Civ Rev Digest (Property)

4D CIVIL LAW REVIEW DIGEST | JUSTICE HERNANDO
IV.A Nature of Property

1. Haselm v. Lockwood
37 Conn. 500; 1871 Conn. LEXIS 85 February 1871
Plaintiff: THOMAS HASLEM
Defendeant: WILLIAM A. LOCKWOOD.
SUPREME COURT OF ERRORS OF CONNECTICUT, FAIRFIELD COUNTY
Ponente: PARK, J.
Summary: Plaintiff employed men to gather horse manure into heaps found in a
public street with the intention of hauling it to his land. The next day, defendant found
the heaps and hauled them to his own land. Plaintiff sued defendant demanding
payment. The defendant argued that the manure is real property belonging to the
government and thus, plaintiff could not maintain his action. The Court ruled that the
manure is personal property and that the cases relied upon by the defendant applies
to agriculture and not to the case at bar. While the manure originally belongs to the
first owner (horse-owners), abandonment resulted to the transfer of the possession to
the State. But since the State claims no ownership, plaintiff is the rightful owner.
Comparing manure to seaweed and laws in the 19th century having to do with the
scraping into piles of natural things of this sort, the court held that 24 hours was a
reasonable time for the defendant to wait to take the manure.
Facts
Plaintiff employed two men to gather into heaps some manure that lay
scattered along the side of a public highway intending to haul the same to
his own land.
The men began to scrape the manure into heaps and after gathering
eighteen heaps, or about six cart-loads, left the same at 8 pm in the street.
o The heaps consisted chiefly of manure made by horses hitched to
the railing of the public park.
The next morning, the defendant saw the heaps and endeavored without
success to ascertain who had made them, and asked the warden of the
borough if he had given permission to any one to remove them, and
ascertained from him that he had not.
Defendant thereafter removed the heaps, and also the rest of the manure
scattered along the side of the highway adjacent to the park, to his own
land.
The borough of Stamford was the sole adjoining proprietor of the land on
which the manure lay scattered before it was gathered by the plaintiff.
The plaintiff, on ascertaining that the defendant had removed the manure,
demanded payment for the same, which the defendant refused.
Plaintiffs contention: The manure was personal property which had been
abandoned by its owners and became by such abandonment the property of
the first person who should take possession of the same, which the plaintiff
had done by gathering it into heaps, and that it was not and never had been
a part of the real estate of the borough or of any one else who might be
regarded as owning the fee of the soil.
Defendants contention: The manure being dropped upon and spread out
over the surface of the earth was a part of the real estate, and belonged to
the owner of the fee, subject to the public easement; that the fee was either
in the borough of Stamford or the town of Stamford, or in the parties who
owned the lands adjacent; that therefore the scraping up of the manure,
mixed with the soil, if real estate, did not change its nature to that of personal
estate, unless it was removed and that, unless the heaps became personal
property, the plaintiff could not maintain his action.
The court ruled adversely to the claims of the plaintiff and held that on the
facts proved the plaintiff had not made out a sufficient interest in, or right of
possession to, the subject matter in dispute, to authorize a recovery in the
suit, and rendered judgment for the defendant. The plaintiff moved for a new
trial for error in this ruling of the court.
Issues:
1.Is the manure personal or real property?
2. Who is the rightful owner of the manure?
Held:
1. Personal Property
2. Plaintiff
Ratio:
1. The cases referred to by the defendant to show that it was real estate are not in
point. The principle of those cases is, that manure made in the usual course of
husbandry upon a farm is so attached to and connected with the realty that, in the
absence of any express stipulation to the contrary, it becomes appurtenant to it. The
principle was established for the benefit of agriculture. But this principle does not
apply to the droppings of animals driven by travelers upon the highway. The highway
is not used, and cannot be used, for the purpose of agriculture. The manure is of no
benefit whatsoever to it, but on the contrary is a detriment; and in cities and large
villages it becomes a nuisance, and is removed by public officers at public expense.
The finding in this case is, "that the removal of the manure and scrapings was
calculated to improve the appearance and health of the borough."
2.The manure originally belonged to the travelers whose animals dropped it, but it
being worthless to them was immediately abandoned; and whether it then became
the property of the borough of Stamford which owned the fee of the land on which the
manure lay, it is unnecessary to determine; for, if it did, the case finds that the removal
of the filth would be an improvement to the borough, and no objection was made by
any one to the use that the plaintiff attempted to make of it. At all events, the facts of
the case show a sufficient right in the plaintiff to the immediate possession of the
ALA| ASTRONOMO| BALDERAMA| BURGOS| CADIZ| CORDOVA| CRUZ| DE LIMA| DELOS SANTOS| DYSANGCO| DE TORRES| HERNANDEZ| LACONICO| LENCIO|
LI| MAGALLANES| MANONGSONG| MARCELO| MONZON| NAMBATAC| PASAMBA| PEDAYO| RELOJO| SADANG| URBINA| VASQUEZ| VENTURA| VERACRUZ|
property as against a mere wrong doer.The defendant appears before the court in no
enviable light. He does not pretend that he had a right to the manure, even when
scattered upon the highway, superior to that of the plaintiff; but after the plaintiff had
changed its original condition and greatly enhanced its value by his labor, he seized
and appropriated to his own use the fruits of the plaintiff's outlay, and now seeks
immunity from responsibility on the ground that the plaintiff was a wrong doer as well
as himself. A reasonable time for the removal of this manure had not elapsed when
the defendant seized and converted it to his own use. The statute regulating the rights
of parties in the gathering of sea-weed, gives the party who heaps it upon a public
beach twenty-four hours in which to remove it, and that length of time for the removal
of the property we think would not be unreasonable in most cases like the present
one.
Disposition: We therefore advise the Court of Common Pleas to grant a new trial.
2. Divinagracia v. CBS
Petitioner: Santiago Divinagracia
Respondent: Consolidated Broadcasting System
Ponente: Tinga
Short Facts and Doctrine/s:

Divinagracia filed a complaint before the NTC seeking to cancel the Provisional
Authorities and Certificates of Public Convenience granted to CBS and PBS.
Divinagracia alleged that the two broadcasting companies failed to comply with the
public ownership requirement of 30%.
The issue in this case is the jurisdiction of the NTC to cancel Provisional Authorities
and Certificates of Public Convenience. The court held that:
1.
2.
Airwaves are not susceptible to private appropriation/ownership. As provided

in the doctrine of scarcity of resources, airwaves must be regulated as they
are a scarce resource and as a necessary means to protect the freedom of
speech and freedom of the press.
NTC has no jurisdiction to effect such cancellation. The authority to grant
franchises is vested with the Congress. Congress merely delegated the
implementation of the regulation of broadcast to the NTC. NTC cannot go
against the will of the Congress to grant a privilege to CBS and PBS. There
is no law providing NTC with jurisdiction to cancel PAs and CPCs.
Facts:
Respondents Consolidated Broadcasting System, Inc. (CBS) and Peoples

Broadcasting Service, Inc. (PBS) are involved in the operation of radio
broadcasting services in the Philippines, they being the grantees of legislative
franchises by virtue of two laws, Republic Act (R.A.) No. 7477 and R.A. No. 7582.
o R.A. No. 7477 granted PBS a legislative franchise to construct, install,

maintain and operate radio and television stations within the Philippines
for a period of 25 years.
o R.A. No. 7582 extended CBSs previous legislative franchise to operate
radio stations for another 25 years.
o The CBS and PBS radio networks are two of the three networks that
comprise the well-known Bombo Radyo Philippines.
Section 9 of R.A. No. 7477 and Section 3 of R.A. No. 7582 contain a common
provision predicated on the constitutional mandate to democratize ownership of
public utilities. The common provision states:
o SEC. 9. Democratization of ownership. In compliance with the
constitutional mandate to democratize ownership of public utilities, the
herein grantee shall make public offering through the stock exchanges
of at least thirty percent (30%) of its common stocks within a period of
three (3) years from the date of effectivity of this Act: Provided, That no
single person or entity shall be allowed to own more than five percent
(5%) of the stock offerings.
It further appears that following the enactment of these franchise laws, the NTC
issued four (4) Provisional Authorities to PBS and six (6) Provisional Authorities
to CBS, allowing them to install, operate and maintain various AM and FM
broadcast stations in various locations throughout the nation. These Provisional
Authorities were issued between 1993 to 1998, or after the enactment of R.A. No.
7477 and R.A. No. 7582.
Petitioner Santiago C. Divinagracia filed two complaints with the NTC,
respectively lodged against PBS and CBS.
o He alleged that he was the actual and beneficial owner of Twelve percent
(12%) of the shares of stock of PBS and CBS separately, and that
despite the provisions in R.A. No. 7477 and R.A. No. 7582 mandating
the public offering of at least 30% of the common stocks of PBS and
CBS, both entities had failed to make such offering.
o Thus, Divinagracia commonly argued in his complaints that the failure on
the part of PBS and CBS to comply with the mandate of their legislative
franchise is a misuse of the franchise conferred upon it by law and it
continues to exercise its franchise in contravention of the law to the
detriment of the general public and of complainant who are unable to
enjoy the benefits being offered by a publicly listed company.
o He thus prayed for the cancellation of all the Provisional Authorities or
CPCs of PBS and CBS on account of the alleged violation of the
conditions set therein, as well as in its legislative franchises.
The NTC issued a consolidated decision dismissing both complaints.
o While the NTC posited that it had full jurisdiction to revoke or cancel a
Provisional Authority or CPC for violations or infractions of the terms and
conditions embodied therein, it held that the complaints actually
constituted collateral attacks on the legislative franchises of PBS and
CBS since the sole issue for determination was whether the franchisees
had violated the mandate to democratize ownership in their respective

legislative franchises.
o The NTC ruled that it was not competent to render a ruling on that issue,
the same being more properly the subject of an action for quo
warranto to be commenced by the Solicitor General in the name of the
Republic of the Philippines, pursuant to Rule 66 of the Rules of Court.
On certiorari, the Court of Appeals upheld the NTC. The appellate court agreed
with the earlier conclusion that the complaints were indeed a collateral attack on
the legislative franchises of CBS and PBS and that a quo warranto action was
the proper mode to thresh out the issues raised in the complaints.
Divinagracias case rotates on the singular thesis that the NTC has the power to
cancel Provisional Authorities and CPCs, or in effect, the power to cancel the
licenses that allow broadcast stations to operate.
The NTC, in its assailed Decision, expressly admits that it has such power even
as it refrained from exercising the same.
Issues:
1.
2.
Whether airwaves are susceptible to appropriation/ownership. NO.

Whether the NTC is powerless to cancel Provisional Authorities and
Certificates of Public Convenience it issued to legislative franchise-holders.
No. The proper remedy is a petition for quo warranto.
Ratio:
Any person or enterprise which wishes to operate a broadcast radio or television

station in the Philippines has to secure a legislative franchise in the form of a law
passed by Congress, and thereafter a license to operate from the NTC.
The franchise requirement traces its genesis to Act No. 3846, otherwise known
as the Radio Control Act, enacted in 1931.1
This pre-regulation history of radio broadcast stations illustrates the continuing
necessity of a government role in overseeing the broadcast media industry, as
opposed to other industries such as print media and the Internet.
Without regulation, the result would be a free-for-all market with rival
broadcasters able with impunity to sabotage the use by others of the airwaves.
1 Section 1 thereof provided that [n]o person, firm, company, association or corporation shall
construct, install, establish, or operate x x x a radio broadcasting station, without having first
obtained a franchise therefor from the National Assembly x x x Section 2 of the law prohibited
the construction or installation of any station without a permit granted by the Secretary of Public
Works and Communication, and the operation of such station without a license issued by the
same Department Secretary. The law likewise empowered the Secretary of Public Works and
Communication to regulate the establishment, use, and operation of all radio stations and of all
forms of radio communications and transmissions within the Philippine Islands and to issue such
rules and regulations as may be necessary.
Moreover, the airwaves themselves the very medium utilized by

broadcastare by their very nature NOT susceptible to appropriation,
much less be the object of any claim of private or exclusive ownership.
o No private individual or enterprise has the physical means, acting alone
to actualize exclusive ownership and use of a particular frequency. That
end, desirable as it is among broadcasters, can only be accomplished if
the industry itself is subjected to a regime of government regulation
whereby broadcasters receive entitlement to exclusive use of their
respective or particular frequencies, with the State correspondingly able
by force of law to confine all broadcasters to the use of the frequencies
assigned to them.
The key basis for regulation is rooted in empiricism that broadcast frequencies
are a scarce resource whose use could be regulated and rationalized only
by the Government. This concept was first introduced in jurisprudence in
the U.S. case of Red Lion v. Federal Communications Commission:
o Where there are substantially more individuals who want to broadcast
than there are frequencies to allocate, it is idle to posit an unabridgeable
First Amendment right to broadcast comparable to the right of every
individual to speak, write, or publish. If 100 persons want
broadcast licenses but there are only 10 frequencies to allocate, all of
them may have the same "right" to a license; but if there is to be any
effective communication by radio, only a few can be licensed and the
rest must be barred from the airwaves.
It would be strange if the First Amendment, aimed at protecting

and furthering communications, prevented the Government
from making radio communication possible by requiring
licenses to broadcast and by limiting the number of licenses so
as not to overcrowd the spectrum.
o Congress unquestionably has the power to grant and deny licenses and
to eliminate existing stations. No one has a First Amendment right to a
license or to monopolize a radio frequency; to deny a station license
because "the public interest" requires it "is not a denial of free speech."
As made clear in Red Lion, the scarcity of radio frequencies made it necessary
for the government to step in and allocate frequencies to competing
broadcasters.
o In undertaking that function, the government is impelled to adjudge which
of the competing applicants are worthy of frequency allocation.
o As the government is put in a position to determine who should be worthy
to be accorded the privilege to broadcast from a finite and limited
spectrum, it may impose regulations to see to it that broadcasters
promote the public good deemed important by the State, and to
withdraw that privilege from those who fall short of the standards set in
favor of other worthy applicants.
Such conditions are peculiar to broadcast media because of the scarcity of
the airwaves. Indeed, any attempt to impose such a regulatory regime on a
medium that is not belabored under similar physical conditions, such as
print media, will be clearly antithetical to democratic values and the free
expression clause.
Other rationales may have emerged as well validating state regulation of
broadcast media, but the reality of scarce airwaves remains the primary,
indisputable and indispensable justification for the government regulatory
role. Without government regulation of the broadcast spectrum, the ability of
broadcasters to clearly express their views would be inhibited by the anarchy of
competition. Since the airwaves themselves are not susceptible to physical
appropriation and private ownership, it is but indispensable that the
government step in as the guardian of the spectrum..
Presently broadcast stations are still required to obtain a legislative franchise, as
they have been so since the passage of the Radio Control Act in 1931. By virtue
of this requirement, the broadcast industry falls within the ambit of Section
11, Article XII of the 1987 Constitution, the one constitutional provision concerned
with the grant of franchises in the Philippines.
o The requirement of a legislative franchise likewise differentiates the
Philippine broadcast industry from that in America, where there is no
need to secure a franchise from the U.S. Congress.
The Radio Control Act had also obliged radio broadcast stations to secure a
permit from the Secretary of Commerce and Industry prior to the construction or
installation of any station. Among the specific powers granted to the Secretary
over radio stations are the approval or disapproval of any application for the
construction, installation, establishment or operation of a radio station and the
approval or disapproval of any application for renewal of station or operation
license.
This much thus is clear. Broadcast and television stations are required to
obtain a legislative franchise, a requirement imposed by the Radio Control
Act and affirmed by our ruling in Associated Broadcasting. After securing
their legislative franchises, stations are required to obtain CPCs from the
NTC before they can operate their radio or television broadcasting
systems. Such requirement while traceable also to the Radio Control Act,
currently finds its basis in E.O. No. 546, the law establishing the NTC.
bandwidths among the various legislative franchisees. The licensing power of the
NTC thus arises from the necessary delegation by Congress of legislative power
geared towards the orderly exercise by franchisees of the rights granted them by
Congress.
Congress may very well in its wisdom impose additional obligations on the
various franchisees and accordingly delegate to the NTC the power to ensure
that the broadcast stations comply with their obligations under the law. Because
broadcast media enjoys a lesser degree of free expression protection as
compared to their counterparts in print, these legislative restrictions are generally
permissible under the Constitution. Yet no enactment of Congress may
contravene the Constitution and its Bill of Rights; hence, whatever restrictions are
imposed by Congress on broadcast media franchisees remain susceptible to
judicial review and analysis under the jurisprudential framework for scrutiny of
free expression cases involving the broadcast media.
Even as the NTC is vested with the power to issue CPCs to broadcast stations, it
is not expressly vested with the power to cancel such CPCs, or otherwise
empowered to prevent broadcast stations with duly issued franchises and CPCs
from operating radio or television stations.
o Petitioner fails to point to any provision of E.O. No. 546 authorizing the NTC
to cancel licenses. Instead, petitioner relies on the power granted to the
Public Service Commission to revoke CPCs or CPCNs under Section 16(m)
of the Public Service Act.
At no time did radio companies fall under the jurisdiction of the

Public Service Commission as they were expressly excluded from
its mandate under Section 14..
Jurisdiction of NTC
The right of a particular entity to broadcast over the airwaves is established

by law i.e., the legislative franchise and determined by Congress, the branch
of government tasked with the creation of rights and obligations.
As with all other laws passed by Congress, the function of the executive branch
of government, to which the NTC belongs, is the implementation of the law.
Since the public administration of the airwaves is a requisite for the operation of a
franchise and is moreover a highly technical function, Congress has delegated to
the NTC the task of administration over the broadcast spectrum, including the
determination of available bandwidths and the allocation of such available
The fact that state regulation of broadcast media is constitutionally justified does
not mean that its practitioners are precluded from invoking Section 3, Article III of
the Constitution in their behalf. As with print media, free expression through
broadcast media is protected from prior restraint or subsequent punishment.
Should petitioners position that the NTC has the power to cancel CPCs or
licenses it has issued to broadcast stations although they are in the first place
empowered by their respective franchise to exercise their rights to free
expression and as members of a free press, be adopted broadcast media would
be encumbered by another layer of state restrictions. As things stand, they are
already required to secure a franchise from Congress and a CPC from the NTC
in order to operate. Upon operation, they are obliged to comply with the various
regulatory issuances of the NTC, which has the power to impose fees and fines
and other mandates it may deem fit to prescribe in the exercise of its rule-making
power.
Allowing the NTC to countermand State policy by revoking respondents vested
legal right to operate broadcast stations unduly gives to a mere administrative
agency veto power over the implementation of the law and the enforcement of
especially vested legal rights. That concern would not arise if Congress had
similarly empowered the NTC with the power to revoke a franchisees right to
operate broadcast stations. But as earlier stated, there is no such expression in
the law, and by presuming such right the Court will be acting contrary to the
stated State interest as expressed in respondents legislative franchises.
3.Saludo, Jr. v. CA
DISCLAIMER: Transpo and torts yung case. Im guessing the property part is how
they treated the remains/body as a good or property shipped.
RecitReady: The remains of Crispina was shipped from Chicago by Pomierski
Funeral Homes. Pomierski hired CMAS to arrange for the shipment of the remains,
which was supposed to be shipped by TWA and PAL. However the remains were not
shipped on time because it was switched with another casket. The remains of
Crispina were mistakenly shipped to Mexico. The children of Crispina sued PAL and
TWA for damages. The SC absolved them because the negligence was solely on the
part of CMAS.
Petitioners: ANICETO, MARIA SALVACION, LEOPOLDO, and SATURNINO (all
surnamed SALUDO
Respondents: CA, TRANS WORLD AIRLINES, INC., PHILIPPINE AIRLINES
March 23, 1992
Facts
The mother of petitioners, Crispina, died in Chicago. Pomierski and Son Funeral
Home of Chicago, made arrangements for the shipment of her remains to the
Philippines. The Continental Mortuary Air Services (CMAS) booked the shipment
with PAL with Maria Saludo was the consignee. On the PAL Airway Bill, the
routing was from Chicago-San Francisco on board TW, then San FranciscoManila on board PAL, and Manila-Cebu on board PAL.
Petitioners Maria Salvacion and Saturnino were booked with United Airlines.
However Maria was told by the Funeral Homes director that the remains were
booked with TWA so they changed reservations from UA to the TWA flight after
she confirmed by phone that her mother's remains should be on that TWA flight.
However, no body was brought to the airport. She went to the TWA counter, and
was told there was no body on that flight. Reluctantly, they took the TWA flight
upon assurance of her cousin that he would look into the matter and inform her
about it on the plane or have it radioed to her. But no confirmation was made.
Upon arrival at San Francisco she inquired about the remains of Crispina but was
told at the TWA counter that they did not know anything about it.
She called Pomierski that her mother's remains were not at the West Coast
terminal, and Pomierski immediately called C.M.A.S., which within 10 minutes
informed him that the remains were on a plane to Mexico City, that there were
two bodies at the terminal, and somehow they were switched. Pomiersko relayed
this information to Maria. C.M.A.S. called to say they were sending the remains
back to California via Texas.
The following day the remains of Crispina arrived in San Francisco then received
by PAL. The casket was opened in Mexico and resealed by Crispin F. Patagas for
shipment to the Philippines. It was shipped to the Philippines on the same day.
Petitioners counsel wrote to TWA of the misshipment and delay in the delivery of
the cargo, and of the discourtesy of its employees. They also wrote to PAL saying
that they were holding PAL liable for said delay in delivery and would commence
judicial action should no favorable explanation be given.
Petitioners filed a case for damages against TWA and PAL. The RTC absolved
them. The CA affirmed. Petitioners MR was denied.
ISSUES:
WON PAL must be held liable. NO. (TRANSPO)
WON there was a breach of contract. NO (STILL TRANSPO)
RATIO:
1. The body intended to be shipped was really placed in the possession and control of
PAL on October 28 when it was received form Mexico and it was from that date that
they became responsible for the agreed cargo under their undertakings in PAL Airway
Bill. The switching of caskets prior thereto which was not caused by them, and
subsequent events caused thereby, they cannot be held liable.
Pomierski F.H., the shipper of Mrs. Saludo's remains, hired CMAS which is engaged
in the business of transporting and forwarding human remains. The remains were
taken to C.M.A.S. at the airport. These people made all the necessary arrangements,
such as flights, transfers, etc. This is a national service used by undertakers
throughout the nation. They furnished the air pouch which the casket is enclosed in,
and they see that the remains are taken to the proper air freight terminal. Thus, under
said circumstances, no fault and/or negligence can be attributed to PAL (even if Air
Care International should be considered as an agent of PAL) and/or TWA, the entire
fault or negligence being exclusively with C.M.A.S.
While the actual participation of CMAS has been sufficiently and correctly established,
to hold that it acted as agent for private respondents would be both an inaccurate
appraisal and an unwarranted categorization of the legal position it held in the entire
transaction.
2. The oft-repeated rule regarding a carrier's liability for delay is that in the absence of
a special contract, a carrier is not an insurer against delay in transportation of goods.
When a common carrier undertakes to convey goods, the law implies a contract that
they shall be delivered at destination within a reasonable time, in the absence, of any
agreement as to the time of delivery. But where a carrier has made an express
contract to transport and deliver property within a specified time, it is bound to fulfill its
contract and is liable for any delay, no matter from what cause it may have arisen.
There is no showing by plaintiffs that such a special or specific contract had been
entered into between them and the defendant airline companies.
A common carrier undertaking to transport property has the implicit duty to carry and
deliver it within reasonable time, absent any particular stipulation regarding time of
delivery, and to guard against delay. In case of any unreasonable delay, the carrier
shall be liable for damages immediately and proximately resulting from such neglect
of duty. As found by the trial court, the delay in the delivery of the remains of Crispina
Saludo, undeniable and regrettable as it was, cannot be attributed to the fault,
negligence or malice of private respondents, a conclusion concurred in by respondent
court and which we are not inclined to disturb.
==========================================================
IV.B.1 Classification of Property: Immovable Property
4. Villasi v. Garcia
Petitioner: Magdalena Villasi
Respondent: Spouses Garcia
Ponente: Perez
Short Version:
Villasi contracted FCGI for the construction of a condominium. For Villasis failure to
pay, FCGI filed a collection case. RTC ruled in favour of FCGI but the CA and SC
finally resolved that there was overpayment by Villasi, hence, FCGI should return the
excess amount.
Villasi moved for the execution of the judgment. A writ of execution was issued. The
sheriff levied on a building which was, under declaration for tax purposes, in the name
of FCGI. The lots on which the building stood, however, was in the name of Spouses
Garcia. The spouses sought to forestall the execution proceedings claiming that they
are the lawful owners of the property which was erroneously levied upon by the
sheriff. The issue is whether the Spouses Garcia are the owners of the building. The
SC answered in the negative. FCGI owns the building. Aside from their postulation
that as title holders of the land, the law presumes them to be owners of the
improvements built thereon, the Spouses Garcia were unable to adduce credible
evidence to prove their ownership of the property
Facts:
Petitioner Magdalena T. Villasi (Villasi) engaged the services of respondent Fil-Garcia

Construction, Inc. (FGCI) to construct a seven-storey condominium building in
Quezon City.
For failure of Villasi to fully pay the contract price despite several demands, FGCI
initiated a suit for collection of sum of money.
The RTC ruled in favour of FCGI saying that the latter was able to preponderantly
establish by evidence its right to the unpaid accomplishment billings. The CA reversed
the decision and ruled that an overpayment was made by Villasi and thereby directed
FGCI to return the amount that was paid in excess. The case was elevated to the SC
which affirmed the decision of the CA. Hence, Entry of Judgment was made.
To enforce her right as prevailing party, Villasi filed a Motion for Execution. A Writ of
Execution was issued commanding the Sheriff to execute and make effective the
decision of the CA.
To satisfy the judgment, the sheriff levied on a building located at No. 140 Kalayaan
Avenue, Quezon City and built in parcels of land. While the building was declared for
taxation purposes in the name of FGCI, the lots in which it was erected were
registered in the names of the Spouses Filomeno Garcia and Ermelinda Halili-Garcia
(Spouses Garcia). After the mandatory posting and publication of notice of sale on
execution of real property were complied with, a public auction was scheduled.
To forestall the sale on execution, the Spouses Garcia filed an Affidavit of Third Party
Claim and a Motion to Set Aside Notice of Sale on Execution, claiming that they are
the lawful owners of the property which was erroneously levied upon by the sheriff.
Spouses Garcias Argument: The building covered by the levy was mistakenly
assessed by the City Assessor in the name of FGCI. The Spouses Garcia asserted
that as the owners of the land, they would be deemed under the law as owners of the
building standing thereon. Hence, it may not be levied upon.
Villasis Argument: Its ownership belongs to FGCI and not to the Spouses Garcia as
shown by the tax declaration. Hence, it may be levied upon.
The conduct of the sale on execution was thus held in abeyance.
Issue: Who is the owner of the building to be levied upon?
Held:
FCGI is the owner of the building. Thus, it may be levied upon by the sheriff to
execute the judgment in favor of Villasi.
Money judgments are enforceable only against the property incontrovertibly belonging
to the judgment debtor, and if the property belonging to any third person is mistakenly
levied upon to answer for another mans indebtedness, such person has all the right
to challenge the levy through any of the remedies provided for under the Rules of
Court.
Villasis Contention: The levy effected by the sheriff was proper since the subject
property belongs to the judgment debtor and not to third persons. To dispute the
ownership of the Spouses Garcia, Villasi pointed out that the levied property was
declared for tax purposes in the name of FGCI. A Certification issued by the Office of
the City Engineering of Quezon City likewise showed that the building permit of the
subject property was likewise issued in the name of FGCI
Court: The right of a third-party claimant to file a terceria is founded on his title or
right of possession.1avvphi1 Corollary thereto, before the court can exercise its
supervisory power to direct the release of the property mistakenly levied and the
restoration thereof to its rightful owner, the claimant must first unmistakably establish
his ownership or right of possession thereon.
The Spouses Garcia failed to prove that they have a bona fide title to the
building in question. Aside from their postulation that as title holders of the
land, the law presumes them to be owners of the improvements built thereon,
the Spouses Garcia were unable to adduce credible evidence to prove their
ownership of the property. In contrast, Villasi was able to satisfactorily
establish the ownership of FGCI thru the pieces of evidence she appended to
her opposition. Worthy to note is the fact that the building in litigation was
declared for taxation purposes in the name of FGCI and not in the Spouses
Garcias. While it is true that tax receipts and tax declarations are not
incontrovertible evidence of ownership, they constitute credible proof of claim
of title over the property
Although tax declarations or realty tax payment of property are not conclusive
evidence of ownership, nevertheless, they are good indicia of possession in the
concept of owner for no one in his right mind would be paying taxes for a property
that is not in his actual or at least constructive possession. They constitute at least
proof that the holder has a claim of title over the property.
FGCI is in actual possession of the building and as the payment of taxes coupled with
actual possession of the land covered by tax declaration strongly supports a claim of
ownership. Quite significantly, all the court processes in an earlier collection suit
between FGCI and Villasi were served, thru the formers representative Filomeno
Garcia, at No. 140 Kalayaan Avenue, Quezon City, where the subject property is
located. This circumstance is consistent with the tax declaration in the name of FGCI.
While it is a hornbook doctrine that the accessory follows the principal that is, the
ownership of the property gives the right by accession to everything which is
produced thereby, or which is incorporated or attached thereto, either naturally or
artificially, such rule is not without exception. In cases where there is a clear and
convincing evidence to prove that the principal and the accessory are not
owned by one and the same person or entity, the presumption shall not be
applied and the actual ownership shall be upheld. In a number of cases, we
recognized the separate ownership of the land from the building and brushed
aside the rule that accessory follows the principal.
The rule on accession is not an iron-clad dictum. On instances where this Court was
confronted with cases requiring judicial determination of the ownership of the building
separate from the lot, it never hesitated to disregard such rule. The case at bar is of
similar import. When there are factual and evidentiary evidence to prove that the
building and the lot on which it stands are owned by different persons, they shall be
treated separately. As such, the building or the lot, as the case may be, can be made
liable to answer for the obligation of its respective owner.
5. Midway Marine v. Castro
6. Prudential Bank v. Panis

Gr No. L50008. August 31, 1987.
Petitioners: PRUDENTIAL BANK
Respondents: HONORABLE DOMINGO D. PANIS, Presiding Judge of Branch III,
Court of First Instance of Zambales and Olongapo City; FERNANDO MAGCALE &
TEODULA BALUYUT MAGCALE
Ponente: PARAS, J.
Short Facts and Held:
Plaintiffs-spouses Fernando A. Magcale and Teodula Baluyut Magcale secured a loan
from the defendant Prudential Bank. To secure payment of this loan, plaintiffs
executed in favor of defendant a deed of Real Estate Mortgage over a 2-storey, semiconcrete residential building with warehouse space and granting upon the mortgagee
the right of occupancy on the lot where the property is erected. A rider is also included
in the deed that, in the event the Sales Patent on the lot applied for by the Mortgagors
as herein stated is released or issued by the Bureau of Lands, the Mortgagors hereby
authorize the Register of Deeds to hold the Registration of same until this Mortgage is
cancelled, or to annotate this encumbrance on the Title upon authority from the
Secretary of Agriculture and Natural Resources, which title with annotation, shall be
released in favor of the herein Mortgage. Subsequently, the plaintiffs secured an
additional loan from Prudential Bank, secured by another deed of Real Estate
Mortgage. The Secretary of Agriculture issued Miscellaneous Sales Patent No. 4776
over the parcel of land, possessory rights over which were mortgaged to defendant
Prudential Bank, in favor of plaintiffs. For failure of plaintiffs to pay their obligation to
defendant Bank after it became due, and upon application of said defendant, the
deeds of Real Estate Mortgage were extrajudicially foreclosed. Consequent to the
foreclosure was the sale of the properties therein mortgaged to defendant as the
highest bidder in a public auction sale. The Supreme Court held that a valid real
estate mortgage can be constituted on the building erected on the land

belonging to another. Under Art 415, Civil Code, the inclusion of a building
separate and distinct from the land means that a building is by itself an
immovable property. While a mortgage of land necessarily includes buildings, a
building by itself may be mortgaged apart from the land on which it has been
built. Mortgage is still a real estate mortgage for the building would still be
considered immovable property even if dealt with separately from the land. A
mortgage executed by a private respondent on his own building erected on the
land belonging to the government is a valid mortgage. The original mortgage
was executed before the issuance of the final patent and before the government
was divested of its title to the land and thus, not within the prohibition of the
Public Land Act and Republic Act 730. The second mortgage was struck down
as null and void because it was executed after the issuance of the sales patent
and of the original certificate of title, falling squarely under the prohibition of
the Public Land Act and Republic Act 730.
previously mortgaged in Exhibit "A." This second deed of Real Estate Mortgage was
likewise registered with the Registry of Deeds, this time in Olongapo City.
The Secretary of Agriculture issued Miscellaneous Sales Patent No. 4776 over the
parcel of land, possessory rights over which were mortgaged to defendant Prudential
Bank, in favor of plaintiffs. On the basis of the aforesaid Patent, and upon its
transcription in the Registration Book of the Province of Zambales, Original Certificate
of Title No. P-2554 was issued in the name of Plaintiff Fernando Magcale.
Facts:
For failure of plaintiffs to pay their obligation to defendant Bank after it became due,
and upon application of said defendant, the deeds of Real Estate Mortgage were
extrajudicially foreclosed. Consequent to the foreclosure was the sale of the
properties therein mortgaged to defendant as the highest bidder in a public auction
sale conducted by the defendant City Sheriff. The auction sale aforesaid was held
despite written request from plaintiffs through counsel, for the defendant City Sheriff
to desist from going with the scheduled public auction sale. Respondent Court, in a
Decision, declared the deeds of Real Estate Mortgage as null and void.
Plaintiffs-spouses Fernando A. Magcale and Teodula Baluyut Magcale secured a loan

in the sum of P70,000.00 from the defendant Prudential Bank. To secure payment of
this loan, plaintiffs executed in favor of defendant on a deed of Real Estate Mortgage
over the following described properties:
Petitioner filed a Motion for Reconsideration. In an Order, the Motion for

Reconsideration was denied for lack of merit. Hence, the instant petition for certiorari
to review the decision of the Court of First Instance of Zambales and Olongapo City,
Br. III. Panis, J.
A 2-STOREY, SEMI-CONCRETE, residential building with warehouse

spaces containing a total floor area of 263 sq. meters.
THE PROPERTY hereby conveyed by way of MORTGAGE includes the
right of occupancy on the lot where the above property is erected.
Issue: Whether or not a valid real estate mortgage can be constituted on the
building erected on the land belonging to another. (YES)
Apart from the stipulations in the printed portion of the aforestated deed of mortgage,
there appears a rider typed at the bottom of the reverse side of the document under
the lists of the properties mortgaged which reads, as follows: AND IT IS FURTHER
AGREED that in the event the Sales Patent on the lot applied for by the Mortgagors
as herein stated is released or issued by the Bureau of Lands, the Mortgagors hereby
authorize the Register of Deeds to hold the Registration of same until this Mortgage is
cancelled, or to annotate this encumbrance on the Title upon authority from the
Secretary of Agriculture and Natural Resources, which title with annotation, shall be
released in favor of the herein Mortgage.
Under Art 415, Civil Code, the inclusion of a building separate and distinct from
the land means that a building is by itself an immovable property
I.
II.
From the aforequoted stipulation, it is obvious that the mortgagee (defendant

Prudential Bank) was at the outset aware of the fact that the mortgagors (plaintiffs)
have already filed a Miscellaneous Sales Application over the lot, possessory rights
over which, were mortgaged to it. Exhibit "A" (Real Estate Mortgage) was registered
under the Provisions of Act 3344 with the Registry of Deeds of Zambales.
Plaintiffs secured an additional loan from defendant Prudential Bank in the sum of
P20,000.00. To secure payment of this additional loan, plaintiffs executed in favor of
the said defendant another deed of Real Estate Mortgage over the same properties
Held:
In the enumeration of properties under Article 415 of the Civil Code of the
Philippines, this Court ruled that, "it is obvious that the inclusion of 'building'
separate and distinct from the land, in said provision of law can only mean
that a building is by itself an immovable property."
While a mortgage of land necessarily includes buildings, a building by itself

may be mortgaged apart from the land on which it has been built; Mortgage is
still a real estate mortgage for the building would still be considered immovable
property even if dealt with separately from the land; Possessory rights over
property before title is vested on the grantee may be validly transferred as in a
deed of mortgage.
Thus, while it is true that a mortgage of land necessarily includes, in the

absence of stipulation of the improvements thereon, buildings, still a building
by itself may be mortgaged apart from the land on which it has been built.
Such a mortgage would be still a real estate mortgage for the building would
still be considered immovable property even if dealt with separately and
apart from the land. In the same manner, this Court has also established that
possessory rights over said properties before title is vested on the grantee,
may be validly transferred or conveyed as in a deed of mortgage.
A mortgage executed after the issuance of the sales patent and of the original
certificate of title falls squarely under the prohibition of the Public Land Act and
Republic Act 730, and is null and void.
A mortgage executed by a private respondent on his own building erected on

the land belonging to the government is a valid mortgage; The original
mortgage was executed before the issuance of the final patent and before the
government was divested of its title to the land.
Coming back to the case at bar, the records show, as aforestated that the
original mortgage deed on the 2storey semiconcrete residential building with
warehouse and on the right of occupancy on the lot where the building was
erected, was executed and registered under the provisions of Act 3344 with
the Register of Deeds of Zambales before the Miscellaneous Sales Patent
No. 4776 on the land was issued, on the basis of which OCT No. 2554 was
issued in the name of private respondent Fernando Magcale.
It is therefore without question that the original mortgage was executed
before the issuance of the final patent and before the government was
divested of its title to the land, an event which takes effect only on the
issuance of the sales patent and its subsequent registration in the Office of
the Register of Deeds.
Under the foregoing considerations, it is evident that the mortgage executed
by private respondent on his own building which was erected on the land
belonging to the government is to all intents and purposes a valid mortgage.
Restrictions expressly mentioned on the face of the respondents' title, are

valid, as under the Public Land Act what are referred to are lands or any
improvements thereon, and have no application to the assailed mortgage which
was executed before such eventuality.
As to restrictions expressly mentioned on the face of respondents' OCT No.

P2554, it will be noted that Sections 121,122 and 124 of the Public Land Act,
refer to land already acquired under the Public Land Act, or any
improvement thereon and therefore have no application to the assailed
mortgage in the case at bar which was executed before such eventuality.
Likewise, Section 2 of Republic Act No. 730, also a restriction appearing on
the face of private respondent's title has likewise no application in the instant
case, despite its reference to encumbrance or alienation before the patent is
issued because it refers specifically to encumbrance or alienation on the
land itself and does not mention anything regarding the improvements
existing thereon.
But it is a different matter, as regards the second mortgage executed over

the same properties for an additional loan, which was registered with the
Registry of Deeds of Olongapo City. Relative thereto, it is evident that such
mortgage executed after the issuance of the sales patent and of the Original
Certificate of Title, falls squarely under the prohibitions stated in Sections
121, 122 and 124 of the Public Land Act and Section 2 of Republic Act 730,
and is therefore null and void.
As between parties to a contract validity cannot be given to it by estoppel if it is

prohibited by law or is against public policy.
Petitioner points out that private respondents, after physically possessing the
title for five years, voluntarily surrendered the same to the bank in order that
the mortgaged may be annotated, without requiring the bank to get the prior
approval of the Ministry of Natural Resources beforehand, thereby implicitly
authorizing Prudential Bank to cause the annotation of said mortgage on
their title. However, the Court, in recently ruling on violations of Section 124
which refers to Sections 118,120, 122 and 123 of Commonwealth Act 141,
has held: "x x x Nonetheless, we apply our earlier rulings because we
believe that as in pari delicto may not be invoked to defeat the policy of the
State neither may the doctrine of estoppel give a validating effect to a void
contract. Indeed, it is generally considered that as between parties to a
contract, validity cannot be given to it by estoppel if it is prohibited by law or
is against public policy (19 Am. Jur. 802). It is not within the competence of
any citizen to barter away what public policy by law seeks to preserve
(Gonzalo Puyat & Sons, Inc. vs. De los Amas and Alino, supra). x x x"
(Arsenal vs. IAC, 143 SCRA 54 [1986]).
7. Makati Leasing v. Wearever

Petitioner: Makati Leasing and Finance Corporation
Respondents: Wearever Textile Mills, Inc. and Court of Appeals
Summary:
Wearever executed a Chattel Mortgage covering inventory and machinery in favour of
Makati Leasing. Upon default, foreclosure of the properties was sought. Due to initial
failure of the sheriff to seize the machinery, an application for replevin was filed. It is
disputed whether the machinery involved is a personal or real property (which
determines whether it is a proper subject of replevin). Court said that it is a personal
property as between the parties. If a house of strong materials may be considered as
personal property for purposes of executing a chattel mortgage thereon as long as
the parties to the contract so agree and no innocent third party will be prejudiced
thereby (as held in Tumalad case), there is absolutely no reason why a machinery,
which is movable in its nature and becomes immobilized only by destination or

purpose, may not be likewise treated as such. One who has so agreed is estopped
from denying the existence of the chattel mortgage.
Facts:
Wearever Textile executed a Chattel Mortgage in favour or Makati Leasing in order to
obtain financial accommodations. Mortgaged items include certain raw materials
inventory and machinery described as an Artos Aero Dryer Stentering Range.
Wearever defaulted; hence, petitioner filed a petition for extrajudicial foreclosure of
the properties. However, the sheriff failed to gain entry into the premises and was not
able to effect the seizure of the machinery. Makati Leasing then filed a complaint for
judicial foreclosure.
10
Moreover, in Tumalad case, the law makes no distinction with respect to the
ownership of the land on which the house is built. Hence, the case at hand cannot be
differentiated from the Tumalad case because of the fact that the latter involved a
rented lot.
The characterization of the subject machinery as chattel by Wearever is indicative of
its intention and impresses upon the property the character determined by the parties.
As stated in Standard Oil Co. of New York v. Jaramillo, it is undeniable that the parties
to a contract may by agreement treat as personal property that which by nature would
be real property, as long as no interest of third parties would be prejudiced thereby.
8. Star Two v. Paper City
Acting on Makati Leasings application for replevin, the lower court issued a writ of
seizure. This was set aside by the CA after ruling that the machinery in suit cannot be
subject of replevin, much less of a chattel mortgage, because it is a real property
pursuant to Article 415 of NCC. It is attached to the ground by means of bolts and the
only way to remove it from the plant would be to drill out or destroy the concrete floor.
Issue:
Whether the machinery subject of the chattel mortgage is real or personal property
from the point of view of the parties? (NOTE: Makati Leasing is claiming that it is a
personal property; Wearever claims that it is a real property)
Held:
PERSONAL PROPETY.
The Court relied on the ruling in Tumalad v. Vicencio:
[B]y ceding, selling or transferring a property by way of chattel mortgage defendantsappellants could only have meant to convey the house as chattel, or at least, intended
to treat the same as such, so that they should not now be allowed to make an
inconsistent stand by claiming otherwise.
In such case, the court likewise noted that the lot was rented, combined with the fact
that the parties, particularly mortgagors, intended to treat the house as a personalty.
The doctrine of estoppel was also applied.
Examining the records in the instant case, the Court said that there is no logical
justification to deviate from the ruling in Tumalad. If a house of strong materials, like
what was involved in Tumalad case, may be considered as personal property for
purposes of executing a chattel mortgage thereon as long as the parties to the
contract so agree and no innocent third party will be prejudiced thereby, there is
absolutely no reason why a machinery, which is movable in its nature and becomes
immobilized only by destination or purpose, may not be likewise treated as such. This
is really because one who has so agreed is estopped from denying the existence of
the chattel mortgage.
Petitioner: Star Two (SPV-AMC), Inc.,

Respondent: Paper City Corporation of the Philippines
Ponente: Perez, J.
Short Facts and Doctrine/s: Paper City obtained loans from RCBC (substituted by
Star Two) secured by a chattel mortgage over Paper Citys machineries and
equipment. This CM was unilaterally cancelled by RCBC. Subsequently, Paper City
entered into a Mortgage Trust Indenture with RCBC and 2 other banks. In the MTI,
Paper City obtained additional loans secured by a deed of real estate mortgage plus
real and personal property which was annexed. This necessarily included the
machineries and equipment of Paper City. Defaulted. Foreclosed. They were arguing
over whether the machineries and equipment are to be considered as real property
and thus included in the foreclosure. RCBC poses that Paper City gave its consent to
consider the disputed machineries and equipment as real properties. Paper City
contends that the machineries and equipment are chattels by agreement thru the
deeds of CM Held: SC said that the parties stipulated in the MTI that the properties
mortgaged are various parcels of land including buildings and existing improvements
thereon as well as the machineries and equipment. The real estate mortgage over the
machineries and equipment is even in full accord with the classification of such
properties by the NCC as immovable property (Art. 415. Par 5. Machinery,
receptacles, instruments or implements).
Facts:
Paper City was granted loans and credit accommodations by RCBC. The
loans were secured by Deeds of Continuing Chattel Mortgages on Paper
City's machineries and equipment. However, RCBC unilaterally cancelled
the deeds.
Subsequently, RCBC, together with Metrobank and Union Bank, entered into
a Mortgage Trust Indenture with Paper City. In the said MTI, Paper City
acquired additional loans secured by Deeds of Real Estate Mortgage, plus
real and personal properties in an annex to the MTI, which covered the
machineries and equipment of Paper City.
11
Paper City defaulted. RCBC filed a petition for extra-judicial foreclosure

against the real estate executed by Paper City including all the
improvements. As highest bidders, the three banks were issued a Certificate
of Sale.
Paper City filed with the trial court a motion to remove machinery out of the
foreclosed land and building, saying that the same were not included in the
foreclosure of the real estate mortgage.
RCBC contends that 1.)That Paper City gave its consent to consider the
disputed machineries and equipment as real properties when they signed
the MTI.
Paper City argued: 1.) The machineries and equipment are chattels by
agreement thru the Deeds of Continuing Chattel Mortgages and they did not
consent to consider the disputed machineries and equipment as real
property. 2) They also contend that the cancellation of the chattel mortgage
was invalid because it was done unilaterally hence such chattel mortgage
remains subsisting.
Issues: 1. Whether the subject machineries and equipment were considered real
properties and should therefore be included in the extra-judicial foreclosure which in
turn were sold to the banks.
Ruling:
1.
Yes
Ratio:
1.
Explanation of Answer to Issue 1
The SC said that repeatedly in the MTI's, the parties stipulated that the
properties mortgaged by Paper City to RCBC are various parcels of land
including buildings and existing improvements thereon as well as the
machineries and equipment.
The MTI is clear. The plain language and literal interpretation of the MTI's
must be applied. The petitioner, other creditor banks, and Paper City
intended from the very first indenture that the machineries and equipment in
the annex in the MTI's are included.
Considering that the MTI which is the instrument of the mortgage that was
foreclosed exactly states through the Deed of Amendment that the
machineries and equipments listed in Annexes "A" and "B" form part of the
improvements listed and located on the parcels of land subject of the
mortgage, such machineries and equipments are surely part of the
foreclosure of the "real estate properties, including all improvements
thereon" as prayed for in the petition.
The real estate mortgages which specifically included the machineries and
equipments were subsequent to the chattel mortgages. Without doubt, the
real estate mortgages superseded the earlier chattel mortgages.
The real estate mortgage over the machineries and equipment are even in
full accord with the classification of such properties by the Civil Code of the
Philippines as immovable property. Thus:
Article 415. The following are immovable property:
(5) Machinery, receptacles, instruments or implements intended by the
owner of the tenement for an industry or works which may be carried on in a
building or on a piece of land, and which tend directly to meet the needs of
the said industry or works;
Disposition: WHEREFORE, the petition is GRANTED. Accordingly, the Decision and

Resolution of the Court of Appeals dated 8 March 2005 and 8 August 2005 upholding
the 15 August 2003 and 1 December 2003 Orders of the Valenzuela Regional Trial
Court are hereby REVERSED and SET ASIDE and the original Order of the trial court
dated 28 February 2003 denying the motion of respondent to remove or dispose of
machinery is hereby REINSTATED.
9. Yap v. Tanada
Recitation Ready Digest. Spouses Yap were the judgement obligors in a case
decided by Judge Taada. The Judge thereafter ordered a writ of execution;
accordingly, the Sheriff levied on the subject property an installed water pump and
subsequently auctioned it off. On appeal, the Spouses argued that the sale should be
annulled because the notice of the scheduled sale was not done by publication as
required by the Rules of Court in cases of sale of immovables. In short, the Spouses
were saying that since the water pump was installed or attached to the ground
already it became an immovable. The Court said that an immovable property,
among others, refers to anything "attached to an immovable in a fixed manner,
in such a way that it cannot be separated therefrom without breaking the
material or deterioration of the object. Obviously, the water pump here can be
easily detached by unscrewing bolts alone. Hence it is not an immovable. (Nice try,
Spouses Yap).
Ponente: Narvasa J.
Facts:
Goulds Pumps supplied and installed a water pump in the Spouses Yaps
premises. However, the Spouses failed to pay the balance. Hence, Goulds
Pumps filed a complaint for recovery of the balance price. Judge Taada ruled in
favor of Goulds Pumps.
Eventually, the Judge ordered the Issuance of a Writ of Execution. Spouses Yap
thus moved for a reconsideration of the Order.
In the meantime, the Sheriff levied on the water pump in question, and
subsequently scheduled the execution sale thereof on November 14, 1969.
But in view of the pendency of the Spouses Motion for Reconsideration, the
Judge directed the suspension of the sale.
However, it appears that the Sheriff did not receive a copy or the Order for
Suspension. The Sheriff thereafter submitted the requisite report, which stated
that execution had been "partially satisfied."
Once again, the Spouses filed another motion, now a Motion to Set Aside the
Execution Sale. However, the same was denied.
Hence, the Spouses filed this petition for review. The Spouses alleged that the
sale was made without the notice required by the Rules of Court," i.e., notice by
publication is required in case of execution sale of real property. To support their
stance, Spouses contended that the pump and its accessories are immovables
because they were attached to the ground with character of permanency.
Issue: Should the pump be treated as an immovable?
Held: No. The Civil Code considers as immovable property, among others, anything
"attached to an immovable in a fixed manner, in such a way that it cannot be
separated therefrom without breaking the material or deterioration of the object.
The pump does not fit this description. It could be, and was in fact separated from
Yap's premises without being broken or suffering deterioration. Obviously the
separation or removal of the pump involved nothing more complicated than the
loosening of bolts or dismantling of other fasteners.
12
IV.B.2 Classification of Property: Movable Property

10.Laurel v. Abrogar
G.R. No. 155076 | January 13, 2009
Petitioner: LUIS MARCOS P. LAUREL

Respondents: HON. ZEUS C. ABROGAR, Presiding Judge of the Regional Trial
Court, Makati City, Branch 150, PEOPLE OF THE PHILIPPINES & PHILIPPINE
LONG DISTANCE TELEPHONE COMPANY
Short facts/Doctrine: Laurel and his co-accused were charged with the crime of theft
for allegedly using international long distance calls belonging to PLDT by routing and
completing calls using lines and cables which connect directly to the facilities of the
destined country, effectively stealing PLDTs business. Laurel contends that
international phone calls and the business or service of providing such calls are not
personal property capable of being the subject of theft.
The only requirement for a personal property to be the object of theft under the
penal code is that it be capable of appropriation. It need not be capable of
"asportation," which is defined as "carrying away." The term personal property in
the RPC should be interpreted in the context of the Civil Code, which provides
(1) that forces of nature which may be brought under control by science, and (2)
that all property which are not real property, are personal property. While
international phone calls are electrical energy which may be brought under control by
science, it cannot be said that such calls were personal properties belonging to PLDT
since the latter could not have acquired ownership over such calls. The subject of
theft in this case was the business of PLDT, which was likewise held to be personal
property as it is not among those enumerated as real property. The theft consists of
the use of PLDTs communications facilities without its consent. Thus, the Information
should be amended.
The notice by publication prescribed for sale of real property therefore does not apply.
==========================================================
13
FACTS:
Laurel is one of the accused in a criminal case for theft. The Information provided that
the accused unlawfully stole and used the international long distance calls belonging
to PLDT by conducting International Simple Resale (ISR), which is a method of
routing and completing international long distance calls using lines, cables, antenae,
and/or air wave frequency which connect directly to the local or domestic exchange
facilities of the country where the call is destined, effectively stealing this business
from PLDT while using its facilities in the estimated amount of 20M. Laurel filed a
Motion to Quash on the ground that the allegations did not constitute the crime of
theft, as international phone calls and the business or service of providing
international phone calls are not personal property capable of being taken.
ISSUE:
Whether international phone calls and the business or service of providing them are
personal property
When the Civil Code was enacted, the legislature did not limit or qualify the definition
of "personal property" in the RPC. Consequently, any property not included in the
enumeration of real properties under the Civil Code and capable of appropriation can
be the subject of theft under the RPC. The only requirement for a personal
property to be the object of theft under the penal code is that it be capable of
appropriation. It need not be capable of "asportation," which is defined as "carrying
away."
To appropriate means to deprive the lawful owner of the thing. The word "take" in the
RPC includes any act intended to transfer possession which may be committed
through the use of the offenders own hands, as well as any mechanical device, such
as an access device or card as in the instant case. Appropriation of forces of
nature which are brought under control by science such as electrical energy
can be achieved by tampering with any apparatus used for generating or
measuring such forces of nature, wrongfully redirecting such forces of nature
from such apparatus, or using any device to fraudulently obtain such forces of
nature.
HELD2:
YES, BUT THE SUBJECT OF THEFT IN THIS CASE WAS THE BUSINESS OWNED
BY PLDT, NOT THE INTERNATIONAL PHONE CALLS. Prior to the passage of the
RPC, jurisprudence has provided that any personal property, tangible or intangible,
corporeal or incorporeal, capable of appropriation can be the object of theft. As per
the Civil Code of Spain and as a generally accepted definition in civil law, personal
property is anything susceptible of appropriation and not [real property]. Thus, the
term personal property in the RPC should be interpreted in the context of the Civil
Code in accordance with the rule on statutory construction that where words have
been long used in a technical sense and have been judicially construed to have a
certain meaning, and have been adopted by the legislature as having a certain
meaning prior to a particular statute, in which they are used, the words used in such
statute should be construed according to the sense in which they have been
previously used.
2 The elements of theft under Art. 308 of the RPC are as follows: (1) that there be taking of
personal property; (2) that said property belongs to another; (3) that the taking be done with
intent to gain; (4) that the taking be done without the consent of the owner; and (5) that the
taking be accomplished without the use of violence against or intimidation of persons or force
upon things.
In the instant case, petitioner was charged with engaging in International Simple
Resale or the unauthorized routing and completing of international long distance calls
using lines, cables, antennae, and/or air wave frequency and connecting these calls
directly to the local or domestic exchange facilities of the country where destined.
As adopted from the Penal Code and jurisprudence of Spain, the acts of "subtraction"
punishable by law include: (a) tampering with any wire, meter, or other apparatus
installed or used for generating, containing, conducting, or measuring electricity,
telegraph or telephone service; (b) tapping or otherwise wrongfully deflecting or taking
any electric current from such wire, meter, or other apparatus; and (c) using or
enjoying the benefits of any device by means of which one may fraudulently obtain
any current of electricity or any telegraph or telephone service. All three acts of
subtraction are present in the instant case.
Theft of PLDTs business. The business of providing telecommunication or

telephone service is likewise personal property which can be the object of theft
14
under Article 308 RPC, as under the Bulk Sales Law, business may be appropriated.
Article 414 of the Civil Code provides that all things which are or may be the object of
appropriation are considered either real property or personal property. Because it is
not included in the exclusive enumeration of real properties under Article 415, it is
therefore personal property.
and only later mentions "stealing the business from PLDT" as the manner by which
the gain was derived by the accused. In order to correct this inaccuracy of description,
this case must be remanded to the trial court and the prosecution directed to
amend the Amended Information, to clearly state that the property subject of
the theft are the services and business of respondent PLDT.
In this case, Laurels acts constitute theft of respondent PLDTs business and service,
committed by means of the unlawful use of the latters facilities. In this regard, the
Amended Information inaccurately describes the offense by making it appear that
what petitioner took were the international long distance telephone calls, rather than
respondent PLDTs business.
11. PNB v. Aznar
In the assailed Decision, it was conceded that in making the international phone calls,
the human voice is converted into electrical impulses or electric current which are
transmitted to the party called. A telephone call, therefore, is electrical energy. It
was also held in the assailed Decision that intangible property such as electrical
energy is capable of appropriation because it may be taken and carried away.
Electricity is personal property under Article 416 (3) of the Civil Code, which
enumerates "forces of nature which are brought under control by science."
Indeed, while it may be conceded that "international long distance calls," the
matter alleged to be stolen in the instant case, take the form of electrical
energy, it cannot be said that such international long distance calls were
personal properties belonging to PLDT since the latter could not have acquired
ownership over such calls. PLDT merely encodes, augments, enhances, decodes
and transmits said calls using its complex communications infrastructure and facilities.
PLDT not being the owner of said telephone calls, then it could not validly claim that
such telephone calls were taken without its consent. It is the use of these
communications facilities without the consent of PLDT that constitutes the
crime of theft, which is the unlawful taking of the telephone services and
business.
Therefore, the business of providing telecommunication and the telephone service

are personal property under Article 308 of the Revised Penal Code, and the act of
engaging in ISR is an act of "subtraction" penalized under said article. However, the
Amended Information describes the thing taken as, "international long distance calls,"
G.R. 171805 May 30, 2011

PETITIONER: PHILIPPINE NATIONAL BANK
RESPONDENT: MERELO B. AZNAR; MATIAS B. AZNAR III; JOSE L. AZNAR
(deceased), represented by his heirs; RAMON A. BARCENILLA; ROSARIO T.
BARCENILLA; JOSE B. ENAD (deceased), represented by his heirs; and RICARDO
GABUYA (deceased), represented by his heirs
SHORT FACTS AND HELD: RIS Corp. ceased business due to business
reverses. In order to rehabilitate such Corporation, Aznar et al. (Stockholders)
contributed an amount which was used to purchase 3 parcels of land. The titles were
issued in the name of the Corporation, and in the minutes of the special meeting of
BOD, the contributions constituted as liens and encumbrances of the properties
purchased. Eventually, a notice of attachment and writ of execution was issued to
these properties in favor of PNB. Aznar et al. then filed a complaint for quieting of
title. They contended that the language of the special minutes of meeting of BOD
created an express trust and not a loan. Hence, they have a right of the ownership of
the property. PNB however contended that Aznar et al. do not have any legal right
over the properties of the corporation.
The issue is whether Aznar et al. has the right to ask the quieting of title of the
properties in issue?
No. The money contributed by Aznar et al. was in the nature of a loan, secured by
their liens and interests duly annotated on the titles. The annotation of their lien
serves only as collateral and does not in any way vest ownership of property to
plaintiffs. No express trust was created. Express trusts are intentionally created by the
direct and positive acts of the settlor or the trustor - by some writing, deed, or will or
oral declaration. It is created not necessarily by some written words, but by the direct
and positive acts of the parties. The creation of an express trust must be manifested
with reasonable certainty and cannot be inferred from loose and vague declarations
or from ambiguous circumstances susceptible of other interpretations. No such

reasonable certitude in the creation of an express trust obtains in the case at bar. In
fact, a careful scrutiny of the plain and ordinary meaning of the terms used in the
Minutes does not offer any indication that the parties thereto intended that Aznar, et
al., become beneficiaries under an express trust and that RISCO serve as trustor.
Indeed, we find that Aznar, et al., have no right to ask for the quieting of title of the
properties at issue because they have no legal and/or equitable rights over the
properties that are derived from the previous registered owner which is RISCO (which
has personality separate and distinct from those of its stockholders and other
corporations to which it may be connected.)
FACTS:
This case is consolidated with G.R. 172021, Merelo and Matias Aznar v.
PNB
Rural Insurance and Surety Company, Inc. (RISCO) ceased operation due to
business reverses. Anzar et al. desire to rehabilitate RISCO, they contributed
a total amount of P212,720.00. This was used to purchase 3 parcels of land
in Cebu, 2 in the Minicipality of Talisay and 1 in the District of Lahug, Cebu
City.
After the purchase of the lots, titles were issued in the name of RISCO.
The amount contributed by Aznar et al. constituted as liens and
encumbrances on the properties as annotated in the titles of said lots. Such
annotation was made pursuant to the Minutes of the Special Meeting of the
Board of Directors of RISCO on March 14, 1961, and a part of it says:
And that the respective contributions above-mentioned (Aznar et
al.) shall constitute as their lien or interest on the property described
above, if and when said property are titled in the name of RISCO,
subject to registration as their adverse claim in pursuance of the
Provision of Land Registration Act, until such time their respective
contributions are refunded to them completely
Thereafter, various subsequent annotations were made on the same titles,

including the Notice of Attachment and Writ of Execution both dated August
3,1962 in favour of Philippine National Bank (PNB).
As a result, a Certificate of Sale was issued in favor of PNB, being the lone
and highest bidder of the 3 parcels of land. This prompted Aznar et al. to file
the instant case seeking the quieting of their supposed title to the subject
properties.
Trial court ruled against PNB on the basis that there was an express trust
created over the subject properties whereby RISCO was the trustee and the
stockholders, Aznar, et al., were the beneficiaries.
15
Court of Appeals opined that the monetary contributions made by Aznar, et

al. to RISCO can only be characterized as a load secured by a lien on the
subjected lots, rather than an expressed trust.
ISSUE:
Whether or not there was a trust contract between RISCO and Aznar, et al.
HELD:
NO. At the outset, the Court agrees with the Court of Appeals that the agreement
contained in the Minutes of the Special Meeting of the RISCO Board of Directors held
on March 14, 1961 was a loan by the therein named stockholders to RISCO. Careful
perusal of the Minutes relied upon by Aznar et al. in their claim, showed that their
contributions shall constitute as lien or interest on the property. The term lien as
used in the Minutes is defined as "a discharge on property usually for the payment of
some debt or obligation. Hence, from the use of the word "lien" in the Minutes, We
find that the money contributed by Aznar et al. was in the nature of a loan, secured by
their liens and interests duly annotated on the titles. The annotation of their lien
serves only as collateral and does not in any way vest ownership of property to
plaintiffs.
We are not persuaded by the contention of Aznar, et al., that the language of the
subject Minutes created an express trust.
Trust is the right to the beneficial enjoyment of property, the legal title to which is
vested in another. It is a fiduciary relationship that obliges the trustee to deal with the
property for the benefit of the beneficiary. Express trusts are intentionally created by
the direct and positive acts of the settlor or the trustor - by some writing, deed, or will
or oral declaration. It is created not necessarily by some written words, but by the
direct and positive acts of the parties. The creation of an express trust must be
manifested with reasonable certainty and cannot be inferred from loose and vague
declarations or from ambiguous circumstances susceptible of other interpretations.
No such reasonable certitude in the creation of an express trust obtains in the case at
bar. In fact, a careful scrutiny of the plain and ordinary meaning of the terms used in
the Minutes does not offer any indication that the parties thereto intended that
Aznar, et al., become beneficiaries under an express trust and that RISCO serve as
trustor. Indeed, we find that Aznar, et al., have no right to ask for the quieting of title of
the properties at issue because they have no legal and/or equitable rights over the
properties that are derived from the previous registered owner which is RISCO.
At most, what Aznar, et al. had was merely a right to be repaid the amount loaned to
RISCO. Unfortunately, the right to seek repayment or reimbursement of their
contributions used to purchase the subject properties is already barred by prescription
10 Years because it was based on a written contract (the minutes by the

Board of Directors) in 1961 and the quieting of the title suit was brought only
in 1998
WHEREFORE, the petition of Aznar, et al., in G.R. No. 172021 is DENIED for lack of
merit. The petition of PNB in G.R. No. 171805 is GRANTED. The Complaint,
docketed as Civil Case No. CEB-21511, filed by Aznar, et al., is hereby DISMISSED.
No costs.
Note: Unlike in express trusts and resulting implied trusts where a trustee cannot
acquire by prescription any property entrusted to him unless he repudiates the trust,
in constructive implied trusts, the trustee may acquire the property through
prescription even if he does not repudiate the relationship. It is then incumbent upon
the beneficiary to bring an action for reconveyance before prescription bars the same.
An action for reconveyance based on an implied or constructive trust must perforce
prescribe in ten years and not otherwise. A long line of decisions of this Court, and of
very recent vintage at that, illustrates this rule. Undoubtedly, it is now well-settled that
an action for reconveyance based on an implied or constructive trust prescribes in ten
years from the issuance of the Torrens title over the property. It has also been ruled
that the ten-year prescriptive period begins to run from the date of registration of the
deed or the date of the issuance of the certificate of title over the property.
==========================================================
IV.B.3 Classification of Property: According to Ownership
12. Republic v. East Silverlane
G.R. No. 186961 | February 20, 2012
SUMMARY:
East Silverlane filed with the RTC an application for land registration covering a parcel
of land situated in El Salvador, Misamis Oriental. Petitioner assails the registration
alleging that East Silverlane failed to prove that its predecessors-in-interest
possessed the subject property in the manner and for the length of time required
under Sec. 48 (b) of PLA and Sec. 14 of P.D. No. 1529. The Court set aside the
registration. (1) The random 23 Tax Declarations do not qualify as competent
evidence of actual possession and occupation. This type of intermittent and
sporadic assertion of alleged ownership does not prove open, continuous,
exclusive and notorious possession and occupation. Further, the claim of
ownership will not prosper on the basis of the tax declarations alone. It must be
coupled with proof of actual possession. (2) In the absence of evidence that the
4 y/o trees at the time the predecessor filed the Tax. Dec. on 1948 were planted
and cultivated by the predecessor herself, they will not suffice as evidence that
her possession commenced prior to June 12, 1945. Alternatively, assuming they
were planted and maintained, such can only be considered casual cultivation
16
considering the size of Area A. (3) Witness Vicente Ocos lacks personal knowledge
as to when the predecessors-in-interest of the respondent started to occupy the
subject property and admitted that his testimony was based on what he allegedly
gathered from East Silverlanes predecessors-in-interest and the owners of adjoining
lot. Moreover, he did not testify as to what specific acts of dominion or ownership
were performed by the predecessors-in-interest. (4) It is jurisprudentially clear that
the 30-year period of prescription for purposes of acquiring ownership and
registration of public land under Sec. 14(2) of P.D. No. 1529 only begins from
the moment the State expressly declares that the public dominion property is
no longer intended for public service or the development of the national wealth
or that the property has been converted into patrimonial.
FACTS:
The respondent East Silverlane Realty Development Corporation filed with the RTC
an application for land registration, covering a parcel of land situated in El Salvador,
Misamis Oriental and with an area of 9,794 square meters. East Silverlane purchased
the portion of the subject property consisting of 4,708 square meters (Area A) from
Francisca Oco pursuant to a Deed of Absolute Sale dated November 27, 1990 and
the remaining portion consisting of 5,086 square meters (Area B) from Rosario U. Tan
Lim, et al. pursuant to a Deed of Partial Partition with Deed of Absolute Sale dated
April 11, 1991. It was claimed that East Silverlanes predecessors-in-interest had
been in open, notorious, continuous and exclusive possession of the subject property
since June 12, 1945. RTC granted the petition for registration of the land. On appeal
by the petitioner Republic of the Philippines, the CA affirmed the decision.
The petitioner assails the CA decision, alleging that East Silverlane failed to prove
that its predecessors-in-interest possessed the subject property in the manner and for
the length of time required under Sec. 48 (b) of C.A. No. 141, or the Public Land Act
(PLA), and Sec. 14 of P.D. No. 1529, or the Property Registration Decree (P.D. No.
1529). Further, East Silverlane did not present a credible and competent witness to
testify on the specific acts of ownership performed by its predecessors-in-interest on
the subject property. Its sole witness, Vicente Oco, can hardly be considered a
credible and competent witness as he is its liaison officer and he is not related in any
way to East Silverlanes predecessors-in-interest. That coconut trees were planted on
the subject property only shows casual or occasional cultivation and does not qualify
as possession under a claim of ownership.
ISSUE:
Whether East Silverlane has proven itself entitled to the benefits of the PLA and P.D.
No. 1529 on confirmation of imperfect or incomplete titles
HELD:
No. P.D. No. 1529, which was enacted on June 11, 1978, codified all the laws relative
to the registration of property. Section 14 thereof partially provides:
Section 14. Who may apply. The following persons may file in the
proper Court of First Instance an application for registration of title to land,
whether personally or through their duly authorized representatives:
(1) Those who by themselves or through their predecessors-ininterest have been in open, continuous, exclusive and notorious possession
and occupation of alienable and disposable lands of the public domain under
a bona fide claim of ownership since June 12, 1945, or earlier.
(2) Those who have acquired ownership of private lands by
prescription under the provision of existing laws.
xx
Sec. 14(1) and Sec. 14(2) are clearly different. Sec. 14(1) covers alienable and
disposable land while Sec. 14(2) covers private property. The distinction between
the two provisions lies with the inapplicability of prescription to alienable and
disposable lands. Sec. 14(2) puts into operation the entire regime of
prescription under the Civil Code, a fact which does not hold true with respect
to Sec. 14(1).
Property is either part of the public domain or privately owned. Under Article 420 of
the Civil Code, the following properties are of public dominion: (a) Those
intended for public use, such as roads, canals, rivers, torrents, ports and bridges
constructed by the State, banks, shores, roadsteads and others of similar character;
and (b) Those which belong to the State, without being for public use, and are
intended for some public service or for the development of the national wealth. All
other properties of the State, which is not of the character mentioned in Article 420 is
patrimonial property, hence, susceptible to acquisitive prescription.
In Heirs of Malabanan, this Court ruled that Article 422 of the Civil Code states that
[p]roperty of public dominion, when no longer intended for public use or for
public service, shall form part of the patrimonial property of the State. It is this
provision that controls how public dominion property may be converted into
patrimonial property susceptible to acquisition by prescription. After all, Article
420 (2) makes clear that those property which belong to the State, without being for
public use, and are intended for some public service or for the development of the
national wealth are public dominion property. For as long as the property belongs
to the State, although already classified as alienable or disposable, it remains
property of the public dominion if when it is intended for some public service or
for the development of the national wealth.
17
Accordingly, It is only when such alienable and disposable lands are expressly
declared by the State to be no longer intended for public service or for the
development of the national wealth that the period of acquisitive prescription
can begin to run. Without such express declaration, the property, even if
classified as alienable or disposable, remains property of the public dominion,
pursuant to Article 420(2), and thus incapable of acquisition by prescription.
Such declaration shall be in the form of a law duly enacted by Congress or a
Presidential Proclamation in cases where the President is duly authorized by
law.
In other words, for one to invoke the provisions of Sec. 14(2) and set up
acquisitive prescription against the State, it is primordial that the status of the
property as patrimonial be first established. Furthermore, the period of
possession preceding the classification of the property as patrimonial cannot
be considered in determining the completion of the prescriptive period.
It is explicit under Sec. 14(1) that the possession and occupation required to acquire
an imperfect title over an alienable and disposable public land must be open,
continuous, exclusive and notorious in character. The law speaks of possession
and occupation. Since these words are separated by the conjunction and, the
clear intention of the law is not to make one synonymous with the other.
Possession is broader than occupation because it includes constructive
possession. When, therefore, the law adds the word occupation, it seeks to
delimit the all encompassing effect of constructive possession. Taken together
with the words open, continuous, exclusive and notorious, the
word occupation serves to highlight the fact that for an applicant to qualify, his
possession must not be a mere fiction. Actual possession of a 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.
On the other hand, Sec. 14(2) is silent as to the required nature of possession and
occupation, thus, requiring a reference to the relevant provisions of the Civil Code on
prescription. And under Article 1118 thereof, possession for purposes of
prescription must be in the concept of an owner, public, peaceful and
uninterrupted. In Heirs of Marcelina Arzadon-Crisologo v. Raon, the Court
expounded that possession is open when it is patent, visible, apparent, notorious
and not clandestine. It is continuous when uninterrupted, unbroken and not
intermittent or occasional; exclusive when the adverse possessor can show
exclusive dominion over the land and an appropriation of it to his own use and
benefit; and notorious when it is so conspicuous that it is generally known and
talked of by the public or the people in the neighborhood. The party who asserts
ownership by adverse possession must prove the presence of the essential elements
of acquisitive prescription.
In the case at bar, the Court is not satisfied with the evidence presented to prove
compliance with the possession required either under Sec. 14(1) or 14(2). First, the
23 Tax Declarations covering Area B for a claimed possession of more than 46 years
18
(1948-1994) do not qualify as competent evidence of actual possession and

occupation. They covered random years (1948, 1957, 1963, 1969, etc.). This type of
intermittent and sporadic assertion of alleged ownership does not prove open,
continuous, exclusive and notorious possession and occupation. In any event,
in the absence of other competent evidence, tax declarations do not
conclusively establish either possession or declarants right to registration of
title. Moreover, the claim of ownership will not prosper on the basis of the tax
declarations alone. It is only when these tax declarations are coupled with proof
of actual possession of the property that they may become the basis of a claim
of ownership. In the absence of actual public and adverse possession, the
declaration of the land for tax purposes does not prove ownership. A person who
seeks the registration of title to a piece of land on the basis of possession by
himself and his predecessors-in-interest must prove his claim by clear and
convincing evidence, i.e. he must prove his title and should not rely on the
absence or weakness of the evidence of the oppositors.
public service or the development of the national wealth or that the property
has been converted into patrimonial.
Second, that the coconut trees were 4 y/o at the time Agapita Claudel filed a Tax
Declaration in 1948 will not suffice as evidence that her possession commenced prior
to June 12, 1945, in the absence of evidence that she planted and cultivated
them. Alternatively, assuming that Agapita Claudel planted and maintained these
trees, such can only be considered casual cultivation considering the size of
Area A. On the other hand, that Jacinto Tan Lay Cho possessed Area B in the
concept of an owner on or prior to June 12, 1945 cannot be assumed from his
1948 Tax Declaration.
Short Facts:
Diaz and Timbol filed this petition for declaratory relief assailing the validity of the
impending imposition of VAT by the BIR on the collections of tollway operators. The
government avers that the NIRC imposes VAT on all kinds of services of franchise
grantees, including tollway operations, except where the law provides otherwise.
Petitioners alleged that a toll fee is a "users tax," not a sale of services and that to
impose VAT on toll fees would amount to a tax on public service. They base this
argument in MIAA v. Court of Appeals wherein it was alleged that:
Third, that plants were on the subject property without any evidence that it was East
Silverlanes predecessors-in-interest who planted them and that actual cultivation or
harvesting was made does not constitute well-nigh incontrovertible evidence of actual
possession and occupation.
The operation by the government of a tollway does not change the character of the
road as one for public use. Someone must pay for the maintenance of the road, either
the public indirectly through the taxes they pay the government, or only those among
the public who actually use the road through the toll fees they pay upon using the
road. The tollway system is even a more efficient and equitable manner of taxing the
public for the maintenance of public roads.
Fourth, witness Vicente Ocos lacks personal knowledge as to when the

predecessors-in-interest of the respondent started to occupy the subject property and
admitted that his testimony was based on what he allegedly gathered from East
Silverlanes predecessors-in-interest and the owners of adjoining lot. Moreover, he
did not testify as to what specific acts of dominion or ownership were performed by
the predecessors-in-interest and if indeed they did. He merely made a general claim
that they came into possession before World War II, which is a mere conclusion of
law and not factual proof of possession, and therefore unavailing and cannot suffice.
Finally, that East Silverlanes application was filed after only four years from the time
the subject property may be considered patrimonial by reason of the DARs October
26, 1990 Order shows lack of possession whether for ordinary or extraordinary
prescriptive period. It is jurisprudentially clear that the 30-year period of
prescription for purposes of acquiring ownership and registration of public
land under Sec. 14(2) of P.D. No. 1529 only begins from the moment the State
expressly declares that the public dominion property is no longer intended for
While the subject land was supposedly declared alienable and disposable on
December 31, 1925 per the April 18, 1997 Certification and July 1, 1997 Report of the
CENRO, the DAR converted the same from agricultural to industrial only on October
16, 1990. Also, it was only in 2000 that the Municipality of El Salvador passed a
Zoning Ordinance, including the subject property in the industrial zone. Therefore, it
was only in 1990 that the subject property had been declared patrimonial and it is
only then that the prescriptive period began to run.
13. Diaz v. Sec. of Finance
Petitioner: Renato V. Diaz; Aurora Ma. F. Timbol
Respondent: Secretary of Finance; Commissioner of Internal Revenue
The charging of fees to the public does not determine the character of the property
whether it is for public dominion or not. Article 420 of the Civil Code defines property
of public dominion as "one intended for public use." Even if the government collects
toll fees, the road is still "intended for public use" if anyone can use the road under the
same terms and conditions as the rest of the public. The charging of fees, the
limitation on the kind of vehicles that can use the road, the speed restrictions and
other conditions for the use of the road do not affect the public character of the road.
The terminal fees MIAA charges to passengers, as well as the landing fees MIAA
charges to airlines, constitute the bulk of the income that maintains the operations of
MIAA. The collection of such fees does not change the character of MIAA as an
airport for public use. Such fees are often termed users tax. This means taxing those
among the public who actually use a public facility instead of taxing all the public
including those who never use the particular public facility. A users tax is more
equitable a principle of taxation mandated in the 1987 Constitution.
As can be seen, the discussion in the MIAA case on toll roads and toll fees was
made, not to establish a rule that tollway fees are users tax, but to make the point
that airport lands and buildings are properties of public dominion and that the
collection of terminal fees for their use does not make them private properties. Tollway
fees are not taxes. Indeed, they are not assessed and collected by the BIR and do
not go to the general coffers of the government.
19
words used in the statute; and that the imposition of VAT on tollway operations has
been the subject as early as 2003 of several BIR rulings and circulars.
In their reply to the governments comment, petitioners point out that tollway operators
cannot be regarded as franchise grantees under the NIRC since they do not hold
legislative franchises.
Issue: May toll fees collected by tollway operators be subject to VAT? YES.
It would of course be another matter if Congress enacts a law imposing a users tax,
collectible from motorists, for the construction and maintenance of certain roadways.
The tax in such a case goes directly to the government for the replenishment of
resources it spends for the roadways. This is not the case here. What the government
seeks to tax here are fees collected from tollways that are constructed, maintained,
and operated by private tollway operators at their own expense under the build,
operate, and transfer scheme that the government has adopted for expressways.
Except for a fraction given to the government, the toll fees essentially end up as
earnings of the tollway operators. Court ruled in favor of government. Toll Fees are
subject to VAT.
Facts:
Petitioners Renato V. Diaz and Aurora Ma. F. Timbol filed this petition for declaratory
relief assailing the validity of the impending imposition of VAT by the BIR on the
collections of tollway operators.
Petitioners allege that the BIR attempted during the administration of President Gloria
Macapagal-Arroyo to impose VAT on toll fees. The imposition was deferred, however,
in view of the consistent opposition of Diaz and other sectors to such move. But, upon
President Benigno C. Aquino IIIs assumption of office in 2010, the BIR revived the
idea and would impose the challenged tax on toll fees beginning August 16, 2010
unless judicially enjoined.
Petitioners hold the view that Congress did not, when it enacted the NIRC, intend to
include toll fees within the meaning of "sale of services" that are subject to VAT; that a
toll fee is a "users tax," not a sale of services; that to impose VAT on toll fees would
amount to a tax on public service; and that, since VAT was never factored into the
formula for computing toll fees, its imposition would violate the non-impairment clause
of the constitution.
On August 13, 2010 the Court issued a temporary restraining order (TRO), enjoining
the implementation of the VAT. The Court required the government, represented by
respondents Cesar V. Purisima, Secretary of the Department of Finance, and Kim S.
Jacinto-Henares, Commissioner of Internal Revenue, to comment on the petition
within 10 days from notice.
The government avers that the NIRC imposes VAT on all kinds of services of
franchise grantees, including tollway operations, except where the law provides
otherwise; that the Court should seek the meaning and intent of the law from the
Held:
(1) VAT is imposed on all kinds of services and tollway operators who are engaged
in constructing, maintaining, and operating expressways are no different from lessors
of property, transportation contractors, etc. Not only do they fall under the broad term
all kinds of services but also come under those described as all other franchise
grantees which is not confined only to legislative franchise grantees since the law
does not distinguish. They are also not a franchise grantee under Section 119 which
would have made them subject to percentage tax and not VAT. Neither are the
services part of the enumeration under Section 109 on VAT-exempt transactions.
(2) The toll fee is not a users tax and thus it is permissible to impose a VAT on the
said fee. The MIAA case does not apply wherein it has been provided therein that:
The operation by the government of a tollway does not change the character of the
road as one for public use. Someone must pay for the maintenance of the road, either
the public indirectly through the taxes they pay the government, or only those among
the public who actually use the road through the toll fees they pay upon using the
road. The tollway system is even a more efficient and equitable manner of taxing the
public for the maintenance of public roads.
The charging of fees to the public does not determine the character of the property
whether it is for public dominion or not. Article 420 of the Civil Code defines property
of public dominion as "one intended for public use." Even if the government collects
toll fees, the road is still "intended for public use" if anyone can use the road under the
same terms and conditions as the rest of the public. The charging of fees, the
limitation on the kind of vehicles that can use the road, the speed restrictions and
other conditions for the use of the road do not affect the public character of the road.
The terminal fees MIAA charges to passengers, as well as the landing fees MIAA
charges to airlines, constitute the bulk of the income that maintains the operations of
MIAA. The collection of such fees does not change the character of MIAA as an
airport for public use. Such fees are often termed users tax. This means taxing those
among the public who actually use a public facility instead of taxing all the public
including those who never use the particular public facility. A users tax is more
equitable a principle of taxation mandated in the 1987 Constitution.
Petitioners assume that what the Court said above, equating terminal fees to a "users
tax" must also pertain to tollway fees. But the main issue in the MIAA case was
20
whether or not Paraaque City could sell airport lands and buildings under MIAA
administration at public auction to satisfy unpaid real estate taxes. Since local
governments have no power to tax the national government, the Court held that the
City could not proceed with the auction sale. MIAA forms part of the national
government although not integrated in the department framework." Thus, its airport
lands and buildings are properties of public dominion beyond the commerce of man
under Article 420(1) of the Civil Code and could not be sold at public auction.
Consequently, VAT on tollway operations is not really a tax on the tollway user, but on
the tollway operator. Under Section 105 of the Code, VAT is imposed on any person
who, in the course of trade or business, sells or renders services for a fee. In other
words, the seller of services, who in this case is the tollway operator, is the person
liable for VAT. The latter merely shifts the burden of VAT to the tollway user as part of
the toll fees.
As can be seen, the discussion in the MIAA case on toll roads and toll fees was
made, not to establish a rule that tollway fees are users tax, but to make the point
that airport lands and buildings are properties of public dominion and that the
collection of terminal fees for their use does not make them private properties. Tollway
fees are not taxes. Indeed, they are not assessed and collected by the BIR and do
not go to the general coffers of the government.
For this reason, VAT on tollway operations cannot be a tax on tax even if toll fees
were deemed as a "users tax." VAT is assessed against the tollway operators gross
receipts and not necessarily on the toll fees. Although the tollway operator may shift
the VAT burden to the tollway user, it will not make the latter directly liable for the VAT.
The shifted VAT burden simply becomes part of the toll fees that one has to pay in
order to use the tollways.
It would of course be another matter if Congress enacts a law imposing a users tax,
collectible from motorists, for the construction and maintenance of certain roadways.
The tax in such a case goes directly to the government for the replenishment of
resources it spends for the roadways. This is not the case here. What the government
seeks to tax here are fees collected from tollways that are constructed, maintained,
and operated by private tollway operators at their own expense under the build,
operate, and transfer scheme that the government has adopted for expressways.
Except for a fraction given to the government, the toll fees essentially end up as
earnings of the tollway operators.
14. City of Pasig v. Republic
In sum, fees paid by the public to tollway operators for use of the tollways, are not
taxes in any sense. A tax is imposed under the taxing power of the government
principally for the purpose of raising revenues to fund public expenditures. Toll fees,
on the other hand, are collected by private tollway operators as reimbursement for the
costs and expenses incurred in the construction, maintenance and operation of the
tollways, as well as to assure them a reasonable margin of income. Although toll fees
are charged for the use of public facilities, therefore, they are not government
exactions that can be properly treated as a tax. Taxes may be imposed only by the
government under its sovereign authority, toll fees may be demanded by either the
government or private individuals or entities, as an attribute of ownership.
Parenthetically, VAT on tollway operations cannot be deemed a tax on tax due to the
nature of VAT as an indirect tax. In indirect taxation, a distinction is made between the
liability for the tax and burden of the tax. The seller who is liable for the VAT may shift
or pass on the amount of VAT it paid on goods, properties or services to the buyer. In
such a case, what is transferred is not the sellers liability but merely the burden of the
VAT.
Thus, the seller remains directly and legally liable for payment of the VAT, but the
buyer bears its burden since the amount of VAT paid by the former is added to the
selling price. Once shifted, the VAT ceases to be a tax and simply becomes part of the
cost that the buyer must pay in order to purchase the good, property or service.
August 24, 2011

Petitioners: City of Pasig by the City Treasurer and City Assessor
Respondent: Republic of the Philippines represented by the PCGG
Ponente: CARPIO, J.
Short Facts/Doctrines:
Mid-Pasig Land Development Corporation (MPLDC) owned 2 parcels of land in Pasig
City. In 1986, Jose Y. Campos, the registered owner of MPLDC, voluntarily
surrendered MPLDC to the government since it was admitted as part of the ill-gotten
wealth of the Marcoses. Then from 2002-2005, Pasig City sent notices of assessment
to MPLDC to demand payment of real property taxes from the said properties. PCGG
filed with the RTC a petition for prohibition with a prayer for issuance of a TRO to
enjoin petitioner Pasig City from auctioning the properties and from collecting real
property tax. PCGG is claiming that the subject properties were exempt from taxes
because they are owned by the government. Both the RTC and the CA (after
reversing its initial decision) ruled in favor of the PCGG. But the SC ultimately held
that:
Article 420 of the Civil Code classifies as properties of public dominion those
that are intended for public use, such as roads, canals, rivers, torrents, ports
and bridges constructed by the State, banks, shores, roadsteads and those that
are intended for some public service or for the development of the national
wealth. Properties of public dominion are not only exempt from real
estate tax, they are exempt from sale at public auction. In Heirs of
Mario Malabanan v. Republic, the Court held that, It is clear that property of
public dominion, which generally includes property belonging to the State,
cannot be x x x subject of the commerce of man.
In the present case, the parcels of land are not properties of public dominion because
they are not intended for public use, such as roads, canals, rivers, torrents, ports and
bridges constructed by the State, banks, shores, roadsteads. Neither are they
intended for some public service or for the development of the national wealth.
MPLDC leases portions of the properties to different business establishments. Thus,
the portions of the properties leased to taxable entities are not only subject to real
estate tax, they can also be sold at public auction to satisfy the tax delinquency.
In sum, only those portions of the properties leased to taxable entities are subject to
real estate tax for the period of such leases. Pasig City must, therefore, issue to
respondent new real property tax assessments covering the portions of the properties
leased to taxable entities. If the Republic of the Philippines fails to pay the real
property tax on the portions of the properties leased to taxable entities, then such
portions may be sold at public auction to satisfy the tax delinquency.
Facts
Mid-Pasig Land Development Corporation (MPLDC) owned two parcels of

land in Pasig City. In 1986, the registered owner of MPLDC, Jose Y. Campos
(Campos), voluntarily surrendered MPLDC to the Republic of the Philippines.
From 2002-2005 the Pasig City Assessor Office sent notices of delinquency
and final demand of payment for real property taxes due from the said
properties. However, the MPLDC alleged that it was exempt from paying
taxes from 1987 onwards (as it was already surrendered to the government
at that time).
Nevertheless, MPLDC still received 2 warrants of levy on the properties.
Hence, respondent Republic of the Philippines, through the PCGG, filed with
the RTC a petition for prohibition with prayer for issuance of a TRO or writ of
preliminary injunction to enjoin petitioner Pasig City from auctioning the
properties and from collecting real property tax.
Issue:
Whether the parcels of land owned by the government are exempted from real
property taxes?
Ruling:
It depends. If the properties are classified as part of the public dominion, then such
properties are exempt from RPT. If not, or the beneficial use of the properties belong
to a taxable person, then the property is subject to RPT.
Ratio:
Article 420 of the Civil Code classifies as properties of public dominion those
that are intended for public use, such as roads, canals, rivers, torrents, ports
and bridges constructed by the State, banks, shores, roadsteads and those that
are intended for some public service or for the development of the national
wealth. Properties of public dominion are not only exempt from real
estate tax, they are exempt from sale at public auction. In Heirs of
Mario Malabanan v. Republic, the Court held that, It is clear that property of
public dominion, which generally includes property belonging to the State,
cannot be x x x subject of the commerce of man.
21
In the present case, the parcels of land are not properties of public dominion because
they are not intended for public use, such as roads, canals, rivers, torrents, ports and
bridges constructed by the State, banks, shores, roadsteads. Neither are they
intended for some public service or for the development of the national wealth.
MPLDC leases portions of the properties to different business establishments. Thus,
the portions of the properties leased to taxable entities are not only subject to real
estate tax, they can also be sold at public auction to satisfy the tax delinquency.
Therefore, only those portions of the properties leased to taxable entities are subject
to real estate tax for the period of such leases. Pasig City must, therefore, issue to
respondent new real property tax assessments covering the portions of the properties
leased to taxable entities. If the Republic of the Philippines fails to pay the real
property tax on the portions of the properties leased to taxable entities, then such
portions may be sold at public auction to satisfy the tax delinquency.
In short, only those portions of the properties leased to taxable entities are subject to
real estate taxes for the period of such leases and may also be sold at public
auctioned to satisfy the tax delinquency. While it was established that the owner of the
properties is now clearly the Republic of the Philippines given the voluntary surrender,
the Local Government Code clearly states that the exemption will not apply when the
beneficial use thereof has been granted, for consideration or otherwise, to a taxable
person. The Court cited several cases to support the decision such as Philippine
Fisheries, GSIS, MIAA, and Lung Center.
Disposition:
Petition partly granted and declares VOID the real property tax assessment issued by
Pasig City on the subject properties of MPLDC, the warrants of levy on the properties,
and the auction sale. Pasig City is DIRECTED to issue to respondent new real
property tax assessments covering only the portions of the properties actually leased
to taxable entities, and only for the period of such leases.
15. Dream Village v. BCDA
Summary:
Dream Village asserts ownership over a large tract of land in Taguig City (Fort
Bonifacio), on the basis of acquisitive prescription. BCDA, however, alleges that it has
title over the subject land as the same is part of grant provided under RA 7227.
Dream Village filed letter-complaint before the COSLAP. BCDA questions COSLAPs
jurisdiction. Issue: Whether the area occupied by Dream Village is susceptible of
acquisition by prescription. Held: NO. Fort Bonifacio remains property of public
dominion of the State, because although declared alienable and disposable, it is
reserved for some public service or for the development of the national wealth, in this
case, for the conversion of military reservations in the country to productive civilian
uses. Needless to say, the acquisitive prescription asserted by Dream Village has not
even begun to run.
22
Facts:
R.A. No. 7227.
Petitioner Dream Village Neighborhood Association, Inc. (Dream Village) claims to

represent more than 2,000 families who have been occupying a 78,466square meter
lot in Western Bicutan, Taguig City since 1985 in the concept of owners continuously,
exclusively and notoriously. The lot used to be part of the Hacienda de Maricaban
(Maricaban), owned by Dolores Casal y Ochoa, covered by an OCT.
The COSLAP received the final report Regional Technical Director for Lands of
DENR, stating that area occupied by Dream Village is actually outside the lot of
BCDA. The COSLAP resolved that Dream Village lies outside of BCDA.
Following the purchase of Maricaban by the government of the USA early in the
American colonial period, to be converted into the military reservation known as Fort
William Mckinley, TCT was issued in the name of the USA. The US government later
transferred 30 has. of Maricaban to the Manila Railroad Company. 2 TCTs were
issued (1) covering 30 has. under name of MRC (2) remaining portion of Maricaban
under name of USA.
The USA the formally ceded Fort William Mckinley to the Republic of the Philippines
(Republic), and almost 2 years later, TCT was issued in the name of the Republic.
President Carlos P. Garcia issued Proclamation No. 423 withdrawing from sale or
settlement the tracts of land within Fort William Mckinley, now renamed Fort
Bonifacio, and reserving them for military purposes.
In 1986, President Ferdinand E. Marcos issued Proclamation No. 2476 declaring
certain portions of Fort Bonifacio alienable and disposable, thus allowing the sale to
the settlers of home lots in Upper Bicutan, Lower Bicutan, Signal Village, and Western
Bicutan. President Corazon C. Aquino issued Proclamation No. 172 by limiting to the
areas in Western Bicutan open for disposition.
In 1992, R.A. No. 7227 was passed creating the Bases Conversion and Development
Authority (BCDA) to oversee and accelerate the conversion of Clark and Subic
military reservations and their extension camps to productive civilian uses. Section 8
of the said law provides that the capital of the BCDA will be provided from sales
proceeds or transfers of lots in nine (9) military camps in Metro Manila, including 723
has. of Fort Bonifacio. Titles to the camps were transferred to the BCDA for this
purpose.
Now charging the BCDA of wrongfully asserting title to Dream Village and unlawfully
subjecting its members to summary demolition, resulting in unrest and tensions
among the residents, in 1999, the latter filed a lettercomplaint with the COSLAP to
seek its assistance in the verification survey of the subject 78,466 sq m property.
They claim that they have been occupying the area for thirty (30) years in the
concept of owners continuously, exclusively and notoriously for several years. Dream
Village, thus, asserts that the lot is not among those transferred to the BCDA under
R.A. No. 7227, and therefore patent applications by the occupants should be
processed by the Land Management Bureau (LMB).
Respondent BCDA in its Answer questioned the jurisdiction of the COSLAP to hear
Dream Villages complaint, while asserting its title to the subject property pursuant to
On Petition for Review to the CA, the BCDA argued that the dispute is outside the
jurisdiction of the COSLAP because of the lands history of private ownership and
because it is registered under an indefeasible Torrens title; that the land occupied by
Dream Village belongs to BCDA. The COSLAP, on the other hand, maintained that
Section 3(2)(e) of E.O. No. 561 provides that it may assume jurisdiction and resolve
land problems or disputes in other similar land problems of grave urgency and
magnitude, and the present case is one such problem.
The CA in its Decision ruled that the COSLAP has no jurisdiction over the complaint
because the question of whether Dream Village is within the areas declared as
available for disposition in Proclamation No. 172 is beyond its competence to
determine.
Hence, this petition for review on certiorari.
Issue:
Whether the area occupied by Dream Village is susceptible of acquisition by
prescription
Held: NO
While property of the State or any of its subdivisions patrimonial in character
may be the object of prescription, those intended for some public service or
for the development of the national wealth are considered property of public
dominion and therefore not susceptible to acquisition by prescription.
Article 1113 of the Civil Code provides that property of the State or any of its
subdivisions not patrimonial in character shall not be the object of prescription.
Articles 420 and 421 identify what is property of public dominion and what is
patrimonial property.
Heirs of Mario Malabanan v. Republic, it was pointed out that from the moment R.A.
No. 7227 was enacted, the subject military lands in Metro Manila became alienable
and disposable. The Court noted that the purpose of the law can be tied to either
public service or the development of national wealth under Article 420(2) of the
Civil Code, such that the lands remain property of the public dominion, albeit their
status is now alienable and disposable. The Court then explained that it is only upon
their sale to a private person or entity as authorized by the BCDA law that they
become private property and cease to be property of the public dominion.
Thus, under Article 422 of the Civil Code, public domain lands become patrimonial
property only if there is a declaration that these are alienable or disposable, together
with an express government manifestation that the property is already patrimonial or
no longer retained for public service or the development of national wealth. Only
when the property has become patrimonial can the prescriptive period for the
acquisition of property of the public dominion begin to run. Also under Section 14(2) of
Presidential Decree (P.D.) No. 1529, it is provided that before acquisitive prescription
can commence, the property sought to be registered must not only be classified as
alienable and disposable, it must also be expressly declared by the State that it is no
longer intended for public service or the development of the national wealth, or that
the property has been converted into patrimonial. Absent such an express declaration
by the State, the land remains to be property of public dominion.
Fort Bonifacio remains property of public dominion of the State, because although
declared alienable and disposable, it is reserved for some public service or for the
development of the national wealth, in this case, for the conversion of military
reservations in the country to productive civilian uses. Needless to say, the acquisitive
prescription asserted by Dream Village has not even begun to run.
Pronouncement on Other Matters:
1. The BCDA holds title to Fort Bonifacio.
The Court ruled that the BCDAs aforesaid titles over Fort Bonifacio are valid,
indefeasible and beyond question, since TCT was cancelled in favor of BCDA
pursuant to an explicit authority under R.A. No. 7227, the legal basis for BCDAs
takeover and management of the subject lots.
2. Dream Village sits on the abandoned C5 Road, which lies outside the area
declared in Proclamation Nos. 2476 and 172 as alienable and disposable.
3. Ownership of a land registered under a Torrens title cannot be lost by
prescription or adverse possession.
Section 47 of P.D. No. 1529, the Property Registration Decree, expressly provides
that no title to registered land in derogation of the title of the registered owner shall be
acquired by prescription or adverse possession. And, although the registered
landowner may still lose his right to recover the possession of his registered property
by reason of laches, nowhere has Dream Village alleged or proved laches.
4. The subject property having been expressly reserved for a specific public
purpose, the COSLAP cannot exercise jurisdiction over the complaint of the
Dream Village settlers.
In contrast, the present petition involves land titled to and managed by a government
agency which has been expressly reserved by law for a specific public purpose other
than for settlement. Thus, the law does not vest jurisdiction on the COSLAP over any
23
land dispute or problem, but it has to consider the nature or classification of the land
involved, the parties to the case, the nature of the questions raised, and the need for
immediate and urgent action thereon to prevent injuries to persons and damage or
destruction to property.
Petition denied.
16. Director of Lands v. Meralco
Petitioner: THE DIRECTOR OF LANDS
Respondent: MANILA ELECTRIC COMPANY and HON. RIZALINA BONIFACIO
VERA
Ponente: Gutierrez J.
This is a very short case. Meralco applied for a registration of a parcel of land which it
acquired by purchase from a private citizen vendor. The latter previously acquired the
land from his predecessors-in-interest who claimed open, exclusive, adverse
possession of such land for 30 years. The Director of Lands challenged this
application claiming that a corporation like Meralco cannot apply for registration of title
to land without circumventing the Constitution. The Court applied stare decisis
through its previous decisions and ruled in favor of Meralco. Accordingly, registration
thereunder would not confer title, but simply recognize a title already vested. The
proceedings would not originally convert the land from public to private land, but only
confirm such a conversion already affected from the moment the required period of
possession became complete.
Facts:
Manila Electric Company filed an amended application for registration of a

parcel of land located in Taguig, Metro Manila on December 4, 1979.
On August 17, 1976, applicant acquired the land applied for registration by
purchase from Ricardo Natividad who in turn acquired the same from his
father Gregorio Natividad as evidenced by a Deed of Original Absolute Sale
executed on December 28, 1970.
Applicant's predecessors-in-interest have possessed the property under the
concept of an owner for more than 30 years. The property was declared for
taxation purposes under the name of the applicant.
On May 29, 1981 respondent Judge rendered a decision ordering the
registration of the property in the name of the private respondent. The
Director of Lands interposed this petition raising the issue of whether or not a
corporation may apply for registration of title to land. The Court gave the
petition due course.
Issue: W/N MERALCO may apply for registration of title to land which has been
acquired through open, exclusive and undisputed possession.
Ratio: YES.
Held:
The legal issue raised by the petitioner Director of Lands has been squarely dealt with
in two recent cases The Director of Lands v. Intermediate Appellate Court and Acme
Plywood & Veneer Co., Inc. and The Director of Lands v. Hon. Bengzon and
Dynamarine Corporation. There can be no different answer in the case at bar.
In the Acme decision, this Court upheld the doctrine that "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."
As the Court said in that case: Nothing can more
clearly demonstrate the logical inevitability of considering possession of public land
which is of the character and duration prescribed by statute as the equivalent of an
express grant from the State than the dictum of the statute itself that the possessor(s)
"x x x shall be conclusively presumed to have performed all the conditions
essential to a Government grant and shall be entitled to a certificate of title x x
x." No proof being admissible to overcome a conclusive presumption, confirmation
proceedings would in truth be little more than a formality, at the most limited to
ascertaining whether the possession claimed is of the required character and length
of time. Registration thereunder would not confer title, but simply recognize a
title already vested. The proceedings would not originally convert the land from
public to private land, but only confirm such a conversion already affected from
the moment the required period of possession became complete. Coming to the
case at bar, if the land was already private at the time Meralco bought it from
Natividad, then the prohibition in the 1973 Constitution against corporations holding
alienable lands of the public domain except by lease (1973 Const., Art. XIV, Sec. 11)
does not apply.
Petitioner, however, contends that a corporation is not among those that may apply
for confirmation of title under Section 48 of Commonwealth Act No. 141, the Public
Land Act. As ruled in the Acme case, the fact that the confirmation proceedings were
instituted by a corporation is simply another accidental circumstance, "productive of a
defect hardly more than procedural and in nowise affecting the substance and merits
of the right of ownership sought to be confirmed in said proceedings." Considering
that it is not disputed that the Natividads could have had their title confirmed, only a
rigid subservience to the letter of the law would deny private respondent the right to
register its property which was validly acquired.
Disposition: WHEREFORE, the petition is DENIED. The questioned decision of the
respondent Judge is AFFIRMED. SO ORDERED.
24
GUTIERREZ, JR., J.: DISSENTING OPINION

It is my view that Article XII, Section 3 of the Constitution which prohibits private
corporations or associations from holding alienable lands of the public domain except
by lease is circumvented when we allow corporations to apply for judicial confirmation
of imperfect titles to public land. I, therefore, reiterate my vote in Meralco v. Castro
Bartolome,(114 SCRA 799), Republic v. Villanueva and Iglesia ni Cristo (114 SCRA
875) and Director of Lands v. Intermediate Appellate Court (146 SCRA 509), and
accordingly, dissent from the majority opinion in this case.
==========================================================
IV.C.1 Ownership: Rights of Ownership/Limitations
17. Gabriel JR. v. Crisologo
Petitioners: Paul P. Gabriel, Jr., Ireneo C. Calwag, Thomas L. Tingga-An, and the
Heirs Of Juliet B. Pulkera
Respondent: Carmeling Crisologo
Summary:
Respondent Crisologo filed a complaint for Recovery of Possession and/or
Ownership with Damages against petitioners. Crisologo prayed that she be declared
in prior actual possession of the properties in dispute and that petitioners vacate the
same and demolish their houses therein. She alleged, among others, that she was
the registered owner of the subject parcels of land and that petitioners unlawfully
entered her properties by stealth, force and without her prior consent and knowledge.
Petitioners, on the other hand, raised the issue of ownership in their pleadings. They
mainly argue that Crisologos titles on the subject properties are void due to the
Supreme Court ruling in Republic v. Marcos (said case was later enacted into law,
P.D. No. 1271), and that they have been in open, actual, exclusive, notorious,
uninterrupted and continuous possession over the subject properties in good faith.
Issue: Who between petitioners and respondent Crisologo have a better right of
possession over the subject parcels of land? Held: Crisologo. Although Section 1 of
P.D. No. 127113 invalidated decrees of registration and certificates of title within the
Baguio Town site Reservation Case No. 1, GLRO Record No. 211, the nullity,
however, is not that sweeping. The said provision expressly states that "all certificates
of titles issued on or before July 31, 1973shall be considered valid and the lands
covered by them shall be deemed to have been conveyed in fee simple to the
registered owners" upon 1) showing proof that the land covered by the subject title is
not within any government, public or quasi-public reservation, forest, military or
otherwise, as certified by appropriating government agencies; and 2) compliance by
the titleholder with the payment to the Republic of the Philippines of the correct
assessed value of the land within the required period. In the case at bench, the
records show that the subject parcels of land were registered on August 24, 1967.
The titles are, thus, considered valid although subject to the conditions set. But
whether or not Crisologo complied with the said conditions would not matter because,
this would be a collateral attack on her registered titles.
Records show that Carmeling Crisologo (Crisologo), represented by her attorney-infact, Pedro Isican (Isican), filed her complaint for Recovery of Possession and/or
Ownership with Damages against Juliet B. Pulkera, Paul P. Gabriel, Ireneo C.
Calwag, and Thomas L. Tingga-an (petitioners) before the MTCC.
5.
6.
7.
8.
9.
She was the registered owner of two parcels of land with a total area of
approximately 2,000 square meters, described in, and covered by, two (2)
certificates of title TCT Nos. T-13935 and T-13936;
The properties were covered by an Assessment of Real Property;
The payments of realty taxes on the said properties were updated;
Sometime in 2006, she discovered that petitioners unlawfully entered,
occupied her properties by stealth, by force and without her prior consent
and knowledge, and constructed their houses thereon;
Upon discovery of their illegal occupation, her daughter, Atty. Carmelita
Crisologo, and Isican personally went to the properties and verbally
demanded that petitioners vacate the premises and remove their structures
thereon;
Petitioners begged and promised to buy the said properties for 3,500.00 per
square meter;
She gave petitioners time to produce the said amount, but they reneged on
their promise to buy them;
Petitioners refused to vacate the subject properties despite several
demands; that the petitioners knew full well that the subject premises they
were occupying were titled properties but they insisted on unlawfully holding
the same; and
She was unlawfully dispossessed and displaced from the subject properties
due to petitioners illegal occupation.
2.
Crisologo failed to comply with the conditions provided in Section 1 of P.D.

No. 1271 for the validation of said titles, hence, the titles were void;
Petitioners had been in open, actual, exclusive, notorious, uninterrupted, and
continuous possession of the subject land, in good faith; and
Crisologo was never in prior possession and had no valid title over the
subject land.
MTCC ruled in favor of Crisologo.

Petitioners could not question Crisologos titles over the subject parcels of
land in an ordinary civil action for recovery of possession because such
defense was a collateral attack which was prohibited under P.D. No. 1529,
otherwise known as the Property Registration Decree. Thus, it could not
inquire into the intrinsic validity of Crisologos titles.
RTC reversed MTCC.

1.
Petitioners assertion of the TCTs invalidity was not a collateral attack. It

cited the rulings in Republic v. Marcos, and Republic v. Marcos, which
perpetually prohibited the reopening of Civil Reservation Case No. 1, LRC
Rec. No. 211, and, therefore, the registration of parcels of lands. For said
reason, the titles of Crisologo were products of illegal proceedings nullified
by this Court.
CA reinstated MTCC.
1.
Crisologo was entitled to the possession of the subject parcels of land. Her
possession was established when she acquired the same by sale sometime
in 1967 and when the certificates of title covering the properties were
subsequently issued. Her payment of realty taxes due on the said properties
since 1969 further strengthened her claim of possession. Moreover, her
appointment of Isican as administrator of the subject properties and her offer
to sell the lots to the petitioners showed that she had control over the same.
Issue: Who between petitioners and respondent Crisologo have a better right of
possession over the subject parcels of land? Crisologo.
Petitioners countered that:

1.
5.
1.
Crisologo alleged that:
2.
3.
4.
3.
4.
Facts:
1.
25
Titles of Crisologo were products of Civil Registration Case No. 1, Record

211, which were declared void by the Supreme Court in Republic v. Marcos,
and reiterated in Republic v. Marcos;
Said case was later enacted into law, P.D. No. 1271, entitled "An Act
Nullifying Decrees of Registration and Certificates of Title within the Baguio
Town site Reservation Case No.1, GLRO Record No. 211, pursuant to Act
No. 931, as amended, but Considering as Valid Certain Titles of Lands that
are Alienable and Disposable Under Certain Conditions and For Other
Purposes" which took effect on December 22, 1977;
1.
Preliminary Discussion: Accion Publiciana: its nature and purpose
Also known as accion plenaria de posesion, accion publiciana is an ordinary civil

proceeding to determine the better right of possession of realty independently of title.
It refers to an ejectment suit filed after the expiration of one year from the accrual of
the cause of action or from the unlawful withholding of possession of the realty.
The objective of the plaintiffs in accion publiciana is to recover possession only, not
ownership. When parties, however, raise the issue of ownership, the court may pass
upon the issue to determine who between the parties has the right to possess the
property. This adjudication, nonetheless, is not a final and binding determination of

the issue of ownership; it is only for the purpose of resolving the issue of possession,
where the issue of ownership is inseparably linked to the issue of possession. The
adjudication of the issue of ownership, being provisional, is not a bar to an action
between the same parties involving title to the property. The adjudication, in short, is
not conclusive on the issue of ownership.12
2.
The Case is an accion publiciana.
In her complaint, Crisologo prayed that she be declared in prior actual possession of
the properties in dispute and that petitioners vacate the same and demolish their
houses therein. She alleged, among others, that she was the registered owner of the
subject parcels of land and that petitioners unlawfully entered her properties by
stealth, force and without her prior consent and knowledge. Clearly, she primarily
wanted to recover possession of the subject parcels of land from petitioners.
Hence, the case is an accion publiciana.
Nonetheless, the petitioners have raised the issue of ownership in their pleadings.
They mainly argue that Crisologos titles on the subject properties are void and that
they have been in open, actual, exclusive, notorious, uninterrupted and continuous
possession over the subject properties in good faith.
3.
The nullity of the decrees of registration and certificates of titles in

Section 1 of P.D. No. 1271 is not absolute.
Although Section 1 of P.D. No. 127113 invalidated decrees of registration and

certificates of title within the Baguio Town site Reservation Case No. 1, GLRO Record
No. 211, the nullity, however, is not that sweeping. The said provision expressly states
that "all certificates of titles issued on or before July 31, 1973shall be considered valid
and the lands covered by them shall be deemed to have been conveyed in fee simple
to the registered owners" upon 1) showing proof that the land covered by the subject
title is not within any government, public or quasi-public reservation, forest, military or
otherwise, as certified by appropriating government agencies; and 2) compliance by
the titleholder with the payment to the Republic of the Philippines of the correct
assessed value of the land within the required period.
In the case at bench, the records show that the subject parcels of land were
registered on August 24, 1967. The titles are, thus, considered valid although subject
to the conditions set. But whether or not Crisologo complied with the said conditions
would not matter because, this would be a collateral attack on her registered titles, as
would be discussed later.
At any rate, petitioners, as private individuals, are not the proper parties to question
the status of the respondents registered titles. Section 6 of P.D. No. 127114 expressly
states that the "Solicitor General shall institute such actions or suits as may be
necessary to recover possession of lands covered by all void titles not validated
under this Decree."
26
4.
The respondents certificates of title give her the better right to

possess the subject parcels of land.
It is settled that a Torrens title is evidence of indefeasible title to property in favor of

the person in whose name the title appears. It is conclusive evidence with respect to
the ownership of the land described therein. It is also settled that the titleholder is
entitled to all the attributes of ownership of the property, including possession. Thus,
in Arambulo v. Gungab, this Court declared that the "age-old rule is that the person
who has a Torrens title over a land is entitled to possession thereof."
The records show that TCT No. T-1393517 and TCT No. T-1393618 bear the name of
Carmeling P. Crisologo, as the registered owner. Petitioners do not dispute the fact
that she has a Torrens title over the subject parcels of land.
5.
The respondents Torrens certificates of title are immune from a

collateral attack.
As a holder of a Torrens certificate of title, the law protects Crisologo from a collateral
attack on the same. Section 48 of P.D. No. 1529, otherwise known as the Property
Registration Decree, provides that a certificate of title cannot be the subject of a
collateral attack. Thus: SEC. 48. Certificate not subject to collateral attack. A
certificate of title shall not be subject to collateral attack. It cannot be altered,
modified, or canceled except in a direct proceeding in accordance with law.
Registration of land under the Torrens system, aside from perfecting the title and
rendering it indefeasible after the lapse of the period allowed by law, also renders the
title immune from collateral attack. A collateral attack transpires when, in another
action to obtain a different relief and as an incident of the present action, an attack is
made against the judgment granting the title.
This manner of attack is to be distinguished from a direct attack against a judgment
granting the title, through an action whose main objective is to annul, set aside, or
enjoin the enforcement of such judgment if not yet implemented, or to seek recovery if
the property titled under the judgment had been disposed of. To permit a collateral
attack on respondents-plaintiffs' title is to water down the integrity and guaranteed
legal indefeasibility of a Torrens title.
The petitioners-defendants' attack on the validity of respondents-plaintiffs' title, by
claiming that fraud attended its acquisition, is a collateral attack on the title. It is an
attack incidental to their quest to defend their possession of the properties in an
"accion publiciana," not in a direct action whose main objective is to impugn the
validity of the judgment granting the title. This is the attack that possession of a
Torrens Title specifically guards against; hence, we cannot entertain, much less
accord credit to, the petitioners-defendants' claim of fraud to impugn the validity of the
respondents-plaintiffs' title to their property.
6.
As the lawful possessor, the respondent has the right to eject the
petitioners.
The Court agrees with the CA that the only question that needs to be resolved in this
suit to recover possession is who between the parties is entitled to the physical or
material possession of the subject parcels of land. Therefore, the foremost relevant
issue that needs to be determined here is simply possession, not ownership.
The testimonial and documentary evidence on record prove that Crisologo has a
preferred claim of possession over that of petitioners. It cannot be denied that she
bought the subject properties from the previous owner in 1967, which was why the
transfer certificates of title were subsequently issued in her name. Records further
show that she has been paying the realty taxes on the said properties since 1969.
She likewise appointed Isican as administrator of the disputed lands. More
importantly, there is no question that she offered to sell to petitioners the portions of
the subject properties occupied by them. Hence, she deserves to be respected and
restored to her lawful possession as provided in Article 539 of the New Civil Code.
18. Leal v. IAC
Gr No. L- 65425 Nov, 5 1987
Petitioners: IRENEO LEAL, JOSE LEAL, CATALINA LEAL, BERNABELA LEAL,
VICENTE LEAL EUIOGIA LEAL PATERNO RAMOS, MACARIO DEL ROSARIO,
MARGARITA ALBERTO, VICTORIA TORRES, JUSTINA MANUEL, JULIAN
MANUEL, MELANIA SANTOS, CLEMENTE SAMARIO, MARIKINA VALLEY, INC.,
MIGUELA MENDOZA, and REGISTER OF DEEDS OF RIZAL
Respondents: THE HONORABLE INTERMEDIATE APPELLATE COURT (4th Civil
Cases Division), and VICENTE SANTIAGO (Substituted by SALUD M.
SANTIAGO)
Ponente: SARMIENTO, J
27
and ruled in favor of Santiago, ordering the petitioners to accept payment and convey
the properties. The petitioner filed a petition for certiorari in the SC.
The SC held that the prohibition of sale to 3 rd parties is a perpetual restriction on the
right of ownership, specifically, the owners right to freely dispose his properties, and
therefore is contrary to public policy. This, we hold that any such prohibition, indefinite
and stated as to time, so much so that is shall continue to be applicable even beyond
the lifetime of the original parties to the contract, is, without doubt, a nullity. Also
Paragraph (b) is does not grant a right of repurchase. The right to redeem must be
expressly stipulated or at least clearly expressed in the contract of sale. In this case,
there was no express or implied grant of a right to repurchase, neither can it be
inferred from Par. (b). But even assuming that such a right of repurchase is granted
under the Compraventa, the petitioner is correct in asserting that the right has already
prescribed under Art. 1508 of the Civil Code of Spain (Art. 1606 of the Civil Code of
the Philippines: the right to redeem or repurchase, in the absence of an express
agreement as to time, shall last four years from the date of the contract). In this case
then, the right to repurchase should have been exercised within 4 years from March
221, 1941, or at the latest in 1945.
Facts:
March 21, 1941, a document entitled Compraventa which was written entirely in
Spanish was executed. It involved 3 parcels of land and was executed by Private
respondent, Vicente Santiago and his brother, Luis Santiago, in favor of Cirilio Leal
the deceased father of some of the petitioners. Pursuant to this document, the title of
the properties was transferred to the name of Cirilio Leal, who immediately took
possession and exercised ownership over the lands. After his death in 1959, his
children, who are among the petitioners in this case, inherited the lands and caused
the subdivision of the properties among themselves.
During the years 1960-1965- properties were either mortgaged or leased by the heirs
to their co-petitioners.

A document entitled Compraventa was executed between the predecessor of
petitioners Leal and private respondent Vicente Santiago wherein the title of 3 lots
were transferred to the name of Circulo Leal (Petitioners inherited the 3 lots after
Circulos death). Paragraph (b) of the document stated that they shall not sell to
others these three lots but only to the seller Vicente Santiago or to his heirs or
successors. Pursuant to this paragraph, Vicente Santiago sought to repurchase the
lots. However after petitioners refused to accept payment and convey the lots,
Santiago instituted a complaint for specific performance. The CFI of QC denied this
petition claiming that the petitioners never sold nor intend to sell the lots to 3 rd persons
therefore the complaint of Santiago is premature. The CA upheld the lower courts
decision, however on the MFR of Santiago, the IAC reversed the lower court rulings
1966-1967- Respondent Vicente Santiago approached the petitioners and offered to

re-repurchase the subject properties. In accordance with paragraph (b) of the
Compraventa which stated that they shall not sell to others these three lots but only
to the seller Vicente Santiago or to his heirs or successors. Petitioner refused.
Santiago instituted a complaint for specific performance before the CFI of Quezon
City in Aug 2 1967.
The Trial Court dismissed the complaint on the ground that it was still premature
considering that there was, as yet, no sale or any alienation equivalent to a sale.
Santiago appealed however the CA acting through Justice Edgardo Paras, affirmed
the decision of the Trial Court.
The petitioners filed a motion to amend the dispositive portion of the decision of the
CA to include an order for the cancellation of the annotations at the back of the TCTs
issued in their favor. Private respondent, filed a MFR of the CA decision and an
opposition to petitioners motion to amend.
(Not so important facts. While the above motions were pending, the CA was
abolished and in lieu of which, the Intermediate Appellate Court was established. The
case was reassigned to the 4th Civil division of the IAC)
Justice Sison then promulgated a decision in favor of Santiago. Ordering petitioners
Leal to accept the sum of P5,600.00 from Santiago as repurchase price of the lots
described in the Compraventa of March 21, 1941 and thereafter to execute a deed
of repurchase to transfer the ownership of the properties to Santiago. Justice Sison
also ordered that the sum of 3, 087.50 be paid as rentals for the years 1967-1968 and
for the Register of Deeds of Rizal to cancel the current TCT and issue a new one
under the name of Santiago.
In this petition for Certiorari to the SC, the Controversy sprung from the conflicting
interpretations of paragraph (b) of the Compraventa.Private respondent claims that
this provision creates a right person other than the vendor should not exceed 20
years, otherwise this would to repurchase and is still valid and enforceable.
Petitioners on the other hand invoke the decision by Justice Paras which states that
this prohibition to sell the lots to amount to a subversion of public policy which frowns
upon unwarranted restriction on the right of ownership.
Issue:
1. W/N the provision prohibiting the petitioners from selling the lots to other persons is
still valid (NO)
2. W/N Santiago Paragraph (b) creates a right of repurchase in favor of Santiago?
(NO)
Held:
1. Contracts are generally binding between the parties, their assigns and heirs,
however, under Art. 1255 of the Civil Code of Spain, pacts, clauses and
conditions which are contrary to public order are null and void, and thus, do
not have any binding effect. (The equivalent provision in the Civil Code of the
Philippines is Art. 13063) Public order signifies the public weal- public policy.
Essentially, therefore, public order and public policy mean one and the same thing.
3 That contracting parties may establish such stipulations, clauses, terms and conditions as
they may deem convenient, provided that they are not contrary to law, morals, goof customs,
public order, or public policy.
28
The prohibition of sale to 3rd parties is a perpetual restriction on the right of

ownership, specifically, the owners right to freely dispose his properties, and
therefore is contrary to public policy. This, we hold that any such prohibition, indefinite
and stated as to time, so much so that is shall continue to be applicable even beyond
the lifetime of the original parties to the contract, is, without doubt, a nullity.
The court granted the petitioners prayer for the cancellation of the annotations of this
prohibition at the back of their TCTs.
2. Paragraph (b) is does not grant a right of repurchase.
The law provides that for conventional redemption to take place, the vendor should
reserve, in clear and certain terms, the right to repurchase the thing sold. The right to
redeem must be expressly stipulated in the contract of sale. In this case, there was no
express or implied grant of a right to repurchase, neither can it be inferred from Par.
(b). The phrase should be construed to mean should the buyers wish to sell which is
the plain and simple import of the words, and not the buyers should sell. Since the
phrase is patent and unambiguous, the resort to Art. 1373 of the Civil Code is
erroneous.
But even assuming that such a right of repurchase is granted under the
Compraventa, the petitioner is correct in asserting that the right has already
prescribed under Art. 1508 of the Civil Code of Spain (Art. 1606 of the Civil Code of
the Philippines: the right to redeem or repurchase, in the absence of an express
agreement as to time, shall last four years from the date of the contract). In this case
then, the right to repurchase should have been exercised within 4 years from March
221, 1941, or at the latest in 1945.
(Mej related but unimportant fact) In the respondent courts resolution, it is further
ruled that the right to repurchase was given birth by the condition precedent provided
for in the phrase When the buyer has money to buy. In other words, it is the
respondent courts contention that the right may be exercise only when the buyer has
money to buy. If this were so, the 2nd par of Art 1508 would apply- there is agreement
as to time, although it is indefinite, therefore the right should be exercised within 10
years, because the law does not favor suspended ownership. Since the alleged right
to repurchase was attempted to be exercised by Santiago only in 1966, or 25 years
from the date of the contract, the said right has undoubtedly expired.
Dispositive Order: WHEREFORE, in view of the foregoing, the Resolution dated
September 27, 1983, of the respondent court is SET ASIDE and the Decision
promulgated on June 28, 1978 is hereby REINSTATED. The annotations of the
prohibition to sell at the back of TCT Nos. 138837, 138838, 138839, 138840, 138841,
and 138842 are hereby ordered CANCELLED. Costs against the private respondent.
19. Rep. v. Rural Bank
G.R. No. 185121, 25 January 2012
Petitioner: Republic of the Philippines, National Irrigation Administration

Respondents: Rural Bank of Cabacan, et al.,
Recit-Ready (Long case): The National Irrigation Administration (NIA) filed with the
Regional Trial Court of Kabacan (RTC) a complaint for expropriation of a portion of
three parcels of land covering a total of 14,497.91 square meters for its MalitubogMarigadao irrigation project. The committee formed by the RTC pegged the fair
market value of the land at Php 65.00 per square meter. It also added to its
computation the value of soil excavated from portions of two lots. RTC adopted the
findings of the committee despite the objections of NIA to the inclusion of the value of
the excavated soil in the computation of the value of the land. NIA, through the Office
of the Solicitor General, appealed to the Court of Appeals (CA) which affirmed with
modification the RTCs decision. CA deleted the value of the soil in determination of
compensation but affirmed RTCs valuation of the improvements made on the
properties. HELD: There is no legal basis to separate the value of the excavated
soil from that of the expropriated properties, contrary to what the trial court did.
In the context of expropriation proceedings, the soil has no value separate from
that of the expropriated land. Just compensation ordinarily refers to the value
of the land to compensate for what the owner actually loses. Such value could
only be that which prevailed at the time of the taking.
In National Power Corporation v. Ibrahim, et al. The SC held that rights over lands are
indivisible. This conclusion is drawn from Article 437 of the Civil Code which provides:
The owner of a parcel of land is the owner of its surface and of everything under it,
and he can construct thereon any works or make any plantations and excavations
which he may deem proper, without detriment to servitudes and subject to special
laws and ordinances. He cannot complain of the reasonable requirements of aerial
navigation. Thus, the ownership of land extends to the surface as well as to the
subsoil under it.
Hence, the CA correctly modified the trial courts Decision when it ruled it is
preposterous that NIA will be made to pay not only for the value of the land but also
for the soil excavated from such land when such excavation is a necessary phase in
the building of irrigation projects. That NIA will make use of the excavated soil is of no
moment and is of no concern to the landowner who has been paid the fair market
value of his land. As pointed out by the OSG, the law does not limit the use of the
expropriated land to the surface area only. To sanction the payment of the excavated
soil is to allow the landowners to recover more than the value of the land at the time
when it was taken, which is the true measure of the damages, or just compensation,
and would discourage the construction of important public improvements.
Facts:
29
National Irrigation Administration (NIA) is a government owned and

controlled corporation primarily responsible and management in the country.
NIA needed some parcels of land for the purpose of constructing the
Malitubog-Marigadao Irrigation Project. On 08 September 1994, it filed with
the RTC of Kabacan, Cotabato a Complaint for the expropriation of a portion
of three (3) parcels of land covering a total of 14,497.91 square meters
NIA filed an Amended Complaint to include Leosa Nanette A. Agdeppa and
Marcelino Viernes as registered owners of Lot No. 3039. NIA filed a Second
Amended Complaint to allege properly the area sought to be expropriated,
the exact address of the expropriated properties and the owners thereof.
Respondent allege that NIA had no authority to expropriate portions of their
land, because it was not a sovereign political entity; That it was not
necessary to expropriate their properties, because there was an abandoned
government property adjacent to theirs, where the project could pass
through; That Lot No. 3080 was no longer owned by the Rural Bank of
Kabacan; That NIAs valuation of their expropriated properties was
inaccurate because of the improvements on the land that should have
placed its value at 5 million; and that NIA never negotiated with the
landowners before taking their properties for the project, causing permanent
and irreparable damages to their properties valued at 250,000.
The RTC issued an Order forming a committee tasked to determine the fair
market value of the expropriated properties to establish the just
compensation to be paid to the owners.
On 15 October 1996, the committee submitted a Commissioners Report.
The report, however, stated that the committee members could not agree on
the market value of the subject properties and recommended the
appointment of new independent commissioners to replace the ones coming
from the parties only.
A new committee was ordered to be formed. On 25 November 1996, the
new committee submitted its Commissioners Report to the lower court. The
committee had agreed that the fair market value of the land to be
expropriated should be 65 per square meter based on the zonal valuation
of the Bureau of Internal Revenue (BIR).
The committee submitted to the RTC another report. The committee added
to its computation the value of the earth-fill excavated from portions of
Lot Nos. 3039 and 3080. Petitioner objected to the inclusion of the
value of the excavated soil in the computation of the value of the land.
RTC ruled in favor of respondents and ordered the payment of just
compensation according to the report of the new committee.
NIA assailed the trial courts adoption of the Commissioners Report, which
had determined the just compensation to be awarded to the owners of the
lands expropriated. NIA also impugned as error the RTCs inclusion for
compensation of the excavated soil from the expropriated properties.
CA ruled that the committee tasked to determine the fair market value of the
properties and improvements for the purpose of arriving at the just
compensation, properly performed its function.
The assailed CA Decision deleted the inclusion of the value of the soil
excavated from the properties in the just compensation. It ruled that
the property owner was entitled to compensation only for the value of
the property at the time of the taking. In the construction of irrigation
projects, excavations are necessary to build the canals, and the
excavated soil cannot be valued separately from the land expropriated.
Thus, it concluded that NIA, as the new owner of the affected
properties, had the right to enjoy and make use of the property,
including the excavated soil, pursuant to the latters objectives.
The CA affirmed the trial courts ruling that recognized defendantsintervenors Margarita Tabaoda and Portia Charisma Ruth Ortiz as the new
owners of Lot No. 3080 and held that they were thus entitled to just
compensation by the Rural Bank of Kabacan in the expropriation
proceedings and the latters Manifestation that it no longer owned Lot No.
3080.
30
ISSUE: WON there should be separate just compensation for the excavated
land?
Held: No
Ratio:
The Court affirms the appellate courts ruling that the commissioners
properly determined the just compensation to be awarded to the landowners
whose properties were expropriated by petitioner.
The records show that the trial court dutifully followed the procedure under
Rule 67 of the 1997 Rules of Civil Procedure when it formed a committee
that was tasked to determine the just compensation for the expropriated
properties. The first set of committee members made an ocular inspection of
the properties, subject of the expropriation. They also determined the exact
areas affected, as well as the kinds and the number of improvements on the
properties. When the members were unable to agree on the valuation of the
land and the improvements thereon, the trial court selected another batch of
disinterested members to carry out the task of determining the value of the
land and the improvements.
In the instant case, the committee members based their recommendations
on reliable data and, as aptly noted by the appellate court, considered
various factors that affected the value of the land and the improvements.
The Court also uphold the CA ruling, which deleted the inclusion of the value
of the excavated soil in the payment for just compensation. There is no
legal basis to separate the value of the excavated soil from that of the
expropriated properties. In the context of expropriation proceedings,
the soil has no value separate from that of the expropriated land. Just
compensation ordinarily refers to the value of the land to compensate
for what the owner actually loses. Such value could only be that which
prevailed at the time of the taking.
In National Power Corporation v. Ibrahim, et al., we held that rights over
lands are indivisible. According to the Civil Code: ART. 437. The owner of a
parcel of land is the owner of its surface and of everything under it, and he
can construct thereon any works or make any plantations and excavations
which he may deem proper, without detriment to servitudes and subject to
special laws and ordinances. He cannot complain of the reasonable
requirements of aerial navigation. Thus, the ownership of land extends to the
surface as well as to the subsoil under it.
Moreover, the landowners right extends to the subsoil insofar as necessary
for their practical interests serves only to further weaken its case. The theory
would limit the right to the subsoil upon the economic utility which such area
offers to the surface owners. Presumably, the landowners right extends to
such height or depth where it is possible for them to obtain some benefit or
enjoyment, and it is extinguished beyond such limit as there would be no
more interest protected by law.
IMPORTANT: In the construction of irrigation projects, NIA must necessarily
make excavations in order to build the canals. Indeed it is preposterous that
NIA will be made to pay not only for the value of the land but also for the soil
excavated from such land when such excavation is a necessary phase in the
building of irrigation projects. That NIA will make use of the excavated soil is
of no moment and is of no concern to the landowner who has been paid the
fair market value of his land. As pointed out by the OSG, the law does not
limit the use of the expropriated land to the surface area only. Further,
NIA, now being the owner of the expropriated property, has the right to
enjoy and make use of the property in accordance with its mandate and
objectives as provided by law. To sanction the payment of the
excavated soil is to allow the landowners to recover more than the
value of the land at the time when it was taken, which is the true
measure of the damages, or just compensation, and would discourage
the construction of important public improvements.
As to the issue of ownership: The appellate court erred in affirming the trial
courts Order to award payment of just compensation to the defendantsintervenors. There is doubt as to the real owner of Lot No. 3080. Despite the
fact that the lot was covered by TCT No. T61963 and was registered under
its name, the Rural Bank of Kabacan manifested that the owner of the lot
was no longer the bank, but the defendants-intervenors; However, it
presented no proof as to the conveyance thereof. In this regard, we deem it
proper to remand this case to the trial court for the reception of evidence to
31
establish the present owner of Lot No. 3080 who will be entitled to receive
the payment of just compensation.
20. Land Bank v. Perez
Petitioners: LAND BANK OF THE PHILIPPINES (LBP)
Respondents: LAMBERTO C. PEREZ, NESTOR C. KUN, MA. ESTELITA P.
ANGELES-PANLILIO, and NAPOLEON O. GARCIA
Short facts (recit ready) & held:

LPB extended a credit accommodation to ACDC, a construction company, for the
latter to buy construction materials. Since ACDC failed to pay LBP, LBP sued ACDCs
officers and representatives (Perez et al) for estafa, for allegedly misappropriating the
materials. LBP argued that the transaction between LBP and ACDC was in a form of
trust receipts and consequently, ownership of the materials obtained by ACDC vests
in LBP. The court held that the transaction was actually a loan (thus, the ownership of
the materials vests in ACDC) and not trust receipts, and therefore there can be no
misappropriation, and thus, the estafa case must be dismissed.
Issue/s:
1. Did the transactions involve trust receipts and therefore the owner of the goods
was LBP? (Coz if the answer is NO, they cannot be held liable for estafa)
Held/Ratio:
Facts:
Quezon. Its clients for the construction projects, which were the general
contractors of these projects, have not yet paid them; thus, ACDC had yet to
receive the proceeds of the materials that were the subject of the trust
receipts and were allegedly used for these constructions. As there were no
proceeds received from these clients, no misappropriation thereof could
have taken place.
Secretary of Justice said that Colinares v CA does not apply in this case. He
explained that in Colinares, the building materials were delivered to the
accused before they applied to the bank for a loan to pay for the
merchandise; thus, the ownership of the merchandise had already been
transferred to the entrustees before the trust receipts agreements were
entered into. In the present case, the parties have already entered into the
Agreement before the construction materials were delivered to ACDC.
LBP is a government financial institution and the official depositary of the

Phils.
Perez et al are officers and representatives of Asian Construction and
Development Corporation (ACDC), a Phil corporation engaged in
construction business.
LBP filed a complaint for estafa against Perez et al.
It was alleged that LBP extended a credit accommodation to ACDC through
the execution of an Omnibus Credit Line Agreement. ACDC used the Letters
of Credit/Trust Receipts Facility of the Agreement to buy construction
materials.
Perez et al executed trust receipts in connection with the construction
materials with a total principal amount of P52,344,096.32.
The trust receipts matured, but ACDC failed to return to LBP the proceeds of
the construction projects or the construction materials subject of the trust
receipts. LBP sent ACDC a demand letter, but still ACDC failed to pay. Thus,
this suit.
Perez et al, in defense, stated that they signed the trust receipt documents
on or about the same time LBP and ACDC executed the loan documents;
their signatures were required by LBP for the release of the loans. The trust
receipts in this case do not contain (1) a description of the goods placed in
trust, (2) their invoice values, and (3) their maturity dates, in violation of
Section 5(a) of P.D. 115. Moreover, they alleged that ACDC acted as a
subcontractor for government projects such as the Metro Rail Transit, the
Clark Centennial Exposition and the Quezon Power Plant in Mauban,
1.
NO. The transactions were not in the form of trust receipts, and thus, the owner
of the goods was ACDC. (Consequently, they are not liable for estafa)
Section 4 of P.D. 115 defines a trust receipt transaction in this manner:

Section 4. What constitutes a trust receipt transaction. A trust receipt transaction,
within the meaning of this Decree, is any transaction by and between a person
referred to in this Decree as the entruster, and another person referred to in this
Decree as entrustee, whereby the entruster, who owns or holds absolute title or
security interests over certain specified goods, documents or instruments, releases
the same to the possession of the entrustee upon the latter's execution and delivery
to the entruster of a signed document called a "trust receipt" wherein the entrustee
binds himself to hold the designated goods, documents or instruments in trust for the
entruster and to sell or otherwise dispose of the goods, documents or instruments
with the obligation to turn over to the entruster the proceeds thereof to the extent of
the amount owing to the entruster or as appears in the trust receipt or the goods,
documents or instruments themselves if they are unsold or not otherwise disposed
of
The fact that LBP had knowingly authorized the delivery of construction materials to a
construction site of two government projects, as well as unspecified construction
sites, repudiates the idea that LBP intended to be the owner of those construction
materials. As a government financial institution, LBP should have been aware that the
materials were to be used for the construction of an immovable property, as well as a
property of the public domain. As an immovable property, the ownership of whatever
was constructed with those materials would presumably belong to the owner of the
land, under Article 445 of the Civil Code which provides:
Article 445. Whatever is built, planted or sown on the land of another and the
improvements or repairs made thereon, belong to the owner of the land, subject to
the provisions of the following articles.
Arguendo that the materials, consisting of cement, bolts and reinforcing steel bars,
would be used for the construction of a movable property, the ownership of these
properties would still pertain to the government and not remain with the bank as they
would be classified as property of the public domain, which is defined by the Civil
Code as:
32
prescription must necessarily fail. Accordingly, the DepEd 's possession can only be
considered as adverse from the time the gymnasium was being constructed in 1999
on the subject portion of Tuliao's property. In March 2000, Tuliao discovered the
construction and demanded that the DepEd cease and desist from continuing the
same. When DepEd refused, Tuliao filed a complaint for recovery of possession of
the subject lot in 2002. Thus, only two (2) years had elapsed from the time the DepEd
resisted Tuliao's claims. Clearly, he did not sleep on his rights. There was no
prolonged inaction that barred him from prosecuting his claims.
Facts:
Article 420. The following things are property of public dominion:

(1) Those intended for public use, such as roads, canals, rivers, torrents, ports and
bridges constructed by the State, banks, shores, roadsteads, and others of similar
character;
(2) Those which belong to the State, without being for public use, and are intended for
some public service or for the development of the national wealth.
Since these transactions are not trust receipts, an action for estafa should not be
brought against the respondents, who are liable only for a loan.
==========================================================
IV.D.2 Accession: Accession Continua
21. Dept. of Ed v. Tuliao
G.R. No. 205664

June 9, 2014
Petitioner: Department of Education
Respondent: Mariano Tuliao
Recit Ready: Tuliao is the registered owner of a parcel of land located in
Tuguegarao. A portion of the said property was allowed by his predecessors in
interest to be used by Atulayan Elementary School (AES).as access road for the
schoolchildren. Upon discovering that a gymnasium is being constructed on the
subject property, Tuliao demanded that DepEd cease and desist and vacate the
property. DepEd refused invoking ownership through prescription for being in
adverse, continuous and peaceful possession of the said property for over fifty (50)
years. The issue in this case is whether or not DepEd has a right over the property.
The Court held that Tuliao is the registered owner of the property. To prove the same,
he presented not only his certificate of title but tax declaration over the same property.
There are sufficient to prove Tuliaos ownership over the property in question.
Because Tuliaos ownership was sufficiently proved, DepEds defense of laches and
Mariano Tuliao (Tuliao) filed an action for recovery of possession and

removal of structure with damages against the Department of Education
(DepEd).
He alleged that he was the registered owner of the subject parcel of land and
that a portion of the said property was allowed by his predecessors-ininterest to be used by the Atulayan Elementary School (AES) as an access
road for the schoolchildren in going to and from the school. In March 2000,
upon discovering that a structure was being constructed on the land, he
demanded that the DepED cease and desist and vacate the property.
In its defense, the DepEd denied the material allegations of the complaint
and averred that it did not state a cause of action. Even if there was, the
same was already barred by prescription and/or laches. Its occupation of the
subject land was adverse, peaceful, continuous, and in the concept of an
owner for more than fifty (50) years.
MTCC rendered its decision, ruling that Tuliao was the registered owner of
the subject property and, thus, had a right of action against the holder and
possessor of the said property.
As to the structures, the MTCC stated that it could not allow the immediate
removal thereof in view of the provisions of Article 448.4
4 The MTCC gave Tuliao the following options to exercise:a.) If in case the plaintiff exercises the
option to appropriate the structures built on the lot in suit, the defendant is hereby directed to
submit to this court the amount of the expenses spent for the structures within 15 days from
receipt of the notice of the plaintiff of his desired option.
b.) If the plaintiff decides to oblige the defendant to pay the price of the land, the current market
value of the land including its improvements as determined by the City Assessors Office shall be
the basis for the price thereof.
c.) In case the plaintiff exercises the option to oblige the defendant to pay the price of the land
but the latter rejects such purchase because the value of the land is considerably more than that
of the structures, the parties shall agree upon the terms of a forced lease, and give the court a
formal written notice of such agreement and its provisos.
d.) If no formal agreement shall be entered into within a reasonable period, the court shall fix the
terms of the forced lease.
The RTC dismissed the appeal and affirmed the MTCC decision.
CA affirmed the RTC.
Issues:
1.
2.
W/N there was sufficient description of the property in question.

W/N DepEds possession was merely pursuant to the registered owner or
the property, hence prescription cannot be invoked
Held:
1.
2.
Here, Tuliao, as the registered owner, filed a complaint for recovery of

possession and removal of structure.1wphi1 To support his claim, he
presented not only tax declarations and tax receipts, but also a certificate of
title. The Court agrees with the CA that the said pieces of evidence were
sufficient to resolve the issue of who had the better right of possession. That
being the case, the burden was shifted to the DepEd to prove otherwise.
Unfortunately, the DepEd only presented testimonial evidence and nothing
more to prove its defense and refute Tuliaos claim. Its lone witness was all
that the DepEd had to prove its right of possession. As between a certificate
of title, which is an incontrovertible proof of ownership,19 accompanied with
a tax declaration and a tax receipt on one hand, and a testimony of a lone
witness who is a retired teacher on the other, the former prevails in
establishing who has a better right of possession over the property, following
the rule that testimonial evidence cannot prevail over documentary evidence.
As regards the DepEd 's defense of ]aches, it has no merit either. The Court
once ruled that mere material possession of the land was not adverse as
against the owner and was insufficient to vest title, unless such possession
was accompanied by the intent to possess as an owner. Accordingly, the
DepEd 's possession can only be considered as adverse from the time the
gymnasium was being constructed in 1999 on the subject portion of Tuliao's
property. In March 2000, Tuliao discovered the construction and demanded
that the DepEd cease and desist from continuing the same. When DepEd
refused, Tuliao filed a complaint for recovery of possession of the subject lot
in 2002. Thus, only two (2) years had elapsed from the time the DepEd
resisted Tuliao's claims. Clearly, he did not sleep on his rights. There was no
prolonged inaction that barred him from prosecuting his claims.
22. Communities Cagayan v. Spouses Nanol

Petitioners COMMUNITIES CAGAYAN, INC
Respondents SPOUSES ARSENIO (Deceased) and ANGELES NANOL AND
ANYBODY CLAIMING RIGHTS UNDER THEM
33
Spouses Arsenio and Angeles Nanol entered into a Contract to Sell with Communities
Cagayan, Inc., (CCI) whereby the latter agreed to sell to spouses a house and Lots.
They obtained a loan from Capitol Development Bank, using the property as
collateral. To facilitate the loan, a simulated sale over the property was executed by
CCI in favor of spouses. The bank collapsed and closed before it could release the
loan. Spouses entered into another Contract to Sell with petitioner over the same
property for the same price. This time, they, undertook to pay the loan over four years.
Arsenio demolished the original house and constructed a three-story house. CCI sent
spouses a Notice of Cancellation of Contract to Sell due to the latters failure to pay
the monthly amortizations. Petitioner filed an action for unlawful detainer against
spouses. Issue: Whether petitioner is obliged to reimburse respondent-spouses the
value of the new house minus the cost of the original house. Held: The petition is
partly meritorious. In view of the special circumstances obtaining in this case, we are
constrained to rely on the presumption of good faith on the part of the spouses which
the petitioner failed to rebut. Thus, spouses being presumed builders in good faith, we
now rule on the applicability of Article 448 of the Civil Code. Article 448 on builders in
good faith does not apply where there is a contractual relation between the parties,
such as in the instant case. The parties failed to attach a copy of the Contract to Sell.
As such, we apply Article 448 of the Civil Code. The rule that the choice under Article
448 of the Civil Code belongs to the owner of the land is in accord with the principle of
accession, i.e., that the accessory follows the principal and not the other way around.
Even as the option lies with the landowner, the grant to him, nevertheless, is
preclusive. The landowner cannot refuse to exercise either option and compel instead
the owner of the building to remove it from the land. CCI, as landowner, has two
options. It may appropriate the new house by reimbursing respondent Angeles the
current market value thereof minus the cost of the old house. In the alternative,
petitioner may sell the lots to respondent Angeles at a price equivalent to the current
fair value thereof. However, if the value of the lots is considerably more than the value
of the improvement, respondent Angeles cannot be compelled to purchase the lots.
She can only be obliged to pay petitioner reasonable rent.
Facts:
Sometime in 1994, respondent-spouses Arsenio and Angeles Nanol entered

into a Contract to Sell with petitioner Communities Cagayan, Inc., (CCI)
whereby the latter agreed to sell to respondent-spouses a house and Lots
17 and 19 located at Block 16, Camella Homes Subdivision, Cagayan de
Oro City, for P368,000.00.
They obtained a loan from Capitol Development Bank (CDB), using the
property as collateral.
To facilitate the loan, a simulated sale over the property was executed by
petitioner in favor of respondent-spouses.
Accordingly, titles were transferred in the names of respondent-spouses and
submitted to CDB for loan processing. The bank collapsed and closed
before it could release the loan.
On November 30, 1997, respondent-spouses entered into another Contract

to Sell with petitioner over the same property for the same price.
This time, they availed of petitioners in-house financing thus, undertaking to
pay the loan over four years, from 1997 to 2001.
Respondent Arsenio demolished the original house and constructed a threestory house allegedly valued at P3.5 million, more or less. (Respondent
Arsenio died, leaving his wife, herein respondent Angeles, to pay for the
monthly amortizations.)
On September 10, 2003, petitioner sent respondent-spouses a notarized
Notice of Delinquency and Cancellation of Contract to Sell due to the latters
failure to pay the monthly amortizations.
Petitioner filed before the Municipal Trial Court in Cities, an action for
unlawful detainer against respondent-spouses.
In her Answer, respondent Angeles averred that the Deed of Absolute Sale is
valid.
34
9.
10.
11.
12.
Issues:
1. Whether petitioner is obliged to refund to respondent-spouses all the monthly
installments paid; and
2. Whether petitioner is obliged to reimburse respondent-spouses the value of the
new house minus the cost of the original house.
13.
14.
Held: The petition is partly meritorious.

1.
2.
3.
4.
5.
6.
7.
8.
Respondent-spouses are entitled to the cash surrender value of the

payments on the property equivalent to 50% of the total payments made
under the Maceda Law.
Respondent-spouses are entitled to reimbursement of the improvements
made on the property.
In view of the special circumstances obtaining in this case, we are
constrained to rely on the presumption of good faith on the part of the
respondent-spouses which the petitioner failed to rebut.
Thus, respondent-spouses being presumed builders in good faith, we now
rule on the applicability of Article 448 of the Civil Code.
Article 448 on builders in good faith does not apply where there is a
contractual relation between the parties, such as in the instant case.
We went over the records of this case and we note that the parties failed to
attach a copy of the Contract to Sell.
As such, we are constrained to apply Article 448 of the Civil Code, which
provides viz:
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
15.
16.
17.
18.
19.
works, sowing or planting, after payment of the indemnity provided for in

Articles 546 and 548, or to oblige the one who built or planted to pay the
price of the land, and the one who sowed, the proper rent. However, the
builder or planter cannot be obliged to buy the land if its value is
considerably more than that of the building or trees. In such case, he shall
pay reasonable rent, if the owner of the land does not choose to appropriate
the building or trees after proper indemnity. The parties shall agree upon the
terms of the lease and in case of disagreement, the court shall fix the terms
thereof.
The rule that the choice under Article 448 of the Civil Code belongs to the
owner of the land is in accord with the principle of accession, i.e., that the
accessory follows the principal and not the other way around.
Even as the option lies with the landowner, the grant to him, nevertheless, is
preclusive.
The landowner cannot refuse to exercise either option and compel instead
the owner of the building to remove it from the land.
The raison detre for this provision has been enunciated thus: Where the
builder, planter or sower has acted in good faith, a conflict of rights arises
between the owners, and it becomes necessary to protect the owner of the
improvements without causing injustice to the owner of the land.
In view of the impracticability of creating a state of forced co-ownership, the
law has provided a just solution by giving the owner of the land the option to
acquire the improvements after payment of the proper indemnity, or to oblige
the builder or planter to pay for the land and the sower the proper rent.
He cannot refuse to exercise either option. It is the owner of the land who is
authorized to exercise the option, because his right is older, and because, by
the principle of accession, he is entitled to the ownership of the accessory
thing.
In conformity with the foregoing pronouncement, we hold that petitioner, as
landowner, has two options.
It may appropriate the new house by reimbursing respondent Angeles the
current market value thereof minus the cost of the old house. Under this
option, respondent Angeles would have "a right of retention which negates
the obligation to pay rent."
In the alternative, petitioner may sell the lots to respondent Angeles at a
price equivalent to the current fair value thereof. However, if the value of the
lots is considerably more than the value of the improvement, respondent
Angeles cannot be compelled to purchase the lots.
She can only be obliged to pay petitioner reasonable rent.
WHEREFORE, the petition is hereby PARTIALLY GRANTED. The assailed
Decision dated December 29, 2006 and the Order dated February 12, 2007
of the Regional Trial Court, Cagayan de Oro City, Branch 18, in Civil Case
No. 2005-158 are hereby AFFIRMED with MODIFICATION that petitioner
Communities Cagayan, Inc. is hereby ordered to RETURN the cash
surrender value of the payments made by respondent-spouses on the
properties, which is equivalent to 50% of the total payments made, in
ccordance with Section 3(b) of Republic Act No. 6552, otherwise known as
the Maceda Law.
23. SulongNayon v. Nayong Filipino
Petitioner: Sulo Sa Nayon, Inc. and/or Philippine Village Hotel, Inc. and Jose Marcel
E. Panlilio
Respondent: Nayong Pilipino Foundation
Ponente: PUNO, C.J.
35
Short Facts/Doctrine:
Nayong Pilipino leased a portion of its complex to Sulo sa Nayon for the building of a
hotel (PVH). The lease was renewed but petitioners defaulted on the payment of their
monthly rental and so respondent filed a complaint of unlawful detainer against them.
SC ruled that:
Doctrine 1: The introduction of valuable improvements on the leased premises does
not give the petitioners the right of retention and reimbursement which rightfully
belongs to a builder in good faith. Otherwise, such a situation would allow the lessee
to easily improve the lessor out of its property.
A lessee is neither a builder in good faith nor in bad faith that would call for the
application of Articles 448 and 546 of the Civil Code. His rights are governed by
Article 1678 of the Civil Code.
Doctrine 2: Under Article 1678, the lessor has the option of paying one-half of the
value of the improvements which the lessee made in good faith, which are suitable for
the use for which the lease is intended, and which have not altered the form and
substance of the land. On the other hand, the lessee may remove the improvements
should the lessor refuse to reimburse.
Facts:
On June 1, 1975, Nayong Pilipino leased a portion of the Nayong Pilipino

Complex, to petitioner Sulo sa Nayon for the construction and operation of a
hotel building, to be known as the Philippine Village Hotel. The lease was for an
initial period of 21 years (May 1996). It is renewable for a period of 25 years
under the same terms and conditions upon due notice in writing at least 6 months
before its expiration.
On March 7, 1995, petitioners sent respondent a letter notifying the latter of their
intention to renew the contract for another 25 years.
The parties executed a Voluntary Addendum to the Lease Agreement. They
agreed to the renewal of the contract until 2021.
Beginning January 2001, petitioners defaulted in the payment of their monthly

rental. Respondent repeatedly demanded petitioners to pay the arrears and
vacate the premises. The last demand letter was sent on March 26, 2001.
On September 5, 2001, respondent filed a complaint for unlawful detainer before
the MeTC of Pasay City. The arrears amounted to P26,183,225.14 as of July 31,
2001.
MeTC rendered its decision in favor of respondent ruling that upon the failure of
the lessee to pay the stipulated rentals, the lessor may eject (sic) and treat the
lease as rescinded and sue to eject the lessee. For non-payment of rentals, the
lessor may rescind the lease, recover the back rentals and recover possession of
the leased premises.
o Improvements made by a lessee such as the defendants herein on
leased premises are not valid reasons for their retention thereof. The
fact that petitioners allegedly made repairs on the premises in question
is not a reason for them to retain the possession of the premises. There
is no provision of law which grants the lessee a right of retention over
the leased premises on that ground. Article 448 of the Civil Code, in
relation to Article 546, which provides for full reimbursement of useful
improvements and retention of the premises until reimbursement is
made, applies only to a possessor in good faith, i.e., one who builds on
a land in the belief that he is the owner thereof. This right of retention
does not apply to a mere lessee, like the petitioners, otherwise, it would
always be in his power to improve his landlord out of the latters property
(Chua v. CA, G.R. No. 109840, January 21, 1999).
o Although the Contract of Lease stipulates that the building and all the
improvements in the leased premises belong to the defendants herein,
such will not defeat the right of the plaintiff to its property as the
defendants failed to pay their rentals in violation of the terms of the
contract. At most, defendants can only invoke [their] right under Article
1678 of the New Civil Code which grants them the right to be
reimbursed one-half of the value of the building upon the termination of
the lease, or, in the alternative, to remove the improvements if the lessor
refuses to make reimbursement.
Petitioners appealed to the RTC which modified the ruling of the MeTC. It ruled
that considering the elements of permanency of the construction and substantial
value of the improvements as well as the undispute[d] ownership over the land
improvements, Art. 448 of the Civil Code should be applied. The only remaining
and most crucial issue to be resolved is whether or not the appellants as builders
have acted in good faith in order for Art. 448 in relation to Art. 546 of the Civil
Code may apply with respect to their rights over improvements.
o The improvement of the hotel building of PVHI was constructed with the
written consent and knowledge of Nayong Pilipino. In fact, it was
precisely the primary purpose for which they entered into an
agreement. Thus, it could not be denied that PVHI is a builder in good
faith.
36
Pursuant to Article 448 in relation to Art. 546 of the Civil Code, Nayong
Pilipino has the sole option or choice, either to appropriate the building,
upon payment of proper indemnity consonant to Art. 546 or compel the
appellants to purchase the land whereon the building was erected.
Until such time that plaintiff-appellee has elected an option or choice,
it has no right of removal or demolition against appellants unless after
having selected a compulsory sale, appellants fail to pay for the
land. This is without prejudice from the parties agreeing to adjust their
rights in some other way as they may mutually deem fit and proper.
CA held that the RTC erroneously applied the rules on accession, as found in
Articles 448 and 546 of the Civil Code. The CA held that respondents are
admittedly mere lessees of the subject premises and as such, cannot validly
claim that they are builders in good faith in order to solicit the application of
Articles 448 and 546 of the Civil Code in their favor.
o Introduction of valuable improvements on the leased premises does not
strip the petitioner of its right to avail of recourses under the law and the
lease contract itself in case of breach thereof. Neither does it deprive
the petitioner of its right under Article 1678 to exercise its option to
acquire the improvements or to let the respondents remove the same.
Issue: Whether PVHI is a builder in good faith which merits the application of Articles
448 and 546 in their favor.
Held: No, PVHI is NOT a builder in good faith (SC upholds CA ruling).
Ratio:
Pertinent Provisions:
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.
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.
Art. 448 is manifestly intended to apply only to a case where one builds, plants,
or sows on land in which he believes himself to have a claim of title, and not to
lands where the only interest of the builder, planter or sower is that of a holder,
such as a tenant (Tolentino).
In the case at bar, PVHI has no adverse claim or title to the land.
PVHIs contention 1: What petitioners insist is that because of the substantial
improvements they have introduced on the leased premises with the permission
of respondent, they should be considered builders in good faith who have the
right to retain possession of the property until reimbursement by respondent.
o SC: The introduction of valuable improvements on the leased premises
does not give the petitioners the right of retention and reimbursement
which rightfully belongs to a builder in good faith. Otherwise, such a
situation would allow the lessee to easily improve the lessor out of its
property.
o A lessee is neither a builder in good faith nor in bad faith that would call
for the application of Articles 448 and 546 of the Civil Code. His rights
are governed by Article 1678 of the Civil Code.
Art. 1678. If the lessee makes, in good faith, useful
improvements which are suitable to the use for which the lease
is intended, without altering the form or substance of the
property leased, the lessor upon the termination of the lease
shall pay the lessee one-half of the value of the improvements
at that time. Should the lessor refuse to reimburse said
amount, the lessee may remove the improvements, even
though the principal thing may suffer damage thereby. He shall
not, however, cause any more impairment upon the property
leased than is necessary.
With regard to ornamental expenses, the lessee shall not be
entitled to any reimbursement, but he may remove the
ornamental objects, provided no damage is caused to the
principal thing, and the lessor does not choose to retain them
by paying their value at the time the lease is extinguished.
Under Article 1678, the lessor has the option of paying one-half of the
value of the improvements which the lessee made in good faith, which
are suitable for the use for which the lease is intended, and which have
not altered the form and substance of the land. On the other hand, the
lessee may remove the improvements should the lessor refuse to
reimburse.
37
PVHIs contention 2: To apply Article 1678 to their case would amount to giving
away the hotel and its other structures at virtually bargain prices. They allege that
the value of the hotel and its appurtenant facilities amounts to more than two
billion pesos, while the monetary claim of respondent against them only amounts
to a little more than twenty six-million pesos. Thus, it is the lease contract that
governs the relationship of the parties, and consequently, the parties may be
considered to have impliedly waived the application of Article 1678.
o Petitioners maintain that the lease contract contains a default provision
which does not give respondent the right to appropriate the
improvements nor evict petitioners in cases of cancellation or
termination of the contract due to default or breach of its
terms. Petitioners assert that respondent committed a breach of the
lease contract when it filed the ejectment suit against them.
o SC: Basic is the doctrine that laws are deemed incorporated in each and
every contract. Existing laws always form part of any contract. Further,
the lease contract in the case at bar shows no special kind of agreement
between the parties as to how to proceed in cases of default or breach
of the contract. .
o However, we find nothing in the default provision that prohibits
respondent to proceed the way it did in enforcing its rights as lessor. It
can rightfully file for ejectment to evict petitioners, as it did before the
court a quo.
Disposition: Petitioners appeal is DENIED. CA decision affirmed.
24. Heirs of Limense v. De Ramos

Petitioner: HEIRS OF THE LATE JOAQUIN LIMENSE, namely: CONCESA LIMENSE,
Surviving Spouse; and DANILO and JOSELITO, both surnamed Limense, children
Respondent: RITA VDA. DE RAMOS, RESTITUTO RAMOS, VIRGILIO DIAZ,
IRENEO RAMOS, BENJAMIN RAMOS, WALDYTRUDES RAMOS-BASILIO,
TRINIDAD RAMOS-BRAVO, PAZ RAMOS-PASCUA, FELICISIMA RAMOS-REYES,
and JACINTA RAMOS,
Ponente: PERALTA, J.
Facts:
Dalmacio Lozada was the registered owner of a land in Manila. He subdivided

his property into five lots (Lot Nos. 12-A, 12-B, 12-C,12-D and 12-E)and gave the
divided lots to his daughters through a deed of donation.
TCT No. 40043, which covered Lot 12-C, was issued to Catalina, Isabel, and
Salud Lozada. Meanwhile, the predecessors-in-interest of the respondents (De
Ramos et al.) constructed their residential building on Lot 12-D, adjacent to Lot
12-C. On May 1969, a TCT was issued in the name of Joaquin Limense covering
Lot 12-C.
Joaquin Limense wanted to build a hollow block fence on the boundary line
between Lot 12-C and Lot 12-D. The fence, however, could not be constructed
because a substantial portion of respondents' residential building in Lot 12-D
encroached upon portions of Joaquin Limense's property in Lot No. 12-C.
Limense demanded the removal of the encroached area. However, respondent
ignored both oral and written demands, forcing Limense to file a complaint
against the respondents for removal of obstruction and damages with the RTC.
In the RTC, the respondents averred that they are daughters of on of the Lozada
daughters. After subdividing the said lot, Dalmacio Lozada donated Lot No. 12-C
in favor of his daughters Catalina, married to Sotero Natividad; Isabel, married to
Isaac Limense; and Salud, married to Francisco Ramos. Being the surviving
heirs of Francisco Ramos, respondents later became co-owners of Lot 12-C. Lot
12-C has served as right of way or common alley of all the heirs of Dalmacio
Lozada since 1932 up to the present. As a common alley, it could not be closed
or fenced by Joaquin Limense without causing damage and prejudice to
respondents.
RTC: dismissed the complaint of Limense ruling that an apparent easement of
right of way existed in favor of respondents. The Court also found that when
plaintiff acquired the Lot 12-C which forms the alley, he knew that said lot could
serve no other purpose than as an alley.
Joaquin filed a notice of appeal but during the pendency of the appeal with the
CA, Joaquin died. His heirs then elevated the case to the SC via petition for
review on certiorari.
Petitioners contend that respondents are not entitled to an easement of right of
way over Lot 12-C, because their Lot 12-D is not duly annotated at the back of
the TCT which would entitle them to enjoy the easement. Respondents, on the
other hand, allege that they are entitled to an easement of right of way over Lot
12-C, which has been continuously used as an alley by the heirs of Dalmacio
Lozada, the residents in the area and the public in general from 1932 up to the
present. Since petitioners are fully aware of the long existence of the said alley or
easement of right of way, they are bound to respect the same.
Issues:
1.
2.
3.
WON respondents are entitled to an easement of right of way.

WON the respondents are builders in good faith.
What
Ruling:
YES.
38
Ratio:
2.
on TCT No. 96886.
FIRST ISSUE: Joaquin Limense, as the registered owner of Lot 12-C, and his
successors- in-interest, may enclose or fence his land or tenements by means of
walls, ditches, live or dead hedges, or by any other means without detriment to
servitudes constituted thereon. However, although the owner of the property has
the right to enclose or fence his property, he must respect servitudes constituted
thereon.
Easement is a real right on another's property, corporeal and immovable,

whereby the owner of the latter must refrain from doing or allowing
somebody else to do or something to be done on his property, for the benefit
of another person or tenement. It may be continuous or discontinuous,
apparent or non-apparent.
Continuous easements are those the use of which is or may be incessant,

without the intervention of any act of man.
Discontinuous easements are those which are used at intervals and depend
upon the acts of man.
Apparent easements are those which are made known and are continually
kept in view by external signs that reveal the use and enjoyment of the
same.
Non-apparent easements are those which show no external indication of

their existence.
In the present case, the easement of right of way is discontinuous and apparent.
It is discontinuous, as the use depends upon the acts of respondents and other
persons passing through the property. Being an alley that shows a permanent
path going to and from Beata Street, the same is apparent.
Being a discontinuous and apparent easement, the same can be acquired

only by virtue of a title.
In the case at bar, TCT No. 96886, issued in the name of Joaquin Limense,
does not contain any annotation that Lot No. 12-D was given an easement of
right of way over Lot No. 12-C. However, Joaquin Limense and his
successors-in-interests are fully aware that Lot No. 12-C has been
continuously used and utilized as an alley by respondents and residents in
the area for a long period of time.
Mendoza v. Rosel - The existence of the easement of right of way was
therefore known to petitioners who must respect the same, in spite of the
fact that their transfer certificates of title do not mention any burden or
easement. It is an established principle that actual notice or knowledge is as
binding as registration. In the case at bar, Lot No. 12-C has been used as an
alley ever since it was donated by Dalmacio Lozada to his heirs. It is
undisputed that prior to and after the registration of TCT No. 96886, Lot No.
12-C has served as a right of way in favor of respondents and the public in
general. Thus, petitioners are bound by the easement of right of way over
Lot No. 12-C, even though no registration of the servitude has been made
3.
4.
SECOND ISSUE: However, respondents right to have access to the property of

petitioners does not include the right to continually encroach upon the latters
property. It is not disputed that portions of respondents' house on Lot No. 12-D
encroach upon Lot No. 12-C. In order to settle the rights of the parties relative to
the encroachment, we should determine whether respondents were builders in
good faith.
Good faith is an intangible and abstract quality with no technical meaning or

statutory definition; and it encompasses, among other things, an honest
belief, the absence of malice and the absence of a design to defraud or to
seek an unconscionable advantage. It is always presumed, and upon him
who alleges bad faith on the part of the possessor rests the burden of proof.
The portions of Lot 12-D, particularly the overhang, covering 1 meter in width
and 17 meters in length; the stairs; and the concrete structures are all within
the 1/3 share alloted to them by their donor Dalmacio Lozada and, hence,
there was absence of a showing that respondents acted in bad faith when
they built portions of their house on Lot 12-C. The Court was convinced that
respondents' predecessors-in-interest acted in good faith when they built
portions of their house on Lot 12-C.
Using the above parameters, we are convinced that respondents'

predecessors-in-interest acted in good faith when they built portions of their
house on Lot 12-C.
THIRD ISSUE: Respondents being builders in good faith, we shall now discuss
the respective rights of the parties relative to the portions encroaching upon
respondents' house.
Articles 448 and 546 of the New Civil Code provide:

Art. 448. The owner of the land on which anything has been built, sown or
planted in good faith, shall have the right to appropriate as his own the
works, sowing or planting, after payment of the indemnity provided for in
Articles 546 and 548, or to oblige the one who built or planted to pay the
price of the land, and the one who sowed, the proper rent. However, the
builder or planter cannot be obliged to buy the land if its value is
considerably more than that of the building or trees. In such case, he shall
pay reasonable rent, if the owner of the land does not choose to appropriate
the building or trees after proper indemnity. The parties shall agree upon the
terms of the lease and, in case of disagreement, the court shall fix the terms
thereof.
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.
In other words, when the co-ownership is terminated by a partition, and it

appears that the house of an erstwhile co-owner has encroached upon a
portion pertaining to another co-owner, but the encroachment was in good
faith, then the provisions of Article 448 should apply to determine the
respective rights of the parties. In this case, the co-ownership was
terminated due to the transfer of the title of the whole property in favor of
Joaquin Limense.
Under the foregoing provision, petitioners have the right to appropriate said
portion of the house of respondents upon payment of indemnity to
respondents, as provided for in Article 546 of the Civil Code. Otherwise,
petitioners may oblige respondents to pay the price of the land occupied by
their house. However, if the price asked for is considerably much more than
the value of the portion of the house of respondents built thereon, then the
latter cannot be obliged to buy the land. Respondents shall then pay the
reasonable rent to petitioners upon such terms and conditions that they may
agree. In case of disagreement, the trial court shall fix the terms thereof. Of
course, respondents may demolish or remove the said portion of their
house, at their own expense, if they so decide.
The choice belongs to the owner of the land, a rule that accords with the
principle of accession that the accessory follows the principal and not the
other way around. Even as the option lies with the landowner, the grant to
him, nevertheless, is preclusive. He must choose one. He cannot, for
instance, compel the owner of the building to instead remove it from the
land. The obvious benefit to the builder under this article is that, instead of
being outrightly ejected from the land, he can compel the landowner to make
a choice between two options: (1) to appropriate the building by paying the
indemnity required by law, or (2) to sell the land to the builder.
Disposition:
WHEREFORE, the petition is DENIED, the Decision of the Court of Appeals dated
December 20, 2001 in CA-G.R. CV No. 33589 is AFFIRMED with the following
MODIFICATIONS:
1. No co-ownership exists over Lot No. 12-C, covered by TCT No. 96886, between
petitioners and respondents.
2. The case is REMANDED to the Regional Trial Court, Branch 15, Manila, for further
proceedings without further delay to determine the facts essential to the proper
application of Articles 448 and 546 of the Civil Code.
39
25. Briones v. Macabagdal

Petitioners: Briones (2-S lot owners)
Respondents: Macabagdal Spouses (2-R lot owners)
Short facts: Petitioners constructed a house on lot 2-R, which they thought was lot 2S. After being informed of the mix up, petitioner refused to demolish the house and
vacate the property. The respondents, owners of lot 2-R, filed a complaint. RTC ruled
in favour of the respondents and ordered petitioners to either demolish their house or
to pay respondents for the value of the land.
Court held that the petitioners are presumed to be in good faith. There being no
evidence to the contrary, such presumption should be upheld. As builders in good
faith, the land owner is constrained to choose between:
(a) Appropriating the building by paying the proper indemnity; or
(b) Obliging the builder to pay the price of the land.
It is only if the owner chooses to sell the land, and that the builder fails to purchase it
(where its value is not more than the value of the improvements) that the owner may
remove the improvements from the land.
Facts: Macabagdals purchased from Vergon Realty Investments Corporation
(Vergon) Lot No. 2-R. On the other hand, petitioners are the owners of Lot No. 2-S,
which is adjacent to Lot No. 2-R.
After obtaining the necessary building permit and the approval of Vergon, petitioners
constructed a house on Lot No. 2-R which they thought was Lot No. 2-S. After being
informed of the mix up by Vergons manager, Macabagdal immediately demanded
petitioners to demolish the house and vacate the property. Petitioners, however,
refused to heed their demand. Thus, Macabagdal filed an action to recover ownership
and possession of the said parcel of land with the RTC of Makati City.
Petitioners insisted that the lot on which they constructed their house was the lot
which was consistently pointed to them as theirs by Vergons agents over the seven
(7)-year period they were paying for the lot. They interposed the defense of being
buyers in good faith and impleaded Vergon as third-party defendant claiming that
because of the warranty against eviction, they were entitled to indemnity from Vergon
in case the suit is decided against them.
RTC: Ruled in favor of Macabagdals. RTC ordered the petitioners to demolish their
house and vacate the premises, and return the possession to Macabagdals within 30
days from the receipt of the decision. In the alternative, the RTC ruled that the
Macabagdals be compensated by petitioners by the payment of the prevailing price of
the lot involved which should not be less than 1,500 per square meters. Furthermore,
RTC awarded moral damages to Macabagdals.
CA: Affirmed RTCs ruling, stating that the petitioners cannot use the defense of
allegedly being a purchaser in good faith for wrongful occupation of land.
Petitioners contend that they are builders in good faith, having relied with full faith and
confidence in the reputation of Vergons agents when they pointed the wrong property
to them.
Issue: Whether the RTCs ruling is correct? NO
Held: Case remanded to TC.
Ratio:
The trial court erred in outrightly ordering petitioners to vacate the subject property or
to pay respondent spouses the prevailing price of the land as compensation.
Article 527 of the Civil Code presumes good faith, and since no proof exists to show
that the mistake was done by petitioners in bad faith, the latter should be presumed to
have built the house in good faith.
When a person builds in good faith on the land of another, Article 448 5 of the Civil
Code governs. Article 448 covers cases in which the builders, sowers or planters
believe themselves to be owners of the land or, at least, to have a claim of title
thereto.
40
It is only if the owner chooses to sell his land, and the builder or planter fails to
purchase it where its value is not more than the value of the improvements, that
the owner may remove the improvements from the land. The owner is entitled to
such remotion only when, after having chosen to sell his land, the other party fails to
pay for the same.
Moreover, petitioners have the right to be indemnified for the necessary and useful
expenses they may have made on the subject property as provided under Articles
5466 and 5487 of the Civil Code.
Consequently, the Macabagdals have the option to appropriate the house on the
subject land after payment to petitioners of the appropriate indemnity or to oblige
petitioners to pay the price of the land, unless its value is considerably more than the
value of the structures, in which case petitioners shall pay reasonable rent.
In accordance with Depra v. Dumlao, this case must be remanded to the RTC which
shall conduct the appropriate proceedings to assess the respective values of the
improvement and of the land, as well as the amounts of reasonable rentals and
indemnity, fix the terms of the lease if the parties so agree, and to determine other
matters necessary for the proper application of Article 448, in relation to Articles 546
and 548, of the Civil Code.
Considering that petitioners acted in good faith in building their house on the subject
property of the respondent-spouses, there is no basis for the award of moral
damages to respondent-spouses.
The builder in good faith can compel the landowner to make a choice between
appropriating the building by paying the proper indemnity or
obliging the builder to pay the price of the land.
26. Metropolitan Wawterworks v. CA
The choice belongs to the owner of the land, a rule that accords with the principle of
accession, i.e., that the accessory follows the principal and not the other way
around. However, even as the option lies with the landowner, the grant to him,
nevertheless, is preclusive. He must choose one. He cannot, for instance, compel
the owner of the building to remove the building from the land without first exercising
either option.
Short facts: NAWASA/MWSS loss in a case for recovery of ownership and

possession against the City of Dagupan, regarding its waterworks system and was
5 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.
Petitioner: METROPOLITAN WATERWORKS AND SEWERAGE SYSTEM

Respondent: THE COURT OF APPEALS and THE CITY OF DAGUPAN
6 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.
7 ART. 548. Expenses for pure luxury or mere pleasure shall not be refunded to the possessor in
good faith; but he may remove the ornaments with which he has embellished the principal thing
if it suffers no injury thereby, and if his successor in the possession does not prefer to refund the
amount expended.
found to be a possessor in bad faith. NAWASA/MWSS wanted to take the useful

improvements it made and request for reimbursement on its expenses, but the City
appealed. Issue is w/n NAWASA can take the improvements. Court ruled that it
cannot since it was a possessor in bad faith. Article 449 of the Civil Code of the
Philippines provides that "he who builds, plants or sows in bad faith on the land of
another, loses what is built, planted or sown without right to indemnity."
Facts:
The City of Dagupan filed a complaint against NAWASA, now known as MWSS, for
recovery of the ownership and possession of the Dagupan Waterworks System.
NAWASA raised R.A. 1383 which vested upon it the ownership, possession and
control of all waterworks systems throughout the Philippines and as one of its
counterclaims the reimbursement of the expenses it had incurred for necessary and
useful improvements amounting to P255,000.00.
Trial court ruled in favor of the CITY and found NAWASA to be a possessor in bad
faith and hence not entitled to the reimbursement claimed by it.
Issue:
Whether or not MWSS has the right to remove all the useful improvements introduced
by NAWASA to the Dagupan Waterworks System, notwithstanding the fact that
NAWASA was found to be a possessor in bad faith?
Held:
No
Ratio:
Article 449 of the Civil Code of the Philippines provides that "he who builds, plants or
sows in bad faith on the land of another, loses what is built, planted or sown without
right to indemnity." As a builder in bad faith, NAWASA lost whatever useful
improvements it had made without right to indemnity
Moreover, under Article 546 of said code, only a possessor in good faith shall be
refunded for useful expenses with the right of retention until reimbursed; and under
Article 547 thereof, only a possessor in good faith may remove useful improvements if
this can be done without damage to the principal thing and if the person who recovers
the possession does not exercise the option of reimbursing the useful expenses. The
right given a possessor in bad faith is to remove improvements applies only to
improvements for pure luxury or mere pleasure, provided the thing suffers no injury
thereby and the lawful possessor does not prefer to retain them by paying the value
they have at the time he enters into possession (Article 549, Id.).
The decision in the case of Mindanao Academy, Inc. vs. Yap (13 SCRA 190) cited by
41
petitioner does not support its stand. On the contrary, this Court ruled in said case
that "if the defendant constructed a new building, as he alleges, he cannot recover its
value because the construction was done after the filing of the action for annulment,
thus rendering him a builder in bad faith who is denied by law any right of
reimbursement." What this Court allowed appellant Yap to remove were the
equipment, books, furniture and fixtures brought in by him, because they were outside
of the scope of the judgment and may be retained by him.
27. Alviola v. CA
EDITHA ALVIOLA and PORFERIO ALVIOLA, petitioners,
HONORABLE COURT OF APPEALS, FLORENCIA BULING VDA DE TINAGAN,
DEMOSTHENES TINAGAN, JESUS TINAGAN, ZENAIDA T. JOSEP AND
JOSEPHINE TINAGAN, respondents.
Recit ready:
The petitioners built a copra dryer and a store on the subject property. They claim
ownership over the property on the ground that it is public land and that they are
qualified to be beneficiaries of the comprehensive agrarian reform program. The
private respondents claim ownership over the property on the ground that they
inherited the property from their parents. The Supreme Court ruled in favor of the
private respondents. Considering that the petitioners occupation of the properties in
dispute was merely tolerated by private respondents, their argument that they
acquired the property by occupation for 20 years does not have any factual or legal
foundation. Petitioners own evidence recognized the ownership of the land in favor of
the private respondents. In their tax declarations, petitioners stated that the house
and copra dryer are located on the land of the private respondents.
Facts:
Victoria Sonjaconda Tinagan purchased from Mauro Tinagan two (2) parcels
of land situated at Negros Oriental. Victoria and her son Agustin Tinagan,
took possession of said parcels of land.
Sometime later, petitioners Editha and Porfera Alviola occupied portions
thereof whereat they built a copra dryer and put up a store wherein they
engaged in the business of buying and selling copra.
In 1975, Victoria died. In the same year, Agustin died, survived by herein
private respondents, namely his wife, Florencia Buling Vda. de Tinagan and
their children Demosthenes, Jesus, Zenaida and Josephine, all surnamed
Tinagan.
The following year, petitioner Editha assisted by her husband filed a
complaint for partition and damages before the CFI. She claimed to be an
acknowledged natural child of deceased Agustin Tinagan. She demanded
the delivery of her shares in the properties left by the deceased.
The case was dismissed by the trial court on the ground that recognition of
natural children may be brought only during the lifetime of the presumed
parent and petitioner Editha Alviola did not fall in any of the exceptions
enumerated in Article 285 of the Civil Code.
Despite the ruling, the petitioners Alviola remained in possession of the
property.
The private respondents filed a complaint for recovery of possession against
Editha and her husband Porferio Alviola before the RTC. They prayed that
they be declared absolute owners of the said parcels of land, and that
petitioners be ordered to vacate the same, to remove their copra dryer and
store, to pay actual damages (in the form of rentals), moral and punitive
damages, litigation expenses and attorneys fees.
Petitioners contend that they own the improvements in the disputed
properties which are still public land; that they are qualified to be
beneficiaries of the comprehensive agrarian reform program and that they
are rightful possessors by occupation of the said properties for more than
twenty years.
Issue:
Who has better right over the property?
Held: Private respondents (Wife and children of Agustin)
Ratio
Petitioners own evidence recognized the ownership of the land in favor of Victoria
Tinagan. In their tax declarations, petitioners stated that the house and copra dryer
are located on the land of Victoria S. Tinagan/Agustin Tinagan. By acknowledging that
the disputed portions belong to Victoria/Agustin Tinagan in their tax declarations,
petitioners claim as owners thereof must fail.
Considering that the petitioners occupation of the properties in dispute was merely
tolerated by private respondents, their posture that they have acquired the property
by occupation for 20 years does not have any factual or legal foundation. There was
bad faith on the part of the petitioners when they constructed the copra dryer and
store on the disputed portions since they were fully aware that the parcels of land
belonged to Victoria Tinagan.
There was likewise bad faith on the part of the private respondents, having
knowledge of the arrangement between petitioners and Victoria Tinagan relative to
the construction of the copra dryer and store. Thus, for purposes of indemnity, Article
448 of the New Civil Code should be applied. However, the copra dryer and the store,
as determined by the trial court and respondent court, are transferable in nature.
Thus, it would not fall within the coverage of Article 448. As the noted civil law
authority, Senator Arturo Tolentino, aptly explains: To fall within the provision of this
42
Article, the construction must be of permanent character, attached to the soil with an
idea of perpetuity; but if it is of a transitory character or is transferable, there is no
accession, and the builder must remove the construction. The proper remedy of the
landowner is an action to eject the builder from the land.
28. Arangote v. Maglunob
ELVIRA T. ARANGOTE,
Petitioner,
SPS. MARTIN MAGLUNOB and LOURDES S. MAGLUNOB, and ROMEO SALIDO,
Respondents.
Recit Ready: Elvira and her husband filed a complaint for Quieting of Title against
respondents. The respondents are the heirs of Esperanza from whom Elvira obtained
title to the land. Elvira contends that she is the registered owner of the land, and
Esperanza has relinquished all her rights over it already. Elvira has also built a house
over said parcel. The respondents, on the other hand, contend that they are coowners of the land and that Elvira, thru fraud, was able to obtain the land from
Esperanza. Elvira claims that she is a possessor in good faith and is thus entitled to
the protection given by the Civil Code. SC held that she is not a possessor in good
faith. In the present case, when respondents came to know that an OCT over the
subject property was issued and registered in Elviras name, they brought a
Complaint before the Lupon of Barangay challenging the title of Elvira to the subject
property on the basis that said property constitutes the inheritance of respondent,
together with their grandaunt Esperanza, so Esperanza had no authority to relinquish
the entire subject property to petitioner. From that moment, the good faith of the
petitioner had ceased. In the present case, when respondents came to know that an
OCT over the subject property was issued and registered in Elviras name, they
brought a Complaint before the Lupon of Barangay challenging the title of Elvira to
the subject property on the basis that said property constitutes the inheritance of
respondent, together with their grandaunt Esperanza, so Esperanza had no authority
to relinquish the entire subject property to petitioner. From that moment, the good
faith of the petitioner had ceased.
Facts:
Elvira T. Arangote is the registered owner of a land covered by an Original

Certificate of Title. She is petitioner.
Respondents Martin III and Romeo are first cousins and the grandnephews
of Esperanza, from whom petitioner acquired the subject property.
Elvira and her husband filed a complaint against the respondents for
Quieting of Title, Declaration of Ownership and Possession.
They alleged that Esperanza inherited the subject property from her uncle
by virtue of a Partition Agreement. Complaint further stated that Esperanza
executed a Last Will and Testament bequeathing the subject property to
Elvira and her husband, but it was never probated. It also alleged that
Esperanza renounced, relinquished, waived and quitclaimed all her rights,
share, interest and participation whatsoever in the subject property in favor
of Elvira and her husband.
Elvira and her husband constructed a house on the subject property.
Respondents, however, together with some hired persons, entered the
subject property and built a hollow block wall behind and in front of
petitioners house, which effectively blocked the entrance to its main door.
Respondents averred that they co-owned the subject property with
Esperanza. They alleged that Elvira and her husband, by means of fraud,
undue influence and deceit were able to make Esperanza, who was already
old and illiterate, affix her thumbmark to the Affidavit wherein she renounced
all her rights and interest over the subject property
MCTC ruled in favor of Elvira and her husband. RTC reversed.
Elvira contends that the OCT was issued under her name and was
registered in the Registry of Deeds of Aklan, on 20 April 1993. From 20 April
1993 until the institution of Civil Case No. 156 more than one year had
already elapsed. Therefore her title cannot be attacked already.
Elvira claims that she is a possessor in good faith and, thus, entitled to the
rights provided for under Articles 448 and 546 of the Civil Code.
43
Issue: W/N Elvira is protected by the Civil Code, being a possessor in good faith. NO
Ratio:
Possessor in good faith
Possession in good faith ceases from the moment defects in the title are
made known to the possessor by extraneous evidence or by a suit for
recovery of the property by the true owner. Every possessor in good faith
becomes a possessor in bad faith from the moment he becomes aware that
what he believed to be true is not so.
In the present case, when respondents came to know that an OCT over the
subject property was issued and registered in Elviras name, they brought a
Complaint before the Lupon of Barangay challenging the title of Elvira to the
subject property on the basis that said property constitutes the inheritance of
respondent, together with their grandaunt Esperanza, so Esperanza had no
authority to relinquish the entire subject property to petitioner. From that
moment, the good faith of the petitioner had ceased.
Elvira cannot be entitled to the rights under Articles 448 and 546 of the Civil
Code, because the rights mentioned therein are applicable only to builders in
good faith and not to possessors in good faith.
Moreover, she cannot be considered a builder in good faith of the house on

the subject property. In the context that such term is used in particular
reference to Article 448 of the Civil Code, a builder in good faith is one
who, not being the owner of the land, builds on that land, believing
himself to be its owner and unaware of any defect in his title or mode
of acquisition.
The builder in good faith, then, can compel the landowner to make a choice
between appropriating the building by paying the proper indemnity or
obliging the builder to pay the price of the land. The choice belongs to the
owner of the land, a rule that accords with the principle of accession, i.e.,
that the accessory follows the principal and not the other way around. Even
as the option lies with the landowner, the grant to him, nevertheless, is
preclusive. He must choose one. He cannot, for instance, compel the owner
of the building to instead remove it from the land. In order, however, that the
builder can invoke that accruing benefit and enjoy his corresponding right to
demand that a choice be made by the landowner, he should be able to prove
good faith on his part.
Good faith, here understood, is an intangible and abstract quality with no
technical meaning or statutory definition, and it encompasses, among other
things, an honest belief, the absence of malice and the absence of design to
defraud or to seek an unconscionable advantage. An individuals personal
good faith is a concept of his own mind and, therefore, may not conclusively
be determined by his protestations alone. It implies honesty of intention, and
freedom from knowledge of circumstances which ought to put the holder
upon inquiry. The essence of good faith lies in an honest belief in the validity
of ones right, ignorance of a superior claim, and absence of intention to
overreach another. Applied to possession, one is considered in good faith if
he is not aware that there exists in his title or mode of acquisition any flaw
which invalidates it.
In this case, the subject property waived and quitclaimed by Esperanza to
the petitioner and her husband in the Affidavit was only covered by a tax
declaration in the name of Esperanza. Petitioner did not even bother to look
into the origin of the subject property and to probe into the right of
Esperanza to relinquish the same. Thus, when petitioner and her husband
built a house thereon in 1989 they cannot be considered to have acted in
good faith as they were fully aware that when Esperanza executed an
Affidavit relinquishing in their favor the subject property the only proof of
Esperanzas ownership over the same was a mere tax declaration. This fact
or circumstance alone was enough to put the petitioner and her husband
under inquiry. Settled is the rule that a tax declaration does not prove
ownership. It is merely an indicium of a claim of ownership. Payment of
taxes is not proof of ownership; it is, at best, an indicium of possession in the
concept of ownership. Neither tax receipts nor a declaration of ownership for
taxation purposes is evidence of ownership or of a right to possess realty
when not supported by other effective proofs.
Passing of title of an immovable (other issue)
Title to immovable property does not pass from the donor to the donee
by virtue of a Deed of Donation until and unless it has been accepted
in a public instrument and the donor duly notified thereof. The

acceptance may be made in the very same instrument of donation. If
the acceptance does not appear in the same document, it must be
made in another. Where the Deed of Donation fails to show the
acceptance, or where the formal notice of the acceptance, made in a
separate instrument, is either not given to the donor or else not noted in
the Deed of Donation and in the separate acceptance, the donation is
null and void.
In the present case, the said Affidavit, which is tantamount to a Deed of
Donation, met the first requisite, as it was notarized; thus, it became a
public instrument. Nevertheless, it failed to meet the aforesaid second
and third requisites. The acceptance of the said donation was not made
by the petitioner and her husband either in the same Affidavit or in a
separate public instrument. As there was no acceptance made of the
said donation, there was also no notice of the said acceptance given to
the donor, Esperanza. Therefore, the Affidavit executed by
Esperanza in favor of petitioner and her husband is null and void.
It is true that the acceptance of a donation may be made at any time
during the lifetime of the donor. And granting arguendo that such
acceptance may still be admitted in evidence on appeal, there is still
need for proof that a formal notice of such acceptance was
received by the donor and noted in both the Deed of Donation and
the separate instrument embodying the acceptance.
29. Mores v. Yu-go
44
to pay them the reasonable value of the improvements.

Facts:
G.R. No. 172292| July 23, 2010

Petitioner:ALIDA MORES
Respondents: SHIRLEY M. YU-GO, MA. VICTORIA M. YU-LIM, and MA. ESTRELLA
M. YU,
Ponente: CARPIO, J.
Summary: The Yu siblings allege that the Sps. Mores were allowed to live on the
subject property subject to the condition that when the former needs it, the latter will
vacate. When the Yu siblings demanded the spouses to vacate, the latter asked for
extensions and after the final demand the spouses still refused. It was also said that
the spouses demolished the improvements found in the property. So, the Yu siblings
filed a case for injuction against the spouses asking for the value of the demolished
improvement plus damages. The TC ruled in favor of the spouses saying that they
were in good faith. The CA disagreed with the TCs ruling and said that the
relationship between the parties is that of a lessor-lessee. Thus, the lessor has the
right to remove the improvements made after reimbursing the lessee of 50% of the
value of the improvement. It also granted damages in favor of the Yu Siblings. The SC
agreed with the CA saying that the spouses cannot be considered to be in good faith
because they have no pretension to be owners of the property. But the grant of
damages was disallowed because the Sps. Mores removed only the improvements
they introduced without destroying the principal building, after the Yu siblings refused
On January 21, 1998, Shirley M. Yu-Go, Ma. Victoria M. Yu-Lim and Ma.
Estrella M. Yu (Yu siblings) filed a Complaint for Injunction and Damages
with Prayer for Issuance of a TRO and Preliminary Injunction before the
RTC-Naga City against spouses Antonio and Alida Mores (Sps. Mores).
Yu siblings alleged that they co-owned a parcel of land located in Sto.
Tomas, Camarines Sur on which a building of strong materials (subject
property) was built.
In March 1983, Sps. Mores pleaded to the Yu siblings that they be allowed to
stay in the subject property in the meantime that they did not own a house
yet.
Since appellee Antonio Mores used to be an errand boy of Yu siblings
family, they readily agreed without asking for any rental but subject only to
the condition that the said stay would last until anyone of the Yu siblings
would need the subject property.
In November 1997, the Yu siblings informed the Sps. Mores that they were
already in need of the subject property and, besides, Sps. Mores already
have their own house in Villa Grande Homes, Naga City.
Despite repeated demand to vacate, the Sps. Mores refused and spouses
even hired some laborers and started demolishing the improvements on the
subject property.
Yu siblings protest fell on deaf ears because Sps. Mores continued their
demolition and even took away and appropriated for themselves the
materials derived from such unlawful demolition.
Consequently, Yu siblings instituted the said action for injunction where they
also prayed for the reimbursement of the value of the residential building
illegally demolished and damages.
Sps. Mores claimed that appellee Antonio Mores, who was Yu siblings
uncle, used to be the assistant manager and cashier of Yu siblings father at
their Caltex Service Station until the latters death. The Caltex Filling Station
had stopped operation and was just rented out to Herce Trucking Service.
Upon the expiration of such lease contract, Sps. Mores were allowed to
occupy the subject property as their dwelling places. They were the ones
who caused its renovation consisting of a 3-bedroom annex, a covered
veranda and a concrete hollow block fence, at their own expense, and with
Yu siblings consent, which renovation was made without altering the form
and substance of the subject property. They denied that Yu siblings made a
demand for them to vacate the subject property, insisting that it was merely a
sort of reminder that sooner or later Sps. Mores should yield possession
thereof since, after all, they had already bought a second-hand house which
was undergoing repair. Sps. Mores argued that what they removed was
merely the improvements made on the subject property, which removal had
not caused any substantial damage thereto as, in fact, it remained intact. By
way of counterclaims, they demanded payment of actual damages,

attorneys fees and litigation expenses.
The trial court ruled in favor of the Sps. Mores saying that there are builders
in good faith. The CA disagreed with the trial court saying that the
relationship between the parties partake of the nature of a lessor and lessee
making Art. 1678 applicable to the present case. Thus, the right of
appropriating the useful improvements after reimbursing 50% of its value or
the right of removal of useful improvements are given to the lessor. It
awarded moral damages in favor of the Yu siblings.
45
Disposition: WHEREFORE, we GRANT the petition. We AFFIRM with

MODIFICATION the Decision of the Court of Appeals promulgated on 26 August 2005
as well as the Resolution promulgated on 14 March 2006 in CA-G.R. CV No. 76076.
Article 1678 of the Civil Code is applicable to the present case. The award of moral
damages worth P100,000 to the Yu siblings is deleted.
30. Reynante v. CA
Issue: W/N the Sps. Mores were builders in good faith
Petitioner: Jose Reynante

Respondent: Court of Appeals and Heirs of Gorgonio Carlos and Concepcion Carlos
Ponente: Paras
Held: NO
Ratio:
Reynante was the caretaker of a certain fishpond owned by Don Cosme Carlos. The
fishpond was covered by a TCT. Don Cosme allowed Reynante to construct a nipa
hut near the fishpond. After Don Cosme died, Reynante and Don Cosme executed an
agreement whereby Reynante will turnover possession of the fishpond to the heirs.
Reynante did not leave. The heirs filed an action for forcible entry.
The good faith referred to by Alida Mores was about the building of the improvements
on the leased subject property. However, tenants like the spouses Mores cannot be
said to be builders in good faith as they have no pretension to be owners of the
property. Indeed, full reimbursement of useful improvements and retention of the
premises until reimbursement is made applies only to a possessor in good faith, i.e.,
one who builds on land with the belief that he is the owner thereof. It does not apply
where ones only interest is that of a lessee under a rental contract; otherwise, it would
always be in the power of the tenant to improve his landlord out of his property. The
appellate court is correct in ruling that Article 16788 of the Civil Code should apply in
the present case.
There is no reason for the appellate courts award of moral damages to the Yu
siblings. The Sps. Mores removed only the improvements they introduced without
destroying the principal building, after the [Yu siblings] refused to pay them the
reasonable value of the improvements. When the spouses Mores demanded
reimbursement, the Yu siblings should have offered to pay the spouses Mores onehalf of the value of the improvements. Since the Yu siblings failed to make such offer,
the spouses Mores had the right to remove the improvements.
1.
2.
Facts:
8 Article 1678. If the lessee makes, in good faith, useful improvements which are suitable to the
use for which the lease is intended, without altering the form or substance of the property
leased, the lessor upon the termination of the lease shall pay the lessee one-half of the value of
the improvements at that time. Should the lessor refuse to reimburse said amount, the lessee
may remove the improvements, even though the principal thing may suffer damage thereby. He
shall not, however, cause any more impairment upon the property leased than is necessary.With
regard to ornamental expenses, the lessee shall not be entitled to any reimbursement, but he
may remove the ornamental objects, provided no damage is caused to the principal thing, and
the lessor does not choose to retain them by paying their value at the time the lease is
extinguished. (n)
The action cannot prosper as the action for forcible entry merely involves the
issue of prior possession, not ownership. It was proved that Reynante had
prior possession.
The land in dispute is not covered by the TCT but was merely an alluvial
formation. An accretion does not automatically become registered land just
because the lot which receives such accretion is covered by a Torrens Title.
Such accretion to registered land does not preclude acquisition of the
additional area by another person through prescription. Because petitioners
have been occupying the land for more than 50 years, they acquired
ownership over it by virtue of prescription.
More than 50 years ago, petitioner Jose Reynante was taken as tenant by the
late Don Cosme Carlos, owner and father-in-law of herein private respondents,
over a fishpond located at Barrio Liputan, Meycauayan, Bulacan with an area of
188.711 square meters, more or less and covered by Transfer Certificate of Title
No. 25618, Land Registry of Bulacan.
During the tenancy, petitioner Jose Reynante constructed a nipa hut where he
and his family lived and took care of the nipa palms (sasahan) he had planted on
lots 1 and 2 covering an area of 5,096 square meters and 6,011 square meters
respectively. These lots are located between the fishpond covered by TCT No.
25618 and the Liputan (formerly Meycauayan) River.
Petitioner harvested and sold said nipa palms without interference and
prohibition from anybody. Neither did the late Don Cosme Carlos question his
right to plant the nipa palms near the fishpond or to harvest and appropriate them
as his own.
After the death of Don Cosme Carlos, his heirs (private respondents'
predecessors-in-interest) entered into a written agreement denominated as
"SINUMPAANG SALAYSAY NG PAGSASAULI NG KARAPATAN" with petitioner
Jose Reynante whereby the latter for and in consideration of the sum of
P200,000.00 turned over the fishpond he was tenanting to the heirs of Don
Cosme Carlos and surrendered all his rights therein as caretaker or "bantaykasama at tagapamahala"
o Pursuant to the said written agreement, petitioner surrendered the
fishpond and the two huts located therein to private respondents.
Private respondents thereafter leased the said fishpond to one Carlos de la Cruz.
Petitioner continued to live in the nipa hut constructed by him on lots 1 and 2 and
to take care of the nipa palms he had planted therein.
Private respondents formally demanded that the petitioner vacate said portion
since according to them petitioner had already been indemnified for the
surrender of his rights as a tenant.
o Despite receipt thereof, petitioner refused and failed to relinquish
possession of lots 1 and 2.
Private respondents filed a complaint for forcible entry with preliminary
mandatory injunction against petitioner alleging that the latter by means of
strategy and stealth, took over the physical, actual and material possession of
lots 1 and 2 by residing in one of the kubos or huts bordering the Liputan River
and cutting off and/or disposing of the sasa or nipa palms adjacent thereto.
o The trial court rendered its decision dismissing the complaint and finding
that petitioner had been in prior possession of lots 1 and 2.
Private respondents appealed to the Regional Trial Court which reversed the
earlier decision. CA affirmed.
46
2nd issue:
Issues:
1.
2.
Who between the petitioner and private respondents has prior physical
possession of lots 1 and 2; Petitioner
Whether or not the disputed lots belong to private respondents as a result of
accretion.
Held/Ratio:
1st issue:
An action for forcible entry is merely a quieting process and actual title to the
property is never determined. A party who can prove prior possession can
recover such possession even against the owner himself.
Whatever may be the character of his prior possession, if he has in his favor
priority in time, he has the security that entitles him to remain on the property
until he is lawfully ejected by a person having a better right by accion
publiciana or accion reivindicatoria. On the other hand, if a plaintiff cannot prove

prior physical possession, he has no right of action for forcible entry and detainer
even if he should be the owner of the property.
Hence, the Court of Appeals could not legally restore private respondents'
possession over lots 1 and 2 simply because petitioner has clearly proven that he
had prior possession over lots 1 and 2.
o The evidence on record shows that petitioner was in possession of the
questioned lots for more than 50 years. It is undisputed that he was the
caretaker of the fishpond owned by the late Don Cosme Carlos for more
than 50 years and that he constructed a nipa hut adjacent to the
fishpond and planted nipa palms therein.
o An examination of the document signed by the defendant shows that
what was surrendered to the plaintiffs was the fishpond and not
the "sasahan" or the land on which he constructed his hut where
he now lives. That is a completely different agreement in which a
tenant would return a farm or a fishpond to his landlord in return for the
amount that the landlord would pay to him as a disturbance
compensation.
o Moreover, when the plaintiffs leased the fishpond to Mr. Carlos de La
Cruz there was no mention that the lease included the hut constructed
by the defendant and the nipa palms planted by him, a circumstance
that gives the impression that the nipa hut and the nipa palms were not
included in the lease to Mr. de la Cruz, which may not belong to the
plaintiffs.
With regard to the second issue, it must be noted that the disputed lots
involved in this case are not included in Transfer Certificate of Title No.
25618 as per verification made by the Forest Management Bureau, Department
of Environment and Natural Resources.
The respondent Court of Appeals ruled that lots 1 and 2 were created by
alluvial formation and hence the property of private respondents pursuant
to Article 457 of the New Civil Code.9
Accretion benefits a riparian owner when the following requisites are present:
(1) that the deposit be gradual and imperceptible;
(2) that it resulted from the effects of the current of the water; and
(3) that the land where accretion takes place is adjacent to the bank of a river.
Granting without conceding that lots 1 and 2 were created by alluvial formation
and while it is true that accretions which the banks of rivers may gradually
receive from the effect of the current become the property of the owner of the
9 Art. 457. To the owners of lands adjoining the banks of rivers belong the accretion which they
gradually receive from the effects of the current of the waters.
banks, such accretion to registered land does not preclude acquisition of

the additional area by another person through prescription.
This Court ruled in the case of Ignacio Grande, et al. v. Hon. Court of Appeals, et
al., G.R. No. L-17652, June 30, 1962, 115 Phil. 521 that:
o An accretion does not automatically become registered land just
because the lot which receives such accretion is covered by a
Torrens Title. Ownership of a piece of land is one thing; registration
under the Torrens system of that ownership is another. Ownership over
the accretion received by the land adjoining a river is governed by the
Civil Code. Imprescriptibility of registered land is provided in the
registration law. Registration under the Land Registration and Cadastral
Act does not vest or give title to the land, but merely confirms and,
thereafter, protects the title already possessed by the owner, making it
imprescriptible by occupation of third parties. But to obtain this
protection, the land must be placed under the operation of the
registration laws, wherein certain judicial procedures have been
provided.
Assuming private respondents had acquired the alluvial deposit (the lot in
question), by accretion, still their failure to register said accretion for a
period of fifty (50) years subjected said accretion to acquisition through
prescription by third persons.
It is undisputed that petitioner has been in possession of the subject lots for more
than fifty (50) years and unless private respondents can show a better title over
the subject lots, petitioner's possession over the property must be respected.
Disposition: PREMISES CONSIDERED, the decision of the respondent Court of

Appeals dated February 28, 1990 is REVERSED and SET ASIDE and the decision of
the Municipal Trial Court of Meycauayan, Bulacan, Branch I, is hereby REINSTATED.
SO ORDERED.
31. Vda. de Nazareno v. CA
Petitioners: DESAMPARADO VDA. DE NAZARENO and LETICIA NAZARENO
Respondents: Spouses SALASALAN, Spouses RABAYA, AVELINO LABIS, HON.
HILARIO, ROLLEO I. IGNACIO, ALBERTO M. GILLERA and HON. PALAD, JR.
Recitready: Private respondents were lessors of land allegedly owned by petitioners
predecessor-in-interest. When private respondents stopped paying rentals, they were
sued by petitioners. Private respondents were ejected. Petitioners moved for
execution of judgment however their ownership over the lot was contested by private
respondents before the Bureau of Lands. The Bureau of Lands ruled that the
accretion formed PUBLIC land, not private land under Art 457 of the civil code. The
SC ruled that it cannot accrue to petitioners because it was formed not through
gradual or imperceptible deposition of soil nor through the action of the waters of the
47
river. The land was formed because of the dumping of sawdust by the milling
operations of a lumber company.
Facts:
A parcel of land in Telegrapo, Puntod, CDO was formed as a result of sawdust

dumped into the dried-up Balacanas Creek and along the banks of the Cagayan
river.
Private respondents Salasalan and Rabaya leased the lots on which their houses
stood from Antonio Nazareno, petitioners' predecessor-in-interest. Private
respondents allegedly stopped paying rentals. Antonio Nazareno and petitioners
filed a case for ejectment against them. The MTC ruled against private
respondents. RTC affirmed.
Private respondents filed a case for annulment of judgment but was dismissed by
the RTC. Petitioners moved for execution but private respondents filed another
case for certiorari with prayer for RO and writ of PI, but was again dismissed.
Before he died, Antonio Nazareno caused the approval by the Bureau of Lands
of the survey plan to perfect his title over the accretion area. However, before it
could be approved private respondents protested before the Bureau.
Land Investigator recommended that the survey plan in the name of Antonio
Nazareno, be cancelled and that private respondents be directed to file
appropriate public land applications. Consequently, the Bureau Regional Director
ordered the amendment of the survey plan by segregating the areas occupied by
the private respondents who, if qualified, may file public land applications.
Decision affirmed by the OIC of the Bureau. Antonio moved for reconsideration
but the MR was denied.
Petitioners filed a case for annulment of order of investigation, recommendation
of the land investigator, decision of Bureau director. Dismissed for failure to
exhaust administrative remedies. CA affirmed saying the MR cannot be
considered as an appeal to the Office of the Secretary of Agriculture and Natural
Resources, as mandated by C.A. No. 141 since it had been acted upon by
respondent Undersecretary Ignacio in his capacity as Officer-in-Charge of the
Bureau of Lands and not as Undersecretary acting for the Secretary of
Agriculture and Natural Resources. Hence this petition.
ISSUE: WON the subject land is public land. YES IT IS PUBLIC LAND. Petitioners
cannot claim the rights of a riparian owner.
Petitioners: the subject land is private land being an accretion to his titled property,
applying Article 457 "To the owners of lands adjoining the banks of rivers belong the
accretion which they gradually receive from the effects of the current of the waters."
RATIO:
Accretion, as a mode of acquiring property requires:
(1) that the deposition of soil or sediment be gradual and imperceptible;

(2) that it be the result of the action of the waters of the river (or sea); and
(3) that the land where accretion takes place is adjacent to the banks or rivers (or the
sea coast).
However, the first 2 requisites are not met. They admit that the accretion was
formed by the dumping of boulders, soil and other filling materials on portions of
the Balacanas Creek and the Cagayan River bounding their land. It cannot be
claimed that the accumulation of such boulders, soil and other filling materials
was gradual and imperceptible, resulting from the action of the waters or the
current of the Balacanas Creek and the Cagayan River. "current" indicates the
participation of the body of water in the ebb and flow of waters due to high and
low tide.
Petitioners are estopped from denying the public character of the subject land, as
well as the jurisdiction of the Bureau of Lands. Nazarenos mere filing of said
Application constituted an admission that the land being applied for was public
land.
It is this Court's irresistible conclusion, therefore, that the accretion was manmade or artificial. The requirement that the deposit should be due to the effect of
the current of the river is indispensable. This excludes from Art. 457 of the Civil
Code all deposits caused by human intervention. Alluvion must be the exclusive
work of nature. Where the land was not formed solely by the natural effect of the
water current of the river bordering said land but is also the consequence of the
direct and deliberate intervention of man, it was deemed a man-made accretion
and, as such, part of the public domain. Here, the subject land was the direct
result of the dumping of sawdust by the Sun Valley Lumber Co. consequent to its
sawmill operations.
32. Bagaipo v. CA
G.R. No. 116290. December 8, 2000
PETITIONER: DIONISIA P. BAGAIPO
RESPONDENT: LEONOR LOZANO
PONENTE: QUISUMBING
SHORT VERSION: Bagaipo owns a parcel of land. Lozano owns a parcel of land
located across and opposite the southeast portion of Bagaipos land facing the Davao
River. Bagaipo filed a case claiming that as a result of a change in course of the said
river, her property became divided into three lots, namely: Lots 415-A, the area
presently occupied by Bagaipo, 415-B, which cut across Bagaipos land was taken up
by the new course of the Davao River and 415-C, the land presently located across
the river and parallel to Bagaipos property. The issue is whether Bagaipo may lay
claim over such parcels of land pursuant to Article 461. The SC answered in the
negative. Article 461 is not applicable. The decrease in petitioners land area and the
48
corresponding expansion of respondents property were the combined effect of

erosion and accretion respectively. Art. 461 of the Civil Code is inapplicable.
FACTS:
Petitioner Dionisia P. Bagaipo is the registered owner of Lot No. 415, a 146,900
square meter agricultural land situated in Ma-a, Davao City while Respondent Leonor
Lozano is the owner of a registered parcel of land located across and opposite the
southeast portion of petitioners lot facing the Davao River.
On May 26, 1989, Bagaipo filed a complaint for Recovery of Possession with
Mandatory Writ of Preliminary Injunction and Damages against Lozano for:
(1) the surrender of possession by Lozano of a certain portion of land measuring
29,162 square meters which is supposedly included in the area belonging to Bagaipo
under TCT No. T-15757; and
(2) the recovery of a land area measuring 37,901 square meters which Bagaipo
allegedly lost when the Davao River traversed her property.
Bagaipos Contention: As a result of a change in course of the said river, her
property became divided into three lots, namely: Lots 415-A, the area presently
occupied by Bagaipo, 415-B, which cut across Bagaipos land was taken up by the
new course of the Davao River and 415-C, the land presently located across the river
and parallel to Bagaipos property.
Lozanos Contention: The land claimed by Bagaipo is actually an accretion to their
titled property. He asserted that the Davao River did not change its course and that
the reduction in Bagaipos domain was caused by gradual erosion due to the current
of the Davao River. Lozano added that it is also because of the rivers natural action
that silt slowly deposited and added to his land over a long period of time. He further
averred that this accretion continues up to the present and that registration
proceedings instituted by him over the alluvial formation could not be concluded
precisely because it continued to increase in size.
The trial court concluded that the applicable law is Article 457 of the New Civil
Code and not Art. 461and dismissed the complaint. On appeal, the Court of Appeals
affirmed the decision of the trial court, hence the present case.
ISSUE:
a)
b)
Whether or not there was a change in course of the Davao River such that
petitioner owns the abandoned river bed pursuant to Article 461 of the Civil
Code? NO.
Whether private respondent owns Lot 415-C in accordance with the principle
of accretion under Article 457? YES.
HELD:
A)
B)
The decrease in petitioners land area and the corresponding expansion of

respondents property were the combined effect of erosion and accretion
respectively. Art. 461 of the Civil Code is inapplicable. Petitioner cannot
claim ownership over the old abandoned riverbed because the same is
inexistent. The riverbeds former location cannot even be pinpointed with
particularity since the movement of the Davao River took place gradually
over an unspecified period of time, up to the present.
The rule is well-settled that accretion benefits a riparian owner when the
following requisites are present: 1) That the deposit be gradual and
imperceptible; 2) That it resulted from the effects of the current of the water;
and 3) That the land where accretion takes place is adjacent to the bank of
the river. These requisites were sufficiently proven in favor of respondents. In
the absence of evidence that the change in the course of the river was
sudden or that it occurred through avulsion, the presumption is that the
change was gradual and was caused by alluvium and erosion.
As to Lot 415-C, which petitioner insists forms part of her property under TCT No. T15757, it is well to recall our holding in C.N. Hodges vs. Garcia, 109 Phil. 133, 135:
The fact that the accretion to his land used to pertain to plaintiffs estate, which is
covered by a Torrens certificate of title, cannot preclude him (defendant) from being
the owner thereof. Registration does not protect the riparian owner against the
diminution of the area of his land through gradual changes in the course of the
adjoining stream. Accretions which the banks of rivers may gradually receive from the
effect of the current become the property of the owners of the banks (Art. 366 of the
old Civil Code; Art. 457 of the new). Such accretions are natural incidents to land
bordering on running streams and the provisions of the Civil Code in that respect are
not affected by the Land Registration Act.
49
Milagros Francisco,* Celedonio Francisco, Herminigildo Francisco; Ramon Tresvalles,

Roberto Tajonera, Natividad Ining-Ibea (Deceased) Survived By Edilberto Ibea,
Josefa Ibea, Martha Ibea, Carmen Ibea, Amparo Ibea-Fernandez, Henry Ruiz,
Eugenio Ruiz And Pastor Ruiz; Dolores Ining-Rimon (Deceased) Survived By Jesus
Rimon, Cesaria Rimon Gonzales And Remedios Rimon Cordero; And Pedro Ining
(Deceased) Survived By Elisa Tan Ining (Wife) And Pedro Ining, Jr.
Respondents: Leonardo R. Vega, Substituted By Lourdes Vega, Restonilo I. Vega,
Crispulo M. Vega, Milbuena Vega-Restituto, And Lenard Vega
Ponente: J. Del Castillo
Short facts:
Leon died without issue. His heirs are his siblings, Romana and Gregoria, who thus
inherited the property in equal shares. The heirs of Romana are herein respondents,
while the heirs of Gregoria are the petitioners. Leonardo (ROMANA SIDE) filed a
case for partition, recovery of ownership and possession, with damages, against
GREGORIAs heirs. Leonardo mentioned that he kept asking for partition but this was
unheeded. It was in 1979, Lucimo Sr (Antipolo, who is a kid of Gregoria was survived
by this man and others) claimed absolute ownership and deprived Leonardo of the
benefits of the land. Lucimo argues that Enriquez already bought the land from Leon,
and that Lucimo side had bought the property from Enriquez. RTC held that there was
never any sale to an Enriquez but GREGORIA HEIRS but because off adverse
possession for 30 years, the action of Leonardo had already prescribed. CA held that
prescription began to run not from Leons death in 1962, but from Lucimo Sr.s
execution of the Affidavit of Ownership of Land in 1979, which amounted to a
repudiation of his co-ownership of the property with Leonardo.
==========================================================
IV.F.1 Co-ownership: Elements
33. Robles v. CA
==========================================================
IV.F.2 Co-ownership: How Created
34. Ining v. Vega
SC held that no prescription shall run in favor of one of the co-heirs against the others
so long as he expressly or impliedly recognizes the co-ownership. The act of making
the affidavit equated to a repudiation. ) For prescription to set in, the repudiation must
be done by a co-owner. HOWEVER, Lucimo Sr. is not a co-owner of the property.
Indeed, he is not an heir of Gregoria; he is merely Antipolos son-in-law, being married
to Antipolos daughter Teodora. One who is merely related by affinity to the decedent
does not inherit from the latter and cannot become a co-owner of the decedents
property. Consequently, he cannot effect a repudiation of the co-ownership of the
estate that was formed among the decedents heirs.
Petitioners: Antipolo Ining (Deceased), Survived By Manuel Villanueva, Teodora

Villanueva-Francisco, Camilo Francisco, Adolfo Francisco, Lucimo Francisco, Jr.,
Facts:
Leon Roldan (Leon), married to Rafaela Menez (Rafaela), is the owner of a

parcel of land in Kalibo, Aklan covered by OCT RO-630. Leon and Rafaela
died without issue. Leon was survived by his siblings Romana Roldan
(Romana) and Gregoria Roldan Ining (Gregoria), who are now both
deceased.
RESPONDENTS are the heirs of ROMANA. PETITIONERS are the heirs of

GREGORIA.
In 1997, acting on the claim that one-half of subject property belonged to him
as Romanas surviving heir, Leonardo filed with the RTC of Kalibo a case for
partition, recovery of ownership and possession, with damages, against
Gregorias heirs. Leonardo alleged that on several occasions, he demanded
the partition of the property but Gregorias heirs refused to heed his
demands; that the matter reached the level of the Lupon Tagapamayapa,
which issued a certification to file a court action sometime in 1980; that
Gregorias heirs claimed sole ownership of the property; that portions of the
property were sold to Tresvalles and Tajonera, which portions must be
collated and included as part of the portion to be awarded to Gregorias
heirs. Leonardo thus prayed that he be declared the owner of half of the
subject property.
In their Answer, herein petitioners claimed that Leonardo had no cause of

action against them; that they have become the sole owners of the subject
property; that they were in continuous, actual, adverse, notorious and
exclusive possession of the property with a just title; that they have been
paying the taxes on the property; that Leonardos claim is barred by estoppel
and laches.
The trial court dismissed the complaint of Leonardo on the ground that his
right right of action has long prescribed under Article 1141 of the New Civil
Code. Declaring Lot 1786 covered by OCT No. RO-630 (24071) to be the
common property of the heirs of Gregoria Roldan Ining and by virtue
whereof, OCT No. RO-630 (24071) is ordered cancelled and the Register of
Deeds of the Province of Aklan is directed to issue a transfer certificate of
title to the heirs of Gregoria. It also found that the April 4, 1943 and
November 25, 1943 deeds of sale to be spurious. It concluded that Leon
never sold the property to Enriquez, and in turn, Enriquez never sold the
property to Lucimo Sr., hence, the subject property remained part of Leons
estate at the time of his death in 1962. Leons siblings, Romana and
Gregoria, thus inherited the subject property in equal shares. Leonardo and
the respondents are entitled to Romanas share as the latters successors.
50
However, the trial court held that Leonardo had only 30 years from
Leons death in 1962 or up to 1992 within which to file the partition
case. Since Leonardo instituted the partition suit only in 1997, the
same was already barred by prescription. It held that under Article 1141 of
the Civil Code, an action for partition and recovery of ownership and
possession of a parcel of land is a real action over immovable property
which prescribes in 30 years. In addition, the trial court held that for his long
inaction, Leonardo was guilty of laches as well. Consequently, the property
should go to Gregorias heirs exclusively.
The CA did not agree with the trial courts pronouncement that
Leonardos action for partition was barred by prescription. The CA
declared that prescription began to run not from Leons death in 1962,
but from Lucimo Sr.s execution of the Affidavit of Ownership of Land
in 1979, which amounted to a repudiation of his co-ownership of the
property with Leonardo. Applying the fifth paragraph of Article 494 of the
Civil Code, which provides that "[n]o prescription shall run in favor of a coowner or co-heir against his co-owners or co-heirs so long as he expressly
or impliedly recognizes the co-ownership," the CA held that it was only
when Lucimo Sr. executed the Affidavit of Ownership of Land in 1979
and obtained a new tax declaration over the property (TD 16414) solely
in his name that a repudiation of his co-ownership with Leonardo was
made, which repudiation effectively commenced the running of the 30year prescriptive period under Article 1141.
Issue:
W/N case should be dismissed on the ground of prescription/laches. NO
Ratio:
Since Leon died without issue, his heirs are his siblings, Romana and Gregoria, who
thus inherited the property in equal shares. In turn, Romanas and Gregorias heirs
the parties herein became entitled to the property upon the sisters passing. Under
Article 777 of the Civil Code, the rights to the succession are transmitted from the
moment of death.
Gregorias and Romanas heirs are co-owners of the subject property.Thus,

having succeeded to the property as heirs of Gregoria and Romana, petitioners and
respondents became co-owners thereof. As co-owners, they may use the property
owned in common, provided they do so in accordance with the purpose for which it is
intended and in such a way as not to injure the interest of the co-ownership or prevent
the other co-owners from using it according to their rights. They have the full
ownership of their parts and of the fruits and benefits pertaining thereto, and may
alienate, assign or mortgage them, and even substitute another person in their
enjoyment, except when personal rights are involved. Each co-owner may demand at
any time the partition of the thing owned in common, insofar as his share is
concerned. Finally, no prescription shall run in favor of one of the co-heirs
against the others so long as he expressly or impliedly recognizes the coownership.
51
that the filing of Civil Case No. 5275 in 1997, or just under 20 years counted from
1979, is clearly within the period prescribed under Article 1141.
What escaped the trial and appellate courts notice, however, is that while it may be
argued that Lucimo Sr. performed acts that may be characterized as a
repudiation of the co-ownership, the fact is, he is not a co-owner of the
property. Indeed, he is not an heir of Gregoria; he is merely Antipolos son-inlaw, being married to Antipolos daughter Teodora. Under the Family Code, family
relations, which is the primary basis for succession, exclude relations by affinity.
Art. 150. Family relations include those:

For prescription to set in, the repudiation must be done by a co-owner.
(1) Between husband and wife;
Time and again, it has been held that "a co-owner cannot acquire by prescription the
share of the other co-owners, absent any clear repudiation of the co-ownership. In
order that the title may prescribe in favor of a co-owner, the following requisites must
concur: (1) the co-owner has performed unequivocal acts of repudiation amounting to
an ouster of the other co-owners; (2) such positive acts of repudiation have been
made known to the other co-owners; and (3) the evidence thereof is clear and
convincing."
From the foregoing pronouncements, it is clear that the trial court erred in
reckoning the prescriptive period within which Leonardo may seek partition
from the death of Leon in 1962. Article 1141 and Article 494 (fifth paragraph)
provide that prescription shall begin to run in favor of a co-owner and against
the other co-owners only from the time he positively renounces the coownership and makes known his repudiation to the other co-owners.
Lucimo Sr. challenged Leonardos co-ownership of the property only sometime in

1979 and 1980, when the former executed the Affidavit of Ownership of Land,
obtained a new tax declaration exclusively in his name, and informed the latter
before the Lupon Tagapamayapa of his 1943 purchase of the property. These
apparent acts of repudiation were followed later on by Lucimo Sr.s act of withholding
Leonardos share in the fruits of the property, beginning in 1988, as Leonardo himself
claims in his Amended Complaint. Considering these facts, the CA held that
prescription began to run against Leonardo only in 1979 or even in 1980 when it
has been made sufficiently clear to him that Lucimo Sr. has renounced the coownership and has claimed sole ownership over the property. The CA thus concluded
(2) Between parents and children;

(3) Among other ascendants and descendants; and
(4) Among brothers and sisters, whether of the full or half blood.
In point of law, therefore, Lucimo Sr. is not a co-owner of the property; Teodora
is. Consequently, he cannot validly effect a repudiation of the co-ownership,
which he was never part of. For this reason, prescription did not run adversely
against Leonardo, and his right to seek a partition of the property has not been
lost.
In fine, since none of the co-owners made a valid repudiation of the existing coownership, Leonardo could seek partition of the property at any time.
Disposition:
WHEREFORE, the Petition is DENIED. The assailed March 14, 2006 Decision and
the September 7, 2006 Resolution of the Court of Appeals in CA-G.R. CV No.
74687are AFFIRMED.
==========================================================
IV.F.3 Co-ownership: Rights of Co-owners
35. Paulmitan v. CA
215 SCRA 866 , November 25, 1992
Petitioner: Donato S. Paulitan, Juliana P. Fanesa and Rodolfo Fanesa
Respondents: CA, Alicio Paulmitan, Elena Paulmitan, Abelino Paulmitan, Anita
Paulmitan, Baking Paulmitan, Adelina Paulmitan and Anito Paulmitan
Summary:
Agatona died leaving 2 sons: Pascual and Donato. Pascual died shortly after leaving
7 children. Donato executed a deed of sale of a lot left by Agatona in favour of his
daughter, Juliana. The same property was forfeited by the provincial government due
to non-payment of taxes, but was subsequently redeemed by Juliana. The heirs of
Pascual claims to be co-owners of the subject lot. However, Juliana alleged that she
is the sole owner of the same lot due to (1) the deed of sale executed in her favour by
her father Donato and (2) her redemption of the same property from the provincial
government. Court held that the respondents (heirs of Pascual) and Juliana are
coowners of the property. (1) Even if a coowner sells the whole property as his, the
sale will affect only his own share but not those of the other coowners who did not
consent to the sale. This is because under Art. 493 of the Civil Code, the sale or other
disposition affects only his undivided share and the transferee gets only what would
correspond to his grantor in the partition of the thing owned in common. (2) Also, the
redemption of the land made by Fanesa did not terminate the coownership nor give
her title to the entire land subject of the coownership. Nevertheless, she did acquire
the right to be reimbursed for half of the redemption price she paid to the provincial
governmentl on behalf of her coowners.
Facts:
Agatona Paulmitan died leaving two parcels of land: Lot No. 757 (herein referred as
Lot A) and Lot No. 1091 (Lot B). She was survived by her two legitimate children
Pascual and Donato. Pascual died shortly after Agatona and was survived by his
children (herein respondents): Alicio, Elena, Abelino, Adelina, Anita, Baking and Anito.
Donato, on the other hand, is one of the petitioners herein, together with his daughter
Juliana Fanesa and her husband Roldolfo Fanesa.
Donato executed an Affidavit of Declaration of Heirship extrajudicially adjudicating
unto himself Lot A based on the claim that he is the only surviving heir of Agatona. It
was duly registered with the Registry of Deeds, and a TCT was accordingly issued.
As regards Lot B, Donato executed a Deed of Sale over the same in favour of his
daughter Juliana Fanesa.
52
Meanwhile, Lot B was forfeited and sold at a public auction due to non-payment of
taxes. The same lot was redeemed by Juliana Fanesa from the Provincial
Government of Negros.
Upon learning of these transactions, the children of Pascual filed a complaint to
partition the properties plus damages.
Lot A: The petition was dismissed by the lower court due to prescription. The
complaint was filed more than 11 years after the issuance of a TCT to Donato. Such
order has become final after the respondents failure to appeal therefrom.
Lot B: The lower court rules that the sale by Donato to his daughter Juliana did not
prejudice the rights of the heirs of Pascual. And the repurchase by Juliana of the land
from the provincial government did not vest in Juliana exclusive ownership over the
entire land but only gave her the right to be reimbursed for the amount paid to redeem
the property.
Issue:
WON Juliana became the sole owner of Lot B due to
1.
2.
Deed of Sale executed by Donato in her favour. NO

Redemption of said property from the Provincial Government of Negros. NO
Held:
1.
From the time of the death of Agatona to the subsequent passing away of
her son Pascual, the estate remained unpartitioned. Article 1078 of the Civil
Code provides: Where there are two or more heirs, the whole estate of the
decedent is, before its partition, owned in common by such heirs, subject to
the payment of debts of the deceased. Donato and Pascual Paulmitan were
therefore, coowners of the estate left by their mother as no partition was ever
made. When Pascual Paulmitan died intestate, his children, the
respondents, succeeded him in the coownership of the disputed property.
Pascual Paulmitans right of ownership over an undivided portion of the
property passed on to his children, who, from the time of Pascuals death,
became coowners with their uncle Donato over the disputed decedent
estate.
When Donato Paulmitan sold Lot B to his daughter Juliana Fanesa, he was
only a coowner with respondents and as such, he could only sell that portion
which may be allotted to him upon termination of the coownership. The sale
did not prejudice the rights of respondents to one half (1/2) undivided share
of the land which they inherited from their father. It did not vest ownership in
the entire land with the buyer but transferred only the sellers proindiviso
share in the property and consequently made the buyer a coowner of the
land until it is partitioned.
As early as 1923, it has already been ruled that even if a coowner sells the
whole property as his, the sale will affect only his own share but not those of
the other coowners who did not consent to the sale. This is because under
Art. 493 of the Civil Code, the sale or other disposition affects only his
undivided share and the transferee gets only what would correspond to his
grantor in the partition of the thing owned in common.
2.
The redemption of the land made by Fanesa did not terminate the coownership nor give her title to the entire land subject of the coownership.
Under the Civil Code: Art 488.Each coowner shall have a right to compel the
other coowners 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 coownership.
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 coheir
or coowner of the property in its totality does not vest in him ownership over
it. The provision does not give to the redeeming coowner the right to the
entire property. It does not provide for a mode of terminating a coownership.
Although Juliana Fanesa did not acquire ownership over the entire lot by
virtue of the redemption she made, nevertheless, she did acquire the right to
be reimbursed for half of the redemption price she paid to the Provincial
Government of Negros Occidental on behalf of her coowners. Until
reimbursed, Fanesa holds a lien upon the subject property for the amount
due her.
53
undivided interest in the co-owned property is absolute in accordance with the wellsettled doctrine that a co-owner has full ownership of his pro-indiviso share and has
the right to alienate, assign or mortgage it, and substitute another person in its
enjoyment. The vendee (Petitioners) of an undivided interest steps into the shoes of
the vendor as co-owner and acquires a proportionate abstract share in the property
held in common. In this case, Regalado merely became a new co-owner of Lot 162 to
the extent of the shares which original co-owners could validly convey.
Facts:
Salome, Consorcia, Alfredo, Maria, Rosalia, Jose, Quirico and Julita, all
surnamed Bornales, were the original co-owners of a lot.
Salome sold part of her share to Soledad Daynolo. The land was specified
in the deed of sale. Thereafter, Daynolo immediately took possession of the
land. A few years later, Daynolo and her husband, mortgaged this portion to
Jose Regalado. Daynolo died. The husband was able to redeem the
mortgaged portion of land. He then executed a Deed of Discharge of
Mortgage in favor of Soledads heirs. The heirs subsequently sold this to
herein petitioners, the spouses Manuel Del Campo and Salvacion Quiachon.
Another sale by the co-owners of the entire lot: Later on, three of the eight
co-owners (Salome, Consorcia and Alfredo) sold a large part of said lot to
Jose Regalado. Meanwhile, Jose Regalado was able to obtain a title in his
name of the whole lot previously co-owned. The whole was subdivided and
covered in further titles in his name.
Thus, petitioners Manuel and Salvacion del Campo brought a complaint.
They claim that they owned an area located within Lot 162-C-6 which was
erroneously included in TCT in the name of Regalado.
TC held that while Salome could alienate her pro-indiviso share in Lot 162,
she could not validly sell an undivided part thereof by metes and bounds to
Daynolo, from whom petitioners derived their title.
Issues: 1. Is the sale by a co-owner (Salome) of a physical portion of an undivided

property held in common be valid?
36. Del Campo v. CA
Ruling: 1. YES. Sale valid up to portion of entitlement.
Petitioner: Spouses Manuel and Salvacion Del Campo

Respondent: Hon. Court of Appeals and Heirs of Jose Regalado
Ponente: Quisumbing J.
Ratio:
Short Facts and Doctrine/s: Salome, a co-owner, sold her pro-indiviso share in a lot
to Daynolo. Daynolos heirs sold the same portion of land to herein petitioners, Sps
Manuel and Del Campo. Another sale was made by the original co-owners to
Regalado. Regalado had the title reconstituted and subdivided which necessarily
included the portion earlier sold to petitioners. TC said the sale was void as Salome
could not alienate her pro-indiviso share. Held: Salomes right to sell part of her
There can be no doubt that the transaction entered into by Salome and
Soledad could be legally recognized in its entirety since the object of the sale
did not even exceed the ideal shares held by the former in the co-ownership.
As a matter of fact, the deed of sale executed between the parties expressly
stipulated that the portion of Lot 162 sold to Soledad would be taken from
Salomes 4/16 undivided interest in said lot, which the latter could validly
transfer in whole or in part even without the consent of the other co-owners.
Salomes right to sell part of her undivided interest in the co-owned property
is absolute in accordance with the well-settled doctrine that a co-owner has
full ownership of his pro-indiviso share and has the right to alienate, assign
or mortgage it, and substitute another person in its enjoyment.
The vendee of an undivided interest steps into the shoes of the vendor as
co-owner and acquires a proportionate abstract share in the property held in
common.
Resultantly, Soledad became a co-owner of Lot 162 when the sale was
made in her favor. Consequently, Salome, Consorcia and Alfredo could not
legally sell the shares pertaining to Soledad since a co-owner cannot
alienate more than his share in the co-ownership.
Even if a co-owner sells the whole property as his, the sale will affect only
his own share but not those of the other co-owners who did not consent to
the sale. Since a co-owner is entitled to sell his undivided share, a sale of
the entire property by one co-owner will only transfer the rights of said coowner to the buyer, thereby making the buyer a co-owner of the property.
In this case, Regalado merely became a new co-owner of Lot 162 to the
extent of the shares which Salome, Consorcia and Alfredo could validly
convey. Soledad retained her rights as co-owner and could validly transfer
her share to petitioners. The logical effect of the second disposition is to
substitute petitioners in the rights of Soledad as co-owner of the land. These
rights are preserved notwithstanding the issuance of TCT in Regalados
name.
Be that as it may, we find that the area subject matter of this petition had
already been effectively segregated from the mother lot even before title was
issued in favor of Regalado. During the intervening years, in no instance
during this time did respondents or Regalado, for that matter, question
petitioners right over the land in dispute.
Where the transferees of an undivided portion of the land allowed a coowner of the property to occupy a definite portion thereof and had not
disturbed the same for a period too long to be ignored, the possessor is in a
better condition or right than said transferees. Such undisturbed possession
had the effect of a partial partition of the co-owned property which entitles
the possessor to the definite portion which he occupies. Conformably,
petitioners are entitled to the disputed land, having enjoyed uninterrupted
possession thereof for a total of 49 years up to the present.
54
Disposition: WHEREFORE, the petition is GRANTED. The assailed decision of the

Court of Appeals in CA-G.R. CV No. 30438 is REVERSED and SET ASIDE. The
parties are directed to cause a SURVEY for exact determination of their respective
portions in Lot 162-C-6. Transfer Certificate of Title No. 14566 is declared
CANCELLED and the Register of Deeds of Capiz is ordered to ISSUE a new title in
accordance with said survey, upon finality of this decision.
Costs against respondents.
SO ORDERED.
37. Arambulo v. nolasco
Recitation Ready Digests: The parties here co-owner 2 parcels of land. Petitioners
were authorized by some co-owners (their siblings and their mother) to sell the land,
while respondents (their brother-in-law and their nephews and their nieces) withhold
their consent to sell the land. Thus, petitioners filed this petition for relief under Art.
491 which authorizes court to grant reliefs in case a co-owner withholds consents in
making alterations to the property. Correct? No. The Court ruled that Art. 491 does not
apply. Art. 493 does, which in effect states that each co-owner has the full ownership
of his share. In case he alienates the property, the effect of the portion shall be limited
to the portion which may be allotted to him. The co-owners cannot be ordered to sell
their portion of the coowned properties. In other words, the co-owners cannot be
ordered to sell their portion of the coowned properties. What is the remedy of
the co-owners, partition the property.
Ponente: Perez J.
Facts:
Petitioners and their mother, and their 6 siblings (the Arambulos) were co-owners
of 2 parcels of land. Upon the death of one of their siblings (Iraida Arambulo
Nolasco).
Her heirs (the respondents/petitioners brother-in-law and 4 nephews and nieces)

became co-owners of the property.
Sometime after all the Arambulo siblings and their mother authorized petitioners
to sell the parcel of land. But the respondents withheld their consent to sell their
respective shares.
Thus, petitioners filed a petition for relief under Article 491, alleging that the sale
of subject properties constitutes alteration; and under Article 491 of the Civil
Code, if one or more coowners shall withhold their consent to the alterations in
the thing owned in common, the courts may afford adequate relief.
Eventually, the trial court ruled in favor of petitioners and ordered respondents to
give their consent to the sale.
On appeal, the CA reversed the trial courts decision and held that under Article
493, the respondents had the full ownership of their undivided interest in the
subject properties, thus, they cannot be compelled to sell their undivided shares
in the properties.
But CA also implied applicability of Article 491 by observing that petitioners failed
to show how respondents withholding of their consent would prejudice the
common interest over the subject properties.
Hence, this instant petition.
Issue: May coowners be compelled by the court to give their consent to the sale of
their shares in the coowned properties.
Held: Art. 491 clearly does not apply in cases of sale of the properties. It states
Art. 491. None of the coowners shall, without the consent of the others,
make alterations in the thing owned in common, even though benefits for
all would result therefrom. However, if the withholding of the consent by one
or more of the coowners is clearly prejudicial to the common interest, the
courts may afford adequate relief.
55
may demand at any time partition of the thing owned in common insofar as his share
is concerned. Corollary to this rule, Article 498 of the Civil Code states that whenever
the thing is essentially indivisible and the coowners cannot agree that it be allotted to
one of them who shall indemnify the others, it shall be sold and its proceeds
accordingly distributed.
Partition is resorted to
(a) when the right to partition the property is invoked by any of the coowners
but because of the nature of the property, it cannot be subdivided or its
subdivision would prejudice the interests of the coowners, and
(b)
the coowners are not in agreement as to who among them shall be allotted
or assigned the entire property upon proper reimbursement of the co
owners.
38. Extraordinary Dev't v. Samson-Bico
G.R. No. 191090 | October 13, 2014
Upon the other hand, The rights of a coowner of a certain property are clearly
specified in Article 493
Art. 493. Each coowner shall have the full ownership of his part and of
the fruits and benefits pertaining thereto, and he may therefore alienate,
assign or mortgage it, and even substitute another person in its
enjoyment, except when personal rights are involved. But the effect of the
alienation or the mortgage, with respect to the coowners, shall be limited
to the portion which may be allotted to him in the division upon the
termination of the coownership.
Authorities agree that coowners (such as respondents) have over their part, the
right of full and absolute ownership. Such right is the same as that of individual
owners which is not diminished by the fact that the entire property is coowned with
others. That part which ideally belongs to them, or their mental portion, may be
disposed of as they please, independent of the decision of their coowners.
So we rule in this case. The co-owners cannot be ordered to sell their portion of
the coowned properties.
Further, insofar as the sale of coowned properties is concerned, there is no
common interest that may be prejudiced should one or more of the coowners
refuse to sell the coowned property as each co-owner is an absolute owner of his
respective share.
Obiter:
What is the remedy for petitioners? File a suit for partition. Under article 494, no
coowner shall be obliged to remain in the coownership, and that each coowner
Petitioner: EXTRAORDINARY DEVELOPMENT CORPORATION

Respondents: HERMINIA F. SAMSON-BICO and ELY B. FLESTADO
Short Facts/Doctrines: Apolonio owned a parcel of land, which was inherited by his
grandchildren, heirs of Juan and respondents, upon his death and the death of his
wife and children. The grandchildren held the property in coownership, but without the
consent of respondents, the heirs of Juan sold the entire property to petitioner EDC.
The SC affirmed the existence of a co-ownership and validated the DoAS, but only to
the extent of the half of the heirs of Juan. Article 493 of the Civil Code recognizes the
absolute right of a coowner to freely dispose of his pro indiviso share as well as the
fruits and other benefits arising from that share, independently of the other coowners.
Since the coowner/vendors undivided interest could properly be the object of
the contract of sale between the parties, what the vendee obtains by virtue of
such a sale are the same rights as the vendor had as co-owner, in an ideal
share equivalent to the consideration given under their transaction.
FACTS:
Apolonio Ballesteros and Maria Membrebe were married. They had 2 children Juan,
who married Leonarda and had 6 children, and Irenea, who married Santiago and
had 2 children, Herminia Samson-Bico (respondent) and Merlita Flestado, who
married Ely Flestado (respondent). During Apolonios lifetime, he owned a parcel of
land in Rizal, covered by Tax Declaration. When he and Maria died, the property was
inherited by Juan and Irenea, which was then passed on to their heirs who held the
property in co-ownership, upon the latters deaths. In 2002, the heirs of Juan, without
the consent of respondents, executed in favor of EDC a Deed of Absolute Sale
covering the subject property. When it was still a contract to sell, respondents wrote to
EDC informing them about the existence of coownership over the property. EDC was
able to cause the registration of the DoAS with the Office of the Provincial Assessor
Rizal and transfer the tax declaration in its name. This prompted the respondents to
file the Complaint for annulment of the contract and the TC and the reconveyance of
possession with damages.
ISSUE:
1. Whether a co-ownership exists
56
2. NO. EDC avers that said judicial admission should not bind it because it was an
innocent purchaser in good faith. In a contract of sale, it is essential that the seller is
the owner of the property he is selling. As correctly held by the CA, under Article 1458
of the Civil Code, the principal obligation of a seller is to transfer the ownership of the
property sold. Also, Article 1459 of the Civil Code provides that the thing must be licit
and the vendor must have a right to transfer the ownership thereof at the time it is
delivered. The execution by appellants Ballesteros of the Deed of Absolute Sale
over the subject property which they do not exclusively own but is admittedly
co-owned by them together with the [respondents], was valid only to the extent
of the formers undivided one-half share thereof, as they had no title or interest
to transfer the other one-half portion which pertains to the [respondents]
without the latters consent. It is an established principle that no one can give what
one does not have nemo dat quod non habet. Accordingly, one can sell only what
one owns or is authorized to sell, and the buyer can acquire no more than what the
seller can transfer legally. Thus, since appellant EDCs rights over the subject
property originated from sellers-appellants Ballesteros, said corporation merely
stepped into the shoes of its sellers and cannot have a better right than what its
sellers have.
2. Whether EDC is entitled to the entire property
HELD:
1. YES. Respondents were able to convincingly establish their co-ownership over
one-half of the subject property. Herminia has successfully established her
successional rights over the subject property through her clear testimony and
admitted by the opposing counsel. We also took into consideration the admissions
made by the heirs of Juan in their Answer to the Complaint filed by respondents
before the trial court. Furthermore, Juan Ballesteros testified that respondents are coowners of the subject property. (When asked why despite his knowledge of the coownership, the DoAS was not signed by respondents, Juan replied, Nakalimutan
ko.)
Having established respondents co-ownership rights over the subject property, CAs
ruling sustaining the validity of the Deed of Absolute Sale with respect to the rights of
the heirs of Juan over one-half of the property was correct. Article 493 of the Civil
Code recognizes the absolute right of a coowner to freely dispose of his pro indiviso
share as well as the fruits and other benefits arising from that share, independently of
the other coowners.10
We are not unaware of the principle that a co-owner cannot rightfully dispose of a
particular portion of a co-owned property prior to partition among all the co-owners.
However, this should not signify that the vendee does not acquire anything at all in
case a physically segregated area of the co-owned lot is in fact sold to him. Since the
coowner/vendors undivided interest could properly be the object of the
10
The Answer submitted by the heirs of Juan, as well as the testimony of Juan
constitute judicial admissions which conclusively binds the party making it. He cannot
thereafter take a position contradictory to, or inconsistent with his pleadings.
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.
contract of sale between the parties, what the vendee obtains by virtue of such
a sale are the same rights as the vendor had as co-owner, in an ideal share
equivalent to the consideration given under their transaction. In other words, the
vendee steps into the shoes of the vendor as co-owner and acquires a proportionate
abstract share in the property held in common.
57
Petition denied. The sale is valid but only to the extent of the half pertaining to the
heirs of Juan. Under the doctrine of unjust enrichment, the heirs are ordered to return
the amount paid by EDC representing half of the purchase price.
39. Adille v. CA
G.R. No. L-44546 January 29, 1988
PETITIONER: RUSTICO ADILLE
RESPONDENT: THE HONORABLE COURT OF APPEALS, EMETERIA ASEJO,
TEODORICA ASEJO, DOMINGO ASEJO, JOSEFA ASEJO and SANTIAGO ASEJO
SHORT FACTS AND HELD: There was a woman who had two husbands. With the
first husband, she produced the Petitioner. The second husband, the Respondents.
Meanwhile, this woman owned a land and sold the same to a third person with right of
repurchase. However, when the woman died, it was Petitioner who by himself
repurchased the land and later on he executed an affidavit of sole ownership and
registered the land unto himself alone. Eventually, the other heirs (Respondents)
learned of the registration so they filed an action to cancel the title. Now Petitioner
claims prescription almost on similar grounds with the previous case, i.e. the
registration constituted constructive notice to the other heirs, if not to the world.
The property in dispute was originally owned by Felisa Alzul who got married
twice. Her child in the first marriage was petitioner Rustico Adile and her
children in the second marriage were respondents Emetria Asejo et al.
During her lifetime, Felisa Alzul sold the property in pacto de retro with a
three-year repurchase period.
Felisa died before she could repurchase the property.
During the redemption period, Rustico Adille repurchased the property by
himself alone at his own expense, and after that, he executed a deed of
extra-judicial partition representing himself to be the only heir and child of his
mother Felisa. Consequently, he was able to secure title in his name alone.
His half-siblings, herein respondents, filed a case for partition and
accounting claiming that Rustico was only a trustee on an implied trust when
he redeemed the property, and thus, he cannot claim exclusive ownership of
the entire property.
It is the petitioner's contention that the property subject of dispute devolved
upon him upon the failure of his co-heirs to join him in its redemption within
the period required by law. He relies on the provisions of Article 1515 of the
old Civil Article 1613 of the present Code, giving the vendee a retro the right
to demand redemption of the entire property.
ISSUE:
May a co-owner acquire exclusive ownership over the property held in common?
HELD:
The right of repurchase may be exercised by a co-owner with aspect to his share
alone. While the records show that the 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.
The issues are (1) whether or not a co-owner may acquire exclusive ownership over
the property held in common and (2) whether or nor Rustico had constituted himself a
negotiorum gestor.
Necessary expenses may be incurred by one co-owner, subject to his right to collect
reimbursement from the remaining co-owners. There is no doubt that redemption of
property entails a necessary expense. Under the Civil Code:
(1) No. The right to repurchase may be exercised by a co-owner with respect to his
share alone. Although Rustico Adille redeemed the property in its entirety, shouldering
the expenses did not make him the owner of all of it. (2) Yes. The petitioner, in taking
over the property, did so on behalf of his co-heirs, in which event, he had constituted
himself a negotiorum gestor under Art 2144 of the Civil Code, or for his exclusive
benefit, in which case, he is guilty of fraud, and must act as trustee, the respondents
being the beneficiaries, pursuant to Art 1456.
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.
FACTS:
The result is that the property remains to be in a condition of co-ownership. While a

vendee a retro, under Article 1613 of the Code, "may not be compelled to consent to
a partial redemption," the redemption by one co-heir or co-owner of the property in its
totality does not vest in him ownership over it. Failure on the part of all the co-owners
to redeem it entitles the vendee a retro to retain the property and consolidate title
thereto in his name. 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 coownership.
Neither does the fact that the petitioner had succeeded in securing title over the
parcel in his name terminate the existing co-ownership. While his half-brothers and
sisters are liable to him for reimbursement as and for their shares in redemption
expenses, he cannot claim exclusive right to the property owned in common.
Registration of property is not a means of acquiring ownership. It operates as a mere
notice of existing title, that is, if there is one.
The petitioner must then be said to be a trustee of the property on behalf of the
private respondents. The Civil Code states:
ART. 1456. If property is acquired through mistake or fraud, the person
obtaining it is, by force of law, considered a trustee of an implied trust for the
benefit of the person from whom the property comes.
Fraud attended the registration of the property. The petitioner's pretension that he was
the sole heir to the land in the affidavit of extrajudicial settlement he executed
preliminary to the registration thereof betrays a clear effort on his part to defraud his
brothers and sisters and to exercise sole dominion over the property. The aforequoted
provision therefore applies.
It is the view of the respondent Court that the petitioner, in taking over the property,
did so either on behalf of his co-heirs, in which event, he had constituted himself
a negotiorum gestor under Article 2144 of the Civil Code, or for his exclusive benefit,
in which case, he is guilty of fraud, and must act as trustee, the private respondents
being the beneficiaries, under the Article 1456. The evidence, of course, points to the
second alternative the petitioner having asserted claims of exclusive ownership over
the property and having acted in fraud of his co-heirs. He cannot therefore be said to
have assume the mere management of the property abandoned by his co-heirs, the
situation Article 2144 of the Code contemplates. In any case, as the respondent Court
itself affirms, the result would be the same whether it is one or the other. The
petitioner would remain liable to the Private respondents, his co-heirs.
This Court is not unaware of the well-established principle that prescription bars any
demand on property (owned in common) held by another (co-owner) following the
required number of years. In that event, the party in possession acquires title to the
property and the state of co-ownership is ended . In the case at bar, the property was
58
registered in 1955 by the petitioner, solely in his name, while the claim of the private
respondents was presented in 1974. Has prescription then, set in?
We hold in the negative. Prescription, as a mode of terminating a relation of coownership, must have been preceded by repudiation (of the co-ownership). The act of
repudiation, in turn is subject to certain conditions: (1) a co-owner repudiates the coownership; (2) such an act of repudiation is clearly made known to the other coowners; (3) the evidence thereon is clear and conclusive, and (4) he has been in
possession through open, continuous, exclusive, and notorious possession of the
property for the period required by law.
The instant case shows that the petitioner had not complied with these requisites. We
are not convinced that he had repudiated the co-ownership; on the contrary, he had
deliberately kept the private respondents in the dark by feigning sole heirship over the
estate under dispute. He cannot therefore be said to have "made known" his efforts to
deny the co-ownership. Moreover, one of the private respondents, Emeteria Asejo, is
occupying a portion of the land up to the present, yet, the petitioner has not taken
pains to eject her therefrom. As a matter of fact, he sought to recover possession of
that portion Emeteria is occupying only as a counterclaim, and only after the private
respondents had first sought judicial relief.
It is true that registration under the Torrens system is constructive notice of title, but it
has likewise been our holding that the Torrens title does not furnish a shield for
fraud. It is therefore no argument to say that the act of registration is equivalent to
notice of repudiation, assuming there was one, notwithstanding the long-standing rule
that registration operates as a universal notice of title.
For the same reason, we cannot dismiss the private respondents' claims commenced
in 1974 over the estate registered in 1955. While actions to enforce a constructive
trust prescribes in ten years, reckoned from the date of the registration of the
property, we, as we said, are not prepared to count the period from such a date in this
case. We note the petitioner's sub rosa efforts to get hold of the property exclusively
for himself beginning with his fraudulent misrepresentation in his unilateral affidavit of
extrajudicial settlement that he is "the only heir and child of his mother Feliza with the
consequence that he was able to secure title in his name also." Accordingly, we hold
that the right of the private respondents commenced from the time they actually
discovered the petitioner's act of defraudation. According to the respondent Court of
Appeals, they "came to know [of it] apparently only during the progress of the
litigation." Hence, prescription is not a bar.
Moreover, and as a rule, prescription is an affirmative defense that must be pleaded
either in a motion to dismiss or in the answer otherwise it is deemed waived, and
here, the petitioner never raised that defense. There are recognized exceptions to this
rule, but the petitioner has not shown why they apply.
59
40. Cabales v. CA
ISSUE:
G.R. NO. 162421 | August 31, 2007

Petitioners: NELSON CABALES and RITO CABALES
Respondents: COURT OF APPEALS, JESUS FELIANO and ANUNCIACION
FELIANO
1. Whether Rito and Nelson Cabales are co-owners of the subject land
SUMMARY:
Cabales died leaving a parcel of land to his heirs, which includes his wife Saturnina
and sons Alberto and Rito (minor). Alberto and 2 other sons sold the land but was
later redeemed by them with Saturnina paying for Albertos share, the latter dying
prior to redemption. All the heirs sold the property again this time to respondents, with
Saturnina acting on behalf of Albertos heirs (wife and son Nelson) and Rito. Nelson
wanted to redeem the property years later. The SC held that Rito and Nelson are still
co-owners of the land sold because Saturnina did not have authority to sell their proindiviso shares. As to Rito, the power of alienation is not included in Saturninas
plenary power of administration. As to Nelson, Saturnina is not the proper legal
guardian rather, Nelsons mother. The SC also held that Nelson can no longer
exercise his right of legal redemption, this being available only within 30 days from
notification of the sale in writing.
FACTS:
Rufino Cabales died in 1966 leaving a parcel of land in Southern Leyte, covered by
tax declaration, to his wife, Saturnina, and children, Bonifacio, Albino, Francisco,
Leonora, Alberto and Rito. Three out of six children, brothers Bonifacio, Albino and
Alberto, as co-owners, sold the property to Dr. Cayetano Corrompido for P2,000 with
right to repurchase within 8 years. The proceeds were divided among the three. In
1972, Alberto died, leaving his wife and son, petitioner Nelson.
Within the redemption period, Bonifacio and Albino tendered their payment of
P666.66 each to Corrompido. The latter released the document of sale with pacto de
retro after Saturnina paid for Albertos share. Saturnina and four children then sold the
parcel of land to Jesus and Anunciacion Feliano. The Deed of Sale provided that the
shares of the heirs of Alberto, and Rito, who are all still minors, on the property were
to be held in trust by the vendee to be delivered to them upon reaching the age of 21.
The Register of Deeds then issued OCT in the name of the Felianos. Saturnina and
her 4 children executed an affidavit to the effect that Nelson would receive the amount
of P176.34 only considering that Saturnina paid the late Albertos obligation to
Corrompido. Rito, then 24-years old, acknowledged receipt of P1143.00 from Feliano,
representing his share in the proceeds of the sale.
In 1988, Saturnina died. Nelson, upon learning from his uncle Rito of the sale of the
property, signified his intention to redeem the subject land. He filed before the RTC of
Maasin, Southern Leyte, a complaint for redemption of the subject land plus
damages.
2. Whether Nelson has the right of legal redemption

HELD:
1. Yes. When Rufino Cabales died intestate, his wife Saturnina and his 6 children,
including Alberto, Nelsons father, and Rito, inherited equally on subject property in
accordance to Article 996 of the NCC. 11 However, before partition of the subject land
was effected, Alberto died. By operation of law, his rights and obligations to 1/7 of
subject land were transferred to his legal heirshis wife and his son petitioner
Nelson.
The first sale with pacto de retro to Dr. Corrompido by the brothers and co-owners
Bonifacio, Albino and Alberto was valid but only as to their pro-indiviso shares to the
land. When Alberto died prior to repurchasing his share, his rights and obligations
were transferred to and assumed by his heirs. But the records show that it was
Saturnina, Alberto's mother, and not his heirs, who repurchased for him. Saturnina
was not subrogated to Alberto's or his heirs' rights to the property when she
repurchased the share.
In Paulmitan v. Court of Appeals, the SC held that a co-owner who redeemed the
property in its entirety did not make her the owner of all of it. The property
remained in a condition of co-ownership as the redemption did not provide for
a mode of terminating a co-ownership. But the one who redeemed had the right
to be reimbursed for the redemption price and until reimbursed, holds a lien
upon the subject property for the amount due. Necessarily, such is the case of
Saturnina. The result is that the heirs of Alberto, i.e., his wife and his son petitioner
Nelson, retained ownership over their pro-indiviso share.
Upon redemption from Dr. Corrompido, the subject property was resold to
respondents-spouses by the co-owners. However, as to Rito, this contract of sale was
unenforceable. As per articles 320 and 326 of the NCC, the father, or, in his absence,
the mother, is considered legal administrator of the property pertaining to the child
under his or her parental authority without need of giving a bond in case the amount
11 "[i]f a widow or widower and legitimate children or descendants are left, the surviving
spouse has in the succession the same share as that of each of the children."
of the property of the child does not exceed two thousand pesos. Corollary to this,
Rule 93, Section 7 of the Revised Rules of Court of 1964, applicable to this case,
automatically designates the parent as legal guardian of the child without need of any
judicial appointment in case the latters property does not exceed two thousand
pesos. In this case, Saturnina was Ritos legal guardian without necessity of court
appointment, considering that the amount of his property was P1143.00 which is less
than P2000. However, Rule 96, Sec. 1 provides that the legal guardian only has the
plenary power of administration of the minors property. It does not include the
power of alienation which needs judicial authority. Thus, when Saturnina, as
legal guardian of Rito, sold the latters pro-indiviso share in subject land, she
did not have the legal authority to do so.
With respect to Nelson, on the other hand, the contract of sale was void. He was a
minor at the time of the sale. Saturnina or any and all the other co-owners were not
his legal guardians with judicial authority to alienate or encumber his property. It was
his mother who was his legal guardian and, if duly authorized by the courts, could
validly sell his undivided share to the property. She did not. Necessarily, when
Saturnina and the others sold the subject property in its entirety to respondentsspouses, they only sold and transferred title to their pro-indiviso shares.
Consequently, Nelson and his mother retained ownership over their undivided share.
2. No. As provided under Articles 1088 and 1623 of the New Civil Code, 12 legal
redemption may only be exercised by the co-owner or co-owners who did not part
with his or their pro-indiviso share in the property held in common. As demonstrated,
the sale as to the undivided share of petitioner Rito became valid and binding upon
his ratification on July 24, 1986. As a result, he lost his right to redeem subject
property.
However, as likewise established, the sale as to the undivided share of petitioner
Nelson and his mother was not valid such that they were not divested of their
ownership thereto. Necessarily, they may redeem the subject property from
respondents-spouses. But they must do so within thirty days from notice in
12 Art. 1088. Should any of the heirs sell his hereditary rights to a stranger before the partition,
any or all of the co-heirs may be subrogated to the rights of the purchaser by reimbursing him for
the price of the sale, provided they do so within the period of one month from the time they
were notified in writing of the sale by the vendor.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.
60
writing of the sale by their co-owners vendors. In reckoning this period, the written
notice seeks to ensure that the redemptioner is properly notified of the sale and to
indicate the date of such notice as the starting time of the 30-day period of
redemption. Considering the shortness of the period, it is really necessary, as a
general rule, to pinpoint the precise date it is supposed to begin, to obviate the
problem of alleged delays, sometimes consisting of only a day or two.
In the instant case, the right of redemption was invoked not days but years after the
sale was made in 1978. Although Nelson was a minor when the sale was perfected,
in 1988, Nelson, then of majority age, was informed of the sale of subject property.
Likewise, in 1993 he signified his intention to redeem subject property during a
barangay conciliation process. But he only filed the complaint for legal redemption
and damages in 1995.
In the face of the established facts, Nelson cannot feign ignorance and to require
strict proof of written notice of the sale would be to countenance an obvious false
claim of lack of knowledge thereof, thus commending the letter of the law over its
purpose, i.e., the notification of redemptioners. The Court is satisfied that there was
sufficient notice of the sale to petitioner Nelson. The thirty-day redemption period
commenced in 1993, after petitioner Nelson sought the barangay conciliation process
to redeem his property. Nelson, can no longer redeem subject property. But he and
his mother remain co-owners thereof with respondents-spouses.
41. Figuracion v. Gerilla
Petitioners: Carolina (Carlina) Vda. De Figuracion, Heirs Of Elena FiguracionAncheta, Namely: Leoncio Ancheta, Jr., And Romulo Ancheta, Heirs Of Hilaria A.
Figuracion, Namely: Felipa Figuracion-Manuel, Mary Figuracion-Ginez, And Emilia
Figuracion-Gerilla, And Heirs Of Quintin Figuracion, Namely: Linda M. Figuracion,
Leandro M. Figuracion, Ii, And Allan M. Figuracion
Respondents: Emilia Figuracion-Gerilla
Recit Ready:
The main debacle of this case is Lot No. 707 (the antecedent facts refers to other
properties which the SC ruled would be inappropriate to partition considering that the
ownership of Lot No. 705 is still in dispute and there are still unresolved issues as to
the expenses chargeable to the estate of Leandro). Emilia relying on the Deed of
Quitclaim which her aunt Agripina executed in favor of her built a house on Lot No.
707. Afterwards, petitioner Hilaria and her agents threatened to demolish the house of
Emilia who, in retaliation, was prompted to seek the partition of Lot No. 707 as well as
Lot Nos. 2299 and 705. The relevant question here is can the respondent, a coowner, compel the partition of Lot No. 707? The respondent can compel the partition
of Lot No. 707. The first stage in an action for partition is the settlement of the issue of
ownership. The respondent traces her ownership over the eastern half of Lot No. 707
from the Deed of Quitclaim executed by Agripina, who in turn, was the co-owner
thereof being one of the legitimate heirs of Eulalio.
FACTS:
Petition
Petition for Review on Certiorari under Rule 45 of the Rules of Court,

assailing the Decision dated December 11, 2001 of the Court of Appeals
(CA) which reversed and set aside the Decision dated June 26, 1997 of the
Regional Trial Court (RTC) of Urdaneta, Pangasinan, Branch 49.
The RTC decision:

1 Dismissed respondent Emilia Figuracion-Gerillas (Emilia) complaint
for partition, annulment of documents, reconveyance, quieting of
title and damages, and
2 Annulled the Affidavit of Self-Adjudication executed by petitioner
Carolina (Carlina) Vda. De Figuracion (Carolina).
Antecedent Facts
The parties are the heirs of Leandro Figuracion (Leandro) who died intestate
in May 1958.
Subject of the dispute are two parcels of land both situated in Urdaneta,
Pangasinan, which were acquired by Leandro during his lifetime. These
properties were: (1) Lot No. 2299 and (2) Lot No. 705.
Also involved in the controversy is Lot No. 707 originally owned by Eulalio
Adviento (Eulalio),
Eulalio begot Agripina Adviento (Agripina) with his first wife Marcela Estioko
(Marcela), whom Eulalio survived. When he remarried, Eulalio had another
daughter, herein petitioner Carolina, with his second wife, Faustina
Escabesa (Faustina).
On November 28, 1961, Agripina executed a Deed of Quitclaim over the

eastern half of Lot No. 707 in favor of her niece, herein respondent Emilia.
On December 11, 1962, petitioner Carolina executed an Affidavit of SelfAdjudication adjudicating unto herself the entire Lot No. 707 as the sole and
exclusive heir of her deceased parents, Eulalio and Faustina. Carolina also
executed a Deed of Absolute Sale over Lot No. 707 in favor of petitioners
Hilaria and Felipa, who in turn immediately caused the cancellation of OCT
No. 15867 and the issuance of TCT No. 42244 in their names.
In 1971, Emilia and her family went to the United States and returned to the
Philippines only in 1981. Upon her return and relying on the Deed of
Quitclaim, she built a house on the eastern half of Lot No. 707
The legal debacle of the Figuracions started in 1994 when Hilaria and her
agents threatened to demolish the house of Emilia who, in retaliation, was
prompted to seek the partition of Lot No. 707 as well as Lot Nos. 2299 and
705.
During pre-trial conference, the issues were simplified into:

o W/N Lot Nos. 2299 and 705 are the exclusive properties of Leandro
61
W/N respondent Emilia is the owner of the eastern half of Lot No.
707
RTC rendered its Decision dated June 26, 1997:

o RTC ruled that a partition of Lot Nos. 2299 and 705 will be
premature since their ownership is yet to be transmitted from
Leandro to his heirs
o RTC held that petitioner Carolina transferred only her one-half ()
share to Felipa and Hilaria and any conveyance of the other half
pertaining to Agripina was void.
o RTC refused to adjudicate the ownership of the lots eastern half
portion in favor of respondent Emilia since a settlement of the
estate of Eulalio is yet to be undertaken.
Respondent Emilia appealed to the CA, which, in its Decision dated

December 11, 2001, ruled that the RTC erred in refusing to partition Lot No.
707.
o The CA agreed with the RTC that a partition of Lot Nos. 2299 and
705 is indeed premature considering that there is a pending legal
controversy with respect to Lot No. 705 and Lot No. 2299
o The CA explained that there is no necessity for placing Lot No. 707
under judicial administration since Carolina had long sold her pro
indiviso share to Felipa and Hilaria.
o The proper action in such case is for a division or partition of the
entire lot.
o A new judgment is hereby rendered declaring Lot No. 707 to be
owned by:
appellant Emilia Figuracion-Gerilla [herein respondent],

pro indiviso share
appellee Felipa Figuracion [herein petitioner], pro

indiviso share,
appellee Hilaria Figuracion [herein petitioner], pro

indiviso share
Respondent Emilia appealed the CAs decision to the Court
In a Decision promulgated on August 22, 2006, the Court denied the appeal,
concurring with the CAs ruling that a partition of Lot Nos. 2299 and 705
would be inappropriate considering that: (1) the ownership of Lot No. 705 is
still in dispute; and (2) there are still unresolved issues as to the expenses
chargeable to the estate of Leandro.
The present petition involves the appeal of the petitioners who attribute this
sole error committed by the CA.
Position of Petitioner
The petitioners argue that respondent Emilia has no valid basis for her claim
of ownership because the Deed of Quitclaim executed in her favor by
Agripina was in fact a deed of donation that contained no acceptance
Position of Respondent
o
62
Respondent Emilia contends that the Deed of Quitclaim should be

considered an onerous donation that requires no acceptance as it is
governed by the rules on contracts and not by the formalities for a simple
donation.
ISSUE:
W/N the decision rendered by the CA is contrary to law and existing

jurisprudential dicta laid down by the honorable SC.
HELD/RATIO:
No, CA committed no reversible error in holding that the respondent is
entitled to have Lot No. 707 partitioned. The CA judgment must, however,
be modified to conform to the below-discussed apportionment of the lot
among Carolina, Hilaria, Felipa and Emilia.
The respondent can compel the partition of Lot No. 707

o The first stage in an action for partition is the settlement of the issue of
ownership. Such an action will not lie if the claimant has no rightful
interest in the subject property. In fact, the parties filing the action are
required by the Rules of Court to set forth in their complaint the nature
and the extent of their title to the property. It would be premature to
effect a partition until and unless the question of ownership is first
definitely resolved.
o Here, the respondent traces her ownership over the eastern half of Lot
No. 707 from the Deed of Quitclaim executed by Agripina, who in turn,
was the co-owner thereof being one of the legitimate heirs of Eulalio. It
is well to recall that the petitioners failed to categorically dispute the
existence of the Deed of Quitclaim. Instead, they averred that it has
been rendered ineffective by TCT No. 42244 in the name of Felipa and
Hilariathis contention is, of course, flawed.
o Mere issuance of a certificate of title in the name of any person does not
foreclose the possibility that the real property may be under
coownership with persons not named in the certificate, or that the
registrant may only be a trustee, or that other parties may have acquired
interest over the property subsequent to the issuance of the certificate of
title. Stated differently, placing a parcel of land under the mantle of the
Torrens system does not mean that ownership thereof can no longer be
disputed. The certificate cannot always be considered as conclusive
evidence of ownership. In this case, co-ownership of Lot No. 707 was
precisely what respondent Emilia was able to successfully establish, as
correctly found by the RTC and affirmed by the CA.
o The status of Agripina and Carolina as the legitimate heirs of Eulalio is
an undisputed fact. As such heirs, they became co-owners of Lot No.
707 upon the death of Eulalio on July 20, 1930. Since Faustina was
predeceased by Eulalio, she likewise became a co-owner of the lot upon
Eulalios death. Faustinas share, however, passed on to her daughter
Carolina when the former died on October 18, 1949. The Affidavit of
Self-Adjudication executed by Carolina did not prejudice the share of
Agripina because it is not legally possible for one to adjudicate unto
himself an entire property he was not the sole owner of. A co-owner
cannot alienate the shares of her other co-owners nemo dat qui non
habet.
o Hence, Lot No. 707 was a co-owned property of Agripina and Carolina.
As co-owners, each of them had full ownership of her part and of the
fruits and benefits pertaining thereto. Each of them also had the right to
alienate the lot but only in so far as the extent of her portion was
affected.
o Thus, when Carolina sold the entire Lot No. 707 on December 11, 1962
to Hilaria and Felipa without the consent of her co-owner Agripina, the
disposition affected only Carolinas pro indiviso share, and the vendees,
Hilaria and Felipa, acquired only what corresponds to Carolinas share.
A co-owner is entitled to sell his undivided share; hence, a sale of the
entire property by one co-owner without the consent of the other coowners is not null and void and only the rights of the co-owner/seller are
transferred, thereby making the buyer a co-owner of the property.
o Accordingly, the deed of sale executed by Carolina in favor of Hilaria
and Felipa was a valid conveyance but only insofar as the share of
Carolina in the co-ownership is concerned. As Carolinas successors-ininterest to the property, Hilaria and Felipa could not acquire any superior
right in the property than what Carolina is entitled to or could transfer or
alienate after partition.
o In a contract of sale of co-owned property, what the vendee obtains by
virtue of such a sale are the same rights as the vendor had as co-owner,
and the vendee merely steps into the shoes of the vendor as co-owner.
Hilaria and Felipa did not acquire the undivided portion pertaining to
Agripina, which has already been effectively bequeathed to respondent
Emilia as early as November 28, 1961 thru the Deed of Quitclaim. In
turn, being the successor-in-interest of Agripinas share in Lot No. 707,
respondent Emilia took the formers place in the co-ownership and as
such co-owner, has the right to compel partition at any time.
The respondents right to demand for partition is not barred by
acquisitive prescription or laches.
o The Court finds it unavailing in this case in view of the proximity of
the period when the co-ownership was expressly repudiated and
when the herein complaint was filed.
o Laches is the negligence or omission to assert a right within a
reasonable time, warranting a presumption that the party entitled to
assert it has abandoned it or declined to assert it.
More so, laches is a creation of equity and its application is

controlled by equitable considerations. It cannot be used to defeat
justice or perpetrate fraud and injustice. Neither should its
application be used to prevent the rightful owners of a property from
recovering what has been fraudulently registered in the name of
another.
Partition of Lot No. 707
o Under the Old Civil Code which was then in force at the time of
Eulalio and Marcelas marriage, Lot No. 707 was their conjugal
property.
o When Marcela died, one-half of the lot was automatically reserved
to Eulalio, the surviving spouse, as his share in the conjugal
partnership. Marcelas rights to the other half, in turn, were
transmitted to her legitimate child, Agripina and surviving spouse
Eulalio.
o When he remarried, Eulalios one half portion of the lot representing
his share in the conjugal partnership and his usufructuary right over
the other half were brought into his second marriage with Faustina.
o When Eulalio died on July 20, 1930, portion of the lot was
reserved for Faustina as her share in the conjugal partnership. The
remaining were transmitted equally to the widow Faustina and
Eulalios children, Carolina and Agripina.
o Upon the death of Faustina, the shares in Lot No. 707 were in turn
inherited by Carolina.
o Consequently, Agripina is entitled to 5/8 portion of Lot No. 707 while
the remaining 3/8 pertains to Carolina.
o Thus, when Carolina sold Lot No. 707 to Hilaria and Felipa, the sale
affected only 3/8 portion of the subject lot. Since the Deed of
Quitclaim, bequeathed only the eastern portion of Lot No. 707 in
favor of Emilia instead of Agripinas entire 5/8 share thereof, the
remaining 1/8 portion shall be inherited by Agripinas nearest
collateral relative, who, records show, is her sister Carolina.
63
42. Estreller v Ysmael

GR no. 170264, March 13, 2009
Petitioners: James Estreller etc.
Respondents: Luis Miguel Ysmael and Cristeta Santos-Alvarez
Ponente: AUSTRIA-MARTINEZ, J.
Facts
Respondents filed with the RTC a case for Recovery of Possession against
petitioners, claiming ownership of the property subject of dispute located in
Quezon City, by virtue of Transfer Certificate of Title (TCT) No. 41698 issued
by the Register of Deeds of Quezon City on June 10, 1958. Respondents
alleged that on various dates in 1973, petitioners entered the property

through stealth and strategy and had since occupied the same; and despite
demands made in March 1993, petitioners refused to vacate the premises,
prompting respondents to file the action.
Petitioners denied respondents' allegations. According to them, respondent
Luis Miguel Ysmael (Ysmael) had no personality to file the suit since he only
owned a small portion of the property, while respondent Cristeta SantosAlvarez (Alvarez) did not appear to be a registered owner thereof. Petitioners
also contended that their occupation of the property was lawful, having
leased the same from the Magdalena Estate, and later on from Alvarez.
Lastly, petitioners asserted that the property has already been proclaimed by
the Quezon City Government as an Area for Priority Development under P.
D. Nos. 1517 and 2016, which prohibits the eviction of lawful tenants and
demolition of their homes.
Issue:
Whether the court of appeals erred in concluding that respondents Ysmael and
Alvarez are both real parties in interest who would be benefited or injured by the
judgment or the party entitled to the avails of the suit?
Ruling:
NO.
Respondents are real parties-in-interest in the suit below and may, therefore,
commence the complaint for accion publiciana. On the part of Ysmael, he is a named
co-owner of the subject property under TCT No. 41698, together with Julian Felipe
Ysmael, Teresa Ysmael, and Ramon Ysmael. For her part, Alvarez was a buyer of a
portion of the property, as confirmed in several documents, namely: (1) Decision
dated August 30, 1974 rendered by the Regional Trial Court of Quezon City, Branch 9
(IX), in Civil Case No. Q-8426, which was based on a Compromise Agreement
between Alvarez and the Magdalena Estate; (2) an unnotarized Deed of Absolute
Sale dated May 1985 executed between the Ysmael Heirs and Alvarez; and (3) a
notarized Memorandum of Agreement between the Ysmael Heirs and Alvarez
executed on May 2, 1991.
Ratio:
Recently, in Wee v. De Castro, the Court, citing Article 487 of the Civil Code,
reasserted the rule that any one of the co-owners may bring any kind of action
for the recovery of co-owned properties since the suit is presumed to have
been filed for the benefit of all co-owners. The Court also stressed that Article
487 covers all kinds of action for the recovery of possession, i.e., forcible entry
and unlawful detainer (accion interdictal), recovery of possession (accion
publiciana), and recovery of ownership (accion de reivindicacion), thus:
In the more recent case of Carandang v. Heirs of De Guzman,this Court
declared that a co-owner is not even a necessary party to an action for
64
ejectment, for complete relief can be afforded even in his absence,

thus:
eight children. Petitioner Verona PadaKilario, one of Pastors children, has been living
in that house since 1960.
In sum, in suits to recover properties, all co-owners are real parties in

interest. However, pursuant to Article 487 of the Civil Code and the
relevant jurisprudence, any one of them may bring an action, any kind
of action for the recovery of co-owned properties. Therefore, only one
of the co-owners, namely the co-owner who filed the suit for the
recovery of the co-owned property, is an indispensable party thereto.
The other co-owners are not indispensable parties. They are not even
necessary parties, for a complete relief can be afforded in the suit even
without their participation, since the suit is presumed to have been
filed for the benefit of all co-owners.
Sometime in May, 1951, the heirs of Jacinto Pada entered into an extrajudicial
partition of his estate. For this purpose, they executed a private document which was
never registered with the RD.
Disposition:
Petition is denied. Decision of CA affirmed.
==========================================================
IV.F.4 Co-ownership: Partition
43. Pada-Kilario v. CA
The 2 of the heirs of Jacinto sold their respective shares on the lot to Engr. Ernesto
Paredes and to the private respondent Silverio Pada.
Silverio Pada demanded that petitioner-spouses (the Kilarios) vacate the subject
property. Barangay conciliation failed. Silverio filed in the MCTC of Leyte a complaint
for ejectment with damages against the Kilarios.
The other heirs of Jacinto Pada executed a Deed of Donation transferring to the
Kilarios their respective shares on the lot.
Spouses Kilario filed their Answer averring that the subject property (northern portion)
had already been donated to them by the other heirs of Jacinto Pada and that the
extra-judicial settlement of estate was invalid.
MCTC rendered judgment in favor of the Kilarios. Extra-judicial settlement of estate
was invalid. The whole lot remained undivided.
Summary:
Jacinto Pada had 6 children. He died intestate. His estate included a parcel of land of
residential and coconut land located in Leyte. It is the northern portion of the lot which
is the subject of the instant controversy. Some distant relatives of Jacinto occupied
the northern portion of the lot by mere tolerance of Jacinto. When Jacinto died, his
heirs extra-judicially settled his estate, without registering the deed. Two of Jacintos
heirs sold their shares to Engr. Paredes and to Silverio Pada. Silverio demanded that
the occupants (Kilarios) of the northern part of the lot vacate the property. Ejectment
suit was filed against them. In the interim, the other heirs of Jacinto executed deed of
donation in favor of the Kilarios of their share over the lot. HELD: Extrajudicial
settlement of estate, VALID. The subsequent sale of divided portion to Paredes and
Silverio Pada, VALID. The deed of donation in favor of the Kilarios, VOID. The Kilarios
were NOT builders in GF.
Facts:
Silverio Pada appealed to RTC. RTC reversed MCTCs decision. Donation made in
favor of the Kilarios was illegal and invalid; right of purported donors was extinguished
by laches, estoppel, or prescription. RTC ordered the Kilarios to vacate the subject
property and pay rentals (in arrears).
The Kilarios filed a petition for review with the CA. CA dismissed petition. Hence, this
petition before the SC.
Issues:
1)
2)
3)
Whether it was an undivided share in the whole lot that was sold to Silverio Pada
Whether the Kilarios, as co-owners, cannot be ejected from the premises
considering that the heirs of Jacinto Pada donated to them their undivided
interest in the property in dispute
Whether the Kilarios were builders in good faith
Jacinto Pada had six (6) children. He died intestate. His estate included a parcel of
land of residential and coconut land located in Leyte. It is the northern portion of the
lot which is the subject of the instant controversy (subject property = northern
portion of the lot).
Held:
During the lifetime of Jacinto Pada, his halfbrother, Feliciano Pada, obtained
permission from him to build a house on the subject property. When Feliciano died,
his son, Pastor (Jacintos nephew), continued living in the house together with his
We hold that the extrajudicial partition of the estate of Jacinto Pada among his heirs
made in 1951 is valid, albeit executed in an unregistered private document. No law
1) NO, divided share
requires partition among heirs to be in writing and be registered in order to be valid.

The requirement in Sec. 1, Rule 74 of the Revised Rules of Court that a partition be
put in a public document and registered, has for its purpose the protection of creditors
and the heirs themselves against tardy claims. The object of registration is to serve
as constructive notice to others. It follows then that the intrinsic validity of partition not
executed with the prescribed formalities is not undermined when no creditors are
involved. The partition of inherited property need not be embodied in a public
document so as to be effective as regards the heirs that participated therein. The
requirement of Article 1358 of the Civil Code that acts which have for their object the
creation, transmission, modification or extinguishment of real rights over immovable
property, must appear in a public instrument, is only for convenience, noncompliance
with which does not affect the validity or enforceability of the acts of the parties as
among themselves. And neither does the Statute of Frauds under Article 1403 of the
New Civil Code apply because partition among heirs is not legally deemed a
conveyance of real property, considering that it involves not a transfer of property
from one to the other but rather, a confirmation or ratification of title or right of
property that an heir is renouncing in favor of another heir who accepts and receives
the inheritance. The 1951 extrajudicial partition of Jacinto Padas estate being
legal and effective as among his heirs, the 2 concerned heirs validly transferred
their ownership rights over the lot to Engr. Paderes and private respondent
Silverio Pada, respectively.
2) NO, donation void, Kilarios NOT co-owners
The belated act of the other heirs of donating the subject property to the Kilarios after
44 years of never having disputed the validity of the 1951 extrajudicial partition
produced no legal effect. The heirs who executed the deed of donation were not even
owners of the whole subject lot. Hence, the donation made was void. At any rate it is
too late in the day for the heirs of Amador Pada to repudiate the legal effects of the
1951 extrajudicial partition as prescription and laches have equally set in.
3) NO, not builders in GF
Considering that petitioners were in possession of the subject property by sheer
tolerance of its owners, they knew that their occupation of the premises may be
terminated any time. Persons who occupy the land of another at the latters tolerance
or permission, without any contract between them, is necessarily bound by an implied
promise that they will vacate the same upon demand, failing in which a summary
action for ejectment is the proper remedy against them. Thus, they cannot be
considered possessors nor builders in good faith.
It is well settled that both Article 448 and Article 546 of the New Civil Code which
allow full reimbursement of useful improvements and retention of the premises until
reimbursement is made, apply only to a possessor in good faith, i.e., one who builds
on land with the belief that he is the owner thereof. Verily, persons whose occupation
of a realty is by sheer tolerance of its owners are not possessors in good faith. As
such, petitioners cannot be said to be entitled to the value of the improvements that
65
they built on the said lot.

44. Maestrado v. CA
Petitioner: JOSEFA CH. MAESTRADO, as substituted by her daughter LOURDES
MAESTRADO-LAVIA and CARMEN CH. ABAYA
Respondent: HE HONORABLE COURT OF APPEAL
Ponente: De Leon Jr., J.
To settle the estate of deceased spouse, Angel Chaves, one of the heirs, initiated
intestate proceedings and was appointed as administrator of said estates in the
process. The heirs agreed on a project partition. The court approved the partition but
a copy of said decision was missing. Significantly, Lot No.5872 was not included in a
number of documents. Parties offered different explanations as to the omission of
said lot in the documents. Petitioners maintain the existence of an oral partition
agreement entered into by all heirs after the death of their parents. Respondents
dispute voluntariness of their consent to such quitclaim. Held: Lot No. 5872 is no
longer common property of the heirs of the deceased spouses. Petitioners ownership
over said lot was acquired by reason of the oral partition agreed upon by the
deceased spouses heirs sometime before 1956. That oral agreement was confirmed
by the notarized quitclaims executed by the said heirs. There was indeed an oral
agreement of partition entered into by the heirs/parties. A possessor of real estate
property is presumed to have title thereto unless the adverse claimant establishes a
better right. In the instant case it is the petitioners, being the possessors of Lot No.
5872, who have established a superior right thereto by virtue of the oral partition
which was also confirmed by the notarized quitclaims of the heirs. Partition is the
separation, division and assignment of a thing held in common among those to whom
it may belong. It may be effected extra-judicially by the heirs themselves through a
public instrument filed before the register of deeds. However, as between the parties,
a public instrument is neither constitutive nor an inherent element of a contract of
partition. Since registration serves as constructive notice to third persons, an oral
partition by the heirs is valid if no creditors are affected. Moreover, even the
requirement of a written memorandum under the statute of frauds does not apply to
partitions effected by the heirs where no creditors are involved considering that such
transaction is not a conveyance of property resulting in change of ownership but
merely a designation and segregation of that part which belongs to each heir.
Facts:
The spouses Ramon and Rosario died intestate in 1943 and 1944,
respectively. They were survived by the following heirs, namely: Carmen
Chaves-Abaya, Josefa Chaves-Maestrado, Angel Chaves, Amparo ChavesRoa, Concepcion Chaves-Sanvictores and Salvador Chaves.
To settle the estate, Angel Chaves initiated intestate proceedings in CFI

Manila and was appointed administrator in the process. An inventory of the
estates was made and thereafter, the heirs agreed on a project of partition.
Thus, they filed an action for partition before the CFI of Misamis Oriental.
The court appointed Hernando Roa, husband of Amparo Chaves-Roa, as
receiver. On June 6, 1956, the court rendered a decision approving the
project of partition. However, the records of said case are missing and
although respondents claimed otherwise, they failed to present a copy of
said decision.
In 1956, the year the partition case was decided and effected, receiver
Hernando Roa delivered the respective shares of said heirs in accordance
with the above scheme.
Significantly, Lot No. 5872 was not included in any of the documents of
partition. It was thereafter delivered to petitioners during the actual partition
in 1956, and petitioners have been in possession of the same since then.
Respondents claim that due to the series of transactions involving the said
lot, the heirs were unsure if it belonged to the decedents estate at all. As a
result, they deferred its inclusion in the inventory of the properties of the
estate and its distribution pending the investigation of its status. Petitioners
insist that the omission was inadvertent and the inaction of the court on the
motion was due to the compromise agreement entered into by the heirs.
Petitioners thesis consists of the existence of an oral partition agreement

entered into by all heirs soon after the death of their parents. The proposed
project of partition was allegedly based on it but the courts order of partition
failed to embody such oral agreement due to the omission of Lot No. 5872.
For some reason, however, the actual partition of the estate conformed to
the alleged oral agreement.
In an effort to set things right, petitioners prepared a quitclaim to confirm the

alleged oral agreement. On August 16, 1977, Angel, Concepcion and Ramon
signed a notarized quitclaim in favor of petitioners. Amparo was unable to
sign because she had an accident and had passed away on the following
day.
Respondents dispute the voluntariness of their consent or the consent of

their predecessors-in-interest to the quitclaims. On the other hand, Angel
signed the quitclaim "out of respect" for petitioners. On the other hand,
Concepcion signed because she was misled by alleged misrepresentations
in the "Whereas Clauses" of the quitclaim to the effect that the lot was
66
inadvertently omitted and not deliberately omitted due to doubts on its

status.
In response, petitioners filed, on December 22, 1983, an action for Quieting

of Title against respondents in the RTC. On April 10, 1995, the trial court
rendered its Decision in favor of respondents.
Issue/s:
1.
W/N the action for quieting of title has prescribed.
2.
W/N the petitioners acquired ownership over the lot by virtue of the oral
partition executed by the heirs in 1956.
Ratio:
1.
NO. It is imprescriptible in this case.
2.
YES. The subject lot is no longer the common property of the heirs.
Held:
1.
If the plaintiff in an action for quieting of title is in possession of the property

being litigated, such action is imprescriptible. One who is in actual
possession of a land, claiming to be the owner thereof may wait until his
possession is disturbed or his title is attacked before taking steps to
vindicate his right because his undisturbed possession gives him a
continuing right to seek the aid of the courts to ascertain the nature of the
adverse claim and its effects on his title. Although prescription and laches
are distinct concepts, the doctrine of laches is inapplicable where the action
was filed within the prescriptive period provided by law. Thus, laches does
not apply in this case because petitioners possession of the subject lot has
rendered their right to bring an action for quieting of title imprescriptible and,
hence, not barred by laches. Moreover, since laches is a creation of equity,
acts or conduct alleged to constitute the same must be intentional and
unequivocal so as to avoid injustice. Laches operates not really to penalize
neglect or sleeping on ones rights, but rather to avoid recognizing a right
when to do so would result in a clearly inequitable situation.
In this case at bench, the cloud on petitioners title to the subject property
came about only on December 1, 1983 when Angel Chaves transmitted
respondents letters to petitioners, while petitioners action was filed on
December 22, 1983. Clearly, no laches could set in under the circumstances
since petitioners were prompt and vigilant in protecting their rights.
2.
Lot No. 5872 is no longer common property of the heirs of the deceased
spouses Ramon and Rosario Chaves. Petitioners ownership over said lot
was acquired by reason of the oral partition agreed upon by the deceased
spouses heirs sometime before 1956. That oral agreement was confirmed by
the notarized quitclaims executed by the said heirs.
We are convinced, however, that there was indeed an oral agreement of
partition entered into by the heirs/parties. This is the only way we can make
sense out of the actual partition of the properties of the estate despite claims
that a court order provided otherwise. Prior to the actual partition, petitioners
were not in possession of Lot No. 5872 but for some reason or another, it
was delivered to them. From 1956, the year of the actual partition of the
estate of the deceased Chaves spouses, until 1983, no one among the heirs
questioned petitioners possession of or ownership over said Lot No. 5872.
Hence, we are convinced that there was indeed an oral agreement of
partition among the said heirs and the distribution of the properties was
consistent with such oral agreement. In any event, the parties had plenty of
time to rectify the situation but no such move was done until 1983.
A possessor of real estate property is presumed to have title thereto unless
the adverse claimant establishes a better right. In the instant case it is the
petitioners, being the possessors of Lot No. 5872, who have established a
superior right thereto by virtue of the oral partition which was also confirmed
by the notarized quitclaims of the heirs. Partition is the separation, division
and assignment of a thing held in common among those to whom it may
belong. It may be effected extra-judicially by the heirs themselves through a
public instrument filed before the register of deeds. -m
However, as between the parties, a public instrument is neither
constitutive nor an inherent element of a contract of partition. Since
registration serves as constructive notice to third persons, an oral
partition by the heirs is valid if no creditors are affected. Moreover,
even the requirement of a written memorandum under the statute of
frauds does not apply to partitions effected by the heirs where no
creditors are involved considering that such transaction is not a
conveyance of property resulting in change of ownership but merely a
designation and segregation of that part which belongs to each heir.
Nevertheless, respondent court was convinced that Lot No. 5872 is still
common property of the heirs of the deceased spouses Ramon and Rosario
Chaves because the TCT covering the said property is still registered in the
name of the said deceased spouses. Unfortunately, respondent court was
67
oblivious to the doctrine that the act of registration of a voluntary instrument

is the operative act which conveys or affects registered land insofar as third
persons are concerned. Hence, even without registration, the contract is still
valid as between the parties. In fact, it has been recently held and reiterated
by this Court that neither a Transfer Certificate of Title nor a subdivision plan
is essential to the validity of an oral partition.
In sum, the most persuasive circumstance pointing to the existence of the
oral partition is the fact that the terms of the actual partition and distribution
of the estate are identical to the sharing scheme in the oral partition. No one
among the heirs disturbed this status quo for a period of twenty-seven (27)
years.
Disposition: WHEREFORE, the instant consolidated petitions are GRANTED. The
Decision of the Court of Appeals, dated November 28, 1997, is hereby REVERSED
and SET ASIDE. The petitioners action praying for the quieting of their title of
ownership over Lot No. 5872, located in Kauswagan, Cagayan de Oro, is granted.
Cost against respondents.
45. Pilapil v. Briones(on Motion for Reconsideration)
Petitioners: Erlinda Pilapil and Heirs Of Donata Ortiz Briones, Namely: Estela,
Eriberto and Virgilio Santos, Ana Santos Cultura, Elvira Santos Inocentes, Ernesto
Mendoza, Rizalina Santos, Adolfo Mendoza and Pacita Mendoza
Respondents: Heirs Of Maximino R. Briones, namely: Silverio S. Briones, Petra
Briones, Bonifacio Cabahug, Jr., Anita Trasmonte, Cirilita Fortuna, Cresencia Briones,
Fuguracion Medalle and Mercedes Lagbas
Summary:
Maximino and Donata were married, but had no children. When Maximo died in 1952,
Donata instituted intestate proceedings to settle her husbands estate in CFI Cebu
City. CFI awarded ownership of the real properties to Donata, which Donata
subsequently registered in her own name. Donata died in 1977. Erlinda, one of
Donatas nieces, instituted with the RTC a petition for the administration of the
intestate estate of Donata. Erlinda and her husband, Gregorio, were appointed by the
RTC as administrators of Donatas intestate estate. In 1985, Silverio, a nephew of
Maximino, filed a Petition with the RTC for Letters of Administration for the intestate
estate of Maximino, which was initially granted by the RTC. But then, Gregorio filed
with the RTC a Motion to Set Aside the Order, claiming that the said properties were
already under his and his wifes administration as part of the intestate estate of
Donata. Silverios Letters of Administration for the intestate estate of Maximino was
subsequently set aside by the RTC. In 1987, the heirs of Maximino filed a Complaint
(later amended in 1992) with the RTC against the heirs of Donata for the partition,
annulment, and recovery of possession of real property. They alleged that Donata, as
administratrix of the estate of Maximino, through fraud and misrepresentation, in
68
breach of trust, and without the knowledge of the other heirs, succeeded in registering
in her name the real properties belonging to the intestate estate of Maximino. Issue:
Did Donata commit fraud? Held: There is insufficient evidence to establish that
Donata committed fraud in registering the parcels of land in her own name as a result
of the CFI Order awarding her ownership of the same. A review of the records fails to
show any allegation or concrete proof that the CFI also failed to order the publication
in newspapers of the notice of the intestate proceedings and to require proof from
Donata of compliance therewith. Neither can this Court find any reason or explanation
as to why Maximinos siblings could have missed the published notice of the intestate
proceedings of their brother. Assuming, for the sake of argument, that Donatas
misrepresentation constitutes fraud that would impose upon her the implied trust
provided in Article 1456 of the Civil Code, this Court still cannot sustain respondents
contention that their right to recover their shares in Maximinos estate is
imprescriptible. The general rule is that an action for reconveyance of real
property based on implied trust prescribes ten years from registration and/or
issuance of the title to the property, not only because registration under the
Torrens system is a constructive notice of title, but also because by registering the
disputed properties exclusively in her name, Donata had already unequivocally
repudiated any other claim to the same. By virtue of the CFI Order, dated 15 January
1960, in Special Proceedings No. 928-R, Donata was able to register and secure
certificates of title over the disputed properties in her name on 27 June 1960. The
respondents filed with the RTC their Complaint for partition, annulment, and recovery
of possession of the disputed real properties, docketed as Civil Case No. CEB-5794,
only on 3 March 1987, almost 27 years after the registration of the said properties in
the name of Donata. Therefore, respondents action for recovery of possession
of the disputed properties had clearly prescribed.
Donata died on 1 November 1977. Erlinda, one of Donatas nieces, instituted with the
RTC a petition for the administration of the intestate estate of Donata. Erlinda and her
husband, Gregorio, were appointed by the RTC as administrators of Donatas
intestate estate.
Facts:
Court of Appeals affirmed the RTC Decision.
Petitioners are the heirs of the late Donata Ortiz-Briones (Donata), consisting of her
surviving sister, Rizalina Ortiz-Aguila (Rizalina); Rizalinas daughter, Erlinda Pilapil
(Erlinda); and the other nephews and nieces of Donata, in representation of her two
other sisters who had also passed away. Respondents, on the other hand, are the
heirs of the late Maximino Briones (Maximino), composed of his nephews and nieces,
and grandnephews and grandnieces, in representation of the deceased siblings of
Maximino.
Issue: Whether an implied trust under Article 1456 of the New Civil Code had been
sufficiently established in the present case.
Maximino was married to Donata but their union did not produce any children. When
Maximino died on 1 May 1952, Donata instituted intestate proceedings to settle her
husbands estate with the CFI Cebu City. On 8 July 1952, the CFI issued Letters of
Administration appointing Donata as the administratrix of Maximinos estate.
On 2 October 1952, the CFI would subsequently awarded ownership of the
aforementioned real properties to Donata. On 27 June 1960, Donata had the said CFI
Order recorded in the Primary Entry Book of the Register of Deeds, and by virtue
thereof, received new TCTs, covering the said properties, now in her name.
On 21 January 1985, Silverio Briones (Silverio), a nephew of Maximino, filed a

Petition with the RTC for Letters of Administration for the intestate estate of Maximino,
which was initially granted by the RTC. The RTC also issued an Order, dated 5
December 1985, allowing Silverio to collect rentals from Maximinos properties. But
then, Gregorio filed with the RTC a Motion to Set Aside the Order, dated 5 December
1985, claiming that the said properties were already under his and his wifes
administration as part of the intestate estate of Donata. Silverios Letters of
Administration for the intestate estate of Maximino was subsequently set aside by the
RTC.
On 3 March 1987, the heirs of Maximino filed a Complaint with the RTC against the
heirs of Donata for the partition, annulment, and recovery of possession of real
property, later amended on 11 December 1992. They alleged that Donata, as
administratrix of the estate of Maximino, through fraud and misrepresentation, in
breach of trust, and without the knowledge of the other heirs, succeeded in registering
in her name the real properties belonging to the intestate estate of Maximino.
RTC ruled for Heirs of Maximino and declared that they were entitled to of the real
properties covered by TCTs No. 21542, 21543, 21544, 21545, 21546, and 58684. It
also ordered Erlinda to reconvey to the heirs of Maximino the said properties and to
render an accounting of the fruits thereof.
Held:
1.
SCs Origininal Decision
In its Decision, dated 10 March 2006, the SC found the Petition meritorious and,
reversing the CA and RTC, dismissed the Complaint for partition, annulment, and
recovery of possession of real property filed by the heirs of Maximino. This Court
summed up its findings.
In summary, the heirs of Maximino failed to prove by clear and convincing evidence
that Donata managed, through fraud, to have the real properties, belonging to the
intestate estate of Maximino, registered in her name. In the absence of fraud, no
implied trust was established between Donata and the heirs of Maximino under Article
1456 of the New Civil Code. Donata was able to register the real properties in her
name, not through fraud or mistake, but pursuant to an Order, dated 2 October 1952,
issued by the CFI in Special Proceedings No. 928-R. The CFI Order, presumed to be
fairly and regularly issued, declared Donata as the sole, absolute, and exclusive heir
of Maximino; hence, making Donata the singular owner of the entire estate of
Maximino, including the real properties, and not merely a co-owner with the other
heirs of her deceased husband. There being no basis for the Complaint of the heirs of
Maximino in Civil Case No. CEB-5794, the same should have been dismissed.
2.
On Motion for Reconsideration:
Respondents basically raised the same arguments, with only a fresh contention that
the CFI Order, being based on the fraudulent misrepresentation of Donata that she
was Maximinos sole heir, was a void order, which produced no legal effect. SC,
however, does not find any new evidence or argument that would adequately justify a
change in its previous position.
3.
On the finding of fraud
There was insufficient evidence to establish that Donata committed fraud. It should be
remembered that Donata was able to secure certificates of title to the disputed
properties by virtue of the CFI Order in Special Proceedings No. 928-R (the
proceedings she instituted to settle Maximinos intestate estate), which declared her
as Maximinos sole heir. In the absence of proof to the contrary, the Court accorded to
Special Proceedings No. 928-R the presumptions of regularity and validity.
The petitioners, heirs of Donata, were unable to present a copy of the CFI Order, but
this is not surprising considering that it was issued 35 years prior to the filing by the
heirs of Maximino of their Complaint in Civil Case No. CEB-5794 on 3 March 1987.
The existence of such CFI Order, nonetheless, cannot be denied. It was recorded in
the Primary Entry Book of the Register of Deeds on 27 June 1960, at 1:10 p.m., as
Entry No. 1714. It was annotated on the TCTs covering the real properties as having
declared Donata the sole, absolute, and exclusive heir of Maximino. The nonpresentation of the actual CFI Order was not fatal to the cause of the heirs of Donata
considering that its authenticity and contents were never questioned. The allegation of
fraud by the heirs of Maximino did not pertain to the CFI Order, but to the manner or
procedure by which it was issued in favor of Donata. Moreover, the non-presentation
of the CFI Order, contrary to the declaration by the RTC, does not amount to a willful
suppression of evidence that would give rise to the presumption that it would be
adverse to the heirs of Donata if produced.
The CFI Order effectively settled the intestate estate of Maximino by declaring Donata
as the sole, absolute, and exclusive heir of her deceased husband. It enjoys the
presumption of validity pursuant to the Section 3(m) and (n) of Rule 131 of the
Revised Rules of Court.
First of all, the Petition filed by Donata for Letters of Administration in Special
Proceedings No. 928-R before the CFI was not even referred to nor presented during
the course of the trial of Civil Case No. CEB-5794 before the RTC. How then could
69
the Court of Appeals make a finding that Donata willfully excluded from the said
Petition the names, ages, and residences of the other heirs of Maximino?
Second, there was also no evidence showing that the CFI actually failed to send
notices of Special Proceedings No. 928-R to the heirs of Maximino or that it did not
require presentation of proof of service of such notices. It should be remembered that
there stands a presumption that the CFI Judge had regularly performed his duties in
Special Proceedings No. 928-R, which included sending out of notices and requiring
the presentation of proof of service of such notices; and, the heirs of Maximino did not
propound sufficient evidence to debunk such presumption. They only made a general
denial of knowledge of Special Proceedings No. 928-R, at least until 1985. There was
no testimony or document presented in which the heirs of Maximino categorically
denied receipt of notice from the CFI of the pendency of Special Proceedings No.
928-R. The only evidence on record in reference to the absence of notice of such
proceedings was the testimony of Aurelia Briones (Aurelia), one of the heirs of
Maximino. Aurelias testimony deserves scant credit considering that she was not
testifying on matters within her personal knowledge. The phrase "I dont think" is a
clear indication that she is merely voicing out her opinion on how she believed her
uncles and aunts would have acted had they received notice of Special Proceedings
No. 928-R.
It is worth noting that, in its foregoing ratiocination, the Court was proceeding from an
evaluation of the evidence on record, which did not include an actual copy of the CFI
Order in Special Proceedings No. 928-R. Respondents only submitted a certified true
copy thereof on 15 June 2006, annexed to their Supplemental Reply to petitioners
opposition to their motion for reconsideration of this Courts Decision. Respondents
did not offer any explanation as to why they belatedly produced a copy of the said
Order, but merely claimed to have been "fortunate enough to obtain a copy" thereof
from the Register of Deeds of Cebu.
Respondents should be taken to task for springing new evidence so late into the
proceedings of this case. Parties should present all their available evidence at the
courts below so as to give the opposing party the opportunity to scrutinize and
challenge such evidence during the course of the trial. However, given that the
existence of the CFI Order in Special Proceedings No. 928-R was never in issue and
was, in fact, admitted by the petitioners; that the copy submitted is a certified true
copy of the said Order; and that the said Order may provide new information vital to a
just resolution of the present case, this Court is compelled to consider the same as
part of the evidence on record.
A review of the records fails to show any allegation or concrete proof that the CFI also
failed to order the publication in newspapers of the notice of the intestate proceedings
and to require proof from Donata of compliance therewith. Neither can this Court find
any reason or explanation as to why Maximinos siblings could have missed the
published notice of the intestate proceedings of their brother.
In relying on the presumptions of the regular performance of official duty and lawful
exercise of jurisdiction by the CFI in rendering the questioned Order, dated 15
January 1960, this Court is not, as counsel for respondents allege, sacrificing the
substantive right of respondents to their share in the inheritance in favor of mere
procedural fiats. There is a rationale for the establishment of rules of procedure:
Procedural rules are designed to insure the orderly and expeditious administration of
justice by providing for a practical system by which the parties to a litigation may be
accorded a full and fair opportunity to present their respective positions and refute
each other's submissions under the prescribed requirements, conditions and
limitations. Adjective law is not the counterfoil of substantive law. In fact, there is a
symbiotic relationship between them. By complying faithfully with the Rules of Court,
the bench and the bar are better able to discuss, analyze and understand substantive
rights and duties and consequently to more effectively protect and enforce them. The
other alternative is judicial anarchy.
Although Donata may have alleged before the CFI that she was her husbands sole
heir, it was not established that she did so knowingly, maliciously and in bad faith, so
as for this Court to conclude that she indeed committed fraud. This Court again brings
to the fore the delay by which respondents filed the present case, when the principal
actors involved, particularly, Donata and Maximinos siblings, have already passed
away and their lips forever sealed as to what truly transpired between them. On the
other hand, Special Proceedings No. 928-R took place when all these principal actors
were still alive and each would have been capable to act to protect his or her own
right to Maximinos estate. Letters of Administration of Maximinos estate were issued
in favor of Donata as early as 8 July 1952, and the CFI Order in question was issued
only on 15 January 1960. The intestate proceedings for the settlement of Maximinos
estate were thus pending for almost eight years, and it is the burden of the
respondents to establish that their parents or grandparents, Maximinos surviving
siblings, had absolutely no knowledge of the said proceedings all these years. As
established in Ramos v. Ramos, the degree of proof to establish fraud in a case
where the principal actors to the transaction have already passed away is proof
beyond reasonable doubt, to wit
"x x x But length of time necessarily obscures all human evidence; and as it thus
removes from the parties all the immediate means to verify the nature of the original
transactions, it operates by way of presumption, in favor of innocence, and against
imputation of fraud. It would be unreasonable, after a great length of time, to require
exact proof of all the minute circumstances of any transaction, or to expect a
satisfactory explanation of every difficulty, real or apparent, with which it may be
encumbered. The most that can fairly be expected, in such cases, if the parties are
living, from the frailty of memory, and human infirmity, is, that the material facts can be
given with certainty to a common intent; and, if the parties are dead, and the cases
rest in confidence, and in parol agreements, the most that we can hope is to arrive at
probable conjectures, and to substitute general presumptions of law, for exact
knowledge. Fraud, or breach of trust, ought not lightly to be imputed to the living; for,
the legal presumption is the other way; as to the dead, who are not here to answer for
themselves, it would be the height of injustice and cruelty, to disturb their ashes, and
70
violate the sanctity of the grave, unless the evidence of fraud be clear, beyond a
reasonable doubt (Prevost vs. Gratz, 6 Wheat. [U.S.], 481, 498).
Moreover, even if Donatas allegation that she was Maximinos sole heir does
constitute fraud, it is insufficient to justify abandonment of the CFI Order, dated 15
January 1960,22 considering the nature of intestate proceedings as being in rem and
the disputable presumptions of the regular performance of official duty and lawful
exercise of jurisdiction by the CFI in rendering the questioned Order, dated 15
January 1960, in Special Proceedings No. 928-R.
4.
On prescription of the right to recover based on implied trust
Assuming, for the sake of argument, that Donatas misrepresentation constitutes

fraud that would impose upon her the implied trust provided in Article 1456 of the Civil
Code, this Court still cannot sustain respondents contention that their right to recover
their shares in Maximinos estate is imprescriptible. It is already settled in
jurisprudence that an implied trust, as opposed to an express trust, is subject to
prescription and laches.
TRUSTS
EXPRESS
Express trusts are created by the intention of
the trustor or of the parties.
IMPLIED
Implied trusts come into being by operation of
An implied trust may be proven by oral evidenc

No express trusts concerning an immovable
or any interest therein may be proven by oral
evidence.
No particular words are required for the
creation of an express trust, it being sufficient
that a trust is clearly intended.
Express trusts are those which are created by
the direct and positive acts of the parties, by
some writing or deed, or will, or by words
either expressly or impliedly evincing an
intention to create a trust.
Implied trusts are those which, without being

are deducible from the nature of the transactio
of intent, or which are superinduced on the tr
operation of law as matters of equity, indepen
particular intention of the parties. They a
subdivided into resulting and constructive trust
RESULTING
A resulting trust is
broadly defined as a
trust which is raised
or created by the act
or construction of law,
but in its more
restricted sense it is a
trust
raised
by
implication of law and
presumed always to
have
been
contemplated by the
CONSTRUCTIV
A constructive trust
trust
"raised
construction of law
arising by operatio
law." In a more restr
sense
and
contradistinguished
a resulting trust
constructive trust i
trust not created by
words, either expre
or impliedly evincin
71
parties, the intention

as to which is to be
found in the nature of
their transaction, but
not expressed in the
deed or instrument of
conveyance.
Examples of resulting
trusts are found in
Article 1448 to 1455
of the Civil Code.
Thus, while respondents right to inheritance was transferred or vested upon them at
direct intention to create
a trust, but by thethetime of Maximinos death, their enforcement of said right by appropriate legal
action
construction of equity
in may be barred by the prescription of the action.
order to satisfy the
Prescription
of the action for reconveyance of the disputed properties based on
demands of justice.
It
does not arise implied
by trust is governed by Article 1144 of the New Civil Code, which reads
agreement or intention
but by operation of ART.
law. 1144. The following actions must be brought within ten years from the time the
"If a person obtains right
legalof action accrues:
title to property by fraud
(1) Upon a written contract;
or concealment, courts
(2) Upon an obligation created by law;
of equity will impress
(3) Upon a judgment.
upon the title a so-called
constructive trust in
Since an implied trust is an obligation created by law (specifically, in this case, by
favor of the defrauded
Article 1456 of the New Civil Code), then respondents had 10 years within which to
party." A constructive
bring
trust is not a trust in
the an action for reconveyance of their shares in Maximinos properties. The next
question now is when should the ten-year prescriptive period be reckoned from. The
technical sense.
general rule is that an action for reconveyance of real property based on
implied trust prescribes ten years from registration and/or issuance of the title
to the property, not only because registration under the Torrens system is a
constructive notice of title, but also because by registering the disputed properties
exclusively in her name, Donata had already unequivocally repudiated any other
claim to the same.
KO
By virtue of the CFI Order, dated 15 January 1960, in Special Proceedings No. 928-R,
IMPRESCRIPTIBILITY
Donata
was
There is a rule that a trustee cannot acquire by prescription the ownership of property entrusted
to him,
or able to register and secure certificates of title over the disputed
properties
in her name on 27 June 1960. The respondents filed with the RTC their
that an action to compel a trustee to convey property registered in his name in trust for the benefit
of the
cestui qui trust does not prescribe, or that the defense of prescription cannot be set up inComplaint
an action for
to partition, annulment, and recovery of possession of the disputed real
properties,
docketed
as Civil Case No. CEB-5794, only on 3 March 1987, almost 27
recover property held by a person in trust for the benefit of another, or that property held in trust can be
years after the registration of the said properties in the name of Donata. Therefore,
recovered by the beneficiary regardless of the lapse of time.
That rule applies squarely to express trusts. The rule of imprescriptibility of the actionrespondents
to recover action for recovery of possession of the disputed properties had
clearly
The basis of the rule is that the possession of property held in trust may possibly apply to resulting prescribed.
trusts
a trustee is not adverse. Not being adverse, as long as the trustee has not repudiated the trust.
Moreover, even though respondents Complaint before the RTC in Civil Case No.
he does not acquire by prescription the
CEB-5794 also prays for partition of the disputed properties, it does not make their
property held in trust.
The rule of imprescriptibility was misapplied to
action to enforce their right to the said properties imprescriptible. While as a general
constructive trusts.
rule, the action for partition among co-owners does not prescribe so long as the coownership is expressly or impliedly recognized, as provided for in Article 494, of the
Acquisitive prescription may bar the action of the beneficiary against the trustee in an
New Civil Code, it bears to emphasize that Donata had never recognized
express trust for the recovery of the property held in trust where (a) the trustee has
respondents as co-owners or co-heirs, either expressly or impliedly. Her
performed unequivocal acts of repudiation amounting to an ouster of the cestui qui
assertion before the CFI in Special Proceedings No. 928-R that she was Maximinos
trust; (b) such positive acts of repudiation have been made known to the cestui qui
sole heir necessarily excludes recognition of some other co-owner or co-heir to the
trust and (c) the evidence thereon is clear and conclusive.
inherited properties; Consequently, the rule on non-prescription of action for partition
of property owned in common does not apply to the case at bar.
A present reading of the cases, invoked by respondents, must be made in conjunction
with and guided accordingly by the principles established in the afore-quoted case.
5. On laches as bar to recovery
Other than prescription of action, respondents right to recover possession of the

disputed properties, based on implied trust, is also barred by laches. The defense of
laches, which is a question of inequity in permitting a claim to be enforced, applies
independently of prescription, which is a question of time. Prescription is statutory;
laches is equitable. Laches is defined as the failure to assert a right for an
unreasonable and unexplained length of time, warranting a presumption that the party
entitled to assert it has either abandoned or declined to assert it. This equitable
defense is based upon grounds of public policy, which requires the discouragement of
stale claims for the peace of society.
In further support of their contention of fraud by Donata, the heirs of Maximino even
emphasized that Donata lived along the same street as some of the siblings of
Maximino and, yet, she failed to inform them of the CFI Order, dated [15 January
1960], in Special Proceedings No. 928-R, and the issuance in her name of new TCTs
covering the real properties which belonged to the estate of Maximino. This Court,
however, appreciates such information differently. It actually works against the heirs of
Maximino. Since they only lived nearby, Maximinos siblings had ample opportunity to
inquire or discuss with Donata the status of the estate of their deceased brother.
Some of the real properties, which belonged to the estate of Maximino, were also
located within the same area as their residences in Cebu City, and Maximinos
siblings could have regularly observed the actions and behavior of Donata with regard
to the said real properties. It is uncontested that from the time of Maximinos death on
1 May 1952, Donata had possession of the real properties. She managed the real
properties and even collected rental fees on some of them until her own death on 1
November 1977. After Donatas death, Erlinda took possession of the real properties,
and continued to manage the same and collect the rental fees thereon. Donata and,
subsequently, Erlinda, were so obviously exercising rights of ownership over the real
properties, in exclusion of all others, which must have already put the heirs of
Maximino on guard if they truly believed that they still had rights thereto.
The heirs of Maximino knew he died on 1 May 1952. They even attended his wake.
They did not offer any explanation as to why they had waited 33 years from
Maximinos death before one of them, Silverio, filed a Petition for Letters of
Administration for the intestate estate of Maximino on 21 January 1985. After learning
that the intestate estate of Maximino was already settled in Special Proceedings No.
928-R, they waited another two years, before instituting, on 3 March 1987, Civil Case
No. CEB-5794, the Complaint for partition, annulment and recovery of the real
property belonging to the estate of Maximino.
Considering the circumstances in the afore-quoted paragraphs, as well as
respondents conduct before this Court, particularly the belated submission of
evidence and argument of new issues, respondents are consistently displaying a
penchant for delayed action, without any proffered reason or justification for such
delay. It is well established that the law serves those who are vigilant and diligent and
not those who sleep when the law requires them to act. The law does not encourage
laches, indifference, negligence or ignorance. On the contrary, for a party to deserve
72
the considerations of the courts, he must show that he is not guilty of any of the
aforesaid failings.
6. On void judgment or order (YOU CAN SKIP THIS.)
Respondents presented only in their Reply and Supplemental Reply to the petitioners
Opposition to their Motion for Reconsideration the argument that the CFI Order, dated
15 January 1960, in Special Proceedings No. 928-R is void and, thus, it cannot have
any legal effect. Consequently, the registration of the disputed properties in the name
of Donata pursuant to such Order was likewise void.
In the jurisprudence referred to by the respondents, an order or judgment is
considered void when rendered by the court without or in excess of its jurisdiction or
in violation of a mandatory duty, circumstances which are not present in the case at
bar.
Distinction must be made between a void judgment and a voidable one, thus
"* * * A voidable judgment is one which, though not a mere nullity, is liable to be made
void when a person who has a right to proceed in the matter takes the proper steps to
have its invalidity declared. It always contains some defect which may become fatal. It
carries within it the means of its own overthrow. But unless and until it is duly
annulled, it is attended with all the ordinary consequences of a legal judgment. The
party against whom it is given may escape its effect as a bar or an obligation, but only
by a proper application to have it vacated or reversed. Until that is done, it will be
efficacious as a claim, an estoppel, or a source of title. If no proceedings are ever
taken against it, it will continue throughout its life to all intents a valid sentence. If
emanating from a court of general jurisdiction, it will be sustained by the ordinary
presumptions of regularity, and it is not open to impeachment in any collateral action.
* * *"
But it is otherwise when the judgment is void. "A void judgment is in legal effect no
judgment. By it no rights are divested. From it no rights can be obtained. Being
worthless in itself, all proceedings founded upon it are equally worthless. It neither
binds nor bars any one. All acts performed under it and all claims flowing out of it are
void. The parties attempting to enforce it may be responsible as trespassers. The
purchaser at a sale by virtue of its authority finds himself without title and without
redress."
The fraud and misrepresentation fostered by Donata on the CFI in Special
Proceedings No. 928-R did not deprive the trial court of jurisdiction over the subjectmatter of the case, namely, the intestate estate of Maximino. Donatas fraud and
misrepresentation may have rendered the CFI Order, dated 15 January 1960,
voidable, but not void on its face. Hence, the said Order, which already became final
and executory, can only be set aside by direct action to annul and enjoin its
enforcement. It cannot be the subject of a collateral attack as is being done in this
case. Note that respondents Complaint before the RTC in Civil Case No. CEB-5794
was one for partition, annulment, and recovery of possession of the disputed
properties. The annulment sought in the Complaint was not that of the CFI Order,
dated 15 January 1960, but of the certificates of title over the properties issued in
Donatas name. So until and unless respondents bring a direct action to nullify the CFI
Order, dated 15 January 1960, in Special Proceedings No. 928-R, and attain a
favorable judgment therein, the assailed Order remains valid and binding.
Nonetheless, this Court also points out that an action to annul an order or judgment
based on fraud must be brought within four years from the discovery of the fraud. If it
is conceded that the respondents came to know of Donatas fraudulent acts only in
1985, during the course of the RTC proceedings which they instituted for the
settlement of Maximinos estate, then their right to file an action to annul the CFI
Order, dated 15 January 1960, in Special Proceedings No. 928-R (earlier instituted by
Donata for the settlement of Maximinos estate), has likewise prescribed by present
time.
73
rightfully owns the land. The SC ruled it was Jose who was the rightful owner. (see
issues and held)
Facts:
Late spouses Liborio Casilang and Francisca Zacarias had 8 Children. Liboro died
intestate in 1982 at the age of 83, his wife died soon after during the same year. One
of their children, Bonifacio, also died in 1986 leaving his child Bernabe, another child
of Liborio and Francisca- Ireneo, died in 1992 survived by his 4 children who are
herein respondents.
LIBORIO & FRACISCA
|
|
46. Casilang v. Dizon

Gr No. 180269, Feb 20, 2013
Petitioners: JOSE Z. CASILANG, SR., substituted by his heirs, namely: FELICIDAD
CUDIAMAT VDA. DE CASILANG, JOSE C. CASILANG, JR., RICARDO C.
CASILANG, MARIA LOURDES C. CASILANG, CHRISTOPHER C. CASILANG, BEN
C. CASILANG, DANTE C. CASILANG, GREGORIO C. CASILANG, HERALD C.
CASILANG; and FELICIDAD Z. CASILANG, MARCELINA Z. CASILANG, JACINTA Z.
CASILANG, BONIFACIO Z. CASILANG, LEONORA Z. CASILANG, and FLORA Z.
CASILANG,
Respondents: ROSARIO Z. CASILANG-DIZON, MARIO A. CASILANG, ANGELO A.
CASILANG, RODOLFO A. CASILANG, and ATTY. ALICIA B. FABIA, in her capacity
as Clerk of Court and Ex-Officio Sheriff of Pangasisnan and/or her duly authorized
representative
----------------------------------------------------------------------------------------------------------------|
Felicidad
Irineo(+)
Marecelina Jacinta
Mario
|
Angelo
Bonifacio(+)
|
Leonora
|
Jose
|
Flora
------------------------------------------|
|
Rosario
Bernabe
|
Rodolfo
The estate of Liborio, left no debts, consisted of 3 parcels of land located in

Pangasisnan. Lots 4676, 4704 and 4618
Ponente: SERENO, C.J.

Late spouses Liborio and Francisca had 8 children, 2 of which were Ireneo and Jose
(herein petitioner). Ireneo passed away and left 4 children (herein respondents).
Respo. Upon the dissolution of the estate of Liborio, the ownership of Lot 4618 was
being contested. Respondents claim that their father, Ireneo, inherited the land and
therefore the land was rightfully theirs (evidence presented was tax certificates). Jose
on the other hand claims that he was assigned the land right before his father Liborio
passed away, as Jose was the one who took in his father and mother and took care of
them before they passed away. This was corroborated by other evidence. He claims
that an oral partition was entered into by all the children and grandchildren which
assigned another lot- Lot 4676 to the heirs of Ireneo. According to Jose, this indicated
that he did not claim any ownership over Lot 4676 because he believed that he was
already assigned his share of the properties- which is Lot 4618. The issue is who
In May 1997 respondent Rosario filed with the MTC of Calasio, Pangasinan a
complaint for unlawful detainer to evict her uncle, petitioner Jose from one of the lotsLot 4618. Rosario claimed that such land was owned by her father Ireneo (evidence
presented was tax declaration under her fathers name.)
She claims that on April 1997, respondents executed a Deed of Extrajudicial Partition
with Quitclaim whereby the said lot was adjudicated to themselves. In the same
instrument all Rosarios other siblings renounced their rights in her favor.
Jose, on the other hand raised the defense that he was the lawful, absolute,
exclusive owner and in actual possession of the said lot, and that he acquired the
same through intestate succession from his late father. He and his lawyer failed,
however to attend the pre-trial conference and an adverse judgement was entered
against him.
Jose was ordered to remove his house and vacate the lot and pay monthly rentals to
Rosario from the date of the filing of the complaint until she was place in possession.
A writ of execution and a writ of demolition was issued.
On June 2 1998, the petitioners who are the 7 other children of Liborio and Francisca
filed with the RTC of Dagupan City a complaint for annulment of documents,
ownership and peaceful possession with damages against the respondents. One of
such documents sought to be annulled was the Extrajudicial Partition which Ireneos
children over the disputed lot.
Peitioner aver that all 8 children of Liborio entered into a verbal partition of his estate.
Jose was allotted Lot No. 4618 and Ireneos allotted land was a portion of Lot 4676.
Ireneo however, never claimed ownership nor took possession of the disputed lot.
Petitioners also claim that Jose has always had possession and resided in Lot 4618,
and that in such lot he built his familys home in which he took in and cared for his
aged parents until their deaths.
Jose claims that his parents bamboo house in Lot No. 4618 disintegrated due to wear
and tear so he took them in his home within the same lot and cared for them until they
died. Shortly before Liborios death and in the presence of his siblimfs, Liborio
assigned the lot to him as his inheritance.
In pursuance of the oral partition of the estate a Deed of Extrajudicial Partition with
Quitclaim dated 1998 was executed by all 8 siblings (the deceased siblings
represented by their corresponding heirs).
Since Lot 4618 was already given to him, and the other lot was also assigned to the
other siblings, in a Deed of Extrajudicial Partition dated Jan 8 1998, the only lot
divided was Lot 4676. It was expressed in such that Jose, Felcidad, Jacinta and
Bernabe have received their respective shares of inheritance in advance and
therefore their claims to the lot 4676 were renounced in favor of their co-heirs
(including Ireneo).
RTC ruled in favor of petitioners and declared null and void the Deed of Extrajudicial
Partition with Quitclaim executed by the children of Ireneo.
We can see from this that Jose renounced his share in Lot 4676 believing that Lot
4618 was his and that this formed part of his inheritance.
RTC found baseless the claim of Rosario that Lot No. 4618 was an inheritance of her
father considering that a tax declaration is not conclusive proof of ownership. It was
also noted that the tax declarations started only in 1994 when Ireneo passed away in
1992.
74
The CA reversed the ruling of the RTC based on the ruling of the MTC- that since the
MTC found that Ireneo was the owner of the said lot, it is proper that the lot belongs to
Rosario. It also noted that the decision in the MTC case was issued on Feb. 18 1998
while petitioners filed their complaint in June 1998. The CA concluded that the latter
case was merely an afterthought. It ruled that Jose should have questioned the Deed
of Extranudicial Partition with Quitclaim was executed in 1997 however it was only
when he was being evicted that he decided to institute a case.
Issue:
1) W/N an ejectment suit is the proper avenue to thresh out the issue of ownership
(NO)
2) W/N the ruling of the CA was valid as it was based only on the ruling of the MTC
(NO)
3) W/N the verbal partition was valid (YES)
4) To whom does the disputed lot belong? (JOSE)
5) W/N tax declarations and tax receipts are conclusive evidence of ownership (NO)
Held:
1) Inferior courts are empowered to rule on the question of ownership raised by
the defendant in an ejectment suit, but only to resolve the issue of possession;
its determination is not conclusive on the issue of ownership.
There is a settled distinction between a summary action of ejectment and a plenary
action for recovery of possession and/or ownership of the land. What really
distinguishes an action for unlawful detainer from a possessory action (accion
publiciana) and from a reinvindicatory action (accion reinvindicatoria) is that the first is
limited to the question of possession de facto. Unlawful detainer suits (accion
interdictal) together with forcible entry are the two forms of ejectment suit that may be
filed to recover possession of real property. Aside from the summary action of
ejectment, accion publiciana or the plenary action to recover the right of possession
and accion reinvindicatoria or the action to recover ownership which also includes
recovery of possession, make up the three kinds of actions to judicially recover
possession.
Under Section 3 of Rule 70 of the Rules of Court, the Summary Procedure governs
the two forms of ejectment suit, the purpose being to provide an expeditious means of
protecting actual possession or right to possession of the property. They are not
processes to determine the actual title to an estate. If at all, inferior courts are
empowered to rule on the question of ownership raised by the defendant in such
suits, only to resolve the issue of possession and its determination on the ownership
issue is not conclusive.
We should then not that the case in the MTC was an ejectment case however the
case in the RTC was a case of Annulment of Documents, Ownership and Peaceful
75
possession which is an accion reinvindicatoru, or action to recover ownership, which

necessarily includes recovery of possession as an incident thereof.
accordance with an alleged partition are considered strong proof of an oral partition
which the Court will not hesitate to uphold.
2. The SC also found that it was necessary to review the CAs factual conclusions
since they were entire contrary to those of the RTC and have no citation of specific
supporting evidence.
5. Tax declarations and tax receipts are not conclusive evidence of ownership. It is
settled that tax declarations and tax receipts alone are not conclusive evidence of
ownership. They are merely indicia of a claim of ownership, but when coupled with
proof of actual possession of the property, they can be the basis of claim of ownership
through prescription. In the absence of actual, public and adverse possession, the
declaration of the land for tax purposes does not prove ownership.
3. The SC upheld the validity of the verbal partition. The validity of an oral partition
is well-settled in our jurisdiction as upheld in the cases of Vda. De Espina v.
Abaya13 and in Maestrado v. CA14
4. The SC also found that, from the evidence it is clear that the oral partition gave Lot
4618 to Jose, whereas Rosario presented no proof whatsoever that her father
inherited the same lot. Joses possession of the lot under a claim of ownership is well
borne out of the records and is consistent with the claimed verbal partition with his
siblings, and fully corroborated by his sisters who further testified that they each had
taken possession of their own shares and built their houses thereon.
A possessor of real estate property is presumed to have title thereto unless the
adverse claimant established a better right. Moreover, under Article 541 of the Civil
Code, one who possesses in the concept of owner has in his favor the legal
presumption that he possesses with a just title, and he cannot be obliged to show or
prove it. Similarly, Article 433 of the Civil Code provides that actual possession under
a claim of ownership raises a disputable presumption of ownership. Thus, actual
possession and exercise of dominion over definite portions of the property in
13 Anent the issue of oral partition, We sustain the validity of said partition. An agreement of
partition may be made orally or in writing. An oral agreement for the partition of the property
owned in common is valid and enforceable upon the parties. The Statute of Frauds has no
operation in this kind of agreements, for partition is not a conveyance of property but simply a
segregation and designation of the part of the property which belong to the co-owners.
14 In numerous cases it has been held or stated that parol partition may be sustained on the
ground of estoppel of the parties to assert the rights of a tenant in common as to parts of land
divided by parol partition as to which possession in severalty was taken and acts of individual
ownership were exercised. And a court of equity will recognize the agreement and decree it to
be valid and effectual for the purpose of concluding the right of the parties as between each
other to hold their respective parts in severalty. A parol partition may also be sustained on the
ground that the parties thereto have acquiesced in and ratified the partition by taking possession
in severalty, exercising acts of ownership with respect thereto, or otherwise recognizing the
existence of the partition. A number of cases have specifically applied the doctrine of part
performance, or have stated that a part performance is necessary, to take a parol partition out of
the operation of the statute of frauds. It has been held that where there was a partition in fact
between tenants in common, and a part performance, a court of equity would have regard to and
enforce such partition agreed to by the parties
Dispositive Portion: WHEREFORE, premises considered, the Petition is GRANTED.

The Decision dated July 19, 2007 of the Court of Appeals in CA-G.R. CV No. 79619 is
hereby REVERSED and SET ASIDE, and the Decision dated April 21, 2003 of the
Regional Trial Court of Dagupan City, Branch 41 in Civil Case No. 98-02371-D is
REINSTATED.
SO ORDERED.
47. Quintos v. Nicolas
==========================================================
IV.H Waters
48. Initiatives for Dialogue v. PSALM
Petitioners: INITIATIVES FOR DIALOGUE AND EMPOWERMENT THROUGH
ALTERNATIVE LEGAL SERVICES, INC. (IDEALS)
Respondents: POWER SECTOR ASSETS AND LIABILITIES MANAGEMENT
CORPORATION (PSALM), METROPOLITAN WATERWORKS AND SEWERAGE
SYSTEM (MWSS), NATIONAL IRRIGATION ADMINISTRATION (NIA), KOREA
WATER RESOURCES CORPORATION, FIRST GEN NORTHERN ENERGY CORP.,
SAN MIGUEL CORP., SNABOITIZ POWER-PANGASINAN INC., TRANS-ASIA OIL
AND ENERGY DEVELOPMENT CORPORATION, DMCI POWER CORP.
K-Power, a foreign corporation, won the bidding conducted by PSALM and was
awarded the generation of electric power of the Angat Hydro-Electric Power Plant
(AHEPP). The petitioners question the validity of this, saying that under the Water
Code of the Philippines, only corporations which are at least 60% Filipino-owned may
appropriate the waters and operate dams. The SC upheld the validity of the award to
K-Power, saying that since the NPC remains in control of the operation of the dam by
virtue of water rights granted to it, there is no legal impediment to foreign-owned
companies undertaking the generation of electric power using waters already
appropriated by NPC, the holder of water permit.
Facts:
76
b. All waters that belong to the State can not be the subject to acquisitive prescription.
PSALM is a GOCC created by Electric Power Industry Reform Act of 2001
(EPIRA).
PSALM commenced the privatization of the 246-megawatt (MW) AHEPP in
Bulacan.
PSALMs Board of Directors approved the Bidding Procedures for the
privatization of the AHEPP.
Subject of the bid was the AHEPP consisting of 4 main units and 3 auxiliary
units with an aggregate installed capacity of 218 MW. The two auxiliary units
owned by MWSS were excluded from the bid.
[CONDITIONS]
PSALMs Board of Directors approved and confirmed the issuance of a
Notice of Award to the highest bidder, K-Water.
IDEALS, FDC, AKBAYAN and APL filed for TRO.
The petitioners alleged, among others, that PSALM clearly violated the
constitutional provisions on the appropriation and utilization of water as a
natural resource, as implemented by the Water Code of the Philippines
limiting water rights to Filipino citizens and corporations which are at least
60% Filipino-owned.
Issue/s (relevant to topic about Water Code):
c. The State may allow the use or development of waters by administrative

concession.
d. The utilization, exploitation, development, conservation and protection of water
resources shall be subject to the control and regulation of the government through the
National Water Resources Council x xx
e. Preference in the use and development of waters shall consider current usages
and be responsive to the changing needs of the country.
x xxx
Art. 9. Waters may be appropriated and used in accordance with the provisions of this
Code.
Appropriation of water, as used in this Code, is the acquisition of rights over the use of
waters or the taking or diverting of waters from a natural source in the manner and for
any purpose allowed by law.
Art. 10. Water may be appropriated for the following purposes:
x xxx
1. Whether the bidding conducted and the Notice of Award issued by PSALM in favor
of the winning bidder, K-WATER (a foreign corporation) are valid.
(d) Power generation
Held/Ratio:
x xxx
1. YES (VALID).
Art. 13. Except as otherwise herein provided, no person including government

instrumentalities or government-owned or controlled corporations, shall appropriate
water without a water right, which shall be evidenced by a document known as a
water permit.
The sale of government-owned AHEPP to a foreign corporation not prohibited but

only Filipino citizens and corporations 60% of whose capital is owned by Filipinos may
be granted water rights.
The States policy on the management of water resources is implemented through the
regulation of water rights. Presidential Decree No. 1067, otherwise known as "The
Water Code of the Philippines" is the basic law governing the ownership,
appropriation utilization, exploitation, development, conservation and protection of
water resources and rights to land related thereto.
The pertinent provisions of Art. 3, P.D. No. 1067 provide:
Art. 3. The underlying principles of this code are:
a. All waters belong to the State.
Water right is the privilege granted by the government to appropriate and use water.
x xxx
Art. 15. Only citizens of the Philippines, of legal age, as well as juridical persons, who
are duly qualified by law to exploit and develop water resources, may apply for water
permits.
It is clear that the law limits the grant of water rights only to Filipino citizens and
juridical entities duly qualified by law to exploit and develop water resources, including
private corporations with sixty percent of their capital owned by Filipinos. In the case
of Angat River, the NWRB has issued separate water permits to MWSS, NPC and
NIA.
Under the Water Code concept of appropriation, a foreign company may not be said
to be appropriating our natural resources if it utilizes the waters collected in the dam
and converts the same into electricity through artificial devices. Since the NPC
remains in control of the operation of the dam by virtue of water rights granted to it, as
determined under DOJ Opinion No. 122, s. 1998, there is no legal impediment to
foreign-owned companies undertaking the generation of electric power using waters
already appropriated by NPC, the holder of water permit. Such was the situation of
hydropower projects under the BOT contractual arrangements whereby foreign
investors are allowed to finance or undertake construction and rehabilitation of
infrastructure projects and/or own and operate the facility constructed. However, in
case the facility requires a public utility franchise, the facility operator must be a
Filipino corporation or at least 60% owned by Filipino.
77
==========================================================
IV.I.1 Possession: Elements
49. Yu v. Pacleb
G.R. No. 130316

January 24, 2007
Petitioner: Ernesto and Elsie Yu
Respondent: Baltazar Pacleb
Recit Ready: (Brief background: Javier allegedly bought the land from one Del
Rosario. Del Rosario acquired the land from Pacleb. However, despite the transfer of
the property, the TCT remained in the name of Baltazar Pacleb and his wife. The
same property is the subject matter of the sale). Javier offered to sell a parcel of land
to Ernesto and Elsie. Ernesto and Elsie accepted the offer and gave Php200 00 down
payment for the purchase price. At the time of the turn-over of the land to the
petitioners, Ramon Pacleb (son of Baltazar) was occupying the land as tenants. Later
on, Ramon was appointed by Ernesto and Elsie as their trustee over the subject lot.
The petitioners were also able to annotate the fact of a concluded sale in the TCT
over the property. Upon respondents return to the Philippines, he allegedly entered
the property by means of force, threat, intimidation, strategy and stealth thereby
ousting petitioners and their trustee, Ramon, hence this action for forcible entry. In
this case, the Court ruled that Ernesto and Elsie Yu did not have prior possession of
the land in question. Without this, no action for forcible entry will be successful in
court. The title of the land in question remained in the name of respondent. As the
registered owner, petitioner had a right to the possession of the property, which is one
of the attributes of ownership.
Facts:
Ruperto Javier allegedly offered to sell Lot No. 6853-D to petitioners for P75
per sq.m.
Javier supposedly purchased the lot from one Rebecca del Rosario who, in
turn, acquired it from respondent and his wife. The title of the property
(Transfer Certificate of Title [TCT] No. T-118375), however, remained in the

names of respondent and his wife. The instruments in support of the series
of alleged sales were not registered.
Petitioners accepted the offer and gave Javier P200,000 as downpayment
for the lot. Javier then delivered his supposed muniments of title to
petitioners. After the execution of a contract to sell, he formally turned over
the property to petitioners.
At the time of the turn-over, a portion of the lot was occupied by Ramon C.
Pacleb, respondents son, and his wife as tenants. He was later appointed
as trustee of petitioner over the property.
Aside from taking possession of the property, petitioners also caused the
annotation on TCT No. T-118375 of a decision rendered in their favor in Civil
Case No. 741-93 ordering Javier to deliver the subject of the concluded sale.
Upon respondents return to the Philippines in May 1995, he allegedly
entered the property by means of force, threat, intimidation, strategy and
stealth thereby ousting petitioners and their trustee, Ramon.
Despite repeated demands, respondent, asserting his rights as registered
owner of the property, refused to vacate the premises and surrender its
possession to petitioners.
Petitioner then filed this current action for forcible entry.
MTC: Respondent was ordered to surrender the possession of the property
to the petitioners.
RTC affirmed in toto.
Upon appeal to the CA, the respondents petition was granted. The decision
of the RTC in favor of Ernesto and Elsie.
Issue: W/N petitioners had prior physical possession of the property (NO)
Held:
In an action for forcible entry, the plaintiff must prove that he was in prior
possession of the land or building and that he was deprived thereof by means of
force, intimidation, threat, strategy or stealth. The plaintiff, however, cannot prevail
where it appears that, as between himself and the defendant, the latter had
possession antedating his own.
Two things are paramount in possession. First, there must be occupancy,
apprehension or taking. Second, there must be intent to possess (animus
possidendi). Here, petitioners failed to establish that they had prior physical
possession to justify a ruling in their favor in the complaint for forcible entry against
respondent.
The claim that the lot was turned over to petitioners in 1992 was self-serving in the
face of this factual finding. On the other hand, the tax declarations and receipts in the
name of respondent in 1994 and 1995 established the possession of respondent. The
payment of real estate tax is one of the most persuasive and positive indications
showing the will of a person to possess in concepto de dueo or with claim of
ownership.
Possession in the eyes of the law does not mean that a man has to have his
feet on every square meter of the ground before he is deemed in possession. In this
case, Ramon, as respondents son, was named caretaker when respondent left for
the United States in 1983. Due to the eventual loss of trust and confidence in Ramon,
however, respondent transferred the administration of the land to his other son,
Oscar, in January 1995 until his return in May 1995. In other words, the subject land
was in the possession of the respondents sons during the contested period.
Most important, the title of the land in question remained in the name of
respondent. As the registered owner, petitioner had a right to the possession of the
property, which is one of the attributes of ownership. Where a dispute over
possession arises between two persons, the person first having actual possession is
the one who is entitled to maintain the action granted by law.
The Civil Code states:
Art. 538. Possession as a fact cannot be recognized at the same time in two
different personalities except in the cases of co-possession. Should a question arise
regarding the fact of possession, the present possessor shall be preferred; if there are
two possessors, the one longer in possession; if the dates of the possession are the
same, the one who presents a title; and if all these conditions are equal, the thing
shall be placed in judicial deposit pending determination of its possession or
ownership through proper proceedings.
==========================================================
IV.I.3 Possession: Requirements to ripen into ownership
50. SMPSM v. BCDA
51. Julita Imuan v. Juanito Cereno
Petitioners: Julita V. Imuan, Rodolfo Velasquez, Arturo Velasquez, Arcadio
Velasquez, Betty Velasquez, Rosa V. Petuya, Felicidad Velasquez, Raymundo Imuan,
Gerardo Imuan, Jr., And Andong Velasquez
Respondents: Juanito Cereno, Febelinda G. Cereno, Gemma C. Gabarda, Ledesma
G. Cereno, Bleceria C. Sula And Sally G. Cereno
Ponente: Peralta, J.
Short Facts/Doctrine:
Pablo died intestate leaving 2 parcels of land. Second wife Juana remained in
possession of one parcel of land which Juana sold to respondents-spouses. The lot
78
was originally one whole lot which became divided into two (Lots 1 and 2).
Respondents built their home planted fruit-bearing trees in Lot 2 while etitioners
entered Lot 1 and took possession of it by building a nipa hut. Respondents filed an
ejectment case against the petitioners which was dismissed because the latter
eventually left Lot 1. Petitioners then filed a complaint for annulment of document,
reconveyance against respondents. The SC ruled that respondents acquired the
disputed property by acquisitive prescription.
The party who asserts ownership by adverse possession must prove the presence of
the essential elements of acquisitive prescription.
1.
2.
Ordinary acquisitive prescription requires possession in good faith and with

just title for ten years.
Extraordinary prescription, ownership and other real rights over immovable
property are acquired through uninterrupted adverse possession for thirty years
without need of title or of good faith.
Good faith of the possessor consists in the reasonable belief that the person from
whom he received the thing was the owner thereof, and could transmit his ownership.
For purposes of prescription, there is just title when the adverse claimant came into
possession of the property through one of the modes recognized by law for the
acquisition of ownership or other real rights, but the grantor was not the owner or
could not transmit any right.
When petitioners filed the instant case, more than 29 years had already elapsed,
thus, the ten-year period for acquisitive prescription has already been satisfied.
Petitioners are guilty of laches that would bar them from belatedly asserting their
claim.
Laches is defined as the failure to assert a right for an unreasonable and
unexplained length of time, warranting a presumption that the party entitled to assert
it has either abandoned or declined to assert it. This equitable defense is based upon
grounds of public policy, which requires the discouragement of stale claims for the
peace of society.
Facts:
During his lifetime, Pablo de Guzman (Pablo) contracted two marriages. His first
marriage was with Teodora Soriano (Teodora), with whom he had three children,
namely, Alfredo, Cristita, and Inday. His second marriage was in 1919 with Juana
Velasquez (Juana), with whom he also had three children, namely: Nena,
Teodora, and Soledad. All these children are now dead.
Petitioners are Pablo's grandchildren by his first marriage, while

respondent Juanito Cereno (Juanito) is Soledad's husband and the other
respondents are their children.
Pablo died intestate leaving two parcels of land, to wit: (1) a parcel of coconut
land located at Salaan Mangaldan, Pangasinan; and (2) a parcel of corn land
located at (Inlambo) Palua, Mangaldan, Pangasinan.
After Pablo's death in 1936, his second wife Juana and their children continued
to be in possession of the parcel of land located at Salaan, Mangaldan,
Pangasinan (the disputed property), where they lived since they were married in
1919.
On January 24, 1970, Juana executed a Deed of Absolute Sale in

favor of respondents-spouses, Soledad, Juana and Pablo's daughter, and
her husband Juanito conveying the subject property. The deed was duly
registered with the Register of Deeds of Lingayen, Pangasinan.
On January 26, 1970, a Joint Affidavit was executed by Alfredo de Guzman and
Teofilo Cendana attesting to the fact that Pablo ceded the property in favor of
Juana on the occasion of their marriage, but the document was lost.
Tax declarations were issued to the respondents-spouses and thereafter, they

enjoyed exclusive, open and uninterrupted possession of the property. Later, the
disputed property which originally consisted of one whole lot was traversed by
a barangay road dividing it into two (2) lots, namely, Lot 3533 and Lot 3559.
Respondents-spouses Cereno built their house on Lot 3559 and had planted
fruit-bearing trees on Lot 3533. Meanwhile, the parcel of cornland in Palua,
Mangaldan, Pangasinan has never been in possession of any of the parties since
it eroded and was submerged under water, eventually forming part of the
riverbed.
Sometime in January 1999, petitioners entered and took possession of Lot 3533
by building a small nipa hut thereon. Respondents then filed before the MTC of
Mangaldan, Pangasinan an ejectment case against petitioners. MTC dismissed
the case as both parties prayed for its dismissal considering that petitioners had
already left Lot 3533 immediately after the filing of the complaint.
Petitioners then filed with the RTC of Dagupan City a Complaint for annulment of
document, reconveyance and damages against respondents.
RTC decided in favor of the petitioners:

o Declaring as null and void the Deed of Absolute Sale; Tax Declaration
Nos. 21268 for Lot 3533 & 21269 for Lot 3559 in the names of Juanito
Cereno and Soledad de Guzman;
o Ordering the defendants (1) to reconvey the property in question to the
plaintiffs and to peacefully surrender the possession of the premises to
the plaintiffs; and (2) to pay plaintiffs litigation expenses in the amount
of P10,000.00.
On appeal by respondents, the CA reversed the RTC decision. Petitioners

motion for reconsideration was denied.
Petitioners contention:
79
Since the CA and the RTC found that there was no partition of the
property and no valid donation propter nuptias was made by Pablo to
Juana, the rule on co-ownership among Pablos heirs should govern the
property.
o When Juana sold the property to respondents Cerenos, the rights of
petitioners as co-owners should not have been affected.
o The CAs finding that the joint affidavit attesting to the donation propter
nuptias can be the basis of a belief in good faith that Juana was the
owner of the disputed property is erroneous, since Juana had
knowledge from the time she got married to Pablo that the property was
acquired during the latter's first marriage.
o Respondents Spouses Cereno could not be considered in good faith
since Soledad is the daughter of Juana with her marriage to Pablo and
could not be considered a third party to the dispute without knowledge
of the nature of the property.
o Being co-owners, neither prescription nor laches can be used against
them to divest them of their property rights.
Respondents contention:
o Juana in her own right had acquired the property by prescription.
o The CA correctly considered respondents 29 years of actual and
peaceful possession of the property aside from their purchase of the
property from Juana in finding them as the true owners.
o
Issue: Whether the respondents have acquired the disputed property by acquisitive
prescription.
Held: YES.
Ratio:
Prescription is another mode of acquiring ownership and other real rights over
immovable property.
o It is concerned with lapse of time in the manner and under conditions
laid down by law, namely, that the possession should be in the concept
of an owner, public, peaceful, uninterrupted and adverse.
o Open when it is patent, visible, apparent, notorious and not clandestine;
o Continuous when uninterrupted, unbroken and not intermittent or
occasional;
o Exclusive when the adverse possessor can show exclusive dominion
over the land and an appropriation of it to his own use and benefit; and
o Notorious when it is so conspicuous that it is generally known and talked
of by the public or the people in the neighborhood.
The party who asserts ownership by adverse possession must prove the
presence of the essential elements of acquisitive prescription.
o
o
Ordinary acquisitive prescription requires possession in good faith and

with just title for ten years.
Extraordinary prescription, ownership and other real rights over
immovable property are acquired through uninterrupted adverse
possession for thirty years without need of title or of good faith.
Good faith of the possessor consists in the reasonable belief

that the person from whom he received the thing was the
owner thereof, and could transmit his ownership.
For purposes of prescription, there is just title when the

adverse claimant came into possession of the property through
one of the modes recognized by law for the acquisition of
ownership or other real rights, but the grantor was not the
owner or could not transmit any right.
In this case, records show that as early as 1970, when the property was sold by
Juana to respondents Spouses Cereno, the latter immediately took possession of
the property. Since then, respondents possessed the property continuously,
openly, peacefully, in the concept of an owner, exclusively and in good faith with
just title, to the exclusion of the petitioners and their predecessors-in-interest until
the filing of the complaint in 1999 which is the subject of this present petition.
Notably, the property was traversed by a barangay road, thus, it was divided into
two lots. The house of respondents is located on the eastern part of the road,
while the lot on the western part of the road was planted with fruit- bearing trees
by respondents. It was admitted by petitioners that they saw the house of
respondents constructed on the lot and yet never questioned the same. It was
also established that respondents are the ones gathering the fruits of the land
and enjoying the same to the exclusion of petitioners and yet the latter never
prevented them from doing so. In fact, while petitioners learned of the sale of the
property by Juana to the Spouses Cereno in 1980, they never took any action to
protect whatever rights they have over the property nor raised any objection on
respondents' possession of the property. Petitioners' inaction is aggravated by
the fact that petitioners just live a mere 100 meters away from the property.
Also, immediately after the sale of the property to the Spouses Cereno,
they declared the property in their names for taxation purposes and since then
religiously paid the taxes due on the property. Petitioners never challenged the
same for a long period of time which clearly establishes respondents' claim as
owners of the property. As is well known, the payment of taxes, coupled with
actual possession of the land covered by the tax declaration, strongly supports a
claim of ownership.
Respondent Juanito also exercised dominion over the property by mortgaging
the same to Manaoag Rural Bank in 1994 and the mortgage was cancelled only
in January 1999.
T requirement of just title and good faith are also satisfied in this case by the joint
affidavit that the defendants-appellants presented, attesting to the donation
propter nuptias of the disputed property by Pablo to Juana. It is undisputed that
Pablo and Juana had lived in the disputed property from the time of their
80
marriage in 1919, and Juana continued to live and to possess this property in the
concept of an owner from the time of Pablo's death in 1936 up to the time she
sold it to spouses Cereno in 1970. These circumstances are sufficient bases for
the belief that Juana was the owner of the property she conveyed by sale, and
therefore, the spouses Cereno had the good faith that acquisition by prescription
requires when they became the purchasers in the contract of sale with Juana.
Notably, one of the affiants in the joint affidavit which was executed in 1970 was
Alfredo, Pablo's son by his first marriage. Not one among Alfredo's children had
ever come out to assail the validity of the affidavit executed by their father. In fact,
not one of Alfredo's heirs joined petitioners in this case. Moreover, not one
among the children of the first marriage when they were still alive ever made a
claim on their successional rights over the property by asking for its partition.
Such joint affidavit could constitute a legal basis for Juana's adverse and
exclusive character of the possession of the property and would show the
Spouses Cereno's good faith belief that Juana was the owner of the property.
Thus, when petitioners filed the instant case, more than 29 years had already
elapsed, thus, the ten-year period for acquisitive prescription has already been
satisfied.
Petitioners are guilty of laches that would bar them from belatedly asserting their
claim.
Laches is defined as the failure to assert a right for an unreasonable and

unexplained length of time, warranting a presumption that the party entitled to
assert it has either abandoned or declined to assert it. This equitable defense is
based upon grounds of public policy, which requires the discouragement of stale
claims for the peace of society.
Petitioners claim that they knew about the sale only in 1980 yet they did not take
any action to recover the same and waited until 1999 to file a suit without offering
any excuse for such delay. Records do not show any justifiable reason for
petitioners' inaction for a long time in asserting whatever rights they have over
the property given the publicity of respondents' conduct as owners of the
property.
Disposition: The petition is DENIED.
52. Jaimes Abalos v. Heirs of Torio
Petitioner: JAIME ABALOS and SPOUSES FELIX SALAZAR and CONSUELO
SALAZAR, GLICERIO ABALOS, HEIRS OF AQUILINO ABALOS, namely: SEGUNDA
BAUTISTA, ROGELIO ABALOS, DOLORES A. ROSARIO, FELICIDAD ABALOS,
ROBERTO ABALOS, JUANITO ABALOS, TITA ABALOS, LITA A. DELA CRUZ AND
HEIRS OF AQUILINA ABALOS, namely: ARTURO BRAVO, PURITA B. MENDOZA,
LOURDES B. AGANON, CONSUELO B. SALAZAR, PRIMA B. DELOS SANTOS,
THELMA APOSTOL and GLECERIO ABALOS
Respondent: HEIRS OF VICENTE TORIO, namely: PUBLIO TORIO, LIBORIO
TORIO, VICTORINA TORIO, ANGEL TORIO, LADISLAO TORIO, PRIMO TORIO and
NORBERTO TORIO
Ponente: PERALTA, J.
Issues:

Vicente Torio died intestate, leaving behind a parcel of land located in
Pangasinan. During the lifetime of Vicente, petitioners Jaime Abalos and Sps. Salazar
were allowed to stay and build their houses on the subject land. However, years after
Vicentes death, respondents who are the children and heirs of Vicente asked Jaime
and Sps. Salazar to vacate the lot, but they refused. The heirs filed a complaint for
recovery of possession and damages with the MTC against the petitioners. Jaime and
the Sps. Salazar filed their Answer with Counterclaim and stated that respondents
cause of action is barred by acquisitive prescription.
Held: It is clear that during their possession of the property in question, petitioners
acknowledged ownership thereof by the immediate predecessor-in-interest of
respondents. Petitioners never disputed such an acknowledgment. Thus, having
knowledge that they nor their predecessors-in-interest are not the owners of the
disputed lot, petitioners possession could not be deemed as possession in good faith
as to enable them to acquire the subject land by ordinary prescription.
Petitioners possession of the lot in question was by mere tolerance of respondents
and their predecessors-in-interest. Acts of possessory character executed due to
license or by mere tolerance of the owner are inadequate for purposes of acquisitive
prescription. Possession, to constitute the foundation of a prescriptive right, should be
adverse, if not, such possessory acts, no matter how long, do not start the running of
the period of prescription. Moreover, the CA correctly held that even if the character of
petitioners possession of the subject property had become adverse, still falls short of
the required period of thirty (30) years in cases of extraordinary acquisitive
prescription.
Facts:
81
Vicente Torio (Vicente) died intestate, leaving behind a parcel of land located in
Pangasinan. During the lifetime of Vicente, petitioners Jaime Abalos and Sps.
Salazar were allowed to stay and build their houses on the subject land.
However, years after Vicentes death, respondents who are the children and heirs
of Vicente asked Jaime and Sps. Salazar to vacate the lot, but they refused. The
heirs filed a complaint for recovery of possession and damages with the MTC
against the petitioners.
Jaime and the Sps. Salazar filed their Answer with Counterclaim and stated that
respondents cause of action is barred by acquisitive prescription.
MTC ruled in favor of the heirs of Torio, ordering the petitioners Jaime and Sps.
Salazar to pay the heirs land rent and attorneys fees and costs of suit.
RTC in favor of Jaime and Sps. Salazar, holding that they have acquired the
subject property through prescription.
CA reversed ruling in favor of the heirs.
WON Jaime and Sps. Salazar and their predecessors-in-interest possessed the
disputed lot in the concept of an owner or by mere tolerance of Torio and his
predecessors-in-interest.
Ruling:
Possession was by mere tolerance.
Ratio:
Petitioners claim that they have acquired ownership over the disputed lot through
ordinary acquisitive prescription.
Acquisitive prescription of dominion and other real rights may be ordinary or

extraordinary.
Ordinary acquisitive prescription requires possession in good faith and with
just title for ten (10) years. Without good faith and just title, acquisitive
prescription can only be extraordinary in character which requires
uninterrupted adverse possession for thirty (30) years.
Possession in good faith consists in the reasonable belief that the person
from whom the thing is received has been the owner thereof, and could
transmit his ownership.
There is just title when the adverse claimant came into possession of the
property through one of the modes recognized by law for the acquisition of
ownership or other real rights, but the grantor was not the owner or could not
transmit any right.
In the instant case, it is clear that during their possession of the property in question,
petitioners acknowledged ownership thereof by the immediate predecessor-in-interest
of respondents. This is clearly shown by the Tax Declaration in the name of Jaime
wherein it contains a statement admitting that Jaimes house was built on the land of
Vicente, respondents immediate predecessor-in-interest. Petitioners never disputed
such an acknowledgment. Thus, having knowledge that they nor their predecessorsin-interest are not the owners of the disputed lot, petitioners possession could not be
deemed as possession in good faith as to enable them to acquire the subject land by
ordinary prescription.
In this respect, the Court agrees with the CA that petitioners possession of the lot in
question was by mere tolerance of respondents and their predecessors-in-interest.
Acts of possessory character executed due to license or by mere tolerance of
the owner are inadequate for purposes of acquisitive prescription. Possession,
to constitute the foundation of a prescriptive right, should be adverse, if not, such
possessory acts, no matter how long, do not start the running of the period of
prescription. Moreover, the CA correctly held that even if the character of petitioners
possession of the subject property had become adverse, still falls short of the
required period of thirty (30) years in cases of extraordinary acquisitive prescription.
Records show that the earliest Tax Declaration in the name of petitioners was in 1974.
Reckoned from such date, the thirty-year period was completed in 2004. However,
herein respondents complaint was filed in 1996, effectively interrupting petitioners
possession upon service of summons on them. Based on the foregoing, Jaime Abalos
and the Spouses Salazar have not inherited the disputed land because the same was
shown to have already been validly sold to Marcos Torio, who, thereupon, assigned
the same to his son Vicente, the father of petitioners.
Disposition:
The petition is DENIED. The assailed Decision and Resolution of the Court of Appeals
are AFFIRMED.
==========================================================
IV.I.4 Possession: Acquisitive Prescription
53. Mercado v. Espinocilla
Petitioner: Mercado (Salvacions son)
Respondents: Fernando and Belen Espinocilla (Grandson, and daughter in law of
Macario)
Short facts: A parcel of land was inherited by the 5 children of Doroteo. After one of
the children of Doroteo died, an oral partition among the 4 remaining children in 1945.
Based on the oral partition and on the alleged donation by Dionisia, Macario obtained
Dionisias part. Macario thereafter sold his part to his son Robert (father, and husband
of the respondents). Robert thereafter sold a portion to Caridad. Thereafter, the son
of Salvacion (one of the 4 remaining children) filed a complaint for recoveyance in
2000. He alleged that 39 sq. m. should be returned to him as he should have been
entitled to 171 sq. m. but he is only occupying 132sq. m.
Court held acquisitive prescription has set in in favour of respondents.
Furthermore, the action for reconveyance is barred by extinctive prescription.
82
and actions are lost by the lapse of time. Petitioners action for recovery of possession
having been filed 55 years after Macario occupied Dionisias share, it is also barred by
extinctive prescription.
Facts:
Doroteo Espinocilla owned a 570 sq. m. parcel of land (Lot No. 552). After he
died, his five children, Salvacion, Aspren, Isabel, Macario, and Dionisia divided
Lot No. 552 equally (114 each) among themselves.
Later, Dionisia died without issue ahead of her four siblings, and Macario took
possession of Dionisias share. He claimed that Dionisia had donated her share
to him in May 1945. In an affidavit of transfer of real property dated November 1,
1948, Macario claimed that Dionisia had donated her share to him in May 1945.
On August 9, 1977, Macario and his daughters sold 225 sq. m. to his son Roger,
father of respondent Ferdinand.
On March 8, 1985, Roger Espinocilla sold 114 sq. m. to Caridad Atienza.
Per actual survey of Lot No. 552, respondent Belen Espinocilla (wife of Roger)
occupies 109 sq. m., Caridad Atienza occupies 120 sq. m., Caroline Yu occupies
209 sq. m., and petitioner, Salvacion's son, occupies 132 sq. m.
Petitioner sued the respondents (Belen and Ferdinand) to recover an alleged

encroachment of 39 sq. m. that he claims must be returned to him.
Petitioners contention:
He avers that he is entitled to own and possess 171 sq. m. of Lot No. 552,
having inherited 142.5 sq. m. from his mother Salvacion and bought 28.5 sq. m.
from his aunt Aspren.
According to him, his mothers inheritance is 142.5 sq. m., that is, 114 sq. m.
from Doroteo plus 28.5 sq. m. from Dionisia. Since the area he occupies is only
132 sq. m., he claims that respondents encroach on his share by 39 sq. m.
Macario committed fraud in acquiring his share; hence, any evidence adduced by
him to justify such acquisition is inadmissible. Thus, if a person obtains legal title
to property by fraud or concealment, courts of equity will impress upon the title a
so-called constructive trust in favor of the defrauded party.
Prescription, as a mode of acquiring ownership and other real rights over immovable
property, is concerned with lapse of time in the manner and under conditions laid
down by law, namely, that the possession should be in the concept of an owner,
public, peaceful, uninterrupted, and adverse. Since 1945 until 2000 (time of filing
of complaint), Macario and his heirs have been in adverse possession of the lot in
question.
Respondents contention:
Respondents agree that Doroteos five children each inherited 114 sq. m. of Lot
No. 552. However, Macarios share increased when he received Dionisias
share. Macarios increased share was then sold to his son Roger, respondents
husband and father.
Respondents claim that they rightfully possess the land they occupy by virtue of
acquisitive prescription and that there is no basis for petitioners claim of
encroachment.
An action for reconveyance based on an implied or constructive trust

prescribes in 10 years from the time the right of action accrues. This is the other
kind of prescription under the Civil Code, called extinctive prescription, where rights
RTC: Ruled in favour of Petitioner. There being no public document to prove Dionisias
donation, the RTC also held that Macarios 1948 affidavit is void and is an invalid
repudiation of the shares of his sisters Salvacion, Aspren, and Isabel in Dionisias
share. Accordingly, Macario cannot acquire said shares by prescription. The RTC
further held that the oral partition of Lot No. 552 by Doroteos heirs did not include
Dionisias share and that partition should have been the main action.
CA: Reversed RTC ruling on the ground that extraordinary acquisitive prescription
has set in. CA found that Doroteos four remaining children made an oral partition of
Lot No. 552 after Dionisias death in 1945 and occupied specific portions. And
since petitioners complaint was filed only on July 13, 2000, the CA concluded that
prescription has set in.
Issue: Whether action to recover the subject portion is barred by prescription?
Held: Yes
Ratio:
Prescription, as a mode of acquiring ownership and other real rights over

immovable property, is concerned with lapse of time in the manner and under
conditions laid down by law, namely, that the possession should be in the
concept of an owner, public, peaceful, uninterrupted, and adverse.
Acquisitive prescription of real rights may be ordinary or extraordinary.

o Ordinary acquisitive prescription requires possession in good faith
and with just title for 10 years.
o In extraordinary prescription, ownership and other real rights over
immovable property are acquired through uninterrupted adverse
possession for 30 years without need of title or of good faith.
Here, petitioner himself admits the adverse nature of respondents possession

with his assertion that Macarios fraudulent acquisition of Dionisias share created
a constructive trust.
o In a constructive trust, there is neither a promise nor any fiduciary
relation to speak of and the so-called trustee (Macario) neither accepts
any trust nor intends holding the property for the beneficiary (Salvacion,
Aspren, Isabel).
o The relation of trustee and cestui que trust does not in fact exist,
and the holding of a constructive trust is for the trustee himself,
and therefore, at all times adverse. Prescription may supervene
even if the trustee does not repudiate the relationship.
Then, too, respondents uninterrupted adverse possession for 55 years of 109 sq.
m. of Lot No. 552 was established.
o Macario occupied Dionisias share in 1945 although his claim that
Dionisia donated it to him in 1945 was only made in a 1948 affidavit.
o Macarios possession of Dionisias share was public and adverse since
his other co-owners also occupied portions of Lot No. 552.
o The 1977 sale made by Macario and his two daughters in favor of his
son Roger confirms the adverse nature of Macarios possession
because said sale of 225 sq. m. was an act of ownership over
Macarios original share and Dionisias share.
83
In 1985, Roger also exercised an act of ownership when he sold 114 sq.
m. to Caridad Atienza.
It was only in the year 2000, upon receipt of the summons to answer petitioners
complaint, that respondents peaceful possession of the remaining portion (109
sq. m.) was interrupted.
o By then, however, extraordinary acquisitive prescription has already set
in in favor of respondents.
o That the RTC found Macarios 1948 affidavit void is of no moment.
Extraordinary prescription is unconcerned with Macarios title or
good faith.
The CA correctly dismissed petitioners complaint as an action for

reconveyance based on an implied or constructive trust prescribes in 10
years from the time the right of action accrues. This is the other kind of
prescription under the Civil Code, called extinctive prescription, where rights and
actions are lost by the lapse of time.
Petitioners action for recovery of possession having been filed 55 years after
Macario occupied Dionisias share, it is also barred by extinctive prescription.
==========================================================
o
IV.I.5 Possession: Rights of Legal Possessor

54. Maglucot-Aw v. Maglucot
==========================================================
IV.I.7 Possession: Possession of Movables
55. Subic Bay v. Fernandez
56. Dizon v. Suntay

DOMINADOR DIZON, doing business under the firm name "Pawnshop of
Dominador Dizon", petitioner,
LOURDES G. SUNTAY, respondent.
Recit Ready:
Lourdes Suntay owns a diamond ring. She gave this ring and several of her jewelries
to her friend, Sison, so that Sison could sell them However, violating the rules on
agency, Sison pledged the movables to Dizons pawnshop. Sunaty now wants to
recover the jewelries from the pawnshop but Dizon refuses to deliver them back. The
issue is whether Suntay has the right to revover the jewelries. SC held that yes, she
does. 'The possession of movable property acquired in good faith is equivalent to a
title. Nevertheless, one who has lost any movable or has been unlawfully deprived
thereof may recover it from the person in possession of the same. If the possessor of
a movable lost of which the owner has been unlawfully deprived, has acquired it in
good faith at a public sale, the owner cannot obtain its return without reimbursing the
price paid therefor. Also, estoppel cannot be invoked by Dizon.
Lourdes Suntay is the owner of a diamond ring and several pieces of jewelry.
The diamond ring was turned over to a certain Clarita R. Sison, for sale on
commission, along with other pieces of jewelry of Suntay. After the lapse of a
considerable time without Clarita R. Sison having returned to the plaintiff the
latter's ring, the plaintiff made demands on Clarita R. Sison for the return of
her ring but the latter could not comply.
Since Suntay insistently demanded from Clarita R. Sison the return of her
ring, the latter finally delivered to the former the pawnshop ticket which is the
receipt of the pledge with Dizons pawnshop of the plaintiff's ring.
Dizon, however, refused to return the ring.
The RTC and the CA ruled in favor of Suntay, by virtue of Art. 559 of the Civil
Code.
Dizon now brings the case to the SC.
Issue:
W/N Suntay has the right to recover her movable property from Dizon. YES
Ratio:
The controlling provision is Article 559 of the Civil Code. It reads thus: 'The
possession of movable property acquired in good faith is equivalent to a title.
Nevertheless, one who has lost any movable or has been unlawfully
deprived thereof may recover it from the person in possession of the same.
If the possessor of a movable lost of which the owner has been unlawfully
deprived, has acquired it in good faith at a public sale, the owner cannot
obtain its return without reimbursing the price paid therefor.'
Estoppel: Suntay not estopped
Estoppel as known to the Rules of Court 6 and prior to that to the Court of
Civil Procedure, 7 has its roots in equity. Good faith is its basis. 8 It is a
response to the demands of moral right and natural justice. 9 For estoppel to
exist though, it is indispensable that there be a declaration, act or omission
by the party who is sought to be bound. Nor is this all. It is equally a requisite
that he, who would claim the benefits of such a principle, must have altered
his position, having been so intentionally and deliberately led to comport
himself thus, by what was declared or what was done or failed to be done. If
thereafter a litigation arises, the former would not be allowed to disown such
84
act, declaration or omission. The principle comes into full play. It may
successfully be relied upon. A court is to see to it then that there is no turning
back on one's word or a repudiation of one's act. So it has been from our
earliest decisions.
How then can petitioner in all seriousness assert that his appeal finds
support in the doctrine of estoppel? Neither the promptings of equity nor the
mandates of moral right and natural justice come to his rescue. He is
engaged in a business where presumably ordinary prudence would manifest
itself to ascertain whether or not an individual who is offering a jewelry by
way of a pledge is entitled to do so. If no such care be taken, perhaps
because of the difficulty of resisting opportunity for profit, he should be the
last to complain if thereafter the right of the true owner of such jewelry
should be recognized. The law for this sound reason accords the latter
protection.
==========================================================
IV.J.1 Usufruct: Nature/ Elements
57. NHA v CA
G.R. No. 148830|April 13, 2005
Petitioner: NATIONAL HOUSING AUTHORITY
Respondent: COURT OF APPEALS, BULACAN GARDEN CORPORATION and
MANILA SEEDLING BANK FOUNDATION, INC.
Ponente: CARPIO, J
Summary: Pres. Marcos issued Proclamation no. 481 setting aside 120 hectares for
the National Govt Center. Proclamation no. 1670 was thereafter issued which
removed 7 hectares from said reservation and granted MSBF usufructuary rights over
it. MSBF leased a portion of the area to BGC. Pres. Corazon issued a memorandum
authorizing the NHA to commercialize the remaining land out of the 120 hectares.
NHA asked BGC to vacate so BGC filed an injunction case. The SC held that a
usufructuary may lease the object held in usufruct. Thus, the NHA may not evict BGC
if portion of land MSBF leased to BGC is within the seven-hectare area held in
usufruct by MSBF. The owner of the property must respect the lease entered into by
the usufructuary so long as the usufruct exists. However, the NHA has the right to
evict BGC if BGC occupied a portion outside of the seven-hectare area covered by
MSBFs usufructuary rights. The case was remanded to the trial court so that a proper
survey can be conducted to determine the metes and bounds of the usufruct and the
remaining area of the subject property that can be commercialized.
Facts:
Proclamation No. 481 issued by then President Marcos set aside a 120hectare portion of land in Quezon City owned by the NHA as reserved
property for the site of the National Government Center (NGC).

President Marcos then issued Proclamation No. 1670, which removed a
seven-hectare portion from the coverage of the NGC. Said proclamation
gave MSBF usufructuary rights over this segregated portion.
MSBF occupied the area granted by Proclamation No. 1670 but over the
years, MSBFs occupancy exceeded the seven-hectare area subject to its
usufructuary rights.
By 1987, MSBF occupied approximately 16 hectares. By then the land
occupied by MSBF was bounded by Epifanio de los Santos Avenue (EDSA)
to the west, Agham Road to the east, Quezon Avenue to the south and a
creek to the north.
MSBF leased a portion of the area it occupied to BGC and other stallholders.
BGC leased the portion facing EDSA, which occupies 4,590 square meters
of the 16-hectare area.
President Corazon Aquino issued Memorandum Order No. 127 (MO 127)
which revoked the reserved status of the 50 hectares, more or less,
remaining out of the 120 hectares of the NHA property reserved as site of
the National Government Center. MO 127 also authorized the NHA to
commercialize the area and to sell it to the public.
Acting on the power granted under MO 127, the NHA gave BGC ten days to
vacate its occupied area. Any structure left behind after the expiration of the
ten-day period will be demolished by NHA.
BGC then filed a complaint for injunction before the trial court.
The trial court agreed with BGC that Proc. No. 1670 gave MSBF the right to
conduct the survey, which would establish the seven-hectare area covered
by MSBFs usufructuary rights. However, the trial court held that MSBF failed
to act seasonably on this right to conduct the survey. It then dismissed the
injunction case.
The NHA demolished BGCs facilities soon thereafter.
CA reversed the trial courts ruling.
Issue: W/N NHA can evict BGC and demolish the improvements it build
Held: Case remanded to the trial court in order to determine whether MSBF and BGC
exceeded the usufruct of 7 hectare granted to MSBF under Proclamation 1670. (The
NHA can evict BGC if it is found to be outside the 7 hectares of land)
Ratio:
A usufruct may be constituted for a specified term and under such conditions as the
parties may deem convenient subject to the legal provisions on usufruct. A
usufructuary may lease the object held in usufruct. Thus, the NHA may not evict BGC
if the 4,590 square meter portion MSBF leased to BGC is within the seven-hectare
area held in usufruct by MSBF. The owner of the property must respect the lease
entered into by the usufructuary so long as the usufruct exists. However, the NHA has
the right to evict BGC if BGC occupied a portion outside of the seven-hectare area
85
covered by MSBFs usufructuary rights.

MSBFs survey shows that BGCs stall is within the seven-hectare area. On the other
hand, NHAs survey shows otherwise. The entire controversy revolves on the question
of whose land survey should prevail.
Article 565 of the Civil Code states:
ART. 565. The rights and obligations of the usufructuary shall be those provided in the
title constituting the usufruct; in default of such title, or in case it is deficient, the
provisions contained in the two following Chapters shall be observed.
In the present case, Proclamation No. 1670 is the title constituting the usufruct.
Proclamation No. 1670 categorically states that the seven-hectare area shall be
determined by future survey under the administration of the Foundation subject to
private rights if there be any. Proclamation No. 1670 authorized MSBF to determine
the location of the seven-hectare area. This authority, coupled with the fact that
Proclamation No. 1670 did not state the location of the seven-hectare area, leaves no
room for doubt that Proclamation No. 1670 left it to MSBF to choose the location of
the seven-hectare area under its usufruct.
To prefer the NHAs survey to MSBFs survey will strip MSBF of most of its main
facilities. Only the main building of MSBF will remain with MSBF since the main
building is near the corner of EDSA and Quezon Avenue. The rest of MSBFs main
facilities will be outside the seven-hectare area.
The Court cannot countenance MSBFs act of exceeding the seven-hectare portion
granted to it by Proclamation No. 1670. A usufruct is not simply about rights and
privileges. A usufructuary has the duty to protect the owners interests. One such duty
is found in Article 601 of the Civil Code which states:
ART. 601. The usufructuary shall be obliged to notify the owner of any act of a third
person, of which he may have knowledge, that may be prejudicial to the rights of
ownership, and he shall be liable should he not do so, for damages, as if they had
been caused through his own fault.
A usufruct gives a right to enjoy the property of another with the obligation of
preserving its form and substance, unless the title constituting it or the law otherwise
provides. This controversy would not have arisen had MSBF respected the limit of the
beneficial use given to it. MSBFs encroachment of its benefactors property gave birth
to the confusion that attended this case. To put this matter entirely to rest, it is not
enough to remind the NHA to respect MSBFs choice of the location of its sevenhectare area. MSBF, for its part, must vacate the area that is not part of its usufruct.
MSBFs rights begin and end within the seven-hectare portion of its usufruct. Court
agrees with the trial court that MSBF has abused the privilege given it under
Proclamation No. 1670. The direct corollary of enforcing MSBFs rights within the
seven-hectare area is the negation of any of MSBFs acts beyond it.
The seven-hectare portion of MSBF is no longer easily determinable considering the

varied structures erected within and surrounding the area. Both parties advance
different reasons why their own surveys should be preferred. At this point, the
determination of the seven-hectare portion cannot be made to rely on a choice
between the NHAs and MSBFs survey. There is a need for a new survey, one
conducted jointly by the NHA and MSBF, to remove all doubts on the exact location of
the seven-hectare area and thus avoid future controversies.
Article 605 of the Civil Code states:
ART. 605. Usufruct cannot be constituted in favor of a town, corporation, or
association for more than fifty years. If it has been constituted, and before the
expiration of such period the town is abandoned, or the corporation or association is
dissolved, the usufruct shall be extinguished by reason thereof.
The law clearly limits any usufruct constituted in favor of a corporation or association
to 50 years. A usufruct is meant only as a lifetime grant. Unlike a natural person, a
corporation or associations lifetime may be extended indefinitely. The usufruct would
then be perpetual. This is especially invidious in cases where the usufruct given to a
corporation or association covers public land. Proclamation No. 1670 was issued 19
September 1977, or 28 years ago. Hence, under Article 605, the usufruct in favor of
MSBF has 22 years left.
Disposition: WHEREFORE, the Decision of the Court of Appeals dated 30 March
2001 and its Resolution dated 25 June 2001 in CA-G.R. CV No. 48382 are SET
ASIDE. This case is REMANDED to Branch 87 of the Regional Trial Court of Quezon
City, which shall order a joint survey by the National Housing Authority and Manila
Seedling Bank Foundation, Inc. to determine the metes and bounds of the sevenhectare portion of Manila Seedling Bank Foundation, Inc. under Proclamation No.
1670. The seven-hectare portion shall be contiguous and shall include as much as
possible all existing major improvements of Manila Seedling Bank Foundation, Inc.
The parties shall submit the joint survey to the Regional Trial Court for its approval
within sixty days from the date ordering the joint survey. SO ORDERED.
==========================================================
IV.J.6 Usufruct: Termination of Usufruct
86
Petitioner, the aunt of respondents, bought a parcel of land so that respondents (her
nieces) can relocate in Davao (there was an insurgence of NPA rebels at that time).
When petitioner went to the Philippines (she lived in the US), she lived with
respondents. However, she was maltreated by respondents.
The court ruled that the relationship between the parties was one of usufruct. The
usufruct should be deemed terminated because one of the implied conditions of the
usufruct is the maintenance of harmonious relations within the family. Respondents
cannot claim reimbursement of the value of the improvement (house) built on the lot
because the usufructuary has no such right.
Facts:
At the heart of this controversy is a parcel of land located in Davao City and
registered in the name of petitioner Mercedes Moralidad under Transfer
Certificate of Title (TCT) No. T-123125 of the Registry of Deeds of Davao City.
In her younger days, petitioner taught in Davao City, Quezon City and Manila.
While teaching in Manila, she had the good fortune of furthering her studies at
the University of Pennsylvania, U.S.A. While schooling, she was offered to teach
at the Philadelphia Catholic Archdiocese, which she did for seven (7)
years. Thereafter, she worked at the Mental Health Department of said University
for the next seventeen (17) years.
During those years, she would come home to the Philippines to spend her twomonth summer vacation in her hometown in Davao City. Being single, she would
usually stay in Mandug, Davao City, in the house of her niece, respondent Arlene
Pernes, a daughter of her younger sister, Rosario.
Back in the U.S.A. sometime in 1986, she received news from Arlene that
Mandug at the outskirts of Davao City was infested by NPA rebels and many
women and children were victims of crossfire between government troops and
the insurgents. Shocked and saddened about this development, she immediately
sent money to Araceli, Arlenes older sister, with instructions to look for a lot
in Davao City where Arlene and her family could transfer and settle down. This
was why she bought the parcel of land covered by TCT No. T-123125.
Petitioner acquired the lot property initially for the purpose of letting Arlene move
from Mandug to Davao City proper but later she wanted the property to be also
available to any of her kins wishing to live and settle in Davao City. Petitioner
made known this intention in a document she executed on July 21, 1986.15
58. Moralidad v. Pernes

Petitioner: Mercedes Moralidad
Respondent: Sps. Diosdado Pernes and Arlene Pernes
Ponente: Garcia
15 I, MERCEDES VIA MORALIDAD, of legal age, single, having been born on the 29 th day of
January, 1923, now actually residing at 8021 Lindbergh Boulevard, Philadelphia, Pennsylvania,
U.S.A., wishes to convey my honest intention regarding my properties situated at Palm Village
Subdivision, Bajada, Davao City, 9501, and hereby declare:1. That it is my desire that Mr. and
Mrs. Diosdado M. Pernes may build their house therein and stay as long as they like;
2. That anybody of my kins who wishes to stay on the aforementioned real property should
maintain an atmosphere of cooperation, live in harmony and must avoid bickering with one
another;
Following her retirement in 1993, petitioner came back to the Philippines to stay
with the respondents on the house they build on the subject property.
In the course of time, their relations turned sour because members of the Pernes
family were impervious to her suggestions and attempts to change certain
practices concerning matters of health and sanitation within their compound.
o For instance, Arlenes eldest son, Myco Pernes, then a fourth year
veterinary medicine student, would answer petitioner back with clenched
fist and at one time hurled profanities when she corrected him.
o Later, Arlene herself followed suit. Petitioner brought the matter to the
local barangay lupon where she lodged a complaint for slander,
harassment, threat and defamation against the Pernes Family. Deciding
for petitioner, the lupon apparently ordered the Pernes family to vacate
petitioners property but not after they are reimbursed for the value of the
house they built thereon. Unfortunately, the parties could not agree on
the amount, thus prolonging the impasse between them.
o Other ugly incidents interspersed with violent confrontations meanwhile
transpired, with the petitioner narrating that, at one occasion in July
1998, she sustained cuts and wounds when Arlene pulled her hair, hit
her on the face, neck and back, while her husband Diosdado held her,
twisting her arms in the process.
Petitioner filed with the MTCC of Davao City an unlawful detainer suit against the
respondent spouses.
o Petitioner alleged that she is the registered owner of the land on which
the respondents built their house; that through her counsel, she sent the
respondent spouses a letter demanding them to vacate the premises
and to pay rentals therefor, which the respondents refused to heed.
In their defense, the respondents alleged having entered the property in
question, building their house thereon and maintaining the same as their
residence with petitioners full knowledge and express consent. To prove their
point, they invited attention to her written declaration of July 21,
1986, supra, wherein she expressly signified her desire for the spouses to build
their house on her property and stay thereat for as long as they like.
Held/Ratio:
FIRST ISSUE (EXISTENCE OF USUFRUCT)
1.
Whether or not the rules on usufruct should apply. Yes.

Whether the usufruct should be deemed terminated
3. That anyone of my kins may enjoy the privilege to stay therein and may avail the use
thereof. Provided, however, that the same is not inimical to the purpose thereof;
4. That anyone of my kins who cannot conform with the wishes of the undersigned may
exercise the freedom to look for his own;
5. That any proceeds or income derived from the aforementioned properties shall be allotted to
my nearest kins who have less in life in greater percentage and lesser percentage to those who
are better of in standing.
The Court is inclined to agree with the CA that what was constituted between the
parties herein is one of usufruct16 over a piece of land, with the petitioner being
the owner of the property upon whom the naked title thereto remained and the
respondents being two (2) among other unnamed usufructuaries who were
simply referred to as petitioners kin. The Court, however, cannot go along with
the CAs holding that the action for unlawful detainer must be dismissed on
ground of prematurity.
Usufruct, in essence, is nothing else but simply allowing one to enjoy anothers
property. It is also defined as the right to enjoy the property of another
temporarily, including both the jus utendi and the jus fruendi, with the owner
retaining the jus disponendi or the power to alienate the same.
It is undisputed that petitioner, in a document dated July 21, 1986, made known
her intention to give respondents and her other kins the right to use and to enjoy
the fruits of her property. There can also be no quibbling about the respondents
being given the right to build their own house on the property and to stay
thereat as long as they like. Paragraph #5 of the same document
earmarks proceeds or income derived from the aforementioned properties for the
petitioners nearest kins who have less in life in greater percentage and lesser
percentage to those who are better of (sic) in standing.
The established facts undoubtedly gave respondents not only the right to use the
property but also granted them, among the petitioners other kins, the right to
enjoy the fruits thereof. We have no quarrel, therefore, with the CAs ruling that
usufruct was constituted between petitioner and respondents. It is thus pointless
to discuss why there was no lease contract between the parties.
SECOND ISSUE (TERMINATION OF USUFRUCT)
Issues:
1.
2.
87
Determinative of the outcome of the ejectment case is the resolution of the next
issue, i.e., whether the existing usufruct may be deemed to have been
extinguished or terminated.
o If the question is resolved in the affirmative, then the respondents right
to possession, proceeding as it did from their right of usufruct, likewise
ceased. In that case, petitioners action for ejectment in the unlawful
detainer case could proceed and should prosper.
16
Usufruct is defined under Article 562 of the Civil Code in the following wise:ART. 562.
Usufruct gives a right to enjoy the property of another with the obligation of preserving its form
and substance, unless the title constituting it or the law otherwise provides.
The term or period of the usufruct originally specified provides only one of the
bases for the right of a usufructuary to hold and retain possession of the thing
given in usufruct. There are other modes or instances whereby the usufruct shall
be considered terminated or extinguished. For sure, the Civil Code enumerates
such other modes of extinguishment:
o ART. 603. Usufruct is extinguished:
1. By the death of the usufructuary, unless a contrary
intention clearly appears;
2. By expiration of the period for which it was constituted,
or by the fulfillment of any resolutory condition
provided in the title creating the usufruct;
3. By merger of the usufruct and ownership in the same
person;
4. By renunciation of the usufructuary;
5. By the total loss of the thing in usufruct;
6. By the termination of the right of the person constituting
the usufruct;
7. By prescription.
The document executed by the petitioner dated July 21, 1986 constitutes the title
creating, and sets forth the conditions of, the usufruct. Paragraph #3 thereof
states [T]hat anyone of my kins may enjoy the privilege to stay therein and may
avail the use thereof. Provided, however, that the same is not inimical to the
purpose thereof .
o What may be inimical to the purpose constituting the usufruct may be
gleaned from the preceding paragraph wherein petitioner made it
abundantly clear that anybody of my kins who wishes to stay on the
aforementioned property should maintain an atmosphere of
cooperation, live in harmony and must avoid bickering with one
another.
o That the maintenance of a peaceful and harmonious relations
between and among kin constitutes an indispensable condition for
the continuance of the usufruct is clearly deduced from the
succeeding Paragraph #4 where petitioner stated [T]hat anyone of my
kins who cannot conform with the wishes of the undersigned may
exercise the freedom to look for his own.
In fine, the occurrence of any of the following: the loss of the atmosphere of
cooperation, the bickering or the cessation of harmonious relationship
between/among kin constitutes a resolutory condition which, by express wish
of the petitioner, extinguishes the usufruct.
As aptly pointed out by the petitioner in her Memorandum, respondents own
evidence before the MTCC indicated that the relations between the parties have
deteriorated to almost an irretrievable level. There is no doubt then that what
impelled petitioner to file complaints before the local barangay lupon, the Office
of the Ombudsman for Mindanao, and this instant complaint for unlawful detainer
before the MTCC is that she could not live peacefully and harmoniously with the
Pernes family and vice versa.
88
Thus, the Court rules that the continuing animosity between the petitioner and
the Pernes family and the violence and humiliation she was made to endure,
despite her advanced age and frail condition, are enough factual bases to
consider the usufruct as having been terminated.
To reiterate, the relationship between the petitioner and respondents respecting

the property in question is one of owner and usufructuary. Accordingly,
respondents claim for reimbursement of the improvements they introduced on
the property during the effectivity of the usufruct should be governed by
applicable statutory provisions and principles on usufruct. In this regard, we cite
with approval what Justice Edgardo Paras wrote on the matter:
If the builder is a usufructuary, his rights will be governed by Arts.
579 and 580. In case like this, the terms of the contract and the
pertinent provisions of law should govern.
By express provision of law, respondents, as usufructuary, do not have the right
to reimbursement for the improvements they may have introduced on the
property.17
Given the foregoing perspective, respondents will have to be ordered to vacate
the premises without any right of reimbursement. If the rule on reimbursement or
indemnity were otherwise, then the usufructuary might, as an author pointed out,
improve the owner out of his property. The respondents may, however, remove or
destroy the improvements they may have introduced thereon without damaging
the petitioners property.
o
Disposition: WHEREFORE, the petition is GRANTED. The assailed Decision and

Resolution of the CA are REVERSED and SET ASIDE. Accordingly, the decision of
the MTCC isREINSTATED with MODIFICATION that all of respondents counterclaims
are dismissed, including their claims for reimbursement of useful and necessary
expenses.
59. Rivera-Calingasan v. Rivera
Petitioners: EVANGELINE RIVERA-CALINGASAN and E. RICAL ENTERPRISES
Respondents: WILFREDO, substituted by MA. LYDIA (2nd wife of Wilfredo), FREIDA
LEAH and WILFREDO JR. all surnamed Rivera
17
Art. 579. The usufructuary may make on the property held in usufruct such useful
improvements or expenses for mere pleasure as he may deem proper, provided he does not
alter its form or substance;but he shall have no right to be indemnified therefor. He may,
however, remove such improvements, should it be possible to do so without damage to the
property. (Emphasis supplied.)
Art. 580. The usufructuary may set off the improvements he may have made on the property
against any damage to the same.
Facts:
Wilfredo and his wife, Loreto Inciong, acquired parcels of land in Lipa, Batangas.
Loreto died leaving Wilfredo and their daughters Evangeline and Brigida Liza as
heirs.
11 years later, Loretos heirs executed an extrajudicial settlement of her one-half
share of the conjugal estate, adjudicating all the properties in favor of Evangeline
and Brigida Liza; Wilfredo waived his rights with a reservation of his usufructuary
rights during his lifetime. The TCTs over two lots were cancelled and new ones
issued in the names of Evangeline and Brigida Liza, with an annotation of
Wilfredos usufructuary rights.
Almost a decade later, Wilfredo filed with the MTCC of Lipa a complaint for
forcible entry against the Evangeline and Star Honda. He claimed lawful
possession over the lots, one of which with a building that housed his furniture
business. Taking advantage of his absence due to his hospital confinement,
petitioners and Star Honda took possession and caused the renovation of the
building. He claims that with the aid of armed men, they barred him from entering
the property.
Petitioners and Star Honda claimed that Wilfredo voluntarily renounced his
usufructuary rights in a petition for cancellation of usufructuary rights and another
action for the annulment of the petition for cancellation of usufructuary rights filed
by Wilfredo is pending with the RTC of Lipa City.
MTCC dismissed Wilfredos complaint upon finding no evidence of Wilfredos
prior possession and subsequent dispossession of the property; that Wilfredo
admitted that both E. Rical Enterprises and Star Honda, Inc. occupied the
property through lease contracts from Evangeline and her husband. RTC
affirmed, but reversed on MR. It ordered the eviction of petitioners and Star
Honda, Inc. On MR of the petitioners, only Star Honda was absolved. CA
affirmed.
Petitioners: CA erred in equating possession with residence since possession in

forcible entry cases means physical possession without qualification as to the nature
of possession, i.e., whether residing or not in a particular place. The pronouncements
of the RTC that they have been "occupying the premises since 1997" and Wilfredos
own admission that he padlocked the doors of the building contradict Wilfredos claim
of prior possession.
Respondents: Petitioners mistakenly relied on the statements of the RTC since such
statements had been rendered in an interlocutory order, and should not prevail over
Evangelines admission in her answer of "Poblacion, Rosario, Batangas"21 as her
residence, compared to Wilfredos admission in his complaint of "C.M. Recto Avenue,
Lipa City, Batangas" as his residence, the exact address of the disputed property
The Issue: Who, between the petitioners and Wilfredo, had been in prior physical
possession of the property.
89
RULING: WILFREDO has prior possession hence the ejectment case is decided in
his favor however his death extinguishes his right to usufruct consequently, this
deprives his heirs of the usufructuary the right to retain or to reacquire possession of
the property even if the ejectment judgment directs its restitution. Therefore, only the
judgment of damages is affirmed. No restitution.
RATIO:
Ejectment cases involve only physical possession or possession de facto.
"Ejectment cases - forcible entry and unlawful detainer - are summary proceedings
designed to provide expeditious means to protect actual possession or the right to
possession of the property involved.
The only question is: who is entitled to the physical possession of the premises, that
is, to the possession de facto and not to the possession de jure. It does not even
matter if a party's title to the property is questionable." an ejectment case will not
necessarily be decided in favor of one who has presented proof of ownership of the
subject property.
Possession in ejectment cases "means nothing more than actual physical
possession, not legal possession in the sense contemplated in civil law." In a forcible
entry case, "prior physical possession is the primary consideration." "A party who can
prove prior possession can recover such possession even against the owner himself.
Whatever may be the character of his possession, if he has in his favor prior
possession in time, he has the security that entitles him to remain on the property
until a person with a better right lawfully ejects him." "The party in peaceable, quiet
possession shall not be thrown out by a strong hand, violence, or terror."
IN THIS CASE, respondents have proven prior physical possession of the property
and that the petitioners deprived him of such possession by means of force, strategy
and stealth. Residence was correctly equated with physical possession since
residence is a manifestation of possession and occupation. Wilfredo had consistently
alleged that he resided on the location of the property, whereas Evangeline has
always admitted that she has been a resident of "J. Belen Street, Rosario, Batangas."
The petitioners failed to prove that they have occupied the property through some
other person, even if they have declared their residence in another area. The affidavit
of Barangay Captain Briones attested to Wilfredos prior possession and the
petitioners unlawful entry to the property during Wilfredos hospital confinement.
In another proceeding, a criminal complaint for qualified trespass to dwelling, the Lipa
City Prosecutor observed that petitioners did not reside on or occupy the property
before Wilfredo filed the complaint for forcible entry. The petitioners also alleged
therein that they are residents of "J. Belen St., Rosario, Batangas" and not "No. 30
C.M. Recto Ave., Lipa City."30
Thus, the RTCs pronouncement on the petitioners occupation in the interlocutory

order is not res judicata on the issue of actual physical possession.
IMPLICATIONS OF WILFREDOS DEATH: The judgment on the ejectment case is
binding however the right to usufruct is rendered moot.
Wilfredos death did not render moot the forcible entry case. The judgment in an
ejectment case is conclusive between the parties and their successors-in-interest by
title subsequent to the commencement of the action; hence, it is enforceable by or
against the heirs of the deceased. They are entitled the winning party to: (a) the
restitution of the premises, (b) the sum justly due as arrears of rent or as reasonable
compensation for the use and occupation of the premises, and (c) attorneys fees and
costs.
However, the right to the usufruct is now rendered moot by the death of Wilfredo since
death extinguishes a usufruct under Article 603(1) of the Civil Code. This deprives the
heirs of the usufructuary the right to retain or to reacquire possession of the property
even if the ejectment judgment directs its restitution. Thus, what actually survives
under the circumstances is the award of damages, by way of compensation.
==========================================================
IV.K Easements
60. La Vista v. CA
PETITIONERS: LA VISTA ASSOCIATION, INC.
RESPONDENT: CA, ATENEO, LOYOLA GRAND VILLAS ET AL
PONENTE: BELLOSILLO
SHORT VERSION:
The Tuasons owned a parcel of land which includes the land in question. Said parcel
of land was sold to Philippine Building Corporation. Subsequently, the latter assigned
its rights to Ateneo. The Tuasons developed a part of the estate adjoining the portion
sold to Philippine Building Corporation into a residential village known as La Vista
Subdivision. Thus the boundary between LA VISTA and the portion sold to Philippine
Building Corporation was the 15-meter wide roadway known as the Mangyan Road.
ATENEO offered to sell the property to the public subject to the condition that the right
to use the 15-meter roadway will be transferred to the vendee who will negotiate with
the legally involved parties regarding the use of such right as well as the development
costs for improving the access road. Solid Homes became the highest bidder to the
sale. Solid Homes, Inc., developed a subdivision now known as Loyola Grand Villas
and together they now claim to have an easement of right-of-way along Mangyan
Road through which they could have access to Katipunan Avenue. La vista refused to
recognize such easement. Issue: Whether or not there is a legally demandable
easement of right-of-way along Mangyan Road in favor of Solid Homes, Inc. The SC
90
answered in the affirmative. The free ingress and egress along Mangyan Road
created by the voluntary agreement between Ateneo and Solid Homes, Inc., is legally
demandable. Like any other contractual stipulation, the same cannot be extinguished
except by voluntary rescission of the contract establishing the servitude or
renunciation by the owner of the dominant more so when the easement was implicitly
recognized by the letters of the La Vista President to Ateneo dated February 11 and
April 28, 1976.
FACTS:
MANGYAN ROAD is a 15-meter wide thoroughfare in Quezon City abutting Katipunan
Avenue on the west, traversing the edges of La Vista Subdivision on the north and of
the Ateneo and Miriam College on the south. Mangyan Road serves as the boundary
between LA VISTA on one side and ATENEO and MIRIAM on the other. It bends
towards the east and ends at the gate of Loyola Grand Villas Subdivision.
The land in question was formed part of lands owned by the Tuasons. It was sold to
Philippine Building Corporation by virtue of a deed of sale and mortgage dated 1 July
1949 wherein it was stipulated that: (3) of the deed provides that ". . . the boundary
line between the property herein sold and the adjoining property of the VENDORS
shall be a road fifteen (15) meters wide, one-half of which shall be taken from the
property herein sold to the VENDEE and the other half from the portion adjoining
belonging to the VENDORS."
Philippine Building Corporation acting in behalf of ATENEO in buying the properties
from the Tuasons, sold in a Deed of Assignment with Assumption of Mortgage, with
the consent of the Tuasons, the subject parcel of land to ATENEO which assumed the
mortgage. It was stipulated that:
The ASSIGNEE hereby agrees and assumes to pay the mortgage obligation
on the above-described land in favor of the MORTGAGOR and to perform
any and all terms and conditions as set forth in the Deed of Sale with
Mortgage dated July 1, 1949, hereinabove referred to, which said document
is incorporated herein and made an integral part of this contract by
reference.
The Tuasons developed a part of the estate adjoining the portion sold to Philippine
Building Corporation into a residential village known as La Vista Subdivision. Thus the
boundary between LA VISTA and the portion sold to Philippine Building Corporation
was the 15-meter wide roadway known as the Mangyan Road.
ATENEO sold to Miriam the western portion of the land adjacent to Mangyan Road.
Meanwhile, the Tuasons developed its 7.5-meter share of the 15-meter wide
boundary. ATENEO deferred improvement on its share and erected instead an adobe
91
wall on the entire length of the boundary of its property parallel to the 15-meter wide
roadway.
owner of the dominant more so when the easement was implicitly recognized by the
letters of the La Vista President to Ateneo dated February 11 and April 28, 1976.
ATENEO offered to sell the property to the public subject to the condition that the right
to use the 15-meter roadway will be transferred to the vendee who will negotiate with
the legally involved parties regarding the use of such right as well as the development
costs for improving the access road.
The free ingress and egress along Mangyan Road created by the voluntary
agreement between Ateneo and Solid Homes, Inc., is thus legally demandable
(Articles 619 and 625, New Civil Code) with the corresponding duty on the servient
estate not to obstruct the same so much so that
La Vista tried to bid but lost to Solid Homes who became the highest bidder to the
sale. Subsequently, Solid Homes, Inc., developed a subdivision now known as Loyola
Grand Villas and together they now claim to have an easement of right-of-way along
Mangyan Road through which they could have access to Katipunan Avenue.
When the owner of the servient tenement performs acts or constructs works
impairing the use of the servitude, the owner of the dominant tenement may
ask for the destruction of such works and the restoration of the things to their
condition before the impairment was committed, with indemnity for damages
suffered. An injunction may also be obtained in order to restrain the owner of
the servient tenement from obstructing or impairing in any manner the lawful
use of the servitude.
LA VISTAS CONTENTION: LA VISTA could not recognize the right-of-way over

Mangyan Road because, first, Philippine Building Corporation and its assignee
ATENEO never complied with their obligation of providing the Tuasons with a right-ofway on their 7.5-meter portion of the road and, second, since the property was
purchased for commercial purposes, Solid Homes, Inc., was no longer entitled to the
right-of-way as Mangyan Road was established exclusively for ATENEO in whose
favor the right-of-way was originally constituted.
ISSUE: Whether or not there is a legally demandable easement of right-of-way along
Mangyan Road in favor of Solid Homes, Inc. YES.
The argument of petitioner LA VISTA that there are other routes to LOYOLA from
Mangyan Road is likewise meritless, to say the least. The opening of an adequate
outlet to a highway can extinguish only legal or compulsory easements, not voluntary
easements like in the case at bar. The fact that an easement by grant may have also
qualified as an easement of necessity does not detract from its permanency as a
property right, which survives the termination of the necessity.
HELD:
61. Villanueva v. Velasco
From the facts of the instant case it is very apparent that the parties and their
respective predecessors-in-interest intended to establish an easement of right-of-way
over Mangyan Road for their mutual benefit, both as dominant and servient estates.
62. Liwag v. Happy Glen Loop
The Supreme Court gave credence to the finding of the Court of Appeals:
Petitioner: Emetria Liwag
A right-of-way was properly appreciated along the entire route of Mangyan Road.
Incidentally, the pretense that the court a quo erred in holding that Mangyan Road is
the boundary road between La Vista and Ateneo does not raise any critical eyebrow
since the same is wholly irrelevant to the existence of a servitude thereon from their
express admission to the contrary.
Respondent: Happy Glen Loop Homeowners Association
One's attention should rather be focused on the contractual stipulations in the deed of
sale between the Tuason Family and the Philippine Building Corporation) which were
incorporated in the deed of assignment with assumption of mortgage by the Philippine
Building Corporation in favor of Ateneo as well as in the deed of sale dated October
24, 1976 when the property was ultimately transferred by Ateneo to plaintiff-appellee.
Like any other contractual stipulation, the same cannot be extinguished except by
voluntary rescission of the contract establishing the servitude or renunciation by the
Ponente: J. Sereno
Short Facts:
F. G. R. Sales, the original developer of Happy Glen Loop, loaned from Ernesto
Marcelo, owner of T. P. Marcelo Realty Corporation. The former failed to settle its
debts with the latter, so, he assigned all his rights to Marcelo over several parcels of
land in the Subdivision including the receivables from the lots already sold. Marcelo
represented to lot buyers, the National Housing Authority (NHA) and the Human
Settlement Regulatory Commission (HSRC) that a water facility is available in the
subdivision. The said water facility has been the only source of water of the residents
for thirty (30) years. Marcelo sold Lot 11, Block 5 to Hermogenes LiwagPetitioner, wife
of Hermogenes, subsequently wrote to the respondent Association demanding the
removal of the overhead water tank over the parcel of land.
SC held that an easement for water facility exists on Lot 11, Block 5 of Happy Glen
Loop Subdivision. Easements or servitudes are encumbrances imposed upon an
immovable for the benefit of another immovable belonging to a different owner,
for the benefit of a community, or for the benefit of one or more persons to
whom the encumbered estate does not belong. In this case, the water facility is an
encumbrance on Lot 11, Block 5 of the Subdivision for the benefit of the community. It
is continuous and apparent, because it is used incessantly without human
intervention, and because it is continually kept in view by the overhead water tank,
which reveals its use to the public. The Civil Code provides that continuous and
apparent easements are acquired either by virtue of a title or by prescription of
10 years. It is therefore clear that an easement of water facility has already been
acquired through prescription.
92
HLURB ruled in favor of the Association. He invalidated the transfer of the

parcel of land in favor of Hermogenes. On appeal before the HLURB Board
of Commissioners, the Board found that Lot 11, Block 5 was not an open
space. Moreover, it ruled that Marcelo had complied with the requirements of
Presidential Decree No. (P.D.) 1216 with the donation of 9,047 square
meters of open space and road lots. It further stated that there was no proof
that Marcelo or the original subdivision owner or developer had at any time
represented that Lot 11, Block 5 was an open space. It therefore concluded
that the use of the lot as site of the water tank was merely tolerated.
Association interposed an appeal to the OP, which set aside the Decision of
the HLURB Board of Commissioners and affirmed that of the Housing and
Land Use Arbiter.
Petitioner Liwag unsuccessfully moved for reconsideration, then filed a

petition for review before the CA.The CA affirmed that the HLURB
possessed jurisdiction to invalidate the sale of the subject parcel of land to
Hermogenes and to invalidate the issuance of TCT No. C-350099 pursuant
thereto. The appellate court agreed with the OP that an easement for water
facility existed on the subject parcel of land and formed part of the open
space required to be reserved by the subdivision developer under P.D. 957.
However, it ruled that Arbiter Melchor should not have recommended the
filing of a criminal action against petitioner, as she was not involved in the
development of the Subdivision or the sale of its lots to buyers.
Facts:
Sometime in 1978, F.G.R. Sales, the original developer of Happy Glen Loop,
obtained a loan from Ernesto Marcelo (Marcelo), the owner of T.P. Marcelo
Realty Corporation. To settle its debt after failing to pay its obligation, F.G.R.
Sales assigned to Marcelo all its rights over several parcels of land in the
Subdivision, as well as receivables from the lots already sold. As the
successor-in-interest of the original developer, Marcelo represented to
subdivision lot buyers, the National Housing Authority (NHA) and the Human
Settlement Regulatory Commission (HSRC) that a water facility was
available in the Subdivision.
Issue/s:
1. W/N HLURB has exclusive jurisdiction over the case at bar. YES
For almost 30 years, the residents of the Subdivision relied on this facility as
their only source of water. This fact was acknowledged by Marcelo and
Hermogenes Liwag (Hermogenes), petitioners late husband who was then
the president of respondent Happy Glen Loop Homeowners Association
(Association). Marcelo sold Lot 11, Block No. 5 to Hermogenes. As a result,
Transfer Certificate of Title (TCT) No. C-350099 was issued to him. When
Hermogenes died in 2003, petitioner Emeteria P. Liwag subsequently wrote
a letter to respondent Association, demanding the removal of the overhead
water tank from the subject parcel of land.
Refusing to comply with petitioners demand, respondent Association filed
before the HLURB Arbiter an action for specific performance; confirmation,
maintenance and donation of water facilities; annulment of sale; and
cancellation of TCT No. 350099 against T.P. Marcelo Realty Corporation (the
owner and developer of the Subdivision), petitioner Emeteria, and the other
surviving heirs of Hermogenes.
2. W/N an easement for water facility exists on Lot 11, Block 5 of Happy
Glen Loop Subdivision. YES
3. W/N Lot 11, Block 5 of Happy Glen Loop Subdivision forms part of its
open space. YES
4. W/N the subject parcel of land is beyond the commerce of man and its
sale is prohibited under the law. NO
Ratio:
1. The jurisdiction of the HLURB is outlined in P.D. 1344, Empowering the National
Housing Authority to Issue Writ of Execution in the Enforcement of its Decision under
Presidential Decree No. 957.
Sec. 1. In the exercise of its functions to regulate real estate trade
and business and in addition to its powers provided for in
Presidential Decree No. 957, the National Housing Authority shall

have the exclusive jurisdiction to hear and decide cases of the
following nature.
A.
Unsound real estate business practices;
B.
Claims involving refund and any other claims filed by

subdivision lot or condominium unit buyer against the
project owner, developer, dealer, broker or salesman; and
C.
Cases involving specific performance of contractual and

statutory obligations filed by buyers of subdivision lots or
condominium units against the owner, developer, broker or
salesman.
The allegation states that the subdivision owner and developer fraudulently sold to
Hermogenes the lot where the water facility was located. Subdivisions are mandated
to maintain and provide adequate water facilities for their communities. Without a
provision for an alternative water source, the subdivision developers alleged sale of
the lot where the communitys sole water source was located constituted a violation of
this obligation. This is a case for an unsound real estate business practice of the
subdivision owner and developer which falls within the exclusive jurisdiction of the
HLURB.
2. Easements or servitudes are encumbrances imposed upon an immovable for the
benefit of another immovable belonging to a different owner, for the benefit of a
community, or for the benefit of one or more persons to whom the encumbered estate
does not belong.
The law provides that easements may be continuous or discontinuous and apparent
or non-apparent. The pertinent provisions of the Civil Code are quoted below:
Art. 615. Easements may be continuous or discontinuous, apparent
or non-apparent.
Continuous easements are those the use of which is or may be
incessant, without the intervention of any act of man.
Discontinuous easements are those which are used at intervals and
depend upon the acts of man.
Apparent easements are those which are made known and are
continually kept in view by external signs that reveal the use and
enjoyment of the same.
Non-apparent easements are those which show no external
indication of their existence.
93
In this case, the water facility is an encumbrance on Lot 11, Block 5 of the Subdivision
for the benefit of the community. It is continuous and apparent, because it is used
incessantly without human intervention, and because it is continually kept in view by
the overhead water tank, which reveals its use to the public.
Contrary to petitioners contention that the existence of the water tank on Lot 11, Block
5 is merely tolerated, we find that the easement of water facility has been voluntarily
established either by Marcelo, the Subdivision owner and developer; or by F.G.R.
Sales, his predecessor-in-interest and the original developer of the Subdivision. For
more than 30 years, the facility was continuously used as the residents sole source of
water. The Civil Code provides that continuous and apparent easements are acquired
either by virtue of a title or by prescription of 10 years. It is therefore clear that an
easement of water facility has already been acquired through prescription.
3. The term open space is defined in P.D. 1216 as an area reserved exclusively for
parks, playgrounds, recreational uses, schools, roads, places of worship, hospitals,
health centers, barangaycenters and other similar facilities and amenities.
The decree makes no specific mention of areas reserved for water facilities.
Therefore, we resort to statutory construction to determine whether these areas fall
under other similar facilities and amenities. The basic statutory construction principle
of ejusdem generis states that where a general word or phrase follows an
enumeration of particular and specific words of the same class, the general word or
phrase is to be construed to include or to be restricted to things akin to or resembling,
or of the same kind or class as, those specifically mentioned.
Applying this principle to the afore-quoted Section 1 of P.D. 1216, we find that the
enumeration refers to areas reserved for the common welfare of the community.
Thus, the phrase other similar facilities and amenities should be interpreted in like
manner. Here, the water facility was undoubtedly established for the benefit of the
community. Water is a basic need in human settlements, without which the
community would not survive. Therefore, based on the principle of ejusdem
generis and taking into consideration the intention of the law to create and maintain a
healthy environment in human settlements, the location of the water facility in the
Subdivision must form part of the area reserved for open space.
4. The law expressly provides that open spaces in subdivisions are reserved for
public use and are beyond the commerce of man. As such, these open spaces are
not susceptible of private ownership and appropriation. We therefore rule that the sale
of the subject parcel of land by the subdivision owner or developer to petitioners late
husband was contrary to law. Hence, there was no reversible error in the appellate
courts Decision upholding the HLURB Arbiters annulment of the Deed of Sale.
Disposition: WHEREFORE, premises considered, the instant Petition for Review
is DENIED, and the assailed Decision and Resolution of the Court of Appeals in CAGR SP No. 100454 are hereby AFFIRMED.
63. Pilar Dev't v. Dumadag

693 SCRA 96 , March 11, 2013
Petitioner: Pilar Development Corporation
Respondents: Ramon Dumadag, Emma Bacabac and 23 others
Summary:
A complaint for accion publiciana was filed by Pilar Development against respondents
alleging that the subject property is an open space intended for the subdivisions
recreational facilities. The trial court opined that the subject property is within the 3meter strip reserved for public easement because the area is leading towards the
Mahabang Ilog Creak. Pilar alleges that although the property is within the 3-meter
strip reserved for public easement, it remains to be the lawful possessor of the said
lot conformably with Articles 428 and 539 of the Code. The Court denied such claim.
Article 635 is specific in saying that [all] matters concerning easements
established for public or communal use shall be governed by the special laws
and regulations relating thereto, and, in the absence thereof, by the provisions of
this Title [Title VII on Easements or Servitudes]. Certainly, in the case of residential
subdivisions, the allocation of the 3meter strip along the banks of a stream, like the
Mahabang Ilog Creek in this case, is required and shall be considered as forming part
of the open space requirement pursuant to P.D. 1216. Said law is explicit: open
spaces are for public use and are, therefore, beyond the commerce of men and that
[the] areas reserved for parks, playgrounds and recreational use shall be nonalienable public lands, and nonbuildable. Pilars right of ownership and possession
has been limited by law with respect to the 3meter strip/zone along the banks of
Mahabang Ilog Creek.
Facts:
Pilar Development filed for accion publiciana with damages against respondents for
allegedly building their shanties without its knowledge and consent in a property
located in Pilar Village Subdivision and designated as an open space of the village
intended for recreational facilities and amenities for subdivision residents. In their
Answer, the respondents asserted that it is the local government, not the petitioner,
which has jurisdiction and authority over them.
The trial court dismissed the complaint finding that the land being occupied by the
respondents are situated on an area leading towards the Mahabang Ilog Creak, and
within the three-meter legal easement; thus, considered as public property and part of
public dominion under Article 502 of the NCC, which could not be owned by Pilar
Development. It further opined that respondents have a better right to possess the
occupied lot, since they are in an area reserved for public easement purposes and
that only the local government of Las Pias City could institute an action for recovery
of possession or ownership.
94
Petitioner Pilar argues that although the portion of the subject property occupied by
respondents is within the 3meter strip reserved for public easement, it still retains
ownership thereof since the strip does not form part of the public dominion. As the
owner of the subject parcel of land, it is entitled to its lawful possession, hence, the
proper party to file an action for recovery of possession against respondents
conformably with Articles 428 and 539 of the Code.
Issue:
WON petitioner Pilar has right of title and lawful possession over the subject the
property which is within the 3-meter strip reserved for public easement. NO.
Held:
An easement or servitude is a real right on anothers property, corporeal and
immovable, whereby the owner of the latter must refrain from doing or allowing
somebody else to do or something to be done on his or her property, for the benefit of
another person or tenement; it is jus in re aliena, inseparable from the estate to which
it actively or passively belongs, indivisible, perpetual, and a continuing property right,
unless extinguished by causes provided by law. The Code defines easement as an
encumbrance imposed upon an immovable for the benefit of another immovable
belonging to a different owner or for the benefit of a community, or of one or more
persons to whom the encumbered estate does not belong. There are two kinds of
easement according to source: by law or by will of the ownersthe former are called
legal and the latter voluntary easement. A legal easement or compulsory easement,
or an easement by necessity constituted by law has for its object either public use or
the interest of private persons.
While Article 630 of the Code provides for the general rule that [t]he owner of the
servient estate retains the ownership of the portion on which the easement is
established, and may use the same in such a manner as not to affect the exercise of
the easement, Article 635 thereof is specific in saying that [all] matters concerning
easements established for public or communal use shall be governed by the
special laws and regulations relating thereto, and, in the absence thereof, by the
provisions of this Title [Title VII on Easements or Servitudes].
Certainly, in the case of residential subdivisions, the allocation of the 3meter strip
along the banks of a stream, like the Mahabang Ilog Creek in this case, is required
and shall be considered as forming part of the open space requirement pursuant to
P.D. 1216 dated October 14, 1977. Said law is explicit: open spaces are for public
use and are, therefore, beyond the commerce of men and that [the] areas reserved
for parks, playgrounds and recreational use shall be nonalienable public lands, and
nonbuildable.
Petitioners right of ownership and possession has been limited by law with respect to
the 3meter strip/zone along the banks of Mahabang Ilog Creek. Despite this, the
Court cannot agree with the trial courts opinion, as to which the CA did not pass
upon, that respondents have a better right to possess the subject portion of the land
because they are occupying an area reserved for public easement purposes. Similar
to petitioner, respondents have no right or title over it precisely because it is public
land. Likewise, we repeatedly held that squatters have no possessory rights over the
land intruded upon. The length of time that they may have physically occupied the
land is immaterial; they are deemed to have entered the same in bad faith, such that
the nature of their possession is presumed to have retained the same character
throughout their occupancy.
As to the issue of who is the proper party entitled to institute a case with respect to
the 3meter strip/zone, the Court finds that both the Republic of the Philippines,
through the OSG and the local government of Las Pias City, may file an action
depending on the purpose sought to be achieved. The former shall be responsible in
case of action for reversion under C.A. 141, while the latter may also bring an action
to enforce the relevant provisions of Republic Act No. 7279 (otherwise known as the
Urban Development and Housing Act of 1992). Under R.A. 7279, which was enacted
to uplift the living conditions in the poorer sections of the communities in urban areas
and was envisioned to be the antidote to the pernicious problem of squatting in the
metropolis, all local government units (LGUs) are mandated to evict and demolish
persons or entities occupying danger areas such as esteros, railroad tracks, garbage
dumps, riverbanks, shorelines, waterways, and other public places such as sidewalks,
roads, parks, and playgrounds.
95
animus donandi. The language of the deed of quitclaim is clear that Helen merely
contemplated a waiver of her rights, title and interest over the lands in favor of David,
and not a donation. The element of animus donandi therefore was missing. Likewise,
the deeds of quitclaim executed by Helen may have been in the nature of a public
document but they lack the essential element of acceptance in the proper form
required by law to make the donation valid. When applied to a donation of an
immovable property, the law further requires that the donation be made in a public
document and that there should be an acceptance thereof made in the same deed of
donation or in a separate public document. In cases where the acceptance is made in
a separate instrument, it is mandated that the donor should be notified thereof in an
authentic form, to be noted in both instruments.
Facts:
David Rey Guzman, a natural-born American citizen, is the son of the

spouses Simeon Guzman, a naturalized American citizen, and Helen Meyers
Guzman, an American citizen. Simeon died leaving an estate of several
parcels of land to his sole heirs, David and Helen.
Helen and David executed a Deed of Extrajudicial Settlement of the Estate.

The document of was registered in the Office of the RD.
The parcels of land were accordingly registered in the name of Helen

Meyers Guzman and David Rey Guzman in undivided equal shares.
64. Republic v. Guzman
Petitioner: Republic of the Philippines

Respondent: David Rey Guzman, represented by his Attorney-In-Fact, Lolita G.
Abela, and the Register of Deeds of Bulacan, Meycauayan Branch
Ponente: Bellosillo J.
Helen executed a Quitclaim Deed transferring to David her undivided 1/2

interest on all the parcels of land subject matter of the Deed of Extrajudicial
Settlement.
Government petitioned for escheat. It contends that as a rule, only a Filipino

citizen can acquire private lands in the Philippines. The only instances when
a foreigner can acquire private lands in the Philippines are by hereditary
succession and if he was formerly a natural-born Filipino citizen who lost his
Philippine citizenship. Government therefore alleges that the acquisition of
the parcels of land by David does not fall under any of these exceptions.
It asserts that David being an American citizen could not validly acquire 1/2
interest in each of the subject parcels of land by way of the 2 deeds of
quitclaim as they are in reality donations inter vivos.
==========================================================
V.D.1 Donation: Essential Elements
Short Facts and Doctrine/s: David was a natural-born American citizen. His dad is a
naturalized American citizen. When his dad died, properties were left in favor of him
and his mother. Thereafter, a quitclaim was executed by the mother, conveying to him
all of her shares in the property. Govt petitioned for escheat. It contends that as a rule,
only a Filipino citizen can acquire private lands in the Philippines. It asserts that David
being an American citizen could not validly acquire 1/2 interest in each of the subject
parcels of land by way of the 2 deeds of quitclaim as they are in reality donations inter
vivos. (The only instances when a foreigner can acquire private lands in the
Philippines are by hereditary succession and if he was formerly a natural-born Filipino
citizen who lost his Philippine citizenship.) Held: Not all the elements of a donation of
an immovable property are present in the instant case. There are three (3) essential
elements of a donation: (a) the reduction of the patrimony of the donor; (b) the
increase in the patrimony of the donee; and, (c) the intent to do an act of liberality or
David maintains, on the other hand, that he acquired the property by right of
accretion and not by way of donation, with the deeds of quitclaim merely
declaring Helens intention to renounce her share in the property and not an
intention to donate. He further argues that, assuming there was indeed a
donation, it never took effect since there was no acceptance.
96
thereof be given to the donor, and the fact that due notice has been given
must be noted in both instruments. Then and only then is the donation
perfected."
Therefore, the provisions of the law not having been complied with, there
was no effective conveyance of the parcels of land by way of donation inter
vivos.
However, the inexistence of a donation does not make the repudiation of

Helen in favor David valid.
There is no valid repudiation of inheritance as Helen had already accepted

her share of the inheritance when she, together with David, executed a Deed
of Extrajudicial Settlement dividing and adjudicating between the 2 of them
all the property in Simeons estate. By virtue of such extrajudicial settlement
the parcels of land were registered in her and her sons name in undivided
equal share and for 11 years they possessed the lands in the concept of
owner.
Nevertheless, the nullity of the repudiation does not ipso facto operate to
convert the parcels of land into res nullius to be escheated in favor of the
Government. The repudiation having no effect, the land should revert to their
private owner, Helen, who, although being an American citizen, is qualified
by hereditary succession to own the property.
Issues: 1. Whether the quitclaim executed by Helen is tantamount to a donation in

favor of David.
Ruling: No.
Ratio:
Not all the elements of a donation of an immovable property are present in

the instant case. The language of the deed of quitclaim is clear that Helen
merely contemplated a waiver of her rights, title and interest over the lands
in favor of David, and not a donation. That a donation was far from Helen's
mind is further supported by her deposition which indicated that she was
aware that a donation of the parcels of land was not possible since
Philippine law does not allow such an arrangement. The element of animus
donandi therefore was missing.
There are three (3) essential elements of a donation: (a) the reduction of
the patrimony of the donor; (b) the increase in the patrimony of the
donee; and, (c) the intent to do an act of liberality or animus donandi.
When applied to a donation of an immovable property, the law further

requires that the donation be made in a public document and that there
should be an acceptance thereof made in the same deed of donation or
in a separate public document. In cases where the acceptance is made
in a separate instrument, it is mandated that the donor should be
notified thereof in an authentic form, to be noted in both instruments.
Likewise, the deeds of quitclaim executed by Helen may have been in the
nature of a public document but they lack the essential element of
acceptance in the proper form required by law to make the donation valid.
Moreover, it is mandated that if an acceptance is made in a separate
public writing the notice of the acceptance must be noted not only in
the document containing the acceptance but also in the deed of
donation. Commenting on Art. 633 of the Civil Code from whence Art.
749 came Manresa said: "If the acceptance does not appear in the same
document, it must be made in another. Solemn words are not necessary; it is
sufficient if it shows the intention to accept it is necessary that formal notice
Disposition: WHEREFORE, the assailed Decision of the Court of Appeals which

sustained the Decision of the Regional Trial Court of Malolos, Bulacan, dismissing the
petition for escheat is AFFIRMED. No costs.
SO ORDERED.
==========================================================
V.D.2 Donation: Kinds
65. Calanasan v. Dolorito
Recitation Ready Digest. Petitioner-aunt donated a mortgaged parcel of land to
respondent-niece. The donation was made on the condition that the niece must
redeem the land for P 15K and her aunt should be granted usufructuary rights until
her death. Later, the donor filed an action for revocation as the donee allegedly
committed acts of ingratitude. However the RTC found that it was the donees
husband who maltreated the donors sister. Hence, the RTC held that this does not
97
come within the purview of Art. 765 as acts of ingratitude towards the donors sister is
not a ground for revocation. CA affirmed on a different ground that the donation was
onerous because the donee had to redeem the property. At issue in this case was the
nature of the donation and whether it may be revoked. The Court applied Art. 733
and held that to the extent of the price paid for the redemption of the donated
property, the donation was onerous and hence the provisions on contracts
govern. As regards the portion that exceeds the value of the onerous
consideration, it should be governed by the provisions on donations. However,
Art. 765 still does not apply. Because the act of ingratitude was not committed by the
donee to the donor or to the donors spouse or children.
Art. 765 The donation may also be revoked at the instance of the donor,
by reason of ingratitude in the following cases:
(1) If the donee should commit some offense against the person,
the honor or the property of the donor, or of his wife or children
under his parental authority;
CA affirmed the RTC ruling on a different ground. CA found that the donation was
onerous. Therefore, the deed of donation must be treated as an ordinary contract
and Article 765 of the New Civil Code finds no relevance.
Facts:
Petitioner (Cerila) was the aunt of the respondent (Edelyn joke lang Evelyn
yun. Hi Chelle!).
Said aunt took care of her orphan niece since childhood.
At the time the respondent-niece was already married, her aunt donated a
mortgaged parcel of land to her.
The donation was made on the condition that the niece must redeem the land for
P 15K and her aunt was entitled to possess and enjoy the property as long as
she lived.
Respondent-niece accepted the donation and thereafter complied with the

conditions; she redeemed the land and granted usufructuary rights to her aunt.
20 years after, petitioner-aunt filed an action for revocation of the donation on the
ground that her niece committed acts of ingratitude against her.
During the pendency of the action, the aunt died and was substituted by her
sister.
Subsequently, RTC dismissed the case on the ground that the ungrateful acts (illtreatment) were committed by respondents husband against the petitioners
sister and not by the donee-niece to donor-aunt. Hence, Art. 765 cannot be
applied.
Issue: What kind of donation is this?
Doctrine: Classification of donations:

1.
Pure or Simple donation is based on pure gratuity.
2.
Remuneratory or Compensatory has for its purpose the rewarding of the donee
for past services, which services do not amount to a demandable debt.
3.
Conditional/modal donation is a consideration for future services; it also occurs

where the donor imposes certain conditions, limitations or charges upon the
donee, whose value is inferior to the donation given.
4.
Onerous donation imposes upon the donee a reciprocal obligation; this is made
for a valuable consideration whose cost is equal to or more than the thing
donated.
Article 733. Donations with an onerous cause shall be governed by the rules on
contracts, and remuneratory donations by the provisions of the present Title as
regards that portion which exceeds the value of the burden imposed.
Held: The Court held that since the donation imposed on the donee was the burden
of redeeming the property, the donation was onerous. As an endowment for a
valuable consideration, it partakes of the nature of an ordinary contract; hence, the
rules of contract will govern Thus Article 765 on grounds for revocation finds no
application with respect to the onerous portion of the donation.
Insofar as the value of the land exceeds the redemption price paid for by the donee, a
donation exists, and the legal provisions on donation apply.
However, Art. 765 is still inapplicable because it was established that the ungrateful
acts were committed not by the done but by her husband, and were perpetrated not
against the donor but against the donors sister who received the alleged ill
treatments.
66. Del Rosario v. Ferrer

G.R. No. 187056 | September 20, 2010
98
was a donation inter vivos, not a donation mortis causa, as the express
"irrevocability" of the donation is the "distinctive standard that identifies the
document as a donation inter vivos." Although Leopoldo and Guadalupe reserved
the "right, ownership, possession, and administration of the property" and made the
donation operative upon their death, such reservation in the context of an irrevocable
donation simply means that the donors parted with their naked title, maintaining
only beneficial ownership of the donated property while they lived. The Court also
held that in case of doubt, the conveyance should be deemed a donation inter
vivos rather than mortis causa, in order to avoid uncertainty as to the
ownership of the property subject of the deed. Given that the donation in this case
was irrevocable or one given inter vivos, Leopoldos subsequent assignment of his
rights and interests in the property to Asuncion should be regarded as void.
FACTS:
In 1968, spouses Leopoldo and Guadalupe Gonzales executed a document entitled
Donation Mortis Causa in favor of their 2 children, Asuncion and Emiliano, and
granddaughter Jarabini (daughter of predeceased son, Zoilo) covering a house and
lot in Manila in equal shares. The deed stated that such shall be irrevocable, that
Jarabini and Emiliano will continue to occupy the portions currently occupied by them
and that the donation shall not affect any other distribution of other properties
belonging to either Leopoldo and Guadalupe. The deed shall be operative and
effective upon the death of the donors. The deed had no attestation clause and was
witnessed by only 2 persons. The donees, however, signified their acceptance of the
donation on the face of the document.
Petitioner: JARABINI G. DEL ROSARIO

Respondents: ASUNCION G. FERRER, substituted by her heirs, VICENTE, PILAR,
ANGELITO, FELIXBERTO, JR., all surnamed G. FERRER, and MIGUELA FERRER
ALTEZA
Short Facts/Doctrine: Spouses Leopoldo and Guadalupe Gonzales executed a

document entitled Donation Mortis Causa in favor of their children Emiliano and
petitioner Asuncion and granddaughter, petitioner Jarabini, with the stipulation that
such donation shall be irrevocable, among others. The donees accepted the donation,
as reflected on the face of the document. When the Guadalupe died, Leopoldo
assigned to Asuncion his rights over the property. The SC ruled that the document
Guadalupe died in 1968. Before his death in 1972, Leopoldo executed a deed of
assignment of his rights and interests in the subject property to their daughter
Asuncion. In 1998, Jarabini filed a petition for the probate of the deed of donation
mortis causa, which was opposed by Asuncion, invoking the assignment made by
Leopoldo in her favor.
ISSUE:
Whether the deed was a donation mortis causa or inter vivos
HELD:
DONATION INTER VIVOS. That the document was captioned donation mortis
causa is not controlling. "Irrevocability" is a quality absolutely incompatible with the
idea of conveyances mortis causa, where "revocability" is precisely the essence of the
act. A donation mortis causa has the following characteristics:
1.
It conveys no title or ownership to the transferee before the death of the

transferor; or, what amounts to the same thing, that the transferor should
retain the ownership (full or naked) and control of the property while alive;
2.
That before his death, the transfer should be revocable by the transferor at
will, ad nutum; but revocability may be provided for indirectly by means of a
reserved power in the donor to dispose of the properties conveyed; and
3.
That the transfer should be void if the transferor should survive the
transferee.
The Court stated in Austria-Magat v. CA, that the express "irrevocability" of the
donation is the "distinctive standard that identifies the document as a
donation inter vivos." In this case, the donors plainly said that it is "our will that this
Donation Mortis Causa shall be irrevocable and shall be respected by the surviving
spouse." The intent to make the donation irrevocable becomes even clearer by the
proviso that a surviving donor shall respect the irrevocability of the donation.
Consequently, the donation was in reality a donation inter vivos.
The donors in this case of course reserved the "right, ownership, possession,
and administration of the property" and made the donation operative upon their
death. But this Court has consistently held that such reservation (reddendum)
in the context of an irrevocable donation simply means that the donors parted
with their naked title, maintaining only beneficial ownership of the donated
property while they lived.
99
donation is inter vivos, since acceptance is a requirement only for such kind of
donations. Donations mortis causa, being in the form of a will, need not be accepted
by the donee during the donors lifetime. Also, the Court held in Puig v. Peaflorida,
that in case of doubt, the conveyance should be deemed a donation inter
ownership of the property subject of the deed.
Since the donation in this case was one made inter vivos, it was immediately
operative and final. The reason is that such kind of donation is deemed perfected
from the moment the donor learned of the donees acceptance of the donation. The
acceptance makes the donee the absolute owner of the property donated.
Given that the donation in this case was irrevocable or one given inter vivos,
Leopoldos subsequent assignment of his rights and interests in the property to
Asuncion should be regarded as void for, by then, he had no more rights to assign.
He could not give what he no longer had. Nemo dat quod non habet.
==========================================================
V.D.3 Donation: Conditional Donations
67. Roman Catholic v. CA
G.R. No. 77425 | June 19, 1991
PETITIONER: THE ROMAN CATHOLIC ARCHBISHOP OF MANILA, THE ROMAN
CATHOLIC BISHOP OF IMUS, and the SPOUSES FLORENCIO IGNAO and
SOLEDAD C. IGNAO
RESPONDENT: HON. COURT OF APPEALS, THE ESTATE OF DECEASED
SPOUSES EUSEBIO DE CASTRO and MARTINA RIETA, represented by MARINA
RIETA GRANADOS and THERESA RIETA TOLENTINO
SHORT FACTS AND HELD: The spouses donated property to the archbishop with
the condition that no disposition shall be made within 100 years. There is no need for
prescription to be applied in cases where there is stipulation for automatic reversion.
Nonetheless, the stipulation is against public policy and thus, is void.
FACTS:
Notably, the three donees signed their acceptance of the donation, which acceptance
the deed required. This Court has held that an acceptance clause indicates that the
On November 29, 1984, private respondents as plaintiffs, filed a complaint

for nullification of deed of donation, rescission of contract and reconveyance
of real property with damages against petitioners Florencio and Soledad C.
Ignao and the Roman Catholic Bishop of Imus, Cavite, together with the
Roman Catholic Archbishop of Manila, before the RTC of Imus, Cavite.
In their complaint, private respondents alleged that on August 23, 1930, the
spouses Eusebio de Castro and Martina Rieta, now both deceased,
executed a deed of donation in favor of therein defendant Roman Catholic
Archbishop of Manila covering a parcel of land located at Kawit, Cavite,
containing an area of 964 square meters, more or less. The deed of donation
allegedly provides that the donee shall not dispose or sell the property within
a period of one hundred (100) years from the execution of the deed of
donation, otherwise a violation of such condition would render ipso facto null
and void the deed of donation and the property would revert to the estate of
the donors.
It is further alleged that on or about June 30, 1980, and while still within the
prohibitive period to dispose of the property, petitioner Roman Catholic
Bishop of Imus, in whose administration all properties within the province of
Cavite owned by the Archdiocese of Manila was allegedly transferred on
April 26, 1962, executed a deed of absolute sale of the property subject of
the donation in favor of petitioners Florencio and Soledad C. Ignao in
consideration of the sum of P114,000. 00. As a consequence of the sale,
Transfer Certificate of Title was issued by the Register of Deeds of Cavite on
November 15, 1980 in the name of said petitioner spouses.
RTC dismissed the complaint on the ground that the cause of action has
prescribed. CA set aside the order of the RTC holding that the action has not
yet prescribed
ISSUES:
(1) Whether the cause of action has already prescribed
(2) Whether the complaint for nullification of deed of donation, rescission of contract
and reconveyance of real property with damages should be dismissed
HELD:
(1) Although it is true that under Article 764 of the Civil Code an action for the
revocation of a donation must be brought within four (4) years from the noncompliance of the conditions of the donation, the same is not applicable in the case at
bar. The deed of donation involved herein expressly provides for automatic reversion
of the property donated in case of violation of the condition therein, hence a judicial
declaration revoking the same is not necessary. By the very express provision in the
deed of donation itself that the violation of the condition thereof would render ipso
facto null and void the deed of donation, there would be no legal necessity anymore
100
to have the donation judicially declared null and void for the reason that the very deed
of donation itself declares it so. For where it otherwise and that the donors and the
donee contemplated a court action during the execution of the deed of donation to
have the donation judicially rescinded or declared null and void should the condition
be violated, then the phrase reading "would render ipso facto null and void" would not
appear in the deed of donation.
The validity of such a stipulation in the deed of donation providing for the automatic
reversion of the donated property to the donor upon non-compliance of the condition
was upheld in the recent case of De Luna, et al. vs. Abrigo, et al. It was held therein
that said stipulation is in the nature of an agreement granting a party the right to
rescind a contract unilaterally in case of breach, without need of going to court, and
that, upon the happening of the resolutory condition or non-compliance with the
conditions of the contract, the donation is automatically revoked without need of a
judicial declaration to that effect. While what was the subject of that case was an
onerous donation which, under Article 733 of the Civil Code is governed by the rules
on contracts, since the donation in the case at bar is also subject to the same rules
because of its provision on automatic revocation upon the violation of a resolutory
condition, from parity of reasons said pronouncements in De Luna pertinently apply.
The rationale for the foregoing is that in contracts providing for automatic revocation,
judicial intervention is necessary not for purposes of obtaining a judicial declaration
rescinding a contract already deemed rescinded by virtue of an agreement providing
for rescission even without judicial intervention, but in order to determine whether or
not the rescission was proper.
When a deed of donation, as in this case, expressly provides for automatic revocation
and reversion of the property donated, the rules on contract and the general rules on
prescription should apply, and not Article 764 of the Civil Code. Since Article 1306 of
said Code authorizes the parties to a contract to establish such stipulations, clauses,
terms and conditions not contrary to law, morals, good customs, public order or public
policy, we are of the opinion that, at the very least, that stipulation of the parties
providing for automatic revocation of the deed of donation, without prior judicial action
for that purpose, is valid subject to the determination of the propriety of the rescission
sought. Where such propriety is sustained, the decision of the court will be merely
declaratory of the revocation, but it is not in itself the revocatory act.
On the foregoing ratiocinations, the Court of Appeals committed no error in holding
that the cause of action of herein private respondents has not yet prescribed since an
action to enforce a written contract prescribes in ten (10) years. It is our view that
Article 764 was intended to provide a judicial remedy in case of non-fulfillment or
contravention of conditions specified in the deed of donation if and when the parties
have not agreed on the automatic revocation of such donation upon the occurrence of
the contingency contemplated therein. That is not the situation in the case at bar.
(2) Nonetheless, we find that although the action filed by private respondents may not
be dismissed by reason of prescription, the same should be dismissed on the ground
that private respondents have no cause of action against petitioners.
The cause of action of private respondents is based on the alleged breach by
petitioners of the resolutory condition in the deed of donation that the property
donated should not be sold within a period of one hundred (100) years from the date
of execution of the deed of donation. Said condition, in our opinion, constitutes an
undue restriction on the rights arising from ownership of petitioners and is, therefore,
contrary to public policy.
Donation, as a mode of acquiring ownership, results in an effective transfer of title
over the property from the donor to the donee. Once a donation is accepted, the
donee becomes the absolute owner of the property donated. Although the donor may
impose certain conditions in the deed of donation, the same must not be contrary to
law, morals, good customs, public order and public policy. The condition imposed in
the deed of donation in the case before us constitutes a patently unreasonable and
undue restriction on the right of the donee to dispose of the property donated, which
right is an indispensable attribute of ownership. Such a prohibition against alienation,
in order to be valid, must not be perpetual or for an unreasonable period of time.
Certain provisions of the Civil Code illustrative of the aforesaid policy may be
considered applicable by analogy. Under the third paragraph of Article 494, a donor or
testator may prohibit partition for a period which shall not exceed twenty (20) years.
Article 870, on its part, declares that the dispositions of the testator declaring all or
part of the estate inalienable for more than twenty (20) years are void.
It is significant that the provisions therein regarding a testator also necessarily
involve, in the main, the devolution of property by gratuitous title hence, as is
generally the case of donations, being an act of liberality, the imposition of an
unreasonable period of prohibition to alienate the property should be deemed
anathema to the basic and actual intent of either the donor or testator. For that
reason, the regulatory arm of the law is or must be interposed to prevent an
unreasonable departure from the normative policy expressed in the aforesaid Articles
494 and 870 of the Code.
101
In the case at bar, we hold that the prohibition in the deed of donation against the
alienation of the property for an entire century, being an unreasonable emasculation
and denial of an integral attribute of ownership, should be declared as an illegal or
impossible condition within the contemplation of Article 727 of the Civil Code.
Consequently, as specifically stated in said statutory provision, such condition shall be
considered as not imposed. No reliance may accordingly be placed on said
prohibitory paragraph in the deed of donation. The net result is that, absent said
proscription, the deed of sale supposedly constitutive of the cause of action for the
nullification of the deed of donation is not in truth violative of the latter hence, for lack
of cause of action, the case for private respondents must fail.
==========================================================
V.D.4 Donation: Inter Vivos/Mortis Causa Donations
68. Aluad v. Aluad
G.R. No. 176943 | October 17, 2008
SUMMARY:
Matilde executed a deed on donation inter vivos in favor of her daughter Maria, which
stated that it is to become effective upon her death, but in the event that Maria should
die before her, the donation shall be deemed rescinded. Subsequently, Matilde died
and on the same year, Maria died. Petitioner, the heirs of Maria, filed a complaint for
declaration and recovery of ownership and possession of Lots 1 and 3 which Zenaido
claimed to have been adjudicated to him under Matildens Last Will and Testament
and under a DOAS. The SC ruled in favor of Zenaido stating that the Deed of
Donation Mortis Causa not Inter Vivos, it having the following characteristics: (1) It
conveys no title or ownership to the transferee before the death of the transferor; or
what amounts to the same thing, that the transferor should retain the ownership (full
or naked) and control of the property while alive; (2) That before the death of the
transferor, the transfer should be revocable by the transferor at will, ad nutum; but
revocability may be provided for indirectly by means of a reserved power in the donor
to dispose of the properties conveyed; and (3) That the transfer should be void if the
transferor should survive the transferee. Being mortis causa, it should have followed
the formalities of a will, which it did not. It is thus, void and transmitted no right to
Maria. The subsequent disposal of Lots 1 and 3 to Zenaido were thus, valid.
FACTS:
102
Petitioners mother, Maria Aluad, and respondent Zenaido Aluad were raised by the
childless spouses Matilde Aluad and Crispin Aluad. After Crispin died, his wife Matilde
adjudicated 6 lots owned by Crispin to herself.
1. It is a donation mortis causa, it having the following characteristics:
On November 14, 1981, Matilde executed a "Deed of Donation of Real Property Inter
Vivos" in favor of petitioners mother Maria covering the 6 lots, which provided the
donation is to become effective upon the death of the DONOR, but in the event
that the DONEE should die before the DONOR, the present donation shall be
deemed rescinded and [of] no further force and effect; Provided, however,
that anytime during the lifetime of the DONOR or anyone of them who should survive,
they could use[,] encumber or even dispose of any or even all of the parcels of
landherein donated.
(2) That before the death of the transferor, the transfer should be revocable by the
transferor at will, ad nutum; but revocability may be provided for indirectly by means
of a reserved power in the donor to dispose of the properties conveyed; and
In 1986, OCTs were issued in Matildes name. In 1991, Matilde sold Lot 3 to Zenaido
by a Deed of Absolute Sale of Real Property. In 1992, Matilde executed a last will and
testament, devising Lots 2, 4, 5, and 6 to Maria, and her "remaining properties"
including Lot 1 to Zenaido.
Matilde and Maria died in 1994. In 1995, Marias heirsherein petitioners filed before
the RTC of Roxas City a Complaint for declaration and recovery of ownership and
possession of Lots 1 and 3, and damages against Zenaido, alleging that they
possessed the lots until January 1991 when Zenaido entered and possessed the 2
lots claiming as the adopted son of Crispin Aluad who refused to give back
possession until Matilde died in [1994] and then retained the possession thereof up to
and until the present time, thus, depriving the petitioners of their enjoyment. That after
the death of Matilde, they succeeded by inheritance by right of representation from
their deceased mother, Maria who is the sole and only daughter of Matilde. In his
answer, Zenaido alleged that Lot 1 was adjudicated to him in Matildes Last Will and
Testament while Lot 3 was purchased from Matilde. The RTC held that Matilde could
not have transmitted any right over Lots 1 and 3 to Zenaido, she having previously
alienated them to Maria via the Deed of Donation.
(1) It conveys no title or ownership to the transferee before the death of the
transferor; or what amounts to the same thing, that the transferor should retain the
ownership (full or naked) and control of the property while alive;
(3) That the transfer should be void if the transferor should survive the transferee.
The phrase "to become effective upon the death of the DONOR" admits of no other
interpretation than to mean that Matilde did not intend to transfer the ownership of the
six lots to Maria during Matildes lifetime.
The statement in the Deed of Donation reading "anytime during the lifetime of the
DONOR or anyone of them who should survive, they could use, encumber or even
dispose of any or even all the parcels of land herein donated" means that Matilde
retained ownership of the lots and reserved in her the right to dispose them. For the
right to dispose of a thing without other limitations than those established by law is an
attribute of ownership. The phrase in the Deed of Donation "or anyone of them who
should survive" is of course out of sync. For the Deed of Donation clearly stated that it
would take effect upon the death of the donor, hence, said phrase could only have
referred to the donor Matilde.
Further, that the donation is mortis causa is fortified by Matildes acts of possession
as she continued to pay the taxes for the said properties which remained under her
name; appropriated the produce; and applied for free patents for which OCTs were
issued under her name."
ISSUE:
1. Whether the deed of donation inter vivos in favor of petitioners mother is in fact a
donation mortis causa
2. Whether Zenaido is the rightful owner of lot 3 on the basis of a deed of sale
executed by the donor who had no more right to sell the same
HELD:
The donation being then mortis causa, the formalities of a will should have
been observed but they were not, as it was witnessed by only two, not three or
more witnesses following Article 805 of the Civil Code. Further, the witnesses did
not even sign the attestation clause the execution of which clause is a
requirement separate from the subscription of the will and the affixing of
signatures on the left-hand margins of the pages of the will. So the Court has
emphasized: Article 805 particularly segregates the requirement that the instrumental
witnesses sign each page of the will from the requisite that the will be "attested and
subscribed by [the instrumental witnesses]. The respective intents behind these two
classes of signature[s] are distinct from each other. The signatures on the left-hand
corner of every page signify, among others, that the witnesses are aware that
the page they are signing forms part of the will. On the other hand, the
signatures to the attestation clause establish that the witnesses are referring to
the statements contained in the attestation clause itself. Indeed, the attestation
clause is separate and apart from the disposition of the will. An unsigned attestation
clause results in an unattested will. Even if the instrumental witnesses signed the
left-hand margin of the page containing the unsigned attestation clause, such
signatures cannot demonstrate these witnesses undertakings in the clause, since the
signatures that do appear on the page were directed towards a wholly different
avowal. It is the witnesses, and not the testator, who are required under Article
805 to state the number of pages used upon which the will is written; the fact
that the testator had signed the will and every page thereof; and that they
witnessed and signed the will and all the pages thereof in the presence of the testator
and of one another. The only proof in the will that the witnesses have stated these
elemental facts would be their signatures on the attestation clause. Furthermore, the
witnesses did not acknowledge the will before the notary public, which is not in
accordance with the requirement of Article 806 of the Civil Code that every will must
be acknowledged before a notary public by the testator and the witnesses. The
requirement that all the pages of the will must be numbered correlatively in letters
placed on the upper part of each page was not also followed.
2. Yes. Not having followed the formalities of a will, the deed of donation is void
and transmitted no right to Maria. But even assuming arguendo that the
formalities were observed, since it was not probated, no right to Lot 1 and 3
was transmitted to Maria. Matilde thus validly disposed of Lot 1 to Zenaido by her
last will and testament, subject of course to the qualification that her (Matildes) will
must be probated. With respect to Lot 3, the same had been validly sold to Zenaido.
Petitioners argument that they acquired the lot by prescription is also untenable. They
failed to raise the issue of acquisitive prescription before the lower courts, however,
they having laid their claim on the basis of inheritance from their mother. As a general
rule, points of law, theories, and issues not brought to the attention of the trial court
cannot be raised for the first time on appeal. For a contrary rule would be unfair to the
adverse party who would have no opportunity to present further evidence material to
the new theory, which it could have done had it been aware of it at the time of the
hearing before the trial court.
69. Villanueva v. Sps. Branoco
Title: Villanueva v. Sps. Branoco
103
Petitioner: Gonzalo Villanueva (represented by his heirs)

Respondent: Spouses Froilan And Leonila Branoco
Ponente: J. Carpio
Recit Ready:
Gonzalo Villanueva, represented by his heirs, sued Spouses Branoco to

recover a parcel of land. The former claimed ownership over the property
thru purchase from Vere, who in turn, bought the property from Rodrigo.
Gonzalo declared the property in his name for tax purposes soon after
acquiring it. In their answer, the Spouses Baranoco similarly claimed
ownership over the property thru purchase from Rodriguez, who in turn,
acquired the property from Rodrigo by way of donation. The Spouses
entered the property and paid taxes afterwards.
The trial court ruled in favor of Gonzalo and declared him owner of the
property, and ordered the Spouses Branoco to surrender possession to
Gonzalo. The trial court rejected Spouses Branocos claim of ownership
after treating the Deed as a donation mortis causa which Rodrigo effectively
cancelled by selling the Property to Vere. Thus, by the time Rodriguez sold
the property to the Spouses, she had no title to transfer. On appeal, the CA
granted the Spouses appeal and set aside the trial court's ruling. it held that
the deed of donation is one of inter vivos. In his petition, Gonzalo seeks the
reinstatement of the trial court's ruling. Alternatively, petitioner claims
ownership over the Property through acquisitive prescription, having
allegedly occupied it for more than 10 years.
SC affirmed the CA in treating the deed of donation one of intervivos. This is

because from the wording of the deed, it is immediately apparent that
Rodrigo passed naked title to Rodriguez under a perfected donation inter
vivos.
Facts:
Petitioner Gonzalo Villanueva (petitioner), here represented by his heirs, sued
respondents, spouses Froilan and Leonila Branoco (respondents), in the Regional
Trial Court of Naval, Biliran (trial court) to recover a 3,492 square-meter parcel of land
in Amambajag, Culaba, Leyte (Property) and collect damages. Petitioner claimed
ownership over the Property through purchase in July 1971 from Casimiro Vere
(Vere), who, in turn, bought the Property from Alvegia Rodrigo (Rodrigo) in August
1970. Petitioner declared the Property in his name for tax purposes soon after
acquiring it.
In their Answer, respondents similarly claimed ownership over the Property through
purchase in July 1983 from Eufracia Rodriguez (Rodriguez) to whom Rodrigo
donated the Property in May 1965. The two-page deed of donation (Deed), signed at
the bottom by the parties and two witnesses, reads in full:
KNOW ALL MEN BY THESE PRESENTS:
That I, ALVEGIA RODRIGO, Filipino, of legal age, widow of the late Juan Arcillas, a resident of Barrio Bool,
municipality of Culaba, subprovince of Biliran, Leyte del Norte, Philippines, hereby depose and say:
104
(1) Convey no title or ownership to the transferee before the death of the
transferor; or, what amounts to the same thing, that the transferor should
retain the ownership (full or naked) and control of the property while alive;
(2) That before the [donors] death, the transfer should be revocable by the
transferor at will, ad nutum; but revocability may be provided for indirectly by
means of a reserved power in the donor to dispose of the properties
conveyed;
(3) That the transfer should be void if the transferor should survive the
transferee.10
Further
[4] [T]he specification in a deed of the causes whereby the act may be
revoked by the donor indicates that the donation is inter vivos, rather than a
disposition mortis causa[;]
[5] That the designation of the donation as mortis causa, or a provision in the
deed to the effect that the donation is "to take effect at the death of the
donor" are not controlling criteria; such statements are to be construed
together with the rest of the instrument, in order to give effect to the real
intent of the transferor[;] [and]
(6) That in case of doubt, the conveyance should be deemed donation inter
ownership of the property subject of the deed.
That as we live[d] together as husband and wife with Juan Arcillas, we begot children, namely: LUCIO,
VICENTA, SEGUNDINA, and ADELAIDA, all surnamed ARCILLAS, and by reason of poverty which I suffered
while our children were still young; and because my husband Juan Arcillas aware as he was with our
destitution separated us [sic] and left for Cebu; and from then on never cared what happened to his family;
and because of that one EUFRACIA RODRIGUEZ, one of my nieces who also suffered with our poverty,
obedient as she was to all the works in our house, and because of the love and affection which I feel [for] her, I
have one parcel of land located at Sitio Amambajag, Culaba, Leyte bearing Tax Decl. No. 1878 declared in the
name of Alvegia Rodrigo, I give (devise) said land in favor of EUFRACIA RODRIGUEZ, her heirs, successors,
and assigns together with all the improvements existing thereon, which parcel of land is more or less
described and bounded as follows:
1. Bounded North by Amambajag River; East, Benito Picao; South, Teofilo Uyvico; and West, by Public land; 2.
It has an area of 3,492 square meters more or less; 3. It is planted to coconuts now bearing fruits; 4. Having
an assessed value of P240.00; 5. It is now in the possession of EUFRACIA RODRIGUEZ since May 21, 1962
in the concept of an owner, but the Deed of Donation or that ownership be vested on her upon my demise.
That I FURTHER DECLARE, and I reiterate that the land above described, I already devise in favor of
EUFRACIA RODRIGUEZ since May 21, 1962, her heirs, assigns, and that if the herein Donee predeceases
me, the same land will not be reverted to the Donor, but will be inherited by the heirs of EUFRACIA
RODRIGUEZ;
That I EUFRACIA RODRIGUEZ, hereby accept the land above described from Inay Alvegia Rodrigo and I am
much grateful to her and praying further for a longer life; however, I will give one half (1/2) of the produce of
the land to Apoy Alve during her lifetime.
Respondents entered the Property in 1983 and paid taxes afterwards.

The trial court ruled in favor of Gonzalo and declared him owner of the property, and
ordered the Spouses Branoco to surrender possession to Gonzalo. The trial court
rejected Spouses Branocos claim of ownership after treating the Deed as a donation
mortis causa which Rodrigo effectively cancelled by selling the Property to Vere.
Thus, by the time Rodriguez sold the property to the Spouses, she had no title to
transfer. On appeal, the CA granted the Spouses appeal and set aside the trial
court's ruling. it held that the deed of donation is one of inter vivos. In his petition,
Gonzalo seeks the reinstatement of the trial court's ruling. Alternatively, petitioner
claims ownership over the Property through acquisitive prescription, having allegedly
occupied it for more than 10 years.
Issue:
Whether or not the contract between Rodrigo and Rodriguez is a donation or a
devise? (Donation)
Ruling:
It is immediately apparent that Rodrigo passed naked title to Rodriguez

under a perfected donation inter vivos.
We examine the juridical nature of the Deed whether it passed title to

Rodriguez upon its execution or is effective only upon Rodrigos death
using principles distilled from relevant jurisprudence. Post-mortem
dispositions typically
First. Rodrigo stipulated that "if the herein Donee predeceases me, the
[Property] will not be reverted to the Donor, but will be inherited by the heirs
of x x x Rodriguez," signaling the irrevocability of the passage of title to
Rodriguez's estate, waiving Rodrigo's right to reclaim title. This transfer of
title was perfected the moment Rodrigo learned of Rodriguez's acceptance
of the disposition which, being reflected in the Deed, took place on the day of
its execution on 3 May 1965. Rodrigo's acceptance of the transfer
underscores its essence as a gift in presenti, not in futuro, as only donations
inter vivosneed acceptance by the recipient. Indeed, had Rodrigo wished to
retain full title over the Property, she could have easily stipulated, as the
testator did in another case, that "the donor, may transfer, sell, or encumber
to any person or entity the properties here donated x x x" or used words to
that effect. Instead, Rodrigo expressly waived title over the Property in case
Rodriguez predeceases her.
Second. What Rodrigo reserved for herself was only the beneficial title to the
Property, evident from Rodriguez's undertaking to "give one [half] x x x of the
produce of the land to Apoy Alve during her lifetime." Thus, the Deed's
stipulation that "the ownership shall be vested on [Rodriguez] upon my
demise," taking into account the non-reversion clause, could only refer to
Rodrigo's beneficial title. Indeed, if Rodrigo still retained full ownership over
the Property, it was unnecessary for her to reserve partial usufructuary right
over it.
Third. The existence of consideration other than the donor's death, such as
the donor's love and affection to the donee and the services the latter
rendered, while also true of devises, nevertheless "corroborates the express
irrevocability of x x x [inter vivos] transfers." Thus, the CA committed no
error in giving weight to Rodrigo's statement of "love and affection" for
Rodriguez, her niece, as consideration for the gift, to underscore its finding.
Nor can petitioner capitalize on Rodrigo's post-donation transfer of the
Property to Vere as proof of her retention of ownership. If such were the
barometer in interpreting deeds of donation, not only will great legal
uncertainty be visited on gratuitous dispositions, this will give license to
rogue property owners to set at naught perfected transfers of titles, which,
while founded on liberality, is a valid mode of passing ownership. The
interest of settled property dispositions counsels against licensing such
practice.
Accordingly, having irrevocably transferred naked title over the Property to

Rodriguez in 1965, Rodrigo "cannot afterwards revoke the donation nor
dispose of the said property in favor of another." Thus, Rodrigo's postdonation sale of the Property vested no title to Vere. As Vere's successor-ininterest, petitioner acquired no better right than him. On the other hand,
respondents bought the Property from Rodriguez, thus acquiring the latter's
title which they may invoke against all adverse claimants, including
petitioner.
==========================================================
V.D.5
105
their house on the residential lot and helped Domingo with the cultivation of the
farm. Domingo Melad signed in a private instrument in which he gave the
defendant the farm18 and in another private instrument in which he also gave him
the residential lot19, on the understanding that the latter would take care of the
grantor and would bury him upon his death.
Respondent attacked the alleged donations on the ground that that they were
donations of real property and as such should have been effected through a
public instrument.20
ISSUE:
W/N the donation was valid?
RULING/RATIO:
It is our view, considering the language of the two instruments, that Domingo Melad
did intend to donate the properties to the petitioner, as the private respondent
contends. We do not think, however, that the donee was moved by pure
liberality. While truly donations, the conveyances were onerous donations as the
properties were given to the petitioner in exchange for his obligation to take care of
the donee for the rest of his life and provide for his burial. Hence, it was not covered
by the rule in Article 749 of the Civil Code requiring donations of real properties
to be effected through a public instrument. The case at bar comes squarely
under the doctrine laid down in Manalo v. De Mesa, where the Court held:
There can be no doubt that the donation in question was made for a
valuable consideration, since the donors made it conditional upon the
donees' bearing the expenses that might be occasioned by the death
18 I, DOMINGO MELAD do hereby declare in this receipt the truth of my giving to Felix
70. Danguilan v. IAC

GR no. 69970, November 28, 1988
Petitioners: Felix Danguilan
Respondents: Apolonia Melad
Ponente: CRUZ, J.
No recit ready since the case is already short ;)

Facts
Respondent filed a complaint against the petitioner for recovery of a farm lot and
a residential lot which she claimed she had purchased from Domingo Melad, the
original owner, and were now being unlawfully withheld by the defendant. In his
answer, the petitioner denied the allegation and averred that he was the owner of
the said lots of which he had been in open, continuous and adverse possession,
having acquired them from Domingo Melad in 1941 and 1943 by donation.
The Petitioner testified that he was the husband of Isidra Melad, Domingo's
niece, whom he and his wife Juana Malupang had taken into their home as their
ward as they had no children of their own. He and his wife lived with the couple in
Danguilan, my agricultural land...that I hereby declare and bind myself that there is no one to
whom I will deliver this land except to him as he will be the one responsible for me in the event
that I will die and also for all other things needed and necessary for me...
19 I, DOMINGO MELAD, declare the truth that I have delivered my residential lot to Felix
Danguilan because he will be the one to take care of SHELTERING me or bury me when I die...
20 Three essential elements of a donation:1. Reduction in the patrimony of the donor

2. Increase in the patrimony of the donee
3. Intent to do an act of liberality or aniumus donandi
It is also required that the donation be made in a public document and that its acceptance
be made in the same deed of donation or in a separate public document, which has to be
recorded as well.
and burial of the donor Placida Manalo, a condition and obligation.

Therefore, in order to determine whether or not said donation is valid
and effective it should be sufficient to demonstrate that, as a contract,
it embraces the conditions the law requires and is valid and effective,
although not recorded in a public instrument.
The private respondent argues that as there was no equivalence between the value
of the lands donated and the services for which they were being exchanged, the two
transactions should be considered pure or gratuitous donations of real rights, hence,
they should have been effected through a public instrument and not mere private
writings. However, no evidence has been adduced to support her contention that the
values exchanged were disproportionate or unequal.
As to the claim of Respondent that there was a deed of sale between her and the
original owner (the validity and proper execution of the alleged deed of sale was
seriously challenged and highly suspicious)21, assuming that the sale was valid, there
was no transfer of ownership because the land was never delivered to Respondent. It
is true that the same article declares that the execution of a public instrument is
equivalent to the delivery of the thing which is the object of the contract, but, in order
that this symbolic delivery may produce the effect of tradition, it is necessary that the
vendor shall have had such control over the thing sold that, at the moment of the sale,
its material delivery could have been made. It is not enough to confer upon the
purchaser the ownership and the right of possession. There is no dispute that it is the
petitioner and not the private respondent who is in actual possession of the litigated
properties.
Disposition:
Petition is granted. Decision of CA reversed.
71. Arangote v. Maglunob
Summary:
Petitioners acquired subject land from Esperanza by virtue of an Affidavit executed by
the latter. Respondents contended that the Affidavit was void and there was no valid
21 The deed of sale was allegedly executed when the respondent was only three years old
and the consideration was supposedly paid by her mother, Maria Yedan from her earnings as a
wage worker in a factory. 16 This was itself a suspicious circumstance, one may well wonder
why the transfer was not made to the mother herself, who was after all the one paying for the
lands. The sale was made out in favor of Apolonia Melad although she had been using the
surname Yedan her mother's surname, before that instrument was signed and in fact even after
she got married. The averment was also made that the contract was simulated and prepared
after Domingo Melad's death in 1945. It was also alleged that even after the supposed execution
of the said contract, the respondent considered Domingo Melad the owner of the properties and
that she had never occupied the same.
106
transfer. Respondents being co-owners of their grand aunt Esperanza, the latters
share shall be adjudicated to them. Held: (1) Affidavit was VOID. It was actually a
deed of donation. However the requisites for valid donation were not complied with.
No valid transfer to the petitioners. (2) Petitioners were not possessors and builders in
GF.
Facts:
Elvira T. Arangote, herein petitioner married to Ray Mars E. Arangote, is the
registered owner of the subject property, as evidenced by an OCT. Respondents
Martin (Martin II) and Romeo are first cousins and the grandnephews of Esperanza
MaglunobDailisan (Esperanza), from whom petitioner acquired the subject property.
The Petition stems from a Complaint filed by petitioner and her husband against the
respondents for Quieting of Title, Declaration of Ownership and Possession,
Damages with Preliminary Injunction, and Issuance of Temporary Restraining Order
before the MCTC.
The Complaint further stated that Esperanza executed a Last Will and Testament
bequeathing the subject property to petitioner and her husband, but it was never
probated. Esperanza executed another document, an Affidavit, in which she waived
all her rights and interest in the subject property in favor of petitioner and her
husband. Tax Declaration in the name of Esperanza was cancelled and a different Tax
Declaration was issued in the name of the petitioner and her husband.
Petitioner and her husband constructed a house on the subject property. An OCT was
issued by the DAR Secretary in the name of petitioner, married to Ray Mars E.
Arangote. However, respondents, together with some hired persons, entered the
subject property and built a hollow block wall behind and in front of petitioners house,
which effectively blocked the entrance to its main door.
As a consequence thereof, petitioner and her husband were compelled to institute a
civil case. In their Answer, respondents averred that they coowned the subject
property with Esperanza. Respondents also asserted in their Counterclaim that
petitioner and her husband, by means of fraud, undue influence and deceit were able
to make Esperanza, who was already old and illiterate, affix her thumbmark to the
Affidavit, wherein she renounced all her rights, share, interest and participation
whatsoever over the subject property in favor of petitioner and her husband.
Respondents thus prayed that the OCT issued in petitioners name be declared void
insofar as their twothirds shares are concerned.
MCTC rendered decision declaring petitioner and her husband as the true and lawful
owners of the subject property. Respondents appealed to the RTC. RTC reversed
MCTC decision and adjudged the respondents as lawful owners and possessors of
the entire subject property. MNT (whereby petitioner presented Deed of Acceptance
and notice of such acceptance) was denied. Petitioner and husband then filed Petition
for Review before the CA. Petition denied; CA affirmed RTC decision. MR denied.
Hence this petition before the SC.

Issues:
1)
2)
Whether Esperanzas Affidavit was valid

Whether petitioner and her husband can be considered as possessors in good
faith and entitled to the rights provided under Articles 448 and 546 of the Civil
Code
Held: NO to both
1)
After a careful scrutiny of the records, this Court affirms the findings of both the RTC
and the Court of Appeals as regards the origin of the subject property and the fact
that respondents, with their grand aunt Esperanza, were coheirs and coowners of the
subject property (right of representation).
Esperanzas Affidavits states: That I hereby renounce, relinquish, waive and
quitclaim all my rights,
share, interest and participation whatsoever in the [subject

property] unto the said Sps. Ray Mars Arangote and Elvira T. Arangote, their heirs,
successors, and assigns including the improvement found thereon.
Logically, if Esperanza fully owned the subject property, she would have simply
waived her rights to and interest in the subject property, without mentioning her
share and participation in the same. By including such words in her Affidavit,
Esperanza was aware of and was limiting her waiver, renunciation, and quitclaim to
her onethird share and participation in the subject property.
Esperanzas Affidavit is, in fact, a Donation. Esperanzas real intent in executing the
said Affidavit was to donate her share in the subject property to petitioner and her
husband. As no onerous undertaking is required of petitioner and her husband under
the said Affidavit, the donation is regarded as a pure donation of an interest in a real
property covered by Article 749 of the Civil Code.
From the aforesaid provision, there are three requisites for the validity of a simple
donation of a real property, to wit: (1) it must be made in a public instrument; (2) it
must be accepted, which acceptance may be made either in the same Deed of
Donation or in a separate public instrument; and (3) if the acceptance is made in a
separate instrument, the donor must be notified in an authentic form, and the same
must be noted in both instruments.
This Court agrees with the RTC and the Court of Appeals that the Affidavit executed
by Esperanza relinquishing her rights, share, interest and participation over the
subject property in favor of the petitioner and her husband suffered from legal
infirmities, as it failed to comply with the aforesaid requisites of the law.
107
In the present case, the said Affidavit, which is tantamount to a Deed of Donation, met
the first requisite, as it was notarized; thus, it became a public instrument.
Nevertheless, it failed to meet the aforesaid second and third requisites. The
acceptance of the said donation was not made by the petitioner and her husband
either in the same Affidavit or in a separate public instrument. As there was no
acceptance made of the said donation, there was also no notice of the said
acceptance given to the donor, Esperanza. Therefore, the Affidavit executed by
Esperanza in favor of petitioner and her husband is null and void.
The subsequent notarized Deed of Acceptance as well as the notice of such
acceptance, executed by the petitioner did not cure the defect. Moreover, it was only
made by the petitioner several years after the Complaint was filed in court, or when
the RTC had already rendered its Decision, although it was still during Esperanzas
lifetime. Evidently, its execution was a mere afterthought, a belated attempt to cure
what was a defective donation.
For this reason, even Esperanzas onethird share in the subject property cannot be
adjudicated to the petitioner.
With the foregoing, this Court holds that the RTC and the Court of Appeals did not err
in declaring null and void Esperanzas Affidavit.
Considering that Esperanza died without any compulsory heirs and that the supposed
donation of her onethird share in the subject property per her Affidavit was already
declared null and void, Esperanzas onethird share in the subject property passed on
to her legal heirs, the respondents.
2)
Possession in good faith ceases from the moment defects in the title are made known
to the possessor by extraneous evidence or by a suit for recovery of the property by
the true owner. Every possessor in good faith becomes a possessor in bad faith from
the moment he becomes aware that what he believed to be true is not so.
From the moment when respondents brought a Complaint before the Lupon ng
Barangay, challenging the title of petitioner to the subject property, the good faith of
the petitioner had ceased. Petitioner cannot be entitled to the rights under Articles 448
and 546 of the Civil Code, because the rights mentioned therein are applicable only to
builders in good faith and not to possessors in good faith.
Thus, when petitioner and her husband built a house thereon in 1989 they cannot be
considered to have acted in good faith as they were fully aware that when Esperanza
executed an Affidavit relinquishing in their favor the subject property the only proof of
Esperanzas ownership over the same was a mere tax declaration. This fact or
circumstance alone was enough to put the petitioner and her husband under inquiry.
Settled is the rule that a tax declaration does not prove ownership. It is merely an
indicium of a claim of ownership.
108
With the foregoing, the petitioner is not entitled to the rights under Article 448 and 546
as the petitioner is not a builder and possessor in good faith.
Petition denied.
72. Quilala v. Alcantara

Petitioner: RICKY Q. QUILALA
Respondent: GLICERIA ALCANTARA, LEONORA ALCANTARA, INES REYES and
JOSE REYES
Ponente: Ynares-Santiago J.
Short Facts and Doctrine/s: The validity of a donation is being assailed on the
ground that the done failed to acknowledge her acceptance before the notary public,
which makes the donation appearing merely on a private instrument. Held: Such
defect did not invalidate the donation. The requirement that the contracting parties
and their witnesses should sign on the left-hand margin of the instrument is not
absolute. The intendment of the law merely is to ensure that each and every page of
the instrument is authenticated by the parties. The requirement is designed to avoid
the falsification of the contract after the same has already been duly executed by the
parties. Hence, a contracting party affixes his signature on each page of the
instrument to certify that he is agreeing to everything that is written thereon at the
time of signing. Simply put, the specification of the location of the signature is merely
directory. The fact that one of the parties signs on the wrong side of the page does
not invalidate the document. The purpose of authenticating the page is served, and
the requirement in the above-quoted provision is deemed substantially complied with.
The lack of an acknowledgment by the donee before the notary public does not also
render the donation null and void. The instrument should be treated in its entirety.
Facts:
On November 7, 1983, Catalina Quilala died. Violeta Quilala likewise died on

May 22, 1984. Petitioner Ricky Quilala alleges that he is the surviving son of
Violeta Quilala.
Meanwhile, respondents Gliceria Alcantara, Leonora Alcantara, Ines Reyes
and Juan Reyes, claiming to be Catalinas only surviving relatives within the
fourth civil degree of consanguinity, executed a deed of extrajudicial
settlement of estate, dividing and adjudicating unto themselves the abovedescribed property.
On September 13, 1984, respondents instituted against petitioner an action
for the declaration of nullity of the donation inter vivos, and for the
cancellation of TCT in the name of Violeta Quilala.
The trial court found that the deed of donation, although signed by both
Catalina and Violeta, was acknowledged before a notary public only by the
donor, Catalina. Consequently, there was no acceptance by Violeta of the
donation in a public instrument, thus rendering the donation null and
void. Furthermore, the trial court held that nowhere in Catalinas SSS records
does it appear that Violeta was Catalinas daughter. Rather, Violeta was
referred to therein as an adopted child, but there was no positive evidence
that the adoption was legal. On the other hand, the trial court found that
respondents were first cousins of Catalina Quilala.
However, since it appeared that Catalina died leaving a will, the trial court
ruled that respondents deed of extrajudicial settlement cannot be
registered. The trial court rendered judgment in favor of plaintiffs Gliceria
Alcantara, Leonarda Alcantara, Ines Reyes and Juan Reyes and against
defendant Ricky A. Quilala.
Issue:
W/N the donation executed by Catalina in favor of Violeta is valid.
Ratio: Yes, it is valid.
On February 20, 1981, Catalina Quilala executed a Donation of Real

Property Inter Vivos in favor of Violeta Quilala over a parcel of land located
in Sta. Cruz, Manila registered in her name under Transfer Certificate of Title
No. 17214 of the Register of Deeds for Manila.
The Donation of Real Property Inter Vivos consists of two pages. The first
page contains the deed of donation itself, and is signed on the bottom
portion by Catalina Quilala as donor, Violeta Quilala as donee, and two
instrumental witnesses.
The second page contains the Acknowledgment, which states merely that
Catalina Quilala personally appeared before the notary public and
acknowledged that the donation was her free and voluntary act and
deed. There appear on the left-hand margin of the second page the
signatures of Catalina Quilala and one of the witnesses, and on the righthand margin the signatures of Violeta Quilala and the other witness.
Held:
Under Article 749 of the Civil Code, the donation of an immovable must be made in a
public instrument in order to be valid, specifying therein the property donated and the
value of the charges which the donee must satisfy. As a mode of acquiring ownership,
donation results in an effective transfer of title over the property from the donor to the
donee, and is perfected from the moment the donor knows of the acceptance by the
donee, provided the donee is not disqualified or prohibited by law from accepting the
donation. Once the donation is accepted, it is generally considered irrevocable, and
the donee becomes the absolute owner of the property. The acceptance, to be valid,
must be made during the lifetime of both the donor and the donee. It may be made in
the same deed or in a separate public document, and the donor must know the
acceptance by the donee.
In the case at bar, the deed of donation contained the number of the certificate of title
as well as the technical description as the real property donated. It stipulated that the
donation was made for and in consideration of the love and affection which the
DONEE inspires in the DONOR, and as an act of liberality and generosity. This was
sufficient cause for a donation. Indeed, donation is legally defined as an act of
liberality whereby a person disposes gratuitously of a thing or right in favor of another,
who accepts it.
The donees acceptance of the donation was explicitly manifested in the penultimate
paragraph of the deed, which reads: That the DONEE hereby receives and accepts
the gift and donation made in her favor by the DONOR and she hereby expresses her
appreciation and gratefulness for the kindness and generosity of the DONOR. Below
the terms and stipulations of the donation, the donor, donee and their witnesses
affixed their signature. However, the Acknowledgment appearing on the second page
mentioned only the donor, Catalina Quilala. Thus, the trial court ruled that for Violetas
failure to acknowledge her acceptance before the notary public, the same was set
forth merely on a private instrument, i.e., the first page of the instrument. This Court
disagrees.
The pertinent provision is Section 112, paragraph 2 of Presidential Decree No. 1529,
which states: Deeds, conveyances, encumbrances, discharges, powers of attorney
and other voluntary instruments, whether affecting registered or unregistered land,
executed in accordance with law in the form of public instruments shall
be registrable: Provided, that, every such instrument shall be signed by the person or
persons executing the same in the presence of at least two witnesses who shall
likewise sign thereon, and shall be acknowledged to be the free act and deed of the
person or persons executing the same before a notary public or other public officer
authorized by law to take acknowledgment. Where the instrument so
acknowledged consists of two or more pages including the page whereon
acknowledgment is written, each page of the copy which is to be registered in the
office of the Register of Deeds, or if registration is not contemplated, each page of the
copy to be kept by the notary public, except the page where the signatures already
appear at the foot of the instrument, shall be signed on the left margin thereof by the
person or persons executing the instrument and their witnesses, and all the pages
sealed with the notarial seal, and this fact as well as the number of pages shall be
stated in the acknowledgment. Where the instrument acknowledged relates to a sale,
transfer, mortgage or encumbrance of two or more parcels of land, the number
thereof shall likewise be set forth in said acknowledgment.
As stated above, the second page of the deed of donation, on which the
Acknowledgment appears, was signed by the donor and one witness on the left-hand
margin, and by the donee and the other witness on the right-hand margin. Surely, the
requirement that the contracting parties and their witnesses should sign on the
left-hand margin of the instrument is not absolute. The intendment of the law
merely is to ensure that each and every page of the instrument is authenticated
by the parties. The requirement is designed to avoid the falsification of the
contract after the same has already been duly executed by the parties. Hence, a
contracting party affixes his signature on each page of the instrument to certify
that he is agreeing to everything that is written thereon at the time of signing.
109
Simply put, the specification of the location of the signature is merely

directory. The fact that one of the parties signs on the wrong side of the page
does not invalidate the document. The purpose of authenticating the page is
served, and the requirement in the above-quoted provision is deemed
substantially complied with. The lack of an acknowledgment by the donee
before the notary public does not also render the donation null and void. The
instrument should be treated in its entirety. It cannot be considered a private
document in part and a public document in another part. The fact that it was
acknowledged before a notary public converts the deed of donation in its entirety a
public instrument. The fact that the donee was not mentioned by the notary public in
the acknowledgment is of no moment. To be sure, it is the conveyance that should be
acknowledged as a free and voluntary act. In any event, the donee signed on the
second page, which contains the Acknowledgment only. Her acceptance, which is
explicitly set forth on the first page of the notarized deed of donation, was made in a
public instrument.
It should be stressed that this Court, not being a trier of facts, cannot make a
determination of whether Violeta was the daughter of Catalina, or whether petitioner is
the son of Violeta. These issues should be ventilated in the appropriate probate or
settlement proceedings affecting the respective estates of Catalina and
Violeta. Suffice it to state that the donation, which we declare herein to be valid, will
still be subjected to a test on its inofficiousness under Article 771, in relation to Articles
752, 911 and 912 of the Civil Code. Moreover, property donated inter vivos is subject
to collation after the donors death, whether the donation was made to a compulsory
heir or a stranger, unless there is an express prohibition if that had been the donors
intention
Disposition: WHEREFORE, in view of the foregoing, the petition is GRANTED. The
appealed decision of the Court of Appeals is REVERSED and SET ASIDE and a new
judgment is rendered dismissing Civil Case No. 84-26603.
73. Carinan v. Spouses Cueto
Petitioner: Esperanza C. Carinan
Respondents: Spouses Gavino Cueto and Carmelita Cueto
Summary:
Spouses Jose and Esperanza acquired from Roberta the rights over a parcel of land
in Juana Complex I, Bian, Laguna, registered under GSIS. Their transaction was
covered by a Deed of Assignment and Transfer of Rights with Assumption of
Obligations. Esperanza and Jose were to assume the payment of the applicable
monthly amortizations for the subject land to the GSIS. Several amortizations
remained unpaid by Esperanza and Jose, resulting in an impending cancellation in
2005 of GSIS conditional sale of the subject property to Roberto. It was then that
Esperanza, then already a widow, sought financial assistance from her brother,
respondent Gavino. The respondents then paid from their conjugal savings
Esperanzas total obligation of under the subject deed of assignment. The
respondents alleged that Esperanza and Jazer (son) undertook to execute a Deed of
Absolute Sale in favor of the respondents once the title over the subject property was
transferred to their names, subject to the condition that they would be given the first
option to buy it back within three years by reimbursing the expenses incurred by the
respondents on the property. Esperanza and Jazer, however, failed to comply,
prompting respondents to file a complaint for specific performance against them, to
compel them to execute a deed of sale in favor of the respondents. Esperanza and
Jazer disputed these claims. They argued that there was neither a written or verbal
agreement for the transfer of the disputed property to the respondents names, nor a
promise for the repayment of the amounts that were paid by the respondents.
Esperanza believed that Gavino paid her outstanding balance with the GSIS out of
sheer generosity and pity upon her. RTC ordered Esperanza and Jazer to pay
respondents P927,182.12, representing the amount of P 785,680.37 paid by the
[respondents] to the GSIS; and P 141,501.75 consisting of the expenses in
transferring the title to the name of Esperanza and Jazer plus the cost of
improvements introduced on the property, with legal interest from the time of demand
until fully paid. Issue: Whether a contract of loan was created when respondents paid
Esperanzas arrears with the GSIS and not a donation or help extended by
respondents to Esperanza. Held: Loan. The Court adopts the RTCs and CAs finding
that between Esperanza and the respondents, there was a clear intention for a return
of the amounts which the respondents spent for the acquisition, transfer and
renovation of the subject property. The respondents then reasonably expected to get
their money back from Esperanza. When a large amount of money is involved, as in
this case, this court is constrained to take Esperanza and Jazers claim of generosity
by the respondents with more than a grain of salt. Esperanzas refusal to pay back
would likewise result in unjust enrichment, to the clear disadvantage of the
respondents. In order to sufficiently substantiate her claim that the money paid by the
respondents was actually a donation, Esperanza should have also submitted in court
a copy of their written contract evincing such agreement. Article 748 of the New Civil
Code (NCC), which applies to donations of money, is explicit on this point.
Facts:
The case originated from a complaint for specific performance with damages filed by
Spouses Gavino C. Cueto (Gavino) and Carmelita J. Cueto (respondents) against
Esperanza C. Carinan (Esperanza) and her son, Jazer C. Carinan (Jazer). The
respondents alleged that sometime in May 1986, Esperanza and her husband, Jose
Carinan (Jose), acquired from one Roberto Ventura (Roberto) the rights over a parcel
of land formerly covered by Transfer Certificate of Title (TCT) No. T-129128 under the
name of the Government Service Insurance System (GSIS), measuring 180 square
meters and more particularly described as Lot 24, Block 20, Juana Complex I, Bian,
Laguna. Their transaction was covered by a Deed of Assignment and Transfer of
Rights with Assumption of Obligations. Esperanza and Jose were to assume the
payment of the applicable monthly amortizations for the subject land to the GSIS.
110
Several amortizations remained unpaid by Esperanza and Jose, resulting in an

impending cancellation in 2005 of GSIS conditional sale of the subject property to
Roberto. It was then that Esperanza, then already a widow, sought financial
assistance from her brother, Gavino, in October 2005. The respondents then paid
from their conjugal savings Esperanzas total obligation of P785,680.37 under the
subject deed of assignment.
The respondents alleged that Esperanza and Jazer undertook to execute a Deed of
Absolute Sale in favor of the respondents once the title over the subject property was
transferred to their names, subject to the condition that they would be given the first
option to buy it back within three years by reimbursing the expenses incurred by the
respondents on the property. Besides satisfaction of the unpaid amortizations to
GSIS, the respondents paid for the transfer of the subject property from Roberto to
Esperanza, and the renovation of the residential house erected on the subject land,
resulting in additional expenses of P515,000.00.7 TCT No. T-636804 already under
the name of Esperanza was surrendered to the respondents.
Sometime in 2006, the respondents demanded from Esperanza and Jazer the
fulfillment of their commitment to transfer the subject property to the respondents
names through the execution of a deed of sale. When Esperanza and Jazer failed to
comply despite efforts for an amicable settlement, the respondents filed with the
Regional Trial Court (RTC) of Bian, Laguna the subject complaint for specific
performance with damages.
Esperanza and Jazer disputed these claims. They argued that there was neither a
written or verbal agreement for the transfer of the disputed property to the
respondents names, nor a promise for the repayment of the amounts that were paid
by the respondents. Esperanza believed that Gavino paid her outstanding balance
with the GSIS out of sheer generosity and pity upon her. She denied having borrowed
the respondents money because given her financial standing, she knew that she
could not afford to pay it back. Furthermore, to require her to execute a deed of sale
for the propertys full conveyance would totally disregard the payments that she
personally made for the purchase. Finally, Esperanza questioned Jazers inclusion as
a party to the case, claiming that he had no personal knowledge nor was he privy to
any negotiation with the respondents.
RTC
RTC ordered Esperanza and Jazer to pay respondents P927,182.12, representing the
amount of P 785,680.37 [paid] by the [respondents] to the GSIS; and P 141,501.75
consisting of the expenses in transferring the title to the name [of Esperanza and
Jazer] plus the cost of improvements introduced on the property, with legal interest
from the time of demand until fully paid.
Given the substantial amount involved, the RTC ruled that the money paid by the
respondents for Esperanzas arrears could not have been given gratuitously, but was
intended as a loan that demanded a repayment. This arrangement was also bolstered
by the fact that Esperanza surrendered possession of the subject lands TCT to the
respondents. Had the parties intended a donation, then Esperanza should have kept
possession of the title. Besides the amount of P785,680.37 paid to GSIS, expenses
for transfer and property renovation paid by the respondents were determined by the
court to total P141,501.75.13
The RTC emphasized that Esperanza and Jazer could not be compelled to convey
the subject property to the respondents. Even granting that a promise to sell was
made by Esperanza, the same was unenforceable as it was not reduced into writing.
CA affirmed RTC. It agreed with the RTCs finding that the respondents payment of
the GSIS obligation could not have been gratuitous, considering its substantial
amount. The CA also took note of the fact that the respondents retained possession
of TCT No. T-636804 that covered the subject property. The CA then held that to
prevent unjust enrichment by Esperanza, she should refund the payments which the
respondents made to GSIS, the expenses for transfer of title, and the cost of
improvements introduced on the property.
Issue:
2.
3.
of salt. Esperanzas refusal to pay back would likewise result in unjust enrichment, to
the clear disadvantage of the respondents.
In order to sufficiently substantiate her claim that the money paid by the respondents
was actually a donation, Esperanza should have also submitted in court a copy of
their written contract evincing such agreement. Article 748 of the New Civil Code
(NCC), which applies to donations of money, is explicit on this point as it reads:
Art. 748. The donation of a movable may be made orally or in writing.
An oral donation requires the simultaneous delivery of the thing or of the
document representing the right donated.
CA
1.
111
Whether or not a contract of loan was created when respondents paid

Esperanzas arrears with the GSIS and not a donation or help extended by
respondents to Esperanza. LOAN.
Whether or not a co-ownership exists between the parties. Beyond scope of
petition for review on certiorari.
Whether or not respondents are builders in bad faith, hence not entitled to
reimbursement of the costs of improvements on the subject property. - Beyond
scope of petition for review on certiorari.
Held:
First Issue:
The Court adopts the RTCs and CAs finding that between Esperanza and the
respondents, there was a clear intention for a return of the amounts which the
respondents spent for the acquisition, transfer and renovation of the subject property.
The respondents then reasonably expected to get their money back from Esperanza.
Esperanzas claim that the expenses and payments in her behalf were purely
gratuitous remained unsupported by records. Indeed, the absence of intention to be
reimbursed is negated by the facts of this case. The respondents conduct never at
any time intimated any intention to donate in favor of Esperanza and Jazer. A
donation is a simple act of liberality where a person gives freely of a thing or right in
favor of another, who accepts it (Article 725, New Civil Code, as amended). But when
a large amount of money is involved, as in this case, this court is constrained to take
Esperanza and Jazers claim of generosity by the respondents with more than a grain
If the value of the personal property donated exceeds five thousand pesos,
the donation and the acceptance shall be made in writing.1wphi1
Otherwise, the donation shall be void.
As the Court ruled in Moreo-Lentfer v. Wolff, a donation must comply with the
mandatory formal requirements set forth by law for its validity. When the subject of
donation is purchase money, Article 748 of the NCC is applicable. Accordingly, the
donation of money as well as its acceptance should be in writing. Otherwise, the
donation is invalid for non-compliance with the formal requisites prescribed by law.
The respondents statement that they paid for Esperanzas obligations because they
wanted to help her did not contradict an understanding for the return of the claimed
amounts. Clearly, the aid then needed by Esperanza was for the immediate
production of the money that could pay for her obligations to the GSIS and effect
transfer of title, in order that her payments and interest over the property would not be
forfeited. The help accorded by the respondents corresponded to such need. It did not
follow that the respondents could no longer be allowed to later demand the
repayment. In disputing the claim against her, Esperanza imputed deceit upon the
respondents and claimed that they misled her into their real intention behind the
payment of her obligations and possession of TCT No. T-636804. Deceit, however, is
a serious charge which must be proven by more than just bare allegations.
Although the Court affirms the trial and appellate courts' ruling that, first, there was no
donation in this case and, second, the respondents are entitled to a return of the
amounts which they spent for the subject property, it still cannot sustain the
respondents' plea for Esperanza's full conveyance of the subject property. To impose
the property's transfer to the respondents' names would totally disregard Esperanza's
interest and the payments which she made for the property's purchase. Thus, the
principal amount to be returned to the respondents shall only pertain to the amounts
that they actually paid or spent. The Court finds no cogent reason to disturb the trial
court's resolve to require in its Decision dated December 15, 2009, around four years
after the sums were paid for the subject property's acquisition and renovation, the
immediate return of the borrowed amounts.
Second and Third Issues

Esperanza's plea for a reversal of the lower courts' rulings upon her claim of coownership and allegation that the respondents were builders in bad faith cannot be
considered at this stage of the case. These claims raise factual issues which are
beyond the scope of a petition for review on certiorari. More importantly, such
defenses were not advanced by Esperanza during the proceedings with the trial and
appellate courts. Settled is the rule that "defenses not pleaded in the answer may not
112
be raised for the first time on appeal. A party cannot, on appeal, change
fundamentally the nature of the issue in the case. When a party deliberately adopts a
certain theory and the case is decided upon that theory in the court below, he will not
be permitted to change the same on appeal, because to permit him to do so would be
unfair to the adverse party."

Civ Rev Digest (Property)

Hochgeladen von

Dokumentinformationen

Copyright

Verfügbare Formate

Dieses Dokument teilen

Dokument teilen oder einbetten

Freigabeoptionen

Stufen Sie dieses Dokument als nützlich ein?

Sind diese Inhalte unangemessen?

Copyright:

Verfügbare Formate

Civ Rev Digest (Property)

Hochgeladen von

Copyright:

Verfügbare Formate

4D CIVIL LAW REVIEW DIGEST | JUSTICE HERNANDO

IV.A Nature of Property

4D CIVIL LAW REVIEW DIGEST | JUSTICE HERNANDO

Short Facts and Doctrine/s:

Airwaves are not susceptible to private appropriation/ownership. As provided

Respondents Consolidated Broadcasting System, Inc. (CBS) and Peoples

o R.A. No. 7477 granted PBS a legislative franchise to construct, install,

4D CIVIL LAW REVIEW DIGEST | JUSTICE HERNANDO

had violated the mandate to democratize ownership in their respective

Whether airwaves are susceptible to appropriation/ownership. NO.

Any person or enterprise which wishes to operate a broadcast radio or television

Moreover, the airwaves themselves the very medium utilized by

It would be strange if the First Amendment, aimed at protecting

4D CIVIL LAW REVIEW DIGEST | JUSTICE HERNANDO

At no time did radio companies fall under the jurisdiction of the

The right of a particular entity to broadcast over the airwaves is established

4D CIVIL LAW REVIEW DIGEST | JUSTICE HERNANDO

4D CIVIL LAW REVIEW DIGEST | JUSTICE HERNANDO

Petitioner Magdalena T. Villasi (Villasi) engaged the services of respondent Fil-Garcia

4D CIVIL LAW REVIEW DIGEST | JUSTICE HERNANDO

6. Prudential Bank v. Panis

4D CIVIL LAW REVIEW DIGEST | JUSTICE HERNANDO

estate mortgage can be constituted on the building erected on the land

Plaintiffs-spouses Fernando A. Magcale and Teodula Baluyut Magcale secured a loan

Petitioner filed a Motion for Reconsideration. In an Order, the Motion for

A 2-STOREY, SEMI-CONCRETE, residential building with warehouse

From the aforequoted stipulation, it is obvious that the mortgagee (defendant

While a mortgage of land necessarily includes buildings, a building by itself

Thus, while it is true that a mortgage of land necessarily includes, in the

4D CIVIL LAW REVIEW DIGEST | JUSTICE HERNANDO

A mortgage executed by a private respondent on his own building erected on

Restrictions expressly mentioned on the face of the respondents' title, are

As to restrictions expressly mentioned on the face of respondents' OCT No.

But it is a different matter, as regards the second mortgage executed over

As between parties to a contract validity cannot be given to it by estoppel if it is

7. Makati Leasing v. Wearever

4D CIVIL LAW REVIEW DIGEST | JUSTICE HERNANDO

which is movable in its nature and becomes immobilized only by destination or

Petitioner: Star Two (SPV-AMC), Inc.,

4D CIVIL LAW REVIEW DIGEST | JUSTICE HERNANDO

Paper City defaulted. RCBC filed a petition for extra-judicial foreclosure

Explanation of Answer to Issue 1

Disposition: WHEREFORE, the petition is GRANTED. Accordingly, the Decision and

4D CIVIL LAW REVIEW DIGEST | JUSTICE HERNANDO

Issue: Should the pump be treated as an immovable?

IV.B.2 Classification of Property: Movable Property

Petitioner: LUIS MARCOS P. LAUREL

4D CIVIL LAW REVIEW DIGEST | JUSTICE HERNANDO

Theft of PLDTs business. The business of providing telecommunication or

4D CIVIL LAW REVIEW DIGEST | JUSTICE HERNANDO

11. PNB v. Aznar

Therefore, the business of providing telecommunication and the telephone service

G.R. 171805 May 30, 2011

4D CIVIL LAW REVIEW DIGEST | JUSTICE HERNANDO

or from ambiguous circumstances susceptible of other interpretations. No such

Thereafter, various subsequent annotations were made on the same titles,

Court of Appeals opined that the monetary contributions made by Aznar, et

4D CIVIL LAW REVIEW DIGEST | JUSTICE HERNANDO

10 Years because it was based on a written contract (the minutes by the

4D CIVIL LAW REVIEW DIGEST | JUSTICE HERNANDO

4D CIVIL LAW REVIEW DIGEST | JUSTICE HERNANDO

(1948-1994) do not qualify as competent evidence of actual possession and

Fourth, witness Vicente Ocos lacks personal knowledge as to when the

4D CIVIL LAW REVIEW DIGEST | JUSTICE HERNANDO