ACCESSION

(1) CHIAO LIONG TAN, petitioner, vs. THE HONORABLE COURT OF

APPEALS, HON MANUEL T. MURO, Presiding Judge, RTC of Manila,
Branch 54 and TAN BAN YONG, respondents. [G.R. No. 106251 November
19, 1993]
NOCON, J.:
Petitioner seeks in this petition the reversal of the Court of Appeals' decision dated
May 15, 1992 in CA-G.R. CV No. 29982 affirming the unfavorable decision of the
trial court 1 in his suit for replevin and damages.
Petitioner Chiao Liong Tan claims to be the owner of a motor vehicle, particularly
described as Isuzu Elf van, 1976 Model with Motor No. 44999-2 and Chassis No.
9646780 which he purchased in March, 1987. As owner thereof, petitioner says he
has been in possession, enjoyment and utilization of the said motor vehicle until it
was taken from him by his older brother, Tan Ban Yong, the private respondent
herein.
Petitioner relies principally on the fact that the Isuzu Elf van is registered in his
name under Certificate of Registration No. 1501909. He claims in his testimony
before the trial court that the said vehicle was purchased from Balintawak Isuzu
Motor Center for a price of over P100,000.00; that he sent his brother to pay for the
van and the receipt for payment was placed in his (petitioner's) name because it
was his money that was used to pay for the vehicle; that he allowed his brother to
use the van because the latter was working for his company, the CLT Industries;
and that his brother later refused to return the van to him and appropriated the same
for himself.
On the other hand, private respondent testified that CLT Industries is a family
business that was placed in petitioner's name because at that time he was then
leaving for the United States and petitioner is the remaining Filipino in the family
residing in the Philippines. When the family business needed a vehicle in 1987 for
use in the delivery of machinery to its customers, he asked petitioner to look for a
vehicle and gave him the amount of P5,000.00 to be deposited as down payment
for an Isuzu Elf Van which would be available in about a month. After a month, he
himself paid the whole price out of a loan of P140,000.00 which he obtained from
his friend Tan Pit Sin. Inasmuch as the receipt for the downpayment was placed in
the name of petitioner and since he was still on good terms with him, private
respondent allowed the registration of the vehicle in petitioner's name. It was also
their understanding that he would keep the van for himself because CLT Industries
was not in a position to pay him. Hence, from the time of the purchase, he had been
in possession of the vehicle including the original registration papers thereof, but
allowing petitioner from time to time to use the van for deliveries of machinery.

Tan Pit Sin who had known private respondent since 1968, not only because they
were classmates but also because of their business dealings with each other,
confirmed that private respondent borrowed from him P140,000.00 in March, 1987
to buy an Isuzu Elf van. In fact, he had borrowed said vehicle for a few times.
Gina Lu, an employee of the Balintawak Isuzu Motors, testified that private
respondent paid the balance of the purchase price of the Isuzu Elf van in the
amount of P133,000.00 but the receipt was issued in the name of Chiao Liong Tan
to make the records consistent because it was the latter who made the deposit of
P5,000.00. Thereafter, the Isuzu Elf van was released to him.
After hearing, the trial court found for private respondent. The dispositive portion
of the decision reads as follows:
WHEREFORE, judgment is hereby rendered declaring defendant
Tan Ban Yong to be the owner of and entitled to the possession
of the vehicle described in par. 2 of the Complaint, and the
plaintiff is hereby ordered to deliver possession thereof to the
said defendant or in the alternative if such delivery cannot be
made, to the sum of P138,000.00 as the value of the vehicle
taking into account the depreciation of the vehicle but offset by
the inflation rate; in either alternative, plaintiff is also ordered to
pay to said defendant consequential damages of P20,000.00 for
the latter having been deprived of the possession and use of the
vehicle and to pay the costs. All amounts adjudged herein, except
costs, shall bear interest at the legal rate from the date of this
decision, until delivery of the vehicle or the alternative payment
of the value thereof as well as payment of consequential damages
is paid; the interest applies to the value of the vehicle if return
thereof is delayed. No cost. 2
Finding no merit in the appeal, the respondent Court of Appeals affirmed the
decision of the trial court. Undaunted by his successive failures, petitioner comes
to us and raised the following error allegedly committed by the respondent Court of
Appeals, to wit:
1. . . . in finding the testimonies of private respondent's witnesses
credible;
2. . . . in disregarding the Certificate of Registration of the
subject motor vehicle as proof of ownership by the petitionerappellant. 3
Since the Court of Appeals merely affirmed the trial court's assessment of the
credibility of the witnesses that testified before it, petitioner is in effect questioning

the factual findings of said court and its appraisal of their testimony which this
Court cannot review, its jurisdiction being limited to questions of law. The
considerable weight given to the findings of the trial court is not without any
reason. It had the opportunity to observe the demeanor of witnesses which is
usually not reflected in the transcript of records. The profundity of the conclusions
thus reached is just the result of such observance. When the Court of Appeals
affirmed said findings, it goes to show that no misapprehension of facts was
committed as said Court has the power to scrutinize said factual findings under
existing rules of procedure.
In concluding that the testimonies of Tan Ban Yong, Tan Pit Sin and Gina Lu cast
doubt on the petitioner's ownership of the motor vehicle in question, both the trial
court and the Court of Appeals attached significance to their respective
interlocking accounts on how the motor vehicle was acquired, complete with the
financing source and mode of repayment. Respondent Tan Ban Yong's declaration
that he borrowed P140,000.00 from Tan Pit Sin and paid the balance of the
purchase price of the motor vehicle himself to Gina Lu of the Balintawak Isuzu
Motors, is corroborated by the above-mentioned persons themselves. Tan Pit Sin
not only confirmed the loan but also stated that the same was paid in three (3)
months; P50,000.00 on the first payment; another P50,000.00 on the second
payment and P40,000.00 on the last payment. 4 Gina Lu, who testified at the
instance of petitioner, declared that the downpayment of P5,000.00 was paid by
petitioner and so the receipt for the same was issued in his name but the balance of
P133,000.00 was paid by private respondent and to make the record consistent, she
issued the receipt in the name of petitioner again.
In contrast to the clear and categorical averments of private respondent and the
witnesses in this case negating petitioner's ownership of the motor vehicle in
question, petitioner's averments before the trial court and this Court are not only
disparate but conflicting. In his testimony below, petitioner averred that he used his
own money to purchase the motor vehicle by paying the sum of
P100,000.00, 5 which testimony is negated by his admission on page 5 of his
petition 6 before this Court that private respondent borrowed money from Tan Pit
Sin with which to purchase the subject motor vehicle. Then, in his pleading before
the court below, particularly in his reply to the answer of private respondent,
petitioner alleged that the motor vehicle was intended for his exclusive use and not
to service the family business. 7 And yet , in his petition before this Court, he
claimed that the subject motor vehicle was purchased for CLT Industries, which he
solely owned and accordingly, registered in the latter's name. 8 On top of these
entangled averments, petitioner did not have in his possession the Certificate of
Registration of the motor vehicle and the official receipt of payment for the same,
thereby lending credence to the claim of private respondent who has possession
thereof, that he owns the subject motor vehicle.
A certificate of registration of a motor vehicle in one's name indeed creates a
strong presumption of ownership. For all practical purposes, the person in whose

favor it has been issued is virtually the owner thereof unless proved otherwise. In
other words, such presumption is rebuttable by competent proof.
The New Civil Code recognizes cases of implied trust other than those enumerated
therein. 9 Thus, although no specific provision could be cited to apply to the parties
herein, it is undeniable that an implied trust was created when the certificate of
registration of the motor vehicle was placed in the name of the petitioner although
the price thereof was not paid by him but by private respondent. The principle that
a trustee who puts a certificate of registration in his name cannot repudiate the trust
by relying on the registration is one of the well-known limitations upon a title. A
trust, which derives its strength from the confidence one reposes on another
especially between brothers, does not lose that character simply because of what
appears in a legal document.
Even under the Torrens System of land registration, this Court in some instances
did away with the irrevocability or indefeasibility of a certificate of title to prevent
injustice against the rightful owner of the property. 10
It is true that the judgment 11 in a replevin suit must only resolve in whom is the
right of possession. Primarily, the action of replevin is possessory in character and
determined nothing more than the right of possession. However, when the title to
the property is distinctly put in issue by the defendant's plea and by reason of the
policy to settle in one action all the conflicting claims of the parties to the
possession of the property in controversy, the question of ownership may be
resolved in the same proceeding.
Procedure-wise, the Court observes that the action by petitioner as plaintiff in the
trial court was only one for Replevin and Damages. Since replevin is only a
provisional remedy where the replevin plaintiff claims immediate delivery of
personal property pending the judgment of the trial court in a principal case, 12 the
petitioner should have filed in the trial court as a main case an action to recover
possession of the Isuzu Elf van which was in the possession of the private
respondent. Logically, the basis of petitioner's cause of action should have been his
ownership of said van.In the State of California, from whose Code of
Procedure 13 we copied our rule on replevin, their old replevin rule which allowed
the immediate delivery of the chattel at the commencement of the action upon
application with bond by the replevin plaintiff had already been struck down as
early as July 1, 1971 in the case of Blair v. Pitchess. 14 As in fact, on June 12, 1972
when the United States Supreme Court struck down as unconstitutional the Florida
and Pennsylvania replevin statutes in Fuentes v. Shevin, 15 most of the states, on
their own, changed their replevin statutes to include a mandatory preliminary
hearing before the writ could be issued, similar to our mandatory preliminary
hearing before the writ of preliminary injunction can be issued. 16

If that had been the case in this jurisdiction, then the trial judge would have
discovered right away at the preliminary hearing that private respondent should
have immediately staked his claim of ownership and that would have created
serious doubts about petitioner's claim of ownership. Most likely, the writ would
not have been issued and the complaint would have been dismissed motu
proprio by the trial court upon the discovery that the petitioner did not have a
principal case therein. As it is, the complaint proceeded its course to the detriment
of private respondent.

On January 28, 1992, the Forest Protection and Law Enforcement Team of the
Community Environment and Natural Resources Office (CENRO) of the DENR
apprehended two (2) motor vehicles, described as follows:

Finally, although a "replevin" action is primarily one for the possession of

personality, yet it is sufficiently flexible to authorize a settlement of all equities
between the parties, arising from or growing out of the main controversy. 17Thus,
in an action for replevin where the defendant is adjudged entitled to possession, he
need not go to another forum to procure relief for the return of the replevied
property or secure a judgment for the value of the property in case the adjudged
return thereof could not be had. Appropriately, the trial court rendered an
alternative judgment.

2. Motor Vehicle with Plate No. FCN-143 loaded with one

thousand two hundred twenty four and ninety seven (1,224.97)
board feet of illegally-sourced lumber valued at P9,187.27, being
driven by one Constancio Abuganda and owned by [a certain]
Manuela Babalcon. ".[3]

WHEREFORE, the questioned decision being in accordance with the law, the
instant petition for review is hereby DENIED for lack of merit.
SO ORDERED.

(2) FELIPE CALUB and RICARDO VALENCIA, DEPARTMENT of

ENVIRONMENT and NATURAL RESOURCES (DENR), CATBALOGAN,
SAMAR, petitioners, vs. COURT OF APPEALS, MANUELA T. BABALCON,
and CONSTANCIO ABUGANDA, respondents. [G.R. No. 115634. April 27,
2000]
QUISUMBING, J.:
For review is the decision.[1] dated May 27, 1994, of the Court of Appeals in CAG.R. SP No. 29191, denying the petition filed by herein petitioners for certiorari,
prohibition and mandamus, in order to annul the Order dated May 27, 1992, by the
Regional Trial Court of Catbalogan, Samar. Said Order had denied petitioners (a)
Motion to Dismiss the replevin case filed by herein private respondents, as well as
(b) petitioners Motion for Reconsideration of the Order of said trial court dated
April 24, 1992, granting an application for a Writ of replevin. .[2] h Y
The pertinent facts of the case, borne by the records, are as follows:

"1. Motor Vehicle with Plate No. HAK-733 loaded with one
thousand and twenty six (1,026) board feet of illegally sourced
lumber valued at P8,544.75, being driven by one Pio Gabon and
owned by [a certain] Jose Vargas.

Constancio Abuganda and Pio Gabon, the drivers of the vehicles, failed to present
proper documents and/or licenses. Thus, the apprehending team seized and
impounded the vehicles and its load of lumber at the DENR-PENR (Department of
Environment and Natural Resources-Provincial Environment and Natural
Resources) Office in Catbalogan..[4] Seizure receipts were issued but the drivers
refused to accept the receipts..[5] Felipe Calub, Provincial Environment and Natural
Resources Officer, then filed before the Provincial Prosecutors Office in Samar, a
criminal complaint against Abuganda, in Criminal Case No. 3795, for violation of
Section 68 [78), Presidential Decree 705 as amended by Executive Order 277,
otherwise known as the Revised Forestry Code.[6] Mis sc
On January 31, 1992, the impounded vehicles were forcibly taken by Gabon and
Abuganda from the custody of the DENR, prompting DENR Officer Calub this
time to file a criminal complaint for grave coercion against Gabon and Abuganda.
The complaint was, however, dismissed by the Public Prosecutor. .[7]
On February 11, 1992, one of the two vehicles, with plate number FCN 143, was
again apprehended by a composite team of DENR-CENR in Catbalogan and
Philippine Army elements of the 802nd Infantry Brigade at Barangay Buray,
Paranas, Samar. It was again loaded with forest products with an equivalent
volume of 1,005.47 board feet, valued at P10,054.70. Calub duly filed a criminal
complaint against Constancio Abuganda, a certain Abegonia, and several John
Does, in Criminal Case No. 3625, for violation of Section 68 [78], Presidential
Decree 705 as amended by Executive Order 277, otherwise known as the Revised
Forestry Code..[8]
In Criminal Cases Nos. 3795 and 3625, however, Abegonia and Abuganda were
acquitted on the ground of reasonable doubt. But note the trial court ordered that a
copy of the decision be furnished the Secretary of Justice, in order that the
necessary criminal action may be filed against Noe Pagarao and all other persons

responsible for violation of the Revised Forestry Code. For it appeared that it was
Pagarao who chartered the subject vehicle and ordered that cut timber be loaded on
it..[9]

confiscation order has been issued prior to the seizure of the vehicle and the filing
of the replevin suit. Therefore, in failing to follow such procedure, according to the
appellate court, the subject vehicles could not be considered in custodia legis..[15]

Subsequently, herein private respondents Manuela Babalcon, the vehicle owner,

and Constancio Abuganda, the driver, filed a complaint for the recovery of
possession of the two (2) impounded vehicles with an application for replevin
against herein petitioners before the RTC of Catbalogan. The trial court granted the
application for replevin and issued the corresponding writ in an Order dated April
24, 1992..[10] Petitioners filed a motion to dismiss which was denied by the trial
court.[11]

Respondent Court of Appeals also found no merit in petitioners claim that private
respondents complaint for replevin is a suit against the State. Accordingly,
petitioners could not shield themselves under the principle of state immunity as the
property sought to be recovered in the instant suit had not yet been lawfully
adjudged forfeited in favor of the government. Moreover, according to respondent
appellate court, there could be no pecuniary liability nor loss of property that could
ensue against the government. It reasoned that a suit against a public officer who
acted illegally or beyond the scope of his authority could not be considered a suit
against the State; and that a public officer might be sued for illegally seizing or
withholding the possession of the property of another. .[16]

Thus, on June 15, 1992, petitioners filed with the Supreme Court the present
Petition for Certiorari, Prohibition and Mandamus with application for Preliminary
Injunction and/or a Temporary Restraining Order. The Court issued a TRO,
enjoining respondent RTC judge from conducting further proceedings in the civil
case for replevin; and enjoining private respondents from taking or attempting to
take the motor vehicles and forest products seized from the custody of the
petitioners. The Court further instructed the petitioners to see to it that the motor
vehicles and other forest products seized are kept in a secured place and protected
from deterioration, said property being incustodia legis and subject to the direct
order of the Supreme Court..[12] In a Resolution issued on September 28, 1992, the
Court referred said petition to respondent appellate court for appropriate
disposition..[13]
On May 27, 1994, the Court of Appeals denied said petition for lack of merit. It
ruled that the mere seizure of a motor vehicle pursuant to the authority granted by
Section 68 [78] of P.D. No. 705 as amended by E.O. No. 277 does not
automatically place said conveyance in custodia legis. According to the appellate
court, such authority of the Department Head of the DENR or his duly authorized
representative to order the confiscation and disposition of illegally obtained forest
products and the conveyance used for that purpose is not absolute and unqualified.
It is subject to pertinent laws, regulations, or policies on that matter, added the
appellate court. The DENR Administrative Order No. 59, series of 1990, is one
such regulation, the appellate court said. For it prescribes the guidelines in the
confiscation, forfeiture and disposition of conveyances used in the commission of
offenses penalized under Section 68 [78] of P.D. No. 705 as amended by E.O. No.
277..[14]
Additionally, respondent Court of Appeals noted that the petitioners failed to
observe the procedure outlined in DENR Administrative Order No. 59, series of
1990. They were unable to submit a report of the seizure to the DENR Secretary, to
give a written notice to the owner of the vehicle, and to render a report of their
findings and recommendations to the Secretary. Moreover, petitioners failure to
comply with the procedure laid down by DENR Administrative Order No. 59,
series of 1990, was confirmed by the admission of petitioners counsel that no

Respondent court brushed aside other grounds raised by petitioners based on the
claim that the subject vehicles were validly seized and held in custody because they
were contradicted by its own findings..[17] Their petition was found without
merit.[18] Rtc spped
Now, before us, the petitioners assign the following errors:.[19]
(1) THE COURT OF APPEALS ERRED IN HOLDING THAT
MERE SEIZURE OF A CONVEYANCE PURSUANT TO
SECTION 68-A [78-A] OF P.D. NO. 705 AS AMENDED BY
EXECUTIVE ORDER 277 DOES NOT PLACE SAID
CONVEYANCE IN CUSTODIA LEGIS;
(2) THE COURT OF APPEALS ERRED IN NOT HOLDING
THAT THE OPERATIVE ACT GIVING RISE FOR THE
SUBJECT CONVEYANCE TO BE IN CUSTODIA LEGIS IS
ITS LAWFUL SEIZURE BY THE DENR PURSUANT TO
SECTION 68-A [78-A] OF P.D. NO. 705, AS AMENDED BY
E.O. NO. 277; AND
(3) THE COURT OF APPEALS ERRED IN HOLDING THAT
THE COMPLAINT FOR REPLEVIN AGAINST THE
PETITIONERS IS NOT A SUIT AGAINST THE STATE.
In brief, the pertinent issues for our consideration are:
(1) Whether or not the DENR-seized motor vehicle, with plate number FCN 143, is
in custodia legis.

(2) Whether or not the complaint for the recovery of possession of impounded
vehicles, with an application for replevin, is a suit against the State.
We will now resolve both issues.
The Revised Forestry Code authorizes the DENR to seize all conveyances used in
the commission of an offense in violation of Section 78. Section 78 states:
Sec. 78. Cutting, Gathering, and or Collecting Timber, or Other
Forest Products without License. Any person who shall cut,
gather, collect, remove timber or other forest products from any
forestland, or timber from alienable or disposable public land, or
from private land, without any authority, or possess timber or
other forest products without the legal documents as required
under existing forest laws and regulations, shall be punished with
the penalties imposed under Articles 309 and 310 of the Revised
Penal Codeslx mis
The Court shall further order the confiscation in favor of the
government of the timber or any forest products cut, gathered,
collected, removed, or possessed, as well as the machinery,
equipment, implements and tools illegally used in the area where
the timber or forest products are found.
This provision makes mere possession of timber or other forest products without
the accompanying legal documents unlawful and punishable with the penalties
imposed for the crime of theft, as prescribed in Articles 309-310 of the Revised
Penal Code. In the present case, the subject vehicles were loaded with forest
products at the time of the seizure. But admittedly no permit evidencing authority
to possess and transport said load of forest products was duly presented. These
products, in turn, were deemed illegally sourced. Thus there was a prima
facie violation of Section 68 [78] of the Revised Forestry Code, although as found
by the trial court, the persons responsible for said violation were not the ones
charged by the public prosecutor.
The corresponding authority of the DENR to seize all conveyances used in the
commission of an offense in violation of Section 78 of the Revised Forestry Code
is pursuant to Sections 78-A and 89 of the same Code. They read as follows: Sc
Sec. 78-A. Administrative Authority of the Department Head or
His Duly Authorized Representative to Order Confiscation. -- In
all cases of violation of this Code or other forest laws, rules and
regulations, the Department Head or his duly authorized
representative, may order the confiscation of any forest products
illegally cut, gathered, removed, or possessed or abandoned, and

all conveyances used either by land, water or air in the

commission of the offense and to dispose of the same in
accordance with pertinent laws, regulations or policies on the
matter.
Sec. 89. Arrest; Institution of criminal actions. -- A forest officer
or employee of the Bureau [Department] or any personnel of the
Philippine Constabulary/Philippine National Police shall arrest
even without warrantany person who has committed or is
committing in his presence any of the offenses defined in this
Chapter. He shall also seize and confiscate, in favor of the
Government, the tools and equipment used in committing the
offense... [Emphasis supplied.]
Note that DENR Administrative Order No. 59, series of 1990, implements Sections
78-A and 89 of the Forestry Code, as follows:
Sec. 2. Conveyances Subject to Confiscation and Forfeiture. -All conveyances used in the transport of any forest product
obtained or gathered illegally whether or not covered with
transport documents, found spurious or irregular in accordance
with Sec. 68-A [78-A] of P.D. No. 705, shall be confiscated in
favor of the government or disposed of in accordance with
pertinent laws, regulations or policies on the matter.
Sec. 4. Who are Authorized to Seize Conveyance. -- The
Secretary or his duly authorized representative such as the forest
officers and/or natural resources officers, or deputized officers of
the DENR are authorized to seize said conveyances subject to
policies and guidelines pertinent thereto. Deputized military
personnel and officials of other agencies apprehending illegal
logs and other forest products and their conveyances shall notify
the nearest DENR field offices, and turn over said forest products
and conveyances for proper action and disposition. In case where
the apprehension is made by DENR field officer, the conveyance
shall be deposited with the nearest CENRO/PENRO/RED Office
as the case may be, for safekeeping wherever it is most
convenient and secured. [Emphasis supplied.]
Upon apprehension of the illegally-cut timber while being transported without
pertinent documents that could evidence title to or right to possession of said
timber, a warrantless seizure of the involved vehicles and their load was allowed
under Section 78 and 89 of the Revised Forestry Code. Slxs c

Note further that petitioners failure to observe the procedure outlined in DENR
Administrative Order No. 59, series of 1990 was justifiably explained. Petitioners
did not submit a report of the seizure to the Secretary nor give a written notice to
the owner of the vehicle because on the 3rd day following the seizure, Gabon and
Abuganda, drivers of the seized vehicles, forcibly took the impounded vehicles
from the custody of the DENR. Then again, when one of the motor vehicles was
apprehended and impounded for the second time, the petitioners, again were not
able to report the seizure to the DENR Secretary nor give a written notice to the
owner of the vehicle because private respondents immediately went to court and
applied for a writ of replevin. The seizure of the vehicles and their load was done
upon their apprehension for a violation of the Revised Forestry Code. It would be
absurd to require a confiscation order or notice and hearing before said seizure
could be effected under the circumstances.
Since there was a violation of the Revised Forestry Code and the seizure was in
accordance with law, in our view the subject vehicles were validly deemed
in custodia legis. It could not be subject to an action for replevin. For it is property
lawfully taken by virtue of legal process and considered in the custody of the law,
and not otherwise..[20]
In Mamanteo, et. al. v. Deputy Sheriff Magumun, A.M. No. P-98-1264,
promulgated on July 28, 1999, the case involves property to be seized by a Deputy
Sheriff in a replevin suit. But said property were already impounded by the DENR
due to violation of forestry laws and, in fact, already forfeited in favor of the
government by order of the DENR. We said that such property was deemed
in custodia legis. The sheriff could not insist on seizing the property already
subject of a prior warrant of seizure. The appropriate action should be for the
sheriff to inform the trial court of the situation by way of partial Sheriffs Return,
and wait for the judges instructions on the proper procedure to be observed.
Note that property that is validly deposited in custodia legis cannot be the subject
of a replevin suit. In Mamanteo v. Deputy Sheriff Magumun, we elucidated further:
". . . the writ of replevin has been repeatedly used by
unscrupulous plaintiffs to retrieve their chattel earlier taken for
violation of the Tariff and Customs Code, tax assessment,
attachment or execution. Officers of the court, from the presiding
judge to the sheriff, are implored to be vigilant in their execution
of the law otherwise, as in this case, valid seizure and forfeiture
proceedings could easily be undermined by the simple devise of
a writ of replevin...".[21] Scslx
On the second issue, is the complaint for the recovery of possession of the two
impounded vehicles, with an application for replevin, a suit against the State?

Well established is the doctrine that the State may not be sued without its
consent..[22] And a suit against a public officer for his official acts is, in effect, a
suit against the State if its purpose is to hold the State ultimately
liable..[23]However, the protection afforded to public officers by this doctrine
generally applies only to activities within the scope of their authority in good faith
and without willfulness, malice or corruption.[24] In the present case, the acts for
which the petitioners are being called to account were performed by them in the
discharge of their official duties. The acts in question are clearly official in
nature.[25] In implementing and enforcing Sections 78-A and 89 of the Forestry
Code through the seizure carried out, petitioners were performing their duties and
functions as officers of the DENR, and did so within the limits of their authority.
There was no malice nor bad faith on their part. Hence, a suit against the
petitioners who represent the DENR is a suit against the State. It cannot prosper
without the States consent.
Given the circumstances in this case, we need not pursue the Office of the Solicitor
Generals line for the defense of petitioners concerning exhaustion of
administrative remedies. We ought only to recall that exhaustion must be raised at
the earliest time possible, even before filing the answer to the complaint or
pleading asserting a claim, by a motion to dismiss. .[26] If not invoked at the proper
time, this ground for dismissal could be deemed waived and the court could take
cognizance of the case and try it.[27] Mesm
ACCORDINGLY, the Petition is GRANTED, and the assailed Decision of the
Court of Appeals in CA-G.R. SP No. 29191 is SET ASIDE. Consequently, the
Order issued by the Regional Trial Court of Catbalogan, dated May 27, 1992, and
the Writ of replevin issued in the Order dated April 24, 1992, are ANNULLED.
The Sheriff of the Regional Trial Court of Catbalogan, Branch 29, is directed to
take possession of the subject motor vehicle, with plate number FCN 143, for
delivery to the custody of and appropriate disposition by petitioners. Let a copy of
this decision be provided the Honorable Secretary of Justice for his appropriate
action, against any and all persons responsible for the abovecited violation of the
Revised Forestry Code.
Costs against private respondents.
SO ORDERED.
(3) EUFEMIA SARMIENTO, petitioner, vs. COURT OF APPEALS and
GENEROSA S. CRUZ, respondents.
[G.R. No. 116192 November 16, 1995]
REGALADO, J.:

The judgment promulgated on February 28, 1994 by respondent Court of Appeals

in CA-G.R SP No. 32263 1reversing the decision of the regional trial court, as well
as its resolution of June 29, 1994 denying herein petitioner's motion for
reconsideration, are assailed in this petition for review on certiorari.
This case originated from a complaint for ejectment with damages filed by herein
private respondent Generosa S. Cruz, as plaintiff, against herein petitioner Eufemia
Sarmiento, as defendant, in the Municipal Circuit Trial Court of DinalupihanHermosa, Bataan as Civil Case No. 899, which complaint alleges these material
facts:
xxx xxx xxx
2. That the plaintiff acquired by purchase a parcel of land known
as Lot No. 2-A of the subd. plan, Psd-03-0345 being a portion of
Lot 2, covered by TCT No. T-147219, located at Bo. Mabuco,
Hermosa, Bataan, containing as area of 280 square meters, xerox
copy of the title is hereto attached as Annex "A" hereof and for
taxation purposes, the same is declared in the name of the
plaintiff, xerox copy of the tax declaration is hereto attached as
Annex "B" of this complaint;
3. That the adjacent lot of plaintiff is still owned by the family of
Atty. Gonzalo Nuguid but the same is being used and occupied
by the defendant where a house was constructed thereon;
4. That when the plaintiff caused the relocation of her lot herein
mentioned, it was found out by the Geodetic Engineer that the
defendant is encroaching on her lot for about 71 square meters,
copy of the relocation sketch by said surveyor is hereto attached
as Annex "C" hereof;
5. That when the plaintiff talked to the defendant that she would
like to remove the old fence so that she could construct a new
fence which will cover the true area of her property, the
defendant vehemently refused to let the plaintiff remov(e) the
said fence and menacingly alleged that if plaintiff remove(d) the
said fence to construct a new one, she would take action against
the plaintiff legally or otherwise;
6. For fear that plaintiff may be charged in court should she insist
on removing the fence encroaching on her property, plaintiff now
seeks judicial relief;

7. That plaintiff refer(red) this matter to the Katarungang

Pambarangay of Mabuco for settlement, however, the efforts of
the Lupon Tagapamayapa turned futile, as evidenced by a
certification to file action issued by the Lupon secretary and
attested by the Lupon Chairman, copy of the certification to file
action is hereto attached as Annex "D" hereof;
8. Plaintiff as much as possible would like to avoid court
litigation because she is poor but nevertheless she consulted the
undersigned counsel and a demand letter was sent to the
defendant for conference and/or settlement but the defendant
stood pat that she will not allow the removal of the fence, thus
depriving the plaintiff of the use and possession of the said
portion of her lot (71 square meters) which is being occupied by
the defendant for several years, xerox copy of the demand letter
is hereto attached as Annex "E" of this complaint;
9. That by virtue of the willful refusal of the defendant to allow
the plaintiff to have the fence dismantled and/or to be removed,
the plaintiff is deprived of the possession and she was forced to
hire the services of counsel for which she contracted to pay the
sum of P2,000.00 plus acceptance of P1,000.00 until the
termination of this case before this Honorable Court. 2
xxx xxx xxx
On January 21, 1993, the trial court, on motion, issued an order giving the
defendant to file her answer to the complaint. 3 This was opposed by the plaintiff
therein on the ground that Section 15(e) of the Rule on Summary Procedure does
not allow the filing of motion for extension of time to file pleadings, affidavits or
any other papers. 4 Nonetheless, defendant filed on January 29, 1993 her "Answer
with Motion to Dismiss." 5 Plaintiff filed and ex-parte motion reiterating her
contention that the filing by defendant of her aforesaid answer with motion was
barred for reason that her preceding motion for extension of time to file an answer
is a prohibited pleading. 6 On February 4, 1993, the trial court, finding merit in
plaintiff'sex-parte motion, ordered that defendant's answer be stricken from the
records for having been filed out of time. 7 The case was then submitted for
decision.
On February 18, 1993, the trial court rendered its decision with the following
decretal portion:
WHEREFORE, judgment is hereby rendered in favor of the
plaintiff and against the defendant, ordering the latter:

1. To vacate the area being encroached (upon) by the defendant

and allowing the plaintiff to remove the old fence permanently
and (to) make the necessary enclosure of the area pertaining to
the herein plaintiff containing an area of 280 square meters, more
or less;
2. Ordering the defendant to pay the plaintiff the sum of
P1,500.00 as attorney's fees. No pronouncement as to damages;
3. To pay the cost(s) of this suit. 8 (Corrections in parentheses
supplied.)
Defendant filed a motion for the reconsideration of said judgment, but the same
was denied by the trial court for lack of merit in its order dated March 2, 1993. 9
On appeal to the Regional Trial Court of Dinalupihan Bataan, Branch 5, in Civil
Case No DH-121-93, defendant assailed the jurisdiction of the court a quo. On
June 21, 1993, said lower appellate court rendered judgment, stating in part as
follows:
A perusal of the records of the case and the memorandum of
appeal of the adversaries led this court to the opinion that the
court a quo did not acquire jurisdiction to hear, try and decide the
instant appealed case based on (the) reason that the said case
should be one of question of ownership oraccion
rei(vin)dicatoria rather than that of forcible entry as the(re) was
no allegation of prior possession by the plaintiff (of) the disputed
lot as required by law and jurisprudence. Absence of allegations
and proof by the plaintiff in forcible entry case of prior
possession of the disputed lot (sic) cannot be said that defendant
dispossesses her of the same, thus, the legal remedy sought by
the plaintiff is not the proper one as it should have been accion
publiciana or accion rei(vin)dicatoria, as the case may be, and
the forum of which is the Regional Trial Court.
This Court declines to venture into other issues raised by the
defendant/appellant considering that the resolution on
jurisdiction renders the same moot and academic. 10 (Corrections
in parentheses ours.)
Therein plaintiffs motion for reconsideration having been denied in said lower
court's order dated August 12, 1993, 11 she elevated the case to the Supreme Court
through a petition for review on certiorari, purportedly on pure questions of law.
This Court, treating the petition as a special civil action for certiorari, referred the

case to respondent Court of Appeals for proper determination and disposition

pursuant to Section 9(1) of Batas Pambansa Blg. 129. 12
On February 28, 1994, the Court of Appeals rendered judgment in CA-G.R. SP No.
32263 13 reversing the decision of the regional trial court and reinstating that of the
municipal circuit trial court, hence the present petition.
The chief issue for our resolution is whether or not the court of origin had
jurisdiction over the ejectment case. Well-settled is the rule that the jurisdiction of
the court, as well as the nature of the action, are determined by the averments in the
complaint. 14 Accordingly, the issue in the instant case can only be properly
resolved by an examination and evaluation of the allegations in the complaint in
Civil Case No. 899 of said trial court.
A careful reading of the facts averred in said complaint filed by herein private
respondent reveals that the action is neither one of forcible entry nor of unlawful
detainer but essentially involves a boundary dispute which must be resolved in
an accion reivindicatoria on the issue of ownership over the disputed 71 square
meters involved.
Forcible entry and unlawful detainer cases are two distinct actions defined in
Section 1, Rule 70 of the Rules of Court. In forcible entry, one is deprived of
physical possession of land or building by means of force, intimidation, threat,
strategy, or stealth. In unlawful detainer, one unlawfully withholds possession
thereof after the expiration or termination of his right to hold possession under any
contract, express or implied. In forcible entity, the possession is illegal from the
beginning and the basic inquiry centers on who has the prior possession de facto. In
unlawful detainer, the possession was originally lawful but became unlawful by the
expiration or termination of the right to possess, hence the issue of rightful
possession is decisive for, in such action, the defendant is in actual possession and
the plaintiffs cause of action is the termination of the defendant's right to continue
in possession.15
What determines the cause of action is the nature of defendant's entry into the land.
If the entry is illegal, then the action which may be filed against the intruder within
one year therefrom is forcible entry. If, on the other hand, the entry is legal but the
possession thereafter became illegal, the case is one of unlawful detainer which
must be filed within one year from the date of the last demand. 16
In the case at bar, the complaint does not characterize herein petitioner's alleged
entry into the land, that is, whether the same was legal or illegal. It does not state
how petitioner entered upon the land and constructed the house and the fence
thereon. It is also silent on whether petitioner's possession became legal before
private respondent made a demand on her to remove the fence. The complaint
merely avers that the lot being occupied by petitioner is owned by a third person,

not a party to the case, and that said lot is enclosed by a fence which private
respondent claims is an encroachment on the adjacent lot belonging to her.
Furthermore, it is also alleged and admitted in the complaint that the said fence was
already in existence on that lot at the time private respondent bought her own lot
and it was only after a relocation survey was made that it was found out that
petitioner is allegedly encroaching on the lot of the former. Consequently, there is
here no contract, express or implied, between petitioner and private respondent as
would qualify it as a case of unlawful detainer. Neither was it alleged that the
possession of the disputed portion of said lot was acquired by petitioner through
force, intimidation, threat, strategy or stealth to make out a case of forcible entry.
Private respondent cannot now belatedly claim that petitioner's possession of the
controverted portion was by mere tolerance since that fact was never alleged in the
former's basic complaint, and this argument was raised in her later pleadings more
as an afterthought. Also, it would be absurd to argue that private respondent
tolerated a state of affairs of which she was not even then aware. Finally, to
categorize a cause of action as one constitutive of unlawful detainer, plaintiff's
supposed acts of tolerance must have been present right from the start of the
possession which is later sought to be recovered. 17
Indeed, and this was definitely not the situation that obtained in and gave rise to the
ejectment suit, to hold otherwise would espouse a dangerous doctrine, for two
reasons: First. Forcible entry into the land is an open challenge to the right of the
lawful possessor, the violation of which right authorizes the speedy redress in the
inferior court provided for in the Rules. If a period of one year from the forcible
entry is allowed to lapse before suit is filed, then the remedy ceases to be speedy
and the aggrieved possessor is deemed to have waived his right to seek relief in the
inferior court. Second. If a forcible entry action in the inferior court is allowed after
the lapse of a number of years, then the result may well be that no action of
forcible entry can really prescribe. No matter how long such defendant is in
physical possession, plaintiff will merely make a demand, bring suit in the inferior
court upon a plea of tolerance to prevent prescription from setting in and
summarily throw him out of the land. Such a conclusion is unreasonable, especially
if we bear in mind the postulates that proceedings of forcible entry and unlawful
detainer are summary in nature, and that the one year time-bar to the suit is but in
pursuance of the summary nature of the action. 18
To give the court jurisdiction to effect the ejectment of an occupant or deforciant
on the land, it is necessary that the complaint should embody such a statement of
facts as brings the party clearly within the class of cases for which the statutes
provide a remedy, as these proceedings are summary in nature. 19 The complaint
must show enough on its face to give the court jurisdiction without resort to parol
testimony. 20

The jurisdictional facts must appear on the face of the complaint. When the
complaint fails to aver facts constitutive of forcible entry or unlawful detainer, as
where it does not state how entry was effected or how and when dispossession
started, as in the case at bar, the remedy should either be an accion publiciana or
an accion
reivindicatoria in
the
proper
regional
trial
court. 21
If private respondent is indeed the owner of the premises subject of this suit and
she was unlawfully deprived of the real right of possession or the ownership
thereof, she should present her claim before the regional trial court in an accion
publiciana or an accion reivindicatoria, and not before the municipal trial court in
a summary proceeding of unlawful detainer or forcible entry. For even if one is the
owner of the property, the possession thereof cannot be wrested from another who
had been in the physical or material possession of the same for more than one year
by resorting to a summary action for ejectment. This is especially true where his
possession thereof was not obtained through the means or held under the
circumstances contemplated by the rules on summary ejectment.
We have held that in giving recognition to the action of forcible entry and unlawful
detainer, the purpose of the law is to protect the person who in fact has actual
possession; and in case of a controverted proprietary right, the law requires the
parties to preserve the status quo until one or the other sees fit to invoke the
decision of a court of competent jurisdiction upon the question of ownership. 22
On the foregoing premises and with these conclusions, it is unnecessary to pass
upon the other issues raised in the petition at bar.
ACCORDINGLY, the instant petition is GRANTED, and the judgment of the
Court of Appeals in CA-G.R. SP No. 32263 is hereby REVERSED and SET
ASIDE. The judgment of the Regional Trial Court of Dinalupihan, Bataan, Branch
5, in Civil Case No. DH-121-93 is REINSTATED, without pronouncement as to
costs.
SO ORDERED.

(4) TERESITA BONGATO, petitioner, vs. Spouses SEVERO A. MALVAR

and TRINIDAD MALVAR, respondents.
[G.R. No. 141614. August 14, 2002]
PANGANIBAN, J.:
An action for forcible entry is a quieting process that is summary in nature. It
is designed to recover physical possession in speedy proceedings that are restrictive
in nature, scope and time limits. The one-year bar within which to bring the suit is

prescribed to complement its summary nature. Thus, after the one-year period has
lapsed, plaintiffs can no longer avail themselves of the summary proceedings in the
municipal trial court but must litigate, in the normal course, in the regional trial
court in an ordinary action to recover possession, or to recover both ownership and
possession.

Statement of the Case

Before us is a Petition for Review on Certiorari under Rule 45 of the Rules of
Court, assailing the December 16, 1998 Decision[1] and the September 1, 1999
Resolution[2] of the Court of Appeals (CA) in CA-GR SP No. 34204. The decretal
portion of the Decision reads:
WHEREFORE, the petition is hereby dismissed for lack of merit. Costs against
petitioner.[3]
The assailed Resolution denied petitioners Motion for Reconsideration.
The CA sustained the Decision of the Regional Trial Court (RTC) of Butuan
City (Branch 4), which had disposed thus:
WHEREFORE, in view of all the foregoing, the Court hereby affirms the decision
of the Municipal Trial Court in Cities, Branch 2 penned by the Honorable Santos
Rod. Cedro and the Writ of Execution issued on the 24 th day of August 1993 upon
order of the Honorable Rosarito F. Dabalos (Record, p. 42, Folio II) can now be
served on the defendant.[4]

of the Public Attorneys Office, petitioner filed a motion to dismiss which the
MTCC denied as being contrary to the Rule on Summary Procedure.
Thereafter, the MTCC rendered a decision ordering petitioner to vacate the land in
question, and to pay rentals, attorneys fees, and the costs of the suit. The decision
was affirmed by respondent RTC judge. Petitioner filed a motion for
reconsideration.
On March 4, 1994, respondent Judge issued an order granting the motion for
reconsideration only insofar as to determine the location of the houses involved in
this civil case so that the Court will know whether they are located on one and the
same lot or a lot different from that involved in the criminal case for AntiSquatting. In the same order, respondent Judge disallowed any extension and
warned that if the survey is not made, the court might consider the same abandoned
and the writ of execution would be issued.
The criminal case for anti-squatting (Crim. Case No. 4659) was filed by private
respondents Malvar against petitioner Bongato. The case is still pending with the
Regional Trial Court, Branch I, Butuan City.
On March 28, 1994, petitioner filed a motion for extension of the March 29, 1994
deadline for the submission of the relocation survey and to move the deadline to
April 15, 1994, as the engineer concerned, Engr. Lumarda, could not conduct his
survey during the Holy Week, he being a lay minister and parish council member.
On April 7, 1994, respondent Judge noted that no survey report was submitted and
ordered the record of the case returned to the court of origin for
disposal.[5] (Citations omitted)

The Facts

Ruling of the Court of Appeals

The factual antecedents of the case are summarized by the Court of Appeals
as follows:

The CA held that the lot referred to in the present controversy was different
from that involved in the anti-squatting case.[6] It further ruled that the Municipal
Trial Court in Cities (MTCC) had jurisdiction, and that it did not err in rejecting
petitioners Motion to Dismiss. The appellate court reasoned that the MTCC had
passed upon the issue of ownership of the property merely to determine possession
-- an action that did not oust the latter of its jurisdiction. [7]

The spouses Severo and Trinidad Malvar filed a complaint for forcible entry
against petitioner Teresita Bongato, alleging that petitioner Bongato unlawfully
entered a parcel of land covered by TCT No. RT-16200 belonging to the said
spouses and erected thereon a house of light materials. The petitioner filed a
motion for extension of time to file an answer which the MTCC denied; it being
proscribed under the Rule on Summary Procedure, and likewise containing no
notice of hearing. With a new counsel, Atty. Viador C. Viajar, petitioner filed an
answer which the MTCC disregarded, the same having been filed beyond the tenday reglementary period. Later, with still another counsel, Atty. Jesus G. Chavez

Unsatisfied with the CA Decision, petitioner lodged this Petition. [8]

Issues

In her Memorandum, petitioner raises the following issues for this Courts
consideration:
I
Whether or not the Court of Appeals gravely abused its discretion in not finding
that the trial court lacked jurisdiction since the Complaint was filed beyond the
one-year period from date of alleged entry;
II
Whether or not the Court of Appeals gravely abused its discretion in ruling that
the Motion to Dismiss was a prohibited pleading.[9]

This Courts Ruling

The Petition is meritorious.

First Issue:
MTCC Jurisdiction
Petitioner claims that the MTCC had no jurisdiction, because the Complaint
for forcible entry was filed only in 1992 or beyond the one-year period provided
under the Rules of Civil Procedure.[10] She avers that in Criminal Case No. 4659
for anti-squatting, Respondent Severo Malvar alleged in his Sworn Statement that
petitioner had illegally entered his land sometime in the first week of January
1987. [11]
On the other hand, respondents contend that the subject of the anti-squatting
case is different from the parcel of land involved here.[12]
Before tackling the issue directly, it is worthwhile to restate three basic legal
principles. First, in forcible entry, one employs force, intimidation, threat, strategy
or stealth to deprive another of physical possession of land or building. [13] Thus, the
plaintiff must allege and prove prior physical possession of the property in

litigation
until
deprived
thereof
by the defendant.[14] This requirement implies that the possession of the
disputed land by the latter was unlawful from the beginning. [15] The sole question
for resolution hinges on the physical or material possession (possession de facto) of
the property. Neither a claim of juridical possession (possession de jure) nor an
averment of ownership[16] by the defendant can outrightly prevent the court from
taking cognizance of the case.[17] Ejectment cases proceed independently of any
claim of ownership, and the plaintiff needs merely to prove prior possessionde
facto and undue deprivation thereof.[18]
Second, as a general rule, courts do not take judicial notice of the evidence
presented in other proceedings, even if these have been tried or are pending in the
same court or before the same judge.[19] There are exceptions to this
rule. Ordinarily, an appellate court cannot refer to the record in another case to
ascertain a fact not shown in the record of the case before it, [20] yet, it has been held
that it may consult decisions in other proceedings, in order to look for the law that
is determinative of or applicable to the case under review. [21] In some instances,
courts have also taken judicial notice of proceedings in other cases that are closely
connected to the matter in controversy.[22]These cases may be so closely
interwoven, or so clearly interdependent, as to invoke a rule of judicial notice. [23]
Third, factual findings of trial courts, especially when affirmed by the Court
of Appeals, are binding on the Supreme Court. Indeed, the review of such findings
is not a function that this Court normally undertakes. [24] However, this Rule is not
absolute; it admits of exceptions, such as (1) when the findings are grounded
entirely on speculation, surmises or conjectures; (2) when a lower courts inference
from its factual findings is manifestly mistaken, absurd or impossible; (3) when
there is grave abuse of discretion in the appreciation of facts; (4) when the findings
of the appellate court go beyond the issues of the case, run contrary to the
admissions of the parties to the case, or fail to notice certain relevant facts which -if properly considered -- will justify a different conclusion; (5) when there is a
misappreciation of facts; (6) when the findings of fact are conclusions without
mention of the specific evidence on which they are based, are premised on the
absence of evidence, or are contradicted by evidence on record. [25]
Respondents in the present Petition filed three cases against petitioner: (1)
Criminal Case No. 4659 for violation of PD No. 772 [26] (filed on October 2, 1991),
in which petitioner was acquitted on the ground of good faith; (2) Civil Case No.
5681 for forcible entry (filed on July 10, 1992) which was resolved by the MTCC
on October 26, 1992.[27] (3) Criminal Case No. 5734 for Violation of PD No.
1096[28] (filed on July 15, 1993), wherein petitioner was again acquitted.
We agree with respondents that Lot 10-A, covered by Transfer Certificate of
Title (TCT) No. RT-16200[29] and registered under the name of Severo Malvar, is
different from Lot 1 which is covered by TCT No. RT-15993[30] and registered
under the name of Severo Malvar also. However, we cannot ignore the
Decision[31] dated April 30, 1996 in Criminal Case No. 4659 for violation of PD
772; or the Decision[32] dated November 26, 1997 in Criminal Case No. 5734 for

violation of PD 1096. The property involved in these two criminal cases and in the
instant case for forcible entry is one and the same -- petitioners house.
The allegation of petitioner that there is only one house involved in these
three cases has not been controverted by respondents. Neither was there evidence
presented to prove that, indeed, she had constructed one house on Lot
1 and another on Lot 10-A. On the contrary, she correctly points out that the house
involved in these three cases is found on one and the same location. Verily, in his
Sworn Statement[33] submitted in Criminal Case No. 4659, Respondent Severo
Malvar stated that petitioners house was located in front of the Museum and just
behind the City Hall. On the other hand, in the Complaint [34] for forcible entry, the
subject property was said to be located along Doongan Road and right in front of
the Regional National Museum and not far behind the City Hall of Butuan
City. Lastly, the Decision[35] in Criminal Case No. 5734 stated that the building
inspector, Engineer Margarita Burias, had responded to a verbal complaint
involving a structure built near the Museum in Upper Doongan, Butuan City.
Based on these factual antecedents, there is cogent basis for petitioners
contention that the MTCC lacked jurisdiction in this case.
First, respondents allege that the subject house was built by petitioner on Lot
10-A covered by TCT No. 16200. This allegation is belied by the sketch
plan[36] dated June 16, 1994, submitted by Engineer Regino A. Lomarda Jr. To
recall, in an Order[37] dated March 4, 1994, the RTC had required petitioner to
submit a relocation survey of Lot 10-A to determine the location of the house and
to ascertain if it was the same house involved in Criminal Case No. 4659 for antisquatting. However, because of the Holy Week, petitioner failed to submit the
relocation survey within the period provided by the RTC. In the said sketch plan
that was offered in evidence as Exhibit 5 in the anti-squatting case, Engineer
Lomarda Jr. certified that the hut of Teresita Bongato is not within Lot 10-A as
shown in this plan as relocated by the undersigned based [o]n TCT No. RT-1576 of
Benjamin Eva, et al. and [o]n TCT No. RT-16200 of Lot 10-A of Severo Malvar.
Second, according to the Decision in Criminal Case No. 4659, petitioners
house is actually located on Lot 1, the parcel of land previously covered by TCT
No. RT-15993 and subject of the anti-squatting case. The RTC Judge in said case
ruled:
The lot on which accuseds house is standing was formerly covered by Transfer
Certificate of Title No. RT-15993 dated January 24, 1983 in the name of Severo
Malvar, and superseded by Transfer Certificate of Title No. RT-24589 dated
December 3, 1991 in the name of Butuan Land Developers Group, Inc.[38]
Third, petitioners house had actually been in existence prior to February
1992, the alleged date of illegal entry. Thus, in Criminal Case No. 5734 for
violation of PD 1096, the RTC Judge opined as follows:

Firstly, the prosecution has not proven that the accused had constructed or for that
matter was constructing the questioned house in February of 1992, since it was
never stated that when the complaint was lodged with the City Engineers Office,
that the house occupied by the accused was under construction or under renovation.
The fact that Engr. Burias even admitted that she had no knowledge of when the
structure was built implicitly indicates that the same was completely erected or
constructed before Engr. Burias visit, or even for that matter, before the complaint
was filed.[39]
That the house of petitioner had been constructed by her father and that she
had merely continued to reside therein was upheld by the Decision, which we
quote:
Suffice it to state, however, that We are convinced, given the testimonial evidence
offered that the house in question was not built by the accused, but by her father,
Jacinto Bongato sometime in 1935; that accused merely lived in the house as a
member of Jacinto Bongatos family until the death of her parents, whereupon, she
continued to reside in the said house and now claims to be its owner. [40]
Fourth, Respondent Severo Malvar admitted in Criminal Case No. 4659 that
he had knowledge of petitioners house since January 1987. We quote from his
testimony:
Q

Earlier, Judge Malvar, you told this Honorable Court that you discovered
sometime in January 1987, the accused was occupying your property
consisting of 348 square meters. What did you do upon discovering that
the accused already occupied a portion of your property without your
knowledge?

I want to demolish her house. I told her that I am the owner of the land and
she is looking for the hectare that was not sold by her father to me.

And upon being informed by Teresita Bongato that they were looking for
the hectare lot which was not sold to you by her father, what did you
say to her?

I told her to remove her house. Then after that, I was so busy with the
squatters along Satorre Street of the Malvar Village that kept me so busy.
It was only last year that we were able to attend to this.[41]

It is wise to be reminded that forcible entry is a quieting process, and that the
restrictive time bar is prescribed to complement the summary nature of such
process.[42] Indeed, the one-year period within which to bring an action for forcible
entry is generally counted from the date of actual entry to the land. However,
when entry is made through stealth, then the one-year period is counted from the
time the plaintiff learned about it.[43] After the lapse of the one-year period, the
party dispossessed of a parcel of land may file either an accion publiciana, which

is a plenary action to recover the right of possession; or an accion

reivindicatoria, which is an action to recover ownership as well as possession. [44]
On the basis of the foregoing facts, it is clear that the cause of action for
forcible entry filed by respondents had already prescribed when they filed the
Complaint for ejectment on July 10, 1992. [45] Hence, even if Severo Malvar may be
the owner of the land, possession thereof cannot be wrested through
a summary action for ejectment of petitioner, who had been occupying it for more
than one (1) year.[46] Respondents should have presented their suit before the RTC
in an accion publiciana or an accion reivindicatoria, not before the MTCC in
summary proceedings for forcible entry.[47] Their cause of action for forcible entry
had prescribed already, and the MTCC had no more jurisdiction to hear and decide
it.[48]

Second Issue:
Motion to Dismiss
Petitioner further argues that a motion to dismiss based on lack of
jurisdiction over the subject matter is not a prohibited pleading, but is
allowed under Sec. 19(a) of the Revised Rule on Summary Procedure. [49] We
agree.
The Rule on Summary Procedure was promulgated specifically to achieve
an expeditious and inexpensive determination of cases.[50] The speedy resolution
of unlawful detainer cases is a matter of public policy,[51] and the Rule should
equally apply with full force to forcible entry cases, in which possession of the
premises is already illegal from the start.[52] For this reason, the Rule frowns upon
delays and prohibits altogether the filing of motions for extension of
time. Consistently, Section 6 was added to give the trial court the power to render
judgment, even motu proprio, upon the failure of a defendant to file an answer
within the reglementary period.[53] However, as forcible entry and detainer cases
are summary in nature and involve disturbances of the social order, procedural
technicalities should be carefully avoided[54] and should not be allowed to override
substantial justice.[55]
Pursuant to Section 36[56] of BP 129,[57] the Court on June 16, 1983,
promulgated the Rule on Summary Procedure in Special Cases. [58] Under this Rule,
a motion to dismiss or quash is a prohibited pleading. Under the 1991 Revised
Rule on Summary Procedure, however,[59] a motion to dismiss on the ground of
lack of jurisdiction over the subject matter is an exception to the rule on prohibited
pleadings:
SEC. 19. Prohibited pleadings and motions. The following pleadings, motions,
or petitions shall not be allowed in the cases covered by this Rule:

(a)

xxx

Motion to dismiss the complaint or to quash the

complaint or information except on the ground of lack
of jurisdiction over the subject matter, or failure to
comply with the preceding section;
xxx

x x x

Further, a courts lack of jurisdiction over the subject matter cannot be

waived by the parties or cured by their silence, acquiescence or even express
consent.[60] A party may assail the jurisdiction of the court over the action at any
stage of the proceedings and even on appeal.[61] That the MTCC can take
cognizance of a motion to dismiss on the ground of lack of jurisdiction, even if an
answer has been belatedly filed we likewise held in Bayog v. Natino:[62]
The Revised Rule on Summary Procedure, as well as its predecessor, do not
provide that an answer filed after the reglementary period should be expunged
from the records. As a matter of fact, there is no provision for an entry of default if
a defendant fails to answer. It must likewise be pointed out that MAGDATOs
defense of lack of jurisdiction may have even been raised in a motion to dismiss as
an exception to the rule on prohibited pleadings in the Revised Rule on Summary
Procedure. Such a motion is allowed under paragraph (a) thereof, x x x.
In the case at bar, the MTCC should have squarely ruled on the issue of
jurisdiction, instead of erroneously holding that it was a prohibited pleading under
the Rule on Summary Procedure.[63] Because the Complaint for forcible entry was
filed on July 10, 1992, the 1991 Revised Rule on Summary Procedure was
applicable.
Finally, the MTCC should have taken into account petitioners Answer,[64] in
which she averred that she had been in constant occupation on said land in
question since birth on March 17, 1941 up to the present, being an heir of the late
Emiliana Eva-Bongato, who inherited said property from her father Raymundo Eva
with considerable improvements thereon. It should have heard and received the
evidence adduced by the parties for the precise purpose of determining whether or
not it possessed jurisdiction over the subject matter.[65] And after such hearing, it
could have dismissed the case for lack of jurisdiction. [66] In this way, the long,
drawn out proceedings that took place in this case could have been avoided.[67]
WHEREFORE,
the
Petition
is GRANTED and the
assailed
Decision ANNULLED and SET ASIDE. The Complaint for forcible entry
is DISMISSED for lack of jurisdiction. No pronouncement as to costs.
SO ORDERED.

the land in his favor. The appealed decision was affirmed in toto by the appellate
court. A motion for reconsideration, for lack of merit, did not prosper.

(5) EUGENIO DE LA CRUZ, petitioner, vs. COURT OF APPEALS, and

CRISTINA MADLANGSAKAY VILLANUEVA, respondents.
[G.R. No. 120652. February 11, 1998]
ROMERO, J.:
The oft-debated issue of ownership based on acquisitive prescription submits
itself before the Court anew, involving a four hundred and seven (407) square
meter residential lot located at Barangay San Jose, Bulacan, Bulacan. Petitioner
Eugenio De La Cruz claims to be the owner and actual possessor of the lot, having
possessed and occupied it openly, publicly, notoriously, adversely against the
whole world, and in the concept of an owner, for more than thirty years, [1] at the
commencement of this controversy on September 28, 1987. Private respondent
Cristina Madlangsakay Villanueva is a purchaser of the same lot from the Ramos
brothers, Rogelio and Augusto, Jr., who claim to be successors-in-interest of a
previous possessor of the same.
In October 1959, petitioner contracted a loan from the parents of private
respondent, Anastacio Sakay and Lourdes Manuel, in the amount of one thousand
pesos (P1,000.00), mortgaging the disputed land as security. Sometime in 1973, the
land became the subject of an application for registration under the Land
Registration Act (Act No. 496)[2] by the Ramos brothers. They insisted that, under
said Act, they had a better claim than petitioner, being successors-in-interest of a
previous possessor of the land. Petitioner seasonably opposed the application
which, after trial, was denied on the ground that the land, not having been
reclassified for other purposes, remained part of the forest reserve, hence,
inalienable.[3] Consequently, the opposition was dismissed. Shortly thereafter, the
brothers successfully pursued the reclassification of the land and were granted
ownership of the same. It was after this occurrence that private respondent came to
purchase the disputed land from the Ramoses.
Oblivious of the Ramoses success in claiming the land, petitioner was later
surprised to learn that its ownership had been bestowed upon them, and that it was
subsequently sold to private respondent. Petitioner, as plaintiff in Civil Case No.
520-M-87, entitled Eugenio De La Cruz versus Cristina Madlangsakay
Villanueva, filed a complaint on September 28, 1987 for reconveyance with
damages against private respondent, defendant therein. The complaint was
dismissed.
On appeal, plaintiff-appellant elucidated that an uncle of his had given the
land to his mother, after having purchased it from a Cecilio Espiritu in 1930. [4] He
sought a reversal of the decision of the lower court, praying for a reconveyance of

The persistent petitioner, filing this petition for review, opined that the
questioned decision of the trial court was incompatible with the ruling in Republic
vs. Court of Appeals and Miguel Marcelo, et al., [5] where this Court held that the
primary right of a private individual who possessed and cultivated the land in good
faith, much prior to its classification, must be recognized and should not be
prejudiced by after-events which could not have been anticipated.[6] He relies on
the equitable principle of estoppel, alleging that, by virtue of the contract of
mortgage, private respondent and her parents thereby tacitly acknowledged him as
the true and lawful owner of the mortgaged property. As such, they are estopped
from claiming for themselves the disputed land. He prays for the reconveyance of
the lot in his favor; moral damages in the amount of ten thousand pesos
(P10,000.00); exemplary damages of like amount; and attorneys fees of twenty
thousand pesos (P20,000.00), plus one thousand pesos (P1,000.00) per court
appearance and the costs of the suit.[7]
This petition cannot be given due course.
The several decades when petitioner possessed and occupied the land in
question may not be considered in his favor after all. In an action for
reconveyance, what is sought is the transfer of the property which has been
wrongfully or erroneously registered in another persons name, to its rightful and
legal owner, or to one with a better right. This (sic) is what reconveyance is all
about.[8]
The crucial point for resolution is this: Is petitioner vested with a better right
over the residential lot to which he devoted an abundance of time, effort and
resources in fencing and cultivating the same? It is sad that even the magnanimous
compassion of this Court cannot offer him any spark of consolation for his
assiduous preservation and enhancement of the property.
We answer in the negative.
Unfortunately for him, Republic vs. Court of Appeals and Miguel Marcelo, et
al.[9] is inapplicable in the present case. In said case, the disputed land was
classified after the possession and cultivation in good faith of the applicant. The
Court stated that the primary right of a private individual who possessed and
cultivated the land in good faith much prior to such classification must be
recognized and should not be prejudiced by after-events which could not have been
anticipated.[10] Land Classification Project No. 3 was certified by the Director of
Lands on December 22, 1924, whereas the possession thereof commenced as early
as 1909.[11] Petitioner therein was not deprived of his possessory rights by the
subsequent classification of the land. Although the classification of lands is a
government prerogative which it may opt to exercise to the detriment of another,
still, private interests regarding the same are not prejudiced and the possessor in
good faith is respected in his right not be disturbed. This was the auspicious
situation of petitioner in the abovecited case.

Here, petitioner possessed and occupied the land after it had been declared by
the Government as part of the forest zone. In fact, the land remained part of the
forest reserve until such time that it was reclassified into alienable or disposable
land at the behest of the Ramoses. As succinctly stated by this Court in Director of
Lands vs. Court of Appeals,[12] a positive act of the Government is needed to
declassify land which is classified as forest, and to convert it into alienable or
disposable land for other purposes. Until such lands have been properly declared
to be available for other purposes, there is no disposable land to speak
of.[13] Absent the fact of declassification prior to the possession and cultivation in
good faith by petitioner, the property occupied by him remained classified as forest
or timberland, which he could not have acquired by prescription.[14]

it had been classified as a forest land and remained a part of the patrimonial
property of the State. Assuming, without admitting, that the mortgagees cannot
subsequently question the fact of ownership of petitioner after having dealt with
him in that capacity, still, petitioner was never vested with the proprietary power to
encumber the property. In fact, even if the mortgagees continued to acknowledge
petitioner as the owner of the disputed land, in the eyes of the law, the latter can
never be presumed to be owner.
WHEREFORE, considering the foregoing, we are bound by the findings of
the appellate court and are constrained to AFFIRM the same in toto. No
pronouncement as to costs.
SO ORDERED.

Clearly, the effort to apply Republic vs. Court of Appeals and Miguel
Marcelo, et al. in the case at bar is futile. No similarity of facts or events exist
which would merit its application to the case presented by petitioner.
Neither may the rewards of prescription be successfully invoked by
petitioner, as it is an iron-clad dictum that prescription can never lie against the
Government. The lengthy occupation of the disputed land by petitioner cannot be
counted in his favor, as it remained part of the patrimonial property of the State,
which property, as stated earlier, is inalienable and indisposable. Under Article
1113 of the Civil Code:
All things which are within the commerce of men are susceptible of
prescription, unless otherwise provided. Property of the State or any of its
subdivisions not patrimonial in character shall not be the object of
prescription. (Italics supplied).
Further, jurisprudence is replete with cases which iterate that forest lands or
forest reserves are not capable of private appropriation, and possession
thereof, however long, cannot convert them into private property.[15]Possession of
the residential lot by petitioner, whether spanning decades or centuries, could never
ripen into ownership. This Court is constrained to abide by the latin maxim
(d)ura lex, sed lex.[16]
The fact that the disputed land was used for a dual private purpose, namely,
as a residential lot and as part of the ricemill business of private respondents
parents, is immaterial. As held in Heirs of Jose Amunategui vs. Director of
Forestry,[17] the classification of forest land, or any land for that matter, is
descriptive of its legal nature or status, and does not have to be descriptive of what
the land actually looks like.
Recourse to the principle of estoppel must likewise fail. Petitioner invokes
this principle in light of the contract of mortgage between him and the parents of
private respondent. While it is true that the mortgagees, having entered into a
contract with petitioner as mortgagor, are estopped from questioning the latters
ownership of the mortgaged property and his concomitant capacity to alienate or
encumber the same,[18] it must be considered that, in the first place, petitioner did
not possess such capacity to encumber the land at the time for the stark reason that

(6)

PHILIPPINE
ECONOMIC
ZONE
AUTHORITY
(PEZA), petitioner, vs. HON. RUMOLDO R. FERNANDEZ, Regional
Trial Court of Lapu-Lapu City (Branch 54); and the Heirs of the
Deceased
Spouses
JUAN
CUIZON
and
FLORENTINA
RAPAYA, respondents.

[G.R. No. 138971. June 6, 2001]

PANGANIBAN, J.:
An action for reconveyance of land, an equitable remedy recognized under
our land registration laws, is subject to the applicable rules on
prescription. Moreover, the right to pursue such reivindicatory action may be
defeated when the property sought to be recovered has been conveyed to an
innocent purchaser for value.

The Case
Before this Court is a Petition for Review on Certiorari under Rule 45 of the
Rules of Court, seeking to set aside the June 8, 1999 Decision[1] of the Court of
Appeals (CA) in CA-GR SP No. 47575. In the said Decision, the CA sustained the
January 12, 1998[2] and the March 31, 1998[3] Orders of the Regional Trial Court of
Lapu-Lapu City (Branch 54) in Civil Case No. 4534-L, which denied petitioners
Motion to Dismiss and Motion for Reconsideration, respectively. The dispositive
portion of the CA Decision reads as follows:
WHEREFORE, [there being] no abuse of discretion committed by respondent
court, the instant petition is hereby DISMISSED.

The Facts
The subject of the present controversy is Lot No. 4673 of the Opon Cadastre
situated in Lapu-Lapu City, covered by Original Certificate of Title (OCT) No.
RO-2537 (May 19, 1982) and registered in the names of Florentina Rapaya,
Victorino Cuizon, Isidro Cuizon, Ursula Cuizon, Benito Lozano, Isabel Lozano,
Pelagia Lozano, Augusto Lozano, Valeriano Ybaez, Jesus Ybaez, Numeriano
Ybaez, Martino Ybaez, Eutiquio Patalinghug, Celedonio Patalinghug, Santiago
Patalinghug and Silvino Patalinghug. The lot has an area of 11,345 square meters,
more or less.
On May 15, 1982, Jorgea Igot-Soroo, Frisca Booc and Felix Cuizon
executed an Extrajudicial Partition, in which they declared themselves as the only
surviving heirs of the registered owners of the aforesaid lot. Consequently, they
were issued TCT No. 12467 on July 8, 1982.
Considering that the said lot was among the objects of expropriation
proceedings docketed as Civil Case No 510-L and pending before it, Branch XVI
of the Regional Trial Court (RTC) of Lapu-Lapu City rendered a partial Decision
on August 11, 1982. In that Decision, the RTC approved the Compromise
Agreement entered into between the Export Processing Zone Authority (EPZA)
and the new registered owners of Lot No. 4673; namely, Jorgea Igot-Soroo, Frisca
Booc and Felix Cuizon. In accordance with the approved Compromise Agreement,
EPZA would pay P68,070 as just compensation for the expropriation of the subject
property, which was to be used for an export processing zone to be established in
Lapu-Lapu City.
As a consequence of the RTC Decision, petitioner acquired title over Lot No.
4673 and the corresponding Transfer Certificate of Title (TCT) No. 12788 issued
by the Register of Deeds of Lapu-Lapu City on October 13, 1982.
On July 29, 1996, private respondents filed with the RTC of Lapu-Lapu City
a Complaint for Nullity of Documents, Redemption and Damages against
petitioner and Jorgea-Igot Soroo et al. Docketed as Civil Case No. 4534-L, the
Complaint alleged that herein private respondents had been excluded from the
extrajudicial settlement of the estate. It likewise sought the nullification of several
documents, including TCT No. 12788 dated October 13, 1992, issued in the name
of herein petitioner.
On February 17, 1997, petitioner filed a Motion to Dismiss the Complaint on
the ground of prescription. This Motion was denied by respondent judge in the
Order dated January 12, 1998. A Motion for Reconsideration thereof was likewise
denied in the Order dated March 31, 1998.
On April 30, 1998, petitioner elevated the matter to the Court of Appeals
through a Petition for Certiorari. As earlier noted, the CA dismissed the Petition.
Hence, this recourse.[4]

The CA Ruling
In denying the Petition, the CA ratiocinated as follows:
Civil Case No. 4534-L although instituted in the guise of a complaint for Nullity
of Documents, Redemption and Damages is in effect an action for reconveyance of
the property to plaintiffs of a portion which rightfully belong to them. It would be
against good reason and conscience not to hold that defendants, Francisca Frisca
Booc, heirs of deceased Jorg[e]a Igot-Soronio and heirs of Felix Cuizon committed
a breach of trust which enabled them to execute a Deed of Extrajudicial Partition[,]
Special Power of Attorney and Deed of Absolute Sale in favor of EPZA to the
prejudice of the plaintiffs as their co-heirs. Therefore, in an action like this case,
the private respondents may be ordered to make reconveyance of the property to
the person rightfully entitled to it.
It is undeniable that defendants defrauded plaintiffs by falsely representing that
they were the only heirs of deceased Juan Cuizon and Florentina Rapaya,
succeeded in having the original title cancelled and enabling them to appropriate
the land in favor of EPZA and a new one issued in the name of the latter
(EPZA). This way of acquiring title create[s] what is called constructive trust in
favor of the defrauded party and grants the latter the right to vindicate [itself] x x x
regardless of the lapse of time. Thus, it has been held that if a person obtain(s) a
legal title to the property by fraud or concealment, courts of equity will impress
upon the title a so called trust in favor of the defrauded party. In fact, it has long
been held that a co-heir who through fraud, succeeds in obtaining a certificate of
title in his name to the prejudice of his co-heirs, is deemed to hold the land in trust
for the latter. The excluded heirs action is imprescriptible.
And if the action involve(s) the declaration of the nullity or inexistence of a void
or inexistent contract which became the basis for the fraudulent registration of the
subject property, then the action is imprescriptible. This finds codal support in
Article 1410 of the Civil Code, which declares that the action or defense for the
declaration of the inexistence of a void contract does not prescribe.
As to the constructive notice rule alleged by the petitioner, (the) Supreme Court in
the case of Juan vs. Zuniga, citing Sevilla vs. Angeles, has this to say:
'While this ruling is correct as applied to ordinary actions by recovery of
real property which is covered by a torrens title upon the theory that its
registration under our registration system has the effect of constructive
notice to the whole world, the same cannot be applied x x x when the
purpose of the action is to compel a trustee to convey the property
registered in his name for the benefit of the cestui que trust. In other
words, the defense of prescription cannot be set up in an action whose

purpose is to recover property held by a person for the benefit of

another.

The Issues
Petitioner interposes the following issues for the consideration of this Court:
I
Whether or not the appellate court erred in not holding that private respondents
claim against expropriated property had prescribed.
II
Whether or not the appellate court erred in not holding that reconveyance does not
lie against the expropriated property.[5]

The Courts Ruling

The Petition is meritorious.

First Issue: Prescription

Petitioner avers that private respondents claim against the subject property
has already prescribed, because the two-year period within which an unduly
excluded heir may seek a new settlement of the estate had already lapsed by the
time private respondents filed their action with the trial court. Petitioner further
argues that private respondents received constructive notice in view of the
registration of the extrajudicial partition with the Registry of Deeds. According to
petitioner, the two-year period commenced from July 8, 1982, the date of
inscription of the extrajudicial settlement on OCT No. 2537.
The pertinent provisions of Section 4, Rule 74 of the Rules of Court, are
reproduced for easy reference, as follows:
Section 4. Liability of distributees and estate. - If it shall appear at any time
within two (2) years after the settlement and distribution of an estate in
accordance with the provisions of either of the first two sections of this rule, that
an heir or other person has been unduly deprived of his lawful participation in

the estate, such heir or such other person may compel the settlement of the estate
in the courts in the manner hereinafter provided for the purpose of satisfying
such lawful participation. And if within the same time of two (2) years, it shall
appear that there are debts outstanding against the estate which have not been paid,
or that an heir or other person has been unduly deprived of his lawful participation
payable in money, the court having jurisdiction of the estate may, by order for that
purpose, after hearing, settle the amount of such debts or lawful participation and
order how much and in what manner each distributee shall contribute in the
payment thereof, and may issue execution, if circumstances require, against the
bond provided in the preceding section or against the real estate belonging to the
deceased, or both. Such bond and such real estate shall remain charged with a
liability to creditors, heirs, or other persons for the full period of two (2) years after
such distribution, notwithstanding any transfers of real estate that may have been
made. (Emphasis supplied)
A perusal of the foregoing provision will show that persons unduly deprived
of their lawful participation in a settlement may assert their claim only within the
two-year period after the settlement and distribution of the estate. This prescription
period does not apply, however, to those who had no part in or had no notice of the
settlement. Section 4, Rule 74 of the Rules of Court, is not meant to be a statute of
limitations. Moreover, by no reason or logic can one contend that an extrajudicial
partition, being merely an ex parte proceeding, would affect third persons who had
no knowledge thereof.[6] Be that as it may, it cannot be denied, either, that by its
registration in the manner provided by law, a transaction may be known actually
or constructively.
In the present case, private respondents are deemed to have been
constructively notified of the extrajudicial settlement by reason of its registration
and annotation in the certificate of title over the subject lot. From the time of
registration, private respondents had two (2) years or until July 8, 1984, within
which to file their objections or to demand the appropriate settlement of the estate.
On the matter of constructive notice vis--vis prescription of an action to
contest an extrajudicial partition, a leading authority on land registration elucidates
as follows:
While it may be true that an extrajudicial partition is an ex parte proceeding, yet
after its registration under the Torrens system and the annotation on the new
certificate of title of the contingent liability of the estate for a period of two years
as prescribed in Rule 74, Section 4, of the Rules of Court, by operation of law a
constructive notice is deemed made to all the world, so that upon the expiration
of said period all third persons should be barred [from going] after the particular
property, except where title thereto still remains in the names of the alleged heirs
who executed the partition tainted with fraud, or their transferees who may not
qualify as innocent purchasers for value. If the liability of the registered property
should extend indefinitely beyond that period, then such constructive notice which

binds the whole world by virtue of registration would be meaningless and

illusory. x x x.[7] (Emphasis supplied)
The only exception to the above-mentioned prescription is when the title
remains in the hands of the heirs who have fraudulently caused the partition of the
subject property or in those of their transferees who cannot be considered innocent
purchasers for value.
In this regard, title to the property in the present case was no longer in the
name of the allegedly fraudulent heirs, but already in that of an innocent purchaser
for value the government. Moreover, the government is presumed to have acted
in good faith in the acquisition of the lot, considering that title thereto was obtained
through a Compromise Agreement judicially approved in proper expropriation
proceedings.
Even assuming that there was in fact fraud on the part of the other heirs,
private respondents may proceed only against the defrauding heirs, not against
petitioner which had no participation in or knowledge of the alleged fraud. The
fact that the co-heirs title to the property was fraudulently secured cannot
prejudice the rights of petitioner which, absent any showing that it had knowledge
or participation in the irregularity, is considered a purchaser in good faith and for
value.[8]
The remedy of an owner alleged to have been prejudiced or fraudulently
deprived of property that was subsequently sold to an innocent purchaser for value
is an action for damages against the person or persons who perpetrated the fraud. [9]

Second Issue: Limitations on Reconveyance

The law recognizes the right of a person, who, by adjudication or
confirmation of title obtained by actual fraud, is deprived of an estate or an interest
therein.[10] Although a review of the decree of registration is no longer possible
after the one-year period from its entry expires, still available is an equitable
remedy to compel the reconveyance of property to those who may have been
wrongfully deprived of it.[11] This equitable remedy afforded by law is not without
limitations, however.
An action for reconveyance resulting from fraud prescribes four years from
the discovery of the fraud; such discovery is deemed to have taken place upon the
issuance of the certificate of title over the property. Registration of real property is
considered a constructive notice to all persons and, thus, the four-year period shall
be counted therefrom.[12] Clearly then, private respondents action for
reconveyance based on fraud has already prescribed, considering that title to said
property had been issued way back on August 11, 1982, while the reivindicatory
suit was instituted only on July 29, 1996.

Even an action for reconveyance based on an implied or a constructive trust

would have already prescribed just the same, because such action prescribes ten
(10) years from the alleged fraudulent registration or date of issuance of the
certificate of title over the property.[13] The imprescriptibility of an action for
reconveyance based on implied or constructive trust applies only when the plaintiff
or the person enforcing the trust is in possession of the property. In effect, the
action for reconveyance is an action to quiet the property title, which does not
prescribe.[14] Undisputedly, private respondents are not in possession of the
disputed property. In fact, they do not even claim to be in possession of it, even if
to do so would enable them to justify the imprescriptibility of their action.
Accordingly, the CA Decisions reliance on Juan v. Zuiga,[15] as regards the
imprescriptibility of an action for reconveyance based on implied or constructive
trust, is utterly misplaced in the light of the foregoing rulings of the Court declaring
a ten-year period of prescription for such action. Moreover, the principle
enunciated therein has no application to the instant case, considering that the
supposed trustee herein has effectively repudiated the so-called trust by
directly performing an act of ownership; that is, by conveying the property to the
government through expropriation. An action to compel, for the benefit of
the cestui que trust, the conveyance of property registered in the trustees name
does not prescribe unless the trustee repudiates the trust.[16]Thus, private
respondents cannot invoke the imprescriptibility of their action for reconveyance,
irrespective of their basis for it.
Finally, it must be remembered that reconveyance is a remedy of those whose
property has been wrongfully or erroneously registered in the name of
another. Such recourse, however, cannot be availed of once the property has
passed to an innocent purchaser for value. For an action for reconveyance to
prosper, the property should not have passed into the hands of an innocent
purchaser for value.[17]
Indubitably, we find that the property has already been conveyed to the
government in appropriate expropriation proceedings, the regularity or validity of
which has not been questioned. Petitioner should, therefore, enjoy the security
afforded to innocent third persons under our registration laws. Equally important,
its title to the property must be rightfully preserved.
Hence, private respondents action to recover the subject property from the
government cannot be maintained, not only because of the prescription of the
action, but on account of the protection given to innocent purchasers for value
granted under our land registration laws. Indeed, the inevitable consequences of
the Torrens system of land registration must be upheld in order to give stability to
it and provide finality to land disputes.
This ruling notwithstanding, private respondents are not without
recourse. They may sue for damages their co-heirs who have allegedly perpetrated
fraud in Civil Case No. 4534-L pending before the RTC. The right and the extent

of damages to be awarded to private respondents shall be determined by the trial

court, subject to the evidence duly established during the proceedings.
WHEREFORE, the Petition is hereby GRANTED and the assailed Decision
of the Court of Appeals REVERSED. The Orders of the Regional Trial Court of
Lapu-Lapu City (Branch 54) in Civil Case No. 4534-L, dated January 12, 1998 and
March 31, 1998, are SET ASIDE and the said Civil Case, as against petitioner,
is DISMISSED. No costs.
SO ORDERED.

Na ang nasabing halaga ay may nakasanlang titulo ng lupa (TCT No. 25659) under
Registry receipt 3420 dated July 15, 1996.
Na ako si Teresita V. Idolor ay humihingi ng 90 days palugit (grace period) to
settle the said amount.
Failure to settle the above account on or before December 21, 1996, I agree to
execute a deed of sale with the agreement to repurchase without interest within one
year.
Total amount of P1,233,288.23 inclusive of interest earned.

(7) TERESITA V. IDOLOR, petitioner, vs. HON. COURT OF APPEALS,

SPS. GUMERSINDO DE GUZMAN and ILUMINADA DE
GUZMAN and HON. PRUDENCIO CASTILLO, JR., Presiding
Judge, Regional Trial Court, National Capital Judicial Region,
Branch 220, Quezon City, respondents.
[G.R. No. 141853. February 7, 2001]
GONZAGA-REYES, J.:
This is a petition for review on certiorari filed by petitioner Teresita Idolor
which seeks to set aside the decision[1] of the respondent Court of Appeals which
reversed the Order[2]of the Regional Trial Court of Quezon City[3]granting Idolors
prayer for the issuance of a writ of preliminary injunction and the resolution
denying petitioners motion for reconsideration.[4]
On March 21, 1994, to secure a loan of P520,000.00, petitioner Teresita
Idolor executed in favor of private respondent Gumersindo De Guzman a Deed of
Real Estate Mortgage with right of extra-judicial foreclosure upon failure to
redeem the mortgage on or before September 20, 1994. The object of said
mortgage is a 200-square meter property with improvements located at 66 Ilocos
Sur Street, Barangay Ramon Magsaysay, Quezon City covered by TCT No. 25659.
On September 21, 1996, private respondent Iluminada de Guzman, wife of
Gumersindo de Guzman, filed a complaint against petitioner Idolor before the
Office of the Barangay Captain of Barangay Ramon Magsaysay, Quezon City,
which resulted in a Kasunduang Pag-aayos which agreement is quoted in full[5]:
Kami, ang (mga) may sumbong at (mga) ipinagsusumbong sa usaping binabanggit
sa itaas, ay nagkakasundo sa pamamagitan nito na ayusin ang aming alitan gaya ng
sumusunod:
Na ako si Teresita V. Idolor of legal age ay nakahiram ng halagang P520,000.00
noong September 20, 1994.

At nangangako kami na tutupad na tunay at matapat sa mga katakdaan ng pagaayos na inilahad sa itaas.
Petitioner failed to comply with her undertaking; thus private respondent
Gumersindo filed a motion for execution before the Office of the Barangay captain
who subsequently issued a certification to file action.
On March 21, 1997, respondent Gumersindo De Guzman filed an extra
judicial foreclosure of the real estate mortgage pursuant to the parties agreement
set forth in the real estate mortgage dated March 21, 1994.
On May 23, 1997, the mortgaged property was sold in a public auction to
respondent Gumersindo, as the highest bidder and consequently, the Sheriffs
Certificate of Sale was registered with the Registry of Deeds of Quezon City on
June 23, 1997.
On June 25, 1998, petitioner filed with the Regional Trial Court of Quezon
City, Branch 220, a complaint for annulment of Sheriffs Certificate of Sale with
prayer for the issuance of a temporary restraining order (TRO) and a writ of
preliminary injunction against private respondents, Deputy Sheriffs Marino
Cachero and Rodolfo Lescano and the Registry of Deeds of Quezon City alleging
among others alleged irregularity and lack of notice in the extra-judicial
foreclosure proceedings subject of the real estate mortgage. In the meantime, a
temporary restraining order was issued by the trial court.
On July 28, 1998, the trial court issued a writ of preliminary injunction
enjoining private respondents, the Deputy Sheriffs and the Registry of Deeds of
Quezon City from causing the issuance of a final deed of sale and consolidation of
ownership of the subject property in favor of the De Guzman spouses. The trial
court denied the motion for reconsideration filed by the de Guzman spouses.
Spouses de Guzman filed with the respondent Court of Appeals a petition for
certiorari seeking annulment of the trial courts order dated July 28, 1998 which
granted the issuance of a preliminary injunction.

On September 28, 1999, the respondent court granted the petition and
annulled the assailed writ of preliminary injunction. Teresita Idolor filed her
motion for reconsideration which was denied in a resolution dated February 4,
2000.
Hence this petition for review on certiorari filed by petitioner Teresita V.
Idolor. The issues raised by petitioner are: whether or not the respondent Court of
Appeals erred in ruling (I) that petitioner has no more proprietary right to the
issuance of the writ of injunction, (2) that the Kasunduang Pag-aayos did
not ipso facto result in novation of the real estate mortgage, (3) that the
Kasunduang Pag-aayos is merely a promissory note of petitioner to private
respondent spouses; and (4) that the questioned writ of preliminary injunction was
issued with grave abuse of discretion.
The core issue in this petition is whether or not the respondent Court erred in
finding that the trial court committed grave abuse of discretion in enjoining the
private and public respondents from causing the issuance of a final deed of sale and
consolidation of ownership of the subject parcel of land in favor of private
respondents.
Petitioner claims that her proprietary right over the subject parcel of land was
not yet lost since her right to redeem the subject land for a period of one year had
neither lapsed nor run as the sheriffs certificate of sale was null and void; that
petitioner and the general public have not been validly notified of the auction sale
conducted by respondent sheriffs; that the newspaper utilized in the publication of
the notice of sale was not a newspaper of general circulation.
We do not agree.
Injunction is a preservative remedy aimed at protecting substantive rights and
interests.[6] Before an injunction can be issued, it is essential that the following
requisites be present: 1) there must be a right in esse or the existence of a right to
be protected; 2) the act against which the injunction is to be directed is a violation
of such right.[7] Hence the existence of a right violated, is a prerequisite to the
granting of an injunction. Injunction is not designed to protect contingent or future
rights. Failure to establish either the existence of a clear and positive right which
should be judicially protected through the writ of injunction or that the defendant
has committed or has attempted to commit any act which has endangered or tends
to endanger the existence of said right, is a sufficient ground for denying the
injunction.[8] The controlling reason for the existence of the judicial power to issue
the writ is that the court may thereby prevent a threatened or continuous
irremediable injury to some of the parties before their claims can be thoroughly
investigated and advisedly adjudicated.[9] It is to be resorted to only when there is a
pressing necessity to avoid injurious consequences which cannot be remedied
under any standard of compensation.[10]
In the instant case, we agree with the respondent Court that petitioner has no
more proprietary right to speak of over the foreclosed property to entitle her to the
issuance of a writ of injunction. It appears that the mortgaged property was sold in

a public auction to private respondent Gumersindo on May 23, 1997 and the
sheriffs certificate of sale was registered with the Registry of Deeds of Quezon
City on June 23, 1997. Petitioner had one year from the registration of the sheriffs
sale to redeem the property but she failed to exercise her right on or before June 23,
1998, thus spouses de Guzman are now entitled to a conveyance and possession of
the foreclosed property. When petitioner filed her complaint for annulment of
sheriffs sale against private respondents with prayer for the issuance of a writ of
preliminary injunction on June 25, 1998, she failed to show sufficient interest or
title in the property sought to be protected as her right of redemption had already
expired on June 23, 1998, i.e. two (2) days before the filing of the complaint. It is
always a ground for denying injunction that the party seeking it has insufficient
title or interest to sustain it, and no claim to the ultimate relief sought - in other
words, that she shows no equity.[11] The possibility of irreparable damage without
proof of actual existing right is not a ground for an injunction.[12]
Petitioners allegation regarding the invalidity of the sheriffs sale dwells on
the merits of the case; We cannot rule on the same considering that the matter
should be resolved during the trial on the merits.
Petitioner next contends that the execution of the Kasunduang Pag-aayos
dated September 21, 1996 between her and spouses de Guzman before the Office
of the Lupon Tagapamayapa showed the express and unequivocal intention of the
parties to novate or modify the real estate mortgage; that a comparison of the real
estate mortgage dated March 21, 1994 and the Kasunduang Pag-aayos dated
September 21, 1996 revealed the irreconciliable incompatibility between them, i.e.,
that under the first agreement, the amount due was five hundred twenty thousand
(P520,000) pesos only payable by petitioner within six (6) months, after which it
shall earn interest at the legal rate per annum and non-payment of which within the
stipulated period, private respondents have the right to extra-judicially foreclose
the real estate mortgage while under the second agreement, the amount due was
one million two hundred thirty three thousand two hundred eighty eight and 23/100
(P1,233,288.23) inclusive of interest, payable within 90 days and in case of non
payment of the same on or before December 21, 1996, petitioner should execute a
deed of sale with right to repurchase within one year without interest; that the
second agreement Kasunduang Pag-aayos was a valid new contract as it was
duly executed by the parties and it changed the principal conditions of petitioners
original obligations. Petitioner insists that the Kasunduang Pag-aayos was not a
mere promissory note contrary to respondent courts conclusion since it was
entered by the parties before the Lupon Tagapamayapa which has the effect of a
final judgment.[13]
We are not persuaded.
Novation is the extinguishment of an obligation by the substitution or change
of the obligation by a subsequent one which terminates it, either by changing its
objects or principal conditions, or by substituting a new debtor in place of the old
one, or by subrogating a third person to the rights of the creditor. [14] Under the law,
novation is never presumed. The parties to a contract must expressly agree that

they are abrogating their old contract in favor of a new one. [15] Accordingly, it was
held that no novation of a contract had occurred when the new agreement entered
into between the parties was intended to give life to the old one. [16]
A review of the Kasunduang Pag-aayos which is quoted earlier does not
support petitioners contention that it novated the real estate mortgage since the
will to novate did not appear by express agreement of the parties nor the old and
the new contracts were incompatible in all points. In fact, petitioner expressly
recognized in the Kasunduan the existence and the validity of the old obligation
where she acknowledged her long overdue account since September 20, 1994
which was secured by a real estate mortgage and asked for a ninety (90) days grace
period to settle her obligation on or before December 21, 1996 and that upon
failure to do so, she will execute a deed of sale with a right to repurchase without
interest within one year in favor of private respondents. Where the parties to the
new obligation expressly recognize the continuing existence and validity of the old
one, where, in other words, the parties expressly negated the lapsing of the old
obligation, there can be no novation.[17] We find no cogent reason to disagree with
the respondent courts pronouncement as follows:
In the present case, there exists no such express abrogation of the original
undertaking. The agreement adverted to (Annex 2 of Comment, p.75 Rollo)
executed by the parties on September 21, 1996 merely gave life to the March 21,
1994 mortgage contract which was then more than two years overdue. Respondent
acknowledged therein her total indebtedness in the sum of P1,233,288.23 including
the interests due on the unpaid mortgage loan which amount she promised to
liquidate within ninety (90) days or until December 21, 1996, failing which she
also agreed to execute in favor of the mortgagee a deed of sale of the mortgaged
property for the same amount without interest. Evidently, it was executed to
facilitate easy compliance by respondent mortgagor with her mortgage
obligation. It (the September 21, 1996 agreement) is not incompatible and can
stand together with the mortgage contract of March 21, 1994.
A compromise agreement clarifying the total sum owned by a buyer with the view
that he would find it easier to comply with his obligations under the Contract to
Sell does not novate said Contract to Sell (Rillo v. Court of Appeals, 274 SCRA
461 [1997]).
Respondent correctly argues that the compromise agreement has the force and
effect of a final judgment. That precisely is the reason why petitioner resorted to
the foreclosure of the mortgage on March 27, 1997, after her failure to comply with
her obligation which expired on December 21, 1996.
Reliance by private respondent upon Section 417 of the New Local Government
Code of 1991, which requires the lapse of six (6) months before the amicable
settlement may be enforced, is misplaced. The instant case deals with extra
judicial foreclosure governed by ACT No. 3135 as amended.

Notably, the provision in the Kasunduang Pag-aayos regarding the

execution of a deed of sale with right to repurchase within one year would have the
same effect as the extra-judicial foreclosure of the real estate mortgage wherein
petitioner was given one year from the registration of the sheriffs sale in the
Registry of property to redeem the property, i.e., failure to exercise the right of
redemption would entitle the purchaser to possession of the property. It is not
proper to consider an obligation novated by unimportant modifications which do
not alter its essence.[18] It bears stress that the period to pay the total amount of
petitioners indebtedness inclusive of interest amounted to P1,233,288.23 expired
on December 21, 1996 and petitioner failed to execute a deed of sale with right to
repurchase on the said date up to the time private respondents filed their petition
for extra-judicial foreclosure of real estate mortgage. The failure of petitioner to
comply with her undertaking in the kasunduan to settle her obligation effectively
delayed private respondents right to extra-judicially foreclose the real estate
mortgage which right accrued as far back as 1994. Thus, petitioner has not shown
that she is entitled to the equitable relief of injunction.
WHEREFORE, the petition is DENIED. The decision of the respondent
Court of Appeals dated September 28, 1999 is hereby AFFIRMED.
SO ORDERED.

(8) CAGAYAN DE ORO CITY LANDLESS RESIDENTS ASSOCIATION

INC. (COCLAI), Macabalan, Cagayan de Oro City, petitioner,
vs. COURT OF APPEALS and the NATIONAL HOUSING
AUTHORITY (NHA), respondents.
[G.R. No. 106043. March 4, 1996]
HERMOSISIMA, JR., J.:
This is a petition to set aside the decision of the Court of Appeals,
dated February 28, 1991, in C.A. G.R. SP No. 23080, which reversed the decision
of the Regional Trial Court of Cagayan de Oro City, Branch 25, datedNovember
17, 1988.
The antecedent facts as found by the Court of Appeals are as follows:
The land subject of the dispute is Lot No. 1982 of Cad. 237 consisting of
about 12.82 hectares located at Cagayan de Oro City. Said parcel of land was
formerly a timberland identified as Block No. F, L.C. Project No. 8 of the Bureau
of Forestry. On September 4, 1956, the Bureau of Forestry released the said land as
alienable and disposable public land.
Subsequently, on January 29, 1964, the Bureau of Lands issued Survey
Authority No. 16-64 granting authority to the COCLAI to survey the land in
question for purposes of subdivision into residential lots. By virtue of said

authority, the COCLAI engaged the services of a geodetic engineer to prepare the
subdivision survey which was submitted to the Bureau of Lands. On March 31,
1964, the Bureau of Lands, after conducting an ocular survey, required the
COCLAI, in behalf of its members, to file a miscellaneous Sales Application over
the land in question which the latter did on August 13, 1970. The said sales
application was however held in abeyance by the Bureau of Lands pending the
final outcome of the civil case filed by the Republic of the Philippines and the City
of Cagayan de Oro against Benedicta Macabebe Salcedo, et al. for the annulment
of Original Certificate of Title No. 0-257 covering the land in question then
pending before the Supreme Court docketed as G.R. No. L-41115. In said case, the
COCLAI was a party-intervenor.
Meanwhile, on August 22, 1979, the NHA filed an expropriation proceeding
before the former Court of First Instance of Misamis Oriental at Cagayan de Oro
City docketed as Civil Case No. 6806 to acquire Cadastral Lot No. 1982, including
the land involved in this case, located at Macabalan, Cagayan de Oro City with an
area of 224,554 square meters which was then covered by OCT No. 0-257. In said
case, the COCLAI intervened claiming that instead of being paid the amount of
P300,000.00, they prefer to acquire residential lots in any housing area of NHA.
Upon learning of the pending suit before the Supreme Court (G.R. No. L-41115)
involving the annulment of the title over the same land, the NHA sought the
suspension of the expropriation proceedings.
On September 11, 1982, the Supreme Court finally resolved G.R. No. L41115 annulling OCT No. 0-257 and declaring the land covered thereby as public
land.
On October 8, 1982, the Solicitor General furnished the Bureau of
Lands, Manila, with a copy of the Supreme Court decision prompting the Director
of the Bureau of Lands to order the District Land Officer in Cagayan de Oro City
to take appropriate action for inventory of each and every portion of Cadastral Lot
No. 1982. In response thereto, the Regional Land Director of Region 10 informed
the Director of Lands that the members of COCLAI were occupying portions of the
said lot by virtue of the Survey Authority issued on March 19, 1964 and the
COCLAIs subdivision survey had already been submitted to the Central Office for
verification and approval but was held in abeyance.
On May 10, 1983, the President of the Philippines issued Proclamation No.
2292 reserving the entire area of Cadastral Lot No. 1982 for the Slum
Improvement and Resettlement (SIR) Project to be implemented by the
NHA. Under the said proclamation, the NHA was granted the authority to
develop, administer and dispose of Lot No. 1982 located at Macabalan, Cagayan de
Oro City, in accordance with the guidelines of the Slum Improvement and
Resettlement Program and the approved development plan of the area.
On May 19, 1983, the Bureau of Lands, through its Regional Director, issued
an order rejecting the subdivision survey previously submitted by the COCLAI.

Sometime in November, 1986, the NHA, through its agents, Virgilio Dacalos
and Engr. Vicente Generalao, the area manager and project engineer, respectively
with the help of the policemen and claiming authority under P.D. 1472, demolished
the structures erected by the COCLAI members. This action prompted the
COCLAI to file a forcible entry and damages case against the NHA employees and
police officers with the Municipal Trial Court in Cities, Branch 3, Cagayan de Oro
City docketed as Civil Case No. 11204.
After due hearing, the MTCC on November 17, 1988 rendered judgment
ordering the defendants in Civil Case No. 11204 to restore the COCLAI members
to their respective actual possession of the portions of Lot No. 1982 but the court
dismissed plaintiffs claim for damages. On appeal, the Regional Trial Court in
Cagayan de Oro City affirmed the decision of the lower court. Thereafter, the
prevailing party, the COCLAI members, moved for the issuance of a writ of
execution before the MTCC on July 23,1990.
While Civil Case No. 11204 was pending before the courts, the President of
the Philippines issued on July 1, 1988 Special Patent No. 3551 covering the entire
area of Cadastral Lot No. 1982, and by virtue thereof, the Register of Deeds of
Cagayan de Oro City issued on January 3, 1990 an Original Certificate of Title No.
P-3324 in the name of NHA.
Thus, on July 24, 1990, a day after the COCLAI moved for the execution of
the judgment in Civil Case No. 11204, the NHA filed a complaint for Quieting of
Title with Application for a Writ of Preliminary Injunction against the COCLAI
and its president, Pablo Solomon, as well as the City Sheriff, which was docketed
as Civil Case No. 90-337. Said case was assigned to Branch 25 of the Regional
Trial Court in Cagayan de Oro City, presided over by Hon. Noli T. Catli. In its
complaint, plaintiff NHA alleged:
4) That defendant landless association laid claim of a portion of Lot No. 1982
aforestated alleging that they are entitled to possession thereof and, in fact, filed a
complaint for Forcible Entry against certain Virgilio Decalos, Vicente Generalao,
and four (4) others, plaintiff herein not being made a party thereto, which case is
docketed as Civil Case No. 11204 assigned to Branch 3 of the Municipal Trial
Court of Cagayan de Oro City;
5)
That on November 18, 1988 defendant landless association obtained a
favorable decision from MTCC Branch 3;
6)
That pursuant to the ruling of the Supreme Court in City of Bacolod et
al. vs. Hon. Enriquez et al., G.R. No L-9773, May 29, 1957 the said decision could
not be enforced against plaintiff herein as it was not a party to the said case;
7)
That the claim of defendant landless association for possession of a portion
of said Lot No. 1982, subject-matter hereof, is predicated or anchored upon the fact
that said lot was declared a public land;

8) That on January 3, 1990, however, plaintiff National Housing Authority

became the absolute owner of said Lot No. 1982, now the site of the Slum
Improvement and Resettlement Project, by virtue of Special Patent No. 3551 issued
by Her Excellency, the President of the Philippines, for which Original Certificate
of Title No. P-3324 was issued in its name; x x x
9) That the claim of defendant landless association has created a cloud on
plaintiffs title to Lot No. 1982 aforementioned, which claim is apparently valid or
effective but is in truth and in fact invalid, ineffective and unenforceable and
prejudicial to plaintiffs title, the land, subject-matter hereof, having ceased to be a
public land;
10) That defendants Solomon, et al. threatened or are about to enforce the
decision in said Civil Case No. 11204 in violation of plaintiffs rights respecting
the subject of the action, and tending to render the judgment herein ineffectual,
unless restrained or enjoined by this Honorable Court;
11) That the plaintiff is entitled to the relief demanded, and the whole or part of
such relief consists in restraining the commission of the act herein complained of;
12) That the commission of the act herein complained of during the litigation
would probably work injustice to the plaintiff;
13) That the plaintiff is willing and ready to file a bond executed to the
defendants in an amount to be fixed by this Honorable Court, to the effect that the
plaintiff will pay to said defendants all damages which they may sustain by reason
of the injunction if the Court should finally decide that the plaintiff was not entitled
thereto.
Acting on the plaintiffs prayer for the issuance of a restraining order and/or
preliminary injunction, the Regional Trial Court issued an Order on July 24,
1990 stating thus:
x x x let a RESTRAINING ORDER be issued to Defendants Pablo Salomon and
Cagayan de Oro Landless Association, Inc. and the City Sheriff or Deputy Sheriff
of MTCC, Branch 3, or anybody acting in their behalf or acting as their agent or
representative. And until further orders from this court, they are enjoined to refrain
or desist from enforcing the decision of Civil Case No. 11204 until this court
resolves this complaint.
Subsequently, the defendants moved to dismiss the complaint stating, among
others, as a ground therefor that the cause of action is barred by a prior judgment in
another case. (Apparently, the NHA has filed an action for Injunction with
Damages against COCLAI and its President before the Regional Trial Court,
Branch 17, Cagayan de Oro City docketed as Civil Case No. 89-399 to prevent the

MTCC from executing its decision in Civil Case No. 11204, but this was dismissed
by the Regional Trial Court in its Order dated July 19, 1990 on the ground that the
decision of the MTCC in Civil Case No. 11204, had been upheld by the Supreme
Court when it denied NHAs petition for certiorari. The RTC, Branch 17, further
stated that x x x (I)f plaintiff believes that it is the owner of the property subject of
that civil case (No. 11204), then it should ventilate its claim in some other case but
not in a simple case of injunction.)
On August 10, 1990, the Regional Trial Court in Civil Case No. 90-337 issued an
Order denying the motion to dismiss as well as plaintiff NHAs prayer for the
issuance of a preliminary injunction to restrain the enforcement of the decision in
Civil Case No. 11204. The motion for reconsideration filed by plaintiff NHA was
likewise denied by the Regional Trial Court in its Order dated August 17, 1990.[1]
Aggrieved by the decision of the Regional Trial Court, the NHA appealed to the
Court of Appeals which reversed the decision of the lower court. The decretal
portion of the said decision, reads:
WHEREFORE, the instant petition for certiorari is GRANTED the questioned
Orders of respondent judge are hereby declared null and void and respondent judge
is ordered to issue a writ of preliminary injunction to respect the possession of the
petitioner over the land subject of the dispute x x x[2]
Hence, this petition.
The issues raised by petitioner are: whether or not the Court of Appeals erred
in ruling (a) that the National Housing Authority (NHA) is entitled to the
injunction prayed for; and (b) that NHA has a better right to the possession of Lot
No. 1982, as a necessary consequence of ownership.
As an extraordinary remedy, injunction is calculated to preserve or maintain
the status quo of things and is generally availed of to prevent actual or threatened
acts, until the merits of the case can be heard.[3] As such, injunction is accepted as
the strong arm of equity or a transcendent remedy to be used cautiously, as it
affects the respective rights of the parties, and only upon full conviction on the part
of the court of its extreme necessity.[4] Its issuance rests entirely within the
discretion of the court taking cognizance of the case and is generally not interfered
with except in cases of manifest abuse.[5] Moreover, it may only be resorted to by a
litigant for the preservation or protection of his rights or interests and for no other
purpose during the pendency of the principal action.[6]
Before an injunction can be issued, it is essential that the following requisites
be present: 1) there must be a right in esse or the existence of a right to be
protected; and 2) the act against which the injunction is to be directed is a violation
of such right.[7] Hence, it should only be granted if the party asking for it is clearly
entitled thereto.[8]

In the case at bench, the Court of Appeals was justified in ruling that NHA
was entitled to the writ of injunction. The reason is that, while Civil Case No.
11204 for forcible entry was pending on appeal before the Regional Trial Court,
Special Patent No. 3551 was issued by then President Corazon Aquino which
covered the lot subject of the dispute and by virtue thereof, an Original Certificate
of Title in the name of NHA was issued by the Register of Deeds of Cagayan de
Oro City on January 3, 1990. So, when petitioner moved for the issuance of a writ
of execution before the MTCC on July 23, 1990, a certificate of title had already
been issued to NHA. In view of this intervening development, NHA filed a
complaint for quieting of title before the Regional Trial Court of Cagayan de
Oro City. Thus, it was only proper for the Court of Appeals to direct the Regional
Trial Court,[9] where Civil Case No. 90-337 was pending, to grant the writ of
preliminary injunction to restrain the enforcement of the decision of the MTCC in
Civil Case No. 11204 as there was a material change in the status of the parties
with regard to the said land. Clearly, the government, through the NHA will be
prejudiced by the impending enforcement of the decision in Civil Case No. 11204
which directs the said agency to restore the members of petitioner to their
respective possession on portions of Lot No. 1982.
Petitioner claims that Special Patent No. 3351 issued by then President
Corazon Aquino on July 1, 1988 and the corresponding issuance by the Register of
Deeds of Original Certificate of Title No P-3324 in the name of NHA had
entrusted only the administration of the disputed lot to the said agency but not the
ownership thereof It also alleges that, by virtue of Proclamation No. 2290, issued
on May 10, 1985, declaring the land situated at Barrio Macabalan, Cagayan de Oro
City, as Slum Improvement Settlement (SIR) area, it is illegal for NHA to claim
ownership over the said land. Furthermore, petitioner also claims that respondent
Court overlooked the fact that the issues on ownership and possession are subjudice before RTC, Branch 25, Cagayan de Oro City in Civil Case ;No. 90-337 x x
x[10] Hence, it concludes that the appellate court cannot pass upon these issues as
there is still no final judgment on said civil case.
Petitioners contentions are bereft of merit.
The Original Certificate of Title (No. P-3324) issued to respondent NHA
serves as a concrete and conclusive evidence of an indefeasible title to the
property. Accordingly, once a decree of registration is issued under
theTorrens systems and the one year period from the issuance of the decree of
registration has lapsed, without said decree being controverted by any adverse
party, the title becomes perfect and cannot later on be questioned. [11]
Furthermore, in the case at bench, the original certificate of title was issued
by the Register of Deeds, under an administrative proceeding pursuant to Special
Patent No. 3551. Thus, it is as indefeasible as a certificate of title issued under a
judicial registration proceeding as the land covered by said certificate is a
disposable public land within the contemplation of the Public Land
Law.[12] Moreover, the said certificate of title was not controverted by petitioner in
a proper proceeding nor did it show that the issuance of the Original Certificate of

Title by the register of deeds to NHA was tainted with bad faith or fraud. Hence,
said certificate of title enjoys the presumption of having been issued by the register
of deeds in the regular performance of its official duty.[13]
Also, OCT No. P-3324 issued in the name of respondent NHA, clearly states:
TO HAVE AND TO HOLD, the said parcel of land with all the appurtenances
thereunto of right of belonging unto the NATIONAL HOUSING AUTHORITY and
to its successors-in-interest or assigns forever, subject to private rights, if any there
be.[14]
Clearly the certificate of title vested not only ownership over the lot but also
the right of possession as a necessary consequence of the right of ownership.
Respondent is not merely the administrator of the said lot. It cannot be denied
that Proclamation No. 2290 gave authority to the NHA to dispose of Lot No.
1982. In the said Proclamation the President of the Philippinesgranted to NHA the
authority to develop, administer and dispose of Lot No. 1982, located at
Macabalan, Cagayan de Oro City, in accordance with the guidelines of the Slum
Improvement and Resettlement Program and the approved development plan of the
area.
On the other hand, petitioners only basis for claiming the disputed lot is
lawful entry and possession for an extended period of time and, as a matter of fact,
there is a final judgment in its favor in the case for forcible entry before the
MTCC. As to this, settled is the rule that, in an action for forcible entry, the only
issue involved is mere physical possession (possession de facto) and not juridical
possession (possession de jure) nor ownership[15] As the case filed before the lower
court is only one for forcible entry, it is indicative that the legal title over the said
property is not disputed by the petitioner. There has been no assertion of
ownership over the land, only that of prior possession. At any rate, the judgment
rendered in the ejectment case is effective only with respect to possession and in
no wise bind the title or affect the ownership of the land. [16]
Indeed, petitioner has no legal leg to stand as regards ownership because its
Miscellaneous Sales Application was not acted upon nor favorably considered by
the Bureau of Lands. The Bureau, through its Regional Director, rejected the
subdivision survey previously submitted by COCLAI, in an Order, dated May 19,
1983.
In effect, petitioners occupation of the land in question, after the denial of its
application for Miscellaneous
Sales Patent, became
subsequently
illegal. Petitioners members have, as a consequence, become squatters whose
continuous possession of the land may now be considered to be in bad faith. This
is unfortunate because squatters acquire no legal right over the land they are
occupying.[17]

Although as a general rule, a court should not, by means of a preliminary

injunction, transfer property in litigation from the possession of one party to
another, this rule admits of some exceptions. For example, when there is a clear
finding of ownership and possession of the land or unless the subject property is
covered by a torrens title pointing to one of the parties as the undisputed
owner.[18] In the case at bench, the land subject of the suit is covered by a torrens
title under the name of NHA.
A writ of injunction should issue so as not to render moot and academic any
decision which the Regional Trial Court in Civil Case No. 90-337 will render and
in order to prevent any irreparable injury which respondent may sustain by virtue
of the enforcement of the decision of the MTCC.
WHEREFORE, the petition is DISMISSED. The decision of the Court of
Appeals in C.A. G.R. SP No. 23080 is AFFIRMED.
SO ORDERED.
(9) JULIO LUCERO, movant-appellee, vs.
AL., oppositors-appellants.

JAIME

L.

LOOT,

ET

[G.R. No. L-16995 October 28, 1968]

FERNANDO, J.:
The order of the Court of First Instance of Iloilo, the former Judge Wenceslao L.
Fernan presiding, dated September 21, 1959, now on appeal before this Court,
speaks to this effect: "Regarding the writ of possession, once the final decree has
been issued the issuance of a writ of possession is only a matter of course if
nothing in the past has been issued in favor of the registered owner. There is no
period of prescription as to the issuance of a writ of possession, and inasmuch as
the final decree has already been entered, it follows that a writ of possession should
be issued in favor of the registered owner." 1
Accordingly, it granted a writ of possession in favor of movant, now appellee, Julio
Lucero. There was an opposition on the part of oppositors, all surnamed Loot, now
appellants. The lower court failed to see merit in the opposition interposed. It
explained why: "The opposition interposed by the oppositors to the effect that there
are defects in the reconstitution of the records and that the motion is not under oath
is trivial in its nature and consequently untenable."2 Accordingly, the writ of
possession, as prayed for, was issued.
There was an urgent motion to quash the writ of possession filed by the oppositors
on September 25, 1959,3followed by a motion for reconsideration on October 10,
1959,4 which was denied in an order of October 23, 1959.5 As set forth in such
order of denial: "After weighing the arguments adduced by the movant represented

by Atty. Gonzales and the oppositor represented by Atty. Loot, this Court adheres
to the previous ruling that inasmuch as no writ of possession has been issued in this
case, it is the ministerial duty of this Court to issue one in compliance of the
provisions of Act 496 as amended." There was a second motion for reconsideration
filed by oppositors on November 3, 1959, 6 which was denied in an order of
December 10, 1959.7 Not satisfied, there was still another motion for
reconsideration of the above order filed by oppositors on December 28,
1959,8 which similarly met the same fate, an order of denial being issued on
February 20, 1960.9 The appeal was taken direct to us.
The sore issue, therefore, is whether on the above facts, the order granting the writ
of possession was in accordance with law. The answer must be in the affirmative.
This appeal cannot prosper.
No other view would be compatible with the pertinent provision of the Land
Registration Act,10 as uniformly interpreted by this Court. As was noted in the
order of September 21, 1959, there was a final decree in a land registration case
which arose from a decision promulgated in 1938, the final decree being issued on
October 29, 1941. It was not incorrect for the lower court to state, therefore, that
"the issuance of a writ of possession is only a matter of course if nothing in the past
has been issued in favor of the registered owner."11 It is equally true, as likewise
mentioned therein, that there is "no period of prescription as to the issuance of a
writ of possession, ..."12In Pasay Estate Co. v. Del Rosario,13 it has been made
clear that the purpose of the statutory provision empowering the then Court of
Land Registration, now the ordinary courts of first instance, to enforce its orders,
judgments or decrees in the same way that the judiciary does is so that the winning
party could be placed in possession of the property covered by such decree.
Thereby, there would be an avoidance of the inconvenience and the further delay to
which a successful litigant would be subjected if he were compelled "to commence
other actions in other courts for the purpose of securing the fruits of his victory."
There was a restatement of the above principle in Demorar v. Ibaez,14 the closest
in period of time to the challenged order of the lower court. Thus: "We have
heretofore held that a writ of possession may be issued not only against the person
who has been defeated in a registration case but also against anyone adversely
occupying the land or any portion thereof during the land registration proceedings
... The issuance of the decree of registration is part of the registration proceedings.
In fact, it is supposed to end the said proceedings. Consequently, any person
unlawfully and adversely occupying said lot at any time up to the issuance of the
final decree, may be subject to judicial ejectment by means of a writ of possession
and it is the duty of the registration court to issue said writ when asked for by the
successful claimant." As a matter of fact, in a 1948 decision, 15 it was held by us
that "the fact that the petitioners have instituted, more than one year after the
decree of registration had been issued, an ordinary action with the Court of First
Instance attacking the validity of the decree on the ground of fraud, is not a bar to
the issuance of the writ of possession applied for by the registered owners."

A few months after the issuance of such a challenged order of September 21,
1959, Marcelo v. Mencias was decided,16 where this Court went so far as to hold
that "if the writ of possession issued in a land registration proceeding implies the
delivery of possession of the land to the successful litigant therein, ... a writ of
demolition must, likewise, issue, especially considering that the latter writ is but a
complement of the former which, without said writ of demolition, would be
ineffective."
It is clear, therefore, to repeat, that on the facts as found, the validity of the
challenged order cannot be impugned. It is equally clear that this being a direct
appeal to us, no questions of fact may be raised. As was held recently inPerez v.
Araneta:17 "Nothing is better settled than that where the correctness of the findings
of fact of the lower court are assailed, the Court of Appeals is the proper forum. If
resort be had directly to us, then appellant must be deemed to have waived the
opportunity otherwise his to inquire into such findings and to limit himself to
disputing the correctness of the law applied."
The problem thus confronting oppositors-appellants in bringing the matter direct to
us was to show that the above two-page order on the meager but sufficient facts as
found, was vitiated by error or errors in law. It was far from easy, therefore,
considering as above shown that on the authority of applicable decisions, the lower
court was left with no choice but to issue the writ of possession sought.
Resolute and undaunted, oppositors did their best to accomplish a task formidable
in its complexity. It seemed they overdid it. They assigned twenty-one errors a
great many of them factual, and, therefore, not for us to consider, and the
remaining, except the last, far from decisive in view of the rather settled state of the
law concerning the issuance of a writ of possession. Nor did the twenty-first error
assigned suffice to call for a reversal, as will be more fully explained. That is why,
as earlier stated, the appeal was doomed to futility.
It would not be amiss, though, to discuss even briefly one of them, the fourteenth.
Invoking three of our previous decisions,18 they would impugn the issuance of the
writ of possession on the ground that they were not oppositors and defeated parties
in the land registration proceeding. They would ignore the fact, however, that in
the above decisions relied upon, the basis for the impropriety of issuing a writ of
possession was that the parties adversely affected entered the property in question
after the issuance of the decree. There is nothing in the challenged order that such
is the case here. Thus, they would raise a factual issue a matter not properly
cognizable by us.
A reminder may not be out of place. The apparent ease with which oppositorsappellants could conjure up so many alleged errors, while it may be a tribute to
their ingenuity in making a two-page order yield so many instances of the rankest
violation of legal precepts, hardly contributes to the persuasiveness of their brief.

As a matter of fact, the suspicion could be legitimately entertained that in thus

attempting to paint the highly unrealistic picture of a terse and brief order being so
sadly riddled with errors, oppositors- appellants were trying in vain to bolster what
inherently was a weak case.
That is all that needs be said about this appeal except for the disposition of the
twenty-first error assigned, referring to the existence of a pending case between the
parties for reconveyance.19 There was no denial in the brief for movant-appellee
that such a case was then pending at the time the respective briefs were filed. What
is decided here cannot affect whatever final decision might possibly have been
rendered by this time in the aforesaid reconveyance action. Nonetheless, the mere
fact that such suit was then pending did not oust the lower court of its jurisdiction
to issue the writ of possession. As stated by our present Chief Justice in Agreda v.
Rodriguez:20"Besides, it is clear that respondent Judge had jurisdiction to pass upon
the motion of Santiago Agreda for the issuance of a writ of possession. Whether or
not the motion should have been denied, in view of institution of said Civil Case
No. 6267, is a matter that does not affect said jurisdiction."
WHEREFORE, the order of September 21, 1959, granting the writ of possession in
favor of movant-appellee, and the orders of October 23, 1959, December 10, 1959
and February 20, 1960, denying the reconsideration thereof, are affirmed. With
costs against oppositors-appellants.

(10)LEOPOLDOVENCILAO, MAURO RENOBLAS, TELESFORO BALON

DIA, FELIX ABANDULA, FAUSTOGABAISEN, ISIDORO ELIVERA, RAY
MUNDO BONGATO, MARTIN ROLLON,
EUSTAQUIO
MEDANA,
DOROTEO ELIVERA, FRANCISCO PAGAURA, MACARIO GEPALAGO,
GREGORIO ITAOC, ALEJANDRO RENOBLAS, SIMEON BARBARONA,
GREGORIO RENOBLAS, FRANCISCO ASOY, TEOFILA GUJELING,
FABIAN VILLAME, VICENTE OMUSORA, PEDRO BALORIA,
GREGORIO ITAOC, TERESITA ITAOC, FAUSTINO ITAOC,
FORTUNATO ITAOC, FLORENTINA GEMENTIZA, RESTITUTA
OMUSORA, ZOILA OMUSORA, FELISA OMUSORA, ROBERTO
HAGANAS, FELISA HAGANAS, FERMIN HAGANAS, VICTORIANO
HAGANAS, JULIA SEVILLA, ROMAN MATELA, MARCELA MATELA,
DELFIN MATELA, PELAGIO MATELA, ROBERTA MATELA,
PROCOPIO CABANAS and SERAFINA CABANAS, plaintiff-appellants, vs.
TEODORO VANO, JOSE REYES, ROSARIO REYES, SALUD OGILVE
BELTRAN, AMALIA R. OGILVE, FLORA VDA. DE COROMINAS,
JESUSA REYES, LOURDES COROMINAS MUNOZ, JUAN COROMINAS,
LOURDES C. SAMSON CEBALLOS, SOLEDAD C. SAMSON RAMA,
DOLORES V. GARCES FALCON, JAIME GARCES, JOAQUIN REYES,
and PEDRO RE R. LUSPO, defendants- appellees. [G.R. No. L-25660
February 23, 1990]

LEOPOLDO VENCILAO, SOFRONIO ROLLON, AURELIO ELIVERA,

FRANCISCO PAGAORA, MARTIN ROLLON, GRACIANO MAHINAY,
GERARDO ELIVERA, GREGORIO ITAOC, ISIDRO ELIVERA,
DEMOCRITO ELIVERA, FAUSTO GABAISIN, ALBINO RENOBLAS,
EUSTAQUIO MENDANIA, SIMEON BARBARONA, TELESFORO
BALONDA, FELIX ABANDOLA, SATURNINA GEPILAGO, TEOFILA
GOHILING, TOMAS REAMBONANSA, MARCOS HAGANAS, PASTOR
ASNA and MAURO RENOBLAS, petitioners, vs. HONORABLE PAULINO S.
MARQUEZ, Judge, Court of First Instance of Bohol, Branch 1, and
MARIANO OGILVE, et. al., respondents. [G.R. No. L-32065 February
23,1990]
LEOPOLDO VENCILAO, SOFRONIO ROLLON, AURELIO ELIVERA,
FRANCISCO PAGAORA, MARTIN ROLLON, GRACIANO MAHINAY,
GERARDO ELIVERA, GREGORIO ITAOC, ISIDRO ELIVERA,
DEMOCRITO ELIVERA, FAUSTO GABAISIN, ALBINO RENOBLAS,
EUSTAQUIO MENDANIA, SIMEON BARBARONA, TELESFORO
BALONDA, FELIX ABANDOLA, SATURNINA GEPILAGO, TEOFILA
GOHILING, TOMAS REAMBONANSA, MARCOS NAGANAS, PASTOR
ASNA
and
MAURO
RENOBLAS, petitioners,
vs. HONORABLE PAULINO S. MARQUEZ, Judge, Court of First Instance
of Bohol, Branch 1, The Provincial Sheriff, Province of Bohol, and MARIANO
OGILVE, et. al., respondents. [G.R. No. L-33677 February 23, 1990]
MEDIALDEA, J.:
On February 7, 1974, We resolved to allow the consolidation of these three cases,
considering that they involve the same parties and parcels of land: (1) G.R. No. L25660---this is an appeal from the order of the Court of First Instance of Bohol
(now Regional Trial Court) 1 dated May 12,1964 dismissing the cases of some of
the plaintiffs-appellants and its order dated August 25, 1965 denying the motion for
reconsideration and the motion to declare the defendants- appellees in default; (2)
G.R. No. L32065---this is a petition for certiorari of the order of the Court of First
Instance of Bohol dated May 14, 1970 directing the execution of its prior order
dated May 6, 1969 finding petitioners guilty of contempt; (3) G.R. No. L-33677--this is a petition for certiorari with mandamus and prohibition of the order of the
Court of First Instance of Bohol dated June 2, 1971 directing the demolition of the
houses of the petitioners.
On February 15, 1988, We resolved to require the parties to manifest whether or
not they are still interested in prosecuting these cases, or supervening events have
transpired which render these cases moot and academic or otherwise substantially
affect the same. On March 25, 1988, the petitioners filed an ex parte manifestation
that they are still very much interested in the just prosecution of these cases.

The antecedent facts are as follows:

G.R. No. 25660
On April 1, 1950, the heirs of the late Juan Reyes filed an application for
registration of the parcels of land allegedly inherited by them from Juan Reyes, in
Land Registration Case No. 76, L.R.C. Record No. N-4251. On July 26,1951,
administratrix Bernardina Vda. de Luspo filed an amended application for
registration. After hearing, the land was registered under Original Certificate of
Title No. 400 (pp. 84-85, Record on Appeal; p. 7, Rollo).
On October 9, 1962, a complaint for reconveyance of real properties with damages
and preliminary injunction, Civil Case No. 1533, (pp. 2-19, Record n Appeal; p.
7, Rollo) was filed by plaintiffs-appellants before the Court of First Instance of
Bohol. It was alleged that they are the lawful owners of their respective parcels of
land including the improvements thereon either by purchase or inheritance and
have been in possession publicly, continuously, peacefully and adversely under the
concept of owners for more than thirty (30) years tacked with the possession of
their predecessors-in-interest. However, those parcels of land were included in the
parcels of land applied for registration by the heirs of Juan Reyes, either by mistake
or fraud and with the intention of depriving them of their rights of ownership and
possession without their knowledge, not until the last part of 1960 when the
defendants-appellees, through their agents, attempted to enter those parcels of land
claiming that they now belong to the heirs of Juan Reyes. To the complaint, the
defendants-appellees moved to dismiss on two grounds (pp. 19-22, Record on
Appeal; p. 7, Rollo), namely: (1) for lack of cause of action and (2) the cause of
action is barred by prior judgment.
On July 20, 1963, the court a quo issued an order denying defendants-appellees'
motion to dismiss (pp. 29-30, Record on Appeal; p. 7, Rollo). However, acting on
the motion to set aside such order (pp. 31-32, Record on Appeal; p. 7, Rollo), on
May 12, 1964, the same court issued another order reversing itself partially (p. 56,
Record on Appeal; p. 7, Rollo), the dispositive portion of which reads:
WHEREFORE, the cases herein of the plaintiffs Alejandro
Renoblas, Fausto Cabaisan, Fabian Villame, Gregorio Ita-oc,
Faustino Ita-oc, Fortunato Ita-oc, Roberto Haganas, Felisa
Haganas, Fermin Haganas, Victorians Haganas, Julia Sevilla,
Ramon Matela, Roberto Matela, Procopio Cabaas and Vicente
Amosora are hereby dismissed on the ground of res adjudicata
with these plaintiffs paying proportionately eighteenth forty one
(18/41) of the costs, but the petition to dismiss the case of the rest
of the plaintiffs is hereby denied.
SO ORDERED.

On May 28,1964, the plaintiffs-appellants whose cases were dismissed filed a

motion for reconsideration (pp. 57- 58, Record on Appeal; p. 7, Rollo). On July 24,
1964, the plaintiffs-appellants whose cases were not dismissed filed a motion to
declare the defendants-appellees in default for failure to file their answer with the
time prescribed by law (pp. 68-75, Record on Appeal; p. 7, Rollo). On the other
hand, defendants-appellees filed their opposition to the motion for reconsideration
praying that the complaint as regards the rest of the plaintiffs-appellants be
likewise dismissed (pp. 75-80, Record on Appeal; p. 7 Rollo).
On August 25, 1965, the court a quo issued an order in connection therewith (pp.
82-98, Record on Appeal; p. 7, Rollo) denying all motions.
The case is now before Us with the following as assignments of errors (p. 3, Brief
for the Plaintiffs-Appellants; p. 9, Rollo), to wit:
I
THE TRIAL COURT ERRED IN DISMISSING THE CASES
OF THE PLAINTIFFS-APPELLANTS WHOSE NAMES ARE
ALREADY MENTIONED ABOVE ON THE ALLEGED
GROUND THAT THEIR CASES ARE BARRED BY A PRIOR
JUDGMENT OF RES ADJUDICATA.
II
THE TRIAL COURT ERRED IN DENYING THE MOTION
OF THE PLAINTIFFS-APPELLANTS WHOSE CASES ARE
NOT DISMISSED TO DECLARE THE DEFENDANTSAPPELLEES IN DEFAULT FOR HAVING FAILED TO FILE
THEIR ANSWER WITHIN THE TIME PRESCRIBED BY
LAW.
On August 12, 1966, a resolution was issued by this Court dismissing the appeal as
regards the second issue because the order appealed from was merely interlocutory,
hence, not appealable (pp. 35-38, Rollo).
On August 17, 1988, petitioners Alex Abandula, Mauro Renoblas, Simeon
Barbarona, Fabian Villame, Macario Gepalago, Eustaquio Medana, Julia Sevilla,
Gregorio Itaoc, Francisco Asoy and Martin Rollon filed a motion to withdraw their
appeal on the ground that they are now the absolute owners and possessors of their
respective parcels of land subject of Civil Case No. 1533.
The appeal is not impressed with merit.

The plaintiffs-appellants claim that no evidence was presented by the defendantsappellees that they (plaintiffs-appellants) were notified of the date of the trial on
the merits of the application for registration nor were they given copies of the
decision of the trial court. Likewise, they contend that res judicata is not applicable
in an action for reconveyance.
The allegations that no evidence was presented by the defendants-appellees that
plaintiffs-appellants were notified of the date of the trial on the merits of the
application for registration nor were they given copies of the decision of the trial
court are new issues. It is a well-settled rule that, except questions on jurisdiction,
no question will be entertained on appeal unless it has been raised in the court
below and it is within the issues made by the parties in their pleadings (Cordero vs.
Cabral, G.R. No. 36789, July 25, 1983, 123 SCRA 532). The other contention
that res judicata is not applicable in an action for reconveyance is not plausible.
The principle of res judicata applies to all cases and proceedings, including land
registration and cadastral proceedings (Republic vs. Estenzo, G.R. No. L-35376,
September 11, 1980, 99 SCRA 65; Paz vs. Inandan 75 Phil. 608; Penaloza vs.
Tuazon, 22 Phil. 303).
It is a settled rule that a final judgment or order on the merits, rendered by a court
having jurisdiction of the subject matter and of the parties, is conclusive in a
subsequent case between the same parties and their successors in interest litigating
upon the same thing and issue, regardless of how erroneous it may be. In order,
therefore, that there may be res judicata, the following requisites must be present:
(a) The former judgment must be final; (b) it must have been rendered by a court
having jurisdiction of the subject matter and of the parties; (c) it must be a
judgment on the merits; and (d) there must be, between the first and the second
actions, identity of parties, of subject matter, and of cause of action (San Diego vs.
Cardona, 70 Phil. 281; Ramos vs. Pablo, G.R. No. 53692, Nov. 26,1986, 146
SCRA 24).
The underlying philosophy of the doctrine of res judicata is that parties should not
be permitted to litigate the same issue more than once and when a right or fact has
been judicially tried and determined by a court of competent jurisdiction, so long
as it remains unreversed, it should be conclusive upon the parties and those in
privity with them in law or estate (Sy Kao vs. Court of Appeals, G.R. No. 61752,
Sept. 28,1984,132 SCRA 302). The doctrine of res judicata is an old axiom of law,
dictated by wisdom and sanctified by age, and is founded on the broad principle
that it is to the interest of the public that there should be an end to litigation by the
same parties and their privies over a subject once fully and fairly
adjudicated. Interest republicae ut sit finis litium (Carandang vs. Venturanza, G.R.
No. L41940, Nov. 21,1984,133 SCRA 344). To ignore the principle of res
judicata would be to open the door to endless litigations by continuous
determination of issues without end (Catholic Vicar Apostolic of the Mountain
Province vs. Court of Appeals, et al., G.R. Nos. 80294- 95, Sept. 21, 1988, 165
SCRA 515).

Thus, when a person is a party to a registration proceeding or when notified he

does not want to participate and only after the property has been adjudicated to
another and the corresponding title has been issued files an action for
reconveyance, to give due course to the action is to nullify registration proceedings
and defeat the purpose of the law.

privies. (Francisco vs. Blas, et al., No. L-5078;

Cayco, et al., vs. Cruz, et al., No. L-1 2663,
Aug. 21, 1959).
'Accordingly, a final judgment in an ordinary
civil action, determining the ownership of
certain lands is res adjudicata in a registration
proceeding where the parties and property are
the same as in the former case (Paz vs. Inandan
75 Phil. 608; Penaloza vs. Tuason, 22 Phil.
303).'

In dismissing the cases of some of the petitioners, the court a quo meticulously
discussed the presence of all the elements of res judicata (pp. 36-38; pp. 42-54,
Record on Appeal; p. 7; Rollo):
There is no question that in that Registration Proceedings, LRC
Record No. N-4251, Land Registration Case No. N-76, the Court
of First Instance of the province of Bohol had jurisdiction of the
subject matter, that said court had rendered a judgment on the
merit that was terminated in the Court of Appeals since
December, 1958, and that decision is now final with a decree of
registration over the parcels of land described in the application
issued to the applicants.
The subject matter (the parcels of land) now claimed by the
plaintiffs in this case at bar are the same, or at least part of the
parcels already adjudicated registration in that registration case to
the persons, some of them are made defendants in this case
before us. The cause of action between the two cases are the
same, ownership of these parcels of land, though the forms of
action are different, one is an ordinary Land Registration and the
other is reconveyance.
'It is settled that notwithstanding the difference
in the form of two actions, the doctrine ofres
adjudicata will apply where it appears that the
parties in effect were litigating for the same
thing. A party can not, by varying the form of
action,
escape
the
effects
of res
adjudicata (Aguirre vs. Atienza, L-10665,
Aug. 30, 1958; Geronimo vs. Nava No. L-1 21
1 1, Jan. 31, 1959; Labarro vs. Labateria et al.,
28 O.G. 4479).
'Well settled is the rule that a party can not by
varying the form of action, or adopting a
different method of presenting his case, escape
the operation of the principle that one and the
same cause of action shall not be twice
litigated between the same parties or their

xxx xxx xxx

But are there identities of parties in this case before us and the
former registration proceedings? Identity of parties means that
the parties in the second case must be the same parties in the first
case, or at least, must be successors in interest by title subsequent
to the commencement of the former action or proceeding, or
when the parties in the subsequent case are heirs (Chua Tan vs.
Del Rosario, 57 Phil. 411; Martinez vs. Franco, 51 Phil. 487-1
Romero vs. Franco, 54 Phil. 744; Valdez, et a]. vs. Penida No. L3467, July 30, 1951).
xxx xxx xxx
Returning our attention to the case at bar, and with in mind the
principles of res adjudicata above-quoted, we noticed that many
of the plaintiffs were not oppositors in the former registration
case, but many are children of the former oppositors. In such a
case we have to determine the case of every plaintiff, if the
former decision in the land registration case is conclusive and
binding upon him.
xxx xxx xxx
The defendants had proven that the adjoining owners and
claimants of the parcels of land object of registration proceeding
had been notified when the land was surveyed. These persons
notified according to the surveyor's certificate, Exhibit "B" were
as follows: Cipriano Samoya, Fausto Baguisin, Silveria Pahado,
Enojario Laroda, Alejandro Renoblas, Heirs of Gregorio
Lofranco, Julian Villame, Pedro Itaoc, Adriano Toloy, Bartolome
Omosura, Marcelina Asilon, Gregorio Baguinang, et al., Nicolas
Omosura, Simon Lagrimas, et al., Martin Quinalayo, Gorgonio

Baquinang, Demetrio Asolan, Catalino Orellena, Heirs of

Catalina Palves, Manuel Mondano, Angel Mondano, Victoriano
Balolo, Eugenio del Rosario, Verinici Bayson, Felomino Ruiz,
Apolonio Horbeda, and Mun. of Calape.
The following persons were notified by the Chief of the Land
Registration Office of the initial hearing (Exhibit "J") of the
registration proceedings enjoining them to appear on June
16,1952, at 8:30 a.m., before the Court of First Instance of Bohol
to show cause why the prayer of said application should not be
granted: the Solicitor General, the Director of Lands, the Director
of Public Works and the Director of Forestry, Manila; the
Provincial Governor, the Provincial Fiscal and the District
Engineer, Tagbilaran, Bohol; the Municipal Mayor, Gorgonio
Baguinang, Demetrio Azocan, Catalino Orellena, Manuel
Mondano, Angel Mondano, Victoriano Bolalo, Eugenio del
Rosario, Verinici Bayson, Filomeno Ruiz, Apolonio Horboda,
the Heirs of Gregorio Lofranco, Julian Villame, Pedro Itaoc,
Adriano Toloy, Bartolome Omosura, Marcelina Asilom,
Gregorio Baguinang, Nicolas Omosura, Simon Lagrimas and
Martin Quinalayo, Calape, Bohol; the heirs of Catalino Polvos,
Fausto Baguisin, Cipriano Samoya, Silveria Pohado, Enojario,
Laroda, Alejandro Renoblas and Leoncio Barbarona, Antequera
Bohol.
And after the application had been filed and published in
accordance with law the following persons represented by Atty.
Conrado D. Marapao filed opposition to that registration
proceeding: Felipe Cubido, Simon Lagrimas, Simeon Villame,
Felix Lacorte, Victor Omosura, Germana Gahil, Anastacio
Orillosa, Enerio Omosura, Valeriano Tuloy, Cipriano Sanoya,
Pablo Dumadag, Andres Reimbuncia, Roman Reimbuncia,
Celedonio Cabanas, Moises Cabanas, Calixto Gohiting, Gervasio
Sevilla, Pedro Omosura, Daniel Itaoc, Luis Omosura, Bartolome
Omusura, Nicasio Omosura, Calixto Sevilla, Teodora Omosura,
Jose Sabari, Silverio Lacorte, Silverio Tuloy, Gertrudes Sevilla,
Teodora Sevilla, Magno Orillosa, Gervacia Sevilla, Marcos
Hagonas, Eleuterio Pandas, Pablo Omosura, Fabian Villame,
Teodoro Omosura, Magdalina Asilom, Mauricio Matela,
Marciano Ordada, Eusebio Omosura, and Gregorio Repelle,
(Exhibit "E"), Atty. Juna V. Balmaseda in representation of the
Bureau of Lands, and Asst. Fiscal Norberto M. Gallardo in
representation of the Municipality of Calape.
Plaintiffs Mauro Renoblas and Gregorio Renoblas are children of
plaintiff Alejandro Renoblas. Plaintiff Telesforo Balanda is son-

in-law of Alejandro, being the husband of Juliana Renoblas,

daughter of Alejandro. Plaintiff Alejandro Renoblas was not one
of the oppositors in the registration proceedings, but he was
notified of the initial healing of that registration case and by the
surveyor that surveyed the land object of registration (Exhibit JMovant). Therefore, the decision of the land registration
proceeding is binding upon him and his case is dismissed on the
ground of res adjudicata with costs.
xxx xxx xxx
Plaintiff Fausto Cabaisan was notifed by the surveyor and that
notice of the initial hearing. And though he was not an oppositor,
the former land registration proceeding is binding on him.
Therefore, this case is dismissed in so far as Fausto Cabaisan is
concerned with costs.
xxx xxx xxx
Plaintiffs Gregorio Ita-oc, Teresita Ita-oc, Faustino Ita-oc and
Fortunate Ita-oc are children of Daniel Ita-oc, one of the
oppositors in the registration proceedings. They claim parcel No.
10 described in paragraph 2 of the complaint. Gregorio Ita-oc
testified that his land was inherited by said plaintiffs' mother
from her father, Pio Sevilla. The evidence on record (Exhibits J3, J- 4, J-5). However (sic), shows that the land is declared in the
name of Daniel Ita-oc, a former oppositor in the registration case.
Hence, these plaintiffs are successors-in-interest of Daniel Ita-oc,
and, therefore, are bound by the decision in that registration case.
Their case, therefore, is dismissed, with costs.
"Plaintiffs Roberto Haganas, Felisa Haganas, Fermin Haganas
and Victoriano Haganas are children of Marcos Haganas, a
former oppositor in the registration case. Marcos testified that his
claim before was only two hectares, while the claim of his
children is seven hectares, which come from his wife, not from
him. These plaintiffs claim two parcels, one under Tax
Declaration No. R-4452, and Tax Declaration No. R-8456. It
appears that Tax Declaration No. R-4452 (Exhibit M) is in the
name of Marcos Haganas and the land described under Tax
Declaration No. R-8456 was bought by the spouses Marcos
Haganas and Tomasa Sevilla from Gertrudis Sevilla in 1956
(Exhibit M-3), who was an oppositor in the registration
proceeding. Therefore, plaintiffs Roberto Haganas, Felisa
Haganas, Fermin Haganas, and Victoriano Haganas are

successors-in-interest to properties in which the decision in the

registration case is conclusive and binding to their predecessorsin-interest. Hence, their case here is dismissed with costs.
Plaintiff Julia Sevilla is the wife of Marcelo Matela, who was the
oppositor in the registration proceedings. Plaintiffs Roman
Matela, Marcela Matela, Delfin Matela, and Roberta Matela are
their children. She has no son by the name of Pelagic. Julia
testified that the land now claimed by her children came from her
father Pio Sevilla. The land that was claimed by Mauricio Matela
as oppositor was in his name under Tax Declaration No. 5099.
This is the same land now claimed by plaintiffs Julia Sevilla,
Ramon Matela, Marcela Matela, Delfin Matela, and Roberta
Matela (Exhibit 0-4). These plaintiffs are successors-in-interest
of Mauricio Matela, who is bound by the decision in that land
proceeding wherein he was the oppositor. Therefore, the case of
these plaintiffs are dismissed with costs.
Plaintiff Procopia Cabanas was the wife of Andres
Reambonancia, oppositor in the land registration proceedings.
She claims parcel No. 20 described in paragraph 2 of the
complaint bearing Tax Declaration No. R-8121. It appears that
this land is declared in the name of Andres Reambonancia
(Exhibit N-3) who, as oppositor in the land registration case, is
bound by the decision of that case. Therefore, the case of
plaintiff Procopia Cabanas as successor-in-interest to Andres
Reambonancia, is hereby dismissed, with costs.
Plaintiff Vicente Amosora is the son of Enerio Amosora and
Florencia Gahil both oppositors in the former registration case.
The land claimed by plaintiff Vicente Amosora is described as
parcel No. 24 of paragraph 2 of the complaint under Tax
Declaration No. R-6107, under the name of his father Enerio
Amosora. Since Enerio Amosora was an oppositor in the former
land registration of which this land was a part, the decision of
that land registration case is conclusive and binding not only to
Enerio Amosora, but also to his successor-in-interest, plaintiff
Vicente Amosora, whose case therefore, is dismissed with costs.
G.R. No. L-32065
Upon the death of administratrix Bernardina Vda. de Luspo, Transfer Certificate of
Title No. 3561 was issued in the name of Pedro R. Luspo and Transfer Certificate
of Title No. 3562 was issued in the name of several persons (p. 36, Rollo).

A writ of possession dated November 6, 1959, a first alias writ of possession dated
January 6, 1961, and a second alias writ of possession dated July 2, 1966 were
issued by the trial court against the petitioners. A sample of the guerilla-like, hide
and seek tactics employed by the petitioners was proved by the official report of
the deputy sheriff dated January 21 1960. Another evidence of petitioners' refusal
to sign and to vacate was a certification dated July 22, 1966 and the Sheriffs return
dated October 25, 1966.
On March 29, 1967, a petition for contempt was filed by Mariano Ogilve, who is
one of the registered owners of the parcel of land covered by Transfer Certificate
of Title No. 3562, against the petitioners for refusing to vacate the land occupied
by them and for refusing to sign the Sheriffs return.
On May 6, 1969, the court a quo issued a resolution, the dispositive portion of
which reads (p. 47, Rollo):
FOR ALL THE FOREGOING CONSIDERATION, make it of
record that Procopia Reambonansa voluntarily left the land and
dropped out from the case; the charge of contempt against
Alejandro Renoblas (who died) is dismissed and each of the
remaining 22 respondents are hereby found guilty of contempt
under Sec. 3-b of Rule 71 and are hereby sentenced each to pay a
fine of One Hundred Pesos, authorizing the Constabulary
Detachment at or near Candungao Calape Bohol to collect the
same and to transmit the money to the Clerk of this Court, with
subsidiary imprisonment in case of insolvency at the rate of one
day for every P2.50 or fraction of a day, the said Constabulary
Detachment to effect the commitment if any of them is unable to
pay the fine. The fingerprints of each of these 22 respondents
shall also be taken by the constabulary and filed with the record
of this case.
It is so ordered.
On June 4, 1969, the petitioners filed a motion for reconsideration of the
aforestated resolution whereas Ogilve filed an opposition thereto.
On February 14, 1970, the motion for reconsideration was denied. On March 18,
1970, another motion for reconsideration was filed by petitioners on the ground of
pendency of the action for reconveyance in Civil Case No. 1533 and their appeal in
G.R. No. L-25660. On May 14, 1970, the court a quo ordered the proper officers to
actually execute the resolution dated May 6, 1969.
Hence, the present petition.

Petitioners raise the following issues:

I
THAT THE SAID RESPONDENT JUDGE ERRED IN ISSUING A WRIT OF
POSSESSION WITHOUT ANY COMPLAINT FILED IN COURT FOR
FORCIBLE ENTRY AND DETAINER, NOR FOR RECOVERY OF
OWNERSHIP AND POSSESSION OF THE PARCELS OF LAND IN
QUESTION AGAINST THE HEREIN PETITIONERS.
II
THAT THE HONORABLE RESPONDENT JUDGE ERRED IN ISSUING A
WRIT OF POSSESSION AGAINST THE PETITIONERS HEREIN, WHO
WERE NOT PARTIES TO THE REGISTRATION PROCEEDING AND WHO
WERE NOT DEFEATED OPPOSITORS OF THE SAID APPLICATION FOR
REGISTRATION.
The petition is impressed with merit.
Petitioners contend that they were not claimants-oppositors nor defeated oppositors
in the said land registration case, as their names do not appear in the amended
application for registration; that they have occupied the subject parcels of land for
more than thirty (30) years which began long before the filing of the application for
registration; and that after the hearing of the registration case, they continued in
possession of the said land.
In a registration case, the judgment confirming the title of the applicant and
ordering its registration in his name necessarily carried with it the delivery of
possession which is an inherent element of the right of ownership. The issuance of
the writ of possession is, therefore, sanctioned by existing laws in this jurisdiction
and by the generally accepted principle upon which the administration of justice
rests (Romasanta et. al. vs. Platon, 34 O.G. No. 76; Abulocion et. al. vs. CFI of
Iloilo, et. al., 100 Phil. 554 [1956]). A writ of possession may be issued not only
against the person who has been defeated in a registration case but also against
anyone unlawfully and adversely occupying the land or any portion thereof during
the land registration proceedings up to the issuance of the final decree (Demorar
vs. Ibaez, et al., 97 Phil 72 [1955]).
The petitioners' contention that they have been in possession of the said land for
more than thirty (30) years which began long before the filing of the application for
registration and continued in possession after the hearing of the registration case,
worked against them. It was a virtual admission of their lack of defense. Thus, the
writs of possession were properly issued against them.

However, We do not subscribe to the ruling of the court a quo that petitioners are
guilty of contempt. Under Section 8 (d) of Rule 19, Rules of Court, if the judgment
be for the delivery of the possession of real property, the writ of execution must
require the sheriff or other officer to whom it must be directed to deliver the
possession of the property, describing it, to the party entitled thereto. This means
that the sheriff must dispossess or eject the losing party from the premises and
deliver the possession thereof to the winning party. If subsequent to such
dispossession or ejectment the losing party enters or attempts to enter into or upon
the real property, for the purpose of executing acts of ownership or possession, or
in any manner disturbs the possession of the person adjudged to be entitled thereto,
then and only then may the loser be charged with and punished for contempt
(Quizon vs. Philippine National Bank, et. al., 85 Phil. 459). According to this
section, it is exclusively incumbent upon the sheriff to execute, to carry out the
mandates of the judgment in question, and in fact, it was he himself, and he alone,
who was ordered by the trial judge who rendered that judgment, to place the
respondents in possession of the land. The petitioners in this case had nothing to do
with that delivery of possession, and consequently, their refusal to effectuate the
writ of possession, is entirely officious and impertinent and therefore could not
hinder, and much less prevent, the delivery being made, had the sheriff known how
to comply with his duty. It was solely due to the latter's fault, and not to the
disobedience of the petitioners' that the judgment was not duly executed. For that
purpose, the sheriff could even have availed himself of the public force, had it been
necessary to resort thereto (see United States v. Ramayrat 22 Phil. 183).
G.R. No. L-33677
On March 22,1971, Mariano Ogilve filed a Motion for a Writ of Demolition which
was granted by the trial court on April 5, 1971 (pp. 42-43, Rollo) against those who
were adjudged guilty of contempt. On April 29, 1971, the petitioners filed an
urgent motion for reconsideration of said order. On June 2, 1971, the trial court
issued another order, the dispositive portion of which reads (p. 48, Rollo):
WHEREFORE, in the absence of writ of preliminary injunction
Deputy Provincial Sheriff Pedro Aparece must not only take P.C.
soldiers with him but also carpenters to effect the demolition, the
carpenters being at the expense of the Luspo.
IT IS SO ORDERED.
Hence, the present petition.
The issue here is whether or not the respondent judge acted without or in excess of
his jurisdiction, or with grave abuse of discretion and thus excluded the herein
petitioners from the use and enjoyment of their right to which they are entitled

when he (respondent judge) issued the order of demolition on April 5, 1971 and
again on June 2, 1971 (p. 107, Rollo).

3) In G.R. No. L-33677, the petition is DISMISSED and the order of the Court of
First Instance dated June 2, 1971 is AFFIRMED. The temporary restraining order
is LIFTED.

On July 14, 1971, this Court issued a temporary restraining order (p. 51, Rollo).
SO ORDERED.
The petition is not impressed with merit.
The petitioners allege that the respondent-judge cannot issue a writ of demolition
pending the resolution of G.R. No. L-32065.
We rule that the petition in G.R. No. L-32065 was not a bar to the issuance of the
writ of demolition. It is significant to note that the subject matter of the petition in
G.R. No. L-32065 is the order dated May 14, 1970 directing the execution of the
prior order dated May 6, 1969 finding petitioners guilty of contempt and not the
writs of possession themselves. Thus, the respondent Judge correctly issued the
writs of demolition. In Meralco vs. Mencias, 107 Phil 1071, We held:
[I]f the writ of possession issued in a land registration proceeding
implies the delivery of possession of the land to the successful
litigant therein (Demorar vs. Ibanez, 97 Phil. 72; Pasay Estate
Company vs. Del Rosario, et al., 11 Phil. 391; Manlapas vs.
Llorente 48 Phil. 298), a writ of demolition must, likewise, issue,
especially considering that the latter writ is but a complement of
the former which, without said writ of demolition, would be
ineffective.
xxx xxx xxx
[The issuance of the writ of demolition] is reasonably necessary
to do justice to petitioner who is being deprived of the possession
of the lots in question, by reason of the continued refusal of
respondent ...... to remove his house thereon and restore
possession of the promises to petitioner.

(11) GERMAN MANAGEMENT & SERVICES, INC., petitioner, vs. HON.

COURT OF APPEALS and ERNESTO VILLEZA, respondents. [G.R. No.
76217 September 14, 1989]
GERMAN MANAGEMENT & SERVICES, INC., petitioner, vs. HON.
COURT OF APPEALS and ORLANDO GERNALE, respondents. [G.R. No.
L-76216 September 14, 1989]
FERNAN, C.J.:
Spouses Cynthia Cuyegkeng Jose and Manuel Rene Jose, residents of
Pennsylvania, Philadelphia, USA are the owners of a parcel of land situated in Sitio
Inarawan, San Isidro, Antipolo, Rizal, with an area of 232,942 square meters and
covered by TCT No. 50023 of the Register of Deeds of the province of Rizal
issued on September 11, 1980 which canceled TCT No. 56762/ T-560. The land
was originally registered on August 5, 1948 in the Office of the Register of Deeds
of Rizal as OCT No. 19, pursuant to a Homestead Patent granted by the President
of the Philippines on July 27, 1948, under Act No. 141.
On February 26, 1982, the spouses Jose executed a special power of attorney
authorizing petitioner German Management Services to develop their property
covered by TCT No. 50023 into a residential subdivision. Consequently, petitioner
on February 9,1983 obtained Development Permit No. 00424 from the Human
Settlements Regulatory Commission for said development. Finding that part of the
property was occupied by private respondents and twenty other persons, petitioner
advised the occupants to vacate the premises but the latter refused. Nevertheless,
petitioner proceeded with the development of the subject property which included
the portions occupied and cultivated by private respondents.

ACCORDINGLY, judgment is hereby rendered as follows:

1) In G.R. No. L-25660, the appeal is DENIED and the orders of the Court of First
Instance dated May 12, 1964 and August 25, 1965 are AFFIRMED; the motion to
withdraw the appeal of some of the plaintiffs-appellants is GRANTED;
2) In G.R. No. L-32065, the petition is GRANTED and the resolution of the Court
of First Instance dated May 14, 1970 is SET ASIDE; and

Private respondents filed an action for forcible entry against petitioner before the
Municipal Trial Court of Antipolo, Rizal, alleging that they are mountainside
farmers of Sitio Inarawan, San Isidro, Antipolo, Rizal and members of the
Concerned Citizens of Farmer's Association; that they have occupied and tilled
their farmholdings some twelve to fifteen years prior to the promulgation of P.D.
No. 27; that during the first week of August 1983, petitioner, under a permit from
the Office of the Provincial Governor of Rizal, was allowed to improve the
Barangay Road at Sitio Inarawan, San Isidro, Antipolo, Rizal at its expense,
subject to the condition that it shag secure the needed right of way from the owners
of the lot to be affected; that on August 15, 1983 and thereafter, petitioner deprived

private respondents of their property without due process of law by: (1) forcibly
removing and destroying the barbed wire fence enclosing their farmholdings
without notice; (2) bulldozing the rice, corn fruit bearing trees and other crops of
private respondents by means of force, violence and intimidation, in violation of
P.D. 1038 and (3) trespassing, coercing and threatening to harass, remove and eject
private respondents from their respective farmholdings in violation of P.D. Nos.
316, 583, 815, and 1028. 1
On January 7,1985, the Municipal Trial Court dismissed private respondents'
complaint for forcible entry. 2 On appeal, the Regional Trial Court of Antipolo,
Rizal, Branch LXXI sustained the dismissal by the Municipal Trial Court. 3
Private respondents then filed a petition for review with the Court of Appeals. On
July 24,1986, said court gave due course to their petition and reversed the decisions
of the Municipal Trial Court and the Regional Trial Court. 4
The Appellate Court held that since private respondents were in actual possession
of the property at the time they were forcibly ejected by petitioner, private
respondents have a right to commence an action for forcible entry regardless of the
legality or illegality of possession. 5 Petitioner moved to reconsider but the same
was denied by the Appellate Court in its resolution dated September 26, 1986. 6
Hence, this recourse.
The issue in this case is whether or not the Court of Appeals denied due process to
petitioner when it reversed the decision of the court a quo without giving petitioner
the opportunity to file its answer and whether or not private respondents are
entitled to file a forcible entry case against petitioner. 7
We affirm. The Court of Appeals need not require petitioner to file an answer for
due process to exist. The comment filed by petitioner on February 26, 1986 has
sufficiently addressed the issues presented in the petition for review filed by
private respondents before the Court of Appeals. Having heard both parties, the
Appellate Court need not await or require any other additional pleading. Moreover,
the fact that petitioner was heard by the Court of Appeals on its motion for
reconsideration negates any violation of due process.
Notwithstanding petitioner's claim that it was duly authorized by the owners to
develop the subject property, private respondents, as actual possessors, can
commence a forcible entry case against petitioner because ownership is not in
issue. Forcible entry is merely a quieting process and never determines the actual
title to an estate. Title is not involved. 8

the spouses Jose were ever in possession of the subject property. On the contrary,
private respondents' peaceable possession was manifested by the fact that they even
planted rice, corn and fruit bearing trees twelve to fifteen years prior to petitioner's
act of destroying their crops.
Although admittedly petitioner may validly claim ownership based on the
muniments of title it presented, such evidence does not responsively address the
issue of prior actual possession raised in a forcible entry case. It must be stated that
regardless of the actual condition of the title to the property, the party in peaceable
quiet possession shall not be turned out by a strong hand, violence or terror. 9 Thus,
a party who can prove prior possession can recover such possession even against
the owner himself. Whatever may be the character of his prior possession, if he has
in his favor priority in time, he has the security that entitles him to remain on the
property until he is lawfully ejected by a person having a better right by accion
publiciana or accion reivindicatoria. 10
Both the Municipal Trial Court and the Regional Trial Court have rationalized
petitioner's drastic action of bulldozing and destroying the crops of private
respondents on the basis of the doctrine of self-help enunciated in Article 429 of
the New Civil Code. 11 Such justification is unavailing because the doctrine of selfhelp can only be exercised at the time of actual or threatened dispossession which
is absent in the case at bar. When possession has already been lost, the owner must
resort to judicial process for the recovery of property. This is clear from Article
536 of the Civil Code which states, "(I)n no case may possession be acquired
through force or intimidation as long as there is a possessor who objects thereto.
He who believes that he has an action or right to deprive another of the holding of a
thing, must invoke the aid of the competent court, if the holder should refuse to
deliver the thing."
WHEREFORE, the Court resolved to DENY the instant petition. The decision of
the Court of Appeals dated July 24,1986 is hereby AFFIRMED. Costs against
petitioner.
SO ORDERED.

(12)
FELIX
CAISIP,
IGNACIO
ROJALES
and
FEDERICO
VILLADELREY, petitioners,
vs. THE PEOPLE OF THE PHILIPPINES and THE COURT OF
APPEALS, respondents.
[G.R. No. L-28716 November 18, 1970]

In the case at bar, it is undisputed that at the time petitioner entered the property,
private respondents were already in possession thereof . There is no evidence that

CONCEPCION, C.J.:

This case is before Us upon petition of defendants Felix Caisip, Ignacio Rojales
and Federico Villadelrey, for review on certiorari of a decision of the Court of
Appeals which affirmed that of the Court of First Instance of Batangas, convicting
them of the crime of Grave Coercion, with which they are charged, and sentencing
each to four (4) months and one (1) day of arresto mayor and to pay a fine of
P200.00, with subsidiary imprisonment in case of insolvency, not to exceed onethird of the principal penalty, as well as one-third of the costs.

The record before Us does not explain why said decision was executed. According
to the complainant, her husband's counsel had appealed from said decision. The
justice of the peace who rendered it, Hon. Rodolfo Castillo, said that there really
had been an attempt to appeal, which was not given due course because the
reglementary period therefor had expired; that a motion to reconsider his order to
this effect was denied by him; and that a second motion for reconsideration was
"still pending consideration," and it was October 19, 1959 when such testimony
was given.

As set forth in the trial court's decision, the background of the present case is this:
Continuing the narration of the antecedent facts, His Honor, the Trial Judge, added:
The complainant Gloria Cabalag is the wife of Marcelino
Guevarra who cultivated a parcel of land known as Lot 105-A of
Hacienda Palico situated in sitio Bote-bote, barrio Tampisao,
Nasugbu, Batangas. The said parcel of land used to be tenanted
by the deceased father of the complainant. Hacienda Palico is
owned by Roxas y Cia. and administered by Antonio Chuidian.
The overseer of the said hacienda is Felix Caisip, one of the
accused herein. Even before the occurrence of the incident
presently involved, there had been a series of misunderstandings
and litigations involving the complainant and her husband, on
one hand, and the men of Hacienda Palico on the other.
It appears that on December 23, 1957, Marcelino Guevarra filed
an action with the Court of Agrarian Relations seeking
recognition as a lawful tenant of Roxas y Cia. over lot No. 105-A
of Hacienda Palico. In a decision dated February 22, 1958, the
Court of Agrarian Relations declared it has no jurisdiction over
the case, inasmuch as Guevarra is not a tenant on the said parcel
of land. An appeal was taken by Guevarra to the Supreme Court,
but the appeal was dismissed in a resolution dated April 10,
1958.
On May 17, 1958, Roxas y Cia. filed an action against Marcelino
Guevarra in the justice of the peace court of Nasugbu, Batangas,
for forcible entry, praying therein that Guevarra be ejected from
the premises of Lot No. 105-A. After due hearing, the said Court
in a decision dated May 2, 1959 ordered Guevarra to vacate the
lot and to pay damages and accrued rentals. A writ of execution
was issued by Justice of the Peace Rodolfo A. Castillo of
Nasugbu, which was served on Guevarra on June 6, 1959, and
the return of which was made by Deputy Sheriff Leonardo R.
Aquino of this Court on June 23, 1959 (Exhibit "10"). The writ
recites among other things that the possession of the land was
delivered to the Roxas y Cia. thru Felix Caisip, the overseer, and
Guevarra was given twenty days from June 6, 1959 within which
to leave the premises.

On June 15, 1959, some trouble occurred between the

complainant and Caisip regarding the cutting of sugar cane on
Lot 105-A. The following day June 16, 1959, the complainant
allegedly again entered the premises of Lot 105-A and refused to
be driven out by Felix Caisip. Due to the aforementioned
incidents, Gloria Cabalag was charged in the justice of the peace
court of Nasugbu, Batangas, with grave coercion for the incident
of June 15, 1959, docketed in the said court as Criminal Case No.
968 (Exhibit "3"); and with the crime of unjust vexation for the
incident of June 16, 1959, docketed in the said court as Criminal
Case No. 970. Both cases, however, were filed only on June 25,
1959.
In other words, these criminal cases, Nos. 968 and 970, against Gloria Cabalag,
were filed eight (8) days after the incident involved in the case at bar. It is, also,
noteworthy that both cases were on motion of the prosecution, filed after a
reinvestigation thereof provisionally dismissed, on November 8, 1960, by the
Court of First Instance of Batangas, upon the ground "that the evidence of record ...
are insufficient to prove the guilt of the accused beyond reasonable doubt." The
decision of said court, in the case at bar, goes on to say:
It further appears that due to the tenacious attitude of Gloria
Cabalag to remain in the premises, Caisip sought the help of the
chief of police of Nasugbu who advised him to see Deputy
Sheriff Aquino about the matter. The latter, however, informed
Caisip that he could not act on the request to eject Gloria Cabalag
and to stop her from what she was doing without a proper court
order. Caisip then consulted Antonio Chuidian, the hacienda
administrator, who, in turn, went to the chief of police and
requested for the detail of policemen in sitio Bote-bote. The chief
of police, acting on said request, assigned the accused Ignacio
Rojales and Federico Villadelrey, police sergeant and police
corporal, respectively, of the Nasugbu Police Force, to sitio Botebote. 1

On June 17, 1959, at about 5:00 p.m., Gloria Cabalag was seen weeding the portion
of Lot 105-A which was a ricefield. Appellant Caisip approached her and bade her
to leave, but she refused to do so, alleging that she and her husband had the right to
stay there and that the crops thereon belong to them. She having stuck to this
attitude, even when he threatened to call the police, Caisip went to his codefendants, Sgt. Rojales and Cpl. Villadelrey, both of the local police, who were
some distance away, and brought them with him. Rojales told Gloria, who was
then in a squatting position, to stop weeding. As Gloria insisted on her right to stay
in said lot, Rojales grabbed her right hand and, twisting the same, wrested
therefrom the trowel she was holding. Thereupon, Villadelrey held her left hand
and, together with Rojales, forcibly dragged her northward towards a forested
area, where there was a banana plantation as Caisip stood nearby, with a drawn
gun.
Inasmuch as Gloria shouted "Ina ko po! Ina ko po!" 2her neighbors, Librada
Dulutan, followed, soon later, by Francisca Andino, came and asked the policemen
why they were dragging her. The policemen having answered that they would take
Gloria to town which was on the west Francisca Andino pleaded that Gloria be
released, saying that, if their purpose was as stated by them, she (Gloria) would
willingly go with them. By this time, Gloria had already been dragged about eight
meters and her dress, as well as her blouse 3were torn. She then agreed to proceed
westward to the municipal building, and asked to be allowed to pass by her house,
within Lot 105-A, in order to breast-feed her nursing infant, but, the request was
turned down. As they passed, soon later, near the house of Zoilo Rivera, head of
the tenant organization to which she was affiliated, in the barrio of Camachilihan,
Gloria called out for him, whereupon, he went down the house and accompanied
them to the municipal building. Upon arrival thereat, Rojales and Villadelrey
turned her over to the policeman on duty, and then departed. After being
interrogated by the chief of police, Gloria was, upon representations made by Zoilo
Rivera, released and allowed to go home.
The foregoing is the prosecution's version. That of the defense is to the effect that,
upon being asked by the policemen to stop weeding and leave the premises, Gloria,
not only refused to do so, but, also, insulted them, as well as Caisip. According to
the defense, she was arrested because of the crime of slander then committed by
her. Appellants Rojales and Villadelrey, moreover, testified that, as they were
heading towards the barrio of Camachilihan, Gloria proceeded to tear her clothes.
His Honor, the Trial Judge, accepted, however, the version of the prosecution and
found that of the defense unworthy of credence. The findings of fact of the Court
of Appeals, which fully concurred in this view, are "final," and our authority to
review on certiorari its appealed decision is limited to questions purely of
law. 4Appellants maintain that the Court of Appeals has erred: (1) in not finding
their acts "justified under Article 429 of the New Civil Code"; (2) in holding that
the 20-day period of grace given to Marcelino Guevarra and his wife, Gloria
Cabalag, by the sheriff, to vacate Lot 105-A, was valid and lawful; (3) in finding

that the elements of the crime of grave coercion are present in the case at bar; and
(4) in finding appellants guilty as charged. This pretense is clearly untenable.
Art. 429 of our Civil Code, reading:
The owner or lawful possessor of a thing has the right to exclude
any person from the enjoyment and disposal thereof. For this
purpose, he may use such force as may be reasonably necessary
to repel or prevent an actual or threatened unlawful physical
invasion or usurpation of his property.
upon which appellants rely is obviously inapplicable to the case
at bar, for, having been given 20 days from June 6, 1959, within
which to vacate Lot 105-A, complainant did not, on June 17,
1959 or within said period invade or usurp said lot. She
had merely remained in possession thereof, even though the
hacienda owner may have become its co-possessor. Appellants
did
not
"repel orprevent in
actual
or threatened ...
physical invasion or usurpation." They expelled Gloria from a
property of which she and her husband were in
possession even before the action for forcible entry was filed
against them on May 17, 1958, despite the fact that the Sheriff
had explicitly authorized them to stay in said property up to June
26, 1959, and had expressed the view that he could not oust them
therefrom on June 17, 1959, without a judicial order therefor.
It is urged, that, by weeding and refusing to leave Lot 105-A, Gloria had
committed a crime in the presence of the policemen, despite the aforementioned
20-day period, which, appellants claim, the sheriff had no authority to grant. This
contention is manifestly untenable, because: (1) said period was granted in the
presence of the hacienda owner's representative, appellant Caisip, who, by not
objecting thereto, had impliedly consented to or ratified the act performed by the
sheriff; (2) Gloria and her husband were thereby allowed to remain, and had, in
fact, remained, in possession of the premises, perhaps together with the owner of
the hacienda or his representative, Caisip; (3) the act of removing weeds from the
ricefield was beneficial to its owner and to whomsoever the crops belonged, and,
even if they had not authorized it, does not constitute a criminal offense; and (4)
although Gloria and her husband had been sentenced to vacate the land, the
judgment against them did not necessarily imply that they, as the parties who had
tilled it and planted thereon, had no rights, of any kind whatsoever, in or to the
standing crops, inasmuch as "necessary expenses shall be refunded to every
possessor,"5 and the cost of cultivation, production and upkeep has been held to
partake of the nature of necessary expenses. 6

It is, accordingly, clear that appellants herein had, by means of violence, and
without legal authority therefor, prevented the complainant from "doing something
not prohibited by law," (weeding and being in Lot 105-A), and compelled her "to
do something against" her will (stopping the weeding and leaving said lot),
"whether it be right or wrong," thereby taking the law into their hands, in violation
of Art. 286 of the Revised Penal Code. 7
Appellant Caisip argues that, not having used violence against the complaining
witness, he should be acquitted of the charge. In this connection, His Honor, the
Trial Judge, correctly observed:
... While it is true that the accused Caisip did not lay hands on the
complainant, unlike the accused Rojales and Villadelrey who
were the ones who used force against Gloria, and while the Court
is also inclined to discredit the claim of the complainant that
Felix Caisip drew a gun during the incident, it sufficiently
appears from the record that the motivation and inducement for
the coercion perpetrated on the complainant came from the
accused Caisip. It was his undisguised and particular purpose to
prevent Gloria from entering the land and working on the same.
He was the one who first approached Gloria with this objective
in mind, and tried to prevent her from weeding the land. He had
tried to stop Gloria from doing the same act even the day
previous to the present incident. It was Caisip who fetched the
policemen in order to accomplish his purpose of preventing
Gloria from weeding the land and making her leave the premises.
The policemen obeyed his bidding, and even when the said
policemen were already over-asserting their authority as peace
officers, Caisip simply stood by without attempting to stop their
abuses. He could be hardly said to have disapproved an act which
he himself induced and initiated. 8
In other words, there was community of purpose between the policemen and
Caisip, so that the latter is guilty of grave coercion, as a co-conspirator, apart from
being a principal by induction. 9
In the commission of the offense, the aggravating circumstances of abuse of
superior strength 10 and disregard of the respect due the offended party, by reason
of her sex, 11 were present, insofar as the three appellants herein are concerned. As
regards appellants Rojales and Villadelrey, there was the additional aggravating
circumstance of having taken advantage of their positions as members of the local
police force. Hence, the penalty of imprisonment meted out to appellants herein,
which is the minimum of the maximum prescribed in said Art. 286, 12 and the fine
imposed upon them, are in accordance with law.

WHEREFORE, the decision appealed from is hereby affirmed, with costs against
the defendants-appellants. It is so ordered.

(13) HEIRS OF LEOPOLDO VENCILAO, SR., represented by their

Administrator ELPIDIO VENCILAO, petitioner, vs. COURT OF
APPEALS, SPOUSES SABAS and RUPERTA GEPALAGO, and
DOMICIANO GEPALAGO, respondents.
[G.R. No. 123713. April 1, 1998]
BELLOSILLO, J.:
Between two (2) sets of claimants of real property - those claiming ownership
by acquisitive prescription, and those asserting ownership on the basis of a deed of
sale recorded in the certificate of title of the vendor as mortgagee and highest
bidder in a foreclosure sale - who has a better right?
On 12 February 1990 the heirs of Leopoldo Vencilao Sr., represented by their
Administrator Elpidio Vencilao, filed with the Regional Trial Court of Bohol a
complaint for quieting of title, recovery of possession and/or ownership,
accounting and damages with prayer for the issuance of writs of preliminary
prohibitory and mandatory injunction against the spouses Sabas and Ruperta
Gepalago.[1] The complaint was subsequently amended to include an action for
reconveyance and cancellation of title and to implead defendant Domiciano
Gepalago.[2]
The heirs of Leopoldo Vencilao Sr. alleged that they were the absolute
owners of a parcel of land situated in Cambansag, San Isidro, Bohol, with an area
of 3,625 square meters having inherited the same from their father, Leopoldo
Vencilao Sr., who during his lifetime was in peaceful, open, notorious and
uninterrupted possession and enjoyment of the property in the concept of owner,
declared the property for taxation purposes under Tax Declaration No. 37C6-344
and religiously paid the real estate taxes. He likewise had the property
consistently declared as his own in other documents, e.g., those relevant to the
1987 Comprehensive Agrarian Reform Program (CARP). After his death, his heirs
continued to possess and enjoy the property.
The Gepalago spouses, on the other hand, denied all the material allegations
in the complaint and claimed that they were the registered owners of a 5,970square meter property located in Candungao Calapo, San Isidro, Bohol, and
covered by TCT No. 16042, previously a portion of a 1,401,570 square-meter land
originally owned by a certain Pedro Luspo. The entire parcel of land was

mortgaged by Pedro Luspo to the Philippine National Bank (PNB) as

security for a
loan. Since Luspo failed to pay the obligation upon maturity the mortgage
was foreclosed. Thereafter PNB, the highest bidder in the foreclosure sale,
conveyed the whole property to fifty-six (56) vendees among whom were the
spouses Sabas and Ruperta Gepalago who acquired the 5,970 square-meter portion
thereof. Since then, they had been the owner and possessor of the land until they
donated the same in 1988 to their son Domiciano Gepalago.

the purchase, it was PNB which was the registered owner of the property. The title
was transferred to the bank after the foreclosure sale of the property mortgaged by
the previous registered owner, Pedro Luspo. Thus where the certificate of title is in
the name of the vendor when the land is sold, the vendee for value has the right to
rely on what appears on the certificate of title. The rule that all persons dealing
with property covered by Torrens Certificate of Title are not required to go beyond
what appears on the face of the title is well-settled.

The trial court appointed a commissioner to survey the litigated property and
determine the areas claimed by both parties. The commissioner reported that the
area claimed by the Vencilaos was included in the titled property of the
Gepalagos. On the basis of the commissioners report and the other pieces of
evidence presented by the parties, the trial court found the following: (a) The
property claimed by the Gepalagos consisted of 5,970 square meters, while that of
the Vencilaos covered an area of 22,401.58 square meters as indicated in the
survey plan submitted by Engr. Jesus H. Sarmiento, the court appointed
commissioner; (b) Insofar as the survey plan and report submitted by Engr.
Sarmiento were concerned, these indubitably established the fact that the Vencilaos
owned the excess area of 16,431.58 square meters which was clearly outside the
area claimed by the Gepalagos; (c) The lot in question had been titled to defendant
Sabas Gepalago and subsequently titled to his son, defendant Domiciano Gepalago,
under Transfer Certificate of Title No. 18621 by virtue of a deed of donation
executed on 25 October 1988 by Sabas Gepalago in favor of Domiciano
Gepalago; and, (d) As stated in the commissioners report, "If the titled lot of
Domiciano Gepalago is plotted in accordance with the technical description
appearing in the title, it will be relocated to more than 219 kilometers eastward
away from its supposed actual location. This amounts to its non-existence."[3]

Granting that plaintiff-appellees were possessors of the property for a long time,
they never raised objections to the transactions affecting the land. There was no
action made or any protest recorded with the Register of Deeds.

The trial court then ruled in favor of the Vencilaos holding that they had been
in possession, cultivation and enjoyment of the litigated property for more than
thirty (30) years and that the improvements therein were introduced by them long
before any title was ever issued to the Gepalagos. The lower court added that there
was ample evidence showing that the Gepalagos knew when they bought the
property from PNB that the land had long been possessed and enjoyed in the
concept of owners by the Vencilaos. Thus, while under ordinary circumstances a
certificate of title is indefeasible, it is not so when a person with prior knowledge
of the ownership and possession of the land by another obtains title to it.
The Gepalagos appealed the decision of the trial court. After due
consideration, the Court of Appeals reversed the trial court and declared the
Gepalagos owners of the disputed property Evidently, defendant-appellants spouses Gepalago were purchasers in good faith
and for value. They acquired their share in the property from the Philippine
National Bank (PNB) which was the registered owner. Even assuming they had
knowledge of the plaintiff-appellees' possession of the said property at the time of

Defendant-appellants claim of ownership was evidenced by certificates of title

issued in their names. A Torrens Certificate of Title is the best evidence of
ownership of a registered land. As against the allegations of plaintiff-appellees,
defendant-appellants are the ones entitled to the property. Defendant-appellants
ownership of the property was evidenced by a certificate of title while plaintiffappellees relied merely on tax declaration. Torrens title is generally a conclusive
evidence of the ownership of the land referred to therein. Defendant-appellants
acquired the land in a foreclosure sale and there was no evidence to show that
plaintiff-appellees were defrauded when the property was mortgaged and then
sold x x x x [4]
The motion for reconsideration by the Vencilaos having been denied [5] they
filed the instant petition for review.
In awarding the disputed land to petitioners, the trial court erroneously found
that petitioners had been in possession and enjoyment of the property for more than
thirty (30) years. It should be noted that the land in dispute is a registered land
placed under the operation of the Torrens system way back in 1959, or more than
thirty (30) years before petitioners instituted the present action in the court a
quo, and for which Original Certificate of Title No. 400 was issued. [6] The rule is
well-settled that prescription does not run against registered land. Thus, under Sec.
47 of PD 1529, otherwise known as the Property Registration Decree, it is
specifically provided that "no title to registered land in derogation of that of the
registered owner shall be acquired by prescription or adverse possession." A title,
once registered, cannot be defeated even by adverse, open and notorious
possession. The certificate of title issued is an absolute and indefeasible evidence
of ownership of the property in favor of the person whose name appears therein. It
is binding and conclusive upon the whole world.[7] All persons must take notice
and no one can plead ignorance of the registration.[8]
Neither can the tax declarations and tax receipts presented by petitioners as
evidence of ownership prevail over respondents certificate of title which, to
reiterate, is an incontrovertible proof of ownership. It should be stressed that tax
declarations and receipts do not by themselves conclusively prove title to the
land.[9] They only constitute positive and strong indication that the taxpayer

concerned has made a claim either to the title or to the possession of the property
for which taxes have been paid.[10] Stated differently, tax declarations and tax
receipts are only prima facie evidence of ownership or possession.
But assuming ex gratia argumenti that petitioners had indeed acquired the
land they were claiming by prescription, there likewise exists a serious doubt on
the precise identity of the disputed property. What petitioners claimed in their
complaint was a parcel of land located in Cambansag, San Isidro, Bohol, with an
area of 3,625 square meters.[11] This clearly differs from the piece of land
registered in the name of the Gepalagos, which is Lot No. A-73 of the Subdivision
Plan (LRC) Psd-60558, LRC Rec. No. H-4251, and located in Candungao Calapo,
San Isidro, Bohol, with an area of 5,970 square meters. [12] Even the commissioners
report failed to clarify the difference in the area and location of the property
claimed. In order that an action to recover ownership of real property may prosper,
the person who claims that he has a better right to it must prove not only his
ownership of the same but also satisfactorily prove the identity thereof. [13]
As a general rule, where the certificate of title is in the name of the vendor
when the land is sold, the vendee for value has the right to rely on what appears on
the face of the title.[14] He is under no obligation to look beyond the certificate and
investigate the title of the vendor appearing on the face of the certificate. By way
of exception, the vendee is required to make the necessary inquiries if there is
anything in the certificate of title which indicates any cloud or vice in the
ownership of the property.[15] Otherwise, his mere refusal to believe that such
defect exists, or his willful closing of his eyes to the possibility of the existence of
a defect in his vendors title, will not make him an innocent purchaser for value if it
afterwards develops that the title was in fact defective, and it appears that he had
such notice of the defect as would have led to its discovery had he acted with that
measure of precaution which may reasonably be required of a prudent man in a like
situation.[16]
Petitioners maintain that it is the exception, not the general rule, which should
be applied in this case. They argue that respondents had knowledge of prior
possession and enjoyment by petitioners when they purchased the property. Thus,
they were not innocent purchasers for value and could not invoke the
indefeasibility of their title.
We do not agree. The exception contemplates a situation wherein there
exists a flaw in the title of the vendor and the vendee has knowledge or at least
ought to have known of such flaw at the time he acquired the property, in which
case, he is not considered as an innocent purchaser for value. In the instant case,
we discern nothing from the records showing that the title of PNB, the vendor, was
flawed. Petitioners not only failed to substantiate their claim of acquisitive
prescription as basis of ownership but they also failed to allege, and much less
adduce, any evidence that there was a defect in the title of PNB. In the absence of
such evidence, the presumption leans towards the validity of the vendors title.

Therefore, inasmuch as there was no flaw in the title of PNB, private

respondents rightly believed that they could and did acquire likewise a flawless
title. Indeed, as a result of the deed of conveyance between PNB and private
respondents, there was transmission of ownership and the latter stepped into the
shoes of the former hence entitled to all the defenses available to PNB, including
those arising from the acquisition of the property in good faith and for value.
Finally, another consideration that militates heavily against the present
petition is the unusual silence of petitioners while the ownership of the disputed
land transferred from one person to another. There were at least three (3)
transactions on record involving the property: first, the contract of mortgage
between Luspo and PNB whereby the property was used as security for the loan
contracted by Luspo; second, the foreclosure of mortgage upon the failure of
Luspo to pay the loan and the subsequent sale of the property at public auction;
and, third, the sale of the property to fifty-six (56) vendees, among whom were the
Gepalago spouses. Each of these transactions was registered and a corresponding
transfer certificate issued in favor of the new owner. Yet in all these, petitioners
never instituted any action contesting the same nor registered any objection thereto;
instead, they remained silent. Thus, they are now estopped from denying the title
of the present owner. Having failed to assert their rights, if any, over the property
warrants the presumption that they have either abandoned them or declined to
assert them. Or, it could likewise be inferred therefrom that petitioners themselves
were not convinced in the validity of their claim.
WHEREFORE, the petition is DENIED. The Decision of the Court of
Appeals of 31 July 1995 as well as its Resolution of 14 December 1995 denying
reconsideration is AFFIRMED. Costs against petitioners.
SO ORDERED

(14)

HEIRS OF ANASTACIO FABELA, namely; Teodula Fabela

Paguidopon, Ricardo Fabela, Irenita Fabela Zea(d), Carolina Fabela
Arazo Donglas, and Ampiloquio Fabela, petitioners, vs. HON.
COURT OF APPEALS, HEIRS OF ROQUE NERI, namely: Roque
Neri, Jr., Filomeno, Sherlina, Emeterio, Antonio, Nelcar and Claudia,
all surnamed Neri, respondents.

[G.R. No. 142546. August 9, 2001]

GONZAGA-REYES, J.:
Petitioners, heirs of Anastacio Fabela, seek to annul the (1) decision of the
respondent Court of Appeals dated June 17, 1999 [1] which reversed and set aside
the appealed judgment by default of the Regional Trial Court of Misamis Oriental,
Branch 18, Cagayan De Oro City[2] in Civil Case No. 10459 declaring petitioners
as the rightful owners of subject lot 868 of the Pls. 293 of Balacanas, Nabacaan,

Villanueva, Misamis Oriental, and (2) its resolution dated February 18, [3] 2000
denying petitioners motion for reconsideration.
Sometime in December 1985, the heirs of Anastacio Fabela filed a complaint
for reconveyance and damages against the heirs of Roque Neri, Sr., involving the
subject lot 868, alleging among others, that plaintiffs late grandfather, Anastacio
Fabela, left two parcels of land in Nabacaan, Misamis Oriental which were later
identified as lot 868 with an area of 48,121 sq. meters and lot 870 consisting of
15,658 sq. meters which originally formed part of their grandfathers big tract of
land; that earlier in 1924, the parcel of land became the subject of litigation (Civil
Case No. 2891) in the then Court of First Instance of Misamis Oriental between
Carmelino Neri as plaintiff and Simeona Balhon and children heirs of Anastacio
Fabela as defendants and in connection therewith, the parties entered into an
agreement embodied in an Escritura de transaccion, a notarized document in a
Visayan dialect, which provided that Carmelino Neri, as vendee-a-retro had been
entrusted with the possession of a parcel of land for a period of fourteen (14) years
from the date of the instrument which was May 10, 1924 and upon the expiration
of said period, Carmelino Neri was to restore the possession of the property to
Simeona Balhon and her children-heirs of Anastacio Fabela, without need of
redemption; that sometime in 1977 or 1978, the Bureau of Lands conducted a
cadastral survey on this land when a road (Barrio Abacan road) was constructed
across the land dividing it into two separate lots which are now known as lot 868
and 870; that Roque Neri Sr. declared these two parcels of land in his name with
the Bureau of Lands and the Assessors office; that sometime in 1980, the
Philippine Veterans Industrial Development Corporation (PHIVIDEC), a
government entity buying substantially all real properties at Nabacaan, Villanueva,
Misamis Oriental, negotiated with Roque Neri Sr. for the purchase of lot 870,
however, the heirs of Anastacio Fabela, protested and consequently, Roque Neri
Sr. executed a waiver of rights over a portion of lot 870 stating that the 8,000 sq.
meter portion of lot 870 was erroneously included in his name, thus plaintiff heirs
of Anastacio Fabela eventually received the proceeds of the sale; that with respect
to lot 868, which was the lot in controversy, the late Roque Neri Sr. continued to
ignore plaintiffs demand for the return of the said lot. Plaintiffs prayed for
judgment declaring (1) the plan of lot 868, Pls-293 and the tax declarations issued
subsequent to and by virtue of aforesaid plan as null and void, (2) the heirs of
Anastacio Fabela as the lawful owners of lot 868, and (3) the estate of Roque Neri
Sr. liable for payment of damages.
Upon motion of plaintiffs heirs of Anastacio Fabela, defendants Sherlinda
Neri Jamisolamin, Emeterio Neri and Antonio Neri, were declared in default on
April 14, 1986, Filomena Neri on September 26, 1986 while Nelchar and Claudia
Neri on February 9, 1989, for their failure to file answer despite receipt of
summons and copy of the complaint. On the other hand, defendant Roque B. Neri,
Jr. had filed his answer with Counterclaim, but was likewise declared in default for
failure to appear at pre-trial on August 12, 1988.

The case was submitted for decision on the basis of plaintiffs evidence since
all the defendants were declared in default. After trial and hearing ex-parte, the
trial court rendered judgment in favor of plaintiffs, the dispositive portion reads: [4]
WHEREFORE, in view of the foregoing, judgment is rendered in favor of the
heirs of the late Anastacio Fabela including those named in the Complaint as
plaintiffs, as co-owners of lot 868, Pls-293 subject of the complaint and as
indicated in the plan (Exhibit D), as such entitled to the full enjoyment and
possession thereof. All other prayers or claims in the complaint are denied for lack
of merit.
In finding that the property belonged to the heirs of Anastacio Fabela, the trial
court concluded that in the Escritura de Transaccion, Carmelino Neri was
obliged to restore the subject property in or about 1938 to the heirs of Anastacio
Fabela; thus the fulfillment of that prestation of Carmelino Neri was presumed
under Section 5, par (ii), Rule 131, Rules of Court which enumerates among the
disputable presumptions that a trustee or other person whose duty it was to
convey real property to a particular person has actually conveyed it to him when
such presumption is necessary to perfect the title of such person or his successor-in
interest. It thus found that the Fabela heirs have been in possession of lot 868
since 1938 up to the present and as such were entitled to the full enjoyment and
possession as owners thereof.
On July 24, 1989, defendants heirs of Roque Neri Sr. filed a motion to set
aside orders of default and judgment which the trial court denied in an Order dated
August 22, 1989, on the grounds that the motion had been filed out of time (after
judgment) and that even if such motion would be treated as a motion to set aside
judgment/new trial under Section 1, Rule 37, Rules of Court, defendants
negligence was not excusable, much less a mistake.[5]
Heirs of Roque Neri Sr. appealed to the respondent Court of Appeals.
Considering, however, that the original records of the case from the trial court had
been lost or misplaced, the respondent court, pursuant to Rule 7 of the Revised
Internal Rules of the Court of Appeals (RIRCA), set the case for preliminary
conference on December 17, 1998, which was reset to January 26, 1999, and the
parties were informed of the loss of the original records of the case. Counsel for
defendants-appellants heirs of Roque Neri Sr. manifested her clients willingness
to submit the case for decision, even without the original records and asked
for thirty days to file memorandum, to which manifestation counsel for plaintiffsappellees heirs of Fabela interposed no objection. The respondent court granted
appellants prayer and gave plaintiffs-appellees twenty days to file their counter
memorandum and appellants ten (10) days to file reply memorandum, after which
the case was submitted for decision.[6]
On June 17, 1999, the respondent Court of Appeals rendered its assailed
decision reversing the trial courts judgment by default and dismissed the
complaint. It sustained the trial courts declaration of default against appellants

heirs of Roque Neri, Sr. but found that the judgment of default was contrary to the
evidence or the law. It concluded that petitioners had not successfully adduced the
required preponderance of evidence on their claim of absolute ownership over lot
868, the court stated:[7]
Art. 434 of the Civil Code states that In an action to recover, the property must
be identified, and the plaintiff must rely on the strength of his title and not on the
weakness of the defendants claims. The possessor of the property has the
presumption of title in his favor. Hence, any person who claims that he has a better
right to the property, as owner thereof, must prove (1) that he has a better title than
the defendant to the property, and (2) the identity of the property. The identity of
the land sought to be recovered may be established through the survey plan of the
property. Ownership may be proved by any evidence admissible in law, such as
titles and certificates, long possession and tax declarations or receipts.
Appellees claimed that Lots 868 and 870 are owned by their grandfather Anastacio
Fabela. The records of the Bureau of Lands, as well as the survey plan presented
in court, however, indicate Roque Neri, Sr. as the registered claimant of both
lots. The original of the Escritura de Transaccion on which appellees
relied heavily, was not presented in court. Its probative value, however, remains
doubtful since said document does not really prove appellees absolute ownership
of the subject property, nor was Lot 868 explicitly referred to as the property being
entrusted to the vendee-a-retro (Carmelino Neri).
On the other hand, the waiver of rights executed in 1980 by Roque Neri, Sr.
appears to refer only to a portion of Lot 870 (the parcel of land sold to
PHIVIDEC), and not to Lot 868. The old tax declaration presented by appellees
and which supposedly covered the two (2) lots did not specify the lot number, nor
was there any evidence presented that the original parcel of land actually consisted
of eighteen (18) hectares. Their allegation that both lots have already been
partitioned among the heirs of Anastacio Fabela was not substantiated by any
document or writing evidencing such extra-judicial partition. The fourteen (14)
years of the agreed temporary possession of the land by the defendants-appellants
had lapsed a long time ago, and this was prior to the 1971 public survey conducted
by the Bureau of Lands. It appears appellees did not exert diligent efforts to regain
possession or resume paying taxes on the land thereafter, prior to the purchase of
Lot 870 by PHIVIDEC. The fact that appellees were the ones paid by PHIVIDEC
for the portion of Lot 870 does not automatically lead to the conclusion that they
also absolutely own Lot 868. Most significant yet, is appellees failure to
adequately explain why they had not at all registered their claim over the property
with the Bureau of Lands during and after the public survey in the municipality.
Roque Neri, Sr., appellants predecessor-in-interest, meanwhile registered his
claim or interest on the land and declared it for taxation purposes. Appellees
claim of possession was through the lands caretaker and administrator, Delfin Sia,
but at the same time admitting that appellants similarly benefit from the fruits of

the land. Regarding tax declarations, it has been held that while tax declarations
and receipts are not conclusive evidence of ownership, yet, when coupled with
proof of actual possession, they are strong evidence of ownership. Thus, where it
was shown that plaintiff has never paid the land tax, while the defendant has
faithfully done so for many years, there being no explanation offered, it was held
that such payment of taxes should be taken into consideration in favor of
defendant. Being the exclusive possessors of the subject property who have
declared the same for tax purposes through the years, defendants-appellants are
entitled to such favorable presumption of ownership which so far had not been
overturned by plaintiffs-appellees.
The foregoing considered, it is clear that plaintiffs had not successfully proved by
the required preponderance of evidence their claim of absolute ownership of Lot
868. It is an invariable rule laid down in numerous decisions, that a person who
claims the ownership of property is in duty bound to clearly identify the land
claimed, in accordance with the titles on which he founds (sic) his right to
ownership, and he shall not be permitted to rely upon the defects in defendants
title. Failure to prove his right of ownership will bar an action to recover the
property; his right to recover must be founded on positive title or right, and not
merely on negative ones, such as the lack or insufficiency of title on the part of the
defendant. The possessor has a presumption of title, and unless the plaintiff proves
he has a better right, he cannot recover the property from the defendant.
Appellees motion for reconsideration was denied in a resolution dated
February 18, 2000.
Hence this petition for review on certiorari filed by the heirs of Anastacio
Fabela alleging that the respondent court (1) departed from the stringent
jurisprudence on default and appeals filed out of time and (2) erred in the
appreciation of the findings of fact of the lower court.
Anent the first assigned error, petitioners fault the respondent court for
reversing the decision of the trial court despite its complete agreement with the
findings of the trial court that respondents were properly declared in default. They
contend that the reasons cited by private respondents for their failure to file answer
and to appear at the pre-trial were not meritorious and that private respondents
affidavit attached to the motion for reconsideration did not declare how Roque
Neri Sr. acquired lot 868.
We are not persuaded.
Section 1, Rule 18[8] of the old Rules of Court which is the law applicable in
the instant case provides:
Judgment by default- If the defendant fails to answer within the time specified in
these rules, the court shall, upon motion of the plaintiff and proof of such failure,
declare the defendant in default. Thereupon, the court shall proceed to receive the

plaintiffs evidence and render judgment granting him such relief as the complaint
and the facts proven may warrant. This provision applies where no answer is made
to a counterclaim, cross-claim, or third-party complaint within the period provided
in this rule.
Favorable relief can be granted only after the court has ascertained that the
evidence offered and the facts proven by the presenting party, petitioners in this
case, warrant the grant of the same.[9] In this sense, the law gives the defaulting
parties some measure of protection because plaintiffs, despite the default of
defendants, are still required to substantiate their allegations in the complaint. The
judgment of default against defendants who have not appeared or filed their
answers does not imply a waiver of all their rights, except their right to be heard
and to present evidence to support their allegations.[10] Otherwise, it would be
meaningless to require presentation of evidence if every time the other party is
declared in default, a decision would automatically be rendered in favor of the nondefaulting party and exactly according to the tenor of his prayer. [11] Since the trial
court rendered a judgment of default against private respondents, the latter took the
appropriate remedy which is an ordinary appeal under Section 2 Rule 41, par
(3)[12], of the Rules of Court providing in part as follow:
A party who has been declared in default may likewise appeal from the judgment
rendered against him as contrary to the evidence or to the law, even if no petition
for relief to set aside the order of default had been presented by him in accordance
with Rule 38.
Thus, notwithstanding the respondent courts complete agreement with the trial
courts findings that all the respondents were properly declared in default, it found
that the judgment by default was contrary to the evidence or the law and thus
reversed the trial court decision.
Anent the second error, petitioners claim that the respondent court erred in
concluding that petitioners predecessor Roque Neri, Sr. appeared as the registered
claimant of lot 868 and 870 which was contrary to the findings of the trial court
that the plan showing lot 868 (Exh. D-2) and lot 870 (Exh. D-1) although
appearing to have been approved by Jose F. Gatus, OIC, Regional Director, on July
17, 1986 does not on its face indicate for whom it had been approved; that Neri
Sr. failed to produce evidence of ownership on how he acquired the subject Lot
No. 868. They further claim that the execution in their favor by Roque Neri Sr.
of a waiver of right over lot 870 where the former acknowledged the erroneous
inclusion of the lot in his name was a strong admission against interest on Neris
part. They also contend that the respondent court erred in doubting the probative
value of the Escritura de Transaccion only for the reason that the original was
not presented in court.
These arguments essentially raise factual issues which normally are not
reviewable by this Court in a petition under Rule 45 which is generally limited
only to question of law.[13] While certain exceptions to this rule are recognized such

as when the factual findings of the respondent Court of Appeals are at variance
with those of the Regional Trial Court, the Court does not, in all cases of
disagreement of facts between these two courts, automatically delve into the record
to determine the facts for itself.[14]Admittedly, there have been instances when this
Court made independent findings of fact on the points that the trial court and the
appellate court disagreed but we did not do so as a matter of course. When the
dispute between the two courts are merely on probative value, we limit our review
of the evidence ascertaining if the findings of the Court of Appeals are supported
by the record. And, so long as the findings of the said court are consistent with, or
not palpably contrary to, the evidence on record, we decline to make a review on
the probative value of the evidence.[15] In the instant case, We find no cogent
reason to disturb the factual findings of the respondent court and its conclusion that
petitioners failed to establish their case by preponderance of evidence.
The invariable applicable rule is to the effect that in order to maintain an
action for recovery of ownership, the person who claims that he has a better right
to the property must prove not only his ownership of the property claimed but also
the identity thereof.[16] The party who desires to recover must fix the identity of the
land claimed by describing the location, area and boundaries thereof. [17]
In the instant case, petitioners based their claim of ownership on the 1924
Escritura de Transaccion, the original copy of which was not presented in the trial
court, while the photocopy was also lost when the original records were elevated to
the respondent court. This was the only piece of evidence that would establish
petitioners ownership and the identity of subject lot 868. In ruling for petitioners
heirs of Anastacio Fabela as the absolute owners of lot 868, the trial court found
that in the Escritura, it appears that the portion which is now identified as lot 868
had been entrusted to the possession of Carmelino Neri, as vendee-a retro, for a
period of 14 years from the date of the instrument which was May 10, 1924 and
upon the expiration of which said Carmelino Neri was to restore the possession of
the property to Simeona Balhon and her children heirs of Anastacio Fabela, namely
Petra Buenaventura, Julio and Pedro, all surnamed Fabela, without need of
redemption, and that fulfillment of Neris obligation was presumed to have
taken place. We note, however, that nowhere in the trial courts narration of facts
were the boundaries of the parcel of land indicated with particularity, nor the parcel
of land referring to as lot 868. What really defines a piece of land is not the area
mentioned in its description, but the boundaries therein laid down, as enclosing the
land and indicating its limits.[18]
Moreover, the testimony of petitioner heir Teodula Fabela Paguidopon which
was quoted in part in petitioners own memorandum[19] did not also clearly
establish the relation of the said Escritura de Transaccion to lot 868, to wit:
Q: Now, that bigger lot has the cadastral lot number before?
A:

No because that was not yet surveyed.

Q:

Do you know who owns this lot?

A:

Our grandfather Anastacio Fabela.

Q:

Now while it was still in the hands of Anastacio Fabela while he was still
alive, do you know what was the total area of the mother lot?

A:

Yes, it was estimated by our father and we estimated it to be 18 hectares.

Q:

Do you have evidence to prove that it was indeed 18 hectares?

A:

Yes, maam.

Q:

I am showing to you an old document but only a xerox copy thereof

entitled escritura de transaccion notarized by Uldarico Akut in the year
1924, kindly take a look and see where is the 18 hectares which you
have just mentioned?

A:

This one.
xxxxxxx

ATTY. LLEGO:

specific identity of the lot which petitioners sought to recover. Moreover, even in
the petitioners complaint filed before the trial court, there was no allegation of the
metes and bounds of the subject lot, the complaint reads:
3) a. That the grandfather of plaintiffs-the late Anastacio Fabela, had left among
others, the following property, to wit:
a) Lot 870
Area:15,658 sq. m.
Location: Nabacaan, Misamis Oriental
b) Lot 868
Area: 48, 121 sq.m.
Location: Nabacaan, Misamis Oriental
b. That the above described parcels of land are adjacent to each other as shown by
a photocopy of the sketch plan from the Bureau of Lands hereto enclosed and
marked as Annex B;

x x x We will have this marked as our Exhibits A, A-1 to A-3.

xxxxxxx
(TSN of 2/9/89 pages 16 to 18 (topmost)
COURT:
Plaintiff is ordered to prepare the English translation of that document.

c. That these two parcels since time immemorial used to be one big parcel of land,
until in 1977 or 1978, when a government cadastral survey in Villanueva, Misamis
Oriental, was undertaken by the Bureau of Lands, wherein a road was provided and
made to appear across the big parcel of land, causing it to be divided physically
and for which the government surveyors assigned two lots numbers for what used
to be one big parcel of land, thus the appearance of Lot 870 and Lot 868; This once
one big chunk of land never had a cadastral number in the past;

xxxxxxx
(TSN of 2/9/89 page 18)
ATTY. LLEGO: (continuing)
Q:

You have pointed this portion as your basis for saying that the area is 18
hectares. Now kindly read this paragraph on the description of the land
for purposes of record.
(witness is ready (sic)
Which, we pray that that portion being read into the record by witness
be marked as our Exhibit A-4.

Notably, the total area of lots 868 and 870 would only be about 63,679 sq. meters
or about six (6) hectares which fails to correspond to the eighteen (18) hectare
parcel of land allegedly owned by the late Anastacio Fabela which was the subject
of the Escritura de Transaccion and testified to by Teodula Fabela
Paguidopon. Petitioners failed to identify the land with that degree of certainty
required to support their affirmative allegation of ownership.
Moreover, the respondent court found, and we agree, that the waiver of
rights executed in 1980 by Roque Neri Sr., in favor of petitioners referred only to a
portion of lot 870 and not to lot 868. Thus such waiver which petitioners
capitalized on as an admission against Neris interest did not in any way support
petitioners claim of ownership of lot 868. Said waiver reads:[20]

COURT:
Mark it. (page 18 bottom to page 19 middle portion of the page).
Unfortunately, the description of the eighteen (18) hectare land which should had
been read and incorporated into the transcript for purposes of record, was omitted
in the quoted portion, to establish the exact location, area and boundary of the 18
hectare lot in relation to lot 868. The omission has created serious doubts as to the

ACKNOWLEDGMENT OF ADJUDICATION
AND QUITCLAIM
KNOW ALL MEN BY THESE PRESENTS:

That I, Roque Neri, Sr., of legal age, widower, Filipino, with residence and postal
address
at
Villanueva,
Misamis
Oriental, Philippines,
do
hereby
ACKNOWLEDGE AND CONFIRM that the certain portion of a parcel of land
located at Balacanas, Villanueva, Misamis Oriental under Lot No. 870 of Pls. 923
of Villanueva Public Land Subdivision containing a total area of SIXTEEN
THOUSAND SQUARE METERS (16,0000 sq. m.) which portion is more
particularly described as follows:
North - Roque Neri, Sr.
East - Nabacaan Road
West - Tayum Creek
South - Lot 869
containing an area of EIGHT THOUSAND SQUARE METERS (8,000 sq. m.) is
hereby adjudicated in favor of the Heirs of Anastacio Fabela.
That the above described portion of a parcel of land actually belongs and owned by
said Heirs of Anastacio Fabela.
That the above described portion of land was erroneously included in the land
survey conducted by the Bureau of Lands in my name.
That I hereby quitclaim and renounce whatever interest, rights and participation I
have over the described portion of real property of which the Heirs of Anastacio
Fabela were the lawful owners.
In witness whereof, I have hereunto set my hand this 18th day of August 1980 in
Villanueva, Misamis Oriental, Philippines.
S
G
D.
I
L
L
E
GI
B
L
E

T/
R
O
Q
U
E
N
E
RI
,
S
R.

A simple reading of the instrument would readily show that only 8,000 sq.
meters of the entire 16,000 sq. meters included in lot 870 was adjudicated in
favor of the heirs of Anastacio Fabela as belonging to them. In fact, petitioners in
their memorandum admitted that only 8,000 sq. meters was given to them and yet
they did not take any positive action to assert their ownership of the entire lot 870.
Petitioners have accordingly no sound basis to claim lot 868 by virtue of such
instrument. As the appellate court succinctly stated, the fact that appellees were
the ones paid by PHIVIDEC for the portion of lot 870 does not automatically lead
to the conclusion that they also absolutely own lot 868. Most significantly, is
appellees failure to adequately explain why they had not at all registered their
claim over the property with the Bureau of Lands during and after the public
survey in the municipality. Finally, petitioners also failed to allege much less
establish that they are in possession of the subject lot.
On the other hand, the respondent court found, and this finding was not
refuted, that petitioners own witness, Norberto Dumat-ol, a representative of the
Bureau of Lands, testified that when a cadastral survey was conducted in 1971, the
registered claimant of lot 868 based on their official record was Roque
Neri Sr. Petitioners allegation that Neri Sr., committed fraud in the registration
in his name of these two (2) parcels of lot was not substantiated. The survey plan
for lot 868 was approved for Roque Neri Sr. and he had also declared lot 868 for
taxation purposes which was admitted by petitioners as their complaint prayed for
the annulment of the plan and tax declaration. Although a tax declaration is not
considered as conclusive proof of ownership the same is admissible in evidence to
show the nature of the possession of the claimant of the property for which taxes
have been paid. We accordingly find well-taken the respondent courts conclusion
as follows:
Thus, where it was shown that plaintiff has never paid the land tax, while the
defendant has faithfully done so for many years, there being no explanation
offered, it was held that such payment of taxes should be taken into consideration
in favor of defendant. Being the exclusive possessors of the subject property who
have declared the same for tax purposes through the years, defendants-appellants

are entitled to such favorable presumption of ownership which so far had not been
overturned by plaintiffs-appellees.
In civil cases, the burden of proof is on the plaintiff to establish his case by
preponderance of evidence.[21] If he claims a right granted or created by law, he
must prove his claim by competent evidence. He must rely on the strength of his
own evidence and not upon the weakness of that of his opponent.[22] When the
record does not show that the land which is the subject matter of the action for
recovery of ownership has been exactly determined, such action cannot prosper,
inasmuch as the petitioners ownership rights in the land claimed do not appear
satisfactorily and conclusively proven at the trial.[23]
WHEREFORE, the petition is DENIED and the decision of the respondent
Court of Appeals is AFFIRMED.
SO ORDERED.

(15) HEIRS OF JUAN OCLARIT, namely: FRANCISCA VDA. DE

OCLARIT, SOFRONIO OCLARIT, BELACIO OCLARIT, RUFINO
OCLARIT, JUANA OCLARIT DE MACALOS, assisted by her husband
HILARIO MACALOS, FELISA OCLARIT DE LACRE, assisted by her
husband, COSME LACRE; HEIRS OF PAULA OCLARIT DE OCANG,
namely: PETRA OCANG and ALFREDO OCANG, ANGELA OCLARIT DE
OCANG, assisted by her husband, CARLOS OCANG, EPIFANIA OCLARIT
DE ALMODOBAL, assisted by her husband, URBANO ALMODOBAL,
CRESENCIA OCLARIT DE IVARRETA, assisted by her husband,
LUCRESIO IVARRETA, NARCISA OCLARIT DE CAGAS, assisted by her
husband, JUAN CAGAS, and JUSTO OCLARIT, petitioners, vs. COURT OF
APPEALS and ZACARIAS BALASABAS, respondents.
[G.R. No. 96644 June 17, 1994]
BIDIN, J.:
Petitioners seek the review on certiorari of the decision of the Court of Appeals
promulgated on September 28, 1990, affirming with modification the decision of
the Regional Trial Court of Bohol, Branch 2, Tagbilaran City, dismissing their
complaint for quieting of title with damages and declaring the defendant (private
respondent herein) the owner of the parcels of land subjects of controversy.

In 1953, the late Juan Oclarit, petitioners predecessor-in-interest, allegedly

purchased from Martin Macalos a parcel of unregistered land located in Antipolo,
Garcia-Hernandez, Bohol, with no permanent landmarks or boundaries in
consideration of the sum of one hundred (P100.00) pesos. The deed of sale simply
described the property as bounded on the north and east by the property of
Herminigildo Baja, on the south by Mariano Gales and on the west by a brook.
In 1956, Oclarit bought five more parcels of land located in Antipolo and Ulbujan,
also in Garcia-Hernandez, Bohol, from Dalmacio Gales in consideration of the sum
of six hundred (P600.00) pesos. Parcel IV thereof is described as follows:
A parcel of an irrigated rice and coconut lands, bounded on the
NORTH, by the land of Leon Macalos; EAST, by the land of
Mariano Gales; SOUTH, by the land of Pablo Gales, and on the
WEST, by the land of Saturnino Gales; containing an area of 9
ares and 28 centares, more or less, without visible landmarks of
the boundaries of the same, covered by Tax Declaration No. R19915 now transferred and declared under the name of the herein
VENDEE, JUAN OCLARIT, with the total assessed value of
P30.00.
In 1975, the heirs of Oclarit filed an action for the quieting of title and damages
against respondent Balasabas before the then Court of First Instance of Bohol,
docketed as Civil Case No. 3103. The complaint alleged that in January 1969,
private respondent entered the properties subject of the action. Failing to work on
the area planted to palay, private respondent climbed the coconut trees, replaced
the "J.O." markings on the trees with "F.G.", representing Felipa Gales, his mother,
and caused to be recorded in the cadastral survey of the land the name of Felipa
Gales as claimant against Juan Oclarit. The heirs of Oclarit considered the acts of
private respondent as having cast a cloud of doubt over their title to the property
and therefore deprived them of the enjoyment of the fruits of the coconut trees.
Petitioners further alleged that the late Juan Oclarit, from the time of the
acquisition of said properties, had exercised dominion and ownership thereon
openly, peacefully, adversely and uninterruptedly. It was also claimed that the
deceased planted coconut trees and other crops on the property, enjoyed their
produce and paid the realty taxes on the land which was continued by his heirs
after his death.
In his answer, respondent Balasabas claims to have actually and lawfully possessed
the disputed parcels of land "since time immemorial". According to respondent, the
first parcel of land was owned by his mother, Felipa Gales, by virtue of inheritance,
and declared in her name under Tax Declaration No. D-1120; while the second
parcel of land was acquired by him from his own mother as evidenced by a deed of
absolute sale executed on March 20, 1963 and which he declared in his name under
Tax Declaration No. D-1006. In addition, respondent likewise alleged possession
of the parcels of land openly, peacefully, adversely and continuously without

disturbance from any party until he was molested by the heirs of Oclarit. It was
contended that Oclarit himself surreptitiously declared these lands for taxation
purposes in his own name.
In the course of the proceedings, the trial court appointed Teotimo Borja, Deputy
Provincial Assessor of Bohol, as commissioner for the purpose of determining
whether the lands described in the complaint and covered by Tax Declarations Nos.
D-13935 and D-13926 overlapped with any of the lands described in the
defendants affirmative and special defenses and covered by Tax Declarations Nos.
D-1120 and D-1006. In 1978, the court-appointed commissioner conducted a
relocation survey and an ocular inspection of the properties in controversy in the
presence of the heirs of Oclarit, their counsel, respondent Balasabas, a policeman,
and adjoining owners Procopio Oclarit, Galicana J. Pagaran, Maxima Macula,
Felipe Macula and some disinterested persons. In his report dated May 25, 1979,
the commissioner made the following findings and observations:
When plaintiffs were asked the extent of their land under the tax
declaration No. D-13935, they pointed to the undersigned that
figure in Annex A which is embraced from corners 1, 2, 3, 4, 5,
6, 7, 8, 9, 10, 11, 12, 13, 14 back to 1 by a red ball pen broken
lines. The area of this is approximately 3,639 square meters
(.3639 ha.). The area of the tax declaration No. D-13935 is .0928
ha. This Annex A, which is made an integral part of this report
has been traced from the file of the Bureau of Lands Office in
Jagna, Bohol. The personnel in that office informed the
undersigned that no Lot numbers have as yet been assigned and
that the traverse is not yet computed because it will be done by
IBM. This land is partly cocal (on the northeastern portion) and
partly riceland. There are thirty (30) coconut trees mostly of
which are 40 to 50 years old;
Defendant Zacarias Balasabas pointed the extent of his claim
under the tax declaration No. D-1120 as that area in the cadastral
survey. In other words he refer(red) to his claims as that figure in
Annex A embraced by corners 1, a, 2, 3, 4, b, c, d, e, 11, 12, f,
13, 14 to 1 and shaded by pencil diagonal lines and which is
titled HRS. OF JUAN OCLARIT VS. FELIPA GALES in the
cadastral survey. This contains an area of 1,420 square meters
(.1420 ha.), more or less. The tax declaration No. D-1120 has an
area of .44010 ha.;
Plaintiffs and defendants both claimed the same parcel of land on
the western portion of Annex A and which is titled
FRANCISCA MACALOS VS. ZACARIAS BALASABAS in
the cadastral survey as that which is represented by their tax
declaration Nos. D-13926 and D-1006, respectively. This parcel

which is embraced by corners A, B, C, D, E, F, G, H, I, J, K to A

contains an area of 3,098 square meters (.3098 ha.), more or less.
The tax declaration No. D-13926 in the name of Juan Oclarit
contains an area of .0204 ha. and the tax declaration No. D-1006
of defendant has an area of .8147 ha. There are approximately
200 coconut trees many of which are still non-bearing. The
contour of this lot is generally hilly. (Rollo, p. 39)
In its decision, the lower court made the following findings: the heirs of Oclarit and
Balasabas are laying claim over the same parcels of land; Dalmacio Gales, who
sold to Oclarit the parcel of land covered by Tax Declaration No. 13935, was an
uncle of Balasabas mother, Felipa Gales; Martin Macalos, the vendor of the land
covered by Tax Declaration No. 13926, was the cousin of Balasabas grandmother,
Guillerma Gales; the area being claimed by the heirs of Oclarit is, per
commissioners report, approximately 3,639 square meters (.3639 ha.) while Tax
Declaration No. 13935 shows that it is only 928 square meters (.0928 ha.) and the
area of the second parcel per commissioners report is approximately 3,098 square
meters (.3098 ha.) while that reflected in Tax Declaration No. 13926 is only 204
square meters (.0204 ha.).
From these findings, the lower court expressed its surprise as to the size of the area
being claimed by the heirs of Oclarit according to the commissioners report in
comparison with the areas shown in Tax Declarations Nos. 13935 and 13926.
While recognizing that areas stated in tax declarations are not "approximately
exact," the lower court nonetheless considered the discrepancies between the actual
areas being claimed and those shown in the tax declarations as "too obvious to be
taken with excuse." Moreover, it doubted the credibility of petitioners for their
failure to explain why the adjoining owners named in their claim are different from
the adjoining owners found by the commissioner. Furthermore, if petitioners were
indeed the real owners of the two parcels of land, they would have taken steps for
the correction of the smaller areas stated in the tax declarations. Concluding that
petitioners were claiming much bigger parcels than what their evidence can support
under justifiable circumstances, the trial court thus disposed of the case as follows:
WHEREFORE, finding a preponderance of evidence in favor of
the defendant, judgment is hereby rendered:
1 Dismissing the complaint;
2 Declaring the defendant as the owner of the lots covered by
Tax Declarations Nos. D-1120 and D-1006 with area of .4010
hectare and .8147 hectare, respectively and ordering the plaintiffs
to recognize such ownership by the defendant; and

3 Ordering the plaintiffs to pay the defendant attorneys fee of

P500.00 and litigation expenses of P400.00 and to pay the costs
of the proceedings.
SO ORDERED.
On appeal, respondent court ruled that petitioners failed to prove either legal or
equitable title to the two parcels of land which are necessary in an action for
quieting of title. Petitioners claim of ownership was based principally on tax
declarations which, however, are not conclusive evidence of ownership.
However, the Court of Appeals disagreed with the trial courts declaration that
private respondent is the owner of the two parcels of land and such ownership
should be recognized by petitioners. It considered such conclusion of the lower
court as "bereft of any convincing evidence" because tax receipts, tax declarations
and survey plans are not conclusive and indisputable bases of ownership.
Accordingly, it disposed of the appeal in the following tenor:
WHEREFORE, in view of the foregoing, the decision of the
Court a quo dismissing the plaintiffs complaint is hereby
AFFIRMED. The portions thereof declaring the defendant as the
owner of the lots covered by Tax Declarations Nos. D-1120 and
D-1006, respectively, and ordering the plaintiffs to pay the
defendant attorneys fee of P=500.00, litigation expenses of
P=400.00 and costs of the proceedings are hereby REVERSED
and SET ASIDE. Without pronouncement as to cost.
SO ORDERED. (Rollo, p. 40)
Their motion for reconsideration of said decision having been denied, the heirs of
Oclarit instituted the instant petition. Private respondent did not appeal the above
disposition.
The petition is moored primarily on the following contentions: (a) the filing of
Civil Case No. 3103 was the only legal remedy available to petitioners against the
"malicious and unwarranted actuations" of private respondent; (b) Oclarits
undisturbed claim of ownership of the two parcels of land which he acquired in
1953 and 1956, had spanned more than ten years until private respondent disturbed
it in 1969; (c) the two parcels of land mentioned by private respondent in his
answer are "foreign and alien" to the two parcels which Oclarit bought from
Dalmacio Gales and Martin Macalos and because these vendors had been in
possession of the property "from time immemorial", the "waters of prescription
have set in"; (d) the Court of Appeals failed to appreciate the real worth of Exhibits
"N" to "P" otherwise it would have noted that petitioners "clear ownership over
said two (2) parcels of land in litigation as the description found therein jibed

materially" with the averments in the complaint, and (e) the lower court, in a
decision in another case, cited (Ramos v. Court of Appeals 112 SCRA 543)
holding that tax receipts are strong evidence of possession as no one in his right
mind would pay realty taxes year after year for property not in his actual
possession.
From the above submissions, it is at once apparent that petitioners assail the factual
findings of both courts below. However, there is no basis for considering this case
as an exception to the general rule that the factual findings of the Court of Appeals
are binding on and are not reviewable by this Court (Oporto v. Court of Appeals,
208 SCRA 878 [1992]). A careful review of the decisions below do not show that
both courts overlooked essential facts which, if considered, would have changed
the outcome of the case. Moreover, the matter of giving credence to evidence
presented is best addressed by the trial judge who is in a better position than the
appellate court to appreciate the weight and evidentiary value of the testimonies of
witnesses who have appeared before him (Sapu-an v. Court of Appeals, 214 SCRA
701 [1992]). In civil cases, the lower court must lean towards a party who
successfully presents preponderance of evidence in his favor.
It is thus too late in the day for petitioners to claim that the parcels of land which
Oclarit had bought are "alien" or different from the parcels which private
respondent had allegedly acquired from his mother both by inheritance and by
purchase. This is clearly a factual issue which is beyond the ambit of this Courts
jurisdiction.
It was precisely for the purpose of pointing out with particularity the parcels of
land involved that the lower court appointed a commissioner whose findings may
be adopted in toto by the trial court (See: Apurillo v. Garciano, 28 SCRA 1054).
Had the petitioners been in possession of solid evidence that the parcels of land
they are claiming are "alien" or "foreign" to those declared by private respondent
as his, they should have questioned the commissioners report which was based on
the relocation survey and ocular inspection which were conducted in their
presence. Moreover, petitioners claim that their property is different from those of
private respondents is indeed antithetical to their filing of the complaint for
quieting of title there would not have been any basis for claiming that private
respondent cast a cloud of doubt to their title over their two parcels of land.
More, the deed of sale wherein Martin Macalos conveyed to Oclarit a parcel of
land did not even indicate with particularity the area of the land covered thereby.
This explains why they indiscriminately pointed at boundaries which are even
beyond what could have been bought by Oclarit. Although it is true that what
defines a piece of land is not the area mentioned in its description but the
boundaries therein laid down (Vda. de Tan v. Intermediate Appellate Court, 213
SCRA 95 [1992]), in controversial cases as in this case where there appears to be
an overlapping of boundaries, the actual size of the property gains importance.
Thus, the lower court correctly stressed that it would have done petitioners some

good had they correctly specified even in their tax declarations the areas of the land
they were claiming. It is well settled that anyone who claims that he has a better
right to the property, must prove both ownership and identity of the said property
(Beo v. Court of Appeals, 200 SCRA 574 [1991], citing Flores v. Intermediate
Appellate Court, 178 SCRA 717 [1989]). An area delimited by boundaries properly
identifies a parcel of land.
With regard to tax declarations as bases for claim of ownership, petitioners
capitalize on what was obviously anobiter in (Ramos v. Court of Appeals) (supra)
that no one in his right mind would be continuously paying taxes for property that
is not in his actual possession. On the contrary, any person who claims ownership
by virtue of tax declarations must also prove he is in actual possession of the
property. Thus, proof that the property involved had been declared for taxation
purposes from 1908 to 1945, did not constitute proof of possession, nor is it proof
of ownership in the absence of the claimants actual possession of said property
(De Luna v. Court of Appeals, 212 SCRA 276 [1992]).
In the same vein, tax receipts and declarations of ownership for taxation purposes
become strong evidence of ownership acquired by prescription when accompanied
by proof of actual possession of the property (Tabuena v. Court of Appeals, 196
SCRA 650 [1991]; Director of Lands v. Intermediate Appellate Court, 209 SCRA
214 [1992]).
As earlier stated, private respondent did not appeal from the adverse decision of the
appellate court. Yet, respondent ventures to implore this Court to nullify and
reverse the decretal portion of the decision subject of this petition and to declare
him the owner of the lots covered by his Tax Declarations Nos. D-1120 and D1006. This cannot be legally done.
Settled is the rule that a party is barred from assailing the correctness of a judgment
not appealed from by him. An appellee may only make counter statement of errors
to sustain the judgment on other grounds but not to adduce arguments which would
otherwise modify or reverse the same, for in such case, an appeal must have been
seasonably filed (Itogon-Suyoc Mines v. NLRC, 117 SCRA 523 [1982] and cases
cited therein). There being no appeal taken by private respondent from the adverse
judgment of respondent court, the decision has become final as against him and can
no longer be reviewed, much less reversed, by this Court. That respondent may
have been in possession of the disputed properties since 1965 is of no moment.
This Court is not a cadastral court before which respondent can seek confirmation
of title.
WHEREFORE, the petition is hereby DENIED for lack of merit.
SO ORDERED.

(16) DOMINICA CUTANDA, SEBASTIAN CUTANDA, JUANARIO

CUTANDA, SOTERO CUTANDA, CRISPIN CUTANDA, FLORENCIO
CUTANDA, TRINIDAD CUTANDA, NICANOR CUTANDA, GABINA
CUTANDA FLORES, and CLAUDIO CUTANDA, petitioners, vs. HEIRS OF
ROBERTO CUTANDA, namely, GERVACIO CUTANDA, SOPRONIO C.
CUTANDA, JORGE CUTANDA, and CRISPIN G. AVENIDO and COURT
OF APPEALS, respondents.
[G.R. No. 109215. July 11, 2000]
MENDOZA, J.:
This is a petition for review of the decision of the Court of Appeals dated March
31, 1992 in C.A.-G.R. CV No. 24546, insofar as it reverses the decision of the
Regional Trial Court, Branch 1, Tagbilaran City declaring petitioners as the true
and lawful owners of the subject lands.
The background of this case is as follows:
On August 4, 1988, private respondents brought an action for recovery of
possession, accounting and damages against petitioners in the Regional Trial Court
of Tagbilaran City. They alleged[1] that in the 1900s, their grandfather, Roberto
Cutanda, owned two parcels of land in Bohol. One had an area of 31.0929 hectares
and was covered by Tax Declaration No. 1246, [2] while the other was 7.0925
hectares and was covered by Tax Declaration No. 1247. [3]Both tax declarations
were in Roberto Cutandas name. Upon Roberto Cutandas death, these lands were
inherited by his children, namely: Doque, Diego, Pedro, Andres, and Anastacia, all
surnamed Cutanda. Except for Doque who stayed in Bohol and administered the
lands, all of Roberto Cutandas children established residence in Leyte. In 1987,
they returned to Bohol to personally work the inherited lands. Their plan, however,
was frustrated as petitioners, who were occupying the lands, refused to leave.
Private respondent thus prayed that each be declared owner of 1/5 of the subject
real properties and that petitioners be ordered to return to them said properties.
In due time, petitioners filed their answers. One was prepared by the Citizens
Legal Assistance Office, while the other one, which was the one actually
considered during the trial, was prepared by the Bureau of Legal Assistance of the
Department of Agrarian Reform. Contending that private respondents had no cause
of action, petitioners denied that private respondents predecessor-in-interest,
Roberto Cutanda, was the original owner of the lands in question. Instead, they
claimed that the owner was their uncle and predecessor-in-interest, Anastacio
Cutanda. It was alleged that Anastacio Cutanda died without children and that the
real properties in question were inherited by his brothers and sisters whose children
are the present petitioners. Claiming a better right to possess the subject properties,
petitioners alleged that while they occupied the shares which their parents inherited

from Anastacio Cutanda, some of them also worked as tenants cultivating the lands
of their co-petitioners. They filed a counterclaim in which they sought the recovery
of damages from private respondents.[4]
On September 28, 1989, the trial court rendered its decision[5] declaring petitioners
to have acquired the ownership of the subject properties through prescription and
dismissing private respondents' complaint. The court ordered private respondents
to vacate the properties and remove whatever improvements they may have made,
to restore petitioners in possession of the lands, and to cease from laying further
adverse claims over the lands. As basis for its ruling, the trial court made the
following findings:
In the assessment of the evidence of the parties the court finds
the evidence of the defendants preponderant and had established
their case against plaintiffs, among the most outstanding facts are
as follows:
1. Even plaintiffs document (Exhibit "C")
visayan written testament/statement of Quirico
Becauan dated February 25, 1935, it admitted
that before 1935 Anastacio Cutanda had been
in the possession of the land in question;
2. Gervacio Cutanda admitted that the
defendants thru their predecessor-in-interest
Anastacio Cutanda had squatted on the land
since 1933 and since then because his father
Roberto Cutanda, the alleged original owner of
the land had transferred residence in Leyte, the
land was with the defendants. Although, he
came back in 1949, he and Sofronio only
claimed back the land in 1987;
3. That, it is beyond doubt that the defendants
have long been in possession and cultivation of
the land as owners whose possession if tacked
with Anastacio Cutanda since 1933 up to the
present has been for more than 54 years;
4. That, Tax Declaration No. 10434 of
Anastacio Cutanda from whom the defendants
have inherited the land is dated as far back as
1933 and continuously until the present when
different tax declarations were issued in the
names of the defendants;

5. That, defendants continuous possession,

occupation and cultivation of the land is not
rebutted, refuted by convincing, sufficient
evidence by the plaintiffs whose claim is
highly nebulous and unsatisfactory;
6. That, even assuming the plaintiffs have the
right over the land in question, the fact that
they have slept [on] their right since 1933 up to
1987 by failing to institute an action to recover
its ownership and possession, plaintiffs are
clearly guilty of laches;
....
8. That, Anastacio Cutandas right over the
land and succeeded by defendants since 1933
has beyond any cloud of doubt been
sufficiently established.[6]
Private respondents appealed to the Court of Appeals. On March 31, 1992, the
appellate court rendered a decision[7] which, while affirming the dismissal of the
case against petitioners, nonetheless declared that there was no sufficient evidence
that they were the owners of the properties. It stated:
However, this Court finds that the trial court has exceeded its
jurisdiction in declaring defendants-appellees to be the true and
lawful owners of the land in question there being no sufficient
evidence on record that they have been in open, continuous,
exclusive and notorious possession and occupation of the land
under a bona fide claim of ownership for the period required by
law as to acquire ownership thereof by prescription.[8]
Both parties moved for reconsideration of the appellate courts decision. On
February 26, 1993, the Court of Appeals denied their motions for lack of merit. No
further action was taken by private respondents so that the decision of the appellate
court affirming the dismissal of their action for recovery of possession, accounting
and damages became final. On the other hand, petitioners brought the instant
petition for review, insofar as the Court of Appeals ruled that no sufficient
evidence existed in the records to establish their ownership of the lands.
The sole issue for resolution in this petition is thus whether petitioners presented
sufficient evidence to prove their ownership of the lands in question. Petitioners
contend that: (1) the findings of fact of the Court of Appeals should not be binding
upon this Court as they are in direct contradiction to that of the trial court; [9] (2) the

decision of the Court of Appeals does not cite any reason for reversing the trial
courts findings of fact;[10] (3) while agricultural tenancy relations exist between
them and the owners of the land, they were also owners of the shares inherited by
their parents from Anastacio Cutanda;[11] and (4) as found by the trial court,
petitioners and their predecessors have been in possession of the lands since 1933
and have consequently acquired the same through acquisitive prescription. [12]

provides that by prescription, one acquires ownership and other real rights through
the lapse of time, in the manner and under the conditions laid down by law. In the
same way, rights and actions are lost by prescription. There are thus two kinds of
prescription: (1) the acquisition of a right by the lapse of time, or acquisitive
prescription; and (2) the loss of a right of action by the lapse of time, or extinctive
prescription.

The petition is meritorious.

Private respondents action was an accion publiciana to recover the right of

possession and to be declared owners of the subject lands. Their complaint
squarely put in issue the ownership of the lands in dispute. It may thus be properly
treated as an accion reivindicatoria. As found by the Court of Appeals and by the
trial court, however, petitioners predecessor-in-interest, Anastacio Cutanda,
acquired possession of said lands in 1933. On the other hand, private respondents
did not assert ownership over the lands until 1988 55 years later, when they filed
their present complaint for recovery of possession. It is settled that the remedies
of accion publiciana or accion reivindicatoria must be availed of within 10 years
from dispossession. Under Art. 555(4) of the Civil Code, the real right of
possession is lost after the lapse of 10 years.[16] In Cruz v. Court of Appeals,[17] in
which an action for recovery of possession and ownership of lands was brought
only after 26 years had elapsed, this Court ruled:

First. While both the Court of Appeals and the trial court held that private
respondents action for recovery of possession (accion publiciana) was already
barred, it appears that they relied upon different grounds. For the trial court, the
ground was extinctive prescription. Paragraph no. 7 of its findings plainly states
that
7. Consequent to laches, plaintiffs right to the land having
allowed the defendants to possess, cultivate and claim as owners
since 1933 up to 1987, their rights if any are lost by extinctive
prescription and, therefore, defendants have acquired the rights
over the parcels of land by acquisitive prescription.[13]
The Court of Appeals, on the other hand, held private respondents action to be
barred by laches, thus:
The failure of plaintiff-appellants and their predecessors-ininterest to assert their claim over the disputed properties from the
time that Anastacio Cutanda allegedly usurped said lands in 1933
until the instant action was filed in 1988 -- a period of 55 years -constitutes laches and bars this action to recover possession of
said properties.[14]
In Maneclang v. Baun,[15] this Court distinguished prescription from laches as
follows:
. . . While prescription is concerned with the fact of delay, 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.
Based on this distinction, we hold that prescription, not laches, is the proper ground
for holding private respondents action to be barred. Art. 1106 of the Civil Code

And secondly, whether We consider the complaint of private

respondents to recover possession of the property in question
as accion publiciana or accion reivindicatoria, the same has
prescribed after the lapse of ten years. After private respondents
had abandoned for 26 years the property which is unregistered
land, the law as well as justice and equity will not allow them "to
lie in wait and spring as in an ambush" to dislodge and
dispossess petitioners who during said period made and
constructed residences, buildings and other valuable
improvements thereon, and enjoying the fruits therefrom.
Hence, insofar as petitioners are concerned, private respondents cause of action
was barred, not by laches, but by extinctive prescription, regardless of whether
their complaint is considered as an accion publiciana or an accion reivindicatoria.
As regards the private respondents who did not appeal from the ruling of the Court
of Appeals, this question is now final.
Second. As already stated, the Court of Appeals reversed the trial courts ruling
that petitioners had acquired the lands by prescription on the ground that there was
no sufficient evidence to prove that petitioners had been in open, continuous and
adverse possession of the lands. There is, however, nothing in the evidence to
support this finding of the appellate court. To the contrary, the evidence in the
record, both documentary and testimonial, shows: (1) that their common ancestor
was the late Doque Cutanda, son of Eustaquio Cutanda and Rufina Atup; [18] (2) that
Doque Cutanda had several children, namely, Anastacio, Saturnino, Esperidion,

Pedro, Honorio, German, Fortunata, Eustaquia, and Ponciana; [19] (3) that, in his
lifetime, Doque Cutanda acquired a parcel of agricultural land consisting of
31.0929 hectares, which was declared under Tax Declaration No. 6983 [20] in the
name of his eldest child, Anastacio; (4) that Anastacio, who had no children,
remained in possession of said land from 1933 until 1968 when he executed a deed
of extrajudicial settlement of estate which adjudicated and partitioned said parcel
of land among his brothers and sisters;[21] (5) that after 1968, Anastacios brothers
and sisters worked on the land, as shown by several tax declarations [22] and
subsequently, their children and successors, herein petitioners, remained in actual
and peaceful possession of said land until 1988 when private respondents filed
their action to recover possession of the land; (6) that during such time, petitioners
Dominica, Sebastian, Sotero, Januario and Nicanor were cultivating the share of
their father while working as agricultural tenants on the shares of their uncles
Honorio and German Cutanda;[23] and (7) that petitioners Gabina, Crispin and
Claudio Cutanda are the children and heirs of Honorio Cutanda working on their
fathers share while petitioners Florencio and Trinidad Cutanda are the children
and heirs of German and Esperidion Cutanda, respectively. [24]
The foregoing sufficiently establish that Anastacio Cutanda was in possession of
the land covered by Tax Declaration No. 6983, which has an area of 31.0929
hectares, from 1933 up to 1968, or a period of 35 years. Such possession appears to
be adverse, continuous and in the concept of an owner because Anastacio Cutanda
cultivated the land, thereby, performing an act of ownership over it. It is to be
noted that Anastacios possession began under the former Civil Code. This fact
brings this case squarely under the ruling in Cruz v. Court of Appeals,[25] in which
adverse possession of a parcel of unregistered land started in 1938 while the
complaint for recovery of possession was filed only in 1964, after 26 years. The
trial court dismissed the complaint and declared the adverse possessors as owners
of the land. The Court of Appeals, however, reversed the trial court. On appeal, this
Court in turn reversed the appellate court. We held that
This contention of the petitioners is impressed with truth and
merit as the same is borne out by the records and the transcript
thereof which We have previously discussed. We, therefore, find
that the ruling of the respondent court dating petitioners adverse
possession to the year 1953 is contrary to the admission of the
private respondents thru counsel, and since petitioners
possession of the property in question commenced way back in
1938 which was at the time of the old Civil Code was still in
force, the prescriptive period is governed under Section 41 of the
Code of Civil Procedure because Article 1116 of the New Civil
Code provides that "Prescription already running before the
effectivity of this Code (August 30, 1950) shall be governed by
laws previously in force." Section 41 of the C.C.P. states:

Sec. 41. Title to land by prescription. -- Ten

years of actual adverse possession by any
person claiming to be the owner for that time
of any land or interest in land, uninterruptedly,
continuously for ten years by occupancy,
descent, grants or otherwise, in whatever way
such occupancy may have commenced or
continued, shall vest in every actual possessor
of such land a full complete title, saving to the
persons under disabilities the rights, secured by
the next section.[26]
Under the Code of Civil Procedure, therefore, ten years of actual adverse
possession was required, regardless of how such occupancy may have commenced
or continued, before possession ripened into full and complete title over the land.
Applying this to the present case, by 1943, ten years after his possession of the
subject parcel of land had begun, Anastacio Cutanda became owner of the land in
question through acquisitive prescription.
Third. The Court of Appeals limited its review of the evidence to the issue of
acquisitive prescription. Petitioners, however, submitted evidence to prove that
they were heirs of Anastacio Cutandas brothers and sisters, even as some of them
were also working as tenants for their co-petitioners. Particularly compelling is the
1968 Deed of Extrajudicial Settlement of Real Estate executed by Anastacio
Cutanda which pertinently states that:
WHEREAS, ANASTACIO CUTANDA, single, 90 years of age,
with no common-law wife, illegitimate children or otherwise,
through his own will desires to adjudicate and partition his three
(3) parcels of land to his brothers and sisters or legal
heirs, declared under Tax Dec. Nos. R-2485; R-2486; and R6983 situated at Camambugan, Ubay, Bohol and Saguisinhan,
Trinidad, Bohol, respectively, which are described and bounded
as follows:
....
Tax Declaration No. 6983, situated at Saguisinhan, Trinidad,
Bohol, with an area of 31.0929 hectares more or less: Bounded
on the North by Justo Ogayon & creek; or East, by Saguinsihan
Creek; on South, by Pablo Ebaoc, Graciano Ebaoc, Diosdado
Ebaoc, Gaviro Mumar; and on West by Pablo Ebaoc, Mateo
Nuera, Dominga Nuera; with improvements of 15 groups of
bamboos.

....

Q.....You mean to tell us that Honorio Cutanda has a previous tax

declaration covering this 7 hectares?

WHEREAS, the brothers, sisters and heirs of said Anastacio

Cutanda, through his will and voluntary deed, mutually agree to
accept this extrajudicial partition made by said Anastacio
Cutanda for the benefit of said brothers, sisters, and heirs of
same.

A.....Yes, sir.
Q.....But you are not in the possession of that tax declaration?
A.....No, sir.[27]

As Anastacio Cutanda had acquired ownership of said parcel of land through the
lapse of the period required by law, he could validly adjudicate and partition it
among his brothers and sisters who were his only heirs. Petitioners, in turn, as
children of Anastacios brothers and sisters, acquired ownership of the subject land
not through prescription but through hereditary succession.
But while we find sufficient evidence of ownership with respect to that parcel with
an area of 31.0929 hectares covered by Tax Declaration No. 6983, we find no
similar evidence to support the finding of the trial court that Anastacio Cutanda
was also the owner of the other parcel of land consisting of seven hectares.
Petitioner Florencio Cutanda himself admitted that he and the other petitioners
were only claiming the 31-hectare land. His testimony is as follows:
Q.....And Mr. Witness you will assure us here that this tax
declaration No. R-6983 is the only parcel of land owned by either
Doque Cutanda or Anastacio Cutanda situated in Trinidad,
Cambangay Norte?

Moreover, the alleged tax declaration in Honorio Cutandas name covering the
seven-hectare land was never presented in evidence. For these reasons, with respect
to the said seven-hectare land, the ruling of the Court of Appeals that there is no
sufficient evidence as to its ownership must be affirmed.
WHEREFORE, the decision of the Court of Appeals is set aside and another one
is rendered declaring petitioners to be true and lawful owners of that parcel of land
covered by Tax Declaration No. 6983 of the Tax Assessors Office of Saguisinhan,
Trinidad, Bohol, with an area of 31.0929 hectares. The complaint filed by
respondents is dismissed.
SO ORDERED.
(1) PEDRO P. PECSON, petitioner, vs. COURT OF APPEALS, SPOUSES
JUAN NUGUID and ERLINDA NUGUID, respondents.

A.....That is correct.

[G.R. No. 115814 May 26, 1995]

Q.....You will not change your answer?

DAVIDE, JR., J.:

A.....I will not.

Q.....So that Mr. Witness considering that this case now involves
two parcels of land, one with an area of 31 hectares and the other
with an area of 7 hectares, you are only claiming the 31 hectares
covered by Tax Decl. No. R-6983, am I correct?
A.....Only the 31 hectares.
Q.....You and your co-defendants are not claiming the 7 hectares?
A.....This 7 hectares was already owned and claimed by Honorio
Cutanda.

This petition for review on certiorari seeks to set aside the decision 1 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. Q41470 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 Piahan, 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 order 8 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.

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 . . . .

SO ORDERED.
The Court of Appeals then ruled as follows:
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

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.
(2)

SPOUSES
RAFAEL
BENITEZ
AND
AVELINA
BENITEZ, petitioners, vs. COURT OF APPEALS, SPOUSES
RENATO
MACAPAGAL
and
ELIZABETH
MACAPAGAL, respondents.

[G.R. No. 104828. January 16, 1997]

PANGANIBAN, J.:
May possession of a lot encroached upon by a part of another's house be
recovered in an action for ejectment?
This is the main question raised by the petition for review
on certiorari assailing the Resolution[1] of the Court of Appeals, Sixth
Division,[2] dated March 24, 1992, in CA-G.R. SP No. 26853 denying due course
to petitioner's appeal and affirming the decision of the Regional Trial Court of
Pasig in Civil Case No. 61004, which in turn affirmed the decision of the
Metropolitan Trial Court of San Juan, Metro Manila, Branch 58.

The Facts
On January 22, 1986, petitioners Rafael and Avelina Benitez purchased a
303-square-meter parcel of land with improvement from the Cavite Development
Bank, covered by Transfer Certificate of Title No. 41961 (now, TCT No. 55864).
Subsequently, private respondents Renato and Elizabeth Macapagal bought a
361-square-meter lot covered by TCT No. 40155. On September 18, 1986, they
filed Civil Case No. 53835 with the Regional Trial Court of Pasig, Branch 157
against petitioners for the recovery of possession of an encroached portion of the
lot they purchased. The parties were able to reach a compromise in which private
respondents sold the encroached portion to petitioners at the acquisition cost of
One Thousand Pesos (P1,000.00) per square meter.
On July 17, 1989, private respondents purchased still another property, a
285.70 square-meter-lot covered by TCT No. 3249-R, adjacent to that of
petitioners. After a relocation survey was conducted, private respondents
discovered that some 46.50 square meters of their property was occupied by
petitioners' house. Despite verbal and written demands, petitioners refused to
vacate. A last notice to vacate was sent to petitioners on October 26, 1989.
On January 18, 1990, private respondents filed with the Metropolitan Trial
Court of San Juan, Branch 58, Civil Case No. 61004 for ejectment against
petitioners. The MeTC of San Juan decided in favor of the former, with the
following disposition:[3]
"WHEREFORE, in view of all the foregoing, judgment is hereby rendered for the
plaintiffs and against the defendants ordering them and all persons claiming rights
under them to vacate and surrender possession of the subject premises to the
plaintiffs as well as to pay the following:
1.
The amount of P930.00 a month starting July 17, 1989 until they finally
vacate the subject premises;
2.

The amount of P5,000.00 for and as attorney's fees; and

3.

Cost of suit."

On appeal, the Regional Trial Court of Pasig, Branch 167, affirmed said
decision.[4] The RTC said:[5]

The Issues

"The controversy in this case is not an encroachment or overlapping of two (2)

adjacent properties owned by the parties. It is a case where a part of the house of
the defendants is constructed on a portion of the property of the plaintiffs. So that
as new owner of the real property, who has a right to the full enjoyment and
possession of the entire parcel covered by Transfer Certificate of Title No. 41961,
plaintiffs have the right to demand that defendants remove the portion of the house
standing on plaintiff's realty. . . ."

The main issue is whether the possession of the portion of the private
respondents' land encroached by petitioners' house can be recovered through an
action of ejectment, not accion publiciana. Corollarily, petitioners question (a) the
validity of the imposition of "rental" for the occupancy of the encroached portion,
(b) the denial of their claimed pre-emptive right to purchase the encroached portion
of the private respondents' land, and (c) the propriety of a factual review of the
CA's finding of bad faith on the part of petitioners.

The dispositive portion thereof reads:[6]

"WHEREFORE, finding no reversible error in the decision appealed from, it being
more consistent with the facts and the law applicable, the same is hereby
AFFIRMED in toto. Costs against the defendant-appellants.
SO ORDERED."
On further appeal, the respondent Court found no merit in petitioners' plea. In
a Resolution dated March 24, 1992, the Sixth Division of said Court found the
petition to be a mere rehash of the issues and arguments presented before the lower
courts. It ruled in part that:[7]
"3) Petitioners were fully aware that part of their house encroached on their
neighbor's property, while respondents became aware of it only after purchasing
said property. Petitioners cannot claim good faith as against the respondents.
"4) Since petitioners are not builders in good faith, they cannot demand that
respondents sell the disputed portion; what the law provides is that the builders in
bad faith can be ordered to dismantle said structure at their own expense. In the
interim period that petitioners' structure remains, they should pay reasonable rent
until they remove the structure."
The dispositive portion thereof reads:[8]

In a nutshell, petitioners insist that the MeTC had no jurisdiction over the
case at bar because its real nature is accion publiciana or recovery of possession,
not unlawful detainer. It is not forcible entry because private respondents did not
have prior possession of the contested property as petitioners possessed it ahead of
private respondents. It is not unlawful detainer because petitioners were not the
private respondents' tenants nor vendee unlawfully withholding possession thereof.
Said court also has no jurisdiction to impose payment of "rentals" as there is no
lessor-lessee relationship between the parties. They pray for a review of the factual
finding of bad faith, insisting that the facts uphold their position. Due to their
alleged good faith, they claim the pre-emptive right to purchase the litigated
portion as a matter of course. Finally, they insist that the award of attorney's fees is
unwarranted as private respondents allegedly had knowledge of the encroachment
prior to their acquisition of said land.
Private respondents counter that petitioners are estopped from questioning the
jurisdiction of the MeTC after they voluntarily participated in the trial on the merits
and lost; that there is no law giving petitioners the option to buy the encroached
property; and that petitioners acted in bad faith because they waived in their deed
of sale the usual seller's warranty as to the absence of any and all liens and
encumbrances on the property, thereby implying they had knowledge of the
encroachment at the time of purchase .

The Court's Ruling

The petition lacks merit and should be denied.

"For reasons indicated, We find the appeal without merit and deny it due course,
with costs against the petitioners.
First Issue: MeTC Has Jurisdiction
SO ORDERED."
Hence, this petition.

The jurisdictional requirements for ejectment, as borne out by the facts, are:
after conducting a relocation survey, private respondents discovered that a portion
of their land was encroached by petitioners' house; notices to vacate were sent to
petitioners, the last one being dated October 26, 1989; and private respondents

filed the ejectment suit against petitioners on January 18, 1990 or within one (1)
year from the last demand.

Second Issue: Compensation For Occupancy

Private respondents' cause of action springs from Sec. 1, Rule 70 of the

Revised Rules of Court, which provides:

Petitioners erroneously construed the order of the MeTC to pay private

respondents Nine Hundred Thirty Pesos (P930.00) a month starting July 17, 1989
until they (petitioners) finally vacate the subject premises as "rentals". Technically,
such award is not rental, but damages. Damages are recoverable in ejectment cases
under Section 8, Rule 70 of the Revised Rules of Court.[14] These damages arise
from the loss of the use and occupation of the property, and not the damages which
private respondents may have suffered but which have no direct relation to their
loss of material possession.[15] Damages in the context of Section 8, Rule 70 is
limited to "rent" or "fair rental value" for the use and occupation of the property. [16]

"Section 1. Who may institute proceedings, and when -- Subject to the provisions
of the next succeeding section, a person deprived of the possession of any land or
building by force, intimidation, threat, strategy, or stealth, or a landlord, vendor,
vendee, or other person against whom the possession of any land or building is
unlawfully withheld after the expiration or termination of the right to hold
possession, by virtue of any contract, express or implied, or the legal
representatives or assigns of any such landlord, vendor, vendee, or other person,
may, at any time within one (1) year after such unlawful deprivation or
withholding of possession, bring an action in the proper inferior court against the
person or persons unlawfully withholding or depriving of possession, or any person
or persons claiming under them, for the restitution of such possession, together
with damages and costs. . . ."
That petitioners occupied the land prior to private respondents' purchase
thereof does not negate the latter's case for ejectment. Prior possession is not
always a condition sine qua non in ejectment.[9] This is one of the distinctions
between forcible entry and unlawful detainer. In forcible entry, the plaintiff is
deprived of physical possession of his land or building by means of force,
intimidation, threat, strategy or stealth; thus, he must allege and prove prior
possession. But in unlawful detainer, the defendant unlawfully withholds
possession after the expiration or termination of his right thereto under any
contract, express or implied. In such a case, prior physical possession is not
required. [10]
Possession can also be acquired, not only by material occupation, but also by
the fact that a thing is subject to the action of one's will or by the proper acts and
legal formalities established for acquiring such right. [11]Possession of land can be
acquired upon the execution of the deed of sale thereof by its vendor. Actual or
physical occupation is not always necessary.
In the case before us, considering that private respondents are unlawfully
deprived of possession of the encroached land and that the action for the recovery
of possession thereof was made within the one- year reglementary period,
ejectment is the proper remedy.[12] The MeTC of San Juan had jurisdiction.
In addition, after voluntarily submitting themselves to its proceedings,
petitioners are estopped from assailing the jurisdiction of the MeTC. [13] This Court
will not allow petitioners to attack the jurisdiction of the trial court after receiving a
decision adverse to their position.

There is no question that petitioners benefited from their occupation of a

portion of private respondents' property. Such benefit justifies the award of the
damages of this kind. Nemo cum alterius, detrimenti locupletari potest. No one
shall enrich himself at the expense of another.

Third Issue: Option To Sell Belongs To Owner

Article 448 of the Civil Code[17] is unequivocal that the option to sell the land
on which another in good faith builds, plants or sows on, belongs to the landowner.
The option is to sell, not to buy, and it is the landowner's choice. Not even a
declaration of the builder, planter, or sower's bad faith shifts this option to him per
Article 450 of the Civil Code.[18] This advantage in Article 448 is accorded the
landowner because "his right is older, and because, by the principle of accession,
he is entitled to the ownership of the accessory thing." [19] There can be no preemptive right to buy even as a compromise, as this prerogative belongs solely to
the landowner. No compulsion can be legally forced on him, contrary to what
petitioners asks from this Court. Such an order would certainly be invalid and
illegal. Thus, the lower courts were correct in rejecting the petitioners' offer to buy
the encroached land.

Fourth Issue: A Review of Factual Findings Is Unwarranted

Petitioners ask this Court to review the alleged error of the respondent Court
in appreciating bad faith on their part. According to them, this is contradictory to
the fact that private respondents acquired their lot and discovered the encroachment
after petitioners bought their house. After careful deliberation on this issue, this
Court finds this petition for review inadequate as it failed to show convincingly a
reversible error on the part of the respondent Court in this regard. Thus, for very
good reasons, this Court has consistently and emphatically declared that review of

the factual findings of the Court of Appeals is not a function that is normally
undertaken in petitions for review under Rule 45 of the Rules of Court. Such
findings, as a general rule, are binding and conclusive. [20] The jurisdiction of this
Court is limited to reviewing errors of law unless there is a showing that the
findings complained of are totally devoid of support in the records or that they are
so glaringly erroneous as to constitute reversible error. [21]
Even respondent Court has taken note of the inadequacy of the petition before
it, as it wryly said:[22]

POSSESSION
1.

[G.R. No. 128177. August 15, 2001]

HEIRS OF ROMAN SORIANO, petitioners, vs. THE HONORABLE COURT OF

APPEALS, SPOUSES BRAULIO ABALOS and AQUILINA ABALOS,
respondents.
DECISION

"The Petition for Review is not certainly a manifestation of clarity nor an example
of a well-organized summation of petitioners' cause of action. . . . . .
xxx

xxx

xxx

A careful scrutiny of the above issues discloses that they are mere repetitions in a
rehashed form of the same issues with the same supporting arguments raised by
petitioners when they appealed from the decision of the (MeTC) to the RTC. x x
x."
This petition is no different. We share the foregoing sentiments of the
respondent Court. In essence, respondent Court merely affirmed the decision of the
MeTC. The Court of Appeal's finding of petitioners' bad faith did not alter nor
affect the MeTC's disposition. Petitioners want this Court to declare them in good
faith and to determine their rights under Article 448, Civil Code. However, the
mere fact that they bought their property ahead of the private respondents does not
establish this point. Nor does it prove that petitioners had no knowledge of the
encroachment when they purchased their property. Reliance on the presumption in
Article 526 of the Code is misplaced in view of the declaration of the respondent
Court that petitioners are not builders in good faith.
What petitioners presented are mere allegations and arguments, without
sufficient evidence to support them. As such, we have no ground to depart from the
general rule against factual review.
In sum, the petition has not shown cogent reasons and sufficient grounds to
reverse the unanimous ruling of the three lower courts. The MeTC, RTC and the
Court of Appeals were all in agreement in sustaining private respondents' rights.
And we uphold them.
WHEREFORE, the petition is DENIED. The assailed Resolution is
hereby AFFIRMED.
SO ORDERED.

YNARES-SANTIAGO, J.:
May a winning party in a land registration case effectively eject the possessor
thereof, whose security of tenure rights are still pending determination before the
DARAB?
The instant petition for certiorari seeks to set aside the Decisioni[1] dated
September 20, 1996 of the Court of Appeals in CA-G.R. SP No. 34930 as well as
its Resolutionii[2] dated January 15, 1997, denying petitioners Motion for
Reconsideration.
We quote the undisputed facts as narrated by the Court of Appeals, to wit
The property subject of this case is a parcel of land containing an area of 24,550
square meters, more or less, located in Lingayen, Pangasinan, and particularly
described as follows:
A parcel of land (Nipa with an area of 8,410 square meters; fishpond with an area
of 14,000 square meters; and residential land with an area of 1,740 square meters,
more or less. Bounded on the N, by river and Filemon Anselmo; on the South by
Alejandro Soriano and Filemon Anselmo; and on the West by Fortunata Soriano.
Originally owned by Adriano Soriano until his death in 1947, the above-described
property passed on to his heirs who leased the same to spouses David de Vera and
Consuelo Villasista for a period of fifteen (15) years beginning July 1, 1967 with
Roman Soriano, one of the children of Adriano Soriano, acting as caretaker of the
property during the period of the lease. After executing an extra judicial settlement
among themselves, the heirs of Adriano Soriano subsequently subdivided the
property into two (2) lots, Lot No. 60052 and Lot No. 8459. Lot No. 60052 was
assigned to Lourdes, Candido and the heirs of Dionisia while Lot No. 8459 was
assigned to Francisca, Librada, Elocadio and Roman. In 1971, Lot No. 60052 was
sold by Lourdes, Candido and the heirs of Dionisia to petitioner spouses Braulio
and Aquilina Abalos (hereinafter referred to as petitioners), while, Elocadio,

Francisca and Librada sold their three-fourths shares in Lot No. 8459 also to
petitioners.
On March 14, 1968, the de Vera spouses ousted Roman Soriano as caretaker and
appointed Isidro Verzosa and Vidal Verzosa as his substitutes. Thereafter, Roman
Soriano filed CAR Case No. 1724-P-68 for reinstatement and reliquidation against
the de Vera spouses. The agrarian court authorized the ejectment of Roman
Soriano but on appeal, the decision was reversed by the Court of Appeals, which
decision became final and executory. However, prior to the execution of the said
decision, the parties entered into a post-decisional agreement wherein the de Vera
spouses allowed Roman Soriano to sub-lease the property until the termination of
the lease in 1982. In an Order dated December 22, 1972, the post-decisional
agreement was approved by the agrarian court.
On August 16, 1976, petitioners filed with the Regional Trial Court of Lingayen,
Pangasinan, Branch 38, an application for registration of title over Lot No. 60052
and three-fourths (3/4) pro-indiviso of Lot No. 8459, docketed as LRC Case No. N3405. Said application for registration was granted by the trial court, acting as a
land registration court, per Decision dated June 27, 1983. On appeal, the Court of
Appeals affirmed the decision of the land registration court. The petition for
review filed with the Supreme Court by Roman Soriano docketed as G.R. 70842,
was denied for lack of merit and entry of judgment was entered on December 16,
1985.
Meanwhile, it appears that on July 15, 1983, a day after the promulgation of the
land registration courts decision, Roman Soriano, together with Elocadio and
Librada Soriano, filed before the Regional Trial Court of Lingayen, Branch 37, and
against petitioners, an action for annulment of document and/or redemption,
ownership and damages, docketed as Civil Case No. 159568 (sic; should be
15958). Petitioners filed a motion to dismiss on the ground of res judicata,
pendency of another action, laches, misjoinder of parties and lack of jurisdiction,
which was denied by the trial court.
Thereafter, on August 22, 1984, or eleven (11) years after the approval of the postdecisional agreement between Roman Soriano and the spouses de Vera in CAR
Case No. 1724-P-68 for reinstatement and reliquidation, petitioners filed with the
agrarian court a motion for execution of said post-decisional agreement which
allowed Roman Soriano to sub-lease the property. The motion prayed that
petitioners be placed in possession of the subject property, jointly with Roman
Soriano, and to levy so much of Romans property to answer for the use and
occupation by Soriano of 6/7 share of the property. On October 25, 1984, Roman
Soriano filed a motion to suspend hearing on the rental demanded by petitioners,
which, however, was denied by the agrarian court. The agrarian court likewise
authorized the substitution of the de Vera spouses by petitioners. Sorianos motion
for reconsideration was also denied, prompting Soriano to file a petition for
certiorari with the Court of Appeals.

In the meantime, Roman Soriano died on December 11, 1985. Thus, the complaint
in Civil Case No. 159568 (sic) for annulment of document and/or redemption,
ownership and damages, was amended to substitute Sorianos heirs, herein private
respondents, as party-plaintiffs. The complaint was again amended to include
Juanito Ulanday as party-defendant for having allegedly purchased part of the
disputed property from petitioners. On motion of petitioners, the re-amended
complaint was dismissed by the trial court on the ground that the re-amended
complaint altered the cause of action. Upon reconsideration, the dismissal was set
aside and petitioners were ordered to file their Answer, in view of which
petitioners filed a petition for certiorari and prohibition with the Court of Appeals,
docketed as C.A. GR SP No. 22149.
On April 25, 1990, the Court of Appeals denied the petition filed by Roman
Soriano (substituted by private respondents) impugning the denial of their motion
to suspend hearing on the rental demanded by petitioners, and authorizing the
substitution of the de Vera spouses by petitioners, on the ground that no grave
abuse of discretion was committed by the agrarian court. Thus, private
respondents filed a petition for review on certiorari with the Supreme Court,
docketed as G.R. 93401.
Meanwhile, on December 7, 1990, the Court of Appeals in C.A. GR SP No. 22149,
also denied the petition for certiorari and prohibition filed by petitioners, ruling that
the land registration court committed no error when it refused to adhere to the rule
of res judicata. Petitioners then filed with the Supreme Court a petition for review
on certiorari, docketed as G.R. 99843.
On June 26, 1991, the Supreme Court promulgated its decision in G.R. 93401, and
granted the petition filed by private respondents. Thus, the decision of the Court of
Appeals denying the petition of private respondents was set aside, and the motion
for execution filed by petitioners in CAR Case No. 1724-P-48 was denied.
On June 22, 1993, the Supreme Court, in G.R. 99843, reversed and set aside the
denial of the Court of Appeals in C.A. GR SP No. 22149, and consequently, Civil
Case No. 15958 for annulment of document and/or redemption, ownership and
damages, was ordered dismissed.
On October 18, 1993, private respondents filed with the Department of Agrarian
Adjudication Board (sic), a complaint against petitioners for Security of Tenure
with prayer for Status Quo Order and Preliminary Injunction docketed as DARAB
Case No. 528-P-93.
Meanwhile, it appears that the decision of the land registration court in LRC Case
No. N-3405 was partially executed with the creation of a Committee on Partition
per Order dated March 25, 1987. On July 27, 1988, the land registration court
approved the partition of Lot No. 8459, with Lot No. 8459-A assigned to private

respondent, and Lot No. 8459-B assigned to petitioners. For Lot No. 60052,
O.C.T. No. 22670 was issued in the name of petitioners; for Lot No. 8459-B,
O.C.T. No. 22687 was issued, also in the name of petitioner; and for Lot No. 8459A, O.C.T. No. 22686 was issued in the name of Roman Soriano. Dissatisfied with
said partition, private respondents appealed to the Court of Appeals, docketed as
CA G.R. SP No. 119497. The appellate court affirmed the partition but reversed
the order of the land registration court directing the issuance of a writ of possession
on the ground of pendency of Civil Case No. 15958.
On November 15, 1993, the trial court in compliance with the decision of the
Supreme Court in G.R. No. 99843, dismissed Civil Case No. 15958, in view of
which, petitioner, on November 25, 1993, in LRC Case No. N-3405, moved for the
issuance of an alias writ of execution and/or writ of possession to place them in
possession of Lot No. 60052 and Lot No. 8459-B. Per Resolution dated January
21, 1994, said motion was held in abeyance by the land registration court until and
after DARAB Case No. 528-P-93 for security of tenure with prayer for status quo,
has been resolved.
Their motion for reconsideration having been denied on April 5, 1984, petitioners
interposed an appeal to the Supreme Court, docketed as G.R. 115073. In a
Resolution dated July 27, 1994 issued by the Supreme Court, petitioners appeal,
which was treated as a petition for certiorari, was referred to this Court [of
Appeals] for determination and disposition.iii[3]
The Court of Appeals annulled and set aside the Resolution of the land registration
court and ordered instead the issuance of the corresponding writ of possession in
favor of private respondents. With the denial of their Motion for Reconsideration,
petitioners are now before us raising the following grounds:

prohibited by law and consistent with the rights of others. Ownership confers
certain rights to the owner, among which are the right to enjoy the thing owned and
the right to exclude other persons from possession thereof. On the other hand,
possession is defined as the holding of a thing or the enjoyment of a right.
Literally, to possess means to actually and physically occupy a thing with or
without right. Possession may be had in one of two ways: possession in the
concept of an owner and possession of a holder.v[5] A person may be declared
owner but he may not be entitled to possession. The possession may be in the
hands of another either as a lessee or a tenant. A person may have improvements
thereon of which he may not be deprived without due hearing. He may have other
valid defenses to resist surrender of possession. A judgment for ownership,
therefore, does not necessarily include possession as a necessary incident.vi[6]
There is no dispute that private respondents (petitioners below) title over the land
under litigation has been confirmed with finality. As explained above, however,
such declaration pertains only to ownership and does not automatically include
possession, especially so in the instant case where there is a third party occupying
the said parcel of land, allegedly in the concept of an agricultural tenant.
While the issue of ownership of the subject land has been laid to rest in the final
judgment of the land registration court, the right of possession thereof is, as yet,
controverted. This is precisely what is put in issue in the security of tenure case
filed by petitioners (private respondents below) before the DARAB.

1.
THE DECISION AND RESOLUTION OF THE RESPONDENT
COURT OF APPEALS ARE CONTRARY TO THE PROVISIONS OF THE
AGRARIAN REFORM LAWS AND JURISPRUDENCE ON THE SECURITY
OF TENURE OF TENANT-CARETAKER.

It is important to note that although private respondents have been declared titled
owners of the subject land, the exercise of their rights of ownership are subject to
limitations that may be imposed by law.vii[7] The Tenancy Act provides one such
limitation. Agricultural lessees are entitled to security of tenure and they have the
right to work on their respective landholdings once the leasehold relationship is
established. Security of tenure is a legal concession to agricultural lessees which
they value as life itself and deprivation of their landholdings is tantamount to
deprivation of their only means of livelihood.viii[8] The exercise of the right of
ownership, then, yields to the exercise of the rights of an agricultural tenant.

2.
THE DECISION AND RESOLUTION OF THE RESPONDENT
COURT OF APPEALS ARE VIOLATIVE OF THE PROVISION ON RIGHT TO
DUE PROCESS.

However, petitioners status as tenant has not yet been declared by the DARAB. In
keeping with judicial order, we refrain from ruling on whether petitioners may be
dispossessed of the subject property. As ratiocinated in Nona v. Planix[9]

3.
THE HONORABLE COURT OF APPEALS GRAVELY ABUSED ITS
DISCRETION IN GIVING DUE COURSE TO THE PETITION CONSIDERING
THAT PRIVATE RESPONDENTS HAD EARLIER PERFECTED AN APPEAL
OF THE RESOLUTION SUBJECT OF THEIR PETITION.iv[4]

It is to the credit of respondent Judge that he has shown awareness of the recent
Presidential Decrees which are impressed with an even more solicitous concern for
the rights of the tenants. If, therefore, as he pointed out in his order granting
the writ of possession, there is a pending case between the parties before the
Court of Agrarian Relations, ordinary prudence, let alone the letter of the law,
ought to have cautioned him against granting the plea of private respondents
that they be placed in possession of the land in controversy. x x x. At the time

Possession and ownership are distinct legal concepts. There is ownership when a
thing pertaining to one person is completely subjected to his will in a manner not

the challenged orders were issued, without any showing of how the tenancy
controversy in the Court of Agrarian Relations was disposed of, respondent Judge
could not by himself and with due observance of the restraints that cabin and
confine his jurisdiction pass upon the question of tenancy. (Emphasis ours)

Basilio
Aromin
for
Office of the Solicitor-General Paredes for appellee.

In its challenged Decision, the Court of Appeals relied heavily on the principle of
finality of judgments. It applied the legal doctrine that once a judgment has
become final, the issuance of a writ of execution becomes ministerial. The
appellate court held that petitioners situation does not fall under any of the
exceptions to this rule since his occupation of the subject land did not transpire
after the land registration courts adjudication became final.

MALCOLM, J.:

In so ruling, however, the Court of Appeals loses sight of the fact that petitioners
claim of possession as a tenant of the litigated property, if proven, entitles him to
protection against dispossession.
Private respondents argue that petitioners tenancy claim is barred by res judicata,
having been ruled upon in G.R. Nos. 99843 and 93401. However, not being an
issue in the case before us, this question should properly be resolved in DARAB
Case No. 528-P-93. To restate, the only issue before us is whether or not a
winning party in a land registration case can effectively eject the possessor thereof,
whose security of tenure rights are still pending determination before the DARAB.
A judgment in a land registration case cannot be effectively used to oust the
possessor of the land, whose security of tenure rights are still pending
determination before the DARAB. Stated differently, the prevailing party in a land
registration case cannot be placed in possession of the area while it is being
occupied by one claiming to be an agricultural tenant, pending a declaration that
the latters occupancy was unlawful.
WHEREFORE, the instant petition for certiorari is hereby GRANTED. The
Decision of respondent Court of Appeals in CA-G.R. SP No. 34930 dated
September 20, 1996, as well as its Resolution dated January 15, 1997 are SET
ASIDE. The Resolution of the Regional Trial Court of Lingayen, Pangasinan in
LRC Case No. N-3405 dated January 21, 1994 is ordered REINSTATED.
SO ORDERED.

2.

G.R. No. L-13298

November 19, 1918

CORNELIO
RAMOS,
vs.
THE DIRECTOR OF LANDS, objector-appellee.

petitioner-appellant,

appellant.

This is an appeal by the applicant and appellant from a judgment of the Court of
First Instance of Nueva Ecija, denying the registration of the larger portion of
parcel No. 1 (Exhibit A of the petitioner), marked by the letters A, B, and C on the
plan, Exhibit 1, of the Government.
One Restituto Romero y Ponce apparently gained possession of a considerable tract
of land located in the municipality of San Jose, Province of Nueva Ecija, in the
year 1882. He took advantage of the Royal Decree of February 13, 1894, to obtain
a possessory information title to the land, registered as such on February 8, 1896.
Parcel No. 1, included within the limits of the possessory information title of
Restituto Romero, was sold in February, 1907, to Cornelio Ramos, the instant
petitioner, and his wife Ambrosia Salamanca.
Ramos instituted appropriate proceedings to have his title registered. Opposition
was entered by the Director of Lands on the ground that Ramos had not acquired a
good title from the Spanish government and by the Director of Forestry on the
ground that the first parcel was forest land. The trial court agreed with the objectors
and excluded parcel No. 1 from registration. So much for the facts.
As to the law, the principal argument of the Solicitor-General is based on the
provisions of the Spanish Mortgage Law and of the Royal Decree of February 13,
1894, commonly known as the Maura Law. The Solicitor-General would
emphasize that for land to come under the protective gis of the Maura Law, it
must have been shown that the land was cultivated for six years previously, and
that it was not land which pertained to the "zonas forestales." As proof that the land
was, even as long ago as the years 1894 to 1896, forestal and not agricultural in
nature is the fact that there are yet found thereon trees from 50 to 80 years of age.
We do not stop to decide this contention, although it might be possible, following
the doctrine laid down by the United States Supreme Court with reference to
Mexican and Spanish grantes within the United States, where some recital is
claimed to be false, to say that the possessory information, apparently having taken
cognizance of the requisites for title, should not now be disturbed. (Hancock vs.
McKinney [1851], 7 Tex., 192; Hornsby and Roland vs. United States [1869], 10
Wall., 224.) It is sufficient, as will later appear, merely to notice that the
predecessor in interest to the petitioner at least held this tract of land under color of
title.

Subsection 6 of section 54, of Act No. 926, entitled The Public Land Law, as
amended by Act No. 1908, reads as follows:
6. All persons who by themselves or their predecessors and interest have
been in the open, continuous, exclusive, and notorious possession and
occupation of agricultural public lands, as defined by said Act of
Congress of July first, nineteen hundred and two, under a bona fide claim
of ownership except as against the Government, for a period of ten years
next preceding the twenty-sixth day of July, nineteen hundred and four,
except when prevented by war or force majeure, shall be conclusively
presumed to have performed all the conditions essential to a government
grant and to have received the same, and shall be entitled to a certificate
of title to such land under the provisions of this chapter.
There are two parts to the above quoted subsection which must be discussed. The
first relates to the open, continuous, exclusive, and notorious possession and
occupation of what, for present purposes, can be conceded to be agricultural public
land, under a bona fide claim of ownership.
Actual possession of land consists in the manifestation of acts of dominion over it
of such a nature as a party would naturally exercise over his own property. Relative
to actuality of possession, it is admitted that the petitioner has cultivated only about
one fourth of the entire tract. This is graphically portrayed by Exhibit 1 of the
Government, following:

The question at once arises: Is that actual occupancy of a part of the land described
in the instrument giving color of title sufficient to give title to the entire tract of
land?lawphil.net
The doctrine of constructive possession indicates the answer. The general rule is
that the possession and cultivation of a portion of a tract under claim of ownership
of all is a constructive possession of all, if the remainder is not in the adverse
possession of another. (Barr vs. Gratz's Heirs [1819], 4 Wheat., 213; Ellicott vs.
Pearl [1836], 10 Pet., 412; Smith vs. Gale [1892], 144 U. S., 509.) Of course, there
are a number of qualifications to the rule, one particularly relating to the size of the
tract in controversy with reference to the portion actually in possession of the
claimant. It is here only necessary to apply the general rule.
The claimant has color of title; he acted in good faith; and he has had open,
peaceable, and notorious possession of a portion of the property, sufficient to
apprise the community and the world that the land was for his enjoyment. (See arts.
446, 448, Civil Code.) Possession in the eyes of the law does not mean that a man
has to have his feet on every square meter of ground before it can be said that he is

in possession. Ramos and his predecessor in interest fulfilled the requirements of

the law on the supposition that he premises consisted of agricultural public land.

The foresters say that no legal definition of "forest" is practicable or useful. B. H.

Baden-Powell, in his work on Forest Law of India, states as follows:

The second division of the law requires consideration of the term "agricultural
public land." The law affirms that the phrase is denied by the Act of Congress of
July 1st, 1902, known as the Philippine bill. Turning to the Philippine Bill, we find
in sections 13 to 18 thereof that three classes of land are mentioned. The first is
variously denominated "public land" or "public domain," the second "mineral
land," and the third "timber land." Section 18 of the Act of Congress comes nearest
to a precise definition, when it makes the determination of whether the land is more
valuable for agricultural or for forest uses the test of its character.

Every definition of a forest that can be framed for legal purposes will be
found either to exclude some cases to which the law ought to apply, or on
the other hand, to include some with which the law ought not to interfere.
It may be necessary, for example, to take under the law a tract of perfectly
barren land which at present has neither trees, brushwood, nor grass on it,
but which in the course f time it is hoped will be "reboise;" but any
definition wide enough to take in all such lands, would also take in much
that was not wanted. On the other hand, the definition, if framed with
reference to tree-growth, might (and indeed would be almost sure to)
include a garden, shrubbery, orchard, or vineyard, which it was not
designed to deal with.

Although these sections of the Philippine Bill have come before the courts on
numerous occasions, what was said in the case of Jones vs. Insular Government
([1906], 6 Phil., 122), is still true, namely: "The meaning of these sections is not
clear and it is difficult to give to them a construction that will be entirely free from
objection." In the case which gave most serious consideration to the subject (Mapa
vs. Insular Government [1908], 10 Phil., 175), it was found that there does exist in
the Act of Congress a definition of the phrase "agricultural public lands." It was
said that the phrase "agricultural public lands" as used in Act No. 926 means "those
public lands acquired from Spain which are not timber or mineral lands."
The idea would appear to be to determine, by exclusion, if the land is forestal or
mineral in nature and, if not so found, to consider it to be agricultural land. Here,
again, Philippine law is not very helpful. For instance, section 1820 of the
Administrative Code of 1917 provides: "For the purposes of this chapter, 'public
forest' includes, except as otherwise specially indicated, all unreserved public land,
including nipa and mangrove swamps, and all forest reserves of whatever
character." This definition of "public forest," it will be noted, is merely "for the
purposes of this chapter." A little further on, section 1827 provides: "Lands in
public forests, not including forest reserves, upon the certification of the Director
of Forestry that said lands are better adapted and more valuable for agricultural
than for forest purposes and not required by the public interests to be kept under
forest, shall be declared by the Department Head to be agricultural lands." With
reference to the last section, there is no certification of the Director of Forestry in
the record, as to whether this land is better adapted and more valuable for
agricultural than for forest purposes.
The lexicographers define "forest" as "a large tract of land covered with a natural
growth of trees and underbrush; a large wood." The authorities say that he word
"forest" has a significant, not an insignificant meaning, and that it does not
embrace land only partly woodland. It is a tract of land covered with trees, usually
of considerable extent. (Higgins vs. Long Island R. Co. [1908], 114 N. Y. Supp.,
262; People vs. Long Island R. Co. [1908], 110 N. Y. Supp., 512.)

B. E. Fernow, in his work on the Economics of Forestry, states as follows:

A forest in the sense in which we use the term, as an economic factor, is
by no means a mere collection of trees, but an organic whole in which all
parts, although apparently heterogeneous, jumbled together by accident as
it were and apparently unrelated, bear a close relation to each other and
are as interdependent as any other beings and conditions in nature.
The Director of Forestry of the Philippine Islands has said:
During the time of the passage of the Act of Congress of July 1, 1902, this
question of forest and agricultural lands was beginning to receive some
attention and it is clearly shown in section 18 of the above mentioned Act;
it leaves to the Bureau of Forestry the certification as to what lands are for
agricultural or forest uses. Although the Act states timber lands, the
Bureau has in its administration since the passage of this act construed
this term to mean forest lands in the sense of what was necessary to
protect, for the public good; waste lands without a tree have been declared
more suitable for forestry in many instances in the past. The term 'timber'
as used in England and in the United States in the past has been applied to
wood suitable for construction purposes but with the increase in
civilization and the application of new methods every plant producing
wood has some useful purpose and the term timber lands is generally
though of as synonymous with forest lands or lands producing wood, or
able to produce wood, if agricultural crops on the same land will not bring
the financial return that timber will or if the same land is needed for
protection purposes.
xxx

xxx

xxx

The laws in the United States recognize the necessity of technical advice
of duly appointed boards and leave it in the hands of these boards to
decide what lands are more valuable for forestry purposes or for
agricultural purposes.

If cultivated, state crops being grown and approximate number of hectares

under cultivation. (Indicate on sketch.)

In the Philippine Islands this policy is follows to as great an extent as

allowable under the law. In many cases, in the opinion of the Bureau of
Forestry, lands without a single tree on them are considered as true forest
land. For instance, mountain sides which are too steep for cultivation
under ordinary practice and which, if cultivated, under ordinary practice
would destroy the big natural resource of the soil, by washing, is
considered by this bureau as forest land and in time would be reforested.
Of course, examples exist in the Mountain Province where steep hillsides
have been terraced and intensive cultivation practiced but even then the
mountain people are very careful not to destroy forests or other vegetative
cover which they from experience have found protect their water supply.
Certain chiefs have lodged protests with the Government against other
tribes on the opposite side of the mountain cultivated by them, in order to
prevent other tribes from cutting timber or destroy cover guarding their
source of water for irrigation.

State what portion of the tract is wooded, name of important timber

species and estimate of stand in cubic meters per hectare, diameter and
percentage of each species.

Dr. M. S. Shaler, formerly Dean of the Lawrence Scientific School,

remarked that if mankind could not devise and enforce ways dealing with
the earth, which will preserve this source of like "we must look forward to
the time, remote it may be, yet equally discernible, when out kin having
wasted its great inheritance will fade from the earth because of the ruin it
has accomplished."
The method employed by the bureau of Forestry in making inspection of
lands, in order to determine whether they are more adapted for agricultural
or forest purposes by a technical and duly trained personnel on the
different phases of the conservation of natural resources, is based upon a
previously prepared set of questions in which the different characters of
the land under inspection are discussed, namely:
Slope of land: Level; moderate; steep; very steep.

For growth of what agricultural products is this land suitable?

If the land is covered with timber, state whether there is public land
suitable for agriculture in vicinity, which is not covered with timber.
Is this land more valuable for agricultural than for forest purposes? (State
reasons in full.)
Is this land included or adjoining any proposed or established forest
reserve or communal forest? Description and ownership of improvements.
If the land is claimed under private ownership, give the name of the
claimant, his place of residence, and state briefly (if necessary on a
separate sheet) the grounds upon which he bases his claim.
When the inspection is made on a parcel of public land which has been
applied for, the corresponding certificate is forwarded to the Director of
Lands; if it is made on a privately claimed parcel for which the issuance of
a title is requested from the Court of Land Registration, and the inspection
shows the land to be more adapted for forest purposes, then the Director
of Forestry requests the Attorney-General to file an opposition, sending
him all data collected during the inspection and offering him the forest
officer as a witness.
It should be kept in mind that the lack of personnel of this Bureau, the
limited time intervening between the notice for the trial on an expediente
of land and the day of the trial, and the difficulties in communications as
well as the distance of the land in question greatly hinder the handling of
this work.

Exposure: North; South; East; West.

Soil: Clay; sandy loam; sand; rocky; very rocky.
Character of soil cover: Cultivated, grass land, brush land, brush land and
timber mixed, dense forest.

In the case of lands claimed as private property, the Director of Forestry,

by means of his delegate the examining officer, submits before the court
all evidence referring to the present forest condition of the land, so that the
court may compare them with the alleged right by the claimant.
Undoubtedly, when the claimant presents a title issued by the proper
authority or evidence of his right to the land showing that he complied
with the requirements of the law, the forest certificate does not affect him
in the least as such land should not be considered as a part of the public

domain; but when the alleged right is merely that of possession, then the
public or private character of the parcel is open to discussion and this
character should be established not simply on the alleged right of the
claimant but on the sylvical condition and soil characteristics of the land,
and by comparison between this area, or different previously occupied
areas, and those areas which still preserve their primitive character.
Either way we look at this question we encounter difficulty. Indubitably, there
should be conservation of the natural resources of the Philippines. The prodigality
of the spendthrift who squanders his substance for the pleasure of the fleeting
moment must be restrained for the less spectacular but surer policy which protects
Nature's wealth for future generations. Such is the wise stand of our Government as
represented by the Director of Forestry who, with the Forester for the Government
of the United States, believes in "the control of nature's powers by man for his own
good." On the other hand, the presumption should be, in lieu of contrary proof, that
land is agricultural in nature. One very apparent reason is that it is for the good of
the Philippine Islands to have the large public domain come under private
ownership. Such is the natural attitude of the sagacious citizen.
If in this instance, we give judicial sanction to a private claim, let it be noted that
the Government, in the long run of cases, has its remedy. Forest reserves of public
land can be established as provided by law. When the claim of the citizen and the
claim of the Government as to a particular piece of property collide, if the
Government desires to demonstrate that the land is in reality a forest, the Director
of Forestry should submit to the court convincing proof that the land is not more
valuable for agricultural than for forest purposes. Great consideration, it may be
stated, should, and undoubtedly will be, paid by the courts to the opinion of the
technical expert who speaks with authority on forestry matters. But a mere formal
opposition on the part of the Attorney-General for the Director of Forestry,
unsupported by satisfactory evidence will not stop the courts from giving title to
the claimant.
We hold that the petitioner and appellant has proved a title to the entire tract of
land for which he asked registration, under the provisions of subsection 6, of
section 54, of Act No. 926, as amended by Act No. 1908, with reference to the
Philippine Bill and the Royal Decree of February 13, 1894, and his possessory
information.
Judgment is reversed and the lower court shall register in the name of the applicant
the entire tract in parcel No. 1, as described in plan Exhibit A, without special
finding as to costs. So ordered.

3.

G.R. No. 82680 August 15, 1994

NICANOR
SOMODIO,
petitioner,
vs.
COURT OF APPEALS, EBENECER PURISIMA, and FELOMINO AYCO,
respondents.
Jose V. Panes for petitioner.
Vencer, Purisima & Associates for private respondents.

QUIASON, J.:
This is a petition for review on certiorari under Rule 45 of the Revised Rules of
Court to reverse and set aside the Decision dated September 29, 1987 and the
Resolution dated February 2, 1988 of the Court of Appeals in CA-G.R. SP No.
11602.
I
On October 21, 1974, Jose Ortigas executed an instrument designated as a Transfer
of Rights, conveying to Wilfredo Mabugat the possession of a residential lot
situated at Rajah Muda, Bula, General Santos City and described in the said
instrument as:
Lot No. (Unnumbered), bounded on the North by Temporary
Road, on the South by Customs Zone (Sarangani Bay), on the
East by Public Land, and on the West by Public Land.
Nicanor Somodio, herein petitioner, contributed one-half of the purchase price. On
October 22, 1974, Mabugat executed an Affidavit of Trust expressly recognizing
the right of petitioner over one-half undivided portion of the lot. Later, petitioner
discovered in the District Land Office that the lot was numbered "6328-X, Csd
2281-D." Thereafter, petitioner and Mabugat partitioned the property into two
portions, with petitioner taking the western part. Immediately after the partition,
petitioner took possession of his portion and planted thereon ipil-ipil trees, coconut
trees and other fruit-bearing trees.
In 1976, petitioner began construction of a structure with a dimension of 22-by-18
feet on his lot. His employment, however, took him to Kidapawan, North Cotabato,
and he left the unfinished structure to the case of his uncle. He would visit the
property every three months or on weekened when he had time.

Sometime in October 1977, petitioner allowed respondent Felomino Ayco, to

transfer his hut to petitioner's lot. About six years later, petitioner demanded that
Ayco vacate the premises but such demand proved futile. Hence, on August 23,
1983, petitioner filed an action for unlawful detainer with damages against
respondent Ayco before the Municipal Trial Court, Branch I, General Santos,
docketed as Civil Case No. 2032-II.
Meanwhile, on June 26, 1983, respondent Ebenecer Purisima entered the land and
constructed a house thereon. Four days later, petitioner filed against respondent
Purisima a complaint for forcible entry before the same court docketed as Civil
Case No. 2013-I. Said case was later consolidated with Civil Case No. 2032-II.
In his answer, respondent Purisima averred that the lot was a portion of the land
subject of his application for miscellaneous sales patent with the Bureau of Lands.
Purisima described the lot in question as:
Lot No. 6328-Y, CSD-2281-D, Bula, General Santos, Cotabato.
Bounded on the North by 6328-X; on the South by Sarangani
Bay; on the East by a Municipal Road; and on the West by Lot
No. 6328-W, containing an area of 1,095 square meters and
covered by Tax Declaration No. 9647 (Rollo, p. 36; Emphasis
supplied).
Respondent Purisima contended that his father, a geodetic engineer, had surveyed
the parcel of land comprising of Lots Nos. 6427 and 6328 for the Small Farmers
Fishpond Association, Inc. in February 1958, and that his father's survey plan was
approved by the Director of Lands in 1960. Respondent Ayco, on the other hand,
did not present any evidence but merely anchored his right to possess the property
on the evidence of Purisima.
On April 30, 1986, the trial court rendered a decision finding that respondent
Purisima built his house "almost on the spot where Somodio's unfinished house"
stood "thru stealth and strategy," not knowing that the house was built on Lot No.
6328-X and not on Lot No. 6328-Y, the lot said respondent was claiming (Rollo, p.
43). The court went on to state that:
. . . . He (private respondent Purisima) was a frequent visitor in
Rajah Muda and had sometimes stayed with Mrs. Maturan in
Judge Purisima's house on the adjoining lots, and could not have
remained unaware of the possession of Somodio. He must have
depended on the thought that it was his father who made the
subdivision survey and had fenced an area which he had claimed.
He did not exactly verify that the area fenced by his father had an
area of only 1,095 square meters, which did not include the are
Lot No. 6328-X could eventually be standing on his property, for

Lot No. 6328-X is not claimed by him and has not been applied
for even by his father. His father has been abroad and has not
taken steps to apply for Lot No. 6328-X. This lot is not declared
for taxation purposes in the name of any claimant-applicant.
Unless and until there would be an administrative proceedings
and the title ultimately issued in favor of an applicant, the
possession of the actual claimant and occupant has to be
respected and maintained in the interest of public order . . .
(Rollo, pp. 43-44).
The Municipal Trial Court further held that petitioner was the actual possessor of
Lot No. 6328-X. The court did not believe respondent Ayco's claim that the
administratrix of the estate of respondent Purisima's father authorized him to build
a hut on Lot No. 6328-X in 1976. At any rate, the court said that respondent Ayco
was willing to vacate the premises provided he be given financial assistance to do
so (Rollo, pp. 43-44).
Nothing that the ocular inspection of the area showed that the houses of
respondents Purisima and Ayco were "inside Lot No. 6328-X" and not on Lot No.
6328-Y, the Municipal Trial Court held that the case became one which entailed
mere removal of the houses from the lot in question. Accordingly, the court
ordered private respondents to remove their respective houses, to deliver the land
to petitioner, and to pay attorney's fees and litigation expenses.
On appeal, the Regional Trial Court, Branch 22, General Santos City, affirmed in
toto the decision of the Municipal Trial Court. Respondent then elevated the cases
on a petition for review to the Court of Appeals, which, in its decision dated
September 27, 1987, set aside the decisions of the two trial courts and ordered the
dismissal of the two complaints filed by petitioner.
The Court of Appeals held that herein petitioner had not "clearly and conclusively
established physical, prior possession over Lot No. 6328-X."
Petitioner's motion for the reconsideration of the decision of the Court of Appeals
having been denied, he filed the instant petition for review on certiorari.
We grant the petition.
II
The procedural issue raised by private respondents should first be resolved. The
issue is whether the instant petition is proper considering that petitioner "merely
touch(es) upon questions of fact which had been carefully considered" by the Court
of Appeals (Rollo, p. 92). As a general rule, the findings of fact of the Court of
Appeals are binding on this Court. This rule, however, is not without exceptions,

one of which is when the factual findings of the Court of Appeals and the trial
court are contrary to each other. In such a case, this Court may scrutinize the
evidence on record in order to arrive at the correct findings based on the record
(Valenzuela v. Court of Appeals, 191 SCRA 1 [1990]; Roman Catholic Bishop of
Malolos, Inc. v. Intermediate Appellate Court, 191 SCRA 411 [1990]).
Upon a review of the records, we are convinced that petitioner indeed enjoyed
priority of possession over Lot No. 6328-X, notwithstanding respondent Purisima's
claim to the contrary.
In ejectment cases, the only issue for resolution is who is entitled to the physical or
material possession of the property involved, independent of any claim of
ownership set forth by any of the party-litigants. Anyone of them who can prove
prior possession de facto may recover such possession even from the owner
himself. This rule holds true regardless of the character of a party's possession,
provided, that he has in his favor priority of time which entitles him to stay on the
property until he is lawfully ejected by a person having a better right by either
accion publiciana or accion reivindicatoria (De Luna v. Court of Appeals, 212
SCRA 276 [1992]).
Petitioner took possession of the property sometime in 1974 when he planted the
property to coconut trees, ipil- ipil trees and fruit trees. In 1976, he started the
construction of a building on the property. It is immaterial that the building was
unfinished and that he left for Kidapawan for employment reasons and visited the
property only intermittently. Possession in the eyes of the law does not mean that a
man has to have his feet on every square meter of ground before it can be said that
he is in possession (Ramos v. Director of Lands, 39 Phil. 175 [1918]). It is
sufficient that petitioner was able to subject the property to the action of his will.

Moreover, neither is the fact that respondent Purisima's father surveyed the
property of help to his cause. As the Court of Appeals found, respondent Purisima's
father surveyed the land for the Small Farmers Fishpond Association, Inc., not for
himself. Although respondent Purisima now claims that Lot No. 6328-X was in
payment of his fee for the services of his father and that he caused the construction
of a perimeter wall in the area, these facts do not mean that respondent Purisima
himself had prior possession. He did not present any proof that his father had
authorized him to enter the land as his successor-in-interest. Neither did he present
proof that between 1958, when his father allegedly took possession of the land, and
1983, when said respondent himself entered the land, his father ever exercised
whatever right of possession he should have over the property. Under these
circumstances, priority in time should be the pivotal cog in resolving the issue of
possession.
The Court of Appeals opined that petitioner had not properly identified the lot he
had occupied. The matter of identification of the land, however, had been resolved
by respondent Purisima's admission in his pleadings, as well as by two ocular
inspections.
In his answer to the complaint, respondent Purisima claimed possession over Lot
No. 6328-Y, while petitioner identified the lot adjacent to it, Lot
NO. 6328-X, as the area where private respondents built their houses. That these
two lots are distinct from one another was resolved by the ocular inspection
conducted by a Senior Geodetic Engineer of the Office of the City Engineer, who
found that "south of lot 6328-H across a 10 meter wide road is lot 6328-Y and from
thence to the south is lot 6328-X." On June 13, 1985, the Municipal Trial Court
judge himself went to the premises in question and discovered that aside from the
houses of respondents Purisima and Ayco, five other houses had been built on Lot
No. 6328-X.

Article 531 of the Civil Code of the Philippines provides:

Possession is acquired by the material occupation of a thing or
the exercise of a right, or by the fact that it is subject to the action
of our will, or by the proper acts and legal formalities established
for acquiring such right.
Even if the Court of Appeals is correct in its finding that petitioner started
introducing improvements on the land only in 1981, he still enjoyed priority of
possession because respondent Purisima entered the premises only in 1983.
It should be emphasized that the Court of Appeals noted that none of the parties
had produced tax declarations or applications as public land claimants. As such,
what should have been scrutinized is who between the claimants had priority of
possession.

Petitioner's prior possession over the property, however, is not synonymous with
his right of ownership over the same. As earlier stated, resolution of the issue of
possession is far from the resolution of the issue of ownership. Forcible entry is
merely a quieting process and never determines the actual title to an estate
(German Management & Services, Inc. v. Court of Appeals, 177 SCRA 495
[1989]; Manuel v. Court of Appeals, 199 SCRA 603 [1991].
WHEREFORE, the decision of the Court of Appeals is REVERSED and SET
ASIDE and that of the trial courts REINSTATED. Costs against private
respondents.
SO ORDERED.

4.

G.R. No. L-42859

March 17, 1938

GABRIEL
LASAM,
applicant-appellee,
vs.
THE DIRECTOR OF LANDS and JOSE CHAN HONG HIN, ET AL.,
opponents-appellants.
Acting Solicitor-General Melencio
Alfredo Catolico for appellee.

and

B.

Pobre

for

appellants.

LAUREL, J.:
On January 24, 1930, Gabriel Lasam filed with the Court of First Instance of
Cagayan an application for the registration of 152 parcels of land containing a total
area of 24,723,436 square meters, situated in the municipality of Solana, Province
of Cagayan, described in the plan Exhibit K attached to the application. These 152
parcels include the parcel No. 9 here involved.
According to the lower court, the portions of said parcel No. 9 which opposed
during the time of survey were delimited and marked on its plan Psu-67516
attached to the record as lots A to Z, AA to HH, MM to ZZ, AAA to ZZZ, AAAA
to ZZZZ, AAAAA, to FFFFF, NNNNN, 35 to 38, and 111 to 143, all inclusive.
(Decision of the lower court, Bill of Exception of the Government, p. 35.)
The Director of Lands opposed the application on the ground that it is not
supported by any title fit for registration and that the land sought to be registered is
public land. The brothers Felipe, Jose and Salvador, all surnamed Narag, who are
first cousin to the applicant Lasam, also filed opposition on the ground that they are
the owners of parcels No. 9. Opposition were also filed by Tomas Furigay and 35
other persons as homesteaders; by the provincial fiscal, representing the Directors
of Forestry, on the ground that portions thereof are public forest; by Francisco
Caronan and some 71 others parties, claiming the parcels occupied by them as their
exclusive properties; by Jose Chan Hong Hin, on the ground that the applicant
includes his property of about 22 hectares and 50 ares; and by Mauro Antonio, on
the ground that the applicant includes the portion occupied by him and belonging
to him. Pablo Soriano succeeded in having the order of general default set aside as
to him and was allowed to registered his opposition at a latter date. Amendede
applications and oppositions by the parties were subsequently permitted to be filed.
After a protracted hearing, the lower court rejected and the oppositions filed,
declaring the applicant, Gabriel Lasam, the owner of parcel No. 9 as indicated in
the plan Psu-67516 (Exhibit K), and decreed the registration of said parcel in his
favor.

On September 10, 1934, counsel for various oppositors, after excepting to the
decision, filed a motion for new trial which was denied, and the case was brought
before this court by bill of exceptions.
The Narag brothers and the Directors of Forestry appear to have abandoned their
opposition. They made no attempt to substantiate their claims at the trial.
Counsel for the Director of Lands, et al. and for Jose Chan Hong Hin, et al. make
various assignments of error in their respective briefs. It is not believe necessary
however, to consider each and every assignment made as the questions presented
may, in our opinion, be reduced to the following propositions: (a) Whether or not
the applicant, Gabriel Lasam, is entitled to the registered of parcel No. 9 on the
basis of the document presented as Exhibit L, hereinafter to be referred to, or in the
alternative, whether or not he is entitled to registered on the basis of public,
continuous, and adverse possession under a claim of ownership during the time
prescribed by law (par. 9, application); and the negative, (b) whether or not the
numerous oppositors excluding the homesteader are entitled to the parcels
which they allege are included in the controverted parcel No. 9. The rights of the
homesteader necessarily depend on the resolution of these two propositions.
Exhibit L purports to be an application dated June 27, 1873 addressed by Domingo
Narag 1. to the Alcalde Mayor, in which the former stated that he had been in
possession of the land above described and asked that informacion testifical be
admitted. The informacion testifical was had before the Alcalde Mayor and appears
to have been approved by the Judge of the Court of First Instance without objection
on the part of the fiscal. It is the theory of the applicant that Domingo Narag 1. the
original owner of parcel No. 5, described in Exhibit L, owned P1,000 from the
applicant's which amount Narag needed for his candidacy gobernadorcillo of
Tuguegarao, Cagayan, in 1880; that the original of Exhibit L was turned over by
the applicant to his lawyer, Vicente Marasigan, who lost it, and for this reason,
only a certificate copy of the document marked Exhibit L presented; and that the
fifth parcel mentioned in the document, Exhibit L, is the parcel No. 9 described in
the plan, Exhibit K. The Government contends that Exhibit L is not a valid titled
and does not confer ownership that even if it were valid, it does not cover so
extensive an area as that appearing on the plan, Exhibit K.
The land designated as the fifth parcel is described in Exhibit L as follows:
5. Un terreno o pasto de ganados vacunos llamado Marguirig o Cagguban
que linda al poniente con el estero Pagul, oriente con el pueblo de la
Solana al norte con el sitio llamado y Calabbacao y al sur con el sitio
llamado Atayo el cual tiene un cabida de siete mil brazaz y herede de mis
Padres hace viente y dos aos y en la actualidad es donde mis granados de
procreacion.

Parcel No. 9, the registration of which is applied for in these proceedings, is

described thus (brief of claimant-appellee p. 61):
Por el norte con barrios de Iraga, Bauan y Bangag;
Por el este con el Centro y los barrios de Basi, Natapian y Lanna;
Por el sur con la carretera provincial; y
Por el oeste barrios de Maguirig, Cagguban y estero Pangul.
We are of the opinion that the court below committed no error in receiving Exhibit
L as evidence for the claimant, but its admission by the court does not necessarily
entitled the applicant Gabriel Lasam, to the registration of the parcel claimed by
him in these proceedings. It is apparent that parcel No. 9, as indicated in the plan,
Exhibit K, is not the same parcel No. 5 described in document Exhibit L. Whereas
Exhibit L gives as boundaries on the north the sitios of Maasin and Calabbacao,
Exhibit K gives the barrios of Iraga, Bauan, and Bangag; on the east Exhibit L
gives the pueblo of Solana, whereas Exhibit K gives "el Centro y los barrios de
Basi, Natappian y Lanna"; on the west Exhibit L gives estero Pangul, whereas
Exhibit K gives the barrios of Maguirig, Cagguban and estero Pangul; on the south
Exhibit L gives the sitio of Atayao, whereas Exhibit K gives the carretera
provincial. While there may be partial indentity as to boundaries on the east and
west, such indentity is lacking as to the boundaries on the north and south. This
discrepancy is accentuated by the admmission of the applicant that the parcel
whose registered is sought is much smaller than that described in paragraph 5 of
Exhibit L. The explanation given by the surveyors Jose Mallanao, presented as
witness by the claimant, is a follows:
Because on the north side when we went around the lot and I asked for the
barrios of Maasin and Calabacao the applicant pointed to me a place very
far from where he was at the time and where he actually occupied the
land, and on the south side he indicated to me the provincial road. I asked
why he should not take the actual land indicated by this title and he told
me that he was not occupying that portion . That is the reason why I took
up the boundary on the south as provincial road. On the east side he
indicated to me the center of the municipality of Solana, barrios of Basi,
Nangalisan and Lanna, and on the west is a public land party bounded by
the barrios of Maguirig, and Cagguban and estero Pangul.
An applicant for registration of land, if he relies on a document evidencing his title
thereto, must prove not only the genuiness of his title but the indentity of the land
therein referred to. The document in such a case is either a basis of his claim for
registration or not at all. If as in this case, he only claims a portion of what is
included in his title, he must clearly prove that the property sought to be registered

is included in that title. The surveyor, Jose Mallannao, did not actually check up
the boundaries of parcel No. 5, as described in Exhibit L, and in testifying that
parcel No. 9, in Exhibit K, is smaller than that described as parcel No. 5 in Exhibit
L, he relied on hearsay. For instance, when asked whether north of barrios Iraga,
Bauan and Bangag of the land described in plan Exhibit K, he would locate the
sitios of Maasin and Calabacao, he replied: "They said that Calabbacao is north of
that barrio Iraga yet." (Emphasis ours.)
Aside from what has been said with reference to discrepanies in the boundaries, we
cannot overlook the fact that the area in Exhibit L is vaguely given as 7,000 brazas.
The surveyor for the applicant, Jose Mallannao, calculated the area of the property
described in paragraph 5 of Exhibit L on the basis of 7,000 square brazas or
49,000,00 square as 15,695,500 hectares more or less (s.n. pp. 820-822). The area
claimed here according to the amended application of February 26, 1930, and the
plan Exhibit K is 24,723,437 square meters. According to the applicant before his
occupation of the land ceded by Domingo Narag 1., only about 2 hectares were
cultivated. (s.n. p. 56, Gabriel Lasam.) And, with reference to the payment of the
land tax, the Solicitor-General in his brief (p. 12) makes the following observation:
The property appears to have been declared for taxation purposes as
evidenced by revisions of tax declarations, Exhibit G-20 and G-21 (pp.
136, 137, record). There had been previous declarations with an area of
about 294 hectares (id.) but, according to Exhibit G-22 (p. 138, record),
the area which was not previously declared contains 1,685 hectares.
With the exception of a statement in which it appears that tax was paid in
1902 (p. 140, id.) there appears in the record no tax receipts evidencing
the payment of taxes continuously from 1902 up to this time.
It is not necessary to pass upon the contention of the Solicitor-General that the
informacion testifical (Exhibit L) is no legal effect because of failure subsequently
to solicit composition title pursuant to the Royal Decree of June 25, 19880 (Fuster
vs. Director of Lands, G.R. No. 40129, Dec. 29, 1934), or to convert possession
into a registration of ownership in accordance with article 393 of the Mortgage law
(Fernandez Hermanos vs. Director of Lands, 57 Phil., 929), for even if we were to
accord all the legal force to this document (Exhibit L), it would not serve as a basis
for the registration of 24,723,437 square meters.
Having arrived at this conclusion as to Exhibit L, is the applicant entitled to
registration because of the required possession during the time prescribed by law?
We have examined the evidence on this point both testimonial and documentary,
and while there is evidence showing that the claimant might have possessed a
portion of the parcel claimed by him and the registration of which is sought, we
find the evidence lacking in certainly as to the particular portion occupied and the
extend thereof. Counsel for the applicant invokes the doctrine laid down by us in

Ramos vs. Director of Lands (39 Phil., 175, 180). (See also Roales vs. Director of
Lands, 51 Phil., 302, 304.) But it should be observed that the applicant of the
doctrine of constructive possession in that case is subject to certain qualifications,
and this court was careful to observe that among these qualifications is "one
particularly relating to the size of the tract in controversy with reference to the
portion actually in possession of the claimant." While, therefore, "possession in the
eyes of the law does not mean that a man has to have his feet on every square
meter of ground before it can be said that he is in possession", possession under
paragraph 6 of section 54 of Act No. 926, as amended by paragraph (b) of section
45 of Act No. 2874, is not gained by mere nominal claim. The mere planting of a
sign or symbol of possession cannot justify a Magellan like claim of dominion over
an immense tract of territory. Possession as a means of acquiring ownership, while
it may be constructive, is not a mere fiction. In the present case, upon the
description of 7,000 brazas as the area of the land said have been originally
possessed by Domingo Narag 1. and conveyed to the applicant, only two hectares
of which were according to the applicant cultivated at the time of such transfer, the
applicant would on the basis of the computation hereinabove referred to and given
at the trial by surveyor Jose Mallannao, be entitled under Exhibit L to more than
13,000 hectares, although only 2,432 odd hectares are now being sought for
registration in these proceedings. The fact, however, that he is claiming only a
portion of the land claimed by him to be included in his title, the further fact that
according to his own testimony he has given up more than 1,000 hectares to the
Bureau of Forestry, the discrepancies in the boundaries, his tax declarations, and
the existence of numerous homesteaders and claimants are significant and tend to
show that his possession over the entire portion of the land sought to be registered
is not "such as to apprise the community and the world that the entire land was for
his enjoyment." (Ramos vs. Director of Lands, supra.)

composicion" with the State. These oppositors denied tenants of the applicant
Lasam. After persual of the evidence presented by them, we are constrained to
accept the conclusion of the lower court that none of the portions or lots claimed by
them or any one of them has been sufficiently identified, either by the oral or
documentary evidence which they presented. In view thereof, and because of the
insufficiency of the evidence presented, we are of the opinion that the lower court
committed no error in dismissing their oppositions.
In view of the foregoing, the judgement of the lower court is reserved, without
prejudice to the filing by the applicant. Gabriel Lasam, of a new application and
plan covering the portion of the land actually occupied by him since July 25, 1894.
Upon the determination of that portion by the lower court, let judgement be
rendered accordingly. The remaining portion or portions of lot No. 9 as indicated
on plan Psu-67516 (Exhibit K) are hereby declared public lands, to be disposed of
or otherwise death with in accordance with law. Without pronouncement as to
costs. So ordered.

5.

[G.R. No. 109595. April 27, 2000]

CRISTETA CHUA-BURCE, petitioner, vs. COURT OF APPEALS AND

PEOPLE OF THE PHILIPPINES, respondents.
DECISION
QUISUMBING, J.:

Our attention is next directed to the decision of this court in Pamittan vs. Lasam
and Mallonga (60 Phil., 908) which according to counsel for the claimant Lasam,
is determinative of the ownership of the property now sought to be registered. Said
case refers to an action for partition between the heirs of Sofia Pamittan, wife of
Gabriel Lasam, originally brought in the Court of First Instance and appealed to
this court. The trial court in that case found that parcel No. 7 which is said to
correspond to parcel No. 9 sought to be registered in these proceedings
"although during the existence of the conjugal partnership, was proven to be the
exclusive property of the husband Gabriel Lasam". This court not have passed
upon the question whether parcel No. 7 was the same parcel No. 9 in these
proceedings; nor could it have passed upon the conflicting claims with reference to
parcel No. 9, now sought to be registered. Whatever was said in that case could not
bind the oppositors in the present case, who were not parties thereto.
The grounds for opposition of the various oppositors are divergent and are based
on (a) possession from time immemorial: (b) acquisition by inheritance, purchase
and donations propters nuptias and inter vivos; (c) payment of land taxes from
1906, 1915 and 1918 up to the filing of oppositions; and (d) acquisition "a titulo de

Subject of the present appeal by certiorari is the decision dated November 27,
1992 of the Court of Appeals in CA-G.R. CR No. 12037, (a) affirming in toto the
trial courts decision finding petitioner guilty of estafa, and (b) denying her Motion
for Reconsideration in a Resolution dated March 25, 1993. The Regional Trial
Court, Calapan, Oriental Mindoro, Branch 40, rendered a joint decision finding
petitioner guilty of estafa under Article 315, par. 1 (b) of the Revised Penal Code,
in Criminal Case No. C-2313, and likewise found petitioner liable for the amount
of P150,000.00 in Civil Case No. R-3733. Only the criminal case is before us for
review. h Y
The uncontroverted facts, as found by the Court of Appeals, are as follows:
On August 16, 1985, Ramon Rocamora, the Manager (of Metropolitan Bank and
Trust Company, Calapan Branch, Oriental Mindoro) requested Fructuoso Peaflor,
Assistant Cashier, to conduct a physical bundle count of the cash inside the vault,
which should total P4,000,000.00, more or less. During this initial cash count, they
discovered a shortage of fifteen bundles of One Hundred Pesos denominated bills

totalling P150,000.00. The One Hundred Peso bills actually counted was
P3,850,000.00 as against the balance of P4,000,000.00 in the Cash in Vault (CIV)
Summary Sheet, or a total shortage of P150,000.00. The next day, to determine if
there was actually a shortage, a re-verification of the records and documents of the
transactions in the bank was conducted. There was still a shortage of P150,000.00.
The bank initiated investigations totalling four (4) in all. The first was by Ramon
Rocamora, the Manager. The second was by the banks internal auditors headed by
Antonio Batungbakal. Then, the banks Department of Internal Affairs conducted
an independent investigation. Thereafter, the National Bureau of Investigation
(NBI) came in to investigate. All of these investigations concluded that there was a
shortage of P150,000.00, and the person primarily responsible was the banks Cash
Custodian, Cristeta Chua-Burce, the herein accused. Jksm
On November 4, 1985, unable to satisfactorily explain the shortage of
P150,000.00, the accuseds service with the bank was terminated.
To recover the missing amount, Metropolitan Bank and Trust Company
(Metrobank) filed a Civil Case for Sum of Money and Damages with Preliminary
Attachment and Garnishment docketed as Civil Case No. R-3733 against petitioner
and her husband, Antonio Burce. Esm
Prior to the filing of the Answer, the following Information for Estafa was filed
against petitioner:
"That on or about the 16th day of August 1985, and for a period
prior and subsequent thereto, the above-named accused, with
unfaithfulness or abuse of confidence, and with intent to defraud,
did then and there wilfully, unlawfully, and feloniously, in her
capacity as Cash Custodian of the Metrobank, Calapan Branch,
take from the Banks Vault the amount of ONE HUNDRED
FIFTY THOUSAND (P150,000.00) PESOS, which is under her
direct custody and/or accountability, misappropriate and convert
to her own personal use and benefit, without the knowledge and
consent of the offended party, despite repeated demands for her
to account and/or return the said amount, she refused and failed,
and still fails and refuses to the damage and prejudice of the
Metrobank, Calapan Branch, in the aforementioned amount of
ONE HUNDRED FIFTY THOUSAND (P150,000.00) PESOS.
Contrary to Article 315 of the Revised Penal Code.

Calapan, Oriental Mindoro, November 27, 1985."1[1]

Both civil and criminal cases were raffled to the same branch of the Regional Trial
Court of Calapan, Oriental Mindoro, Branch 40. Esmsc
Thereafter, petitioner moved for the suspension of the criminal case on the ground
of the existence of a prejudicial question, viz., that the resolution of the civil case
was determinative of her guilt or innocence in the criminal case.2[2] The trial
court, over the vehement opposition of the private and public prosecutors, granted
the motion and suspended the trial of the criminal case.3[3] On petition for
certiorari to the Court of Appeals, the appellate court ruled that there was no
prejudicial question.4[4]
Petitioner was arraigned and assisted by counsel de parte, entered a plea of not
guilty.5[5] While the trial of the criminal case was suspended, the trial of the civil
case continued. At the time of arraignment, the civil case was already submitted for
decision. Hence, during the pre-trial conference of the criminal case, the parties
agreed to adopt their respective evidence in the civil case as their respective
evidence in the criminal case.6[6] The trial court ordered the parties to submit their
written agreement pursuant to Section 4 of Rule 118 of the Rules of Court.7[7]
Thereafter, petitioner, duly assisted by her counsel, with the conforme of the public
prosecutor, entered into the following pre-trial agreement:8[8]
"COMES NOW, the accused, assisted by counsel, and unto this
Honorable Court most respectfully submits this Pre-Trial
agreement:

1. That the evidence already adduced by the plaintiff in Civil

Case No. R-3733 will be adopted by the prosecution as its
evidence in Criminal Case No. C-2313;

Pursuant to the pre-trial agreement, the public prosecutor filed a Motion to Adopt
Evidence.9[9] Both the pre-trial agreement and said Motion were granted by the
trial court.10[10]

2. That the evidence to be adduced by the defendant in Civil

Case No. R-3733 will also be adopted as evidence for the defense
in Criminal Case No. C-2313.

On March 18, 1991, the trial court rendered a consolidated decision11[11] finding
petitioner (a) guilty of estafa under Article 315 (1) (b) of the Revised Penal Code in
the criminal case, and (b) liable for the amount of P150,000.00 in the civil case.
The dispositive portion of decision provides -

WHEREFORE, premises considered, it is prayed that the

foregoing pre-trial agreement be admitted in compliance with the
Order of this Court dated April 19, 1988.
RESPECTFULLY SUBMITTED.
Calapan, Oriental Mindoro, August 20, 1990.
CRISTETA CHUA-BURCE (sgd.)
Accused
Assisted By:
RODRIGO C. DIMAYACYAC (sgd.)
Defense Counsel
San Vicente, Calapan
Oriental Mindoro
IBP O.R. No. 292575
May 11, 1990
Quezon City
With Conformity:
EMMANUEL S. PANALIGAN (sgd.)
Prosecuting Fiscal

- In Criminal Case No. C-2313 WHEREFORE, the Court hereby finds the accused Cristeta
Chua-Burce guilty beyond reasonable doubt of the crime of
Estafa, punishable under Art. 315, paragraph 1 (b) of the Revised
Penal Code, which imposes a penalty of prision correccional in
its maximum period to prision mayor in its minimum period but
considering that the amount involved exceeds P22,000.00, the
penalty provided for shall be imposed in its maximum period,
adding one year for each additional P10,000.00, but the total
amount not to exceed twenty years. Esmmis
Applying the Indeterminate Sentence Law, the imposable penalty
shall be one degree lower as minimum of arresto mayor with a
penalty range of One Month and One Day to Six Months, as
minimum to prision mayor in its maximum period, as maximum,
or a penalty of Six years to Twelve Years. Considering the
mitigating circumstance of voluntary surrender, the court hereby
imposes upon the accused to suffer imprisonment from SIX (6)
MONTHS of arresto mayor in its maximum period, as minimum,
to EIGHT (8) YEARS of prision mayor, in its minimum period,
as maximum. The civil liability shall not be imposed in this case
due to a separate civil action. Esmso
- In Civil Case No. R-3733 WHEREFORE, judgment is hereby rendered in favor of the
plaintiff Metrobank, ordering defendants Cristeta Chua-Burce

and Antonio Burce, spouses, to pay Metrobank the amount of

P150,000.00 representing the amount misappropriated with the
legal rate of six percent (6%) per annum from August 15, 1985
until fully paid and to pay the costs of suit.
SO ORDERED."
Petitioner seasonably appealed her conviction in the criminal case to the Court of
Appeals. Petitioner filed a separate appeal in the civil case.
In a decision dated November 27, 1992,12[12] the Court of Appeals affirmed the
trial courts decision in toto. Petitioners Motion for Reconsideration was likewise
denied.13[13] Hence, the recourse to this Court. Msesm
Petitioner raises the following issues:14[14]
1. IS THE RESULT OF POLYGRAPH EXAMINATION
ADMISSIBLE IN EVIDENCE?
2. CAN THE PRESIDING JUDGE OF THE REGIONAL
TRIAL COURT ADMIT IN EVIDENCE THE EVIDENCE
WHICH WAS ALREADY DENIED ADMISSION IN THE
ORDER OF THE FORMER JUDGE OF THE SAME COURT?
3.
DOES
PRIMA
FACIE
PRESUMPTION
OF
MISAPPROPRIATION OR CONVERSION EXISTS (sic)
AGAINST THE PETITIONER WHEN THERE WERE OTHER
PERSONS WHO HAD DIRECT AND GREATER ACCESS IN
THE CASH-IN-VAULT?
4. IS RULE 111 SECTION 2 (a) OF THE REVISED RULES
ON CRIMINAL PROCEDURE APPLICABLE IN (sic)THE
CASE AT BAR?
5. WAS THERE A VALID PROCEEDING WHEN THE
FISCAL WAS NOT ACTUALLY PRESENT AND DID NOT

CONTROL AND SUPERVISE THE PROSECUTION OF THE

CASE? Exsm
In gist, (1) petitioner contends that the trial court erred in taking into account the
results of the polygraph examination as circumstantial evidence of guilt
considering the inherent unreliability of such tests, and the fact that the previous
trial judge who handled the case already ruled such evidence as inadmissible; (2)
petitioner insists that there can be no presumption of misappropriation when there
were other persons who had access to the cash in vault; and (3) petitioner questions
the validity of the trial of criminal case considering that the pre-trial agreement
dispensed with the intervention of the public prosecutor in a full-blown trial of the
criminal case. Kyle
The Office of the Solicitor General, for the State, contends that the guilt of
petitioner has been proven beyond reasonable doubt by the following facts which
were duly established during trial - first, petitioner was the cash custodian who was
directly responsible and accountable for the cash-in-vault. Second, the other
persons who had access to the vault facilities never used the duplicate keys to open
the safety deposit boxes and the cash safe from where the P100.00 bill
denominations were located. In fact, the duplicate keys were offered in evidence
still in their sealed envelopes. Third, alterations and superimposition on the cashin-vault summary sheet were made by petitioner to cover the cash shortage. Lastly,
there was a valid joint trial of the civil and criminal cases.
The crucial issues, in our mind, are (1) whether there was a valid trial of the
criminal case, and (2) whether the elements of the crime of estafa under Article 315
(1) (b) of the Revised Penal Code were duly proven beyond reasonable doubt.
Kycalr
First, petitioner assails the validity of the proceedings in the trial court on the
ground that the public prosecutor did not intervene and present any evidence
during the trial of the criminal case. The records clearly show that the pre-trial
agreement was prepared by petitioner with the conforme of the public prosecutor.
Thereafter, petitioner filed a consolidated memorandum for both civil and criminal
cases. Section 5 of Rule 11015[15] requires that all criminal actions shall be
prosecuted under the direction and control of the public prosecutor. The rationale
behind the rule is "to prevent malicious or unfounded prosecutions by private
persons."16[16] The records show that the public prosecutor actively participated
in the prosecution of the criminal case from its inception. It was during pre-trial
conference when the parties agreed to adopt their respective evidence in the civil

case to the criminal case. This is allowed under Section 2 (e) of Rule 118 of the
Rules of Court17[17] which provides that during pre-trial conference, the parties
shall consider "such other matters as will promote a fair and expeditious trial." The
parties, in compliance with Section 4 of Rule 118,18[18] reduced to writing such
agreement. Petitioner, her counsel, and the public prosecutor signed the agreement.
Petitioner is bound by the pre-trial agreement, and she cannot now belatedly
disavow its contents.19[19]
On the second issue. Petitioner was charged with the crime of estafa under Article
315 (1) (b) of the Revised Penal Code.20[20] In general, the elements of estafa are:
(1) that the accused defrauded another (a) by abuse of confidence or (b) by means
of deceit; and (2) that damage or prejudice capable of pecuniary estimation is
caused to the offended party or third person.21[21] Deceit is not an essential
requisite of estafa with abuse of confidence, since the breach of confidence takes
the place of the fraud or deceit, which is a usual element in the other estafas.22[22]
The elements of estafa through conversion or misappropriation under Art. 315 (1)
(b) of the Revised Penal Code are:23[23]
(1) that personal property is received in trust, on commission, for
administration or under any other circumstance involving the
duty to make delivery of or to return the same, even though the
obligation is guaranteed by a bond;
(2) that there is conversion or diversion of such property by the
person who has so received it or a denial on his part that he
received it;

(3) that such conversion, diversion or denial is to the injury of

another and
(4) that there be demand for the return of the property.
Have the foregoing elements been met in the case at bar? We find the first element
absent. When the money, goods, or any other personal property is received by the
offender from the offended party (1) in trust or (2) on commission or (3) for
administration, the offender acquires both material or physical possession and
juridical possession of the thing received.24[24] Juridical possession means a
possession which gives the transferee a right over the thing which the transferee
may set up even against the owner.25[25] In this case, petitioner was a cash
custodian who was primarily responsible for the cash-in-vault. Her possession of
the cash belonging to the bank is akin to that of a bank teller, both being mere bank
employees. Calrky
In People v. Locson,26[26] the receiving teller of a bank misappropriated the
money received by him for the bank. He was found liable for qualified theft on the
theory that the possession of the teller is the possession of the bank. We explained
in Locson that "The money was in the possession of the defendant as receiving
teller of the bank, and the possession of the defendant was the
possession of the bank. When the defendant, with grave abuse of
confidence, removed the money and appropriated it to his own
use without the consent of the bank, there was the taking or
apoderamiento contemplated in the definition of the crime of
theft."27[27]
In the subsequent case of Guzman v. Court of Appeals,28[28] a travelling sales
agent misappropriated or failed to return to his principal the proceeds of things or
goods he was commissioned or authorized to sell. He was, however, found liable
for estafa under Article 315 (1) (b) of the Revised Penal Code, and not qualified

theft. In the Guzman case, we explained the distinction between possession of a

bank teller and an agent for purposes of determining criminal liability -

RESOLUTION
MELO, J.:

"The case cited by the Court of Appeals (People vs. Locson, 57

Phil. 325), in support of its theory that appellant only had the
material possession of the merchandise he was selling for his
principal, or their proceeds, is not in point. In said case, the
receiving teller of a bank who misappropriated money received
by him for the bank, was held guilty of qualified theft on the
theory that the possession of the teller is the possession of the
bank. There is an essential distinction between the possession by
a receiving teller of funds received from third persons paid to the
bank, and an agent who receives the proceeds of sales of
merchandise delivered to him in agency by his principal. In the
former case, payment by third persons to the teller is payment to
the bank itself; the teller is a mere custodian or keeper of the
funds received, and has no independent right or title to retain or
possess the same as against the bank. An agent, on the other
hand, can even assert, as against his own principal, an
independent, autonomous, right to retain money or goods
received in consequence of the agency; as when the principal
fails to reimburse him for advances he has made, and indemnify
him for damages suffered without his fault (Article 1915, [N]ew
Civil Code; Article 1730, old)." Mesm
Petitioner herein being a mere cash custodian had no juridical possession over the
missing funds. Hence, the element of juridical possession being absent, petitioner
cannot be convicted of the crime of estafa under Article 315, No. 1 (b) of the
Revised Penal Code.29[29]
WHEREFORE, the petition is hereby granted and petitioner is ACQUITTED of
the crime of estafa under Article 315 (1) (b) of the Revised Penal Code. Petitioner
is ordered RELEASED from custody unless she is being held for some other lawful
cause. No costs. Slx
SO ORDERED.
6.

[G.R. No. 116220. December 6, 2000]

SPOUSES ROY PO LAM and JOSEFA ONG PO LAM, petitioners, vs. COURT
OF APPEALS and FELIX LIM now JOSE LEE, respondents.

On October 13, 1999, this Division, under the ponencia of Mr. Justice Purisima
handed down a decision declaring petitioners, the spouses Roy Po Lam and Josefa
Ong Po Lam, as transferees pendente lite and not purchasers in good faith of Lots
No. 1557 and 1558 and ordering them to reconvey said lots to private respondent
Jose Lee.
Forthwith, petitioners filed a motion for reconsideration which was received hereat
on November 15, 1999. Respondents thereupon filed their opposition, as well as a
separate comment, to which petitioners submitted a reply.
Regrettably, however, for one reason or another, the motion for reconsideration
remained unacted upon until the retirement of Justice Purisima in October, 2000,
notwithstanding the fact that it was calendared or placed in the Courts agenda a
number of times, as well as the urgings of both parties to have the matter resolved.
Thus, with Justice Purisima leaving the Court and, in accordance with A.M. No.
99-8-99 promulgated by the Court En Banc on February 15, 2000, the matter of the
motion for reconsideration was assigned by raffle to herein ponente for study and
the preparation of the appropriate action.
A review of the facts, uncontroverted though they are, is in order.
Lots No. 1557 and 1558 are prime commercial lots located in the heart of Legaspi
Citys commercial district. These were sold by Lim Kok Chiong to the Legaspi
Avenue Hardware Company (hereafter referred to as LAHCO) sometime in the
early 60s. On December 4, 1964, however, Felix Lim, Lim Kok Chiongs brother,
filed a complaint with the then Court of First Instance of Albay against his brother
and LAHCO to annul the deeds of sale covering said lots on the ground that the
sale included the 3/14 pro-indiviso portion of the lots which Felix Lim had inherited
from his foster parents. The complaint was docketed as Civil Case No. 2953 of the
Court of First Instance of Albay.
On January 27, 1965, Felix Lim filed with the Register of Deeds of Albay a notice
of lis pendens over the two lots. The same was inscribed on Transfer Certificates
of Title No. 2580 and 2581, covering Lots No. 1557 and 1558, respectively. Later,
the trial court, on motion of Felix Lim, dropped the case against Lim Kok Chiong.
On March 15, 1969, the trial court rendered a decision declaring LAHCO to be the
absolute owner of the two above-mentioned lots. As a consequence of its decision,
the trial court ordered the cancellation of the notice of lis pendens inscribed on the
titles of the two lots. Pursuant to this order, the notice of lis pendens inscribed on
TCT No. 2580 was cancelled. However, the notice of lis pendens annotated on

TCT No. 2581 remained uncancelled, allegedly because the duplicate owners
copy of said TCT was with the Continental Bank, Lot No. 1558 having been
mortgaged by LAHCO to said bank.

execute the March 11, 1981 resolution of the Court of Appeals. Both motions were
denied. On appeal (CA-G.R. No. 08533-CV), the Court of Appeals upheld the
denial. Felix Lim appealed the decision to this Court.

Aggrieved, Felix Lim appealed to the Court of Appeals. On May 28, 1970, and
during the pendency of the appeal, CA-G.R. No. 44770-R, LAHCO sold the two
lots to herein petitioners, the spouses Roy Po Lam and Josefa Ong Po Lam. On
May 20, 1974, petitioners, by virtue of the court order adverted to earlier, had the
notice of lis pendens still inscribed on TCT No. 2581 cancelled. Felix Lim did not
move for the reinstatement of the cancelled notices of lis pendens on TCT No.
2580 and 2581. Thereafter, said certificates of title were themselves cancelled and
replaced by TCT No. 8102 and 13711, respectively, in the name of petitioners.

In the meantime, in June, 1970, or one month after the Po Lam spouses had
purchased the two lots from LAHCO, they leased the commercial building erected
on Lot No. 1557 to private respondent Jose Lee for one year. After the contract
expired, Jose Lee continued to occupy the same, paying monthly rentals therefor.
However, after September 15, 1981, Jose Lee refused to pay rentals to the Po Lam
spouses, informing them that he would deposit the same in court since Felix Lim
had promised to sell the property to him. Lees failure to pay rentals prompted the
Po Lam spouses to file an unlawful detainer case against him with the Metropolitan
Trial Court of Legaspi City.

On April 29, 1980, the Court of Appeals affirmed the decision of the trial court in
Civil Case No. 2953, appellant Felix Lims counsel receiving a copy of thereof on
May 16, 1980. On May 23, 1980, counsel for Felix Lim filed a motion for
extension of time to file a motion for reconsideration. The appellate court gave
Felix Lim up to June 20, 1980 to file one. On June 17, 1980, he filed a motion for
reconsideration, which was, however, denied. Without leave of court, Felix Lim
filed, on July 14, 1980, a second motion for reconsideration. This was acted upon
favorably by the Court of Appeals on March 11, 1981, with the appellate court
declaring that Felix Lim, by returning P20,000.00 to LAHCO, could exercise the
right of redemption over the two lots sold by Lim Kok Chiong to LAHCO.
Although LAHCO asked this Court for an extension of time to file a petition for
review, none was ever filed, for which reason the Court remanded the case to the
trial court for execution.
On November 12, 1981, Felix Lim moved, in Civil Case No. 2953, to have the
March 11, 1981 resolution of the Court of Appeals annotated on TCT No. 8102
and 13711. He also moved for the issuance of a writ of execution to enforce said
resolution. Likewise, he filed a motion praying that the Clerk of Court execute a
deed of conveyance over the disputed lots in his favor. All these motions were
denied by the trial court on the ground that the Po Lam spouses could not be bound
thereby since they were not impleaded as party-litigants in Civil Case No. 2953 or
CA-G.R. No. 44770-R. However, the trial court reserved to Felix Lim the right to
institute an action on whether or not the acquisition of the properties in question by
spouses Roy Po Lam and Josefa Ong Po Lam were made in good faith or bad
faith.
In consonance with this ruling, Felix Lim filed a complaint for reconveyance and
annulment of the sale and titles of said lots with the Regional Trial Court of
Legaspi City, which was docketed therein as Civil Case No. 6767.
On September 19, 1985, Felix Lim filed with the trial court, in the old case, Civil
Case No. 2953, a motion to include as defendants the Po Lam spouses, as well as to

On October 29, 1990, Felix Lim assigned all his rights to and interests in the
disputed lots to Jose Lee, who then substituted Felix Lim as party plaintiff, now
private respondent.
On December 19, 1993, the Metropolitan Trial Court of Legaspi City declared the
Po Lam spouses to be the lawful owners of Lot No. 1557. On appeal, said
judgment was affirmed by the regional trial court and thereafter, by the Court of
Appeals in CA-G.R. No. 12316-SP. Aggrieved, Jose Lee filed an appeal with this
Court, which consolidated the case with the appeal filed in CA-G.R. No. 08533CV where the trial court in the original 1965 case refused to have petitioners
impleaded as defendants, and to execute the March 11, 1981 resolution of the
Court of Appeals, were upheld by the appellate court.
It must be mentioned that in both CA-G.R. No. 12316-SP and CA-G.R. No. 08533CV, the appellate court ruled that the March 11, 1981 resolution of the Court of
Appeals in CA-G.R. No. 44770-R was null and void on the ground that the
decision it had issued earlier on April 29, 1980 had already become final and
executory when the above-said resolution was promulgated. The appellate court
ruled that Felix Lims counsel should not have filed a motion for extension of time
to file a motion for reconsideration, the same being a prohibited pleading under the
rule laid down in Habaluyas v. Japson (138 SCRA 46 [1985]). Being a prohibited
pleading, it was held that the extension granted to Lim did not arrest the running of
the 15-day period. Thus, when Lim filed his motion for reconsideration on June
17, 1980, the same was already filed out of time, he having received a copy of the
judgment of affirmance on May 16, 1980.
The above finding of the appellate court was, however, debunked by this Court in
G.R. No. 84145-55 (Lim v. Court of Appeals, 188 SCRA 23 [1988]) where we held
that Habaluyas v. Japson (supra) must be applied prospectively so that when
petitioner Lim filed thru registered mail on May 23, 1980 his motion for extension

of time to file a motion for reconsideration, the motion was deemed properly filed
contrary to the respondent courts ruling that it was a prohibited pleading.
Ruling on the appeals filed from CA-G.R. No. 12316-SP and CA-G.R. No. 08533CV, this Court thus declared, on February 18, 1988, in Lim vs. CA cited in the
immediately preceding paragraph that:
ACCORDINGLY, the decisions appealed from are modified. The portions of the
appealed decisions dealing with the March 11, 1981 resolution in CA-G.R. No.
44770-R are reversed and set aside and the said resolution is ordered reinstated.
The decisions are affirmed in all other respects. Costs against private respondents.
SO ORDERED.
In the interim, Civil Case No. 6767 for reconveyance and annulment of sale and
titles filed by Felix Lim (now Jose Lee) went on until, on January 14, 1992, the
Regional Trial Court of Legaspi City rendered a decision declaring the spouses
Roy Po Lam and Josefa Ong Po Lam as transferees pendente lite and not
purchasers in good faith. It held that the Po Lam spouses were bound by the March
11, 1981 resolution rendered in CA-G.R. No. 44770-R. The Po Lam spouses
forthwith appealed to the Court of Appeals (CA-G.R. CV No. 37452) but said
Court, on June 30, 1993, affirmed the trial courts decision.
The Po Lam spouses thus filed a petition for certiorari with this Court. On
October 13, 1999, we denied the petition and affirmed in toto the decision of the
Court of Appeals in CA-G.R. CV No. 37452. We held that the Po Lam spouses
could not be deemed buyers in good faith, ratiocinating in the process:
As to Lot 1558, there is no question that they (petitioners) cannot be deemed
buyers in good faith. The annotation of lis pendens on TCT No. 2581 which
covers Lot 1558, served as notice to them that the said lot is involved in a pending
litigation. Settled is the rule that one who deals with property subject of a notice of
lis pendens cannot invoke the right of a purchaser in good faith. Neither can he
acquire better rights than those of his predecessor in interest. A transferee
pendente lite stands in the shoes of the transferor and is bound by any judgment or
decree which may be rendered for or against the transferor. It is thus beyond cavil
that the herein petitioners, who purchased Lot 1558 subject of a notice of lis
pendens, are not purchasers in good faith and are consequently bound by the
Resolution dated March 11, 1981 of the Court of Appeals.
Can petitioners then be treated purchasers in good faith of Lot 1557 covered by
TCT No. 2580 considering that the notice of lis pendens thereon had been already
cancelled at the time of the sale? We rule in the negative. It is a firmly settled
jurisprudence that a purchaser cannot close his eyes to facts which should put a
reasonable man on guard and claim that he acted in good faith in the belief that

there was no defect in the title of the vendor. His mere refusal to believe that such
a defect exist, or his willful closing of his eyes to the possibility of the existence of
a defect on his vendors title, will not make him innocent purchaser for value, if it
develops afterwards that the title was in fact defective, and it appears that he had
notice of such defect as would have led to its discovery had he acted with that
measure of precaution which may reasonably be required of a prudent man in like
situation.
In the case under consideration, there exist circumstances which should have
placed the herein petitioners on guard. As aptly stressed upon by the respondent
court, while it is true that when the petitioners purchased Lot 1557, the notice of lis
pendens affecting said lot had been cancelled, it could not be denied that such
inscription appears on the Transfer Certificate of Title of the said lot together with
the cancellation of the notice of lis pendens. This fact coupled with the noncancellation of the notice of lis pendens on Transfer Certificate of Title No. 2581
covering Lot 1558, should have sufficiently alerted the petitioners vis--vis a
possible defect in the title of LACHO, especially so that Lots 1557 and 1558 were
simultaneously sold to the petitioners in a single deed of sale executed on May 28,
1969.
Undeterred, the Po Lam spouses filed a motion for reconsideration, alleging, inter
alia, that it was error to hold them as purchasers in bad faith.
The motion for reconsideration is impressed with merit.
It must be stressed that the sole basis for finding petitioners to be purchasers in bad
faith was the subsistence of the notice of lis pendens inscribed on TCT No. 2581,
which covered Lot No. 1558, at the time petitioners-spouses purchased the lots in
dispute. And since Lot No. 1558 was sold simultaneously with Lot No. 1557, even
if the notice of lis pendens on Lot No. 1557 had already been cancelled, petitioners
were held to be purchasers in bad faith even in regard to Lot No. 1557.
However, it must be pointed out that even if a notice of lis pendens on TCT No.
2581 (Lot No. 1558) was still subsisting at the time petitioners bought the property
from LAHCO, there also was a court order ordering that the annotation be
cancelled, as in fact, it was cancelled on May 20, 1974.
A possessor in good faith has been defined as one who is unaware that there exists
a flaw which invalidates his acquisition of the thing (See Article 526, Civil Code).
Good faith consists in the possessors belief that the person from whom he received
the thing was the owner of the same and could convey his title (Pio v. CA, 198
SCRA 434 [1991]). In this case, while petitioners bought Lot No. 2581 from
LAHCO while a notice of lis pendens was still annotated thereon, there was also
existing a court order canceling the same. Hence, petitioners cannot be considered
as being aware of a flaw which invalidates their acquisition of the thing since the

alleged flaw, the notice of lis pendens, was already being ordered cancelled at the
time of the purchase. On this ground alone, petitioners can already be considered
buyers in good faith.
More importantly, however, the notice of lis pendens inscribed on TCT No. 2581
was cancelled on May 20, 1974, pursuant to the order of the trial court in Civil
Case No. 2953. Felix Lim did not move for the reinstatement of the cancelled
notices of lis pendens. What is the effect of this cancellation? To follow the prior
ruling of the Court in the instant case, the cancellation of the notice of lis pendens
would have no effect. Regardless of the cancellation of the notice of lis pendens,
the Po Lam spouses are still considered as having notice of a possible defect in the
title of LAHCO, making them purchasers in bad faith.
As we shall elucidate, hewing to such an interpretation misunderstands the nature
and effect of a notice of lis pendens. The meaning, nature, recording, and effects
of a notice of lis pendens are clearly stated in Section 14, Rule 13 of the 1997
Rules of Civil Procedure, thus:
SEC. 14. Notice of lis pendens. In an action affecting the title or the right of
possession of real property, the plaintiff and the defendant, when affirmative relief
is claimed in his answer, may record in the office of the registry of deeds of the
province in which the property is situated a notice of the pendency of the action.
Said notice shall contain the names of the parties and the object of the action or
defense, and a description of the property in that province affected thereby. Only
from the time of filing such notice for record shall a purchaser, or encumbrancer of
the property affected thereby, be deemed to have constructive notice of the
pendency of the action, and only of its pendency against the parties designated by
their real names.
The notice of lis pendens hereinabove mentioned may be cancelled only upon
order of the court, after proper showing that the notice is for the purpose of
molesting the adverse party, or that it is not necessary to protect the right of the
party who caused it to be recorded.
Lis pendens literally means a pending suit or a pending litigation; and the doctrine
of lis pendens has been defined as the jurisdiction, power, or control which a court
acquires over property involved in a suit, pending the continuance of the action,
and until final judgment therein (54 C.J.S. Lis Pendens 1). A notice of lis
pendens is an announcement to the whole world that a particular real property is in
litigation, serving as a warning that one who acquires an interest over said property
does so at his own risk, or that he gambles on the result of the litigation over the
said property (AFPMBAI v. CA, G.R. No. 104769, March 3, 2000). The filing of a
notice of lis pendens charges all strangers with a notice of the particular litigation
referred to therein and, therefore, any right they may thereafter acquire on the
property is subject to the eventuality of the suit (Laroza v. Guia, 134 SCRA 341

[1985]). Notice of lis pendens has been conceived and, more often than not,
availed of, to protect the real rights of the registrant while the case involving such
rights is pending resolution or decision. With the notice of lis pendens duly
recorded, and while it remains uncancelled, the registrant could rest secure that he
would not lose the property or any part of it during the litigation (People v.
Regional Trial Court of Manila, 178 SCRA 299 [1989]).
The filing of a notice of lis pendens in effect (1) keeps the subject matter of the
litigation within the power of the court until the entry of the final judgment so as to
prevent the defeat of the latter by successive alienations; and (2) binds a purchaser
of the land subject of the litigation to the judgment or decree that will be
promulgated thereon whether such a purchaser is a bona fide purchaser or not; but
(3) does not create a non-existent right or lien (Somes v. Government, 62 Phil. 432
[1935]).
The doctrine of lis pendens is founded upon reason of public policy and necessity,
the purpose of which is to keep the subject matter of the litigation within the power
of the court until the judgment or decree shall have been entered; otherwise by
successive alienations pending the litigation, its judgment or decree shall be
rendered abortive and impossible of execution (Laroza v. Guia, supra; People v.
Regional Trial Court of Manila, supra). The doctrine of lis pendens is based on
considerations of public policy and convenience, which forbid a litigant to give
rights to others, pending the litigation, so as to affect the proceedings of the court
then progressing to enforce those rights, the rule being necessary to the
administration of justice in order that decisions in pending suits may be binding
and may be given full effect, by keeping the subject matter in controversy within
the power of the court until final adjudication, that there may be an end to
litigation, and to preserve the property that the purpose of the pending suit may not
be defeated by successive alienations and transfers of title (54 C.J.S. Lis Pendens,
supra).
From the above, it can be seen that the basis of the doctrine of lis pendens is public
policy and convenience, under the view that once a court has taken cognizance of a
controversy, it should be impossible to interfere with consummation of the
judgment by any ad interim transfer, encumbrance, or change of possession (51
Am Jur 2d, Lis Pendens, 3).
However, to hold that the Po Lam spouses are still bound by the results of the
litigation over the property, despite and notwithstanding the cancellation of the
notices of lis pendens prior to the termination of litigation, would consider the
doctrine of lis pendens as one of implied or constructive notice. This view is
erroneous.
While the doctrine of lis pendens is frequently spoken of as one of implied or
constructive notice, according to many authorities, the doctrine is not founded on

any idea of constructive notice, since its true foundation rests, as has already been
stated, on principles of public policy and necessity. The lis pendens annotation,
although considered a general notice to all the world, . . . it is not correct to speak
of it as part of the doctrine of notice; the purchaser pendente lite is affected, not by
notice, but because the law does not allow litigating parties to give to others,
pending the litigation, rights to the property in dispute as to prejudice the opposite
party. The doctrine rests upon public policy, not notice (Tirado v. Sevilla, 188
SCRA 321 [1990]). The doctrine of lis pendens, as generally understood and
applied by the courts of this country, is not based upon presumption of notice, but
upon a public policy, imperatively demanded by a necessity which can be met and
overcome in no other way. It is careless use of language which has led judges to
speak of it as notice, because it happens to have in some instance similar effect
with notice (Smith v. Kimball, 13 P. 801, 36 Kan. 474).

1981, to have his claim on the disputed pieces of property recognized. Felix Lims
long inaction and passivity in asserting his rights over the disputed property
precludes him from recovering them from petitioners-spouses.
WHEREFORE, premises considered, the Motion for Reconsideration of
petitioners-spouses Roy Po Lam and Josefa Ong Po Lam is hereby GRANTED.
Consequently, the decision dated October 13, 1999, is VACATED and SET
ASIDE. A new judgment is hereby entered declaring petitioners-spouses to be
PURCHASERS IN GOOD FAITH and Transfer Certificates of Title No. 8102 and
13711 in their name valid, without prejudice on the part of private respondent Jose
Lee to file a separate action for reimbursement for the value of said property from
the Legaspi Avenue Hardware Company.
SO ORDERED.

And since the doctrine rests on public policy, not notice, upon the cancellation of
the notice of lis pendens, the Po Lam spouses cannot then be considered as having
constructive notice of any defect in the title of LAHCO as to make them
transferees pendente lite and purchasers in bad faith of Lots No. 1557 and 1558.
To hold otherwise would render nugatory the cancellation of the notices of lis
pendens inscribed on TCT Nos. 2580 and 2581. Differently stated, to hold the Po
Lam spouses still bound by the notice of lis pendens inscribed on TCT No. 2581
despite its subsequent cancellation on May 20, 1974, would render said
cancellation an empty, unavailing, and purposeless act, which could not have been
the intent of the law. Lex neminem cogit ad van seu inutilia peragenda. The law
will not compel one to do useless things.
As adverted to earlier, while the notice of lis pendens is duly recorded and as long
as it remains uncancelled, the litigant can rest secure that he would not lose the
property or any part of it during litigation. Conversely, cancellation of the notice of
pendency terminates the effects of such notice. Therefore, with the cancellation of
the notices of lis pendens on TCT No. 2580 and 2581, the effects of such notice
were terminated, resulting in the Po Lam spouses not being bound thereby. In fine,
they cannot be considered transferees pendente lite and purchasers in bad faith of
the property.
Moreover, since its operation is arbitrary and it may be harsh in particular
instances, the doctrine of lis pendens is to be strictly construed and applied. It
should not be extended without strict necessity (54 C.J.S. Lis Pendens 1). To
consider the Po Lam spouses still bound by the notice of lis pendens even after the
same had been cancelled would be extending the doctrine when there is no reason
therefor.
Lastly, Felix Lims claim is barred by the equitable principle of laches. At the time
the notices of lis pendens were cancelled in 1969 and 1974, Felix Lim did not
move to reinstate the same. Nor did he act when TCT No. 2580 and 2581 were
replaced by TCT No. 8102 and 13711. Instead, he waited seven years, or until

7.

[G.R. No. 115548. March 5, 1996]

STATE INVESTMENT HOUSE INC., petitioner, vs. COURT OF APPEALS, ET

AL., respondents.
DECISION
FRANCISCO, J.:
The factual background of the case, aptly summarized in the decision of the Office
of the President and cited by respondent Court of Appealsx[1] in its assailed
decision, and which we have verified to be supported by the record is herein
reproduced as follows:
The uncontroverted facts of the case as recited in the decision of the Office of the
President are as follows:
Records show that, on October 15, 1969, Contract to Sell No. 36 was executed by
the Spouses Canuto and Ma. Aranzazu Oreta, and the Solid Homes, Inc. (SOLID),
involving a parcel of land identified as Block No. 8, Lot No. 1, Phase I of the
Capitol Park Homes Subdivision, Quezon City, containing 511 square meters for a
consideration of P39,347.00. Upon signing of the contract, the spouses Oreta made
payment amounting to P7,869.40, with the agreement that the balance shall be
payable in monthly installments of P45 1.70, at 12% interest per annum.
On November 4, 1976, SOLID executed several real estate mortgage contracts in
favor of State Investment Homes, (sic) Inc. (STATE) over its subdivided parcels of
land, one of which is the subject lot covered by Transfer Certificate of Title No.
209642.

For Failure of SOLID to comply with its mortgage obligations contract, STATE
extra-judicially foreclosed the mortgaged properties including the subject lot on
April 6, 1983, with the corresponding certificate of sale issued therefor to STATE
annotated at the back of the titles covering the said properties on October 13, 1983.

for proper disposition. On the other hand, SOLID does not appear to have joined
herein petitioner in this petition for review.xi[2]

On June 23, 1984, SOLID thru a Memorandum of Agreement negotiated for the
deferment of consolidation of ownership over the foreclosed properties by
committing to redeem the properties from STATE.

In a decision dated May 19, 1994, respondent court sustained the judgment of the
Office of the President. Hence, this petition substantially anchored on these two
alleged errors, namely: (1) error in ruling that private respondent spouses Oretas
unregistered rights over the subject property are superior to the registered mortgage
rights of petitioner State Investment House, Inc. (STATE); and (2) error in not
applying the settled rule that that persons dealing with property covered by torrens
certificate of title are not required to go beyond what appears on the face of the
title.

On August 15, 1988, the spouses filed a complaint before the Housing and Land
Use Regulatory Board, HLRB, against the developer SOLID and STATE for
failure on the part of SOLID to execute the necessary absolute deed of sale as well
as to deliver title to said property x x x in violation of the contract to sell x x x,
despite full payment of the purchase price as of January 7, 1981. In its Answer,
SOLID, by way of alternative defense, alleged that the obligations under the
Contract to Sell has become so difficult x x x the herein respondents be partially
released from said obligation by substituting subject lot with another suitable
residential lot from another subdivision which respondents own/operates. Upon
the other hand, STATE, to which the subject lot was mortgaged, averred that
unless SOLID pays the redemption price of P125,1955.00, (sic) it has a right to
hold on and not release the foreclosed properties.
On May 23, 1989, the Office of Appeals, Adjudication and Legal Affairs
(OAALA) rendered a decision the decretal portion of which reads:
1. Ordering respondent, State Investment House, Inc. to execute a Deed of
Conveyance of Lot 1, B lock 8, in Capital Park Homes Subdivision in favor of
complainants and to deliver to the latter the corresponding certificate of title;
2. Ordering respondent, Solid Homes, Inc. to pay State Investment House, Inc.
that portion of its loan which corresponds to the value of the lot as collateral;
3. Ordering respondent, Solid Homes, Inc. to pay to this Board the amount of Six
Thousand Pesos (P6,000.00) as administrative fine in accordance with Section 25
in relation to Section 38 of P.D. 957.
Both the STATE and SOLID appealed to the Board of Commissioners, HLRB,
which affirmed on June 5, 1990 the OAALAs decision (Annex C of the
Petition; ibid., p. 34). Again, both STATE and SOLID appealed the decision of the
Board of Commissioners, HLRB, to the Office of the President which dismissed
the twin appeals on February 26, 1993.
Petitioner filed with the Supreme Court this petition for review of decision of the
Office of the President where it was docketed as G.R. No. 109364. However, in a
resolution dated May 13, 1993, the Supreme Court referred this case to this Court

[Italics added.]

At the outset, we note that herein petitioner argues more extensively on the second
assigned issue, than on the first. In fact, petitioner admits the superior rights of
respondents-spouses Oreta over the subject property as it did not pray for the
nullification of the contract between respondents-spouses and SOLID, but instead
asked for the payment of the release value of the property in question, plus interest,
attorneys fees and costs of suit against SOLID or, in case of the latters inability to
pay, against respondents-spouses before it can be required to release the title of the
subject property in favor of the respondent spouses.xii[3] And even if we were to
pass upon the first assigned error, we find respondent courts ruling on the matter
to be well-founded. STATEs registered mortgage right over the property is
inferior to that of respondents-spouses unregistered right. The unrecorded sale
between respondents-spouses and SOLID is preferred for the reason that if the
original owner (SOLID, in this case) had parted with his ownership of the thing
sold then he no longer had ownership and free disposal of that thing so as to be
able to mortgage it again.xiii[4] Registration of the mortgage is of no moment
since it is understood to be without prejudice to the better right of third
parties.xiv[5]
Anent the second issue, petitioner asserts that a purchaser or mortgagee of land/s
covered under the Torrens System is not required to do more than rely upon the
certificate of title [for] it is enough that the [purchaser or mortgagee] examines the
pertinent certificate of title [without] need [of] look[ing] beyond such title.xv[6]
As a general rule, where there is nothing in the certificate of title to indicate any
cloud or vice in the ownership of the property, or any encumbrance thereon, the
purchaser is not required to explore further than what the Torrens Title upon its
face indicates in quest for any hidden defect or inchoate right that may
subsequently defeat his right thereto. This rule, however, admits of an exception as
where the purchaser or mortgagee, has knowledge of a defect or lack of title in his
vendor, or that he was aware of sufficient facts to induce a reasonably prudent man
to inquire into the status of the title of the property in litigation.xvi[7] In this case,

petitioner was well aware that it was dealing with SOLID, a business entity
engaged in the business of selling subdivision lots. In fact, the OAALA found that
at the time the lot was mortgaged, respondent State Investment House, Inc., [now
petitioner] had been aware of the lots location and that said lot formed part of
Capital Park/Homes Subdivision.xvii[8] In Sunshine Finance and investment
Corp. v. Intermediate Appellate Court,xviii[9] the Court, noting petitioner therein
to be a financing corporation, deviated from the general rule that a purchaser or
mortgagee of a land is not required to look further than what appears on the face of
the Torrens Title. Thus:
Nevertheless, we have to deviate from the general rule because of the failure
of the petitioner in this case to take the necessary precautions to ascertain if
there was any flaw in the title of the Nolascos and to examine the condition of
the property they sought to mortgage. The petitioner is an investment and
financing corporation.
We presume it is experienced in its business.
Ascertainment of the status and condition of properties offered to it as
security for the loans it extends must be a standard and indispensable part of
its operations. Surely, it cannot simply rely on an examination of a Torrens
certificate to determine what the subject property looks like as its condition is
not apparent in the document. The land might be in a depressed area. There
might be squatters on it. It might be easily inundated. It might be an interior lot,
without convenient access. These and other similar factors determine the value of
the property and so should be of practical concern to the petitioner.
xxx

xxx

xxx

Our conclusion might have been different if the mortgagee were an ordinary
individual or company without the expertise of the petitioner in the mortgage and
sale of registered land or if the land mortgaged were some distance from the
mortgagee and could not be conveniently inspected. But there were no such
impediments in this case. The facilities of the petitioner were not so limited as to
prevent it from making a more careful examination of the land to assure itself that
there were no unauthorized persons in possession.xix[10]
[Emphasis supplied.]
The above-enunciated rule should apply in this case as petitioner admits of being a
financing institution.xx[11] We take judicial notice of the uniform practice of
financing institutions to investigate, examine and assess the real property offered as
security for any loan application especially where, as in this case, the subject
property is a subdivision lot located at Quezon City, M.M. It is a settled rule that a
purchaser or mortgagee cannot close its eyes to facts which should put a reasonable
man upon his guard, and then claim that he acted in good faith under the belief that
there was no defect in the title of the vendor or mortgagor.xxi[12] Petitioners
constructive knowledge of the defect in the title of the subject property, or lack of

such knowledge due to its negligence, takes the place of registration of the rights of
respondents-spouses. Respondent court thus correctly ruled that petitioner was not
a purchaser or mortgagee in good faith; hence petitioner can not solely rely on
what merely appears on the face of the Torrens Title.
ACCORDINGLY, finding no reversible error in the assailed judgment, the same
is hereby AFFIRMED
SO ORDERED.
8.

[G.R. No. 111737. October 13, 1999]

DEVELOPMENT BANK OF THE PHILIPPINES, petitioner, vs. THE

HONORABLE COURT OF APPEALS AND SPOUSES TIMOTEO and
SELFIDA S. PIEDA, respondents.
DECISION
GONZAGA-REYES, J.:
Before us is a Petition for Review on Certiorari of the decision of the Court of
Appealsxxii[1] in CA-G.R. CV No. 28549 entitled SPOUSES TIMOTEO
PIEDA, ET. AL. vs. DEVELOPMENT BANK OF THE PHILIPPINES which
affirmed the decision of the Regional Trial Court (RTC), Branch 16xxiii[2], Roxas
City in Civil Case No. V-4590, for cancellation of certificate of title and/or specific
performance, accounting and damages with a prayer for the issuance of a writ of
preliminary injunction.
The records show that respondent spouses Pieda (PIEDAS) are the registered
owners of a parcel of land (Lot 11-14-1-14) situated at barangay Astorga Dumarao,
Capiz containing an area of 238,406 square meters, more or less, and covered by
Homestead Patent No. 0844 and Original Certificate of Title No. P-1930. On
March 7, 1972, the PIEDAS mortgaged the above described parcel of land to
petitioner, Development Bank of the Philippines (DBP) to secure their agricultural
loan in the amount of P20,000.00. The PIEDAS failed to comply with the terms
and conditions of the mortgage compelling DBP to extrajudicially foreclose on
February 2, 1977. In the foreclosure sale, DBP was the highest bidder and a
Sheriff Certificate of Sale was executed in its favor. In the corresponding
Certificate of Sale, the sheriff indicated that This property is sold subject to the
redemption within five (5) years from the date of registration of this instrument and
in the manner provided for by law applicable to this case. The certificate of sale
was registered in the Register of Deeds of Capiz on April 25, 1977. On March 10,
1978, after the expiration of the one-year redemption period provided for under
Section 6, ACT 3135, DBP consolidated its title over the foreclosed property by
executing an Affidavit of Consolidation of Ownership. Subsequently, a Final Deed

of Sale was executed in DBPs favor, which was registered together with the
Affidavit of Consolidation of Ownership with the Register of Deeds of Capiz on
May 30, 1978. Consequently, Original Certificate of Title No. P-1930 was
cancelled and TCT No. T-15559 was issued in the name of DBP. Thereafter, DBP
took possession of the foreclosed property and appropriated the produce thereof.
On July 5, 1978, the Ministry of Justice issued Opinion No. 92, Series of
1978xxiv[3] which declared that lands covered by P.D. No. 27xxv[4], like the
herein subject property, may not be the object of foreclosure proceedings after the
promulgation of said decree on Oct. 21, 1972.
On August 24, 1981, the PIEDAS offered to redeem the foreclosed property by
offering P10,000.00 as partial redemption payment. This amount was accepted by
DBP who issued O.R. No. 1665719 and through a letter, conditionally approved
the offer of redemption considering the P10,000.00 as down payment.xxvi[5]
However, on November 11, 1981, DBP sent the PIEDAS another letter informing
them that pursuant to P.D. 27, their offer to redeem and/or repurchase the subject
property could not be favorably considered for the reason that said property was
tenanted.xxvii[6] On November 16, 1981, in deference to the above-mentioned
opinion, DBP through Ramon Buenaflor sent a letter to the Acting Register of
Deeds of Capiz requesting the latter to cancel TCT No. T-15559 and to restore
Original Certificate of Title No. P-1930 in the name of the PIEDAS. The Acting
Register of Deeds, in reply to such request, suggested that DBP file a petition in
court pursuant to Section 108 of Presidential Decree 1529xxviii[7]. In compliance
with said suggestion, DBP petitioned for the cancellation of TCT No. T-15559
with then Court of First Instance of Capiz, Branch II, docketed as Special Case No.
2653. The petition was favorably acted upon on February 22, 1982. Thus, the
foreclosure proceeding conducted on February 2, 1977 was declared null and void
and the Register of Deeds of Capiz was ordered to cancel TCT No. 15559; OCT
No. 1930 was ordered revived.
Meanwhile, on December 21, 1981, the PIEDAS filed the instant complaint
against DBP for cancellation of certificate of title and/or specific performance,
accounting and damages with a prayer for the issuance of a writ of preliminary
injunction averring that DBP, in evident bad faith, caused the consolidation of its
title to the parcel of land in question in spite of the fact that the 5-year redemption
period expressly stated in the Sheriffs Certificate of Sale had not yet lapsed and
that their offer to redeem the foreclosed property was made well within said period
of redemption.xxix[8]
After trial, the RTC ruled in favor of the PIEDAS stating that DBP violated the
stipulation in the Sheriffs Certificate of Sale which provided that the redemption
period is five (5) years from the registration thereof in consonance with Section
119xxx[9] of CA No. 141xxxi[10]. DBP should therefore assume liability for the
fruits that said property produced from said land considering that it prematurely
took possession thereof. The dispositive portion of the decision reads:

WHEREFORE, judgment is hereby rendered in favor of plaintiffs and against the

defendant Development Bank of the Philippines as follows:
1. Condemning the defendant DBP to pay the plaintiffs P201,138.28 less whatever
amount the plaintiffs still have to pay the said defendant DBP as balance of their
loan account reckoned up to the date of this decision; P20,000.00 as attorneys
fees; P5,000.00 as litigation expenses and costs.
SO ORDERED.xxxii[11]
DBP appealed to the Court of Appeals, which affirmed the decision of the RTC.
The Court of Appeals stated that since DBP was in evident bad faith when it
unlawfully took possession of the property subject of the dispute and defied what
was written on the Sheriffs Certificate of Sale, the PIEDAS were entitled to
recover the fruits produced by the property or its equivalent valued at P72,000.00
per annum or a total of P216,000.00 for the three-year period. Respondent court
stated that said amount was not rebutted by DBP and was fair considering the size
of the land in question. The court added that any discussion with respect to the
redemption period was of little significance since the foreclosure proceeding was
declared null and void in Special Civil Case No. 2653xxxiii[12] on February 22,
1982. Thus, the right of the PIEDAS to redeem the property has become moot
and academic.
Finally, the award of attorneys fees amounting to
P10,000.00xxxiv[13] was justified considering that the PIEDAS were compelled
to protect their interests.xxxv[14]
DBPs Motion for Reconsiderationxxxvi[15] was denied; hence this petition where
it assigns the following errors:
Ground No. 1 The Honorable Court Of Appeals Gravely Erred In Affirming
The Court A Quos Decision Awarding Actual Damages In The Amount Of
P216,000.00 In Favor Of The Private Respondents Notwithstanding The Absence
Of Evidence Substantiating Said Award. Thus, The Honorable Court Of Appeals
Had Decided This Instant Case In A Way Not In Accord With Applicable Law
And Jurisprudence.
2. Ground No. 2 - The Honorable Court Of Appeals Gravely Erred In Affirming
The Court A Quos Finding That DBP Was In Bad Faith When It Took Possession
Of The Property In Question Notwithstanding the Contrary Evidence Adduced By
Petitioner DBP. Thus, The Honorable Court Of Appeals Departed From The
Accepted And Usual Course of Judicial Proceedings.
3. Ground No. 3 - The Honorable Court Of Appeals Gravely Erred In Affirming
The Court A Quos Decision Awarding Attorneys Fees And Litigation Costs In
Favor Of The Private Respondents Notwithstanding Absence Of Evidence Proving

the Same. Clearly, The Lower Court Committed Misapprehension Of Facts That
Can Be Considered A Question Of Law.xxxvii[16]

present case on DBP on June 30,1982. If DBP was really in bad faith, it would not
have filed said petition for said petition was against its own interests.

DBP maintains that the valuation of the income derived from the property in
dispute allegedly amounting to P216,000.00 was not proven by the PIEDAS.
DBP argues that they granted the PIEDAS a loan of P20,000.00 in March 7, 1972
and up to the time of the foreclosure of the property, the PIEDAS have paid only
P2,000.00 on their principal. The failure of the PIEDAS to pay this loan is
attributable to the fact that said property did not produce income amounting to
P72,000.00 per annum. According to DBP, in the absence of receipts or other
evidence to support such a claim, the Court of Appeals should not have granted
said amount considering that the PIEDAS had the burden of proving actual
damages. Furthermore, Selfida Pieda herself admitted that the property never
produced income amounting to P72,000.00 per annum. At any rate, the actual
amount earned by the property in terms of rentals turned over by the tenant-farmers
or caretakers of the land were duly receipted and were duly accounted for by the
DBP.

Further, DBP asserts that PIEDAS appointed DBP as their attorney-in-fact or

agent in case of foreclosure of the property under Section 4 of the mortgage
contract, which provides:

DBP also alleges that the mere fact that DBP took possession and administration of
the property does not warrant a finding that DBP was in bad faith. First, records
show that the PIEDAS consented to and approved the takeover of DBP. Second,
Sec. 7xxxviii[17] of Act No. 3135xxxix[18] allows the mortgagee-buyer to take
possession of the mortgaged property even during the redemption period. Third,
DBPs act of consolidating the title of the property in its name does not constitute
bad faith as there is no law which prohibits the purchaser at public auction from
consolidating title in its name after the expiration of the one (1) year redemption
period reckoned from the time the Certificate of Sale was registered; and neither is
there any law or jurisprudence which prohibits the PIEDAS from exercising their
right of redemption over said property within five (5) years even if title is
consolidated in the name of the purchaser. When DBP consolidated title over the
property in its name, the new TCT issued in its favor was subject to the lien i.e. the
right of redemption of the PIEDAS; if there was a failure to register this in the
TCT, DBP should not be faulted. Besides, even if the five (5) year period of
redemption was not indicated therein, Sec. 44xl[19] and 46xli[20] of Presidential
Decree No. 1529xlii[21] attaches such lien by operation of law even in the absence
of an annotation in the title. Moreover, Sec. 119 of CA No. 141 also makes said
right of redemption a statutory lien, which subsists and binds the whole world
despite the absence of registration.
DBP also could not have been in bad faith when it denied the PIEDAS offer to
redeem the property since the denial was premised on Opinion No. 92 of the
Minister of Justice series of 1978 which stated that said land was covered under
P.D. 27 and could not be the subject of foreclosure proceedings. For this reason,
DBP immediately filed a petition to nullify the foreclosure proceedings which was
favorably acted upon prior to the service of summons and the complaint in the

4. xxx In case of foreclosure, the Mortgagor hereby consents to the appointment

of the mortgagee or any of its employees as receiver, without any bond, to take
charge of the mortgage property at once, and to hold possession of the case and the
rents and profits derived from the mortgaged property before the sale.
xxxxliii[22]
DBP was therefore entitled to take possession of the property pursuant to the
mortgage contract.
Finally, considering that DBP lawfully had material possession of the property
after it consolidated its title, DBP was entitled to the fruits and income thereof
pursuant to Section 34, Rule 39 of the Rules of Court:
Sec. 34. Rents and Profits Pending Redemption. Statement thereof and credit
therefor on redemption. The purchaser, from the time of the sale until a
redemption, and a redemptioner, from the time of his redemption until another
redemption, is entitled to receive the rents of the property sold or the value of the
use or occupation thereof when such property is in the possession of a tenant. xxx
Taking all this into consideration, DBP cannot be faulted for taking over
possession of the property in question.
The core issue in this case is whether DBP was in bad faith when it took possession
of the disputed lot.
We rule in the negative and find DBPs contentions meritorious.
A possessor in good faith is one who is not aware that there exists in his title or
mode of acquisition any flaw, which invalidates it.xliv[23] Good faith is always
presumed, and upon him who alleges bad faith on the part of a possessor rests the
burden of proof.xlv[24] It was therefore incumbent on the PIEDAS to prove that
DBP was aware of the flaw in its title i.e. the nullity of the foreclosure. This, they
failed to do.
Respondent PIEDAS argue that DBPs bad faith stems from the fact that DBP
consolidated title over the disputed property despite the statement in the Sheriffs
Certificate of Sale to the effect that said land was subject to a five year redemption

period. The period of redemption of extrajudicially foreclosed land is provided

under Section 6 of ACT No. 3135 to wit:
Sec. 6. In all cases in which an extrajudicial sale is made under the special power
hereinbefore referred to, the debtor, his successors in interest or any judicial
creditor or judgment creditor of said debtor, or any person having a lien on the
property subsequent to the mortgage or deed of trust under which the property is
sold, may redeem the same at any time within the term of one year from and after
the date of sale; and such redemption shall be governed by the provisions of
section four hundred and sixty-four to four hundred and sixty-six, inclusive, of the
Code of Civil Procedurexlvi[25], in so far as these are not inconsistent with the
provisions of this Act.
If no redemption is made within one year, the purchaser is entitled as a matter of
right to consolidatexlvii[26] and to possessxlviii[27] the property.xlix[28]
Accordingly, DBPs act of consolidating its title and taking possession of the
subject property after the expiration of the period of redemption was in accordance
with law. Moreover, it was in consonance with Section 4 of the mortgage contract
between DBP and the PIEDAS where they agreed to the appointment of DBP as
receiver to take charge and to hold possession of the mortgage property in case of
foreclosure. DBPs acts cannot therefore be tainted with bad faith.
The right of DBP to consolidate its title and take possession of the subject property
is not affected by the PIEDAS right to repurchase said property within five years
from the date of conveyance granted by Section 119 of CA No. 141. In fact,
without the act of DBP consolidating title in its name, the PIEDAS would not be
able to assert their right to repurchase granted under the aforementioned section.
Respondent PIEDAS are of the erroneous belief that said section prohibits a
purchaser of homestead land in a foreclosure sale from consolidating his title over
said property after the one-year period to redeem said property has expired.
Section 119 does not contain any prohibition to convey homestead land but grants
the homesteader, his widow or legal heirs a right to repurchase said land within a
period of five years in the event that he conveys said land. This is in consonance
with the policy of homestead laws to distribute disposable agricultural lands of the
State to land-destitute citizens for their home and cultivation.l[29] The right to
repurchase under Section 119 aims to preserve and keep in the family of the
homesteader that portion of public land which the State had gratuitously given
him.li[30] Such right is based on the assumption that the person under obligation to
reconvey the property has the full title to the property because it was voluntarily
conveyed to him or that he consolidated his title thereto by reason of a
redemptioners failure to exercise his right of redemption.lii[31] It is also settled
that the five-year period of redemption fixed in Section 119 of the Public Land
Law of homestead sold at extrajudicial foreclosure begins to run from the day after
the expiration of the one-year period of repurchase allowed in an extrajudicial
foreclosure.liii[32] Thus DBPs consolidation of title did not derogate from or
impair the right of the PIEDAS to redeem the same under C.A. No. 141.

It may be argued that P.D. 27 was already in effect when DBP foreclosed the
property. However, the legal propriety of the foreclosure of the land was put into
question only after Opinion No. 92 series of 1978 of the Ministry of Justice
declared that said land was covered by P.D. 27 and could not be subject to
foreclosure proceedings. The Opinion of the Ministry of Justice was issued on July
5, 1978 or almost two months after DBP consolidated its title to the property on
March 10, 1978. By law and jurisprudence, a mistake upon a doubtful or difficult
question of law may properly be the basis of good faith.liv[33]
In the case of Maneclang vs. Baun,lv[34] we held that when a contract of sale is
void, the possessor is entitled to keep the fruits during the period for which it held
the property in good faith. Good faith of the possessor ceases when an action to
recover possession of the property is filed against him and he is served summons
therefore.lvi[35] In the present case, DBP was served summons on June 30,
1982.lvii[36] By that time, it was no longer in possession of the disputed land as
possession thereof was given back to the PIEDAS after the foreclosure of DBP
was declared null and void on February 22, 1982. Therefore, any income collected
by DBP after it consolidated its title and took possession of the property on May
30, 1978 up to February 22, 1982 belongs to DBP as a possessor in good faith
since its possession was never legally interrupted.
Finally, we delete the award for attorneys fees. Although attorneys fees may be
awarded if the claimant is compelled to litigate with third persons or to incur
expenses to protect his interest by reason of an unjustified act or omission of the
party from whom it is soughtlviii[37], we hold that DBPs acts were clearly not
unjustified.
WHEREFORE, the instant petition is hereby GRANTED, and the appealed
decision of the Court of Appeals is REVERSED. The Development Bank of the
Philippines is absolved from any liability to Timoteo and Selfida Pieda in so far
as it orders the DBP to pay the PIEDAS P216,000.00 as annual produce value of
the land; P20,000.00 in attorneys fees, P5,000.00 in litigation expenses and the
costs of the suit. This decision is without prejudice to whatever liability the
PIEDAS may still have to the DBP with respect to their loan.
SO ORDERED.
9.

G.R. No. 57667 May 28, 1990

SAN
MIGUEL
CORPORATION,
vs.
COURT OF APPEALS and DIRECTOR OF LANDS, respondents.
Ciriaco Lopez, Jr. & Associates for petitioner.

petitioner,

trial court which had the opportunity of observing the demeanor and sincerity of
the witnesses. 3
FERNAN, C.J.:
In this petition for review on certiorari, San Miguel Corporation seeks the reversal
of the decision of the Court of Appeals 1 denying its application for registration of
a parcel of land in view of its failure to show entitlement thereto.
On December 23, 1975, petitioner San Miguel Corporation (SMC for brevity)
purchased from Silverio Perez Lot 684, a 14,531 square-meter parcel of land
located in Sta. Anastacia, Sto. Tomas, Batangas, in consideration of the sum of
P133,084.80. 2 On February 21,1977, claiming ownership in fee simple of the land,
SMC filed before the then Court of First Instance, now Regional Trial Court of
Batangas an application for its registration under the Land Registration Act.
The Solicitor General, appearing for the Republic of the Philippines, opposed the
application for registration contending that SMC's claim of ownership in fee simple
on the basis of a Spanish title or grant could no longer be availed of by the
applicant as the six-month period from February 16, 1976 prescribed by
Presidential Decree No. 892 had elapsed; that the parcel of land in question is part
of the public domain, and that SMC, being a private corporation, is disqualified
under Section 11, Article XIV of the Constitution from holding alienable lands of
the public domain. The Solicitor General thereafter authorized the Provincial Fiscal
of Batangas to appear in said case, subject to his supervision and control.
At the initial and only hearing held on October 12, 197 7, the Court, upon motion
of SMC and there being no opposition to the application except that of the
Republic of the Philippines, issued an order of general default. SMC was allowed
to mark documentary evidence to establish jurisdictional facts and to present
additional evidence before the Clerk of Court who was appointed Commissioner
for that purpose.
On December 12, 1977, the lower court, presided by Judge Eduardo C. Abaya,
rendered a decision granting the application for registration and adjudicating the
property in favor of SMC.
The Solicitor General appealed to the Court of Appeals. In its decision of March
23, 1981, said court reversed the decision of the lower court and declared the
parcel of land involved as public land. Hence, the instant petition with SMC
submitting the following alleged "grave errors" of the Court of Appeals for this
Court's resolution: (1) the Court of Appeals' failure to hold that "prescription is a
mode of acquiring title or ownership of land and that the title thus acquired is
registrable"; (2) the Court of Appeals' disregard of SMC's evidence "not on the
basis of controverting evidence but on the basis of unfounded suppositions and
conjectures," and (3) the Court of Appeals' reversal of the factual findings of the

We need not dwell lengthily on the third "error" assigned by petitioner. Suffice it to
state that while trial courts may have the opportunity to observe the demeanor of
witnesses, their factual findings may nonetheless be reversed by the Court of
Appeals, the appellate court vested by law to resolve both legal and factual issues,
if, by the evidence on record, it appears that the trial court involved erred. What is
of primary concern to us in this case is the issue of whether or not the evidence
presented by the petitioner is sufficient to warrant a ruling that SMC and/or its
predecessor-in-interest has a registrable right over Lot 684.
Open, exclusive and undisputed possession of alienable public land for the period
prescribed by law creates the legal fiction whereby the land, upon completion of
the requisite period ipso-jure and without the need of judicial or other sanction,
ceases to be public land and becomes private property. 4 Such open, continuous,
exclusive and notorious occupation of the disputed properties for more than 30
years must, however, be conclusively established. 6 This quantum of proof is
necessary to avoid the erroneous validation of actually fictitious claims of
possession over the property in dispute.
In this case, petitioner's claim that its predecessor-in-interest had open, exclusive
and undisputed possession of Lot 684 for more than thirty years is anchored on
certain documentary and testimonial evidence. Its documentary evidence consist of
tax declaration No. 923 wherein it appears that in 1974, Silverio Perez declared as
his own for taxation purposes, a certain riceland with an area of 1.5657 hectares
located in Sta. Anastacia, Sto. Tomas, Batangas, 6 and a certification of the Office
of the Treasurer of Sto. Tomas to the effect that in 1977, Silverio Perez paid realty
taxes for the land subject of tax declaration no. 923. 7
Tax declarations and receipts are not conclusive evidence of ownership or right of
possession over a piece of land. 8 They are merely indicia of a claim of ownership.
9
Tax declarations only become strong evidence of ownership of land acquired by
prescription, a mode of acquisition of ownership relied upon by petitioner in this
case, when accompanied by proof of actual possession. 10
Such proof of actual possession was sought to be provided by the testimony of
vendor Silverio Perez that he had been in possession of the property since 1933
until he sold it to SMC in 1975; that the property was given to him by his parents
when he got married; that no document evidenced that transfer; that it had been in
the possession of his parents since 1925; that he had declared the property in his
name for taxation purposes; that he had paid taxes therefor, and that he was in
peaceful, continuous and exclusive possession of the property until its sale to SMC.
11

Petitioner did not present other witnesses to corroborate Perez' testimony. Its other
witness, Antonio M. de las Alas, Jr., a lawyer of the petitioner, simply testified that
he handled the negotiations for the purchase of the property; that SMC was
authorized to own and acquire property as shown by its articles of incorporation
and by-laws; that since its acquisition in 1975, the property had been used as a
hatchery farm of SMC; that SMC's possession in the concept of an owner had been
continuous, adverse and against the whole world, and that the land was declared for
taxation purposes still in the name of Silverio Perez . 12

We reproduce below the facts as narrated by the respondent court, which

narration, we note, is almost verbatim the basis of the statement of facts as
rendered by the petitioners in their pleadings:

We hold that there is paucity of evidence of actual, notorious and exclusive

possession of the property on the part of vendor Silverio Perez so as to attach to it
the character of an express grant from the govemment. 13 Indeed, as correctly held
by the Court of Appeals, Silverio Perez's testimony, being uncorroborated, is
simply self-serving and hence, undeserving of any weight.

On June 1, 1967 Carmelo entered into a contract of lease with

Mayfair for the latter's lease of a portion of Carmelo's property
particularly described, to wit:

WHEREFORE, the decision of the Court of Appeals is hereby AFFIRMED. Costs

against the petitioner.
SO ORDERED.
10. G.R. No. 106063 November 21, 1996

Carmelo owned a parcel of land, together with two 2-storey

buildings constructed thereon located at Claro M Recto Avenue,
Manila, and covered by TCT No. 18529 issued in its name by the
Register of Deeds of Manila.

A PORTION OF THE SECOND FLOOR of

the two-storey building, situated at C.M. Recto
Avenue, Manila, with a floor area of 1,610
square meters.
THE SECOND FLOOR AND MEZZANINE
of the two-storey building, situated at C.M.
Recto Avenue, Manila, with a floor area of 150
square meters.

EQUATORIAL REALTY DEVELOPMENT, INC. & CARMELO &

BAUERMANN,
INC.,
petitioners,
vs.
MAYFAIR THEATER, INC., respondent.

for use by Mayfair as a motion picture theater and for a term of

twenty (20) years. Mayfair thereafter constructed on the leased
property a movie house known as "Maxim Theatre."

HERMOSISIMA, JR., J.:

Two years later, on March 31, 1969, Mayfair entered into a

second contract of lease with Carmelo for the lease of another
portion of Carmelo's property, to wit:

Before us is a petition for review of the decision 1 of the Court of

Appeals 2 involving questions in the resolution of which the respondent
appellate court analyzed and interpreted particular provisions of our laws
on contracts and sales. In its assailed decision, the respondent court
reversed the trial court 3 which, in dismissing the complaint for specific
performance with damages and annulment of contract, 4 found the option
clause in the lease contracts entered into by private respondent Mayfair
Theater, Inc. (hereafter, Mayfair) and petitioner Carmelo & Bauermann,
Inc. (hereafter, Carmelo) to be impossible of performance and
unsupported by a consideration and the subsequent sale of the subject
property to petitioner Equatorial Realty Development, Inc. (hereafter,
Equatorial) to have been made without any breach of or prejudice to, the
said lease contracts. 5

A PORTION OF THE SECOND FLOOR of

the two-storey building, situated at C.M. Recto
Avenue, Manila, with a floor area of 1,064
square meters.
THE TWO (2) STORE SPACES AT THE
GROUND FLOOR and MEZZANINE of the
two-storey building situated at C.M. Recto
Avenue, Manila, with a floor area of 300
square meters and bearing street numbers 1871
and 1875,

for similar use as a movie theater and for a similar term of twenty
(20) years. Mayfair put up another movie house known as
"Miramar Theatre" on this leased property.
Both contracts of lease provides (sic) identically worded
paragraph 8, which reads:
That if the LESSOR should desire to sell the
leased premises, the LESSEE shall be given
30-days exclusive option to purchase the same.
In the event, however, that the leased premises
is sold to someone other than the LESSEE, the
LESSOR is bound and obligated, as it hereby
binds and obligates itself, to stipulate in the
Deed of Sale hereof that the purchaser shall
recognize this lease and be bound by all the
terms and conditions thereof.
Sometime in August 1974, Mr. Henry Pascal of Carmelo
informed Mr. Henry Yang, President of Mayfair, through a
telephone conversation that Carmelo was desirous of selling the
entire Claro M. Recto property. Mr. Pascal told Mr. Yang that a
certain Jose Araneta was offering to buy the whole property for
US Dollars 1,200,000, and Mr. Pascal asked Mr. Yang if the
latter was willing to buy the property for Six to Seven Million
Pesos.
Mr. Yang replied that he would let Mr. Pascal know of his
decision. On August 23, 1974, Mayfair replied through a letter
stating as follows:
It appears that on August 19, 1974 your Mr.
Henry Pascal informed our client's Mr. Henry
Yang through the telephone that your company
desires to sell your above-mentioned C.M.
Recto Avenue property.
Under your company's two lease contracts with
our client, it is uniformly provided:
8. That if the LESSOR should desire to sell the
leased premises the LESSEE shall be given 30days exclusive option to purchase the same. In
the event, however, that the leased premises is

sold to someone other than the LESSEE, the

LESSOR is bound and obligated, as it is (sic)
herebinds (sic) and obligates itself, to stipulate
in the Deed of Sale thereof that the purchaser
shall recognize this lease and be bound by all
the terms and conditions hereof (sic).
Carmelo did not reply to this letter.
On September 18, 1974, Mayfair sent another letter to Carmelo
purporting to express interest in acquiring not only the leased
premises but "the entire building and other improvements if the
price is reasonable. However, both Carmelo and Equatorial
questioned the authenticity of the second letter.
Four years later, on July 30, 1978, Carmelo sold its entire C.M.
Recto Avenue land and building, which included the leased
premises housing the "Maxim" and "Miramar" theatres, to
Equatorial by virtue of a Deed of Absolute Sale, for the total sum
of P11,300,000.00.
In September 1978, Mayfair instituted the action a quo for
specific performance and annulment of the sale of the leased
premises to Equatorial. In its Answer, Carmelo alleged as special
and affirmative defense (a) that it had informed Mayfair of its
desire to sell the entire C.M. Recto Avenue property and offered
the same to Mayfair, but the latter answered that it was interested
only in buying the areas under lease, which was impossible since
the property was not a condominium; and (b) that the option to
purchase invoked by Mayfair is null and void for lack of
consideration. Equatorial, in its Answer, pleaded as special and
affirmative defense that the option is void for lack of
consideration (sic) and is unenforceable by reason of its
impossibility of performance because the leased premises could
not be sold separately from the other portions of the land and
building. It counterclaimed for cancellation of the contracts of
lease, and for increase of rentals in view of alleged supervening
extraordinary devaluation of the currency. Equatorial likewise
cross-claimed against co-defendant Carmelo for indemnification
in respect of Mayfair's claims.
During the pre-trial conference held on January 23, 1979, the
parties stipulated on the following:

1. That there was a deed of sale of the

contested premises by the defendant Carmelo .
. . in favor of defendant Equatorial . . .;
2. That in both contracts of lease there appear
(sic) the stipulation granting the plaintiff
exclusive option to purchase the leased
premises should the lessor desire to sell the
same (admitted subject to the contention that
the stipulation is null and void);
3. That the two buildings erected on this land
are not of the condominium plan;
4. That the amounts stipulated and mentioned
in paragraphs 3 (a) and (b) of the contracts of
lease constitute the consideration for the
plaintiff's occupancy of the leased premises,
subject of the same contracts of lease, Exhibits
A and B;
xxx xxx xxx
6. That there was no consideration specified in
the option to buy embodied in the contract;
7. That Carmelo & Bauermann owned the land
and the two buildings erected thereon;
8. That the leased premises constitute only the
portions actually occupied by the theaters; and
9. That what was sold by Carmelo &
Bauermann to defendant Equatorial Realty is
the land and the two buildings erected thereon.
xxx xxx xxx
After assessing the evidence, the court a quo rendered the
appealed decision, the decretal portion of which reads as follows:
WHEREFORE, judgment is hereby rendered:

(1) Dismissing the complaint with costs against

the plaintiff;
(2) Ordering plaintiff to pay defendant
Carmelo & Bauermann P40,000.00 by way of
attorney's fees on its counterclaim;
(3) Ordering plaintiff to pay defendant
Equatorial Realty P35,000.00 per month as
reasonable compensation for the use of areas
not covered by the contract (sic) of lease from
July 31, 1979 until plaintiff vacates said area
(sic) plus legal interest from July 31, 1978;
P70,000 00 per month as reasonable
compensation for the use of the premises
covered by the contracts (sic) of lease dated
(June 1, 1967 from June 1, 1987 until plaintiff
vacates the premises plus legal interest from
June 1, 1987; P55,000.00 per month as
reasonable compensation for the use of the
premises covered by the contract of lease dated
March 31, 1969 from March 30, 1989 until
plaintiff vacates the premises plus legal interest
from March 30, 1989; and P40,000.00 as
attorney's fees;
(4)
Dismissing
defendant
Equatorial's
crossclaim against defendant Carmelo &
Bauermann.
The contracts of lease dated June 1, 1967 and
March 31, 1969 are declared expired and all
persons claiming rights under these contracts
are directed to vacate the premises. 6
The trial court adjudged the identically worded paragraph 8 found in both
aforecited lease contracts to be an option clause which however cannot be
deemed to be binding on Carmelo because of lack of distinct
consideration therefor.
The court a quo ratiocinated:
Significantly, during the pre-trial, it was admitted by the parties
that the option in the contract of lease is not supported by a
separate consideration. Without a consideration, the option is

therefore not binding on defendant Carmelo & Bauermann to sell

the C.M. Recto property to the former. The option invoked by the
plaintiff appears in the contracts of lease . . . in effect there is no
option, on the ground that there is no consideration. Article 1352
of the Civil Code, provides:
Contracts without cause or with unlawful
cause, produce no effect whatever. The cause is
unlawful if it is contrary to law, morals, good
custom, public order or public policy.
Contracts therefore without consideration produce no effect
whatsoever. Article 1324 provides:
When the offeror has allowed the offeree a
certain period to accept, the offer may be
withdrawn at any time before acceptance by
communicating such withdrawal, except when
the option is founded upon consideration, as
something paid or promised.
in relation with Article 1479 of the same Code:
A promise to buy and sell a determine thing for
a price certain is reciprocally demandable.
An accepted unilateral promise to buy or to sell
a determine thing for a price certain is binding
upon the promissor if the promise is supported
by a consideration distinct from the price.
The plaintiff cannot compel defendant Carmelo to comply with
the promise unless the former establishes the existence of a
distinct consideration. In other words, the promisee has the
burden of proving the consideration. The consideration cannot be
presumed as in Article 1354:
Although the cause is not stated in the contract,
it is presumed that it exists and is lawful unless
the debtor proves the contrary.
where consideration is legally presumed to exists. Article 1354
applies to contracts in general, whereas when it comes to an
option it is governed particularly and more specifically by Article
1479 whereby the promisee has the burden of proving the

existence of consideration distinct from the price. Thus, in the

case of Sanchez vs. Rigor, 45 SCRA 368, 372-373, the Court
said:
(1) Article 1354 applies to contracts in general,
whereas the second paragraph of Article 1479
refers to sales in particular, and, more
specifically, to an accepted unilateral promise
to buy or to sell. In other words, Article 1479 is
controlling in the case at bar.
(2) In order that said unilateral promise may be
binding upon the promissor, Article 1479
requires the concurrence of a condition,
namely, that the promise be supported by a
consideration distinct from the price.
Accordingly, the promisee cannot compel the
promissor to comply with the promise, unless
the former establishes the existence of said
distinct consideration. In other words, the
promisee has the burden of proving such
consideration. Plaintiff herein has not even
alleged the existence thereof in his complaint. 7
It follows that plaintiff cannot compel defendant Carmelo &
Bauermann to sell the C.M. Recto property to the former.
Mayfair taking exception to the decision of the trial court, the
battleground shifted to the respondent Court of Appeals. Respondent
appellate court reversed the court a quo and rendered judgment:
1. Reversing and setting aside the appealed Decision;
2. Directing the plaintiff-appellant Mayfair Theater Inc. to pay
and return to Equatorial the amount of P11,300,000.00 within
fifteen (15) days from notice of this Decision, and ordering
Equatorial Realty Development, Inc. to accept such payment;
3. Upon payment of the sum of P11,300,000, directing Equatorial
Realty Development, Inc. to execute the deeds and documents
necessary for the issuance and transfer of ownership to Mayfair
of the lot registered under TCT Nos. 17350, 118612, 60936, and
52571; and

4. Should plaintiff-appellant Mayfair Theater, Inc. be unable to

pay the amount as adjudged, declaring the Deed of Absolute Sale
between the defendants-appellants Carmelo & Bauermann, Inc.
and Equatorial Realty Development, Inc. as valid and binding
upon all the parties. 8
Rereading the law on the matter of sales and option contracts, respondent
Court of Appeals differentiated between Article 1324 and Article 1479 of
the Civil Code, analyzed their application to the facts of this case, and
concluded that since paragraph 8 of the two lease contracts does not state
a fixed price for the purchase of the leased premises, which is an essential
element for a contract of sale to be perfected, what paragraph 8 is, must be
a right of first refusal and not an option contract. It explicated:
Firstly, the court a quo misapplied the provisions of Articles
1324 and 1479, second paragraph, of the Civil Code.

Based on the foregoing discussion, it is evident that the provision

granting Mayfair "30-days exclusive option to purchase" the
leased premises is NOT AN OPTION in the context of Arts.
1324 and 1479, second paragraph, of the Civil Code. Although
the provision is certain as to the object (the sale of the leased
premises) the price for which the object is to be sold is not stated
in the provision Otherwise stated, the questioned stipulation is
not by itself, an "option" or the "offer to sell" because the clause
does not specify the price for the subject property.
Although the provision giving Mayfair "30-days exclusive option
to purchase" cannot be legally categorized as an option, it is,
nevertheless, a valid and binding stipulation. What the trial court
failed to appreciate was the intention of the parties behind the
questioned proviso.
xxx xxx xxx

Article 1324 speaks of an "offer" made by an offeror which the

offeree may or may not accept within a certain period. Under this
article, the offer may be withdrawn by the offeror before the
expiration of the period and while the offeree has not yet
accepted the offer. However, the offer cannot be withdrawn by
the offeror within the period if a consideration has been promised
or given by the offeree in exchange for the privilege of being
given that period within which to accept the offer. The
consideration is distinct from the price which is part of the offer.
The contract that arises is known as option. In the case of
Beaumont vs. Prieto, 41 Phil. 670, the Supreme court, citing
Bouvier, defined an option as follows: "A contract by virtue of
which A, in consideration of the payment of a certain sum to B,
acquires the privilege of buying from or selling to B, certain
securities or properties within a limited time at a specified price,"
(pp. 686-7).
Article 1479, second paragraph, on the other hand, contemplates
of an "accepted unilateral promise to buy or to sell a determinate
thing for a price within (which) is binding upon the promisee if
the promise is supported by a consideration distinct from the
price." That "unilateral promise to buy or to sell a determinate
thing for a price certain" is called an offer. An "offer", in laws, is
a proposal to enter into a contract (Rosenstock vs. Burke, 46 Phil.
217). To constitute a legal offer, the proposal must be certain as
to the object, the price and other essential terms of the contract
(Art. 1319, Civil Code).

The provision in question is not of the pro-forma type

customarily found in a contract of lease. Even appellees have
recognized that the stipulation was incorporated in the two
Contracts of Lease at the initiative and behest of Mayfair.
Evidently, the stipulation was intended to benefit and protect
Mayfair in its rights as lessee in case Carmelo should decide,
during the term of the lease, to sell the leased property. This
intention of the parties is achieved in two ways in accordance
with the stipulation. The first is by giving Mayfair "30-days
exclusive option to purchase" the leased property. The second is,
in case Mayfair would opt not to purchase the leased property,
"that the purchaser (the new owner of the leased property) shall
recognize the lease and be bound by all the terms and conditions
thereof."
In other words, paragraph 8 of the two Contracts of lease,
particularly the stipulation giving Mayfair "30-days exclusive
option to purchase the (leased premises)," was meant to provide
Mayfair the opportunity to purchase and acquire the leased
property in the event that Carmelo should decide to dispose of
the property. In order to realize this intention, the implicit
obligation of Carmelo once it had decided to sell the leased
property, was not only to notify Mayfair of such decision to sell
the property, but, more importantly, to make an offer to sell the
leased premises to Mayfair, giving the latter a fair and reasonable
opportunity to accept or reject the offer, before offering to sell or
selling the leased property to third parties. The right vested in
Mayfair is analogous to the right of first refusal, which means

that Carmelo should have offered the sale of the leased premises
to Mayfair before offering it to other parties, or, if Carmelo
should receive any offer from third parties to purchase the leased
premises, then Carmelo must first give Mayfair the opportunity
to match that offer.
In fact, Mr. Pascal understood the provision as giving Mayfair a
right of first refusal when he made the telephone call to Mr.
Yang in 1974. Mr. Pascal thus testified:
Q Can you tell this
Honorable Court how you
made the offer to Mr. Henry
Yang by telephone?
A I have an offer from
another party to buy the
property and having the offer
we decided to make an offer
to Henry Yang on a firstrefusal
basis.
(TSN
November 8, 1983, p. 12.).
and on cross-examination:
Q When you called Mr.
Yang on August 1974 can
you remember exactly what
you have told him in
connection with that matter,
Mr. Pascal?
A More or less, I told him
that I received an offer from
another party to buy the
property and I was offering
him first choice of the enter
property. (TSN, November
29, 1983, p. 18).
We rule, therefore, that the foregoing interpretation best renders
effectual the intention of the parties. 9
Besides the ruling that paragraph 8 vests in Mayfair the right of first
refusal as to which the requirement of distinct consideration indispensable

in an option contract, has no application, respondent appellate court also

addressed the claim of Carmelo and Equatorial that assuming arguendo
that the option is valid and effective, it is impossible of performance
because it covered only the leased premises and not the entire Claro M.
Recto property, while Carmelo's offer to sell pertained to the entire
property in question. The Court of Appeals ruled as to this issue in this
wise:
We are not persuaded by the contentions of the defendantsappellees. It is to be noted that the Deed of Absolute Sale
between Carmelo and Equatorial covering the whole Claro M.
Recto property, made reference to four titles: TCT Nos. 17350,
118612, 60936 and 52571. Based on the information submitted
by Mayfair in its appellant's Brief (pp. 5 and 46) which has not
been controverted by the appellees, and which We, therefore,
take judicial notice of the two theaters stand on the parcels of
land covered by TCT No. 17350 with an area of 622.10 sq. m
and TCT No. 118612 with an area of 2,100.10 sq. m. The
existence of four separate parcels of land covering the whole
Recto property demonstrates the legal and physical possibility
that each parcel of land, together with the buildings and
improvements thereof, could have been sold independently of the
other parcels.
At the time both parties executed the contracts, they were aware
of the physical and structural conditions of the buildings on
which the theaters were to be constructed in relation to the
remainder of the whole Recto property. The peculiar language of
the stipulation would tend to limit Mayfair's right under
paragraph 8 of the Contract of Lease to the acquisition of the
leased areas only. Indeed, what is being contemplated by the
questioned stipulation is a departure from the customary situation
wherein the buildings and improvements are included in and
form part of the sale of the subjacent land. Although this
situation is not common, especially considering the noncondominium nature of the buildings, the sale would be valid and
capable of being performed. A sale limited to the leased premises
only, if hypothetically assumed, would have brought into
operation the provisions of co-ownership under which Mayfair
would have become the exclusive owner of the leased premises
and at the same time a co-owner with Carmelo of the subjacent
land in proportion to Mayfair's interest over the premises sold to
it. 10

Carmelo and Equatorial now comes before us questioning the correctness

and legal basis for the decision of respondent Court of Appeals on the
basis of the following assigned errors:
I
THE COURT OF APPEALS GRAVELY ERRED IN
CONCLUDING THAT THE OPTION CLAUSE IN THE
CONTRACTS OF LEASE IS ACTUALLY A RIGHT OF
FIRST REFUSAL PROVISO. IN DOING SO THE COURT OF
APPEALS DISREGARDED THE CONTRACTS OF LEASE
WHICH CLEARLY AND UNEQUIVOCALLY PROVIDE
FOR AN OPTION, AND THE ADMISSION OF THE PARTIES
OF SUCH OPTION IN THEIR STIPULATION OF FACTS.
II
WHETHER AN OPTION OR RIGHT OF FIRST REFUSAL,
THE COURT OF APPEALS ERRED IN DIRECTING
EQUATORIAL TO EXECUTE A DEED OF SALE EIGHTEEN
(18) YEARS AFTER MAYFAIR FAILED TO EXERCISE ITS
OPTION (OR, EVEN ITS RIGHT OF FIRST REFUSAL
ASSUMING IT WAS ONE) WHEN THE CONTRACTS
LIMITED THE EXERCISE OF SUCH OPTION TO 30 DAYS
FROM NOTICE.
III
THE COURT OF APPEALS GRIEVOUSLY ERRED WHEN
IT DIRECTED IMPLEMENTATION OF ITS DECISION
EVEN BEFORE ITS FINALITY, AND WHEN IT GRANTED
MAYFAIR A RELIEF THAT WAS NOT EVEN PRAYED FOR
IN THE COMPLAINT.
IV
THE COURT OF APPEALS VIOLATED ITS OWN
INTERNAL RULES IN THE ASSIGNMENT OF APPEALED
CASES WHEN IT ALLOWED THE SAME DIVISION XII,
PARTICULARLY JUSTICE MANUEL HERRERA, TO
RESOLVE ALL THE MOTIONS IN THE "COMPLETION
PROCESS" AND TO STILL RESOLVE THE MERITS OF
THE CASE IN THE "DECISION STAGE". 11

We shall first dispose of the fourth assigned error respecting alleged

irregularities in the raffle of this case in the Court of Appeals. Suffice it to
say that in our Resolution, 12 dated December 9, 1992, we already took
note of this matter and set out the proper applicable procedure to be the
following:
On September 20, 1992, counsel for petitioner Equatorial Realty
Development, Inc. wrote a letter-complaint to this Court alleging
certain irregularities and infractions committed by certain
lawyers, and Justices of the Court of Appeals and of this Court in
connection with case CA-G.R. CV No. 32918 (now G.R. No.
106063). This partakes of the nature of an administrative
complaint for misconduct against members of the judiciary.
While the letter-complaint arose as an incident in case CA-G.R.
CV No. 32918 (now G.R. No. 106063), the disposition thereof
should be separate and independent from Case G.R. No. 106063.
However, for purposes of receiving the requisite pleadings
necessary in disposing of the administrative complaint, this
Division shall continue to have control of the case. Upon
completion thereof, the same shall be referred to the Court En
Banc for proper disposition. 13
This court having ruled the procedural irregularities raised in the fourth
assigned error of Carmelo and Equatorial, to be an independent and
separate subject for an administrative complaint based on misconduct by
the lawyers and justices implicated therein, it is the correct, prudent and
consistent course of action not to pre-empt the administrative proceedings
to be undertaken respecting the said irregularities. Certainly, a discussion
thereupon by us in this case would entail a finding on the merits as to the
real nature of the questioned procedures and the true intentions and
motives of the players therein.
In essence, our task is two-fold: (1) to define the true nature, scope and
efficacy of paragraph 8 stipulated in the two contracts of lease between
Carmelo and Mayfair in the face of conflicting findings by the trial court
and the Court of Appeals; and (2) to determine the rights and obligations
of Carmelo and Mayfair, as well as Equatorial, in the aftermath of the sale
by Carmelo of the entire Claro M. Recto property to Equatorial.
Both contracts of lease in question provide the identically worded
paragraph 8, which reads:
That if the LESSOR should desire to sell the leased premises, the
LESSEE shall be given 30-days exclusive option to purchase the
same.

In the event, however, that the leased premises is sold to

someone other than the LESSEE, the LESSOR is bound and
obligated, as it hereby binds and obligates itself, to stipulate in
the Deed of Sale thereof that the purchaser shall recognize this
lease and be bound by all the terms and conditions thereof. 14
We agree with the respondent Court of Appeals that the aforecited
contractual stipulation provides for a right of first refusal in favor of
Mayfair. It is not an option clause or an option contract. It is a contract of
a right of first refusal.
As early as 1916, in the case of Beaumont vs. Prieto, 15 unequivocal was
our characterization of an option contract as one necessarily involving the
choice granted to another for a distinct and separate consideration as to
whether or not to purchase a determinate thing at a predetermined fixed
price.
It is unquestionable that, by means of the document Exhibit E, to
wit, the letter of December 4, 1911, quoted at the beginning of
this decision, the defendant Valdes granted to the plaintiff Borck
the right to purchase the Nagtajan Hacienda belonging to Benito
Legarda, during the period of three months and for its assessed
valuation, a grant which necessarily implied the offer or
obligation on the part of the defendant Valdes to sell to Borck the
said hacienda during the period and for the price mentioned . . .
There was, therefore, a meeting of minds on the part of the one
and the other, with regard to the stipulations made in the said
document. But it is not shown that there was any cause or
consideration for that agreement, and this omission is a bar
which precludes our holding that the stipulations contained in
Exhibit E is a contract of option, for, . . . there can be no contract
without the requisite, among others, of the cause for the
obligation to be established.
In his Law Dictionary, edition of 1897, Bouvier defines an option
as a contract, in the following language:
A contract by virtue of which A, in
consideration of the payment of a certain sum
to B, acquires the privilege of buying from, or
selling to B, certain securities or properties
within a limited time at a specified price.
(Story vs. Salamon, 71 N.Y., 420.)

From vol. 6, page 5001, of the work "Words and Phrases," citing
the case of Ide vs. Leiser (24 Pac., 695; 10 Mont., 5; 24 Am. St.
Rep., 17) the following quotation has been taken:
An agreement in writing to give a person the
option to purchase lands within a given time at
a named price is neither a sale nor an
agreement to sell. It is simply a contract by
which the owner of property agrees with
another person that he shall have the right to
buy his property at a fixed price within a
certain time. He does not sell his land; he does
not then agree to sell it; but he does sell
something; that is, the right or privilege to buy
at the election or option of the other party. The
second party gets in praesenti, not lands, nor an
agreement that he shall have lands, but he does
get something of value; that is, the right to call
for and receive lands if he elects. The owner
parts with his right to sell his lands, except to
the second party, for a limited period. The
second party receives this right, or, rather, from
his point of view, he receives the right to elect
to buy.
But the two definitions above cited refer to the contract of option,
or, what amounts to the same thing, to the case where there was
cause or consideration for the obligation, the subject of the
agreement made by the parties; while in the case at bar there was
no such cause or consideration. 16 (Emphasis ours.)
The rule so early established in this jurisdiction is that the deed of option
or the option clause in a contract, in order to be valid and enforceable,
must, among other things, indicate the definite price at which the person
granting the option, is willing to sell.
Notably, in one case we held that the lessee loses his right to buy the leased
property for a named price per square meter upon failure to make the purchase
within the time specified; 17 in one other case we freed the landowner from her
promise to sell her land if the prospective buyer could raise P4,500.00 in three
weeks because such option was not supported by a distinct consideration; 18 in the
same vein in yet one other case, we also invalidated an instrument entitled, "Option
to Purchase" a parcel of land for the sum of P1,510.00 because of lack of
consideration; 19 and as an exception to the doctrine enumerated in the two
preceding cases, in another case, we ruled that the option to buy the leased
premises for P12,000.00 as stipulated in the lease contract, is not without

consideration for in reciprocal contracts, like lease, the obligation or promise of

each party is the consideration for that of the other. 20 In all these cases, the selling
price of the object thereof is always predetermined and specified in the option
clause in the contract or in the separate deed of option. We elucidated, thus, in the
very recent case of Ang Yu Asuncion vs. Court of Appeals 21 that:
. . . In sales, particularly, to which the topic for discussion about
the case at bench belongs, the contract is perfected when a
person, called the seller, obligates himself, for a price certain, to
deliver and to transfer ownership of a thing or right to another,
called the buyer, over which the latter agrees. Article 1458 of the
Civil Code provides:
Art. 1458. By the contract of sale one of the
contracting parties obligates himself to transfer
the ownership of and to deliver a determinate
thing, and the other to pay therefor a price
certain in money or its equivalent.
A contract of sale may be absolute or
conditional.
When the sale is not absolute but conditional, such as in a
"Contract to Sell" where invariably the ownership of the thing
sold in retained until the fulfillment of a positive suspensive
condition (normally, the full payment of the purchase price), the
breach of the condition will prevent the obligation to convey title
from acquiring an obligatory force. . . .
An unconditional mutual promise to buy and sell, as long as the
object is made determinate and the price is fixed, can be
obligatory on the parties, and compliance therewith may
accordingly be exacted.
An accepted unilateral promise which specifies the thing to be
sold and the price to be paid, when coupled with a valuable
consideration distinct and separate from the price, is what may
properly be termed a perfected contract of option. This contract
is legally binding, and in sales, it conforms with the second
paragraph of Article 1479 of the Civil Code, viz:

binding upon the promisor if the promise is

supported by a consideration distinct from the
price. (1451a).
Observe, however, that the option is not the contract of sale
itself. The optionee has the right, but not the obligation, to buy.
Once the option is exercised timely, i.e., the offer is accepted
before a breach of the option, a bilateral promise to sell and to
buy ensues and both parties are then reciprocally bound to
comply with their respective undertakings.
Let us elucidate a little. A negotiation is formally initiated by an
offer. An imperfect promise (policitacion) is merely an offer.
Public advertisements or solicitations and the like are ordinarily
construed as mere invitations to make offers or only as proposals.
These relations, until a contract is perfected, are not considered
binding commitments. Thus, at any time prior to the perfection of
the contract, either negotiating party may stop the negotiation.
The offer, at this stage, may be withdrawn; the withdrawal is
effective immediately after its manifestation, such as by its
mailing and not necessarily when the offeree learns of the
withdrawal (Laudico vs. Arias, 43 Phil. 270). Where a period is
given to the offeree within which to accept the offer, the
following rules generally govern:
(1) If the period is not itself founded upon or supported by a
consideration, the offeror is still free and has the right to
withdraw the offer before its acceptance, or if an acceptance has
been made, before the offeror's coming to know of such fact, by
communicating that withdrawal to the offeree (see Art. 1324,
Civil Code; see also Atkins, Kroll & Co. vs. Cua, 102 Phil. 948,
holding that this rule is applicable to a unilateral promise to sell
under Art. 1479, modifying the previous decision in South
Western Sugar vs. Atlantic Gulf, 97 Phil. 249; see also Art. 1319,
Civil Code; Rural Bank of Paraaque, Inc. vs. Remolado, 135
SCRA 409; Sanchez vs. Rigos, 45 SCRA 368). The right to
withdraw, however, must not be exercised whimsically or
arbitrarily; otherwise, it could give rise to a damage claim under
Article 19 of the Civil Code which ordains that "every person
must, in the exercise of his rights and in the performance of his
duties, act with justice, give everyone his due, and observe
honesty and good faith."

Art. 1479. . . .
An accepted unilateral promise to buy or to sell
a determinate thing for a price certain is

(2) If the period has a separate consideration, a contract of

"option" deemed perfected, and it would be a breach of that
contract to withdraw the offer during the agreed period. The

option, however, is an independent contract by itself; and it is to

be distinguished from the projected main agreement (subject
matter of the option) which is obviously yet to be concluded. If,
in fact, the optioner-offeror withdraws the offer before its
acceptance (exercise of the option) by the optionee-offeree, the
latter may not sue for specific performance on the proposed
contract ("object" of the option) since it has failed to reach its
own stage of perfection. The optioner-offeror, however, renders
himself liable for damages for breach of the opinion. . .

price agreed upon provided the lessor also consents that, should it sell the
leased property, then, Mayfair shall be given the right to match the offered
purchase price and to buy the property at that price. As stated in Vda. De
Quirino vs. Palarca, 23 in reciprocal contract, the obligation or promise of
each party is the consideration for that of the other.

In the light of the foregoing disquisition and in view of the wording of the
questioned provision in the two lease contracts involved in the instant
case, we so hold that no option to purchase in contemplation of the second
paragraph of Article 1479 of the Civil Code, has been granted to Mayfair
under the said lease contracts.

We shall now determine the consequential rights, obligations and

liabilities of Carmelo, Mayfair and Equatorial.

Respondent Court of Appeals correctly ruled that the said paragraph 8

grants the right of first refusal to Mayfair and is not an option contract. It
also correctly reasoned that as such, the requirement of a separate
consideration for the option, has no applicability in the instant case.
There is nothing in the identical Paragraphs "8" of the June 1, 1967 and
March 31, 1969 contracts which would bring them into the ambit of the
usual offer or option requiring an independent consideration.
An option is a contract granting a privilege to buy or sell within an agreed
time and at a determined price. It is a separate and distinct contract from
that which the parties may enter into upon the consummation of the
option. It must be supported by consideration. 22 In the instant case, the
right of first refusal is an integral part of the contracts of lease. The
consideration is built into the reciprocal obligations of the parties.
To rule that a contractual stipulation such as that found in paragraph 8 of
the contracts is governed by Article 1324 on withdrawal of the offer or
Article 1479 on promise to buy and sell would render in effectual or
"inutile" the provisions on right of first refusal so commonly inserted in
leases of real estate nowadays. The Court of Appeals is correct in stating
that Paragraph 8 was incorporated into the contracts of lease for the
benefit of Mayfair which wanted to be assured that it shall be given the
first crack or the first option to buy the property at the price which
Carmelo is willing to accept. It is not also correct to say that there is no
consideration in an agreement of right of first refusal. The stipulation is
part and parcel of the entire contract of lease. The consideration for the
lease includes the consideration for the right of first refusal. Thus, Mayfair
is in effect stating that it consents to lease the premises and to pay the

The respondent Court of Appeals was correct in ascertaining the true

nature of the aforecited paragraph 8 to be that of a contractual grant of the
right of first refusal to Mayfair.

The different facts and circumstances in this case call for an amplification
of the precedent in Ang Yu Asuncion vs. Court of Appeals. 24
First and foremost is that the petitioners acted in bad faith to render
Paragraph 8 "inutile".
What Carmelo and Mayfair agreed to, by executing the two lease
contracts, was that Mayfair will have the right of first refusal in the event
Carmelo sells the leased premises. It is undisputed that Carmelo did
recognize this right of Mayfair, for it informed the latter of its intention to
sell the said property in 1974. There was an exchange of letters
evidencing the offer and counter-offers made by both parties. Carmelo,
however, did not pursue the exercise to its logical end. While it initially
recognized Mayfair's right of first refusal, Carmelo violated such right
when without affording its negotiations with Mayfair the full process to
ripen to at least an interface of a definite offer and a possible
corresponding acceptance within the "30-day exclusive option" time
granted Mayfair, Carmelo abandoned negotiations, kept a low profile for
some time, and then sold, without prior notice to Mayfair, the entire Claro
M Recto property to Equatorial.
Since Equatorial is a buyer in bad faith, this finding renders the sale to it
of the property in question rescissible. We agree with respondent
Appellate Court that the records bear out the fact that Equatorial was
aware of the lease contracts because its lawyers had, prior to the sale,
studied the said contracts. As such, Equatorial cannot tenably claim to be
a purchaser in good faith, and, therefore, rescission lies.
. . . Contract of Sale was not voidable but rescissible. Under
Article 1380 to 1381(3) of the Civil Code, a contract otherwise
valid may nonetheless be subsequently rescinded by reason of
injury to third persons, like creditors. The status of creditors

could be validly accorded the Bonnevies for they had substantial

interests that were prejudiced by the sale of the subject property
to the petitioner without recognizing their right of first priority
under the Contract of Lease.
According to Tolentino, rescission is a remedy granted by law to
the contracting parties and even to third persons, to secure
reparation for damages caused to them by a contract, even if this
should be valid, by means of the restoration of things to their
condition at the moment prior to the celebration of said contract.
It is a relief allowed for the protection of one of the contracting
parties and even third persons from all injury and damage the
contract may cause, or to protect some incompatible and
preferent right created by the contract. Rescission implies a
contract which, even if initially valid, produces a lesion or
pecuniary damage to someone that justifies its invalidation for
reasons of equity.
It is true that the acquisition by a third person of the property
subject of the contract is an obstacle to the action for its
rescission where it is shown that such third person is in lawful
possession of the subject of the contract and that he did not act in
bad faith. However, this rule is not applicable in the case before
us because the petitioner is not considered a third party in
relation to the Contract of Sale nor may its possession of the
subject property be regarded as acquired lawfully and in good
faith.
Indeed, Guzman, Bocaling and Co. was the vendee in the
Contract of Sale. Moreover, the petitioner cannot be deemed a
purchaser in good faith for the record shows that it categorically
admitted it was aware of the lease in favor of the Bonnevies, who
were actually occupying the subject property at the time it was
sold to it. Although the Contract of Lease was not annotated on
the transfer certificate of title in the name of the late Jose
Reynoso and Africa Reynoso, the petitioner cannot deny actual
knowledge of such lease which was equivalent to and indeed
more binding than presumed notice by registration.
A purchaser in good faith and for value 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 or interest of some other person in the property.
Good faith connotes an honest intention to abstain from taking
unconscientious advantage of another. Tested by these principles,

the petitioner cannot tenably claim to be a buyer in good faith as

it had notice of the lease of the property by the Bonnevies and
such knowledge should have cautioned it to look deeper into the
agreement to determine if it involved stipulations that would
prejudice its own interests.
The petitioner insists that it was not aware of the right of first
priority granted by the Contract of Lease. Assuming this to be
true, we nevertheless agree with the observation of the
respondent court that:
If Guzman-Bocaling failed to inquire about the
terms of the Lease Contract, which includes
Par. 20 on priority right given to the
Bonnevies, it had only itself to blame. Having
known that the property it was buying was
under lease, it behooved it as a prudent person
to have required Reynoso or the broker to show
to it the Contract of Lease in which Par. 20 is
contained. 25
Petitioners assert the alleged impossibility of performance because the
entire property is indivisible property. It was petitioner Carmelo which
fixed the limits of the property it was leasing out. Common sense and
fairness dictate that instead of nullifying the agreement on that basis, the
stipulation should be given effect by including the indivisible
appurtenances in the sale of the dominant portion under the right of first
refusal. A valid and legal contract where the ascendant or the more
important of the two parties is the landowner should be given effect, if
possible, instead of being nullified on a selfish pretext posited by the
owner. Following the arguments of petitioners and the participation of the
owner in the attempt to strip Mayfair of its rights, the right of first refusal
should include not only the property specified in the contracts of lease but
also the appurtenant portions sold to Equatorial which are claimed by
petitioners to be indivisible. Carmelo acted in bad faith when it sold the
entire property to Equatorial without informing Mayfair, a clear violation
of Mayfair's rights. While there was a series of exchanges of letters
evidencing the offer and counter-offers between the parties, Carmelo
abandoned the negotiations without giving Mayfair full opportunity to
negotiate within the 30-day period.
Accordingly, even as it recognizes the right of first refusal, this Court
should also order that Mayfair be authorized to exercise its right of first
refusal under the contract to include the entirety of the indivisible
property. The boundaries of the property sold should be the boundaries of
the offer under the right of first refusal. As to the remedy to enforce

Mayfair's right, the Court disagrees to a certain extent with the concluding
part of the dissenting opinion of Justice Vitug. The doctrine enunciated in
Ang Yu Asuncion vs. Court of Appeals should be modified, if not
amplified under the peculiar facts of this case.
As also earlier emphasized, the contract of sale between Equatorial and
Carmelo is characterized by bad faith, since it was knowingly entered into
in violation of the rights of and to the prejudice of Mayfair. In fact, as
correctly observed by the Court of Appeals, Equatorial admitted that its
lawyers had studied the contract of lease prior to the sale. Equatorial's
knowledge of the stipulations therein should have cautioned it to look
further into the agreement to determine if it involved stipulations that
would prejudice its own interests.
Since Mayfair has a right of first refusal, it can exercise the right only if
the fraudulent sale is first set aside or rescinded. All of these matters are
now before us and so there should be no piecemeal determination of this
case and leave festering sores to deteriorate into endless litigation. The
facts of the case and considerations of justice and equity require that we
order rescission here and now. Rescission is a relief allowed for the
protection of one of the contracting parties and even third persons from all
injury and damage the contract may cause or to protect some incompatible
and preferred right by the contract. 26 The sale of the subject real property
by Carmelo to Equatorial should now be rescinded considering that
Mayfair, which had substantial interest over the subject property, was
prejudiced by the sale of the subject property to Equatorial without
Carmelo conferring to Mayfair every opportunity to negotiate within the
30-day stipulated period. 27
This Court has always been against multiplicity of suits where all
remedies according to the facts and the law can be included. Since
Carmelo sold the property for P11,300,000.00 to Equatorial, the price at
which Mayfair could have purchased the property is, therefore, fixed. It
can neither be more nor less. There is no dispute over it. The damages
which Mayfair suffered are in terms of actual injury and lost
opportunities. The fairest solution would be to allow Mayfair to exercise
its right of first refusal at the price which it was entitled to accept or reject
which is P11,300,000.00. This is clear from the records.
To follow an alternative solution that Carmelo and Mayfair may resume
negotiations for the sale to the latter of the disputed property would be
unjust and unkind to Mayfair because it is once more compelled to litigate
to enforce its right. It is not proper to give it an empty or vacuous victory
in this case. From the viewpoint of Carmelo, it is like asking a fish if it
would accept the choice of being thrown back into the river. Why should
Carmelo be rewarded for and allowed to profit from, its wrongdoing?

Prices of real estate have skyrocketed. After having sold the property for
P11,300,000.00, why should it be given another chance to sell it at an
increased price?
Under the Ang Yu Asuncion vs. Court of Appeals decision, the Court
stated that there was nothing to execute because a contract over the right
of first refusal belongs to a class of preparatory juridical relations
governed not by the law on contracts but by the codal provisions on
human relations. This may apply here if the contract is limited to the
buying and selling of the real property. However, the obligation of
Carmelo to first offer the property to Mayfair is embodied in a contract. It
is Paragraph 8 on the right of first refusal which created the obligation. It
should be enforced according to the law on contracts instead of the
panoramic and indefinite rule on human relations. The latter remedy
encourages multiplicity of suits. There is something to execute and that is
for Carmelo to comply with its obligation to the property under the right
of the first refusal according to the terms at which they should have been
offered then to Mayfair, at the price when that offer should have been
made. Also, Mayfair has to accept the offer. This juridical relation is not
amorphous nor is it merely preparatory. Paragraphs 8 of the two leases
can be executed according to their terms.
On the question of interest payments on the principal amount of
P11,300,000.00, it must be borne in mind that both Carmelo and
Equatorial acted in bad faith. Carmelo knowingly and deliberately broke a
contract entered into with Mayfair. It sold the property to Equatorial with
purpose and intend to withhold any notice or knowledge of the sale
coming to the attention of Mayfair. All the circumstances point to a
calculated and contrived plan of non-compliance with the agreement of
first refusal.
On the part of Equatorial, it cannot be a buyer in good faith because it
bought the property with notice and full knowledge that Mayfair had a
right to or interest in the property superior to its own. Carmelo and
Equatorial took unconscientious advantage of Mayfair.
Neither may Carmelo and Equatorial avail of considerations based on
equity which might warrant the grant of interests. The vendor received as
payment from the vendee what, at the time, was a full and fair price for
the property. It has used the P11,300,000.00 all these years earning
income or interest from the amount. Equatorial, on the other hand, has
received rents and otherwise profited from the use of the property turned
over to it by Carmelo. In fact, during all the years that this controversy
was being litigated, Mayfair paid rentals regularly to the buyer who had
an inferior right to purchase the property. Mayfair is under no obligation

to pay any interests arising from this judgment to either Carmelo or

Equatorial.
WHEREFORE, the petition for review of the decision of the Court of
Appeals, dated June 23, 1992, in CA-G.R. CV No. 32918, is HEREBY
DENIED. The Deed of Absolute Sale between petitioners Equatorial
Realty Development, Inc. and Carmelo & Bauermann, Inc. is hereby
deemed rescinded; petitioner Carmelo & Bauermann is ordered to return
to petitioner Equatorial Realty Development the purchase price. The latter
is directed to execute the deeds and documents necessary to return
ownership to Carmelo and Bauermann of the disputed lots. Carmelo &
Bauermann is ordered to allow Mayfair Theater, Inc. to buy the aforesaid
lots for P11,300,000.00.
SO ORDERED.

CO-OWNERSHIP

(1) [G.R. No. 122047. October 12, 2000]

SPOUSES SERAFIN SI AND ANITA BONODE SI, petitioners, vs. COURT

OF APPEALS, SPOUSES JOSE ARMADA and REMEDIOS
ALMANZOR (deceased, and substituted by heirs: Cynthia Armada,
Danilo Armada and Vicente Armada)respondents.
DECISION
QUISUMBING, J.:
This petition for certiorari under Rule 45 assails the Decision[1] dated March
25, 1994, of the Court of Appeals and its Resolutions[2] dated March 24, 1995 and
September 6, 1995 in CA-G.R. CV No. 30727. The Court of Appeals reversed the
decision of the Regional Trial Court of Pasig City, Branch 113, and nullified the
sale of the subject lot by the spouses Crisostomo and Cresenciana Armada to
spouses Serafin and Anita Si. The dispositive portion of the respondent court's
decision reads:
"WHEREFORE, in view of the foregoing, the decision appealed from is hereby
REVERSED, and a new one is rendered:
1) Annulling and declaring as invalid the registration of the Deed of
Absolute Sale dated March 27, 1979 executed by Cresenciana V.
Alejo in favor of Anita Bonode Si.
2) Ordering the Register of Deeds of Pasay City to annul and cancel
Transfer Certificate of Title No. 24751, issued in the name of Anita
Bonode Si, married to Serafin D. Si., Jose R. Armada, married to
Remedios Almanzor and Dr. Severo R. Armada Jr., single.
3) Ordering the Register of Deeds of Pasay City to reconstitute and
revive Transfer Certificate of Title No. 16007 in the names of Jose,
Crisostomo and Severo, Jr.

4) That plaintiffs be allowed to repurchase or redeem the share

corresponding to the share of Crisostomo Armada within thirty (30)
days from notice in writing by Crisostomo Armada.
5) The defendants-appellees are jointly and severally ordered to pay the
plaintiffs-appellants the sum of P10,000.00 as moral damages.
6) The defendants-appellees are jointly and severally ordered to pay the
plaintiff-appellants the sum of P10,000.00 as attorney's fees and
litigation expenses and costs of suit.
SO ORDERED."[3]
The factual background of the case is as follows:
The 340 square meters of land, situated in San Jose District, Pasay City, the
property in dispute, originally belonged to Escolastica, wife of Severo Armada,
Sr. This was covered by Transfer Certificate of Title (TCT) No. (17345) 2460.
During the lifetime of the spouses, the property was transferred to their children
and the Registry of Deeds, Pasay City, issued TCT No. 16007 in the names of the
three sons, as follows : "DR. CRISOSTOMO R. ARMADA, married to
Cresenciana V. Alejo, 113.34 Square Meters; JOSE R. ARMADA, married to
Remedios Almanzor, 113.33 Square Meters; and DR. SEVERO R. ARMADA, Jr.,
single, all of legal age, Filipinos." [4] Annotated also in the title is the total
cancellation of said title "... by virtue of the Deed of Sale, (P.E. 77952/T-24751),
dated March 28, 1979, executed by CRESENCIANA V. ALEJO, as attorney-infact of CRISOSTOMO R. ARMADA, conveying 113.34 square meters of the
property herein, in favor of ANITA BONODE SI, married to Serafin D. Si, for the
sum of P75,000.00, issuing in lieu thereof Transfer Certificate of Title No. 24751,
Reg. Book T-102. (Doc. No. 17, Page No. 5, Book No. 253 of Notary Public of
Pasay City, Manila, Julian Florentino)." [5]
On April 15, 1980, herein spouses Jose Armada and Remedios Almanzor,
filed a complaint for Annulment of Deed of Sale and Reconveyance of Title with
Damages, against herein petitioners Anita and Serafin Si and Conrado Isada,
brother-in-law of Cresenciana. Isada brokered the sale.
The complaint alleged that Conrado Isada sold Crisostomo's share by making
it appear that Cresenciana, the attorney-in-fact of her husband, is a Filipino citizen,
residing with Isada at No. 13-4th Camarilla Street, Murphy, Cubao, Quezon City.
By this time, Crisostomo and Cresenciana had migrated and were already citizens
of the United States of America. It also stated that when petitioners registered the
deed of absolute sale they inserted the phrase "... and that the co-owners are not
interested in buying the same in spite of notice to them.", and that petitioners knew
of the misrepresentations of Conrado.Further, the complaint alleged that the other
owners, Jose and Severo, Jr., had no written notice of the sale; and that all upon
learning of the sale to the spouses Si, private respondents filed a complaint for

annulment of sale and reconveyance of title with damages, claiming they had a
right of redemption.
Petitioners, on the other hand, alleged that on October 2, 1954, Escolastica,
with the consent of her husband executed three separate deeds of sale (Exhibits 1,
2, and 3)[6] conveying 113.34 square meters of the property to Severo, and 113.33
square meters each to Crisostomo and Jose. The three deeds of sale particularly
described the portion conveyed to each son in metes and bounds. Petitioners
contend that since the property was already three distinct parcels of land, there was
no longer co-ownership among the brothers. Hence, Jose and Severo, Jr. had no
right of redemption when Crisostomo sold his share to the spouses Si. Petitioners
point out that it was only because the Armada brothers failed to submit the
necessary subdivision plan to the Office of the Register of Deeds in Pasay City that
separate titles were not issued and TCT No. 16007 was issued and registered in the
names of Jose, Crisostomo, and Severo, Jr.
After trial on the merits, the court ruled for petitioners:
"IN VIEW OF ALL THE FOREGOING,
DISMISSED. With costs against the plaintiffs."[7]

the

complaint

is

hereby

Private respondents appealed to the Court of Appeals. On March 25, 1994,

the appellate court issued the decision now assailed by petitioners. In reversing the
decision of the trial court and ruling for private respondents, the Court of Appeals
found that:
"A careful examination of TCT No. 16007 (Exh. 'A') shows that the portion sold by
virtue of the Deeds of Sale (Exh. 1, 2, & 3) to the Armada brothers do not appear in
the said title, neither does it indicate the particular area sold. Moreover, no
evidence was presented to show that the Register of Deeds issued TCT No. 16007
(Exh. 'A') on the basis of the said deeds of Sale. In fact, TCT No. 16007 (Exh. 'A')
shows that the lot is co-owned by Jose, Crisostomo and Severo, Jr. in the
proportion of 113.33, 113.34 and 113.33 sq. m. respectively.
Furthermore, the evidence on record shows that the Deed of Absolute Sale (Exh.
'B'), executed by Cresencia Armada in favor of defendants Si, stated that the
portion sold was the 'undivided one hundred thirteen & 34/100 (113.34) square
meters' of the parcel of land covered by TCT NO. 16007 of the Registry of Deeds
for Pasay City, which means that what was sold to defendants are still
undetermined and unidentifiable, as the area sold remains a portion of the whole.
Moreover, plaintiff Remedi[o]s Armada testified that on March 27, 1979,
Crisostomo Armada, thru his attorney-in-fact and co-defendant, Cresenciana Alejo,
sold his undivided 113.34 share to defendants, Sps. Si as evidenced by a Deed of
Absolute Sale (Exh. 'B'), and presented for registration with the Register of Deeds
(Exh. 'B-1') without notifying plaintiffs of the sale (TSN, pp. 6-8, December 20,

1988). Instead, it appears that the phrase 'and that the co-owners are not interested
in buying the same inspite of notice to them', was inserted in the Deed of Sale
(Exh. 'B').
xxx
Otherwise stated, the sale by a (sic) co-owner of his share in the undivided property
is not invalid, but shall not be recorded in the Registry Property, unless
accompanied by an affidavit of the Vendor that he has given written notice thereof
to all possible redemptioners."[8]
On August 29, 1994, petitioners' counsel on record, Atty. Roberto B. Yam
received a copy of the CA decision. On October 14, 1994, he filed a motion for
reconsideration, but it was denied by the Court of Appeals on November 21, 1994,
for being filed out of time.
On December 5, 1994, petitioners filed their motion for new trial under
Section 1, Rule 53 of the Revised Rules of Court.[9] Petitioners presented new
evidence, TCT No. (17345) 2460, registered in the name of Escolastica de la Rosa,
married to Severo Armada, Sr., with annotation at the back stating that the
cancellation was by virtue of three deeds of sale in favor of Escolastica's sons. On
March 24, 1995, respondent court denied the motion, reasoning that when the
motion was filed, the reglementary period had lapsed and the decision had become
final and executory. Petitioners' motion for reconsideration of said resolution was
denied.
Hence, the present petition, alleging that:
"1. Respondent Court of Appeals committed a reversible error in ruling
that a co-ownership still existed.
"2. Respondent Court of Appeals committed a reversible error in
denying the Motion for Reconsideration of its Decision of 25 March
1994 on purely technical grounds.
"3. Respondent Court of Appeals committed a reversible error in
denying the Motion for New Trial.
"4. Respondent Court of Appeals committed a reversible error in
ordering petitioners to pay moral damages, attorney's fees, litigation
expenses and the costs of the suit."[10]
In essence, this Court is asked to resolve: (1) whether respondent court erred
in denying petitioners' motion for reconsideration and/or the Motion for New
Trial; (2) whether private respondents are co-owners who are legally entitled to
redeem the lot under Article 1623 of the Civil Code; [11] and (3) whether the award
of moral damages, attorney's fees and costs of suit is correct.

The pivotal issue is whether private respondents may claim the right of
redemption under Art. 1623 of the Civil Code. The trial court found that the
disputed land was not part of an undivided estate. It held that the three deeds of
absolute sale[12]technically described the portion sold to each son. The portions
belonging to the three sons were separately declared for taxation purposes with the
Assessor's Office of Pasay City on September 21, 1970. [13]Jose's testimony that the
land was undivided was contradicted by his wife when she said they had been
receiving rent from the property specifically allotted to Jose.[14] More significantly,
on January 9, 1995, the Registry of Deeds of Pasay City cancelled TCT 24751 and
issued three new titles as follows: (1) TCT 134594[15] in favor of Severo Armada,
Jr.; (2) TCT 134595[16] under the name of Anita Bonode Si, married to Serafin Si;
and (3) TCT 134596[17] owned by Jose Armada, married to Remedios
Almanzor. All these are on record.
However, the Court of Appeals' decision contradicted the trial court's
findings.[18]
In instances when the findings of fact of the Court of Appeals are at variance
with those of the trial court, or when the inference drawn by the Court of Appeals
from the facts is manifestly mistaken, this Court will not hesitate to review the
evidence in order to arrive at the correct factual conclusion. [19] This we have done
in this case. It is our considered view now, that the trial court is correct when it
found that:
"Rightfully, as early as October 2, 1954, the lot in question had already been
partitioned when their parents executed three (3) deed of sales (sic) in favor of
Jose, Crisostomo and Severo, all surnamed Armada (Exh. 1, 2, & 3), which
documents purports to have been registered with the Register of Deeds of Pasay
City, on September 18, 1970, and as a consequence TCT No. 16007 (Exh. A) was
issued. Notably, every portion conveyed and transferred to the three sons was
definitely described and segregated and with the corresponding technical
description (sic). In short, this is what we call extrajudicial partition. Moreover,
every portion belonging to the three sons has been declared for taxation purposes
with the Assessor's Office of Pasay City on September 21, 1970. These are the
unblinkable facts that the portion sold to defendant spouses Si by defendants
Crisostomo Armada and Cresenciana Armada was concretely determined and
identifiable. The fact that the three portions are embraced in one certificate of title
does not make said portions less determinable or identifiable or distinguishable,
one from the other, nor that dominion over each portion less exclusive, in their
respective owners. Hence, no right of redemption among co-owners
exists."[20] (citation omitted)
". . . [T]he herein plaintiffs cannot deny the fact that they did not have knowledge
about the impending sale of this portion. The truth of the matter is that they were
properly notified. Reacting to such knowledge and notification they wrote
defendant Dr. Crisostomo Armada on February 22, 1979, a portion of said letter is

revealing: 'Well you are the king of yourselves, and you can sell your share of
Levereza."[21] (emphasis omitted)
After the physical division of the lot among the brothers, the community
ownership terminated, and the right of preemption or redemption for each brother
was no longer available.[22]
Under Art. 484 of the Civil Code,[23] there is co-ownership whenever the
ownership of an undivided thing or right belongs to different persons. There is no
co-ownership when the different portions owned by different people are already
concretely determined and separately identifiable, even if not yet technically
described.[24] This situation makes inapplicable the provision on the right of
redemption of a co-owner in the Civil Code, as follows:
"Art. 1623. The right of legal pre-emption or redemption shall not be exercised
except within thirty days from the notice in writing by the prospective vendor, or
by the vendor, as the case may be. The deed of sale shall not be recorded in the
Registry of Property, unless accompanied by an affidavit of the vendor that he has
given written notice thereof to all possible redemptioners.
The right of redemption of co-owners excludes that of adjoining owners."
Moreover, we note that private respondent Jose Armada was well informed of
the impending sale of Crisostomo's share in the land. In a letter dated February 22,
1979, Jose told his brother Crisostomo: "Well you are the king of yourselves, and
you can sell your share of Leveriza."[25] Co-owners with actual notice of the sale
are not entitled to written notice. A written notice is a formal requisite to make
certain that the co-owners have actual notice of the sale to enable them to exercise
their right of redemption within the limited period of thirty days. But where the coowners had actual notice of the sale at the time thereof and/or afterwards, a written
notice of a fact already known to them, would be superfluous. The statute does not
demand what is unnecessary.[26]
Considering that respondent Court of Appeals erred in holding that herein
private respondent could redeem the lot bought by petitioners, the issue of whether
the appellate court erred in denying petitioners' motions for reconsideration and
new trial need not be delved into. The same is true with respect to the questioned
award of damages and attorney's fees. Petitioners filed their complaint in good faith
and as repeatedly held, we cannot put a premium on the right to litigate.
WHEREFORE, the petition is GRANTED, the Decision of the Court of
Appeals dated March 25, 1994 and its Resolutions dated March 24, 1995 and
September 6, 1995 in CA-G.R. CV No. 30727 are ANNULLED and SET
ASIDE. Civil Case No. 8023-P is DISMISSED for lack of merit. The decision of
the Regional Trial Court of Pasay City, Branch 113, promulgated on August 29,
1989, is REINSTATED.

SO ORDERED.

(2)

[G.R.

No.

L-49731.

September

29,

1988.]

ALFREDO SERING, Petitioner, v. RESTITUTO PLAZO and GERTRUDES

SUAN, Respondents.
Manuel

Tesiorna

and

Noel

P.

Catre

for Petitioner.

Timoteo R. Quimpo, Jr. for Respondents.

SYLLABUS

1. CIVIL LAW; CIVIL CODE; PROPERTY; CO-OWNERSHIP; ACTION IN

EJECTMENT; MAY BE BROUGHT BY ANYONE OF THE CO-OWNERS.
Since under Article 487 of the Civil Code, anyone of the co-owners of an
immovable may bring an action in ejectment, the action may be filed without
joining the other co-owners, the same being deemed instituted for the benefit of all
(Vencilao
v.
Camarento,
29
SCRA
473).
2. ID.; ID.; ID.; ID.; ID.; INCLUDES A SUIT OF FORCIBLE ENTRY OR
UNLAWFUL DETAINER. The term, "action in ejectment" includes a suit of
forcible entry (detentacion) or unlawful detainer (desahucio).

DECISION

NARVASA, J.:

The application of settled principles is all that is needed to resolve the instant
appeal. Article 487 of the Civil Code provides that anyone of the co-owners of an
immovable may bring an action in ejectment. A co-owner may thus bring an
ejectment action without joining the other co-owners, the suit being deemed
instituted for the benefit of all. 1 And the term, "action in ejectment," includes a
suit of forcible entry (detentacion) or unlawful detainer (desahucio). 2
The proceeding at bar had its inception in a forcible entry suit filed by petitioner
Sering against respondent Spouses Restituto Plazo and Gertrudes Suan with the

then Municipal Court of del Carmen, Surigao del Norte. 3 The case resulted in a
judgment against the Plazos who thereupon appealed to the Court of First Instance
of Surigao del Norte. In the latter court the Plazos learned that the property subject
of the suit was not owned solely by Sering but was owned in common by him and
others. This prompted the Plazos to move for the impleading of the other coowners as parties plaintiff, on the theory that they were indispensable parties. 4 The
Court agreed and ordered Sering to amend his complaint so as to include his coowners as co-plaintiffs. Sering demurred claiming that under the law anyone of the
co-owners could bring suit for ejectment without joining the others. 5 The Plazos
contended, on the other hand, that the provision invoked by Sering had no
application to forcible entry actions, but only to suits of unlawful detainer. Because
Sering failed to comply with the Courts order for amendment of the complaint, the
Trial Court dismissed his complaint. 6 It also thereafter denied his motion for
reconsideration. 7 Sering has come to this Court praying for the nullification and
reversal of said order of dismissal and that denying his plea for
reconsideration.chanrobles
law
library
The orders complained of are indeed tainted by serious error and should therefore
be reversed and set aside, upon the considerations set out in the opening paragraph
of this resolution. The same issues had been raised and resolved as early as eight
(8) years before promulgation of the contested orders. In Vencilao v. Camarento,
decided in 1969, 8 this Court pertinently ruled as follows: 9

- versus -

EMETERIO M. ADLAWAN and

NARCISA M. ADLAWAN,
Respondents.

Panganiban, C.J.
(Chairman),
Ynares-Santiago,
Austria-Martinez,
Callejo, Sr., and
Chico-Nazario, JJ.
Promulgated:
January 20, 2006

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

YNARES-SANTIAGO, J.:

Assailed in this petition for review is the September 23, 2003 Decision [1] of
the Court of Appeals in CA-G.R. SP No. 74921 which set aside the September 13,

"2. Anent the question of whether an action of forcible entry and detainer should be
brought in the name of all co-owners, We hold that under Article 487 of the new
Civil Code, any of the co-owners may bring the action . . . In forcible entry and
detainer action(s), the matter to be determined is simply the question of prior
physical possession. It having been alleged in the complaint that the plaintiff was
in actual possession of the properties, certainly the plaintiff alone, who was in
actual possession, could file the complaint."cralaw virtua1aw library

2002 Decision[2] of the Regional Trial Court (RTC) of Cebu City, Branch 7, in
Civil Case No. CEB-27806, and reinstated the February 12, 2002 Judgment [3] of
the Municipal Trial Court (MTC) of Minglanilla, Metro Cebu, in Civil Case No.
392, dismissing petitioner Arnelito Adlawans unlawful detainer suit against
respondents Emeterio and Narcisa Adlawan. Likewise questioned is the January 8,

The Court has been cited to no reason of substance for modifying or overruling this
doctrine.
WHEREFORE, the challenged Orders dismissing the petitioners complaint for
ejectment and denying reconsideration of the dismissal decree 10 are
REVERSED AND SET ASIDE, and the case is REMANDED to the Regional
Trial Court for resolution, with all deliberate dispatch, of the respondents appeal
from the judgment of the inferior court. This Resolution is immediately executory.

2004 Resolution[4] of the Court of Appeals which denied petitioners motion for
reconsideration.

The instant ejectment suit stemmed from the parties dispute over Lot 7226
and the house built thereon, covered by Transfer Certificate of Title No.
8842,[5] registered in the name of the late Dominador Adlawan and located at
Barrio Lipata, Municipality of Minglanilla, Cebu.

(3) ARNELITO ADLAWAN,

G.R. No. 161916

In his complaint, petitioner

claimed that he is an acknowledged illegitimate child [6] of Dominador who died on

May 28, 1987 without any other issue. Claiming to be the sole heir of Dominador,

Petitioner,
Present:

he executed an affidavit adjudicating to himself Lot 7226 and the house built

thereon.[7] Out of respect and generosity to respondents who are the siblings of his
father, he granted their plea to occupy the subject property provided they would

Respondents also contended that Dominadors signature at the back of

vacate the same should his need for the property arise. Sometime in January 1999,

petitioners birth certificate was forged, hence, the latter is not an heir of

he verbally requested respondents to vacate the house and lot, but they refused and

Dominador and has no right to claim ownership of Lot 7226.[15] They argued that

filed instead an action for quieting of title[8] with the RTC. Finally, upon

even if petitioner is indeed Dominadors acknowledged illegitimate son, his right

respondents refusal to heed the last demand letter to vacate dated August 2, 2000,

to succeed is doubtful because Dominador was survived by his wife, Graciana.[16]

petitioner filed the instant case on August 9, 2000.[9]

On February 12, 2002, the MTC dismissed the complaint holding that the
On the other hand, respondents Narcisa and Emeterio, 70 and 59 years of

establishment of petitioners filiation and the settlement of the estate of Dominador

age, respectively,[10] denied that they begged petitioner to allow them to stay on the

are conditions precedent to the accrual of petitioners action for ejectment. It

questioned property and stressed that they have been occupying Lot 7226 and the

added that since Dominador was survived by his wife, Graciana, who died 10 years

house standing thereon since birth. They alleged that Lot 7226 was originally

thereafter, her legal heirs are also entitled to their share in Lot 7226. The

registered in the name of their deceased father, Ramon Adlawan

[11]

and the

dispositive portion thereof, reads:

ancestral house standing thereon was owned by Ramon and their mother, Oligia
Maacap Adlawan. The spouses had nine[12] children including the late Dominador
and herein surviving respondents Emeterio and Narcisa. During the lifetime of
their parents and deceased siblings, all of them lived on the said

In View of the foregoing, for failure to prove by

preponderance of evidence, the plaintiffs cause of action, the
above-entitled case is hereby Ordered DISMISSED.
SO ORDERED.[17]

property. Dominador and his wife, Graciana Ramas Adlawan, who died without
issue, also occupied the same.[13] Petitioner, on the other hand, is a stranger who
never had possession of Lot 7226.

On appeal by petitioner, the RTC reversed the decision of the MTC

holding that the title of Dominador over Lot 7226 cannot be collaterally
attacked. It thus ordered respondents to turn over possession of the controverted

Sometime in 1961, spouses Ramon and Oligia needed money to finance

the renovation of their house. Since they were not qualified to obtain a loan, they

lot to petitioner and to pay compensation for the use and occupation of the
premises. The decretal portion thereof, provides:

transferred ownership of Lot 7226 in the name of their son Dominador who was
the only one in the family who had a college education. By virtue of a January 31,
1962 simulated deed of sale,[14] a title was issued to Dominador which enabled him
to secure a loan with Lot 7226 as collateral. Notwithstanding the execution of the
simulated deed, Dominador, then single, never disputed his parents ownership of
the lot. He and his wife, Graciana, did not disturb respondents possession of the
property until they died on May 28, 1987 and May 6, 1997, respectively.

Wherefore, the Judgment, dated February 12, 2002, of

the Municipal Trial Court of Minglanilla, Cebu, in Civil Case
No. 392, is reversed. Defendants-appellees are directed to
restore to plaintiff-appellant possession of Lot 7226 and the
house thereon, and to pay plaintiff-appellant, beginning in
August 2000, compensation for their use and occupation of the
property in the amount of P500.00 a month.
So ordered.[18]

The decisive issue to be resolved is whether or not petitioner can validly

Meanwhile, the RTC granted petitioners motion for execution pending
appeal

[19]

maintain the instant case for ejectment.

which was opposed by the alleged nephew and nieces of Graciana in

their motion for leave to intervene and to file an answer in intervention.[20] They

Petitioner averred that he is an acknowledged illegitimate son and the sole

contended that as heirs of Graciana, they have a share in Lot 7226 and that

heir of Dominador. He in fact executed an affidavit adjudicating to himself the

intervention is necessary to protect their right over the property. In addition, they

controverted property. In ruling for the petitioner, the RTC held that the

declared that as co-owners of the property, they are allowing respondents to stay in

questioned January 31, 1962 deed of sale validly transferred title to Dominador and

Lot 7226 until a formal partition of the property is made.

that petitioner is his acknowledged illegitimate son who inherited ownership of the
questioned lot. The Court notes, however, that the RTC lost sight of the fact that

The RTC denied the motion for leave to intervene.[21] It, however,

the theory of succession invoked by petitioner would end up proving that he is not

recalled the order granting the execution pending appeal having lost jurisdiction

the sole owner of Lot 7226. This is so because Dominador was survived not only

over the case in view of the petition filed by respondents with the Court of

by petitioner but also by his legal wife, Graciana, who died 10 years after the

Appeals.

[22]

demise of Dominador on May 28, 1987.[24] By intestate succession, Graciana and

petitioner became co-owners of Lot 7226.[25] The death of Graciana on May 6,

On September 23, 2003, the Court of Appeals set aside the decision of the

1997, did not make petitioner the absolute owner of Lot 7226 because the share of

RTC and reinstated the judgment of the MTC. It ratiocinated that petitioner and

Graciana passed to her relatives by consanguinity and not to petitioner with whom

the heirs of Graciana are co-owners of Lot 7226. As such, petitioner cannot eject

she had no blood relations. The Court of Appeals thus correctly held that petitioner

respondents from the property via an unlawful detainer suit filed in his own name

has no authority to institute the instant action as the sole owner of Lot 7226.

and as the sole owner of the property. Thus

WHEEFORE, premises considered, the appealed
Decision dated September 13, 2002 of the Regional Trial Court
of Cebu City, Branch 7, in Civil Case No. CEB-27806 is
REVERSED and SET ASIDE, and the Judgment dated February
12, 2002 of the Municipal Trial Court of Minglanilla, Metro
Cebu, in Civil Case No. 392 is REINSTATED. Costs against the
respondent.

Petitioner contends that even granting that he has co-owners over Lot
7226, he can on his own file the instant case pursuant to Article 487 of the Civil
Code which provides:
ART. 487. Any one of the co-owners may bring an
action in ejectment.

SO ORDERED.[23]
This article covers all kinds of actions for the recovery of
Petitioners motion for reconsideration was denied. Hence, the instant
petition.

possession. Article 487 includes forcible entry and unlawful detainer (accion
interdictal), recovery of possession (accion publiciana), and recovery of ownership
(accion de reivindicacion).[26] A co-owner may bring such an action without the

necessity of joining all the other co-owners as co-plaintiffs because the suit is
presumed to have been filed to benefit his co-owners. It should be stressed,
however, that where the suit is for the benefit of the plaintiff alone who claims to
be the sole owner and entitled to the possession of the litigated property, the
action should be dismissed.[27]

The renowned civilist, Professor Arturo M. Tolentino, explained

A co-owner may bring such an action, without the necessity of
joining all the other co-owners as co-plaintiffs, because the suit is
deemed to be instituted for the benefit of all. If the action is for
the benefit of the plaintiff alone, such that he claims
possession for himself and not for the co-ownership, the
action will not prosper. (Emphasis added)[28]

In Baloloy v. Hular,[29] respondent filed a complaint for quieting of title

owners were aware of the case in the trial court. The trial court
rendered judgment declaring the respondent as the sole owner of
the property and entitled to its possession, to the prejudice of the
latter s siblings. Patently then, the decision of the trial court is
erroneous.
Under Section 7, Rule 3 of the Rules of Court, the
respondent was mandated to implead his siblings, being coowners of the property, as parties. The respondent failed to
comply with the rule. It must, likewise, be stressed that the
Republic of the Philippines is also an indispensable party as
defendant because the respondent sought the nullification of
OCT No. P-16540 which was issued based on Free Patent No.
384019. Unless the State is impleaded as party-defendant, any
decision of the Court would not be binding on it. It has been
held that the absence of an indispensable party in a case renders
ineffective all the proceedings subsequent to the filing of the
complaint including the judgment. The absence of the
respondents siblings, as parties, rendered all proceedings
subsequent to the filing thereof, including the judgment of the
court, ineffective for want of authority to act, not only as to the
absent parties but even as to those present.[30]

claiming exclusive ownership of the property, but the evidence showed that
respondent has co-owners over the property. In dismissing the complaint for want
of respondents authority to file the case, the Court held that
Under Article 487 of the New Civil Code, any of the coowners may bring an action in ejectment. This article covers all
kinds of actions for the recovery of possession, including
an accion publiciana and a reinvidicatory action. A co-owner
may bring such an action without the necessity of joining all the
other co-owners as co-plaintiffs because the suit is deemed to be
instituted for the benefit of all. Any judgment of the court in
favor of the co-owner will benefit the others but if such judgment
is adverse, the same cannot prejudice the rights of the
unimpleaded co-owners. If the action is for the benefit of the
plaintiff alone who claims to be the sole owner and entitled to the
possession thereof, the action will not prosper unless he impleads
the other co-owners who are indispensable parties.
In this case, the respondent alone filed the complaint,
claiming sole ownership over the subject property and praying
that he be declared the sole owner thereof. There is no proof that
the other co-owners had waived their rights over the subject
property or conveyed the same to the respondent or such co-

In the instant case, it is not disputed that petitioner brought the suit for
unlawful detainer in his name alone and for his own benefit to the exclusion of the
heirs of Graciana as he even executed an affidavit of self- adjudication over the
disputed property. It is clear therefore that petitioner cannot validly maintain the
instant action considering that he does not recognize the co-ownership that
necessarily flows from his theory of succession to the property of his father,
Dominador.

In the same vein, there is no merit in petitioners claim that he has the
legal personality to file the present unlawful detainer suit because the ejectment of
respondents would benefit not only him but also his alleged co-owners. However,
petitioner forgets that he filed the instant case to acquire possession of the property
and to recover damages. If granted, he alone will gain possession of the lot and
benefit from the proceeds of the award of damages to the exclusion of the heirs of

plaintiff became the absolute owner, and automatically took

POSSESSION, of the aforementioned house and lot x x
x. (Emphasis added)[37]

Graciana. Hence, petitioner cannot successfully capitalize on the alleged benefit

to his co-owners. Incidentally, it should be pointed out that in default of the said
heirs of Graciana, whom petitioner labeled as fictitious heirs, the State will

Clearly, the said cases find no application here because petitioners action

inherit her share[31] and will thus be petitioners co-owner entitled to possession

operates as a complete repudiation of the existence of co-ownership and not in

and enjoyment of the property.

representation or recognition thereof. Dismissal of the complaint is therefore

The present controversy should be differentiated from the cases where the

proper. As noted by Former Supreme Court Associate Justice Edgrado L. Paras

Court upheld the right of a co-owner to file a suit pursuant to Article 487 of the

[i]t is understood, of course, that the action [under Article 487 of the Civil Code]

Civil Code. In Resuena v. Court of Appeals,

[32]

and Sering v. Plazo,

[33]

the co-

owners who filed the ejectment case did not represent themselves as the exclusive

is being instituted for all.

Hence, if the co-owner expressly states that he is

bringing the case only for himself, the action should not be allowed to prosper.[38]

owner of the property. In Celino v. Heirs of Alejo and Teresa Santiago,[34] the
Indeed, respondents not less than four decade actual physical possession

complaint for quieting of title was brought in behalf of the co-owners precisely to
[35]

[36]

the

of the questioned ancestral house and lot deserves to be respected especially so that

amended complaint specified that the plaintiff is one of the heirs who co-owns the

petitioner failed to show that he has the requisite personality and authority as co-

controverted properties.

owner to file the instant case. Justice dictates that respondents who are now in the

recover lots owned in common.

Similarly in Vencilao v. Camarenta,

twilight years of their life be granted possession of their ancestral property where
In the foregoing cases, the plaintiff never disputed the existence of a coownership nor claimed to be the sole or exclusive owner of the litigated lot. A

their parents and siblings lived during their lifetime, and where they, will probably
spend the remaining days of their life.

favorable decision therein would of course inure to the benefit not only of the
plaintiff but to his co-owners as well. The instant case, however, presents an

WHEREFORE, the petition is DENIED. The September 23, 2003

entirely different backdrop as petitioner vigorously asserted absolute and sole

Decision of the Court of Appeals in CA-G.R. SP No. 74921 which reinstated

ownership of the questioned lot. In his complaint, petitioner made the following

the February 12, 2002 Judgment of the Municipal Trial Court of Minglanilla,

allegations, to wit:

Metro Cebu, dismissing petitioners complaint in Civil Case No. 392, and its
January 8, 2004 Resolution, are AFFIRMED.

3.
The plaintiff was the only son (illegitimate)
and sole heir of the late DOMINADOR ADLAWAN who died
intestate on 28 May 1987 without any other descendant nor
ascendant x x x.
xxxx
5.
Being the only child/descendant and,
therefore, sole heir of the deceased Dominador Adlawan, the

(4)
NIEVES PLASABAS and MARCOS MALAZARTE,

G.R. No. 166519

Petitioners,
Present:

Assailed in this petition for review on certiorari under Rule 45 of the Rules
YNARES-SANTIAGO, J.,
of Court are the May 12, 2004 Decision[1] of the Court of Appeals (CA) in CA- versus -

Chairperson,
CARPIO MORALES,*

G.R. CV No. 43085 and the December 1, 2004 Resolution [2] denying
reconsideration of the challenged decision.

CHICO-NAZARIO,
NACHURA, and
COURT OF APPEALS (Special Former Ninth Division),
DOMINADOR LUMEN, and AURORA AUNZO,

The pertinent facts and proceedings follow.

PERALTA, JJ.

Respondents.
Promulgated:

In 1974, petitioners[3] filed a complaint for recovery of title to property with

damages before the Court of First Instance (now, Regional Trial Court [RTC]) of
Maasin, Southern Leyte against respondents. The case was docketed as Civil Case

March 31, 2009

No. R-1949. The property subject of the case was a parcel of coconut land in
Canturing, Maasin, Southern Leyte, declared under Tax Declaration No. 3587 in
the name of petitioner Nieves with an area of 2.6360 hectares. [4] In their complaint,

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

petitioners prayed that judgment be rendered confirming their rights and legal title
to the subject property and ordering the defendants to vacate the occupied portion
and to pay damages.[5]

DECISION
Respondents, for their part, denied petitioners allegation of ownership and
NACHURA, J.:

possession of the premises, and interposed, as their main defense, that the subject
land was inherited by all the parties from their common ancestor, Francisco
Plasabas.[6]

Revealed in the course of the trial was that petitioner Nieves, contrary to her
allegations in the complaint, was not the sole and absolute owner of the land.
Based on the testimonies of petitioners witnesses, the property passed on from
Francisco to his son, Leoncio; then to Jovita Talam, petitioner Nieves

But, rules are rules. They have to be followed, to arrive

at a fair and just verdict. Section 7, Rule 3 of the Rules of Court
provides:

grandmother; then to Antonina Talam, her mother; and then to her and her
siblingsJose, Victor and Victoria.[7]

After resting their case, respondents raised in their memorandum the

x x x Compulsory joinder of
indispensable parties. Parties in interest
without whom no final determination can be
had of an action shall be joined either as
plaintiffs or defendants.

argument that the case should have been terminated at inception for petitioners
failure to implead indispensable parties, the other co-owners Jose, Victor and
Victoria.

In its April 19, 1993 Order,[8] the trial court, without ruling on the merits,
dismissed the case without prejudice, thus:

This Court, much as it wants to decide the instant case on

the merits, being one of the old inherited cases left behind, finds
difficulty if not impossibility of doing so at this stage of the
proceedings when both parties have already rested their
cases. Reluctantly, it agrees with the defendants in the
observation that some important indispensable consideration is
conspicuously wanting or missing.

It is not the Courts wish to turn its back on the crucial

part of the case, which is the pronouncement of the judgment to
settle the issues raised in the pleadings of the parties once and for
all, after all the time, effort and expense spent in going through
the trial process.

What the Court wants to say here is that the instant case should
have been dismissed without prejudice a long time ago for lack
of cause of action as the plaintiffs spouses Marcos Malazarte and
Nieves Plasabas Malazarte have no complete legal personality to
sue by themselves alone without joining the brothers and sisters
of Nieves who are as INDISPENSABLE as the latter in the final
determination of the case. Not impleading them, any judgment
would have no effectiveness.

They are that indispensable that a final decree would

necessarily affect their rights, so that the Court cannot proceed
without their presence. There are abundant authorities in this
regard. Thus

The general rule with reference to the

making of parties in a civil action requires the
joinder of all indispensable parties under any
and all conditions, their presence being a sine
qua non of the exercise of judicial
power. (Borlasa v. Polistico, 47 Phil. 345,
348) For this reason, our Supreme Court has
held that when it appears of record that there
are other persons interested in the subject

matter of the litigation, who are not made

parties to the action, it is the duty of the court
to suspend the trial until such parties are made
either plaintiffs or defendants. (Pobre, et al. v.
Blanco, 17 Phil. 156). x x x Where the petition
failed to join as party defendant the person
interested in sustaining the proceeding in the
court, the same should be dismissed. x x x
When an indispensable party is not before the
court, the action should be dismissed. (People,
et al. v. Rodriguez, et al., G.R. Nos. L-1405962, September 30, 1959) (sic)

Parties in interest without whom no

final determination can be had of an action
shall be joined either as plaintiffs or
defendants. (Sec. 7, Rule 3, Rules of
Court). The burden of procuring the presence
of all indispensable parties is on the
plaintiff. (39 Amjur [sic] 885). The evident
purpose of the rule is to prevent the
multiplicity of suits by requiring the person
arresting a right against the defendant to
include with him, either as co-plaintiffs or as
co-defendants, all persons standing in the same
position, so that the whole matter in dispute
may be determined once and for all in one
litigation. (Palarca v. Baginsi, 38 Phil. 177,
178).

An indispensable party is a party who

has such an interest in the controversy or
subject matter that a final adjudication cannot
be made, in his absence, without inquiring or
affecting such interest; a party who has not
only an interest of such a nature that a final
decree cannot be made without affecting his

interest or leaving the controversy in such a

condition that its final determination may be
wholly inconsistent with equity and good
conscience. (67 C.J.S. 892). Indispensable
parties are those without whom no action can
be finally determined. (Sanidad v. Cabataje, 5
Phil. 204)

WHEREFORE, IN VIEW OF ALL THE FOREGOING

CONSIDERATIONS, both the complaint and the counterclaim
in the instant case are ordered DISMISSED without prejudice.
No pronouncement as to costs.

SO ORDERED.[9]

Aggrieved, petitioners elevated the case to the CA. In the challenged May
12, 2004 Decision,[10] the appellate court affirmed the ruling of the trial court. The
CA, further, declared that the non-joinder of the indispensable parties would
violate the principle of due process, and that Article 487 of the Civil Code could
not be applied considering that the complaint was not for ejectment, but for
recovery of title or a reivindicatory action.[11]

With their motion for reconsideration denied in the further assailed

December 1, 2004 Resolution, [12] petitioners filed the instant petition.

The Court grants the petition and remands the case to the trial court for
disposition on the merits.

mandatory, because, as mentioned earlier, the suit is deemed to be instituted for the
benefit of all.
Article 487 of the Civil Code provides that any one of the co-owners may
bring an action for ejectment. The article covers all kinds of actions for the
recovery of possession, including an accion publiciana and a reivindicatory
action. A co-owner may file suit without necessarily joining all the other co-owners
as co-plaintiffs because the suit is deemed to be instituted for the benefit of all.
Any judgment of the court in favor of the plaintiff will benefit the other co-owners,
but if the judgment is adverse, the same cannot prejudice the rights of the
unimpleaded co-owners.[13]

In any event, the trial and appellate courts committed reversible error
when they summarily dismissed the case, after both parties had rested their cases
following a protracted trial commencing in 1974, on the sole ground of failure to
implead indispensable parties. The rule is settled that the non-joinder of
indispensable parties is not a ground for the dismissal of an action. The remedy is
to implead the non-party claimed to be indispensable. Parties may be added by
order of the court on motion of the party or on its own initiative at any stage of the

With this disquisition, there is no need to determine whether petitioners

complaint is one for ejectment or for recovery of title. To repeat, Article 487 of the

action and/or at such times as are just. If petitioner refuses to implead an

indispensable party despite the order of the court, the latter may dismiss the
complaint/petition for the plaintiffs/petitioner's failure to comply therewith. [16]

Civil Code applies to both actions.

WHEREFORE, premises considered, the instant petition is GRANTED,

Thus, petitioners, in their complaint, do not have to implead their co-owners
as parties. The only exception to this rule is when the action is for the benefit of the
plaintiff alone who claims to be the sole owner and is, thus, entitled to the

and the case is REMANDED to the trial court for appropriate proceedings. The
trial court is further DIRECTED to decide on the merits of the civil case WITH
DISPATCH.

possession thereof. In such a case, the action will not prosper unless the plaintiff
impleads the other co-owners who are indispensable parties.[14]

Here, the allegation of petitioners in their complaint that they are the sole

(5) [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

owners of the property in litigation is immaterial, considering that they

acknowledged during the trial that the property is co-owned by Nieves and her
siblings, and that petitioners have been authorized by the co-owners to pursue the
case on the latters behalf.[15] Impleading the other co-owners is, therefore, not

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 beP1,000.00 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.

owners of the property. Private respondents responded by filing a complaint as

mentioned at the outset.

The facts that gave rise to the complaint: Juri smis

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.

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 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 dispositive portion of the RTC's Decision reads: lex

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.

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;

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

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

The petition raises a purely legal issue: May a co-owner acquire

exclusive ownership over the property held in common? Esmsc

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.

Essentially, it is the petitioners contention that the property

subject of dispute devolved upon him upon the failure of his coheirs 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.

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 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 coownership. 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

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]

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]

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.

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

EASEMENT

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

RUPERTO RELOVA, Plaintiff-Appellee,

AL., Defendants-Appellants.

(1)

Gabriel

[G.R.

No.

&

L-3623.

November
v.

Borbon,

ELENA

6,

1907.

LAVAREZ,

]
ET

for Appellants.

Julian

Gerona,

for Appellee.

SYLLABUS
1. REALTY; EASEMENTS; WATER RIGHTS BY PRESCRIPTION. The
enjoyment by the plaintiff landowner of an easement for the maintenance of an
irrigation aqueduct and a dam on the lands of the defendants for a period of more
than twenty years confers title thereto upon the plaintiff landowner by prescription
and burdens the lands of the defendants with a corresponding servitude.

DECISION

CARSON, J. :

The plaintiff is the owner of a tract of rice land in the Province of La Laguna,
which is cultivated with the aid of water brought from the River Bangcabangca,
through an aqueduct which passes over the land of the defendants. On the land of
the defendants there was a dam (presa) with a small gate or aperture in its face
which was used to control the flow of the water in the aqueduct, by permitting a
greater or less quantity to escape in a drainage ditch, also on the land of the
defendants. In the month of May, 1905, one of the defendants completely
destroyed the dam and let all the water escape by the drainage ditch, so that none
flowed on the land of the plaintiff. At the time when the dam was destroyed the
plaintiff had some five cavanes of land prepared to plant rice, but because of the
escape of the water resulting from the destruction of the dam he was unable to raise
his
crop,
which
was
a
complete
failure.
Upon these facts found by the trial court, and upon the further fact that the
aqueduct and dam in question had been in use by the plaintiff, as of right, for more
than thirty years, and that he had an easement in the land of the defendants for the
maintenance of the said aqueduct and dam, an injunction was granted to restrain
the defendants from interfering with the plaintiffs right to the use of the water in
the aqueduct, in the manner heretofore established by custom, and damages were
awarded in favor of the plaintiff for the loss occasioned by the failure of his rice
crop.
The defendants and appellants make the following assignment of errors:chanrob1es
virtual
1aw
library
First. The court erred in failing to find from the evidence the classification of the
lands
in
question.
Second. The court erred in failing to find that the land in question was all planted at

the

same

time.

Third. The court erred in finding that the plaintiffs easement for the maintenance
of the dam was damaged by the opening of the drainage ditch in the month of
May.
Fourth. The court erred in finding that there was a servitude for the maintenance of
the dam in question upon the land of the defendants in favor of the land of the
plaintiff.
In support of this assignment of errors counsel for the appellants contends that the
evidence adduced in the trial establishes, first, that the plaintiff is not the owner of
any lands watered by the aqueduct of the class known as padagat (rice lands
planted in May); second, that the plaintiff suffered no damage by the destruction of
the dam, because all the lands of plaintiff which are cultivated with the aid of water
from the aqueduct are of the class known as binanbang (rice lands planted in
August or September), and the destruction of the dam in May and the consequent
failure of water in the aqueduct at that period did not, and could not, damage the
plaintiff or interfere with the proper cultivation of his lands; and, third, that the
evidence of records does not establish the existence of the servitude in the lands of
the defendants in favor of the lands of the plaintiff landowner for the maintenance
of
the
aqueduct
and
dam
in
question.
It will be seen that the first three of the errors assigned are directly to the findings
of fact by the trial court, wherein it is held that the plaintiff is the owner of 5
cavanes of rice land which were prepared for cultivation in May, 1905, and which
where rendered useless by the loss of water resulting from the destruction of the
dam. Upon this point, however, the testimony of the plaintiffs witnesses is
definite, certain, and positive, and we can not say that the findings of the trial court
are contrary to the weight of the evidence. Counsel for the appellants lays great
stress upon the fact that some of the plaintiffs witnesses stated that the lands of the
plaintiff situated near the aqueduct are of the class known as binanbang (rice lands
planted in August or September), while the portion of his lands situated farther
west, watered from the bay and not from the aqueduct, is of the class known as
padagat (rice lands planted in May). These statements, however, appear to be mere
general description of the lands of plaintiff and are in no wise inconsistent with the
positive and definite statements of the witnesses that a portion of the lands of the
plaintiff, watered by the aqueduct, amounting 5 cavanes, was, in fact, prepared by
the plaintiff for cultivation in May; and, unlike the greater part of the land
described in the complaint, is of the class known as padagat and not binanbang.
The fourth assignment of error can not be maintained in the light of the proof of
record that the aqueduct and the dam (presa) have been in existence for more than
thirty years, during which period the owner of the land in question has always
exercised the right to the reasonable use of the water in the aqueduct for irrigation
purposes.
(Arts.
527
and
528,
Civil
Code.)

Counsel for the appellants contend that under the definition of a servitude which
appears in article 530 of the Civil Code the existence of the servitude can not be
established unless it appears that from such servitude a benefit (beneficio) was, or
might be, derived by the plaintiff landowner; and that since it appears from the
testimony of the witnesses that the aperture in the dam was used for the purpose of
controlling the flow of water in the aqueduct and for preventing damage by
overflow to the lowlands over which the aqueduct runs, and since it appears that
the lands of the plaintiff are higher than the lands of the defendants, therefore the
aqueduct could never have been intended for the supply of water to the lands of the
plaintiff and neither the dam nor the aqueduct could be of any benefit to these
lands. This contention can not be maintained in the face of the positive testimony
as to the existence of the aqueduct and its use for many years to supply water to the
lands in question. It may be that the defendants had a right to open the aperture in
the face of the dam to prevent a destructive overflow of water on their lands, but
this would not give them the right to stop the flow of water altogether; nor does it
tend to establish the contention of the defendants that the plaintiff landowner is not
entitled to the benefit of the reasonable use of the water flowing in the aqueduct,
since it does not appear that such use necessarily involved destructive overflows
from the aqueduct, provided the flow of water therein was properly regulated by
the
opening
of
the
aperture
in
the
dam.
The judgment of the trial court authorizing the issue of the writ and awarding
damages in favor of the plaintiff for the losses entailed by the destruction of the
dam is affirmed, with the costs of this instance against the appellants. So ordered.

(2)

[G.R.

No.

L-14116.

January

20,

1961.]

LAUREANA A. CID, Petitioner, v. IRENE P. JAVIER, MANUEL P.

JAVIER, JOSEFINA P. JAVIER, FERNANDO P. JAVIER, JOSE P.
JAVIER, GUILLERMO P. JAVIER, ISIDORA P. JAVIER, BENJAMIN P.
JAVIER,
and
LEONOR
CRISOLOGO, Respondents.
Antonio
Cesar Javier for Respondents.

RESOLUTION

BARRERA, J.:

Raquiza

for Petitioner.

The Decision in this case, promulgated on June 30, 1960, provided, among others,
for the lifting of the preliminary injunction issued by the lower court directed
against petitioners construction of a building allegedly being made in violation of
Municipal Ordinance No. 3, series of 1909 of the municipality of Laoag, and in
disregard
of
respondents
right
to
light
and
view.
In their motion for reconsideration timely presented, respondents claim that the
findings of the lower court, affirmed by the Court of Appeals, that the building
under construction violated the aforementioned ordinance (from which no appeal
was interposed) having become final, justify the issuance of and making permanent
the
injunction
already
issued.
There is no question that respondents house, as well as that of petitioner, are
within their respective properties; that respondents wall stands only 50 centimeters
from the boundary of the 2 lots, whereas, the wall of petitioners building was
constructed 1 meter from the boundary of 1 meter and 50 centimeters from the wall
of the house of respondents. As a result, the lower court found that the eaves of the
two houses overlap each other by 24 centimeters. This, the Court of Appeals
declared to be violative of Ordinance No. 3, series of 1909, amending Sections 1,
5, 6, and 13 of the Municipal Ordinance of June 3, 1903, which requires a distance
of 2 meters, measured from eaves to eaves of adjoining buildings of strong
materials.
It must be noted, however, that the Ordinance in question was adopted since 1909
and was, therefore, already in force at the time the house of respondents was
reconstructed in 1946 after the building originally erected thereon was burned in
1942. If respondents constructed their house at least one meter from the boundary
line, as petitioner has constructed hers, there would be no overlapping of the eaves
and there would not be any violation of the ordinance. As things now stand, in
view of the construction by the respondents, the overlapping of the eaves and the
consequential violation of the ordinance can not entirely be attributed to petitioner,
as to require her alone to make the adjustments necessary for the observance of the
2-meter eaves-to-eaves distance from her neighbors. If any compliance with the
ordinance would be exacted, the adjustments should be made not only by
petitioner, but also by the respondents. There is, therefore, no reason for the
continuation
of
the
injunction.
IN VIEW OF THE FOREGOING, and as the other grounds of respondents motion
for reconsideration had been already duly considered in the Decision, the said
motion is hereby denied, for lack of merit. So ordered.

(3)
[G.R.

No.

97039.

April

24,

1992.]

CONCORDIO ABELLANA, SR., PEDRO E. MENDEZ, VERANO

BADANA, CONCORDIO ABELLANA, JR., TEODOLFO ABELLANA,
MUSSULINI BUCAO, REMEDIOS GARCIANO, ALFREDO SY, JUANITO
JABELLANA, CATALINO LABANDERO, PURISIMO JABELLANA,
ANDRES LASTIMOSA, LUCRESIA VDA. DE BENTE, PAULA VDA. DE
BACUS, ARTURO JABELLANA, FLORENTINO LARIOSA, LEODY DE
LA PEA, PELAGIA JABELLANA, FE GOCELA, SEVERINO
QUINAMADA and NARCISA LASTIMOSA, Petitioners, v. HON. COURT
OF APPEALS, ORLANDO P. NAYA, ROSENDO ESTOYE, JR. and the
MUNICIPAL GOVERNMENT OF TALISAY, CEBU, represented by the
Mayor and MEMBERS OF THE SANGGUNIANG BAYAN, Respondents,
APOLINARIO ENGUIO, RICO VILLARIN, MARIA ROSARIO
BALBUENA, JOSE TIROL, ASUNCION DE LA PEA, ROGELIO B.
GUYOT, LEONIZA FAUSTINO, MAMERTO ZAMORAS, ANTONIO CAL,
VICENTE ALMENDRAS, MICHAEL SERRANO, EDUARDO PADERNOS,
MA. LUZ SANCHEZ, R. CABARERO, OSCAR NAPOLI and ROBERTO
BUENO,
intervenors.
Honorato

Garciano,

PUBLIC USE WHEN DEEMED NECESSARY BY THE PROPER

AUTHORITIES; LIMITATION; CASE AT BAR. The municipal ordinances
which declared subdivision roads open to public use "when deemed necessary by
the proper authorities" simply allow persons other than the residents of the Nonoc
Homes Subdivision, to use the roads therein when they are inside the subdivision
but those ordinances do not give outsiders a right to open the subdivision walls so
they can enter the subdivision from the back. As the private respondents pointed
out in their Comment: "The closure of the dead ends of road lots 1 and 3 a valid
exercise of proprietary rights. It is for the protection of residents in the subdivision
from night prowlers and thieves. And the public is not denied use of the
subdivision roads, only that the users must get inside the subdivision through the
open ends of the road lots that link the same to the public road. It is common to
most, if not all subdivisions in Cebu, Metro Manila and other places, that points of
ingress to and egress from the subdivisions are the points where the subdivision
roads intersect with public roads. It is of judicial notice that most, if not all,
subdivisions are enclosed and fenced with only one or few points that are used as
ingress to and egress from the subdivisions."

DECISION

GRIO-AQUINO, J.:

for Petitioners.

Ferdinand J . Marcos for private respondents Estoye and intervenors.

SYLLABUS

1. CIVIL LAW; PROPERTY; EASEMENTS; RIGHT OF WAY; NOT

ACQUIRABLE BY PRESCRIPTION; REASON THEREFOR. Petitioners
assumption that an easement of right of way is continuous and apparent and may
be acquired by prescription under Article 620 of the Civil Code, is erroneous. The
use of a footpath or road may be apparent but it is not a continuous easement
because its use is at intervals and depends upon the acts of man. It can be exercised
only if a man passes or puts his feet over somebody elses land (4 Maresa 597;
Haffman v. Shoemaker, 71 SE 198, both cited on p. 454, Vol. 2, 6th Ed., Paras,
Civil Code of the Philippines). Hence, a right of way is not acquirable by
prescription (Cuaycong, Et. Al. v. Benedicto, Et Al., 27 Phil. 781; Ronquillo, Et.
Al. v. Roco, Et Al., 103 Phil. 84; Ayala de Roxas v. Case, 8 Phil. 197).
2. ID.; ID.; ID.; ORDINANCE DECLARING SUBDIVISION ROADS OPEN TO

The petitioners who live on a parcel of land abutting the northwestern side of the
Nonoc Homes Subdivision, sued to establish an easement of right of way over a
subdivision road which, according to the petitioners, used to be a mere footpath
which they and their ancestors had been using since time immemorial, and that,
hence, they had acquired, through prescription, an easement of right of way
therein. The construction of a wall by the respondents around the subdivision
deprived the petitioners of the use of the subdivision road which gives the
subdivision residents access to the public highway. They asked that the high
concrete walls enclosing the subdivision and cutting off their access to the
subdivision road be removed and that the road be opened to them.chanrobles
virtual
lawlibrary
The private respondents denied that there was a pre-existing footpath in the place
before it was developed into a subdivision. They alleged furthermore that the
Nonoc Subdivision roads are not the shortest way to a public road for there is a
more direct route from the petitioners land to the public highway.
After
trial,
the
trial
court
follows:jgc:chanrobles.com.ph

rendered

judgment

disposing

as

"WHEREFORE, judgment is hereby rendered, and, accordingly, defendants

Orlando P. Naya and Rosendo Estoye, Jr. and the intervenors are hereby ordered to
demolish the subject fences or enclosures at the dead ends of Road Lots 1 and 3 of
the Nonoc Homes Subdivision at their expense and to leave them open for the use
of the plaintiffs and the general public, within fifteen (15) days from finality of this
judgment. The complaint as against defendant Municipal Government of Talisay,
Cebu is ordered dismissed. All counterclaims are ordered dismissed. No
pronouncement
as
to
costs."
(p.
15,
Rollo.)
However, on appeal by the defendants and intervenors (now private respondents),
the appellate court on October 17, 1990, reversed the appealed judgment. It found
that:jgc:chanrobles.com.ph
"As borne out by the records of the case, the abovementioned requisites essential
for the grant of an easement of right of way are not obtaining in this case hence no
alternative presents itself except reversal of the judgment below . . .
"However, the foregoing is without prejudice to the filing of the appropriate action
by the proper authorities. Records bear that attention of the Municipal Mayor of
Talisay, was already called by the Provincial Fiscal to Opinion No. 172, Series of
1975, of the Department of Justice wherein the Acting Secretary of Justice opined
that road lots in a private subdivision are private property and should be acquired
by the government by donation, purchase or expropriation if they are to be utilized
for a public highway . . .
x

"WHEREFORE, the judgment appealed from is hereby REVERSED and set aside.
The Municipal Government of Talisay, Cebu, at its option, may institute the proper
action
for
expropriation."
(p.
22,
Rollo.)
In an order dated January 9, 1991, the appellate court denied petitioners motion
for reconsideration of the aforesaid decision. Hence, this petition for review in
which the petitioners allege that the Court of Appeals erred:chanrob1es virtual 1aw
library
1. in not holding that the easement claimed by them is a legal easement established
by law (Art. 619, Civil Code) and acquired by them by virtue of a title under Art.
620, Civil Code and P.D. No. 957 through the National Housing Authority which
has exclusive jurisdiction to regulate subdivision and condominium
projects;chanrobles
virtual
lawlibrary
2. in not holding that the footpaths and passageways which were converted into
subdivision road lots have acquired the status of public streets in view of Section 4
of Municipal Ordinance No. 1, Series of 1969 of Talisay, Cebu which provides that
subdivision roads shall be used not only for the exclusive use of the homeowners

but also for the general public, and Section 5 of Ordinance No. 5, Series of 1974,
which provides that "those subdivision road lots whose use by the public are (sic)
deemed necessary by the proper authorities shall be made available for public use"
(p.
7,
Rollo);
and
3. in not determining whether or not the closure of the dead ends of road lots 1 and
3 of the Nonoc Homes Subdivision by the private respondents, Estoye and Naya,
was
legal.
After deliberating on their petition for review of the decision dated October 17,
1990 of the Court of Appeals in CA-G.R. CV No. 19948, and the private
respondents comments, we find that the petition raises merely factual issues which
are not reviewable by this Court under Rule 45 of the Rules of Court, and that, in
any event, no reversible error was committed by the Court of Appeals in
dismissing the complaint on the ground that the requisite conditions do not exist for
the grant of an easement of right of way in favor of the petitioners land under
Articles 649 and 650 of the Civil Code. The appellate court did not err in holding
that the road lots in a private subdivision are private property, hence, the local
government should first acquire them by donation, purchase, or expropriation, if
they
are
to
be
utilized
as
a
public
road.
Petitioners assumption that an easement of right of way is continuous and
apparent and may be acquired by prescription under Article 620 of the Civil Code,
is erroneous. The use of a footpath or road may be apparent but it is not a
continuous easement because its use is at intervals and depends upon the acts of
man. It can be exercised only if a man passes or puts his feet over somebody elses
land (4 Manresa 597; Haffman v. Shoemaker, 71 SE 198, both cited on p. 454, Vol.
2, 6th Ed., Paras, Civil Code of the Philippines). Hence, a right of way is not
acquirable by prescription (Cuaycong, Et. Al. v. Benedicto, Et Al., 37 Phil. 781;
Ronquillo, Et. Al. v. Roco, Et Al., 103 Phil. 84; Ayala de Roxas v. Case, 8 Phil.
197).
Neither may petitioners invoke
provides:jgc:chanrobles.com.ph

Section

29

of

P.D.

957

which

"SECTION 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."cralaw
virtua1aw
library
The above provision applies to the owner or developer of a subdivision (which
petitioners
are
not)
without
access
to
a
public
highway.
The petitioners allegation that the footpaths which were converted to subdivision
roads have acquired the status of public streets, is not well taken. In the first place,

whether or not footpaths previously existed in the area which is now known as the
Nonoc Homes Subdivision, is a factual issue which this Court may not determine
for it is not a trier of facts.chanrobles lawlibrary : rednad
The municipal ordinances which declared subdivision roads open to public use
"when deemed necessary by the proper authorities" (p. 7, Rollo) simply allow
persons other than the residents of the Nonoc Homes Subdivision, to use the roads
therein when they are inside the subdivision but those ordinances do not give
outsiders a right to open the subdivision walls so they can enter the subdivision
from the back. As the private respondents pointed out in their
Comment:jgc:chanrobles.com.ph
"The closure of the dead ends of road lots 1 and 3 is a valid exercise of proprietary
rights. It is for the protection of residents in the subdivision from night prowlers
and thieves. And the public is not denied use of the subdivision roads, only that the
users must get inside the subdivision through the open ends of the road lots that
link the same to the public road. It is common to most, if not all subdivisions in
Cebu, Metro Manila and other places, that points of ingress to and egress from the
subdivisions are the points where the subdivision roads intersect with public roads.
It is of judicial notice that most, if not all, subdivisions are enclosed and fenced
with only one or few points that are used as ingress to and egress from the
subdivisions."
(pp.
54-55,
Rollo.)

NUISANCE, REGISTRY OF PROPERTY, MODES OF ACQUIRING

OWNERSHIP
(1) [G.R. No. L-8191. February 27, 1956.]
DIOSDADO A. SITCHON, ET AL., Petitioners-Appellants, vs. ALEJO
AQUINO, in his capacity as City Engineer of the City of Manila, RespondentAppellee.
[G.R. No. L-8397. February 27, 1956]
RICARDO DE LA CRUZ, ET AL., Petitioners-Appellants, vs. ALEJO
AQUINO, in his capacity as City Engineer of the City of Manila, RespondentAppellee.
[G.R. No. L-8500. February 27, 1956]
FELINO PEA, ET AL., Petitioners-Appellants, vs. ALEJO AQUINO, in his
capacity as City Engineer of the City of Manila, Respondent-Appellee.
[G.R. No. L-8513. February 27, 1956]

WHEREFORE, finding no merit in the petition for review, the same is DENIED
with
costs
against
the
petitioners.
SO ORDERED.

SANTIAGO BROTAMONTE, ET AL., Petitioners-Appellants, vs. ALEJO

AQUINO, in his capacity as City Engineer of the City of Manila, RespondentAppellee.
[G.R. No. L-8516. February 27, 1956]
ERNESTO NAVARRO, ET AL., Petitioners-Appellants, vs. ALEJO AQUINO,
in his capacity as the City Engineer of the City of Manila, RespondentAppellee.
[G.R. No. L-8620. February 27, 1956]
AMADO SAYO, ET AL., Petitioners-Appellants, vs. ALEJO AQUINO, in his
capacity as City Engineer of the City of Manila, Respondent-Appellee.

DECISION
CONCEPCION, J.:
These are six (6) class suits against the City Engineer of Manila to enjoin him from
carrying out his threat to demolish the houses of Petitioners herein, upon the
ground that said houses constitute public nuisances. In due course, the Court of
First Instance of Manila rendered separate, but substantially identical, decisions
adverse to the Petitioners, who have appealed therefrom directly to this Court.
Inasmuch as the fact are not disputed and the same issues have been raised in all

these cases, which were jointly heard before this Court, we deem it fit to dispose of
the appeals in one decision.

said threat, the corresponding petition was filed and a writ of preliminary
injunction secured.

1. Case No. L-8191 (Case No. 21530 of the Court of First Instance of Manila) was
instituted by Diosdado A. Sitchon, Luis Gavino and Ponciano Adoremos, in their
own behalf and in representation of twenty-two (22) persons, named in an annex to
the petition. In 1947 and 1948, said Petitioners occupied portions of the public
street known as Calabash Road, City of Manila, and constructed houses thereon,
without the consent of the authorities. Later on, some of them paid concession
fees or damages, for the use of said portions of the street, to a collector of the city
treasurer,
who
issued
receipts
with
an
annotation
reading:chanroblesvirtuallawlibrary without prejudice to the order to vacate. On
or about July 5, 1952, Respondent City Engineer advised and ordered them to
vacate the place and remove their houses therefrom before August 5, 1952, with
the warning that otherwise he would effect the demolition of said houses at their
expense. This notice having been unheeded, a demolition team of the office of the
City Engineer informed the Petitioners in December, 1953, that their houses would
be removed, whereupon the case was instituted for the purpose already stated. At
the instance of Petitioners herein, the lower court issued a writ of preliminary
injunction.

4. Santiago Brotamonte, Godofredo Blanquiso and Salvador Justiniano

commenced case No. L-8513 (Case No. 21531 of the Court of First Instance of
Manila), on their behalf and in representation of forty-two (42) other persons, who,
without any authority, occupied portions of the bed of a branch of the Estero de
San Miguel, City of Manila, and constructed houses thereon, sometime in 1947 and
1948. As in the cases already mentioned, some of them paid concession fees or
damages, without prejudice to the order to vacate, which was given, with the
usual warning, in December, 1953. The institution of the case and a writ of
preliminary injunction soon followed.

2. Case No. L-8397 (Case No. 21755 of the Court of First Instance of Manila) was
brought by Ricardo de la Cruz, Isidro Perez and Fernando Figuerroa, in their behalf
and in representation of two hundred sixty-seven (267) persons, who, sometime
after the liberation of Manila, occupied portions of Antipolo and Algeciras Streets,
of said city, and constructed houses thereon, without any authority therefor.
Several Petitioners later paid concession fees or damages to a collector of the
city
treasurer,
and
were
given
receipts
with
the
annotation:chanroblesvirtuallawlibrary without prejudice to the order to vacate.
The constructions were such that the roads and drainage on both sides thereof were
obstructed. In some places, the ditches used for drainage purposes were completely
obliterated. What is more, said ditches cannot be opened, repaired or placed in
proper condition because of said houses. On or about May 15,
1952, Respondent City Engineer advised them to vacate the place and remove their
houses within a stated period, with the warning already referred to. Hence, the
institution of the case, upon the filing of which a writ of preliminary injunction was
issued.
3. Felino Pea, Francisco Morales and Jose Villanueva filed case No. L-8500
(Case No. 21535 of the Court of First Instance of Manila), on their own behalf and
in representation of about thirty (30) persons, who, without the aforementioned
authority, occupied portions of the street area of R. Papa Extension, City of Manila,
sometime after its liberation. As in the preceding cases, severalPetitioners paid
concession fees or damages to a collector of the city treasurer, without prejudice
to the order to vacate, which was given on May 10, 1952, with the warning that
should they fail to remove said houses, Respondent would do so, at their expense.
Upon being advised, later on, of the intention of Respondents agents to carry out

5. In case No. L-8516 (Case No. 21580 of the Court of First Instance of Manila),
Ernesto Navarro, Pablo Salas and Herminigildo Digap are Petitioners, on their own
behalf and in that of fifteen (15) persons, who, sometime after the liberation of
Manila, occupied portions of the bed of the Pasig River, at about the end of Rio
Vista Street, San Miguel, Manila, which are covered and uncovered by the tide,
and erected houses there on without any authority therefor. Concession fees or
damages were paid by some of them, without prejudice to the order to vacate.
After giving, on or about June 20, 1952, the corresponding notice and warning,
which were not heeded,Respondent threatened to demolish said houses
at Petitioners expense, whereupon the case was instituted and a writ of
preliminary injunction secured.
6. Case No. L-8620 (Case No. 22143 of the Court of First Instance of Manila) was
filed by Amado Sayo, Marciano Lamco and Victor Bernardo, on their behalf and in
that of twenty-two (22) other persons, who, in 1946 and 1947, occupied portions of
Torres Bugallon, Cavite, Misericordia and Antipolo Streets, in the City of Manila,
and constructed houses thereon, without any authority therefor. Some paid
monthly rentals and/or damages, and/or concession fees from 1946 to 1951,
without prejudice to the order to vacate, which was given on May 1, 1952, with
the usual warning, followed, about two (2) years later, by a threat to demolish said
houses. Hence, the case, upon the filing of which writ of preliminary injunction
was issued.
After appropriate proceedings, the Court of First Instance of Manila rendered
separate decisions, the dispositive part of which, except in case No. L-8620, is of
the following tenor:chanroblesvirtuallawlibrary
Por tanto, el Juzgado sobresee esta causa por falta de meritos y ordena al
ingeniero de la ciudad de Maniia que haga la demolicion o la remocion de las
citadas casas, dentro de quince dias despues de haber avisado al efecto a los aqui
recurrentes, y a costa de los mismos.
In said case No. L-8620, the
follows:chanroblesvirtuallawlibrary

lower

court

In
view
of
the
foregoing
declares:chanroblesvirtuallawlibrary

considerations

rendered
the

judgment
Court

as

hereby

(a) that the houses of all Petitioners in this case erected on the land which forms
part of Torres Bugallon, Cavite, Misericordia and Antipolo Streets constitute
public nuisance as defined by section 1112 of Ordinance No. 1600 of the City of
Manila and by Article 694 paragraphs 4 and 5 of the Civil Code and
(b) that the City Engineer of the City of Manila is the official authorized by
Article 1112 of Ordinance No. 1600 of the City of Manila and Article 699,
paragraph 3 of the Civil Code to abate said public nuisance and charge the
expenses thereof to Petitioners.
Petitioners contend that said decisions should be reversed upon the ground that, in
trying to demolish their respective houses without notice and hearing, the city
engineer sought to deprive them of their property without due process of law, apart
from the fact that, under Articles 701 and 702 of the new Civil Code, the power to
remove public nuisances is vested in the district health officer, not
in Respondent city engineer. It should be noted, however, that, before expressing
his intent to demolish the houses in question, Respondent had advised and ordered
the Petitioners to remove said houses, within the periods stated in the
corresponding notices; chan roblesvirtualawlibrarythat Petitioners do not question,
and have not questioned, the reasonableness or sufficiency of said periods; chan
roblesvirtualawlibraryand that they have never asked Respondent herein to give
them an opportunity to show that their houses do not constitute public nuisances.
Besides, it is not disputed that said houses are standing on public streets, with the
exception of the houses involved in cases Nos. 8513 and 8516, which are built on
portions of river beds. It is clear, therefore, that said houses are public nuisances,
pursuant to Articles 694 and 695 of the Civil Code of the Philippines, which is
Republic Act No. 386, reading:chanroblesvirtuallawlibrary
ART. 694. A nuisance is any act, omission, establishment, business, condition
of property, or anything else which:chanroblesvirtuallawlibrary
(1) Injures or endangers
roblesvirtualawlibraryor

the

health

or

safety

of

others; chan

(2) Annoys or offends the senses; chan roblesvirtualawlibraryor

(3) Shocks,
defies
roblesvirtualawlibraryor

or

disregards

decency

or

morality; chan

(4) Obstructs or interferes with the free passage of any public highway or street,
or any body of water; chan roblesvirtualawlibraryor
(5) Hinders or impairs the use of property.
ART. 695. Nuisance is either public or private. A public nuisance affects a
community or neighborhood or any considerable number of persons, although the
extent of the annoyance, danger or damage upon individuals may be unequal. A
private nuisance is one that is not included in the foregoing definition. (Italics
supplied.)

It is true that Articles 700

provide:chanroblesvirtuallawlibrary

and

702

of

the

same

Code

ART. 700. The district health officer shall take care that one or all of the
remedies against a public nuisance are availed of.
ART. 702. The district health officer shall determine whether or not abatement,
without judicial proceedings, is the best remedy against a public nuisance.
However, section 31 of Republic Act No. 409, the Revised Charter of the City of
Manila, specifically places upon the city engineer the duty, among others, to have
charge of the cralaw care of cralaw streets, canals and esteros cralaw; chan
roblesvirtualawlibraryto prevent the encroachment of private buildings cralaw on
the streets and public places cralaw; chan roblesvirtualawlibraryto have
supervision cralaw of all private docks, wharves, piers cralaw and other property
bordering on the harbor, rivers, esteros and waterways cralaw and cralaw issue
permits for the construction, repair and removal of the same and enforce all
ordinances relating to the same; chan roblesvirtualawlibraryto have the care and
custody of all sources of water supply cralaw; chan roblesvirtualawlibraryto
cause
buildings
dangerous
to
the
public
to
be cralaw; chan
roblesvirtualawlibrarytorn down; chan roblesvirtualawlibraryand to order the
removal of buildings and structures erected in violation of the ordinances cralaw.
Obviously, articles 700 and 702 of Republic Act No. 386, should yield to said
section 31 of Republic Act No. 409, not only because the former preceded the
latter, but, also, because said section 31 of Republic Act No. 409 is a special
provision specifically designed for the City of Manila, whereas said Articles 700
and 702 of the Civil Code are general provisions applicable throughout the
Philippines. Moreover, section 1122 of the Revised Ordinance of the City of
Manila (No. 1600) explicitly authorizes the action sought to be taken
by Respondent herein, by providing:chanroblesvirtuallawlibrary
Whenever the owner or person responsible for any unauthorized obstruction shall,
after official notice from the proper department, refuse or neglect to remove the
same within a reasonable time, such obstruction shall be deemed a public nuisance,
and the city engineer is authorized to remove the same at the owners expense.
Again, houses constructed, without governmental authority, on public streets and
waterways, obstruct at all times the free use by the public of said streets and
waterways, and, accordingly, constitute nuisances per se, aside from public
nuisances. As such, the summary removal thereof, without judicial process or
proceedings may be authorized by the statute or municipal ordinance, despite the
due process clause. (66 C.J.S. 733-734.)
The police power of the state justifies the abatement or destruction, by summary
proceedings, of whatever may be regarded as a public nuisance; chan
roblesvirtualawlibraryand the legislature may authorize the summary abatement of
a nuisance without judicial process or proceeding.
cralaw The remedy of summary abatement for violation of a municipal ordinance
may be used against a public nuisance. (66 C.J.S. 855, 856.)

When necessary to insure the public safety, the legislature may under its police
power authorize municipal authorities summarily to destroy property without legal
process or previous notice to the owner.
cralaw It is not an objection to the validity of a police regulation that it does not
provide for a hearing or for notice to the owner before his property is subjected to
restraint or destruction. (12 Am. Jur. 356, 357.)
In the exercise of the police power the state may authorize its officers summarily
to abate public nuisances without resort to legal proceedings and without notice or
a hearing.
Municipal Corporations generally have power to cause the abatement of public
nuisances summarily without resort to legal proceedings. (39 Am. Jur. 455, 456,
457.)
Being in conformity with the facts and the law, the decisions appealed from are
hereby affirmed in toto, and the writs of preliminary injunction issued by the lower
court dissolved, with costs against Petitioners-Appellants. It is SO ORDERED.
(2) G.R. No. L-1631 February 27, 1948
ABELARDO SUBIDO, Editor, The Manila Post, Petitioner, vs. ROMAN
OZAETA, Secretary of Justice, and MARIANO VILLANUEVA, Register of
Deeds of City of Manila, Respondents.
Abelardo
Subido
in
his
own
behalf.
First Assistant Solicitor General Roberto A. Gianzon and Solicitor Felix V.
Makasiar for respondents.
TUAZON, J.:
This is a petition for mandamus. The petitioner, editor of the Manila Post, a
morning daily, prays that an order issue "commanding the respondents to furnish
(petitioner) the list of real estates sold to aliens and registered with the Register of
Deeds of Manila since the promulgation of the Department of Justice Circular No.
128 or to allow the petitioner or his duly accredited representatives (to) examine all
records in the respondents' custody relative to the (said) transactions."chanrobles
virtual law library
The first alternative of the petition was denied by the Register of Deeds and later,
on appeal, by the Secretary of Justice. No request to inspect the records seems to
have ever been made, but the Solicitor General, answering for the respondents,
gives to understand that not even this would the petitioner or his representatives be
allowed to do if they tried. As the petitioner appears not to insist on his request for
a list of sales of real estate to aliens, we shall confine our discussion to the second
part of the prayer; namely, that the petitioner be allowed to examine all the records

in the respondents' custody to gather the material he wants. In this connection, the
Solicitor General contends that "the examination or inspection of the records in the
office of the register of deeds may be made only by those having special interest
therein and subject to such reasonable regulations as may be prescribed by the
Chief of the Land Registration Office, and that the Secretary of Justice has
reasonably ruled, to safeguard the public interest and the interest of those directly
concerned in the records, that records may not be disclosed for
publication."chanrobles virtual law library
The petition in part is grounded on the liberty of the press. We do not believe that
this constitutional right is in any way involved. The refusal by the respondents does
not constitute a restriction upon or censorship or publication. It only affects
facilities of publication, and the respondents are correct in saying that freedom of
information or freedom to obtain information for publication is not guaranteed by
the constitution.chanroblesvirtualawlibrary chanrobles virtual law library
The case is governed by statute and to a certain degree be general principles of
democratic institutions. It has been expressly stated that the right to examine or
inspect public records is purely a question of statutory construction. (80 A. L. R.,
761 citing cases.)chanrobles virtual law library
The right of inspection of title records is a subject of express statutory regulation in
the Philippines. Section 56 of Act No. 496, as amended by Act No. 3300, provides
that "All records relating to registered lands in the office of the Register of Deeds
shall be open to the public subject to such reasonable regulations as may be
prescribed by the Chief of the General Land Registration Office with the approval
of the Secretary of Justice." The Chief of the General Land Registration Office
does not seem to have adopted any regulations in pursuance of this provision.
Nevertheless, we do not believe this omission relevant. The Register of Deeds has
inherent power to control his office and the records under his custody and has some
discretion to exercise as to the manner in which persons desiring to inspect,
examine, or copy the records may exercise their rights. (45 Am. Jur., 531.) The
question at issue boils down to a determination of the scope of this
discretion.chanroblesvirtualawlibrary chanrobles virtual law library
No one will contest the proposition that the power to regulate is not synonymous
with the power to prohibit. Stated differently, the power to make regulations does
not carry with it the power to prohibit. To the extent that newspapers and others
who have no direct or tangible interest in the records are obstructed from making
an examination thereof, a part, indeed the larger part of the public, is thereby
excluded from the right granted by law. Such prohibition is at was with the
requirement that the books and records of registered lands shall be open to the
public. "Public" is a comprehensive, all-inclusive term. Properly construed, it
embraces every person. To say that only those who have a present and existing
interest of a pecuniary character in the particular information sought are given the
right of inspection is to make an unwarranted distinction. This interpretation is

contrary to the letter of the law and the whole concept and purpose of registration
of recorded titles, which is to serve notice to all who might be affected by the
registries.chanroblesvirtualawlibrary chanrobles virtual law library
From the language of section 56 of Act No. 496, as amended, it is our opinion that
the regulations which the Register of Deeds, or the Chief of the General Land
Registration Office, or the Secretary of Justice is empowered to promulgate are
confined to prescribing the manner and hours of examination to the end that
damage to, or loss of, the records may be avoided, that undue interference with the
duties of the custodian of the books and documents and other employees may be
prevented, that the right of other persons entitled to make inspection may be
insured, and the like. The idea is aptly expressed in People ex rel. Title Guarantee
& T. Co. vs. Railly ([1886], 38 Hun [N. Y.], 429):chanrobles virtual law library
"The subject is necessarily committed, to a great degree, to his (register of deeds')
discretion as to how much of the conveniences of the office are required to be
preserved for the accommodation of these persons. It is not his duty to permit the
office to be thronged needlessly with persons examining its books or papers, but it
is his duty to regulate, govern, and control his office in such a manner as to permit
the statutory advantages to be enjoyed by other persons not employed by him as
largely and extensibly as that consistently can be done ... . What the law expects
and requires from him is the exercise of an unbiased and impartial judgment, by
which all persons resorting to the office, under legal authority, and conducting
themselves in an orderly manner, shall be secured their lawful rights and
privileges, and that a corporation formed in the manner in which the relator has
been, shall be permitted to obtain all the information either by searchers, abstracts,
or copies, that the law has entitled it to obtain."chanrobles virtual law library
Except, perhaps, when it is clear that the purpose of the examination is unlawful, or
sheer, idle curiosity, we do not believe it is the duty under the law of registration
officers to concern themselves with the motives, reasons, and objects of the
persons seeking access to the records. It is not their prerogative to see that the
information which the records contain is not flaunted before public gaze, or that
scandal is not made of it. If it be wrong to publish the contents of the records, it is
the legislature and not the officials having custody thereof which is called upon to
devise a remedy. As to the moral or material injury which the publication might
inflict on other parties, that is the publisher's responsibility and lookout. The
publication
is
made
subject
to
the
consequences
of
the
law.chanroblesvirtualawlibrary chanrobles virtual law library
The respondents have been guided in their action by the rule laid down in the
decision of the Supreme Court of Georgia in Buck vs. Collins ([1874], 51 Ga., 391;
21 Am. Rep., 236), copy of which was furnished the Register of Deeds by the
Secretary of Justice in 1933, evidently in answer to a query covering a situation
similar to the case at bar. As the respondents place much or entire reliance on this

decision, we shall dwell at length on its relevancy in the present

case.chanroblesvirtualawlibrary chanrobles virtual law library
Since, as we have pointed out, the right of inspection is dependent on the
construction to be given the statute in force in the particular jurisdiction, the
decision relied upon can not have any controlling or persuasive effect here unless it
is predicated on a statute like or similar to the Philippine law. It is not. That
decision was inspired largely by common law principles. It is not in harmony with
modern tendencies, and the common law rule has been found to be inapplicable to
the conditions obtaining in the United States and, for that matter, in the Philippines.
The present tendency is to extend the right of inspection of recorded titles to
abstracters, a right denied in Buck vs. Collins. This tendency, according to
American Law Reports (80, p. 760), has even led the courts in some instances to
overrule prior well-recognized decisions, among which are Buck vs. Collins and
Land Title Warranty & S. D. Co. vs. Tanner (1896, 99 Ga., 470; 27 S. E., 727);
while in at least one other instance, a holding by the supreme court that abstracters
were not entitled to have access to public records le to the enactment of a statute by
the legislature expressly conferring such right. (80 A. L. R., 762.) In Atlanta Title
& T. Co. vs. Tidewell Co. ([1931], 173 Ga., 499; 160 S. E., 620), the same court
which announced the doctrine in Buck vs. Collins, while not definitely reversing
that decision says its opinion does not entirely accord with the views expressed
therein. The development of the more modern tendencies is ably explained with a
discussion of the common law rule in Shelby County Co. vs. Memphis Abstract
Co. (1918, 140 Tenn., 74; 203 S. W., 339). The court said:chanrobles virtual law
library
"According to the rules of the common law as administered in England there was
no general or public right of inspection of public records, that right being confined
to those who had a personal interest in the property affected by the records. The
greater portion of the real property in England was held by the nobility and the
aristocracy in large estates, and the system that prevailed looked to the descent of
reality to the oldest son and other heirs, often by entail, and this resulted in few
transfers. In America different ideals have prevailed, and these brought, as a
necessary consequence, a decided change. Small holdings in fee have resulted from
the American concept and principle of equality as heirs, and activity of sales and
freedom of transfer have been encouraged by the policy of our laws. The earlier
common law decisions are, therefore, not applicable to the changed conditions, and
should have little influence in the molding of precedents respecting the right to
inspect and make use of registries of titles. If subsequent purchasers and
encumbrances are to be charged with notice of all that appears of record affecting
the particular real estate, it is but sheer justice that the law should be liberalized so
as not only to extend the right of inspection to members of the public who may be
interested in the title, but so as to expand the opportunity for notice to all who may
be injured should they act or deal without notice. Sound policy would give to the
contents of the registries of deeds, mortgages and liens the widest possible
publicity, and in the form that is most reliable and reassuring. Whatever adds to the

vendibility of real property at its full value augments the wealth of the state. While
the title examiner or abstractor has followed his profession ever since a system of
registration was adopted, there has come in modern times the creation and
development of the abstract company, which in turn has paved the way for and
made possible the title guaranty company. The constantly increasing complication
of land titles, especially in populous estates, has made each of these not only a
utility, but a necessity, as aids in the ascertainement and assurance of rights based
upon titles of reality."chanrobles virtual law library

In addition to his rights as a citizen and an elector, the newspaper proprietor can
demand access to public records on the basis of his special pecuniary interest. The
interest of the newspaper man in public records is the interest of the manufacturer
in his raw materials. By being denied access to the records the newspaper is cut off
from a source of income and profit. That the newspaper's prospective business
from the sale of copies containing information gathered from the records was a
sufficient pecuniary interest to entitle the proprietor or employee to access to the
documents was finally established in two cases.

Independently of statutes the petitioner, as editor of a newspaper, has the requisite

interest in land records even under the common law theory entitling him to the writ
ofmandamus. Newspapers have a better-established right of access to records of
titles by reason of their relations to the public than abstracters or insurers of title.
Whether by design or otherwise, newspapers perform a mission which does not
enter into the calculation of the business of abstracting titles conducted purely for
private gain. Newspapers publish information for the benefit of the public while
abstracters do so for the benefit of a limited class of investors and purchasers of
real estate only. It is through the medium of newspapers that the public is informed
of how public servants conduct their business. The public through newspapers have
the legitimate right to know the transaction in real estate which they believe,
correctly or erroneously, have been registered in violation of the constitution. The
publication of these matters is certainly not only legitimate and lawful but
necessary in a country where, under the constitution, the people should
rule.chanroblesvirtualawlibrary chanrobles virtual law library

Upon the foregoing considerations, mandamus is the appropriate remedy, and the
petition will be granted commanding the respondents to allow the petitioner or his
accredited representatives to examine, extract, abstract or make memoranda of the
records of sales of real properties to aliens subject to such restriction and limitation
as may be deemed necessary not incompatible with his decision, without costs.

In this connection, it will profit us to quote the following passages from The Rights
and Privileges of the Press, Chapter II, by Siebert:

Reynaldo F. Singson for private respondent.

If the Press is to report fully and accurately the affairs of government, it must have
ready access to all relevant sources of information. Public officers, public records,
and public proceedings furnish quantities of such information to the daily
newspaper, whose duty in turn is to pass it on to the reading
public.chanroblesvirtualawlibrary chanrobles virtual law library
The majority rule in the United States is that any member of the public can demand
the right of access to public documents where it can be shown that the public's
interest would be benefited. No special pecuniary interest in the record need be
shown.chanroblesvirtualawlibrary chanrobles virtual law library
This rule does not apply, for reasons of public policy, to demands for access to
certain records such as diplomatic correspondence, police records, records of the
grand jury, and communications by voluntary informers. Also, where examination
has been prompted by a desire for scandalous details, the inspection of court
records
(especially
in
divorce
cases)
has
been
denied.chanroblesvirtualawlibrary chanrobles virtual law library

(3) G.R. No. L-78325 January 25, 1990

DEL
MONTE
CORPORATION
and
PHILIPPINE
PACKING
CORPORATION, petitioners,
vs.
COURT OF APPEALS and SUNSHINE SAUCE MANUFACTURING
INDUSTRIES, respondents.
Bito, Misa & Lozada for petitioners.

CRUZ, J.:
The petitioners are questioning the decision of the respondent court upholding the
dismissal by the trial court of their complaint against the private respondent for
infringement of trademark and unfair competition.
Petitioner Del Monte Corporation is a foreign company organized under the laws
of the United States and not engaged in business in the Philippines. Both the
Philippines and the United States are signatories to the Convention of Paris of
September 27, 1965, which grants to the nationals of the parties rights and
advantages which their own nationals enjoy for the repression of acts of
infringement and unfair competition.
Petitioner Philippine Packing Corporation (Philpack) is a domestic corporation
duly organized under the laws of the Philippines. On April 11, 1969, Del Monte
granted Philpack the right to manufacture, distribute and sell in the Philippines

various agricultural products, including catsup, under the Del Monte trademark and
logo.
On October 27,1965, Del Monte authorized Philpack to register with the Philippine
Patent Office the Del Monte catsup bottle configuration, for which it was granted
Certificate of Trademark Registration No. SR-913 by the Philippine Patent Office
under the Supplemental Register. 1 On November 20, 1972, Del Monte also
obtained two registration certificates for its trademark DEL MONTE and its
logo. 2

or advertising of any goods, business or services on or in connection with which

such use is likely to cause confusion or mistake or to deceive purchasers or others
as to the source or origin of such goods or services or identity of such business; or
reproduce, counterfeit copy or colorably imitate any such mark or trade name and
apply such reproduction, counterfeit copy or colorable imitation to labels, signs,
prints, packages, wrappers, receptacles or advertisements intended to be used upon
or in connection with such goods, business or services, shall be liable to a civil
action by the registrant for any or all of the remedies herein provided.
Sec. 29 of the same law states as follows:

Respondent Sunshine Sauce Manufacturing Industries was issued a Certificate of

Registration by the Bureau of Domestic Trade on April 17,1980, to engage in the
manufacture, packing, distribution and sale of various kinds of sauce, identified by
the logo Sunshine Fruit Catsup. 3 This logo was registered in the Supplemental
Register on September 20, 1983. 4 The product itself was contained in various
kinds of bottles, including the Del Monte bottle, which the private respondent
bought from the junk shops for recycling.
Having received reports that the private respondent was using its exclusively
designed bottles and a logo confusingly similar to Del Montes, Philpack warned it
to desist from doing so on pain of legal action. Thereafter, claiming that the
demand had been ignored, Philpack and Del Monte filed a complaint against the
private respondent for infringement of trademark and unfair competition, with a
prayer for damages and the issuance of a writ of preliminary injunction. 5
In its answer, Sunshine alleged that it had long ceased to use the Del Monte bottle
and that its logo was substantially different from the Del Monte logo and would not
confuse the buying public to the detriment of the petitioners. 6
After trial, the Regional Trial Court of Makati dismissed the complaint. It held that
there were substantial differences between the logos or trademarks of the parties;
that the defendant had ceased using the petitioners bottles; and that in any case the
defendant became the owner of the said bottles upon its purchase thereof from the
junk yards. Furthermore, the complainants had failed to establish the defendants
malice or bad faith, which was an essential element of infringement of trademark
or unfair competition. 7
This decision was affirmed in toto by the respondent court, which is now faulted in
this petition for certiorari under Rule 45 of the Rules of Court.
Section 22 of R.A. No. 166, otherwise known as the Trademark Law, provides in
part as follows:
Sec. 22. Infringement, what constitutes. Any person who shall use, without the
consent of the registrant, any reproduction, counterfeit, copy or colorable imitation
of any registered mark or trade-name in connection with the sale, offering for sale,

Sec. 29. Unfair competition, rights and remedies. A person who has identified
in the mind of the public the goods he manufactures or deals in, his business or
services from those of others, whether or not a mark or tradename is employed, has
a property right in the goodwill of the said goods, business or services so
identified, which will be protected in the same manner as other property rights.
Such a person shall have the remedies provided in section twenty- three, Chapter V
hereof.
Any person who shall employ deception or any other means contrary to good faith
by which he shall pass off the goods manufactured by him or in which he deals, or
his business, or services for those of the one having established such goodwill, or
who shall commit any acts calculated to produce said result, shall be guilty of
unfair competition, and shall be subject to an action therefor.
In particular, and without in any way limiting the scope of unfair competition, the
following shall be deemed guilty of unfair competition:
(a) Any person, who in selling his goods shall give them the general appearance of
goods of another manufacturer or dealer, either as to the goods themselves or in the
wrapping of the packages in which they are contained, or the devices or words
thereon, or in any other feature of their appearance, which would likely influence
purchasers to believe that the goods offered are those of a manufacturer or dealer
other than the actual manufacturer or dealer, or who otherwise clothes the goods
with such appearance as shall deceive the public and defraud another of his
legitimate trade, or any subsequent vendor of such goods or any agent of any
vendor engaged in selling such goods with a like purpose;
(b) Any person who by any artifice, or device, or who employs ally other means
calculated to induce the false belief that such person is offering the services of
another who has identified such services in the mind of the public; or
(c) Any person who shall make any false statement in the course of trade or who
shall commit any other act contrary to good faith of a nature calculated to discredit
the goods, business or services of another.

To arrive at a proper resolution of this case, it is important to bear in mind the

following distinctions between infringement of trademark and unfair competition.

Sunshine: Sunshine fruit catsup is clearly indicated made in the Philippines by

Sunshine Sauce Manufacturing Industries No. 1 Del Monte Avenue, Malabon,
Metro Manila.

(1) Infringement of trademark is the unauthorized use of a trademark, whereas

unfair competition is the passing off of ones goods as those of another.

4. As to color of logo:

(2) In infringement of trademark fraudulent intent is unnecessary whereas in unfair

competition fraudulent intent is essential.

Del Monte: Combination of yellow and dark red, with words Del Monte Quality
in white.

(3) In infringement of trademark the prior registration of the trademark is a

prerequisite to the action, whereas in unfair competition registration is not
necessary. 8

Sunshine: White, light green and light red, with words Sunshine Brand in yellow.

In the challenged decision, the respondent court cited the following test laid down
by this Court in a number of cases:

Del Monte: In the shape of a tomato.

5. As to shape of logo:

Sunshine: Entirely different in shape.

In determining whether two trademarks are confusingly similar, the two marks in
their entirety as they appear in the respective labels must be considered in relation
to the goods to which they are attached; the discerning eye of the observer must
focus not only on the predominant words but also on the other features appearing
on both labels. 9

6. As to label below the cap:

Del Monte: Seal covering the cap down to the neck of the bottle, with picture of
tomatoes with words made from real tomatoes.

and applying the same, held that there was no colorable imitation of the petitioners
trademark and logo by the private respondent. The respondent court agreed with
the findings of the trial court that:

Sunshine: There is a label below the cap which says Sunshine Brand.

In order to resolve the said issue, the Court now attempts to make a comparison of
the two products, to wit:

Del Monte: Darker red.

7. As to the color of the products:

Sunshine: Lighter than Del Monte.

1. As to the shape of label or make:
Del Monte: Semi-rectangular with a crown or tomato shape design on top of the
rectangle.

While the Court does recognize these distinctions, it does not agree with the
conclusion that there was no infringement or unfair competition. It seems to us that
the lower courts have been so pre-occupied with the details that they have not seen
the total picture.

Sunshine: Regular rectangle.

2. As to brand printed on label:
Del Monte: Tomato catsup mark.
Sunshine: Fruit catsup.
3. As to the words or lettering on label or mark:
Del Monte: Clearly indicated words packed by Sysu International, Inc., Q.C.,
Philippines.

It has been correctly held that side-by-side comparison is not the final test of
similarity. 10 Such comparison requires a careful scrutiny to determine in what
points the labels of the products differ, as was done by the trial judge. The ordinary
buyer does not usually make such scrutiny nor does he usually have the time to do
so. The average shopper is usually in a hurry and does not inspect every product on
the shelf as if he were browsing in a library. Where the housewife has to return
home as soon as possible to her baby or the working woman has to make quick
purchases during her off hours, she is apt to be confused by similar labels even if
they do have minute differences. The male shopper is worse as he usually does not
bother about such distinctions.

The question is not whether the two articles are distinguishable by their label when
set side by side but whether the general confusion made by the article upon the eye
of the casual purchaser who is unsuspicious and off his guard, is such as to likely
result in his confounding it with the original. 11 As observed in several cases, the
general impression of the ordinary purchaser, buying under the normally prevalent
conditions in trade and giving the attention such purchasers usually give in buying
that class of goods is the touchstone. 12
It has been held that in making purchases, the consumer must depend upon his
recollection of the appearance of the product which he intends to purchase. 13 The
buyer having in mind the mark/label of the respondent must rely upon his memory
of the petitioners mark. 14 Unlike the judge who has ample time to minutely
examine the labels in question in the comfort of his sala, the ordinary shopper does
not enjoy the same opportunity.
A number of courts have held that to determine whether a trademark has been
infringed, we must consider the mark as a whole and not as dissected. If the buyer
is deceived, it is attributable to the marks as a totality, not usually to any part of
it. 15 The court therefore should be guided by its first impression, 16 for a buyer acts
quickly and is governed by a casual glance, the value of which may be dissipated
as soon as the court assumes to analyze carefully the respective features of the
mark. 17
It has also been held that it is not the function of the court in cases of infringement
and unfair competition to educate purchasers but rather to take their carelessness
for granted, and to be ever conscious of the fact that marks need not be identical. A
confusing similarity will justify the intervention of equity. 18 The judge must also
be aware of the fact that usually a defendant in cases of infringement does not
normally copy but makes only colorable changes. 19 Well has it been said that the
most successful form of copying is to employ enough points of similarity to
confuse the public with enough points of difference to confuse the courts. 20
We also note that the respondent court failed to take into consideration several
factors which should have affected its conclusion, to wit: age, training and
education of the usual purchaser, the nature and cost of the article, whether the
article is bought for immediate consumption and also the conditions under which it
is usually purchased . 21 Among these, what essentially determines the attitude of
the purchaser, specifically his inclination to be cautious, is the cost of the goods.
To be sure, a person who buys a box of candies will not exercise as much care as
one who buys an expensive watch. As a general rule, an ordinary buyer does not
exercise as much prudence in buying an article for which he pays a few centavos as
he does in purchasing a more valuable thing. 22Expensive and valuable items are
normally bought only after deliberate, comparative and analytical investigation.
But mass products, low priced articles in wide use, and matters of everyday
purchase requiring frequent replacement are bought by the casual consumer
without great care. 23 In this latter category is catsup.

At that, even if the labels were analyzed together it is not difficult to see that the
Sunshine label is a colorable imitation of the Del Monte trademark. The
predominant colors used in the Del Monte label are green and red-orange, the same
with Sunshine. The word catsup in both bottles is printed in white and the style
of the print/letter is the same. Although the logo of Sunshine is not a tomato, the
figure nevertheless approximates that of a tomato.
As previously stated, the person who infringes a trade mark does not normally
copy out but only makes colorable changes, employing enough points of similarity
to confuse the public with enough points of differences to confuse the courts. What
is undeniable is the fact that when a manufacturer prepares to package his product,
he has before him a boundless choice of words, phrases, colors and symbols
sufficient to distinguish his product from the others. When as in this case, Sunshine
chose, without a reasonable explanation, to use the same colors and letters as those
used by Del Monte though the field of its selection was so broad, the inevitable
conclusion is that it was done deliberately to deceive . 24
It has been aptly observed that the ultimate ratio in cases of grave doubt is the rule
that as between a newcomer who by the confusion has nothing to lose and
everything to gain and one who by honest dealing has already achieved favor with
the public, any doubt should be resolved against the newcomer inasmuch as the
field from which he can select a desirable trademark to indicate the origin of his
product is obviously a large one. 25
Coming now to the second issue, we find that the private respondent is not guilty
of infringement for having used the Del Monte bottle. The reason is that the
configuration of the said bottle was merely registered in the Supplemental Register.
In the case of Lorenzana v. Macagba, 26 we declared that:
(1) Registration in the Principal Register gives rise to a presumption of the validity
of the registration, the registrants ownership of the mark and his right to the
exclusive use thereof. There is no such presumption in the registration in the
Supplemental Register.
(2) Registration in the Principal Register is limited to the actual owner of the
trademark and proceedings therein on the issue of ownership which may be
contested through opposition or interference proceedings or, after registration, in a
petition for cancellation.
Registration in the Principal Register is constructive notice of the registrants claim
of ownership, while registration in the Supplemental Register is merely proof of
actual use of the trademark and notice that the registrant has used or appropriated
it. It is not subject to opposition although it may be cancelled after the issuance.
Corollarily, registration in the Principal Register is a basis for an action for
infringement while registration in the Supplemental Register is not.

(3) In applications for registration in the Principal Register, publication of the

application is necessary. This is not so in applications for registrations in the
Supplemental Register.
It can be inferred from the foregoing that although Del Monte has actual use of the
bottles configuration, the petitioners cannot claim exclusive use thereof because it
has not been registered in the Principal Register. However, we find that Sunshine,
despite the many choices available to it and notwithstanding that the caution Del
Monte Corporation, Not to be Refilled was embossed on the bottle, still opted to
use the petitioners bottle to market a product which Philpack also produces. This
clearly shows the private respondents bad faith and its intention to capitalize on
the latters reputation and goodwill and pass off its own product as that of Del
Monte.
The Court observes that the reasons given by the respondent court in resolving the
case in favor of Sunshine are untenable. First, it declared that the registration of the
Sunshine label belied the companys malicious intent to imitate petitioners
product. Second, it held that the Sunshine label was not improper because the
Bureau of Patent presumably considered other trademarks before approving it.
Third, it cited the case of Shell Co. v. Insular Petroleum, 27 where this Court
declared that selling oil in containers of another with markings erased, without
intent to deceive, was not unfair competition.
Regarding the fact of registration, it is to be noted that the Sunshine label was
registered not in the Principal Register but only in the Supplemental Register
where the presumption of the validity of the trademark, the registrants ownership
of the mark and his right to its exclusive use are all absent.
Anent the assumption that the Bureau of Patent had considered other existing
patents, it is reiterated that since registration was only in the Supplemental
Register, this did not vest the registrant with the exclusive right to use the label nor
did it give rise to the presumption of the validity of the registration.
On the argument that no unfair competition was committed, the Shell Case is not
on all fours with the case at bar because:
(1) In Shell, the absence of intent to deceive was supported by the fact that the
respondent therein, before marketing its product, totally obliterated and erased the
brands/mark of the different companies stenciled on the containers thereof, except
for a single isolated transaction. The respondent in the present case made no
similar effort.
(2) In Shell, what was involved was a single isolated transaction. Of the many
drums used, there was only one container where the Shell label was not erased,
while in the case at hand, the respondent admitted that it made use of several Del
Monte bottles and without obliterating the embossed warning.

(3) In Shell, the product of respondent was sold to dealers, not to ultimate
consumers. As a general rule, dealers are well acquainted with the manufacturer
from whom they make their purchases and since they are more experienced, they
cannot be so easily deceived like the inexperienced public. There may well be
similarities and imitations which deceive all, but generally the interests of the
dealers are not regarded with the same solicitude as are the interests of the ordinary
consumer. For it is the form in which the wares come to the final buyer that is of
significance. 28
As Sunshines label is an infringement of the Del Montes trademark, law and
equity call for the cancellation of the private respondents registration and
withdrawal of all its products bearing the questioned label from the market. With
regard to the use of Del Montes bottle, the same constitutes unfair competition;
hence, the respondent should be permanently enjoined from the use of such bottles.
The court must rule, however, that the damage prayed for cannot be granted
because the petitioner has not presented evidence to prove the amount thereof.
Section 23 of R.A. No. 166 provides:
Sec. 23. Actions and damages and injunction for infringement. Any person
entitled to the exclusive use of a registered mark or trade name may recover
damages in a civil action from any person who infringes his rights, and the measure
of the damages suffered shall be either the reasonable profit which the complaining
party would have made, had the defendant not infringed his said rights or the profit
which the defendant actually made out of the infringement, or in the event such
measure of damages cannot be readily ascertained with reasonable certainty the
court may award as damages reasonable percentage based upon the amount of
gross sales of the defendant or the value of the services in connection with which
the mark or trade name was used in the infringement of the rights of the
complaining party. In cases where actual intent to mislead the public or to defraud
the complaining party shall be shown, in the discretion of the court, the damages
may be doubled.
The complaining party, upon proper showing may also be granted injunction.
Fortunately for the petitioners, they may still find some small comfort in Art. 2222
of the Civil Code, which provides:
Art. 2222. The court may award nominal damages in every obligation arising from
any source enumerated in Art. 1157, or in every case where any property right has
been invaded.
Accordingly, the Court can only award to the petitioners, as it hereby does award,
nominal damages in the amount of Pl,000.00.

WHEREFORE, the petition is GRANTED. The decision of the Court of Appeals

dated December 24, 1986 and the Resolution dated April 27,1987, are REVERSED
and SET ASIDE and a new judgment is hereby rendered:
(1) Canceling the private respondents Certificate of Register No. SR-6310 and
permanently enjoining the private respondent from using a label similar to that of
the petitioners.
(2) Prohibiting the private respondent from using the empty bottles of the
petitioners as containers for its own products.
(3) Ordering the private respondent to pay the petitioners nominal damages in the
amount of Pl,000.00, and the costs of the suit.
SO ORDERED.

(4) [G.R. No. 148222. August 15, 2003]

PEARL & DEAN (PHIL.), INCORPORATED, petitioner, vs. SHOEMART,

INCORPORATED, and
NORTH
EDSA
MARKETING,INCORPORATED, respondents.
DECISION
CORONA, J.:

Plaintiff-appellant Pearl and Dean (Phil.), Inc. is a corporation engaged in the

manufacture of advertising display units simply referred to as light boxes. These
units utilize specially printed posters sandwiched between plastic sheets and
illuminated with back lights. Pearl and Dean was able to secure a Certificate of
Copyright Registration dated January 20, 1981 over these illuminated display
units. The advertising light boxes were marketed under the trademark Poster
Ads. The application for registration of the trademark was filed with the Bureau
of Patents, Trademarks and Technology Transfer on June 20, 1983, but was
approved only on September 12, 1988, per Registration No. 41165. From 1981 to
about 1988, Pearl and Dean employed the services of Metro Industrial Services to
manufacture its advertising displays.
Sometime in 1985, Pearl and Dean negotiated with defendant-appellant Shoemart,
Inc. (SMI) for the lease and installation of the light boxes in SM City North
Edsa. Since SM City North Edsa was under construction at that time, SMI offered
as an alternative, SM Makati and SM Cubao, to which Pearl and Dean agreed. On
September 11, 1985, Pearl and Deans General Manager, Rodolfo Vergara,
submitted for signature the contracts covering SM Cubao and SM Makati to SMIs
Advertising Promotions and Publicity Division Manager, Ramonlito Abano. Only
the contract for SM Makati, however, was returned signed. On October 4, 1985,
Vergara wrote Abano inquiring about the other contract and reminding him that
their agreement for installation of light boxes was not only for its SM Makati
branch, but also for SM Cubao. SMI did not bother to reply.
Instead, in a letter dated January 14, 1986, SMIs house counsel informed Pearl
and Dean that it was rescinding the contract for SM Makati due to nonperformance of the terms thereof. In his reply dated February 17, 1986, Vergara
protested the unilateral action of SMI, saying it was without basis. In the same
letter, he pushed for the signing of the contract for SM Cubao.

In the instant petition for review on certiorari under Rule 45 of the Rules of
Court, petitioner Pearl & Dean (Phil.) Inc. (P & D) assails the May 22, 2001
decision[1] of the Court of Appeals reversing the October 31, 1996 decision [2] of the
Regional Trial Court of Makati, Branch 133, in Civil Case No. 92-516 which
declared private respondents Shoemart Inc. (SMI) and North Edsa Marketing Inc.
(NEMI) liable for infringement of trademark and copyright, and unfair
competition.

Two years later, Metro Industrial Services, the company formerly contracted by
Pearl and Dean to fabricate its display units, offered to construct light boxes for
Shoemarts chain of stores. SMI approved the proposal and ten (10) light boxes
were subsequently fabricated by Metro Industrial for SMI. After its contract with
Metro Industrial was terminated, SMI engaged the services of EYD Rainbow
Advertising Corporation to make the light boxes. Some 300 units were fabricated
in 1991. These were delivered on a staggered basis and installed at SM Megamall
and SM City.

FACTUAL ANTECEDENTS

Sometime in 1989, Pearl and Dean, received reports that exact copies of its light
boxes were installed at SM City and in the fastfood section of SM Cubao. Upon
investigation, Pearl and Dean found out that aside from the two (2) reported SM
branches, light boxes similar to those it manufactures were also installed in two (2)
other SM stores. It further discovered that defendant-appellant North Edsa
Marketing Inc. (NEMI), through its marketing arm, Prime Spots Marketing
Services, was set up primarily to sell advertising space in lighted display units

The May 22, 2001 decision of the Court of Appeals[3] contained a summary of
this dispute:

located in SMIs different branches. Pearl and Dean noted that NEMI is a sister
company of SMI.
In the light of its discoveries, Pearl and Dean sent a letter dated December 11, 1991
to both SMI and NEMI enjoining them to cease using the subject light boxes and to
remove the same from SMIs establishments. It also demanded the discontinued
use of the trademark Poster Ads, and the payment to Pearl and Dean of
compensatory damages in the amount of Twenty Million Pesos (P20,000,000.00).
Upon receipt of the demand letter, SMI suspended the leasing of two hundred
twenty-four (224) light boxes and NEMI took down its advertisements for Poster
Ads from the lighted display units in SMIs stores. Claiming that both SMI and
NEMI failed to meet all its demands, Pearl and Dean filed this instant case for
infringement of trademark and copyright, unfair competition and damages.
In denying the charges hurled against it, SMI maintained that it independently
developed its poster panels using commonly known techniques and available
technology, without notice of or reference to Pearl and Deans copyright. SMI
noted that the registration of the mark Poster Ads was only for stationeries such
as letterheads, envelopes, and the like. Besides, according to SMI, the word
Poster Ads is a generic term which cannot be appropriated as a trademark, and,
as such, registration of such mark is invalid. It also stressed that Pearl and Dean is
not entitled to the reliefs prayed for in its complaint since its advertising display
units contained no copyright notice, in violation of Section 27 of P.D. 49. SMI
alleged that Pearl and Dean had no cause of action against it and that the suit was
purely intended to malign SMIs good name. On this basis, SMI, aside from
praying for the dismissal of the case, also counterclaimed for moral, actual and
exemplary damages and for the cancellation of Pearl and Deans Certification of
Copyright Registration No. PD-R-2558 dated January 20, 1981 and Certificate of
Trademark Registration No. 4165 dated September 12, 1988.

(a)

actual damages -

P16,600,000.00,
representing profits
derived by defendants
as a result of infringement of plaintiffs copyright
from 1991 to 1992

(b)

moral damages

(c)

exemplary damages - P1,000,000.00

(d)

attorneys fees
plus

(e)

costs of suit;

- P1,000.000.00

- P1,000,000.00

(2)

to deliver, under oath, for impounding in the National Library, all

light boxes of SMI which were fabricated by Metro Industrial
Services and EYD Rainbow Advertising Corporation;

(3)

to deliver, under oath, to the National Library, all filler-posters

using the trademark Poster Ads, for destruction; and

(4)

to permanently refrain from infringing the copyright on plaintiffs

light boxes and its trademark Poster Ads.

Defendants counterclaims are hereby ordered dismissed for lack of

merit.
SO ORDERED.[4]

NEMI, for its part, denied having manufactured, installed or used any advertising
display units, nor having engaged in the business of advertising. It repleaded
SMIs averments, admissions and denials and prayed for similar reliefs and
counterclaims as SMI.
The RTC of Makati City decided in favor of P & D:
Wherefore, defendants SMI and NEMI are found jointly and severally liable for
infringement of copyright under Section 2 of PD 49, as amended, and infringement
of trademark under Section 22 of RA No. 166, as amended, and are hereby
penalized under Section 28 of PD 49, as amended, and Sections 23 and 24 of RA
166, as amended. Accordingly, defendants are hereby directed:
(1)

to pay plaintiff the following damages:

On appeal, however, the Court of Appeals reversed the trial court:

Since the light boxes cannot, by any stretch of the imagination, be considered as
either prints, pictorial illustrations, advertising copies, labels, tags or box wraps, to
be properly classified as a copyrightable class O work, we have to agree with
SMI when it posited that what was copyrighted were the technical drawings only,
and not the light boxes themselves, thus:
42. When a drawing is technical and depicts a utilitarian object, a copyright over
the drawings like plaintiff-appellants will not extend to the actual object. It has so
been held under jurisprudence, of which the leading case is Baker vs. Selden (101
U.S. 841 (1879). In that case, Selden had obtained a copyright protection for a
book entitled Seldens Condensed Ledger or Bookkeeping Simplified which

purported to explain a new system of bookkeeping. Included as part of the book

were blank forms and illustrations consisting of ruled lines and headings, specially
designed for use in connection with the system explained in the work. These forms
showed the entire operation of a day or a week or a month on a single page, or on
two pages following each other. The defendant Baker then produced forms which
were similar to the forms illustrated in Seldens copyrighted books. The Court
held that exclusivity to the actual forms is not extended by a copyright. The reason
was that to grant a monopoly in the underlying art when no examination of its
novelty has ever been made would be a surprise and a fraud upon the public; that is
the province of letters patent, not of copyright. And that is precisely the point. No
doubt aware that its alleged original design would never pass the rigorous
examination of a patent application, plaintiff-appellant fought to foist a fraudulent
monopoly on the public by conveniently resorting to a copyright registration which
merely employs a recordal system without the benefit of an in-depth examination
of novelty.
The principle in Baker vs. Selden was likewise applied in Muller vs. Triborough
Bridge Authority [43 F. Supp. 298 (S.D.N.Y. 1942)]. In this case, Muller had
obtained a copyright over an unpublished drawing entitled Bridge Approach the
drawing showed a novel bridge approach to unsnarl traffic congestion. The
defendant constructed a bridge approach which was alleged to be an infringement
of the new design illustrated in plaintiffs drawings. In this case it was held that
protection of the drawing does not extend to the unauthorized duplication of the
object drawn because copyright extends only to the description or expression of the
object and not to the object itself. It does not prevent one from using the drawings
to construct the object portrayed in the drawing.
In two other cases, Imperial Homes Corp. v. Lamont, 458 F. 2d 895 and Scholtz
Homes, Inc. v. Maddox, 379 F. 2d 84, it was held that there is no copyright
infringement when one who, without being authorized, uses a copyrighted
architectural plan to construct a structure. This is because the copyright does not
extend to the structures themselves.
In fine, we cannot find SMI liable for infringing Pearl and Deans copyright over
the technical drawings of the latters advertising display units.
xxx

xxx

xxx

The Supreme Court trenchantly held in Faberge, Incorporated vs. Intermediate

Appellate Court that the protective mantle of the Trademark Law extends only to
the goods used by the first user as specified in the certificate of registration,
following the clear mandate conveyed by Section 20 of Republic Act 166, as
amended, otherwise known as the Trademark Law, which reads:

SEC. 20. Certification of registration prima facie evidence of validity.- A

certificate of registration of a mark or trade-name shall be prima facie evidence of
the validity of the registration, the registrants ownership of the mark or tradename, and of the registrants exclusive right to use the same in connection with the
goods, business or services specified in the certificate, subject to any conditions
and limitations stated therein. (underscoring supplied)
The records show that on June 20, 1983, Pearl and Dean applied for the registration
of the trademark Poster Ads with the Bureau of Patents, Trademarks, and
Technology Transfer. Said trademark was recorded in the Principal Register on
September 12, 1988 under Registration No. 41165 covering the following
products: stationeries such as letterheads, envelopes and calling cards and
newsletters.
With this as factual backdrop, we see no legal basis to the finding of liability on the
part of the defendants-appellants for their use of the words Poster Ads, in the
advertising display units in suit. Jurisprudence has interpreted Section 20 of the
Trademark Law as an implicit permission to a manufacturer to venture into the
production of goods and allow that producer to appropriate the brand name of the
senior registrant on goods other than those stated in the certificate of
registration. The Supreme Court further emphasized the restrictive meaning of
Section 20 when it stated, through Justice Conrado V. Sanchez, that:
Really, if the certificate of registration were to be deemed as including goods not
specified therein, then a situation may arise whereby an applicant may be tempted
to register a trademark on any and all goods which his mind may conceive even if
he had never intended to use the trademark for the said goods. We believe that
such omnibus registration is not contemplated by our Trademark Law.
While we do not discount the striking similarity between Pearl and Deans
registered trademark and defendants-appellants Poster Ads design, as well as the
parallel use by which said words were used in the parties respective advertising
copies, we cannot find defendants-appellants liable for infringement of trademark.
Poster Ads was registered by Pearl and Dean for specific use in its stationeries,
in contrast to defendants-appellants who used the same words in their advertising
display units. Why Pearl and Dean limited the use of its trademark to stationeries
is simply beyond us. But, having already done so, it must stand by the
consequence of the registration which it had caused.
xxx

xxx

xxx

We are constrained to adopt the view of defendants-appellants that the words

Poster Ads are a simple contraction of the generic term poster advertising. In the
absence of any convincing proof that Poster Ads has acquired a secondary
meaning in this jurisdiction, we find that Pearl and Deans exclusive right to the

use of Poster Ads is limited to what is written in its certificate of registration,

namely, stationeries.
Defendants-appellants cannot thus be held liable for infringement of the trademark
Poster Ads.

In resolving this very interesting case, we are challenged once again to put
into proper perspective four main concerns of intellectual property law patents,
copyrights, trademarks and unfair competition arising from infringement of any of
the first three. We shall focus then on the following issues:
(1) if the engineering or technical drawings of an advertising display
unit (light box) are granted copyright protection (copyright certificate of
registration) by the National Library, is the light box depicted in such
engineering drawings ipso facto also protected by such copyright?

There being no finding of either copyright or trademark infringement on the part of

SMI and NEMI, the monetary award granted by the lower court to Pearl and Dean
has no leg to stand on.
xxx

xxx

(2) or should the light box be registered separately and protected by a

patent issued by the Bureau of Patents Trademarks and Technology
Transfer (now Intellectual Property Office) in addition to the
copyright of the engineering drawings?

xxx

WHEREFORE, premises considered, the assailed decision is REVERSED and

SET ASIDE, and another is rendered DISMISSING the complaint and
counterclaims in the above-entitled case for lack of merit.[5]

(3) can the owner of a registered trademark legally prevent others from
using such trademark if it is a mere abbreviation of a term descriptive of
his goods, services or business?

Dissatisfied with the above decision, petitioner P & D filed the instant
petition assigning the following errors for the Courts consideration:
A.

THE HONORABLE COURT OF APPEALS ERRED IN

RULING THAT NO COPYRIGHT INFRINGEMENT WAS
COMMITTED BY RESPONDENTS SM AND NEMI;

B.

THE HONORABLE COURT OF APPEALS ERRED IN

RULING THAT NO INFRINGEMENT OF PEARL & DEANS
TRADEMARK POSTER ADS WAS COMMITTED BY
RESPONDENTS SM AND NEMI;

C.

THE HONORABLE COURT OF APPEALS ERRED IN

DISMISSING THE AWARD OF THE TRIAL COURT,
DESPITE THE LATTERS FINDING, NOT DISPUTED BY
THE HONORABLE COURT OF APPEALS, THAT SM WAS
GUILTY OF BAD FAITH IN ITS NEGOTIATION OF
ADVERTISING CONTRACTS WITH PEARL & DEAN.

D.

THE HONORABLE COURT OF APPEALS ERRED IN NOT

HOLDING RESPONDENTS SM AND NEMI LIABLE TO
PEARL & DEAN FOR ACTUAL, MORAL & EXEMPLARY
DAMAGES, ATTORNEYS FEES AND COSTS OF SUIT.[6]

ON THE ISSUE OF COPYRIGHT INFRINGEMENT

Petitioner P & Ds complaint was that SMI infringed on its copyright over the
light boxes when SMI had the units manufactured by Metro and EYD Rainbow
Advertising for its own account. Obviously, petitioners position was premised on
its belief that its copyright over the engineering drawings extendedipso facto to the
light boxes depicted or illustrated in said drawings. In ruling that there was no
copyright infringement, the Court of Appeals held that the copyright was limited to
the drawings alone and not to the light box itself. We agree with the appellate
court.
First, petitioners application for a copyright certificate as well as
Copyright Certificate No. PD-R2588 issued by the National Library on January 20,
1981 clearly stated that it was for a class O work under Section 2 (O) of PD
49 (The Intellectual Property Decree) which was the statute then prevailing. Said
Section 2 expressly enumerated the works subject to copyright:
SEC. 2. The rights granted by this Decree shall, from the moment of creation,
subsist with respect to any of the following works:
xxxxxx

xxx

ISSUES
(O) Prints, pictorial illustrations, advertising copies, labels, tags, and box wraps;

xxxxxx

xxx

Although petitioners copyright certificate was entitled Advertising Display

Units (which depicted the box-type electrical devices), its claim of copyright
infringement cannot be sustained.
Copyright, in the strict sense of the term, is purely a statutory right. Being a
mere statutory grant, the rights are limited to what the statute confers. It may be
obtained and enjoyed only with respect to the subjects and by the persons, and on
terms and conditions specified in the statute.[7] Accordingly, it can cover only the
works falling within the statutory enumeration or description. [8]
P & D secured its copyright under the classification class O work. This
being so, petitioners copyright protection extended only to the technical drawings
and not to the light box itself because the latter was not at all in the category of
prints, pictorial illustrations, advertising copies, labels, tags and box
wraps. Stated otherwise, even as we find that P & D indeed owned a valid
copyright, the same could have referred only to the technical drawings within the
category of pictorial illustrations. It could not have possibly stretched out to
include the underlying light box. The strict application[9] of the laws enumeration
in Section 2 prevents us from giving petitioner even a little leeway, that is, even if
its copyright certificate was entitled Advertising Display Units. What the law
does not include, it excludes, and for the good reason: the light box was not a
literary or artistic piece which could be copyrighted under the copyright law. And
no less clearly, neither could the lack of statutory authority to make the light box
copyrightable be remedied by the simplistic act of entitling the copyright certificate
issued by the National Library as Advertising Display Units.
In fine, if SMI and NEMI reprinted P & Ds technical drawings for sale to the
public without license from P & D, then no doubt they would have been guilty of
copyright infringement. But this was not the case. SMIs and NEMIs acts
complained of by P & D were to have units similar or identical to the light box
illustrated in the technical drawings manufactured by Metro and EYD Rainbow
Advertising, for leasing out to different advertisers. Was this an infringement of
petitioners copyright over the technical drawings? We do not think so.
During the trial, the president of P & D himself admitted that the light box
was neither a literary not an artistic work but an engineering or marketing
invention.[10] Obviously, there appeared to be some confusion regarding what
ought or ought not to be the proper subjects of copyrights, patents and
trademarks. In the leading case of Kho vs. Court of Appeals,[11] we ruled that these
three legal rights are completely distinct and separate from one another, and the
protection afforded by one cannot be used interchangeably to cover items or works
that exclusively pertain to the others:
Trademark, copyright and patents are different intellectual property rights that
cannot be interchanged with one another. A trademark is any visible sign capable
of distinguishing the goods (trademark) or services (service mark) of an enterprise

and shall include a stamped or marked container of goods. In relation thereto, a

trade name means the name or designation identifying or distinguishing an
enterprise. Meanwhile, the scope of a copyright is confined to literary and artistic
works which are original intellectual creations in the literary and artistic domain
protected from the moment of their creation. Patentable inventions, on the other
hand, refer to any technical solution of a problem in any field of human
activity which is new, involves an inventive step and is industrially applicable.

ON THE ISSUE OF PATENT INFRINGEMENT

This brings us to the next point: if, despite its manufacture and commercial
use of the light boxes without license from petitioner, private respondents cannot
be held legally liable for infringement of P & Ds copyright over its technical
drawings of the said light boxes, should they be liable instead for infringement of
patent? We do not think so either.
For some reason or another, petitioner never secured a patent for the light
boxes. It therefore acquired no patent rights which could have protected its
invention, if in fact it really was. And because it had no patent, petitioner could not
legally prevent anyone from manufacturing or commercially using the
contraption. In Creser Precision Systems, Inc. vs. Court of Appeals,[12] we held
that there can be no infringement of a patent until a patent has been issued, since
whatever right one has to the invention covered by the patent arises alone from the
grant of patent. x x x (A)n inventor has no common law right to a monopoly of his
invention. He has the right to make use of and vend his invention, but if he
voluntarily discloses it, such as by offering it for sale, the world is free to copy and
use it with impunity. A patent, however, gives the inventor the right to exclude all
others. As a patentee, he has the exclusive right of making, selling or using the
invention.[13] On the assumption that petitioners advertising units were patentable
inventions, petitioner revealed them fully to the public by submitting the
engineering drawings thereof to the National Library.
To be able to effectively and legally preclude others from copying and
profiting from the invention, a patent is a primordial requirement. No patent, no
protection. The ultimate goal of a patent system is to bring new designs and
technologies into the public domain through disclosure. [14] Ideas, once disclosed to
the public without the protection of a valid patent, are subject to appropriation
without significant restraint.[15]
On one side of the coin is the public which will benefit from new ideas; on
the other are the inventors who must be protected. As held in Bauer & Cie vs.
ODonnel,[16] The act secured to the inventor the exclusive right to make use, and
vend the thing patented, and consequently to prevent others from exercising like
privileges without the consent of the patentee. It was passed for the purpose of
encouraging useful invention and promoting new and useful inventions by the

protection and stimulation given to inventive genius, and was intended to secure to
the public, after the lapse of the exclusive privileges granted the benefit of such
inventions and improvements.
The law attempts to strike an ideal balance between the two interests:
(The p)atent system thus embodies a carefully crafted bargain for encouraging the
creation and disclosure of new useful and non-obvious advances in technology and
design, in return for the exclusive right to practice the invention for a number of
years. The inventor may keep his invention secret and reap its fruits
indefinitely. In consideration of its disclosure and the consequent benefit to the
community, the patent is granted. An exclusive enjoyment is guaranteed him for
17 years, but upon the expiration of that period, the knowledge of the invention
inures to the people, who are thus enabled to practice it and profit by its use. [17]
The patent law has a three-fold purpose: first, patent law seeks to foster and
reward invention; second, it promotes disclosures of inventions to stimulate further
innovation and to permit the public to practice the invention once the patent
expires; third, the stringent requirements for patent protection seek to ensure that
ideas in the public domain remain there for the free use of the public. [18]
It is only after an exhaustive examination by the patent office that a patent is
issued. Such an in-depth investigation is required because in rewarding a useful
invention, the rights and welfare of the community must be fairly dealt with and
effectively guarded. To that end, the prerequisites to obtaining a patent are strictly
observed and when a patent is issued, the limitations on its exercise are equally
strictly enforced. To begin with, a genuine invention or discovery must be
demonstrated lest in the constant demand for new appliances, the heavy hand of
tribute be laid on each slight technological advance in art.[19]
There is no such scrutiny in the case of copyrights nor any notice published
before its grant to the effect that a person is claiming the creation of a work. The
law confers the copyright from the moment of creation[20] and the copyright
certificate is issued upon registration with the National Library of a sworn exparte claim of creation.
Therefore, not having gone through the arduous examination for patents, the
petitioner cannot exclude others from the manufacture, sale or commercial use of
the light boxes on the sole basis of its copyright certificate over the technical
drawings.
Stated otherwise, what petitioner seeks is exclusivity without any opportunity
for the patent office (IPO) to scrutinize the light boxs eligibility as a patentable
invention. The irony here is that, had petitioner secured a patent instead, its
exclusivity would have been for 17 years only. But through the simplified
procedure of copyright-registration with the National Library without
undergoing the rigor of defending the patentability of its invention before the IPO

and the public the petitioner would be protected for 50 years. This situation
could not have been the intention of the law.
In the oft-cited case of Baker vs. Selden[21], the United States Supreme Court
held that only the expression of an idea is protected by copyright, not the idea
itself. In that case, the plaintiff held the copyright of a book which expounded on a
new accounting system he had developed. The publication illustrated blank forms
of ledgers utilized in such a system. The defendant reproduced forms similar to
those illustrated in the plaintiffs copyrighted book. The US Supreme Court ruled
that:
There is no doubt that a work on the subject of book-keeping, though only
explanatory of well known systems, may be the subject of a copyright; but, then, it
is claimed only as a book. x x x. But there is a clear distinction between the books,
as such, and the art, which it is, intended to illustrate. The mere statement of the
proposition is so evident that it requires hardly any argument to support it. The
same distinction may be predicated of every other art as well as that of
bookkeeping. A treatise on the composition and use of medicines, be they old or
new; on the construction and use of ploughs or watches or churns; or on the
mixture and application of colors for painting or dyeing; or on the mode of drawing
lines to produce the effect of perspective, would be the subject of copyright; but no
one would contend that the copyright of the treatise would give the exclusive right
to the art or manufacture described therein. The copyright of the book, if not
pirated from other works, would be valid without regard to the novelty or want of
novelty of its subject matter. The novelty of the art or thing described or explained
has nothing to do with the validity of the copyright. To give to the author of the
book an exclusive property in the art described therein, when no examination
of its novelty has ever been officially made, would be a surprise and a fraud
upon the public. That is the province of letters patent, not of copyright. The
claim to an invention of discovery of an art or manufacture must be subjected
to the examination of the Patent Office before an exclusive right therein can
be obtained; and a patent from the government can only secure it.
The difference between the two things, letters patent and copyright, may be
illustrated by reference to the subjects just enumerated. Take the case of
medicines. Certain mixtures are found to be of great value in the healing art. If
the discoverer writes and publishes a book on the subject (as regular
physicians generally do), he gains no exclusive right to the manufacture and
sale of the medicine; he gives that to the public. If he desires to acquire such
exclusive right, he must obtain a patent for the mixture as a new art,
manufacture or composition of matter. He may copyright his book, if he
pleases; but that only secures to him the exclusive right of printing and
publishing his book. So of all other inventions or discoveries.
The copyright of a book on perspective, no matter how many drawings and
illustrations it may contain, gives no exclusive right to the modes of drawing

described, though they may never have been known or used before. By publishing
the book without getting a patent for the art, the latter is given to the public.

goods does not prevent the adoption and use of the same trademark by others for
products which are of a different description.[24]Faberge, Inc. was correct and was
in fact recently reiterated in Canon Kabushiki Kaisha vs. Court of Appeals.[25]

x x x

Assuming arguendo that Poster Ads could validly qualify as a trademark,

the failure of P & D to secure a trademark registration for specific use on the light
boxes meant that there could not have been any trademark infringement since
registration was an essential element thereof.

Now, whilst no one has a right to print or publish his book, or any material part
thereof, as a book intended to convey instruction in the art, any person may
practice and use the art itself which he has described and illustrated therein. The
use of the art is a totally different thing from a publication of the book
explaining it. The copyright of a book on bookkeeping cannot secure the
exclusive right to make, sell and use account books prepared upon the plan set
forth in such book. Whether the art might or might not have been patented, is a
question, which is not before us. It was not patented, and is open and free to the
use of the public. And, of course, in using the art, the ruled lines and headings of
accounts must necessarily be used as incident to it.
The plausibility of the claim put forward by the complainant in this case arises
from a confusion of ideas produced by the peculiar nature of the art described in
the books, which have been made the subject of copyright. In describing the art,
the illustrations and diagrams employed happened to correspond more closely than
usual with the actual work performed by the operator who uses the art. x x x The
description of the art in a book, though entitled to the benefit of copyright,
lays no foundation for an exclusive claim to the art itself. The object of the
one is explanation; the object of the other is use. The former may be secured
by copyright. The latter can only be secured, if it can be secured at all, by
letters patent. (underscoring supplied)

ON THE ISSUE OF TRADEMARK INFRINGEMENT

This issue concerns the use by respondents of the mark Poster Ads which
petitioners president said was a contraction of poster advertising. P & D was
able to secure a trademark certificate for it, but one where the goods specified were
stationeries
such
as
letterheads,
envelopes,
calling
cards
and
newsletters.[22] Petitioner admitted it did not commercially engage in or market
these goods. On the contrary, it dealt in electrically operated backlit advertising
units and the sale of advertising spaces thereon, which, however, were not at all
specified in the trademark certificate.
Under the circumstances, the Court of Appeals correctly cited Faberge Inc.
vs. Intermediate Appellate Court,[23] where we, invoking Section 20 of the old
Trademark Law, ruled that the certificate of registration issued by the Director of
Patents can confer (upon petitioner) the exclusive right to use its own symbol only
to those goods specified in the certificate, subject to any conditions and limitations
specified in the certificate x x x. One who has adopted and used a trademark on his

ON THE ISSUE OF UNFAIR COMPETITION

If at all, the cause of action should have been for unfair competition, a
situation which was possible even if P & D had no registration. [26] However, while
the petitioners complaint in the RTC also cited unfair competition, the trial court
did not find private respondents liable therefor. Petitioner did not appeal this
particular point; hence, it cannot now revive its claim of unfair competition.
But even disregarding procedural issues, we nevertheless cannot hold
respondents guilty of unfair competition.
By the nature of things, there can be no unfair competition under the law on
copyrights although it is applicable to disputes over the use of trademarks. Even a
name or phrase incapable of appropriation as a trademark or tradename may, by
long and exclusive use by a business (such that the name or phrase becomes
associated with the business or product in the mind of the purchasing public), be
entitled to protection against unfair competition.[27] In this case, there was no
evidence that P & Ds use of Poster Ads was distinctive or well-known. As noted
by the Court of Appeals, petitioners expert witnesses himself had testified that
Poster Ads was too generic a name. So it was difficult to identify it with any
company, honestly speaking.[28] This crucial admission by its own expert witness
that Poster Ads could not be associated with P & D showed that, in the mind of
the public, the goods and services carrying the trademark Poster Ads could not
be distinguished from the goods and services of other entities.
This fact also prevented the application of the doctrine of secondary meaning.
Poster Ads was generic and incapable of being used as a trademark because it
was used in the field of poster advertising, the very business engaged in by
petitioner. Secondary meaning means that a word or phrase originally incapable
of exclusive appropriation with reference to an article in the market (because it is
geographically or otherwise descriptive) might nevertheless have been used for so
long and so exclusively by one producer with reference to his article that, in the
trade and to that branch of the purchasing public, the word or phrase has come to
mean that the article was his property.[29] The admission by petitioners own expert
witness that he himself could not associate Poster Ads with petitioner P & D
because it was too generic definitely precluded the application of this exception.

Having discussed the most important and critical issues, we see no need to
belabor the rest.
All told, the Court finds no reversible error committed by the Court of
Appeals when it reversed the Regional Trial Court of Makati City.
WHEREFORE, the petition is hereby DENIED and the decision of the
Court of Appeals dated May 22, 2001 is AFFIRMED in toto.
SO ORDERED.