Right to Sub-Surface and Airspace

Republic of the Philippines

SUPREME COURT
Manila

SECOND DIVISION

G.R. No. 95907 April 8, 1992

JOSE REYNANTE, petitioner,

vs.
THE HONORABLE COURT OF APPEALS, THE HON. VALENTIN CRUZ, as Presiding Judge,
Regional Trial Court of Bulacan, Branch VIII, and the HEIRS OF LEONCIO CARLOS and
DOLORES A. CARLOS, and HEIRS OF GORGONIO CARLOS and CONCEPCION
CARLOS, respondents.

PARAS, J.:

This is a petition for review on certiorari which seeks the reversal of: a) decision 1 of the Court of
Appeals dated February 28, 1990 in CA-G.R. No. 1917 entitled "JOSE REYNANTE versus HON.
VALENTIN CRUZ, Judge, RTC of Malolos, Bulacan, and HEIRS OF LEONCIO AND DOLORES
CARLOS, et al.", affirming the decision 2 of the Regional Trial Court
of Malolos, Bulacan, Branch 8, Third Judicial Region which reversed the decision 3 of the Municipal
Trial Court of Meycauayan, Bulacan, Branch 1, Third Judicial Region in Civil Case No. 1526 entitled
"HEIRS OF LEONCIO CARLOS & DOLORES A. CARLOS and HEIRS OF GORGONIO A. CARLOS
& CONCEPCION CARLOS versus JOSE REYNANTE: and b) the resolution denying the motion for
reconsideration.

The facts as culled from the records of the case are as follows:

More than 50 years ago, petitioner Jose Reynante was taken as tenant by the late Don Cosme Carlos,
owner and father-in-law of herein private respondents, over a fishpond located at Barrio Liputan,
Meycauayan, Bulacan with an area of 188.711 square meters, more or less and covered by Transfer
Certificate of Title No. 25618, Land Registry of Bulacan.

During the tenancy, petitioner Jose Reynante constructed a nipa hut where he and his family lived and
took care of the nipa palms (sasahan) he had planted on lots 1 and 2 covering an area of 5,096 square
meters and 6,011 square meters respectively. These lots are located between the fishpond covered
by TCT No. 25618 and the Liputan (formerly Meycauayan) River. Petitioner harvested and sold said
nipa palms without interference and prohibition from anybody. Neither did the late Don Cosme Carlos
question his right to plant the nipa palms near the fishpond or to harvest and appropriate them as his
own.

After the death of Don Cosme Carlos, his heirs (private respondents' predecessors-in-interest) entered
into a written agreement denominated as "SINUMPAANG SALAYSAY NG PAGSASAULI NG
KARAPATAN" dated November 29, 1984 with petitioner Jose Reynante whereby the latter for and in
consideration of the sum of P200,000.00 turned over the fishpond he was tenanting to the heirs of
Don Cosme Carlos and surrendered all his rights therein as caretaker or "bantay-kasama at
tagapamahala" (Rollo, p. 77).

Pursuant to the said written agreement, petitioner surrendered the fishpond and the two huts located
therein to private respondents. Private respondents thereafter leased the said fishpond to one Carlos
de la Cruz. Petitioner continued to live in the nipa hut constructed by him on lots 1 and 2 and to take
care of the nipa palms he had planted therein.

On February 17, 1988, private respondents formally demanded that the petitioner vacate said portion
since according to them petitioner had already been indemnified for the surrender of his rights as a
tenant. Despite receipt thereof, petitioner refused and failed to relinquish possession of lots 1 and 2.

Hence, on April 22, 1988, private respondents filed a complaint for forcible entry with preliminary
mandatory injunction against petitioner alleging that the latter by means of strategy and stealth, took
over the physical, actual and material possession of lots 1 and 2 by residing in one of the kubos or
huts bordering the Liputan River and cutting off and/or disposing of the sasa or nipa palms adjacent
thereto.

On January 10, 1989, the trial court rendered its decision dismissing the complaint and finding that
petitioner had been in prior possession of lots 1
and 2.

Private respondents appealed to the Regional Trial Court and on August 8, 1989 it rendered its
decision, the dispositive portion of which reads as follows:

WHEREFORE, this Court renders judgment in favor of the plaintiffs and against
defendant and hereby reverses the decision of the Court a quo. Accordingly, the
defendant is ordered to restore possession of that piece of land particularly described
and defined as Lots 1 & 2 of the land survey conducted by Geodetic Engineer Restituto
Buan on March 2, 1983, together with the sasa or nipa palms planted thereon. No
pronouncement as to attorney's fees. Each party shall bear their respective costs of
the suit.

SO ORDERED. (Rollo, p. 55; Decision, p. 4).

From said decision, petitioner filed with the Court of Appeals a petition for review (Rollo, p. 30; Annex
"A"). On February 28, 1990, the Court of Appeals rendered its decision, the dispositive portion of which
reads as follows:

WHEREFORE, the decision of the court a quo, being consistent with law and
jurisprudence, is hereby AFFIRMED in toto. The instant petition seeking to issue a
restraining order is hereby denied.

SO ORDERED. (Rollo, p. 30; Decision, p. 3).

On November 5, 1990, the Court of Appeals denied the motion for reconsideration filed by petitioner
(Rollo, p. 35; Annex "B").

Hence, this petition.

In its resolution dated May 6, 1991, the Second Division of this court gave due course to the petition
and required both parties to file their respective memoranda (Rollo, p. 93).

The main issues to be resolved in this case are: a) who between the petitioner and private respondents
has prior physical possession of lots 1 and 2; and b) whether or not the disputed lots belong to private
respondents as a result of accretion.

An action for forcible entry is merely a quieting process and actual title to the property is never
determined. A party who can prove prior possession can recover such possession even against the
owner himself. Whatever may be the character of his prior possession, if he has in his favor priority in
time, he has the security that entitles him to remain on the property until he is lawfully ejected by a
person having a better right by accion publiciana or accion reivindicatoria (German Management &
Services, Inc. v. Court of Appeals, G.R. No. 76216, September 14, 1989, 177 SCRA 495, 498, 499).
On the other hand, if a plaintiff cannot prove prior physical possession, he has no right of action for
forcible entry and detainer even if he should be the owner of the property (Lizo v. Carandang, 73 Phil.
469 [1942]).

Hence, the Court of Appeals could not legally restore private respondents' possession over lots 1 and
2 simply because petitioner has clearly proven that he had prior possession over lots 1 and 2.

The evidence on record shows that petitioner was in possession of the questioned lots for more than
50 years. It is undisputed that he was the caretaker of the fishpond owned by the late Don Cosme
Carlos for more than 50 years and that he constructed a nipa hut adjacent to the fishpond and planted
nipa palms therein. This fact is bolstered by the "SINUMPAANG SALAYSAY" executed by Epifanio
Lucero (Records, p. 66), Apolonio D. Morte (Records, p. 101) and Carling Dumalay (Records, p. 103),
all of whom are disinterested parties with no motive to falsify that can be attributed to them, except
their desire to tell the truth.

Moreover, an ocular inspection was conducted by the trial court dated December 2, 1988 which was
attended by the parties and their respective counsels and the court observed the following:

The Court viewed the location and the distance of the constructed nipa hut and the
subject "sasahan" which appears exists (sic) long ago, planted and stands (sic)
adjacent to the fishpond and the dikes which serves (sic) as passage way of water
river of lot 1 and lot 2. During the course of the hearing, both counsel observed
muniment of title embedded on the ground which is located at the inner side of the
"pilapil" separating the fishpond from the subject "sasa" plant with a height of 20 to 25
feet from water level and during the ocular inspection it was judicially observed that
the controversial premises is beyond the titled property of the plaintiffs but situated
along the Liputan, Meycauayan River it being a part of the public domain. (Rollo, p.
51; Decision, p. 12).

On the other hand, private respondents based their claim of possession over lots 1 and 2 simply on
the written agreement signed by petitioner whereby the latter surrendered his rights over the fishpond.

Evidently, the trial court did not err when it ruled that:

An examination of the document signed by the defendant (Exhibit "B"), shows that
what was surrendered to the plaintiffs was the fishpond and not the "sasahan" or the
land on which he constructed his hut where he now lives. That is a completely different
agreement in which a tenant would return a farm or a fishpond to his landlord in return
for the amount that the landlord would pay to him as a disturbance compensation.
 There is nothing that indicates that the tenant was giving other matters not mentioned
in a document like Exhibit "B". Moreover, when the plaintiffs leased the fishpond to Mr.
Carlos de La Cruz there was no mention that the lease included the hut constructed
by the defendant and the nipa palms planted by him (Exhibit "1"), a circumstance that
gives the impression that the nipa hut and the nipa palms were not included in the
lease to Mr. de la Cruz, which may not belong to the plaintiffs. (Rollo, p. 49; Decision,
p. 9).

With regard to the second issue, it must be noted that the disputed lots involved in this case
are not included in Transfer Certificate of Title No. 25618 as per verification made by the Forest
Management Bureau, Department of Environment and Natural Resources. That tract of land situated
at Barrio Liputan, Meycauayan, Bulacan containing an area of 1.1107 hectares as described in the
plan prepared and surveyed by Geodetic Engineer Restituto Buan for Jose Reynante falls within
Alienable and Disposable Land (for fishpond development) under Project No. 15 per B.F.L.C. Map No.
3122 dated May 8, 1987 (Rollo, p. 31; Decision, p. 2).

The respondent Court of Appeals ruled that lots 1 and 2 were created by alluvial formation and hence
the property of private respondents pursuant to Article 457 of the New Civil Code, to wit:

Art. 457. To the owners of lands adjoining the banks of rivers belong the accretion
which they gradually receive from the effects of the current of the waters.

Accretion benefits a riparian owner when the following requisites are present: (1) that the deposit be
gradual and imperceptible; (2) that it resulted from the effects of the current of the water; and (c) that
the land where accretion takes place is adjacent to the bank of a river (Republic v. Court of Appeals,
G.R. No. L-61647, October 12, 1984, 132 SCRA 514, cited in Agustin v. Intermediate Appellate Court,
G.R. Nos. 66075-76, July 5, 1990, 187 SCRA 218).

Granting without conceding that lots 1 and 2 were created by alluvial formation and while it is true that
accretions which the banks of rivers may gradually receive from the effect of the current become the
property of the owner of the banks, such accretion to registered land does not preclude acquisition of
the additional area by another person through prescription.

This Court ruled in the case of Ignacio Grande, et al. v. Hon. Court of Appeals, et al., G.R. No. L-
17652, June 30, 1962, 115 Phil. 521 that:

An accretion does not automatically become registered land just because the lot which
receives such accretion is covered by a Torrens Title. Ownership of a piece of land is
one thing; registration under the Torrens system of that ownership is another.
Ownership over the accretion received by the land adjoining a river is governed by the
Civil Code. Imprescriptibility of registered land is provided in the registration law.
Registration under the Land Registration and Cadastral Act does not vest or give title
to the land, but merely confirms and, thereafter, protects the title already possessed
by the owner, making it imprescriptible by occupation of third parties. But to obtain this
protection, the land must be placed under the operation of the registration laws,
wherein certain judicial procedures have beenprovided.

Assuming private respondents had acquired the alluvial deposit (the lot in question), by accretion, still
their failure to register said accretion for a period of fifty (50) years subjected said accretion to
acquisition through prescription by third persons.
It is undisputed that petitioner has been in possession of the subject lots for more than fifty (50) years
and unless private respondents can show a better title over the subject lots, petitioner's possession
over the property must be respected.

PREMISES CONSIDERED, the decision of the respondent Court of Appeals dated February 28, 1990
is REVERSED and SET ASIDE and the decision of the Municipal Trial Court of Meycauayan, Bulacan,
Branch I, is hereby REINSTATED.

SO ORDERED.
 Republic of the Philippines
SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 168732 June 29, 2007

NATIONAL POWER CORPORATION, petitioner,

vs.
LUCMAN G. IBRAHIM, OMAR G. MARUHOM, ELIAS G.MARUHOM, BUCAY G. MARUHOM,
FAROUK G. MARUHOM, HIDJARA G. MARUHOM, ROCANIA G. MARUHOM, POTRISAM G.
MARUHOM, LUMBA G. MARUHOM, SINAB G. MARUHOM, ACMAD G. MARUHOM, SOLAYMAN
G. MARUHOM, MOHAMAD M. IBRAHIM, and CAIRONESA M. IBRAHIM, respondents.

DECISION

AZCUNA, J.:

This is a petition for review on certiorari under Rule 45 of the Rules of Court seeking to annul the
Decision1 dated June 8, 2005 rendered by the Court of Appeals (CA) in C.A.-G.R. CV No. 57792.

The facts are as follows:

On November 23, 1994, respondent Lucman G. Ibrahim, in his personal capacity and in behalf of his
co-heirs Omar G. Maruhom, Elias G. Maruhom, Bucay G. Maruhom, Mamod G. Maruhom, Farouk G.
Maruhom, Hidjara G. Maruhom, Rocania G. Maruhom, Potrisam G. Maruhom, Lumba G. Maruhom,
Sinab G. Maruhom, Acmad G. Maruhom, Solayman G. Maruhom, Mohamad M. Ibrahim and
Caironesa M. Ibrahim, instituted an action against petitioner National Power Corporation (NAPOCOR)
for recovery of possession of land and damages before the Regional Trial Court (RTC) of Lanao del
Sur.

In their complaint, Ibrahim and his co-heirs claimed that they were owners of several parcels of land
described in Survey Plan FP (VII-5) 2278 consisting of 70,000 square meters, divided into three (3)
lots, i.e. Lots 1, 2, and 3 consisting of 31,894, 14,915, and 23,191 square meters each respectively.
Sometime in 1978, NAPOCOR, through alleged stealth and without respondents’ knowledge and prior
consent, took possession of the sub-terrain area of their lands and constructed therein underground
tunnels. The existence of the tunnels was only discovered sometime in July 1992 by respondents and
then later confirmed on November 13, 1992 by NAPOCOR itself through a memorandum issued by
the latter’s Acting Assistant Project Manager. The tunnels were apparently being used by NAPOCOR
in siphoning the water of Lake Lanao and in the operation of NAPOCOR’s Agus II, III, IV, V, VI, VII
projects located in Saguiran, Lanao del Sur; Nangca and Balo-i in Lanao del Norte; and Ditucalan and
Fuentes in Iligan City.

On September 19, 1992, respondent Omar G. Maruhom requested the Marawi City Water District for
a permit to construct and/or install a motorized deep well in Lot 3 located in Saduc, Marawi City but
his request was turned down because the construction of the deep well would cause danger to lives
and property. On October 7, 1992, respondents demanded that NAPOCOR pay damages and vacate
the sub-terrain portion of their lands but the latter refused to vacate much less pay damages.
Respondents further averred that the construction of the underground tunnels has endangered their
lives and properties as Marawi City lies in an area of local volcanic and tectonic activity. Further, these
illegally constructed tunnels caused them sleepless nights, serious anxiety and shock thereby entitling
them to recover moral damages and that by way of example for the public good, NAPOCOR must be
held liable for exemplary damages.

Disputing respondents’ claim, NAPOCOR filed an answer with counterclaim denying the material
allegations of the complaint and interposing affirmative and special defenses, namely that (1) there is
a failure to state a cause of action since respondents seek possession of the sub-terrain portion when
they were never in possession of the same, (2) respondents have no cause of action because they
failed to show proof that they were the owners of the property, and (3) the tunnels are a government
project for the benefit of all and all private lands are subject to such easement as may be necessary
for the same.2

On August 7, 1996, the RTC rendered a Decision, the decretal portion of which reads as follows:

WHEREFORE, judgment is hereby rendered:

1. Denying plaintiffs’ [private respondents’] prayer for defendant [petitioner] National Power
Corporation to dismantle the underground tunnels constructed between the lands of plaintiffs in Lots
1, 2, and 3 of Survey Plan FP (VII-5) 2278;

2. Ordering defendant to pay to plaintiffs the fair market value of said 70,000 square meters of land
covering Lots 1, 2, and 3 as described in Survey Plan FP (VII-5) 2278 less the area of 21,995 square
meters at ₱1,000.00 per square meter or a total of ₱48,005,000.00 for the remaining unpaid portion
of 48,005 square meters; with 6% interest per annum from the filing of this case until paid;

3. Ordering defendant to pay plaintiffs a reasonable monthly rental of ₱0.68 per square meter of the
total area of 48,005 square meters effective from its occupancy of the foregoing area in 1978 or a total
of ₱7,050,974.40.

4. Ordering defendant to pay plaintiffs the sum of ₱200,000.00 as moral damages; and

5. Ordering defendant to pay the further sum of ₱200,000.00 as attorney’s fees and the costs.

SO ORDERED.3

On August 15, 1996, Ibrahim, joined by his co-heirs, filed an Urgent Motion for Execution of Judgment
Pending Appeal. On the other hand, NAPOCOR filed a Notice of Appeal by registered mail on August
19, 1996. Thereafter, NAPOCOR filed a vigorous opposition to the motion for execution of judgment
pending appeal with a motion for reconsideration of the Decision which it had received on August 9,
1996.

On August 26, 1996, NAPOCOR filed a Manifestation and Motion withdrawing its Notice of Appeal
purposely to give way to the hearing of its motion for reconsideration.

On August 28, 1996, the RTC issued an Order granting execution pending appeal and denying
NAPOCOR’s motion for reconsideration, which Order was received by NAPOCOR on September 6,
1996.

On September 9, 1996, NAPOCOR filed its Notice of Appeal by registered mail which was denied by
the RTC on the ground of having been filed out of time. Meanwhile, the Decision of the RTC was
executed pending appeal and funds of NAPOCOR were garnished by respondents Ibrahim and his
co-heirs.
On October 4, 1996, a Petition for Relief from Judgment was filed by respondents Omar G. Maruhom,
Elias G. Maruhom, Bucay G. Maruhom, Mamod G. Maruhom, Farouk G. Maruhom, Hidjara G.
Maruhom, Potrisam G. Maruhom and Lumba G. Maruhom asserting as follows:

1) they did not file a motion to reconsider or appeal the decision within the reglementary period of
fifteen (15) days from receipt of judgment because they believed in good faith that the decision was
for damages and rentals and attorney’s fees only as prayed for in the complaint:

2) it was only on August 26, 1996 that they learned that the amounts awarded to the plaintiffs
represented not only rentals, damages and attorney’s fees but the greatest portion of which was
payment of just compensation which in effect would make the defendant NPC the owner of the parcels
of land involved in the case;

3) when they learned of the nature of the judgment, the period of appeal has already expired;

4) they were prevented by fraud, mistake, accident, or excusable negligence from taking legal steps
to protect and preserve their rights over their parcels of land in so far as the part of the decision
decreeing just compensation for petitioners’ properties;

5) they would never have agreed to the alienation of their property in favor of anybody, considering
the fact that the parcels of land involved in this case were among the valuable properties they inherited
from their dear father and they would rather see their land crumble to dust than sell it to anybody.4

The RTC granted the petition and rendered a modified judgment dated September 8, 1997, thus:

WHEREFORE, a modified judgment is hereby rendered:

1) Reducing the judgment award of plaintiffs for the fair market value of ₱48,005,000.00 by
9,526,000.00 or for a difference by ₱38,479,000.00 and by the further sum of ₱33,603,500.00 subject
of the execution pending appeal leaving a difference of 4,878,500.00 which may be the subject of
execution upon the finality of this modified judgment with 6% interest per annum from the filing of the
case until paid.

2) Awarding the sum of ₱1,476,911.00 to herein petitioners Omar G. Maruhom, Elias G. Maruhom,
Bucay G. Maruhom, Mahmod G. Maruhom, Farouk G. Maruhom, Hidjara G. Maruhom, Portrisam G.
Maruhom and Lumba G. Maruhom as reasonable rental deductible from the awarded sum of
₱7,050,974.40 pertaining to plaintiffs.

3) Ordering defendant embodied in the August 7, 1996 decision to pay plaintiffs the sum of
₱200,000.00 as moral damages; and further sum of ₱200,000.00 as attorney’s fees and costs.

SO ORDERED.5

Subsequently, both respondent Ibrahim and NAPOCOR appealed to the CA.

In the Decision dated June 8, 2005, the CA set aside the modified judgment and reinstated the original
Decision dated August 7, 1996, amending it further by deleting the award of moral damages and
reducing the amount of rentals and attorney’s fees, thus:

WHEREFORE, premises considered, herein Appeals are hereby partially GRANTED, the Modified
Judgment is ordered SET ASIDE and rendered of no force and effect and the original Decision of the
court a quo dated 7 August 1996 is hereby RESTORED with the MODIFICATION that the award of
moral damages is DELETED and the amounts of rentals and attorney’s fees are REDUCED to
₱6,888,757.40 and ₱50,000.00, respectively.

In this connection, the Clerk of Court of RTC Lanao del Sur is hereby directed to reassess and
determine the additional filing fee that should be paid by Plaintiff-Appellant IBRAHIM taking into
consideration the total amount of damages sought in the complaint vis-à-vis the actual amount of
damages awarded by this Court. Such additional filing fee shall constitute a lien on the judgment.

SO ORDERED.6

Hence, this petition ascribing the following errors to the CA:

(a) RESPONDENTS WERE NOT DENIED THE BENEFICIAL USE OF THEIR SUBJECT
PROPERTIES TO ENTITLE THEM TO JUST COMPENSATION BY WAY OF DAMAGES;

(b) ASSUMING THAT RESPONDENTS ARE ENTITLED TO JUST COMPENSATION BY WAY OF

DAMAGES, NO EVIDENCE WAS PRESENTED ANENT THE VALUATION OF RESPONDENTS’
PROPERTY AT THE TIME OF ITS TAKING IN THE YEAR 1978 TO JUSTIFY THE AWARD OF ONE
THOUSAND SQUARE METERS (₱1000.00/SQ. M.) EVEN AS PAYMENT OF BACK RENTALS IS
ITSELF IMPROPER.

This case revolves around the propriety of paying just compensation to respondents, and, by
extension, the basis for computing the same. The threshold issue of whether respondents are entitled
to just compensation hinges upon who owns the sub-terrain area occupied by petitioner.

Petitioner maintains that the sub-terrain portion where the underground tunnels were constructed does
not belong to respondents because, even conceding the fact that respondents owned the property,
their right to the subsoil of the same does not extend beyond what is necessary to enable them to
obtain all the utility and convenience that such property can normally give. In any case, petitioner
asserts that respondents were still able to use the subject property even with the existence of the
tunnels, citing as an example the fact that one of the respondents, Omar G. Maruhom, had established
his residence on a part of the property. Petitioner concludes that the underground tunnels 115 meters
below respondents’ property could not have caused damage or prejudice to respondents and their
claim to this effect was, therefore, purely conjectural and speculative.7

The contention lacks merit.

Generally, in an appeal by certiorari under Rule 45 of the Rules of Court, the Court does not pass
upon questions of fact. Absent any showing that the trial and appellate courts gravely abused their
discretion, the Court will not examine the evidence introduced by the parties below to determine if they
correctly assessed and evaluated the evidence on record.8 The jurisdiction of the Court in cases
brought to it from the CA is limited to reviewing and revising the errors of law imputed to it, its findings
of fact being as a rule conclusive and binding on the Court.

In the present case, petitioner failed to point to any evidence demonstrating grave abuse of discretion
on the part of the CA or to any other circumstances which would call for the application of the
exceptions to the above rule. Consequently, the CA’s findings which upheld those of the trial court that
respondents owned and possessed the property and that its substrata was possessed by petitioner
since 1978 for the underground tunnels, cannot be disturbed. Moreover, the Court sustains the finding
of the lower courts that the sub-terrain portion of the property similarly belongs to respondents. This
conclusion is drawn from Article 437 of the Civil Code which provides:
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. In Republic of
the Philippines v. Court of Appeals,9 this principle was applied to show that rights over lands are
indivisible and, consequently, require a definitive and categorical classification, thus:

The Court of Appeals justified this by saying there is "no conflict of interest" between the owners of
the surface rights and the owners of the sub-surface rights. This is rather strange doctrine, for it is a
well-known principle that the owner of a piece of land has rights not only to its surface but also to
everything underneath and the airspace above it up to a reasonable height. Under the aforesaid ruling,
the land is classified as mineral underneath and agricultural on the surface, subject to separate claims
of title. This is also difficult to understand, especially in its practical application.

Under the theory of the respondent court, the surface owner will be planting on the land while the
mining locator will be boring tunnels underneath. The farmer cannot dig a well because he may
interfere with the mining operations below and the miner cannot blast a tunnel lest he destroy the
crops above. How deep can the farmer, and how high can the miner go without encroaching on each
others rights? Where is the dividing line between the surface and the sub-surface rights?

The Court feels that the rights over the land are indivisible and that the land itself cannot be half
agricultural and half mineral. The classification must be categorical; the land must be either completely
mineral or completely agricultural.

Registered landowners may even be ousted of ownership and possession of their properties in the
event the latter are reclassified as mineral lands because real properties are characteristically
indivisible. For the loss sustained by such owners, they are entitled to just compensation under the
Mining Laws or in appropriate expropriation proceedings.10

Moreover, petitioner’s argument that the landowners’ right extends to the sub-soil insofar as necessary
for their practical interests serves only to further weaken its case. The theory would limit the right to
the sub-soil 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.11

In this regard, the trial court found that respondents could have dug upon their property motorized
deep wells but were prevented from doing so by the authorities precisely because of the construction
and existence of the tunnels underneath the surface of their property. Respondents, therefore, still had
a legal interest in the sub-terrain portion insofar as they could have excavated the same for the
construction of the deep well. The fact that they could not was appreciated by the RTC as proof that
the tunnels interfered with respondents’ enjoyment of their property and deprived them of its full use
and enjoyment, thus:

Has it deprived the plaintiffs of the use of their lands when from the evidence they have already existing
residential houses over said tunnels and it was not shown that the tunnels either destroyed said
houses or disturb[ed] the possession thereof by plaintiffs? From the evidence, an affirmative answer
seems to be in order. The plaintiffs and [their] co-heirs discovered [these] big underground tunnels in
1992. This was confirmed by the defendant on November 13, 1992 by the Acting Assistant Project
Manager, Agus 1 Hydro Electric Project (Exh. K). On September 16, 1992, Atty. Omar Maruhom (co-
heir) requested the Marawi City Water District for permit to construct a motorized deep well over Lot 3
for his residential house (Exh. Q). He was refused the permit "because the construction of the deep
well as (sic) the parcels of land will cause danger to lives and property." He was informed that "beneath
your lands are constructed the Napocor underground tunnel in connection with Agua Hydroelectric
plant" (Exh. Q-2). There in fact exists ample evidence that this construction of the tunnel without the
prior consent of plaintiffs beneath the latter’s property endangered the lives and properties of said
plaintiffs. It has been proved indubitably that Marawi City lies in an area of local volcanic and tectonic
activity. Lake Lanao has been formed by extensive earth movements and is considered to be a
drowned basin of volcano/tectonic origin. In Marawi City, there are a number of former volcanoes and
an extensive amount of faulting. Some of these faults are still moving. (Feasibility Report on Marawi
City Water District by Kampsa-Kruger, Consulting Engineers, Architects and Economists, Exh. R).
Moreover, it has been shown that the underground tunnels [have] deprived the plaintiffs of the lawful
use of the land and considerably reduced its value. On March 6, 1995, plaintiffs applied for a two-
million peso loan with the Amanah Islamic Bank for the expansion of the operation of the Ameer
Construction and Integrated Services to be secured by said land (Exh. N), but the application was
disapproved by the bank in its letter of April 25, 1995 (Exh. O) stating that:

"Apropos to this, we regret to inform you that we cannot consider your loan application due to the
following reasons, to wit:

That per my actual ocular inspection and verification, subject property offered as collateral has an
existing underground tunnel by the NPC for the Agus I Project, which tunnel is traversing underneath
your property, hence, an encumbrance. As a matter of bank policy, property with an existing
encumbrance cannot be considered neither accepted as collateral for a loan."

All the foregoing evidence and findings convince this Court that preponderantly plaintiffs have
established the condemnation of their land covering an area of 48,005 sq. meters located at Saduc,
Marawi City by the defendant National Power Corporation without even the benefit of expropriation
proceedings or the payment of any just compensation and/or reasonable monthly rental since 1978.12

In the past, the Court has held that if the government takes property without expropriation and devotes
the property to public use, after many years, the property owner may demand payment of just
compensation in the event restoration of possession is neither convenient nor feasible.13 This is in
accordance with the principle that persons shall not be deprived of their property except by competent
authority and for public use and always upon payment of just compensation.14

Petitioner contends that the underground tunnels in this case constitute an easement upon the
property of respondents which does not involve any loss of title or possession. The manner in which
the easement was created by petitioner, however, violates the due process rights of respondents as
it was without notice and indemnity to them and did not go through proper expropriation proceedings.
Petitioner could have, at any time, validly exercised the power of eminent domain to acquire the
easement over respondents’ property as this power encompasses not only the taking or appropriation
of title to and possession of the expropriated property but likewise covers even the imposition of a
mere burden upon the owner of the condemned property.15 Significantly, though, landowners cannot
be deprived of their right over their land until expropriation proceedings are instituted in court. The
court must then see to it that the taking is for public use, that there is payment of just compensation
and that there is due process of law.16

In disregarding this procedure and failing to recognize respondents’ ownership of the sub-terrain
portion, petitioner took a risk and exposed itself to greater liability with the passage of time. It must be
emphasized that the acquisition of the easement is not without expense. The underground tunnels
impose limitations on respondents’ use of the property for an indefinite period and deprive them of its
ordinary use. Based upon the foregoing, respondents are clearly entitled to the payment of just
compensation.17 Notwithstanding the fact that petitioner only occupies the sub-terrain portion, it is
liable to pay not merely an easement fee but rather the full compensation for land. This is so because
in this case, the nature of the easement practically deprives the owners of its normal beneficial use.
Respondents, as the owners of the property thus expropriated, are entitled to a just compensation
which should be neither more nor less, whenever it is possible to make the assessment, than the
money equivalent of said property.18

The entitlement of respondents to just compensation having been settled, the issue now is on the
manner of computing the same. In this regard, petitioner claims that the basis for the computation of
the just compensation should be the value of the property at the time it was taken in 1978. Petitioner
also impugns the reliance made by the CA upon National Power Corporation v. Court of Appeals and
Macapanton Mangondato19 as the basis for computing the amount of just compensation in this action.
The CA found that "the award of damages is not excessive because the ₱1000 per square meter as
the fair market value was sustained in a case involving a lot adjoining the property in question which
case involved an expropriation by [petitioner] of portion of Lot 1 of the subdivision plan (LRC) PSD
116159 which is adjacent to Lots 2 and 3 of the same subdivision plan which is the subject of the
instant controversy."20

Just compensation has been understood to be the just and complete equivalent of the loss 21 and is
ordinarily determined by referring to the value of the land and its character at the time it was taken by
the expropriating authority.22 There is a "taking" in this sense when the owners are actually deprived
or dispossessed of their property, where there is a practical destruction or a material impairment of
the value of their property, or when they are deprived of the ordinary use thereof. There is a "taking"
in this context when the expropriator enters private property not only for a momentary period but for
more permanent duration, for the purpose of devoting the property to a public use in such a manner
as to oust the owner and deprive him of all beneficial enjoyment thereof.23Moreover, "taking" of the
property for purposes of eminent domain entails that the entry into the property must be under warrant
or color of legal authority.24

Under the factual backdrop of this case, the last element of taking mentioned, i.e., that the entry into
the property is under warrant or color of legal authority, is patently lacking. Petitioner justified its
nonpayment of the indemnity due respondents upon its mistaken belief that the property formed part
of the public dominion.

This situation is on all fours with that in the Mangondato case. NAPOCOR in that case took the property
of therein respondents in 1979, using it to build its Aqua I Hydroelectric Plant Project, without paying
any compensation, allegedly under the mistaken belief that it was public land. It was only in 1990, after
more than a decade of beneficial use, that NAPOCOR recognized therein respondents’ ownership and
negotiated for the voluntary purchase of the property.

In Mangondato, this Court held:

The First Issue: Date of Taking or Date of Suit?

The general rule in determining "just compensation" in eminent domain is the value of the property as
of the date of the filing of the complaint, as follows:

"Sec. 4. Order of Condemnation. When such a motion is overruled or when any party fails to defend
as required by this rule, the court may enter an order of condemnation declaring that the plaintiff has
a lawful right to take the property sought to be condemned, for the public use or purpose described in
the complaint, upon the payment of just compensation to be determined as of the date of the filing of
the complaint. x x x" (Italics supplied).

Normally, the time of the taking coincides with the filing of the complaint for expropriation. Hence,
many ruling of this Court have equated just compensation with the value of the property as of the time
of filing of the complaint consistent with the above provision of the Rules. So too, where the institution
of the action precedes entry to the property, the just compensation is to be ascertained as of the time
of filing of the complaint.

The general rule, however, admits of an exception: where this Court fixed the value of the property as
of the date it was taken and not the date of the commencement of the expropriation proceedings.

In the old case of Provincial Government of Rizal vs. Caro de Araullo, the Court ruled that "x x x the
owners of the land have no right to recover damages for this unearned increment resulting from the
construction of the public improvement (lengthening of Taft Avenue from Manila to Pasay) from which
the land was taken. To permit them to do so would be to allow them to recover more than the value of
the land at the time it was taken, which is the true measure of the damages, or just compensation, and
would discourage the construction of important public improvements."

In subsequent cases, the Court, following the above doctrine, invariably held that the time of taking is
the critical date in determining lawful or just compensation. Justifying this stance, Mr. Justice (later
Chief Justice) Enrique Fernando, speaking for the Court in Municipality of La Carlota vs. The Spouses
Felicidad Baltazar and Vicente Gan, said, "x x x the owner as is the constitutional intent, is paid what
he is entitled to according to the value of the property so devoted to public use as of the date of taking.
From that time, he had been deprived thereof. He had no choice but to submit. He is not, however, to
be despoiled of such a right. No less than the fundamental law guarantees just compensation. It would
be injustice to him certainly if from such a period, he could not recover the value of what was lost.
There could be on the other hand, injustice to the expropriator if by a delay in the collection, the
increment in price would accrue to the owner. The doctrine to which this Court has been committed is
intended precisely to avoid either contingency fraught with unfairness."

Simply stated, the exception finds the application where the owner would be given undue incremental
advantages arising from the use to which the government devotes the property expropriated -- as for
instance, the extension of a main thoroughfare as was in the case in Caro de Araullo. In the instant
case, however, it is difficult to conceive of how there could have been an extra-ordinary increase in
the value of the owner’s land arising from the expropriation, as indeed the records do not show any
evidence that the valuation of P1,000.00 reached in 1992 was due to increments directly caused by
petitioner’s use of the land. Since the petitioner is claiming an exception to Rule 67, Section 4, it has
the burden in proving its claim that its occupancy and use -- not ordinary inflation and increase in land
values -- was the direct cause of the increase in valuation from 1978 to 1992.

Side Issue: When is there "Taking" of Property?

But there is yet another cogent reason why this petition should be denied and why the respondent
Court should be sustained. An examination of the undisputed factual environment would show that the
"taking" was not really made in 1978.

This Court has defined the elements of "taking" as the main ingredient in the exercise of power of
eminent domain, in the following words:

"A number of circumstances must be present in "taking" of property for purposes of eminent domain:
(1) the expropriator must enter a private property; (2) the entrance into private property must be for
more than a momentary period; (3) the entry into the property should be under warrant or color of legal
authority; (4) the property must be devoted to a public use or otherwise informally appropriated or
injuriously affected; and (5) the utilization of the property for public use must be in such a way to oust
the owner and deprive him of all beneficial enjoyment of the property."(Italics supplied)

In this case, the petitioner’s entrance in 1978 was without intent to expropriate or was not made under
warrant or color of legal authority, for it believed the property was public land covered by Proclamation
No. 1354. When the private respondent raised his claim of ownership sometime in 1979, the petitioner
flatly refused the claim for compensation, nakedly insisted that the property was public land and
wrongly justified its possession by alleging it had already paid "financial assistance" to Marawi City in
exchange for the rights over the property. Only in 1990, after more than a decade of beneficial use,
did the petitioner recognize private respondent’s ownership and negotiate for the voluntary purchase
of the property. A Deed of Sale with provisional payment and subject to negotiations for the correct
price was then executed. Clearly, this is not the intent nor the expropriation contemplated by law. This
is a simple attempt at a voluntary purchase and sale. Obviously, the petitioner neglected and/or
refused to exercise the power of eminent domain.

Only in 1992, after the private respondent sued to recover possession and petitioner filed its Complaint
to expropriate, did petitioner manifest its intention to exercise the power of eminent domain. Thus the
respondent Court correctly held:

"If We decree that the fair market value of the land be determined as of 1978, then We would be
sanctioning a deceptive scheme whereby NAPOCOR, for any reason other than for eminent domain
would occupy another’s property and when later pressed for payment, first negotiate for a low price
and then conveniently expropriate the property when the land owner refuses to accept its offer claiming
that the taking of the property for the purpose of the eminent domain should be reckoned as of the
date when it started to occupy the property and that the value of the property should be computed as
of the date of the taking despite the increase in the meantime in the value of the property."

In Noble vs. City of Manila, the City entered into a lease-purchase agreement of a building constructed
by the petitioner’s predecessor-in-interest in accordance with the specifications of the former. The
Court held that being bound by the said contract, the City could not expropriate the building.
Expropriation could be resorted to "only when it is made necessary by the opposition of the owner to
the sale or by the lack of any agreement as to the price." Said the Court:

"The contract, therefore, in so far as it refers to the purchase of the building, as we have interpreted it,
is in force, not having been revoked by the parties or by judicial decision. This being the case, the city
being bound to buy the building at an agreed price, under a valid and subsisting contract, and the
plaintiff being agreeable to its sale, the expropriation thereof, as sought by the defendant, is baseless.
Expropriation lies only when it is made necessary by the opposition of the owner to the sale or by the
lack of any agreement as to the price. There being in the present case a valid and subsisting contract,
between the owner of the building and the city, for the purchase thereof at an agreed price, there is
no reason for the expropriation." (Italics supplied)

In the instant case, petitioner effectively repudiated the deed of sale it entered into with the private
respondent when it passed Resolution No. 92-121 on May 25, 1992 authorizing its president to
negotiate, inter alia, that payment "shall be effective only after Agus I HE project has been placed in
operation." It was only then that petitioner’s intent to expropriate became manifest as private
respondent disagreed and, barely a month, filed suit.25

In the present case, to allow petitioner to use the date it constructed the tunnels as the date of valuation
would be grossly unfair. First, it did not enter the land under warrant or color of legal authority or with
intent to expropriate the same. In fact, it did not bother to notify the owners and wrongly assumed it
had the right to dig those tunnels under their property. Secondly, the "improvements" introduced by
petitioner, namely, the tunnels, in no way contributed to an increase in the value of the land. The trial
court, therefore, as affirmed by the CA, rightly computed the valuation of the property as of 1992, when
respondents discovered the construction of the huge underground tunnels beneath their lands and
petitioner confirmed the same and started negotiations for their purchase but no agreement could be
reached.26

As to the amount of the valuation, the RTC and the CA both used as basis the value of the adjacent
property, Lot 1 (the property involved herein being Lots 2 and 3 of the same subdivision plan), which
was valued at ₱1,000 per sq. meter as of 1990, as sustained by this Court in Mangondato, thus:

The Second Issue: Valuation

We now come to the issue of valuation.

The fair market value as held by the respondent Court, is the amount of ₱1,000.00 per square meter.
In an expropriation case where the principal issue is the determination of just compensation, as is the
case here, a trial before Commissioners is indispensable to allow the parties to present evidence on
the issue of just compensation. Inasmuch as the determination of just compensation in eminent
domain cases is a judicial function and factual findings of the Court of Appeals are conclusive on the
parties and reviewable only when the case falls within the recognized exceptions, which is not the
situation obtaining in this petition, we see no reason to disturb the factual findings as to valuation of
the subject property. As can be gleaned from the records, the court-and-the-parties-appointed
commissioners did not abuse their authority in evaluating the evidence submitted to them nor
misappreciate the clear preponderance of evidence. The amount fixed and agreed to by the
respondent appellate Court is not grossly exorbitant. To quote:

"Commissioner Ali comes from the Office of the Register of Deeds who may well be considered an
expert, with a general knowledge of the appraisal of real estate and the prevailing prices of land in the
vicinity of the land in question so that his opinion on the valuation of the property cannot be lightly
brushed aside.

"The prevailing market value of the land is only one of the determinants used by the commissioners’
report the other being as herein shown:

xxx

xxx

"Commissioner Doromal’s report, recommending P300.00 per square meter, differs from the 2
commissioners only because his report was based on the valuation as of 1978 by the City Appraisal
Committee as clarified by the latter’s chairman in response to NAPOCOR’s general counsel’s query."

In sum, we agree with the Court of Appeals that petitioner has failed to show why it should be granted
an exemption from the general rule in determining just compensation provided under Section 4 of Rule
67. On the contrary, private respondent has convinced us that, indeed, such general rule should in
fact be observed in this case.27

Petitioner has not shown any error on the part of the CA in reaching such a valuation. Furthermore,
these are factual matters that are not within the ambit of the present review.
WHEREFORE, the petition is DENIED and the Decision of the Court of Appeals in C.A.-G.R. CV No.
57792 dated June 8, 2005 is AFFIRMED.

No costs.

SO ORDERED.
 Right to Hidden Treasure
Republic of the Philippines
SUPREME COURT
Manila

EN BANC

A.M. No. P-07-2399 June 18, 2008

(Formerly OCA IPI No. 06-2390-P)

EDNA PALERO-TAN, complainant,

vs.
CIRIACO I. URDANETA, JR., UTILITY WORKER I, RTC, BRANCH 14, BAYBAY,
LEYTE, respondent.

RESOLUTION

CHICO-NAZARIO, J.:

In the instant administrative complaint,1 Edna Palero-Tan (complainant), Court Stenographer III of the
Regional Trial Court (RTC), Branch 14, Baybay, Leyte, charged Ciriaco I. Urdaneta, Jr. (respondent),
Utility Worker I of the same court, with Conduct Unbecoming a Court Personnel, for stealing her ring
and bracelet.

Complainant claimed that it has been her practice to keep her and her sister’s pieces of jewelry in the
locked drawer of her table at her RTC office because she fears that they might be lost at the boarding
house she is renting. However, on 8 July 2005, she discovered that her ring and bracelet worth fifteen
thousand pesos (P15,000.00) were missing. Complainant remembered that on 18 June 2005, a
Saturday, her younger sister went to the RTC to ask for her necklace. Complainant took out from her
table drawer a transparent plastic sachet which contained her ring and bracelet, and her sister’s
necklace, and after handing over to her sister the necklace, she returned the plastic sachet, still
containing the bracelet and ring, to her table drawer. She maintained that the only person who was
present and saw her take out the jewelry from her table drawer was respondent, whose table is
adjacent to hers.

According to complainant, when she found out that her ring and bracelet were missing, she informed
her officemates about it, but nobody claimed to have seen the missing jewelry. On 28 July 2005, an
officemate, Anecito D. Altone (Altone), confided to her that he heard from his landlady, Anastacia R.
Nable (Nable), that respondent and his wife, Milagros, had a quarrel because the latter discovered a
ring and a bracelet in respondent’s coin purse. Milagros suspected that respondent bought the jewelry
for his mistress. Complainant approached the RTC presiding judge, Judge Absalon U. Fulache (Judge
Fulache), and relayed to him the information she gathered. Judge Fulache advised her to invite Nable
and Milagros to his chambers so he could confirm the information.

Milagros admitted to Judge Fulache that she and respondent had a fight because she found a ring
and bracelet inside respondent’s coin purse which she believed he would give to his mistress.
Complainant was certain that the jewels Milagros saw in respondent’s purse were hers based on
Milagros’s description of the said ring and bracelet. In a separate meeting with Judge Fulache,
respondent confessed that he found complainant’s jewels in the court’s premises, but he could no
longer return them because he already threw them away.
In his Comment2 dated 1 April 2006, respondent denied that he stole complainant’s jewelry. He
claimed, instead, that in the afternoon of 29 June 2005, a Friday, he found a small plastic sachet
containing a ring and a bracelet under his table, at the side nearest the adjacent table of the
complainant, and thinking that the jewelry belonged to one of the litigants who approached him that
morning, he took them for safekeeping with the intention of returning them to whoever was the owner.
He thought that the ring and bracelet were "fancy" jewelry as they were merely placed in an ordinary
plastic sachet. When nobody claimed the jewelry, he placed them inside his coin purse and took them
home. However, his wife, on 30 June 2005, found them and accused him of buying the pieces of
jewelry for his mistress, and to stop his wife’s nagging, he threw the pieces of jewelry at a grassy lot
beside their house. When he was summoned by Judge Fulache and was ordered to return the jewels,
he and his son searched for the same but they failed to find them. Respondent begs for leniency from
this Court as he insists that he had no intention of appropriating the jewelry for himself, and presents
for consideration of this Court that he is already sixty-one (61) years old and has been in the
government service for twenty-seven (27) years.

In a Resolution3 dated 20 September 2006, the Court referred the matter to Judge Francisco C.
Gedorio, Jr., then Executive Judge, RTC, Ormoc City, for investigation, report and recommendation,
who in turn, directed4 Atty. Erwin James B. Fabriga (Atty. Fabriaga), Clerk of Court, RTC, Branch 12,
Ormoc City, to conduct the investigation.

On 2 March 2007, Judge Apolinario M. Buaya, Acting Executive Judge, RTC, Ormoc City, submitted
to the Court Atty. Fabriga’s investigation report and recommendation dated 15 November 2006. Atty.
Fabriga found respondent liable for Conduct Unbecoming a Court Personnel. According to Atty.
Fabriga, respondent’s wife Milagros testified during the investigation that she indeed saw a ring and a
bracelet in her husband’s purse which caused their quarrel.

Atty. Fabriga found respondent’s actions inconsistent with his claim that he had no intention to take
the jewelry for his personal gain. For reasons only known to him, respondent never bothered to inform
his officemates about the jewelry placed in a plastic sachet that he allegedly found under his table "at
the side nearest to the adjacent table of the complainant." It was only on 2 or 3 August 2005, or more
than a month after respondent found the jewelry, when he acknowledged before Judge Fulache that
he possessed the jewelry. Even when the complainant was announcing to the rest of the office staff
the loss of her jewelry, respondent pretended to hear nothing. Were it not for the scandal brought
about by his wife’s discovery of the missing jewelry, respondent would not have admitted to Judge
Fulache that he had found the same. According to Atty. Fabriga, all of respondent’s acts indicate that
he had no intention to return the pieces of jewelry to complainant.

On 4 June 2007, we noted the Report and Recommendation of Atty. Fabriga and referred the case to
the Office of the Court Administrator (OCA), for evaluation, report and recommendation within sixty
(60) days from notice.5

On 26 September 2007, the OCA submitted its report,6 with the following recommendation –

PREMISES CONSIDERED, this Office respectfully recommends to the Honorable Court that:

1. This matter be FORMALLY DOCKETED as an administrative complaint against Ciriaco I.

Urdaneta, Jr., Utility Worker I, RTC, Branch 14, Baybay, Leyte;

2. Ciriaco I. Urdaneta, Jr., be FINED in the amount of Thirty Thousand Pesos (P30,000.00) to
be deducted from his retirement benefits; and
 3. The Financial Management Office, OCA be DIRECTED to release the remaining amount of
the retirement benefits to Ciriaco I. Urdaneta, Jr.

On 12 November 2007, the Court required7 the parties to manifest within 10 days from notice if they
were willing to submit the matter for resolution based on the pleadings filed.

On 12 December 2007, respondent submitted his Manifestation8 stating that he was submitting the
case for resolution based on the pleadings filed. Complainant filed a similar Manifestation 9 on 8
January 2008.

Resultantly, the case was submitted for decision based on the pleadings filed.

After a careful study, and with due regard for the facts of the case and the pleadings submitted by the
parties, the Court agrees in the conclusion reached by the Investigating Attorney. Despite all the
opportunities accorded to respondent to present substantial defense to refute the charges against him,
he failed to do so. Respondent even admitted finding the small plastic sachet containing complainant’s
ring and bracelet on 29 June 2005, and keeping the jewelry in his possession until he purportedly
threw them away. Respondent testified thus:

A: x x x My specific duty there in Court as Aide or Utility was to clean the office at 4:00
o’clock. By 4:00 o’clock in the afternoon, nobody was around anymore. So, I emptied the trash
cans and while doing so, I noticed something that is placed in a plastic. I thought it was owned
by my client who might have dropped it because there are clients in the morning of that day.
Before throwing that plastic sachet to the thrash can, I placed that plastic sachet on top of my
table and waited for somebody to claim it.

Q: What time did you notice that there was plastic sachet containing…?

A: 4:00 o’clock, sir.

Q: What did you do?

A: I placed it on my table, sir.

Q: You placed it [on] your table?

A: Yes, on top of my table and I waited for anybody to claim it.

Q: Who is around?

A: There was only one stenographer who was left in the office, Emma Andres.

xxxx

A: Yes, sir, that Friday at 4:00 o’clock in the afternoon. By 5:00 o’clock in the afternoon I
placed it inside my coin purse after I punched out my Time Card.

Q: After that, you left the office. What did you do?

A: I went home, sir.

Q: You admit now that you brought along with you that plastic sachet containing that
pieces of jewelries?

A: Yes, sir. Since nobody claimed it, I placed it inside my coin purse.

Q: When did you see that plastic sachet? You said a while a go you saw a plastic sachet on
the floor while you were cleaning?

A: Yes, sir.

Q. When did you see that plastic sachet?

A: June 29, 2005.

Q: It was Friday?

A: Yes, sir.

Q: And then you went home?

A: Yes, sir.

Q: And then the following morning, what did you do?

A: I did nothing.

Q: Did you report for work on Monday?

A: Yes, sir.

Q: Did you ever tell you [r] co-employees about what you found those pieces of jewelries?

A: No, sir.

xxxx

A: x x x However, I told Judge Fulache in reply that the items are gone because I have
thrown them away.

Q: So, you admit before this hearing officer under oath that you had a quarrel with your wife
or your wife nagged you about the jewelries?

A: Yes, sir.

Q: Because your wife suspected you of buying those jewelries as a gift to your girlfriend?

A: Yes, sir. That was her suspicion.

Q: So, you admit that you had a quarrel with your wife?
 A: Yes, sir.

Q: First, you admit that you had the jewelries in your possession?

A: Yes, sir.

Q: Second, you admit that your wife quarreled with you because of those pieces of
jewelries because she suspected you of having another girlfriend?

A: Yes, sir.

Q: With that, you still did not announce to your co-employees about the loss of jewelries?

A: No, sir, because nobody is complaining and besides I have already thrown them
away.10 (Emphasis supplied.)

Given respondent’s afore-quoted admission to having found the jewelry and keeping it in his
possession without informing his officemates about the same, plus the positive evidence submitted by
complainant, respondent’s bare denial of any personal interest in the jewelry cannot be given
credence.

It is settled that denial is inherently a weak defense. To be believed, it must be buttressed by a strong
evidence of non-culpability; otherwise, such denial is purely self-serving and is with nil evidentiary
value. Like the defense of alibi, a denial crumbles in the light of positive declarations.11

Worth stressing is the well-entrenched principle that in administrative proceedings, such as the instant
case, the quantum of proof necessary for a finding of guilt is only substantial evidence. Substantial
evidence has been defined as such relevant evidence as a reasonable mind might accept as adequate
to support a conclusion.12

Although there is no direct evidence that would show that respondent stole complainant’s ring and
bracelet, nonetheless, respondent is not immaculately innocent as regards the loss of the same.
Antone, an officemate of both respondent and complainant, testified that he found out from his landlady
that respondent and his wife fought over a ring and a bracelet, which Antone suspected, belonged to
complainant. Pertinent portions of Antone’s testimony are reproduced below:

MR. ANTONE:

Yes, sir. I am staying with Mrs. Anastacia Nable, while I was having lunch on July 27,
2005, Mrs. Nable was telling me that Mila [respondent’s wife] and Junior [respondent]
were quarreling because this Mila saw from the wallet of Junior a ring and a bracelet.
Mrs. Nable and Mila Urdaneta [respondent’s wife] are sisters in a Catholic Community
and they used to visit each other in their respective homes.

ATTY. FABRIGA:

Q: You said in your affidavit that you inquired from this Anstacia Nable if Ciriaco
Urdaneta Jr. [respondent] and his wife were still quarreling. Why? Do you know that
they are always quarreling?

A: Yes, sir.
 Q: Why? Do you know that they are always quarreling?

A: Yes, sir.

Q: Why do you know that they are always quarreling?

A: Because Mrs. Nable told me that the reason for their quarrel is about that ring and
bracelet.

Q: But when you asked this Anastacia Nable that question, you already have in your mind
or you already suspected Ciriaco Urdaneta, Jr. [respondent] as being the one who took over
the jewelries?

A: Yes, sir, because I heard from Edna [complainant] about her lost jewelries last June 2005,
so, it occurred to my mind that it is really true that the ring and the bracelet were with Junior.13

Respondent and his wife Mila confirmed that they indeed had a quarrel over a ring and a bracelet
which respondent found in his RTC office. These declarations constitute substantial evidence required
in administrative proceedings. The Court finds its mind at ease that the collective and combined weight
of the unbroken chain of hard and solid facts, indubitably established by trustworthy and reliable
evidence offered by the complainant, unerringly and inevitably points to but one natural and rational
conclusion: that the respondent found complainant’s jewels and, dishonestly and in bad faith, kept
them for himself.

Respondent claimed that he found the jewelry on 29 June 2005 under his table, at the side nearest
complainant’s table. On 30 June 2005, respondent and his wife had a quarrel about the said pieces of
jewelry.14 On 8 July 2005, complainant was already looking for her ring and bracelet, and was asking
everyone at their office if they had found the said jewelry; and yet, respondent did not speak out even
though he already found a ring and a bracelet in their office. It was only on 2 August 2005, when RTC
Presiding Judge Fulache confronted him with the fact that his wife had already disclosed that she
found a ring and a bracelet inside his coin purse that respondent admitted finding the jewelry. His
indifferent attitude and failure to inform his officemates and his wife at the soonest time that he found
the jewelry is not only improper, but highly suspicious. His allegation that he had no opportunity to
inform complainant and their officemates about the jewels since he had already thrown them away
after a quarrel with his wife over the same, is lame and hardly persuasive. It is equally suspicious, and
not in accord with ordinary human experience, for respondent to outrightly conclude that the jewels
were owned by a litigant who had a matter pending before the RTC; and not by one of his officemates,
most especially complainant, who was seated next to him.

When a person who finds a thing that has been lost or mislaid by the owner takes the thing into his
hands, he acquires physical custody only and does not become vested with legal possession. In
assuming such custody, the finder is charged with the obligation of restoring the thing to its owner. It
is thus respondent’s duty to report to his superior or his officemates that he found something. The Civil
Code, in Article 719, explicitly requires the finder of a lost property to report it to the proper authorities,
thus:

Article 719. Whoever finds a movable, which is not treasure, must return it to its previous
possessor. If the latter is unknown, the finder shall immediately deposit it with the mayor of the
city or municipality where the finding has taken place.

The finding shall be publicly announced by the mayor for two consecutive weeks in the way
he deems best.
 If the movables cannot be kept without deterioration, or without the expenses which
considerably diminish its value, it shall be sold at public auction eight days after the publication.

Six months from the publication having elapsed without the owner having appeared, the thing
found, or its value, shall be awarded to the finder. The finder and the owner shall be obliged,
as the case may be, to reimburse the expenses.

Contrary to respondent’s claim, this Court is convinced that respondent had the intention to appropriate
the jewelry to himself had these not been discovered by his wife. His claim that the ring and bracelet
were worthless "fancy" jewelry is immaterial because the basis for his liability is his act of taking
something which does not belong to him.

By admittedly finding complainant’s ring and bracelet without returning them to the rightful owner,
respondent blatantly degraded the judiciary and diminished the respect and regard of the people for
the court and its personnel. Every employee of the judiciary should be an example of integrity, morality
and honesty. Like any other public servant, respondent must exhibit the highest sense of
trustworthiness and rectitude not only in the performance of his official duties but also in his personal
and private dealings with other people, to preserve the court’s good name and standing as a true
temple of justice. It cannot be overstressed that the image of a court of justice is mirrored in the
conduct, official and otherwise, of the personnel who work there, from the judge to the lowest
employee.

The Court has emphasized, time and again, that the conduct of every one connected with an office
charged with the dispensation of justice, from the presiding judge to the lowliest clerk, should be
circumscribed with the heavy burden of responsibility. Every employee of the judiciary should be an
example of integrity, uprightness and honesty. Even a court janitor is as duty-bound to serve with the
highest degree of responsibility as all other public officers. Those who work in the judiciary must
adhere to high ethical standards to preserve the court’s good name and standing. They should be
examples of responsibility, competence and efficiency, and they must discharge their duties with due
care and utmost diligence since they are officers of the court and agents of the law. Indeed, any
conduct, act or omission on the part of those who would violate the norm of public accountability and
diminish or even just tend to diminish the faith of the people in the judiciary shall not be
countenanced.15 The conduct required of court personnel, from the presiding judge to the lowliest
clerk, must always be beyond reproach and circumscribed with a heavy burden of responsibility. As
forerunners in the administration of justice, they ought to live up to the strictest standards of honesty
and integrity, considering that their positions primarily involve service to the public.16

Misconduct is a transgression of some established and definite rule of action, a forbidden act, a
dereliction of duty, an unlawful behavior willful in character, an improper or wrong behavior,17 while
"gross" has been defined as "out of all measure; beyond allowance; flagrant; shameful; such conduct
as is not to be excused."18 Gross misconduct has been defined as the transgression of some
established or definite rule of action, more particularly, unlawful behavior or gross negligence.19

Pursuant to Section 23, Rule XIV of the Omnibus Rules Implementing Book V of Executive Order 292,
Grave Misconduct, being in the nature of grave offenses, carries the extreme penalty of dismissal from
the service with forfeiture of retirement benefits except accrued leave credits, and perpetual
disqualification from re-employment in government service.20

In Court Administrator v. Sevillo,21 the Court held that the act of stealing mail matter committed by
respondent, a process server in the 16th MCTC, Jordan-Buenavista-Nueva Valencia, Guimaras,
constituted "grave dishonesty and grave misconduct or conduct prejudicial to the best interest of the
service." The Court, in said case, ordered the dismissal of Sevillo.
Hence, for failure to live up to the high ethical standards expected of court employees, respondent
should likewise be dismissed.

However, it is an undeniable fact that respondent has rendered some years of commendable service
in the judiciary. Respondent has been with the judiciary for twenty-three (23) years and this is the only
administrative case filed against him. Records also show that respondent had availed himself of
optional retirement which became effective on 30 November 2006, and his retirement benefits were
withheld pending the outcome of the instant administrative complaint. Considering the foregoing and
for humanitarian reasons, the Court finds a fine of thirty thousand pesos (P30,000.00) to be an
appropriate penalty for respondent, to be deducted from his retirement benefits.

WHEREFORE, this Court finds respondent Ciriaco I. Urdaneta, Jr., GUILTY of Grave Misconduct, and
hereby imposes on said respondent a fine of thirty thousand pesos (P30,000.00), to be deducted from
his retirement benefits. The Financial Management Office of the Office of the Court Administrator is
directed to release the remaining amount of the retirement benefits to respondent.

SO ORDERED.