case No.
2229-P is made permanent, and the notice of lis pendens issued by the Court of Appeals in CA G.R. CV
No. 51349 ordered CANCELLED. The Register of Deeds of Pasay City is directed to take note of and
annotate on the certificates of title involved, the cancellation of subject notice of lis pendens.
The petitioner, Republic of the Philippines, is hereby ordered to pay Pasay City and Republic Real
Estate Corporation the sum of TEN MILLION NINE HUNDRED TWENTY-SIX THOUSAND
SEVENTY-ONE AND TWENTY-NINE CENTAVOS (P10,926,071.29) PESOS, plus interest thereon
of six (6%) percent per annum from May 1, 1962 until full payment, which amount shall be divided by
Pasay City and RREC, share and share alike.
In G.R. No. 105276, the Petition is hereby DENIED for lack of merit.
SUPREME COURT
Manila
EN BANC
G.R. No. L-4013 February 4, 1909
JUSTO GUIDO, ET AL., plaintiffs-appellees,
vs.
AGUSTIN DE BORJA, ET AL., defendants-appellants.
W.A. Kincaid, for appellants.
Pedro Concepcion, for appellees.
ARELLANO, C.J.:
This action was instituted by the heirs and successors of Francisco Guido and Dominga Santa Ana, to
recover the ownership and possession of the hacienda of Angono, against the defendant, who, being
tenants of the said hacienda until the year 1903, denied the ownership of the plaintiffs and themselves
pretended to be the owners of the hacienda. The Court of First Instance of the Province of Rizal
rendered final judgment, the findings of which, impugned upon appeal by the defendants, are the
following:
1. That the ownership and possession of the hacienda of Angono, as it appears described in the decision
of said court, in accordance with the amended complaint, pertains to Justo Guido, Juliana Guido,
Buenaventura Guido and other participants with them in said hacienda; by virtue thereof the court
below ordered the defendants to restore said possession to the plaintiffs.
2. That the fruits or crops and plantings of the defendants on the said hacienda of Angono do not belong
to the plaintiffs, and in lieu thereof the court below sentences each one of the defendants respectively to
pay the plaintiffs and their participants such sums in money and paddy as they may owe them, as
itemized in the statements attached to the complaint under numbers 1, 2, 3, and 4. A list of the names of
the defendants with the statement of the respective amounts to the payment of which they were
sentenced, follows.
3. That the costs of this suit should be paid by the defendants. By virtue of their appeal to this court the
defendants and appellants presented in their brief the following assignment of errors:
I. The lower court erred in considering that all the defendant appellants are properly joined in
the complaint of the plaintiff appellees.
II. The lower court erred in holding that it had jurisdiction of the claim brought by the plaintiff
appellees.
III. The lower court erred in declaring that the ownership and possession of the land in question
by the plaintiff appellees had been proven.
IV. The lower court erred in declaring that it had been proven that all the defendant appellants
were tenants and lessees on shares of the hacienda on Angono.
V. The lower court erred in considering as proven that the defendant appellants owe the plaintiff
appellees for ground rent, or for lease on shares, the amounts in money and in products which
are itemized in the statements Nos. 1, 2, 3, and 4 attached at the complaint.
The two first errors are of form or procedure, and the three following deal with the merits of the case;
beginning with the last three, let us discuss the third error:
THIRD ERROR.
The ownership of the appellees, with respect to the hacienda of Angono, is discussed in this point; the
appellants produce the documentary evidence, Exhibits A, B, C, 6, 7, 8, 9, and D, which constitute
principally the titles of ownership of the appellees; and in brief, they saw that it is necessary to consider
the Hacienda as divided in two parts — one half corresponding to Francisco Guido and the other half to
Dominga Santa Ana, the principals, as has been said, of the appellees.
With regard to the whole of the Hacienda and of the original titles of acquisition thereto, which are in
no way impugned, it is now alleged by the appellants: 1. That originally the estancia or small farm of
Angono was granted to General Don Domingo Antonio de Otero Bermudez, who was a Spaniard, to the
prejudice of the inhabitants of Angono, who were Indios, in violation of laws 7 and 8, title 12, book 3
[4], of the Recopilacion de las Leyes de Indias; and that when the title was issued, with royal approval,
in favor of the Alferez Real Don Andres Blanco Bermudez, as successor to Don Domingo Antonio de
Otero Bermudez, it was done without prejudice to third persons who might show a better right, which
indicates that the ownership and possession of Don Andres Blanco Bermudez were not absolute.
With reference to the half of the Hacienda derived from Francisco Guido, the appellants allege that the
said half is not entered in the registry of property, and that, according to article 23 of the Mortgage
Law, the titles can not prejudice third persons. The said article provides that:
The instruments mentioned in article 2 and 5 which are not duly recorded or entered in the
registry can not prejudice third persons.
The record of real property and property of rights, acquired through an inheritance or legacy,
shall not prejudice third persons until five years have elapsed since the date thereof, excepting
in cases of testate or intestate inheritances, legacies and additions thereto (mejoras), when left to
legal heirs.
Therefore, the defendants being third parties with respect to the plaintiff, the titles of property presented
by the latter can not prejudice the former.
With respect to the other half derived from the succession of Dominga Santa Ana, it is alleged that,
although the possession is recorded in the registry of property, as such registration dates only from the
15th of July, 1899, it can not convert the title of possession into a title of ownership except at the
expiration of twenty-years, according to the provisions of article 393 of the Mortgage Law, and
consequently the present title is not one of ownership.
The original title to the whole hacienda of Angono is by composicion and royal approval issued on the
16th of December, 1749, and 15th of September, 1752; the former being an order of the following
tenor:
ORDER. — In the farmhouse of the Hacienda of Angono, which is in the Province of La
Laguna de Bay, on the 16th day of the month of December in the year 1749, the Señor
Licenciado Don Pedro Calderon Enriquez, of His Majesty's council, oidor (associate justice) of
the Real Audiencia of these Islands and special judge of the Commission for the sale and
composition of lands in the whole district thereof. Having seen the instruments of title that
General Don Domingo Antonio de Otero Bermudez has produced for the purpose of
substantiating the legitimate ownership and possession and that he has of the so-called hacienda
of Angono, together with the other lands and estancia of Binangonan and the lime quarries of
San Guillermo, all of them consolidated under the name of hacienda and estancia of Angono,
with the acknowledgment and declaration which, in view of the said original documents, was
made by Señor Don Juan de Ozaeta y Oro, who was a member of His Majesty's council, oidor
of the Real Audiencia of these Islands, and special judge of the said land commission for the
year 1699, approving the said titles and holding of the same to be good; and having also seen
the record of the proceedings instituted by the natives of the town of Binangonan before the
Superior Government of these Islands, wherein they claim to be entitled to certain lands
belonging to said estancia, which record was forwarded to this land court; and bearing also in
mind the proceedings upon the visit, demarkation and survey just made of the limits of said
hacienda, together with the claims of the natives leading to the greater and better knowledge of
the true boundaries of the said hacienda, the said oidor said: That it was his duty to declare, and
he does hereby declare, that the titles presented by the said General Don Domingo Bermudez
are good and legitimate, and in consequence thereof the true limits of the said hacienda run
through the places and localities stated in the proceedings in connection with the demarkation
and survey just made.
ORDER — At the city of Manila on the 15th day of the month of September, 1752, Señor Don
Pedron Calderon Enriquez, of His Majesty's council, oidor and alcalde del crimen of the Real
Audiencia of the Islands and special judge of the Commission for the sale and composition of
land in the whole of its territory, having seen the record of proceedings in which are described
the demarkation and survey of the estancia of Angono, with the prayer of the Alferez Real Don
Andres Blanco Bermudez, who succeeds to said lands by reason of the death of said General
Don Domingo de Otero Bermudez, his uncle to the effect that his title to the said estancia and
lime quarries be affirmed by means of resolution, and after examining everything that was
proper to see and examine the said gentlemen stated that it was his duty to order, and that he
does hereby order that title of confirmation in due form be issued to the said Alferez Real of this
most noble city, Don Andres Blanco Bermudez of the aforesaid titles, and in view of the said
instruments and declaratory order above inserted he directed that the present title of
confirmation of the said titles be issued in proper form in order that may be held and considered
as such true and legitimate titles, and the Alferez Real Don Andres Blanco Bermudez as the
lawful possessor and owner of the said hacienda, and he hereby orders every one not to presume
to molest, disturb the legitimacy or the aforesaid titles: Provided, however, That they shall not
prejudice third persons having a better right, and that the said declaratory orders and this
confirmation shall be observed by all judges and their substitutes until His Majesty may order
otherwise.
The first order was at the same time a resolution entered in the proceedings had before the Superior
Government of these Islands by the people of Binangonan, and, in connection with the proceedings the
said order contains this declaration:
That the said natives do not possess, nor have they produced any lawful title to prove the
ownership or possession of the lands belonging to said hacienda which they took and occupied
by force of arms in the year 1745, at a time when several towns mutinied and revolted, and that
none of the said natives, although they were summoned and saw the tape passed through the
limits and neighborhood of their town, came forward to claim, contradict, or protest in any way
or point out a different stream or river named Mabalan, and the said gentleman ordered that the
inhabitants of the said town be notified to abstain in future from working the lands that they
occupied and which are separated by said stream, as otherwise they would be punished for
inference and for again occupying them without the will and consent of the owner thereof; for
the same act the gobernadorcillo, officials and cabezas de barangay are sentenced to be
deprived of their offices and to be confined with hard labor, in the Cavite Prison on ration and
without salary, and otherwise as may be proper.
From the foregoing it appears that the absolute ownerships granted by the State to the first persons to
acquire the property, Otero and Blanco, is fully proven; their titles of ownership are made final by
virtue of the provision of the real cedula of October 15, 1754, article 5 of which reads as follows:
Neither shall possessors of lands sold or adjusted by the various subdelegates from the year
1700 to the present time be molested, disturbed, or denounced, now or at any other time, with
respect to such possession, if such sales or adjustments shall have been confirmed by me, or by
the viceroy or the president of the court of the district in which the lands are located, while
authorized to exercise this power. In cases where the sales of adjustments shall not have been so
confirmed, the possessors will present to the courts of their respective districts and to the other
officials hereby empowered to receive the same, a petition asking for the confirmation of said
sales and adjustments. After the proceedings outlined by the subdelegates in their order with
respect to the measurement and valuation of the said lands, and with reference to the title issued
officials will make an examination of the same for the purpose of ascertaining whether the sale
or adjustment has been made without fraud or collusion, and for an adequate and equitable
price, and a similar examination shall be made by the prosecuting attorney of the district, to the
end that, in view of all the proceedings, etc., there will be issued to the possessor, in my royal
name, a confirmation of his title, by authority of which his possession and ownership of lands
and waters represented will be fully legalized, to the end that at no time will be or his heirs or
assigns be distributed or molested therein. (Cited in the case of Andres Valenton vs. Manual
Murciano, 3 Phil. Rep., 537, 546.)
The said titles are therefore absolute and unconditional notwithstanding the clause, of mere matter of
form, of "without prejudice to third persons who may prove a better right." The natives or residents of
the town of Angono could never be such persons with a better right either as against Otero, or Blanco,
nor against their successors Miguel Cacho, Pascual Santa Ana, and Francisco Guido, because, in the
first place, they constituted a town within the same Estancia or Hacienda of Angono, and they could
hardly constitute a different entity which for the time being — that is, at the commencement of the
hacienda — might invoke a right of its own, when those tenants of the hacienda had but a precarious
right in opposition to the owners thereof; and in the second place, because similarly to those of
Binangonan who expressed their opposition, it may be said and shown as stated and established in the
judgment appealed from, that up to this day they have not been able to produce their title of ownership
or of possession.
It must be added to this that if they ever had any right, they can not exercise it except in the form and
manner prescribed in article 8 of the royal decree of the 26th of January, 1889, and article 5 of the royal
decree of the 26th of October, 1881; they could only direct their claims against the administration, and
in no wise against the grantees of the land. (Valenton vs. Murciano, 3 Phil. Rep., 537, 554, 555.)
With respect to the half of the hacienda that according to the last transfers, was derived from Francisco
Guido, the appellants have only alleged, as has been seen, that at the present time said titles of
ownership lack force as against third persons, such as they hold themselves to be, for the reason that
they are not registered in the registry of property.
It is frequent error to mistake the third person of the civil law for the third person of the Mortgage Law;
this error arises from the lack of knowledge, evidenced in many cases which have been heard by this
Supreme Court, of the character of the latter law which operates in favor of third persons against third
persons, in relation to the solemnity and efficiency of the registration of a real right, in no wise in favor
of a person who turns out to be and calls himself a third party because there are two other prior parties
between whom some act or contract of acquisition or conveyance of ownership or of some other real
right exists; the appellants themselves have cited a paragraph of the commentaries to the Mortgage Law
by Galindo and Escosura, of which the first lines reveal the intent and purposes of said law: "The object
of the present mortgage system was to protect the rights of the person who register his property against
him who has not registered ...." (2, p. 419), and Manresa, the commentator of the Civil Code, in
speaking of the Mortgage Law, says:
The law always tends to protect registered rights, to favor him who registers, and therefore, that
the registration made shall prejudice those who have not registered. As a general rule it may be
affirmed that where the law speaks of prejudice to a third person, said third person is the one
defined by article 27, as he who has not registered, nor participated in the act or contract that
was registered; and whenever it says that a third person can not be prejudiced such third person
is he who bases his right on a registered title. (4 Civil Code, 302.)
The different persons who may generally be considered as third parties with respect to each act
or contract, are divided by the Mortgage Law into two groups; third parties of the effects of the
civil law, and third parties for the effects of the Mortgage Law. While no registered title exist
the civil law governs; real rights arise or not independently of the registration, and the third
parties may or may not be prejudiced without the intervention of the Mortgage Law. From the
time that a written act or contract exists, there are third parties for the effects of said law, and
registration, determines preference and acquisition of rights to their prejudice. (Ibid., 302.)
The provisions of the Mortgage Law are absolutely inapplicable to the present contention because the
matter at issue does not fall within the purpose of said law; no one of the rights that are contested is
registered; they are rights which can only be discussed and decided under the precepts of the civil law
or of the Civil Code now in force; and in the force of the Civil Code in force, against the titles of
ownership put forward by the appellees, for the purpose of effecting the recovery of possession of the
hacienda of Angono, the residents of said town, the appellants herein, set up no title whatever, either of
ownership or of possession; they only oppose the mere fact of the material possession of certain parcels
of land of the said hacienda, which they held on lease or lease on shares until the year when, as one of
the appellees states, they rose against the ownership of the hacienda.
FOURTH AND FIFTH ERRORS.
The court below has no erred in considering as proven that all the appellants are tenants or lessees on
shares of the hacienda of Angono.
Neither has it erred in considering as proven that they own the appellees for ground rent, tenancy, or
lease on shares, the amounts in money or in products itemized in the statements Nos. 1, 2, 3, and 4 filed
with the complaint.
These allegations of error are based on the lack of identity of the defendants herein as such tenants or
lessees on shares of the hacienda of Angono. It is admitted in the brief that out of 155 defendants 51 are
shown to be tenants according to the documentary evidence offered and admitted at the trial; it appears
therein that they subscribed to proceedings served in February, 1898, on them personally as such
tenants of the said hacienda, to compel them to deposit what they respectively had to pay for ground
rent, tenancy, or lease on shares; but that it has not been proven that the others are such tenants, except
by the testimony of one witness and the four statements which accompany the complaint.
For the purpose of deciding this question, the reason alleged by the appellees in their answer is
conclusive.
The identity said in the brief of the adverse party to be lacking with respect to some of the
defendant appellants is altogether unnecessary and immaterial from the moment that the
defendants, all of them, have appeared before the lower court and answered the complaint by
their own names, as they are named in the complaint. No question has been raised in the court
below with respect to any of the names of the defendant appellants; on the contrary, as has been
said they all appeared, and all of them answered the complaint by the same names that appear
therein, which fact show their admission of and conformity to this part of the complaint. (Brief,
17.)
FIRST ERROR.
The court below did not err in considering that all the defendants are properly joined in the complaint
of the plaintiff appellees.
The appellants allege that they are not united in one sole contract so that by reason thereof, they may be
sued jointly, and that the parcels of land which they respectively hold constitute matter for separate and
distinct causes of action.
The accumulation of parties in this case is a result of the unity of action, unity of object, and unity of
defense. Unity of action inasmuch as, in view of the attitude of the defendants, who seek to obtain the
ownership of the hacienda, the complaint has for its object the recovery of possession of the lawful
owners who, until 1903, allowed the defendants to remain in possession of certain parcels thereof under
contract of lease or lease on shares; unity of object, which can not be less than the entire hacienda,
because it is detained in its entirety by the defendants, united together with the manifest intent for the
purpose; and unity of defense, because the pretension of the defendants is one, to wit, that of being
themselves the owners of the hacienda. Joinder could not have been more imperative even if, after
considerable expense and delay, a separate action had been brought against each one of the tenants who
now detain the hacienda. Section 114 of the Code of Civil Procedure, which the court below took into
consideration, is applicable herein:
Any person should be made a defendant who has or claims an interest in the controversy or the
subject-matter thereof adverse to the plaintiff, or who is necessary party to a complete
determination or settlement of the questions involved therein.
Exhibit P, offered in evidence by the plaintiffs and admitted by the lower court over the exception of
the defendants, which exception however, has not been brought before this court, is a notarial act drawn
up at the instance of one of the plaintiffs, Justo Guido, for the purpose of obtaining a copy of the
resolution agreed upon by the tenants, and which Guido testified was delivered to him by Dominador
Gomez, to whom the original was returned. It reads thus:
. . . all the residents of this town (Angono) attended a meeting, and, being assembled, Councilor
Januario Villamayor, as president, took the floor and informed those present at the meeting that
in consequence of the oppressed condition of this town, the inhabited portion of which is
surrounded by an hacienda possessed by the heirs of Doña Dominga Santa Ana, an investigation
and search for documentary proofs to permit those who claim to be the owners to exercise acts
of ownership was contemplated ... ; hence, in order to avoid, as much as possible, disturbing the
peace of the inhabitants as always happens in litigious questions of this kind, it is the opinion of
the majority of the residents that an agreement should be entered into between the latter and the
owners of the former, with the intervention of the Honorable W. Kincaid and Doctor Gomez,
who promise to settle this matter peacefully upon an offer to pay them with one-half of the level
lands of the Hacienda within a reasonable period of time. Thereupon all parties present, after an
extensive discussion of the matter, assented to said agreement being carried out and that
adequate and clear contracts should be drawn up and subjected to sound and indulgent
criticism . . . .
It is evident that they unanimously promised to dispose of one-half of the hacienda in payment for their
defense as though they were co-owners, knowing that they disposed of one-half of the hacienda which
as they say, "surrounds the inhabited portion of the town," "the hacienda that is possessed by the heirs
of Doña Dominga Santa Ana," whom "within a reasonable period of time," they purposed to spoliate of
the whole of it, and immediately thereafter to dispose of one-half of its level lands in order to pay their
lawyer and the above-named Doctor Gomez.
SECOND ERROR.
Neither has the court below erred in holding that it had jurisdiction to hear the claim brought by the
plaintiff appellees — that is to say, the second cause of action with reference to the prayer that the
defendants, now the appellants, be sentenced to pay the plaintiffs the amounts owing for ground rent,
tenancy, or lease on shares, as itemized in the statements filed with the complaint as a part thereof.
The argument on appeal consists of the citation of paragraph 3, section 56 of Act No. 136, and of the
fact that, "from the same judgment appealed from, it has been fully demonstrated that, with the
exception of Felix Miranda, none of the other defendants owe any one or all of the plaintiffs any
amount in money or in products equal to the sum of 100 dollars or more, excluding interest," which is
the amount fixed by said section with reference to the jurisdiction of a Court of First Instance.
In proof of jurisdiction the court below cites section 90 of the Code of Civil Procedure, and the
appellees cite in corroboration section 427 of the Code of California, according to which plaintiff may
join several causes of action in complaint when they are based on "claims to recover a specific piece of
realty, with or without damages for its retention or injury, and the rents and products of the same."
The natural effect of an action for recovery is the restoration of the thing together with the fruits,
accessories, and payment of damages. In the second finding of the judgment appealed from, the
plaintiffs were not granted the fruits or crops and plantings of the defendants on the hacienda of
Angono, but in exchange, each of them was sentenced to pay the amounts in cash and in palay (paddy)
which they appeared to be owing, as specified in the statements attached to the complaint as a part
thereof.
The fruits that the defendants are obliged to restore, together with the thing not belonging to but
retained by them, are not only the naturals fruits, which have justly been denied by the judgment
appealed from, but also the civil fruits which consist of the rent for the buildings and the price of the
lease of the lands. (Civil Code, 335.)
Beginning with fact that the crops or products of the detained lands are fruits obtained by those who, as
tenants, worked the lands, it was not proper to deprive them of the same; but from the moment that they
desired to usurp the ownership of the hacienda, and commenced to act in the bad faith with which they
present retain possession, instead of owing those fruits they owe the civil, not, however, by virtue of a
contract which they now disown, but by virtue of the right of accession which accompanies the right of
recovery. And if they were sued as one sole party for the restitution of the hacienda, they must be sued
as such for the restitution of its civil fruits, in their character of accessories not as matter of compliance
with a lease contract; for all of which reasons the finding in the judgment is fully in accordance with
the law.
In view of the foregoing, the judgment appealed from is hereby affirmed with the costs of this instance
against the appellants.
Torres, Mapa, Johnson, Carson, and Willard, JJ., concur.
SUPREME COURT
Manila
EN BANC
G.R. No. 35223 September 17, 1931
THE BACHRACH MOTOR CO., INC., plaintiff-appellee,
vs.
TALISAY-SILAY MILLING CO., ET AL., defendants-appellees.
THE PHILIPPINE NATIONAL BANK, intervenor-appellant.
Roman J. Lacson for intervenor-appellant.
Mariano Ezpeleta for plaintiff-appellee.
Nolan and Hernaez for defendants-appellees Talisay-Silay Milling Co. and Cesar Ledesma.
ROMUALDEZ, J.:
This proceeding originated in a complaint filed by the Bachrach Motor Co., Inc., against the Talisay-
Silay Milling Co., Inc., for the delivery of the amount P13,850 or promissory notes or other instruments
or credit for that sum payable on June 30, 1930, as bonus in favor of Mariano Lacson Ledesma; the
complaint further prays that the sugar central be ordered to render an accounting of the amounts it owes
Mariano Lacson Ledesma by way of bonus, dividends, or otherwise, and to pay the plaintiff a sum
sufficient to satisfy the judgment mentioned in the complaint, and that the sale made by said Mariano
Lacson Ledesma be declared null and void.
The Philippine National Bank filed a third party claim alleging a preferential right to receive any
amount which Mariano Lacson Ledesma might be entitled to from the Talisay-Silay Milling Co. as
bonus, because that would be civil fruits of the land mortgaged to said bank by said debtor for the
benefit of the central referred to, and by virtue of a deed of assignment, and praying that said central be
ordered to delivered directly to the intervening bank said sum on account of the latter's credit against
the aforesaid Mariano Lacson Ledesma.
The corporation Talisay-Silay Milling Co., Inc., answered the complaint stating that of Mariano Lacson
Ledesma's credit, P7,500 belonged to Cesar Ledesma because he had purchased it, and praying that it
be absolved from the complaint and that the proper party be named so that the remainder might be
delivered.
Cesar Ledesma, in turn, claiming to be the owner by purchase in good faith an for a reconsideration of
the P7,500 which is a part of the credit referred to above, answered praying that he be absolved from
the complaint.
The plaintiff Bachrach Motor Co., Inc., answered the third party claim alleging that its credit against
Mariano Lacson Ledesma was prior and preferential to that of the intervening bank, and praying that
the latter's complaint be dismissed.
At the trial all the parties agreed to recognize and respect the sale made in favor of Cesar Ledesma of
the P7,500 part of the credit in question, for which reason the trial court dismissed the complaint and
cross-complaint against Cesar Ledesma authorizing the defendant central to deliver to him the
aforementioned sum of P7,500. And upon conclusion of the hearing, the court held that the Bachrach
Motor Co., Inc., had a preferred right to receive the amount of P11,076.02 which was Mariano Lacson
Ledesma's bonus, and it ordered the defendant central to deliver said sum to the plaintiff.
The Philippine National Bank appeals, assigning the following alleged errors as committed by the trial
court:
1. In holding that the bonus which the Talisay-Silay Milling Co., Inc., bound itself to pay the
planters who had mortgaged their land to the Philippine National Bank to secure the payment of
the debt of said central to said bank is not civil fruits of said land.
2. In not holding that said bonus became subject to the mortgage executed by the defendant
Mariano Lacson Ledesma to the Philippine National Bank to secure the payment of his personal
debt to said bank when it fell due.
3. In holding that the assignment (Exhibit 9, P.N.B.) of said bonus made on March 7, 1930, by
Mariano Lacson Ledesma to the Philippine National Bank to be applied to the payment of his
debt to said Philippine National Bank is fraudulent.
4. In holding that the Bachrach Motor Co. Inc., in civil case No. 31597 of the Court of First
Instance of Manila levied a valid attachment upon the bonus in question.
5. In admitting and considering the supplementary complaint filed by the Bachrach Motor Co.,
Inc., alleging as a cause of action the attachment of the bonus in question which said Bachrach
Motor Co., Inc., in civil case No. 31821 of the Court of First Instance of Manila levied after the
filing of the original complaint in this case, and after Mariano Lacson Ledesma in this case had
been declared in default.
6. In holding that the Bachrach Motor Co., Inc., has a preferential right to receive from the
Talisay-Silay Milling Co., Inc., the amount of P11,076.02 which is in the possession of said
corporation as the bonus to be paid to Mariano Lacson Ledesma, and in ordering the Talisay-
Silay Milling Co., Inc., to deliver said amount to the Bachrach Motor Co., Inc.
7. In not holding that the Philippine National Bank has a preferential right to receive from the
Talisay-Silay Milling Co., Inc., the amount of P11,076.02 held by said corporation as Mariano
Lacson Ledesma's bonus, and in not ordering said Talisay-Silay Milling Co., Inc., to deliver said
amount to the Philippine National Bank.
8. In not holding that the amended complaint and the supplementary complaint of the Bachrach
Motor Co., Inc., do not state facts sufficient to constitute a cause of action in favor of the
Bachrach Motor Co., Inc., and against the Talisay-Silay Milling Co., Inc., or against the
Philippine National Bank.
The appellant bank bases its preferential right upon the contention that the bonus in question is civil
fruits of the lands which the owners had mortgaged for the benefit of the central giving the bonus, and
that, as civil fruits of said land, said bonus was assigned by Mariano Lacson Ledesma on March 7,
1930, by virtue of the document Exhibit 9 of said intervening institution, which admitted in its brief
that "if the bonus in question is not civil fruits or rent which became subject to the mortgage in favor of
the Philippine National Bank when Mariano Lacson Ledesma's personal obligation fell due, the
assignment of March 7, 1930 (Exhibit 9, P.N.B.), is null and void, not because it is fraudulent, for there
was no intent of fraud in executing the deed, but that the cause or consideration of the assignment was
erroneous, for it was based upon the proposition that the bonus was civil fruits of the land mortgaged to
the Philippine National Bank." (P. 31.)
The fundamental question, then, submitted to our consideration is whether or not the bonus in question
is civil fruits.
This is how the bonus came to be granted: On December 22, 1923, the Talisay-Silay Milling Co., Inc.,
was indebted to the Philippine National Bank. To secure the payment of its debt, it succeeded in
inducing its planters, among whom was Mariano Lacson Ledesma, to mortgage their land to the
creditor bank. And in order to compensate those planters for the risk they were running with their
property under the mortgage, the aforesaid central, by a resolution passed on that same date, i.e.,
December 22, 1923, undertook to credit the owners of the plantation thus mortgaged every year with a
sum equal to two per centum of the debt secured according to yearly balance, the payment of the bonus
being made at once, or in part from time to time, as soon as the central became free of its obligations to
the aforesaid bank, and of those contracted by virtue of the contract of supervision, and had funds
which might be so used, or as soon as it obtained from said bank authority to make such payment.
(Exhibits 5, 6; P.N.B.)
Article 355 of the Civil Code considers three things as civil fruits: First, the rents of buildings; second,
the proceeds from leases of lands; and, third, the income from perpetual or life annuities, or other
similar sources of revenue. It may be noted that according to the context of the law, the phrase "u otras
analogas" refers only to rent or income, for the adjectives "otras" and "analogas" agree with the noun
"rentas," as do also the other adjectives "perpetuas" and "vitalicias." That is why we say that by "civil
fruits" the Civil Code understands one of three and only three things, to wit: the rent of a building, the
rent of land, and certain kinds of income.
As the bonus in question is not rent of a building or of land, the only meaning of "civil fruits" left to be
examined is that of "income."
Assuming that in broad juridical sense of the word "income" it might be said that the bonus in question
is "income" under article 355 of the Civil Code, it is obvious to inquire whether it is derived from the
land mortgaged by Mariano Lacson Ledesma to the appellant bank for the benefit of the central; for it
is not obtained from that land but from something else, it is not civil fruits of that land, and the bank's
contention is untenable.
It is to be noted that the said bonus bears no immediate, but only a remote accidental relation to the
land mentioned, having been granted as compensation for the risk of having subjected one's land to a
lien in favor of the bank, for the benefit of the entity granting said bonus. If this bonus be income or
civil fruits of anything, it is income arising from said risk, or, if one chooses, from Mariano Lacson
Ledesma's generosity in facing the danger for the protection of the central, but certainly it is not civil
fruits or income from the mortgaged property, which, as far as this case is concerned, has nothing to do
with it. Hence, the amount of the bonus, according to the resolution of the central granting it, is not
based upon the value, importance or any other circumstance of the mortgaged property, but upon the
total value of the debt thereby secured, according to the annual balance, which is something quite
distinct from and independent of the property referred to.
Finding no merit in this appeal, the judgment appealed from is affirmed, without express finding as to
costs. So ordered.
Johnson, Street, Malcolm, Villamor, Ostrand, Villa-Real, and Imperial, JJ., concur
EN BANC
G.R. No. L-30240 August 23, 1929
AQUILINA TACAS, ET AL., Plaintiffs-Appellees, v. EVARISTO TOBON, Defendant-Appellant.
Simeon Ramos, Benito Soliven and J. Belmonte for the appellant.
Vicente Paz for appellee.
VILLAMOR, J.:
This is an action to recover from the defendant the ownership and possession of three parcels of land
described in the sketch attached to the complaint, together with the fruits collected by him during the
time he was in possession of said land that is, since January, 1912, it being alleged that the defendant
unlawfully took said parcels upon the death of Francisco Dumadag, predecessor in interest of the
plaintiffs; and that he remained in possession, enjoying the fruits to the value of P700 annually. chanrobl esvirtualawlibrary chanrobles virtual law library
In his answer the defendant alleges that he is the owner of said lands, having purchased from one
Exequiel or Gil Tacas, deceased, about fifteen years before the amended answer dated December 5,
1924.chanroblesvirtualawlibrary chanrobl es virtual law library
At the trial the parties adduced their respective evidence, and thereafter the trial court declared it
sufficiently proven by a preponderance of the evidence that the three parcels of land under discussion,
were parts of an estate belonging to Francisco Dumadag, whose title is a possessory information
recorded in the registry of deeds of Ilocos Sur, having inherited them from his parents (Exhibit H); that
during his lifetime, said Francisco Dumadag was in possession of the land as owner from many years,
until his death on November 17, 1911, enjoying its fruits, consisting in rice, corn, tobacco, and
vegetables; that said Francisco Dumadag had filed a declaration for tax purposes in his own name; that
the land tax had been paid by Francisco Dumadag during the years 1908 and 1911, and in his name in
the years from 1912 to 1914 (Exhibits I to P); that in January, 1912, during the season for planting
tobacco immediately following the death of Francisco Dumadag, Evaristo Tobon took possession of the
three parcels of land in question planting them with tobacco; that from 1912 up to the present, the
defendant Evaristo Tobon has been collecting the fruits therefrom, consisting of 300 sheaves of rice and
300 manos of first, second, and third-class tobacco each year, at the approximate rate of P0.30 for each
sheaf of rice, and P 3 for each mano of first-class tobacco, P 2.50 for second-class tobacco, and P 2 for
third-class tobacco. There is no evidence of record regarding the amount and price of the corn collected
by the defendant. And by virtue thereof, the trial court declared the plaintiffs to be the absolute owners
of the three parcels of land in litigation, and ordered the defendant Evaristo Tobon to deliver said
parcels of land to the plaintiffs, together with the fruits collected each year since 1912 until the
complete termination of this case, and in default thereof, to pay to said plaintiffs the sum of P 11,040,
which is the total value of the rice and tobacco from 1912 to 1927, at P 0.30 per sheaf of rice, and P 2
per mano of tobacco. From this judgment, the defendant duly appealed in time, prosecuting his appeal
to this court by the proper bill of exceptions. chanroblesvirtualawlibrary chanrobl es virtual law library
The appellant had made several assignments of error. In the first place, he contends that the identity of
the pieces of land in litigation has not been established. We find no merit in this contention. It appears
from the allegations of the complaint and the answer, that the case refers to the lands held by defendant
and alleged by the latter to have been purchased from one Exequiel or Gil Tacas, brother to the plaintiff
Aquilina Tacas. chanroblesvirtualawlibrary chanrobl es virtual law library
With regard to the probatory value of the documents presented by the parties, to wit, Exhibit H of the
plaintiffs, and Exhibits 1 and 2 of the defendant, it is well to note that Exhibit H is a possessory
information record duly approved on March 22, 1895 and inscribed in the registry of deeds of Ilocos
Sur on November 4, 1917 in favor of Francisco Dumadag, covering some land situated in the sitio of
Sisin, municipality of Magsingal, Ilocos Sur. chanrobl esvirtualawlibrary chanrobles virtual law library
On the other hand, Exhibit 1 of the defendant is an instrument executed on January 17, 1905 whereby
one Exequiel or Gil Tacas sold three parcels of farm land in the place called Sisin to Evaristo Tobon for
P 300 conan. And Exhibit 2 of the same defendant is another instrument executed on May 15, 1909
from which it appears that Francisco Dumadag and his brother-in-law, Gil Tacas, agreed that the three
parcels of land belonging to the latter, together with the two parcels of the former in Anteng, Barrio of
Carisquis, would be put in Dumadag's name in the possessory proceedings. chanrobl esvirtualawlibrary chanrobles virtual law library
The court below made a detailed analysis of the signature of Ramon G. Tolentino who, as justice of the
peace, signed the ratification of the document Exhibit 1, comparing it with the unquestioned signatures
of the same person, appearing in Exhibit 2, and concludes that the instrument Exhibit 1 is false. chanrobl esvirtualawlibrary chanrobles virtual law library
It is unnecessary to descend to the discussion of the characteristics of Ramon G. Tolentino's signature,

he being the justice of the peace who ratified the document Exhibit 1, for, even granting that said
instrument is genuine, it appears that Gil or Exequiel Tacas could not validly convey the lands in
question to the defendant Evaristo Tobon, inasmuch as according to the possessory information, said
lands belong to and were in possession of Francisco Dumadag even before 1895, until his death, which
took place in November, 1911. chanroblesvirtualawlibrary chanrobl es virtual law library
The document Exhibit 2 argues nothing against our conclusion, for it is a contradiction to hold that in
1909 Francisco Dumadag agreed with his brother-in-law, Exequiel Tacas, that the three parcels of land
belonging to the latter should be included in the former's possessory proceeding, considering that the
latter had already been approved by this order of March 22, 1895. In the ordinary course of events, if
such an agreement had already been entered into, it should have been at the time of the institution of
the possessory proceeding. Dumadag did not know how to sign his name, and besides, no one had
identified said document, Exhibit 2. chanrobl esvirtualawlibrary chanrobles virtual law library
There is another reason why Exhibit 1 cannot prevail over Exhibit H, namely, that supposing that a sale
was made in favor of the defendant in 1905, it was only in 1909 that Exhibit 2 was drawn in order to
legalize the alleged transfer. Besides, despite the transfer of the lands in favor of the defendant having
taken place in 1905, according to Exhibit 1, the defendant did not enter upon the possession of said
lands until after the death of the original owner Francisco Dumadag, which occurred in November,
1911.chanrobl esvirtualawlibrary chanrobles virtual law library
Another error alleged by the appellant is that the trial court ordered him to deliver to the plaintiffs the
fruits of the land from 1912 to 1927, or to pay their value, P 11,040. chanrobl esvirtualawlibrary chanrobles virtual law library
The complaint in this case was filed on February 1, 1918. The bill of exceptions does not show when
the defendant was summoned but it does not show that the letter docketed his answer to the complaint
on April 11, 1918. chanroblesvirtualawlibrary chanrobl es virtual law library
Evidence being lacking to show that when he entered upon the possession of the lands in question, he
was aware of any flaw in his title or mode of acquiring it, he is deemed a possessor in good faith
(article 433, Civil Code), and in accordance with article 451 of the Civil Code, the fruits of said lands
were his, until he was summoned upon the complaint, or until he has filed his answer thereto. (Saul vs.
Hawkins, 1 Phil., 275; Javier vs. Javier, 6 Phil., 493; Cleto vs. Salvador, 11 Phil., 416; Valencia vs.
Jimenez and Fuster, 11 Phil., 492; Araujo vs. Celis, 16 Phil., 329; Alcala and Alviedo vs. Hernandez
and Pacleb, 32 Phil., 628; Tolentino vs. Vitug, 39 Phil., 126; Aquino vs. Ta�edo, 39 Phil., 517; Rivera
vs. Roman Catholic Archbishop of Manila, 40 Phil., 717; and Velasquez vs. Teodoro, 46 Phil., 757.) chanrobles virtual law library
Art 451 of the same Code provides:

Art. 451. Fruits received by one in possession in good faith before possession is legally
interrupted become his own. chanroblesvirtualawlibrary chanrobl es virtual law library
Natural and industrial fruits are deemed to have been received as soon as they are gathered
and harvested. chanrobl esvirtualawlibrary chanrobles virtual law library
Civil fruits are deemed to accrue from day to day, and belong to the possessor in good faith
in this proportion.
In his comments upon this article of the Civil Code, Manresa, among other things, says:
But to every possessor in good faith there comes a time when he is considered a possessor
in bad faith. When the owner or possessor with a better right comes along, where he
becomes aware that what he had taken for granted is at least doubtful, and when he learns
the grounds in support of the adverse contention, good faith ceases. The possessor may still
believe that his right is more secure, because we resign ourselves with difficulty to the sight
of our vanishing hopes; but when the final judgment of the court deprives him of the
possession, all illusion necessarily disappears. Although he may not have been convinced of
it before, the possessor becomes aware that his possession is unlawful from the time he
learns of the complaint, from the time he is summoned to the trial. It is at this time that his
possession is interrupted, according to article 1945, and that he ceases to receive the fruits,
according to the first paragraph of article 451. The ruling of the court retroacts to that time;
but shall good faith be deemed to cease then ? Although there is a great difference between
requiring the possessor in good faith to return the fruits he received from the time when his
possession was legally interrupted, and considering him a possessor in bad faith for all legal
purposes from that time, the law had to establish a definite rule in the matter, which is none
other than that deducible from a combination of articles 452, 1945 and 435. Whether or not
the defendant be a possessor in bad faith, for there is no doubt that he can be, and the law
makes no attempt to deny it, from the service of judicial summons, there exists an act that
this possessor knows that his right is not secure, that someone disputes it, and that he may
yet lose it; and if the court holds that restitution be made, that time determines all the legal
consequences of the interruption, the time when the possession in good faith ceased to be so
before the law. chanroblesvirtualawlibrary chanrobl es virtual law library
The decisions of April 27, 1877, April 22, May 10 and June 13, 1878, February 11, and
October 5, 1885, March 17, 1891, March 4, and May 17, 1893, held that good faith ceased
when the answer to the complaint was filed, taking this doctrine from the Partidas. By
analogy, the service of the summons, doubtless more certain and more difficult to evade, is
now admitted, according to articles 451 and 1945 of the Code, and it is in this sense that the
decisions of the Supreme Court of January 28, 1896, December 7, 1899, November 23,
1900, and July 11, 1903, must be understood, all of them holding that even the possessor in
good faith must return the fruits received from the time the answer to the complaint was
filed, that is, from the time he became aware that he was in undue possession. (Manresa,
Commentaries on the Spanish Civil Code, vol. 4, pp. 270, 271.)
By virtue of the foregoing, the judgment appealed from must be, as it is hereby, affirmed in so far as it
holds that the plaintiffs are the owners of the lands in question, and that the defendant is bound to
return to them the former. chanrobl esvirtualawlibrary chanrobles virtual law library
And with regard to the award of damages, said judgment is hereby modified so that the defendant is
only bound to return to the plaintiffs the fruits received from April, 1918 to 1927, that is, 300 sheaves
of rice and 300 manos of tobacco, with the right to deduct the expenses of planting and harvesting (art.
365 of the Civil Code), which shall be determined by the trial court, after hearing both parties. chanroblesvirtualawlibrary chanrobl es virtual law library
The appellant shall pay the costs of this trial. So ordered.

SUPREME COURT
Manila
SECOND DIVISION
G.R. Nos. 99338-40 February 1, 1993
HEIRS OF NICOLAS Y. OROSA, (Represented herein by their Attorney-in-Fact, RICARDO Q. OROSA), petitioners,
vs.
THE HON. EUTROPIO MIGRINO, Presiding Judge, Regional Trial Court of Pasig, M.M. Branch 151 and GOLDENROD, INC., respondents.
Romero, Lagman, Valdecantos & Arreza Law Offices for petitioner
Eliseo M. Cruz for Heirs of F. Alma Sr.
Adoracion J. Mirandilla for Goldenrod, Inc.
FELICIANO, J.:
In Maria Mayug Vda. de Cailles v. Dominador Mayuga, et. al.,1 the Court affirmed the decision of the Court of Appeals in C.A.-G.R. No. 31887-R, confirming
ownership over a fifty-three (53) hectare parcel of land located in Las Piñas, Rizal, more particularly referred to as Lot 9 Psu-11411 Amd-2, in favor of one
Dominador Mayuga. The Court also extended the benefit of such confirmation to the latter's successor-in-interest, the late Nicolas Orosa.
After the case was remanded to Branch 151 of theRegional Trial Court, Pasig, where it was originally docketed in 1958 as Land Registration Case ("LRC") No.
2839, the heirs of Nicolas Orosa (petitioners herein) moved for execution of judgment. This motion was granted by the lower court in its Order dated 25 October
1989, directing the Land Registration Authority ("LRA") to submit the property's amended technical description for approval.2
However, the LRA did not comply with said order because, among others, its records indicated that the property had previously been decreed in favor of one
Jose T. Velasquez, to whom was issued Original Certificate of Title No. 6122.3
On 10 September 1990, Goldenrod, Inc. ("Goldenrod") filed a motion for leave to intervene in the execution proceeding, alleging an interest in the property which
is the subject matter of LRC No. 2839.4
Petitioners opposed Goldenrod's motion, without success. The lower court permitted Goldenrod to file its pleading in intervention through its Order dated 7
December 1990. Petitioners' motion for reconsideration therefrom was likewise denied in an Order dated 11 April 1991.5
Hence this Petition for Certiorari and Prohibition.
After reviewing the comment required of private respondent Goldenrod, the Court resolved to give due course to the petition and to issue a temporary restraining
order to enjoin the public respondent lower court from taking further action in LRC No. 2839. Upon filing of petitioner's reply to said comment, the case was
submitted for decision.
Two (2) ultimate issues are posed for the Court's consideration in this case: 1) whether Goldenrod has shown in its pleadings in intervention a sufficient legal
interest in the land which is the subject matter of LRC No. 2839; and 2) whether the legal interest actually shown by Goldenrod over the land can be protected in
a Proceeding separate from LRC No. 2839.
In respect of the first issue, the Court must observe that the lower court had evaded resolving this matter before permitting Goldenrod's intervention:
The Orosa heirs also contend that the purported intervenor failed to establish its alleged legal interest in these proceedings to the subject
parcel of land. Precisely, this case has to be set for hearing to enable Goldenrod to prove its claim to the land in question . 6 (Emphasis
supplied).
As the Court understands it, Goldenrod attempts to augment the ruling of the lower court by showing in its pleadings in intervention, as well as in its comment
before the Court, the existence of a legal interest in the land sufficient to justify its intervention.
Goldenrod claims that in 1977, during the pendency of this case before the Court in G.R. No. L-30859, Delta Motors Corporation (Delta) acquired for value the
contingent rights of Nicolas Orosa over the property, as well as the conflicting claims thereto of one Jose Velasquez. 7 In 1980, the land registration court trying
Jose Velasquez' claims in LRC No. N-5416 excluded therefrom the land referred to as Lot 9 Psu-11411 Amd-2 in G.R. No. L-30859.8 Meanwhile, Delta somehow
managed to obtain transfer certificates of titles over the land and sold this acquisition to Goldenrod in 1987.9 The latter then succeeded in obtaining issuance in
its favor of Transfer Certificates of Title Nos. 4893 and 4901, whose technical descriptions overlapped "big portions" of the land referred to as Lot 9 Psu-11411
Amd-2 in G.R. No. L-30859.10 In February 1989, Goldenrod sold the land covered by said transfer certificates of title to a consortium composed of Fil Estate
Management Inc., Arturo Y. Dy, Megatop Realty Development Inc., Peaksun Enterprises and Export Corporation, and Elena D. Jao ("Consortium"). 11 The
contract of sale contained an undertaking on Goldenrod's part to "defend the title of the VENDEES to the property against claims of any third person
whatsoever."12 It is on the basis of this stipulation that Goldenrod seeks to intervene in the execution Proceedings of LRC
No. 2839.
Taking Goldenrod's own admissions at their face value, it is quite apparent that whatever direct and actual legal interest it may have had over the land had been
disposed of by it for value in favor of the consortium in 1989 and that whatever residual legal interest in the property can be premised on Goldenrod's contractual
undertaking, actually an express warranty against eviction, is expectant or contingent in nature. Presently, Goldenrod has no legal interest in the property and its
warranty can only be enforced by the consortium if the latter is dispossessed of the land by virtue of a proper action instituted by the Orosa heirs as registered
owners thereof. 13
But, the legal interest which entitles a person to intervene in a suit must be actual and material, direct and immediate. A party seeking to intervene in a pending
case must show that he will either gain or lose by the direct legal operation and effect of a judgment. 14
In the present case, Goldenrod has failed to meet this criteria and the lower court gravely abused its discretion in permitting intervention after having overlooked
this matter.
One of the other reasons invoked by the public respondent in permitting intervention at the execution stage of LRC No. 2839 follows:
The Orosa heirs contend that intervention can not be allowed at this stage of the proceedings in this case. They forget that in a land
registration case even when the decree has been issued, the case can be re-opened within (1) year from issuance of said decree to
enable any prejudiced party to present evidence in support of his claim. 15
It appears that the lower court cited Section 32 of P.D. 1529.16 permitting the reopening of a decree of registration within one year after its entry, if the same was
procured through actual fraud and a person is thereby deprived of any interest over the affected land.
The difficulty with this view is that, as earlier noted, Goldenrod had not shown any actual interest in the land of which it could have been deprived, on the basis of
an actual or extrinsic fraud perpetrated by petitioners in the course of procuring their decree of confirmation. Goldenrod had merely alleged, rather ambiguously,
a cause of action against petitioners in that they "suddenly breached and disregarded the 1977 Agreement" (the sale between Nicolas Orosa and Delta). 17 Even
the public respondent made no finding that Goldenrod was the apparent victim of an actual fraud. Hence its invocation of the remedy provided in Section 32 of
P.D. 1529 was bereft of basis.
The action of the lower court in permitting Goldenrod's intervention at this late stage of the proceedings in LRC No. 2839 is also flawed by another, more serious
defect. It must be remembered that upon entry of the Court's judgment in G.R. No. L-30859, the confirmation of a registerable title, and the consequent
adjudication of ownership over Lot 9 Psu-11411 Amd-2, in favor of petitioners' predecessors-in-interest became a final and settled matter. 18 Such entry of
judgment operated, ipso facto to divest the lower court of its general jurisdiction to act in LRC No. 2839, save for the limited matter of supervising the process of
executing the Court's decision. The public respondent simply cannot, as it appears to be trying to do in this case, interpret or reverse the implication of this
Court's ruling that petitioners are entitled to a Torrens title over Lot 9 Psu-11411 Amd-2, just because Goldenrod seeks to recall execution by making a
supervening allegation that petitioners are no longer the owners thereof. 19
Goldenrod attempted to broaden the jurisdiction of the lower court, so as to enable the latter to take cognizance of its motion for intervention, by invoking the
Court's ruling in Suson v. Court of Appeals: 20
It cannot be overlooked that the hearing before the respondent court on the motion for demolition (emphasis supplied by the Court) was in
connection with the implementation or execution of a final judgment in Civil Case No. R-14351. Petitioner was precisely given an
opportunity to intervene in order to guide the court in disposing of private respondent's motion for demolition in the light of petitioner's
claim that his house was erected on the disputed lot (emphasis supplied by the Court), and yet, he was not an original party to the action.
Petitioner was thus given a chance to raise and prove his claim of ownership over a part of the lot in question (emphasis supplied by the
Court), but he ignored such opportunity. He cannot now complain that he was denied due process. "A case in which an execution has
been issued is regarded as still pending so that all proceedings on the execution are proceedings in the suit. There is no question that the
court which rendered the judgment has a general supervisory control over its process of execution, and this power carries with it the right
to determine every question of fact and law which may be involved in the execution." (Emphasis supplied by Goldenrod).
But it is evident that Goldenrod's reliance upon the Suson case is misplaced because the intervenor therein had a direct and actual legal interest in the property
sought to be recovered by the prevailing party at execution. Consequently, the executing court thereat had to accord the intervenor a full hearing on whatever
claim he might seek to make, disregarding the rules of procedure limiting intervention to the period before or during a trial of a case, 21 in the interest of observing
due process as an aspect of substantial justice.
Here, these considerations do not obtain and the lower court, in permitting intervention, caused needless complication, expense and delay in the execution
proceedings of LRC No-2839, to the prejudice of petitioners' right to a speedy disposition thereof.
Turning to the second issue posed in this case, given the remote and contingent nature of Goldenrod's legal interest over the real property which is the subject
matter of LRC No. 2839, the Court believes that Goldenrod can and should protect such interest in a separate proceeding.
The public respondent invoked the following to support its view that the execution stage of the land registration proceeding was the proper venue within which
Goldenrod can protect its interest in the property.22
Movants also contend that the granting of leave to intervene will unduly delay the disposition of this case. The adjudication of Goldenrod,
Inc.'s interest in the subject parcel of land in the instant case would be for the benefit not only of Goldenrod, Inc . itself, (but) also of the
Orosa heirs, because thereafter there will be no cloud in the title of the party to whom the ownership of said parcel of land may be
adjudicated.
Finally, the movants contend that the intervenor's interest can be protected in a separate proceedings ( sic). The Court doubts if this is true.
In any event, as above adverted to, everybody will be benefited by this Court adjudicating in this case the claim of the intervenor .
(Emphasis supplied).
It would appear that the public respondent premised its ruling solely on the belief that a cloud had descended on the title over the real property which is the
subject matter of LRC No. 2839 and that this cloud had to be removed.
This justification does not persuade. Under Article 447 of the Civil Code,23 the plaintiff in an action for quieting of title must at least have equitable title to or an
interest in the real property which is the subject matter of the action. Evidence of Goldenrod's capacity on this point is inexistent because Goldenrod is not
asserting a claim to the property.24 On the contrary, it had admitted having alienated its interest in the land referred to as Lot 9 Psu-11411 Amd-2 to the
consortium. Thus, Goldenrod is not an interested party capable of instituting an action to quiet title, either by intervening in LRC No. 2839 or by instituting a
separate action. The right to commence such a separate action pertains to its Vendee, if the latter wishes to defend the validity of its 1987 purchase from
Golderrod and to hold the Vendor Goldenrod liable on its warranty of title.
WHEREFORE. the Petition for Certiorari and Prohibition is hereby GRANTED. The Orders of the public respondent dated 7 December 1990 and 11 April 1991,
being issued with grave abuse of discretion amounting to excess of jurisdiction, are hereby ANNULLED and SET ASIDE. The public respondent's Order dated 25
October 1989 is hereby REINSTATED and the Temporary Restraining Order issued by the Court in this case is correspondingly LIFTED. In view of the long
pendency of LRC No. 2839, the public respondent is hereby enjoined to terminate the proceeding as soon as possible by completing the execution of the Court's
Decision in G.R. No. L-30859 with all deliberate speed. This Decision is immediately executory. No costs.
SO ORDERED.
Narvasa, C.J., Regalado, Nocon and Campos, Jr., JJ., concur.
# Footnotes
1 G.R. No. L-30859, 20 February 1989, 170 SCRA 347.
2 Rollo, pp. 39-40.
3 Id., 144-146.
4 Id., p. 41.
5 Id., pp. 26-28 and 43.
6 Order, pp. 1-2; Rollo, pp. 26-27.
7 Rollo, pp. 117-118 and 157.
8 Id., pp. 79-80, 83 and 87-88.
9 Id., p. 118.
10 Id., pp. 118-119, and 138.
11 Id., p. 119.
12 Rollo, pp. 119 and 195. The contractual stipulations relevant to Goldenrod's motion in intervention appear to be the following:
6. That the VENDOR shall defend the title of the VENDEES to the property against claims of any third persons whatsoever and that in the
event of suits filed concerning the ownership of the property, the VENDEES shall have the right to suspend the payment of any amount
provided herein, and any and all period (sic) under this agreement shall be deemed automatically suspended and shall only commence to
run upon final settlement of said suits or claims, and if by reason of said suits the VENDEES is compelled to litigate all expenses for the
same and the damages occasioned thereby shall be for the VENDOR's account.

SUPREME COURT
Manila
EN BANC
G.R. No. L-21783 March 25, 1970
PACIFIC FARMS, INC., plaintiff-appellee,

vs.
SIMPLICIO G. ESGUERRA, ET AL., defendants, CARRIED LUMBER COMPANY, defendant-appellant.
RESOLUTION
CASTRO, J.:
Subject of this resolution is a motion filed by the plaintiff-appellee Pacific Farms, Inc. for reconsideration of our decision of November 29, 1969.
Briefly stated, the plaintiff-appellee's first argument is that it should not have been found liable for the payment of the unpaid portion of the procurement price of
the lumber and construction materials furnished by the appellant to its predecessor-in-interest, the Insular Farms, Inc., because it was a purchaser for value and
in good faith of the six buildings in question. The flaw in this argument lies in its assumption that the reason we held the appellee liable is that it was not a buyer
in good faith and for value, which is incorrect. When we applied article 447 of the Civil Code by analogy to this case, we did so on the assumption that the
plaintiff-appellee was in good faith. Thus, after quoting said article, we stated:
Although it does not appear from the records of this case that the land upon which the six buildings were built is owned by the appellee,
nevertheless, that the appellee claims that it owns the six buildings constructed out of the lumber and construction materials furnished by
the appellant, is indubitable. Therefore, applying article 447 by analogy, we perforce consider the buildings as the principal and the lumber
and construction materials that went into their construction as the accessory. Thus the appellee, if it does own the six buildings, must bear
the obligation to pay for the values of the said materials; the appellant — which apparently has no desire to remove the materials, and,
even if it were minded to do so, cannot remove them without necessarily damaging the buildings — has the corresponding right to recover
the value of the unpaid lumber and construction materials. (Decision, pp. 4-5; emphasis supplied)
Indeed, because we assumed that the appellee was in good faith, we did not pronounce it liable for the reparation of damages but only for the payment of the
unpaid price of the lumber and construction materials due to the appellant as unpaid furnisher thereof. Based on this same assumption, we likewise held that the
appellant has no right to remove the materials but only to recovery the value of the unpaid lumber and construction materials. Thus, since the appellee benefited
from the accession, i.e., from the lumber and materials that went into the construction of the six buildings, it should shoulder the compensation due to the
appellant as unpaid furnisher of materials, pursuant to the rule we cited in our decision that compensation should be borne by the person who has been
benefited by the accession.
Under the overall environmental circumstances of the case, considering that although the appellee was in a better position to protect its own interest it took no
action to intervene in the suit filed by the appellant against the Insular Farms, Inc. or to hold the latter to account therefor, notwithstanding that it concededly
acquired knowledge, after its purchase from the Insular Farms, Inc., on March 21, 1958 of the six buildings in question; of the filing and pendency of the
appellant's suit for payment of the unpaid balance of the price of the lumber and construction materials delivered to the Insular Farms, Inc. and used in the
construction of the said buildings, the Court believes that its decision upholding the sheriff's sale of the six buildings but granting the appellee the option of
redeeming the same by paying to the appellant the unpaid balance with interest owing to it as supplier of the construction materials, is completely in consonance
with justice and equity.
ACCORDINGLY, the plaintiff-appellee's motion for reconsideration dated December 12, 1969 is hereby denied.
EN BANC
G.R. No. L-44606 November 28, 1938
VICENTE STO. DOMINGO BERNARDO, Plaintiff-Appellant, vs. CATALINO BATACLAN,
Defendant-Appellant.
TORIBIO TEODORO, purchaser-appellee.
Pedro de Leon for plaintiff-appellant.
Angel H. Mojica and Francisco Lavides for defendant appellant.
Jose Y. Garde for appellee.
chanrobles virtual law library
LAUREL, J.: chanrobles virtual law library
This is an appeal taken by both the plaintiff and the defendant from the order of September 26, 1935,
hereinabove referred to, of the Court of First Instance of Cavite in Civil Case No. 2428.chanrobl esvirtualawlibrary chanrobles virtual law library
There is no controversy as to the facts. By a contract of sale executed from Pastor Samonte and others
ownership of a parcel of land of about 90 hectares situated in sitio Balayunan, Silang, Cavite. To secure
possession of the land from the vendors the said plaintiff, on July 20, 1929, instituted Civil Case No.
1935 in the Court of First Instance of Cavite. The trial court found for the plaintiff in a decision which
was affirmed by this Supreme Court on appeal (G.R. No. 33017). 1 When plaintiff entered upon the
premises, however, he found the defendant herein, Catalino Bataclan, who appears to have been
authorized by former owners, as far back as 1922, to clear the land and make improvements thereon. As
Bataclan was not a party in Case No. 1935, plaintiff, on June 11, 1931, instituted against him, in the
Court of First Instance of Cavite, Civil Case No. 2428. In this case, plaintiff was declared owner but the
defendant was held to be a possessor in good faith, entitled to reimbursement in the total sum of
P1,642, for work done and improvements made. The dispositive part of the decision reads:
Por las consideraciones expuestas, se declara al demandante Vicente Santo Domingo
Bernardo dueño con derecho a la posesion del terreno que se describe en la demanda, y al
demandado Catalino Bataclan con derecho a que del demandante le pague la suma de
P1,642 por gastos utiles hechos de buena fe en el terreno, y por el cerco y ponos de coco y
abaca existentes en el mismo, y con derecho, ademas a retener la posesion del terreno hasta
que se le pague dicha cantidad. Al demandante puede optar, en el plazo de treinta dias, a
partir de la fecha en que fuere notificado de la presente, por pagar esa suma al demandado,
haciendo asi suyos el cerco y todas las plantaciones existentes en el terreno, u obligar al
demandado a pagarle el precio terreno, a razon de trescientos pesos la hectarea. En el caso
de que el demandante optara por que el demandado le pagara el precio del terreno, el
demandado efectuara el pago en el plazo convenientes por las partes o que sera fijado por el
Juzgado. Sin costas.
Both parties appealed to this court (G. R. No. 37319). 2 The decision appealed from was modified by
allowing the defendant to recover compensation amounting to P2,212 and by reducing the price at
which the plaintiff could require the defendant to purchase the land in question from P300 to P200 per
hectare. Plaintiff was given by this court 30 days from the date when the decision became final within
which to exercise his option, either to sell the land to the defendant or to buy the improvements from
him. On January 9, 1934, the plaintiff manifested to the lower court his desire "to require the defendant
to pay him the value of the land at the rate of P200 per hectare or a total price of P18,000 for the whole
tract of land." The defendant informed the lower court that he was unable to pay the land and, on
January 24, 1934, an order was issued giving the plaintiff 30 days within which to pay the defendant
the sum of P2,212 stating that, in the event of failure to make such payment, the land would be ordered
sold at public auction " Para hacer pago al demandante de la suma de P2,212 y el remanente despues
de deducidos los gastos legales de la venta en publica subasta sera entregado al demandante." On
February 21, 1934, plaintiff moved to reconsider the foregoing order so that he would have preference
over the defendant in the order of payment. The motion was denied on March 1, 1934 but on March 16
following the court below, motu proprio modified its order of January 24, " en el sentido de que el
demandante tiene derecho preferente al importe del terreno no se vendiere en publica subasta, a razon
de P200 por hectares y el remanente, si acaso lo hubiere se entregara al demandado en pago de la
cantidad de P2,212 por la limpieza del terreno y las mejoras introducidas en el mismo por el citado
demandado." On April 24, 1934, the court below, at the instance of the plaintiff and without objection
on the part of the defendant, ordered the sale of the land in question at public auction. The land was
sold on April 5, 1935 to Toribio Teodoro, the highest bidder, for P8,000. In the certificate of sale issued
to said purchaser on the very day of sale, it was stated that the period of redemption of the land sold
was to expire on April 5, 1936. Upon petition of Toribio Teodoro the court below ordered the provincial
sheriff to issue another certificate not qualified by any equity of redemption. This was complied with
by the sheriff on July 30, 1935. On September 18, 1935, Teodoro moved that he be placed in possession
of the land purchased by him. The motion was granted by order of September 26, 1935, the dispositive
part of which is as follows:
Por tanto, se ordena al Sheriff Provincial de Cavite ponga a Toribio Teodoro en posesion
del terreno comprado por el en subasta publica y por el cual se le expidio certificado de
venta definitiva, reservando al demandado su derecho de ejercitar una accion ordinaria para
reclamar del demandante la cantidad de P2,212 a que tiene derecho por la limpieza y
mejoras del terreno y cuya suma, en justicia y equidad, debe ser descontada y deducida de
la suma de P8,000 que ya ha recibido el demandante.
The Civil Code confirms certain time-honored principles of the law of property. One of these is the
principle of accession whereby the owner of property acquires not only that which it produces but that
which is united to it either naturally or artificially. (Art. 353.) Whatever is built, planted or sown on the
land of another, and the improvements or repairs made thereon, belong to the owner of the land (art.
358). Where, however, the planter, builder, or sower has acted in good faith, a conflict of rights arises
between the owners and it becomes necessary to protect the owner of the improvements without
causing injustice to the owner of the land. In view of the impracticability of creating what Manresa
calls a state of "forced coownership" (vol. 3, 4th ed., p. 213), the law has provided a just and equitable
solution by giving the owner of the land the option to acquire the improvements after payment of the
proper indemnity or to oblige the builder or planter to pay for the land and the sower to pay the proper
rent (art. 361). It is the owner of the land who is allowed to exercise the option because his right is
older and because, by the principle of accession, he is entitled to the ownership of the accessory thing
(3 Manresa, 4th ed., p. 213). In the case before us, the plaintiff, as owner of the land, chose to require
the defendant, as owner of the improvements, to pay for the land. chanrobl esvirtualawlibrary chanrobles virtual law library
The defendant states that he is a possessor in good faith and that the amount of P2,212 to which he is
entitled has not yet been paid to him. Therefore, he says, he has a right to retain the land in accordance
with the provisions of article 453 of the Civil Code. We do not doubt the validity of the premises stated.
" Considera la ley tan saarada y legitima la deuda, que, hasta que sea pagada, no consiente que la
cosa se restituya all vencedor." (4 Manresa, 4th ed, p., 304.) We find, however, that the defendant has
lost his right of retention. In obedience to the decision of this court in G.R. No. 37319, the plaintiff
expressed his desire to require the defendant to pay for the value of the land. The said defendant could
have become owner of both land and improvements and continued in possession thereof. But he said he
could not pay and the land was sold at public auction to Toribio Teodoro. The law, as we have already
said, requires no more than that the owner of the land should choose between indemnifying the owner
of the improvements or requiring the latter to pay for the land. When he failed to pay for the land, the
defendant herein lost his right of retention.
chanrobl esvirtualawlibrary chanrobles virtual law library
The sale at public auction having been asked by the plaintiff himself (p. 22, bill of exceptions) and the
purchase price of P8,000 received by him from Toribio Teodoro, we find no reason to justify a rapture
of the situation thus created between them, the defendant-appellant not being entitled, after all, to
recover from the plaintiff the sum of P2,212. chanrobl esvirtualawlibrary chanrobles virtual law library
The judgment of the lower court is accordingly modified by eliminating therefrom the reservation made
in favor of the defendant-appellant to recover from the plaintiff the sum of P2,212. In all the respects,
the same is affirmed, without pronouncement regarding costs. So ordered. chanroblesvirtualawlibrary chanrobl es virtual law library
Avanceña, C.J., Villa-Real, Imperial and Diaz, JJ., concur.
Endnotes:
1 Promulgated December 6, 1930, not reported.
2 Promulgated December 2, 1933 (59 Phil., 903).

SUPREME COURT
Manila
EN BANC
G.R. No. L-175 April 30, 1946
DAMIAN IGNACIO, FRANCISCO IGNACIO and LUIS IGNACIO, petitioners,
vs.
ELIAS HILARIO and his wife DIONISIA DRES, and FELIPE NATIVIDAD, Judge of First
Instance of Pangasinan, respondents.
Leoncio R. Esliza for petitioners.
Mauricio M. Monta for respondents.
MORAN, C.J.:
This is a petition for certiorari arising from a case in the Court of First Instance of Pangasinan between
the herein respondents Elias Hilario and his wife Dionisia Dres as plaintiffs, and the herein petitioners
Damian, Francisco and Luis, surnamed Ignacio, as defendants, concerning the ownership of a parcel of
land, partly rice-land and partly residential. After the trial of the case, the lower court, presided over by
Hon. Alfonso Felix, rendered judgment holding plaintiffs as the legal owners of the whole property but
conceding to defendants the ownership of the houses and granaries built by them on the residential
portion with the rights of a possessor in good faith, in accordance with article 361 of the Civil Code.
The dispositive part of the decision, hub of this controversy, follows:
Wherefore, judgment is hereby rendered declaring:
(1) That the plaintiffs are the owners of the whole property described in transfer certificate of
title No. 12872 (Exhibit A) issued in their name, and entitled to the possession of the same;
(2) That the defendants are entitled to hold the position of the residential lot until after they are
paid the actual market value of their houses and granaries erected thereon, unless the plaintiffs
prefer to sell them said residential lot, in which case defendants shall pay the plaintiffs the
proportionate value of said residential lot taking as a basis the price paid for the whole land
according to Exhibit B; and
(3) That upon defendant's failure to purchase the residential lot in question, said defendants
shall remove their houses and granaries after this decision becomes final and within the period
of sixty (60) days from the date that the court is informed in writing of the attitude of the parties
in this respect.
No pronouncement is made as to damages and costs.
Once this decision becomes final, the plaintiffs and defendants may appear again before this
court for the purpose of determining their respective rights under article 361 of the Civil Code,
if they cannot come to an extra-judicial settlement with regard to said rights.
Subsequently, in a motion filed in the same Court of First Instance but now presided over by the herein
respondent Judge Hon. Felipe Natividad, the plaintiffs prayed for an order of execution alleging that
since they chose neither to pay defendants for the buildings nor to sell to them the residential lot, said
defendants should be ordered to remove the structure at their own expense and to restore plaintiffs in
the possession of said lot. Defendants objected to this motion which, after hearing, was granted by
Judge Natividad. Hence, this petition by defendants praying for (a) a restraint and annulment of the
order of execution issued by Judge Natividad; (b) an order to compel plaintiffs to pay them the sum of
P2,000 for the buildings, or sell to them the residential lot for P45; or (c), a rehearing of the case for a
determination of the rights of the parties upon failure of extra-judicial settlement.
The judgment rendered by Judge Felix is founded on articles 361 and 453 of the Civil Code which are
as follows:
ART. 361. The owner of land on which anything has been built, sown or planted in good faith,
shall have the right to appropriate as his own the work, sowing or planting, after the payment of
the indemnity stated in articles 453 and 454, or to oblige the one who built or planted to pay the
price of the land, and the one who sowed, the proper rent.
ART. 453. Necessary expenses shall be refunded to every possessor; but only the possessor in
good faith may retain the thing until such expenses are made good to him.
Useful expenses shall be refunded to the possessor in good faith with the same right of
retention, the person who has defeated him in the possession having the option of refunding the
amount of the expenses or paying the increase in value which the thing may have acquired in
consequence thereof.
The owner of the building erected in good faith on a land owned by another, is entitled to retain the
possession of the land until he is paid the value of his building, under article 453. The owner of the
land, upon the other hand, has the option, under article 361, either to pay for the building or to sell his
land to the owner of the building. But he cannot, as respondents here did, refuse both to pay for the
building and to sell the land and compel the owner of the building to remove it from the land where it is
erected. He is entitled to such remotion only when, after having chosen to sell his land, the other party
fails to pay for the same. But this is not the case before us.
We hold, therefore, that the order of Judge Natividad compelling defendants-petitioners to remove their
buildings from the land belonging to plaintiffs-respondents only because the latter chose neither to pay
for such buildings not to sell the land, is null and void, for it amends substantially the judgment sought
to be executed and is, furthermore, offensive to articles 361 and 453 of the Civil Code.
There is, however, in the decision of Judge Felix a question of procedure which calls for the
clarification, to avoid uncertainty and delay in the disposition of cases. In that decision, the rights of
both parties are well defined under articles 361 and 453 of the Civil Code, but it fails to determine the
value of the buildings and of the lot where they are erected as well as the periods of time within which
the option may be exercised and payment should be made, these particulars having been left for
determination apparently after the judgment has become final. This procedure is erroneous, for after the
judgment has become final, no additions can be made thereto and nothing can be done therewith except
its execution. And execution cannot be had, the sheriff being ignorant as to how, for how much, and
within what time may the option be exercised, and certainly no authority is vested in him to settle these
matters which involve exercise of judicial discretion. Thus the judgment rendered by Judge Felix has
never become final, it having left matters to be settled for its completion in a subsequent proceeding,
matters which remained unsettled up to the time the petition is filed in the instant case.
For all the foregoing, the writ of execution issued by Judge Natividad is hereby set aside and the lower
court ordered to hold a hearing in the principal case wherein it must determine the prices of the
buildings and of the residential lot where they are erected, as well as the period of time within which
the plaintiffs-respondents may exercise their option either to pay for the buildings or to sell their land,
and, in the last instance, the period of time within which the defendants-petitioners may pay for the
land, all these periods to be counted from the date the judgment becomes executory or unappealable.
After such hearing, the court shall render a final judgment according to the evidence presented by the
parties.
The costs shall be paid by plaintiffs-respondents.
Ozaeta, Paras, Jaranilla, Feria, De Joya, Pablo, Perfecto, Hilado, Bengzon and Briones, JJ., concur.
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-57288 April 30, 1984
LEONILA SARMINETO, petitioner,
vs.
HON. ENRIQUE A. AGANA, District Judge, Court of First Instance of Rizal, Seventh
Judicial District, Branch XXVIII, Pasay City, and SPOUSES ERNESTO VALENTINO and
REBECCA LORENZO-VALENTINO, respondents.
Mercedes M. Respicio for petitioner.
Romulo R. Bobadilla for private respondents.
MELENCIO-HERRERA, J.:ñé+.£ªwph!1
This Petition for certiorari questions a March 29, 1979 Decision rendered by the then Court of
First Instance of Pasay City. The Decision was one made on memoranda, pursuant to the
provisions of RA 6031, and it modified, on October 17, 1977, a judgment of the then Municipal
Court of Paranaque, Rizal, in an Ejectment suit instituted by herein petitioner Leonila
SARMIENTO against private respondents, the spouses ERNESTO Valentino and Rebecca
Lorenzo. For the facts, therefore, we have to look to the evidence presented by the parties at
the original level.
It appears that while ERNESTO was still courting his wife, the latter's mother had told him the
couple could build a RESIDENTIAL HOUSE on a lot of 145 sq. ms., being Lot D of a
subdivision in Paranaque (the LAND, for short). In 1967, ERNESTO did construct a
RESIDENTIAL HOUSE on the LAND at a cost of P8,000.00 to P10,000.00. It was probably
assumed that the wife's mother was the owner of the LAND and that, eventually, it would
somehow be transferred to the spouses.
It subsequently turned out that the LAND had been titled in the name of Mr. & Mrs. Jose C.
Santo, Jr. who, on September 7 , 1974, sold the same to petitioner SARMIENTO. The
following January 6, 1975, SARMIENTO asked ERNESTO and wife to vacate and, on April
21, 1975, filed an Ejectment suit against them. In the evidentiary hearings before the
Municipal Court, SARMIENTO submitted the deed of sale of the LAND in her favor, which
showed the price to be P15,000.00. On the other hand, ERNESTO testified that the then cost
of the RESIDENTIAL HOUSE would be from P30,000.00 to P40,000.00. The figures were not
questioned by SARMIENTO.
The Municipal Court found that private respondents had built the RESIDENTIAL HOUSE in
good faith, and, disregarding the testimony of ERNESTO, that it had a value of P20,000.00. It
then ordered ERNESTO and wife to vacate the LAND after SARMIENTO has paid them the
mentioned sum of P20,000.00.
The Ejectment suit was elevated to the Court of First Instance of Pasay where, after the
submission of memoranda, said Court rendered a modifying Decision under Article 448 of the
Civil Code. SARMIENTO was required, within 60 days, to exercise the option to reimburse
ERNESTO and wife the sum of 40,000.00 as the value of the RESIDENTIAL HOUSE, or the
option to allow them to purchase the LAND for P25,000.00. SARMIENTO did not exercise any
of the two options within the indicated period, and ERNESTO was then allowed to deposit the
sum of P25,000.00 with the Court as the purchase price for the LAND. This is the hub of the
controversy. SARMIENTO then instituted the instant certiorari proceedings.
We agree that ERNESTO and wife were builders in good faith in view of the peculiar
circumstances under which they had constructed the RESIDENTIAL HOUSE. As far as they
knew, the LAND was owned by ERNESTO's mother-in-law who, having stated they could
build on the property, could reasonably be expected to later on give them the LAND.
In regards to builders in good faith, Article 448 of the Code provides:têñ.£îhqwâ£
ART. 448. The owner of the land on which anything has been built, sown or
planted in good faith,
shall have the right
to appropriate as his own the works, sowing or planting, after payment of the
indemnity provided for in articles 546 and 548, or
to oblige the one who built or planted to pay the price of the land, and the one
who sowed, the proper rent.
However, the builder or planter cannot be obliged to buy the land if its value is
considerably more than that of the building or trees. In such case, he shall pay
reasonable rent, if the owner of the land does not choose to appropriate the
building or trees after proper indemnity. The parties shall agree upon the terms
of the lease and in case of disagreement, the court shall fix the terms thereof.
(Paragraphing supplied)
The value of the LAND, purchased for P15,000.00 on September 7, 1974, could not have
been very much more than that amount during the following January when ERNESTO and
wife were asked to vacate. However, ERNESTO and wife have not questioned the
P25,000.00 valuation determined by the Court of First Instance.
In regards to the valuation of the RESIDENTIAL HOUSE, the only evidence presented was
the testimony of ERNESTO that its worth at the time of the trial should be from P30,000.00 to
P40,000.00. The Municipal Court chose to assess its value at P20,000.00, or below the
minimum testified by ERNESTO, while the Court of First Instance chose the maximum of
P40,000.00. In the latter case, it cannot be said that the Court of First Instance had abused its
discretion.
The challenged decision of respondent Court, based on valuations of P25,000.00 for the
LAND and P40,000.00 for the RESIDENTIAL HOUSE, cannot be viewed as not supported by
the evidence. The provision for the exercise by petitioner SARMIENTO of either the option to
indemnify private respondents in the amount of P40,000.00, or the option to allow private
respondents to purchase the LAND at P25,000.00, in our opinion, was a correct decision. têñ.
£îhqwâ£
The owner of the building erected in good faith on a land owned by another, is
entitled to retain the possession of the land until he is paid the value of his
building, under article 453 (now Article 546). The owner, of the land. upon, the
other hand, has the option, under article 361 (now Article 448), either to pay for
the building or to sell his land to the owner of the building. But he cannot, as
respondents here did, refuse both to pay for the building and to sell the land and
compel the owner of the building to remove it from the land where it is erected.
He is entitled to such remotion only when, after having chosen to sell his land,
the other party fails to pay for the same. (Emphasis ours)
We hold, therefore, that the order of Judge Natividad compelling defendants-
petitioners to remove their buildings from the land belonging to plaintiffs-
respondents only because the latter chose neither to pay for such buildings nor
to sell the land, is null and void, for it amends substantially the judgment sought
to be executed and is, furthermore, offensive to articles 361 (now Article 448)
and 453 (now Article 546) of the Civil Code. (Ignacio vs. Hilario, 76 Phil. 605,
608 [1946]).
WHEREFORE, the Petition for Certiorari is hereby ordered dismissed, without
pronouncement as to costs.
SO ORDERED.1äwphï1.ñët
Teehankee (Chairman), Plana, Relova, Gutierrez, Jr. and De la Fuente, JJ., concur.

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-25462 February 21, 1980
MARIANO FLOREZA, petitioner,
vs.
MARIA D. de EVANGELISTA and SERGIO EVANGELISTA, respondents.
R.D. Hipolito & B. P. Fabir for petitioner.
E.G. Tanjuatco & Associates for respondents.
MELENCIO-HERRERA, J:
This is a Petition for Review on certiorari of the Decision of the Court of Appeals (CA-G.R. No.
23516-R) promulgated on November 4, 1965, entitled "Maria de Evangelista and Sergio
Evangelists, (now the respondents) vs. Mariano Floreza (petitioner herein)," reversing the
judgment of the Court of First Instance of Rizal rendered on July 17, 1957, and instead
ordering petitioner to vacate respondents' residential lot, to remove his house at his own
expenses and to pay rental from May 5, 1956.
Plaintiffs Maria de Evangelista and Sergio Evangelista, who are mother and son, (the
EVANGELISTAS, for short) are the owners of a residential lot located at Sumilang St., Tanay,
Rizal, with an area of 204.08 sq. ms., assessed at P410.00. In May 1945, the
EVANGELISTAS borrowed from FLOREZA the amount of P100.00. On or about November
1945, with the consent of the EVANGELISTAS, FLOREZA occupied the above residential lot
and built thereon a house of light materials (barong- barong) without any agreement as to
payment for the use of said residential lot owing to the fact that the EVANGELISTAS has then
a standing loan of P100.00 in favor of FLOREZA. 1
On the following dates, the EVANGELISTAS again borrowed the indicated amounts:
September 16, 1946 — P100.00; 2 August 17, 1947 — P200,00; 3 January 30, 1949 —
P200.00; 4 April 1, 1949 — P140.00, 5 or a total of P740.00 including the first loan. The last
three items are evidenced by private documents stating that the residential lot stands as
security therefor and that the amounts covered thereunder are payable within six years from
date, without mention of interest. The document executed on September 16, 1946 stated
specifically that the loan was without interest "walang anumang patubo."
On January 10, 1949, FLOREZA demolished this house of light materials and in its place
constructed one of strong materials assessed in his name at P1,410.00 under Tax Declaration
No. 4448. FLOREZA paid no rental as before. 6
On August 1, 1949, the EVANGELISTAS, for and in consideration of P1,000.00 representing
the total outstanding loan of P740.00 plus P260.00 in cash, sold their residential lot to
FLOREZA, with a right to repurchase within a period of 6 years from date, or up to August 1,
1955, as evidenced by a notarial document, Exh. B, registered under Act 3344 on December
6, 1949, as Inscription No. 2147. 7
On January 2, 1955, or seven months before the expiry of the repurchase period, the
EVANGELISTAS paid in full the repurchase price of P1,000.00.
On April 25, 1956, the EVANGELISTAS, through their counsel, wrote FLOREZA a letter 8
asking him to vacate the premises as they wanted to make use of their residential lot besides
the fact that FLOREZA had already been given by them more than one year within which to
move his house to another site. On May 4, 1956, the EVANGELISTAS made a formal written
demand to vacate, within five days from notice, explaining that they had already fully paid the
consideration for the repurchase of the lot. 9 FLOREZA refused to vacate unless he was first
reimbursed the value of his house. Hence, the filing of this Complaint on May 18, 1956 by the
EVANGELISTAS.
The EVANGELISTAS prayed that: 1) they be declared the owners of the house of strong
materials built by FLOREZA on their residential lot, without payment of indemnity; or, in the
alternative to order FLOREZA to remove said house; 2) that FLOREZA pay them the sum of
P10.00 per month as the reasonable value for the use and occupation of the same from
January 2, 1955 (the date the repurchase price was paid) until FLOREZA removes the house
and delivers the lot to them; and 3) to declare the transaction between them and FLOREZA
as one of mortgage and not of pacto de retro.
In his Answer, FLOREZA admitted the repurchase but controverted by stating that he would
execute a deed of repurchase and leave the premises upon payment to him of the reasonable
value of the house worth P7,000.00.
In a Decision dated July 17, 1957, the Court of First Instance of Rizal opined that the question
of whether the transaction between the parties is one of mortgage or pacto de retro is no
longer material as the indebtedness of P1,000.00 of the EVANGELISTAS to FLOREZA had
already been fully paid. And, applying Article 448 of the Civil Code, 10 it rendered a decision
dispositively decreeing:
FOR ALL THE FOREGOING CONSIDERATIONS, the Court hereby renders
judgment granting the plaintiffs the right to elect, as owners of the land, to
purchase the house built, on the said lot in question by the defendant for P2,500
or to sell their said land to e defendant for P1,500. In the event that the plaintiffs
shall decide not to purchase the house in question the defendant should be
allowed to remain in plaintiffs' premises by, paying a monthly rental of P10.00
which is the reasonable value for the use of the same per month as alleged by
plaintiffs in their complaint. The Court also orders the defendant to pay a
monthly rental of P10.00 for the use of the land in question from May 18, 1956,
the date of the commencement of this action. The counterclaim of the defendant
is hereby ordered dismissed. Without pronouncement as to costs.
SO ORDERED. 11
Both parties appealed to the Court of Appeals.
On November 4, 1965, the Court of Appeals concluded that Article 448 of the Civil Code,
supra, was inapplicable; that FLOREZA was not entitled to reimbursement for his house but
that he could remove the same at his expense; and accordingly rendered judgment thus:
WHEREFORE, judgment is hereby rendered: (1) adjudging the defendant-
appellant Mariano Floreza to vacate plaintiffs' residential lot described in the
complaint and to pay rental of P10.00 a month from May 5, 1956, until he
(defendant) shall have vacated the premises; (2) ordering defendant to remove
his house from the land in question within 30 days from the time this decision
becomes final and executory; (3) ordering the Register of Deeds of Rizal to
cancel inscription No. 2147, Page 210, Vol. 36, in the Registration Book under
Act 3344 upon payment of his lawful fees; and (4) taxing the costs in both
instances against defendant-appellant Mariano Floreza. 12
Hence, this Petition for Review on certiorari by FLOREZA, seeking a reversal of the
aforestated judgment and ascribing the following errors:
1) That the Court of Appeals erred in holding that petitioner Floreza was a
builder in bad faith without likewise holding that respondents as owners of the
land in dispute, were likewise in bad faith and therefore both parties should in
accordance with Art. 453 of the New Civil Code be considered as having acted
in good faith.
2) That the Court of Appeals erred in completely ignoring the issue raised on
appeal as to whether or not respondents as owners of the questioned lot, were
in bad faith in the sense that they had knowledge of and acquiseced to the
construction of the house of petitioner on their lot.
3) That the Court of Appeals erred in not applying Art. 448 of the New Civil Code
in the adjudication of the rights of petitioner and respondent.
4) That the Court of Appeals erred in declaring that petitioner is not entitled to
reimbursement for the value of his house and that he should instead remove the
same at his expense.
5) That the Court of Appeals erred in adjudging petitioner to vacate respondents'
lot in question and to pay rentals commencing from May 5, 1956, until he shall
have vacated the premises, notwithstanding that petitioner is entitled under Arts.
448 and 546 of the New Civil Code, to retention without payment of rental while
the corresponding indemnity of his house had not been paid.
6) That the Court of Appeals erred in taxing costs against petitioner.
7) That the Court of Appeals erred in not awarding petitioner's counterclaim.
During the pendency of this appeal, petitioner Maria D. de Evangelista died and was ordered
substituted by her son, petitioner Sergio, as her legal representative, in a Resolution dated
May 14, 1976.
On October 20, 1978. the EVANGELISTAS filed a Motion to Dismiss stating that FLOREZA
had since died and that his heirs had voluntarily vacated the residential lot in question. The
date FLOREZA passed away and the date his heirs had voluntarily vacated the property has
not been stated. Required to comment, "petitioner (represented by his heirs)", through
counsel, confirmed his death and the removal of the house and manifested that thereby the
question of reimbursement had moot and academic. He objected to the dismissal of the case,
however, on the ground that the issue of rentals still pends. On January 21, 1980, complying
with a Resolution of 'his Court, the EVANGELISTAS clarified that the dismissal they were
praying for was not of the entire case but only of this Petition for Review on Certiorari.
We are not in agreement that the question of reimbursement of the value of the improvement
erected on the subject property has become moot. Petitioner's right of retention of subject
property until he is reimbursed for the value of his house, as he had demanded, is inextricably
linked with the question of rentals. For if petitioner has the right to indemnity, he has the right
of retention and no rentals need be paid. Conversely, if no right of retention exists, damages
in the form of rentals for the continued use and occupation of the property should be allowed.
We uphold the Court of Appeals in its conclusion that Article 448 of the Civil Code is
inapplicable to the factual milieu herein. Said codal provision applies only when the builder,
planter, or sower believes he had the right so to build, plant or sow because he thinks he
owns the land or believes himself to have a claim of title. 13 In this case, petitioner makes no
pretensions of ownership whatsoever.
Petitioner concedes that he was a builder in bad faith but maintains that' the EVANGELISTAS
should also be held in bad faith, so that both of them being in bad faith, Article 453 of the Civil
Code 14 should apply. By the same token, however, that Article 448 of the same Code is not
applicable, neither is Article 453 under the ambiance of this case.
Would petitioner, as vendee a retro, then be entitled to the rights granted iii Article 1616 of the
Civil Code (Art. 1518 of the old Code)? To quote:
Art. 1616. The vendor cannot avail himself of the right of repurchase without
returning to the vendee the price of the sale, and in addition:
(1) The expenses of the contract, and any other legitimate payments made by
reason of the sale;
(2) The necessary and useful expenses made on the thing sold.
The question again calls for a negative answer. It should be noted that petitioner did not
construct his house as a vendee a retro. The house had already been constructed as far back
as 1949 (1945 for the house of light materials) even before the pacto de retro sale in 1949.
Petitioner incurred no useful expense, therefore, after that sale. The house was already there
at the tolerance of the EVANGELISTAS in consideration of the several loans extended to
them. Since petitioner cannot be classified as a builder in good faith within the purview of
Article 448 of the Civil Code, nor as a vendee a retro, who made useful improvements during
the lifetime of the pacto de retro, petitioner has no right to reimbursement of the value of the
house which he had erected on the residential lot of the EVANGELISTAS, much less to
retention of the premises until he is reimbursed.The rights of petitioner are more akin to those
of a usufructuary who, under Article 579 of the Civil (Art. 487 of the old Code), may make on
the property useful improvements but with no right to be indemnified therefor. He may,
however, remove such improvements should it be possible to do so without damage to the
property: For if the improvements made by the usufructuary were subject to indemnity, we
would have a dangerous and unjust situation in which the usufructuary could dispose of the
owner's funds by compelling him to pay for improvements which perhaps he would not have
made. 15
We come now to the issue of rentals. It is clear that from the date that the redemption price
had been paid by the EVANGELISTAS on January 2, 1955, petitioner's right to the use of the
residential lot without charge had ceased. Having retained the property although a redemption
had been made, he should be held liable for damages in the form of rentals for the continued
use of the subject residential lot16 at the rate of P10.00 monthly from January 3, 1955, and
not merely from the date of demand on May 4, 1956, as held by the Court of Appeals, until the
house was removed and the property vacated by petitioner or his heirs.
WHEREFORE, the judgment appealed from is hereby affirmed, with the modification that
payment of rentals by the heir, of Mariano Floreza, who are hereby ordered substituted for
him, shall commence on January 3, 1955 until the date that the residential lot in question was
vacated.
Costs against petitioner.
SO ORDERED.
Teehankee (Chairman), Makasiar, Fernandez, Guerrero, and De Castro, JJ., concur.
Footnotes
1 Exh. A, p, 1, Record of Exhibits
2 Exh. 9, p. 29, Ibid.
3 Exit 10, p. 30, Ibid.
4 Exh. 2, p. 24. Ibid,
5 Exh. 3, p. 25, Ibid.
6 Exh. 11, p. 31, Ibid.
7 Pp. 3-4, Ibid.
8 Exh- 5, P. 27, Ibid.
9 Exh. 6, p. 28, Ibid.
10 ART. 448. The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as
his own the works, sowing or planting, after payment of the indemnity provided for in articles 546 and 548, or to oblige the one who built or
planted to pay the price of the land. and the one who sowed, the proper rent. However, the builder or planter cannot be aged to buy the
land if its value is considerably more than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land
does not choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the tease and in
case of disagreement. the court shall fix the terms thereof.
11 Amended Record on Appeal, p.22.
12 Decision, pp. 9-10.

13 Alburo vs. Villanueva, 7 Phil. 277 (1907); Quemuel vs. Olaes, I SCRA 1159 (1961); Racaza vs. Susana Realty, Inc., 18 SCRA 1172
(1966).
14 ART. 453. If there was bad faith, not only on the part of the person who built, planted or sowed on the land of another, but also on the
part of the owner of such land, the rights of one and the other shall be the same as though both had acted in good faith.
It is understood that there is bad faith on the part of the Ian downer whenever the act was done with his knowledge and without opposition
on his part.
15 Tolentino, Civil Code, citing Castan 237, citing de Diego Vol. pp, 315-316, 1972 ed.
16 Cho Chun Chac vs. Garcia, 47 Phil. 530 (1925).

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-57348 May 16, 1985
FRANCISCO DEPRA, plaintiff-appellee,
vs.
AGUSTIN DUMLAO, defendant-appellant.
Roberto D. Dineros for plaintiff-appellee.
Veil D. Hechanova for defendant-appellant.
MELENCIO-HERRERA, J.:
This is an appeal from the Order of the former Court of First Instance of Iloilo to the then
Court of Appeals, which the latter certified to this instance as involving pure questions of law
Plaintiff-appellee, Francisco Depra, is the owner of a parcel of land registered under Transfer
Certificate of Title No. T3087, known as Lot No. 685, situated in the municipality of
Dumangas, Iloilo, with an area of approximately 8,870 square meters. Agustin Dumlao,
defendant-appellant, owns an adjoining lot, designated as Lot No. 683, with an approximate
area of 231 sq. ms.
Sometime in 1972, when DUMLAO constructed his house on his lot, the kitchen thereof had
encroached on an area of thirty four (34) square meters of DEPRA's property, After the
encroachment was discovered in a relocation survey of DEPRA's lot made on November
2,1972, his mother, Beatriz Depra after writing a demand letter asking DUMLAO to move back
from his encroachment, filed an action for Unlawful Detainer on February 6,1973 against
DUMLAO in the Municipal Court of of Dumangas, docketed as Civil Case No 1, Said
complaint was later amended to include DEPRA as a party plain. plaintiff.
After trial, the Municipal Court found that DUMLAO was a builder in good faith, and applying
Article 448 of the Civil Code, rendered judgment on September 29, 1973, the dispositive
portion of which reads:
Ordering that a forced lease is created between the parties with the plaintiffs, as
lessors, and the defendants as lessees, over the disputed portion with an area
of thirty four (34) square meters, the rent to be paid is five (P5.00) pesos a
month, payable by the lessee to the lessors within the first five (5) days of the
month the rent is due; and the lease shall commence on the day that this
decision shall have become final.
From the foregoing judgment, neither party appeal so that, ff it were a valid judgment, it would
have ordinarily lapsed into finality, but even then, DEPRA did not accept payment of rentals
so that DUMLAO deposited such rentals with the Municipal Court.
On July 15,1974, DEPRA filed a Complaint for Quieting of Title against DUMLAO before the
then Court of First Instance of Iloilo, Branch IV (Trial Court), involving the very same 34
square meters, which was the bone of contention in the Municipal Court. DUMLAO, in his
Answer, admitted the encroachment but alleged, in the main, that the present suit is barred by
res judicata by virtue of the Decision of the Municipal Court, which had become final and
executory.
After the case had been set for pre-trial, the parties submitted a Joint Motion for Judgment
based on the Stipulation of Facts attached thereto. Premised thereon, the Trial Court on
October 31, 1974, issued the assailed Order, decreeing:
WHEREFORE, the Court finds and so holds that the thirty four (34) square
meters subject of this litigation is part and parcel of Lot 685 of the Cadastral
Survey of Dumangas of which the plaintiff is owner as evidenced by Transfer
Certificate of Title No. 3087 and such plaintiff is entitled to possess the same.
Without pronouncement as to costs.
SO ORDERED.
Rebutting the argument of res judicata relied upon by DUMLAO, DEPRA claims that the
Decision of the Municipal Court was null and void ab initio because its jurisdiction is limited to
the sole issue of possession, whereas decisions affecting lease, which is an encumbrance on
real property, may only be rendered by Courts of First Instance.
Addressing out selves to the issue of validity of the Decision of the Municipal Court, we hold
the same to be null and void. The judgment in a detainer case is effective in respect of
possession only (Sec. 7, Rule 70, Rules of Court). 1 The Municipal Court over-stepped its
bounds when it imposed upon the parties a situation of "forced lease", which like "forced co-
ownership" is not favored in law. Furthermore, a lease is an interest in real property,
jurisdiction over which belongs to Courts of First Instance (now Regional Trial Courts) (Sec.
44(b), Judiciary Act of 1948; 2 Sec. 19 (2) Batas Pambansa Blg. 129). 3 Since the Municipal
Court, acted without jurisdiction, its Decision was null and void and cannot operate as res
judicata to the subject complaint for Queting of Title. Besides, even if the Decision were valid,
the rule on res judicata would not apply due to difference in cause of action. In the Municipal
Court, the cause of action was the deprivation of possession, while in the action to quiet title,
the cause of action was based on ownership. Furthermore, Sec. 7, Rule 70 of the Rules of
Court explicitly provides that judgment in a detainer case "shall not bar an action between the
same parties respecting title to the land. " 4
Conceded in the Stipulation of Facts between the parties is that DUMLAO was a builder in
good faith. Thus,
8. That the subject matter in the unlawful detainer case, Civil Case No. 1, before
the Municipal Court of Dumangas, Iloilo involves the same subject matter in the
present case, the Thirty-four (34) square meters portion of land and built thereon
in good faith is a portion of defendant's kitchen and has been in the possession
of the defendant since 1952 continuously up to the present; ... (Emphasis ours)
Consistent with the principle that our Court system, like any other, must be a dispute resolving
mechanism, we accord legal effect to the agreement of the parties, within the context of their
mutual concession and stipulation. They have, thereby, chosen a legal formula to resolve their
dispute to appeal ply to DUMLAO the rights of a "builder in good faith" and to DEPRA those of
a "landowner in good faith" as prescribed in Article 448. Hence, we shall refrain from further
examining whether the factual situations of DUMLAO and DEPRA conform to the juridical
positions respectively defined by law, for a "builder in good faith" under Article 448, a
"possessor in good faith" under Article 526 and a "landowner in good faith' under Article 448.
In regards to builders in good faith, Article 448 of the Civil Code provides:
ART. 448. The owner of the land on which anything has been built sown or planted in good
faith,
shall have the right
to appropriate as his own the works, sowing or planting, after payment of the
indemnity provided for in articles 546 and 548, or
to oblige the one who built or planted to pay the price of the land, and the one
who sowed, the proper rent.
However, the builder or planter cannot be obliged to buy the land if its value is
considerably more than that of the building or trees. In such case, he shall pay
reasonable rent, if the owner of the land does not choose to appropriate the
building or trees after proper indemnity. The parties shall agree upon the terms
of the lease and in case of disagreement, the court shall fix the terms thereof
(Paragraphing supplied)
Pursuant to the foregoing provision, DEPRA has the option either to pay for the encroaching
part of DUMLAO's kitchen, or to sell the encroached 34 square meters of his lot to DUMLAO.
He cannot refuse to pay for the encroaching part of the building, and to sell the encroached
part of his land, 5 as he had manifested before the Municipal Court. But that manifestation is
not binding because it was made in a void proceeding.
However, the good faith of DUMLAO is part of the Stipulation of Facts in the Court of First
Instance. It was thus error for the Trial Court to have ruled that DEPRA is "entitled to
possession," without more, of the disputed portion implying thereby that he is entitled to have
the kitchen removed. He is entitled to such removal only when, after having chosen to sell his
encroached land, DUMLAO fails to pay for the same. 6 In this case, DUMLAO had expressed
his willingness to pay for the land, but DEPRA refused to sell.
The owner of the building erected in good faith on a land owned by another, is
entitled to retain the possession of the land until he is paid the value of his
building, under article 453 (now Article 546). The owner of the land, upon the
other hand, has the option, under article 361 (now Article 448), either to pay for
the building or to sell his land to the owner of the building. But he cannot as
respondents here did refuse both to pay for the building and to sell the land and
compel the owner of the building to remove it from the land where it erected. He
is entitled to such remotion only when, after having chosen to sell his land. the
other party fails to pay for the same (italics ours).
We hold, therefore, that the order of Judge Natividad compelling defendants-
petitioners to remove their buildings from the land belonging to plaintiffs-
respondents only because the latter chose neither to pay for such buildings nor
to sell the land, is null and void, for it amends substantially the judgment sought
to be executed and is. furthermore, offensive to articles 361 (now Article 448)
and 453 (now Article 546) of the Civil Code. (Ignacio vs. Hilario, 76 Phil. 605,
608[1946]).
A word anent the philosophy behind Article 448 of the Civil rode.
The original provision was found in Article 361 of the Spanish Civil Code; which provided:
ART. 361. The owner of land on which anything has been built, sown or planted
in good faith, shall have the right to appropriate as his own the work, sowing or
planting, after the payment of the indemnity stated in Articles 453 and 454, or to
oblige the one who built or planted to pay the price of the land, and the one who
sowed, the proper rent.
As will be seen, the Article favors the owner of the land, by giving him one of the two options
mentioned in the Article. Some commentators have questioned the preference in favor of the
owner of the land, but Manresa's opinion is that the Article is just and fair.
. . . es justa la facultad que el codigo da al dueno del suelo en el articulo 361, en
el caso de edificacion o plantacion? Algunos comentaristas la conceptuan
injusta, y como un extraordinario privilegio en favor de la propiedad territorial.
Entienden que impone el Codigo una pena al poseedor de buena fe y como
advierte uno de los comentaristas aludidos 'no se ve claro el por que de tal pena
. . . al obligar al que obro de buena fe a quedarse con el edificio o plantacion,
previo el pago del terreno que ocupa, porque si bien es verdad que cuando
edifico o planto demostro con este hecho, que queria para si el edificio o plantio
tambien lo es que el que edifico o planto de buena fe lo hizo en la erronea
inteligencia de creerse dueno del terreno Posible es que, de saber lo contrario,
y de tener noticia de que habia que comprar y pagar el terreno, no se hubiera
decidido a plantar ni a edificar. La ley obligandole a hacerlo fuerza su voluntad,
y la fuerza por un hecho inocente de que no debe ser responsable'. Asi podra
suceder pero la realidad es que con ese hecho voluntario, aunque sea inocente,
se ha enriquecido torticeramente con perjuicio de otro a quien es justo
indemnizarle,
En nuestra opinion, el Codigo ha resuelto el conflicto de la manera mas justa y
equitativa y respetando en lo possible el principio que para la accesion se
establece en el art. 358. 7
Our own Code Commission must have taken account of the objections to Article 361 of the
Spanish Civil Code. Hence, the Commission provided a modification thereof, and Article 448
of our Code has been made to provide:
ART. 448. The owner of the land on which anything has been built, sown or
planted in good faith, shall have the right to appropriate as his own the works,
sowing or planting, after payment of the indemnity provided for in articles 546
and 548, or to oblige the one who built or planted to pay the price of the land,
and the one who sowed, the proper rent. However, the builder or planter cannot
be obliged to buy the land if its value is considerably more than that of the
building or trees. In such case, he shall pay reasonable rent, if the owner of the
land does not choose to appropriate the building or trees after proper indemnity.
The parties shall agree upon the terms of the lease and in case of
disagreement, the court shall fix the terms thereof.
Additional benefits were extended to the builder but the landowner retained his options.
The fairness of the rules in Article 448 has also been explained as follows:
Where the builder, planter or sower has acted in good faith, a conflict of rights
arises between the owners, and it becomes necessary to protect the owner of
the improvements without causing injustice to the owner of the land. In view of
the impracticability of creating a state of forced co-ownership, the law has
provided a just solution by giving the owner of the land the option to acquire the
improvements after payment of the proper indemnity, or to oblige the builder or
planter to pay for the land and the sower to pay for the proper rent. It is the
owner of the land who is authorized to exercise the option, because his right is
older, and because, by the principle of accession, he is entitled to the ownership
of the accessory thing. (3 Manresa 213; Bernardo vs. Bataclan, 37 Off. Gaz.
1382; Co Tao vs. Chan Chico, G.R. No. 49167, April 30, 1949; Article applied:
see Cabral, et al vs. Ibanez [S.C.] 52 Off. Gaz. 217; Marfori vs. Velasco, [C.A.]
52 Off. Gaz. 2050). 8
WHEREFORE, the judgment of the trial Court is hereby set aside, and this case is hereby
ordered remanded to the Regional Trial Court of Iloilo for further proceedings consistent with
Articles 448 and 546 of the Civil Code, as follows:
1. The trial Court shall determine
a) the present fair price of DEPRA's 34 square meter area of land;
b) the amount of the expenses spent by DUMLAO for the building of the kitchen;
c) the increase in value ("plus value") which the said area of 34 square meters
may have acquired by reason thereof, and
d) whether the value of said area of land is considerably more than that of the
kitchen built thereon.
2. After said amounts shall have been determined by competent evidence, the Regional, Trial
Court shall render judgment, as follows:
a) The trial Court shall grant DEPRA a period of fifteen (15) days within which to
exercise his option under the law (Article 448, Civil Code), whether to
appropriate the kitchen as his own by paying to DUMLAO either the amount of
tile expenses spent by DUMLAO f or the building of the kitchen, or the increase
in value ("plus value") which the said area of 34 square meters may have
acquired by reason thereof, or to oblige DUMLAO to pay the price of said area.
The amounts to be respectively paid by DUMLAO and DEPRA, in accordance
with the option thus exercised by written notice of the other party and to the
Court, shall be paid by the obligor within fifteen (15) days from such notice of the
option by tendering the amount to the Court in favor of the party entitled to
receive it;
b) The trial Court shall further order that if DEPRA exercises the option to oblige
DUMLAO to pay the price of the land but the latter rejects such purchase
because, as found by the trial Court, the value of the land is considerably more
than that of the kitchen, DUMLAO shall give written notice of such rejection to
DEPRA and to the Court within fifteen (15) days from notice of DEPRA's option
to sell the land. In that event, the parties shall be given a period of fifteen (15)
days from such notice of rejection within which to agree upon the terms of the
lease, and give the Court formal written notice of such agreement and its
provisos. If no agreement is reached by the parties, the trial Court, within fifteen
(15) days from and after the termination of the said period fixed for negotiation,
shall then fix the terms of the lease, provided that the monthly rental to be fixed
by the Court shall not be less than Ten Pesos (P10.00) per month, payable
within the first five (5) days of each calendar month. The period for the forced
lease shall not be more than two (2) years, counted from the finality of the
judgment, considering the long period of time since 1952 that DUMLAO has
occupied the subject area. The rental thus fixed shall be increased by ten
percent (10%) for the second year of the forced lease. DUMLAO shall not make
any further constructions or improvements on the kitchen. Upon expiration of the
two-year period, or upon default by DUMLAO in the payment of rentals for two
(2) consecutive months, DEPRA shall be entitled to terminate the forced lease,
to recover his land, and to have the kitchen removed by DUMLAO or at the
latter's expense. The rentals herein provided shall be tendered by DUMLAO to
the Court for payment to DEPRA, and such tender shall constitute evidence of
whether or not compliance was made within the period fixed by the Court.
c) In any event, DUMLAO shall pay DEPRA an amount computed at Ten Pesos
(P10.00) per month as reasonable compensation for the occupancy of DEPRA's
land for the period counted from 1952, the year DUMLAO occupied the subject
area, up to the commencement date of the forced lease referred to in the
preceding paragraph;
d) The periods to be fixed by the trial Court in its Precision shall be inextendible,
and upon failure of the party obliged to tender to the trial Court the amount due
to the obligee, the party entitled to such payment shall be entitled to an order of
execution for the enforcement of payment of the amount due and for compliance
with such other acts as may be required by the prestation due the obligee.
No costs,
SO ORDERED.
Teehankee, Actg. C.J., Plana, Relova, De la Fuente and Alampay, JJ., concur.
Gutierrez, Jr., * J., took no part.
Footnotes
1 "Rule 70
Forcible Entry and Detainer
"Sec. 7. Judgment conclusive only on possession; not conclusive in actions involving title or ownership. The judgment rendered in an
action for forcible entry or detainer shall be effective with respect to the possession only and in no wise bind the title or affect the
ownership of the land or building. Such judgment shall not bar an action between the same parties respecting title to the land or building,
nor shall it be held conclusive of the facts therein found in a case between the same parties upon a different cause of action not involving
possession."
2 "Sec. 44. Original jurisdiction. ...
(b) In all civil actions which involve the title to, or possession of real property, or any interest therein, or the legality of any tax, impose or
assessment, except actions of forcible entry into and detainer on lands or buildings, original jurisdiction of which is conferred by this Act
upon city and municipal courts; "
3 "Sec. 19. Jurisdiction in civil ease ...
(2) In all civil actions which involve the title to, or possession of, real property, or any interest therein, except actions for forcible entry into
and unlawful detainer of lands or buildings, original jurisdiction over which is conferred upon Metropolitan Trial Courts, Municipal Trial
Courts, and Municipal Circuit Trial Courts;

SUPREME COURT
Manila
EN BANC
G.R. No. 3003 January 2, 1907
LORENZA ALBURO, plaintiff-appellee,
vs.
CATALINA VILLANUEVA, defendant-appellant.
Ledesma, Sumulong & Quintos for appellant.
Hipolito Magsalin for appellee.
CARSON, J.:
In this case no motion for a new trial was filed on the ground that the findings of fact of the trial judge
were manifestly contrary to the weight of the evidence, and the facts found must be accepted as set out
in the opinion of the lower court.
It appears that the plaintiff is the owner, by inheritance from her grandfather, of a certain lot of land in
the city of Manila, which, by written contract, was rented on the 23d of January, 1892, to one Antonio
Susano Goenco, for a term of six years, with the privilege of renewal for a second term of six years;
that the defendant, who is the wife of the said Goenco, came into possession by virtue of this rental
contract; that the defendant had her husband expended a considerable sum of money filling in and
leveling the lot and that they built a house of hard materials thereon; and that the rental contract, while
it expressly permitted the tenant to build upon the lot, is silent as to the disposition of the house at the
expiration of the rental term and makes no express provision as to improvements to be made upon the
land by way of leveling or otherwise.
The defendant having refused to surrender the lot in question of the expiration of the rental term, this
action was brought to recover possession thereof and judgment was rendered for the plaintiff, reserving
to the defendant the right to remove the house from the lot.
Counsel for the defendant contends that she is entitled to a renewal of the rental contract for a third
term of six years; or if this be denied, to be reimbursed for expenditures in filling in and leveling the
lot, and to have the benefits of the provisions of article 361 of the Civil Code, wherein it is provided
that —
The owner of the land on which building, sowing, or planting is done in good faith shall have a
right to appropriate as his own work, sowing, or planting, having previously paid the indemnity
mentioned in articles four hundred and fifty-three and four hundred and fifty-four, or to oblige
the person who has built or planted to pay him the value of the land.
It is said that this rental contract should be construed in accordance with the provisions of articles 1281,
1282, 1288, and 1289 of the Civil Code so as to give the defendant the right to renew the contract for a
third term of six years, and so on indefinitely so long as she faithfully paid the rent, but we are of the
opinion that there is no room for interpretation in accordance with the provisions of these articles since
the contract expressly provides for a term of a definite number of years, with a privilege of renewal for
a second term of definite number of years. This is a very usual form of rental contract and its terms are
so clear and explicit that they do not justify an attempt to read into it any alleged intention of the parties
other than that which appears upon its face.
In support of her claim for reimbursement for expenses in filling in and leveling the lot, defendant
relies on the provisions of paragraph 2 of article 1554 of the Civil Code, wherein it is provided that the
landlord is obliged "during the lease to make all necessary repairs in order to preserve the thing rented
in condition to serve for the purpose to which it was destined." But, as Manresa points out, this article
is strictly limited in its effect to repairs necessary to preserve the thing rented in a condition suitable to
the use agreed upon ( para el uso pactado). A repair implies the putting of something back into the
condition in which it was originally and not an improvement in the condition thereof by adding
something new thereto, unless the new thing be in substitution of something formerly in existence and
is added to preserve the original status of the subject-matter of the repairs; the filling in of a vacant lot
can not be regarded as a repair as the word is used in this article; and even though it could be so
considered, the remedy of the tenant under the provisions of article 1556, when the landlord fails to
make necessary repairs, is by demand for the annulment of the contract and indemnity by way of
damages or without demanding annulment of the contract by demand for damages for negligence on
the part of the landlord; and the tenant is not authorized to make such repairs at the expense of the
landlord, except when it is a matter of the most urgent necessity (reparacion urgentisima) "where the
slightest delay would involve grave damages," when the tenant may take the absolutely necessary
means to avoid the loss, at the cost of the owner, doing only that which is required by the force of
circumstances and no more, but this on the ground that "he had acted by virtue of the social duty of
mutual aid and assistance." (Manresa, vol. 10, p. 473.)
It has been suggested that the claim of the defendant for compensation for the filling in and leveling of
the lot may be based upon article 453 of the Civil Code which provides that "necessary expenditures
will be repaid to all persons in possession (los gastos necesarios se abonan a todo poseedor)." It may
be doubted, however, whether the "possessor" referred to in this provision can be said to include one
who stands in relation of tenant to his landlord, for the above-cited article 1554 of the Civil Code, and
the chapter wherein it occurs, seem to provide for such cases; and in any event we do not think that the
filling in and improvement of a lot can be brought under the head of necessary expenses (gastos
necesarios) as used in this connection. Manresa in his commentaries upon this article says that gastos
necesarios are no others than those made for the preservation of the thing upon which they have been
expended.
The contention that the defendant is entitled to the benefits of the provisions of article 361 of the Civil
Code can not be maintained because the right to indemnification secured in that article is manifestly
intended to apply only to a case where one builds or sows or plants an land in which he believes
himself to have a claim of title and not to lands wherein one's only interest is that of tenant under a
rental contract; otherwise it would always be in the power of the tenant to improve his landlord out of
his property. The right of a tenant in regard to improvements (mejoras) is expressly provided for in
article 1573 read in connection with article 487, wherein it is provided that the tenant may make such
improvements, either useful or convenient, as he considers advantageous, provided he does not alter the
form and substance of the thing rented, but that he will have no right for indemnification therefor,
though he can take away such improvements if it is possible to do so without injury or damage to the
thing rented.
The trial court authorized the removal of the house, apparently relying on the provisions of this article,
but since no objection was made by the plaintiff in the court below, we are not authorized to review his
action in this connection.
The judgment appealed from is affirmed, with the costs of this instance against the appellant. After the
expiration of twenty days let judgment be entered in accordance herewith and ten days thereafter let the
record in this case be remanded to the court of its origin for execution.
Arellano, C.J. Torres, Willard and Tracey, JJ., concur.
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-32974 July 30, 1979
BARTOLOME ORTIZ, petitioner,
vs.
HON. UNION C. KAYANAN, in his capacity as Judge of the Court of First Instance of
Quezon, Branch IV; ELEUTERIO ZAMORA, QUIRINO COMINTAN, VICENTE FERRO,
AND GREGORIO PAMISARAN, respondents.
Salonga, Ordoñ;ez, Yap, Sicat & Associates and Salvador, Ulgado & Carbon for petitioner.
Jose A. Cusi for private respondents.
ANTONIO, J.:1äwphï1.ñët
Petition for certiorari and Prohibition with Preliminary Injunction to nullify the Order of
respondent Judge directing the execution of the final judgment in Civil Case No. C-90, entitled
"Bartolome Ortiz vs. Secretary of Agriculture and Natural Resources, et al.," and the Writ of
Execution issued to implement said Order, allegedly for being inconsistent with the judgment
sought to be enforced.
Civil Case No. C-90 was filed by Bartolome Ortiz who sought the review and/or annulment of
the decision of the Secretary of Agriculture and Natural Resources, giving preference to the
sales applications of private respondents Quirino Comintan and Eleuterio Zamora over Lot
No. 5785, PLS-45, located at Barrio Cabuluan, Calauag, Quezon.
I
The factual background of the case, as found by respondent Court, is as follows:têñ.£îhqwâ£
... The lot in controversy was formerly the subject of Homestead Application No.
122417 of Martin Dolorico II, plaintiff's ward who died on August 20, 1931; that
since then it was plaintiff who continued the cultivation and possession of the
property, without however filing any application to acquire title thereon; that in
the Homestead Application No. 122417, Martin Dolorico II named his uncle,
Martin Dolorico I as his heir and successor in interest, so that in 1951 Martin
Dolorico I executed an affidavit relinquishing his rights over the property in favor
of defendants Quirino Comintan and Eleuterio Zamora, his grandson and son-in-
law, respectively, and requested the Director of Lands to cancel the homestead
application; that on the strength of the affidavit, Homestead Application No.
122417 was cancelled and thereafter, defendants Comintan and Zamora filed
their respective sales applications Nos. 8433 and 9258; that plaintiff filed his
protest on November 26, 1951 alleging that he should be given preference to
purchase the lot inasmuch as he is the actual occupant and has been in
continuous possession of the same since 1931; and inspite of plaintiff's
opposition, "Portion A" of the property was sold at public auction wherein
defendant Comintan was the only bidder; that on June 8, 1957, investigation
was conducted on plaintiff's protest by Assistant Public Lands Inspector
Serapion Bauzon who submitted his report to the Regional Land Officer, and
who in turn rendered a decision on April 9, 1958, dismissing plaintiff's claim and
giving due course to defendants' sales applications on the ground that the
relinquishment of the homestead rights of Martin Dolorico I in favor of Comintan
and Zamora is proper, the former having been designated as successor in
interest of the original homestead applicant and that because plaintiff failed to
participate in the public auction, he is forever barred to claim the property; that
plaintiff filed a motion for reconsideration of this decision which was denied by
the Director of Lands in his order dated June 10, 1959; that, finally, on appeal to
the Secretary of Agriculture and Natural Resources, the decision rendered by
the Regional Land Officer was affirmed in toto. 1
On March 22, 1966, respondent Court rendered judgment in the afore-mentioned civil case,
the dispositive portion of which reads as follows:têñ.£îhqwâ£
IN VIEW OF THE FOREGOING CONSIDERATIONS, judgment is hereby
rendered awarding Lot No. 5785-A of PLS-45, (Calauag Public Land
Subdivision) one-half portion of the property in litigation located at Bo. Cabuluan,
Calauag, Quezon, in favor of defendant QUIRINO COMINTAN, being the
successful bidder in the public auction conducted by the bureau of Lands on
April 18, 1955, and hereby giving due course to the Sales Application No. 9258
of defendant Eleuterio Zamora over the other half, Lot No. 5785-B of PLS-45,
Calauag, without prejudice to the right of plaintiff BARTOLOME ORTIZ to
participate in the public bidding of the same to be announced by the Bureau of
Lands, Manila. However, should plaintiff Bartolome Ortiz be not declared the
successful bidder thereof, defendants Quirino Comintan and Eleuterio Zamora
are ordered to reimburse jointly said plaintiff the improvements he has
introduced on the whole property in the amount of THIRTEEN THOUSAND SIX
HUNDRED THIRTY-TWO (P13,632.00) PESOS, the latter having the right to
retain the property until after he has been fully paid therefor, without interest
since he enjoys the fruits of the property in question, with prejudice and with
costs again the plaintiff.2
Plaintiff appealed the decision to the Court of Appeals.
Two (2) years after the rendition of the judgment by the court a quo, while the case was
pending appeal and upon petition of private respondents Quirino Comintan and Eleuterio
Zamora, respondent Court appointed respondent Vicente Ferro, Clerk of Court, as Receiver
to collect tolls on a portion of the property used as a diversion road. On August 19, 1969, the
Court of Appeals issued a Resolution annulling the Order appointing the Receiver.
Subsequently, on February 19, 1970, the Appellate Court affirmed the decision of the trial
court. A petition for review on certiorari of the decision of the Court of Appeals was denied by
this Court on April 6, 1970. At this point, private respondents filed a petition for appointment of
a new receiver with the court a quo. This petition was granted and the receiver was
reappointed. Petitioner sought the annulment of this Order with the Court of Appeals, but said
Court ruled that its decision had already become final and that the records of the case were to
be remanded to the trial court.
Not satisfied with such denial, petitioner filed a petitioner for certiorari, prohibition and
mandamus with preliminary injunction before this Court, 3 praying for the annulment of the
Order reappointing the Receiver. On July 13, 1970, the petition was dismissed by this Court
on the ground of insufficient showing of grave abuse of discretion.
II
The judgment having become final and executory private respondents filed a motion for the
execution of the same, praying as follows:têñ.£îhqwâ£
WHEREFORE, it is respectfully prayed of this Honorable Court to order the
issuance of a writ of execution in accordance with the judgment of this
Honorable Court, confirmed by the Court of Appeals and the Supreme Court,
commanding any lawful officer to deliver to defendants Comintan and Zamora
the land subject of the decision in this case but allowing defendants to file a
bond in such amount as this Honorable Court may fix, in lieu of the P13,632.00
required to be paid to plaintiff, conditioned that after the accounting of the tools
collected by plaintiff, there is still an amount due and payable to said plaintiff,
then if such amount is not paid on demand, including the legal interests, said
bond shall be held answerable.
Ordering further the plaintiff to render an accounting of the tolls he collected
from March of 1967 to December 31, 1968 and from September 1969 to March
31, 1970, and deliver said tolls collected to the receiver and if judgment is
already executed, then to Quirino Comintan and Eleuterio Zamora; and,
Finally, to condemn plaintiff to pay moral damages for withholding the tools
which belong to your movant in an amount this Court may deem just in the
premises.4
Acting upon the foregoing motion, respondent Judge issued an Order, dated September 23,
1970, stating, among others, the following: têñ.£îhqwâ£
The records further disclosed that from March 1967 to December 31, 1968,
piaintiff Bartolome Ortiz collected tolls on a portion of the propertv in question
wherein he has not introduced anv improvement particularlv on Lot No. 5785-A;
PLS-45 awarded to defendant Quirino Comintan, thru which vehicular traffic was
detoured or diverted, and again from September 1969 to March 31, 1970, the
plaintiff resumed the collection of tools on the same portion without rendering
any accounting on said tolls to the Receiver, who, was reappointed after
submitting the required bond and specifically authorized only to collect tolls
leaving the harvesting of the improvements to the plaintiff.
xxx xxx xxx
ln virtue of he findings of this Court as contained in the dispositive portion of its
decision, the defendants are jointly obligated to pay the plaintiff in the amount of
P13,632.00 as reasonable value of the improvements he introduced on the
whole property in question, and that he has the right of retention until fully paid.
It can be gleaned from the motion of the defendants that if plaintiff submits an
accounting of the tolls he collected during the periods above alluded to, their
damages of about P25,000.00 can more than offset their obligation of
P13,362.00 in favor of the plaintiff, thereafter the possession of the land be
delivered to the defendants since the decision of the Supreme Court has already
become final and executory, but in the interregnum pending such accounting
and recovery by the Receiver of the tolls collected by the plaintiff, the
defendants pray that they allowed to put up a bond in lieu of the said P13,632.00
to answer for damages of the former, if any.
On the other hand, plaintiff contends in his opposition, admitting that the
decision of the Supreme Court has become final and executory; (1) the offer of a
bond in lieu of payment of P13,632.00 does not, and cannot, satisfy the
condition imposed in the decision of this Court which was affirmed in toto; (2) the
public sale of Portion "B" of the land has still to take place as ordained before
the decision could be executed; and, (3) that whatever sums plaintiff may derive
from the property cannot be set off against what is due him for the
improvements he made, for which he has to be reimbursed as ordered.
xxx xxx xxx
Let it be known that plaintiff does not dispute his having collected tolls during the
periods from March 1967 to December 31, 1968 and from September 1969 to
March 31, 1970. The Supreme Court affirmed the decision of this Court its
findings that said tolls belong to the defendant, considering that the same were
collected on a portion of the land question where the plaintiff did not introduce
any improvement. The reimbursement to the plaintiff pertains only to the value of
the improvements, like coconut trees and other plants which he introduced on
the whole property. The tolls collected by the plaintiff on an unimproved portion
naturally belong to the defendants, following the doctrine on accretion. Further,
the reappointment of a Receiver by this Court was upheld by the Supreme Court
when it denied the petition for certiorari filed by the plaintiff, bolstering the legal
claim of defendants over said tolls. Thus, the decision of the Supreme Court
rendered the decision of this Court retroactive from March 22, 1966 although
pending accounting of the tolls collected by the plaintiff is justified and will not
prejudice anybody, but certainly would substantially satisfy the conditions
imposed in the decision. However, insofar as the one-half portion "B" of the
property, the decision may be executed only after public sale by the Bureau of
Lands shall be accomplished.
WHEREFORE, finding the Motion for Execution filed by the defendants to be
meritorious, the same is granted; provided, however, that they put up a bond
equal the adjudicated amount of P13,632.00 accruing in favor of the plaintiff,
from a reputable or recognized bonding or surety company, conditioned that
after an accounting of the tolls collected by the plaintiff should there be found out
any balance due and payable to him after reckoning said obligation of
P13,632.00 the bond shall be held answerable therefor.5
Accordingly, a Writ of Execution was issued after private respondent Quirino Comintan had
filed the required bond. The writ directed the Sheriff to enforce the decision of the Court, and
stated, part in, the following:têñ.£îhqwâ£
But should there be found any amount collectible after accounting and deducting
the amount of P3,632.00, you are hereby ordered that of the goods and chattels
of Bartolome Ortiz of Bo. Kabuluan, Calauag, Quezon, be caused to be made
any excess in the above-metioned amount together with your lawful fees and
that you render same to defendant Quirino Comintan. If sufficient personal
property cannot be found thereof to satisfy this execution and lawful fees
thereon, then you are commanded that of the lands and buildings of the said
BARTOLOME ORTIZ you make the said excess amount in the manner required
by the Rules of Court, and make return of your proceedings within this Court
within sixty (60) days from date of service.
You are also ordered to cause Bartolome Ortiz to vacate the property within
fifteen (15) days after service thereof the defendant Quirino Comintan having
filed the required bond in the amount of THIRTEEN THOUSAND SIX
HUNDRED THIRTY-TWO (P13,632.00) PESOS. 6
On October 12, 1970, petitioner filed a Motion for Reconsideration of the aforesaid Order and
Writ of Execution, alleging:têñ.£îhqwâ£
(a) That the respondent judge has no authority to place respondents in
possession of the property;
(b) That the Supreme Court has never affirmed any decision of the trial court
that tolls collected from the diversionary road on the property, which is public
land, belong to said respondents;
(c) That to assess petitioner a P25,000.00 liability for damages is purely punitive
imposition without factual or legal justification.
The foregoing Motion for Reconsideration was denied by respondent Judge per Order dated
November 18, 1970. Saod Order states, in part:têñ.£îhqwâ£
It goes without saying that defendant Comintan is entitled to be placed in
possession of lot No. 5785-A of PLS-45 (Calauag Public Land Subdivision) and
enjoyment of the tolls from March, 1967 to March, 1968 and from September,
1969 to March 31, l970 which were received by plaintiff Bartolome Ortiz,
collected from the property by reason of the diversion road where vehicular
traffic was detoured. To defendant Comintan belongs the tolls thus collected
from a portion of the land awarded to him used as a diversionary road by the
doctrine of accretion and his right over the same is ipso jure, there being no
need of any action to possess said addition. It is so because as consistently
maintained by the Supreme Court, an applicant who has complied with all the
terms and conditions which entitle him to a patent for a particular tract of publlic
land, acquires a vested right therein and is to be regarded as equitable owner
thereof so that even without a patent, a perfected homestead or sales
application is a property right in the fullest sense, unaffectcd by the fact that the
paramount title is still in the Government and no subsequent law can deprive
him of that vested right The question of the actual damages suffered by
defendant Comintan by reason of the unaccounted tolls received by plaintiff had
already been fully discussed in the order of September 23, 1970 and the Court
is honestly convinced and believes it to be proper and regular under the
circumstances.
Incidentally, the Court stands to correct itself when in the same order, it directed
the execution of he decision with respect to the one-half portion "B" of the
property only after the public sale by the Bureau of Lands, the same being an
oversight, it appearing that the Sales Application of defendant Eleuterio Zamora
had already been recognized and full confirmed by the Supreme Court.
In view thereof, finding the motion filed by plaintiff to be without merit, the Court
hereby denies the same and the order of September 23, 1970 shall remain in full
force subject to the amendment that the execution of the decision with respect to
the one-half portion "B" shall not be conditioned to the public sale by the Bureau
of Lands.
SO ORDERED.7
III
Petitioner thus filed the instant petition, contending that in having issued the Order and Writ of
Execution, respondent Court "acted without or in excess of jurisdiction, and/or with grave
abuse of discretion, because the said order and writ in effect vary the terms of the judgment
they purportedly seek to enforce." He argued that since said judgment declared the petitioner
a possessor in good faith, he is entitled to the payment of the value of the improvements
introduced by him on the whole property, with right to retain the land until he has been fully
paid such value. He likewise averred that no payment for improvements has been made and,
instead, a bond therefor had been filed by defendants (private respondents), which, according
to petitioner, is not the payment envisaged in the decision which would entitle private
respondents to the possession of the property. Furthermore, with respect to portion "B",
petitioner alleges that, under the decision, he has the right to retain the same until after he
has participated and lost in the public bidding of the land to be conducted by the Bureau of
Lands. It is claimed that it is only in the event that he loses in the bidding that he can be
legally dispossessed thereof.
It is the position of petitioner that all the fruits of the property, including the tolls collected by
him from the passing vehicles, which according to the trial court amounts to P25,000.00,
belongs to petitioner and not to defendant/private respondent Quirino Comintan, in
accordance with the decision itself, which decreed that the fruits of the property shall be in
lieu of interest on the amount to be paid to petitioner as reimbursement for improvements.
Any contrary opinion, in his view, would be tantamount to an amendment of a decision which
has long become final and executory and, therefore, cannot be lawfully done.
Petitioner, therefore, prayed that: (1) a Writ of Preliminary Injunction be issued enjoining the
enforcement of the Orders of September 23, 1970 and November 18, 1970, and the Writ of
Execution issued thereto, or restoring to petitioner the possession of the property if the private
respondents had been placed in possession thereof; (2) annulling said Orders as well as the
Writ of Execution, dissolving the receivership established over the property; and (3) ordering
private respondents to account to petitioner all the fruits they may have gathered or collected
from the property in question from the time of petitioiier's illegal dispossession thereof.
On January 29, 1971, this Court issued the Writ of Preliminary Injunction. On January 30,
1971, private respondents filed a Motion for Reconsideration and/or Modification of the Order
dated January 29, 1971. This was followed by a Supplemental Motion for Reconsideration
and Manifestation on February 3, 1971. In the latter motion, private respondents manifested
that the amount of P14,040.96, representing the amount decreed in the judgment as
reimbursement to petitioner for the improvements, plus interest for six months, has already
been deposited by them in court, "with the understanding that said amount shall be turned
over to the plaintiff after the court a quo shall have determined the improvement on Lot 5785-
A, and subsequently the remaining balance of the deposit shall be delivered to the petitioner
(plaintiff therein) in the event he loses the bid for Lot 5785-B in favor of private respondent
Eleuterio Zamora."8 The deposit is evidenced by a certification made by the Clerk of the
Court a quo.9 Contending that said deposit was a faithful compliance with the judgment of the
trial court, private respondent Quirino Comintan prayed for the dissolution of the Writ of
Injunction.
It appears that as a consequence of the deposit made by private respondents, the Deputy,
Sheriff of Calauag, Quezon ousted petitioner's representative from the land in question and
put private respondents in possession thereof. 10
On March 10, 1971, petitioner filed a "Comment on Respondents' 'Motion for Reconsideration'
dated January 29, 1971' and 'Supplemental Motion for Reconsideration and Manifestation,'"
contending that the tender of deposit mentioned in the Suplemental Motion was not really and
officially made, "inasmuch as the same is not supported by any official receipt from the lower
court, or from its clerk or cashier, as required by law;" that said deposit does not constitute
sufficient compliance with the judgment sought to be enforced, neither was it legally and
validly made because the requisites for consignation had not been complied with; that the
tender of legal interest for six months cannot substitute petitioner's enjoyment of the fruits of
the property as long as the judgment in Civil Case No. C-90 has not been implemented in the
manner decreed therein; that contrary to the allegations of private respondents, the value of
the improvements on the whole property had been determined by the lower court, and the
segregation of the improvements for each lot should have been raised by them at the
opportune moment by asking for the modification of the decision before it became final and
executory; and that the tolls on the property constituted "civil fruits" to which the petitioner is
entitled under the terms of the decision.
IV
The issue decisive of the controvery is—after the rendition by the trial court of its judgment in
Civil Case No. C-90 on March 22, 1966 confirming the award of one-half of the property to
Quirino Comintan—whether or not petitioner is still entitled to retain for his own exclusive
benefit all the fruits of the property, such as the tolls collected by him from March 1967 to
December 1968, and September 1969 to March 31, 1970, amounting to about P25,000.00. In
other words, petitioner contends that so long as the aforesaid amount of P13,632,00 decreed
in the judgment representing the expenses for clearing the land and the value of the coconuts
and fruit trees planted by him remains unpaid, he can appropriate for his exclusive benefit all
the fruits which he may derive from the property, without any obligation to apply any portion
thereof to the payment of the interest and the principal of the debt.
We find this contention untenable.
There is no question that a possessor in good faith is entitled to the fruits received before the
possession is legally interrupted. 11 Possession in good faith ceases or is legally interrupted
from the moment defects in the title are made known to the possessor, by extraneous
evidence or by the filing of an action in court by the true owner for the recovery of the
property.12 Hence, all the fruits that the possessor may receive from the time he is
summoned in court, or when he answers the complaint, must be delivered and paid by him to
the owner or lawful possessor. 13
However, even after his good faith ceases, the possessor in fact can still retain the property,
pursuant to Article 546 of the New Civil Code, until he has been fully reimbursed for all the
necessary and useful expenses made by him on the property. This right of retention has been
considered as one of the conglomerate of measures devised by the law for the protection of
the possessor in good faith. Its object is to guarantee the reimbursement of the expenses,
such as those for the preservation of the property,14 or for the enhancement of its utility or
productivity.15 It permits the actual possessor to remain in possession while he has not been
reimbursed by the person who defeated him in the possession for those necessary expenses
and useful improvements made by him on the thing possessed. The principal characteristic of
the right of retention is its accessory character. It is accessory to a principal obligation.
Considering that the right of the possessor to receive the fruits terminates when his good faith
ceases, it is necessary, in order that this right to retain may be useful, to concede to the
creditor the right to secure reimbursement from the fruits of the property by utilizing its
proceeds for the payment of the interest as well as the principal of the debt while he remains
in possession. This right of retention of the property by the creditor, according to Scaevola, in
the light of the provisions of Article 502 of the Spanish Civil Code,16 is considered not a
coercive measure to oblige the debtor to pay, depriving him temporarily of the enjoyment of
the fruits of his property, but as a means of obtainitig compensation for the debt. The right of
retention in this case is analogous to a contract of antichresis and it cati be considered as a
means of extinguishing the obligation, inasmuch as the right to retain the thing lasts only for
the period necessary to enable the creditor to be reimbursed from the fruits for the necessary
and useful expenses. 17
According to Manresa, the right of retention is, therefore, analogous to that of a pledge, if the
property retained is a movable, and to that of antichresis, if the property held is immovable. 18
This construction appears to be in harmony with similar provisions of the civil law which
employs the right of retention as a means or device by which a creditor is able to obtain the
payment of a debt. Thus, under Article 1731 of the New Civil Code, any person who has
performed work upon a movable has a right to retain it by way of pledge until he is paid.
Similarly, under Article 1914 of the same Code, the agent may retain in pledge the things
which are the object of the agency until the principal effects reimbursement of the funds
advanced by the former for the execution of the agency, or he is indemnified for all damages
which he may have suffered as a consequence of the execution of the agency, provided he is
free from fault. To the same effect, the depositary, under Article 1994 of the same Code, may
retain the thing in pledge until the full payment of what may be due him by reason of the
deposit. The usufructuary, pursuant to Article 612 of the same Code, may retain the property
until he is reimbursed for the amount paid for taxes levied on the capital (Article 597) and tor
extraordinary repairs (Article 594).
In all of these cases, the right of retention is used as a means of extinguishing the obligation.
As amply observed by Manresa: "El derecho de retencion, lo hemos dicho, es el derecho de
prenda o el de anticresis constituido por la ley con independencia de las partes." 19 In a
pledge, if the thing pledged earns or produces fruits, income, dividends or interests, the
creditor shall compensate what he receives with those which are owing him.20 In the same
manner, in a contract of antichresis, the creditor acquires the right to receive the fruits of an
immovable of his debtor with the obligation to apply them to payment of the interest, if owing,
and thereafter to the principal of his credit. 21 The debtor can not reacquire enjoyment of the
immovable until he has actually paid what he owes the creditor. 22
Applying the afore-cited principles to the case at bar, petitioner cannot appropriate for his own
exclusive benefit the tolls which he collected from the property retained by him. It was his duty
under the law, after deducting the necessary expenses for his administration, to apply such
amount collected to the payment of the interest, and the balance to the payment of the
obligation.
We hold, therefore, that the disputed tolls, after deducting petitioner's expenses for
administration, belong to Quirino Comintan, owner of the land through which the toll road
passed, further considering that the same was on portions of the property on which petitioner
had not introduced any improvement. The trial court itself clarified this matter when it placed
the toll road under receivership. The omission of any mention of the tolls in the decision itself
may be attributed to the fact that the tolls appear to have been collected after the rendition of
the judgment of the trial court.
The records further reveal that earnest efforts have been made by private respondents to
have the judgment executed in the most practicable manner. They deposited in court the
amount of the judgment in the sum of P13,632.00 in cash, subject only to the accounting of
the tolls collected by the petitioner so that whatever is due from him may be set off with the
amount of reimbursement. This is just and proper under the circumstances and, under the
law, compensation or set off may take place, either totally or partially. Considering that
petitioner is the creditor with respect to the judgment obligation and the debtor with respect to
the tolls collected, Comintan being the owner thereof, the trial court's order for an accounting
and compensation is in accord with law. 23
With respect to the amount of reimbursement to be paid by Comintan, it appears that the
dispositive portion of the decision was lacking in specificity, as it merely provided that
Comintan and Zamora are jointly liable therefor. When two persons are liable under a contract
or under a judgment, and no words appear in the contract or judgment to make each liable for
the entire obligation, the presumption is that their obligation is joint or mancomunada, and
each debtor is liable only for a proportionate part of the obligation. 24 The judgment debt of
P13,632.00 should, therefore, be pro-rated in equal shares to Comintan and Zamora.
Regarding Lot 5785-B, it appears that no public sale has yet been conducted by the Bureau
of Lands and, therefore, petitioner is entitled to remain in possession thereof. This is not
disputed by respondent Eleuterio Zamora. 25 After public sale is had and in the event that
Ortiz is not declared the successful bidder, then he should be reimbursed by respondent
Zamora in the corresponding amount for the improvements on Lot 5785-B.
WHEREFORE, in view hereof, the Order of respondent Court of November 18, 1970 is
hereby modified to conform to the foregoing judgment. The Writ of Preliminary Injunction,
dated January 29, 1971, is hereby dissolved. Without special pronouncement as to costs.
Barredo (Chairman), Concepcion, Jr. and Guerrero, JJ., concur.1äwphï1.ñët
Aquino, J., concurs in the result.
Santos and Abad Santos, JJ., are on leave.
Guerrero, J., was designated to sit in the Second Division
#Footnotestêñ.£îhqwâ£

SUPREME COURT
Manila
EN BANC
G.R. No. L-49167 April 30, 1949
CO TAO, plaintiff-appellee,
vs.
JOAQUIN CHAN CHICO, defendant-appellant.
Manuel V. San Jose for petitioner.
Padilla, Carlos & Fernando for respondents.
MORAN, C.J.:
This is an appeal by certiorari from the decision of the Court of Appeals.
According to the finding of said Court, in 1927 respondent Joaquin Chan Chicobuilt a house on his lot
No. 7, described in transfer certificate of title No.24239. When that house was constructed, Prudencia
Rodriguez was yet the owner of the adjoining lot No. 6 belonging now to petitioner Co Tao. About a
year after the petitioner bought lot No. 6, he built a house thereon and he used lumber that butted in
respondent's house. Respondent protested and his protest was resented by petitioner. Hence, the present
suit.
It is now claimed that the respondent's house took a portion of petitionerland. The Court of Appeals,
after examining the evidence, found that respondent's house occupies 6.97 square meter of petitioner's
lot, but that respondent acted in good faith. Accordingly, the Court of Appeals declared "that the
plaintiff (petitioner) has the right to elect to purchase thatportion of the defendant's (respondent's) house
which protrudes into the plaintiff's property, or to sell to the defendants the land upon which the said
portion of the defendant's house is built." And the case was remanded to the Court of First Instance
"with direction to require the plaintiff to make the election as herein provided, within the time that the
Court shall fix, and thereafter to reset the case for the admission of the evidence onthe value of the
improvement, in case the plaintiff elects to buy the same,or the value of the land, in case he elect to sell
it, and to render decisionas the result of the new trial shall warrant." From this decision
petitionerappealed by certiorari to this Court.
All the questions raised by the petitioner are unmeritorious. He alleges, for instance, that respondent
could not have acted in good faith in building aportion of his house beyond the limits of his land,
because he ought to knowthe metes and bound of his property as stated in his certificate of title. But, as
rightly stated by the Court of Appeals: "It is but stating the obvious to say that outside of the
individuals versed in the science ofsurveying, and this is already going far, no one can determine the
preciseextend or location of his property by merely examining his paper title. Thefact is even surveyors
cannot with exactitude do so. The disagreement among the three surveyors in the case at hand who
have made a resurvey of the groundwith the aid of scientific devices and of their experience and
knowledgeof surveying, is a graphic and concrete illustration of this truth."
And there is another circumstance showing respondent's good faith. The Court of Appeal found that
"the defendant's title dated back to March 12, 1923, and he built his house as early as 1927. When this
was done, it was done, it hasalso been shown, there was a stone wall which had existed since as early
as1902, and inside which the defendant's house is contracted. Prudencia Rodriguez herself, who was
still the owner of the adjoining land when the defendant built his house in 1927, must have been under
the same impression,since, as has been stated, she allowed the construction without makingany protect
during or after the construction."
Petitioner alleges that it is not fair for him to pay for the building erected on his lot which is not only
prejudicial but is certainly a nuisanceto his property. The petitioner is indeed overlooking the
circumstance thathe is not being forced to buy the building for he has the option to sell theportion of his
lot occupied by that building. The provisions of article 361 of the Civil Code admit of no distinction.
Wherefore, the judgment of the Court of Appeals is affirmed with costs against the petitioner.
Paras, Pablo, Bengzon, Briones and Reyes, JJ., concur.
Separate Opinions
FERIA, J., dissenting:
I dissent.
Under Rule 46 of the Rules of Court, appeal by certiorari from a judgment or decision of the Court of
Appeals under said Rule lies only in cases inwhich question or questions of law are involved, because
"only questions of law may be said be raised therein, and consequently this Court can not review the
findings of fact of said court.
In all judicial cases, the justiciable question is always either one of fact and law, or of law only if the
facts on which it is predicated are admittedor not in issue. It can never be a questioned of fact only,
because the administration of justice consist in the application of the law to the factsof each case
submitted to the Court for decision. The facts are the minor premise of the syllogism, the law
applicable to them the mayor premise, and the conclusion drawn from the syllogism is the conclusion
or finding of lawnecessary for the decision of cases or lawsuits by the courts.
If the facts as found by the Court of Appeals are not questioned or in issue, and only the law applicable
to the case or the conclusion of law to be drawn from such application is in issue in an appeal, the
question involved is of law and the Supreme Court has jurisdiction to review and pass upon the
conclusions or findings of law of the Court of Appeals. However, if not only the law applicable and,
consequently, the inference or conclusion to be drawn from the application thereof, but the findings of
fact of Court of Appeals are in issue, the question involved in the appeal is not of law but of fact,
because no question of law may arises before the facts to which the law be applied have been finally
determined or found.
In the present appeal, the questions involved are of fact because the issueis whether or not the findings
of the Court of Appeal discussed and passedupon by the majority in the decision are supported by the
respondent actedin good faith in building his house on part of the lot claimed by the petitioner, which
depends upon whether or not the respondent knew then that part of the lot on which he erected the
building belonged to the petitioner.
The questioned whether or not it is fair for the petitioners to pay for the building erected on his lot,
defends also on the questioned of fact whether the building was erected on it by the respondent in good
or bad faith.
This Supreme Court has, therefore, no jurisdiction to review the decision of the Court of Appeals in the
present case, because the appeal does involve not a question of law but of fact, and this Court has no
power to review the findings of fact in the decision of the said Court of Appeals, as already stated
above. A decision of the said Court on questions of fact is final and no appealable.
We should have dismissed the petition for certiorari by way of appeal from the start filed in this case,
but the fact that we have given it due course in order to determine whether appeal lies after hearing the
adverse party, does not necessarily authorize us to pass upon the findings of fact of the Court of
Appeals and affirm or reverse the decision appealed from. To affirm or reverse a judgment of the Court
of Appeals in this case presupposed a review by us of the findings of fact on which it is based, which
we have power to do.
Petition for certiorari by way of appeal is therefore dismissed. We can not review and affirm or reverse
the decision of the Court of Appeals in this case. So ordered.
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-54526 August 25, 1986
METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM, petitioner,
vs.
THE COURT OF APPEALS and THE CITY OF DAGUPAN, respondents.
Miguel T. Caguioa, Ireneo B. Orlino and Manuel D. Victorio for respondent City of Dagupan.
FERIA, J.:
This is a petition for review on certiorari of the decision of the Court of Appeals which affirmed
the decision of the then Court of First Instance of Pangasinan. The lower court had declared
respondent City of Dagupan the lawful owner of the Dagupan Waterworks System and held
that the National Waterworks and Sewerage Authority, now petitioner Metropolitan
Waterworks and Sewerage System, was a possessor in bad faith and hence not entitled to
indemnity for the useful improvements it had introduced.
Before proceeding further, it may be necessary to invite attention to the common error of
joining the court (be it a Regional Trial Court, the Intermediate Appellate Court, or the
Sandiganbayan) as a party respondent in an appeal by certiorari to this Court under Rule 45
of the Rules of Court. The only parties in an appeal by certiorari are the appellant as petitioner
and the appellee as respondent. (Cf. Elks Club vs. Rovira, 80 Phil. 272) The court which
rendered the judgment appealed from is not a party in said appeal. It is in the special civil
action of certiorari under Section 5 of Rule 65 of the Rules of Court where the court or judge
is required to be joined as party defendant or respondent. The joinder of the Intermediate
Appellate Court or the Sandiganbayan as party respondent in an appeal by certiorari is
necessary in cases where the petitioner-appellant claims that said court acted without or in
excess of its jurisdiction or with grave abuse of discretion. An example of this is a case where
the petitioner-appellant claims that the Intermediate Appellate Court or the Sandiganbayan
acted with grave abuse of discretion in making its findings of fact, thus justifying the review by
this court of said findings of fact. (See the exceptions to the rule of conclusiveness of the
findings of fact of the Intermediate Appellate Court or the Sandiganbayan in the case of Sacay
vs. Sandiganbayan, G.R. Nos. 66497-98, July 10, 1986.) In such a case, the petition for
review on certiorari under Rule 45 of the Rules of Court is at the same time a petition for
certiorari under Rule 65, and the joinder of the Intermediate Appellate Court or the
Sandiganbayan becomes necessary. (Cf. Lianga Lumber Company vs. Lianga Timber Co.,
Inc., March 31, 1977, 76 SCRA 197).
The City of Dagupan (hereinafter referred to as the CITY) filed a complaint against the former
National Waterworks and Sewerage Authority (hereinafter referred to as the NAWASA), now
the Metropolitan Waterworks and Sewerage System (hereinafter referred to as MWSS), for
recovery of the ownership and possession of the Dagupan Waterworks System. NAWASA
interposed as one of its special defenses R.A. 1383 which vested upon it the ownership,
possession and control of all waterworks systems throughout the Philippines and as one of its
counterclaims the reimbursement of the expenses it had incurred for necessary and useful
improvements amounting to P255,000.00. Judgment was rendered by the trial court in favor
of the CITY on the basis of a stipulation of facts. The trial court found NAWASA to be a
possessor in bad faith and hence not entitled to the reimbursement claimed by it. NAWASA
appealed to the then Court of Appeals and argued in its lone assignment of error that the
CITY should have been held liable for the amortization of the balance of the loan secured by
NAWASA for the improvement of the Dagupan Waterworks System. The appellate court
affirmed the judgment of the trial court and ruled as follows:
However, as already found above, these useful expenses were made in utter
bad faith for they were instituted after the complaint was filed and after
numerous Supreme Court decisions were promulgated declaring
unconstitutional the taking by NAWASA of the patrimonial waterworks systems
of cities, municipalities and provinces without just compensation.
Under Article 546 of the New Civil Code cited by the appellant, it is clear that a
builder or a possessor in bad faith is not entitled to indemnity for any useful
improvement on the premises. (Santos vs. Mojica, L-25450, Jan. 31, 1969). In
fact, he is not entitled to any right regarding the useful expenses (II Paras (1971)
387). He shall not have any right whatsoever. Consequently, the owner shall be
entitled to all of the useful improvements without any obligation on his part
(Jurado, Civil Law Reviewer (1974) 223).
Petitioner-Appellant MWSS, successor-in-interest of the NAWASA, appealed to this Court
raising the sole issue of whether or not it has the right to remove all the useful improvements
introduced by NAWASA to the Dagupan Waterworks System, notwithstanding the fact that
NAWASA was found to be a possessor in bad faith. In support of its claim for removal of said
useful improvements, MWSS argues that the pertinent laws on the subject, particularly
Articles 546, 547 and 549 of the Civil Code of the Philippines, do not definitely settle the
question of whether a possessor in bad faith has the right to remove useful improvements. To
bolster its claim MWSS further cites the decisions in the cases of Mindanao Academy, Inc. vs.
Yap (13 SCRA 190) and Carbonell vs. Court of Appeals (69 SCRA 99).
The CITY in its brief questions the raising of the issue of the removal of useful improvements
for the first time in this Court, inasmuch as it was not raised in the trial court, much less
assigned as an error before the then Court of Appeals. The CITY further argues that
petitioner, as a possessor in bad faith, has absolutely no right to the useful improvements;
that the rulings in the cases cited by petitioner are not applicable to the case at bar; that even
assuming that petitioner has the right to remove the useful improvements, such improvements
were not actually identified, and hence a rehearing would be required which is improper at
this stage of the proceedings; and finally, that such improvements, even if they could be
identified, could not be separated without causing substantial injury or damage to the
Dagupan Waterworks System.
The procedural objection of the CITY is technically correct. NAWASA should have alleged its
additional counterclaim in the alternative-for the reimbursement of the expenses it had
incurred for necessary and useful improvements or for the removal of all the useful
improvements it had introduced.
Petitioner, however, argues that although such issue of removal was never pleaded as a
counterclaim nevertheless it was joined with the implied consent of the CITY, because the
latter never filed a counter-manifestation or objection to petitioner's manifestation wherein it
stated that the improvements were separable from the system, and quotes the first part of
Sec. 5 of Rule 10 of the Rules of Court to support its contention. Said provision reads as
follows:
SEC. 5. Amendment to conform to or authorize presentation of evidence.-When
issues not raised by the pleadings are tried by express or implied consent of the
parties, they shall be treated in all respects, as if they had been raised in the
pleadings. Such amendment of the pleadings as may be necessary to cause
them to conform to the evidence and to raise these issues may be made upon
motion of any party at any time, even after judgment; but failure so to amend
does not affect the result of the trial of these issues. ...
This argument is untenable because the above-quoted provision is premised on the fact that
evidence had been introduced on an issue not raised by the pleadings without any objection
thereto being raised by the adverse party. In the case at bar, no evidence whatsoever had
been introduced by petitioner on the issue of removability of the improvements and the case
was decided on a stipulation of facts. Consequently, the pleadings could not be deemed
amended to conform to the evidence.
However, We shall overlook this procedural defect and rule on the main issue raised in this
appeal, to wit: Does a possessor in bad faith have the right to remove useful improvements?
The answer is clearly in the negative. Recognized authorities on the subject are agreed on
this point. *
Article 449 of the Civil Code of the Philippines provides that "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." As a builder in bad faith, NAWASA lost whatever useful improvements it had made
without right to indemnity (Santos vs. Mojica, Jan. 31, 1969, 26 SCRA 703).
Moreover, under Article 546 of said code, only a possessor in good faith shall be refunded for
useful expenses with the right of retention until reimbursed; and under Article 547 thereof,
only a possessor in good faith may remove useful improvements if this can be done without
damage to the principal thing and if the person who recovers the possession does not
exercise the option of reimbursing the useful expenses. The right given a possessor in bad
faith is to remove improvements applies only to improvements for pure luxury or mere
pleasure, provided the thing suffers no injury thereby and the lawful possessor does not
prefer to retain them by paying the value they have at the time he enters into possession
(Article 549, Id.).
The decision in the case of Mindanao Academy, Inc. vs. Yap (13 SCRA 190) cited by
petitioner does not support its stand. On the contrary, this Court ruled in said case that "if the
defendant constructed a new building, as he alleges, he cannot recover its value because the
construction was done after the filing of the action for annulment, thus rendering him a builder
in bad faith who is denied by law any right of reimbursement." What this Court allowed
appellant Yap to remove were the equipment, books, furniture and fixtures brought in by him,
because they were outside of the scope of the judgment and may be retained by him.
Neither may the decision in the case of Carbonell vs. Court of Appeals (69 SCRA 99), also
cited by petitioner, be invoked to modify the clear provisions of the Civil Code of the
Philippines that a possessor in bad faith is not entitled to reimbursement of useful expenses
or to removal of useful improvements.
In said case, both the trial court and the Court of Appeals found that respondents Infantes
were possessors in good faith. On appeal, the First Division of this Court reversed the
decision of the Court of Appeals and declared petitioner Carbonell to have the superior right
to the land in question. On the question of whether or not respondents Infantes were
possessors in good faith four Members ruled that they were not, but as a matter of equity
allowed them to remove the useful improvements they had introduced on the land. Justice
Teehankee (now Chief Justice) concurred on the same premise as the dissenting opinion of
Justice Munoz Palma that both the conflicting buyers of the real property in question, namely
petitioner Carbonell as the first buyer and respondents Infantes as the second buyer, may be
deemed purchasers in good faith at the respective dates of their purchase. Justice Munoz
Palma dissented on the ground that since both purchasers were undoubtedly in good faith,
respondents Infantes' prior registration of the sale in good faith entitled them to the ownership
of the land. Inasmuch as only four Members concurred in ruling that respondents Infantes
were possessors in bad faith and two Members ruled that they were possessors in good faith
said decision does not establish a precedent. Moreover, the equitable consideration present
in said case are not present in the case at bar.
WHEREFORE, the decision of the appellate court is affirmed with costs against petitioner.
SO ORDERED.
Fernan, Gutierrez, Jr., Paras and Cruz, JJ., concur.
SUPREME COURT
Manila
EN BANC
G.R. No. L-15400 August 31, 1964
LUCIANO GALACE, CARMEN TERREN, CECILIA SINGSON, ET AL., petitioners,
vs.
FELICIDAD M. BAGTAS, EMMA M. BAGTAS, ET AL., and COURT OF APPEALS,
respondents.
Jimenez, Lozano and Tumanguil for petitioners.
Reyes, Luison and Associates for respondents.
REGALA, J.:
This petition for certiorari is interposed to review and reverse the judgment of the Court of Appeals
affirming the judgment of the Court of First Instance in Civil Case No. 717.
Originally in 1949, Jose V. Bagtas and his wife, Felicidad, brought an action in the Court of First
Instance of Cagayan against Luciano Galace, Juan Singson and others, alleging that the latter were
illegally occupying portions of their land, known as Hacienda Intal, in Santos, Baggao, Cagayan. The
case was docketed as Civil Case No. 282.
The defendants denied the charge and contended that the portions claimed by the Bagtases were in fact
parts of their land holdings of which they had been in continuous possession for more than 40 years.
Thereafter, the parties submitted to the court a stipulation of facts in which they agreed to have the
monuments and boundaries of Hacienda Intal relocated "with a view of determining whether or not the
holdings of the herein defendants are within or without the boundaries of the said 'hacienda' of the
plaintiffs." Should it be found that defendants were occupying portions of the hacienda, the defendants
agreed to recognize the ownership and possession of the plaintiffs and immediately vacate the
premises. On the other hand, should the defendants' land holdings be found to be outside the
boundaries of the hacienda, then the plaintiffs agreed to recognize their possessory rights and leave
them in the peaceful possession of the lands. For this purpose, the parties asked the court to name a
land surveyor to make the relocation.
A surveyor from the Bureau of Lands was then appointed. In his report, he stated among other things
that —
4. A portion of 2.9262 hectares of survey H-80093, covered by patent No. 22148 of Juan
Singson, overlaps survey Pc-79, covered by Transfer certificate of Title No. 204 of J.V. Bagtas
et al.;
5. The whole area covered by Homestead Applicant No. 191959 of Donato Bebangco (now
deceased), and a portion of about 7 hectares of land covered by Homestead Application No.
50589-A of Luciano Galace are inside PC-79. According to our records, both applications are
still without patents.
Wherefore, the parties respectfully pray that the foregoing stipulation of facts be admitted and
approved by this Honorable Court, without prejudice to the parties adducing other evidence to
prove their case not covered by this stipulation of facts. 1äwphï1.ñët
It appears, however, that the day after the parties had signed the stipulation of facts, Jose V. Bagtas
wrote the following letter to Atty. Jose Abalos, counsel for the defendants:
April 21, 1949
Atty. Jose R. Abalos

Tuguegarao, Cagayan
Atty. Jose R. Abalos
Referring to our agreement regarding the land belonging to Messrs. Luciano Galace and
Juan Singson overlapping my land known as "Hacienda Intal" having an area of 7.16 Has.
approximately for Juan Singson, please be informed that I will execute a quit claim in their
favor after one year of the receipt of the favorable decision of the Court. It must be clearly
understood that Messrs. Galace and Singson will extend to me their full cooperation so that
I will enjoy the peaceful possession of my property. This period may be shortened
depending on the attitude that I may observe in their behavior.
Very sincerely yours,

(Sgd.) J. V. BAGTAS
Accordingly, in its decision of September 20, 1949, the court ordered:

En meritos de todo lo expuesto, el Juzgado dicta sentencia declarando que los demandantes son
los dueños de toda la parcela de terreno descrita en la demanda y tienen derecho a la possession
enmediata de todas las porciones del mismo que estan ocupadas por los demandados; pero los
demandantes estaran obligados a ceder y traspasar a favor de Luciano Galace la porcion de su
homestead que esta encluida en el certificada de titulo de los demandantes y tambien estaran
obligados a ceder y traspasar a favor de Juan Singson la porcion del homestead de este y que
esta incluida en el titulo de los demandantes despues de un año, a contar desde la fecha decision
si los demandados Galace y Singson "will extend to me (Mr. J. V. Bagtas) their full cooperation
that I (J. V. Bagtas) will enjoy the peaceful possession of my property (J.V. Bagtas' property)."
Luciano Galace and the heirs of Juan Singson brought Civil Case No. 717 in the Court of First Instance
of Cagayan to compel Felicidad Bagtas and the heirs of Jose V. Bagtas to execute the quitclaim deed
pursuant to the decision of the court in the aforementioned Case No. 282. In their answer, the
defendants contended, among other things, that they were not bound by the agreement of Jose V.
Bagtas because the plaintiffs and their predecessors had violated the condition of the obligation,
namely, that the plaintiffs would not disturb them in the cultivation, possession and enjoyment of their
property.
The trial court sustained defendants' contention and dismissed the complaint. Its decision was
subsequently affirmed by the Court of Appeals. Hence this appeal by Galace and the heirs of Singson,
who for purposes of this decision will be called the petitioners. The Bagtases will be referred to as the
respondents.
It is contended that the Court of Appeals erred "in declaring that the mere filing of the expropriation
petition with the Office of the President created discontent and unrest in the hacienda and, in holding
herein petitioners guilty of the alleged acts of depredations in violation of the agreement between J. V.
Bagtas and petitioners."
As stated earlier, Jose V. Bagtas agreed to give to the petitioners, one year after the decision in Civil
Case No. 282, the portions of the hacienda which they might be found occupying on condition that they
would "extend to (Jose V. Bagtas) their full cooperation so that (he) will enjoy the peaceful possession
of (his) property."
With respect to this condition, both the trial court and the Court of Appeals found that sometime in
December, 1949, that is, three months after the court had rendered its decision in Civil Case No. 282,
Juan Singson went to see Jose V. Bagtas in the hacienda and asked him to execute the quitclaim deed
which the latter had promised to sign. Bagtas answered that the request was premature, because the
period of one year had not yet expired and Galace and Singson had not so far complied with their
promise to cooperate with the hacienda owners by cultivating the portions occupied by them and by
helping them get other tenants to work on the land. Whereupon, Singson, the spokesman for the group,
promised Bagtas that "after this Christmas, I can help cultivate the land and I can bring some tenants."
However, instead of helping Bagtas get tenants to help cultivate the land, Galace and Singson
prevented other persons from entering and working in the hacienda. The trial court and the Court of
Appeals also found that even before April, 1950 and without consulting Bagtas, Galace and Singson
called the people in the community to a meeting "for the purpose of making an agreement or petition to
Mr. Quirino, the President, requesting him that the government should buy the land of Mr. Bagtas."
Among those who signed the petition sent to Malacañang were Galace and Singson.
According to the trial court and the appellate court, the petition for expropriation created discontent and
social unrest among the tenants in the hacienda, thus compelling the owners to employ security guards
in the middle part of 1950 to protect their property. The amount of P4,000.00 was spent for this purpose
alone. As a matter of fact some of the petitioners, who are relatives of Singson, were caught stealing
bamboos, wood and palay from the hacienda. Among those caught were Singson's children, Teofilo and
Cresencio. Cresencio even signed a written confession which was never denied or contradicted (Exhs. 6
and 6-A).
This is the reason why on April 1, 1950, Bagtas wrote Atty. Jose Abalos, counsel for Galace and
Singson another letter, advising him that "I am constrained not to return to Juan Singson the area,
squatted in accordance with out agreement."
On the basis of these findings, both the trial court and the appellate court concluded that petitioners did
not comply with their obligation and therefore were not entitled to invoke the obligation of the late Jose
V. Bagtas. We are not inclined to review these findings, as petitioners would want us to, in view of the
rule that the judgment of the Court of Appeals is conclusive as to the facts. (Moran, 2 Comments on the
Rules of Court, 413 [1963]; Caladiao, et al. v. Santos Vda. de Blas, G.R. No. L-19063, April 29, 1964.)
Indeed, on the basis of these findings alone the dismissal of this appeal can be justified.
In their first and fourth assignments of error, petitioners contend that the Court of Appeals erred in not
ordering the Land Tenure Administration to be made a party defendant in this case. It appears that
while this case was pending in the Court of Appeals, the appellants moved for the substitution of the
Land Tenure Administration in place of the heirs of Jose V. Bagtas on the basis of a supposed letter
(dated Jan. 24, 1958) of the Land Tenure Administration, advising petitioners' counsel that the land
involved in this case had been bought by the government on October 25, 1957.
Section 20, of Rule 3 of the Rules of Court states:
Transfer of interest. — In cases of transfer of interest, the action may be continued by or against
the original party, unless the court upon motion directs the person to whom the interest is
transferred to be substituted in the action or joined with the original party.
Under this provision, it is not usually essential for the transferee to be substituted; nor can the opposite
party insist on such substitution, it being ordinarily permissible to continue the action in the name of
the original party. (National Rice & Corn Corp. v. Fojas, et al., G.R. No. L-11517, April 30, 1958.)
Whether or not the transferee should be substituted for, or should be joined with, the original party is
largely a matter of discretion. This Court is not inclined to review acts done by inferior courts in the
exercise of that discretion unless the same are shown to be arbitrary.
At any rate, there seems to be no notice made in the Office of the Register of Deeds of Cagayan of the
pendency of the action. Even assuming then that there has been a transfer of interest, the Land Tenure
Administration, as transferee, is not bound by the obligation of Jose V. Bagtas to cede and transfer to
the petitioners the portions of the hacienda occupied by them.
Nor may the inclusion of the Land Tenure Administration in this case be justified on the ground that the
Land Tenure Administration is bound to resell the land at cost to the tenants because this is not an
action to compel any government agency to resell any lot it had purchased. This is an action for specific
performance pursuant to the agreement of the parties in Civil Case No. 282.
We now come to petitioners' second point. The rule is settled that in order that an action for recovery of
possession may prosper, it is indispensable that he who brings the action fully proves not only his
ownership but also the identity of the property claimed, by describing its location, area and boundaries.
(De la Cruz v. Niño, 18 Phil. 284; Marcelo v. Maniquis and De la Cruz, 35 Phil. 134.)
Contrary to petitioners' claim, there is nothing in the stipulation of facts which the parties submitted in
the former case (Case No. 282) that identifies the portions claimed by the appellants. Neither the report
of the land surveyor nor the decision of the lower court in that former case adequately identifies these
portions beyond stating that about 2.9262 hectares of Singson's landholding and about 7 hectares of
Galace's landholding overlap Hacienda Intal. Nothing at all is said about the boundaries of these
portions.
Now it is no excuse for petitioners to say that these portions, being parts of the hacienda and not having
been surveyed and segregated, cannot, with accuracy, be technically described. To be sure, it is not
required that a detailed technical description must be given. All that is required is an adequate
identification of the portions involved.
Indeed, in all transactions, a statement of the boundaries of the property involved is required. Thus,
Article 1542 of the Civil Code states that in every conveyance of real estate a statement of the
boundaries is indispensable Deeds relating to an unregistered land must describe the land by giving its
situation, boundaries and area. (Sec. 194, Act No. 3344.) The boundaries are usually indicated by
means of creeks, trees and other visible means. And even in cases of sale of a portion of a registered
land pending the approval of a subdivision plan under Section 58 of the Land Registration Act, a
temporary description of the unsegregated lot being sold is required.
Petitioners failed to give an adequate description of the portions they are claiming.
WHEREFORE, the decision appealed from is affirmed, without pronouncement as to costs.
Bengzon, C.J., Bautista Angelo, Concepcion, Reyes, J.B.L., Paredes and Makalintal, JJ., co
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 115814 May 26, 1995
PEDRO P. PECSON, petitioner,

vs.
COURT OF APPEALS, SPOUSES JUAN NUGUID and ERLINDA NUGUID, respondents.
DAVIDE, JR., J.:
This petition for review on certiorari seeks to set aside the decision1 of the Court of Appeals in CA-G.R. SP No. 32679 affirming in part the order 2 of the
Regional Trial Court (RTC) of Quezon City, Branch 101, in Civil Case No. Q-41470.
The factual and procedural antecedents of this case as gathered from the record are as follows:
Petitioner Pedro P. Pecson was the owner of a commercial lot located in Kamias Street, Quezon City, on which he built a four-door two-storey apartment building.
For his failure to pay realty taxes amounting to twelve thousand pesos (P12,000.00), the lot was sold at public auction by the city Treasurer of Quezon City to
Mamerto Nepomuceno who in turn sold it on 12 October 1983 to the private respondents, the spouses Juan Nuguid and Erlinda Tan-Nuguid, for one hundred
three thousand pesos (P103,000.00).
The petitioner challenged the validity of the auction sale in Civil Case No. Q-41470 before the RTC of Quezon City. In its decision of 8 February 1989, the RTC
dismissed the complaint, but as to the private respondents' claim that the sale included the apartment building, it held that the issue concerning it was "not a
subject of the . . . litigation." In resolving the private respondents' motion to reconsider this issue, the trial court held that there was no legal basis for the
contention that the apartment building was included in the sale.3
Both parties then appealed the decision to the Court of Appeals. The case was docketed as CA-G.R. CV No. 2931. In its decision of 30 April 1992, 4 the Court of
Appeals affirmed in toto the assailed decision. It also agreed with the trial court that the apartment building was not included in the auction sale of the commercial
lot. Thus:
Indeed, examining the record we are fully convinced that it was only the land — without the apartment building — which was sold at the
auction sale, for plaintiff's failure to pay the taxes due thereon . Thus, in the Certificate of Sale of Delinquent Property To Purchaser (Exh.
K, p. 352, Record) the property subject of the auction sale at which Mamerto Nepomuceno was the purchaser is referred to as Lot No. 21-
A, Block No. K-34, at Kamias, Barangay Piñahan, with an area of 256.3 sq. m., with no mention whatsoever, of the building thereon. The
same description of the subject property appears in the Final Notice To Exercise The Right of Redemption (over subject property) dated
September 14, 1981 (Exh. L, p. 353, Record) and in the Final Bill of Sale over the same property dated April 19, 1982 (Exh. P, p. 357,
Record). Needless to say, as it was only the land without any building which Nepomuceno had acquired at the auction sale, it was also
only that land without any building which he could have legally sold to the Nuguids. Verily, in the Deed of Absolute Sale of Registered
Land executed by Mamerto Nepomuceno in favor of the Nuguids on October 25, 1983 (Exh. U, p. 366, Record) it clearly appears that the
property subject of the sale for P103,000.00 was only the parcel of land, Lot 21-A, Blk. K-34 containing an area of 256.3 sq. meters,
without any mention of any improvement, much less any building thereon. (emphases supplied)
The petition to review the said decision was subsequently denied by this Court.5 Entry of judgment was made on 23 June 1993.6
On November 1993, the private respondents filed with the trial court a motion for delivery of possession of the lot and the apartment building, citing article 546 of
the Civil Code.7 Acting thereon, the trial court issued on 15 November 1993 the challenged order8 which reads as follows:
Submitted for resolution before this Court is an uncontroverted [sic] for the Delivery of Possession filed by defendants Erlinda Tan, Juan
Nuguid, et al. considering that despite personal service of the Order for plaintiff to file within five (5) days his opposition to said motion, he
did not file any.
In support of defendant's motion, movant cites the law in point as Article 546 of the Civil Code . . .
Movant agrees to comply with the provisions of the law considering that plaintiff is a builder in good faith and he has in fact, opted to pay
the cost of the construction spent by plaintiff. From the complaint itself the plaintiff stated that the construction cost of the apartment is
much more than the lot, which apartment he constructed at a cost of P53,000.00 in 1965 (par. 8 complaint). This amount of P53,000.00 is
what the movant is supposed to pay under the law before a writ of possession placing him in possession of both the lot and apartment
would be issued.
However, the complaint alleges in paragraph 9 that three doors of the apartment are being leased. This is further confirmed by the affidavit
of the movant presented in support of the motion that said three doors are being leased at a rental of P7,000.00 a month each. The
movant further alleges in his said affidavit that the present commercial value of the lot is P10,000.00 per square meter or P2,500,000.00
and the reasonable rental value of said lot is no less than P21,000.00 per month.
The decision having become final as per Entry of Judgment dated June 23, 1993 and from this date on, being the uncontested owner of
the property, the rents should be paid to him instead of the plaintiff collecting them. From June 23, 1993, the rents collected by plaintiff
amounting to more than P53,000.00 from tenants should be offset from the rents due to the lot which according to movant's affidavit is
more than P21,000.00 a month.
WHEREFORE, finding merit in the Motion, the Court hereby grants the following prayer that:
1. The movant shall reimburse plaintiff the construction cost of P53,000.00.
2. The payment of P53,000.00 as reimbursement for the construction cost, movant Juan Nuguid is hereby entitled
to immediate issuance of a writ of possession over the Lot and improvements thereon.
3. The movant having been declared as the uncontested owner of the Lot in question as per Entry of Judgment of
the Supreme Court dated June 23, 1993, the plaintiff should pay rent to the movant of no less than P21,000.00 per
month from said date as this is the very same amount paid monthly by the tenants occupying the lot.
4. The amount of P53,000.00 due from the movant is hereby offset against the amount of rents collected by the
plaintiff from June 23, 1993, to September 23, 1993.
SO ORDERED.
The petitioner moved for the reconsideration of the order but it was not acted upon by the trial court. Instead, on 18 November 1993, it issued a writ of
possession directing the deputy sheriff "to place said movant Juan Nuguid in possession of subject property located at No. 79 Kamias Road, Quezon City, with all
the improvements thereon and to eject therefrom all occupants therein, their agents, assignees, heirs and representatives."9
The petitioner then filed with the Court of Appeals a special civil action for certiorari and prohibition assailing the order of 15 November 1993, which was
docketed as CA-G.R. SP No. 32679. 10 In its decision of 7 June 1994, the Court of Appeals affirmed in part the order of the trial court citing Article 448 of the
Civil Code. In disposing of the issues, it stated:
As earlier pointed out, private respondent opted to appropriate the improvement introduced by petitioner on the subject lot, giving rise to
the right of petitioner to be reimbursed of the cost of constructing said apartment building, in accordance with Article 546 of the . . . Civil
Code, and of the right to retain the improvements until he is reimbursed of the cost of the improvements, because, basically, the right to
retain the improvement while the corresponding indemnity is not paid implies the tenancy or possession in fact of the land on which they
are built . . . [2 TOLENTINO, CIVIL CODE OF THE PHILIPPINES (1992) p. 112]. With the facts extant and the settled principle as guides,
we agree with petitioner that respondent judge erred in ordering that "the movant having been declared as the uncontested owner of the
lot in question as per Entry of Judgment of the Supreme Court dated June 23, 1993, the plaintiff should pay rent to the movant of no less
than P21,000 per month from said date as this is the very same amount paid monthly by the tenants occupying the lot.
We, however, agree with the finding of respondent judge that the amount of P53,000.00 earlier admitted as the cost of constructing the
apartment building can be offset from the amount of rents collected by petitioner from June 23, 1993 up to September 23, 1993 which was
fixed at P7,000.00 per month for each of the three doors. Our underlying reason is that during the period of retention, petitioner as such
possessor and receiving the fruits from the property, is obliged to account for such fruits, so that the amount thereof may be deducted from
the amount of indemnity to be paid to him by the owner of the land, in line with Mendoza vs. De Guzman, 52 Phil. 164 . . . .
The Court of Appeals then ruled as follows:
WHEREFORE, while it appears that private respondents have not yet indemnified petitioner with the cost of the improvements, since
Annex I shows that the Deputy Sheriff has enforced the Writ of Possession and the premises have been turned over to the possession of
private respondents, the quest of petitioner that he be restored in possession of the premises is rendered moot and academic, although it
is but fair and just that private respondents pay petitioner the construction cost of P53,000.00; and that petitioner be ordered to account for
any and all fruits of the improvements received by him starting on June 23, 1993, with the amount of P53,000.00 to be offset therefrom.
IT IS SO ORDERED.11
Aggrieved by the Court of Appeals' decision, the petitioner filed the instant petition.
The parties agree that the petitioner was a builder in good faith of the apartment building on the theory that he constructed it at the time when he was still the
owner of the lot, and that the key issue in this case is the application of Articles 448 and 456 of the Civil Code.
The trial court and the Court of Appeals, as well as the parties, concerned themselves with the application of Articles 448 and 546 of the Civil Code. These
articles read as follows:
Art. 448. The owner of the land on which anything has been built, sown or planted in good faith, shall have the right to appropriate as his
own the works, sowing or planting, after payment of the indemnity provided for in articles 546 and 548, or to oblige the one who built or
planted to pay the price of the land, and the one who sowed, the proper rent. However, the builder or planter cannot be obliged to buy the
land if its value is considerably more than that of the building or trees. In such case, he shall pay reasonable rent, if the owner of the land
does not choose to appropriate the building or trees after proper indemnity. The parties shall agree upon the terms of the lease and in
case of disagreement, the court shall fix the terms thereof. (361a)
xxx xxx xxx
Art. 546. Necessary expenses shall be refunded to every possessor; but only the possessor in good faith may retain the thing until he has
been reimbursed therefor.
Useful expenses shall be refunded only to the possessor in good faith with the same right of retention, the person who has defeated him in
the possession having the option of refunding the amount of the expenses or of paying the increase in value which the thing may have
acquired by reason thereof. (453a)
By its clear language, Article 448 refers to a land whose ownership is claimed by two or more parties, one of whom has built some works, or sown or planted
something. The building, sowing or planting may have been made in good faith or in bad faith. The rule on good faith laid down in Article 526 of the Civil Code
shall be applied in determining whether a builder, sower or planter had acted in good faith. 12
Article 448 does not apply 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 donation.
This Court said so in Coleongco vs. Regalado: 13
Article 361 of the old Civil Code is not applicable in this case, for Regalado constructed the house on his own land before he sold said
land to Coleongco. Article 361 applies only in cases where a person constructs a building on the land of another in good or in bad faith, as
the case may be. It does not apply to a case where a person constructs a building on his own land, for then there can be no question as to
good or bad faith on the part of the builder.
Elsewise stated, where the true owner himself is the builder of works on his own land, the issue of good faith or bad faith is entirely irrelevant.
Thus in strict point of law, Article 448 is not apposite to the case at bar. Nevertheless, we believe that the provision therein on indemnity may be applied by
analogy considering that the primary intent of Article 448 is to avoid a state of forced co-ownership and that the parties, including the two courts below, in the
main agree that Articles 448 and 546 of the Civil Code are applicable and indemnity for the improvements may be paid although they differ as to the basis of the
indemnity.
Article 546 does not specifically state how the value of the useful improvements should be determined. The respondent court and the private respondents
espouse the belief that the cost of construction of the apartment building in 1965, and not its current market value, is sufficient reimbursement for necessary and
useful improvements made by the petitioner. This position is, however, not in consonance with previous rulings of this Court in similar cases. In Javier vs.
Concepcion, Jr., 14 this Court pegged the value of the useful improvements consisting of various fruits, bamboos, a house and camarin made of strong material
based on the market value of the said improvements. In Sarmiento vs. Agana, 15 despite the finding that the useful improvement, a residential house, was built
in 1967 at a cost of between eight thousand pesos (P8,000.00) to ten thousand pesos(P10,000.00), the landowner was ordered to reimburse the builder in the
amount of forty thousand pesos (P40,000.00), the value of the house at the time of the trial. In the same way, the landowner was required to pay the "present
value" of the house, a useful improvement, in the case of De Guzman vs. De la Fuente, 16 cited by the petitioner.
The objective of Article 546 of the Civil Code is to administer justice between the parties involved. In this regard, this Court had long ago stated in Rivera vs.
Roman Catholic Archbishop of Manila 17 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 trial court also erred in ordering the petitioner to pay monthly rentals equal to the aggregate rentals paid by the lessees of the apartment building. Since the
private respondents have opted to appropriate the apartment building, the petitioner is thus entitled to the possession and enjoyment of the apartment building,
until he is paid the proper indemnity, as well as of the portion of the lot where the building has been constructed. This is so because the right to retain the
improvements while the corresponding indemnity is not paid implies the tenancy or possession in fact of the land on which it is built, planted or sown. 18 The
petitioner not having been so paid, he was entitled to retain ownership of the building and, necessarily, the income therefrom.
It follows, too, that the Court of Appeals erred not only in upholding the trial court's determination of the indemnity, but also in ordering the petitioner to account
for the rentals of the apartment building from 23 June 1993 to 23 September 1993.
WHEREFORE, the decision of the Court of Appeals in CA-G.R. SP No. 32679 and the Order of 15 November 1993 of the Regional Trial Court, Branch 101,
Quezon City in Civil Case No. Q-41470 are hereby SET ASIDE.
The case is hereby remanded to the trial court for it to determine the current market value of the apartment building on the lot. For this purpose, the parties shall
be allowed to adduce evidence on the current market value of the apartment building. The value so determined shall be forthwith paid by the private respondents
to the petitioner otherwise the petitioner shall be restored to the possession of the apartment building until payment of the required indemnity.
No costs.
SO ORDERED.
Padilla, Bellosillo and Kapunan, JJ., concur.
Quiason, J., is on leave.
Footnotes
1 Annex "A" of Petition; Rollo, 12-21. Per Associate Justice Artemon D. Luna, with the concurrence of Associate Justices Manuel C.
Herrera and Ruben T. Reyes.
2 Id., 40-42. Per Judge Pedro T. Santiago.
3 Rollo, 34.
4 Annex "A" of the Petition in CA-G.R. SP No. 32679; Id., 31-39. Per Associate Justice Lorna S. Lombos-De la Fuente, with the
concurrence of Associate Justices Eduardo R. Bengzon and Quirino D. Abad Santos, Jr.
5 Memorandum For Petitioners, 2; Rollo, 70.
6 Rollo, 70.
7 It provides:
Art. 546. Necessary expenses shall be refunded to every possessor; but only the possessor in good faith may retain the thing until he has
been reimbursed therefor.
Useful expenses shall be refunded only to the possessor in good faith with the same right of retention, the person who has defeated him in
the possession having the option of refunding the amount of the expenses or of paying the increase in value which the thing may have
acquired by reason thereof.
8 Annex "B" of Petition; Rollo, 40-42.
9 Rollo, 17-18.
10 Annex "B" of Petition; Id., 22-30.
11 Rollo, 19-21.
12 ARTURO M. TOLENTINO, Commentaries and Jurisprudence on the Civil Code of the Philippines, vol. II, 1983 ed., 103.
13 92 Phil. 387, 395 [1952]. See EDGARDO L. PARAS, Civil Code of the Philippines Annotated, vol. Two, Eleventh ed. [1984], 192.
14 94 SCRA 212 [1979].
15 129 SCRA 122 [1984].
16 55 Phil. 501 [1930].
17 40 Phil. 717 [1920].
18 TOLENTINO, op. cit., 104.

SUPREME COURT
Manila
EN BANC
G.R. No. L-23497 April 26, 1968
J.M. TUASON and CO., INC., petitioner,
vs.
ESTRELLA VDA. DE LUMANLAN and the COURT OF APPEALS (FIFTH DIVISION),
respondents.
Tuason and Sison for petitioner.
Jose Chuico and Wilfredo E. Dizon for respondents.
REYES, J.B.L., Actg. C.J.:
J. M. Tuason & Co., Inc. petitioned for a review by certiorari of the decision issued by the Court of
Appeals (Fifth Division) in its case CA-G.R. No. 27259-R, reversing the judgment rendered by the
Court of First Instance of Rizal (Civil Case No. Q-4243) that ordered defendant (now respondent)
Estrella Vda. de Lumanlan to vacate the lot occupied by her in Sta. Mesa Heights Subdivision, barrio
Tatalon, Quezon City, and to remove therefrom the house and other structures constructed thereon,
paying P240.00 a month until restoration of the premises to plaintiff.
The facts are stated in the decision of the Court of Appeals (accepted by both parties) in this
wise:1äwphï1.ñët
. . . That in the complaint filed in this case by plaintiff, J. M. Tuason & Co., Inc., hereinafter
called Tuason, on 30 April, 1969, the basis is that it being the registered owner of the property
known as Santa Mesa Heights Subdivision, situated at Barrio North Tatalon, Quezon City,
herein defendant sometime in April, 1949 unlawfully entered into possession of 800 square
meters, and therein constructed his house so that plaintiff prayed for ejectment and damages for
the occupancy; and defendant in her answer set forth affirmative defense that on 12 March,
1949, she had bought the property she was occupying from one Pedro Deudor, and that in a
compromise agreement between Pedro and Tuason on 16 March 1953, approved by the Court of
First Instance of Quezon City, she was one of the buyers therein recognized, so that she asked
that her rights be recognized and the complaint dismissed; but on the basis of the evidence
presented by both parties in the trial, Lower Court sustained plaintiff, holding that Tuason being
the registered owner, and the question being purely one of possession, therefore, defendant's
said evidence was "completely immaterial". . . . (Page 2 of Decision, Annex "A" of Petition.)
Upon the facts thus stated, the Fifth Division of the Court of Appeals held that, pursuant to this
Supreme Court's ruling in Evangelista vs. Deudor, L-12826, September 10, 1959, the Compromise
Agreement (Exh. 2) between the petitioner Tuason & Co. and the Deudors constituted a valid defense
against the possessory action filed by Tuason & Co.; that under paragraph 7 of said Compromise
Agreement, petitioner bound and committed itself to sell to respondent Lumanlan the lot occupied by
her at a reasonable price; that said respondent had a right to compel petitioner to accept payment for the
lot in question; and that the compromise agreement legalized the possession of respondent.
These pronouncements are assailed by the petitioner in this appeal as legally incorrect and contrary to
the decisions of this Court.
The terms of the compromise agreement between the heirs of Telesforo Deudor and J. M. Tuason &
Co. have been taken cognizance of in many decisions of this Court (Evangelista vs. Deudor, jam. cit;
Deudor vs. J. M. Tuason & Co., L-18768, May 30, 1961, and L-20105, Oct. 31, 1963; J. M. Tuason vs.
Jaramillo, et al., L-18932-34, Sept. 30, 1963; J. M. Tuason vs. Macalindong, L-15398, Dec. 29, 1962
and others). The Deudors had therein recognized the registered title of Tuason & Co. over the lands
claimed by them, and received payment of certain sums of money; but as the Deudors had, prior to the
compromise, sold their possessory rights to various persons, paragraph seventh of the compromise
agreement (case Q-135 of the court of origin) provided:
That the sales of the possessory rights claimed by the DEUDORS, are described in the lists
submitted by them to the OWNERS which are attached hereto marked Annexes "B" and "C"
and made part hereof. Whatever amounts may have been collected by the DEUDORS on
account thereof, shall be deducted from the total sum of P1,201,063.00 to be paid to them. It
shall be the joint and solidary obligation of the DEUDORS to make the buyer of the lots
purportedly sold by them to recognize the title of the OWNERS over the property purportedly
bought by them, and to make them sign, whenever possible, new contracts of purchase for said
property at the current paces and terms specified by the OWNERS in their sales of lots in their
subdivision known at "Sta. Mesa Heights Subdivision." The DEUDORS HEREBY advised the
OWNERS that the buyer listed in Annex "B" herein with the annotation "continue" shall buy the
lots respectively occupied by them and shall sign contracts, but the sums already paid by them
to the DEUDORS amounting to P134,922.84 (subject to verification by the Court) shall be
credited to the buyers and shall be deducted from the sums to be paid to the DEUDORS by the
OWNERS. The DEUDORS also advise the OWNERS that, the buyers listed in Annex "C"
herein with the annotation "Refund" have decided not to continue with their former contracts or
purchases with the DEUDORS and the sums already paid by them to the DEUDORS
TOTALLING P101,182.42 (subject to verification by the Court) shall be refunded to them by
the OWNERS and deducted from the sums that may be due to the DEUDORS from the
OWNERS (J.M. Tuason & Co., Inc. vs. Jaramillo, L-18932, Sept. 30, 1963);
Careful analysis of this paragraph of the compromise agreement will show that while the same created
"a sort of contractual relation" between the J. M. Tuason & Co., Inc., and the Deudor vendees (as ruled
by this Court in Evangelista vs. Deudor, ante), the same in no way obligated Tuason & Co. to sell to
those buyers the lots occupied by them at the price stipulated with the Deudors, but at "the current
prices and terms specified by the OWNERS (Tuason) in their sales of lots in their subdivision known as
'Sta. Mesa Heights Subdivision'". This is what is expressly provided. Further, the paragraph plainly
imports that these buyers of the Deudors must "recognize the title of the OWNERS (Tuason) over the
property purportedly bought by them" from the Deudors, and "sign, whenever possible, new contracts
of purchase for said property"; and, if and when they do so, "the sums paid by them to the Deudors . . .
shall be credited to the buyers." All that Tuason & Co. agreed to, therefore, was to grant the Deudor
buyers preferential right to purchase "at current prices and terms" the lots occupied by them, upon their
recognizing the title of Tuason & Co., Inc., and signing new contracts therefor; and to credit them for
the amounts they had paid to the Deudors.
Nowhere in her answer did the respondent Estrella Vda. de Lumanlan claim that she had signed a new
contract with J. M. Tuason & Co., Inc. for the purchase of the lot occupied. What is worse, instead of
recognizing the title of the owners (Tuason & Co.) as required by the aforementioned compromise
agreement, she charged in paragraph 6 of her special defense (Rec. on Appeal, p. 10) that "Pedro
Deudor and his co-owners and the plaintiff herein . . . conspired together and helped each other . . . by
entering into a supposed Compromise" whereby "Pedro Deudor and his co-owners renounced, ceded,
waived and quitclaimed all their rights, title and interest in the property including the land sold to
herein defendant, in favor of the plaintiff J. M. Tuason & Co., Inc., in consideration of the sum of
P1,201,063.00, without the knowledge and consent, and much less the intervention of the herein
defendant." In other words, the respondent Lumanlan in her answer repudiated and assailed the
compromise between the Deudors and J. M. Tuason & Co. How then can she now claim to take
advantage and derive rights from that compromise?
Without the compromise agreement, Lumanlan must justify her possession on the basis of a pretended
superiority of the Deudors' old Spanish informacion posesoria over Tuason's Certificate of Title No.
1267, traceable back to the original Certificate of Title No. 735 of Rizal, issued under the Registration
Act No. 496. But, as ruled by this Court in previous cases, Lumanlan is by now barred from assailing
the decree of registration in favor of Tuason & Co., Inc.'s predecessors twenty years after its issuance
(Tiburcio vs. PHHC, L-13429, Oct. 31, 1959; Tuason & Co. vs. Bolaños, 95 Phil. 107; Tuason & Co.
vs. Santiago, 99 Phil. 622-623; Tuason & Co. vs. Macalindong, supra; Tuason & Co. vs. Jaramillo, L-
16827, Jan. 31, 1963).
It is thus apparent that no legal basis exists for the pronouncement in the appealed decision that Tuason
& Co. had committed itself to sell to Lumanlan the lot occupied by her at a reasonable price, or that the
compromise agreement legalized the possession of the respondent, since the latter does not rely on the
compromise but, on the contrary, she assails it.
The Court of Appeals ruled that the price to be paid by Lumanlan to Tuason & Co., Inc., is governed by
Article 1474 of the new Civil Code of the Philippines, which provides that:
Where the price cannot be determined in accordance with the preceding articles, or in any other
manner, the contract is inefficacious. However, if the thing or any part thereof has been
delivered to and appropriated by the buyer, he must pay a reasonable price therefor. What is a
reasonable price is a question of fact dependent on the circumstances of each particular case.
Since there has been no contract between petitioner Tuason & Co. and respondent Lumanlan for the
sale of the lot occupied by the latter, and by paragraph 7 of the Compromise Agreement (assuming that
respondent-appellee still has the right to invoke the same, and seek refuge thereunder), Tuason & Co.
did not consider itself bound by the sales made by the Deudors, but demanded that the Deudor buyers
should sign new contracts with it at current prices specified for the sales of lots in "Sta. Mesa Heights
Subdivision" (ante) the aforequoted Article 1474 can have no bearing on the case, Lumanlan not being
a buyer from Tuason & Co.
As to Lumanlan's allegation in her counterclaim that she should be deemed a builder in good faith, a
similar contention has been rejected in Tuason & Co. vs. Macalindong, L-15398, December 29, 1962,
where we ruled that there being a presumptive knowledge of the Torrens titles issued to Tuason & Co.
and its predecessors-in-interest since 1914, the buyer from the Deudors (or from their transferees) can
not, in good conscience, say now that she believed her vendor had rights of ownership over the lot
purchased. The reason given by the Court is that —
Had he investigated before buying and before building his house on the questioned lot, he
would have been informed that the land is registered under the Torrens system in the name of J.
M. Tuason & Co., Inc., If he failed to make the necessary inquiry, appellant is now bound
conclusively by appellee's Torrens title (Sec. 51, Act 496; Emas vs. Zuzuarregui, 35 Phil. 144)
(Tuason & Co., Inc. vs. Macalindong, ante).
Lumanlan had chosen to ignore the Torrens title of Tuason & Co., Inc. and relied instead upon the
Deudors' claim of ownership, perhaps because such course appeared to her as more advantageous;
hence, she has only herself to blame for the consequences now that the Deudors' claim has been
abandoned by the Deudors themselves, and can not pretend good faith. The Court of First Instance,
therefore, did not err in holding that she was not a rightful possessor and sentencing her to vacate.
Respondent could have asked that she recover or be credited with the amounts paid by her to the
Deudors, but as no claim to such credit was ever advanced by her in the trial Court, no pronouncement
can be made thereon in this appeal. Equity demands, however, that her right to claim such return, or to
have the amount offset against the sums she was sentenced to pay, should be, as it is, reserved.
WHEREFORE, the decision of the Court of Appeals is reversed and that of the Court of First Instance
reinstated. Costs against respondent, Estrella Vda. de Lumanlan.
Dizon, Makalintal, Bengzon, J.P., Zaldivar, Sanchez, Castro and Fernando, JJ., concur.
Angeles, J., took no part.
SUPREME COURT
Manila
EN BANC
G.R. No. L-21921 October 4, 1924
ATKINS, KROLL & COMPANY, INC., plaintiff-appellant,
vs.
SANTIAGO DOMINGO, defendant-appellee.
W. A. Armstrong for appellant.
Pablo Lorenzo and Laurel, Alas & De la Rosa for appellee.
STREET, J.:
This action was instituted in the Court of First Instance of Zamboanga by Atkins, Kroll & Company,
Inc., against Santiago Domingo, for the purpose of enforcing recognition of its alleged right of
ownership over lot No. thirty-eight (38) of the cadastral plan of the Zamboanga townsite, expediente
No. 7880, and to recover possession of the same from the defendant, and at the same time to secure a
partition of lots Nos. 36 and 55 in the same plan, according to the proportional interests pertaining to
the plaintiff and defendant as joint owners thereof. Upon hearing the cause the trial court entered a
judgment recognizing the rights of the plaintiff as tenant in common with the defendant in respect to
the land in all of said lots to the full extent claimed by the plaintiff and made an appropriate order for a
division thereof, but the court at the same time held that the buildings on lots Nos. 36 and 38 are of the
exclusive ownership of the defendant, Santiago Domingo, and that before the plaintiff can obtain
possession of said buildings the defendant is entitled to be reimbursed for their value, which the court
fixed at P18,000, in accordance with article 361 of the Civil Code. At the same time the court denied
the right of the plaintiff to recover any part of the rents received by the defendant for said houses,
though it recognized the obligation of the defendant to reimburse the plaintiff for the defendant's share
of the taxes paid by the plaintiff on all of the properties. From this judgment the plaintiff appealed, and
under its assignment of error so much of the decision is called in question as relates to the title to the
buildings on lost Nos. 36 and 38 and to the right of the plaintiff to an accounting for rents which have
been collected exclusively by the defendant on all of the lots.
The appeal is concerned principally with the question of the title to the improvements on lots Nos. 36
and 38, as distinguished from the title to the land, and the manner in which this question arises can be
most readily exhibited in brief history of the registered title.
On June 24, 1912, the Court of Land Registration, sitting in the Province of Zamboanga, adjudicated
the three lots already mentioned, Nos. 36, 38, and 55, to Buenaventura Domingo. No mention was
made in the decision of the improvements on said lots, but when the corresponding decrees of
registration were issued on October 4, thereafter, the words "with all the improvements existing
thereon" were inserted, as is the common practice in cases where the improvements have not been
expressly declared by the court to belong to some other person than the owner of the land. The same
phrase appeared in the respective certificates of title covering the lots, with the result that according to
the Torrens certificates Buenaventura Domingo was the owner not only of each of said lots but also of
the improvements existing thereon.
Buenaventura Domingo died intestate on October 21, 1912, leaving a widow and a number of children
and grandchildren as heirs. One of his sons, namely, Santiago Domingo, the defendant in this case,
qualified on October 29, 1914, as administrator of his estate. Another son, named Leon Domingo, died
on August 21, 1913, and Santiago Domingo likewise qualified as administrator of Leon's estate. In the
course of the administration of the estate of Buenaventura Domingo, the defendant, as his
administrator, submitted a project of partition to the court, in which lots Nos. 36, 38 and 55 are
mentioned as properties pertaining to the decedent. In this project no mention was made of
improvements on any of said lots with the exception of a small house of strong materials on lot No. 38,
the title to which is not in question and may be dismissed from consideration. On August 8, 1918, the
court duly approved the project of partition. No objection to this action appears to have been made by
any person interested in the estate.
The share of Santiago Domingo in his father's estate, so far as affects lots Nos. 36 and 55, has remained
undisturbed and said interest is still vested in him. It is different with lot No. 38, for on February 17,
1922, the said Santiago Domingo sold his entire interest in lot No. 38, "with all the improvements
existing thereon," by contract of sale with pacto de retro to one Ong Kong. The interest thus sold was
subject to repurchase within the period of one year, but redemption was never effected; and on
February 17, 1923, the property was duly consolidated in Ong Kong. On February 19, 1923, Ong Kong
sold his entire interest in the lot and improvements thereon to the present plaintiff, Atkins, Kroll & Co.
The shares pertaining to the other heirs in lots Nos. 36, 38, and 55 suffered a number of mutations as to
ownership; but in the end, through various transactions, the authenticity, legality, and good faith of
which are not questioned either in the pleadings or in the proof, all of said interests came to rest in the
plaintiff, Atkins, Kroll & Co. Each step in all of these mutations of title was accompanied by the
corresponding proper changes in the Torrens certificates of title Nos. 3433, 3843, 3435, showing the
present ownership of the lots and improvements. From these certificates it appears that the plaintiff,
Atkins, Kroll & Co. is the owner of three-fourths of lot No. 36, with the improvements thereon; of the
whole of lot No. 38, with the improvements thereon; and of three-fourths of lot No. 55, excluding the
improvements.
It appears that the defendant, Santiago Domingo, is now in possession of said property and has at all
times been in possession since the plaintiff acquired its interest therein, and he has during the same
period exclusively enjoyed the use of all the lots, with the income derived from the buildings thereon.
This circumstance, coupled with this refusal to admit the plaintiff's claim as coowner, resulted, as
already stated, in the institution of the present action by the plaintiff, for the purpose of recovering
possession of lot No. 38 and to secure a partition of lots Nos. 36 and 55, with an accounting for the
plaintiff's proper proportion of the profits. This brings us to consider the origin and nature of the
defendant's claim to the exclusive ownership of the buildings on lots Nos. 36 and 38. 1awph!l.net
In this connection it appears that the buildings referred to were erected in the latter months of the year
1912 and first half of 1913, and the defendant asserts that they were built by him with his own money
and with the consent of his father. Upon this circumstance in connection with article 361 and related
provisions of the Civil Code, the defendant bases his claim to the exclusive ownership of said
buildings.
We note that this claim was first put forth by the defendant in what he called an explanatory report
submitted to the court in the administration of the estate of Buenaventura Domingo on February 1,
1919. In that writing the defendant asked that the buildings on lots Nos. 36 and 38 be segregated from
the mass of the property left by his father and that he himself be declared to be the exclusive owner of
the buildings. This move was opposed by Zoila Domingo, a daughter and sole heir of Leon Domingo.
In the end the court, upon July 19, 1922, entered a resolution ignoring the defendant's claim and
ordering that the project of partition be carried into effect. If it be true, as the defendant claims, that the
houses referred to were built with his money, it must strike one as remarkably strange that he should
have waited for nearly seven years, or until February 1, 1919, before formulating his claim or taking
any step whatever to protect his title to said buildings.
But assuming, as we may, that the buildings in question were in fact constructed by the defendant with
his own money, and with the consent of his father as owner of the land, it is clear that the defendant's
right to the buildings in controversy has been lost, except in so far as he is owner of an undivided one-
fourth interest by inheritance; and the interests of the two parties to this litigation in the properties in
question must be taken to be exactly as they are stated in the existing certificates of title. This results
from the fact that the plaintiff is a purchaser for value who has acquired the interests shown on the
existing Torrens certificates upon the faith of the registered title, and the defendant is in no position to
arrest the effect of these documents.
But is it insisted that the plaintiff has been affected with the notice of the defendant's right by the filing
of a lis pendens. This requires a few words of explanation. Going back to August 18, 1920, we find that
on said date the defendant filed with the register of deeds a notice of lis pendens, setting forth his claim
of ownership as to the improvements in question, and referring to the controversy planted in his
explanatory report in the administration proceedings. Notice of said lis pendens was noted on the back
of the corresponding certificates of title. Upon the date stated the plaintiff had already acquired a
mortgage upon the interest of Zoila Domingo in the estate of her grandfather, Buenaventura Domingo;
and by the foreclosure of that mortgage all of her interest in lots Nos. 36 and 38 became vested in the
plaintiff as purchaser. The remaining interests acquired by the plaintiff in the same properties appear to
have been acquired by it after the notice of lis pendens was filed.
As will be seen, the filing of the lis pendens was intended to affect third persons with notice of the
claim which the defendant had asserted in his explanatory report in the proceedings over the state of
Buenaventura Domingo. But it will be remembered that the efforts of the defendant to get his claim
recognized in those proceedings completely failed of effect. For this reason the lis pendens must be
considered to have lost its efficacy. The effect of notice by lis pendens is, of course, to charge the
stranger with notice of the particular litigation referred to in the notice, and, if the notice is effective,
the stranger who acquires the property affected by the lis pendens takes subject to the eventuality of the
litigation. But when the adverse right fails in such litigation, the lis pendens becomes innocuous.
It should be noted that the defendant, supposing his claim to have been made in good faith, might have
protected it, at any time before the property had passed into the hands of a third person, by a
proceeding under section 112 of Act No. 496. Said section declares that any person may at any time
apply by petition to the court, where "new interests have arisen or been created which do not appear
upon the certificate," and procure such interests to be noted. Such a petition must be filed and entitled
in the original case in which the decree of registration was entered. (Sec. 112, par. 2, Act No. 496.)
In Blass vs. De la Cruz and Melendres (37 Phil., 1), this court held that the registration of land in the
name of a particular person vests in him not only the title to the land but also the title to the
improvements thereon, unless special reservation is noted with respect to the improvements. In that
case the improvements which became the subject of controversy had been placed on the land before it
was registered and the decree of registration was res judicata as to the improvements. In the case
before us the buildings which are the subject of controversy were placed on the land after the decree of
registration. This circumstance made a proceeding under section 12 of Act No. 496 all the more
necessary in order to protect the new interest thus created. So far as registered land is concerned, the
right recognized in article 361 and related provisions of the Civil Code is subject to the contingency
that it shall be noted in the registered title before the property passes into the hand of a purchaser for
value.
The considerations so far adduced apply alike to the improvements on lots Nos. 36 and 38, but there is
another circumstance which is fatal to the defendant's claim to any of the improvements on lot No. 38.
This is found in the fact that he sold his interest in said lot, including the improvements, to Ong Kong,
the plaintiff's predecessor in interest. It is evident that the defendant is estopped by his own deed from
claiming any interest in the buildings on this lot, whatever might have been the law governing his claim
to the buildings on the other lot.
From what has been said it is evidence that the trial court was in error in declaring the defendant to be
the owner of the buildings on lots Nos. 36 and 38 and in failing to require the defendant to account; and
in order to clarify the situation we declare: (1) That the ownership of the lots Nos. 36, 38, and 55, is as
stated in the Torrens certificates of title Nos. 3433, 3843, and 3435 (Exhibits A, B, and C of the
plaintiff); (2) that the plaintiff is entitled to possession of lot No. 38 and that partition must be made of
lots Nos. 36 and 55 in the manner provided by law; (3) the plaintiff is further entitled to recover of the
defendant such portion of the defendant and which shall have been paid by the plaintiff; (4) the plaintiff
shall also recover of the defendant such portion of the rents of said properties as correspond to the
interests of the plaintiff since its acquisition of the same.
The judgment will be reversed and the cause remanded for further proceedings in conformity with this
opinion, without express pronouncement as to costs. So ordered.
Johnson, Malcolm, Avanceña, Villamor, Ostrand and Romualdez, JJ., concur.
SUPREME COURT
Manila
EN BANC
G.R. No. L-3013 January 24, 1908
THE ROMAN CATHOLIC APOSTOLIC CHURCH, ET AL., plaintiffs,
vs.
CERTAIN MUNICIPALITIES IN THE PROVINCE OF ILOCOS SUR, ET AL., defendants.
Hartigan, Rohde and Gutierrez for plaintiffs.
Attorney-General Araneta and Buencamino and Diokno, for defendants.
WILLARD, J.:
This is an original action brought in this court by virtue of the provisions of Act No., 1376. It is in all
respects similar to the case of The Roman Catholic Church vs. The Municipalities of the Province of
Tarlac.1
It is therefore by the court adjudged and decreed that this action be dismissed without costs as to all of
the defendants except the municipalities of Dolores, La Paz, Candon and Santa Cruz, and except as to
the defendants, Gregorio Aglipay, Rosalio Eduarte, Elipio Blance, Benigno de Lara, and Candido
Gironella.
It is further adjudged and decreed that all of the property described in the complaint be eliminated
therefrom except that which is hereinafter described, and as to the property thus eliminated this court
makes no determination in regard to the rights of the parties to this action in relation thereto.
In reference to the municipality of Dolores, the evidence shows that the plaintiffs are not entitled to
recover the building called by them in their complaint "a convent." It is proved to our satisfaction that
this building was erected and has been used as a municipal building. Three churches have been built
upon the lot originally dedicated to that purpose, the last one having been constructed about two years
ago. With this construction the plaintiffs had nothing to do. That the plaintiffs are entitled to the
possession of the lot and land can not be questioned. However, the present building was constructed by
persons who have presented no written or other evidence of ownership. They simply took possession of
the property when its former possessors were compelled to abandon it by reason of war. They can not
be considered as possessors in good faith. (Art. 433, Civil Code). Not being possessors in good faith,
they are not entitled to the structure erected upon the land not their own. (Art. 362, Civil Code).
We have said that the last church was constructed upon the site of the former churches. The evidence is
in conflict upon this point, but we think it sustains our conclusion. However, that may be, it would of
course follow that, if in fact the present building is not upon the lot in question, the plaintiffs would
have no interest whatever therein.
[Here follows the formal part of the judgment, which is omitted.]
So ordered.
Arellano, C.J., Torres, Mapa and Tracey, JJ., concur.
Separate Opinions
CARSON, J., concurring:
I agree with the conclusion except in as far as they rest on the finding that the possession of those
persons who built the newly erected church in the municipality of Dolores was not possession "in good
faith" (de buena fe); and that they, therefore, lose all rights which are guaranteed to possessors in good
faith under the provisions of the Civil Code.
It is admitted that this Church was erected within the last two years by voluntary subscriptions of the
adherents of the Aglipayan Church; it appears that they did so with the consent and permission of the
municipality of Dolores, which was at that time in actual possession of the land on which it was built,
and that the municipality claimed the right of possession of this land by virtue of the treaty of Paris, and
the grant of the control of public property in the Philippines acquired by the United States under that
treaty, to the Government of the Philippine Islands, for the benefit of the people of these Islands.
I agree with the majority opinion that contention is not well founded, but article 433 of the Civil Code
provides that he shall be deemed to be a possessor in good faith who is not aware that there is a defect
in his title or in the mode whereby he acquired possession which invalidates it, and article 434 provides
that in such cases good faith must always be presumed and the burden of proof is on him who alleges
bad faith.
There is not a scintilla of proof of bad faith in the record, and indeed, that question never was raised. I
am unable to understand on what basis the court holds that those persons who built the church and are
now in possession knew that the municipality did not have the right to possession of the land and the
power to authorize them to build thereon, and without proof of such knowledge the foregoing
provisions of the Civil Code forbid the presumption of bad faith. The question of good faith does not
rest on the final decision of the courts as to the soundness of the title, but, as provided in article 433, on
the knowledge or lack of knowledge of the party in possession of a defect in his title.
Johnson, J., concurs.
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-43105 August 31, 1984
REPUBLIC OF THE PHILIPPINES (Director of Lands), petitioner,
vs.
THE HON. COURT OF APPEALS (SECOND DIVISION) AND SANTOS DEL RIO,
respondents.
G.R. No. L-43190 August 31, 1984
AURORA BAUTISTA, OLIMPIO LARIOS, FELICIDAD DE LA CRUZ, ELPIDIO LARIOS,
LUCITA BANDA, BENITO SANTAYANA, FRUCTUOSA BANHAO LUCIO VELASCO,
GREGORIO DATOY, FELIMON GUTIERREZ, ET AL., petitioners,
vs.
THE HON. COURT OF APPEALS AND SANTOS DEL RIO, respondents.
Bonifacio, Perez & Concepcion for petitioners.
The Solicitor General for respondent Appellate Court.
Eduardo Cagandahan for respondent Santos del Rio.
CUEVAS, J.:
These two 1 Petitions for Review of the same decision of the defunct Court of Appeals 2 have been consolidated in this single decision, having arisen
from one and the same Land Registration Cage (LRC Case No. N-283, Laguna), and presenting as they do issues which may be resolved jointly by this Court.
The questioned decision of the Court of Appeals set aside the judgment of the trial court and ordered the registration of the land in favor of applicant, now private
respondent, Santos del Rio. Petitioner Director of Lands in G.R. No. L-43105 claims that the land sought to be registered is part of the public domain and
therefore not registerable. Petitioners private oppositors in G.R. No. L-43190, on the other hand, allege that they reclaimed the land by dumping duck egg shells
thereon, and that they have been in possession of the same for more than twenty (20) years.
The lot subject matter of this land registration case, with an area of 17,311 square meters, is situated near the shore of Laguna de Bay, about twenty (20) meters
therefrom (Exh. D), 3 in Barrio Pinagbayanan, Pila, Laguna. It was purchased by Benedicto del Rio from Angel Pili on April 19, 1909. The Deed of Sale
evidencing said purchase is duly recorded with the Registry of Deeds of Sta. Cruz, Laguna. The land was declared for tax purposes beginning the year 1918,
and the realty taxes thereon had been paid since 1948. When Benedicto del Rio died in 1957, his heirs extrajudicially partitioned his estate and the subject
parcel passed on to his son, Santos del Rio, as the latter's share in the inheritance.
Santos del Rio, herein applicant-private respondent, filed his application for registration of said parcel on May 9, 1966. The application was opposed by the
Director of Lands and by private oppositors, petitioners in G.R. No. L-43190.
Sometime before 1966, private oppositors obtained permission from Santos del Rio to construct duck houses on the land in question. Although there was no
definite commitment as to rentals, some of them had made voluntary payments to private respondent. In violation of the original agreement, private oppositors
constructed residential houses on the land which prompted private respondent to file an ejectment suit against the former in 1966. 4 Meanwhile, during the latter
part of 1965 and in 1966, private oppositors had simultaneously filed their respective sales applications with the Bureau of Lands, and in 1966, they opposed
Santos del Rios application for registration. The Court of First Instance of Laguna dismissed the application for registration. Applicant appealed and obtained a
favorable judgment from the Court of Appeals. The Director of Lands and the private oppositors filed their respective Petitions for Review of said decision.
The two consolidated petitions raise substantially the same issues, to wit :
1) whether or not the parcel of land in question is public land; and
2) whether or not applicant private respondent has registerable title to the land.
Property, which includes parcels of land found in Philippine territory, is either of public dominion or of private ownership. 5 Public lands, or those of public
dominion, have been described as those which, under existing legislation are not the subject of private ownership, and are reserved for public purposes. 6 The
New Civil Code enumerates properties of public dominion in Articles 420 and 502 thereof. Article 420 provides:
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;
(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.
Article 502 adds to the above enumeration, the following:

(1) Rivers and their natural beds;
(2) Continuous or intermittent waters of springs and brooks running in their natural beds and the beds themselves;
(3) Waters rising continuously or intermittently on lands of public dominion;
(4) Lakes and lagoons formed by Nature on public lands and their beds;
xxx xxx xxx
(Emphasis supplied)
The Director of Lands would like Us to believe that since a portion of the land sought to be registered is covered with water four to five months a year, the same
is part of the lake bed of Laguna de Bay, or is at least, a foreshore land, which brings it within the enumeration in Art. 502 of the New Civil Code quoted above
and therefore it cannot be the subject of registration.
The extent of a lake bed is defined in Art. 74 of the Law of Waters of 1866, as follows:
The natural bed or basin of lakes, ponds, or pools, is the ground covered by their waters when at their highest ordinary depth. (Emphasis
supplied)
The phrase "highest ordinary depth" in the above definition has been interpreted in the case of Government of P.I. vs. Colegio de San Jose 7 to be the highest
depth of the waters of Laguna de Bay during the dry season, such depth being the "regular, common, natural, which occurs always or most of the time during the
year." The foregoing interpretation was the focal point in the Court of Appeals decision sought to be reviewed. We see no reason to disturb the same.
Laguna de Bay is a lake. 8 While the waters of a lake are also subject to the same gravitational forces that cause the formation of tides 9 in seas and oceans,
this phenomenon is not a regular daily occurrence in the case of lakes. 10 Thus, the alternation of high tides and low tides, which is an ordinary occurrence,
could hardly account for the rise in the water level of the Laguna de Bay as observed four to five months a year during the rainy season. Rather, it is the rains
which bring about the inundation of a portion of the land in question. Since the rise in the water level which causes the submersion of the land occurs during a
shorter period (four to five months a year) than the level of the water at which the is completely dry, the latter should be considered as the "highest ordinary
depth" of Laguna de Bay. Therefore, the land sought to be registered is not part of the bed or basin of Laguna de Bay. Neither can it be considered as foreshore
land. The Brief for the Petitioner Director of Lands cites an accurate definition of a foreshore land, to wit:
... that part of (the land) which is between high and low water and left dry by the flux and reflux of the tides... 11
The strip of land that lies between the high and low water mark and that is alternately wet and dry according to the flow of the tide. 12
As aptly found by the Court a quo, the submersion in water of a portion of the land in question is due to the rains "falling directly on or flowing into Laguna de Bay
from different sources. 13 Since the inundation of a portion of the land is not due to "flux and reflux of tides" it cannot be considered a foreshore land within the
meaning of the authorities cited by petitioner Director of Lands. The land sought to be registered not being part of the bed or basin of Laguna de Bay, nor a
foreshore land as claimed by the Director of Lands, it is not a public land and therefore capable of registration as private property provided that the applicant
proves that he has a registerable title. This brings us to the second issue, which is whether or not applicant private respondent has registerable title to the land.
The purpose of land registration under the Torrens System is not the acquisition of lands but only the registration of title which applicant already possesses over
the land. 14 Registration under the Torrens Law was never intended as a means of acquiring ownership. Applicant in this case asserts ownership over the parcel
of land he seeks to register and traces the roots of his title to a public instrument of sale (Exh. G) in favor of his father from whom he inherited said land. In
addition to this muniment of title, he presents tax declarations (Exhs. F, G, H, I) covering the land since 1918 and also tax receipts (Exhs. J, J-1, J-2, J-3, J-4, K,
K-1, K-2, K-3) dating back to 1948. While it is true that by themselves tax receipts and declarations of ownership for taxation purposes are not incontrovertible
evidence of ownership, 15 they become strong evidence of ownership acquired by prescription when accompanied by proof of actual possession of the property.
16 The then Court of Appeals found applicant by himself and through his father before him, has been in open, continuous, public, peaceful, exclusive and
adverse possession of the disputed land for more than thirty (30) years, counted from April 19, 1909, when the land was acquired from a third person by
purchase. 17 The record does not show any circumstance of note sufficient enough to overthrow said findings of facts which is binding upon us. Since applicant
has possessed the subject parcel in the concept of owner with just title and in good faith, his possession need only last for ten years in order for ordinary
acquisitive prescription to set in. 18 Applicant has more than satisfied this legal requirement. And even if the land sought to be registered is public land as
claimed by the petitioners still, applicant would be entitled to a judicial confirmation of his imperfect title, since he has also satisfied the requirements of the Public
Land Act (Commonwealth Act No. 141 as amended by Republic Act No. 1942). Sec. 48 of said Act enumerates as among the persons entitled to judicial
confirmation of imperfect title, the following:
(a) ...
(b) Those who, by themselves or through their predecessors-in-interest, have been in the open, continuous, exclusive, and notorious
possession and occupation of agricultural lands of the public domain, under bona fide c of ownership, for at least tirty years immediately
preceding the filing of the application for confirmation of title ...
The claim of private oppositors, petitioners in G.R. No. L43190, that they have reclaimed the land from the waters of Laguna de Bay and that they have
possessed the same for more than twenty (20) years does not improve their position. In the first place, private persons cannot, by themselves reclaim land from
water bodies belonging to the public domain without proper permission from government authorities. 19 And even if such reclamation had been authorized, the
reclaimed land does not automatically belong to the party reclaiming the same as they may still be subject to the terms of the authority earlier granted. 20 Private
oppositors-petitioners failed to show proper authority for the alleged reclamation, therefore, their claimed title to the litigated parcel must fall. In the second place,
their alleged possession can never ripen into ownership. Only possession acquired and enjoyed in the concept of owner can serve as the root of a title acquired
by prescription. 21 As correctly found by the appellate court, the private oppositors-petitioners entered into possession of the land with the permission of, and as
tenants of, the applicant del Rio. The fact that some of them at one time or another did not pay rent cannot be considered in their favor. Their use of the land and
their non-payment of rents thereon were merely tolerated by applicant and these could not have affected the character of the latter's possession 22 which has
already ripened into ownership at the time of the filing of this application for registration.
The applicant private-respondent having satisfactorily established his registerable title over the parcel of land described in his application, he is clearly entitled to
the registration in his favor of said land.
IN VIEW OF THE FOREGOING, the judgment appealed from is hereby AFFIRMED and the registration in favor of applicant private-respondent of the land
described in his application is hereby ordered.
Costs against private petitioners.
SO ORDERED.
Concepcion, Jr., Guerrero, Abad Santos and Escolin, JJ., concur.
Aquino, J., took no part.
Makasiar, J., (Chairman), is on leave.

Footnotes

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 108065 July 6, 1993
SPOUSES FELIX BAES AND RAFAELA BAES, petitioners,

vs.
THE COURT OF APPEALS AND REPUBLIC OF THE PHILIPPINES, respondents.
Lorenzo F. Miravite for petitioners.
The Solicitor General for respondents.
CRUZ, J.:
This is an appeal by way of certiorari from the decision of the respondent Court of Appeals which affirmed in toto the ruling of the trial court in Civil Case No.
0460-P, the dispositive portion of which read thus:
WHEREFORE, judgment is hereby rendered declaring null and void TCT Nos. 14405, 29592, 29593, 29594, 29595, and TCT No. 29593's
derivative titles TCT Nos. 124725, 124726, 124727 and 124729, and ordering the Register of Deeds for Pasay City to cancel them and
issue new ones in their stead in the name of the plaintiff after segregating from TCT No. 29593 452 sq. m., the actual area of Lot 2958-C
(covered by cancelled TCT No. 11043) belonging to defendant Felix Baes. The counterclaim is hereby dismissed.
Let a copy of this Decision be furnished the Register of Deeds for Pasay City.
SO ORDERED.
The controversy began in 1962, when the government dug a canal on a private parcel of land, identified as Lot 2958 and covering an area of P33,902 sq.m., to
streamline the Tripa de Gallina creek.
This lot was later acquired by Felix Baes, who registered it in his name under TCT No. 10990 and then had it subdivided into three lots, namely: (a) Lot 2958-A,
with an area of 28,889 sq.m.; (b) Lot 2958-B, with an area of 3,588 sq.m.; and (c) Lot 2958-C, with an area of 452 sq.m., covered by TCT Nos. 11041, 11042 and
11043, respectively.
In exchange for Lot 2958-B, which was totally occupied by the canal, the government gave Baes a lot with exactly the same area as Lot 2958-B through a Deed
of Exchange of Real Property dated June 20, 1970.1 The property, which was near but not contiguous to Lot 2956-C, was denominated as Lot 3271-A and later
registered in the name of Felix Baes under TCT No. 24300. The soil displaced by the canal was used to fill up the old bed of the creek.
Meanwhile, Baes had Lot 2958-C and a portion of Lot 2958-A designated as Lot 1, Blk., 4, resurveyed and subdivided. On January 12, 1968, he submitted a
petition for the approval of his resurvey and subdivision plans, claiming that after the said lots were plotted by a competent surveyor, it was found that there were
errors in respect of their bearings and distances.
The resurvey-subdivision plan was approved by the Court of First Instance of Pasay City in an order dated January 15, 1968.2
As a result, the old TCTs covering the said lots were canceled and new ones were issued, to wit: (a) Lot 1-A, Blk. 4, with 672 sq.m., under TCT No.
T-14404; (b) Lot 1-B, with 826 sq.m., representing the increase in area after the resurvey, under TCT No. T-14405; (c) Lot 2958-C-1, with 452 sq.m., under TCT
No. T-14406; and (d) Lot 2958-C-2, with 2,770 sq.m. representing the increase after resurvey, under TCT No. T-14407.
Lots 2958-C-1 and 2958-C-2 were later consolidated and this time further subdivided into four (4) lots, namely, Lot 1, with an area of 147 sq.m.; Lot 2, with an
area of 950 sq.m.; Lot 3, with an area of 257 sq.m.; and Lot 4, with an area of 1,868 sq.m., which were respectively issued TCT Nos. 29592, 29593, 29594, and
29595.
In 1978, the Republic of the Philippines discovered that Lot 1-B (with TCT No. 14405 and an area of 826 sq.m.), on which the petitioners had erected an
apartment building, covered Lot 3611 of the Pasay Cadastre, which is a filled-up portion of the Tripa de Gallina creek. Moreover, Lot 2958-C (covered by TCT
Nos. 29592 to 29595, with an increased area of 2,770 after resurvey and subdivision) had been unlawfully enlarged.
On November 17, 1982, it filed a petition for cancellation of TCT Nos. 14405 and 29592 to 29595.3
Baes did not object in his answer to the cancellation of TCT Nos. 29592, 29594 and 29595 and was notable to prove during the trial that the government utilized
a portion of Lot 2 under, TCT No. 29593. The trial court therefore decreed (correctly) that the original Lot 2958-C (with an area of 452 sq.m.) be reverted to its
status before the resurvey-subdivision of Lot 2958-C.
The only remaining dispute relates to Lot 1-B (TCT No. 14405), which the petitioners, relying on Article 461 of the Civil Code, are claiming as their own. The
government rejects this claim and avers that the petitioners had already been fully compensated for it on June 20, 1970 when they agreed to exchange their Lot
2958-B with Lot 3271-A belonging to the government.
Article 461 of the Civil Code states:
River beds which are abandoned through the natural change in the course of the waters ipso facto belong to the owners whose lands are
occupied by the new course in proportion to the area lost. However, the owners of the land adjoining the old bed shall have the right to
acquire the same by paying the value thereof, which value shall not exceed the value of the area occupied by the new bed. (Emphasis
supplied)
A portion of the Tripa de Gallina creek was diverted to a man-made canal which totally occupied Lot 2958-B (with an area of 3,588 sq.m.) belonging to Felix
Baes. Thus, the petitioners claim that they became the owners of the old bed (which was eventually filled up by soil excavated from Lot 2958-B) by virtue of
Article 461.
The petitioners rely heavily on Dr. Arturo M. Tolentino's interpretation of this Article, to wit:
This article (461) refers to a natural change in the course of a stream. If the change of the course is due to works constructed by
concessioners authorized by the government, the concession may grant the abandoned river bed to the concessioners. If there is no such
grant, then, by analogy, the abandoned river bed will belong to the owners of the land covered by the waters, as provided in this article,
without prejudice to a superior right of third persons with sufficient title. (Citing 3 Manresa 251-252; 2 Navarro Amandi, 100-101; 3
Sanchez Roman 148)
We agree.
If the riparian owner is entitled to compensation for the damage to or loss of his property due to natural causes, there is all the more reason to compensate him
when the change in the course of the river is effected through artificial means. The loss to the petitioners of the land covered by the canal was the result of a
deliberate act on the part of the government when it sought to improve the flow of the Tripa de Gallina creek. It was therefore obligated to compensate the
Baeses for their loss.
We find, however, that the petitioners have already been so compensated. Felix Baes was given Lot 3271-A in exchange for the affected Lot 2958-B through the
Deed of Exchange of Real Property dated June 20, 1970. This was a fair exchange because the two lots were of the same area and value and the agreement
was freely entered into by the parties. The petitioners cannot now claim additional compensation because, as correctly observed by the Solicitor General,
. . . to allow petitioners to acquire ownership of the dried-up portion of the creek would be a clear case of double compensation and unjust
enrichment at the expense of the state.
The exchange of lots between the petitioners and the Republic was the result of voluntary negotiations. If these had failed, the government could still have taken
Lot 2958-B under the power of eminent domain, upon payment of just compensation, as the land was needed for a public purpose.
WHEREFORE, the petition is DENIED, with costs against the petitioners. It is so ordered.
Griño-Aquino, Bellosillo and Quiason, JJ., concur.
# Footnotes
1 Exhibit "4," Records, p. 293.
2 Records, p. 398.

SUPREME COURT
Manila
EN BANC
G.R. No. L-3788 December 21, 1907
PEDRO P. ROXAS, petitioner-appellee,
vs.
JULIA TUASON, THE MUNICIPALITY OF SAN PEDRO MACATI, AND ALEJANDRO AND
CONSOLACION AGUIRRE, respondents-appellants.
Ledesma & Sumulong and Ramon Fernandez, for appellant Julia Tuason.
Jose Santiago, for the municipality of San Pedro Macati.
Ariston Estrada, for appellants Alejandro and Consolacion Aguirre.
Rosado, Sanz and Opisso, for appellee.
TORRES, J.:
On February 19, 1906, attorneys Rosado, Sanz & Opisso, on behalf of Pedro P. Roxas, applied for the
registration of the estate owned by the said Roxas, known as the Hacienda de San Pedro Macati, in
accordance with the provisions of the Land Registration Act; said hacienda was acquired by the
petitioner by inheritance under the will of his late father, Jose Bonifacio Roxas, y Ubaldo. The property
consists of four different parcels of land, irregular shape, designated on the accompanying plan under
the letters "A", "B", "C", and "D", containing a total area of 1,761 hectares 51 ares and 5 centares,
equivalent to 17,615,105 square meters, and according to the last assessment for the purpose of taxation
assessed at P415,221.34, of which P59,904 corresponded to the portion of said hacienda included
within the limits of the city of Manila and P256,769 corresponded to that portion situated in the
Province of Rozal. The building constructed of strong materials, called the "Casa-Quinta" or "Casa de
Ingenieros," belonging also to said Roxas, is erected within parcel "C," occupying, together with its
appurtenances, an area of 8,430 square meters, and was assessed at P98,557.34. It does not appear that
said hacienda is mortgaged nor that any person has any right to or any interest therein; and it is almost
wholly occupied at the present time, under lease, by about 429 tenants whose names, residences, and
postal addresses, as well as the residence of the owner of the property and of his attorney in fact, are
stated in the application.
In his writing of April 24 the petitioner requested the summoning of the persons therein named, and
stated in addition that the total area of the hacienda is 17,613,595.91 square meters, as specified in the
corrections made to the technical description.
In another writing dated July 24, 1906, amending his former application, the petitioner gives the postal
address and names of several occupants of the property; and by other amendments to his original
petition dated August 30 and September 25, 1906, rectifications are made in the boundaries of the
hacienda, the last of which represents a decrease of 1,446.70 square meters, or 14 ares and 46.70
centares which must be deducted from the original description.
The owners of the adjoining properties having been summoned and notified by means of subpoenas
and notices published in the daily papers, one of them, Julia Tuason, appeared and by a document dated
September 10, 1906, set forth her opposition to the registration and authentication of the title of the
petitioner, Roxas, as regards the parcel marked "C," for the reason that two old monuments which had
separated their respective properties had been pulled down and new ones erected without her consent,
and in her opinion the latter included a considerable portion of the land owned by her, as may be seen
on page 122, part IV, of the record.
The municipality of San Pedro Macati also filed opposition to the requested registration, alleging that
the land occupied by the municipal building and the public school had been in the possession of the
town from time immemorial, and that all the land occupied by roads, highways, lanes, and public
landing places belonged to the public domain and should be excluded from registration in favor of the
petitioner.
Under date of the 18th of September, 1906, the attorney for Alejandro Aguirre and Consolacion Aguirre
also filed opposition to said application for registration alleging that the two parcels of land owned by
them had been improperly included within the bounds of said hacienda in the parcel marked "C," the
second said parcels, which is the only subject of the respective bill of exceptions and appeal interposed
by them, consists of a building lot situated in Calle San Pedro, opposite the first parcel of land, which
was the subject of another bill of exceptions and appeal by the petitioner; said second parcels measures
10 meters and 87 centimeters on its front and rear, and 9 meters and 20 centimeters along each of its
sides, its boundaries being stated.
Evidence consisting of both oral testimony and documents, which appear in the record, having been
adduced by both parties in the suit, the judge, after a notation of default having been entered against all
the respondents, rendered his decision on the 17th of October, 1906, overruling the opposition made by
Julia Tuason, by the municipality of San Pedro Macati, and by Alejandro and Consolacion Aguirre as to
the second parcel, and ordered the registration of the Hacienda of San Pedro Macati in favor of Pedro
Roxas, the petitioner herein, excluding the parcel of land with a frontage of 23 Spanish yards and a
depth of 24 Spanish yards occupied by the municipal building, which the government has the right to
use without the payment of rent therefor, so long as the same is occupied by the said building or by
another in substitution thereof and used for the public good and for official purposes. The respondents,
Julia Tuason, the municipality of San Pedro Macati, and Alejandro and Consolacion Aguirre, excepted
to said judgment and moved for a new trial on the ground that the same was contrary to law and to the
weight of the evidence; said motion was overruled, the respondents again excepting. The respective
bills of exceptions having been presented, the same were forwarded in the ordinary manner.
The only subject of controversy between the petitioner, owner of the Hacienda of San Pedro Macati,
and the respondent Julia Tuason is the question of the boundary line, between their respective
contiguous premises.
The representative of the petitioner affirms that the real boundary of the hacienda on the side that
adjoins the land of Tuason was and still is a creek or sapa separating both properties, and that in former
years said creek was wider that at the present time.
The respondent, however, maintains that the boundary between the sitio called Suavoy, formerly an
island of that name, and the Hacienda of San Pedro Macati is determined by straight lines drawn
between some old monuments distant a few yards from the bank of the said creek.
The record does not show that the boundary of the land of Julia Tuason was inclosed by monuments
belonging to her or that the creek which divides the sitio or Island of Suavoy from the land of the said
hacienda is included within the respondent's land, since in the bill of sale executed by the procurador
general of the Augustinian friars on March 28, 1893, to Julia Tuason, no mention is made of
monuments erected thereon nor of any creek existing in the large tract of land purchased by her, except
that the land is situated in the barrio of Suavoy and that it is bounded on two sides by the Hacienda of
San Pedro Macati.
Nor does the record show that there was more land on the side of the hacienda, forming part of the
barrio or sitio of Suavoy, not included in the tract acquired by Tuason from the Augustinian Fathers,
and that said creek traversed said barrio from one end to the other, or the respondent's land, in order to
affirm on good grounds that her land extended to the opposite bank of the aforesaid creek.
From the fact that the land of Julia Tuason was bounded on two sides by the Hacienda of San Pedro
Macati it does not follow that the strip of a few meters in width on the bank of the creek above referred
to belonged to her, there being no evidence in support thereof, and if her statement were true, she
would have applied for a survey and demarcation of her property in accordance with the area of the
same stated in her title deed; and if she did not do so it must be because she renounces its verification
in this manner or for some other reason.
Further than this, it is impossible to draw the above conclusion, inasmuch as the strip of land, irregular
in shape, running parallel to the creek and forming a portion of its bank, has always up to the present
time been occupied by tenants of said hacienda as being an integral portion thereof, even at the time
when the land now owned by Julia Tuason belonged to the Augustinian Fathers, the original owners
thereof.
It is so affirmed by Rafael Rivera, the collector of rents of the hacienda, and by two tenants thereof,
Tomas Medina and Santos Tenorio; the two last named were lessees for about thirty years and twenty-
seven years, respectively, of certain portions of the hacienda with their respective part of said strip, as a
prolongation and integral part of the lands of the hacienda, and they were never molested or interfered
with by the Augustinian Fathers or their tenants, nor later by Julia Tuason, who later acquired the
adjoining land on the other side of the creek, or by her tenants; these latter when cultivating the land
did not cross the creek, it being recognized as the boundary line between both properties; that in 1871
the said creek was wider than at present, having then a width of about 4 Spanish yards, small bancas
plying on it around the Island of Suavoy,. and some of the monuments of the hacienda were 4 meters
distant from the bank, others 2 meters, and some 1 meter; that the witness Santos Tenorio was present
at an interview held between an Augustinian priest named Martinez, in charge of the land at the time,
and the owner of the hacienda, Bonifacio Roxas, in connection with the boundary line of the two
adjoining estates, and after some explanations the said creek was settled as the limit in spite of the fact
that the old monuments were already in existence at some distance from the bank in the direction of the
hacienda; and that in 1882, when the first-named witness, Rafael Rivera, took charge of his office of
collector, the owner of the hacienda pointed out to him the said creek as the limit of his property,
everybody asserting that Suavoy was at that time an island, although two of the witnesses of the
respondent stated that said creek was only a canal.
The proven fact that said creek was wider in 1871, when it had a width of about 4 Spanish yards, is the
best explanation as to why some of the monuments of the Hacienda of San Pedro Macati are now at
some distance from the bank of the same, and no legal reason whatever exists why the slow increase
which has taken place on the hacienda's side should be considered as belonging to the respondent,
inasmuch as the latter does not own the bed of the creek and because it may be assumed that the slow
decrease in the width thereof benefited both properties equally since the respondent has not been able
to show or prove that her land has been thereby reduced.
Article 366 of the Civil Code in dealing with the right of accession to real property reads: lawphil.net
The accretions which banks of rivers may gradually receive from the effects of the currents
belong to the owners of the estates bordering thereon.
The provision in this article is perfectly applicable to the strip of land, which, on account of the
accretion, has come to be undeniable increase in the land of the hacienda inasmuch as it has increased
all along the bank of the creek, the gradual effect of the currents; and even though the law does not
require an express act of possession of the accretion which has enlarged the estate, it is certain that the
owner of the hacienda has possessed it for more than thirty years through his tenants, who have been
cultivating their respective parcels of land together with the corresponding portion of the said strip
down to the bank of said creek.
For these considerations the question of the situation of the old monuments and the placing of new ones
in the intervening space is of no importance, inasmuch as it has already been shown that the respondent
has no title to the accretion which by spontaneous increase formed the strip of land between the creek
and the monuments, and no proof is offered in the record that the land of Julia Tuason reached the other
side of the creek toward the Hacienda of San Pedro Macati.
In conclusion: The result of the evidence, as stated in the judgment appealed from, does not maintain
the claim of the respondent; on the contrary, it has been shown in a convincing manner that the present
natural limit of both properties is the aforesaid creek; therefore, the opposition filed by Julia Tuason is
untenable.
As to the opposition filed by the municipality to the registration applied for, the judgment appealed
from is held to be in accordance with the law and the merits of the case because, as is therein set forth,
the petitioner, Pedro Roxas, is the owner of the building lots and portions of land to which the said
opposition refers; the municipality of San Pedro Macati has only the usufruct of the plot occupied by
the municipal building as long as the same or any other building of a public and official nature is
erected thereon; the municipality can not dispose of it as a property of its own because, according to the
documents offered in evidence by the petitioner, the Spanish Government had recognized the dominion
of the petitioner's predecessor over the land occupied by said municipal building and by the town
cemetery, and the grant made by the owner was ever understood to be only of the usufruct thereof so
long as used for public purposes, the same being returnable to him upon ceasing to be used for such
purpose.
In connection with the land occupied by the public school of said town, no opposition based on
ordinary or on extraordinary prescription may be made by the municipality because the plot was
granted only for the purpose of erecting thereon a public school, and the possession thereof, on the part
of the municipality, was simply usufructuary, the government of the Province of Manila having
recognized the title thereto which pertained to the petitioner, owner of the said hacienda, whereof the
said plot forms a part; moreover, the possession thereof by the municipality has been but for a few
years only. The school building having been destroyed, the land was abandoned many years ago, and
for this reason prescription can not be invoked because the possession thereof was interrupted and
ceased many years since; in view thereof, the decision of the lower court respecting the petition of the
municipality is held to be in accordance with the law and the merits of the case.
The attorney for Alejandro and Consolacion Aguirre excepted to the decision of the 17th of October,
1906, whereby their claim to the second parcel of land, as stated in their petition, was dismissed; their
bill of exceptions, entered in the general register under No 3788, was duly forwarded, but
notwithstanding the fact that the time prescribed has been exceeded, the appellants have not filed their
brief nor notified the appellee regarding the same; therefore, the latter by a petition dated June 26,
1907, requested that their appeal be considered as having been abandoned; this request is held to be
well based and in accordance with the law.
Therefore, by virtue of the considerations above set forth, it is our opinion that the judgment appealed
from should be affirmed as regards the respondents who have appealed, Julia Tuason and the
municipality of San Pedro Macati; the appeal of Alejandro and Consolacion Aguirre is hereby declared
to be abandoned, each of the appellants to pay their respective share of the costs. So ordered.
Arellano, C.J., Johnson, Willard and Tracey, JJ., concur.lawphil.net
The Lawphil Project - Arellano Law Foundation

SUPREME COURT
Manila
EN BANC
G.R. No. L-4012 March 25, 1908
MAXIMO CORTES Y PROSPERO, petitioner-appellant,
vs.
THE CITY OF MANILA, respondent-appellee.
J.R. Serra for appellant.
M. Reyes for appellee.
TORRES, J.:
On the 26th of September, 1906, Maximo Cortes filed a written application for the registration of a
parcel of land owned by him, free of all incumbrances, situated in Calle Aguilar, corner of Calle Cecilia
in the district of Binondo, this city, together with the buildings erected thereon, which land has an area
of 1,172.21 square meters, its boundaries being stated in the application. The land was acquired by the
applicant by purchase from Higinio Francisco y Prospero, according to a deed of sale dated July 3,
1894, recorded in the registry of property, no other person having any title to or interest therein, and the
property was assessed, for the purpose of taxation of the last fiscal year, at $1,444, United States
currency. The buildings erected thereon were paid for by the applicant with his own money, and the
application is accompanied by the deed of sale, plan, and technical description of the land.
The examiner of titles reported, in due course, that the said building lot was attached by reason of
certain proceedings instituted against the applicant for reason and rebellion, yet, inasmuch as the land
was acquired by him more than ten years previously, he could be considered the real owner thereof by
prescription; but that, in order to obtain title, it was necessary for him to show that said attachment had
been discharged or canceled, for which reason he considered the title of the applicant to be defective
and that it could not be registered.
Against the claim of the applicant the attorney for the city of Manila objected and reproduced the
verbal opposition offered in the case, alleging that both the plan and the technical description exhibited
contained errors; that there was an excess in the measurement which affected the interests of the city,
and that, should the application be granted, an area of 33.40 square meters of the Meisic Creek would
become the property of Maximo Cortes, when, as a matter of fact, the said creek was one of public use
and belonged to the city of manila. For these reasons he asked that the registration applied for be
denied in so far as it affected the Meisic Creek, with costs against the applicant.
Upon an examination of the evidence adduced, the judge rendered his decision on the 11th of March,
sustaining the opposition of the city of Manila, and ordering that the said land, including its walls, be
adjudicated and registered in favor of the applicant upon presentation of an amended description,
showing the measurements of the property, including its walls but excluding therefrom the rest of the
land shown in Exhibit A.
The applicant asked that the case be reopened on account of his having discovered very important
proof; to this end he filed an affidavit stating that he had learned the whereabouts of the original owner
of the land, who was better informed with respect to its conditions and location; but, as said motion was
overruled, he excepted to the judgment and also moved for a new trial on the ground that the decision
of the court was contrary to law and to the weight of the evidence. This motion was likewise denied
and exception taken.
The dominion of the applicant, Maximo Cortes, over the land or building lot acquired by him from
Higinio Francisco y Prospero, according to the public deed executed before a notary on the 3rd of July,
1894, registered in the registry of property, is unquestionable and has been fully proven; and, in view of
the validity of his title, the city attorney had to limit his opposition to the registration simply to its
effect upon the Meisic Creek. The court, upon previous declaration of general default, then ordered the
adjudication and registration of the title of the applicant, Cortes, to said building lot upon submitting an
amended description of the land.
It having been satisfactorily shown that the portion of land included in the technical description
presented by the applicant, situated between the lot to which said instrument refers and the bed of the
Meisic Creek, has been gradually formed by alluvion, as the result of the current in the said stream, it
can not be denied that said portion of land with an area of 33.40 square meters, belongs by right
accretion to the owner of the land referred to in the instrument of the 3rd of July, 1894, exhibited by the
applicant.
The Law of Waters, promulgated by royal decree of the 3d of August, 1866, and extended to these
Islands by a royal decree dated April 8, 1873, provides in article 84 that —
The accretion resulting from the gradual deposit by or sedimentation from the waters belongs to
the owners of land bordering on streams, torrents, lakes, and rivers.
Article 366 of the Civil Code provides that —
The accretions which banks of rivers may gradually received from the effects of the currents
belong to the owners of the estates bordering thereon.
There is no evidence whatever to prove that the addition to the said property was made artificially by
the owner; therefore, the facts alleged and proven in the proceedings must stand. The increase or
accretion which in a latent, incessant, and spontaneous manner is received by the land from the effects
of the current depositing, in the course of time, sediment and alluvial matter along the shore, is
undeniably the work of nature and lawfully belongs to the owner of the property; and from the fact that
all or almost the whole area of said increased portion is soft and unsettled, one is naturally convinced
that it was formed by alluvion, and that for such reason it appertains to the owner of the land bordering
thereon by virtue of the right of accretion recognized by the law.
The reason therefore is quite evident because, if lands bordering on streams are exposed to floods and
other damage due to destructive force of the waters, and if by virtue of law they are subject to
incumbrances and various kinds of easements, it is only just that such risks or dangers as may prejudice
the owners thereof should in some way be compensated by the right of accretion.
And, although the acts of possession exercised over the bordering land are always understood legally to
cover that portion added to the property by accretion, in this case shrubs have been planted there, which
furnish additional proof that Maximo Cortes has exercised rights of ownership and possession over the
whole area of the property the registration of which he requests.
For the reasons above set forth it is our opinion that the judgment appealed from should be reversed, as
we do hereby reverse the same, and that the court below should direct that the land to which the
appellant refers be recorded in the registry of property in accordance with the law, including that
portion of the same added by accretion up to the water line of the Meisic River, without any special
ruling as to costs. So ordered.
Arellano, C.J., Mapa, Johnson, Carson, Willard, and Tracey, JJ., concur.

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-39248 May 7, 1976
REPUBLIC OF THE PHILIPPINES, represented by the DIRECTOR OF LANDS, plaintiff-
appellee,
vs.
HEIRS OF LUISA VILLA ABRILLE, defendant-appellant, LAND REGISTRATION
COMMISSIONER and THE REGISTER OF DEEDS OF DAVAO CITY, defendants.
Solicitor General Estelito P. Mendoza, Assistant Solicitor General Octavio R. Ramirez and
Atty. Baltazar Llamas plaintiff-appellee.
Jose R. Madrazo, Jr. for defendant-appellant.
Gregorio Bilog, Jr. for defendant Land Registration Commissioner.
ESGUERRA, J.:
This case was originally appealed to the Court of Appeals where it was docketed as CA-G.R.
No. 47438-R. The Court of Appeals certified it to this Court for final consideration and
resolution of the pure question of law involved.
The factual background of the case is as follows:
On May 9, 1969, a Complaint for Annulment of Certificate of Title was filed by the Republic of
the Philippines (represented by the Director of Lands), with the Court of First Instance of
Davao, Branch 1, alleging, among others, the following:
3. That defendant Commissioner of Land Registration and defendant Register of
Deeds of Davao City whose Offices are at España Extension, Quezon City and
Davao City, respectively. "(are included in this complaint, the first being the
public Official charged under the law with the approval )." subdivision surveys of
private lands while the second is the Official vested with the authority to issue
certificates of titles, pursuant to the provisions of Act 496, as amended,
otherwise known as the Land Registration Law;
4. That defendant Estate of Luisa Villa Abrille (now Heirs of Luisa Villa Abrille) is
the owner of a parcel of land in the City of Davao containing an area of FIVE
HUNDRED TWENTY FIVE THOUSAND SIX HUNDRED FIFTY TWO SQUARE
METERS (525.652), more or less, under Transfer Certificate of Title No. T-1439
of the Registry of Deeds of Davao City, issued in her name;
5. That deceased Luisa Villa Abrille during her lifetime caused the subdivision of
the aforesaid parcel of land into two lots designated as Lots Nos. 379-B-2-B-1
and 379-B-2-B-2 under subdivision plan (LRC) Psd-69322 which was approved
by the Land Registration Commissioner on March 17,1967;
6. That under Subdivision Plan (LRC) Psd-69322, Lot No. 379- B-2-B-1 contains
an area of 30,100 Square Meters while Lot No. 379-B-2B-2 contains an area of
577,679 Square Meters or a total area of 607,779 Square Meters, which is
82,127 Square Meters more than the original area covered in Transfer
Certificate of Title No. T-1439 in the name of said defendant Luisa Villa Abrille;
7. That on March 27, 1967 or ten days after the approval by the Land
Registration Commissioner, said Luisa Villa Abrille was able to secure an order
from the Court of First Instance of Davao in LRC (GLRO) Doc. No. 9969,
directing the Register of Deeds for the City of Davao and Province of Davao, to
correct the area of Certificate of Title No. T-1439 and thereafter to cancel the
same and issue in lieu thereof TCT Nos. T-18886 and T-18887;
8. That on March 30, 1967, the Register of Deeds concerned registered Lot 379-
B-2-B-1 and issued TCT No. 18886 therefor, in the name of Luisa Villa Abrille
and on the same date registered Lot No. 379-B-2-B-2 and issued TCT No.
18887 in the name of Luisa Villa Abrille;
9. That the registration of Lot No. 379-B-2-B-2, which includes the
aforementioned excess area of 82,127 Square Meters, was not in accordance
with law for lack of the required notice and publication as prescribed in Act 496,
as amended, otherwise known as the Land Registration Law;
10. That the excess or enlarged area of 82,127 Square Meters as a result of the
approval of the subdivision survey (LRC) Psd-69322 was formerly a portion of
the Davao River which dried up by reason of the change of course of the said
Davao River; hence a land belonging to the public domain; and
11. That as a consequence thereof, Transfer Certificate of Title No. 18887 which
covers Lot No. 379-B-2-B-2 of Subdivision Survey (LRC) Psd-69322, wherein
the excess area of land belong to the public domain (not private land) is null and
void ab initio.
On June 10, 1969, defendant Register of Deeds of Davao- City filed her answer averring that
she, "in the performance of her ministerial duty, honestly and in good faith effected the
registration of Subdivision Lot No. 379-B-2-B-1 and Lot No. 379B-2-B-2 and the issuance of
corresponding TCT No. 18886 and TCT No. 18887 therefor, respectively, in view of the
approval of the Land Registration Commissioner of Subdivision Plan (LRC) Psd-69322, and in
view of the Order of the Court of First Instance of Davao to correct the area in Certificate of
Title No. T-1439, to cancel the same and to issue in lieu thereof TCT Nos. T-18886 and T-
18887".
On July 2, 1969, herein defendant-appellants filed their answer admitting the allegations
contained in paragraphs 1, 3, 4, 5 and 7 of the complaint; that they admit the increase in area
of the land of their predecessor but that the increase in area of the land was acceded to and
concurred in by the defendant, Land Registration Commissioner, and the same was duly
noted and approved by the Court of First Instance of Davao; that they admit the issuance of
TCT Nos. T-18886 and T-18887 out of Certificate of Title No. T- 1439 in the name of their
predecessor-in-interest Luisa Villa Abrille but that TCT No. T-18886 had been cancelled and
in lieu thereof, TCT No. T-19077 was issued in favor of Gaudencio Consunji, and, TCT No. T-
18887 had likewise been cancelled and several Transfer Certificates of Title were issued
thereunder; that the subject increase of area was made in accordance with law and existing
jurisprudence; and that Luisa Villa Abrille, predecessor-in-interest of herein defendant-
appellant, as riparian owner was entitled under the law to claim, as she did, the increase or
excess in area of her original land as her own.
On August 12, 1969, defendant Commissioner of Land Registration prays for a judgment on
the pleadings and avers in his answer that he has no knowledge of the subject matter of the
complaint since the subdivision plan involved therein was approved by the then
Commissioner of Land Registration, Antonio Noblejas; and that on February 19, 1968, the
then Commissioner of Land Registration, Antonio Noblejas, issued LRC Circular No. 167
directing the Register of Deeds throughout the Philippines to, among others, deny the
registration of subdivision plans with increased or expanded areas and to withhold the
issuance of the corresponding titles, or if the plans have already been registered and the titles
issued, to recall the titles and to take appropriate steps for their cancellation.
Some private persons, as actual possessors and occupants, tried to intervene in the case as
movant-intervenors but they were denied standing in court by the trial court in its order of
August 16,1969.
On January 6, 1970, the parties litigants submitted in court their "Agreed Stipulation of Facts"
and pray that judgment be rendered by the trial court on their case based on their stipulation
of facts. The "Agreed Stipulation of Facts" of the parties reads as follows:
COME NOW the parties assisted by their respective attorneys, and unto the
Honorable Court, most respectfully submit the following stipulation of facts and
allege:
1. That Lot 379-B-2-B was originally registered on June 28, 1916 in the Registry
Book of the Register of Deeds of Zamboanga as Vol. A27, Page 40 under
Original Certificate of Title No. 5609, Case No. 1, G.L.R.O. Rec. No. 317, in the
name of Francisco Villa Abrille Lim Juna, father of Luisa Villa Abrille;
2. That upon the death of the original owner, the said property was inherited by
Luisa Villa Abrille and Transfer Certificate of Title No. T-1439 was issued in the
name of said Luisa Villa Abrille;
3. That subsequently, by virtue of an approved subdivision plan Psd-69322 by
the defendant, Land Registration Commissioner, Transfer Certificate of Title
Nos. T-18886 and 18887 were issued by the defendant, Register of Deeds of
Davao, copy of which subdivision plan is hereto attached as Annex "A", and
made integral part hereof;
4. That Transfer Certificate of Title No. T-18886 was subsequently cancelled by
virtue of deed of sale, and Transfer Certificate of Title No. T-19077 was issued in
the name of Gaudencio Consunji a purchaser in good faith and for value;
5. That the said subdivision plan Annex "A" was also approved by the Court of
First Instance of Davao, Branch IV, through an Order dated March 27, 1967,
copy of which order is hereto attached as Annex "B" and made part hereof;
6. That the said Order Annex "B" was issued by the Court of First Instance of
Davao, Branch IV, on the strength of the Report of the defendant, Land
Registration Commissioner, copy of which report is hereto attached as Annex
"C" and made integral part hereof;
7. That much later on, Transfer Certificate of Title No. T-18887 was by virtue of
an Order of the Court of First Instance, Branch 1, in Special Proceedings No.
1357, entitled: In the Matter of the Testate Estate of Luisa Villa Abrille, approving
a project of partition cancelled, and in lieu thereof, the following Transfer
Certificates of Title were issued to the following named persons, to wit:
(a) T-20690 - Huang Siu Sin;
(b) T-20692 - Huang Siu Sin;
(c) T-20701 - Josefino Huang;
(d) T-20702 - Josefino Huang;
(e) T-20703 - Josefino Huang;
(f) T-20732 Huang Siu Sin, et al.;
(g) T-20733 - Huang Siu Sin, et al.;
(h) T-20713 - Miguel Huang;
(i) T-23015 - Miguel Huang;
(j) T-20725 - Milagros Huang;
(k) T-20726 - Milagros Huang;
which certificates of title were issued on the basis of a subdivision plan LRC
Psd-71236 duly approved by the defendant, Land Registration Commissioner,
copy of which subdivision plan (LRC) Psd-71236 is hereto attached as Annex
"D" and made integral part hereof;
8. That the parties admit that there was an increase in the area of Lot 379-B-2-
B, but the same was with the knowledge of the defendant, Land Registration
Commissioner and the court of First Instance of Davao, Branch IV;
9. That the parties admit that no registered owner has been affected or
prejudiced in the increase in area as only Luisa Villa Abrille as the registered
owner holds property adjacent to the parcel of land in question;
10. That the portion of land subject of the increase adjoins Lot 379-B-2-B and
abuts the Davao River;
11. That the parcel of land subject of the increase is fully planted with coconuts,
bananas and other seasonal crops by the defendants, through their
predecessor-in-interest;
12. That the increase in area could have taken place very long time ago as the
coconuts planted thereon had long been fruit bearing;
13. That Transfer Certificate of Title No. 18886 does not contain any portion of
the increase in area;
14. That of the certificates of title issued based under subdivision plan (LRC)
Psd-71236, only Transfer Certificates of Title Nos. T- 20725; T-20701; T-20713;
and T-20690 contain the increase in area; while all the other certificates of title
issued under subdivision plan (LRC) Psd-71236 do not contain any increase in
area;
15. That the parties agree that the issuance of the Order Annex "B" was without
notice to the Director of Lands.
The trial court thereafter rendered its decision dated January 27, 1970, which
reads as follows:
This is an ordinary civil action for annulment of certificate of title instituted by the
Republic of the Philippines, represented by the Director of Lands, against the
Estate of Luisa Abrille, represented by Huang Siu Sin, Administrator, the Land
Registration Commissioner and the Register of Deeds of the City of Davao.
Because the residue of the intestate estate of Luisa Villa Abrille had been
divided among Huang Siu Sin, Josefino Huang, Milagros Huang, Miguel Huang
and lap Tong Ha, heirs, they were directed to appear and to substitute for the
intestate estate and they did.
The parties submitted the following stipulation of facts:
xxx xxx xxx
The increase in area of the land covered by Original Certificate of Title No. 5609
of the Register of Deeds of Davao in the name of Francisco Villa Abrille Lim
Juna and subsequently by Transfer Certificate of Title No. T. 1439 in the name of
Luisa Villa Abrille and finally, based on subdivision plan (LRC) Psd-71236, by
Transfer Certificates of Title Nos. T-20725 in the name of Milagros Huang,
T20701 in the name of Josefino Huang, T-20713 in the name of Miguel Huang
and T-20690 in the name of Huang Siu Sin, is from 525,652 square meters to
607,779 square meters, or 82,127 square meters.
The remedy sought by defendant heirs of Luisa Villa Abrille in order to include
the increase in area was a petition for approval of Subdivision Plan (LRC) Psd-
79322 recommended by the Commissioner of Land Registration in his Report,
and for issuance of new title under Section 44, Act 496, as amended, filed with
this court, which was assigned to Branch IV.
Even pursuant to Section 44 of Act 496 under which the aforesaid remedy was
sought, notice before the hearing is required. The parties admit that there was
no notice to the persons interested, including the Director of Lands, before the
petition was heard.
Worse, the increase in area could not have been included in Transfer
Certificates of Title Nos. T-20725, T-20701, T-20713 and T-20690 even
assuming arguendo that the same belonged to the owner of the land to which it
is adjacent by the simple expediency of a petition for approval of subdivision
plan and issuance of new titles, because a subdivision of a registered land
under Section 44 of Act 496 does not authorize the inclusion of land or area not
embraced in the titled or in excess of what is stated in the title. And the approval
by the Court of such subdivision plan does not lend validity to it. The subdivision
must be limited to the area stated in the title. Neither amendment of the title
under Section 112 of Act 496 would be a valid remedy 1.
The heirs of Luisa Villa Abrille.. owners of the adjacent estate, might have
acquired a registrable title to the land in question but to bring it under the
operation of the Land Registration Act, a petition for registration under Act 496
should have been filed. More so when the title acquired is by continuous
possession for at least 30 years under a claim of ownership And even assuming
that the land is an accretion, the fact that the riparian estate is registered does
not bring ipso facto effect its accretion thereto under the operation of the Land
Registration Act. No decree of registration of the land based upon final judgment
promulgated by a court of competent jurisdiction after due publication, notice
and hearing, has been issued by the Commissioner of Land Registration and
transcribed by the Register of Deeds of Davao in the registry, for the reason that
no initial or original registration proceedings have been instituted by the owner.
And the only way by which a title to the land in question can be issued for the
first time is for the Land Registration Commissioner to issue a decree of
registration based upon final judgment rendered by a court of competent
jurisdiction after trial.
WHEREFORE, judgment is hereby rendered cancelling Transfer Certificates of
Title Nos. T-20725, T-20701, T-20713 and T-20690 and directing the Register of
Deeds of Davao to issue new certificates of title in lieu thereof after the portions
consisting of 82,127 square meters, the land involved, shall have been
segregated therefrom in accordance with law.
Not satisfied with the judgment of the trial court, defendant Heirs of Luisa Villa Abrille brought
the case on appeal to the Court of Appeals. The Court of Appeals, however, in its Resolution
dated July 22, 1974, certified the case (CA-G.R. No. 47438-R) to this Court for consideration
and final disposition.
Defendant-appellant maintains that the lower court erred in holding the approval of
Subdivision Plan (LRC) Psd-69322 of no legal effect merely on ground of lack of notice to
interested persons, and in ordering the cancellation of Certificates of Title Nos. T-20725, T-
20701, T-20713 and T-20690. It is the contention of the defendant-appellant that since the
government agencies having to do with lands know all the time the increase in area in
subdivision plan Psd-69322, and the government agencies concerned tolerated if not abetted
the ultimate inclusion of the involved increase in area, defendant-appellant should not be
made to suffer the effect of the allegedly wrong procedure or step taken in the approval of the
aforementioned subdivision plan. Besides, defendant-appellant claims that it is their honest
belief that the legal remedy taken by them in seeking the approval of their subdivision plan
concerned was well within the law, particularly the provision of Section 44 of Act 496, as
amended.
Plaintiff-appellee, on the other hand, maintains that the approval of the subdivision plan, with
the increase in area, by the defendant-appellant Land Registration Commission does not lend
validity to the said subdivision plan; and that the issuance of the four transfer certificates of
title (Nos. T-20725, T-20701, T-20713 and T-20690) over the increased area in question is
improper and invalid notwithstanding the conformity of the Land Registration Commissioner
and the subsequent order of the Court of First Instance of Davao, Branch IV, approving the
subdivision plan concerned, as the required giving of notice to all parties interested in
defendant-appellant's petition for approval of subdivision plan was not at all followed,
Before Us, therefore, for consideration and final resolution, in order to arrive at a judicious
disposition of the case at bar, is whether or not the lower court erred in ordering the
cancellation of Transfer Certificates of Title Nos. T-20725, T-20701, T-20713 and T-20690
which cover the increased area in question totalling 82,127 square meters.
After a careful and thorough deliberation of the matter in controversy, We are of the opinion
and so hold that the lower court acted correctly in ordering the cancellation of Transfer
Certificates of Title Nos. T-20725, T-20701, T-20713 and T-20690 which admittedly covered
the increased area of 82,127 square meters under Subdivision Plan (LRC) Psd-71236 (and
formerly under Psd-69322) for the City of Davao.
Certainly, the step taken by defendant-appellant in petitioning the court for the approval of
their Subdivision Plan (LRC) Psd-69322 and then Psd-71236 to include the questioned
increased area of 82,127 square meters is, to say the least, unwarranted and irregular. This is
so, for the increased area in question, which is not a registered land but formerly a river bed,
is so big as to give allowance for a mere mistake in area of the original registration of the
tracts of land of the defendant-appellant formerly belonging to and registered in the name of
their grandfather, Francisco Villa Abrille Lim Juna. In order to bring this increase in area,
which the parties admitted to have been a former river bed of the Davao River, under the
operation and coverage of the Land Registration Law, Act 496, proceedings in registrations of
land title should have been filed Instead of an ordinary approval of subdivision plan.
It should be remembered that recourse under Section 44 of Act 496, which the predecessor-
in-interest (Luisa Villa Abrille) of the herein defendant-appellant took, is good only insofar as it
covers previously registered lands. In the instant case, part of the tracts of land, particularly
the area of 82,127 square meters, has not yet been brought under the operation of the
Torrens System. Worse still, the approval of Subdivision Plans (LRC) Psd-69322 and Psd-
71236 was without notice to all parties in interest, more particularly the Director of Lands. For
an applicant to have his imperfect or incomplete title or claim to a land to be originally
registered under Act 496, the following requisites should all be satisfied:
1. Survey of land by the Bureau of Lands or a duly licensed private surveyor;
2. Filing of application for registration by the applicant;
3. Setting of the date for the initial hearing of the application by the Court;
4. Transmittal of the application and the date of initial hearing together with all
the documents or other evidences attached thereto by the Clerk of Court to the
Land Registration Commission;
5. Publication of a notice of the filing of the application and date and place of the
hearing in the Official Gazette;
6. Service of notice upon contiguous owners, occupants and those known to
have interests in the property by the sheriff;
7. Filing of answer to the application by any person whether named in the notice
or not;
8. Hearing of the case by the Court;
9. Promulgation of judgment by the Court;
10. Issuance of the decree by the Court declaring the decision final and
instructing the Land Registration Commission to issue a decree of confirmation
and registration;
11. Entry of the decree of registration in the Land Registration Commission;
12. Sending of copy of the decree of registration to the corresponding Register
of Deeds, and
13. Transcription of the decree of registration in the registration book and the
issuance of the owner's duplicate original certificate of title to the applicant by
the Register of Deeds, upon payment of the prescribed fees.
Hence, with the foregoing requisites not having been complied with, the lower court
committed no error in its appealed decision dated January 27, 1970.
WHEREFORE, the judgment appealed from is hereby affirmed in toto.
No special pronouncement as to costs.
SO ORDERED.
Teehankee (Chairman), Makasiar, Muñoz Palma and Martin, JJ., concur.

epublic of the Philippines
SUPREME COURT
Manila
EN BANC
G.R. No. L-30829 August 28, 1929
THE GOVERNMENT OF THE PHILIPPINE ISLANDS, applicant-appellant,
vs.
COLEGIO DE SAN JOSE, ET AL., claimants.
COLEGIO DE SAN JOSE, appellee.
Attorney-General Jaranilla for appellant.
Vicente O. Romualdez for appellee.
VILLA-REAL, J.:
This is an appeal taken by the Government of the Philippine Islands from a decision of the Court of
First Instance of Laguna, rendered in cadastral case No. 30, G. L. R. O. Record No. 359 of the
municipality of San Pedro, Province of Laguna, ordering the registration of the two parcels of land
known as lots 1 and 2 described in the application, in favor of the Colegio de San Jose in accordance
with the provisions of law, without special pronouncement as to the costs, it being understood,
however, that the lease of said lands executed by the aforesaid Colegio de San Jose in favor of Carlos
Young y Baldwin is valid and subsists under the terms and conditions set forth in the instruments,
Exhibits Y-1 and Y-2, and providing for the issuance of the proper decree once said decision becomes
final.
In support of the appeal, the appellant assigns the following alleged errors as committed by the court
below in its judgment, to wit:
1. The lower court erred in not holding that the parcels of land in question are part of the bed of
Laguna Lake and, therefore, belong to the public domain.
2. The lower court erred in finding that said lands are included in the title of the appellee and in
finding that the appellee has been in the possession and occupation of the same.
3. The lower court erred in qualifying as extraordinary inundations the fact that the lands in
dispute are under water during the rainy season.
4. The lower court erred in decreeing the registration of the lands in dispute to the appellee and
in denying the appellant's motion for a new trial.
The pertinent facts necessary to decide the questions of fact and of law raised in the instant appeal, are
as follows:
During the months of September, October and November every year, the waters of Laguna de Bay
cover a long strip of land along the eastern border of the two parcels of land in question, the width of
which strip varies from 50 to 70 meters according to the evidence of the Colegio de San Jose and up to
the eastern border of the pass claimed by the municipality of San Pedro Tunasan, according to some
witnesses for the Insular Government; and, according to other witnesses for the Insular Government,
the flooded strip includes the aforementioned pass itself, which is usually completely covered with
water, so that the people can fish in said flooded strip.
The claimant Colegio de San Jose contends, and its evidence tends to prove, that the above-named
parcels of land are a part of the Hacienda de San Pedro Tunasan belonging to said claimant, which has
been in possession thereof since time immemorial by means of its tenants or lessees and farmers.
On the other hand, the Government of the Philippine Islands contends that the said two parcels of land
belong to the public domain, and its evidence tends to prove that they have always been known as the
shores of Laguna de Bay, and they are situated alongside the highway running parallel to said shore;
that the water of the lake has receded a great distance on that side; that said parcels of land had been
under water formerly; that at present, during the rainy season, the water of the lake reaches the
highway, and that when the water recedes the people of the place occupy and cultivate said lands
during the dry season.
The only question to be decided in the present appeal is whether the two aforesaid parcels of land in
controversy belong to the Hacienda de San Pedro Tunasan and are owned by the claimant Colegio de
San Jose, or whether they belong to the public domain as a part of the bed of Laguna de Bay.
It is of primary importance to determine whether the body of water called Laguna de Bay is naturally
and legally a lake or a lagoon.
The Enciclopedia Juridica Espanola, volume XXI, pages 124 and 125, defines "lake" and "lagoon" as
follows:
LAKE. A body of water formed in depressions of the earth. Ordinarily fresh water, coming from
rivers, brooks, or springs, and connected with the sea by them.
LAGOON. A small lake, the hollow bed of which is bounded by elevations of land.
Laguna de Bay is a body of water formed in depressions of the earth; it contains fresh water coming
from rivers and brooks or springs, and is connected with Manila Bay by the Pasig River. According to
the definition just quoted, Laguna de Bay is a lake.
Inasmuch as Laguna de Bay is a lake, we must resort to the legal provisions governing the ownership
and use of lakes and their beds and shores, in order to determine the character and ownership of the
parcels of land in question.
Article 407 of the Civil Code says the following in its pertinent part:
ART. 407. The following are of public ownership:
xxx xxx xxx
4. Lakes and ponds formed by nature on public lands, and their channels.
xxx xxx xxx
And article 44 of the Law of Waters of August 3, 1866, provides as follows:
ART. 44. Natural ponds and lakes existing upon public lands and fed by public waters, belong
to the public domain.
xxx xxx xxx
It is beyond discussion that Laguna de Bay belongs to the public domain, being a natural lake existing
upon public lands, and fed by public waters from rivers, brooks and springs.
Now then, what is the bed of Laguna de Bay?
Article 74 of the Law of Waters cited above defines the bed of lake as follows:
ART. 74. The natural bed or basin of lakes, ponds, or pools, is the ground covered by their
waters when at their highest ordinary depth.
This definition raises the question: Which is the natural bed or basin of Laguna de Bay?
The evidence shows tat during the dry season, that is, during the months of December, January,
February, March, April, May, June, July and August, the water of the lake at its highest depth reaches
no farther that the line forming the northeastern boundary of the two parcels of land in controversy, and
that it is only during the wet season, that is, during the months of September, October, and November,
that said water rises to the highway, completely covering said parcels of land. Therefore, the waters of
Laguna de Bay have two different levels during the year:
One during the dry season, which obtains during nine months, and the other during the wet season,
which continues for three months. Which of these two heights marks the land limit of the waters of
Laguna de Bay, that is, which of them forms its natural bed or basin? The law says, the highest ordinary
depth. Now then, which of the two aforesaid depths of the waters of Laguna de Bay is the ordinary
one? The word "ordinary" is defined in the Dictionary of the Spanish Academy as follows:
ORDINARY. Not exceeding the average; common, natural, occurring always or most of the
time; not going beyond what happens or takes place.
The word extraordinary is defined in the same dictionary as follows:
EXTRAORDINARY. Uncommon, transcending the general rule, order or measure; exceeding,
surpassing, or going beyond that which is ordinary, commonly met with, current, settled, or
admitted by the majority.
According to the foregoing definitions of the words "ordinary" and "extraordinary," the highest depth
of the waters of Laguna de Bay during the dry season is the ordinary one, and the highest depth they
attain during the rainy season is the extraordinary one; inasmuch as the former is the one which is
regular, common, natural, which occurs always or most of the time during the year, while the latter is
uncommon, transcends the general rule, order of measure, and goes beyond that which is the ordinary
depth. If, according to the definition given by article 74 of the Law of Waters quoted above, the natural
bed or basin of the lakes is the ground covered by their waters when at their highest ordinary depth, the
natural bed or basin of Laguna de Bay is the ground covered by its waters when at their highest depth
during the dry season, that is, up to the northeastern boundary of the two parcels of land in question.
Inasmuch as, according to article 407 of the Civil Code, cited above, lakes and their beds belong to the
public domain, and inasmuch as, according to article 74 of the Law of Waters cited above, the bed of
lake is the ground covered by its waters at their highest ordinary depth; whereas the waters of Laguna
de Bay at their highest depth reach no farther than the northeastern boundary of the two parcels of land
in question, said parcels are outside said bed and, consequently, do not belong to the public domain.
The Government of the Philippine Islands also contends that as the waters of Laguna de Bay have
receded very much, as a result of which the two parcels of land under discussion, which had been under
water before, were left uncovered, the claimant Colegio de San Jose which owned the estate bordering
upon said Laguna de Bay, did not acquire said two parcels of land, in accordance with the provisions of
article 367 of the Civil Code, as follows:
ART. 367. The owners of estates bordering on ponds or lagoons, do not acquire the land left dry
by the natural decrease of the waters, nor lose those inundated by them in extraordinary floods.
As may be seen, the legal provision quoted above, cited by the appellant in support of its contention,
refers to ponds and lagoons, and has therefore no application to the case at bar, which refers to a lake, a
lagoon being legally distinct in character from a lake.
Having pointed out that the inundations of the two parcels of land in question during the months of
September, October and November, is extraordinary, the legal provision applicable to the case is that
contained in article 77 of the aforesaid Law of Waters, which reads:
ART. 77. Lands accidentally inundated by the waters of lakes, or by creeks, rivers, and other
streams, shall continue to be the property of their respective owners.
If, as we have seen, the two parcels of land in litigation form no part of the bed of Laguna de Bay, and
consequently, do not belong to the public domain, they must belong to the claimant Colegio de San
Jose as a part of the Hacienda de San Pedro Tunasan, owned by it, the northeastern part of which
borders on said lake, and in accordance with the legal provision just quoted, the fact that they are
inundated by its waters during extraordinary risings, which take place during the months of September,
October and November, does not deprive said claimant of the ownership thereof.
Article 84 of the said Law of Waters further provides:
ART 84. Accretions deposited gradually upon lands contiguous to creeks, streams, rivers, and
lakes, by accessions or sediments from the waters thereof, belong to the owners of such lands.
xxx xxx xxx
Even if, therefore, the two parcels of land in litigation were considered as accretions gradually
deposited by accessions or sediments from the waters of Laguna de Bay, they would still, according to
the legal provision just quoted, belong to the claimant Colegio de San Jose as owner of the lands
bordering on said Laguna de Bay.
The appellant also contends that the two parcels of land form a part of the shores of Laguna de Bay and
are therefore of public ownership, citing paragraph 3 of article 1 of the Law of Waters, which says:
ART. 1. The following are part of the national domain open to public use:
xxx xxx xxx
3. The shores. — By the shore is understood that space covered and uncovered by the
movement of the tide. Its interior or terrestrial is the line reached by the highest equinoctial
tides. Where the tides are not appreciable, the shore begins on the land side at the line reached
by the sea during ordinary storms or tempests.
As the court below correctly held, this legal provision refers to the waters of the sea, being included
under Title I, which treats of the ownership and use of said waters of the sea. Lake waters, being
terrestrial waters, their ownership and use are governed by Title II of said Law of Waters. In the same
manner as the shore of the sea is that space covered and uncovered by the waters during the tides, its
interior or terrestrial limit being the line reached by its highest ordinary depth. In the instant case, the
interior or terrestrial limit of the Laguna de Bay is the ground covered by its waters in its highest
ordinary depth, that is, up to the northeastern boundary of the two parcels of land in question.
Summarizing, we find: (1) That the natural bed or basin of Laguna de Bay is the ground covered by its
waters at their highest ordinary depth during the dry season, that is, during the months of December,
January, February, March, April, May, June, July and August; (2) that the highest depth reached by said
waters during the rainy season, or during the months of September, October and November, is
extraordinary; (3) that the two parcels of land in litigation form an integral part of the Hacienda de San
Pedro Tunasan belonging to the claimant Colegio de San Jose; (4) that said two parcels of land, being
accidentally inundated by the waters of Laguna de Bay continue to be the property of the claimant
Colegio de San Jose (art. 77, Law of Waters of August 3, 1866); (5) that even supposing that the said
two parcels of land have been formed by accession or deposits of sediment by the waters of said
Laguna de Bay, they still belong to the said claimant Colegio de San Jose, as owner of the land of the
Hacienda de San Pedro Tunasan, bordering on said Laguna de Bay (art. 84, Law of Waters of August
3, 18660; (6) that the provisions of the Law of Waters regulating the ownership and use of the waters of
the sea are not applicable to the ownership and use of lakes, which are governed by special provisions.
In the view of the foregoing considerations, we are of the opinion and so hold, that the judgment
appealed from should be affirmed, without special pronouncements as to costs. So ordered.
Avanceña, C.J., Johnson, Villamor and Johns, JJ., concur.

SUPREME COURT
Manila
EN BANC
G.R. No. L-2575 March 17, 1906
MARIA DE LA CONCEPCION MARTINEZ CAÑAS, plaintiff-appellee,
vs.
THE MUNICIPALITY OF SAN MATEO, defendant-appellant.
Hixson and Southworth, for appellant.
Carlos Casademunt, for appellee.
WILLARD, J.:
The bill of exceptions before us was presented in the same case in the Court of Land Registration, in
which was presented the bill of exceptions in the case of Maria de la Concepcion Martinez Cañas vs.
Mariano Tuason et al.,1 (4 Off. Gaz., 309), just decided. The municipality of San Mateo opposed the
petition in the court below on the ground that four certain parcels of land claimed by the petitioner to
belong to her, in fact belonged to the municipality of San Mateo. Upon this point the court below made
the following finding of fact:
1. The evidence conclusively shows that prior to or about the year 1888 the lands now claimed
by the municipality of San Mateo and covered, according to the map, by the sitio of Lupang
Cabeza and parcels marked with letters B, C, and D, formed an integral part of the Payatas
estate on the north or west side of the San Mateo River, that is to say, on the bank, of the river
opposite the one on which the town of San Mateo is located; that in the year 1888 and
subsequent years owing to sudden and marked changes in the course of the San Mateo River,
the parcels of land herein referred to were separated from the main part of the Payatas estate and
are now on the southern or eastern side of the river, where the town of San Mateo is located.
This finding is sustained by the evidence of the witnesses which the appellant itself presented; in fact,
there is no evidence to the contrary.
The provisions of the law found in article 368 of the Civil Code, and existing in the legislation prior
thereto, require a determination that these four tracts of land thus separated from the hacienda of
Payatas in 1888, still belong to the petitioner.
The appellant, however, claims that the provisions of that section are controlled by two documents
which it presented in evidence. One of these is a documents executed on the 30th day of March, 1746,
made by "Don Pedro Calderon Enriquez, del Consejo de S. M. su Oidor de la Real Audencia de estas
islas y Juez privativo de tierras en todo el distrito de ellas." This document recites that Pedro Calderon
Enriquez, had examined the record formed in connection with the allotment of the public lands which
the pueblo of San Mateo formerly possessed, and which it had lost by reason of its rebellion. It recites
the destruction of the pueblo and its abandonment, and states that the people had been pardoned for the
rebellion and had returned to the pueblo, and it was expedient that the land be assigned to them. It then
declares that in the allotment of lands there should be observed the following rules and conditions:
It is hereby declared that all of the land between the Nanca Revier and Balete as divided by the
former, which is the boundary of the Mariquina estate owned by the College of San Ignacio, of
the Sagrada Compania de Jesus, of this city, where the college has a dam for the irrigation of the
hacienda by means of an underground canal which runs beyond the slopes, said dam consisting
of a palisade along the bed of the great River of San Mateo up to the mountains, be alloted to
the said town of San Mateo, in such a manner that from the cave from which the great River of
San Mateo springs, it shall always be the fixed boundary between the lands of San Mateo and
the lands on the other side of the river; and in order that there may never be any controversy
regarding any islands which may be formed by land separated from one bank of the river and
carried over to the other, it is declared that the bed in which the river may run in the month of
March of each year, the dry season, shall always be the fixed boundary between the abutting
estates, and such islands or land shall belong to the estate on the side of the river on which they
may be formed, and the same rule shall apply to the Nanca River, provided always that the
changes are due to natural causes. If caused by the action of either party or by a dam erected by
either party, he shall not thereby gain any portion of the land, nor will such changes be
permitted. These two rivers of San Mateo and Nanca shall constitute the fixed boundary of the
said town without the limits of which no person, community, or pious land. That all of the land
shall always be the common property of the town.
The lands referred to as on the other side of the river are now the hacienda of Payatas, the property of
the petitioner. It is claimed by the appellee that Pedro Calderon Enriquez had no authority to declare
that the San Mateo River, wherever it should flow, should be the boundary between the lands of San
Mateo and the property on the other side of the river; that this was an attempt on his part to change the
general laws then in force relating to the matter. The only provision of law which the appellant has
called to our attention, and which he claims conferred any such authority upon Pedro Calderon
Enriquez, is law 9, title 31 book 2 of the "Recopilacion de las Leyes de Indias." That law is as follows:
The examiner shall see that whenever possible, the natives acquire part of the common land,
and plant thereon trees grown on this and that territory, in order that they may not become
slothful but will apply themselves to work, for their own welfare and benefit and the audiencia
will give the examiner instructions in regard to such matters as it may deem expedient and
worthy of consideration, although not provided for in the laws of this title, and will instruct him
specially as to all things contained in this law.
What instructions, if any, were given by the Audiencia to this particular justice when he made the
visitation in question, does not appear. The laws relating to the right of property in portions of land
separated by the current of a river from one bank and carried to the other, were substantially the same
in 1746 as they are now. They were general laws which governed the rights of parties as between
themselves, and like other general laws, we do not think they were subject to change at the will of an
official to whom was designated the duty of making an allotment of public lands. In our opinion Pedro
Calderon Enriquez had no more authority to make this change in the general law of descent as to the
property which was to be alloted.
The appellant also presented another document dated on the 6th day of December, 1873, which recites
that in proceedings had for the purpose of making a survey of that part of the hacienda of Payatas,
which is here in question, the principales of the pueblo of San Mateo and those of the pueblo of
Montalban, and Jose Martinez Cañas, the grantor of the petitioner, met the engineer charged with the
surveyor then asked the representatives of the pueblo of San Mateo if they agreed that the boundary
line between their lands and the hacienda of Payatas should be the San Mateo River as fixed and
invariable boundary, and they declared that they so agreed; and the same question was asked the
representatives of Montalban, and they made the same answer. The question asked Jose Martinez Cañas
was as follows:
Cañas having been asked as to whether he agreed that the boundary of his hacienda de Payatas
on the Payatas side should commence at Nanca, thence following the course of the great River
of San Mateo down to certain rocks shaped like diamond's points, which rocks are mentioned in
the document presented by him, Cañas answered in the affirmative and remarked that the rocks
were not called "punta diamante" (diamond point) but had the shape of it.
It is claimed by the appellant that this was an agreement on the part of the then owner of the estate that
the boundary between his estate and the pueblo of San Mateo should be the channel of the river,
wherever it might flow. It is difficult to know whether the representatives of San Mateo and Montalban
intended to agree that the boundary should be the then course of the river, which should be fixed and
invariable, no matter what changes the river might afterwards suffer, or whether they meant that the
boundary should be the river wherever it might flow, which would make the boundary not fixed and
invariable, but variable. If the intention was to make the boundary the then course of the river in 1873,
this agreement favors the appellee rather than the appellant, because, according to the boundary in
1873, these four parcels of land here in question were on the Payatas side of the river.
But even if this construction is not correct, we do not see how the agreement made by the
representatives of San Mateo and of Montalban can bind the present owner of the estate of Payatas,
because her grantor made no agreement as to the permanency of the boundary. It will be noticed that in
the question asked him the words "fixed and invariable" were omitted. According to the contention of
the appellant these words determine whether these four tracts of land belong San Mateo or belong to
the petitioner. They were therefore vitally important. If Jose Martinez Cañas agreed that the river
should be the boundary, then the petitioner is entitled to recover in this case, for that would be no more
than an agreement that the general law relating to changes in the river should apply. If, on the other
hand, he agreed that the river should be the boundary, wherever it might run, then there would exist
some basis for the claim of the appellants. For the purpose of determining what he did agree to, the
exclusive evidence is the document in question, and we know of no rule of law that enables us to add
anything to its words. The fact that the pueblos of Montalban and San Mateo may have agreed upon
certain boundary is not sufficient to show that Jose Martinez Cañas agreed upon the same kind of
boundary, especially when the document in question shows that he agreed upon an entirely different
one.
The judgment of the court below is affirmed, with the costs of this instance against the appellant. After
the expiration of twenty days judgment shall be entered in accordance herewith and the case remanded
to the lower court for proper procedure. So ordered.
Arellano, C.J., Torres, Mapa and Johnson, JJ., concur.
Separate Opinions
CARSON, J., concurring:
I assent. I think however, that a fair construction of the document mentioned in the last paragraph of the
majority opinion would bind Jose Martinez Cañas to the same terms and conditions as to the boundary
line in question as it imposes upon the pueblos of Montalban and San Mateo, and that the intention of
all the parties to the agreement was to make the course of the river, as it ran in 1873, the fixed and
invariable boundary line. The evident intention of the parties was to bring an end to the unsatisfactory
conditions resulting from the unauthorized regulation which was put in force in 1746 by Pedro
Calderon Enriquez, and which made the boundary line vary each year to follow the current of the river
as it happened to flow in the month of March.
This interpretation of the agreement of 1873 leads to the same result as that arrived at in the majority
opinion, because the four parcels of land in question were on the Payatas side of the river at that date.
It may not be improper to add that this view of the force and effect of that agreement does not
necessarily imply that the provisions of the general law of waters are not applicable to these lands, for
it might well be contended that the limiting words "fixed and invariable" were used simply to take them
under the unauthorized regulation of 1746, and were not intended to take them from under the
provisions of general law. This, however, is of no importance for the purpose of this decision, because
as shown in the majority opinion, if it be held that the general law of waters is applicable, the decision
should still be in favor of the appellee.
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 95907 April 8, 1992
JOSE REYNANTE, petitioner,

vs.
THE HONORABLE COURT OF APPEALS, THE HON. VALENTIN CRUZ, as Presiding Judge, Regional Trial Court of Bulacan, Branch VIII, and the HEIRS
OF LEONCIO CARLOS and DOLORES A. CARLOS, and HEIRS OF GORGONIO CARLOS and CONCEPCION CARLOS, respondents.
PARAS, J.:
This is a petition for review on certiorari which seeks the reversal of: a) decision 1 of the Court of Appeals dated February 28, 1990 in CA-G.R. No. 1917 entitled
"JOSE REYNANTE versus HON. VALENTIN CRUZ, Judge, RTC of Malolos, Bulacan, and HEIRS OF LEONCIO AND DOLORES CARLOS, et al.", affirming the
decision 2 of the Regional Trial Court
of Malolos, Bulacan, Branch 8, Third Judicial Region which reversed the decision 3 of the Municipal Trial Court of Meycauayan, Bulacan, Branch 1, Third Judicial
Region in Civil Case No. 1526 entitled "HEIRS OF LEONCIO CARLOS & DOLORES A. CARLOS and HEIRS OF GORGONIO A. CARLOS & CONCEPCION
CARLOS versus JOSE REYNANTE: and b) the resolution denying the motion for reconsideration.
The facts as culled from the records of the case are as follows:
More than 50 years ago, petitioner Jose Reynante was taken as tenant by the late Don Cosme Carlos, owner and father-in-law of herein private respondents,
over a fishpond located at Barrio Liputan, Meycauayan, Bulacan with an area of 188.711 square meters, more or less and covered by Transfer Certificate of Title
No. 25618, Land Registry of Bulacan.
During the tenancy, petitioner Jose Reynante constructed a nipa hut where he and his family lived and took care of the nipa palms (sasahan) he had planted on
lots 1 and 2 covering an area of 5,096 square meters and 6,011 square meters respectively. These lots are located between the fishpond covered by TCT No.
25618 and the Liputan (formerly Meycauayan) River. Petitioner harvested and sold said nipa palms without interference and prohibition from anybody. Neither did
the late Don Cosme Carlos question his right to plant the nipa palms near the fishpond or to harvest and appropriate them as his own.
After the death of Don Cosme Carlos, his heirs (private respondents' predecessors-in-interest) entered into a written agreement denominated as "SINUMPAANG
SALAYSAY NG PAGSASAULI NG KARAPATAN" dated November 29, 1984 with petitioner Jose Reynante whereby the latter for and in consideration of the sum
of P200,000.00 turned over the fishpond he was tenanting to the heirs of Don Cosme Carlos and surrendered all his rights therein as caretaker or "bantay-
kasama at tagapamahala" (Rollo, p. 77).
Pursuant to the said written agreement, petitioner surrendered the fishpond and the two huts located therein to private respondents. Private respondents
thereafter leased the said fishpond to one Carlos de la Cruz. Petitioner continued to live in the nipa hut constructed by him on lots 1 and 2 and to take care of the
nipa palms he had planted therein.
On February 17, 1988, private respondents formally demanded that the petitioner vacate said portion since according to them petitioner had already been
indemnified for the surrender of his rights as a tenant. Despite receipt thereof, petitioner refused and failed to relinquish possession of lots 1 and 2.
Hence, on April 22, 1988, private respondents filed a complaint for forcible entry with preliminary mandatory injunction against petitioner alleging that the latter by
means of strategy and stealth, took over the physical, actual and material possession of lots 1 and 2 by residing in one of the kubos or huts bordering the Liputan
River and cutting off and/or disposing of the sasa or nipa palms adjacent thereto.
On January 10, 1989, the trial court rendered its decision dismissing the complaint and finding that petitioner had been in prior possession of lots 1
and 2.
Private respondents appealed to the Regional Trial Court and on August 8, 1989 it rendered its decision, the dispositive portion of which reads as follows:
WHEREFORE, this Court renders judgment in favor of the plaintiffs and against defendant and hereby reverses the decision of the Court
a quo. Accordingly, the defendant is ordered to restore possession of that piece of land particularly described and defined as Lots 1 & 2 of
the land survey conducted by Geodetic Engineer Restituto Buan on March 2, 1983, together with the sasa or nipa palms planted thereon.
No pronouncement as to attorney's fees. Each party shall bear their respective costs of the suit.
SO ORDERED. (Rollo, p. 55; Decision, p. 4).
From said decision, petitioner filed with the Court of Appeals a petition for review ( Rollo, p. 30; Annex "A"). On February 28, 1990, the Court of Appeals rendered
its decision, the dispositive portion of which reads as follows:
WHEREFORE, the decision of the court a quo, being consistent with law and jurisprudence, is hereby AFFIRMED in toto. The instant
petition seeking to issue a restraining order is hereby denied.
SO ORDERED. (Rollo, p. 30; Decision, p. 3).
On November 5, 1990, the Court of Appeals denied the motion for reconsideration filed by petitioner (Rollo, p. 35; Annex "B").
In its resolution dated May 6, 1991, the Second Division of this court gave due course to the petition and required both parties to file their respective memoranda
(Rollo, p. 93).
The main issues to be resolved in this case are: a) who between the petitioner and private respondents has prior physical possession of lots 1 and 2; and b)
whether or not the disputed lots belong to private respondents as a result of accretion.
An action for forcible entry is merely a quieting process and actual title to the property is never determined. A party who can prove prior possession can recover
such possession even against the owner himself. Whatever may be the character of his prior possession, if he has in his favor priority in time, he has the security
that entitles him to remain on the property until he is lawfully ejected by a person having a better right by accion publiciana or accion reivindicatoria (German
Management & Services, Inc. v. Court of Appeals, G.R. No. 76216, September 14, 1989, 177 SCRA 495, 498, 499). On the other hand, if a plaintiff cannot prove
prior physical possession, he has no right of action for forcible entry and detainer even if he should be the owner of the property (Lizo v. Carandang, 73 Phil. 469
[1942]).
Hence, the Court of Appeals could not legally restore private respondents' possession over lots 1 and 2 simply because petitioner has clearly proven that he had
prior possession over lots 1 and 2.
The evidence on record shows that petitioner was in possession of the questioned lots for more than 50 years. It is undisputed that he was the caretaker of the
fishpond owned by the late Don Cosme Carlos for more than 50 years and that he constructed a nipa hut adjacent to the fishpond and planted nipa palms
therein. This fact is bolstered by the "SINUMPAANG SALAYSAY" executed by Epifanio Lucero (Records, p. 66), Apolonio D. Morte (Records, p. 101) and Carling
Dumalay (Records, p. 103), all of whom are disinterested parties with no motive to falsify that can be attributed to them, except their desire to tell the truth.
Moreover, an ocular inspection was conducted by the trial court dated December 2, 1988 which was attended by the parties and their respective counsels and
the court observed the following:
The Court viewed the location and the distance of the constructed nipa hut and the subject "sasahan" which appears exists ( sic) long ago,
planted and stands (sic) adjacent to the fishpond and the dikes which serves (sic) as passage way of water river of lot 1 and lot 2. During
the course of the hearing, both counsel observed muniment of title embedded on the ground which is located at the inner side of the
"pilapil" separating the fishpond from the subject "sasa" plant with a height of 20 to 25 feet from water level and during the ocular
inspection it was judicially observed that the controversial premises is beyond the titled property of the plaintiffs but situated along the
Liputan, Meycauayan River it being a part of the public domain. (Rollo, p. 51; Decision, p. 12).
On the other hand, private respondents based their claim of possession over lots 1 and 2 simply on the written agreement signed by petitioner whereby the latter
surrendered his rights over the fishpond.
Evidently, the trial court did not err when it ruled that:
An examination of the document signed by the defendant (Exhibit "B"), shows that what was surrendered to the plaintiffs was the fishpond
and not the "sasahan" or the land on which he constructed his hut where he now lives. That is a completely different agreement in which a
tenant would return a farm or a fishpond to his landlord in return for the amount that the landlord would pay to him as a disturbance
compensation. There is nothing that indicates that the tenant was giving other matters not mentioned in a document like Exhibit "B".
Moreover, when the plaintiffs leased the fishpond to Mr. Carlos de La Cruz there was no mention that the lease included the hut
constructed by the defendant and the nipa palms planted by him (Exhibit "1"), a circumstance that gives the impression that the nipa hut
and the nipa palms were not included in the lease to Mr. de la Cruz, which may not belong to the plaintiffs. (Rollo, p. 49; Decision, p. 9).
With regard to the second issue, it must be noted that the disputed lots involved in this case are not included in Transfer Certificate of Title No. 25618 as per
verification made by the Forest Management Bureau, Department of Environment and Natural Resources. That tract of land situated at Barrio Liputan,
Meycauayan, Bulacan containing an area of 1.1107 hectares as described in the plan prepared and surveyed by Geodetic Engineer Restituto Buan for Jose
Reynante falls within Alienable and Disposable Land (for fishpond development) under Project No. 15 per B.F.L.C. Map No. 3122 dated May 8, 1987 ( Rollo, p.
31; Decision, p. 2).
The respondent Court of Appeals ruled that lots 1 and 2 were created by alluvial formation and hence the property of private respondents pursuant to Article 457
of the New Civil Code, to wit:
Art. 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.
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 (c) that the land where accretion takes place is adjacent to the bank of a river (Republic v. Court of Appeals, G.R. No. L-
61647, October 12, 1984, 132 SCRA 514, cited in Agustin v. Intermediate Appellate Court, G.R. Nos. 66075-76, July 5, 1990, 187 SCRA 218).
Granting without conceding that lots 1 and 2 were created by alluvial formation and while it is true that accretions which the banks of rivers may gradually receive
from the effect of the current become the property of the owner of the banks, such accretion to registered land does not preclude acquisition of the additional
area by another person through prescription.
This Court ruled in the case of Ignacio Grande, et al. v. Hon. Court of Appeals, et al., G.R. No. L-17652, June 30, 1962, 115 Phil. 521 that:
An accretion does not automatically become registered land just because the lot which receives such accretion is covered by a Torrens
Title. Ownership of a piece of land is one thing; registration under the Torrens system of that ownership is another. Ownership over the
accretion received by the land adjoining a river is governed by the Civil Code. Imprescriptibility of registered land is provided in the
registration law. Registration under the Land Registration and Cadastral Act does not vest or give title to the land, but merely confirms and,
thereafter, protects the title already possessed by the owner, making it imprescriptible by occupation of third parties. But to obtain this
protection, the land must be placed under the operation of the registration laws, wherein certain judicial procedures have been provided.
Assuming private respondents had acquired the alluvial deposit (the lot in question), by accretion, still their failure to register said accretion for a period of fifty
(50) years subjected said accretion to acquisition through prescription by third persons.
It is undisputed that petitioner has been in possession of the subject lots for more than fifty (50) years and unless private respondents can show a better title over
the subject lots, petitioner's possession over the property must be respected.
PREMISES CONSIDERED, the decision of the respondent Court of Appeals dated February 28, 1990 is REVERSED and SET ASIDE and the decision of the
Municipal Trial Court of Meycauayan, Bulacan, Branch I, is hereby REINSTATED.
SO ORDERED.
Melencio-Herrera, Padilla, Regalado and Nocon, JJ., concur.
Footnotes
1 Penned by Associate Justice Abelardo M. Dayrit and concurred in by Associate Justices Luis A. Javellana and Felipe B. Kalalo.
2 Penned by Judge Valentin R. Cruz.
3 Penned by Judge Orlando C. Paguio.

SUPREME COURT
Manila
EN BANC
G.R. No. L-31163 November 6, 1929
URBANO SANTOS, plaintiff-appellee,
vs.
JOSE C. BERNABE, ET AL., defendants.
PABLO TIONGSON and THE PROVINCIAL SHERIFF OF BULACAN, appellants.
Arcadio Ejercito and Guevara, Francisco and Recto for appellants.
Eusebio Orense And Nicolas Belmonte for appellee.
VILLA-REAL, J.:
This appeal was taken by the defendants Pablo Tiongson and the Provincial Sheriff of Bulacan from the
judgment of the Court of First of said province, wherein said defendant Pablo Tiongson was ordered to
pay the plaintiff Urbano Santos the value of 778 cavans and 38 kilos of palay, at the rate of P3 per
cavan, without special pronouncement as to costs.
In support of their appeal, the appellants assign the following alleged errors committed by the lower
court in its judgment, to wit:
1. The court erred in holding that it has been proved that in the cavans of palay attached by the
herein defendant Pablo Tiongson from the defendant Jose C. Bernabe were included those
claimed by the plaintiff in this cause.
2. The court erred in ordering the defendant Pablo Tiongson to pay the plaintiff the value of 778
cavans and 38 kilos of palay, the refund of which is claimed by said plaintiff.
3. The court erred in denying the defendants' motion for a new trial.1awphil.net
The following facts were conclusively proved at the trial:
On March 20, 1928, there were deposited in Jose C. Bernabe's warehouse by the plaintiff Urbano
Santos 778 cavans and 38 kilos of palay and by Pablo Tiongson 1,026 cavans and 9 kilos of the same
grain.
On said date, March 20, 1928, Pablo Tiongson filed with the Court of First Instance of Bulacan a
complaint against Jose C. Bernabe, to recover from the latter the 1,026 cavans and 9 kilos of palay
deposited in the defendant's warehouse. At the same time, the application of Pablo Tiongson for a writ
of attachment was granted, and the attachable property of Jose C. Bernabe, including 924 cavans and
31 1/2 kilos of palay found by the sheriff in his warehouse, were attached, sold at public auction, and
the proceeds thereof delivered to said defendant Pablo Tiongson, who obtained judgment in said case.
The herein plaintiff, Urbano Santos, intervened in the attachment of the palay, but upon Pablo
Tiongson's filing the proper bond, the sheriff proceeded with the attachment, giving rise to the present
complaint.
It does not appear that the sacks of palay of Urbano Santos and those of Pablo Tiongson, deposited in
Jose C. Bernabe's warehouse, bore any marks or signs, nor were they separated one from the other.
The plaintiff-appellee Urbano Santos contends that Pablo Tiongson cannot claim the 924 cavans and 31
½ kilos of palay attached by the defendant sheriff as part of those deposited by him in Jose C.
Bernabe's warehouse, because, in asking for the attachment thereof, he impliedly acknowledged that
the same belonged to Jose C. Bernabe and not to him.
In the complaint filed by Pablo Tiongson against Jose C. Bernabe, civil case No. 3665 of the Court of
First Instance of Bulacan, it is alleged that said plaintiff deposited in the defendant's warehouse 1,026
cavans and 9 kilos of palay, the return of which, or the value thereof, at the rate of P3 per cavan was
claimed therein. Upon filing said complaint, the plaintiff applied for a preliminary writ of attachment of
the defendant's property, which was accordingly issued, and the defendant's property, including the 924
cavans and 31 ½ kilos of palay found by the sheriff in his warehouse, were attached.
It will be seen that the action brought by Pablo Tiongson against Jose C. Bernabe is that provided in
section 262 of the Code of Civil Procedure for the delivery of personal property. Although it is true that
the plaintiff and his attorney did not follow strictly the procedure provided in said section for claiming
the delivery of said personal property nevertheless, the procedure followed by him may be construed as
equivalent thereto, considering the provisions of section 2 of the Code of Civil Procedure of the effect
that "the provisions of this Code, and the proceedings under it, shall be liberally construed, in order to
promote its object and assist the parties in obtaining speedy justice."
Liberally construing, therefore, the above cited provisions of section 262 of the Code of Civil
Procedure, the writ of attachment applied for by Pablo Tiongson against the property of Jose C.
Bernabe may be construed as a claim for the delivery of the sacks of palay deposited by the former
with the latter.
The 778 cavans and 38 kilos of palay belonging to the plaintiff Urbano Santos, having been mixed with
the 1,026 cavans and 9 kilos of palay belonging to the defendant Pablo Tiongson in Jose C. Bernabe's
warehouse; the sheriff having found only 924 cavans and 31 1/2 kilos of palay in said warehouse at the
time of the attachment thereof; and there being no means of separating form said 924 cavans and 31 1/2
of palay belonging to Urbano Santos and those belonging to Pablo Tiongson, the following rule
prescribed in article 381 of the Civil Code for cases of this nature, is applicable:
Art. 381. If, by the will of their owners, two things of identical or dissimilar nature are mixed,
or if the mixture occurs accidentally, if in the latter case the things cannot be separated without
injury, each owner shall acquire a right in the mixture proportionate to the part belonging to
him, according to the value of the things mixed or commingled.
The number of kilos in a cavan not having been determined, we will take the proportion only of the 924
cavans of palay which were attached and sold, thereby giving Urbano Santos, who deposited 778
cavans, 398.49 thereof, and Pablo Tiongson, who deposited 1,026 cavans, 525.51, or the value thereof
at the rate of P3 per cavan.
Wherefore, the judgment appealed from is hereby modified, and Pablo Tiongson is hereby ordered to
pay the plaintiff Urbano Santos the value of 398.49 cavans of palay at the rate of P3 a cavan, without
special pronouncement as to costs. So ordered.
Avanceña, C.J., Street, Villamor and Ostrand, JJ., concur.
Johnson, J., reserves his vote.
Johns, J., dissents.
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 102909 September 6, 1993
SPOUSES VICENTE and LOURDES PINGOL, petitioners,

vs.
HON. COURT OF APPEALS and HEIRS OF FRANCISCO N. DONASCO, namely: MELINDA D. PELAYO, MARIETTA D. SINGSON, MYRNA D. CUEVAS,
NATIVIDAD D. PELAYO, YOLANDA D. CACERES and MARY DONASCO, respondents.
Bernardo S. Chan for petitioners.
Orlando A. Galope for respondents.
DAVIDE, JR., J.:
An action denominated as one for specific performance and damages was brought by the private respondents against the petitioners before the Regional Trial
Court (RTC) of Caloocan City which, after due trial, rendered a decision in favor of the petitioners. On appeal, the respondent Court reversed the trial court's
decision.
It is from this judgment that the petitioners have appealed to this Court by way of a petition for review on certiorari.
The material facts of this case are simple and undisputed.
Petitioner Vicente Pingol is the owner of Lot No. 3223 of the Cadastral Survey of Caloocan, with an area of 549 square meters, located at Bagong Barrio,
Caloocan City and more particularly described in Transfer Certificate of Title (TCT) No. 7435 of the Registry of Deeds of Caloocan City. On 17 February 1969, he
executed a "DEED OF ABSOLUTE SALE OF ONE-HALF OF (1/2) [OF] AN UNDIVIDED PORTION OF A PARCEL OF LAND" in favor of Francisco N. Donasco
which was acknowledged before a notary public. The parcel of land referred to herein is Lot No. 3223 and the pertinent portions of the document read as follows:
That for and in consideration of the sum of TWENTY THOUSAND AND FIVE HUNDRED THIRTY (P20,530.00) PESOS, Philippine
Currency, the VENDOR hereby these presents SELL, CONVEY AND CONVEY by way of Absolute Sale the one-half (1/2) portion,
equivalent to Two Hundred Seventy Four and point Fifty (274.50) square meters, to VENDEE, the above-mentioned property, his heirs,
assigns and successors-in- interest;
That the VENDOR hereby confesses and acknowledges the receipt of TWO THOUSAND (P2,000.00) PESOS from VENDEE as
advanced (sic) and partial payment to the above-cited consideration of the Sale herein mentioned, leaving therefor a balance of Eighteen
Thousand and Five Hundred Thirty (P18,530) Pesos to be paid in several equal installments within a period of six (6) years, beginning
January, 1970;
That after computing the above-mentioned equal installments, the VENDEE agrees and undertakes to pay unto the VENDOR a monthly
amount equivalent to Two Hundred Fifty Seven (sic) and Thirty Six Centavos (P257.36) within a period of Seventy One (71) months and
on the Seven Two [sic] (72) month, the amount of (P257.44) as the last and final installment thereof;
That the VENDEE agrees that in case of default in the payment of the installment due the same shall earn a legal rate of interest, and to
which the VENDOR likewise agrees;
That the VENDEE undertakes to pay unto the VENDOR the herein monthly installment within the first five (5) days of each month and the
same shall be made available and to be paid at the residence of the VENDOR, payment to be made either directly to the VENDOR, his
wife or his authorized representative or factor;
That in case of partition of the above-described property between herein VENDOR and VENDEE the same shall be divided into two (2)
equal parts, the VENDOR gets the corner facing J. De Jesus and Malolos Avenue and the VENDEE shall get the portion with fifteen 15
meters frontage facing J. De Jesus Street only.1
Pursuant to the contract, Donasco paid P2,000.00 to Pingol. The one-half portion, designated as Lot No. 3223-A, was then segregated from the mother lot, and
the parties prepared a subdivision plan (Exhibit "C") which was approved by the Land Registration Commission.2
Francisco immediately took possession of the subject lot and constructed a house thereon. In January 1970, he started paying the monthly installments but was
able to pay only up to 1972.
On 13 July 1984, Francisco Donasco died. At the time of his demise, he had paid P8,369.00, plus the P2,000.00 advance payment, leaving a balance of
P10,161.00 on the contract price. 3 Lot No. 3223-A remained in the possession of Donasco's heirs.
On 19 October 1988, the heirs of Francisco Donasco filed an action for "Specific Performance and Damages, with Prayer for Writ of Preliminary Injunction"
against the spouses Vicente and Lourdes Pingol (petitioners herein) before the RTC of Caloocan City. The action was docketed as Civil Case No. 13572 and
raffled off to Branch 125 of the said court.
In their complaint, 4 the plaintiffs (private respondents herein) averred that after the death of their father, they offered to pay the balance of P10,161.00 plus the
stipulated legal rate of interest thereon to Vicente Pingol but the latter rebuffed their offer and has "been demanding for a bigger and unreasonable amount, in
complete variance to what is lawfully due and payable." They stated that they had "exerted earnest efforts to forge or reach an amicable and peaceful settlement
with the defendants" for the payment of the property in question but to no avail. They further alleged that the defendants were committing "acts of forcible entry
and encroachment" upon their land and asked that a writ of preliminary injunction be issued to restrain the defendants from the acts complained of.
Plaintiffs then prayed that the defendants be ordered, inter alia:
a. . . . to accept the amount of P10,161.00, more or less, plus the stipulated legal rate of interest due thereon, as full and complete
payment of the balance for the agreed price/consideration on the one- half (1/2) portion of the parcel of land . . .; [and]
b. . . . to execute the final deed of sale on the one-half (1/2) portion of the lot . . . in accordance with the partition reflected in the survey
and subdivision plan, . . . .5
In their answer with counterclaim, 6 defendants admitted the execution of the aforementioned deed of sale, the segregation of the portion sold and the
preparation and approval of the subdivision plan, but set up the following special and affirmative defenses: (1) plaintiffs' cause of action had already prescribed;
(2) the deed of sale embodied a conditional contract of sale "as the consideration is to be paid on installment basis within a period of six years beginning
January, 1970"; (3) the subdivision plan was prepared on the assumption that Francisco Donasco would be able to comply with his obligation; (4) when
Francisco died, he had not fully paid the total consideration agreed upon; and (5) considering the breach by Francisco of his contractual obligation way back in
1976, the sale was deemed to have been cancelled and the continuous occupancy of Francisco after 1976 and by his heirs thereafter was by mere tolerance of
Vicente Pingol. They then asked that the plaintiffs be ordered to vacate the premises and to pay them attorney's fees and a reasonable compensation for the use
of the land.
In their Reply and Answer to Counterclaim, 7 the plaintiffs pointed out that there is no provision in the deed of sale for its cancellation in case of default in the
payment of the monthly installments and invoked Article 1592 of the New Civil Code. They specifically denied the allegations in the counterclaim.
The issues having been joined, the case was then tried on the merits.
On 22 January 1990, the trial court rendered a decision 8 dismissing the complaint and ordering the plaintiffs to pay the defendants P350.00 as reasonable
monthly rental for the use of the premises from the filing of the complaint, P10,000.00 by way of attorney's fees, and the costs of the suit. It held that: (1) the deed
of absolute sale in question, marked and offered in evidence as Exhibit "A," is a contract to sell, not a contract of sale, since Vicente Pingol had no intention to
part with the ownership of the loan unless the full amount of the agreed price had been paid; (2) the contract was deemed to have been cancelled from the
moment the late father of the plaintiffs defaulted in the payment of the monthly installments; (3) title and ownership over the lot did not pass to Francisco
Donasco and his heirs since the contract to sell was never consummated; and (5) assuming, arguendo, that the plaintiffs have a cause of action for specific
performance, such action had already prescribed since the complaint was filed only on 19 October 1988 or more than ten years from the time that they could
have lawfully demanded performance.9
Plaintiffs elevated the case to the Court of Appeals where the appeal was docketed as CA-G.R. CV No. 25967. On 12 November 1991, the said court rendered a
decision 10 reversing the appealed decision and decreeing as follows:
WHEREFORE, the decision appealed from is hereby REVERSED and SET ASIDE and another one is rendered:
(1) Ordering appellee-vendor Vicente Pingol to accept the sum of P10,161.00, plus the legal interest due thereon from the date of
institution of this action on October 19, 1988;
(2) Upholding the validity of the "DEED OF ABSOLUTE SALE OF ONE- HALF (1/2) (of) AN UNDIVIDED PORTION OF A PARCEL OF
LAND" (Exh. A), and by virtue and on the strength of which declaring the "Heirs of the Deceased Francisco N. Domingo" as the owners of
the 274.50 sq. m. land, denominated as Lot 3223-A, (LRC) Psd-146255 under the technical description (exh. D) and reflected in the Plan
of Subdivision Survey which was approved By Commissioner of Land Registration on August 13, 1971 (exh. C), representing one-half
portion [of] lot 3223, situated at the corner of Malolos Avenue and G. de Jesus St., Bagong Barrio, Caloocan City, and covered by TCT No.
7435 of the Registry of Deeds of Caloocan City (exh. B); and
(3) Ordering the defendants-appellees to pay the costs.
SO ORDERED. 11
The Court of Appeals ruled that the deed of sale in question reveals the clear intention of Vicente Pingol to part with the ownership of the one-half portion of the
land by way of an absolute sale; that the failure to fully pay the agreed price was not a ground for the cancellation of the sale; and that the plaintiffs' action is
imprescriptible since it is akin to an action to quiet title to property in one's possession.12
Dissatisfied with the decision of the Court of Appeals, the defendants, hereinafter referred to as the petitioners, filed this petition for certiorari on 9 January 1992.
Plaintiffs, hereinafter referred to as the private respondents, filed their comment thereto on 10 September 1992 to which the petitioners filed a reply 11 November
1992. We gave due course to the petition and required the parties to submit their respective memoranda, 13 which they subsequently complied with.
Petitioners contend that the Court of Appeals erred:
IN HOLDING THAT THE DOCUMENT (EXHIBIT "A") DENOMINATED AS "ABSOLUTE DEED OF SALE OF ONE-HALF (½) OF AN
UNDIVIDED PORTION OF A PARCEL OF LAND" IS AN ABSOLUTE DEED OF SALE SUFFICIENT TO CONFER OWNERSHIP ON THE
VENDEE AND HIS SUCCESSORS-IN-INTEREST, DESPITE THE FACT THAT BY ITS TERMS AND CONDITIONS, LIKE THE PRICE
BEING PAYABLE ON INSTALLMENTS WITHIN A FIXED PERIOD, THE SAME IS A CONDITIONAL DEED OF SALE.
II
IN HOLDING THAT NOTWITHSTANDING THE FACT THAT THE VENDEE FAILED TO COMPLY WITH THE TERMS OF THE
CONTRACT (EXHIBIT "A") SPECIFICALLY TO COMPLETE THE PAYMENT OF THE CONSIDERATION ON THE DATE STIPULATED IN
THE CONTRACT WHICH WAS SUPPOSED TO BE IN JANUARY 1976, COMPLETE PAYMENT THEREOF CAN STILL BE ENFORCED
IN AN ACTION INSTITUTED BY THE HEIRS OF THE VENDEE FILED ON OCTOBER 19, 1988 OR A PERIOD OF MORE THAN
TWELVE (12) YEARS FROM THE TIME COMPLETE PAYMENT SHOULD HAVE BEEN MADE;
III
IN HOLDING THAT THE PRIVATE RESPONDENTS' ACTION IS ONE WHICH IS AN OFFER TO COMPLETE THE PAYMENT LEFT
UNPAID BY PRIVATE RESPONDENTS' FATHER WHICH DOES NOT PRESCRIBE;
IV
IN HOLDING THAT PRIVATE RESPONDENTS' CAUSE OF ACTION HAS NOT PRESCRIBE.14
The decisive issue in this case is whether Exhibit "A" embodies a contract of sale or a contract to sell. The distinction between the two is important for in a
contract of sale, the title passes to the vendee upon the delivery of the thing sold, whereas in a contract to sell, by agreement, ownership is reserved in the
vendor and is not to pass until the full payment of the price. In a contract of sale, the vendor has lost and cannot recover ownership until and unless the contract
is resolved or rescinded, whereas in a contract to sell, title is retained by the vendor until the full payment of the price, such payment being a positive suspensive
condition, failure of which is not a breach but an event that prevented the obligation of the vendor to convey title from becoming
effective.15
A perusal of Exhibit "A" leads to no other conclusion than that it embodies a contract of sale. The plain and clear tenor of the "DEED OF ABSOLUTE SALE OF
ONE-HALF (1/2) [OF] AN UNDIVIDED PORTION OF A PARCEL OF LAND" is that "the VENDOR hereby . . . SELL, CONVEY AND CONVEY by way Absolute
Sale the one-half (1/2) portion . . . to the VENDEE . . . his heirs, assigns and successors-in-interest." That the vendor, petitioner Vicente Pingol, had that clear
intention was further evidenced by his failure to reserve his title thereto until the full payment of the price.
In Dignos vs. Court of Appeals, 16 we held that a deed of sale is absolute in nature although denominated as a "Deed of Conditional Sale" where there is no
stipulation in the deed that title to the property sold is reserved in the seller until the full payment of the price, nor is there a stipulation giving the vendor the right
to unilaterally resolve the contract the moment the buyer fails to pay within a fixed period. Exhibit "A" contains neither stipulation. What is merely stated therein is
that "the VENDEE agrees that in case of default in the payment of the installments due the same shall earn a legal rate of interest, and to which the VENDOR
likewise agrees."
Furthermore, as found by the Court of Appeals, the acts of the parties, contemporaneous and subsequent to the contract, clearly show that an absolute deed of
sale was intended, by the parties and not a contract to sell:
[P]ursuant to the deed, the vendor delivered actual and constructive possession of the property to the vendee, who occupied and took
such possession, constructed a building thereon, had the property surveyed and subdivided and a plan of the property was prepared and
submitted to the Land Registration Commission which approved it preparatory to segregating the same and obtaining the corresponding
TCT in his name. Since the sale, appellee continuously possessed and occupied the property as owner up to his death on July 13, 1984
and his heirs, after his death, continued the occupancy and possession of the property up to the present. Those contemporaneous and
subsequent events are demonstrative acts that the vendor since the sale recognized the vendee as the absolute owner of the property
sold. All those attributes of ownership are admitted by defendants in their answer, specifically in paragraphs 7 and 9 of their special and
affirmative defenses.17
The contract here being one of absolute sale, the ownership of the subject lot was transferred to the buyer upon the actual and constructive delivery thereof. The
constructive delivery of the subject lot was made upon the execution of the deed of sale 18 while the actual delivery was effected when the private respondents
took possession of and constructed a house on Lot No. 3223-A.
The delivery of the object of the contract divested the vendor of the ownership over the same and he cannot recover the title unless the contract is resolved or
rescinded pursuant to Article 1592 of the New Civil Code which provides that:
In the sale of immovable property, even though it may have been stipulated that upon failure to pay the price at the time agreed upon the
rescission of the contract shall of right take place, the vendee may pay, even after the expiration of the period, as long as no demand for
rescission of the contract has been made upon him either judicially or by a notarial act. After the demand, the court may not grant him a
new term.
Both the trial court and the Court of Appeals did not find that a notarial or judicial rescission of the contract had been made. Although Vicente Pingol asserts that
he had declared to Francisco Donasco that he was cancelling the contract, he did not prove that his demand for rescission was made either judicially or by a
notarial act.
Petitioners fault the respondent Court for holding that the action of the petitioners is not barred by the statute of limitations. They argue that the private
respondents' action, being based upon a written contract, has prescribed since it was brought only in 1988 or more than ten years from the time when the latter
could have lawfully demanded performance.19
We disagree.
Although the private respondents' complaint before the trial court was denominated as one for specific performance, it is in effect an action to quiet title. In this
regard, the following excerpt from Bucton vs. Gabar 20 is apropos:
The real and ultimate basis of petitioners' action is their ownership of one- half of the lot coupled with their possession thereof, which
entitles them to a conveyance of the property. In Sapto, et al. v. Fabiana [103 Phil. 683, 686-87 (1958)], this Court, speaking thru Mr.
Justice J.B.L. Reyes, explained that under the circumstances no enforcement of the contract is needed, since the delivery of possession
of the land sold had consummated the sale and transferred title to the purchaser, and that, actually, the action for conveyance is one to
quiet title, i.e., to remove the cloud upon the appellee's ownership by the refusal of the appellants to recognize the sale made by their
predecessors.
That a cloud has been cast on the title of the private respondents is indubitable. Despite the fact that the title had been transferred to them by the execution of
the deed of sale and the delivery of the object of the contract, the petitioners adamantly refused to accept the tender of payment by the private respondents and
steadfastly insisted that their obligation to transfer title had been rendered ineffective.
A vendee in an oral contract to convey land who had made part payment thereof, entered upon the land and had made valuable improvements thereon, is
entitled to bring suit to clear his title against the vendor who had refused to transfer the title to him. It is not necessary that the vendee has an absolute title, an
equitable title being sufficient to clothe him with personality to bring an action to quiet title.21
Prescription thus cannot be invoked against the private respondents for it is aphoristic that an action to quiet title to property in one's possession is
imprescriptible. 22 The rationale for this rule has been aptly stated thus:
The owner of real property who is in possession thereof may wait until his possession is invaded or his title is attacked before taking steps
to vindicate his right. A person claiming title to real property, but not in possession thereof, must act affirmatively and within the time
provided by the statute. Possession is a continuing right as is the right to defend such possession. So it has been determined that an
owner of real property in possession has a continuing right to invoke a court of equity to remove a cloud that is a continuing menace to his
title. Such a menace is compared to a continuing nuisance or trespass which is treated as successive nuisances or trespasses, not barred
by statute until continued without interruption for a length of time sufficient to affect a change of title as a matter of law.23
Private respondents shall, however, be liable to pay the legal rate of interest on the unpaid balance of the purchase price from the date default or on 6 January
1976, when the entire balance should have been paid, pursuant to the provision in the deed of sale.
WHEREFORE, except as above modified, the Decision appealed from is hereby AFFIRMED. As modified, the interest on the unpaid balance of P10,161.00, at
the legal rate, shall be computed from 6 January 1976. Upon the payment by the private respondents to the petitioners of the said amount and the interest
thereon, the latter are ordered to deliver Transfer Certificate of Title No. 7435 to the Register of Deeds of Caloocan City who shall cancel the same and issue two
new transfer certificates of title in lieu thereof, one of which shall be in the name of the herein private respondents covering Lot No. 3223-A and the other in the
name of the petitioners covering the remainder of the lot.
SO ORDERED.
Cruz, Griño-Aquino, Bellosillo and Quiason, JJ., concur.
# Footnotes
1 Rollo, 23-24.
2 Id., 18.
3 Id., 64.
4 Annex "A" of Petition; Rollo, 17-22.
5 Id., 21.
6 Annex "B" of Petition; Rollo, 25-29.
7 Id., 30-33.
8 Annex "D" of Petition; Rollo, 34-41. Per Judge Geronimo S. Mangay.
9 Id., 38-41.
10 Annex "G" of Petition; Id., 60-73. Per Associate Justice Artemon D. Luna, concurred in by Associate Justice Celso L. Magsino and
Jainal D. Rasul.
11 Rollo, 72-73.
12 Id., 67-71.
13 Rollo, 97.

SUPREME COURT
Manila
SECOND DIVISION
G.R. No. L-26699 March 16, 1976
BENITA SALAO, assisted by her husband, GREGORIO MARCELO; ALMARIO
ALCURIZA, ARTURO ALCURIZA, OSCAR ALCURIZA and ANITA ALCURIZA, the latter
two being minors are represented by guardian ad litem, ARTURO ALCURIZA, plaintiffs-
appellants,
vs.
JUAN S. SALAO, later substituted by PABLO P. SALAO, Administrator of the Intestate
of JUAN S. SALAO; now MERCEDES P. VDA. DE SALAO, ROBERTO P. SALAO, MARIA
SALAO VDA. DE SANTOS, LUCIANA P. SALAO, ISABEL SALAO DE SANTOS, and
PABLO P. SALAO, as successors-in-interest of the late JUAN S. SALAO, together with
PABLO P. SALAO, Administrator, defendants-appellants.
Eusebio V. Navarro for plaintiffs-appellants.
Nicolas Belmonte & Benjamin T. de Peralta for defendants-appellants.
AQUINO, J.:
This litigation regarding a forty-seven-hectare fishpond located at Sitio Calunuran, Hermosa,
Bataan involves the law of trusts and prescription. The facts are as follows:
The spouses Manuel Salao and Valentina Ignacio of Barrio Dampalit, Malabon, Rizal begot
four children named Patricio, Alejandra, Juan (Banli) and Ambrosia. Manuel Salao died in
1885. His eldest son, Patricio, died in 1886 survived by his only child. Valentin Salao.
There is no documentary evidence as to what, properties formed part of Manuel Salao's
estate, if any. His widow died on May 28, 1914. After her death, her estate was administered
by her daughter Ambrosia.
It was partitioned extrajudicially in a deed dated December 29, 1918 but notarized on May 22,
1919 (Exh. 21). The deed was signed by her four legal heirs, namely, her three children,
Alejandra, Juan and Ambrosia, and her grandson, Valentin Salao, in representation of his
deceased father, Patricio.
The lands left by Valentina Ignacio, all located at Barrio Dampalit were as follows:
Nature of Land
Area in
square meters
(1) One-half interest in a fishpond which she had inherited from her parents, Feliciano Ignacio
and Damiana Mendoza, and the other half of which was owned by her co-owner, Josefa Sta.
Ana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,700
(2) Fishpond inherited from her parents . . . . . . . . . . . . 7,418
(3) Fishpond inherited from her parents . . . . . . . . . . . . . 6,989
(4) Fishpond with a bodega for salt . . . . . . . . . . . . . . . . 50,469
(5) Fishpond with an area of one hectare, 12 ares and 5 centares purchased from Bernabe
and Honorata Ignacio by Valentina Ignacio on November 9, 1895 with a bodega for
salt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,205
(6) Fishpond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,000
(7) One-half interest in a fishpond with a total area of 10,424 square meters, the other half
was owned by A. Aguinaldo . . . . . . . . . . . . . . . . . . . . . . . 5,217
(8) Riceland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,454
(9) Riceland purchased by Valentina Ignacio from Eduardo Salao on January 27, 1890 with a
house and two camarins thereon . . . . . . . . . . . . . . . . . . 8,065
(10) Riceland in the name of Ambrosia Salao, with an area of 11,678 square meters, of which
2,173 square meters were sold to Justa Yongco . . . . . . . . . .9,505
TOTAL . . . . . . . . . . . . .. 179,022 square
meters
To each of the legal heirs of Valentina Ignacio was adjudicated a distributive share valued at
P8,135.25. In satisfaction of his distributive share, Valentin Salao (who was then already forty-
eight years old) was given the biggest fishpond with an area of 50,469 square meters, a
smaller fishpond with an area of 6,989 square meters and the riceland with a net area of
9,905 square meters. Those parcels of land had an aggregate appraised value of P13,501
which exceeded Valentin's distributive share. So in the deed of partition he was directed to
pay to his co-heirs the sum of P5,365.75. That arrangement, which was obviously intended to
avoid the fragmentation of the lands, was beneficial to Valentin.
In that deed of partition (Exh. 21) it was noted that "desde la muerte de Valentina Ignacio y
Mendoza, ha venido administrando sus bienes la referida Ambrosia Salao" "cuya
administracion lo ha sido a satisfaccion de todos los herederos y por designacion los
mismos". It was expressly stipulated that Ambrosia Salao was not obligated to render any
accounting of her administration "en consideracion al resultado satisfactorio de sus gestiones,
mejoradas los bienes y pagodas por ella las contribusiones (pages 2 and 11, Exh. 21).
By virtue of the partition the heirs became "dueños absolutos de sus respectivas
propiedadas, y podran inmediatamente tomar posesion de sus bienes, en la forma como se
han distribuido y llevado a cabo las adjudicaciones" (page 20, Exh. 21).
The documentary evidence proves that in 1911 or prior to the death of Valentina Ignacio her
two children, Juan Y. Salao, Sr. and Ambrosia Salao, secured a Torrens title, OCT No. 185 of
the Registry of Deeds of Pampanga, in their names for a forty-seven-hectare fishpond located
at Sitio Calunuran, Lubao, Pampanga (Exh. 14). It is also known as Lot No. 540 of the
Hermosa cadastre because that part of Lubao later became a part of Bataan.
The Calunuran fishpond is the bone of contention in this case.
Plaintiffs' theory is that Juan Y. Salao, Sr. and his sister Ambrosia had engaged in the
fishpond business. Where they obtained the capital is not shown in any documentary
evidence. Plaintiffs' version is that Valentin Salao and Alejandra Salao were included in that
joint venture, that the funds used were the earnings of the properties supposedly inherited
from Manuel Salao, and that those earnings were used in the acquisition of the Calunuran
fishpond. There is no documentary evidence to support that theory.
On the other hand, the defendants contend that the Calunuran fishpond consisted of lands
purchased by Juan Y. Salao, Sr. and Ambrosia Salao in 1905, 1906, 1907 and 1908 as,
shown in their Exhibits 8, 9, 10 and 13. But this point is disputed by the plaintiffs.
However, there can be no controversy as to the fact that after Juan Y. Salao, Sr. and
Ambrosia Salao secured a Torrens title for the Calunuran fishpond in 1911 they exercised
dominical rights over it to the exclusion of their nephew, Valentin Salao.
Thus, on December 1, 1911 Ambrosia Salao sold under pacto de retro for P800 the
Calunuran fishpond to Vicente Villongco. The period of redemption was one year. In the deed
of sale (Exh19) Ambrosia confirmed that she and her brother Juan were the dueños
proindivisos of the said pesqueria. On December 7, 1911 Villongco, the vendee a retro,
conveyed the same fishpond to Ambrosia by way of lease for an anual canon of P128 (Exh.
19-a).
After the fishpond was redeemed from Villongco or on June 8, 1914 Ambrosia and Juan sold
it under pacto de retro to Eligio Naval for the sum of P3,360. The period of redemption was
also one year (Exh. 20). The fishpond was later redeemed and Naval reconveyed it to the
vendors a retro in a document dated October 5, 1916 (Exh. 20-a).
The 1930 survey shown in the computation sheets of the Bureau of Lands reveals that the
Calunuran fishpond has an area of 479,205 square meters and that it was claimed by Juan
Salao and Ambrosia Salao, while the Pinanganacan fishpond (subsequently acquired by Juan
and Ambrosia) has an area of 975,952 square meters (Exh. 22).
Likewise, there is no controversy as to the fact that on May 27, 1911 Ambrosia Salao bought
for four thousand pesos from the heirs of Engracio Santiago a parcel of swampland planted to
bacawan and nipa with an area of 96 hectares, 57 ares and 73 centares located at Sitio
Lewa, Barrio Pinanganacan, Lubao, Pampanga (Exh. 17-d).
The record of Civil Case No. 136, General Land Registration Office Record No. 12144, Court
of First Instance of Pampanga shows that Ambrosia Salao and Juan Salao filed an application
for the registration of that land in their names on January 15, 1916. They alleged in their
petition that "han adquirido dicho terreno por partes iguales y por la compra a los herederos
del finado, Don Engracio Santiago" (Exh. 17-a).
At the hearing on October 26, 1916 before Judge Percy M. Moir, Ambrosia testified for the
applicants. On that same day Judge Moir rendered a decision, stating, inter alia, that the heirs
of Engracio Santiago had sold the land to Ambrosia Salao and Juan Salao. Judge Moir
"ordena la adjudicacion y registro del terreno solicitado a nombre de Juan Salao, mayor de
edad y de estado casado y de su esposa Diega Santiago y Ambrosia Salao, de estado
soltera y mayor de edad, en participaciones iguales" (Exh. 17-e).
On November 28, 1916 Judge Moir ordered the issuance of a decree for the said land. The
decree was issued on February 21, 1917. On March 12, 1917 Original Certificate of Title No.
472 of the Registry of Deeds of Pampanga was issued in the names of Juan Salao and
Ambrosia Salao.
That Pinanganacan or Lewa fishpond later became Cadastral Lot No. 544 of the Hermosa
cadastre (Exh. 23). It adjoins the Calunuran fishpond (See sketch, Exh. 1).
Juan Y. Salao, Sr. died on November 3, 1931 at the age of eighty years (Exh. C). His nephew,
Valentin Salao, died on February 9, 1933 at the age of sixty years according to the death
certificate (Exh. A. However, if according to Exhibit 21, he was forty-eight years old in 1918,
he would be sixty-three years old in 1933).
The intestate estate of Valentin Salao was partitioned extrajudicially on December 28, 1934
between his two daughters, Benita Salao-Marcelo and Victorina Salao-Alcuriza (Exh. 32). His
estate consisted of the two fishponds which he had inherited in 1918 from his grandmother,
Valentina Ignacio.
If it were true that he had a one-third interest in the Calunuran and Lewa fishponds with a total
area of 145 hectares registered in 1911 and 1917 in the names of his aunt and uncle,
Ambrosia Salao and Juan Y. Salao, Sr., respectively, it is strange that no mention of such
interest was made in the extrajudicial partition of his estate in 1934.
It is relevant to mention that on April 8, 1940 Ambrosia Salao donated to her grandniece,
plaintiff Benita Salao, three lots located at Barrio Dampalit with a total area of 5,832 square
meters (Exit. L). As donee Benita Salao signed the deed of donation.
On that occasion she could have asked Ambrosia Salao to deliver to her and to the children of
her sister, Victorina, the Calunuran fishpond if it were true that it was held in trust by Ambrosia
as the share of Benita's father in the alleged joint venture.
But she did not make any such demand. It was only after Ambrosia Salao's death that she
thought of filing an action for the reconveyance of the Calunuran fishpond which was
allegedly held in trust and which had become the sole property of Juan Salao y Santiago
(Juani).
On September 30, 1944 or during the Japanese occupation and about a year before
Ambrosia Salao's death on September 14, 1945 due to senility (she was allegedly eighty-five
years old when she died), she donated her one-half proindiviso share in the two fishponds in
question to her nephew, Juan S. Salao, Jr. (Juani) At that time she was living with Juani's
family. He was already the owner of the the other half of the said fishponds, having inherited it
from his father, Juan Y. Salao, Sr. (Banli) The deed of denotion included other pieces of real
property owned by Ambrosia. She reserved for herself the usufruct over the said properties
during her lifetime (Exh. 2 or M).
The said deed of donation was registered only on April 5, 1950 (page 39, Defendants' Record
on Appeal).
The lawyer of Benita Salao and the Children of Victorina Salao in a letter dated January 26,
1951 informed Juan S. Salao, Jr. that his clients had a one-third share in the two fishponds
and that when Juani took possession thereof in 1945, he refused to give Benita and
Victorina's children their one-third share of the net fruits which allegedly amounted to
P200,000 (Exh. K).
Juan S. Salao, Jr. in his answer dated February 6, 1951 categorically stated that Valentin
Salao did not have any interest in the two fishponds and that the sole owners thereof his
father Banli and his aunt Ambrosia, as shown in the Torrens titles issued in 1911 and 1917,
and that he Juani was the donee of Ambrosia's one-half share (Exh. K-1).
Benita Salao and her nephews and niece filed their original complaint against Juan S. Salao,
Jr. on January 9, 1952 in the Court of First Instance of Bataan (Exh. 36). They amended their
complaint on January 28, 1955. They asked for the annulment of the donation to Juan S.
Salao, Jr. and for the reconveyance to them of the Calunuran fishpond as Valentin Salao's
supposed one-third share in the 145 hectares of fishpond registered in the names of Juan Y.
Salao, Sr. and Ambrosia Salao.
Juan S. Salao, Jr. in his answer pleaded as a defense the indefeasibility of the Torrens title
secured by his father and aunt. He also invoked the Statute of Frauds, prescription and
laches. As counter-claims, he asked for moral damages amounting to P200,000, attorney's
fees and litigation expenses of not less than P22,000 and reimbursement of the premiums
which he has been paying on his bond for the lifting of the receivership Juan S. Salao, Jr. died
in 1958 at the age of seventy-one. He was substituted by his widow, Mercedes Pascual and
his six children and by the administrator of his estate.
In the intestate proceedings for the settlement of his estate the two fishponds in question
were adjudicated to his seven legal heirs in equal shares with the condition that the properties
would remain under administration during the pendency of this case (page 181, Defendants'
Record on Appeal).
After trial the trial court in its decision consisting of one hundred ten printed pages dismissed
the amended complaint and the counter-claim. In sixty-seven printed pages it made a
laborious recital of the testimonies of plaintiffs' fourteen witnesses, Gregorio Marcelo,
Norberto Crisostomo, Leonardo Mangali Fidel de la Cruz, Dionisio Manalili, Ambrosio Manalili,
Policarpio Sapno, Elias Manies Basilio Atienza, Benita Salao, Emilio Cagui Damaso de la
Peña, Arturo Alcuriza and Francisco Buensuceso, and the testimonies of defendants' six
witnesses, Marcos Galicia, Juan Galicia, Tiburcio Lingad, Doctor Wenceslao Pascual, Ciriaco
Ramirez and Pablo P. Salao. (Plaintiffs presented Regino Nicodemus as a fifteenth witness, a
rebuttal witness).
The trial court found that there was no community of property among Juan Y. Salao, Sr.,
Ambrosia Salao and Valentin Salao when the Calunuran and Pinanganacan (Lewa) lands
were acquired; that a co-ownership over the real properties of Valentina Ignacio existed
among her heirr after her death in 1914; that the co-ownership was administered by Ambrosia
Salao and that it subsisted up to 1918 when her estate was partitioned among her three
children and her grandson, Valentin Salao.
The trial court surmised that the co-ownership which existed from 1914 to 1918 misled the
plaintiffs and their witnesses and caused them to believe erroneously that there was a co-
ownership in 1905 or thereabouts. The trial court speculated that if valentin had a hand in the
conversion into fishponds of the Calunuran and Lewa lands, he must have done so on a
salary or profit- sharing basis. It conjectured that Valentin's children and grandchildren were
given by Ambrosia Salao a portion of the earnings of the fishponds as a reward for his
services or because of Ambrosia's affection for her grandnieces.
The trial court rationalized that Valentin's omission during his lifetime to assail the Torrens
titles of Juan and Ambrosia signified that "he was not a co-owner" of the fishponds. It did not
give credence to the testimonies of plaintiffs' witnesses because their memories could not be
trusted and because no strong documentary evidence supported the declarations. Moreover,
the parties involved in the alleged trust were already dead.
It also held that the donation was validly executed and that even if it were void Juan S. Salao,
Jr., the donee, would nevertheless be the sole legal heir of the donor, Ambrosia Salao, and
would inherit the properties donated to him.
Both parties appealed. The plaintiffs appealed because their action for reconveyance was
dismissed. The defendants appealed because their counterclaim for damages was dismissed.
The appeals, which deal with factual and legal issues, were made to the Court of Appeals.
However, as the amounts involved exceed two hundred thousand pesos, the Court of Appeals
elevated the case to this Court in its resolution of Octoter 3, 1966 (CA-G.R. No. 30014-R).
Plaintiffs' appeal. — An appellant's brief should contain "a subject index index of the matter in
the brief with a digest of the argument and page references" to the contents of the brief (Sec.
16 [a], Rule 46, 1964 Rules of Court; Sec. 17, Rule 48, 1940 Rules of Court).
The plaintiffs in their appellants' brief consisting of 302 pages did not comply with that
requirement. Their statements of the case and the facts do not contain "page references to
the record" as required in section 16[c] and [d] of Rule 46, formerly section 17, Rule 48 of the
1940 Rules of Court.
Lawyers for appellants, when they prepare their briefs, would do well to read and re-read
section 16 of Rule 46. If they comply strictly with the formal requirements prescribed in
section 16, they might make a competent and luminous presentation of their clients' case and
lighten the burden of the Court.
What Justice Fisher said in 1918 is still true now: "The pressure of work upon this Court is so
great that we cannot, in justice to other litigants, undertake to make an examination of the
voluminous transcript of the testimony (1,553 pages in this case, twenty-one witnesses having
testified), unless the attorneys who desire us to make such examination have themselves
taken the trouble to read the record and brief it in accordance with our rules" (Palara vs.
Baguisi 38 Phil. 177, 181). As noted in an old case, this Court decides hundreds of cases
every year and in addition resolves in minute orders an exceptionally considerable number of
petitions, motions and interlocutory matters (Alzua and Arnalot vs. Johnson, 21 Phil. 308, 395;
See In re Almacen, L-27654, February 18, 1970, 31 SCRA 562, 573).
Plaintiffs' first assignment of error raised a procedural issue. In paragraphs 1 to 14 of their first
cause of action they made certain averments to establish their theory that Valentin Salao had
a one-third interest in the two fishponds which were registrered in the names of Juan Y. Salao,
Sr. (Banli) and Ambrosia Salao.
Juan S. Salao, Jr. (Juani) in his answer "specifically" denied each and all the allegations" in
paragraphs I to 10 and 12 of the first cause of action with the qualification that Original
certificates of Title Nos. 185 and 472 were issued "more than 37 years ago" in the names of
Juan (Banli) and Ambrosia under the circumstances set forth in Juan S. Salao, Jr.'s "positive
defenses" and "not under the circumstances stated in the in the amended complaint".
The plaintiffs contend that the answer of Juan S. Salao, Jr. was in effect tin admission of the
allegations in their first cause of action that there was a co-ownership among Ambrosia, Juan,
AIejandra and Valentin, all surnamed Salao, regarding the Dampalit property as early as 1904
or 1905; that the common funds were invested the acquisition of the two fishponds; that the
47-hectare Calunuran fishpond was verbally adjudicated to Valentin Salao in the l919 partition
and that there was a verbal stipulation to to register "said lands in the name only of Juan Y.
Salao".
That contention is unfounded. Under section 6, Rule 9 of the 1940 of Rules of Court the
answer should "contain either a specific dinial a statement of matters in accordance of the
cause or causes of action asserted in the complaint". Section 7 of the same rule requires the
defendant to "deal specificaly with each material allegation of fact the truth of wihich he does
not admit and, whenever practicable shall set forth the substance of the matters which he will
rely upon to support his denial". "Material averments in the complaint, other than those as to
the amount damage, shall be deemed admitted when specifically denied" (Sec. 8). "The
defendant may set forth set forth by answer as many affirmative defenses as he may have. All
grounds of defenses as would raise issues of fact not arising upon the preceding pleading
must be specifically pleaded" (Sec. 9).
What defendant Juan S. Salao, Jr. did in his answer was to set forth in his "positive defenses"
the matters in avoidance of plaintiffs' first cause of action which which supported his denials of
paragraphs 4 to 10 and 12 of the first cause of action. Obviously, he did so because he found
it impracticable to state pierceneal his own version as to the acquisition of the two fishponds
or to make a tedious and repetitious recital of the ultimate facts contradicting allegations of
the first cause of action.
We hold that in doing so he substantially complied with Rule 9 of the 1940 Rules of Court. It
may be noted that under the present Rules of Court a "negative defense is the specific denial
of t the material fact or facts alleged in the complaint essential to plaintiff's cause of causes of
action". On the other hand, "an affirmative defense is an allegation of new matter which, while
admitting the material allegations of the complaint, expressly or impliedly, would nevertheless
prevent or bar recovery by the plaintiff." Affirmative defenses include all matters set up "by of
confession and avoidance". (Sec. 5, Rule 6, Rules of Court).
The case of El Hogar Filipino vs. Santos Investments, 74 Phil. 79 and similar cases are
distinguishable from the instant case. In the El Hogar case the defendant filed a laconic
answer containing the statement that it denied "generally ans specifically each and every
allegation contained in each and every paragraph of the complaint". It did not set forth in its
answer any matters by way of confession and avoidance. It did not interpose any matters by
way of confession and avoidance. It did not interpose any affirmative defenses.
Under those circumstances, it was held that defendant's specific denial was really a general
denial which was tantamount to an admission of the allegations of the complaint and which
justified judgment on the pleadings. That is not the situation in this case.
The other nine assignments of error of the plaintiffs may be reduced to the decisive issue of
whether the Calunuran fishpond was held in trust for Valentin Salao by Juan Y. Salao, Sr. and
Ambrosia Salao. That issue is tied up with the question of whether plaintiffs' action for
reconveyance had already prescribed.
The plaintiffs contend that their action is "to enforce a trust which defendant" Juan S. Salao,
Jr. allegedly violated. The existence of a trust was not definitely alleged in plaintiffs' complaint.
They mentioned trust for the first time on page 2 of their appelants' brief.
To determine if the plaintiffs have a cause of action for the enforcement of a trust, it is
necessary to maek some exegesis on the nature of trusts (fideicomosis). Trusts in Anglo-
American jurisprudence were derived from the fideicommissa of the Roman law (Government
of the Philippine Islands vs. Abadilla, 46 Phil. 642, 646).
"In its technical legal sense, a trust is defined as the right, enforceable solely in equity, to the
beneficial enjoyment of property, the legal title to which is vested in another, but the word
'trust' is frequently employed to indicate duties, relations, and responsibilities which are not
strictly technical trusts" (89 C.J.S. 712).
A person who establishes a trust is called the trustor; one in whom confidence is reposed as
regards property for the benefit of another person is known as the trustee; and the person for
whose benefit the trust has been created is referred to as the beneficiary" (Art. 1440, Civil
Code). There is a fiduciary relation between the trustee and the cestui que trust as regards
certain property, real, personal, money or choses in action (Pacheco vs. Arro, 85 Phil. 505).
"Trusts are either express or implied. Express trusts are created by the intention of the trustor
or of the parties. Implied trusts come into being by operation of law" (Art. 1441, Civil Code).
"No express trusts concerning an immovable or any interest therein may be proven by parol
evidence. An implied trust may be proven by oral evidence" (Ibid, Arts. 1443 and 1457).
"No particular words are required for the creation of an express trust, it being sufficient that a
trust is clearly intended" (Ibid, Art. 1444; Tuason de Perez vs. Caluag, 96 Phil. 981; Julio vs.
Dalandan, L-19012, October 30, 1967, 21 SCRA 543, 546). "Express trusts are those which
are created by the direct and positive acts of the parties, by some writing or deed, or will, or
by words either expressly or impliedly evincing an intention to create a trust" (89 C.J.S. 72).
"Implied trusts are those which, without being expressed, are deducible from the nature of the
transaction as matters of intent, or which are superinduced on the transaction by operation of
law as matter of equity, independently of the particular intention of the parties" (89 C.J.S.
724). They are ordinarily subdivided into resulting and constructive trusts (89 C.J.S. 722).
"A resulting trust. is broadly defined as a trust which is raised or created by the act or
construction of law, but in its more restricted sense it is a trust raised by implication of law and
presumed to have been contemplated by the parties, the intention as to which is to be found
in the nature of their transaction, but not expressed in the deed or instrument of conveyance
(89 C.J.S. 725). Examples of resulting trusts are found in articles 1448 to 1455 of the Civil
Code. (See Padilla vs. Court of Appeals, L-31569, September 28, 1973, 53 SCRA 168, 179;
Martinez vs. Graño 42 Phil. 35).
On the other hand, a constructive trust is -a trust "raised by construction of law, or arising by
operation of law". In a more restricted sense and as contra-distinguished from a resulting
trust, a constructive trust is "a trust not created by any words, either expressly or impliedly
evincing a direct intension to create a trust, but by the construction of equity in order to satisfy
the demands of justice." It does not arise "by agreement or intention, but by operation of law."
(89 C.J.S. 726-727).
Thus, "if property is acquired through mistake or fraud, the person obtaining it is, by force of
law, considered a trustee of an implied trust for the benefit of the person from whom the
property comes" (Art. 1456, Civil Code).
Or "if a person obtains legal title to property by fraud or concealment, courts of equity will
impress upon the title a so-called constructive trust in favor of the defrauded party". Such a
constructive trust is not a trust in the technical sense. (Gayondato vs. Treasurer of the P. I., 49
Phil. 244).
Not a scintilla of documentary evidence was presented by the plaintiffs to prove that there
was an express trust over the Calunuran fishpond in favor of Valentin Salao. Purely parol
evidence was offered by them to prove the alleged trust. Their claim that in the oral partition in
1919 of the two fishponds the Calunuran fishpond was assigned to Valentin Salao is legally
untenable.
It is legally indefensible because the terms of article 1443 of the Civil Code (already in force
when the action herein was instituted) are peremptory and unmistakable: parol evidence
cannot be used to prove an express trust concerning realty.
Is plaintiffs' massive oral evidence sufficient to prove an implied trust, resulting or
constructive, regarding the two fishponds?
Plaintiffs' pleadings and evidence cannot be relied upon to prove an implied trust. The trial
court's firm conclusion that there was no community of property during the lifetime of
Valentina; Ignacio or before 1914 is substantiated by defendants' documentary evidence. The
existence of the alleged co-ownership over the lands supposedly inherited from Manuel Salao
in 1885 is the basis of plaintiffs' contention that the Calunuran fishpond was held in trust for
Valentin Salao.
But that co-ownership was not proven by any competent evidence. It is quite improbable
because the alleged estate of Manuel Salao was likewise not satisfactorily proven. The
plaintiffs alleged in their original complaint that there was a co-ownership over two hectares of
land left by Manuel Salao. In their amended complaint, they alleged that the co-ownership
was over seven hectares of fishponds located in Barrio Dampalit, Malabon, Rizal. In their brief
they alleged that the fishponds, ricelands and saltbeds owned in common in Barrio Dampalit
had an area of twenty-eight hectares, of which sixteen hectares pertained to Valentina Ignacio
and eleven hectares represented Manuel Salao's estate.
They theorized that the eleven hectares "were, and necessarily, the nucleus, nay the very
root, of the property now in litigation (page 6, plaintiffs-appellants' brief). But the eleven
hectares were not proven by any trustworthy evidence. Benita Salao's testimony that in 1918
or 1919 Juan, Ambrosia, Alejandra and Valentin partitioned twenty-eight hectares of lands
located in Barrio Dampalit is not credible. As noted by the defendants, Manuel Salao was not
even mentioned in plaintiffs' complaints.
The 1919 partition of Valentina Ignacio's estate covered about seventeen hectares of
fishponds and ricelands (Exh. 21). If at the time that partition was made there were eleven
hectares of land in Barrio Dampalit belonging to Manuel Salao, who died in 1885, those
eleven hectares would have been partitioned in writing as in the case of the seventeen
hectares belonging to Valentina Ignacio's estate.
It is incredible that the forty-seven-hectare Calunuran fishpond would be adjudicated to
Valentin Salao mere by by word of mouth. Incredible because for the partition of the
seventeen hectares of land left by Valentina Ignacio an elaborate "Escritura de Particion"
consisting of twenty-two pages had to be executed by the four Salao heirs. Surely, for the
partition of one hundred forty-five hectares of fishponds among three of the same Salao heirs
an oral adjudication would not have sufficed.
The improbability of the alleged oral partition becomes more evident when it is borne in mind
that the two fishponds were registered land and "the act of registration" is "the operative act"
that conveys and affects the land (Sec. 50, Act No. 496). That means that any transaction
affecting the registered land should be evidenced by a registerable deed. The fact that
Valentin Salao and his successors-in-interest, the plaintiffs, never bothered for a period of
nearly forty years to procure any documentary evidence to establish his supposed interest ox
participation in the two fishponds is very suggestive of the absence of such interest.
The matter may be viewed from another angle. As already stated, the deed of partition for
Valentina Ignacio's estate wag notarized in 1919 (Exh. 21). The plaintiffs assert that the two
fishponds were verbally partitioned also in 1919 and that the Calunuran fishpond was
assigned to Valentin Salao as his share.
Now in the partition of Valentina Ignacio's estate, Valentin was obligated to pay P3,355.25 to
Ambrosia Salao. If, according to the plaintiffs, Ambrosia administered the two fishponds and
was the custodian of its earnings, then it could have been easily stipulated in the deed
partitioning Valentina Ignacio's estate that the amount due from Valentin would just be
deducted by Ambrosia from his share of the earnings of the two fishponds. There was no
such stipulation. Not a shred of documentary evidence shows Valentin's participation in the
two fishponds.
The plaintiffs utterly failed to measure up to the yardstick that a trust must be proven by clear,
satisfactory and convincing evidence. It cannot rest on vague and uncertain evidence or on
loose, equivocal or indefinite declarations (De Leon vs. Molo-Peckson, 116 Phil. 1267, 1273).
Trust and trustee; establishment of trust by parol evidence; certainty of proof. —
Where a trust is to be established by oral proof, the testimony supporting it must
be sufficiently strong to prove the right of the alleged beneficiary with as much
certainty as if a document proving the trust were shown. A trust cannot be
established, contrary to the recitals of a Torrens title, upon vague and
inconclusive proof. (Syllabus, Suarez vs. Tirambulo, 59 Phil. 303).
Trusts; evidence needed to establish trust on parol testimony. — In order to
establish a trust in real property by parol evidence, the proof should be as fully
convincing as if the act giving rise to the trust obligation were proven by an
authentic document. Such a trust cannot be established upon testimony
consisting in large part of insecure surmises based on ancient hearsay.
(Syllabus, Santa Juana vs. Del Rosario 50 Phil. 110).
The foregoing rulings are good under article 1457 of the Civil Code which, as already noted,
allows an implied trust to be proven by oral evidence. Trustworthy oral evidence is required to
prove an implied trust because, oral evidence can be easily fabricated.
On the other hand, a Torrens title is generally a conclusive of the ownership of the land
referred to therein (Sec. 47, Act 496). A strong presumption exists. that Torrens titles were
regularly issued and that they are valid. In order to maintain an action for reconveyance, proof
as to the fiduciary relation of the parties must be clear and convincing (Yumul vs. Rivera and
Dizon, 64 Phil. 13, 17-18).
The real purpose of the Torrens system is, to quiet title to land. "Once a title is registered, the
owner may rest secure, without the necessity of waiting in the portals of the court, or sitting in
the mirador de su casa, to avoid the possibility of losing his land" (Legarda and Prieto vs.
Saleeby, 31 Phil. 590, 593).
There was no resulting trust in this case because there never was any intention on the part of
Juan Y. Salao, Sr., Ambrosia Salao and Valentin Salao to create any trust. There was no
constructive trust because the registration of the two fishponds in the names of Juan and
Ambrosia was not vitiated by fraud or mistake. This is not a case where to satisfy the
demands of justice it is necessary to consider the Calunuran fishpond " being held in trust by
the heirs of Juan Y. Salao, Sr. for the heirs of Valentin Salao.
And even assuming that there was an implied trust, plaintiffs' action is clearly barred by
prescription or laches (Ramos vs. Ramos, L-19872, December 3, 1974, 61 SCRA 284;
Quiniano vs. Court of Appeals, L-23024, May 31, 1971, 39 SCRA 221; Varsity Hills, Inc. vs.
Navarro, 9, February 29, 1972, 43 SCRA 503; Alzona vs. Capunitan and Reyes, 114 Phil.
377).
Under Act No. 190, whose statute of limitation would apply if there were an implied trust in this
case, the longest period of extinctive prescription was only ten year (Sec. 40; Diaz vs.
Gorricho and Aguado, 103 Phil. 261, 266).
The Calunuran fishpond was registered in 1911. The written extrajudicial demand for its
reconveyance was made by the plaintiffs in 1951. Their action was filed in 1952 or after the
lapse of more than forty years from the date of registration. The plaintiffs and their
predecessor-in-interest, Valentin Salao, slept on their rights if they had any rights at all.
Vigilanti prospiciunt jura or the law protects him who is watchful of his rights (92 C.J.S. 1011,
citing Esguerra vs. Tecson, 21 Phil. 518, 521).
"Undue delay in the enforcement of a right is strongly persuasive of a lack of merit in the
claim, since it is human nature for a person to assert his rights most strongly when they are
threatened or invaded". "Laches or unreasonable delay on the part of a plaintiff in seeking to
enforce a right is not only persuasive of a want of merit but may, according to the
circumstances, be destructive of the right itself." (Buenaventura vs. David, 37 Phil. 435, 440-
441).
Having reached the conclusion that the plaintiffs are not entitled to the reconveyance of the
Calunuran fishpond, it is no longer n to Pass upon the validity of the donation made by
Ambrosia Salao to Juan S. Salao, Jr. of her one-half share in the two fishponds The plaintiffs
have no right and personality to assil that donation.
Even if the donation were declared void, the plaintiffs would not have any successional rights
to Ambrosia's share. The sole legal heir of Ambrosia was her nephew, Juan, Jr., her nearest
relative within the third degree. Valentin Salao, if living in 1945 when Ambrosia died, would
have been also her legal heir, together with his first cousin, Juan, Jr. (Juani). Benita Salao, the
daughter of Valentin, could not represent him in the succession to the estate of Ambrosia
since in the collateral line, representation takes place only in favor of the children of brothers
or sisters whether they be of the full or half blood is (Art 972, Civil Code). The nephew
excludes a grandniece like Benita Salao or great-gandnephews like the plaintiffs Alcuriza
(Pavia vs. Iturralde 5 Phil. 176).
The trial court did not err in dismissing plaintiffs' complaint.
Defendants' appeal. — The defendants dispute the lower court's finding that the plaintiffs filed
their action in good faith. The defendants contend that they are entitled to damages because
the plaintiffs acted maliciously or in bad faith in suing them. They ask for P25,000 attorneys
fees and litigation expenses and, in addition, moral damages.
We hold that defemdamts' appeal is not meritorious. The record shows that the plaintiffs
presented fifteen witnesses during the protracted trial of this case which lasted from 1954 to
1959. They fought tenaciously. They obviously incurred considerable expenses in prosecuting
their case. Although their causes of action turned out to be unfounded, yet the pertinacity and
vigor with which they pressed their claim indicate their sincerity and good faith.
There is the further consideration that the parties were descendants of common ancestors,
the spouses Manuel Salao and Valentina Ignacio, and that plaintiffs' action was based on their
honest supposition that the funds used in the acquisition of the lands in litigation were
earnings of the properties allegedly inherited from Manuel Salao.
Considering those circumstances, it cannot be concluded with certitude that plaintiffs' action
was manifestly frivolous or was primarily intended to harass the defendants. An award for
damages to the defendants does not appear to be just and proper.
The worries and anxiety of a defendant in a litigation that was not maliciously instituted are
not the moral damages contemplated in the law (Solis & Yarisantos vs. Salvador, L-17022,
August 14, 1965, 14 SCRA 887; Ramos vs. Ramos, supra). The instant case is not among
the cases mentioned in articles 2219 and 2220 of the Civil Code wherein moral damages may
be recovered. Nor can it be regarded as analogous to any of the cases mentioned in those
articles.
The adverse result of an action does not per se make the act wrongful and
subject the actor to the payment of moral damages. The law could not have
meant to impose a penalty on the right to litigate; such right is so precious that
moral damages may not be charged on those who may exercise it erroneously.
(Barreto vs. Arevalo, 99 Phil. 771. 779).
The defendants invoke article 2208 (4) (11) of the Civil Code which provides that attorney's
fees may be recovered "in case of a clearly unfounded civil action or proceeding against the
plaintiff" (defendant is a plaintiff in his counterclaim) or "in any other case where the court
deems it just and equitable" that attorney's fees should he awarded.
But once it is conceded that the plaintiffs acted in good faith in filing their action there would
be no basis for adjudging them liable to the defendants for attorney's fees and litigation
expenses (See Rizal Surety & Insurance Co., Inc. vs. Court of Appeals, L-23729, May 16,
1967, 20 SCRA 61).
It is not sound public policy to set a premium on the right to litigate. An adverse decision does
not ipso facto justify the award of attorney's fees to the winning party (Herrera vs. Luy Kim
Guan, 110 Phil. 1020, 1028; Heirs of Justiva vs. Gustilo, 61 O. G. 6959).
The trial court's judgment is affirmed. No pronouncement as to costs.
SO ORDERED.
Barredo (Chairman), Antonio, Concepcion, Jr. and Martin, JJ., concur.
Fernando (Chairman, Second Division), J., took no part.
Martin, J., was designated to sit in the Second Division.

SUPREME COURT
Manila
EN BANC
G.R. No. L-27451 February 28, 1969
PAZ ONGSIACO and the HEIRS OF THE LATE AUGUSTO ONGSIACO, namely, AUGUSTO
ONGSIACO, JR. Y DIRIC, FERNANDO ONGSIACO Y DIRIC, JORGE ONGSIACO Y DIRIC,
RODOLFO ONGSIACO Y GARCIA, PACITA ONGSIACO Y GARCIA, ANGELA ONGSIACO
Y GARCIA, AUGUSTO ONGSIACO Y GARCIA, LILIA ONGSIACO Y GARCIA, the minor
LYDIA ONGSIACO Y GARCIA represented by her judicial guardian ALICIA GARCIA,
MELENCIO ONGSIACO Y DIZON, NORMA ONGSIACO Y DIZON, ALFREDO ONGSIACO
Y DIZON, ESTRELLA ONGSIACO Y SANTOS, SOCORRO ONGSIACO Y SANTOS, ANGEL
ONGSIACO Y SANTOS and the minors IMELDA ONGSIACO Y SANTOS, JOSEFINA
ONGSIACO Y SANTOS NENITA ONGSIACO Y SANTOS, and JUANITO ONGSIACO Y
SANTOS, represented by their judicial guardian SALUD SANTOS, petitioners,
vs.
ROMAN D. DALLO, MATIAS TIMOTEO, MARCELO RONQUILLO, CESARIO
SERVANDO, DIONISIO ENRICO, ILADIO JULIAN, BRUNO S. TEJO, VICTORIANO
DUPALE, GUALBERTO CORPUZ, MARCELO DELO, MARIANO MENDOZA, AGUEDA
MENDOZA, VENANCIO DALLO, PEDRO D. DELIZO, ESTEBAN RIVERA, TRINIDAD
ONGSIACO, LORENZO DOMINGO, JUAN AREOLA, NORBERTO NONO, CECILIO
REPANGCOL, ESPERANZA ZAMORA, APOLONIO DELIZO, TORIBIO MORALES,
CESARIO TEJERO, PAULO RONQUILLO, LIBERATA TEJERO, FAUSTINO DANO,
LEODEGARIA SIMOS, CLAUDIO RONQUILLO, MANUEL CARRASCO, PURIFICACION
DALLO, SINFOROSO SABATIN, VALENTIN TOMAS, JUAN PANGALILINGAN,
MODESTO POSADAS, CLAUDIA DOMINGO, GREGORIO PANGALILINGAN, HIPOLITO
RAFUET, INOCENCIO BERNARDINO, JUAN T. SUMALBAG, AMANDO BAUTISTA,
PROCESO ESTONILO, AGUSTINA DIVINA, ENCARNACION MACARANG, JOSE BANES,
HERMINIGILDO DAGDAG, FORTUNATO JACOBE, GREGORIO ADARNA, ADRIANO
MANDAPAT, MELECIO TOMAS, MAXIMA DOCTOLERO, PERFECTO CABANTING,
BENJAMIN DONA, Propietarios Interdictos Inc., THE HONORABLE JUDGE SALVADOR
REYES of the Court of First Instance of Nueva Ecija (Cabanatuan Branch) and THE
HONORABLE JUDGE PLACIDO RAMOS of the Court of First Instance of Nueva Ecija
Guimba Branch), respondents.
Gallego and Natividad for petitioners.
Dallo and Dallo for respondents.
MAKALINTAL, J.:
The plaintiffs below (respondents here) filed a complaint 1 against herein petitioners alleging ownership
of a parcel of land situated in the municipality of Cuyapo, Nueva Ecija, with an area of 255 hectares,
more or less, and praying that the defendants be ordered to surrender possession to the plaintiffs and to
pay damages, attorney's fees and costs. The said parcel is described in the complaint as follows:
A PARCEL OF LAND ADJOINED IN MASSE
INDICATED "LOT X"
(Between the red and green lines) on the plan S.W.O. 24137, portion of our actual
LANDHOLDINGS. Bounded on the North, North-west, West, South-west and South by the
property of the defendants, registered in 1910 in their registration case 5550 covered in O.C.T.
139 and on the East are numerous individual lots owned by the plaintiffs; containing an area of
TWO HUNDRED FIFTY FIVE (255) hectares, more or less, situated in the aforesaid barrios of
the municipality of Cuyapo, Province of Nueva Ecija. This property is assessed for the amount
of P76,500.00 at P300.00 per hectare, as per schedule of values in the municipality of Cuyapo,
Province of Nueva Ecija.
The defendants moved to dismiss on the following grounds:
1. That the cause of action if any is already barred by the statute of limitations.
2. The Court has no jurisdiction over the nature of the action as in effect it seeks to annul or
revoke decisions and solutions of the Supreme Court considering that a court of first instance is
not authorized to do this even assuming that the decisions or resolutions of the Supreme Court
are wrong.
3. The complaint stated no cause of action.
4. The cause of action is already barred by two prior judgments and several resolutions.
Respondent Court denied the motion to dismiss in its order of July 18, 1966, which states:
One of the grounds of the Motion to Dismiss filed by the defendant Paz Ongsiaco thru her
counsel on June 8, 1966 is that the cause of action is already barred by two prior judgments and
several resolutions. However, the complaint on its face appears to have a different cause of
action than the two prior cases and it is up to the defendants to prove their defense of res
judicata. Furthermore, the allegation of the plaintiffs that the defendants are encroaching upon
the boundaries of their property is also a matter of evidence.
It may be noted that the foregoing order of denial ruled merely on two of the grounds alleged in the
motion to dismiss, namely, bar by prior judgments and lack of cause of action. It did not resolve the
plea of prescription. This omission is now relied upon, among other reasons, in the instant petition for
certiorari to set aside the order aforequoted, as well as a subsequent order denying petitioners' motion
for reconsideration.
The voluminous pleadings, motions and memoranda filed here deal largely with the plea of res
judicata, particularly with the question of identity between the land claimed by respondents as an
integral portion of the lands involved in the previous litigations between the parties and/or their
predecessors-in-interest, namely: Government of the Philippine Islands vs. Leoncio Abad, et al., (47
Phil. 573); Feliciano Abad, et al. vs. Government of the Philippines, (103 Phil. 247); Luis Antonio, et
al. vs. Jose Mariano de Santos, et al., Cad. Case No. 19 of the Court of First Instance of Nueva Ecija
and the resolutions of the Supreme Court of October 19, 1965 and December 3, 1965, dismissing the
appeal in the last mentioned case.
For the resolution of the present petition it is not necessary to go into identity of the land as a point
material to the question of res judicata. The issue of prescription is decisive, and the failure of
respondent Court to resolve it constitutes a grave abuse of discretion correctible by certiorari.
Paragraph 7 of the complaint below contains the following allegation:
That the defendants are illegally in possession, occupation and cultivation of the land indicated
"LOT X" on Plan SWO 2437, since 1924 after the Cadastral Court's decision in 1924 and
benefited on the crops raised thereon, to the prejudice of the plaintiffs. Such possession and
cultivation by the defendants over the land in question are without just title, for it was not within
the bounds of their registered property in 1910, covered by O. C. T. No. 139, issued by virtue of
DECREE 4485-A in their Registration Case No. 5550.
Elaborating on the matter of possession, respondents state in their memorandum of September 18,
1967:
... Notwithstanding the fact that plaintiffs, predecessors-in-interests were the original occupants
over the land (Lot "X") since time immemorial, who cleared and introduced improvements
thereon, such as the pilapils, dams, fruit trees, coconut plants and others on the land (Lot "X")
and became productivity and cultivable (sic). However, on or before 1924 during the cadastral
survey of Cuyapo, Nueva Ecija, they (defendants-petitioners) moved their monuments 450
meters, more or less, from their respective permanent places according to the technical
description specified in the notice of publication in the Official Gazette of their Registration
case 5550 in 1910. Thereafter, their Overseers, Encargados or Catiwalas informed to the people,
(our predecessors-in-interests) that their boundary is up to the RED LINES, thus in 1924, our
predecessors-in-interests left the premises (Lot "X") and stayed up to the RED LINE appearing
on plan SWO-24137. However, such possession of the defendants-petitioners over the land (lot
"X") is possession in bad faith, which it would not ripen into ownership.lawphi1.nêt
It is thus admitted that since 1924 or for a period of forty-two years before the basic complaint was
filed in 1966, petitioners had been in possession of the land claimed by plaintiffs below, now
respondents, and that such possession was adverse, or in concept of owner, although allegedly in bad
faith. Under the Code of Civil Procedure formerly in force, good or bad faith was immaterial for
purposes of acquisitive prescription. Adverse possession in either character ripened into ownership
after the lapse of ten years. 2 In the same manner, an action to recover title to or possession of
immovable property prescribed in the same period. 3
There be no doubt that the former laws on prescription apply here, pursuant to Article 1116 of the Civil
Code. 4 Even the thirty-year period fixed in the new Civil Code for the acquisition of ownership by
extraordinary prescription, 5 or for the extinction of the right of action (real) over immovables, 6 had
expired when the present action was filed.
WHEREFORE, the writ prayed for is granted. The orders complained of are set aside and the
complaint filed by private respondents below is ordered dismissed, with costs.
Concepcion, C.J., Reyes, J.B.L., Dizon, Zaldivar, Sanchez, Castro, Capistrano, Teehankee and
Barredo, JJ., concur.
Fernando, J., took no part.
Footnotes
1Civil Case No. 113-G, CFI, Nueva Ecija (Guimba Branch).
2"SEC. 41. Title to land by prescription. — Ten years actual adverse possession by any person
claiming to be the owner for that time of any land or interest in land, uninterruptedly continued
for ten years by occupancy, descent, grants, or otherwise, in whatever way such occupancy may
have commenced or continued, shall vest in every actual occupant or possessor of such land a
full and complete title ...." (Act No. 190)
3"SEC. 40. Period of prescription as to real estate. — An action for recovery of title to, or
possession of, real property, or an interest therein, can only be brought within ten years after the
cause of such action accrues."
4"ART. 1116. Prescription already running before the effectivity of this Code shall be governed
by laws previously in force, but if since the time this Code took effect the entire period herein
required for prescription should elapse, the present Code shall be applicable even though by the
former laws a longer period might be required."
5"ART. 1137. Ownership and other real rights over immovables also prescribe through
uninterrupted adverse possession thereof for thirty years, without need of title or of good faith."
6"ART. 1141. Real actions over immovables prescribe after thirty years. This provision is
without prejudice to what is established for the acquisition of ownership and other real rights by
prescription."
SUPREME COURT
Manila
EN BANC
TEOFILA FELICES, plaintiff-appellant,

vs.
FRANCISCO COLEGADO defendant-appellee.
Ezekiel S. Grageda for plaintiff-appellant.
Reyes and Dy-Liacco for defendant- appellee.
ZALDIVAR, J.:
Appeal from the decision of the Court of First Instance of Camarines Sur, in its Civil Case No. 55510, on a question of law — the facts having been stipulated by
the parties in the court below.
Felipe Felices died on November 5, 1938. The only property left by him was a homestead located in Barrio Curry, Pili, Camarines Sur, comprising 21 hectares,
more or less, for which Original Certificate of Title No. 73 was issued in his name. Soon after his death, five of his seven surviving children, namely, Marta, Maria,
Teofila Silverio, and Pedro, all surnamed Felices, physically partitioned among themselves the aforementioned homestead, each one taking actual and exclusive
possession of the specific portion pertaining to him/her, although no transfer certificate of title was issued in their individual names. 1 On February 24, 1949, Maria
Felices sold her share to Roman Iriola with right of repurchase (con pacto de retro), which share is on the extreme northern part of the homestead, more
particularly described as follows:
A parcel of irrigated rice land covering an area of four (4) and one-fourth hectares situated in the Barrio of Curry, Municipality of Pili,
Province of Camarines Sur, Philippines, bounded on the North by the property of Mamerto Iriola; on the East by the Himaao River; on the
South by the property of the heirs of Felipe Felices; and on the West by the Lagundi Creek. This land is an integral part of the land
described under Original Certificate of Title No. 73 issued on October 20, 1948. Proportionate assessed value: P704.00.
Upon the insistence of Roman Iriola, the deed of conditional sale was signed by all the brothers and sisters of Maria and soon after the execution of the deed
Iriola took possession of the above-described property.
Sometime, in 1951, Silverio Felices, Pedro Felices, Marta Felices and Maria Felices agreed to sell absolutely to Francisco Colegado their respective shares in
the homestead for the total price of P8,500.00. Knowing, however, that such sale could not be validly effected because of the prohibition to alienate a homestead
within five years from the issuance of the patent, they agreed to execute the document of sale later on. In the meantime, and inasmuch as the share of Maria
Felices was still in the possession of Roman Iriola by virtue of its having been previously sold to him with right of repurchase, Francisco Colegado advanced the
amount for the repurchase of Maria's share from Roman Iriola.
When the repurchase price was offered to Roman Iriola, the latter refused to allow the repurchase. The Felices brothers and sisters (Silverio, Pedro, Marta and
Maria), therefore, consigned the amount for the repurchase with the court and filed Civil Case No. 1991 in the Court of First Instance of Camarines Sur to compel
Roman Iriola to allow the repurchase and accept the proffered repurchase money. In the complaint, Teofila Felices, the other sister, who had a share in the
homestead, was joined as party defendant along with Roman Iriola because she refused to join as a party plaintiff with her brothers and sisters.
On September 11, 1953, Maria, Marta, Silverio and Pedro, all surnamed Felices, and Francisco Colegado finally executed a deed of absolute sale whereby the
said Felices brothers and sisters ceded to the latter their respective shares in the homestead inherited by them from their deceased father.
On June 19, 1954, a decision was rendered by the Court of First Instance of Camarines Sur in Civil Case No. 1991 ordering Roman Iriola to allow Maria Felices
to repurchase the property that she had previously sold conditionally to him. Iriola appealed from that decision to the Court of Appeals, and the latter court
affirmed the decision. Upon payment by Francisco Colegado on August 21, 1962, of the sum of P2,053.61 to the heirs of Roman Iriola, 2 as finally determined by
the Court of Appeals, said heirs surrendered the possession of the land to Colegado.
Shortly thereafter, or on September 7, 1962, Teofila Felices, thru her lawyer, addressed a letter to Francisco Colegado informing him of her desire to redeem the
parcel of land sold to him by Maria Felices and at the same time offering the sum of P2,053.61 as the redemption price of the land — which amount was later on
deposited with the Clerk of Court — but this offer to redeem was refused by Francisco Colegado on September 19, 1962, Teofila Felices commenced the present
action against Francisco Colegado in the Court of First Instance of Camarines Sur (Civil Case No. 5510), asserting that being a co-owner defendant Colegado
can be compelled to allow her to exercise the right of legal redemption over that portion which her sister Maria Felices had conditionally sold to Roman Iriola and
later repurchased from Iriola by Colegado invoking the provision of Article 1620 of the Civil Code which reads:
A co-owner of a thing may exercise the right of redemption in case the shares of all the other co-owners or of any of them, are sold to a
third person. If the price of the alienation is grossly excessive, the redemptioner shall pay only a reasonable one.
Should two or more co-owners desire to exercise the right of redemption, they may only do so in proportion to the share they may
respectively have in the thing owned in common.
In his answer, which contains a counterclaim, defendant Francisco Colegado maintains that plaintiff is now precluded to redeem the land in question. He bases
his stand on Article 1088 of the same Code,3 and asserts that once a property is partitioned among the heirs, as in the case at bar, the sale by any one of the
heirs of his share to a third person cannot be the subject of redemption by his co-heirs.
On February 26, 1964, the trial court rendered its decision dismissing the complaint, as well as defendant's counterclaim, with costs against plaintiff. In its
decision, the trial court made the following findings and conclusions:
The partition of the homestead left by the deceased Felipe Felices is a fact undisputed by the parties. This was the subject of their
stipulation which reads:
"That even before the issuance of Original Certificate of Title No. 73 on October 20, 1948 to the deceased Felipe
Felices the children of the said deceased immediately after his death had already made a physical partition of the
land among themselves, although no transfer certificate of title was actually issued in favor of each heir to his or her
corresponding share."
The partition conferred upon each heir "the exclusive ownership of the property adjudicated to him" (Javelesa vs. Barrios, et al., 66 Phil.
107; Aliases vs. Alcantara, 16 Phil. 489, Alcala vs. Alcala 35 Phil. 679). In other words, after the partition of the homestead of Felipe
Felices immediately following his death on November 5, 1938, the co-ownership or co-heirship among his children ceased and each of
them became the exclusive owner of the portion of the homestead adjudicated to him or her own individual share. Consequently, Teofila
Felices is not a co-owner of the share of Maria Felices in the said homestead and she has, therefore, no right to redeem the same from
Francisco Colegado.
The defendant's counterclaim for damages is not supported by the evidence. It is convincingly disproved by the emphatic denial of the
plaintiff.
WHEREFORE, the complaint and counterclaims are DISMISSED with costs against the plaintiff.4
Hence the present appeal by plaintiff Teofila Felices.
The only question to be resolved in this appeals whether or not, under the facts stated in the foregoing paragraphs, plaintiff-appellant can exercise the right of
legal redemption of the land in question from defendant-appellee, pursuant to the provisions of Article 1620 and/or Article 1088 of the Civil Code. As correctly
held by the trial court, Article 1088 of the Civil Code has no application in the present case because said article can only be availed of when a co-heir sells his
share before the partition of the hereditary estate.5 That article refers to the hereditary right itself, in the abstract sense, without specifying any particular portion,
although the proportionate participation of each co-heir is ascertainable. This article presupposes that there has as yet been no distribution of the estate among
the heirs, for the moment such distribution has taken place, even in a state of pro-indiviso, the heirs ceased to be considered simply as co-heirs, but they have
thereby become co-owners.6 Consequently, if one of the owners sells his share to a stranger, a co-owner may claim his right of redemption as a co-owner under
Article 1620 of the Civil Code,7 not as a co-heir under Article 1088 of the same Code.
But in the instant case, We also find that plaintiff-appellant has no right to redeem the property as co-owner under Article 1620 of the Civil Code. Co-ownership
exists when the ownership of an undivided thing or right belongs to different persons.8 It is an inherent and peculiar feature of co-ownership that although the co-
owners may have unequal shares in the common property, quantitatively speaking, each co-owner has the same right in a qualitative sense as any one of the
other co-owners. In other words, every co-owner is the 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, because until division is effected such portion is not concretely determined.
In the case before Us, it is admitted by plaintiff-appellant herself that immediately after the death of their father Felipe Felices, she and her brothers and sisters
divided or partitioned the homestead among themselves extrajudicially, each heir taking physical and exclusive possession and control of his or her aliquot share.
The portion given to Maria Felices, which plaintiff-appellant now seeks to redeem, is about one-fifth of the homestead on the northernmost part, marked out by
metes and bounds, as described in paragraph 3 of the complaint. And when Maria Felices sold her share to Roman Iriola in 1949, she delivered to him the
possession of the particular portion of the homestead constituting her distinct share, and since then Roman Iriola, and later his heirs upon his death, have
continuously cultivated the land and introduced improvements thereon until the possession thereof was in turn delivered to defendant-appellee Francisco
Colegado April 1962 pursuant to the decision of the Court of Appeals. There is, therefore, no doubt that at the time Maria Felices sold her share to defendant-
appellee Colegado and even prior thereto when she ceded the same property to Roman Iriola, the community of interest over the entire homestead of their father
between her (Maria) and her brothers and sisters had already ceased, and so the claim of plaintiff-appellant to redeem the property under Article 1620 can not be
sustained because when that property was sold by Maria Felices to defendant-appellee she (plaintiff-appellant) was no longer a co-owner of that particular
property. The following ruling of this Court, speaking through Mr. Justice J. B. L. Reyes, is pertinent to the resolution of the issue in the present case:
The foregoing theory is untenable. Tested against the concept of co-ownership, as authoritatively expressed by the commentators,
appellant is not a co-owner of the registered parcel of land, taken as a unit or subject of co-ownership, since he and the spouses do not
"have a spiritual part of a thing which is not physically divided" (3 Sanchez Roman 162), nor is each of them 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 ..." (3 Manresa
405). The portions of appellant-plaintiff and of the defendant spouses are correctly determined and identifiable, for to the former belongs
the northern half, and to the latter belongs the remaining southern half, of the land. That their respective portions are not technically
described, or that said portions are still embraced in one and the same certificate of title, does not make said portions less determinable or
identifiable, or distinguishable, one from the other, nor that dominion over each portion less exclusive, in their respective owners. Hence,
no right of redemption among co-owners exists. (De la Cruz v. Cruz, et al., L-27759, April 17, 1970, 32 SCRA, 307, 311).9
The foregoing sufficiently disposes of the issue raised in this appeal. However, even granting the claim of plaintiff-appellant that co-ownership of the homestead
still existed as of the time defendant-appellee repurchased the share of Maria Felices from Roman Iriola still she can not exercise the right of legal redemption of
the controverted property. The record shows that on September 11, 1953 defendant-appellee Colegado bought the respective shares of Silverio Felices, Pedro
Felices, and Marta Felices in the homestead. By such purchase defendant-appellee had thereby become a co-owner of the homestead. When defendant-
appellee thereafter paid for the portion allotted to Maria Felices, in August, 1962, he was at that time not a stranger but already a co-owner of the homestead.
hence, plaintiff-appellant cannot redeem the land from defendant-appellee because the latter and plaintiff-appellant had become co-owners, and as co-owners
neither of them has the right of legal redemption against the other. 10 In the case of Viola v. Roura & Tecson (49 Phil., 808), this Court held that the right of legal
redemption is not limited solely and exclusively to original co-owners but applies as well to those who subsequently acquire the respective shares of the co-
owners while the community exists.
WHEREFORE, the decision appealed from is affirmed, with costs against plaintiff-appellant. It is so ordered.
Reyes, J.B.L., Actg. C.J., Dizon, Makalintal, Castro, Fernando, Teehankee, Barredo and Makasiar, JJ., concur.
Concepcion C.J., is on leave.
Villamor J., took no part.
# Footnotes
1 Original Certificate of Title No. 73 was cancelled and Transfer Certificate of Title No. 415 was later issued in the name of the "Heirs of
Felipe Felices."
2 Roman Iriola died before the termination of Civil Case No. 1991.
3 "Art. 1088. Should any of the heirs sell his hereditary rights to a stranger before the partition, any or all of the co-heirs may be
subrogated to the rights of the purchaser by reimbursing him for the price of the sale, provided they do so within the period of one month
from the time they were notified in writing of the sale by the vendor."
4 Pages 62-63, Record on Appeal.
5 Castro, et al v. Castro, 97 Phil. 705.
6 Castro. et al. v. Castro, supra; Caram, et al. v. Court of Appeals, et al., 101 Phil. 315.
7 Saturnino v. Paulino, et al., 97 Phil. 51.
8 Article 484, Civil Code.
9 See also Estoque vs. Pajimula, L-24419, July 15, 1968, 24 SCRA 62-63; Umenga vs. Butacan,
L-16036, February 28, 1963, 7 SCRA 311; and De Jesus vs. Manglapus, 81 Phil. 114.
10 Estrada vs. Reyes, 33 Phil. 31; Magno vs. Viola and Sotto, 61 Phil. 80.

SUPREME COURT
Manila
EN BANC
G.R. No. L-45425 April 29, 1939
JOSE GATCHALIAN, ET AL., plaintiffs-appellants,
vs.
THE COLLECTOR OF INTERNAL REVENUE, defendant-appellee.
Guillermo B. Reyes for appellants.
Office of the Solicitor-General Tuason for appellee.
IMPERIAL, J.:
The plaintiff brought this action to recover from the defendant Collector of Internal Revenue the sum of
P1,863.44, with legal interest thereon, which they paid under protest by way of income tax. They
appealed from the decision rendered in the case on October 23, 1936 by the Court of First Instance of
the City of Manila, which dismissed the action with the costs against them.
The case was submitted for decision upon the following stipulation of facts:
Come now the parties to the above-mentioned case, through their respective undersigned
attorneys, and hereby agree to respectfully submit to this Honorable Court the case upon the
following statement of facts:
1. That plaintiff are all residents of the municipality of Pulilan, Bulacan, and that defendant is
the Collector of Internal Revenue of the Philippines;
2. That prior to December 15, 1934 plaintiffs, in order to enable them to purchase one
sweepstakes ticket valued at two pesos (P2), subscribed and paid therefor the amounts as
follows:
1. Jose Gatchalian .................................................................................................... P0.18
2. Gregoria Cristobal ............................................................................................... .18
3. Saturnina Silva .................................................................................................... .08
4. Guillermo Tapia ................................................................................................... .13
5. Jesus Legaspi ...................................................................................................... .15
6. Jose Silva ............................................................................................................. .07
7. Tomasa Mercado ................................................................................................ .08
8. Julio Gatchalian ................................................................................................... .13
9. Emiliana Santiago ................................................................................................ .13
10. Maria C. Legaspi ............................................................................................... .16
11. Francisco Cabral ............................................................................................... .13
12. Gonzalo Javier .................................................................................................... .14
13. Maria Santiago ................................................................................................... .17
14. Buenaventura Guzman ...................................................................................... .13
15. Mariano Santos ................................................................................................. .14
Total ........................................................................................................ 2.00

3. That immediately thereafter but prior to December 15, 1934, plaintiffs purchased, in the
ordinary course of business, from one of the duly authorized agents of the National Charity
Sweepstakes Office one ticket bearing No. 178637 for the sum of two pesos (P2) and that the
said ticket was registered in the name of Jose Gatchalian and Company;
4. That as a result of the drawing of the sweepstakes on December 15, 1934, the above-
mentioned ticket bearing No. 178637 won one of the third prizes in the amount of P50,000 and
that the corresponding check covering the above-mentioned prize of P50,000 was drawn by the
National Charity Sweepstakes Office in favor of Jose Gatchalian & Company against the
Philippine National Bank, which check was cashed during the latter part of December, 1934 by
Jose Gatchalian & Company;
5. That on December 29, 1934, Jose Gatchalian was required by income tax examiner Alfredo
David to file the corresponding income tax return covering the prize won by Jose Gatchalian &
Company and that on December 29, 1934, the said return was signed by Jose Gatchalian, a copy
of which return is enclosed as Exhibit A and made a part hereof;
6. That on January 8, 1935, the defendant made an assessment against Jose Gatchalian &
Company requesting the payment of the sum of P1,499.94 to the deputy provincial treasurer of
Pulilan, Bulacan, giving to said Jose Gatchalian & Company until January 20, 1935 within
which to pay the said amount of P1,499.94, a copy of which letter marked Exhibit B is enclosed
and made a part hereof;
7. That on January 20, 1935, the plaintiffs, through their attorney, sent to defendant a reply, a
copy of which marked Exhibit C is attached and made a part hereof, requesting exemption from
payment of the income tax to which reply there were enclosed fifteen (15) separate individual
income tax returns filed separately by each one of the plaintiffs, copies of which returns are
attached and marked Exhibit D-1 to D-15, respectively, in order of their names listed in the
caption of this case and made parts hereof; a statement of sale signed by Jose Gatchalian
showing the amount put up by each of the plaintiffs to cover up the attached and marked as
Exhibit E and made a part hereof; and a copy of the affidavit signed by Jose Gatchalian dated
December 29, 1934 is attached and marked Exhibit F and made part thereof;
8. That the defendant in his letter dated January 28, 1935, a copy of which marked Exhibit G is
enclosed, denied plaintiffs' request of January 20, 1935, for exemption from the payment of tax
and reiterated his demand for the payment of the sum of P1,499.94 as income tax and gave
plaintiffs until February 10, 1935 within which to pay the said tax;
9. That in view of the failure of the plaintiffs to pay the amount of tax demanded by the
defendant, notwithstanding subsequent demand made by defendant upon the plaintiffs through
their attorney on March 23, 1935, a copy of which marked Exhibit H is enclosed, defendant on
May 13, 1935 issued a warrant of distraint and levy against the property of the plaintiffs, a copy
of which warrant marked Exhibit I is enclosed and made a part hereof;
10. That to avoid embarrassment arising from the embargo of the property of the plaintiffs, the
said plaintiffs on June 15, 1935, through Gregoria Cristobal, Maria C. Legaspi and Jesus
Legaspi, paid under protest the sum of P601.51 as part of the tax and penalties to the municipal
treasurer of Pulilan, Bulacan, as evidenced by official receipt No. 7454879 which is attached
and marked Exhibit J and made a part hereof, and requested defendant that plaintiffs be allowed
to pay under protest the balance of the tax and penalties by monthly installments;
11. That plaintiff's request to pay the balance of the tax and penalties was granted by defendant
subject to the condition that plaintiffs file the usual bond secured by two solvent persons to
guarantee prompt payment of each installments as it becomes due;
12. That on July 16, 1935, plaintiff filed a bond, a copy of which marked Exhibit K is enclosed
and made a part hereof, to guarantee the payment of the balance of the alleged tax liability by
monthly installments at the rate of P118.70 a month, the first payment under protest to be
effected on or before July 31, 1935;
13. That on July 16, 1935 the said plaintiffs formally protested against the payment of the sum
of P602.51, a copy of which protest is attached and marked Exhibit L, but that defendant in his
letter dated August 1, 1935 overruled the protest and denied the request for refund of the
plaintiffs;
14. That, in view of the failure of the plaintiffs to pay the monthly installments in accordance
with the terms and conditions of bond filed by them, the defendant in his letter dated July 23,
1935, copy of which is attached and marked Exhibit M, ordered the municipal treasurer of
Pulilan, Bulacan to execute within five days the warrant of distraint and levy issued against the
plaintiffs on May 13, 1935;
15. That in order to avoid annoyance and embarrassment arising from the levy of their property,
the plaintiffs on August 28, 1936, through Jose Gatchalian, Guillermo Tapia, Maria Santiago
and Emiliano Santiago, paid under protest to the municipal treasurer of Pulilan, Bulacan the
sum of P1,260.93 representing the unpaid balance of the income tax and penalties demanded by
defendant as evidenced by income tax receipt No. 35811 which is attached and marked Exhibit
N and made a part hereof; and that on September 3, 1936, the plaintiffs formally protested to the
defendant against the payment of said amount and requested the refund thereof, copy of which
is attached and marked Exhibit O and made part hereof; but that on September 4, 1936, the
defendant overruled the protest and denied the refund thereof; copy of which is attached and
marked Exhibit P and made a part hereof; and
16. That plaintiffs demanded upon defendant the refund of the total sum of one thousand eight
hundred and sixty three pesos and forty-four centavos (P1,863.44) paid under protest by them
but that defendant refused and still refuses to refund the said amount notwithstanding the
plaintiffs' demands.
17. The parties hereto reserve the right to present other and additional evidence if necessary.
Exhibit E referred to in the stipulation is of the following tenor:
To whom it may concern:
I, Jose Gatchalian, a resident of Pulilan, Bulacan, married, of age, hereby certify, that on the
11th day of August, 1934, I sold parts of my shares on ticket No. 178637 to the persons and for
the amount indicated below and the part of may share remaining is also shown to wit:
Purchaser Amount Address
1. Mariano Santos ........................................... P0.14 Pulilan, Bulacan.
2. Buenaventura Guzman ............................... .13 - Do -
3. Maria Santiago ............................................ .17 - Do -
4. Gonzalo Javier .............................................. .14 - Do -
5. Francisco Cabral .......................................... .13 - Do -
6. Maria C. Legaspi .......................................... .16 - Do -
7. Emiliana Santiago ......................................... .13 - Do -
8. Julio Gatchalian ............................................ .13 - Do -
9. Jose Silva ...................................................... .07 - Do -
10. Tomasa Mercado ....................................... .08 - Do -
11. Jesus Legaspi ............................................. .15 - Do -
12. Guillermo Tapia ........................................... .13 - Do -
13. Saturnina Silva ............................................ .08 - Do -
14. Gregoria Cristobal ....................................... .18 - Do -
15. Jose Gatchalian ............................................ .18 - Do -
2.00 Total cost of said

ticket; and that, therefore, the persons named above are entitled to the parts of whatever prize
that might be won by said ticket.
Pulilan, Bulacan, P.I.
(Sgd.) JOSE GATCHALIAN
And a summary of Exhibits D-1 to D-15 is inserted in the bill of exceptions as follows:
RECAPITULATIONS OF 15 INDIVIDUAL INCOME TAX RETURNS FOR 1934 ALL
DATED JANUARY 19, 1935 SUBMITTED TO THE COLLECTOR OF INTERNAL
REVENUE.
Name Exhibit Purchase Price Expenses Net
No. Price Won prize
1. Jose
D-1 P0.18 P4,425 P 480 3,945
Gatchalian ..........................................
2. Gregoria
D-2 .18 4,575 2,000 2,575
Cristobal ......................................
3. Saturnina
D-3 .08 1,875 360 1,515
Silva .............................................
4. Guillermo
D-4 .13 3,325 360 2,965
Tapia ..........................................
5. Jesus Legaspi by Maria Cristobal ......... D-5 .15 3,825 720 3,105
6. Jose
D-6 .08 1,875 360 1,515
Silva ....................................................
7. Tomasa
D-7 .07 1,875 360 1,515
Mercado .......................................
8. Julio Gatchalian by Beatriz
D-8 .13 3,150 240 2,910
Guzman .......
9. Emiliana
D-9 .13 3,325 360 2,965
Santiago ......................................
10. Maria C.
D-10 .16 4,100 960 3,140
Legaspi ......................................
11. Francisco
D-11 .13 3,325 360 2,965
Cabral ......................................
12. Gonzalo
D-12 .14 3,325 360 2,965
Javier ..........................................
13. Maria
D-13 .17 4,350 360 3,990
Santiago ..........................................
14. Buenaventura
D-14 .13 3,325 360 2,965
Guzman ...........................
15. Mariano
D-15 .14 3,325 360 2,965
Santos ........................................
2.00 50,000
The legal questions raised in plaintiffs-appellants' five assigned errors may properly be reduced to the
two following: (1) Whether the plaintiffs formed a partnership, or merely a community of property
without a personality of its own; in the first case it is admitted that the partnership thus formed is liable
for the payment of income tax, whereas if there was merely a community of property, they are exempt
from such payment; and (2) whether they should pay the tax collectively or whether the latter should be
prorated among them and paid individually.
The Collector of Internal Revenue collected the tax under section 10 of Act No. 2833, as last amended
by section 2 of Act No. 3761, reading as follows:
SEC. 10. (a) There shall be levied, assessed, collected, and paid annually upon the total net
income received in the preceding calendar year from all sources by every corporation, joint-
stock company, partnership, joint account (cuenta en participacion), association or insurance
company, organized in the Philippine Islands, no matter how created or organized, but not
including duly registered general copartnership (compañias colectivas), a tax of three per
centum upon such income; and a like tax shall be levied, assessed, collected, and paid annually
upon the total net income received in the preceding calendar year from all sources within the
Philippine Islands by every corporation, joint-stock company, partnership, joint account (cuenta
en participacion), association, or insurance company organized, authorized, or existing under
the laws of any foreign country, including interest on bonds, notes, or other interest-bearing
obligations of residents, corporate or otherwise: Provided, however, That nothing in this section
shall be construed as permitting the taxation of the income derived from dividends or net profits
on which the normal tax has been paid.
The gain derived or loss sustained from the sale or other disposition by a corporation, joint-
stock company, partnership, joint account (cuenta en participacion), association, or insurance
company, or property, real, personal, or mixed, shall be ascertained in accordance with
subsections (c) and (d) of section two of Act Numbered Two thousand eight hundred and thirty-
three, as amended by Act Numbered Twenty-nine hundred and twenty-six.
The foregoing tax rate shall apply to the net income received by every taxable corporation,
joint-stock company, partnership, joint account (cuenta en participacion), association, or
insurance company in the calendar year nineteen hundred and twenty and in each year
thereafter.
There is no doubt that if the plaintiffs merely formed a community of property the latter is exempt from
the payment of income tax under the law. But according to the stipulation facts the plaintiffs organized
a partnership of a civil nature because each of them put up money to buy a sweepstakes ticket for the
sole purpose of dividing equally the prize which they may win, as they did in fact in the amount of
P50,000 (article 1665, Civil Code). The partnership was not only formed, but upon the organization
thereof and the winning of the prize, Jose Gatchalian personally appeared in the office of the
Philippines Charity Sweepstakes, in his capacity as co-partner, as such collection the prize, the office
issued the check for P50,000 in favor of Jose Gatchalian and company, and the said partner, in the same
capacity, collected the said check. All these circumstances repel the idea that the plaintiffs organized
and formed a community of property only.
Having organized and constituted a partnership of a civil nature, the said entity is the one bound to pay
the income tax which the defendant collected under the aforesaid section 10 (a) of Act No. 2833, as
amended by section 2 of Act No. 3761. There is no merit in plaintiff's contention that the tax should be
prorated among them and paid individually, resulting in their exemption from the tax.
In view of the foregoing, the appealed decision is affirmed, with the costs of this instance to the
plaintiffs appellants. So ordered.
Avanceña, C.J., Villa-Real, Diaz, Laurel, Concepcion and Moran, JJ., concur.

SUPREME COURT
Manila
EN BANC
G.R. No. L-27933 December 24, 1968
DIVERSIFIED CREDIT CORPORATION, plaintiff-appellee,
vs.
FELIPE ROSADO and LUZ JAYME ROSADO, defendants-appellants.
Montalvo and Bernabe for plaintiff-appellee.
Pedro D. Delfin for defendants-appellants.
REYES, J.B.L.:
This appeal from a decision of the Court of First Instance of Bacolod City, Negros Occidental (Civ.
Case No. 7516 of that Court) was certified to us by the Court of Appeals (Second Division) because the
same involves no questions of fact.
The case had its origin in the Municipal Court of Bacolod City, when the Diversified Credit
Corporation filed an action to compel the spouses Felipe Rosado and Luz Jayme Rosado to vacate and
restore possession of a parcel of land in the City of Bacolod (Lot 62-B of Subdivision plan LRC-Psd-
33823) that forms part of Lot No. 62 of the Bacolod Cadastre, and is covered by Transfer Certificate of
Title No. 27083 in the name of plaintiff. After answer, claiming that the lot was defendants' conjugal
property, the Municipal Court ordered defendants to surrender and vacate the land in litigation; to pay
P100.00 a month from the filing of the complaint up to the actual vacating of the premises; to pay
P500.00 attorneys' fees and costs. Upon appeal to the Court of First Instance, the case was submitted on
the following stipulation of facts (Rec. on App., pp. 59-60):
1. That Lot No. 62-B of Bacolod Cadastre belong to the thirteen co-owners, including the wife
of the defendant herein, who owns 1/13th part pro-indiviso;
2. That on May 11, 1964, Luz Jayme Rosado, wife of the defendant Felipe Rosado, signed a
Deed of Sale together with the co-owners of the property to the plaintiff as shown by Exh. "A"
for the plaintiff;
3. That on the lot in question the defendant Felipe Rosado had built a house sometime in 1957
without the whole property having been previously partitioned among the thirteen (13) co-
owners;
4. That the title of the property has already been transferred to the plaintiff upon registration of
the Deed of Sale in June, 1964, with the Office of the Register of Deeds;
5. That demand was made by the plaintiff upon the defendant Felipe Rosado and his wife Luz
Jayme Rosado on October 19, 1964, but until now the defendant Felipe Rosado has refused to
vacate the premises or to remove his house thereon as shown by Exh. "B" for the plaintiff, on
the grounds as he alleged in his answer that he had built on the lot in question a conjugal house
worth P8,000.00 which necessarily makes the lot on which it stands subject to Article 158 of the
Civil Code and on the point of view of equity that the wife of the defendant Felipe Rosado
received an aliquot share of P2,400.00 only from the share and if the house were demolished the
defendant would suffer damage in the amount of P8,000.00;
6. That the portion of the lot on which the house stands, would earn a monthly rental of P50.00;
7. That Felipe Rosado, husband of Luz Jayme, did not give his conformity to the Deed of Sale,
Exh. "A".
8. That on October 31, 1964, the defendant Felipe Rosado requested the plaintiff in the letter,
Exh. "C" for the plaintiff, for a period of six (6) months within which to vacate the premises.
9. That the letter was not answered by the plaintiff and they did not accept the offer, and on
November 25, 1964, they filed a complaint before the Municipal Court which proves that
plaintiff neglected the offer;
The Court of First Instance in its decision rejected the claim of ownership advanced by Rosado, based
upon the construction of a house on the disputed lot by the conjugal partnership of the Rosado spouses,
which allegedly converted the land into conjugal property under Article 158, paragraph 2 of the present
Civil Code of the Philippines; further held that defendants were in estoppel to claim title in view of the
letter Exhibit C requesting for six (6) months within which to vacate the premises, and affirmed the
decision of the Inferior Court. Defendant Felipe Rosado resorted to the Court of Appeals, and his
appeal (CA-G.R. No. 37398-R) is the one now before us. He assigns four alleged errors:
(a) The lower court erred in not holding that Exhibit "A" is null and void, since upon the
construction of the conjugal dwelling thereon, the conjugal partnership of the defendant-
appellant Felipe Rosado and Luz Jayme became the owner of the share of Luz Jayme in Lot No.
62-B, Bacolod Cadastre;
(b) The trial court erred in ordering the defendant-appellant to vacate Lot No. 62-B and in not
holding that Exhibit "A" is null and void because as the legal usufructuary of the share of Luz
Jayme Rosado in Lot 62-B, Bacolod Cadastre, the conjugal partnership, managed and
administered by the defendant-appellant Felipe Rosado can not be deprived of its usufructuary
rights by any contract between Luz Jayme and the plaintiff-appellee;
(c) The trial court erred in not holding that the defendant-appellant should be reimbursed the
value of the conjugal house constructed on Lot 62-B; and
(d) The lower court erred in ordering the defendant-appellant to pay attorneys' fees in the
amount of five hundred (P500.00) pesos.
It can be seen that the key question is whether by the construction of a house on the lot owned in
common by the Jaymes, and sold by them to the appellant corporation, the land in question or a 1/13th
part of it became conjugal property.
Appellant, husband of vendor Luz Jayme, claims the affirmative invoking the second paragraph of
Article 158 of the Civil Code of the Philippines, prescribing that:
ART. 158. Improvements, whether for utility or adornment, made on the separate property of
the spouses through advancements from the partnership or through the industry of either the
husband or the wife, belong to the conjugal partnership.
Buildings constructed, at the expense of the partnership, during the marriage on land belonging
to one of the spouses, also pertain to the partnership, but the value of the land shall be
reimbursed to the spouse who owns the same.
Rosado further contends that as the building of the house at the expense of the conjugal partnership
converted the 1/13 undivided share on his wife in Lot 62-B into property of the community, the deed of
sale of May 11, 1964 in favor of the appellee corporation was void in so far as said 1/13 share is
concerned, because his wife, Luz Jayme, had ceased to own such share from and after the building of
the house; and Rosado, as manager of the conjugal partnership, had not participated in the sale, nor
subsequently ratified the same.
We find appellant's thesis legally untenable. For it is a basic principle in the law of co-ownership, both
under the present Civil Code as in the Code of 1889, that no individual co-owner can claim title to any
definite portion of the land or thing owned in common until the partition thereof. Prior to that time, all
that the co-owner has is an ideal, or abstract, quota or proportionate share in the entire thing owned in
common by all the co-owners. The principle is emphasized by the rulings of this Court. In Lopez vs.
Ilustre, 5 Phil. 567, it was held that while a co-owner has the right to freely sell and dispose of his
undivided interest, he has no right to sell a divided part of the real estate owned in common. "If he is
the owner of an undivided half of a tract of land, he has the right to sell and convey an undivided half,
but he has no right to divide the lot into two parts, and convey the whole of one part by metes and
bounds." The doctrine was reiterated in Mercado vs. Liwanag, L-14429, June 20, 1962, holding that a
co-owner may not convey a physical portion of the land owned in common. And in Santos vs.
Buenconsejo, L-20136, June 23, 1965, it was ruled that a co-owner may not even adjudicate to himself
any determinate portion of land owned in common.
Since the share of the wife, Luz Jayme, was at no time physically determined, it cannot be validly
claimed that the house constructed by her husband was built on land belonging to her, and Article 158
of the Civil Code can not apply. Certainly, on her 1/13 ideal or abstract undivided share, no house could
be erected. Necessarily, the claim of conversion of the wife's share from paraphernal to conjugal in
character as a result of the construction must be rejected for lack of factual or legal basis.
It is the logical consequence of the foregoing ruling that the lower court did not err in holding that the
appellant was bound to vacate the land without reimbursement, since he knew that the land occupied by
the house did not belong exclusively to his wife, but to the other owners as well, and there is no proof
on record that the house occupied only 1/13 of the total area. The construction was not done in good
faith.
WHEREFORE, the judgment of the Court of First Instance is affirmed. Costs against appellant Felipe
Rosado.
Concepcion, C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Fernando and Capistrano, JJ., concur.
SUPREME COURT
Manila
EN BANC
G.R. No. L-18009 January 10, 1923
EMILIO PUNSALAN, ET AL., plaintiffs-appellants,
vs.
C. BOOT LIAT, ET AL., defendants-appellants.
Yeager and Armstrong, C. A. Sobral and Lorenzo and Mañalac for plaintiffs-appellants.
Kincaid, Perkins and Kincaid and P. J. Moore for defendants-appellants.
AVANCEÑA, J.:
On or about the 13th of July, 1920, a Moro by the name of Tamsi saw from the Cawit-Cawit shores in
the Province of Zamboanga, a big bulky object in the distance which attracted his attention. Thereupon,
together with another Moro named Bayrula, he went in a small boat to investigation and found it to be a
large fish. They then returned to shore, where they met other Moros and requested their help to catch
the fish. They went in three small boats, there being then in one, seven in the other, and five in the
third, twenty-two men, in all, twenty-one of whom are plaintiffs herein, and the remaining one named
Ahamad is defendant. After having arrived at the place where the fish was, which was found to be a
whale, they proceeded to pull it toward the shore up to the mouth of the river, where they quartered it,
having found in its abdomen a great quantity of ambergris, which was placed in three sacks, two of
which were full and the other half full, and taken to the house of Maharaja Butu, where they left it to
the care of Ahamad. Then the contents of the two full sacks were placed in three trunks. All of these
twenty-two persons made an agreement that they were to be the sole owners of this ambergris and that
none of them could sell it without the consent of the rest. As to the half sack of amber they agreed that
some of them should take it to Zamboanga to sell for the purpose of ascertaining the market price of the
ambergris, in order that they might dispose of the rest accordingly. Some of them, with Tamsi in charge,
went to Zamboanga to sell the half sack of amber where they did dispose of it to a Chinaman, Cheong
Tong, for the sum of P2,700, which amount was distributed among all the parties in interest. Then they
offered to sell for the sum of P12,000 to the Chinamen, Cheong Tong and Lim Chiat, the rest of the
amber contained in the two sacks which had been left in the house of Maharaja Butu, for safekeeping,
and a document (Exhibit A) to this effect was executed by Lim Chiat and Cheong Tong, on the one
hand, and Tamsi, Imam Lumuyod, and Imam Asakil, on the other. Thereupon they went to Cawit-Cawit
on board the launch Ching-kang to get the amber so sold.
It appears that there were other people in Zamboanga who knew of the existence of this ambergris in
the house of Maharaja Butu. While the above related events were taking place, Mr. Henry E. Teck, who
was one of those having knowledge of the existence of this amber in Cawit-Cawit and of the fact that
the launch Ching-kang had left for Cawit-Cawit, proposed to the master of the revenue cutter Mindoro
to go to Cawit-Cawit to seize some supposedly contraband opium. After transmitting this information
to the Collector of Customs, he, the master of the Mindoro, immediately proceeded to Cawit-Cawit.
There were on board the vessel Mr. Teck, some Chinamen, among whom were C. Boon Liat, Ong
Chua, and Go Tong, and some Moros who, according to Mr. Teck, were to assist in the arrest of the
smugglers. Upon the arrival of the Mindoro at Cawit-Cawit, the master, accompanied by Mr. Teck and
some Moros, went to the house of Maharaja Butu. As is to be presumed, this information about the
supposed contraband opium was but a trick to have the Mindoro at their disposal. The master
proceeded to search the house, stating that he had information to the effect that there was contraband
opium and as a result of the search, he found three large trunks containing a black substance which had
a bad odor. He then asked the owner of the house to whom those three trunks belonged, and the latter
pointed to Ahamad who was present and who stated that the contents came from the abdomen of a large
fish. The master, however, said that it was opium and told Ahamad that he would take the three trunks
on board the ship. Then Ahamad and other Moros asked permission of the master to accompany him on
the voyage to Zamboanga, to which the master consented. When already on board and during the
voyage the master became convinced that the contents of the three trunks were not opium.
During the voyage, Mr. Teck offered to purchase the amber contained in the three trunks, but Ahamad
refused to sell it for the reason that he was not the sole owner thereof, but owned it in common with
other persons who were in Zamboanga. However Mr. Teck, aided by his companions who wielded
some influence in Zamboanga, insisted that Ahamad should sell them the amber, telling him not to be
afraid of his companions, as he would answer for whatever might happen. With this promise of
protection, Ahamad decided to sell the amber for P7,500 and received P2,500 as part payment on
account of this price, a bill of sale having been signed by Ahamad, Maharaja Butu and three Moros
more. The balance of this price was paid later.
When Cheong Tong, Lim Chiat, and the Moros who had gone to Cawit-Cawit on board the launch
Ching-kang arrived at the house of Maharaja Butu, they found that the amber they had purchased from
Tamsi and his companions was no longer there.
The plaintiffs are twenty-one of the twenty-two Moros who had caught the whale, and Lim Chiat and
Cheong Tong, who had purchased from Tamsi and his companions the amber contained in the three
trunks deposited in the house of Maharaja Butu for safekeeping. They claim the 80-½ kilos of
ambergris contained in three trunks, or its value in the amount o P60,000, and damages in the sum of
P20,000. This action is brought against C. Boon Liat, Ong Chua, Go Tong, Henry E. Teck, and the
Moro, Ahamad, the first four being the persons who purchased this same amber from the one last
named while on board the revenue cutter Mindoro.
It appears from the foregoing that the amber in question was the undivided common property of the
plaintiffs (with the exception of Lim Chiat and Cheong Tong) and the defendant Ahamad. This
common ownership was acquired by occupancy (arts. 609 and 610 of the Civil Code), so that neither
Tamsi, Imam Lumuyod, or Imam Asakil had any right to sell it, as they did, to Lim Chiat and Cheong
Tong, nor had the Moro Ahamad any right to sell this same amber, as he did, to C. Boon Liat, Ong
Chua, Go Tong, and Henry E. Teck. There was an agreement between the coowners not to sell this
amber without the consent of all. Both sales having been made without the consent of all the owners,
the same have no effect, except as to the portion pertaining to those who made them (art. 399, Civil
Code).
Although the original complaint filed in this case was entitled as one for replevin, in reality, from its
allegations, the action herein brought is the ordinary one for the recovery of the title to, and possession
of, this amber. It is no bar to the bringing of this action that the defendant Ahamad is one of the
coowners. The action for recovery which each coowner has, derived from the right of ownership
inherent in the coownership, may be exercised not only against strangers but against the coowners
themselves, when the latter perform, with respect to the thing held in common, acts for their exclusive
benefit, or of exclusive ownership, or which are prejudicial to, and in violation of, the right of the
community. (Decision of the supreme court of Spain of June 22, 1892.) In this case the selling of the
amber by the defendant Ahamad as his exclusive property and his attitude in representing himself to be
the sole owner thereof place him in the same position as the stranger who violates any right of the
community. He is not sued in this case as a coowner, for the cause of action is predicated upon the fact
that he has acted not as a coowner, but as an exclusive owner of the amber sold by him.
As to the sale made by Ahamad, it is urged that the purchaser acted in good faith. It is contended that
the latter did not know that the amber belonged to some others besides Ahamad. But the evidence
shows otherwise. Henry E. Teck himself admitted that on the occasion of the sale of the amber he really
had promised Ahamad to protect him, and although he said that the promise made by him had reference
to the contingency of the amber proving to be opium, as the master of the revenue cutter Mindoro
believed, this is incredible, because he could not make Ahamad such a promise, nor could such a
promise, if made, have any influence on the mind of Ahamad, inasmuch as the latter knew that the
amber was not opium. If, as Henry E. Teck admits, he made Ahamad this promise of protection, it
should have been only on account of Ahamad's refusal to sell the amber due to the fact that he was not
the sole owner thereof.
With regard to the action of the trial court in not admitting Exhibits 1 and 2 offered by the defendants,
we believed that it was no error. These documents are affidavits signed by Paslangan, and the best
evidence of their contents was the testimony of Paslangan himself whom the plaintiffs had the right to
cross-examine. Moreover, they are substantially the same as the statements made by Paslangan at the
trial when testifying as witness for the defendants, and for this reason the ruling of the trial court
excluding these documents would not, at all events, affect the merits of the case.
In the complaint it is alleged that the value of the amber is P60,000. Upon the evidence adduced on this
point, and taking into account that the defendant, Henry E. Teck, himself, testifying as witness, has
stated that this amber was worth P1,200 per kilo, we accept this estimated value set forth in the
complaint.
The decision of the court below contains the following order for judgment:
Wherefore, it is the judgment and order of the court that the defendants C. Boon Liat, Henry E.
Teck, Ahamad Ong Chua, and Go Tong deliver to the plaintiffs, Emilio Punsalan, Bayrula,
Daring Gumuntol, Mohamad, Insael, Dunkaland, Tahil, Dambul, Dagan, Sabay, Sahibul,
Pingay, Mujahad, Amilol, Baraula, Saraban, Lim Chiat, and Cheong Tong twenty-twenty-first
(20/21) of the amber in question, or, in default thereof, to pay them its value of twelve thousand
pesos (P12,000), less one-twenty-first of said amount.
Therefore, the judgment appealed from is affirmed, with the only modification that the value of the
amber which is the subject-matter of this action shall be P60,000, without special finding as to the costs
of this instance. So ordered.
Araullo, C. J., Malcolm, Villamor, Ostrand, Johns, and Romualdez, JJ., concur.
Street, J., reserves his vote.
SUPREME COURT
Manila
EN BANC
G.R. No. L-40064 December 4, 1934
RESURRECCION TAGARAO, BUENAVENTURA TAGARAO and SERAFIN TAGARAO,
plaintiffs-appellees,
vs.
MARCOS GARCIA, ET AL., defendants.
MARGARITA GARCIA, ROSARIO GARCIA, DOLORES RUFINO, and ELUETERIO
RUFINO, appellants.
Oceeño and Alba for appellants M. Garcia, R. Garcia and D. Rufino.
Vicente T. Remitio for appellant E. Rufino.
Rafael P. Guerrero for appellees.
DIAZ, J.:
This action was brought by the brothers and sisters Resurreccion Tagarao, Buenaventura Tagarao, and
Serafin Tagarao, children of the deceased Merced Garcia, daughter of the deceased Buenaventura
Garcia who was a brother of the defendant Marcos Garcia, against the latter and the other defendants
named Paula Tabifranca, Margarita Garcia, Rosario Garcia, Dolores Rufino and Eleuterio Rufino,
praying that judgment be rendered against the defendants ordering them to deliver to the plaintiffs, after
executing the necessary deeds of transfer, one-fourth of the land known as lot No. 510 of cadastral case
No. 11 of the municipality of Isabela, Occidental Negros (G. L. R. O. Cad. Record No. 100), which was
formerly covered, first by original certificate of title No. 10009 (Exhibit M), later by transfer certificate
of title No. 3001 (Exhibit 3), and at present by transfer certificate of title No. 8782 (Exhibit 7), all of
the office of the register of deeds of said Province of Occidental Negros.
In their amended complaint of July 29, 1931, which was reamended on March 8, 1932, said plaintiffs
prayed that should the defendants fail to deliver to them the required portion of the land in question, the
latter be ordered to pay them the value thereof based on the assessed value of the whole property, and
that they furthermore be indemnified for the value of 1,407 cavans of palay at the rate of P4 a cavan,
alleging that said 1,407 cavans represented their share in the products of said land from the time the
defendants took exclusive possession thereof.
Before the plaintiffs filed their amended complaint on the date above stated, the defendants Marcos
Garcia, Paula Tabifranca, Margarita Garcia, Rosario Garcia and Dolores Rufino filed a demurrer to said
plaintiffs' original complaint, alleging that it did not state sufficient facts to constitute a cause of action
and was furthermore ambiguous, unintelligible and uncertain. The lower court sustained said demurrer
and ordered the plaintiffs to amend their complaint within the reglementary period.
When the plaintiffs amended their complaint in the sense expressed in their pleading of February 13,
1929, said five defendants again filed another demurrer alleging this time that the lower court lack
jurisdiction to try the case by reason of the subject matter involved and the lower court overruled said
demurrer ordering them to answer within the reglementary period. In compliance therewith, the
defendants on October 28, 1929, filed their answer wherein the first two defendants, or the spouses
Marcos Garcia and Paula Tabifranca, alleged that although they formerly were the absolute and
exclusive owners of the land in question they already ceased to be so at that time, having sold the half
belonging to Paula Tabifranca to the defendants Margarita Garcia, Rosario Garcia and Dolores Rufino,
and the other half belonging to Marcos Garcia to Eleuterio Rufino. On June 9, 1931, said two
defendants filed a petition of even date stating that they had no more interest in the case, having sold
their respective participations to the two Garcias and two Rufinos and praying in succession that they
be absolved from the complaint.
A few days later, or on July 15, 1931, said two defendants Marcos Garcia and Paula Tabifranca filed a
motion to include Eleuterio Rufino among the defendants and on the following day the lower court,
granting the motion, ordered the inclusion of Eleuterio Rufino in the case as one of the defendants. For
this purpose the plaintiffs filed their said amended complaint of July 29, 1931, which they reamended
with a slight addition on March 8, 1932.
The defendants Marcos Garcia and Paula Tabifranca did not answer the plaintiffs' last amended
complaint but Margarita Garcia, Rosario Garcia and Dolores Rufino jointly entered a general denial of
all the allegations contained therein, alleging as a special defense (1) that they are the exclusive owners
of one-half of the land in question; (2) that the plaintiffs have already lost their right of action because
such right, if they ever had any, has already prescribed; and (3) said plaintiffs cannot invoke the
decision rendered in civil case No. 4091 because with respect to them it does not constitute res
judicata.
The defendant Eleuterio Rufino, answering said plaintiffs' last amended complaint, stated in his
pleading of November 19, 1931, that he denied each and every allegation contained therein, alleging as
a special defense that one half of the land in question was sold by Marcos Garcia and purchased by him
in good faith, paying the corresponding price therefor.
After due trial the lower court rendered judgment ordering the defendants to deliver to the plaintiffs one
fourth of the land in question after executing the necessary deeds of transfer in favor of said plaintiffs
or, in lieu thereof, to indemnify them in the sum of P3,882 plus the value of 1,000 cavans of palay at P3
a cavan, with costs. In said judgment said court "declared the deeds of sale executed by Marcos Garcia
in favor of the defendant Eleuterio Rufino and by Paula Tabifranca in favor of the defendants Margarita
Garcia, Rosario Garcia and Dolores Rufino, null and void." The defendants Margarita Garcia, Rosario
Garcia, Dolores Rufino and Elueterio Rufino appealed but Marcos Garcia and Paula Tabifranca did
not.1awphi1.net
In support of their appeal, the defendants Margarita Garcia, Rosario Garcia, and Dolores Rufino
contend that the lower court committed the eight alleged errors assigned in their brief as follows:
1. The lower court erred in not sustaining the demurrer of the defendants-appellants Margarita
Garcia, Rosario Garcia and Dolores Rufino to the second amended complaint of the plaintiffs.
2. The lower court erred in admitting, under objections of the defendants-appellants, oral and
documentary evidence tending to attack original certificate of title No. 10009 in the name of the
spouses Marcos Garcia and Paula Tabifranca issued on May 17, 1918.
3. The lower court erred in holding that the deed of sale made and executed by Paula Tabifranca
with respect to her undivided one-half (½) share of lot No. 510 of the cadastral survey of Isabela
in favor of Margarita Garcia, Rosario Garcia and Dolores Rufino, was made without
consideration and declaring same null and void being fictitious.
4. The lower court erred in holding that the transaction made by Paula Tabifranca in favor of
Margarita Garcia, Rosario Garcia and Dolores Rufino had no other purpose than to deprive the
plaintiffs of their shares in lot No. 510, as legitimate heirs of Ventura Garcia and Merced Garcia.
5. The lower court erred in condemning the defendants-appellants Margarita Garcia, Rosario
Garcia and Dolores Rufino, jointly and severally with the other defendants to return to the
plaintiffs one-fourth (¼) of lot No. 510 of the cadastral survey of Isabela, or in its place, to
indemnify the plaintiffs the sum of P3,882, value of said portion.
6. The lower court erred in condemning the defendants-appellants Margarita Garcia, Rosario
Garcia and Dolores Rufino, jointly and severally with the other defendants, to pay the plaintiffs
one thousand cavanes of palay or its value at P3 per cavan.
7. The lower court erred in holding that the right of the plaintiffs to present this action to recover
a portion of lot No. 510 of the cadastral survey of Isabela has not prescribed.lawphil.net
8. The lower court erred in denying the petition for a new trial of the defendants-appellants
Margarita Garcia, Rosario Garcia and Dolores Rufino.
The appellant Eleuterio Rufino also contends that said court in rendering its judgment in question
committed the four alleged errors relied upon in his brief, which read as follows:
1. The lower court erred in admitting over the defendant's objection oral as well as documentary
evidence of the plaintiffs tending to attack the stability of original certificate of title No. 10009
(Exhibit 5) in the name of the defendants Marcos Garcia and Paula Tabifranca, relative to
alleged facts that took place prior to the issuance of said title.
2. The lower court erred in ordering the defendant Eleuterio Rufino, jointly with his
codefendants, to deliver to the plaintiffs one-fourth (¼) of said lot No. 510, or in lieu thereof to
indemnify them in the sum of P3,882 representing the value of said portion.
3. The lower court erred in holding in its judgment that the deed (Exhibit 8) is fictitious and
fraudulent and declaring it null and void.
4. The lower court erred in not absolving the defendant and appellant Eleuterio Rufino from the
complaint and in denying his motion for a new trial.
Without losing sight of the purpose of the complaint of the plaintiffs and appellees as expressed in the
prayer of their pleadings or last amended complaints, it is clear that the first assignment of alleged error
attributed to the lower court by the appellants is unfounded on the ground that its purpose is not to
attack the validity of the decree by virtue of which original certificate of title No. 10009 was issued in
favor of Marcos Garcia and Paula Tabifranca, or that under which transfer certificates of title Nos. 3001
and 8782, were issued later, but to compel the defendants to give them one-fourth of the land described
in said certificates and to pay them the indemnity referred to therein.
The facts which have been clearly established at the trial, according to the record and the evidence
before us, may be briefly stated as follows:
The land in question has an area of 31 hectares, 3 ares and 65 centares. It was originally purchased with
pacto de retro by the defendant Marcos Garcia and his brother Ventura Garcia from Vidal Saravia on
July 20, 1900. As the latter failed to exercise his right of repurchase the two brothers became the
absolute owners of said land and it was so held by the Court of First Instance of Occidental Negros in
case No. 274 which was instituted by Pedro Saravia, as administrator of the intestate estate of Vidal
Saravia, against said two brothers to compel the latter to resell it to him (Exhibit L). When the two
brothers purchased said land, the defendant Marcos Garcia was yet single because he had not even been
married to his former wife, as the defendant Paula Tabifranca is only his wife by a second marriage.
Marcos Garcia had by his first wife three children who are the defendants Margarita Garcia, Rosario
Garcia and the deceased Catalina Garcia, mother of the defendant Dolores Rufino. Ventura Garcia, now
deceased, also had two children: Merced Garcia who was married to Rafael Ragarao, and Claro Garcia.
While Merced Garcia was still living, or at least until June, 1914, the defendant Marcos Garcia had
been delivering to her and her brother Claro Garcia their share of the products harvested from the land
in question. Merced Garcia who, as stated, died about the year 1914 and was followed years later by
her husband Rafael Tagarao, had three children, the herein plaintiffs Resurreccion Tagarao, Serafin
Tagarao and Buenaventura Tagarao. When this action was brought on October 14, 1928, Resurreccion
Tagarao was more than 24 years of age; Serafin was then only 23 years, 1 month and 1 day, and
Buenaventura, 18 years, 4 months and 3 days.
With the plaintiffs' grandfather, Ventura Garcia, and their mother, Merced Garcia, already dead, the
defendant Marcos Garcia claimed the lands in question in cadastral case No. 11 of the municipality of
Isabela of the Province of Occidental Negros (G. L. R. O. Cadastral Record No. 100), known in said
case as lot No. 510, alleging in the pleading presented by him to that effect (Exhibit I) that he had
acquired it on July 20, 1904, when he was yet unmarried to his codefendant Paula Tabifranca. Before
the original certificate of title acknowledging him to be the owner of the land in question was issued to
him, and during the period within which any person could ask for the revision of the decree issued to
that effect, Marcos Garcia, fearing that Claro Garcia, brother of the plaintiffs' mother, might frustrate
his designs by asking for said revision, executed in favor of Claro Garcia a document binding himself
to give to the latter four hectares of said land upon the issuance to him of the corresponding certificate
of title. In view thereof, Claro did not ask for the revision of the decree but he later brought an action,
case No. 4091 of the Court of First Instance of Occidental Negros, against Marcos Garcia to recover
from him four hectares of said land, lot No. 510 of the cadastre of Isabela, basing his claim on the
document which Marcos Garcia executed in his favor in order to promise and bind himself to give
Claro said four hectares, because after Marcos Garcia had obtained his certificate of title he refused to
comply with his promise; and as a result said court, on October 10, 1927, rendered judgment against
Marcos Garcia ordering him to segregate four hectares of said land to be delivered to Claro Garcia and
furthermore to pay to the latter as indemnity 90 cavans of palay, or the value thereof in the sum of
P360.
In the certificate of title which was issued in favor of Marcos Garcia on May 17, 1918 (original
certificate of title No. 10009), by virtue of his claim presented in said cadastral case No. 11 of the
municipality of Isabela. Occidental Negros, it was stated, as in the decree ordering the issuance thereof,
that one-half of the land therein described belonged to him, and that the other half to his wife by a
second marriage, Paula Tabifranca.
A few years after the issuance of said certificate of title the defendant Paula Tabifranca, second wife of
the defendant Marcos Garcia, sold her rights to the defendants Margarita Garcia, Rosario Garcia and
Dolores Rufino, her husband's daughters and granddaughter, respectively, by his first marriage,
executing the deed Exhibit N dated December 31, 1921, while the alleged purchaser Dolores Rufino
was yet a minor. This was agreed upon between her and her husband Marcos Garcia to prevent the
land, part of which belonged to her under said certificate of title, from ever passing to her son by her
first marriage named Juan Tabigui, as she was already a widow when she contracted marriage with said
Marcos Garcia.
In the meantime the plaintiff Resurreccion Tagarao was informed that her uncle Claro Garcia had
succeeded in obtaining his share of the land in question and, desiring to protect her rights and those of
her brothers and coplaintiffs, she negotiated with Marcos Garcia so that he might give them their
corresponding share. Marcos Garcia at first entertained her with promises that he would see to it that
she got what she wanted but later, at her back, he sold his share of the land to the defendant Eleuterio
Rufino, brother of his son-in-law Lope Rufino, husband of the defendant Rosario Garcia, executing in
favor of Eleuterio Rufino the deed Exhibit 8 wherein it was made to appear that the price paid to him
for only one-half of the land, lot No. 510, was P6,567.
Twelve days after Paula Tabifranca had executed said deed of transfer Exhibit N in favor of her
stepdaughters Margarita Garcia and Rosario Garcia and of her husband Marcos Garcia's granddaughter
named Dolores Rufino, said three defendants together with Marcos Garcia obtained transfer certificate
of title No. 3001, after the cancellation of original certificate of title No. 10009, and two days after
Marcos Garcia had executed in favor of the defendant Eleuterio Rufino the deed of sale Exhibit 8
whereby he sold to the latter his half of the land described in the above stated certificate of title No.
10009 (Exhibit M), he and his daughters and granddaughter jointly with the defendant Eleuterio Rufino
succeeded in having said transfer certificate of title No. 3001 (Exhibit 3) cancelled to be substituted, as
it was in fact substituted, by transfer certificate of title No. 8782 (Exhibit 7).
The transfer made by Paula Tabifranca in favor of her stepdaughters Margarita and Rosario Garcia and
her husband's granddaughter Dolores Rufino, and that made by Marcos Garcia in favor of Eleuterio
Rufino, stated in said deeds Exhibits N and 8, are fictitious and feigned in view of the following
reasons inferable from the evidence of record:
Notwithstanding the fact that in the original certificate of title No. 10009 Paula Tabifranca's right to one
half of the property therein described has been acknowledged, she was conscious that she was not
entitled thereto because it belonged exclusively to her husband or, at least, he had acquired it long
before he married her. This explains the ease with which she parted with her alleged right for a sum
disproportionate to the true value of the land sold by her. The alleged purchasers Margarita Garcia,
Rosario Garcia and Dolores Rufino were not in a financial position to pay her the alleged purchase
price which, according to Exhibit N, amounted to P1,500; and Dolores Rufino, being then of tender
age, could not have taken part in said contract that she was represented by her father Lope Rufino,
because it does not appear that the latter was then the guardian of her property and it is a fact that
minors cannot give consent to any contract.
Neither was Eleuterio Rufino in a financial position to pay what he allegedly paid to the defendant
Marcos Garcia for the latter's share in the land in question on the ground that the amount of six
thousand five hundred sixty-seven pesos (P6,567) which is the price allegedly paid by him to Marcos
Garcia is a fortune greater than the income he could have had for several years, because his means of
livelihood, according to his own testimony, consisted simply of extracting tuba from about 200 coconut
trees leased from different persons and in retailing fresh fish bought by him for a lump sum in order to
obtain a small profit. He is a brother of the defendant Rosario Garcia's husband, and notwithstanding
that the deed Exhibit 8 was executed in his favor, the land continues until now to be registered for
taxation purposes in the name of Marcos Garcia; and notwithstanding the alleged deed of transfer
Exhibit 8 the land in question continues to be under the Isabela Sugar Company Inc., of Occidental
Negros, as property of named "THREE SISTERS — A," "THREE SISTERS — B," and "HACIENDA
GARCIA," the first portion being under the management of Macario Torilla, husband of the defendant
Margarita Garcia; the second under the management of Lope Rufino, husband of the defendant Rosario
Garcia; and the third under that of Claro Garcia, uncle of the plaintiffs (Exhibit D). In addition to these
reasons, it may and should be stated that Elueterio Rufino's testimony explaining how the transaction
between him and Marcos Garcia was effected, does not agree with the text of the deed of transfer
Exhibit 8. It is expressly stated in said document that the price paid by him for the land in question was
P6,567 and that he also assumed the lien in the form of a mortgage constituted on said land to secure
the payment of Candido Montilla of a loan in the sum of P4,675 from which it may be inferred that the
total price paid by him for said land was really P11,242. Notwithstanding this, he testified that he paid
only P1,892 to the defendant Marcos Garcia. It should be stated furthermore that on December 1, 1928,
or scarcely two and a half months from the time he bought said land from Marcos Garcia, Eleuterio
Rufino leased it, according to Exhibit 9, to Marcos Garcia's sons-in-law and husbands of the defendants
Margarita Garcia and Rosario Garcia, when it is natural that as he was poor and his business of tapping
tuba and reselling fishes was not lucrative, he should have personally taken charge of the cultivation
and exploitation of the land bought by him. Furthermore, on January 10, 1930, long after the alleged
transfer of said land, Exhibit 8, Macario Torilla and Lope Rufino, as Marcos Garcia's attorneys-in-fact,
the latter having executed in their favor the power of attorney, Exhibit O-1, by virtue of which they
mortgaged the land in question in the name of their principal to Candido Montilla on July 7, 1928,
Exhibit O, paid to Montilla the sum of P514.25 as interest on the loan secured by the mortgage above
stated (Exhibit 4). This last fact convinces us more that said deed of transfer Exhibit 8 is fictitious
because if it were genuine, there being as in fact there is in said document a stipulation that the
purchaser Eleuterio Rufino assumed all the lien on said property, Eleuterio Rufino, not Marcos Garcia,
personally, nor through his sons-in-law Macario Torilla and Lope Rufino, should have paid said
interest.
The foregoing proves to our satisfaction that errors 2, 3 and 4 relied upon by the appellants Margarita
Garcia, Rosario Garcia and Dolores Rufino in their brief are absolutely unfounded, and so is alleged
error No. 3 attributed to the lower court by the appellant Eleuterio Rufino.
It follows from the foregoing conclusions and considerations that errors 5 and 2 attributed to said court
by the defendants Garcia and Eleuterio Rufino, respectively, are likewise unfounded. If the transfers
made under the deeds which later made possible the issuance to the interested parties of certificates of
title Nos. 3001 and 8782 (Exhibits 3 and 7) are fraudulent, it is but proper, being in accordance with
law, that the defendants execute the deeds of transfer prayed for by the plaintiffs in their complaint in
order to give them what is theirs; and this is undoubtedly one fourth of the entire land because if one
half belonged to the plaintiffs' grandfather who, as already stated, had only two children: Claro Garcia,
the plaintiffs' uncle, and Merced Garcia, their mother.
But the question now arises whether or not the three plaintiffs are entitled to what they jointly pray for
in their complaint. There is no doubt but that the plaintiffs Serafin Tagarao and Buenaventura Tagarao
are entitled thereto on the ground that the former was only 23 years, 1 month and 1 day, when this
action was brought, and therefore the three years exception granted by the provisions of section 42 of
Act No. 190 had not yet elapsed as to him, and because Buenaventura Tagarao, then being only 18
years, 4 months and 3 days of age, was yet a minor and the period of prescription as to him is extended
to three years after he was attained majority.
The plaintiff Resurreccion Tagarao, notwithstanding that she was of legal age when this action was
brought, contends that neither has her right to seek the same relief prayed for by her brothers and
coplaintiffs prescribed, and cites in support of her contention the ruling laid down in the case of
Velazquez vs. Teodoro (46 Phil., 757). It was truly stated in said case, citing with approval a doctrine
laid down by the Supreme Court of the State of Ohio in the case of Sturges and Anderson vs.
Longworth and Horne (1 Ohio St., 545), that:
Where the interests of two defendants are joint and inseparable, and the rights of one are saved
under the provision of the statute of limitations, on account of his disability, such saving inures
to the benefit of the other defendant, although laboring under no disability.
As may be seen, this ruling refers to cases in which the rights of the defendants are joint and
inseparable because when they are not so, that is, when they are joint and several at the same time, as is
the case of the plaintiffs whose rights are joint and several, the rule according to said court, interpreting
the section from which section 42 of Act No. 190 was copied, is different; and said court stated that in
said cases the disability which protects an heir from the effects of prescription is no protection to
coheirs, or in other words, using the same language of the author of the footnotes on the decision
rendered in the case of Moore vs. Armstrong, reported in 36 Am. Dec., 63, 78, wherein the same
Supreme Court of the State of Ohio sustained the latter point of view, "where the rights of the parties
are not joint, the cases are uniform, and hold that the disability of one will prevent the operation of the
statute as to him, but that those who are not under a disability will be barred."
The case of Moore vs. Armstrong, supra, has more points in common with the case at bar than those of
Sturges and Anderson vs. Longworth and Horne, and Wilkins vs. Philips cited in said case of Velazquez
vs. Teodoro, supra. The question for determination in the former case was whether or not the period of
prescription runs not only against the heir who is laboring under disability but also against his coheirs
who are sui juris. The plaintiffs, to all appearances, were the heirs of one Furgus Moore and the heiress
who seemed to be laboring under disability was a married woman named Mrs. Fleming. The Supreme
Court of Ohio decided the question in the negative with the remark that whatever doubt might once
have been entertained on this subject, it was conclusively settled both in Great Britain and in the United
States that the statute is saved in favor only of the person laboring under the alleged disability, adding
in succession that this is precisely the rule with respect both to coparceners and tenants in common.
It cannot be argued that the separation of rights among the plaintiffs was not practicable in the sense
that one of them could not have disposed of or alienate his legal portion of the thing possessed in
common without the consent of the others, because the law provides otherwise. It says:
Every part owner shall have the absolute ownership of his part, and of the fruits and benefits
derived therefrom, and he may, therefore, sell, assign, or mortgage it, and even substitute
another person in its enjoyment, unless personal rights are involved, but the effect of the sale or
mortgage, with respect to the other participants, shall be limited to the share which may be
allotted him in the partition upon the dissolution of the community.
Furthermore, whosoever among said plaintiffs should have desired the partition of the property of
which he was a coowner, could have demanded such partition inasmuch as the law then allowed and
still allows such act (article 400, Civil Code; and section 181, Act No. 190). What particularly
distinguishes the case at bar from that of Sturges and Anderson vs. Longworth and Horne, supra, and
the other cases wherein it was established that when the rights and joint the exception which saves one
of the interested parties also inures to the benefit of the others, is that it was assumed in the latter cases
that the rights and interests involved therein pertained to joint tenancy, not tenancy in common, which
are two distinct relations, each having its own juridical meaning. The distinguishing feature between
the one and the other, as stated in the case of Mette vs. Feltgen (148 Ill., 357, 371), is that the surviving
coowner in joint tenancy is subrogated in the rights of the deceased coowner immediately upon the
death of the latter, by the mere fact of said death, but this does not take place in cases of tenancy in
common which corresponds to what is known in our law as community of property (articles 392 et seq.
of the Civil Code). For this reason, according to American jurisprudence, a coowner in joint tenancy
can not dispose of his share or interest in the property which is the subject matter of the joint tenancy,
without the consent of the other coowner because in so doing he prejudices the other's rights and
interests.
That the separation of rights and interests among the plaintiffs was practicable is further evidenced by
the fact that Claro Garcia with whom they were entitled to one-half of the land in question could
recover his legal portion thereof from Marcos Garcia, although certainly not in its entirety, having
failed to assert his rights. This being so, and it being known as it is in fact known that the purpose of
the statute of limitations is no other than to protect the diligent and vigilant, not the person who sleeps
on his rights, forgetting them and taking no trouble of exercising them one way or another to show that
he truly has such rights, it is logical to conclude that the right of action of the plaintiff Resurreccion
Tagarao is barred, and the fact that that of her brothers and coplaintiffs Serafin and Buenaventura
Tagarao still subsists does not inure to her benefit.
Although Resurreccion Tagarao could have enforced the right which she exercised in this case on May
17, 1918, when Marcos Garcia and Paula Tabifranca obtained original certificate of title No. 10009
(Exhibit M) or shortly afterwards, or long before, that is, from the death of her mother Merced Garcia
in 1914 or 1915, she did nothing to protect her rights. On the contrary, she allowed said spouses to
perform acts of ownership on the land covered by said certificate, publicly, peacefully, uninterrupted
and adversely to the whole world including herself, and from that time until the filing of her first
complaint more than ten years had elapsed. It is for this reason why it cannot be sustained that the
defendants Marcos Garcia and Paula Tabifranca, after it has been shown that the transfers made by
them are null and void, being fictitious and false, hold the land in question in trust, because if they ever
held it in said capacity it had been during the lifetime of the plaintiffs' mother to whom said defendants
used to give part of the fruits thereof. But after she had died, their possession was under the
circumstances above stated and the law provides that in whatever way the occupancy by a person
claiming to be the owner of a real property may have commenced, if said occupancy is under claim of
title and is furthermore open, continuous for ten years and adverse, it constitutes sufficient title for the
occupant thereof (sections 40 and 41 of Act No. 190), and there can be no other exception to this rule
than the disability of persons who are entitled to said property, by reason of age, some mental defect, or
imprisonment, for whom the same law provides the exceptions contained in its section 42.
It having been established by the evidence for both the plaintiffs and the defendants that Candido
Montilla holds a lien on the land in question, which is noted at the back of transfer certificates of title
Nos. 3001 and 8782 (Exhibits 3 and 7) for a loan in the sum of P4,675 which he granted to Marcos
Garcia in the honest belief that the latter was the true owner of the land described in certificates of title
Nos. 10009 (Exhibit M), 3001 (Exhibit 3), and 8782 (Exhibit 7), it is but just that said lien be
acknowledged by the plaintiffs Serafin Tagarao and Buenaventura Tagarao, with the necessary
reservations in favor of said two plaintiffs.
It should be stated in passing that the land in question, lot No. 510 of cadastral case No. 11 of Isabela,
Occidental Negros, is assessed at P15,530, and therefore one-twelfth (1/12) thereof is worth P1,294.17
on that basis.
As to the indemnity which the plaintiffs claim for the defendants, the conclusion arrived at by the lower
court in its decision and judgment is supported by the evidence, that is, the plaintiffs' share of the crops
from 1918 to 1929, including that of Resurreccion Tagarao, should be 1,000 cavans of palay. However,
it being clear that Resurreccion Tagarao's action is barred, it should be understood that only the
plaintiffs Serafin Tagarao and Buenaventura Tagarao are entitled to compel the defendants to pay to
them the value of two-thirds of the 1,000 cavans of palay at the rate of P3 a cavan.
For all the foregoing, the judgment appealed from is affirmed in so far as it favors the plaintiffs Serafin
Tagarao and Buenaventura Tagarao, and said defendants are hereby ordered to execute in favor of said
Tagarao brothers and deed or deeds necessary to transfer to them, by virtue of this judgment, two-
twelfths (2/12) of the entire lot No. 510 of the cadastre of Isabela, Occidental Negros, including the
portion transferred to Claro Garcia (G. L. R. O. Cad. Record No. 100); to indemnify each of them in a
sum equal to what he may pay to the mortgage creditor Candido Montilla to free his said portion from
the lien thereof in favor of said Montilla; or likewise to pay to each of them, upon failure of the
defendants to deliver said portion and execute the necessary deed of transfer, the sum of P1,294.17; and
furthermore to pay, as indemnity, the value of two-thirds of 1,000 cavans of palay, at the rate of P3 a
cavan, with costs against the defendants. Said judgment is reversed as to the plaintiff Resurreccion
Tagarao. So ordered.
Street, Abad Santos, Hull, Vickers, Imperial, and Butte, JJ., concur.
Separate Opinions
MALCOLM, J., concurring in part and dissenting in part:

I concur with the opinion of Justice Villa-Real, but in addition desire to append the following
observations: The case at bar is permeated with fraud. To do justice to the parties, all three of the
plaintiffs should be permitted to enforce their equitable rights. This can be done if the rule announced
in the case of Velazquez vs. Teodoro ( [1923], 46 Phil., 757), be accepted as stating a rule of property
and practice which should be followed. The judgment of the trial court should be affirmed.
Goddard, J., concur.
VILLA-REAL, J., concurring in part and dissenting in part:
I agree with the majority opinion in so far as it favors the plaintiffs Serafin Tagarao and Buenaventura
Tagarao, but I regret having to dissent therefrom in so far as it declares that Resurreccion Tagarao's
right of action is barred.
After a lengthy disquisition during which American and English jurisprudence was examined, the
majority lays down the general rule that in all actions involving community of property or tenancy in
common, the disability of a cotenant or a coowner to bring an action does not benefit those who are sui
juris.
The rulings in the various supreme courts of the American Union on this point are stated in 37 Corpus
Juris, page 1031, paragraph 441, as follows:
Disability of one of several parties. — The authorities are not in harmony upon the question of
the effect of the disability of one or more of several parties when one or more are sui juris. Thus
it has been held that if one cotenant is a minor the disability will save the interests of his
cotenant from the operation of limitations in actions for land, and this rule is extended to tenants
in common as well as joint
tenants, — the latter being a somewhat anomalous doctrine, — although in personal actions it is
held otherwise, and one plaintiff may be barred while another is saved. On the other hand it is
held that, where the right is joint so that all must sue, all must have the right to sue when the suit
is brought, and if one is barred at that time all are barred, although some may have labored
under disability. Perhaps the rule which is best supported by the authorities is that if the right is
joint and several the disability of one will save him but will not avail another who is not under
disability, and that if the right is joint so that the suit cannot be brought except by the parties
jointly then the rights of all are saved if any under disability; and one of coheirs or tenants in
common is saved by his own disability notwithstanding his cotenant is sui juris and barred, and
the saving as to the former will not save the latter, upon the principle that each may sue for his
own share severally. This general rule is subject to qualifications, however, and while it is held
that if the cause accrues to two jointly who are under disability, the statute will not run until the
disability is removed as to both, the application of the rule is confined to cases where all the
parties are under disability when the cause accrues and if one is not under disability the statute
will run against all; and this latter branch of the rule is confined in some cases to actions other
than for the recovery of land in which the rule is applied that as each may sue for is own share,
even though all may join, the bar as to one will not operate against the other who is under
disability.
It is inferred from the foregoing that one of the best rules laid down by the authorities on the matter is
that if the right is joint so that the suit cannot be brought except by the parties jointly, the rights of all
are saved if any is under disability. It will be seen that the rule that when a cotenant or coowner is sui
juris, the fact that his cotenants or coowners are laboring under disability does not save him from the
prescription of the right of action if it is not exercised in due time, is not absolute. The rule is applicable
only when a cotenant or coowner may exercise his right of action independently of his coowners or
cotenants; but not when the action necessarily has to be brought jointly by all the coowners or
cotenants.
In the case of Palarca vs. Baguisi (38 Phil., 177, 180, 181), this court through Justice Fisher,
interpreting section 114 of the Code of Civil Procedure, stated as follows:
. . . We hold that a coowner cannot maintain an action in ejectment without joining all other
persons interested. Section 114 of the Code of Civil Procedure requires that every action must
be prosecuted in the name of the real party in interest, and that any person who has an interest in
this subject matter and who is a necessary party to a complete determination of the questions
involved should be made a party to the proceeding. The same article provides, in its last
paragraph, that if any person having an interest in the subject of the action, and in obtaining the
relief demanded, refuses to join as plaintiff with those having alike interest, he may be made a
defendant, the fact of his interest and refusal to join being stated in the complaint. Were the
courts to permit an action in ejectment to be maintained by a person owning merely an
undivided interest in any given tract of land, a judgment in favor of the defendant would not be
conclusive as against the other coowners not parties to the suit, and thus the defendant in
possession of the property might be harassed by as many succeeding actions of ejectment, as
there might be coowners of the title asserted against him. The evidence purpose of section 114
is to prevent the multiplicity of suits by requiring the person asserting a right against the
defendant to include with him, either as coplaintiffs or as codefendants, all persons standing in
the same position, so that the whole matter in dispute may be determined once and for all in one
litigation.
We have not examined, nor do we need to do so, the procedural laws of the State of Ohio to the
doctrine of the Supreme Court of which the majority unconditionally adheres, inasmuch as we have our
own civil procedural law section 114 of which, taken from the Code of Civil Procedure of California,
enumerates those who should be joined as plaintiffs as well as those who should be joined as
defendants in an action. I agree that American jurisprudence should be followed as persuasive authority
in all that which is in accord with our laws, customs and social condition, particularly if the legal
provision to be interpreted or construed has been copied from some law of the State the Supreme Court
of which has rendered the decision invoked. But in the case at bar we have our own law on civil
procedure regulating the form and manner of bringing actions and the persons who should bring them
and against whom they should be brought. If section 114 of our Code of Civil Procedure, as interpreted
by this court, does not allow the bringing of an action for the recovery of a common property, as the
one in question, by any cotenant or coowner without the consent of the others, and if under the
American decision on which the majority opinion is based "if the right is joint so that the suit cannot be
brought except by the parties jointly then the rights of all are saved if any is under disability," then the
appealed judgment should be affirmed in all its parts.
For the foregoing considerations, I am of the humble opinion that inasmuch as Resurreccion Tagarao,
independently of her coowners Buenaventura Tagarao and Serafin Tagarao, could not bring the present
action for the recovery of their undivided portion of lot No. 510 of cadastral case No. 11 of Isabela,
Occidental Negros, G. L. R. O. Cadastral Record No. 100, in question, which belongs to the plaintiffs
and defendants in common and undivided shares, the disability of her minor brothers saves her, and her
fate follows theirs.
THIRD DIVISION
[G.R. No. 124118. March 27, 2000]
MARINO, RENATO, LETICIA, IMELDA, ALICIA, LIGAYA, and ZENAIDA, all
surnamed ADRIANO, petitioners, vs. COURT OF APPEALS, CELESTINA,
MANOLO and AIDA, all surnamed ADRIANO, respondents. Mi sedp
DECISION
GONZAGA_REYES, J.:
Petition for review on certiorari of the Decision of the Court of Appeals, Second Division, [1]
affirming in toto the Joint Order of the Regional Trial Court of Lucena City, Branch 55, [2] which
dismissed Civil Case No. 88-115 for annulment of will and ordered the disposition of the
estate of Lucio Adriano in accordance with the provisions of his last will and testament in
Spec. Proc. No. 4442.
The pertinent facts are as follows:
The testator, Lucio Adriano, also known as Ambrocio Adriano, married Gliceria Dorado on
October 29, 1933. Out of their lawful marriage, they had three children, namely, Celestina,
Manolo, and Aida, private respondents in this case. Sometime in 1942 or prior thereto, Lucio
and Gliceria separated, and Gliceria settled in Rizal, Laguna where she died on June 11,
1968. Also in 1942 or even earlier, Lucio cohabited with Vicenta Villa, with whom he had eight
children: Marino, Renato, Leticia, Imelda, Maria Alicia, Ligaya, Jose Vergel, and Zenaida, all
surnamed Adriano. All his children by Vicenta Villa are the named petitioners in the instant
case, with the exception of Jose Vergel, who died before the inception of the proceedings.
On November 22, 1968, or five months after the death of Gliceria, Lucio married Vicenta.
Lucio and Vicenta and their children lived in Candelaria, Quezon until the spouses separated
in 1972.[3]Misoedp
On October 10, 1980, Lucio executed a last will and testament disposing of all his properties,
and assigning, among others, his second wife Vicenta and all his children by his first and
second marriages as devisees and legatees therein. Among the properties bequeathed in the
will were a 45,000 square meter lot and the residential house, rice mill, warehouse and
equipment situated thereon located in Candelaria, Quezon and registered under Transfer
Certificate of Title ("TCT") No. T-56553 in the Registry of Deeds of Quezon [4], which was
disposed of in the following manner: (1) to private respondents, Lucio's children by his first
wife, 10,000 square meters of the disputed property, including the warehouse, rice mill, and
equipment situated thereon; (2) to Vicenta and petitioners, his children by his second
marriage, the remaining 35,000 square meters; and (3) to private respondents, the residential
house also within the same property.[5]
On February 11, 1981, Lucio died and private respondent Celestina Adriano, who was
instituted in Lucio's will as its executrix, filed a petition for the probate of the will on February
18, 1981 before the RTC of Lucena City. The probate case was docketed as Spec. Proc. No.
4442. After due hearing and despite the Opposition filed by Vicenta, the RTC allowed the
probate of the will and directed the issuance of letters testamentary to petitioner-executrix
Celestina Adriano in an Order dated August 22, 1983. On November 10, 1983, Vicenta
appealed said Order to the then Intermediate Appellate Court, which in turn affirmed the
probate of the will. Vicenta died on July 2, 1985. [6]
On August 17, 1988, and while the proceedings for settlement of estate were pending before
the RTC, petitioners instituted an action for annulment of Lucio Adriano's will which was
docketed as Civil Case No. 88-115. In the complaint, plaintiffs-petitioners alleged that before
the marriage of Lucio and their mother, Vicenta, on November 22, 1968, the two lived
together as husband and wife and as such, acquired properties which became the subject of
inventory and administration in Spec. Proc. No. 4442. Plaintiffs claimed that the properties
bequeathed in Lucio's will are undivided "civil partnership and/or conjugal properties of Lucio
Adriano and Vicenta Villa", and thus, the will sought to be probated should be declared void
and ineffective insofar as it disposes of the rightful share or properties of Vicenta. [7]
It is also not disputed that the contested properties in Civil Case No. 88-115 and Spec. Proc.
No. 4442 were also the subject of a complaint filed sometime in 1980 by Vicenta against
Lucio, docketed with the then Court of First Instance of Quezon, Lucena City, Branch II as
Civil Case No. 7534, wherein Vicenta sought the provisional partition or separation of the
properties pendente lite. The case was dismissed on January 28, 1991 without prejudice, for
lack of interest. Edp mis
Spec. Proc. No. 4442 and Civil Case No. 88-115 were consolidated and jointly heard by the
RTC.
The trial court favored the evidence of private respondents, which indicated that the purchase
money for the contested properties came from the earnings of Lucio in a business partnership
that he entered into in 1947, or during the subsistence of his marriage to Gliceria. The trial
court further found that Lucio's initial capital infusion of P15,000.00 in the business
partnership was in fact obtained from the conjugal fund of his first marriage. The evidence of
private respondents is thus summarized by the trial court:
Defendants' evidence, on the other hand, tends to show that the original
common fund of Lucio (Ambrocio) Adriano in the amount of P15,000.00 was
invested by Lucio Adriano in a partnership called the "Central Rice Mill & Co."
which was formed and organized on November 30, 1947. Such initial
investment came from the savings of Lucio Adriano and Gliceria Dorado before
World War II, which was earned by said spouses by means of ambulant
peddling of betel nuts and ikmo leaves and, subsequently, by the selling of (a)
variety (of) goods and rice retailing at a market stall which they acquired at the
public market of Candelaria, Quezon. On these savings, spouses Lucio Adriano
and Gliceria Dorado added the proceeds of the sale of a "fairbanks" rice mill
made during the Japanese occupation, sometime between the years 1943 and
1944. The same rice mill was then located at the south end of Gonzales Street
near the public market of Candelaria, Quezon, and was acquired by the same
spouses through their joint efforts and industry made from the time of their
marriage in 1933.
It is likewise shown by defendants' evidence that on January 8, 1951, the
Articles of Co-Partnership of "Central Rice Mill & Co." was amended and its
name was changed to "Quezon Central Rice Mill & Co." Lucio Adriano then
made a new investment into the partnership out of savings from the conjugal
partnership with Gliceria Dorado for the period 1947 until 1950 in the amount of
P18,750.00 (Exhibit "1-A") thereby increasing his investment to P33,750.00 (par.
7(c) of Amended Articles of Co-Partnership, Exhibit "1-A"). On January 22,
1952, another partnership called "The Lessee of the Quezon Central Rice Mill"
as formed by Lucio (Ambrocio) Adriano and four (4) partners and he invested
the amount of P25,000.00 (Exhibit "2") thereby making his total capital
investment reach the amount of P58,750.00.
On May 3, 1952, Lucio Adriano bought the share of Tan Kim alias "Joaquin Tan",
a partner who withdrew from the partnership of the Quezon Central Rice Mill &
Co. and who, in consideration of the sum of P34,342.55, executed a Deed of
Sale and Mortgage (Exhibit "3") in favor of Lucio Adriano covering his
proportional share in the properties of the partnership consisting of two (2) rice
mills, two (2) diesel engines and a camarin, which are situated at Candelaria,
Quezon. Lucio Adriano declared these properties in his name for taxation
purposes under TCT Property Index No. 22-11-01-043-B (Exhibit "4") and Tax
Declaration No. 564 (Exhibit "5").LEX
All in all, the withdrawals made out of the savings of the conjugal partnership of
Lucio Adriano and his wife, Gliceria Dorado, are the following:
1. Upon signing of the contract of sale and mortgage (Exhibit "3"), Lucio Adriano
paid the sum of P10,342.45 and the balance of P24,000.00, as reflected in the
statement of account of Tan Kim as receivables from Lucio Adriano (Exhibit "6")
were settled on subsequent dates;
2. Original copy of a receipt dated May 3, 1953 (Exhibit "7") covering expenses
of registration of Exhibit "3" in the sum of P160.00;
3. Handwritten list of registration expenses (Exhibit "8"); and
4. Originals of receipts covering amounts paid by Lucio Adriano to Tan Kim on
various dates from June 3, 1953 (Exhibits "9" to "20", inclusive) in the aggregate
sum of P24,492.15.
It likewise appears from the evidence of the defendants that by the end of 1953,
the total capital investment of Lucio Adriano taken from his conjugal partnership
with his first wife, Gliceria Dorado, reached the amount of P94,744.88. In the
late part of 1954, however, the same partnership was dissolved by means of a
verbal agreement reached by Lucio Adriano and his partners and this resulted to
an equal division of the partnership properties with the left portion thereof going
to Tan Kang and Tan Giam and the right portion, to Lucio Adriano and Francisco
Ramirez. Furthermore, by the end of 1955, Francisco Ramirez withdrew his
share totalling P16,250.00 in favor of Lucio Adriano, who acquired the same,
and from that time on, the latter became the sole owner of the rice mill which he
later registered as the "Adriano Central Rice Mill". When the partnership was
finally dissolved in 1955, the total capital investment of Lucio Adriano therein
was P110,994.88, consisting of the fruit or income of his common fund with
Gliceria Dorado, which was cumulatively used in the acquisition of other
properties listed in the Inventory submitted to this Court by the administratrix
and defendant, Celestina Adriano de Arcilla on February 19, 1987. [8]
The decretal portion of the Order dated May 8, 1991 issued by the RTC of Lucena City reads:
WHEREFORE, judgment is hereby rendered as follows:
1. In Civil Case No. 88-115, this Court finds and so holds that no cogent reasons
or grounds exist to affect adversely, if not nullify, the testamentary dispositions
and provisions contained in the Last Will and Testament of the late Lucio
(Ambrocio) Adriano. Accordingly, the complaint filed in this case is hereby
ordered dismissed with costs against plaintiffs. Jj sc
In like manner, the counterclaim is hereby ordered dismissed.
2. In Spec. Proc. No. 4442, it is hereby ordered that the settlement, liquidation,
and partitioning of the estate of the late Lucio (Ambrocio) Adriano, more
particularly the delivery of the respective shares of his heirs, the plaintiffs and
defendants, be effected and implemented in accordance with the testamentary
provisions set forth in the Last Will and Testament of the testator, Lucio
(Ambrocio) Adriano.
SO ORDERED.[9]
The Court of Appeals dismissed petitioners' appeal for lack of merit, and affirmed in toto the
Joint Order of the RTC of Lucena City.
As elevated before us, the petition takes issue only in respect of the property covered by TCT
No. T-56553. Petitioners insist that it was erroneous of respondent court not to have upheld
the co-ownership of Vicenta to 1/2 of said property, and to have declared the entire property
as belonging to the conjugal partnership of Lucio and Gliceria. The petition essentially relies
on the following grounds: (1) TCT No. T-56553, issued to "Spouses, LUCIO ADRIANO and
VICENTA VILLA"[10], constitutes conclusive and indefeasible evidence of Vicenta's co-
ownership in the property,[11] and (2) the Deed of Sale dated March 15, 1964, as annotated in
OCT No. O-9198[12], the mother title of TCT No. T-56553, designates Vicenta Villa as a co-
vendee. Petitioners maintain that the Deed of Sale, being the "best evidence" of the contents
thereof, proves Vicenta's co-ownership in the land.
We see no reason to reverse respondent court. Petitioners' insistence that a co-ownership of
properties existed between Lucio and Vicenta during their period of cohabitation before their
marriage in 1968 is without lawful basis considering that Lucio's marriage with Gliceria was
then subsisting. The co-ownership in Article 144 of the Civil Code [13] requires that the man
and woman living together as husband and wife without the benefit of marriage must not in
any way be incapacitated to marry.[14] Considering that the property was acquired in 1964, or
while Lucio's marriage with Gliceria subsisted, such property is presumed to be conjugal
unless it be proved that it pertains exclusively to the husband or to the wife. [15] Thus, we ruled
in Pisuea vs. Heirs of Petra Unating and Aquilino Villar[16] that the prima facie presumption
that properties acquired during the marriage are conjugal cannot prevail over a court's
specific finding reached in adversarial proceedings to the contrary. Sc jj
As found by both the trial court and respondent court in this case, not only did petitioners fail
to overcome the presumption of conjugality of the disputed property, private respondents
have also presented sufficient evidence to support their allegation that the property was in
fact purchased by Lucio with proceeds of the conjugal fund of his first marriage. This factual
finding, which is clearly borne out by the evidence on record, is binding and conclusive upon
us and will not be disturbed.
Although in cases of common-law relations where an impediment to marry exists, equity
would dictate that property acquired by the man and woman through their joint endeavor
should be allocated to each of them in proportion to their respective efforts, [17] petitioners in
the instant case have not submitted any evidence that Vicenta actually contributed to the
acquisition of the property in question. Sj cj
We cannot agree with petitioners bare and expedient assertion that, because the title to the
property was registered in the name of both Lucio and Vicenta, she should thereby be
deemed owner to half of it. A certificate of title under the Torrens system is aimed to protect
dominion, and should certainly not be turned into an instrument for deprivation of ownership.
[18] Because a just and complete resolution of this case could only be arrived at by
determining the real ownership of the contested property, evidence apart from or contrary to
the certificate of title bears considerable importance. [19] This assumes peculiar force in the
instant situation where the heirs of a lawful pre-existing marriage stand to be deprived. Thus,
in Belcodero vs. Court of Appeals,[20] we held that property acquired by a man while living with
a common-law wife during the subsistence of his marriage is conjugal property, even when
the property was titled in the name of the common-law wife. In such cases, a constructive
trust is deemed to have been created by operation of Article 1456 of the Civil Code over the
property which lawfully pertains to the conjugal partnership of the subsisting marriage.
Article 1456. If property is acquired through mistake or fraud, the person
obtaining it is, by force of law, considered a trustee of an implied trust for the
benefit of the person from whom the property comes.
InVicentas case, it is clear that her designation as a co-owner of the property in TCT No. T-
56553 is a mistake which needs to be rectified by the application of the foregoing provisions
of article 1456 and the ruling in Belcodero. The principle that a trustee who takes a Torrens
title in his or her name cannot repudiate the trust by relying on the registration, is a well-
known exception to the principle of conclusiveness of a certificate of title. [21]
On petitioners second ground, we note that the Deed of Sale dated March 15, 1964 which
purportedly designates Vicenta as a co-buyer of the property was not even presented in
evidence. The entry in OCT No. 0-9198 of the Deed of Sale bears no weight in proving
Vicentas supposed co-ownership, applying petitioners own argument that the document itself,
the Deed of Sale in the instant case, is the best evidence of its contents. The memorandum in
the OCT is not admissible as evidence of the contents of said Deed of Sale, but only of the
fact of its execution, its presentation for notation, and its actual notation for purposes of
constructive notice to the public of the preferential rights created and affecting that property. [22]
Besides, even if said Deed of Sale was submitted in evidence, it still has no bearing because
it could not be said to affect or bind third parties to the sale, such as private respondents
herein.
WHEREFORE, the Decision in CA-G.R. CV No. 41509 is hereby AFFIRMED. Supreme
SO ORDERED.
Melo, (Chairman), Vitug, and Panganiban, JJ., concur.
Purisima, J., no part.

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-51914 June 6, 1990
MARIA BICARME assisted by her husband JOSE BALUBAR, petitioner,
vs.
COURT OF APPEALS and CRISTINA BICARME, respondents.
Paterno Aquiao for petitioner.
Demetrio V. Pre for private respondent.
MEDIALDEA, J.:
This petition seeks to set aside the appealed decision of the lower court 1 as affirmed by the appellate court on August 28, 1979, directing the amicable partition
of two parcels of land between Cristina Bicarme (private respondent) and her aunt Maria Bicarme (petitioner), as well as the Resolution, dated October 5, 1979,
denying petitioner's motion for reconsideration.
The affirmed decision of the lower court, rendered on December 22, 1975, disposes as follows:
(a) That Maria Bicarme and Cristina Bicarme are the only surviving co-heirs and co-owners and entitled in equal shares over the parcel of
land in litigation and described under paragraph 3 of the complaint;
(b) That the alleged deeds of Sale executed by Maria Bicarme covering and affecting the two parcels of land in suit are declared null and
void in so far (sic) as they affect and/or cover the one-half undivided share and inheritance of plaintiff Cristina Bicarme;
(c) Maria Bicarme is ordered to account and/or pay the value corresponding to the one-half (½) undivided shares of Cristina Bicarme in
the yearly fruits of the land and to commence from the filing of this complaint; that is seventy five bundles of palay valued at P375.00 with
legal interest fully paid;
(d) That the parties are hereby ordered within (15) days from receipt of this decision to amicably agree upon a written partition and to
submit the same for approval, parties shall appoint a Commissioner to effect and carry out effectively the partition of the 2 parcels of land
in equal parts between the plaintiff and the defendant;
(e) Defendant and her hirelings and representatives are forever ordered to refrain from molesting the Commissioner in the discharge of his
duty to partition said two (2) parcels of land in suit;
(f) And, Defendant to pay Attorney's fee and cost of this suit.
SO ORDERED. (pp. 40-41, Record on Appeal)
Petitioner-defendant Maria Bicarme appealed.
The Court of Appeals affirmed the decision; hence, this petition.
The main issue in this case dwells on ownership rights over the litigated parcels of land.
As established by the trial court, Sps. Juan Bicarme and Florencia Bidaya were the original co-owners of two parcels of land described as follows:
1. Cornland in Palao, Bangued, Abra, bounded on the North-Hill, on the East-Brono Barbers, on the South-Casimiro Palos, and on the
West-Clemente Baldozan, of about 8,721 sq. m., assessed at P400.00 under Tax Dee. No. 7764;
2. Riceland in Palao, Bangued, Abra, bounded on the North-Macario Bolos, East- Roberto Bicarme, South-Juliana Baldozan, and West-
Telesporo, about 1,539 sq. m., assessed at P 60.00, under Tax Dec. No. 7765;
.... (P. 10, Record on Appeal)
The spouses died intestate and were survived by three children-Victorina Bicarme, Sebastian Bicarme and Maria Bicarme. Sebastian Bicarme died when he was
a little boy and without any issue. Later, Victorina Bicarme died intestate, survived by her only daughter, Cristina Bicarme.
Cristina claims that upon the death of her grandparents, Sps. Juan and Florencia, her mother Victorina and her aunt, Maria, became co-owners or co-heirs of the
litigated parcels of land. Upon the death of her mother, Victorina, Cristina became co-heirs with Maria, having inherited the share and interest of her mother
corresponding to one-half of the two parcels of land.
Cristina instituted this action for partition, because her aunt, Maria, refused to share with her the yearly fruits of the disputed parcels of land. Maria, however,
maintains that "she acquired these two parcels of land in 1925 (cornland) and 1926 (riceland) from the deceased spouses Placido Bidaya and Margarita Bose
and since then until the present, had been in open, public, peaceful, continuous, adverse possession and enjoyment and in the concept of absolute owner
thereof Maria further claims that Cristina, her niece, never shared or contributed to the payment of taxes of said two parcels of land; and, finally, that Cristina
Bicarme was presumed already dead" (p. 35, Record on Appeal).
In ruling Maria and Cristina to be co-heirs, the trial court relied on a provision separately stated in three deeds of sale executed by Maria as follows:
That I am the sole and absolute owner over the above described cornland having acquired the same by inheritance from my late father
Juan Bicarme;" (See Exhibits '4', '5', '6', and '7' or Exhibits 'A-1,' 'B-1,' 'C-1', and 'D-1'; (p. 37, Record on Appeal, emphasis supplied)
The trial court stated that the provision was in the nature of a trust provision in favor of Cristina as a co-owner/co-heir.
We agree. By admitting that the cornland is inherited property, Maria, in effect, recognized Cristina's lights thereto as a co-heir/co-owner. As the trial court
theorized:
xxx xxx xxx
(6) That Victorina Bicarme and Maria Bicarme never partitioned even orally the two parcels of lands which were then owned in common by
them;
(7) . That even after the death of Victorina Bicarme, the land in suit remained undivided and were therefore in the possession of Maria
Bicarme because her niece Cristina Bicarme went to Manila and now married and presently residing at No. 22, 11th Avenue, Grace Park,
Caloocan City.
(8) That without the knowledge and consent of Cristina Bicarme who was then of legal age, her aunt Maria Bicarme executed on April 27,
1973 a Deed of absolute Sale (Exhibit 'A') in favor of Marina Pizarro who acquired portion No. 3 of the cornland; on the same date she
also executed another Deed of Sale (Exhibit 'B') in favor of Saturnino Pacopia, who acquired portion No. 2 of the cornland; and, in June
16, 1965 again Maria Bicarme executed a third Deed of Sale (Exhibit 'C') in favor of Casimira Pacopia, who acquired portion No. 1 of the
cornland;
(9) That these three (3) separated (sic) Deeds of Sale all executed by Maria Bicarme over the cornland have a respective total area of 740
square meters, more or less, for portion No. 3; 1,836 square meters, more or less for portion No. 2; and 1,265 square meters, more or less
for portion No. 1, or a total area of 3,481 square meters more or less;
(10) That in these three separate Deeds of Sale, Maria Bicarme expressly provided the aforesaid trust provision. (pp. 36-37, Record on
Appeal, emphasis ours)
Despite admission during the hearing on the Identity of the land in question (see p. 21, Record on Appeal), Maria's counsel, on appeal, re-emphasized her
original claim that the two parcels of land in her possession were acquired from the Sps. Placido Biduya and Margarita Bose. However, the private document
relative to the purchase, was not produced at the trial, allegedly because "they were placed in a trunk in their house which were burned during the Japanese
Occupation." In 1945, Maria sold the riceland. No written evidence was submitted. For all legal intents therefore, the riceland remained inherited property. The
Identity of the cornland as inherited property can no longer be disputed, in view of Maria's admission in the deeds of sale she had executed, containing the trust
provisions.
Having established Cristina's co-ownership rights, Maria nonetheless insists that Cristina's rights are barred by prescription under Secs. 40 and 41 of Act 190
(Code of Civil Procedure, Article 1116, Civil Code) then the applicable law, where the longest period of both acquisitive and extinctive prescription was only ten
years (Diaz v. Garricho, 103 Phil. 261, 266). In the present case, Cristina, it is alleged, asserted her claims 34 years after her right of action accrued, as follows:
... After Cristina left barrio Palao at the age of eleven (11), she never returned until she was twenty two (22) years old and married (pp. 32-
34, tsn., Nov. 4, 1974). Upon her return her grandmother Florencia Bidaya was already dead (p. 33, Id). At that time, Cristina claimed her
hereditary share in the lands in question but her demands were ignored and repudiated by her aunt Maria, Cristina admitted that ever
since the Japanese occupation when she was already of age, her aunt Maria refused to recognize her rights to said lands (pp. 41-42, Id.).
From that moment when Maria ignored and repudiated Cristina's hereditary rights, Cristina's right of action already accrued and the period
of prescription began to run.
The instant action was filed only in 1974 (p. 1, Record on Appeal), or some 34 years after it accrued. If she had any rights at all, Cristina
slept on her rights. The present action is unquestionably barred by prescription. (pp. 27-28, Appellants' Brief)
Against Maria's claims of acquisitive prescription, the lower court ruled that Maria was as trustee with respect to Cristina's share. As such, prescription, as a
mode of acquiring title, could not apply:
A co-owner is a trustee for the other co-owner. No one of the co-owners may acquire exclusive ownership of the common property thru
prescription for possession by one trustee alone is not deemed adverse to the rest (Castrillo vs. Court of Appeals, 10 SCRA 549; Custodio
vs. Casiano, 9 SCRA 841 and, Pascual vs. Meneses, 20 SCRA 219). (p. 6, Rollo)
While We agree with the trial court that Maria and Cristina are co-heirs, and that with respect to them prescription, as a mode of acquisition, cannot apply, We
hasten to elaborate on certain aspects, which need clarification.
It is correct to say that possession by one co-owner (trustee) is not deemed adverse to the others. In this sense, an action to compel partition will lie at any time
and does not prescribe. It is, however, not legally correct to say that by virtue of the imprescriptibility of an action for partition, prescription as a mode of acquiring
title, can never be invoked, or in the present case, that Maria, as a co-owner can never acquire the property by prescription.
An action for partition implies that the thing is still owned in common. If a co-owner or co-heir holds the property in exclusive adverse possession as owner,
asserting sole and exclusive dominion for the required period, he can acquire sole title to it as against the co-heirs or co-owners. The imprescriptibility of an
action for partition cannot thus be invoked when one of the co-owners has possessed the property as exclusive owner, and for a period sufficient to acquire it by
prescription. From the moment one of the co-owners claims that he is the absolute and exclusive owner of the properties and denies the others any share
therein, the question involved is no longer one of partition, but of ownership. (A. Tolentino, Civil Code of the Phil., Ann., Vol. II, pp. 192-193; Bargayo v. Comumot,
40 Phil. 856, at p. 870). In this sense, the trial court erred in saying that there can be no prescription (as a mode of acquiring title) in favor of a co-owner/trustee.
Having clarified this issue, the main question to be resolved is whether or not Maria has been in possession of the lands in question under the conditions
required by Section 41 of the Code of Civil Procedure, as to uphold acquisitive prescription in her favor.
One of the conditions imposed by said section is that the possession must be adverse against the whole world. In order that a possession may be deemed
adverse to the cestui que trust, or the other co-owner the following must concur:
... (1) that he has performed unequivocal acts of repudiation amounting to an ouster of the cestui que trust or other co-owner, (2) that such
positive acts of repudiation have been made known to the cestui que trust or other co-owners, and (3) that the evidence thereon must be
clear and convincing. (A. Tolentino, Civil Code of the Phils., Ann., Vol. 11, p. 193)
In the present case, Maria Bicarme disclaims the co-ownership by denying that subject properties are the inherited properties. Other than the tax declarations in
her name, there is no written evidence that these were acquired/purchased from Sps. Placido Biduya and Margarita Bose. Payment of land taxes does not
constitute sufficient repudiation of the co-ownership, as it is not an act adverse to Cristina's rights. Moreover, Cristina, being a minor, until she claimed her rights,
was not even aware thereof. Neither did Maria make known her repudiation to Cristina, because all along, Maria presumed her to be dead. Her refusal to share
with Cristina the yearly profits stemmed from Cristina's failure to share in the yearly taxes. Acquisitive prescription cannot therefore apply in this case:
Acts which are adverse to strangers may not be sufficiently adverse to the co- owners. A mere silent possession by a co-owner, his receipt
of rents, fruits or profits from the property, the erection of buildings and fences and the planting of trees thereon, and the payment of land
taxes, cannot serve as proof of exclusive ownership, if it is not borne out by clear, complete and conclusive evidence that he exercised
acts of possession which unequivocally constituted an ouster or deprivation of the rights of the other co-owners. (Mangyan v. Ilan, 28 O.G.
62; Laguna v. Levantino, 40 O.G. (14th Suppl.) 136, cited in A. Tolentino, Civil Code of the Philippines, Ann., Vol. II, pp. 193- 194)
Additionally, it follows that neither can the doctrine on laches apply, for absent acquisitive prescription, (i.e., where it has not been shown that the possession of
the claimant has been adverse and exclusive and opposed to the right of the others) the case is not one of ownership, in which case, the doctrine on
imprescriptibility of an action for partition will apply. Cristina's right to partition wig therefore prosper.
Finally, We eliminate the award on attorney's fees in the absence of any specific allegation thereon in her complaint, or that the same is covered by any of the
eleven (11) exceptions enumerated in Art. 2208 of the New Civil Code. Even if We were to concede exercise of judicial discretion in the award of attorney's fees
under Art. 2208, par. 11, this provision "demands a factual, legal or equitable justification. Without such justification, the award is a conclusion without a premise,
its basis being improperly left to speculation and conjecture." (Mirasol v. De la Cruz, G.R. L-32552, July 31, 1978; 84 SCRA 337.) Likewise, "the matter of
attorney's fees cannot be touched once and only in the dispositive portion of the decision. The text itself must expressly state the reason why attorney's fees are
being awarded" (ibid). In the present case, the matter of such fees was touched but once and appears only in the dispositive portion of the decision.
ACCORDINGLY, the petition for review is DENIED and the appealed decision as affirmed by the Court of Appeals is hereby AFFIRMED with the modification that
the award on attorney's fees is eliminated. Costs against petitioner. This decision is immediately executory.
SO ORDERED.
Narvasa (Chairman), Cruz and Gancayco, JJ., concur.
SECOND DIVISION
ELINO RIVERA, DOMINADOR G.R. No. 141501
CLAUREN, SOLEDAD CLAUREN

DE RIVERA, TEOFILA RIVERA Present:
and CECILIA RIVERA,
Petitioners, PUNO, J., Chairperson,
SANDOVAL-GUTIERREZ,
CORONA,
- v e r s u s - AZCUNA and
GARCIA, JJ.
HEIRS OF ROMUALDO VILLANUEVA*
represented by MELCHOR
VILLANUEVA, ANGELINA
VILLANUEVA, VICTORIANO DE
LUNA, CABANATUAN CITY RURAL
BANK, INC. and REGISTER OF DEEDS
OF NUEVA ECIJA,
Respondents. Promulgated:
July 21, 2006
x- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - x
DECISION
CORONA, J.:
This petition for review on certiorari[1] from a decision[2] and a
resolution[3] of the Court of Appeals (CA) in CA-G.R. CV No. 51449
touches upon questions of filiation, presumptions of co-equal
acquisition and res judicata.
Petitioners are allegedly the half-brothers (Elino and Dominador),
the half-sister-in-law (Soledad), and the children of a half-brother
(Teofila and Cecilia) of the deceased Pacita Gonzales (hereinafter
Gonzales). Respondents Catalino, Lucia, Purificacion and Melchor, all
surnamed Villanueva, and Arnaldo V. Avendano are allegedly the
siblings, full and half-blood of Romualdo Villanueva (hereinafter
Villanueva).[4] They are denominated as the heirs of Villanueva and are
represented by Melchor. They were allowed to substitute for Villanueva
upon his death.[5] The remaining respondents, Angelina Villanueva
(hereinafter respondent Angelina) and husband Victoriano de Luna, are
allegedly the daughter and the son-in-law, respectively, of the late
Villanueva.
From 1927 until her death in 1980, Gonzales cohabited with
Villanueva without the benefit of marriage because the latter was
married to one Amanda Musngi who died on April 20, 1963.[6] In the
course of their cohabitation, they acquired several properties including

the properties contested in this case. The disputed properties are:
(a) Lot No. 266-B-1, with an area of 1,787 square meters, more or less, and
covered by Transfer Certificate of Title No. NT-21446 [in the names of Villanueva and
Gonzales], together with the residential house erected thereon and other improvements;
(b) Lot No. 266-B-3 [included in the coverage of transfer Certificate of Title
No. NT-21446], with an area of 5,353 square meters, more or less, situated at Poblacion,
Talavera, Nueva Ecija;
(c) [Lot 801-A covered by] Transfer Certificate of Title No. NT-12201 [in the
names of Villanueva and Gonzales], with [an] area of 15.400 hectares, more or less, situated
at Llanera, Nueva Ecija;
(d) [Lot 3-A covered by] Transfer Certificate of Title No. NT-51899 [in the
names of Villanueva and Gonzales], with an area of 4.0019 hectares, more or less, situated at
Calipahan, Talavera, Nueva Ecija;
(e) [Lot No. 838 covered by] Transfer Certificate of Title No. NT-17193 [in
the names of Villanueva, Gonzales and one Soledad Alarcon vda. de Rivera], with an area of
3.8718 hectares, more or less, situated at Talavera, Nueva Ecija;
(f) [Lot 884-B covered by] Transfer Certificate of Title No. NT-26670 [in the
name of Gonzales], with an area of 3.5972 hectares, more or less, situated at Talavera,
Nueva Ecija;
(g) Subdivision lots situated at Talavera, Nueva Ecija, covered by Transfer
Certificates of Title Nos. 106813 to 106931, inclusive, although the land covered by TCT No.
NT-106827 was already sold to one Pastor Barlaan;
(h) Shares of stocks, tractor, jewelries and other chattels, with an
approximate value of at least P100,000; and
(i) Savings deposit with the [Philippine] National Bank, in the amount of
P118,722.61.[7]
Gonzales died on July 3, 1980 without leaving a will.
On August 8, 1980, Villanueva and respondent Angelina executed
a deed of extrajudicial partition with sale,[8] that is, an extrajudicial
settlement of Gonzales estate comprising a number of the
aforementioned properties. In this document, Villanueva, for the amount
of P30,000, conveyed his interests in the estate to Angelina.
Petitioners (Gonzales half-brothers, etc.) filed a case for partition of

Gonzales estate and annulment of titles and damages, with the Regional
Trial Court (RTC) of Santo Domingo, Nueva Ecija, Branch 37. It was
docketed as Civil Case No. SD-857 (SD-857). In dismissing the
complaint, the RTC made two findings: (1) Gonzales was never married
to Villanueva and (2) respondent Angelina was her illegitimate child by
Villanueva and therefore her sole heir, to the exclusion of petitioners.[9]
Not satisfied with the trial courts decision, petitioners appealed to
the CA which affirmed it. Hence, this petition.
Petitioners contend that the RTC and CA erred in finding that
respondent Angelina was Gonzales illegitimate daughter despite the
RTCs ruling in another case, Special Proceedings No. SD-144 (SD-144),
entitled In the Matter of the Intestate Estate of the late Pacita C.
Gonzales, Epifanio C. Rivera, petitioner, v. Romualdo Villanueva,
oppositor, in which the trial court appointed Epifanio Rivera as
administrator of Gonzales estate.[10]
They argue that the trial courts decision in SD-144, to the effect
that respondent Angelina was neither the adopted nor the illegitimate
daughter of Gonzales, should have operated as res judicata on the
matter of respondent Angelinas status.
The first issue here is whether or not the findings regarding

respondent Angelinas filiation in SD-144 are conclusive on SD-857 and
therefore res judicata. The second is the determination of her real status
in relation to Gonzales. Finally, there is the question of whether or not
the real properties acquired by Villanueva and Gonzales were equally
owned by them.
We resolve the first issue in the negative. Res judicata literally
means a matter adjudged; a thing judicially acted upon or decided; a
thing or matter settled by judgment. It sets forth the rule that an
existing final judgment or decree rendered on the merits and without
fraud or collusion by a court of competent jurisdiction, upon any matter
within its jurisdiction, is conclusive of the rights of the parties or their
privies, in all other actions or suits in the same or any other judicial
tribunal of concurrent jurisdiction on the points and matters in issue in
the first suit.[11]
For res judicata to apply, the following elements must be present:
(1) the judgment sought to bar the new action must be final;
(2) the decision must have been rendered by a court having jurisdiction over the subject
matter and the parties;
(3) the disposition of the case must be a judgment on the merits and
(4) there, must be as between the first and second action, identity of parties, subject matter
and causes of action.[12]
A number of factors militate against the existence of res judicata.
First, the parties in the two cases are different. Epifanio C. Rivera, who
incidentally is not a party in this petition, filed SD-144 seeking letters of
administration over his dead sisters estate. Villanueva was his lone
opponent. On the other hand, although both Villanueva and respondent
Angelina were parties in SD-857, Epifanio Rivera was not. Petitioners
never alleged that Epifanio represented their interests, and vice versa.
Furthermore, in SD-144, the trial court never actually acquired
jurisdiction over respondent Angelinas person. She was not even a party
there, given that Villanueva did not represent her interest when he
opposed Epifanio Riveras petition.
Finally and most significantly, there was no identity of cause of
action between the two suits. By their very nature, they were entirely
distinct from each other. SD-144 was a special proceeding while SD-857
was an ordinary civil case. The former was concerned with the issuance
of letters of administration in favor of Epifanio Rivera while the latter
was for partition and annulment of titles, and damages.
Clearly, then, there was no res judicata. Nevertheless, this still
begged the question of whether or not it was proven, as the CA held,
that respondent Angelina was the illegitimate daughter of the decedent
Gonzales. On this issue, we find merit in the petition.
Both the trial court and the CA ruled that respondent Angelina was
the illegitimate daughter of the decedent, based solely on her birth
certificate. According to the assailed decision, the birth certificate clearly
discloses that Pacita Gonzales was the mother of Angelina Villanueva
while municipal treasurer Romualdo Villanueva was denominated
therein as her father.[13] The CA found this to be adequate proof that
respondent Angelina was Gonzales illegitimate child.
However, a closer examination of the birth certificate[14] reveals
that respondent Angelina was listed as adopted by both Villanueva and
Gonzales.
As a general rule, the Supreme Court is not a trier of
facts.[15] However, one of the exceptions to this rule is when the
judgment of the CA is based on a misapprehension of facts.[16] We
believe this to be just such an instance.
In Benitez-Badua v. Court of Appeals,[17] Marissa Benitez-Badua,
in attempting to prove that she was the sole heir of the late Vicente
Benitez, submitted a certificate of live birth, a baptismal certificate,
income tax returns and an information sheet for membership in the
Government Service Insurance System of the decedent naming her as
his daughter, and her school records. She also testified that she had
been reared and continuously treated as Vicentes daughter.

By testimonial evidence alone, to the effect that Benitez-Baduas
alleged parents had been unable to beget children, the siblings of
Benitez-Baduas supposed father were able to rebut all of the
documentary evidence indicating her filiation. One fact that was counted
against Benitez-Badua was that her supposed mother Isabel
Chipongian, unable to bear any children even after ten years of
marriage, all of a sudden conceived and gave birth to her at the age of
36.
Of great significance to this controversy was the following
pronouncement:
But definitely, the mere registration of a child in his or her birth certificate as the child of
the supposed parents is not a valid adoption, does not confer upon the child the status
of an
adopted child and the legal rights of such child, and even amounts to simulation of the
childs birth or falsification of his or her birth certificate, which is a public document. (emphasis
ours)[18]
Furthermore, it is well-settled that a record of birth is merely a
prima facie evidence of the facts contained therein.[19] It is not
conclusive evidence of the truthfulness of the statements made there by
the interested parties.[20] Following the logic of Benitez, respondent
Angelina and her co-defendants in SD-857 should have adduced
evidence of her adoption, in view of the contents of her birth certificate.
The records, however, are bereft of any such evidence.

There are several parallels between this case and Benitez-Badua that are
simply too compelling to ignore. First, both Benitez-Badua and
respondent Angelina submitted birth certificates as evidence of filiation.
Second, both claimed to be children of parents relatively advanced in
age. Third, both claimed to have been born after their alleged parents
had lived together childless for several years.
There are, however, also crucial differences between Benitez-Badua and
this case which ineluctably support the conclusion that respondent
Angelina was not Gonzales daughter, whether illegitimate or adopted.
Gonzales, unlike Benitez-Baduas alleged mother Chipongian, was not
only 36 years old but 44 years old, and on the verge of menopause[21]
at the time of the alleged birth. Unlike Chipongian who had been
married to Vicente Benitez for only 10 years, Gonzales had been living
childless with Villanueva for 20 years. Under the circumstances, we
hold that it was not sufficiently established that respondent Angelina
was Gonzales biological daughter, nor even her adopted daughter. Thus,
she cannot inherit from Gonzales. Since she could not have validly
participated in Gonzales estate, the extrajudicial partition which she
executed with Villanueva on August 8, 1980 was invalid.
Finally, we come to the question of whether or not the properties

acquired by Gonzales and Villanueva during their cohabitation were
equally owned by them. According to the trial court in SD-857,[22]
Gonzales and Villanueva lived together without the benefit of marriage
and therefore their property relations were governed by Article 144 of
the Civil Code:
Art. 144. When a man and a woman live together as husband and wife, but they are not
married, or their marriage is void from the beginning, the property acquired by either or both
of them through their work or industry or their wages and salaries shall be governed by the
rules on co-ownership.
However, the contending parties agreed that the relationship of
Villanueva and Gonzales was adulterous, at least until the death of
Amanda Musngi, Villanuevas legal wife, on April 20, 1963. In their
appeal brief, petitioners made the following admission:
From 1927 until her death, Pacita [Gonzales] lived together with defendant Romualdo
Villanueva (Romualdo) as husband and wife without the benefit of marriage. Earlier, or
sometime in 1913 or 1914, Romualdo was married to Amanda Musngi (or Amanda).
Amanda died on April 20, 1963.[23] (emphasis supplied)
Respondent Angelina, in her memorandum in SD-857, actually agreed
with petitioners on the nature of Villanuevas relationship with Gonzales:
[24]
While Romualdo Villanueva claimed that he and Pacita C. Gonzales lived as husband and
wife and that they were married, it turned out that he was not legally married to the latter,
for then, his marriage in the year 1927, was still subsisting with one Amanda Musngi.
(emphasis supplied)
Because the cohabitation of Villanueva and Gonzales from 1927 to 1963
was adulterous, their property relations during those 36 years were not
governed by Article 144 of the Civil Code which applies only if the couple
living together is not in any way incapacitated from getting married.[25]
According to the doctrine laid down by Juaniza v. Jose,[26] no co-
ownership exists between parties to an adulterous relationship. In
Agapay v. Palang,[27] we expounded on this doctrine by declaring that
in such a relationship, it is necessary for each of the partners to prove
his or her actual contribution to the acquisition of property in order to
be able to lay claim to any portion of it. Presumptions of co-ownership
and equal contribution do not apply.
In Agapay, Miguel Palang and his paramour Erlinda Agapay
bought a parcel of riceland in Pangasinan which they registered in their
names. However, because Agapay failed to prove that she contributed
money to the purchase price of the riceland, she could not rightfully
claim co-ownership over the same.
Here, the records show only four properties acquired by Villanueva and
Gonzales between 1927 and 1963 which they registered in both their
names.[28] Following Agapay, these can only be apportioned according
to the actual contributions of each. Unfortunately, the records are
devoid of any evidence that Gonzales contributed anything to the
acquisition of these properties. Petitioners merely asserted that she

acquired these properties through her own industry[29] without a shred
of evidence to support the allegation. On the other hand, it was clearly
demonstrated that Villanueva was the municipal treasurer of Talavera
for many years and therefore the lone breadwinner. In accordance with
Agapay, none of these four parcels of land should accrue to petitioners.
There is only one parcel of land, covered by Transfer Certificate of Title
(TCT) No. NT-26670,[30] registered solely in Gonzales name, which was
acquired between 1927 and 1963.[31] This fact of registration created a
conclusiveness of title in favor of the person in whose name it was
registered.[32] In SD-857, although Villanueva sought to prove that he
alone had purchased the properties and that only he could have done so
during the period of cohabitation (since he was the sole breadwinner),
he never actually challenged the validity of the registration in her name.
Thus the efficacy of the title in Gonzales name remained unrebutted. As
Gonzales sole property, this should accrue entirely to her heirs.
The only property acquired after Musngis death in 1963 and registered
in the names of both Villanueva and Gonzales was Lot 3-A covered by
TCT No. NT-51899.[33] This was governed by the rules on co-ownership
pursuant to Article 144 of the Civil Code. Half of it should pertain to
Gonzales heirs and the other half, to Villanueva.

The rest of the properties registered solely in Gonzales name were
also acquired after the death of Amanda Musngi in 1963. The records
show that the subdivision lots situated in Talavera, Nueva Ecija covered
by TCTs Nos. 106813 to 106931 were acquired in 1971.[34] These
properties were governed by co-ownership under Article 144 of the Civil
Code. Again, half should accrue to Gonzales heirs and the other half, to
Villanueva.
Significantly, the trial court in SD-857 did not establish the exact
relationship between petitioners and Gonzales, a relationship
defendants therein (now respondents) vigorously denied. In view of this,
there is a need to remand the case to the court of origin for the proper
determination and identification of Gonzales heirs.
WHEREFORE, the petition is hereby GRANTED. The decision and
resolution of the Court of Appeals in CA-G.R. CV No. 51449 are reversed
and set aside, and a new one entered ANNULLING the deed of
extrajudicial partition with sale and REMANDING the case to the court
of origin for the determination and identification of Pacita Gonzales heirs
and the corresponding partition of her estate.
SO ORDERED.

SUPREME COURT
Manila
EN BANC
G.R. No. L-4656 November 18, 1912
RICARDO PARDELL Y CRUZ and
VICENTA ORTIZ Y FELIN DE PARDELL, plaintiffs-appellees,
vs.
GASPAR DE BARTOLOME Y ESCRIBANO and
MATILDE ORTIZ Y FELIN DE BARTOLOME, defendants-appellants.
Gaspar de Bartolome, in his own behalf.
B. Gimenez Zoboli, for appellees.
TORRES, J.:
This is an appeal by bill of exceptions, from the judgment of October 5, 1907, whereby the Honorable
Dionisio Chanco, judge, absolved the defendants from the complaint, and the plaintiff from a
counterclaim, without special finding as to costs.
Counsel for the spouses Ricardo y Cruz and Vicente Ortiz y Felin de Pardell, the first of whom, absent
in Spain by reason of his employment, conferred upon the second sufficient and ample powers to
appear before the courts of justice, on June 8, 1905, in his written complaint, alleged that the plaintiff,
Vicente Ortiz, and the defendant, Matilde Ortiz, are the duly recognized natural daughters of the
spouses Miguel Ortiz and Calixta Felin y Paula who died in Vigan, Ilocos Sur, in 1875 and 1882,
respectively; that Calixta Felin, prior to her death, executed on August 17, 1876, a nuncupative will in
Vigan whereby she made her four children, named Manuel, Francisca, Vicenta, and Matilde, surnamed
Ortiz y Felin, her sole and universal heirs of all her property; that, of the persons enumerated, Manuel
died before his mother and Francisca a few years after her death, leaving no heirs by force of law, and
therefore the only existing heirs of the said testatrix are the plaintiff Vicenta Ortiz and the defendant
Matilde Ortiz; that, aside from some personal property and jewelry already divided among the heirs,
the testatrix possessed, at the time of the execution of her will, and left at her death the real properties
which, with their respective cash values, are as follows:
1. A house of strong material, with the lot on which it is built, situated on Escolta
P6,000.00
Street, Vigan, and valued at
2. A house of mixed material, with the lot on which it stands, at No. 88
1,500.00
Washington Street, Vigan; valued at
3. A lot on Magallanes Street, Vigan; valued at 100.00
4. A parcel of rice land, situated in the barrio of San Julian, Vigan; valued at 60.00
5. A parcel of rice land in the pueblo of Santa Lucia; valued at 86.00
6. Three parcels of land in the pueblo of Candon; valued at 150.00
Total 7,896.00
That, on or about the first months of the year 1888, the defendants, without judicial authorization, nor
friendly or extrajudicial agreement, took upon themselves the administration and enjoyment of the said
properties and collected the rents, fruits, and products thereof, to the serious detriment of the plaintiffs'
interest; that, notwithstanding the different and repeated demands extrajudicially made upon Matilde
Ortiz to divide the aforementioned properties with the plaintiff Vicente and to deliver to the latter the
one-half thereof, together with one-half of the fruits and rents collected therefrom, the said defendant
and her husband, the self-styled administrator of the properties mentioned, had been delaying the
partition and delivery of the said properties by means of unkept promises and other excuses; and that
the plaintiffs, on account of the extraordinary delay in the delivery of one-half of said properties, or
their value in cash, as the case might be, had suffered losses and damages in the sum of P8,000. Said
counsel for the plaintiffs therefore asked that judgment be rendered by sentencing the defendants,
Gaspar de Bartolome, and Matilde Ortiz Felin de Bartolome, to restore and deliver to the plaintiffs one-
half of the total value in cash, according to appraisal, of the undivided property specified, which one-
half amounted approximately to P3,948, or if deemed proper, to recognize the plaintiff Vicenta Ortiz to
be vested with the full and absolute right of ownership to the said undivided one-half of the properties
in question, as universal testamentary heir thereof together with the defendant Matilde Ortiz, to
indemnify the plaintiffs in the sum of P8,000, for losses and damages, and to pay the costs.
Counsel for the defendants, in his answer denied the facts alleged in paragraphs 1, 4, 6, 7, and 8
thereof, inasmuch as, upon the death of the litigating sister's brother Manuel, their mother, who was
still living, was his heir by force of law, and the defendants had never refused to give to the plaintiff
Vicente Ortiz her share of the said properties; and stated that he admitted the facts alleged in paragraph
2, provided it be understood, however, that the surname of the defendant's mother was Felin, and not
Feliu, and that Miguel Ortiz died in Spain, and not in Vigan; that he also admitted paragraph 3 of the
complaint, with the difference that the said surname should be Felin, and likewise paragraph 5, except
the part thereof relating to the personal property and the jewelry, since the latter had not yet been
divided; that the said jewelry was in the possession of the plaintiffs and consisted of: one Lozada gold
chronometer watch with a chain in the form of a bridle curb and a watch charm consisting of the
engraving of a postage stamp on a stone mounted in gold and bearing the initials M. O., a pair of cuff
buttons made of gold coins, four small gold buttons, two finger rings, another with the initials M. O.,
and a gold bracelet; and that the defendants were willing to deliver to the plaintiffs, in conformity with
their petitions, one-half of the total value in cash, according to appraisement, of the undivided real
properties specified in paragraph 5, which half amounted to P3,948.
In a special defense said counsel alleged that the defendants had never refused to divide the said
property and had in fact several years before solicited the partition of the same; that, from 1886 to
1901, inclusive, there was collected from the property on Calle Escolta the sum of 288 pesos, besides a
few other small amounts derived from other sources, which were delivered to the plaintiffs with other
larger amounts, in 1891, and from the property on Calle Washington, called La Quinta, 990.95 pesos,
which proceeds, added together, made a total of 1,278.95 pesos, saving error or omission; that, between
the years abovementioned, Escolta, and that on Calle Washington, La Quinta, 376.33, which made a
total of 1,141.71, saving error or omission; that, in 1897, the work of reconstruction was begun of the
house on Calle Escolta, which been destroyed by an earthquake, which work was not finished until
1903 and required an expenditure on the part of the defendant Matilde Ortiz, of 5,091.52 pesos; that all
the collections made up to August 1, 1905, including the rent from the stores, amounted to only
P3,654.15, and the expenses, to P6,252.32, there being, consequently, a balance of P2,598.17, which
divided between the sisters, the plaintiff and the defendant, would make the latter's share P1,299.08;
that, as shown by the papers kept by the plaintiffs, in the year 1891 the defendant Bartolome presented
to the plaintiffs a statement in settlements of accounts, and delivered to the person duly authorized by
the latter for the purpose, the sum of P2,606.29, which the said settlement showed was owing his
principals, from various sources; that, the defendant Bartolome having been the administrator of the
undivided property claimed by the plaintiffs, the latter were owing the former legal remuneration of the
percentage allowed by law for administration; and that the defendants were willing to pay the sum of
P3,948, one-half of the total value of the said properties, deducting therefrom the amount found to be
owing them by the plaintiffs, and asked that judgment be rendered in their favor to enable them to
recover from the latter that amount, together with the costs and expenses of the suit.
The defendants, in their counter claim, repeated each and all of the allegations contained in each of the
paragraphs of section 10 of their answer; that the plaintiffs were obliged to pay to the administrator of
the said property the remuneration allowed him by law; that, as the revenues collected by the
defendants amounted to no more than P3,654.15 and the expenditures incurred by them, to P6,252.32,
it followed that the plaintiffs owed the defendants P1,299.08, that is one-half of the difference between
the amount collected from and that extended on the properties, and asked that judgment be therefore
rendered in their behalf to enable them to collect this sum from the plaintiffs, Ricardo Pardell and
Vicenta Ortiz, with legal interest thereon from December 7, 1904, the date when the accounts were
rendered, together with the sums to which the defendant Bartolome was entitled for the administration
of the undivided properties in question.
By a written motion of August 21, 1905, counsel for the plaintiffs requested permission to amend the
complaint by inserting immediately after the words "or respective appraisal," fifth line of paragraph 5,
the phrase "in cash in accordance with the assessed value," and likewise further to amend the same, in
paragraph 6 thereof, by substituting the following word in lieu of the petition for the remedy sought:
"By reason of all the foregoing, I beg the court to be pleased to render the judgment by sentencing the
defendants, Gaspar de Bartolome and Matilde Ortiz Felin de Bartolome, to restore and deliver to the
plaintiffs an exact one-half of the total vale of the undivided properties described in the complaint, such
value to be ascertained by the expert appraisal of two competent persons, one of whom shall be
appointed by the plaintiffs and the other by the defendants, and, in case of disagreement between these
two appointees such value shall be determined by a third expert appraiser appointed by the court, or, in
a proper case, by the price offered at public auction; or, in lieu thereof, it is requested that the court
recognize the plaintiff, Vicenta Ortiz, to be vested with a full and absolute right to an undivided one-
half of the said properties; furthermore, it is prayed that the plaintiffs be awarded an indemnity of
P8,000 for losses and damages, and the costs." Notwithstanding the opposition of the defendants, the
said amendment was admitted by the court and counsel for the defendants were allowed to a period of
three days within which to present a new answer. An exception was taken to this ruling.
The proper proceedings were had with reference to the valuation of the properties concerned in the
division sought and incidental issues were raised relative to the partition of some of them and their
award to one or the other of the parties. Due consideration was taken of the averments and statements
of both parties who agreed between themselves, before the court, that any of them might at any time
acquire, at the valuation fixed by the expert judicial appraiser, any of the properties in question, there
being none in existence excluded by the litigants. The court, therefore, by order of December 28, 1905,
ruled that the plaintiffs were entitled to acquire, at the valuation determined by the said expert
appraiser, the building known as La Quinta, the lot on which it stands and the warehouses and other
improvements comprised within the inclosed land, and the seeds lands situated in the pueblos of Vigan
and Santa Lucia; and that the defendants were likewise entitled to acquire the house on Calle Escolta,
the lot on Calle Magallanes, and the three parcels of land situated in the pueblo of Candon.
After this partition had been made counsel for the defendants, by a writing of March 8, 1906, set forth:
That, having petitioned for the appraisement of the properties in question for the purpose of their
partition, it was not to be understood that he desired from the exception duly entered to the ruling made
in the matter of the amendment to the complaint; that the properties retained by the defendants were
valued at P9,310, and those retained by the plaintiffs, at P2,885, one-half of which amounts each party
had to deliver to the other, as they were pro indiviso properties; that, therefore, the defendants had to
pay the plaintiffs the sum of P3,212.50, after deducting the amount which the plaintiffs were obliged to
deliver to the defendants, as one-half of the price of the properties retained by the former; that,
notwithstanding that the amount of the counterclaim for the expenses incurred in the reconstruction of
the pro indiviso property should be deducted from the sum which the defendants had to pay the
plaintiffs, the former, for the purpose of bringing the matter of the partition to a close, would deliver to
the latter, immediately upon the signing of the instrument of purchase and sale, the sum of P3,212.50,
which was one-half of the value of the properties alloted to the defendants; such delivery, however, was
not to be understood as a renouncement of the said counterclaim, but only as a means for the final
termination of the pro indiviso status of the property.
The case having been heard, the court on October 5, 1907, rendered judgment holding that the revenues
and the expenses were compensated by the residence enjoyed by the defendant party, that no losses or
damages were either caused or suffered, nor likewise any other expense besides those aforementioned,
and absolved the defendants from the complaint and the plaintiffs from the counterclaim, with no
special finding as to costs. An exception was taken to this judgment by counsel for the defendants who
moved for a new trial on the grounds that the evidence presented did not warrant the judgment rendered
and that the latter was contrary to law. This motion was denied, exception whereto was taken by said
counsel, who filed the proper bill of exceptions, and the same was approved and forwarded to the clerk
of this court, with a transcript of the evidence.
Both of the litigating sisters assented to a partition by halves of the property left in her will by their
mother at her death; in fact, during the course of this suit, proceedings were had, in accordance with the
agreement made, for the division between them of the said hereditary property of common ownership,
which division was recognized and approved in the findings of the trial court, as shown by the
judgment appealed from.
The issues raised by the parties, aside from said division made during the trial, and which have been
submitted to this court for decision, concern: (1) The indemnity claimed for losses and damages, which
the plaintiffs allege amount to P8,000, in addition to the rents which should have been derived from the
house on Calle Escolta, Vigan; (2) the payment by the plaintiffs to the defendants of the sum of
P1,299.08, demanded by way of counterclaim, together with legal interest thereon from December 7,
1904; (3) the payment to the husband of the defendant Matilde Ortiz, of a percentage claimed to be due
him as the administrator of the property of common ownership; (4) the division of certain jewelry in
the possession of the plaintiff Vicenta Ortiz; and (5) the petition that the amendment be held to have
been improperly admitted, which was made by the plaintiffs in their written motion of August 21, 1905,
against the opposition of the defendants, through which admission the latter were obliged to pay the
former P910.50.lawphil.net
Before entering upon an explanation of the propriety or impropriety of the claims made by both parties,
it is indispensable to state that the trial judge, in absolving the defendants from the complaint, held that
they had not caused losses and damages to the plaintiffs, and that the revenues and the expenses were
compensated, in view of the fact that the defendants had been living for several years in the Calle
Escolta house, which was pro indiviso property of joint ownership.
By this finding absolving the defendants from the complaint, and which was acquiesced in by the
plaintiffs who made no appeal therefrom, the first issue has been decided which was raised by the
plaintiffs, concerning the indemnity for losses and damages, wherein are comprised the rents which
should have been obtained from the upper story of the said house during the time it was occupied by
the defendants, Matilde Ortiz and her husband, Gaspar de Bartolome.
Notwithstanding the acquiescence on the part of the plaintiffs, assenting to the said finding whereby the
defendants were absolved from the complaint, yet, as such absolution is based on the compensation
established in the judgment of the trial court, between the amounts which each party is entitled to claim
from the other, it is imperative to determine whether the defendant Matilde Ortiz, as coowner of the
house on Calle Escolta, was entitled, with her husband, to reside therein, without paying to her
coowner, Vicenta Ortiz, who, during the greater part of the time, lived with her husband abroad, one-
half of the rents which the upper story would have produced, had it been rented to a stranger.
Article 394 of the Civil Code prescribes:
Each coowner may use the things owned in common, provided he uses them in accordance with
their object and in such manner as not to injure the interests of the community nor prevent the
coowners from utilizing them according to their rights.
Matilde Ortiz and her husband occupied the upper story, designed for use as a dwelling, in the house of
joint ownership; but the record shows no proof that, by so doing, the said Matilde occasioned any
detriment to the interest of the community property, nor that she prevented her sister Vicenta from
utilizing the said upper story according to her rights. It is to be noted that the stores of the lower floor
were rented and accounting of the rents was duly made to the plaintiffs.
Each coowner of realty held pro indiviso exercises his rights over the whole property and may use and
enjoy the same with no other limitation than that he shall not injure the interests of his coowners, for
the reason that, until a division be made, the respective part of each holder can not be determined and
every one of the coowners exercises, together with his other coparticipants, joint ownership over the
pro indiviso property, in addition to his use and enjoyment of the same.
As the hereditary properties of the joint ownership of the two sisters, Vicenta Ortiz, plaintiff, and
Matilde Ortiz, defendant, were situated in the Province of Ilocos Sur, and were in the care of the last
named, assisted by her husband, while the plaintiff Vicenta with her husband was residing outside of
the said province the greater part of the time between 1885 and 1905, when she left these Islands for
Spain, it is not at all strange that delays and difficulties should have attended the efforts made to collect
the rents and proceeds from the property held in common and to obtain a partition of the latter,
especially during several years when, owing to the insurrection, the country was in a turmoil; and for
this reason, aside from that founded on the right of coownership of the defendants, who took upon
themselves the administration and care of the properties of joint tenancy for purposes of their
preservation and improvement, these latter are not obliged to pay to the plaintiff Vicenta one-half of the
rents which might have been derived from the upper of the story of the said house on Calle Escolta,
and, much less, because one of the living rooms and the storeroom thereof were used for the storage of
some belongings and effects of common ownership between the litigants. The defendant Matilde,
therefore, in occupying with her husband the upper floor of the said house, did not injure the interests
of her coowner, her sister Vicenta, nor did she prevent the latter from living therein, but merely
exercised a legitimate right pertaining to her as coowner of the property.
Notwithstanding the above statements relative to the joint-ownership rights which entitled the
defendants to live in the upper story of the said house, yet in view of the fact that the record shows it to
have been proved that the defendant Matilde's husband, Gaspar de Bartolome, occupied for four years a
room or a part of the lower floor of the same house on Calle Escolta, using it as an office for the justice
of the peace, a position which he held in the capital of that province, strict justice, requires that he pay
his sister-in-law, the plaintiff, one half of the monthly rent which the said quarters could have produced,
had they been leased to another person. The amount of such monthly rental is fixed at P16 in
accordance with the evidence shown in the record. This conclusion as to Bartolome's liability results
from the fact that, even as the husband of the defendant coowner of the property, he had no right to
occupy and use gratuitously the said part of the lower floor of the house in question, where he lived
with his wife, to the detriment of the plaintiff Vicenta who did not receive one-half of the rent which
those quarters could and should have produced, had they been occupied by a stranger, in the same
manner that rent was obtained from the rooms on the lower floor that were used as stores. Therefore,
the defendant Bartolome must pay to the plaintiff Vicenta P384, that is, one-half of P768, the total
amount of the rents which should have been obtained during four years from the quarters occupied as
an office by the justice of the peace of Vigan.
With respect to the second question submitted for decision to this court, relative to the payment of the
sum demanded as a counterclaim, it was admitted and proved in the present case that, as a result of a
serious earthquake on August 15, 1897, the said house on Calle Escolta was left in ruins and
uninhabitable, and that, for its reconstruction or repair, the defendants had to expend the sum of
P6,252.32. This expenditure, notwithstanding that it was impugned, during the trial, by the plaintiffs,
was duly proved by the evidence presented by the defendants. Evidence, unsuccessfully rebutted, was
also introduced which proved that the rents produced by all the rural and urban properties of common
ownership amounted, up to August 1, 1905, to the sum of P3,654.15 which, being applied toward the
cost of the repair work on the said house, leaves a balance of P2,598.17, the amount actually advanced
by the defendants, for the rents collected by them were not sufficient for the termination of all the work
undertaken on the said building, necessary for its complete repair and to replace it in a habitable
condition. It is therefore lawful and just that the plaintiff Vicenta Ortiz, who was willing to sell to her
sister Matilde for P1,500, her share in the house in question, when it was in a ruinous state, should pay
the defendants one-half of the amount expanded in the said repair work, since the building after
reconstruction was worth P9,000, according to expert appraisal. Consequently, the counterclaim made
by the defendants for the payment to them of the sum of P1,299.08, is a proper demand, though from
this sum a reduction must be made of P384, the amount of one-half of the rents which should have been
collected for the use of the quarters occupied by the justice of the peace, the payment of which is
incumbent upon the husband of the defendant Matilde, as aforesaid, and the balance remaining,
P915.08, is the amount which the plaintiff Vicenta must pay to the defendants.
The defendants claim to be entitled to the collection of legal interest on the amount of the counterclaim,
from December 7, 1904. This contention can not be sustained, inasmuch as, until this suit is finally
decided, it could not be known whether the plaintiffs would or would not be obliged to pay the sum
whatever in reimbursement of expenses incurred by the plaintiffs in the repair work on the said house
on Calle Escolta, whether or not the defendants, in turn, were entitled to collect any such amount, and,
finally, what the net sum would be which the plaintiff's might have to pay as reimbursement for one-
half of the expenditure made by the defendants. Until final disposal of the case, no such net sum can be
determined, nor until then can the debtor be deemed to be in arrears. In order that there be an obligation
to pay legal interest in connection with a matter at issue between the parties, it must be declared in a
judicial decision from what date the interest will be due on the principal concerned in the suit. This rule
has been established by the decisions of the supreme court of Spain, in reference to articles 1108, 1109,
and 1110 of the Civil Code, reference on April 24, 1867, November 19, 1869, and February 22, 1901.
With regard to the percentage, as remuneration claimed by the husband of the defendant Matilde for his
administration of the property of common ownership, inasmuch as no stipulation whatever was made in
the matter by and between him and his sister-in-law, the said defendant, the claimant is not entitled to
the payment of any remuneration whatsoever. Of his own accord and as an officious manager, he
administered the said pro indiviso property, one-half of which belonged to his wife who held it in joint
tenancy, with his sister-in-law, and the law does not allow him any compensation as such voluntary
administrator. He is merely entitled to a reimbursement for such actual and necessary expenditures as
he may have made on the undivided properties and an indemnity for the damages he may have suffered
while acting in that capacity, since at all events it was his duty to care for and preserve the said
property, half of which belonged to his wife; and in exchange for the trouble occasioned him by the
administration of his sister-in-law's half of the said property, he with his wife resided in the upper story
of the house aforementioned, without payment of one-half of the rents said quarters might have
produced had they been leased to another person.
With respect to the division of certain jewelry, petitioned for by the defendants and appellants only in
their brief in this appeal, the record of the proceedings in the lower court does not show that the
allegation made by the plaintiff Vicenta is not true, to the effect that the deceased mother of the litigant
sisters disposed of this jewelry during her lifetime, because, had she not done so, the will made by the
said deceased would have been exhibited in which the said jewelry would have been mentioned, at
least it would have been proved that the articles in question came into the possession of the plaintiff
Vicenta without the expressed desire and the consent of the deceased mother of the said sisters, for the
gift of this jewelry was previously assailed in the courts, without success; therefore, and in view of its
inconsiderable value, there is no reason for holding that the said gift was not made.
As regards the collection of the sum of P910.50, which is the difference between the assessed value of
the undivided real properties and the price of the same as determined by the judicial expert appraiser, it
is shown by the record that the ruling of the trial judge admitting the amendment to the original
complaint, is in accord with the law and principles of justice, for the reason that any of the coowners of
a pro indiviso property, subject to division or sale, is entitled to petition for its valuation by competent
expert appraisers. Such valuation is not prejudicial to any of the joint owners, but is beneficial to their
interests, considering that, as a general rule, the assessed value of a building or a parcel of realty is less
than the actual real value of the property, and this being appraiser to determine, in conjunction with the
one selected by the plaintiffs, the value of the properties of joint ownership. These two experts took
part in the latter proceedings of the suit until finally, and during the course of the latter, the litigating
parties agreed to an amicable division of the pro indiviso hereditary property, in accordance with the
price fixed by the judicial expert appraiser appointed as a third party, in view of the disagreement
between and nonconformity of the appraisers chosen by the litigants. Therefore it is improper now to
claim a right to the collection of the said sum, the difference between the assessed value and that fixed
by the judicial expert appraiser, for the reason that the increase in price, as determined by this latter
appraisal, redounded to the benefit of both parties.
In consideration of the foregoing, whereby the errors assigned to the lower court have been duly
refuted, it is our opinion that, with a partial reversal of the judgment appealed from, in so far as it
absolves the plaintiffs from the counterclaim presented by the defendants, we should and hereby do
sentence the plaintiffs to the payment of the sum of P915.08, the balance of the sum claimed by the
defendants as a balance of the one-half of the amount which the defendants advanced for the
reconstruction or repair of the Calle Escolta house, after deducting from the total of such sum claimed
by the latter the amount of P384 which Gaspar de Bartolome, the husband of the defendant Matilde,
should have paid as one-half of the rents due for his occupation of the quarters on the lower floor of the
said house as an office for the justice of the peace court of Vigan; and we further find: (1) That the
defendants are not obliged to pay one-half of the rents which could have been obtained from the upper
story of the said house; (2) that the plaintiffs can not be compelled to pay the legal interest from
December 7, 1904, on the sum expanded in the reconstruction of the aforementioned house, but only
the interest fixed by law, at the rate of 6 per cent per annum, from the date of the judgment to be
rendered in accordance with this decision; (3) that the husband of the defendant Matilde Ortiz is not
entitled to any remuneration for the administration of the pro indiviso property belonging to both
parties; (4) that, neither is he entitled to collect from the plaintiffs the sum of P910.50, the difference
between the assessed valuation and the price set by the expert appraisal solicited by the plaintiffs in
their amendment to the complaint; and, (5) that no participation shall be made of jewelry
aforementioned now in the possession of the plaintiff Vicenta Ortiz. The said judgment, as relates to the
points appealed, is affirmed, in so far as its findings agree with those of this decision, and is reversed,
in so far as they do not. No special finding is made regarding the costs of both instances. So ordered.
SUPREME COURT
Manila
EN BANC
G.R. No. L-32047 November 1, 1930
MANUEL MELENCIO, MARIANO MELENCIO, PURA MELENCIO, and CARIDAD
MELENCIO, plaintiffs-appellants,
vs.
DY TIAO LAY, defendant-appellee.
Jose V. Valladolid, Jose P. Melencio and Camus and Delgado for appellants.
Araneta and Zaragoza for appellee.
OSTRAND, J.:
On August 1,1927, the plaintiffs, Manuel, Mariano, Pura and Caridad Melencio, brought the present
action against the defendant-appellee, Dy Tiao Lay for the recovery of the possession of a parcel of
land situated in the town of Cabanatuan, Nueva Ecija, and containing an area of 4,628.25 square
meters. The plaintiffs further demand a monthly rental of P300 for the use and occupation of the parcel
from May, 1926, until the date of the surrender to them of the possession thereof; and that if it is found
that the said appellee was occupying the said parcel of land by virtue of a contract of lease, such
contract should be declared null and void for lack of consent, concurrence, and ratification by the
owners thereof.
In his answer, the defendant pleaded the general issue, and as special defenses, he alleged in substance
that he was occupying the said tract of land by virtue of a contract of lease executed on July 24,1905, in
favor of his predecessor in interest, by Ruperta Garcia, Pedro Melencio, Juliana Melencio, and Ruperta
Melencio under the terms specified therein, and which contract is still in force; that Liberata
Macapagal, the mother of the plaintiffs, in her capacity as judicial administratrix of the estate of Ramon
Melencio, one of the original coowners of the parcel of land in question, actually recognized and
ratified the existence and validity of the contract aforesaid by virtue of the execution of a public
document by her on or about November 27,1920, and by collecting from the assignees of the original
lessee the monthly rent for the premises until April 30, 1926; and that said defendant deposits with the
clerk of court the sum of P20.20 every month as rent thereof and that as a counterclaim, he seeks the
recovery of P272 for goods and money delivered by him to the plaintiffs.
The plaintiffs filed a reply to the answer alleging, among other things, that Ruperta Garcia was not one
of the coowners of the land in question; that the person who signed the alleged contract of lease never
represented themselves as being the sole and exclusive owners of the land subject to the lease as
alleged by the defendant in his answer; that the said contract of lease of July 24,1905, is null and void
for being executed without the intervention and consent of two coowners, Ramon Melencio and Jose P.
Melencio, and without the marital consent of the husbands of Juliana and Ruperta Melencio; that the
lessee has repeatedly violated the terms and conditions of the said contract; and that Liberata
Macapagal, in her capacity as administratrix of the property of her deceased husband, could not
lawfully and legally execute a contract of lease with the conditions and terms similar to that of the one
under consideration, and that from this it follows that she could not ratify the said lease as claimed by
the defendant.
On January 21,1928, Liberata Macapagal Viuda de Melencio, duly appointed and qualified as
administratrix of the estate of her deceased husband, Ramon Melencio, filed a petition praying to be
allowed to join the plaintiffs as party to the present case, which petition was granted in open court on
January 31,1928. Her amended complaint of intervention of February 14,1928, contains allegations
similar to those alleged in the complaint of the original plaintiffs, and she further alleges that the
defendant-appellee has occupied the land in question ever since November, 1920, under and by virtue
of a verbal contract of lease for a term from month to month. To this complaint of intervention, the
defendant-appellee filed an answer reproducing the allegations contained in his answer reproducing the
allegations contained in his answer to the complaint of the original plaintiffs and setting up prescription
as a further special defense.
It appears from the evidence that the land in question was originally owned by one Julian Melencio. He
died prior to the year 1905 leaving his widow, Ruperta Garcia, and his five children, Juliana, Ramon,
Ruperta, Pedro R., and Emilio Melencio. Emilio Melencio also died before 1905, his son Jose P.
Melencio, then a minor, succeeding to his interest in the said parcel of land by representation. A
question has been raised as to whether the land was community property of the marriage of Julian
Melencio and Ruperta Garcia, but the evidence is practically undisputed that Ruperta Garcia in reality
held nothing but a widow's usufruct in the land.
On July 24,1905, Ruperta Garcia, Pedro R. Melencio, Juliana Melencio, and Ruperta Melencio
executed a contract of lease of the land in favor of one Yap Kui Chin, but neither Jose P. Melencio nor
Ramon Melencio were mentioned in the lease. The term of the lease was for twenty years, extendible
for a like period at the option of the lessee. The purpose of the lessee was to establish a rice mill on the
land, with the necessary buildings for warehouses and for quarters for the employees, and it was further
stipulated that at the termination of the original period of the lease, or the extension therof, the lessors
might purchase all the buildings and improvements on the land at a price to be fixed by experts
appointed by the parties, but that if the lessors should fail to take advantage of that privilege, the lease
would continue for another and further period of twenty years. The document was duly acknowledged
but was never recorded with the register of deeds. The original rent agreed upon was P25 per month,
but by reason of the construction of a street through the land, the monthly rent was reduced of P20.20.
Shortly after the execution of the lease, the lessee took possession of the parcel in question and erected
the mill as well as the necessary buildings, and it appears that in matters pertaining to the lease, he dealt
with Pedro R. Melencio, who from 1905 until his death in 1920, acted as manager of the property held
in common by the heirs of Julian Melencio and Ruperta Garcia. The original lessee, Yap Kui Chin, died
in 1912, and the lease, as well as the other property, was transferred to Uy Eng Jui who again
transferred it to Uy Eng Jui & Co., an unregistered partnership. Finally the lease came into the hands of
Dy Tiao Lay, the herein defendant-appellee.
Ramon Melencio died in 1914, and his widow, Liberata Macapagal, was appointed administratrix of his
estate. In 1913 the land which includes the parcel in question was registered under the Torrens system.
The lease was not mentioned in the certificate of title, but it was stated that one house and three
warehouses on the land were the property of Yap Kui Chin.
In 1920 the heirs of Julian Melencio made an extrajudicial partition of parts of the inheritance, and
among other things, the land here in question fell to the share of the children of Ramon Melencio, who
are the original plaintiffs in the present case. Their mother, Liberata Macapagal, as administratrix of the
estate of her deceased husband, Ramon, collected the rent for the lease at the rate of P20.20 per month
until the month of May,1926, when she demanded of the lessee that the rent should be increased to
P300 per month, and she was then informed by the defendant that a written lease existed and that
according to the terms thereof, the defendant was entitled to an extension of the lease at the original
rental. The plaintiffs insisted that they never had any knowledge of the existence of such a contract of
lease and maintained that in such case the lease was executed without their consent and was void. It
may be noted that upon careful search, a copy of the contract of lease was found among the papers of
the deceased Pedro R, Melencio. Thereafter the present action was brought to set aside the lease and to
recover possession of the land. Upon trial, the court below rendered judgment in favor of the defendant
declaring the lease valid and ordering the plaintiffs to pay the P272 demanded by the defendant in his
counterclaim. From this judgment the plaintiffs appealed.
The contention of the appellants is that the aforesaid contract of lease (Exhibit C) is null and void for
the following reasons:
1. That Exhibit C calls for an alteration of the property in question and therefore ought to have
been signed by all the coowners as by law required in the premises.
2. That the validity and fulfillment of the said agreement of lease were made to depend upon the
will of the lessee exclusively.
3. That the said contract of lease being for a term of over six years, the same is null and void
pursuant to the provision of article 1548 of the Civil Code.
4. That the duration of the same is unreasonably long, thus being against public policy.
5. That the defendant-appellee and his predecessors in interest repeatedly violated the provisions
of the agreement.
The first proposition is based on article 397 of the Civil Code which provides that "none of the owners
shall, without the consent of the others, make any alterations in the common property even though such
alterations might be advantageous to all." We do not think that the alterations are of sufficient
importance to nullify the lease, especially so since none of the coowners objected to such alterations
until over twenty years after the execution of the contract of lease. The decision of this court in the case
of Enriquez vs. A. S. Watson and Co. (22 Phil., 623), contains a full discussion of the effect of
alterations of leased community property, and no further discussion upon the point need here be
considered.
The second proposition is likewise of little merit. Under the circumstances, the provision in the contract
that the lessee, at any time before he erected any building on the land, might rescind the lease, can
hardly be regarded as a violation of article 1256 of the Civil Code.
The third and fourth proposition are, in our opinion, determinative of the controversy. The court below
based its decision principally on the case of Enriquez vs. A.S. Watson & Co. (22 Phil., 623), and on the
resolution of the Direccion General de los Registros dated April 26,1907. (Jurisprudencia Civil,
vol.107, p. 222.) An examination of the Enriquez case will show that it differs materially from the
present. In that case all of the coowners of a lot and building executed a contract of lease of the
property for the term of eighteen years in favor of A. S. Watson & Co.; one of the owners was minor,
but he was represented by his legally appointed guardian, and the action of the latter in signing the
lease on behalf of the minor was formally approved by the Court of First Instance. In the present case
only a small majority of the coowners executed the lease here in question, and according to the terms of
the contract the lease might be given a duration of sixty years; that is widely different from a lease
granted by all of the coowners for a term of only eighteen years.
The resolution of April 26,1907, is more in point. It relates to the inscription or registration of a
contract of lease of some pasture grounds. The majority of the coowners of the property executed the
lease for the term of twelve years but when the lessees presented the lease for inscription in the registry
of property, the registrar denied the inscription on the ground that the term of the lease exceeded six
years and that therefore the majority of the coowners lacked authority to grant the lease. The Direccion
General de los Registros held that the contract of lease for a period exceeding six years, constitutes a
real right subject to registry and that the lease in question was valid.
The conclusions reached by the Direccion General led to considerable criticism and have been
overruled by a decision of the Supreme Court of Spain dated June 1,1909. In that decision the court
made the following statement of the case (translation):
The joint owners of 511 out of 1,000 parts of the realty denominated El Mortero, leased out the
whole property for twelve years to Doña Josefa de la Rosa; whereupon the Count and Countess
Trespalacios together with other coowners brought this suit to annul the lease and, in view of
the fact that the land was indivisible, prayed for its sale by public auction and the distribution of
the price so obtained; they alleged that they neither took part nor consented to the lease; that the
decision of the majority of part owners referred to in article 398 of the Code, implies a common
deliberation on the step to be taken , for to do without it, would, even more than to do without
the minority, be nothing less than plunder; and that, even if this deliberation were not absolutely
necessary, the power of the majority would still be confined to decisions touching the
management and enjoyment of the common property, and would not include acts of ownership,
such as a lease for twelve years, which according to the Mortgage Law gives rise to a real right,
which must be recorded, and which can be performed only by the owners of the property leased.
The part owners who had executed the contract prayed in reconvention that it held valid for all
the owners in common, and if this could not be, then for all those who had signed it, and for the
rest, for the period of six years; and the Audiencia of Caceres having rendered judgment holding
the contract null and void, and ordering the sale of the realty and the distribution of the price,
the defendants appealed alleging under the third and fourth assignments of error, that the
judgment was a violation of article 398 of the Civil Code, which is absolute and sets no limit of
time for the efficacy of the decisions arrived at by the majority of the part owners for the
enjoyment of the common property, citing the decisions of June 30th, 1897, of July 8th,1902,
and of October 30th, 1907; under the fifth assignments of error the appellants contended that in
including joint owners among those referred to in said article, which sets certain limits to the
power of leasing, in the course of the management of another's property, the court applied
article 1548 unduly; and by the seventh assignments of error, they maintained the judgment
appealed from also violated article 1727, providing that the principal is not bound where his
agent has acted beyond his authority; whence it may be inferred that if in order to hold the
contract null and void, the majority of the part owners are looked upon as managers or agents
exercising limited powers, it must at least be conceded that in so far as the act in question lies
within the scope of their powers, it is valid; the contract cannot be annulled in toto.
The Supreme Court held that the appeal from the decision of the Audiencia of Caceres was not well
taken and expressed the following consideranda:
Considering that, although as a rule the contract of lease constitutes an act of management, as
this court has several times held, cases may yet arise, either owing to the nature of the subject
matter, or to the period of duration, which may render it imperative to record the contract in the
registry of property, in pursuance of the Mortgage Law, where the contract of lease may give
rise to a real right in favor of the lessee, and it would then constitute such a sundering of the
ownership as transcends mere management; in such cases it must of necessity be recognized
that the part owners representing the greater portion of the property held in common have no
power to lease said property for a longer period than six years without the consent of all the
coowners, whose propriety rights, expressly recognized by the law, would by contracts of long
duration be restricted or annulled; and as under article 1548 of the Civil Code such contracts
cannot be entered into by the husband with respect to his wife's property, by the parent or
guardian with respect to that of the child or ward, and by the manager in default of special
power, since the contract of lease only produces personal obligations, and cannot without the
consent of all persons interested or express authority from the owner, be extended to include
stipulations which may alter its character, changing it into a contract of partial alienation of the
property leased;
Considering that, applying this doctrine to the case before us, one of the grounds upon which
the judgment appealed from, denying the validity of the lease made by the majority of the part
owners of the pasture land El Mortero is based, must be upheld; to wit, that the period of
duration is twelve years and the consent of all the coowners has not been obtained; hence, the
third, fourth. and fifth assignments of error are without merit; firstly, because article 398 of the
Civil Code, alleged to have been violated, refers to acts decided upon by the majority of the part
owners, touching the management and enjoyment of the common property, and does not
contradict what we have stated in the foregoing paragraph; secondly because although the cases
cited were such as arose upon leases for more than six years, yet this point was not raised on
appeal, and could not therefore be passed upon; and thirdly, because it cannot be denied that
there is an analogy between a manager without special authority, who is forbidden by article
1548 of the Code to give a lease for a period of over six years, and the joint owners constituting
a legal majority, who may decide to lease out the indivisible property, with respect to the shares
of the other coowners; and having come to the conclusion that the contract is null and void,
there is no need to discuss the first two assignments of error which refer to another of the bases
adopted, however erroneously, by the trial court;
Considering that the sixth assignment of error is without merit, inasmuch as the joint ownership
of property is not a sort of agency and cannot be governed by the provisions relating to the latter
contract; whence, article 1727 of the Code alleged to have been violated, can no more be
applied, than, the question of the validity or nullity of the lease being raise, upon the contract as
celebrated, it would be allowable to modify a posteriori some one or other of the main
conditions stipulated, like that regarding the duration of the lease, for this would amount to a
novation; still less allowable would it be to authorize diverse periods for the different persons
unequally interested in the fulfillment.
Taking into consideration articles 398,1548, and 1713 of the Civil Code and following the aforesaid
decision of June 1,1909, we hold that the contract of lease here in question is null and void.
It has been suggested that by reason of prescription and by acceptance of benefits under the lease, the
plaintiffs are estopped to question the authority for making the lease.To this we may answer that the
burden of proof of prescription devolved upon the defendant and that as far as we can find, there is no
proof that Ramon Melencio and his successors ever had knowledge of the existence of the lease in
question prior to 1926. We cannot by mere suspicion conclude that they were informed of the existence
of the document and its terms; it must be remembered that under a strict interpretation of the terms of
the lease, the lessees could remain indefinitely in their tenancy unless the lessors could purchase the
mill and the buildings on the land. In such circumstances, better evidence than that presented by the
defendant in regard to the plaintiff's knowledge of the lease must be required.
The fact that Ramon during his lifetime received his share of the products of land owned in common
with his coheirs is not sufficient proof of knowledge of the existence of the contract of lease when it is
considered that the land in question was only a small portion of a large tract which Pedro R. Melencio
was administering in connection with other community property.
The appealed judgment as to the validity of the lease is therefore reversed, and it is ordered that the
possession of the land in controversy be delivered to the intervenor Liberata Macapagal in her capacity
as administratrix of the estate of the deceased Ramon Melencio. It is further ordered that the defendant
pay to said administratrix a monthly rent of P50 for the occupation of the land from May 1st, 1926,
until the land is delivered to the administratrix. The sum of P272 demanded by the defendant in his
counterclaim may be deducted from the total amount of the rent due and unpaid. The building erected
on the land by the defendant and his predecessors in interest may be removed by him, or otherwise
disposed of, within six months from the promulgation of this decision. Without costs. So ordered.
Avanceña, C.J., , Malcolm, Johns, Romualdez, and Villa-Real, JJ., concur.
Jonhson, J., I reserve my vote.
Separate Opinions
STREET and VILLAMOR, JJ., dissenting:

Although the name of Ramon Melencio, father of the plaintiffs in this action, was not in fact signed to
the lease in question, and the lease did not even so much as mentioned him as one of the coowners, the
undersigned are nevertheless of the opinion that Ramon Melencio, and his children after him, are
estopped from questioning said lease, for the reason that, from 1905 to the time of his death in 1914,
Ramon Melencio enjoyed the benefits of the lease, as did his widow and children after him until
May,1926, when the widow repudiated the lease, as a preliminary to the bringing of this action by the
plaintiffs. By their acceptance of the benefits of the lease over so long a period, the persons now
questioning the lease and their father, their predecessor in interest, are estopped to question the
authority for making the lease. This estopped cures the want of the special power contemplated in
article 1548 of the Civil Code.
In addition to the estopped arising from the acceptance of benefits under the lease, an estoppel further
arises from the fact that Ramon Melecio, during the years following the execution of the lease, stood by
and saw the lessees place upon the property improvements of a value of more than P100,000, for which
reason, also, equity will not permit the lease to be disturbed to the prejudice of the lessee.
To exhibit the foregoing proposition fully, it is necessary to understand the facts relative to the
controversy. These are substantially as follows:
The land covered by the original lease, having an area of some 6,000 square meters, is located in the
town of Cabanatuan and was formerly the property of one Julian Melencio, married to Ruperta Garcia.
After the death of Julian Melencio, his widow, Ruperta Garcia, united in 1905, with three of their
children, namely, Pedro R., Juliana, and Ruperta, in executing, in favor of Yap Kui Chin, as lessee, the
lease which is the subject of this controversy. The consideration mentioned in the lease was the sum
P25 per month. On August 2,1907, at the request of Pedro R. Melencio, another document was drawn
changing the superficial configuration of the leased land but preserving its original extension of 6,000
square meters. This change was made for the purpose of giving Pedro R. Melencio space upon which to
construct a house on the part segragated from the original mass. In 1915 a new street, passing through
the leased property, was opened in Cabanatuan; and Pedro R. Melencio, acting for the lessors, reduced
the monthly rent from P25 to P20, to correspond with the reduction in the area of the leased land
resulting from the occupation of part of it by the street.lawphil.net
At the time the lease was made there was living one Ramon Melencio, son of Julian Melencio and
Ruperta Garcia and brother of the heirs who signed the lease. Also before this time there had been
another brother named Emilio Melencio. But Emilio was dead and his only surviving son, Jose P.
Melencio, was a small boy then under the tutelage of his uncle Pedro R. Melencio. The lease referred to
is not and never has been questioned by any of the persons, or descendants of the persons, who signed
the instrument. Neither has it been questioned by Jose P. Melecio, son of Emilio. Nor was the lease
questioned in life by Ramon Melencio, who died in 1914; and the only persons raising a question as to
its validity are four of the five children of Ramon, the same being the plaintiffs in this case.
By series of changes, not, necessary to be here recounted, the rights of the original lessee became
vested in the defendant, Dy Tiao Lay. At the time of the institution of the present action the defendant,
Dy Tia lay, had a rice mill, consisting of valuable buildings and improvements, constructed on the land,
and valued, it is alleged, at P160,000; but during the time of the pendency of this action a fire occurred
which seems to have destroyed the mill and improvements with the exception of a camarin valued at
some P15,000.
In November, 1920, the children of Julian Melencio and Ruperta Garcia executed a partial extra-
judicial partition of the properties belonging to their father's estate; and the land covered by this lease
was assigned to Liberata Macapagal, widow of Ramon Melencio, in right of her deceased husband
Ramon and as representative of the children. It will be noted that the land encumbered by the lease was
thus assigned precisely to the family of the deceased brother, Ramon Melencio, who at the same time
was the sole living brother whose name was not signed to the lease.
At the time the lease was executed, Pedro R. Melencio was in fact the manager of the common
ancestral estate belonging to himself and his brothers and sisters; and he continued as such until 1920.
After the partition, or partial partition, of the fraternal estate in 1920, Liberata Macapagal Viuda de
Ramon Melencio succeeded to the office of manager, or guardian, of the estate of her children, at least
with respect to the parcel now in question.
It will be noted as an important fact that every dollar due as rent from the leased land was paid by the
lessee, from the time when rent first became due, and these payments were made first to Pedro R.
Melencio as manager of the common estate pertaining to himself and his brothers and sisters, until
1920, when the rents began to be paid to Liberata Macapagal in the right to herself and children. In
April, 1926, Liberata ceased to collect the rent, and in May, thereafter, she refused to accept payment of
the monthly instalment of rent then due. For this reason the defendant has been making a consignation
of the corresponding rent for the benefit of the lessors in the office of the provincial treasurer. No
question is made that during the life of Ramon Melencio he received his share of the monthly rental
from the property in question; nor is there any question that thereafter his widow and children received
their share of the same until the property was assigned in partition to Liberata Macapagal and her
children, after which they received all of the rent, until Liberata refused longer to accept it.
The undersigned concur in the proposition that the lease signed in 1905 was not per se binding on
Ramon Melencio, first, because he was not a party to that lease; and, secondly, because the making of a
lease for twenty years, extendible under certain circumstances for a second and third period of equal
duration, was an act of rigorous alienation and not a mere act of management and enjoyment such as is
contemplated in article 398 of the Civil Code. (Sentencia, June 1,1909; Ruiz, Cod. Civ., vol. 4. p. 502)
Neither do we pause to argue that the contract might have been considered valid under the doctrine of
this court stated in Eleizegui vs. Manila Lawn Tennis Club (2 Phil., 309). At any rate the lease did not
purport to bind Ramon, and he was not even mentioned therein as one of the coowners.
But it is to be noted that none of the parties signatory to the lease have at any time sought to abrogate
the contract; and some of the children of Ramon Melencio only are before the court as actors in this
case seeking to set the contract aside. Under these circumstances the undersigned are of the opinion
that Ramon Melencio was at the time of his death bound by the lease, from his having participated for
years in the benefits derived from the contract, and that his children, who derive their rights from him,
are likewise bound.
It is well established that an estate in land may be virtually transferred from one man to another without
a writing, by the failure of the owner to give notice of his title to the purchaser under circumstances
where the omission to do so would operate as a fraud (Kirk vs. Hamilton, 102 U. S., 68,77; 26 Law.
ed., 79). This doctrine is so universally accepted that a bare reference to general treatises on the subject
of estopped is necessary (10 R.C. L., p.694; 21 C. J., pp.1154, 1160, 1206, 1207, 1209); and the
estoppel is as effective with respect to a lease as it is with respect to a deed of absolute conveyance (21
C.J., 1213).
In the case before us Ramon Melencio lived in the town where the land covered by this lease was
located, and every time he went abroad he must have seen the valuable improvements which the
original lessee, or his successors in interest, were erecting and had erected upon part of the common
ancestral estate. But from the date the lease was executed until his death Ramon Melencio did nothing
except to receive such portion of the rent as pertained to him. Under these circumstances, even if his
brother Pedro R. Melencio had conveyed the property away by deed of absolute alienation, Ramon
would have been legally bound. It is but natural that so long as he lived after the lease was made, no
complaint was ever registered by him against its validity.
And if Ramon Melencio was estoppel, of course his children are estopped, for their rights are of a
purely derivative character. In the case before us a period of more than twenty-one years elapsed
between the time the lease was made and the date when it was first called in question by the widow.
But Manuel Melencio, the oldest of the heirs who are suing in this case, says that he did not know the
terms of the lease until a short while before this action was instituted, when he called upon the widow
of his uncle Pedro and found a copy of the lease after searching among his uncle's papers. It is not
surprising that this plaintiff, who was hardly more than a baby when the lease was made, should not
have known about the terms of the contract. But it was all the time safely kept among the papers of his
uncle Pedro, who, as already stated, was manager of the common estate of the brothers and sisters.
Ramon Melencio is now dead and of course cannot speak as to whether he knew the terms of the
agreement. But he should be presumed to have known its terms, because he was enjoying benefits from
month to month under it, and he had the means of knowledge immediately at hand, namely by recourse
to a trusted brother in whose custody the contract was preserved. In addition to this, we note that when
partition was effected about the year 1920 the fact that the property in question was subject to a lease in
favor of the defendant was noted in the document by which the property was assigned to Liberata
Macapagal and her children. The suggestion that the terms of the lease were unknown to the plaintiffs
is of little weight and of no legal merit. We note that the lease was never registered, but this fact makes
no difference in a lawsuit between the parties to the lease, or their successors in interest.
We are of the opinion that the judgment should be affirmed.
SUPREME COURT
Manila
EN BANC
G.R. No. L-3404 April 2, 1951
ANGELA I. TUASON, plaintiff-appellant,
vs.
ANTONIO TUASON, JR., and GREGORIO ARANETA, INC., defendants-appellees.
Alcuaz & Eiguren for appellant.
Araneta & Araneta for appellees.
MONTEMAYOR, J.:
In 1941 the sisters Angela I. Tuason and Nieves Tuason de Barreto and their brother Antonio Tuason
Jr., held a parcel of land with an area of 64,928.6 sq. m. covered by Certificate of Title No. 60911 in
Sampaloc, Manila, in common, each owning an undivided 1/3 portion. Nieves wanted and asked for a
partition of the common property, but failing in this, she offered to sell her 1/3 portion. The share of
Nieves was offered for sale to her sister and her brother but both declined to buy it. The offer was later
made to their mother but the old lady also declined to buy, saying that if the property later increased in
value, she might be suspected of having taken advantage of her daughter. Finally, the share of Nieves
was sold to Gregorio Araneta Inc., a domestic corporation, and a new Certificate of Title No. 61721
was issued in lieu of the old title No. 60911 covering the same property. The three co-owners agreed to
have the whole parcel subdivided into small lots and then sold, the proceeds of the sale to be later
divided among them. This agreement is embodied in a document (Exh. 6) entitled "Memorandum of
Agreement" consisting of ten pages, dated June 30, 1941.
Before, during and after the execution of this contract (Exh. 6), Atty. J. Antonio Araneta was acting as
the attorney-in-fact and lawyer of the two co-owners, Angela I. Tuason and her brother Antonio Tuason
Jr. At the same time he was a member of the Board of Director of the third co-owner, Araneta, Inc.
The pertinent terms of the contract (Exh. 6) may be briefly stated as follows: The three co-owners
agreed to improve the property by filling it and constructing roads and curbs on the same and then
subdivide it into small lots for sale. Araneta Inc. was to finance the whole development and
subdivision; it was prepare a schedule of prices and conditions of sale, subject to the subject to the
approval of the two other co-owners; it was invested with authority to sell the lots into which the
property was to be subdivided, and execute the corresponding contracts and deeds of sale; it was also to
pay the real estate taxes due on the property or of any portion thereof that remained unsold, the
expenses of surveying, improvements, etc., all advertising expenses, salaries of personnel,
commissions, office and legal expenses, including expenses in instituting all actions to eject all tenants
or occupants on the property; and it undertook the duty to furnish each of the two co-owners, Angela
and Antonio Tuason, copies of the subdivision plans and the monthly sales and rents and collections
made thereon. In return for all this undertaking and obligation assumed by Araneta Inc., particularly the
financial burden, it was to receive 50 per cent of the gross selling price of the lots, and any rents that
may be collected from the property, while in the process of sale, the remaining 50 per cent to be
divided in equal portions among the three co-owners so that each will receive 16.33 per cent of the
gross receipts.
Because of the importance of paragraphs 9, 11 and 15 of the contract (Exh. 6), for purposes of
reference we are reproducing them below:
(9) This contract shall remain in full force and effect during all the time that it may be necessary
for the PARTY OF THE SECOND PART to fully sell the said property in small and subdivided
lots and to fully collect the purchase prices due thereon; it being understood and agreed that said
lots may be rented while there are no purchasers thereof;
(11) The PARTY OF THE SECOND PART (meaning Araneta Inc.) is hereby given full power
and authority to sign for and in behalf of all the said co-owners of said property all contracts of
sale and deeds of sale of the lots into which this property might be subdivided; the powers
herein vested to the PARTY OF THE SECOND PART may, under its own responsibility and
risk, delegate any of its powers under this contract to any of its officers, employees or to third
persons;
(15) No co-owner of the property subject-matter of this contract shall sell, alienate or dispose of
his ownership, interest or participation therein without first giving preference to the other co-
owners to purchase and acquire the same under the same terms and conditions as those offered
by any other prospective purchaser. Should none of the co-owners of the property subject-matter
of this contract exercise the said preference to acquire or purchase the same, then such sale to a
third party shall be made subject to all the conditions, terms, and dispositions of this contract;
provided, the PARTIES OF THE FIRST PART (meaning Angela and Antonio) shall be bound
by this contract as long as the PARTY OF THE SECOND PART, namely, the GREGORIO
ARANETA, INC. is controlled by the members of the Araneta family, who are stockholders of
the said corporation at the time of the signing of this contract and/or their lawful heirs;
On September 16, 1944, Angela I. Tuason revoked the powers conferred on her attorney-in-fact and
lawyer, J. Antonio Araneta. Then in a letter dated October 19, 1946, Angela notified Araneta, Inc. that
because of alleged breach of the terms of the "Memorandum of Agreement" (Exh. 6) and abuse of
powers granted to it in the document, she had decided to rescind said contract and she asked that the
property held in common be partitioned. Later, on November 20, 1946, Angela filed a complaint in the
Court of First Instance of Manila asking the court to order the partition of the property in question and
that she be given 1/3 of the same including rents collected during the time that the same including rents
collected during the time that Araneta Inc., administered said property.
The suit was administered principally against Araneta, Inc. Plaintiff's brother, Antonio Tuason Jr., one
of the co-owners evidently did not agree to the suit and its purpose, for he evidently did not agree to the
suit and its purpose, for he joined Araneta, Inc. as a co-defendant. After hearing and after considering
the extensive evidence introduce, oral and documentary, the trial court presided over by Judge Emilio
Peña in a long and considered decision dismissed the complaint without pronouncement as to costs.
The plaintiff appealed from that decision, and because the property is valued at more than P50,000, the
appeal came directly to this Court.
Some of the reasons advanced by appellant to have the memorandum contract (Exh. 6) declared null
and void or rescinded are that she had been tricked into signing it; that she was given to understand by
Antonio Araneta acting as her attorney-in-fact and legal adviser that said contract would be similar to
another contract of subdivision of a parcel into lots and the sale thereof entered into by Gregorio
Araneta Inc., and the heirs of D. Tuason, Exhibit "L", but it turned out that the two contracts widely
differed from each other, the terms of contract Exh. "L" being relatively much more favorable to the
owners therein the less favorable to Araneta Inc.; that Atty. Antonio Araneta was more or less
disqualified to act as her legal adviser as he did because he was one of the officials of Araneta Inc., and
finally, that the defendant company has violated the terms of the contract (Exh. 6) by not previously
showing her the plans of the subdivision, the schedule of prices and conditions of the sale, in not
introducing the necessary improvements into the land and in not delivering to her her share of the
proceeds of the rents and sales.
We have examined Exh. "L" and compared the same with the contract (Exh. 6) and we agree with the
trial court that in the main the terms of both contracts are similar and practically the same. Moreover, as
correctly found by the trial court, the copies of both contracts were shown to the plaintiff Angela and
her husband, a broker, and both had every opportunity to go over and compare them and decide on the
advisability of or disadvantage in entering into the contract (Exh. 6); that although Atty. Antonio
Araneta was an official of the Araneta Inc.; being a member of the Board of Directors of the Company
at the time that Exhibit "6" was executed, he was not the party with which Angela contracted, and that
he committed no breach of trust. According to the evidence Araneta, the pertinent papers, and sent to
her checks covering her receive the same; and that as a matter of fact, at the time of the trial, Araneta
Inc., had spent about P117,000 in improvement and had received as proceeds on the sale of the lots the
respectable sum of P1,265,538.48. We quote with approval that portion of the decision appealed from
on these points:
The evidence in this case points to the fact that the actuations of J. Antonio Araneta in
connection with the execution of exhibit 6 by the parties, are above board. He committed
nothing that is violative of the fiduciary relationship existing between him and the plaintiff. The
act of J. Antonio Araneta in giving the plaintiff a copy of exhibit 6 before the same was
executed, constitutes a full disclosure of the facts, for said copy contains all that appears now in
exhibit 6.
Plaintiff charges the defendant Gregorio Araneta, Inc. with infringing the terms of the contract
in that the defendant corporation has failed (1) to make the necessary improvements on the
property as required by paragraphs 1 and 3 of the contract; (2) to submit to the plaintiff from
time to time schedule of prices and conditions under which the subdivided lots are to be sold;
and to furnish the plaintiff a copy of the subdivision plans, a copy of the monthly gross
collections from the sale of the property.
The Court finds from the evidence that he defendant Gregorio Araneta, Incorporated has
substantially complied with obligation imposed by the contract exhibit 6 in its paragraph 1, and
that for improvements alone, it has disbursed the amount of P117,167.09. It has likewise paid
taxes, commissions and other expenses incidental to its obligations as denied in the agreement.
With respect to the charged that Gregorio Araneta, Incorporated has failed to submit to plaintiff
a copy of the subdivision plains, list of prices and the conditions governing the sale of
subdivided lots, and monthly statement of collections form the sale of the lots, the Court is of
the opinion that it has no basis. The evidence shows that the defendant corporation submitted to
the plaintiff periodically all the data relative to prices and conditions of the sale of the
subdivided lots, together with the amount corresponding to her. But without any justifiable
reason, she refused to accept them. With the indifferent attitude adopted by the plaintiff, it was
thought useless for Gregorio Araneta, Incorporated to continue sending her statement of
accounts, checks and other things. She had shown on various occasions that she did not want to
have any further dealings with the said corporation. So, if the defendant corporation proceeded
with the sale of the subdivided lots without the approval of the plaintiff, it was because it was
under the correct impression that under the contract exhibit 6 the decision of the majority co-
owners is binding upon all the three.
The Court feels that recission of the contract exhibit 6 is not minor violations of the terms of the
agreement, the general rule is that "recission will not be permitted for a slight or casual breach
of the contract, but only for such breaches as are so substantial and fundamental as to defeat the
object of the parties in making the agreement" (Song Fo & Co. vs. Hawaiian-Philippine Co., 47
Phil. 821).
As regards improvements, the evidence shows that during the Japanese occupation from 1942 and up to
1946, the Araneta Inc. although willing to fill the land, was unable to obtain the equipment and gasoline
necessary for filling the low places within the parcel. As to sales, the evidence shows that Araneta Inc.
purposely stopped selling the lots during the Japanese occupantion, knowing that the purchase price
would be paid in Japanese military notes; and Atty. Araneta claims that for this, plaintiff should be
thankfull because otherwise she would have received these notes as her share of the receipts, which
currency later became valueles.
But the main contention of the appellant is that the contract (Exh. 6) should be declared null and void
because its terms, particularly paragraphs 9, 11 and 15 which we have reproduced, violate the
provisions of Art. 400 of the Civil Code, which for the purposes of reference we quote below:
ART. 400. No co-owner shall be obliged to remain a party to the community. Each may, at any
time, demand the partition of the thing held in common.
Nevertheless, an agreement to keep the thing undivided for a specified length of time, not
exceeding ten years, shall be valid. This period may be a new agreement.
We agree with the trial court that the provisions of Art. 400 of the Civil Code are not applicable. The
contract (Exh., 6) far from violating the legal provision that forbids a co-owner being obliged to remain
a party to the community, precisely has for its purpose and object the dissolution of the co-ownership
and of the community by selling the parcel held in common and dividing the proceeds of the sale
among the co-owners. The obligation imposed in the contract to preserve the co-ownership until all the
lots shall have been sold, is a mere incident to the main object of dissolving the co-owners. By virtue of
the document Exh. 6, the parties thereto practically and substantially entered into a contract of
partnership as the best and most expedient means of eventually dissolving the co-ownership, the life of
said partnership to end when the object of its creation shall have been attained.
This aspect of the contract is very similar to and was perhaps based on the other agreement or contract
(Exh. "L") referred to by appellant where the parties thereto in express terms entered into partnership,
although this object is not expressed in so many words in Exh. 6. We repeat that we see no violation of
Art. 400 of the Civil Code in the parties entering into the contract (Exh. 6) for the very reason that Art.
400 is not applicable.
Looking at the case from a practical standpoint as did the trial court, we find no valid ground for the
partition insisted upon the appellant. We find from the evidence as was done by the trial court that of
the 64,928.6 sq. m. which is the total area of the parcel held in common, only 1,600 sq. m. or 2.5 per
cent of the entire area remained unsold at the time of the trial in the year 1947, while the great bulk of
97.5 per cent had already been sold. As well observed by the court below, the partnership is in the
process of being dissolved and is about to be dissolved, and even assuming that Art. 400 of the Civil
Code were applicable, under which the parties by agreement may agree to keep the thing undivided for
a period not exceeding 10 years, there should be no fear that the remaining 1,600 sq. m. could not be
disposed of within the four years left of the ten-years period fixed by Art. 400.
We deem it unnecessary to discuss and pass upon the other points raised in the appeal and which
counsel for appellant has extensively and ably discussed, citing numerous authorities. As we have
already said, we have viewed the case from a practical standpoint, brushing aside technicalities and
disregarding any minor violations of the contract, and in deciding the case as we do, we are fully
convinced that the trial court and this Tribunal are carrying out in a practical and expeditious way the
intentions and the agreement of the parties contained in the contract (Exh. 6), namely, to dissolve the
community and co-ownership, in a manner most profitable to the said parties.
In view of the foregoing, the decision appealed from is hereby affirmed. There is no pronouncement as
to costs.
So ordered.
Pablo, Bengzon, Padilla, Tuason, Reyes, Jugo and Bautista Angelo, JJ., concur.
Paras, C. J., I certify that Mr. Justice Feria voted to affirm.
SUPREME COURT
Manila
SECOND DIVISION
G.R. No. 101522 May 28, 1993
LEONARDO MARIANO, AVELINA TIGUE, LAZARO MARIANO, MERCEDES SAN PEDRO, DIONISIA M. AQUINO, and JOSE N.T. AQUINO, petitioners,
vs.
HON. COURT OF APPEALS, (Sixteenth Division), GRACE GOSIENGFIAO, assisted by her husband GERMAN GALCOS; ESTER GOSIENGFIAO,
assisted by her husband AMADOR BITONA; FRANCISCO GOSIENGFIAO, JR., NORMA GOSIENGFIAO, and PINKY ROSE GUENO, respondents.
The Baristers Law Office for petitioners.
Simeon T. Agustin for private respondents.
NOCON, J.:
Before Us is a petition foe review of the decision, dated May 13, 1991 of the Court of Appeals in CA-G.R. CV No. 13122, entitled Grace Gosiengfiao, et al. v.
Leonardo Mariano v. Amparo Gosiengfiao 1 raising as issue the distinction between Article 10882 and Article 16203 of the Civil Code.
The Court of Appeals summarized the facts as follows:
It appears on record that the decedent Francisco Gosiengfiao is the registered owner of a residential lot located at Ugac Sur, Tuguegarao,
Cagayan, particularly described as follows, to wit:
"The eastern portion of Lot 1351, Tuguegarao Cadastre, and after its segregation now designated as Lot 1351-A,
Plan PSD-67391, with an area of 1,1346 square meters."
and covered by Transfer Certificate of Title No. T-2416 recorded in the Register of Deeds of Cagayan.
The lot in question was mortgaged by the decedent to the Rural Bank of Tuguegarao (designated as Mortgagee bank, for brevity) on
several occasions before the last, being on March 9, 1956 and 29, 1958.
On August 15, 1958, Francisco Gosiengfiao died intestate survived by his heirs, namely: Third-Party Defendants: wife Antonia and
Children Amparo, Carlos, Severino and herein plaintiffs-appellants Grace, Emma, Ester, Francisco, Jr., Norma, Lina (represented by
daughter Pinky Rose), and Jacinto.
The loan being unpaid, the lot in dispute was foreclosed by the mortgagee bank and in the foreclosure sale held on December 27, 1963,
the same was awarded to the mortgagee bank as the highest bidder.
On February 7, 1964, third-party defendant Amparo Gosiengfiao-Ibarra redeemed the property by paying the amount of P1,347.89 and the
balance of P423.35 was paid on December 28, 1964 to the mortgagee bank.
On September 10, 1965, Antonia Gosiengfiao on her behalf and that of her minor children Emma, Lina, Norma together with Carlos and
Severino executed a "Deed of Assignment of the Right of Redemption" in favor of Amparo G. Ibarra appearing in the notarial register of
Pedro (Laggui) as Doc. No. 257, Page No. 6, Book No. 8, Series of 1965.
On August 15, 1966, Amparo Gosiengfiao sold the entire property to defendant Leonardo Mariano who subsequently established
residence on the lot subject of this controversy. It appears in the Deed of Sale dated August 15, 1966 that Amparo, Antonia, Carlos and
Severino were signatories thereto.
Sometime in 1982, plaintiff-appellant Grace Gosiengfiao learned of the sale of said property by the third-party defendants. She went to the
Barangay Captain and asked for a confrontation with defendants Leonardo and Avelina Mariano to present her claim to said property.
On November 27, 1982, no settlement having been reached by the parties, the Barangay captain issued a certificate to file action.
On December 8, 1982, defendant Leonardo Mariano sold the same property to his children Lazaro F. Mariano and Dionicia M. Aquino as
evidenced by a Deed of Sale notarized by Hilarion L. Aquino as Doc. No. 143, Page No. 19, Book No. V, Series of 1982.
On December 21, 1982, plaintiffs Grace Gosiengfiao, et al. filed a complaint for "recovery of possession and legal redemption with
damages" against defendants Leonardo and Avelina Mariano. Plaintiffs alleged in their complaint that as co-heirs and co-owners of the lot
in question, they have the right to recover their respective shares in the same, and property as they did not sell the same, and the right of
redemption with regard to the shares of other co-owners sold to the defendants.
Defendants in their answer alleged that the plaintiffs has (sic) no cause of action against them as the money used to redeem lot in
question was solely from the personal funds of third-party defendant Amparo Gosiengfiao-Ibarra, who consequently became the sole
owner of the said property and thus validly sold the entire property to the defendants, and the fact that defendants had already sold the
said property to the children, Lazaro Mariano and Dionicia M. Aquino. Defendants further contend that even granting that the plaintiffs are
co-owners with the third-party defendants, their right of redemption had already been barred by the Statute of Limitations under Article
1144 of the Civil Code, if not by laches.4
After trial on the merits, the Regional Trial Court of Cagayan, Branch I, rendered a decision dated September 16, 1986, dismissing the complaint and stating that
respondents have no right of ownership or possession over the lot in question. The trial court further said that when the subject property foreclosed and sold at
public auction, the rights of the heirs were reduced to a mere right of redemption. And when Amparo G. Ibarra redeemed the lot from the Rural Bank on her own
behalf and with her own money she became the sole owner of the property. Respondents' having failed to redeem the property from the bank or from Amparo G.
Ibarra, lost whatever rights the might have on the property.5
The Court of Appeals in its questioned decision reversed and set aside the ruling of the trial court and declared herein respondents as co-owners of the property
in the question. The Court of Appeals said:
The whole controversy in the case at bar revolves on the question of "whether or not a co-owner who redeems the whole property with her
own personal funds becomes the sole owner of said property and terminates the existing state of co-ownership."
Admittedly, as the property in question was mortgaged by the decedent, a co-ownership existed among the heirs during the period given
by law to redeem the foreclosed property. Redemption of the whole property by a co-owner does not vest in him sole ownership over said
property but will inure to the benefit of all co-owners. In other words, it will not end to the existing state of co-ownership. Redemption is not
a mode of terminating a co-ownership.
xxx xxx xxx
In the case at bar, it is undisputed and supported by records, that third-party defendant Amparo G. Ibarra redeemed the propety in dispute
within the one year redemption period. Her redemption of the property, even granting that the money used was from her own personal
funds did not make her the exclusive owner of the mortgaged property owned in common but inured to the benefit of all co-owners. It
would have been otherwise if third-party defendant Amparo G. Ibarra purchased the said property from the mortgagee bank (highest,
bidder in the foreclosure sale) after the redemption period had already expired and after the mortgagee bank had consolidated it title in
which case there would no longer be any co-ownership to speak of .6
The decision of the Court of Appeals is supported by a long line of case law which states that a redemption by a co-owner within the period prescribed by law
inures to the benefit of all the other co-owners.7
The main argument of petitioners in the case at bar is that the Court of Appeals incorrectly applied Article 1620 of the Civil Code, instead of Article 1088 of the
same code which governs legal redemption by co-heirs since the lot in question, which forms part of the intestate estate of the late Francisco Gosiengfiao, was
never the subject of partition or distribution among the heirs, thus, private respondents and third-party defendants had not ceased to be co-heirs.
On that premise, petitioners further contend that the right of legal redemption was not timely exercised by the private respondents, since Article 1088 prescribes
that the same must be done within the period of one month from the time they were notified in writing of the sale by the vendor.
According to Tolentino, the fine distinction between Article 1088 and Article 1620 is that when the sale consists of an interest in some particular property or
properties of the inheritance, the right redemption that arises in favor of the other co-heirs is that recognized in Article 1620. On the other hand, if the sale is the
hereditary right itself, fully or in part, in the abstract sense, without specifying any particular object, the right recognized in Article 1088 exists.8
Petitioners allege that upon the facts and circumstances of the present case, respondents failed to exercise their right of legal redemption during the period
provided by law, citing as authority the case of Conejero, et al., v. Court of Appeals, et al.9 wherein the Court adopted the principle that the giving of a copy of a
deed is equivalent to the notice as required by law in legal redemption.
We do not dispute the principle laid down in the Conejero case. However, the facts in the said case are not four square with the facts of the present case. In
Conejero, redemptioner Enrique Conejero was shown and given a copy of the deed of sale of the subject property. The Court in that case stated that the
furnishing of a copy of the deed was equivalent to the giving of a written notice required by law. 11
The records of the present petition, however, show no written notice of the sale being given whatsoever to private respondents. Although, petitioners allege that
sometime on October 31, 1982 private respondent, Grace Gosiengfiao was given a copy of the questioned deed of sale and shown a copy of the document at
the Office of the Barangay Captain sometime November 18, 1982, this was not supported by the evidence presented. On the contrary, respondent, Grace
Gosiengfiao, in her testimony, declared as follows:
Q. When you went back to the residence of Atty. Pedro Laggui were you able to see him?
A. Yes, I did.
Q. When you saw him, what did you tell?
A. I asked him about the Deed of Sale which Mrs. Aquino had told me and he also showed me a Deed of Sale. I
went over the Deed of Sale and I asked Atty. Laggui about this and he mentioned here about the names of the legal
heirs. I asked why my name is not included and I was never informed in writing because I would like to claim and
he told me to better consult my own attorney.
Q. And did you go?
A. Yes, I did.
Q. What kind of copy or document is that?
A. It is a deed of sale signed by my mother, sister Amparo and my brothers.
Q. If shown to you the copy of the Deed of Sale will you be able to identify it?
A. Yes, sir.11
Thereafter, Grace Gosiengfiao explicitly stated that she was never given a copy of the said Deed of Sale.
Q. Where did Don Mariano, Dr. Mariano and you see each other?
A. In the house of Brgy. Captain Antonio Bassig.
Q. What transpired in the house of the Brgy. Captain when you saw each other there?
A. Brgy. Captain Bassig informed my intention of claiming the lot and I also informed him about the Deed of Sale
that was not signed by me since it is mine it is already sold and I was informed in writing about it. I am a legal heir
and I have also the right to claim.
Q. And what was the reply of Don Mariano and Dr. Mariano to the information given to them by Brgy. Captain
Bassig regarding your claim?
A. He insisted that the lot is already his because of the Deed of Sale. I asked for the exact copy so that I could
show to him that I did not sign and he said he does not have a copy. 12
The above testimony was never refuted by Dr. Mariano who was present before Brgy. Captain Bassig.
The requirement of a written notice has long been settled as early as in the case of Castillo v. Samonte,13 where this Court quoted the ruling in Hernaez v.
Hernaez, 32 Phil., 214, thus:
Both the letter and spirit of the New Civil Code argue against any attempt to widen the scope of the notice specified in Article 1088 by
including therein any other kind of notice, such as verbal or by registration. If the intention of the law had been to include verbal notice or
any other means of information as sufficient to give the effect of this notice, then there would have been no necessity or reasons to specify
in Article 1088 of the New Civil Code that the said notice be made in writing for, under the old law, a verbal notice or information was
sufficient. 14
Moreover, petitioners themselves adopted in their argument respondents' allegation In their complaint that sometime on October, 1982 they sought the
redemption of the property from spouses Leonardo Mariano and Avelina Tigue, by tendering the repurchase money of P12,000.00, which the spouses
rejected.15 Consequently, private respondents exercised their right of redemption at the first opportunity they have by tendering the repurchase price to
petitioners. The complaint they filed, before the Barangay Captain and then to the Regional Trial Court was necessary to assert their rights. As we learned in the
case of Castillo, supra:
It would seem clear from the above that the reimbursement to the purchaser within the period of one month from the notice in writing is a
requisite or condition precedent to the exercise of the right of legal redemption; the bringing of an action in court is the remedy to enforce
that right in case the purchaser refuses the redemption. The first must be done within the month-period; the second within the prescriptive
period provided in the Statute of Limitation. 16
The ruling in Castillo v. Samonte; supra, was reiterated in the case of Garcia v. Calaliman, where We also discussed the reason for the requirement of the written
notice. We said:
Consistent with aforesaid ruling, in the interpretation of a related provision (Article 1623 of the New Civil Code) this Court had stressed
that written notice is indispensable, actual knowledge of the sale acquired in some other manners by the redemptioner, notwithstanding.
He or she is still entitled to written notice, as exacted by the code to remove all uncertainty as to the sale, its terms and its validity, and to
quiet and doubt that the alienation is not definitive. The law not having provided for any alternative, the method of notifications remains
exclusive, though the Code does not prescribe any particular form of written notice nor any distinctive method written notification of
redemption (Conejero et al. v. Court of Appeals et al., 16 SCRA 775 [1966]; Etcuban v. Court of Appeals, 148 SCRA 507 [1987]; Cabrera v.
Villanueva, G.R. No. 75069, April 15, 1988).17 (Emphasis ours)
We likewise do not find merit in petitioners' position that private respondents could not have validly effected redemption due to their failure to consign in court the
full redemption price after tender thereof was rejected by the petitioners. Consignation is not necessary, because the tender of payment was not made to
discharge an obligation, but to enforce or exercise a right. It has been previously held that consignation is not required to preserve the right of repurchase as a
mere tender of payment is enough on time as a basis for an action to compel the vendee a retro to resell the property; no subsequent consignation was
necessary to entitle private respondents to such
reconveyance. 18
Premises considered, respondents 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.
WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED. Cost against petitioners.
SO ORDERED.
Narvasa, C.J., Padilla and Nocon, JJ., concur.
# Footnotes
1 Justice Justo P. Torres, Jr., ponente, Justices Ricardo J. Francisco and Consuelo Ynares-Santiago concurring.
2 Article 1088. Should any of the heirs sell his hereditary rights to a stranger before the partition, any or all of the co-heirs may be
subrogated to the rights of the purchaser by reimbursing him for the price of the sale, provided they so within the period of the month from
the time they were notified in writing of the sale by the vendor.
3 Article 1620. A co-owner of a thing may exercise the right of redemption in case the shares of all the other co-owners or of any of them,
are sold to a third person. If the price of the alienation is grossly excessive, the redemptioner shall pay only a reasonable one.
respectively have in the thing owned in common.
4 Decision, pp. 2-4; Rollo, pp. 71-73.
5 Rollo pp. 67-68.
6 Decision, pp. 5-6; Rollo, pp. 74-75.
7 Annie Tan v. C.A., G.R. No. 79899, 172 SCRA 660 (1989); Adille v. C.A., G.R. No. 44546, 157 SCRA 445 (1988); De Guzman v. C.A.,
G.R. No. 47378, 148 SCRA 75 (1987).
8 Tolentino, Arturo M., Commentaries and Jurisprudence on the Civil Code of the Philippines, Vol. III, pp. 607-608, citing Manresa at p.
777.
9 16 SCRA 775 (1966).
10 Id., at pp. 779-780.
11 TSN, October 9, 1984, pp. 11-12.
12 Id., at pp. 14-15.
13 106 Phil. 1023 (1960).
14 Id., at 1028.
15 Amended Complaint; par. 15-16, Rollo p. 34.
16 Ibid., at 1029.
17 Garcia v. Calaliman, G.R. No. 26855, 172 SCRA 201 (1989).
18 Francisco v. Bautista, G.R. No. 44167, 192 SCRA 388 (1991).

SUPREME COURT
Manila
THIRD DIVISION
G.R. No. 56550 October 1, 1990
MARINA Z. REYES, AUGUSTO M. ZABALLERO and SOCORRO Z. FRANCISCO,
petitioners,
vs.
THE HONORABLE ALFREDO B. CONCEPCION, Presiding Judge, CFI of Cavite,
Tagaytay, Br. IV, SOCORRO MARQUEZ VDA. DE ZABALLERO, EUGENIA Z. LUNA,
LEONARDO M. ZABALLERO, and ELENA FRONDA ZABALLERO, respondents.
Law Firm of Raymundo A. Armovit for petitioners.
Leonardo M. Zaballero for private respondents.
CORTÉS, J.:
On March 13, 1980, petitioners filed with the CFI a complaint for injunction and damages, docketed as Civil Case No. TG-572, seeking to enjoin private
respondents Socorro Marquez Vda. De Zaballero, Eugenia Z. Luna and Leonardo M. Zaballero from selling to a third party their pro-indiviso shares as co-owners
in eight parcels of registered land (covered by TCT Nos. A-1316 to A-1322) located in the province of Cavite, with an aggregate area of about 96 hectares.
Petitioner claimed that under Article 1620 of the new Civil Code, they, as co-owners, had a preferential right to purchase these shares from private respondents
for a reasonable price.
On March 17, 1980, respondent trial judge denied the ex parte application for a writ of preliminary injunction, on the ground that petitioners' registered notice of
lis pendens was ample protection of their rights.
On April 24, 1980, private respondents received the summons and copies of the complaint. Private respondents then filed their answer with counterclaim, praying
for the partition of the subject properties. Private respondent Elena Fronda Zaballero filed a motion for intervention dated April 29, 1980, adopting therein her co-
respondents answer with counterclaim.
At the pre-trial hearing, the parties agreed on the following stipulation of facts:
xxx xxx xxx
1. That the plaintiffs, the defendants and the intervenor are the pro-indiviso co-owners of the properties cited and described in the
complaint;
2. That six and nine tenth (6-9/10) hectares of the land covered by TCT No. T-1319; approximately twelve (12) hectares of that covered by
TCT No. T-1320; and the entire parcel of covered by TCT No. T-1321, are subject of expropriation proceedings instituted by the National
Housing Authority (NHA) now pending before this Court in Civil Case Nos. TG-392, TG-396 and TG-417;
3. That based on the evidence presented by the herein parties in the aforecited expropriation cases, the current valuation of the land and
the improvements thereon is at P95,132.00 per hectare;
4. That on 16 April 1980, the plaintiffs received a written notice from the defendants and the intervenor that the VOLCANO SECURITIES
TRADERS AND AGRI-BUSINESS CORPORATION had offered to buy the latter's share in the properties listed in the complaint subject to
the following terms:
1. The selling price shall be net at TWELVE & 50/100 (P12.50) PESOS per square meter, or a total price of NINE
MILLION (P9,000,000.00) PESOS for a total area of SEVENTY TWO (72) HECTARES ONLY;
2. A downpayment equivalent to THIRTY (30%) PERCENT of the selling price, or a minimum downpayment of
TWO MILLION SEVEN HUNDRED THOUSAND (P2,700,000.00) PESOS;
3. The balance of the purchase price to be payable within THREE (3) YEARS from the date of downpayment in
THREE (3) EQUAL, ANNUAL PAYMENTS with interest at the legal rate prevailing at the time of payment;
4. The balance shall be covered by a BANK GUARANTEE of payments and shall not be governed by Art. 1250 of
the Civil Code.
(Cf. Annexes 1, 2 and 3, Answer)
5. That in said letters (Annexes 1, 2 and 3, Answer), the plaintiffs were requested:
a) To exercise their pre-emptive right to purchase defendants' and intervenor's shares under the above-quoted
terms; or
b) To agree to a physical partition of the properties; or
c) To sell their shares, jointly with the defendants and the intervenor, to the VOLCANO SECURITIES TRADERS
AND AGRI-BUSINESS CORPORATION at the price and under the terms aforequoted.
6. That the VOLCANO SECURITIES TRADERS AND AGRI-BUSINESS CORPORATION is ready, willing and able to purchase not only
the aliquot shares of the defendants and the intervenor, but also that of the plaintiffs, in and to all the properties subject of this case, for
and in consideration of the net amount of TWELVE and 50/100 (P12.50) PESOS per square meter and under the afore-quoted terms;
xxx xxx xxx
[Annex "C" of the Petition, pp. 1-2, Rollo, pp. 43-44.]
The parties laid down their respective positions, as follows:
PLAINTIFFS
1. That the subject properties are incapable of physical partition;
2. That the price of P12.50 per square meter is grossly excessive;
3. That they are willing to exercise their pre-emptive right for an amount of not more that P95,132.00 per hectare, which is the fair and
reasonable value of said properties;
4. That the statutory period for exercising their pre-emptive right was suspended upon the filing of the complaint;
DEFENDANTS AND INTERVENOR
1. That the reasonable price of the subject properties is P12.50 per square meter;
2. That plaintiffs' right of legal pre-emption had lapsed upon their failure to exercise the same within the period prescribed in Art. 1623 of
the Civil Code of the Philippines;
3. That, assuming the soundness of plaintiffs' claim that the price of P12.50 per square meter is grossly excessive, it would be to the best
interest of the plaintiffs to sell their shares to the VOLCANO SECURITIES TRADERS AND AGRI-BUSINESS CORPORATION, whose
sincerity, capacity and good faith is beyond question, as the same was admitted by the parties herein;
4. That the subject properties consisting approximately 95 hectares may be physically partitioned without difficulty in the manner
suggested by them to plaintiffs, and as graphically represented in the subdivision plan, which will be furnished in due course to plaintiffs'
counsel.
[Annex "C" of the Petition, pp. 2-3; Rollo, pp. 44-45.]
Based on the foregoing, respondent trial judge rendered a pre-trial order dated July 9, 1980 granting petitioners a period of ten days from receipt of the
subdivision plan to be prepared by a competent geodetic engineer within which to express their approval or disapproval of the said plan, or to submit within the
same period, if they so desire, an alternative subdivision plan.
On July 16, 1980, counsel for private respondents sent to the counsel for petitioners a letter enclosed with a subdivision plan.
On August 4, 1980, petitioners filed their comment to the pre-trial order, contending that the question of reasonable value of the subject properties remains a
contentious issue of fact ascertainable only after a full trial. Petitioners likewise insisted on their pre- emptive right to purchase private respondents' shares in the
co-ownership after due determination of the reasonable price thereof.
Thereafter, counsel for private respondents sent the counsel for petitioners another subdivision plan prepared by a geodetic engineer. Still, no definite
communication was sent by petitioners signifying their approval or disapproval to the subdivision plans.
In order to settle once and for all the controversy between the parties, private respondents filed a motion dated December 16, 1980 requesting that petitioners be
required to formally specify which of the two options under Article 498 of the New Civil Code they wished to avail of: that petitioners' shares in the subject
properties be sold to private respondents, at the rate of P12.50 per square meter; or that the subject properties be sold to a third party, VOLCANO LAKEVIEW
RESORTS, INC. (claimed to have been erroneously referred to in the pre-trial as VOLCANO SECURITIES TRADERS AND AGRI-BUSINESS CORPORATION)
and its proceeds thereof distributed among the parties.
Finding merit in the private respondents' request, and for the purpose of determining the applicability of Article 498 of the New Civil Code, respondent trial judge
issued an order dated February 4, 1981 which directed the parties to signify whether or not they agree to the scheme of allotting the subject properties to one of
the co-owners, at the rate of P12.50 per square meter, or whether or not they know of a third party who is able and willing to buy the subject properties at terms
and conditions more favorable than that offered by VOLCANO LAKEVIEW RESORTS, INC. The order contained a series of questions addressed to all the
parties, who were thereupon required to submit their answers thereto.
Private respondents filed a "Constancia" expressing that they were willing to allot their shares in the subject properties to Socorro Marquez Vda. de Zaballero, at
the rate of P12.50 per square meter, and that they did not know of any other party who was willing and able to purchase the subject properties under more
favorable conditions than that offered by VOLCANO LAKEVIEW RESORTS, INC.
However, instead of submitting their answers to the queries posed by respondent trial judge, petitioners filed a motion for clarification as to the true identity of the
third party allegedly willing to purchase the subject properties.
On February 26, 1981, respondent trial judge rejected petitioners' motion on the ground that it was irrelevant.
Thereupon, on February 27, 1981, petitioners filed a pleading captioned "Compliance and Motion", (1) reiterating the relevance of ascertaining the true identity of
the third party buyer, VOLCANO SECURITIES TRADERS AND AGRI-BUSINESS CORPORATION or VOLCANO LAKEVIEW RESORTS, INC., (2) expressing
their view that there is actually no bona fide and financially able third party willing to purchase the subject properties at the rate of P12.50 per square meter, and,
(3) once again insisting on their pre-emptive right to purchase the shares of private respondents in the co-ownership at a "reasonable price", which is less than
that computed excessively by the latter at the rate of P12.50 per square meter. Petitioners therein prayed that further proceedings be conducted in order to settle
the factual issue regarding the reasonable value of the subject properties.
On March 16, 1981, respondent trial judge issued an order denying petitioners' motion. The judge ruled that petitioners did not possess a pre-emptive right to
purchase private respondents' shares in the co-ownership. Thus, finding that the subject properties were essentially indivisible, respondent trial judge ordered the
holding of a public sale of the subject properties pursuant to Article 498 of the New Civil Code. A notice of sale was issued setting the date of public bidding for
the subject properties on April 13, 1981.
Petitioners then filed a motion for reconsideration from the above order. Respondent trial judge reset the hearing on petitioners' motion for reconsideration to April
6, 1981, and moved the scheduled public sale to April 14, 1981.
Without awaiting resolution of their motion for reconsideration, petitioners filed the present petition for certiorari, alleging that the respondent trial judge acted
without jurisdiction, or in grave abuse of its discretion amounting to lack of jurisdiction, in issuing his order dated March 16, 1981 which denied petitioners' claim
of a pre-emptive right to purchase private respondents' pro-indiviso shares and which, peremptorily ordered the public sale of the subject properties. On April 8,
1981, this Court issued a temporary restraining order enjoining the sale of the subject properties at public auction.
With the comment and reply, the Court considered the issues joined and the case submitted for decision.
The Court finds no merit in the present petition.
The attack on the validity of respondent trial judge's order dated March 16, 1981 is ultimately premised on petitioners' claim that they had a pre-emptive right to
purchase the pro-indiviso shares of their co-owners, private respondents herein, at a "reasonable price". It is this same claim which forms the basis of their
complaint for injunction and damages filed against private respondents in the court a quo.
This claim is patently without basis. In this jurisdiction, the legal provisions on co-ownership do not grant to any of the owners of a property held in common a
pre-emptive right to purchase the pro-indiviso shares of his co-owners. Petitioners' reliance on Article 1620 of the New Civil Code is misplaced. Article 1620
provides:
A co-owner of a thing may exercise the right of redemption in case the shares of all the co-owners or of any of them, are sold to a third
person. If the price of the alienation is grossly excessive, the redemptioner shall pay only a reasonable one.
respectively have in the thing owned in common [Emphasis supplied].
Article 1620 contemplates of a situation where a co-owner has alienated his pro-indiviso shares to a stranger. By the very nature of the right of "legal
redemption", a co-owner's light to redeem is invoked only after the shares of the other co-owners are sold to a third party or stranger to the co-ownership [ See
Estrada v. Reyes, 33 Phil. 31 (1915)]. But in the case at bar, at the time petitioners filed their complaint for injunction and damages against private respondents,
no sale of the latter's pro-indiviso shares to a third party had yet been made. Thus, Article 1620 of the New Civil Code finds no application to the case at bar.
There is likewise no merit to petitioners' contention that private respondents had acknowledged the pre-emptive right of petitioners to purchase their shares at a
"reasonable price". Although it appears that private respondents had agreed to sell their pro-indiviso shares to petitioners, the offer was made at a fixed rate of
P12.50 per square meter [See Pre-trial Order dated July 9, 1980, Annex "C" of the Petition; Rollo, pp. 43-45]. It cannot be said that private respondents had
agreed, without qualification, to sell their shares to petitioners. Hence, petitioners cannot insist on a right to purchase the shares at a price lower than the selling
price of private respondents.
Neither do petitioners have the legal right to enjoin private respondents from alienating their pro-indiviso shares to a third party. The rights of a co-owner of a
property are clearly specified in Article 493 of the New Civil Code, thus:
Art. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore
alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the
effect of the alienation 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.
The law does not prohibit a co-owner from selling, alienating or mortgaging his ideal share in the property held in common. The law merely provides that the
alienation or mortgage shall be limited only to the portion of the property which may be allotted to him upon termination of the co-ownership [ See Mercado v.
Liwanag, G.R. No. L-14429, June 30, 1962, 5 SCRA 472; PNB v. The Honorable Court of Appeals, G.R. No. L-34404, June 25, 1980, 98 SCRA 207; Go Ong v.
The Honorable Court of Appeals, G.R. No. 75884, September 24, 1987, 154 SCRA 270,] and, as earlier discussed, that the remaining co-owners have the right
to redeem, within a specified period, the shares which may have been sold to the third party. [Articles 1620 and 1623 of the New Civil Code.]
Considering the foregoing, the Court holds that respondent trial judge committed no grave abuse of discretion when he denied petitioners' claim of a pre-emptive
right to purchase private respondents' pro-indiviso shares.
Moreover, there is no legal infirmity tainting respondent trial judge's order for the holding of a public sale of the subject properties pursuant to the provisions of
Article 498 of the New Civil Code. After a careful examination of the proceedings before respondent trial judge, the Court finds that respondent trial judge's order
was issued in accordance with the laws pertaining to the legal or juridical dissolution of co-ownerships.
It must be noted that private respondents, in their answer with counterclaim prayed for, inter alia, the partition of the subject properties in the event that the
petitioners refused to purchase their pro-indiviso shares at the rate of P12.50 per square meter. Unlike petitioners' claim of a pre-emptive right to purchase the
other co-owners' pro-indiviso shares, private respondents' counterclaim for the partition of the subject properties is recognized by law, specifically Article 494 of
the New Civil Code which lays down the general rule that no co-owner is obliged to remain in the co-ownership. Article 494 reads as follows:
No co-owner shall be obliged to remain in the co-ownership. Each co-owner may demand at any time partition of the thing owned in
common, insofar as his share is concerned.
Nevertheless, an agreement to keep the thing undivided for a certain period of time, not exceeding ten years, shall be valid. This term may
be extended by a new agreement.
A donor or testator may prohibit partition for a period which shall not exceed twenty years.
Neither shall there be partition when it is prohibited by law.
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.
None of the legal exceptions under Article 494 applies to the case at bar. Private respondents' counterclaim for the partition of the subject properties was
therefore entirely proper. However, during the pre-trial proceedings, petitioners adopted the position that the subject properties were incapable of physical
partition. Initially, private respondents disputed this position. But after petitioners inexplicably refused to abide by the pretrial order issued by respondent trial
judge, and stubbornly insisted on exercising an alleged pre-emptive right to purchase private respondents' shares at a "reasonable price", private respondents
relented and adopted petitioner's position that the partition of the subject properties was not economically feasible, and, consequently, invoked the provisions of
Article 498 of the New Civil Code [Private respondents' "Motion To Allot Properties To Defendants Or To Sell the Same Pursuant To Article 498 Of The Civil
Code", Annex "D" of the Petition; Rollo, pp. 46-49].
Inasmuch as the parties were in agreement as regards the fact that the subject properties should not be partitioned, and private respondents continued to
manifest their desire to terminate the co-ownership arrangement between petitioners and themselves, respondent trial judge acted within his jurisdiction when he
issued his order dated February 4, 1981 requiring the parties to answer certain questions for the purpose of determining whether or not the legal conditions for
the applicability of Article 498 of the New Civil Code were present in the case.
Art. 498 provides that:
Whenever the thing is essentially indivisible and the co-owners cannot agree that it be alloted to one of them who shall indemnify the
others, it shall be sold and its proceeds distributed.
The sale of the property held in common referred to in the above article is resorted to when (1) the right to partition the property among the co-owners is invoked
by any of them but because of the nature of the property, it cannot be subdivided or its subdivision [ See Article 495 of the New Civil Code] would prejudice the
interests of the co-owners (See Section 5 of Rule 69 of the Revised Rules of Court) and (2) the co-owners are not in agreement as to who among them shall be
allotted or assigned the entire property upon reimbursement of the shares of the other co-owners.
Petitioners herein did not have justifiable grounds to ignore the queries posed by respondent trial judge and to insist that hearings be conducted in order to
ascertain the reasonable price at which they could purchase private respondents' pro-indiviso shares [Petitioners' "Compliance and Motion" dated February 27,
1981, Annex "H" of the Petition; Rollo, pp. 57-60].
Since at this point in the case it became reasonably evident to respondent trial judge that the parties could not agree on who among them would be allotted the
subject properties, the Court finds that respondent trial judge committed no grave abuse of discretion in ordering the holding of a public sale for the subject
properties (with the opening bid pegged at P12.50 per square meter), and the distribution of the proceeds thereof amongst the co-owners, as provided under
Article 498 of the New Civil Code.
Contrary to petitioners' contention, there was no need for further hearings in the case because it is apparent from the various allegations and admissions of the
parties made during the pre-trial proceedings, and in their respective pleadings, that the legal requisites for the application of Article 498 of the New Civil Code
were present in the case. No factual issues remained to be litigated upon.
WHEREFORE, the present petition is DISMISSED for lack of merit. The temporary restraining order issued by the Court is hereby LIFTED.
SO ORDERED.
SUPREME COURT
Manila
EN BANC
JOSE MARIA RAMIREZ, plaintiff-appellee,
vs.
JOSE EUGENIO RAMIREZ, RITA D. RAMIREZ, BELEN T. RAMIREZ, DAVID
MARGOLIES, MANUEL UY and SONS, INC., BANK OF THE PHILIPPINE ISLANDS, in its
capacity as judicial administrator of the Testate Estate of the late Jose Vivencio Ramirez,
defendants-appellants,
ANGELA M. BUTTE, defendant-appellee.
Sycip, Salazar, Luna and Associates for plaintiff-appellee.
Ramirez and Ortigas for defendants-appellants.
CONCEPCION, C.J.:
Appeal by the defendants from a decision of the Court of First Instance of Manila.
Plaintiff, Jose Maria Ramirez, brought this action 1 against defendants Jose Eugenio Ramirez, Rita D.
Ramirez, Belen T. Ramirez, David Margolies, Manuel Uy & Sons, Inc., the Estate of the late Jose
Vivencio Ramirez represented by its judicial administrator, the Bank of the Philippine Islands, and
Angela M. Butte — hereinafter referred to collectively as defendants — for the partition of a parcel of
land situated at the Northwestern corner of Escolta street and Plaza Sta. Cruz, Manila — otherwise
known as Lot 1 of Block 2120 of the Cadastral Survey of Manila and more particularly described in
Transfer Certificate of Title No. 53946 of the Register of Deeds for said City — and belonging pro
indiviso to both parties, one-sixth (1/6) to the plaintiff and five-sixths (5/6) to the defendants.
Manuel Uy & Sons expressed its conformity to the partition, "if the same can be done without great
prejudice to the interests of the parties." Defendant Butte agreed to the partition prayed for. The other
defendants objected to the physical partition of the property in question, upon the theory that said
partition is "materially and legally" impossible and "would work great harm and prejudice to the co-
owners." By agreement of the parties the lower Court referred the matter to a Commission composed
of:
(1) Delfin Gawaran, Deputy Clerk of said court, as Chairman,
(2) Artemio U. Valencia, President of the Manila Board of Realtors, as commissioner for
plaintiff, and
(3) Ramon F. Cuervo, President of the Perpetual Investment Corporation, Inc., as commissioner
for defendants,
to determine whether the property is susceptible of partition, and submit a plan therefor, if feasible, as
well as to report thereon. Subsequently, the commissioners submitted their individual reports with their
respective plans for the segregation of plaintiff's share.
After due hearing, the Court rendered a decision declaring that plaintiff is entitled to the segregation of
his share, and directing that the property be partitioned in accordance with the plan submitted by
commissioner Valencia, and that the expenses incident thereto be paid by both parties proportionately.
Hence, this appeal by, the defendants, except Mrs. Butte. Appellants maintain that the lower court has
erred: 1) in holding that said property is legally susceptible of physical division; 2) in accepting the
recommendation of commissioner Valencia, instead of that of commissioner Cuervo, or a proposal
made by the very plaintiff; and 3) in not ordering that the incidental expenses be borne exclusively by
him.
We find no merit in the appeal.
With respect to the first alleged error, it is urged that a physical division of the property will cause
"inestimable damage" to the interest of the co-owners. No evidence, however, has been introduced, or
sought to be introduced, in support of this allegation. Moreover, the same is predicated upon the
assumption that a real estate suitable for commercial purposes — such as the one herein sought to be
partitioned — is likely to suffer a proportionately great diminution in value when its area becomes too
small. But, then, if plaintiff's share of 260.26 square meters were segregated from the property in
question, there would still remain a lot of 1,301.34 square meters for appellants herein and Mrs. Butte.
A real estate of this size, in the very heart of Manila, is not, however, inconsequential, in comparison to
that of the present property of the community. In other words, we do not believe that its value would be
impaired, on account of the segregation of plaintiff's share, to such an extent as to warrant the
conclusion that the property is indivisible.
Appellants argue that, instead of making the aforementioned segregation, plaintiff's share should be
sold to them. In support of this pretense, they cite the provision of Article 495 of our Civil Code, to the
effect that:
. . . Notwithstanding the provisions of the preceding article, the co-owners cannot demand a
physical division of the thing owned in common, when to do so would render it unserviceable
for the use for which it is intended. But the co-ownership may be terminated in accordance with
article 498.
They apparently assume, once again, that the alleged "inestimable damage" to be suffered by the
property, if plaintiff's share were segregated, is equivalent to rendering it "unserviceable for the use for
which it is intended." Independently of the fact that the minor premise of this syllogism — the alleged
"inestimable damage" — has not been established, the conclusion drawn by appellants does not follow
necessarily. Indeed, the record shows that there are two (2) buildings on the land in question, namely:
1) a two-storey commercial building — known as "Sta. Cruz Building" — abutting on the one (1) side,
2 on the Escolta, and, on the other 3 on Plaza Santa Cruz; and 2) a small two-storey residential building,
on the Northwestern end of the lot, and behind the first building, adjoining the Estero de la Reina,
which constitutes the Southwestern boundary of the property. There is nothing to show that, after
segregating plaintiff's share, the buildings left on the remaining 1,301.34 square meters, representing
defendants' share, would be unserviceable, either for commercial or for residential purposes. On the
contrary, it seems obvious that plaintiff would not insist upon the partition prayed for, if his share 4
were unserviceable for either — particularly the commercial — purpose. In fact, every one of the
aforementioned commissioners, including the one representing defendants herein, recommended the
segregation of plaintiff's share. The commissioners merely failed to agree on the precise configuration
thereof.
This brings us to the second issue raised by appellants: whether the lower court should have adopted
the plan submitted by their own commissioner, or "in not taking into consideration," at least, a proposal
made by plaintiff herein. In this connection, it appears that said commissioner 5 recommended that
plaintiff's share be given a frontage of 6.14 lineal meters at Plaza Sta. Cruz, whereas the commissioner
for the Court 6 favored a frontage of 12.66 square meters at said Plaza; that defendants' main objection
to the plan recommended by commissioner Valencia 7 and adopted by the lower court, is that it left
behind the portion awarded to plaintiff, a lot of 169 square meters, which would have to be divided
among the defendants, should they later wish to have their individual shares segregated; and that, in
order to offset this objection, plaintiff expressed — in one of the pre-trials held in the lower court and
in order to "facilitate early termination" of the case — the willingness "to buy from the other co-owners
the remaining portion of the land behind his lot at P1,000 per square meter."1awphîl.nèt
The record does not show that this offer of the plaintiff had not been "taken into consideration" by the
lower court. Moreover, defendants had not accepted it. And neither do they accept it now, for they
would want the plaintiff to pay a price higher than that offered by him. Upon the other hand, the
disadvantage resulting to the defendants from the existence of said lot of 169 square meters, behind that
awarded to the plaintiff, is offset by the fact that the remaining portion of the land in question —
representing defendants' collective share — has, in addition to a frontage of around 40 meters on Plaza
Santa Cruz, a frontage of 24.13 meters on Escolta Street, which apart from being, admittedly, the most
valuable one, is totally denied to the plaintiff. Then, again the Cuervo plan giving plaintiff a 6.14
meters frontage of Plaza Sta. Cruz, goes all the way down to the Western end of the property, the Estero
de la Reina, and would require a partition of the residential building, on that part of the property in
question, which the very plaintiff says is indivisible, because it would render said building
"unserviceable for the purpose for which it is intended." 8
As regards the last alleged error, it is obvious that the segregation of plaintiff's share inures to the
benefit not only of the plaintiff, but, also, of the defendants, and that both should, consequently, defray
the incidental expenses.
WHEREFORE, the decision appealed from is hereby the costs of this instance against herein
defendants-appellants. It is so ordered.
Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ., concur.
Bengzon, J.P., J., is on leave.
Footnotes
1Belen T. Ramirez was originally one of the plaintiffs, but, she later withdrew as such.
2The South.
3The East.
4Of 260.26 square meters.
5Mr. Cuervo, representing defendants.
6Deputy Clerk of Court Gawaran.
7Representing the plaintiff.
8Deputy Clerk Gawaran's plan is more objectionable to the defendants, not only because it gives
plaintiff a bigger frontage of 12.66 meters at Plaza Santa Cruz, but, also, because it leaves a
bigger back yard lot, of 225 square meters, on the side adjoining the Estero de la Reina, without
access to any stre
SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 76351 October 29, 1993
VIRGILIO B. AGUILAR, petitioner,

vs.
COURT OF APPEALS and SENEN B. AGUILAR, respondents.
Jose F. Manacop for petitioner.
Siruello, Muyco & Associates Law Office for private respondent.
BELLOSILLO, J.:
This is a petition for review on certiorari seeking to reverse and set aside the Decision of the Court of Appeals in CA-GR CV No. 03933 declaring null and void
the orders of 23 and 26 April, 1979, the judgment by default of 26 July 1979, and the order of 22 October 1979 of the then Court of First Instance of Rizal, Pasay
City, Branch 30, and directing the trial court to set the case for pre-trial conference.
Petitioner Virgilio and respondent Senen are brothers; Virgilio is the youngest of seven (7) children of the late Maximiano Aguilar, while Senen is the fifth. On 28
October 1969, the two brothers purchased a house and lot in Parañaque where their father could spend and enjoy his remaining years in a peaceful
neighborhood. Initially, the brothers agreed that Virgilio's share in the co-ownership was two-thirds while that of Senen was one-third. By virtue of a written
memorandum dated 23 February 1970, Virgilio and Senen agreed that henceforth their interests in the house and lot should be equal, with Senen assuming the
remaining mortgage obligation of the original owners with the Social Security System (SSS) in exchange for his possession and enjoyment of the house together
with their father.
Since Virgilio was then disqualified from obtaining a loan from SSS, the brothers agreed that the deed of sale would be executed and the title registered in the
meantime in the name of Senen. It was further agreed that Senen would take care of their father and his needs since Virgilio and his family were staying in Cebu.
After Maximiano Aguilar died in 1974, petitioner demanded from private respondent that the latter vacate the house and that the property be sold and proceeds
thereof divided among them.
Because of the refusal of respondent to give in to petitioner's demands, the latter filed on 12 January 1979 an action to compel the sale of the house and lot so
that the they could divide the proceeds between them.
In his complaint, petitioner prayed that the proceeds of the sale, be divided on the basis of two-thirds (2/3) in his favor and one-third (1/3) to respondent.
Petitioner also prayed for monthly rentals for the use of the house by respondent after their father died.
In his answer with counterclaim, respondent alleged that he had no objection to the sale as long as the best selling price could be obtained; that if the sale would
be effected, the proceeds thereof should be divided equally; and, that being a co-owner, he was entitled to the use and enjoyment of the property.
Upon issues being joined, the case was set for pre-trial on 26 April 1979 with the lawyers of both parties notified of the pre-trial, and served with the pre-trial
order, with private respondent executing a special power of attorney to his lawyer to appear at the pre-trial and enter into any amicable settlement in his behalf. 1
On 20 April 1979, Atty. Manuel S. Tonogbanua, counsel for respondent, filed a motion to cancel pre-trial on the ground that he would be accompanying his wife to
Dumaguete City where she would be a principal sponsor in a wedding.
On 23 April 1979, finding the reasons of counsel to be without merit, the trial court denied the motion and directed that the pre-trial should continue as scheduled.
When the case was called for pre-trial as scheduled on 26 April 1979, plaintiff and his counsel appeared. Defendant did not appear; neither his counsel in whose
favor he executed a special power of attorney to represent him at the pre-trial. Consequently, the trial court, on motion of plaintiff, declared defendant as in
default and ordered reception of plaintiff's evidence ex parte.
On 7 May 1979, defendant through counsel filed an omnibus motion to reconsider the order of default and to defer reception of evidence. The trial court denied
the motion and plaintiff presented his evidence.
On 26 July 1979, rendering judgment by default against defendant, the trial court found him and plaintiff to be co-owners of the house and lot, in equal shares on
the basis of their written agreement. However, it ruled that plaintiff has been deprived of his participation in the property by defendant's continued enjoyment of
the house and lot, free of rent, despite demands for rentals and continued maneuvers of defendants, to delay partition. The trial court also upheld the right of
plaintiff as co-owner to demand partition. Since plaintiff could not agree to the amount offered by defendant for the former's share, the trial court held that this
property should be sold to a third person and the proceeds divided equally between the parties.
The trial court likewise ordered defendant to vacate the property and pay plaintiff P1,200.00 as rentals 2 from January 1975 up to the date of decision plus
interest from the time the action was filed.
On 17 September 1979, defendant filed an omnibus motion for new trial but on 22 October 1979 the trial court denied the motion.
Defendant sought relief from the Court of Appeals praying that the following orders and decision of the trial court be set aside: (a) the order of 23 April 1970
denying defendants motion for postponement of the pre-trial set on 26 April 1979; (b) the order of 26 April 1979 declaring him in default and authorizing plaintiff to
present his evidence ex-parte; (e) the default judgment of 26 July 1979; and, (d) the order dated 22 October 1979 denying his omnibus motion for new trial.
On 16 October 1986, the Court of Appeals set aside the order of the trial court of 26 April 1979 as well as the assailed judgment rendered by default., The
appellate court found the explanation of counsel for defendant in his motion to cancel pre-trial as satisfactory and devoid of a manifest intention to delay the
disposition of the case. It also ruled that the trial court should have granted the motion for postponement filed by counsel for defendant who should not have
been declared as in default for the absence of his counsel.
Petitioner now comes to us alleging that the Court of Appeals erred (1) in not holding that the motion of defendant through counsel to cancel the pre-trial was
dilatory in character and (2) in remanding the case to the trial court for pre-trial and trial.
The issues to be resolved are whether the trial court correctly declared respondent as in default for his failure to appear at the pre-trial and in allowing petitioner
to present his evidence ex-parte, and whether the trial court correctly rendered the default judgment against respondent.
We find merit in the petition.
As regards the first issue, the law is clear that the appearance of parties at the pre-trial is mandatory. 3 A party who fails to appear at a pre-trial conference may
be non-suited or considered as in default.4 In the case at bar, where private respondent and counsel failed to appear at the scheduled pre-trial, the trial, court
has authority to declare respondent in default.5
Although respondent's counsel filed a motion to postpone pre-trial hearing, the grant or denial thereof is within the sound discretion of the trial court, which should
take into account two factors in the grant or denial of motions for postponement, namely: (a) the reason for the postponement and (b) the merits of the case of
movant.6
In the instant case, the trial court found the reason stated in the motion of counsel for respondent to cancel the pre-trial to be without merit. Counsel's explanation
that he had to go to by boat as early as 25 March 1979 to fetch his wife and accompany her to a wedding in Dumaguete City on 27 April 1979 where she was
one of the principal sponsors, cannot be accepted. We find it insufficient to justify postponement of the pre-trial, and the Court of Appeals did not act wisely in
overruling the denial. We sustain the trial court and rule that it did not abuse its discretion in denying the postponement for lack of merit. Certainly, to warrant a
postponement of a mandatory process as pre-trial would require much more than mere attendance in a social function. It is time indeed we emphasize that there
should be much more than mere perfunctory treatment of the pre-trial procedure. Its observance must be taken seriously if it is to attain its objective, i.e., the
speedy and inexpensive disposition of cases.
Moreover, the trial court denied the motion for postponement three (3) days before the scheduled pre-trial. If indeed, counsel for respondent could not attend the
pre-trial on the scheduled date, respondent at least should have personally appeared in order not to be declared as in default. But, since nobody appeared for
him, the order of the trial court declaring him as in default and directing the presentation of petitioner's evidence ex parte was proper.7
With regard to the merits of the judgment of the trial court by default, which respondent appellate court did not touch upon in resolving the appeal, the Court
holds that on the basis of the pleadings of the parties and the evidence presented ex parte, petitioner and respondents are co-owners of subject house and lot in
equal shares; either one of them may demand the sale of the house and lot at any time and the other cannot object to such demand; thereafter the proceeds of
the sale shall be divided equally according to their respective interests.
Private respondent and his family refuse to pay monthly rentals to petitioner from the time their father died in 1975 and to vacate the house so that it can be sold
to third persons. Petitioner alleges that respondent's continued stay in the property hinders its disposal to the prejudice of petitioner. On the part of petitioner, he
claims that he should be paid two-thirds (2/3) of a monthly rental of P2,400.00 or the sum of P1,600.00.
In resolving the dispute, the trial court ordered respondent to vacate the property so that it could be sold to third persons and the proceeds divided between them
equally, and for respondent to pay petitioner one-half (1/2) of P2,400.00 or the sum of P1,200.00 as monthly rental, conformably with their stipulated sharing
reflected in their written agreement.
We uphold the trial court in ruling in favor of petitioner, except as to the effectivity of the payment of monthly rentals by respondent as co-owner which we here
declare to commence only after the trial court ordered respondent to vacate in accordance with its order of 26 July 1979.
Article 494 of the Civil Code provides that no co-owner shall be obliged to remain in the co-ownership, and that each co-owner may demand at any time partition
of the thing owned in common insofar as his share is concerned. Corollary to this rule, Art. 498 of the Code states that whenever the thing is essentially,
indivisible and the co-owners cannot agree that it be, allotted to one of them who shall indemnify the others, it shall be sold and its proceeds accordingly
distributed. This is resorted to (1) when the right to partition the property is invoked by any of the co-owners but because of the nature of the property it cannot be
subdivided or its subdivision would prejudice the interests of the co-owners, and (b) the co-owners are not in agreement as to who among them shall be allotted
or assigned the entire property upon proper reimbursement of the co-owners. In one case,8 this Court upheld the order of the trial court directing the holding of a
public sale of the properties owned in common pursuant to Art. 498 of the Civil Code.
However, being a co-owner respondent has the right to use the house and lot without paying any compensation to petitioner, as he may use the property owned
in common long as it is in accordance with the purpose for which it is intended and in a manner not injurious to the interest of the other co-owners. 9 Each co-
owner of property held pro indiviso exercises his rights over the whole property and may use and enjoy the same with no other limitation than that he shall not
injure the interests of his co-owners, the reason being that until a division is made, the respective share of each cannot be determined and every co-owner
exercises, together with his co-participants joint ownership over the pro indiviso property, in addition to his use and enjoyment of the
same. 10
Since petitioner has decided to enforce his right in court to end the co-ownership of the house and lot and respondent has not refuted the allegation that he has
been preventing the sale of the property by his continued occupancy of the premises, justice and equity demand that respondent and his family vacate the
property so that the sale can be effected immediately. In fairness to petitioner, respondent should pay a rental of P1,200.00 per month, with legal interest; from
the time the trial court ordered him to vacate, for the use and enjoyment of the other half of the property appertaining to petitioner.
When petitioner filed an action to compel the sale of the property and the trial court granted the petition and ordered the ejectment of respondent, the co-
ownership was deemed terminated and the right to enjoy the possession jointly also ceased. Thereafter, the continued stay of respondent and his family in the
house prejudiced the interest of petitioner as the property should have been sold and the proceeds divided equally between them. To this extent and from then
on, respondent should be held liable for monthly rentals until he and his family vacate.
WHEREFORE, the petition is GRANTED. The assailed Decision of the Court of Appeals dated 16 October 1986 is REVERSED and SET ASIDE. The decision of
the trial court in Civil Case No. 69.12-P dated 16 July 1979 is REINSTATED, with the modification that respondent Senen B. Aguilar is ordered to vacate the
premises in question within ninety (90) days from receipt of this and to pay petitioner Virgilio B. Aguilar a monthly rental of P1,200.00 with interest at the legal rate
from the time he received the decision of the trial court directing him to vacate until he effectively leaves the premises.
The trial court is further directed to take immediate steps to implement this decision conformably with Art. 498 of the Civil Code and the Rules of Court. This
decision is final and executory.
SO ORDERED.
Cruz, Davide, Jr., Quiason, JJ., concur.
# Footnotes
1 Page 97, Rollo.
2 Presumable per month although the decision does not so specify.
3 Jungco v. Court of Appeals, G.R. No. 78051, 8 November 1989, 179 SCRA 213.
4 Sec. 2, Rule 20, Rules of Court; Insular Veneer v. Plan, G.R. L-40155, 10 September 1976, 73 SCRA 1.
5 Pacweld Steel Corp. v. Asia Steel Corp. No. L-26325, 15 November 1982, 118 SCRA 229.
6 Guzman v. Elbinias; G.R. No. 57395, 17 April 1989, 172 SCRA 240.
7 Ravelo v. Court of Appeals, No. L-40111, 27 October 1983, 125 SCRA 366.
8 Reyes v. Concepcion, G.R. No. 56550, 1 October 1990, 190 SCRA 171.

SUPREME COURT
Manila
EN BANC
G.R. No. L-25014 October 17, 1973
DOLORES LAHORA VDA. DE CASTRO, ARSENIO DE CASTRO, JR., WILFREDO DE CASTRO, IRINEO DE CASTRO and VIRGINIA DE CASTRO
ALEJANDRO, (in substitution for the deceased defendant-appellant ARSENIO DE CASTRO, SR.)., petitioners,
vs.
GREGORIO ATIENZA, respondent.
Arsenio de Castro, Jr. and F.T. Papa for petitioners.
Dakila Castro and Z.D. de Mesa for respondent.
TEEHANKEE, J.:
The Court rejects petitioners' appeal as without merit and affirms the judgment of the appellate court. Petitioners' predecessor-in-interest as co-owner of an
undivided one-half interest in the fishpond could validly lease his interest to a third party, respondent Atienza, independently of his co-owner (although said co-
owner had also leased his other undivided one-half interest to the same third party) and could likewise by mutual agreement independently cancel his lease
agreement with said third party. Said predecessor-in-interest (and petitioners who have substituted him as his heirs) therefore stands liable on his express
undertaking to refund the advance rental paid to him by the lessee on the cancelled lease and cannot invoke the non-cancellation of the co-owner's lease to
elude such liability.
The Court of Appeals, in its decision affirming in toto the judgment of the Manila court of first instance ordering therein defendant-appellant Arsenio de Castro, Sr.
(now deceased and substituted by above-named petitioners as his heirs) "to return to the plaintiff (respondent) Gregorio Atienza the sum P2,500.00 with legal
interest from the date of the filing of complaint until fully paid plus the sum of P250.00 as attorney's fees and the costs of the suit", found the following facts to
undisputed:
On January 24, 1956 the brothers Tomas de Castro and Arsenio de Castro, Sr. leased to plaintiff a fishpond containing an area of 26
hectares situated in Polo, Bulacan and forming part of a bigger parcel of land covered by Transfer Certificate of Title No. 196450 of the
registry of the property of Bulacan. The lessors are co-owners in equal shares of the leased property.
According to the contract of lease (Exh. 1) the term of the lease was for five years from January 24, 1956 at a rental of P5,000 a year, the
first year's rental to be paid on February 1, 1956, the second on February 1, 1957 and the rental for the last three years on February 1,
1958. The first year's rental was paid on time.
In the meantime, Tomas de Castro died.
In the month of November, 1956, plaintiff as lessee and defendant Arsenio de Castro, Sr. as one of the lessors, agreed to set aside and
annul the contract of lease and for this purpose an agreement (Exh. A) was signed by them, Exhibit A as signed by plaintiff and defendant
shows that Felisa Cruz Vda. de Castro, widow of Tomas de Castro, was intended to be made a party thereof in her capacity as
representative of the heirs of Tomas Castro.
Condition No. 2 of Exhibit A reads as follows:
"2. Na sa pamamagitan nito ay pinawawalang kabuluhan namin ang nasabing kasulatan at nagkasundo kami na ang bawat isa sa amin ni
Arsenio de Castro at Felisa Cruz Vda. de Castro ay isauli kay GREGORIO ATIENZA ang tig P2,500.00 o kabuuang halagang P5,000.00
na paunang naibigay nito alinsunod sa nasabing kasulatan; na ang nasabing tig P2,500.00 ay isasauli ng bawat isa sa amin sa o bago
dumating ang Dec. 30, 1956."
Felisa Cruz Vda. de Castro refused to sign Exhibit A. Defendant did not pay the P2,500.00 which under the above-quoted paragraph of
Exhibit A, he should have paid on December 30, 1956. Demand for payment was made by plaintiff's counsel on January 7, 1957 but to no
avail, hence the present action.
On the conflicting contentions between the parties as to who between them would attend to securing the signature of Mrs. Felisa Cruz Vda. de Castro (widow of
Tomas de Castro) to the agreement of cancellation of the lease with respondent Atienza, the appellate court found that "the testimony of the defendant (Arsenio
de Castro, Sr.) ... supports the contention of the plaintiff (Atienza) "that it was the defendant Arsenio who was interested and undertook to do so, citing Arsenio's
own declaration that "I agreed to sign this document (referring to the cancellation) because of my desire to cancel our original agreement" and that his purpose in
obtaining the cancellation of said lease agreement with plaintiff Atienza was "(B)ecause I had the intention of having said fishpond leased to other persons and I
cannot lease it to third parties unless I can secure the signature of Felisa Vda. de Castro."
The appellate court thus held in effect that as Arsenio "was the one interested in cancelling the lease (Exh. 1), it stands to reason that he most probably
undertook to obtain the signature of Mrs. Castro [widow and successor-in-interest of his brother Tomas]" and that he could not invoke his own failure to obtain
such signature to elude his own undertaking and liability to refund respondent (plaintiff) his share of the rental paid in advance by respondent on the cancelled
lease in the sum of P2,500.00.
The appellate court furthermore correctly held that the consent or concurrence of Felisa Vda. de Castro (as co-owner in succession of Tomas) was not an
essential condition to the validity and effectivity of the agreement of cancellation of the lease (Exhibit A) as between Arsenio and respondent-lessee, contrary to
petitioners' claim, holding that "(S)ince there is no specific provision in Exhibit A supporting defendant's claim, we are not prepared to supply such condition
unless the same can be deduced from other evidence or unless the terms of Exhibit A cannot be performed by plaintiff and defendant without Mrs. Castro being
bound as a party thereto."
The issue is simply reduced to whether Arsenio as co-owner of the fishpond owned pro-indiviso by him with his brother Tomas (succeeded by Felisa Vda. de
Castro) could validly lease his half-interest to a third party (respondent Atienza) independently of his
co-owner, and in case his co-owner also leased his other half interest to the same third party, whether Arsenio could cancel his own lease agreement with said
third party?
The appellate court correctly resolved the issue thus: "Our view of the contract of lease Exhibit 1 is that each of the Castro brothers, leased his undivided one-
half interest in the fishpond they owned in common to the plaintiff. Could one of them have validly leased his interest without the other co-owner leasing his own?
The answer to this is given by appellant in his own brief (p. 14) when he said that it would result in a partnership between the lessee and the owner of the other
undivided half. If the lease could be entered into partially by one of the co-owners, insofar as his interest is concerned, then the lease, Exhibit 1, can also be
cancelled partially as between plaintiff and defendant. Therefore, we conclude that the consent of Mrs. Felisa Cruz Vda. de Castro is not essential for the
cancellation of the lease of defendant's one-half undivided share in the fishpond to plaintiff."
The appellate court's judgment is fully supported by the Civil Code provisions on the rights and prerogatives of co-owners, and specifically by Article 493 which
expressly provides that
Art. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto, and he may therefore
alienate, assign or mortgage it, and even substitute another person in its enjoyment, except when personal rights are involved. But the
effect of the alienation or the mortgage, with respect to the co-owners, shall be limited to the portion which may be alloted to him in the
division upon the termination of the co-ownership. *
ACCORDINGLY, the appealed judgment is hereby affirmed with costs against petitioners.
Makalintal, Actg. C.J., Zaldivar, Castro, Fernando, Barredo, Makasiar, Antonio and Esguerra, JJ., concur.

SUPREME COURT
Manila
EN BANC
G.R. No. L-24419 July 15, 1968
LEONORA ESTOQUE, plaintiff-appellant,
vs.
ELENA M. PAJIMULA, assisted by her husband CIRIACO PAJIMULA, defendants-appellees.
Jesus P. Mapanao for plaintiff-appellant.
Vergara and Dayot for defendants-appellees.
REYES, J.B.L., J.:
Direct appeal from an order of the Court of First Instance of La Union, in its Civil Case No. 1990,
granting a motion to dismiss the complaint for legal redemption by a co-owner (retracto legal de
comuneros) on account of failure to state a cause of action.
The basic facts and issues are stated in the decision appealed from, as follows:
Plaintiff based her complaint for legal redemption on a claim that she is a co-owner of Lot No.
802, for having purchased 1/3 portion thereof, containing an area of 640 square meters as
evidenced by a deed of sale, Annex "A", which was executed on October 28, 1951 by Crispina
Perez de Aquitania, one of the co-owners, in her favor.
On the other hand, the defendant, who on December 30, 1959 acquired the other 2/3 portion of
Lot No. 802 from Crispina Aquitania and her children, claimed that the plaintiff bought the 1/3
southeastern portion, which is definitely identified and segregated, hence there existed no co-
ownership at the time and after said plaintiff bought the aforesaid portion, upon which right of
legal redemption can be exercised or taken advantage of.
From the complaint, it would appear that Lot No. 802 of the Cadastral survey of Rosario,
covered by original certificate of title No. RO-2720 (N.A.) was originally owned by the late
spouses, Rosendo Perez and Fortunata Bernal, who were survived by her children, namely,
Crispina Perez, Lorenzo Perez and Ricardo Perez. Ricardo Perez is also now dead. On October
28, 1951, Crispina P. Vda. de Aquitania sold her right and participation in Lot No. 802
consisting of 1/3 portion with an area of 640 square meters to Leonora Estoque (Annex A of the
complaint). On October 29, 1951, Lorenzo Perez, Crispina Perez and Emilia P. Posadas, widow
of her deceased husband, Ricardo Perez for herself and in behalf of her minor children,
Gumersindo, Raquel, Emilio and Ricardo, Jr., executed a deed of extrajudicial settlement
wherein Lorenzo Perez, Emilia P. Posadas and her minor children assigned all their right,
interest and participation in Lot No. 802 to Crispina Perez (Annex B of the complaint). On
December 30, 1959, Crispina Perez and her children Rosita Aquitania Belmonte, Remedios
Aquitania Misa, Manuel Aquitania, Sergio Aquitania and Aurora Aquitania sold to Elena
Pajimula, the remaining 2/3 western portion of Lot No. 802 with an area of 958 square meters
(Annex C of the complaint).
The action of the plaintiff is premised on the claim of co-ownership. From the deed of sale
executed in favor of the plaintiff, it can be seen that the 1/3 portion sold to plaintiff is definitely
identified as the 1/3 portion located on the southeastern part of Lot No. 802 and specifically
bounded on the north by De Guzman Street, on the east by Posadas Street, on the south by Perez
Street, and on the west by remaining portion of the same lot, which contained an area of 640
square meters. And in the deed of sale executed by Crispina Perez and her children in favor of
defendant Elena Pajimula over the remaining 2/3 portion of Lot No. 802, said portion is
identified as the western portion of Lot No. 802 which is bounded on the north by De Guzman
Street, on the east by properties of Leonarda Estoque, on the south by the national road and on
the west by Lots Nos. 799 and 801, containing an area of 598 square meters.
The appellant's stand is that the deed in her favor was inoperative to convey the southeastern third of
Lot 802 of the Rosario Cadastre notwithstanding the description in the deed itself, for the reason that
the vendor, being a mere co-owner, had no right to sell any definite portion of the land held in common
but could only transmit her undivided share, since the specific portion corresponding to the selling co-
owner is not known until partition takes place (Lopez vs. Ilustre, 5 Phil. 567; Ramirez vs. Bautista, 14
Phil. 528). From this premise, the appellant argues that the sale in her favor, although describing a
definite area, should be construed as having conveyed only the undivided 1/3 interest in Lot 802 owned
at the time by the vendor, Crispina Perez Vda. de Aquitania. Wherefore, when the next day said vendor
acquired the 2/3 interest of her two other co-owners, Lot 802 became the common property of appellant
and Crispina Perez. Therefore, appellant argues, when Crispina sold the rest of the property to appellee
Pajimula spouses, the former was selling an undivided 2/3 that appellant, as co-owner, was entitled to
redeem, pursuant to Article 1620 of the New Civil Code.
ART. 1620. A co-owner of a thing may exercise the right of redemption in case the shares of all
the other co-owners or of any of them, are sold to a third person. If the price of the alienation is
grossly excessive the redemptioner shall pay only a reasonable one.
Should two or more co-owners desire to exercise the right of redemption, they may only do so
in proportion to the share they may respectively have in the thing owned in common.
The lower court, upon motion of defendant, dismissed the complaint, holding that the deeds of sale
show that the lot acquired by plaintiff Estoque was different from that of the defendants Pajimula;
hence they never became co-owners, and the alleged right of legal redemption was not proper. Estoque
appealed.
We find no error in the order of dismissal, for the facts pleaded negate the claim that appellant Estoque
ever became a co-owner of appellees Pajimula.
(1) The deed of sale to Estoque (Annex A of the complaint) clearly specifies the object sold as the
southeastern third portion of Lot 802 of the Rosario Cadastre, with an area of 840 square meters, more
or less. Granting that the seller, Crispina Perez Vda. de Aquitania could not have sold this particular
portion of the lot owned in common by her and her two brothers, Lorenzo and Ricardo Perez, by no
means does it follow that she intended to sell to appellant Estoque her 1/3 undivided interest in the lot
forementioned. There is nothing in the deed of sale to justify such inference. That the seller could have
validly sold her one-third undivided interest to appellant is no proof that she did choose to sell the
same. Ab posse ad actu non valet illatio.
(2) While on the date of the sale to Estoque (Annex A) said contract may have been ineffective, for lack
of power in the vendor to sell the specific portion described in the deed, the transaction was validated
and became fully effective when the next day (October 29, 1951) the vendor, Crispina Perez, acquired
the entire interest of her remaining co-owners (Annex B) and thereby became the sole owner of Lot No.
802 of the Rosario Cadastral survey (Llacer vs. Muñoz, 12 Phil. 328). Article 1434 of the Civil Code of
the Philippines clearly prescribes that — .
When a person who is not the owner of a thing sells or alienates and delivers it, and later the
seller or grantor acquires title thereto, such title passes by operation of law to the buyer or
grantee."
Pursuant to this rule, appellant Estoque became the actual owner of the southeastern third of lot 802 on
October 29, 1951. Wherefore, she never acquired an undivided interest in lot 802. And when eight
years later Crispina Perez sold to the appellees Pajimula the western two-thirds of the same lot,
appellant did not acquire a right to redeem the property thus sold, since their respective portions were
distinct and separate.
IN VIEW OF THE FOREGOING, the appealed order of dismissal is affirmed. Costs against appellant
Estoque.1äwphï1.ñët
Concepcion, C.J., Dizon, Makalintal, Zaldivar, Sanchez, Castro, Angeles and Fernando, JJ., concur.
THIRD DIVISION
[G.R. No. 139524. October 12, 2000]
PHILIP C. SANTOS and HEIRS OF ELISEO M. SANTOS, petitioners, vs. LADISLAO M. SANTOS
represented herein by his Attorney-In-Fact NOE M. SANTOS, respondents.
DECISION
GONZAGA-REYES, J.:
Before us is a petition for review on certiorari assailing the January 8, 1999 Decision[1]of the Court of
Appeals[2] in CA-G.R. CV No. 48576 which reversed the decision[3] of the Regional Trial Court[4] of
San Mateo, Rizal (Branch 76) and which declared Ladislao M. Santos and Eliseo M. Santos as entitled
to pro indiviso shares in the property of Isidra M. Santos. The dispositive portion of the assailed
Decision reads:
IN THE LIGHT OF ALL THE FOREGOING, the appeal is granted. The Decision appealed from is
REVERSED. Judgment is hereby rendered in favor of the Appellant and against the Appellees as
follows:
1. Tax Declaration Nos. 04-0566 and 04-0016, Exhibits 8 and 9, under the name of Appellee Philip
Santos and the Deed of Sale of Unregistered Residential Land (Exhibit 15) are hereby declared
inefficacious insofar as the undivided one-half portion of the Appellant in the Isidra property is
concerned;
2. The Appellant and the Appellee Eliseo Santos are hereby declared each entitled to pro indiviso shares
in the Isidra property;
3. The Court a quo is hereby ordered to effect the partition of the subject lot conformably with Rule 69
of the 1997 Rules of Civil procedure.
Without pronouncement as to costs.
SO ORDERED.
The following facts as narrated by the Court of Appeals are undisputed:
On May 13, 1993, Ladislao Santos, a resident in the United States of America, the Appellant in the
present recourse, through his Attorney-in-fact, Noe Santos, filed a complaint, with the Regional Trial
Court of Rizal, against his brother, Eliseo Santos and the latters son, Philip Santos, the Appellees in the
present recourse, for Judicial Partition.
The Appellant averred, inter alia, in his complaint, that, when his and Eliseo Santos sister, Isidra
Santos, died intestate on April 1, 1967, without any issue, they inherited her parcel of land covered by
Tax Declaration 1115, issued by the Provincial Assessor of Rizal located along General Luna Street,
Gitnangbayan, San Mateo, Rizal; that, sometime, in February 1, 1993, the Appellant discovered that
Tax Declaration No. 1115 had been cancelled by Tax Declaration No. 7892, under the name of his
nephew, Appellee Philip Santos, and that, on December 16, 1980, Virgilio Santos executed a Deed of
Absolute Sale of Unregistered Residential Land on the basis of which Tax Declaration No. 04-0016
was issued to the Appellee Philip Santos. The Appellant prayed the Court that judgment be rendered in
his favor as follows:
WHEREFORE, it is most respectfully prayed of this Honorable Court that after due hearing judgment
be rendered as follows:
(1) Ordering the division of the intestate estate of the late Isidra Santos between petitioner and
respondent Eliseo M. Santos;
(2) Declaring Tax Declaration No. 04-0015 in the name of Virgilio Santos as null and void;
(3) Declaring the Deed of Sale dated December 11, 1980, executed by Virgilio Santos in favor of Philip
Santos as null and void;
(4) Declaring Tax Declaration No. 04-00161 (sic) in the name of Philip Santos as null and void;
Petitioner prays for other relief which this Court may deem just and equitable in the premises. (at page
3, Records)
In their Answer to the complaint, the Appellees admitted that, upon the demise of Isidra Santos, the
Appellant and the Appellee Eliseo Santos inherited the said property and the latters share in Lot 1522
of the San Mateo Cadastre, which they and their sister, Isidra Santos, inherited from their father,
Bonifacio Santos who died before the outbreak of the Second World War but insisted that the Appellant
and the Appellee Eliseo Santos had agreed, in 1969, after the death of Isidra Santos, on April 1, 1967,
to partition Lot 1522, under which a portion of Lot 1522, with an area of 3,387 square meters, was
adjudicated to the Appellant, and a portion of the same lot, with an area of 3,000 square meters, was
conveyed to the Appellee Eliseo Santos and the parcel of land left by Isidra Santos was conveyed by
Appellee Eliseo Santos to Virgilio Santos, who, from infancy had been under the care of Isidra Santos,
to approximately equalize the share of the Appellee Eliseo Santos in the estate of Bonifacio Santos. The
Appellees further averred that Appellees had acquired the Isidra property by acquisitive prescription.
Neither Appellant Ladislao Santos nor Appellee Eliseo Santos testified in the Court a quo. Although the
Appellee Eliseo Santos was present during the proceeding, he did not testify anymore because of
senility being then about 88 years old. Virginia Santos, the widow of Virgilio Santos, testified, in the
Court a quo, and declared, that she and Virgilio Santos married, on February 12, 1967, and resided in
the house of Isidra Santos until the sale, by Virgilio Santos, of the Isidra property to his brother, the
Appellee Philip Santos and in exchange with the property of the latter located at Kambal Street,
Gitnangbayan, San Mateo, Rizal, where the couple and, after Virgilio Santos death, on April 5, 1984,
had been residing. Virginia Santos likewise declared that Appellant Ladislao Santos and the Appellee
Eliseo Santos had an agreement, notarized by Atty. Sixto Natividad, that Virgilio Santos and Virginia
Santos became the new owners of the Isidra property. The copy of the Agreement given Virgilio Santos
was xeroxed and the xerox copy was given to Appellee Philip Santos while Virgilio Santos copy was
filed with the Provincial Assessors Office on the basis of which, Tax Declaration No. 7892 was issued
under his name. The Appellee Philip Santos, on the other hand, declared that the Appellant Ladislao
Santos and the Appellee Eliseo Santos and their respective Spouses executed a Combined Deed of
Partition, in 1969, covering the Lot 1522 and the Isidra Property, wherein it was covenanted that the
Isidra Property was deeded to Appellee Eliseo Santos. The Appellee Philip Santos further declared that
he was then about 20 years old, and saw the said Combined Deed of Partition in the possession of
Appellee Eliseo Santos.
After due proceedings, the Court a quo promulgated a Decision dismissing Appellants complaint on the
ground that the Appellant failed to adduce proof of his entitlement to the relief prayed for by him and
on the ground of acquisitive prescription.
The present recourse stemmed from the following factual backdrop - when Bonifacio Santos died
intestate, he was survived by his two (2) sons, namely Ladislao Santos, the Appellant in the present
recourse, and Appellee Eliseo Santos, one of the Appellees in the present recourse and their sister,
Isidra Santos. The latter was the owner of a parcel of land, hereinafter referred to, for brevitys sake, as
the Isidra property, located in General Luna Street, Gitnangbayan, San Mateo, Rizal, with an area of
391 square meters, more or less, covered by Tax Declaration No. 655, located in front of but oblique to
and about fifty (50) meters away from the property, with an area of 6,340 square meters, covered by
Tax Declaration No. 383 of the Provincial Assessors Office, (Exhibit L-3). She had a house
constructed on her lot where she had been residing ever since.
In the meantime, on November 10, 1964, a cadastral survey of lands in San Mateo, Rizal, was
undertaken. The property, with an area of 6,340 square meters was identified as Lot 1522, Cadastre No.
375-D. Tax Declaration No. 655, covering the Isidra Property was later cancelled by Tax Declaration
1115 under her name, effective 1966 (Exhibit 4).
On May 29, 1967, the Appellant and his wife, Leonila Mateo executed a Deed of Absolute
Conveyance with Right of Way over the southwestern portion of Lot 1522, with an area of 3,000
square meters, in favor of his brother, the Appellee Eliseo Santos for the price of P500.00, with a
provision for a right of way.
On April 1, 1967, Isidra Santos died intestate and was survived by her two (2) brothers, the Appellant
and the Appellee Eliseo Santos.
On September 9, 1969, the Provincial Assessor issued Tax Declaration No. 7892, over the Isidra
property, under the name of Virgilio Santos and Virginia Santos, thereby canceling Tax Declaration No.
1115 under the name of Isidra Santos (Exhibit 5). In 1972, Tax Declaration No. 7892 was cancelled by
Tax Declaration No. 5043, still under the names of Virgilio Santos and Virginia Santos, effective 1974
(Exhibit 4) and by Tax Declaration No. 04-0015, effective 1980 (Exhibit 7).
On December 16, 1980, Virgilio Santos executed a Deed of Absolute Sale of Unregistered
Residential Land in favor of his brother, the Appellee Philip Santos, over the Isidra Property at the
time covered by Tax Declaration No. 04-0015, for the price of P24,460.00 (Exhibit H). On the basis of
said deed, Tax Declaration No. 04-0015 was cancelled by Tax Declaration No. 04-0566, under the
name of Appellee Philip Santos, effective 1981 (Exhibit E). The Spouses Virgilio Santos vacated the
said property and resided at Kambal Street, Gitnangbayan I, San Mateo, Rizal formerly owned by
Philip Santos . The latter, in turn, had the house on the lot demolished and had his shop installed in the
Isidra Property. Since then, Philip Santos had been paying the realty taxes therefor. On April 5, 1984,
Virgilio Santos died intestate and was survived by his wife, Virginia Santos. In the meantime, the
Appellant and Appellee Philip Santos left the Philippines and resided in the United States of America.
Despite the Deed of Absolute Conveyance With Right of Way executed by the Appellant in favor of
Appellee Eliseo Santos, the children of the Appellant and their uncle, the Appellee Eliseo Santos,
signed an Application, on September 26, 1984 and filed the same with the Regional Trial Court of Rizal
(at San Mateo) for the registration of their title over Lots 1522 and 2433 of Cadastre 375-D. The
Applicants alleged, inter alia in said application, that Noe Santos, et al., (children of Ladislao Santos),
were occupying a portion of Lot 1522, with an area of 3,430 square meters, while Appellee Eliseo
Santos was occupying a portion of the same lot, with an area of 3,000 square meters, more or less, as a
site of cockpit building (Exhibit 5). On July 16, 1986, the Regional Trial Court promulgated a Decision
granting the application, the decretal portion of which reads as follows:
WHEREFORE, this Court hereby declares herein applicants the absolute owners of that
parcels of land identified as Lot 1522 and Lot 2433, both of Plan AP-04-001205 marked as
Exhibit D and in consequence thereof, it is hereby Ordered that the said parcels of land be
registered in the names of the applicants, to wit:
1. Noe Santos, married to Felicidad Santos; Asuncion S. Ramos, married to Virgilio Ramos;
LADISLAO SANTOS, JR., married to Regina Linco; NELIA S. MACALALAD, married to
Jacinto Macalalad; OFELIA SANTOS, single; RECTO SANTOS, single, all of legal ages,
Filipino citizens and all are residents of Gen. Luna St., San Mateo, Rizal, an undivided
portion of 3,387 square meters of that parcel of land identified as Lot 1522 of Plan AP-04-
001205, marked as Exhibit D and undivided rights, interest and participation of that parcel of
land identified as Lot 2433 of the above-mentioned Plan with an area of 43 square meters, all
in equal shares (pro-indiviso);
2. ELISEO SANTOS, of legal age, Filipino citizen, married to Virginia Santos and resident of
Gen. Luna St., San Mateo, Rizal, an undivided portion of 3,000 square meters of that parcel of
land identified as Lot 1522 of Plan AP-04-001205.
Once this Decision becomes final, let an Order of the issuance of a Decree of Registration
issue (Exhibits 26-E and 26-F)
On the basis of the Decision of the Court, Noe Santos, et al., and Appellee Eliseo Santos, were issued
an Original Certificate of Title No. ON-1146, on November 18, 1986 over Lot 1522 (Exhibit M).
Noe Santos, for and in behalf of his siblings and Appellee Eliseo Santos had a subdivision plan
prepared, subdividing Lot 1522 into two (2) subdivision lots, namely, Lot 1522-A, with an area of
3,000 square meters (Exhibit 15-A) and Lot 1522-B, with an area of 3,387 square meters (Exhibit
15-B).
In June, 1987, Noe Santos and his siblings and their uncle, Appellee Eliseo Santos, executed a
Partition Agreement adjudicating Lot 1522-A, with an area of 3,000 square meters unto Appellee
Eliseo Santos, and Lot 1522-B, with an area of 3,387 square meters, unto Noe Santos, et al., (Exhibit
13). On the basis of said deed, Original Certificate of Title No. ON-1146 was cancelled and Transfer
Certificate of Title No. 148892 was issued to Appellee Eliseo Santos over Lot 1522-A (Exhibit 11).
On March 17, 1993, Appellant Ladislao Santos, through counsel, sent a letter to the Appellee Philip
Santos alleging that the Appellant had discovered that the Isidra property inherited by Appellant and
Appellee Eliseo, had been declared, for taxation purposes, under the name of Appellee Philip Santos,
on the basis of a Deed of Sale executed by Virgilio Santos and suggesting a conference regarding the
matter (Exhibit J). The Appellee Philip Santos wrote to the counsel of the Appellant, declaring, inter
alia, that the Isidra property, with the portion and Lot 1522-A, with an area of 3,000 square meters,
formed part of the share of Appellee Eliseo Santos in the estate of his father, Bonifacio Santos; that
Appellee Eliseo Santos transferred the Isidra property to his son, Virgilio Santos, who, in turn, sold the
said property to Appellee Philip Santos, for the amount of P24,600.00, as part of the consideration of
the conveyance, by Appellee Philip Santos, of his property located in Kambal Street, Gitnangbayan,
San Mateo, Rizal, where Virgilio Santos widow and family had been residing (Exhibit 24) and the
redemption, by Appellee Philip Santos, of the Mortgage of the property by Virgilio Santos from the
Rural Bank of San Mateo.[5]
On May 13, 1993, herein respondent Ladislao Santos filed an action for the judicial partition of the
Isidra property. After due proceedings, the trial court promulgated a decision dismissing Ladislaos
complaint on the ground that the latter failed to adduce proof of his entitlement to the relief prayed for
by him and on the ground of acquisitive prescription. Specifically, the trial court cited the following
reasons: (1) the subject property was registered/declared for taxation purposes only in the name of
Isidra Santos; (2) the fact of co-ownership thereof by reason of inheritance was not reflected in the tax
declaration; (3) there was no proof presented that the cancellation of the tax declaration in Isidras name
and the issuance of another in Virgilios name had been effected through fraud and misrepresentation;
(4) there is no proof that a fake document was presented to the provincial assessor for the cancellation
of the tax declaration and the issuance of another in lieu thereof as all assessment records were
destroyed by the fire which gutted the office of the provincial assessor; and (5) from the time of Isidras
death in 1967 up to May 13, 1993 when this case was filed, acquisitive prescription may have already
set in.
In due course, the Court of Appeals, as earlier stated, rendered its assailed Decision granting the appeal,
reversing the trial courts decision and declaring that Ladislao Santos and Eliseo Santos are each entitled
to pro indiviso shares in the Isidra property.
Hence, this appeal to this Court under Rule 45 of the Rules of Court raising the following issues:
I. THE HONORABLE COURT OF APPEALS ERRED IN NOT UPHOLDING THE LEGALITY
AND REGULARITY OF THE TRANSFER OF ISIDRA PROPERTY TO VIRGILIO SANTOS AND
LATER TO PETITIONER PHILIP C. SANTOS.
II. THE HONORABLE COURT OF APPEALS ERRED IN AWARDING ONE-HALF (1/2) PORTION
PRO INDIVISO OF ISIDRA PROPERTY IN FAVOR OF RESPONDENT DESPITE AND INSPITE
OF THE ABSENCE OF PROOF OF ALLEGED FRAUD AND MISREPRESENTATION IN THE
CANCELLATION OF THE TAX DECLARATION IN ISIDRAS NAME ANT ITS SUBSEQUENT
TRANSFER TO VIRGILIO SANTOS NAME.
III. THE HONORABLE COURT OF APPEALS ERRED IN NOT UPHOLDING THAT
ACQUISITIVE PRESCRIPTION HAS ALREADY SET IN AS TO BAR THE INSTANT ACTION
FOR PARTITION.
IV. THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING THAT RESPONDENTS
RIGHT TO FILE THIS INSTANT ACTION FOR PARTITION HAS ALREADY PRESCRIBED.
V. THE HONORABLE COURT OF APPEALS ERRED IN NOT HOLDING THAT LACHES HAS
ALREADY SET IN AS TO BAR RESPONDENT IN ASSERTING HIS CLAIM UNDER THE
PETITION.
VI. THE HONORABLE COURT OF APPEALS ERRED IN NOT UPHOLDING THE RIGHT OF
PETITIONER PHILIP SANTOS AS BUYER IN GOOD FAITH AND FOR VALUE.[6]
The material aspects of the issues are closely intertwined; hence, they are consolidated into two main
issues specifically dealing with the following subjects: (1) the validity of the transfers of the property
originally belonging to Isidra M. Santos (the Isidra property) from Eliseo Santos to Virgilio Santos and
then to Philip Santos; and (2) whether the action for partition is already barred by ordinary acquisitive
prescription of ten years and estoppel by laches.
The petition is not meritorious.
The controversy involves a 391 square meter parcel of land situated in San Mateo, Rizal, owned by
Isidra Santos, a spinster who died intestate and without issue in 1967. She was survived by her two
brothers, Ladislao and Eliseo. Sometime in 1993, Ladislao through his attorney-in-fact Noe M. Santos
filed an action for judicial partition of the Isidra property against his brother Eliseo and the latters son
Philip. While admitting that Ladislao and Eliseo inherited the subject Isidra property, Eliseo and Philip
submitted that Eliseo Santos and wife and Ladsilao and wife signed a document wherein Eliseo
acquired the subject lot from the combined partition of the estate of their father Bonifacio Santos and
their sister Isidra Santos. Bonifacios estate was composed of 6,387 square meters while that of Isidra
Santos is the subject property with an area of 391 square meters. Out of this combined parcels of land,
respondent got 3,387 square meters while Eliseo got 3,000 square meters and the subject Isidra
property with an area of 391 square meters. Eliseo, in turn, donated the subject Isidra property to his
son, Virgilio Santos.
Considering that petitioners Eliseo and Philip disputed the status of Ladislao as co-owner on the ground
that the brothers entered into a Combined Deed of Partition wherein the entire Isidra property was
conveyed to Eliseo, It was then incumbent upon them to present the best evidence obtainable to prove
the same. We agree with the Court of Appeals that the claim of a subsisting co-ownership by Ladislao
over the Isidra property has not been effectively refuted by Eliseo and Philip, and that Eliseo and his
successors-in-interest (Virgilio and Philip) did not acquire exclusive title over the entire Isidra property.
Petitioners insist that they have effectively refuted the co-ownership between Ladislao and Eliseo based
on a lawful document proven as follows in the court a quo: (1) the annotation at the back of Tax
Declaration No. 1115 which states: cancelled by Tax No. 7892, dated September 9, 1969, Virgilio and
Virginia Cruz-Santos; (2) Rodolfo Bautista, municipal assessor of San Mateo, Rizal testified on the
existence of the document authorizing the cancellation of Tax Declaration No. 1115 in favor of the
issuance of Tax Declaration No. 7892 in Virgilios name; (3) Virginia Santos (wife of Virgilio), Philip
and a certain Dr. Linco testified on the existence of said document. In relation to the foregoing,
petitioners argue that the Isidra property was acquired through a valid document inscribed in the tax
declaration;[7] that the existence and nature of this document was proved by testimonial evidence; and
that respondent was not able to show that the document registered with the provincial assessors office
was not the combined partition or deed of transfer by brothers Ladislao and Eliseo.
We agree with the Court of Appeals that only the original document is the best evidence of the fact as
to whether the brothers Ladislao and Eliseo Santos executed a Combined Deed of Partition wherein the
entire property of Isidra Santos was conveyed to Eliseo. In the absence of such document, petitioners
arguments regarding said partition must fail. The testimonies of Virginia Santos and Philip Santos on
the existence of and the contents of the aforesaid documents are, at most, secondary evidence, which
are inadmissible considering that the petitioners as the offerors failed to prove any of the exceptions
provided in Section 3, Rule 130 of the Rules of Court[8] and to establish the conditions for their
admissibility.[9] We quote with favor the findings of the Court of Appeals, thus:
Even if we assumed, for the nonce, that indeed, Lot 1522 was inherited by the Appellant and his
brother, the Appellee Eliseo Santos, however, we are not convinced that the Appellant and his wife
deeded to the Appellee Eliseo Santos and the latter to Virgilio Santos the Isidra Property under a Deed
of Transfer as testified to by Virginia Santos or under a Combined Deed of Partition as testified to by
Appellee Philip Santos. The Appellees never adduced in evidence any copy of the said deed executed
by the Appellant and the Appellee Eliseo Santos and their respective spouses. Since the subject of
inquiry was the subject of said deed, it was incumbent on the Appellees to adduce in evidence the
original of the deed or a copy of the original of the deed conformably with Section 3, Rule 130 of the
Rules of Evidence. The Appellees failed to do so. The Court a quo allowed the Appellees to adduce
secondary evidence to prove the contents of the said deed, but it was inappropriate for the Court a quo
to do so over the objections of the Appellant. This is so because, before the Appellees are allowed to
adduce secondary evidence to prove the contents of the original of the deed, the Appellees had to
prove, with the requisite quantum of evidence, the loss or destruction or unavailability of all the copies
of the original of the deed. As former Supreme Court Chief Justice Manuel V. Moran declared:
Where there are two or more originals, it must appear that all of them have been lost, destroyed or
cannot be produced before secondary evidence can be given of any one. For example, a lease was
executed in duplicate, one being retained by the lessor and the other by the lessee. Either copy was,
therefore, an original, and could have been introduced as evidence of the contract without the
production of the other. One of these originals could not be found. The non-production of the other was
not accounted for it was held that under these circumstances, the rule is that no secondary evidence of
the contents of either is admissible until it is shown that originals must be accounted for before
secondary evidence can be given of any one. (Moran, Comments on the Rules of Court, Volume V,
1970 ed. at pages 90-91, supra, underscoring supplied)
Indeed, before a party is allowed to adduce secondary evidence to prove the contents of the original of
the deed, the offeror is mandated to prove the following:
(a) the execution and existence of the original (b) the loss and destruction of the original or its non-
production in court; and (c) unavailability of the original is not due to bad faith on the part of the
offeror. (Francisco, Rules of Court, Part I, Volume VII, 1997 ed. at page 154).
When she testified in the Court a quo, Virginia Santos declared that there were three (3) copies of the
deed signed by the parties thereof. One copy of the deed was given to Virgilio Santos, one copy was
retained by the Appellee Eliseo Santos, and one copy was retained by Atty. Sixto Natividad, the Notary
Public. Virgilio Santos had his copy xeroxed and gave the xerox copy to Appellee Philip Santos.
Virgilio Sanots copy was later filed with the Provincial Assessors Office. x x x.
x x x x x x x x x.
When he testified in the Court a quo, the Appellee Philip Santos admitted that he saw a copy of the
deed in the possession of his father, the Appellee Eliseo Santos:
x x x x x x x x x.
While the Appellees adduced evidence that the copy filed with the Provincial Assessors Office was
burned when the Office of the Provincial Assessor was burned on April 7, 1977, however, the
Appellees failed to adduce proof that the copy in the possession of Atty. Sixto Natividad was lost or
destroyed. It bears stressing that a Notary Public is mandated, under the Notarial Law, to retain two (2)
copies of every deed involving real estate as part of his notarial record, a copy of which he is to submit
to the Notarial Section of the Regional Trial Court.
The Appellees could very well have procured, by subpoenae ad testificandum and duces tecum, the
attendance of Atty. Sixto Natividad before the Court a quo and bring with him his copy of the deed.
After all, there is no evidence on record that he was already dead or was unavailable at the time of the
trial in the Court a quo. The Appellees did not. Moreover, the Appellees failed to prove the loss or
destruction of the copy on file with the Notarial Section of the Regional Trial Court or of the copy in
the possession of the Appellee Eliseo Santos. Assuming, for the nonce, that the Appellees mustered the
requisite quantum of evidence to prove the loss or destruction of all the copies of the original of the
deed, however, Section 5 of Rule 130 of the Rules of Evidence provides that, before testimonial
evidence may be adduced to prove the contents of the original of the deed, the offeror is mandated to
prove the loss or non-availability of any copy of the original or of some authentic document reciting the
contents thereof: x x x.
x x x x x x x x x.
In the present recourse, Virginia Santos admitted that a xerox copy of the deed was given to the
Appellee Philip Santos. However, when she testified in the Court a quo, she admitted not having
inquired from the Appellee Philip Santos if he still had the xerox copy of all deeds that Virgilio gave
him. x x x.[10]
We also agree with the Court of Appeals that petitioners evidence consisting of the tax declarations in
Virgilios name and then in Philips name are not conclusive and indisputable evidence to show that the
lot in question was conveyed to Virgilio Santos, Philips predecessor-in-interest. A mere tax declaration
does not vest ownership of the property upon the declarant. Neither do tax receipts nor declarations of
ownership for taxation purposes constitute adequate evidence of ownership or of the right to possess
realty.[11]
As for the much-vaunted testimony of the municipal assessor of San Mateo, Rizal, the Court of Appeals
had this to say:
The Appellees presented Rodolfo Bautista, the representative of the Rizal Provincial Assessor, to prove
that Tax Declaration No. 7892, under the name of Virgilio Santos and Virginia Santos, cancelled Tax
Declaration No. 1115, under the name of Isidra Santos, on the basis of the Combined Deed of
Partition purportedly executed by the Appellant and his wife, in tandem with the Appellee Eliseo
Santos and his wife, which was, however, burned when the Provincial Assessors Office was gutted by
fire on April 7, 1977. However, Rodolfo Bautista himself unabashedly admitted, when he testified in
the Court a quo that he had no knowledge of the nature of the deed that was used for the cancellation of
Tax Declaration No. 1115 under the name of Isidra Santos or the previous document burned or gutted
by the fire.
Atty. Ferry:
Q: When you testified last March 14, 1994, Mr. Bautista, you declared that you assumed your position
in the Office of the Municipal Assessor only on January 6, 1982. Before that, you were not connected
with the Municipal Assessor?
A: I am not yet connected, sir.
Q: So for the first time you learned, in your official capacity, the alleged lost of all records in the Office
of the Provincial Assessor bearing dates 1977 down was only recently?
A: No, sir.
Q: When?
A: When I took over in 1982, sir.
Q: But the fact is, you will agree with me in so far as the present controversy is concerned, you have no
way of determining the particular document presented to the Office of the Provincial Assessor which
was made the basis in effecting the transfer of tax declaration in the name of Isidra Santos in favor of
Virgilio Santos marked in evidence as Exh. 4. You have no way of determining or identifying the
particular document used or presented to the Office of the Provincial Assessor which was made the
basis for the cancellation of tax declaration in the name of Isidra Santos and that paved the issuance of
the tax declaration in the name of Virgilio Santos marked in evidence by the defendants as Exh. 5. You
will not be able to know that simply on the basis of this document? You are in no position to tell or
determine what particular document was presented in the Office of the Provincial Assessor which
paved the way to the cancellation of Exh. 4 which is tax declaration no. 1115 in the name of Isidra
Santos and the issuance of another one in the name of Virgilio Santos marked in evidence as Exh. 5?
A: I do not know, sir (t.s.n. Bautista, at pages 9-10, April 18, 1994, underscoring supplied)
The Appellees can find no solstice[12] on the face of Tax Declaration No. 1115, Exhibit 4, which
contains the following entry:
Cancelled by:
Tax Declaration No. 7892
Dated: Sept. 9, 1969
Virgilio & Virginia Cruz Santos
(Exhibit 4-B)
This is so because the entry does not contain any clue of the nature of the deed, if it was a deed at all,
used for the cancellation of Tax Declaration No. 1155, the parties who executed the said deed or the
beneficiary of said deed. Indeed, the Court admitted, in its Decision, that there was no way of
identifying the document used as basis for the issuance of a new tax declaration under the name of
Virgilio Santos (t.s.n. Bautista, supra). Virgilio Santos could very well have executed a Deed of
Extra-judicial Settlement of Estate and of Self-Adjudication of Real Property covering the Isidra
Property and filed the same with the Provincial Assessor on the basis of which he was issued Tax
Declaration No. 7892 over the property. But then, such a deed did not prejudice the share of the
Appellant in the Isidra Property. It is not legally possible for one to adjudicate unto himself a property
he was not the owner of. Hence, We find and so declare that the Isidra Property remained the property
of the Appellant and the Appellee Eliseo Santos as their inheritance from Isidra Santos. As our Supreme
Court declared in an avuncular case:
Despite admission during the hearing on the identify of the land in question (see p. 21, Record on
Appeal), Marias counsel, on appeal, re-emphasized her original claim that the two parcels of land in her
possession were acquired from the Sps. Placido Biduya and Margarita Bose. However, the private
document relative to the purchase, was not produced at the trial, allegedly because they were placed in
a trunk in their house which were burned during the Japanese Occupation. In 1945, Maria sold the
riceland. No written evidence was submitted for all intents therefore, the riceland remained inherited
property (Maria Bicarme, et al., versus Court of Appeals, et al., 186 SCRA 294, at pages 298-299).
In the light of our findings and disquisitions, Virgilio Santos did not acquire title over the Isidra
Property. Hence, Virgilio Santos could not have lawfully sold the said property to his brother, the
Appellee Philip Santos. As the Latin aphorism goes: NEMO DAT QUOD NON HABET.[13]
All told, the testimonies of the prosecution witnesses, Virginia Santos, Philip Santos and Rodolfo
Bautista, on the existence of said document, specifically, the Combined Deed of Partition, cannot be
considered in favor of the petitioners, the same being, at most, secondary evidence.
Anent the second issue, petitioners insist that acquisitive prescription has already set in; and that
estoppel lies to bar the instant action for partition. According to petitioners, Virgilio Santos was already
in possession of the subject property since after the death of Isidra Santos on April 1, 1967. Thereafter,
Philip Santos took possession of the subject property on December 16, 1980 upon its sale on said date.
They reason out that more than 13 years had lapsed from April 1, 1967 to December 16, 1980; and that
more than 12 years had lapsed from the time Philip Santos took possession of the property on
December 16, 1980 up to the time Ladislao Santos filed the action for partition on May 13, 1993.
Petitioners conclude that the instant action is already barred by ordinary acquisitive prescription of ten
years. Further, it is argued that the possession of Virgilio Santos could be tacked with the possession of
Philip Santos bringing to a total of 26 years the time that elapsed before the filing of the case in 1993.
They add that these 26 years of inaction call for the application of the principle of estoppel by laches.
Considering that there was no proof that Ladislao Santos executed any Combined Deed of Partition in
tandem with the Eliseo Santos, we rule that a co-ownership still subsists between the brothers over the
Isidra property. This being the case, we apply Article 494 of the Civil Code which states that,
prescription does not run in favor of a co-owner or co-heir against his co-owners or his co-heirs so long
as he expressly or impliedly recognizes the co-ownership. In Adile vs. Court of Appeals,[14] it was held:
x x x. Prescription, as a mode of terminating a relation of co-ownership, must have been preceded by
repudiation (of the co-ownership). The act of repudiation, in turn, is subject to certain conditions: (1) a
co-owner repudiates the co-ownership; (2) such an act of repudiation is clearly made known to the
other co-owners; (3) the evidence thereon is clear and conclusive; and (4) he has been in possession
through open, continuous, exclusive, and notorious possession of the property for the period required
by law.
There is no showing that Eliseo Santos had complied with these requisites. We are not convinced that
Eliseo had repudiated the co-ownership, and even if he did, there is no showing that the same had been
clearly made known to Ladislao. As aptly observed by the Court of Appeals:
Under Article 1119 of the New Civil Code, acts of possessory character executed in virtue of license or
tolerance of the owners shall not be available for the purposes of possession.
Indeed, Filipino family ties being close and well-knit as they are, and considering that Virgilio Santos
was the ward of Isidra Santos ever since when Virgilio Santos was still an infant, it was but natural that
the Appellant did not interpose any objection to the continued stay of Virgilio Santos and his family on
the property and even acquiesce thereto. Appellant must have assumed too, that his brother, the
Appellee Eliseo Santos, allowed his son to occupy the property and use the same for the time being.
Hence, such possession by Virgilio Santos and Philip Santos of the property does not constitute a
repudiation of the co-ownership by the Appellee Eliseo Santos and of his privies for that matter. As our
Supreme Court succinctly observed:
x x x [A]nd it is probable that said conduct was simply tolerated by the plaintiffs on account of his
being their uncle, and they never thought that by said conduct the defendant was attempting to oust
them forever from the inheritance, nor that the defendant would have so intended in any way, dealing
as we do here with the acquisition of a thing by prescription, the evidence must be so clear and
conclusive as to establish said prescription without any shadow of doubt. This does not happen in the
instant case, for the defendant did not even try to prove that he has expressly or impliedly refused
plaintiffs right over an aliquot part of the inheritance. (at page 875, supra)[15]
Penultimately, the action for partition is not barred by laches. An action to demand partition is
imprescriptible or cannot be barred by laches. Each co-owner may demand at any time the partition of
the common property.[16]
As a final note, it must be stated that since Ladislao has successfully hurdled the issue of co-ownership
of the property sought to be partitioned, there is the secondary issue of how the property is to be
divided between the two brothers.[17] This Court cannot proceed forthwith with the actual partitioning
of the property involved, hence, we reiterate the order of the Court of Appeals for the trial court to
effect the partition of the subject property in conformity with Rule 69 of the 1997 Rules of Civil
Procedure.
WHEREFORE, the decision of the Court of Appeals is AFFIRMED in toto.
SO ORDERED.
Melo, (Chairman), Vitug, Panganiban, and Purisima JJ., concur.

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-39299 October 18, 1988
ISAAC, SEVERINO, MARIA, TELESFORA, FELISA, SERAPIO, SIMEON and MACARIA all
surnamed PANGAN, petitioners,
vs.
COURT OF APPEALS and TEODORA GARCIA, respondents.
Magtanggol C. Gunigundo for petitioners.
David C. Canta for private respondent.
CRUZ, J.:
The property in question is a parcel of land with an area of 635 square meters and situated in San Pascual, Obando, Bulacan. 1 It was originally owned by Leon
Hilario and is now being disputed between the herein petitioners, who are his great grandchildren by his daughter Silvestra, and the private respondent, Teodora
Garcia, who is his granddaughter by his daughter Catalina. 2
In 1964, the petitioners filed an application for the registration of the land in their names by virtue of their continuous and exclusive possession thereof since
1895, by themselves and their father and grandfather before them. After proper notices by publication and posting as required, the trial court issued an order of
general default, there being no opposition to the application, and proceeded to hear the evidence of the applicants ex-parte. On the basis thereof, the application
was approved on March 31, 1966.
On June 8, 1966, the herein private respondent filed a petition to set aside the said decision, which the trial Court granted, 3 admitting at the same time her
opposition to the application and setting the case for reception of her evidence. This evidence sought to show that the land was inherited by Leon Hilario's three
children, but the son, Felicisimo, waived his right thereto and thereby made his two sisters, Silvestra and Catalina, its exclusive co-owners. As Catalina's
daughter, she was entitled to one-half of the property, the other half going to Silvestra's heirs, the petitioners herein and the latter's
grandchildren. 4
On September 13, 1968, the trial judge issued an order dismissing the opposition and reinstating his original order of March 31,1966. 5 His reason was that
whatever rights Teodora might have had over the property had been forfeited by extinctive prescription because she had left the land in 1942 and had not since
then asserted any claim thereto until 1966.
On appeal to the respondent court, 6 this decision was reversed on the ground that the appellees had not clearly proved that they had acquired the property by
prescription. Hence, the appellant was entitled to one-half of the property as heir, conformably to her opposition in the court a quo. Their motion for
reconsideration having been denied, they have now come to this Court in a petition for review by certiorari under Rule 45 of the Rules of Court.
The petitioners' position is that the respondent court erred in holding that the private respondent was entitled to one-half of the land, which she had not lost by
extinctive prescription because it was held by them in trust for her. They also insist that the appealed decision completely disregarded the factual findings of the
trial court that they had acquired the whole land by virtue of their long, continued and adverse possession thereof, which should bar any claim by Teodora to her
supposed part ownership.
It is stressed at the outset that the appellate court is not necessarily bound by the factual findings of the trial court simply because the latter had the opportunity
to observe the witnesses directly and assess their credibility by their deportment. While this may be a conceded advantage of the trial judge, the appellate court
may still reverse his findings of fact if they are not based on the evidence submitted or have been reached without considering the other matters of record that
might have dictated a different conclusion. The Court of Appeals precisely is vested with jurisdiction to review questions of fact as decided by the lower court. It
would be evading this responsibility if it should merely adopt the findings in the decision under review on the convenient justification that the trial judge had the
opportunity, which it did not have, of gauging the reliability of the witnesses first-hand.
When, therefore, the respondent court accepted the private respondent's allegation that the land was inherited by the parties from their common ancestor, Leon
Hilario, such a finding, based on the record and not rejected but even assumed by the trial court, did not, in our view, constitute grave abuse of discretion. And
when, on the strength of this finding, it then held that an implied trust was created between the petitioners who were in possession of the land, and Teodora
Garcia, their aunt and co-heir, that too, as we see it, is not an arbitrary assumption.
In fact, the Court feels this is the more plausible relationship between the parties, compared to the version offered by the petitioners, who claim they acquired the
property from their grandfather through their father, who apparently acquired it from his mother, Leon Hilario's daughter. It does not appear that they have pre-
empted the other heirs to the property through any other mode of acquisition, like sale or some similar exclusive transaction. They have not submitted any
evidence of how they acquired the land from their great grandfather, confining themselves to the assertion that they have continued his original possession,
presumably as heirs of their father, who inherited from his mother Silvestra, who was the daughter of Hilario. If this be their theory, then they unavoidably must
recognize Teodora Garcia's own claim to the subject property as she too was an heir, being the daughter of Catalina, who was also a daughter of Hilario.
The trial court said, however, that assuming Teodora had the right to the disputed property, the same was forfeited by her through extinctive prescription by
failure to assert it in time. In its original decision, it affirmed the petitioners' claim that they had acquired ownership over the whole property by their adverse
possession thereof for more than thirty years in concept of owner. Teodora Garcia apparently did not challenge such ownership and so by her inaction forever
lost the right to do so.
The respondent court, rejecting this contention, held that the petitioners' possession was not for their benefit alone but also in favor of Teodora, who was a co-
heir with them and therefore also a co-owner of the property. In other words, their possession, while adverse to the rest of the world, was not against Teodora
herself, whose share they held in implied trust for her as a co-owner of the land, and whose fruits their father shared with her occasionally, or at least promised
her she would get eventually. The Court believes that this, too, is not an arbitrary conclusion.
To support their claim of exclusive ownership of the entire land, the petitioners stress that the property was declared for taxation purposes in the name of Tomas
Pangan, their father, in 1948 and another tax declaration was issued, also in his name, in 1965. Moreover, real estate taxes were paid by them from 1908 to
1914, 1930 to 1932, 1956 to 1957, and 1960 to 1965, whereas Teodora Garcia, by her own admission, never paid any tax at all on the disputed land. 7
Tax declarations are indicia but not conclusive proof of ownership. 8 If the property was declared in the name of To as Pangan only, it could be that this was done
only for reasons of convenience, more so if it was understood, as the private respondent did, that he was declaring the property not only for himself but for
herself also as the other co-owner. As for the admitted fact that Teodora Garcia never actually paid the real estate taxes, the explanation she gave was that she
assumed her share of such taxes was being paid from her share in the fruits of her portion of the land, which she said she was not getting regularly, much less in
full. We hold that this explanation is also plausible enough.
But for all this, there is still the question of whether or not Teodora Garcia, by her failure to assert her right, allowed the statutory period to lapse, thus enabling
the petitioners to perfect their claim of ownership by acquisitive prescription and so exclude her from her share in the subject property.
It is a settled rule that possession by one co-owner will not be regarded as adverse to the other co-owners but in fact as beneficial to all of them. 9 Hence, as
long as his co-ownership is recognized, an action to compel partition will not prescribe and may be filed at any time against the actual possessor by any of the
other co-owners. 10 However, if the co-owner actually holding the property asserts exclusive dominion over it against the other co-owners, the corollary of the
rule is that he can acquire sole title to it after the lapse of the prescribed prescriptive period. From that moment, the question involved will be one of ownership
and no longer mere partition. 11
According to the petitioners, there was such repudiation which was admitted by the private respondent herself Testifying for herself at the hearing on her
opposition in the registration proceedings, she declared:
ATTY. CANLAS:
Q: After the death of Tomas Pangan, did you ask the heirs of Tomas Pangan of your alleged share in the property in
question?
A: Yes, sir.
Q: What did they tell you?
A: They said that I have no right to a share and they won't give me my share.
Q: How many years ago did you ask from them?
A: Immediately after the death of their father.
Q: That was some 20 years ago?
A: I do not know how many years ago.
Q: And during all that span of more than 20 years ago you did not file any action to recover your share on the land
in question?
A: No sir, it was only this time . 12
For title to prescribe in favor of the co-owner, however, there must be a clear showing that he has repudiated the claims of the other co-owners and that they
have been categorically advised of the exclusive claim he is making to the property in question. It is only when such unequivocal notice has been given that the
period of prescription will begin to run against the other co-owners and ultimately divest them of their own title if they do not seasonably defend it. 13
Adverse possession requires the concurrence of the following circumstances:
1. That the trustee has performed unequivocal acts amounting to an ouster of the cestui que trust;
2. That such positive acts of repudiation had been made known to the cestui que trust; and
3. That the evidence thereon should be clear and conclusive. 14
On the basis of the evidence presented by the parties, the Court is not convinced that the above requirements have been satisfied. Although there are admittedly
some precedents to the contrary, it would appear that the weight of authority requires a categorical and final rejection of the co-owners' claim, usually manifested
by a formal legal action, to make the prescriptive period start to run against the claimant. Thus—
Filing by a trustee of an action in court against the trustor to quiet title to property, or for recovery of ownership thereof, held in possession
by the former, may constitute an act of repudiation of the trust reposed on him by the latter. 15
The issuance of the certificate of title would constitute an open and clear repudiation of any trust, and the lapse of more than 20 years,
open and adverse possession as owner would certainly suffice to vest title by prescription. 16
An action for the reconveyance of land based on implied or constructive trust prescribes within 10 years. And it is from the date of the
issuance of such title that the effective assertion of adverse title for purposes of the statute of limitation is counted. 17
The prescriptive period may only be counted from the time petitioners repudiated the trust relation in 1956 upon the filing of the complaint
for recovery of possession against private respondents so that the counterclaim of the private respondents contained in their amended
answer wherein they asserted absolute ownership of the disputed realty by reason of the continuous and adverse possession of the same
is well within the 10-year prescriptive period. 18
There is clear repudiation of a trust when one who is an apparent administrator of property causes the cancellation of the title thereto in
the name of the apparent beneficiaries and gets a new certificate of title in his own name. 19
It is only when the defendants, alleged co-owners of the property in question, executed a deed of partition and on the strength thereof
obtained the cancellation of the title in the name of their predecessor and the issuance of a new one wherein they appear as the new
owners of a definite area each, thereby in effect denying or repudiating the ownership of one of the plaintiffs over his alleged share in the
entire lot, that the statute of limitations started to run for the purposes of the action instituted by the latter seeking a declaration of the
existence of the co-ownership and of their rights thereunder. 20
The established evidence clearly shows that the subject land was inherited by the petitioners and the private respondent as co-heirs of their common ancestor,
Leon Hilario, whose possession they continued to acquire prescriptive title over the property. That possession was originally in the name of all the heirs, including
Teodora Garcia, who in fact had been assured by Tomas Pangan, the petitioners' father, that she would get the share to which she was entitled. The petitioners
have not proved that their possession excluded their co-owner and aunt or that they derived their title from a separate conveyance to them of the property by
Leon Hilario. Parenthetically, such a conveyance, if it existed, would be questionable as it might have deprived Leon's other children of their legitime. In any case,
the petitioners appear to have arrogated the entire property to themselves upon their father's death sometime in 1942 or at the latest in 1965 when they sought to
register the land in their names to the exclusion of Teodora Garcia. The question is, Did such an act begin the period of extinctive prescription against the private
respondent?
Manifestly, the petitioners have acted in bad faith in denying their aunt and co-heir her legal share to the property they had all inherited from Leon Hilario through
their respective parents. This is regrettable as Teodora Garcia is their father's first cousin who apparently trusted him and, indeed, relied on his promise that her
share would be protected. Tomas Pangan presumably was sincere in this assurance, but it was unfortunately not honored by his children upon his death for they
soon dismissed out of hand Teodora Garcia's claim to the subject property.
In cases where there is a clear showing of imposition and improper motives, the courts must be vigilant in the protection of the rights of the exploited. 21 So said
the respondent court, and we agree, We note that the private respondent "is a poor and ignorant 62-year old widow" * whose misplaced trust in her nephews and
nieces is being used now precisely to defeat her claim to the share that she believes is rightfully hers. It is a sorry spectacle, indeed, to see her own close kin
longing up on her, so to speak, to deprive her of her small heritage, and in her old age at that.
With all this in mind, we affirm the finding of the respondent court that there was no adequate notice by the petitioners to the private respondent of the rejection of
her claim to her share in the subject property. Noticeably absent here is a categorical assertion by the petitioners of their exclusive right to the entire property that
barred her own claim of ownership of one-half thereof nor is there any explanation as to why they said she had no right to a share. If this trusting woman did not
immediately take legal action to protect her rights, it was simply because of forbearance toward her nephews and nieces, let alone the fact that there was really
no cases belli as yet that required her to act decisively. That legal provocation arose only when the petitioners commenced the registration proceedings in 1965,
and it was from that time she was required to act, as she did, to protect her interests.
In an earlier case 22 we stressed that this Court is not only a court of law but also of justice. Faced with a choice between a decision that will serve justice and
another that will deny it because of a too strict interpretation of the law, we must resolve in favor of the former, for the ultimate end of the law is justice. Bonus
judex secundum aequum at bonum judicat stricto juri praefert. 23 This is a wise maxim we will follow here in ruling for the deprived and ignorant old widow.
WHEREFORE, the petition is DENIED and the challenged decision AFFIRMED in full, with costs against the petitioners. It is so ordered.
Narvasa, Griño-Aquino and Medialdea, JJ., concur.

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. L-39299 October 18, 1988
ISAAC, SEVERINO, MARIA, TELESFORA, FELISA, SERAPIO, SIMEON and MACARIA all
surnamed PANGAN, petitioners,
vs.
COURT OF APPEALS and TEODORA GARCIA, respondents.
Magtanggol C. Gunigundo for petitioners.
David C. Canta for private respondent.
CRUZ, J.:
The property in question is a parcel of land with an area of 635 square meters and situated in San Pascual, Obando, Bulacan. 1 It was originally owned by Leon
Hilario and is now being disputed between the herein petitioners, who are his great grandchildren by his daughter Silvestra, and the private respondent, Teodora
Garcia, who is his granddaughter by his daughter Catalina. 2
In 1964, the petitioners filed an application for the registration of the land in their names by virtue of their continuous and exclusive possession thereof since
1895, by themselves and their father and grandfather before them. After proper notices by publication and posting as required, the trial court issued an order of
general default, there being no opposition to the application, and proceeded to hear the evidence of the applicants ex-parte. On the basis thereof, the application
was approved on March 31, 1966.
On June 8, 1966, the herein private respondent filed a petition to set aside the said decision, which the trial Court granted, 3 admitting at the same time her
opposition to the application and setting the case for reception of her evidence. This evidence sought to show that the land was inherited by Leon Hilario's three
children, but the son, Felicisimo, waived his right thereto and thereby made his two sisters, Silvestra and Catalina, its exclusive co-owners. As Catalina's
daughter, she was entitled to one-half of the property, the other half going to Silvestra's heirs, the petitioners herein and the latter's
grandchildren. 4
On September 13, 1968, the trial judge issued an order dismissing the opposition and reinstating his original order of March 31,1966. 5 His reason was that
whatever rights Teodora might have had over the property had been forfeited by extinctive prescription because she had left the land in 1942 and had not since
then asserted any claim thereto until 1966.
On appeal to the respondent court, 6 this decision was reversed on the ground that the appellees had not clearly proved that they had acquired the property by
prescription. Hence, the appellant was entitled to one-half of the property as heir, conformably to her opposition in the court a quo. Their motion for
reconsideration having been denied, they have now come to this Court in a petition for review by certiorari under Rule 45 of the Rules of Court.
The petitioners' position is that the respondent court erred in holding that the private respondent was entitled to one-half of the land, which she had not lost by
extinctive prescription because it was held by them in trust for her. They also insist that the appealed decision completely disregarded the factual findings of the
trial court that they had acquired the whole land by virtue of their long, continued and adverse possession thereof, which should bar any claim by Teodora to her
supposed part ownership.
It is stressed at the outset that the appellate court is not necessarily bound by the factual findings of the trial court simply because the latter had the opportunity
to observe the witnesses directly and assess their credibility by their deportment. While this may be a conceded advantage of the trial judge, the appellate court
may still reverse his findings of fact if they are not based on the evidence submitted or have been reached without considering the other matters of record that
might have dictated a different conclusion. The Court of Appeals precisely is vested with jurisdiction to review questions of fact as decided by the lower court. It
would be evading this responsibility if it should merely adopt the findings in the decision under review on the convenient justification that the trial judge had the
opportunity, which it did not have, of gauging the reliability of the witnesses first-hand.
When, therefore, the respondent court accepted the private respondent's allegation that the land was inherited by the parties from their common ancestor, Leon
Hilario, such a finding, based on the record and not rejected but even assumed by the trial court, did not, in our view, constitute grave abuse of discretion. And
when, on the strength of this finding, it then held that an implied trust was created between the petitioners who were in possession of the land, and Teodora
Garcia, their aunt and co-heir, that too, as we see it, is not an arbitrary assumption.
In fact, the Court feels this is the more plausible relationship between the parties, compared to the version offered by the petitioners, who claim they acquired the
property from their grandfather through their father, who apparently acquired it from his mother, Leon Hilario's daughter. It does not appear that they have pre-
empted the other heirs to the property through any other mode of acquisition, like sale or some similar exclusive transaction. They have not submitted any
evidence of how they acquired the land from their great grandfather, confining themselves to the assertion that they have continued his original possession,
presumably as heirs of their father, who inherited from his mother Silvestra, who was the daughter of Hilario. If this be their theory, then they unavoidably must
recognize Teodora Garcia's own claim to the subject property as she too was an heir, being the daughter of Catalina, who was also a daughter of Hilario.
The trial court said, however, that assuming Teodora had the right to the disputed property, the same was forfeited by her through extinctive prescription by
failure to assert it in time. In its original decision, it affirmed the petitioners' claim that they had acquired ownership over the whole property by their adverse
possession thereof for more than thirty years in concept of owner. Teodora Garcia apparently did not challenge such ownership and so by her inaction forever
lost the right to do so.
The respondent court, rejecting this contention, held that the petitioners' possession was not for their benefit alone but also in favor of Teodora, who was a co-
heir with them and therefore also a co-owner of the property. In other words, their possession, while adverse to the rest of the world, was not against Teodora
herself, whose share they held in implied trust for her as a co-owner of the land, and whose fruits their father shared with her occasionally, or at least promised
her she would get eventually. The Court believes that this, too, is not an arbitrary conclusion.
To support their claim of exclusive ownership of the entire land, the petitioners stress that the property was declared for taxation purposes in the name of Tomas
Pangan, their father, in 1948 and another tax declaration was issued, also in his name, in 1965. Moreover, real estate taxes were paid by them from 1908 to
1914, 1930 to 1932, 1956 to 1957, and 1960 to 1965, whereas Teodora Garcia, by her own admission, never paid any tax at all on the disputed land. 7
Tax declarations are indicia but not conclusive proof of ownership. 8 If the property was declared in the name of To as Pangan only, it could be that this was done
only for reasons of convenience, more so if it was understood, as the private respondent did, that he was declaring the property not only for himself but for
herself also as the other co-owner. As for the admitted fact that Teodora Garcia never actually paid the real estate taxes, the explanation she gave was that she
assumed her share of such taxes was being paid from her share in the fruits of her portion of the land, which she said she was not getting regularly, much less in
full. We hold that this explanation is also plausible enough.
But for all this, there is still the question of whether or not Teodora Garcia, by her failure to assert her right, allowed the statutory period to lapse, thus enabling
the petitioners to perfect their claim of ownership by acquisitive prescription and so exclude her from her share in the subject property.
It is a settled rule that possession by one co-owner will not be regarded as adverse to the other co-owners but in fact as beneficial to all of them. 9 Hence, as
long as his co-ownership is recognized, an action to compel partition will not prescribe and may be filed at any time against the actual possessor by any of the
other co-owners. 10 However, if the co-owner actually holding the property asserts exclusive dominion over it against the other co-owners, the corollary of the
rule is that he can acquire sole title to it after the lapse of the prescribed prescriptive period. From that moment, the question involved will be one of ownership
and no longer mere partition. 11
According to the petitioners, there was such repudiation which was admitted by the private respondent herself Testifying for herself at the hearing on her
opposition in the registration proceedings, she declared:
ATTY. CANLAS:
Q: After the death of Tomas Pangan, did you ask the heirs of Tomas Pangan of your alleged share in the property in
question?
A: Yes, sir.
Q: What did they tell you?
A: They said that I have no right to a share and they won't give me my share.
Q: How many years ago did you ask from them?
A: Immediately after the death of their father.
Q: That was some 20 years ago?
A: I do not know how many years ago.
Q: And during all that span of more than 20 years ago you did not file any action to recover your share on the land
in question?
A: No sir, it was only this time . 12
For title to prescribe in favor of the co-owner, however, there must be a clear showing that he has repudiated the claims of the other co-owners and that they
have been categorically advised of the exclusive claim he is making to the property in question. It is only when such unequivocal notice has been given that the
period of prescription will begin to run against the other co-owners and ultimately divest them of their own title if they do not seasonably defend it. 13
Adverse possession requires the concurrence of the following circumstances:

1. That the trustee has performed unequivocal acts amounting to an ouster of the cestui que trust;
2. That such positive acts of repudiation had been made known to the cestui que trust; and
3. That the evidence thereon should be clear and conclusive. 14
On the basis of the evidence presented by the parties, the Court is not convinced that the above requirements have been satisfied. Although there are admittedly
some precedents to the contrary, it would appear that the weight of authority requires a categorical and final rejection of the co-owners' claim, usually manifested
by a formal legal action, to make the prescriptive period start to run against the claimant. Thus—
Filing by a trustee of an action in court against the trustor to quiet title to property, or for recovery of ownership thereof, held in possession
by the former, may constitute an act of repudiation of the trust reposed on him by the latter. 15
The issuance of the certificate of title would constitute an open and clear repudiation of any trust, and the lapse of more than 20 years,
open and adverse possession as owner would certainly suffice to vest title by prescription. 16
An action for the reconveyance of land based on implied or constructive trust prescribes within 10 years. And it is from the date of the
issuance of such title that the effective assertion of adverse title for purposes of the statute of limitation is counted. 17
The prescriptive period may only be counted from the time petitioners repudiated the trust relation in 1956 upon the filing of the complaint
for recovery of possession against private respondents so that the counterclaim of the private respondents contained in their amended
answer wherein they asserted absolute ownership of the disputed realty by reason of the continuous and adverse possession of the same
is well within the 10-year prescriptive period. 18
There is clear repudiation of a trust when one who is an apparent administrator of property causes the cancellation of the title thereto in
the name of the apparent beneficiaries and gets a new certificate of title in his own name. 19
It is only when the defendants, alleged co-owners of the property in question, executed a deed of partition and on the strength thereof
obtained the cancellation of the title in the name of their predecessor and the issuance of a new one wherein they appear as the new
owners of a definite area each, thereby in effect denying or repudiating the ownership of one of the plaintiffs over his alleged share in the
entire lot, that the statute of limitations started to run for the purposes of the action instituted by the latter seeking a declaration of the
existence of the co-ownership and of their rights thereunder. 20
The established evidence clearly shows that the subject land was inherited by the petitioners and the private respondent as co-heirs of their common ancestor,
Leon Hilario, whose possession they continued to acquire prescriptive title over the property. That possession was originally in the name of all the heirs, including
Teodora Garcia, who in fact had been assured by Tomas Pangan, the petitioners' father, that she would get the share to which she was entitled. The petitioners
have not proved that their possession excluded their co-owner and aunt or that they derived their title from a separate conveyance to them of the property by
Leon Hilario. Parenthetically, such a conveyance, if it existed, would be questionable as it might have deprived Leon's other children of their legitime. In any case,
the petitioners appear to have arrogated the entire property to themselves upon their father's death sometime in 1942 or at the latest in 1965 when they sought to
register the land in their names to the exclusion of Teodora Garcia. The question is, Did such an act begin the period of extinctive prescription against the private
respondent?
Manifestly, the petitioners have acted in bad faith in denying their aunt and co-heir her legal share to the property they had all inherited from Leon Hilario through
their respective parents. This is regrettable as Teodora Garcia is their father's first cousin who apparently trusted him and, indeed, relied on his promise that her
share would be protected. Tomas Pangan presumably was sincere in this assurance, but it was unfortunately not honored by his children upon his death for they
soon dismissed out of hand Teodora Garcia's claim to the subject property.
In cases where there is a clear showing of imposition and improper motives, the courts must be vigilant in the protection of the rights of the exploited. 21 So said
the respondent court, and we agree, We note that the private respondent "is a poor and ignorant 62-year old widow" * whose misplaced trust in her nephews and
nieces is being used now precisely to defeat her claim to the share that she believes is rightfully hers. It is a sorry spectacle, indeed, to see her own close kin
longing up on her, so to speak, to deprive her of her small heritage, and in her old age at that.
With all this in mind, we affirm the finding of the respondent court that there was no adequate notice by the petitioners to the private respondent of the rejection of
her claim to her share in the subject property. Noticeably absent here is a categorical assertion by the petitioners of their exclusive right to the entire property that
barred her own claim of ownership of one-half thereof nor is there any explanation as to why they said she had no right to a share. If this trusting woman did not
immediately take legal action to protect her rights, it was simply because of forbearance toward her nephews and nieces, let alone the fact that there was really
no cases belli as yet that required her to act decisively. That legal provocation arose only when the petitioners commenced the registration proceedings in 1965,
and it was from that time she was required to act, as she did, to protect her interests.
In an earlier case 22 we stressed that this Court is not only a court of law but also of justice. Faced with a choice between a decision that will serve justice and
another that will deny it because of a too strict interpretation of the law, we must resolve in favor of the former, for the ultimate end of the law is justice. Bonus
judex secundum aequum at bonum judicat stricto juri praefert. 23 This is a wise maxim we will follow here in ruling for the deprived and ignorant old widow.
WHEREFORE, the petition is DENIED and the challenged decision AFFIRMED in full, with costs against the petitioners. It is so ordered.
Narvasa, Griño-Aquino and Medialdea, JJ., concur.
Separate Opinions
SECOND DIVISION
[G.R. No. 136803. June 16, 2000]
EUSTAQUIO MALLILIN, JR., petitioner, vs. MA. ELVIRA CASTILLO,
respondent.
DECISION
MENDOZA, J.: batas
This is a petition for review of the amended decision [1] of the Court of Appeals dated May 7,
1998 in CA G.R. CV No. 48443 granting respondents motion for reconsideration of its
decision dated November 7, 1996, and of the resolution dated December 21, 1998 denying
petitioners motion for reconsideration.
The factual and procedural antecedents are as follows:
On February 24, 1993, petitioner Eustaquio Mallilin, Jr. filed a complaint [2] for "Partition and/or
Payment of Co-Ownership Share, Accounting and Damages" against respondent Ma. Elvira
Castillo. The complaint, docketed as Civil Case No. 93-656 at the Regional Trial Court in
Makati City, alleged that petitioner and respondent, both married and with children, but
separated from their respective spouses, cohabited after a brief courtship sometime in 1979
while their respective marriages still subsisted. During their union, they set up the
Superfreight Customs Brokerage Corporation, with petitioner as president and chairman of
the board of directors, and respondent as vice-president and treasurer. The business
flourished and petitioner and respondent acquired real and personal properties which were
registered solely in respondents name. In 1992, due to irreconcilable differences, the couple
separated. Petitioner demanded from respondent his share in the subject properties, but
respondent refused alleging that said properties had been registered solely in her name.
In her Amended Answer,[3] respondent admitted that she engaged in the customs brokerage
business with petitioner but alleged that the Superfreight Customs Brokerage Corporation
was organized with other individuals and duly registered with the Securities and Exchange
Commission in 1987. She denied that she and petitioner lived as husband and wife because
the fact was that they were still legally married to their respective spouses. She claimed to be
the exclusive owner of all real and personal properties involved in petitioners action for
partition on the ground that they were acquired entirely out of her own money and registered
solely in her name.
On November 25, 1994, respondent filed a Motion for Summary Judgment, [4] in accordance
with Rule 34 of the Rules of Court.[5] She contended that summary judgment was proper,
because the issues raised in the pleadings were sham and not genuine, to wit: CODES
A.
The main issue is -- Can plaintiff validly claim the partition and/or payment of
co-ownership share, accounting and damages, considering that plaintiff
and defendant are admittedly both married to their respective spouses
under still valid and subsisting marriages, even assuming as claimed by
plaintiff, that they lived together as husband and wife without benefit of
marriage? In other words, can the parties be considered as co-owners of the
properties, under the law, considering the present status of the parties as both
married and incapable of marrying each other, even assuming that they lived
together as husband and wife (?)
B.
As a collateral issue, can the plaintiff be considered as an unregistered
co-owner of the real properties under the Transfer Certificates of Title duly
registered solely in the name of defendant Ma. Elvira Castillo? This issue is
also true as far as the motor vehicles in question are concerned which are also
registered in the name of defendant. [6]
On the first point, respondent contended that even if she and petitioner actually cohabited,
petitioner could not validly claim a part of the subject real and personal properties because
Art. 144 of the Civil Code, which provides that the rules on co-ownership shall govern the
properties acquired by a man and a woman living together as husband and wife but not
married, or under a marriage which is void ab initio, applies only if the parties are not in any
way incapacitated to contract marriage.[7] In the parties case, their union suffered the legal
impediment of a prior subsisting marriage. Thus, the question of fact being raised by
petitioner, i.e., whether they lived together as husband and wife, was irrelevant as no co-
ownership could exist between them.
As to the second issue, respondent maintained that petitioner can not be considered an
unregistered co-owner of the subject properties on the ground that, since titles to the land are
solely in her name, to grant petitioners prayer would be to allow a collateral attack on the
validity of such titles.
Petitioner opposed respondents Motion for Summary Judgment. [8] He contended that the
case presented genuine factual issues and that Art. 144 of the Civil Code had been repealed
by the Family Code which now allows, under Art. 148, a limited co-ownership even though a
man and a woman living together are not capacitated to marry each other. Petitioner also
asserted that an implied trust was constituted when he and respondent agreed to register the
properties solely in the latters name although the same were acquired out of the profits made
from their brokerage business. Petitioner invoked the following provisions of the Civil Code:
yacats
Art. 1452. If two or more persons agree to purchase property and by common
consent the legal title is taken in the name of one of them for the benefit of all, a
trust is created by force of law in favor of the others in proportion to the interest
of each.
Art. 1453. When the property is conveyed to a person in reliance upon his
declared intention to hold it for, or transfer it to another grantor, there is an
implied trust in favor of the person whose benefit is contemplated.
On January 30, 1995, the trial court rendered its decision [9] granting respondents motion for
summary judgment. It ruled that an examination of the pleadings shows that the issues
involved were purely legal. The trial court also sustained respondents contention that
petitioners action for partition amounted to a collateral attack on the validity of the certificates
of title covering the subject properties. It held that even if the parties really had cohabited, the
action for partition could not be allowed because an action for partition among co-owners
ceases to be so and becomes one for title if the defendant, as in the present case, alleges
exclusive ownership of the properties in question. For these reasons, the trial court dismissed
Civil Case No. 93-656.
On appeal, the Court of Appeals on November 7, 1996, ordered the case remanded to the
court of origin for trial on the merits. It cited the decision in Roque v. Intermediate Appellate
Court[10] to the effect that an action for partition is at once an action for declaration of co-
ownership and for segregation and conveyance of a determinate portion of the properties
involved. If the defendant asserts exclusive title over the property, the action for partition
should not be dismissed. Rather, the court should resolve the case and if the plaintiff is
unable to sustain his claimed status as a co-owner, the court should dismiss the action, not
because the wrong remedy was availed of, but because no basis exists for requiring the
defendant to submit to partition. Resolving the issue whether petitioners action for partition
was a collateral attack on the validity of the certificates of title, the Court of Appeals held that
since petitioner sought to compel respondent to execute documents necessary to effect
transfer of what he claimed was his share, petitioner was not actually attacking the validity of
the titles but in fact, recognized their validity. Finally, the appellate court upheld petitioners
position that Art. 144 of the Civil Code had been repealed by Art. 148 of the Family Code.
haideem
Respondent moved for reconsideration of the decision of the Court of Appeals. On May 7,
1998, nearly two years after its first decision, the Court of Appeals granted respondents
motion and reconsidered its prior decision. In its decision now challenged in the present
petition, it held
Prefatorily, and to better clarify the controversy on whether this suit is a
collateral attack on the titles in issue, it must be underscored that plaintiff-
appellant alleged in his complaint that all the nine (9) titles are registered in the
name of defendant-appellee, Ma. Elvira T. Castillo, except one which appears in
the name of Eloisa Castillo (see par. 9, Complaint). However, a verification of
the annexes of such initiatory pleading shows some discrepancies, to wit:
1. TCT No. 149046 (Annex A) =.Elvira T. Castillo, single
2. TCT No. 168208 ( Annex B) =..........-do-
3. TCT No. 37046 (Annex C) =..........-do-
4. TCT No. 37047 (Annex D) = ..... ...-do-
5. TCT No. 37048 (Annex E) =..........-do-
6. TCT No. 30368 (Annex F) =.Steelhaus Realty & Dev. Corp.
7. TCT No. 30369 (Annex G) =..........-do-
8. TCT No. 30371 (Annex F) =..........-do-
9.TCT No. (92323) 67881 (Annex I) = Eloisa Castillo

hustisya
In this action, plaintiff-appellant seeks to be declared as 1/2 co-owner of the real

properties covered by the above listed titles and eventually for their partition
[par. (a), Prayer; p. 4 Records]. Notably, in order to achieve such prayer for a
joint co-ownership declaration, it is unavoidable that the individual titles involved
be altered, changed, canceled or modified to include therein the name of the
appellee as a registered 1/2 co-owner. Yet, no cause of action or even a prayer
is contained in the complaint filed. Manifestly, absent any cause or prayer for the
alteration, cancellation, modification or changing of the titles involved, the
desired declaration of co-ownership and eventual partition will utterly be an
indirect or collateral attack on the subject titles in this suit.
It is here that We fell into error, such that, if not rectified will surely lead to a
procedural lapse and a possible injustice. Well settled is the rule that a
certificate of title cannot be altered, modified or canceled except in a direct
proceeding in accordance with law. Jksm
In this jurisdiction, the remedy of the landowner whose property has been
wrongfully or erroneously registered in another name is, after one year from the
date of the decree, not to set aside the decree, but respecting it as
incontrovertible and no longer open to review, to bring an action for
reconveyance or, if the property had passed into the hands of an innocent
purchaser for value, for damages. Verily, plaintiff-appellant should have first
pursued such remedy or any other relief directly attacking the subject titles
before instituting the present partition suit. Apropos, the case at bench appears
to have been prematurely filed.
Lastly, to grant the partition prayed for by the appellant will in effect rule and
decide against the properties registered in the names of Steelhouse Realty and
Development Corporation and Eloisa Castillo, who are not parties in the case.
To allow this to happen will surely result to injustice and denial of due process of
law. . . .[11]
Petitioner moved for reconsideration but his motion was denied by the Court of Appeals in its
resolution dated December 21, 1998. Hence this petition.
Petitioner contends that: (1) the Court of Appeals, in its first decision of November 7, 1996,
was correct in applying the Roque ruling and in rejecting respondents claim that she was the
sole owner of the subject properties and that the partition suit was a collateral attack on the
titles; (2) the Court of Appeals correctly ruled in its first decision that Art. 148 of the Family
Code governs the co-ownership between the parties, hence, the complaint for partition is
proper; (3) with respect to the properties registered in the name of Steelhouse Realty,
respondent admitted ownership thereof and, at the very least, these properties could simply
be excluded and the partition limited to the remaining real and personal properties; and (4)
the Court of Appeals erred in not holding that under the Civil Code, there is an implied trust in
his favor.[12]
The issue in this case is really whether summary judgment, in accordance with Rule 35 of the
Rules of Court, is proper. We rule in the negative.
First. Rule 35, 3 of the Rules of Court provides that summary judgment is proper only when,
based on the pleadings, depositions, and admissions on file, and after summary hearing, it is
shown that except as to the amount of damages, there is no veritable issue regarding any
material fact in the action and the movant is entitled to judgment as a matter of law. [13]
Conversely, where the pleadings tender a genuine issue, i.e., an issue of fact the resolution of
which calls for the presentation of evidence, as distinguished from an issue which is sham,
fictitious, contrived, set-up in bad faith, or patently unsubstantial, summary judgment is not
proper.[14] Chiefx
In the present case, we are convinced that genuine issues exist. Petitioner anchors his claim
of co-ownership on two factual grounds: first, that said properties were acquired by him and
respondent during their union from 1979 to 1992 from profits derived from their brokerage
business; and second, that said properties were registered solely in respondents name only
because they agreed to that arrangement, thereby giving rise to an implied trust in
accordance with Art. 1452 and Art. 1453 of the Civil Code. These allegations are denied by
respondent. She denies that she and petitioner lived together as husband and wife. She also
claims that the properties in question were acquired solely by her with her own money and
resources. With such conflicting positions, the only way to ascertain the truth is obviously
through the presentation of evidence by the parties.
The trial court ruled that it is immaterial whether the parties actually lived together as husband
and wife because Art. 144 of the Civil Code can not be made to apply to them as they were
both incapacitated to marry each other. Hence, it was impossible for a co-ownership to exist
between them.
We disagree.
Art. 144 of the Civil Code provides:
When a man and a woman live together as husband and wife, but they are not
married, or their marriage is void from the beginning, the property acquired by
either or both of them through their work or industry or their wages and salaries
shall be governed by the rules on co-ownership.
This provision of the Civil Code, applies only to cases in which a man and a woman live
together as husband and wife without the benefit of marriage provided they are not
incapacitated or are without impediment to marry each other, [15] or in which the marriage is
void ab initio, provided it is not bigamous. Art. 144, therefore, does not cover parties living in
an adulterous relationship. However, Art. 148 of the Family Code now provides for a limited
co-ownership in cases where the parties in union are incapacitated to marry each other. It
states:
In cases of cohabitation not falling under the preceding article, [16] only the
properties acquired by both of the parties through their actual joint contribution
of money, property or industry shall be owned by them in common in proportion
to their respective contributions. In the absence of proof to the contrary, their
contributions and corresponding shares are presumed to be equal. The same
rule and presumption shall apply to joint deposits of money and evidences of
credits. HTML
If one of the parties is validly married to another, his or her share in the co-
ownership shall accrue to the absolute community or conjugal partnership
existing in such valid marriage. If the party who acted in bad faith is not validly
married to another, his or her share shall be forfeited in the manner provided in
the last paragraph of the preceding article.
The foregoing rules on forfeiture shall likewise apply even if both parties are in
bad faith.
It was error for the trial court to rule that, because the parties in this case were not
capacitated to marry each other at the time that they were alleged to have been living
together, they could not have owned properties in common. The Family Code, in addition to
providing that a co-ownership exists between a man and a woman who live together as
husband and wife without the benefit of marriage, likewise provides that, if the parties are
incapacitated to marry each other, properties acquired by them through their joint contribution
of money, property or industry shall be owned by them in common in proportion to their
contributions which, in the absence of proof to the contrary, is presumed to be equal. There is
thus co-ownership eventhough the couple are not capacitated to marry each other.
In this case, there may be a co-ownership between the parties herein. Consequently, whether
petitioner and respondent cohabited and whether the properties involved in the case are part
of the alleged co-ownership are genuine and material. All but one of the properties involved
were alleged to have been acquired after the Family Code took effect on August 3, 1988. With
respect to the property acquired before the Family Code took effect if it is shown that it was
really acquired under the regime of the Civil Code, then it should be excluded.
Petitioner also alleged in paragraph 7 of his complaint that:
Due to the effective management, hardwork and enterprise of plaintiff assisted
by defendant, their customs brokerage business grew and out of the profits
therefrom, the parties acquired real and personal properties which were, upon
agreement of the parties, listed and registered in defendants name with plaintiff
as the unregistered co-owner of all said properties.[17] Esmsc
On the basis of this, he contends that an implied trust existed pursuant to Art. 1452 of the Civil
Code which provides that "(I)f two or more persons agree to purchase property and by
common consent the legal title is taken in the name of one of them for the benefit of all, a trust
is created by force of law in favor of the others in proportion to the interest of each." We do
not think this is correct. The legal relation of the parties is already specifically covered by Art.
148 of the Family Code under which all the properties acquired by the parties out of their
actual joint contributions of money, property or industry shall constitute a co-ownership. Co-
ownership is a form of trust and every co-owner is a trustee for the other. [18] The provisions of
Art. 1452 and Art. 1453 of the Civil Code, then are no longer material since a trust relation
already inheres in a co-ownership which is governed under Title III, Book II of the Civil Code.
Second. The trial court likewise dismissed petitioners action on the ground that the same
amounted to a collateral attack on the certificates of title involved. As already noted, at first,
the Court of Appeals ruled that petitioners action does not challenge the validity of
respondents titles. However, on reconsideration, it reversed itself and affirmed the trial court.
It noted that petitioners complaint failed to include a prayer for the alteration, cancellation,
modification, or changing of the titles involved. Absent such prayer, the appellate court ruled
that a declaration of co-ownership and eventual partition would involve an indirect or collateral
attack on the titles. We disagree.
A torrens title, as a rule, is conclusive and indefeasible. Proceeding from this, P.D. No. 1529,
[19] 48 provides that a certificate of title shall not be subject to collateral attack and can not be
altered, modified, or canceled except in a direct proceeding. When is an action an attack on a
title? It is when the object of the action or proceeding is to nullify the title, and thus challenge
the judgment pursuant to which the title was decreed. The attack is direct when the object of
an action or proceeding is to annul or set aside such judgment, or enjoin its enforcement. On
the other hand, the attack is indirect or collateral when, in an action to obtain a different relief,
an attack on the judgment is nevertheless made as an incident thereof. [20]
In his complaint for partition, consistent with our ruling in Roque regarding the nature of an
action for partition, petitioner seeks first, a declaration that he is a co-owner of the subject
properties; and second, the conveyance of his lawful shares. He does not attack respondents
titles. Petitioner alleges no fraud, mistake, or any other irregularity that would justify a review
of the registration decree in respondents favor. His theory is that although the subject
properties were registered solely in respondents name, but since by agreement between
them as well as under the Family Code, he is co-owner of these properties and as such is
entitled to the conveyance of his shares. On the premise that he is a co-owner, he can validly
seek the partition of the properties in co-ownership and the conveyance to him of his share.
Esmmis
Thus, in Guevara v. Guevara,[21] in which a parcel of land bequeathed in a last will and
testament was registered in the name of only one of the heirs, with the understanding that he
would deliver to the others their shares after the debts of the original owner had been paid,
this Court ruled that notwithstanding the registration of the land in the name of only one of the
heirs, the other heirs can claim their shares in "such action, judicial or extrajudicial, as may be
necessary to partition the estate of the testator." [22]
Third. The Court of Appeals also reversed its first decision on the ground that to order
partition will, in effect, rule and decide against Steelhouse Realty Development Corporation
and Eloisa Castillo, both strangers to the present case, as to the properties registered in their
names. This reasoning, however, ignores the fact that the majority of the properties involved
in the present case are registered in respondents name, over which petitioner claims rights as
a co-owner. Besides, other than the real properties, petitioner also seeks partition of a
substantial amount of personal properties consisting of motor vehicles and several pieces of
jewelry. By dismissing petitioners complaint for partition on grounds of due process and
equity, the appellate court unwittingly denied petitioner his right to prove ownership over the
claimed real and personal properties. The dismissal of petitioners complaint is unjustified
since both ends may be amply served by simply excluding from the action for partition the
properties registered in the name of Steelhouse Realty and Eloisa Castillo.
WHEREFORE, the amended decision of the Court of Appeals, dated May 7, 1998, is
REVERSED and the case is REMANDED to the Regional Trial Court, Branch 59, Makati City
for further proceedings on the merits.
SO ORDERED.
Bellosillo, (Chairman), Quisumbing, and De Leon, Jr., JJ., concur.
Buena, J., no part. Percuriam
SUPREME COURT
Manila
THIRD DIVISION
G.R. No. L-57062 January 24, 1992
MARIA DEL ROSARIO MARIATEGUI, ET AL., petitioners,

vs.
HON. COURT OF APPEALS, JACINTO MARIATEGUI, JULIAN MARIATEGUI and PAULINA MARIATEGUI, respondents.
Montesa, Albon & Associates for petitioners.
Parmenio B. Patacsil, Patacsil Twins Law Office for the heirs of the late Maria del Rosario Mariategui.
Tinga, Fuentes & Tagle Firm for private respondents.
BIDIN, J.:
This is a petition for review on certiorari of the decision * of the Court of Appeals dated December 24, 1980 in CA-G.R. No. 61841, entitled "Jacinto Mariategui, et
al. v. Maria del Rosario Mariategui, et al.," reversing the judgment of the then Court of First Instance of Rizal, Branch VIII ** at Pasig, Metro Manila.
The undisputed facts are as follows:
Lupo Mariategui died without a will on June 26, 1953 (Brief for respondents, Rollo, pp. 116; 8). During his lifetime, Lupo Mariategui contracted three (3)
marriages. With his first wife, Eusebia Montellano, who died on November 8, 1904, he begot four (4) children, namely: Baldomera, Maria del Rosario, Urbana
and Ireneo. Baldomera died and was survived by her children named Antero, Rufina, Catalino, Maria, Gerardo, Virginia and Federico, all surnamed Espina.
Ireneo also died and left a son named Ruperto. With his second wife, Flaviana Montellano, he begot a daughter named Cresenciana who was born on May 8,
1910 (Rollo, Annex "A", p. 36).
Lupo Mariategui and Felipa Velasco (Lupo's third wife) got married sometime in 1930. They had three children, namely: Jacinto, born on July 3, 1929, Julian,
born on February 16, 1931 and Paulina, born on April 19, 1938. Felipa Velasco Mariategui died in 1941 (Rollo, Ibid).
At the time of his death, Lupo Mariategui left certain properties which he acquired when he was still unmarried (Brief for respondents, Rollo, pp. 116; 4). These
properties are described in the complaint as Lots Nos. 163, 66, 1346 and 156 of the Muntinglupa Estate (Rollo, Annex "A", p. 39).
On December 2, 1967, Lupo's descendants by his first and second marriages, namely, Maria del Rosario, Urbana, Ruperto, Cresencia, all surnamed Mariategui
and Antero, Rufina, Catalino, Maria, Gerardo, Virginia and Federico, all surnamed Espina, executed a deed of extrajudicial partition whereby they adjudicated
unto themselves Lot No. 163 of the Muntinglupa Estate. Thereafter, Lot No. 163 was the subject of a voluntary registration proceedings filed by the adjudicatees
under Act No. 496, and the land registration court issued a decree ordering the registration of the lot. Thus, on April 1, 1971, OCT No. 8828 was issued in the
name of the above-mentioned heirs. Subsequently, the registered owners caused the subdivision of the said lot into Lots Nos. 163-A to 163-H, for which separate
transfer certificates of title were issued to the respective parties (Rollo, ibid).
On April 23, 1973, Lupo's children by his third marriage with Felipa Velasco (Jacinto, Julian and Paulina) filed with the lower court an amended complaint
claiming that Lot No. 163 together with Lots Nos. 669, 1346 and 154 were owned by their common father, Lupo Mariategui, and that, with the adjudication of Lot
No. 163 to their co-heirs, they (children of the third marriage) were deprived of their respective shares in the lots. Plaintiffs pray for partition of the estate of their
deceased father and annulment of the deed of extrajudicial partition dated December 2, 1967 (Petition, Rollo, p. 10). Cresencia Mariategui Abas, Flaviana
Mariategui Cabrera and Isabel Santos were impleaded in the complaint as unwilling defendants as they would not like to join the suit as plaintiffs although they
acknowledged the status and rights of the plaintiffs and agreed to the partition of the parcels of land as well as the accounting of their fruits ( Ibid., Rollo, p. 8;
Record on Appeal, p. 4).
The defendants (now petitioners) filed an answer with counterclaim (Amended Record on Appeal, p. 13). Thereafter, they filed a motion to dismiss on the
grounds of lack of cause of action and prescription. They specifically contended that the complaint was one for recognition of natural children. On August 14,
1974, the motion to dismiss was denied by the trial court, in an order the dispositive portion of which reads:
It is therefore the opinion of the Court that Articles 278 and 285 of the Civil Code cited by counsel for the defendants are of erroneous
application to this case. The motion to dismiss is therefore denied for lack of merit.
SO ORDERED. (Ibid, p. 37).
However, on February 16, 1977, the complaint as well as petitioners' counterclaim were dismissed by the trial court, in its decision stating thus:
The plaintiffs' right to inherit depends upon the acknowledgment or recognition of their continuous enjoyment and possession of status of
children of their supposed father. The evidence fails to sustain either premise, and it is clear that this action cannot be sustained. ( Ibid,
Rollo, pp. 67-68)
The plaintiffs elevated the case to the Court of Appeals on the ground that the trial court committed an error ". . . in not finding that the parents of the appellants,
Lupo Mariategui and Felipa Velasco (were) lawfully married, and in holding (that) they (appellants) are not legitimate children of their said parents, thereby
divesting them of their inheritance . . . " (Rollo, pp. 14-15).
On December 24, 1980, the Court of Appeals rendered a decision declaring all the children and descendants of Lupo Mariategui, including appellants Jacinto,
Julian and Paulina (children of the third marriage) as entitled to equal shares in the estate of Lupo Mariategui; directing the adjudicatees in the extrajudicial
partition of real properties who eventually acquired transfer certificates of title thereto, to execute deeds of reconveyance in favor, and for the shares, of Jacinto,
Julian and Paulina provided rights of innocent third persons are not prejudiced otherwise the said adjudicatees shall reimburse the said heirs the fair market
value of their shares; and directing all the parties to submit to the lower court a project of partition in the net estate of Lupo Mariategui after payment of taxes,
other government charges and outstanding legal obligations.
The defendants-appellees filed a motion for reconsideration of said decision but it was denied for lack of merit. Hence, this petition which was given due course
by the court on December 7, 1981.
The petitioners submit to the Court the following issues: (a) whether or not prescription barred private respondents' right to demand the partition of the estate of
Lupo Mariategui, and (b) whether or not the private respondents, who belatedly filed the action for recognition, were able to prove their successional rights over
said estate. The resolution of these issues hinges, however, on the resolution of the preliminary matter, i.e., the nature of the complaint filed by the private
respondents.
The complaint alleged, among other things, that "plaintiffs are the children of the deceased spouses Lupo Mariategui . . . and Felipa Velasco"; that "during his
lifetime, Lupo Mariategui had repeatedly acknowledged and confirmed plaintiffs as his children and the latter, in turn, have continuously enjoyed such status
since their birth"; and "on the basis of their relationship to the deceased Lupo Mariategui and in accordance with the law on intestate succession, plaintiffs are
entitled to inherit shares in the foregoing estate (Record on Appeal, pp. 5 & 6). It prayed, among others, that plaintiffs be declared as children and heirs of Lupo
Mariategui and adjudication in favor of plaintiffs their lawful shares in the estate of the decedent (Ibid, p. 10).
A perusal of the entire allegations of the complaint, however, shows that the action is principally one of partition. The allegation with respect to the status of the
private respondents was raised only collaterally to assert their rights in the estate of the deceased. Hence, the Court of Appeals correctly adopted the settled rule
that the nature of an action filed in court is determined by the facts alleged in the complaint constituting the cause of action (Republic vs. Estenzo, 158 SCRA 282
[1988]).
It has been held that, if the relief demanded is not the proper one which may be granted under the law, it does not characterize or determine the nature of
plaintiffs' action, and the relief to which plaintiff is entitled based on the facts alleged by him in his complaint, although it is not the relief demanded, is what
determines the nature of the action (1 Moran, p. 127, 1979 ed., citing Baguioro vs. Barrios, et al., 77 Phil. 120).
With respect to the legal basis of private respondents' demand for partition of the estate of Lupo Mariategui, the Court of Appeals aptly held that the private
respondents are legitimate children of the deceased.
Lupo Mariategui and Felipa Velasco were alleged to have been lawfully married in or about 1930. This fact is based on the declaration communicated by Lupo
Mariategui to Jacinto who testified that "when (his) father was still living, he was able to mention to (him) that he and (his) mother were able to get married before
a Justice of the Peace of Taguig, Rizal." The spouses deported themselves as husband and wife, and were known in the community to be such. Although no
marriage certificate was introduced to this effect, no evidence was likewise offered to controvert these facts. Moreover, the mere fact that no record of the
marriage exists does not invalidate the marriage, provided all requisites for its validity are present (People vs. Borromeo, 133 SCRA 106 [1984]).
Under these circumstances, a marriage may be presumed to have taken place between Lupo and Felipa. The laws presume that a man and a woman, deporting
themselves as husband and wife, have entered into a lawful contract of marriage; that a child born in lawful wedlock, there being no divorce, absolute or from
bed and board is legitimate; and that things have happened according to the ordinary course of nature and the ordinary habits of life (Section 5 (z), (bb), (cc),
Rule 131, Rules of Court; Corpus v. Corpus, 85 SCRA 567 [1978]; Saurnaba v. Workmen's Compensation, 85 SCRA 502 [1978]; Alavado v. City Gov't. of
Tacloban, 139 SCRA 230 [1985]; Reyes v. Court of Appeals, 135 SCRA 439 [1985]).
Courts look upon the presumption of marriage with great favor as it is founded on the following rationale:
The basis of human society throughout the civilized world is that of marriage. Marriage in this jurisdiction is not only a civil contract, but it is
a new relation, an institution in the maintenance of which the public is deeply interested. Consequently, every intendment of the law leans
toward legalizing matrimony. Persons dwelling together in apparent matrimony are presumed, in the absence of any counterpresumption
or evidence special to that case, to be in fact married. The reason is that such is the common order of society and if the parties were not
what they thus hold themselves out as being, they would be living in the constant violation of decency and of
law . . . (Adong vs. Cheong Seng Gee, 43 Phil. 43, 56 [1922] quoted in Alavado vs. City Government of Tacloban, 139 SCRA 230 [1985]).
So much so that once a man and a woman have lived as husband and wife and such relationship is not denied nor contradicted, the presumption of their being
married must be admitted as a fact (Alavado v. City Gov't. of Tacloban, supra).
The Civil Code provides for the manner under which legitimate filiation may be proven. However, considering the effectivity of the Family Code of the Philippines,
the case at bar must be decided under a new if not entirely dissimilar set of rules because the parties have been overtaken by events, to use the popular phrase
(Uyguangco vs. Court of Appeals, G.R. No. 76873, October 26, 1989). Thus, under Title VI of the Family Code, there are only two classes of children —
legitimate and illegitimate. The fine distinctions among various types of illegitimate children have been eliminated (Castro vs. Court of Appeals, 173 SCRA 656
[1989]).
Article 172 of the said Code provides that the filiation of legitimate children may be established by the record of birth appearing in the civil register or a final
judgment or by the open and continuous possession of the status of a legitimate child.
Evidence on record proves the legitimate filiation of the private respondents. Jacinto's birth certificate is a record of birth referred to in the said article. Again, no
evidence which tends to disprove facts contained therein was adduced before the lower court. In the case of the two other private respondents, Julian and
Paulina, they may not have presented in evidence any of the documents required by Article 172 but they continuously enjoyed the status of children of Lupo
Mariategui in the same manner as their brother Jacinto.
While the trial court found Jacinto's testimonies to be inconsequential and lacking in substance as to certain dates and names of relatives with whom their family
resided, these are but minor details. The nagging fact is that for a considerable length of time and despite the death of Felipa in 1941, the private respondents
and Lupo lived together until Lupo's death in 1953. It should be noted that even the trial court mentioned in its decision the admission made in the affidavit of
Cresenciana Mariategui Abas, one of the petitioners herein, that " . . . Jacinto, Julian and Paulina Mariategui ay pawang mga kapatid ko sa
ama . . ." (Exh. M, Record on Appeal, pp. 65-66).
In view of the foregoing, there can be no other conclusion than that private respondents are legitimate children and heirs of Lupo Mariategui and therefore, the
time limitation prescribed in Article 285 for filing an action for recognition is inapplicable to this case. Corollarily, prescription does not run against private
respondents with respect to the filing of the action for partition so long as the heirs for whose benefit prescription is invoked, have not expressly or impliedly
repudiated the co-ownership. In other words, prescription of an action for partition does not lie except when the co-ownership is properly repudiated by the co-
owner (Del Banco vs. Intermediate Appellate Court, 156 SCRA 55 [1987] citing Jardin vs. Hollasco, 117 SCRA 532 [1982]).
Otherwise stated, a co-owner cannot acquire by prescription the share of the other co-owners absent a clear repudiation of co-ownership duly communicated to
the other co-owners (Mariano vs. De Vega, 148 SCRA 342 [1987]). Furthermore, an action to demand partition is imprescriptible and cannot be barred by laches
(Del Banco vs. IAC, 156 SCRA 55 [1987]). On the other hand, an action for partition may be seen to be at once an action for declaration of co-ownership and for
segregation and conveyance of a determinate portion of the property involved (Roque vs. IAC, 165 SCRA 118 [1988]).
Petitioners contend that they have repudiated the co-ownership when they executed the extrajudicial partition excluding the private respondents and registered
the properties in their own names (Petition, p. 16; Rollo, p. 20). However, no valid repudiation was made by petitioners to the prejudice of private respondents.
Assuming petitioners' registration of the subject lot in 1971 was an act of repudiation of the co-ownership, prescription had not yet set in when private
respondents filed in 1973 the present action for partition (Ceniza vs. C.A., 181 SCRA 552 [1990]).
In their complaint, private respondents averred that in spite of their demands, petitioners, except the unwilling defendants in the lower court, failed and refused to
acknowledge and convey their lawful shares in the estate of their father (Record on Appeal, p. 6). This allegation, though denied by the petitioners in their answer
(Ibid, p. 14), was never successfully refuted by them. Put differently, in spite of petitioners' undisputed knowledge of their relationship to private respondents who
are therefore their co-heirs, petitioners fraudulently withheld private respondent's share in the estate of Lupo Mariategui. According to respondent Jacinto, since
1962, he had been inquiring from petitioner Maria del Rosario about their (respondents) share in the property left by their deceased father and had been assured
by the latter (Maria del Rosario) not to worry because they will get some shares. As a matter of fact, sometime in 1969, Jacinto constructed a house where he
now resides on Lot No. 163 without any complaint from petitioners.
Petitioners' registration of the properties in their names in 1971 did not operate as a valid repudiation of the co-ownership. In Adille vs. Court of Appeals (157
SCRA 455, 461-462 [1988]), the Court held:
Prescription, as a mode of terminating a relation of co-ownership, must have been preceded by repudiation (of the co-ownership). The act
of repudiation, in turn, is subject to certain conditions: (1) a co-owner repudiates the co-ownership; (2) such an act of repudiation is clearly
made known to the other co-owners; (3) the evidence thereon is clear and conclusive; and (4) he has been in possession through open,
continuous, exclusive, and notorious possession of the property for the period required by law.
xxx xxx xxx
It is true that registration under the Torrens system is constructive notice of title, but it has likewise been our holding that the Torrens title
does not furnish shield for fraud. It is therefore no argument to say that the act of registration is equivalent to notice of repudiation,
assuming there was one, notwithstanding the long-standing rule that registration operates as a universal notice of title.
Inasmuch as petitioners registered the properties in their names in fraud of their co-heirs prescription can only be deemed to have commenced from the time
private respondents discovered the petitioners' act of defraudation (Adille vs. Court of Appeals, supra). Hence, prescription definitely may not be invoked by
petitioners because private respondents commenced the instant action barely two months after learning that petitioners had registered in their names the lots
involved.
WHEREFORE, the petition is DENIED and the assailed decision of the Court of Appeals dated December 24, 1980 is Affirmed.
SO ORDERED.
Gutierrez, Jr., Feliciano, Davide, Jr. and Romero, JJ., concur.
Footnotes
* Penned by Associate Justice Elias B. Asuncion, concurred by Sison, P.V. and Censon, JJ.
** Presided by Judge Serafin E. Camilon.

SUPREME COURT
Manila
FIRST DIVISION
G.R. No. 95364 June 29, 1992
UNION BANK OF THE PHILIPPINES, petitioner,
vs.
HOUSING AND LAND USE REGULATORY BOARD, MARTHA S. DAVID and TERESITA T. QUAZON, assisted by her husband, ALFONSO MARIA
QUAZON, respondents.
GRIÑO-AQUINO, J.:
The issue presented by this petition for certiorari and prohibition with preliminary injunction is whether or not the Housing and Land Use Regulatory Board
(HLURB) for brevity) has jurisdiction to hear and decide a condominium buyer's complaint for:
(a) annulment or a real estate mortgage constituted by the project owner without his consent and without the prior written consent of the
National Housing Authority:
(b) for annulment of the foreclosure sale; and
(c) for annulment of the condominium certificate of title that was issued to the highest bidder at the foreclosure sale.
In 1973, Martha David purchased from Fereit Realty Development Corporation (FRDC) a condominium unit, Lorraine Flat 552, which was in the process of
completion, with parking space No. S-12, in the condominium project known as "Europa Condominium Villas" in Baguio City.
The agreed purchase price was P217,000. Martha David made a 20% downpayment of P43,400 on the price leaving a balance of P173,600 (including interest of
1% per month) which was payable in 60 equal monthly installments of P3,861.64 per installment.
In 1975, Martha David took possession, as owner, of the condominium unit, with notice to the management. As of October, 1976, she had paid at least twenty-
two (22) monthly installments of the price of the condominium unit.
On January 2, 1978, FRDC, without the knowledge of the condominium buyer David, and without the prior approval of the National Housing Authority, mortgaged
the condominium project to Bancom Development Corporation (Bancom), predecessor-in-interest of the petitioner Union Bank of the Philippines (UBP), as
security for a loan of P40,000,000 (pp. 58-59, Rollo).
As FRDC failed to pay its obligation which, as computed by Bancom, amounted to P42,075,134.84 as of June 30, 1979, Bancom foreclosed the mortgage on 45
condominium units including the unit of Martha David.
On March 4, 1980, the Sheriff executed a Certificate of Sale to Bancom and the Far East Bank and Trust Company (FEBTC) as the highest bidder for the total
price of P19,324,000. After the expiration of the redemption period, UBP held out the units for sale (pp. 58-59, Rollo)
On June 26, 1989, Martha David and Teresita Quazon, the latter assisted by her husband, Alfonso Maria Quazon, who had in the meantime, purchased Martha
David's unit, filed a complaint in the HLURB, against FRDC, UBP and FEBTC to annul the title of UBP and FEBTC over David's condominium unit and to order
the issuance of a new certificate of title in the name of Teresita Quazon. The complaint sought the following reliefs:
a. Upon the filing of this complaint an order be issued allowing the complainants to deposit on consignation the amount of P200,000.00 (to
be deposited by and/or in the name of Teresita T. Quazon) to be paid to respondents Union Bank and Far East Bank according to their
respective interests:
b. After hearing judgment be rendered —
i. considering complainants to have fully paid the total purchase price of the condominium unit originally purchased
by the complainant David and assigned and/or sold to complainant Quazon;
ii. ordering the cancellation of Condominium Certificate of Title No. 1117 in the name of Union bank and Far East
Bank; and
iii. ordering the issuance of a new Condominium Certificate of Title over, the same condominium unit covered by
CCT No. 1117 in the name of complainant Teresita T. Quazon as the assignee of the unit from complainant David.
Complainant further pray for such other reliefs as maybe deemed just and proper in the premises. (pp. 20-21, Rollo)
On July 17, 1989, UBP and FEBTC filed their answer questioning the HLURB's jurisdiction over the case. UBP filed a motion to dismiss on the same ground.
In an Order dated August 27, 1990, HLURB Arbiter, Cesar Manuel denied the motion of UBP, on the ground that the "motion will render nugatory the summary
nature of proceedings before this Office" (Annex D, p. 40, Rollo). HLURB ordered the parties to file their respective position papers within fifteen (15) days and
thereafter the case would be deemed submitted for resolution.
In due time, this petition for certiorari and prohibition with injunction was filed by UBP.
UBP's main argument is that the HLURB has no jurisdiction over the complaint for consignation which should have been filed in the regular trial courts.
Furthermore, as the HLURB was created in 1981 (E.O. No. 641), it has no jurisdiction over contracts that took effect prior to 1981.
Those arguments deserve scant consideration. The issue in HLURB Case No. REM-062689-4077 is the validity of the real estate mortgage of David's
condominium unit that FRDC executed in Favor of the Union Bank and Far East Bank without prior approval of the National Housing Authority and legality of the
title which the mortgagee banks acquired as highest bidder, therefore in the extrajudicial foreclosure sale. The applicable provisions of P.D. No. 957 otherwise
known as "The Subdivision and Condominium Buyer's Protective Decree" are quoted hereunder as follows:
Sec. 3. NATIONAL HOUSING AUTHORITY. — The National Housing Authority shall have exclusive jurisdiction to regulate the real estate
trade and business in accordance with the provisions of this decree. (Emphasis supplied)
Sec. 18. MORTGAGES. — No mortgage on any unit or lot shall be made by the owner or developer without prior written approval of the
Authority. Such approval shall not be granted unless it is shown that the proceeds of the mortgage loan shall be used for the development
of the condominium or subdivision project and effective measures have been provided to ensure such utilization. The loan value of each
lot or unit covered by the mortgage shall be determined and the buyer thereof, if any, shall be notified before the release of the loan. The
buyer may, at his option pay his installment for the lot or unit directly to the mortgagee who shall apply the payments to the corresponding
mortgage indebtedness secured by the particular lot or unit being paid for with a view to enabling said buyer to obtain title over the lot or
unit promptly after full payment thereof.
P.D. No. 1344 of April 2, 1978 expanded the jurisdiction of the National Housing Authority (NHA) to include the following:
Sec. 1. In the exercise of its functions to regulate the real estate trade and business and in addition to its powers provided for in
Presidential Decree No. 957, the National Housing Authority shall have exclusive jurisdiction to hear and decide cases of the following
nature:
A. Unsound real estate business practices:
B. Claims involving refund and any other claims filed by subdivision lot or condominium unit buyer against the
project owner, developer, dealer, broker, or salesman; and
C. Cases involving specific performance of contractual and statutory obligations filed by buyers of subdivision lot or
condominium unit against the owner, developer, dealer, broker, or salesman. (VLD Vol. 52, pp. 51-52.)
On February 7, 1981, Executive Order No. 648 transferred the regulatory and quasi-judicial functions of the NHA to Human Settlements Regulatory Commission.
Sec. 8. TRANSFER OF FUNCTIONS. — The regulatory functions of the National Housing Authority pursuant to Presidential Decrees No.
957, 1216, 1344 and other related laws are hereby transferred to the Commission together with such applicable personnel, appropriation,
records, equipment and property necessary for the enforcement and implementation of such functions. Among these regulatory functions
are:
1. Regulation of the real estate trade and business;
2. Registration of subdivision lots and condominium projects;
3. Issuance of license to sell subdivision lots and condominium units in the registered units;
4. Approval of performance bond and the suspension of license to sell;
5. Registration of dealers, brokers, and salesmen engaged in the business of selling subdivision lots or condominium units;
6. Revocation of registration of dealers, brokers and salesman;
7. Approval of mortgage on any subdivision lot or condominium unit made by the owner or developer;
8. Granting of permits for the alteration of plans and the extension of period for completion of subdivision or condominium projects;
9. Approval of the conversion to other purposes of roads and open spaces found within the project which have been donated to the city or
municipality concerned;
10. Regulation of the relationship between lessors and lessees; and
11. Hear and decide cases on unsound real estate business practices; claims involving refund filed against project owners, developers,
dealers, brokers or salesmen and cases of specific performance. (VLD Vol. 81, pp. 108-109.)
Executive Order No. 90 dated December 17, 1986 changed the name of the Human Settlements Regulatory Commission to "Housing and Land Use Regulatory
Board (HLURB).
Clearly, FRDC's act of mortgaging the condominium project to Bancom and FEBTC, without the knowledge and consent of David as buyer of a unit therein, and
without the approval of the NHA (now HLURB) as required by P.D. No. 957, was not only an unsound real estate business practice but also highly prejudicial to
the buyer. David, who has a cause of action for annulment of the mortgage, the mortgage foreclosure sale and the condominium certificate of title that was
issued to the UBP and FEBTC as highest bidders at the sale. The case falls within the exclusive jurisdiction of the NHA (now HLURB) as provided in P.D. No.
957 of 1976 and P.D. No. 1344 of 1978.
The allegations of UBP that the contract between FRDC and David had been rescinded that the installment payments made by David had been forfeited, that it is
FRDC who should refund the said installment payments to David are mere matters of defense which are not proper in a petition for certiorari (Planters Products
Inc. vs. CA, 193 SCRA 563: Commercial Corp. vs. PNB 175 SCRA 1).
In Solid Homes Inc. vs. Payawal, 177 SCRA 72, we struck down the exercise of jurisdiction by the Regional Trial Court of Quezon City over a lot buyer's
complaint for delivery of title against the subdivision owner.
In Antipolo Realty Corporation vs. NHA, 153 SCRA 399, this Court, citing PD Nos. 957 and 1344, upheld the jurisdiction of the National Housing Authority to
determine the rights of the parties under the contract to sell a subdivision lot.
In the more recent case of CT Torres Enterprises vs. Hibionada, 191 SCRA 268, we affirmed the HLURB's jurisdiction to hear and decide a complaint for specific
performance of the seller's obligation to deliver the title of a subdivision lot to the buyer, with damages.
We hold that the jurisdiction of the HLURB to regulate the real estate trade is broad enough to include jurisdiction over complaints for specific performance of the
sale, or annulment of the mortgage, of a condominium unit, with damages.
WHEREFORE, the instant petition is DISMISSED with costs against the petitioner.
SO ORDERED.
Cruz, Medialdea and Bellosillo, JJ., concur.
SECOND DIVISION
[G.R. No. 108547. February 3, 1997]
FELICIDAD VDA. DE CABRERA, MARYJANE CABRERA and FELICIDAD TEOKEMIAN,
plaintiff, vs. COURT OF APPEALS and VIRGILIA ORAIS DE FELICIO, represented by her
Attorney-in-Fact, ERNESTO M. ORAIS, defendants.
DECISION
TORRES, JR., J.:
Assailed in this Petition for Review on Certiorari is the Decision[1] of the respondent Court of Appeals
dated January 7, 1993 in CA-G.R. No. 22407-CV, the dispositive portion of which reads:
WHEREFORE, the decision of the lower court is hereby REVERSED and judgment is hereby entered
ordering defendants Felicidad Vda. de Cabrera and Marykane Cabrera to vacate the portion of Lot 2238
occupied by them and surrender possession thereof to plaintiff.
SO ORDERED.
Reversed by the foregoing pronouncements was the decision[2] of the Regional Trial Court, Branch 7,
Baganga, Davao Oriental in Civil Case No. 379, an action for Quieting of Title to Real Property,
Damages with Preliminary Injunction. The trial courts disposition reads:
WHEREFORE, the plaintiff is hereby ordered:
(a) to execute a reconveyance within thirty (30) days after this decision shall have become final and
executory in favor of defendant Felicidad Vda. De Cabrera corresponding only to that portion of Lot
No. 2239 actually and physically possessed and occupied by the defendant as seen from the sketch plan
of Engr. Enecio Magno (Exh. 2) and pinpointed and identified during the ocular investigation as to its
extent and boundaries of the said portion bought by defendants Felicidad Vda. De Cabrera from
Felicidad Teokemian;
(b) To reimburse defendants for litigation expenses and attorneys fees in the amount of P7,000.00; and
(c) To pay the cost.
SO ORDERED.
We are restating the facts as determined by the appellate court, viz:
On January 16, 1950, a Deed of Sale (Exh. B) was executed by Daniel Teokemian and Albertana
Teokemian in favor of Andres Orais over a parcel of unregistered land situated at Abejod, Cateel,
Davao Oriental with an area described as 7.3720 hectares. The property was owned in common by
Daniel and Albertana and their sister Felicidad Teokemian, having inherited the same from their late
father, Domingo Teokemian. However, the Deed of Sale was not signed by Felicidad, although her
name was printed therein as one of the vendors. On January 26, 1950, the parcel of land was surveyed
in the name of Virgilia Orais, daughter of the vendee Andres Orais, and denominated as Lot No. 2239,
PLS-287, Cateel Cadastre. As surveyed, the property had an area of 11.1000 hectares.
On June 24, 1957, Virgilia Orais was issued Free Patent No. V-79089. Original Certificate of Title No.
P-10908 was issued in her name (Exh. A).
On July 27, 1972, Alberto (sic. Albertana) Teokemian executed a Deed of Absolute Sale conveying to
Elano Cabrera, husband of Felicidad Cabrera, ONE HALF PORTION OF LOT NO. 2239, Cad-287,
eastern portion, containing an area of FIFTY FIVE THOUSAND FIVE HUNDRED TEN (55,510)
SQUARE METERS, more or less (Exh. 3), which portion supposedly corresponded to the one-third
share in Lot 2239 of Felicidad Teokemian who was not a party to the Deed of Sale earlier executed by
her brother and sister in favor of Andres Orais, Virgilia Orais predecessor-in-interest. It was explained
by Felicidad Cabrera that the Deed of Sale was signed by Albertana Teokemian, not by Felicidad
Teokemian, because the whole of Lot 2239 was adjudicated to Albertana in a decision of a cadastral
court dated June 8, 1965 as evidenced by a Certification of an officer-in-charge of the Office of the
Clerk of Court, RTC, Br. 7, Baganga, Davao Oriental (Exh. 4). Felicidad Cabrera and her husband
immediately took possession of the western portion of Lot 2239.
In 1974 and 1978, Virgilia Orais brothers, Rodolfo and Jimmy Orais went to Cateel, Davao Oriental
and confronted the Cabreras of the latters alleged encroachment and illegal occupation of their sisters
land, but no concrete action on the matter was pursued by Virgilia Orais until February 11, 1988 when
she filed Civil Case No. 379 against Felicidad Cabrera, now a widow, and her daughter Marykane
Cabrera for Quieting of Title to Real Property, Damages with Preliminary Mandatory Injunction.
The complaint, which was amended on June 22, 1988 by including Felicidad Teokemian as party
defendant (pp. 42-47, Records), alleged that sometime in 1972 and 1973 the late Elano Cabrera and
defendant Felicidad Cabrera, knowing that Lot 2239 was already registered in the name of the plaintiff,
prepared a document of sale and had Felicidad Teokemian sign it conveying a portion of said lot to
them as described in the Sketch Map (Annex D of the Complaint), after which they entered and
possessed said portion and enjoyed the fruits thereon. Plaintiff further averred that by reason of the
document of sale and the declaration of the property involved in the name of defendant Felicidad Vda.
De Cabrera, there created a cloud of doubt on the formers title on said property.
Plaintiff prayed as follows:
WHEREFORE, premises considered, plaintiff through the undersigned counsel respectfully prays this
Honorable Court that:
a) After due notice and hearing, a Writ of Preliminary Mandatory Injunction be issued restraining the
defendants from further dispossessing the plaintiff of the land in question;
b) Ordering the defendants to pay jointly the plaintiff the amount of not less than Sixteen Thousand
Two Hundred (P16,200) as total value of the rice produced from the riceland in question, and the
amount of Twenty One Thousand Six Hundred (P21,600.00) Pesos as the total proceeds of the nuts of
the coconut land in question;
c) The Defendants be ordered to pay the plaintiff the amount of Twenty Thousand (P20,000.00) Pesos
and Ten Thousand (P10,000.00) Pesos as litigation expenses;
d) The defendants be ordered to pay Six Thousand (P6,000.00) Pesos for attorneys fees; Four Hundred
(P400.00) Pesos as expenses for every appearance in Court;
e) The document of sale executed by Felicidad Teokemian and the Tax Declarations issued to the late
Elano Cabrera and Felicidad Vda. De Cabrera and the subsequent Tax Declaration creating a cloud of
doubt on the title, possession, rights and interest be declared null and void for being fraudulent and
without any legal basis and inexistent; and
f) Such other reliefs and remedies which this Honorable Court may deem just, proper, and equitable in
the premises.
In their answer with counterclaim (pp.10-18, Records), defendants alleged that they acquired a portion
of Lot 2239 in good faith and for value; that said portion was owned by Felicidad Teokemian who was
not a party to the Deed of Sale executed by Daniel and Albertana Teokemian on January 16, 1950 in
favor of Andres Orais over Lot 2239; that not having signed the Deed of Sale, Felicidad Teokemians
one-third share in Lot 2239 could not have been legally conveyed to Andres Orais; that Virgilia Orais
(successor-in-interest of Andres Orais) committed fraud in including the portion owned by Felicidad
Teokemian in her applying for free patent over Lot 2239 is concerned pursuant to Art. 1456 of the Civil
Code; and that plaintiff is guilty of laches for not initiating an action against defendants to recover the
western portion of Lot 2239 despite plaintiffs knowledge of defendants acquisition thereof in 1972, as
in fact it was only in 1988 when the complaint for quieting of title was filed in court.
Defendants prayed, thus:
WHEREFORE, this Honorable Court, after due notice and hearing on the merits of this case; to issue
order or orders;
1. Finding the defendants as the rightful, lawful, and legal owner of that portion which was sold to
them by Felicidad Teokemian and which was included in the title of plaintiff;
2. To find that the plaintiff did not own the said portion and that they have personal knowledge of the
same when the plaintiff filed and secured the title under the Administrative Proceeding;
3. Finding that the plaintiff is only holding the title to that portion only in an implied trust in favor of
the real owner;
4. Finding the plaintiff legally obligated to cause the segregation of the portion at their expense and
deliver formally the said portion to the real owners, the defendants.
5. To order the plaintiff to execute, prepare and or make any instrument or document to finally vest in
the Defendants absolute, clear and flawless title or ownership over the portion which the plaintiff holds
title in trust in defendants favor.
6. To Order the Plaintiff to pay actual damages in the sum of P2,000.00 as litigation expense and
Attorneys fees in the sum of P5,000.00 in favor of defendants;
7. To direct the plaintiff to account for the share of the real owner of the portion of land illegally
cultivated and planted by plaintiff to rice in favor of FELICIDAD TEOKEMIAN to be paid thru the
Defendants who are the owners, which consisted in ONE THIRD OF THE RICE HARVEST every
year since the year 1950 to 1972 when the portion was sold and cultivated by defendant based on the
computation of income by the plaintiff in Paragraph 16, a paragraph in the Second Cause of Action of
the complaint;
and to grant the defendants such other reliefs and remedies proper and equitable in the premises.[3]
On April 27, 1989, the lower court rendered judgment in favor of defendants and against the plaintiff,
ruling that the latter can no longer recover the western portion of Lot 2239 conveyed in 1972 by
Felicidad Teokemian in favor of the late Elano Cabrera and Felicidad Cabrera due to laches. In support
of its findings, the trial court referred to the Courts pronouncements in Lola vs. Court of Appeals,[4]
where it was held that although the defense of prescription is unavailing to the petitioners, because,
admittedly, the title to the subject lot was still registered in the name of the respondent, still the
petitioners have acquired title to it by virtue of the equitable principle of laches due to the respondents
failure to assert her claim and ownership for thirty-two years; and in Republic vs. Court of Appeals[5]
that, while it is true that by themselves tax receipts and declaration of ownership for taxation purposes
are not incontrovertible evidence of ownership, they become strong evidence of ownership acquired by
prescription when accompanied by proof of actual possession of the property; and in Miguel vs.
Catalino,[6] that even granting appellants proposition that no prescription lies against their fathers
recorded title, their passivity and inaction for more than thirty four years justifies the defendant
appellee in setting up the equitable defense of laches in his own behalf.
The respondent Court of Appeals reversed such findings upon appeal.
Even as the appellate court observed that the registration made by the plaintiffs was fraudulent insofar
as it involved the one-third interest of Felicidad Teokemian, which was not included in the sale
executed by them and Albertana and Daniel Teokemian, it nevertheless upheld its effects, on the
justification that the defendants action for reconveyance based on an implied trust had already been
barred by prescription. Furthermore, the action of the plaintiffs is not barred by laches, as was held by
the lower court. Said the appellate court:
We disagree with the lower courts ruling that plaintiff is barred from bringing an action for recovery of
ownership. Parenthetically, while the complaint filed by plaintiff is designated as one for quieting of
title, the allegations therein show that it is actually for recovery of ownership/possession.
First. The Deed of Absolute Sale dated May 27, 1972 (Exh. 3) executed by Albertana Teokemian in
favor of Elcano Cabrera over the portion of 55,510 square meters of Lot 2238 which allegedly
pertained to the one-third interest of Felicidad Teokemian did not convey any title to Elcano Cabrera,
assuming that Felicidad Teokemian still owned a one-third portion of Lot 2238 which was already
registered in plaintiffs name, considering that Albertana did not have any authority from Felicidad
Teokemian to effect such conveyance. Consequently, defendants Felicidad vda. De Cabrera and
Marykane Cabrera had acquired no title upon which to anchor their claim of ownership over the one-
third portion. Such being the case, plaintiffs cannot be barred by laches from instituting the action to
quiet title against defendants
xxx
Second. There was no allegation, much less proof, that Lot 2239 had been partitioned among the co-
owners Daniel, Albertana, and Felicidad, all surnamed Teokemian, before the land was sold to Andres
Orais in 1950 when the same was still unregistered. This being the case, and assuming that Felicidad
Teokemian had retained ownership over an undivided one-third portion of Lot 2239 despite its being
titled in plaintiffs name in 1958, Felicidad Teokemian could only dispose her undivided interest, not a
definite portion described in the Deed of Sale executed on July 27, 1972 (Exh. 3) as eastern part.
Worse, the supposed vendee, Elcano Cabrera, and her successors-in-interest, defendants Felicidad vda.
de Cabrera and Marykane Cabrera, occupied the western portion of Lot 2239, not the eastern portion
which was the subject of the sale. Their occupation of a definite portion of an undivided property,
without any color of title, could not have ripened into ownership on the principle of laches.
Third. As testified to by Jimmy Orais, plaintiffs brother, it was only in 1974 when plaintiff came to
know that her property was occupied by Elcano Cabrera. According to Jimmy, he and his elder brother
Dr. Rodolfo Orais went to the house of Elcano Cabrera three times in 1974 and in 1979 complaining of
the latters occupancy of their sisters property. Jimmy further declared that after Elcano Cabrera was
shown plaintiffs title to the property, Elcano Cabrera proposed a relocation survey of the area to
determine whether the premises occupied by him were included in the plaintiffs title (T.S.N. pp. 39-44,
January 3, 1989). It appears, however, that nothing came out of the proposal to conduct a relocation
survey. From the time plaintiff became aware of Cabreras possession of the western portion of Lot
2239, which was in 1974, up to the time she instituted the action for quieting of title in 1988, only
fourteen (14) years had elapsed. This case, therefore, has no congruency with those cases where the
Supreme Court ruled that the registered owner is barred by laches from recovering his property. Thus,
in Lola vs. Court of Appeals (145 SCRA 439), the petitioners acquired title to the land owned by
respondent by virtue of the equitable principles of laches due, according to the Supreme Court, to
respondents failure to assert her claims and ownership for thirty-two (32) years. In Miguel vs. Catalino
(26 SCRA 234), the Supreme Court said that appellants passivity and inaction for more than 34 years
(1928-1962) justifies the defendant-appellee in setting up the equitable defense of laches in his behalf.
In Mejia vs. Gampomana (100 Phil 277), it was held that the original owners right to recover back the
possession of the property and title thereto from the defendant has by the long period of 37 years and
by the patentees inaction and neglect been converted into a stale demand.
Laches, in a general sense, is failure or neglect, for an unreasonable and unexplained length of time, to
do that which, by the exercise of due diligence, could or should have been done earlier; it is negligence
or omission to assert a right within a reasonable time, warranting a presumption that the party entitled
to assert it (Tijam vs. Sibonghanoy, 32 SCRA 29). Since imprescriptibility is one of the basic features
of a Torrens title, it is not an ordinary delay in asserting ones right that will give rise to the application
of the principle of laches, otherwise, registered title can easily be defeated by prescription. This is
precisely the reason why, in the cases cited, the delay or inaction by the registered owners in asserting
their rights was considered unreasonable and unexplained because it took them from 32 to 37 years to
do so. In contrast, the delay in the case at bar was only fourteen years.
While possession of defendants Felicidad vda. De Cabrera and Marykane Cabrera could not have
ripened into ownership as already discussed, they are possessors in good faith of the portion occupied
by them and, therefore, entitled to the benefits accorded by the Civil Code as such.[7]
Sisters Felicidad vda. de Cabrera and Marykane Cabrera, together with Felicidad Teokemian are now
before the Court as Petitioners in this Petition for Review on Certiorari, seeking relief from the
respondent courts decision, assigning as errors the following:
A
RESPONDENT COURT OF APPEALS ERRED IN RULING THAT PRIVATE RESPONDENTS
COMPLAINT FILED IN 1988 FOR QUIETING OF TITLE WHICH ACTUALLY IS ONE FOR
RECOVERY OF OWNERSHIP AND POSSESSION AS FOUND BY RESPONDENT COURT IS
NOT BARRED BY LACHES BECAUSE:
1. A PERIOD OF 30 YEARS HAD ELAPSED FROM 1958 WHEN TORRENS TITLE WAS ISSUED
TO PRIVATE RESPONDENT TO 1988 WHEN HER COMPLAINT BELOW WAS FILED DURING
WHICH PERIOD OF TIME THE PROPERTY HAS BEEN IN OPEN, CONTINUOUS AND
ADVERSE POSSESSION OF THE ORIGINAL OWNER, FELICIDAD TEOKEMIAN, FROM 1958,
OR EVEN EARLIER IN 1941 WHEN SHE INHERITED THE PROPERTY, TO 1972 WHEN SHE
SOLD IT TO THE CABRERAS WHO CONTINUED THE PRIOR POSSESSION UNTIL 1988
WHEN PRIVATE RESPONDENTS COMPLAINT WAS FILED.
2. ASSUMING ARGUENDO RESPONDENT COURTS HOLDING THAT ONLY 14 YEARS HAD
ELAPSED COUNTED FROM 1974 WHEN CABRERAS POSSESSION WAS QUESTIONED BY
PRIVATE RESPONDENTS BROTHERS, STILL THAT PERIOD CONSTITUTES LACHES.
B
RESPONDENT COURT OF APPEALS ERRED IN HOLDING THAT LACHES DOES NOT APPLY
BECAUSE WHAT WAS SOLD TO THE CABRERAS WAS A DEFINITE PORTION OF THE
COMMUNITY PROPERTY BEFORE PARTITION, HENCE, VOID AND THAT ALBERTANA
TEOKEMIAN WHO SIGNED THE DOCUMENT OF SALE IN FAVOR OF THE CABRERAS HAD
NO AUTHORITY FROM HER SISTER-CO-OWNER FELICIDAD TEOKEMIAN TO EXECUTE
THE DEED OF CONVEYANCE.[8]
The bone of the petitioners contention rests on the alleged waiver of the plaintiff to recover any interest
she had in the one-third portion of the property inherited by Daniel, Albertana and Felicidad Teokemian
from their late father, Domingo, due to the long period of time which lapsed from the time the plaintiffs
title was registered until the action for quieting of title was instituted.
We find merit in the petition.
At the outset, it must be observed that the Certificate of Title of the plaintiff, which was derived from
Free Patent No. V-79089, issued in the name of Virgilia Orais, leaves much to be desired in propriety,
considering that the Deed of Sale executed by Daniel and Albertana Teokemian, on one hand and
Andres Orais on the other, did not bear the signature of Felicidad Teokemian, and therefore, did not
cover the latters share.
It was the respondent appellate court which observed that the registration of the plaintiffs title over the
subject property was fraudulent insofar as it involved the one-third interest of Felicidad Teokemian
who did not sign the Deed of Sale in favor of plaintiffs predecessor-in-interest and, therefore, the latter
held that portion as a trustee of an implied trust for the benefit of Felicidad, pursuant to Art. 1456 of the
Civil Code.[9] Needless to state, these conclusions, being matters of fact, are entitled to our full
affirmation, since they are congruent with the findings of the trial court, thus:
It would seem from the facts of the case that the basis of the right of plaintiff over the land in litigation
specifically Lot No. 2239 now titled in the name of the plaintiff, located at Buayahon, Abejod, Cateel,
Davao Oriental, proceeded from the Deed of Sale executed by Daniel Teokemian and Albertana
Teokemian on January 16, 1950 acknowledged before Judge Proserador Danao as Notary Ex Oficio.
Taking a hard look over the aforesaid deed of sale (Exh. B) the said document apparently included the
third heir of Domingo Teokemian Felicidad Teokemian because her name was typewritten together
with her sister Albertana and brother Daniel all surnamed Teokemian in the said document. Again this
fact will come to mind that the vendee Andres Orais was anticipating at the time Felicidad Teokemian
will also sell her share in this portion of land (Lot No. 2239) which at the time of the sale it was still
unregistered land. The non-signing of Felicidad Teokemian over her typewritten name in this deed of
sale (Exh. B) will attest to the fact that she did not sell her share in the lot in question. After this sale
the vendee Andres Orais through his encargado Melecio Capilitan and later Servillano Abarca
immediately took possession of the two third portion of said parcel of land respecting the third portion
owned by Felicidad Teokemian.[10]
However, the appellate court stated further that nonetheless, the plaintiffs attempt to recover the
property is justified because defendant Felicidad Teokemians own action for reconveyance has already
been barred by prescription,[11] which is the same as stating that the very tardiness of the plaintiffs in
pursuing the present action for reconveyance of the subject property has rendered the defendants
defense nugatory, and has made the fortress of the plaintiffs case impregnable.
This conclusion is incorrect. As can be discerned from the established facts, the Certificates of Title of
the vendees Orais are, to say the least, irregular, and were issued in a calculated move to deprive
Felicidad Teokemian of her dominical rights over the property reserved to her by descent. Plaintiff
could not have registered the part reserved to Felicidad Teokemian, as this was not among those ceded
in the Deed of Sale between Daniel/Albertana Teokemian and Andres Orais. It must be remembered
that registration does not vest title, it is merely evidence of such title over a particular property.
(Embrado vs. Court of Appeals)[12]
The defense of indefeasibility of the Torrens Title does not extend to a transferee who takes the
certificate of title with notice of a flaw in his title. (Anonuevo vs. Court of Appeals)[13] The principle of
indefeasibility of title is unavailing where there was fraud that attended the issuance of the free patents
and titles. (Meneses vs. Court of Appeals)[14]
Be that as it may, that the right of the defendants for reconveyance of the subject property arising from
an implied trust under Article 1456 of the Civil Code is material to the instant case, such remedy has
not yet lapsed, as erroneously submitted by the plaintiffs, and, is thus, a bar to the plaintiffs action. In
the case of Heirs of Jose Olviga vs. Court of Appeals,[15] we observed that an action for reconveyance
of a parcel of land based on implied or constructive trust prescribes in ten years, the point of reference
being the date of registration of the deed or the date of the issuance of the certificate of title over the
property, but this rule applies only when the plaintiff or the person enforcing the trust is not in
possession of the property, since if a person claiming to be the owner thereof is in actual possession of
the property, as the defendant is in the instant case, the right to seek reconveyance, which in effect
seeks to quiet title to the property, does not prescribe. The reason for this is that one who is in actual
possession of a piece of land claiming to be the owner thereof may wait until his possession is
disturbed or his title is attacked before taking steps to vindicate his right, the reason for the rule being,
that his undisturbed possession gives him a continuing right to seek the aid of a court of equity to
ascertain and determine the nature of the adverse claim of a third party and its effect on his own title,
which right can be claimed only by one who is in possession.
As it is, before the period of prescription may start, it must be shown that (a) the trustee has performed
unequivocal acts of repudiation amounting to an ouster of the cestui que trust; (b) such positive acts of
repudiation have been made known to the cestui que trust; and, (c) the evidence thereon is clear and
positive.[16]
In the case at bar, the defendant Felicidad Teokemian, and thereafter, the Cabreras, were in actual
possession of the property since it was left to Felicidad Teokemian by her father in 1941, which
possession had not been interrupted, despite the sale of the two-third portion thereof to the plaintiff in
1950, and the latters procurement of a Certificate of Title over the subject property in 1957. Until the
institution of the present action in 1988, plaintiffs, likewise, have not displayed any unequivocal act of
repudiation, which could be considered as an assertion of adverse interest from the defendants, which
satisfies the above-quoted requisites. Thus, it cannot be argued that the right of reconveyance on the
part of the defendants, and its use as defense in the present suit, has been lost by prescription.
On the other hand, the action for reconveyance (quieting of title) of the plaintiff was instituted only in
1988, that is, thirty years from the time the plaintiffs husband was able to acquire Certificate of Title
covering the properties inherited by the Teokemians, and apparently including that portion belonging to
Felicidad Teokemian. In the meantime, defendant Felicidad vda. De Cabrera and her late husband have
been actively in possession of the same, tilling it, and constructing an irrigation system thereon. This
must surely constitute such tardiness on the part of the plaintiff constituting the basis for laches.
Laches has been defined as the failure or neglect, for an unreasonable and unexplained length of time,
to do that which by exercising due diligence could or should have been done earlier; it is negligence or
omission to assert a right within a reasonable time, warranting a presumption that the party entitled to
assert it either has abandoned it or declined to assert it.[17] The defense of laches is an equitable one and
does not concern itself with the character of the defendants title, but only with whether or not by reason
of plaintiffs long inaction or inexcusable neglect, he should be barred from asserting his claim at all,
because to allow him to do so would be inequitable and unjust to defendant. Laches is not concerned
merely with lapse of time, unlike prescription. While the latter deals with the fact of delay, laches deals
with the effect of unreasonable delay.[18]
This Court emphasized in Mejia de Lucas vs. Gampona,[19] the reason upon which the rule is based is
not alone the lapse of time during which the neglect to enforce the right has existed, but the changes of
condition which may have arisen during the period in which there has been neglect. In other words,
where a court finds that the position of the parties has to change, that equitable relief cannot be afforded
without doing injustice, or that the intervening rights of third persons may be destroyed or seriously
impaired, it will not exert its equitable powers in order to save one from the consequences of his own
neglect.
In our jurisdiction, it is an enshrined rule that even a registered owner of property may be barred from
recovering possession of property by virtue of laches. Under the Land Registration Act (now 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. The same is not true with regard to Laches.[20]
As we have stated earlier in Mejia de Lucas vs. Gamponia, while the defendant may not be considered
as having acquired title by virtue of his and his predecessors long continued possession (37 years) the
original owners right to recover back the possession of the property and the title thereto from the
defendant has, by the latters long period of possession and by patentees inaction and neglect, been
converted into a stale demand.
The argument that laches does not apply because what was sold to the Cabreras was a definite portion
of the community property, and, therefore, void, is likewise untenable.
Under Article 493 of the Civil Code:
Each co-owner shall have the full ownership of his part and of the fruits and benefits pertaining thereto,
and even he may therefore alienate, assign or mortgage it, and even substitute another person in its
enjoyment, except when personal rights are involved. But the effect of the alienation or the mortgage,
with respect to the co-owners, shall be limited to the portion which may be allotted to him in the
division upon the termination of the co-ownership.
In Go Ong vs. Court of Appeals,[21] this Court ruled that the heirs, as co-owners, shall each have the full
ownership of his part and the fruits and benefits pertaining to it. An heir may, therefore, alienate, assign
or mortgage it, and even substitute another person in its enjoyment, except when the personal rights are
involved. But the effect of the alienation or 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.
Undisputed is the fact that since the sale of the two-third portion of the subject property to the plaintiff,
the latter had allowed Felicidad Teokemian to occupy that one-third portion allotted to her. There has,
therefore, been a partial partition, where the transferees of an undivided portion of the land allowed a
co-owner of the property to occupy a definite portion thereof and has not disturbed the same, for a
period too long to be ignored--the possessor is in a better condition or right (Potior est conditio
possidentis).
Clearly, the plaintiff in this instance is barred from asserting her alleged right over the portion subject
matter in the instant case on the ground that their right has been lost by laches. In Bailon-Casilao vs.
Court of Appeals, we ruled that:
As early as 1923, this Court has ruled 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
(Punzalan vs. Boon Liat, 44 Phil 320 [1923]). This is because under the aforementioned codal
provision, the sale or other dispostion affects only his undivided share and the transferee gets only what
would correspond to his grantor in the partition of the things owned in common (Ramirez vs. Bautista,
14 Phil 528 [1909]). xxx For Article 494 of the Civil Code explicitly declares: No prescription shall lie
in favor of a co-owner or co-heir so long as he expressly or impliedly recognizes the co-ownership.[22]
IN VIEW WHEREOF, the petition is hereby GRANTED. The decision of the Court of Appeals dated
January 7, 1993 is hereby SET ASIDE. The decision of the trial court dated April 27, 1989 is hereby
REINSTATED in toto.
SO ORDERED.
Regalado, (Chairman), Puno and Mendoza, JJ., concur.
Romero, J., took no part; related to attorney who is a partner in law firm which is counsel of record.
SECOND DIVISION
[G.R. No. L-59974. March 9, 1987.]
TEODORA, MARTA, JOSE, SIXTO, RICARDO, ROBERTO, PILAR, VIRGILIO, all

surnamed MARIANO and AURORA EUGENIO, Petitioners, v. THE HON. JUDGE JESUS R.
DE VEGA, PRESIDING JUDGE, COURT OF FIRST INSTANCE OF BULACAN, BRANCH
II, PILAR, REGINA, FELISA and DOMINADOR all surnamed PANGANIBAN, Respondents.
Ernesto T. Zshornack, Jr., for Petitioners.
Emiliano S. Samson for Private Respondents.
DECISION
PARAS, J.:
This is an appeal from the order of the then Court of First Instance of Bulacan in Civil Case No. 6200-
M ** for partition and delivery of possession of certain shares in the conjugal assets. The dispositive
portion of the order which herein petitioners assail states: jgc:chanrobles.com.ph
"Upon due research and study, the Court finds sustainable the position of the defendants that the
settled prevailing rule at present as laid down in latest decisions of the Supreme Court is that the right
or action to enforce an implied or constructive trust (which is the situation indicated in the case at bar)
in one’s favor prescribes in ten (10) years. The citation of authorities made by defendants appears to
be correct. (Carontes v. C.A., 76 SCRA 514; Dela Cerna v. Dela Cerna, 72 SCRA 514). In other
words, the rule of imprescriptibility of actions based on constructive trust invoked by plaintiffs has
been reversed and abandoned.
For the foregoing premises, this case has to be resolved for defendants-movants. Case is accordingly
dismissed. No costs." cralaw virtua1aw library
The records show that spouses Urbano Panganiban and Roberta Espino owned, as conjugal property,
during their lifetime 29 parcels of unregistered land with improvements thereon, all situated in
Dampol 1st, Pulilan, Bulacan. On February 18, 1903, Roberta Espino died intestate and without debts
in Pulilan, Bulacan, where she was a resident before and at the time of her death. She left her husband,
Urbano Panganiban, and their two legitimate children, Mercedes and Gaudencia as her only forced
heirs. On September 18, 1952, Urbano Panganiban died also intestate and without debts in Pulilan,
Bulacan, leaving as his only compulsory heirs the children of Gaudencia (who together with her sister
Mercedes, had predeceased their father) who are now petitioners herein and his legitimate children
with his second wife, Atanacia Agustin, who are the private respondents herein.
The records also disclose that on June 19, 1981, or 28 years, 9 months and 1 day after Urbano’s death,
petitioners instituted an action with the then CFI of Bulacan for partition and delivery of possession of
their corresponding shares in the conjugal estate of decedents-spouses Urbano and Roberta consisting
of subject 29 parcels of unregistered land. Petitioners filed the case because since the death of Urbano,
their grandfather, in 1952, private respondents (his children by the second marriage) had taken
possession of the whole conjugal property and appropriated to themselves to the exclusion of
petitioners the products coming from the 29 parcels of land. chanrobl es virtual lawlibrary
On September 30, 1981 or around three (3) months from the filing of the civil case, respondent judge
issued the questioned order. Petitioners’ motion for reconsideration of the same was denied on January
12, 1982.
Hence, this petition which petitioners filed on April 5, 1982 praying for the revocation of the
questioned order and the reinstatement of this case in the trial court.
Petitioners anchor their petition on the following grounds: chanrob1es virtual 1aw library
1. The subject parcels of land being unregistered lands do not come within the applicability of the
decisions invoked which involve registered lands;
2. Assuming that the ten-year prescriptive period applies even in cases of unregistered lands, the
prescriptive period did not commence to run against petitioners since there is no allegation, much less
evidence, that private respondents had openly and effectively repudiated the co-ownership or
constructive trust over the subject property;
3. There can be no constructive notice of an adverse claim of ownership in favor of private

respondents by placing the subject lands in their names in the office of the Provincial Assessor; and
4. Petitioners’ action for partition is still timely despite the lapse of almost 29 years during which
private respondents had been in possession of the property.
Private respondents, on the other hand, contend that the order appealed from has already become final
and no longer appealable; and, that the petition is not meritorious because of the following: chanrob1es virtual 1aw library
1. The theory of constructive trust was brought out by petitioners themselves;
2. Petitioners cannot contradict their own admissions in the pleadings;
3. Petitioners slept on their alleged rights; and
4. Contrary to petitioners’ claim, the jurisprudence cited by private respondents apply to unregistered
lands. chanrobles virtual lawlibrary
The resolution of this case hinges on the focal issue of prescription.
We find the order of the trial court dismissing petitioners’ complaint on the ground of prescription
under Section 40 of Public Act No. 190 to be inaccurate.
As We see it, this case is governed by the rules on co-ownership, since both parties are clearly co-
owners of the disputed properties, having inherited the same from a common ancestor.
Now then, Art. 494 (last paragraph) of the Civil Code provides: red:chanrobl es.com.ph
"x x x
"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." cral aw virtua1aw library
In view of their lack of a clear repudiation of the co-ownership, duly communicated to the petitioners
(the other co-owners), private respondents cannot acquire the shares of the petitioners by prescription.
The record in the Office of the Assessor is not the sufficient repudiation and communication
contemplated by the law. Neither may the private respondents’ possession of the premises militate
against petitioners’ claim. After all, co-owners are entitled to be in possession of the premises.
The existence of the co-ownership here argues against the theory of implied trust, for then a co-owner
possesses co-owned property not in behalf of the other co-owners but in his own behalf.
Anent the contention that the judgment of the trial court has already become final and executory, the
records reveal the contrary. The appeal was filed on time on April 5, 1982 or before April 28, 1982,
the last day granted by this Court for the filing of the appeal. chanrobles law library
WHEREFORE, the assailed Order is SET ASIDE, and a new one is rendered remanding this case to
the lower court for adjudication on the merits.
SO ORDERED.
Fernan (Chairman), Gutierrez, Jr., Padilla, Bidin and Cortes, JJ., concur.
Alampay, J., on leave.
Endnotes:
** Penned by Judge Jesus R. De Vega.
THIRD DIVISION
[G.R. No. 108947. September 29, 1997]
ROLANDO SANCHEZ, FLORIDA MIERLY SANCHEZ, ALFREDO T. SANCHEZ and MYRNA T.
SANCHEZ, petitioners, vs. THE HONORABLE COURT OF APPEALS, ROSALIA S. LUGOD,
ARTURO S. LUGOD, EVELYN LUGOD-RANISES and ROBERTO S. LUGOD, respondents.
DECISION
PANGANIBAN, J.:
Is a petition for certiorari, in lieu of appeal, the proper remedy to correct orders of a probate court
nullifying certain deeds of sale and, thus, effectively passing upon title to the properties subject of such
deeds? Is a compromise agreement partitioning inherited properties valid even without the approval of
the trial court hearing the intestate estate of the deceased owner?
The Case
These questions are answered by this Court as it resolves the petition for review on certiorari before us
assailing the November 23, 1992 Decision[1] of the Court of Appeals[2] in CA-G.R. SP No. 28761
which annulled the decision[3] of the trial court[4] and which declared the compromise agreement among
the parties valid and binding even without the said trial courts approval. The dispositive portion of the
assailed Decision reads:
WHEREFORE, for the reasons hereinabove set forth and discussed, the instant petition is GRANTED
and the challenged decision as well as the subsequent orders of the respondent court are ANNULLED
and SET ASIDE. The temporary restraining order issued by this Court on October 14, 1992 is made
PERMANENT. The compromise agreement dated October 30, 1969 as modified by the memorandum
of agreement of April 13, 1970 is DECLARED valid and binding upon herein parties. And Special
Proceedings No. 44-M and 1022 are deemed CLOSED and TERMINATED.
SO ORDERED. [5]
The Antecedent Facts
The facts are narrated by the Court of Appeals as follows:
[Herein private respondent] Rosalia S. Lugod is the only child of spouses Juan C. Sanchez and Maria
Villafranca while [herein private respondents] Arturo S. Lugod, Evelyn L. Ranises and Roberto S.
Lugod are the legitimate children of [herein private respondent] Rosalia.
[Herein petitioners] Rolando, Florida Mierly, Alfredo and Myrna, all surnamed Sanchez, are the
illegitimate children of Juan C. Sanchez.
Following the death of her mother, Maria Villafranca, on September 29, 1967, [herein private
respondent] Rosalia filed on January 22, 1968, thru counsel, a petition for letters of administration over
the estate of her mother and the estate of her father, Juan C. Sanchez, who was at the time in state of
senility (Annex B, Petition).
On September 30, 1968, [herein private respondent] Rosalia, as administratrix of the intestate estate of
her mother, submitted an inventory and appraisal of the real and personal estate of her late mother
(Annex C, Petition).
Before the administration proceedings in Special Proceedings No. 44-M could formally be terminated
and closed, Juan C. Sanchez, [herein private respondent] Rosalias father, died on October 21, 1968.
On January 14, 1969, [herein petitioners] as heirs of Juan C. Sanchez, filed a petition for letters of
administration (Special Proceedings No. 1022) over the intestate estate of Juan C. Sanchez, which
petition was opposed by (herein private respondent) Rosalia.[6]
On October 30, 1969, however, [herein private respondent] Rosalia and [herein petitioners] assisted by
their respective counsels executed a compromise agreement (Annex D, Petition) wherein they agreed to
divide the properties enumerated therein of the late Juan C. Sanchez.
On November 3, 1969, petitioner Rosalia was appointed by [the trial court], and took her oath as the
administratrix of her fathers intestate estate.
On January 19, 1970, [herein petitioners] filed a motion to require administratrix, [herein private
respondent] Rosalia, to deliver deficiency of 24 hectares and or to set aside compromise agreement
(Annex E, Petition).
Under date of April 13, 1970, (herein private respondent) Rosalia and [herein petitioners] entered into
and executed a memorandum of agreement which modified the compromise agreement (Annex F.
Petition)
On October 25, 1979, or nine years later, [herein petitioners] filed, thru counsel, a motion to require
[herein private respondent] Rosalia to submit a new inventory and to render an accounting over
properties not included in the compromise agreement (Annex G, Petition). They likewise filed a motion
to defer the approval of the compromise agreement (Annex H, Ibid), in which they prayed for the
annulment of the compromise agreement on the ground of fraud.
On February 4, 1980, however, counsel for [herein petitioners] moved to withdraw his appearance and
the two motions he filed, Annex G and H (Annex I, Petition).
On February 28, 1980, the [trial] court issued an order directing [herein private respondent] Rosalia to
submit a new inventory of properties under her administration and an accounting of the fruits thereof,
which prompted [herein private respondent] Rosalia to file a rejoinder on March 31, 1980 (Annex K,
Petition).
On May 12, 1980, [herein petitioners], thru new counsel, filed a motion to change administratrix
(Annex L, Petition) to which [herein private respondent] Rosalia filed an opposition (AnnexM, Ibid).
The parties were subsequently ordered to submit their respective position papers, which they did
(Annexes N and O, Petition). On September 14, 1989, former counsel of (herein petitioners) entered his
re-appearance as counsel for (herein petitioners).
On the bases of memoranda submitted by the parties, the [trial court], this time presided by Judge
Vivencio A. Galon, promulgated its decision on June 26, 1991, the dispositive portion of which states:
WHEREFORE, premises considered, judgment is hereby rendered as follows by declaring and
ordering:
1.That the entire intestate estate of Maria Villafranca Sanchez under Special Proceedings No.44-M
consists of all her paraphernal properties and one-half (1/2) of the conjugal properties which must be
divided equally between Rosalia Sanchez de Lugod and Juan C. Sanchez;
2.That the entire intestate estate of Juan C. Sanchez under Special Proceedings No. 1022 consists of all
his capital properties, one-half (1/2) from the conjugal partnership of gains and one-half (1/2) of the
intestate estate of Maria Villafranca under Special Proceedings No. 44-M;
3.That one-half (1/2) of the entire intestate estate of Juan C. Sanchez shall be inherited by his only
legitimate daughter, Rosalia V. Sanchez de Lugod while the other one-half (1/2) shall be inherited and
be divided equally by, between and among the six (6) illegitimate children, namely: Patricia Alburo,
Maria Ramuso Sanchez, Rolando Pedro T. Sanchez, Florida Mierly T. Sanchez, Alfredo T. Sanchez and
Myrna T. Sanchez;
4.That all the Deed (sic) of Absolute Sales executed by Juan C. Sanchez and Maria Villafranca in favor
of Rosalia Sanchez Lugod, Arturo S. Lugod, Evelyn S. Lugod and Roberto S. Lugod on July 26, 1963
and June 26, 1967 are all declared simulated and fictitious and must be subject to collation and partition
among all heirs;
5.That within thirty (30) days from finality of this decision, Rosalia Sanchez Lugod is hereby ordered
to prepare a project of partition of the intestate estate of Juan C. Sanchez under Special Proceedings
No. 1022 and distribute and deliver to all heirs their corresponding shares. If she fails to do so within
the said thirty (30) days, then a Board of Commissioners is hereby constituted, who are all entitled to
honorarium and per diems and other necessary expenses chargeable to the estate to be paid by
Administratrix Rosalia S. Lugod, appointing the Community Environment and Natural Resources
Officer (CENRO) of Gingoog City as members thereof, with the task to prepare the project of partition
and deliver to all heirs their respective shares within ninety (90) days from the finality of said decision;
6.That within thirty (30) days from receipt of this decision, Administratrix Rosalia Sanchez Vda. de
Lugod is hereby ordered to submit two (2) separate certified true and correct accounting, one for the
income of all the properties of the entire intestate estate of Maria Villafranca under Special Proceedings
No. 44-M, and another for the properties of the entire intestate estate of Juan C. Sanchez under Special
Proceedings No. 1022 duly both signed by her and both verified by a Certified Public Accountant and
distribute and deliver to her six (6) illegitimate brothers and sisters in equal shares, one -half (1/2) of
the net income of the estate of Juan C. Sanchez from October 21, 1968 up to the finality of this
decision;
7.For failure to render an accounting report and failure to give cash advances to the illegitimate
children of Juan C. Sanchez during their minority and hour of need from the net income of the estate of
Juan C. Sanchez, which adversely prejudiced their social standing and pursuit of college education, (the
trial court) hereby orders Rosalia Sanchez Vda. de Lugod to pay her six (6) illegitimate brothers and
sisters the sum of Five Hundred Thousand (P500,000.00) Pesos, as exemplary damages, and also the
sum of One Hundred Fifty Thousand (P150,000.00) Pesos for attorneys fees;
8.Upon release of this decision and during its pendency, should appeal be made, the Register of Deeds
and Assessors of the Provinces and Cities where the properties of Juan C. Sanchez and Maria
Villafranca are located, are all ordered to register and annotate in the title and/or tax declarations, the
dispositive portion of this decision for the protection of all heirs and all those who may be concerned.
SO ORDERED.
[Herein private respondent] Rosalia filed a motion for reconsideration dated July 17, 1991 (Annex P,
Petition) on August 6, 1991.
On August 13, 1991, [herein petitioners] filed a motion for execution and opposition to [herein private
respondent] Rosalias motion for reconsideration (Annex Q, Petition).
On September 3, 1991, [the trial court] issued an Omnibus Order (Annex S, Petition) declaring, among
other things, that the decision at issue had become final and executory.
[Herein private respondent] Rosalia then filed a motion for reconsideration of said Omnibus Order
(Annex T, Petition). Said [herein private respondent] was allowed to file a memorandum in support of
her motion (Annex V, Petition).
On June 26, 1991, [the trial court] issued and Order denying petitioner Rosalias motion for
reconsideration (Annex W, Petition).[7]
Thereafter, private respondents elevated the case to the Court of Appeals via a petition for certiorari and
contended:
I
The [trial court] has no authority to disturb the compromise agreement.
II
The [trial court] has arbitrarily faulted [herein private respondent] Rosalia S. Lugod for alleged
failure to render an accounting which was impossible.
III
The [trial court] acted without jurisdiction in derogation of the constitutional rights of [herein
private respondents] Arturo S. Lugod, Evelyn L. Ranises and Roberto S. Lugod when [the trial
court] decided to annul the deed of sale between the said [herein private respondents] and Juan C.
Sanchez without affording them their day in court.
IV
[The trial court judge] defied without rhyme or reason well-established and entrenched
jurisprudence when he determined facts sans any evidence thereon.
V
[The trial court] grossly misinterpreted [herein private respondent] Rosalia S. Lugods right to appeal.[8]
For claritys sake, this Court hereby reproduces verbatim the compromise agreement[9] of the parties:
COMPROMISE AGREEMENT
COME NOW, the parties in the above-entitled case, motivated by their mutual desire to preserve and
maintain harmonious relations between and among themselves, for mutual valuable considerations and
in the spirit of good will and fair play, and, for the purpose of this Compromise Agreement, agree to the
following:
1. That the deceased Juan C. Sanchez who died intestate on October 21, 1968 was legally married to
Maria Villafranca de Sanchez, who predeceased her on September 29, 1967, out of whose wedlock
Rosalia Sanchez Lugod, Oppositor herein, was born, thus making her the sole and only surviving
legitimate heir of her deceased parents;
2. That the said deceased Juan C. Sanchez, left illegitimate children, Intervenors-Oppositors and
Petitioners, respectively, herein namely;
(1) Patricio Alburo, born out of wedlock on March 17, 1926 at Cebu City,
Philippines, to Emilia Alburo;
(2) Maria Ramoso Sanchez, born out of wedlock on May 9, 1937 at Gingoog,
Misamis Oriental, now, Gingoog City, to Alberta Ramoso;
(3) (a) Rolando Pedro Sanchez, born on May 19, 1947,
(b) Florida Mierly Sanchez, born on February 16, 1949,
(c) Alfredo Sanchez, born on July 21, 1950,and
(d) Myrna Sanchez, born on June 16, 1952, all born out of wedlock to Laureta
Tampus in Gingoog City, Philippines.
3. That the deceased Juan C. Sanchez left the following properties, to wit:
I. SEPARATE CAPITAL OF JUAN C. SANCHEZ
NATURE, DESCRIPTION AND AREA ASSESSED VALUE
(1) Agricultural Land. Covered by Tax. Decl. No. 06458, Cad. Lot No. 1041 C-2, located at Murallon,
Gingoog City and bounded on the North by Lot Nos. 1033, 1035, 1036, 1037, 1039, 1040, 1042 &
1043; South by Lot No. 1080, 1088, 1087 & 1084; East by Lot Nos. 1089, 1061 & 2319; West by Lot
Nos. 954, 1038, 1057 & 1056, containing an area of ONE HUNDRED EIGHTY THREE THOUSAND
SIX HUNDRED SEVENTY TWO (183, 672) sq. ms. more or less.
P21,690.00
II. CONJUGAL PROPERTY OF JUAN C. SANCHEZ AND MARIA VILLAFRANCA DE
SANCHEZ
(1) Agricultural Land. Covered by Tax Decl. No. 06447, Cad. Lot No. 2745, C-7 located
at Agay-ayan, Gingoog City and bounded on the North by Lot Nos. 2744, 2742, 2748;
South by Lot No. 2739; East by Lot No. 2746; West by Lot No. 2741, containing an area
of FOURTEEN THOUSAND SEVEN HUNDRED (14,700) sq. ms. more or less.
P1,900.00
(2) Agricultural Land. Covered by Tax Decl. No. 06449, Cad, Lot No. 3271 C-7 located
at Panyangan, Lanao, Gingoog City and bounded on the North by Lot No. 3270; South
by Lot Nos. 2900 & 3462; East by Panyangan River & F. Lumanao; and Part of Lot
3272; and West by Samay Creek, containing an area of ONE HUNDRED FOUR
THOUSAND SIX HUNDRED (104,600) sq. ms. more or less.
P11,580.00
(3) Agricultural Land. Covered by Tax Decl. No. 06449, Cad. Lot No. 2319, Case 2,
located at Murallon, Gingoog City and bounded on the North by Lot No. 1061; South by
Hinopolan Creek; East by Lot No. 1044; and West by Lot No. 1041, containing an area
of THREE THOUSAND TWO HUNDRED TWENTY FIVE (3,225) sq. ms. more or
less.
(4) Agricultural Land. Covered by Tax Decl. No. 06452, Cad. Lot No. 3272, C-7 Part 4
located at Panyangan, Lunao, Gingoog City and bounded on the North by Lot Nos. 3270
& 3273; East by Panyangan River; South by Panyangan River; and West by Lot Nos.
3270 & 3271, containing an area of FIFTY FIVE THOUSAND SIX HUNDRED
(55,600) sq. ms. more or less, being claimed by Damian Querubin.
P2.370.00
(5) Agricultural Land. Covered by Tax Decl. No. 06453, Cad. Lot No. 3270 Case 7,
located at Sunog, Lunao, Gingoog City and bounded on the North by Samay Creek &
Lot 3267; South by Lot Nos. 3271 & 3272; East by Lot Nos. 3269 & 3273; and West by
Samay Creek, containing an area of FOUR HUNDRED EIGHT THREE THOUSAND
SIX HUNDRED (483,600) sq. ms. more or less.
P61,680.00
(6) Agricultural Land. Covered by Tax Decl. No. 06457, Cad. Lot No. 3273, C-7 Part 2
located at Panyangan, Lunao, Gingoog City and bounded on the North by Lot No. 3269;
South by Lot No. 3272; East by Panyangan River; and West by Lot No. 3270, contaning
an area of THIRTY FOUR THOUSAND THREE HUNDRED (34,300) sq. ms. more or
less, being claimed by Miguel Tuto.
P3,880.00
(7) Agricultural Land. Covered by Tax Decl. No. 12000, Cad. Lot No. 2806, Case 7
located at Agayayan, Gingoog City and bounded on the North by Agayayan River;
South by Victoriano Barbac; East by Isabelo Ramoso; and West by Restituto Baol,
contaning an area of SIX THOUSAND SIX HUNDRED SEVENTY SIX (6,676) sq.
ms. more or less.
P380.00
(8) Agricultural Land. Covered by Tax Decl. No. 12924, Cad. Lot No. 1206 C-1 located
at Cahulogan, Gingoog City and bounded on the NW., by Lot No. 1209; SW., by Lot
No. 1207; East by National Highway; and West by Lot No. 1207; containing an area of
FOUR THOUSAND FIVE HUNDRED THIRTEEN (4,513) sq. ms. more or less.
P740.00
(9) Agricultural Land. Covered by Tax Decl. No. 12925, Cad. Lot No. 5554, located at
Tinaytayan, Pigsalohan, Gingoog City and bounded on the North by Lot Nos. 5559 &
5558; South by Lot No. 3486; East by Lot No. 5555; and West by Lot No. 5355,
containing an area of EIGHTEEN THOUSAND FIVE HUNDRED TWENTY EIGHT
(18,528) sq. ms. more or less.
P320.00
(10) Agricultural Land. Covered by Tax Decl. No. 12926, Cad. Lot No. 5555 C-7
located at Tinaytayan, Pigsalojan, Gingoog City and bounded on the North by
Tinaytayan Creek & Lot Nos. 5557 & 5558; South by Lot Nos. 3486, 3487, 3488, 3491
& 3496; East by Cr. & Lot No. 3496; and West by Lot No. 5554, containing an area of
SEVENTY SEVEN THOUSAND SEVEN HUNDRED SEVENTY SIX (77,776) sq.
ms. more or less.
P1,350.00
(11) A Commercial Land. Covered by Tax Decl. No. 06454, Cad. Lot No. 61-C-1
located at Guno-Condeza Sts., Gingoog City and bounded on the North by Lot 64; South
by Road-Lot 613 Condeza St; East by Lot Nos. 63, and 62; West by Road-Lot 614-Guno
St., containing an area of ONE THOUSAND FORTY TWO (1,042) sq. ms. more or
less.
P9,320.00
(12) A Commercial Land. Covered by Tax Decl. No. 06484, Lot No. 5, Block 2, located
at Cabuyoan, Gingoog City and bounded on the North by Lot No. 4, block 2; South by
Lot No. 8, block 2; East by Lot No. 6, block 2, West by Subdivision Road, containing an
area of FOUR HUNDRED (400) sq. ms. more or less.
P12,240.00
(13) A Commercial Land. Covered by Tax Decl. No. 15798, Block No. 7-A-16-0 located
at Cabuyoan, Gingoog City and bounded on the North by Lot No. 7-A-16-0; South by
Lot No. 7-16-0; East by Lot No. 7-A-18-Road; West by Lot No. 8, PSU-120704-Julito
Arengo vs. Restituto Baol, containing an area of TWO HUNDRED SIXTEEN (216) sq.
ms. more or less.
P1,050.00
(14) Agricultural Land. Covered by Tax, Decl. No. 06789, Cad. Lot No. 5157-C-7,
located at Kiogat, Agayayan, Gingoog City and bounded on the North by Lot No. 5158,
5159, 5156; South by SE-Steep Bank; East by NW, by Lot No. 5158, Villafranca,
containing an area of NINETY SIX THOUSAND TWO HUNDRED (96,200) sq. ms.
more or less.
P3,370.00
III. PERSONAL ESTATE (CONJUGAL)
NATURE AND DESCRIPTION LOCATION APPRAISAL
1. Fifty (50) shares of stock
Rural Bank of Gingoog, Inc.
at P100.00 per share P5,000.00
2. Four (4) shares of Preferred Stock
with San Miguel Corporation 400.00
4. That, the parties hereto have agreed to divide the above-enumerated properties in the following
manner, to wit:
(a) To Patricio Alburo, Maria Ramoso Sanchez, Roland Pedro T. Sanchez, Florida
Mierly Sanchez, Alfredo T. Sanchez and Myrna T. Sanchez, in equal pro-indiviso shares,
considering not only their respective areas but also the improvements existing thereon,
to wit:
Agricultural Land. Covered by Tax Decl. No. 06453, Cad. Lot No. 3270 Case 7,
located at Sunog, Lunao, Gingoog City and bounded on the North by Samay
Creek & Lot 3267; South by Lot Nos. 3271 and 3272; East by Lot Nos. 3269 &
3273; and West by Samay Creek, containing an area of FOUR HUNDRED
EIGHTY THREE THOUSAND SIX HUNDRED (483,600) sq. ms. and assessed
in the sum of P61,680.00.
(b) To Rosalia Sanchez Lugod all the rest of the properties, both real and personal,
enumerated above with the exception of the following:
(1) Two Preferred Shares of Stock in the San Miguel Corporation, indicated in
San Miguel Corporation Stock Certificate No. 30217, which two shares she is
ceding in favor of Patricio Alburo;
(2) The house and lot designated as Lot No. 5, Block 2 together with the
improvements thereon and identified as parcel No. II-12, lot covered by Tax
Decl. No. 15798 identified as Parcel No. II-13 in the above enumerated, and
Cad. Lot No. 5157-C-7 together with the improvements thereon, which is
identified as parcel No. II-14 of the above-enumeration of properties, which said
Rosalia S. Lugod is likewise ceding and renouncing in favor of Rolando Pedro,
Florida Mierly, Alfredo and Myrna, all surnamed Sanchez, in equal pro-indiviso
shares;
5. That Rolando Pedro, Florida Mierly, Alfredo and Myrna, all surnamed Sanchez hereby acknowledge
to have received jointly and severally in form of advances after October 21, 1968 the aggregate sum of
EIGHT THOUSAND FIVE HUNDRED THIRTY-THREE PESOS (P8,533.94) and NINETY-FOUR
CENTAVOS;
6. That the parties hereto likewise acknowledge and recognize in the indebtedness of the deceased Juan
G. Sanchez and his deceased wife Maria Villafranca Sanchez to the Lugod Enterprises, Inc., in the sum
of P43,064.99;
7. That the parties hereto shall be responsible for the payment of the estate and inheritance taxes
proportionate to the value of their respective shares as may be determined by the Bureau of Internal
Revenue and shall likewise be responsible for the expenses of survey and segregation of their
respective shares;
8. That Patricio Alburo, Maria Ramoso Sanchez, Roland Pedro Sanchez, Florida Mierly Sanchez,
Alfredo Sanchez and Myrna Sanchez hereby waive, relinquish and renounce, jointly and individually,
in a manner that is absolute and irrevocable, all their rights and interests, share and participation which
they have or might have in all the properties, both real and personal, known or unknown and/or which
may not be listed herein, or in excess of the areas listed or mentioned herein, and/or which might have
been, at one time or another, owned by, registered or placed in the name of either of the spouses Juan C.
Sanchez or Maria Villafranca de Sanchez or both, and which either one or both might have sold, ceded,
transferred, or donated to any person or persons or entity and which parties hereto do hereby confirm
and ratify together with all the improvements thereon, as well as all the produce and proceeds thereof,
and particularly of the properties, real and personal listed herein, as well as demandable obligations due
to the deceased spouses Juan C. Sanchez, before and after the death of the aforementioned spouses Juan
C. Sanchez and Maria Villafranca de Sanchez, in favor of oppositor Rosalia S. Lugod;
9. That the expenses of this litigation including attorneys fees shall be borne respectively by the parties
hereto;
10. That Laureta Tampus for herself and guardian ad-litem of her minor children, namely: Florida
Mierly, Alfredo, and Myrna, all surnamed Sanchez, hereby declare that she has no right, interest, share
and participation whatsoever in the estate left by Juan C. Sanchez and/or Maria Villafranca de Sanchez,
or both, and that she likewise waives, renounces, and relinquishes whatever rigid, share, participation
or interest therein which she has or might have in favor of Rosalia S. Lugod;
11. That, the parties hereto mutually waive and renounce in favor of each other any whatever claims or
actions, arising from, connected with, and as a result of Special Proceedings Nos. 44-M and 1022 of the
Court of First Instance of Misamis Oriental, Rosalia S. Lugod, warranting that the parcel of land ceded
to the other parties herein contains 48 hectares and 36 acres.
12. That, Rosalia S. Lugod shall assume as she hereby assumes the payment to Lugod Enterprises, Inc.,
of the sum of P51,598.93 representing the indebtedness of the estate of Juan C. Sanchez and Maria
Villafranca de Sanchez and the advances made to Rolando Pedro, Mierly, Alfredo, and Myrna all
surnamed Sanchez, mentioned in paragraphs 5 and 6 hereof and, to give effect to this Agreement, the
parties hereto agree to have letters of administration issued in favor of Rosalia S. Lugod without any
bond.
That Rosalia S. Lugod likewise agrees to deliver possession and enjoyment of the parcel of land herein
ceded to petitioners and intervenors immediately after the signing of this agreement and that the latter
also mutually agree among themselves to have the said lot subdivided and partitioned immediately in
accordance with the proportion of one sixth (1/6) part for every petitioner and intervenor and that in the
meantime that the partition and subdivision is not yet effected, the administrations of said parcel of
land shall be vested jointly with Laureta Tampos, guardian ad litem of petitioners and Maria Ramoso,
one of the intervenors who shall see to it that each petitioner and intervenor is given one sixth (1/6) of
the net proceeds of all agricultural harvest made thereon.
WHEREFORE, it is most respectfully prayed that the foregoing compromise agreement be approved.
Medina, Misamis Oriental, October 30, 1969.
(Sgd.) (Sgd.)
PATRICIO ALBURO ROSALIA S. LUGOD
Intervenor-Oppositor Oppositor
(Sgd.)
MARIA RAMOSO SANCHEZ ASSISTED BY:
Intervenor-Oppositor
(Sgd.)
ASSISTED BY: PABLO S. REYES
R-101-Navarro Bldg.
(Sgd.) Don A. Velez St.
REYNALDO L. FERNANDEZ Cagayan de Oro City
Gingoog City
(Sgd.) (Sgd.)
ROLANDO PEDRO T. SANCHEZ ALFREDO T. SANCHEZ
Petitioner Petitioner
(Sgd.) (Sgd.)
FLORIDA MIERLY T. SANCHEZ MYRNA T. SANCHEZ
Petitioner Petitioner
(Sgd.)
LAURETA TAMPUS
For herself and as Guardian
Ad-Litem of the minors
Florida Mierly, Alfredo, and
Myrna, all surnamed Sanchez
ASSISTED BY:
TEOGENES VELEZ, JR.
Counsel for Petitioners
Cagayan de Oro City
The Clerk of Court

Court of First Instance
Branch III, Medina, Mis. Or.
Greetings:
Please set the foregoing compromise agreement for the approval of the Honorable Court today,
Oct. 30, 1969.
(Sgd.) (Sgd.) (Sgd.)
PABLO S. REYES TEOGENES VELEZ, JR. REYNALDO L. FERNANDEZ
The Memorandum of Agreement dated April 13, 1970, which the parties entered into with the
assistance of their counsel, amended the above compromise. (It will be reproduced later in our
discussion of the second issue raised by the petitioners.)
The Court of Appeals, in a Resolution[10] dated September 4, 1992, initially dismissed private
respondents petition. Acting, however, on a motion for reconsideration and a supplemental motion for
reconsideration dated September 14, 1992 and September 25, 1992, respectively,[11] Respondent Court
thereafter reinstated private respondents petition in a resolution[12] dated October 14, 1992.
In due course, the Court of Appeals, as earlier stated, rendered its assailed Decision granting the
petition, setting aside the trial courts decision and declaring the modified compromise agreement valid
and binding.
Hence, this appeal to this Court under Rule 45 of the Rules of Court.
The Issues
In this appeal, petitioners invite the Courts attention to the following issues:
I
The respondent court grossly erred in granting the petition for certiorari under Rule 65 considering that
the special civil action of certiorari may not be availed of as a substitute for an appeal and that, in any
event, the grounds invoked in the petition are merely alleged errors of judgment which can no longer be
done in view of the fact that the decision of the lower court had long become final and executory.
II
Prescinding from the foregoing, the respondent court erred in annulling the decision of the lower court
for the reason that a compromise agreement or partition, as the court construed the same to be,
executed by the parties on October 30, 1969 was void and unenforceable the same not having been
approved by the intestate court and that the same having been seasonably repudiated by petitioners on
the ground of fraud.
III
The respondent court grossly erred in ignoring and disregarding findings of facts of the lower court that
the alleged conveyances of real properties made by the spouses Juan C. Sanchez and Maria Villafranca
just before their death in favor of their daughter and grandchildren, private respondents herein, are
tainted with fraud or made in contemplation of death, hence, collationable.
IV
In any event, the respondent court grossly erred in treating the lower courts declaration of fictitiousness
of the deeds of sale as a final adjudication of annulment.
V
The respondent court grossly erred in declaring the termination of the intestate proceedings even as the
lower court had not made a final and enforceable distribution of the estate of the deceased Juan C.
Sanchez.
VI
Prescinding from the foregoing, the respondent court grossly erred in not at least directing respondent
Rosalia S. Lugod to deliver the deficiency of eight (8) hectares due petitioners under the compromise
agreement and memorandum of agreement, and in not further directing her to include in the inventory
properties conveyed under the deeds of sale found by the lower court to be part of the estate of Juan C.
Sanchez.[13]
The salient aspects of some issues are closely intertwined; hence, they are hereby consolidated into
three main issues specifically dealing with the following subjects: (1) the propriety of certiorari as a
remedy before the Court of Appeals, (2) the validity of the compromise agreement, and (3) the presence
of fraud in the execution of the compromise and/or collation of the properties sold.
The Courts Ruling
The petition is not meritorious.
First Issue: Propriety of Certiorari
Before the Court of Appeals
Since private respondents had neglected or failed to file an ordinary appeal within the reglementary
period, petitioners allege that the Court of Appeals erred in allowing private respondents recourse to
Rule 65 of the Rules of Court. They contend that private respondents invocation of certiorari was
procedurally defective.[14] They further argue that private respondents, in their petition before the Court
of Appeals, alleged errors of the trial court which, being merely errors of judgment and not errors of
jurisdiction, were not correctable by certiorari.[15] This Court disagrees.
Doctrinally entrenched is the general rule that certiorari is not a substitute for a lost appeal. However,
Justice Florenz D. Regalado lists several exceptions to this rule, viz.: (1) where the appeal does not
constitute a speedy and adequate remedy (Salvadades vs. Pajarillo, et al., 78 Phil. 77), as where 33
appeals were involved from orders issued in a single proceeding which will inevitably result in a
proliferation of more appeals (PCIB vs. Escolin, et al., L-27860 and 27896, Mar. 29, 1974); (2) where
the orders were also issued either in excess of or without jurisdiction (Aguilar vs. Tan, L-23600, Jun
30, 1970, Cf. Bautista, et al. vs. Sarmiento, et al., L-45137, Sept. 231985); (3) for certain special
consideration, as public welfare or public policy (See Jose vs. Zulueta, et al. -16598, May 31, 1961 and
the cases cited therein); (4) where in criminal actions, the court rejects rebuttal evidence for the
prosecution as, in case of acquittal, there could be no remedy (People vs. Abalos, L029039, Nov. 28,
1968); (5) where the order is a patent nullity (Marcelo vs. De Guzman, et al., L-29077, June 29, 1982);
and (6) where the decision in the certiorari case will avoid future litigations (St. Peter Memorial Park,
Inc. vs. Campos, et al., L-38280, Mar. 21, 1975).[16] Even in a case where the remedy of appeal was
lost, the Court has issued the writ of certiorari where the lower court patently acted in excess of or
outside its jurisdiction,[17] as in the present case.
A petition for certiorari under Rule 65 of the Rules of Court is appropriate and allowable when the
following requisites concur: (1) the writ is directed against a tribunal, board or officer exercising
judicial or quasi-judicial functions; (2) such tribunal, board or officer has acted without or in excess of
jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction; and (3) there
is no appeal or any plain, speedy and adequate remedy in the ordinary course of law.[18] After a
thorough review of the case at bar, we are convinced that all these requirements were met.
As a probate court, the trial court was exercising judicial functions when it issued its assailed
resolution. The said court had jurisdiction to act in the intestate proceedings involved in this case with
the caveat that, due to its limited jurisdiction, it could resolve questions of title only provisionally.[19] It
is hornbook doctrine that in a special proceeding for the probate of a will, the question of ownership is
an extraneous matter which the probate court cannot resolve with finality. This pronouncement no
doubt applies with equal force to an intestate proceeding as in the case at bar.[20] In the instant case, the
trial court rendered a decision declaring as simulated and fictitious all the deeds of absolute sale which,
on July 26, 1963 and June 26, 1967, Juan C. Sanchez and Maria Villafranca executed in favor of their
daughter, Rosalia Sanchez Lugod; and grandchildren, namely, Arturo S. Lugod, Evelyn S. Lugod and
Roberto S. Lugod. The trial court ruled further that the properties covered by the said sales must be
subject to collation. Citing Article 1409 (2) of the Civil Code, the lower court nullified said deeds of
sale and determined with finality the ownership of the properties subject thereof. In doing so, it clearly
overstepped its jurisdiction as a probate court. Jurisprudence teaches:
[A] probate court or one in charge of proceedings whether testate or intestate cannot adjudicate or
determine title to properties claimed to be a part of the estate and which are claimed to belong to
outside parties. All that the said court could do as regards said properties is to determine whether they
should or should not be included in the inventory or list of properties to be administered by the
administrator. If there is not dispute, well and good, but if there is, then the parties, the administrator,
and the opposing parties have to resort to an ordinary action for a final determination of the conflicting
claims of title because the probate court cannot do so.[21]
Furthermore, the trial court committed grave abuse of discretion when it rendered its decision in
disregard of the parties compromise agreement.[22] Such disregard, on the ground that the compromise
agreement was not approved by the court,[23] is tantamount to an evasion of positive duty or to a virtual
refusal to perform the duty enjoined or to act in contemplation and within the bounds of law.[24]
The foregoing issues clearly involve not only the correctness of the trial courts decision but also the
latters jurisdiction. They encompass plain errors of jurisdiction and grave abuse of discretion, not
merely errors of judgment.[25] Since the trial court exceeded its jurisdiction, a petition for certiorari is
certainly a proper remedy. Indeed, it is well-settled that (a)n act done by a probate court in excess of its
jurisdiction may be corrected by certiorari.[26]
Consistent with the foregoing, the following disquisition by respondent appellate court is apt:
As a general proposition, appeal is the proper remedy of petitioner Rosalia here under Rule 109 of the
Revised Rules of Court. But the availability of the ordinary course of appeal does not constitute
sufficient ground to [prevent] a party from making use of the extraordinary remedy of certiorari where
appeal is not an adequate remedy or equally beneficial, speedy and sufficient (Echauz vs. Court of
Appeals, 199 SCRA 381). Here, considering that the respondent court has disregarded the compromise
agreement which has long been executed as early as October, 1969 and declared null and void the
deeds of sale with finality, which, as a probate court, it has no jurisdiction to do, We deem ordinary
appeal is inadequate. Considering further the [trial courts] granting of [herein petitioners] motion for
execution of the assailed decision,[27] [herein private respondent] Rosalias resort to the instant petition
[for review on certiorari] is all the more warranted under the circumstances.[28]
We thus hold that the questioned decision and resolutions of the trial court may be challenged through a
special civil action for certiorari under Rule 65 of the Rules of Court. At the very least, this case is a
clear exception to the general rule that certiorari is not a substitute for a lost appeal because the trial
courts decision and resolutions were issued without or in excess of jurisdiction, which may thus be
challenged or attacked at any time. A void judgment for want of jurisdiction is no judgment at all. It
cannot be the source of any right nor the creator of any obligation. All acts performed pursuant to it and
all claims emanating from it have no legal effect. Hence, it can never become final and any writ of
execution based on it is void; x x x it may be said to be a lawless thing which can be treated as an
outlaw and slain at sight, or ignored wherever and whenever it exhibits its head. [29]
Second Issue: Validity of Compromise Agreement
Petitioners contend that, because the compromise agreement was executed during the pendency of the
probate proceedings, judicial approval is necessary to shroud it with validity. They stress that the
probate court had jurisdiction over the properties covered by said agreement. They add that Petitioners
Florida Mierly, Alfredo and Myrna were all minors represented only by their mother/natural guardian,
Laureta Tampus.[30]
These contentions lack merit. Article 2028 of the Civil Code defines a compromise agreement as a
contract whereby the parties, by making reciprocal concessions, avoid a litigation or put an end to one
already commenced. Being a consensual contract, it is perfected upon the meeting of the minds of the
parties. Judicial approval is not required for its perfection.[31] Petitioners argument that the compromise
was not valid for lack of judicial approval is not novel; the same was raised in Mayuga vs. Court of
Appeals,[32] where the Court, through Justice Irene R. Cortes, ruled:
It is alleged that the lack of judicial approval is fatal to the compromise. A compromise is a consensual
contract. As such, it is perfected upon the meeting of the minds of the parties to the contract.
(Hernandez v. Barcelon, 23 Phil. 599 [1912]; see also De los Reyes v. de Ugarte, 75 Phil. 505 [1945].)
And from that moment not only does it become binding upon the parties (De los Reyes v. De Ugarte,
supra ), it also has upon them the effect and authority of res judicata (Civil Code, Art. 2037), even if
not judicially approved (Meneses v. De la Rosa, 77 Phil. 34 [1946]; Vda. De Guilas v. David, 132 Phil.
241, L-24280, 23 SCRA 762 [May 27, 1968]; Cochingyan v. Cloribel, L-27070-71 [April 22, 1977], 76
SCRA 361). (Italics found in the original.)
In the case before us, it is ineludible that the parties knowingly and freely entered into a valid
compromise agreement. Adequately assisted by their respective counsels, they each negotiated its terms
and provisions for four months; in fact, said agreement was executed only after the fourth draft. As
noted by the trial court itself, the first and second drafts were prepared successively in July, 1969; the
third draft on September 25, 1969; and the fourth draft, which was finally signed by the parties on
October 30, 1969,[33] followed. Since this compromise agreement was the result of a long drawn out
process, with all the parties ably striving to protect their respective interests and to come out with the
best they could, there can be no doubt that the parties entered into it freely and voluntarily.
Accordingly, they should be bound thereby.[34] To be valid, it is merely required under the law to be
based on real claims and actually agreed upon in good faith by the parties thereto.[35]
Indeed, compromise is a form of amicable settlement that is not only allowed but also encouraged in
civil cases.[36] Article 2029 of the Civil Code mandates that a court shall endeavor to persuade the
litigants in a civil case to agree upon some fair compromise.
In opposing the validity and enforcement of the compromise agreement, petitioners harp on the
minority of Florida Mierly, Alfredo and Myrna. Citing Article 2032 of the Civil Code, they contend that
the courts approval is necessary in compromises entered into by guardians and parents in behalf of their
wards or children.[37]
However, we observe that although denominated a compromise agreement, the document in this case is
essentially a deed of partition, pursuant to Article 1082 of the Civil Code which provides that [e]very
act which is intended to put an end to indivision among co-heirs and legatees or devisees is deemed to
be a partition, although it should purport to be a sale, an exchange, a compromise, or any other
transaction.
For a partition to be valid, Section 1, Rule 74 of the Rules of Court, requires the concurrence of the
following conditions: (1) the decedent left no will; (2) the decedent left no debts, or if there were debts
left, all had been paid; (3) the heirs and liquidators are all of age, or if they are minors, the latter are
represented by their judicial guardian or legal representatives; and (4) the partition was made by means
of a public instrument or affidavit duly filed with the Register of Deeds.[38] We find that all the
foregoing requisites are present in this case. We therefore affirm the validity of the parties compromise
agreement/partition in this case.
In any event, petitioners neither raised nor ventilated this issue in the trial court. This new question or
matter was manifestly beyond the pale of the issues or questions submitted and threshed out before the
lower court which are reproduced below, viz.:
I Are the properties which are the object of the sale by the deceased spouses to their grandchildren
collationable?
II Are the properties which are the object of the sale by the deceased spouses to their legitimate
daughter also collationable?
III The first and second issues being resolved, how much then is the rightful share of the four (4)
recognized illegitimate children?[39]
Furthermore, the 27-page Memorandum dated February 17, 1990 filed by petitioners before the
Regional Trial Court [40] readily reveals that they never questioned the validity of the compromise. In
their comment before the Court of Appeals,[41] petitioners based their objection to said compromise
agreement on the solitary reason that it was tainted with fraud and deception, zeroing specifically on
the alleged fraud committed by private respondent Rosalia S. Lugod.[42] The issue of minority was first
raised only in petitioners Motion for Reconsideration of the Court of Appeals Decision;[43] thus, it is as
if it was never duly raised in that court at all.[44] Hence, this Court cannot now, for the first time on
appeal, entertain this issue, for to do so would plainly violate the basic rule of fair play, justice and due
process.[45] We take this opportunity to reiterate and emphasize the well-settled rule that (a)n issue
raised for the first time on appeal and not raised timely in the proceedings in the lower court is barred
by estoppel. Questions raised on appeal must be within the issues framed by the parties and,
consequently, issues not raised in the trial court cannot be raised for the first time on appeal.[46]
The petitioners likewise assail as void the provision on waiver contained in No. 8 of the aforequoted
compromise, because it allegedly constitutes a relinquishment by petitioners of a right to properties
which were not known.[47] They argue that such waiver is contrary to law, public policy, morals or good
custom. The Court disagrees. The assailed waiver pertained to their hereditary right to properties
belonging to the decedents estate which were not included in the inventory of the estates properties. It
also covered their right to other properties originally belonging to the spouses Juan Sanchez and Maria
Villafranca de Sanchez which have been transferred to other persons. In addition, the parties agreed in
the compromise to confirm and ratify said transfers. The waiver is valid because, contrary to petitioners
protestation, the parties waived a known and existing interest -- their hereditary right which was
already vested in them by reason of the death of their father. Article 777 of the Civil Code provides that
(t)he rights to the succession are transmitted from the moment of death of the decedent. Hence, there is
no legal obstacle to an heirs waiver of his/her hereditary share even if the actual extent of such share is
not determined until the subsequent liquidation of the estate.[48] At any rate, such waiver is consistent
with the intent and letter of the law advocating compromise as a vehicle for the settlement of civil
disputes.[49]
Finally, petitioners contend that Private Respondent Rosalia T. Lugods alleged fraudulent acts,
specifically her concealment of some of the decedents properties, attended the actual execution of the
compromise agreement.[50] This argument is debunked by the absence of any substantial and
convincing evidence on record showing fraud on her part. As aptly observed by the appellate court:
[Herein petitioners] accuse [herein private respondent] Rosalia of fraud or deception by alleging, inter
alia, that the parcel of land given to them never conformed to the stated area, i.e., forty-eight (48)
hectares, as stated in the compromise agreement. We find this argument unconvincing and
unmeritorious. [Herein petitioners] averment of fraud on the part of [herein private respondent] Rosalia
becomes untenable when We consider the memorandum of agreement they later executed with [herein
private respondent] Rosalia wherein said compromise agreement was modified by correcting the actual
area given to [herein petitioners] from forty-eight (48) hectares to thirty-six (36) hectares only. If the
actual area allotted to them did not conform to the 48 hectare area stated in the compromise agreement,
then why did they agree to the memorandum of agreement whereby their share in the estate of their
father was even reduced to just 36 hectares? Where is fraud or deception there? Considering that
[herein petitioners] were ably represented by their lawyers in executing these documents and who
presumably had explained to them the import and consequences thereof, it is hard to believe their
charge that they were defrauded and deceived by [herein private respondent] Rosalia.
If the parcel of land given to [herein petitioners], when actually surveyed, happened to be different in
area to the stated area of 48 hectares in the compromise agreement, this circumstance is not enough
proof of fraud or deception on [herein private respondent] Rosalias part. Note that Tax Declaration No.
06453 plainly discloses that the land transferred to [herein petitioners] pursuant to the compromise
agreement contained an area of 48 hectares (Annex A, Supplemental Reply). And when [herein
petitioners] discovered that the land allotted to them actually contained only 24 hectares, a conference
between the parties took place which led to the execution and signing of the memorandum of
agreement wherein [herein petitioners] distributive share was even reduced to 36 hectares. In the
absence of convincing and clear evidence to the contrary, the allegation of fraud and deception cannot
be successfully imputed to [herein private respondent] Rosalia who must be presumed to have acted in
good faith.[51]
The memorandum of agreement freely and validly entered into by the parties on April 13, 1970 and
referred to above reads:
MEMORANDUM OF AGREEMENT
The parties assisted by their respective counsel have agreed as they hereby agree:
1. To amend the compromise agreement executed by them on October 30, 1969 so as to include the
following:
a. Correction of the actual area being given to the petitioners and intervenors, all illegitimate children
of the late Juan C. Sanchez, forty-eight (48) hectares, thirty-six (36) acres as embodied in the
aforementioned compromise agreement to thirty-six (36) hectares only, thus enabling each of them to
get six (6) hectares each.
b. That the said 36-hectare area shall be taken from that parcel of land which is now covered by O.C.T.
No. 146 (Patent No. 30012) and the adjoining areas thereof designated as Lot A and Lot C as reflected
on the sketch plan attached to the record of this case prepared by Geodetic Engineer Olegario E. Zalles
pursuant to the Courts commission of March 10, 1970 provided, however, that if the said 36-hectare
area could not be found after adding thereto the areas of said lots A and C, then the additional area shall
be taken from what is designated as Lot B, likewise also reflected in the said sketch plan attached to the
records;
c. That the partition among the six illegitimate children of the late Juan C. Sanchez (petitioners and
intervenors) shall be effective among themselves in such a manner to be agreed upon by them, each
undertaking to assume redemption of whatever plants found in their respective shares which need
redemption from the tenants thereof as well as the continuity of the tenancy agreements now existing
and covering the said shares or areas.
d. The subdivision survey shall be at the expense of the said petitioners and intervenors prorata.
e. That the administratrix agrees to deliver temporary administration of the area designated as Lot 5 of
the Valles Sketch Plan pending final survey of the said 36-hectare area.
Cagayan de Oro City, April 13, 1970.
(Sgd.)
LAURETA TAMPOS
For herself and as Guardian
ad-litem of Rolando, Mierly,
Alfredo and Myrna, all
surnamed Sanchez
Assisted by:
(Sgd.)
TEOGENES VELEZ, Jr.
Counsel for Petitioners
(Sgd.)
ROSALIA S. LUGOD
Administratrix
Assisted by:
(Sgd.)
PABLO S. REYES
Counsel for Administratrix
(Sgd.)
MARIA RABOSO SANCHEZ
Intervenor[52]
Not only did the parties knowingly enter into a valid compromise agreement; they even amended it
when they realized some errors in the original. Such correction emphasizes the voluntariness of said
deed.
It is also significant that all the parties, including the then minors, had already consummated and
availed themselves of the benefits of their compromise.[53] This Court has consistently ruled that a party
to a compromise cannot ask for a rescission after it has enjoyed its benefits.[54] By their acts, the parties
are ineludibly estopped from questioning the validity of their compromise agreement. Bolstering this
conclusion is the fact that petitioners questioned the compromise only nine years after its execution,
when they filed with the trial court their Motion to Defer Approval of Compromise Agreement, dated
October 26, 1979.[55] In hindsight, it is not at all farfetched that petitioners filed said motion for the sole
reason that they may have felt shortchanged in their compromise agreement or partition with private
respondents, which in their view was unwise and unfair. While we may sympathize with this rueful
sentiment of petitioners, we can only stress that this alone is not sufficient to nullify or disregard the
legal effects of said compromise which, by its very nature as a perfected contract, is binding on the
parties. Moreover, courts have no jurisdiction to look into the wisdom of a compromise or to render a
decision different therefrom.[56] It is a well-entrenched doctrine that the law does not relieve a party
from the effects of an unwise, foolish, or disastrous contract, entered into with all the required
formalities and with full awareness of what he was doing[57] and a compromise entered into and carried
out in good faith will not be discarded even if there was a mistake of law or fact, (McCarthy vs. Barber
Steamship Lines, 45 Phil. 488) because courts have no power to relieve parties from obligations
voluntarily assumed, simply because their contracts turned out to be disastrous deals or unwise
investments.[58] Volenti non fit injuria.
Corollarily, the petitioners contend that the Court of Appeals gravely abused its discretion in deeming
Special Proceedings Nos. 44-M and 1022 CLOSED and TERMINATED, arguing that there was as yet
no order of distribution of the estate pursuant to Rule 90 of the Rules of Court. They add that they had
not received their full share thereto.[59] We disagree. Under Section 1, Rule 90 of the Rules of Court, an
order for the distribution of the estate may be made when the debts, funeral charges, and expenses of
administration, the allowance to the widow, and inheritance tax, if any, had been paid. This order for
the distribution of the estates residue must contain the names and shares of the persons entitled thereto.
A perusal of the whole record, particularly the trial courts conclusion,[60] reveals that all the foregoing
requirements already concurred in this case. The payment of the indebtedness of the estates of Juan C.
Sanchez and Maria Villafranca in the amount of P51,598.93 was shouldered by Private Respondent
Rosalia, who also absorbed or charged against her share the advances of Rolando T. Lugod in the sum
of P8,533.94, in compliance with Article 1061 of the Civil Code on collation.[61] Furthermore, the
compromise of the parties, which is the law between them, already contains the names and shares of
the heirs to the residual estate, which shares had also been delivered. On this point, we agree with the
following discussion of the Court of Appeals:
But what the (trial court) obviously overlooked in its appreciation of the facts of this case are the
uncontroverted facts that (herein petitioners) have been in possession and ownership of their respective
distributive shares as early as October 30, 1969 and they have received other properties in addition to
their distributive shares in consideration of the compromise agreement which they now assail. Proofs
thereof are Tax Declarations No. 20984, 20985, 20986, 20987, 20988, 20989 and 20990 (Annexes B to
H, Supplemental Reply) in the respective names of (herein petitioners), all for the year 1972. (Herein
petitioners) also retained a house and lot, a residential lot and a parcel of agricultural land (Annexes I, J
and K, Ibid.) all of which were not considered in the compromise agreement between the parties.
Moreover, in the compromise agreement per se, it is undoubtedly stated therein that cash advances in
the aggregate sum of P8,533.94 were received by (herein petitioners) after October 21, 1968
(Compromise Agreement, par. 5)[62]
All the foregoing show clearly that the probate court had essentially finished said intestate proceedings
which, consequently, should be deemed closed and terminated. In view of the above discussion, the
Court sees no reversible error on the part of the Court of Appeals.
Third Issue: Fraud and Collation
Petitioners fault Respondent Court for not ordering Private Respondent Rosalia T. Lugod to deliver to
them the deficiency as allegedly provided under the compromise agreement. They further contend that
said court erred in not directing the provisional inclusion of the alleged deficiency in the inventory for
purposes of collating the properties subject of the questioned deeds of sale.[63] We see no such error. In
the trial court, there was only one hearing conducted, and it was held only for the reception of the
evidence of Rosalia S. Lugod to install her as administratix of the estate of Maria Villafranca. There
was no other evidence, whether testimonial or otherwise, received, formally offered to, and
subsequently admitted by the probate court below; nor was there a trial on the merits of the parties
conflicting claims.[64] In fact, the petitioners moved for the deferment of the compromise agreement on
the basis of alleged fraudulent concealment of properties -- NOT because of any deficiency in the land
conveyed to them under the agreements.[65] Hence, there is no hard evidence on record to back up
petitioners claims.
In any case, the trial court noted Private Respondent Rosalias willingness to reimburse any deficiency
actually proven to exist. It subsequently ordered the geodetic engineer who prepared the certification
and the sketch of the lot in question, and who could have provided evidence for the petitioners, to bring
records of his relocation survey.[66] However, Geodetic Engineer Idulsa did not comply with the courts
subpoena duces tecum and ad testificandum. Neither did he furnish the required relocation survey.[67]
No wonder, even after a thorough scrutiny of the records, this Court cannot find any evidence to
support petitioners allegations of fraud against Private Respondent Rosalia.
Similarly, petitioners allegations of fraud in the execution of the questioned deeds of sale are bereft of
substance, in view of the palpable absence of evidence to support them. The legal presumption of
validity of the questioned deeds of absolute sale, being duly notarized public documents, has not been
overcome.[68] On the other hand, fraud is not presumed. It must be proved by clear and convincing
evidence, and not by mere conjectures or speculations. We stress that these deeds of sale did not
involve gratuitous transfers of future inheritance; these were contracts of sale perfected by the
decedents during their lifetime.[69] Hence, the properties conveyed thereby are not collationable
because, essentially, collation mandated under Article 1061 of the Civil Code contemplates properties
conveyed inter vivos by the decedent to an heir by way of donation or other gratuitous title.
In any event, these alleged errors and deficiencies regarding the delivery of shares provided in the
compromise, concealment of properties and fraud in the deeds of sale are factual in nature which, as a
rule, are not reviewable by this Court in petitions under Rule 45.[70] Petitioners have failed to convince
us that this case constitutes an exception to such rule. All in all, we find that the Court of Appeals has
sufficiently addressed the issues raised by them. Indeed, they have not persuaded us that said Court
committed any reversible error to warrant a grant of their petition.
WHEREFORE, the petition is hereby DENIED and the assailed Decision of the Court of Appeals is
AFFIRMED.
SO ORDERED.
Narvasa, C.J. (Chairman), Romero, Melo and Francisco, JJ., concur.
FIRST DIVISION
[G.R. No. 132518. March 28, 2000]
GAVINA MAGLUCOT-AW, CATALINA ORCULLO, RICHARD ESTANO, NIDA
MAGLUCOT, MELANIA MAGLUCOT-CATUBIG, EMILIANO CATUBIG,
LADISLAO SALMA, petitioners, vs. LEOPOLDO MAGLUCOT, SEVERO
MAGLUCOT, WILFREDA MAGLUCOT-ALEJO and CONSTANCIO ALEJO,
respondents.
DECISION
KAPUNAN, J.:
This petition for review on certiorari assails the Decision, dated 11 November 1997, of the
Court of Appeals in CA-G.R. CV No. 48816 which reversed and set aside the Decision, dated
13 December 1994, of the Regional Trial Court, Branch 30 of Dumaguete City, Negros
Oriental in an action for recovery of possession and damages.
The core issue in this case is whether a partition of Lot No. 1639 had been effected in 1952.
Petitioners contend that there was already a partition of said lot; hence, they are entitled to
exclusive possession and ownership of Lot No. 1639-D, which originally formed part of Lot
No. 1639 until its partition. Private respondents, upon the other hand, claim that there was no
partition; hence, they are co-owners of Lot No. 1639-D. Notably, this case presents a unique
situation where there is an order for partition but there is no showing that the
sketch/subdivision plan was submitted to the then Court of First Instance for its approval or
that a decree or order was registered in the Register of Deeds.
The antecedent facts of the case are as follows: Korte
Petitioners filed with the RTC a complaint for recovery of possession and damages alleging,
inter alia, that they are the owners of Lot No. 1639-D. Said lot was originally part of Lot No.
1639 which was covered by Original Certificate Title No. 6775 issued in the names of
Hermogenes Olis, Bartolome Maglucot, Pascual Olis, Roberto Maglucot, Anselmo Lara and
Tomas Maglucot on 16 August 1927.[1] On 19 April 1952, Tomas Maglucot, one of the
registered owners and respondents predecessor-in-interest, filed a petition to subdivide Lot
No. 1639.[2] Consequently, on 13 May 1952, then CFI of Negros Oriental issued an order [3]
directing the parties to subdivide said lot into six portions as follows: Rtcspped
a) Hermogenes Olis - lot 1639-A
b) Pascual Olis - lot 1639-B
c) Bartolome Maglucot - lot 1639-C
d) Roberto (Alberto) - lot 1639-D
Maglucot
e) Anselmo Lara - lot 1639-E
f) Tomas Maglucot - lot 1639-F.[4]
Sometime in 1963, Guillermo Maglucot rented a portion of Lot No. 1639-D (subject lot).
Subsequently, Leopoldo and Severo, both surnamed Maglucot, rented portions of subject lot
in 1964 and 1969, respectively, and each paying rentals therefor. Said respondents built
houses on their corresponding leased lots. They paid the rental amount of P100.00 per
annum to Mrs. Ruperta Salma, who represented the heirs of Roberto Maglucot, petitioners
predecessor-in-interest. In December 1992, however, said respondents stopped paying
rentals claiming ownership over the subject lot. Petitioners thus filed the complaint a quo.
Sdaadsc
After trial, the lower court rendered judgment in favor of petitioners. The RTC found the
existence of tax declarations in the names of Hermogenes Olis and Pascual Olis (purported
owners of Lot Nos. 1639-A and 1639-B, respectively) [5] as indubitable proof that there was a
subdivision of Lot No. 1639. It likewise found that Tomas Maglucot, respondents predecessor-
in-interest, took active part in the partition as it was he, in fact, who commenced the action for
partition.[6] The court a quo cited Article 1431 of the Civil Code which states that "[t]hrough
estoppel an admission or representation is rendered conclusive upon the person making it,
and cannot be denied or disproved as against the person relying thereon." Applying said
provision of law, it held that while there was no court order showing that Lot No. 1639 was
partitioned, its absence could not be used by Tomas Maglucot, or respondents as his
successors-in-interest, to deny the existence of an approved partition against the other co-
owners who claim that there was one.[7] Said court, likewise, ruled that the tax declarations [8]
over the houses of respondents, expressly stating that the same are constructed on the lots of
Roberto Maglucot, constitute a conclusive admission by them of the ownership of the subject
lot by the latter.[9]
The dispositive portion of the lower courts decision reads as follows: Missdaa
WHEREFORE, on the basis of the foregoing discussion, judgment is hereby
rendered in favor of the plaintiffs against the defendants ordering the latter:
1. To demolish their houses inside lot 1639-D, vacate the premises thereof and
deliver the possession of the same to Plaintiffs; Slxmis
2. To jointly and solidarily pay plaintiffs the sum of P15,000.00 for attorneys fees;
3. To each pay plaintiffs the sum of P100.00 every year from 1993 for actual
damages representing the amount of unpaid rentals up to the time they actually
vacate the premises in question; Sclaw
4. To pay the costs.[10]
On appeal, the CA reversed the decision of the RTC. The appellate court ruled that the sketch
plan and tax declarations relied upon by petitioners are not conclusive evidence of partition. [11]
The CA likewise found that the prescribed procedure under Rule 69 of the Rules of Court was
not followed. It thus declared that there was no partition of Lot No. 1639. Slxsc
Petitioners filed this petition for review on certiorari alleging that the CA committed the
following reversible errors:
I
IN VIOLATING THE LAW ON ACQUISITIVE PRESCRIPTION PLAINTIFFS
HAVING POSSESSED LOT 1639-D SINCE 1946;
II
IN VIOLATING THE LAW ON ESTOPPEL; THE FACT OF PAYMENT OF
RENTALS AND OFFER TO BUY BY THE DEFENDANTS IS ADMISSION THAT
THE AREA IN LOT 1639-D, HAD LONG BEEN ADJUDICATED TO
PLAINTIFFS;
III
IN DECLARING THAT THERE WAS NO PRIOR PARTITION, CONTRARY TO
THE FINDINGS OF THE TRIAL COURT, AND AGAINST THE EVIDENCE ON
RECORD, OF WHICH IF PROPERLY CONSIDERED WOULD CHANGE THE
OUTCOME OF THE CASE;
IV
IN DECLARING THAT THERE IS NO LAW OR JURISPRUDENCE
APPLICABLE UNDER THE PREMISES; THIS WOULD ONLY SHOW THAT
THE RECORD OF THE CASE WAS NOT PROPERLY SCRUTINIZED, AND
THE LAW WAS NOT PROPERLY STUDIED; ESPECIALLY IN THE CASE AT
BENCH THAT THE ORAL AND MUTUAL PARTITION HAPPENED DURING
THE REGIME OF THE OLD RULES OF PROCEDURE;[12]
Petitioners maintain that Lot No. 1639 was mutually partitioned and physically subdivided
among the co-owners and that majority of them participated in the actual execution of the
subdivision. Further, the co-owners accepted their designated shares in 1946 as averred by
Tomas Maglucot in his petition for partition.[13] Petitioners opine that in 1952, Tomas Maglucot
himself initiated a court proceeding for a formal subdivision of Lot No. 1639. In said petition,
he averred that only Hermogenes Olis and the heirs of Pascual Olis were not agreeable to the
partition.[14] Petitioners further contend that respondents admitted in their tax declarations
covering their respective houses that they are "constructed on the land of Roberto
Maglucot."[15] Simply put, petitioners vigorously assert that respondents are estopped from
claiming to be co-owners of the subject lot in view of the mutual agreement in 1946, judicial
confirmation in 1952, and respondents acquiescence because they themselves exclusively
exercised ownership over Lot No. 1639-A beginning 1952 up to the present. [16]
For their part, respondents posit three points in support of their position. First, they emphasize
that petitioners failed to show that the interested parties were apprised or notified of the
tentative subdivision contained in the sketch and that the CFI subsequently confirmed the
same.[17] Second, they point to the fact that petitioners were unable to show any court
approval of any partition.[18] Third, they maintain that Lot No. 1639 remain undivided since to
date, OCT No. 6275 is still an existing and perfectly valid title, containing no annotation of any
encumbrance or partition whatsoever. [19]
After a careful consideration of the pleadings filed by the parties and the evidence on record,
we find that the petition is meritorious. As stated earlier, the core issue in this case is whether
there was a valid partition in 1952. Scslx
Preliminarily, this Court recognizes that "the jurisdiction of this Court in cases brought before it
from the Court of Appeals via Rule 45 of the Rules of Court is limited to reviewing errors of
law. Findings of fact of the latter are conclusive, except in the following instances: (1) when
the findings are grounded entirely on speculation, surmises, or conjectures; (2) when the
inference made is manifestly mistaken, absurd, or impossible; (3) when there is grave abuse
of discretion; (4) when the judgment is based on a misapprehension of facts; (5) when the
findings of fact are conflicting; (6) when in making its findings the Court of Appeals went
beyond the issues of the case, or its findings are contrary to the admissions of both the
appellant and the appellee; (7) when the findings are contrary to those of the trial court; (8)
when the findings are conclusions without citation of specific evidence on which they are
based; (9) when the facts set forth in the petition as well as in the petitioners main and reply
briefs are not disputed by the respondent; and (10) when the findings of fact are premised on
the supposed absence of evidence and contradicted by the evidence on record." [20] This case
falls under exceptions (7), (8) and (10) in that the findings of facts of the CA are in conflict with
that of the RTC, are mere conclusions without citation of specific evidence on which they are
based and are premised on absence of evidence but are contradicted by the evidence on
record. For these reasons, we shall consider the evidence on record to determine whether
indeed there was partition. Slx
In this jurisdiction, an action for partition is comprised of two phases: first, an order for
partition which determines whether a co-ownership in fact exists, and whether partition is
proper; and, second, a decision confirming the sketch or subdivision submitted by the parties
or the commissioners appointed by the court, as the case may be. [21] The first phase of a
partition and/or accounting suit is taken up with the determination of whether or not a co-
ownership in fact exists, (i.e., not otherwise legally proscribed) and may be made by voluntary
agreement of all the parties interested in the property. This phase may end with a declaration
that plaintiff is not entitled to have a partition either because a co-ownership does not exist, or
partition is legally prohibited. It may end, upon the other hand, with an adjudgment that a co-
ownership does in truth exist, partition is proper in the premises and an accounting of rents
and profits received by the defendant from the real estate in question is in order. In the latter
case, the parties may, if they are able to agree, make partition among themselves by proper
instruments of conveyance, and the court shall confirm the partition so agreed upon. In either
case i.e., either the action is dismissed or partition and/or accounting is decreed the order is a
final one, and may be appealed by any party aggrieved thereby. The second phase
commences when it appears that "the parties are unable to agree upon the partition" directed
by the court. In that event, partition shall be done for the parties by the court with the
assistance of not more than three (3) commissioners. This second stage may well also deal
with the rendition of the accounting itself and its approval by the court after the parties have
been accorded opportunity to be heard thereon, and an award for the recovery by the party or
parties thereto entitled of their just share in the rents and profits of the real estate in question.
Such an order is, to be sure, final and appealable. [22]
The present rule on the question of finality and appealability of a decision or order decreeing
partition is that it is final and appealable.[23] The order of partition is a final determination of the
co-ownership over Lot No. 1639 by the parties and the propriety of the partition thereof.
Hence, if the present rule were applied, the order not having been appealed or questioned by
any of the parties to the case, it has become final and executory and cannot now be
disturbed. Mesm
The true test to ascertain whether or not an order or a judgment is interlocutory or final is:
Does it leave something to be done in the trial court with respect to the merits of the case? If it
does, it is interlocutory; if it does not, it is final. The key test to what is interlocutory is when
there is something more to be done on the merits of the case. [24] An order for partition is final
and not interlocutory and, hence, appealable because it decides the rights of the parties upon
the issue submitted.[25]
However, this Court notes that the order of partition was issued when the ruling in
Fuentebella vs. Carrascoso,[26] which held that the order of partition is interlocutory, was
controlling. In addition, the reports of the commissioners not having been confirmed by the
trial court are not binding.[27] In this case, both the order of partition and the unconfirmed
sketch plan are, thus, interlocutory. Nevertheless, where parties do not object to the
interlocutory decree, but show by their conduct that they have assented thereto, they cannot
thereafter question the decree,[28] especially, where, by reason of their conduct, considerable
expense has been incurred in the execution of the commission. [29] Respondents in this case
have occupied their respective lots in accordance with the sketch/subdivision plan. They
cannot after acquiescing to the order for more than forty (40) years be allowed to question the
binding effect thereof.
This case is to be distinguished from the order in the action for partition in Arcenas vs. Cinco.
[30] In that case, the order was clearly interlocutory since it required the parties " to submit the
corresponding deed of partition to the Court for its approval." Here, the order appointed two
commissioners and directed them merely to approve the sketch plan already existing and
tentatively followed by the parties. Calrky
Under the present rule, the proceedings of the commissioners without being confirmed by the
court are not binding upon the parties.[31] However, this rule does not apply in case where the
parties themselves actualized the supposedly unconfirmed sketch/subdivision plan. The
purpose of court approval is to give effect to the sketch/subdivision plan. In this case, the
parties themselves or through their predecessors-in-interest implemented the sketch plan
made pursuant to a court order for partition by actually occupying specific portions of Lot No.
1639 in 1952 and continue to do so until the present until this case was filed, clearly, the
purpose of the court approval has been met. This statement is not to be taken to mean that
confirmation of the commissioners may be dispensed with but only that the parties herein are
estopped from raising this question by their own acts of ratification of the supposedly non-
binding sketch/subdivision plan. Kycalr
The records of the case show that sometime in 1946 there was a prior oral agreement to
tentatively partition Lot No. 1639.[32] By virtue of this agreement, the original co-owners
occupied specific portions of Lot No. 1639.[33] It was only in 1952 when the petition to
subdivide Lot No. 1639 was filed because two of the co-owners, namely Hermogenes Olis
and heirs of Pascual Olis, refused to have said lot subdivided and have separate certificates
of title. Significantly, after the 1952 proceedings, the parties in this case by themselves and/or
through their predecessors-in-interest occupied specific portions of Lot No. 1639 in
accordance with the sketch plan. Such possession remained so until this case arose, or about
forty (40) years later.
From its order in 1952, it can be gleaned that the CFI took notice of the tentative subdivision
plan by oral partition of the parties therein. Further, it appears that said court was aware that
the parties therein actually took possession of the portions in accordance with the
sketch/subdivision plan. With this factual backdrop, said court ordered the partition and
appointed two (2) commissioners to approve the tentative sketch/subdivision plan. It would
not be unreasonable to presume that the parties therein, having occupied specific portions of
Lot No. 1639 in accordance with the sketch/subdivision plan, were aware that it was that
same sketch/subdivision plan which would be considered by the commissioners for approval.
There is no showing that respondents by themselves or through their predecessors-in-interest
raised any objections. On the contrary, the records show that the parties continued their
possession of the specific portions of Lot No. 1639 pursuant to the sketch/subdivision plan.
Kyle
It has been previously held that a co-owner, who, though not a party to a partition accepts the
partition allotted to him, and holds and conveys the same in severalty, will not be
subsequently permitted to avoid partition. [34] It follows that a party to a partition is also barred
from avoiding partition when he has received and held a portion of the subdivided land
especially in this case where respondents have enjoyed ownership rights over their share for
a long time.
Parties to a partition proceeding, who elected to take under partition, and who took
possession of the portion allotted to them, are estopped to question title to portion allotted to
another party.[35] A person cannot claim both under and against the same instrument. [36] In
other words, they accepted the lands awarded them by its provisions, and they cannot accept
the decree in part, and repudiate it in part. They must accept all or none. [37] Parties who had
received the property assigned to them are precluded from subsequently attacking its validity
of any part of it.[38] Here, respondents, by themselves and/or through their predecessors-in-
interest, already occupied of the lots in accordance with the sketch plan. This occupation
continued until this action was filed. They cannot now be heard to question the possession
and ownership of the other co-owners who took exclusive possession of Lot 1639-D also in
accordance with the sketch plan. Exsm
In technical estoppel, the party to be estopped must knowingly have acted so as to mislead
his adversary, and the adversary must have placed reliance on the action and acted as he
would otherwise not have done. Some authorities, however, hold that what is tantamount to
estoppel may arise without this reliance on the part of the adversary, and this is called,
ratification or election by acceptance of benefits, which arises when a party, knowing that he
is not bound by a defective proceeding, and is free to repudiate it if he will, upon knowledge,
and while under no disability, chooses to adopt such defective proceeding as his own. [39]
Ratification means that one under no disability voluntarily adopts and gives sanction to some
unauthorized act or defective proceeding, which without his sanction would not be binding on
him. It is this voluntary choice, knowingly made, which amounts to a ratification of what was
theretofore unauthorized, and becomes the authorized act of the party so making the
ratification.[40]
The records show that respondents were paying rent for the use of a portion of Lot No. 1639-
D. Had they been of the belief that they were co-owners of the entire Lot No. 1639 they would
not have paid rent. Respondents attempted to counter this point by presenting an
uncorroborated testimony of their sole witness to the effect that the amount so paid to
Roberto Maglucot and, subsequently, to Ruperta Salma were for the payment of real property
taxes. We are not persuaded. It is quite improbable that the parties would be unaware of the
difference in their treatment of their transactions for so long a time. Moreover, no evidence
was ever presented to show that a tax declaration for the entire Lot No. 1639 has ever been
made. Replete in the records are tax declarations for specific portions of Lot 1639. It is
inconceivable that respondents would not be aware of this. With due diligence on their part,
they could have easily verified this fact. This they did not do for a period spanning more than
four decades.
The payment of rentals by respondents reveal that they are mere lessees. As such, the
possession of respondents over Lot No. 1639-D is that of a holder and not in the concept of
an owner. One who possesses as a mere holder acknowledges in another a superior right
which he believes to be ownership, whether his belief be right or wrong. [41] Since the
possession of respondents were found to be that of lessors of petitioners, it goes without
saying that the latter were in possession of Lot No. 1639-D in the concept of an owner from
1952 up to the time the present action was commenced. Msesm
Partition may be inferred from circumstances sufficiently strong to support the presumption. [42]
Thus, after a long possession in severalty, a deed of partition may be presumed. [43] It has
been held that recitals in deeds, possession and occupation of land, improvements made
thereon for a long series of years, and acquiescence for 60 years, furnish sufficient evidence
that there was an actual partition of land either by deed or by proceedings in the probate
court, which had been lost and were not recorded. [44] And where a tract of land held in
common has been subdivided into lots, and one of the lots has long been known and called
by the name of one of the tenants in common, and there is no evidence of any subsequent
claim of a tenancy in common, it may fairly be inferred that there has been a partition and that
such lot was set off to him whose name it bears. [45]
Respondents insist that the absence of any annotation in the certificate of title showing any
partition of Lot No. 1639 and that OCT No. 6725 has not been canceled clearly indicate that
no partition took place. The logic of this argument is that unless partition is shown in the title
of the subject property, there can be no valid partition or that the annotation in the title is the
sole evidence of partition. Esmso
Again, we are not persuaded. The purpose of registration is to notify and protect the interests
of strangers to a given transaction, who may be ignorant thereof, but the non-registration of
the deed evidencing such transaction does not relieve the parties thereto of their obligations
thereunder.[46] As originally conceived, registration is merely a species of notice. The act of
registering a document is never necessary in order to give it legal effect as between the
parties.[47] Requirements for the recording of the instruments are designed to prevent frauds
and to permit and require the public to act with the presumption that recorded instruments
exist and are genuine.[48]
It must be noted that there was a prior oral partition in 1946. Although the oral agreement was
merely tentative, the facts subsequent thereto all point to the confirmation of said oral
partition. By virtue of that agreement, the parties took possession of specific portions of the
subject lot. The action for partition was instituted because some of the co-owners refused to
have separate titles issued in lieu of the original title. In 1952, an order for partition was issued
by the cadastral court. There is no evidence that there has been any change in the
possession of the parties. The only significant fact subsequent to the issuance of the order of
partition in 1952 is that respondents rented portions of Lot No. 1639-D. It would be safe to
conclude, therefore, that the oral partition as well as the order of partition in 1952 were the
bases for the finding of actual partition among the parties. The legal consequences of the
order of partition in 1952 having been discussed separately, we now deal with oral partition in
1946. Given that the oral partition was initially tentative, the actual possession of specific
portions of Lot No. 1639 in accordance with the oral partition and the continuation of such
possession for a very long period indicate the permanency and ratification of such oral
partition. The validity of an oral partition is already well-settled. In Espina vs. Abaya,[49] we
declared that an oral partition is valid. In Hernandez vs. Andal,[50] reiterated in Tan vs. Lim,[51]
this Court has ruled, thus:
On general principle, independent and in spite of the statute of frauds, courts of
equity have enforce oral partition when it has been completely or partly
performed. Esmmis
Regardless of whether a parol partition or agreement to partition is valid and
enforceable at law, equity will proper cases where the parol partition has
actually been consummated by the taking of possession in severalty and the
exercise of ownership by the parties of the respective portions set off to each,
recognize and enforce such parol partition and the rights of the parties
thereunder. Thus, it has been held or stated in a number of cases involving an
oral partition under which the parties went into possession, exercised acts of
ownership, or otherwise partly performed the partition agreement, that equity will
confirm such partition and in a proper case decree title in accordance with the
possession in severalty.
In numerous cases it has been held or stated that parol partition may be
sustained on the ground of estoppel of the parties to assert the rights of a tenant
in common as to parts of land divided by parol partition as to which possession
in severalty was taken and acts of individual ownership were exercised. And a
court of equity will recognize the agreement and decree it to be valid and
effectual for the purpose of concluding the right of the parties as between each
other to hold their respective parts in severalty.
A parol partition may also be sustained on the ground that the parties thereto
have acquiesced in and ratified the partition by taking possession in severalty,
exercising acts of ownership with respect thereto, or otherwise recognizing the
existence of the partition.
A number of cases have specifically applied the doctrine of part performance, or
have stated that a part performance is necessary, to take a parol partition out of
the operation of the statute of frauds. It has been held that where there was a
partition in fact between tenants in common, and a part performance, a court of
equity would have regard to enforce such partition agreed to by the parties.
Esmsc
Two more points have constrained this Court to rule against respondents. First, respondents
Wilfreda Maglucot-Alejo and Constancio Alejo offered to buy the share of Roberto Maglucot.
Second, the tax declarations contain statements that the houses of respondents were built on
the land owned by Roberto Maglucot. Esm
On the first point, petitioners presented Aida Maglucot who testified that after respondents
were informed that petitioners were going to use Lot No. 1639-D belonging to Roberto
Maglucot, respondents Wilfreda Maglucot-Alejo and Constancio Alejo went to the house of
said witness and offered to buy the share of Roberto Maglucot. [52] Aida Maglucot further
testified that they refused the offer because they also intend to use the lot for a residential
purpose.[53] This testimony of Aida Maglucot is unrebutted by respondents, and the CA did not
touch upon this finding of fact. Hence, the offer to buy has been established by the unrebutted
evidence of the petitioners. Why would they give such offer if they claim to be at least a co-
owner of the said lot? In effect, respondents impliedly admit the title of the petitioners and that
they are not co-owners, much less the sole owners, of Lot No. 1639-D. Chief
On the second point, the existence of Tax Declaration No. 04-557 in the names of Constancio
Alejo and Godofreda Maglucot,[54] Tax Declaration No. 04-87-13 in the names of Leopoldo
Maglucot and Regina Barot,[55] Tax Declaration No. 04-593 in the names of Severo Maglucot
and Samni Posida[56] showing that the houses of the above-mentioned persons are
constructed on the land of Roberto Maglucot[57] constitute incontrovertible evidence of
admission by the same persons of the ownership of the land by Roberto Maglucot. Tax
Declarations are public documents. Unless their veracity is directly attacked, the contents
therein are presumed to be true and accurate.[58] The lone testimony of Severo Maglucot that
Roberto Maglucot was only made to appear as owner of the land in their respective
declarations because he was the administrator of Lot No. 1639 is uncorroborated and not
supported by any other evidence. Jksm
No injustice is dealt upon respondents because they are entitled to occupy a portion of Lot
No. 1639, particularly Lot No. 1639-A, in their capacity as heirs of Tomas Maglucot, one of the
original co-owners of Lot No. 1639 in accordance with the sketch plan of said lot showing the
partition into six portions.[59]
Finally, this Court takes notice of the language utilized by counsel for petitioners in their
petition for review on certiorari. Thrice in the petition, counsel for petitioners made reference
to the researcher of the CA. First, he alluded to the lack of scrutiny of the records and lack of
study of the law "by the researcher."[60] Second, he cited the researcher of the CA as having
"sweepingly stated without reference to the record" [61] that "[w]e have scanned the records on
hand and found no evidence of any partition." Finally, counsel for petitioners assailed the CA
decision, stating that "this will only show that there was no proper study of the case by the
researcher."[62]
Any court when it renders a decision does so as an arm of the justice system and as an
institution apart from the persons that comprise it. Decisions are rendered by the courts and
not the persons or personnel that may participate therein by virtue of their office. It is highly
improper and unethical for counsel for petitioners to berate the researcher in his appeal.
Counsel for petitioner should be reminded of the elementary rules of the legal profession
regarding respect for the courts by the use of proper language in its pleadings and
admonished for his improper references to the researcher of the CA in his petition. A lawyer
shall abstain from scandalous, offensive, or menacing language or behavior before the courts.
[63]
WHEREFORE, the petition is GRANTED The decision of the Court of Appeals is SET ASIDE
and the decision of the Regional Trial Court is hereby REINSTATED. h Y
SO ORDERED.
SECOND DIVISION
[G.R. No. 128338. March 28, 2005]
TINING RESUENA, ALEJANDRA GARAY, LORNA RESUENA, ELEUTERIO RESUENA,
EUTIQUIA ROSARIO and UNISIMA RESUENA, petitioners, vs. HON. COURT OF APPEALS, 11th
DIVISION and JUANITO BORROMEO, SR., respondents.
DECISION
TINGA, J.:
This is a Rule 45 Petition for Review on Certiorari of the Decision[1] of the Court of Appeals
affirming that of the Regional Trial Court (RTC) of Cebu,[2] which in turn reversed that of the
Metropolitan Trial Court (mtc) of Talisay, Cebu.[3]
Private respondent, the late Juanito Borromeo, Sr.[4] (hereinafter, respondent), is the co-owner and
overseer of certain parcels of land located in Pooc, Talisay, Cebu, designated as Lots Nos. 2587 and
2592 of the Talisay-Manglanilla Estate. Respondent owns six-eighths (6/8) of Lot No. 2587 while the
late spouses Inocencio Bascon and Basilisa Maneja (Spouses Bascon) own two-eights (2/8) thereof. On
the other hand, Lot No. 2592 is owned in common by respondent and the heirs of one Nicolas Maneja.
However, the proportion of their undivided shares was not determined a quo.
Prior to the institution of the present action, petitioners Tining Resuena, Alejandra Garay, Lorna
Resuena, Eleuterio Resuena, and Unisima Resuena resided in the upper portion of Lot No. 2587,
allegedly under the acquiescence of the Spouses Bascon and their heir, Andres Bascon. On the other
hand, petitioner Eutiquia Rosario occupied a portion of Lot No. 2592, allegedly with the permission of
the heirs of Nicolas Maneja, one of the original co-owners of Lot No. 2587. Respondent claims that all
petitioners have occupied portions of the subject property by virtue of his own liberality.
Respondent developed portions of Lots Nos. 2587 and 2592 occupied by him into a resort known as the
Borromeo Beach Resort. In his desire to expand and extend the facilities of the resort that he
established on the subject properties, respondent demanded that petitioners vacate the property.
Petitioners, however, refused to vacate their homes.
On 16 February 1994, respondent filed a Complaint[5] for ejectment with the MTC against the
petitioners. After a summary proceeding, the MTC, in a Decision[6] dated 10 October 1994, found that
Lots Nos. 2587 and 2592 were owned in common by respondent with other persons. The MTC ruled
that respondent did not have a preferential right of possession over the portions occupied by petitioners,
since Lots Nos. 2587 and 2592 were not yet partitioned nor the disputed portions assigned to
respondent as his determinate share. Thus, the MTC held that respondent had no right to evict
petitioners therefrom. Consequently, respondents Complaint was dismissed.
Notably, the MTC held that respondent and the spouses Bascon were the owners in common of Lot No.
2587 and their respective shares had not yet been determined by partition as proven by a testimony
given by respondent in Civil Case No. R-14600, viz:
Q. And the participation there of Inocencio Bascon is 2/8 of the said parcel of land?
A. Yes sir.
Q. And until the present that parcel of land is undivided?
A. It is not yet partitioned, but during the time of Basilisa Maneja we had already made some
indications of the portions that we came to occupy.
Q. That is the parcel of land where you have your beach resort?
A. Yes, sir; and that was our agreement, verbally, that with respect to the portion of the land towards the
sea-shore it will be my share and that portion of the land towards the upper part will be theirs.[7]
On appeal, the RTC reversed the Decision of the MTC. It held that Article 487 of the Civil Code, which
allows any one of the co-owners to bring an action in ejectment, may successfully be invoked by the
respondent because, in a sense, a co-owner is the owner and possessor of the whole, and that the suit
for ejectment is deemed to be instituted for the benefit of all co-owners.[8] The RTC also ruled that
assuming petitioners were authorized to occupy a portion of the co-owned property, they could resume
this occupation when the properties shall have been partitioned and allocated to the ones who gave
them permission to reside therein. It thus held:
WHEREFORE, judgment of the lower court is hereby reversed and the defendants are hereby directed
to vacate the premises in question without prejudice to their going back to the land after partition shall
have been effected by the coheirs and/or co-owners among themselves but to the specific portion or
portions adjudicated to the person or persons who allegedly authorized them to occupy their portions
by tolerance.[9]
The Court of Appeals affirmed the Decision of the RTC; hence, this petition which involves the
following assignment of errors:[10]
1. That with grave abuse of discretion, amounting to excess of jurisdiction, the honorable eleventh
division of the court of appeals erred in NOT APPLYING and/or in NOT DECLARING private
respondent juanito borromeo estopped in filing this ejectment case against the herein six (6) petitioners.
2. That with grave abuse of discretion, the honorable eleventh division of the court of appeals erred in
incorrectly applying the statute of frauds, considering that the verbal agreement entered into by and
between spouses inocencio bascon and basilisa maneja on the one hand and juanito borromeo on the
other more than twenty (20) years ago today, was already an EXECUTED CONTRACT.
3. That with grave abuse of discretion, amounting to excess of jurisdiction, the honorable eleventh
division of the court of appeals erred in ignoring outright article 493 of the new civil code of the
philippines, considering that the six (6) petitioners are only ASSIGNEES, pure and simple, of co-
owners spouses ignacio bascon and basilisa maneja and/or andres bascon, the adopted son of the said
spouses.
4. That granting arguendo that the herein six (6) petitioners have to be ejected, the eleventh division of
the court of appeals erred in NOT remanding this case to the court of origin for the reception of
evidence for damages, pursuant to and in accordance with art. 546, new civil code.
The petition cannot prosper.
At the outset it must be stated that petitioners ground their petition on respondents testimony in Civil
Case No. R-14600 that he had agreed with co-owner, Basilisa Maneja, on the portions they each were
to occupy in Lot No. 2587 prior to the partition of the property. However, respondents testimony and,
consequently, the agreement alluded to therein pertains solely to Lot No. 2587which, admittedly, all of
petitioners occupy, save for Eutiquia Rosario who occupies Lot No. 2592. No argument was presented
in this petition as regards the latters claim. Having no basis to review Eutiquia Rosarios claim to be
allowed to continue in her occupation of Lot No. 2592, this Court maintains the holding of the RTC on
this matter, as affirmed by the Court of Appeals, that respondent has the right to eject petitioner
Eutiquia Rosario from Lot No. 2592.
With regard to the other five (5) petitioners, the Court notes that their first three assignments of errors
are interrelated and built on each other. Petitioners allege that respondents testimony in Civil Case No.
R-14600, expressing that the upper two-eighths (2/8) portion of Lot No. 2587 would be occupied by
Basilisa Maneja, constituting as it does a waiver of said portion, has estopped respondent from
claiming the portion. Basilisa Maneja and her husband allegedly relied on this agreement when the
spouses assigned the upper portion of Lot No. 2587 to petitioners. Moreover, petitioners claim that
their occupation of the upper portion of Lot No. 2587 had consummated the verbal agreement between
respondent and Basilisa Maneja and brought agreement beyond the purview of the Statute of Frauds.
A careful perusal of the foregoing issues reveals that petitioners assumed the following as proven facts:
(1) respondent had indicated to Basilisa Maneja the portions they were to occupy in Lot No. 2587; and
(2) the Spouses Bascon assigned to petitioners their portions of Lot No. 2587. By claiming these as the
bases for their assignment of errors, petitioners in essence are raising questions of fact.[11]
The issues raised by petitioners on the application of estoppel, statute of frauds, and the assignment of
properties owned in common in their favor, while ostensibly raising questions of law, invite this Court
to rule on questions of fact. This runs counter to the settled rule that only questions of law may be
raised in a petition for review before the Court and the same must be distinctly set forth.[12]
It is not the function of this Court to weigh anew the evidence already passed upon by the Court of
Appeals for such evidence is deemed final and conclusive and may not be reviewed on appeal. A
departure from the general rule may be warranted, among others, where the findings of fact of the
Court of Appeals are contrary to the findings and conclusions of the trial court, or when the same is
unsupported by the evidence on record.[13]
In the instant case, the RTC and the Court of Appeals rendered judgment merely on questions of law as
applied to the facts as determined by the MTC. Consequently this Court must proceed on the same set
of facts without assuming, as petitioners have done, the veracity of claims which have been considered,
but not accepted as facts, by the courts below.
Guided by the foregoing, this Court finds in this case that filtered of the muddle from petitioners
assignment of errors, it is unmistakable that respondent has a right to eject the petitioners from Lot No.
2587.
Article 487 of the Civil Code, which provides simply that [a]ny one of the co-owners may bring an
action in ejectment, is a categorical and an unqualified authority in favor of respondent to evict
petitioners from the portions of Lot. No. 2587.
This provision is a departure from Palarca v. Baguisi,[14] which held that an action for ejectment must
be brought by all the co-owners. Thus, a co-owner may bring an action to exercise and protect the
rights of all. When the action is brought by one co-owner for the benefit of all, a favorable decision will
benefit them; but an adverse decision cannot prejudice their rights.[15]
Respondents action for ejectment against petitioners is deemed to be instituted for the benefit of all co-
owners of the property[16] since petitioners were not able to prove that they are authorized to occupy
the same.
Petitioners lack of authority to occupy the properties, coupled with respondents right under Article 487,
clearly settles respondents prerogative to eject petitioners from Lot No. 2587. Time and again, this
Court has ruled that persons who occupy the land of another at the latter's tolerance or permission,
without any contract between them, are necessarily bound by an implied promise that they will vacate
the same upon demand, failing in which a summary action for ejectment is the proper remedy against
them.[17]
Petitioners pose the strange claim that respondent had estopped himself from filing an ejectment case
against petitioners by his aforequoted testimony in Civil Case No. R-14600. Such testimony is
irrelevant to the case at bar, as it does nothing to strengthen the claim of petitioners that they had a right
to occupy the properties. This testimony merely indicates that there might have been an agreement
between the Spouses Bascon and Borromeo as to which of them would occupy what portion of Lot No.
2587. Yet this averment hardly establishes a definitive partition, or moreover, any right of petitioners to
dwell in any portion of Lot No. 2587. Besides, [e]stoppel is effective only as between the parties
thereto or their successors in interest; thus, only the spouses Bascon or their successors in interest may
invoke such estoppel. A stranger to a transaction is neither bound by, nor in a position to take advantage
of, an estoppel arising therefrom.[18]
For the same reason, it is of no moment whether indeed, as petitioners claim, there was a verbal
contract between Basilisa Maneja and Borromeo when the latter indicated the portions they each were
to occupy in Lot No. 2587. Such verbal contract, assuming there was one, does not detract from the fact
that the common ownership over Lot No. 2587 remained inchoate and undivided, thus casting doubt
and rendering purely speculative any claim that the Spouses Bascon somehow had the capacity to
assign or transmit determinate portions of the property to petitioners.
Thus, in order that the petition may acquire any whiff of merit, petitioners are obliged to establish a
legal basis for their continued occupancy of the properties. The mere tolerance of one of the co-owners,
assuming that there was such, does not suffice to establish such right. Tolerance in itself does not bear
any legal fruit, and it can easily be supplanted by a sudden change of heart on the part of the owner.
Petitioners have not adduced any convincing evidence that they have somehow become successors-in-
interest of the Spouses Bascon, or any of the owners of Lot No. 2587.
Indeed, there is no writing presented to evidence any claim of ownership or right to occupancy to the
subject properties. There is no lease contract that would vest on petitioners the right to stay on the
property. As discussed by the Court of Appeals,[19] Article 1358 of the Civil Code provides that acts
which have for their object the creation, transmission, modification or extinguishment of real rights
over immovable property must appear in a public instrument. How then can this Court accept the claim
of petitioners that they have a right to stay on the subject properties, absent any document which
indubitably establishes such right? Assuming that there was any verbal agreement between petitioners
and any of the owners of the subject lots, Article 1358 grants a coercive power to the parties by which
they can reciprocally compel the documentation of the agreement.[20]
Thus, the appellate court correctly appreciated the absence of any document or any occupancy right of
petitioners as a negation of their claim that they were allowed by the Spouses Bascon to construct their
houses thereon and to stay thereon until further notice. On this note, this Court will no longer belabor
petitioners allegation that their occupation of Lot No. 2587 is justified pursuant to the alleged but
unproven permission of the Spouses Bascon.
All six (6) petitioners claim the right to be reimbursed necessary expenses for the cost of constructing
their houses in accordance with Article 546 of the Civil Code.[21] It is well-settled that while the
Article allows full reimbursement of useful improvements and retention of the premises until
reimbursement is made, applies only to a possessor in good faith, i.e., one who builds on land with the
belief that he is the owner thereof. Verily, persons whose occupation of a realty is by sheer tolerance of
its owners are not possessors in good faith.[22]
The lower courts have made a common factual finding that petitioners are occupying portions of Lots
No. 2587 and 2592 by mere tolerance. Thus, petitioners have no right to get reimbursed for the
expenses they incurred in erecting their houses thereon.
WHEREFORE, premises considered, the Petition is DENIED and the Decision of the Court of
Appeals AFFIRMED. Costs against petitioners.
SO ORDERED.
Puno, (Chairman), Austria-Martinez, Callejo, Sr., and Chico-Nazario, JJ., concur.
Dated 07 October 1996 in CA-G.R. SP No. 39058 rendered by the Eleventh Division of the Court of
[1]
Appeals, penned by Justice Ramon Mabutas Jr., concurred IB by Justice Minerva P. Gonzaga-Reyes
and Justice Salvador J. Valdez, Jr. The Court of Appeals held, thus:
WHEREFORE, premises considered, the appealed decision (dated April 28, 1995) and the order (dated
September 8, 1995) of the respondent court (Branch 18, Regional Trial Court in Cebu City) in Civil
Case No. CEB-16727 are hereby AFFIRMED, with costs against the petitioners/appellants.
SO ORDERED.
[2] Branch 18, in Civil Case for Ejectment No. CEB-16727 rendered by Judge Galicano C. Arriesgado.
[3] Branch 01, in Civil Case for Ejectment No. 695 rendered by Judge Mario V. Manayon.
[4]Owing to the death of Juanito Borromeo, Sr. on 23 December 1997, this Court, in its Resolution
dated 06 September 1999, allowed his heirs, namely, Juanito Borromeo, Jr., Virginia Borromeo-
Guzman, and the heirs of Andres Borromeo, Sr. namely: Jacqueline, John, and Andres Jr., all surnamed
Borromeo, to be substituted for the deceased-widower. Rollo, p. 146.
THIRD DIVISION
[G.R. No. 148376. March 31, 2005]
LEONARDO ACABAL and RAMON NICOLAS, petitioners, vs. VILLANER ACABAL, EDUARDO
ACABAL, SOLOMON ACABAL, GRACE ACABAL, MELBA ACABAL, EVELYN ACABAL,
ARMIN ACABAL, RAMIL ACABAL, and BYRON ACABAL, respondents.
DECISION
CARPIO MORALES, J.:
Before this Court is a Petition for Review on Certiorari of the February 15, 2001 Decision[1] of the
Court of Appeals reversing that of the Regional Trial Court (RTC) of Dumaguete City, Branch 35.[2]
In dispute is the exact nature of the document[3] which respondent Villaner Acabal (Villaner) executed
in favor of his godson-nephew-petitioner Leonardo Acabal (Leonardo) on April 19, 1990.
Villaners parents, Alejandro Acabal and Felicidad Balasabas, owned a parcel of land situated in Barrio
Tanglad, Manjuyod, Negros Oriental, containing an area of 18.15 hectares more or less, described in
Tax Declaration No. 15856.[4] By a Deed of Absolute Sale dated July 6, 1971,[5] his parents transferred
for P2,000.00 ownership of the said land to him, who was then married to Justiniana Lipajan.[6]
Sometime after the foregoing transfer, it appears that Villaner became a widower.
Subsequently, he executed on April 19, 1990 a deed[7] conveying the same property[8] in favor of
Leonardo.
Villaner was later to claim that while the April 19, 1990 document he executed now appears to be a
Deed of Absolute Sale purportedly witnessed by a Bais City trial court clerk Carmelo Cadalin and his
wife Lacorte, what he signed was a document captioned Lease Contract[9] (modeled after a July 1976
lease agreement[10] he had previously executed with previous lessee, Maria Luisa Montenegro[11])
wherein he leased for 3 years the property to Leonardo at P1,000.00 per hectare[12] and which was
witnessed by two women employees of one Judge Villegas of Bais City.
Villaner thus filed on October 11, 1993 a complaint[13] before the Dumaguete RTC against Leonardo
and Ramon Nicolas to whom Leonardo in turn conveyed the property, for annulment of the deeds of
sale.
At the witness stand, Villaner declared:
Q: It appears, Mr. Acabal, that you have signed a document of sale with the defendant
Leonardo Acabal on April 19, 1990, please tell the court whether you have really agreed
to sell this property to the defendant on or before April 19, 1990?
A: We had some agreement but not about the selling of this property.
Q: What was your agreement with the defendant Leonardo Acabal?
A: Our agreement [was] that he will just rent.[14]
xxx
Q: Now, please tell the court how were you able to sign this document on April 19,
1990?
A: I do not know why I signed that, that is why I am puzzled.
Q: Why, did you not read the contents of this document?
A: I have not read that. I only happened to read the title of the Lease Contract.
Q: And do you recall who were the witnesses of the document which you signed in
favor of Leonardo Acabal?
A: Employees of Judge Villegas of Bais City.
Q: Did you see them sign that document?
A: Yes, sir.
Q: These signatures appearing in this document marked as Exhibit C for the
plaintiff and Exhibit 1 for the defendant, please examine over (sic) these signatures
if these were the signatures of these witnesses who signed this document?
A: These are not the signatures of the two women.
Q: And after signing this document on April 19, 1990, did you appear before a notary
public to have this notarized?
A: No, I went home to San Carlos.[15]
xxx
Q: According to this document, you sell (sic) this property at P10,000.00, did you sell
this property to Leonardo Acabal?
A: No, sir.
Q: How about after April 19, 1990, did you receive this amount from Leonardo Acabal?
A: No, sir.[16]
xxx
Q: Now you said that on May 25, 1990, Leonardo Acabal did not pay the amount that he
promised to you, what did you do of (sic) his refusal to pay that amount?
A: I went to Mr. [Carmelo] Mellie Cadalin because he was the one who prepared
the papers and to ask Leonardo Acabal why he will not comply with our
agreement.
Q: By the way, who is this Mellie Cadalin?
A: Mellie Cadalin is also working in the sala of Judge Villegas.
Q: Who requested Mellie Cadalin to prepare this document?
A: Maybe it was Leonardo Acabal.
Q: By the way, when for the first time did you talk to Leonardo Acabal regarding your
agreement to lease this property to him?
A: March 14, 1990, in San Carlos.
Q: And what document did you give to him in order that that document will be
prepared?
A: I have given (sic) some papers and contract of lease that I have signed to (sic)
Mrs. Montenegro.[17] (Emphasis and underscoring supplied)
xxx
Q: Now, Carmelo Cadalin [Mellie] also testified before this court that in fact he
identified the document marked as Exhibit C for the plaintiff that what you executed on
April 19, 1990 was a deed of sale and not a contract of lease, what can you say to that
statement?
A: That is a lie.
Q: And whats the truth then?
A: What really (sic) I have signed was the document of lease contract.
Q: Now, can you explain to the Honorable Court why it so happened that on April
19, you were able to sign a deed of sale?
A: What I can see now is that perhaps those copies of the deed of sale were placed
by Mr. Cadalin under the documents which I signed the lease contract. But why is it
that it has already a deed of sale when what I have signed was only the lease of contract
or the contract of lease.
Q: Now, Mr. Cadalin also stated before this court that he handed over to you this Deed
of Sale marked as Exhibit C and according to him you read this document, what can you
say to this statement?
A: Yes, there was a document that he gave me to read it (sic)but it was a contract of
lease.
Q: How sure are you that what you signed on April 19, 1990 was really a contract of
lease and not a contract of sale?
A: Because when I signed the contract of lease the witnesses that witnessed my
signing the document were the employees of Judge Villegas and then I am now
surprised why in the deed of sale which I purportedly signed are witnessed by
Carmelo Cadalin and his wife Lacorte.[18] (Emphasis and underscoring supplied)
On the other hand, Leonardo asserts that what Villaner executed was a Deed of Absolute Sale for a
consideration of P10,000.00 which he had already paid,[19] and as he had become the absolute owner of
the property, he validly transferred it to Ramon Nicolas on May 19, 1990.[20]
Carmelo Cadalin who admittedly prepared the deed of absolute sale and who appears as a witness,
along with his wife, to the execution of the document corroborated Leonardos claim:
Q: Mr. Cadalin, do you know the plaintiff Villaner Acabal?
A: Yes, I know.[21]
xxx
Q: And I would like to ask you Mr. witness why do you know Villaner Acabal?
A: At the time that he went to our house together with Leonardo Acabal he
requested me to prepare a deed of sale as regards to a sale of the property.[22]
xxx
Q: And after they requested you to prepare a document of sale, what did you do?
A: At first I refused to [do] it because I have so many works to do, but then they
insisted so I prepared the deed.
Q: After you prepared the document, what did you do?
A: After I prepared it I gave it to him so that he could read the same.
Q: When you say him, whom do you refer to?
A: Villaner Acabal.
Q: And did Villaner Acabal read the document you prepared?
A: Yes, he read it.
Q: And after reading it what did Villaner Acabal do?
A: He signed the document.
Q: Showing to you a document which is marked Exhibit C for the plaintiff and
Exhibit 1 for the defendants, please tell the Honorable Court what relation this
document has to the document which you described earlier?
COURT INTERPRETER:
Witness is confronted with the said document earlier marked as Exhibit C for the
prosecution and Exhibit 1 for the defense.
A: Yes, this is the one.[23]
xxx
Q: Also stated in the document is the phrase Signed in the presence of and there is a
number and then two signatures, could you please examine the document and say
whether these signatures are familiar to you?
A: Yes, number one is my signature and number 2 is the signature of my wife as
witness.[24]
xxx
Q: After Villaner Acabal signed the document, what did Villaner Acabal do?
A: He was given the payment by Leonardo Acabal.[25]
xxx
Q: Aside from the document, deed of absolute sale, that you mentioned earlier that you
prepared for Villaner Acabal and Leonardo Acabal, what other documents, if any, did
you prepare for them?
A: Affidavit of non-tenancy and aggregate area.[26] (Emphasis and underscoring
supplied)
The complaint was later amended[27] to implead Villaners eight children as party plaintiffs, they being
heirs of his deceased wife.
By Decision of August 8, 1996, the trial court found for the therein defendants-herein petitioners
Leonardo and Ramon Nicolas and accordingly dismissed the complaint.
Villaner et al. thereupon brought the case on appeal to the Court of Appeals which reversed the trial
court, it holding that the Deed of Absolute Sale executed by Villaner in favor of Leonardo was
simulated and fictitious.[28]
Hence, Leonardo and Ramon Nicolas present petition for review on certiorari,[29] anchored on the
following assignments of error:
I.
THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR WHEN IT RULED THAT
RESPONDENT VILLANER ACABAL WAS DECEIVED INTO SIGNING THE DEED OF
ABSOLUTE SALE WHEN THE LATTER KNOWINGLY, FREELY AND VOLUNTARILY
EXECUTED THE SAME IN FAVOR OF PETITIONER LEONARDO ACABAL.
II.
THE COURT OF APPEALS ERRED WHEN IT RULED THAT THE CONSIDERATION OF THE
DEED OF ABSOLUTE SALE IN THE AMOUNT OF TEN THOUSAND PESOS (P10,0000.00) WAS
UNUSUALLY LOW AND INADEQUATE, ESPECIALLY TAKING INTO ACCOUNT THE
LOCATION OF THE SUBJECT PROPERTY.
III.
THE COURT OF APPEALS ERRED WHEN IT FAILED TO CONSIDER WHY RESPONDENT
VILLANER ACABAL ONLY QUESTIONED THE POSSESSION AND OWNERSHIP OF
PETITIONER RAMON NICOLAS IN COURT AFTER THE LATTER WAS IN OPEN,
CONTINUOUS AND PEACEFUL POSSESSION OF THE SUBJECT PROPERTY FOR ALMOST
THREE (3) YEARS.
IV.
THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN LAW WHEN IT FAILED
TO DECLARE PETITIONER RAMON NICOLAS AS A BUYER IN GOOD FAITH AS THE
LATTER TOOK THE NECESSARY STEPS AN ORDINARY AND PRUDENT MAN WOULD
HAVE TAKEN BEFORE BUYING THE QUESTIONED PROPERTY.
V.
THE COURT OF APPEALS ERRED IN RULING IN FAVOR OF RESPONDENT VILLANER
ACABAL WHEN THE LATTER DID NOT PRESENT A SINGLE WITNESS TO TESTIFY ON THE
ALLEGED CONTRACT OF LEASE WHICH HE ALLEGEDLY SIGNED AND WITNESSED BY
THE EMPLOYEES OF JUDGE VILLEGAS.
VI.
THE COURT OF APPEALS COMMITTED A REVERSIBLE ERROR IN LAW WHEN IT RULED
THAT RULE 8, SECTION 8 OF THE 1987 (sic) RULE (sic) OF CIVIL PROCEDURE IS NOT
APPLICABLE IN THE CASE AT BAR, CONTRARY TO THE RULING OF THE LOWER COURT.
VII.
THE COURT OF APPEALS ERRED WHEN IT ORDERED PETITIONERS TO PAY
RESPONDENTS JOINTLY AND SEVERALLY BY WAY OF RENTAL THE SUM OF P10,000.00
PER YEAR FROM 1990 UP TO THE TIME THEY VACATE THE PREMISES.[30]
Procedurally, petitioners contend that the Court of Appeals erred when it failed to apply Section 8, Rule
8 of the Rules of Court, respondent Villaner having failed to deny under oath the genuineness and due
execution of the April 19, 1990 Deed of Absolute Sale.
Petitioners contention does not persuade. The failure to deny the genuineness and due execution of an
actionable document does not preclude a party from arguing against it by evidence of fraud, mistake,
compromise, payment, statute of limitations, estoppel, and want of consideration.[31]
On the merits, this Court rules in petitioners favor.
It is a basic rule in evidence that the burden of proof lies on the party who makes the allegations[32] ei
incumbit probatio, qui dicit, non qui negat; cum per rerum naturam factum negantis probatio nulla sit.
[33] If he claims a right granted by law, he must prove it by competent evidence, relying on the strength
of his own evidence and not upon the weakness of that of his opponent.
More specifically, allegations of a defect in or lack of valid consent to a contract by reason of fraud or
undue influence are never presumed but must be established not by mere preponderance of evidence
but by clear and convincing evidence.[34] For the circumstances evidencing fraud and misrepresentation
are as varied as the people who perpetrate it in each case, assuming different shapes and forms and may
be committed in as many different ways.[35]
In the case at bar, it was incumbent on the plaintiff-herein respondent Villaner to prove that he was
deceived into executing the Deed of Absolute Sale. Except for his bare allegation that the transaction
was one of lease, he failed to adduce evidence in support thereof. His conjecture that perhaps those
copies of the deed of sale were placed by Mr. Cadalin under the documents which I signed the contract
of lease,[36] must fail, for facts not conjectures decide cases.
Attempting to seek corroboration of his account, Villaner presented Atty. Vicente Real who notarized
the document. While on direct examination, Atty. Real virtually corroborated Villaners claim that he
did not bring the document to him for notarization,[37] on cross-examination, Atty. Real conceded that it
was impossible to remember every person who would ask him to notarize documents:
Q: And in the course of your notarization, can you remember each and every face
that come (sic) to you for notarization?
A: No, it is impossible.
Q: In the case of Villaner Acabal which you have his document notarized (sic) in
1990, can you remember his face when he came to you?
A: No.
Q: And can you also say, if a person who came to you having a document to be
notarized and if he will appear again after a month, can you remember whether he
was the one who came to you?
A: Not so much because everyday there are many people who appear with
documents to be notarized,
Q: So, it is safe to say that if Villaner Acabal came to you on April 25 or rather
April 16, 1990 andhave (sic) his document notarized if he comes back in, say May
25, can you still remember if he was the one who came to you?
A: I cannot be sure but at least, there are times I can remember persons because he
seems to be close to me already.
Q: Is this Villaner close to you?
A: Because he has been frequenting the house/asking for a copy of the document.
Q: So, he became close to you after you notarized the document?
A: Yes.[38] (Emphasis and underscoring supplied)
On Villaners claim that two women employees of Judge Villegas signed as witnesses to the deed[39] but
that the signatures appearing thereon are not those of said witnesses,[40] the same must be discredited in
light of his unexplained failure to present such alleged women employee-witnesses.
In another vein, Villaner zeroes in on the purchase price of the property P10,000.00 which to him was
unusually low if the transaction were one of sale. To substantiate his claim, Villaner presented Tax
Declarations covering the property for the years 1971,[41] 1974,[42] 1977,[43] 1980,[44] 1983,[45] 1985,[46]
as well as a Declaration of Real Property executed in 1994.[47]
It bears noting, however, that Villaner failed to present evidence on the fair market value of the
property as of April 19, 1990, the date of execution of the disputed deed. Absent any evidence of the
fair market value of a land as of the time of its sale, it cannot be concluded that the price at which it
was sold was inadequate.[48] Inadequacy of price must be proven because mere speculation or
conjecture has no place in our judicial system.[49]
Victor Ragay, who was appointed by the trial court to conduct an ocular inspection[50] of the property
and to investigate matters relative to the case,[51] gave an instructive report dated December 3, 1994,[52]
the pertinent portions of which are hereby reproduced verbatim:
a) Only three (3) to four (4) hectares of the eighteen (18) were planted to sugar cane, the rest was never
cultivated;
b) the soil is reddish and somewhat sandy in composition;
c) the soil contains so much limestones (rocks consisting mainly of calcium carbonate);
d) no part of the land in question is plain or flat, contrary to claim of the plaintiff that almost 10
hectares of the land in question is plain or flat;
e) some areas, eastward of and adjacent of the land in question (mistakenly to be owned by the
defendant Nicolas) were planted to sugar cane by the owners Kadusales;
f) the road going to the land in question (as claimed to be the road) is no longer passable because it has
been abandoned and not maintained by anyone, thus it makes everything impossible for anybody to get
and haul the sugar cane from the area;
g) the Commissioner has discovered some stockpiles of abandoned harvested sugar canes left to rot,
along the side of the road, undelivered to the milling site because of the difficulty in bringing up trucks
to the scene of the harvest;
h) the sugarcanes presently planted on the land in question at the time of the ocular inspection were
three (3) feet in height and their structural built was thin or lean;
i) Most of the part of the 18 hectares is not planted or cultivated because the same is too rocky and not
suitable for planting to sugarcane.[53]
Additionally, Ragay reported that one Anatolio Cabusog recently purchased a 6-hectare property
adjoining that of the subject property for only P1,600.00[54] or P266.67 per hectare. Given that, had the
18-hectare subject property been sold at about the same time, it would have fetched the amount of
P4,800.00,[55] hence, the P10,000.00 purchase price appearing in the questioned April 19, 1990
document is more than reasonable.
Even, however, on the assumption that the price of P10,000.00 was below the fair market value of the
property in 1990, mere inadequacy of the price per se will not rule out the transaction as one of sale.
For the price must be grossly inadequate or shocking to the conscience such that the mind revolts at it
and such that a reasonable man would neither directly nor indirectly be likely to consent to it.[56]
Still in another vein, Villaner submits that Leonardos transfer of the property to Nicolas in a span of
one month for a profit of P30,000.00 conclusively reflects Leonardos fraudulent intent. This
submission is a non sequitur.
As for Villaners argument that the sale of the property to Leonardo and the subsequent sale thereof to
Nicolas are void for being violative of the retention limits imposed by Republic Act No. 6657,
otherwise known as the Comprehensive Agrarian Reform Law, the same fails. The pertinent provisions
of said law read:
SECTION 6. Retention Limits. Except as otherwise provided in this Act, no person may retain, directly
or indirectly, any public or agricultural land, the size of which may vary according to factors governing
a viable family-sized farm, such as commodity produced, terrain, infrastructure, and soil fertility as
determined by the Presidential Agrarian Reform Council (PARC) created hereunder, but in no case
shall retention by the landowner exceed five (5) hectares. Three (3) hectares may be awarded to each
child of the landowner, subject to the following qualifications: (1) that he is at least fifteen (15) years of
age; and (2) that he is tilling the land or directly managing the farm: Provided, That landowners whose
lands have been covered by Presidential Decree No. 27 shall be allowed to keep the areas originally
retained by them thereunder:[57] Provided further, That original homestead grantees or direct
compulsory heirs who still own the original homestead at the time of the approval of this Act shall
retain the same areas as long as they continue to cultivate said homestead.
xxx
Upon the effectivity of this Act, any sale, disposition, lease, management, contract or transfer of
possession of private lands executed by the original landowner in violation of this Act shall be
null and void: Provided, however, that those executed prior to this Act shall be valid only when
registered with the Register of Deeds within a period of three (3) months after the effectivity of this
Act. Thereafter, all Registers of Deeds shall inform the DAR within thirty (30) days of any transaction
involving agricultural lands in excess of five (5) hectares.
xxx
SECTION 70. Disposition of Private Agricultural Lands. The sale or disposition of agricultural lands
retained by a land owner as a consequence of Section 6 hereof shall be valid as long as the total
landholdings that shall be owned by the transferee thereof inclusive of the land to be acquired shall not
exceed the landholding ceilings provided for in this Act.
Any sale or disposition of agricultural lands after the effectivity of this Act found to be contrary
to the provisions hereof shall be null and void.
Transferees of agricultural lands shall furnish the appropriate Register of Deeds and the BARC an
affidavit attesting that his total landholdings as a result of the said acquisition do not exceed the
landholding ceiling. The Register of Deeds shall not register the transfer of any agricultural land
without the submission of his sworn statement together with proof of service of a copy thereof to the
BARC. (Emphasis and underscoring supplied)
As the above-quoted provisions of the Comprehensive Agrarian Reform Law show, only those private
lands devoted to or suitable for agriculture are covered by it.[58] As priorly related, Victor Ragay, who
was appointed by the trial court to conduct an ocular inspection of the property, observed in his report
that only three (3) to four (4) hectares were planted with sugarcane while the rest of the property was
not suitable for planting as the soil was full of limestone.[59] He also remarked that the sugarcanes were
only 3 feet in height and very lean,[60] whereas sugarcanes usually grow to a height of 3 to 6 meters
(about 8 to 20 feet) and have stems 2 to 5 centimeters (1-2 inches) thick.[61]
It is thus gathered that the property was not suitable for agricultural purposes. In any event, since the
area devoted to the planting of sugarcane, hence, suitable for agricultural purposes, comprises only 4
hectares at the most, it is less than the maximum retention limit prescribed by law. There was then no
violation of the Comprehensive Agrarian Reform Law.
Even assuming that the disposition of the property by Villaner was contrary to law, he would still have
no remedy under the law as he and Leonardo were in pari delicto, hence, he is not entitled to afirmative
relief one who seeks equity and justice must come to court with clean hands. In pari delicto potior est
conditio defendentis.[62]
The proposition is universal that no action arises, in equity or at law, from an illegal contract; no
suit can be maintained for its specific performance, or to recover the property agreed to be sold
or delivered, or the money agreed to be paid, or damages for its violation. The rule has sometimes
been laid down as though it were equally universal, that where the parties are in pari delicto, no
affirmative relief of any kind will be given to one against the other.[63] (Emphasis and underscoring
supplied)
The principle of pari delicto is grounded on two premises: first, that courts should not lend their good
offices to mediating disputes among wrongdoers;[64] and second, that denying judicial relief to an
admitted wrongdoer is an effective means of deterring illegality.[65] This doctrine of ancient vintage is
not a principle of justice but one of policy as articulated in 1775 by Lord Mansfield in Holman v.
Johnson:[66]
The objection, that a contract is immoral or illegal as between the plaintiff and defendant, sounds at all
times very ill in the mouth of the defendant. It is not for his sake, however, that the objection is ever
allowed; but it is founded in general principles of policy, which the defendant has the advantage of,
contrary to the real justice, as between him and the plaintiff, by accident, if I may so say. The principle
of public policy is this; ex dolo malo non oritur actio.[67] No court will lend its aid to a man who founds
his cause of action upon an immoral or an illegal act. If, from the plaintiffs own stating or otherwise,
the cause of action appears to arise ex turpi causa,[68] or the transgression of a positive law of this
country, there the court says he has no right to be assisted. It is upon that ground the court goes; not for
the sake of the defendant, but because they will not lend their aid to such a plaintiff. So if the plaintiff
and the defendant were to change sides, and the defendant was to bring his action against the plaintiff,
the latter would then have the advantage of it; for where both are equally in fault potior est conditio
defendentis.[69]
Thus, to serve as both a sanction and as a deterrent, the law will not aid either party to an illegal
agreement and will leave them where it finds them.
The principle of pari delicto, however, is not absolute, admitting an exception under Article 1416 of the
Civil Code.
ART. 1416. When the agreement is not illegal per se but is merely prohibited, and the prohibition by
the law is designed for the protection of the plaintiff, he may, if public policy is thereby enhanced,
recover what he has paid or delivered.
Under this article, recovery for what has been paid or delivered pursuant to an inexistent contract is
allowed only when the following requisites are met: (1) the contract is not illegal per se but merely
prohibited; (2) the prohibition is for the protection of the plaintiffs; and (3) if public policy is enhanced
thereby.[70] The exception is unavailing in the instant case, however, since the prohibition is clearly not
for the protection of the plaintiff-landowner but for the beneficiary farmers.[71]
In fine, Villaner is estopped from assailing and annulling his own deliberate acts.[72]
More. Villaner cannot feign ignorance of the law, nor claim that he acted in good faith, let alone assert
that he is less guilty than Leonardo. Under Article 3 of the Civil Code, ignorance of the law excuses no
one from compliance therewith.
And now, Villaners co-heirs claim that as co-owners of the property, the Deed of Absolute Sale
executed by Villaner in favor of Leonardo does not bind them as they did not consent to such an
undertaking. There is no question that the property is conjugal. Article 160 of the Civil Code[73]
provides:
ART. 160. All property of the marriage is presumed to belong to the conjugal partnership, unless it be
proved that it pertains exclusively to the husband or to the wife.[74]
The presumption, this Court has held, applies to all properties acquired during marriage. For the
presumption to be invoked, therefore, the property must be shown to have been acquired during the
marriage.[75]
In the case at bar, the property was acquired on July 6, 1971 during Villaners marriage with Justiniana
Lipajan. It cannot be seriously contended that simply because the tax declarations covering the property
was solely in the name of Villaner it is his personal and exclusive property.
In Bucoy v. Paulino[76] and Mendoza v. Reyes[77] which both apply by analogy, this Court held that
registration alone of the properties in the name of the husband does not destroy the conjugal nature of
the properties.[78] What is material is the time when the land was acquired by Villaner, and that was
during the lawful existence of his marriage to Justiniana.
Since the property was acquired during the existence of the marriage of Villaner and Justiniana, the
presumption under Article 160 of the Civil Code is that it is the couples conjugal property. The burden
is on petitioners then to prove that it is not. This they failed to do.
The property being conjugal, upon the death of Justiniana Lipajan, the conjugal partnership was
terminated.[79] With the dissolution of the conjugal partnership, Villaners interest in the conjugal
partnership became actual and vested with respect to an undivided one-half portion.[80] Justiniana's
rights to the other half, in turn, vested upon her death to her heirs[81] including Villaner who is entitled
to the same share as that of each of their eight legitimate children.[82] As a result then of the death of
Justiniana, a regime of co-ownership arose between Villaner and his co-heirs in relation to the property.
[83]
With respect to Justinianas one-half share in the conjugal partnership which her heirs inherited,
applying the provisions on the law of succession, her eight children and Villaner each receives one-
ninth (1/9) thereof. Having inherited one-ninth (1/9) of his wifes share in the conjugal partnership or
one eighteenth (1/18)[84] of the entire conjugal partnership and is himself already the owner of one half
(1/2) or nine-eighteenths (9/18), Villaners total interest amounts to ten-eighteenths (10/18) or five-
ninths (5/9).
While Villaner owns five-ninths (5/9) of the disputed property, he could not claim title to any definite
portion of the community property until its actual partition by agreement or judicial decree. Prior to
partition, all that he has is an ideal or abstract quota or proportionate share in the property.[85] Villaner,
however, as a co-owner of the property has the right to sell his undivided share thereof. The Civil Code
provides so:
ART. 493. Each co-owner shall have the full ownership of his part and of the fruits and benefits
pertaining thereto, and he may therefore alienate, assign or mortgage it, and even substitute another
person in its enjoyment, except when personal rights are involved. But the effect of the alienation or the
mortgage, with respect to the co-owners, shall be limited to the portion which may be allotted to him in
the division upon the termination of the co-ownership.
Thus, every co-owner has absolute ownership of his undivided interest in the co-owned property and is
free to alienate, assign or mortgage his interest except as to purely personal rights. While a co-owner
has the right to freely sell and dispose of his undivided interest, nevertheless, as a co-owner, he cannot
alienate the shares of his other co-owners nemo dat qui non habet.[86]
Villaner, however, sold the entire property without obtaining the consent of the other co-owners.
Following the well-established principle that the binding force of a contract must be recognized as far
as it is legally possible to do so quando res non valet ut ago, valeat quantum valere potest[87] the
disposition affects only Villaners share pro indiviso, and the transferee gets only what corresponds to
his grantors share in the partition of the property owned in common.[88]
As early as 1923, this Court has ruled 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 affects only his
undivided share and the transferee gets only what would correspond to this grantor in the partition of
the thing owned in common. Consequently, by virtue of the sales made by Rosalia and Gaudencio
Bailon which are valid with respect to their proportionate shares, and the subsequent transfers which
culminated in the sale to private respondent Celestino Afable, the said Afable thereby became a co-
owner of the disputed parcel of land as correctly held by the lower court since the sales produced the
effect of substituting the buyers in the enjoyment thereof.
From the foregoing, it may be deduced that since a co-owner is entitled to sell his undivided share, a
sale of the entire property by one co-owner without the consent of the other co-owners is not null and
void. However, only the rights of the co-owner-seller are transferred., thereby making the buyer a co-
owner of the property.
The proper action in cases like this is not for the nullification of the sale or the recovery of possession
of the thing owned in common from the third person who substituted the co-owner or co-owners who
alienated their shares, but the DIVISION of the common property as if it continued to remain in the
possession of the co-owners who possessed and administered it.[89]
Thus, it is now settled that the appropriate recourse of co-owners in cases where their consent were not
secured in a sale of the entire property as well as in a sale merely of the undivided shares of some of the
co-owners is an action for PARTITION under Rule 69 of the Revised Rules of Court. Neither recovery
of possession nor restitution can be granted since the defendant buyers are legitimate proprietors and
possessors in joint ownership of the common property claimed.[90] (Italics in the original; citations
omitted; underscoring supplied)
This Court is not unmindful of its ruling in Cruz v. Leis[91] where it held:
It is conceded that, as a rule, a co-owner such as Gertrudes could only dispose of her share in the
property owned in common. Article 493 of the Civil Code provides:
xxx
Unfortunately for private respondents, however, the property was registered in TCT No. 43100 solely
in the name of Gertrudes Isidro, widow. Where a parcel of land, forming part of the undistributed
properties of the dissolved conjugal partnership of gains, is sold by a widow to a purchaser who merely
relied on the face of the certificate of title thereto, issued solely in the name of the widow, the purchaser
acquires a valid title to the land even as against the heirs of the deceased spouse. The rationale for this
rule is that a person dealing with registered land is not required to go behind the register to determine
the condition of the property. He is only charged with notice of the burdens on the property which are
noted on the face of the register or the certificate of title. To require him to do more is to defeat one of
the primary objects of the Torrens system.[92] (Citation omitted)
Cruz, however, is not applicable for the simple reason that in the case at bar the property in dispute is
unregistered. The issue of good faith or bad faith of a buyer is relevant only where the subject of the
sale is a registered land but not where the property is an unregistered land.[93] One who purchases an
unregistered land does so at his peril.[94] Nicolas claim of having bought the land in good faith is thus
irrelevant.[95]
WHEREFORE, the petition is GRANTED. The Court of Appeals February 15, 2001 Decision in CA-
G.R. CV No. 56148 is REVERSED and SET ASIDE and another is rendered declaring the sale in favor
of petitioner Leonardo Acabal and the subsequent sale in favor of petitioner Ramon Nicolas valid but
only insofar as five-ninths (5/9) of the subject property is concerned.
SO ORDERED.
Panganiban, (Chairman), Sandoval-Gutierrez, Corona, and Garcia, JJ., concur.
[1] Court of Appeals (CA) Rollo at 58-65.

[2] Records Vol. I at 224-227.
[3] Exhibits C and 1.
[4] Exhibit H.
[5] Exhibit F.
The Deed of Absolute Sale states that at the time the contract was entered into respondent Villaner
[6]
Acabal was married to Justiniana Li

Prop PPP

Transféré par

Informations du document

Titre original

Copyright

Formats disponibles

Partager ce document

Partager ou intégrer le document

Options de partage

Avez-vous trouvé ce document utile ?

Ce contenu est-il inapproprié ?

Droits d'auteur :

Formats disponibles

Prop PPP

Transféré par

Droits d'auteur :

Formats disponibles

FIRST DIVISION

[G.R. No. 120961. October 2, 1997]

[G.R. No. 39430 : December 3, 1990.]

191 SCRA 795-805

FRANCISCO MANLAPAZ, DELFIN SANGCAP, DOMINGO SANGCAP, PEDRO CUNANAN,

2. The said lots belong to the Land Authority;

We find petitioners' present recourse devoid of merit.

Section 8, Rule 70 of the Rules of Court provides in part that:

We reject these pretensions.

As we ruled in Castro, et al. vs. Court of Appeals, et al.: 27

Melencio-Herrera, Paras, Padilla and Sarmiento, JJ., concu

First, the factual background of the case.

On 30 May 1995, Candelaria sold his property, including the improvements

On 21 May 1996, petitioners started the construction of a seven (7)-door

A verification survey was conducted by Geodetic Engineer Florentina C. Valencia.

Despite the delineation of said boundaries, petitioners proceeded with the

On 14 April 1997, respondents filed an ejectment case against petitioners before

The complaint in the instant case establishes jurisdictional facts necessary to

On 5 July 2001, the Court of Appeals issued a Resolution[16] denying petitioners

Respondents counter that the jurisdictional elements necessary to maintain an

It is settled that jurisdiction of the court in ejectment cases is determined by the

The Complaint[21] filed by respondents (plaintiffs therein) alleged these material

Moreover, there is a presumption that official duty is regularly performed,[31] i.e.,

Even prescinding from the presumption of regularity, what appears on

G.R. No. L-22006 July 28, 1975

BASILIO PEREZ and PETRA MONTALBO, petitioners,

Pedro T. Panganiban for petitioners.

Julio D. Enriquez, Sr. for respondents.

MUNOZ PALMA, J.:

Mr. Panganiban: (Counsel of petitioners)

Castro (Chairman), Makasiar, Esguerra and Martin, JJ., concur.

Teehankee, J., is on leave.

Republic of the Philippines

G.R. No. L-21231 July 30, 1975

CONCORDIA LALUAN, et al., petitioners,

Primicias, Regino and Macaraeg for petitioners.

Saturnino D. Bautista for respondents.

and the owners pro indiviso of one-half of

Makasiar, Esguerra, Muñoz Palma and Martin, JJ., concur.

Teehankee, J., is on leave.

[G.R. No. 91869. October 19, 1992.]

Alfonso P. Briones for Petitioner.

Escolastico A. Deloria, Sr. for Private Respondents.

1. REMEDIAL LAW; CIVIL PROCEDURE; BURDEN OF PROOF; PREPONDERANCE OF

2. ID.; ID.; PLEADINGS; GENUINENESS AND DUE EXECUTION OF THE DOCUMENT;

3. CIVIL CODE; ACQUISITIVE PRESCRIPTION; REQUIREMENTS THEREOF; CASE AT BAR.

4. ID.; EXTINCTIVE PRESCRIPTION; 30-YEAR PRESCRIPTIVE PERIOD FOR REAL ACTIONS;

5. REMEDIAL LAW; APPEALS; FINDINGS OF FACT OF THE TRIAL COURT GENERALLY

"ATTY. BRIONES: chanrob1es virtual 1aw library

WITNESS: chanrob1es virtual 1aw library

A. 778 square meters.

A Three-fourths for the four of us.

Q How about . . . What happened to that share of Maria Ohoy?

A It was sold to me and with my brother Roberto.

A Yes, sir." cral aw virtua1aw library

Padilla and Medialdea, JJ., are on leave.

VELASCO, JR., and

CARPIO MORALES, J.:

Respondents rejected petitioners valuation. Thus, pursuant to Section 16(d) of RA 6657,

Petitioners position impresses.

The pertinent portions of Item II of DAR AO 6-92, as amended by DAR AO 11-94,

Parenthetically, Commissioner Empleo testified[33] that his computations were based on

CONCHITA CARPIO MORALES