1. [G.R. No. 123509. March 14, 2000] 2.
2. Ordering the defendant spouses Vergel Santos and Ruth Santos to deliver
LUCIO ROBLES, EMETERIA ROBLES, ALUDIA ROBLES and EMILIO
ROBLES, petitioners, vs. COURT OF APPEALS, Spouses VIRGILIO
SANTOS and BABY RUTH CRUZ, RURAL BANK OF CARDONA, Inc.,
HILARIO ROBLES, ALBERTO PALAD JR. in his capacity as Director of
Lands, and JOSE MAULEON in his capacity as District Land Officer of
the Bureau Of Lands, respondents.
DECISION
PANGANIBAN, J.:
To be entitled to the remedy of quieting of title, petitioners must show that
they have title to the real property at issue, and that some deed or
proceeding beclouds its validity or efficacy. Buyers of unregistered real
property, especially banks, must exert due diligence in ascertaining the titles
of mortgagors and sellers, lest some innocent parties be prejudiced. Failure
to observe such diligence may amount to bad faith and may result in the
nullity of the mortgage, as well as of the subsequent foreclosure and/or
auction sale. Unless the co-ownership is clearly repudiated, a co-owner
cannot, by prescription, acquire title to the shares of the other co-
owners. Mesm
The Case
Before us is a Petition for Review under Rule 45, assailing the June 15, 1995
Decision and the January 15, 1996 Resolution of the Court of Appeals[1] (CA)
in CA-GR CV No. 34213.[2] In its Decision, the CA ruled:[3]
"WHEREFORE, the trial courts June 17, 1991 decision is
REVERSED and SET ASIDE, and in lieu thereof a new one
is hereby entered ordering the dismissal of the plaintiffs-
appellees['] second amended complaint."
Earlier, the trial court had disposed as follows: Spped jo
"WHEREFORE, premises considered, judgment is hereby
rendered as follows:
1. Declaring free patent Title No. IV-1-010021 issued by the Bureau of Lands
as null and void;
the property subject of this case to the plaintiff; and
3. Declaring the heirs of Silvino Robles as the absolute owner of the land in
controversy."
The January 15, 1996 CA Resolution denied petitioners' Motion for
Reconsideration.
The Facts
The present Petition is rooted in a case for quieting of title before the
Regional Trial Court of Morong, Rizal, filed on March 14, 1988,[4] by
Petitioners Lucio Robles, Emeteria Robles, Aludia Robles and Emilio Robles.
The facts were narrated by the trial court in this wise:
"There seems to be no dispute that Leon Robles primitively owned the land
situated in Kay Taga, Lagundi, Morong, Rizal with an area of 9,985 square
meters. He occupied the same openly and adversely. He also declared the
same in his name for taxation purposes as early as 1916 covered by Tax
Declaration No. 17865 (Exh. "I") and paid the corresponding taxes thereon
(Exh. "B"). When Leon Robles died, his son Silvino Robles inherited the land,
who took possession of the land, declared it in his name for taxation
purposes and paid the taxes thereon. Rtc-spped
"Upon the death of Silvino Robles in 1942, his widow Maria de la Cruz and
his children inherited the property. They took adverse possession of said
property and paid taxes thereon. The task of cultivat[ing] the land was
assigned to plaintiff Lucio Robles who planted trees and other crops. He also
built a nipa hut on the land. The plaintiffs entrusted the payment of the land
taxes to their co-heir and half-brother, Hilario Robles.
"In 1962, for unknown reasons, the tax declaration of the parcel of land in the
name of Silvino Robles was canceled and transferred to one Exequiel
Ballena (Exh. "19"), father of Andrea Robles who is the wife of defendant
Hilario Robles. Thereafter, Exequiel Ballena secured a loan from the Antipolo
Rural Bank, using the tax declaration as security. Somehow, the tax
declaration was transferred [to] the name of Antipolo Rural Bank (Exh. "17")
and later on, was transferred [to] the name of defendant Hilario Robles and
his wife (Exh. "16"). Calrky
"In 1996, Andrea Robles secured a loan from the Cardona Rural Bank, Inc.,
using the tax declaration as security. Andrea Robles testified without
contradiction that somebody else, not her husband Hilario Robles, signed the
loan papers because Hilario Robles was working in Marinduque at that time
as a carpenter.
"For failure to pay the mortgage debt, foreclosure proceedings were had and
defendant Rural Bank emerged as the highest bidder during the auction sale
in October 1968.
"The spouses Hilario Robles failed to redeem the property and so the tax
declaration was transferred in the name of defendant Rural Bank. On
September 25, 1987, defendant Rural Bank sold the same to the Spouses
Vergel Santos and Ruth Santos. Jo spped
"In September 1987, plaintiff discovered the mortgage and attempted to
redeem the property, but was unsuccessful. On May 10,1988, defendant
spouses Santos took possession of the property in question and was able to
secure Free Patent No. IV-1-010021 in their names."[5]
On the other hand, the Court of Appeals summarized the facts of the case as
follows:
"The instant action for quieting of title concerns the parcel of land bounded
and more particularly described as follows: Sd-aad-sc
"A parcel of land located at Kay Taga, Lagundi, Morong, Rizal. Bounded [i]n
the north by the property of Venancio Ablay y Simeon Ablay; [i]n the east by
the property of Veronica Tulak y Dionisio Ablay; [i]n the south by the property
of Simeon Ablay y Dionisio Ablay; and [i]n the west by the property of
Dionisio Ablay y Simeon Ablay, with an area of 9,985 square meters, more or
less, assessed in the year 1935 at P60.00 under Tax Declaration No. 23219.
"As the heirs of Silvino Robles who, likewise inherited the above-described
parcel from Leon Robles, the siblings Lucio, Emeteria, Aludia and Emilio, all
surnamed Robles, commenced the instant suit with the filing of their March
14, 1988 complaint against Spouses Virgilio and Ruth Santos, as well as the
Rural Bank of Cardona, Inc. Contending that they had been in possession of
the land since 1942, the plaintiff alleged, among other matters, that it was
only in September of 1987 that they came to know of the foreclosure of the
real estate mortgage constituted thereon by the half-brother, Hilario Robles,
in favor of defendant Rural Bank; and that they likewise learned upon further
inquiry, that the latter had already sold the self-same parcel in favor of the
Santos spouses (pp. 1-3, orig. rec.). Twice amended to implead Hilario
Robles (pp. 76-80, orig. rec) and, upon subsequent discovery of the issuance
of Free Patent No. IV-I-010021 in favor of the defendant spouses, the
Director of Lands and the District Land Officer of the Bureau of Lands as
parties-defendants (pp. 117-121, orig. rec). The plaintiffs complaint sought
the following reliefs on the theory that the encumbrance of their half-brother,
constituted on the land, as well as all proceedings taken subsequent thereto,
were null and void, to wit:
"Wherefore, it is respectfully prayed that (a) a preliminary mandatory
injunction be issued forthwith restoring plaintiffs to their possession of said
parcel of land; (b) an order be issued annulling said Free Patent No. IV-I-
010021 in the name of defendants spouses Vergel Santos and Ruth C.
Santos, the deed of sale aforementioned and any tax declaration which have
been issued in the name of defendants; and (c) ordering defendants jointly
and severally, to pay plaintiffs the sum of P10,000.00 as attorneys fees.
"Plaintiffs pray for other relief as [may be] just and equitable under the
premises." (pp. 120-121, orig. rec.)
xxxxxxxxx
"With the termination of the pre-trial stage upon the parties-litigants
agreement (p. 203, orig. rec.) the trial court proceeded to try the case on the
merits. It thereafter rendered the challenged June 17, 1991 decision upon the
following findings and conclusions:
"The real estate mortgage allegedly executed by Hilario Robles is not valid
because his signature in the mortgage deed was forged. This fact, which
remains unrebutted, was admitted by Andrea Robles.
"Inasmuch as the real estate mortgage executed allegedly by Hilario Robles
in favor of the defendant Cardona Rural Bank, Inc. was not valid, it stands to
reason that the foreclosure proceedings therein were likewise not valid.
Therefore, the defendant bank did not acquire any right arising out of the
foreclosure proceedings. Consequently, defendant bank could not have
transferred any right to the spouses Santos.
"The fact that the land was covered by a free patent will not help the
defendant Santos any.
"There can be no question that the subject [property was held] in the concept
of owner by Leon Robles since 1916. Likewise, his successor-in-interest,
Silvino Robles, his wife Maria de la Cruz and the plaintiffs occupied the
property openly, continuously and exclusively until they were ousted from
their possession in 1988 by the spouses Vergel and Ruth Santos.
"Under the circumstances, therefore, and considering that "open, exclusive
and undisputed possession of alienable public lands for the period prescribed
by law (30 years), creates the legal fiction whereby the land, upon completion
of the requisite period, ipso jure and without the need of judicial or other
action, ceases to be public land and becomes private property. Possession
of public land x x x which is [of] the character and duration prescribed by the
statute is the equivalent of an express grant from the State, considering the
dictum of the statute itself[:]; "The possessor x x x shall be conclusively
presumed to have performed all the conditions essential to a government
grant and shall be entitled to a certificate of title x x x." No proof is admissible
to overcome a conclusive presumption[,] and confirmation proceedings would
be a little more than a formality, at the most limited to ascertaining whether
the possession claimed is of the required character and length of time.
Registration thereunder would not confer title, but simply recognize a title
already vested. (Cruz v. IAC, G.R. No. 75042, November 29, 1988) The land
in question has become private land.
"Consequently, the issuance of [a] free patent title to the Spouses Vergel
Santos and Ruth C. Santos is not valid because at the time the property
subject of this case was already private land, the Bureau of Lands having no
jurisdiction to dispose of the same." (pp. 257-259, orig. rec.)"
"Dissatisfied with the foregoing decision, the Santos spouses and the
defendant Rural Bank jointly filed their July 6, 1991 Notice of Appeal (p.260,
orig. rec.) x x x."[6]
Ruling of the Court of Appeals
In reversing the trial court, the Court of Appeals held that petitioners no
longer had any title to the subject property at the time they instituted the
Complaint for quieting of title. The CA ratiocinated as follows: Mis spped
"As correctly urged by the appellants, the plaintiff-appellees no longer had
any title to the property at the time of the institution of the instant complaint.
(pp. 25-27, rec.) The latters claim of continuous possession notwithstanding
(pp. 3-5, TSN, July 5, 1990; p. 12, TSN, July 12, 1990), the aforesaid loss of
title is amply evidenced by the subsequent declaration of the subject realty
for taxation purposes not only in the name of Exequiel Ballena (Exhibits "1"
and "2", pp. 23-24, orig. rec.) but also in the name of the Rural Bank of
Antipolo (Exhibit 17, vol. II, orig. rec.). On the theory that tax declarations can
be evincive of the transfer of a parcel of land or a portion thereof (Gacos v.
Court of Appeals, 212 SCRA 214), the court a quo clearly erred in simply
brushing aside the apparent transfers [which] the land in litigation had
undergone. Whether legal or equitable, it cannot, under the circumstances,
be gainsaid that the plaintiff-appellees no longer had any title to speak of
when Exequiel Ballena executed the November 7, 1966 Deed of Absolute
Sale transferring the land in favor of the spouses Hilario and Andrea Robles
(Exhibit "3", p. 25, orig. rec.)
"Even on the theory that the plaintiffs-appellees and their half-brother, Hilario
Robles, are co-owners of the land left behind by their common father, Silvino
Robles, such title would still be effectively discounted by what could well
serve as the latters acts of repudiation of the co-ownership, i.e., his
possession (p. 22, TSN, November 15, 1990) and declaration thereof for
taxation purposes in his own name (Exhibit "4", p. 26, orig. rec.). In view of
the plaintiffs-appellees inaction for more than twenty (20) years from the time
the subject realty was transferred in favor of Hilario Robles, the appellants
correctly maintain that prescription had already set in. While it may be readily
conceded that an action to quiet title to property in the possession of the
plaintiff is imprescriptible (Almanza vs. Arguelles, 156 SCRA 718; Coronel vs.
Intermediate Appellate Court, 155 SCRA 270; Caragay-Layno vs. Court of
Appeals, 133 SCRA 718; Charon Enterprises vs. Court of Appeals, 124
SCRA 784; Faja vs. Court of Appeals, 75 SCRA 441; Burton vs. Gabar, 55
SCRA 4999), it equally bears emphasis that a co-owner or, for that matter,
the said co-owner[']s successors-in-interest who occupy the community
property other than as co-owner[s] can claim prescription as against the
other co-owners (De Guzman vs. Austria, 148 SCRA 75; Ramos vs. Ramos,
45 Phil. 362; Africa vs. Africa, 42 Phil. 902; Bargayo vs. Camumot, 40 Phil.
857; De Castro vs. Echarri, 20 Phil. 23). If only in this latter sense, the
appellants correctly argue that the plaintiffs-appellees have lost their cause of
action by prescription.
"Over and above the foregoing considerations, the court a quo gravely erred
in invalidating the real estate mortgage constituted on the land solely on the
basis of Andrea Robles testimony that her husbands signature thereon was
forged (p. 257, orig. rec.),
xxx xxx xxx
"In according to the foregoing testimony x x x credibility which, while
admittedly unrebutted, was altogether uncorroborated, the trial court lost
sight of the fact that the assailed deed of real estate mortgage (Exhibit "5",
Vol. II, orig. rec.) is a public document, the acknowledgment of which is
a prima facie evidence of its due execution (Chua vs. Court of Appeals, 206
SCRA 339). As such, it retains the presumption of validity in the absence of a
full, clear and convincing evidence to overcome such presumption (Agdeppa
vs. Ibe, 220 SCRA 584). Maniks
"The foregoing principles take even more greater [sic] when it is, moreover,
borne in mind that Hilario Robles made the following admissions in his March
8, 1989 answer, viz:
"3. The complaint filed against herein answering defendant has no legal
basis considering that as the lawful owner of the subject real property,
defendant Hilario Robles has the right to mortgage the said real property and
could dispose the same in whatever manner he wishe[s] to do." (p. 96, orig.
rec.)
"Appropriately underscored by the appellants, the foregoing admission is
binding against Hilario [Robles]. Judicial admissions, verbal or written, made
by the parties in the pleadings or in the course of the trial or other
proceedings in the same case are conclusive, no evidence being required to
prove the same. They cannot be contradicted unless shown to have been
made through [a] palpable mistake or [unless] no such admission was
actually made (Philippine American General Insurance, Inc. vs. Sweet Lines,
Inc., 212 SCRA 194).
"It does not help the plaintiffs-appellees cause any that, aside from complying
with the requirements for the foreclosure of the subject real estate mortgage
(Exhibits "6", "7", "8" and "10", Volume II[)], the appellant Rural Bank had not
only relented to the mortgagors request to postpone the (Exhibit "g", Vol. II,
orig. rec.) but had likewise granted the latters request for an extension of the
redemption period therefor (Exhibits "11" and "12", pp. 35-36, orig. rec.).
Without going into minute detail in discussing the Santos spouses rights as
purchasers for value and in good faith (Exhibit "21", Vol. II, orig. rec.), the
mortgagor and the plaintiffs-appellees cannot now be heard to challenge the
validity of the sale of the land after admittedly failing to redeem the same
within the extension the appellant Rural Bank granted (pp. 10-11, TSN,
November 15, 1990).
"Being dependent on the supposed invalidity of the constitution and
foreclosure of the subject real estate mortgage, the plaintiffs-appellees attack
upon x x x Free Patent No. IV-I must necessarily fail. The trial court,
therefore, misread, and ignored the evidence o[n] record, to come up with
erroneous conclusion." Manikx
Contending that such ruling was contrary to law and jurisprudence,
Petitioners Lucio, Emeteria, Aludia and Emilio -- all surnamed Robles -- filed
this Petition for Review.[7]
The Assigned Error
Petitioners ascribe the following error to the respondent court:
"Respondent Court of Appeals grievously erred in ruling that with the
transfers of the tax declaration over the parcel of land in question from
Silvino Robles to Exequiel Ballena, then to the Rural Bank of Antipolo, then
to Respondent Hilario Robles, then to Respondent Rural Bank of Cardona
Inc., and then finally to Respondent Spouses Santos, petitioners, who by
themselves and their predecessors in interest have been in open, actual and
adverse possession of said parcel of land since 1916 up to their forced
removal therefrom in 1988, have lost their title to said property by
prescription to their half-brother, Respondent Hilario Robles, and then finally,
to Respondent Spouses Santos."[8]
For a better understanding of the case, the above issue will be broken down
into three points: first, the nature of the remedy of quieting of title; second,
the validity of the real estate mortgage; and third, the efficacy of the free
patent granted to the Santos spouses. Spped
First Issue: Quieting of Title
Article 476 of the Civil Code provides:
"Whenever there is cloud on title to real property or any interest therein, by
reason of any instrument, record, claim, encumbrance or proceeding which is
apparently valid or effective but is in truth and in fact invalid, ineffective,
voidable or unenforceable, and may be prejudicial to said title, an action may
be brought to remove such cloud or to quiet title.
"An action may also be brought to prevent a cloud from being cast upon title
to real property or any interest therein."
Based on the above definition, an action to quiet title is a common-law
remedy for the removal of any cloud or doubt or uncertainty on the title to real
property.[9] It is essential for the plaintiff or complainant to have a legal or an
equitable title to or interest in the real property which is the subject matter of
the action.[10] Also, the deed, claim, encumbrance or proceeding that is being
alleged as a cloud on plaintiffs title must be shown to be in fact invalid or
inoperative despite its prima facie appearance of validity or legal efficacy.[11]
That there is an instrument or a document which, on its face, is valid and
efficacious is clear in the present case. Petitioners allege that their title as
owners and possessors of the disputed property is clouded by the tax
declaration and, subsequently, the free patent thereto granted to Spouses
Vergel and Ruth Santos. The more important question to be resolved,
however, is whether the petitioners have the appropriate title that will entitle
them to avail themselves of the remedy of quieting of title. Nexold
Petitioners anchor their claim to the disputed property on their continued and
open occupation and possession as owners thereof. They allege that they
inherited it from their father, Silvino, who in turn had inherited it from his
father, Leon. They maintain that after their fathers death, they agreed among
themselves that Petitioner Lucio Robles would be tending and cultivating it
for everyone, and that their half-brother Hilario would be paying the land
taxes.
Petitioners insist that they were not aware that from 1962 until 1987, the
subject property had been declared in the names of Exequiel Ballena, the
Rural Bank of Antipolo, Hilario Robles, the Rural Bank of Cardona, Inc., and
finally, Spouses Vergel and Ruth Santos. Maintaining that as co-owners of
the subject property, they did not agree to the real estate mortgage
constituted on it, petitioners insist that their shares therein should not have
been prejudiced by Hilarios actions. Miso
On the other hand, Private Respondents Vergel and Ruth Santos trace their
claim to the subject property to Exequiel Ballena, who had purportedly sold it
to Hilario and Andrea Robles. According to private respondents, the Robles
spouses then mortgaged it to the Rural Bank of Cardona, Inc. -- not as co-
owners but as absolute owners -- in order to secure an agricultural loan
worth P2,000. Upon their failure to pay their indebtedness, the mortgage was
foreclosed and the property sold to the bank as the highest bidder.
Thereafter, private respondents purchased the property from the
bank. Sppedjo
Undisputed is the fact that the land had previously been occupied by Leon
and later by Silvino Robles, petitioners predecessors-in-interest, as
evidenced by the different tax declarations issued in their names. Also
undisputed is the fact that the petitioners continued occupying and
possessing the land from the death of Silvino in 1942 until they were
allegedly ousted therefrom in 1988. In 1962, the subject property was
declared in the name of Exequiel for taxation purposes. On September 30,
1965, it was again declared in the same name; on October 28, 1965, in the
name of the Rural Bank of Antipolo; on November 7, 1966, in the name of
Hilario and Andrea; and thereafter, in the name of the Rural Bank of Cardona
and, finally, in the name of the Santos spouses.
Ostensibly, the Court of Appeals failed to consider irregularities in the
transactions involving the disputed property. First, while it was declared in
the name of Exequiel in 1962, there was no instrument or deed of
conveyance evidencing its transfer from the heirs of Silvino to him. This fact
is important, considering that the petitioners are alleging continued
possession of the property. Second, Exequiel was the father-in-law of Hilario,
to whom petitioners had entrusted the payment of the land
taxes. Third, considering that the subject property had been mortgaged by
Exequiel to the Rural Bank of Antipolo, and that it was foreclosed and in fact
declared in the banks name in 1965, why was he able to sell it to Spouses
Hilario and Andrea in 1966? Lastly, inasmuch as it was
an unregistered parcel of land, the Rural Bank of Cardona, Inc., did not
observe due diligence in determining Hilarios title thereto. Jospped
The failure to show the indubitable title of Exequiel to the property in question
is vital to the resolution of the present Petition. It was from him that Hilario
had allegedly derived his title thereto as owner, an allegation which thereby
enabled him to mortgage it to the Rural Bank of Cardona. The occupation
and the possession thereof by the petitioners and their predecessors-in-
interest until 1962 was not disputed, and Exequiels acquisition of the said
property by prescription was not alleged. Thus, the deed of conveyance
purportedly evidencing the transfer of ownership and possession from the
heirs of Silvino to Exequiel should have been presented as the best proof of
that transfer. No such document was presented, however. Scmis
Therefore, there is merit to the contention of the petitioners that Hilario
mortgaged the disputed property to the Rural Bank of Cardona in his
capacity as a mere co-owner thereof. Clearly, the said transaction did not
divest them of title to the property at the time of the institution of the
Complaint for quieting of title.
Contrary to the disquisition of the Court of Appeals, Hilario effected no clear
and evident repudiation of the co-ownership. It is a fundamental principle that
a co-owner cannot acquire by prescription the share of the other co-
owners, absent any clear repudiation of the co-ownership. In order that the
title may prescribe in favor of a co-owner, the following requisites must
concur: (1) the co-owner has performed unequivocal acts of repudiation
amounting to an ouster of the other co-owners; (2) such positive acts of
repudiation have been made known to the other co-owners; and (3) the
evidence thereof is clear and convincing.[12]
In the present case, Hilario did not have possession of the subject property;
neither did he exclude the petitioners from the use and the enjoyment thereof,
as they had indisputably shared in its fruits.[13] Likewise, his act of entering
into a mortgage contract with the bank cannot be construed to be a
repudiation of the co-ownership. As absolute owner of his undivided interest
in the land, he had the right to alienate his share, as he in fact did.[14] Neither
should his payment of land taxes in his name, as agreed upon by the co-
owners, be construed as a repudiation of the co-ownership. The assertion
that the declaration of ownership was tantamount to repudiation was belied
by the continued occupation and possession of the disputed property by the
petitioners as owners. Mis sc
Second Issue: Validity of the Real Estate Mortgage
In a real estate mortgage contract, it is essential that the mortgagor be the
absolute owner of the property to be mortgaged; otherwise, the mortgage is
void.[15] In the present case, it is apparent that Hilario Robles was not the
absolute owner of the entire subject property; and that the Rural Bank of
Cardona, Inc., in not fully ascertaining his title thereto, failed to observe due
diligence and, as such, was a mortgagee in bad faith.
First, the bank was utterly remiss in its duty to establish who the true owners
and possessors of the subject property were. It acted with precipitate haste in
approving the Robles spouses loan application, as well as the real estate
mortgage covering the disputed parcel of land.[16] Had it been more
circumspect and assiduous, it would have discovered that the said property
was in fact being occupied by the petitioners, who were tending and
cultivating it.
Second, the bank should not have relied solely on the Deed of Sale
purportedly showing that the ownership of the disputed property had been
transferred from Exequiel Ballena to the Robles spouses, or that it had
subsequently been declared in the name of Hilario. Because it was dealing
with unregistered land, and the circumstances surrounding the transaction
between Hilario and his father-in-law Exequiel were suspicious, the bank
should have exerted more effort to fully determine the title of the Robleses.
Rural Bank of Compostela v. Court of Appeals[17] invalidated a real estate
mortgage after a finding that the bank had not been in good faith. The Court
explained: "The rule that persons dealing with registered lands can rely solely
on the certificate of title does not apply to banks." In Tomas v. Tomas, the
Court held: Sc-slx
"x x x. Banks, indeed, should exercise more care and
prudence in dealing even with registered lands, than private
individuals, for their business is one affected with public
interest, keeping in trust money belonging to their depositors,
which they should guard against loss by not committing any
act of negligence which amounts to lack of good faith by
which they would be denied the protective mantle of land
registration statute, Act 496, extended only to purchasers for
value and in good faith, as well as to mortgagees of the
same character and description. x x x."[18]
Lastly, the Court likewise finds it unusual that, notwithstanding the banks
insistence that it had become the owner of the subject property and had paid
the land taxes thereon, the petitioners continued occupying it and harvesting
the fruits therefrom.[19]
Considering that Hilario can be deemed to have mortgaged the disputed
property not as absolute owner but only as a co-owner, he can be adjudged
to have disposed to the Rural Bank of Cardona, Inc., only his undivided
share therein. The said bank, being the immediate predecessor of the Santos
spouses, was a mortgagee in bad faith. Thus, justice and equity mandate the
entitlement of the Santos spouses, who merely stepped into the shoes of the
bank, only to what legally pertains to the latter -- Hilarios share in the
disputed property. Missc
Third Issue: Efficacy of Free Patent Grant
Petitioners repeatedly insist that the disputed property belongs to them
by private ownership and, as such, it could not have been awarded to the
Santos spouses by free patent. They allege that they possessed it in the
concept of owners -- openly, peacefully, publicly and continuously as early as
1916 until they were forcibly ousted therefrom in 1988. They likewise contend
that they cultivated it and harvested its fruits. Lucio Robles testified:
"xxx xxx xxx
Q By the way, why do you know this parcel of land?
A Because before my father died, he showed me all the
documents.
Q Before the death of your father, who was the owner of this
parcel of land?
A My father, sir. Spped
Q How did your father acquire this parcel of land?
A My father knew that it [was] by inheritance, sir.
Q From whom?
A From his father, Leon Robles, sir.
Q And do you know also [from] whom Leon Robles acquired
this land?
A It was inherited from his father, sir.
Q What is the nature of this parcel of land?
A Its an agricultural land, sir,
 Q Now, at the time of the death of your father, this land was
planted with what crops?
A Mango trees, santol trees, and I was the one who planted
those trees, sir.
Q When did you plant those trees?
A Before the death of my father, sir. M-issdaa
Q Now, after the death of your father, who cultivated this
parcel of land?
A I took charge of the land after the death of my father, sir.
Q Up to when?
A Up to the present, sir, after this case was already filed."[20]
The preceding claim is an assertion that the subject property is private land.
The petitioners do not concede, and the records do not show, that it was ever
an alienable land of the public domain. They allege private ownership thereof,
as evidenced by their testimonies and the tax declarations issued in the
names of their predecessors-in-interest. It must be noted that while their
claim was not corroborated by other witnesses, it was not controverted by the
other parties, either. Kycalr
Carlos Dolores insisted that the Rural Bank of Cardona, Inc., of which he was
the manager, had acquired and possessed the subject property. He did not,
however, give any reason why the petitioners had continued occupying it,
even as he admitted on the stand that he had visited it twice.[21]
In the light of their open, continuous, exclusive and notorious possession and
occupation of the land, petitioners are "deemed to have acquired, by
operation of law, a right to a grant, a government grant, without the necessity
of a certificate of title being issued."[22] The land was "segregated from the
public domain." Accordingly, the director of lands had no authority to issue a
free patent thereto in favor of another person. Verily, jurisprudence holds that
a free patent covering private land is null and void.[23]
Worth quoting is the disquisition of the Court in Agne v. Director of
Lands,[24] in which it held that a riparian owner presently in possession had a
better right over an abandoned river bed than had a registered owner by
virtue of a free patent.
"Under the provisions of Act 2874 pursuant to which the title
of private respondents predecessor-in-interest was
issued, the President of the Philippines, or his alter ego, the
Director of Lands, has no authority to grant a free patent for
land that has ceased to be a public land and has passed to
private ownership and a title so issued is null and void.The
nullity arises, not from fraud or deceit, but from the fact that
the land is not under the jurisdiction of the Bureau of Lands.
The jurisdiction of the Director of Lands is limited only to
public lands and does not cover lands publicly owned. The
purpose of the Legislature in adopting the former Public
Land Act, Act No. 2874, was and is to limit its application to
lands of the public domain, and lands held in private
ownership are not included therein and are not affected in
any manner whatsoever thereby. Land held in freehold or fee
title, or of private ownership, constitutes no part of the public
domain, and cannot possibly come within the purview of said
act 2874, inasmuch as the subject of such freehold or private
land is not embraced in any manner in the title of the Act and
the same is excluded from the provisions of the text
thereof. Kyle
"We reiterate that private ownership of land is not affected by
the issuance of the free patent over the same land because
the Public Land Act applies only to lands of the public
domain. Only public land may be disposed of by the Director
of Lands. Since as early as 1920, the land in dispute was
already under the private ownership of herein petitioners and
no longer a part of the lands of the public domain, the same
could not have been the subject matter of a free patent. The
patentee and his successors-in-interest acquired no right or
title to said land. Necessarily, Free Patent No. 23263 issued
to Herminigildo Agpoon is null and void and the subsequent
titles issued pursuant thereto cannot become final and
indefeasible. Hence we ruled in Director of Lands v. Sicsican,
et al. that if at the time the free patents were issued in 1953
the land covered therein were already private property of
another and, therefore, not part of the disposable land of the
public domain, then applicants patentees acquired no right or
title to the land.
"Now, a certificate of title fraudulently secured is null and
void ab initio if the fraud consisted in misrepresenting that
the land is part of the public domain, although it is not. As
earlier stated, the nullity arises, not from the fraud or deceit,
but from the fact that the land is not under the jurisdiction of
 the Bureau of Lands. Being null and void, the free patent
granted and the subsequent titles produce no legal effect
whatsoever. Quod nullum est, nullum producit effectum.
"A free patent which purports to convey land to which the
government did not have any title at the time of its issuance
does not vest any title in the patentee as against the true
owner. The Court has previously held that the Land
Registration Act and the Cadastral Act do not give anybody
who resorts to the provisions thereof a better title than what
he really and lawfully has. Exsm
xxx xxx xxx
"We have, therefore, to arrive at the unavoidable conclusion
that the title of herein petitioners over the land in dispute is
superior to the title of the registered owner which is a total
nullity. The long and continued possession of petitioners
under a valid claim of title cannot be defeated by the claim of
a registered owner whose title is defective from the
beginning."
The Santos spouses argue that petitioners do not have the requisite
personality to question the free patent granted them, inasmuch as "it is a
well-settled rule that actions to nullify free patents should be filed by the
Office of the Solicitor General at the behest of the Director of Lands."[25]
Private respondents reliance on this doctrine is misplaced. Indeed, the Court
held in Peltan Development, Inc. v. Court of Appeals[26] that only the solicitor
general could file an action for the cancellation of a free patent. Ruling that
the private respondents, who were applicants for a free patent, were not the
proper parties in an action to cancel the transfer certificates covering the
parcel of land that was the subject of their application, the Court ratiocinated
thus: Sl-xm-is
"The Court also holds that private respondents are not the
proper parties to initiate the present suit. The complaint,
praying as it did for the cancellation of the transfer
certificates of title of petitioners on the ground that they were
derived from a "spurious" OCT No. 4216, assailed in effect
the validity of said title. While private respondents did not
pray for the reversion of the land to the government, we
agree with the petitioners that the prayer in the complaint will
have the same result of reverting the land to the government
under the Regalian Doctrine. Gabila v. Barinaga[27] ruled that
only the government is entitled to this relief. x x x."
Because the cancellation of the free patent as prayed for by the private
respondents in Peltan would revert the property in question to the public
domain, the ultimate beneficiary would be the government, which can be
represented by the solicitor general only. Therefore, the real party-in-interest
is the government, not the private respondents.
This ruling does not, however, apply to the present case. While the private
respondents in Peltan recognized that the disputed property was part of the
public domain when they applied for free patent,[28] herein petitioners
asserted and proved private ownership over the disputed parcel of land by
virtue of their open, continued and exclusive possession thereof since
1916. Msesm
Neither does the present case call for the reversion of the disputed property
to the State. By asking for the nullification of the free patent granted to the
Santos spouses, the petitioners are claiming the property which, they
contend, rightfully belongs to them.
Indeed, the same issue was resolved by this Court in Heirs of Marciano
Nagano v. Court of Appeals.[29] In that case, the trial court dismissed a
Complaint seeking the declaration of nullity of an Original Certificate of Title
issued pursuant to a free patent, reasoning that the action should have been
instituted by the solicitor general. In reversing the trial court, the Supreme
Court held: Sl-xsc
"It is settled that a Free Patent issued over private land is
null and void, and produces no legal effect
whatsoever. Quod nullum est, nullum producit effectum.
Moreover, private respondents claim of open, peaceful,
continuous and adverse possession of the 2,250 square
meter portion since 1920, and its illegal inclusion in the Free
Patent of petitioners and in their original certificate of title,
gave private respondents a cause of action for quieting of
title which is imprescriptible." Scmis
In any event, the Office of the Solicitor General was afforded an opportunity
to express its position in these proceedings. But it manifested that it would
not file a memorandum, because "this case involves purely private
interests."[30]
The foregoing considered, we sustain the contention of petitioners that the
free patent granted to the Santos spouses is void. It is apparent that they are
claiming ownership of the disputed property on the basis of their possession
thereof in the concept of owners -- openly, peacefully, publicly, continuously
and adversely since 1916. Because they and their predecessors-in-interest
have occupied, possessed and cultivated it as owners for more than thirty
years,[31] only one conclusion can be drawn -- it has become private land and
is therefore beyond the authority of the director of lands. Misspped
Epilogue
We recognize that both the petitioners and the Santos spouses fell victim to
the dubious transaction between Spouses Hilario and Andrea Robles and the
Rural Bank of Cardona, Inc. However, justice and equity mandate that we
declare Petitioners Lucio, Emerita, Aludia and Emilio Robles to have the
requisite title essential to their suit for quieting of title. Considering the
circumstances peculiar to this complicated problem, the Court finds this
conclusion the logical and just solution. Sc
The claim that petitioners were guilty of laches in not asserting their rights as
owners of the property should be viewed in the light of the fact that they
thought their brother was paying the requisite taxes for them, and more
important, the fact that they continued cultivating it and harvesting and
gaining from its fruits.
From another viewpoint, it can even be said that it was the Rural Bank of
Cardona, Inc., which was guilty of laches because, granting that it had
acquired the subject property legally, it failed to enforce its rights as owner. It
was oblivious to the petitioners continued occupation, cultivation and
possession thereof. Considering that they had possessed the property
in good faith for more than ten years, it can even be argued that they thus
regained it by acquisitive prescription. In any case, laches is a remedy in
equity, and considering the circumstances in this case, the petitioners cannot
be held guilty of it. Jurismis
In sum, the real estate mortgage contract covering the disputed property a
contract executed between Spouses Hilario and Andrea on the one hand and
the Rural Bank of Cardona, Inc., on the other -- is hereby declared null and
void insofar as it prejudiced the shares of Petitioners Lucio, Emerita, Aludia
and Emilio Robles; it is valid as to Hilario Robles share therein.Consequently,
the sale of the subject property to the Santos spouses is valid insofar as it
pertained to his share only. Likewise declared null and void is Free Patent No.
IV-1-010021 issued by the Bureau of Lands covering the subject
property. Jjjuris
WHEREFORE, the Petition is hereby GRANTED. The assailed Decision
is REVERSED and SET ASIDE. Except as modified by the last paragraph of
this Decision, the trial courts Decision is REINSTATED. No costs.
SO ORDERED.
Melo, (Chairman), Vitug, Purisima, and Gonzaga-Reyes, JJ., concur.
2. G.R. No. L-20954 May 24, 1967
ELIAS GALLAR, plaintiff-appellee, vs.HERMENEGILDA HUSAIN, ET
AL., defendants, BONIFACIO HUSAIN, defendant-appellant.
D. E. Esmeralda for defendant-appellant.
E. B. Treñas for plaintiff-appellee.
REGALA, J.:
This is an appeal directly from the Court of First Instance.
A hectare of rice land in Cabatuan, Iloilo, is the subject of this controversy.
On January 9, 1919, Teodoro Husain, the owner, sold this land to Serapio
Chichirita for P30, reserving for himself the right to repurchase it within six
years. The deed of sale, written in Ilongo dialect, is contained in a private
instrument, the English translation of which reads:
I, Teodoro Husain, single, of legal age, native and resident of the
Municipality of Cabatuan, Province of Iloilo, Philippine islands,
because of the amount of Thirty Pesos (P30.00), Philippine currency,
that was paid to me by Serapio Chichirita, married to Florentina
Muyuela of legal age, native and resident of this Municipality of
Cabatuan, Province of Iloilo, Philippine Islands, hereby declare that I
am selling to the aforementioned vendee Serapio Chichirita, his heirs,
and the heirs of the latter, my one parcel of rice land at Barrio
Salacay of this Municipality of Cabatuan, and its descriptions are as
follows:
One parcel of rice land that has a seedling of one cavan of
palay, legal measure, bounded on the North, land of Juan
Alcayaga, on the East, land of Agapito Suero, on the South,
land of Elias Gallar and on the West, land of Juan Mina. The
said land was inherited by me from my father who is now
dead, Clemente Husain.
I also declare that we have agreed that if the vendor shall have repaid to the
vendee the aforementioned amount of P30.00 within six years from this date,
the vendee or his heirs shall execute a document of repurchase in my favor,
but if after the said term that he cannot return the aforementioned amount,
this document shall be considered absolute and irrevocably consummated
and in the meantime the vendee shall be the one to make use of the
aforementioned land in accordance with the Ley Hipotecaria.
In truth whereof, I have signed this document at Cabatuan, 9th of January,
1919.
(Sgd.) TEODORO HUSAIN
Signed in the presence of:
(sgd.) TOMAS JILOCA (sgd.) EUSEBIO JOCANO
Teodoro Husain did not redeem the land, although shortly after the execution
of the deed of sale, that is, on January 28, 1919, the vendee a retro,
Chichirita, transferred his right to Graciana Husain, sister of the vendor
a retro, in what purports to be a resale of the land. The following annotation
appears on the reverse side of the deed of pacto de retro sale:
NOTA: The amount stated above, was received by me from
Graciana Husain and on my own voluntary will as redemption
(gawad) of the same land, and because of this, I am transferring my
rights as stated above to Graciana Husain in the presence of her
husband Manuel Catalan, and in truth whereof I have signed at
Cabatuan, 28 January 1919.
Thumb marked
Serapio Chichirita
(English translation)
Graciana Husain subsequently transferred her rights to the land to appellee
Elias Gallar in exchange for one cow. The transaction is recorded in a
second note added on the reverse side of the deed of sale. The note reads.
OTRA NOTA:
The undersigned Graciana Husain, with the consent and knowledge
of her husband Manuel Catalan, has agreed with Elias Gallar that all
the rights that belongs to her, or she, Graciana Husain, is transferring
to the said Elias Gallar in accordance with that stated in the original
with the difference that this transfer is definite because it is their
agreement in exchange of one head of cow described in the
Certificate of Large Cattle existing in the Office of the Municipal
treasurer of this town. And in truth whereof, Graciana Husain signed
hereunder together with her husband Manuel Catalan.
Cabatuan, April 2, 1919.
(sgd.) MANUEL CATALAN (sgd.) GRACIANA HUSAIN
(English translation)
Possession of the land, together with the owner's duplicate of the certificate
of title of Teodoro Husain, was delivered on the same occasion to appellee
who since then has been in possession of the land.
In an affidavit dated March 6, 1928, Chichirita confirmed the "redemption" of
the land by Graciana Husain. In another affidavit of the same date, Graciana
Husain for her part confirmed having subsequently sold the land to the
appellee.1äwphï1.ñët
In 1960, appellee asked the Cadastral Court for the issuance to him of a
transfer certificate of title but the court dismissed his petition for lack of
jurisdiction. (The court, however, granted appellee's request for the
amendment of the certificate of title by changing the surname of "Osaen" to
"Husain.") He, therefore, filed this suit in the Court of Instance of Iloilo on
October 10, 1960 to compel Hermenegilda and Bonifacio Husain, as heirs of
Teodoro Husain, to execute a deed of conveyance in his favor so that he
could get a transfer certificate of title. He also asked for damages.
In their answer, Hermenegilda and Bonifacio Husain denied the sale and
contended that the agreement between their father and Serapio Chichirita
was that of a mortgage to secure a loan of P30. They claimed that the
mortgage had been discharged on January 28, 1919 when Graciana Husain
paid Teodoro Husain's debt to Chichirita. Hermenegilda and Bonifacio
Husain likewise invoked prescription to bar appellee's action and asked for
damages for the value of palay which they claimed they failed to receive on
account of appellee's refusal to return possession of the land to them.
The trial court found that after acquiring the land from Teodoro Husain,
Serapio Chichirita sold it to Graciana Husain who in turn sold it to the
appellee. Accordingly, it ordered the appellants to execute a deed of
conveyance of the land in favor of the appellee on the authority of our ruling
in Sapto v. Fabiana, G.R. No. L-11285, May 16, 1958.
From this judgment, Bonifacio Husain brought this appeal to this Court. He
contends that the land in question, which is identified as Lot No. 766 of the
Cadastral Survey of Cabatuan, Iloilo and covered by Original Certificate of
Title No. 4521 of the Register of Deeds of Iloilo, is not the same land which
Teodoro Husain sold to Serapio Chichirita on January 9,1919. According to
appellant he raised this question at the trial but the lower court passed it up
in its decision. The records on appeal do not disclose that appellant made
such a claim. About the only hint that he was questioning the identity of the
land sold by means of the deed of sale of January 9, 1919 was an objection
to a question during the direct examination of the appellee. Thus the
following appears on pages 20-21 of the transcript of notes taken on July 5,
1961;
Q — According to this Exhibit C, you bought the lot to in Exhibit A
which is Lot 766 in question, was bought, by you for one cow. Do you
know how much the worth of your cow during that time?
ATTY. ESMERALDA [for defendants]
Objection, Your Honor. The question is premised on Lot 766 but the
document does not mention Lot 766.
xxx xxx xxx
COURT
So your objection is that it lacks basis.
ATTY. ESMERALDA
It lacks basis, your Honor.
Otherwise, the records do not show any allegation made much less evidence
presented, by appellant of the supposed difference in the identity of the land
sold in the deed of pacto de retro sale and the land now in question. Indeed,
the only defense put up by appellant was that the pacto de retro sale was in
reality a mortgage and that, at any rate, appellee's action was barred by the
statute of limitations. In so doing, appellant joined issues with the appellee
and he will not now be permitted to bring up new matters on appeal as this
would constitute changing of theory — so utterly unfair to the adverse
party1 that the lower court deliberately, perhaps, ignored the point. It may be
added that an admission that the land described in the deed of sale and Lot
No. 766 are one and the same is implicit in appellant's defense that the deed
of sale did not express the true intention of the parties.
Still it is argued that no action can be brought on the basis of the deed of sale
with a right of repurchase because the land in question was redeemed a few
days after it had been sold. While it is indeed true that the first note written on
the reverse side of the deed of sale speaks of the "redemption" of the land,
there is no evidence to show that the vendee, Graciana Husain, was acting in
behalf of her brother Teodoro Husain, in the exercise the latter's right of
redemption. Now, unlike a debt which a third party may satisfy even against
the debtor's will2 the right of repurchase may be exercised only by the vendor
in whom the right is recognized by contract3 or by any person to whom the
right may have been transferred.4 Graciana Husain must, therefore, be
deemed to have acquired the land in her own right, subject only to Teodoro
Husain's right of redemption. As the new owner she had a perfect right to
dispose of the land as she in fact did when she exchanged it for a cattle with
the appellee.
Now, when Teodoro Husain failed to redeem the land within the stipulated
period, i.e., January 9, 1925, its ownership became consolidated in the
appellee. True the successive sales are in a private instrument, but they are
valid just the same.5 By the delivery of possession of the land on April 2,
1919 the sale was consummated and title was transferred to the appellee.
Indeed, this action is not for specific performance; all it seeks is to quiet
title,6 to remove the cloud cast on appellee's ownership as a result of
appellant's refusal to recognize the sale made by their predecessor. And, as
plaintiff-appellee is in possession of the land, the action is
imprescriptible.7Appellant's argument that the action has prescribed would be
correct if they were in possession as the action to quiet title would then be an
action for recovery of real property which must be brought within the statutory
period of limitation governing such actions.8
Wherefore, the decision appealed from is affirmed, with costs against
appellant.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Bengzon, J.P., Zaldivar,
Sanchez and Castro, JJ., concur.
3. G.R. No. L-20449 January 29, 1968
ESPERANZA FABIAN, BENITA FABIAN and DAMASO PAPA Y
FABIAN, plaintiffs-appellants, vs. SILBINA FABIAN, FELICIANO
LANDRITO, TEODORA FABIAN and FRANCISCO DEL
MONTE, defendants-appellees.
Felix Law Office for plaintiffs-appellants.
J.G. Mendoza for defendants-appellees.
CASTRO, J.:
Before us is the appeal taken by Esperanza Fabian, Benita I Fabian and
Damaso Papa y Fabian from the decision of the Court of First Instance of
Rizal which dismissed their complaint for reconveyance, in civil case 295-R,
filed against the defendants spouses Silbina Fabian and Feliciano Landrito
and Teodora Fabian and Francisco del Monte, upon the ground that the latter
had acquired a valid and complete title to the land in question by acquisitive
prescription.
This case traces its origin way back to January 1, 1909 when Pablo Fabian
bought from the Philippine Government lot 164 of the Friar Lands Estate in
Muntinlupa, Rizal, of an area 1 hectare, 42 ares and 80 centares, for the sum
of P112 payable in installments. By virtue of this purchase, he was issued
sale certificate 547. He died on August 2, 1928, survived by four children,
namely, Esperanza, Benita I, Benita II, 1 and Silbina.
On October 5, 1928 Silbina Fabian and Teodora Fabian, niece of the
deceased, executed an affidavit, reciting, among other things,
Que el finado Pablo Fabian, no dejo ningun otro heredero sino los
declarantes, con derecho a heredar el lote No. 164 de la hacienda
Muntinlupa, relicto por dicho finado Pablo Fabian y para la
aprobacion de traspaso a nosotros el referido lote No. 164,
prestamos esta declaracion para todos los efectos que pueden
covenir a la Oficina de Terenos a defender por nuestro mayor
derecho de heredar dicho lote contra las reclamaciones juntas de
quien las presentare.
On the strength of this affidavit, sale certificate 547 was assigned to them.
On November 14, 1928 the acting Director of Lands, on behalf of the
Government, sold lot 164, under deed 17272, to Silbina Fabian, married to
Feliciano Landrito, and to Teodora Fabian, married to Francisco del Monte,
for the sum of P120. The vendees spouses forthwith in 1929 took physical
possession thereof, cultivated it, and appropriated the produce therefrom
(and concededly have up to the present been appropriating the fruits from
the land exclusively for themselves). In that same year, they declared the lot
in their names for taxation purposes under tax declaration 3374. This tax
declaration was later cancelled, and in lieu thereof two tax declarations (2418
and 2419) were issued in favor of Teodora Fabian and Silbina Fabian,
respectively. Since 1929 up to the present, they have been paying the real
estate taxes thereon. In 1937 the Register of Deeds of Rizal issued TCT
33203 over lot 164 in their names. And on May 4, 1945, they subdivided the
lot into two equal parts; TCT 33203 was then cancelled and TCT 38095 was
issued over lot 164-A in the name of Silbina Fabian, married to Feliciano
Landrito, and 38096 was issued over lot 164-B in the name of Teodora
Fabian, married to Francisco del Monte.
On July 18, 1960 the plaintiffs filed the present action for reconveyance
against the defendants spouses, averring that Silbina and Teodora, through
fraud perpetrated in their affidavit aforesaid, made it appear that "el finado
Pablo Fabian no dejo ningun otro heredero sino los declarantes con derecho
a heredar el lote No. 164 de la hacienda de Muntinlupa", which is a false
narration of facts because Silbina knew that she is not the only daughter and
heir of the deceased Pablo Fabian, and Teodora likewise knew all along that,
as a mere niece of the deceased, she was precluded from inheriting from him
in the presence of his four surviving daughters; that by virtue of this affidavit,
the said defendants succeeded in having sale certificate 547 assigned to
them and thereafter in having lot 164 covered by said certificate transferred
in their names; and that by virtue also of these assignment and transfer, the
defendants succeeded fraudulently in having lot 164 registered in their
names under TCT 33203. They further allege that the land has not been
transferred to an innocent purchaser for value. A reconveyance thereof is
prayed for, aside from P3,000 attorney's fees and costs.
In their answer of August 31, 1960, 2 the defendants spouses claim that
Pablo Fabian was not the owner of lot 164 at the time of his death on August
2, 1928 because he had not paid in full the amortizations on the lot; that they
are the absolute owners thereof, having purchased it from the Government
for the sum of P120, and from that year having exercised all the attributes of
ownership thereof up to the present; and that the present action for
reconveyance has already prescribed. The dismissal of the complaint is
prayed for.
On the basis of a partial stipulation of facts together with annexes, the lower
court rendered judgment on June 28, 1962, declaring that the defendants
spouses had acquired a valid and complete title to the property by acquisitive
prescription, and accordingly dismissed the complaint, with costs against the
plaintiffs. The latter's motion for reconsideration was thereafter denied.
Hence, the present recourse.
The three resulting issues of law tendered for resolution in this appeal, by the
formulation of the parties are: (1) Was Pablo Fabian the owner of lot 164 at
the time of his death, in the face of the fact, admitted by the defendants-
appellees, that he had not then paid the entire purchase price thereof? (2)
May laches constitute a bar to an action to enforce a constructive trust? (3)
Has title to the land vested in the appellees through the mode of acquisitive
prescription?
1. Lot 164 was a part of the Friar Lands Estate of Muntinlupa, Rizal; its sale
to Pablo Fabian was therefore governed by Act 1120, otherwise known as
the Friar Lands Act. While under section 15 of the said Act, title to the land
sold is reserved to the Government until the purchaser makes full payment of
all the required installments and the interest thereon, this legal reservation
refers.
to the bare, naked title. The equitable and beneficial title really went
to the purchaser the moment he paid the first installment and was
given a certificate of sale. The reservation of the title in favor of the
Government is made merely to protect the interest of the
Government so as to preclude or prevent the purchaser from
encumbering or disposing of the lot purchased before the payment in
full of the purchase price. Outside of this protection the Government
retains no right as an owner. For instance, after issuance of the sales
certificate and pending payment in full of the purchase price, the
Government may not sell the lot to another. It may not even
encumber it. It may not occupy the land to use or cultivate; neither
may it lease it or even participate or share in its fruits. In other words,
the Government does not and cannot exercise the rights and
prerogatives of owner. And when said purchaser finally pays the final
installment on the purchase price and is given a deed of conveyance
and a certificate of title, the title at least in equity, retroacts to the
time he first occupied the land, paid the first installment and was
issued the corresponding certificate of sale. In other words, pending
the completion of the payment of the purchase price, the purchaser
is entitled to all the benefits and advantages which may accrue to the
land as well as suffer the losses that may befall it. 3
That Pablo Fabian had paid five annual installments to the Government, and
in fact been issued sale certificate 547 in his name, are conceded. He was
therefore the owner of lot 164 at the time of his death. He left four daughters,
namely, Esperanza, Benita I, Benita II and Silbina to whom all his rights and
interest over lot 164 passed upon his demise.
In case a holder of a certificate dies before the giving of the deed
and does not leave a widow, then the interest of the holder of the
certificate shall descend and deed shall issue to the person who
under the laws of the Philippine Islands would have taken had the
title been perfected before the death of the holder of the certificate,
upon proof of the holders thus entitled of compliance with all the
requirements of the certificate. 4
The assignment and sale of the lot to the defendants. Silbina and Teodora
were therefore null and void as to that portion sold to Teodora, and as well as
to that portion which lawfully devolved in favor of the appellants. To the
extent of the participation of the appellants, application must be made of the
principle that if property is acquired through fraud, the person obtaining it is
considered a trustee of an implied trust for the benefit of the person from
whom the property comes (Gayondato vs. Insular Treasurer, 49 Phil. 244).
2. In Diaz, et al. vs. Gorricho, et al., 103 Phil. 264-265 (1958), this Court,
speaking through Mr. Justice J.B.L. Reyes, declared in no uncertain terms
that laches may bar an action brought to enforce a constructive trust such as
the one in the case at bar. Illuminating are the following excerpts from the
decision penned by Mr. Justice Reyes:
Article 1456 of the new Civil Code, while not retroactive in character,
merely expresses a rule already recognized by our courts prior to the
Code's promulgation (see Gayondato vs. Insular Treasurer, 49 Phil.
244). Appellants are, however, in error in believing that like express
trust, such constructive trusts may not be barred by lapse of time.
The American law on trusts has always maintained a distinction
between express trusts created by the intention of the parties, and
the implied or constructive trusts that are exclusively created by law,
the latter not being trusts in their technical sense (Gayondato vs.
Insular Treasurer, supra). The express trusts disable the trustee from
acquiring for his own benefit the property committed to his
management or custody, at least while he does not openly repudiate
the trust, and makes such repudiation known to the beneficiary
or cestui que trust. For this reason, the old Code of Civil Procedure
(Act 190) declared that the rules on adverse possession does not
apply to "continuing and subsisting" (i.e., unrepudiated) trusts.
But in constructive trusts, . . . the rule is that laches constitutes a bar
to actions to enforce the trust, and repudiation is not required, unless
there is a concealment of the facts giving rise to the trust (54 Am.
Jur., secs. 580, 581; 65 C.J., secs. 956, 957; Amer. Law Institute,
Restatement of Trusts, section 219; on Restitution, section 179;
Stianson vs. Stianson 6 ALR 287; Claridad vs. Benares, 97 Phil. 973.
The assignment of sale certificate 547 was effected on October 5, 1928; and
the actual transfer of lot 164 was made on the following November 14. It was
only on July 8, 1960, 32 big years later, that the appellants for the first time
came forward with their claim to the land. The record does not reveal, and it
is not seriously asserted, that the appellees concealed the facts giving rise to
the trust. Upon the contrary, paragraph 13 of the stipulation of facts of the
parties states with striking clarity "that defendants herein have been in
possession of the land in question since 1928 up to the present publicly and
continuously under claim of ownership; they have cultivated it, harvested and
appropriated the fruits for themselves." (emphasis supplied.)
3. Six years later, in Gerona, et al. vs. De Guzman, et al., L-19060, May 29,
1964, the factual setting attending which is substantially similar to that
obtaining in the case at bar, this Court, in an excellently-phrased decision
penned by Chief Justice, then Associate Justice, Roberto Concepcion,
unequivocally reaffirmed the rule, overruling previous decisions to the
contrary, that "an action for reconveyance of real property based upon a
constructive or implied trust, resulting from fraud, may be barred by the
statute of limitations," and further that "the action therefor may be filed within
four years from the discovery of the fraud," the discovery in that case being
deemed to have taken place when new certificates of title were issued
exclusively in the names of the respondents therein. The following is what
Justice Concepcion, speaking for the Court, said:
[A]lthough, as a general rule, an action for partition among co-heirs
does not prescribe, this is true only as long as the defendants do not
hold the property in question under an adverse title (Cordova vs.
Cordova, L-9936, January 14, 1948). The statute of limitations
operates, as in other cases, from the moment such adverse title is
asserted by the possessor of the property (Ramos v. Ramos, 45 Phil.,
362; Bargayo v. Camumot, 40 Phil., 857; Castro v. Echarri, 20 Phil.,
23).
When respondents executed the aforementioned deed of extra-
judicial settlement stating therein that they are the sole heirs of the
late Marcelo de Guzman, and secured new transfer certificates of
title in their own name, they thereby excluded the petitioners from the
estate of the deceased, and consequently, set up a title adverse to
them. And this is why petitioners have brought this action for the
annulment of said deed upon the ground that the same is tainted
with fraud.
Although, there are some decisions to the contrary (Jacinto v.
Mendoza, L-12540, February 28, 1959; Cuison v. Fernandez, L-
11764, January 31, 1959; Marabiles v. Quito, L-10408, October 18,
1956 and Sevilla v. De los Angeles, L-7745, November 18, 1955), it
is already settled in this jurisdiction that an action for reconveyance
of real property based upon a constructive or implied trusts, resulting
from fraud, may be barred by the statute of limitations (Candelaria vs.
Romero, L-12149, September 30, 1960; Alzona v. Capunita, L-10220,
February 28, 1962).
Inasmuch as petitioners seek to annul the aforementioned deed of
"extra-judicial settlement" upon the ground of fraud in the execution
thereof, the action therefor may be filed within four (4) years from the
discovery of the fraud (Mauricio v. Villanueva, L-11072, September
24, 1959). Such discovery is deemed to have taken place, in the
case at bar, on June 25, 1948, when said instrument was filed with
the Register of Deeds and new certificates of title in the name of the
respondents exclusively, for the registration of the deed of extra-
judicial settlement constitutes constructive notice to the whole world
(Diaz v. Gorricho, L-11229, March 29, 1958; Avecilla v. Yatco, L-
11578, May 14, 1958; J. M. Tuason & Co., Inc. v. Magdangal, L-
15539, January 30, 1962; Lopez v. Gonzaga, L-18788, January 31,
1964). (Emphasis supplied.)
Upon the undisputed facts in the case at bar, not only had laches set in when
the appellants instituted their action for, reconveyance in 1960, but as well
their right to enforce the constructive trust had already prescribed. 5
It logically follows from the above disquisition that acquisitive prescription has
likewise operated to vest absolute title in the appellees, pursuant to the
provisions of section 41 of Act 190 that
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, 6shall vest in every actual occupant or possessor of
such land a full and complete title. . . . (Emphasis ours.)
The stringent mandate of said section 41 that "the possession by the
claimant or by the person under or through whom he claims must have been
actual, open, public, continuous under a claim of title exclusive of any other
right and adverse to all other claimants," was adjudged by the lower court as
having been fulfilled in the case at hand. And we agree. Although paragraph
13 of the stipulation of facts hereinbefore adverted to does not explicitly
employ the word "adverse" to characterize the possession of the defendants
from 1928 up to the filing of the complaint in 1960, the words, "defendants
have been in possession of the land since 1928 up to the present [1960]
publicly and continuously under claim of ownership; they have cultivated it,
harvested and appropriated the fruits for themselves," clearly delineate, and
can have no other logical meaning than, the adverse character of the
possession exercised by the appellees over the land. If the import of the
abovequoted portion of the stipulation of facts is at all doubted, such doubt is
dispelled completely by additional cumulative facts in the record which are
uncontroverted. Thus, the appellees declared the lot for taxation purposes in
their names, and the resulting tax declaration was later concelled and two tax
declarations were issued in favor of Silbina Fabian and Teodora Fabian,
respectively. They have been paying the real estate taxes thereon from 1929
to the present. And in 1945 they subdivided the lot into two equal parts, and
two transfer certificates of title were issued separately in their names.
Upon the foregoing disquisition, we hold not only that the appellants' action to
enforce the constructive trust created in their favor has prescribed, but as
well that a valid, full and complete title has vested in the appellees by
acquisitive prescription.1äwphï1.ñët
ACCORDINGLY, the judgment a quo, dismissing the complaint, is affirmed.
No pronouncement as to costs.
Concepcion, C.J., Reyes, J.B.L., Dizon, Bengzon, J.P., Zaldivar, Sanchez,
Angeles and Fernando, JJ., concur.
Makalintal, J., concurs in the result.
4. G.R. No. L-23072 November 29, 1968
SIMEON B. MIGUEL, ET AL., plaintiffs-appellants, vs. FLORENDO
CATALINO, defendant-appellee.
Bienvenido L. Garcia for plaintiffs-appellants.
Moises P. Cating for defendant-appellee.
REYES, J.B.L., J.:
Direct appeal from the judgment in Civil Case No. 1090 of the Court of First
Instance of Baguio, dismissing the plaintiffs' complaint for recovery of
possession of a parcel of land, registered under Act 496, in the name of one
Bacaquio,1 a long-deceased illiterate non-Christian resident of Mountain
Province, and declaring the defendant to be the true owner thereof.
On January 22, 1962, appellants Simeon, Emilia and Marcelina Miguel, and
appellant Grace Ventura brought suit in the Court below against Florendo
Catalino for the recovery of the land above-described, plaintiffs claiming to be
the children and heirs of the original registered owner, and averred that
defendant, without their knowledge or consent, had unlawfully taken
possession of the land, gathered its produce and unlawfully excluded
plaintiffs therefrom. Defendant answered pleading ownership and adverse
possession for 30 years, and counterclaimed for attorney's fees. After trial
the Court dismissed the complaint, declared defendant to be the rightful
owner, and ordered the Register of Deeds to issue a transfer certificate in
lieu of the original. Plaintiffs appealed directly to this Court, assailing the trial
Court's findings of fact and law.
As found by the trial Court, the land in dispute is situated in the Barrio of San
Pascual, Municipality of Tuba, Benguet, Mountain Province and contains an
area of 39,446 square meters, more or less. It is covered by Original
Certificate of Title No. 31, which was issued on 28 December 1927 in the
name of Bacaquio (or Bakakew), a widower. No encumbrance or sale has
ever been annotated in the certificate of title.
The plaintiff-appellant Grace Ventura2 is the only child of Bacaquio by his first
wife, Debsay, and the other plaintiffs-appellants, Simeon, Emilia and
Marcelina, all surnamed "Miguel", are his children by his third wife,
Cosamang. He begot no issue with his second wife, Dobaney. The three
successive wives have all died.
Bacaquio, who died in 1943, acquired the land when his second wife died
and sold it to Catalino Agyapao, father of the defendant Florendo Catalino,
for P300.00 in 1928. Of the purchase price P100.00 was paid and receipted
for when the land was surveyed, but the receipt was lost; the balance was
paid after the certificate of title was issued. No formal deed of sale was
executed, but since the sale in 1928, or for more than 30 years, vendee
Catalino Agyapao and his son, defendant-appellee Florendo Catalino, had
been in possession of the land, in the concept of owner, paying the taxes
thereon and introducing improvements.
On 1 February 1949, Grace Ventura, by herself alone, "sold" (as per her
Transferor's Affidavit, Exhibit "6") anew the same land for P300.00 to
defendant Florendo Catalino.
In 1961, Catalino Agyapao in turn sold the land to his son, the defendant
Florendo Catalino.
This being a direct appeal from the trial court, where the value of the property
involved does not exceed P200,000.00, only the issues of law are reviewable
by the Supreme Court, the findings of fact of the court a quo being deemed
conceded by the appellant (Jacinto v. Jacinto, 105 Phil. 1218; Del Castillo v.
Guerro, L-11994, 25 July 1960; Abuyo, et al. v. De Suazo, L-21202, 29 Oct.
1966; 18 SCRA 600, 601). We are thus constrained to discard appellant's
second and third assignments of error.
In their first assignment, appellants assail the admission in evidence over the
objection of the appellant of Exhibit "3". This exhibit is a decision in favor of
the defendant-appellee against herein plaintiff-appellant Grace Ventura, by
the council of Barrio of San Pascual, Tuba, Benguet, in its Administrative
Case No. 4, for the settlement of ownership and possession of the land. The
decision is ultra vires because barrio councils, which are not courts, have no
judicial powers (Sec. 1, Art. VIII, Constitution; see Sec. 12, Rep. Act 2370,
otherwise known as the Barrio Charter). Therefore, as contended by
appellants, the exhibit is not admissible in a judicial proceeding as evidence
for ascertaining the truth respecting the fact of ownership and possession
(Sec. 1, Rule 128, Rules of Court).
Appellants are likewise correct in claiming that the sale of the land in 1928 by
Bacaquio to Catalino Agyapao, defendant's father, is null and void ab initio,
for lack of executive approval (Mangayao et al. vs. Lasud, et al., L-19252, 29
May 1964). However, it is not the provisions of the Public Land Act
(particularly Section 118 of Act 2874 and Section 120 of Commonwealth Act
141) that nullify the transaction, for the reason that there is no finding, and
the contending parties have not shown, that the land titled in the name of
Bacaquio was acquired from the public domain (Palad vs. Saito, 55 Phil. 831).
The laws applicable to the said sale are: Section 145(b) of the Administrative
Code of Mindanao and Sulu, providing that no conveyance or encumbrance
of real property shall be made in that department by any non-christian
inhabitant of the same, unless, among other requirements, the deed shall
bear indorsed upon it the approval of the provincial governor or his
representative duly authorized in writing for the purpose; Section 146 of the
same Code, declaring that every contract or agreement made in violation of
Section 145 "shall be null and void"; and Act 2798, as amended by Act 2913,
extending the application of the above provisions to Mountain Province and
Nueva Vizcaya.
Since the 1928 sale is technically invalid, Bacaquio remained, in law, the
owner of the land until his death in 1943, when his title passed on, by the law
on succession, to his heirs, the plaintiffs-appellants.
Notwithstanding the errors aforementioned in the appealed decision, we are
of the opinion that the judgment in favor of defendant-appellee Florendo
Catalino must be sustained. For despite the invalidity of his sale to Catalino
Agyapao, father of defendant-appellee, the vendor Bacaquio suffered the
latter to enter, possess and enjoy the land in question without protest, from
1928 to 1943, when the seller died; and the appellants, in turn, while
succeeding the deceased, also remained inactive, without taking any step to
reivindicate the lot from 1944 to 1962, when the present suit was
commenced in court. Even granting appellants' proposition that no
prescription lies against their father's recorded title, their passivity and
inaction for more than 34 years (1928-1962) justifies the defendant-appellee
in setting up the equitable defense of laches in his own behalf. As a result,
the action of plaintiffs-appellants must be considered barred and the Court
below correctly so held. Courts can not look with favor at parties who, by
their silence, delay and inaction, knowingly induce another to spend time,
effort and expense in cultivating the land, paying taxes and making
improvements thereon for 30 long years, only to spring from ambush and
claim title when the possessor's efforts and the rise of land values offer an
opportunity to make easy profit at his expense. In Mejia de Lucas vs.
Gamponia, 100 Phil. 277, 281, this Court laid down a rule that is here
squarely applicable:
Upon a careful consideration of the facts and circumstances, we are
constrained to find, however, that while no legal defense to the
action lies, an equitable one lies in favor of the defendant and that is,
the equitable defense of laches. We hold that the defense of
prescription or adverse possession in derogation of the title of the
registered owner Domingo Mejia does not lie, but that of the
equitable defense of laches. Otherwise stated, we hold that while
defendant may not be considered as having acquired title by virtue of
his and his predecessors' long continued possession for 37 years,
the original owner's 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 patentee's inaction and neglect, been converted
into a stale demand.
As in the Gamponia case, the four elements of laches are present in the case
at bar, namely: (a) conduct on the part of the defendant, or of one under
whom he claims, giving rise to the situation of which complaint is made and
for which the complaint seeks a remedy; (b) delay in asserting the
complainant's rights, the complainant having had knowledge or notice, of the
defendant's conduct and having been afforded an opportunity to institute a
suit; (c) lack of knowledge or notice on the part of the defendant that the
complainant would assert the right on which he bases his suit; and (d) injury
or prejudice to the defendant in the event relief is accorded to the
complainant, or the suit is not held to be barred. In the case at bar, Bacaquio
sold the land in 1928 but the sale is void for lack of the governor's approval.
The vendor, and also his heirs after him, could have instituted an action to
annul the sale from that time, since they knew of the invalidity of the sale,
which is a matter of law; they did not have to wait for 34 years to institute suit.
The defendant was made to feel secure in the belief that no action would be
filed against him by such passivity, and also because he "bought" again the
land in 1949 from Grace Ventura who alone tried to question his ownership;
so that the defendant will be plainly prejudiced in the event the present action
is not held to be barred.
The difference between prescription and laches was elaborated in Nielsen &
Co., Inc. vs. Lepanto Consolidated Mining Co., L-21601, 17 December 1966,
18 SCRA p. 1040, as follows:
 Appellee is correct in its contention that the defense of laches applies
independently of prescription. Laches is different from the statute of
limitations. Prescription is concerned with the fact of delay, whereas
laches is concerned with the effect of delay. Prescription is a matter
of time; laches is principally a question of inequity of permitting a
claim to be enforced, this inequity being founded on some change in
the condition of the property or the relation of the parties.
Prescription is statutory; laches is not. Laches applies in equity,
whereas prescription applies at law. Prescription is based on fixed
time laches is not, (30 C.J.S., p. 522. See also Pomeroy's Equity
Jurisprudence, Vol. 2, 5th ed., p. 177) (18 SCRA 1053).
With reference to appellant Grace Ventura, it is well to remark that her
situation is even worse than that of her co-heirs and co-plaintiffs, in view of
her executing an affidavit of transfer (Exh. 6) attesting under oath to her
having sold the land in controversy to herein defendant-appellee, and the
lower Court's finding that in 1949 she was paid P300.00 for it, because she,
"being a smart woman of enterprise, threatened to cause trouble if the
defendant failed to give her P300.00 more, because her stand (of being the
owner of the land) was buttressed by the fact that Original Certificate of Title
No. 31 is still in the name of her father, Bacaquio" (Decision, Record on
Appeal, p. 24). This sale, that was in fact a quitclaim, may not be contested
as needing executive approval; for it has not been shown that Grace Ventura
is a non-christian inhabitant like her father, an essential fact that cannot be
assumed (Sale de Porkan vs. Yatco, 70 Phil. 161, 175).
Since the plaintiffs-appellants are barred from recovery, their divestiture of all
the elements of ownership in the land is complete; and the Court a quo was
justified in ordering that Bacaquio's original certificate be cancelled, and a
new transfer certificate in the name of Florendo Catalino be issued in lieu
thereof by the Register of Deeds.
FOR THE FOREGOING REASONS, the appealed decision is hereby
affirmed, with costs against the plaintiffs-appellants.
Concepcion C.J., Dizon, Makalintal, Zaldivar, Sanchez, Fernando and
Capistrano, JJ., concur.
Castro, J., took no part.
5. [G.R. No. 127797. January 31, 2000]
ALEJANDRO MILLENA, petitioner, vs. COURT OF APPEALS and
FELISA JACOB, represented herein by her attorney-in-fact JAIME
LLAGUNO, respondents.
DECISION
BELLOSILLO, J.:
This case involves a 3,934-square meter parcel of land in far-flung Bgy.
Balinad, Daraga, Albay. It was originally a part of Lot 1874, a 14,284-square
meter land that was subject of a cadastral proceeding during the 1920s
before the Court of First Instance of Albay. Among the claimants in the
cadastral case were Gregoria Listana and her sister-in-law Potenciana
Maramba, together with the latters seven (7) children, namely, Felix, Marcela,
Ruperta, Emeteria, Florencio, Gaspar and Nicomedes, all surnamed Listana.
On 17 August 1926 the claimants reached a compromise agreement to
divide Lot 1874 among themselves. Approximately one-fourth (1/4) of the lot
went to Gregoria Listana while the remaining three-fourths (3/4) portion, to
Potenciana Maramba and her seven (7) children.[1] The compromise
agreement was submitted to the cadastral court on 17 August 1926 and on
even date adjudication was rendered in accordance with the terms of the
agreement.[2] Thus the northern portion of Lot 1874 with an area of
approximately 3,934 square meters was awarded to Gregoria Listana.
Gregoria Listana was at that time seriously ill of tuberculosis. To her death
was inevitable. Gregoria executed on 9 October 1926 a power of attorney in
favor of her cousin Antonio Lipato which authorized the attorney-in-fact to sell
the portion of Lot 1874 belonging to his principal. Conformably with
Gregoria's instruction, the proceeds of the sale would be used for her
interment.
On 23 October 1926 Antonio Lipato in his capacity as attorney-in-fact sold
the portion of Gregoria Listana to Gaudencio Jacob. Incidentally, Gregoria
died on the same day the land was sold. Thereafter Gaudencio entered the
portion of Lot 1874 that was sold to him and started harvesting the coconuts
found therein. When Potenciana Maramba learned about Gaudencio's
entering the land and harvesting the coconuts she confronted him. But
Gaudencio explained that he had every right to do whatever he pleased with
the land since he had lawfully bought it from Gregoria Listana.
Potenciana Maramba filed an ejectment case against Gaudencio Jacob
before the Justice of the Peace in Legazpi, Albay. However, on 31 December
1926 the court ruled that Gaudencio entered the land in question without
force and intimidation since he had with him a document of sale over the land
which authorized him to take possession thereof.[3] Thus, the Justice of the
Peace dismissed the case.
After the dismissal of the case, Gaudencio Jacob continued with his
possession of the one-fourth (1/4) portion of Lot 1874. His continuous, actual
and peaceful possession lasted for almost forty (40) years until 4 April 1966,
when he and his children executed an extrajudicial settlement of the estate of
his deceased wife Brigida Jacob. The extrajudicial settlement adjudicated to
respondent Felisa Jacob, daughter of Gaudencio Jacob, the 3,934-square
meter portion of Lot 1874.[4] Thereafter, respondent Felisa Jacob had the
land annually declared as her property and paid the corresponding real
property taxes.
However, sometime in November 1981 respondent Felisa Jacob discovered
that Florencio Listana, son of Potenciana Maramba, acquired from the
Bureau of Lands in Legazpi City Free Patent Certificate of Title No. VH-
23536 dated 28 August 1980 covering the entire 14,284-square meter area
of Lot 1874 which included the portion adjudicated to Felisa Jacob in 1966.[5]
On 6 November 1981 respondent Felisa Jacob immediately filed a protest
before the Bureau of Lands in Legazpi City alleging that she was the
absolute owner of a one-fourth (1/4) portion of Lot 1874 having acquired it
through an extrajudicial partition in 1966, and that through misrepresentation
and deceit Florencio Listana was able to secure title for the whole of Lot
1874. Felisa Jacob prayed that an investigation be conducted and that the
Free Patent issued in the name of Florencio Listana covering Lot 1874 be
annulled and set aside.
After the death of Florencio Listana and notwithstanding the protest filed by
Felisa Jacob, the heirs of Florencio Listana sold the entire Lot 1874 including
the portion sold by Gregoria Listana to Gaudencio Jacob to petitioner
Alejandro Millena on 30 September 1986 for P6,000.00. Alejandro Millena, a
nephew of Florencio Listana and grandson of Potenciana Maramba, was
eventually issued Transfer Certificate of Title No. T-71657 covering the whole
of Lot 1874.
Thus on 17 March 1992 respondent Felisa Jacob through her attorney-in-fact
Jaime Llaguno filed a complaint against petitioner Alejandro Millena for
annulment of title with preliminary injunction and damages before the
Regional Trial Court of Legazpi City which she subsequently amended on 19
March 1992 by including a claim for reconveyance with preliminary injunction
and damages. She prayed for judgment (a) declaring her the lawful and
absolute owner of the one-fourth (1/4) northern portion of Lot 1874; (b)
ordering Alejandro Millena to reconvey the aforesaid portion of Lot 1874 to
her; (c) enjoining the construction of a house on said lot by Alejandro Millena
and, after trial, making the injunction permanent; and, (d) ordering Alejandro
Millena to pay damages in the amount of P50,000.00.
On 3 October 1994 Judge Wenceslao R. Villanueva Jr. of the Regional Trial
Court of Legazpi City, Br. 3, rendered a decision ordering petitioner Alejandro
Millena to reconvey by proper document the portion of 3,934 square meters
in question from Lot 1874 to respondent Felisa Jacob and awarded to
her P10,000.00 for attorneys fees.
Petitioner Alejandro Millena appealed to the Court of Appeals which on 12
August 1996 affirmed the trial court but deleted the award of P10,000.00 for
attorneys fees.[6] After the appellate court denied petitioner's motion for
reconsideration, he filed with this Court a Petition for Review
on Certiorari under Rule 45 of the Rules of Court.
Petitioner raises the following issues: (a) whether prescription has now
barred the action for reconveyance; (b) whether the documents and pieces of
evidence used by respondent Court of Appeals as basis in its assailed
Decision were duly authenticated and proved by private respondent, Felisa
Jacob; and, (c) whether respondent appellate court correctly affirmed the
order of reconveyance by the trial court.
We resolve.
First. An action for reconveyance can indeed be barred by prescription.
When an action for reconveyance is based on fraud, it must be filed within
four (4) years from discovery of the fraud, and such discovery is deemed to
have taken place from the issuance of the original certificate of title.[7] On the
other hand, an action for reconveyance based on an implied or constructive
trust prescribes in ten (10) years from the date of the issuance of the original
certificate of title or transfer certificate of title. For the rule is that the
registration of an instrument in the Office of the Register of Deeds constitutes
constructive notice to the whole world and therefore the discovery of the
fraud is deemed to have taken place at the time of registration.[8]
In his petition Alejandro Millena argues that both the Regional Trial Court and
the Court of Appeals failed to pass upon the issue of prescription. According
to him, the issue of prescription is pivotal considering that title to the property
was procured in 1980 while the action for reconveyance was filed only in
1992. This interim period, he submits, had a span of more than twelve (12)
years; thus, the action for reconveyance had clearly prescribed.
But, nonetheless, it must be stressed that prescription cannot be invoked in
an action for reconveyance when the plaintiff is in possession of the land to
be reconveyed.[9] In view of this, can it be said that Felisa Jacob was in
possession of the contested portion of Lot 1874? Article 523 of the Civil Code
states that possession is the holding of a thing or the enjoyment of a right. In
order to possess, one must first have control of the thing and, second, a
deliberate intention to possess it. These are the elements of possession.
The records of the case show that respondent Felisa Jacob had exercised
dominion over the contested parcel of land. Immediately after acquiring the
property through an extrajudicial settlement in 1966, she instructed her
nephew Jaime Llaguno to continue working as caretaker of the land. Felisa
made improvements on the land and paid its property taxes. In fact the
municipal treasurer of Daraga, Albay, issued a certification dated 10 March
1992 that respondent Felisa Jacob was the declared owner of Lot 1874-P -
the litigated portion - and that she had been paying its real property taxes
since 1967.[10]
Apparently Felisa Jacob met the requisite elements of possession. She
exercised control over the parcel of land in litigation through her caretaker,
her nephew, Jaime Llaguno. Moreover, her declaration that the land was her
property and the payment of real property taxes manifested clearly that she
was in possession of the land. Consequently, petitioner may not validly
invoke prescription as defense against respondent Feliza Jacob.
Second. Petitioner Alejandro Millena questioned the very existence and
authenticity of several documents which according to him the Court of
Appeals used as basis for its assailed Decision. These documents were (a)
the compromise agreement dated 17 August 1926 between Gregoria Listana
and Potenciana Maramba over Lot 1874; (b) the Justice of the Peace
decision dated 31 December 1926 dismissing the ejectment suit filed by
Potenciana Maramba against Gaudencio Jacob; (c) the power of attorney
executed by Gregoria Listana authorizing her cousin Antonio Lipato to sell
her one-fourth portion of Lot 1874; and, (d) the deed of sale executed by
Antonio Lipato in favor of Gaudencio Jacob.
Alejandro Millena assailed the authenticity and even the existence of the
decision of the Justice of the Peace of Legazpi dated 31 December 1926 in
which the court dismissed the suit filed by Potenciana Maramba against
Gaudencio Jacob, predecessor-in-interest of Felisa Jacob. The court decided
in favor of Gaudencio Jacob and held that he had the right to possess the
contested one-fourth (1/4) portion of Lot 1874.
Likewise, Alejandro Millena questioned the genuineness of the compromise
agreement dated 17 August 1926 among the claimants of Lot 1874.
Petitioner Millena averred that the alleged compromise agreement did not
bear the signatures of the contracting parties except for the thumb mark of
Gregoria Listana from whom Gaudencio Jacob bought the property.
As to the special power of attorney and the deed of sale, Alejandro Millena
insisted that respondent Felisa Jacob never proved the existence of these
documents. Thus, according to petitioner, the Court of Appeals erred in
assuming their existence and using them to support its assailed Decision.
Questions of authenticity of documents being one of fact, this Court will not
ordinarily disturb the conclusions of the Court of Appeals on this
matter.[11] However for the sake of substantial justice we shall thoroughly
discuss the points raised by petitioner.
The focal issue that needs to be answered and which would ultimately
resolve the other issues raised by petitioner is the genuineness of the
decision of the Justice of the Peace dated 31 December 1926. Being a public
document the decision is admissible in evidence without further proof of its
due execution or genuineness. Such decision may be evidenced by an
official publication thereof or by a copy attested by the officer having the legal
custody of the record or by his deputy.[12]
We have examined the copy of the decision and found it to be
genuine.[13] The decision, which was penned in Spanish, was duly signed by
Justice of the Peace Manuel M. Calleja. It also bore the seal of the court and
an attestation that such was a true copy.[14] Moreover, petitioner Alejandro
Millena failed to adduce any evidence demonstrating the spurious character
of the decision.
Having resolved the issue of genuineness, it can therefore be said that the
facts enumerated by the Justice of the Peace in its decision are likewise
correct. This is because a judgment is conclusive as to the facts admitted by
the pleadings or assumed by the decision, where they were essential to the
judgment, and were such that the judgment could not legally have been
rendered without them.[15] The Justice of the Peace found that -
[Plaintiff Potenciana Maramba and Gregoria Listana x x x
were co-owners [of Lot 1874]. The land [subject matter of
this suit for unlawful detainer] was claimed by one and the
other, finally they arrived at a compromise agreement
whereby Potenciana Maramba ceded to Gregoria Listana
one-fourth (1/4) portion of the land referred to. This
compromise agreement was submitted to the Cadastral
Court x x x and an adjudication was rendered in accordance
with the tenor of the compromise agreement x x x x [T]he
land was surveyed and x x x the northern portion equivalent
 to one-fourth part was delivered to Gregoria Listana. The
latter was seriously sick of tuberculosis. And foreseeing that
someday she would die x x x she executed a power-of-
attorney (Exh "1") in favor of her cousin Antonio Lipato in
order that in case of her death he would sell the land and the
proceeds thereof be paid for the expenses of her interment x
x x x In fact on October 23, 1926 on which date Gregoria
Listana died, Antonio Lipato executed a document of sale
over the land in favor of defendant herein [Gaudencio
Jacob].[16]
The foregoing pronouncements of the Justice of the Peace confirmed the
existence of the compromise agreement, the power of attorney and the deed
of sale. And since no appeal was made, the 31 December 1926 decision of
the Justice of the Peace had long become final and the findings of fact
therein conclusive.
Third. The basic rule is that after the lapse of one (1) year from entry, a
decree of registration is no longer open for review or attack, even though the
issuance thereof may have been attended by fraud and that the title may be
inherently defective. The law nevertheless safeguards the rightful partys or
the aggrieved partys interest in the titled land from fraud and improper
technicalities by allowing such party to bring an action for reconveyance to
him of whatever he has been deprived as long as the property has not been
transferred or conveyed to an innocent purchaser for value. The action, while
respecting the decree as incontrovertible, seeks to transfer or reconvey the
land from the registered owner to the rightful owner.
In an action for reconveyance the issue involved is one of ownership, and for
this purpose, evidence of title may be introduced. In fact, respondent Felisa
Jacob had submitted evidence showing a strong claim of ownership over the
contested parcel of land. She testified before the trial court that she had been
in actual possession of the land since 1966. Moreover, proof was adduced
showing that her predecessor-in-interest, her father Gaudencio Jacob, had
lawfully possessed the property from 1926. She likewise offered as evidence
a certification from the municipal treasurer that she had been declaring the
land as her property for tax purposes since 1967.
The evidence on record without doubt tilts in favor of respondent Felisa
Jacob. Although petitioner Alejandro Millena holds a certificate of title
covering the contested parcel of land, such possession of a certificate of title
alone does not necessarily make the holder thereof the true owner of all the
property described therein. Land registration proceedings cannot be made a
shield for fraud or for enriching a person at the expense of another. The
inclusion of an area in a certificate of title which the registered owner or
successful applicant has placed no claim on and has never asserted any
right of ownership thereof is void and of no effect.[17] Thus, the incorporation
of the 3,934-square meter northern portion of Lot 1874 in the Free Patent
Certificate Title issued to Florencio Listana on 28 August 1980 was clearly
erroneous and irregular.
Petitioner also avers that he is an innocent purchaser for value and that an
action for reconveyance cannot prosper against him. He argues that the
finding of respondent appellate court of bad faith was not supported by
evidence. A purchaser in good faith is one who buys property of another,
without notice that some other person has a right to, or interest in, such
property at the time of such purchase, or before he has notice of the claim or
interest of some other persons in the property. Good faith, or the lack of it, is
in the final analysis a question of intention; but in ascertaining the intention
by which one is actuated on a given occasion, we are necessarily controlled
by the evidence as to the conduct and outward acts by which alone the
inward motive may, with safety, be determined. Truly, good faith is not a
visible, tangible fact that can be seen or touched, but rather a state or
condition of mind which can only be judged by actual or fancied tokens or
signs. Otherwise stated, good faith is the opposite of fraud and it refers to the
state of mind which is manifested by the acts of the individual concerned.[18]
Certain pieces of evidence when put together would prove that petitioner
Alejandro Millena had actual knowledge of facts that would have made an
ordinary prudent purchaser of land go beyond what appears on the face of
the certificate of title and inquire into its genuineness. The first evidence to be
considered is the 3 October 1994 decision of the Regional Trial Court of
Legazpi City wherein it ruled
[D]uring the ocular inspection conducted by this court, it was
noted that only a portion of the defendants [Alejandro
Millenas] kitchen encroached a small portion of the lot in
question and his house merely occupied an abandoned road
adjoining the lot in question which cast doubt to the
defendants claim of possession and ownership of the
property in question.[19]
Prescinding from this pronouncement we can conclude that petitioner
Alejandro Millena lived right beside the contested portion of Lot 1874. And
since he himself insisted that his house was constructed in 1980,[20] it would
have been difficult, if not impossible, for him not to have noticed Felisa
Jacobs nephew and caretaker Jaime Llaguno planting and harvesting crops
in the disputed land.
In fact Bgy. Secretary Lucio Londonio, who is also a brother-in-law of
petitioner Alejandro Millena, testified in court that he has been living near the
contested parcel of land for thirty-seven (37) years. Londonio told the court
that the land was originally owned by Gaudencio Jacob and that ownership
hereof was later transferred to Felisa Jacob. He further testified that he would
often see Jaime Llaguno, the caretaker of the land, planting banana and
coconut trees on the land.[21]
We are hard-pressed to believe the claim of petitioner that he purchased Lot
1874 in good faith. Having lived adjacent to the contested lot six (6) years
prior to his purchase of Lot 1874 in 1986, petitioner Alejandro Millena would
have seen and noticed the crops and fruit trees planted by Jaime Llaguno on
the land. Thus, contrary to his asseverations, petitioner was not a purchaser
in good faith since there were circumstances sufficient to arouse his curiosity
and prod him to inquire into the real status of his sellers title.
Finally, a perusal of the records reveals that petitioner Alejandro Millena prior
to his purchase of the land in 1986 had knowledge of the protest filed by
Feliza Jacob before the Bureau of Lands against Florencio Listana in 1981.
This he admitted during his cross-examination on 7 February 1994 -
Atty. Ludovico:
......Are you aware of the protest that was filed by Felisa
Jacob x x x before the Bureau of Lands at Legazpi City in
connection with Lot No. 1874, the lot in question?
Alejandro Millena: Yes, sir.
WHEREFORE, the petition is DENIED. The assailed Decision of the Court of
Appeals dated 12 August 1996 as well as its Resolution of 6 December 1996
denying petitioner Alejandro Millena's motion for reconsideration is
AFFIRMED. Consequently, petitioner is ORDERED to reconvey within thirty
(30) days from the finality of this Decision that northern portion in question of
Lot 1874 consisting of 3,934 square meters as shown in the location map
(Exhs. "L" and "L-1") in favor of private respondent Felisa Jacob, represented
herein by her attorney-in-fact Jaime Llaguno, with costs against petitioner.
SO ORDERED.
Mendoza, Quisumbing, Buena, and De Leon, Jr., JJ., concur.
6. G.R. No. L-20274 October 30, 1969
ELOY MIGUEL and DEMETRIO MIGUEL, petitioners, vs. THE COURT
OF APPEALS and ANACLETA M. VDA. DE REYES, respondents.
Silvestre Br. Bello for petitioners.
Teofilo A. Leonin for respondent.
CASTRO, J.:
Petition for review on certiorari of the decision and the two resolutions of the
Court of Appeals promulgated on May 10, July 23, and September 5, all in
the year 1962, in CA-G.R.-16497-R, entitled "Eloy Miguel and Demetrio
Miguel, plaintiffs-appellees vs. Anacleta M. Vda. de Reyes, defendant-
appellant."
During the Spanish regime and prior to July 26, 1894, Eloy Miguel, then
single and resident of Laoag, Ilocos Norte, went to Isabela and for some
appreciable period of time stayed with his kinsman Juan Felipe in Barrio
Ingud Norte, Municipality of Angadanan. There he spotted an uncultivated
parcel of land, one hectare of which he forthwith occupied, and then cleared
and planted to corn. After the Philippine Revolution, he returned to Laoag,
Ilocos Norte and took a wife. In the early years of the ensuing American
regime, Eloy Miguel returned to Ingud Norte with his family, resettled on the
same land, cultivated and planted it to rice, declared it for taxation purposes,
and paid the annual realty taxes thereon.
During the year 1932, Leonor Reyes, an ambulatory notary public and
husband of the private respondent Anacleta M. Reyes, used to visit Barrio
Ingud Norte, looking for documents to notarize. He and Eloy Miguel became
acquaintances. Later, Leonor Reyes asked Miguel if he wanted to secure
expeditiously a title to his landholding. Having received an affirmative answer
and after Eloy Miguel had handed to him the tax declaration and tax receipts
covering the land, Leonor Reyes prepared and filed a homestead application
in the name of Eloy Miguel and, furthermore, promised to work for the early
approval of the said application. Reyes handed to Miguel the receipt for the
filing fee (exh. A) corresponding to the homestead application, advising the
latter to keep it, but he (Reyes) withheld other papers including the tax
declaration and tax receipts, assuring Miguel that he would return them as
soon as the homestead patent was issued in Miguel's name. Reyes likewise
advised Miguel to cease paying the land taxes until the patent shall have
been issued by the Bureau of Lands.
After a long wait and becoming impatient about the issuance of the promised
title, Eloy Miguel inquired from Leonor Reyes about the status of his
application. Reyes promised to send a letter-tracer to the Bureau of Lands,
and, in fact, asked Eloy Miguel to affix his thumbmark to a blank paper upon
which was supposed to be written a letter-tracer. However, World War II
broke out in the Pacific, and Miguel did not hear of and about his homestead
application; after the war he had no way of ascertaining the outcome of his
application because Leonor Reyes had died meanwhile during the Japanese
occupation of the Philippines.
For the services rendered and still to be rendered by Leonor Reyes in
preparing the homestead application and in securing the issuance of the
correspondent patent, Miguel gave the former 1/5 of his yearly harvest from
the land. After the death of Leonor Reyes Miguel continued to deliver an
equal number of cavanes of palay to the former's widow, Anacleta M. Vda.
de Reyes, who likewise promised to help him secure the necessary
homestead patent.
Meanwhile, Demetrio Miguel helped his father, Eloy Miguel, clear and
cultivate the land. Sometime in 1932, on the occasion of the marriage of
Demetrio, Eloy Miguel ceded to Demetrio 14 hectares of the southern portion
of the land as a gift propter nuptias. Demetrio forthwith declared the said
portion for taxation purposes in his name, as evidenced by tax declaration
7408 (exh. G).
However, unknown to Eloy and Demetrio Miguel, Leonor Reyes on June 25,
1935 filed sales application 20240 in the name of his wife, Anacleta M. Vda.
de Reyes (hereinafter referred to as the private respondent), covering the
same parcel of land occupied and cultivated by the Miguels and the subject
of Eloy Miguel's homestead-application. The sales application was duly
acknowledged by the Bureau of Lands on June 29, 1935, and a sale at public
auction took place on August 3, 1939 whereat the private respondent was
the sole bidder. The Director of lands awarded the land to her on March 7,
1940, the value of which was to be paid on installments.
Sometime in 1950, the private respondent had the land surveyed by Maximo
Lorenzo who, in the course of the survey, assured Eloy Miguel that the land
was being surveyed in the latter's name. The private respondent, who was
present during the survey, made the same assurance to Eloy Miguel.
However, because his suspicions were aroused by the act of the private
respondent of having the land surveyed, Eloy Miguel directed his son,
Demetrio, to inquire from the office of the district land officer of Ilagan,
Isabela, about the status of his (Eloy's) homestead application. Demetrio
discovered that their land was covered by the sales application of the private
respondent. Eloy Miguel forthwith filed on February 16, 1950 a protest with
the Bureau of Lands against sales application 20240 of the private
respondent. Consequently, on February 21, 1950, the Director of Lands
ordered an investigation. Hearing of the protest was scheduled for May 26,
1950 by deputy public lands inspector Alejandro Ramos of Land District 4,
Bureau of Lands, Ilagan, Isabela, but was postponed at the instance of the
private respondent. The hearing was then reset for February 10, 1951, by
assistant public lands inspector Hilarion Briones. However, the Miguels had
in the interim discovered that notwithstanding their protest and the
investigation ostensibly being conducted by the administrative branch of the
Government, sales patent V-522 and original certificate of title P-1433,
covering the parcel of land in question, were granted and issued to the
private respondent on January 10, 1951 and January 22, 1951, respectively.
Consequently, on February 17, 1951 Eloy and Demetrio Miguel lodged a
complaint with the Court of First Instance of Isabela against the private
respondent, Anacleta M. Vda. de Reyes, the Director of Lands, and the
Register of Deeds of Isabela, for the annulment of sales patent V-522 and
the cancellation of original certificate of title P-1433. That case, docketed as
civil case 315 of the Court of First Instance of Isabela, was dismissed by that
court on grounds that the plaintiffs did not have personality to institute the
action, and that it was prematurely filed — the Miguels not having exhausted
all administrative remedies, more specifically not appealing to the Secretary
of Agriculture and Natural Resources from the grant by the Director of Land
of the patent to the private respondent. On appeal to this Court, the dismissal
was affirmed on the second ground (G.R. No. L-4851, promulgated July 31,
1953).
On September 7, 1953, Eloy and Demetrio Miguel commenced the action
(civil case 616) in the Court of First Instance of Isabela against the private
respondent to compel her to reconvey to them the land covered by the
abovementioned patent and title. After due hearing, the trial court found that
Eloy Miguel "has always been, and up to this time, in physical possession of
the whole tract of land in question under claim of ownership thru occupancy,
he having occupied and cultivated the land since the Spanish regime;" that
he was a homestead applicant way back in 1932 for the land possessed by
him; that there exists a trust relationship Eloy Miguel would himself have
personally attented to his own application; and that, through fraud and
misrepresentations, Leonor Reyes caused the filing and approval of an
application and the issuance by the Bureau of Lands of a sales patent
covering the property in the name of his wife, the private respondent, without
the consent and knowledge of the Miguels. The lower court, however, held
that reconveyance is not proper because the land in question is not the
private property of the Miguels since time immemorial but remains a part of
the public domain, and instead declared that Eloy Miguel "should be given
priority to acquire the land under the foregoing premises, the court a
quo rendered judgment ordering (1) the Director of Land to cancel patent V-
522 issued in the name of Anacleta M. Vda. de Reyes, (2) the Registrar of
Deeds of Isabela to cancel original certificate of title P-1433 in the name of
Anacleta M. Vda. de Reyes and to return Patent V-522 to the Bureau of
Lands, and (3) the Director of Lands to give due course to the homestead
application of Eloy Miguel over the land.
The private respondent appealed to the Court of Appeals (hereafter referred
to as the respondent Court) which dismissed the complaint upon the ground
that the judgment appealed from could not and did not bind the Director of
Lands and the Registrar of Deeds of Isabela who were not parties thereto.
Eloy and, Demetrio Miguel (hereafter referred to as the petitioners) filed a
motion for reconsideration, wherein they argued that while the trial court
might have incurred error in the legal conclusions drawn from its own findings
of fact, the respondent Court was not legally precluded by the Rules of Court
and applicable jurisprudence to modify the judgment of the trial court, so as
to make it conform to the evidence, and to grant the relief of reconveyance
sought in the action, in which action the Director of Land and the Register of
Deeds of Isabela are not proper or necessary parties. The motion for
reconsideration wag denied in an extended resolution of the respondent
Court Promulgated on July 23, 1962, which ruled that the petitioners should
have appealed from the decision of the trial court. A second motion for
reconsideration was denied in a minute resolution dated September 5, 1962.
The petitioners are now before us on appeal by certiorari, assigning as errors
(1) the Court of Appeals' holding that they should have appealed from the
decision of the trial court, and (2) its finding that, assuming that
reconveyance in favor of the petitioners as mere appellees is still proper, the
cases cited in the latter's first motion for reconsideration are not in point.
It has been postulated — and, we think, correctly — that the Supreme Court
is vested with ample authority to review matters not assigned as errors in an
appeal, if it finds that their consideration and resolution are indispensable or
necessary in arriving at a just decision in a given case.1 Thus, before passing
upon the foregoing assigned errors, we shall first resolve in seriatim the
matters raised in both the appealed decision and resolutions of the
respondent Court because to do so is imperative in arriving at a fair and
equitable adjudication of this case.
1. The respondent Court points up the failure of the petitioners to present a
petition for judicial confirmation of imperfect title, if they indeed had been in
possession of the land since July 26, 1894, in accordance with the Public
Land Act. Eloy Miguel should not, however, be expected to file such a
petition because all along he was relying on the solemn assurances of
Leonor Reyes and later his wife, the private respondent, that they were in the
process of securing a homestead patent for him.
2. The respondent Court observed in its decision that the evidence on the
allegation that Leonor Reyes acted fraudulently in applying for the purchase
of the land and later transferring his right to his wife, is sharply conflicting,
and that even granting that there was fraud in the obtention of the issuance
of the patent, any objection based on that ground should have been
interposed within one year from the date of its issuance.
We cannot give our approval to this view. As found by the court below, the
petitioners have proven by preponderance of evidence the fraud perpetrated
by the private respondent and her husband on Eloy Miguel. The weight of
evidence leans heavily in favor of the fact of occupation by Eloy Miguel of the
land from prior to July 26, 1894. This was the finding of the lower court —
which belies the private respondent's allegation that Eloy Miguel entered as
her tenant only in 1935. There is also the receipt, exh. A, evidencing the
payment of a filing fee for a homestead application, which receipt, in the
session of Eloy Miguel, raises at least the presumption that he had filed a
homestead application. That the records of the Bureau of Lands or of any of
its units, particularly the district land office at Ilagan, Isabela, do not show
that such application was ever filed, supports the petitioners' thesis,
concurred in by the trial court, that the blank paper which Eloy Miguel
thumbmarked at the behest of Leonor Reyes was used by the latter to
withdraw the formers application instead of to trace the application. Finally,
there is the private respondent's and her husband's act of misleading the
Bureau of Lands by falsely stating in their application for a sales patent that
there was no improvement on the land, when, as found by the lower court,
the land had already been cultivated and improved by Eloy Miguel since
1932, by the latest. (This misleading statement, noted by the court a quo on
exh. 15 dated March 28, 1939 of the private respondent, significantly, is not
impugned by the latter.) In fact, the lower court observed that the private
respondent herself affirmed on the witness stand that Eloy Miguel was in
1935 already working on the land, although supposedly as her tenant.
Therefore, at the time the private respondent's sales patent application was
filed in 1935, Leonor Reyes and she led the Bureau of Lands to believe that
the land was uncultivated and unoccupied by other claimants. The very
relevant question arises: Why did the Reyes spouses conceal from the
Bureau of Lands the fact that the land was occupied and being cultivated by
the Miguels, when there existed no prohibition against having the land
cultivated for them by tenants? There are only two logical reasons for the
mysterious conduct of the Reyes spouses. First, had they stated in their
sales application that the whole parcel of land was under cultivation by the
petitioners, the Director of Lands would have in all probability discovered that
the land applied for was covered by the prior homestead application of Eloy
Miguel and most likely would have disapproved the sales application of the
private respondent. Second, had a survey of the land been conducted earlier,
this would have aroused the suspicions of Eloy Miguel earlier and enabled
him to discover much sooner the fraud perpetrated by Leonor Reyes before
the sales application of the private respondent was given due course. Indeed,
the private respondent waited until she had just about paid all the
installments on the land before ordering a final survey thereof. It was this
survey which aroused Eloy Miguel's suspicions and enabled him and his son
to discover the fraud perpetrated upon them.
The respondent Court's holding that any objection based on fraud should
have been interposed within one year from the date the issuance of the sales
patent has no relevance to the case at bar. This is an action for
the enforcement of a constructive trust — the ultimate object of which is the
reconveyance of property lost through breach of fiduciary relations and/or
fraud. Therefore, it can be filed within four years from the discovery of the
fraud.2 And since the petitioners discovered the fraud committed against
them by the Reyes spouses in 1950, they had until 1954 within which to bring
this action. This action was seasonably instituted because the complaint was
filed on September 7, 1953.
3. The respondent Court also held that the only remedy available at the time
the action below was instituted was for the Government (through the Solicitor
General) to file an action for the reversion of the land to the public domain
based on the illegality of the grant — a suit which a private person is not
authorized to file. The foregoing rule is correct but inapplicable in this case,
which, as earlier mentioned, is an action for reconveyance of a piece of land
through enforcement of a constructive trust. For this same reason, the
provision of Land Administrative Order 6 of the Secretary of Agriculture and
Natural Resources, cited in the respondent court's decision, is likewise inapt.
4. The respondent Court attributes error to the lower court's finding that Eloy
Miguel filed a homestead application for the land in question, stating that no
other evidence was presented to show that such application was filed except
the testimony of Eloy Miguel and the receipt for the filing fee of a homestead
application; and that if such application was really filed, some trace or tell-tale
evidence of it would be extant, and the application could have been easily
reconstituted after the liberation in 1945 when the Government adopted a
policy to enable all public land applicants to reconstitute their applications. It
is too well-settled to require any citation of authority that the lower Court's
findings of fact are entitled to considerable weight, especially with respect to
the appreciation of the testimony of witnesses on the stand, since it was in
the best position to observe the demeanor of the witnesses. The testimony of
Eloy Miguel regarding his filing of a homestead application over the parcel of
land — as found by the lower court — should not therefore lightly be brushed
aside. The receipt, exh. A, for the filing of the homestead application raises a
presumption in favor of Eloy Miguel's having filed such an application. As
earlier explained, if no trace of the said application could be found among the
records of the Bureau of Lands or of any of its units particularly the district
land office at Ilagan, Isabela, it is because through fraud — i.e., by asking
Eloy Miguel to thumbmark a blank piece of paper — Leonor Reyes
succeeded in withdrawing the application of Miguel. And he did this to pave
the way for his wife, the private respondent herein, herself to apply for the
land under a sales application. Of course, having relied on the assurances of
the Reyes spouses that they would help him secure a homestead patent,
Eloy Miguel found no need to reconstitute his homestead application. It is not
even farfetched to suppose that Miguel, being illiterate, never even came to
learn of the Government's policy of enabling public land applicants to
reconstitute their applications.
5. Coming now to the assigned errors, the respondent Court's view is not
correct that it cannot grant the relief of reconveyance because the petitioners
did not appeal from the decision of the lower court. There exist sufficient
bases, hereinafter to be discussed, for the respondent Court to award said
relief in the exercise of its broad appellate powers to affirm, reverse or modify
the judgment or order appealed from.
To start with, the petitioners cannot entirely be blamed if they thought it the
better part of prudence not to appeal. For although it did not incorporate a
decree of reconveyance, still the decision of the court below was favorable to
them because it vindicated their actual possession of the land under a bona
fide claim of ownership since the Spanish regime, and adjudged them as
having a better right to the land and the priority to own it under the Public
Land Act. Besides, it was their legitimate desire to avoid incurring additional
expenses incident to the bringing of an appeal.
However, as appellees in the Court of Appeals, the petitioners pointedly
called the attention of the respondent Court in their brief to several questions
decided against them in the court below. Thus, working on the theory that it
was plain error for the trial court to order the Director of Lands and the
Register of Deeds of Isabela to implement its decision, the petitioners called
the attention of the respondent Court to the precise nature of the action
below in which the Director of Lands and the Register of Deeds of Isabela
need not be impleaded.
... The action in this case is reconveyance, the purpose of which is to
compel the defendant to return to the plaintiffs-appellees the land in
question which she has acquired through fraudulent means. Such
being the case, it would have been utterly improper for the plaintiffs
to have impleaded the Director of Lands or the Register of Deeds of
Isabela inasmuch as the action is personal in nature directed against
the person of the defendant." .
The petitioners likewise called the attention of the respondent Court to the
trust relationship existing between them, on one hand, and the Reyes
spouses, on the other, which was breached by the latter. Thus, to justify the
reconveyance to them of the property, they stated that:
 Moreover, a situation of trust has been created in the instant case
between the plaintiff and the defendant-appellant deceased husband
upon whom the plaintiff Eloy Miguel relied through his (Reyes')
representations that the corresponding title to said land would be
secured in favor of the plaintiff Eloy Miguel. The evidence likewise
shows that the defendant Vda. de Reyes promised the plaintiff to
continue the work begun by her late husband with the ultimate result
of securing the said homestead patent and title in favor of the plaintiff
Eloy Miguel. Inasmuch as the said promise was violated by the
defendant who secretly worked toward the acquisition of the said
land for her own self, fraudulently and stealthily, no prescription can
run as against plaintiffs' right to claim ownership of the said property.
We held in one case that appellants need not make specific assignment of
errors provided they discuss at length and assail in their brief the correctness
of the trial court's findings regarding the matter. Said discussion warrants the
appellate court to rule upon the point because it substantially complies with
sec. 7, Rule 51 of the Revised Rules of Court, intended merely to compel the
appellant to specify the questions which he wants to raise and be disposed of
in his appeal. A clear discussion regarding an error allegedly committed by
the trial court accomplishes the purpose of a particular assignment of error.3
Reasoning a fortiori from the above-cited authority, an appellee who
occupies a purely defensive position and is not required to make
assignments of errors, need only discuss or call the attention of the appellate
court in his brief to the issues erroneously decided against him by the trial
court.4 Here the petitioners (appellees in the Court of Appeals) stated quite
explicitly in their brief that since the action was for reconveyance, it was
utterly improper to implead the Director of Lands and the Register of
Deeds — in effect calling the attention of the respondent Court to a plain
error committed by the trial court in ordering the Director of Lands and the
Register of Deeds to nullify the sales patent and original certificate of title
issued to the private respondent. And, in discussing the trust relationship
between the Miguels and the Reyes spouses which was breached by the
latter, the petitioners (as appellees) also clearly brought to the attention of
the respondent Court a valid ground disregarded by the lower court as a
basis for granting the relief of reconveyance.
Moreover, the Rules of Court5 and jurisprudence authorize a tribunal to
consider errors, although unassigned, if they involve (1) errors affecting the
lower court's jurisdiction over the subject matter, (2) plain errors 6 not
specified, and (3) clerical errors. Certainly, the mandate contained in the
dispositive portion of the lower court's decision and addressed to the Director
of Lands and the Register of Deeds, who were not parties to the case, is a
plain error which the respondent Court properly corrected. As aforenarrated,
the petitioners (as appellees) brought this error to the attention of the
respondent Court. Another plain error which the respondent Court should
have considered was the court a quo's conclusion that the land in litigation
was still part of the public domain, in the face of the parties' mutual
allegations to the contrary and despite the admitted fact that a sales patent
and an original certificate of title over the land had already been issued, thus
segregating the land from the public domain and making it private land.
It is noteworthy that the complaint for reconveyance was not dismissed by
the trial court. What it denied was merely the relief or remedy of
reconveyance. However, in its decision, the trial court made certain findings
of fact which justified the relief of reconveyance — e.g., that Eloy Miguel "has
always been, and up to this time, in physical possession of the whole tract of
land in question under claim of ownership thru occupancy, he having
occupied and cultivated the land since the Spanish regime;" that there was a
trust relationship between Eloy Miguel and the Reyes spouses; and that the
Reyes spouses have fraudulently and in bad faith breached that trust. Hence,
in reiterating their positions before the respondent Court on the private nature
of the land, on the impropriety of impleading the Director of Lands and the
Register of Deeds of Isabela, and on the existence of a trust relationship
between the petitioners and the Reyes spouses, the petitioners were in point
of fact inviting the respondent Court's attention to questions erroneously
decided against them by the trial court, in the hope that the respondent Court
would render judgment in accordance with the facts adjudged by the trial
court as proven.
If the complaint states a claim upon which any relief can be given, it
is immaterial what the plaintiff has asked for in his prayer or whether
he has asked for the proper relief; the court will grant him the relief to
which he is entitled under the facts proven (Kansas City St. L. and C.
R. Co. v. Alton R. Co., 5 Fed. Rules Service, p. 638; U.S. Circuit
Court of Appeals, Seventh Circuit, Dec. 18, 1941).
On appeal to the respondent Court by the private respondent, the suit was,
as it has always been in the court of origin, one for reconveyance. And of
course, the petitioners did not ask the respondent Court for an affirmative
relief different from what was logically justified by the facts found by and
proven in the court a quo.
6. The respondent Court opined that the cases cited by the petitioners in their
motion for reconsideration (i.e., Republic of the Philippines v. Carle Heirs, L-
12485, July 21, 1959, and Roco, et al. v. Gimeda L-11651, Dec. 27, 1958)
are not applicable because they involved properties which admittedly
belonged to the parties entitled to reconveyance, unlike the herein petitioners
who are mere public land applicants and have not acquired title under the
Public Land Act. Assuming the respondent Court to be correct, a legion of
cases there are which can be cited in favor of the petitioners' position. Since
the law of trust has been more frequently applied in England and in the
United States than it has been in Spain, we may draw freely upon American
precedents in determining the effects of trusts, especially so because the
trusts known to American and English equity jurisprudence are derived from
the fidei commissa of the Roman Law and are based entirely upon civil law
principles.7 Furthermore, because the case presents problems not directly
covered by statutory provisions or by Spanish or local precedents, resort for
their solution must be had to the underlying principles of the law on the
subject. Besides, our Civil Code itself directs the adoption of the principles of
the general law of trusts, insofar as they are not in conflict with said Code,
the Code of Commerce, the Rules of Court and special laws.8
In holding that the cases cited by the petitioners in their motion for
reconsideration (i,e., Republic of the Philippines v. Carle Heirs, supra, and
Roco, et al. v. Gimeda, supra) are inapplicable, the respondent Court
advances the theory that an action for reconveyance based on constructive
trust will prosper only if the properties involved belong to the parties suing for
and entitled to reconveyance. This is not entirely accurate. In Fox v.
Simons9 the plaintiff employed the defendant to assist him in obtaining oil
leases in a certain locality in Illinois, the former paying the latter a salary and
his expenses. The defendant acquired some leases for the plaintiff and
others for himself. Whereupon, the plaintiff brought suit to compel the
defendant to assign the leases which he had acquired for himself. The court
found for the plaintiff, holding that it was a breach of the defendant's fiduciary
duty to purchase for himself the kind of property which he was employed to
purchase for the plaintiff. 10
It is to be observed that in Fox v. Simons, supra, the plaintiff was not the
original owner of the oil leases. He merely employed the defendant to obtain
them for him, but the latter obtained some for the plaintiff and some for
himself. Yet, despite the absence of this former-ownership circumstance, the
court there did not hesitate to order the defendant to assign or convey the
leases he obtained for himself to the plaintiff because of the breach of
fiduciary duty committed by said defendant. Indeed, there need only be a
fiduciary relation and a breach of fiduciary duty before reconveyance may be
adjudged. In fact, a fiduciary may even be chargeable as a constructive
trustee of property which he purchases for himself, even though he has not
undertaken to purchase it for the beneficiary if in purchasing it he was
improperly competing with the beneficiary.11
Parenthetically, a fiduciary relation arises where one man assumes to act as
agent for another and the other reposes confidence in him, although there is
no written contract or no contract at all. If the agent violates his duty as
fiduciary, a constructive trust arises. It is immaterial that there was no
antecedent fiduciary relation and that it arose contemporaneously with the
particular transaction. 12
In the case at bar, Leonor Reyes, the private respondent's husband,
suggested that Eloy Miguel file a homestead application over the land and
offered his services in assisting the latter to secure a homestead patent. Eloy
Miguel accepted Leonor Reyes' offer of services, thereby relying, on his word
and reposing confidence in him. And in payment for the services rendered by
Leonor Reyes in preparing and filing the homestead application and those
still to be rendered by him in securing the homestead patent, Eloy Miguel
delivered to Reyes 1/5 of his yearly harvest from the said land. When Leonor
Reyes died, the petitioners continued to deliver the same percentage of their
annual harvest to the private respondent who undertook to continue assisting
the former to secure a homestead patent over said land. However, in breach
of their fiduciary duty and through fraud, Leonor Reyes and the private
respondent filed a sales application and obtained a sales patent and
ultimately an original certificate of title over the same parcel of land.
Therefore, following the ruling in Fox v. Simons, supra, the private
respondent can be compelled to reconvey or assign to the petitioners the
parcel of land in the proportion of nine hectares in favor of Eloy Miguel and
14 hectares in favor of Demetrio Miguel, respectively.
The private respondent argues that there is no violation of trust relationship
because the petitioners could have participated in the public bidding. She
avers that the alleged fraud supposedly committed upon the petitioners, and
on which the claim for reconveyance is founded, is clearly of no moment
because the sales patent in question was not the necessary consequence
thereof, but rather, it was granted in consideration of her being the highest
bidder and the purchaser of the land. In refutation of the foregoing argument,
it must be observed, firstly, that the petitioners — because of the fraud
practised on them by the Reyes spouses — never came to know about the
public bidding in which the land was offered for sale and therefore could not
have participated therein. Had not the Reyes spouses misrepresented in
their sales application that the land was uncultivated and unoccupied, the
Director of Lands would in all probability have found out about the occupancy
and cultivation of the said land by the petitioners and about Eloy Miguel's
homestead application over the same, and consequently would have denied
the sales application of the Reyes spouses. Secondly, it may justifiably be
postulated that equity will convert one who, for any reason recognized by
courts of equity as a ground for interference, has received legal title from the
Government to lands, which in equity and by the laws of Congress ought to
have gone to another, into a trustee for such other and compel him to convey
the legal title accordingly.13 Thirdly, Eloy Miguel could have very easily
obtained title to the said parcel of land in either of two ways, had he not been
inveigled by Leonor Reyes to file a homestead application. Thus, since he is
a natural-born Filipino citizen, who is not an owner of more than twenty-four
hectares of land, and who since prior to July 4, 1926 (under R.A. 782,
approved June 21, 1952, occupation and cultivation since July 4, 1945, or
prior thereto, is deemed sufficient) has continuously occupied and cultivated
a parcel of land not more than twenty-four hectares in area, he was entitled
to apply for a free patent for, or gratuitous grant, of said land. This is known
as confirmation of imperfect or incomplete titles by administrative
legalization.14 Or, since Eloy Miguel has possessed the land prior to July 26,
1894 and said possession has been continuous, uninterrupted, open,
adverse and in the concept of an owner, there is a presumption juris et de
jure that all necessary conditions for a grant by the State have been complied
with, and he would have been by force of law entitled — pursuant to the
provisions of sec. 48(b) of the Public Land Act — to the registration of his title
to the land. 15
ACCORDINGLY, the decision of the Court of Appeals of May 10, 1962 and
its resolutions of July 23 and September 5, 1962, are set aside. Another
judgment is hereby entered, ordering the private respondent Anacleta M. Vda.
de Reyes to convey the land subject matter of the complaint, in fee simple, to
the petitioners, in the proportion of nine (9) hectares in favor of Eloy Miguel
and fourteen (14) hectares in favor of Demetrio Miguel. In the event of failure
of the said private respondent, for any reason whatsoever, to convey within
thirty (30) days from the date this judgment becomes final, it is hereby
decreed that at the end of that period she will be automatically divested of
her title to the property in dispute, and this decision shall be authority for the
Register of Deeds to forthwith cancel the original of the original certificate of
title P1433 in his office and the owner's copy thereof in the name of Anacleta
M. Vda. de Reyes, and to issue in favor of Eloy Miguel and Demetrio Miguel
new Torrens titles over the land in the proportion above indicated. Costs
against the private respondent Reyes.
Concepcion, C.J., Reyes, J.B.L., Dizon, Makalintal, Zaldivar, Sanchez,
Fernando, Teehankee and Barredo, JJ., concur.
7. [G.R. No. 105902. February 9, 2000]
SEVERINO BARICUATRO, JR., petitioner, vs. COURT OF APPEALS,
TENTH DIVISION, MARIANO B. NEMENIO AND FELISA V. NEMENIO,
CONSTANTINO M. GALEOS AND EUGENIO V.
AMORES, respondents. Lexjuris
DECISION
BUENA, J.:
This appeal by certiorari under Rule 45 of the Rules of Court seeks to annul
and set aside the decision of the Court of Appeals[1] dated April 30, 1992 in
CA-G.R. CV No. 19399, affirming in toto the decision of the Regional Trial
Court of Cebu[2] in Civil Case No. R-15442 for quieting of title.
The antecedent facts as found by the trial court and adopted by the Court of
Appeals are as follows:[3]Jurismis
On October 16, 1968, Severino Baricuatro, Jr., now deceased and
substituted by his legal heirs, bought two (2) lots on an installment basis from
Constantino M. Galeos, one of the private respondents in this petition.[4] The
two lots, designated as Lot Nos. 9 and 10, are part of the Victoria Village
(presently called Spring Village), a subdivision project in Pakigne, Minglanilla,
Cebu.[5] Lot Nos. 9 and 10 were sold on an installment basis for P3,320.00
and P4,515.00, respectively.[6] Petitioner, however, was unable to pay the full
amount to respondent Galeos. At the time the original action for quieting of
title was filed in the trial court, petitioner had an unpaid balance of P1,000.00
as to Lot No. 9 and P3,020.00 as to Lot No. 10. The titles to the said lots
remained in the name of respondent Galeos.[7] As emphasized by the Court
of Appeals, the contract of sale involving Lot No. 10 expressly provided that
"the parties both agree that a final deed of sale shall be executed, in favor of
the buyer upon full and complete payment of the total purchase price agreed
upon."[8]
After the sale, petitioner introduced certain improvements on the said lots
and started to reside therein in 1970.[9] Since then petitioner has been in
actual and physical possession of the two (2) lots.[10]
However, on December 7, 1968, about two (2) months from the date of the
previous sale to petitioner, respondent Galeos sold the entire subdivision,
including the two (2) lots, to his co-respondent Eugenio
Amores.[11] Subsequently, petitioner was informed by respondent Galeos
about the sale to respondent Amores and was advised to pay the balance of
the purchase price of the two (2) lots directly to respondent Amores.[12]Jjjuris
After the sale of the entire subdivision to respondent Amores, he allegedly
took possession thereof and developed the same for residential
purposes.[13] Respondent Amores registered the deed of sale covering the
entire subdivision on February 13, 1969,[14] secured the transfer of the title to
the same in his name, subdivided the entire land, and acquired individual
titles to the subdivided lots in his name, including the title of the two (2)
lots.[15] TCT No. 20016 was issued for Lot No. 9 and TCT No. 20017 for Lot
No. 10, both in the name of respondent Amores.[16]
On December 27, 1974, respondent Amores sold the two (2) lots to the
spouses Mariano and Felisa Nemenio, two of the respondents
herein.[17] Prior to the sale, however, petitioner was informed through a letter
by respondent Amores about the impending sale of the two (2) lots but the
former failed to respond.[18] The respondent spouses Nemenio caused the
transfer of the titles[19] to the said lots and the issuance of tax declarations in
their names. Thereafter, the respondent spouses Nemenio demanded from
petitioner to vacate the said lots but the latter refused to do so.
Thus, a complaint for quieting of title was filed by the respondent spouses
Nemenio against petitioner in the Regional Trial Court of Cebu, Branch V,
docketed as Civil Case No. R-15442.[20]
Subsequently, respondents Galeos and Amores were impleaded by
petitioner as third-party defendants.
On November 27, 1986, the trial court rendered a decision,[21] declaring the
respondent spouses Nemenio as the owners of Lot Nos. 9 and 10. The
dispositive part of the said decision reads:[22]justice
"WHEREFORE, judgment is hereby rendered as follows:
"1. In the main action:
(a) declaring the plaintiffs [spouses Nemenio] owners of Lots
(sic) Nos. 9 and 10 and the corresponding titles validly
issued to plaintiffs [spouses Nemenio] and binding against
the whole world;
(b) ordering the defendant [petitioner herein] to surrender to
plaintiffs the possession of Lots (sic) Nos. 9 and 10 after the
latter indemnify the former the fair value of the improvements
introduced on the said lots by defendant [petitioner herein]
before he knew of the defects of his title over the lots in
question; otherwise, plaintiffs [spouses Nemenio] to sell the
said lots to defendants [should read defendant]; in both
cases, in case of disagreement as to the value of
improvements or value of the said lots, their value to be fix
(sic) by the Court;
(c) ordering the defendant [petitioner herein] to desist from
further asserting his supposed rights to Lots (sic) Nos. 9 and
10;
(d) ordering the defendant [petitioner herein] to pay
P2,500.00 as attorneys fees and litigation expenses of
P1,000.00;
(e) dismissing the defendants [petitioner herein] counterclaim,
with costs against defendant [petitioner herein];
"2. As to the third-party complaint: Jksm
(a) ordering the third-party defendant [respondent]
Constantino M. Galeos to pay or refund defendant [petitioner]
Baricuatro, Jr. the sum of P3,810.00 with legal interest of 6%
per annum from the filing of the third-party complaint on
February 3, 1977, until the amount is fully paid;
(b) dismissing the third-party complaint as against third-party
defendant [respondent] Eugenio Amores;
(c) dismissing third-party defendants counterclaims, without
costs.
SO ORDERED."
On appeal to the respondent court,[23] petitioner assailed the findings of the
trial court that third-party defendant and respondent Amores validly acquired
ownership of the two (2) lots and registered the same in good faith,[24] and
that respondent spouses Nemenio are purchasers in good faith.[25]
Finding no merit in the appellants arguments, the respondent court affirmed
in toto the judgment of the trial court in a decision dated April 30,
1992.[26] The respondent court adopted the factual finding of the trial court
that when the disputed lots were sold to respondent Amores on December 7,
1968, the latter did not find any improvement on the disputed lots and
respondent Galeos title to the same was clean and unencumbered, and that
respondent Amores came to know of the sale between respondent Galeos
and petitioner only after the sale of the lots to him.[27]Es m
On July 9, 1992, petitioner filed the present Petition for Review on Certiorari,
assigning the following errors:[28]
I.
THE HONORABLE COURT OF APPEALS GRAVELY
ERRED IN CONCLUDING THAT THIRD-PARTY
DEFENDANT AMORES VALIDLY ACQUIRED
OWNERSHIP OF THE TWO (2) LOTS IN QUESTION AND
THAT HE WAS IN GOOD FAITH WHEN HE REGISTERED
THE SALE OF THE TWO (2) LOTS IN QUESTION IN THE
REGISTRY OF PROPERTY;
II.
 THE COURT OF APPEALS GRAVELY ERRED IN
CONCLUDING THAT PLAINTIFFS [SPOUSES NEMENIO]
WERE PURCHASERS IN GOOD FAITH;
III.
THE COURT OF APPEALS GRAVELY ERRED IN
CONCLUDING THAT ARTICLE 1544 OF THE NEW CIVIL
CODE OF THE PHILIPPINES IS APPLICABLE;
IV. Es msc
THE COURT OF APPEALS GRAVELY ERRED IN
AFFIRMING THE AWARD OF ATTORNEYS FEES AND
EXPENSES OF LITIGATION TO PLAINTIFFS [SPOUSES
NEMENIO].
Respondent Amores, in his Comment filed on August 31, 1992,[29] on the
other hand, argues that the present petition raises only questions of
fact,[30] hence, it should be dismissed by this Court.
In his Reply dated January 6, 1993,[31] petitioner insists that as an exception
to the general rule, "...[the] Supreme Court also ruled that "THE QUESTION
AS TO WHETHER OR NOT THE CONCLUSION DRAWN BY THE COURT
OF APPEALS FROM PROVEN FACTS IS CORRECT, INVOLVES A
QUESTION OF LAW."[32] (citation omitted).
Petitioner, now substituted by his legal heirs, in his memorandum filed on
March 31, 1993, raises questions of fact which were already passed upon
both by the Court of Appeals and the trial court[33] and reiterates his
contention before the respondent court that respondents Amores and
spouses Nemenio are not purchasers in good faith.[34] Furthermore, petitioner
argues that the general principles on trust must be applied in this case and
not Article 1544 of the New Civil Code.[35]Esmm is
On the other hand, respondent spouses Nemenio, in their memorandum filed
on March 16, 1993, assert that the Torrens system of land registration should
be upheld by this Court, and that an innocent purchaser for value, relying
solely on an unencumbered title, should be protected.[36]
Respondent Amores, in his memorandum filed on March 31, 1993, contends
that there are no compelling reasons to overturn the findings of fact of the
respondent court, and prays for the affirmation of the assailed decision and
the dismissal of the instant petition.[37]
We find the petition to be impressed with merit.
Before addressing the merits of the controversy, we shall first dispose of
certain preliminary matters relating to the application of the mode of appeal
under Rule 45 of the Rules of Court and the guiding principles in an action for
quieting of title. Esmso
At the outset, it should be noted that the jurisdiction of this Court in a petition
for review on certiorari under Rule 45 of the Rules of Court is limited to
reviewing only errors of law. This Court is not a trier of facts. It is a settled
doctrine that findings of fact of the Court of Appeals are binding and
conclusive upon this Court.[38] Such factual findings shall not be disturbed,
unless: (1) the conclusion is a finding grounded entirely on speculation,
surmise and conjecture; (2) the inference made is manifestly mistaken; (3)
there is grave abuse of discretion; (4) the judgment is based on a
misapprehension of facts; (5) the findings of fact are conflicting; (6) the Court
of Appeals went beyond the issues of the case and its findings are contrary
to the admissions of both appellant and appellees; (7) the findings of fact of
the Court of Appeals are contrary to those of the trial court; (8) said findings
of fact are conclusions without citation of specific evidence on which they are
based; (9) the facts set forth in the petition as well as in the petitioner's main
and reply briefs are not disputed by the respondents; and (10) the findings of
fact of the Court of Appeals are premised on the supposed absence of
evidence and contradicted by the evidence on record.[39] After a careful
scrutiny of the records and the pleadings submitted by the parties, we find
exception to the general rule that factual findings by the trial court, especially
when affirmed by the appellate court, are binding and conclusive upon this
Court and hold that the lower courts misappreciated the evidence proffered.
Certain relevant facts were overlooked by the respondent court, which facts,
if properly appreciated, would justify a different conclusion from the one
reached in the assailed decision.
Regarding the nature of the action filed before the trial court, quieting of title
is a common law remedy for the removal of any cloud upon or doubt or
uncertainty with respect to title to real property.[40] Originating in equity
jurisprudence, its purpose is to secure "...an adjudication that a claim of title
to or an interest in property, adverse to that of the complainant, is invalid, so
that the complainant and those claiming under him may be forever afterward
free from any danger of hostile claim."[41] In an action for quieting of title, the
competent court is tasked to determine the respective rights of the
complainant and other claimants, "...not only to place things in their proper
place, to make the one who has no rights to said immovable respect andnot
disturb the other, but also for the benefit of both, so that he who has the right
would see every cloud of doubt over the property dissipated, and he could
afterwards without fear introduce the improvements he may desire, to use,
and even to abuse the property as he deems best (citation omitted)."[42] Such
remedy may be availed of under the circumstances enumerated in the Civil
Code: Mse sm
"ART. 476. Whenever there is a cloud on title to real property
or any interest therein, by reason of any instrument, record,
claim, encumbrance or proceeding which is apparently valid
or effective but is in truth and in fact invalid, ineffective,
voidable, or unenforceable, and may be prejudicial to said
title, an action may be brought to remove such cloud or to
quiet the title.
An action may also be brought to prevent a cloud from being
cast upon title to real property or any interest therein."
With these in mind, we now proceed to resolve the merits of the instant
controversy.
In this petition, petitioner emphatically contends that respondent Amores, the
second buyer, cannot be categorized as a purchaser in good faith, arguing
on the basis of the letter which the latter sent to the petitioner, reminding the
petitioner of his overdue account and warning him that if he could not come
up with the proper solution, it would be his last chance before respondent
Amores does other remedies before the law.[43] The respondent court, in its
decision dated April 30, 1992, rejected this contention and adopted the
finding of the trial court that "...at the time of the sale to [respondent] Amores
by the previous registered owner Constantino Galeos sometime in 1968,
[respondent] Amores found no improvements established on the land subject
of the sale, and [respondent] Galeos title to the lots was clean and
unencumbered, and that [respondent] Amores came to know of the sale by
installment executed between [respondent] Galeos and [petitioner] Baricuatro
only after the sale of said lots to him."[44] The respondent court discarded
petitioners argument and ruled that "[t]he fact that [respondent] Amores
subsequently tried to collect the balance of the purchase price from
[petitioner] Baricuatro as shown by his letter to [petitioner] Baricuatro dated
November 10, 1972 does not by itself prove that he was aware of the
previous transaction with [petitioner] Baricuatro at the time of the sale to him
in 1968, that would place him in the category of a buyer in bad faith."[45]Ex sm
We do not agree. Article 1544 of the Civil Code provides:
"ART. 1544. If the same thing should have been sold to
different vendees, the ownership shall be transferred to the
person who may have first taken possession thereof in good
faith, if it should be movable property.
Should it be immovable property, the ownership shall belong
to the person acquiring it who in good faith first recorded it in
the Registry of Property.
Should there be no inscription, the ownership shall pertain to
the person who in good faith was first in the possession; and,
in the absence thereof, to the person who presents the
oldest title, provided there is good faith." (Emphasis
supplied.)
Under article 1544, the ownership of an immovable property shall belong to
the purchaser who in good faith registers it first in the registry of property.
As we ruled in the case of Uraca vs. Court of Appeals:[46]
"xxx xxx xxxKyle
...the prior registration of the disputed property by the second
buyer does not by itself confer ownership or a better right
over the property. Article 1544 requires that such
registration must be coupled with good faith.
Jurisprudence teaches us that "(t)he governing principle
is primus tempore, potior jure (first in time, stronger in right).
Knowledge gained by the first buyer of the second sale
cannot defeat the first buyer's rights except where the
second buyer registers in good faith the second
sale ahead of the first, as provided by the Civil Code. Such
knowledge of the first buyer does not bar her from availing of
her rights under the law, among them, to register first her
purchase as against the second buyer. But in converso,
knowledge gained by the second buyer of the first sale
defeats his rights even if he is first to register the second
sale, since such knowledge taints his prior registration with
bad faith. This is the price exacted by Article 1544 of the
Civil Code for the second buyer being able to displace
the first buyer; that before the second buyer can obtain
priority over the first, he must show that he acted in
good faith throughout (i.e. in ignorance of the first sale
and of the first buyer's rights) from the time of
acquisition until the title is transferred to him by
registration or failing registration, by delivery of
possession. xxx xxx."[47](Emphasis supplied.)
"The second buyer must show continuing good faith
and innocence or lack of knowledge of the first sale until
 his contract ripens into full ownership through prior ATTY. DOSDOS:
registration as provided by law."[48] (Emphasis supplied.)
Q: Why, at the time of your sale of the Victoria Village to Mr.
For a second buyer to successfully invoke the protection provided by article Amores was Mr. Baricuatro still indebted to you for the two
1544 of the Civil Code, he must possess good faith from the time of parcels of land?
acquisition of the property until the registration of the deed of conveyance
covering the same. Kycalr WITNESS [GALEOS]: Mesm

In the instant case, both lower courts attributed good faith to respondent A: Yes, sir, there was a balance.
Amores, the second buyer of the disputed lots, particularly at the
consummation of the second sale on December 7, 1968 when respondents
ATTY. DOSDOS:
Amores and Galeos executed a deed of absolute sale,[49] after observing that
respondent Amores "found no improvements established on the land subject
of the sale" at the time of the sale in December 1968 and "[respondent] Q: Now --- COURT: (to witness)
Galeos title to the lots was clean and unencumbered," and that "[respondent]
Amores came to know of the sale by installment executed between Q: How much was the balance?
[respondent] Galeos and [petitioner] Baricuatro only after the sale of said lots
to him."[50] WITNESS [GALEOS]:

Assuming arguendo that respondent Amores was in good faith when he A: I cannot recall exactly.
bought the entire subdivision, including the two (2) disputed lots, from
respondent Galeos on December 7, 1968, there is no showing in the assailed COURT:
decision that he continued to act in good faith until the title to the property
was transferred to him by registration in the Register of Deeds on February
Q: Was it your agreement with Mr. Amores that those
13, 1969, as required by Article 1544, hence the need for a reevaluation of
who have obligations will continue to pay to Mr. Amores,
the factual findings of the respondent court. Calrky
is that part of your agreement?
A careful and thorough scrutiny of the records of this case reveals that
WITNESS [GALEOS]: Scslx
respondent Amores did not act in good faith when he registered his title to
the disputed lots on February 13, 1969. Assuming that respondent Amores
was in good faith when he bought the disputed lots on December 7, 1968, A: Yes, sir.
however, when he registered his title on February 13, 1969, the
preponderance of evidence supports the finding that he already had COURT: (TO ATTY. DOSDOS)
knowledge of the previous sale of the disputed lots to petitioner. Such
knowledge tainted his registration with bad faith. To merit protection under Q: Do you have the agreement between Mr. Amores and Mr.
article 1544, the second buyer must act in good faith from the time of the sale Galeos?
until the registration of the same.
ATTY. DOSDOS:
First, as culled from the records of this case, respondent Galeos disclosed to
the trial court that it was his agreement[51] with respondent Amores that those A: The document?
who have obligations with respect to the disputed lots would continue to pay
to respondent Amores, thus:[52]
COURT:
"xxx xxx
Q: Yes?
 ATTY. MARCOS:
A: It is in our possession and we have it marked already your
Honor.
xxx xxx."[53] (Emphasis supplied.)
Hence, the inevitable conclusion to be drawn is that respondent Amores had
knowledge of the previous sale to petitioner when he entered into a contract
of sale with respondent Galeos on December 7, 1968 and cannot therefore
be considered as a purchaser in good faith. Slxs c
Second, respondent Amores testified on direct examination, that he first
learned of the transaction between respondent Galeos and petitioner in 1972
when respondent Galeos showed him a letter addressed to petitioner
(referring to the letter dated October 6, 1972),[54] a copy of which was sent to
him.[55] After receiving such information, he wrote petitioner on November 10,
1972 allegedly to verify the truth of the matter.[56] A reading of respondent
Galeos letter dated October 6, 1972 and addressed to petitioner, however,
readily shows that contrary to his testimony, respondent Amores was not
without knowledge of the previous sale to petitioner when he received the
said letter. In the said letter, respondent Galeos stated that "...he has been
informed that collections effected on the contracts I have assigned to Mr.
Eugenio V. Amores has (sic) not been moving for reasons known only to
you" and that "[i]t appears on his [respondent Amores] record and confirmed
to be correct that all the contracts have gone beyond the limitations and
restrictions pertinent thereto."[57] Consistent with our finding that respondent
Amores was not without knowledge of the previous sale to petitioner when he
acquired and registered the disputed lots, is the tone and contents of
respondent Amores letter dated November 10, 1972 and addressed to
petitioner, written allegedly to verify the truth about the previous sale from
petitioner. As found by respondent court, the said letter obviously shows an
intent to collect the balance of the purchase price of the disputed lots from
petitioner which presupposes knowledge of the previous sale by respondent
Amores. Such an attempt to collect the balance of the purchase price
supports our finding that respondent Amores had knowledge of the previous
sale when he bought the disputed lots.
Third and most enlightening is respondent Amores testimony on cross-
examination which contradicts his own testimony on direct examination
regarding the time when he first learned of the transaction between
respondent Galeos and petitioner. According to respondent Amores, he
learned of petitioners interest in the disputed lots when he had the
subdivision leveled[58]starting in December 1968 until March
1969.[59] Respondent Amores thereafter admitted that in January or February
1969, it was respondent Galeos who told him when they "met at the
downtown" that the disputed lots were already sold to petitioner on
installment basis.[60] He insisted though that he had no knowledge of the
previous sale of the disputed lots to petitioner when he bought the entire
subdivision considering that the same had a clean title.[61]slx mis
Lastly, consistent with his testimony that it was his agreement with
respondent Amores that those who have obligations with respect to the
disputed lots would continue to pay directly to the latter, respondent Galeos
testified that upon the sale of the subdivision to respondent Amores, he
informed petitioner of the said transaction in order that the latter would
continue to pay the balance of the purchase price of the disputed lots directly
to respondent Amores.[62] On cross-examination he disclosed that a few days
before the actual sale[63] of the entire subdivision to respondent Amores, he
first informed petitioner of his decision to sell the said subdivision to
respondent Amores and told petitioner to pay the balance of the purchase
price to respondent Amores.[64]
Having thus found that respondent Amores was not in good faith when he
registered the deed of sale covering the disputed lots, we now consider its
effect on the rights of respondent spouses Nemenio as subsequent
purchasers of the disputed lots.
Respondent spouses Nemenio assert that they are purchasers in good faith,
claiming that they meticulously examined the title of respondent Amores and
"finding the same to be free from any flaws, liens and encumbrances," they
"did not hesitate to buy the land."[65] Having allegedly registered the deeds of
sale in good faith, they submit that the "one who first registers the document
in the Registry of Property has a better right over that sale which is not
registered."[66]Missdaa
We disagree. As we have consistently held in a long line of cases, the rights
of innocent purchasers for value should prevail.[67] It appears from the
records that while respondent spouses Nemenio bought the disputed lots
from respondent Amores on December 27, 1974,[68] they registered the
deeds of sale only on August 30, 1976.[69] Respondent Mariano Nemenio
admitted on cross-examination that the first time he visited petitioners
residence was in early 1975, thus:
"xxx xxx.
ATTY. GONZAGA:
Q: The question is when for the first time after you bought
the property that you visited the Baricuatros residence?
 WITNESS (Mariano Nemenio) Sda adsc
A: The first time it could be I think early 1975. I am not
exactly sure as to the exact date, but I used to pass their
place when I had the opportunity to pass the property. I
always passed with them.
ATTY. GONZAGA:
Q: How many months after you bought these two (2) lots?
WITNESS (Mariano Nemenio)
A: I am not sure exactly as to the exact time but it was
sometime after I bought the property.
ATTY. GONZAGA:
Q: About ten (10) months?
WITNESS (Mariano Nemenio)
A: Ten months after. I am not sure as that was a long time
ago.
xxx xxx."[70]
It may be deduced from the foregoing inquisition that having visited
petitioners residence in early 1975, respondent spouses Nemenio cannot
claim to be purchasers in good faith when they registered their title to the
disputed lots on August 30, 1976. The registration by the respondent
spouses Nemenio was done in bad faith, hence, it amounted to no
"inscription" at all. As we held in the case of Philippine Stock Exchange,
Inc. vs. Court of Appeals,[71] "[t]he inscription in the registry, to be effective,
must be made in good faith. The defense of indefeasibility of a Torrens Title
does not extend to a transferee who takes the certificate of title with notice of
a flaw."[72] "[A] holder in bad faith of a certificate of title is not entitled to the
protection of the law, for the law cannot be used as a shield for frauds."[73]Rtc
spped
WHEREFORE, the decision of the respondent Court of Appeals, dated April
30, 1992, in CA-G.R. CV No. 19399, is REVERSED and judgment is hereby
rendered:
1) Declaring the petitioner SEVERINO BARICUATRO, JR. as the rightful
owner of the disputed lots and ordering him to pay respondent Constantino M.
Galeos the unpaid balance of P1,000.00 as to Lot No. 9 and P3,020.00 as to
Lot No. 10;
2) Declaring the deed of sale dated December 7, 1968 between respondent
Constantino M. Galeos and respondent Eugenio V. Amores insofar as Lot 9
and 10 of Spring Village is concerned as null and void, thus, ordering
respondent Constantino M. Galeos to reimburse respondent Eugenio V.
Amores the value/purchase price the latter paid for Lots 9 and 10 undert the
said deed of sale, with legal interest from the date of finality of this
decision; Korte
3) Declaring the deed of sale dated December 27, 1974 between respondent
Eugenio V. Amores and respondent spouses Mariano B. Nemenio and Felisa
V. Nemenio as null and void, thus, ordering respondent Eugenio V. Amores
to reimburse respondent spouses Mariano B. Nemenio and Felisa V.
Nemenio the purchase price they paid by virtue of the said deed of sale, with
legal interest from the date of finality of this decision;
4) Ordering the Register of Deeds of the province of Cebu to cancel Transfer
Certificate of Title Nos. 39002 and 39003 in the name of spouses Mariano B.
Nemenio and Felisa V. Nemenio, and Transfer Certificate of Title Nos. 20016
and 20017 in the name of Eugenio V. Amores; and, to issue a new Certificate
of Title for Lot No.9 and Lot No. 10 in favor of petitioner Severino Baricuatro,
Jr. in lieu of the foregoing certificates of title, upon payment of all lawful fees,
charges and taxes;
5) Ordering private respondents Mariano and Felisa Nemenio, Constantino M.
Galeos and Eugenio V. Amores to pay P5,000.00 as attorneys fees and
litigation expenses of P1,000.00.
Costs against private respondents. Sclaw
SO ORDERED.
Bellosillo, (Chairman), Mendoza, Quisumbing, and De Leon, Jr., JJ., concur.
8. [G.R. No. 98045. June 26, 1996]
DESAMPARADO VDA. DE NAZARENO and LETICIA NAZARENO
TAPIA, petitioners, vs. THE COURT OF APPEALS, MR. & MRS. JOSE
SALASALAN, MR. & MRS. LEO RABAYA, AVELINO LABIS, HON.
ROBERTO G. HILARIO, ROLLEO I. IGNACIO, ALBERTO M. GILLERA
and HON. ABELARDO G. PALAD, JR., in their official and/or private
capacities, respondents.
SYLLABUS
1. CIVIL LAW; OWNERSHIP; RIGHTS OF ACCESSION WITH RESPECT
TO IMMOVABLE PROPERTY; ARTICLE 457; REQUISITES.- In the
case of Meneses vs. CA, this Court held that accretion, as a mode of
acquiring property under Art. 457 of the Civil Code, requires the
concurrence of these requisites: (1) that the deposition of soil or
sediment be gradual and imperceptible; (2) that it be the result of the
action of the waters of the river (or sea); and (3) that the land where
accretion takes place is adjacent to the banks of rivers (or the sea
coast). These are called the rules on alluvion which if present in a case,
give to the owners of lands adjoining the banks of rivers or streams any
accretion gradually received from the effects of the current of waters.
2. ID.; ID.; ID.; ID.; ID.; NOT PRESENT IN CASE AT BAR.- Where the
accretion was formed by the dumping of boulders, soil and other filling
materials on portions of the Balacanas Creek and the Cagayan River
bounding petitioner's land, it cannot be claimed that the accumulation
was gradual and imperceptible, resulting from the action of the waters or
the current of the creek and the river. In Hilario vs. City of Manila, this
Court held that the word current indicates the participation of the body of
water in the ebb and flow of waters due to high and low tide. Not having
met the first and second requirements of the rules of alluvion, petitioners
cannot claim the rights of a riparian owner.
3. ID.; ID.; ID.; ID.; ID.; THAT DEPOSIT IS DUE TO THE CURRENT OF
THE RIVER, MANDATORY.- In Republic vs. CA, this Court ruled that
the requirement that the deposit should be due to the effect of the
current of the river is indispensable. This excludes from Art. 457 of the
Civil Code all deposits caused by human intervention. Putting it
differently, alluvion must be the exclusive work of nature. Thus,
in Tiongco vs. Director of Lands, et al., where the land was not formed
solely by the natural effect of the water current of the river bordering
said land but is also the consequence of the direct and deliberate
intervention of man, it was deemed a man-made accretion and, as such,
part of the public domain. In the case at bar, the subject land was the
direct result of the dumping of sawdust by the Sun Valley Lumber Co.
consequent to its sawmill operations.
4. ID.; PUBLIC LANDS; FINDINGS AS SUCH BY THE BUREAU OF
LANDS, RESPECTED.- The mere filing of the Miscellaneous Sales
Application constituted an admission that the land being applied for was
public land, having been the subject of a Survey Plan wherein said land
was described as an orchard. Furthermore, the Bureau of Lands
classified the subject land as an accretion area which was formed by
deposits of sawdust in the Balacanas Creek and the Cagayan river, in
accordance with the ocular inspection conducted by the Bureau of
Lands. This Court has often enough held that findings of administrative
agencies which have acquired expertise because their jurisdiction is
confined to specific matters are generally accorded not only respect but
even finality. Again, when said factual findings are affirmed by the Court
of Appeals, the same are conclusive on the parties and not reviewable
by this Court.
5. ID.; PUBLIC LAND LAW; JURISDICTION OVER PUBLIC LANDS.-
Having determined that the subject land is public land, a fortiori, the
Bureau of Lands, as well as the Office of the Secretary of Agriculture
and Natural Resources have jurisdiction over the same in accordance
with the Public Land Law. Under Sections 3 and 4 thereof, the Director
of Lands has jurisdiction, authority and control over public lands. Here
respondent Palad as Director of Lands, is authorized to exercise
executive control over any form of concession, disposition and
management of the lands of the public domain. He may issue decisions
and orders as he may see fit under the circumstances as long as they
are based on the findings of fact. In the case of Calibo vs.
Ballesteros, this Court held that where, in the disposition of public lands,
the Director of Lands bases his decision on the evidence thus presented,
he clearly acts within his jurisdiction, and if he errs in appraising the
evidence, the error is one of judgment, but not an act of grave abuse of
discretion annullable by certiorari.
6. ADMINISTRATIVE LAW; ADMINISTRATIVE REMEDIES; EXHAUSTED
IN CASE AT BAR.- The administrative remedies have been
exhausted. Petitioners could not have intended to appeal to respondent
Ignacio as an Officer-In-Charge of the Bureau of Lands. The decision
being appealed from was the decision of respondent Hilario who was
the Regional Director of the Bureau of Lands. Said decision was made
"for and by authority of the Director of Lands." It would be incongruous
to appeal the decision of the Regional Director of the Bureau of Lands
acting for the Director of the Bureau of Lands to an Officer-In-Charge of
the Bureau of Lands. In any case, respondent Ignacio's official
designation was "Undersecretary of the Department of Agriculture and
Natural Resources." He was only an "Officer-In-Charge" of the Bureau
of Lands. When he acted on the late Antonio Nazareno's motion for
 reconsideration by affirming or adopting respondent Hilario's decision,
he was acting on said motion as an Undersecretary on behalf of the
Secretary of the Department. In the case ofHamoy vs. Secretary
of Agriculture and Natural Resources, this Court held that the
Undersecretary of Agriculture and Natural Resources may modify, adopt,
or set aside the orders or decisions of the Director of Lands with respect
to questions involving public lands under the administration and control
of the Bureau of Lands and the Department of Agriculture and Natural
Resources. He cannot, therefore, be said to have acted beyond the
bounds of his jurisdiction under Sections 3, 4 and 5 of Commonwealth
Act No. 141.
APPEARANCES OF COUNSEL
Manolo L. Tagarda, Sr. for petitioners.
Arturo R. Legaspi for private respondents.
DECISION
ROMERO, J.:
Petitioners Desamparado Vda. de Nazareno and Leticia Nazareno
Tapia challenge the decision of the Court of Appeals which affirmed the
dismissal of petitioners' complaint by the Regional Trial Court of Misamis
Oriental, Branch 22. The complaint was for annulment of the verification,
report and recommendation, decision and order of the Bureau of Lands
regarding a parcel of public land.
The only issue involved in this petition is whether or not petitioners
exhausted administrative remedies before having recourse to the courts.
The subject of this controversy is a parcel of land situated in Telegrapo,
Puntod, Cagayan de Oro City. Said land was formed as a result of sawdust
dumped into the dried-up Balacanas Creek and along the banks of the
Cagayan river.
Sometime in 1979, private respondents Jose Salasalan and Leo
Rabaya leased the subject lots on which their houses stood from one Antonio
Nazareno, petitioners' predecessor-in-interest. In the latter part of 1982,
private respondents allegedly stopped paying rentals. As a result, Antonio
Nazareno and petitioners filed a case for ejectment with the Municipal Trial
Court of Cagayan de Oro City, Branch 4. A decision was rendered against
private respondents, which decision was affirmed by the Regional Trial Court
of Misamis Oriental, Branch 20.
The case was remanded to the municipal trial court for execution of
judgment after the same became final and executory. Private respondents
filed a case for annulment of judgment before the Regional Trial Court of
Misamis Oriental, Branch 24 which dismissed the same. Antonio Nazareno
and petitioners again moved for execution of judgment but private
respondents filed another case for certiorari with prayer for restraining order
and/or writ of preliminary injunction with the Regional Trial Court of Misamis
Oriental, Branch 25 which was likewise dismissed. The decision of the lower
court was finally enforced with the private respondents being ejected from
portions of the subject lots they occupied.
Before he died, Antonio Nazareno caused the approval by the Bureau of
Lands of the survey plan designated as Plan Csd-106-00571 with a view to
perfecting his title over the accretion area being claimed by him. Before the
approved survey plan could be released to the applicant, however, it was
protested by private respondents before the Bureau of Lands.
In compliance with the order of respondent District Land Officer Alberto
M. Gillera, respondent Land Investigator Avelino G. Labis conducted an
investigation and rendered a report to the Regional Director recommending
that Survey Plan No. MSI-10-06-000571-D (equivalent to Lot No. 36302, Cad.
237) in the name of Antonio Nazareno, be cancelled and that private
respondents be directed to file appropriate public land applications.
Based on said report, respondent Regional Director of the Bureau of
Lands Roberto Hilario rendered a decision ordering the amendment of the
survey plan in the name of Antonio Nazareno by segregating therefrom the
areas occupied by the private respondents who, if qualified, may file public
land applications covering their respective portions.
Antonio Nazareno filed a motion for reconsideration with respondent
Rolleo Ignacio, Undersecretary of the Department of Natural Resources and
Officer-in-Charge of the Bureau of Lands who denied the
motion. Respondent Director of Lands Abelardo Palad then ordered him to
vacate the portions adjudicated to private respondents and remove whatever
improvements they have introduced thereon. He also ordered that private
respondents be placed in possession thereof.
Upon the denial of the late Antonio Nazareno's motion for
reconsideration, petitioners Desamparado Vda. de Nazareno and Leticia
Tapia Nazareno, filed a case before the RTC, Branch 22 for annulment of the
following: order of investigation by respondent Gillera, report and
recommendation by respondent Labis, decision by respondent Hilario, order
by respondent Ignacio affirming the decision of respondent Hilario and order
of execution by respondent Palad. The RTC dismissed the complaint for
failure to exhaust administrative remedies which resulted in the finality of the
administrative decision of the Bureau of Lands.
On appeal, the Court of Appeals affirmed the decision of the RTC
dismissing the complaint. Applying Section 4 of C.A. No. 141, as amended, it
contended that the approval of the survey plan belongs exclusively to the
Director of Lands. Hence, factual findings made by the Metropolitan Trial
Court respecting the subject land cannot be held to be controlling as the
preparation and approval of said survey plans belong to the Director of Lands
and the same shall be conclusive when approved by the Secretary of
Agriculture and Natural Resources.[1]
Furthermore, the appellate court contended that the motion for
reconsideration filed by Antonio Nazareno cannot be considered as an
appeal to the Office of the Secretary of Agriculture and Natural Resources,
as mandated by C.A. No. 141 inasmuch as the same had been acted upon
by respondent Undersecretary Ignacio in his capacity as Officer-in-Charge of
the Bureau of Lands and not as Undersecretary acting for the Secretary of
Agriculture and Natural Resources. For the failure of Antonio Nazareno to
appeal to the Secretary of Agriculture and Natural Resources, the present
case does not fall within the exception to the doctrine of exhaustion of
administrative remedies. It also held that there was no showing of
oppressiveness in the manner in which the orders were issued and executed.
Hence, this petition.
Petitioners assign the following errors:
I. PUBLIC RESPONDENT COURT OF APPEALS IN A
WHIMSICAL, ARBITRARY AND CAPRICIOUS MANNER
AFFIRMED THE DECISION OF THE LOWER COURT WHICH
IS CONTRARY TO THE PREVAILING FACTS AND THE LAW
ON THE MATTER;
II. PUBLIC RESPONDENT COURT OF APPEALS IN A
WHIMSICAL, ARBITRARY AND CAPRICIOUS MANNER
AFFIRMED THE DECISION OF THE LOWER COURT
DISMISSING THE ORIGINAL CASE WHICH FAILED TO
CONSIDER THAT THE EXECUTION ORDER OF PUBLIC
RESPONDENT ABELARDO G. PALAD, JR., DIRECTOR OF
LANDS, MANILA, PRACTICALLY CHANGED THE DECISION
OF PUBLIC RESPONDENT ROBERTO HILARIO, REGIONAL
DIRECTOR, BUREAU OF LANDS, REGION 10, THUS
MAKING THE CASE PROPER SUBJECT FOR ANNULMENT
WELL WITHIN THE JURISDICTION OF THE LOWER COURT.
The resolution of the above issues, however, hinges on the question of
whether or not the subject land is public land. Petitioners claim that the
subject land is private land being an accretion to his titled property, applying
Article 457 of the Civil Code which provides:
"To the owners of lands adjoining the banks of rivers belong the accretion
which they gradually receive from the effects of the current of the waters."
In the case of Meneses v. CA,[2] this Court held that accretion, as a
mode of acquiring property under Art. 457 of the Civil Code, requires the
concurrence of these requisites: (1) that the deposition of soil or sediment be
gradual and imperceptible; (2) that it be the result of the action of the waters
of the river (or sea); and (3) that the land where accretion takes place is
adjacent to the banks or rivers (or the sea coast). These are called the rules
on alluvion which if present in a case, give to the owners of lands adjoining
the banks of rivers or streams any accretion gradually received from the
effects of the current of waters.
For petitioners to insist on the application of these rules on alluvion to
their case, the above-mentioned requisites must be present. However, they
admit that the accretion was formed by the dumping of boulders, soil and
other filling materials on portions of the Balacanas Creek and the Cagayan
River bounding their land.[3] It cannot be claimed, therefore, that the
accumulation of such boulders, soil and other filling materials was gradual
and imperceptible, resulting from the action of the waters or the current of the
Balacanas Creek and the Cagayan River. In Hilario v. City of Manila,[4] this
Court held that the word "current" indicates the participation of the body of
water in the ebb and flow of waters due to high and low tide. Petitioners'
submission not having met the first and second requirements of the rules on
alluvion, they cannot claim the rights of a riparian owner.
In any case, this court agrees with private respondents that petitioners
are estopped from denying the public character of the subject land, as well
as the jurisdiction of the Bureau of Lands when the late Antonio Nazareno
filed his Miscellaneous Sales Application MSA (G-6) 571.[5] The mere filing of
said Application constituted an admission that the land being applied for was
public land, having been the subject of Survey Plan No. MSI-10-06-000571-D
(Equivalent to Lot No. 36302, Cad-237) which was conducted as a
consequence of Antonio Nazareno's Miscellaneous Sales Application
wherein said land was described as an orchard. Said description by Antonio
Nazareno was, however, controverted by respondent Labis in his
investigation report to respondent Hilario based on the findings of his ocular
inspection that said land actually covers a dry portion of Balacanas Creek
and a swampy portion of Cagayan River. The investigation report also states
that except for the swampy portion which is fully planted to nipa palms, the
whole area is fully occupied by a part of a big concrete bodega of petitioners
and several residential houses made of light materials, including those of
private respondents which were erected by themselves sometime in the early
part of 1978.[6]
Furthermore, the Bureau of Lands classified the subject land as an
accretion area which was formed by deposits of sawdust in the Balacanas
Creek and the Cagayan river, in accordance with the ocular inspection
conducted by the Bureau of Lands.[7] This Court has often enough held that
findings of administrative agencies which have acquired expertise because
their jurisdiction is confined to specific matters are generally accorded not
only respect but even finality.[8] Again, when said factual findings are affirmed
by the Court of Appeals, the same are conclusive on the parties and not
reviewable by this Court.[9]
It is this Court's irresistible conclusion, therefore, that the accretion was
man-made or artificial. In Republic v. CA,[10] this Court ruled that the
requirement that the deposit should be due to the effect of the current of the
river is indispensable. This excludes from Art. 457 of the Civil Code all
deposits caused by human intervention. Putting it differently, alluvion must be
the exclusive work of nature. Thus, in Tiongco v. Director of Lands, et
al.,[11] where the land was not formed solely by the natural effect of the water
current of the river bordering said land but is also the consequence of the
direct and deliberate intervention of man, it was deemed a man-made
accretion and, as such, part of the public domain.
In the case at bar, the subject land was the direct result of the dumping
of sawdust by the Sun Valley Lumber Co. consequent to its sawmill
operations.[12] Even if this Court were to take into consideration petitioners'
submission that the accretion site was the result of the late Antonio
Nazareno's labor consisting in the dumping of boulders, soil and other filling
materials into the Balacanas Creek and Cagayan River bounding his
land,[13] the same would still be part of the public domain.
Having determined that the subject land is public land, a fortiori, the
Bureau of Lands, as well as the Office of the Secretary of Agriculture and
Natural Resources have Jurisdiction over the same in accordance with the
Public Land Law. Accordingly, the court a quo dismissed petitioners'
complaint for non-exhaustion of administrative remedies which ruling the
Court of Appeals affirmed.
However, this Court agrees with petitioners that administrative remedies
have been exhausted. Petitioners could not have intended to appeal to
respondent Ignacio as an Officer-in-Charge of the Bureau of Lands. The
decision being appealed from was the decision of respondent Hilario who
was the Regional Director of The Bureau of Lands. Said decision was made
"for and by authority of the Director of Lands."[14] It would be incongruous to
appeal the decision of the Regional Director of the Bureau of Lands acting for
the Director of the Bureau of Lands to an Officer-In-Charge of the Bureau of
Lands.
In any case, respondent Rolleo Ignacio's official designation was
"Undersecretary of the Department of Agriculture and Natural Resources."
He was only an "Officer-In-Charge" of the Bureau of Lands. When he acted
on the late Antonio Nazareno's motion for reconsideration by affirming or
adopting respondent's Hilario's decision, he was acting on said motion as an
Undersecretary on behalf of the Secretary of the Department. In the case
of Hamoy v. Secretary of Agriculture and Natural Resources,[15] This Court
held that the Undersecretary of Agriculture and Natural Resources may
modify, adopt, or set aside the orders or decisions of the Director of Lands
with respect to questions involving public lands under the administration and
control of the Bureau of Lands and the Department of Agriculture and Natural
Resources. He cannot therefore, be said to have acted beyond the bounds of
his jurisdiction under Sections 3, 4 and 5 of Commonwealth Act No. 141.[16]
As borne out by the administrative findings, the controverted land is
public land, being an artificial accretion of sawdust. As such, the Director of
Lands has jurisdiction, authority and control over the same, as mandated
under Sections 3 and 4 of the Public Land Law (C.A. No. 141) which states,
thus:
"Sec. 3. The Secretary of Agriculture and Natural Resources shall be the
exclusive officer charged with carrying out the provisions of this Act through
the Director of Lands who shall act under his immediate control.
Sec. 4. Subject to said control, the Director of Lands shall have direct
executive control of the survey, classification, lease, sale or any other form of
concession or disposition and management of the lands of the public domain,
and his decisions as to questions of fact shall be conclusive when approved
by the Secretary of Agriculture and Natural Resources."
In connection with the second issue, petitioners ascribe whim,
arbitrariness or capriciousness in the execution order of public respondent
Abelardo G. Palad, the Director of Lands. This Court finds otherwise since
said decision was based on the conclusive finding that the subject land was
public land. Thus, this Court agrees with the Court of Appeals that the
Director of Lands acted within his rights when he issued the assailed
execution order, as mandated by the aforecited provisions.
Petitioners' allegation that respondent Palad's execution order directing
them to vacate the subject land practically changed respondent Hilario's
decision is baseless. It is incorrect for petitioners to assume that respondent
Palad awarded portions of the subject land to private respondents
Salasalans and Rayabas as they had not yet been issued patents or titles
over the subject land. The execution order merely directed the segregation of
petitioners' titled lot from the subject land which was actually being occupied
by private respondents before they were ejected from it. Based on the finding
that private respondents were actually in possession or were actually
occupying the subject land instead of petitioners, respondent Palad, being
the Director of Lands and in the exercise of this administrative discretion,
directed petitioners to vacate the subject land on the ground that private
respondents have a preferential right, being the occupants thereof.
While private respondents may not have filed their application over the
land occupied by them, they nevertheless filed their protest or opposition to
petitioners' Miscellaneous Sales Application, the same being preparatory to
the filing of an application as they were in fact directed to do so. In any case,
respondent Palad's execution order merely implements respondent Hilario's
order. It should be noted that petitioners' own application still has to be given
due course.[17]
As Director of lands, respondent Palad is authorized to exercise
executive control over any form of concession, disposition and management
of the lands of the public domain.[18] He may issue decisions and orders as
he may see fit under the circumstances as long as they are based on the
findings of fact.
In the case of Calibo v. Ballesteros,[19] this Court held that where, in the
disposition of public lands, the Director of Lands bases his decision on the
evidence thus presented, he clearly acts within his jurisdiction, and if he errs
in appraising the evidence, the error is one of judgment, but not an act or
grave abuse of discretion annullable by certiorari. Thus, except for the issue
of non-exhaustion of administrative remedies, this Court finds no reversible
error nor grave abuse of discretion in the decision of the Court of Appeals.
WHEREFORE, the petition is DISMISSED for lack of merit.
SO ORDERED.
Regalado (Chairman), Puno, Mendoza, and Torres, Jr., JJ., concur.
9. [G.R. No. 120303. July 24, 1996]
FEDERICO GEMINIANO, MARIA GEMINIANO, ERNESTO GEMINIANO,
ASUNCION GEMINIANO, LARRY GEMINIANO, and MARLYN
GEMINIANO, petitioners, vs. COURT OF APPEALS, DOMINADOR
NICOLAS, and MARY A. NICOLAS, respondents.
DECISION
DAVIDE, JR., J.:
This petition for review on certiorari has its origins in Civil Case No.
9214 of Branch 3 of the Municipal Trial Court in Cities (MTCC) in Dagupan
City for unlawful detainer and damages.The petitioners ask the Court to set
aside the decision of the Court of Appeals affirming the decision of Branch 40
of the Regional Trial Court (RTC) of Dagupan City, which, in turn, reversed
the MTCC; ordered the petitioners to reimburse the private respondents the
value of the house in question and other improvements; and allowed the
latter to retain the premises until reimbursement was made.
It appears that Lot No. 3765-B-1 containing an area of 314 square
meters was originally owned by the petitioners' mother, Paulina Amado vda.
de Geminiano. On a 12-square-meter portion of that lot stood the petitioners'
unfinished bungalow, which the petitioners sold in November 1978 to the
private respondents for the sum of P6,000.00, with an alleged promise to sell
to the latter that portion of the lot occupied by the house. Subsequently, the
petitioners' mother executed a contract of lease over a 126 square-meter
portion of the lot, including that portion on which the house stood, in favor of
the private respondents for P40.00 per month for a period of seven years
commencing on 15 November 1978.[1] The private respondents then
introduced additional improvements and registered the house in their
names. After the expiration of the lease contract in November 1985, however,
the petitioners' mother refused to accept the monthly rentals.
It turned out that the lot in question was the subject of a suit, which
resulted in its acquisition by one Maria Lee in 1972. In 1982, Lee sold the lot
to Lily Salcedo, who in turn sold it in 1984 to the spouses Agustin and Ester
Dionisio.
On 14 February 1992, the Dionisio spouses executed a Deed of
Quitclaim over the said property in favor of the petitioners.[2] As such, the lot
was registered in the latter's names.[3]
On 9 February 1993, the petitioners sent, via registered mail, a letter
addressed to private respondent Mary Nicolas demanding that she vacate
the premises and pay the rentals in arrears within twenty days from notice.[4]
Upon failure of the private respondents to heed the demand, the
petitioners filed with the MTCC of Dagupan City a complaint for unlawful
detainer and damages.
During the pre-trial conference, the parties agreed to confine the issues
to: (1) whether there was an implied renewal of the lease which expired in
November 1985; (2) whether the lessees were builders in good faith and
entitled to reimbursement of the value of the house and improvements; and
(3) the value of the house.
The parties then submitted their respective position papers and the case
was heard under the Rule on Summary Procedure.
On the first issue, the court held that since the petitioners' mother was
no longer the owner of the lot in question at the time the lease contract was
executed in 1978, in view of its acquisition by Maria Lee as early as 1972,
there was no lease to speak of, much less, a renewal thereof. And even if the
lease legally existed, its implied renewal was not for the period stipulated in
the original contract, but only on a month-to-month basis pursuant to Article
1687 of the Civil Code. The refusal of the petitioners' mother to accept the
rentals starting January 1986 was then a clear indication of her desire to
terminate the monthly lease. As regards the petitioners' alleged failed
promise to sell to the private respondents the lot occupied by the house, the
court held that such should be litigated in a proper case before the proper
forum, not an ejectment case where the only issue was physical possession
of the property.
The court resolved the second issue in the negative, holding that
Articles 448 and 546 of the Civil Code, which allow possessors in good faith
to recover the value of improvements and retain the premises until
reimbursed, did not apply to lessees like the private respondents, because
the latter knew that their occupation of the premises would continue only
during the life of the lease. Besides, the rights of the private respondents
were specifically governed by Article 1678, which allows reimbursement of
up to one-half of the value of the useful improvements, or removal of the
improvements should the lessor refuse to reimburse.
On the third issue, the court deemed as conclusive the private
respondents' allegation that the value of the house and improvements was
P180,000.00, there being no controverting evidence presented.
The trial court thus ordered the private respondents to vacate the
premises, pay the petitioners P40.00 a month as reasonable compensation
for their stay thereon from the filing of the complaint on 14 April 1993 until
they vacated, and to pay the sum of P1,000.00 as attorney's fees, plus
costs.[5]
On appeal by the private respondents, the RTC of Dagupan City
reversed the trial court's decision and rendered a new judgment: (1) ordering
the petitioners to reimburse the private respondents for the value of the
house and improvements in the amount of P180,000.00 and to pay the latter
P10,000.00 as attorney's fees and P2,000.00 as litigation expenses; and (2)
allowing the private respondents to remain in possession of the premises
until they were fully reimbursed for the value of the house.[6] It ruled that
since the private respondents were assured by the petitioners that the lot
they leased would eventually be sold to them, they could be considered
builders in good faith, and as such, were entitled to reimbursement of the
value of the house and improvements with the right of retention until
reimbursement had been made.
On appeal, this time by the petitioners, the Court of Appeals affirmed the
decision of the RTC[7] and denied[8] the petitioners' motion for
reconsideration. Hence, the present petition.
The Court is confronted with the issue of which provision of law governs
the case at bench: Article 448 or Article 1678 of the Civil Code? The said
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.
xxx xxx xxx
Art. 1678. If the lessee makes, in good faith, useful improvements which are
suitable to the use for which the lease is intended, without altering the form
or substance of the property leased, the lessor upon the termination of the
lease shall pay the lessee one-half of the value of the improvements at that
time. Should the lessor refuse to reimburse said amount, the lessee may
remove the improvements, even though the principal thing may suffer
damage thereby. He shall not, however, cause any more impairment upon
the property leased than is necessary.
With regard to ornamental expenses, the lessee shall not be entitled to any
reimbursement, but he may remove the ornamental objects, provided no
damage is caused to the principal thing, and the lessor does not choose to
retain them by paying their value at the time the lease is extinguished.
The crux of the said issue then is whether the private respondents are
builders in good faith or mere lessees.
The private respondents claim they are builders in good faith, hence,
Article 448 of the Civil Code should apply. They rely on the lack of title of the
petitioners' mother at the time of the execution of the contract of lease, as
well as the alleged assurance made by the petitioners that the lot on which
the house stood would be sold to them.
It has been said that while the right to let property is an incident of title
and possession, a person may be a lessor and occupy the position of a
landlord to the tenant although he is not the owner of the premises let.[9] After
all, ownership of the property is not being transferred,[10] only the temporary
use and enjoyment thereof.[11]
In this case, both parties admit that the land in question was originally
owned by the petitioners' mother. The land was allegedly acquired later by
one Maria Lee by virtue of an extrajudicial foreclosure of mortgage. Lee,
however, never sought a writ of possession in order that she gain possession
of the property in question.[12] The petitioners' mother therefore remained in
possession of the lot.
It is undisputed that the private respondents came into possession of a
126 square-meter portion of the said lot by virtue of a contract of lease
executed by the petitioners' mother in their favor. The juridical relation
between the petitioners' mother as lessor, and the private respondents as
lessees, is therefore well-established, and carries with it a recognition of the
lessor's title.[13] The private respondents, as lessees who had undisturbed
possession for the entire term under the lease, are then estopped to deny
their landlord's title, or to assert a better title not only in themselves, but also
in some third person while they remain in possession of the leased premises
and until they surrender possession to the landlord.[14] This estoppel applies
even though the lessor had no title at the time the relation of lessor and
lessee was created,[15] and may be asserted not only by the original lessor,
but also by those who succeed to his title.[16]
Being mere lessees, the private respondents knew that their occupation
of the premises would continue only for the life of the lease. Plainly, they
cannot be considered as possessors nor builders in good faith.[17]
In a plethora of cases,[18] this Court has held that Article 448 of the Civil
Code, in relation to Article 546 of the same Code, which 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. It does not
apply where one's only interest is that of a lessee under a rental contract;
otherwise, it would always be in the power of the tenant to "improve" his
landlord out of his property.
Anent the alleged promise of the petitioners to sell the lot occupied by
the private respondents' house, the same was not substantiated by
convincing evidence. Neither the deed of sale over the house nor the
contract of lease contained an option in favor of the respondent spouses to
purchase the said lot. And even if the petitioners indeed promised to sell, it
would not make the private respondents possessors or builders in good faith
so as to be covered by the provisions of Article 448 of the Civil Code. The
latter cannot raise the mere expectancy of ownership of the aforementioned
lot because the alleged promise to sell was not fulfilled nor its existence even
proven. The first thing that the private respondents should have done was to
reduce the alleged promise into writing, because under Article 1403 of the
Civil Code, an agreement for the sale of real property or an interest therein is
unenforceable, unless some note or memorandum thereof be produced. Not
having taken any steps in order that the alleged promise to sell may be
enforced, the private respondents cannot bank on that promise and profess
any claim nor color of title over the lot in question.
There is no need to apply by analogy the provisions of Article 448 on
indemnity as was done in Pecson vs. Court of Appeals,[19] because the
situation sought to be avoided and which would justify the application of that
provision, is not present in this case. Suffice it to say, "a state of forced co-
ownership" would not be created between the petitioners and the private
respondents. For, as correctly pointed out by the petitioners, the rights of the
private respondents as lessees are governed by Article 1678 of the Civil
Code which allows reimbursement to the extent of one-half of the value of
the useful improvements.
It must be stressed, however, that the right to indemnity under Article
1678 of the Civil Code arises only if the lessor opts to appropriate the
improvements. Since the petitioners refused to exercise that option,[20] the
private respondents cannot compel them to reimburse the one-half value of
the house and improvements. Neither can they retain the premises until
reimbursement is made. The private respondents' sole right then is to
remove the improvements without causing any more impairment upon the
property leased than is necessary.[21]
WHEREFORE, judgment is hereby rendered GRANTING the instant
petition; REVERSING and SETTING ASIDE the decision of the Court of
Appeals of 27 January 1995 in CA-G.R. SP No. 34337; and REINSTATING
the decision of Branch 3 of the Municipal Trial Court in Cities of Dagupan
City in Civil Case No. 9214 entitled "Federico Geminiano, et al. vs.
Dominador Nicolas, et al."
Costs against the private respondents.
SO ORDERED.
Narvasa, C.J., (Chairman), Melo, Francisco, and Panganiban,
JJ., concur.
10. 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.
11. 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.
12. [G.R. No. 108894. February 10, 1997]
TECNOGAS PHILIPPINES MANUFACTURING CORPORATION, petitioner,
vs. COURT OF APPEALS (FORMER SPECIAL SEVENTEENTH DIVISION)
and EDUARDO UY, respondents.
DECISION
PANGANIBAN, J.:
The parties in this case are owners of adjoining lots in Paraaque, Metro
Manila. It was discovered in a survey that a portion of a building of petitioner,
which was presumably constructed by its predecessor-in-interest,
encroached on a portion of the lot owned by private respondent. What are
the rights and obligations of the parties? Is petitioner considered a builder in
bad faith because, as held by respondent Court, he is presumed to know the
metes and bounds of his property as described in his certificate of title? Does
petitioner succeed into the good faith or bad faith of his predecessor-in-
interest which presumably constructed the building?
These are the questions raised in the petition for review of the
Decision[1] dated August 28, 1992, in CA-G.R. CV No. 28293 of respondent
Court[2] where the disposition reads:[3]
WHEREFORE, premises considered, the Decision of the Regional Trial
Court is hereby reversed and set aside and another one entered -
1. Dismissing the complaint for lack of cause of action;
2. Ordering Tecnogas to pay the sum of P2,000.00 per month as reasonable
rental from October 4, 1979 until appellee vacates the land;
3. To remove the structures and surrounding walls on the encroached area;
4. Ordering appellee to pay the value of the land occupied by the two-storey
building;
5. Ordering appellee to pay the sum of P20,000.00 for and as attorneys fees;
6. Costs against appellee.
Acting on the motions for reconsideration of both petitioner and private
respondent, respondent Court ordered the deletion of paragraph 4 of the
dispositive portion in an Amended Decision dated February 9, 1993, as
follows:[4]
WHEREFORE, premises considered, our decision of August 28, 1992 is
hereby modified deleting paragraph 4 of the dispositive portion of our
decision which reads:
4. Ordering appellee to pay the value of the land occupied by the two-storey
building.
The motion for reconsideration of appellee is hereby DENIED for lack of
merit.
The foregoing Amended Decision is also challenged in the instant
petition.
The Facts
The facts are not disputed. Respondent Court merely reproduced the
factual findings of the trial court, as follows:[5]
That plaintiff (herein petitioner) which is a corporation duly organized and
existing under and by virtue of Philippine laws is the registered owner of a
parcel of land situated in Barrio San Dionisio, Paraaque, Metro Manila known
as Lot 4331-A (should be 4531-A) of Lot 4531 of the Cadastral Survey of
Paraaque, Metro Manila, covered by Transfer Certificate of Title No. 409316
of the Registry of Deeds of the Province of Rizal; that said land was
purchased by plaintiff from Pariz Industries, Inc. in 1970, together with all the
buildings and improvements including the wall existing thereon; that the
defendant (herein private respondent) is the registered owner of a parcel of
land known as Lot No. 4531-B of Lot 4531 of the Cadastral Survey of
Paraaque, LRC (GLRO) Rec. No. 19645 covered by Transfer Certificate of
Title No. 279838, of the Registry of Deeds for the Province of Rizal; that said
land which adjoins plaintiffs land was purchased by defendant from a certain
Enrile Antonio also in 1970; that in 1971, defendant purchased another lot
also adjoining plaintiffs land from a certain Miguel Rodriguez and the same
was registered in defendants name under Transfer Certificate of Title No.
31390, of the Registry of Deeds for the Province of Rizal; that portions of the
buildings and wall bought by plaintiff together with the land from Pariz
Industries are occupying a portion of defendants adjoining land; that upon
learning of the encroachment or occupation by its buildings and wall of a
portion of defendants land, plaintiff offered to buy from defendant that
particular portion of defendants land occupied by portions of its buildings and
wall with an area of 770 square meters, more or less, but defendant,
however, refused the offer. In 1973, the parties entered into a private
agreement before a certain Col. Rosales in Malacaang, wherein plaintiff
agreed to demolish the wall at the back portion of its land thus giving to
defendant possession of a portion of his land previously enclosed by plaintiffs
wall; that defendant later filed a complaint before the office of Municipal
Engineer of Paraaque, Metro Manila as well as before the Office of the
Provincial Fiscal of Rizal against plaintiff in connection with the
encroachment or occupation by plaintiffs buildings and walls of a portion of
its land but said complaint did not prosper; that defendant dug or caused to
be dug a canal along plaintiffs wall, a portion of which collapsed in June,
1980, and led to the filing by plaintiff of the supplemental complaint in the
above-entitled case and a separate criminal complaint for malicious mischief
against defendant and his wife which ultimately resulted into the conviction in
court of defendants wife for the crime of malicious mischief; that while trial of
the case was in progress, plaintiff filed in Court a formal proposal for
settlement of the case but said proposal, however, was ignored by defendant.
After trial on the merits, the Regional Trial Court[6] of Pasay City, Branch
117, in Civil Case No. PQ-7631-P, rendered a decision dated December 4,
1989 in favor of petitioner who was the plaintiff therein. The dispositive
portion reads:[7]
WHEREFORE, judgment is hereby rendered in favor of plaintiff and against
defendant and ordering the latter to sell to plaintiff that portion of land owned
by him and occupied by portions of plaintiffs buildings and wall at the price
of P2,000.00 per square meter and to pay the former:
1. The sum of P44,000.00 to compensate for the losses in materials and
properties incurred by plaintiff through thievery as a result of the destruction
of its wall;
2. The sum of P7,500.00 as and by way of attorneys fees; and
3. The costs of this suit.
Appeal was duly interposed with respondent Court, which as previously
stated, reversed and set aside the decision of the Regional Trial Court and
rendered the assailed Decision and Amended Decision. Hence, this recourse
under Rule 45 of the Rules of Court.
The Issues: The petition raises the following issues:[8]
(A)Whether or not the respondent Court of Appeals erred in holding the
petitioner a builder in bad faith because it is presumed to know the metes
and bounds of his property.
(B) Whether or not the respondent Court of Appeals erred when it used the
amicable settlement between the petitioner and the private respondent,
where both parties agreed to the demolition of the rear portion of the fence,
as estoppel amounting to recognition by petitioner of respondents right over
his property including the portions of the land where the other structures and
the building stand, which were not included in the settlement.
(C)Whether or not the respondent Court of Appeals erred in ordering the
removal of the structures and surrounding walls on the encroached area and
in withdrawing its earlier ruling in its August 28, 1992 decision for the
petitioner to pay for the value of the land occupied by the building, only
because the private respondent has manifested its choice to demolish it
despite the absence of compulsory sale where the builder fails to pay for the
land, and which choice private respondent deliberately deleted from its
September 1, 1980 answer to the supple-mental complaint in the Regional
Trial Court.
In its Memorandum, petitioner poses the following issues:
A.The time when to determine the good faith of the builder under Article 448
of the New Civil Code, is reckoned during the period when it was actually
being built; and in a case where no evidence was presented nor introduced
as to the good faith or bad faith of the builder at that time, as in this case, he
must be presumed to be a builder in good faith, since bad faith cannot be
presumed.[9]
B.In a specific boundary overlap situation which involves a builder in good
faith, as in this case, it is now well settled that the lot owner, who builds on
the adjacent lot is not charged with constructive notice of the technical metes
and bounds contained in their torrens titles to determine the exact and
precise extent of his boundary perimeter.[10]
C.The respondent courts citation of the twin cases of Tuason & Co. v.
Lumanlan and Tuason & Co. v. Macalindong is not the judicial authority for a
boundary dispute situation between adjacent torrens titled lot owners, as the
facts of the present case do not fall within nor square with the involved
principle of a dissimilar case.[11]
D.Quite contrary to respondent Uys reasoning, petitioner Tecnogas
continues to be a builder in good faith, even if it subsequently built/repaired
the walls/other permanent structures thereon while the case a quowas
pending and even while respondent sent the petitioner many letters/filed
cases thereon.[12]
D. (E.)The amicable settlement between the parties should be interpreted as
a contract and enforced only in accordance with its explicit terms,
and not over and beyond that agreed upon; because the courts do not have
the power to create a contract nor expand its scope.[13]
E. (F.)As a general rule, although the landowner has the option to choose
between: (1) buying the building built in good faith, or (2) selling the portion of
his land on which stands the building under Article 448 of the Civil Code;
the first option is not absolute, because an exception thereto, once it would
be impractical for the landowner to choose to exercise the first alternative, i.e.
buy that portion of the house standing on his land, for the whole building
might be rendered useless. The workable solution is for him to select the
second alternative, namely, to sell to the builder that part of his land on which
was constructed a portion of the house.[14]
Private respondent, on the other hand, argues that the petition is
suffering from the following flaws:[15]
1. It did not give the exact citations of cases decided by the Honorable
Supreme Court that allegedly contradicts the ruling of the Hon. Court
of Appeals based on the doctrine laid down in Tuason vs. Lumanlan
case citing also Tuason vs. Macalindong case (Supra).
2. Assuming that the doctrine in the alleged Co Tao vs. Chico case is
contradictory to the doctrine in Tuason vs. Lumanlan and Tuason vs.
Macalindong, the two cases being more current, the same should
prevail.
Further, private respondent contends that the following unmistakably point to
the bad faith of petitioner: (1) private respondents purchase of the two lots,
was ahead of the purchase by petitioner of the building and lot from Pariz
Industries; (2) the declaration of the General Manager of Tecnogas that the
sale between petitioner and Pariz Industries was not registered because of
some problems with China Banking Corporation; and (3) the Deed of Sale in
favor of petitioner was registered in its name only in the month of May
1973.[16]
The Courts Ruling
The petition should be granted.
Good Faith or Bad Faith
Respondent Court, citing the cases of J. M. Tuason & Co., Inc. vs. Vda.
de Lumanlan[17] and J. M. Tuason & Co., Inc. vs. Macalindong,[18] ruled that
petitioner cannot be considered in good faith because as a land owner, it is
presumed to know the metes and bounds of his own property, specially if the
same are reflected in a properly issued certificate of title. One who
erroneously builds on the adjoining lot should be considered a builder in
(b)ad (f)aith, there being presumptive knowledge of the Torrens title, the area,
and the extent of the boundaries.[19]
We disagree with respondent Court. The two cases it relied upon do not
support its main pronouncement that a registered owner of land has
presumptive knowledge of the metes and bounds of its own land, and is
therefore in bad faith if he mistakenly builds on an adjoining land. Aside from
the fact that those cases had factual moorings radically different from those
obtaining here, there is nothing in those cases which would suggest,
however remotely, that bad faith is imputable to a registered owner of land
when a part of his building encroaches upon a neighbors land, simply
because he is supposedly presumed to know the boundaries of his land as
described in his certificate of title. No such doctrinal statement could have
been made in those cases because such issue was not before the Supreme
Court. Quite the contrary, we have rejected such a theory in Co Tao vs.
Chico,[20] where we held that unless one is versed in the science of surveying,
no one can determine the precise extent or location of his property by merely
examining his paper title.
There is no question that when petitioner purchased the land from Pariz
Industries, the buildings and other structures were already in existence. The
record is not clear as to who actually built those structures, but it may well be
assumed that petitioners predecessor-in-interest, Pariz Industries, did
so. Article 527 of the Civil Code presumes good faith, and since no proof
exists to show that the encroachment over a narrow, needle-shaped portion
of private respondents land was done in bad faith by the builder of the
encroaching structures, the latter should be presumed to have built them in
good faith.[21] It is presumed that possession continues to be enjoyed in the
same character in which it was acquired, until the contrary is proved.[22] Good
faith consists in the belief of the builder that the land he is building on is his,
and his ignorance of any defect or flaw in his title.[23] Hence, such good faith,
by law, passed on to Parizs successor, petitioner in this case. Further,
(w)here one derives title to property from another, the act, declaration, or
omission of the latter, while holding the title, in relation to the property, is
evidence against the former.[24] And possession acquired in good faith does
not lose this character except in case and from the moment facts exist which
show that the possessor is not unaware that he possesses the thing
improperly or wrongfully.[25] The good faith ceases from the moment defects
in the title are made known to the possessor, by extraneous evidence or by
suit for recovery of the property by the true owner.[26]
Recall that the encroachment in the present case was caused by a very
slight deviation of the erected wall (as fence) which was supposed to run in a
straight line from point 9 to point 1 of petitioners lot. It was an error which, in
the context of the attendant facts, was consistent with good
faith. Consequently, the builder, if sued by the aggrieved landowner for
recovery of possession, could have invoked the provisions of Art. 448 of the
Civil Code, which reads:
or to oblige the one who built or planted to pay the price of the land, and the
one who sowed, the proper rent. However, the builder or planter cannot be
obliged to buy the land if its value is considerably more than that of the
building or trees. In such case, he shall pay reasonable rent, if the owner of
the land does not choose to appropriate the building or trees after proper
indemnity. The parties shall agree upon the terms of the lease and in case of
disagreement, the court shall fix the terms thereof.
The obvious benefit to the builder under this article is that, instead of being
outrightly ejected from the land, he can compel the landowner to make a
choice between the two options: (1) to appropriate the building by paying the
indemnity required by law, or (2) sell the land to the builder. The landowner
cannot refuse to exercise either option and compel instead the owner of the
building to remove it from the land.[27]
The question, however, is whether the same benefit can be invoked by
petitioner who, as earlier stated, is not the builder of the offending structures
but possesses them as buyer.
We answer such question in the affirmative.
In the first place, there is no sufficient showing that petitioner was aware
of the encroachment at the time it acquired the property from Pariz
Industries. We agree with the trial court that various factors in evidence
adequately show petitioners lack of awareness thereof. In any case, contrary
proof has not overthrown the presumption of good faith under Article 527 of
the Civil Code, as already stated, taken together with the disputable
presumptions of the law on evidence. These presumptions state, under
Section 3 (a) of Rule 131 of the Rules of Court, that the person is innocent of
a crime or wrong; and under Section 3 (ff) of Rule 131, that the law has been
obeyed. In fact, private respondent Eduardo Uy himself was unaware of such
intrusion into his property until after 1971 when he hired a surveyor, following
his purchase of another adjoining lot, to survey all his newly acquired
lots. Upon being apprised of the encroachment, petitioner immediately
offered to buy the area occupied by its building -- a species of conduct
consistent with good faith.
In the second place, upon delivery of the property by Pariz Industries, as
seller, to the petitioner, as buyer, the latter acquired ownership of the
property. Consequently and as earlier discussed, petitioner is deemed to
have stepped into the shoes of the seller in regard to all rights of ownership
over the immovable sold, including the right to compel the private respondent
to exercise either of the two options provided under Article 448 of the Civil
Code.

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,
Estoppel
Respondent Court ruled that the amicable settlement entered into
between petitioner and private respondent estops the former from
questioning the private respondents right over the disputed property. It held
that by undertaking to demolish the fence under said settlement, petitioner
recognized private respondents right over the property, and cannot later on
compel private respondent to sell to it the land since private respondent is
under no obligation to sell.[28]
We do not agree. Petitioner cannot be held in estoppel for entering into
the amicable settlement, the pertinent portions of which read:[29]
That the parties hereto have agreed that the rear portion of the fence that
separates the property of the complainant and respondent shall be
demolished up to the back of the building housing the machineries which
demolision (sic) shall be undertaken by the complainant at anytime.
That the fence which serve(s) as a wall housing the electroplating
machineries shall not be demolished in the mean time which portion shall be
subject to negotiation by herein parties.
From the foregoing, it is clear that petitioner agreed only to the
demolition of a portion of the wall separating the adjoining properties of the
parties -- i.e. up to the back of the building housing the machineries. But that
portion of the fence which served as the wall housing the electroplating
machineries was not to be demolished. Rather, it was to be subject to
negotiation by herein parties. The settlement may have recognized the
ownership of private respondent but such admission cannot be equated with
bad faith. Petitioner was only trying to avoid a litigation, one reason for
entering into an amicable settlement.
As was ruled in Osmea vs. Commission on Audit,[30]
A compromise is a bilateral act or transaction that is expressly acknowledged
as a juridical agreement by the Civil Code and is therein dealt with in some
detail. `A compromise, declares Article 2208 of said Code, `is a contract
whereby the parties, by making reciprocal concessions, avoid a litigation or
put an end to one already commenced.
xxx xxx xxx
The Civil Code not only defines and authorizes compromises, it in fact
encourages them in civil actions. Art. 2029 states that `The Court shall
endeavor to persuade the litigants in a civil case to agree upon some fair
compromise. x x x.
In the context of the established facts, we hold that petitioner did not
lose its rights under Article 448 of the Civil Code on the basis merely of the
fact that some years after acquiring the property in good faith, it learned
about -- and aptly recognized -- the right of private respondent to a portion of
the land occupied by its building. The supervening awareness of the
encroachment by petitioner does not militate against its right to claim the
status of a builder in good faith. In fact, a judicious reading of said Article 448
will readily show that the landowners exercise of his option can only take
place after the builder shall have come to know of the intrusion -- in short,
when both parties shall have become aware of it. Only then will the occasion
for exercising the option arise, for it is only then that both parties will have
been aware that a problem exists in regard to their property rights.
Options of Private Respondent
What then is the applicable provision in this case which private
respondent may invoke as his remedy: Article 448 or Article 450[31] of the
Civil Code?
In view of the good faith of both petitioner and private respondent, their
rights and obligations are to be governed by Art. 448. The essential fairness
of this codal provision has been pointed out by Mme. Justice Ameurfina
Melencio-Herrera, citing Manresa and applicable precedents, in the case of
Depra vs. Dumlao,[32] to wit:
Where the builder, planter or sower has acted in good faith, a conflict of
rights arises between the owners, and it becomes necessary to protect the
owner of the improvements without causing injustice to the owner of the
land. In view of the impracticality of creating a state of forced co-ownership,
the law has provided a just solution by giving the owner of the land the option
to acquire the improvements after payment of the proper indemnity, or to
oblige the builder or planter to pay for the land and the sower to pay the
proper rent. It is the owner of the land who is authorized to exercise the
option, because his right is older, and because, by the principle of accession,
he is entitled to the ownership of the accessory thing. (3 Manresa 213;
Bernardo vs. Bataclan, 37 Off. Gaz. 1382; Co Tao vs. Chan Chico, G. R. No.
49167, April 30, 1949; Article applied; see Cabral, et al. vs. Ibanez [S.C.] 52
Off. Gaz. 217; Marfori vs. Velasco, [C.A.] 52 Off. Gaz. 2050).
The private respondents insistence on the removal of the encroaching
structures as the proper remedy, which respondent Court sustained in its
assailed Decisions, is thus legally flawed. This is not one of the remedies
bestowed upon him by law. It would be available only if and when he
chooses to compel the petitioner to buy the land at a reasonable price but the
latter fails to pay such price.[33] This has not taken place. Hence, his options
are limited to: (1) appropriating the encroaching portion of petitioners building
after payment of proper indemnity, or (2) obliging the latter to buy the lot
occupied by the structure. He cannot exercise a remedy of his own liking.
Neither is petitioners prayer that private respondent be ordered to sell
the land[34] the proper remedy. While that was dubbed as the more workable
solution in Grana and Torralba vs. The Court of Appeals, et al.,[35] it was not
the relief granted in that case as the landowners were directed to exercise
within 30 days from this decision their option to either buy the portion of the
petitioners house on their land or sell to said petitioners the portion of their
land on which it stands.[36] Moreover, in Grana and Torralba, the area
involved was only 87 square meters while this case involves 520 square
meters[37]. In line with the case of Depra vs. Dumlao,[38] this case will have to
be remanded to the trial court for further proceedings to fully implement the
mandate of Art. 448. It is a rule of procedure for the Supreme Court to strive
to settle the entire controversy in a single proceeding leaving no root or
branch to bear the seeds of future litigation.[39]
Petitioner, however, must also pay the rent for the property occupied by
its building as prescribed by respondent Court from October 4, 1979, but only
up to the date private respondent serves notice of its option upon petitioner
and the trial court; that is, if such option is for private respondent to
appropriate the encroaching structure. In such event, petitioner would have a
right of retention which negates the obligation to pay rent.[40] The rent should
however continue if the option chosen is compulsory sale, but only up to the
actual transfer of ownership.
The award of attorneys fees by respondent Court against petitioner is
unwarranted since the action appears to have been filed in good
faith. Besides, there should be no penalty on the right to litigate.[41]
WHEREFORE, premises considered, the petition is hereby
GRANTED and the assailed Decision and the Amended Decision are
REVERSED and SET ASIDE. In accordance with the case of Depra vs.
Dumlao,[42] this case is REMANDED to the Regional Trial Court of Pasay City,
Branch 117, for further proceedings consistent with Articles 448 and
546 [43] of the Civil Code, as follows:
The trial court shall determine:
a) the present fair price of private respondents 520 square-meter area of land;
b) the increase in value (plus value) which the said area of 520
square meters may have acquired by reason of the
existence of the portion of the building on the area;
c) the fair market value of the encroaching portion of the building; and
d) whether the value of said area of land is considerably more than
the fair market value of the portion of the building thereon.
2. After said amounts shall have been determined by competent evidence,
the regional trial court shall render judgment as follows:
a) The private respondent shall be granted a period of fifteen (15)
days within which to exercise his option under the law (Article
448, Civil Code), whether to appropriate the portion of the
building as his own by paying to petitioner its fair market
value, or to oblige petitioner to pay the price of said area. The
amounts to be respectively paid by petitioner and private
respondent, in accordance with the option thus exercised by
written notice of the other party and to the court, shall be paid by
the obligor within fifteen (15) days from such notice of the option
by tendering the amount to the trial court in favor of the party
entitled to receive it;
b) If private respondent exercises the option to oblige petitioner to
pay the price of the land but the latter rejects such purchase
because, as found by the trial court, the value of the land is
considerably more than that of the portion of the building,
petitioner shall give written notice of such rejection to private
respondent and to the trial court within fifteen (15) days from
notice of private respondents option to sell the land. In that
event, the parties shall be given a period of fifteen (15) days
from such notice of rejection within which to agree upon the
terms of the lease, and give the trial court formal written notice
of the agreement and its provisos. If no agreement is reached
by the parties, the trial court, within fifteen (15) days from and
after the termination of the said period fixed for negotiation, shall
then fix the terms of the lease provided that the monthly rental
to be fixed by the Court shall not be less than two thousand
pesos (P2,000.00) per month, payable within the first five (5)
days of each calendar month. The period for the forced lease
shall not be more than two (2) years, counted from the finality of
the judgment, considering the long period of time since 1970
that petitioner has occupied the subject area. The rental thus
fixed shall be increased by ten percent (10%) for the second
year of the forced lease. Petitioner shall not make any further
constructions or improvements on the building. Upon expiration
of the two-year period, or upon default by petitioner in the
payment of rentals for two (2) consecutive months, private
respondent shall be entitled to terminate the forced lease, to
recover his land, and to have the portion of the building
removed by petitioner or at latters expense. The rentals herein
 provided shall be tendered by petitioner to the trial court for
payment to private respondent, and such tender shall constitute
evidence of whether or not compliance was made within the
period fixed by the said court.
c) In any event, petitioner shall pay private respondent an amount
computed at two thousand pesos (P2,000.00) per month as
reasonable compensation for the occupancy of private
respondents land for the period counted from October 4, 1979,
up to the date private respondent serves notice of its option to
appropriate the encroaching structures, otherwise up to the
actual transfer of ownership to petitioner or, in case a forced
lease has to be imposed, up to the commencement date of the
forced lease referred to in the preceding paragraph;
d) The periods to be fixed by the trial court in its decision shall be
non-extendible, and upon failure of the party obliged to tender to
the trial court the amount due to the obligee, the party entitled to
such payment shall be entitled to an order of execution for the
enforcement of payment of the amount due and for compliance
with such other acts as may be required by the prestation due
the obligee.
No costs.
SO ORDERED.
Narvasa, C.J., (Chairman), Davide, Jr., Melo, and Francisco, JJ., concur.
13. [G.R. No. 79688. February 1, 1996]
PLEASANTVILLE DEVELOPMENT CORPORATION, petitioner,
vs. COURT OF APPEALS, WILSON KEE, C.T. TORRES ENTERPRISES,
INC. and ELDRED JARDINICO, respondents.
DECISION
PANGANIBAN, J.:
Is a lot buyer who constructs improvements on the wrong property
erroneously delivered by the owners agent, a builder in good faith? This is
the main issue resolved in this petition for review on certiorari to reverse the
Decision[1] of the Court of Appeals[2] in CA-G.R. SP No. 11040, promulgated
on August 20, 1987.
By resolution dated November 13, 1995, the First Division of this Court
resolved to transfer this case (along with several others) to the Third Division.
After due deliberation and consultation, the Court assigned the writing of this
Decision to the undersigned ponente.
The Facts
The facts, as found by respondent Court, are as follows:
Edith Robillo purchased from petitioner a parcel of land designated
as Lot 9, Phase II and located at Taculing Road, Pleasantville
Subdivision, Bacolod City. In 1975, respondent Eldred Jardinico bought the
rights to the lot from Robillo. At that time, Lot 9 was vacant.
Upon completing all payments, Jardinico secured from the Register of
Deeds of Bacolod City on December 19, 1978 Transfer Certificate of Title No.
106367 in his name. It was then that he discovered that improvements had
been introduced on Lot 9 by respondent Wilson Kee, who had taken
possession thereof.
It appears that on March 26, 1974, Kee bought on installment Lot 8 of
the same subdivision from C.T. Torres Enterprises, Inc. (CTTEI), the
exclusive real estate agent of petitioner. Under the Contract to Sell on
Installment, Kee could possess the lot even before the completion of all
installment payments. On January 20, 1975, Kee paid CTTEI the relocation
fee of P50.00 and another P50.00 on January 27, 1975, for the preparation
of the lot plan. These amounts were paid prior to Kees taking actual
possession of Lot 8. After the preparation of the lot plan and a copy thereof
given to Kee, CTTEI through its employee, Zenaida Octaviano, accompanied
Kees wife, Donabelle Kee, to inspect Lot 8. Unfortunately, the parcel of land
pointed by Octaviano was Lot 9. Thereafter, Kee proceeded to construct his
residence, a store, an auto repair shop and other improvements on the lot.
After discovering that Lot 9 was occupied by Kee, Jardinico confronted
him. The parties tried to reach an amicable settlement, but failed.
On January 30, 1981, Jardinicos lawyer wrote Kee, demanding that the
latter remove all improvements and vacate Lot 9. When Kee refused to
vacate Lot 9, Jardinico filed with the Municipal Trial Court in Cities, Branch 3,
Bacolod City (MTCC), a complaint for ejectment with damages against Kee.
Kee, in turn, filed a third-party complaint against petitioner and CTTEI.
The MTCC held that the erroneous delivery of Lot 9 to Kee was
attributable to CTTEI. It further ruled that petitioner and CTTEI could not
successfully invoke as a defense the failure of Kee to give notice of his
intention to begin construction required under paragraph 22 of the Contract
to Sell on Installment and his having built a sari-sari store without. the prior
approval of petitioner required under paragraph 26 of said contract, saying
that the purpose of these requirements was merely to regulate the type of
improvements to be constructed on the lot[3].
However, the MTCC found that petitioner had already rescinded its
contract with Kee over Lot 8 for the latters failure to pay the installments due,
and that Kee had not contested the rescission. The rescission was effected
in 1979, before the complaint was instituted. The MTCC concluded that Kee
no longer had any right over the lot subject of the contract between him and
petitioner. Consequently, Kee must pay reasonable rentals for the use
of Lot 9, and, furthermore, he cannot claim reimbursement for the
improvements he introduced on said lot.
The MTCC thus disposed:
IN VIEW OF ALL THE FOREGOING, judgment is hereby rendered as follows:
1. Defendant Wilson Kee is ordered to vacate tithe premises of Lot 9,
covered by TCT No. 106367 and to remove all structures and improvements
he introduced thereon;
2. Defendant Wilson Kee is ordered to pay to the plaintiff rentals at the rate of
P 15.00 a day computed from the time this suit was filed on March 12,
1981 until he actually vacates the premises. This amount shall bear interests
(sic) at the rate of 12 per cent (sic) per annum.
3. Third-Party Defendant CT. Torres Enterprises, Inc. and Pleasantville
Subdivision are ordered to pay the plaintiff jointly and severally the sum of
P3,000.00 as attorneys fees and P700.00 as cost and litigation expenses.[4]
On appeal, the Regional Trial Court, Branch 48, Bacolod City (RTC)
ruled that petitioner and CTTEI were not at fault or were not negligent, there
being no preponderant evidence to show that they directly participated in the
delivery of Lot 9 to Kee.[5] It found Kee a builder in bad faith. It further ruled
that even assuming arguendo that Kee was acting in good faith, he was,
nonetheless, guilty of unlawfully usurping the possessory right of Jardinico
over Lot 9 from the time he was served with notice to vacate said lot, and
thus was liable for rental.
The RTC thus disposed:
WHEREFORE, the decision appealed from is affirmed with respect to the
order against the defendant to vacate the premises of Lot No. 9 covered by
Transfer Certificate of Title No. T-106367 of the land records of Bacolod City;
the removal of all structures and improvements introduced thereon at his
expense and the payment to plaintiff (sic) the sum of Fifteen (P 15.00) Pesos
a day as reasonable rental to be computed from January 30, 1981, the date
of the demand, and not from the date of the filing of the complaint, until he
had vacated (sic) the premises, with interest thereon at 12% per annum. This
Court further renders judgment against the defendant to pay the plaintiff the
sum of Three Thousand (P3,000.00) Pesos as attorneys fees, plus costs of
litigation.
The third-party complaint against Third-Party Defendants Pleasantville
Development Corporation and C.T. Torres Enterprises, Inc. is dismissed. The
order against Third-Party Defendants to pay attorneys fees to plaintiff and
costs of litigation is reversed.[6]
Following the denial of his motion for reconsideration on October 20,
1986, Kee appealed directly to the Supreme Court, which referred the matter
to the Court of Appeals.
The appellate court ruled that Kee was a builder in good faith, as he was
unaware of the mix-up when he began construction of the improvements
on Lot 8. It further ruled that the erroneous delivery was due to the
negligence of CTTEI, and that such wrong delivery was likewise imputable to
its principal, petitioner herein. The appellate court also ruled that the award of
rentals was without basis.
Thus, the Court of Appeals disposed:
WHEREFORE, the petition is GRANTED, the appealed decision is
REVERSED, and judgment is rendered as follows:
1. Wilson Kee is declared a builder in good faith with respect to the
improvements he introduced on Lot 9, and is entitled to the
rights granted him under Articles 448, 546 and 548 of the New
Civil Code.
2. Third-party defendants C.T. Torres Enterprises, Inc. and
Pleasantville Development Corporation are solidarily liable
under the following circumstances:
a. If Eldred Jardinico decides to appropriate the improvements and,
thereafter, remove these structures, the third-party defendants
shall answer for all demolition expenses and the value of the
improvements thus destroyed or rendered useless;
b. If Jardinico prefers that Kee buy the land, the third-party
defendants shall answer for the amount representing the value
of Lot 9 that Kee should pay to Jardinico.
3. Third-party defendants C.T. Torres Enterprises, Inc. and
Pleasantville Development Corporation are ordered to pay in
solidum the amount of P3,000.00 to Jardinico as attorneys fees,
as well as litigation expenses.
4. The award of rentals to Jardinico is dispensed with.
Furthermore, the case is REMANDED to the court of origin for the
determination of the actual value of the improvements and the property
(Lot 9), as well as for further proceedings in conformity with Article 448 of the
New Civil Code.[7]
Petitioner then filed the instant petition against Kee, Jardinico and
CTTEI.
The Issues
The petition submitted the following grounds to justify a review of the
respondent Courts Decision, as follows:
1. The Court of Appeals has decided the case in a way probably not in
accord with law or the the (sic) applicable decisions of the Supreme Court on
third-party complaints, by ordering third-party defendants to pay the
demolition expenses and/or price of the land;
2. The Court of Appeals has so far departed from the accepted course of
judicial proceedings, by granting to private respondent-Kee the rights of a
builder in good faith in excess of what the law provides, thus enriching
private respondent Kee at the expense of the petitioner;
3. In the light of the subsequent events or circumstances which changed the
rights of the parties, it becomes imperative to set aside or at least modify the
judgment of the Court of Appeals to harmonize with justice and the facts;
4. Private respondent-Kee in accordance with the findings of facts of the
lower court is clearly a builder in bad faith, having violated several provisions
of the contract to sell on installments;
5. The decision of the Court of Appeals, holding the principal, Pleasantville
Development Corporation (liable) for the acts made by the agent in excess of
its authority is clearly in violation of the provision of the law;
6. The award of attorneys fees is clearly without basis and is equivalent to
putting a premium in (sic) court litigation.
From these grounds, the issues could be re-stated as follows:
(1) Was Kee a builder in good faith?
(2) What is the liability, if any, of petitioner and its agent, C.T. Torres
Enterprises, Inc.? and
(3) Is the award of attorneys fees proper?
The First Issue: Good Faith
Petitioner contends that the Court of Appeals erred in reversing the
RTCs ruling that Kee was a builder in bad faith.
Petitioner fails to persuade this Court to abandon the findings and
conclusions of the Court of Appeals that Kee was a builder in good faith. We
agree with the following observation of the Court of Appeals:
The roots of the controversy can be traced directly to the errors committed by
CTTEI, when it pointed the wrong property to Wilson Kee and his wife. It is
highly improbable that a purchaser of a lot would knowingly and willingly
build his residence on a lot owned by another, deliberately exposing himself
and his family to the risk of being ejected from the land and losing all
improvements thereon, not to mention the social humiliation that would follow.
Under the circumstances, Kee had acted in the manner of a prudent man in
ascertaining the identity of his property. Lot 8 is covered by Transfer
Certificate of Title No. T-69561, while Lot 9 is identified in Transfer Certificate
of Title No. T-106367. Hence, under the Torrens system of land registration,
Kee is presumed to have knowledge of the metes and bounds of the property
with which he is dealing. x x x
xxx xxx xxx
But as Kee is a layman not versed in the technical description of his property,
he had to find a way to ascertain that what was described in TCT No. 69561
matched Lot 8. Thus, he went to the subdivision developers agent and
applied and paid for the relocation of the lot, as well as for the production of a
lot plan by CTTEIs geodetic engineer. Upon Kees receipt of the map, his wife
went to the subdivision site accompanied by CTTEIs employee, Octaviano,
who authoritatively declared that the land she was pointing to was
indeed Lot 8. Having full faith and confidence in the reputation of CTTEI, and
because of the companys positive identification of the property, Kee saw no
reason to suspect that there had been a misdelivery. The steps Kee had
taken to protect his interests were reasonable. There was no need for him to
have acted ex-abundantia cautela, such as being present during the geodetic
engineers relocation survey or hiring an independent geodetic engineer to
countercheck for errors, for the final delivery of subdivision lots to their
owners is part of the regular course of everyday business of CTTEI. Because
of CTTEIs blunder, what Kee had hoped to forestall did in fact transpire.
Kees efforts all went to naught.[8]
Good faith consists in the belief of the builder that the land he is building
on is his and his ignorance of any defect or flaw in his title.[9] And as good
faith is presumed, petitioner has the burden of proving bad faith on the part of
Kee.[10]
At the time he built improvements on Lot 8, Kee believed that said lot
was what he bought from petitioner. He was not aware that the lot delivered
to him was not Lot 8. Thus, Kees good faith. Petitioner failed to prove
otherwise.
To demonstrate Kees bad faith, petitioner points to Kees violation of
paragraphs 22 and 26 of the Contract of Sale on Installment.
We disagree. Such violations have no bearing whatsoever on whether
Kee was a builder in good faith, that is, on his state of mind at the time he
built the improvements on Lot 9. These alleged violations may give rise to
petitioners cause of action against Kee under the said contract (contractual
breach), but may not be bases to negate the presumption that Kee was a
builder in good faith.
Petitioner also points out that, as found by the trial court, the Contract of
Sale on Installment covering Lot 8 between it and Kee was rescinded long
before the present action was instituted. This has no relevance on the liability
of petitioner, as such fact does not negate the negligence of its agent in
pointing out the wrong lot to Kee. Such circumstance is relevant only as it
gives Jardinico a cause of action for unlawful detainer against Kee.
Petitioner next contends that Kee cannot claim that another lot was
erroneously pointed out to him because the latter agreed to the following
provision in the Contract of Sale on Installment, to wit:
13. The Vendee hereby declares that prior to the execution of his contract
he/she has personally examined or inspected the property made subject-
matter hereof, as to its location, contours, as well as the natural condition of
the lots and from the date hereof whatever consequential change therein
made due to erosion, the said Vendee shall bear the expenses of the
necessary fillings, when the same is so desired by him/her.[11]
The subject matter of this provision of the contract is the change of the
location, contour and condition of the lot due to erosion. It merely provides
that the vendee, having examined the property prior to the execution of the
contract, agrees to shoulder the expenses resulting from such change.
We do not agree with the interpretation of petitioner that Kee contracted
away his right to recover damages resulting from petitioners
negligence. Such waiver would be contrary to public policy and cannot be
allowed. Rights may be waived, unless the waiver is contrary to law, public
order, public policy, morals, or good customs, or prejudicial to a third person
with a right recognized by law.[12]
The Second Issue: Petitioners Liability
Kee filed a third-party complaint against petitioner and CTTEI, which
was dismissed by the RTC after ruling that there was no evidence from which
fault or negligence on the part of petitioner and CTTEI can be inferred. The
Court of Appeals disagreed and found CTTEI negligent for the erroneous
delivery of the lot by Octaviano, its employee.
Petitioner does not dispute the fact that CTTEI was its agent. But it
contends that the erroneous delivery of Lot 9 to Kee was an act which was
clearly outside the scope of its authority, and consequently, CTTEI alone
should be liable. It asserts that while [CTTEI] was authorized to sell the lot
belonging to the herein petitioner, it was never authorized to deliver the
wrong lot to Kee.[13]
Petitioners contention is without merit.
The rule is that the principal is responsible for the acts of the agent,
done within the scope of his authority, and should bear the damage caused
to third persons.[14] On the other hand, the agent who exceeds his authority is
personally liable for the damage.[15]
CTTEI was acting within its authority as the sole real estate
representative of petitioner when it made the delivery to Kee. In acting within
its scope of authority, it was, however, negligent. It is this negligence that is
the basis of petitioners liability, as principal of CTTEI, per Articles 1909 and
1910 of the Civil Code.
Pending resolution of the case before the Court of Appeals, Jardinico
and Kee on July 24, 1987 entered into a deed of sale, wherein the former
sold Lot 9 to Kee. Jardinico and Kee did not inform the Court of Appeals of
such deal.
The deed of sale contained the following provision:
1. That Civil Case No. 3815 entitled Jardinico vs. Kee which is now pending
appeal with the Court of Appeals, regardless of the outcome of the decision
shall be mutually disregarded and shall not be pursued by the parties herein
and shall be considered dismissed and without effect whatsoever;[16]
Kee asserts though that the terms and conditions in said deed of sale
are strictly for the parties thereto and that (t)here is no waiver made by either
of the parties in said deed of whatever favorable judgment or award the
honorable respondent Court of Appeals may make in their favor against
herein petitioner Pleasantville Development Corporation and/or private
respondent C.T. Torres Enterprises, Inc.[17]
Obviously, the deed of sale can have no effect on the liability of
petitioner. As we have earlier stated, petitioners liability is grounded on the
negligence of its agent. On the other hand, what the deed of sale regulates
are the reciprocal rights of Kee and Jardinico; it stressed that they had
reached an agreement independent of the outcome of the case.
Petitioner further assails the following holding of the Court of Appeals:
2. Third-party defendants C.T. Torres Enterprises, Inc. and Pleasantville
Development Corporation are solidarily liable under the following
circumstances:
a. If Eldred Jardinico decides to appropriate the improvements and,
thereafter, remove these structures, the third-party defendants
shall answer for all demolition expenses and the value of the
improvements thus destroyed or rendered useless;
b. If Jardinico prefers that Kee buy the land, the third-party
defendants shall answer for the amount representing the value
of Lot 9 that Kee should pay to Jardinico.[18]
Petitioner contends that if the above holding would be carried out, Kee
would be unjustly enriched at its expense. In other words, Kee would be -
able to own the lot, as buyer, without having to pay anything on it, because
the aforequoted portion of respondent Courts Decision would require
petitioner and CTTEI jointly and solidarily to answer or reimburse Kee there
for.
We agree with petitioner.
Petitioners liability lies in the negligence of its agent CTTEI. For such
negligence, the petitioner should be held liable for damages. Now, the extent
and/or amount of damages to be awarded is a factual issue which should be
determined after evidence is adduced. However, there is no showing that
such evidence was actually presented in the trial court; hence no damages
could now be awarded.
The rights of Kee and Jardinico vis-a-vis each other, as builder in good
faith and owner in good faith, respectively, are regulated by law (i.e., Arts.
448, 546 and 548 of the Civil Code). It was error for the Court of Appeals to
make a slight modification in the application of such law, on the ground of
equity. At any rate, as it stands now, Kee and Jardinico have amicably
settled through their deed of sale their rights and obligations with regards
to Lot 9. Thus, we delete items 2 (a) and (b) of the dispositive portion of the
Court of Appeals Decision [as reproduced above] holding petitioner and
CTTEI solidarily liable.
The Third Issue: Attorneys Fees
The MTCC awarded Jardinico attorneys fees and costs in the amount of
P3,000.00 and P700.00, respectively, as prayed for in his complaint. The
RTC deleted the award, consistent with its ruling that petitioner was without
fault or negligence. The Court of Appeals, however, reinstated the award of
attorneys fees after ruling that petitioner was liable for its agents negligence.
The award of attorneys fees lies within the discretion of the court and
depends upon the circumstances of each case.[19] We shall not interfere with
the discretion of the Court of Appeals. Jardinico was compelled to litigate for
the protection of his interests and for the recovery of damages sustained as a
result of the negligence of petitioners agent.[20]
In sum, we rule that Kee is a builder in good faith. The disposition of the
Court of Appeals that Kee is entitled to the rights granted him under Articles
448, 546 and 548 of the New Civil Code is deleted, in view of the deed of
sale entered into by Kee and Jardinico, which deed now governs the rights of
Jardinico and Kee as to each other. There is also no further need, as ruled
by the appellate Court, to remand the case to the court of origin for
determination of the actual value of the improvements and the property (Lot
9), as well as for further proceedings in conformity with Article 448 of the
New Civil Code.
WHEREFORE, the petition is partially GRANTED. The Decision of the
Court of Appeals is hereby MODIFIED as follows:
(1) Wilson Kee is declared a builder in good faith;
(2) Petitioner Pleasantville Development Corporation and
respondent C.T. Tones Enterprises, Inc. are declared
solidarily liable for damages due to negligence; however,
since the amount and/or extent of such damages was not
proven during the trial, the same cannot now be quantified
and awarded;
(3) Petitioner Pleasantville Develpment Corporation and
respondent C.T. Torres Enterprises, Inc. are ordered to pay
in solidum the amount of P3,000.00 to Jardinico as attorneys
fees, as well as litigation expenses; and
(4) The award of rentals to Jardinico is dispensed with.
SO ORDERED.
Narvasa, C.J. (Chairman), Davide, Jr., and Melo, JJ., concur.
Francisco, J., took no part. Member of the division in the CA which
rendered the assailed decision.
14. FIRST DIVISION [G.R. No. 122544. January 28, 1999]
REGINA P. DIZON, AMPARO D. BARTOLOME, FIDELINA D. BALZA,
ESTER ABAD DIZON and JOSEPH ANTHONY DIZON, RAYMUND A.
DIZON, GERARD A. DIZON, and JOSE A. DIZON, JR., petitioners,
vs. COURT OF APPEALS and OVERLAND EXPRESS LINES,
INC., respondents.
[G.R. No. 124741. January 28, 1999]
REGINA P. DIZON, AMPARO D. BARTOLOME, FIDELINA D. BALZA,
ESTER ABAD DIZON and JOSEPH ANTHONY DIZON, RAYMUND A.
DIZON, GERARD A. DIZON, and JOSE A. DIZON, JR., petitioners,
vs. COURT OF APPEALS, HON. MAXIMIANO C. ASUNCION, and
OVERLAND EXPRESS LINES, INC., respondents.
DECISION
MARTINEZ, J.:
Two consolidated petitions were filed before us seeking to set aside and
annul the decisions and resolutions of respondent Court of Appeals. What
seemed to be a simple ejectment suit was juxtaposed with procedural
intricacies which finally found its way to this Court.
G. R. NO. 122544:
On May 23, 1974, private respondent Overland Express Lines, Inc.
(lessee) entered into a Contract of Lease with Option to Buy with
petitioners[1] (lessors) involving a 1,755.80 square meter parcel of land
situated at corner MacArthur Highway and South "H" Street, Diliman, Quezon
City. The term of the lease was for one (1) year commencing from May 16,
1974 up to May 15, 1975. During this period, private respondent was granted
an option to purchase for the amount of P3,000.00 per square
meter. Thereafter, the lease shall be on a per month basis with a monthly
rental of P3,000.00.
For failure of private respondent to pay the increased rental
of P8,000.00 per month effective June 1976, petitioners filed an action for
ejectment (Civil Case No. VIII-29155) on November 10, 1976 before the then
City Court (now Metropolitan Trial Court) of Quezon City, Branch VIII. On
November 22, 1982, the City Court rendered judgment[2] ordering private
respondent to vacate the leased premises and to pay the sum
of P624,000.00 representing rentals in arrears and/or as damages in the
form of reasonable compensation for the use and occupation of the premises
during the period of illegal detainer from June 1976 to November 1982 at the
monthly rental of P8,000.00, less payments made, plus 12% interest per
annum from November 18, 1976, the date of filing of the complaint, until fully
paid, the sum of P8,000.00 a month starting December 1982, until private
respondent fully vacates the premises, and to pay P20,000.00 as and by way
of attorney's fees.
Private respondent filed a certiorari petition praying for the issuance of a
restraining order enjoining the enforcement of said judgment and dismissal of
the case for lack of jurisdiction of the City Court.
On September 26, 1984, the then Intermediate Appellate Court[3] (now
Court of Appeals) rendered a decision[4] stating that:
"x x x, the alleged question of whether petitioner was granted an
extension of the option to buy the property; whether such option, if
any, extended the lease or whether petitioner actually paid the
alleged P300,000.00 to Fidela Dizon, as representative of private
respondents in consideration of the option and, whether petitioner
thereafter offered to pay the balance of the supposed purchase price,
are all merely incidental and do not remove the unlawful detainer
case from the jurisdiction of respondent court. In consonance with
the ruling in the case of Teodoro, Jr. vs. Mirasol (supra), the above
matters may be raised and decided in the unlawful detainer suit as,
to rule otherwise, would be a violation of the principle prohibiting
multiplicity of suits. (Original Records, pp. 38-39)."
The motion for reconsideration was denied. On review, this Court
dismissed the petition in a resolution dated June 19, 1985 and likewise
denied private respondent's subsequent motion for reconsideration in a
resolution dated September 9, 1985.[5]
On October 7, 1985, private respondent filed before the Regional Trial
Court (RTC) of Quezon City (Civil Case No. Q-45541) an action for Specific
Performance and Fixing of Period for Obligation with prayer for the issuance
of a restraining order pending hearing on the prayer for a writ of preliminary
injunction. It sought to compel the execution of a deed of sale pursuant to the
option to purchase and the receipt of the partial payment, and to fix the
period to pay the balance. In an Order dated October 25, 1985, the trial court
denied the issuance of a writ of preliminary injunction on the ground that the
decision of the then City Court for the ejectment of the private respondent,
having been affirmed by the then Intermediate Appellate Court and the
Supreme Court, has become final and executory.
Unable to secure an injunction, private respondent also filed before the
RTC of Quezon City, Branch 102 (Civil Case No. Q-46487) on November 15,
1985 a complaint for Annulment of and Relief from Judgment with injunction
and damages. In its decision[6] dated May 12, 1986, the trial court dismissed
the complaint for annulment on the ground of res judicata, and the writ of
preliminary injunction previously issued was dissolved. It also ordered private
respondent to pay P3,000.00 as attorney's fees. As a consequence of private
respondent's motion for reconsideration, the preliminary injunction was
reinstated, thereby restraining the execution of the City Court's judgment on
the ejectment case.
 The two cases were thereafter consolidated before the RTC of Quezon
City, Branch 77. On April 28, 1989, a decision[7] was rendered dismissing
private respondent's complaint in Civil Case No. Q-45541 (specific
performance case) and denying its motion for reconsideration in Civil Case
No. 46487 (annulment of the ejectment case). The motion for reconsideration
of said decision was likewise denied.
On appeal,[8] respondent Court of Appeals rendered a
decision[9] upholding the jurisdiction of the City Court of Quezon City in the
ejectment case. It also concluded that there was a perfected contract of sale
between the parties on the leased premises and that pursuant to the option
to buy agreement, private respondent had acquired the rights of a vendee in
a contract of sale. It opined that the payment by private respondent
of P300,000.00 on June 20, 1975 as partial payment for the leased property,
which petitioners accepted (through Alice A. Dizon) and for which an official
receipt was issued, was the operative act that gave rise to a perfected
contract of sale, and that for failure of petitioners to deny receipt thereof,
private respondent can therefore assume that Alice A. Dizon, acting as agent
of petitioners, was authorized by them to receive the money in their
behalf. The Court of Appeals went further by stating that in fact, what was
entered into was a "conditional contract of sale" wherein ownership over the
leased property shall not pass to the private respondent until it has fully paid
the purchase price. Since private respondent did not consign to the court the
balance of the purchase price and continued to occupy the subject premises,
it had the obligation to pay the amount of P1,700.00 in monthly rentals until
full payment of the purchase price. The dispositive portion of said decision
reads:
"WHEREFORE, the appealed decision in Case No. 46487 is
AFFIRMED. The appealed decision in Case No. 45541 is, on the
other hand, ANNULLED and SET ASIDE. The defendants-appellees
are ordered to execute the deed of absolute sale of the property in
question, free from any lien or encumbrance whatsoever, in favor of
the plaintiff-appellant, and to deliver to the latter the said deed of sale,
as well as the owner's duplicate of the certificate of title to said
property upon payment of the balance of the purchase price by the
plaintiff-appellant. The plaintiff-appellant is ordered to pay P1,700.00
per month from June 1976, plus 6% interest per annum, until
payment of the balance of the purchase price, as previously agreed
upon by the parties.
SO ORDERED."
Upon denial of the motion for partial reconsideration (Civil Case No. Q-
45541) by respondent Court of Appeals,[10] petitioners elevated the
case via petition for certiorari questioning the authority of Alice A. Dizon as
agent of petitioners in receiving private respondent's partial payment
amounting to P300,000.00 pursuant to the Contract of Lease with Option to
Buy. Petitioners also assail the propriety of private respondent's exercise of
the option when it tendered the said amount on June 20, 1975 which
purportedly resulted in a perfected contract of sale.
G. R. NO. 124741:
Petitioners filed with respondent Court of Appeals a motion to remand
the records of Civil Case No. 38-29155 (ejectment case) to the Metropolitan
Trial Court (MTC), then City Court of Quezon City, Branch 38, for execution
of the judgment[11] dated November 22, 1982 which was granted in a
resolution dated June 29, 1992. Private respondent filed a motion to
reconsider said resolution which was denied.
Aggrieved, private respondent filed a petition for certiorari, prohibition
with preliminary injunction and/or restraining order with this Court (G.R. Nos.
106750-51) which was dismissed in a resolution dated September 16, 1992
on the ground that the same was a refiled case previously dismissed for lack
of merit. On November 26, 1992, entry of judgment was issued by this Court.
On July 14, 1993, petitioners filed an urgent ex-parte motion for
execution of the decision in Civil Case No. 38-29155 with the MTC of
Quezon City, Branch 38. On September 13, 1993, the trial court ordered the
issuance of a third alias writ of execution. In denying private respondent's
motion for reconsideration, it ordered the immediate implementation of the
third writ of execution without delay.
On December 22, 1993, private respondent filed with the Regional Trial
Court (RTC) of Quezon City, Branch 104 a petition for certiorari and
prohibition with preliminary injunction/restraining order (SP. PROC. No. 93-
18722) challenging the enforceability and validity of the MTC judgment as
well as the order for its execution.
On January 11, 1994, RTC of Quezon City, Branch 104 issued an
order[12] granting the issuance of a writ of preliminary injunction upon private
respondent's posting of an injunction bond of P50,000.00.
Assailing the aforequoted order after denial of their motion for partial
reconsideration, petitioners filed a petition[13] for certiorari and prohibition with
a prayer for a temporary restraining order and/or preliminary injunction with
the Court of Appeals. In its decision,[14] the Court of Appeals dismissed the
petition and ruled that:
"The avowed purpose of this petition is to enjoin the public
respondent from restraining the ejectment of the private
respondent. To grant the petition would be to allow the ejectment
of the private respondent. We cannot do that now in view of the
decision of this Court in CA-G.R. CV Nos. 25153-54. Petitioners'
 alleged right to eject private respondent has been demonstrated
to be without basis in the said civil case. The petitioners have
been shown, after all, to have no right to eject private
respondents.
WHEREFORE, the petition is DENIED due course and is
accordingly DISMISSED.
SO ORDERED."[15]
Petitioners' motion for reconsideration was denied in a resolution[16] by
the Court of Appeals stating that:
"This court in its decision in CA-G.R. CV Nos. 25153-54 declared
that the plaintiff-appellant (private respondent herein) acquired the
rights of a vendee in a contract of sale, in effect, recognizing the right
of the private respondent to possess the subject
premises. Considering said decision, we should not allow ejectment;
to do so would disturb the status quo of the parties since the
petitioners are not in possession of the subject property. It would be
unfair and unjust to deprive the private respondent of its possession
of the subject property after its rights have been established in a
subsequent ruling.
WHEREFORE, the motion for reconsideration is DENIED for
lack of merit.
SO ORDERED."[17]
Hence, this instant petition.
We find both petitions impressed with merit.
First. Petitioners have established a right to evict private respondent
from the subject premises for non-payment of rentals. The term of the
Contract of Lease with Option to Buy was for a period of one (1) year (May
16, 1974 to May 15, 1975) during which the private respondent was given an
option to purchase said property at P3,000.00 per square meter. After the
expiration thereof, the lease was for P3,000.00 per month.
Admittedly, no definite period beyond the one-year term of lease was
agreed upon by petitioners and private respondent. However, since the rent
was paid on a monthly basis, the period of lease is considered to be from
month to month in accordance with Article 1687 of the New Civil
Code.[18] Where the rentals are paid monthly, the lease, even if verbal may
be deemed to be on a monthly basis, expiring at the end of every month
pursuant to Article 1687, in relation to Article 1673 of the Civil Code.[19] In
such case, a demand to vacate is not even necessary for judicial action after
the expiration of every month.[20]
When private respondent failed to pay the increased rental of P8,000.00
per month in June 1976, the petitioners had a cause of action to institute an
ejectment suit against the former with the then City Court. In this regard, the
City Court (now MTC) had exclusive jurisdiction over the ejectment suit. The
filing by private respondent of a suit with the Regional Trial Court for specific
performance to enforce the option to purchase did not divest the then City
Court of its jurisdiction to take cognizance over the ejectment case. Of note is
the fact that the decision of the City Court was affirmed by both the
Intermediate Appellate Court and this Court.
Second. Having failed to exercise the option within the stipulated one-
year period, private respondent cannot enforce its option to purchase
anymore. Moreover, even assuming arguendo that the right to exercise the
option still subsists at the time private respondent tendered the amount on
June 20, 1975, the suit for specific performance to enforce the option to
purchase was filed only on October 7, 1985 or more than ten (10) years after
accrual of the cause of action as provided under Article 1144 of the New Civil
Code.[21]
In this case, there was a contract of lease for one (1) year with option to
purchase. The contract of lease expired without the private respondent, as
lessee, purchasing the property but remained in possession thereof. Hence,
there was an implicit renewal of the contract of lease on a monthly basis. The
other terms of the original contract of lease which are revived in the implied
new lease under Article 1670 of the New Civil Code[22] are only those terms
which are germane to the lessees right of continued enjoyment of the
property leased.[23] Therefore, an implied new lease does not ipso facto carry
with it any implied revival of private respondent's option to purchase (as
lessee thereof) the leased premises. The provision entitling the lessee the
option to purchase the leased premises is not deemed incorporated in the
impliedly renewed contract because it is alien to the possession of the
lessee. Private respondents right to exercise the option to purchase expired
with the termination of the original contract of lease for one year. The
rationale of this Court is that:
This is a reasonable construction of the provision, which is based on the
presumption that when the lessor allows the lessee to continue enjoying
possession of the property for fifteen days after the expiration of the contract
he is willing that such enjoyment shall be for the entire period corresponding
to the rent which is customarily paid in this case up to the end of the month
because the rent was paid monthly.Necessarily, if the presumed will of the
parties refers to the enjoyment of possession the presumption covers the
other terms of the contract related to such possession, such as the amount of
rental, the date when it must be paid, the care of the property, the
responsibility for repairs, etc. But no such presumption may be indulged in
with respect to special agreements which by nature are foreign to the right of
occupancy or enjoyment inherent in a contract of lease.[24]
Third. There was no perfected contract of sale between petitioners and
private respondent. Private respondent argued that it delivered the check
of P300,000.00 to Alice A. Dizon who acted as agent of petitioners pursuant
to the supposed authority given by petitioner Fidela Dizon, the payee
thereof. Private respondent further contended that petitioners filing of the
ejectment case against it based on the contract of lease with option to buy
holds petitioners in estoppel to question the authority of petitioner Fidela
Dizon. It insisted that the payment of P300,000.00 as partial payment of the
purchase price constituted a valid exercise of the option to buy.
Under Article 1475 of the New Civil Code, the contract of sale is
perfected at the moment there is a meeting of minds upon the thing which is
the object of the contract and upon the price. From that moment, the parties
may reciprocally demand performance, subject to the provisions of the law
governing the form of contracts. Thus, the elements of a contract of sale are
consent, object, and price in money or its equivalent. It bears stressing that
the absence of any of these essential elements negates the existence of a
perfected contract of sale. Sale is a consensual contract and he who alleges
it must show its existence by competent proof.[25]
In an attempt to resurrect the lapsed option, private respondent
gave P300,000.00 to petitioners (thru Alice A. Dizon) on the erroneous
presumption that the said amount tendered would constitute a perfected
contract of sale pursuant to the contract of lease with option to buy. There
was no valid consent by the petitioners (as co-owners of the leased premises)
on the supposed sale entered into by Alice A. Dizon, as petitioners alleged
agent, and private respondent. The basis for agency is representation and a
person dealing with an agent is put upon inquiry and must discover upon his
peril the authority of the agent.[26] As provided in Article 1868 of the New Civil
Code,[27] there was no showing that petitioners consented to the act of Alice
A. Dizon nor authorized her to act on their behalf with regard to her
transaction with private respondent. The most prudent thing private
respondent should have done was to ascertain the extent of the authority of
Alice A. Dizon. Being negligent in this regard, private respondent cannot
seek relief on the basis of a supposed agency.
In Bacaltos Coal Mines vs. Court of Appeals,[28] we explained the rule
in dealing with an agent:
Every person dealing with an agent is put upon inquiry and must discover
upon his peril the authority of the agent. If he does not make such inquiry, he
is chargeable with knowledge of the agents authority, and his ignorance of
that authority will not be any excuse. Persons dealing with an assumed agent,
whether the assumed agency be a general or special one, are bound at their
peril, if they would hold the principal, to ascertain not only the fact of the
agency but also the nature and extent of the authority, and in case either is
controverted, the burden of proof is upon them to establish it.
For the long years that private respondent was able to thwart the
execution of the ejectment suit rendered in favor of petitioners, we now
write finis to this controversy and shun further delay so as to ensure that this
case would really attain finality.
WHEREFORE, in view of the foregoing, both petitions are
GRANTED. The decision dated March 29, 1994 and the resolution dated
October 19, 1995 in CA-G.R. CV No. 25153-54, as well as the decision dated
December 11, 1995 and the resolution dated April 23, 1997 in CA-G.R. SP
No. 33113 of the Court of Appeals are hereby REVERSED and SET ASIDE.
Let the records of this case be remanded to the trial court for immediate
execution of the judgment dated November 22, 1982 in Civil Case No. VIII-
29155 of the then City Court (now Metropolitan Trial Court) of Quezon City,
Branch VIII as affirmed in the decision dated September 26, 1984 of the then
Intermediate Appellate Court (now Court of Appeals) and in the resolution
dated June 19, 1985 of this Court.
However, petitioners are ordered to REFUND to private respondent the
amount of P300,000.00 which they received through Alice A. Dizon on June
20, 1975.
SO ORDERED.
Davide, Jr., C.J. (Chairman), Melo, Kapunan and Pardo, JJ., concur.
SPECIAL FIRST DIVISION
[G.R. No. 122544. January 28, 2003]
REGINA P. DIZON, AMPARO D. BARTOLOME, FIDELINA D.
BALZA, ESTER ABAD DIZON and JOSEPH ANTHONY DIZON,
RAYMUND A. DIZON, GERARD A. DIZON and JOSE A. DIZON,
JR., petitioners, vs. COURT OF APPEALS and OVERLAND EXPRESS
LINES, INC., respondents.
[G.R. No. 124741. January 28, 2003]
REGINA P. DIZON, AMPARO D. BARTOLOME, FIDELINA D.
BALZA, ESTER ABAD DIZON and JOSEPH ANTHONY DIZON,
RAYMUND A. DIZON, GERARD A. DIZON and JOSE A. DIZON,
JR., petitioners, vs. COURT OF APPEALS, HON. MAXIMIANO C.
ASUNCION and OVERLAND EXPRESS LINES, INC., respondents.
RESOLUTION
YNARES-SANTIAGO, J.:
On January 28, 1999, this Court rendered judgment in these
consolidated cases as follows:
WHEREFORE, in view of the foregoing, both petitions are GRANTED. The
decision dated March 29, 1994 and the resolution dated October 19, 1995 in
CA-G.R. CV Nos. 25153-54, as well as the decision dated December 11,
1995 and the resolution dated April 23, 1997 in CA-G.R. SP No. 33113 of the
Court of Appeals are hereby REVERSED and SET ASIDE.
Let the records of this case be remanded to the trial court for immediate
execution of the judgment dated November 22, 1982 in Civil Case No. VIII-
29155 of the then City Court (now Metropolitan Trial Court) of Quezon City,
Branch III as affirmed in the decision dated September 26, 1984 of the then
Intermediate Appellate Court (now Court of Appeals) and in the resolution
dated June 19, 1985 of this Court.
However, petitioners are ordered to REFUND to private respondent the
amount of P300,000.00 which they received through Alice A. Dizon on June
20, 1975.
SO ORDERED.
Private respondent filed a Motion for Reconsideration, Second Motion
for Reconsideration, and Motion to Suspend Procedural Rules in the Higher
Interest of Substantial Justice, all of which have been denied by this
Court. This notwithstanding, the cases were set for oral argument on March
21, 2001, on the following issues:
1. WHETHER THERE ARE CIRCUMSTANCES THAT WOULD JUSTIFY
SUSPENSION OF THE RULES OF COURT;
2. WHETHER THE SUM OF P300,000.00 RECEIVED BY ALICE DIZON
FROM PRIVATE RESPONDENT WAS INTENDED AS PARTIAL PAYMENT
OF THE PURCHASE PRICE OF THE PROPERTY, OR AS PAYMENT OF
BACK RENTALS ON THE PROPERTY;
3. WHETHER ALICE DIZON WAS AUTHORIZED TO RECEIVE THE SUM
OF P300,000.00 ON BEHALF OF PETITIONERS;
4. (A) IF SO, WHETHER PETITIONERS ARE ESTOPPED FROM
QUESTIONING THE BELATED EXERCISE BY PRIVATE RESPONDENT
OF ITS OPTION TO BUY WHEN THEY ACCEPTED THE SAID PARTIAL
PAYMENT;
(B) IF SO, WHETHER ALICE DIZON CAN VALIDLY BIND PETITIONERS IN
THE ABSENCE OF A WRITTEN POWER OF ATTORNEY;
5. (A) WHETHER THERE WAS A PERFECTED CONTRACT OF SALE
BETWEEN THE PARTIES;
(B) WHETHER THERE WAS A CONTRACT OF SALE AT LEAST WITH
RESPECT TO THE SHARES OF FIDELA AND ALICE DIZON; AND
6. WHETHER PRIVATE RESPONDENTS ACTION FOR SPECIFIC
PERFORMANCE HAS PRESCRIBED.
In order to resolve the first issue, it is necessary to pass upon the other
questions which relate to the merits of the case. It is only where there exist
strong compelling reasons, such as serving the ends of justice and
preventing a miscarriage thereof, that this Court can suspend the rules.[1]
After reviewing the records, we find that, despite all of private
respondents protestations, there is absolutely no written proof of Alice Dizons
authority to bind petitioners. First of all, she was not even a co-owner of the
property. Neither was she empowered by the co-owners to act on their behalf.
The acceptance of the amount of P300,000.00, purportedly as partial
payment of the purchase price of the land, was an act integral to the sale of
the land. As a matter of fact, private respondent invokes such receipt of
payment as giving rise to a perfected contract of sale. In this connection,
Article 1874 of the Civil Code is explicit that: When a sale of a piece of land
or any interest therein is through an agent, the authority of the latter shall be
in writing; otherwise, the sale shall be void.
When the sale of a piece of land or any interest thereon is through an agent,
the authority of the latter shall be in writing; otherwise, the sale shall be
void. Thus the authority of an agent to execute a contract for the sale of real
estate must be conferred in writing and must give him specific authority,
either to conduct the general business of the principal or to execute a binding
contract containing terms and conditions which are in the contract he did
execute. A special power of attorney is necessary to enter into any contract
by which the ownership of an immovable is transmitted or acquired either
gratuitously or for a valuable consideration. The express mandate required
by law to enable an appointee of an agency (couched) in general terms to
sell must be one that expressly mentions a sale or that includes a sale as a
necessary ingredient of the act mentioned. For the principal to confer the
right upon an agent to sell real estate, a power of attorney must so express
the powers of the agent in clear and unmistakable language.When there is
any reasonable doubt that the language so used conveys such power, no
such construction shall be given the document.[2]
It necessarily follows, therefore, that petitioners cannot be deemed to
have received partial payment of the supposed purchase price for the land
through Alice Dizon. It cannot even be said that Alice Dizons acceptance of
the money bound at least the share of Fidela Dizon, in the absence of a
written power of attorney from the latter. It should be borne in mind that the
Receipt dated June 20, 1975, while made out in the name of Fidela Dizon,
was signed by Alice Dizon alone.
Moreover, there could not have been a perfected contract of sale. As we
held in our Decision dated January 28, 1999, the implied renewal of the
contract of lease between the parties affected only those terms and
conditions which are germane to the lessees right of continued enjoyment of
the property. The option to purchase afforded private respondent expired
after the one-year period granted in the contract. Otherwise stated, the
implied renewal of the lease did not include the option to purchase. We see
no reason to disturb our ruling on this point, viz:
In this case, there was a contract of lease for one (1) year with option to
purchase. The contract of lease expired without the private respondent, as
lessee, purchasing the property but remained in possession thereof. Hence,
there was an implicit renewal of the contract of lease on a monthly basis. The
other terms of the original contract of lease which are revived in the implied
new lease under Article 1670 of the New Civil Code are only those terms
which are germane to the lessees right of continued enjoyment of the
property leased. Therefore, an implied new lease does not ipso facto carry
with it any implied revival of private respondent's option to purchase (as
lessee thereof) the leased premises. The provision entitling the lessee the
option to purchase the leased premises is not deemed incorporated in the
impliedly renewed contract because it is alien to the possession of the
lessee. Private respondents right to exercise the option to purchase expired
with the termination of the original contract of lease for one year. The
rationale of this Court is that:
This is a reasonable construction of the provision, which is based on the
presumption that when the lessor allows the lessee to continue enjoying
possession of the property for fifteen days after the expiration of the contract
he is willing that such enjoyment shall be for the entire period corresponding
to the rent which is customarily paid in this case up to the end of the month
because the rent was paid monthly.Necessarily, if the presumed will of the
parties refers to the enjoyment of possession the presumption covers the
other terms of the contract related to such possession, such as the amount of
rental, the date when it must be paid, the care of the property, the
responsibility for repairs, etc. But no such presumption may be indulged in
with respect to special agreements which by nature are foreign to the right of
occupancy or enjoyment inherent in a contract of lease.[3]
There being no merit in the arguments advanced by private respondent,
there is no need to suspend the Rules of Court and to admit the motion for
reconsideration. While it is within the power of the Court to suspend its own
rules, or to except a particular case from its operation, whenever the interest
of justice require it, however, the movant must show strong compelling
reasons such as serving the ends of justice and preventing a grave
miscarriage thereof,[4] none of which obtains in this case.
Litigation must end sometime and somewhere. An effective and efficient
administration of justice requires that, once a judgment has become final, the
winning party be not, through a mere subterfuge, deprived of the fruits of the
verdict. Courts must, therefore, guard against any scheme calculated to bring
about that result. Constituted as they are to put an end to controversies,
courts should frown upon any attempt to prolong them.[5]
ACCORDINGLY, the Motion to Suspend Procedural Rules in the Higher
Interest of Substantial Justice filed by private respondent is DENIED WITH
FINALITY. No further pleadings will be entertained in these cases.
SO ORDERED.
Puno, J., concur.
15. [G.R. No. 68166. February 12, 1997]
HEIRS OF EMILIANO NAVARRO, petitioner, vs. INTERMEDIATE
APPELLATE COURT AND HEIRS OF SINFOROSO PASCUAL,
respondents.
DECISION
HERMOSISIMA, JR., J.:
Unique is the legal question visited upon the claim of an applicant in a
Land Registration case by oppositors thereto, the Government and a
Government lessee, involving as it does ownership of land formed by
alluvium.
The applicant owns the property immediately adjoining the land sought
to be registered. His registered property is bounded on the east by the
Talisay River, on the west by the Bulacan River, and on the north by the
Manila Bay. The Talisay River and the Bulacan River flow down towards the
Manila Bay and act as boundaries of the applicant's registered land on the
east and on the west.
 The land sought to be registered was formed at the northern tip of the
applicant's land. Applicant's registered property is bounded on the north by
the Manila Bay.
The issue: May the land sought to be registered be deemed an
accretion in the sense that it naturally accrues in favor of the riparian owner
or should the land be considered as foreshore land?
Before us is a petition for review of: (1) the decision[1] and (2) two
subsequent resolutions[2] of the Intermediate Appellate Court[3] (now the
Court of Appeals) in Land Registration Case No. N-84,[4] the application over
which was filed by private respondents' predecessor-in-interest, Sinforoso
Pascual, now deceased, before the Court of First Instance[5] (now the
Regional Trial Court) of Balanga, Bataan.
There is no dispute as to the following facts:
On October 3, 1946, Sinforoso Pascual, now deceased, filed an application
for foreshore lease covering a tract of foreshore land in Sibocon, Balanga,
Bataan, having an area of approximately seventeen (17) hectares. This
application was denied on January 15, 1953. So was his motion for
reconsideration.
Subsequently, petitioners' predecessor-in-interest, also now deceased,
Emiliano Navarro, filed a fishpond application with the Bureau of Fisheries
covering twenty five (25) hectares of foreshore land also in Sibocon, Balanga,
Bataan. Initially, such application was denied by the Director of Fisheries on
the ground that the property formed part of the public domain. Upon motion
for reconsideration, the Director of Fisheries, on May 27, 1988, gave due
course to his application but only to the extent of seven (7) hectares of the
property as may be certified by the Bureau of Forestry as suitable for
fishpond purposes.
The Municipal Council of Balanga, Bataan, had opposed Emiliano Navarro's
application. Aggrieved by the decision of the Director of Fisheries, it
appealed to the Secretary of Natural Resources who, however, affirmed the
grant. The then Executive Secretary, acting in behalf of the President of the
Philippines, similarly affirmed the grant.
On the other hand, sometime in the early part of 1960, Sinforoso Pascual
filed an application to register and confirm his title to a parcel of land, situated
in Sibocon, Balanga, Bataan, described in Plan Psu-175181 and said to have
an area of 146,611 square meters. Pascual claimed that this land is an
accretion to his property, situated in Barrio Puerto Rivas, Balanga, Bataan,
and covered by Original Certificate of Title No. 6830. It is bounded on the
eastern side by the Talisay River, on the western side by the Bulacan River,
and on the northern side by the Manila Bay. The Talisay River as well as the
Bulacan River flow downstream and meet at the Manila Bay thereby
depositing sand and silt on Pascual's property resulting in an accretion
thereon. Sinforoso Pascual claimed the accretion as the riparian owner.
On March 25, 1960, the Director of Lands, represented by the Assistant
Solicitor General, filed an opposition thereto stating that neither Pascual nor
his predecessors-in-interest possessed sufficient title to the subject property,
the same being a portion of the public domain and, therefore, it belongs to
the Republic of the Philippines. The Director of Forestry, through the
Provincial Fiscal, similarly opposed Pascual's application for the same
reason as that advanced by the Director of Lands. Later on, however, the
Director of Lands withdrew his opposition. The Director of Forestry become
the sole oppositor.
On June 2, 1960, the court a quo issued an order of general default
excepting the Director of Lands and the Director of Forestry.
Upon motion of Emiliano Navarro, however, the order of general default was
lifted and, on February 13, 1961, Navarro thereupon filed an opposition to
Pascual's application. Navarro claimed that the land sought to be registered
has always been part of the public domain, it being a part of the foreshore of
Manila Bay; that he was a lessee and in possession of a part of the subject
property by virtue of a fishpond permit issued by the Bureau of Fisheries and
confirmed by the Office of the President; and that he had already converted
the area covered by the lease into a fishpond.
During the pendency of the land registration case, that is, on November 6,
1960, Sinforoso Pascual filed a complaint for ejectment against Emiliano
Navarro, one Marcelo Lopez and their privies, alleged by Pascual to have
unlawfully claimed and possessed, through stealth, force and strategy, a
portion of the subject property covered by Plan Psu-175181. The defendants
in the case were alleged to have built a provisional dike thereon: thus they
have thereby deprived Pascual of the premises sought to be registered. This,
notwithstanding repeated demands for defendants to vacate the property.
The case was decided adversely against Pascual. Thus, Pascual appealed
to the Court of First Instance (now Regional Trial Court) of Balanga, Bataan,
the appeal having been docketed as Civil Case No. 2873. Because of the
similarity of the parties and the subject matter, the appealed case for
ejectment was consolidated with the land registration case and was jointly
tried by the court a quo.
During the pendency of the trial of the consolidated cases, Emiliano Navarro
died on November 1, 1961 and was substituted by his heirs, the herein
petitioners.
Subsequently, on August 26, 1962, Pascual died and was substituted by his
heirs, the herein private respondents.
On November 10, 1975, the court a quo rendered judgment finding the
subject property to be foreshore land and, being a part of the public domain,
it cannot be the subject of land registration proceedings.
The decision's dispositive portion reads:
"WHEREFORE, judgment is rendered:
(1) Dismissing plaintiff [private respondent] Sinforoso Pascual's complaint for
ejectment in Civil Case No. 2873;
(2) Denying the application of Sinforoso Pascual for land registration over the
land in question; and
(3) Directing said Sinforoso Pascual, through his heirs, as plaintiff in Civil
Case No. 2873 and as applicant in Land Registration Case No. N-84 to pay
costs in both instances."[6]
The heirs of Pascual appealed and, before the respondent appellate
court, assigned the following errors:
"1. The lower court erred in not finding the land in question as an accretion
by the action of the Talisay and Bulacan Rivers to the land admittedly owned
by applicants-appellants [private respondents].
2. The lower court erred in holding that the land in question is foreshore land.
3. The lower court erred in not ordering the registration of the and is
controversy in favor of applicants-appellants [private respondents].
4. The lower court erred in not finding that the applicants-appellants [private
respondents] are entitled to eject the oppositor-appellee [petitioners]."[7]
On appeal, the respondent court reversed the findings of the court a
quo and granted the petition for registration of the subject property but
excluding therefrom fifty (50) meters from corner 2 towards corner 1; and fifty
meters (50) meters from corner 5 towards corner 6 of the Psu-175181.
The respondent appellate court explained the reversal in this wise:
"The paramount issue to be resolved in this appeal as set forth by the parties
in their respective briefs is whether or not the land sought to be registered is
accretion or foreshore land, or, whether or not said land was formed by the
action of the two rivers of Talisay and Bulacan or by the action of the Manila
Bay. If formed by the action of the Talisay and Bulacan rivers, the subject
land is accretion but if formed by the action of the Manila Bay then it is
foreshore land.
xxx
It is undisputed that applicants-appellants [private respondents] owned the
land immediately adjoining the land sought to be registered. Their property
which is covered by OCT No. 6830 is bounded on the east by the Talisay
River, on the west by the Bulacan River, and on the north by the Manila Bay.
The Talisay and Bulacan rivers come from inland flowing downstream
towards the Manila Bay. In other words, between the Talisay River and the
Bulacan River is the property of applicants with both rivers acting as the
boundary to said land and the flow of both rivers meeting and emptying into
the Manila Bay. The subject land was formed at the tip or apex of appellants'
[private respondents'] land adding thereto the land now sought to be
registered.
This makes this case quite unique because while it is undisputed that the
subject land is immediately attached to appellants' [private respondents'] land
and forms the tip thereof, at the same time, said land immediately faces the
Manila Bay which is part of the sea. We can understand therefore the
confusion this case might have caused the lower court, faced as it was with
the uneasy problem of deciding whether or not the subject land was formed
by the action of the two rivers or by the action of the sea. Since the subject
land is found at the shore of the Manila Bay facing appellants' [private
respondents'] land, it would be quite easy to conclude that it is foreshore and
therefore part of the patrimonial property of the State as the lower court did in
fact rule x x x .
xxx
It is however undisputed that appellants' [private respondents'] land lies
between these two rivers and it is precisely appellants' [private respondents']
land which acts as a barricade preventing these two rivers to meet. Thus,
since the flow of the two rivers is downwards to the Manila Bay the
sediments of sand and silt are deposited at their mouths.
It is, therefore, difficult to see how the Manila Bay could have been the cause
of the deposit thereat for in the natural course of things, the waves of the sea
eat the land on the shore, as they suge [sic] inland. It would not therefore add
anything to the land but instead subtract from it due to the action of the
waves and the wind. It is then more logical to believe that the two rivers
flowing towards the bay emptied their cargo of sand, silt and clay at their
mouths, thus causing appellants' [private respondents'] land to accumulate
therein.
However, our distinguished colleage [sic], Mr. Justice Serrano, do [sic] not
seem to accept this theory and stated that the subject land arose only when x
x x Pascual planted 'palapat' and 'bakawan' trees thereat to serve as a
boundary or strainer. But we do not see how this act of planting trees by
Pascual would explain how the land mass came into being. Much less will it
prove that the same came from the sea. Following Mr. Justice Serrano's
argument that it were the few trees that acted as strainers or blocks, then the
land that grew would have stopped at the place where the said trees were
planted. But this is not so because the land mass went far beyond the
boundary, or where the trees were planted.
On the other hand, the picture-exhibits of appellants' [private respondents']
clearly show that the land that accumulated beyond the so-called boundary,
as well as the entire area being applied for is dry land, above sea level, and
bearing innumerable trees x x x. The existence of vegetation on the land
could only confirm that the soil thereat came from inland rather than from the
sea, for what could the sea bring to the shore but sand, pebbles, stones,
rocks and corrals? On the other hand, the two rivers would be bringing soil
on their downward flow which they brought along from the eroded mountains,
the lands along their path, and dumped them all on the northern portion of
appellants' [private respondents'] land.
In view of the foregoing, we have to deviate from the lower court's
finding. While it is true that the subject land is found at the shore of the
Manila Bay fronting appellants' [private respondents'] land, said land is not
foreshore but an accretion from the action of the Talisay and Bulacan
rivers. In fact, this is exactly what the Bureau of Lands found out, as shown in
the following report of the Acting Provincial Officer, Jesus M. Orozco, to wit:
'Upon ocular inspection of the land subject of this registration made on June
11, 1960, it was found out that the said land is x x x sandwitched [sic] by two
big rivers x x x These two rivers bring down considerable amount of soil and
sediments during floods every year thus raising the soil of the land adjoining
the private property of the applicant [private respondents]. About four-fifth [sic]
of the area applied for is now dry land whereon are planted palapat trees
thickly growing thereon. It is the natural action of these two rivers that has
caused the formation of said land x x x subject of this registration case. It has
been formed, therefore, by accretion. And having been formed by accretion,
the said land may be considered the private property of the riparian owner
who is the applicant herein [private respondents'] x x x .
In view of the above, the opposition hereto filed by the government should be
withdrawn, except for the portion recommended by the land investigator in
his report dated May 2, 1960, to be excluded and considered foreshore. x x x'
Because of this report, no less than the Solicitor General representing the
Bureau of Lands withdrew his opposition dated March 25, 1960, and limited
'the same to the northern portion of the land applied for, compromising a strip
50 meters wide along the Manila Bay, which should be declared public land
as part of the foreshore' x x x.[8]
Pursuant to the aforecited decision, the respondent appellate court ordered
the issuance of the corresponding decree of registration in the name of
private respondents and the reversion to private respondents of the
possession of the portion of the subject property included in Navarro's
fishpond permit.
On December 20, 1978, petitioners filed a motion for reconsideration of
the aforecited decision. The Director of Forestry also moved for the
reconsideration of the same decision. Both motions were opposed by private
respondents on January 27, 1979.
On November 21, 1980, respondent appellate court promulgated a
resolution denying the motion for reconsideration filed by the Director of
Forestry. It, however, modified its decision, to read, viz:
"(3). Ordering private oppositors Heirs of Emiliano Navarro to vacate that
portion included in their fishpond permit covered by Plan Psu-175181 and
hand over possession of said portion to applicants-appellants, if the said
portion is not within the strip of land fifty (50) meters wide along Manila Bay
on the northern portion of the land subject of the registration proceedings and
which area is more particularly referred to as fifty (50) meters from corner 2
towards corner 1; and fifty (50) meters from corner 5 towards corner 6 of
Plan Psu-175181. x x x[9]
On December 15, 1980, we granted the Solicitor General, acting as
counsel for the Director of Forestry, an extension of time within which to file
in this court, a petition for review of the decision dated November 29, 1978 of
the respondent appellate court and of the aforecited resolution dated
November 21, 1980.
Thereafter, the Solicitor General, in behalf of the Director of Forestry,
filed a petition for review entitled, "The Director of Forestry vs. the Court of
Appeals."[10] We, however, denied the same in a minute resolution dated July
20, 1981, such petition having been prematurely filed at a time when the
Court of Appeals was yet to resolve petitioners' pending motion to set aside
the resolution dated November 21, 1980.
 On October 9, 1981, respondent appellate court denied petitioners'
motion for reconsideration of the decision dated November 29, 1978.
On October 17, 1981, respondent appellate court made an entry of
judgment stating that the decision dated November 29, 1978 had become
final and executory as against herein petitioners as oppositors in L.R.C. Case
No. N-84 and Civil Case No. 2873 of the Court of First Instance (now the
Regional Trial Court) of Balanga, Bataan.
On October 26, 1981, a second motion for reconsideration of the
decision dated November 29, 1978 was filed by petitioners' new counsel.
On March 26, 1982, respondent appellate court issued a resolution
granting petitioners' request for leave to file a second motion for
reconsideration.
On July 13, 1984, after hearing, respondent appellate court denied
petitioners' second motion for reconsideration on the ground that the same
was filed out of time, citing Rule 52, Section 1 of the Rules of Court which
provides that a motion for reconsideration shall be made ex-parte and filed
within fifteen (15) days from the notice of the final order or judgment.
Hence this petition where the respondent appellate court is imputed to
have palpably erred in appreciating the facts of the case and to have gravely
misapplied statutory and case law relating to accretion, specifically, Article
457 of the Civil Code.
We find merit in the petition.
The disputed property was brought forth by both the withdrawal of the
waters of Manila Bay and the accretion formed on the exposed foreshore
land by the action of the sea which brought soil and sand sediments in turn
trapped by the palapat and bakawan trees planted thereon by petitioner
Sulpicio Pascual in 1948.
Anchoring their claim of ownership on Article 457 of the Civil Code,
private respondents vigorously argue that the disputed 14-hectare land is an
accretion caused by the joint action of the Talisay and Bulacan Rivers which
run their course on the eastern and western boundaries, respectively, of
private respondents' own tract of land.
Accretion as a mode of acquiring property under said Article 457,
requires the concurrence of the following requisites: (1) that the accumulation
of soil or sediment be gradual and imperceptible; (2) that it be the result of
the action of the waters of the river; and (3) that the land where the accretion
takes place is adjacent to the bank of the river.[11] Accretion is the process
whereby the soil is deposited, while alluvium is the soil deposited on the
estate fronting the river bank;[12] the owner of such estate is called the
riparian owner. Riparian owners are, strictly speaking, distinct from littoral
owners, the latter being owners of lands bordering the shore of the sea or
lake or other tidal waters.[13] The alluvium, by mandate of Article 457 of the
Civil Code, is automatically owned by the riparian owner from the moment
the soil deposit can be seen[14] but is not automatically registered property,
hence, subject to acquisition through prescription by third persons.[15]
Private respondents' claim of ownership over the disputed property
under the principle of accretion, is misplaced.
First, the title of private respondents' own tract of land reveals its
northeastern boundary to be Manila Bay. Private respondents' land, therefore,
used to adjoin, border or front the Manila Bay and not any of the two rivers
whose torrential action, private respondents insist, is to account for the
accretion on their land. In fact, one of the private respondents, Sulpicio
Pascual, testified in open court that the waves of Manila Bay used to hit the
disputed land being part of the bay's foreshore but, after he had planted
palapat and bakawan trees thereon in 1948, the land began to rise.[16]
Moreover, there is no dispute as to the location of: (a) the disputed land;
(b) private respondents' own tract of land; (c) the Manila Bay; and, (d) the
Talisay and Bulacan Rivers. Private respondents' own land lies between the
Talisay and Bulacan Rivers; in front of their land on the northern side lies
now the disputed land where before 1948, there lay the Manila Bay. If the
accretion were to be attributed to the action of either or both of the Talisay
and Bulacan Rivers, the alluvium should have been deposited on either or
both of the eastern and western boundaries of private respondents' own tract
of land, not on the northern portion thereof which is adjacent to the Manila
Bay. Clearly lacking, thus, is the third requisite of accretion, which is, that the
alluvium is deposited on the portion of claimant's land which is adjacent to
the river bank.
Second, there is no dispute as to the fact that private respondents' own
tract of land adjoins the Manila Bay. Manila Bay is obviously not a river, and
jurisprudence is already settled as to what kind of body of water the Manila
Bay is. It is to be remembered that we held that:
"Appellant next contends that x x x Manila Bay cannot be considered as a
sea. We find said contention untenable. A bay is part of the sea, being a
mere indentation of the same:
'Bay. An opening into the land where the water is shut in on all sides except
at the entrance; an inlet of the sea; an arm of the sea, distinct from a river, a
bending or curbing of the shore of the sea or of a lake.' 7 C.J. 1013-1014."[17]
The disputed land, thus, is an accretion not on a river bank but on a sea
bank, or on what used to be the foreshore of Manila Bay which adjoined
private respindents' own tract of land on the northern side. As such, the
applicable law is not Article 457 of the Civil Code but Article 4 of the Spanish
Law of Waters of 1866.
The process by which the disputed land was formed, is not difficult to
discern from the facts of the case. As the trial court correctly observed:
"A perusal of the survey plan x x x of the land subject matter of these cases
shows that on the eastern side, the property is bounded by Talisay River, on
the western side by Bulacan River, on the southern side by Lot 1436 and on
the northern side by Manila Bay. It is not correct to state that the Talisay and
Bulacan Rivers meet a certain portion because the two rivers both flow
towards Manila Bay. The Talisay River is straight while the Bulacan River is a
little bit meandering and there is no portion where the two rivers meet before
they end up at Manila Bay. The land which is adjacent to the property
belonging to Pascual cannot be considered an accretion [caused by the
action of the two rivers].
Applicant Pascual x x x has not presented proofs to convince the Court that
the land he has applied for registration is the result of the settling down on
his registered land of soil, earth or other deposits so as to be rightfully be
considered as an accretion [caused by the action of the two rivers]. Said Art.
457 finds no applicability where the accretion must have been caused by
action of the bay."[18]
The conclusion formed by the trial court on the basis of the foregoing
observation is that the disputed land is part of the foreshore of Manila Bay
and therefore, part of the public domain. The respondent appellate court,
however, perceived the fact that petitioners' own land lies between the
Talisay and Bulacan Rivers, to be basis to conclude that the disputed land
must be an accretion formed by the action of the two rivers because private
respondents' own land acted as a barricade preventing the two rivers to meet
and that the current of the two rivers carried sediments of sand and silt
downwards to the Manila Bay which accumulated somehow to a 14-hectare
land. These conclusions, however, are fatally incongruous in the light of the
one undisputed critical fact: the accretion was deposited, not on either the
eastern or western portion of private respondents' land where a river each
runs, but on the northern portion of petitioners' land which adjoins the Manila
Bay. Worse, such conclusions are further eroded of their practical logic and
consonance with natural experience in the light of Sulpicio Pascual's
admission as to having planted palapat and bakawan trees on the northern
boundary of their own land. In amplification of this, plainly more reasonable
and valid are Justice Mariano Serrano's observations in his dissenting
opinion when he stated that:
"As appellants' (titled) land x x x acts as a barricade that prevents the two
rivers to meet, and considering the wide expanse of the boundary between
said land and the Manila Bay, measuring some 593.00 meters x x x it is
believed rather farfetched for the land in question to have been formed
through 'sediments of sand and salt [sic] . . . deposited at their [rivers']
mouths.' Moreover, if 'since the flow of the two rivers is downwards to the
Manila Bay the sediments of sand and silt are deposited at their mouths,' why
then would the alleged cargo of sand, silt and clay accumulate at the
northern portion of appellants' titled land facing Manila Bay instead of merely
at the mouths and banks of these two rivers? That being the case, the
accretion formed at said portion of appellants' titled [land] was not caused by
the current of the two rivers but by the action of the sea (Manila Bay) into
which the rivers empty.
The conclusion x x x is not supported by any reference to the evidence which,
on the contrary, shows that the disputed land was formed by the action of the
sea. Thus, no less than Sulpicio Pascual, one of the heirs of the original
applicant, testified on cross-examination that the land in dispute was part of
the shore and it was only in 1948 that he noticed that the land was beginning
to get higher after he had planted trees thereon in 1948. x x x
x x x it is established that before 1948 sea water from the Manila Bay at high
tide could reach as far as the dike of appellants' fishpond within their titled
property, which dike now separates this titled property from the land in
question. Even in 1948 when appellants had already
planted palapat and bakawan trees in the land involved, inasmuch as these
trees were yet small, the waves of the sea could still reach the dike. This
must be so because in x x x the survey plan of the titled property approved in
1918, said titled land was bounded on the north by Manila Bay. So Manila
Bay was adjacent to it on the north. It was only after the planting of the
aforesaid trees in 1948 that the land in question began to rise or to get higher
in elevation.
The trees planted by appellants in 1948 became a sort of strainer of the sea
water and at the same time a kind of block to the strained sediments from
being carried back to the sea by the very waves that brought them to the
former shore at the end of the dike, which must have caused the shoreline to
recede and dry up eventually raising the former shore leading to the
formation of the land in question."[19]
In other words, the combined and interactive effect of the planting of palapat
and bakawan trees, the withdrawal of the waters of Manila Bay eventually
resulting in the drying up of its former foreshore, and the regular torrential
action of the waters of Manila Bay, is the formation of the disputed land on
the northern boundary of private respondents' own tract of land.
The disputed property is an accretion on a sea bank, Manila Bay being an
inlet or an arm of the sea; as such, the disputed property is, under Article 4 of
the Spanish Law of Waters of 1866, part of the public domain.
At the outset, there is a need to distinguish between Manila Bay and
Laguna de Bay.
While we held in the case of Ignacio v. Director of Lands and
Valeriano[20] that Manila Bay is considered a sea for purposes of determining
which law on accretion is to be applied in multifarious situations, we have
ruled differently insofar as accretions on lands adjoining the Laguna de Bay
are concerned.
In the cases of Government of the P.I v. Colegio de San
Jose,[21] Republic v. Court of Appeals,[22] Republic v. Alagad[23], and Meneses
v. Court of Appeals,[24] we categorically ruled that Laguna de Bay is a lake
the accretion on which, by the mandate of Article 84 of the Spanish Law of
Waters of 1866, belongs to the owner of the land contiguous thereto.
The instant controversy, however, brings a situation calling for the
application of Article 4 of the Spanish Law of Waters of 1866, the disputed
land being an accretion on the foreshore of Manila Bay which is, for all legal
purposes, considered a sea.
Article 4 of the Spanish Law of Waters of August 3, 1866 provides as
follows:
"Lands added to the shores by accretions and alluvial deposits caused by the
action of the sea, form part of the public domain. When they are no longer
washed by the waters of the sea and are not necessary for purposes of
public utility, or for the establishment of special industries, or for the coast-
guard service, the Government shall declare them to be the property of the
owners of the estates adjacent thereto and as increment thereof."
In the light of the aforecited vintage but still valid law, unequivocal is the
public nature of the disputed land in this controversy, the same being an
accretion on a sea bank which, for all legal purposes, the foreshore of Manila
Bay is. As part of the public domain, the herein disputed land is intended for
public uses, and "so long as the land in litigation belongs to the national
domain and is reserved for public uses, it is not capable of being
appropriated by any private person, except through express authorization
granted in due form by a competent authority."[25]Only the executive and
possibly the legislative departments have the right and the power to make
the declaration that the lands so gained by action of the sea is no longer
necessary for purposes of public utility or for the cause of establishment of
special industries or for coast guard services.[26] Petitioners utterly fail to
show that either the executive or legislative department has already declared
the disputed land as qualified, under Article 4 of the Spanish Law of Waters
of 1866, to be the property of private respondents as owners of the estates
adjacent thereto.
WHEREFORE, the instant Petition for Review is hereby GRANTED.
The decision of the Intermediate Appellate Court (now Court of Appeals)
in CA G.R. No. 59044-R dated November 29, 1978 is hereby REVERSED
and SET ASIDE. The resolution dated November 21, 1980 and March 28,
1982, respectively, promulgated by the Intermediate Appellate Court are
likewise REVERSED and SET ASIDE.
The decision of the Court of First Instance (now the Regional Trial
Court), Branch 1, Balanga, Bataan, is hereby ORDERED REINSTATED.
Costs against private respondents.
SO ORDERED.
Padilla, (Chairman), Bellosillo and Kapunan, JJ., concur.
Vitug, J., concurs; The amendatory provisions of the Water Code (P.D.
1067) did not affect Article 4 of the Spanish Law of Waters of 1866.
16. 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.
17. G.R. No. L-46345 January 30, 1990
RESTITUTO CENIZA and JESUS CENIZA, petitioners, vs. THE HON.
COURT OF APPEALS, MAGNO DABON, VICENTA DABON, TERESITA
DABON, EUGENIA DABON, and TOMAS DABON, respondents.
Vicente P. Valera and Pedro Rosito & Jesus F. Balicanta for petitioners.
Victorino U. Montecillo for respondents.
GRINO-AQUINO, J.:
This is a petition for review of the order dated October 29, 1976, of the Court
of Appeals in CA-G.R. No. 48546 entitled, "Restituto Ceniza, et al. vs. Magno
Dabon, et al.," dismissing the petitioners' complaint for reconveyance of their
shares in co-ownership property and reversing the decision of the trial court
in their favor.
On June 14, 1967, the petitioners filed against private respondents, an action
in the Court of First Instance of Cebu for recovery of their title to Lots Nos.
627-B and 627-C (being portions of Lot No. 627 with an area of
approximately 5,306 square meters) situated in Casuntingan, Mandaue,
Cebu (now Mandaue City), which originally formed part of "Hacienda de
Mandaue" of the Seminario de San Carlos de Cebu. The Property is covered
by reconstituted Original Certificate of Title No. RO-10996 issued on
February 8, 1939 (formerly Decree No. 694438 issued on February 27, 1934)
in the name of "Vicente Dabon married to Marcela [or Marcelina] Ceniza." (pp.
7 and 19, Record on Appeal).
Petitioners are the descendants of Manuel Ceniza while the private
respondents are the descendants of his sister, Sofia Ceniza. Sofia Ceniza
was childless but she had an adopted daughter named Flaviana Ceniza, who
begot a daughter named Marced Ceniza and who in turn had a daughter
named Marcelina (or Marcela) Ceniza who married Vicente Dabon. Private
respondents are the children of this marriage and they are the great-great-
grandchildren of Sofia Ceniza.
On the other hand, Manuel Ceniza had an only son, Pablo, who had two
sons, Santiago and Jose Ceniza. Petitioners Restituto and Jesus Ceniza and
a certain Nemesia Ceniza-Albina are their children and the great-
grandchildren of Manuel Ceniza.
The records disclose that when Hacienda de Mandaue was subdivided for
resale to the occupants in 1929, Jose Ceniza and Vicente Dabon, who were
residing in the hacienda, jointly purchased Lot 627 on installment basis and
they agreed, for convenience, to have the land registered in the name of
Dabon. Since then, Jose Ceniza, Vicente Dabon, and their heirs have
possessed their respective portions of the land, declared the same for
taxation, paid real estate taxes on their respective shares, and made their
respective installment payments to the Seminario de San Carlos de Cebu.
After Dabon died in 1954, his seven (7) children, named Magno, Jacinta,
Tomas, Flaviana, Soledad, Teresita and Eugenia, succeeded to his
possession of a portion of the land.
On November 4, 1961, a private land surveyor, Espiritu Bunagan, on the
request of Jacinta Dabon and Restituto Ceniza who jointly defrayed the cost,
divided Lot 627 into three parts, namely:
(1) Lot No. 627-A with 3,538 square meters for Marcela Ceniza;
(2) Lot No. 627-B with 884 square meters for Restituto Ceniza; and
(3) Lot No. 627-C with 834 square meters for Nemesia Ceniza-Albina,
who later bequeathed her share to her brother, Jesus Ceniza. (p. 19,
Record on Appeal).
The present controversy arose because the private respondents refused to
convey Lots Nos. 627-B and 627-C to the petitioners. They claimed that their
predecessor-in-interest, Vicente Dabon, was the sole and exclusive owner of
Lot 627, by purchase from the Seminario de San Carlos de Cebu. In their
answer to the petitioners' complaint for reconveyance in June 1967, they
alleged that the petitioners' right of action had already prescribed.
Petitioners replied that Vicente Dabon held the land in trust for them, as co-
owners, hence, their action for reconveyance was imprescriptible.
On August 31, 1970, the trial court rendered judgment for the petitioners.
Finding that there existed a co-ownership among the parties, it ordered the
private respondents to execute deeds of conveyance of Lots Nos. 627-B and
627-C in favor of the plaintiffs, Restituto and Jesus Ceniza, respectively (p.
35, Record on Appeal).
On appeal by the defendants (now private respondents) the Court of Appeals
on October 29, 1976, reversed that decision of the trial court. It ruled that the
petitioners' right of action had prescribed after the lapse of 20 years from the
date of registration of the land on February 8, 1939 in Vicente Dabon's name
(p. 32, Rollo).
The petitioners have appealed to this Court by a petition for review under
Rule 45 of the Rules of Court.
The legal issue presented by the petition is whether the registration of the
title of the land in the name of one of the co-owner, constituted a repudiation
of the co-ownership for purposes of acquisitive prescription.
We find merit in the petition for review.
The trial court correctly ruled that since a trust relation and co-ownership
were proven to exist between the predecessors- in-interest of both petitioners
and private respondents, prescription did not run in favor of Dabon's heirs
except from the time that they repudiated the co-ownership and made the
repudiation known to the other co-owners, Restituto and Jesus Ceniza
(Cortes vs. Oliva, 33 Phil. 480).
Paragraph 5 of Article 494 of the Civil Code provides-
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.
The registration of Lot No. 627 in the name of Vicente Dabon created a trust
in favor of his co-owner Jose Ceniza, and the latter's heirs. Article 1452 of
the Civil Code states:
If two or more persons agree to purchase property and 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.
This Court has ruled in numerous cases involving fiduciary relations that, as
a general rule, the trustee's possession is not adverse and therefore cannot
ripen into a title by prescription. Adverse possession requires the
concurrence of the following circumstances:
a) that the trustee has performed unequivocal acts of repudiation
amounting to the ouster of the cestui que trust;
b) that such positive acts of repudiation have been made known to
the cestui que trust; and
c) that the evidence thereon should be clear and conclusive.
The above elements are not present here for the petitioners/ co-owners have
not been ousted from the land. They continue to possess their respective
shares of Lot 627 and they have been paying the realty taxes thereon.
Restituto's house stands on his portion of the Land. Assuming that the
private respondents' rejection of the subdivision plan for the partition of the
land was an act of repudiation of the co-ownership, prescription had not yet
set in when the petitioners instituted the present action for reconveyance.
These circumstances were overlooked by the Court of Appeals.
In Custodio v. Casiano 9 SCRA 841, we ruled that:
Where title to land was issued in the name of a co-heir merely with
the understanding that he would act as a trustee of his sisters, and
there is no evidence that this trust relation had ever been repudiated
by said trustee, it is held that a reaction of co-ownership existed
between such trustee and his sisters and the right of the successors-
in-interest of said sisters to bring the present action for recovery of
their shares therein against the successors-in-interest of said trustee
cannot barred by prescription, despite the, lapse of 25 years from the
date of registration of the land in the trustee's name. (Emphasis
supplied.)
In Escobar v. Locsin, 74 Phil. 86, we affirmed the duty of the courts to shield
fiduciary relations "against every manner of chicanery or detestable design
cloaked by legal technicalities" and to guard against misuse of the Torrens
system "to foment betrayal in the performance of a trust."
In this case, since the statutory period of limitation within which to file an
action for reconveyance, after the defendants had repudiated the co-
ownership in 1961, had not yet run its course when the petitioners filed said
action in 1967, the action was not barred by prescription.
WHEREFORE. the decision of the Court of appeals is hereby REVERSED
AND SET ASIDE and the decision dated August 31, 1970 of the then Court
of First Instance of Cebu, Branch VI, in Civil Case No. R-10030 is reinstated.
Costs against the private respondents.
SO ORDERED.
Narvasa, Cruz, Gancayco and Medialdea, JJ., concur.
18. G.R. No. 61584 November 25, 1992
DONATO S. PAULMITAN, JULIANA P. FANESA and RODOLFO
FANESA, petitioners, vs. COURT OF APPEALS, ALICIO PAULMITAN,
ELENA PAULMITAN, ABELINO PAULMITAN, ANITA PAULMITAN,
BAKING PAULMITAN, ADELINA PAULMITAN and ANITO
PAULMITAN, respondents.
ROMERO, J.:
This is a petition for review on certiorari seeking the reversal of the
decision 1 of the Court of Appeals, dated July 14, 1982 in CA-G.R. No.
62255-R entitled "Alicio Paulmitan, et al. v. Donato Sagario Paulmitan, et al."
which affirmed the decision 2 of the then Court of First Instance (now RTC) of
Negros Occidental, 12th Judicial District, Branch IV, Bacolod City, in Civil
Case No. 11770.
The antecedent facts are as follows:
Agatona Sagario Paulmitan, who died sometime in 1953, 3 left the two
following parcels of land located in the Province of Negros Occidental: (1) Lot
No. 757 with an area of 1,946 square meters covered by Original Certificate
of Title (OCT) No. RO-8376; and (2) Lot No. 1091 with an area of 69,080
square meters and covered by OCT No. RO-11653. From her marriage with
Ciriaco Paulmitan, who is also now deceased, Agatona begot two legitimate
children, namely: Pascual Paulmitan, who also died in 1953, 4 apparently
shortly after his mother passed away, and Donato Paulmitan, who is one of
the petitioners. Petitioner Juliana P. Fanesa is Donato's daughter while the
third petitioner, Rodolfo Fanes, is Juliana's husband. Pascual Paulmitan, the
other son of Agatona Sagario, is survived by the respondents, who are his
children, name: Alicio, Elena, Abelino, Adelina, Anita, Baking and Anito, all
surnamed Paulmitan.
Until 1963, the estate of Agatona Sagario Paulmitan remained unsettled and
the titles to the two lots mentioned above remained in the name of Agatona.
However, on August 11, 1963, petitioner Donato Paulmitan executed an
Affidavit of Declaration of Heirship, extrajudicially adjudicating unto himself
Lot No. 757 based on the claim that he is the only surviving heir of Agatona
Sagario. The affidavit was filed with the Register of Deeds of Negros
Occidental on August 20, 1963, cancelled OCT No. RO-8376 in the name of
Agatona Sagario and issued Transfer Certificate of Title (TCT) No. 35979 in
Donato's name.
As regards Lot No. 1091, Donato executed on May 28, 1974 a Deed of Sale
over the same in favor of petitioner Juliana P. Fanesa, his daughter. 5
In the meantime, sometime in 1952, for non-payment of taxes, Lot No. 1091
was forfeited and sold at a public auction, with the Provincial Government of
Negros Occidental being the buyer. A Certificate of Sale over the land was
executed by the Provincial Treasurer in favor of the Provincial Board of
Negros Occidental. 6
On May 29, 1974, Juliana P. Fanesa redeemed the property from the
Provincial Government of Negros Occidental for the amount of P2,959.09. 7
On learning of these transactions, respondents children of the late Pascual
Paulmitan filed on January 18, 1975 with the Court of First Instance of
Negros Occidental a Complaint against petitioners to partition the properties
plus damages.
Petitioners set up the defense of prescription with respect to Lot No. 757 as
an affirmative defense, contending that the Complaint was filed more than
eleven years after the issuance of a transfer certificate of title to Donato
Paulmitan over the land as consequence of the registration with the Register
of Deeds, of Donato's affidavit extrajudicially adjudicating unto himself Lot No.
757. As regards Lot No. 1091, petitioner Juliana P. Fanesa claimed in her
Answer to the Complaint that she acquired exclusive ownership thereof not
only by means of a deed of sale executed in her favor by her father,
petitioner Donato Paulmitan, but also by way of redemption from the
Provincial Government of Negros Occidental.
Acting on the petitioners' affirmative defense of prescription with respect to
Lot No. 757, the trial court issued an order dated April 22, 1976 dismissing
the complaint as to the said property upon finding merit in petitioners'
affirmative defense. This order, which is not the object of the present petition,
has become final after respondents' failure to appeal therefrom.
Trial proceeded with respect to Lot No. 1091. In a decision dated May 20,
1977, the trial court decided in favor of respondents as to Lot No. 1091.
According to the trial court, the respondents, as descendants of Agatona
Sagario Paulmitan were entitled to one-half (1/2) of Lot No. 1091, pro
indiviso. The sale by petitioner Donato Paulmitan to his daughter, petitioner
Juliana P. Fanesa, did not prejudice their rights. And the repurchase by
Juliana P. Fanesa of the land from the Provincial Government of Negros
Occidental did not vest in Juliana exclusive ownership over the entire land
but only gave her the right to be reimbursed for the amount paid to redeem
the property. The trial court ordered the partition of the land and directed
petitioners Donato Paulmitan and Juliana P. Fanesa to pay private
respondents certain amounts representing the latter's share in the fruits of
the land. On the other hand, respondents were directed to pay P1,479.55 to
Juliana P. Fanesa as their share in the redemption price paid by Fanesa to
the Provincial Government of Negros Occidental. The dispositive portion of
the trial court's decision reads:
WHEREFORE, judgment is hereby rendered on the second
cause of action pleaded in the complain as follows:
1. The deed of sale (Exh. "F") dated May 28, 1974 is valid
insofar as the one-half undivided portion of Lot 1091 is
concerned as to vest ownership over said half portion in
favor of defendant Juliana Fanesa and her husband Rodolfo
Fanesa, while the remaining half shall belong to
plaintiffs, pro-indiviso;
2. Lot 1091, Cadastral Survey of Pontevedra, Province of
Negros Occidental, now covered by TCT No. RO-11653
(N.A.), is ordered partitioned. The parties must proceed to an
actual partition by property instrument of partition, submitting
the corresponding subdivision within sixty (60) days from
finality of this decision, and should they fail to agree,
commissioners of partition may be appointed by the Court;
3. Pending the physical partition, the Register of Deeds of
Negros Occidental is ordered to cancel Original Certificate of
Title No. RO-11653 (N.A.) covering Lot 1091, Pontevedra
Cadastre, and to issue in lieu thereof a new certificate of title
in the name of plaintiffs and defendants, one-half portion
each, pro-indiviso, as indicated in paragraph 1 above;
4. Plaintiffs are ordered to pay, jointly and severally,
defendant Juliana Fanesa the amount of P1,479.55 with
interest at the legal rate from May 28, 1974 until paid;
5 Defendants Donato Sagario Paulmitan and Juliana
Paulmitan Fanesa are ordered to account to plaintiffs and to
pay them, jointly and severally, the value of the produce from
Lot 1091 representing plaintiffs' share in the amount of
P5,000.00 per year from 1966 up to the time of actual
partition of the property, and to pay them the sum of
P2,000.00 as attorney's fees as well as the costs of the suit.
xxx xxx xxx
On appeal, the Court of Appeals affirmed the trial court's decision. Hence this
petition.
To determine the rights and obligations of the parties to the land in question,
it is well to review, initially, the relatives who survived the decedent Agatona
Sagario Paulmitan. When Agatona died in 1953, she was survived by two (2)
sons, Donato and Pascual. A few months later in the same year, Pascual
died, leaving seven children, the private respondents. On the other had,
Donato's sole offspring was petitioner Juliana P. Fanesa.
At the time of the relevant transactions over the properties of decedent
Agatona Sagario Paulmitan, her son Pascual had died, survived by
respondents, his children. It is, thus, tempting to apply the principles
pertaining to the right of representation as regards respondents. It must,
however, be borne in mind that Pascual did no predecease his
mother, 8 thus precluding the operation of the provisions in the Civil Code on
the right of representation 9 with respect to his children, the respondents.
When Agatona Sagario Paulmitan died intestate in 1952, her two (2) sons
Donato and Pascual were still alive. Since it is well-settled by virtue of Article
777 of the Civil Code that "[t]he rights to the succession are transmitted from
the moment of the death of the decedent," 10 the right of ownership, not only
of Donato but also of Pascual, over their respective shares in the inheritance
was automatically and by operation of law vested in them in 1953 when their
mother died intestate. At that stage, the children of Donato and Pascual did
not yet have any right over the inheritance since "[i]n every inheritance, the
relative nearest in degree excludes the more distant
ones." 11 Donato and Pascual excluded their children as to the right to inherit
from Agatona Sagario Paulmitan, their mother.
From the time of the death of Agatona Sagario Paulmitan to the subsequent
passing away of her son Pascual in 1953, the estate remained unpartitioned.
Article 1078 of the Civil Code provides: "Where there are two or more heirs,
the whole estate of the decedent is, before its partition, owned in common by
such heirs, subject to the payment of debts of the deceased." 12 Donato and
Pascual Paulmitan were, therefore, co-owners of the estate left by their
mother as no partition was ever made.
When Pascual Paulmitan died intestate in 1953, his children, the
respondents, succeeded him in the co-ownership of the disputed property.
Pascual Paulmitan's right of ownership over an undivided portion of the
property passed on to his children, who, from the time of Pascual's death,
became co-owners with their uncle Donato over the disputed decedent
estate.
Petitioner Juliana P. Fanesa claims ownership over Lot No. 1091 by virtue of
two transactions, namely: (a) the sale made in her favor by her father Donato
Paulmitan; and (b) her redemption of the land from the Provincial of Negros
Occidental after it was forfeited for non-payment of taxes.
When Donato Paulmitan sold on May 28, 1974 Lot No. 1091 to his daughter
Juliana P. Fanesa, he was only a co-owner with respondents and as such,
he could only sell that portion which may be allotted to him upon termination
of the co-ownership. 13 The sale did not prejudice the rights of respondents to
one half (1/2) undivided share of the land which they inherited from their
father. It did not vest ownership in the entire land with the buyer but
transferred only the seller's pro-indiviso share in the property 14 and
consequently made the buyer a co-owner of the land until it is partitioned.
In Bailon-Casilao v. Court of Appeals, 15 the Court, through Justice Irene R.
Cortes, outlined the effects of a sale by one co-owner without the consent of
all the co-owners, thus:
The rights of a co-owner of a certain property are clearly
specified in Article 493 of the 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 its enjoyment, except when
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. [Emphasis
supplied.]
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 [Punsalan v. Boon Liat, 44 Phil. 320
(1923)]. 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 his grantor in the partition of the thing owned
in common [Ramirez v. Bautista, 14 Phil. 528 (1909)].
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 [Mainit v. Bandoy, 14 Phil. 730 (1910)].
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.
Applying this principle to the case at bar, the sale by petitioner Donato
Paulmitan of the land to his daughter, petitioner Juliana P. Fanesa, did not
give to the latter ownership over the entire land but merely transferred to her
the one half (1/2) undivided share of her father, thus making her the co-
owner of the land in question with the respondents, her first cousins.
Petitioner Juliana P. Fanesa also claims ownership of the entire property by
virtue of the fact that when the Provincial Government of Negros Occidental
bought the land after it was forfeited for non-payment of taxes, she redeemed
it.
The contention is without merit.
The redemption of the land made by Fanesa did not terminate the co-
ownership nor give her title to the entire land subject of the co-ownership.
Speaking on the same issue raised by petitioners, the Court, in Adille
v. Court of Appeals, 16 resolved the same with the following pronouncements:
The petition raises a purely legal issue: May a co-owner
acquire exclusive ownership over the property held in
common?
Essentially, it is the petitioners' contention that the property
subject of dispute devolved upon him upon the failure of his
co-heirs to join him in its redemption within the period
required by law. He relies on the provisions of Article 1515 of
the old Civil Code, Article 1613 of the present Code, giving
the vendee a retro the right to demand redemption of the
entire property.
There is no merit in this petition.
The right of repurchase may be exercised by co-owner with
respect to his share alone (CIVIL CODE, art. 1612, CIVIL
CODE (1889), art. (1514.). While the records show that
petitioner redeemed the property in its entirety, shouldering
the expenses therefor, that did not make him the owner of all
of it. In other words, it did not put to end the existing state of
co-ownership (Supra, Art. 489). There is no doubt that
redemption of property entails a necessary expense. Under
the Civil Code:
Art. 488. Each co-owner shall have a right to compel the
other co-owners to contribute to the expenses of
preservation of the thing or right owned in common and to
the taxes. Any one of the latter may exempt himself from this
obligation by renouncing so much of his undivided interest as
may be equivalent to his share of the expenses and taxes.
No such waiver shall be made if it is prejudicial to the co-
ownership.
The result is that the property remains to be in a condition of
co-ownership. While a vendee a retro, under Article 1613 of
the Code, "may not be compelled to consent to a partial
redemption," the redemption by one co-heir or co-owner of
the property in its totality does not vest in him ownership
over it. Failure on the part of all the co-owners to redeem it
entitles the vendee a retro to retain the property and
consolidate title thereto in his name (Supra, art. 1607). But
the provision does not give to the redeeming co-owner the
right to the entire property. It does not provide for a mode of
terminating a co-ownership.
Although petitioner Fanesa did not acquire ownership over the entire lot by
virtue of the redemption she made, nevertheless, she did acquire the right to
reimbursed for half of the redemption price she paid to the Provincial
Government of Negros Occidental on behalf of her co-owners. Until
reimbursed, Fanesa hold a lien upon the subject property for the amount due
her. 17
Finally, petitioners dispute the order of the trial court, which the Court of
Appeals affirmed, for them to pay private respondents P5,000.00 per year
from 1966 until the partition of the estate which represents the share of
private respondents in the fruits of the land. According to petitioners, the land
is being leased for P2,000.00 per year only. This assigned error, however
raises a factual question. The settled rule is that only questions of law may
be raised in a petition for review. As a general rule, findings of fact made by
the trial court and the Court of Appeals are final and conclusive and cannot
be reviewed on appeal. 18
WHEREFORE, the petition is DENIED and the decision of the Court of
Appeals AFFIRMED.
SO ORDERED.
Gutierrez, Jr., Bidin, Davide, Jr., Romero and Melo, JJ., concur.

19. G.R. No. 92436 July 26, 1991
MARIA VDA. DE REYES, EFREN REYES, ELVIRA REYES-TIMBOL,
ERLINDA REYES-VALERIO, ERNESTO REYES, ELIZABETH REYES,
ALEX, RAFAEL II, EMELINA and EVELYN, all surnamed REYES,
represented by their mother, MARIA VDA. DE REYES, petitioners,
vs.
THE COURT OF APPEALS AND SPOUSES DALMACIO GARDIOLA and
ROSARIO MARTILLANO respondents.
De Lara, De Lunas & Rosales for petitioners.
Santos, Pilapil & Associates for private respondents.
DAVIDE, JR., J.:
Assailed before Us in this appeal by certiorari under Rule 45 of the Rules of
Court is the decision of the respondent Court of Appeals in C.A.-G.R. CV No.
11934, promulgated on 20 October 1989,1 reversing the decision of 1
October 1986 of Branch 21 (Imus, Cavite) of the Regional Trial Court of the
Fourth Judicial Region in Civil Case No. RTC-BCV-83-17 entitled Maria vda.
de Reyes, et al. vs. Spouses Dalmacio Gardiola and Rosario Martillano, and
Spouses Ricardo M. Gardiola and Emelita Gardiola,2 and the resolution of 1
March 1990 denying the petitioner's motion for reconsideration.
As culled from both decisions and the pleadings of the parties, the following
facts have been preponderantly established:
During his lifetime, one Gavino Reyes owned a parcel of land of
approximately 70 hectares, more or less, located at Sangayad, Ulong-Tubig,
Carmona, Cavite. He sought to bring said land under the operation of the
Torrens System of registration of property. Unfortunately, he died in 1921
without the title having been issued to him. The application was prosecuted
by his son, Marcelo Reyes, who was the administrator of his property.
In 1936 the above property was surveyed and subdivided by Gavino's heirs
(Exh. "6"). In the subdivision plan, each resultant lot was earmarked,
indicated for and assigned to a specific heir. It appears therein that two lots,
one of which is Lot No. I A-14 (Exh. "6-A"), were allotted to Rafael Reyes, Sr.,
one of Gavino's children. Per testimony of Juan Poblete, the children
thereafter secured tax declarations for their respective shares.
In 1941, or about twenty (20) years after the death of Gavino, the original
certificate of title for the whole property — OCT No. 255 — was issued. It
was, however, kept by Juan Poblete, son-in-law of Marcelo Reyes, who was
by then already deceased. The heirs of Gavino were not aware of this fact.
On 3 December 1943, Rafael Reyes, Sr. sold a parcel of land with an area of
23,431 square meters, more or less, to private respondent Dalmacio
Gardiola (Exh. "5"). According to the vendee, this parcel corresponds to Lot
No. 1-A-14 of the subdivision plan aforestated. The deed of sale, however,
did not specifically mention Lot No. 1-A-14. The vendee immediately took
possession of the property and started paying the land taxes therein.
In 1945 or thereabouts, Juan Poblete "revalidated" the original Certificate of
Title. As reconstituted, the new title is OCT (0-4358) RO-255 (Exhs. "4" to "4-
A").
On 21 October 1967, when the heirs of Gavino Reyes executed a Deed of
Extrajudicial Settlement of Estate (Exh. "D") based on the aforestated
subdivision plan (Exh. "6"), the lot that was intended for Rafael Reyes, Sr.,
who was already deceased, was instead adjudicated to his only son and heir,
Rafael Reyes, Jr. (the predecessor-in-interest of the petitioners herein).
Private respondent Rosario Martillano signed the deed in representation of
her mother, Marta Reyes, one of the children of Gavino Reyes.
As a result of the Extrajudicial Settlement, OCT RO-255 was cancelled and
in lieu thereof, several transfer certificates of title covering the subdivided lots
were issued in the names of the respective adjudicatees. One of them is TCT
No. 27257 in the name of Rafael Reyes, Jr. covering Lot No. 1-A-14. The
Transfer Certificates of Title were, however, kept by one Candido Hebron.
On 10 January 1969, some of the heirs of Gavino Reyes filed a case of
Annulment of Partition and Recovery of Possession before the Court of First
Instance of Cavite City, which was docketed therein as Civil Case No. 1267.
One of the defendants in said case is herein private respondent Rosario
Martillano. The case was dismissed on 18 September 1969, but Candido
Hebron was ordered by the trial court to deliver to the heirs concerned all the
transfer certificates of title in his possession.3
After obtaining the Transfer Certificate of Title for Lot No. 1-A-14 from
Hebron, pursuant to the aforesaid order in Civil Case No. 1267, petitioners
herein, as successors-in-interest of Rafael Reyes, Jr., filed on 14 March 1983
with the Regional Trial Court the above-mentioned Civil Case No. RTC-BCV-
83-17 against private respondents (defendants therein) for recovery of
possession or, in the alternative, for indemnification, accounting and
damages. They allege therein that after "having definitely discovered that
they are the lawful owners of the property," (Lot No. 1-A-14), they, "including
Rafael Reyes, Jr., during his lifetime, made repeated demands to (sic)
defendants to surrender the possession of and vacate the parcel of land
belonging to the former, but defendants refused to vacate and surrender the
possession of the said land to herein plaintiffs;" the last of the demands was
allegedly made on 8 October 1982. They further allege that they have been
deprived by said defendants of the rightful possession and enjoyment of the
property since September 1969 — which coincides with the date of the order
in Civil Case No. 1267.4
In their answer, private respondents deny the material averments in the
complaint and assert that they are the owners of the lot in question, having
bought the same from Rafael Reyes, Sr., that the issuance of TCT No. 27257
is null and void, for such sale was known to Rafael Reyes, Jr.; that they have
been in possession of the property and have been paying the land taxes
thereon; and that petitioners are barred by prescription and/or laches.5
Petitioners amended their complaint on 21 March 1985 to implead as
additional defendants the spouses Ricardo M. Gardiola and Emerita Gardiola,
on the basis of the following claims:
xxx xxx xxx
9. Meanwhile, during the presentation of the defendants spouses
Dalmacio Gardiola and Rosario Martillano's evidence the former
testified that they mortgaged the subject land to the Rural Bank of
Carmona Inc. For their failure to redeem the mortgage the same was
foreclosed by the bank.
10. However, within the period of one(1) year from such foreclosure
the questioned land was redeemed by the original defendants' son in
the person of Ricardo M. Gardiola, who was knowledgeable/aware of
the pendency of the above captioned case. The corresponding
redemption was effected through a deed of conveyance, . . . .6
The prayer of the amended complaint now contains the alternative relief for
indemnification for the reasonable value of the property "in the event
restitution of the property is no longer possible."7
In its decision of 1 October 1986,8 the trial court concluded that petitioners'
"title over the subject property is valid and regular and thus they are entitled
to its possession and enjoyment," and accordingly decided thus:
WHEREFORE, the defendants or anyone acting for and in their
behalf are hereby ordered to relinguish possession or vacate the
property in question which is covered by Transfer Certificate of Title
No. T-27257 in favor of the plaintiffs.
All other claims and/or counterclaims of the parties relative to this
case are dismissed for lack of proper substantiation.
The conclusion of the trial court is based on its finding that (a) there is no
evidence that the heirs of Gavino Reyes entered into any written agreement
of partition in 1936 based on the subdivision plan; (b) there is no identity
between Lot No. 1-14-A and the land sold to private respondents by Rafael
Reyes, Sr., or otherwise stated, the description of the latter as indicated in
the deed of sale (Exh. "5") does not tally with the description of the former;
and (c) moreover:
Granting, arguendo, that the sale made by Rafael Reyes, Sr. to the
defendants covered the land in question — Lot No. 1-A-14 — and
that Transfer Certificate of Title No. T-27257 was obtained by means
of fraud, the claim of the defendants over the said property is already
barred. Action for reconveyance prescribes in four (4) years from the
discovery thereof. If there was fraud, the defendant could have
discovered the same in 1967 when the partition was made in as
much as defendant Rosario Martillano was a party to that partition.
Let us grant further that the issuance of Transfer Certificate of Title
No. T-27257 to Rafael Reyes, Jr. created a constructive or implied
trust in favor of the defendants, again, the claim of the defendants is
also barred. From 1967 to the filing of their answer (let us consider
this as an action for reconveyance) to this case sometime in July,
1983, a period of about sixteen (16) years had already elapsed.
Prescriptibility of an action for reconveyance based on implied or
constructive trust is ten (10) years.
The trial court further held that the continued possession by private
respondents, which it found to have started in 1943, did not ripen into
ownership because at that time, the property was already registered, hence it
cannot be acquired by prescription or adverse possession.9
Private respondents appealed the said decision to the Court of Appeals
which docketed the appeal as C.A.-G.R. CV No. 11934. In its decision of 20
October 1989, the respondent Court of Appeals formulated the issues before
it as follows:
I
Whether or not the lower court erred in declaring that the property of
the late Gavino Reyes consisting of 70 hectares was partitioned only
 in 1967 by his grandchildren after discovery of the existence of OCT
No. 255 and that no actual partition was made in 1936 by the
decedent's children.
II
Whether or not the lower court erred in concluding that the parcel of
land sold by the appellees' predecessor-in-interest, the late Rafael
Reyes, Sr. to appellant Dalmacio Gardiola was not the same parcel
of land under litigation.10
and resolved such issues, thus:
On the first issue, We believe that the lower court committed a
reversible error when it declared that the landed estate of the late
Gavino Reyes was partitioned only in 1967 by the latter's
grandchildren; and that no actual partition was made in 1936 by the
decedents' (sic) children. The evidence on record bears out the
existence of a subdivision plan (Exh. 6) which was not controverted
nor denied by the appellees. In like manner, the lower court itself
recognized the fact that the property of the late Gavino Reyes
consisting of 70 hectares was surveyed and subdivided in 1936 as
evidenced by the said subdivision plan (Exh. 6). With the existence
of a subdivision plan, and from the uncontroverted testimony of
appellants' witness, We can only infer that at least an oral partition,
which under the law is valid and binding, was entered into by the
heirs of Gavino Reyes regarding his properties in 1936. As held in a
long line of decisions, extrajudicial partition can be done orally, and
the same would be valid if freely entered into (Belen v. Belen, 49 O.G.
997, March 1953). The reason for this is because a partition is not
exactly a conveyance for the reason that it does not involve transfer
of property from one to the other but rather a confirmation by them of
their ownership of the property. It must also be remembered that
when Gavino Reyes died on March 7, 1921, his property was
admittedly not yet covered by a torrens title, as it was only in 1941
when said properties were brought into the application of the torrens
system. With this factual milieu, it can also be concluded that his
heirs have indeed settled, subdivided and partitioned Gavino Reyes'
landed estate without formal requirements of Rule 74 of the Rules of
Court when a parcel of land is covered by a torrens title. As told
earlier, the Subdivision Plan (Exh. 6) undisputedly showed on its face
that the 70 hectares of land belonging to the late Gavino Reyes was
subdivided and partitioned by his children in 1936. On this score, the
partition of the said property even without the formal requirements
under the rule is valid as held in the case of Hernandez vs. Andal, 78
Phil. 176, which states:
xxx xxx xxx
Moreover, in the Deed of Sale dated December 3, 1943 (Exh. 5)
executed by Rafael Reyes, Sr. in favor of appellant Dalmacio
Gardiola, the land sold therein was described as "na aking minana
sa aking ama." This alone would confirm the contention of the
appellants that there was already an actual partition (at least an oral
partition) of the property of Gavino Reyes in 1936. As aforestated,
the presence of the Subdivision Plan (Exh. 6) is an (sic) evidence of
such partition which appellees failed to controvert not to mention the
fact that the lower court itself recognized the existence of said plan,
in the same manner that it concluded that the property was already
surveyed and actually subdivided in 1936 (page 3, pars. 3 and 4,
Decision).
From the foregoing considerations it is evident that the Deed of
Extrajudicial Settlement of Estate (Exh. D) executed by the
grandchildren of the late Gavino Reyes in 1967 is of no moment
considering that the property subject of the partition in the deed was
already partitioned in 1936 by the children of Gavino Reyes. It is for
this reason that the lots supposedly inherited by the grandchildren
named in the deed of 1967 were the same lots inherited and given to
their respective fathers or mothers in 1936 while the land was not yet
covered by the torrens system. Hence, in the case of Rafael Reyes,
Sr., the land inherited by him was two (2) parcels of land known as
Lots Nos. 1-A-3 and 1-A-14 described in the Subdivision plan of
1936 (Exh. 6), which were the same parcels of land allegedly
inherited by Rafael Reyes, Jr. from Gavino Reyes in representation
of his father, pursuant to the Deed of Extrajudicial Settlement of
Estate for which TCT No. 27257 was issued.
Coming to the second issue, the lower court likewise erred when it
concluded that the parcel of land sold by appellee's predecessor-in-
interest to appellant Dalmacio Gardiola was not the same parcel of
land under litigation. It must be pointed out that the identity of the
parcel of land which the appellees sought to recover from the
appellants was never an issue in the lower court, because the
litigants had already conceded that the parcel identified as Lot No. 1-
A-14 in TCT No. 27257 was the same parcel of land identified as
Cadastral Lot No. 1228 and 1235 described in Tax Declaration No.
4766. Despite this admission, however, the lower court declared that
"as described in the deed of sale (Exh. 5), the land's description does
not tally with the description of Lot No. 1-A-14, the land in litigation."
As correctly pointed out by the appellants however, the discrepancy
in the description was due to the fact that the description of the land
sold in the Deed of Sale was expressed in layman's language
 whereas the description of Lot No. 1-A-14 in TCT No. 27257 was
done in technical terms. This was so because, when Rafael Reyes,
Sr. sold the property in dispute to appellant Dalmacio Gardiola on
December 3, 1943, the only evidence of title to the land then
available in so far as Rafael Reyes, Sr. was concerned was Tax
Declaration No. 4766, because at that time, neither he nor appellant
Dalmacio Gardiola was aware of the existence of OCT No. 255 as in
fact TCT No. 27257 was issued only in 1967. Consequently, the land
subject of the Deed of Sale was described by the vendor in the
manner as described in Tax Declaration No. 4766. However, the
description of the land appearing in the Deed of Sale (Exh. 5) was
exactly the same land identified as Lot No. 1-A-14 in the Subdivision
Plan (Exh. 6) of 1936. Accordingly, the assumption of the lower court
that "if the land sold by Rafael Reyes, Sr. was the one now in
litigation, he could have easily indicated Lot No. 1-A-14" is bereft of
merit under the foregoing circumstances. Interestingly enough, the
appellees never denied the identity of the subject lot during the
hearing at the lower court. What they were denying only was the sale
made by Rafael Reyes, Sr. to appellant Dalmacio Gardiola which
does not hold true because of the document denominated as Deed
of Sale (Exh. 5).11
It concluded that the trial court erred when it ordered the private respondents
or anyone acting in their behalf to relinquish the possession or vacate the
property in question. It thus decreed:
WHEREFORE, the appealed Judgment is ordered REVERSED and
SET ASIDE and a new one is rendered declaring appellants to be
the lawful owners of the lot identified as Lot No. 1-A-14 in TCT No.
27257. No
costs.12
Their motion to reconsider the above decision having been denied by the
Court of Appeals in its resolution of 1 March 1990,13 petitioners filed the
instant petition on 6 April 1990 after having obtained an extension of time
within which to file it.
The petition does not implead original new defendants Ricardo Gardiola and
Emelita Gardiola.
As ground for their plea for the review of the decision of the Court of Appeals,
petitioners allege that said court has decided questions of substance in a
way not in accord with law or applicable jurisprudence when it held that "the
deed of extrajudicial settlement of estate (Exh. "D") executed by the
grandchildren of the late Gavino Reyes in 1967 is of no moment considering
that the property subject of the partition was already partitioned in 1936 by
the children of Gavino Reyes." In support thereof, they claim that (a) TCT No.
27257 covers two parcels of land; the lot described in paragraph 1 thereof is
owned by petitioners and that ownership was confirmed by this Court in G.R.
No. 79882, hence, the Court of Appeals should have affirmed the decision of
the trial court; (b) private respondent Rosario Martillano was a party to the
extrajudicial settlement of estate which was duly registered in the Registry of
Deeds in 1967; said registration is the operative act that gives validity to the
transfer or creates a lien upon the land and also constituted constructive
notice to the whole world. The court cannot disregard the binding effect
thereof Finally, the pronouncement of the Court of Appeals that private
respondents are the lawful owners of the lot in question "militates against the
indefeasible and incontrovertible character of the torrens title,"14and allows
reconveyance which is not tenable since the action therefor had already
prescribed, as stated in the decision of the trial court.
In the resolution of 7 May 1990, We required respondents to comment on the
petition. But even before it could do so, petitioner, without obtaining prior
leave of the Court, filed on 29 May 1990 a so-called Supplemental
Arguments in Support of The Petition For Review On certiorari15 wherein they
assert, among others, that: (a) the findings of facts of respondent Court are
contrary to those of the trial court and appear to be contradicted by the
evidence on record thus calling for the review by this Court;16 (b) it also
committed misapprehension of the facts in this case and its findings are
based on speculation, conjecture and surmises; (c) private respondents'
attack on petitioners' title is a collateral attack which is not allowed; even if it
is allowed, the same had already prescribed and is now barred.
It was only on 15 June 1990 that private respondents filed their
Comment.17 We required petitioners to reply thereto, which they complied
with on 8 August 1990.18 A rejoinder was filed by private respondents on 29
August 1990.
We gave due course to the petition on 19 September 1990 and required the
parties to submit simultaneously their respective memoranda which they
complied with.
Attached as Annex "A" to private respondent's Memorandum, which was filed
on 10 December 1990, is the Resolution of this Court (Third Division) of 20
August 1990 in G.R. No. 92811 entitled Spouses Artemio Durumpili and
Angustia Reyes vs. The Court of Appeals and Spouses Dalmacio Gardiola
and Rosario Martillano, which also involves the property of Gavino Reyes,
the partition thereof among his children in 1936, and the extrajudicial
settlement in 1967.
In said resolution, this Court held:
. . . The partition made in 1936, although oral, was valid. The
requirement in Article 1358 of the Civil Code 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 is only for convenience and not for validity or
enforceability as between the parties themselves. [Thunga Hui vs.
Que Bentec, 2 Phil. 561 (1903)] The subsequent execution by the
heirs of the Extrajudicial Partition in 1967 did not alter the oral
partition as in fact the share pertaining to Angustia Reyes
corresponded to that previously assigned to her father. Considering
that Angel Reyes sold this property to Basilio de Ocampo who, in
turn, sold the same to respondents, we agree with the Court of
Appeals that the latter lawfully acquired the property and are entitled
to ownership and possession thereof.
In answer to the charge of private respondents that petitioners deliberately
failed to cite this resolution, the latter, in their reply-memorandum dated 15
March 1991 and filed three days thereafter, allege:
Our failure to mention the aforementioned resolution before this
Honorable Court is not deliberate nor with malice aforethought. The
reason is that to date, we have not yet received any resolution to our
Motion For Leave of Court To Refer Case To The Honorable
Supreme Court En Banc. Moreover, we honestly feel that the
resolution that will be issued therein will not be applicable to the case
before this Honorable Court's Second Division. It should be
mentioned that in the Durumpili case before the Third Division, the
Court of Appeals relied on the alleged confirmation of the sale
executed by Angustia Reyes, while in the Reyes case before this
Second Division, there was no sale that was executed by the
petitioners Reyes' predecessor-in-interest, Rafael Reyes, Jr.
The foregoing claim is not supported by the rollo of G.R. No. 92811, which
reveals the following: (a) On 18 September 1990, petitioners therein,
represented by De Lara, De Lunas and Rosales, who are the lawyers of
petitioners in the instant case, filed a motion for the reconsideration of the
resolution of 20 August 1990.19 b) This motion was denied in the resolution of
1 October 1990.20 c) On 17 November 1990, petitioners therein, through the
same lawyers, filed a Motion For Leave Of Court To Refer Case To The
Honorable Supreme Court En Banc And/Or Motion For
Reconsideration21 wherein they specifically admit that said case and the
instant petition have "identity and/or similarity of the parties, the facts, the
issues raised," even going to the extent of "graphically" illustrating where
such similarities lie.22 d) This motion was denied in the resolution of 28
November 1990. Copy thereof was furnished the attorneys for petitioners.23 e)
Entry of judgment had already been made therein and a copy thereof was
sent to petitioner's counsel per Letter of Transmittal of the Deputy Court and
Chief of the Judicial Records Office dated 20 December 1990.
What comes out prominently from the disquisitions of the parties is this
simple issue: whether or not respondent Court of Appeals committed any
reversible error in setting aside the decision of the trial court.
We find none. The reversal of the trial court's decision is inevitable and
unavoidable because the legal and factual conclusions made by the trial
court are unfounded and clearly erroneous. The Court of Appeals was not
bound to agree to such conclusions. The trial court erred in holding that: (a)
there was no partition among the children of Gavino Reyes in 1936 since
there is no written evidence in support thereof; yet, it admits that there was a
survey and subdivision of the property and the adjudication of specific
subdivision lots to each of the children of Gavino; (b) the land sold by Rafael
Reyes, Sr. to private respondents is not identical to Lot No. 1-A-14, the lot
specified for and adjudicated to Rafael Reyes, Jr. in the partition agreement;
and (c) if the land sold by Rafael Reyes, Sr. to private respondent Dalmacio
Gardiola is indeed Lot No. 1-A-14 and that TCT No. T-27257 was obtained
through fraud, the remedy open to the vendee was an action for
reconveyance, which should have been brought within four (4) years from the
discovery thereof in 1967 when the Extrajudicial Settlement was executed
since private respondent Rosario Martillano, wife of Dalmacio, was a party
thereto.
The Court of Appeals correctly held that the partition made by the children of
Gavino Reyes in 1936, although oral, was valid and binding. There is no law
that requires partition among heirs to be in writing to be valid.24 In Hernandez
vs. Andal, supra, this Court, interpreting Section 1 of Rule 74 of the Rules of
Court, held that the requirement that a partition be put in a public document
and registered has for its purpose the protection of creditors and at the same
time the protection of the heirs themselves against tardy claims. The object
of registration is to serve as constructive notice to others. It follows then that
the intrinsic validity of partition not executed with the prescribed formalities
does not come into play when there are no creditors or the rights of creditors
are not affected. Where no such rights are involved, it is competent for the
heirs of an estate to enter into an agreement for distribution in a manner and
upon a plan different from those provided by law. There is nothing in said
section from which it can be inferred that a writing or other formality is an
essential requisite to the validity of the partition. Accordingly, an oral partition
is valid.
Barcelona, et al. vs. Barcelona, et al., supra, provides the reason why oral
partition is valid and why it is not covered by the Statute of Frauds: partition
among heirs or renunciation of an inheritance by some of them is not exactly
a conveyance of real property for the reason that it does not involve transfer
of property from one to the other, but rather a confirmation or ratification of
title or right of property by the heir renouncing in favor of another heir
accepting and receiving the inheritance.
Additionally, the validity of such oral partition in 1936 has been expressly
sustained by this Court in the Resolution of 20 August 1990 in G.R. No.
92811.25
But even if We are to assume arguendo that the oral partition executed in
1936 was not valid for some reason or another, We would still arrive at the
same conclusion for upon the death of Gavino Reyes in 1921, his heirs
automatically became co-owners of his 70-hectare parcel of land. The rights
to the succession are transmitted from the moment of death of the
decedent.26 The estate of the decedent would then be held in co-ownership
by the heirs. The co-heir or co-owner may validly dispose of his share or
interest in the property subject to the condition that the portion disposed of is
eventually allotted to him in the division upon termination of the co-ownership.
Article 493 of the Civil Code provides:
Each co-owner shall have the full ownership of his part and the fruits
and benefits pertaining thereto, and he may 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 Ramirez vs. Bautista,27 this Court held that every co-heir has the absolute
ownership of his share in the community property and may alienate, assign,
or mortgage the same, except as to purely personal rights, but the effect of
any such transfer is limited to the portion which may be awarded to him upon
the partition of the property.
In the case at bar, the lot sold by Rafael Reyes, Sr. to private respondent
Dalmacio Gardiola is his share in the estate of his deceased father, Gavino
Reyes. It is the same property which was eventually adjudicated to his son
and heir, Rafael Reyes, Jr., represented in turn by his heirs-petitioners
herein-in the extrajudicial settlement of 1967.
In respect to the issue as to whether the property sold by Rafael Reyes, Sr.
is identical to Lot No. 1-14-A, the trial court based its conclusion that it is not,
on his observation that the description of the former does not tally with that of
the latter, moreover, if Rafael did intend to sell Lot No. 1-14-A, he should
have specifically stated it in the deed since at that time, the property had
already been partitioned and said lot was adjudicated to him. In addition to
the contrary findings and conclusion of the respondent Court on this issue to
which We fully agree, it is to be stressed that Rafael had this property
declared for taxation purposes and the tax declaration issued was made the
basis for the description of the property in the deed of sale. Upon the
execution of the deed of sale, vendee — herein private respondent Dalmacio
Gardiola — immediately took possession of the property. This is the very
same property which is the subject matter of this case and which petitioners
seek to recover from the private respondents. The main evidence adduced
for their claim of ownership and possession over it is TCT No. T-27257, the
certificate of title covering Lot No. 1-14-A. They therefore admit and concede
that the property claimed by private respondent, which was acquired by sale
from Rafael Reyes, Sr., is none other than Lot No. 1-14-A.
The participation of private respondent Rosario Gardiola in the Extrajudicial
Settlement did not place private respondents in estoppel to question the
issuance of TCT No. T-27257. As correctly maintained by private
respondents, she signed it in representation of her deceased mother, Marta
Reyes, a daughter and an heir of Gavino Reyes. She did not sign for and in
behalf of her husband, Dalmacio Gardiola, vendee of the share of Rafael
Reyes, Sr.
The same did not operate to divest the vendee of the share of Rafael Reyes,
Sr. in the estate of Gavino.1âwphi1 Petitioners, as mere successors-in-
interest of Rafael Reyes, Jr., son of Rafael Reyes, Sr., can only acquire that
which Rafael, Jr. could transmit to them upon his death. The latter never
became the owner of Lot No. 1-A-14 because it was sold by his father in
1943. The issuance of TCT No. T-27257 in the name of Rafael Reyes, Jr., in
so far as Lot No. 1-14-A is concerned, was clearly erroneous because he
never became its owner. An extrajudicial settlement does not create a light in
favor of an heir. As this Court stated in the Barcelona case,28 it is but a
confirmation or ratification of title or right to property. Thus, since he never
had any title or right to Lot No. 1-14-A, the mere execution of the settlement
did not improve his condition, and the subsequent registration of the deed did
not create any right or vest any title over the property in favor of the
petitioners as heirs of Rafael Reyes, Jr. The latter cannot give them what he
never had before. Nemo dare potest quod non habet.
There is one more point that should be stressed here. Petitioners' immediate
predecessor-in-interest, Rafael Reyes, Jr., never took any action against
private respondents from the time his father sold the lot to the latter. Neither
did petitioners bring any action to recover from private respondents the
ownership and possession of the lot from the time Rafael Reyes, Jr. died. As
categorically admitted by petitioners in their complaint and amended
complaint, it was only in or about September 1969 when, after the delivery of
TCT No. 27257 by Candido Hebron to them, that they definitely discovered
that they were the owners of the property in question. And yet, despite full
knowledge that private respondents were in actual physical possession of the
property, it was only about thirteen and one-half (13 1/2) years later that they
decided to file an action for recovery of possession. As stated earlier, the
original complaint was filed in the trial court on 14 March 1983. There was
then absolutely no basis for the trial court to place the burden on private
respondents to bring an action for reconveyance within four (4) years from
their discovery of the issuance of the transfer certificate of title in the name of
Rafael Reyes, Jr.
The instant petition then is without merit.
WHEREFORE, judgment is hereby rendered DENYING the petition with
costs against petitioners.
SO ORDERED.
Fernan, C.J., Gutierrez, Jr., Feliciano and Bidin, JJ., concur.
20. [G.R. No. 124899. March 30, 2004]
RENATO C. SALVADOR, petitioner, vs. COURT OF APPEALS, MARIA
ROMAYNE MIRANDA and GILBERT MIRANDA, respondents.
DECISION
CARPIO, J.:
The Case
Before the Court is a petition for review[1]
assailing the Decision[2]
of 30
April 1996 of the Court of Appeals in CA-G.R. CV No. 39661. The Court of
Appeals set aside the Decision[3] of 18 August 1992 of the Regional Trial
Court of San Mateo, Rizal, Branch 76, in Civil Case No. 754. The trial court
dismissed petitioners complaint and respondents counterclaims for
insufficiency of basis. The appellate court found for respondents, and
directed petitioner to pay damages.
Antecedent Facts
Maria Romayne Miranda (Romayne) is the owner of a parcel of land
(Property) with an area of 17,748 square meters in Cabcaben, Mariveles,
Bataan. The Property is registered with the Register of Deeds of Bataan
under TCT No. T-129442.
Romayne appointed her cousin, Gilbert Miranda (Gilbert), as her
attorney-in-fact under a General Power of Attorney[4] dated 15 April 1990.
Romayne authorized Gilbert to execute contracts on her behalf and to
manage her properties, including the Property subject of the present case,
and to perform other acts in her place.
On 9 July 1990, Gilbert, as Romaynes agent, entered into a
Development and Construction Contract[5] (Contract) with Renato C.
Salvador (Salvador), a duly licensed contractor and proprietor of Montariza
Construction. The Contract was for the development of the Property into the
Haven of Peace Memorial Park (Project) and the construction of several
structures for that purpose. Salvador agreed to undertake the Project for the
consideration of P3,986,643.50 (Contract Price).
Salvador undertook to complete the Project within 180 working days
from receipt of the down payment, with a grace period of 45 working days.
The Contract also contained the following provisions:
17. In case of changes, alterations or deviations in the plans, specifications
and bill of materials hereinabove mentioned as may be necessary in the
course of the implementation of the development and construction, the same
shall be mutually agreed upon by the herein parties in writing;
18. In case of substantial increase/s of prices of the materials, like cement,
G.I. corrugated sheets, the said contract price shall be adjusted accordingly
as to the particular item/s of (sic) material/s involved in the increase/s of
prices;
xxx
20. All other matters relating to the project not stipulated in this contract are
deemed not included herein unless the parties may agree on said matters in
writing;
xxx.[6]
Work on the Project began sometime in July 1990 upon Gilberts
payment of P797,328.70 as twenty per cent (20%) down payment. Salvador
periodically submitted progress billings, which Gilbert promptly paid. The
billings included work on the structures stipulated in the Contract, as well as
additional works and change orders.
In December 1990, however, Salvador demanded that Gilbert pay the
following amounts in addition to the Contract Price: (1) P39,000 or a 20% fee
on P196,000 worth of filling materials respondents themselves supplied for
the Project; (2) a 20% escalation or adjustment of the unpaid balance of the
Contract Price in the amount of P637,862.96; and (3) billing for alleged
additional works in the amount of P399,190.46.
 Salvador was particularly insistent on the escalation of the Contract
Price. In his first letter dated 18 December 1990, Salvador informed Gilbert
that the prices of construction materials had increased by about forty (40%)
percent.[7] Two days later, Salvador wrote again to advise Gilbert that
although the Project was almost 90% completed, the latters failure to grant
the escalation would leave Salvador with no choice but to stop operation and
wait for you (Gilbert) to initiate a renegotiation.[8]
Gilbert responded by requesting for a detailed computation of the
proposed escalation. On 25 December 1990, Salvador submitted a
breakdown of the services and construction work done on the Project. The
breakdown included the total cost of each service and the portion of the
Contract Price still due for each service. To arrive at the proposed escalation
of P637,862.96, the computation merely imposed a uniform increase of 20%
on the outstanding balance still payable on each service.[9]
Dissatisfied with the computation, Gilbert required Salvador to submit
receipts showing the purchase of construction materials used in the Project,
the dates of purchase of these materials, and the increase in their prices.
Gilbert pointed out that he had already paid a total of P3,775,804.80 for work
on the Project and that the remaining balance due under the Contract
was P210,838.71. Salvador agreed to submit the required documents while
Gilbert agreed to release an additional P120,065.80. Thus, only P90,772.91
of the Contract Price remained unpaid.
Gilbert also paid Salvador an additional P100,000[10] and P150,000[11] as
advances on the escalation of the Contract Price. However, citing paragraph
17 of the Contract, Gilbert contended that further demands for additional
costs and escalation were baseless and unreasonable.
On 11 January 1991, Salvador reiterated his last and final demand that
Gilbert pay within 5 days a total of P1,076,253.32 representing the 20%
charge on filling materials, the 20% escalation of the Contract Price and the
latest billing for additional works. Otherwise, Salvador would stop work on the
Project because he had no more funds and resources to continue the
operation.[12] Salvador ceased construction work on the Project on 14
January 1991.
In a letter dated 16 January 1991, Salvador informed Gilbert that his
office had received a notice of illegal construction (DPWH Notice) from the
Balanga, Bataan district office of the Department of Public Works and
Highways. The DPWH Notice,[13] copy of which Salvador attached to his
letter, was dated 8 January 1991 and received by one of Salvadors
engineers on 15 January 1991.[14] The DPWH Notice stated that the Project
had no building permit and ordered Salvador to stop immediately all building
activities and to contact the district office within 3 days. Salvador reminded
Gilbert that it was the latters responsibility under the Contract to secure the
necessary permits and licenses for the Project.
A few days later, Gilbert received a demand letter from Salvadors
counsel requiring the payment of P1,076,253.32 and 10% attorneys fees
within 3 days. On 31 January 1991, Salvador filed before the trial court a
complaint for collection of sum of money and damages or for declaration of
claim as lien against Romayne and Gilbert (respondents).
In March 1991, Gilbert replaced Salvador with a new contractor and
ejected Salvadors crew from the Project site.
The Ruling of the Trial Court
After trial on the merits, the trial court dismissed Salvadors complaint
and respondents counterclaims for insufficiency of basis.
The trial court observed that the escalation clause in the Contract
required Salvador to specify the materials the prices of which had increased.
Since the documents submitted by Salvador did not specify these materials,
the trial court held that there was no basis for an adjustment or escalation of
the Contract Price.
The trial court likewise ruled that Salvador failed to prove that the parties
had agreed on the P399,190.46 worth of additional work performed on the
Project. There was neither a written agreement nor notice to respondents
that Salvador would undertake such additional work.
The trial court denied Salvadors claim for P39,000 or 20% of the cost of
filling materials for lack of basis. The evidence showed that respondents
themselves purchased the filling materials for P196,000 and had them
delivered to the Project site. Salvador merely caused the spreading of the
filling materials. The trial court ruled that no provision in the Contract or
subsequent written agreement justified the 20% charge on materials not
procured or delivered by Salvador.
The salient portion of the trial courts decision reads as follows:
The totality of the evidence adduced in this case would show the need for the
herein parties to make a true and honest accounting of all the expenses
incurred in the implementation of the subject construction contract, in the
presence of an independent third party. As it now stands, plaintiffs cause of
action herein is insufficiently supported, wanting in fact [and] in credible and
competent basis, as afore-discussed.
WHEREFORE, premises considered, judgment is hereby rendered
dismissing the instant case for insufficiency of basis. No pronouncement as
to costs.
Defendants counterclaims are likewise dismissed for insufficiency of basis.
SO ORDERED.[15]
Salvador appealed the trial courts decision to the Court of Appeals.
The Ruling of the Court of Appeals
The Court of Appeals upheld the denial of Salvadors claims. However,
the appellate court ruled that the receipts submitted by respondents during
the trial adequately established the damage respondents sustained when
Salvador ceased work on the Project. The Court of Appeals also found
Salvador in bad faith for stopping the construction of the Project without valid
reasons.
The Court of Appeals granted respondents counterclaims and awarded
damages:
WHEREFORE, premises considered, the judgment of the lower court is
hereby REVERSED and SET ASIDE and a new one is entered:
a) Dismissing the Complaint;
b) Ordering plaintiff to reimburse defendant the amount
of P1,685,532.48 representing the amount spent by the
defendant in completing the project herself less
the P90,772.91 that defendant admitted to be the balance of
her obligation to plaintiff as of December 28, 1990;
c) Ordering plaintiff to pay defendant P100,000.00 moral damages
and P50,000.00 exemplary damages;
d) Ordering plaintiff to pay defendant P20,000.00 as attorneys fees.
Cost against plaintiff-appellant.[16]
Hence, the instant petition.
The Issues
The petition contends that:
1. THE COURT OF APPEALS SERIOUSLY ERRED IN
ORDERING PETITIONER TO REIMBURSE THE PRIVATE
RESPONDENTS OF P1,685,532.48[17] ALLEGEDLY SPENT IN
COMPLETING THE PROJECT;
2. THE COURT OF APPEALS ERRED IN HOLDING THAT
PETITIONERS CLAIM FOR ADJUSTMENT OR ESCALATION
OF THE CONTRACT PRICE HAD NO REASONABLE BASIS,
IN THE LIGHT OF THE ADMISSION OF THE OBLIGATION BY
PRIVATE RESPONDENTS AND CLEAR EVIDENCE;
3. THE COURT OF APPEALS ERRED IN HOLDING THAT THE
ADDITIONAL WORKS OF PETITIONER WERE NOT
AUTHORIZED, IN THE LIGHT OF THE ADMISSION OF THE
OBLIGATION BY PRIVATE RESPONDENTS AND THE CLEAR
EVIDENCE.
4. THE COURT OF APPEALS ERRED IN HOLDING THAT THE
ACT OF PETITIONER IN STOPPING WORK IN THE
PROJECT WAS DUE TO NON-PAYMENT OF THE
ESCALATED PRICE AND ADDITIONAL WORKS, CONTRARY
TO THE CLEAR EVIDENCE.[18]
The central issues left for the resolution of this Court are: (1) whether
Salvadors claims for additional work, including the 20% charge on filling
materials, and escalation of the Contract Price are valid; and (2) whether
respondents are entitled to their counterclaim and damages.
The Ruling of the Court
The petition is partly meritorious.
The Claims for Additional Works Done on the Project
and for Escalation of the Contract Price
It is evident from the issues raised that the petition seeks a review of
some of the factual findings of the Court of Appeals.
Petitions for review on certiorari under Rule 45 are generally limited to
questions of law. Moreover, factual findings of the Court of Appeals,
particularly when they affirm those of the trial court, are binding on this
Court.[19]
Upon examining the evidence, the trial and appellate courts found that:
(1) respondents did not authorize additional works on the Project nor agree
to a price for such works; and (2) Salvador did not specify the particular items
or materials which had increased in price. The Court will not disturb these
factual findings absent compelling or exceptional reasons.[20]
 Given these facts, we rule that the law and the Contract do not allow
petitioners claims for additional works and escalation of the Contract Price.
There are two requisites in order that a contractor may claim additional
costs:
Art. 1724. The contractor who undertakes to build a structure or any other
work for a stipulated price, in conformity with plans and specifications agreed
upon with the landowner, can neither withdraw from the contract nor demand
an increase in the price on account of the higher cost of labor or materials,
save when there has been a change in the plans and specifications, provided:
(1) Such change has been authorized by the proprietor in writing; and
(2) The additional price to be paid to the contractor has been
determined in writing by both parties.[21]
Compliance with both of these requirements is a condition precedent to
the recovery of additional costs.[22] Even the absence of one of the elements
required by Article 1724 bars recovery.[23]
In the present case, Salvador failed to present any written authority from
respondents for any change in the plans or specifications agreed upon in the
Contract. Salvador also failed to present any agreement on the price for such
additional work. Salvador did not notify respondents in advance of the
additional work he performed on the Project. The Contract did not authorize
Salvador to determine unilaterally the changes to be made in the Project, or
what price to charge for such changes. Not having fulfilled any of the
requirements in Article 1724, Salvadors claim of P399,190.46 for alleged
additional works has no legal basis.
On the other hand, Salvadors demand for an escalation of the Contract
Price hinges on paragraph 18[24] of the Contract.
Construction contracts may provide for the escalation or increase of the
price originally agreed upon by the parties in certain instances. As the Court
explained in Baylen Corporation v. Court of Appeals:[25]
Escalation clauses in construction contracts commonly provide for increases
in the contract price under certain specified circumstances, e.g., as the
cost of selected commodities (cement, fuel, steel bars) or the cost of living
in the general community (as measured by, for instance, the Consumer Price
Index officially published regularly by the Central Bank) move up beyond
specified levels. (Emphasis supplied)
The parties may validly agree on an escalation clause.[26] However, the
enforceability of an escalation clause is subject to the conditions stipulated in
the contract.[27]
Paragraph 18 of the Contract expressly provides for the escalation or
adjustment of the Contract Price in the event of substantial increase/s of
prices of the materials, like cement, G.I. corrugated sheets.[28] Clearly,
paragraph 18 of the Contract authorizes an escalation of the Contract Price
only if there are substantial increases in the prices of materials such as
cement and G.I. corrugated sheets. Absent substantial increases in the
prices of materials used in the Project, paragraph 18 would not apply.
The records show that respondents were amenable to an escalation of
the Contract Price, and that they in fact paid Salvador P250,000 in
anticipation of the escalation. Respondents were merely insisting that
Salvador comply with what the Contract required, that is, specify the increase
in the prices of particular materials purchased for the Project. Under
paragraph 18, Salvador had the obligation to show that there were
substantial increases in the prices of particular materials used in the Project.
The trial and appellate courts found, and the records support the finding, that
Salvador did not comply with this obligation.
Salvador contends that the computation[29] he submitted dated 25
December 1990 sufficiently complied with the conditions of paragraph 18. He
alleges that the 20% increase in the cost of the services enumerated in the
computation necessarily included the increase in the prices of the materials
used. He had also informed respondents earlier that the prices of
construction materials had increased by as much as 40%. Salvador further
argues that the burden of proof had shifted to respondents to present a
counter-computation as to what they considered the correct escalation of the
Contract Price.
We do not agree.
Salvador supplied the materials for the construction of the
Project.[30] Salvador would thus be in the best position to provide the actual
increases in the prices of the materials. Salvador also alleged that the prices
of construction materials rose substantially since the Project began in July
1990. The rule is that he who alleges a fact has the burden of proving
it.[31] Salvador never presented receipts, billings from suppliers or similar
documents substantiating his claim. Indeed, Salvadors obdurate refusal to
provide the simple details required by the Contract puzzles the Court.
A contract is the law between the parties and they are bound by its
stipulations.[32] If the terms of a contract are clear and leave no doubt upon
the intention of the contracting parties, the literal meaning of its stipulations
shall control.[33]
 Under the terms of paragraph 18 of the Contract, the Contract Price
shall be adjusted accordingly as to the particular item/s o[r] materials
involved in the increase/s of prices.[34]This stipulation is plainly worded,
requiring no interpretation. The Contract Price could be adjusted only up to
the actual increase in the prices of particular item/s or materials used in
the Project.
Paragraph 18 of the Contract did not give Salvador the right to
determine arbitrarily the proportion or amount of the escalation in the
Contract Price. The Contract requires that any escalation in the Contract
Price must result from substantial increase/s in the prices of particular
item/s or materials used in the Project. This certainly excludes escalation
based on estimates or blanket increases. The computation Salvador
provided failed to identify the particular materials that had increased in price
and the amount of such price increases. His general claim that the prices of
construction materials had increased by 40% was not sufficient under the
terms of paragraph 18. There was thus no basis for Salvadors demand of a
blanket 20% increase on all materials.
Assuming arguendo that the Contract authorized Salvador to determine
unilaterally the escalation of the Contract Price, such a provision would be
void for violating the principle of mutuality.[35] In Philippine National Bank v.
Court of Appeals, the Court struck down the increases in interest rates
unilaterally imposed by Philippine National Bank pursuant to an escalation
clause, and declared that:
In order that obligations arising from contracts may have the force of law
between the parties, there must be mutuality between the parties based on
their essential equality. A contract containing a condition which makes its
fulfillment dependent exclusively upon the uncontrolled will of one of the
contracting parties, is void (Garcia vs. Rita Legarda, Inc., 21 SCRA 555).
Hence, even assuming that the P1.8 million loan agreement between the
PNB and private respondent gave the PNB a license (although in fact there
was none) to increase the interest rate at will during the term of the loan, that
license would have been null and void for being violative of the principle of
mutuality essential in contracts. It would have invested the loan agreement
with the character of a contract of adhesion, where the parties do not bargain
on equal footing, the weaker partys (the debtor) participation being reduced
to the alternative to take it or leave it (Qua vs. Law Union & Rock Insurance
Co., 95 Phil. 85). Such a contract is a veritable trap for the weaker party
whom the courts of justice must protect against abuse and imposition.[36]
Moreover, the computation Salvador submitted plainly shows a 20%
increase in the cost of services. The Contract does not authorize any
escalation in the cost of services Salvador would render to the Project.
We agree with the trial court that Salvador has no basis to charge
respondents a fee of 20% or P39,000 on filling materials that respondents
supplied to the Project. Salvador himself testified that: (1) respondents
ordered and purchased the filling materials for P196,000; and (2)
respondents caused the delivery of the materials to the Project
site.[37] Neither the Contract nor any other document presented during trial
provided for a 20% charge on materials that respondents supplied to the
Project. On the contrary, under paragraph 20 of the Contract, matters relating
to the Project not stipulated in this contract are deemed not included herein
unless the parties may agree on said matters in writing. Under the Contract,
Salvador had the obligation to supply the materials for the construction of the
Project.[38] We cannot penalize respondents and reward Salvador for
respondents act in assuming part of Salvadors obligation under the Contract
when Salvador himself did not object to such act.
Respondents Counterclaim and the Damages
Awarded by the Court of Appeals
The trial court ruled that respondents counterclaim had no basis. On
appeal, the Court of Appeals reversed this ruling and ordered Salvador to
reimburse respondents P1,594,759.57, representing the amount allegedly
spent by respondents in completing the Project less the P90,772.91 balance
of the Contract Price. On the ground that Salvador was in bad faith, the
appellate court also awarded respondents P100,000 in moral
damages, P50,000 in exemplary damages and P20,000 in attorneys fees.
While factual findings of the lower courts are generally conclusive on
this Court, the rule is subject to certain exceptions, as when the findings of
fact of the trial court and Court of Appeals diverge.[39]
The Court of Appeals concluded that Salvador stopped work on the
Project due to respondents failure to accede to his demand for payment of
the price escalation. The evidence on record supports this. Salvador sent
respondents several letters threatening to halt construction of the Project
precisely for this reason.
Salvador maintains, however, that he was merely complying with the
DPWH Notice when he stopped all construction activities on 14 January
1991. This argument does not convince us. Despite Salvadors claim that he
received the DPWH Notice on 14 January 1991, the DPWH Notice itself
shows that a certain Dennis Coronado received the notice on 15 January
1991,[40] the day after Salvador ceased to work on the Project.
In a contract involving reciprocal obligations, the rules on when a party
may be declared in default are found in Article 1169:
Art. 1169. Those obliged to deliver or to do something, incur in delay from the
time the obligee judicially or extrajudicially demands from them the fulfillment
of their obligation.
xxx
In reciprocal obligations, neither party incurs in delay if the other does
not comply or is not ready to comply in a proper manner with what is
incumbent upon him. From the moment one of the parties fulfills his
obligation, delay by the other begins.[41] (Emphasis supplied.)
Although Salvador stopped work on the Project in breach of the
Contract and in violation of the law,[42] respondents were likewise remiss in
their obligations under the Contract. Paragraph 7 of the Contract states:
7. The project owner shall be responsible in applying for and obtaining at
his/her own expens/es (sic) whatever permits, licenses and/or documents as
may be necessary from the Government or any of its agencies, or otherwise;
xxx
The National Building Code requires a building permit on all construction
projects.[43] In the present case, the parties were able to start and even
almost complete the Project without a building permit. The failure of
respondents to secure the required building permit constitutes a breach of
their obligation under the Contract. Even if Salvador did not voluntarily stop
working on the Project, he would not have been able to complete the Project
because of the cease-and-desist order from the DPWH.
Thus, we cannot attribute Salvadors failure to complete the Project
within the contract period solely to his voluntary work stoppage. Paragraph 6
of the Contract provides:
6. That should there be any restraining order and/or injunction from the court
or any legal authority which will cause stoppage of the work of the
CONTRACTOR relating to the said project, the same should be considered
as [a] fortuitous event and/or force majeure, and the time of stoppage of
work shall be deducted from the agreed time of completion of the
project;[44] (Emphasis supplied)
The DPWH Notice suspended the running of the period given to
Salvador to complete the Project. Respondents were not able to show that
the DPWH lifted the cease-and-desist order, or that they subsequently
secured a building permit. Since respondents failed to prove that they had
fulfilled their obligation under the Contract, Salvadors failure to complete the
Project within the contract period cannot be attributed solely to his voluntary
work stoppage. There is, therefore, no legal basis to grant respondents
counterclaim for P1,685,532.48, the amount they allegedly spent to complete
the Project.
Respondents point out that when a new contractor took over to
complete the Project, no one from the DPWH stopped the Project, showing
that Salvador could also have completed the Project even without the
required building permit.[45] Respondents betray a disturbingly cavalier
attitude towards the strict requirements of the law, including the Sanitation
Code,[46] in establishing a memorial park or cemetery. The State strictly
regulates the establishment of memorial parks or cemeteries because they
affect public health. Memorial parks or cemeteries must be located and
constructed without contaminating rivers, underground water tables and the
surrounding areas.[47]
We also find untenable the award of moral and exemplary damages, as
well as attorneys fees to respondents. A breach of contract may give rise to
an award of moral damages if the party guilty of the breach acted
fraudulently or in bad faith.[48] In this case, both parties did not comply with
their obligations under the Contract. Respondents must share part of the
blame for the stoppage of work on the Project, as the stoppage was partly
due to respondents failure to obtain the necessary building permit. Likewise,
a breach of contract may give rise to exemplary damages only if the guilty
party acted in a wanton, fraudulent, reckless, oppressive or malevolent
manner.[49] Neither the records nor the decisions of the trial and appellate
courts indicate that Salvador behaved in such a manner and to such degree
as to warrant the grant of exemplary damages. We also delete the award of
attorneys fees since none of the grounds for awarding attorneys fees under
Article 2208 of the Civil Code applies to the present case.
WHEREFORE, the Decision of 30 April 1996 of the Court of Appeals in
CA-G.R. CV No. 39661 is REVERSED. The Decision of 18 August 1992 of
the Regional Trial Court of San Mateo, Rizal, Branch 76, in Civil Case No.
754, dismissing petitioner Renato C. Salvadors complaint as well as
respondents Maria Romayne Miranda and Gilbert Mirandas counterclaims, is
REINSTATED. No pronouncement as to costs.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Panganiban, Ynares-
Santiago, and Azcuna, JJ., concur.
21. [G.R. No. 109262. November 21, 1996]
DOMINGO R. CATAPUSAN, MINELIO R. CATAPUSAN, and FILOMENO R.
CATAPUSAN, petitioners, vs. THE COURT OF APPEALS, VICENTE
CATAPUSAN, JR., CIPRIANO CATAPUSAN, GREGORIA CATAPUSAN,
SEGUNDA BAUTISTA CATAPUSAN, NICANOR T. CATAPUSAN,
NARCISA T. CATAPUSAN, GREGORIO T. CATAPUSAN, BENIGNO T.
CATAPUSAN, REYNALDO T. CATAPUSAN, CATALINA T. CATAPUSAN,
GERTRUDES CATAPUSAN and FLORA DIAZ
CATAPUSAN, respondents.
RESOLUTION
FRANCISCO, J.:
The parties in this case are the children of the second marriage
(petitioners) and the heirs of the first marriage (respondents) contracted by
Bonifacio Catapusan, claiming ownership of a parcel of land located in Wawa,
Tanay, Rizal (hereinafter referred to as Wawa lot).[1] The facts:
Bonifacio Catapusan was first married to Narcissa Tanjuatco, the only
surviving heir of Dominga Piguing.[2] They had four (4) children namely, Felix,
Vicente, Benicio and Loreto.[3]Narcissa died in 1910. In 1927, Bonifacio
married Paula Reyes and out of their wedlock petitioners Domingo, Minelio
and Filomeno Catapusan were born. Bonifacio died in 1940.[4] Felix, Vicente
and Benicio, Bonifacios sons from the first marriage, died before the
institution of this case, survived by their respective widows and children,
respondents herein.
The petitioners filed on June 11, 1974, an action for partition of the
Wawa lot, which they allegedly co-own with their half-brothers and half-
sisters.[5] Petitioners contend that the said lot belongs to their father Bonifacio
and should therefore be partitioned among the heirs of the first and second
marriages.[6] In support thereof, they presented the tax declarations of the
Wawa lots four (4) adjacent lot owners. These four tax declarations state that
each of them bounds on one side the Wawa lot declared in the name of
Bonifacio. Stated differently, the petitioners proof of Bonifacios ownership of
the Wawa lot are the tax declarations of the adjoining lot owners which noted
that they each border on one side the Wawa lot declared in the name of
Bonifacio.[7]
In their answer with counterclaim, respondents asserted that the Wawa
lot was originally owned by Dominga and inherited by Narcissa as her
paraphernal property.[8] Upon Narcissas death, the Wawa lot passed to her
four children who are the predecessor-in-interest of respondents. These
children possessed and occupied the Wawa lot[9] and secured tax
declarations thereon in their names. Respondents likewise alleged that they
had been in open, continuous and uninterrupted possession of the said lot for
more than 50 years when the suit was filed in 1974.[10] They also invoke
laches and prescription against petitioners action. In response, petitioners
argue that their action had not lapsed since respondents repudiated the co-
ownership only in 1968.[11] They also questioned the respondents lack of
documentary proof (like titulo real) with regard to Dominga and Narcissas title,
as the two lived during the Spanish era.[12]
After trial, the lower court dismissed the complaint,[13] declared the
respondents as the true and lawful owners of the Wawa lot and granted the
counterclaim for P10,000.00 attorneys fees.[14] On appeal, the Court of
Appeals (CA) affirmed the RTC, but set aside the award of attorneys
fees.[15] Petitioners motion for reconsideration was denied.[16] Hence, this
appeal raising three issues: (1) whether an action for partition includes the
question of ownership; (2) whether Bonifacio had title to the Wawa lot, and (3)
whether petitioners action is barred by laches and/or prescription.[17]
In actions for partition, the court cannot properly issue an order to divide
the property, unless it first makes a determination as to the existence of co-
ownership. The court must initially settle the issue of ownership, the first
stage in an action for partition.[18] Needless to state, an action for partition will
not lie if the claimant has no rightful interest over the subject property. In fact,
Section 1 of Rule 69 requires the party filing the action to state in his
complaint the nature and extent of his title to the real estate. Until and unless
the issue of ownership is definitely resolved, it would be premature to effect a
partition of the properties.[19] Hence, on the first issue we rule in the
affirmative.
Anent the second and third issues, it is a basic rule of evidence that the
party making an allegation has the burden of proving[20]it by preponderance
of evidence.[21] In this case, petitioners evidence of their fathers (Bonifacio)
ownership of the Wawa lot are the tax declarations of the adjacent lot owners
and the testimonies of some witnesses who merely saw Bonifacio working on
the lot. On the other hand, respondents presented tax declarations which
indicated that the same lot is owned by their predecessors-in-interest, the
children of the first marriage, evidence which carry more weight as they
constitute proof of respondents ownership of the land in their possession.
The statement in the neighboring lot owners tax declarations is not a
conclusive proof that Bonifacio owned the surrounded lot. In fact, petitioners
cannot show any tax receipts or declarations of their ownership over the
same lot. Although tax declarations and receipts are not direct proofs of
ownership, yet when accompanied by proof of actual possession for the
required period, they become strong evidence to support the claim of
ownership thru acquisitive prescription. The possession contemplated as
foundation for prescriptive right must be one under claim of title or adverse to
or in concept of owner.[22]Possession by tolerance, as in the case of
petitioners, is not the kind of possession that may lead to title by prescription.
It is the respondents open, continuous, adverse and uninterrupted
possession far beyond the .30 year extraordinary period for acquisitive
prescription,[23] coupled with the tax declarations of their predecessors-in-
interest, that constitutes a superior weight of evidence that clinched their
claim. Moreover, petitioners bare and unsubstantiated allegation that
respondents tax declarations were fraudulently issued is insufficient to
sustain the imputation of fraud considering that good faith is always
presumed. Besides, respondents tax declarations are deemed regularly
issued. Being an action involving property, the petitioners must rely on the
strength of their own title and not on the weakness of the respondents
claim.[24]
In any event, the second and third issues pertain to factual findings of
the courts below. It is a settled doctrine that factual findings of the lower court
when supported by substantial evidence on the record is not usually
reviewed by the Supreme Court, especially when it is affirmed by the Court of
Appeals, as in this case.[25] No cogent evidence appears from the records of
this case for us to apply the above doctrine differently. No essential facts
were overlooked by the courts below, which if considered, may produce a
different outcome. Besides, the credence of the evidence and the
assessment of the weight and evidentiary value of the testimonies presented
are best appreciated by the trial court judge having observed that elusive and
incommunicable evidence of the witness deportment on the stand.[26]
WHEREFORE, finding no reversible error, the instant appeal
is DENIED and the decision of the Court of Appeals is AFFIRMED in toto.
SO ORDERED.
22. [G.R. No. 134329. January 19, 2000]
VERONA PADA-KILARIO and RICARDO KILARIO petitioners, vs.
COURT OF APPEALS and SILVERIO PADA, respondents.
DECISION
DE LEON, JR., J.:
The victory[1] of petitioner spouses Ricardo and Verona Kilario in the
Municipal Circuit Trial Court[2] in an ejectment suit[3] filed against them by
private respondent Silverio Pada, was foiled by its reversal[4]by the Regional
Trial Court[5] on appeal. They elevated their cause[6] to respondent Court of
Appeals[7] which, however, promulgated a Decision[8] on May 20, 1998,
affirming the Decision of the Regional Trial Court.
The following facts are undisputed:
One Jacinto Pada had six (6) children, namely, Marciano, Ananias, Amador,
Higino, Valentina and Ruperta. He died intestate. His estate included a
parcel of land of residential and coconut land located at Poblacion, Matalom,
Leyte, denominated as Cadastral Lot No. 5581 with an area of 1,301.92
square meters. It is the northern portion of Cadastral Lot No. 5581 which is
the subject of the instant controversy.
During the lifetime of Jacinto Pada, his half-brother, Feliciano Pada, obtained
permission from him to build a house on the northern portion of Cadastral Lot
No. 5581. When Feliciano died, his son, Pastor, continued living in the house
together with his eight children. Petitioner Verona Pada-Kilario, one of
Pastor's children, has been living in that house since 1960.
Sometime in May, 1951, the heirs of Jacinto Pada entered into an extra-
judicial partition of his estate. For this purpose, they executed a private
document which they, however, never registered in the Office of the
Registrar of Deeds of Leyte.
At the execution of the extra-judicial partition, Ananias was himself present
while his other brothers were represented by their children. Their sisters,
Valentina and Ruperta, both died without any issue. Marciano was
represented by his daughter, Maria; Amador was represented by his
daughter, Concordia; and Higino was represented by his son, Silverio who is
the private respondent in this case. It was to both Ananias and Marciano,
represented by his daughter, Maria, that Cadastral Lot No. 5581 was
allocated during the said partition. When Ananias died, his daughter, Juanita,
succeeded to his right as co-owner of said property.
On June 14, 1978, Juanita Pada sold to Engr. Ernesto Paderes, the right of
his father, Ananias, as co-owner of Cadastral Lot No. 5881.
On November 17, 1993, it was the turn of Maria Pada to sell the co-
ownership right of his father, Marciano. Private respondent, who is the first
cousin of Maria, was the buyer.
Thereafter, private respondent demanded that petitioner spouses vacate the
northern portion of Cadastral Lot No. 5581 so his family can utilize the said
area. They went through a series of meetings with the barangay officials
concerned for the purpose of amicable settlement, but all earnest efforts
toward that end, failed.
On June 26, 1995, private respondent filed in the Municipal Circuit Trial Court
of Matalom, Leyte, a complaint for ejectment with prayer for damages against
petitioner spouses.
On July 24, 1995, the heirs of Amador Pada, namely, Esperanza Pada-Pavo,
Concordia Pada-Bartolome, and Angelito Pada, executed a Deed of
Donation[9] transferring to petitioner Verona Pada-Kilario, their respective
shares as co-owners of Cadastral Lot No. 5581.
On February 12, 1996, petitioner spouses filed their Answer averring that the
northern portion of Cadastral Lot No. 5581 had already been donated to
them by the heirs of Amador Pada. They contended that the extra-judicial
partition of the estate of Jacinto Pada executed in 1951 was invalid and
ineffectual since no special power of attorney was executed by either
Marciano, Amador or Higino in favor of their respective children who
represented them in the extra-judicial partition. Moreover, it was effectuated
only through a private document that was never registered in the office of the
Registrar of Deeds of Leyte.
The Municipal Circuit Trial Court rendered judgment in favor of petitioner
spouses. It made the following findings:
"After a careful study of the evidence submitted by both
parties, the court finds that the evidence adduced by plaintiff
failed to establish his ownership over x x x Cadastral Lot No.
5581 x x x while defendants has [sic] successfully proved by
preponderance of evidence that said property is still under a
community of ownership among the heirs of the late Jacinto
Pada who died intestate. If there was some truth that
Marciano Pada and Ananias Pada has [sic] been adjudicated
jointly of [sic] the above-described residential property x x x
as their share of the inheritance on the basis of the alleged
extra judicial settlement, how come that since 1951, the date
of partition, the share of the late Marciano Pada was not
transferred in the name of his heirs, one of them Maria Pada-
Pavo and still remain [sic] in the name of Jacinto Pada up to
the present while the part pertaining to the share of Ananias
Pada was easily transferred in the name of his heirs x x x.
"The alleged extra judicial settlement was made in private
writing and the genuineness and due execution of said
document was assailed as doubtful and it appears that most
of the heirs were not participants and signatories of said
settlement, and there was lack of special power of attorney
to [sic] those who claimed to have represented their co-heirs
in the participation [sic] and signing of the said extra judicial
statement.
"Defendants were already occupying the northern portion of
the above-described property long before the sale of said
property on November 17, 1993 was executed between
Maria Pada-Pavo, as vendor and the plaintiff, as vendee.
They are in possession of said portion of the above-
described property since the year 1960 with the consent of
some of the heirs of Jacinto Pada and up to the [sic] present
some of the heirs of Jacinto Pada has [sic] donated x x x
their share of [sic] the above-described property to them,
virtually converting defendants' standing as co-owners of the
land under controversy. Thus, defendants as co-owners
became the undivided owners of the whole estate x x x. As
co-owners of x x x Cadastral Lot No. 5581 x x x their
possession in the northern portion is being [sic] lawful."[10]
From the foregoing decision, private respondent appealed to the Regional
Trial Court. On November 6, 1997, it rendered a judgment of reversal. It held:
"x x x [T]he said conveyances executed by Juanita Pada and
Maria Pada Pavo were never questioned or assailed by their
co-heirs for more than 40 years, thereby lending credence
on [sic] the fact that the two vendors were indeed legal and
lawful owners of properties ceded or sold. x x x At any rate,
granting that the co-heirs of Juanita Pada and Maria Pada
Pavo have some interests on the very lot assigned to
Marciano and Ananias, nevertheless, said interests had long
been sadly lost by prescription, if not laches or estoppel.
"It is true that an action for partition does not prescribe, as a
general rule, but this doctrine of imprescriptibility cannot be
invoked when one of the heirs possessed the property as an
owner and for a period sufficient to acquire it by prescription
because from the moment one of the co-heirs claim [sic] that
he is the absolute owner and denies the rest their share of
the community property, the question then involved is no
longer one for partition but of ownership. x x x Since [sic]
1951 up to 1993 covers a period of 42 long years. Clearly,
whatever right some of the co-heirs may have, was long
extinguished by laches, estoppel or
prescription.
"x x x
"x x x [T]he deed of donation executed by the Heirs of
Amador Pada, a brother of Marciano Pada, took place only
 during the inception of the case or after the lapse of more
than 40 years reckoned from the time the extrajudicial
partition was made in 1951. Therefore, said donation is
illegal and invalid [sic] the donors, among others, were
absolutely bereft of any right in donating the very property in
question."[11]
The dispositive portion of the decision of the Regional Trial Court reads as
follows:
"WHEREFORE, a judgment is hereby rendered, reversing
the judgment earlier promulgated by the Municipal Circuit
Trial Court of Matalom, Leyte, [sic] consequently,
defendants-appellees are hereby ordered:
"1. To vacate the premises in issue and return peaceful
possession to the appellant, being the lawful possessor in
concept of owner;
"2. To remove their house at their expense unless appellant
exercises the option of acquiring the same, in which case the
pertinent provisions of the New Civil Code has to be applied;
"3. Ordering the defendants-appellees to pay monthly rental
for their occupancy and use of the portion of the land in
question in the sum of P100.00 commencing on June 26,
1995 when the case was filed and until the termination of the
present case;
"4. Ordering the defendants to pay to the appellant the sum
of P5,000.00 as moral damages and the further sum of
P5,000.00 as attorney's fees;
"5. Taxing defendants to pay the costs of suit."[12]
Petitioners filed in the Court of Appeals a petition for review of the foregoing
decision of the Regional Trial Court.
On May 20, 1998, respondent Court of Appeals rendered judgment
dismissing said petition. It explained:
"Well-settled is the rule that in an ejectment suit, the only
issue is possession de facto or physical or material
possession and not de jure. Hence, even if the question of
ownership is raised in the pleadings, the court may pass
upon such issue but only to determine the question of
possession, specially if the former is inseparably linked with
the latter. It cannot dispose with finality the issue of
ownership, such issue being inutile in an ejectment suit
except to throw light on the question of possession x x x.
"Private respondent Silverio Pada anchors his claim to the
portion of the land possessed by petitioners on the Deed of
Sale executed in his favor by vendor Maria Pada-Pavo, a
daughter of Marciano, son of Jacinto Pada who was the
registered owner of the subject lot. The right of vendee Maria
Pada to sell the property was derived from the extra-judicial
partition executed in May 1951 among the heirs of Jacinto
Pada, which was written in a Bisayan dialect signed by the
heirs, wherein the subject land was adjudicated to Marciano,
Maria Pavo's father, and Ananias Pada. Although the
authenticity and genuineness of the extra-judicial partition is
now being questioned by the heirs of Amador Pada, no
action was ever previously filed in court to question the
validity of such partition.
"Notably, petitioners in their petition admitted among the
antecedent facts that Maria Pavo is one of the co-owners of
the property originally owned by Jacinto Pada x x x and that
the disputed lot was adjudicated to Marciano (father of Maria
Pavo) and Ananias, and upon the death of Marciano and
Ananias, their heirs took possession of said lot, i.e. Maria
Pavo the vendor for Marciano's share and Juanita for
Ananias' share x x x. Moreover, petitioners do not dispute
the findings of the respondent court that during the cadastral
survey of Matalom, Leyte, the share of Maria Pada Pavo was
denominated as Lot No. 5581, while the share of Juanita
Pada was denominated as Lot No. 6047, and that both Maria
Pada Pavo and Juanita were in possession of their
respective hereditary shares. Further, petitioners in their
Answer admitted that they have been occupying a portion of
Lot No. 5581, now in dispute without paying any rental owing
to the liberality of the plaintiff x x x. Petitioners cannot now
impugn the aforestated extrajudicial partition executed by the
heirs in 1951. As owner and possessor of the disputed
property, Maria Pada, and her vendee, private respondent, is
entitled to possession. A voluntary division of the estate of
the deceased by the heirs among themselves is conclusive
and confers upon said heirs exclusive ownership of the
respective portions assigned to them x x x.
 "The equally belated donation of a portion of the property in
dispute made by the heirs of Amador Pada, namely,
Concordia, Esperanza and Angelito, in favor of petitioner
Verona Pada is a futile attempt to confer upon the latter the
status of co-owner, since the donors had no interest nor right
to transfer. x x x This gesture appears to be a mere
afterthought to help petitioners to prolong their stay in the
premises. Furthermore, the respondent court correctly
pointed out that the equitable principle of laches and
estoppel come into play due to the donors' failure to assert
their claims and alleged ownership for more than forty (40)
years x x x. Accordingly, private respondent was subrogated
to the rights of the vendor over Lot No. 5581 which include
[sic] the portion occupied by petitioners."[13]
Petitioner spouses filed a Motion for Reconsideration of the foregoing
decision.
On June 16, 1998, respondent Court of Appeals issued a Resolution denying
said motion.
Hence this petition raising the following issues:
"I.
WHETHER THE COURT OF APPEALS ERRED IN NOT
RULING THAT PETITIONERS, AS CO-OWNERS, CANNOT
BE EJECTED FROM THE PREMISES CONSIDERING
THAT THE HEIRS OF JACINTO PADA DONATED TO
THEM THEIR UNDIVIDED INTEREST IN THE PROPERTY
IN DISPUTE.
"II.
WHETHER THE COURT OF APPEALS ERRED IN NOT
RULING THAT WHAT MARIA PADA SOLD WAS HER
UNDIVIDED SHARE IN THE PROPERTY IN DISPUTE.
"III.
WHETHER OR NOT THE PETITIONERS ARE BUILDERS
IN GOOD FAITH."[14]
There is no merit to the instant petition.
First. We hold that the extrajudicial partition of the estate of Jacinto Pada
among his heirs made in 1951 is valid, albeit executed in an unregistered
private document. No law requires partition among heirs to be in writing and
be registered in order to be valid.[15] The requirement in Sec. 1, Rule 74 of
the Revised Rules of Court that a partition be put in a public document and
registered, has for its purpose the protection of creditors and the heirs
themselves against tardy claims.[16] The object of registration is to serve as
constructive notice to others. It follows then that the intrinsic validity of
partition not executed with the prescribed formalities is not undermined when
no creditors are involved.[17] Without creditors to take into consideration, it is
competent for the heirs of an estate to enter into an agreement for
distribution thereof in a manner and upon a plan different from those
provided by the rules from which, in the first place, nothing can be inferred
that a writing or other formality is essential for the partition to be valid.[18] The
partition of inherited property need not be embodied in a public document so
as to be effective as regards the heirs that participated therein.[19] The
requirement of Article 1358 of the Civil Code 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, is only for
convenience, non-compliance with which does not affect the validity or
enforceability of the acts of the parties as among themselves.[20] And neither
does the Statute of Frauds under Article 1403 of the New Civil Code apply
because partition among heirs is not legally deemed a conveyance of real
property, considering that it involves not a transfer of property from one to the
other but rather, a confirmation or ratification of title or right of property that
an heir is renouncing in favor of another heir who accepts and receives the
inheritance.[21] The 1951 extrajudicial partition of Jacinto Pada's estate being
legal and effective as among his heirs, Juanita and Maria Pada validly
transferred their ownership rights over Cadastral Lot No. 5581 to Engr.
Paderes and private respondent, respectively.[22]
Second. The extrajudicial partition which the heirs of Jacinto Pada executed
voluntarily and spontaneously in 1951 has produced a legal status.[23] When
they discussed and agreed on the division of the estate of Jacinto Pada, it is
presumed that they did so in furtherance of their mutual interests. As such,
their division is conclusive, unless and until it is shown that there were debts
existing against the estate which had not been paid.[24] No showing, however,
has been made of any unpaid charges against the estate of Jacinto Pada.
Thus, there is no reason why the heirs should not be bound by their voluntary
acts.
The belated act of Concordia, Esperanza and Angelito, who are the heirs of
Amador Pada, of donating the subject property to petitioners after forty four
(44) years of never having disputed the validity of the 1951 extrajudicial
partition that allocated the subject property to Marciano and Ananias,
produced no legal effect. In the said partition, what was allocated to Amador
Pada was not the subject property which was a parcel of residential land in
Sto. Nino, Matalom, Leyte, but rather, one-half of a parcel of coconut land in
the interior of Sto. Nino St., Sabang, Matalom, Leyte and one-half of a parcel
of rice land in Itum, Sta. Fe, Matalom, Leyte. The donation made by his heirs
to petitioners of the subject property, thus, is void for they were not the
owners thereof. At any rate it is too late in the day for the heirs of Amador
Pada to repudiate the legal effects of the 1951 extrajudicial partition as
prescription and laches have equally set in.
Third. Petitioners are estopped from impugning the extrajudicial partition
executed by the heirs of Jacinto Pada after explicitly admitting in their
Answer that they had been occupying the subject property since 1960
without ever paying any rental as they only relied on the liberality and
tolerance of the Pada family.[25] Their admissions are evidence of a high
order and bind them insofar as the character of their possession of the
subject property is concerned.
Considering that petitioners were in possession of the subject property by
sheer tolerance of its owners, they knew that their occupation of the
premises may be terminated any time. Persons who occupy the land of
another at the latter's tolerance or permission, without any contract between
them, is 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.[26] Thus, they cannot be considered possessors
nor builders in good faith. It is well-settled that both Article 448[27] and Article
546[28] of the New Civil Code which allow full reimbursement of useful
improvements and retention of the premises until reimbursement is made,
apply only to a possessor in good faith, i.e., one who builds on land with the
belief that he is the owner thereof.[29] Verily, persons whose occupation of a
realty is by sheer tolerance of its owners are not possessors in good faith.
Neither did the promise of Concordia, Esperanza and Angelito Pada that they
were going to donate the premises to petitioners convert them into builders in
good faith for at the time the improvements were built on the premises, such
promise was not yet fulfilled, i.e., it was a mere expectancy of ownership that
may or may not be realized.[30] More importantly, even as that promise was
fulfilled, the donation is void for Concordia, Esperanza and Angelito Pada
were not the owners of Cadastral Lot No. 5581. As such, petitioners cannot
be said to be entitled to the value of the improvements that they built on the
said lot.
WHEREFORE, the petition for review is HEREBY DENIED.
Costs against petitioners.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, Quisumbing, and Buena, JJ., concur.
23. [G.R. No. 125233. March 9, 2000]
Spouses ALEXANDER CRUZ and ADELAIDA CRUZ, petitioners, vs.
ELEUTERIO LEIS, RAYMUNDO LEIS, ANASTACIO L. LAGDANO,
LORETA L. CAYONDA and the HONORABLE COURT OF
APPEALS, respondents. Lexj uris
DECISION
KAPUNAN, J.:
Private respondents, the heirs of spouses Adriano Leis and Gertrudes
Isidro,[1] filed an action before the Regional Trial Court (RTC) of Pasig
seeking the nullification of the contracts of sale over a lot executed by
Gertrudes Isidro in favor of petitioner Alexander Cruz, as well as the title
subsequently issued in the name of the latter. Private respondents claimed
that the contracts were vitiated by fraud as Gertrudes was illiterate and
already 80 years old at the time of the execution of the contracts; that the
price for the land was insufficient as it was sold only for P39,083.00 when the
fair market value of the lot should be P1,000.00 per square meter, instead
of P390.00, more or less; and that the property subject of the sale was
conjugal and, consequently, its sale without the knowledge and consent of
private respondents was in derogation of their rights as heirs.
The facts that gave rise to the complaint: Juri smis
Adriano and Gertrudes were married on 19 April 1923. On 27 April 1955,
Gertrudes acquired from the then Department of Agriculture and Natural
Resources (DANR) a parcel of land with an area of one hundred (100)
square meters, situated at Bo. Sto. Nio, Marikina, Rizal and covered by
Transfer Certificate of Title (TCT) No. 42245. The Deed of Sale described
Gertrudes as a widow. On 2 March 1956, TCT No. 43100 was issued in the
name of "Gertrudes Isidro," who was also referred to therein as a "widow."
On 2 December 1973, Adriano died. It does not appear that he executed a
will before his death.
On 5 February 1985, Gertrudes obtained a loan from petitioners, the spouses
Alexander and Adelaida Cruz, in the amount of P15,000.00 at 5% interest,
payable on or before 5 February 1986. The loan was secured by a mortgage
over the property covered by TCT No. 43100. Gertrudes, however, failed to
pay the loan on the due date.
Unable to pay her outstanding obligation after the debt became due and
payable, on 11 March 1986, Gertrudes executed two contracts in favor of
petitioner Alexander Cruz. The first is denominated as "Kasunduan," which
the parties concede is a pacto de retro sale, granting Gertrudes one year
within which to repurchase the property. The second is a "Kasunduan ng
Tuwirang Bilihan," a Deed of Absolute Sale covering the same property for
the price of P39,083.00, the same amount stipulated in the "Kasunduan." Jjj
uris
For failure of Gertrudes to repurchase the property, ownership thereof was
consolidated in the name of Alexander Cruz in whose name TCT No. 130584
was issued on 21 April 1987, canceling TCT No. 43100 in the name of
Gertrudes Isidro.
On 9 June 1987, Gertrudes Isidro died. Thereafter, her heirs, herein private
respondents, received demands to vacate the premises from petitioners, the
new owners of the property. Private respondents responded by filing a
complaint as mentioned at the outset.
On the basis of the foregoing facts, the RTC rendered a decision in favor of
private respondents. The RTC held that the land was conjugal property since
the evidence presented by private respondents disclosed that the same was
acquired during the marriage of the spouses and that Adriano contributed
money for the purchase of the property. Thus, the court concluded,
Gertrudes could only sell to petitioner spouses her one-half share in the
property.
The trial court also ruled that no fraud attended the execution of the contracts.
Nevertheless, the "Kasunduan," providing for a sale con pacto de retro, had
superseded the "Kasunduan ng Tuwirang Bilihan," the deed of absolute sale.
The trial court did not consider the pacto de retro sale an equitable mortgage,
despite the allegedly insufficient price. Nonetheless, the trial court found for
private respondents. It rationalized that petitioners failed to comply with the
provisions of Article 1607 of the Civil Code requiring a judicial order for the
consolidation of the ownership in the vendee a retro to be recorded in the
Registry of Property.
The dispositive portion of the RTC's Decision reads: lex
WHEREFORE, in the light of all the foregoing, judgment is
hereby rendered:
1. Declaring Exhibit G "Kasunduan ng Tuwirang Bilihan" Null
and Void and declar[ing] that the title issued pursuant thereto
is likewise Null and Void;
2. Declaring the property in litigation as conjugal property;
3. Ordering the Registry of Deeds of Marikina Branch to
reinstate the title of Gertrudes Isidro;
4. Ordering the plaintiff[s] [sic] to comply with the provision[s]
of Article 1607 in relation to Article 1616 of the Civil Code;
5. Ordering the defendant[s] to pay plaintiff[s] P15,000.00
nominal damages for the violation of plaintiffs rights;
6. Ordering the defendant[s] to pay plaintiff[s] the sum of
P8,000.00 as and for attorneys fees;
7. Dismissing defendant[s'] counterclaim; and
8. Ordering defendant[s] to pay the cost of suit. Jksm
SO ORDERED.[2]
Petitioners appealed to the Court of Appeals in vain. The Court of Appeals
affirmed the decision of the Regional Trial Court, holding that since the
property was acquired during the marriage of Gertrudes to Adriano, the same
was presumed to be conjugal property under Article 160 of the Civil Code.
The appellate court, like the trial court, also noted that petitioner did not
comply with the provisions of Article 1607 of the Civil Code.
Petitioners are now before this Court seeking the reversal of the decision of
the Court of Appeals. First, they contend that the subject property is not
conjugal but is owned exclusively by Gertrudes, who was described in the
Deed of Sale between Gertrudes and the DANR as well as in TCT No. 43100
as a widow. Second, assuming the land was conjugal property, petitioners
argue that the same became Gertrudes exclusively when, in 1979, she
mortgaged the property to the Daily Savings Bank and Loan Association. The
bank later foreclosed on the mortgage in 1981 but Gertrudes redeemed the
same in 1983. Chief
The paraphernal or conjugal nature of the property is not determinative of the
ownership of the disputed property. If the property was paraphernal as
contended by petitioners, Gertrudes Isidro would have the absolute right to
dispose of the same, and absolute title and ownership was vested in
petitioners upon the failure of Gertrudes to redeem the property. On the other
hand, if the property was conjugal, as private respondents maintain, upon the
death of Adriano Leis, the conjugal partnership was terminated,[3] entitling
Gertrudes to one-half of the property.[4] Adrianos rights to the other half, in
turn, were transmitted upon his death to his heirs,[5] which includes his widow
Gertrudes, who is entitled to the same share as that of each of the legitimate
children.[6] Thus, as a result of the death of Adriano, a regime of co-
ownership arose between Gertrudes and the other heirs in relation to the
property.
Incidentally, there is no merit in petitioners contention that Gertrudes
redemption of the property from the Daily Savings Bank vested in her
ownership over the same to the exclusion of her co-owners. We dismissed
the same argument by one of the petitioners in Paulmitan vs. Court of
Appeals,[7] where one of the petitioners therein claimed ownership of the
entire property subject of the case by virtue of her redemption thereof after
the same was forfeited in favor of the provincial government for non-payment
of taxes. We held, however, that the redemption of the land "did not
terminate the co-ownership nor give her title to the entire land subject of the
co-ownership." We expounded, quoting our pronouncement in Adille vs.
Court of Appeals:[8]
The petition raises a purely legal issue: May a co-owner
acquire exclusive ownership over the property held in
common? Esmsc
Essentially, it is the petitioners contention that the property
subject of dispute devolved upon him upon the failure of his
co-heirs to join him in its redemption within the period
required by law. He relies on the provisions of Article 1515 of
the old Civil Code, Article 1613 of the present Code, giving
the vendee a retro the right to demand redemption of the
entire property.
There is no merit in this petition.
The right of repurchase may be exercised by a co-owner
with respect to his share alone (CIVL CODE, art. 1612;
CIVIL CODE (1889), art. 1514.). While the records show that
petitioner redeemed the property in its entirety, shouldering
the expenses therefor, that did not make him the owner of all
of it. In other words, it did not put to end the existing state of
co-ownership (Supra, Art. 489). There is no doubt that
redemption of property entails a necessary expense. Under
the Civil Code: Esmmis
Art. 488. Each co-owner shall have a right to compel the
other co-owners to contribute to the expenses of
preservation of the thing or right owned in common and to
the taxes. Any one of the latter may exempt himself from this
obligation by renouncing so much of his undivided interest as
may be equivalent to his share of the expenses and taxes.
No such waiver shall be made if it is prejudicial to the co-
ownership.
The result is that the property remains to be in a condition of
co-ownership. While a vendee a retro, under Article 1613 of
the Code, "may not be compelled to consent to a partial
redemption," the redemption by one co-heir or co-owner of
the property in its totality does not vest in him ownership
over it. Failure on the part of all the co-owners to redeem it
entitles the vendee a retro to retain the property and
consolidate title thereto in his name (Supra, art. 1607). But
the provision does not give to the redeeming co-owner the
right to the entire property. It does not provide for a mode of
terminating a co-ownership.
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:
ART. 493. Each co-owner shall have the full ownership of his
part 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. Es-mso
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."[9]
As gleaned from the foregoing discussion, despite the Court of Appeals
finding and conclusion that Gertrudes as well as private respondents failed to
repurchase the property within the period stipulated and has lost all their
rights to it, it still ruled against petitioners by affirming the Regional Trial
Court's decision on the premise that there was no compliance with Article
1607 of the Civil Code requiring a judicial hearing before registration of the
property in the name of petitioners. This provision states: Ms-esm
ART. 1607. In case of real property, the consolidation of
ownership in the vendee by virtue of the failure of the vendor
to comply with the provisions of article 1616 shall not be
recorded in the Registry of Property without a judicial order,
after the vendor has been duly heard.
The aforequoted article is intended to minimize the evils which the pacto de
retro sale has caused in the hands of usurers. A judicial order is necessary in
order to determine the true nature of the transaction and to prevent the
interposition of buyers in good faith while the determination is being
made.[10]E-xsm
It bears stressing that notwithstanding Article 1607, the recording in the
Registry of Property of the consolidation of ownership of the vendee is not a
condition sine qua non to the transfer of ownership. Petitioners are the
owners of the subject property since neither Gertrudes nor her co-owners
redeemed the same within the one-year period stipulated in the
"Kasunduan." The essence of a pacto de retro sale is that title and ownership
of the property sold are immediately vested in the vendee a retro, subject to
the resolutory condition of repurchase by the vendor a retro within the
stipulated period. Failure thus of the vendor a retro to perform said resolutory
condition vests upon the vendee by operation of law absolute title and
ownership over the property sold. As title is already vested in the vendee a
retro, his failure to consolidate his title under Article 1607 of the Civil Code
does not impair such title or ownership for the method prescribed thereunder
is merely for the purpose of registering the consolidated title.[11]
WHEREFORE, the decision of the Court of Appeals is MODIFIED in that the
petitioners are deemed owners of the property by reason of the failure of the
vendor, Gertrudes Isidro, to repurchase the same within the period stipulated.
However, Transfer Certificate of Title No. 130584, in the name of Alexander
M. Cruz, which was issued without judicial order, is hereby ordered
CANCELLED, and Transfer Certificate of Title No. 43100 in the name of
Gertrudes Isidro is ordered REINSTATED, without prejudice to compliance
by petitioners with the provisions of Article 1607 of the Civil Code.
SO ORDERED.
Davide, Jr., C.J., (Chairman), Puno, and Ynares-Santiago, JJ., concur.
24. 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:
I
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.
25. [G.R. No. 95748. November 21, 1996]
ANASTACIA VDA. DE AVILES, ET AL., petitioners, vs. COURT OF
APPEALS and CAMILO AVILES, respondents.
DECISION
PANGANIBAN, J.:
Is the special civil action of Quieting of Title under Rule 64 the proper
remedy for settling a boundary dispute? Did the respondent Court[1] commit a
reversible error when it did not declare the respective rights of the parties
over the disputed property in said action?
These are the key issues raised in this petition to review on certiorari the
Decision[2] of the respondent Court promulgated on September 28, 1990 in
CA-G.R. CV No. 18155, which affirmed the decision dated December 29,
1987 of the Regional Trial Court, Branch 38,[3] Lingayen, Pangasinan,
dismissing a complaint for quieting of title.
The Facts
In an action for quieting of title commenced before the aforementioned
trial court, the following facts, stripped of unnecessary verbiage, were
established by the respondent Court:[4]
PLAINTIFFS aver that they are the actual possessors of a parcel of land
situated in Malawa, Lingayen, Pangasinan, more particularly described as
fishpond, cogonal, unirrigated rice and residential land, bounded on the N by
Camilo Aviles; on the E by Malawa River, on the S by Anastacio Aviles and
on the W by Juana and Apolonio Joaquin, with an area of 18,900 square
meters and declared under Tax Declaration No. 31446. This property is the
share of their father, Eduardo Aviles and brother of the defendant, in the
estate of their deceased parents, Ireneo Aviles and Anastacia Salazar.
SINCE 1957, Eduardo Aviles was in actual possession of the afore-described
property. In fact, the latter mortgaged the same with the Rural Bank and
Philippine National Bank branch in Lingayen. When the property was
inspected by a bank representative, Eduardo Aviles, in the presence of the
boundary owners, namely, defendant Camilo Aviles, Anastacio Aviles and
Juana and Apolonio Joaquin(,) pointed to the inspector the existing earthen
dikes as the boundary limits of the property and nobody objected. When the
real estate mortgage was foreclosed, the property was sold at public auction
but this was redeemed by plaintiffs mother and the land was subsequently
transferred and declared in her name.
ON March 23,1983, defendant Camilo Aviles asserted a color of title over the
northern portion of the property with an area of approximately 1,200 square
meters by constructing a bamboo fence (thereon) and moving the earthen
dikes, thereby molesting and disturbing the peaceful possession of the
plaintiffs over said portion.
UPON the other hand, defendant Camilo Aviles admitted the agreement of
partition (Exh. 1) executed by him and his brothers, Anastacio and Eduardo.
In accordance therewith, the total area of the property of their parents which
they divided is 46,795 square meters and the area alloted (sic) to Eduardo
Aviles is 16,111 square meters more or less, to Anastacio Aviles is 16,214
square meters more or less, while the area alloted to defendant Camilo
Aviles is 14,470 square meters more or less. The respective area(s) alloted
to them was agreed and measured before the execution of the agreement
but he was not present when the measurement was made. Defendant
agreed to have a smaller area because his brother Eduardo asked him that
he wanted a bigger share because he has several children to support. The
portion in litigation however is part of the share given to him in the agreement
of partition. At present, he is only occupying an area of 12,686 square meters
which is smaller than his actual share of 14,470 square meters. Tax
Declarations Nos. 23575, 481 and 379 covering his property from 1958
(Exhs. 7, 8 and 9) show that the area of his property is 14,470 square meters.
The riceland portion of his land is 13,290 square meters, the fishpond portion
is 500 square meters and the residential portion is 680 square meters, or a
total of 14,470 square meters. That the topography of his land is not the
same, hence, the height of his pilapils are likewise not the same.
In its decision dated December 29, 1987, the trial court disposed of the
case thus:[5]
WHEREFORE, premises considered, judgment is hereby rendered as
follows:
1. Ordering the parties to employ the services of a Land Surveyor of the
Bureau of Lands, Region I, San Fernando, La Union, to relocate and
determine the extent and the boundary limit of the land of the defendant on
its southern side in order that the fourteen thousand four hundred seventy
(14,470) square meters which is the actual area given to the defendant be
determined;
2. Ordering the complaint dismissed for lack of basis and merits;
3. Ordering the plaintiffs to pay the defendant the sum of two thousand
(P2,000.00) pesos as attorneys fees and to further pay the costs of the
proceedings;
4. All other claims are denied for lack of basis.
 Dissatisfied with the trial courts decision, petitioners appealed to the
respondent appellate Court. In its now-assailed Decision, the Court of
Appeals affirmed in part the decision of the trial court, reasoning that a
special civil action for quieting of title is not the proper remedy for settling a
boundary dispute, and that petitioners should have instituted an ejectment
suit instead. The dispositive portion of the impugned Decision reads as
follows:
WHEREFORE, in view of the foregoing, the decision dated December 29,
1987 dismissing the complaint is hereby AFFIRMED but without necessarily
agreeing with the ration detre (sic) proferred by the Court a quo. The portion
thereof ordering the parties to employ the service of a land surveyor to
relocate and determine the extent and boundary limit of the land of the
defendant on its southern portion in order that the fourteen thousand four
hundred seventy (14,470) square meters which is the actual area given to
the defendant be determined is hereby REVERSED and SET ASIDE. Costs
against plaintiffs-appellants.
The Issues
Disagreeing with the respondent Court, petitioners now raise the
following issues:[6]
a. Whether or not the Hon. Court of Appeals is correct when it opined that the
xxx complaint for quieting of title instituted by the petitioners against private
respondent before the court a quo is not the proper remedy but rather, it
should be a case for ejectment (sic).
b. Whether or not the Hon. Court of Appeals is correct in rendering a
decision, now subject of the instant petition, without fully determining the
respective rights of the herein parties.
Petitioners deem to be without basis the respondent Courts holding that
quieting of title is not the proper remedy in the case a quo. They assert that
private respondent is occupying the disputed lot because he claimed it to be
part of his share in the partitioned property of his parents, whereas
petitioners are claiming the said lot as part and parcel of the land allotted to
Eduardo Aviles, petitioners predecessor-in-interest. They contend that they
have been occupying the aforesaid land as heirs of Eduardo Aviles in open,
actual, continuous, peaceful, public and adversed (sic) (possession) against
the whole world. Further, they argue that, if indeed the disputed lot belonged
to private respondent, why then did it take him almost 26 long years from
June 27, 1957 or until March 27, 1983 to assert his ownership; why did he
not assert his ownership over the property when Eduardo Aviles was still
alive; and why did he not take any action when the mortgage over the
disputed property was foreclosed?[7]
Private respondent corrects the petitioners claim in regard to the date
when he had the bamboo fence constructed. He alleges that the petitioners
maliciously concocted the story that private respondent had purportedly
encroached some 1,200 meters on their property when, in fact, he was
merely repairing the old bamboo fence existing where it had always been
since 1957.[8]
The Courts Ruling
First Issue: Quieting of Title Not Proper Remedy For Settling Boundary
Dispute
We agree with respondent Court. The facts presented unmistakably
constitute a clear case of boundary dispute, which is not cognizable in a
special civil action to quiet title.
Quieting of title is a common law remedy for the removal of any cloud
upon or doubt or uncertainty with respect to title to real property.[9]
The Civil Code authorizes the said remedy in the following language:
Art. 476. Whenever there is a cloud on title to real property or any interest
therein, by reason of any instrument, record, claim, encumbrance or
proceeding which is apparently valid or effective but is, in truth and in fact,
invalid, ineffective, voidable, or unenforceable, and may be prejudicial to said
title, an action may be brought to remove such cloud or to quiet the title.
An action may also be brought to prevent a cloud from being cast upon a title
to real property of any interest therein."
In fine, to avail the remedy of quieting of title, a plaintiff must show that
there is an instrument, record, claim, encumbrance or proceeding which
constitutes or casts a cloud, doubt, question or shadow upon the owners title
to or interest in real property. Thus, petitioners have wholly misapprehended
the import of the foregoing rule by claiming that respondent Courterred
in holding that there was no xxx evidence of any muniment of title,
proceeding, written contract, xxx, and that there were, as a matter of
fact, two such contracts, viz., (i) the Agreement of Partition executed by
private respondent and his brothers (including the petitioners father and
predecessor-in-interest), in which their respective shares in the inherited
property were agreed upon, and (ii) the Deed of Sale evidencing the
redemption by petitioner Anastacia Vda. de Aviles of the subject property in a
foreclosure sale. However, these documents in no way constitute a cloud or
cast a doubt upon the title of petitioners. Rather, the uncertainty arises from
the parties failure to situate and fix the boundary between their respective
properties.
As correctly held by the respondent Court, (i)n fact, both plaintiffs and
defendant admitted the existence of the agreement of partition dated June 8,
1957 and in accordance therewith, a fixed area was alloted (sic) to them and
that the only controversy is whether these lands were properly measured.
There is no adverse claim by the defendant which is apparently valid, but is,
in truth and in fact, invalid, ineffective, voidable, or unenforceable and which
constitutes a cloud thereon.
Corollarily, and equally as clear, the construction of the bamboo fence
enclosing the disputed property and the moving of earthen dikes are not the
clouds or doubts which can be removed in an action for quieting of title.
An action to quiet title or to remove cloud may not be brought for the
purpose of settling a boundary dispute. The precedent on this matter cited by
the respondent Court in its Decision is herewith reproduced in full:[10]
In Ashurst v. McKenzie (1890) 92 Ala. 484, 9 So. 262, where the
complainants predecessor in title and the defendant had, during their
occupancy, destroyed and obliterated the boundary line between their
adjoining tracts of land, and there was now a dispute as to its location, it was
held that a bill did not lie to remove a cloud on the complainants title. The
court said: There is no allegation or evidence of any muniment of title,
proceeding, written contract, or paper showing any color of title in the
defendant, which could cast a shadow on the title of complainants to any part
of the land; there is no overlapping of description in the muniments held by
either. The land of complainants and defendant join. The line which
separates them is in dispute and is to be determined by evidence aliunde.
Each admits that the other has title up to his line wherever it may be, and the
title papers of neither fix its precise location. So that there is no paper the
existence of which clouds the title of either party, and nothing could be
delivered up and cancelled under the decree of the court undertaking to
remove a cloud.
Another similarly instructive precedent reported in the same reference is also
quoted below:
In Kilgannon v. Jenkinson (1883) 51 Mich. 240, 16 N.W. 390, the court,
dismissing a bill to quiet title, said: The fundamental dispute is about the
correct position of the line between lots 3 and 7. The case is not one where a
complainant in possession of a specific piece of land, and a defendant out of
possession, but claiming some right or title, are contending as to which one
has the better right to that same parcel; but it is a case where the titles are
not opposed, and the basis and existence of all right and claim depend
simply upon where the original line runs. When that is once settled, there can
remain no semblance of claim or cloud to be passed on, and the issue on
that particular question is one regularly triable at law. . .[11]
Second Issue: Should Parties Rights Have Been Declared?
Petitioners also chide the respondent Court (and the trial court) for not
declaring the respective rights of the parties with respect to the land in
question, arguing that when one is disturbed in any form in his rights of
property over an immovable by the unfounded claims of others, he has the
right to ask from the competent courts: xxx that their respective rights be
determined xxx. As support for their thesis, petitioners cite the ancient case
of Bautista vs. Exconde.[12]
Rule 64 of the Rules of Court, dealing with actions for declaratory relief,
specifies in Section 1 thereof the grounds, conditions precedent or requisites
for bringing such petitions.[13] This Court has previously held that --
Under this rule, only a person who is interested under a deed, will, contract
or other written instrument, and whose rights are affected by a statute or
ordinance, may bring an action to determine any question of construction or
validity arising under the instrument or statute and for a declaration of his
rights or duties thereunder. This means that the subject matter must refer to
a deed, will, contract or other written instrument, or to a statute or ordinance,
to warrant declaratory relief. Any other matter not mentioned therein is
deemed excluded. This is under the principle of expressio unius est exclussio
alterius.[14]
Inasmuch as the enumeration of the causes, grounds or conditions
precedent in the first paragraph of said Sec. 1 is exclusive, by parity of
reasoning, it follows that similar remedies provided for in the second
paragraph of the same section would also be marked with the same
exclusivity as to bar any other cause possibly clouding ones title as a ground
for such petitions. Thus, even assuming arguendo that the action to quiet title
had been brought under Rule 64, the same would still not have prospered,
the subject matter thereof not referring to a deed, will, contract or other
written instrument, or to a statute or ordinance, but to a boundary dispute,
and therefore not warranting the grant of declaratory relief.
From another perspective, we hold that the trial court (and likewise the
respondent Court) cannot, in an action for quieting of title, order the
determination of the boundaries of the claimed property, as that would be
tantamount to awarding to one or some of the parties the disputed property in
an action where the sole issue is limited to whether the instrument, record,
claim, encumbrance or proceeding involved constitutes a cloud upon the
petitioners interest or title in and to said property. Such determination of
boundaries is appropriate in adversarial proceedings where possession or
ownership may properly be considered and where evidence aliunde, other
than the instrument, record, claim, encumbrance or proceeding itself, may be
introduced. An action for forcible entry, whenever warranted by the period
prescribed in Rule 70, or for recovery of possession de facto, also within the
prescribed period, may be availed of by the petitioners, in which proceeding
the boundary dispute may be fully threshed out.
WHEREFORE, in view of the foregoing considerations, the instant
petition is hereby DENIED and the Decision appealed from
is AFFIRMED. Costs against petitioners.
SO ORDERED.
Narvasa, C.J., (Chairman), Davide, Jr., Melo, and Francisco, JJ., concur.
26. [G.R. No. 108926. July 12, 1996]
REPUBLIC OF THE PHILIPPINES, petitioner, vs. COURT OF APPEALS
and HEIRS OF DEMOCRITO O. PLAZA, respondents.
DECISION
TORRES, JR., J.:
Petitioner implores this Court to review and set aside the decision[1] of
February 8, 1993 of the Court of Appeals in CA-G.R. CV No. 34950 which
affirmed the decision of June 14, 1991 of the Regional Trial Court of Makati
in LRC Case No. M-99 confirming respondent Democrito O. Plazas title over
Rel. Plan 1059, which is the relocation plan of Psu-97886.
After the filing of private respondents Comment, this Court, in its
resolution of May 24, 1993, gave due course to the petition and required the
parties to submit their respective Memoranda. The petitioner filed its
Memorandum on June 29, 1993 while private respondent filed his
Memorandum on July 6, 1993.
The factual background is summarized in the Decision[2]of the Court of
Appeals as follows:
According to petitioner-appellee, the subject property situated at Liwanag,
Talon (formerly Pamplona), Las Pinas, Rizal, now Metro Manila, having an
area of 45,295 sq. m., was first owned by Santos de la Cruz who declared
the same in his name under Tax Declaration Nos. 3932, for the year 1913;
3933 for 1917; and 6905, for 1921 (Exhs. 2-B, 2-C and 2-D, Exh. K for
petitioner-appellee, pp. 514-516, Record).Subsequently, the subject property
was successively bought or acquired by Pedro Cristobal, Regino Gervacio,
Diego Calugdan and Gil Alhambra. To evidence their respective acquisition
of the property in question, Tax Declaration Nos. 7937, for the year 1923;
8463, for 1927; 9467, for 1934; and 2708 (year not available) were
presented.[3] After Gil Alhambra died, his heirs extrajudicially partitioned the
subject property and declared it in their names under Tax Declaration Nos.
5595 and 5596 for the year 1960.[4] On 5 July 1966, they executed a Deed of
Sale With Mortgage deeding the subject property to petitioner-appellee for
P231,340.00 payable in three (3) installments, the payment of which was
secured by a mortgage on the property. Upon receipt of the full payment,
they executed a Release of Mortgage on 1 August 1968.[5] After the sale,
petitioner-appellee took possession of the subject property and paid the
taxes due thereon for the years 1966 up to 1986, and in 1985 declared it in
his name under Tax Declaration Nos. B-013-01392 and B-013-01391.[6] He
appointed Mauricio Plaza and Jesus Magcanlas as the administrator and
caretaker thereof, respectively. Due to losses, the property in question was
cultivated only for a while. Five (5) years according to Mauricio Plaza, and
from 1966 up to 1978 according to Jesus Magcanlas.[7]
On 14 November 1986, petitioner-appellee filed a petition, which was
amended on 17 July 1987, for the registration and confirmation of his title
over the subject property alleging, among others, that:
1. by virtue of the deed of sale, he is the owner thereof;
2. he and his predecessors-in-interest have been in open,
continuous, exclusive and notorious possession and occupation
of the property prior to, and since 12 June 1945;
3. other than himself, there is no other person occupying, or having
any interest over the property; and,
4. there are no tenants or agricultural lessees thereon.[8]
On 24 February 1988, oppositor-appellant, the Republic of the Philippines
(Republic, for brevity), filed its opposition maintaining, among others, that: (1)
petitioner-appellee and his predecessors-in-interest have not been in open,
continuous, exclusive and notorious possession and occupation of the land in
question since 12 June 1945 or prior thereto; (2) the muniment of title and tax
declarations as well as tax payments relied upon do not constitute sufficient
evidence of a bona fide acquisition of the land by petitioner-appellee and of
his open, continuous possession and occupation thereof in the concept of
owner since 12 June 1945, or prior thereto, and (3) the subject property
pertains to the public domain and is not subject to private appropriation.[9]
On 9 March 1988, after the compliance of the jurisdiction requirements was
proved and, on motion, the lower court issued its order of general default.[10]
Aside from the Republic, there were others who opposed the petition and
filed their opposition thereto prior to, or were allowed to submit their
opposition despite, and after, the issuance of the order of general
default. They are:
(a) Arsenio Medina who withdrew his opposition on 29 May 1989;[11]
(b) Emilio, Leopoldo and Abraham, all surnamed Borbon; Heirs of
Andres Reyes; Maximo Lopez; and, Marilou Castanares who
prayed that the lower court direct petitioner-appellee to see to it
that their respective property, which adjoins the land in question,
are not included in the petition;[12]
(c) the Heirs of Santos de la Cruz and the Kadakilaan Estate. Upon
their respective motion, the order of default was set aside as to
them and they were allowed to file their opposition.
The Heirs of Santos de la Cruz argue that: (1) their predecessor-in-interest,
Santos de la Cruz, is the primitive owner of the subject lot; and, (2) he, his
heirs, and upon their tolerance, some other persons have been in open,
peaceful, notorious and continuous possession of the land in question since
time immemorial until the present.
The Kadakilaan Estate contends that: (1) by reason of its Titulo de Propiedad
de Terrenos of 1891 Royal Decree 01-4, with approved plans registered
under the Torrens System in compliance with, and as a consequence of, P.D.
872, it is the owner of the subject property; and, (2) petitioner-appellee or his
predecessors-in-interest have not been in open, continuous, exclusive and
notorious possession and occupation of the land in question since 12 June
1945 or earlier.[13]
(d) the Heirs of Hermogenes Rodriguez. They allege, among others,
that by reason of a Titulo de Propiedad de Terrenos of 1891;
Royal Decree No. 01-4, Protocol of 1891; Decree No. 659,
approved Plan of the Bureau of Lands No. 12298 dated 10
September 1963, their predecessor-in-interest is the owner of
the subject property. Despite (sic) that their motion to lift order of
default as to them and admit their opposition, which motion was
opposed by petitioner-appellee, does not appear to have been
acted upon by the lower court, they were able to present one (1)
witness;[14] and,
(e) Phase II Laong Plaza Settlers Association, Inc. It filed a motion
to intervene in the case but the motion does not appear to have
been acted upon by the lower court.[15]
On 13 March 1990, the Community Environment and Natural Resources
Office, West Sector (CENRO-WEST) of the Department of Environment and
Natural Resources requested the lower court to furnish it photocopies of the
records of the petition as the property in question was the subject of a
request for a Presidential Proclamation reserving the land in question for
Slum Improvement and Resettlement Site (SIR) of the National Housing
Authority.[16]
On 22 June 1990, upon order of the lower court, an ocular inspection was
conducted on the subject property by the court-appointed commissioner who
submitted his report on 2 July 1990.[17]
On 3 January 1991 Proclamation No. 679 was issued by the President of the
Republic of the Philippines withdrawing the subject property from sale or
settlement and reserve (the same) for slum improvement and sites and
services program under the administration and disposition of the National
Housing Authority in coordination with the National Capital Region,
Department of Environment and Natural Resources subject to actual survey
and private rights if any there be, ... The National Housing Authority was
authorized to develop, administer and dispose of the area in accordance with
LOI 555, as amended (by LOI Nos. 686 and 1283), and LOI 557.[18]
On 31 May 1991 petitioner-appellee filed his memorandum.[19] The
oppositors did not. Nevertheless, among them, only the Republic and the
Heirs of Santos de la Cruz formally offered their evidence.[20]
On 14 June 1991 the lower court rendered the judgment referred to
earlier.
On 8 July 1991, from among the oppositors, only the Republic filed a
notice of appeal which was approved on 10 July 1991.[21] By reason of the
approval thereof, the motion filed on 23 July 1991 by the Heirs of
Hermogenes Rodriguez for the reconsideration of the judgment was denied
on 1 August 1991.[22]
On February 8, 1993, the Court of Appeals rendered a decision
affirming the trial courts judgment.
Hence, this petition filed by the Republic of the Philippines alleging that:
THE DECISION OF THE COURT OF APPEALS AFFIRMING THE
DECISION OF THE REGIONAL TRIAL COURT GRANTING PRIVATE
RESPONDENTS APPLICATION FOR REGISTRATION, IS NOT
SUPPORTED BY AND IS CONTRARY TO LAW, THE EVIDENCE AND
EXISTING JURISPRUDENCE.
 Petitioner argues that the burden rests on the applicant to show by
convincing evidence that he has a registrable title over the property sought to
be titled, which the latter failed to do.
According to petitioner, aside from mere tax declarations all of which are
of recent vintage, private respondent has not established actual possession
of the property in question in the manner required by law (Section 14, P.D.
1529) and settled jurisprudence on the matter. Thus, no evidence was
adduced that private respondent cultivated much less, fenced the subject
property if only to prove actual possession. The actual fencing of the property
was done only starting 1988 when the actual occupants were forcibly ejected
and driven out from their respective abodes and that its witnesses
namely: Elascio Domitita, Manuel Dolom, Bernadette Aguinaldo and Virginia
Franco, who were all actual residents of the questioned area, categorically
testified on this score, summarized as follows:
1. In their long stay in the area, the longest staying occupant being
Domitita who had been in the premises for more than thirty (30)
years nobody ever claimed ownership over the subject property;
2. It was only in 1988 that they learned that private respondent had
filed a petition to have the property titled in his name;
3. Private respondent had not introduced any improvement nor was
there a caretaker assigned by him to look after the property; and,
4. Aside from them, there were about 200 more families residing in
the area but through force, intimidation and illegal demolitions,
were driven out by private respondent from the premises.
We are not persuaded. On this point, the respondent Court correctly
found that:
Proof that petitioner-appellee and his predecessors-in-interest have acquired
and have been in open, continuous, exclusive and notorious possession of
the subject property for a period of 30 years under a bona fide claim of
ownership are the tax declarations of petitioner-appellees predecessors-in-
interest, the deed of sale, tax payment receipts and petitioner-appellees tax
declarations. The evidence on record reveals that: (1) the predecessors-in-
interest of petitioner-appellee have been declaring the property in question in
their names in the years 1923, 1927, 1934 and 1960; and, (2) in 1966,
petitioner-appellee purchased the same from the Heirs of Gil Alhambra and
since then paid the taxes due thereon and declared the property in his name
in 1985.
xxxxxxxxx
x x x Considering the dates of the tax declarations and the realty tax
payments, they can hardly be said to be of recent vintage indicating
petitioner-appellees pretended possession of the property. On the contrary,
they are strong evidence of possession in the concept of owner by petitioner-
appellee and his predecessors-in-interest. Moreover, the realty tax payment
receipts show that petitioner-appellee has been very religious in paying the
taxes due on the property. This is indicative of his honest belief that he is the
owner of the subject property. We are, therefore, of the opinion that
petitioner-appellee has proved that he and his predecessors-in-interest have
been in open, continuous, exclusive and notorious possession of the subject
property in the concept of owner for a period of 30 years since 12 June 1945
and earlier. By operation of law, the property in question has become private
property.[23]
Contrary to the representations of the Republic, petitioner-appellee had
introduced some improvements on the subject property from the time he
purchased it. His witnesses testified that petitioner-appellee developed the
subject property into a ricefield and planted it with rice, but only for about five
years because the return on investment was not enough to sustain the
continued operation of the riceland. Though not in the category of permanent
structures, the preparation of the land into a ricefield and planting it with rice
are considered improvements thereon.[24]
Although tax declarations or realty tax payments of property are not
conclusive evidence of ownership, nevertheless, they are good indicia of
possession in the concept of 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.[25] 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.[26]
Neither do we find merit in the assertions of petitioners witnesses
Elascio Domitita, Manuel Dolom, Bernadette Aguinaldo and Virginia
Franco. As properly stated by the public respondent,
xxx Their alleged possession is not based on any right. Neither do they claim
to have any title or interest over the subject property. As a matter of fact, they
did not bother to oppose the petition. The most that can be said of their
alleged possession is that it was only with the tolerance of rightful owners of
the property - plaintiff-appellee and his predecessors-in-interest, hence, is no
bar to the granting of the petition.We do not see why we should accept the
bare assertions of the alleged occupants at their face value as against the
claim of ownership of plaintiff-appellee backed up by legal documents, tax
declarations, and tax receipts.[27]
Well-settled and oft-repeated is the rule that findings of facts of the
Court of Appeals are final and conclusive on the Supreme Court except: 1.)
when the conclusion is a finding grounded entirely on speculation, surmises
and conjectures; 2.) when the inference made is manifestly mistaken, absurd
or impossible; 3.) when there is a grave abuse of discretion; 4.) when the
judgment is based on a misapprehension of facts; 5.) when the findings of
facts are conflicting; 6.) when the Court of Appeals, in making its findings,
went beyond the issues of the case and the same is contrary to the
admissions of both appellant and appellee; 7.) when the findings of the Court
of Appeals are contrary to those of the trial court; and 8.) when the findings of
fact are conclusions without citation of specific evidence on which they are
based.[28] Concededly, none of the above exceptions obtains in the case at
bar.
Petitioner also alleges that the land in question had been withdrawn
from the alienable portion of the public domain pursuant to Presidential
Proclamation No. 679 entitled Reserving for Slum Improvement and
Resettlement (SIR) Sites and Services of the National Housing Authority, A
Certain Parcel of Land of the Public Domain Situated in the Municipality of
Las Pinas, Metro Manila, which was issued on January 7, 1991 or almost 6
months prior to the issuance of the trial courts decision.
The Court of Appeals opined that the issuance of the proclamation did
not have any effect on the subject property as the proclamation only
withdrew it from sale or settlement and reserved the same for slum
improvement and sites and services program, but subject to actual survey
and existing private rights. The proclamation did not prohibit the registration
of title of one who claims, and proves, to be the owner thereof. We agree. At
any rate, registration does not vest title. It is merely evidence of such
title.[29] Our land registration laws do not give the holder any better title than
what he actually has. When the conditions set by law are complied with, the
possessor of the land, by operation of law, acquires a right to a grant, a
government grant, without the necessity of a certificate of title being
issued. The Torrens system was not established as a means for the
acquisition of title to private land, as it merely confirms, but does not confer
ownership.[30]
Of particular relevance is the finding of the respondent Court of Appeals
to the effect that -
We have found that petitioner-appellee has proven his claim of ownership
over the subject property. As provided in the proclamation itself, his
ownership of the subject property must be respected and he cannot be
barred from having the land titled in his name. This does not contravene or
negate the intention of the proclamation. Besides, its implementing Letters of
Instruction recognize that there may be lands declared included in the Slum
Improvement Resettlement (SIR) program that are privately
owned. Paragraph 10 of LOI No. 555 provides that if the land declared to be
included in the SIR program is privately owned, the concerned local
government, upon the approval by the National Housing Authority of its
project plan, shall acquire the property through expropriation. In LOI No. 686
paragraph 3, it is mandated that the NHA, upon request of the local
government, expropriate or otherwise acquire land for the SIR
program. Proclamation No. 679 is, therefore, not a valid justification to deny
the petition.
x x x At the time the Proclamation was issued, the controversy over the
subject property was sub-judice. The conflicting rights over it had been
presented to the court for resolution. That jurisdiction could not be removed
from it by subsequent legislation. The President must have been aware of
this. Hence, the inclusion of the cautionary clause subject to existing private
rights.[31]
Over time, Courts have recognized with almost pedantic adherence that
what is inconvenient or contrary to reason is not allowed in law - Quod est
inconveniens, aut contra rationem non permissum est in lege. Undoubtedly,
reason and law find respondent entitled to rights of ownership over the
disputed property.
ACCORDINGLY, the assailed decision dated February 8, 1993 is
hereby AFFIRMED and the instant petition is hereby DISMISSED.
SO ORDERED.
Regalado (Chairman), Romero, Puno, and Mendoza, JJ., concur.
27. [G.R. No. 105294. February 26, 1997]
PACITA DAVID-CHAN, petitioner, vs. COURT OF APPEALS and PHIL.
RABBIT BUS LINES, INC., respondents.
DECISION
PANGANIBAN, J.:
In pleading for an easement of right of way, petitioner correctly cites the
requirements of law but fails to provide factual support to show her
entitlement thereto. Since findings of facts by the Court of Appeals affirming
those of the trial court are binding on the Supreme Court, the petition must
thus fail. Even petitioners plea for equity becomes unavailing because resort
to equity is possible only in the absence, and never in contravention, of
statutory law.
The petition assails the Decision[1] of respondent Court[2] promulgated
on April 30, 1992. The Decision of respondent Court affirmed the decision
dated July 26, 1989, of the Regional Trial Court of San Fernando, Pampanga,
Branch 44, in Civil Case No. 8049. The dispositive portion of the affirmed
decision of the trial court reads:[3]
IN VIEW OF THE FOREGOING CONSIDERATIONS, and finding plaintiffs
petition to be without merit, the same is, as it is hereby ordered dismissed
with costs against plaintiff.
On defendants (Singian) counterclaim, the same is, as it is hereby dismissed
for insufficiency of evidence.
The Facts
On September 29, 1987, petitioner filed with the trial court an amended
petition with prayer for preliminary prohibitory injunction, seeking to stop
private respondent from fencing its property and depriving her of access to
the highway. Petitioner alleged that her property, consisting of around 635
square meters, situated in Del Pilar, San Fernando, Pampanga and covered
by TCT No. 57596-R, was delineated on its northern and western sides by
various business establishments. Adjoining her property along its southern
boundary was the land of the Pineda family, while along the east-
northeastern boundary, and lying between her property and the MacArthur
Highway, was another lot with an area of approximately 161 square meters
owned by private respondent. In short, petitioners lot was almost completely
surrounded by other immovables and cut off from the highway. Her only
access to the highway was a very small opening measuring two feet four
inches wide through the aforementioned property of private
respondent. Petitioner believed she was entitled to a wider compulsory
easement of right of way through the said property of private
respondent. The prospective subservient estate was a portion of a bigger lot
consisting of 7,239 square meters and covered by TCT No. 163033-R, which
was formerly owned by the Singian Brothers Corporation (hereinafter
referred to as Singian Brothers) and was sold to private respondent without
the knowledge and consent of petitioner, who was thereby allegedly
prevented from exercising her right of pre-emption or right of
redemption. Petitioner alleged that private respondent was about to complete
the construction of its concrete fence on the said lot which would result in
depriving petitioner of the only available right of way, and that therefore, she
was constrained to petition the trial court to enjoin private respondent from
fencing said lot. The petition likewise prayed that judgment be rendered
ordering private respondent to sell to petitioner the subject lot and to pay the
damages, attorneys fees and costs of suit.
Private respondent denied the allegations of petitioner. The parents and
relatives of petitioner were never tenants or lessees of the former owner,
Singian Brothers; rather, they were found to be illegally occupying the
property as ruled by the MTC-San Fernando, Pampanga, Branch 1, in Civil
Case No. 4865. The dispositive portion of the judgment of ejectment reads:[4]
WHEREFORE, defendants Eduardo Mangune, Pacita David-Chan and
Primo David including their agents/representatives and, any and all persons
given access by them to the disputed premises claiming any right under them,
are hereby ordered to immediately vacate the area in question, remove all
the improvements that they have constructed thereon; to pay the plaintiff
corporation jointly and severally the sum of P2,000.00 pesos - as Attorneys
fees and the costs of this suit.
The case against defendants Loida Makabali and Helen Hermidia is hereby
dismissed as the action has become moot.
The defendants counterclaim, Pacita David-Chan and Eduardo Mangune is
hereby dismissed for lack of merit.
Hence the former owners were not obliged to inform petitioner of the
sale. The land sold by the Singian Brothers was free from all liens and
encumbrances as stated in the Deed of Absolute Sale. Private respondent
was not selling the 161 square-meter lot because it needed the
property. Also, petitioner had another access to the highway without passing
through the lot in question.
The Singian Brothers were impleaded in the trial court. In their answer, they
alleged that they did not authorize anyone to receive rentals for the disputed
lot. As their affirmative and special defenses, Defendant Singian Brothers
averred that the complaint of petitioner stated no cause of action because,
being apparent and discontinuous, the right of way cannot be acquired by
prescription. Petitioner was not a tenant of the Singian Brothers; therefore
she was not entitled to a right of pre-emption or right of redemption. Finally,
petitioner had another access to the National Highway which, however, she
closed during the pendency of the case at the trial court when she extended
the construction of her fence.[5]
The Issues
Failing to obtain relief at both the trial and respondent courts, petitioner
now submits the following issues for consideration of this Court:
I. In its reaffirmation of the lower courts decision, the Court of
Appeals missed to temper with human compassion of
the Art. 649 and 650 of the New Civil Code of the Phil.
which requires the presence of four requisites for a
compulsory easement of way.[6]
 II. (The) Court (of Appeals) had used in its decision all technical
and legal niceties to favor respondents, violating time-
honored and deeply-rooted Filipino values.[7]
III. With due respect, the Court (of Appeals) erred in deciding this
case in favor of the respondent despite the facts
existing at the background.[8]
IV. The Court (of Appeals) erred in stating that petitioner had an
outlet measuring two (2) feet and four (4) inches to the
national highway without passing through respondent's
property as per the commissioners report.[9]
In her Memorandum[10] dated February 26, 1993, petitioner alleges only
one issue:
Whether or not petitioner is entitled to a legal easement of right of way over
that portion of the property of respondent Rabbit?
On the other hand, private respondent raises two issues:[11]
1. Is the petitioner entitled to an easement of right of way from the private
respondents?
2. Should she be granted her desire for a right of way by way of
`pakikisama and pakikipagkapwa-tao?
After deliberating on the various submissions of the parties, the Court
holds that the issues can be condensed into two, as follows:
(1) Is petitioner legally entitled to a right of way through private respondents
property?
(2) In any event, is she entitled to such easement through the recognition
and application of the Filipino values of pakikisama and pakikipagkapwa-tao?
The Courts Ruling
The petition is devoid of merit.
First Issue: Requisites of an Easement of Right of Way
Citing Articles 649 and 650 of the Civil Code,[12] petitioner submits that
the owner of an estate may claim a compulsory right of way only after he (or
she) has established the existence of four requisites, namely: (1) the estate
is surrounded by other immovables and is without adequate outlet to a public
highway; (2) proper indemnity is paid; (3) the isolation is not due to the
proprietors own acts; and (4) the right of way claimed is at a point least
prejudicial to the servient estate and, insofar as consistent with this rule,
where the distance from the dominant estate to a public highway may be the
shortest.[13]
While petitioner may be correct in her theoretical reading of Articles 649
and 650, she nevertheless failed to show sufficient factual evidence to satisfy
their requirements. Evaluating her evidence, respondent Court ruled that
petitioner is not without adequate outlet to a public highway as follows:[14]
1. Let it be stressed that it was plaintiff who built a concrete fence on the
southern boundary of her property to separate it from the property of the
Pineda family. Worse, during the pendency of the case, she closed the 28-
inch clearance which she could use as a means to reach the National
Highway without passing through the property of defendant. If plaintiff wants
a bigger opening, then she can always destroy a portion of the concrete
fence which she erected and pass through the property of the Pineda family
which, as shown on the attached sketch on the Commissioners Report, has
an open space on the southern boundary of plaintiffs land.
2. Plaintiff maintains that once the Pineda family (fences) off their lot, plaintiff
has no more way to the National Highway.
Plaintiffs apprehensions are without basis. The Pineda family could no longer
fence off their property because plaintiff (had) already constructed a fence to
separate the two properties. And even granting that the Pineda family would
eventually fence off their land, then plaintiff could ask for an easement of
right of way from the Pineda family.
The appellate court likewise found that petitioner failed to satisfy the
third requirement because she caused her own isolation by closing her
access through the Pineda property, thus:[15]
1. Worthy of note is the fact that it was plaintiff who built a fence to separate
her property from that of the Pineda family on the southern boundary. And
she even closed the small opening causing her property to be isolated and
losing one access to the National Highway. Plaintiff thus failed to meet the
third requisite for the grant of an easement of right of way. As held by the
Hon. Supreme Court in the case of Francisco vs. Intermediate Appellate
Court, 177 SCRA 527, 534-535:
The evidence is, therefore, persuasively to the effect that the private
respondent had been granted an adequate access to the public highway
(Parada Road) through the adjacent estate of Epifania Dila even as he was
trying to negotiate a satisfactory agreement with petitioner Francisco for
another passageway through the latters property. If at the time he filed suit
against the petitioner, such access (through the property of Epifania Dila)
could no longer be used, it was because he himself had closed it off by
erecting a stone wall on his lot at the point where the passageway began for
no reason to which the record can attest except to demonstrate the isolation
of his property alleged in his complaint. But the law makes it amply clear that
an owner cannot, as respondent has done, by his own act isolate his
property from a public highway and then claim an easement of way through
an adjacent estate. The third of the cited requisites: that the claimant of a
right of way has not himself procured the isolation of his property had not
been met-indeed the respondent had actually brought about the contrary
condition and thereby vitiated his claim to such an easement. It will not do to
assert that use of the passageway through Lot 860-B was difficult or
inconvenient, the evidence being to the contrary and that it was wide enough
to be traversable by even a truck, and also because it has been held that
mere inconvenience attending the use of an existing right of way does not
justify a claim for a similar easement in an alternative location. (Underscoring
ours)
The Court of Appeals also ruled that petitioner failed to prove she made
a valid tender of the proper indemnity, to wit:[16]
2. The second requisite - that there was payment of the proper indemnity
was likewise not met by the plaintiff. Plaintiffs complaint contained no
averment that demand for the easement of right of way had been made after
payment of the proper indemnity. There was no showing that plaintiff ever
made a tender of payment of the proper indemnity for the right of way. As the
lower court said, The fact that plaintiff prays that defendant Rabbit be
ordered to sell to her the disputed premises hardly satisfies the requisite
regarding the payment of the proper indemnity.
The questions of whether (1) petitioner has another adequate outlet to
the public highway, or (2) she caused her own isolation, or (3) she made, in
fact, a tender of the proper indemnity are all issues of facts which this Court
has no authority to rule upon.[17] The Supreme Court is not a trier of facts.[18]
It is doctrinal that findings of facts of the Court of Appeals upholding
those of the trial court are binding upon this Court.[19] While there are
exceptions to this rule,[20] petitioner has not convinced us that this case falls
under one of them.
Second Issue: Application of Traditional Filipino Values
Perhaps sensing the inadequacy of her legal arguments, petitioner who
claims to be an ordinary housewife (with) x x x meager resources pleads that
those who have less in life should have more in law and that the Court
should apply the Filipino values of pakikisama and pakikipagkapwa-tao in
resolving the case.
Such appeal of petitioner is based on equity which has been aptly
described as justice outside legality. However, equity is applied only in the
absence of, and never against, statutory law or judicial rules of
procedure.[21] As found by respondent Court, petitioner is not legally entitled
to a right of way on the property of private respondent. Thus, such equitable
arguments cannot prevail over the legal findings.
There are rigorous standards to be complied with by owners of the
dominant estate before they may be granted with easement of right of
way. These standards must be strictly complied with because easement is a
burden on the property of another. Before such inconvenience may be
imposed by the Court, applicants must prove that they deserve judicial
intervention on the basis of law, and certainly not when their isolation is
caused by their own acts. In the latter case, they decide their detachment
and must bear the consequences of such choice.
WHEREFORE, in view of the foregoing, the Petition is DENIED and the
Decision dated April 30, 1992, of the respondent Court is AFFIRMED. Costs
against petitioner.
SO ORDERED.
Narvasa, C.J., (Chairman), Davide, Jr., Melo, and Francisco, JJ., concur.
28. G.R. No. L-63996 September 15, 1989
EUSEBIO FRANCISCO, petitioner, vs. INTERMEDIATE APPELLATE
COURT and CRESENCIO J. RAMOS, respondents.
Arturo Agustines for petitioner.
Padilla Law Office for private respondent.
NARVASA, J.:
Contested in the appellate proceedings at bar is the entitlement of Cresencio
J. Ramos, owner of Lot 860-A of the Malinta Estate, to an easement of right
of way through the land belonging to petitioner Eusebio Francisco, Lot 266
also of the same Malinta Estate. The Court of First Instance of Bulacan
declared Ramos to be so entitled, by judgment rendered in Civil Case No.
66-V-73. That judgment was affirmed by the Intermediate Appellate Court in
CA-G.R. No. 60968-R, promulgated on September 7, 1982. Francisco
contends that both Courts are wrong, and asks this Court to reverse them.
About the basic facts there is no dispute.
Ramos' Lot 860-A used to be a part of Lot 860 of the Malinta Estate. Lot 860
was owned by Cornelia and Frisca Dila, and had a frontage along Parada
Road measuring 51.90 meters. Adjoining Lot 860 was Lot 226, owned by
Eusebio Francisco, as aforestated; it also had a frontage along Parada Road
of 62.10 meters.
On December 3,1947, the co-owners of Lot 860 (Cornelia and Frisca Dila)
executed a deed by which an undivided one-third portion of the land was
donated to a niece, Epifania Dila, and another undivided one-third (1/3)
portion to the children of a deceased sister, Anacleta Dila, and the remaining
portion, also an undivided third, was declared to pertain exclusively to and
would be retained by Cornelia Dila. 1 The new co-owners then had Lot 860
subdivided and respectively allocated to themselves as follows: 2
Lot 860-A (2,204 sq. m.), to Cornelia Dila;
Lot 860-B (5,291 sq. m.), to Epifana Dila (the niece);
Lot 860-C (3,086 sq. m.), to Cornelia Dila also; and
Lot 860-D (5,291 sq. m.), to the heirs of Anacleta Dila the
other niece).
After this, the co-owners signed a partition agreement, 3 putting an end to
their co-ownership and assuming exclusive ownership and possession of
their respective individual shares in accordance with the subdivision plan.
The former co-owners evidently overlooked the fact that, by reason of the
subdivision, Lot 860-B of Epifania Dila came to include the entire frontage of
what used to be Lot 860 along Parada Road, and thus effectively isolated
from said road the other lots, i.e., Lots 860- A and 860-C of Cornelia Dila,
and Lot 860-D of the children of Anacleta Dila. 4
Anyway, Cornelia sold Lot 860-A (2,204 sq. m. to the sisters Marcosa,
Margarita, and Irinea Eugenio. 5 And in 1971, the Eugenio Sisters sold the
land to Cresencio J. Ramos. 6
Some months later, in March, 1972, after having set up a piggery on his
newly acquired property, Ramos had his lawyer write to Eusebio
Francisco — owner, as above mentioned, of the adjoining lot, Lot 266- to ask
for a right of way through the latter's land. Negotiations thereafter had
however failed to bring about a satisfactory arrangement. Francisco's
proposal for an exchange of land at the rate of one (1) square meter from
him to three (3) square meters from Ramos, as was supposedly the custom
in the locality, was unacceptable to Ramos. 7
Later that year, 1972, Ramos succeeded, through the intercession of
Councilor Tongco of Valenzuela, in obtaining a three-meter wide
passageway through Lot 860-B of Epifania Dila . 8 Yet in August, 1973, he
inexplicably put up a ten-foot high concrete wall on his lot, this was in August,
1973, and thereby closed the very right of way granted to him across Lot
860-B. It seems that what he wished was to have a right of passage precisely
through Francisco's land, considering this to be more convenient to him, and
he did not bother to keep quiet about his determination to bring suit, if
necessary, to get what he wanted. 9
Francisco learned of Ramos' intention and reacted by replacing the barbed-
wire fence on his lot along Parada Road with a stone wall, also in August,
1973. 10 Shortly thereafter, Francisco was served with summons and a copy
of the complaint in Civil Case No. 66-V-73 of the Court of First Instance of
Bulacan, instituted by Ramos, 11as well as a writ of preliminary mandatory
injunction directing him to remove his stone fence and keep his lot open for
Ramos' use .12
Francisco moved to dissolve the mandatory injunction. The Court appointed
a commissioner who conducted an ocular inspection of the lots in question,
Lots 860-A, 860-B and 266 and submitted a report of his findings. On the
basis of the commissioner's report, the Court issued another Order on
September 10, 1973, 13 granting Ramos —
. . . a temporary right of way over defendant's property
hereby ordering defendant to immediately remove all
obstructions existing on points 2 and 4 of Annex A [of the
Commissioner's Report] up to the second post of the stone
wall along points 2 and 3 in order that plaintiff may have a
free access to his property, upon plaintiffs filing a bond in the
sum of P2,000.00 without in any way determining by this
grant the issue or issues involved in this case, but merely as
a measure of temporary relief in the exercise of its power of
equity.
Ramos posted the required bond, and Court issued the writ of preliminary
injunction. 14
After filing his answer with counterclaim, 15 Francisco once more moved for
the setting aside of the injunctive writs on the ground that they had been
issued in excess of the Court's jurisdiction since they did more than merely
preserve the status quo, and were based on the commissioner's report which
was not only inaccurate and inconclusive but had been adopted by the Court
without hearing or according him an opportunity to comment on or object to
it. 16 By Order dated November 19, 1973, the Court dissolved the injunctions,
setting aside its Orders of August 31, and September 10, 1973. 17
Six (6) days later, however, the Court handed down its verdict, adversely to
Francisco. The dispositive part thereof reads as follows:
 In view of the foregoing premises: (1) the road right of way
prayed for by plaintiff over defendant's land, Exhibit 'A- l' is
hereby granted, plaintiff shall pay defendant the amount of
Twenty Pesos (P20.00) per square meter as indemnity or a
total of Three Hundred Fifty Pesos (P350.00) considering
that the area of Exhibit 'A-l' is 17.5 square meters; (2) the
writ for a permanent mandatory injunction is likewise granted
and defendant is consequently directed to remove
immediately the adobe fence along the road right of way as
fixed by this Court and to refrain from obstructing said
passage in any manner what ever, upon payment by the
plaintiff of the sum of Three Hundred Fifty Pesos to the
defendant, through this court; (3) upon the defendant's
failure to do so, the Sheriff is hereby directed to immediately
remove said obstructions at defendant's expenses; (4) let a
copy of the decision be served upon the Register of Deeds
of Bulacan for proper annotation of the road right of way on
defendant's title, Transfer Certificate of Title over Lot 266
upon finality of this decision.
Defendant's counterclaim for moral and exemplary damages
and attorney's fees are dismissed for lack of merit.
Francisco appealed to the Court of Appeals. 18 In its own decision
promulgated on September 7, 1982, the latter affirmed the Trial Court's
judgment, 19
and later denied Francisco's motion for
reconsideration. 20 Francisco then appealed to this Court. Francisco submits
that — 21
1) Ramos' complaint, containing no averment that demand
for the easement of right of 28 way had been made only after
payment of proper indemnity in accordance with Article 649
of the Civil Code, was dismissible for failure to state a cause
of action;
2) It was error to brush aside said statutory pre-condition in
Article 649 as of "no consequence" or "absurd" in light of "the
principle of substantial performance" in Article 1234 of the
Civil Code;
3) In view of the last paragraph of said Article 649,
Francisco's Lot 266 may not be considered a servient estate
subject to a compulsory easement of right of way in favor of
Ramos' Lot 860-A;
4) Courts are not empowered to establish judicial easements;
and
5) Ramos was not entitled to a writ of mandatory injunction
against Francisco.
In Bacolod-Murcia Milling Co., Inc. v. Capital Subdivision, Inc., 22 this Court
held that a compulsory easement of way cannot be obtained without the
presence of four (4) requisites provided for in Articles 649 and 650 of the
Civil Code, which the owner of the dominant tenement must establish, to wit:
(1) That the dominant estate is surrounded by other
immovables and has no adequate outlet to a public highway
(Art. 649, par. 1);
(2) After payment of proper indemnity (Art. 649, par. 1, end);
(3) That the isolation was not due to acts of the proprietor of
the dominant estate; and
(4) That the right of way claimed is at the point least
prejudicial to the servient estate; and insofar as consistent
with this rule, where the distance from the dominant estate to
a public highway may be the shortest. (Art. 650).
What clearly the appealed Decision overlooked or failed to accord the
significance due it is the fact already adverted to and which has never been
disputed that respondent Ramos, having already been granted access to the
public road (Parada Road) through the other adjoining Lot 860-B owned by
Epifania Dila — and this, at the time he was negotiating with petitioner for the
similar easement over the latter's Lot 266 that he now claims — inexplicably
gave up that right of access by walling off his property from the passageway
thus established. The evidence, also uncontradicted, is that said passageway
was 2.76 meters wide, or wide enough to accommodate a truck. The
surveyor who at the instance of petitioner made a survey of the premises on
September 13, 1973, shortly after Ramos had filed his complaint, verified the
existence of said passageway from the presence of tire marks found on the
scene and indicated on the sketch plan he prepared the path that it took from
said respondent's Lot 860-A through Lot 860-B to Parada Road. 23 That there
was such a passageway was also confirmed by another witness, Parada
Barrio Captain Fausto Francisco, one of those who had earlier tried to bring
petitioner and respondent to an agreement about the proposed right of way
through the property of the former. This witness declared, as already stated,
that after the negotiations had been stalled by the failure of the parties to
agree on the terms of a proposed land exchange that would have given
Ramos access to Parada Road, said respondent had been able to obtain
right of passage to the same public road over a 3-meter wide portion of Lot
860-B owned by Epifania Dila through the intercession of Councilor Tongco
of Valenzuela . 24 The presence of the tire marks indicating that the portion of
Lot 860-B where they were found had been used as a passageway was also
brought to the attention of the Trial Court at the ocular inspection conducted,
with the parties present or duly represented, on May 17, 1974. 25
The evidence is, therefore, persuasively to the effect that the private
respondent had been granted an adequate access to the public highway
(Parada Road) through the adjacent estate of Epifania Dila even as he was
trying to negotiate a satisfactory agreement with petitioner Francisco for
another passageway through the latter's property. If at the time he filed suit
against the petitioner, such access (through the property of Epifania Dila)
could no longer be used, it was because he himself had closed it off by
erecting a stone wall on his lot at the point where the passageway began for
no reason to which the record can attest except to demonstrate the isolation
of his property alleged in his complaint. But the law makes it amply clear that
an owner cannot, as respondent has done, by his own act isolate his
property from a public highway and then claim an easement of way through
an adjacent estate. The third of the cited requisites: that the claimant of a
right of way has not himself procured the isolation of his property had not
been met indeed the respondent had actually brought about the contrary
condition and thereby vitiated his claim to such an easement. It will not do to
assert that use of the passageway through Lot 860-B was dffficult or
inconvenient, the evidence being to the contrary and that it was wide enough
to be traversable by even a truck, and also because it has been held that
mere inconvenience attending the use of an existing right of way does not
justify a claim for a similar easement in an alternative location.
... the petitioner contends that since the respondent
company constructed the concrete wall blocking his ingress
and egress via the Gatchalian Avenue, the nearest, most
convenient and adequate road to and from a public highway,
he has been constrained to use as his temporary' way the
adjoining lots belonging to different persons. Said way is
allegedly 'bumpy and impassable especially during rainy
seasons because of flood waters, mud and tall 'talahib'
grasses thereon.' Moreover, according to the petitioner, the
road right of way which the private respondents referred to
as the petitioner's alternative right of way to Sucat Road is
not an existing road but has remained a proposed road as
indicated in the subdivision plan of the Sabrina Rodriguez
Lombos Subdivision. 26
The petitioner's position is not impressed with merit. ... As
borne out by the records of the case, there is a road right of
way provided by the Sabrina Rodriguez Lombos Subdivision
indicated as Lot 4133-G-12 in its subdivision plan for the
buyers of its lots. The fact that said lot is still undeveloped
and causes inconvenience to the petitioner when he uses it
to reach the public highway does not bring him within the
ambit of the legal requisite (of lack of adequate outlet). . . .To
allow the petitioner access to Sucat Road through
Gatchalian Avenue inspite of a road right of way provided by
the petitioner's subdivision for its buyers simply because
Gatchalian Avenue allows petitioner a much greater ease in
going to and from the main thoroughfare is to completely
ignore what jurisprudence has consistently maintained
through the years regarding an easement of a right of way,
that 'mere convenience for the dominant estate is not
enough to serve as its basis. To justify the imposition of this
servitude, there must be a real, not fictitious or artificial,
necessity for it. 27
On the authority of the Bacolod-Murcia ruling already referred to that all the
four requisites prescribed in Articles 649 and 650 must be established in
order to warrant the creation of a legal or compulsory easement of way, what
has already been stated as to the absence of one of those requisites is,
without going any further, already decisive of this appeal and impels a
reversal of the appealed Decision, which has clearly ignored or failed to
correctly appreciate the import of crucial facts dictating a disposition contrary
to that made therein.
Whether the Court of Appeals also erred, as the petitioner would put it, in not
dismissing the action for want of averment or showing that proper indemnity
had been pre-paid for the right of way demanded is not now inquired into.
While such a proposition would appear to be supported by the Bacolod-
Murcia ruling which in part states that:
... The Central's original complaint only makes reference to a
reasonable compensation in paragraph 14 and no more.
Assuming that such an expression can be stretched into a
manifestation that the Central is willing to pay such
compensation as may be ultimately fixed by the Court, it still
is not prepayment required by Article 649 of the Civil Code;...
reservations may with reason be held about interpreting Article 649 to require
advance payment of indemnity as a condition precedent to the filing of an
action for a compulsory right of way. The appealed Decision of the Court of
Appeals observes that:
 ... It is absurd to say that even before the complaint is filed
there must be a prior payment of the indemnity for We do not
know as yet how much such indemnity would be. If both
parties had previously agreed on such indemnity, no suit
would be essential. 28
There would, indeed, be some point in looking askance at a reading of the
law which would impute to it a strict requirement to pay "proper indemnity" in
advance of a suit the purpose of which, in addition to creating an easement,
is precisely to fix the amount of the indemnity to be paid therefor.
The question, however, is better left for consideration in a more appropriate
setting where a ruling would not constitute the mere dictum that it might be
perceived to be were it to be made here.
WHEREFORE, the appealed Decision of the Court of Appeals is
REVERSED and SET ASIDE. The complaint in Civil Case No. 66-V-73 of the
Court of First Instance of Bulacan is DISMISSED, the private respondent
declared without right to the easement sued for, and the writ of preliminary
mandatory injunction issued in said case is LIFTED. Costs against the
private respondent.
SO ORDERED.
Cruz, Gancayco, Griño-Aquino and Medialdea, JJ., concur.
29. [G.R. No. 127549. January 28, 1998]
SPOUSES CESAR and RAQUEL STA. MARIA and FLORCERFIDA STA.
MARIA, petitioners, vs. COURT OF APPEALS, and SPOUSES ARSENIO
and ROSLYNN FAJARDO, respondents.
DECISION
DAVIDE, JR., J.:
This is an appeal under Rule 45 of the Rules of Court from the
decision[1] of 18 December 1996 of the Court of Appeals in CA-G.R. CV No.
48473, which affirmed with modification the 30 June 1994 Decision[2] of
Branch 19 of the Regional Trial Court of Bulacan in Civil Case No. 77-M-92
granting the private respondents a right of way through the property of the
petitioners.
The antecedent facts, as summarized by the Court of Appeals, are as
follows:
Plaintiff spouses Arsenio and Roslynn Fajardo are the registered owners of a
piece of land, Lot No. 124 of the Obando Cadastre, containing an area of
1,043 square meters, located at Paco, Obando, Bulacan, and covered by
Transfer Certificate Title (TCT) No. T-147729 (M) of the Registry of Deeds of
Meycauayan, Bulacan (Exhibit B, p. 153 Orig. Rec.). They acquired said lot
under a Deed of Absolute Sale dated February 6, 1992 executed by the
vendors Pedro M. Sanchez, et al. (Annex A, Complaint; pp. 7-8 ibid.).
Plaintiffs aforesaid Lot 124 is surrounded by Lot 1 (Psd 45412), a fishpond
(Exh. C-5; p. 154, ibid.), on the northeast portion thereof; by Lot 126, owned
by Florentino Cruz, on the southeast portion; by Lot 6-a and a portion of Lot
6-b (both Psd-297786) owned respectively by Spouses Cesar and Raquel
Sta. Maria and Florcerfida Sta. Maria (Exhs. C-2 and C-3, ibid.), on the
southwest; and by Lot 122, owned by the Jacinto family, on the northwest.
On February 17, 1992, plaintiff spouses Fajardo filed a complaint against
defendants Cesar and Raquel Sta. Maria or Florcerfida Sta. Maria for the
establishment of an easement of right of way. Plaintiffs alleged that their lot,
Lot 124, is surrounded by properties belonging to other persons, including
those of the defendants; that since plaintiffs have no adequate outlet to the
provincial road, an easement of a right of way passing through either of the
alternative defendants properties which are directly abutting the provincial
road would be plaintiffs only convenient, direct and shortest access to and
from the provincial road; that plaintiffs predecessors-in-interest have been
passing through the properties of defendants in going to and from their lot;
that defendants mother even promised plaintiffs predecessors-in-interest to
grant the latter an easement of right of way as she acknowledged the
absence of an access from their property to the road; and that alternative
defendants, despite plaintiffs request for a right of way and referral of the
dispute to the barangay officials, refused to grant them an easement.Thus,
plaintiffs prayed that an easement of right of way on the lots of defendants be
established in their favor. They also prayed for damages, attorneys fees and
costs of suit.
Defendants, instead of filing an answer, filed a motion to dismiss (pp. 41-
45, ibid.) on the ground that the lower court has no jurisdiction to hear the
case since plaintiffs failed to refer the matter to the barangay lupon in
accordance with Presidential Decree No. 1508. The lower court, however, in
its Order dated May 18, 1992, denied said motion on the premise that there
was substantial compliance with the law.
On May 25, 1992, defendants filed a Notice of Appeal to the Supreme Court
of the questioned order of the lower court denying their motion to dismiss,
under Rule 45 of the Rules of Court (p. 54, ibid.). On June 24, 1992, the
lower court denied the notice of appeal for lack of merit (p. 86, ibid.).
In the meantime, defendants filed a petition for review on certiorari of the
lower courts Order dated May 18, 1992 (pp. 64-84, ibid.). In an Order dated
July 8, 1992, the Third Division of the Supreme Court denied said petition for
failure to comply with Revised Circular Nos. 1-88 and Circular No. 28-01 (p.
97, ibid.). Defendants motion for reconsideration was likewise denied with
finality on July 20, 1992 (p. 96, ibid.).
Consequently, defendants filed their answer to the court below where they
alleged that the granting of an easement in favor of plaintiffs would cause
them great damage and inconvenience; and that there is another access
route from plaintiffs lot to the main road through the property of Florentino
Cruz which was likewise abutting the provincial road and was being offered
for sale. By way of counterclaim, defendants prayed for damages and
attorneys fees.
The parties not having settled their dispute during the pre-trial (p.120, Orig.
Record), the court directed that an ocular inspection be conducted of the
subject property, designating the branch clerk of court as its
commissioner. In time, an Ocular Inspection Report dated December 3, 1992
(Exhs. J and J-1) was submitted. After trial on the merits, the lower court
rendered the assailed decision granting plaintiffs prayer for an easement of
right of way on defendants properties.[3]
The trial court found that based on the Ocular Inspection Report there
was no other way through which the private respondents could establish a
right of way in order to reach the provincial road except by traversing directly
the property of the petitioners. It further found that (a) no significant structure,
save for a wall or fence about three feet high, would be adversely affected; (b)
there was sufficient vacant space of approximately 11 meters between
petitioners houses; and (c) petitioners property could provide the shortest
route from the provincial road to the private respondents
property. Consequently, the trial court granted the easement prayed for by
the private respondents in a decision dated 30 June 1994,[4] whose decretal
portion reads as follows:
WHEREFORE, premises considered the Court orders that a right-of-way be
constructed on the defendants property covered by TCT No. 0-6244 of about
75 sq. meters, 25 sq. meters shall be taken from the lot of Florcerfida Sta.
Maria and 50 sq. meters from the property of Cesar Sta. Maria to be
established along lines 1-2 of lot 6-c and along lines 3-4 of lot 6-b and to
indemnify the owners thereof in the total amount of P3, 750.00 (P1, 250.00
goes to Florcerfida Sta. Maria and P2,500.00 to Cesar Sta. Maria) and to
reconstruct the fence to be destroyed in the manner it was at the time of the
filing of this action.
The petitioners seasonably appealed from the aforementioned decision
to the Court of Appeals, which docketed the case as CA-G.R. CV No. 48473.
The Court of Appeals agreed with the trial court that the private
respondents had sufficiently established the existence of the four requisites
for compulsory easement of right of way on petitioners property, to wit: (1)
private respondents property was, as revealed by the Ocular Inspection
Report, surrounded by other immovables owned by different individuals and
was without an adequate outlet to a public highway; (2) the isolation of
private respondents property was not due to their own acts, as it was already
surrounded by other immovables when they purchased it; (3) petitioners
property would provide the shortest way from private respondents property to
the provincial road, and this way would cause the least prejudice because no
significant structure would be injured thereby; and (4) the private
respondents were willing to pay the corresponding damages provided for by
law if the right of way would be granted.
Accordingly, in its decision[5] of 18 December 1996, the Court of Appeals
affirmed the trial courts decision, but modified the property valuation by
increasing it from P50 to P2,000 per square meter.
The petitioners forthwith filed this petition for review on certiorari based
on the following assignment of errors:
I. WHETHER OR NOT A COMPULSORY EASEMENT OF RIGHT OF WAY
CAN BE ESTABLISHED IN THE LIGHT OF THE DOCTRINE LAID DOWN
BY THE HON. SUPREME COURT IN COSTABELLA CORPORATION VS.
COURT OF APPEALS, 193 SCRA 333, 341 WHICH HELD THAT [FOR]
THE FAILURE OF PRIVATE RESPONDENTS TO SHOW THAT THE
ISOLATION OF THEIR PROPERTY WAS NOT DUE TO THEIR PERSONAL
OR THEIR PREDECESSORS-IN-INTERESTS OWN ACTS, THEY ARE
NOT ENTITLED TO A COMPULSORY EASEMENT OF RIGHT OF WAY.
II. WHETHER OR NOT A COMPULSORY RIGHT OF WAY CAN BE
GRANTED TO PRIVATE RESPONDENTS WHO HAVE TWO OTHER
EXISTING PASSAGE WAYS OTHER THAN THAT OF PETITIONERS AND
AN ALTERNATIVE VACANT LOT FRONTING THE PROVINCIAL ROAD
ALSO ADJACENT TO PRIVATE RESPONDENTS PROPERTY, WHICH
CAN BE USED IN GOING TO AND FROM PRIVATE RESPONDENTS
PROPERTY.
III. RESPONDENT HON. COURT OF APPEALS GRAVELY ERRED IN
MAKING A PORTION OF ITS STATEMENT OF FACTS FROM
ALLEGATIONS IN THE COMPLAINT AND NOT FROM THE EVIDENCE ON
RECORD.
IV. RESPONDENT HON. COURT OF APPEALS SERIOUSLY ERRED IN
HOLDING THAT PRIVATE RESPONDENTS HAVE NO ADEQUATE
OUTLET TO A PUBLIC HIGHWAY WHICH INFERENCE DRAWN FROM
FACTS WAS MANIFESTLY MISTAKEN.[6]
The first, second, and fourth assigned errors involve questions of
fact. Settled is the rule 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.[7]
A perusal of the pleadings and the assailed decision of the Court of
Appeals, as well as of the decision of the trial court, yields no ground for the
application of any of the foregoing exceptions. All told, the findings of fact of
both courts satisfied the following requirements for an estate to be entitled to
a compulsory servitude of right of way under the Civil Code, to wit:
1. the dominant estate is surrounded by other immovables and has
no adequate outlet to a public highway (Art. 649, par. 1);
2. there is payment of proper indemnity (Art. 649, par. 1);
3. the isolation is not due to the acts of the proprietor of the
dominant estate (Art. 649, last par.); and
4. the right of way claimed is at the point least prejudicial to the
servient estate; and insofar as consistent with this rule,
where the distance from the dominant estate to a public
highway may be the shortest (Art. 650).[8]
As to such requisites, the Court of Appeals made the following
disquisitions:
Anent the first requisite, there is no dispute that the plaintiffs-appellees
property is surrounded by other immovables owned by different
individuals. The ocular inspection report submitted to the lower court reveals
that:
The property of the plaintiffs, spouses Arsenio and Roslynn Fajardo, is
completely surrounded with adobe fence without any point of egress and
ingress to the national road. Said plaintiffs property containing an area of
1,043 square meters and covered by OCT No. 0-6244 of the Registry of
Deeds of Bulacan was situated directly behind defendants property which
abuts the national road. Defendants, spouses Cesar and Racquel Sta. Maria,
are the absolute owners of the parcel of land with an area of 537 square
meters and embraced under TCT No. T-37.763(M) situated on the left side
abutting the national road with their house thereon made of wood and hollow
blocks, while defendant Florcerfida Sta. Maria is the absolute owner of a
parcel of land with a similar area of 537 square meters and covered by TCT
No. T-37.762(M) situated on the right side and likewise abutting the national
road with an impressive house thereon of modern vintage made of strong
materials. As depicted in the rough sketch hereto attached, plaintiffs have
absolutely no means of ingress and egress to their property as the same is
completely isolated by properties owned by other persons. On the left side is
the property of Florentino Cruz, on the right side is the property reportedly
owned by the Jacintos; and on the front portion are properties owned by
defendants. x x x
(Ocular Inspection Report, p. 135, Orig. Rec.)
Plaintiffs-appellees property is likewise without adequate outlet to a public
highway. The existing passage way for people (daang tao) at the back of
plaintiffs-appellees property leading to the provincial road (TSN, May 17,
1993, p. 12) cannot be considered an adequate outlet for purposes of
establishing an easement. Article 651 of the Code provides that (t)he width of
the easement of right of way shall be that which is sufficient for the needs of
the dominant estate, and may accordingly be changed from time to
time. Thus in the case of Larracas vs. Del Rio (37 Official Gazette 287), this
Court had occasion to rule that it is not necessary for a person, like his
neighbors, to content himself with a footpath and deny himself the use of an
automobile. So in an age when motor cars are a vital necessity, the dominant
proprietor has a right to demand a driveway for his automobile, and not a
mere lane or pathway (Cited in Tolentino, ibid., p. 391).
The second requisite for the establishment of an easement of right way, i.e.,
payment of indemnity, is likewise present in this case. Plaintiff-appellee
spouse Roslynn Fajardo testified on direct examination that they are willing
to pay the corresponding damages provided for by law if granted the right of
way (TSN, November 5, 1992, p. 11).
The third requisite is that the isolation of plaintiffs-appellees property should
not have been due to their own acts. In the case under consideration, the
isolation of their lot is not due to plaintiffs acts. The property they purchased
was already surrounded by other immovables leaving them no adequate
ingress or egress to a public highway.
Going now to the fourth requisite of least prejudice and shortest distance, We
agree with the lower court that this twin elements have been complied with in
establishing the easement of right of way on defendants-appellants
properties.
It has been commented upon that where there are several tenements
surrounding the dominant estate, and the easement may be established on
any of them, the one where the way is shortest and will cause the least
damage should be chosen. But if these two circumstances do not concur in a
single tenement, the way which will cause the least damage should be used,
even if it will not be the shortest. And if the conditions of the various
tenements are the same, all the adjoining owners should be cited and
experts utilized to determine where the easement shall be established
(Tolentino, ibid., pp. 108-109, citing Casals Colldecarrera).
In the case at bar, the ocular inspection disclosed that there are three options
open to the plaintiffs-appellees as a route to reach the national road, to wit:
(1) To traverse directly through defendants property which is the shortest
route of approximately 20 to 25 meters away from the national road;
(2) To purchase a right of way from the adjoining property of Florentino Cruz
on the left side of their property; and
(3) To negotiate with Jacinto family on the right side of their property.
In all instances, no significant structures would be adversely affected. There
is sufficient vacant space between defendants houses of approximately 11
meters. The distance of defendant Florcerfidas house with the adjoining
adobe wall separating that of the property of defendants Cesar and Racquel
Sta. Maria is about 4 meters, while the space between the adobe wall and
that of the latters house is about 7 meters or a total of 11 meters vacant
space for purposes of a right of way. On the other hand, plaintiffs may
negotiate with a right of way with Florentino Cruz on the left side of their
property although the same is quite circuitous. Lastly, the option through the
property of the Jacinto on the right side is very circuitous and longer. The
route involves a total of about 50 yards as it has to go straight to the right of
about 35 yards and turn left of about another 15 yards before reaching the
common right of way.
(Ocular Inspection report, pp. 135-136, ibis.)
Among the three (3) possible servient estates, it is clear that defendants-
appellants property would afford the shortest distance from plaintiffs-
appellees property to the provincial road.Moreover, it is the least prejudicial
since as found by the lower court, (i)t appears that there would be no
significant structures to be injured in the defendants property and the right-of-
way to be constructed thereon would be the shortest of all the alternative
routes pointed to by the defendants (p. 4, RTC, Decision; p. 223, ibid.).
Petitioners reliance on Costabella Corporation v. Court of Appeals[9] to
support their first assigned error is misplaced. In said case we reversed the
decision of the Court of Appeals granting a compulsory easement of a right
of way to the private respondents therein because of the absence of any
showing that the private respondents had established the existence of the
four requisites mandated by law. As to the third requisite, we explicitly
pointed out; thus: Neither have the private respondents been able to show
that the isolation of their property was not due to their personal or their
predecessors-in-interest's own acts. In the instant case, the Court of Appeals
have found the existence of the requisites. The petitioners, however, insist
that private respondents predecessors-in-interest have, through their own
acts of constructing concrete fences at the back and on the right side of the
property, isolated their property from the public highway. The contention
does not impress because even without the fences private respondents
property remains landlocked by neighboring estates belonging to different
owners.
Under the second and fourth assigned errors, the petitioners try to
convince us that there are two other existing passage ways over the property
of Cruz and over that of Jacinto, as well as a daang tao, for private
respondents use. Our examination of the records yields otherwise. Said lots
of Cruz and Jacinto do not have existing passage ways for the private
respondents to use. Moreover, the Ocular Inspection Report[10] reveals that
the suggested alternative ways through Cruzs or Jacintos properties are
longer and circuitous than that through petitioners property. This is also clear
from the Sketch Plan[11] submitted by the private respondents wherein it is
readily seen that the lots of Cruz and Jacinto are only adjacent to that of
private respondents unlike that of petitioners which is directly in front of
private respondents property in relation to the public highway.
Under Article 650 of the Civil Code, the easement of right of way shall
be established at the point least prejudicial to the servient estate, and, insofar
as consistent with this rule, where the distance from the dominant estate to a
public highway may be the shortest. Where there are several tenements
surrounding the dominant estate, and the easement may be established on
any of them, the one where the way is shortest and will cause the least
damage should be chosen.[12] The conditions of least damage and shortest
distance are both established in one tenement -- petitioners property.
As to the daang tao at the back of private respondents property, it must
be stressed that under Article 651 the width of the easement of right of way
shall be that which is sufficient for the needs of the dominant estate, and may
accordingly be changed from time to time. Therefore, the needs of the
dominant estate determine the width of the easement.[13] The needs of
private respondents property could hardly be served by this daang tao
located at the back and which is bordered by a fishpond.[14]
The third assigned error is without basis and is nothing but a misreading
of the challenged decision. The Court of Appeals did not declare as
established facts the allegations of the complaint referred to by the
petitioner. It merely made a brief summary of what were alleged in the
complaint as part of its narration of the antecedents of the case on appeal.
WHEREFORE, the instant petition for review is DENIED and the
challenged decision of the Court of Appeals is AFFIRMED in toto.
Costs against petitioners.
SO ORDERED.
Bellosillo, Vitug, and Kapunan, JJ., concur.
30. G.R. No. 77628 March 11, 1991
TOMAS ENCARNACION, petitioner, vs. THE HONORABLE COURT OF
APPEALS and THE INTESTATE ESTATE OF THE LATE EUSEBIO DE
SAGUN and THE HEIRS OF THE LATE ANICETA MAGSINO VIUDA DE
SAGUN,* respondents.
Esteban M. Mendoza for petitioner.
Oscar Gozos for private respondents.
FERNAN, C.J.:
Presented for resolution in the instant petition for review is the not-so-usual
question of whether or not petitioner is entitled to a widening of an already
existing easement of right-of-way. Both the trial court and the Appellate Court
ruled that petitioner is not so entitled, hence the recourse to this Court. We
reverse.
The facts are undisputed.
Petitioner Tomas Encarnacion and private respondent Heirs of the late
Aniceta Magsino Viuda de Sagun are the owners of two adjacent estates
situated in Buco, Talisay, Batangas. ** Petitioner owns the dominant estate
which has an area of 2,590 square meters and bounded on the North by
Eusebio de Sagun and Mamerto Magsino, on the south by Taal Lake, on the
East by Felino Matienzo and on the West by Pedro Matienzo. Private
respondents co-own the 405-square-meter servient estate which is bounded
on the North by the National Highway (Laurel-Talisay Highway), on the South
by Tomas Encarnacion, on the East by Mamerto Magsino and on the West
by Felipe de Sagun. In other words, the servient estate stands between the
dominant estate and the national road.
Prior to 1960, when the servient estate was not yet enclosed with a concrete
fence, persons going to the national highway just crossed the servient estate
at no particular point. However, in 1960 when private respondents
constructed a fence around the servient estate, a roadpath measuring 25
meters long and about a meter wide was constituted to provide access to the
highway. One-half meter width of the path was taken from the servient estate
and the other one-half meter portion was taken from another lot owned by
Mamerto Magsino. No compensation was asked and non was given for the
portions constituting the pathway.1
It was also about that time that petitioner started his plant nursery business
on his land where he also had his abode. He would use said pathway as
passage to the highway for his family and for his customers.
Petitioner's plant nursery business through sheer hard work flourished and
with that, it became more and more difficult for petitioner to haul the plants
and garden soil to and from the nursery and the highway with the use of
pushcarts. In January, 1984, petitioner was able to buy an owner-type jeep
which he could use for transporting his plants. However, that jeep could not
pass through the roadpath and so he approached the servient estate owners
(Aniceta Vda. de Sagun and Elena Romero Vda. de Sagun) and requested
that they sell to him one and one-half (1 1/2) meters of their property to be
added to the existing pathway so as to allow passage for his jeepney. To his
utter consternation, his request was turned down by the two widows and
further attempts at negotiation proved futile.
Petitioner then instituted an action before the Regional Trial Court of
Batangas, Branch 6 (Tanauan) to seek the issuance of a writ of easement of
a right of way over an additional width of at least two (2) meters over the De
Saguns' 405-square-meter parcel of land.2
During the trial, the attention of the lower court was called to the existence of
another exit to the highway, only eighty (80) meters away from the dominant
estate. On December 2, 1985, the lower court rendered judgment dismissing
petitioner's complaint. It ruled:
 It is clear, therefore, that plaintiff at present has two outlets to the
highway: one, through the defendants' land on a one meter wide
passageway, which is bounded on both sides by concrete walls and
second, through the dried river bed eighty meters away. The plaintiff
has an adequate outlet to the highway through the dried river bed
where his jeep could pass.
The reasons given for his claim that the one-meter passageway
through defendants' land be widened to two and one-half meters to
allow the passage of his jeep, destroying in the process one of the
concrete fences and decreasing defendants' already small parcel to
only about 332.5 square meters, just because it is nearer to the
highway by 25 meters compared to the second access of 80 meters
or a difference of only 65 meters and that passage through
defendants' land is more convenient for his (plaintiffs) business and
family use are not among the conditions specified by Article 649 of
the Civil Code to entitle the plaintiff to a right of way for the passage
of his jeep through defendant's land.3
On appeal, the Court of Appeals affirmed the decision of the trial court on
January 28, 1987 and rejected petitioner's claim for an additional easement.
In sustaining the trial court, the Court of Appeals opined that the necessity
interposed by petitioner was not compelling enough to justify interference
with the property rights of private respondents. The Appellate Court took into
consideration the presence of a dried river bed only eighty (80) meters away
from the dominant estate and conjectured that petitioner might have actually
driven his jeep through the river bed in order to get to the highway, and that
the only reason why he wanted a wider easement through the De Sagun's
estate was that it was more convenient for his business and family needs.
After evaluating the evidence presented in the case, the Court finds that
petitioner has sufficiently established his claim for an additional easement of
right of way, contrary to the conclusions of the courts a quo.
While there is a dried river bed less than 100 meters from the dominant
tenement, that access is grossly inadequate.1âwphi1 Generally, the right of
way may be demanded: (1) when there is absolutely no access to a public
highway, and (2) when, even if there is one, it is difficult or dangerous to use
or is grossly insufficient. In the present case, the river bed route is traversed
by a semi-concrete bridge and there is no ingress nor egress from the
highway. For the jeep to reach the level of the highway, it must literally jump
four (4) to five (5) meters up. Moreover, during the rainy season, the river
bed is impassable due to the floods. Thus, it can only be used at certain
times of the year. With the inherent disadvantages of the river bed which
make passage difficult, if not impossible, it is if there were no outlet at all.
Where a private property has no access to a public road, it has the right of
easement over adjacent servient estates as a matter of law.4
With the non-availability of the dried river bed as an alternative route to the
highway, we transfer our attention to the existing pathway which straddles
the adjoining properties of the De Sagun heirs and Mamerto Magsino.
The courts below have taken against petitioner his candid admission in open
court that he needed a wider pathway for the convenience of his business
and family. (TSN, August 2, 1985, pp. 24-26). We cannot begrudge petitioner
for wanting that which is convenient. But certainly that should not detract
from the more pressing consideration that there is a real and compelling
need for such servitude in his favor.
Article 651 of the Civil Code provides that "(t)he width of the easement of
right of way shall be that which is sufficient for the needs of the dominant
estate, and may accordingly be changed from time to time." This is taken to
mean that under the law, it is the needs of the dominant property which
ultimately determine the width of the passage. And these needs may vary
from time to time. When petitioner started out as a plant nursery operator, he
and his family could easily make do with a few pushcarts to tow the plants to
the national highway. But the business grew and with it the need for the use
of modern means of conveyance or transport. Manual hauling of plants and
garden soil and use of pushcarts have become extremely cumbersome and
physically taxing. To force petitioner to leave his jeepney in the highway,
exposed to the elements and to the risk of theft simply because it could not
pass through the improvised pathway, is sheer pigheadedness on the part of
the servient estate and can only be counter-productive for all the people
concerned. Petitioner should not be denied a passageway wide enough to
accomodate his jeepney since that is a reasonable and necessary aspect of
the plant nursery business.
We are well aware that an additional one and one-half (1 1/2) meters in the
width of the pathway will reduce the servient estate to only about 342.5
square meters. But petitioner has expressed willingness to exchange an
equivalent portion of his land to compensate private respondents for their
loss. Perhaps, it would be well for respondents to take the offer of petitioner
seriously.5 But unless and until that option is considered, the law decrees that
petitioner must indemnify the owners of the servient estate including
Mamerto Magsino from whose adjoining lot 1/2 meter was taken to constitute
the original path several years ago. Since the easement to be established in
favor of petitioner is of a continuous and permanent nature, the indemnity
shall consist of the value of the land occupied and the amount of the damage
caused to the servient estate pursuant to Article 649 of the Civil Code which
states in part:
Art. 649. The owner, or any person who by virtue of a real right may
cultivate or use any immovable, which is surrounded by other
immovables pertaining to other persons and without adequate outlet
to a public highway, is entitled to demand a right of way through the
neighboring estates, after payment of the proper indemnity.
Should this easement be established in such a manner that its use
may be continuous for all the needs of the dominant estate,
establishing a permanent passage, the indemnity shall consist of the
value of the land occupied and the amount of the damage caused to
the servient estate.
xxx xxx xxx
WHEREFORE, in conformity with the foregoing discussion, the appealed
decision of the Court of Appeals dated January 28, 1987 is REVERSED and
SET ASIDE. Petitioner Tomas Encarnacion is hereby declared entitled to an
additional easement of right of way of twenty-five (25) meters long by one
and one-half (1 1/2) meters wide over the servient estate or a total area of
62.5 square meters after payment of the proper indemnity.
SO ORDERED.
Gutierrez, Jr., Feliciano, Bidin and Davide, Jr., JJ., concur.
31. [G.R. No. 110067. March 13, 1997]
MA. LINDA T. ALMENDRAS, petitioner, vs. THE COURT OF APPEALS,
URCICIO TAN PANG ENG and FABIANA YAP, respondents.
DECISION
MENDOZA, J.:
This is a petition to review the decision of the Court of Appeals,
reversing the decision of the Regional Trial Court and dismissing petitioners
complaint for the establishment of a right of way.
Petitioner is the registered owner of a parcel of land, covered by TCT
No. 91180 of the Register of Deeds of Cebu and designated as Lot-B of the
subdivision plan Psd-163902, in Banilad, Cebu. The land is bounded on the
north and on the east by lots owned by private respondents Tan Pang Eng
and Fabiana Yap, on the south by the lot owned by Celedonio Bongo, and on
the west by the properties of Tomas Opone and Zosimo Opone.
About 9.74 meters of the western boundary of petitioners land abuts an
existing private road, 6.00 meters wide, which passes through the lots of
Tomas Opone, Vicente Lao, Manuel Opone, Luis Sison, and Silvestre Opone
and leads to another private road located on the property of Bienvenido
Tudtud which in turn connects to the provincial road.
Sometime in September, 1987, private respondents began building a
concrete wall on his property on the northern and eastern sides of petitioners
lot. For this reason, petitioner wrote private respondents on September 15,
1987 offering to buy a portion of the latters lot, 17.45 meters long and 3
meters wide, so that petitioner could have access to the provincial road. But
her request was denied by private respondents on the ground that there was
an existing private road on the western side of petitioners property providing
adequate outlet to the provincial road. Private respondents claimed that
granting petitioners request would greatly reduce the value of his property, as
the proposed right of way cuts across the middle of the property.
Shortly thereafter, in January 1988, Celedonio Bongo also fenced his
property, thus closing off the southern boundary of petitioners lot.
On January 29, 1988, petitioner brought this action in the Regional Trial
Court of Cebu, Branch 16 for the establishment of a right of way (CEB-6607)
through private respondents land.
Zosimo Opone subsequently closed off the western side of petitioners
property by erecting a fence on his lot, with the result that petitioners
property became inaccessible.
After trial, the trial court rendered judgment for petitioner, granting her a
right of way through 57.35 square meters of private respondents property,
upon payment by her of P11,470.00 as indemnity. Although there was a
private road on the western and southern sides of her lot, the trial court ruled
that the easements were constituted for the owners of the lots through which
the private road passes and petitioner would have to negotiate with them
individually to be allowed to use the private road herself. Moreover, the road
had been closed on petitioners western boundary by Zosimo Opone.
Private respondents appealed. On January 29, 1993, the Court of
Appeals rendered its decision, reversing the trial court and holding that the
road around petitioners lot on its western and southern boundaries was an
adequate outlet for petitioner to the provincial road. This private road has a
width of 6.0 meters, which allows the passage of a cargo truck, and a length
of only 149 meters. Although the road is a private one, the appellate court
ruled that the designation of the beneficiaries of the easement in the titles of
the lots was neither specific nor exclusive, that there was no reason for
petitioner not to negotiate with Zosimo Opone before bringing this case, and
that the closure by Zosimo Opone of the western side of petitioners lot was
contrary to P.D. No. 1529, 50 because it was done without the approval of
the Regional Trial Court as required therein. In any event, it was held that
mere inconvenience to thepetitioner in negotiating with numerous parties for
whose benefit the easement was established was not a reason for granting
petitioner an easement through private respondents property.
Petitioner filed a motion for reconsideration but her motion was denied
for having been filed late and for lack of merit. Hence this petition.
The preliminary question is whether petitioners motion for
reconsideration was filed within the 15-day period prescribed by the Rules for
filing such motion or appealing the decision of the Court of Appeals to this
Court. It appears that a copy of the decision of the appellate court was
served on petitioners counsel on February 10, 1993, so that she had until
February 25 within which to file a motion for reconsideration. However,
February 25, 1993 had been declared a special holiday in commemoration of
the EDSA people power revolution. Hence, petitioner, in accordance with 28
of the Administrative Code of 1987, had until the next day, February 26, 1993,
to file her motion, which she did. Her motion was thus timely filed.
Petitioner contends that the appellate court erred in dismissing her
complaint because both the Opone and Tudtud roads are private roads
which were built for the benefit only of those lots through which the roads
pass and, as such, cannot be considered adequate outlets within the
contemplation of Art. 649 of the Civil Code. The roads not being adequate
outlets, Tan was bound under the law to open up a right of way for her
through his property.
The issue in this case is whether or not petitioner is entitled to a right of
way through private respondents property. We hold that she has failed to
prove that she has a right to the establishment of such an easement through
private respondents property.
There is no dispute that the road abutting the western boundary of
petitioners lot, known as the Opone road, is an existing, passable, private
road which connects to another road, the Tudtud road, on the southern side
of petitioners lot. This road leads to the Cebu-Banilad Cadre Provincial Road
located on the eastern side of petitioners lot.
It appears that the lots traversed by the private road originally
constituted only one lot, that is, Lot 1 of the subdivision plan PSU-89847,
registered under TCT No. 55684 in the name of the Opone siblings. In May
1979, this lot was subdivided into seven lots, namely, Lot 1-A to Lot 1-G. A
right of way was constituted running almost the entire length of the eastern
boundary of all these lots, beginning with Lot 1-G, which belongs to Zosimo
Opone, through Lot 1-A which belongs to Silvestre Opone. The servitude
was annotated on the transfer certificates of title covering the seven lots, the
annotations reading substantially as follows:
subject to a road right-of-way from point 1 to point 4 passing
through lots 1-A to 1-G which is on the eastern side
Petitioners property abuts 9.74 meters of the aforesaid right of way. As
already stated, the Opone road connects to another right of way on the
property of Bienvenido Tudtud (the Tudtud rad). This right of way was
constituted on July 4, 1983 by Bienvenido Tudtud in favor of the individual
owners of Lot 1-A to Lot 1-G by virtue of an instrument entitled Easement of
Right of Way[1] which document reads in part:
Now, THEREFORE, for and in consideration of the above premises
and as agesture of his love an service to his fellowmen particularly
his neighbors, the SERVIENT ESTATE hereby and these presents,
agree, allow and permit the DOMINANT ESTATE to establish and
have a permanent easement of right-of-way over his property
described under paragraph 1 hereof but limited to aportion situated
throughout the whole length of the southern side thereof
asindicated in the plan hereto attached as Annex A, . . . (Emphasis
added)
In holding that petitioners right of way should be constituted on the
properties on the western and southern boundaries of petitioners lot, instead
of through the land of private respondents as the trial court ruled, the Court of
Appeals pointed to the fact that the Tudtud and the Opone roads already
constitute permanent easements. It held that although the Tudtud easement
was constituted by naming the owners of the individual lots, the annotation of
the easement nevertheless categorically states that the easement is
established as a gesture of [Bienvenido Tudtuds] love and service to his
fellowmen, which, the appellate court interpreted to mean for the benefit of
the public in general.
To begin with, the owner of a landlocked property has the right to
demand a right of way through the neighboring estates.[2] The easement
must be established at the point which is least prejudicial to the servient
estate and, whenever possible, the shortest to the highway.[3] If these two
conditions exist on different properties, the land where establishment of the
easement will cause the least prejudice should be chosen. Thus, it has been
held that where the easement may be established on any of several
tenements surrounding the dominant estate, the one where the way
is shortest and will cause the least damage should be chosen. However, . . .
if these two (2) circumstances do not concur in a single tenement, the way
which will cause the least damage should be used, even if it will not be the
shortest. [2 ARTURO M. TOLENTINO, CIVIL CODE 374 (1974)][4]
In the case at bar, the trial court ruled that the easement should be
constituted through the land of private respondents on the eastern side
because it would be the shortest way to the provincial road, being only 17.45
meters long, compared to 149.22 meters if the easement was constituted on
the Opone and Tudtud roads on the western and southern sides of
petitioners land.
 On the other hand, as already pointed out, the Court of Appeals, in
pointing to the longer way, considered the fact that this was already existing
and does not preclude its use by other parties than the individual owners of
Lot 1-A to Lot 1-G and the owners of the land on which the connecting
Tudtud road is found.
The way may be longer and not the most direct way to the provincial
road, but if the establishment of the easement in favor of petitioner on this
roads will cause the least prejudice, then the easement should be constituted
there. This seems to be reasoning of the Court of Appeals. However, this can
only be determined if the several lot owners (i.e., the Opones and their
buyers and those of Bienvenido Tudtud) are before the court, for the
determination of the point least prejudicial to the owners of servient estates
(if there are two or more possible sites for an easement) requires a
comparative evaluation of the physical conditions of the estates. It is not
possible to determine whether the estates which would be least prejudiced
by the easement would be those of the owners of the Opone and Tudtud
properties because they have not been heard. Although evidence concerning
the condition of their estates has been presented by private respondents, it is
impossible to determine with certainty which estate would be least prejudiced
by the establishment of an easement for petitioner until these parties have
been heard. Any decision holding them liable to bear the easement would not
be binding on them since they are not parties to this action.
Accordingly, the decisions of the Court of Appeals and of the Regional
Trial Court should be set aside and this case remanded to the trial court so
that private respondents may file a third-party complaint against the owners
of servient estates through whose lands they believe the right of way sought
by petitioner should be established and then prove their claim. On the basis
of the evidence of all parties concerned the trial court should render a new
decision.
WHEREFORE, the decision of the Court of Appeals and that of the
Regional Trial Court are SET ASIDE and this case is REMANDED to the
Regional Trial Court for further proceedings in accordance with this decision.
SO ORDERED.
Regalado, (Chairman), Romero, Puno, and Torres Jr., JJ., concur.
32. [G.R. No. 125339. June 22, 1998]
CRESENCIA CRISTOBAL, ROBERTO MAKIMKIM, DAMASO MAKIMKIM,
SPOUSES SALVADOR HERMALINO and PONCIANA MAKIMKIM,
MILAGROS MAKIMKIM, REMEDIOS MAKIMKIM, SPOUSES FRANCISCO
ESTANISLAO and FLORDELIZA MAKIMKIM, ERLINDA MAKIMKIM,
JOSE MAKIMKIMand GINA MAKIMKIM, Petitioners, vs. COURT OF
APPEALS, CESAR LEDESMA, INC., SPOUSES JESUS C. PACIONE and
LERMA B. PACIONE, Respondents.
DECISION
BELLOSILLO, J.:
This petition for review seeks the reversal of the decision of respondent
Court of Appeals of 16 January 1996 in CA-G.R. CV Case No. 37273,
"Cresencia Cristobal, et al. v. Cesar Ledesma, Inc., et al.,"[1] which affirmed in
toto the decision of the RTC-Br. 81, Quezon City,[2] dismissing herein
petitioners complaint for easement of right of way, and the Resolution of 14
June 1996 denying their motion for reconsideration.
Petitioners own a house and lot situated at No. 10 Visayas Avenue
Extension, Quezon City, where they have been residing from 1961 to the
present. Respondent Cesar Ledesma, Inc., on the other hand, is the owner
of a subdivision at Barrio Culiat along Visayas Avenue which once included
the disputed residential lots, Lot 1 and Lot 2, with areas of 164 square meters
and 52 square meters, respectively, located adjacent to petitioners
property. Lots 1 and 2 were originally part of a private road known as Road
Lot 2 owned exclusively by Cesar Ledesma, Inc. Petitioners were using Road
Lot 2 in going to and from the nearest public road. When Visayas Avenue
became operational as a national road in 1979, Cesar Ledesma, Inc., filed a
petition before the RTC of Quezon City to be allowed to convert Road Lot 2
into residential lots.[3] The petition was granted, hence, Road Lot 2 was
converted into residential lots designated as Lot 1 and Lot 2. Subsequently,
Cesar Ledesma, Inc., sold both lots to Macario Pacione in whose favor
Transfer Certificates of Title were correspondingly issued. In turn, Macario
Pacione conveyed the lots to his son and daughter-in-law, respondent
spouses Jesus and Lerma Pacione.
When the Pacione spouses, who intended to build a house on Lot 1,
visited the property in 1987, they found out that the lot was occupied by a
squatter named Juanita Geronimo and a portion was being used as a
passageway by petitioners to and from Visayas Avenue. Accordingly, the
spouses complained about the intrusion into their property to the Barangay
Office. At the barangay conciliation proceeding, petitioners offered to pay for
the use of a portion of Lot 1 as passageway but the Pacione spouses
rejected the offer. When the parties failed to arrive at an amicable settlement,
the spouses started enclosing Lot 1 with a concrete fence.
 Petitioners protested the enclosure alleging that their property was
bounded on all sides by residential houses belonging to different owners and
had no adequate outlet and inlet to Visayas Avenue except through the
property of the Paciones. As their protests went unheeded, petitioners
instituted an action for easement of right of way with prayer for the issuance
of a temporary restraining order (TRO).
On 3 June 1987 the trial court issued a TRO directing the Pacione
spouses to cease and desist from fencing the disputed property. The
Paciones objected arguing that petitioners were not entitled to a TRO since
they showed no valid basis for its issuance, and that petitioners had no
cause of action against respondents because there were actually two (2)
accessible outlets and inlets - a pathway right in front of their gate leading
towards an asphalted 5-meter road to the left, and across an open space to
the right adjacent to respondents lot likewise leading to Visayas Avenue.
At the instance of the parties, the trial court ordered an ocular inspection
of the property. A Board of Commissioners was constituted for that purpose
composed of representatives chosen by the parties, with Deputy Sheriff
Florencio D. Dela Cruz, Jr., as representative of the court.
On 3 January 1990 Deputy Sheriff Dela Cruz, Jr., submitted his
Report[4] relative to the ocular inspection on the litigated lots -
x x x there is another way from the Visayas Ave. to the plaintiffs lot existing at
the time of the ocular inspection. Plaintiffs can use the street originating from
Visayas Avenue, identified as Ma. Elena St., which is about 2.5 m. in width
and about 150 m. in length up to an intersection, meeting a private road,
which is about 100 meters in length, that ends at the lower portion of the right
side of the adjacent vacant lot previously identified, and at the back of a lot
with concrete fence located at the back of the plaintiffs property. From that
point the plaintiff must enter the adjacent vacant lot (entry to the said lot is
still possible during the ocular inspection because the barbed wires were not
properly placed) to reach a gate at the side of the plaintiffs lot, about 16 m.
from the end of the private road, allegedly used by the plaintiffs before the
adjacent lot was enclosed by barbed wires. According to Atty. Mendoza,
counsel for the defendants, that gate no longer exist(ed) at the time of the
ocular inspection.
As may be observed from the above report, only one outlet was
indicated by Sheriff Dela Cruz, Jr. The other outlet across an open space to
the right referred to by the Pacione spouses was not reflected
thereon. However, on the basis of the report as well as the testimonial and
documentary evidence of the parties, the trial court dismissed the complaint
holding that one essential requisite of a legal easement of right of way was
not proved, i.e., the absence of an alternative adequate way or outlet to a
public highway, in this case, Visayas Avenue.[5]
Petitioners appealed to the Court of Appeals arguing that the trial court
erred in finding that they failed to sufficiently establish the essential fact that
from their property no adequate outlet or access to a public highway existed;
and, that the conversion of the Road Lot into two (2) residential lots by Cesar
Ledesma, Inc., was violative of PD No. 957, hence illegal, and the titles
issued as a consequence of the conversion were null and void.
On 16 January 1996 the Court of Appeals rendered its assailed decision
affirming the findings of the trial court -
The burden of proving the existence of the requisites of easement of right of
way lies on the owner of the dominant estate. In the case at bar, plaintiff-
appellants failed to prove that there is no adequate outlet from their property
to a public highway. Convenience of the dominant estate is not a gauge for
the grant of compulsory right of way. The true standard for the grant of the
legal right is adequacy. Hence, when there is already an existing adequate
outlet from the dominant estate to a public highway, as in this case, even if
the outlet, for one reason or another, be inconvenient, the need to open up
another servitude is entirely unjustified. To justify the imposition of an
easement of right of way, there must be real, not fictitious or artificial
necessity for it. A right of way is legally demandable, but the owner of the
dominant estate is not at liberty to impose one based on arbitrary choice. Art.
650 of the Civil Code provides for the criteria in the establishment of such
easement but it has been settled that the criterion of least prejudicial prevails
over shortest distance. Each case must be weighed according to its
individual merits and judged according to the sound discretion of the
court (Costabella Corporation v. Court of Appeals, G.R. No. 80511, 193
SCRA 333 [1991]).
The second assigned error has no legal leg to stand on since plaintiff-
appellants cannot just introduce a new issue to an already settled one,
especially for the first time on appeal.
Their motion for reconsideration having been denied, petitioners now
come to us with the following assignment of errors: First, the Court of
Appeals erred in applying the doctrine in Costabella, considering that in the
instant case the four (4) requisites that must be complied with by an owner of
the dominant estate in order to validly claim a compulsory right of way have
been clearly established by petitioners, contrary to the Decision appealed
from, and that the facts in Costabella are not the same as in the present
case. Second, the Court of Appeals seriously erred in holding that the
question of legality or illegality of the conversion of Road Lot 2 into two (2)
residential lots by the Cesar Ledesma, Inc., is a new issue raised for the first
time on appeal, because such issue appeared in the complaint filed before
the trial court.
 Quite noticeably, petitioners first assigned error is essentially factual in
nature, i.e., it merely assails the factual findings of both the Court of Appeals
and the trial court. Basic is the rule in this jurisdiction that only questions of
law may be raised in a petition for review under Rule 45 of the 1997 Rules of
Civil Procedure. The jurisdiction of the Supreme Court in cases brought to it
from the Court of Appeals is limited to reviewing errors of law, the findings of
fact of the appellate court being conclusive.[6] We have emphatically declared
that it is not the function of this Court to analyze or weigh such evidence all
over again, its jurisdiction being limited to reviewing errors of law that may
have been committed by the lower court.[7]
Petitioners insist that their petition raises a question of law, that is, the
correctness of the appellate courts ruling that one who has an existing
passageway, however inconvenient that passageway may be, is no longer
entitled to an easement of right of way.
We do not agree. Questions of law are those that do not call for any
examination of the probative value of the evidence presented by the
parties.[8] In the instant case, petitioners' assignment of errors would have
this Court go over the facts because it necessarily entails an examination of
the evidence and its subsequent re-evaluation to determine whether
petitioners indeed have no sufficient outlet to the highway.
Petitioners next claim that the findings of the appellate court are based
on misapprehension of facts, which circumstance warrants a review of the
appellate courts decision. Yet, they failed to sufficiently demonstrate this
allegation in their pleadings. Absent a clear showing that the findings
complained of are totally devoid of support in the record, or that they are so
glaringly erroneous as to constitute serious abuse of discretion, such findings
must stand.
At any rate, even assuming that the first assignment of error may be
properly raised before this Court, we find no reversible error in the assailed
decision. To be entitled to a compulsory easement of right of way, the
preconditions provided under Arts. 649 and 650 of the Civil Code must be
established. These are: (1) that the dominant estate is surrounded by other
immovables and has no adequate outlet to a public highway; (2) that proper
indemnity has been paid; (3) that the isolation was not due to acts of the
proprietor of the dominant estate; (4) that the right of way claimed is at a
point least prejudicial to the servient estate and, in so far as consistent with
this rule, where the distance from the dominant estate to a public highway
may be the shortest.[9] The burden of proving the existence of these
prerequisites lies on the owner of the dominant estate.[10]
In the present case, the first element is clearly absent. As found by the
trial court and the Court of Appeals, an outlet already exists, which is a
path walk located at the left side ofpetitioners property and which is
connected to a private road about five hundred (500) meters long. The
private road, in turn, leads to Ma. Elena Street which is about 2.5 meters
wide and, finally, to Visayas Avenue. This outlet was determined by the
court a quo to be sufficient for the needs of the dominant estate, hence
petitioners have no cause to complain that they have no adequate outlet to
Visayas Avenue.
Further, no evidence was adduced by petitioners to prove that the
easement they seek to impose on private respondents property is to be
established at a point least prejudicial to the servient estate. For emphasis,
Lot 1 is only 164 square meters and an improvident imposition of the
easement on the lot may unjustly deprive private respondents of the optimum
use and enjoyment of their property, considering that its already small area
will be reduced further by the easement. Worse, it may even render the
property useless for the purpose for which private respondents purchased
the same.
It must also be stressed that, by its very nature, and when considered
with reference to the obligations imposed on the servient estate, an
easement involves an abnormal restriction on the property
rights of the servient owner and is regarded as a charge or encumbrance on
the servient estate. Thus, it is incumbent upon the owner of the dominant
estate to establish by clear and convincing evidence the presence of all the
preconditions before his claim for easement of right of way may be granted.
Petitioners miserably failed in this regard.
On the question of adequacy of the existing outlet, petitioners allege that
the path walk is much longer, circuitous and inconvenient, as from Visayas
Avenue one has to pass by Ma. Elena St., turn right to a private road, then
enter a vacant lot, and turn right again to exit from the vacant lot until one
reaches petitioners property.
We find petitioners concept of what is "adequate outlet" a complete
disregard of the well-entrenched doctrine that in order to justify the imposition
of an easement of right of way there must be a real, not fictitious or artificial,
necessity for it. Mere convenience for the dominant estate is not what is
required by law as the basis for setting up a compulsory easement. Even in
the face of necessity, if it can be satisfied without imposing the easement, the
same should not be imposed.[11]
Thus, in Ramos v. Gatchalian,[12] this Court disallowed the easement
prayed for - even if petitioner therein "had to pass through lots belonging to
other owners, as temporary ingress and egress, which lots were grassy,
cogonal and greatly inconvenient due to flood and mud" -
because it would run counter to the prevailing jurisprudence that mere
convenience for the dominant estate does not suffice to serve as basis for
the easement.
Also, in Floro v. Llenado,[13] we refused to impose an easement
of right of way over petitioners property, although private respondents
alternative route was admittedly inconvenient because he had to
traverse several rice lands and rice paddies belonging to different persons,
not to mention that said passage, as found by the trial court, was impassable
during rainy season.
Admittedly, the proposed right of way over private respondents property
is the most convenient, being the shorter and the more direct route to
Visayas Avenue. However, it is not enough that the easement be where the
way is shortest. It is more important that it be where it will cause the least
prejudice to the servient estate.[14] As discussed elsewhere, petitioners failed
to sufficiently demonstrate that the proposed right of way shall be at a point
least prejudicial to the servient estate.
The second assignment of error was likewise properly rejected by the
appellate court. Primarily, the issue of legality or illegality of the conversion of
the road lot in question has longbeen laid to rest in LRC Case No. Q-
1614[15] which declared with finality the legality of the segregation subdivision
survey plan of the disputed road lot. Consequently, it is now too late for
petitioners to question the validity of the conversion of the road lot.
Finally, questions relating to non-compliance with the requisites for
conversion of subdivision lots are properly cognizable by the National
Housing Authority (NHA), now the Housing and
Land Use Regulatory Board (HLURB), pursuant to Sec. 22 of PD 957[16] and
not by the regular courts. Under the doctrine of primary administrative
jurisdiction,[17] where jurisdiction is vested upon an administrative body, no
resort to the courts may be made before such administrative body shall have
acted upon the matter.
WHEREFORE, Petition is DENIED. The 16 January 1996 Decision and
the 14 June 1996 Resolution of the Court of Appeals denying reconsideration
thereof are AFFIRMED. Costs against petitioners.
SO ORDERED.
Davide, Jr. (Chairman), Vitug, Panganiban and Quisumbing, JJ. concur.
33. G.R. No. 75905 October 12, 1987
REMIGIO O. RAMOS, SR., petitioner, vs. GATCHALIAN REALTY, INC.,
EDUARDO ASPREC, and COURT OF APPEALS, respondents.
GUTIERREZ, JR., J.:
In this petition for review on certiorari, the petitioner assails the decision of
the Court of Appeals dated August 29, 1986 which affirmed the November 14,
1984 order of the Regional Trial Court, Branch CXI at Pasay City dismissing
the petitioner's civil action for a right of way with prayer for preliminary
injunction.
Petitioner Ramos is the owner of a house and lot containing an area of 901
square meters covered by Transfer Certificate of Title No. 14927 situated at
Barrio San Dionisio, Parañaque, Metro Manila. The lot was acquired by the
petitioner from Science Rodriguez Lombos Subdivision In the subdivision
survey plan of Lot 4133-G, (LRC) PSD-172544, the lot is more particularly
described as Lot 4133-G-11 (Exhibits "1" and "1-A "). Two road lots abut
petitioner's property namely lot 4133-G-12 with an area of 2,160 square
meters clearly appearing as a proposed road in the Lombos subdivision plan
and Lot 4135 of the Parañaque Cadastre now known as Pambansa Road but
more commonly referred to as Gatchalian Avenue.
Respondents Asprec own Lot 4135. Gatchalian Avenue is alongside Lot
4135. Respondent Gatchalian Realty was granted the road right of way and
drainage along Lot 4135 to service the Gatchalian and Asprec subdivision,
by the respondent Asprecs.
The records of this case disclose that on April 30, 1981, a complaint for an
easement of a right of way with preliminary mandatory injunction was filed by
Ramos against the private respondents. Among the allegations in the
complaint are:
... that he (referring to the petitioner) constructed his house
at 27 Gatchalian Avenue (also known as Pambansa Road),
Paranaque, and has since resided therein with his family
from 1977 up to the present; that during construction of the
house, Gatchalian Realty, Inc. built a 7-8, feet high concrete
wall right infront of appellant's premises, blocking his
entrance/exit to Gatchalian Road, the nearest, most
convenient and adequate entrance/exit to the public road. or
highway, formerly Sucat Road but now known as Dr. A.
Santos Avenue, Parañaque; that this house and lot is only
about 100 meters from Sucat, Road passing thru Gatchalian
Avenue; that prior to this, appellant and his counsel
addressed separate request/demand letters (Exh. A and
Annex B) to defendant company to allow him to exercise a
right of way on the subject premises; that in September 1977,
a meeting/conference was held between appellant and his
counsel on one hand and Mr. Roberto Gatchalian and
counsel on the other, during which defendant Corporation
manifested its conformity to grant appellant the requested
right of way upon payment of proper indemnity, with the
request that appellant inform defendants Asprec of their
aforesaid agreement; that consequently, appellant wrote Mr.
Cleto Asprec on September 16, 1977 (Exh. D); that with the
construction of the 7-8 feet concrete wall appellant and his
family have been constrained to pass through the back
 portion of their lot bounded by other lots belonging to
different owners, which is grassy and cogonal as temporary
ingress/egress with great inconvenience and hardship, and
this becomes all the more pronounced during the rainy
season due to flood and mud (Exhs. B-1, B-1-A, B-2; B-2-A,
B-3, B-3-A, B-3-B and B-4); and, lastly, that the aforesaid
concrete wall is dangerously leaning towards appellant's
premises posing great danger or hazard. (Court of Appeals
Decision, p. 3, Rollo, p. 39)
On May 20, 1981, the respondent corporation filed a motion to dismiss on
grounds of lack of cause of action and bar by prior judgment alleging that the
complaint was merely a reproduction of that filed on October 26, 1972 in Civil
Case No. 5930-P which was dismissed on October 30, 1980 for failure to
prosecute within a reasonable length of time. Respondents Asprec later
joined the respondent company in its motion to dismiss and adopted the
grounds and arguments stated therein.
On November 20, 1981, after the petitioner had filed his opposition to the
above motions, the lower court issued its order denying the motion to dismiss
on the ground that the order dismissing the earlier case was not an
adjudication on the merits.
On November 26, 1981, the petitioner filed an urgent exparte motion for the
issuance of a preliminary mandatory injunction as well as a preliminary
prohibitory injunction. On the same day, the lower court set the motion for
hearing on December 1, 1981, later reset to December 10, 1981, and
ordered that:
In the meantime, pending determination of the application on
the merits and in order that the reliefs sought therein may not
be rendered moot and academic, the defendants and all
persons acting upon their orders are hereby temporarily
enjoined from building, constructing and/or erecting a wall,
fence or any enclosure adjoining or abutting plaintiff's
premises and/or from restraining, preventing or prohibiting
the plaintiff, his family or persons residing in his premises as
well as any person/s who may have any dealing or business
with them from using, passing and/or traversing the said
Gatchalian Avenue in going to or returning from the plaintiff's
premises and in going to or returning from Sucat Road via
Gatchalian Avenue, until further orders from this Court.
(Order dated November 26,1981, Records, p. 66).
On December 1, 1981, Gatchalian Realty filed its answer and averred,
among others, that:
xxx xxx xxx
Defendant Corporation has never entered into a verbal
agreement with plaintiff to grant the latter a road right of way;
xxx xxx xxx
The so-called Gatchalian Avenue or Palanyag Road is not a
public road but a private street established and constructed
by the defendant Corporation intended for the sole and
exclusive use of its residents and lot buyers of its
subdivisions, as well as of the subdivisions owned and
operated by the various naked owners of the different
portions constituting the entire length and breadth of said
street;
If plaintiff's property referred to in the complaint is Lot No.
4133-G-11, (LRC) Psd-229001 (sic), then a grant of a right of
way to plaintiff is not a legal necessity, because such lot has
an eating road right of way, more particularly Lot 4133-G-12,
towards Dr. Arcadio Santos Avenue(Sukat Road);
xxx xxx xxx
The opening of Gatchalian Avenue to the property of plaintiff
will unduly cause great prejudice to defendant Corporation
as it can no longer effectively regulate the use of the said
private road; ...
Assuming, though not admitting, that plaintiff may be granted
a right of way, still the reasonable compensation for such
grant would be some P800,000.00, as such portion of
Gatchalian Avenue consists of some 2,000 square meters of
prime and valuable property which could readily command a
market value of P400.00 per square meter; moreover,
plaintiff still has to shoulder his proportionate share of the
expenses and upkeep of such street and the real estate
taxes imposed thereon. (Answer of Gatchalian Realty, Inc.,
Records, pp. 81-82).
On December 2, 1981, respondent Asprec filed their answer which basically
contained the same averments as that of the realty company.
At the hearing of the petitioner's application for issuance of a writ of
preliminary injunction to compel the private respondents to remove the wall
constructed right in front of the petitioner's premises barring him access to
Gatchalian Avenue, both parties presented oral and documentary evidence
to support their respective positions. After the hearing, the lower court issued
the following order:
Plaintiff is given fifteen (15) days to file a memorandum and
the defendant is given another fifteen days from receipt
thereof to file a reply, after which the case shall be deemed
submitted for resolution. So ordered. (TSN, December 10,
1981, p. 57)
After compliance by both parties with the above order, the lower court, on
July 9, 1982, rendered a decision the dispositive part of which reads:
WHEREFORE, judgment is hereby rendered in favor of the
plaintiff and against the defendants ordering the latter to
grant the former a right of way through Palanyag Road to
and from Don Arcadio Santos Avenue and to and from his
residence, upon payment by the plaintiff to the defendants
Asprecs the sum of P5,000 as indemnity therefor and under
the following terms and conditions to wit: (1) the easement
created shall be only in favor of the plaintiff, members of his
family and person or persons dealing with them; and (2) the
opening to be created through the concrete wall separating
plaintiff's residence and Palanyag Road shall only be three
(3) meters wide and shall be provided by an iron gate by the
plaintiff all at the expense of the plaintiff. Without
pronouncement as to costs and damages. (Rollo, p. 30)
Thereafter, the respondent company filed a motion to set aside and/or
reconsider the lower court's decision for being premature since only the
application for the writ of injunction was heard and submitted for resolution
and not the entire case. Respondents Asprec, likewise, filed a motion for
reconsideration mainly on the ground that the lower court's grant of a right of
way through Gatchalian Avenue in petitioner's favor would be in derogation
of the "Contract of Easement of Road Right-of-Way and of Drainage"
executed between them and Gatchalian Realty.
In his opposition to both motions, the petitioner argued that on the basis of
the transcript of steno graphic notes taken on December 10, 1981, it was
clear that both parties submitted the entire case for resolution inasmuch as
the pieces of evidence for the injunction and for the main case were the
same and there was nothing left to be presented. Thus, in effect, the
petitioner contended that the lower court's decision dated July 9, 1982 was
an adjudication on the merits.
On July 8, 1983, the lower court under a new judge by virtue of the
reorganization of the judiciary, issued an order setting aside and vacating its
previous decision dated July 9, 1982 on the ground that the same was
"rendered prematurely as the defendants had not presented their evidence
on the main evidence."
After the petitioner had rested his case, the respondent company filed a
motion to dismiss based on the insufficiency of the evidence adduced by the
petitioner. An opposition to said motion, was, thereafter, filed by the petitioner.
On November 14, 1984, the lower court, acting on the respondent company's
motion to dismiss, issued an order with the following tenor:
WHEREFORE, finding the motion to dismiss of defendant
corporation Gatchalian Realty, Inc. to be impressed with
merit, the same is hereby granted. For insufficiency of
evidence, plaintiff's complaint is hereby dismissed, without
pronouncement as to costs. (Rollo, p. 34)
The Court of Appeals on August 29, 1986, found that the petitioner failed to
establish the existence of the pre-conditions in order that he could legally be
entitled to an easement of a right of way. It affirmed the lower court's order
dated November 14, 1984 in all respects, with costs against the petitioner.
Hence, this petition which presents the following assignment of errors:
I
PUBLIC RESPONDENT ERRED IN AFFIRMING I-IV TOTO THE ORDER
OF DISMISSAL OF THE TRIAL COURT IN ALL RESPECTS WITH COSTS
AGAINST THE PETITIONER.
II
PUBLIC RESPONDENT ERRED IN ITS DECISION TO THE EFFECT THAT
PETITIONER HAS NOT SUFFICIENTLY MET THE REQUIREMENTS OF
THE LAW AND IN FAILING TO PROVE HIS RIGHT OF WAY THROUGH
GATCHALIAN AVENUE OR PALANYAG ROAD AGAINST THE
RESPONDENTS HEREIN;
III
PUBLIC RESPONDENT ERRED IN FAILING TO SET ASIDE THE ORDER
OF THE TRIAL COURT, AND NOT ADOPTING THE DECISION OF THE
TRIAL COURT DATED JULY 9,1982 GRANTING TO PETITIONER A RIGHT
OF WAY IN THE SUBJECT PREMISES. (Rollo, pp. 14-15)
These assigned errors center on the issue of whether or not the petitioner
has successfully shown that all the requisites necessary for the grant of an
easement of a right of way in his favor are present.
An easement or servitude in an encumbrance imposed upon an immovable
for the benefit of another immovable belonging to a different owner as
defined in Article 613 of the Civil Code. It is established either by law, in
which case it is called legal or by the will of the parties, in which event it is a
voluntary easement. (See Article 619, Civil Code of the Philippines; City of
Manila vs. Entote, 57 SCRA 497, 503).
Since there is no agreement between the contending parties in this case
granting a right of way by one in favor of the other, the establishment of a
voluntary easement between the petitioner and the respondent company
and/or the other private respondents is ruled out. What is left to examine is
whether or not the petitioner is entitled to a legal or compulsory easement of
a right of way.
In the case of Bacolod-Murcia Milling Company, Inc. vs. Capitol Subdivision
Inc., et al. (17 SCRA 731, 735-6), we held that:
... the Central had to rely strictly on its being entitled to a
compulsory servitude of right of way, under the Civil Code,
and it could not claim any such servitude without first
establishing the pre-conditions for its grant fixed by Articles
649 and 650 of the Civil Code of the Philippines:
(1) That it is surrounded by other
immovables and has no adequate outlet to a
public highway (Art. 649, par. 1);
(2) After payment of proper indemnity (Art.
649, p. 1. end);
(3) That the isolation was not due to the
Central's own acts (Art. 649, last par.); and
(4) That the right of way claimed is "at the
point least prejudicial to the servient estate;
and insofar as consistent with this rule,
where the distance from the dominant estate
to a public highway may be the shortest."
(Art. 650).
By express provision of law, therefore, a compulsory right of
way can not be obtained unless the four requisites
enumerated are first shown to exist, and the burden of proof
to show their existence was on the Central. (See also Angela
Estate, Inc. vs. Court of First Instance of Negros Occidental
24 SCRA 500, 510)
On the first requisite, the petitioner contends that since the respondent
company constructed the concrete wall blocking his ingress and egress via
the Gatchalian Avenue, the "nearest, most convenient and adequate road" to
and from a public highway, he has been constrained to use as his
"temporary" way the adjoining lots belonging to different persons. Said way is
allegedly "bumpy and impassable especially during rainy seasons because of
flood waters, mud and tall 'talahib' grasses thereon." Moreover, according to
the petitioner, the road right of way which the private respondents referred to
as the petitioner's alternative way to Sucat Road is not an existing road but
has remained a proposed road as indicated in the subdivision plan of the
Sobrina Rodriguez Lombos Subdivision.
The petitioner's position is not impressed with merit. We find no reason to
disturb the appellate court's finding of fact that the petitioner failed to prove
the non-existence of an adequate outlet to the Sucat Road except through
the Gatchalian Avenue. As borne out by the records of the case, there is a
road right of way provided by the Sabrina Rodriguez Lombos Subdivision
indicated as Lot 4133-G-12 in its subdivision plan for the buyers of its lots.
The fact that said lot is still undeveloped and causes inconvenience to the
petitioner when he uses it to reach the public highway does not bring him
within the ambit of the legal requisite. We agree with the appellate court's
observation that the petitioner should have, first and foremost, demanded
from the Sabrina Rodriguez Lombos Subdivision the improvement and
maintenance of Lot 4133-G-12 as his road right of way because it was from
said subdivision that he acquired his lot and not either from the Gatchalian
Realty or the respondents Asprec. To allow the petitioner access to Sucat
Road through Gatchalian Avenue inspite of a road right of way provided by
the petitioner's subdivision for its buyers simply because Gatchalian Avenue
allows petitioner a much greater ease in going to and coming from the main
thoroughfare is to completely ignore what jurisprudence has consistently
maintained through the years regarding an easement of a right of way, that
"mere convenience for the dominant estate is not enough to serve as its
basis. To justify the imposition of this servitude, there must be a real, not a
fictitious or artificial, necessity for it." (See Tolentino, Civil Code of the
Philippines, Vol. II, 2nd ed., 1972, p. 371)
Considering that the petitioner has failed to prove the existence of the first
requisite as aforestated, we find it unnecessary to discuss the rest of the
preconditions for a legal or compulsory right of way.
Once again, we apply the rule that findings of facts of the Court of Appeals
are binding on the Supreme Court and who not be overturned when
supported by the evidence on record save in the known exceptions such as
gross misappreciation of the evidence or misapprehension of facts. (See
Community Savings and Loan Association, Inc. vs. Court of Appeals, et al.,
G.R. No. 75786 promulgated on August 31, 1987; Regalario vs. Northwest
Finance Corporation, 117 SCRA 45; Agton vs. Court of Appeals, 113 SCRA
322).
WHEREFORE, in view of the foregoing, the petition is hereby DISMISSED
for lack of merit. The questioned decision of the Court of Appeals is
AFFIRMED.
SO ORDERED.
Fernan (Chairman), Feliciano, Bidin and Cortes, JJ., concur.
34. G.R. No. 75723 June 2, 1995
SIMEON FLORO, petitioner, vs. ORLANDO A. LLENADO (Deceased),
substituted by his wife WENIFREDA T. LLENADO, in her own behalf as
Administratrix of the Estate of Orlando A. Llenado and as Legal
Guardian of Minors Ma. Bexina, Avelino and Antonio, all surnamed
Llenado, and the COURT OF APPEALS, respondents.
ROMEO, J.:
The instant petition for review on certiorari presents two (2) issues for
resolution, namely: (1) whether or not a valid contract of easement of right of
way exists when the owner of one estate voluntarily allows the owner of an
adjacent estate passage through his property for a limited time, without
compensation; and, (2) whether or not an owner/developer of a subdivision
can demand a compulsory easement of right of way over the existing roads
of an adjacent subdivision instead of developing his subdivision's proposed
access road as provided in his duly approved subdivision plan.
Simeon Floro is the owner of a piece of land known as the Floro Park
Subdivision situated in Barangay Saluysoy, Meycauayan, Bulacan. 1 The
subdivision has its own egress and ingress to and from the MacArthur
Highway by means of its Road Lot 4 and the PNR level crossing.
Orlando A. Llenado, 2 on the other hand, was the registered owner of two (2)
parcels of land, with a total area of 34,573 sq. meters, more or less, 3 known
as the Llenado Homes Subdivision ("Llenado Homes," for brevity). Prior to its
purchase by Llenado from the owner Francisco de Castro, the land was
known as the Emmanuel Homes Subdivision, a duly licensed and registered
housing subdivision in the name of Soledad Ortega. 4 Bounded on the South
by the 5 to 6 meter-wide Palanas Creek, 5 which separates it from the Floro
Park Subdivision, and on the west by ricelands belonging to Marcial Ipapo,
Montaos and Guevarra, the Llenado Homes does not have any existing road
or passage to the MacArthur Highway. However, a proposed access road
traversing the idle riceland of Marcial Ipapo has been specifically provided in
the subdivision plan of the Emmanuel Homes Subdivision, which was duly
approved by the defunct Human Settlement Regulatory Commission (now
Housing and Land Use Regulatory Board). 6
Sometime in February, 1983, the Llenados sought, and were granted,
permission by the Floros to use Road Lots 4 and 5 of the Floro Park
Subdivision as passageway to and from MacArthur Highway. On April 7,
1983, however, Floro barricaded Road Lot 5 with a pile of rocks, wooden
posts and adobe stones, thereby preventing its use by the Llenados.
Their request for the reopening of Road Lot 5 having been denied, Orlando
Llenado instituted on April 13, 1983, a complaint before the Regional Trial
Court (RTC) of Malolos, Bulacan, against Simeon Floro for Easement of
Right of Way with Prayer for the Issuance of a Writ of Preliminary Mandatory
Injunction and Damages. The complaint was docketed as Civil Case No.
6834-M and raffled off to Branch XIX, presided over by Hon. Judge Camilo
Montesa.
After hearing and ocular inspection, the trial court, in an order dated July 15,
1983, 7 granted the prayer for the issuance of a writ of preliminary mandatory
injunction upon the filing of a bond by Llenado in the amount of one hundred
thousand pesos (P100,000.00). Floro was ordered:
1. To open the road by removing the rocks and wooden
posts and/or to remove the barricade on the subject road of
the Floro Park Subdivision and enjoining him and any person
or persons under him from doing or performing any act or
acts which will prevent (LLENADO) or his agents or any
person acting under (LLENADO's) instructions from passing
through the subject subdivision road to get into and to get
out of the aforementioned properties of (LLENADO) until
further order from this Court.
Floro moved for reconsideration but was denied the relief sought. 8 He then
filed with the Court of Appeals a petition for certiorari and prohibition with
petition for a writ of preliminary injunction and restraining order, but later on,
moved to withdraw his petition. His motion for withdrawal was granted by the
appellate court in its Resolution dated March 30, 1984 which declared the
case closed and terminated. 9
In the meantime, Orlando Llenado died and was substituted by his wife
Wenifreda T. Llenado as administratrix of his estate and its legal guardian of
their four (4) minor children. 10 Trial on the merits of the case which was
suspended pending resolution of the petition before the Court of Appeals,
resumed.
On October 16, 1984, the trial court rendered judgment dismissing the case
and lifting the writ of preliminary mandatory injunction previously issued. The
dispositive portion of the decision 11 reads:
WHEREFORE, judgment is hereby rendered dismissing the
instant complaint for lack of merit, and the writ of preliminary
mandatory injunction issued in favor of the plaintiff is hereby
ordered dissolved and/or lifted. On the counterclaim posed
by defendant, the plaintiff is hereby ordered to pay defendant
the following amounts:
a. P30,000.00 as actual damages suffered
by defendant;
b. P77,500.00 as compensation for the use
of defendant's property;
c. P15,000.00 as attorney's fees; and,
d. To pay the costs of the suit.
SO ORDERED.
On appeal by Llenado, the appellate court set aside the decision of the trial
court in a decision 12 promulgated on February 11, 1986, the dispositive
portion of which reads as follows:
WHEREFORE, premises considered, the decision appealed
from is hereby SET ASIDE and another one entered:
(1) Granting the establishment of a legal or compulsory
easement of right of way passing through Road Lots 4 and 5
of defendant's Floro Park Subdivision in favor of plaintiff's
Llenado Homes Subdivision;
(2) Ordering defendant to remove immediately all of the
obstructions, such as walls, rocks and posts with which he
had barricaded Road Lot 5 for the purpose of preventing
plaintiff from using defendant's subdivision as passage way
to the MacArthur Highway;
(3) Ordering defendant to pay to plaintiff, upon finality of this
decision, the following:
(a) P60,000.00 — temperate or moderate
damages
(b) P100,000.00 — moral damages; and
(c) P30,000.00 — attorney's fees;
(4) Ordering plaintiff to pay to defendant the amount of
P60,000.00 within ten (10) days from the date of finality of
this decision as indemnity for the right of way pursuant to the
mandate of Article 649 of the Civil Code; and
(5) Ordering defendant to pay the costs.
The liability of the defendant under No. (3) (supra) shall be
legally compensated by the liability of the plaintiff under No.
(4) (supra) automatically to the extent that the amount of one
is covered by the amount of the other.
SO ORDERED.
On August 14, 1986, the appellate court in separate resolutions denied
Floro's motion for reconsideration and supplementary motion 13 and granted
Llenado's motion for partial execution pending appeal. 14 The latter resolution
provided in its dispositive portion, thus:
WHEREFORE, upon the posting by plaintiff-appellant of a
bond in the amount of ONE HUNDRED THOUSAND PESOS
(P100,000.00) approved by this Court, let a writ of partial
execution pending appeal be issued ordering the defendant-
 appellee to remove immediately all of the obstructions,
including all walls, rocks, posts, and other materials with
which he has barricaded Road Lot 5, for the purpose of
preventing plaintiff-appellant from using defendant's
subdivision as passage way to the MacArthur Highway. Said
Order shall include Road Lot 4 so that plaintiff-appellant will
have free access to MacArthur Highway.
SO ORDERED.
The writ of partial execution pending appeal was issued on October 2, 1986
after the instant Petition had been filed and after the Court had resolved on
September 15, 1986 to require Llenado to comment thereon. On motion of
Floro, the Court issued a restraining order on October 29, 1986, 15 enjoining
the appellate court from carrying out its writ of partial execution pending
appeal. Subsequently, the instant petition was given due course. 16
In a petition to review a decision of the Court of Appeals under Rule 45 of the
Rules of Court, the jurisdiction of the court is ordinarily confined to reviewing
errors of law committed by the Court of Appeals, its findings of fact being
conclusive on the Court. 17 There are, however, exceptional circumstances
that would compel the Court to review the findings of fact of the Court of
Appeals, summarized in Remalante v. Tibe 18 and subsequent cases 19as
follows: (1) when the inference made is manifestly mistaken, absurd or
impossible; (2) when there is a grave abuse of discretion; (3) when the
finding is grounded entirely on speculations, surmises or conjectures; (4)
when the judgment of the Court of Appeals is based on misapprehension of
facts; (5) when the findings of fact are conflicting; (6) when the Court of
Appeals in making its findings went beyond the issues of the case and the
same is contrary to the admissions of both appellant and appellee; (7) when
the findings of the Court of Appeals are contrary to those of the trial court; (8)
when the findings of fact are conclusions without citation of specific evidence
on which they are based; (9) when the Court of Appeals manifestly
overlooked certain relevant facts not disputed by the parties and which, if
properly considered, would justify a different conclusion; and, (10) when the
findings of fact of the Court of Appeals are premised on the absence of
evidence and are contradicted by the evidence on record.
The findings and conclusions of the Court of Appeals, being contrary to the
findings and conclusions of the trial court, the instant case falls within the
exception. Thus, the Court may scrutinize the evidence on the record to bring
to light the real facts of the case. 20
It is not disputed that sometime in February 1983, Floro granted the Llenados
verbal permission to pass through the Floro Park Subdivision in going to and
from the MacArthur Highway. Whether such permission, as claimed by Floro,
was for the month of March only, without compensation and as a neighborly
gesture for the purpose merely of enabling the Llenados to install stone
monuments (mojones) on their land, 21 or was in relation to the easement of
right of way granted in their favor, as insisted by the Llenados, 22 the fact
remains that no such contract of easement of right of way was actually
perfected between Floro and Llenado. Both Orlando 23 and Wenifreda
Llenado 24 testified that the conditions of the easement of right of way were
still to be drawn up by Floro's lawyer. Thus, no compensation was agreed
upon, and none was paid, for the passage through Floro's property during the
month of March. 25
However, when Wenifreda saw Floro in the evening of April 7, 1983 to
negotiate for the reopening of Road Lot 5 and Floro laid down his
conditions 26 for the requested reopening and presumably for the requested
easement of right of way, Orlando rejected said conditions for being
onerous. 27
In Dionisio v. Ortiz, 28 where therein private respondents claimed to have
every right to use Howmart Road as passageway to EDSA by reason of a
standing oral contract of easement of right of way with therein petitioner, so
that the latter did not have the right to put a barricade in front of private
respondents' gate and to stop them from using said gate as passageway to
Howmart Road, the Court said:
There is no question that a right of way was granted in favor
of the private respondents over Howmart Road but the
records disclose that such right of way expired in December
1988. The continued use of the easement enjoyed by QCIEA
including the private respondents is by the mere tolerance of
the owner pending the renegotiation of the terms and
conditions of said right of way. . . . Absent an agreement of
the parties as to the consideration, among others, no
contract of easement of right of way has been validly entered
into by the petitioners and QCIEA. Thus the private
respondents' claim of an easement of right of way over
Howmart Road has no legal or factual basis.
As in the Dionisio case, the use of Road Lots 4 and 5 by the Llenados during
the month of March was by mere tolerance of Floro pending the negotiation
of the terms and conditions of the right of way. This is evident from the
testimony of Wenifreda that "they said to us to go on while they are preparing
for the papers" and that "we can use that for a while, while they were making
for the papers." 29 Although such use was in anticipation of a voluntary
easement of right of way, no such contract was validly entered into by reason
of the failure of the parties to agree on its terms and conditions. Thus, private
respondents Llenados cannot claim entitlement to a right of way through the
Floro Park Subdivision on the basis of a voluntary easement.
Having ruled that no voluntary easement of right of way had been
established in favor of private respondents Llenados, we now determine
whether or not they are entitled to a compulsory easement of right of way.
For the Llenados to be entitled to a compulsory servitude of right of way
under the Civil Code, the preconditions provided under Articles 649 and 650
thereof must be established. These preconditions are: (1) that the dominant
estate is surrounded by other immovables and has no adequate outlet to a
public highway (Art. 649, par. 1); (2) after payment of proper indemnity (Art.
649, par. 1); (3) that the isolation was not due to acts of the proprietor of the
dominant estate (Art. 649, last par.); and, (4) that the right of way claimed is
at the point least prejudicial to the servient estate; and insofar as consistent
with this rule, where the distance from the dominant estate to a public
highway may be the shortest (Art. 650). 30
The burden of proving the existence of the prerequisites to validly claim a
compulsory right of way lies on the owner of the dominant estate. 31 We find
that private respondents have failed in this regard.
Significantly, when Orlando Llenado filed the complaint for legal easement
under Articles 649 and 650 of the Civil Code, he focused his argument on the
absence of any road, other than the closed road of the Floro Park
Subdivision, as his means of ingress and egress to and from his property.
However, he omitted to state that there is a proposed access road through
the Ipapo property.
Danilo Ravello, an engineer employed as Project Officer of the Human
Settlement Regulatory Commission (HSRC) since 1981, testified that his
duties consisted in evaluating and processing subdivision plans and making
the proper recommendation for their approval or disapproval. The application
of Soledad Ortega for the Emmanuel Homes Subdivision, 32 appearing on
page 120 of the records of the HSRC, had the following attachments: (1)
Sketch Plan of the property containing an area of 34,973 sq. m.; 33 (2)
Waterline Layout
Plan; 34 (3) Vicinity Plan; 35 (4) Road Plan Layout; 36 and (5) Consolidation
Subdivision Plan. 37 According to Ravello, as per Plans Exhs. "10-A" and "10-
C", Road Lot 3 of the Emmanuel Homes Subdivision starts and ends with
adjacent properties; on one end, the property owned by Mariano Monadero
and at the other, the property owned by a certain Ventura Tan Mariano. As
per Plans, the access road to the subdivision should have come from the
MacArthur Highway through the Ipapo property. 38 Having found on ocular
inspection that the access road indicated in the Plan did not actually exist,
the HSRC required applicant Soledad Ortega to submit a written right of way
clearance from Ipapo, which she did and on the basis of which, her
application on behalf of the Emmanuel Homes Subdivision was approved. 39
When Orlando Llenado acquired the subject property, he adopted the
subdivision plans of Emmanuel Homes and renamed it as the Llenado
Homes Subdivision. Accordingly, he applied for the issuance of a new
Development Permit and License to Sell in his name as the new owner of the
subdivision. Subsequently, the corresponding license to sell and
development permit were issued. As shown by the Consolidation Subdivision
Plan 40 submitted by Orlando Llenado, the names Soledad Ortega/Emmanuel
Homes Subdivision were merely crossed out and, in lieu thereof, the names
Orlando Llenado/Llenado Homes Subdivision were written. In said
subdivision plan which was duly approved by the HSRC, the Ipapo Access
Road was retained.
On July 1, 1983, during the pendency of Civil Case No. 6834-M, Orlando
Llenado filed with the HSRC an application for the amendment of the original
Consolidation Subdivision Plan of the Llenado Homes
Subdivision. 41 The proposed amendments, as indicated in Exh. "11-
A", 42 were: (1) the conversion of Lot 14 of Block 6 into a road lot, designed to
connect with Road Lot 5 of the Floro Homes Subdivision; and, (2) the closing
of both ends of Road Lot 3, the portion leading to the Ventura Tan Mariano
property and the portion leading to the Ipapo right of way (Adriano Monadero
property), to be converted into saleable residential lots. The first proposed
alteration, the conversion of Lot 14, Block 6 into a road lot was approved on
March 20,
1984. 43 The access road of the Llenado Homes Subdivision, however,
remained in the Subdivision Plan to be through the Ipapo property, as
approved by the HSRC.
When asked by the court as to the policy of the HSRC regarding the approval
of a subdivision plan in connection with the right of way issue, Engr. Ravello
responded that as a prerequisite for approval, the subdivision must have an
access road. It was not necessary that the access road be a paved road. A
dirt road was sufficient provided that the owner of the lot used as access
road gives his consent and the owner/developer/applicant of the proposed
subdivision develops the proposed access road, 44 as approved by the HSRC,
in compliance with Section 29 of Presidential Decree No. 957 which states:
Sec. 29. Right of way to Public Road. — The owner or
developer of a subdivision without access to any existing
public road or street must secure a right of way to a public
road or street and such right of way must be developed and
maintained according to the requirement of the government
authorities concerned.
On appeal to the court of Appeals, private respondents Llenado submitted a
letter of Marcial Ipapo dated July 3, 1985 addressed to the
HSRC, 45 informing the latter that he did not give a road right of way over his
property in favor of Soledad Ortega, the developer of Emmanuel Homes
Subdivision. This letter seems to be an aftermath of the testimony of Engr.
Ravello that the notarized affidavit of Ipapo submitted by Soledad Ortega to
the HSRC could not be located in the records of the Commission. 46 This new
matter, however, is inadmissible in evidence, not having been authenticated
in accordance with Section 20, Rule 132 of the Rules of Court. It was,
therefore, erroneous on the part of the Court of Appeals to consider this
piece of evidence in its Resolution For The Motion For Reconsideration
dated August 14, 1986. 47
There being an existing right of way over the Ipapo property, the first
requirement for a grant of a compulsory easement of right of way over the
Floro Park Subdivision has not been met.
In Talisay-Silay Milling Co. v. Court of First Instance of Negros
Occidental, 48 the court explained what is meant by payment or prepayment
of the required indemnity under Article 649 of the Civil Code, as follows:
. . . Prepayment, as we used the term means the delivery of
the proper indemnity required by law for the damage that
might be incurred by the servient estate in the event the legal
easement is constituted. The fact that a voluntary agreement
upon the extent of compensation cannot be reached by the
parties involved, is not an impediment to the establishment
of such easement. Precisely, the action of the dominant
estate against the servient estate should include a prayer for
the fixing of the amount which may be due from the former to
the latter.
In the case at bench, no proof was presented by private respondent Llenado
that he complied with this requirement. The complaint for easement of right
of way filed by him in the lower court did not contain a prayer for the fixing of
the amount that he must pay Floro in the event that the easement of right of
way be constituted. Thus, the existence of the second requisite has likewise
not been established.
There can be no denying that the isolation of the Llenado Homes Subdivision
is the doing of its owner/developer/applicant. It appears that the access road
indicated in the Plan of the Emmanuel Homes Subdivision and the Llenado
Homes Subdivision for which a right of way over the Ipapo property was
procured, was merely for the sake of securing an approval of the proposed
development plan. There were no proofs of actual work having been done to
construct a road, even just a dirt road, over the right of way that would
connect Road Lot 3 of the Llenado Homes Subdivision to the MacArthur
Highway. Private respondent Llenado admitted that the Ipapo riceland was
no longer being cultivated and there was already a fence made of adobe wall
constructed on it. 49 Indications are that it has already been abandoned as a
ricefield. There was no reason for private respondent's failure to develop the
right of way except the inconvenience and expenses it would cost him.
Hence, the third requisite has not been met.
If the servitude requested by private respondent Llenado is allowed, other
subdivision developers/owners would be encouraged to hastily prepare a
subdivision plan with fictitious provisions for access roads merely for
registration purposes. Thereafter, said developers could abandon their duly
approved plans and, for whatever reason, open up another way through
another property under the pretext that they have inadequate outlets to a
public road or highway. Furthermore, if such practice were tolerated, the very
purpose for which Presidential Decree No. 957 was enacted, that is, to
protect subdivision buyers from unscrupulous subdivision owners/developers
who renege on their duties to develop their subdivisions in accordance with
the duly approved subdivision plans, would be defeated.
The Court takes cognizance of the fact that, instead of developing the
proposed access road, private respondent Llenado applied for the
conversion of Lot 14 of Block 6 into a road lot to connect it with Road Lot 5 of
the Floro Park Subdivision, citing as reason therefor, that the amendment
sought would create a "more adequate and practical passage" from the
Llenado Homes Subdivision to the MacArthur National Highway and vice-
versa. The "convenience" of using Road Lots 4 and 5 of the Floro Park
Subdivision will not suffice, however, to justify the easement in favor of
private respondent.
In order to justify the imposition of the servitude of right of way, there must be
a real, not a fictitious or artificial necessity for it. Mere convenience for the
dominant estate is not what is required by law as the basis for setting up a
compulsory easement. Even in the face of a necessity, if it can be satisfied
without imposing the servitude, the same should not be imposed. 50 This
easement can also be established for the benefit of a tenement with an
inadequate outlet, but not when the outlet is merely inconvenient. Thus,
when a person has already established an easement of this nature in favor of
his tenement, he cannot demand another, even if the first passage has
defects which make passage impossible, if those defects can be eliminated
by proper repairs. 51
In the case of Ramos v. Gatchalian, 52 the Court denied access to Sucat
Road through Gatchalian Avenue in view of the fact that petitioner had a road
right of way provided by the Sobrina Rodriguez Lombos Subdivision
indicated as Lot 4133-G-12 in its subdivision plan for the buyers of its lots,
notwithstanding that said lot was still undeveloped and inconvenient to
petitioner. Even if Ramos, the petitioner therein, had "to pass through other
lots belonging to other owners, which are grassy and cogonal, as temporary
ingress/egress with great inconvenience particularly due to flood and mud,"
the Court did not allow the easement because it would run counter to existing
jurisprudence that mere convenience for the dominant estate does not suffice
to serve as basis for the servitude. This ruling was reiterated in Rivera v.
Intermediate Appellate Court 53 and Costabella Corporation v. Court of
Appeals. 54
As borne out by the records of this case, despite the closure of the subject
road, construction work at Llenado Homes Subdivision continued. The
alternative route taken by private respondent is admittedly inconvenient
because he has to traverse several ricelands and rice paddies belonging to
different persons, not to mention that said passage, as found by the trial
court, is impassable during the rainy season. However, private respondent
has no one to blame but himself for not developing the proposed access road
through the Ipapo property.
Worthy of mention is the trial court 's reason 55
for the denial of the easement
of right of way, thus:
. . . While it is true that the conversion of said salable (sic)
Lot 14, Block 6 into a Road Lot has been approved by the
Human Settlement Regulatory Commission, such approval,
however, does not ipso facto connect Road Lot 5 and 4 (Exh.
C-1) of the Floro Park Subdivision in the absence of consent
and/or approval of the owner of said Floro Park
Subdivision. . . . It should be emphasized that the end of
Road Lot 3 of Llenado Homes Subdivision facing the
MacArthur Highway as per approved subdivision plan,
subject of the proposed amendment, has been
designated/specified as an access road directly leading to
the MacArthur Highway. It is the shortest route and the road
alignment is direct and in a straight line perpendicular to the
MacArthur Highway. The disapproval, therefore, of the
closure and consequent conversion of both ends of Road Lot
3 into residential lots, in effect, maintains Road Lot 3 as an
access road of Llenado Homes Subdivision to the main
highway. There appears a semblance of deception if the
provision for (the) proposed access road in the approved
subdivision plan of Emmanuel Homes Subdivision, now
Llenado Homes Subdivision, would not be implemented as it
would appear that the same was indicated in the plans
merely for purposes of approval of the subdivision but not
actually to develop and avail of the same was originally
intended.
It is also worthwhile to observe that on November 29, 1985, the then
Minister of Public Works and Highways found the construction of the
concrete culvert across Palanas Creek illegal in contemplation of
Presidential Decree No. 296, Letters of Instructions No. 19 and
Presidential Decree No. 1067 and ordered private respondent herein
to remove or demolish the same, to be carried out by the Chief Civil
Engineer, Bulacan Engineering District, at the expense of private
respondent. 56
Failing to establish the existence of the prerequisites under Articles 649 and
650 of the Civil Code, private respondent Llenado's bid for a compulsory
easement of right of way over Road Lots 4 and 5 of the Floro Park
Subdivision must fail.
It appears, from the records that during the period from March 1983 until the
closure of the subject roads on April 7, 1983, private respondent was allowed
to pass thru petitioner's subdivision without any agreement on compensation.
During the same period, the subject roads (Road Lots 4 and 5) were
damaged due to the trucks and heavy equipment passing thereon. Justice
and equity demand that petitioner be compensated for the said damage.
Hence, the lower court's decision awarding to petitioner Thirty Thousand
Pesos (P30,000.00) as actual and compensatory damages should be
affirmed.
Petitioner should likewise be indemnified for the use of his property from July
15, 1983 (upon the reopening of the subject road pursuant to the issuance of
a writ of preliminary mandatory injunction) until October 16, 1986 (when the
writ was lifted). In the absence of a specific provision applicable in the case
at bench as to the amount of proper indemnity, the award of Sixty Thousand
Pesos (P60,000.00) as temperate or moderate damages pursuant to Articles
2224 and 2225 of the Civil Code 57 is considered proper and reasonable. 58
As regards the claim for attorney's fees, considering that the petitioner was
compelled to file a petition for review on certiorari before this Court, the
amount of Thirty Thousand Pesos (P30,000.00) is just and reasonable.
WHEREFORE, this appealed decision of the Court of Appeals is SET ASIDE
and the decision of the trial court, as herein modified, is REINSTATED. Costs
against private respondent.
SO ORDERED.
Feliciano, Melo, Vitug and Francisco, JJ., concur.
35. [G.R. No. 112331. May 29, 1996]
ANASTACIA QUIMEN, petitioner, vs. COURT OF APPEALS and
YOLANDA Q. OLIVEROS, respondents.
DECISION
BELLOSILLO,J.:
IN EASEMENT OF RIGHT OF WAY that easement where the way is
shortest and will cause least prejudice shall be chosen. However, if the two
circumstances do not concur in a single tenement, the way where damage
will be least shall be used even if not the shortest route.[1] This is so
because least prejudice prevails over shortest distance. This means that the
court is not bound to establish what is the shortest distance; a longer way
may be adopted to avoid injury to the servient estate, such as when there are
constructions or walls which can be avoided by a round about way, or to
secure the interest of the dominant owner, such as when the shortest
distance would place the way on a dangerous decline.
Thus we conclude from the succeeding facts: Petitioner Anastacia
Quimen together with her brothers Sotero, Sulpicio, Antonio and sister Rufina
inherited a piece of property situated in Pandi, Bulacan. They agreed to
subdivide the property equally among themselves, as they did, with the
shares of Anastacia, Sotero, Sulpicio and Rufina abutting the municipal
road. The share of Anastacia, located at the extreme left, was designated as
Lot No. 1448-B- 1. It is bounded on the right by the property of Sotero
designated as Lot. No. 1448-B-2. Adjoining Soteros property on the right are
Lots Nos. 1448-B-3 and 1448-B-4 originally owned by Rufina and Sulpicio,
respectively, but which were later acquired by a certain Catalina
Santos. Located directly behind the lots of Anastacia and Sotero is the share
of their brother Antonio designated as Lot No. 1448-B-C which the latter
divided into two (2) equal parts, now Lots Nos. 1448-B-6-A and 1448-B-6-B,
each with an area of 92 square meters. Lot No. 1448-B-6-A is located behind
Anastacias Lot No. 1448-B-1, while Lot No. 1448-B-6-B is behind the
property of Sotero, father of respondent Yolanda.
In February 1982 Yolanda purchased Lot No. 1448-B-6-A from her
uncle Antonio through her aunt Anastacia who was then acting as his
administratrix. According to Yolanda, when petitioner offered her the property
for sale she was hesitant to buy as it had no access to a public road. But
Anastacia prevailed upon her to buy the lot with the assurance that she
would give her a right of way on her adjoining property for P200.00 per
square meter.
Thereafter, Yolanda constructed a house on the lot she bought using as
her passageway to the public highway a portion of Anastacia s property. But
when Yolanda finally offered to pay for the use of the pathway Anastacia
refused to accept the payment. In fact she was thereafter barred by
Anastacia from passing through her property.[2]
In February 1986 Yolanda purchased the other lot of Antonio Quimen,
Lot No. 1448-B-6-B, located directly behind the property of her parents who
provided her a pathway gratis et amore between their house, extending
about nineteen (19) meters from the lot of Yolanda behind the sari-sari
store of Sotero, and Anastacias perimeter fence. The store is made of strong
materials and occupies the entire frontage of the lot measuring four (4)
meters wide and nine meters (9) long. Although the pathway leads to the
municipal road it is not adequate for ingress and egress. The municipal road
cannot be reached with facility because the store itself obstructs the path so
that one has to pass through the back entrance and the facade of the store to
reach the road.
On 29 December 1987 Yolanda filed an action with the proper court
praying for a right of way through Anastacia s property. An ocular inspection
upon instruction of the presiding judge was conducted by the branch clerk of
court. The report was that the proposed right of way was at the extreme right
of Anastacias property facing the public highway, starting from the back of
Soteros sari-sari store and extending inward by one (1) meter to her property
and turning left for about five (5) meters to avoid the store of Sotero in order
to reach the municipal road[3]and the way was unobstructed except for an
avocado tree standing in the middle.[4]
But on 5 September 1991 the trial court dismissed the complaint for lack
of cause of action, explaining that the right of way through Soteros property
was a straight path and to allow a detour by cutting through Anastacias
property would no longer make the path straight. Hence the trial court
concluded that it was more practical to extend the existing pathway to the
public road by removing that portion of the store blocking the path as that
was the shortest route to the public road and the least prejudicial to the
parties concerned than passing through Anastacias property.[5]
On appeal by respondent Yolanda, the Court of Appeals reversed the
lower court and held that she was entitled to a right of way on petitioners
property and that the way proposed by Yolanda would cause the least
damage and detriment to the servient estate.[6] The appellate court however
did not award damages to private respondent as petitioner did not act in bad
faith in resisting the claim.
Petitioner now comes to us imputing ERROR to respondent Court of
Appeals: (a) in disregarding the agreement of the parties; (b) in considering
petitioners property as a servient estate despite the fact that it does not abut
or adjoin the property of private respondent; and, (c) in holding that the one-
meter by five-meter passage way proposed by private respondent is the least
prejudicial and the shortest distance to the public road.
 Incidentally, petitioner denies having promised private respondent a
right of way. She claims that her agreement with private respondent was to
provide the latter with a right of way on the other lot of Antonio Quimen under
her administration when it was not yet sold to private respondent. Petitioner
insists that passing through the property of Yolandas parents is more
accessible to the public road than to make a detour to her property and cut
down the avocado tree standing thereon.
Petitioner further argues that when Yolanda purchased Lot No. 1448-B-
6-B in 1986 the easement of right of way she provided her (petitioner)
was ipso jure extinguished as a result of the merger of ownership of the
dominant and the servient estates in one person so that there was no longer
any compelling reason to provide private respondent with a right of way as
there are other surrounding lots suitable for the purpose. Petitioner strongly
maintains that the proposed right of way is not the shortest access to the
public road because of the detour and that, moreover, she is likely to suffer
the most damage as she derives a net income of P600.00 per year from the
sale of the fruits of her avocado tree, and considering that an avocado has
an average life span of seventy (70) years, she expects a substantial earning
from it.[7]
But we find no cogent reason to disturb the ruling of respondent
appellate court granting a right of way to private respondent through
petitioners property. In fact, as between petitioner Anastacia and respondent
Yolanda their agreement has already been rendered moot insofar as it
concerns the determination of the principal issue herein presented. The
voluntary easement in favor of private respondent, which petitioner now
denies but which the court is inclined to believe, has in fact become a legal
easement or an easement by necessity constituted by law.[8]
As defined, an easement is a real right on anothers property, corporeal
and immovable, whereby the owner of the latter must refrain from doing or
allowing somebody else to do or something to be done on his property, for
the benefit of another person or tenement.[9] It is jus in re aliena, inseparable,
indivisible and perpetual, unless extinguished by causes provided by law. A
right of way in particular is a privilege constituted by covenant or granted by
law[10] to a person or class of persons to pass over anothers property when
his tenement is surrounded by realties belonging to others without an
adequate outlet to the public highway. The owner of the dominant estate can
demand a right of way through the servient estate provided he indemnifies
the owner thereof for the beneficial use of his property.[11]
The conditions sine qua non for a valid grant of an easement of right of
way are: (a) the dominant estate is surrounded by other immovables without
an adequate outlet to a public highway; (b) the dominant estate is willing to
pay the proper indemnity; (c) the isolation was not due to the acts of the
dominant estate; and, (d) the right of way being claimed is at a point least
prejudicial to the servient estate.[12]
A cursory examination of the complaint of respondent Yolanda for a
right of way[13] readily shows that
[E]ven before the purchase of the said parcels of land the plaintiff was
reluctant to purchase the same for they are enclosed with permanent
improvements like a concrete fence and store and have (sic) no egress
leading to the road but because of the assurance of the defendant that
plaintiff will be provided one (1) meter wide and five (5) meters long right of
way in the sum of P200.00 per square meter to be taken from Anastacias lot
at the side of a concrete store until plaintiff reach(es) her fathers land, plaintiff
was induced to buy the aforesaid parcels of land x x x. That the aforesaid
right of way is the shortest, most convenient and the least onerous leading to
the road and being used by the plaintiffs predecessors-in-interest from the
very inception x x x.
The evidence clearly shows that the property of private respondent is
hemmed in by the estates of other persons including that of petitioner; that
she offered to pay P200.00 per square meter for her right of way as agreed
between her and petitioner; that she did not cause the isolation of her
property; that the right of way is the least prejudicial to the servient
estate.[14]These facts are confirmed in the ocular inspection report of the clerk
of court, more so that the trial court itself declared that [t]he said properties of
Antonio Quimen which were purchased by plaintiff Yolanda Quimen Oliveros
were totally isolated from the public highway and there appears an
imperative need for an easement of right of way to the public highway.[15]
Petitioner finally insists that respondent court erroneously concluded
that the right of way proposed by private respondent is the least onerous to
the parties. We cannot agree. Article 650 of the New Civil Code explicitly
states that the easement of right of way shall be established at the point least
prejudicial to the servient estate and, insofar as consistent with this rule,
where the distance from the dominant estate to a public highway may be the
shortest. The criterion of least prejudice to the servient estate must prevail
over the criterion of shortest distance although this is a matter ofjudicial
appreciation. While shortest distance may ordinarily imply least prejudice, it
is not always so as when there are permanent structures obstructing
the shortest distance; while on the other hand, the longest distance may be
free of obstructions and the easiest or most convenient to pass through. In
other words, where the easement may be established on any of several
tenements surrounding the dominant estate, the one where the way
is shortest and will cause the least damage should be chosen. However, as
elsewhere stated, if these two (2) circumstances do not concur in a single
tenement, the way which will cause the least damage should be used, even if
it will not be the shortest.[16] This is the test.
In the trial court, petitioner openly admitted -
Q. You testified during your direct examination about this plan, kindly go over
this and please point to us in what portion of this plan is the house or store of
the father of the (plaintiff)?
A. This one, sir (witness pointed a certain portion located near the proposed
right of way).
xxx xxx xxx
Q. Now, you will agree with me x x x that this portion is the front
portion of the lot owned by the father of the plaintiff and which
was (sic) occupied by a store made up of strong materials?
A. It is not true, sir.
Q. What materials does (sic) this store of the father of the plaintiff
made of?
A. Hollow blocks and the side is made of wood, sir.
xxx xxx xxx
Q. Just before your brother disposed that 1/2 portion of the lot in
question, what right of way does (sic) he use in reaching the
public road, kindly point to this sketch that he is (sic) using in
reaching the public road?
A. In my property, sir.
Q. Now you will agree with me x x x the main reason why your
brother is (sic) using this property is because there was a
store located near this portion?
A. Yes, and according to the father of Yolanda there is no other
way than this, sir.[17]
The trial court found that Yolandas property was situated at the back of
her fathers property and held that there existed an available space of about
nineteen (19) meters long which could conveniently serve as a right of way
between the boundary line and the house of Yolanda s father; that the vacant
space ended at the left back of Soteros store which was made of strong
materials; that this explained why Yolanda requested a detour to the lot of
Anastacia and cut an opening of one (1) meter wide and five (5) meters long
to serve as her right of way to the public highway. But notwithstanding its
factual observations, the trial court concluded, although erroneously, that
Yolanda was not entitled to a right of way on petitioners property since a
detour through it would not make the line straight and would not be the route
shortest to the public highway.
In applying Art. 650 of the New Civil Code, respondent Court of Appeals
declared that the proposed right of way of Yolanda, which is one (1) meter
wide and five (5) meters long at the extreme right of petitioners property, will
cause the least prejudice and/or damage as compared to the suggested
passage through the property of Yolanda s father which would mean
destroying the sari-sari store made of strong materials. Absent any showing
that these findings and conclusion are devoid of factual support in the
records, or are so glaringly erroneous, this Court accepts and adopts
them. As between a right of way that would demolish a store of strong
materials to provide egress to a public highway, and another right of way
which although longer will only require an avocado tree to be cut down, the
second alternative should be preferred. After all, it is not the main function of
this Court to analyze or weigh the evidence presented all over again where
the petition would necessarily invite calibration of the whole evidence
considering primarily the credibility of witnesses, existence and relevancy of
specific surrounding circumstances, their relation to each other, and the
probabilities of the situation.[18] In sum, this Court finds that the decision of
respondent appellate court is thoroughly backed up by law and the evidence.
WHEREFORE, no reversible error having been committed by
respondent Court of Appeals, the petition is DENIED and the decision
subject of review is AFFIRMED. Costs against petitioner.
SO ORDERED.
Padilla (Chairman), Vitug, Kapunan, and Hermosisima, Jr., JJ., concur.
36. [G.R. No. 125683. March 2, 1999]
EDEN BALLATAN and SPS. BETTY MARTINEZ and CHONG CHY
LING, petitioners, vs. COURT OF APPEALS, GONZALO GO, WINSTON
GO, LI CHING YAO, ARANETA INSTITUTE OF AGRICULTURE and JOSE
N. QUEDDING, respondents.
DECISION
PUNO, J.:
This is a petition for review on certiorari of the decision of the Court of
Appeals dated March 25, 1996 in CA-G.R. CV No. 32472 entitled "Eden
Ballatan, et. al., plaintiffs-appellees v. Gonzalo Go and Winston Go,
appellants and third-party plaintiffs-appellants v. Li Ching Yao, et.al., third-
party defendants."[1]
The instant case arose from a dispute over forty-two (42) square meters
of residential land belonging to petitioners. The parties herein are owners of
adjacent lots located at Block No. 3, Poinsettia Street, Araneta University
Village, Malabon, Metro Manila. Lot No. 24, 414 square meters in area, is
registered in the name of petitioners Eden Ballatan and spouses Betty
Martinez and Chong Chy Ling.[2] Lots Nos. 25 and 26, with an area of 415
and 313 square meters respectively, are registered in the name of
respondent Gonzalo Go, Sr.[3] On Lot No. 25, respondent Winston Go, son of
Gonzalo Go, Sr., constructed his house. Adjacent to Lot No. 26 is Lot No. 27,
417 square meters in area, and is registered in the name of respondent Li
Ching Yao.[4]
In 1985, petitioner Ballatan constructed her house on Lot No. 24. During
the construction, she noticed that the concrete fence and side pathway of the
adjoining house of respondent Winston Go encroached on the entire length
of the eastern side of her property.[5] Her building contractor informed her that
the area of her lot was actually less than that described in the title. Forthwith,
Ballatan informed respondent Go of this discrepancy and his encroachment
on her property. Respondent Go, however, claimed that his house, including
its fence and pathway, were built within the parameters of his father's lot; and
that this lot was surveyed by Engineer Jose Quedding, the authorized
surveyor of the Araneta Institute of Agriculture (AIA), the owner-developer of
the subdivision project.
Petitioner Ballatan called the attention of the AIA to the discrepancy of
the land area in her title and the actual land area received from them. The
AIA authorized another survey of the land by Engineer Jose N. Quedding.
In a report dated February 28, 1985, Engineer Quedding found that the
lot area of petitioner Ballatan was less by a few meters and that of
respondent Li Ching Yao, which was three lots away, increased by two (2)
meters. Engineer Quedding declared that he made a verification survey of
Lots Nos. 25 and 26 of respondents Go in 1983 and allegedly found the
boundaries to have been in their proper position.He, however, could not
explain the reduction in Ballatan's area since he was not present at the time
respondents Go constructed their boundary walls.[6]
On June 2, 1985, Engineer Quedding made a third relocation survey
upon request of the parties. He found that Lot No. 24 lost approximately 25
square meters on its eastern boundary, that Lot No. 25, although found to
have encroached on Lot No. 24, did not lose nor gain any area; that Lot No.
26 lost some three (3) square meters which, however, were gained by Lot No.
27 on its western boundary.[7] In short, Lots Nos. 25, 26 and 27 moved
westward to the eastern boundary of Lot No. 24.
On the basis of this survey, on June 10, 1985, petitioner Ballatan made
a written demand on respondents Go to remove and dismantle their
improvements on Lot No. 24. Respondents Go refused. The parties,
including Li Ching Yao, however, met several times to reach an agreement
on the matter.
Failing to agree amicably, petitioner Ballatan brought the issue before
the barangay. Respondents Go did not appear. Thus, on April 1, 1986,
petitioner Ballatan instituted against respondents Go Civil Case No. 772-MN
for recovery of possession before the Regional Trial Court, Malabon, Branch
169. The Go's filed their "Answer with Third-Party Complaint" impleading as
third-party defendants respondents Li Ching Yao, the AIA and Engineer
Quedding.
On August 23, 1990, the trial court decided in favor of petitioners. It
ordered the Go's to vacate the subject portion of Lot No. 24, demolish their
improvements and pay petitioner Ballatan actual damages, attorney's fees
and the costs of the suit. It dismissed the third-party complaint against: (1)
AIA after finding that the lots sold to the parties were in accordance with the
technical description and verification plan covered by their respective titles;
(2) Jose N. Quedding, there being no privity of relation between him and
respondents Go and his erroneous survey having been made at the instance
of AIA, not the parties; and (3) Li Ching Yao for failure to prove that he
committed any wrong in the subject encroachment.[8] The court made the
following disposition:
"WHEREFORE, judgment is hereby rendered in favor of the plaintiffs and
against the defendants, ordering the latter:
1. To demolish and remove all improvements existing and encroaching on
plaintiff's lot;
2. To clear, vacate and deliver possession of the encroached area to the
plaintiffs;
3. To pay plaintiffs jointly and severally the following:
a) P7,800.00 for the expenses paid to the surveyors;
b) P5,000.00 for plaintiffs' transportation;
4. To pay plaintiffs, jointly and severally, attorney's fees equivalent to 25% of
the current market value of the subject matter in litigation at the time of
execution; and
5. To pay the costs of suit.
The third-party complaint filed by third-party plaintiff Gonzalo Go and Winston
Go against third-party defendants Araneta Institute of Agriculture, Jose N.
Quedding and Li Ching Yao is hereby DISMISSED, without pronouncement
as to costs.
SO ORDERED."
 Respondents Go appealed. On March 25, 1996, the Court of Appeals
modified the decision of the trial court. It affirmed the dismissal of the third-
party complaint against the AIA but reinstated the complaint against Li Ching
Yao and Jose Quedding. Instead of ordering respondents Go to demolish
their improvements on the subject land, the appellate court ordered them to
pay petitioner Ballatan, and respondent Li Ching Yao to pay respondents Go,
a reasonable amount for that portion of the lot which they encroached, the
value to be fixed at the time of taking. It also ordered Jose Quedding to pay
respondents Go attorney's fees of P5,000.00 for his erroneous survey. The
dispositive portion of the decision reads:
"WHEREFORE, premises considered, the decision appealed from is hereby
AFFIRMED insofar as the dismissal of the third-party complaint against
Araneta Institute of Agriculture is concerned but modified in all other aspects
as follows:
1) Defendants-appellants are hereby ordered to pay plaintiffs-appellees the
reasonable value of the forty-two (42) square meters of their lot at the time of
its taking;
2) Third-party defendant Li Ching Yao is hereby ordered to pay defendants-
appellants the reasonable value of the thirty-seven (37) square meters of the
latter's lot at the time of its taking; and
3) Third-party defendant Jose N. Quedding is hereby ordered to pay to
defendants-appellants the amount of P5,000.00. as attorney's fees.
LET THE RECORD of the case be remanded to the Regional Trial Court of
Malabon for further proceedings and reception of evidence for the
determination of the reasonable value of Lots Nos. 24 and 26.
SO ORDERED."[9]
Hence, this petition. Petitioners allege that:
"RESPONDENT COURT OF APPEALS ERRED ON QUESTIONS OF LAW
AND GRAVELY ABUSED ITS DISCRETION AMOUNTING TO LACK OF
JURISDICTION WHEN:
1. IT APPLIED EQUITY OR EQUITABLE SOLUTIONS TO THE INSTANT
CASE IN UTTER DISREGARD AND IN VIOLATION OR GROSS
IGNORANCE OF EXISTING LAWS AND JURISPRUDENCE VESTING
BASIC PROPERTY RIGHTS TO HEREIN PETITIONERS. RESPONDENT
COURT HAS NO POWER TO APPLY/USE EQUITY IN THE PRESENCE OF
EXISTING LAWS TO THE CONTRARY.
2. UNDER THE GUISE OF APPLYING EQUITY BUT IN EFFECT A VERY
APPARENT PARTIALITY AND FAVOR TO RESPONDENTS GO, IT
ORDERED PAYMENT OF THE ENCROACHED AREA AT THE VALUE AT
THE TIME OF ITS TAKING AND NOT THE VALUE AT THE TIME OF
PAYMENT, THEREBY ENRICHING THE GO'S BUT DEPRIVING
PETITIONERS OF THE FRUITS OR INCREASE IN VALUE OF THEIR
PROPERTY TO WHICH THEY ARE ENTITLED UNDER THE LAW AS THE
REGISTERED OWNERS WITH TORRENS TITLE IN THEIR NAMES.
3. WHEN IT DID NOT DISMISS THE THIRD-PARTY COMPLAINT DUE TO
NON-PAYMENT OF ANY FILING OR DOCKET FEE.
4. WHEN IT DENIED PETITIONERS THE RECOVERY OF THE
NECESSARY EXPENSES IN PROTECTING THEIR RIGHTS IN THIS
CASE."[10]
Petitioners question the admission by respondent Court of Appeals of
the third-party complaint by respondents Go against the AIA, Jose Quedding
and Li Ching Yao. Petitioners claim that the third-party complaint should not
have been considered by the Court of Appeals for lack of jurisdiction due to
third-party plaintiffs' failure to pay the docket and filing fees before the trial
court.
The third-party complaint in the instant case arose from the complaint of
petitioners against respondents Go. The complaint filed was for accion
publiciana, i.e., the recovery of possession of real property which is a real
action. The rule in this jurisdiction is that when an action is filed in court, the
complaint must be accompanied by the payment of the requisite docket and
filing fees.[11] In real actions, the docket and filing fees are based on the value
of the property and the amount of damages claimed, if any.[12] If the
complaint is filed but the fees are not paid at the time of filing, the court
acquires jurisdiction upon full payment of the fees within a reasonable time
as the court may grant, barring prescription.[13] Where the fees prescribed for
the real action have been paid but the fees of certain related damages are
not, the court, although having jurisdiction over the real action, may not have
acquired jurisdiction over the accompanying claim for
damages.[14] Accordingly, the court may expunge those claims for damages,
or allow, on motion, a reasonable time for amendment of the complaint so as
to allege the precise amount of damages and accept payment of the requisite
legal fees.[15] If there are unspecified claims, the determination of which may
arise after the filing of the complaint or similar pleading, the additional filing
fee thereon shall constitute a lien on the judgment award.[16] The same rule
also applies to third-party claims and other similar pleadings.[17]
In the case at bar, the third-party complaint filed by respondents Go was
incorporated in their answer to the complaint. The third-party complaint
sought the same remedy as the principal complaint but added a prayer for
attorney's fees and costs without specifying their amounts, thus:
"ON THE THIRD PARTY COMPLAINT
1. That summons be issued against Third-Party Defendants Araneta Institute
of Agriculture, Jose N. Quedding and Li Ching Yao;
2. That after hearing, they be sentenced to indemnify the Third-Party
Plaintiffs for whatever is adjudged against the latter in favor of the Plaintiffs;
3. That Third-Party Defendants be ordered to pay attorney's fees as may be
proved during trial;
4. That Third-Party Defendants be ordered to pay the costs.
Other just and equitable reliefs are also prayed for."[18]
The Answer with Third-Party Complaint was admitted by the trial court
without the requisite payment of filing fees, particularly on the Go's prayer for
damages.[19] The trial court did not award the Go's any damages. It dismissed
the third-party complaint. The Court of Appeals, however, granted the third-
party complaint in part by ordering third-party defendant Jose N. Quedding to
pay the Go's the sum of P5,000.00 as attorney's fees.
Contrary to petitioners' claim, the Court of Appeals did not err in
awarding damages despite the Go's failure to specify the amount prayed for
and pay the corresponding additional filing fees thereon. The claim for
attorney's fees refers to damages arising after the filing of the complaint
against the Go's. The additional filing fee on this claim is deemed to
constitute a lien on the judgment award.[20]
The Court of Appeals found that the subject portion is actually forty-two
(42) square meters in area, not forty-five (45), as initially found by the trial
court; that this forty-two (42) square meter portion is on the entire eastern
side of Lot No. 24 belonging to petitioners; that on this said portion is found
the concrete fence and pathway that extends from respondent Winston Go's
house on adjacent Lot No. 25; that inclusive of the subject portion,
respondents Go did not gain nor lose any portion of Lots Nos. 25 and 26; that
instead, Lot No. 27, on which respondent Li Ching Yao built his
house, encroached on the land of respondents Go, gaining in the process
thirty-seven (37) square meters of the latter's land.[21]
We hold that the Court of Appeals correctly dismissed the third-party
complaint against AIA. The claim that the discrepancy in the lot areas was
due to AIA's fault was not proved. The appellate court, however, found that it
was the erroneous survey by Engineer Quedding that triggered these
discrepancies. And it was this survey that respondent Winston Go relied
upon in constructing his house on his father's land. He built his house in the
belief that it was entirely within the parameters of his father's land. In short,
respondents Go had no knowledge that they encroached on petitioners'
lot. They are deemed builders in good faith[22] until the time petitioner
Ballatan informed them of their encroachment on her property.[23]
Respondent Li Ching Yao built his house on his lot before any of the
other parties did.[24] He constructed his house in 1982, respondents Go in
1983, and petitioners in 1985.[25] There is no evidence, much less, any
allegation that respondent Li Ching Yao was aware that when he built his
house he knew that a portion thereof encroached on respondents Go's
adjoining land. Good faith is always presumed, and upon him who alleges
bad faith on the part of a possessor rests the burden of proof.[26]
All the parties are presumed to have acted in good faith. Their rights
must, therefore, be determined in accordance with the appropriate provisions
of the Civil Code on property.
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,[27] or to oblige the one who built or planted to pay the price of the
land, and the one who sowed the proper rent. However, the builder or planter
cannot be obliged to buy the land if its value is considerably more than that of
the building or trees. In such case, he shall pay reasonable rent, if the owner
of the land does not choose to appropriate the building or trees after proper
indemnity. The parties shall agree upon the terms of the lease and in case of
disagreement, the court shall fix the terms thereof."
The 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
building, planting or sowing, after payment to the builder, planter or sower of
the necessary and useful expenses, and in the proper case, expenses for
pure luxury or mere pleasure. The owner of the land may also oblige the
builder, planter or sower to purchase and pay the price of the land. If the
owner chooses to sell his land, the builder, planter or sower must purchase
the land, otherwise the owner may remove the improvements thereon. The
builder, planter or sower, however, is not obliged to purchase the land if its
value is considerably more than the building, planting or sowing. In such
case, the builder, planter or sower must pay rent to the owner of the land. If
the parties cannot come to terms over the conditions of the lease, the court
must fix the terms thereof. The right to choose between appropriating the
improvement or selling the land on which the improvement stands to the
builder, planter or sower, is given to the owner of the land.[28]
Article 448 has been applied to improvements or portions of
improvements built by mistaken belief on land belonging to the adjoining
owner.[29] The facts of the instant case are similar to those inCabral v.
Ibanez,[30] to wit:
"[P]laintiffs Geronima Zabala and her husband Justino Bernardo, constructed
their house in the belief that it was entirely within the area of their own land
without knowing at that time that part of their house was occupying a 14-
square meter portion of the adjoining lot belonging to the defendants, and
that the defendants Bernardo M. Cabral and Mamerta M. Cabral were
likewise unaware of the fact that a portion of plaintiff's house was extending
and occupying a portion of their lot with an area of 14 square meters. The
parties came to know of the fact that part of the plaintiff's house was
occupying part of defendant's land when the construction of plaintiff's house
was about to be finished, after a relocation of the monuments of the two
properties had been made by the U.S. Army through the Bureau of Lands,
according to their 'Stipulation of Facts,' dated August 17, 1951.
On the basis of these facts, we held that:
"The Court, therefore, concludes that the plaintiffs are builders in good faith
and the relative rights of the defendant Mamerta Cabral as owner of the land
and of the plaintiffs as owners of the building is governed by Article 361 of
the Civil Code (Co Tao v. Joaquin Chan Chico, 46 Off. Gaz.5514). Article
361 of the old Civil Code has been reproduced with an additional provision in
Article 448 of the new Civil Code, approved June 18, 1949."[31]
Similarly, in Grana and Torralba v. Court of Appeals,[32] we held that:
"Although without any legal and valid claim over the land in question,
petitioners, however, were found by the Court of Appeals to have constructed
a portion of their house thereon in good faith. Under Article 361 of the old
Civil Code (Article 448 of the new), the owner of the land on which anything
has been built in good faith shall have the right to appropriate as his own the
building, after payment to the builder of necessary or useful expenses, and in
the proper case, expenses for pure luxury or mere pleasure, or to oblige the
builder to pay the price of the land. Respondents, as owners of the land,
have therefore the choice of either appropriating the portion of
petitioners' house which is on their land upon payment of the proper
indemnity to petitioners, or selling to petitioners that part of their land
on which stands the improvement. It may here be pointed out that it
would be impractical for respondents to choose to exercise the first
alternative, i.e., buy that portion of the house standing on their land, for
in that event the whole building might be rendered useless. The more
workable solution, it would seem, is for respondents to sell to
petitioners that part of their land on which was constructed a portion of
the latter's house. If petitioners are unwilling or unable to buy, then
they must vacate the land and must pay rentals until they do so. Of
course, respondents cannot oblige petitioners to buy the land if its
value is considerably more than that of the aforementioned portion of
the house. If such be the case, then petitioners must pay reasonable
rent. The parties must come to an agreement as to the conditions of the
lease, and should they fail to do so, then the court shall fix the same."[33]
In light of these rulings, petitioners, as owners of Lot No. 24, may
choose to purchase the improvement made by respondents Go on their land,
or sell to respondents Go the subject portion. If buying the improvement is
impractical as it may render the Go's house useless, then petitioners may sell
to respondents Go that portion of Lot No. 24 on which their improvement
stands. If the Go's are unwilling or unable to buy the lot, then they must
vacate the land and, until they vacate, they must pay rent to petitioners.
Petitioners, however, cannot compel respondents Go to buy the land if its
value is considerably more than the portion of their house constructed
thereon. If the value of the land is much more than the Go's improvement,
then respondents Go must pay reasonable rent. If they do not agree on the
terms of the lease, then they may go to court to fix the same.
In the event that petitioners elect to sell to respondents Go the subject
portion of their lot, the price must be fixed at the prevailing market value at
the time of payment. The Court of Appeals erred in fixing the price at the time
of taking, which is the time the improvements were built on the land. The time
of taking is determinative of just compensation in expropriation
proceedings. The instant case is not for expropriation. It is not a taking by the
state of private property for a public purpose upon payment of just
compensation. This is a case of an owner who has been paying real estate
taxes on his land but has been deprived of the use of a portion of this land for
years. It is but fair and just to fix compensation at the time of payment.[34]
Article 448 and the same conditions abovestated also apply to
respondents Go as owners and possessors of their land and respondent Li
Ching Yao as builder of the improvement that encroached on thirty-seven (37)
square meters of respondents Go's land.
IN VIEW WHEREOF, the decision of respondent Court of Appeals is
modified as follows:
(1) Petitioners are ordered to exercise within thirty (30) days from finality
of this decision their option to either buy the portion of respondents Go's
improvement on their Lot No. 24, or sell to said respondents the portion of
their land on which the improvement stands. If petitioners elect to sell the
land or buy the improvement, the purchase price must be at the prevailing
market price at the time of payment. If buying the improvement will render
respondents Go's house useless, then petitioners should sell the encroached
portion of their land to respondents Go. If petitioners choose to sell the land
but respondents Go are unwilling or unable to buy, then the latter must
vacate the subject portion and pay reasonable rent from the time petitioners
made their choice up to the time they actually vacate the premises. But if the
value of the land is considerably more than the value of the improvement,
then respondents Go may elect to lease the land, in which case the parties
shall agree upon the terms of the lease.Should they fail to agree on said
terms, the court of origin is directed to fix the terms of the lease.
From the moment petitioners shall have exercised their option,
respondents Go shall pay reasonable monthly rent up to the time the parties
agree on the terms of the lease or until the court fixes such terms.
(2) Respondents Go are likewise directed to exercise their rights as
owners of Lots Nos. 25 and 26, vis-a-vis respondent Li Ching Yao as builder
of the improvement that encroached on thirty seven (37) square meters of
respondents Go's land in accordance with paragraph one abovementioned.
(3) The Decision of the Court of Appeals ordering Engineer Quedding,
as third-party defendant, to pay attorney's fees of P5,000.00 to respondents
Go is affirmed. The additional filing fee on the damages constitutes a lien on
this award.
(4) The Decision of the Court of Appeals dismissing the third-party
complaint against Araneta Institute of Agriculture is affirmed.
SO ORDERED.
Bellosillo, (Chairman), Mendoza, Quisumbing, and Buena, JJ., concur.
37 & 38.
[G.R. No. 107132. October 8, 1999]
MAXIMA HEMEDES, petitioner, vs. THE HONORABLE COURT OF
APPEALS, DOMINIUM REALTY AND CONSTRUCTION CORPORATION,
ENRIQUE D. HEMEDES, and R & B INSURANCE
CORPORATION, respondents.
[G.R. No. 108472. October 8, 1999]
R & B INSURANCE CORPORATION, petitioner, vs. THE HONORABLE
COURT OF APPEALS DOMINIUM REALTY AND CONSTRUCTION
CORPORATION, ENRIQUE D. HEMEDES and MAXIMA
HEMEDES, respondents.
DECISION
GONZAGA_REYES, J.:
Assailed in these petitions for review on certiorari is the decision[1] of the
eleventh division of the Court of Appeals in CA-G.R. CV No. 22010
promulgated on September 11, 1992 affirming in toto the decision of Branch
24 of the Regional Trial Court of Laguna in Civil Case No. B-1766 dated
February 22, 1989,[2] and the resolution dated December 29, 1992 denying
petitioner R & B Insurance Corporations (R & B Insurance) motion for
reconsideration. As the factual antecedents and issues are the same, we
shall decide the petitions jointly.
The instant controversy involves a question of ownership over an
unregistered parcel of land, identified as Lot No. 6, plan Psu-111331, with an
area of 21,773 square meters, situated in Sala, Cabuyao, Laguna. It was
originally owned by the late Jose Hemedes, father of Maxima Hemedes and
Enrique D. Hemedes. On March 22, 1947 Jose Hemedes executed a
document entitled Donation Inter Vivos With Resolutory
Conditions[3] whereby he conveyed ownership over the subject land, together
with all its improvements, in favor of his third wife, Justa Kauapin, subject to
the following resolutory conditions:
(a) Upon the death or remarriage of the DONEE, the title to the property
donated shall revert to any of the children, or their heirs, of the DONOR
expressly designated by the DONEE in a public document conveying the
property to the latter; or
(b) In absence of such an express designation made by the DONEE before
her death or remarriage contained in a public instrument as above provided,
the title to the property shall automatically revert to the legal heirs of the
DONOR in common.
Pursuant to the first condition abovementioned, Justa Kausapin
executed on September 27, 1960 a Deed of Conveyance of Unregistered
Real Property by Reversion[4] conveying to Maxima Hemedes the subject
property under the following terms -
That the said parcel of land was donated unto me by the said Jose Hemedes,
my deceased husband, in a deed of DONATION INTER VIVOS WITH
RESOLUTORY CONDITIONS executed by the donor in my favor, and duly
accepted by me on March 22, 1947, before Notary Public Luis Bella in
Cabuyao, Laguna;
That the donation is subject to the resolutory conditions appearing in the said
deed of DONATION INTER VIVOS WITH RESOLUTORY CONDITIONS, as
follows:
(a) Upon the death or remarriage of the DONEE, the title to the property
donated shall revert to any of the children, or their heirs, of the DONOR
expressly designated by the DONEE in a public document conveying the
property to the latter; or
(b) In absence of such an express designation made by the DONEE before
her death or remarriage contained in a public instrument as above provided,
the title to the property shall automatically revert to the legal heirs of the
DONOR in common.
That, wherefore, in virtue of the deed of donation above mentioned and in the
exercise of my right and privilege under the terms of the first resolutory
condition therein contained and hereinabove reproduced, and for and in
consideration of my love and affection, I do hereby by these presents convey,
transfer, and deed unto my designee, MAXIMA HEMEDES, of legal age,
married to RAUL RODRIGUEZ, Filipino and resident of No. 15 Acacia Road,
Quezon City, who is one of the children and heirs of my donor, JOSE
HEMEDES, the ownership of, and title to the property hereinabove described,
and all rights and interests therein by reversion under the first resolutory
condition in the above deed of donation; Except the possession and
enjoyment of the said property which shall remain vested in me during my
lifetime, or widowhood and which upon my death or remarriage shall also
automatically revert to, and be transferred to my designee, Maxima Hemedes.
Maxima Hemedes, through her counsel, filed an application for
registration and confirmation of title over the subject unregistered
land. Subsequently, Original Certificate of Title (OCT) No. (0-941) 0-
198[5] was issued in the name of Maxima Hemedes married to Raul
Rodriguez by the Registry of Deeds of Laguna on June 8, 1962, with the
annotation that Justa Kausapin shall have the usufructuary rights over the
parcel of land herein described during her lifetime or widowhood.
It is claimed by R & B Insurance that on June 2, 1964, Maxima
Hemedes and her husband Raul Rodriguez constituted a real estate
mortgage over the subject property in its favor to serve as security for a loan
which they obtained in the amount of P6,000.00. On February 22, 1968, R &
B Insurance extrajudicially foreclosed the mortgage since Maxima Hemedes
failed to pay the loan even after it became due on August 2, 1964. The land
was sold at a public auction on May 3, 1968 with R & B Insurance as the
highest bidder and a certificate of sale was issued by the sheriff in its
favor. Since Maxima Hemedes failed to redeem the property within the
redemption period, R & B Insurance executed an Affidavit of Consolidation
dated March 29, 1974 and on May 21, 1975 the Register of Deeds of Laguna
cancelled OCT No. (0-941) 0-198 and issued Transfer Certificate of Title
(TCT) No. 41985 in the name of R & B Insurance. The annotation of usufruct
in favor of Justa Kausapin was maintained in the new title.[6]
Despite the earlier conveyance of the subject land in favor of Maxima
Hemedes, Justa Kausapin executed a Kasunduan on May 27, 1971 whereby
she transferred the same land to her stepson Enrique D. Hemedes, pursuant
to the resolutory condition in the deed of donation executed in her favor by
her late husband Jose Hemedes. Enrique D. Hemedes obtained two
declarations of real property - in 1972, and again, in 1974, when the
assessed value of the property was raised. Also, he has been paying the
realty taxes on the property from the time Justa Kausapin conveyed the
property to him in 1971 until 1979. In the cadastral survey of Cabuyao,
Laguna conducted from September 8, 1974 to October 10, 1974, the
property was assigned Cadastral No. 2990, Cad. 455-D, Cabuyao Cadastre,
in the name of Enrique Hemedes. Enrique Hemedes is also the named
owner of the property in the records of the Ministry of Agrarian Reform office
at Calamba, Laguna.
On February 28, 1979, Enriques D. Hemedes sold the property to
Dominium Realty and Construction Corporation (Dominium). On April 10,
1981, Justa Kausapin executed an affidavit affirming the conveyance of the
subject property in favor of Enrique D. Hemedes as embodied in the
Kasunduan dated May 27, 1971, and at the same time denying the
conveyance made to Maxima Hemedes.
On May 14, 1981, Dominium leased the property to its sister corporation
Asia Brewery, Inc. (Asia Brewery) who, even before the signing of the
contract of lease, constructed two warehouses made of steel and asbestos
costing about P10,000,000.00 each. Upon learning of Asia Brewerys
constructions upon the subject property, R & B Insurance sent it a letter on
March 16, 1981 informing the former of its ownership of the property as
evidenced by TCT No. 41985 issued in its favor and of its right to appropriate
the constructions since Asia Brewery is a builder in bad faith. On March 27,
1981, a conference was held between R & B Insurance and Asia Brewery but
they failed to arrive at an amicable settlement.
On May 8, 1981, Maxima Hemedes also wrote a letter addressed to
Asia Brewery wherein she asserted that she is the rightful owner of the
subject property by virtue of OCT No. (0-941) 0-198 and that, as such, she
has the right to appropriate Asia Brewerys constructions, to demand its
demolition, or to compel Asia Brewery to purchase the land. In another letter
of the same date addressed to R & B Insurance, Maxima Hemedes denied
the execution of any real estate mortgage in favor of the latter.
On August 27, 1981, Dominium and Enrique D. Hemedes filed a
complaint[7] with the Court of First Instance of Binan, Laguna for the
annulment of TCT No. 41985 issued in favor of R & B Insurance and/or the
reconveyance to Dominium of the subject property. Specifically, the
complaint alleged that Dominium was the absolute owner of the subject
property by virtue of the February 28, 1979 deed of sale executed by Enrique
D. Hemedes, who in turn obtained ownership of the land from Justa
Kausapin, as evidenced by the Kasunduan dated May 27, 1971. The
plaintiffs asserted that Justa Kausapin never transferred the land to Maxima
Hemedes and that Enrique D. Hemedes had no knowledge of the registration
proceedings initiated by Maxima Hemedes.
After considering the merits of the case, the trial court rendered
judgment on February 22, 1989 in favor of plaintiffs Dominium and Enrique D.
Hemedes, the dispositive portion of which states
WHEREFORE, judgment is hereby rendered:
(a) Declaring Transfer Certificate of Title No. 41985 of the Register
of Deeds of Laguna null and void and ineffective;
(b) Declaring Dominium Realty and Construction Corporation the
absolute owner and possessor of the parcel of land described in
paragraph 3 of the complaint;
(c) Ordering the defendants and all persons acting for and/or under
them to respect such ownership and possession of Dominium
Realty and Construction Corporation and to forever desist from
asserting adverse claims thereon nor disturbing such ownership
and possession; and
(d) Directing the Register of Deeds of Laguna to cancel said
Transfer Certificate of Title No. 41985 in the name of R & B
Insurance Corporation, and in lieu thereof, issue a new transfer
certificate of title in the name of Dominium Realty and
Construction Corporation. No pronouncement as to costs and
attorneys fees.[8]
Both R & B Insurance and Maxima Hemedes appealed from the trial
courts decision. On September 11, 1992 the Court of Appeals affirmed the
assailed decision in toto and on December 29, 1992, it denied R & B
Insurances motion for reconsideration. Thus, Maxima Hemedes and R & B
Insurance filed their respective petitions for review with this Court on
November 3, 1992 and February 22, 1993, respectively.
In G.R. No. 107132[9], petitioner Maxima Hemedes makes the following
assignment of errors as regards public respondents ruling
I. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN
APPLYING ARTICLE 1332 OF THE NEW CIVIL CODE IN
DECLARING AS SPURIOUS THE DEED OF CONVEYANCE
OF UNREGISTERED REAL PROPERTY BY REVERSION
EXECUTED BY JUSTA KAUSAPIN IN FAVOR OF PETITIONER
MAXIMA HEMEDES.
II. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN NOT
FINDING AS VOID AND OF NO LEGAL EFFECT THE KASUNDUAN
DATED 27 MAY 1971 EXECUTED BY JUSTA KAUSAPIN IN FAVOR OF
RESPONDENT ENRIQUE HEMEDES AND THE SALE OF THE SUBJECT
PROPERTY BY RESPONDENT ENRIQUE HEMEDES IN FAVOR OF
RESPONDENT DOMINIUM REALTY AND CONSTRUCTION
CORPORATION.
III. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN NOT
FINDING RESPONDENTS ENRIQUE AND DOMINIUM IN BAD FAITH.
IV. RESPONDENT COURT OF APPEALS GRAVELY ERRED IN
DECLARING THAT ORIGINAL CERTIFICATE OF TITLE NO. (0-941) 0-198
ISSUED IN THE NAME OF PETITIONER MAXIMA HEMEDES NULL AND
VOID.
V. RESPONDENT COURT OF APPEALS ERRED IN NOT FINDING THAT
NO LOAN WAS OBTAINED BY PETITIONER MAXIMA HEMEDES FROM
RESPONDENT R & B INSURANCE CORPORATION.
VI. RESPONDENT COURT OF APPEALS ERRED IN NOT FINDING THAT
NO REAL ESTATE MORTGAGE OVER THE SUBJECT PROPERTY WAS
EXECUTED BY PETITIONER MAXIMA HEMEDES IN FAVOR OF
RESPONDENT R & B INSURANCE CORPORATION.
VII. RESPONDENT COURT OF APPEALS ERRED IN NOT FINDING THAT
THE VALID TITLE COVERING THE SUBJECT PROPERTY IS THE
ORIGINAL CERTIFICATE OF TITLE NO. (0-941) 0-198 IN THE NAME OF
PETITIONER MAXIMA HEMEDES AND NOT THE TRANSFER
CERTIFICATE OF TITLE (TCT) NO. 41985 IN THE NAME OF R & B
INSURANCE CORPORATION.[10]
Meanwhile, in G.R. No. 108472[11], petitioner R & B Insurance assigns
almost the same errors, except with regards to the real estate mortgage
allegedly executed by Maxima Hemedes in its favor.Specifically, R & B
Insurance alleges that:
I. RESPONDENT COURT ERRONEOUSLY ERRED IN
APPLYING ARTICLE 1332 OF THE CIVIL CODE.
II. RESPONDENT COURT SERIOUSLY ERRED IN GIVING
CREDENCE ON (sic) THE KASUNDUAN BY AND BETWEEN
JUSTA KAUSAPIN AND ENRIQUE NOTWITHSTANDING THE
FACT THAT JUSTA KAUSAPIN BY WAY OF A DEED OF
CONVEYANCE OF UNREGISTERED REAL PROPERTY BY
REVERSION CEDED THE SUBJECT PROPERTY TO MAXIMA
SOME ELEVEN (11) YEARS EARLIER.
III. RESPONDENT COURT SERIOUSLY ERRED IN GIVING
CREDENCE ON (sic) THE AFFIDAVIT OF REPUDIATION OF
JUSTA KAUSAPIN NOTWITHSTANDING THE FACT THAT
SHE IS A BIAS (sic) WITNESS AND EXECUTED THE SAME
 SOME TWENTY-ONE (21) YEARS AFTER THE EXECUTION
OF THE DEED OF CONVEYANCE IN FAVOR OF MAXIMA.
IV. RESPONDENT COURT SERIOUSLY ERRED IN NOT FINDING
THAT THE COMPLAINT OF ENRIQUE AND DOMINIUM HAS
PRESCRIBED AND/OR THAT ENRIQUE AND DOMINIUM
WERE GUILTY OF LACHES.
V. RESPONDENT COURT SERIOUSLY ERRED IN FINDING R &
B AS A MORTGAGEE NOT IN GOOD FAITH.
VI. RESPONDENT COURT SERIOUSLY ERRED IN NOT
GRANTING THE DAMAGES PRAYED FOR BY R & B IN ITS
COUNTERCLAIM AND CROSSCLAIM.[12]
The primary issue to be resolved in these consolidated petitions is which
of the two conveyances by Justa Kausapin, the first in favor of Maxima
Hemedes and the second in favor of Enrique D. Hemedes, effectively
transferred ownership over the subject land.
The Register of Deeds of Laguna issued OCT No. (0-941) 0-198 in favor
of Maxima Hemedes on the strength of the Deed of Conveyance of
Unregistered Real Property by Reversion executed by Justa
Kausapin. Public respondent upheld the trial courts finding that such deed is
sham and spurious and has no evidentiary value under the law upon which
claimant Maxima Hemedes may anchor a valid claim of ownership over the
property. In ruling thus, it gave credence to the April 10, 1981 affidavit
executed by Justa Kausapin repudiating such deed of conveyance in favor of
Maxima Hemedes and affirming the authenticity of the Kasunduan in favor of
Enrique D. Hemedes. Also, it considered as pivotal the fact that the deed of
conveyance in favor of Maxima Hemedes was in English and that it was not
explained to Justa Kausapin, although she could not read nor understand
English; thus, Maxima Hemedes failed to discharge her burden, pursuant to
Article 1332 of the Civil Code, to show that the terms thereof were fully
explained to Justa Kausapin. Public respondent concluded by holding that
the registration of the property on the strength of the spurious deed of
conveyance is null and void and does not confer any right of ownership upon
Maxima Hemedes. [13]
Maxima Hemedes argues that Justa Kausapins affidavit should not be
given any credence since she is obviously a biased witness as it has been
shown that she is dependent upon Enrique D. Hemedes for her daily
subsistence, and she was most probably influenced by Enrique D. Hemedes
to execute the Kasunduan in his favor. She also refutes the applicability of
article 1332. It is her contention that for such a provision to be applicable,
there must be a party seeking to enforce a contract; however, she is not
enforcing the Deed of Conveyance of Unregistered Real Property by
Reversion as her basis in claiming ownership, but rather her claim is
anchored upon OCT No. (0-941) 0-198 issued in her name, which document
can stand independently from the deed of conveyance. Also, there exist
various circumstances which show that Justa Kausapin did in fact execute
and understand the deed of conveyance in favor of Maxima Hemedes. First,
the Donation Intervivos With Resolutory Conditions executed by Jose
Hemedes in favor of Justa Kausapin was also in English, but she never
alleged that she did not understand such document. Secondly, Justa
Kausapin failed to prove that it was not her thumbmark on the deed of
conveyance in favor of Maxima Hemedes and in fact, both Enrique D.
Hemedes and Dominium objected to the request of Maxima Hemedes
counsel to obtain a specimen thumbmark of Justa Kausapin.[14]
Public respondents finding that the Deed of Conveyance of
Unregistered Real Property By Reversion executed by Justa Kausapin in
favor of Maxima Hemedes is spurious is not supported by the factual findings
in this case.. It is grounded upon the mere denial of the same by Justa
Kausapin. A party to a contract cannot just evade compliance with his
contractual obligations by the simple expedient of denying the execution of
such contract. If, after a perfect and binding contract has been executed
between the parties, it occurs to one of them to allege some defect therein as
a reason for annulling it, the alleged defect must be conclusively proven,
since the validity and fulfillment of contracts cannot be left to the will of one of
the contracting parties.[15]
Although a comparison of Justa Kausapins thumbmark with the
thumbmark affixed upon the deed of conveyance would have easily cleared
any doubts as to whether or not the deed was forged, the records do not
show that such evidence was introduced by private respondents and the
lower court decisions do not make mention of any comparison having been
made.[16] It is a legal presumption that evidence willfully suppressed would be
adverse if produced.[17] The failure of private respondents to refute the due
execution of the deed of conveyance by making a comparison with Justa
Kausapins thumbmark necessarily leads one to conclude that she did in fact
affix her thumbmark upon the deed of donation in favor of her stepdaughter.
Moreover, public respondents reliance upon Justa Kausapins
repudiation of the deed of conveyance is misplaced for there are strong
indications that she is a biased witness. The trial court found that Justa
Kausapin was dependent upon Enrique D. Hemedes for financial
assistance.[18] Justa Kausapins own testimony attests to this fact -
Atty. Conchu:
Q: Aling Justa, can you tell the Honorable Court why you donated this
particular property to Enrique Hemedes?
A: Because I was in serious condition and he was the one supporting me
financially.
 Q: As of today, Aling Justa are you continuing to receive any assistance
from Enrique Hemedes?
A: Yes Sir.
(TSN pp. 19 and 23, November 17, 1981)[19]
Even Enrique Hemedes admitted that Justa Kausapin was dependent upon
him for financial support. The transcripts state as follows:
Atty. Mora:
Now you said that Justa Kausapin has been receiving from you advances
for food, medicine & other personal or family needs?
E. Hemedes:
A: Yes.
Q: Was this already the practice at the time this Kasunduan was executed?
A: No that was increased, no, no, after this document.
xxx xx xxx
Q: And because of these accommodations that you have given to Justa
Kausapin; Justa Kausapin has in turn treated you very well because
shes very grateful for that, is it not?
A: I think thats human nature.
Q: Answer me categorically, Mr. Hemedes shes very grateful?
A: Yes she might be grateful but not very grateful.
(TSN, p. 34, June 15, 1984)[20]
A witness is said to be biased when his relation to the cause or to the
parties is such that he has an incentive to exaggerate or give false color to
his statements, or to suppress or to pervert the truth, or to state what is
false.[21] At the time the present case was filed in the trial court in 1981, Justa
Kausapin was already 80 years old, suffering from worsening physical
infirmities and completely dependent upon her stepson Enrique D. Hemedes
for support. It is apparent that Enrique D. Hemedes could easily have
influenced his aging stepmother to donate the subject property to him. Public
respondent should not have given credence to a witness that was obviously
biased and partial to the cause of private respondents. Although it is a well-
established rule that the matter of credibility lies within the province of the
trial court, such rule does not apply when the witness credibility has been put
in serious doubt, such as when there appears on the record some fact or
circumstance of weight and influence, which has been overlooked or the
significance of which has been misinterpreted.[22]
Finally, public respondent was in error when it sustained the trial courts
decision to nullify the Deed of Conveyance of Unregistered Real Property by
Reversion for failure of Maxima Hemedes to comply with article 1332 of the
Civil Code, which states:
When one of the parties is unable to read, or if the contract is in a language
not understood by him, and mistake or fraud is alleged, the person enforcing
the contract must show that the terms thereof have been fully explained to
the former.
Article 1332 was intended for the protection of a party to a contract who
is at a disadvantage due to his illiteracy, ignorance, mental weakness or
other handicap.[23] This article contemplates a situation wherein a contract
has been entered into, but the consent of one of the parties is vitiated by
mistake or fraud committed by the other contracting party.[24] This is apparent
from the ordering of the provisions under Book IV, Title II, Chapter 2, section
1 of the Civil Code, from which article 1332 is taken. Article 1330 states that -
A contract where consent is given through mistake, violence, intimidation,
undue influence, or fraud is voidable.
This is immediately followed by provisions explaining what constitutes
mistake, violence, intimidation, undue influence, or fraud sufficient to vitiate
consent.[25] In order that mistake may invalidate consent, it should refer to the
substance of the thing which is the object of the contract, or to those
conditions which have principally moved one or both parties to enter into the
contract.[26] Fraud, on the other hand, is present when, through insidious
words or machinations of one of the contracting parties, the other is induced
to enter into a contract which, without them, he would not have agreed
to.[27] Clearly, article 1332 assumes that the consent of the contracting party
imputing the mistake or fraud was given, although vitiated, and does not
cover a situation where there is a complete absence of consent.
In this case, Justa Kausapin disclaims any knowledge of the Deed of
Conveyance of Unregistered Real Property by Reversion in favor of Maxima
Hemedes. In fact, she asserts that it was only during the hearing conducted
on December 7, 1981 before the trial court that she first caught a glimpse of
the deed of conveyance and thus, she could not have possibly affixed her
thumbmark thereto.[28] It is private respondents own allegations which render
article 1332 inapplicable for it is useless to determine whether or not Justa
Kausapin was induced to execute said deed of conveyance by means of
fraud employed by Maxima Hemedes, who allegedly took advantage of the
fact that the former could not understand English, when Justa Kausapin
denies even having seen the document before the present case was initiated
in 1981.
 It has been held by this Court that mere preponderance of evidence is
not sufficient to overthrow a certificate of a notary public to the effect that the
grantor executed a certain document and acknowledged the fact of its
execution before him. To accomplish this result, the evidence must be so
clear, strong and convincing as to exclude all reasonable controversy as to
the falsity of the certificate, and when the evidence is conflicting, the
certificate will be upheld.[29] In the present case, we hold that private
respondents have failed to produce clear, strong, and convincing evidence to
overcome the positive value of the Deed of Conveyance of Unregistered
Real Property by Reversion a notarized document. The mere denial of its
execution by the donor will not suffice for the purpose.
In upholding the deed of conveyance in favor of Maxima Hemedes, we
must concomitantly rule that Enrique D. Hemedes and his transferee,
Dominium, did not acquire any rights over the subject property. Justa
Kausapin sought to transfer to her stepson exactly what she had earlier
transferred to Maxima Hemedes the ownership of the subject property
pursuant to the first condition stipulated in the deed of donation executed by
her husband. Thus, the donation in favor of Enrique D. Hemedes is null and
void for the purported object thereof did not exist at the time of the transfer,
having already been transferred to his sister.[30] Similarly, the sale of the
subject property by Enrique D. Hemedes to Dominium is also a nullity for the
latter cannot acquire more rights than its predecessor-in-interest and is
definitely not an innocent purchaser for value since Enrique D. Hemedes did
not present any certificate of title upon which it relied.
The declarations of real property by Enrique D. Hemedes, his payment
of realty taxes, and his being designated as owner of the subject property in
the cadastral survey of Cabuyao, Laguna and in the records of the Ministry of
Agrarian Reform office in Calamba, Laguna cannot defeat a certificate of title,
which is an absolute and indefeasible evidence of ownership of the property
in favor of the person whose name appears therein.[31] Particularly, with
regard to tax declarations and tax receipts, this Court has held on several
occasions that the same do not by themselves conclusively prove title to
land.[32]
We come now to the question of whether or not R & B Insurance should
be considered an innocent purchaser of the land in question. At the outset,
we note that both the trial court and appellate court found that Maxima
Hemedes did in fact execute a mortgage over the subject property in favor of
R & B Insurance. This finding shall not be disturbed because, as we stated
earlier, it is a rule that the factual findings of the trial court, especially when
affirmed by the Court of Appeals, are entitled to respect, and should not be
disturbed on appeal.[33]
In holding that R & B Insurance is not a mortgagee in good faith, public
respondent stated that the fact that the certificate of title of the subject
property indicates upon its face that the same is subject to an
encumbrance, i.e. usufructuary rights in favor of Justa Kausapin during her
lifetime or widowhood, should have prompted R & B Insurance
to ...investigate further the circumstances behind this encumbrance on the
land in dispute, but which it failed to do. Also, public respondent considered
against R & B Insurance the fact that it made it appear in the mortgage
contract that the land was free from all liens, charges, taxes and
encumbrances.[34]
R & B Insurance alleges that, contrary to public respondents ruling, the
presence of an encumbrance on the certificate of title is not reason for the
purchaser or a prospective mortgagee to look beyond the face of the
certificate of title. The owner of a parcel of land may still sell the same even
though such land is subject to a usufruct; the buyers title over the property
will simply be restricted by the rights of the usufructuary. Thus, R & B
Insurance accepted the mortgage subject to the usufructuary rights of Justa
Kausapin. Furthermore, even assuming that R & B Insurance was legally
obliged to go beyond the title and search for any hidden defect or inchoate
right which could defeat its right thereto, it would not have discovered
anything since the mortgage was entered into in 1964, while the Kasunduan
conveying the land to Enrique D. Hemedes was only entered into in 1971
and the affidavit repudiating the deed of conveyance in favor of Maxima
Hemedes was executed by Justa Kausapin in 1981.[35]
We sustain petitioner R & B Insurances claim that it is entitled to the
protection of a mortgagee in good faith.
It is a well-established principle that every person dealing with
registered land may safely rely on the correctness of the certificate of title
issued and the law will in no way oblige him to go behind the certificate to
determine the condition of the property.[36] An innocent purchaser for
value[37] is one who buys the property of another without notice that some
other person has a right to or interest in such property and pays a full and fair
price for the same at the time of such purchase or before he has notice of the
claim of another person.[38]
The annotation of usufructuary rights in favor of Justa Kausapin upon
Maxima Hemedes OCT dose not impose upon R & B Insurance the
obligation to investigate the validity of its mortgagors title.Usufruct gives a
right to enjoy the property of another with the obligation of preserving its form
and substance.[39] The usufructuary is entitled to all the natural, industrial and
civil fruits of the property[40]and may personally enjoy the thing in usufruct,
lease it to another, or alienate his right of usufruct, even by a gratuitous title,
but all the contracts he may enter into as such usufructuary shall terminate
upon the expiration of the usufruct.[41]
Clearly, only the jus utendi and jus fruendi over the property is
transferred to the usufructuary. [42] The owner of the property maintains
the jus disponendi or the power to alienate, encumber, transform, and even
destroy the same.[43] This right is embodied in the Civil Code, which provides
that the owner of property the usufruct of which is held by another, may
alienate it, although he cannot alter the propertys form or substance, or do
anything which may be prejudicial to the usufructuary.[44]
There is no doubt that the owner may validly mortgage the property in
favor of a third person and the law provides that, in such a case, the
usufructuary shall not be obliged to pay the debt of the mortgagor, and
should the immovable be attached or sold judicially for the payment of the
debt, the owner shall be liable to the usufructuary for whatever the latter may
lose by reason thereof.[45]
Based on the foregoing, the annotation of usufructuary rights in favor of
Justa Kausapin is not sufficient cause to require R & B Insurance to
investigate Maxima Hemedes title, contrary to public respondents ruling, for
the reason that Maxima Hemedes ownership over the property remained
unimpaired despite such encumbrance. R & B Insurance had a right to rely
on the certificate of title and was not in bad faith in accepting the property as
a security for the loan it extended to Maxima Hemedes.
Even assuming in gratia argumenti that R & B Insurance was obligated
to look beyond the certificate of title and investigate the title of its mortgagor,
still, it would not have discovered any better rights in favor of private
respondents. Enrique D. Hemedes and Dominium base their claims to the
property upon the Kasunduan allegedly executed by Justa Kausapin in favor
of Enrique Hemedes. As we have already stated earlier, such contract is a
nullity as its subject matter was inexistent. Also, the land was mortgaged to R
& B Insurance as early as 1964, while the Kasunduan was executed only in
1971 and the affidavit of Justa Kausapin affirming the conveyance in favor of
Enrique D. Hemedes was executed in 1981. Thus, even if R & B Insurance
investigated the title of Maxima Hemedes, it would not have discovered any
adverse claim to the land in derogation of its mortgagors title. We reiterate
that at no point in time could private respondents establish any rights or
maintain any claim over the land.
It is a well-settled principle that where innocent third persons rely upon
the correctness of a certificate of title and acquire rights over the property,
the court cannot just disregard such rights. Otherwise, public confidence in
the certificate of title, and ultimately, the Torrens system, would be impaired
for everyone dealing with registered property would still have to inquire at
every instance whether the title has been regularly or irregularly
issued.[46] Being an innocent mortgagee for value, R & B Insurance validly
acquired ownership over the property, subject only to the usufructuary rights
of Justa Kausapin thereto, as this encumbrance was properly annotated
upon its certificate of title.
The factual findings of the trial court, particularly when affirmed by the
appellate court, carry great weight and are entitled to respect on appeal,
except under certain circumstances.[47] One such circumstance that would
compel the Court to review the factual findings of the lower courts is where
the lower courts manifestly overlooked certain relevant facts not disputed by
the parties and which, if properly considered, would justify a different
conclusion.[48] Also, it is axiomatic that the drawing of the proper legal
conclusions from such factual findings are within the peculiar province of this
Court.[49]
As regards R & B Insurances prayer that Dominium be ordered to
demolish the warehouses or that it be declared the owner thereof since the
same were built in bad faith, we note that such warehouses were constructed
by Asia Brewery, not by Dominium. However, despite its being a necessary
party in the present case, the lower courts never acquired jurisdiction over
Asia Brewery, whether as a plaintiff or defendant, and their respective
decisions did not pass upon the constructions made upon the subject
property. Courts acquire jurisdiction over a party plaintiff upon the filing of the
complaint, while jurisdiction over the person of a party defendant is acquired
upon the service of summons in the manner required by law or by his
voluntary appearance. As a rule, if a defendant has not been summoned, the
court acquires no jurisdiction over his person, and any personal judgment
rendered against such defendant is null and void.[50] In the present case,
since Asia Brewery is a necessary party that was not joined in the action, any
judgment rendered in this case shall be without prejudice to its rights.[51]
As to its claim for moral damages, we hold that R & B Insurance is not
entitled to the same for it has not alleged nor proven the factual basis for the
same. Neither is it entitled to exemplary damages, which may only be
awarded if the claimant is entitled to moral, temperate, liquidated or
compensatory damages.[52] R & B Insurances claim for attorneys fees must
also fail. The award of attorneys fees is the exception rather than the rule
and counsels fees are not to be awarded every time a party wins a suit. Its
award pursuant to article 2208 of the Civil Code demands factual, legal and
equitable justification and cannot be left to speculation and
conjecture.[53] Under the circumstances prevailing in the instant case, there is
no factual or legal basis for an award of attorneys fees.
WHEREFORE, the assailed decision of public respondent and its
resolution dated February 22, 1989 are REVERSED. We uphold petitioner R
& B Insurances assertion of ownership over the property in dispute, as
evidenced by TCT No. 41985, subject to the usufructuary rights of Justa
Kausapin, which encumbrance has been properly annotated upon the said
certificate of title. No pronouncement as to costs.
SO ORDERED.
Panganiban, and Purisima, JJ., concur.
39. [G.R. No. 112483. October 8, 1999]
ELOY IMPERIAL, petitioner vs. COURT OF APPEALS, REGIONAL TRIAL
COURT OF LEGASPI CITY, CESAR VILLALON, JR., TERESA VILLALON,
ANTONIO VILLALON, AUGUSTO VILLALON, ROBERTO VILLALON,
RICARDO VILLALON and ESTHER VILLALON, respondents.
DECISION
GONZAGA-REYES, J.:
Petitioner seeks to set aside the Decision of the Court of Appeals in
C.A.-G.R. CV No. 31976[1], affirming the Decision of the Regional Trial Court
of Legazpi City[2], which rendered inofficious the donation made by Leoncio
Imperial in favor of herein petitioner, to the extent that it impairs the legitime
of Victor Imperial, and ordering petitioner to convey to herein private
respondents, heirs of said Victor Imperial, that portion of the donated land
proportionate to Victor Imperials legitime.
Leoncio Imperial was the registered owner of a 32,837-square meter
parcel of land covered by Original Certificate of Title No. 200, also known as
Lot 45 of the Cadastral Survey of Albay. On July 7, 1951, Leoncio sold the
said lot for P1.00 to his acknowledged natural son, petitioner herein, who
then acquired title over the land and proceeded to subdivide it into several
lots. Petitioner and private respondents admit that despite the contracts
designation as one of Absolute Sale, the transaction was in fact a donation.
On July 28, 1953, or barely two years after the donation, Leoncio filed a
complaint for annulment of the said Deed of Absolute Sale, docketed as Civil
Case No. 1177, in the then Court of First Instance of Albay, on the ground
that he was deceived by petitioner herein into signing the said
document. The dispute, however, was resolved through a compromise
agreement, approved by the Court of First Instance of Albay on November 3,
1961[3], under which terms: (1) Leoncio recognized the legality and validity of
the rights of petitioner to the land donated; and (2) petitioner agreed to sell a
designated 1,000-square meter portion of the donated land, and to deposit
the proceeds thereof in a bank, for the convenient disposal of Leoncio. In
case of Leoncios death, it was agreed that the balance of the deposit will be
withdrawn by petitioner to defray burial costs.
On January 8, 1962, and pending execution of the above judgment,
Leoncio died, leaving only two heirs --- the herein petitioner, who is his
acknowledged natural son, and an adopted son, Victor Imperial. On March 8,
1962, Victor was substituted in place of Leoncio in the above-mentioned
case, and it was he who moved for execution of judgment. On March 15,
1962, the motion for execution was duly granted.
Fifteen years thereafter, or on July 26, 1977, Victor died single and
without issue, survived only by his natural father, Ricardo Villalon, who was a
lessee of a portion of the disputed land. Four years hence, or on September
25, 1981, Ricardo died, leaving as his only heirs his two children, Cesar and
Teresa Villalon.
Five years thereafter, or sometime in 1986, Cesar and Teresa filed a
complaint for annulment of the donation with the Regional Trial Court of
Legazpi City, docketed as Civil Case No. 7646. Petitioner moved to dismiss
on the ground of res judicata, by virtue of the compromise judgment rendered
by the Court of First Instance of Albay. The trial court granted the motion to
dismiss, but the Court of Appeals reversed the trial courts order and
remanded the case for further proceedings.
On October 18, 1989, Cesar and Teresa filed an amended complaint in
the same case, Civil Case No. 7646, for Annulment of Documents,
Reconveyance and Recovery of Possession with the Regional Trial Court of
Legazpi City, seeking the nullification of the Deed of Absolute Sale affecting
the above property, on grounds of fraud, deceit and inofficiousness. In the
amended complaint, it was alleged that petitioner caused Leoncio to execute
the donation by taking undue advantage of the latters physical weakness and
mental unfitness, and that the conveyance of said property in favor of
petitioner impaired the legitime of Victor Imperial, their natural brother and
predecessor-in-interest.[4]
In his Answer, petitioner: (1) alleged that Leoncio had conveyed
sufficient property to Victor to cover his legitime, consisting of 563 hectares
of agricultural land in Manito, Albay; (2) reiterated the defense of res judicata,
and (3) raised the additional defenses of prescription and laches.
Plaintiff Cesar Villalon died on December 26, 1989, while the case was
pending in the Regional Trial Court, and was substituted in this action by his
sons, namely, Antonio, Roberto, Augusto, Ricardo and Cesar, Jr., all
surnamed Villalon, and his widow, Esther H. Villalon.
The RTC held the donation to be inofficious and impairing the legitime of
Victor, on the basis of its finding that at the time of Leoncios death, he left no
property other than the 32,837-square meter parcel of land which he had
donated to petitioner. The RTC went on further to state that petitioners
allegation that other properties existed and were inherited by Victor was not
substantiated by the evidence.[5]
The legitime of Victor was determined by the trial court in this manner:
Considering that the property donated is 32,837 square meters, one half of
that or 16,418 square meters becomes the free portion of Leoncio which
could be absorbed in the donation to defendant. The other half, which is also
16,418 square meters is where the legitime of the adopted son Victor
Imperial has to be taken.
The proportion of the legitime of the legitimate child (including the adopted
child) in relation to the acknowledged natural child (defendant) is 10 is to 5[,]
with the acknowledged natural child getting of the legitime of the legitimate
(adopted) child, in accordance with Art. 895 of the New Civil Code which
provides:
The legitime of each of the acknowledged natural children and each of the
natural children by legal fiction shall consist of one-half of the legitime of
each of the legitimate children or descendants.
From the 16,418 square meters left (after the free portion has been taken)
plaintiffs are therefore entitled to 10,940 square meters while defendant gets
5,420 square meters.[6]
The trial court likewise held that the applicable prescriptive period is 30
years under Article 1141 of the Civil Code[7], reckoned from March 15, 1962,
when the writ of execution of the compromise judgment in Civil Case 1177
was issued, and that the original complaint having been filed in 1986, the
action has not yet prescribed. In addition, the trial court regarded the defense
of prescription as having been waived, this not being one of the issues
agreed upon at pre-trial.
Thus, the dispositive portion of the RTCs Decision of December 13,
1990 reads:
WHEREFORE, premises considered, the Deed of Absolute Sale otherwise
known as Doc. No. 8; Book No. 14; Page No. 1; Series of 1951 of the
Notarial file of Pompeyo B. Calleja which is considered a donation, is hereby
reduced proportionately insofar as it affected the legitime of the late Victor
Imperial, which share is inherited by the plaintiffs herein, to the extent that
plaintiffs are ordered to be given by defendant a portion of 10,940 square
meters thereof.
In order to avoid further conflict, the 10,940 share to be given to plaintiffs
should include the portion which they are presently occupying, by virtue of
the extended lease to their father Ricardo Villalon, where the bungalow in
question stands.
The remaining portion to be given to plaintiffs may come from any other
portion that may be agreed upon by the parties, otherwise, this court will
appoint a commissioner to undertake the partition.
The other 21,897 square meters should go to the defendant as part of his
legitime and by virtue of the reduced donation.
No pronouncement as to damages as they were not sufficiently proved.
SO ORDERED.[8]
The Court of Appeals affirmed the RTC Decision in toto.
Before us, petitioner questions the following findings of respondent court:
(1) that there was no res judicata, there being no identity of parties and
cause of action between the instant case and Civil Case No. 1177; (2) that
private respondents had a right to question the donation; (3) that private
respondents action is barred by prescription, laches and estoppel; and (4)
that the donation was inofficious and should be reduced.
It is an indispensable requirement in res judicata that there be, between
the first and second action, identity of parties, of subject matter and of cause
of action.[9] A perusal of the records leads us to conclude that there is no
identity of parties and of cause of action as between Civil Case No. 1177
and Civil Case No. 7646. Civil Case No. 1177 was instituted by Leoncio in
his capacity as donor of the questioned donation. While it is true that upon
his death, Victor was substituted as plaintiff of the action, such does not alter
the fact that Victors participation in the case was in representation of the
interests of the original plaintiff, Leoncio. The purpose behind the rule on
substitution of parties is to ensure that the deceased party would continue to
be properly represented in the suit through the duly appointed legal
representative of the estate[10], or his heir, as in this case, for which no court
appointment is required.[11] Petitioners argument, therefore, that there is
substantial identity between Leoncio and private respondents, being heirs
and successors-in-interest of Victor, is unavailing.
Moreover, Leoncios cause of action as donor of the property was fraud,
purportedly employed upon him by petitioner in the execution of the
donation. While the same circumstances of fraud and deceit are alleged in
private respondents complaint, it also raises the additional ground of
inofficiousness of donation.
Contrary to petitioners contentions, inofficiousness of donation does not,
and could not, form part of Leoncios cause of action in Civil Case No.
1177. Inofficiousness as a cause of action may arise only upon the death of
the donor, as the value of the donation will then be contrasted with the net
value of the estate of the donor-deceased.[12]
Consequently, while in Civil Case No. 1177, Leoncio sought the
revocation in full of the donation on ground of fraud, the instant case actually
has two alternative causes of action. First, for fraud and deceit, under the
same circumstances as alleged in Leoncios complaint, which seeks the
annulment in full of the donation, and which the trial court correctly dismissed
because the compromise agreement in Civil Case No. 1177 served as a
ratification and waiver on the part of Leoncio of whatever defects in
voluntariness and consent may have been attendant in the making of the
donation. The second cause of action is the alleged inofficiousness of the
donation, resulting in the impairment of Victors legitime, which seeks the
annulment, not of the entire donation, but only of that portion diminishing the
legitime.[13]It is on the basis of this second cause of action that private
respondents prevailed in the lower courts.
Petitioner next questions the right of private respondents to contest the
donation. Petitioner sources his argument from Article 772 of the Civil Code,
thus:
Only those who at the time of the donors death have a right to the legitime
and their heirs and successors in interest may ask for the reduction of
inofficious donations. xxx
As argued by petitioner, when Leoncio died on January 8, 1962, it was
only Victor who was entitled to question the donation. However, instead of
filing an action to contest the donation, Victor asked to be substituted as
plaintiff in Civil Case No. 1177 and even moved for execution of the
compromise judgment therein.
No renunciation of legitime may be presumed from the foregoing acts. It
must be remembered that at the time of the substitution, the judgment
approving the compromise agreement has already been rendered. Victor
merely participated in the execution of the compromise judgment. He was not
a party to the compromise agreement.
More importantly, our law on succession does not countenance tacit
repudiation of inheritance. Rather, it requires an express act on the part of
the heir. Thus, under Article 1051 of Civil Code:
The repudiation of an inheritance shall be made in a public or authentic
instrument, or by petition presented to the court having jurisdiction over the
testamentary or intestate proceedings.
Thus, when Victor substituted Leoncio in Civil Case No. 1177 upon the
latters death, his act of moving for execution of the compromise judgment
cannot be considered an act of renunciation of his legitime. He was,
therefore, not precluded or estopped from subsequently seeking the
reduction of the donation, under Article 772. Nor are Victors heirs, upon his
death, precluded from doing so, as their right to do so is expressly
recognized under Article 772, and also in Article 1053:
If the heir should die without having accepted or repudiated the inheritance,
his right shall be transmitted to his heirs.
Be that as it may, we find merit in petitioners other assignment of
errors. Having ascertained this action as one for reduction of an inofficious
donation, we cannot sustain the holding of both the trial court and the Court
of Appeals that the applicable prescriptive period is thirty years, under Article
1141 of the Civil Code. The sense of both courts that this case is a real
action over an immovable allots undue credence to private respondents
description of their complaint, as one for Annulment of Documents,
Reconveyance and Recovery of Possession of Property, which suggests the
action to be, in part, a real action enforced by those with claim of title over
the disputed land.
Unfortunately for private respondents, a claim for legitime does not
amount to a claim of title. In the recent case of Vizconde vs. Court of
Appeals[14], we declared that what is brought to collation is not the donated
property itself, but the value of the property at the time it was donated. The
rationale for this is that the donation is a real alienation which conveys
ownership upon its acceptance, hence, any increase in value or any
deterioration or loss thereof is for the account of the heir or donee.[15]
What, then, is the prescriptive period for an action for reduction of an
inofficious donation? The Civil Code specifies the following instances of
reduction or revocation of donations: (1) four years, in cases of subsequent
birth, appearance, recognition or adoption of a child;[16] (2) four years, for
non-compliance with conditions of the donation;[17] and (3) at any time during
the lifetime of the donor and his relatives entitled to support, for failure of the
donor to reserve property for his or their support.[18] Interestingly, donations
as in the instant case,[19] the reduction of which hinges upon the allegation of
impairment of legitime, are not controlled by a particular prescriptive period,
for which reason we must resort to the ordinary rules of prescription.
Under Article 1144 of the Civil Code, actions upon an obligation created
by law must be brought within ten years from the time the right of action
accrues. Thus, the ten-year prescriptive period applies to the obligation to
reduce inofficious donations, required under Article 771 of the Civil Code, to
the extent that they impair the legitime of compulsory heirs.
From when shall the ten-year period be reckoned? The case of Mateo
vs. Lagua, 29 SCRA 864, which involved the reduction for inofficiousness of
a donation propter nuptias, recognized that the cause of action to enforce a
legitime accrues upon the death of the donor-decedent. Clearly so, since it is
only then that the net estate may be ascertained and on which basis, the
legitimes may be determined.
It took private respondents 24 years since the death of Leoncio to
initiate this case. The action, therefore, has long prescribed.
As for the trial courts holding that the defense of prescription had been
waived, it not being one of the issues agreed upon at pre-trial, suffice it to
say that while the terms of the pre-trial order bind the parties as to the
matters to be taken up in trial, it would be the height of injustice for us to
adhere to this technicality when the fact of prescription is manifest in the
pleadings of the parties, as well as the findings of fact of the lower courts.[20]
A perusal of the factual antecedents reveals that not only has
prescription set in, private respondents are also guilty of estoppel by
laches. It may be recalled that Leoncio died on January 8, 1962. Fifteen
years later, Victor died, leaving as his sole heir Ricardo Villalon, who also
died four years later. While Victor was alive, he gave no indication of any
interest to contest the donation of his deceased father. As we have
discussed earlier, the fact that he actively participated in Civil Case No. 1177
did not amount to a renunciation of his inheritance and does not preclude him
from bringing an action to claim his legitime. These are matters that Victor
could not possibly be unaware of, considering that he is a lawyer[21]. Ricardo
Villalon was even a lessee of a portion of the donated property, and could
have instituted the action as sole heir of his natural son, or at the very least,
raised the matter of legitime by way of counterclaim in an ejectment
case[22] filed against him by petitioner in 1979. Neither does it help private
respondents cause that five years have elapsed since the death of Ricardo in
1981 before they filed their complaint with the RTC.
Estoppel by laches is the failure or neglect for an unreasonable or
unexplained length of time to do that which, by exercising due diligence,
could or should have been done earlier, warranting a presumption that the
person has abandoned his right or declined to assert it.[23] We find the
necessity for the application of the principle of estoppel by laches in this case,
in order to avoid an injustice.
A final word on collation of donations. We observe that after finding the
donation to be inofficious because Leoncio had no other property at the time
of his death, the RTC computed the legitime of Victor based on the area of
the donated property. Hence, in its dispositive portion, it awarded a portion of
the property to private respondents as Victors legitime. This was upheld by
the Court of Appeals.
Our rules of succession require that before any conclusion as to the
legal share due to a compulsory heir may be reached, the following steps
must be taken: (1) the net estate of the decedent must be ascertained, by
deducting all the payable obligations and charges from the value of the
property owned by the deceased at the time of his death; (2) the value of all
donations subject to collation would be added to it.[24]
Thus, it is the value of the property at the time it is donated, and not the
property itself, which is brought to collation. Consequently, even when the
donation is found inofficious and reduced to the extent that it impaired Victors
legitime, private respondents will not receive a corresponding share in the
property donated. Thus, in this case where the collatable property is an
immovable, what may be received is: (1) an equivalent, as much as possible,
in property of the same nature, class and quality;[25] (2) if such is
impracticable, the equivalent value of the impaired legitime in cash or
marketable securities;[26] or (3) in the absence of cash or securities in the
estate, so much of such other property as may be necessary, to be sold in
public auction.[27]
We believe this worth mentioning, even as we grant the petition on
grounds of prescription and laches.
ACCORDINGLY, the decision of the Court of Appeals in C.A. G.R. CV
No. 31976, affirming in toto the decision of the Regional Trial Court in Civil
Case No. 7646, is reversed and set aside. No costs.
SO ORDERED.
Melo, Vitug, Panganiban, and Purisima, JJ., concur.
40. [G.R. No. 131522. July 19, 1999]
PACITA I. HABANA, ALICIA L. CINCO and JOVITA N.
FERNANDO, petitioners, vs. FELICIDAD C. ROBLES and GOODWILL
TRADING CO., INC., respondents.
DECISION
PARDO, J.:
The case before us is a petition for review on certiorari[1] to set aside the
(a) decision of the Court of Appeals[2], and (b) the resolution denying
petitioners motion for reconsideration,[3] in which the appellate court affirmed
the trial courts dismissal of the complaint for infringement and/or unfair
competition and damages but deleted the award for attorneys fees.
The facts are as follows:
Petitioners are authors and copyright owners of duly issued certificates
of copyright registration covering their published works, produced through
their combined resources and efforts, entitled COLLEGE ENGLISH FOR
TODAY (CET for brevity), Books 1 and 2, and WORKBOOK FOR COLLEGE
FRESHMAN ENGLISH, Series 1.
Respondent Felicidad Robles and Goodwill Trading Co., Inc. are the
author/publisher and distributor/seller of another published work entitled
DEVELOPING ENGLISH PROFICIENCY (DEP for brevity), Books 1 and 2
(1985 edition) which book was covered by copyrights issued to them.
In the course of revising their published works, petitioners scouted and
looked around various bookstores to check on other textbooks dealing with
the same subject matter. By chance they came upon the book of respondent
Robles and upon perusal of said book they were surprised to see that the
book was strikingly similar to the contents, scheme of presentation,
illustrations and illustrative examples in their own book, CET.
 After an itemized examination and comparison of the two books (CET
and DEP), petitioners found that several pages of the respondents book are
similar, if not all together a copy of petitioners book, which is a case of
plagiarism and copyright infringement.
Petitioners then made demands for damages against respondents and
also demanded that they cease and desist from further selling and
distributing to the general public the infringed copies of respondent Robles
works.
However, respondents ignored the demands, hence, on July 7, 1988,
petitioners filed with the Regional Trial Court, Makati, a complaint for
Infringement and/or unfair competition with damages[4] against private
respondents.[5]
In the complaint, petitioners alleged that in 1985, respondent Felicidad
C. Robles being substantially familiar with the contents of petitioners works,
and without securing their permission, lifted, copied, plagiarized and/or
transposed certain portions of their book CET. The textual contents and
illustrations of CET were literally reproduced in the book DEP. The plagiarism,
incorporation and reproduction of particular portions of the book CET in the
book DEP, without the authority or consent of petitioners, and the
misrepresentations of respondent Robles that the same was her original
work and concept adversely affected and substantially diminished the sale of
the petitioners book and caused them actual damages by way of unrealized
income.
Despite the demands of the petitioners for respondents to desist from
committing further acts of infringement and for respondent to recall DEP from
the market, respondents refused. Petitioners asked the court to order the
submission of all copies of the book DEP, together with the molds, plates and
films and other materials used in its printing destroyed, and for respondents
to render an accounting of the proceeds of all sales and profits since the time
of its publication and sale.
Respondent Robles was impleaded in the suit because she authored
and directly committed the acts of infringement complained of, while
respondent Goodwill Trading Co., Inc. was impleaded as the publisher and
joint co-owner of the copyright certificates of registration covering the two
books authored and caused to be published by respondent Robles with
obvious connivance with one another.
On July 27, 1988, respondent Robles filed a motion for a bill of
particulars[6] which the trial court approved on August 17, 1988. Petitioners
complied with the desired particularization, and furnished respondent Robles
the specific portions, inclusive of pages and lines, of the published and
copyrighted books of the petitioners which were transposed, lifted, copied
and plagiarized and/or otherwise found their way into respondents book.
On August 1, 1988, respondent Goodwill Trading Co., Inc. filed its
answer to the complaint[7] and alleged that petitioners had no cause of action
against Goodwill Trading Co., Inc. since it was not privy to the
misrepresentation, plagiarism, incorporation and reproduction of the portions
of the book of petitioners; that there was an agreement between Goodwill
and the respondent Robles that Robles guaranteed Goodwill that the
materials utilized in the manuscript were her own or that she had secured the
necessary permission from contributors and sources; that the author
assumed sole responsibility and held the publisher without any liability.
On November 28, 1988, respondent Robles filed her answer[8], and
denied the allegations of plagiarism and copying that petitioners
claimed. Respondent stressed that (1) the book DEP is the product of her
independent researches, studies and experiences, and was not a copy of
any existing valid copyrighted book; (2) DEP followed the scope and
sequence or syllabus which are common to all English grammar writers as
recommended by the Association of Philippine Colleges of Arts and Sciences
(APCAS), so any similarity between the respondents book and that of the
petitioners was due to the orientation of the authors to both works and
standards and syllabus; and (3) the similarities may be due to the authors
exercise of the right to fair use of copyrigthed materials, as guides.
Respondent interposed a counterclaim for damages on the ground that
bad faith and malice attended the filing of the complaint, because petitioner
Habana was professionally jealous and the book DEP replaced CET as the
official textbook of the graduate studies department of the Far Eastern
University.[9]
During the pre-trial conference, the parties agreed to a stipulation of
facts[10] and for the trial court to first resolve the issue of infringement before
disposing of the claim for damages.
After the trial on the merits, on April 23, 1993, the trial court rendered its
judgment finding thus:
WHEREFORE, premises considered, the court hereby orders that the
complaint filed against defendants Felicidad Robles and Goodwill Trading
Co., Inc. shall be DISMISSED; that said plaintiffs solidarily reimburse
defendant Robles for P20,000.00 attorneys fees and defendant Goodwill for
P5,000.00 attorneys fees. Plaintiffs are liable for cost of suit.
IT IS SO ORDERED.
Done in the City of Manila this 23rd day of April, 1993.
(s/t) MARVIE R. ABRAHAM SINGSON
Assisting Judge
S. C. Adm. Order No. 124-92[11]
On May 14, 1993, petitioners filed their notice of appeal with the trial
court[12], and on July 19, 1993, the court directed its branch clerk of court to
forward all the records of the case to the Court of Appeals.[13]
In the appeal, petitioners argued that the trial court completely
disregarded their evidence and fully subscribed to the arguments of
respondent Robles that the books in issue were purely the product of her
researches and studies and that the copied portions were inspired by foreign
authors and as such not subject to copyright. Petitioners also assailed the
findings of the trial court that they were animated by bad faith in instituting
the complaint.[14]
On June 27, 1997, the Court of Appeals rendered judgment in favor of
respondents Robles and Goodwill Trading Co., Inc. The relevant portions of
the decision state:
It must be noted, however, that similarity of the allegedly infringed work to the
authors or proprietors copyrighted work does not of itself establish copyright
infringement, especially if the similarity results from the fact that both works
deal with the same subject or have the same common source, as in this case.
Appellee Robles has fully explained that the portion or material of the book
claimed by appellants to have been copied or lifted from foreign books. She
has duly proven that most of the topics or materials contained in her book,
with particular reference to those matters claimed by appellants to have been
plagiarized were topics or matters appearing not only in appellants and her
books but also in earlier books on College English, including foreign books,
e.i. Edmund Burkes Speech on Conciliation, Boerigs Competence in English
and Broughtons, Edmund Burkes Collection.
xxx
Appellants reliance on the last paragraph on Section 11 is misplaced. It must
be emphasized that they failed to prove that their books were made sources
by appellee.[15]
The Court of Appeals was of the view that the award of attorneys fees
was not proper, since there was no bad faith on the part of petitioners
Habana et al. in instituting the action against respondents.
On July 12, 1997, petitioners filed a motion for
reconsideration,[16] however, the Court of Appeals denied the same in a
Resolution[17] dated November 25, 1997.
Hence, this petition.
In this appeal, petitioners submit that the appellate court erred in
affirming the trial courts decision.
Petitioners raised the following issues: (1) whether or not, despite the
apparent textual, thematic and sequential similarity between DEP and CET,
respondents committed no copyright infringement; (2) whether or not there
was animus furandi on the part of respondent when they refused to withdraw
the copies of CET from the market despite notice to withdraw the same; and
(3) whether or not respondent Robles abused a writers right to fair use, in
violation of Section 11 of Presidential Decree No. 49.[18]
We find the petition impressed with merit.
The complaint for copyright infringement was filed at the time that
Presidential Decree No. 49 was in force. At present, all laws dealing with the
protection of intellectual property rights have been consolidated and as the
law now stands, the protection of copyrights is governed by Republic Act No.
8293. Notwithstanding the change in the law, the same principles are
reiterated in the new law under Section 177. It provides for the copy or
economic rights of an owner of a copyright as follows:
Sec.177. Copy or Economic rights.Subject to the provisions of chapter VIII,
copyright or economic rights shall consist of the exclusive right to carry out,
authorize or prevent the following acts:
177.1 Reproduction of the work or substantial portion of the work;
177.2 Dramatization, translation, adaptation, abridgement, arrangement or
other transformation of the work;
177.3 The first public distribution of the original and each copy of the work by
sale or other forms of transfer of ownership;
177.4 Rental of the original or a copy of an audiovisual or cinematographic
work, a work embodied in a sound recording, a computer program, a
compilation of data and other materials or a musical work in graphic form,
irrespective of the ownership of the original or the copy which is the subject
of the rental; (n)
177.5 Public display of the original or copy of the work;
177.6 Public performance of the work; and
177.7 Other communication to the public of the work[19]
The law also provided for the limitations on copyright, thus:
Sec. 184.1 Limitations on copyright.-- Notwithstanding the provisions of
Chapter V, the following acts shall not constitute infringement of copyright:
(a) the recitation or performance of a work, once it has been
lawfully made accessible to the public, if done privately and free
of charge or if made strictly for a charitable or religious
institution or society; [Sec. 10(1), P.D. No. 49]
(b) The making of quotations from a published work if they are
compatible with fair use and only to the extent justified for the
purpose, including quotations from newspaper articles and
periodicals in the form of press summaries; Provided, that the
source and the name of the author, if appearing on the work are
mentioned; (Sec. 11 third par. P.D.49)
xxxxxxxxxxxx
(e) The inclusion of a work in a publication, broadcast, or other
communication to the public, sound recording of film, if such
inclusion is made by way of illustration for teaching purposes
and is compatible with fair use: Provided, That the source and
the name of the author, if appearing in the work is
mentioned;[20]
In the above quoted provisions, work has reference to literary and
artistic creations and this includes books and other literary, scholarly and
scientific works.[21]
A perusal of the records yields several pages of the book DEP that are
similar if not identical with the text of CET.
On page 404 of petitioners Book 1 of College English for Today, the
authors wrote:
Items in dates and addresses:
He died on Monday, April 15, 1975.
Miss Reyes lives in 214 Taft Avenue,
Manila[22]
On page 73 of respondents Book 1 Developing English Today, they
wrote:
He died on Monday, April 25, 1975.
Miss Reyes address is 214 Taft Avenue Manila[23]
On Page 250 of CET, there is this example on parallelism or repetition
of sentence structures, thus:
The proposition is peace. Not peace through the medium of war; not
peace to be hunted through the labyrinth of intricate and endless
negotiations; not peace to arise out of universal discord, fomented from
principle, in all parts of the empire; not peace to depend on the juridical
determination of perplexing questions, or the precise marking of the
boundary of a complex government. It is simple peace; sought in its
natural course, and in its ordinary haunts. It is peace sought in the spirit
of peace, and laid in principles purely pacific.
--- Edmund Burke, Speech on Criticism.[24]
On page 100 of the book DEP[25], also in the topic of parallel structure
and repetition, the same example is found in toto. The only difference is that
petitioners acknowledged the author Edmund Burke, and respondents did
not.
In several other pages[26] the treatment and manner of presentation of
the topics of DEP are similar if not a rehash of that contained in CET.
We believe that respondent Robles act of lifting from the book of
petitioners substantial portions of discussions and examples, and her failure
to acknowledge the same in her book is an infringement of petitioners
copyrights.
When is there a substantial reproduction of a book? It does not
necessarily require that the entire copyrighted work, or even a large portion
of it, be copied. If so much is taken that the value of the original work is
substantially diminished, there is an infringement of copyright and to an
injurious extent, the work is appropriated.[27]
In determining the question of infringement, the amount of matter copied
from the copyrighted work is an important consideration. To constitute
infringement, it is not necessary that the whole or even a large portion of the
work shall have been copied. If so much is taken that the value of the original
is sensibly diminished, or the labors of the original author are substantially
and to an injurious extent appropriated by another, that is sufficient in point of
law to constitute piracy.[28]
The essence of intellectual piracy should be essayed in conceptual
terms in order to underscore its gravity by an appropriate understanding
thereof. Infringement of a copyright is a trespass on a private domain owned
and occupied by the owner of the copyright, and, therefore, protected by law,
and infringement of copyright, or piracy, which is a synonymous term in this
connection, consists in the doing by any person, without the consent of the
owner of the copyright, of anything the sole right to do which is conferred by
statute on the owner of the copyright.[29]
 The respondents claim that the copied portions of the book CET are
also found in foreign books and other grammar books, and that the similarity
between her style and that of petitioners can not be avoided since they come
from the same background and orientation may be true. However, in this
jurisdiction under Sec 184 of Republic Act 8293 it is provided that:
Limitations on Copyright. Notwithstanding the provisions of Chapter V,
the following shall not constitute infringement of copyright:
xxxxxxxxxxxx
(c) The making of quotations from a published work if they are
compatible with fair use and only to the extent justified for the
purpose, including quotations from newspaper articles and
periodicals in the form of press summaries: Provided, That the
source and the name of the author, if appearing on the
work, are mentioned.
A copy of a piracy is an infringement of the original, and it is no defense
that the pirate, in such cases, did not know whether or not he was infringing
any copyright; he at least knew that what he was copying was not his, and he
copied at his peril.[30]
The next question to resolve is to what extent can copying be injurious
to the author of the book being copied. Is it enough that there are similarities
in some sections of the books or large segments of the books are the same?
In the case at bar, there is no question that petitioners presented
several pages of the books CET and DEP that more or less had the same
contents. It may be correct that the books being grammar books may contain
materials similar as to some technical contents with other grammar books,
such as the segment about the Author Card. However, the numerous pages
that the petitioners presented showing similarity in the style and the manner
the books were presented and the identical examples can not pass as
similarities merely because of technical consideration.
The respondents claim that their similarity in style can be attributed to
the fact that both of them were exposed to the APCAS syllabus and their
respective academic experience, teaching approach and methodology are
almost identical because they were of the same background.
However, we believe that even if petitioners and respondent Robles
were of the same background in terms of teaching experience and
orientation, it is not an excuse for them to be identical even in examples
contained in their books. The similarities in examples and material contents
are so obviously present in this case. How can similar/identical examples not
be considered as a mark of copying?
We consider as an indicia of guilt or wrongdoing the act of respondent
Robles of pulling out from Goodwill bookstores the book DEP upon learning
of petitioners complaint while pharisaically denying petitioners demand. It
was further noted that when the book DEP was re-issued as a revised
version, all the pages cited by petitioners to contain portion of their book
College English for Today were eliminated.
In cases of infringement, copying alone is not what is prohibited. The
copying must produce an injurious effect. Here, the injury consists in that
respondent Robles lifted from petitioners book materials that were the result
of the latters research work and compilation and misrepresented them as her
own. She circulated the book DEP for commercial use and did not
acknowledge petitioners as her source.
Hence, there is a clear case of appropriation of copyrighted work for her
benefit that respondent Robles committed. Petitioners work as authors is the
product of their long and assiduous research and for another to represent it
as her own is injury enough. In copyrighting books the purpose is to give
protection to the intellectual product of an author. This is precisely what the
law on copyright protected, under Section 184.1 (b). Quotations from a
published work if they are compatible with fair use and only to the extent
justified by the purpose, including quotations from newspaper articles and
periodicals in the form of press summaries are allowed provided that the
source and the name of the author, if appearing on the work, are mentioned.
In the case at bar, the least that respondent Robles could have done
was to acknowledge petitioners Habana et. al. as the source of the portions
of DEP. The final product of an authors toil is her book. To allow another to
copy the book without appropriate acknowledgment is injury enough.
WHEREFORE, the petition is hereby GRANTED. The decision and
resolution of the Court of Appeals in CA-G. R. CV No. 44053 are SET
ASIDE. The case is ordered remanded to the trial court for further
proceedings to receive evidence of the parties to ascertain the damages
caused and sustained by petitioners and to render decision in accordance
with the evidence submitted to it.
SO ORDERED.
Kapunan, and Ynares-Santiago, JJ., concur.
41. [G.R. No. 108946. January 28, 1999]
FRANCISCO G. JOAQUIN, JR., and BJ PRODUCTIONS, INC., petitioners,
vs. FRANKLIN DRILON GABRIEL ZOSA, WILLIAM ESPOSO, FELIPE
MEDINA, JR., and CASEY FRANCISCO, respondents.
DECISION
MENDOZA, J.:
This is a petition for certiorari. Petitioners seek to annul the resolution of
the Department of Justice, dated August 12, 1992, in Criminal Case No. Q-
92-27854, entitled Gabriel Zosa, et al. v. City Prosecutor of Quezon City and
Francisco Joaquin, Jr., and its resolution, dated December 3, 1992, denying
petitioner Joaquins motion for reconsideration.
Petitioner BJ Productions, Inc. (BJPI) is the holder/grantee of Certificate
of Copyright No. M922, dated January 28, 1971, of Rhoda and Me, a dating
game show aired from 1970 to 1977.
On June 28, 1973, petitioner BJPI submitted to the National Library an
addendum to its certificate of copyright specifying the shows format and style
of presentation.
On July 14, 1991, while watching television, petitioner Francisco
Joaquin, Jr., president of BJPI, saw on RPN Channel 9 an episode of Its a
Date, which was produced by IXL Productions, Inc. (IXL). On July 18, 1991,
he wrote a letter to private respondent Gabriel M. Zosa, president and
general manager of IXL, informing Zosa that BJPI had a copyright to Rhoda
and Me and demanding that IXL discontinue airing Its a Date.
In a letter, dated July 19, 1991, private respondent Zosa apologized to
petitioner Joaquin and requested a meeting to discuss a possible
settlement. IXL, however, continued airing Its a Date, prompting petitioner
Joaquin to send a second letter on July 25, 1991 in which he reiterated his
demand and warned that, if IXL did not comply, he would endorse the matter
to his attorneys for proper legal action.
Meanwhile, private respondent Zosa sought to register IXLs copyright to
the first episode of Its a Date for which it was issued by the National Library a
certificate of copyright on August 14, 1991.
Upon complaint of petitioners, an information for violation of P.D. No. 49
was filed against private respondent Zosa together with certain officers of
RPN Channel 9, namely, William Esposo, Felipe Medina, and Casey
Francisco, in the Regional Trial Court of Quezon City where it was docketed
as Criminal Case No. 92-27854 and assigned to Branch 104 thereof.
However, private respondent Zosa sought a review of the resolution of the
Assistant City Prosecutor before the Department of Justice.
On August 12, 1992, respondent Secretary of Justice Franklin M. Drilon
reversed the Assistant City Prosecutors findings and directed him to move for
the dismissal of the case against private respondents. [1]
Petitioner Joaquin filed a motion for reconsideration, but his motion was
denied by respondent Secretary of Justice on December 3, 1992. Hence, this
petition. Petitioners contend that:
1. The public respondent gravely abused his discretion amounting
to lack of jurisdiction when he invoked non-presentation of the
master tape as being fatal to the existence of probable cause to
prove infringement, despite the fact that private respondents
never raised the same as a controverted issue.
2. The public respondent gravely abused his discretion amounting
to lack of jurisdiction when he arrogated unto himself the
determination of what is copyrightable - an issue which is
exclusively within the jurisdiction of the regional trial court to
assess in a proper proceeding.
Both public and private respondents maintain that petitioners failed to
establish the existence of probable cause due to their failure to present the
copyrighted master videotape of Rhoda and Me. They contend that petitioner
BJPIs copyright covers only a specific episode of Rhoda and Me and that the
formats or concepts of dating game shows are not covered by copyright
protection under P. D. No. 49.
Non-Assignment of Error
Petitioners claim that their failure to submit the copyrighted master
videotape of the television show Rhoda and Me was not raised in issue by
private respondents during the preliminary investigation and, therefore, it was
error for the Secretary of Justice to reverse the investigating prosecutors
finding of probable cause on this ground.
A preliminary investigation falls under the authority of the state
prosecutor who is given by law the power to direct and control criminal
actions.[2] He is, however, subject to the control of the Secretary of
Justice. Thus, Rule 112, 4 of the Revised Rules of Criminal Procedure,
provides:
SEC. 4. Duty of investigating fiscal. - If the investigating fiscal
finds cause to hold the respondent for trial, he shall prepare the
resolution and corresponding information. He shall certify under oath
that he, or as shown by the record, an authorized officer, has
personally examined the complainant and his witnesses, that there is
reasonable ground to believe that a crime has been committed and
that the accused is probably guilty thereof, that the accused was
informed of the complaint and of the evidence submitted against him
and that he was given an opportunity to submit controverting
evidence.Otherwise, he shall recommend dismissal of the complaint.
In either case, he shall forward the records of the case to the
provincial or city fiscal or chief state prosecutor within five (5) days
from his resolution. The latter shall take appropriate action thereon
within ten (10) days from receipt thereof, immediately informing the
parties of said action.
 No complaint or information may be filed or dismissed by an
investigating fiscal without the prior written authority or approval of
the provincial or city fiscal or chief state prosecutor.
Where the investigating assistant fiscal recommends the
dismissal of the case but his findings are reversed by the provincial
or city fiscal or chief state prosecutor on the ground that a probable
cause exists, the latter may, by himself, file the corresponding
information against the respondent or direct any other assistant fiscal
or state prosecutor to do so, without conducting another preliminary
investigation.
If upon petition by a proper party, the Secretary of Justice
reverses the resolution of the provincial or city fiscal or chief state
prosecutor, he shall direct the fiscal concerned to file the
corresponding information without conducting another preliminary
investigation or to dismiss or move for dismissal of the complaint or
information.
In reviewing resolutions of prosecutors, the Secretary of Justice is not
precluded from considering errors, although unassigned, for the purpose of
determining whether there is probable cause for filing cases in court. He
must make his own finding of probable cause and is not confined to the
issues raised by the parties during preliminary investigation. Moreover, his
findings are not subject to review unless shown to have been made with
grave abuse.
Opinion of the Secretary of Justice
Petitioners contend, however, that the determination of the question
whether the format or mechanics of a show is entitled to copyright protection
is for the court, and not the Secretary of Justice, to make. They assail the
following portion of the resolution of the respondent Secretary of Justice:
[T]he essence of copyright infringement is the copying, in whole or in
part, of copyrightable materials as defined and enumerated in Section
2 of PD. No. 49. Apart from the manner in which it is actually
expressed, however, the idea of a dating game show is, in the opinion
of this Office, a non-copyrightable material. Ideas, concepts, formats,
or schemes in their abstract form clearly do not fall within the class of
works or materials susceptible of copyright registration as provided in
PD. No. 49.[3] (Emphasis added.)
It is indeed true that the question whether the format or mechanics of
petitioners television show is entitled to copyright protection is a legal
question for the court to make. This does not, however, preclude respondent
Secretary of Justice from making a preliminary determination of this question
in resolving whether there is probable cause for filing the case in court. In
doing so in this case, he did not commit any grave error.
Presentation of Master Tape
Petitioners claim that respondent Secretary of Justice gravely abused
his discretion in ruling that the master videotape should have been presented
in order to determine whether there was probable cause for copyright
infringement. They contend that 20th Century Fox Film Corporation v. Court
of Appeals,[4] on which respondent Secretary of Justice relied in reversing the
resolution of the investigating prosecutor, is inapplicable to the case at bar
because in the present case, the parties presented sufficient evidence which
clearly establish linkages between the copyrighted show Rhoda and Me and
the infringing TV show Its a Date.[5]
The case of 20th Century Fox Film Corporation involved raids conducted
on various videotape outlets allegedly selling or renting out pirated
videotapes. The trial court found that the affidavits of NBI agents, given in
support of the application for the search warrant, were insufficient without the
master tape. Accordingly, the trial court lifted the search warrants it had
previously issued against the defendants. On petition for review, this Court
sustained the action of the trial court and ruled:[6]
The presentation of the master tapes of the copyrighted films from which the
pirated films were allegedly copied, was necessary for the validity of search
warrants against those who have in their possession the pirated films. The
petitioners argument to the effect that the presentation of the master tapes at
the time of application may not be necessary as these would be merely
evidentiary in nature and not determinative of whether or not a probable
cause exists to justify the issuance of the search warrants is not
meritorious. The court cannot presume that duplicate or copied tapes were
necessarily reproduced from master tapes that it owns.
The application for search warrants was directed against video tape outlets
which allegedly were engaged in the unauthorized sale and renting out of
copyrighted films belonging to the petitioner pursuant to P.D. 49.
The essence of a copyright infringement is the similarity or at least
substantial similarity of the purported pirated works to the copyrighted
work. Hence, the applicant must present to the court the copyrighted films to
compare them with the purchased evidence of the video tapes allegedly
pirated to determine whether the latter is an unauthorized reproduction of the
former. This linkage of the copyrighted films to the pirated films must be
established to satisfy the requirements of probable cause. Mere allegations
as to the existence of the copyrighted films cannot serve as basis for the
issuance of a search warrant.
This ruling was qualified in the later case of Columbia Pictures, Inc. v. Court
of Appeals[7] in which it was held:
In fine, the supposed pronunciamento in said case regarding the necessity
for the presentation of the master tapes of the copyrighted films for the
validity of search warrants should at most be understood to merely serve as
a guidepost in determining the existence of probable cause in copyright
infringement cases where there is doubt as to the true nexus between the
master tape and the pirated copies. An objective and careful reading of the
decision in said case could lead to no other conclusion than that said
directive was hardly intended to be a sweeping and inflexible requirement in
all or similar copyright infringement cases. . . .[8]
In the case at bar, during the preliminary investigation, petitioners and
private respondents presented written descriptions of the formats of their
respective televisions shows, on the basis of which the investigating
prosecutor ruled:
As may [be] gleaned from the evidence on record, the substance of the
television productions complainants RHODA AND ME and Zosas ITS A
DATE is that two matches are made between a male and a female, both
single, and the two couples are treated to a night or two of dining and/or
dancing at the expense of the show. The major concepts of both shows is the
same. Any difference appear mere variations of the major concepts.
That there is an infringement on the copyright of the show RHODA AND ME
both in content and in the execution of the video presentation are established
because respondents ITS A DATE is practically an exact copy of
complainants RHODA AND ME because of substantial similarities as follows,
to wit:
RHODA AND ME ITS A DATE
Set I Set I
a. Unmarried participant a. Same of one gender (searcher) appears on
one side of a divider, while three (3) unmarried participants of the
other gender are on the other side of the divider. This arrangement is
done to ensure that the searcher does not see the searchees.
b. Searcher asks a question b. same to be answered by each of the
searchees. The purpose is to determine who among the searchees is
the most compatible with the searcher.
c. Searcher speculates on the c. Same match to the searchee.
d. Selection is made by the d. Selection is use of compute (sic)
methods, based on the or by the way questions are answer of the
answered, or similar methods. Searchees.
Set 2 Set 2
Same as above with the genders same of the searcher and searchees
interchanged.[9]
Petitioners assert that the format of Rhoda and Me is a product of
ingenuity and skill and is thus entitled to copyright protection. It is their
position that the presentation of a point-by-point comparison of the formats of
the two shows clearly demonstrates the nexus between the shows and
hence establishes the existence of probable cause for copyright
infringement. Such being the case, they did not have to produce the master
tape.
To begin with, the format of a show is not copyrightable. Section 2 of
P.D. No. 49,[10] otherwise known as the DECREE ON INTELLECTUAL
PROPERTY, enumerates the classes of work entitled to copyright protection,
to wit:
Section 2. The rights granted by this Decree shall, from the moment of
creation, subsist with respect to any of the following classes of works:
(A) Books, including composite and cyclopedic works, manuscripts,
directories, and gazetteers;
(B) Periodicals, including pamphlets and newspapers;
(C) Lectures, sermons, addresses, dissertations prepared for oral delivery;
(D) Letters;
(E) Dramatic or dramatico-musical compositions; choreographic works and
entertainments in dumb shows, the acting form of which is fixed in writing or
otherwise;
(F) Musical compositions, with or without words;
(G) Works of drawing, painting, architecture, sculpture, engraving,
lithography, and other works of art; models or designs for works of art;
(H) Reproductions of a work of art;
(I) Original ornamental designs or models for articles of manufacture,
whether or not patentable, and other works of applied art;
(J) Maps, plans, sketches, and charts;
(K) Drawings or plastic works of a scientific or technical character;
(L) Photographic works and works produced by a process analogous to
photography; lantern slides;
(M) Cinematographic works and works produced by a process analogous to
cinematography or any process for making audio-visual recordings;
(N) Computer programs;
(O) Prints, pictorial illustrations advertising copies, labels, tags, and box
wraps;
(P) Dramatizations, translations, adaptations, abridgements, arrangements
and other alterations of literary, musical or artistic works or of works of the
Philippine government as herein defined, which shall be protected as
provided in Section 8 of this Decree.
(Q) Collections of literary, scholarly, or artistic works or of works referred to in
Section 9 of this Decree which by reason of the selection and arrangement of
their contents constitute intellectual creations, the same to be protected as
such in accordance with Section 8 of this Decree.
(R) Other literary, scholarly, scientific and artistic works.
This provision is substantially the same as 172 of the INTELLECTUAL
PROPERTY CODE OF THE PHILIPPINES (R.A. No. 8293).[11] The format or
mechanics of a television show is not included in the list of protected works in
2 of P.D. No. 49. For this reason, the protection afforded by the law cannot
be extended to cover them.
Copyright, in the strict sense of the term, is purely a statutory right. It is a new
or independent right granted by the statute, and not simply a pre-existing
right regulated by the statute. Being a statutory grant, the rights are only such
as the statute confers, and may be obtained and enjoyed only with respect to
the subjects and by the persons, and on terms and conditions specified in the
statute.[12]
Since . . . copyright in published works is purely a statutory creation, a
copyright may be obtained only for a work falling within the statutory
enumeration or description.[13]
Regardless of the historical viewpoint, it is authoritatively settled in the United
States that there is no copyright except that which is both created and
secured by act of Congress . . . .[14]
P.D. No. 49, 2, in enumerating what are subject to copyright, refers to
finished works and not to concepts. The copyright does not extend to an idea,
procedure, process, system, method of operation, concept, principle, or
discovery, regardless of the form in which it is described, explained,
illustrated, or embodied in such work.[15] Thus, the new INTELLECTUAL
PROPERTY CODE OF THE PHILIPPINES provides:
Sec. 175. Unprotected Subject Matter. - Notwithstanding the provisions of
Sections 172 and 173, no protection shall extend, under this law, to any idea,
procedure, system, method or operation, concept, principle, discovery or
mere data as such, even if they are expressed, explained, illustrated or
embodied in a work; news of the day and other miscellaneous facts having
the character of mere items of press information; or any official text of a
legislative, administrative or legal nature, as well as any official translation
thereof.
What then is the subject matter of petitioners copyright? This Court is of
the opinion that petitioner BJPIs copyright covers audio-visual recordings of
each episode of Rhoda and Me, as falling within the class of works
mentioned in P.D. 49, 2(M), to wit:
Cinematographic works and works produced by a process analogous to
cinematography or any process for making audio-visual recordings;
The copyright does not extend to the general concept or format of its dating
game show. Accordingly, by the very nature of the subject of petitioner BJPIs
copyright, the investigating prosecutor should have the opportunity to
compare the videotapes of the two shows.
Mere description by words of the general format of the two dating game
shows is insufficient; the presentation of the master videotape in evidence
was indispensable to the determination of the existence of probable
cause. As aptly observed by respondent Secretary of Justice:
A television show includes more than mere words can describe because
it involves a whole spectrum of visuals and effects, video and audio,
 such that no similarity or dissimilarity may be found by merely
describing the general copyright/format of both dating game shows.[16]
WHEREFORE, the petition is hereby DISMISSED.
SO ORDERED.
Puno, Quisumbing, and Buena, JJ., concur.
*JOINT TENANCY & TENANCY-IN-COMMON (CASE)
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.