Spouses Yu vs. Pacleb (G.R. No.

172172, Feb. 24, 2009)

FACTS:
Baltazar Pacleb and his late first
wife Angelita Chan are registered
owners of an 18,000-square
meter parcel
of land in Barrio Langcaan,
Dasmariñas,Cavite, covered by
TCT No. T-118375 (Langcaan
Property).
On Feb. 27, 1992, Spouses
Baltazar Pacleb and Angelita
Chan sold the property to
Rebecca del Rosario.
On May 7, 1992, the lot was
thereafter sold to Ruperto Javier.
On Nov. 10, 1992, a Contract to
Sell was entered into between
Javier and Spouses Yu wherein
petitioner
spouses agreed to pay Javier
P200,000 as partial payment and
P400,000 to be paid upon
execution of the contract,
and Javier undertook to deliver
possession of the Langcaan
Property and to sign a deed of
absolute sale within 30
days from execution of contract.
All the aforementioned sales
were not registered.
In 1993, spouses Yu filed a
complaint with the RTC for
specific performance and
damages against Javier,
contending that Javier
represented to them that the
Langcaan Property was not
tenanted, but after they already
paid
P200,000 as initial payment and
entered into the agreement of sale
on Sept. 11, 1992, they
discovered that it was
tenanted by Ramon Pacleb, son
of Baltazar Pacleb. Subsequently,
spouses Yu demanded for the
cancellation of the
agreement and for the return of
their initial payment.
On March 10, 1995, spouses Yu,
Ramon, and the latter’s wife
executed a “Kusangloob na
Pagsasauli ng Lupang
Sakahan at Pagpapahayag ng
Pagtalikod sa Karapatan, where
spouses Yu paid Ramon P500,000
in exchange for the
waiver of his tenancy rights over
the subject property. But on Oct.
12, 1995, Baltazar Pacleb filed a
complaint for
annulment of the deed of sale to
Javier, alleging that the deed of
sale executed between him and his
late first wife
Angelita was spurious as their
signatures were forgeries.
Meanwhile, on Nov. 23, 1995,
spouses Yu filed an action for
forcible entry against respondent
with the MTC alleging that they
had prior physical possession of
the Langcaan Property
through their trustee Ramon until
the latter was ousted by respondent
in Sept. 1995. MTC ruled in favor
of spouses Yu,
affirmed by the RTC, but set aside
by CA.
His first action for annulment of
deed of sale having been
dismissed, respondent filed action
for removal of cloud
from title on May 29, 1996,
contending that the deed of sale
between him and his late first wife
and Rebecca del Rosario
could not have been executed on
Feb. 27, 1992, because on said
date, he was residing in the U.S.
and his late first wife
died 20 years ago. During
pendency of the case, respondent
died, succeeded by his surviving
spouse and representatives
of children with his first wife. RTC
held that spouses Yu are
purchasers in good faith, but on
appeal, CA reversed and set
aside lower court’s decision and
ordered for the cancellation of the
annotation in favor of spouses Yu
on the TCT of
Langcaan Property.
ISSUE: Whether or not petitioner
spouses are innocent purchasers
for value and in good faith.
HELD: Petitioner spouses are not
innocent purchasers for value, and
they are not in good faith. Several
facts
should have put petitioner spouses
on inquiry as to the alleged rights
of their vendor, Javier, over the
Langcaan property.
First, the property remains to be
registered in the name of
respondent despite the 2 Deeds of
Absolute Sale from
respondent to Del Rosario then
from the latter to Javier, and both
deeds were not even annotated in
the title of the subject
property.
Second, the 2 deeds of absolute
sale were executed only 2
months apart containing identical
provisions.
Third, the fact that the Langcaan
Property is in the possession of
Ramon, son of the registered
owners, this
should have made petitioner
spouses suspicious as to the
veracity of the alleged title of
their vendor, Javier.
Spouses Yu vs. Pacleb (G.R. No. 172172, Feb. 24, 2009)

SUMMARY OF DOCTRINE: The character of a proceeding is determined by its aim and object. Whethera
proceeding is in rem, or in personam, or quasi in rem for that matter, is determined by its nature and
purpose, and by these only. An action in personam is a proceeding to enforce personal rights and
obligations brought against the person and is based on the jurisdiction of the person while an action
quasi in rem is a

proceeding to subject the defendant’s interests therein to the obligation or loan burdening the property
and

deals with the status, ownership and liability of the property

FACTS: Baltazar Pacleb and his late first wife Angelita Chan are registered owners of an 18,000-square
meter parcel of land in Barrio Langcaan, Dasmariñas,Cavite, covered by TCT No. T-118375 (Langcaan
Property). On Feb. 27, 1992, Spouses Baltazar Pacleb and Angelita Chan sold the property to Rebecca del
Rosario.On May 7, 1992, the lot was thereafter sold to Ruperto Javier. On Nov. 10, 1992, a Contract to
Sell was entered into between Javier and Spouses Yu wherein petitioner spouses agreed to pay Javier
P200,000 as partial payment and P400,000 to be paid upon execution of the contract, and Javier
undertook to deliver possession of the Langcaan Property and to sign a deed of absolute sale within 30
days from execution of contract.All the aforementioned sales were not registered.In 1993, spouses Yu
filed a complaint with the RTC for specific performance and damages against Javier, contending that
Javier represented to them that the Langcaan Property was not tenanted, but after they already
paidP200,000 as initial payment and entered into the agreement of sale on Sept. 11, 1992, they
discovered that it was tenanted by Ramon Pacleb, son of Baltazar Pacleb. Subsequently, spouses Yu
demanded for the cancellation of the agreement and for the return of their initial payment. On March
10, 1995, spouses Yu, Ramon, and the latter’s wife executed a “Kusangloob na Pagsasauli ng
LupangSakahan at Pagpapahayag ng Pagtalikod sa Karapatan, where spouses Yu paid Ramon P500,000
in exchange for the waiver of his tenancy rights over the subject property. But on Oct. 12, 1995, Baltazar
Pacleb filed a complaint for annulment of the deed of sale to Javier, alleging that the deed of sale
executed between him and his late first wife Angelita was spurious as their signatures were forgeries.
Meanwhile, on Nov. 23, 1995, spouses Yu filed an action for forcible entry against respondent with the
MTC alleging that they had prior physical possession of the Langcaan Property through their trustee
Ramon until the latter was ousted by respondent in Sept. 1995. MTC ruled in favor of spouses Yu,
affirmed by the RTC, but set aside by CA.His first action for annulment of deed of sale having been
dismissed, respondent filed action for removal of cloud from title on May 29, 1996, contending that the
deed of sale between him and his late first wife and Rebecca del Rosario could not have been executed
on Feb. 27, 1992, because on said date, he was residing in the U.S. and his late first wife died 20 years
ago. During pendency of the case, respondent died, succeeded by his surviving spouse and
representatives of children with his first wife. RTC held that spouses Yu are purchasers in good faith, but
on appeal, CA reversed and set aside lower court’s decision and ordered for the cancellation of the
annotation in favor of spouses Yu on the TCT of Langcaan Property.ISSUE: Whether or not petitioner
spouses are innocent purchasers for value and in good faith.HELD: Petitioner spouses are not innocent
purchasers for value, and they are not in good faith. Several facts should have put petitioner spouses on
inquiry as to the alleged rights of their vendor, Javier, over the Langcaan property. First, the property
remains to be registered in the name of respondent despite the 2 Deeds of Absolute Sale from
respondent to Del Rosario then from the latter to Javier, and both deeds were not even annotated in the
title of the subjectproperty. Second, the 2 deeds of absolute sale were executed only 2 months apart
containing identical provisions.Third, the fact that the Langcaan Property is in the possession of Ramon,
son of the registered owners, this should have made petitioner spouses suspicious as to the veracity of
the alleged title of their vendor, Javier. Petitioner spouses could have easily verified the true status of
the subject property from Ramon’s wife, since the latter is their relative.The law protects to a greater
degree a purchaser who buys from the registered owner himself. Corollarily, itrequires a higher degree
of prudence from one who buys from a person who is not the registered owner,although the land object
of the transaction is registered. While one who buys from the registered owner does notneed to look
behind the certificate of title, one who buys from one who is not the registered owner is expected
toexamine not only the certificate of title but all factual circumstances necessary for him to determine if
thereare any flaws in the title of the transferor, or in his capacity to transfer the land. Therefore,
petitioner spouses cannot be considered as innocent purchasers in good faith, and respondent has
abetter right over the Langcaan Property as the true owner thereof.

PEOPLE OF THE PHILIPPINES, appellee, vs. AMADEO TIRA and

CONNIE TIRA, appellants. G.R. No. 139615. May 28, 2004
FACTS:

Pangasinan Police held surveillance operations on appellants Amadeo and Connie Tira for drug
activities. After a few days of surveying, the police got the warrant and searched the Tira’s house. The
police found a number of drugs, some paraphernalia, and money that was assumed to have gotten
from the trades which was hidden under the bed Amadeo was sleeping in.

Amadeo, in his defense, said that the house the police searched was rented by his nephew, Chris Tira,
and his live-in partner, Gemma Lim. The trial court convicted him for possession of illegal drugs.
The court did not believe Amadeo’s statement because it was not substantiated.

Connie, like Amadeo’s defense, said that policemen searched the rented house and seized items that
were owned by the boarders. She was also not believed by the trial court and said that as husband
and wife, Connie would not have known the drugs in their house.

ISSUE: Whether or not the spouses Tira are guilty of illegal possession of drugs.

RULING:

The appellants had three appeals. First, they pointed out that the trial court failed to prove their guilt
beyond reasonable doubt. Second, that the search was illegally made. Third, assuming Amadeo was
guilty, the trial court was mistaken when they reasoned out that there was conspiracy between the
spouses.

The appellants claim that the police violated Section 7, Rule 126 of the Rules of Criminal Procedure.
They insist that the drugs cannot be assumed that the Tira controlled it as the room was occupied
others. The Court found this appeal without merit. Like the trial court, the Court did not believe that
there were boarders living on the other room. The drugs were found under the bed of the appellant.  

The Court also pointed out that there were other witnesses during the search. 

The Court said that to be convicted in violation of RA 6425, one should, freely, consciously, and
unlawfully possess the illegal drug. Because the drug was found under the bed of Amadeo, it should
tell that they had control of the drugs. Connie was still found guilty because as a housewife she had
access the house without restriction

Hence, the spouses Tira was found guilty and was sentenced to reclusion perpetua and a fine of
P1,000,000.00 for violating Section 8, Article II of Rep. Act No. 6425 and an indeterminate penalty
of from Four (4) Months and One (1) Day of arresto mayor in its medium period as minimum, to
Three (3) years of prision correccional for violating Section 16, Article III of Rep. Act No. 6425.
 SANTOS V MANALILI

FACTS:

At the core of the controversy is a 4,608 square-meter parcel of land in

the District of Toril, Davao City. On August 6, 1970, Reynaldo Manalili,
predecessor-in-interest of respondent Ronald C. Manalili, filed with the
BOL an application to purchase the subject property, attaching
therewith his Occupants Affidavit. The application was favorably acted
upon and on March 27, 1972, the BOL required Manalili to pay the
downpayment of 10% of the purchase price or P1,865.28. Thereafter,
Manalili declared the land for taxation purposes.

On March 25, 1981, after the lapse of nine (9) years and even as the
BOL had already issued a Certification of Full Payment endorsing the
approval of the sale of the land in question to applicant Reynaldo
Manalili, herein petitioner Rodolfo Santos wrote an undated letter to
the BOL protesting Manalilis application.

On December 16, 1981, following Manalilis compliance with other

requirements, the BOL issued to him the corresponding Deed of
Absolute Sale which was duly approved by the Office of the President
on December 21, 1981.

On April 26, 1982, petitioner filed the aforementioned complaint

for  Reconveyance, Damages, Attorneys Fees and/or Annulment of
Title  against the BOL and the Manalilis.
The trial court rendered its September 20, 1993 decision in favor of the
Manalilis. The Court of Appeals affirmed the decision.

ISSUE:

W/N Manalili has the better right of possession over the lot in
question.

RULING:

The two (2) courts below, in unanimously upholding the validity of the
sale of the land in question to the Manalilis, likewise affirmed the BOLs
finding that the Manalilis had a better right of possession thereto.
Preponderant evidence of respondent have sufficiently established
that as early as 1970, Reynaldo Manalili, respondents predecessor-in-
interest, had already filed an Affidavit of Occupancy with the BOL, the
government agency tasked to administer it; that the Manalilis
administered the land before they left for Manila in 1972; that after
they moved to Manila they appointed an administrator to oversee the
land and the improvements and crops they have planted thereon, such
as bananas and coconut trees; and that the Manalilis have been paying
the real estate taxes for the subject land even before the sale thereof
to them.

The circumstance that after the sale, the Manalilis resided in Manila
and Pangasinan is of no moment. As it is, possession may be exercised
in ones own name or in that of another. [5] It is not necessary that the
owner or holder of the thing exercise personally the rights of
possession. Rights of possession may be exercised through agents.[6]
BUKIDNON DOCTORS HOSPITAL VS METROPOLITANT
BANK TRUST & CO.
GR 161882 JULY 8, 2005

FACTS:

Herein petitioner loaned a money amounting to P25 M from respondent as a security it mortgaged 6
parcels of land located in Bukidnon. Upon default in the payment of the loan, the said parcels of land were
extrajucially foreclosed and put in a public auction and were sold to the repondent bank.

In order to continue its business the petitioner proposed that It would lease the land where its hospital is
erected in 3 years for 100,000 a month. Respondent bank agreed to the proposal however increasing the
rental to 200,000 a month with the contract subject to a review every 6 months. The parties were able to
agree with a monthly rental of 150,000 and that the contract shall take effect in November 2001.

Approximately 1 year and 8 months, respodent ordered the petitioner to vacate the premises within 15
days. The latter refused.

MBTC filed for Ex Parte Motion for a Writ of Possession.

RTC granted the motion.

ISSUE:

whether or not a writ of possession is the proper remedy for evicting a mortgagor who became a lessee of
the mortgaged properties after the mortgagee has consolidated ownership over the properties and was
issued new certificates of title.

HELD:

NO

In the case at bar, it is not disputed that after the foreclosure of the property in question and the issuance
of new certificates of title in favor of the respondent, the petitioner and the respondent entered into a
contract of lease of the subject properties. This new contractual relation presupposed that the petitioner
recognized that possession of the properties had been legally placed in the hands of the respondent, and
that the latter had taken such possession but delivered it to the former as lessee of the property. By
paying the monthly rentals, the petitioner also recognized the superior right of the respondent to the
possession of the property as owner thereof. And by accepting the monthly rentals, the respondent
enjoyed the fruits of its possession over the subject property. Clearly, the respondent is in material
possession of the subject premises. Thus, the trial court’s issuance of a writ of possession is not only
superfluous, but improper under the law. Moreover, as a lessee, the petitioner was a legitimate possessor
of the subject properties under Article 525 of the Civil Code. Thus, it could not be deprived of its lawful
possession by a mere ex parte motion for a writ of possession.

In a nutshell, where a lease agreement, whether express or implied, is subsequently entered into by the
mortgagor and the mortgagee after the expiration of the redemption period and the consolidation of title in
the name of the latter, a case for ejectment or unlawful detainer, not a motion for a writ of possession, is
the proper remedy in order to evict from the questioned premises a mortgagor-turned-lessee.  The
rationale for this rule is that a new relationship between the parties has been created.  What applies is no
longer the law on extrajudicial foreclosure, but the law on lease.  And when an issue arises, as in the case
at bar, regarding the right of the lessee to continue occupying the leased premises, the rights of the
parties must be heard and resolved in a case for ejectment or unlawful detainer under Rule 70 of the
Rules of Court.

Boyer Roxas vs. CA

FACTS: The corporation, Heirs of Eugenia Roxas Inc, wasestablished to engage in agriculture to develop
thep r o p e r t i e s i n h e r i t e d f r o m E u g e n i a R o x a s a n d E u f r o n c i o R o x a s , w h i c h i n c l
u d e s t h e l a n d u p o n w h i c h t h e H i d d e n Valley Springs Resort was put up, including
variousimprovements thereon, using corporate funds. The AOI of Heirs Inc. was amended for this
purpose. Heirs Inc. claimsthat Boyer-Roxas and Guillermo Roxas had been inpossession of the various
properties and improvements inthe resort and only upon the tolerance of the corporation. Itw a s a l l e
g e d t h a t t h e y c o m m i t t e d a c t s t h a t i m p e d e d t h e corporation’s expansion and normal
operation of the resort. They also did not comply with court and regulatory orders,and thus the
corporation adopted a resolution authorizingt h e e j e c t m e n t o f t h e d e f e n d a n t s . T C g r a n t s
. C A a f f i r m s .Boyer and Roxas contend that, being stockholders, their p o s s e s s i o n o f t h e p r o p
e r t i e s o f t h e c o r p o r a t i o n m u s t b e respected in view of their ownership of an aliquot portion
of all properties of the corporation. ISSUE: W O N t h e p o s s e s s i o n o f t h e p r o p e r t i e s i n q u e
s t i o n must be respected in view of being a stockholder. HELD: NO. Regarding properties owned by the
corporation,under the doctrine of corporate entity “properties registeredin the name of the corporation
are owned by it as an entityseparate and distinct from its members.” While shares of stock constitute
personal property, they do not representproperty of the corporation. A share of stock only typifies
analiquot part of the corporation’s property, or the right toshare in its proceeds to that extent when
distributedaccording to law and equity, but its holder is not the ownero f a n y p a r t o f t h e c a p i t a l
ofthecorporation,norisheentitledtothepossessionofanydefiniteporti
o n o f i t s property or assets. The stockholder is not a co -owner ortenant in common of the corporate
property. The corporation has a personality distinct ands e p a r a t e f r o m i t s m e m b e r s a n d t r a n
s a c t s b u s i n e s s o n l yt h r o u g h i t s o f f i c e r s o r a g e n t s . W h a t e v e r a u t h o r i t y t h e s
e officers or agents may have is derived from the board orother governing body, unless conferred by the
charter of thec o r p o r a t i o n i t s e l f . A n o f f i c e r ' s p o w e r a s a n a g e n t o f t h e corporation
must be sought from the statute, charter, theby-laws or in a delegation of authority to such officer, from
the acts of the board of directors, formally expressed orimplied from a habit or custom of doing
business.In this case the elder Roxas who then controlled themanagement of the corporation, being the
majoritys t o c k h o l d e r , c o n s e n t e d t o t h e p e t i t i o n e r ’ s u s e a n d s t a ywithin the
properties. The Board did not object and wereallowed to stay until it adopted a resolution to the effect
of authorizing to eject them. Since their stay was merely bytolerance, in deference to the wishes of the
majoritystockholder who controlled the corporation, when Roxasdied his actions cannot bind the
company forever. There isn o p r o v i s i o n i n t h e b y - l a w s o r a n y other resolution authorizing
their continued stay.
 SAMUEL PARILLA, et al. v. DR. PROSPERO PILAR

509 SCRA 420 (2006)

A tenant cannot be said to be a builder in good faith as he has no pretension to be

owner. At all events, under the Civil Code, it is the lessor who is given the option, upon
termination of the lease contract, either to appropriate the useful improvements by
paying one-half of their value at that time, or to allow the lessee to remove the
improvements.

Spouses Samuel and Chinita Parilla and their son, as dealers of Pilipinas Shell
Petroleum Corporation (Pilipinas Shell), have been in possession of a parcel of land in
Bantay, Ilocos Sur which was leased to them by respondent Dr. Prospero Pilar.

When the lease contract between Pilipinas Shell and Pilar expired, and despite demands
to vacate, the Parillas remained in possession of the property on which they built
improvements., the Parillas and the other occupants remained in the property. Hence,
Pilar filed a complaint for ejectment before the Municipal Trial Court (MTC) of Bantay,
Ilocos Sur. The MTC ordered the Parillas to vacate and to pay Pilar a reasonable
compensation for the use of the property. It also ordered Pilar to reimburse the

Parillas the amount Two Million Pesos representing the value of the improvements

introduced on the property.
Pilar appealed to the Regional Trial Court of Vigan and the RTC affirmed the MTC‘s
Decision. However, on Pilar‘s petition for review, the Court of Appeals set aside the
lower courts decision.

ISSUES:

Whether or not the Parillas are entitled to reimbursement for the improvements being
builders in good faith

HELD:

Jurisprudence is replete with cases which categorically declare that Article 448 covers

only cases in which the builders, sowers or planters believe themselves to be owners of
the land or, at least, have a claim of title thereto, but not when the interest is merely that
of a holder, such as a mere tenant, agent or usufructuary. A tenant cannot be said to be a
builder in good faith as he has no pretension to be owner.

The right of the lessor upon the termination of a lease contract with respect to useful
improvements introduced on the leased property by a lessee is covered by Article 1678.
Clearly, it is Article 1678 of the New Civil Code which applies to the present case. The
Parillas claim for reimbursement of the alleged entire value of the improvements does
not thus lie under Article 1678. Not even for one-half of such alleged value, there being
no substantial evidence, e.g., receipts or other documentary evidence detailing costs of
construction. Besides, by the Parillas‘ admission, of the structures they originally built —
the billiard hall, restaurant, sari-sari store and a parking lot, only the ―bodega-like‖
sari-sari store and the parking lot now exist.

At all events, under Article 1678, it is the lessor who is given the option, upon
termination of the lease contract, either to appropriate the useful improvements by
paying one-half of their value at that time, or to allow the lessee to remove the
improvements. This option solely belongs to the lessor as the law is explicit that
―[s]hould the lessor refuse to reimburse said amount, the lessee may remove the
improvements, even though the principal thing may suffer damage thereby.‖ It appears
that the lessor has opted not to reimburse.

Tan Queto v. CA [G.R. No. L-

35648. February 27, 1987.]
Facts:
Restituta Tagalinar Guangco de
Pombuena received the questioned
lot (Lot 304-B of the
Cadastre Survey of the
Municipality of Centro, Misamis
Occidental) either as a purported
donation or by way of purchase on
11 February 1927 for P50.00 as the
alleged
consideration thereof. The
transaction took place during her
mother’s lifetime (her father
having predeceased the mother)
and consummated while Restituta
was already married to
her husband Juan Pombuena. On
22 January 1935, Juan filed an
application of Torrens title
over the land for himself and his
supposed co-owner Restituta. On
22 November 1938, a
decision was promulgated (GLRC
1638, Cadastral Case 12)
pronouncing Juan (married to
Restituto) as the owner of the land.
On 22 September 1949 a contract
of lease over the lot
was entered into between Pershing
Tan Queto and Restituta (with the
consent of her
husband) for a period of 10 years.
Meanwhile, On 27 December 1960
Restituta sued Tan Queto for
unlawful detainer (the
lease contract having expired)
before the Municipal Court of
Ozamis City.
On 22 April 1962, as a
consequence of the cadastral case,
an OCT was issued in Juan’s
name. On 10 October 1962, Tan
Queto and Juan entered into a
barter agreement whereby
Tan Queto became the owner of
the disputed lot, and the spouses in
turn became the
owners of a parcel of land with the
house constructed thereon
previously owned (that is,
before the barter) by Tan Queto.
Thereafter, Tan Queto constructed
on the disputed land a
concrete building, without any
objection on the part of Restituta.
The Municipal court ruled in favor
of the spouses in the unlawful
detainer case; but on
appeal in the CFI, the entire case
was dismissed because of an
understanding (barter)
entered into by Juan and Tan
Queto.
Restituta sued both Juan and Tan
Queto for reconveyance of the title
over the registered but
disputed lot, for annulment of the
barter, and for recovery of the land
with damages. The CFI
and the Court of Appeals found the
disputed lot as paraphernal and
that Tan Queto was a
builder in bad faith. These findings
were regarded by the Supreme
Court as findings of facts
and thus ordinarily conclusive
upon the Court. Tan Queto filed
for a motion for
reconsideration of the Supreme
Court decision dated 16 May 1983.
The Supreme Court set aside its
decision promulgated on 16 May
1983, and rendered a new
one declaring the questioned lot
together with the building thereon,
as Tan Queto’s exclusive
property; without costs.
1. Findings of the lower courts
ordinary conclusive upon the
Court; exception, if erroneous
The findings of the Court of First
Instance and the Court of Appeals
were regarded by the
Supreme Court as findings of facts
and thus ordinarily conclusive
upon the Court. Assuming
they are factual findings, still if
they are erroneous inferences from
certain facts, they cannot
bind the Court.
ISSUE:
Tan Queto v. CA [G.R. No. L-35648. February 27, 1987.]Facts: Restituta Tagalinar Guangco de Pombuena
received the questioned lot (Lot 304-B of the Cadastre Survey of the Municipality of Centro, Misamis
Occidental) either as a purported donation or by way of purchase on 11 February 1927 for P50.00 as the
alleged consideration thereof. The transaction took place during her mother’s lifetime (her father having
predeceased the mother) and consummated while Restituta was already married to her husband Juan
Pombuena. On 22 January 1935, Juan filed an application of Torrens title over the land for himself and
his supposed co-owner Restituta. On 22 November 1938, a decision was promulgated (GLRC 1638,
Cadastral Case 12) pronouncing Juan (married to Restituto) as the owner of the land. On 22 September
1949 a contract of lease over the lot was entered into between Pershing Tan Queto and Restituta (with
the consent of her husband) for a period of 10 years.Meanwhile, On 27 December 1960 Restituta sued
Tan Queto for unlawful detainer (the lease contract having expired) before the Municipal Court of
Ozamis City.On 22 April 1962, as a consequence of the cadastral case, an OCT was issued in Juan’s name.
On 10 October 1962, Tan Queto and Juan entered into a barter agreement whereby Tan Queto became
the owner of the disputed lot, and the spouses in turn became the owners of a parcel of land with the
house constructed thereon previously owned (that is, before the barter) by Tan Queto. Thereafter, Tan
Queto constructed on the disputed land a concrete building, without any objection on the part of
Restituta.The Municipal court ruled in favor of the spouses in the unlawful detainer case; but on appeal
in the CFI, the entire case was dismissed because of an understanding (barter) entered into by Juan and
Tan Queto.Restituta sued both Juan and Tan Queto for reconveyance of the title over the registered
butdisputed lot, for annulment of the barter, and for recovery of the land with damages. The CFIand the
Court of Appeals found the disputed lot as paraphernal and that Tan Queto was a builder in bad faith.
These findings were regarded by the Supreme Court as findings of facts and thus ordinarily conclusive
upon the Court. Tan Queto filed for a motion for reconsideration of the Supreme Court decision dated
16 May 1983.The Supreme Court set aside its decision promulgated on 16 May 1983, and rendered a
newone declaring the questioned lot together with the building thereon, as Tan Queto’s
exclusiveproperty; without costs.1. Findings of the lower courts ordinary conclusive upon the Court;
exception, if erroneousThe findings of the Court of First Instance and the Court of Appeals were
regarded by the Supreme Court as findings of facts and thus ordinarily conclusive upon the Court.
Assumingthey are factual findings, still if they are erroneous inferences from certain facts, they cannot
bind the Court.ISSUE: In having constructed the building on the lot, should TAN QUETO be regarded as a
builder in good faith?HELD:Tan Queto nursed the belief that the lot was actually RESTITUTA's (making
him in bad faith), still RESTITUTA's failure to prohibit him from building despite her knowledge that
construction was actually being done, makes her also in bad faith. The net resultant of mutual bad faith
would entitle TAN QUETO to the rights of a builder in good faith (Art. 448, Civil Code), ergo,
reimbursement should be given him if RESTITUTA decides to appropriate the building for herself (Art.
448, Civil Code).However, TAN QUETO having bartered his own lot and small house with the questioned
lot with JUAN (who has been adverted to by a court decision and by the OCT a conjugal owner)may be
said to be the OWNER-POSSESSOR of the lot. Certainly he is not merely a possessor or builder in good
faith(this phrase presupposes ownership in another); much lessis he a builder in bad faith. He is a
builder-possessor jus possidendi because he is the OWNER himself. The Chapter on Possession (jus
possesionis, not jus possidendi) in the Civil Code refers to a possessor other than the owner. Further,
that the difference between abuilder (or possessor) in good faith and one in bad faith is that the former
is NOT AWARE of the defect or flaw in his title or mode of acquisition while the latter is AWARE of such
defect or flaw (Art. 526, Civil Code). But in either case there is a flaw or defect. In the case of TAN
QUETO there is no such flaw or defect because it is he himself (not somebody else) who is the owner of
the property.
Caram v. Laureta
G.R. No. L-28740, 24 February 1981

FACTS:

Marcos Mata conveyed a parcel of land in favor of Claro Laureta. The deed of absolute sale was not
registered because it was not acknowledged before a notary public or any authorized officer.
Nonetheless, Mata delivered to Laureta possession of the property together with pertinent papers
(OCT, tax declaration etc.)

Subsequently, the same parcel of land was sold by Mata to Fermin Caram. The deed of sale in favor
of Caram was acknowledged before Atty. Aportadera. Mata, through Aportadera and Arcilla, filed
with the CFI Davao a petition for the issuance of a new owner’s duplicate of the OCT, alleging loss
of said document. The court issued a new title and declared the loss title null and void

Laureta, then, filed before CFI Davao an action for nullity, recovery of ownership and/or
reconveyance against Mata and Caram.

Mata, in his answer, alleged that he signed the sale in favor of Laureta as he was subjected to
duress, threat and intimidation since Laureta was the commanding officer of the USFIP in Davao.
Caram, on the other hand, denied that he had any knowledge or information of any previous
encumbrance, transaction or alienation in favor of Laureta until the filing of the complaints

The trial court held in favor of Laureta and declared the sale in favor of Caram null and void

Petitioner Caram assailed the trial court finding that the second sale of the property was made
through his representatives, Irespe and Aportadera. Caram contended that Irespe merely acted as a
broker with the specific task and duty to pay Mata P1,000 for the property and to ensure that the
deed of sale was executed by Mata, and that Aportadera only acted as notary public in the execution
of the deed of sale

ISSUE:

WON Irespe and Aportadera were agents of Caram for the purpose of buying the subject property?

RULING:

YES. The facts show that Mata and Caram had never met. During the trial Mata testified that he
knew Aportadera but he did not know Caram. Thus, the sale of the property could only have been
through Caram’s representatives, Irespe and Aportadera.

Even if Irespe and Aportadera did not have actual knowledge of the first sale, still their actions have
not satisfied the requirement of good faith. In the instant Case, Irespe and Aportadera had
knowledge of circumstances which ought to have put them on inquiry. Both of them knew that Mata’s
OCT together with other papers pertaining to the land were taken by Laureta.
There is no doubt then that Irespe and Aportadera, acting as agents of Caram, purchased the
property of Mata in bad faith. Applying the principle of agency, Caram as principal, should also be
deemed to have acted in bad faith.

FERMIN Z. CARAM, JR. V. CLARO L. LAURETAG.R. No. L-28740. February 24,

1981FERNANDEZ, J.

FACTS:On June 25, 1959, Claro L. Laureta filed in the Court of First Instance of Davao anaction for
nullity, recovery of ownership and/or reconveyance with damages andattorney's fees against Marcos
Mata, Codidi Mata, Fermin Z. Caram Jr. and theRegister of Deeds of Davao City.On June 10, 1945,
Marcos Mata conveyed a large tract of agricultural land coveredby Original Certificate of Title No.
3019 in favor of Claro Laureta, plaintiff, therespondent herein. The deed of absolute sale in favor of
the plaintiff was notregistered because it was not acknowledged before a notary public or any
otherauthorized officer. At the time the sale was executed, there was no authorizedofficer before
whom the sale could be acknowledged inasmuch as the civilgovernment in Tagum, Davao was not
as yet organized. However, the defendantMarcos Mata delivered to Laureta the peaceful and lawful
possession of thepremises of the land together with the pertinent papers thereof such as the
Owner'sDuplicate Original Certificate of Title No. 3019, sketch plan, tax declaration, taxreceipts and
other papers related thereto. Since June 10, 1945, the plaintiff Lauretahad been and is still in
continuous, adverse and notorious occupation of said land,without being molested, disturbed or
stopped by any of the defendants or theirrepresentatives. In fact, Laureta had been paying realty
taxes due thereon and hadintroduced improvements worth not less than P20,000.00 at the time of
the filing ofthe complaint.However, the said property was sold to Fermin Caram, Jr., the petitioner,
by MarcosMata on May 5, 1947. And was able to declare the ODOCT in the possession ofLaureta
null and void, after Mata filed for an issuance of new ODOCT before the RDof Davao on the ground
of loss of the said title.The Trial Court ruled infavor of Laureta, stating that Caram, Jr. was not a
purchaserin good faith, and the Court of Appeals thenafter affirmed the decision of the lowercourt.

PETITIONER’S CONTENTION:

The petitioner assails the finding of the trial court that the second sale of theproperty was made
through his representatives, Pedro Irespe and Atty. AbelardoAportadera. He argues that Pedro
Irespe was acting merely as broker orintermediary with the specific task and duty to pay Marcos
Mata the sum ofP1,000.00 for the latter's property and to see to it that the requisite deed of
salecovering the purchase was properly executed by Marcos Mata; that the identity ofthe property to
be bought and the price of the purchase had already been agreedupon by the parties; and that the
other alleged representative, Atty. Aportadera,merely acted as a notary public in the execution of the
deed of sale.ISSUES:Whether petitioner have acted in bad faith through his agents
action.RULING:In the case at bar, the court found that the Attorneys Irespe and Aportadera
hadknowledge of the circumstances, and knew that Mata's certificate of title togetherwith other
papers pertaining to the land was taken by soldiers under the commandof Col. Claro L. Laureta.
Added to this is the fact that at the time of the second saleLaureta was already in possession of the
land. Irespe and Aportadera should haveinvestigated the nature of Laureta's possession. If they
failed to exercise theordinary care expected of a buyer of real estate they must suffer the
consequences.The rule of caveat emptor requires the purchaser to be aware of the supposed titleof
the vendor and one who buys without checking the vendor's title takes all therisks and losses
consequent to such failure.The principle that a person dealing with the owner of the registered land
is notbound to go behind the certificate and inquire into transactions the existence ofwhich is not
there intimated 18 should not apply in this case. It was of commonknowledge that at the time the
soldiers of Laureta took the documents from Mata,the civil government of Tagum was not yet
established and that there were noofficials to ratify contracts of sale and make them registrable.
Obviously, Aportaderaand Irespe knew that even if Mata previously had sold the disputed property
suchsale could not have been registered.cdrepThere is no doubt then that Irespe and Aportadera,
acting as agents of Caram,purchased the property of Mata in bad faith. Applying the principle of
agency,Caram, as principal, should also be deemed to have acted in bad faith.Article 1544 of the
New Civil Code provides that:"Art. 1544. If the same thing should have been sold to different
vendees, theownership shall be transferred to the person who may have first taken
possessionthereof in good faith, if it should be movable property."Should it be immovable property,
the ownership shall belong to the personacquiring it who in good faith first recorded it in the Registry
of Property. "Should there be no inscription, the ownership shall pertain to the person who ingood
faith was first in the possession; and, in the absence thereof, to the person whopresents the oldest
title, provided there is good faith. (1973)".Since Caram was a registrant in bad faith, the situation is
as if there was noregistration at all.

Kasilag v. Rodriguez, 69 PHIL 217

FACTS: Marcial Kasilag and Emiliana Ambrosio entered a contract of mortgage of improvements of
land acquired as homestead to secure the payment of the indebtedness of P1,000 plus interest. The
parties stipulated that Emilina Ambrosio was to pay the debt with interest within 4 ½ years., and in
such case, mortgage would not have any effect. They also agreed that Emiliana Ambrosio would
execute a deed of sale if it would not be paid within 4 ½ years and that she would pay the tax on the
land. After a year, it turned out that she was not able to pay the tax. Hence, they entered a verbal
agreement whereby she conveyed to the latter the possession of the land on the condition that they
would not collect the interest of the loan, would attend to the payment of the land tax, would benefit
by the fruits of the land, & would introduce improvement thereof.

These pacts made by the parties independently were calculated to alter the mortgage a contract
clearly entered into, converting the latter into a contract of antichresis. The contract of antichresis,
being a real encumbrance burdening the land, is illegal and void because it is legal and valid.

ISSUE: W/N the petitioner should be deemed the possessor of the land in good faith because he
was unaware of any flaw in his title or in the manner of its acquisition by which it is invalidated

RULING: Yes. From the facts found established by the Court of Appeals we can neither deduce nor
presume that the petitioner was aware of a flaw in his title or in the manner of its acquisition, aside
from the prohibition contained in section 116. This being the case, the question is whether good faith
may be premised upon ignorance of the laws.

Gross and inexcusable ignorance of law may not be the basis of good faith, but possible, excusable
ignorance may be such basis. It is a fact that the petitioner is not conversant with the laws because
he is not a lawyer. In accepting the mortgage of the improvements he proceeded on the well-
grounded belief that he was not violating the prohibition regarding the alienation of the land. In taking
possession thereof and in consenting to receive its fruits, he did not know, as clearly as a jurist does,
that the possession and enjoyment of the fruits are attributes of the contract of antichresis and that
the latter, as a lien, was prohibited by section 116. These considerations again bring us to the
conclusion that, as to the petitioner, his ignorance of the provisions of section 116 is excusable and
may, therefore, be the basis of his good faith.

REPUBLIC v. REV. CLAUDIO R. CORTEZ, GR No. 197472, 2015-09-07

Facts:
Respondent Rev. Claudio R. Cortez, Sr. (Rev. Cortez), a missionary by vocation engaged in
humanitarian and charitable activities, established an orphanage and school in Punta Verde
, Palaui Island
He claimed that since 1962, he has been in... peaceful possession of about 50 hectares of
land located in the western portion of Palaui Island... which he, with the help of Aetas and
other people under his care, cleared and developed for agricultural purposes in order to
support his... charitable, humanitarian and missionary works.
On May 22, 1967, President Ferdinand E. Marcos issued Proclamation No. 201 reserving
for military purposes a parcel of the public domain situated in Palaui Island. Pursuant
thereto, 2,000 hectares of the southern half portion of the Palaui Island were withdrawn
from sale or... settlement and reserved for the use of the Philippine Navy, subject, however,
to private rights if there be any.
More than two decades later or on August 16, 1994, President Fidel V. Ramos issued
Proclamation No. 447 declaring Palaui Island and the surrounding waters... as marine
reserve. Again subject to any private rights, the entire Palaui
Island consisting of an aggregate area of 7,415.48 hectares was accordingly reserved as a
marine protected area.
On June 13,2000, Rev. Cortez filed a Petition for Injunction with Prayer for the Issuance of a
Writ of Preliminary Mandatory Injunction[5] against Rogelio C. Biñas (Biñas) in his capacity
as Commanding Officer of the Philippine Naval Command
According to him, some members of the Philippine Navy, upon orders of Biñas, disturbed
his peaceful and lawful possession of the said 50-hectare portion of Palaui Island when on
March 15, 2000, they commanded him and his men, through the use of force... and
intimidation, to vacate the area. When he sought assistance from the Office of the Philippine
Naval Command, he was met with sarcastic remarks and threatened with drastic military
action if they do not vacate. Thus, Rev. Cortez and his men were constrained to leave the
area.
the RTC issued an Order[8] dated February 21, 2002 granting the... application for a writ of
preliminary mandatory injunction. However, the same pertained to five hectares (subject
area) only, not to the whole 50 hectares claimed to have been occupied by Rev. Cortez,
viz.:
It should be noted that the claim of [Rev. Cortez] covers an area of 50 hectares more or less
located at the western portion of Palaui Island which is within the Naval reservation. [Rev.
Cortez] presented what he called as a survey map (Exh. "H") indicating the... location of the
area claimed by the Church of the Living God and/or Rev. Claudio Cortez with an
approximate area of 50 hectares identified as Exh. "H-4". However, the Survey Map
allegedly prepared by [a] DENR personnel is only a sketch map[,] not a survey map as
claimed by [Rev.
Cortez]. Likewise, the exact boundaries of the area [are] not specifically indicated.
For this reason, there is merit to the contention of [Biñas] that [Rev. Cortez]' claim to the 50
hectares of land identified as Exh. ["]H-4" is unclear and ambiguous. It is a settled
jurisprudence that mandatory injunction is the strong arm of equity that never ought to be...
extended unless to cases of great injury, where courts of law cannot afford an adequate and
commensurate remedy in damages. The right must be clear, the injury impending or
threatened, so as to be averted only by the protecting preventive process of injunction.
Admittedly, the documentary exhibits of [Rev. Cortez] tended only to show that [he] has a
pending application of patent with the DENR. Even so, [Rev. Cortez] failed to present in
evidence the application for patent allegedly filed by [him] showing that he applied for patent
on... the entire 50 hectares of land which he possessed or occupied for a long period of
time. Under the circumstances, therefore, the title of petitioner to the 50 hectares of land in
Palaui Island remains unclear and doubtful, and [is] seriously disputed by the government.
More significantly, at the time that Proc. No. 201 was issued on May 22, 1967, [Rev. Cortez]
has not perfected his right over the 50 hectares of land nor acquired any vested right
thereto considering that he only occupied the land as alleged by him in 1962 or barely five
(5)... years before the issuance of the Presidential Proclamation. Proclamation No. 201 had
the effect of removing Palaui Island from the alienable or disposable portion of the public
domain and therefore the island, as of the date of [the] Issuance [of the proclamation], has
ceased to... be disposable public land.
However, the court is not unmindful that [Rev. Cortez] has lawfully possessed and occupied
at least five (5) hectares of land situated at the western portion of the Palaui Island identified
as Exh "H-4". During the hearing, Cmdr. Rogelio Biñas admitted that when he was
assigned... as Commanding Officer in December 1999, he went to Palaui Island and [saw
only] two (2) baluga families tilling the land consisting of five (5) hectares. Therefore, it
cannot be seriously disputed that [Rev. Cortez] and his baluga tribesmen cleared five (5)
hectares of land for... planting and cultivation since 1962 on the western portion identified
as Exhibit "H-4". The Philippine Navy also admitted that they have no objection to settlers of
the land prior to the Presidential Proclamation and [Rev. Cortez] had been identified as one
of the early settlers... of the area before the Presidential Proclamation. The DENR also
acknowledged that [Rev. Cortez] has filed an application for patent on the western area and
that he must be allowed to pursue his claim.
Although the court is not persuaded by the argument of [Rev. Cortez] that he has already
acquired vested rights over the area claimed by him, the court must recognize that [Rev.
Cortez] may have acquired some propriety rights over the area considering the directive of
the DENR... to allow [Rev. Cortez] to pursue his application for patent. However, the court
wants to make clear that the application for patent by [Rev. Cortez] should be limited to an
area not to exceed five (5) hectares situated at the western portion of x x x Palaui Island
identified in... the sketch map as Exh. "H-4." This area appears to be the portion where
[Rev. Cortez] has clearly established his right or title by reason of his long possession and
occupation of the land.
On July 3, 2007, the RTC rendered its Decision[11] making the injunction final and
permanent. In so ruling, the said court made reference to the Indigenous Peoples' [Fight]
Act (EPRA) as follows:
The Indigenous [Peoples' Right] Act should be given effect in this case. The affected
community belongs to the group of indigenous people which are protected by the State of
their rights to continue in their possession of the lands they have been tilling since time
immemorial.
No subsequent passage of law or presidential decrees can alienate them from the land they
are tilling.[12]
In its Decision[17] dated June 29, 2011, the CA upheld the RTC's issuance of a final
injunction
Issues:
whether Rev. Cortez is entitled to a final writ of mandatory injunction.
Ruling:
We grant the Petition.
while Rev. Cortez relies heavily on his asserted right of possession, he, nevertheless, failed
to show that the subject area over which he has a claim is not part of the public domain and
therefore can be the proper object of possession.
Pursuant to the Regalian Doctrine, all lands of the public domain belong to the State.
Hence, "[a]ll lands not appearing to be clearly under private ownership are presumed to
belong to the State. Also, public lands remain part of the inalienable land of... the public
domain unless the State is shown to have reclassified or alienated them to private
persons."[45] To prove that a land is alienable, the existence of a positive act of the
government, such as presidential proclamation or an executive order; an... administrative
action; investigation reports of Bureau of Lands investigators; and a legislative act or a
statute declaring the land as alienable and disposable must be established.[46]
In this case, there is no such proof showing that the subject portion of Palaui Island has
been declared alienable and disposable when Rev. Cortez started to occupy the same.
Hence, it must be considered as still inalienable public domain.
The same goes true even if Proclamation No. 201 and Proclamation No. 447 were made
subject to private rights.
As there has been no showing that the subject parcels of land had been segregated from
the military reservation, the respondents had to prove that the subject properties were
alienable or disposable land of the public domain prior to its withdrawal from sale and...
settlement and reservation for military purposes under Presidential Proclamation No. 265.
Without first determining the nature and character of the land, all other requirements such
as length and nature of possession and occupation over such land do not come into play.
The required length of possession does not operate when the land is part of the public...
domain.
In view of the foregoing, the Court finds that Rev. Cortez failed to conclusively establish his
claimed right over the subject portion of Palaui Island as would entitle him to the issuance of
a final injunction.
Principles:
An inalienable public land cannot be appropriated and thus may not be the proper object of
possession. Hence, injunction cannot be issued in order to protect one's alleged right of
possession over the same.

SPOUSES DELA ROSA, petitioners, vs. SANTIAGO CARLOS and TEOFILA PACHECO,
respondents.

This case stemmed from a complaint for forcible entry filed by Spouses Dela Rosa against Santiago
andTeofila with the MTC of Paombong, Bulacan (MTC).In their complaint filed the Spouses Dela
Rosa alleged that they are the owners of a house and lot(Property) with an area of 352 square
meters located at No. 25 San Roque, Paombong, Bulacan. SpousesDela Rosa claimed that
Leonardo Carlos (Leonardo) transferred to them the ownership of the Propertyunder the Absolute
Deed of Sale executed on 1 September 1966. The Spouses Dela Rosa registered on 6October 1966
the Deed of Sale under Act No. 3344 with the Register of Deeds of Bulacan. The SpousesDela Rosa
asserted that they renovated the house, furnished and occupied the same from 1966 to thepresent.
Since the Spouses Dela Rosa work and their children study in Manila, they reside in theProperty
only during weekends and holidays. However, they padlock the house on the Property whilethey are
away and instruct relatives who live nearby to watch over the Property. The Spouses Dela
Rosafurther asserted that they have been paying the taxes for the land since 1966 to 1997 and for
the housefrom 1966 to 1993. In addition, the Spouses Dela Rosa had a perimeter fence built to
separate theProperty from the municipal road and to protect it from trespassers.The Spouses Dela
Rosa also asserted that in October 1997, they discovered that, through stealth andwithout their
knowledge and consent, Santiago had built a house on a vacant lot of the Property.Santiago did not
secure the necessary building permit from the Municipal Engineers Office. Teofila hadalso been
transferring furniture to the house and sleeping there. On 20 November 1997, the SpousesDela
Rosa demanded that Santiago and Teofila demolish the house, remove their furniture and vacatethe
premises within ten days from receipt of the letter. However, Santiago and Teofila did not heed
thedemand.In their answer, Santiago and Teofila alleged that they are the surviving heirs of the
Spouses LeonardoCarlos. As heirs of the Spouses Carlos, they, along with Lucila Dela Rosa, are
co-owners of the Property.They contended that the Spouses Dela Rosa obtained the Deed of Sale
through fraud and undueinfluence and that their mother did not consent to the sale of the Property
which they claimed asconjugal. They maintained that the Spouses Dela Rosa were never in
possession of the Property becausethe latter only went there to visit their parents, and not as
owners. Insisting that they have beenoccupying the Property since birth, Santiago claimed that he
constructed the house on the Property inthe concept of a co-owner.After submission of the

parties’
 position papers, the MTC hereby rendered declaring the Spouses DelaRosa to be entitled to the
property1. The Santiago and Teofila, their heirs, assigns or any other persons claiming any right or
interest overthe subject parcel of land under or in their names to vacate the same and surrender
peaceful possessionthereof in favor of the Spouses Dela Rosa;2. The Santiago and Teofila to pay
the Plaintiffs damages limited to the fair rental value for the use andoccupation of the premises in the
amount of P2,500.00 a month from the date of the discovery of theconstruction of the improvement
(October 1997) until they finally vacate and restore full possessionthereof to Spouses Dela Rosa3.
P20, 000.00 as

attorney’s

fees and costs;

RTC affirmed in toto the decision of the MTC.

The Ruling of the Trial Courts in favor of the Spouses Dela Rosa, held in part:The evidence at hand
disclosed that the Plaintiffs took possession of the subject premises upon theexecution of the sale
on September 1, 1966 and has been in occupancy thereof since then up to thepresent. Under the
law, possession is transferred to the vendee by virtue of the notarized deed ofconveyance. Under
Article 1498 of the Civil Code of the Philippines, when the sale is made through apublic instrument,
the execution thereof shall be equivalent to the delivery of the object of the contract,if from the deed
the contrary does not appear or cannot clearly be inferred. (Ong Ching Po, et al. vs. CA,239 SCRA
341)In the same vein, Article 531 of the statute is explicit, thus: Possession is acquired by the
materialpossession of a thing or the exercise of a right, or by the fact that it is subject to the action of
our will orby the proper acts or legal formalities established for acquiring such right. Aside from the
legalformalities as mentioned, Plaintiffs prior material occupation or possession is supported by
photographsdepicting their residence and their furnishings thereon. Possession in the eyes of the
law does not meanthat a man has to have his feet on every square meter of ground before it can be
said that he is inpossession. It is sufficient that petitioner (in this case, the Plaintiffs) was able to
subject the property tothe action of his will (Somodio vs. CA, 235 SCRA 307).Finding that the MTCs
factual findings are clear and supported by more than mere preponderance ofevidence, the RTC
affirmed in toto the decision of the MTC. Consequently, Santiago and Teofila filed apetition for
review with the CA.CA on appeal REVERSED and SET ASIDE and another rendered DISMISSING
respondents complaint forforcible entry against petitioners.

RTC affirmed in toto the decision of the MTC.

The CA held that the execution of the deed of sale did not transfer physical possession of the
Propertydespite Article 1498 of the Civil Code, which contemplates of constructive, not physical
possession. Theappellate court also found that there was an obstacle to the delivery of possession
because the SpousesCarlos, Santiago and Teofila were residing and continued to reside in the
Property.Noting that the Spouses Dela Rosas position paper did not attach the affidavits of
witnesses requiredunder Section 10 of Rule 70, the appellate court ruled that the Spouses Dela
Rosa failed to prove priorpossession of the Property. The appellate court pointed out that instead of
proving prior possession, theSpouses Dela Rosa admitted the contrary. In their opposition to the
motion to dismiss, the Spouses DelaRosa stated that they do not actually reside in the Property but
in Manila and visit the Property onlyduring weekends and vacations. The CA held that this admission
confirms Santiago and Teofilas claimthat they have always been in physical possession of the
Property since birth.The CA also held that the Spouses Dela Rosa did not verify their complaint in
violation of Section 4 ofRule 70. Neither did they attach a certification against forum shopping in
violation of Section 5 of Rule 7.
3Moreover, the appellate court ruled that the sale, without the consent of Benita Carlos, is void.
Since thesale is void, no title passed to the Spouses Dela Rosa.Lastly, the CA ruled that assuming
the sale is valid, the sale would apply only to Leonardos share in theProperty. Benita retained her
one-half share in the Property that her children Santiago, Teofila, Lucilaand Francisco acquired by
succession on her death. Thus, Lucila Dela Rosa may not dispossess her co-owners Santiago and
Teofila of the Property.The IssuesWON the CA gravely erred on the following grounds:1.

In allowing a collateral attack on the validity of the deed of absolute sale in an ejectmentproceeding
and ruling that the same is void for lack of marital consent of Benita Carlos.2.

In declaring that petitioners failed to prove prior physical possession over the property despitethe
overwhelming evidence to the contrary.3.

In applying the rules of co-ownership over the property.We grant the petition.In a forcible entry case,
the principal issue for resolution is mere physical or material possession(possession de facto) and
not juridical possession (possession de jure) nor ownership of the propertyinvolved. In the present
case, both parties claim prior possession of the Property. The Spouses Dela Rosaclaim that they
have been in possession of the Property since 1966 upon the execution of the deed ofsale by
Leonardo in their favor. On the other hand, Santiago and Teofila claim that they have
beencontinuously occupying the Property since birth and the Spouses Dela Rosa were never in
possession ofthe Property.While admitting that Santiago and Teofila used to reside in the Property
since birth, the Spouses DelaRosa contend that Santiago and Teofila moved out when they married
in 1961 and 1959, respectively.According to the Spouses Dela Rosa, Santiago and his family live in
Manila while Teofila occupies the lotadjacent to the Property bearing, however, the same address.
Santiago and Teofila did not dispute theseallegations by the Spouses Dela Rosa.On the other hand,
Santiago and Teofila admit that the Spouses Dela Rosa visit the Property. Visiting theProperty on
weekends and holidays is evidence of actual or physical possession. Even if the SpousesDela Rosa
were already residing in Manila, they could continue possessing the Property in Bulacan. Thefact of
their residence in Manila, by itself, does not result in loss of possession of the Property inBulacan.
The law does not require one in possession of a house to reside in the house to maintain
hispossession.In Somodio v. CA which the Spouses Dela Rosa cited, the petitioner there began
construction of astructure on his lot. His employment, however, took him to Kidapawan, North
Cotabato, and he left theunfinished structure to the care of his uncle. He would visit the property
every three months or onweekends when he had time. The Court ruled that possession in the eyes
of the law does not mean thata man has to have his feet on every square meter of the ground before
he is deemed in possession.There is no cogent reason to deviate from this doctrine. Santiago and
Teofila likewise do not deny that the Spouses Dela Rosa renovated the house, furnishedthe same
and constructed a perimeter fence around the Property. Santiago and Teofila contend thatthese acts
did not include the right to possess physically the Property. These acts of dominion are
clearindications that the Spouses Dela Rosa were in possession of the Property. Santiago and
Teofila failed toexplain convincingly how the Spouses Dela Rosa were able to renovate, furnish the
house and constructa perimeter fence around the Property without physically possessing the
Property. It is quite improbableto perform these acts without the Spouses Dela Rosa physically
possessing the Property.Santiago and Teofila likewise challenged the validity of the sale between
their father Leonardo and theSpouses Dela Rosa. The sale transpired before
Leonardo’s

death. The Spouses Dela Rosa registered theDeed of Sale with the Registry of Deeds of
Paombong, Bulacan. If Santiago and Teofila truly believed thatthe Deed of Sale is void, they should
have filed an action to annul the same, but they did not. Santiagoand Teofila questioned the validity
of the Deed of Sale only when the Spouses Dela Rosa filed theforcible entry case.However,
Santiago and Teofila cannot properly challenge the validity of the Deed of Sale in theejectment case
because ejectment cases proceed independently of any claim of ownership. Santiagoand Teofila
claim that the Deed of Sale was executed without the consent of Benita, Leonardo

s spouse.They also claim that the Deed of Sale was executed through fraud and undue influence.
However, theseissues cannot properly be addressed in the present action. These issues can only be
resolved in aseparate action specifically for the annulment of the Deed of Sale. Resolution of these
issues, in turn,will determine whether the surviving heirs of the Spouses Carlos are co-owners of the
Property who arelikewise entitled to its possession. Co-ownership is only a necessary consequence
of the heirs successional rights to the Property, if any.

Banco Espanol Filipino v Peterson

Facts:On March 4, 1905, Banco Espanol Filipino (BEP) executed a contract of loan in favor of
Francisco Reyesfor P141 702.00. Reyes was already indebted to the bank for P84 415.00. His total
debt was thereforeP226 117.38. To secure payment of the P141k and the P84k, Reyes executed a
public instrument1. Mortgaging several of his properties2. Pledging part of his personal property to
BEP (P90 591.75 worth of wines,liquors and canned goods),which were stored at a warehouse he
rented in Manila BEP and Reyes agreed that the goods shouldbe delivered to Ramon
Garcia(depositary) for safekeeping. Reyes turned over the goods to R. Garcia bygiving him the
warehouse keys. On September 29, 1905, BEP and Reyes substituted Luis Sierra in placeof
R.Garcia as the depositary. On October 19, 1905, Juan Garcia (yes, related to Ramon) brought
anaction against Francisco Reyes and Ramon Agtarat. CFI Manila ruled against Reyes and Agtarat
for P15000.00. On the same day, Sheriff James Peterson entered the warehouse where the goods
pledged toBEP were stored under the custody of the depositary, Sierra. Peterson levied upon P30
000 worth of thegoods pledged to the bank, depriving the latter of possession of the same, as
stipulated in theMarch 4contract of loan.Issues:Was the contract of pledge between BEP and Reyes
to secure a loan valid?Was Reyes still in possession of the pledged property, thereby making
thecontract defective?Held :The contract was valid. Reyes was no longer in possession of the
pledgedproperty. BEP had symbolicpossession of the same. The contract complies with all the
requisites of a valid pledge contract, asprescribed by the Civil Code:1. The property was pledged to
secure a debt2. The date of execution, the terms of the pledge, and the property pledged appeared
in a publicinstrument3. The property pledged was placed in the hands of a third person (in thiscase,
Sierra) by commonconsent of the debtor and creditor, under the supervision of an agent (in this
case, Rodriguez) of the bankReyes, after the pledge, parted with the possession of his personal
property, which was delivered to athird person (R. Garcia, and subsequently, Sierra) who would take
care of them for BEP. Sierra was thethird person appointed by common consent of BEP
(creditor)and Reyes (debtor), to hold possession overthe goods pledged in favor of the bank under
the direct supervision of Rodriguez, an agent specificallyappointed by the bank. The contract in
question was, therefore, a perfect contract of pledge under articles1857 and 1863 of the Civil Code,
it having been conclusively shown that the pledgee (BEP) took chargeand possession of the goods
pledged through a depositary (Sierra) and a special agent (Rodriguez)appointed by it, each of whom
had a duplicate key to the warehouse wherein the said goods were stored,and that the pledgee
(BEP), itself, received and collected the proceeds of the goods as they weresold. The legality of the
pledge was not affected by the fact that the goods remained in the warehouseformerly rented by
Reyes the pledgor. This is because after the pledge had been agreed upon, and afterthe depository
appointed with common consent of the parties had taken possession of the said property,Reyes
could no longer dispose of the same because BEP was the only party allowed to do so through
Sierra and Rodriguez. The symbolic transfer of the goods through delivery of the keys to the
warehousewhere the goods were stored was sufficient evidence to show that Sierra, the depositary
appointed byboth BEP and Rodriguez, was legally placed in possession of the goods. Since the
contract of pledgewas valid, BEP had a better right to the goods compared to J. Garcia. The Court
ordered either the returnof the improperly levied goods, or the payment of their value, P30 000.

MANGASER vs.

UGAYFACTS:

On October 30, 2007, petitioner Anacleto Mangaser filed a complaint for ForcibleEntry with
Damages against respondent Dionisio Ugay). In his complaint, petitioner allegedthat he was the
registered owner and possessor of a parcel of land situated in Santiago Sur,Caba, La Union,
covered by OCT No. RP-174 (FP-13 787) and Tax Declaration No. 014-00707;that on October 31,
2006, petitioner, discovered that respondent stealthy intruded andoccupied a portion of his property
by constructing a residential house thereon without hisknowledge and consent.Respondent denied
the material allegations of the complaint and put up the followingdefenses, to wit: that he had been a
resident of Samara, Aringay, La Union, since birth andwhen he reached the age of reason, he
started occupying a parcel of land in that place whichis now designated as Santiago Sur, Caba, La
Union. He introduced improvements on saidproperty and fenced it based on his recollection.
Respondent further alleged that petitionerwas never in actual possession of the property occupied
by him, and it was only on October31, 2006 when he discovered the alleged intrusion.Petitioner
argues that in ejectment cases, possession of the land does not only mean actualor physical
possession or occupation but also by the fact that a land is subject to the actionof one's will or by
proper acts and legal formalities established for acquiring such right; thatthe CA should have
considered OCT No. RP-174(13789) his tax declaration as proofs of priorphysical possession over
the property; and that the issuance of the same are considered toby law as proper acts and legal
formalities established for acquiring such right.

Issue I:

Whether or not petitioner was able to establish prior possession for forcible entry toprosper.

HELD:

Yes. Prior possession is established by petitioner.For a forcible entry suit to prosper, the plaintiffs
must allege and prove: (a) that they haveprior physical possession of the property; (b) that they were
deprived of possession either byforce, intimidation, threat, strategy or stealth; and, (c) that the action
was filed within one(1) year from the time the owners or legal possessors learned of their deprivation
of thephysical possession of the property.There is only one issue in ejectment proceedings: who is
entitled to physical or materialpossession of the premises, that is, to possession de facto, not
possession de Jure? Issues asto the right of possession or ownership are not involved in the action;
evidence thereon is notadmissible, except only for the purpose of determining the issue of
possession.As a rule, the word "possession" in forcible entry suits indeed refers to nothing more
thanprior physical possession or possession de facto, not possession de Jure or legal possessionin
the sense contemplated in civil law. Title is not the issue, and the absence of it "is not aground for
the courts to withhold relief from the parties in an ejectment case."The Court, however, has
consistently ruled in a number of cases that while prior physicalpossession is an indispensable
requirement in forcible entry cases, the dearth of merit inrespondent's position is evident from the
principle that possession can be acquired not onlyby material occupation, but also by the fact that a
thing is subject to the action of one's willor by the proper acts and legal formalities established for
acquiring such right.Possession can be acquired by juridical acts. These are acts to which the law
gives the forceof acts of possession. Examples of these are donations, succession, execution and
registrationof public instruments, inscription of possessory information titles and the like. The reason
forthis exceptional rule is that possession in the eyes of the law does not mean that a man hasto
have his feet on every square meter of ground before it can be said that he is inpossession. It is
sufficient that petitioner was able to subject the property to the action of hiswill. Here, respondent
failed to show that he falls under any of these circumstances. He couldnot even say that the subject
property was leased to him except that he promised that hewould vacate it if petitioner would be able
to show the boundaries of the titled lot.In the case at bench, the Court finds that petitioner acquired
possession of the subjectproperty by juridical act, specifically, through the issuance of a free patent
under.

CASE NO. 10:G.R. No. 172547 June 30, 2009PRECY BUNYI an !I"A BUNYI,

Petitioners, vs.

#E S.#AC$OR,

Respondent.Facts:

Respondent Fe Factor and Gloria Factor Labao were co-owners of an 18-hectare parcel of land in
Almanza, Las Pinas "it#. $he ownership of the landori%inated from respondent&s paternal
%randparents "onstantino Factor and 'a(ra'a#(%a-Factor who had been in act(al,contin(o(s, peacef(l,
p(blic, adverse and e)cl(sivepossession and occ(pation of the land even before1*+.

n 1**, the R$" %ranted the petition of"onstantino and 'a(ra&s children for /ri%inalRe%istration and
"on0irmation of mperfect $itleto the said parcel of land. $he# sold seven hectaresof the propert#.
$he siblin%s, e)cept nri2(eFactor, respondent&s father, shared and divided theproceeds of the
sale amon% themselves, with thea%reement that nri2(e wo(ld have as his sharethe portion of the
propert# 3nown as the Factorcompo(nd, where several ho(ses wereconstr(cted incl(din% a rest
ho(se. Petitionerswere amon% the tenants in one of the ho(ses.


4hen nri2(e died, the propert# was entr(sted toGloria who, to%ether with her h(sband R(benLabao
and their son Re%%ie F. Labao, lived in $ipa,$a%(i%, 'etro 'anila b(t visited and sometimessta#ed
in the rest ho(se beca(se Gloria collectedthe rentals of the residential ho(ses and oversawthe Factor
compo(nd. 4hen Gloria died on5an(ar# 16, 7++1, the administration andmana%ement of the Factor
compo(nd incl(din%the s(b ect rest ho(se, passed on to respondent Fe9. Factor as co-owner of the
propert#. As an act of%ood will and compassion considerin% that R(benwas sic3, she let the latter
live in the propert#. /ne#ear thereafter, he %ot married to Prec#, b(tevent(all# died.

Respondent discovered that petitioners forcibl#opened the doors of the rest ho(se and stole allthe
personal properties owned b# the Factorfamil# and then a(dacio(sl# occ(pied thepremises.
Respondent alle%ed that petitioners(nlawf(ll# deprived her and the Factor famil# ofthe s(b ect
propert#&s lawf(l (se and possession.Petitioners, for their part, 2(estioned Fe&s claim ofownership
of the s(b ect propert# and the alle%edprior ownership of her father nri2(e Factor. $he#asserted
that the s(b ect propert# was owned b#R(ben Labao, and that petitioner Prec# with herh(sband
moved into the s(bect propert#, whilepetitioner 'ila (n#i, mother of Prec#, remainedin ;o. 8
Antioch 9t.

'"$" r(led in favor of respondent, which waslater on af0irmed b# R$" and then "A.ss(e: 4hether the
<onorable "o(rt of Appeals serio(sl#erred when it misappreciated the fact that the respondenthas a
better ri%ht of ph#sical and material possession ofthe s(bect propert#.R(lin%: ;/.

For one to be considered in possession, one neednot have act(al or ph#sical occ(pation of
ever#s2(are inch of the propert# at all times. Possessioncan be ac2(ired not onl# b# material
occ(pation,b(t also b# the fact that a thin% is s(bect to theaction of one&s will or b# the proper acts
and le%alformalities established for ac2(irin% s(chri%ht. Possession can be ac2(ired b# (ridical
acts.$hese are acts to which the law %ives the force ofacts of possession. )amples of these
aredonations, s(ccession, e)ec(tion and re%istrationof p(blic instr(ments, and the inscription
ofpossessor# information titles.

$he ri%ht of respondent&s predecessors over thes(bect propert# is more than s(f0icient to
(pholdrespondent&s ri%ht to possession over the same.Respondent&s ri%ht to the propert# was
vested inher alon% with her siblin%s from the moment oftheir father&s death. As heir, respondent
had theri%ht to the possession of the propert#, which isone of the attrib(tes of ownership. 9(ch ri
%hts areenforced and protected from encroachments madeor attempted before the (dicial
declaration sincerespondent ac2(ired hereditar# ri%hts even before (dicial declaration in testate or
intestateproceedin%s.

As a conse2(ence of co-ownership, soon after thedeath of Gloria, respondent, as one of thes(rvivin%

co-owners, ma# be s(bro%ated to theri%hts of the deceased co-owner, which incl(desthe ri%ht to
the administration and mana%ement of the s(bect propert#.


As fo(nd b# the "o(rt of Appeals, petitioners&(ns(pported claim of possession m(st #ield tothat of the
respondent who traces her possessionof the s(bect propert# to her predecessors-in-interest who
have alwa#s been in possession of thes(bect propert#. ven ass(min% that respondentwas never
a resident of the s(bect propert#, sheco(ld le%all# contin(e possessin% the propert#.=isitin% the
propert# on wee3ends and holida#s isevidence of act(al or ph#sical possession. $he factof her
residence somewhere else, b# itself, doesnot res(lt in loss of possession of the s(b ectpropert#.

$he "o(rt stresses, however, that itsdetermination of ownership in the instant case isnot 0inal. t is
onl# a provisional determination forthe sole p(rpose of resolvin% the iss(e ofpossession. t wo(ld not
bar or pre(dice aseparate action between the same partiesinvolvin% the 2(ietin% of title to the
s(bectpropert#.

As re%ards the means (pon which the deprivationtoo3 effect, it is not necessar# that the respondent

Case Name:

MIGUEL ESCRITOR, JR., ANGEL ESCRITOR, RAMONESCRITOR, JUANA ESCRITOR,

CONCORDIA ESCRITOR, IRENEESCRITOR, MATILDE ESCRITOR, MERCEDES ESCRITOR,
HEIRS OFLUIS ESCRITOR, represented by RUPERTO ESCRITOR, HEIRS OFPEDO ESCRITOR,
represented by SUSANA VILLAMENA, LINAESCRITOR, ENDELINA ESCRITOR, ALFREDO
ESCRITOR, SUSANAESCRITOR !nd CARMEN ESCRITOR,

petitioners,vs.

INTERMEDIATE APPELLATE COURT !nd SIMEON ACUNA,

respondents.GR No. 71283Date: November 12, 1987Facts

Lot No. 279, !ocated at "timonan, #$e%on, &as t'e s$b(ect o) cadastra! proceedin*s in t'e Co$rt o)
First+nstance. i*$e! -scritor, as c!aimant, )i!ed an ans&er t'ereto dec!arin* 'is o&ners'ip over t'e !ot
a!!e*in*t'at 'e ac$ired it b/ in'eritance )rom 'is deceased )at'er. 0'e !ot 'avin* become $ncontested,
on!/ i*$e!-scritor appeared in order to add$ce 'is evidence o) o&ners'ip.

0'e Co$rt rendered a decision in t'e abovementioned case, Cadastra! Case No. 72, ad($dicatin* t'e !
ot&it' its improvements in )avor o) c!aimant -scritor and con)irmin* 'is tit!e t'ereto. +mmediate!/
t'erea)ter,-scritor too possession o) t'e propert/.
•

0'e Co$rt directed t'e C'ie) o) t'e Genera! Land Re*istration ))ice to iss$e t'e decree o) re*istration
in)avor o) -scritor, t'e decision in Cadastra! Case No. 72 'avin* become )ina!.

imeon . "c$na, t'e 'erein respondent, )i!ed a petition )or revie& o) t'e above4mentioned
decisioncontendin* t'at it &as obtained b/ c!aimant -scritor t'ro$*' )ra$d and misrepresentation. 0'e
petition &as*ranted and a ne& 'earin* &as set. 5'i!e t'e proceedin*s &ere *oin* on, c!aimant -scritor
died. 6is 'eirs,t'e petitioners in t'e case, too possession o) t'e propert/.

0'irteen /ears a)ter t'e disp$ted decision &as rendered, t'e Co$rt ad($dicated Lot No. 279 in )avor
o)respondent "c$na, orderin* petitioners to vacate t'e !and. " &rit o) possession &as !ater iss$ed
andpetitioners vo!$ntari!/ *ave $p t'eir possession.

ore t'an )o$r /ears !ater, respondent "c$na )i!ed &it' t'e same Co$rt a comp!aint )or recover/
o)dama*es a*ainst petitioners )or t'e )r$its o) !ot No. 279 &'ic' &as a!!e*ed!/ possessed b/ t'e !
atter$n!a&)$!!/ )or t'irteen /ears. "ccordin* to t'e respondent, t'e re*istration o) t'e said !ot &as
e))ect$ated b/t'e deceased c!aimant -scritor t'ro$*' )ra$d, ma!ice, and misrepresentation.

0'e !o&er co$rt rendered a decision dismissin* "c$as comp!aint )or dama*es, )indin* t'at
t'o$*'petitioners en(o/ed t'e )r$its o) t'e propert/, t'e/ &ere in *ood )ait' possessin* $nder a ($st tit!e,
and t'eca$se o) action, i) t'ere &as an/, 'as a!read/ prescribed.

n appea!, t'e +ntermediate "ppe!!ate Co$rt reversed t'e decision o) t'e !o&er co$rt orderin*
petitioners topa/ t'e )r$its received )or t'e 13 /ears t'e/ 'ave been in $n!a&)$! possession o) t'e
propert/.+ss$es5'et'er or not t'e petitioner s'o$!d be !iab!e )or dama*es No.R$!in*+t s'o$!d be
remembered t'at in t'e )irst decision o) t'e cadastra! co$rt dated a/ 1;, 19;8, Lot No. 279
&asad($dicated in )avor o) c!aimant -scritor, petitioners predecessor4in4interest. +n t'is decision,
t'e said co$rt )o$nd toits satis)action t'at c!aimant -scritor ac$ired t'e !and b/ in'eritance )rom 'is )
at'er &'o in t$rn ac$ired it b/p$rc'ase, and t'at 'is open, p$b!ic, contin$o$s, adverse, e<c!$sive and
notorio$s possession dated bac to t'eFi!ipino4panis' Revo!$tion. +t m$st a!so be reca!!ed t'at in
its rder )or t'e iss$ance o) decrees dated =$!/ 1;,19;8, t'e same Co$rt dec!ared t'at t'e
above4mentioned decision 'ad become )ina!. i*ni)icant!/, no&'ere d$rin*t'e entire cadastra!
proceedin* did an/t'in* come $p to s$**est t'at t'e !and be!on*ed to an/ person ot'er t'an-scritor. n t'e
basis o) t'e a)orementioned )avorab!e ($d*ment &'ic' &as rendered b/ a co$rt o) competent
($risdiction,-scritor 'onest!/ be!ieved t'at 'e is t'e !e*a! o&ner o) t'e !and. 5it' t'is &e!!4*ro$nded be!ie) o)
o&ners'ip, 'econtin$ed in 'is possession o) Lot No. 279. 0'is cannot be cate*ori%ed as possession
in bad )ait'. "s de)ined in t'e !a&, a possessor in bad )ait' is one in possession o) propert/ no&in* t'at
'is tit!e t'ereto isde)ective. 6ere, t'ere is no s'o&in* t'at -scritor ne& o) an/ )!a& in 'is tit!e. Nor &as it
proved t'at petitioners &erea&are t'at t'e tit!e o) t'eir predecessor 'ad an/ de)ect.Nevert'e!ess,
ass$min* t'at c!aimant -scritor &as a possessor in bad )ait', t'is s'o$!d not pre($dice
'iss$ccessors4in4interest, petitioners 'erein, as t'e r$!e is t'at on!/ persona! no&!ed*e o) t'e )!a& in
ones tit!e or
Cequena v. Bolante
2019-05-21administrator

FERNANDA MENDOZA CEQUEÑA and RUPERTA MENDOZA LIRIO, petitioners,

vs.
HONORATA MENDOZA BOLANTE, respondent.

G.R. No. 137944 (330 SCRA 216)

April 6, 2000

Panganiban, J.

FACTS:
Prior to 1954, the land having an area of 1,728 square meters and covered by Tax
Declaration No. 26-0027 situated in Binangonan, Rizal was declared for taxation
purposes in the name of Sinforoso Mendoza, the father of respondent. Sinforoso died in
1930. On the basis of an affidavit, the tax declaration in the name of Sinforoso Mendoza
of the contested lot was cancelled and subsequently declared in the name of Margarito
Mendoza, the father of the petitioners and brother of Sinforoso.

During the cadastral survey, respondent Honorata is the present occupant of the land
together with Miguel Mendoza, another brother of the petitioners. The trial court
rendered the petitioners as the lawful owner and possessors of the land. However, the
Court of Appeals reversed the decision because the genuineness and the due
execution of the affidavit. It was said to be insufficient to overcome the denial of
respondent and her mother. Moreover, the probative value of petitioners’ tax receipts
and declarations paled in comparison with respondent’s proof of ownership of the
disputed parcel. The actual, physical, exclusive and continuous possession by
respondent since 1985 gave her a better title under Article 538 of the Civil Code. The
petitioners contended otherwise that she came into possession through force and
violence, contrary to Article 536 of the Civil Code.

ISSUES:
1.) Whether or not the respondent has the actual, physical, exclusive and continuous
possession of the land.
2.) Whether or not tax declarations and receipts are conclusive evidence of ownership
or possession.

HELD:
1.) Yes. Possession by the petitioner before 1985 was not exclusive, as the
respondent also acquired it before 1985. The records show that the petitioners’ father
and brother, as well as the respondent and her mother were simultaneously in adverse
possession of the land.
Based on Article 538 of the Civil Code, the respondent is the preferred possessor
because, benefitting from her father’s tax declaration of the subject lot since 1926, she
has been in possession thereof for a longer period. On the other hand, petitioners’
father acquired joint possession only in 1952.

2.) No. Tax declarations and receipts are not conclusive evidence of ownership. At
most, they constitute mere prima facie proof of ownership or possession of the property
for which taxes have been paid. In the absence of actual public and adverse
possession, the declaration of the land for tax purposes does not prove ownership. The
petitioners’ claim of ownership of the whole parcel has no legal basis.

Macasaet vs Macasaet G.R. 154391 –92 September 30, 2004Facts:1.Petitioners Ismael and
Teresita Macasaet and Respondents Vicente and Rosario Macasaet are first-degree relatives.
Ismael is the son of respondents, and Teresita is his wife.2.The parents alleged that they were the
owners of two (2) parcels of land covered by Transfer Certificate of Title (TCT) Nos. T-78521 and T-
103141, situated in Banay-banay, Lipa City; that by way of a verbal lease agreement, their son and
his wife occupiedthese lots in March 1992 and used them as their residence and the situs of their
construction business.3.Ismael and Teresita denied the existence of any verbal lease agreement.
They claimed that their parents had invited them to construct their residence and business on the
subject lots. They added that it was the policy of their parents to allot the the land owned as an
advance grant of inheritance in favor of their children. Thus, they contended that the lot covered by
TCT no. T-103141 had been allotted to Ismael as advance inheritance. On the other hand, the lot
covered by TCT-78521 was allegedly given to petitioners as payment for construction materials used
in the renovation of their parent’s house.4.On December 10, 1997, the parents filed with the MTCC
of Lipa City an ejectment suit against their children for failure to pay the agreed rental despite
repeated demands.5.The MTCC ruled in favor of the parents and ordered the children to vacate the
premises. It opined that the children had occupied the lots, not by virtue of a verbal lease agreement
but by toleranceof the parents. As their stay was by mere tolerance, the children were necessarily
bound by an implied promise to vacate the lots upon demand. The MTCC dismissed their contention
that one lot had been allotted as an advance inheritance, on the ground that succcesional rights
were inchoate. It disbelieved that the other parcel had been given as payment for construction
material.6.On appeal, the RTC upheld the findings of the MTCC. RTC allowed the parents to
appropriate the building and other improvements introduced by the children, after payment by
indemnity provided for bt Article 448 in relation to Article 546 and 548 of the Civil Code.7.On an
appeal by both parties to the CA which were consolidated, the CA sustained the finding of the lower
courts that the children had been occupying the subject lots only by the tolerance of their parent.
Thus, possession of the subject lots by the children became illegal upon their receipt of letter to
vacate it.The CA modified the RTC Decisionby declaring that Article 448 of the Civil Code was
inapplicable. The CA opined that under Article 1678 of the same Code, the children had the right to
be reimbursed for one half of the value of the improvements made.8.Not satisfied with the CA’s
ruling, the children brought the case to the Supreme Court.Issues:1.WON the children can be
ejecteda.Based on the parent’s love reasons for gratuitously allowing the children to use the lots, it
can be safely concluded that the agreement subsisted as long as the parents and the children
benefitted from the arrangement. Effectively, there is a resolutory condition existing between the
parties occurs –like a change of ownership, necessity, death of either party or unresolved conflict or
animosity –the agreement maybe deemed terminated. When persistent conflict and animosity
overtook the love and solidarity between the parents and the children, the purpose of the agreement
ceased. The children had any cause for continued possession of the lots. Their right to use became
untenable. It ceased upon their receipt of the notice to vacate. And because they refused to heed the
demand, ejectment was the proper remedy against them. b.The children had no right to retain
possession. The right ofthe children to inherit from their parents is merely inchoate and is vested
only upon the latter’s demise. Rights of succession are transmitted only from the moment of death of
the decedent. Assuming that there was an “allotment” of inheritance, ownership nonetheless
remained with the parents.c.The children’s allegation that the indebtness of their parent to them has
been paid through dation cannot be given credence as there were no sufficient proof of a
settlement or contract of dation to settle the alleged debt, and is inconsistent of the separate action
by the children to recover the same debt.d.As a rule, the right of ownership carries with it the right of
possession.2.Rights of a Builder in Good faitha.As applied to the present case, accession refersto
the right of owner to everything that is incorporated or attached to the property. Accession industrial
–building, planting and sowing on an immovable –is governed by Articles 445 to 456 of the Civil
Code. b.As the court found that the children possession of the two lots was not by mere tolerance,
the applicable rule would be Article 448.This article has been applied to cases wherein a builder had
constructed improvements with the consent of the owner.

German Management Services vs. CA

German Management Services vs. CA, GR No. 76217 September 14, 1989

Facts:

Spouses Jose are the owners of a parcel of land in Antipolo. They executed a special power of
attorney authorizing German management Services to develop their property into a residential
subdivision. However, the property was being occupied by private respondents and twenty other
persons. They were asked to vacate but refused. PR filed an action for forcible entry and alleged
that they are mountainside farmers of the area and have occupied and tilled their farmholdings prior
to the promulgation of PD 27. They stated that they have been deprived of their property without due
process of law by means of force, violence and intimidation.

Issue:

Whether or not petitioner forcibly entered the property of the PR ( I know this is RPC- but involved
and prop)

Ruling:

Yes, the petitioner forcibly entered the property of the PR. In forcible entry, ownership is not an
issue. It may be a fact that the German Management was duly authorised by the owners to develop
the subject property, the actual possessors of the land, the Prs, can commence a forcible entry case
against the petitioner. Forcible entry is merely a quieting process and never determines the actual
title to an estate.

Case Digest: MWSS vs. Court of Appeals

Metropolitan Waterworks and Sewerage System vs. Court of Appeals

G.R. No. L-54526

Gutierrez, Jr., J.

Doctrine: 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:

In a civil case of possession by the City of Dagupan against the MWSS for recovery of possession
and ownership of the Dagupan Waterworks System, the trial court rendered a decision in favour of
the City of Dagupan. However, the trial court also held that MWSS was in bad faith, and was
therefore not entitled to their claim of Php255,000.00 for necessary and useful improvements upon
the disputed waterworks system.

ISSUES:

Whether or not MWSS has the right to remove all useful improvements introduced to the Dagupan
Waterworks System.

RULING:

NO. 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. 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.
Nuguid vs. Court of Appeals, and Guevarra

Nuguid vs. Court of Appeals, and Guevarra

171 SCRA 213

March 1989

FACTS:

The deceased spouses Victorino and Crisanta dela Rosa (spouses dela Rosa) were registered
owners of a parcel of land in Orani, Bataan, and covered by OCT No. 3778. On or about May 4,
1931, Victorino dela Rosa (widowed by then) sold one-half of the said property to Juliana Salazar for
P95.00. This sale between him and Salazar, though evidenced by a document, was not registered.
Nevertheless, Juliana Salazar constructed a house on the lot she purchased immediately after the
sale. On March 10, 1964, petitioner spouses Diosdado Nuguid and Marqiueta Venegas (spouses
Nuguid) caused the registration of a document entitled "Kasulatan ng Partihan at Bilihan"
(Kasulatan) dated June 6, 1961. In this document, Marciana dela Rosa, together with the heirs of
Victorino and Crisanta dela Rosa, sold to spouses Nuguid the entire area of the property for the sum
of P300.00. Subsequently, OCT No. 3778 was cancelled by the Register of Deeds of Bataan, and
TCT No. T-12782 was issued in the spouses Nuguid’s names.

Private respondents claimed that the presented by spouses Nuguid was forged. They also allegedly
discovered the forged deed as well as the certificate of title in the name of the petitioners much later,
that is, on February 28, 1978, when respondents Amorita Guevarra and Teresita Guevarra thought
of having the title of their grandmother Juliana Salazar, registered. On the other hand, spouse
Nuguid assert that in the latter part of 1960, Nicolas dela Rosa, uncle of respondent Marciana dela
Rosa and grandfather of the other heirs-signatories, offered to sell the subject land to them.
Apparently, Nicolas dela Rosa claimed that he had already purchased the shares of the heirs over
the subject property as evidenced by a private document entitled "Kasunduan" (Kasunduan) dated
August 31, 1955, and as a matter of fact, he had in his possession the original certificate of title
covering the property in the name of the deceased Victorino and Crisanta dela Rosa.

The CFI of Bataan dismissed the complaint filed by private respondents, but the Court of Appeals
reversed said decision and ordered the spouses Nuguid to execute a deed of reconveyance in favor
of herein respondents.
ISSUE:

Who is the rightful owner of the subject property?

COURT RULING:

The Supreme Court reinstated the decision of the CFI of Bataan. The basis for the Court of Appeals'
conclusion that petitioners were buyers in bad faith is ambiguous because said court relied on the
singular circumstance that the petitioners are from Orani, Bataan, and should have personally known
that the private respondents were the persons in actual possession. However, at the time of the
purchase, the spouses Nuguid dealt with Pedro Guevarra and Pascuala Tolentino, the latter being
the actual occupants. The respondents Guevarras, children of the said Pedro and Pascuala
Guevarra, came into the picture only after their parents died. As for the respondent heirs of Victorino
dela Rosa, their being in actual possession of any portion of the property was, likewise, simply
presumed or taken for granted by the Court of Appeals.

The private respondents cannot also honestly claim that they became aware of the spouses
Nuguid’s title only in 1978, because ever since the latter bought the property in 1961, the spouse
Nuguid have occupied the same openly, publicly, and continuously in the concept of owners, even
building their house thereon. For seventeen years they were in peaceful possession, with the
respondents Guevarras occupying less than one-half of the same property.

PEDRO P. PECSON, petitioner, vs.COURT OF

APPEALS, SPOUSES JUAN NUGUID and ERLINDA
NUGUID, respondents.
G.R. No. 115814 May 26, 1995
Facts:
Petitioner Pedro P. Pecson was the owner of a commercial
lot located in Kamias Street, Quezon City, on which he
built a four-door two-storey apartment building. For his
failure to pay realty taxes amounting to twelve thousand
pesos (P12,000.00), the lot was sold at public auction by
the city Treasurer of Quezon City to Mamerto
Nepomuceno who in turn sold it on 12 October 1983 to
the private respondents, the spouses Juan Nuguid and
Erlinda Tan-Nuguid, for one hundred three thousand
pesos (P103,000.00).
The petitioner challenged the validity of the auction sale
in Civil Case No. Q-41470 before the RTC of Quezon City.
In its decision of 8 February 1989, the RTC dismissed the
complaint, but as to the private respondents' claim that
the sale included the apartment building, it held that the
issue concerning it was "not a subject of the . . .
litigation." In resolving the private respondents' motion
to reconsider this issue, the trial court held that there
was no legal basis for the contention that the apartment
building was included in the sale.
Both the RTC and CA have ruled that the sale of the lot
was valid. And both courts have also ruled that what was
sold was only the lot resulting from unpaid realty tax, but
the valid sale does not include the apartment building.
Issue:
W/N Petitioner, Pedro Pecson, while being unpaid of the
cost of the building he built, is entitled to possession of
the apartment building and its rental income thereof.
Ruling:
Yes. Since the private respondents, spouses Nuguid,
have opted to appropriate the apartment building, the
petitioner, Pecson, is thus entitled to the possession and
enjoyment of the apartment building, until he is paid the
proper indemnity, as well as of the portion of the lot
where the building has been constructed. This is so
because the right to retain the improvements while the
corresponding indemnity is not paid implies the tenancy
or possession in fact of the land on which it is built,
planted or sown. The petitioner not having been so paid,
he was entitled to retain ownership of the building and,
necessarily, the income therefrom.

UNITED STATES vs. LAURENTE REY G.R. No. L-3326 September 7, 1907 Loss of Possession,
Robbery

OCTOBER 25, 2018

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FACTS:

On the 19th of September, 1905, silver and paper money amounting to 25,000 pesos belonging to
the firms of Urrutia & Co. and Muñoz & Co., was placed on the steamer Cantabria at Manila by said
firms for shipment.

5,000 pesos of the said money belonged to Muñoz & Co. and 20,000 pesos to Urrutia & Co.

On the 26th day of September the Cantabria was totally wrecked off the Island of Mababuy, every
person on her being drowned, the bills of lading of said money being lost, and the money sunk with
the ship.

On the 28th day of September, the defendant, Laurente Rey, with the assistance of several men
who were in his employ, proceeded to said wrecked steamer and willfully, unlawfully, and with the
intention of appropriating it to his own use took therefrom two boxes, one containing 10,000 pesos
and the other 5,000 pesos; that 10,000 pesos of the said money was the property of Urrutia & Co.
and 5,000 pesos was the property of Muñoz & Co.

The theory of the appellant is that the said property which was sunk with the wrecked steamer, the
said Cantabria, was abandoned properly and therefore, granting that he had taken possession of
said property and appropriated it to his own use, he was not guilty of the crime of robbery.
ISSUE:

Whether or not appellant is guilty of robbery.

RULING:

It was more than six weeks after the cyclone (in which the Cantabria was sunk) before any definite
knowledge was received in regard to the fate of the Cantabria, thus admitting that the owner of the
money alleged to has been robbed and no definite knowledge of its lost for six weeks or more after
the destruction of said ship.

Article 460 of the Civil Code provides how the possessor of property may lose his possession of the
same:

(1) By abandonment of the thing.

(2) By the transfer to another for a good and valuable consideration.

(3) By the destruction of total loss of the thing or by the thing becoming unmarketable.

(4) By the possession of another, even against the will of the former possessor, if the new possessor
has lasted more than one year.

The evidence shows, if it can be believed, that the defendant and his companions entered the
wrecked ship and removed therefrom the said money and appropriated the same to hiss own use in
about twenty-four hours after the time of sinking of the said ship. Can one be charged with the
abandonment of his property without even knowing that the same has passed out of his possession
or has been lost? We are of the opinion, and so hold, that this question must be answered in the
negative.
Manresa, in his Commentaries upon the provisions of the Civil Code, says:

He who has a right may renounce it. This act by which thing is voluntary renounced constitutes an
abandonment. There is no real intention to abandon a property when, as in the case of a shipwreck
or a fire, things are thrown into the sea upon the highway.

Certainly the owner of the property ca not be held to have abandoned the same until at least he has
some knowledge of the loss of its possession or of the loss of the thing.

Property can not be considered abandoned under the law and the possession left vacant for the
finder until the spes recuperandi is gone and the animus revertendi is finally given up.

The theory of abandonment on the part of the owners of the money stolen is fully refuted by the fact
that some weeks after the wreck of the said ship they sent men to the place of the wreck for the
purpose of recovering the property which belonged to them, which was on board the ship at the time
of her sinking.

The mere fact that cargo is sunk with a ship wrecked at sea by no means deprives the owner of said
cargo of his property therein. The owner certainly still had the right to reclaim such property and to
recover the same if possible. If it should be recovered by others, the real owner would be entitled to
recover its value less the necessary expense of recovering the same and carrying it shore by the
most approved appliances for that purpose by others.

If the defendant and his companions had recovered the cargo from the sunken ship for the benefit of
the owners of the same, he might have been entitled to compensation of his labor, but when he
entered the sunken ship and took therefrom, by force, the property of another before actual
abandonment by the owner and appropriated the same to his own use, he was guilty of the crime of
robbery.

The evidence adduced during the trial in the lower court fully shows that the defendant did commit
such acts in the manner and form as charged in the complaint.
Victoriano Encarnacion vs Nieves Amigo, GR No. 169793,September 15, 2006

Posted by Pius Morados on November 29, 2011

(Civil Procedure – Jurisdiction, Real Action, Actions for recovery of Real Property)

Facts: On April 11, 1995, petitioner became the owner of a parcel of land by virtue of a waiver of
rights executed by his mother-in-law, which he thereafter subdivided into two lots.

Sometime in 1985, respondent allegedly entered the premise and took possession of a portion of the
property without the permission of the predecessor-in-interest of the said property.

On March 2, 2001, petitioner filed a complaint for ejectment (unlawful detainer) with the MTC after
his February 1, 2001 letter to the respondent demanding that the latter vacate the premises
remained unheeded. The letter was received by the respondent on February 12, 2001.

Respondent alleged that he has been in actual possession and occupation of a portion of the subject
land since 1968.

The MTC rendered judgment in favor of the plaintiff, but the RTC dismissed the case on appeal, on
the ground that the MTC has no jurisdiction over the case. Hence the latter acquired no appellate
jurisdiction over thereof.

Petitioner filed a petition for review before the Court of Appeals, which remanded the case to the
RTC for the proper action.

Issue: WON the proper action in this case is unlawful detainer.

Held: No.
The three kinds of actions for recovery of real property are:

Accion interdictal, or an ejectment proceeding which may be either forcible or unlawful detainer,
which is a summary action for recovery of physical possession where the dispossession has not
lasted for more than one year, and should be brought with the MTC.

Accion publiciana or the plenary action for the recovery of the real right of possession, which should
be brought in the RTC when the dispossession has lasted for more than one year.

Accion reinvindicatoria, which is an action for the recovery of ownership which must be brought in
the RTC.

The remedies of forcible entry and unlawful detainer are granted to a person deprived of the
possession of any land or building by force, intimidation, threat, strategy, or stealth, or a lessor,
vendor, vendee, or other person against whom the possession of any land or building is unlawfully
withheld after the expiration or termination of the right to hold possession by virtue of any contract,
express or implied, or the legal representatives or assigns of any such lessor, vendor, vendee, or
other person. If the dispossession has not lasted for more than one year, an ejectment proceeding
is proper and the proper MTC acquires jurisdiction. On the other hand, if the dispossession lasted for
more than one year, the proper action to be filed is an accion publiciana which should be brought to
the proper RTC.

Petitioner became the owner of the subject lot in 1995 and has been since that time deprived
possession of a portion thereof. From the date of the petitioner’s dispossession in 1995 up to his
filing of his complaint for ejectment in 2001, almost 6 years have elapsed. The length of time that the
petitioner was dispossessed of his property made his cause of action beyond the ambit of an accion
interdictal and effectively made it one for accion publiciana. After the lapse of the one-year period,
the suit must be commenced in the RTC via an accion publiciana which is a suit for recovery of the
right to possess.

Note: The RTC should have taken cognizance of the case. If the case is tried on the merits by the
Municipal Court without jurisdiction over the subject matter, the RTC on appeal may no longer
dismiss the case if it has original jurisdiction thereof. Moreover, the RTC shall no longer try the case
on the merits, but shall decide the case on the basis of the evidence presented in the lower court,
without prejudice to the admission of the amended pleadings and additional evidence in the interest
of justice.
BPI Family Bank v. Franco
Facts:

An ostensible fraud perpetrated on the petitioner BPI Family Bank (BPI-FB) allegedly by respondent
Amado Franco in conspiracy with other individuals, some of whom opened and maintained separate
accounts with BPI-FB, San Francisco del Monte (SFDM) branch, in a series of transactions.

On August 15, 1989, Tevesteco Arrastre-Stevedoring Co., Inc. opened a savings and current account with
BPI-FB. Soon thereafter, or on August 25, 1989, First Metro Investment Corporation (FMIC) also opened
a time deposit account with the same branch of BPI-FB with a deposit of P100,000,000.00, to mature
one year thence.

Subsequently, on August 31, 1989, Franco opened three accounts, namely, a current, savings, and time
deposit, with BPI-FB. The current and savings accounts were respectively funded with an initial deposit
of P500,000.00 each, while the time deposit account had P1,000,000.00 with a maturity date of August
31, 1990. The total amount of P2,000,000.00 used to open these accounts is traceable to a check issued
by Tevesteco allegedly in consideration of Franco's introduction of Eladio Teves, who was looking for a
conduit bank to facilitate Tevesteco's business transactions, to Jaime Sebastian, who was then BPI-FB
SFDM's Branch Manager. In turn, the funding for the P2,000,000.00 check was part of the
P80,000,000.00 debited by BPI-FB from FMIC's time deposit account and credited to Tevesteco's current
account pursuant to an Authority to Debit purportedly signed by FMIC's officers.

It appears, however, that the signatures of FMIC's officers on the Authority to Debit were forged. On
September 4, 1989, Antonio Ong, upon being shown the Authority to Debit, personally declared his
signature therein to be a forgery. Unfortunately, Tevesteco had already effected several withdrawals
from its current account (to which had been credited the P80,000,000.00 covered by the forged
Authority to Debit) amounting to P37,455,410.54, including the P2,000,000.00 paid to Franco.

On September 8, 1989, impelled by the need to protect its interests in light of FMIC's forgery claim, BPI-
FB, thru its Senior Vice-President, Severino Coronacion, instructed Jesus Arangorin to debit Franco's
savings and current accounts for the amounts remaining therein. However, Franco's time deposit
account could not be debited due to the capacity limitations of BPI-FB's computer.

In the meantime, two checks drawn by Franco against his BPI-FB current account were dishonored upon
presentment for payment, and stamped with a notation "account under garnishment." Apparently,
Franco's current account was garnished by virtue of an Order of Attachment issued by the Regional Trial
Court of Makati (Makati RTC) in Civil Case No. 89-4996 (Makati Case), which had been filed by BPI-FB
against Franco et al.,[14] to recover the P37,455,410.54 representing Tevesteco's total withdrawals from
its account.

Issue:

Whether or not Franco had a better right in the deposits in the subject accounts which are part of the
proceeds of a forged Authority to Debit

Held:

BPI-FB cannot unilaterally freeze Franco's accounts and preclude him from withdrawing his deposits.
However, contrary to the appellate court's ruling, the Court held that Franco is not entitled to unearned
interest on the time deposit as well as to moral and exemplary damages.

BPI-FB urges the Court that the legal consequence of FMIC's forgery claim is that the money transferred
by BPI-FB to Tevesteco is its own, and considering that it was able to recover possession of the same
when the money was redeposited by Franco, it had the right to set up its ownership thereon and freeze
Franco's accounts.

To bolster its position, BPI-FB cites Article 559 of the Civil Code, which provides:

Article 559. 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 or 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.

BPI-FB's argument is unsound. To begin with, the movable property mentioned in Article 559 of the Civil
Code pertains to a specific or determinate thing. A determinate or specific thing is one that is
individualized and can be identified or distinguished from others of the same kind.

In this case, the deposit in Franco's accounts consists of money which, albeit characterized as a movable,
is generic and fungible.The quality of being fungible depends upon the possibility of the property,
because of its nature or the will of the parties, being substituted by others of the same kind, not having
a distinct individuality.

Significantly, while Article 559 permits an owner who has lost or has been unlawfully deprived of a
movable to recover the exact same thing from the current possessor, BPI-FB simply claims ownership of
the equivalent amount of money, i.e., the value thereof, which it had mistakenly debited from FMIC's
account and credited to Tevesteco's, and subsequently traced to Franco's account. In fact, this is what
BPI-FB did in filing the Makati Case against Franco, et al. It staked its claim on the money itself which
passed from one account to another, commencing with the forged Authority to Debit.

It bears emphasizing that money bears no earmarks of peculiar ownership, and this characteristic is all
the more manifest in the instant case which involves money in a banking transaction gone awry. Its
primary function is to pass from hand to hand as a medium of exchange, without other evidence of its
title. Money, which had passed through various transactions in the general course of banking business,
even if of traceable origin, is no exception.

JOSE B. AZNAR,  plaintiff-appellant,

vs.
RAFAEL YAPDIANGCO,  defendant-appellee;
TEODORO SANTOS,  intervenor-appellee.
G.R. No. L-18536. March 31, 1965.

Rule Synopsis

The rightful owner of the thing unlawfully deprived thereof has better
right than a person who subsequently acquires the same in good
faith and for value.

Case Summary

Teodoro Santos sold his car to one Vicente Marella. The latter,
however, fraudulently took possession of the car by stealing it, and
thereafter selling the same to one Jose B. Aznar. The latter was
found by the lower courts to be a buyer in good faith and for a
valuable consideration. The stealing incident, however, had been
reported to the police who seized and confiscated the subjective
vehicle.

Thus, Aznar filed a complaint for replevin against Yapdiangco of the

Philippine Constabulary. Santos intervened.

The CFI ruled that Teodoro Santos is entitled to the possession of

the property. The SC affirmed.

Issues resolved —

Who has the better right to the automobile?

HELD – TEODORO SANTOS.

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Art. 559 is applicable in this case, to wit: as regards a personal

property, a person who either a) lost the thing, or b) unlawfully
deprived thereof, may recover the same from the person who has
possession thereof without reimbursement, except when the latter
acquired it from a public auction, in which case, reimbursement is in
order. The rule holds even if the person who obtained possession of
the same acquired it in good faith and for value. In this case, it was
established that Santos was unlawfully deprived of the subject
property. He may thus recover the same from the current
possessor, Aznar.

Marella, from whom Aznar obtained his title, is not vested with the
ownership of the car in question as there had been no delivery to
him, he merely took possession thereof by stealing the same.

The equitable principle that where one of two innocent persons

must suffer by a fraud perpetrated by another, the law imposes the
loss upon the party who, by his misplaced confidence, has enabled
the fraud to be committed, cannot be applied in a case which is
covered by an express provision of Art. 559.

EDCA Publishing v. 184 SCRA 614

184 SCRA 614

FACTS:

Professor Jose Cruz, identified himself as such placed an order by telephone with the EDCA for 406
books, payable on delivery. Corresponding invoice were prepared and delivered the books as
ordered, for which Cruz issued a personal check covering the purchase price. Cruz sold 120 of the
books to private respondent Leonor Santos who, after verifying the seller’s ownership from the
invoice he showed her, paid him P1,700.00.

Over investigation it was made known that Jose Cruz’s real name is Tomas de la Peña. Petitioners
with the assistance of authority, seized without warrant the books sold to the respondent Leonor
Santos and delivered it to the petitioners.

ISSUE:

Whether or not the petitioner may seize the books from private respondent because it has been
unlawfully deprived of the books due to the dishonored check issued by the impostor.

RULING:

No. In its extended memorandum, EDCA cites numerous cases holding that the owner who has
been unlawfully deprived of personal property is entitled to its recovery except only where the
property was purchased at a public sale, in which event its return is subject to reimbursement of the
purchase price. The petitioner is begging the question. It is putting the cart before the horse. Unlike
in the cases invoked, it has yet to be established in the case at bar that EDCA has been unlawfully
deprived of the books.

Actual delivery of the books having been made, Cruz acquired ownership over the books which he
could then validly transfer to the private respondents. The fact that he had not yet paid for them to
EDCA was a matter between him and EDCA and did not impair the title acquired by the private
respondents to the books.
[ G.R. No. 152809, August 03, 2006 ] MERCEDES MORALIDAD, petitioner, VS. SPS. DIOSDADO

PERNES AND ARLENE PERNES, respondents. FACTS: Petitioner is the registered owner of a

parcel of land in Davao City which is the subject of the controversy. The petitioner had worked in

U.S.A. for years until retirement. Being single, she would usually stay in the house of her niece,

respondent Arlene Pernes, at Mandug, Davao City during her vacation and that in 1986, when she

received news from Arlene that Mandug was infested by NPA rebels and many women and children

were victims of crossfire between government troops and the insurgents, she immediately sent

money to buy a lot in Davao City proper where Arlene and her family could transfer and settle down.

Petitioner wanted the property to be also available to any of her kins wishing to live and settle in

Davao City and made known this intention in a document she executed on July 21, 1986. which

reads: I, MERCEDES VIA MORALIDAD, of legal age, single, 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; 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. In her retirement, 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 which

resulted in violent confrontations and the filing of suits at the barangay lupon and to the Ombudsman

for conduct unbecoming of public servants and at the MTCC, an ejectment suit for unlawful detainer.

The MTCC rendered judgment for the petitioner directing the defendants to vacate the premises and

to yield peaceful possession thereof to plaintiff. Respondent spouses appealed to the RTC where

the decision of the MTCC was reversed, holding that respondents possession of the property in

question was not by mere tolerance of the petitioner but rather by her express consent. It further

ruled that Article 1678 of the Civil Code on reimbursement of improvements introduced is
inapplicable since said provision contemplates of a lessor-lessee arrangement, which was not the

factual milieu obtaining in the case. Instead, the RTC ruled that what governed the parties

relationship are Articles 448 and 546 of the Civil Code. Petitioner went to the CA wherein her petition

was denied on the ground that it is still premature to apply Articles 448 and 546 of the Civil Code

considering that the issue of whether respondents right to possess a portion of petitioners land had

already expired or was already terminated was not yet resolved. The CA further ruled that what

governs the rights of the parties is the law on usufruct but petitioner failed to establish that

respondents right to possess had already ceased. ISSUES: What provisions of the Civil Code should

govern the rights of the parties. Whether or not the respondents right to possess the land had been

terminated. HELD: 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. 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, made known her intention to give respondents and her other kins the right to use and

to enjoy the fruits of her property and the respondents were 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 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. 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: 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 constitutes the title creating, and sets forth the conditions of the usufruct.

Paragraph #3 thereof states 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. 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. 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 That 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 kins constitutes a resolutory

condition which, by express wish of the petitioner, extinguishes the usufruct. 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. 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. 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. We quote Articles 579 and 580 of the

Civil Code: 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 Art. 580. The
usufructuary may set off the improvements he may have made on the property against any damage

to the same.

Hemedes v. CA
MAXIMA HEMEDES v. THE HONORABLE COURT OF APPEALS, DOMINIUM REALTY AND
CONSTRUCTION CORPORATION, ENRIQUE D. HEMEDES, and R & B INSURANCE
CORPORATION
G.R. No. 107132. October 8, 1999
Gonzaga-Reyes, J.

FACTS:
The instant controversy involves a question of ownership over an unregistered parcel
of land, situated in Sala, Cabuyao, Laguna. It was originally owned by the late Jose
Hemedes, father of Maxima Hemedes and Enrique D. Hemedes. Jose Hemedes
executed a document entitled Donation Inter Vivos With Resolutory Condition whereby
he conveyed ownership over the subject land, together with all its improvements, in
favor of his third wife, Justa Kauapin, subject to the following resolutory conditions:

(a) Upon the death or remarriage of the DONEE, the title to the property donated shall
revert to any of the children, or their heirs, of the DONOR expressly designated by the
DONEE in a public document conveying the property to the latter; or
(b) In absence of such an express designation made by the DONEE before her death or
remarriage contained in a public instrument as above provided, the title to the
property shall automatically revert to the legal heirs of the DONOR in common.

Pursuant to the first condition abovementioned, Justa Kausapin executed a Deed of

Conveyance of Unregistered Real Property by Reversion conveying to Maxima
Hemedes the subject property except the possession and enjoyment of the said
property which shall remain vested in Justa Kausapin during her lifetime, or
widowhood and which upon her death or remarriage shall also automatically revert to,
and be transferred to Maxima Hemedes.

Maxima Hemedes and her husband Raul Rodriguez constituted a real estate mortgage
over the subject property in its favor to serve as security for a loan which they obtained
in the amount of P6,000.00., R & B Insurance extrajudicially foreclosed the mortgage
since Maxima Hemedes failed to pay the loan even after it became due. The land was
sold at a public auction with R & B Insurance as the highest bidder and a certificate of
sale was issued by the sheriff in its favor. Since Maxima Hemedes failed to redeem the
property within the redemption period, R & B Insurance executed an Affidavit of
Consolidation. The annotation of usufruct in favor of Justa Kausapin was maintained in
the new title.

Despite the earlier conveyance of the subject land in favor of Maxima Hemedes, Justa
Kausapin executed whereby she transferred the same land to her stepson Enrique D.
Hemedes, pursuant to the resolutory condition in the deed of donation executed in her
favor by her late husband Jose Hemedes. Enriques D. Hemedes sold the property to
Dominium Realty and Construction Corporation (Dominium). Dominium leased the
property to its sister corporation Asia Brewery, Inc. (Asia Brewery) who, even before the
signing of the contract of lease, constructed two warehouses made of steel and
asbestos costing about P10,000,000.00 each. Upon learning of Asia Brewery’s
constructions upon the subject property, R & B Insurance sent it a letter informing the
former of its ownership of the property as evidenced by TCT No. 41985 issued in its
favor and of its right to appropriate the constructions since Asia Brewery is a builder in
bad faith.

Dominium and Enrique D. Hemedes filed a complaint with the Court of First Instance of
Binan, Laguna for the annulment of TCT No. 41985 issued in favor of R & B Insurance
and/or the reconveyance to Dominium of the subject property. Specifically, the
complaint alleged that Dominium was the absolute owner of the subject property by
virtue of the deed of sale executed by Enrique D. Hemedes, who in turn obtained
ownership of the land from Justa Kausapin, as evidenced by the Kasunduan. The
plaintiffs asserted that Justa Kausapin never transferred the land to Maxima Hemedes
and that Enrique D. Hemedes had no knowledge of the registration proceedings
initiated by Maxima Hemedes.

The trial court rendered judgment in favor of plaintiffs Dominium and Enrique D.
Hemedes, The Court of Appeals affirmed the assailed decision in toto.

ISSUE:
Which of the two conveyances by Justa Kausapin, the first in favor of Maxima Hemedes
and the second in favor of Enrique D. Hemedes, effectively transferred ownership over
the subject land?
HELD:
Public respondents finding that the Deed of Conveyance of Unregistered Real Property
By Reversion executed by Justa Kausapin in favor of Maxima Hemedes is spurious is
not supported by the factual findings in this case. In upholding the deed of conveyance
in favor of Maxima Hemedes, we must concomitantly rule that Enrique D. Hemedes
and his transferee, Dominium, did not acquire any rights over the subject property.
Justa Kausapin sought to transfer to her stepson exactly what she had earlier
transferred to Maxima Hemedes the ownership of the subject property pursuant to the
first condition stipulated in the deed of donation executed by her husband. Thus, the
donation in favor of Enrique D. Hemedes is null and void for the purported object
thereof did not exist at the time of the transfer, having already been transferred to his
sister. Similarly, the sale of the subject property by Enrique D. Hemedes to Dominium is
also a nullity for the latter cannot acquire more rights than its predecessor-in-interest
and is definitely not an innocent purchaser for value since Enrique D. Hemedes did not
present any certificate of title upon which it relied.

Whether or not R&B Insurance is a purchaser in good faith

R & B Insurance alleges that, contrary to public respondents ruling, the presence of an
encumbrance on the certificate of title is no reason for the purchaser or a prospective
mortgagee to look beyond the face of the certificate of title. We sustain petitioner R & B
Insurances claim that it is entitled to the protection of a mortgagee in good faith.

The annotation of usufructuary rights in favor of Justa Kausapin upon Maxima

Hemedes OCT does not impose upon R & B Insurance the obligation to investigate the
validity of its mortgagor’s title. Usufruct gives a right to enjoy the property of another
with the obligation of preserving its form and substance. The usufructuary is entitled to
all the natural, industrial and civil fruits of the property and may personally enjoy the
thing in usufruct, lease it to another, or alienate his right of usufruct, even by a
gratuitous title, but all the contracts he may enter into as such usufructuary shall
terminate upon the expiration of the usufruct.

Clearly, only the jus utendi and jus fruendi over the property is transferred to the
usufructuary. The owner of the property maintains the jus disponendi or the power to
alienate, encumber, transform, and even destroy the same. This right is embodied in
the Civil Code, which provides that the owner of the property, the usufruct of which is
held by another, may alienate it, although he cannot alter the propertys form or
substance, or do anything which may be prejudicial to the usufructuary.

There is no doubt that the owner may validly mortgage the property in favor of a third
person and the law provides that, in such a case, the usufructuary shall not be obliged
to pay the debt of the mortgagor, and should the immovable be attached or sold
judicially for the payment of the debt, the owner shall be liable to the usufructuary for
whatever the latter may lose by reason thereof.

Bachrach v. Seifert [G.R. No. L-2659.

October 12, 1950.]
Posted by LA D Y ESQ U IRE  on J U LY 4, 2012

Facts:
The deceased E. M. Bachrach, who left no forced heir except his widow Mary McDonald
Bachrach, in his last will and testament made various legacies in cash and willed the
remainder of his estate. The estate of E. M. Bachrach, as owner of 108,000 shares of
stock of the Atok-Big Wedge Mining Co., Inc., received from the latter 54,000 shares
representing 50 per cent stock dividend on the said 108,000 shares. On June 10, 1948,
Mary McDonald Bachrach, as usufructuary or life tenant of the estate, petitioned the
lower court to authorize the Peoples Bank and Trust Company, as administrator of the
estate of E. M. Bachrach, to transfer to her the said 54,000 shares of stock dividend by
indorsing and delivering to her the corresponding certificate of stock, claiming that said
dividend, although paid out in the form of stock, is fruit or income and therefore
belonged to her as usufructuary or life tenant. Sophie Siefert and Elisa Elianoff, legal
heirs of the deceased, opposed said petition on the ground that the stock dividend in
question was not income but formed part of the capital and therefore belonged not to the
usufructuary but to the remainderman. While appellants admit that a cash dividend is an
income, they contend that a stock dividend is not, but merely represents an addition to the
invested capital.
Issue:
Whether or not a dividend is an income and whether it should go to the usufructuary.
Held:
The usufructuary shall be entitled to receive all the natural, industrial, and civil fruits of
the property in usufruct. The 108,000 shares of stock are part of the property in usufruct.
The 54,000 shares of stock dividend are civil fruits of the original investment. They
represent profits, and the delivery of the certificate of stock covering said dividend is
equivalent to the payment of said profits. Said shares may be sold independently of the
original shares, just as the offspring of a domestic animal may be sold independently of
its mother. If the dividend be in fact a profit, although declared in stock, it should be held
to be income. A dividend, whether in the form of cash or stock, is income and,
consequently, should go to the usufructuary, taking into consideration that a stock
dividend as well as a cash dividend can be declared only out of profits of the corporation,
for if it were declared out of the capital it would be a serious violation of the law.
Under the Massachusetts rule, a stock dividend is considered part of the capital and
belongs to the remainderman; while under the Pennsylvania rule, all earnings of a
corporation, when declared as dividends in whatever form, made during the lifetime of
the usufructuary, belong to the latter. The Pennsylvania rule is more in accord with our
statutory laws than the Massachusetts rule.